Saturday, November 15, 2008

Eeyore's News and View

For this weeks Prep talk, we will look at the last portion of the article that we started last week.
Studying the SHTF at the University: Dark omens:
I forgot it! Darn, same as the gold stuff but worse, much worse. I've never been good at remembering some things, like numbers and names of people I meet, I forget those (instantly), they just flee my mind, uneventfully, but I do remember some other things that don't seem to be as important. I do remember living in USA as a kid. I remember my school, Pierce School, Don't remember exactly were it was, because we lived some in Boston, Massachusetts and some in New Hampshire. I remember my best friend, Freddy, and a girl (why is there always a girl? ) Samantha, Sam. She was red haired and tall, I had a picture of her playing together but I lost it. Some time between the age of 3 and 26 I lost that picture that was so dear to me. I remember the smell of an orange shaped "scratch and smell" sticker my kindergarten teacher stuck in a small book we made once. But I almost forgot this forever. This, this was important, a moment where the life we once knew stopped existing, and a group of students, in a class room that looked like and abandoned building, realized it, all 60 of us at the same time.
It's 1:06 AM over here. I just finished showering and my wife and son are asleep. I was putting shampoo on my hair, thinking about what I wrote today on this post, and remembered the exact moment when I realized along with several other people, not only that TSHTF (that we all knew) but that the world we once new no longer existed, and that this was not a hurricane, this was an ice age period, it wouldn't just go away.
We understood it the same way a kid understands photosynthesis: Because a teacher coldly explained it to us, even used graphics. I slept 5 hours yesterday, 2 hours the day before yesterday. Saturday night I didn't sleep at all. I'm already used to it. Deadlines at the University, staying late at night, drawing in CAD 3D, waiting until Renders are ready. It's a competitive world out there, and no one sympathizes with what you are going through, they just want you to perform as expected, and the standard is always high. It happened 4 years ago, almost a year after the December 2001 crisis. It was a social studies class and this teacher, don't remember if it was a he or a she, was explaining the different kinds of social pyramids. God! Now I remember more! We even had a text book with those darn, cruel pyramids! The first pyramid explained the basic society. A pyramid with two horizontal lines, dividing those on top (high social class) those in the middle (middle class) and the bottom of the pyramid (the poor, proletarian). The teacher explained that the middle of the pyramid, the middle class, acted as a cushion between the rich and the poor, taking care of the social stress. The second pyramid had a big middle section, this was the pyramid that represents 1st world countries. I which the bottom is very thin and arrows show that there is a possibility to go from low to middle class, and from middle to the top of the social pyramid. Our teacher explained that this was the classic, democratic capitalist society, and that on countries such as Europeans one, socialists, the pyramid was very similar but a little more flat, meaning that here is a big middle section, middle class, and small high and low class. There is little difference between the three of them.
The third pyramid showed the communist society. Where arrows from the low and middle class tried to reach the top but they bounced off the line. A small high society and one big low society, cushioned by a minimal middle class section of pyramid. Then we turned the page and saw the darned fourth pyramid. This one had arrows from the middle class dropping to the low, poor class.
"What is this?" Some of us asked.
The teacher looked at us. "This is us"
"It's the collapsed country, a country that turns into 3rd world country like in pyramid five where there is almost no middle class to speak, one huge low, poor class , and a very small, very rich, top class."
"What are those arrows that go from the middle to the bottom of the pyramid?" Someone asked.
You could hear a pin drop. "That is middle class turning into poor".
I won't lie, no one cried, though people rubbed their faces, held their heads and their breath.
No one cried, but we all knew at that very moment that all we thought, all we took for granted, simply was not going to happen.
"You see, the income from the middle class is not enough to function as middle class any more. Some from the top class fall to middle class, but the vast majority of the middle class turns into poor" Said the teacher.
I don't know how many people in that room suddenly understood that he/she was poor.
The teacher continued "You see, we have a middle class that suddenly turns to poor, creating a society of basically poor people, there is no more middle class to cushion tensions any more. Middle class suddenly discovers that they are overqualified for the jobs they can find and have to settle for anything they can obtain, there for unemployment sky rockets, too much to offer, too little demand. You see they prepare, study for a job they are not going to get. You kids, you are studying Architecture because you simply wish to do so. Only 3 or 4 percent of you will actually find a job related to architecture."
We all sat there, letting it all sink in. After a few months, it all proved to be true. Even the amount of students that dropped out of college increased to at least 50%. They either so no point in studying something that would not make much of a difference in their future salaries, had no money to keep themselves in college, or simply had to drop college to work and support their families.
Someone once said, in this forum, that if this had happened in USA, the social unrest would have been much worse, because people from S. America are stronger. At first, I told him that I didn't think so, I said that all humans adapt when they have no other choice. But now that I consider it more, maybe he was right. Not that S. Americans are stronger, but they are more used to adversities. Most of us are children from grandparents that escaped civil war, either in Spain or dictators in Italy, our parents survived the dirty war, even more dictators, and therefore their children are of strong character too. Can USA citizens survive what we survived? Of course they can, though I think that there are too many that are not like you, many that don't prepare, and take everything for granted. Those are the ones that will be responsible for the increase in the social unrest once the SHTF, those that were too lazy to take care of themselves before the SHTF, or that had gone soft through out the years, believing that the government will "take care of them because they pay their taxes". But in the end, they will pull through. People will adapt, they always do. You'd be surprised. And those that don't want to adapt to the new reality they live in, will die young, thus cleaning the gene pool and ensuring the continuity of the specie. It's been this way for thousands of years.
MISCELLANEOUS Q&A
Don't prepare for an idiot shooting a Raven at you 200 yards away, prepare for the sneaky son of a gun that waits until you are distracted, fed the dogs some nice pills, and gets to you when you less expect him. THAT is much more likely than someone attacking you 200 yards away.
I didn't mean it as an insult to anyone, I'm well aware that there are cases of people shooting enemies 1000 yards away. That is war. Killing someone that wants you dead before he gets close to you is perfectly logical.
Please name me one case of self defense where the person shot the bad guy 100 yards away.
I had a guy try to steal my car a while ago while visiting a friend at his farm.
I saw the guy next to my car about 300 meters away. I had my FAL PARA with me, since we where going to spend some time shooting that morning.
I could have shot that guy from a safe distance, right? But you can't do that in real life. People that shoot others 300 meters away for no reason, claiming self defense, are called psychos. I had to fold my rifle, hide it under my coat, walk to where my car and the guy where, and ask him what he wanted. When he said that he was there to take the car I leveled my FAL at him, and as it usually happens in real life, the guy almost pissed his pants, and left, babbling some BS story I no longer remember.
If someone starts shooting at you 300 yards away, and you shoot back in self defense , that's ok, but that rarely, if ever, happens.
Any bad guy that has survived through puberty will be smart enough to get close, very close, maybe when you are distracted with some chore/fieldwork and point a gun at you, asking you to calm down and walk into the house.
No way can you know what a man's intentions are 200 yards away, unless he starts shooting at you like an idiot. And if he wants you dead that bad, he will get close enough and make sure that that one shot is the last thing you hear on this planet.
As I said, dogs are the best alarm on the field, though those too can be eliminated, as it happened to my friend. A shame by the way, they were nice dogs.
But if your idea of a self defense plan is shooting anyone that happens to be within your 200 yard range, do as you wish. You will not have to worry much about survival, State penitentiary will provide all you need.
It is one thing to go to war, and it is another, completely different, to live your life in a SHTF situation. When you deploy in a war zone, you set yourself mentally to do a job, when the job is done, you return home, you turn the mental combat switch off.
You cannot live your entire life as if you where in combat, it's impossible.
I'm as alert as I can be, all day long, and all night. Thanks to that I kept my family and myself safe, while everyone else I know has at least been involved in one or more violent crimes. I'm so winded up that the slightest sound will make jump out of bed at night and have my pistol ready even before I'm conscious of what I'm doing.
My house is the only one in the block that has not been broken into, my wife and son are safe, safer than all the other stupid sheep that blame God for whatever happens to them, and do nothing to prevent it themselves.
But still, you have to live your life, go to work, go to the supermarket... live a life! do everyday stuff.
The stress of living that way will be the end of you, I'm 26 years old and already have problems related to high stress like high blood pressure, migraines, insomnia, etc. NSA
"You make it sound like carrying a pistol on your person is a fairly common occurance (at least now)."
My mistake, it is not common, at least for descent working people. There are parts were criminals carry their guns openly, sticking out of their joggings and no one does anything about it. No one dares mess with them, these are neighborhoods were police don't dare to enter.
Carrying a handgun, ready for use (loaded and on your person) is illegal, unless you have a permit that is almost impossible to get. You need to own a large company, and justify carrying the gun because you transport large amounts of money (several thousands of USD on daily basis). Carrying a gun for self defense is not a reason for a carry permit, only the protection of money. It's ridiculous, isn't it?
Still, owning handguns is not that complicated, once you get a gun user card, but a ccw permit card is out of the question.
Some gun users still choose to carry guns, even though they don't have a carry permit. This is not allowed and you might loose your gun user card for this.
Carrying a gun, bought in the black market, and without even having a gun user card, will take you straight to jail.
On the issue of cops and guns, some may understand that you are carrying for self defense, because you are in a very dangerous area, and if you have you gun user card that shows that you bought that gun legally, he MAY be sensitive and let you go, or not.
More than likely, he will ask for a small "tip", for his troubles. It's a matter of luck actually. You have to consider all this, and decide if the risk of getting caught is greater than the risk of getting killed for not being able to defend yourself.
We often call unprepared people, the mass, sheep. Sheep describes them pretty well. They do as the rest of them do, don't fight for their rights, accept almost everything and so on. But what happens when "sheep" get desperate? Well, that 's what happened here.
After years of closing factories and the destruction of the national industry, extremely low wages, people got fed up. This destructive economy by Menem, our previous president, one of the most corrupt president in the history, ( he was into the bombing of the jew embassy, managed the drug market in the country, just to mention some) plus the stupidity of the following president, De la Rúa, was a formula for disaster.
One day the Minister of Economy declared that no one would be able to get more than 100 bucks a day from the ATM( correct?) nor close accounts. You could just get 100 bucks out of the bank a day. That was it.
Then came the devaluation. Before this happened 1 U$S= 1 $ Argentine peso. Suddenly this changed into 1 U$S dollar= 2 peso then 2.5 even 4 pesos. Today 1U$S= 3 Pesos.
The banks kept the people's money, including their deposits in US dollars. If you had 1000 U$S dollars in Bank Boston for example, they turned it into 1000 pesos, that equaled 333 U$S dollars. They stole 666 dollars from you!
Prices went up 200%, 300% and sometimes more. Imagine for one moment what your life would be like if today you go to your local 7-11 and everything has gone up 200%. How would you survive with your pay check?
