Congress Fails To Help Working Americans Hold On To Their Homes

If you think Ben Bernanke or Tim Geithner really believes that the recession is coming to a close, think again. These two shills for the Wall Street financial crime syndicate, and mouthpieces for the economic recovery plan designed by President Obama are just performing their clumsy magic act. We are very far from a bottom in the market, or an economic recovery, for that matter. They know what is going on in every market, in every country, and with every central bank. It is clear, just from doing a fraction of the research their teams engage in all day long that the world economy is slowing down day by day, and will continue to do so for a long time into the future. More and more Americans are falling into hard times, and unless help is on the way, there will be long lines at unemployment offices, food banks, welfare services, and legal aid offices all around the country. The nation’s commerce will not be able to sustain itself on the shrinking number of solvent and employed workers. As the nation’s tax base shrinks, those solvent and working Americans will pull back on their own spending in order to have a larger personal cash reserve. Unfortunately, our federal government has not woken up to this grim fact. They continue to wait for a new bubble to inflate the economy in some magical way. And as the world’s commerce shrinks, as we are witnessing today, there will be fewer goods and services bought and sold.

Let me share what I have read from a terrific site called Bomlat .

“Total cargo volume at the [India] 12 gateway ports dropped to 45 million tons, from 46 million tons in the same month the previous fiscal year.”

“Consumer prices fell, [in China] 1.5 percent in the year to April, marking the third consecutive month of deflation after a 1.2 percent fall in the 12 months to March, the National Bureau of Statistics said on Monday.” Bomlat says from graph charts he posted on his site that manufacturing production is suffering. Inflation is low; therefore no one wants to purchase treasuries when there are virtually no interest returns paid. He went on to say that inflation is negative, and the Chinese leadership is freaked out because all of this is happening during a time when they have committed to monetary expansion. After the injection of China’s central bank capital into their economic expansion, it may all just deflate. It is something like if air was being blown into a balloon representing expansion capital, and the balloon got really big, but then suddenly, China let go of the balloon, and let it loose to blast about, the balloon would no longer be filled with capital. All the capitalized-air would empty out of the balloon. The Chinese economic stimulus would fizzle, and inflation would begin to become realized.

Bomlat went on to discuss Volvo truck sales and how their sales have dropped 50-60% and production dropped 70-80%. He wrote that because many manufacturers around the world were producing product in 2007, and now, they are stuck with inventory that is hard to sell, it might take several months, or longer, to begin to reduce that excessive inventory to a point where production can resume, once again. But, in the meantime, workers are getting laid off, their spending is shrinking, and their budgets become fragile.

Here are a couple facts from the American Railroad data regarding tonnage miles for May 9, 2009: down 25.2%. Railway loads of vehicles and equipment were down 49.5%.

Bomlat went on to write about U.S. deflation. “The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2% in April before seasonal adjustment, the Bureau of Labor Statistics of the U.S. Department of Labor reported.” “This index has fallen 0.7% over the last 12 months due primarily to a 25.2% drop in energy prices. The year-over-year declines in March and April are the first since 1955.” Bomlat said, and I paraphrase, we have to point to housing, which became 1% more expensive during the last 12 months. I [Bomlat] think we can see the problems with this inflation calculation methodology because we have experienced, around the world, a big fall in housing prices, as well as a fall in rental prices, but they are trying to convince us that there has been an increase in the cost of housing/shelter.

On the Bomlat site, there was a CNN Money article that said “February’s retail imports, such as clothes, shoes, and home furnishings dropped to the lowest level in seven years.” Bomlat wrote the following, “expect [a] continued [drop in] business for global supply chain providers well into 2010. Ocean, air, TL, LTL, brokers, freight forwarders, distribution center operators, as well as air and ocean ports all need sustained retail volume. Retail business is a critical component [for a] supply chain industry turn-around.”

Bomlat posted a Reuters report which read, “China’s steelmakers are facing low demand and potentially disastrous oversupply, supporting their insistence on a 40% cut in benchmark iron ore prices. China’s steel industry, the world’s biggest, traditionally set a global benchmark…” Mr. Shan Shanghua, secretary general of the China Iron and Steel Association said…this year [there is] too much supply and too little demand.” The secretary general went on to say, “I have not seen any fundamentals to support a sustainable steel price recovery. Major steel mills have cut their production of steel coil remarkably in China and steel mills have already seen their exports falling sharply.”

Bomlat wrote about April’s new big truck orders and how they are down and projected to remain depressed. “North American new truck orders for April ’09 are quoted by FTR to be 7,935—down 9% from March and down 57% from April ’08.” This follows January numbers of a bit over 10,000 units, and February was at 6,200 units, while March was around 8,600 units. He projects that the truck industry will show recovery in 2010.

