Global trade relationships and agreements are moving in very different directions. The public relations press releases hide the undercurrents that are driving the formations of alternative economic alliances. While the G 20, markets its all inclusive umbrella policy forums, the mere formation of a BRICS counterweight forecasts deep and fundamental differences. So what is really behind the creation of a different approach to the post WWII dominate U.S. lead model? A clue can be found in an attempt to modify the operations and direction of IMF functions.
Announced in the Russian press, BRICS to propose IMF reform at G20 summit, is a pressure attempt to move the center of power away from current synergism.
“At the G20 summit in the Australian city of Brisbane on November 15-16, Russia and other BRICS countries (Brazil, India, China and South Africa) will propose alternative solutions concerning the reform of the International Monetary Fund, involving, in particular, gradual implementation of reforms, Russian G20 Sherpa Svetlana Lukash told reporters.
“The most important thing for us is the still unresolved G20 problem of the IMF reform,” Lukash said. She recalled the U.S. Congress has yet to ratify the 2010 resolution. “Not only does it thwart the process of renewing the IMF in accordance with the current reality where we see a big rise in the role of emerging economies. It also prevents the decisions to double the IMF capital from coming into force,” she said.”
The appearance of maintaining a working relationship among opposing interests may present an assuring PR message, but who really believes that the path to a new cold war is paved with mutual cooperation? Impetus for a parallel financial system is certainly based more on political objective than commerce or economic benefits.
The Washington Post describes What the new bank of BRICS is all about in this manner.
“Heads of state from Brazil, Russia, India, China, and South Africa (the so-called BRICS countries) agreed to establish a New Development Bank (NDB) at their summit meeting. They will have a president (an Indian for the first six years), a Board of Governors Chair (a Russian), a Board of Directors Chair (a Brazilian), and a headquarters (in Shanghai). What is the purpose of this BRICS bank? Why have these countries created it now? And, what implications does it have for the global development-finance landscape?
The “what” is relatively straightforward. The NDB has been given $50 billion in initial capital. As with similar initiatives in other regions (see below), the BRICS bank appears to work on an equal-share voting basis, with each of the five signatories contributing $10 billion. The capital base is to be used to finance infrastructure and “sustainable development” projects in the BRICS countries initially, but other low and middle-income countries will be able buy in and apply for funding. BRICS countries have also created a $100 billion Contingency Reserve Arrangement (CRA), meant to provide additional liquidity protection to member countries during balance of payments problems. The CRA—unlike the pool of contributed capital to the BRICS bank, which is equally shared—is being funded 41 percent by China, 18 percent from Brazil, India, and Russia, and 5 percent from South Africa.”
China’s motivation to participate in BRICS banking is most interesting and revealing. Since it is not absolutely essential for China to be a member of BRICS, Gudrun Wacker, from the German Institute for International and Security Affairs presents this finding in a report, China’s role in G20 / BRICS and Implications, may shed an insight on their reasoning.
“The future of BRICS depends on the future performance of the G7/8 and G20: If the G20 develops into a real coordination mechanism, there might be less Chinese interest in BRICS. The future prospects of BRICS were presented as less promising than those of the G20, since BRICS will not be able to solve global problems. It is not yet clear whether the main deliverable of BRICS will be directed at cooperation among its members or at third countries. While the idea of BRIC as a group was originally picked up by Russia (the invitation to the first summit, as a move toward “extension” of the strategic triangle Russia, China. India?), its members are now all active in certain fields. For China, it is also an important effort to emerge from its isolation (Copenhagen climate summit). Another factor shaping the future of BRICS might be the development of US-China relations: While all interview partners agreed that BRICS does not aim at creating a new, anti-Western world order, it can be seen as a response to the US-led world order.”
The methodology of Mr. Wacker’s research relied upon comments from interviews. Relying on sentiments that BRICS goal is not bent on developing a counterbalance to Western banking hegemony is poppycock. Geopolitical dimensions in international affairs have Russia as the latest bogyman. Any economic analysis that ignores power brokers desperate attempt to shift the causes of a failing world economy onto the backs of enemy nations is flawed.
Also, the notion that major economic transnational corporatists operate with altruism for third world countries is sheer lunacy. All these trade organizations are attempts to position vying interests to settle for a subservient role to a subordinate structure under a global debt creation banking system.
Attempts to scare the populist into believing that Global Warming inaction raises specter of war over climate change are absurd. “At the G20 summit, other nations overrode host Australia’s attempts to keep climate change off the agenda and agreed to call for strong action with the aim of adopting a binding protocol at the Paris conference.” Such initiatives are pure political “PC” orthodoxy and actually diminish prosperity.
The great schism in trade among nations is that some countries are not willing to lie down with diseased parasites. This should not be construed to favor the emergence of the BRICS union as a shining future. However, what it does purport is that the road to the NWO modeling for globalism by entrenched financial elites has produced opposition.
Conflict is the normal human condition, and especially when money is used as a medium of world control and domination is the goal. The G 20 is useless. Breaking the banking monopoly that fosters endless terror and war is the universal objective for the inhabitants of this planet. Another unsavory photo op for world leaders just produces more nausea.
How is your life going under the Global Empire? If you answer honestly, for non billionaires, the response must reflect disappointment if not immense distress. Middle America stands on the precipice of oblivion. While the recent past decades have shown steep declines in financial security and net wealth, the future looks much more ominous. The link between the shift to an internationalist de-industrialization economy and open border immigration has hit the United States hard. This harsh reality is routinely denied in the financial press, but the social chaos that engulfs society is largely caused by this betrayal mindset. Corporatists are waging war against the American public.
Summing up the battle lines is the quintessential voice of an America First philosophy. Pat Buchanan on Free Trade is a collection of quotations and references that should be a must read for every displaced citizen. And that group includes virtually everyone.
“Good for global business” isn’t necessarily good for US
“Global capitalists have become acolytes of global governance. They wish to see national sovereignty diminished and sanctions abolished. Where yesterday American businesses suffered damage to their good name for selling scrap iron to Japan before Pearl Harbor, today [war materiel is routinely exported] to potentially hostile nations. Once it was true that what was good the Fortune 500 was good for America. That is no longer true, and what is good for America must take precedence.”
Source: “A Republic, Not an Empire,” p.349 , Oct 9, 1999
The most puzzling malady that penetrates the “PC” culture is a fear of confronting the direct consequences of encouraging an invasion of illegal’s into the country. The disconnect that sweeps across national borders is not isolated just to the United States. Western Europe is not only in decay but is on the verge of social and economic collapse.
Demetrios Papademetriou, PhD, Director of the Migration Policy Institute, wrote in his Sep. 2005 Migration Policy Institute essay “The Global Struggle with Illegal Migration: No End in Sight”: How Are Illegal Immigration and Globalization Related?
“For nearly two decades now, capital and the market for goods, services, and workers of many types have weaved an ever more intricate web of global economic and social interdependence… No aspect of this interdependence seems to be more visible to the public of advanced industrial societies than the movement of people. And no part of that movement is proving pricklier to manage effectively, or more difficult for publics to come to terms with, than irregular (also known as unauthorized, undocumented, or illegal) migration…”
Dr. Papademetriou’s assumption that interdependency is the new normal may be supported with the procession of the Trilateral Commission’s “New International Economic Order”. Nonetheless, the destruction of national sovereignty is a price that no country can afford to adopt, much less pay and remain a nation. Interdependency is the death knell of traditional values, autonomous commerce and individual civil liberties. With the ringing of the bell at the NY Stock exchange, the sound of prosperity goes deaf for the populist, while globalist elites extract the last pound of flesh from an intentionally designed consolidation of a Corporatocracy economy.
The fate of the world is at stake if the forces of globalization are left to complete their total domination of monetary and financial control. It is just as important to prevent the next bipartisan arrangement to grant effective amnesty to millions of illegal foreigners, who have shown little interest to assimilate or adopt the heritage and values of our founding principles.
Warren Mass wrote over a year ago in Permanent Amnesty, Temporary Border.
“An important part of regulating legal immigration, in addition to evaluating each prospective immigrant’s ability to become a productive, law-abiding citizen, is to determine how many immigrants the United States is capable of absorbing each year, taking into consideration the impact on our nation’s economy and culture.”
If this standard needs to apply to those who apply for citizenship, by what absurd twist of logic or sanity pertains to President Obama’s intentions of issuing executive orders that are clearly unconstitutional? How insulting it is to hard press citizens, relegated to enduring impoverishment from off shoring livable wage jobs, while awarding effective amnesty to illegals.
Columnist Glenn R. Jackson review of author Kenneth Buchdahl’s book, Dismantling The American Dream: Globalization, Free Trade, immigration, Unemployment, Poverty, Debt, Foreign Dependency hits the mark.
“First and foremost it is good to see the recognition by Buchdahl of American culture as critical to the building of the American Dream. As Buchdahl writes the development of a culture is grounded in a unique American personality and intricate system of values and beliefs that is responsible for America’s enviable situation. And it is that enviable situation that has contributed to creating the forces that are working rapidly, knowingly or not, to dismantle the American Dream.
Dismantling the American Dream chronicles the unintended impact of America’s pop culture belief in globalization as a force for good in our economy and the failure of leadership to recognize that belief gone awry. America’s political leaders continued belief in free trade and give-away trade deals, in the face of the near deathblow of NAFTA to American manufacturing is but one of the delusions of globalization that Buchdahl lays bare.”
The interjection of cultural aspects may well be the missing link that escapes most chronicles on current events. Documenting the actual results from Free Trade Treaties, should in and of itself win the intellectual argument that economic destruction of Middle America has already happened. Add in the deliberate call for mass migration and social incentives to cross the border has created the latest flood in undocumented aliens.
When Democracy Now asks, Obama & McConnell Pledge Cooperation; Will Fast-Tracking Secretive TPP Trade Deal Top Their Agenda?, and presents Ralph Nader on TPP and the “Unstoppable” Left-Right Anti-Corporate Movement, one has hope that the Buchanan Brigades message is being heard.
With the celebrity coronation that the Democrats are showering on their new favorite daughter, the “Pocahontas Princess”, Elizabeth Warren’s Crusade Against Disastrous “Free Trade” Agreements, is welcomed.
An inquiry was made to NY Senator Charles E. Schumer on the TPA, Trade Priorities Act of 2014 (S.1900). His reply can be read on this link.
An alliance among anti-free trade factions from all ideological camps is necessary to stop the globalist juggernaut. Even if such a coalition could be grown, the likelihood that linkage to the need to stop illegal immigration and opposition to amnesty, would be frosty.
This brings up the opportunity to interject the appeal, WE MUST NOT SURRENDER TO IMMIGRATION AMNESTY, by Frosty Wooldridge. ““Why would any member of Congress who opposes executive amnesty provide President Obama the funds to carry it out? A Republican majority must force congressional Democrats to answer this question through their votes”.
Likewise, why would as covered in the New American essay, Republicans to Obama: We Will Give You Trade Promotion Authority, patriots want to grant “fast track” authority to a President, who is defiant to congressional constitutional separation of powers?
“Fast track authority eventually expired on April 16, 1994, and was not reauthorized by Congress until the passage of the Bipartisan Trade Promotion Authority Act (BPTAA) of 2002. BPTAA reinstated fast track authority renamed as “trade promotion authority” (TPA), which expired in 2007. In 2012, President Obama requested renewal of TPA/fast track authority to complete negotiations for the TPP and TTIP.”
The answer should be apparent that any support of “fast track” or for TPP is a vote bought with globalist control. If it is so obvious that such influence is at play in trade deals, why are so many confused activists not able to see through the “Open Border” fraud and act upon the best interests for American workers and families?
That taboo culture factor, covered in the Buchdahl book explains the blind spot from the Loony Left. A review of a pro immigration site, Open Borders will demonstrate a systemic disconnect from reality. Often Libertarian purists, also fall under the spell of a transcendental fantasy. To their credit, Open Borders presents the concept of CITIZENISM and provides the following its key features.
Citizenism places substantially greater weight on the rights and interests of citizens than non-citizens, though it operates within moral side-constraints.
Citizenism is about current citizens, not about the people who may become citizens as a result of immigration or deportation policy.
Citizenism, as conceived by its original proponent Sailer, is both about the individual ethics of voters and about the responsibilities of elected representatives.
Citizenism is about loyalty, not admiration, toward one’s fellow citizens.
If you understand the destructive nature of corporatist trade agreements that only benefit transnational conglomerates, while poisoning economic commerce for Middle Americans, why would you not oppose the lunacy of unrestrictive mass migration? The imperative moral directive is to protect and defend your own nation, its traditional culture and responsible citizens.
Saving the world is a concept that resides in the sick minds of the Save the Planet Kill Yourself mindset. If they are so devoted to a globalist utopia, the influx of trespassers must be leaving their own homeland in better shape. Just how well is life south of the border doing?
The attention that Taibbi is receiving for the Rolling Stone essay, The $9 Billion Witness: Meet JPMorgan Chase’s Worst Nightmare, may push forward a serious debate on the systemic corruption that is common knowledge among informed observers of the financial structure. Zero Hedge can always be depended upon to incisively sum up the issue.
“In reality, there is nothing surprising in Matt Taibbi’s latest piece since returning to Rolling Stone from the Intercept, as it tells a story everyone is by now is all too familiar with: a former bank employee (in this case Alayne Fleischmann) who was a worker in a bank’s (in this case JPM) mortgage operations group, where she observed and engaged in what she describes as “massive criminal securities fraud” and who was fired after trying to bring the attention of those above her to said “criminal” activity.
The story doesn’t end there, and as Carmen Segarra already showed, when she revealed that Goldman runs the NY Fed, once Alayne was let go and tried to “whistleblow” on the house of Jimon from the outside, she found the that US Department of Justice headed by Eric Holder is just as, if not more, corrupt, and in his desperate attempt to prevent discovery and bring JPM et al to justice, he would stretch the statue of limitations on frauds committed during the crisis long enough to where nobody had any legal recourse any more, up to and including the US taxpayer.”
Well, that is a sober and tragic assessment. Even more heartbreaking is the statement made by Ms. Fleischmann as reported in Straight Line Logic.
“And now, with Holder about to leave office and his Justice Department reportedly wrapping up its final settlements, the state is effectively putting the finishing touches on what will amount to a sweeping, industrywide effort to bury the facts of a whole generation of Wall Street corruption. “I could be sued into bankruptcy,” she says. “I could lose my license to practice law. I could lose everything. But if we don’t start speaking up, then this really is all we’re going to get: the biggest financial cover-up in history.”
The only coherent response that regular citizens can exert, when dealing with the mega financial houses, is to avoid entanglements whenever possible. What good is it to establish accounts, whether as loans, savings or investments, when the rules of survival are stacked against main street customers?
Firms like JP Morgan or Goldman are not terrified by fines because they are protected by the “To Big To Fail” culture. Bailouts are a way of life and infusion of easy money into the liquidity flow of balance sheets employ the most creative accounting techniques to cover up accurate net worth.
The threat of principals actually doing jail time is so remote that the probability is far greater that the next Secretary of the Treasury will come from their ranks.
This plight produces a true dilemma of confidence. In this environment only brave souls dare become a whistleblower. Public support for such individuals like Fleischmann and Segarra is faint because neither are public persons, readily recognized by most people. This lack of notoriety as individuals is far less important than the criminal activity both are documenting.
However, in a media driven and social networking society, the personality of celebrity far out paces the substance of the offenses. Matt Taibbi’s star persona, deserved or manufactured, illustrates that getting attention through the clutter and noise of the sound bites is possible. For an unknown person, getting your 15 minutes of fame requires even more creative strategies, to expose the basic purpose in the news revelations.
The dying main stream presstitutes will not confront the intrinsic nature of the abuses because their own financial futures depend upon Wall Street support. Yet, struggling Middle America foolishly rely upon their reporting and advice in most financial matters.
