Financial Giants Using Taxpayer Money to Buy Up Other U.S. Lenders

Related Cos.' Ross and Partners May Seek $1 Billion for Bank

SJB National Bank, owned by a private equity firm of financial elites, won approval by the FDIC to bid on failing banks, and is working with Deutsche Bank to raise $1 billion for a new bank that may acquire seized U.S. lenders

Bloomberg
October 30, 2009

Related Cos. founder Stephen Ross and partners Jeff Blau and Bruce Beal Jr. are trying to raise about $1 billion for their new bank that may acquire a seized U.S. lender, people familiar with the plan said.

SJB National Bank, owned by the executives, is working with advisers including Deutsche Bank AG to raise capital in a private placement, according to the people, who declined to be identified because the plans are private.

SJB won approval to bid on failing institutions from the FDIC, according to an Oct. 26 letter from the regulator obtained by Bloomberg News. The FDIC had 416 companies on its list of “problem” lenders as of June 30, and 106 U.S. banks have failed so far this year, the most since 1992.

The executives at New York-based Related received preliminary approval as individuals to establish SJB earlier this year, according to a notice on the U.S. Office of the Comptroller of the Currency’s Web site. Related, the closely held developer of New York’s Time Warner Center, won’t have any stake.

“That would be a nice war chest for them to have,” said Chip MacDonald, a partner with Jones Day in Atlanta who specializes in deals among lenders. “With the approval from the FDIC they could make some really meaningful acquisitions.”

Representatives of Deutsche Bank, SJB and Related declined to comment.

IndyMac, BankUnited

In March, California-based IndyMac Federal Bank, which failed in July 2008, was sold to investors led by Steven Mnuchin, an ex-Goldman Sachs Group Inc. investment banker, and including buyout firm J.C. Flowers & Co. Florida’s BankUnited Financial Corp. was sold in May to firms including Blackstone Group LP and WL Ross & Co.

Related has more than $15 billion of assets including 11 million square feet of commercial property and 17,500 apartment units, according to its Web site.

Ross, 69, completed a purchase of the Miami Dolphins from Wayne Huizenga in January, paying about $1 billion for the National Football League team, its stadium and other properties. He sold stakes to singers Marc Anthony and Gloria Estefan, and her husband, producer Emilio Estefan. The University of Michigan’s business school was named after Ross, following a gift in 2004.

TARP Chief: Banks Possibly 'in More Danger Now'

CNN
October 21, 2009

The banking system today may be in a more precarious position than it was a year ago, the man charged with overseeing a $700 billion bailout program said Wednesday.

Neil Barofsky, the special inspector general managing the Troubled Asset Relief Program, told CNN's Wolf Blitzer on Wednesday that the government's decision to support bank mergers over the past year may have put the U.S. economy more at risk.

"These banks that were too big to fail are now bigger," Barofsky said. "Government has sponsored and supported several mergers that made them larger and that guarantee, that implicit guarantee of moral hazard, the idea that the government is not going to let these banks fail, which was implicit a year ago, is now explicit, we've said it. So if anything, not only have there not been any meaningful regulatory reform to make it less likely, in a lot of ways, the government has made such problems more likely.

"Potentially we could be in more danger now than we were a year ago," he added.

Earlier in the day, Barofsky issued a scathing report criticizing the Treasury Department for not being transparent enough about how bailout money was being spent. He warned that this could have lasting effects.

"I think this cynicism, this anger, this distrust of government that's born in part from a lack of transparency could have far-reaching ramifications, whether there's a next crisis or when anytime the government is going to call on the American people, the taxpayer, to support necessary programs," Barofsky said.

JP Morgan the New Lehman Brothers: Why Make Money Through Commercial Banking When You Can Become a Taxpayer-Backed Investment Bank (How JP Morgan Really Made the $3.6 Billion in Q3 Profits)

mybudget360
October 18, 2009

Toxic mortgages and credit card losses through defaults are rising at a rapid pace. This was also apparent in the earnings report from JP Morgan that reported positive earnings because of non-retail banking activities. Yet the media for whatever reason isn’t highlighting more carefully where the gains are coming from. For example, JP Morgan which swallowed up Washington Mutual and Bear Stearns, posted losses on credit cards and home mortgages yet doubled its earnings from last year in its investment banking division.

Here is one of the key examples of why removing Glass-Steagall Act is such a major problem. The recent meteoric rise in stock prices merely reflects hot money trying to find ground. If we look at actual loan losses they are still on the rise (see chart).

And banks are not lending more as they stated initially with the request for bailout funds. The premise was that trillions were needed or lending would completely dry up. Lending has dried up. Take the mortgage market for example. Loans that are FHA insured now make up the bulk of the market. For non-FHA loans, banks seek to have loans backed by Fannie Mae, Freddie Mac, or Ginnie Mae. In other words, banks are unwilling to lend their own money and will only lend funds backed by the government (aka the American taxpayer).

This behavior is most pronounced with credit cards. With rising defaults companies are using bailout funds to plug up additional losses. Yet they are also combining the easy money to play their hand on Wall Street. The mix of retail and commercial banking is still occurring even after our economy nearly tanked and we are still in recession nearly 2 years later.

I had an experience with the credit card companies recently that shows what is occurring. One of my cards had a line of $10,000 but I rarely use it. If I did use it, I would pay it off every month. Credit card companies look at people that pay off their balance every month as deadbeats. So last month, I receive a letter stating my balance was lowered to $3,000 simply because my lack of use. Keep in mind that this line had been open for 7 years. So I call up the bank and they tell me I can either stay with the new terms or close my account. This is how banks are playing the system and stealing money from taxpayers.

Don’t be fooled, they are pulling credit back (see chart)...

Bailed-Out Banks Pile On Profit

OfficialWire
October 17, 2009

The largest U.S. banks with federal bailout funds to prop them up piled on profits in the third quarter in a sluggish economy, quarterly reports show.

Some banks have paid back the billions in emergency government aid, but remain indirect or direct beneficiaries of more than $1 trillion in federal investments in the financial markets or the $787 billion economic stimulus package.

It could be said, the remaining firms on Wall Street are also benefiting from the "survivor effect" of having less competition by making it through the financial meltdown while the likes of Bear Stearns, Lehman Brothers, Merrill Lynch, Wachovia and Washington Mutual were plowed under in the financial crisis, The Washington Post reported Friday.

In the third quarter, Goldman Sachs posted earnings of $3.19 billion or $5.25 per share, compared to $1.81 per share for the third quarter of 2008.

Profits still mean big bonuses at banks and Goldman has set aside $5.35 billion for bonus pay this year, 84 percent more than a year ago. JPMorgan Chase said this week it set aside $2.78 billion for commission checks, 28 percent more than a year ago.

Baer-ING Deal Kicks Off Private Banks' M&A Season

Reuters
October 7, 2009

Julius Baer's (BAER1.VX) purchase of ING's (ING.AS) Swiss private banking assets marks the start of a consolidation wave in the wealth management industry, insiders told the Reuters Global Wealth Management summit.

Baer will buy the ING's assets for 520 million Swiss francs ($505 million) -- the biggest acquisition in the European wealth management industry -- with Baer paying about 2.3 percent of assets under management (AUM) excluding surplus capital.

Before the financial crisis began, similar deals attracted prices above 6 percent of AUM. With valuations now low, buys are attractive as banks' liquidity worries recede and the capital market turmoil calms.

"There are some opportunities now that didn't exist two years ago," HSBC's (HSBA.L) global CEO for private banking Chris Meares said in Singapore. "There is no doubt with the industry profits coming down, valuations have got a little better, become more interesting at least for a buyer."

