imc indymedia

Los Angeles Indymedia : Activist News

white themeblack themered themetheme help
About Us Contact Us Calendar Publish RSS
latest news
best of news




A-Infos Radio

Indymedia On Air

Dope-X-Resistance-LA List


IMC Network:

Original Cities africa: ambazonia canarias estrecho / madiaq kenya nigeria south africa canada: hamilton london, ontario maritimes montreal ontario ottawa quebec thunder bay vancouver victoria windsor winnipeg east asia: burma jakarta japan korea manila qc europe: abruzzo alacant andorra antwerpen armenia athens austria barcelona belarus belgium belgrade bristol brussels bulgaria calabria croatia cyprus emilia-romagna estrecho / madiaq euskal herria galiza germany grenoble hungary ireland istanbul italy la plana liege liguria lille linksunten lombardia london madrid malta marseille nantes napoli netherlands nice northern england norway oost-vlaanderen paris/Île-de-france patras piemonte poland portugal roma romania russia saint-petersburg scotland sverige switzerland thessaloniki torun toscana toulouse ukraine united kingdom valencia latin america: argentina bolivia chiapas chile chile sur cmi brasil colombia ecuador mexico peru puerto rico qollasuyu rosario santiago tijuana uruguay valparaiso venezuela venezuela oceania: adelaide aotearoa brisbane burma darwin jakarta manila melbourne perth qc sydney south asia: india mumbai united states: arizona arkansas asheville atlanta austin baltimore big muddy binghamton boston buffalo charlottesville chicago cleveland colorado columbus dc hawaii houston hudson mohawk kansas city la madison maine miami michigan milwaukee minneapolis/st. paul new hampshire new jersey new mexico new orleans north carolina north texas nyc oklahoma philadelphia pittsburgh portland richmond rochester rogue valley saint louis san diego san francisco san francisco bay area santa barbara santa cruz, ca sarasota seattle tampa bay tennessee urbana-champaign vermont western mass worcester west asia: armenia beirut israel palestine process: fbi/legal updates mailing lists process & imc docs tech volunteer projects: print radio satellite tv video regions: oceania united states topics: biotech

Surviving Cities africa: canada: quebec east asia: japan europe: athens barcelona belgium bristol brussels cyprus germany grenoble ireland istanbul lille linksunten nantes netherlands norway portugal united kingdom latin america: argentina cmi brasil rosario oceania: aotearoa united states: austin big muddy binghamton boston chicago columbus la michigan nyc portland rochester saint louis san diego san francisco bay area santa cruz, ca tennessee urbana-champaign worcester west asia: palestine process: fbi/legal updates process & imc docs projects: radio satellite tv
printable version - js reader version - view hidden posts - tags and related articles

Heading for Economic Collapse

by Stephen Lendman Sunday, Jun. 24, 2012 at 9:19 PM

class war

Heading for Economic Collapse

by Stephen Lendman

The late Bob Chapman predicted it years ago. So does Paul Craig Roberts. It could "destroy Western civilization," he believes.

Untenable political and financial decisions put US and European economies on a collision course with disaster. Bailouts and market manipulation delay the inevitable.

A tipping point approaches. Only its timeframe is unknown.

Money power runs world economies. Wall Street and giant European banks run Western societies.

"Financial deregulation converted the financial system (into) a gambling casino....," says Roberts. Zero interest rates destroy household savings. Media scoundrels suppress ugly truths.

Western governments letting banking crooks scam the system for profits "is a system that is headed for catastrophic failure."

Bad news keeps getting worse. Public acknowledgement arrives late. Moody's June 21 downgrade of 15 major banks conceded what's been known for years.

Giant Western banks are zombies. They're insolvent. Taxpayer funded bailouts alone keep them operating. Moody's warned last winter than downgrades were coming. So-called stress tests suppress more than they revealed.

Ellen Brown calls the "derivatives casino....a last-ditch attempt to prop up a private pyramid scheme." It's slowly crumbling under its own weight.