JPMorgan Chase’s Worst Nightmare fundamentally is the unwinding of the derivative debt black hole of their making. The essential risk of a collapse and implosion of the financial manipulated markets only grows because no effort or willingness exists to purge the system of crooked companies, practices or individuals. The culture of corruption survives because the pattern of exposing and demanding justice is so brutally punished.
How can meaningful accountability come from internal reform, when the price of disclosure is the end of your professional endeavors and even your livelihood?
Arguments, data and evidence of generational embedded fraud have been made by some of the most intuitive minds on finance and economics. Nonetheless, the degeneracy accelerates. The wolves of Wall Street target their prey when they lobby regulators to allow for more exotic financial products that are designed to fleece the public and place the entire monitory system in greater jeopardy.
Activists rally during elections cycles to pressure the establishment. The Occupy Wall Street movement, misguided on potential solutions, did muster awareness with media exposure. However, most taxpayers do not exert sufficient outrage about the selling out of their financial security.
Stopping “massive criminal securities fraud” is a true national security requirement. Internet revelations can only expose the latest schemes. As stated in the essay, Repeal of Glass-Steagall and the Too Big To Fail Culture, is a major reason for the current unsustainable breakdown in trust and lack of liability consequences for financial institutions.
Take the opportunity of the Alayne Fleischmann disclosures to demand that your newly elected representatives exert the courage to advance a national debate on a major overhaul of the ground rules for Wall Street.
While the prospects are slim that any constructive and critical legislation will come out of the new Congress, public indignation needs to grow and intensify. The battle for economic viability and perseverance of capital is being lost for ordinary citizens. An angry constituency is necessary to confront the outrageous abuses that pass as normal conduct. The sacrifices of Alayne Fleischmann and Carmen Segarra need not be in vain. Mobilize for action; boycott the big banks and security fraudsters.
“It’s not the underlying economics that’s driving things, it’s central bank liquidity.”
— Matt King, Citigroup
Soaring auto sales are not so much a sign of a strong economy as they are an indication of financial hanky-panky. We saw this same type of fakery play out in housing between 2004 – 2006, when prices went through the roof due to a mortgage-lending scam (“subprime”) that crashed the stock market and sent the economy reeling. Now the bigtime money guys are at it again, writing up auto loans for anyone who can sit upright in a chair and scribble an “X” on the dotted line. As a result, car sales have surged to over 16 million for the last 6 months. (A full 7 million more than the low point in January, 2009.) And it’s not hard to see why either. The finance gurus are packaging these sketchy subprimes into bonds, offloading them on eager investors, and recycling the profits into more crappy loans. It’s a perfect circle and it won’t end until the loans start blowing up, jittery investors head for the exits, and Uncle Sugar rides to the rescue with more bailouts.
But we’re getting ahead of ourselves. First take a look at these charts by House of Debt which shows the disparity between auto spending and other types of spending since the end of the slump in 2009.
House of Debt: “New auto purchases have driven the consumer spending recovery to a large degree. The chart below shows the spending recovery for new auto sales and for all other retail spending…
From 2009 to 2013, spending on new autos increased by 40% in nominal terms. All other spending increased by only 20%. Further, excluding autos, 2013 saw lower growth in nominal retail spending than 2012…
The concern is that a lot of auto purchases are being fueled with debt, given a strong recovery in the auto loan market. Below is the net flow of auto loans from 2002 to 2013. It is a net flow because it includes pay downs in addition to new originations. As it shows, auto lending in 2012 and 2013 tops any other year during the previous expansion from 2002 to 2007 (although it is still below the amount of new auto loans in 2000 and 2001).
(“Another Debt-Fueled Spending Spree?” House of Debt)
How about that? So there’s a bigger debt bubble in auto loans today than there was before the bust. But why? Is it because demand is strong, jobs are plentiful, wages are rising, the economy is growing, and people are optimistic about the future?
Heck, no. It’s because rates are low, credit is easy, and dealers are ready to put anyone with a license and a heartbeat into a brand-spanking new car no questions asked. Here are the details from an article in the New York Times titled “In a Subprime Bubble for Used Cars, Borrowers Pay Sky-High Rates” by Jessica Silver-Greenberg and Michael Corkery:
”Auto loans to people with tarnished credit have risen more than 130 percent in the five years since the immediate aftermath of the financial crisis, with roughly one in four new auto loans last year going to borrowers considered subprime — people with credit scores at or below 640.
The explosive growth is being driven by some of the same dynamics that were at work in subprime mortgages. A wave of money is pouring into subprime autos, as the high rates and steady profits of the loans attract investors. Just as Wall Street stoked the boom in mortgages, some of the nation’s biggest banks and private equity firms are feeding the growth in subprime auto loans by investing in lenders and making money available for loans.
And, like subprime mortgages before the financial crisis, many subprime auto loans are bundled into complex bonds and sold as securities by banks to insurance companies, mutual funds and public pension funds — a process that creates ever-greater demand for loans.
The New York Times examined more than 100 bankruptcy court cases, dozens of civil lawsuits against lenders and hundreds of loan documents and found that subprime auto loans can come with interest rates that can exceed 23 percent. The loans were typically at least twice the size of the value of the used cars purchased, including dozens of battered vehicles with mechanical defects hidden from borrowers. Such loans can thrust already vulnerable borrowers further into debt, even propelling some into bankruptcy, according to the court records, as well as interviews with borrowers and lawyers in 19 states.
In another echo of the mortgage boom, The Times investigation also found dozens of loans that included incorrect information about borrowers’ income and employment, leading people who had lost their jobs, were in bankruptcy or were living on Social Security to qualify for loans that they could never afford.” (“In a Subprime Bubble for Used Cars, Borrowers Pay Sky-High Rates”, New York Times)
Can you believe that this kind of chicanery is going on in broad daylight without the regulators stepping in? Think about it for a minute: If the NYT’s journalists can find “dozens of loans that included incorrect information about borrowers’ income and employment”, then why can’t the government regulators? It’s ridiculous. What we’re talking about here is a new version of “liar’s loans” where dealers are helping people who don’t have the means to repay the debt, to fudge the details on their loan application so they can drive off in a shiny new Impala.
Haven’t we seen this movie before?
Here’s more from USA Today: “In the first quarter of 2014, 24.9% of all new-car loans were 73 to 84 months long. Four years ago, less than 10% of loans were that long. In fact, such lengthy terms have pulled the average new-car loan to 66 months. That’s an all-time record.”
7 years to pay off a car? You got to be kidding me? It’s like a second mortgage. And there’s more, too. The average monthly payment and average amount financed hit record highs in the first quarter too. This is from Auto News:
“The average monthly new-vehicle payment was $474 in the first quarter, up 3.3 percent from a year ago. The average monthly used-vehicle payment was $352, up 1.1 percent, Experian Automotive said.
Also in the first quarter, the average amount financed on a new-vehicle loan was $27,612, an increase of $964, or 3.6 percent. For used vehicles, the average amount financed was $17,927, up $395 or 2.3 percent.”
So Americans are not just loading on more debt, they’re also assuming that they’re financial situation is going to be stable enough to make these large payments well into the future. Good luck with that.
It’s also worth noting that, in many transactions, dealers are actually lending more than the value of the vehicle. According to Reuters David Henry,
“The average loan-to-value on new cars rose to 110.6 percent… On used cars it rose to 133.2 percent…
Auto lenders often provide loans that exceed the value of cars they are financing because borrowers want cash to pay sales taxes and fees.”
(“U.S. car buyers borrow more as rates fall and standards loosen“, David Henry, Reuters)
Let me see if I got this straight: You walk onto a car lot without a dime in your pocket, and drive off in a brand new car with everything paid for upfront? Such a deal! Can you see why we think that the sales numbers are a big fake? This isn’t the sign of a strong economy. It’s the sign of another gigantic credit bubble rip-off. But what do the dealers get out of this thing? Is it really worth their while to botch the underwriting when they know that eventually they’ll have to repossess the vehicle? Sure, it is, because there’s big money in stuffing people into loans they can’t afford.
Here’s how the Times explains it: ”Auto loans to borrowers considered subprime, those with credit scores at or below 640, have spiked in the last five years. The jump has been driven in large part by the demand among investors for securities backed by the loans, which offer high returns at a time of low interest rates. Roughly 25 percent of all new auto loans made last year were subprime, and the volume of subprime auto loans reached more than $145 billion in the first three months of this year.”
Bingo. So not only do they make dough on the high interest rates they charge their subprime borrowers, (Sometimes 23 percent or more.) they also make it by selling the loan to investors who are eager to buy any manner of crappy bond provided it offers a better return than US Treasuries. This is the mess Bernanke created by fixing interest rates at zero for nearly 6 years. Zirp (zero interest rate policy) unavoidably leads to excessive risk taking by yield-crazed speculators. The voracious appetite for subprime securities (ABS–Asset-Backed Securities) has even surprised the bond issuers who are constantly beating the bushes looking for sketchier products. This is from the same article by the NY Times:
“Investors, seeking a higher return when interest rates are low, recently flocked to buy a bond issue from Prestige Financial Services of Utah. Orders to invest in the $390 million debt deal were four times greater than the amount of available securities.
What is backing many of these securities? Auto loans made to people who have been in bankruptcy.
An affiliate of the Larry H. Miller Group of Companies, Prestige specializes in making the loans to people in bankruptcy, packaging them into securities and then selling them to investors.
“It’s been a hot space,” Richard L. Hyde, the firm’s chief operating officer, said during an interview in March. Investors are betting on risky borrowers. The average interest rate on loans bundled into Prestige’s latest offering, for example, is 18.6 percent, up slightly from a similar offering rolled out a year earlier…. To meet that rising demand, Wall Street snatches up more and more loans to package into the complex investments.” (NYT)
HA! Now there’s a good way to feather the old retirement fund; load up on bonds made up of loans to people who’ve gone bust.
This is the impact that zero rates have on investor behavior. The abundance of cheap and plentiful liquidity invariably leads to trouble. And there are victims in this Central Bank-authored gold rush too, namely the unsophisticated borrowers who pay prohibitively high rates on beater vehicles that are typically worth less-than-half the value of the loan. (Check the NYT article for examples.)
The Times also notes that the ratings agencies have been playing along with the finance companies just as they did during the subprime mortgage fiasco. Here’s more from the Times:
“Rating agencies, which assess the quality of the bonds, are helping fuel the boom. They are giving many of these securities top ratings, which clears the way for major investors, from pension funds to employee retirement accounts, to buy the bonds. In March, for example, Standard & Poor’s blessed most of Prestige’s bond with a triple-A rating. Slices of a similar bond that Prestige sold last year also fetched the highest rating from S.&P. A large slice of that bond is held in mutual funds managed by BlackRock, one of the world’s largest money managers.” (NYT)
Ask yourself this, dear reader: How are the ratings agencies able to give “many of these securities top ratings”, when the investigators from the Times found “dozens of loans that included incorrect information about borrowers’ income and employment, leading people who had lost their jobs, were in bankruptcy or were living on Social Security to qualify for loans that they could never afford”?
Let’s face it: The regulatory changes in Dodd-Frank haven’t done a damn thing to protect the victims of these dodgy subprime schemes. Borrowers and investors are both getting gouged by a system that only protects the interests of the perpetrators. The sad fact is that nothing has changed. The system is just as corrupt as it was when Lehman went down.
So, how long can this go on before the market implodes?
According to the Times:
“financial firms are beginning to see signs of strain. In the first three months of this year, banks had to write off as entirely uncollectable an average of $8,541 of each delinquent auto loan, up about 15 percent from a year earlier, according to Experian…
In another sign of trouble ahead, repossessions, while still relatively low, increased nearly 78 percent to an estimated 388,000 cars in the first three months of the year from the same period a year earlier, according to the latest data provided by Experian. The number of borrowers who are more than 60 days late on their car payments also jumped in 22 states during that period….” (NYT)
(According to Amber Nelson at loan.com: “In the second quarter, the value of all auto loans late by 60 days or more was more than $4 billion, up 27 percent from the prior year, according to Experian.”)
So, yeah, the trouble is mounting, but that doesn’t mean that this madness won’t continue for some time to come. It probably will. It’ll probably drag-on until the economy turns south and more borrowers start falling behind on their payments. That will lead to more defaults, heavier losses on auto bonds, and a hasty race to the exits by investors. Isn’t that how the subprime mortgage scam played out?
Indeed. But at least there are signs of hope on the regulatory front. Check out this clip from an article at CNBC:
“In August, both Santander Consumer and General Motors Financial Co. acknowledged receiving Justice Department subpoenas in connection with a probe over possible violations of civil-fraud laws. And the Consumer Financial Protection Bureau and the Securities and Exchange Commission have both stepped up their scrutiny of the auto-loan market.” (“New debt crisis fear: Subprime auto loans“, CNBC)
So the SEC, the DOJ, and the CFPB are actually investigating the underwriting practices of these behemoth finance companies to see if they violated “civil fraud laws”?
Will wonders never cease?
Just don’t hold your breath waiting for convictions.
15 Reasons Why Americans Think We’re Still in a Recession…
1: Wage Stagnation: Why America’s Workers Need Faster Wage Growth—And What We Can Do About It, Elise Gould, EPI
Economic Policy Institute:
“The hourly compensation of a typical worker grew in tandem with productivity from 1948-1973. …. After 1973, productivity grew strongly, especially after 1995, while the typical worker’s compensation was relatively stagnant. This divergence of pay and productivity has meant that many workers were not benefitting from productivity growth—the economy could afford higher pay but it was not providing it.
Between 1979 and 2013, productivity grew 64.9 percent, while hourly compensation of production and nonsupervisory workers, who comprise over 80 percent of the private-sector workforce, grew just 8.0 percent. Productivity thus grew eight times faster than typical worker compensation…” (EPI)
(Note: Flatlining wages are the Number 1 reason that the majority of Americans still think we’re in a recession.)
2: Most people still haven’t recouped what they lost in the crash: Typical Household Wealth Has Plunged 36% Since 2003, Zero Hedge
“According to a new study by the Russell Sage Foundation, the inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, or a 36% decline… Welcome to America’s Lost Decade.
Simply put, the NY Times notes, it’s not merely an issue of the rich getting richer. The typical American household has been getting poorer, too.
The reasons for these declines are complex and controversial, but one point seems clear: When only a few people are winning and more than half the population is losing, surely something is amiss. (chart)”
3: Most working people are still living hand-to-mouth: 76% of Americans are living paycheck-to-paycheck, CNN Money
“Roughly three-quarters of Americans are living paycheck-to-paycheck, with little to no emergency savings, according to a survey released by Bankrate.com Monday.
Fewer than one in four Americans have enough money in their savings account to cover at least six months of expenses, enough to help cushion the blow of a job loss, medical emergency or some other unexpected event, according to the survey of 1,000 adults. Meanwhile, 50% of those surveyed have less than a three-month cushion and 27% had no savings at all…
Last week, online lender CashNetUSA said 22% of the 1,000 people it recently surveyed had less than $100 in savings to cover an emergency, while 46% had less than $800. After paying debts and taking care of housing, car and child care-related expenses, the respondents said there just isn’t enough money left over for saving more.”
4: Millennials are Drowning in Red Ink: Biggest economic threat? Student loan debt, USA Today
“Total student loan debt has grown more than 150% since 2005… We have more than $1.2 trillion of student loan debt…
And while 6.7 million borrowers in repayment mode are delinquent, the sad fact is that many lenders aren’t exactly incentivized to work with borrowers. Unlike all other forms of debt, student loans can’t be discharged in bankruptcy. Moreover, lenders can garnish wages and even Social Security benefits to get repaid…
In 2005 student loans accounted for less than 13% of the total debt load for adults age 20-29. Today, student loans account for nearly 37% of that group’s outstanding debt. Student loan debt’s slice of the total debt pie for the age group nearly tripled! The average loan balance for that age group is now more than $25,500, up from $15,900 in 2005.”
