Freedomshift

If you were interested in learning about the conditions that conspired to create the great American housing bubble which burst in spectacular fashion in 2008 and brought the entire global financial system to its knees, you might start by reading the history of Fannie and Freddie, or you might take a hard look at Blythe Masters and the wizards who created the credit default swap, or, if you wanted to save yourself quite a bit of time and effort, you could just look at the current market for subprime auto loans. You see, the much maligned "originate to sell" model - which was instrumental in making the American homeownership dream a reality for underqualified borrowers in the lead up to the crisis - is alive and well and is 'in the driver’s seat' so to speak when it comes to auto sales in America. Read more: here

- U.S. state budgets rely on “faulty practices” – Volcker - Shoddy budget practices push costs to future generations - Faulty budget practices lead to poor policy making - “Problems hidden by lack of truth and integrity” – Volcker - No common definition of balanced budget allows for gimmicks The highly regarded former chairman of the Federal Reserve, Paul Volcker, has severely criticized the State Governments in the U.S. over “faulty practices” used to devise budgets which mask the true financial position of those states. Read more: here

To be sure, the good folks at Santander Consumer and American Credit Acceptance (among others) are doing everything they can possibly do to get underqualified borrowers into used cars even if it means extending terms that will land some of these proud new owners in vehicles they absolutely cannot afford given their financial circumstances. This is all made possible of course by the Wall Street securitization machine which has churned out some $5 billion in subprime auto-backed issuance YTD, with a recent deal from Santander Consumer (DRIVE 2015-A) marking the lender’s return to the frightening world of “ deep ” subprime. As a reminder, here are two recent ABS deals which epitomize what’s wrong with this industry: From American Credit Acceptance… Read more: here

While by now everyone should know the answer, for those curious why the US unemployment rate just slid once more to a meager 5.9%, the lowest print since the summer of 2008, the answer is the same one we have shown every month since 2010: the collapse in the labor force participation rate, which in September slid from an already three decade low 62.8% to 62.7% - the lowest in over 36 years, matching the February 1978 lows. And while according to the Household Survey, 232,000 people found jobs, what is more disturbing is that the people not in the labor force, rose to a new record high, increasing by 315,000 to 92.6 million! And that's how you get a fresh cycle low in the unemployment rate. Read more: here

Several months ago, when Russia announced the much anticipated "Holy Grail" energy deal with China, some were disappointed that despite this symbolic agreement meant to break the petrodollar's stranglehold on the rest of the world, neither Russia nor China announced payment terms to be in anything but dollars. In doing so they admitted that while both nations are eager to move away from a US Dollar reserve currency, neither is yet able to provide an alternative. This changed in late June when first Gazprom's CFO announced the gas giant was ready to settle China contracts in Yuan or Rubles, and at the same time the People's Bank of China announced that its Assistant Governor Jin Qi and Russian central bank Deputy Chairman Dmitry Skobelkin held a meeting in which they discussed cooperating on project and trade financing using local currencies. The meeting discussed cooperation in bank card, insurance and financial supervision sectors. And yet, whil...

Prosperity Requires Privacy Privacy is a prerequisite for a prosperous economy.    Even the White House admits : People must have confidence that data will travel to its destination without disruption. Assuring the free flow of information, the security and privacy of data, and the integrity of the interconnected networks themselves are all essential to American and global economic prosperity , security, and the promotion of universal rights. Here are four ways mass surveillance hurts our economy ... Read more: here

It was almost inevitable: a week after we wrote " From Rothschild To Koch Industries: Meet The People Who "Fix" The Price Of Gold " and days after " Barclays' Head Of Gold Trading, And Gold "Fixer", Is Leaving The Bank ", earlier today the UK Financial Conduct Authority finally formalized what most in the "tin-foil" hat community had known for years, when it announced that it fined Barclays £26 million for manipulating "the setting of the price of gold in order to avoid paying out on a client order." Furthermore, the FCA confirmed that those inexplicable gold raids which come as if out of nowhere, and slam gold with a vicious force so strong sometime they halt the entire market, had a very specific source: Barclays , whose trader Daniel James Plunkett, born 1976 , "sent out a burst of orders aimed at moving the price of the yellow metal." Read more: here

"Loan forgiveness creates incentives for students to borrow too much to attend college, potentially contributing to rising college prices for everyone," is a study's warning over government plans that allow students to rack up big debts and then forgive the unpaid balance after a set period. As WSJ reports , enrollment in student debt forgiveness plans have surged nearly 40% in just six months, to include at least 1.3 million Americans owing around $72 billion . The administration is looking to cap debt eligible for forgiveness, as President Obama's revamped Pay As You Earn scheme has seen applications soar and is estimated to cost taxpayers $14bn a year. The 'popularity' of the student loan bailout plan surged after Obama promoted it in 2012, and now the administration must back-track as costs have massively outpaced government predictions. More: here

