New Website Launched

In anticipation of the publication of my first book "The Financial Physician: How To Cure Your Money Problems and Boost Your Financial Health" (December 2009) I have redesigned the homepage of this website. I will be changing the blog design as well (today or tomorrow).

Make sure you link to this blog via the homepage. This link will no longer bring you to the current blog postings.

Link to the new site now and when we switch over later today you will have the proper link.

Make sure to click on the "members" (will be activated shortly) and register. This free member's section will have special postings, newsletters and excerpts from my book. The introduction from the book will be the first thing available for members only.

You can pre-order the book at Amazon for only $10.19 (I'm almost giving them away at that price)

You can reach me with comments questions and suggestions at my new email lou@thefinancialphysician.com .

All national radio shows will be available in the "Lou TV-Radio Show " box. Also Watch my TV pilot there, we are meeting with a number of networks next week in Los Angeles and hope to make a series of it.

These are exciting times, thanks for sharing them with me. Let me know what you think of the new website.

Here is the new website link :

www.thefinancialphysician.com

Bookmark it and send it to your contact list. Now more than ever it is important to stay informed about what is really happening in the financial world.

Thanks for visting and thanks for your support.

Lou

One Scary Article

Welcome to the new police state. Read this entire article, it will give you chills.-Lou

POLICE STATE, USACops jump on swine-flu power: Shots heard 'round the world

Pandemic bill allows health authorities to enter homes, detain without warrant

A "pandemic response bill" currently making its way through the Massachusetts state legislature would allow authorities to forcefully quarantine citizens in the event of a health emergency, compel health providers to vaccinate citizens, authorize forceful entry into private dwellings and destruction of citizen property and impose fines on citizens for noncompliance.

If citizens refuse to comply with isolation or quarantine orders in the event of a health emergency, they may be imprisoned for up to 30 days and fined $1,000 per day that the violation continues.

Massachusetts' pandemic response bill

"Pandemic Response Bill" 2028 was passed by the Massachusetts state Senate on April 28 and is now awaiting approval in the House.

As stated in the bill, upon declaration by the governor that an emergency exists that is considered detrimental to public health or upon declaration of a state of emergency, a local public health authority, with approval of the commissioner, may exercise the following authorities (emphasis added):

* to require the owner or occupier of premises to permit entry into and investigation of the premises;

*to close, direct, and compel the evacuation of, or to decontaminate or cause to be decontaminated any building or facility, and to allow the reopening of the building or facility when the danger has ended;

*to decontaminate or cause to be decontaminated, or to destroy any material;
to restrict or prohibit assemblages of persons;

*to require a health care facility to provide services or the use of its facility, or to transfer the management and supervision of the health care facility to the department or to a local public health authority;

*to control ingress to and egress from any stricken or threatened public area, and the movement of persons and materials within the area;

*to adopt and enforce measures to provide for the safe disposal of infectious waste and human remains, provided that religious, cultural, family, and individual beliefs of the deceased person shall be followed to the extent possible when disposing of human remains, whenever that may be done without endangering the public health;

*to procure, take immediate possession from any source, store, or distribute any anti-toxins, serums, vaccines, immunizing agents, antibiotics, and other pharmaceutical agents or medical supplies located within the commonwealth as may be necessary to respond to the emergency;

*to require in-state health care providers to assist in the performance of vaccination, treatment, examination, or testing of any individual as a condition of licensure, authorization, or the ability to continue to function as a health care provider in the commonwealth;

*to waive the commonwealth's licensing requirements for health care professionals with a valid license from another state in the United States or whose professional training would otherwise qualify them for an appropriate professional license in the commonwealth;

*to allow for the dispensing of controlled substance by appropriate personnel consistent with federal statutes as necessary for the prevention or treatment of illness;

*to authorize the chief medical examiner to appoint and prescribe the duties of such emergency assistant medical examiners as may be required for the proper performance of the duties of office;

*to collect specimens and perform tests on any animal, living or deceased;

State and local agencies responding to the public health emergency would be required to exercise their powers over transportation routes, communication devices, carriers, public utilities, fuels, food, clothing and shelter, according to the legislation.......