JPMorgan Chase is considered America's most stable bank. Brown calls it bankrupt. Evidence, she says, shows it's acknowledged billion loss perhaps exceeds billion.

Roberts explained that America's five largest banks hold 6 trillion in derivative bets. For example, JPMorgan's total assets approach trillion. Its derivatives holdings exceed trillion. Its risk capital is about 6 billion.

Its "derivative bets are 516 times larger than the capital that covers the bets."

Goldman Sachs "takes the cake," says Roberts. Its trillion in derivatives speculation "is covered by only billion in risk capital."

In other words, its bets are "2,295 times larger than" cash on hand covering them.

Derivatives bets by America's five largest banks exceed US GDP over 15-fold. Corrupt politicians allowing it assure eventual economic collapse.

Banking executives are serial liars. After Moody's downgrades, Citigroup and Bank of America officials said its action failed to reflect "safeguards" in place for years.

Roberts destroyed their argument. So did Brown and other independent analysts.

Moody's and other rating agencies long ago lost credibility. They failed to acknowledge the sub prime crisis until headlines revealed it.

They bogusly call toxic assets safe in return for large fees and big profits.

They're called lagging, not leading indicators. They're many days and dollars short. They're part of the dirty game that scams ordinary people.

RBC Capital Markets analyst Gerard Cassidy said Moody's "action is five years too late."

Stanford University Professor Anat Admati called its downgrades bad news at a time bank "balance sheets are very fragile."

Credit Agricole Securities analyst Mike Mayo said America doesn't have a coherent solution to its banking crisis. Will actions like Moody's make it safer, he asked?

Saying the jury is still out, he doubts it. He also called Thursday's downgrades "unfortunate four years after (a) crisis" that's deepening, not improving.

Evidence shows troubled global banking conditions. Central bank liquidity injections alone prevent collapse. They're running their course. Each new round helps less than previous ones. Ahead they'll be ineffective at a price too great to bear.

They've bailed out banks at the expense of economic growth. Recovery is more distant than earlier. Speculators alone profited. Good times they alone enjoyed are ending.

Economic data show it. The closely watched Markit Eurozone purchasing managers composite index matched May's 46 read. It showed production contracting at the steepest level since June 2009.

Its flash measure dropped from 45.1 in May to 44.8 in June. It reflected a 37-month low. Markit's chief economist, Chris Williamson, said the flash reading "rounded off the weakest quarter for three years."

China's flash PMI fell to 48.1 in June. Manufacturing contracted for the eighth consecutive month. The Fed slashed 2012 and 2013 US growth. Growing numbers of companies are cutting revenue and profit estimates.

Germany's ZEW confidence index plunged to -16.9 from 10.8 in May. It's the largest monthly decline since the 1998 LTCM/Russian debt default crisis.

Moreover, its Ifo business confidence index hit a two-year low, and Italy's consumer confidence plunged to its lowest level since 1996.

US initial jobless claims are rising. On June 21, they reached a 2012 high.

Slowdown is gaining speed. Economic underpinnings look wobbly. In June alone, about 70% of economic reports showed weakness.

The Fed's Operation Twist extension underwhelmed analysts. Officially it's called the Maturity Extension Program. It exchanges short-term debt for longer term holdings. In theory, it's to lower interest rates on 10-year Treasuries. In early June 22 trading, they stood at 1.63%, a near record low.

Housing remains in Depression. In the week ending June 15, mortgage purchase applications plunged 8.5%. Companies keep cutting planned capex expenditures. According to the latest Architectural Billings Index, commercial construction keeps contracting.

Down 22% from their highs, commodity prices entered bear market territory. Oil prices hit an 18-month low. It signals weak demand. Brent fell 8% in one week. It's down 30% from its earlier high.

US factory output reached an 11-month low. Eurozone business activity dropped for the fifth straight month. At a 48.5 read in June, Germany's PMI shows contraction. The Fed's June Philadelphia manufacturing index contracted sharply to -16.6 after dropping 5.8 points in May.