The sheep got desperate. First, because they had been stolen by banks and wouldn't return the money to the people.(the so called "corralito" ) then because the classes with the lowest income found out that their salaries weren't high enough to buy the minimum food stuff to survive. The country marched asking for the presidents resignation. He had to leave the presidential palace in a chopper...
Banks were destroyed by people that wanted their hard earned money back. Supermarkets and other shops were looted, as well as regular houses.
This lasted for about a month, the chaos spread all over the country, concentrated in the largest cities.
I remember being at a supermarket and the mob outside, negotiating with the manager. Sometimes, they would not destroy the place if the supermarket surrendered them the goods peacefully.
Food got scarce. I mean, you could buy just a certain amount of milk or water, 4 bottles for example. And most imported goods disappeared. Electro domestics such as TV, videos, and refrigerators kept their prices in dollars, inaccessible for most people. The same happened with real estates, cars and luxury goods.
Today this all seems far away. Not because it got better, but because us humans have this damn capacity to " get used to".
How did our lives change? I cant even being to explain... everything changed!
The streets are more dangerous than ever, thanks to the general poverty.
Education suffered thanks to this as well. Kids working or stealing to survive instead of going to school.
How could I explain this to you?....
For example, tools are really expensive, since most come from abroad... remember, our national industry was sold out or destroyed.
Stuff like MRE, Emergency food bars are impossible to get. No one imports them anymore. (I paid 10 dollars for 1 MRE a guy had)
Guns and ammo are really expensive and are sold in small quantities.
Forget about buying a "case" of ammo! Forget it! I know it's hard for some of you to imagine this, but you just can't buy a " case" of anything. A large store may have 10 or 15 boxes of 308, 20 rounds each box. Small stores have 10. or less.
Only common ammo is available such as 22, 38, 357. 9mm, some 40 s&w, 12 ga 308 and a little 223, that's pretty much it. Ammo for my 357 sig is hard to get. I buy a box of it every time I find one around... and it's extremely expensive.
IF you just HAVE to buy something strange like 300 magnum or 270 (strange for us J ) there's one place you can get them from but be prepared to pay +100 dollars for 20 rounds. While we are at it, there are also few models of guns, 70 % of it is used. You can find about 4 or 5 12 ga pumps, mossberg 500, Maverick or Rem 870 in each store. Handguns are relatively plentiful, not the newest models but still there's some Beretta, Glock, Colt, S&W, Walther, Taurus, Rossi and Sig. Same goes for Mausers and bolt action rifles as well as side by side shotguns.
Semi auto rifles are hard to get. Some big gun shops have 1 FAL each. M16 are quite rare and expensive. Saw a Galil and a SKS(600 dollars) the other day, but it's not common and the red tape is HUGE. I found a good FMK3, one of the few left around, and bought it for 250 dollars, but this isn't common.
Shoes and clothes are also, expensive, even in U$S. Labor is cheep; you can have a maid and a gardener for 300 dollars. There's no "safe" job. With 20% unemployment they pay you whatever they want and if you don't like it there are 100 persons waiting to get your job. Owning a shop-business is hard. You have to consider armed robbery (some get hit 10 times a month) and still you have to pay the police for protection (from themselves) Hope it helps, at least so you can have an idea how your world would be if this happened in your country, hope you never have to experience it in the flesh...
Well, one thing I learned with all this is that people adapt, people get "used to".
And finally, people accept.
I have a hard time seeing people eat out of trash cans, that's one thing I'll never get used to. Every night entire families, wife, husband and 2 or 3 kids, little kids about 3 years old go throw trash cans in search of food.
At almost every light stop there's little bare foot kids begging, all dirty and skinny.
That's the thing that affected me most, the starving children.
One guy in another board told me he didn't care for this "bleeding Heart thing" and that "Life is rough. Get used to it." I told him that I didn't need someone that lives in San Diego, California, explain me how rough life is.
I've seen dead people, man, I once saw a guy "sew" his mouth shut with a piece of rusted wire he got out of a broom, and all that I can handle, but a 3 year old sobbing because he's starving, Im sorry, I can't.
Believe me, it's one thing to see a little kid starving in Africa, you probably saw that terrible image a million times, but now imagine that that kid speaks English, with an American accent, and you see the Hollywood sign in the background.
Both cases are terrible, but the one that looks as if he could be your son and not some kid in Africa or Croatia hits a nerve. Because "those things don't happen here". It happens to others, not in my country, not in my neck of the woods.
Sorry , Im babbling here. Back to your question:
You guys have most stuff covered, but there's some stuff I'd like to share:
1) Don't invest all your money in your country. Don't put all your eggs in the same basket, just in case economy goes to hell. Invest in a country in Europe, in Australia, whatever, I don't know, but not in the same place. I did this, but most people didn't and got screwed.
2) Keep cash. Both dollars and Euros. I know some of you just don't like the European money, but it's the only way you have to cover most bases. Here the national paper money was worth 1/3 from one day to another.
3) If you have land, have some animals. Even a few chickens and rabbits can make a huge difference and will complement your staple food.
4) Buy guns and ammo. Not 20, but a couple of fighting guns, 1 or 2 Mausers and 2 or 3 handguns. You know the kind. Get lots of 22 ammo.
5) Try to get 2 or 3 similar guns, like 2 or 3 AR, Fals, or SKS. This way you can use the same ammo and if 2 guns brake you may be able to fix 1. For example, If I were you, Id buy 3 or 4 SKS and 3000 rounds of ammo. If your SKS brakes, you have a spare gun that you already know how it works and are used to.
6) Spare parts are ok, but make sure you know how to replace them, a gunsmith may not be available. If not, get a similar gun as back up.
7) Don't trust the media. If you watch the news here, reporters say everything is ok, everything is fine. But then you talk to your neighbor and it turns out Mr. X got shot yesterday, the nice girl on the next block got kidnapped and raped, and today the boy next door was also kidnapped. This is the kind of conversations I have in my neighborhood, I'm not kidding.
8) Keep 6 months- a year worth of food stored if you can and have a well or at least a good supply of bottled water stored as well a 2 water purifier and a good supply of filters for them. The water network works but it's not safe. Some time ago an entire town got sick because of the contaminated tap water and lots of people died.
9) B-proof vest. I'd sell my left testicle for one these days. I never believed I would ever need one and now here I am. Get one of those that can go under the regular clothes.
10) Keep your passport and cash ready. If you can afford it, the best thing to do in such a country is getting the hell out of it! Maybe you have family somewhere else, keep in touch just in case. I did with my family in Spain and I going there as soon as I can.
"What about essential services like power and water?"
Power get cut some times but not for long , a couple of flash lights and your ok. Water is still working but you cant drink. Most of the water supply in Bs As shouldn't be drank, I used to drink it but this year the water was just too dirty. Even if we still pay our water bill and the gov. says it's ok for drinking this water wouldn't be accepted in the US. Here the water companies can bribe their way out of it.
"Were they always delivered reliably or were there blackouts etc...."
There were blackouts, I remember once most of the country was without light for about a day. Buenos Aires was without light for 4 days.
"What about medical care, how do people get treated for injuries or illneses? " If you have private health you are ok, but if you don't have the money for it you might as well put a bullet in your head. Free hospitalization, forget it, you'll die because of an infection. They don't have supplies, even sterile needles are hard to get in a public hospital. No way, if you don't have private health you have a foot in your grave already.
"Is the crime mostly simple street crime or is it highly organized with gangs and cartels/mafia style? Both. The police handles most organixed crime. The governors are the head of the organizations on each Province.The worst part is the kidnapping. About 2 or 3 persons get kidnapped each day in my neighborhood.
For example, I keep 10 pesos (about 3 dollars) bills to give to the police if I get stopped when driving. You HAVE to bride the cop that stops you, the last time I got stopped by a couple of cops I played a little hard to get (pretended I didn't understand he wanted money) the cop got really nervous so I just have him the money and he calmed down, he let me go.
The cops are involved in most illegal activities like drugs, prostitution, robbery and kidnaps.
That's why I keep the high power Hirtemberg 9mm stuff and AP 308, because there a big chance the "perp" might be wearing a "Policia Federal" body armor vest.
They ask for donations. That's right, the government asks the people for donations instead of doing things themselves.
And the best part is that once they get all the donations.(mostly food, milk, blankets and such) The damn Governors SELL the donated goods to the poor. No , you cant imagine the kind of corruption we have here.
The problem is that nothing is being done to get us on the right track, because a small group of people wants this country as poor as possible to take advantage of it.
Imagine having to pay your employees 1 dollar a day and selling the soya, meat and other agricultural products you get at international prices.
The people that own small portions of land have it worse than those professionals that are in the city. This is because they are destroyed by the larger land owners such as Benetton and other large international corporations.
But you are right, they can at least live out of their land. The poor people in cities have to collect cardboard or look in the garbage.
You are also right about people now fixing things instead of buying new ones. Seems as handyman will always find a way to survive.
The only things that can be imported are the cheep ones from China, or Brasil. Other products like large plasma TVs and such are rare and only accessible to the extremely wealthy.
For example, I had to buy a electric shaver because the Gillette blade are too expensive. No way am I going to spend 6 dollars for a pack of Gillette Sensor.
And so you adapt to whats available and what you can afford.
people that live in the Patagonia are a little better off than those that live in other Provinces. The rich people do well everywhere (except for the kidnaps and murder) but the poor people that live in the south have better land and can at least grow and raise a few animals. The central part of Argentina, and the North has been severely punished. Tucumán is a disaster, as well as Chaco, Entre Rios, and others, the amount of children that starve to death is astonishing.
The Chileans returned to Chile long ago, Chile is MUCH better off. Argentineans are going to Chile looking for job.
Buenos Aires is also a disaster area. Even the "nice part" of Buenos Aires, the Capital where the nice Hotels are, the part that tourists see, turns into a complete nightmare after 10 pm.
During the day tourist from around the world shop and sight see, ignoring the beggars. But at night the picture is Mad Max 4:
All the "cartoneros", people that pull carts in search of cardboard and paper to sell, flood the city. And I mean flood: 20 to 30 persons per block.
They pull the carts themselves, followed by the wife and a few children. They pick the paper out of the trashcans and eat whatever they scavenge.
The government considers them "employees" God only knows why, since they have no salaries, just the paper they get. This is just another "trick" the government has to reduce the unemployment %, considering these poor people that eat out of trashcans employed. (Our politicians have no shame) As I write this I hear shoots being fired outside and people screaming.. jjejee, I never would have think that I would be writing this today, 3 years ago, but now it's almost normal.
Gold & silver kept their true value, as they always do. I didn't have gold, but had dollars and euros. Now that you mention it gold might be a good way to go for the Americans. Dollars, Euros and gold and you'd have most bases covered.
You can't barter gold at a supermarket for example, you would loose too much money. But you can wait until things settle and change for dollars/Euros or other stable paper money and save yourself from devaluation. Or get out of dodge with your gold and deposit it in a safe country.
The point is that gold never looses it's value because, unlike paper money, it holds value itself. Foreign accounts could not be touched since they are protected by other countries law, not affected by national executive orders.
Imagine a federal agent calling a Suzie Bank.
"Hi, I'd like to seize Mr. Smiths accounts"
"Why?"
"Well, because I want to steal his money"...
Wouldn't work.