........... to treat individuals exposed to or infected with disease, provided that treatment must not be such as is reasonably likely to lead to serious harm to the affected individual. An individual who is unable or unwilling to submit to vaccination or treatment shall not be required to submit to such procedures but may be isolated or quarantined … if his or her refusal poses a serious danger to public health or results in uncertainty whether he or she has been exposed to or is infected with a disease or condition that poses a serious danger to public health, as determined by the commissioner, or a local public health authority operating within its jurisdiction. (emphasis added)

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Gold and Silver Take Off

SILVER

GOLD

click on charts to enlarge

Major breakout in silver and gold last few days. Is the precious metals market forewarning a dollar collapse and inflation tsunami? A close above $1,000 an ounce on gold for three days will bring in much higher prices. -Lou

Bank CEOs Get Rich On Taxpayer Bailouts

Where is the outrage here? These CEOs ran their banks and the country into the ground, the average guy has lost his job and half of his 401 k and taxpayer bailouts inflate bank stocks and executive's stock options make them rich. This is totally immoral. You have just witnessed the biggest heist in world history. Instead of people robbing banks, the banks have robbed the people.-Lou

TARP CEOs Make More Money Than Almost Everyone Else

Being the CEO of a bank that got bailed out was pretty rewarding before the crisis.
And even after the government rescue, the rewards to the guy at the top only dropped by one-third.

The top five execs at ten of the top 20 TARP banks have enjoyed a combined increase in the value of their stock options of nearly $90 million in the past year, which is better than being the chief exec at an S&P 500 company. (TARP CEOs' comp is 37% higher than that S&P average.) This suggests, however, that the notion that the executives didn't have "skin in the game" is largely mistaken. They had plenty at stake.

The same set of CEOs also had a three-year pay total of $3.2 billion. But that represents a huge drop. They made $1.2 billion in 2006 and 2007, and last year only took in $800 million. So the crisis and bailout crunched their pay totals by about one-third.

From a study by the Institute for Policy Studies:

From 2006 through 2008, the top five executives at the 20 banks that have accepted the most federal bailout dollars since the meltdown averaged $32 million each in personal compensation. One hundred average U.S. workers would have to labor over 1,000 years to make as much as these 100 executives made in three.

Since January 1, 2008, the top 20 financial industry recipients of bailout aid have together laid off more than 160,000 employees. In 2008, the 20 CEOs at these firms each averaged $13.8 million, for a collective total of over a quarter-billion dollars in compensation. These 20 CEOs averaged 85 times more pay than the regulators who direct the SEC and the FDIC.

While the study is interesting, the fact that it includes pre-crisis years and comps set up before the crisis, mitigates some of the impact. It just comes off as the usual "rich getting too rich" complaint. After all, pay did drop by almost one-third at the bailout banks.

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Let's pray this guy is wrong.-Lou

Russian Professor: Collapse Of America Could Begin In Two Months

Paul Joseph Watson Tuesday, September 1, 2009

Russian Professor Igor Panarin says that events are continuing to confirm his doomsday prediction first made over 10 years ago, that the United States will completely collapse like the Soviet Union before the end of 2010, and warns that the chaos could begin to unfold in as little as two months.

Panarin, doctor of political sciences and professor of the Russian Diplomatic Academy Ministry of Foreign Affairs, told journalists during the unveiling of his new book yesterday that President Obama has done nothing to forestall the fast approaching crisis and that it could begin to properly unfold in November.

“Obama is “the president of hope”, but in a year there won’t be any hope,” said Panarin. “He’s practically another Gorbachev – he likes to talk but hasn’t really managed to do anything. Gorbachev at least had been a secretary of a regional communist party administration, whereas Obama was just a social worker. His mentality is totally different. He’s a nice person and talks nicely – but he’s not a leader and will take America to a crash. When Americans understand that – it will be like a bomb explosion.”

Since 1998, Panarin has been warning of a future disintegration of the United States and the collapse of the dollar. The recent election victory for Japan’s Democratic Party is another sign that the economic collapse of the U.S. is imminent, according to Panarin.

“Today I received another confirmation that the collapse of the dollar and the US is inevitable. Japan’s Democratic Party won the election, and I’d like to remind you that its leader [Yukio Hatoyama] has the snubbing of the dollar among his economic plans. In plainer words, he plans to transfer Japan’s monetary reserves from US dollars into another currency. The move will seriously accelerate the dollar’s exchange slump as early as this November. Disintegration will follow shortly,” he said, adding that next year China would also begin to massively dump the dollar and that Russia would begin to sell oil and gas for roubles.