Then he wrote about furniture imports taking a hit, too. He wrote that furniture imports have been down by 50% from a year ago, due to weak US demand. This decline affects the trucking industry, too.

The biggest shock came from his reporting on the US container import business, which dropped by 15% year-over-year. “Import cargo at the nation’s major retail container ports fell 15% in March, compared to year-earlier numbers.”

It was written in a Journal of Commerce article written by Thomas Gallagher, March 6, 2009, that “retail container traffic at the nation’s ports sank 14.6% in January….This year’s numbers are going to remain well below last year because sales are still slow and most economists aren’t seeing a recovery before the second half of the year at the earliest..”

Bomlat posts all types of American and Chinese commerce figures daily. His data shows that the economy’s of China, and the U.S. are slowing and will likely remain slow. All sectors of industry, of which he reports on, shipping, rail, auto manufacturing, heavy industry, industrial metals, energy, furniture, etc. are demonstrating declining sales, over-capacity in inventory, and reduced consumer spending, as a whole. At the bottom of the post will be a shocking Youtube of thousands upon thousands of empty cargo containers stacked up on idle ports.

General Motors will likely cut 47,000 jobs worldwide this year, and dealership numbers will shrink, too. We will probably find 2600 fewer GM dealers in America reducing their network by a third. What will that do to inventory? Where will all those unsold cars and trucks end up? Will further layoffs occur due to excessive inventory?

The financial sector will end up shrinking their ranks, as well. And, there are now fewer newspapers. Fewer jobs lead to lower wages, less consuming, and a drop in skilled labor jobs. As was seen in the 1981 to 1982 recession, unemployment climbed almost reached 11% with a loss of 3 million jobs. This recession is worse than that. This is worldwide. This recession has leaked into all sectors, especially housing and the ability to hold onto one’s retirement investments. One-third of all mortgages are underwater!!!! That is very scary.

According to the research done by the Columbia University economist Till von Wachter, the economist Jae Song of the Social Security Administration, and another economist Joyce Manchester of the Congressional Budget Office wrote that a typical 40-year old man who found himself unemployed during the 1981-82 recession went on to suffer a 20% loss in lifetime earnings. “People losing their jobs now in permanently downsized industries have to be aware that they’re particularly at risk of pretty large losses” to lifetime wages, says von Wachter, who briefed staff at the Fed and the European Central Bank last month of the effects of mass layoffs. (“Great Recession Will Redefine Full Employment as Jobs Vanish”, Matthew Benjamin and Rich Miller; Bloomberg 5-4-09. Bernanke and Geithner are not being honest with the American people.

President Obama when speaking about the fall of Chrysler Corporation emphasized the “shared sacrifice” that has to be made by the UAW in order to guarantee that the automaker can emerge from bankruptcy stronger, more competitive and viable as it joins forces with Fiat Corporation. What is the president talking about? Firstly, there is no guarantee that the new Chrysler will emerge successfully as he has suggested. Secondly, what is the “shared sacrifice” the Wall Street financial banking industry has had to make? They have made none! They have gotten all of the government bail-out money they wanted at zero percent interest, and with no sacrifice, such as new regulatory rules, new chief operational officers, limitations on their pay, and indictments from short selling their competitor's stock, or even betting against their own demise. The Wall Street financial crime syndicate even strong-armed 12 Democratic Senators to vote against the 'Shared Sacrificial' American people who would have benefited from a law allowing judges to assist desperate homeowners to write down (cram-down) the principal of their mortgage loans in hopes that they might be able to hang on to them instead of losing them.

No “shared sacrifice” allowed for the Wall Street banksters who were responsible for the economic collapse. The way this banking crime syndicate thinks is that property, mortgage property, remains to be their most treasured collateral which they hope will save their toxic “legacy” debt teetering on the brink of further devaluation. As the bank’s collateral falls in value, their debts rise bringing them closer to insolvency. President Obama, regressive Republicans, and the 12 key Democrats who voted against Senator Durbin’s “Helping Families Save Their Homes In Bankruptcy” amendment, obviously felt that further rescue of the banks took priority over any legislation that would benefit the suffering working American.

What they seem to have NOT realized is that they voted for more foreclosures, more bankruptcies, and ultimately, more bank failures. This amendment would have placed a bottom on collapsing home prices, which would have considerably slowed mortgage defaults. Instead of administering simple rescue breaths and chest compressions to the failing heart of the economic crisis, they decided to just kill the patient.

A mountain range of shipping containers


thanks for reading, jerry