But if markets continue to firm, this situation may not last for long, prompting consolidators to move in on targets quickly before valuations recover.

"There is a lot of hope that if the market continues to go up, then the valuations must go up," said Justin Ong, head of PricewaterhouseCoopers' Asia Pacific wealth management practice.

This could happen at either end of the private banking spectrum, with small firms being netted by slightly larger companies looking to bulk up and the really big players sniffing out weaknesses in rivals for possible mega-deals.

Barclays Wealth (BARC.L) Vice Chairman Gerard Aquilina said her group would be prepared to acquire an entity the size of Julius Baer or bigger to reach its ambitious growth targets.

"There could be a major transformational buy for us," he said in Geneva.

Spiraling regulatory requirements and costs springing from clients demands for improved transparency means banks could be forced to take on entirely new support teams and develop new technology, private bankers said.

Add this to clients' demands for more contact time to explain what advisers are doing with their hard-earned money, and cost pressures could become too great for some banks, forcing them to seek the infrastructure of larger rivals by selling up.

"Competition is tougher, regulation is another important factor. You need to have an infrastructure to allow you to participate in today's environment," said Felipe Godard, JP Morgan Private Bank (JPM.N) managing director and head of European International Markets.

"My guess is that smaller players will be the first ones to look for consolidation to create critical mass," he said.

Large players at the Reuters Wealth Management Summit suggested private banks needed a critical mass of about $10 billion in assets to be competitive.

"Probably if you are below 10 billion, either you buy another bank or you sell," said Guillaume Lejoindre, managing director of SG Private Banking (Suisse) SA.

Reyl & Cies Chief Executive Francois Reyl said the threshold depended on the specific kind of business of a private bank, but added that his Swiss private bank was in several discussions for possible acquisitions and aimed to double its size from 2.5 billion Swiss francs in assets under management by 2012. This would only require a 10 percent increase in the bank's current staff of around 90, Reyl said, suggesting economies of scale were a factor in the bank's drive for acquisitions.

"We're conscious of our size, but yes, we're a consolidator in the middle," he said. "Small banks managing sub-500 million Swiss francs -- which clearly lack the scale -- these are good acquisition targets for us."

HSBC, Others Resume Talks for RBS Asia Units

Reuters
October 8, 2009

HSBC has resumed talks with Royal Bank of Scotland over the purchase of the remaining retail and commercial units that bailed-out RBS owns in Asia, sources said on Thursday.

HSBC's re-started talks over the RBS units comes as Asia-focused HSBC is also involved in the sale of ING's private banking assets in Asia.

HSBC declined to comment.

HSBC and other banks have approached RBS and its advisers about the RBS auction after Standard Chartered's exclusive negotiations with RBS expired recently, the sources said.

RBS is selling its remaining retail and commercial banking divisions in China, India and Malaysia, worth "a few hundred million" dollars, according to a source familiar with the matter. Previous reports put the value of those assets at $200 million.

Sources said talks with potential buyers were in early stages, since StanChart's exclusivity only ended within the past week or so.

The retail and commercial units in Asia were identified as non-core assets back in February, prompting an auction that has seen several starts and stops.

In August, Australia and New Zealand Banking Group Ltd said it agreed to buy some Asian units from RBS for about $550 million. ANZ, Australia's fourth-largest lender, said it would buy RBS' retail, wealth and commercial businesses in Taiwan, Singapore, Indonesia and Hong Kong. ANZ will also buy RBS' institutional businesses in Taiwan, Philippines and Vietnam.

RBS could sell the remaining Asia retail and commercial units separately in each country, another source said.

"RBS is in ongoing discussions with bidders for the remaining assets it has decided to sell in Asia and will make further announcements, as appropriate, in due course," said RBS spokeswoman Yuk Min Hui.

The bank is retaining the wholesale and investment banking business, as well as its international wealth management group.

StanChart declined to comment. Morgan Stanley, RBS's adviser on the Asia sale, also declined to comment.

China's Minsheng Eyes Control of U.S. Bank UCBH

Reuters
October 6, 2009

Minsheng Bank, China's first listed non-state lender, is looking to increase its stake in San Francisco-based UCBH Holdings Inc, in order to bolster the U.S. bank's capital, Bloomberg said, citing two people briefed on the matter.

Minsheng is planning to approach U.S. regulators for approval to boost its stake in UCBH to at least 50 percent from the present 9.6 percent, the people told the news agency.

Minsheng has an option to increase its stake to about 20 percent, according to the news agency.

UCBH, which is operating under an enforcement order from the Federal Deposit Insurance Corp and the California Department of Financial Institutions, said last month two top executives resigned after a board audit panel raised concerns about the actions of several current and former officers.

Minsheng and UCBH could not be immediately reached for comment by Reuters.

Banking Superpowers

Note that JP Morgan Chase (which acquired Washington Mutual on September 25, 2008), Wells Fargo (which acquired Wachovia on October 12, 2008), and Bank of America (which acquired an additional 8.4 percent state in China Construction Corp. on November 18, 2008), are amoung the nine banks that were partially "nationalized" in October 2008. Note also that ICBC is majority-owned by the Chinese Government.

US: Watchdog Says Treasury Misled Public About Cost of Bank Bailout

WSWS
October 6, 2009

Neil Barofsky, a top overseer of the US bank bailout program, published an audit Monday in which he asserted that Bush administration Treasury officials misled the public about the financial condition of firms receiving bailout funds. The revelations amount to an admission by an agency of the federal government that top government officials lied to the public about potential losses in order to push through the bailout program.

Barofsky, the special inspector general for the Troubled Asset Relief Program (TARP), noted that in selling the bailout to the American people, Bush administration officials repeatedly insisted that the banking system was sound and claimed that the public stood to retrieve the $700 billion in taxpayer money allocated under TARP, perhaps with a profit.

Barofsky’s report cited Treasury Secretary Henry Paulson, who stated on October 14, 2008: “These are healthy institutions, and they have taken this step for the good of the US economy.”

The same day, the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corporation said in a joint statement: “These healthy institutions are taking these steps to strengthen their own positions and to enhance the overall performance of the US economy.”

These statements came the day after Paulson met privately with the heads of the nine largest US banks and obtained their agreement to accept a combined total of $125 billion in public funds, at interest rates highly favorable to the banks.

According to Barofsky, however, “Contemporaneous reports and officials' statements to SIGTARP (Special Inspector General for TARP) during this audit indicate that there were concerns about the health of several of the nine institutions at that time.”

Barofsky took care to couch his exposure in non-accusatory terms. The conclusion he drew was not that Paulson and other top Bush officials should be indicted and prosecuted for fraud and conspiracy. Rather, he advised that “federal officials should take more care in publicly characterizing the nature and objectives of their initiatives,” so as to maintain the credibility of their program to bail out Wall Street.

Nevertheless, his report sheds light on the existence of a conspiracy between the major banks, the Bush administration and the Democratic-controlled Congress to carry out the greatest diversion of public resources to the financial aristocracy in history—a process that has been accelerated by the Obama administration.

Barofsky was somewhat less reserved in an interview Monday on CNN, in which he said:

“Secretary of Treasury Hank Paulson came out to repeatedly emphasize how healthy these institutions were, and as a result, that this infusion of capital would get them lending again, and as we disclose in our audit, this just wasn’t an accurate statement.” He added, “The Treasury and the Federal Reserve had serious concerns about the health of these institutions.”

Asked about the likelihood that the US government would recoup the money it spent bailing out the banks, Barofsky said:

“I think it’s extremely unlikely that we’re going to have a dollar-for-dollar return, and I don't think the program is designed to have a dollar-for-dollar return.”