Panarin previously stated that the dollar would eventually be replaced with “a common Amero currency as a new monetary unit”, referring to the Security and Prosperity Partnership agreement between the U.S., Canada and Mexico.

He foresees the U.S. breaking up into six different parts, roughly along lines similar to those of 1865 during the Civil War, “The Pacific coast, with its growing Chinese population; the South, with its Hispanics; Texas, where independence movements are on the rise; the Atlantic coast, with its distinct and separate mentality; five of the poorer central states with their large Native American populations; and the northern states, where the influence from Canada is strong,” according to Panarin.

History Repeating Itself?

click on chart to enlarge

I stumbled upon this chart while surfing the web and thought I would share it with you. This is a chart of the Dow Jones Industrials between 1929 and 1933. Look at the rally on left side of chart after the 1929 crash. It was a 46% bounce off the low. People were feeling optimistic that the worst was over and good times were ahead. They were obviously wrong. There were nice bear market rallies along the way but a brutal bear market took hold over the next two years. Will history repeat itself? Unfortunately, I believe so.-Lou

Welcome to 1984

When I read stuff like this I feel like I'm living in a movie. This is straight out of George Orwell's book 1984 (you should all read it because it's happening right now). This is scary stuff folks.-Lou

Obama White House Has Secret Plan To Harvest Personal Data From Social Networking Websites

Ken Boehm on Mon, 08/31/2009 -

NLPC has uncovered a plan by the White House New Media operation to hire a technology vendor to conduct a massive, secret effort to harvest personal information on millions of Americans from social networking websites.

The information to be captured includes comments, tag lines, emails, audio, and video. The targeted sites include Facebook, Twitter, MySpace, YouTube, Flickr and others – any space where the White House “maintains a presence.”

In the course of investigating procurement by the White House New Media office, NLPC discovered a 51-page solicitation of bids that was filed on Friday, August 21, 2009. Filed as Solicitation # WHO-S-09-0003, it is posted at FedBizzOps.com. Click here to download a 51-page pdf of the solicitation.

While the solicitation specifies a 12-month contract, it allows for seven one-year extensions. It specifies no dollar cap. Other troubling issues include:

extremely broad secrecy terms preventing the vendor from disclosing to the public or the media what information is being captured and archived (page 7, “Restriction Against Disclosure”)
wholesale capturing of comments by non-White House staff on publicly accessible sites
capturing of content of any type (text, graphics, audio, or video)

capturing of comments by both Obama critics and supporters, with no restriction as to how the White House would use the information.

This is the third controversy involving the White House internet operations in less than a month. First, Obama’s New Media operation asked supporters to send information about critics of the White House health care effort to a White House email. This provoked a storm of criticism and the White House retreated. Then large number of people complained of getting email spam from the White House supporting the President’s health care position. Again the White House was forced to back down.

LINK

Here is more on this story

Cities and States Going Broke

As the financial crisis deepens (yes it will deepen regardless of what the media is now saying) states and cities will be financial disasters. Unlike the federal government, cities and states can't print money to fund their deficits. I expect a significant number of municipal bond defaults next year.-Lou

Budget Crisis: City Takes Out $275M Loan

PHILADELPHIA (CBS 3) ― Philadelphia is taking out a short-term loan to help with cash flow as Pennsylvania's budget crisis continues.Mayor Michael Nutter announced Tuesday the city will take out the $275 million loan from JP Morgan Chase. The loan comes with a 3 percent interest rate if paid in full by November 30.

On December 1, the interest rate increases to 8 percent.Mayor Nutter expects the city will re-finance the loan at a lower interest rate in the public markets – once Pennsylvania's budget crisis is solved.Mayor Nutter also said Tuesday that by the end of next week, he will submit a new pension plan to the public agency that oversees the city's pensions. Officials in Harrisburg are forcing the mayor to take that step.

Last week, the State Senate signed off on the mayor's plan to raise the city sales tax by a penny and delay about $150 million worth of pension payments this year – but only if the city cuts the costs of its pensions.Going forward, the city must freeze pension benefits for current workers and reduce pension costs for new workers by 20 percent.

