MarketWatch.com - Pre-Market Indications

Wednesday, January 5, 2011

An Avalanche of Liquidity Threatens Us With Inflation

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With Ben Bernanke as our Shepard how can we go wrong? He tells us quantitative easing is not inflationary. He says that with assurance because he knows all the CPI statistics are as realistic as a Madoff Ponzi scheme. He also tells us he doesn’t create money out of thin air. He fails to mention that he does so digitally. His job is to further enrich the elitists who own the Fed and want to create a new world order. Prices are up 6-3/4% across the board as official inflation has only risen 1.2%.

Unfortunately, the public does not understand, but they will in time, because a great awakening is taking place. We have made more people understand what is going on in just the past five years, than we did in the previous 50 years. People know something is terribly wrong and their minds are open to the truth. That is something the elitists and their media do not understand.

Yes, there is gullibility among the public as to how finance and economics and monetary policy works, and there should be. Most university graduates don’t know how they work either, nor do they really know what psychological warfare and propaganda are all about. The average American doesn’t know what QE2 is nor have they heard of it. If they had they probably could not connect the Fed’s QE2 with the higher inflation they are currently experiencing. That is not their job that is my job and others like me. Even that in fact tends to be confusing because few analysts and economists agree on anything. Needless to say, much of what is happening is going to be devastating in time. Part of the problem is ignorance and part is denial. People do not want to admit they have been deceived, especially by the leadership of their own country. It is akin to lies and deception by a member of your own family or a long-time friend. Today the world changes very rapidly and so do people and governments. Most people do not or have ever studied history much less economic and monetary history. As you can see there is a major dilemma and there are no quick solutions in the discovery process. That is why education via talk radio and the Internet is a slow process.

Over the past six months MZM money supply has zoomed, up some $475 billion. That, of course, has been accompanied by QE2. Conservatively these two are a one-two money bomb that will explode within the US economy. Yes, it will lift the boats, but the inflationary fallout will be painful in lost purchasing power. It will tend to force up interest rates, an area that is difficult for the Fed to control. During this process the US government has to have major funding, as does European countries, especially in the first quarter. Interest rates will rise and corporate borrowing will be crowded out. That also means European buying of US bonds will slow to a trickle and the ECB, European governments and the Fed will be large buyers of multi-government bond. That means major monetization to go along with increasing MZM. Anyone who cannot envision double-digit inflation is missing the boat. Do governments really think that they can get away with their outrageous lies regarding real inflation? We don’t think so. It is and has been so transparently blatant that even Wall Street in part is questioning official CPI, PPI and employment numbers. What is also very discomforting is that employment will only improve marginally, because of the QE and stimulus 2/3’s os aimed at the financial sector. We hear Wall Street and banking tell us over and over again, give us what we want and need or we will take the financial system down. Well, we have news for them. Go right ahead and do that, because they and we know it’s coming down anyway sooner or later. If they do that deliberately it will be very obvious to all and they will pay a horrible permanent price. Hank Paulson may have gotten away with it once, but it won’t happen again. We know how these people think because we have spent more than 50 years among them. All they care about is money, power and world government. If you can understand that they are just common criminals then you know how to deal with them. Just look at the ongoing scandals one after another aided and abetted by the SEC and CFTC and the legions of lawsuits and fines that do not stop their criminal activities. They can neither admit nor deny, they pay a fine and the next day go out and do it again. Very few ever go to jail. Their biggest sin is getting caught in their criminal endeavors.

Most professionals do not understand what is underway and where this is all headed. They only see a positive affect on the stock market. They do not understand that this avalanche of liquidity will also give us 14% inflation this year, damage the dollar and strengthen gold as the only real money. The Fed has abandoned its legal responsibilities to maintain strong employment and to fight inflation. The Fed is in a panic mode struggling to save the financial sector, which is not what its main mission is. It is not supposed to be bailing out the players who caused the problems. They should not be rewarding the malefactors, some of whom own the Fed. This is nothing less than financial incest. Any tightening of monetary policy or strongly higher interest rates could bring the whole creaking edifice crashing down. That leaves the Fed only one course and they have taken that course already, create money and credit until they cannot anymore. This is where this is all headed.