Barofsky’s audit goes into some detail regarding last year’s takeover of Merrill Lynch by Bank of America. The report notes that while rivals Citigroup and JPMorgan Chase each received $25 billion in bailout money, Bank of America received not only its allocated $25 billion, but also the $10 billion slated for Merrill Lynch. Bank of America later received an additional $20 billion in emergency funds, as well as guarantees on hundreds of billions of dollars worth of assets, after Merrill revealed disastrous fourth-quarter losses amounting to $15.3 billion.

There is considerable evidence suggesting that Bank of America, under pressure from Paulson and Federal Reserve Chairman Ben Bernanke, concealed the real state of Merrill, as well as Merrill’s plans to award its executives millions of dollars in bonuses, from both Bank of America shareholders and the public in order to complete its takeover of the investment bank. Congressional hearings have been held on the deal and New York Attorney General Andrew Cuomo is reportedly considering issuing indictments in connection with the takeover.

This is not the first time an oversight body has issued criticisms of the bailout program. On July 20, Barofsky chided the Obama administration Treasury Department for failing to demand that the banks disclose what they were doing with the taxpayer money they had received, and warned that the bailout could end up costing the government up to $23 trillion. Earlier that month, the Congressional Oversight Panel, another oversight body for the TARP, found that the government was receiving just 60 cents on the dollar on many obligations owed to it by the banks.

These revelations have been simply ignored. The TARP oversight bodies have no real power, and neither the Obama administration nor the Democratic-controlled Congress has any intention of responding to their disclosures or acting on their recommendations for greater “transparency.”

The Threat of a Nuclear World War III

Escalation Scenarios: The Third World War and Its Aftermath

By Carol Moore, CarolMoore.net
September 23, 2009

URGENT: Scenario 3 - Israel Bombs Iranian Nuclear Plants

Nuclear power plants are nuclear war targets which will spread massive additional radiation over thousands of square miles.

A world nuclear war is one that involves most or all nuclear powers releasing a large proportion of their nuclear weapons at targets in nuclear, and perhaps non-nuclear, states. Such a war could be initiated accidentally, aggressively or pre-emptively and could continue and spread through these means or by retaliation by a party attacked by nuclear weapons.

While some speak of “limited nuclear war,” it is likely that any nuclear war will quickly escalate and spiral out of control because of the “use them or loose them” strategy: If you don’t use all your nuclear weapons you are likely to have them destroyed by the enemy’s nuclear weapons.

Such a war could start through a reaction to terrorist attacks, or through the need to protect against overwhelming military opposition, or through the use of small battle field tactical nuclear weapons meant to destroy hardened targets. It might quickly move on to the use of strategic nuclear weapons delivered by short-range or inter-continental missile or long-range bomber. These could deliver high altitude bursts whose electromagnetic pulse knocks out electrical circuits for hundreds of square miles. Or they could deliver nuclear bombs to destroy nuclear and/or non-nuclear military facilities, nuclear power plants, important industrial sites and cities. Or it could skip all those steps and start through the accidental or reckless use of strategic weapons.

Below are six scenarios by which world nuclear war could come about. While these are some of the major scenarios and combination of attacks and retaliations, they are hardly exhaustive. U.S., Russian and other nuclear nations’ weapons strategizers deal with these scenarios every day but rarely let mere citizens in on their grizzly thinking. Citizens must end their denial and become aware of such scenarios.

GENERAL SCENARIOS

Accidental: Since the United States and Russia have “launch on warning” systems that send off rockets before it is confirmed a nuclear attack is underway, any tensions between them can lead to massive nuclear war within thirty minutes of a warning — no matter how false the warning may be.

Aggressive: One or more nations decide to use weapons against nuclear or non-nuclear nations in order to promote an economic, political or military goal, as part of an ongoing war or as a first strike nuclear attack. (The state, of course, may claim it is a pre-emptive, retaliatory or even an accidental attack.)

Pre-emptive: One or more nations believe (correctly or incorrectly) or claim to believe that another nuclear nation is about to use nuclear weapons against its nuclear, military, industrial or civilian targets, and pre-emptively attacks that nation. May result from political or military “brinkmanship.”

Retaliatory: Use of nuclear weapons in response to a nuclear attack — or even a conventional, chemical or biological attack by a non-nuclear nation.

ASSUMPTIONS OF THESE SCENARIOS

There is a whole body of knowledge and assumptions that is taken into account when putting together scenarios like those below. My bottom line assumption is that any nuclear exchange has an excellent chance of resulting in a series of escalations that will spiral out of control, setting off a round of exchanges among various enemies under a “use it or lose it” philosophy, as well as among the treaty allies of the relevant nuclear powers and their allies. This continues until most of the planet’s 20,000 odd nuclear weapons are exhausted. In making “limited nuclear war” calculations, all nations should assume “whatever can go wrong, will go wrong.” Unfortunately, too many strategizers assume they can conduct limited strikes and keep them limited.

Related assumptions include:

** Any nuclear attack on a primary Russian target like Moscow, St. Petersburg, or nuclear command headquarters by any nation or group, known or unknown, could lead to a commander turning on “The Dead Hand” strategy and/or prompt one or more of Russia’s semi-autonomous military field commanders to retaliate against U.S. and European nuclear targets. Attacks on secondary targets or nuclear detonations very close to Russian soil also might lead to some sort of nuclear escalation.

** Any nuclear attack on U.S. and/or European sites by any nation or group, known or unknown, probably will result in massive U.S. and/or European retaliation against the known or assumed perpetrators or their known or assumed allies.

** It is likely that the U.S., Russia, China, Israel, India and Pakistan will use some of their weapons to attack other nuclear and non-nuclear nations which might threaten them after they have been devastated by nuclear war.

** Any nuclear attack on Israel by terrorists, or Pakistan, Russia or China, will result in Israel’s surviving land, air and submarine-carried or based-issiles being used against Arab and Muslim capitals. A particularly devastating attack (including chemical or biological weapons) possibly might result in a full scale “Samson Option” attack on European and Russian targets. The latter, of course, would result in Russian retaliation against the United States, perhaps its punishment for not having done enough to protect Israel.

** Any nation’s use of nuclear weapons against a non-nuclear nation will be only somewhat less inflammatory than using them against a nuclear nation, especially if that nation has many treaty allies. It will ratchet all nuclear nations' alert systems and lead to unforeseeable consequences that could easily spiral to world nuclear war.

NOTE: COLORS OF LINES AND DESCRIPTIONS ARE COORDINATED

Aggressive Pre-Emptive Retaliatory Accidental

SCENARIO 1.

RUSSIA OR U.S. MISTAKENLY INTERPRETS GLITCH DURING TIME OF TENSION AS NUCLEAR ATTACK, LEADING TO WORLD NUCLEAR WAR

During time of minor or major political tension, especially active U.S. bombings of other nations or any use of nuclear weapons, Russian commanders' faulty early-warning-system detects false evidence of a nuclear attack from the United States. Russia launches a large proportion of its weapons at the U.S. and pre-emptively at U.S. European and Israeli allies, as well as China, India and Pakistan to cripple their nuclear capability. The U.S. and Europe retaliate at Russia and the U.S. attacks China to destroy its nuclear stocks. Israel retaliates against Russia and initiates aggressive attacks against Arab and Muslim capitols. India and China may strike each other to destroy any remaining nuclear or other military capability. (It is less likely that the U.S. would experience such a glitch; if so, the U.S. would strike Russia and China; they would retaliate against the U.S. and Europe and probably attack other potentially hostile nuclear powers to knock out their capability.)