The mayor has said a new pension plan might include some type of 401(k) option to cut costs.Pensions eat up a large share of the city's budget – this year it's expected to be some 12 percent, or $450 million out of a $3.7 billion budget.According to the Pension Board, the city owes pensions to roughly 65,000 workers – but less than half, 29,215 are still on the job. Most of the rest are already retired and collecting those checks.

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Clunker Of A Program: Auto Dealers

Do people really want government to run healthcare? NO!-Lou

Dealers Still Waiting For Clunker Cash

Auto makers will release their monthly sales reports Tuesday and they're expected to show the first year-to-year increase since 2007. While the Cash for Clunkers program is getting all the credit, local car dealers are still waiting for their cash.During the month long program, Billion Automotive sold close to a thousand vehicles but has only been reimbursed for 272 of them.

Vern Eide sold over 200 cars and has only been paid for 27 of them, and that's fueling lots of concerns in the auto industry. Billion Automotive cashed in during Cash for Clunkers, but owner Dave Billion is still waiting for the rest of his money from the government run program, $3.2 million. "I wonder how long they'd wait if I owed them $3.2 million.

I think they'd be at my door or at least my banker's door," Billion said. Even though Billion is beginning to get some of his reimbursement money, he's still concerned because he says there doesn't seem to be any rhyme or reason to the program.

When Cash for Clunkers was first announced, dealers were supposed to be reimbursed within 10 days of a sale. Billion says that hasn't happened. "The program started in July and we haven't gotten paid for cars we sold back then, but then on the other hand we got paid for a car we sold last week. They don't have an accurate format. It's not like they're taking the first deals that were submitted and working those.

I don't know how they're doing it, no idea. I know it's very random" Billion said. Plus, he's had problems getting some vehicles qualified. "We had a situation where we had a submission, they rejected it for multiple reasons. We didn't see anything wrong with it, so we resubmitted it. They rejected, we resubmitted it.

They rejected it, seven times and finally they paid it, and we never changed a single thing on it," Billion said. But Billion thinks he'll get his money eventually, it just may take longer than what the government first said.

LINK

I'll Be Guest On Radio Show This Afternoon

I'll be a guest on Jay Taylor's radio show 3:15 ET Listen live on link below or listen at your leisure

Listen Here:

http://www.modavox.com/voiceamerica/vepisode.aspx?aid=40772

Dr Doom Feeling Gloomy

Not the best way to start your day, but I believe him

"moderator: “last time you were on you said to buy a farm and a gun”

faber: “now you need a machine gun.”

moderator: “is there anything that could possibly derail your incredibly pessimistic scenario?”
faber: “Ahhh, no.”

Yikes

Foreclosures To Soar In Months To Come

FDIC will have to borrow billions to cover bank failures over the next 12 months, make sure your seatbelt is fastened, turbulents ahead.-Lou

Banks Hiding Tsunami of Foreclosures

Source: News Max

U.S. banks face a tsunami of home foreclosures soon, says David Karsbol, chief economist at Saxo Bank.

Homeowners may be faced with no choice and will just stop paying their mortgages, he warns.
“I believe we are about to see a tsunami of foreclosures in the U.S. A lot of homes have been held back because if the banks are foreclosing on them they will have to do a writedown on the mortgages they have on their balance (sheets),” Karsbol told CNBC.

“That’s why they have been reluctant to do so.”

Soon homeowners may be looking around their neighborhoods and realizing that their neighbors have opted to stop paying their mortgages and are living scot free, he said.

“The fact that many homeowners are allowed to stay in their houses without paying on their mortgages begs the question: Why should you pay on your mortgage when your neighbor doesn’t?” Karsbol said.

Rising unemployment in the United States is the main cause behind foreclosures, economists and bankers told the Washington Post. Subprime mortgages are becoming less of a culprit.
"It's a much harder nut to crack, unemployment," says Mark A. Calabria, director of financial regulation studies at the Cato Institute.

"It's much easier to bash lenders than to create jobs."

In 2009, the first three months reported the largest share of foreclosures moved to prime loans from subprime loans, according to the Mortgage Bankers Association.

“Rising unemployment, for the sake of this downturn, has magnified things considerably,” notes John Snyder, manager of foreclosure programs for NeighborWorks, a large housing counseling group.

“It's less about the payment adjustment.”