A LIST OF THINGS THAT "If you had it to do over again" YOU WOULD GET.
Nomad came up with this one. It's a good idea because it may help some of you from making the same mistakes I did. There are things you don't think about until you need them, and then it's too late.
OK, If I had to do all this from scratch? Say, for example, if I had a 2 year warning, fairy godmother appears one night , all dressed in blue waving a magic wand, saying " Your country will go down the sewer in 2 years, consider yourself warned dear"
There are several things I would have done differently, and things I would have bought: Food: I'll get to the food issue soon enough, but you can never have too much canned, or other long shelf life food. This was probably one of my greatest mistakes, I overlooked the food problem.
I was talking to my wife today while driving, asked her the same question Nomad asked me "what would you do if you could go back in time, before the 2001 crisis".
My wife, though smart, isn't much into preparedness, but she answered "I'd buy food" in a heartbeat.
"Don't you remember that you could only buy one small bottle of oil at a time, same with sugar, flour and milk. Don't you remember all those empty shelves at the supermarket.?"
Definitely, more food, specially food that lasts for a few years.
CAR
I would have bought a 4x4, even though I live in the city. A 4x4 allows you to dive over the sidewalk or through wasteland, away from roadblocks or riots. I've see those that have 4x4s simply go off road, climb over a boulevard and leave while the rest of us poor car owners have to stay.
A 4x4 truck also has more mass and power in case that someone tries to cut you off or rams you with the car. It's less likely to stop running if you hit someone or several people (in a riot situation) since it's prepared for cross country use and the engine is much more protected.
Fuel containers: Not only jerry cans, but those big metal containers, that hook up like small "u-hauls" ? I'm not sure about their capacity, maybe they can hold one or two barrels of gas. I saw them at construction sites, and they were not that expensive if bought used, before the 2001 crisis. Now , I don't know. Haven't seen them for a while.
A generator: These are imported and very expensive for us. I think that they are now making them here, but I'm not sure about the quality.
A nice TV and DVD player: I know what you are thinking "this guy has gone ... "nuts" " Please, let me explain.
Going out for dinner or to the movies is not only dangerous but also expensive. You WILL find much better use for that money if SHTF.
There are places in Buenos Aires where you can go out for dinner, movies, or theater shows and have a good time, safely. They either have their own security or arrange with the police for added security. These are the kinds of places you are likely to visit if you ever come to Argentina, places were tourists can move around, relatively safe (there are always exceptions, of course). But these places are either for tourists or for the extremely wealthy. I have a good socio-economical level, better than 96% of the population at least, yet I cant afford to spend that amount of money every weekend or even two weekends a month. Going out for a walk is a possibility, and we do go out for a walk every now and then, but lets just say that the view isn't that good, and you can only walk about 6 blocks in the same direction before you get out of the are which is guarded by private security, after that you are on "you are on your own" land. You CAN go for a walk (just like millions that live in Somalia or Afghanistan go for a walk as well) millions of citizens do, but I'd rather not risk it.
Just the day before yesterday, a young woman was waiting at the bus stop in my neighborhood, holding her 6 month old daughter. A cop that was chasing a bad guy opened fire with his High Power, with no regard to bystanders as they always do. The 9mm FMJ (JHP are not allowed for the average police) went right through the baby's buttocks and through the mother. Miraculously, the bullet didn't hit any of the baby's internal organs and the mother also survived after a few days at the hospital. Was that just luck? Maybe, I prefer to think that God does work in mysterious ways.
We have a lot of cases like this, were innocent people get shot by the police, and the stupid "no JHP" rule makes it worse, since 124 gr. FMJ 9mm will penetrate walls, windows, even bad guys and end up injuring or killing innocent people.
So, back to the TV. Good places are too expensive, and just going out for a walk at night with your wife/girlfriend is out of the question. All of a sudden popcorn , pizza and a movie sounds like a good plan.
I'm not saying that you should spend all day in front of the screen like a zombie. Reading is nice, I love reading myself, but once the SHTF, going out with a date at night wont be that easy, nor will it be that cheap. You will end up paying for that added security the shop/bar/theater owner hired, the higher price of gas and food, while a DVD copy can be found everywhere, and costs only a couple of bucks.
After the SHTF there will be a lot of "why don't we watch a movie" nights. Like it or not TV is cheap, safe entertainment. A play station or xbox is also nice to have.
Even if the country collapses, there will always be a guy with a DVD writer making copies. Just something to think about if you like movies.
BOOKS
Oh, almost forgot. If you like reading a lot, buy books now, even if you wont read them for some time. If your economy crashes, paper will become a source of income for many. We have thousands of scavengers collecting cardboard and paper all day long, specially at night when people take out the trash. As a result, books are not cheap, because they have a value of its own in the form of paper.
Also, consider that books are heavy, making transportation expensive and many are printed abroad. Just as an example: I returned from visiting my parents in Spain with three suitcases. ONE suit case was entirely full of books. Books cost about 80%-200% more than what they cost in USA or Spain.
Guns & ammo: I always liked guns, so I always had weapons. But I didn't have an adequate survival battery. If you don't have a good survival selection of weapons, buy them now, or as soon as your budget allows. Make it one of your priorities, just after food, water and shelter.
There are several posts on the ideal choice of weapons. Get at least a service size pistol and a military semi auto rifle and a 22 handgun/rifle. (try to get both if you can, they are not that expensive).
A bolt rifle (preferably in the same caliber as the semi) a pump 12 ga shotgun and a sub rifle, like a SMG or pistol caliber semi auto carbine (same caliber as pistol) would complete the package.
I forgot to buy a 22 pistol until after 2001, and ended up paying for a Norinco 22 pistol the same price I would have paid for a Ruger pistol before the crisis.
My advice is: See what you use regularly and what you expect to need after TSHTF. Of those goods, see where they are made. If they are made outside your country, they will either increase in price of stop importation entirely after TSHTF.
In my case, one good example (of many, many others) is Gillette disposable blades. They are made in USA, and right now they cost a fortune. But as I said before, check what is being imported. No point in buying cases of Cubans for trade after TSHTF if you live in Cuba, right?
I wouldn't think of these items as trade goods, but as "gifts" to buy favors, build up relationships with police, government officials, doctors, people you might need favors from.
Stuff, like liquor/wine, a nice pen, perfume, makeup and other "free shop" kind of items can go a long way when you need some strings pulled, or a "friend" within certain circles. And it's not only the item, sweet talking also must be applied.
For example, you need renew your drivers license after the XXXX crisis. The problem is that the office is low on personal (they had to let go 25% and 50% are on strike) so you'll have to wait 4 months until you get an appointment.
You approach the information desk were you find Betty. Now, Betty hasn't had a date since the age of 10, and she weights as much a healthy manatee (though she's not THAT pretty) you kindly ask her to please help you fill the paperwork, and though she's as cold as a Popsicle, you keep calling her by her first name and when you leave she smiles and says good bye.
The next day you drop by and give Betty a Revlon lipstick for "helping" you fill the form, which had difficult questions like "name?"" Age?". It cost you about 4 bucks before the crisis but, since it's made in France, it went up to 20 dollars and then, 2 months ago, they no longer imported it. Revlon saw that they no longer had a market for their 4 Euro lipstick, which now costs Americans 20 dollars and the segment that used to buy it is spending that money in other items like food, so their marketing experts told them that the 4 Euro lipstick is no longer profitable in USA.
Betty used to love that particular lipstick, she thought it made her look like Cindy Crawford (poor Betty) but 20 dollars was more than she could spare in her good looks, and when she finally decided to drop the 40 pounds of M&M's she ate a month in favor for the lipstick, the girl at the drugstore told her that the item is no longer imported into the USA.
Her face lights up when she sees your present, and tells you that you shouldn't have bothered, and she asks how did it go with your license. You tell here that you actually have a problem, it seems that it takes 4 months to renew, and you ask her if , well, maybe she can do something about it... you get the picture.
In other occasions people will let you know that they want a plain and simple "bribe", and there 50 bucks or 100 bucks according to the situation will get the job done. I've used "gifts" ( a perfume) to get my passport faster, saved a few months, and I've used bribes every single time the police stopped me for "inspection". I know this does not apply to 1st world countries were most officers are honest self sacrificed people, I mean no insult to the law enforcement community on this forum, but please understand that it does apply to 3rd world countries, and I'm not getting shot by an angry cop over 10 or 20 pesos, let them have their bribe. I tried it once and I will never try it again. A cop stopped me and started BS me. I told him "ok officer, guess you'll have to write me a ticket, I understand". He didn't want to write a ticket , he wanted money and things got ugly. I'm never doing anything that stupid again.
FOOD
A delicate issue. Even though not in the same way, it does affect us all. Keep in mind that if TSHTF, prepared or not, food will always be in your thoughts. If you don't have it you'll do ANYTHING to get it, and if you are prepared you'll worry about being able to get more for the future. Once you see food prices go up between 200% and 300%, or simply see it missing, you'll realize what a valuable commodity food really is.
To those that think that food will never be a problem in USA:
Come visit my country, even though there are desert areas up north, most of the country is fertile "Pampa".
Just after WWII Argentina practically fed Europe. Argentina was know in Europe as " the world's granary". Cattle and wheat was enough to feed our own country and another continent.
So, what happened? Why are there so many that have little or no food and end up eating out of dumpsters?
I mean, the land is still there, isn't it?
Well, the country is the same country that used to be called the "world's granary" but some things changed. Several big, multinational corporations, such as Benetton, bought hundreds of thousands of acres of natural resources. I don't know the exact number, but I do remember that the media started talking about the integrity of the sovereignty of the country being at risk because of these massive purchases of land, so you can imagine how many acres were bought. Mysteriously, the media suddenly dropped the subject.
Another important factor is that now, with our new economy, it's not good business to sell Argentine food to Argentina. Why sell a kg of meat to the local market for 17 pesos when they can now sell it to Spain for 17 Euros when 1 Euro = 3,5 pesos?
All this combined with high unemployment, salaries that are not enough to buy the minimal amount of calories for a typical family, and the high prices resulted in a country that slowly started to suffer hunger.
Again, I can pin point the exact moment when the entire country realized what was happening. After the 2001 crisis things had been bad, but people in Buenos Aires, the capital city and the richest province, didn't realize how bad things actually where in the other provinces.
This was until teachers noted that kids had problems with education. You see, they noticed that they had problems to concentrate, that they fell asleep, and that they found it difficult to resolve mathematical equations.
They later found out that this was due to mal nutrition, kids where not receiving the minimum amount of nutrients for a healthy working body.
The braking point was when a reporter interviewed a little girl about 8 or 9 years old. The reporter lady asked her what she wanted to be when she grew up, the usual kiddy questions.
The girl, crying, said that she didn't want to be anything, that she didn't care.
The lady asked her why was she crying.
She said that she cried because she was hungry, that she had nothing to eat for days, and it was then that I noticed how skinny the little girl actually was.
Seeing children starve is terrible, I guess we all saw those images f the starving kids in Africa. But when you see them speak your same language, with your same accent, in your own country, it hits a nerve.
People talked about it for weeks, and they interviewed pediatricians that confirmed that the number of children dieing because of hunger had increased drastically in the last few months.
So whatever happens, let it be a hurricane, economical collapse, earthquake or meteor hitting earth, food and water always come first.
Ideally you already have a food plan and have a year worth of food in your basement... You don't? hmm... neither did I when the SHTF and lets just say that I had my manhood up my throat all the time, fearing that supermarkets would definitely close and me and my family would be left without food. If you don't have your food needs sorted out already, just do what I did, start buying a little extra every time you go to the supermarket. The points you want to look for your storage food are, in order of importance:
1) No need of fridge. 2) High nutritious value/volume 3) Long shelf live, between 1-5 years. 4) That they don't need water 5) That they don't need cooking
This will usually take you to canned meats, canned tuna, canned vegetables, dried pasta, dehydrated soups, chocolate, milk powder, marmalades, soups, rice and dried beans.
Canned food is excellent when it comes to long shelf life. Most of the time they are already hydrated, so they don't need water, and you can eat them out of the can. Just watch out not to dent the can, if this happens air may get inside and ruin it. If you have a dent or bump in a can, consume it fast. Also remember that once the can is opened, you have to remove the food from the can.
My favorite canned food is tuna. It lasts forever, it's full of proteins, and no matter how often I eat it, it always tastes good. Besides you can combine it with frizzed vegetables or rice.
Canned fruits and vegetables are also good, but they have much less vitamins than the fresh ones, and you loose most of it unless you drink the liquid they come in.
Dried pasta may need a lot of water to cook, but its one of the best ways to store carbs in convenient to use form. Flower or wheat can also be stored in large quantities and are nutritious, but they require more preparation to consume.
We've become quite independent from the fridge, and only use it to keep frozen our fresh pasta (ñoqui) pizza and frizzed vegetables.
We practically freeze everything, because it lasts longer, practically indefinitely, and because if the lights go out a large mass of frizzed food will last for hours, even a day or two. The more mass of food you have frizzed to longer it will hold.
The survivalist, especially the urban one, should try to rely as little as possible on the fridge. That's why canned food and freeze dried food is your best friend.
Yet, anyone who has been for a while with no fresh fruit knows that after some time the skin starts to suffer. Sores will appear after a while, especially on delicate skin like the lips and mouth. Once you start eating fresh fruits and vegetables again they go away.
This happened to me once, spent to much time without fresh vegetables and my mouth was a mess, full of sores. After a week of eating fresh vegetables regularly the symptoms disappeared. That's why you should try to have some fresh food to supplement you storage food. Not much, just 2 or 3 fruit trees on your garden and a small orchard would be fine. You don't have to feed out of this, you just need a little fresh veggies or fruit every once in a while.
On the news right now while I write this: We had elections last Sunday, we voted senators. It seems that in one of the north provinces people where surrendering their ID documents for bags of groceries, some for water, or for 10 pesos ( 3 USD) they were later taken to warehouses were they spent the night to ensure that they voted. The next day the candidate's men took them to vote, howled inside cattle trucks, like animals. When they arrived they were given their ID documents back with the number of list they had to vote. Thugs guide them and ensure they vote who they want.
HEALTH & FITNESS
Visit you doctor NOW. Get yourself fixed. Visit the dentist and make sure your mouth is in perfect conditions. Nothing is worse than having toothache and no one available to take care of it. Remember that doctors may not be as available as they are now, in the future.
For example I got eye surgery to take care of my sight problem. Now I see perfectly without glasses. The advantage of laser eye surgery isn't limited to not needing glasses. (which can brake and would be nearly impossible to replace after TSHTF)
Even people react to you in a different way. Humans are after all instinctive animals.
Bad guys will look at you as a weaker person if you wear glasses. Maybe they don't know that at a conscious level, maybe they do, but they do react differently.
This is not me imagining stuff, it's the way things are. Old people and women are specially vulnerable. After old people and women and children, come small framed people, the smaller you are, the weaker you look, the more likely you are to be chosen as a victim by a bad guy. It sounds, cruel, and it sure is, but that's the way it works.
A young man with a well formed body, broad shoulders, muscled arms and a "don't f*** with me" face, is less likely to be a victims of small time thieves. If a professional group choses you as a target that's a completely different story, of course.
Talk to your doctor a lot. Just like "The little Prince", never stop yourself from asking a question. Adopt that as a general philosophy and you'll end up learning a little about everything. Mechanics, doctors, policemen, you can always learn something new from people with skills.
As a survivalist, and as a smart person, you should try to know a little about everything, Always be curious.
That's how I learned that I had to diversify my stock of antibiotics. A doctor told me, that the body will adapt if you always use the same, making that particular antibiotic not that effective, specially in small children, so now I keep two different kinds of antibiotics.
Working out 3 times a week, for a couple of hours will keep you in shape. I work out at home, I have a bench and some weights. Try to compliment some aerobics and weight lifting.
Working the boxing bag is good exercise, works most muscles if done right, and you'll have a much more powerful punch. Keep in mind that a bag is no replacement for a sparring partner and that the bag does not faint nor does it punch back. Still, it good exercise and your punch will be more powerful if you connect.
Running belts and bicycles are also good.
Research on the subject and make your own routine, join a gym and talk to a professional if possible. Whatever you do, the idea is to have a fit, healthy body. No use in shooting ½ MOA at 100 yards if you have a gut that hangs half way to the floor and you cant run that same distance without needing an oxygen mask.
I know, shooting is fun, and working out isn't. At least for most, but after some time you'll start to enjoy it, your stamina and morale will definitely increase, and you'll start looking forward to working out. The survivalist that spends 3 hours a week on his gun skills and no time at all on his own body is not doing things right.
Imagine if you have to run away from a riot/gunfight/attack while carrying your BOB, or fighting bare handed against someone that got you by surprise. This applies for life in general , before or after TSHTF a man has to now how to fight bare handed. You don't have to be Bruce Lee or Mike Tyson, just know how to through a decent punch, cover your face, or some kind or martial art classes. I once had a fight that got a little ugly. It happened in my mother in law's house, which proves that thing can go bad everywhere at any time. A guy my wife's sister was dating argued with me and things got physical. He had problems with the police for beating up an ex girlfriend (which he was proud of, go figure) and had spend 2 years in jail for stealing cars. My wife's sister was showing up with mysterious bruises on her body, from "falling while working out". So you could say this guy wasn't my favorite person. Anyway, he grabbed my neck by surprise, I grabbed his arm with both hands, one in his hand and the other in his elbow, and twisted it around. The leverage made him let go of my neck and a kept on twisting it forcing him around. He punched me with his other hand but the positing wasn't on his favor so it was just a glancing blow. He pushed with his back against me, so I placed my left arm around hid neck, my elbow flexed over his Adam's apple. The guy went berserk so I decided that I had to hold on until he passed out, or I would get seriously hurt. I had practiced this choking move with my friend, the one that has the farm I talked about before. He told me that after 30 seconds of choking the person passes out, and after 60 seconds, if you keep choking him, he dies.
So I placed my left arm firmly around his neck while holding my left hand firmly with my right arm, pressing as hard as I could.
The guy went nuts. He slammed me against the walls, trying to get me away from his back.
He started clawing with his fingers on my biceps, desperate. Me? I just hold my lock around his neck, mentally counting. As if by magic, after 20-25 seconds. He lost all strength and fell to his knees like a rag doll, and I let him go.
Meanwhile my wife, her sister and my mother in law were all screaming at me to stop.
Once he caught his breath he said that I was psycho, and that he was just fooling around. Not believing a word he said, I said I was sorry and we both got into the elevator, since we were leaving.
As soon as I close the elevator door, the s*** bag attacks me again. I guess he felt humiliated in front of the woman he beat up. He tried to grab me the same way I did. I knew that this was getting out of hand and I completely lost patience with this clown.
I brought my serrated Cold Steel El hombre from my pocket and placed the dull side against his arm. He got the message instantly a let go of me. Once he did this I shoved him against the elevator, my forearm pressing against his neck and the knife under the neck as well. He calmed down instantly, saying he was sorry, bla ,bla, bla.
When we got out of the elevator I told him that if he ever got close to me or my family again I would put a bullet in his head.
I never saw him again.
This guy was a thief and women beater and I had no use him. Besides these are the kind of rats that would brake into your house when you leave, or worse.
I'm ranting all over the place again. What I mean is that practicing defensive moves is useful, specially if you spar with someone that knows his thing. My friend practices Judo. He won the state championship and was left in 3rd place in the nationals final.
Practice as you would fight in real life. Getting chocked isn't nice, but you get to know what you are working with and know how effective it actually is.
Being in shape will also make you less prone to diseases, such as high pressure, heart problems, and will boost your immune system in general.
Knowing first aid procedures is always helpful. I'll take the red cross course this summer. Keep a first aid kit and any other special medicine you may need. If you take drugs regularly try to have at least a year's worth of the stuff.
Medicines are hard to get and expensive, many are made in other countries and if SHTF they might not be available. My father in law has Parkinson and needs a special medicine that is no longer imported. He asks friends that travel to get it for him.
I stock pile as much medicines as I can. Apart from the regular 1st aid kit stuff you usually have at home, I concentrate on Ibuprofen and antibiotics, both for children and adults.
Antibiotics are precious here, with all the viruses that are floating around. Lung infections are particularly dangerous.
Also remember that keeping a clean, ventilated house goes a long way when it comes to preventing diseases. This is hard when the city is full of filth and there are cockroaches and rats everywhere but it can be done.
My neighborhood isn't that bad, there are places that are much, much worse, where people literally sleep and eat with rats. Cockroaches are a problem, but I keep them somewhat controlled with that poison that comes in syringes and you place around the house.
That reminds me, stock up on rat and cockroach poison. Services are bad in general, and the garbage collectors are no exception.
Once, they went on strike for about a week (though there are worst places where they go months without collecting) and you could see rats running around eh piles of garbage that people threw on the street's boulevard.
This is not healthy, of course. And helps spread diseases all over the city, so keep that in mind as well.
http://www.silverbearcafe.com/private/10.08/tshtf4.html