SCENARIO 2.

U.S. OR RUSSIA THREATEN OR ENGAGE IN MILITARY AGGRESSION AGAINST SMALLER NATION, STARTING ESCALATION TO WORLD NUCLEAR WAR

Russia and US engage in threats over further U.S. aggression in the Middle East or over Russia's refusal to withdraw troops from the former Soviet Republic Georgia. Russia and/or the U.S. pre-emptively strike the others' nuclear targets, leading to further rounds of retaliatory exchanges. Russia strikes pre-emptively at U.S. European and Israeli allies, as well as China, India and Pakistan to cripple their nuclear capability. Europe retaliates at Russia, and the U.S. attacks China to destroy any remaining nuclear stocks. Israel retaliates against Russia and initiates revenge attacks against Arab and Muslim capitols. India and China may strike each other to destroy any remaining nuclear or other military capability.

SCENARIO 3.

ISRAEL ATTACKS IRAN'S NUCLEAR FACILITIES AND/OR SYRIA AND LEBANON, WHICH RETALIATE WITH MASSIVE CONVENTIONAL OR WMD ROCKET ATTACKS; ISRAEL RETALIATES WITH NUCLEAR WEAPONS, ESCALATING TO WORLD NUCLEAR WAR


Israel attacks Iran's nuclear facilities and/or Syria and Lebanon. These countries respond with massive rocket attacks using conventional bombs and even some chemical, biological or radiological weapons. Israel responds with nuclear strikes against these nations and Pakistan. Outraged Pakistan retaliates against Israel and pre-emptively attacks Israel's ally/Pakistan's enemy India, which retaliates. Israel initiates "Samson option" and attacks Arab and Muslim capitols, as well as "antisemitic" Europe and Russia. Russian regional commanders retaliate against Israel, its ally the U.S., and U.S. European allies and China, to destroy its nuclear capability. The U.S. retaliates against Russia and hits China's nuclear capability. China uses any remaining nuclear weapons against Russia, the U.S. and India. India retaliates against China.

India and Pakistan in 2002

India and Pakistan have repeatedly threatened nuclear war against each other, most seriously in the last few years. In late December 2002 Pakistan’s president, General Pervez Musharraf, addressing Air Force veterans in Karachi, said:

The last year “personally” conveyed a clear “message” to Prime Minister Vajpayee, “through every international leader who came to Pakistan,” namely, that Indian troops “should not expect a conventional war from Pakistan” if they “moved a single step across the international border or the Line of Control.”

In response Indian Defense Minister George Fernandez said:

“We can take a bomb or two, or more. When we respond, there will be no Pakistan.”

About the same time former Army Chief of Staff Aslam Beg, then heading a right-wing Pakistani think tank said:

“Our policy of deterrence is India-specific. No matter who comes for us, Israel, the United States or India we will take on India. If someone is thinking of taking on Pakistan, they should know we will take on India.”

And despite subsequent detente between the two nations during the remainder of 2003, as late as fall 2003, Ariel Sharon visited India, worrying Pakistan that he was once again proposing India do a surgical strike against Pakistani nuclear assets. Once any such Indian-Pakistani nuclear exchange began, there are a number of scenarios by which it could escalate into accidental or intentional world nuclear war.

The Samson Option

From Wikipedia (for the 1991 book by Seymour Hersh, see The Samson Option.)

The Samson Option is a term used to describe Israel's alleged deterrence strategy of massive retaliation with nuclear weapons as a “last resort” against nations whose military attacks threaten its existence, and possibly against other targets as well. Israel refuses to admit it has nuclear weapons or to describe how it would use them, an official policy of nuclear ambiguity, also known as “nuclear opacity.” This has made it difficult for anyone outside the Israeli government to definitively describe its true nuclear policy, while still allowing Israel to influence the perceptions, strategies and actions of other governments.

As early as 1976, the CIA believed that Israel possessed 10 to 20 nuclear weapons. By 2002 it was estimated that the number had increased to between 75 and 200 nuclear weapons. Kenneth S. Brower has estimated as many as 400 nuclear weapons. These can be launched from land, sea and air. This gives Israel a second strike option even if much of the country is destroyed.

The term “Samson Option” has also been used more generally in reference to Israel’s nuclear program. Commentators have also used the term in reference to situations where non-nuclear actors, such as Saddam Hussein, Yassir Arafat and Hezbollah threatened conventional weapons retaliation, and even to United States President George W. Bush's foreign policy.

Read the rest of the scenarios here

Historical Close Calls to World War Three

Before the end of the Second World War, British Prime Minister Winston Churchill expressed concern that given the enormous size of Soviet forces deployed in Europe at the end of the war, and the perception that the Soviet leader Joseph Stalin was unreliable, there existed a Soviet threat to Western Europe. In April-May 1945, British Armed Forces developed Operation Unthinkable; its primary goal was “to impose upon Russia the will of the United States and the British Empire.” However, the plan was rejected by the British Chiefs of Staff Committee as militarily unfeasible.

With the development of the arms race, before the collapse of the Soviet Union and end of the Cold War, an apocalyptic war between the United States and the Soviet Union was considered plausible. The Doomsday Clock has served as a symbol of historic World War III close calls since the Truman Doctrine went into effect in 1947. The Cuban Missile Crisis in 1962 is generally thought to be the historical point at which the risk of World War III was closest. Other potential starts have included the following:

1948

Berlin Blockade. Soviet military forces stopped all commerce into West Berlin which caused a humanitarian and political crisis. In response, Western allies sent in air lifts to supply West Berlin.

August 29, 1949

Soviet Union successfully conducted tests with nation’s first atomic bomb, RDS-1.

1950–1953

Korean War. General MacArthur planned to invade and bomb China to eliminate the threat of communism in eastern Asia.

August 12, 1953

Soviet Union successfully conducts tests of nation’s first hydrogen bomb, Joe-4.

July 26, 1956 – March, 1957

Suez Crisis: The conflict pitted Egypt against an alliance between France, the United Kingdom and Israel. When the USSR threatened to intervene on behalf of Egypt, the Canadian Ambassador to the UN Lester B. Pearson feared a larger war and urged the British and French to withdraw. The Eisenhower administration, also fearing a wider war, applied pressure to the United Kingdom to withdraw, including a threat to create a currency crisis by dumping US holdings of British debt. Lester B. Pearson later received a Nobel Peace Prize for his efforts.

June 4 – November 9, 1961

Berlin Crisis of 1961.

October 15 – October 28, 1962

Cuban Missile Crisis: The conflict pitted the United States against an alliance between the USSR and Cuba. The USSR was attempting to place several launch sites in Cuba in response to the United States installation of missiles in Turkey. The United States response included dispersal of Strategic Air Command (SAC) bombers to civilian airfields around the United States and war games in which the United States Marine Corps landed against a dictator named “ORTSAC” (Castro spelt backwards). For a brief while, the U.S. military went to DEFCON 3, while SAC went to DEFCON 2. The crisis peaked on October 27, when a U-2 (piloted by Rudolph Anderson) was shot down over Cuba and another U-2 over the USSR was almost intercepted when it strayed over Siberia, after Curtis LeMay (U.S. Air Force Chief of Staff) had neglected to enforce Presidential orders to suspend all overflights. See also: Vasiliy Arkhipov.

October 24, 1973

Yom Kippur War: As the Yom Kippur War was winding down, a Soviet threat to intervene on Egypt’s behalf caused the United States to go to DEFCON 3.