Market Risk Now Extreme

This is not a sign of a healthy market when wealthy investors want their money back, immediately. I believe that a serious downturn in the stock market is near. I have not been this concerned about the market since last August. The market is fundamentally more overpriced than it was last year at this time. Now is the time to protect yourself by lowering your stock exposure. Now may be your last chance.Lou

A Run On The Funds: Majority Of Cerberus Investors Want Out--Now

When investors or depositors ask for the immediate withdrawal of 71% of their money there is only one thing to call it: a run on the bank.

The selling in the markets is still quiet, and overshadowed by some of the visible bubbles in financial assets and rosy headlines. The bank bailouts are working, but only to produce a false Spring to lure in the last of the greater fools.

The economy is not improving fundamentally, the recovery is not sustainable, and the wealthy insiders are increasingly trying to liquidate investment positions to raise cash and diversify their holdings into cash and hard assets.

Risk is once again being spread from the financial sector to the public, which is what Fed Chairman Greenspan had said was one of the objectives of the Fed in their positions on the regulation of complex financial products. We were assured that the markets were sound, no additional regulation was required, the pensions were adequately funded. And finally when disaster struck and the facade fell away, that a generation's ransom was required by the banks, in order to heal themselves and avert disaster.

And then they took the money for themselves.

"He's mad, that trusts in the tameness of a wolf, a horse's health, a boy's love, or a whore's oath."

The Fool, King Lear And so they have made fools of us all.

Cerberus clients overwhelmingly want outFri Aug 28, 2009

(Reuters) - Cerberus Capital Management has been swamped with redemption requests with the Wall Street Journal reporting that investors are asking to pull out $5.5 billion or 71 percent of assets from its hedge funds.Cerberus last month tried to entice investors into staying with the firm, but found that its clients overwhelmingly wanted to leave, the newspaper reported.

"We have been surprised by this response," Cerberus chief Stephen Feinberg and co-founder William Richter wrote in a letter delivered to clients late on Thursday, according to the newspaper.A spokesman for the firm was not immediately available for comment.

The bulk of investors elected to put their money into a fund that will liquidate hard-to-sell assets over time.The news comes as several prominent hedge fund managers have closed their funds and as investors are less willing to leave their money locked up in potentially risky hedge funds.Last year, when the average hedge fund lost 19%, Partners lost 24.5% percent on investments.

LINK

The Next Shoe To Drop

I have been telling you for some time that defaults on commercial real estate will be the next big challenge for the banking system. Regional banks will be the ones taking the largest hit. Commercial real estate includes office buildings, strip malls, large box stores and full blown malls. The contracting economy is hurting the consumer resulting in declining retail sales.-Lou

Commercial Mortgage Defaults Jump for U.S. Banks

Aug. 31 (Bloomberg) -- The default rate on commercial mortgages held by U.S. banks more than doubled in the second quarter from a year earlier amid falling rents and occupancies for malls, office buildings and warehouses.

Loans that were 90 days or more past due climbed to 2.88 percent of outstanding balances in the second quarter, from 1.18 percent a year earlier, according to New York-based property research firm Real Estate Econometrics LLC. Defaults increased from 2.25 percent in the first quarter.

“A delinquency may have resolved itself two years ago,” said Real Estate Econometrics President and Chief Economist Sam Chandan. “Today, even one missed payment may be more indicative of an underlying problem, so banks have to be very proactive in addressing the issue.”
Banks held $1.087 trillion of commercial property loans in the quarter, up from $1.077 trillion in the previous three months. That’s almost 15 percent of all loans and leases held by banks, Real Estate Econometrics said. Defaults are rising both for lenders who hold commercial mortgages and for bondholders in the $700 billion U.S. market for securities backed by commercial mortgages.

The CMBS market accounts for about 22 percent of the nation’s $3.4 trillion in commercial real estate debt, according to the Real Estate Roundtable. Defaults and late payments on loans bundled into CMBS could surpass 7 percent by the end of this year, research firm Reis Inc. said on July 30.

Falling Behind

Banks are beginning to recognize that more past due commercial property loans are unlikely to be paid in full. Commercial mortgages labeled as “non-accrual” more than doubled in the second quarter from a year earlier, to $27.76 billion, according to Real Estate Econometrics. The figure reflected a 31 percent increase from the previous three months.

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