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The Fed’s perception, and that of its masters on Wall Street, is higher commodity prices reflect growth, not coming inflation and a flight to real assets. Inflation officially is 1.2% and the Fed wants it higher. The Fed knows inflation is 6-3/4% and by the end of 2011 it will be 14%. Government will only admit to 5-1/2% and that omits food and energy. If that is so, as they profess, why have government and the Fed for many years suppressed gold and silver prices? The answer, of course, is obvious both government and the Fed perpetually do not tell the truth. The illusion projected by these criminals is that they are saving America when in fact they were the ones who created this mess, and tell us that if we won’t allow them to do what they want they will destroy the system. These denizens of Wall Street, Washington and the Fed as you can see care little for the average America, who has to deal with inflation â€" some on fixed incomes, as their purchasing power is snat ched away by these same people. Thus, the policy of credit and money creation continues unabated as the fed remains ensnared in a trap of its own making.

Americans may not have much interest in gold and silver, but the rest of the world certainly does. India, China, Russia, the Middle East and Europe are gobbling them up and this strong off take has been going on for the past three years. Gold has risen some 20% per year annualized for the past 11 years. Obviously there is consternation across the world pertaining to fiat currencies without gold backing. It has now been seven years since all currencies began falling versus gold. As you can see this is no accident or shot in the dark. This is a trend not seen for many years that will turn out to be the greatest bull market in history. The entire world has problems - the US, England, the Continent and eventually the remainder of the world.

We notice daily speeches and press conferences in Europe assuring people the euro will survive. European elitists are terrified because they know their creation, the euro, is finally going to fail. Europe is in denial, but that won’t change anything. The euro’s failure could well be the seminal movement that tips over the elitists’ apple cart, and leaves them with an irreparable mess. As we said many months ago when the European bailout of $1 trillion was proposed that in order to accomplish this they would need in excess of $3 trillion and that was before Belgium’s problems surfaced. Now the great fear is if the solvent countries continue the bailouts will they collapse as well? Could England and the US be far behind? As the ravages continue Germany and France are talking about a new bailout plan along the lines of what Iceland successfully did to solve its financial problems. The play would have bondholders share in the losses. Most of the bondholders are banks, which are already on the edge of insolvency, if not already insolvent. In such an arrangement debt would be restructured probably for $0.30 on the dollar. If the banks refuse to go along with the program many will go bankrupt anyway. Few know it, but when this bailout was being discussed, Greece wanted a restructuring and default at $0.50 on the dollar and the Germans were demanding $0.60. We bet they wish now they had taken $0.50. The Germans are not good poker players. They are logical and linear. All these problems in Europe could come to a head by June, but with a sword dangling over the euro zone, investors are flocking to gold and silver. Most of you are probably too young to remember, but from WWII to 1982 Europeans and their governments were very large gold buyers. Gold flows in the European’s blood stream. The launch was 2-1/2 years ago and now buying on the continent is strongly underway.

Under QE2 the Fed will have to issue $1.6 trillion in money and credit one way or another. That will be stimulus plus QE2 or $2.5 trillion, just as we predicted last May. QE3 will be saved for 2012 and the big US elections.

A goodly part of all these problems that the US has, such as unemployment, a stagnant GDP and a balance of payments deficit is not having tariffs to offset the year of currency manipulation by all other governments. That would put a fast stop to it all. The reason it doesn’t happen is that transnational conglomerates, along with Wall Street and banking, owns our House and Senate, and they have no intention of letting their fat cow get slaughtered. If we had those 42,000 businesses and 8.5 million jobs we lost over the past ten years, we wouldn’t be in the fix we are in. the first step is to stop the President and perhaps the House and Senate from giving these elitist transnational conglomerates another tax holiday for $1.9 trillion, that will cost US taxpayers $600 billion, then force Congress to implement tariffs. That will stop foreign currency manipulators in their tracks. That will devastate China and help keep the dollar from falling from 80 to 40 on the USDX. One thing Ben is right about is that those cheap currencies are killing us and now those countries are dumping dollars as quickly as they earn them instead of buying Treasury and Agency securities. This in addition has in part forced QE2. It’s a way of watering down the US currency and injuring the Chinese because they won’t let their currency strengthen. Is it any wonder silver rose 84%, gold 30% and commodities were big winners last year? Who wants to own depreciating currencies? Investors are getting smart to what is going on. All of Wall Street and other investors are catching on to market manipulation. It is about time. We have been writing and talking about this since 1988.

When all is said and done borrowing money to pay off debt can never work and that is what is going on will end in tears. That is why following today’s major expansion of money and credit, many people will be in even more trouble than they are now. A herd of investors just put almost $700 billion in bonds and they are not going to be happy if rates keep climbing and bonds keep falling. No one is safe in these markets except those in gold and silver shares, coins and bullion.