September 26, 1983

False “US First Strike” Alarm: Soviet early warning systems showed that a US ICBM attack had been launched. Colonel Stanislav Petrov, in command of the monitoring facility, correctly interpreted the warnings as a computer error, even though this was against standing orders.

November 1983

Exercise Able Archer: The USSR mistook a test of NATO’s nuclear-release procedures as a fake cover for a NATO attack and subsequently raised its nuclear alert level. It was not until afterwards that the US realized how close it had come to nuclear war. At the time of the exercise the Soviet Politburo was without a healthy functioning head due to the failing health of then leader Yuri Andropov.

January 25, 1995

Norwegian rocket incident: A Norwegian missile launch for scientific research was detected from Andøya Rocket Range and thought to be an attack on Russia, launched from a submarine five minutes away from Moscow. Norway had notified the world that it would be making the launch, but the Russian Defense Ministry had neglected to notify those monitoring Russia’s nuclear defense systems.

June 12 – June 26, 1999

Pristina airport standoff: Russian and NATO forces had a standoff over the Pristina Airport in Kosovo.

Read more on Wikipedia

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Urban Wasteland in Middle America

Half of all humanity, including 53 percent of all Americans, live in or in proximity to a coastal city... By 2025, 75 percent of the world's population, approximately 6.2 billion people, including 262 million Americans, will live on or near a coast, as immigrants flock to port communities in search of jobs and other opportunities. - Amy Myers Jaffe, The Coastal Cities Phenomenon, Esquire, October 1, 2006



The 1910 census was the last one in which rural Americans represented a majority of the population; these days, we've become a thoroughly metropolitan nation. Two-thirds of our population lives in the top 100 metropolitan areas , and 84 percent of Americans live in all 363 metros... The top 100 metropolitan areas are home to 68 percent of America's jobs and are the origin of 75 percent of the nation's gross domestic product... People's longing for small towns is an understandable fantasy. Small towns seem like slower, saner havens in an overly connected, frenetic world, places where a blackberry is an ingredient in jam. But metros, not small towns, are where our economy is, where our population is, and where our country's future is. - Jennifer Bradley and Bruce Katz, Village Idiocy: Enough with Small-Town Triumphalism, The New Republic, October 8, 2008

Detroit House Auction Flops for Urban Wasteland

By Kevin Krolicki, Reuters
October 25, 2009

* 9,000 properties in a land area the size of Boston
* Minimum bid was $500
* After 4 days, less than 20 percent sold
* Potential homeowners frustrated by speculators

In a crowded ballroom next to a bankrupt casino, what remains of the Detroit property market was being picked over by speculators and mostly discarded.

After five hours of calling out a drumbeat of "no bid" for properties listed in an auction book as thick as a city phone directory, the energy of the county auctioneer began to flag.

"OK," he said. "We only have 300 more pages to go."

There was tired laughter from investors ready to roll the dice on a city that has become a symbol of the collapse of the U.S. auto industry, pressures on the industrial middle-class, and intractable problems for the urban poor.

On the auction block in Detroit: almost 9,000 homes and lots in various states of abandonment and decay from the tidy owner-occupied to the burned-out shell claimed by squatters.

Taken together, the properties seized by tax collectors for arrears and put up for sale last week represented an area the size of New York's Central Park. Total vacant land in Detroit now occupies an area almost the size of Boston, according to a Detroit Free Press estimate.

The tax foreclosure auction by Wayne County authorities also stood as one of the most ambitious one-stop attempts to sell off urban property since the real-estate market collapse.

Despite a minimum bid of $500, less than a fifth of the Detroit land was sold after four days.

The county had no estimate of how much was raised by the auction, a second attempt to sell property that had failed to find buyers for the full amount of back taxes in September.

The unsold parcels add to an expanding ghost town within the once-vibrant town known worldwide as the Motor City.

Critics say the poor showing at the auction underscores the limits of using a market-based system to clean up property tax problems. They say the system has enriched a few but failed to deliver a way for Detroit to staunch its dwindling population and could worsen the vacancy crisis.

One proposed alternative would have officials take control of the tax foreclosure process through a land bank program of the kind being used to revitalize the nearby city of Flint.

The stakes in the debate are rising.

The number of Detroit properties in tax foreclosure has more than tripled since 2007 and seems certain to rise further. The lots for sale last week represented arrears from only 2006, well before the worst of the downturn for U.S. automakers.

"We have to keep in mind that GM and Chrysler filed for bankruptcy this year," said Terrance Keith, chief deputy treasurer of Wayne County. "Some people are going to be totally tapped out next year."

Detroit, already stuck with a $300 million budget deficit, is responsible in the meantime for cutting the weeds and responding to fire calls for thousands more abandoned lots.



'WHY AM I COMPETING AGAINST A BANK?'

Many potential homeowners that Detroit desperately needs said they felt penalized by the auction process.

They mostly found themselves outbid by deeper-pocketed investors from California and New York who were in a race to claim the auction book's relatively few livable properties.

Dozens of potential bidders, mostly local residents, were turned away on the first day of the auction by deputies after they failed to meet the morning deadline for registration.

Ross Wallace, a lieutenant in the U.S. Army, turned in his check for $500 and waited on the auction floor in full dress uniform for a chance to buy a Detroit house on the cheap.

Wallace, 27, said he did not want to leave his fiancee and two children with a mortgage before shipping out to Iraq later this year.

"I still have student loans and I'm trying to be responsible. I don't want to leave debt," he said.

Wallace waited for the auction to roll around to Detroit's Boston-Edison district, a once stately area that was home to boxing legend Joe Louis and Motown founder Berry Gordy.

But he was quickly outbid. An unidentified investor at the front of the room who had scooped up several dozen properties took the home Wallace wanted for about $15,000.

"Why am I competing against a bank?" he said later. "It would be common sense to have a separate process for people who want to move back to the city or it's going to stay empty."

Nearby, a Dutch-born local woman, Riet Schumack, 54, knitted patiently through the auction for a chance to bid on a lot in Brightmoor, one of the most blighted neighborhoods.

Schumack, who runs a community garden near her home that employs 14 neighborhood children, said she had been battling through a maze of bureaucracy for years to try to buy an abandoned lot nearby to expand and plant fruit trees.

She learned the lot had been taken back from its previous owner -- an absentee investor with more than 100 abandoned lots in Brightmoor -- only because of her constant calls to city and county officials, she said.

When officials told her she would have to wait for a fourth day to bid on the property, Schumack broke down into tears.

"Anybody with a job is not able to sit here for days. So you are left with the sharks," she said.

Opinions were divided on whether the investors buying lots and homes by the dozen were a sign of better times ahead.

"They weren't here two years ago. So why are they here now? Unless, as speculators, they believe this is the bottom," said Keith of the Wayne County treasurer's office.

Bill Frank, a Detroit realtor trying to buy a small house for a just-married friend, found himself repeatedly outbid.

"Speculators are often not good for a city and, from my experience, they are going to lose a fortune," he said. "But there are no easy answers. It's a declining city."

Nine Thousand Homes and Lots at Auction; Detroit: A City for Sale and Very Few Takers
The Collapse of Detroit: Ground Zero for the Globalist’s Deindustrialization Agenda
Detroit is a case-in-point example of the staged-collapse of America’s economy which will be covered in a subsequent volume of ‘Fall of the Republic.’ This stage of the game is De-industrialization.