5: Downward mobility is the new reality: Middle-Class Death Watch: As Poverty Spreads, 28 Percent of Americans Fall Out of Middle Class, Truthout
“The promise of the American dream has given many hope that they themselves could one day rise up the economic ladder. But according to a study released those already in financially-stable circumstances should fear falling down a few rungs too. The study… found that nearly a third of Americans who were part of the middle class as teenagers in the 1970s have fallen out of it as adults… its findings suggest the relative ease with which people in the U.S. can end up in low-income, low-opportunity lifestyles — even if they started out with a number of advantages. Though the American middle class has been repeatedly invoked as a key factor in any economic turnaround, numerous reports have suggested that the middle class enjoys less existential security than it did a generation ago, thanks to stagnating incomes and the decline of the industrial sector.”
6: People are more vulnerable than ever: “More Than Half Of All Americans Can’t Come Up With $400 In Emergency Cash… Unless They Borrow“, Personal Liberty
“According to a Federal Reserve report on American households’ “economic well-being” in 2013, fewer than half of all Americans said they’d be able to come up with four Benjamins on short notice to deal with an unexpected expense…
Under a section titled “Savings,” the report notes that “[s]avings are depleted for many households after the recession,” and lists the following findings:
*Among those who had savings prior to 2008, 57 percent reported using up some or all of their savings in the Great Recession and its aftermath.
*39 percent of respondents reported having a rainy day fund adequate to cover three months of expenses.
*Only 48 percent of respondents said that they would completely cover a hypothetical emergency expense costing $400 without selling something or borrowing money.
7: Working people are getting poorer: The Typical Household, Now Worth a Third, New York Times
“The inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, or a 36 percent decline, according to a study financed by the Russell Sage Foundation.
Those are the figures for a household at the median point in the wealth distribution — the level at which there are an equal number of households whose worth is higher and lower. But during the same period, the net worth of wealthy households increased substantially….“The housing bubble basically hid a trend of declining financial wealth at the median that began in 2001,” said Fabian T. Pfeffer, the University of Michigan professor who is lead author of the Russell Sage Foundation study.
The reasons for these declines are complex and controversial, but one point seems clear: When only a few people are winning and more than half the population is losing, surely something is amiss.”
8: Most people can’t even afford to get their teeth fixed: 7 things the middle class can’t afford anymore, USA Today
“A vacation is an extra expense that many middle-earners cannot afford without sacrificing something else. A Statista survey found that this year 54% of people gave up purchasing big ticket items like TVs or electronics so they can go on a vacation. Others made sacrifices like reducing or eliminating their trips to the movies (47%), reducing or eliminating trips out to restaurants (43%), or avoiding purchasing small ticket items like new clothing (43%).
3–To pay off debt…
According to the U.S. Department of Health and Human Services, “the U.S. spends about $64 billion each year on oral health care — just 4% is paid by Government programs.” About 108 million people in the U.S. have no dental coverage and even those who are covered may have trouble getting the care they need, the department reports.”
9: The good, high-paying jobs have vanished: Recovery Has Created Far More Low-Wage Jobs Than Better-Paid Ones, New York Times
“The deep recession wiped out primarily high-wage and middle-wage jobs. Yet the strongest employment growth during the sluggish recovery has been in low-wage work, at places like strip malls and fast-food restaurants.
In essence, the poor economy has replaced good jobs with bad ones. That is the conclusion of anew report from the National Employment Law Project, a research and advocacy group, analyzing employment trends four years into the recovery.
“Fast food is driving the bulk of the job growth at the low end — the job gains there are absolutely phenomenal,” said Michael Evangelist, the report’s author. “If this is the reality — if these jobs are here to stay and are going to be making up a considerable part of the economy — the question is, how do we make them better?”
10: More workers are throwing in the towel: Labor Participation Rate Drops To 36 Year Low; Record 92.6 Million Americans Not In Labor Force, Zero Hedge
“For those curious why the US unemployment rate just slid once more to a meager 5.9%, the lowest print since the summer of 2008, the answer is the same one we have shown every month since 2010: the collapse in the labor force participation rate, which in September slid from an already three decade low 62.8% to 62.7% – the lowest in over 36 years, matching the February 1978 lows. And while according to the Household Survey, 232,000 people found jobs, what is more disturbing is that the people not in the labor force, rose to a new record high, increasing by 315,000 to 92.6 million!
Bottom line: Unemployment has gone down because more people aren’t working and have fallen off the radar.”
11: Nearly twice as many people still rely on Food Stamps than before the recession: Food-stamp use is falling from its peak, Marketwatch
“Food-stamp use is finally moving away from the peak. At 46.1 million people, total food-stamp usage is down about 4% from its high in December 2012 of 47.8 million. Only eight states in March (the latest data available) were up from the same month of 2013.
It’s still not great news, however, considering there were 26.3 million people receiving food stamps in 2007…”
12: The ocean of red ink continues to grow: American Household Credit Card Debt Statistics: 2014, Nerd Wallet Finance
Nerd Wallet Finance:
U.S. household consumer debt profile:
*Average credit card debt: $15,607
*Average mortgage debt: $153,500
*Average student loan debt: $32,656
In total, American consumers owe:
*$11.63 trillion in debt
*An increase of 3.8% from last year
*$880.5 billion in credit card debt
*$8.07 trillion in mortgages
*$1,120.3 billion in student loans
*An increase of 11.5% from last year
13: No Recovery for working people: The collapse of household income in the US, World Socialist Web Site
“The US Federal Reserve’s latest Survey of Consumer Finances, released last Thursday, documents a devastating decline in economic conditions for a large majority of the population during the so-called economic recovery.
The report reveals that between 2007 and 2013, the income of a typical US household fell 12 percent. The median American household now earns $6,400 less per year than it did in 2007.
Source: Federal Reserve Survey of Consumer Finances
Much of the decline occurred during the “recovery” presided over by the Obama administration. In the three years between 2010 and 2013, the annual income of a typical household fell by an additional 5 percent.
The report also shows that wealth has become even more concentrated in the topmost economic layers. The wealth share of the top 3 percent climbed from 44.8 percent in 1989 to 54.4 percent in 2013. The share of wealth held by the bottom 90 percent fell from 33.2 percent in 1989 to 24.7 percent in 2013.”
14: Most people will work until they die: The Greatest Retirement Crisis In American History, Forbes
“We are on the precipice of the greatest retirement crisis in the history of the world. In the decades to come, we will witness millions of elderly Americans, the Baby Boomers and others, slipping into poverty.
Too frail to work, too poor to retire will become the “new normal” for many elderly Americans.
That dire prediction… is already coming true. Our national demographics, coupled with indisputable glaringly insufficient retirement savings and human physiology, suggest that a catastrophic outcome for at least a significant percentage of our elderly population is inevitable. With the average 401(k) balance for 65 year olds estimated at $25,000 by independent experts …the decades many elders will spend in forced or elected “retirement” will be grim…
The signs of the coming retirement crisis are all around you. Who’s bagging your groceries: a young high school kid or an older “retiree” who had to go back to work to supplement his income or qualify for health insurance?”
15: Americans are more pessimistic about the future, Polling Report
According to a CNN/ORC Poll May 29-June 1, 2014:
“Do you agree or disagree? The American dream has become impossible for most people to achieve.”
According to a NBC News/Wall Street Journal Poll conducted by the polling organizations of Peter Hart (D) and Bill McInturff (R). April 23-27, 2014:
“Do you agree or disagree with the following statement? Because of the widening gap between the incomes of the wealthy and everyone else, America is no longer a country where everyone, regardless of their background, has an opportunity to get ahead and move up to a better standard of living.”Agree: 54%
Also, according to a CBS News Poll. Jan. 17-21, 2014. N=1,018 adults nationwide.
“Looking to the future, do you think most children in this country will grow up to be better off or worse off than their parents?”Better off: 34%
Worse off: 63%
The majority of people in the United States, no longer believe in the American dream, or that America is the land of opportunity, or that their children will have a better standard of living than their own. They’ve grown more pessimistic because they haven’t seen the changes they were hoping for, and because their lives are just as hard as they were right after the crash. In fact, according to a 2014 Public Religion Research Institute poll– 72 percent of those surveyed said they think “the economy is still in recession.”
Judging by the info in the 15 links above, they’re probably right.
Conspiracy theorists, those who look for the facts, ignoring the pressure of jeers, flawed appeals to authority, and intimidation, are the sanest among us. The steady migration of investigative journalists, who turn their backs on more lucrative employment, is only one indication of this.
In a recent article, Scientific Study Reveals Conspiracy Theorists The Most Sane Of All, the author, J. D. Hayes, cites a recent study, published July 2013, by psychologists Michael J. Wood and Karen M. Douglas of the University of Kent in the UK. It was entitled “‘What about Building 7?’ A Social Psychological Study of Online Discussion of 9/11 Conspiracy Theories.”
Their conclusion is that, contrary to those mainstream media stereotypes, “conspiracy theorists” appear to be more sane than people who accept official versions of controversial and contested events.
Attempts to demonize our perception on conspiracy theorists erects barriers to protect those whose profits are endangered by the truth.
These techniques for manufacturing opinion were outlined by Edward Bernays, whose book, “Propaganda,” asserts those who rule should use the trust accorded them in exactly this way.
Interestingly, Leo Strauss, whose political philosophy is in alignment with Bernays, asserted the same opinion. Strauss’ work was largely adopted by those who call themselves NeoConservatives who are anything but Conservative.
The opinion shared was that those in power are justified to lie, cheat and steal to keep and increase their power. The Kochs use these techniques in business and politically.
The use of the term, “Conspiracy Theory” increased rapidly in the wake of the JFK assassination due to its pejorative use in the MSM. This worked to stifle questions already being raised.
The issue which underlies the article by William Saletan, Conspiracy Theorists Aren’t Really Skeptics attempts to validate intellectual bullying, a logical extension of the philosophies of Bernays and Strauss. You don’t get more MSM than the Washington Post.
In the original formulation of American society those in positions of authority were morally and ethically obligated to explain themselves. The facts were to be available to all. Journalists investigated and reported the truth, as they saw it. This changed.
Saletan raised the issue of human psychology but failed to mention a perplexing issue which has long troubled us. This is the presence of those without conscience. For most of the 20th Century therapists believed these individuals could change, the problem was psychological. Today we know this is a neurological issue.
Advances in neurobiology have brought objective understanding. Now, thousands of criminals have been identified as psychopaths using an fMRI. The scan identified malfunctions in areas of the amygdala, which is now known to be associated with conscience, empathy, and compassion.
According to Dr. Robert Hare, serial murderers and con-men are always psychopaths. But Hare has also noted many who are also psychopathic are not violent and well able to control their impulses to gain far more expansive goals.
These individuals are highly intelligent. At any time there are 20,000 psychopaths with I.Q.s over 180 at large in the United States.
It would be instructive to see test results from MRI scans done on Dick Cheney, Karl Rove, and their cadre.
The cost of psychopathy has been calculated at around 360 billion a year – in the US. This does not include the highly intelligent ones which, clearly cost far more, given the impact of Cheney and company on America. Could the people who so desperately wanted torture as a tool be emotionally normal?
Today, experts believe the explanation for the financial meltdown now ongoing can be explained by the concentration of psychopathic individuals in corporations, finance and government.
The characteristics of the condition include calloused unconcern for others. This accounts for the oil companies which routinely externalize their costs, leaving those harmed by the toxic waste they cause, to struggle and die.
Those without conscience, willing to lie for their own profit, have long been with us. But today they can avoid the troublesome issue of having their actions known and understood. They have learned to spin.
To ensure this continues they must continue manufacturing public opinion about their previous actions. This is why they began using the term, “Conspiracy Theory.” They work vigorously to ensure the facts remain hidden.
Refusing to accept the officially mandated opinion on any subject, be in the JFK assassination or whether or not to give your child pharmaceuticals as treatment for ADHD has been used to categorize individuals who refuse to accept predigested conclusions as crazy, stupid or paranoid. When this happens, rest assured, some corporation’s profits could be impacted.
This is a form of control intended to intimidate and inject fear. It also marginalizes vast numbers of people, keeping them in fear so they can be controlled.
To that end they, I call them Greedvilleins, also use our love of each other, country, loyalty, and trust, to manipulate us into wars which profit them and place us in perpetual debt.
If you limit what is acceptable to hold as opinions and deny people full access to the facts you destroy the trust basis of our society. Emotionally normal people are not comfortable when they cannot trust those around them.
These are rational responses to existing conditions.
What is insane is trusting psychopaths. Yet these are now common in finance and government. You can be sure they will routinely act with a sublime lack of conscience, for your freedom, your assets and your very life.
To cope with these conditions many still refuse to think about it, thus avoiding extreme anxiety. Others, for instance those who look for the facts, and are demeaned as “conspiracy theorists.”
The presence of highly intelligent psychopaths among us, who generally avoid being prosecuted, is one of these explanations.
Saladan’s article passes today as investigative journalism. It pays well and explains why so many truly honest journalists left to work in the alternative media.
It is ironic that John Fund claims some kind of victory by pointing out a highly marginal way of stealing a few votes via the unusual opportunity of finding unused ballots. In his recent article, James O’Keefe Strikes Again, the back slapping was thick and gleeful.
James O’Keefe, again, scored a media event in these last days before the coming election. This time he was not dressed up in his pimp dudes, but he should have been.
The election would have to extraordinarily close for this kind of voter fraud to matter. Argument like these are like blaming the national debt on shop lifting by senior citizens. It happens, but it is rare.
The Big Game is being run by the Number Two Man on Fund’s own speed dial, Karl Rove. Stealing Elections was essential if the Number One Man on Fund’s speed dial in the same period, Dick Cheney, of Halliburton, was to win and so become even richer. The three are linked by common interests as well as a solid and long term friendship. They scratch each other’s backs, as the expression goes.
When John beats up a woman, or otherwise misbehaves, they are there for him.
Fund, having made himself a kind of a ‘reputation’ for pimping the idea of Voter Fraud lays it on thick and cheesy in his article.
The other side, located in Colorado, make themselves look pathetic because a NeoCon had to give them this exciting idea – and these twits golly gosh, gee’d all over James O’Keefe instead of showing him the door.
Franklin’s state director, Meredith Hicks, told O’Keefe that committing voter fraud using unused ballots was perfectly okay. “That’s not even lying or stealing, if someone throws out the ballot. If you want to fill it out you should do it,” she told O’Keefe on tape.
Note: Cheating is always wrong. It destroys trust in the integrity of the entire electoral process and is repulsive in anyone.
That said, can’t you see this woman rooting round in people’s trash cans looking for those ballots? How would you know when they would appear? Many of these ballots will end up in the trash, but only after election day. “Oh. Never mind, that was yesterday.” Others will be used as grocery lists, book marks, made into paper airplanes and other purposes for which they were not intended. Some will also be used for voting.
Really, it makes you cringe.
There is a magnitude of difference between this level of electoral dishonesty and the Big Game. That is where the real money is and this article is evidence John Fund is still Pimping for the same folks who profited by murdering a million and a half Iraqis, killing off babies doomed by the effects of DU to short and horrible lives, and other war crimes galore. Remember Bush and his administration’s excitement over ‘rendering’ people?
You can’t say Fund is not consistent. So are No. One SpeedDial and No. Two SpeedDial.
To get the money you have to win the election and if you are Dick Cheney or George Bush you can’t win unless you cheat.
Rove is not into retail, he is all about Whole Selling out America with Ballot Fraud via cool electronics. He has made millions this way. Cheney, No. Two SpeedDial, made billions.
Fund and Friends are all Pimps. They should dress the role.
Ever since the 2008 financial collapse, banks have reduced their lending while accumulating U.S. Treasuries. On the surface placing capital into the safest depositor may seem prudent. On the other hand, Why Big Banks Are Suddenly Interested in Talking to You Again? According to Inc, “After years of turning away small-business borrowers, the country’s largest banks are now granting one out of five loan applications they receive. The 20 percent benchmark represents a post-recession high for big banks (assets of $10B+). Further, small banks have been approving more than half of the funding requests they receive.”