 Perhaps America should rename itself “The States of America Fraud.” It would certainly be fitting. A revisit to the mortgage fraud is now back in the news. Losses in the trillions of dollars are now history. We wrote about the scam and the top of the real estate boom we predicted that year. As usual few were listening.

As we have reported previously several parties have sued Countrywide for creating totally bogus loans. There are others who were doing the same thing and there is a real probability that many others will lose billions buying back this toxic waste or toxic garbage. We wonder why it took so long for the lawsuits and why wasn’t criminal action taken by regulatory agencies? What about the rating agencies, which are guilty as sin, such as S&P, Moody’s and Fitch? Why, because they were all in on it. The Fed made the payoffs by backing the bad paper, particularly in Europe, which bought 60% of the toxic garbage. That is what the $13.8 trillion the Fed lent was all about. That is why the Fed would not openly divulge who got the money, until forced to by the Bloomberg lawsuit and the demands of the US Federal Appeals court. Every article we see on these issues doesn’t mention what we do. They are trying to cover for the Fed, banking, Wall Street and the government. These purveyors of CDO’s sold them as AAA, when they were BBB. The difference is between a 10 for AAA and 4 for BBB. They lied about everything and the Fed was the major moving party in the scam. Then there was the political and government complicity. Politicians and other government employees were paid off via campaign contributions and other devices. They not only loaded up Fannie, Freddie, Ginnie and FHA, but they paid anyone in sight, prior to 2008 via the subprmie ALT-A scam, but also right up until now. It is still going on. Trillions of dollars were stolen and the government, the taxpayer got left holding the bag. We starting warning people in November of 2004, as we saw the beginning of the top of real estate in June of 2005. It was six months later that Case-Schiller came along and a year later that a few started to talk about it - those who dared to talk about it.

Even though the banks knew through 2007 that the game was up they still were selling this crap to investors. Most of the people involved in these scams had been in the profession for years. They knew exactly what they were doing. Through all the investigations thus far no one has told why he or she did what they did. There has to be a common denominator - someone or something that approved and pushed the issue of deliberate fraud. It cost trillions of dollars and now finally some of the professionals have said, enough is enough, hence the lawsuits. Bank of America could finally be taken down having purchased Countrywide. The numbers in losses could be over $200 billion and overall the buybacks could be over $1 trillion. That does not include the more than $400 billion in losses taxpayers will take via the losses at Fannie Mae, Freddie Mac, Ginnie Mae and FHA. Then there are all the individual and class action and RICO suits to follow. Pursuit criminally has been a farce. T he connected elitists never go to jail â€" they own just about everyone. They have pushed too far. America is headed for inflation, hyperinflation, deflationary depression and that will end in revolution.

 Last week, the end of 2010, saw a very quiet week. “The President’s Working Group on Financial Markets” must have been happy with stock levels for the year. The Dow ended up 11% on the year, S&P 12.8%, Nasdaq 19.2% and the Russell 2000, up 25.3%. Banks rose 0.85%, or 22.2% yoy; broker/dealers 0.1%, or 5.6%; cyclicals 0.5%, or 25.6%; consumers unchanged, or 12.4%; utilities 0.2%, or 0.9%; high tech unchanged, or 14.9%; biotechs fell 1.2% on the week, but rose 37.7% yoy. Gold bullion rose $39.00, the HUI gained 2.4%, or up 33.4% yoy and the USDX fell 1.9% to 78.97, which rose 1.4% yoy.

The two-year T-bill fell 10 bps to 0.54%, the 10-year T-note fell 10 bps to 3.30%, and the 10-year German bund fell 2 bps to 2.96%.

Freddie Mac’s 30-year fixed rate mortgage rose 5 bps to 4.86%, the 15’s rose 5 bps to 4.20%; the one-year ARMs fell 14 bps to 3.26% and the 30-year jumbos rose 9 bps to 5.60%.

Fed credit rose $19.2 billion to a new record $2.408 trillion, up 8.5% yoy. Fed foreign holdings of Treasuries/Agencies fell $0.7 billion to $3.350 trillion. Custody holdings increased by $395 billion in 2010, or by 13.4%.

M2, narrow money supply increased $4.9 billion to a record $8.834 trillion, or 3.6% yoy.

Total money market fund assets jumped $22.4 billion to $2.810 trillion, but for the year assets dropped $483 billion.