Freedom in America begins with the ownership and free use of private property. The land. The precious land. Theodore Roosevelt began the ideal of setting aside some of the land as a monument for posterity to behold. It was a good idea. The people, collectively, chose to preserve some of the land, to be owned collectively as public land, by the people. For a century now, public land has increased dramatically while private property has diminished. Federal, state, and local governments now own nearly 40% of all the land area in America. How much public land is needed? How much is enough? Moreover, use of the remaining private land is so heavily regulated that the spark of hope is flickering in the eyes of all land owners. - Henry Lamb, The Precious Land, Henry Lamb Columns in 1999, p. 13

In addition to the extraordinary amount of land owned by the federal government, the state and local governments also own and control surprisingly large amounts of property. One study noted that state governments own 196,924,100 acres of land, comprising 8.7% of all land holdings. As of September 1994, the 13 western states owned about 141.9 million acres. Sadly, federal, state, and local governments own fully 39.8% of all the land in this country. - Nancie Marzulla , President, Defenders of Property Rights, Hearing on the American Outdoors Act, S. 2590, July 20, 2004

American Hellholes

The Economic Collapse
April 25, 2011

The U.S. economy is dying and we are heading for the next Great Depression. The talking heads in the mainstream media love to spin the economic numbers around and around and they love to make it sound like the economy is improving, but the truth is that it doesn't take a genius to see what is happening to the U.S. economic system.

All over the nation many of our greatest cities are being slowly but surely transformed into post-apocalyptic wastelands. All over the mid-Atlantic, all along the Gulf coast, all throughout the "rust belt" and all over the entire state of California cities that once had incredibly vibrant economies are being turned into rotting, post-industrial hellholes. In many U.S. cities, the "real" rate of unemployment is over 30 percent. There are some communities that will start depressing you almost the moment that you drive into them. It is almost as if all of the hope has been sucked right out of those communities.

If you live in one of those American hellholes you know what I am talking about. Sadly, it is not just a few cities that are becoming hellholes. This is happening in the east, in the west, in the north and in the south. America is literally being transformed right in front of our eyes.

If you still live in an area of the United States that is prosperous, do not mock the cities that you are about to read about. The cold, hard reality of the matter is that economic decline and economic despair are spreading rapidly and they will come to your area soon enough. Right now we are still talking about "American hellholes", but if the long-term economic trends that are destroying this nation are not turned around eventually we will just be talking about one gigantic "American hellhole". In the end, no area of the country will completely escape the economic hell that is coming.

Let's take a closer look at what is currently happening in some of the worst areas of the country....

Detroit, Michigan

In the city of Detroit today, there are over 33,000 abandoned houses, 70 schools are being permanently closed down, the mayor wants to bulldoze one-fourth of the city and you can literally buy a house for one dollar in the worst areas.

During the boom days of the 1950s, Detroit was a teeming metropolis of approximately 2 million people, but today the current population is less than half that. The city of Detroit, once a shining example of middle class America, is now a rotting cesspool of economic decline and it actually saw its population decline by 25 percent during the decade that recently ended. According to the U.S. Census Bureau, Detroit lost a resident every 22 minutes between the years of 2000 and 2010.

So why are people leaving Detroit so rapidly?

There simply are no jobs.

At the height of the economic downturn, the mayor of Detroit admitted that while the "official" unemployment rate in Detroit was about 27 percent, the "real" unemployment rate in his city was actually somewhere around 50 percent.

Since there are not enough jobs, that also means that not enough tax money is coming in. Detroit is essentially insolvent at this point.

Detroit officials are trying to implement some austerity measures in a desperate attempt to get city finances under control.

For example, the state of Michigan recently granted approval to a plan that would shut down nearly half of the public schools in Detroit. Under the plan, 70 schools will be closed and 72 will continue operating.

It has been estimated that the remaining public schools will have class sizes of up to 60 students.

Detroit Mayor Dave Bing also wants to cut off 20 percent of the entire city from police and trash services in order to save money.

Essentially that would mean abandoning 20 percent of the city of Detroit to the gangs and to the homeless.

The mayor of Detroit has also discussed a plan in which authorities would bulldoze one-fourth of the city in order to save money on services.

So with all of this going on, is Detroit a pleasant place to live at this point?

No way.

Today, Detroit is considered to be the third most violent city in the United States.

In fact, crime has gotten so bad and the citizens are so frustrated by the lack of police assistance that they have resorted to forming their own organizations to fight back. One group, known as "Detroit 300", was formed after a 90-year-old woman on Detroit's northwest side was brutally raped in August.

If you want to see what the future of America looks like, just take a few hours and go driving through Detroit some time. But please only do this during the day. Do not do this at night. Detroit is not a safe place anymore, and you cannot count on the police to help you in a timely manner.

Detroit was once one of the greatest cities in the world.

But today it is an absolute hellhole.

Camden, New Jersey

So is there any place in America that is worse than Detroit?

Well, many would nominate Camden, New Jersey.

Many years ago, Camden was actually thriving and prosperous. But today the city of Camden is known as "the second most dangerous city in America".

In a recent article entitled "City of Ruins", Chris Hedges did an amazing job of documenting the horrific decline of Camden. Hedges estimates that the real rate of unemployment in Camden is somewhere around 30 to 40 percent, and he makes it sound like nobody in their right mind would want to live there now....

Camden is where those discarded as human refuse are dumped, along with the physical refuse of postindustrial America. A sprawling sewage treatment plant on forty acres of riverfront land processes 58 million gallons of wastewater a day for Camden County. The stench of sewage lingers in the streets. There is a huge trash-burning plant that releases noxious clouds, a prison, a massive cement plant and mountains of scrap metal feeding into a giant shredder. The city is scarred with several thousand decaying abandoned row houses; the skeletal remains of windowless brick factories and gutted gas stations; overgrown vacant lots filled with garbage and old tires; neglected, weed-filled cemeteries; and boarded-up store fronts.

Gangs have stepped into the gaping void left by industry. In Camden today, drugs and prostitution are two of the only viable businesses left - especially for those who cannot find employment anywhere else. The following is how Hedges describes the current state of affairs....

There are perhaps a hundred open-air drug markets, most run by gangs like the Bloods, the Latin Kings, Los Nietos and MS-13. Knots of young men in black leather jackets and baggy sweatshirts sell weed and crack to clients, many of whom drive in from the suburbs. The drug trade is one of the city's few thriving businesses. A weapon, police say, is never more than a few feet away, usually stashed behind a trash can, in the grass or on a porch.

But before we all start judging Camden for being such a horrible place to live, it is important to realize that this is happening in communities from coast to coast. All over the United States industries are leaving and deep social decay is setting in.

Even the criminals in Camden are struggling. Things have gotten so bad in Camden, New Jersey that not even the drug dealers are spending their money anymore.

So where are the police?

Unfortunately, there is very little money for police. Authorities in Camden recently decided to lay off half of the city police force.

So now the gangs and the drug dealers have more room to operate.

Sadly, this is not just happening in Camden. It is happening all over New Jersey.

Of 315 municipalities the New Jersey State Police union recently surveyed, more than half indicated that they were planning to lay off police officers.

So why doesn't the state government step in and help out?

Well, the state of New Jersey is in such bad shape that they still are facing a $10 billion budget deficit for this year even after cutting a billion dollars from the education budget and laying off thousands of teachers.

New Jersey also has $46 billion in unfunded pension liabilities and $65 billion in unfunded health care liabilities. Nobody is quite sure how New Jersey is even going to come close to meeting those obligations.

Meanwhile, cities like Camden are rotting a little bit more every single day.

New Orleans, Louisiana

New Orleans had a struggling economy even before Hurricane Katrina struck back in 2005. But that event changed everything. It is now almost 6 years later and virtually the entire region is still a disaster zone.

New Orleans permanently lost 29% of its population after Hurricane Katrina. There are many areas of New Orleans that still look as if they have just been bombed.