Sunday, November 9, 2008
Obama, Gun Control and the Cache
Obama's "
gun policy" can be found on his web site which states; “As president, Barack Obama would repeal the Tiahrt Amendment, which restricts the ability of local law enforcement to access important gun trace information, and give police officers across the nation the tools they need to solve gun crimes and fight the illegal arms trade. Obama and Biden also favor commonsense measures that respect the Second Amendment rights of gun owners, while keeping guns away from children and from criminals who shouldn't have them. They support closing the gun show loophole and making guns in this country childproof. They also support making the expired federal Assault Weapons Ban permanent; as such weapons belong on foreign battlefields and not on our streets.”Get all the guns, ammo and full capacity magazines you can afford now while you still can. Prices are already going up and in some cases are double what they were only a month ago. Several cache tubes loaded with guns, ammunition and magazines hidden around your area is good insurance against eventual confiscation by Obama's National Security Force.Weapons obtained through private sales are best because you want to avoid the usual paper trail that comes with purchasing a firearm from a gun shop. Flea markets and gun shows are the first places to look. If you can’t find what you want here, then putting an ad in a local newspaper or better yet one from another area stating that you are a collector interested purchasing firearms for top dollar, will bring in plenty of offers from people needing extra cash.Sections of 4", 6" or 8" SDR (Sanitary, Drain, Refuse) pipe will make excellent cache tubes. This type of tubing isn't cheap but is often left lying around at construction sites, ready to be "liberated". Be sure to use tubing with heavy wall thickness, at least 3/8". Cut the tubing to about 60" in length, this will allow enough room for all but the longest rifles. Slip-on type end caps are the best choice for sealing up the tube, avoid threaded caps or plugs as they are more expensive and tend to get fouled up with dirt, making them difficult to reopen after recovery of the cache.Using epoxy or PVC cement, permanently seal up one end with an end cap and test to be sure the seal is airtight. This is best done by placing the tube into water, sealed end down, and looking for leaks.The next step is to prepare the weapons for caching. It is important to give the weapons a thorough coating with some type of thick, rust-preventative grease. There is some divergence of opinion on just what type to use but I would suggest that just about any type of thick grease will do the job if the cache is for a short to medium duration (1-7 years). Don't be tempted to apply the grease too thickly, a thin coating will do just fine and will be MUCH easier to remove later (anyone who's experienced trying to remove grease from a cached weapon knows what I mean!).Care must be taken with telescopic or laser sights not to get grease into the optics or electronics. Keep the lens caps on and wrap the scope or laser with plastic bags and tape before applying grease to the weapon. Don't remove the scope from the weapon because it may be impossible for you to re-zero it back in later. Batteries should be removed from lasers before caching. Avoid disassembling weapons if possible as some small parts may become lost in the process. Be sure that ammunition is not exposed to contact with grease or oil as they can penetrate into the cartridge and make the ammunition useless. Seal ammunition into airtight containers or "ziplock" bags to reduce deterioration.Silica gel can be added to the tube, along with the weapons, just before sealing as a further rust-preventative measure. This step is not really necessary unless a very long-term cache is considered.The tube is now sealed up with the other end cap. This can be done by either applying grease to the inside walls of the end cap and sliding it into place or by permanently cementing the end cap on. The cap should be cemented if a very long term (10-30 years) cache is being considered or a very hostile environment, such as underwater or in a swamp, is chosen for the cache.You are now ready to choose a location to place the cache. A soil auger will be necessary if you intend to bury your cache tube underground. A manual soil auger is the best way to dig a vertical hole for the cache tube. Soil augers are used to dig fence post holes and are sold in 6"- 12" models. Soil augers are connected to a turning handle on top with a length of 3/4" pipe. The device will dig down to a depth of about four feet. At this depth, you will have to add a three foot extension to the pipe in order to dig down deep enough to bury a 60" tube one foot underground.Don't even consider burying your cache horizontally, it presents too large a target for metal detectors. When buried underground, a cache tube will be nearly impossible to remove as the soil settles in around it. For this reason be sure that the permanently sealed end of the tube is place down into the hole. In this way you can access, remove or replace weapons in the tube without removing it from the ground.Be sure to place your cache at quite a distance from your residence or retreat. At 100 feet distance any searchers must cover 31,400 square feet in order to conduct a thorough search, not a difficult task with modern metal detectors. At 200 feet the area becomes 125,600 square feet, still not an insurmountable task with the latest equipment and a dedicated team.Move out to 1000 feet and the area becomes 3.14 million square feet… almost 71 acres!! If the survivor was to scatter old nuts, bolts, nails and other pieces of scrap metal throughout this area, even a very dedicated team with unlimited time and monetary resources would soon tire of false readings and move on to an easier case. A great place to hide a cache is right in the middle of a little-used rural dirt road. This way you can get to your cache quickly and easily while still having it located a great distance from your residence. In this case be sure to watch for any upcoming roadwork in the area as some construction worker may turn up your cache.
http://thesurvivalistblog.blogspot.com/2008/11/obama-gun-control-and-cache.html

