Would America be a better place without Goldman Sachs? Of course it would. The “vampire squid” of Wall Street does not care about the future of America. Sadly, Goldman Sachs apparently does not even care much about their own clients. What Goldman Sachs is all about is making as much money as humanly possible. In the end, there is nothing wrong with making money, but there are constructive ways to make money and there are destructive ways to make money. Unfortunately, Goldman Sachs seems to find the destructive path almost irresistible. Greg Smith, the head of the U.S. equity derivatives business for Goldman Sachs in Europe, the Middle East and Africa made headlines all over the world on Wednesday when he resigned publicly from Goldman Sachs in a scorching editorial in the New York Times. Smith said that he could “honestly say that the environment now is as toxic and destructive as I have ever seen it”. Considering what we know has gone on at Goldman over the past decade, that is very frightening to hear. So could this be the beginning of the end for Goldman Sachs? And if it is, will America be a better place when Goldman is gone? (Read More...)
Why Are Millions Of Americans Preparing For Doomsday?
All over America, there are millions of Americans that are quietly preparing for doomsday. They are turning spare rooms into long-term food storage pantries, they are planting survival gardens, they are converting their homes over to alternative sources of energy, they are taking self-defense courses and they are stocking up on just about anything you can imagine. They are called “preppers”, and their numbers have absolutely exploded in recent years. In fact, you might be living next door to one and never even realize it. According to a recent Daily Mail article, there are approximately 3 million preppers in the United States today. Others believe that the true number is significantly higher than that. This movement has become so popular that there are now even television shows being done about preppers. The most popular is probably “Doomsday Preppers” on the National Geographic Channel. This movement is still growing and is not going to go away any time soon. In fact, as the world continues to become even more unstable it is likely that a lot more Americans will find themselves becoming preppers in the years ahead. (Read More...)
Broken Promises: Pensions All Over America Are Being Savagely Cut Or Are Vanishing Completely
How would you feel if you worked for a state or local government for 20 or 30 years only to have your pension slashed dramatically or taken away entirely? Well, this exact scenario is playing out from coast to coast and in the years ahead millions of elderly Americans are going to be affected by broken promises and vanishing pensions. In the old days, things were much different. You would get hired by a big company or a government institution and you knew that the retirement benefits that they were promising you would be there when you retired in a few decades. Unfortunately, we have now arrived at a time when government institutions and big companies have promised far more than they are able to deliver, and “pension reform” has become one of the hot button issues all over the nation. Many Americans that have been basing their financial futures on their pensions are waking up one day and finding that their pensions are either gone or have been cut back dramatically. According to Northwestern University Professor John Rauh, the latest estimate of the total amount of unfunded pension and healthcare obligations for state and local governments across the United States is 4.4 trillion dollars. America is continually becoming a poorer nation and all of that money is simply not going to magically materialize somehow. So where is that 4.4 trillion dollars going to come from? Well, either pension benefits are going to have to be cut a lot more all over America or taxes will need to be raised dramatically. Either way, we are all going to feel the pain of these broken promises. (Read More...)
Is Germany Actually Preparing To Leave The Euro?
For a long time, most analysts have believed that if someone was going to leave the euro, it would be a weak nation such as Greece or Portugal. But the truth is that financially troubled nations such as Greece and Portugal don’t want to leave the euro. The leaders of those nations understand that if they leave the euro their economies will totally collapse and nobody will be there to bail them out. And at this point there really is not a formal mechanism which would enable other members of the eurozone to kick financially troubled nations such as Greece or Portugal out of the euro. But there is one possibility that is becoming increasingly likely that could actually cause the break up of the euro. Germany could leave the euro. Yes, it might actually happen. Germany is faced with a very difficult problem right now. It is looking at a future where it will be essentially forced to bail out most of the rest of the nations in the eurozone for many years to come, and those bailouts will be extremely expensive. Meanwhile, the mood in much of the rest of Europe is becoming decidedly anti-German. In Greece, Angela Merkel and the German government are being openly portrayed as Nazis. Financially troubled nations such as Greece want German bailout money, but they are getting sick and tired of the requirements that Germany is imposing upon them in order to get that money. Increasingly, other nations in Europe are simply ignoring what Germany is asking them to do or are openly defying Germany. In the end, Germany will need to decide whether it is worth it to continue to pour billions upon billions of euros into countries that don’t appreciate it and that are not doing what Germany has asked them to do. (Read More...)