Such news would normally be welcomed. The Sovereign Man article, Here’s Why US Banks Are Now Extremely Vulnerable, presents a sober warning that the banking industry is at risk from a bond market sell-off.
“In just the last month alone American banks increased their holdings of US treasuries by $54 billion, to a record $1.99 trillion.
Facing $127 trillion in unfunded liabilities – which is nearly double 2012’s total global output – and with no inclination to reduce those numbers at all, at this point disaster for the US is entirely unavoidable.
Under the rather arbitrary Bank of International Settlements Basel capital adequacy rules government debt rated at least AA continues to carry a “zero risk” weighting. Meaning that banks do not need to set aside capital against it.
Beyond that, regulations imposed after the last crash to reduce risk require banks to hold $100 billion in liquid assets, which of course includes bonds. Thus, they are not only encouraged, but actually forced to buy government bonds.”
The fundamental change in the last six years is that the banks were rescued from normal capital requirements under a zero interest rate discount window. The inevitable result starved the small business and personal borrowing market from obtaining loans. With the loosing of funds to finance business and consumers, could the dire warning that the banks understand they need to rotate out of Treasuries, be the reason for the shift in lending?
However, the rush to come into compliance has America’s Banks Pile Up Treasuries as Deposits Overwhelm Lending. This explanation of a change in regulation ordains that U.S. Bonds are still a necessary component in their balance sheet.
“Rules approved Sept. 3 by the Fed, Office of the Comptroller of the Currency and Federal Deposit Insurance Corp. leave banks about $100 billion short of the $2.5 trillion in easy-to-sell assets that they need to meet the liquidity standard, according to the Fed. Lenders must reach 80 percent of their liquidity coverage ratios by January and have until the start of 2017 to reach full compliance.”
Illustrating this point, “Bank of America alone may need to purchase as much as $65 billion of government debt to become fully compliant, according to report last month from Marty Mosby, a banking analyst at Memphis, Tennessee-based Vining Sparks.”
Providing additional encouragement is a WSJ report that U.S. Bank Profits Near Record Levels.
“On the heels of the financial crisis, some lawmakers, regulators and consumers complained that banks weren’t lending enough. But steady improvement in credit quality, or borrowers’ ability to repay loans, is prompting banks not only to lend more but also to ease their standards.
The higher loan levels come as banks are easing up on their underwriting standards to borrowers. A Federal Reserve survey of senior loan officers released last week found that lenders were loosening standards and loan terms for commercial and industrial loans and commercial real-estate loans.”
Reconciling the need to keep buying treasuries and originating new loans to satisfy business demand is a challenging objective. By returning to the old fashion business model, of actually making loans to customers, banks are generating significant profits.
While graphs show the downward trend in loans since TARP, the current upturn is ready to be charted. Lending money for productive enterprise has contributed to a rise in GDP. The transition to a consumer based economy is dependent on the flow of transactions. When the pace of the velocity of money increases and confidence strengthens, prosperity usually follows.
The different in this feeble recovery phase is that the debt assumed by the Treasury, monetized within Federal Reserve liabilities, requires servicing no matter the health of the general economy. Near zero or cost free interest rates is approaching an expected crisis of uninterrupted maintenance. The exact trigger that drives up rates, while elusive to forecast, is inevitable in coming.
The Money Show article, Rising Rates? Beware of Big Banks, describes the predicament accordingly.
“The reality is that traditional commercial and consumer lending is no longer the big money maker that it used to be for banks. Since the 2008 financial crisis, households and businesses have been deleveraging—paying down debt—and demand for loans has been limp.
In recent years, the big banks have fattened their profits mainly from capital-markets businesses: Mergers and acquisitions, stock and bond offerings, and other types of trading. Rising interest rates also make the cost of capital go up for businesses, which can result in less deal making, lowering financing fees for the banks.”
Hype that loan demands have returned in earnest is overstated. Coming off such a low level, any modest increase looks bigger than it really is. That revered business cycle, simply is no longer the same.
So what happens in the catch-22 scenario when banks are adjusting to different capital requirements and Treasuries drop in price with a rise in interest rates? That’s the 64 trillion dollar question.
Banking is more about mathematics than business acumen when additional debt created money is needed to pay the service of obligations that come due. The roll over can be staggering. Banksters make up the monetary rules. That $127 trillion nut is bigger than all the bank reserves put together.
For those who argue the economy can grow its way out of this liquidity squeeze must have a time frame longer than the imaginative bag of tricks left in the vaults of banks.
“…that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement. It is a difficult dream for the European upper classes to interpret adequately, and too many of us ourselves have grown weary and mistrustful of it. It is not a dream of motor cars and high wages merely, but a dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position.”
– James Truslow Adams, The Epic of America (1931)
The American Dream has been defined many ways by writers of both poetic and prosaic bent, but its essentials tend to involve life, liberty and the pursuit of happiness (or property, depending on your source).
The Declaration of Independence, upon which an entire nation was radically brought into existence, asserts that not only are all men created equal but that this is a “self-evident” truth. By this “unanimous Declaration of the thirteen united States of America,” a contract was agreed to, that their union would be founded on this principle. Thus, America was endowed with its dream at the moment of its conception: the freedom to succeed.
The United States has promoted a self-congratulating exceptionalism for decades, waving its Declaration and Constitution in the faces of other sovereign nations as if the latter had never considered such concepts. Our capital F “Freedom” sets us apart from the rest of the world, as the political rhetoric has repeated ad nauseam, no matter the freedoms enjoyed by democracies on almost every continent. And yet our basic freedom, the freedom to succeed, America’s contractual promise, has been shrinking for thirty years.
The freedom to succeed transcends economic systems but it is most potently expressed by capitalist gains. The ability to go “from rags to riches” is ingrained in this nation’s ethos and there is nothing intrinsically immoral about that goal. However, the current state of American inequality reveals a very real and expanding gap between the rich and poor that betrays the foundational endowment of this Union. When the freedom to succeed is denied every citizen, their equality is equally denied.
Recently, the Pew Research Center released a poll on what international citizens consider the greatest threat to the planet. Conducted between March 17 and June 5 of this year, the survey received answers from 48,643 respondents in 44 countries. In the U.S. and Europe, the growing gap between the rich and the poor was overwhelmingly considered the greatest danger to world prosperity. Over a quarter of Americans ranked “Inequality” as number one, above Religious & ethnic hatred, Pollution, Nuclear weapons and Infectious diseases.
This is hardly startling news considering that the median net worth of American households fell by 35 percent ($106,591 to $68,839) between 2005 and 2011, according to the U.S. Census Bureau. It is, however, disturbing that inequality remains so prevalent five years after the Great Recession.
Capitalism is not the problem. The problem is that we have let inequality advance in this country so gradually that its obviousness is masked by its familiarity. Below, I outline eight facts about inequality in America that every American should know.
1) 400 Americans have more wealth than half of all Americans combined. This ratio has been verified by Politifact and former Labor Secretary Robert Reich. To put it into context, last year the U.S. Census Bureau estimated that there were over 316 million people living in the United States. That means 400 Americans have more money than over 158 million of their fellow citizens. Their net worth is over$2 trillion, which is approximate to the Gross Domestic Product of Russia.
One explanation for the vast discrepancy in wealth is the definition of “worth,” which includes everything a person or household owns. This means savings and property but also mortgages, bills and debt. Poorer households can owe so much in debt that they possess a negative net worth.
2) America has the second-highest level of income inequality, after Chile. The Organization for Economic Cooperation and Development studies thirty-four developed countries and ranks them both before and after taxes and government transfers take effect (government transfers include Social Security, income tax credit and unemployment insurance). Before taxes and government transfers, America ranks tenth in income inequality. After taxes and transfers, it ranks second. Whereas its developed peers reduce inequality through government programs, the United States’ government exacerbates it.
3) The current state of inequality can be traced back to 1979. After the Stock Market Crash of 1929, the gap between the rich and the poor began to narrow. For fifty years, wages differed between the upper- and working-classes, but a robust middle-class took shape and there remained ample opportunity for working-class individuals to ascend.
In his book, “The Great Divergence,” journalist Timothy Noah traced today’s inequality to the beginning of the 1980s and the widening gap between the middle- and upper-classes. This gap was influenced by the following factors: the failure of American schools to prepare students for new technology; poor immigration policies that favor unskilled workers and drive down the price of already low-income labor; federally-mandated minimum wage that has failed to keep pace with inflation; and the decline of labor unions.
4) Non-union wages are also affected by the decline of unions. The Economic Policy Institute claims that 20 percent of the growth in the wage gap between high-school-educated and college-educated men can be attributed to deunionization.
Between 1978 and 2011, union representation for blue-collar and high-school educated workers declined by more than half. This has also diminished the “union wage effect,” whereby the existence of unions (more than 40 percent of blue-collar workers were union members in 1978) was enough to boost wages in non-union jobs – in high school graduates by as much as 8.2 percent. Not only did unions protect lower- and middle-class workers from unfair wages, they also established norms and practices that were then adopted by non-union employers. Two prime examples are employee pensions and healthcare.
Today, about 13 percent of workers belong to unions, which has reduced their bargaining power and influence.
5) There is less opportunity for intergenerational mobility. In December 2011, President Obama spoke at Osawatomie High School in Kansas. He was very clear about the prospects of the poor in today’s United States:
“[O]ver the last few decades, the rungs on the ladder of opportunity have grown farther and farther apart, and the middle class has shrunk. You know, a few years after World War II, a child who was born into poverty had a slightly better than 50-50 chance of becoming middle class as an adult. By 1980, that chance had fallen to around 40 percent. And if the trend of rising inequality over the last few decades continues, it’s estimated that a child born today will only have a one-in-three chance of making it to the middle class – 33 percent.”
As refreshing as that honesty is, Obama promised no fix beyond $1 trillion in spending cuts and a need to work toward an “innovation economy.”
In a speech one month later, Obama’s Chairman of Economic Advisers, Alan Krueger, elaborated on the dire state of America’s shrinking middle-class. The contraction, he stated, could partially be attributed to “skill-biased technical change”: work activities that have become automated over time, reducing the need for unskilled labor and favoring those with analytical training. He also highlighted the 50 year decline in tax rates for the top 0.1 percent, increased competition from overseas workers, and a lack of educational equality for children. Poor children are denied the private tutors, college prep and business network of family and friends available to their wealthier peers, which locks them into the class they are born into.
6) Tax cuts to the wealthiest have not improved the economy or created more jobs. Krueger also revealed that the tax cuts of the 2000s for top earners did not improve the economy any better than they did in the 1990s (meanwhile, income growth was stronger for lower- and middle-class families in the 1990s than in the last forty years).
Tax rates for the top income earners in America peaked in 1945 at 66.4 percent. Following decades of gradual reductions, they have since been cut in half. During the same time, the payroll tax has increased since the 1950s and individual income tax has bounced between 40-50 percent through the present day. Conversely, corporate tax declined from above 30 percent in the 1950s to under 10 percent in 2011.
All of these tax cuts are made ostensibly to improve the economy and create jobs. However, the National Bureau of Economic Research has concluded that it is young companies, “regardless of their size,” that are the real job creators in America. Tax cuts to the wealthiest do not create jobs.
7) Incomes for the top 1% have increased (but the top 0.01% make even more). Between 1979 and 2007, the average incomes of the 1 percent increased 241 percent. Compare that to 19 percent growth for the middle fifth of America and 11 percent for the bottom fifth. Put another way, in 1980 the average American CEO earned forty-two times as much as his average worker. In 2001, he earned 531 times as much.
Average income across the 1 percent is actually stratified into widely disparate echelons. Compare the $29,840 average income for the bottom 90 percent to the $161,139 of the top 10 percent. Compare the $1 million average income of the top 1 percent to the $2.8 million of the top 0.1 percent. Yet both still pale beside the $23 million average income of the top 0.01 percent.
If those numbers seem a bit overwhelming, Politizane has created a video that illustrates this staggering inequality:
8) The majority of Congress does not feel your pain. Empowered by the Constitution to represent their constituents, United States Congress members are, for the first time in history, mostly millionaires. The 2012 financial disclosure information of the 534 current Congress men and women reveals that over half of them have a net worth of $1 million or more.
After the past seven facts it is difficult to read this last one and believe that these 268 legislators have the best interests of the remaining 99 percent at heart. But if that is too presumptuous a leap, it is not too bold to say that wealthier donors, lobbyists and special interest groups enjoy greater access to these lawmakers than the average American.
In January, Congress failed to extend emergency benefits for unemployment, leaving 1.3 million people without federal aid. Congress then went on a weeklong recess that kept them from debating the issue until the end of the month. The bill was too divisive for Republicans and Democrats to reach an agreement on, though unemployment was then above 7 percent nationally.
Thankfully, the unemployed have their Congress working for them. And at $174,000 annual pay, those representatives are sure to return from their vacations committed to fresh solutions.
When I saw the movie “Saving Mr. Banks” during one of my interminably-long plane rides back from Syria, I liked it so much that I actually went out and bought a copy of the 1964 “Mary Poppins” Disney classic it was based on — the one with Julie Andrews and Dick Van Dyke frolicking across the rooftops of London.
And much to my surprise, I discovered that Mary Poppins might have been one of the world’s first hippies. Who woulda thought! And what was even more amazing is that Mary Poppins was one of the first people to warn us about the dangers and perfidy of big bankers and big banks.
And fortunately for those of us living here in America one hundred years later, Elizabeth Warren has now become the new Mary Poppins — also warning us about the dangers and perfidy of big bankers and big banks.
If only Americans would start paying attention to Elizabeth Warren as much as they paid attention to Julie Andrews!
“Hey, Elizabeth!” I also want to shout on the rooftops like Dick VanDyke, “voters aren’t listening to you!” Maybe if Disney studios made a movie about you too? Then maybe voters would finally start to listen.
According to Warren, the American middle class has been absolutely decimated by the banking and credit-card lobbies.
And yet voters still keep falling for all those glossy ads and happy lies that still keep getting pro-big-bank candidates elected to the White House and Congress even though voters can clearly see that they themselves are losing their jobs, having their homes repossessed, becoming slaves to their student loans and getting ripped off bigtime by credit-card debt. But then I guess that those syrupy ads actually do prove that “A spoonful of sugar helps the medicine go down” after all.
In the heroic country of Iceland, their well-informed voters have vigorously fought back against bankster greed and have even re-written their constitution in order to make lending-bubbles and bank fraud illegal.
But in America, the opposite happens. Here in America our very own government, the very one that bank lobbyists have chosen for us to elect, is handing over billions of our very own hard-earned dollars to big banks just as fast as it can. And Congress is always writing new bankruptcy laws that favor banksters over the middle class every time. Mary Poppins would be livid, of course, but nobody else seems to even notice these days — except for Elizabeth Warren.
And even the Federal Reserve is dancing over the rooftops in glee as it too gives away our money to the banksters just as fast as it possibly can, singing “Step in Time” as gleefully hands over giant bags of taxpayers’ money to Chase, Bank of America, CitiBank and Goldman Sachs.
Plus the Senate just vetoed a bill that would have given students a break from paying up to 12% interest on their college loans too. According to Warren, “This isn’t complicated. It’s a choice – a choice that raises a fundamental question about who the United States Senate works for. Does it work for those who can hire armies of lawyers and lobbyists to protect tax loopholes for billionaires and profits for the big banks? Or does it work for those who work hard, play by the rules, and are trying to build a future for themselves and their families?”
Not to mention the hidden (and not-so-hidden) fees that banks gleefully charge us customers for no reason at all.
To try to completely understand how banksters and their toadies in Congress and the Department of Justice are robbing the rest of us blind, you just gotta watch this video of Bill Moyers interviewing bank-fraud expert Thomas K. Black. Seriously. You really should watch this: http://vimeo.com/107916659
In this video, Black describes how Obama was elected by the banking industry and how Obama has totally paid back his debt to the banksters by handing them all “get out of jail free” cards. Is being elected president really worth selling us Americans out to the banksters? Apparently so.