Harbanger of things to come here?
Kuwaiti court orders stock exchange closed
By Diana Elias, Associated Press Writer
KUWAIT CITY — A Kuwaiti court on Thursday ordered the temporary closure of the country's plummeting stock exchange, and the order went into effect within an hour.
The ruling by the Administrative Court in Kuwait City stemmed from a lawsuit filed by attorney Adel al-Abdul Hadi on behalf of two stock brokers concerned about the steep falls in the Kuwait Stock Exchange — the Gulf Arab region's second largest bourse — amid fallout from the global financial crisis.
The court's order was to take effect immediately and continue until the next court hearing Nov. 17. Within an hour, the state-owned Kuwait Television said all trading had stopped.
The decision came after traders staged demonstrations in front of the bourse, went to court and even tried to meet with the Gulf country's ruler on the issue.
"We are elated ... this is a historic ruling," said the lawyer, al-Abdul Hadi.
Kuwait's exchange has been falling sharply for months, though its losses have been smaller than those in other Gulf markets, including Dubai's Financial Market and Saudi Arabia's exchange.
On Wednesday, the market fell below the 9,000 point mark for the first time in three years.
This small Gulf state has formed a task force headed by Kuwait Central Bank governor Sheik Salem Abdul-Aziz Al Sabah to deal with the effects of the crisis on economy, which is overwhelmingly dependent on oil revenue.
Al Sabah has moved to guarantee all bank deposits and to set up a government portfolio to buy investment companies' assets — a move that followed a halt in trading of Gulf Bank shares last month after some investors refused to cover losses stemming from derivatives deals.

http://www.usatoday.com/money/world/2008-11-13-kuwait-market-closes_N.htm

Friday, November 14, 2008

Eeyore's News and View

Another article about Uncle Sam not being able to borrrow kind of goes with the post yesterday