21.5 percent of all houses in New Orleans, Louisiana are currently standing vacant. Many of those homes will never be inhabited again.

What made things even worse for New Orleans (and for residents all along the Gulf coast) was the horrific BP oil spill last year. The mainstream news does not talk about the oil spill much anymore, but those living in the area have to deal with the effects every single day.

Some of the industries in the Gulf region were really starting to recover from Hurricane Katrina but the BP oil spill put a stop to that.

Before the oil spill, Louisiana produced more fish and seafood than anywhere in the United States except for Alaska. But now the seafood industry has been absolutely devastated. It has been estimated that the cost of the BP oil spill to the fishing industry in Louisiana alone could top 3 billion dollars.

Some local shrimpers in the region are projecting that it will be about seven years before they can set to sea again.

New Orleans keeps trying to bounce back from all of these disasters, but times are tough down there.

Today, New Orleans is the 13th most violent city in America. That is actually an improvement. Before Katrina New Orleans had even more violent crime.

The truth is that other areas along the Gulf coast are doing a lot worse than New Orleans is doing. A ton of big corporate money has flowed into New Orleans. Officials are trying to clean up the city and make it a huge tourist destination once again.

But in the surrounding areas things are not looking so bright. There are areas along the coasts of Louisiana, Mississippi, Alabama and the panhandle of Florida that are some of the most depressing places in the nation.

It is almost as if there are hundreds of thousands of people that time forgot. In some rural areas along the Gulf coast the poverty is absolutely mind blowing. There are very few jobs and there is very little hope. Meanwhile, large numbers of people in the region continue to get sick from the toxic dispersants used to clean up the oil spill.

Let us hope that we don't see another major disaster in the Gulf of Mexico any time soon. As it is, it is going to take decades for that region to fully recover. There are a lot of really good people that live down there, and they deserve our prayers.

Vallejo, California (And Virtually The Rest Of The State Of California)

Almost the entire state of California is an economic disaster zone. Austerity measures are being implemented in city after city as tax revenues have nosedived.

The following is an excerpt from a recent New York Times article that describes the brutal austerity that has been implemented in Vallejo, California....

Vallejo is still in bankruptcy. The police force has shrunk from 153 officers to 92. Calls for any but the most serious crimes go unanswered. Residents who complain about prostitutes or vandals are told to fill out a form. Three of the city’s firehouses were closed. Last summer, a fire ravaged a house in one of the city’s better neighborhoods; one of the firetrucks came from another town, 15 miles away. Is this America’s future?

Sadly, that is what the future of America is going to look like. Public services are being slashed all over the nation due to budget crunches.

Unless there is a major jobs recovery, the situation in California is going to continue to degenerate. The truth is that the state of California needs millions and millions of new jobs just to get back to "normal". For example, near the end of last year it was reported that 24.3 percent of the residents of El Centro, California were unemployed. Not only that, as of the end of last year the number of people unemployed in the state of California was approximately equivalent to the entire populations of Nevada, New Hampshire and Vermont combined.

Businesses are closing in California at an astounding pace. At one point last year it was reported that in the area around Sacramento, California there was one closed business for every six that were still open.

As a result of all of this, home prices in many areas of California have completely fallen off a cliff. For example, the average home in Merced, California has declined in value by 63 percent over the past four years.

California also had more foreclosure filings that any other U.S. state in 2010. The 546,669 total foreclosure filings during the year means that over 4 percent of all the housing units in the state of California received a foreclosure filing at some point during 2010.

Sadly, things don't look like they are going to turn around in California any time soon. Forbes recently compiled a list entitled "Cities Where The Economy May Get Worse".

Six of the top seven spots were held by cities in California.

California is becoming a very frightening place. When you combine high unemployment with unchecked illegal immigration what you get is rampant poverty.

20 percent of the residents of Los Angeles County are now receiving public aid of one form or another.

In particular, the number of children that are considered to be in need of public assistance is truly scary.

Incredibly, 60 percent of all the students attending California public schools now qualify for free or reduced-price school lunches.

Poverty and illegal immigration have also caused a tremendous health care crisis in the state. The hordes of illegal aliens taking advantage of "free" medical care at hospital emergency rooms have caused dozens of hospitals across the state of California to completely shut down. As a result, the state of California now ranks dead last out of all 50 states in the number of emergency rooms per million people.

The bozos in Sacramento keep passing hundreds of new laws in an attempt to "fix" the state, but the truth is that for the poorest residents of the state all of those new laws don't make a shred of difference.

The following is how Victor Davis Hansen describes what he saw during his recent tour of the "forgotten areas of central California"....

Many of the rural trailer-house compounds I saw appear to the naked eye no different from what I have seen in the Third World . There is a Caribbean look to the junked cars, electric wires crisscrossing between various outbuildings, plastic tarps substituting for replacement shingles, lean-tos cobbled together as auxiliary housing, pit bulls unleashed, and geese, goats, and chickens roaming around the yards. The public hears about all sorts of tough California regulations that stymie business - rigid zoning laws, strict building codes, constant inspections - but apparently none of that applies out here.

Hansen also says that he observed that people in these areas are doing whatever they can to get by....

At crossroads, peddlers in a counter-California economy sell almost anything. Here is what I noticed at an intersection on the west side last week: shovels, rakes, hoes, gas pumps, lawnmowers, edgers, blowers, jackets, gloves, and caps. The merchandise was all new. I doubt whether in high-tax California sales taxes or income taxes were paid on any of these stop-and-go transactions.

In two supermarkets 50 miles apart, I was the only one in line who did not pay with a social-service plastic card (gone are the days when "food stamps" were embarrassing bulky coupons).

Are you frightened yet?

You know what they say - "as goes California, so goes the nation".

What is happening in California now is eventually going to come to your area.

Right now California is also having a huge problem with gangs. Gang violence in America is getting totally out of control. According to authorities, there are now over 1 million members of criminal gangs operating inside the country, and those gangs are responsible for up to 80% of the violent crimes committed in the U.S. each year.

But instead of ramping up to fight crime and fight illegal immigration, police forces all over California are being cut back.

For example, because of extreme budget cuts and police layoffs, Oakland, California Police Chief Anthony Batts has announced that there are a number of crimes that his department simply will no longer respond to due to a lack of resources. The following is a partial list of the crimes that police officers in Oakland will no longer be responding to....

• burglary
• theft
• embezzlement
• grand theft
• grand theft: dog
• identity theft
• false information to peace officer
• required to register as sex or arson offender
• dump waste or offensive matter
• loud music
• possess forged notes
• pass fictitious check
• obtain money by false voucher
• fraudulent use of access cards
• stolen license plate
• embezzlement by an employee
• extortion
• attempted extortion
• false personification of other
• injure telephone/power line
• interfere with power line
• unauthorized cable tv connection
• vandalism

Not that Oakland wasn't already a mess before all this, but now how long do you think it will be before total chaos and anarchy reigns on the streets of Oakland?

Today, Oakland is considered the 5th most violent city in the United States.

Will it soon become the most violent?

But Oakland is not the only major California city that is facing these kinds of issues.

Things have gotten so bad in Stockton, California that the police union put up a billboard with the following message: "Welcome to the 2nd most dangerous city in California. Stop laying off cops."

Already the police force in Stockton has been stripped down to almost nothing.

A while back, the Stockton Police Department dropped this bombshell....

"We absolutely do not have any narcotics officers, narcotics sergeants working any kind of investigative narcotics type cases at this point in time."

Do you think drug dealers will be flocking to Stockton after they hear that?

California was once the envy of the world.

Now it is becoming one gigantic hellhole.