“There’s no threat to capitalism like capitalists,” continues Black. “They are destroying its underpinnings. And when dishonest people gain an advantage in the marketplace, bad ethics drive good ethics out. This is why we need the rule of law.” Doesn’t Thomas K. Black sound just like Dick VanDyke, er, I mean Burt the Chimney Sweep here — as Black proposes that it’s high time to sweep clean our banks.
And now let’s talk about America’s ratings on the so-called “Misery Index”. Apparently America rates higher on the misery charts now than it ever has, even back in the Great Depression — and probably even as high as did Mary Poppins’s 1910 London. Thanks a lot, banksters.
Isn’t it time that American voters finally join up with Elizabeth Warren and Mary Poppins — and tell big banks and banksters to go “fly a kite!”
PS: Speaking of money, look how much of it is being spent in the Middle East — and not here at home where it is needed!
According to a recent blog-post at thehill.com, the first official estimates of the ISIS price tag from the Pentagon showed that, “the costs of intervention between mid-June and late-August was $7.5 million per day. At that rate, the U.S. has spent $850 million on operations against ISIS as of October 8, adding up to about $2.74 billion per year. The Pentagon has since revised the estimate up to as high as $10 million per day, or $3.65 billion per year. In reality, both of those numbers are quite likely to be underestimates of what’s to come.”
Looks like the US military is just as bad as the US banksters when it comes to cleaning out America’s pocketbooks — after they both have put us to sleep with false promises and false news https://www.youtube.com/watch?
What we Americans really need to do these days is to once again take Mary Poppins’s advice and “Stay Awake”! https://www.youtube.com/watch?
“Financial markets are faced with uncertainty that isn’t going away. The slowdown in Europe is probably in the early innings, the Fed hasn’t begun to raise interest rates, and geopolitical crises seem to pop up by the day.” Jeff Cox, Finance editor, CNBC
Six years of zero rates and trillions of dollars of asset purchases couldn’t stop stocks from falling sharply on Wednesday. All three major indices moved deep into the red, with the Dow Jones leading the pack, dropping an eye-watering 460 points before rebounding nearly 300 points by the end of the session. Risk-free assets, particularly US Treasuries, rallied hard on the flight-to-safety move with the benchmark 10-year Treasury yield slipping to a Depression era 1.87 percent before climbing back above the 2 percent mark. US financials were the worst hit sector, taking it on the chin for 9 percent by mid-day, while Brent crude was soundly walloped, falling to a 47-month low on oversupply and deflation fears. Stock market gains for the year had nearly been wiped out before a miraculous about-face turned Armageddon into a so-so day with survivable losses. Even so, analysts have already started paring back their estimates for 4th quarter growth while traders stocked up on antacid for Thursday’s opening bell.
The proximate cause of Wednesday’s bloodbath was weaker than expected economic data from Europe–which is sliding towards its third recession in five years– droopy retail sales in the US, and a report from Department of Labor showing that wholesale prices for producers are edging closer towards deflation, the opposite of what the Fed is trying to achieve via its aggressive monetary policy.
But the real trigger for the selloff was not the dismal data, but the policies that have been in place since the Financial Crisis of 2008. While the Obama administration has steadily decreased demand by shaving the deficits which provide vital fiscal stimulus for the economy, (On Wednesday, the USG announced the budget deficit fell to $483 billion, the lowest since 2008) the Federal Reserve has been providing trillions of dollars of cheap money to the banks and brokerages. The result of this one-two combo has not only been the biggest transfer of wealth in human history, but also “a fundamental breakdown in the functioning of the global capitalist economy.” As the International Monetary Fund (IMF) noted in a recent paper on the global recovery: “a pickup in investment has not yet materialized…reflecting concerns about low medium-term growth potential and subdued private consumption.” Demand shortfalls in the advanced countries “could lead to sustained global economic weakness over a five-year period.” (IMF report records global economic breakdown, Nick Beams, World Socialist Web Site)
Simply put: The Fed’s policies have made investors richer, but they haven’t created opportunities for recycling profits, which is a critical part of capitalism’s so called virtuous circle. Anemic investment, means less hiring, less spending, weaker demand and slower growth, all of which are visible in today’s sluggish, underperforming economy. Pumping money into financial assets (QE) can fatten the bank accounts of rich speculators, but it doesn’t do jack for the economy. It just creates bubbles that burst in a flurry of panic selling. Here’s more from Larry Elliot at the Guardian:
“Six years after the global banking system had its near-death experience, interest rates are still at emergency levels. Even attaining the mediocre levels of activity expected by the IMF in the developed countries requires central banks to continue providing large amounts of stimulus. The hope has been that copious amounts of dirt-cheap money will find its way into productive uses, with private investment leading to stronger and better balanced growth.
It hasn’t happened like that. Instead, as the IMF rightly pointed out, the money has not gone into economic risk-taking but into financial risk-taking. Animal spirits of entrepreneurs have remained weak but asset prices have been strong. Tighter controls on banks have been accompanied by the emergence of a powerful and largely unchecked shadow banking system. Investors have been piling into all sorts of dodgy-looking schemes, just as they did pre-2007. Recovery, such as it is, is once again reliant on rising debt levels. Central bankers know this but also know that jacking up interest rates would push their economies back into recession. They cross their fingers and hope for the best.” (World leaders play war games as the next financial crisis looms, Larry Elliot, Guardian)
The policies implemented by the Obama administration and Fed have achieved precisely what they were designed to achieve; they’ve enriched the voracious plutocrats who run the system but left everyone else scraping by on less and less. An article in the Washington Post explains what’s going on in greater detail. Here’s a short excerpt from the piece titled “Why is the recovery so weak? It’s the austerity, stupid”:
“Welcome to Austerity U.S.A., where the deficit is back below 3 percent of GDP and growth is still disappointing—which aren’t unrelated facts.
It started when the stimulus ran out. Then state and local governments had to balance their budgets amidst a still-weak economy. And finally, there was the debt ceiling deal with its staggered $2.1 trillion of cuts over the next decade. Add it all up, and there’s been a big fiscal tightening the past few years, something like 4 percent of potential GDP. Indeed, as Paul Krugman points out, real government spending per capita has been falling faster now than any time since the Korean War demobilization. (chart)
Fiscal Impact Measure
Source: Hutchins Center
And, as you can see above, all this austerity has been hurting GDP growth since 2011. It shows the Hutchins Center’s new “fiscal impact measure,” which looks at how much total government tax-and-spending decisions have helped or harmed growth. The dark blue line is what policy has actually done, and the light blue one is what a neutral policy would have done. So, in other words, if the dark blue line is below the light blue one, like it has the last three years, then policy has subtracted from growth.” (Why is the recovery so weak? It’s the austerity, stupid. Washington Post)
By cutting the deficits, Obama reduced the blood flow to the real economy and weakened demand. That’s what torpedoed the recovery. In contrast, stocks and bonds have done remarkably well, mainly because the Fed pumped $4 trillion into financial assets which was a taken as a greenlight by risk takers everywhere to load up on everything from overpriced equities to low-yield junk. Now, after more than three years without as much as a 10 percent correction, the momentum has shifted, volatility has returned, earnings are looking wobbly, and the fear is palpable. Stocks appear to be headed for a major repricing event. Here’s how investment guru John Hussman sums it up in his Weekly Market Comment:
“Our concerns at present mirror those that we expressed at the 2000 and 2007 peaks, as we again observe an overvalued, overbought, overbullish extreme that is now coupled with a clear deterioration in market internals, a widening of credit spreads, and a breakdown in our measures of trend uniformity…
…it has become urgent for investors to carefully examine all risk exposures. When extreme valuations on historically reliable measures, lopsided bullishness, and compressed risk premiums are joined by deteriorating market internals, widening credit spreads, and a breakdown in trend uniformity, it’s advisable to make certain that the long position you have is the long position you want over the remainder of the market cycle. As conditions stand, we currently observe the ingredients of a market crash.” (The Ingredients of a Market Crash, John P. Hussman, Ph.D., Hussman Funds)
Sounds ominous, doesn’t it? And Hussman is not alone either. The bearish mood on Wall Street is gaining pace even among those who focus more on geopolitical issues than fundamentals, like the Bank for International Settlements’ Guy Debelle who said in an interview on CNBC on Tuesday that he was concerned about the possibility of a “violent” market drop, particularly in bonds.
“If I had told you that there were heightened tensions in the Middle East and Eastern Europe, uncertainty about the turning point in U.S. monetary policy, a succession of strong U.S. job numbers, uncertainty about the future direction of policy in Europe and Japan, as well as increased concern about the strength of the Chinese economy, you would not be expecting that to make for a benign time in financial markets,” Guy Debelle of the BIS said. “But that is what we have seen for much of this year.” (CNBC)
But stocks aren’t cratering because of tensions in the Middle East or Eastern Europe. That’s baloney. And they’re not falling because of decelerating global growth, plunging oil prices or Ebola. They’re falling because no one knows what the heck is going to happen when QE stops at the end of October. That’s what has everyone in a lather.
Keep in mind, that 20 percent of the current market cap (more than $4 trillion) is stock buybacks, that is, corporations that have bought their own shares to juice prices. Do you really think that corporate bosses are going to play as fast and loose after the Fed stops its liquidity injections?
Not on your life. They’re going to pull in their horns and see what happens next. And if things go sideways, (which they very well could) they’re going to cash in and call it a day. That’s going to drive down stock prices and send markets reeling.
Stocks have nearly tripled since March 2009 when the Fed started this “credit easing” fiasco. So if stocks rode higher on an ocean of Fed liquidity, then how low are they going to go when the spigot is turned off? There are some, like technical strategist Abigail Doolittle, who think the S and P 500 could suffer a major heart attack, dropping as much as 60 percent before equities touch down. Check it out from CNBC:
“(Abigail) Doolittle, founder of Peak Theories Research, has made headlines lately suggesting a market correction worse than anyone thinks is ahead. The long-term possibility, she has said, is a 60 percent collapse for the S&P 500.
In early August, Doolittle was warning both of a looming “super spike” in the CBOE Volatility Index as well as a “death cross” in the 10-year Treasury note.
And so it’s come to pass at least for the VIX, which has jumped 74 percent over the past three months and crossed the 20 threshold that historically has served as a dividing line between complacency and fear. That’s its highest level in nearly two years. From Doolittle’s perspective, the spike represents a bad-news/bad-news scenario … that the near-term selling action is likely to continue and even accelerate…
…she thinks “violent waves of selling action” could send the VIX all the way to 90—even beyond its peak during the financial crisis.” (CNBC)
Now maybe Doolittle is just exaggerating or paranoid, but her conclusions do seem to square with CNN Money. Here’s a clip from yesterday’s article:
“CNNMoney’s Fear & Greed Index is a good indicator of market momentum. Today it hit zero. That’s a huge red flag and showcases extreme fear in the stock market. The only other time the index ever touched that low point is in August 2011 — shortly after Standard & Poor’s downgraded the U.S. debt.
Volatility — or what some are calling “market whiplash” — is clearly back in the market. The VIX, an index that measures volatility and is one of the factors that goes into the Fear & Greed Index — spiked again today. It’s up a whopping 60% in the past week alone.” (Extreme Fear in stock market, CNN Money)
So fear and volatility are back, but liquidity has suddenly gone missing. That sounds like a prescription for disaster to me. So what can we expect in the weeks to come?
Well, more of the same, at least that’s how Pimco’s former chief executive officer Mohamed El Erian sees it. Here’s how he summed it up on Wednesday in a Bloomberg editorial:
“Though unlikely to be as dramatic as today, market volatility can be expected to continue in the days and weeks to come as two forces compete: first, the forced deleveraging of certain investors, particularly overstretched hedge funds registering big October losses; second, central banks scrambling to say all sorts of reassuring things. All of this will serve to reinforce October’s longstanding reputation as a threatening month for investors around the world.” (October’s Wild Ride Isn’t Over Yet, Mohamed A. El-Erian, Bloomberg)
Did he say “forced deleveraging”?
Uh huh. So, after a 6 year bacchanal, the Fed is finally going to take away the punch bowl and force the revelers to pay down their debts, clean up their balance sheets, and take a few less risks. Is that it?
Yep. It sure looks like it. But, that could change in the blink of an eye, after all, the Fed has its friends to think of. Which means that Ms. Yellen could announce QE4 any day now.
A recent study by Harvard Business School found that United States corporate executives make over 300 times as much as the average worker. Based on a $30,000 annual worker income and a 40 hour week the CEO gets $4326.00 an hour while the worker gets $14.42.
In the mid-thirties during the depth of a serious depression executives at General Motors were making 200 times as much as their workers. It was this disparity that helped set the stage for a power shift from the corporate moguls to John L .Lewis and his CIO (Congress of Industrial Organizations). John L. Lewis and hundreds of thousands of disgruntled workers succeeded in forcing well-armed and well connected corporate executives to allow collective bargaining which ultimately unionized large portions of the U. S work force.
It was a struggle of epic proportions that bared the fangs of the power elite against the will and leadership of the workers. It began at the Chevrolet Body Plant in Cleveland, Ohio and spread to Flint, Michigan then to Atlanta, Kansas City, Pontiac, and finally to Detroit itself. Nearly half a million workers were involved. At Flint they staged a sit in where the workers sat at their stations day and night. Machine guns were brought in. The courts got involved. Finally an injunction was issued.
The strike began on December 28, 1936. The edict ordered prison sentences and million dollar fines if the strike was not stopped by February 3rd. Governor Frank Murphy of Michigan called out the National Guard who along with strike breakers armed with clubs and crowbars surround the Flint Plant.
According to William Manchester’s account in “The Glory and the Dream” Governor Murphy was ready to send the bayonets of the National Guard against the workers when at the last moment he called John L. Lewis asking what he should do. Lewis replied, “You want my answer, sir? I shall personally enter General Motors Chevrolet Plant Number Four. I shall order the men to disregard your order, to stand fast. I shall walk up to the largest window in the plant, open it, divest myself of my outer raiment, remove my shirt and bare my bosom. Then when you order your troops to fire, mine will be the first breast that those bullets will strike. And as my body falls to the ground, you will listen to the voice of your grandfather as he whispers in your ear, ‘Frank, are you sure you are doing the right thing?’” (Murphy’s grandfather had been hanged in an Irish uprising.)
Fourteen strikers were wounded during the night but Murphy backed down and finally ordered GM not to prevent the strikers from carrying food to the sitting strikers. With President Roosevelt silent and Governor Murphy aiding the strikers the corporate elites succumbed, signing contracts for collective bargaining. Unionization spread rapidly into other big corporations.
Globalization was anathema to union workers. When the rape of United States markets was set in place by our elected officials through ratification of international trade legislation a great burden was placed on unions. The rush to be competitive in world markets was diametrical to unionism.
Justice is a prerequisite to peace. When human power is concentrated and not prescribed ghastly actions often result. God’s overarching legal system provides perfect justice and a necessary restraint; when it is cast off the power swings that marked unions and management replace it.
In our time a more insidious power structure threatens our well-being. For at least a century a systematic plan has been in place to bring the nations of the world under international law. Nation after nation has been subverted by monstrous, opaque centralized power. Every major nation of the Western world has been subjected to stealth control. Debt is the weapon. Since Islam forbids most debt, Muslim nations are harder to conquer. Military force is necessary and the United States is being used as an instrument of conquest.
Corporate mergers have created behemoths that have little competition and are tyrannical in their own rite. The furtive power seekers are not planning a free society. Their vision appears to be a controlled environment similar to China. As economic pressure drains wealth from the United States and oppression ramps up, our standard of living falls, eventually bringing us to par with third world labor. It is like a 007 movie where James Bond has accepted a bribe to join Blofeld.
Globalization is marred by the illegal procedures used to bring it about. Wealthy and powerful men and women conspired to burglarize, undermine, and tyrannize the entire population of the world. Their methods are bribery and intimidation and the results of their evil intentions are apparent around the globe.