Uncle Sam's Credit Line Running Out?
By RANDALL W. FORSYTH

The yield curve and credit-default swaps tell the same story: The U.S. can't borrow trillions without paying a price.
WHAT ONCE WAS UNTHINKABLE has come to pass this year: massive bailouts by the Treasury and the Federal Reserve, with the extension of billions of the taxpayers' and the central bank's credit in so many new and untested schemes that you can't tell your acronyms or abbreviations without a scorecard.
Even more unbelievable is that some of the recipients of staggering sums are coming back for a second round. Or that the queue of petitioners grows by the day.
But what happens if the requests begin to strain the credit line of the world's most creditworthy borrower, the U.S. government itself? Unthinkable?
American International Group (ticker: AIG), which originally had to borrow what was a stunning $85 billion from the Fed to keep it from cratering in September, upped the total Sunday to $150 billion.
Monday,
Fannie Mae (FNM) reported a $29 billion third-quarter loss, far in excess of forecasts, raising the specter that the mortgage giant may need more money after the Treasury pledged to inject $100 billion in preferred stock financing in September.
Meanwhile,
American Express (AXP) received Fed approval to convert to a bank holding company, joining the likes of Morgan Stanley (MS) and Goldman Sachs (GS), that have a direct pipeline to borrow from the Fed or the Treasury's TARP, the $700 billion Troubled Asset Relief Program.
And, of course, Detroit is looking for a credit line from Washington.
General Motors (GM) Friday warned it could run out of cash next year without a government loan. GM plunged another 23% Monday, to 3.36, as several analysts helpfully recommended selling shares of the beleaguered auto maker that already had lost more than 85% of their value.
Visiting the White House Monday, President-elect Obama pressed President Bush to support emergency aid for GM and other auto makers. The prospect for federal aid for GM ironically weighed on its shares as one bearish analyst said the price of the bailout could be a wipeout of common holders.
Be that as it may, it's all adding up. If the late Sen. Everett Dirksen were around today, he might comment that a trillion here, a trillion there and pretty soon you're talking about real money.
Trillions are no hyperbole. The Treasury is set to borrow $550 billion in the current quarter alone and $368 billion in the first quarter of 2009. "Near-term pressures on Treasury finances are much more intense than we had thought," Goldman Sachs economists commented when the government announced its borrowing projections last week.
It may finally be catching up with Uncle Sam. That's what the yield curve may be whispering. But some economists are too deaf, or dumb, to get it.
The yield curve simply is the graph of Treasury yields of increasing maturities, starting from one-month bills to 30-year bonds. The slope of the line typically is ascending -- positive in math terms -- because investors would want more to tie up their money for longer periods, all else being equal. Which it never is.
If they expect yields to rise in the future, they'll want a bigger premium to commit to longer maturities. Otherwise, they'd rather stay short and wait for more generous yields later on. Conversely, if they think rates will fall, investors will want to lock in today's yields for a longer period.
The Treasury yield curve -- from two to 10 years, which is how the bond market tracks it -- has rarely been steeper. The spread is up to 250 basis points (2.5 percentage points, a level matched only in the past quarter century in 2002 and 1992, at the trough of economic cycles.
Based on a simplistic reading of that history and the Cliff Notes version of theory, one economist whose main area of expertise is to get quoted by reporters even less knowledgeable than he, asserts such a steep yield curve typically reflects investors' anticipation of economic recovery. Never mind that the yield curve has steepened as the economy has worsened and prospects for recovery have diminished. Like the Bourbons, the French royal family up to the Revolution, he learns nothing and forgets nothing.
As with so much other things, something else is happening this year.
The steepening of the Treasury yield curve has been accompanied by an increase in the cost of insuring against default by the U.S. Treasury. It may come as a shock, but there are credit-default swaps on the U.S. government and they have become more expensive -- in tandem with an increase in the spread between two- and 10-year notes.
This link has been brought to light by Tim Backshall, the chief analyst of Credit Derivatives Research. The attraction of investors to the short end of the Treasury market is "juxtaposed with the massive oversupply and inflationary expectations of the longer end," he writes.
Backshall is not alone in this dire assessment. Scott Minerd, the chief investment officer for fixed income at Guggenheim Partners, a Los Angeles money manager, estimates that total Treasury borrowing for fiscal 2009 will total $1.5 trillion-$2 trillion. That was based on $700 billion for TARP, a $500 billion-$750 billion "cyclical deficit," an additional $500 billion stimulus program and some uncertain amount for the Federal Deposit Insurance Corp.
Minerd doubts that private savings in the U.S. and foreign purchases of Treasury debt will be sufficient to meet those government cash requirements. That leaves the Fed to take up the slack; that is, monetization of the debt.
However it comes about, Backshall's charts of the yield curve and the spread on U.S. Treasury CDS paint a dramatic picture. Both the yield spread and the cost of insuring debt moved up sharply together starting in September.
Let's recall what happened that month: the Fannie Mae-Freddie Mac bailouts, the AIG bailout and the Lehman Brothers failure. The two lines continued their parallel ascent with the announcement and ultimate passage of the TARP last month. And evidence mounted of an accelerating slide in growth.
Cutting through the technical jargon, the yield curve and the credit-default swaps market both indicate the markets are exacting a greater cost to lend to Uncle Sam. And it's not because of anticipated recovery, which would reduce, not increase, the cost of insuring Treasury debt against default.
All of which suggests America's credit line has its limits.
At the beginning of the Clinton administration in the early 1990s, adviser James Carville was stunned at the power the bond market had over the government. If he came back, Carville said he would want to come back as the bond market so he could scare everybody.
President-elect Obama may come to think Clinton had it easy by comparison.

http://online.barrons.com/article/SB122633310980913759.html

Extreme Green: Living Off the Grid
Living "off the grid" is usually the choice of the hardened survivalist, the mountain man and perhaps the odd fugitive running from bounty hunters. But more and more Americans are now opting to disconnect from the grid — i.e., government, electric and other utility services — which delivers increasingly expensive fossil-fuel-based power and is, as millions in the Northeast learned during the 2003 blackout, anything but infallible. In 2006, Home Power magazine estimated that more than 180,000 U.S. homes were supplying their own power. "Some people want to minimize their impact on the environment," says Dave Black, a disaster-response consultant and expert in off-the-grid living. "Some people want to ensure they have service if there's an outage. And some people just want to look green."
But going off the grid isn't as simple as unplugging your television. The grid isn't just electricity but water, heat, waste management — even your cable signal. And then there's the gas that powers your car, the government-funded roads you drive on and the air in which you fly. That's where Black comes in. He has just written a book called Living Off the Grid, a practical guide to weaning yourself off the electrical milk of modern life. To Black, the benefits of going gridless aren't just about the environment — though with electricity responsible for about 40% of U.S. carbon emissions, disconnection has real green value. Black sees it more as a way to promote self-sufficiency on a national level — all the more important as the U.S. grapples with its addiction to foreign energy, a geopolitical grid it needs to disconnect from. "I'd really like to see us reduce our dependency on resources from outside the country," says Black. So how do you go gridless? Black has a few tips:
Conservation: The average American family uses 10,000 or so kilowatt-hours of electricity a year; quitting that grid cold-turkey can seem pretty daunting. That's why Black's first three words of advice are conserve, conserve, conserve. Most of us waste electricity in a hundred ways, both small (leaving our appliances plugged in and drawing a subtle charge) and large (holding on to energy-wasting appliances and lightbulbs). Reduce that waste by purchasing more-efficient appliances and tightening up insulation to avoid heat loss from your home, and you're already decreasing your dependence on the grid. "Those things will significantly reduce your bills and you'll [still] be able to lead a fairly comparable lifestyle," says Black.
Renewable Energy: As solar and wind-turbine technology improve, it will become cheaper and easier for homeowners to provide much of their own electricity. The truly dedicated off-gridder will try to use both solar and wind, as the two energy sources are complementary — when the sun isn't shining, the wind often blows and vice versa. The good news is that Congress passed an extension to the production tax credits for wind and solar power in the recent economic bailout package, which will make installing your own electrical supply cheaper going forward.
Water: Clean water out of the tap is one of the great innovations of the modern age — and something that billions of people in the rest of the world lack. But if you live on the right kind of land, you can dig your own well — as more than 17 million Americans currently do. The process is simple — dig a hole into the ground and get a pump that will pull out the water. Generally the deeper you drill, the better the water — but the cost can range from $3,000 to $15,000 depending on how far down you go. If you want to go cheaper, you can also build a cistern to collect rainwater — but you should avoid this choice if you live near heavy pollution, like a major expressway or factory.
http://www.time.com/time/health/article/0,8599,1857835,00.html