As if there was any surprise that Yellen was fundamentally an uber dove, she just confirmed it. Here are the key highlights from her speech from Bloomberg. YELLEN SEES `CONSIDERABLE SLACK' IN ECONOMY, LABOR MARKET YELLEN SAYS QE TAPER DOESN'T MEAN REDUCED STIMULUS COMMITMENT YELLEN SAYS ECONOMY, JOB MARKET ` ARE NOT BACK TO NORMAL HEALTH ' YELLEN SAYS FED SHORT OF REACHING EMPLOYMENT, INFLATION GOALS YELLEN SAYS POST-CRISIS LABOR MARKET STRENGTHENED CONSIDERABLY YELLEN SAYS FED TAKES ITS 2% INFLATION GOAL `VERY SERIOUSLY' YELLEN SAYS DECLINE IN JOBLESS `GRADUAL BUT REMARKABLY STEADY' YELLEN SAYS ECONOMY NEEDS EXTRAORDINARY SUPPORT FOR `SOME TIME' Read more: here

While the FT promptly retracted an article on precisely the topic of gold manipulation from earlier this week ( recorded for posterity here ), Bloomberg appears to not have had the same "editorial" concerns and pressures, and today released an article once again slamming the final conspiracy theory that while every other asset class is manipulated, gold is in a pristine class of its own, untouched by close-banging, price fixing traders or central bankers, and reports that "the London gold fix, the benchmark used by miners, jewelers and central banks to value the metal, may have been manipulated for a decade by the banks setting it, researchers say. " Read more: here

"The bank is looking for opportunities to stem its revenue decline as overall mortgage lending volume plunges. It believes it has worked through enough of its crisis-era mortgage problems, particularly with U.S. home loan agencies, to be comfortable extending credit to some borrowers with higher credit risks. The small steps from Wells Fargo could amount to a big change for the mortgage market. After the subprime mortgage bust brought the banking system to the brink of collapse in the financial crisis, banks have shied away from making home loans to anyone but the safest of consumers. Any loosening of credit standards could boost housing demand from borrowers who have been forced to sit out the recovery in home prices in the past couple of years, but could also stoke fears that U.S. lenders will make the same mistakes that had triggered the crisis." and ........ "So far few other big banks seem poised to follow Wells Fargo's lead, but some smaller...

China just dropped an absolute bombshell, but it was almost entirely ignored by the mainstream media in the United States.  The central bank of China has decided that it is "no longer in China’s favor to accumulate foreign-exchange reserves".  During the third quarter of 2013, China's foreign-exchange reserves were valued at approximately $3.66 trillion .  And of course the biggest chunk of that was made up of U.S. dollars.  For years, China has been accumulating dollars and working hard to keep the value of the dollar up and the value of the yuan down.  One of the goals has been to make Chinese products less expensive in the international marketplace.  But now China has announced that the time has come for it to stop stockpiling U.S. dollars.  And if that does indeed turn out to be the case, than many U.S. analysts are suggesting that China could also soon stop buying any more U.S. debt.  Needless to say, all of this would be very b...

There is a reason why US consumer revolving (credit card) credit growth is getting lower and lower and lower and at last check posted a mere 0.2% annual increase . That reason is that as the NY Fed disclosed moments ago , federal student loans officially crossed the $1 trillion level for the first time ever. Notably: the quarterly student loan balance has increased every quarter without fail for the past 10 years ! More here

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By: Peter Schiff, CEO of Euro Pacific Capital The Fed's failure today to announce some sort of tapering of its QE program, despite the consensus of an overwhelming percentage of economists who expected action, once again reveals the degree to which mainstream analysts have overestimated the strength of our current economy. The Fed understands, as the market seems not to, that the current "recovery" could not survive without continuation of massive monetary stimulus. Mainstream economists have mistaken the symptoms of the Fed's monetary expansion, most notably rising stock and real estate prices, as signs of real and sustainable growth. But the current asset price bubbles have nothing to do with the real economy. To the contrary, they are setting up for a painful correction that will likely be worse than the one we experienced five years ago. Given the strong anticipation for a taper announcement, today's relief rally should come a...

http://www.zerohedge.com/news/2013-05-07/visualizing-collapse-fiat-currencies