The Jolts (Job Opening/Labor Turnover) survey showed job openings plunged 325,000 in May. It was the steepest drop since Lehman's September 2008 collapse. Only twice before in the past decade did it decline that much. All major categories were affected.

New hires decreased for the second straight month. They're lowest since July 2011. Again all categories showed weakness.

Layoffs keep increasing. Cuts rose in three of the past four months.

Data revisions are mostly negative. Peak levels were reached months ago. The full impact of how weak things are has yet to hit home. So-called recovery is illusion, not reality.

Europe's economic condition is grim. Bailing out Spain gets harder. Economist Jack Rasmus estimates its banks need at least 0 billion, not the publicly announced .75 billion.

He added that hundreds of billions more are needed to rescue Spain's regional and central governments. At issue is who'll supply it. Sick economies can't solve their own problems.

Eurozone ones look to Germany for help. It bears the greatest burden when it's economy is weakening.

Italy's troubled economy combined with its 12-month 29% of GDP sovereign financing burden means it can't contribute much.

Europe's PIIGS (Portugal, Ireland, Italy, Greece and Spain) combined with troubled France have a combined public debt of 200% of Germany's GDP. Its own debt to GDP ratio is 80%.

Simple math says it can't backstop the Eurozone. Bailouts can't continue forever. Debt burdened economies head for collapse. Adding more hastens the timeframe.

Troubled Eurozone economies are so weak that cross-border bank-to-bank lending dried up. ECB chairman Mario Draghi calls inter-bank lending "dysfunctional." It's "not working," he said. As it goes, so does business lending altogether.

Rasmus said these developments show deepening crisis conditions. He blames wrongheaded policy measures.

Austerity when stimulus is needed hit hard. Government revenues are down. So is consumption. Business spending keeps falling. Debt keeps rising. A looming train wreck approaches.

Why should households and economies bear the burden of bailing out crooked banks? Why are too big to fail ones allowed to exist? Why do ordinary people put up with politicians scamming them for personal gain? Why do they elect new bums in place of old ones?

When conditions exceed threshold levels too painful to bear, maybe they'll react the way they should have years ago.

A Final Comment

On June 19, the Global Europe Anticipation Bulletin (GEAB) issued a "red alert." Global conditions are "negative, even catastrophic," it said.

The second half of 2012 may "mark a major inflection point of the global system crisis...."

Day of reckoning time approaches. Putting off "the inevitable comes at a high price...."

"The shock of the autumn (of) 2008 will seen like a small summer storm compared to what('s)" coming. The "world system" will be "shake(n)."

GEAB predicts a conversion of geopolitical and economic shocks. They include more Middle East wars, Afpak chaos, "Gulf countries swept away in the turmoil," America's economy in free fall, major bank insolvencies, and money printing madness ended because it no longer works.

Early summer perhaps is the calm before the storm. If GEAB is right, it won't be pleasant on arrival.

Stephen Lendman lives in Chicago and can be reached at

His new book is titled "How Wall Street Fleeces America: Privatized Banking, Government Collusion and Class War"

Visit his blog site at and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

Report this post as:

Local News


lausd whistle blower A10 11:58PM

Website Upgrade A10 3:02AM

Help KCET and UCLA identify 60s-70s Chicano images A04 1:02PM

UCLA Luskin: Casting Youth Justice in a Different Light A02 11:58AM

Change Links April 2018 A01 11:27AM

Nuclear Shutdown News March 2018 M31 6:57PM

Join The Protest Rally in Glendale on April 10, 2018! M29 7:00PM

Join The Protest Rally in Glendale on April 10, 2018! M29 6:38PM

Spring 2018 National Immigrant Solidarity Network News Alert! M19 2:02PM

Anti-Eviction Mapping Project Shows Shocking Eviction Trends in L.A. M16 5:40PM

Steve Mnuchin video at UCLA released M15 12:34AM

Actress and Philanthropist Tanna Frederick Hosts Project Save Our Surf Beach Clean Ups M06 12:10PM