One wonders if an honest, forthright free-will proposition had been presented to the people of Western Civilization they might have voluntarily participated in bringing the Far Eastern Nations into their economic circle and endorsed an international legal code that would guide global trade. Conspiracies are sometimes successful but they are wicked and harsh.
Recently, the National Press Club hosted a debate on War and the Constitution between Bruce Fein, a Ron Paul adviser and resident scholar at the Turkish Coalition of America, and John Yoo, a wily Korean born Constitutional Lawyer and prominent Bush II adviser. C-Span carried the debate. Yoo maintained that the increase in the power of the Executive Branch of our government was a result of congressional acquiescence and Fein maintained that it is up to the people to elect officials that will abide by the Constitution.
The contending positons were logical and convincing but as with all of public discourse the core issues were evaded. No one mentioned the fact the incumbent elected official have the political clout to codify unconstitutional and tyrannical law while continuing to garner enough votes to stay in office. Yoo claimed that congressional leaders are regularly consulted on Executive Orders and other major decision.inclosed sessions; no one mentioned that this plotting is inimical to the well-being and health of the nation.
Consider the repercussions if a nuclear bomb had been dropped on the city of Detroit! Legislation passed by our elected officials has caused similar damage. In a recent interview a Detroit official said that there are 80,000 derelict homes in the city. They are being demolished in a process that is similar to cleaning up after a major attack. The destruction of this once great city is a result of the heretical actions of our own government and it has been done without as much as a whimper from our citizens.
Fein was right when he placed responsibility with the people but at this point the statement was mute for not only has the damage been done but our people are still inert and deluded. Because we have forsaken the Creator and cleaved to the creature our delusion has allowed us to sink so far into the quicksand that escape seems improbable.
Rousas Rushdoony writes “To control the god of any system is to control the men within it. The long battle between church and state has this fact at its roots. Orthodox Christianity gives us a God who is beyond the control of church and state alike. Hence the God of Scripture has been resented by civil governments, and attempts to subvert orthodox Christianity and its churches have been legion. The church too often has been restless under so sovereign a God; churchmen too prefer a god who can be put into man’s pocket.”
The citizens of the United States of America worship humanistic gods. Our deities are designed and controlled by human beings. These gods, created in human minds, have been in place for most of United States history.
Now the chickens have come home to roost!
Human beings were not created to govern themselves and when the anarchy of human opinion gains leverage over society, absurdity, chaos, and tyranny soon follow.
In the Harvard survey U. S. citizens guessed that corporate executives were making about 30 times the average worker’s wage. Citizens in other nations made similar errors in estimates.
It is readily apparent that the captain of the ship fills a more important role than a kitchen worker but to accurately measure and quantify that difference is difficult.
What is interesting, however, is that the U. S. tops the world in the size of its wage inequity. Switzerland is 2nd and Germany is 3rd, both have disparities of about 150 times the average worker or half that of the U. S. Wage inequity is not the only area in which our nation excels: We incarcerate the larger percentage of our citizens than any other nation in the world (including China and Russia); we have the world’s largest army. We had the world’s largest economy before the power barons began to dismantle it. We are probably the most violent nation. Violence brought the United States independence, violence freed the slaves and preserved the nation, violence conquered the West, it was the instrument of land acquisition, and of efforts to subdue rebels. Now it is being used to subdue the Muslim world.
When we are too lethargic to stop voting in elections that are rigged and too lazy to verify that our news is mostly propaganda and lies, we have no chance of helping to bring our profligate nation back under the sovereignty of the One True God.
God’s Law provides perfect justice. Peace is impossible without justice. When injustice becomes ingrained in a society that society comes under judgment and God’s judgment can be grueling. If Bruce Fein’s charge to U. S. citizens ever finds fertile ground it must start with Christians. Christians are required to be the light of the world. Light reveals what darkness hides. It is long past time for Christians to discern and reveal the evil that confronts us.
Seldom does the enormous bond market turn on the fate of a single trader. Well, the news that Bill Gross was leaving Pimco under suspicious circumstances did not go unnoticed. The WSJ writes:
“The yield on the 10-year benchmark Treasury note was hovering around 2.506% immediately before the disclosure that Mr. Gross was leaving the hundreds-of-billions of dollars in Treasurys and other debt he oversaw at Pimco to go to rival firm Janus Capital Group Inc.
Within a half-hour, the yield jumped to 2.546%. While a move of 0.04 percentage point may not seem like much in that period of time, it was perceptible enough in the $12 trillion Treasury market that several traders and strategists attributed it to the news about Mr. Gross.”
Attempting to explain the reasons for his departure, The Economist speculates in the essay, Overthrowing the Bond King. “There appear to be three main reasons behind Mr Gross’s abrupt exit. The immediate cause was his abrasive management style . . . Moreover, Mr. Gross’s public behavior has grown increasingly peculiar of late . . . Such mis-steps might have been forgiven had Mr. Gross’s charmed streak as an investor continued. But over the past three years, several misjudgments have caused his funds to lag.”
At this point What You Need to Know About SEC’s Investigation of Pimco, centers on a relatively small $3.6 billion ETF, exchange-traded fund.
“Apparently, Pimco went around buying up small blocks of bonds, known as “odd lots,” at discounts. Pimco then marked their prices upwards using estimates of their values derived from larger blocks of bonds.
If Pimco really couldn’t resell the bonds at the new, higher prices it seems off base. But it also seems plausible the bonds might genuinely be worth more in Pimco’s hands than they were in the hands of whoever sold them.”
The mystic that Pimco enjoyed in bond trading may have sunk from the implications of SEC snooping. Gross seems like he is sprinting for the exit, but is this all that is in play? Investor’s Business Daily paints a smiley face on the open door that Gross’ transfer of loyalties as a positive for Janus Capital Group.
Now step back from these headlines and examine the concerns that have been floated about the bond market for a very long time. Money Beat in an account suggests that aBond Bubble Will Burst in a ‘Very Bad Way’ and reports on the recent Bloomberg’s Markets Most Influential Summit.
“Bonds are at ridiculous levels,” Julian Robertson, founder of one of the earliest hedge funds in Tiger Management Corp., said on a panel at the Bloomberg Markets Most Influential Summit. “It’s a world-wide phenomenon that governments are buying bonds to keep their countries moving along economically.”
Howard Marks, the chairman of Oaktree Capital Group LLC, said interest rates are “unnaturally low today.” Leon Cooperman, founder of Omega Advisors Inc. and former partner at Goldman Sachs, said bonds are “very overvalued.”
Forecasting the direction of government bonds usually focuses on predicting what central banks will do to drive interest rates, either up or down. Since consensus in market watchers has long announced that U.S. Bonds yields are unnaturally low, the calls for a turn upward in interest rates seem ridiculously overdue in coming.
All that seems reasonable; however, the Federal Reserve is playing a much different game from the responding to the normal business cycle.
Since the financial meltdown of 2008-2009, the charts and metric gauges for predicting market movements require a complete overhaul. Betting on U.S. Bonds no longer is based solely on domestic factors.
ZeroHedge cites David Tepper Is Back, Sees “Beginning Of The End” Of Bond Bubble.
“Empirically, Tepper may be right: in the past every time a central bank has launched a massive easing program (think QE1, QE2, Twist, QE3, etc.) it resulted in aggressive stock buying offset by bond selling. The issue is when said programs came to an end, and led to major selloffs in equities, pushing bonds to newer and lower record low yields. So perhaps for the time being, we may have seen the lows in the 10Year and in the periphery. The question is what happens when Europe’s latest “Private QE” operation comes to an end: just how massive will the bond bid be when all the money currently invested in risk assets decided to shift out all in one move.
More importantly, it also explains why central banks now have to work in a constant, staggered basis when easing, as the global capital markets simply cannot exist in a world in which every single central bank stops cold turkey with the “market” manipulation and/or liquidity injections.”
Within this context, why all the hullabaloo over Bill Gross jumping ship? While price inflation is real and grossly underreported, currency deflation still persists over the last six years. Now some may claim this phenomenon proves that stability in the bond market exists. Conversely, if this measure is acceptable to institutional bondholders, are they not accepting very low returns out of fear that the economy still hangs on a precipice.
Always remember that bonds are loans that have an obligation for repayment. Stability is maintained in the core indebtedness with the reimbursement settlement of the principal. Most governments are able to string along the unavoidable roll over so that new funds are raised to refinance.
Not so in every case from private or corporate debt. Just ask the bond holders from GM, better known as “Government Motors”.
Government bonds make up the essential float in the paper trade. As long as the global collateralization of bonds is honored, the planet may be able to avoid the fate of Greece. Pimco is but a pimple when compared to the Federal Reserve’s monetization of U.S. Treasury debt.
Bond professional traders look for an edge. Firms may risk their own capital, but most brokers look to skim an easy commission. It’s the institutions who have the most at stake and need a stable bond market. When not if, the bubble busts or deflates, the air is going to escape and blow over average investors.
“French aircraft were due to begin their first reconnaissance flights over Iraq,” France’s Foreign Minister Laurent Fabius announced on September 15. Britain is already flying reconnaissance missions over Iraq. Several other countries – Arab ones included – say they are willing to support the air campaign. None seem interested in pledging any ground troops, however.
“Well, you will hear from Secretary Kerry on this over the coming days. And what he has said is that others have suggested that they’re willing to do that. But we’re not looking for that right now,” Chief of Staff Denis McDonough waffled on “Meet the Press” on Sunday, September 14. “We’re trying to put together the specifics of what we expect from each of the members,” he added, which is one way of saying the United States is finding it hard to persuade other countries to provide ground forces – something the self-designed leader of the “coalition” is unwilling to do. Also on “Meet the Press” James Baker noted that the biggest problem “of course, is who are our, quote, ‘partners on the ground’ that the president referred to in his speech. And I don’t know where they come from.” Let it be noted that Baker put forth an ad-hoc strategic plan that was, in fact, far better than the one outlined by Obama. He suggested joining forces with China, Russia, Iran, Syria and others, following a non-UN-sponsored international conference of genuine international leaders.
There are no “partners on the ground” for now, and those that the Administration wants to groom for the role are worse than none: McDonough conceded that ground troops are needed, “that’s why we want this program to train the [Syrian] opposition that’s currently pending in Congress.” In my curtain-raiser on President Obama’s much-heralded speech of September 10, posted two days before he delivered it (“Obama’s Non-Strategy”), I warned that he – disastrously – still counts on the non-existent “moderate rebels” in Syria to come on board, and still refuses to talk to Bashar al-Assad, whose army is the only viable force capable of confronting the IS now and for many years to come. In short, “he has no plan to systematically degrade the IS capabilities, no means to shrink the territory that they control, and certainly no strategy to defeat them.”
Obama’s address to the nation on September 10 confirmed all of the above, but it also contained numerous non sequiturs, falsehoods, and delusional assertions that need to be addressed one by one. (The President’s words are in italics.)
I want to speak to you about what the United States will do with our friends and allies to degrade and ultimately destroy the terrorist group known as ISIL.
This is an audacious statement of intent: not what the U.S. and America’s unnamed “friends and allies” will try to do, but what they will do to destroy an effective fighting force of some 30,000 fanatical jihadists at the time of this writing, and rapidly rising – an army, in fact, which is well armed and equipped, solvent, and highly motivated. Regardless of the coherence of Obama’s proposed methods – more of that later – what he announced is the beginning of yet another open-ended Middle Eastern war in which the United States will be fully committed and in which the “job” will not be considered “done” until and unless the IS is “destroyed.” Newt Gingrich is already salivating at the prospect of America spending “half of a century or more hunting down radicals, growing reliable self-governing allies, and convincing friends and neutrals to be anti-radical.” This nightmare is good news – at home – only for the military-industrial complex, and abroad for the jihadists of all color and hue. “Half a century or more” of such idiocy can only accelerate this country’s road to bankruptcy, financial as well as moral.
Over the last several years, we have consistently taken the fight to terrorists who threaten our country. We took out Osama bin Laden and much of al Qaeda’s leadership in Afghanistan and Pakistan.
Osama bin Laden’s death did not make one scintilla of difference. Al Qaeda’s (AQ) leadership is not a snake but a hydra: you can “take out” a hundred of its leaders today, and another hundred will take their place tomorrow. Successfully killing scores or thousandsof jihadists should not be confused with winning against jihad. More importantly – and Obama seems to be oblivious to the fact – al Qaeda is not a hierarchical organization, but a state of mind and a blueprint for action. Its non-affiliates, too – in Nigeria, Libya, Syria, the Philippines, Kashmir etc. – follow the same guiding principles and seek the same millenarian objectives. As any counterterrorism expert can tell you, “targeted” drone killings are doing more damage than good by angering local populations – which suffer “collateral damage” – thus providing an inexhaustible pool of fresh recruits for the jihadists (quite apart from legal and moral considerations).
We’ve targeted al Qaeda’s affiliate in Yemen, and recently eliminated the top commander of its affiliate in Somalia.
It is breathtaking that Obama should imply that Yemen and Somalia are his administration’s success stories that should be emulated in the campaign against the IS. As Nicholas Kristof noted in The New York Times, “Obama may be the only person in the world who would cite conflict-torn Yemen and Somalia as triumphs.”
Yemen is an ever-growing hotbed of terrorist activity regardless of (and more likely partly due to) more than 100 American airstrikes since 2002, which killed some 500 militants and over a hundred civilians. (When Yemeni kids are disobedient, their parents have a new tool of enforcing discipline: “A big American drone will come and get you!”) The Department of state admitted in its most recent worldwide terrorism report that “of the AQ affiliates, AQAP (Al Qaeda in the Arabian Peninsula) continues to pose the most significant threat to the United States and U.S. citizens and interests in Yemen.” Its success, according to the report, is “due to an ongoing political and security restructuring within the government itself” [i.e. no effective government and no reliable security forces]. “AQAP continued to exhibit its capability by targeting government installations and security and intelligence officials, but also struck at soft targets, such as hospitals,” and it continues to expand territory under its control. Somalia is an utterly failed state with no functioning government, and al-Shabaab’s terrorist base from which complex operations are launched against soft targets in neighboring countries (notably last year’s attack on Nairobi’s Westgate mall, which killed at least 67 people).
If this is the model for the anti-IS campaign, then even a century of Newt’s “hunting down radicals, growing reliable self-governing allies, and convincing friends and neutrals to be anti-radical” will be a fiasco – albeit on an infinitely grander scale.
We’ve done so while bringing more than 140,000 American troops home from Iraq, and drawing down our forces in Afghanistan, where our combat mission will end later this year. Thanks to our military and counterterrorism professionals, America is safer.
The fruits of the war in Iraq are all too visible. It cannot be stated often enough that America’s war against Saddam – who never threatened the United States, and opposed Islamic terrorism – produced the IS, which is now treated as an existential threat which requires another American war to eliminate.
In Afghanistan the Taliban is well poised to make a comeback one, two, at most three years after the end of the American combat mission. It is able to carry out attacks in the center of the capital, Kabul, the latest of which – on September 16 – killed three members of NATO’s International Security Assistance Force. Safer, indeed.
Now let’s make two things clear: ISIL is not “Islamic.” No religion condones the killing of innocents, and the vast majority of ISIL’s victims have been Muslim.
This is surreal. Obama may have been born and raised a Muslim, but he claims not to be a Muslim now; it is therefore as preposterous for him to pass judgments on the Islamic bona fides of Muslim entities as it would be for the Saudi king to decide whether the Orange Order of Ulster or the Episcopal Church are “Christian” (a purely technical parallel, of course). In any event, Obama’s theological credentials were established with clarity in the aftermath of James Foley’s beheading by the IS, when he declared (also in the context of absolving Islam of any connection with the IS) that “no just God would stand for what they did yesterday and what they do every single day.” Since they did what they did, this unambiguous statement means that – in Obama’s opinion – either there is no God, or God is not just.