Credit Crisis Tentacles Spread to Every Sector of Finance Market
Finally there is a 100% consensus between economists, experts, journalists, and government officials that restoring interbank lending will restore the stability of the financial system and will reignite economic growth. Too bad, the consensus has gotten again all wrong. This is a pure myth and nothing can be further from the truth.
The grim reality is very different and already forgotten. The reality is that most markets for the majority of financial instruments have collapsed completely and reviving interbank lending will not resurrect any of those markets. In other words, resolving the problem of interbank lending will not help the economy in any way. It is like an air balloon that has deflated and we desperately need to reflate it again with helium, but we are told that even ordinary cold air will lift it off the ground; since the balloon is stubbornly stuck on the ground, we are told we simply need more air!
We offer little new here, but a precious history of how the tentacles of the Credit Crisis are reaching more and more segments of the financial markets. No amount of interbank lending will recover meaningfully most segments from the firm grip of those tentacles.
The Causes of the Financial Crisis We do not attempt to explain the fundamental causes of the current Credit Crisis. No doubt that in coming decades tomes will be written on the subject. Nevertheless, the basics are simple – America borrowed and spent for decades driving its savings rate to nil, while printing trillions of dollars in attempt to sustain the (unsustainable) global imbalances caused by its own profligacy and saddling the rest of the world with trillions of bad debt.
The Trigger of the Financial Crisis The trigger of the crisis can be attributed to the decreased confidence in the markets for mortgage-backed securities following the August 2007 collapse of two Bear Stearns' hedge funds that were heavily exposed to subprime mortgages. Resetting of teaser rates and adjustable-rate mortgages triggered an avalanche of defaults. Once default rates started rising, many institutional investors, both U.S. and global, began to realize that the MBS's and CDO's in their portfolios might not be worth what they initially thought. Investment banks, insurance companies, mutual funds, and hedge funds alike began recognizing losses related to their holdings of mortgage-backed securities. Confidence was shaken. Margin calls forced further liquidations of those mortgage-backed securities, but as few were standing ready to buy, prices dropped even further, invoking even more margin calls. It was a death-spiral. The resulting losses just went snowballing. As a result, the markets for those structured financial products froze up and liquidity suddenly dried up. The Credit Crisis reared its ugly head.
1. Subprime Mortgages
The first indicator signaling the Subprime Meltdown surfaced in February 2007 “when scores of mortgage originators went bust amid rising defaults and tightening lending standards” . In mid-June, a second significant sign of financial collapse became evident as two CDO-focused Bear Stearns hedge funds blew up. Those hedge funds were too big and distracted investors' attention from another smaller in proportions, but still significant bankruptcy - California based brokerage firm Brookstreet Securities. This was the early beginning of the crisis.
In the second week of July 2007, Moody's and Standard & Poor's announced downgrades on billions of bonds backed by subprime mortgages. Though the downgrades did not reveal the unsoundness of the bonds, it signaled the demise of the Ponzi mortgage investment market backed by inflated real estate.
In early August the looming Credit Crunch could already be felt. Several of Wall Street's biggest foreign customers announced enormous losses on their holdings of mortgage backed securities. Once the “teaser rates” began to reset, mortgage defaults spiked. Foreign investors realized that the bond collateral fell short of the bond principal, in banker-speak, the LTV exceeded 100%. Home equity vanished and mortgage payments shot up. Dwindling foreign lending was a sure sign of the impending crisis.
At the end of August many financial institutions began to sense the looming disaster. Calls for various government bailout schemes for homeowners were only meant to bail the lenders out. Amidst the unraveling of the subprime crisis, the Fed responded by aggressively cutting interest rates. However, tightening lending standards, widening credit spreads, and rising down payments exacerbated default rates and mounted further losses for the Leveraged Speculator Community, aka, hedge funds. A common sense of mistrust gripped the markets. Confidence evaporated, and so did liquidity. The subprime market was terminally ill – no amount of Fed cutting and liquidity injections could ever possibly revive it again! This market has been dead for more than year.
2. Jumbo Mortgages
With the meltdown of subprime mortgages, the tentacles of the Credit Crunch began to take firm hold of other sectors of the financial system. The next victim was the market for jumbo mortgages – mortgages of high denominations, technically above $417,000 at the time. Further tightening of lending standards and more realistic perceptions of the underlying risk of those mortgages basically froze the market for Jumbo MBS. The major force behind the inflating California and Florida real estate bubbles was inanimate. Now these markets were set for a spectacular bust; the government's attempt to resurrect the Jumbo market (by raising the limit to $730,000) miserably failed. This market has been comatose for well over a year and jumbo rates remain stubbornly high. No amount of liquidity or interbank lending will revive the Jumbo market any time soon!
3. Home Equity loans
With dying subprime and jumbo markets and tightening mortgage credit, something that for decades was believed impossible, suddenly became inevitable -- real estate prices began to fall. As a result, the tentacles of the credit crisis snatched another victim -- Home Equity Loans and Home Equity Lines of Credit (HELOCs). These loans, commonly referred to as “second mortgages”, allow homeowners to borrow against the value of their home equity to finance a range of expenditures, such as medical bills, home improvements, college tuitions, and well-deserved vacations. The market quickly degenerated with rapidly deteriorating LTV ratios and skyrocketing number of “underwater” mortgages. Consumers fell behind on those loans at the highest level in 15 years. No more refis for consumers who already extracted the last drop of equity. With real estate prices falling, there was equity no more, With equity gone, so were the home equity loans. We can safely say that home equity loans are now a thing of the past and no amount of government stimulus and interbank lending will revive this market for many years!
4. SIVs and Conduits
Structured investment vehicles (SIVs) played a crucial role in the historic expansion of credit. A brainchild of ingenious financial engineers, large investment banks created and sponsored these entities. They invested largely in ABSs and MBSs that were manufactured primarily by the same large investment banks. To finance these investments, they issued investment-grade commercial paper and structured notes to investors around the world. This scheme allowed large financial institutions to remove a major portion of their risk exposure off their balance sheets, while at the same time “consolidating” any profits that resulted from the SIV operations. To put it in simple terms, they kept the profits on the balance sheet, but kept the risk off the balance sheet. This was the ultimate game in finance – return without risk, converting junk into AAA, turning led into gold – this was the Magic of Wall Street, the Alchemy of Finance.
However, with SIVs and Conduits loaded up with subprime, it was only a matter of time before this alchemic dream would turn into an ugly nightmare. Rising defaults and falling real estate prices shook investors' confidence. A series of downgrades inflicted grave damages. Some very risk-averse investors reaped distressing losses. Many risk-averse pension funds and university endowments relied on the AAA ratings and treated the securities as higher-yielding alternatives to safe money-market instruments. Repricing of ABS and MBS resulted in major writedowns for those SIVs and magnified the losses of their leveraged investors. Yet another victim fell into the tentacles of the Credit Crisis. As Doug Noland has pointed out so well, “the collapse of structured investment vehicles has proven to be the ultimate failure of Wall Street Finance in its attempt on risk intermediation between highly risky mortgage-backed securities and perceived safe and liquid money market instruments”. Today, it is accepted that Alchemy doesn't work, and that SIVs were hoped to do just that -- convert led into gold. The reality is that no amount of interbank lending and liquidity injections will do that.
5. CDOs
Some of the most pervasive exposures of leveraged financial institutions have been related to CDOs backed by subprime debt. This was another creature of mad financial engineers that was destined to fall in the tentacles of the Credit Crisis. It was meant to pool dodgy debt that with proper slicing and dicing would magically turn into a AAA-asset; it turned led into gold.
The bulk of the colossal losses of large investment banks, brokerage firms, hedge funds, and other financial institutions have been related to write-downs of CDOs. Their demand stalled as some top-rated classes of mortgage-linked CDOs lost their entire value amid surging foreclosures. Series of CDO downgrades by credit rating agencies led to enormous losses for investors around the world. Top-rated CDO tranches were devalued in late October 2007 due to expectations of excessive future losses from jumbo mortgages, Alt-As and option ARMs. Following the collapse of the two Bear Stearns hedge funds that were heavily invested in subprime CDOs, the CDO market has suffered severe illiquidity and lack of confidence. In late January Merrill Lynch CEO John Thain asserted that “[The company is] not going to be in the CDO and structured-credit types of businesses”. Since then the market has been for all practical purposes dead. It is dead because the underlying assets (jumbo, Alt-A, option ARMs) were never creditworthy in first place. No amount of liquidity injections and interbank lending will make the underlying instruments more creditworthy than before, and therefore cannot resurrect this financial instrument.
6. Commercial Paper
The familiar notion of borrowing short and lending long has come into question since the Credit Crisis began. Thousands of financial institutions have previously met their demise as a result of a maturity gap. Most of the companies engaged in this business were issuing commercial paper backed by MBSs or CDOs. With the unfolding of the crisis, questions about the value of the underlying collateral became ever more pervasive and eroded confidence. As a result, the market for commercial paper (CP) has fallen into the tentacles of the Credit Crisis. The first to experience the difficulties were the investment banks, then the commercial banks, and later other financial institutions. The difficulties spread even to the best investment-grade industrial corporations. As of April 11, 2008 total outstanding commercial paper has contracted by 11.4%. This market is not dead, but on life support, as the Fed has directly intervened to monetize commercial paper. Indeed, this market desperately needs the life support by the Fed in order to stay alive. By monetizing CP, the Fed has become the Lender of Last Resort for major corporations.
7. Private-Label MBS
The market for private-label MBS, which has been central to the creation of easily-available cheap credit, has suffered from a severe liquidity seizure, falling into the tentacles of the Financial Crisis. By securitizing mortgage loans, Wall Street was able to provide endless amounts of credit to homebuyers and homeowners, which led to the inflation of a real estate bubble of extreme proportions. Escalating home prices, in turn, made it possible for mortgage lenders to extend even more credit to borrowers with questionable credit history, without having to worry about being repaid, On the way up, it was a well-oiled Ponzi scheme; on the way down – an unmitigated disaster. The scheme depended crucially on rising real estate prices; once the prices stagnated or began to fall, no amount of liquidity injections or interbank lending could potentially revive this market.
8. Leveraged Loans
The loan market for Private Equity and Leveraged Buyouts (LBOs) is not functioning. Those loans that finance Private Equity deals or LBOs are known as “leveraged loans”. The tentacle of the credit crisis has gripped this market too. As the real economy has suffered a serious slowdown and plunges into a recession, the rate of corporate bankruptcies has been soaring. As a result, in October 2007 some of the major banks, such as Bank of America, Citigroup and JP Morgan, had to write down $2.5 Billion in loans for LBOs. These losses prompted most of the big players to slash their LBO loans. Some estimates indicate that only the very best deal can possibly get any financing; the volume has fallen almost 10 times. With an economy in recession, no amount of liquidity injections and interbank lending can revive this market.
9. Alt-A Mortgages
The Alt-A mortgage sector has not escaped the tentacles of the credit crisis. In a manner quite similar to Subprime and Jumbo mortgages, this market has slowed to a trickle. However, with the nationalization of the GSEs, the government is attempting to revive this market by forcing the GSEs to purchase more of these mortgages. As the GSEs themselves are now “owned” and guaranteed by the Treasury, this is tantamount to the Treasury buying up Alt-A mortgages. Given that the Treasury itself is financed mostly through monetization of the Fed, the ultimate effect is that this market is supported, just like the commercial paper market, with the printing press. The economic interpretation is that of a classic government subsidy financed by an inflation tax – redistributive, inefficient, and replete with moral hazards that sets up the system for a spectacular blowup down the road.
10. Prime Mortgages
The next victim in the tentacles of the Credit Crisis became the prime mortgages. Already in deep trouble, the financial system damaged even its healthiest credit market instrument. Reacting to the defaults in subprime and Alt-A mortgages, investors were compelled to manage risk more carefully. Practically, all sorts of loans became inaccessible for any borrower. This dried the liquidity, further causing huge bankruptcies of the borrowers who cannot refinance their loans. The prime residential mortgage market has been revived with the spectacular “bankruptcy” and subsequent nationalization of the GSEs, backed directly by the Treasury and indirectly by the Fed.
11. Commercial Mortgages
The commercial mortgage market has been practically frozen for many months. As the debacle in subprime, jumbo, Alt-A, and prime mortgages has unfolded, investors turned their attention to commercial mortgages. Over time, it became clear that investing in commercial mortgages is fraught with risk. The first obvious risk was overvaluation. The second obvious risk was a decelerating economy. The evolution of the Credit Crisis introduced a well-forgotten type of risk – liquidity risk. Investors saddled with heavy losses from other mortgage instruments decided to withdraw and stay on the sidelines. This, coupled with shaken confidence was enough to choke this market. Risk premiums have skyrocketed as the perceived risks of commercial mortgages have realigned with reality. Recession has exposed the fundamental weaknesses of many projects. The private sector wants none of this market. The Credit Crisis has extended its tentacles to commercial mortgages. No amount of liquidity injections and interbank lending can revive this market; only a direct intervention by the Treasury can do the trick.
12. Auction-Rate Securities
An auction-rate security is technically a debt instrument, typically a municipal bond, with a long nominal maturity, for which the interest rate is regularly reset through an auction, usually on a weekly basis. One economic interpretation of this concept is that of a fund borrowing with low short-term interest rates and lending to long-term municipal bonds, passing on the low interest rate to the municipal borrower. The other economic interpretation is that illiquid municipal bonds are securitized and transformed into liquid securities that are regularly traded at auctions. As deleveraging tightened its vice grip on the credit market in February 2008, liquidity evaporated from the credit system and the auction-rate securities suddenly crashed out of the blue. It was another nail in the coffin of Wall Street Structured Finance and another victim in the tentacles of the Credit Crisis. This market has been dead for half a year and nothing short of extraordinary amount of liquidity coupled with government guarantees has the potential of reviving it.
13. Corporate Debt
The Credit Crisis has extended its tentacles to the corporate bond market. Credit spreads of investment-grade corporate bonds have been steadily rising and are much higher than even two months ago. Credit spreads for junk bonds have surged from 650 basis points at the end of September 2008 to 950 basis points at the beginning of November. Yes, credit is available to corporations, but the cost is becoming prohibitive. The tentacles have reached the corporate market and are beginning to strangulate it. Just like the market for auction-rate securities, this market desperately needs a torrent of liquidity to overcome the strangling tentacles. A Bloomberg story from October 31 tells the sorry tale of this market: “Corporate debt markets in the U.S. and Europe endured their worst month as the credit crisis spread beyond financial firms to industrial companies amid the prospect of a global recession. Corporate industrial bonds in October are set to post their steepest monthly loss on record, while the gaps between yields on those bonds and government debt soar by the most ever.”
14. Credit Default Swaps
The US monolines are on the verge of bankruptcy as more and more of the credit that they insure defaults. They initially encountered difficulties in the beginning of January 2008. Indices of corporate credit risk widened, showing that the tentacles of Credit Crisis have reached the corporate bond market. The price of credit protection soared.
The monolines staggered because some major insurers were downgraded as investors questioned their ability to perform. Investors' minds were suddenly preoccupied with another well-forgotten risk – counterparty risk. A vicious spiral gripped the monolines -- CDSs lost their attractiveness, resulting in less cash inflows for monolines, which in turn decreased their ability to provide adequate credit risk insurance, lowering in turn their ability to sell CDSs… And another victim fell prey into the tentacles of the Credit Crisis.
The CDS market has not collapsed completely. However, its imminent collapse will indirectly affect international finance. Inability to hedge with CDS will eventually destabilize the US financial system. Many corporate borrowers will be unable to borrow, which in turn will result in higher corporate defaults, and another vicious cycles will inevitably take hold of the financial system.
15. Letters of Credit
The tentacles of the Credit Crisis have recently taken another victim: Letters of Credit. A Bloomberg story from October 29 explains this ugly turn for the worse: the Credit Crisis spreads beyond the financial sector and into the real economy. Do you remember the good old days when Bernanke and Paulson assured us that the Credit Crisis is contained? Here is the Bloomberg story:
“Richard Burnett's lumber company had started loading wood onto ships heading for China. More was en route to the docks. It was all part of an order that would fill 100 40-foot cargo containers. Then Burnett got a call from his buyer at Shanghai VIVA Wood Products Co. The deal was dead. He told Burnett… he couldn't get a letter of credit to guarantee payment for at least six months. ‘It was like a spigot got cut off,' Burnett said… The inability of buyers in China and Vietnam to get letters of credit has cost his company as much as $4 million this year, a third of projected revenue, forcing him to lay off 15 of 35 employees, he said. Suppliers of oil, coal, grains and consumer products from Chicago to Mumbai are losing sales as the credit crisis spreads beyond financial institutions, and banks refuse financing or increase the fees for buyers.”
16. Credit Card Loans
In October 2008 another market has fallen into the tentacles of the Credit Crisis: the market for credit card loans. Credit card companies usually do not retain most of their credit card debt on their balance sheet; instead, they securitize it and sell it. The latest data from Dealogic indicates that the consumer-based securitization market has shrunk in October to $500 million from $50 billion previously. This means that the ability to securitize and sell consumer-based loans has fallen almost 100 times in one year. The implication is clear – credit card companies will be forced to cut consumers from credit card debt. This will bring the American consumer to his knees and means the end of the Consumer Economy. No wonder that in the last three months the media frequency of the word “Depression” has increased hundred-fold.
Going Forward
No amount of interbank lending and liquidity injections will revive most of the markets for various financial instruments. No amount of monetary and fiscal policy can resurrect genuine productive lending in the economy. The tentacles of the Credit Crisis have spread to every sector of the financial markets. The “Real Estate Economy” is dead; the “Financial Economy” is dead; the “Consumer Economy” is dying; and the “Service Economy” is dying. Enter the Depression Economy! Or shall we say, “Enter the Zimbabwe Economy”!?
The authors are eternally grateful to Doug Noland – in our opinion, the world's foremost Scholar of the evolving Credit Crisis.
Resources: http://www.marketoracle.co.uk/Article1401.html
http://www.marketoracle.co.uk/Article7234.html