After Being Told He's 'Full of Sh*t' at School Event, Mnuchin Demands UCLA Suppress Video M02 11:44AM

Resolution of the Rent Strike in Boyle Heights M01 6:28PM

What Big Brother Knows About You and What You Can Do About It M01 3:30PM

Step Up As LAPD Chief Charlie Beck Steps Down F14 2:44PM

Our House Grief Support Center Hosts 9th Annual Run For Hope, April 29 F13 12:51PM

Don’t let this LA County Probation Department overhaul proposal sit on the shelf F13 11:04AM

Echo Park Residents Sue LA Over Controversial Development F12 8:51AM

Former Signal Hill police officer pleads guilty in road-rage incident in Irvine F09 10:25PM

Calif. Police Accused of 'Collusion' With Neo-Nazis After Release of Court Documents F09 7:14PM

Center for the Study of Political Graphics exhibit on Police Abuse posters F07 9:50AM

City Agrees to Settle Lawsuit Claiming Pasadena Police Officer Had His Sister Falsely Arre F04 3:17PM

Professor's Study Highlights Health Risks of Urban Oil Drilling F04 12:42PM

Claims paid involving Pasadena Police Department 2014 to present F04 10:52AM

Pasadenans - get your license plate reader records from police F03 11:11PM

LA Times Homicide Report F03 1:57PM

More Local News...

Other/Breaking News

Biodiversité ou la nature privatisée A20 11:22AM

The Market is a Universal Totalitarian Religion A20 7:14AM

Book Available about Hispanics and US Civil War by National Park Service A19 5:52PM

The Shortwave Report 04/20/18 Listen Globally! A19 4:01PM

The Republican 'Prolife' Party Is the Party of War, Execution, and Bear Cub Murder A19 11:48AM

Neurogenèse involutive A18 9:21AM

Paraphysique de la dictature étatique A16 10:13AM

Book Review: "The New Bonapartists" A16 3:45AM

The West Must Take the First Steps to Russia A14 12:25PM

Théorie générale de la révolution ou hommage à feu Mikhaïl Bakounine A14 3:30AM

The Shortwave Report 04/13/18 Listen Globally! A12 3:50PM

“Lost in a Dream” Singing Competition Winner to Be Chosen on April 15 for ,000 Prize! A12 3:48PM

The World Dependent on Central Banks A12 4:43AM

Ohio Governor Race: Dennis Kucinich & Richard Cordray Run Against Mike DeWine A11 9:40PM

March 2018 Honduras Coup Again Update A10 10:52PM

Apologie du zadisme insurrectionnel A10 3:33PM

ICE contract with license plate reader company A10 1:14PM

Palimpseste sisyphéen A09 11:23PM

Black Portraiture(S) IV: The Color of Silence...Cuba No...Cambridge Yes A09 5:32AM

Prohibiting Micro-Second Betting on the Exchanges A09 4:18AM

Prosecutors treat Muslims harsher than non-Muslims for the same crimes A08 10:33PM

Amy Goodman interview on cell phone safety A08 10:29PM

Mesa, Arizona police officer kills unarmed white man A08 9:50PM

Israeli leaders should be prosecuted for war crimes A08 9:48PM

Paraphysique de l'autorité A08 12:11AM

Two Podcasts on fbi corruption A06 10:13PM

Fbi assassins assault & try to kill DAVID ATKINS A06 7:29PM

EPA Head Scott Pruitt: Of Cages And Sirens A06 2:15PM

More Breaking News...
© 2000-2018 Los Angeles Independent Media Center. Unless otherwise stated by the author, all content is free for non-commercial reuse, reprint, and rebroadcast, on the net and elsewhere. Opinions are those of the contributors and are not necessarily endorsed by the Los Angeles Independent Media Center. Running sf-active v0.9.4 Disclaimer | Privacy