Contrary to Obama’s assurances, Islam does condone the killing of infidels (non-Muslims) and apostates (Shiites) – they are not “innocents” by definition. And of course Muslims have been killing other Muslims – often on a massive scale – ever since three of the four early caliphs, Muhammad’s immediate successors, were murdered by their Muslim foes. It is immaterial whether ISIS is true to “Islam” as Obama chooses to define it. It is undeniable that it is true to the principles and practices of historical Islam.
Obama either does not know what he is talking about, or he is practicing a variety of taqiyya. As Nonie Darwish put it bluntly in the American Thinker on September 12, Obama does not want to go down in history as the one who destroyed and extinguished the dream of resurrecting the Islamic State. Under his watch Islam was placed on a pedestal and that helped revive the Islamic dream of the Caliphate:
Muslims felt that Obama was their man, under whom they had a chance to achieve their powerful Islamic state. Obama himself was not happy with the military takeover and destruction of the Muslim Brotherhood in Egypt. Jihadist ambition had to move away from Egypt to war-torn Syria and Iraq. For more than two years, Islamists have carried out flagrant and barbaric mass terrorism – beheadings, torture, kidnapping, and sexual slavery of women, men, and children. Obama ignored the problem until it blew up in our faces with the beheading of two Americans.
Even if he could defeat ISIS, Darwish argues, that would turn him into an infidel enemy number one of Islam – one who supported Muslims in their dream of the Caliphate by looking the other way, only to later crush it. Obama therefore cannot be honest about this dilemma regarding ISIS; “a dilemma between his duty to the USA, the country he chose to lead, and his dream of becoming the hero of the Muslim World who taught the West a lesson on how to treat Muslims. Obama will not obliterate ISIS but will contain it, as he said. He will eventually kick the can to the next administration, not only because he hates wars as he claims, but because he does not want to be enemy number one of Islam and the Muslims.” That is Obama’s dirty little secret that explains his paralysis before ISIS, Darwish concludes: “Ironically, the man who claimed to have healed the relationship between the West and the Muslim world will go down in history as the one who helped the rise and the bloody fall of the Islamic State and perhaps America itself.”
And ISIL is certainly not a state… It is recognized by no government, nor the people it subjugates.
Obama does not know the feelings of some ten million people under IS control. Many of those who did not cherish life under its black banner have already fled to Damascus, Baghdad, or Erbil. There is no doubt that it is successful in attracting thousands upon thousands of new recruits every month. And as I wrote in the current issue of Chronicles, the Caliphate is a “state” whether we like it or not:
Traditional international law postulates the possession of population, of territory, and the existence of a government that exercises effective control over that population and territory: a state exists if it enjoys a monopoly on coercive mechanisms within its domain, which the caliphate does. After all, unrecognized state entities such as Transnistria, Abkhazia, Northern Cyprus, South Ossetia, and Nagorno-Karabakh command their denizens’ overwhelming loyalty and exercise effectively undisputed control over their entire territory. Some international jurists may cite the ability of the self-proclaimed state’s authority to engage in international discourse, but that is a moot point. The capacity to control a putative state’s territory and population almost invariably leads to such ability, regardless of the circumstances of that state’s inception: South Sudan is a recent case in point, and the creation of Israel in 1947 also comes to mind.
ISIS controls an area the size of Montana in northeastern Syria and western and northwestern Iraq. It has substantial funds at its disposal, initially given it by the Saudis, Kuwaitis, Turks, Qataris, Bahrainis, UAE donors, et al., and augmented to the tune of half a billion dollars looted from the Iraqi government vaults in Mosul and Tikrit. It is effective in collecting taxes, tolls, and excise duties. With no debts or liabilities, the existing stash and ongoing cash flow makes the emerging Caliphate more solvent than dozens of states currently represented in the UN. It has enough oil and derivatives not only for its own needs, but also to earn the foreign exchange needed to buy all the food and other goods it needs from abroad.
ISIL is a terrorist organization, pure and simple.
It is not that (see above). This statement reflects a conceptual delusion which ab initio cannot provide the basis for a sound strategy. Obama’s own State Department declared as far back as July 23 that “ISIL is no longer simply a terrorist organization” – or at least that is what Brett McGurk, deputy assistant secretary for Iraq and Iran, told a House Foreign Affairs Committee hearing on that day. “It is now a full-blown army seeking to establish a self-governing state through the Tigris and Euphrates Valley in what is now Syria and Iraq.”
And it has no vision other than the slaughter of all who stand in its way.
It does have a vision. That vision is eminently Islamic in its millenarian strategic objectives, in its tactics, and in its methods. It is no more utopian than Obama’s vision of an “indispensable” America, which – as he put it at the very end of his speech – stands for “freedom, justice and dignity,” an America which defends those “timeless ideals that will endure long after those who offer only hate and destruction have been vanquished from the Earth.”
In its self-proclaimed status as a caliphate, the IS claims – in principle – religious authority over all Muslims in the world, and ultimately aspires to bring all Muslim-inhabited lands of the world under its political control. Last June ISIS published a document which announced that “the legality of all emirates, groups, states and organizations becomes null by the expansion of the khilafah’s authority and arrival of its troops to their areas.” It rejects the political divisions established by Western powers in the Sykes–Picot Agreement of 1917. Its self-declared immediate-to-medium-term goal is to conquer Iraq, Syria and other parts of al-Sham – the loosely-defined Levant region – including Jordan, Israel, Palestine, Lebanon, Cyprus and southeastern Turkey. It is a bold, even audacious vision, but a vision it most certainly is.
In a region that has known so much bloodshed, these terrorists are unique in their brutality. They execute captured prisoners. They kill children. They enslave, rape, and force women into marriage. They threatened a religious minority with genocide.
There is absolutely nothing “unique” in the IS fighters’ brutality. They are only following the example of their prophet. Muhammad executed Meccan prisoners after the battle of Badr in 624AD. He condoned the killing of women and children besieged in Ta’if in 630. He and his followers enslaved, raped and forced into marriage Jewish women after he massacred the men of the Jewish tribes of Banu Qurayzain 627 and Banu Nadir in 629. He even “married” one of the captured Banu Nadir women, Safiyya bint Huyayy captured after the men Banu Nadir were massacred. He did not “threaten” the Jews of the Arabian peninsula with genocide, he carried that genocide so thoroughly that not a trace of them remains to this day. Christians living in the IS who want to remain in the “caliphate” face three options according to IS officials: converting to Islam, paying a religious tax (jizya), or “the sword.” This choice is as conventionally Islamic as it gets, having been stipulated many times in the Quran and hadith.
But this is not our fight alone. American power can make a decisive difference, but we cannot do for Iraqis what they must do for themselves, nor can we take the place of Arab partners in securing their region. That’s why I’ve insisted that additional U.S. action depended upon Iraqis forming an inclusive government, which they have now done in recent days… I can announce that America will lead a broad coalition to roll back this terrorist threat.
The would-be coalition of Sunni Muslim “partners” includes those who had been aiding and abetting ISIS for years, and who have neither the will nor the resources to fight it. As I wrote here last week, those countries’ military forces are unable to confront an enemy which consists of highly motivated light infantry, knows the terrain, enjoys considerable popular support, and operates in small motorized formations:
On the basis of its poor showing in Yemen it is clear that the Saudis in particular are no better than the Iraqi army which performed so miserably last June. Even when united in their overall strategic objectives, Arab armies are notoriously unable to develop integrated command and control systems – as was manifested in 1947-48, in the Seven-Day War of 1967, and in the Yom Kippur War of 1973. Their junior officers are discouraged from making independent tactical decisions by their inept superiors who hate delegating authority. Both are, inevitably, products of a culture steeped in strictly hierarchical modes of thought and action. Furthermore, their expensive hardware integrated into hard to maneuver brigade-sized units is likely to be useless against an elusive enemy who will avoid pitched battles.
An additional unresolved problem is Turkey, which is staying aloof and will not allow even U.S. facilities in its territory to be used for the air campaign. Erdogan is definitely not a “partner,” and Turkey continues to tolerate steady recruiting of ISIS volunteers in its territory as well as the passage of foreign jihadists across the 550-mile borderit shares with Syria and Iraq.
The most important problem in creating a coalition with Obama’s “Arab partners” is religious, however. The leaders of all Sunni Arab countries and Turkey are well aware that, contrary to Obama’s claims, ISIS is a Muslim group firmly rooted in the teachings and practices of orthodox Sunni Islam. They are loath to ally themselves with the kuffar in fighting those who want to fulfill the divine commandment to strive to create the Sharia-based universal caliphate. Those leaders are for the most part serious believers, and they do not want to go to hell.
Our objective is clear: we will degrade, and ultimately destroy, ISIL through a comprehensive and sustained counter-terrorism strategy. First, we will conduct a systematic campaign of airstrikes against these terrorists. Working with the Iraqi government, we will expand our efforts … so that we’re hitting ISIL targets as Iraqi forces go on offense.
The Shia-dominated Iraqi army is not to be counted upon, as attested by its flight from Mosul, and it cannot be counted upon to cooperate with the armed forces of the overtly anti-Shia regimes, even if in the fullness of time they provided ground troops. The Kurdish pershmerga also would be loath to treat Saudis or Qataris as brothers-in-arms. Even if they were capable of major operations, which they are not, both the Iraqi army and the peshmerga would be perceived by the Sunni Arab majority in northwestern Iraq as an occupying force with the predictable result that the “caliphate” could count on thousands of fresh volunteers. Obama’s “regional allies” could end up helping their Sunni coreligionists fight the Shia “apostates.” They regard the IS in western Iraq and northeastern Syria as a welcome buffer against the putative Shia crescent extending from Iran to the Lebanese coast. As for the “Iraqi forces,” they are devoid of any offensive potential now and that will not change for years to come.
Across the border, in Syria, we have ramped up our military assistance to the Syrian opposition… In the fight against ISIL, we cannot rely on an Assad regime that terrorizes its people; a regime that will never regain the legitimacy it has lost. Instead, we must strengthen the opposition as the best counterweight to extremists like ISIL, while pursuing the political solution necessary to solve Syria’s crisis once and for all.
“The Syrian opposition” is ideologically indistinguishable from the IS, militarily ineffective, internally divided, and far keener to renew its stalled fight against Bashar al-Assad than to fight the Caliphate. America’s would-be “coalition” partners have indirectly indicated that they are aware of this fact: several mentioned Iraq when announcing the proposed military measures last Monday, but none made any mention of the challenge next door.
Obama’s present heavy reliance on the “Syrian opposition” is at odds with his own doubts about its viability, which were openly expressed in an interview with New York Times’s Tom Friedman only a month earlier:
“With ‘respect to Syria,’ said the president, the notion that arming the rebels would have made a difference has ‘always been a fantasy. This idea that we could provide some light arms or even more sophisticated arms to what was essentially an opposition made up of former doctors, farmers, pharmacists and so forth, and that they were going to be able to battle not only a well-armed state but also a well-armed state backed by Russia, backed by Iran, a battle-hardened Hezbollah, that was never in the cards.’”
Now, however, Obama is rejecting cooperation with Damascus – the only realist course with any chance of success – and is relying on a “fantasy” scenario to create some boots on the ground. No lessons have been drawn from Libya’s collapse into bloody anarchy, or from the failure of America’s decade-long effort to train and equip the Iraqi army, which disintegrated when faced with the IS three months ago. Such fiascos notwithstanding, Obama wants to build up a Syrian rebel force as one of the pillars of his strategy – that same force of which he said to Friedman on August 8 that “there’s not as much capacity as you would hope.”
We will continue providing humanitarian assistance to innocent civilians who have been displaced by this terrorist organization. This includes Sunni and Shia Muslims who are at grave risk, as well as tens of thousands of Christians and other religious minorities. We cannot allow these communities to be driven from their ancient homelands.
“Tens of thousands of Christians” is a hundred-fold reduction of the magnitude of the problem that long-suffering community has faced in the region since the start of the Iraqi war in 2003. Obama’s statement is the exact numerical and moral equivalent to saying that “hundreds of thousands of European Jews” were at grave risk at the time of the Wannsee conference. As Peggy Noonan wrote the other day in the Wall Street Journal, “genocide” is the right word to describe the plight of the region’s Christians, noting that “for all his crimes and failings, Syria’s justly maligned Assad was not attempting to crush his country’s Christians. His enemies were – the jihadists, including those who became the Islamic State.” As well as those, let us add, who are now being groomed by the President of the United States to fight the Islamic State. No wonder he is deliberately and cynically minimizing the plight of his protégés’ Christian victims.
This is our strategy.
Lord have mercy!
This is American leadership at its best: we stand with people who fight for their own freedom; and we rally other nations on behalf of our common security and common humanity.
My Administration has also secured bipartisan support for this approach here at home. I have the authority to address the threat from ISIL.
This is disputable. Obama refers to the authorization originally concerning action against al-Qaeda, treating as a blank check for starting a new war of unknown magnitude and duration.
This counter-terrorism campaign will be waged through a steady, relentless effort to take out ISIL wherever they exist, using our air power and our support for partner forces on the ground. This strategy of taking out terrorists who threaten us, while supporting partners on the front lines, is one that we have successfully pursued in Yemen and Somalia for years.
Deja-vu all over again. On the grimly positive note, more Yemeni and Somali-like “successes” may be needed to accelerate America’s eventual return home.
America is better positioned today to seize the future than any other nation on Earth.
It would be a cliché to state that Obama is either deluded or stunningly cynical. He is both, of course, I’d say roughly 60:40.
Our technology companies and universities are unmatched; our manufacturing and auto industries are thriving. Energy independence is closer than it’s been in decades. For all the work that remains, our businesses are in the longest uninterrupted stretch of job creation in our history.
Cringe again: tasteless, self-serving inanities that have nothing to do with ISIS or strategy. Obama’s psychopatic narcissism trumps that of the Clintons, impossible as it may have seemed.
Abroad, American leadership is the one constant in an uncertain world. It is America that has the capacity and the will to mobilize the world against terrorists.
“The world,” indeed, minus Russia, China, India, Brazil, Argentina, Iran, South Africa, and scores of lesser powers on all continents (save Australia) which have the capacity and the will to reject Obama’s audacious and increasingly absurd notions of global leadership.
It is America that has rallied the world against Russian aggression, and in support of the Ukrainian peoples’ right to determine their own destiny. It is America – our scientists, our doctors, our know-how – that can help contain and cure the outbreak of Ebola. It is America that helped remove and destroy Syria’s declared chemical weapons so they cannot pose a threat to the Syrian people – or the world – again.
There is no “Russian aggression,” and “the Ukrainian peoples’ right to determine their own destiny” was brazenly undermined by the State Department/CIA-engineered coup d’etat in Kiev last February. It is preposterous for Obama to take credit for the destruction of Syria’s chemical weapons – it was Vladimir Putin’s diplomatic coup which got Obama off the hook when Congress and the public at large expressed their opposition to the intended bombing of Syria. But yes, American scientists and doctors definitely “can help contain and cure the outbreak of Ebola.” That was the only true statement in Obama’s address. Its relevance to his anti-IS strategy is unclear.
And it is America that is helping Muslim communities around the world not just in the fight against terrorism, but in the fight for opportunity, tolerance, and a more hopeful future.
… especially in places like Marseilles, Antwerp, Malmo, Dortmund, and Dearborn, Michigan.
America, our endless blessings bestow an enduring burden. But as Americans, we welcome our responsibility to lead. From Europe to Asia – from the far reaches of Africa to war-torn capitals of the Middle East – we stand for freedom, for justice, for dignity. These are values that have guided our nation since its founding.
Obama wouldn’t know the founding values if they hit him in the head. He is the worst president of the United States in history after all. That is no mean feat, considering the competition.
Random encounters between passing travelers crossing paths at the cosmic nexus lead to long conversations with philosophical overtones deep into the heart of night. Strangers meet near the end of the earth and hash out the best possible way to move forward, coming to terms on evolutionary solutions to the problems that plague this world. Open season declared on the honest form of communication. High above, dancing through the constellations, shooting stars in a crystal clear sky become plastered with the pure intention of truth. Cascading energy flows freely from a source somewhat undefined. Edging out to the periphery. Looking over the abyss. Eying what potential fate awaits us.