Greece Has Defaulted – Which Country In Europe Is Next?
Well, it is official. The restructuring deal between Greece and private investors has been pushed through and the International Swaps and Derivatives Association has ruled that this is a credit event which will trigger credit-default swap contracts. The ISDA is saying that there are approximately $3.2 billion in credit-default swap contracts on Greek debt outstanding, and most analysts expect that the global financial system will be able to absorb these losses. But still, 3.2 billion dollars is nothing to scoff at, and some of these financial institutions that wrote a lot of these contracts on Greek debt are going to be hurting. This deal with private investors may have “rescued” Greece for the moment, but the consequences of this deal are going to be felt for years to come. For example, now that Greece has gotten a sweet “haircut” from private investors, politicians in Portugal, Italy, Spain and other European nations are going to wonder why they shouldn’t get some “debt forgiveness” too. Also, private investors are almost certainly going to be less likely to want to loan money to European nations from now on. If they will be required to take a massive haircuts at some point, then why in the world would they want to lend huge amounts of money to European governments at super low interest rates? It simply does not make sense. Now that Greece has defaulted, the whole game is going to change. This is just the beginning. (Read More...)
Not So Fast On That Whole Economic Recovery Thing
Not so fast. Those that are publicly declaring that an economic recovery has arrived are ignoring a whole host of numbers that indicate that the U.S. economy is in absolutely horrendous shape. The truth is that the health of an economy should not be measured by how well the stock market is doing. Rather, the truth health of an economy should be evaluated by looking at numbers for things like jobs, housing, poverty and debt. Some of the latest economic statistics indicate that unemployment is getting a little bit worse, that the housing market continues to deteriorate, that poverty in America continues to soar and that our debt problem is worse than ever. If we were truly experiencing the kind of economic recovery that the United States has experienced after every other post-World War II recession we would see a sharp improvement across the board in most of our economic statistics. But that simply is not happening. Sadly, this is about as much of an “economic recovery” as we are going to get because soon the economy will be getting much worse. So enjoy this period of relative stability while you can. (Read More...)
15 Potentially Massive Threats To The U.S. Economy Over The Next 12 Months
We live in a world that is becoming increasingly unstable, and the potential for an event that could cause “sudden change” to the U.S. economy is greater than ever. There are dozens of potentially massive threats that could easily push the U.S. economy over the edge during the next 12 months. A war in the Middle East, a financial collapse in Europe, a major derivatives crisis or a horrific natural disaster could all change our economic situation very rapidly. Most of the time I write about the long-term economic trends that are slowly but surely ripping the U.S. economy to pieces, but the truth is that just a single really bad “black swan event” over the next 12 months could accelerate our economic problems dramatically. If oil was cut off from the Middle East or a really bad natural disaster suddenly destroyed a major U.S. city, the U.S. economy would be thrown into a state of chaos. Considering how bad the U.S. economy is currently performing, it would be easy to see how a major “shock to the system” could push us into the “next Great Depression” very easily. Let us hope that none of these things actually happen over the next 12 months, but let us also understand that we live in a world that has become extremely chaotic and extremely unstable. (Read More...)
Now THAT Is Cold – 19 Signs That America Is Becoming A Very Heartless Place
The economy is not the only thing that is wrong with America. In order for a society to function smoothly, people need to be able to trust one another and be able to expect that most of their fellow citizens will behave in a somewhat civilized manner. Unfortunately, we are starting to see the very fabric of our society slowly unravel all over the nation. The truth is that America is becoming a very heartless place. People simply do not care about one another the way that they used to in this country. Of course there are many exceptions, but the reality is that millions of hearts are going cold from coast to coast. In America today, we are more self-absorbed than ever, more self-centered than ever, and we are more isolated from others than ever. Just think about the number of people that you personally interact with on a regular basis. Unless you are involved with a very large organization such as a school or a church, it is probably a very limited number. Our addiction to entertainment gives us the illusion of being connected to society, but the truth is that Americans spend less time personally interacting with one another than ever before. Meanwhile, Americans are seemingly becoming more arrogant, more prideful, more angry, more brutal, more greedy and more addicted to pleasure than ever before. When you combine millions of very cold hearts with an economy that is rapidly crumbling, that adds up to a whole lot of trouble in the years ahead. (Read More...)