London fundraisers linked to stoning of 13-year-oldGirl who tells Shariah court of rape is convicted, executed for 'adultery'
Posted: November 11, 20089:14 pm Eastern
LONDON – Britain's MI6 intelligence service has identified a group that raises funds with impunity in London as the organization whose militia members in Somalia imposed a death sentence on a 13-year-old rape victim, according to a report from
Joseph Farah's G2 Bulletin.
Known as the Shabaab, the ruthless militia is designated as a terrorist organization by the U.S. State Department. The group's leadership was targeted by missile strikes earlier this year.
However, MI6 has revealed that the group operates without restriction in London, funding the fierce guerrilla war against Somalia's long-time enemy, Ethiopia, which invaded Somalia last year.
Until last week, the war attracted little attention in the West. All that changed after a Shariah court in the Somalia southern town of Kismayo handed down a brutal punishment.
A 13-year-old girl, described in an intelligence report as "little more than a pretty child," was sentenced to be stoned to death by the all-male court.
It imposed the sentence on Aisha Ibrahim Duhulow after she had complained to the local Shariah court that she had been gang-raped by, among others, her cousins.
But the court found her guilty of adultery and sentenced her to death by stoning.
She was taken from the courthouse to a local sports stadium. There she was buried up to her neck in sand and then stoned in front of a 1,000-strong crowd, the number the local soccer team attracts.
http://www.worldnetdaily.com/index.php?fa=PAGE.view&pageId=80733

It is not getting any better, quickly. Time must be given so it can run it's course.

October foreclosures up 25% from a year ago, study says
NEW YORK (Reuters) — Foreclosure activity in October rose 25% from a year earlier, although filings in California fell by double-digit percentage points for the second consecutive month due to a state law slowing the foreclosure process, according to a monthly report by RealtyTrac.
Foreclosure filings — default notices, auction sales notices and bank repossessions — rose by 5% from September to 279,561 in October, according to Irvine, California-based research firm RealtyTrac.
That means one in every 452 U.S. housing units received a foreclosure filing in October, the firm said in its report released Thursday.
The California law, which requires lenders to contact homeowners and explore options to avoid foreclosure before initiating the process, took effect in early September and drove the state's foreclosure activity rates down, at a pace of 31.6% from August to September and 18% from September to October.
But in September, the California law helped drive the national foreclosure rate down, something that did not happen in October.
"Foreclosure activity in other places rose significantly enough to offset the drop in California," said RealtyTrac Senior Vice President Rick Sharga.
Years of lending to risky, or "subprime" borrowers that fueled the housing boom has created an unprecedented number of foreclosures due to the inability of many of those borrowers to pay their mortgages, particularly as interest rates reset and as plunging home values nationwide increasingly render properties worth less than the mortgage.
The numbers might also be showing the effects of the economic downturn, Sharga said. If they do not yet, they will soon.
"An economic downturn is traditionally a precursor to foreclosures, even in a normal foreclosure cycle," Sharga said. "This is not a normal foreclosure cycle by any means."
Moreover, California's law will likely not prevent most of the state's homes which are teetering on the brink of foreclosure from falling off the cliff, Sharga said.
Previous experience with similar laws in Maryland and Massachusetts attests to such laws' inability to make a material difference.
"For most homeowners, these laws just delay the inevitable," he said.
The markets that once lead the housing boom topped the foreclosure list in September.
Nevada posted the nation's highest foreclosure rate for the 22nd consecutive month in October, with one in every 74 housing units, or 14,483, receiving a foreclosure filing during the month — more than six times the national average.
Arizona registered the second-highest state foreclosure rate. Filings were reported on 17,507 Arizona properties, an increase of 35% from the previous month and 176% from October 2007.
In Florida, one of every 157 units received a filing during October, the nation's third-highest state rate. A total of 54,324 Florida properties received a foreclosure filing during the month, an increase of 13% from the previous month and nearly 80% from last year.
However, the government unveiled a plan Tuesday which, unlike California's law, could permanently reduce the number of foreclosures, Sharga said.
Homeowners facing foreclosure who are spending more than 38% of their income on mortgage payments could have monthly payments reduced by Fannie Mae and Freddie Mac, the two largest U.S. mortgage finance companies.
"The good news is that there are programs and facilities in place that could actually have a material effect of stemming the tide of foreclosures, but as always the devil is in the details," Sharga said, adding that he does not expect to see that effect until late in the first quarter of 2009.
RealtyTrac counts foreclosures by compiling the total number of properties with at least one foreclosure filing reported during the month. If more than one foreclosure document is filed against a property, RealtyTrac counts only the most recent filing. (Reporting by Helen Chernikoff and Patrick Rucker, editing by Matthew Lewis)

http://www.usatoday.com/money/economy/housing/2008-11-13-foreclosures-rise-25-percent_N.htm?loc=interstitialskip