Will America go the route of austerity, leading it to riot like Greece in the streets? Or the way of Iceland, auditing the privatized printing press and bringing about the realization that the fiat-created debt belongs to the central bank and not the people it tries to keep shackled with its fractional reserve monetary policies of madness. The main plank of the communist manifesto involves setting up a central bank. Another plank near the top of the list deals with establishing a graduated income tax. Ha. America got the wool pulled over its eyes quite awhile ago when the Federal Reserve was created. In fact, it’s been over a hundred years now since that whopper of a lie was laid on the backs of the population. And the Beast continues to swallow everything in its ungodly path to this very day.
Blinding lights flash and burn in apocalyptic rapture as the fiery sun makes its daily appearance, rising on the horizon with a spectacular show of solar fury. Either turn away or let the light wash over. Either choose the cover of shadows and cower away forevermore in apathetic ignorance, or step into the bright awareness of awesome illumination. Sometimes a wound must hurt a little bit first before it can eventually heal. So it goes. The muscle has to be broken down before it can grow stronger. So, too, must a phase shift go through a state of chaos before a higher level of order can emerge. Welcome to the Cycle of the Phoenix. The fire scorches everything in its wake. Naught but a pile of ash remains. The new energy rises from out the decay and forms a more harmonious inclination toward liberty and freedom. An Empire in decline. Personal sovereignty on the rise.
The neat trick that must somehow be pulled off now is to simultaneously erase all imaginary lines of boundary drawn by the creeps that make up the wicked Priest Class while also breaking away from the centralized, command and control, structural apparatus of the ruling elite toward the prospect of bringing about a more tribal, anarchic arrangement of civilization. Global awareness coupled with local government. The two opposites can be cohesive. The yin/yang balance act. The dichotic wholeness of completely dualistic Oneness.
Breathed in through clean lungs. Experienced intimately by a clean heart. Known rationally within a clean mind. Felt intuitively in the core of clean guts. Pushed forward via a clean intention. Seen perfectly with a clear purpose. Razor sharp. Steadfast. Focused in on the zero point.
Truth rallies strong in the bottom of the ninth. A hail marry pass from the fifty yard line as the clock winds down to the final tick, caught by a leaping wide receiver and tucked away as two safeties smash him to the turf in the end zone. A final second buzzer beater heaved up from behind half court.
Nothing but net as it swooshes through. Miraculous for the winners. A crushing defeat for those who had the game in their grasp until it slipped away in the final moments. A lesson learned on seeing things through to the end. Sometimes bitter. Sometimes full of sweet honey. Bear claw in the hive. Sticky substance to coat the teeth. A layer of fat for the winter weather. Cold snap fever induced upon entering the cave.
We can only do so much. But then must, somehow, find the will to do a little more. Push the envelope. Bend back the layers of reality. Peel the onion skin until the gaseous irritant makes you weep. What do you see beneath? What is revealed where you never thought to look? How far down the rabbit hole can you stand to go? Is the jump taken as a leap of faith? Or are you fighting the fall all the way to the bottom?
Hands up as the roller coaster dives down. Hearts lift as the conspiracy unravels. A cabal of secrets revealed. A horde of Dark Wizards exposed. Shamans unite to drive out the virus. Gurus on the street come together to fight off the plague. Yogis breathe a new type of ecstatic spiritual energy into the body politic. A Druid Priest Warrior of Light. An Angel Pagan Goddess of Love. Together, hand in hand, they enter the zone where peace reigns.
The inner illumination of greater graceful glory awakens with newfound purpose to shake loose the cobwebs from the kingdom of Heaven which resides within. The right side of God’s throne is centered in the third eye of pure consciousness. The seat of the soul. Nothing can stop an idea whose time has come. Nothing can hold back the wave that has risen on good intentions. Tsunami in the forecast. Big Bang Birth of the oncoming storm. Black ominous velvet clouds release their payload before the sky breaks open and the sunray shines through. It’s always darkest before the dawn.
Umbrellas at the ready shield us with shelter. Smooth and sanctified. Alert and called to attention. Hut Hut. Here comes the rush. Sidestep and tap dance away. Ballerina feet on the gridiron surface. Logic and emotion tied up with reason. Rational analysis of deep feelings. Science and spiritualism coalesce at a fine point. The Tao of Natural Law emerges in high fashion. Thermodynamic consequences enter a state of entropy. A nuclear ambition stalemate checked on the black and white floorboard. Which piece to move now? Which force will give first? An indomitable inertia puzzles the agenda and counteracts the initial resurgence. Everything gets laid out on the table. Double down and bet the farm. All the chickens are coming home to roost. Karma has a powerful way of equaling out all actions once the final judgment has been rendered.
Well lookie here. Joyce Meyer, popular women’s conference speaker; health and wealth author; radio & TV teacher (whew!) has been invited to speak at the Onething Conference that will be held this December. The 4 day weekend supposedly draws 25,000 young adults. Visit Onething and you will find that the conference is “a gathering of believers who are setting their hearts to live with passion for Jesus.” Sounds like a conference most Christians would love to attend. What sincere believer wouldn’t want to share his/her passion for Jesus?
Not so fast. The group behind the event is none other than the International House of Prayer (IHOP) an evangelical mission organization that has its home base in Kansas City. IHOP-KC’s founder, Mike Bickle, has ties to the New Apostolic Reformation aka Dominionists; Kingdom Now; Latter Rain; Joel’s Army; Manifest Sons of God – the name has been changed to protect the guilty. Their aim is to transform society into the kingdom of God on earth. How? By controlling various aspects of society.
Before I fill you in on Meyer, you’ll need a bit of background on Bickle. A couple of decades ago he was in a heretical group known as the Kansas City Prophets,
who brought grandiose claims that a “new breed” of super prophets were beginning to arrive on planet earth who would change the world forever. These so-called prophets were a group of men that coalesced around a church known as the Kansas City Fellowship, pastored by Mike Bickle, that attracted a following of other likeminded churches in that region. (H/T Pastor Ken Silva)
So it’s not surprising that this self-professed “prophet” has been under scrutiny for his false teaching. Google his name and you’ll discover that he believes God speaks to him in an audible voice and claims that he’s been to heaven twice.
It’s important to note that last year Reformed pastor; author; conference speaker Francis Chan spoke at Onething where he declared “I love Mike Bickle.” Chan took a lot of heat for agreeing to speak at the conference. When friends and fans urged him to decline the invite, he admitted that he didn’t know much about Mike Bickle and IHOP so,
I kinda went on the Internet and started looking things up.
Whatever he found caused him to fall in love:
I go, man, there’s a lot of great things going on [at IHOP]. And today was the first time I ever met Mike Bickle. And, I love that guy. I do. And Mike knows—we talked about this—you know, there’s people who told me not to hang out with him.
Like, you know, words like “creepy” came up. And yet, I get to know this guy and I’m going, “Man, I love his heart. And I just want to publicly say I love Mike Bickle. (Source)
As you can see, Chan professed his love for the sort of person Jesus referred to as a ravenous wolf. (Mat. 7:15)
What Francis Chan failed to turn up in his investigation is that Mike Bickle has led countless young people astray. He’s a sort of a Pied Piper to those who journey to Kansas City from all over the globe to be a part of something “significant.” Once there, they stay for days, months…even years. You’ll find them in the prayer room praying. Prayer “led from a stage full of musicians and readers chanting repetitive phrasings of faith” goes on ‘round the clock.
The false prophet has filled the young sojourners’ heads with untruths such as “an elite end-time church defeats God’s enemies, and Jesus is ‘held in the heavens’ until it happens.” So they most “go forth and make ready.”
Apologist Matt Slick tells us that the major draw of IHOP is experience:
People often come to me citing their experience and go back again and again to experience “God” and the “Spirit” – [which is] no different than an emotional high. This is analogous to mysticism, which is defined as “the pursuit of deeper or higher subjective religious experience,” and “that spiritual reality is perceived apart from the human intellect and natural senses.”
Slick goes on to say:
One of the highest criticisms would be IHOP’s insidious Gnosticism. Gnosticism is derived from the Greek word gnosis, meaning “knowledge.” The hallmark of Gnosticism is the idea of having “hidden knowledge” of the spiritual realm that is unavailable to others. This knowledge comes via prophecies, visions, and dreams that God specifically gives to a certain privileged group of people – in this case IHOP. In fact, IHOP has their own “prophecy rooms” where one can receive “prophecies,” and they used to have a practice of mailing out recorded tapes, of which I was asked by my friend’s mother to translate! (Source)
One last comment about Francis Chan. The name may not be familiar but he’s without question a popular speaker and author whose books sell like hot cakes. Sadly, when it comes to the questionable goings on at IHOP, Chan has shown an astonishing lack of discernment. It goes without saying that: (1) He must change direction and move away from those who involve themselves with the metaphysical cults. (2) He must spend more time researching the people he associates with.
More On Meyer
For decades Joyce Meyer has been called a false teacher. Why? Because she holds to Word of Faith/prosperity/health and wealth heresy. She mixes error with good practical information for women, which is why she’s so popular. There’s plenty of proof for those who wish to know the truth (see the links at the end), and still many women choose to believe that those who say she’s a false teacher are wrong.
Some of her fans know what’s going on at IHOP-KC, so she’s bound to get blow back both before and after her appearance at Onething. People will wonder: If I know about Mike Bickle and IHOP, how could Joyce not know? They may even conclude that it’s a sign that her ministry is about to align with the modern day “apostles and prophets” movement.
So why in heaven’s name is she hitching herself to a wagon loaded with theological garbage. As I pointed out earlier, “prophet” Mike Bickle is heavily into the New Apostolic Reformation (NAR). That group’s theology is a load of garbage that should be hauled to the trash dump and burned.
But before I address the reasons Meyer has chosen to put her name on the marquee with Bickle’s, let’s follow the example set by the Bereans and compare her teaching to what Scripture says.
Truth Or Error, That Is The Question
One of the reasons Joyce Meyer is considered a false teacher is because she has taught that Jesus Christ atoned for our sins in hell:
The following quote is from her 1991 booklet, The Most Important Decision You Will Ever Make, she teaches a hallmark doctrine of Faith theology, namely, that Christ had to suffer in hell to atone for our sins and be born again:
“During that time He entered hell, where you and I deserved to go (legally) because of our sin…He paid the price there.…no plan was too extreme…Jesus paid on the cross and in hell….God rose up from His throne and said to demon powers tormenting the sinless Son of God, “Let Him go.” Then the resurrection power of Almighty God went through hell and filled Jesus…He was resurrected from the dead ¾ the first born-again man.” (Source)
What she said here is not the view traditional orthodox Christianity holds to. The Bible says that Jesus atoned for our sins on the cross. Listen to John 19:30:
When Jesus had received the sour wine, he said, ‘It is finished,’ and he bowed his head and gave up his spirit.
Orthodox Christianity teaches that Jesus’ shed blood was sufficient for the atonement of our sins. The moment Jesus uttered the words “It is finished” our sin debt was paid in full.
As to her teaching on prosperity and success, listen to Joshua 1:8:
This Book of the Law shall not depart from your mouth, but you shall meditate on it day and night, so that you may be careful to do according to all that is written in it. For then you will make your way prosperous, and then you will have good success.
So, does being prosperous mean Christians will be influential and financially secure? According to one commentary:
Many people think that prosperity and success come from having power, influential personal contacts, and a relentless desire to get ahead. But the strategy for gaining prosperity that God taught Joshua goes against such criteria. He said that to succeed Joshua must (1) be strong and courageous because the task ahead would not be easy, (2) obey God’s law, and (3) constantly read and study the Book of the Law – God’s Word. To be successful, follow God’s words to Joshua. You may not succeed by the world’s standards, but you will be a success in God’s eyes – and his opinion lasts forever.
For all you scoffers – it’s an undeniable fact that Joyce Meyer is a prosperity preacher, thus she’s a false teacher, a ravenous wolf.
Lifestyle Of The Rich And Famous
It’s no secret that she has been criticized for many things but first and foremost for her “conspicuously prosperous lifestyle.” The money her ministry rakes in doesn’t bother her fans in the least which is obvious as scores of them purchase her books, tune into her TV/radio shows, and flock to her conferences. They say her message is “uplifting.” For them doctrine isn’t important –hearing a positive message is what counts. And Joyce is all about making her fans feel good. She knows that they prefer a feel-good message over hearing the gospel. I mean, isn’t Christianity all about feeling good? Doesn’t becoming a believer mean we’ll be happy, healthy and wealthy? God loves us, yes He does. And because of His great love for His kids, He’s going to provide us with several homes—Joyce has several homes– and perhaps our own private jet so that we can fly all over the globe like she does.
Joyce Meyer’s prosperity preaching is right out of the Word of Faith (WoF) play book. That a person can create his/her own reality is the fairy tale Christianity she teaches and with no apology. So, it’s not helpful when a prominent Christian leader joins her on her TV show and instead of pointing out errors in her teaching he tells her (and the audience) that she’s a “great Bible teacher.”
Well, nothing could be further from the truth, and Ravi Zacharias, who gave her the compliment, should have known better. He of all people should know that she holds to WoF heresy. The compliment he gave her made it clear that he was oblivious to the fact that he was sitting next to a heretic. So, Ravi did for her what she’s doing for Mike Bickle, lending creditability when none is deserved.
Like Chan, if he would have done his homework before agreeing to the interview, it would have been patently obvious that he was going to be the guest of the Prosperity Priestess. It’s shocking that high-profile celebs such as Francis Chan and Ravi Zacharias don’t know who the wolves in the hen house are. Moreover, how could men of their stature not be aware that the NAR and WoF movements are at best aberrant and at worst cults?
Cults? you say with steam coming out of your ears. Let there be no doubt. These movements are viewed by some as cults for the reason that they’re “false, unorthodox, extremist” sects of Christianity (dictionary.com). In a word: counterfeit.
Now getting back the primary purpose for this article, why would Joyce Meyer agree to speak at a hugely controversial event with a notorious false teacher? Perhaps it’s because the Prosperity Priestess and the Pied Piper hold the same unbiblical theology, thus they’re birds of a feather. So it’s no big deal when they sit on a wire together.
Or perhaps it’s all about prosperity – hers! After hearing Joyce’s “uplifting” message people will flock to the book table to purchase her merchandise.
But that’s speculation. The point I want to drive home is this. More and more professing Christians are uniting with wolves in sheep’s clothing. Likewise, wolves and wolverines are joining forces with wolves from different wolf packs. The pack is growing. It’s getting stronger — and they’re cunning! False teachers now play a major role in the Christian community. As I mentioned above, in order to transform society into the kingdom of God on earth, wolves and wolverines must control things, such as entertainment; government; education; business/economy; media; and family — they’re heavily involved in pro-family organizations.
I’ll close with the words of a wise man, Pastor Ray Stedman:
So in this day of confusion, of uncertainty, which voice will you listen to? The voices of the occult world around us? The false prophets who are telling visions which they claim to be coming from the voice of God? The secular voices which tell us that things are not the way the Bible says they are? Which voice will you listen to? Whom will you follow? What will be the guideline for your actions?
Research Mike Bickle:
Stand Up For The Truth wrote a piece entitled Is IHOP a cult? One intern’s story and shared the story of Arial, a young woman who was an IHOP intern.
Mike Bickle Acknowledges Catholic Contemplative Influence on IHOP-KC—My Word Like Fire
Mike Bickle/IHOP research links–Apostasy Watch
New Apostolic Reformation research links—On Solid Rock Resources
Research Joyce Meyer:
In her own words…listen to Meyer preach the prosperity gospel. Hank Hanegraaff plays the clip and responds.
Joyce Meyer—Let Us Reason Ministries
Word of Faith/Televangelists research links—On Solid Rock Resources