During one recent 23 year period, the state of California built 23 prisons but just one university.

So is there any hope for California?

No, unfortunately there is not.

In another article, I wrote about some of the reasons why millions of people have been leaving California for good....

Meanwhile, the standard of living in California is going right into the toilet. Housing values are plummeting. Unemployment has risen above 20 percent in many areas of the state. Crime and gang activity is on the rise even as police budgets are being hacked to the bone. The health care system is an absolute disaster. At this point California has the fewest emergency rooms per million people out of all 50 states. While all of this has been going on, the state legislature in Sacramento has been very busy passing hundreds of new laws that are mostly about promoting one radical agenda or another. The state government has become so radically anti-business that it is a wonder that any businesses have remained in the state. It seems like the moving vans never stop as an endless parade of businesses and families leave California as quickly as they can.

But this is not just a "California thing". The truth is that what is happening in California, in Detroit, in Camden and in hundreds of other communities is also going to happen where you live.

The U.S. economy is slowly dying. Only 66.8% of American men had a job last year. That was the lowest level that has ever been recorded in U.S. history.

People are getting desperate. There are ten percent fewer middle class jobs than there were a decade ago and the competition for good jobs has become insane. More than 44 million Americans are now on food stamps and that number grows every single month. Millions more American families fall into poverty every single year.

It is time to face the truth about what is happening to America. Our economy is not growing and becoming stronger. Rather, the cold, hard reality of the matter is that our economy is very sick and it is dying. The seemingly boundless prosperity that we have enjoyed for decade after decade is coming to an end. Our communities are being transformed into absolute hellholes.

Those that are telling you that the U.S. economy will soon be better than ever are lying to you. The U.S. economy is going to go down and it is going to go down hard.

You better get ready.

War on Carbon Emissions is a War on Individual Liberty

Distrusting Climate Change Globalism

By Anthony Gregory, Campaign for Liberty
October 23, 2009

This December, leaders of the industrialized world will gather in Copenhagen to frame an international strategy against "climate change" to take the place of Kyoto.

Many in the mainstream media would have you believe that someone must be crazy to voice skepticism toward the idea that human carbon emissions cause significant and disastrous global warming.

They don't usually call it "global warming" anymore. The lingo for a few years has been "climate change," since it provides a much more rhetorically strong ground from which to deride skeptics. Lambasting those who "deny climate change" is more compelling than to scoff, "how could you deny the earth is warming?" Especially now that we know it has been cooling for a decade.

So it's cooling now, but the real problem, we are told, is climate change -- as caused by human emissions of carbon -- particularly with an alleged long-term trend toward warming. Real and alleged cataclysms of nature -- everything from Katrina to spiders getting bigger -- has been blamed on our greenhouse gases.

Merely to express doubt of this theory has been called "treason against the planet" by Paul Krugman, who probably speaks for a large segment of left-liberals. It is seen as unseemly, unpatriotic and hysterical to wonder if humans are causing the earth to warm in unsustainable and disastrous ways. Another Nobel Prize winner, Al Gore, even said a year ago that businesses (conveniently ones that compete with his own favored industrial interests) should be censored for voicing doubt on climate change:

"I believe for a carbon company to spend money convincing the stock-buying public that the risk from the global climate crisis is not that great represents a form of stock fraud because they are misrepresenting a material fact," he said. "I hope these state attorney generals around the country will take some action on that."

Scientists who question the common wisdom are marginalized and silenced. It is considered beyond the pale to suggest, for example, that the sun -- that big ball of gas that supports the life of the planet, constituting more than 99% of the solar system's mass -- has much more effect on idiosyncratic temperature changes than human-emitted greenhouse gasses. And the fact that the carbon emissions theory was first seriously advanced by the Margaret Thatcher regime to bolster the case for nuclear power, back when the environmentalists had been worried about a "new ice age"? That's ancient history, and only a loon would bring it up.

The scientific method relies on doubt and the idea of a settled "consensus" is anathema -- although many would have us believe it's unscientific to harbor doubts. But even putting aside the question of scientific fact, there is the policy discussion, and here it makes even more sense that some of us would be skeptical. The extent to which many Americans and people in the developed world are willing to part with their liberty in the hopes that national and global bureaucracies can fine-tune the planet's weather is staggering.

At home the immediate threat is so-called "cap and trade," a scam to legalize and normalize pollution, regulate industry, and impose massive costs onto the American people.

Frighteningly, the opinion that dramatic government intervention is needed to combat the alleged epidemic of human carbon emissions has become prevalent throughout much of political life. Most of the energy and auto industry is behind government action. Its necessity is professed on both sides of the aisle. Mainstream Republicans and, tragically, even personalities in the Religious Right, have been echoing the establishment hysteria.

It was long assumed industry would resist regulation, but the corporatism here is clear. Just as Kyoto was backed by Enron, today's stampede toward climate change collectivism is being hailed by corporate America. Businesses get government privileges, allocated perfectly fairly I'm sure, that allow them to emit carbon. This is inherently unjust. Either carbon emissions are dangerous pollution, and such grants are a permission to commit trespass, or they're not, and it's an obscenity that government would restrict them at all. In any event, such programs are uneconomical and counterproductive.

The bureaucracy, the connected businesses, the political class, the state itself, and much of the establishment stands to gain.

The American people will lose.

"Cap and trade" is an effective tax hike on the middle class and threatens to diminish our economic progress severely. Furthermore, if human carbon emissions are the nuisance that is claimed, warranting the type of worldwide governmental response as is suggested, the consequence would be a wholesale attack on individual liberty in virtually every area.

Since carbon is the essence of life, simply being alive would be framed as a "cost" to the "greater good." Restrictions on consumption, home energy usage, diet, transportation choices, and even family planning could follow. This would require a growing surveillance state and central administration of American life.

Already many misanthropes argue that having too many children is an irresponsible and selfish imposition upon the rest of the world. Will families suffer a one-car policy? A one-child policy? Humanity depends on carbon -- a politicized war on carbon emissions will prove to be a war on human life.

On the international scene, the U.S. used to be the dissenter, heroically refusing to ratify Kyoto during the Clinton administration, but with Obama in power, we may have to hope other nations lead the resistance. It is good news that even in the EU things are not running as smoothly as some would hope. Václav Klaus, president of the Czech Republic, has been one of the world's highest-profile skeptics, for which he's been lambasted in the popular press.

But perhaps those who suffer the most will be the Third World. It has long been fashionable for a dominant political faction -- in this international context, the industrialized nations -- to suddenly discover a moral code that they had long neglected but are no longer constrained by practical concerns to flout, only to inflict it upon those who can not as easily afford it.

The West got rich through an industrial revolution, and yet now many of its celebrated thinkers would deprive these blessings from those just getting started on the path out of ubiquitous and abject poverty. This makes it all the more arrogant and imperialistic for the U.S. to be pressuring China and poorer countries to cut back their own industrial progress in hopes of altering temperatures marginally over the next century.

The popular theory about anthropogenic climate change, when coupled with the policy recommendations currently being contemplated in seriousness, has broad implications for the future of humanity. Taking the steps being proposed could deepen the recession, impoverish millions of Americans, erode our personal liberty, erode the sovereignty of all nations, and deprive nearly half the world's population of its best shot out of the worst kind of poverty.

It is a matter of life and death for so many. And this is all in hopes that a theory which hasn't produced any accurate models is correct that drastic action, over a hundred years, conducted and coordinated by politicians and major industry worldwide, could spare the earth about a degree less in warming - and that degree will make all the difference to the whole planet.

It would seem to me that people should find it natural, not heretical, that many people would look upon all of this with doubt.

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