Total commercial paper outstanding fell $5 billion to $969 billion, or $201 billion for the year, or 17.2%.

 Manufacturing in the U.S. expanded in December at the fastest pace in seven months, reinforcing signs the expansion is gaining momentum.

The Institute for Supply Management’s index climbed to 57 last month from 56.6 in November, the Tempe, Arizona-based group said today. A reading greater than 50 points to expansion, and the figure matched the median forecast of economists surveyed by Bloomberg News.

Construction spending in the U.S. rose in November for a third straight month, boosted by funding for homebuilding and federal government projects.

The 0.4 percent increase exceeded the median forecast of economists surveyed by Bloomberg News and followed a 0.7 percent gain the previous month, Commerce Department figures showed today in Washington. The median estimate called for a 0.2 percent rise.

Stimulus funding spurred government spending on schools, office buildings and water supply plants in November, while tight credit and high vacancy rates restrained private investment in factories and communications facilities. Outlays on home improvements and construction, backed by low lending rates and pent-up demand, is also sustaining the industry.

“Public spending will increase as the stimulus funds are put to use,” Michelle Meyer, a senior economist at Bank of America Merrill Lynch Global Research in New York, said before the report. “Residential will grow next year but only marginally, while commercial construction will continue to be a drag.”

The median forecast was based on 44 projections in a Bloomberg survey. Estimates ranged from a drop of 0.8 percent to a 0.7 percent increase.

Construction spending decreased 6 percent in the 12 months ended in November.

Private construction spending climbed 0.3 percent from the previous month. Homebuilding outlays increased 0.7 percent, while private non-residential projects dropped 0.1 percent.

Spending on public construction increased 0.7 percent from the prior month. Federal spending rose 8.2 percent, to reach a record-high $35.3 billion. Outlays by state and local governments dropped 0.1 percent, a second consecutive decline.

Average home prices as measured by the S&P/Case-Shiller indexes have begun dropping again after rising when a government tax incentive was in effect. The group’s 20-city index fell 0.8 percent in October from a year earlier, the biggest year-on-year decline since December 2009. It fell 1 percent from the prior month, and was down 30 percent from its July 2006 peak.

Builders are pulling back. Reports last month showed the housing market is stuck near recession levels. Housing permits fell in November to the third-lowest level on record, while new- home starts rose for the first time in three months, the Commerce Department reported Dec. 16.

Hovnanian Enterprises Inc., the largest homebuilder in New Jersey, on Dec. 22 reported a fourth-quarter loss bigger than analysts expected as revenue fell 19 percent.

“Consumers are clearly waiting to see signs of an economic recovery and job growth before they make their decision to purchase a home,” Chief Executive Officer Ara Hovnanian said on a conference call.

 A court-appointed receiver trying to recover funds for victims of Tom Petters' Ponzi scheme has sued JPMorgan Chase & Co. for more than $300 million, alleging the bank should have known that money it seized from Petters was the result of fraud.

The Minnesota businessman was convicted last year of perpetrating a $3.7 billion Ponzi scheme that counted hedge funds, pastors, missionaries and retirees among its victims. Prosecutors said the one-time owner of Polaroid Holding Co. and Sun Country Airlines orchestrated the plot, but Petters has blamed his associates and is appealing his 50-year prison sentence. JPMorgan, its affiliates and some individuals seized more than $300 million in assets from Petters in the wake of his arrest.

In a new claim filed Wednesday in federal court in Minnesota, receiver Doug Kelley demanded that JPMorgan return $25 million it seized from Petters' accounts just days after the 2008 FBI raid that led to his arrest.

 Over the holidays, many lenders put foreclosures on hold. But that temporary freeze is over now. Industry watchers are expecting thousands of foreclosed properties to hit the market in the weeks and months ahead.

Home foreclosure sales slowed down at the end of 2010 for two reasons: the regular holiday foreclosure freezes, and the remnants of the so-called robo-signing scandal.

In the fall, many lenders put evictions on hold while they reviewed their foreclosure procedures. Rick Sharga of RealtyTrac says that's behind us now and the pace of foreclosure is about to pick up.

"I'd be really, really surprised if we didn't see a probably record quarter in the first quarter of this year," he says.

Sharga expects banks to repossess close to 100,000 homes in January alone.

"We always have a seasonal uptick in the first quarter," he says, "and I think it will be accelerated because of delays that the servicers will be making up for in the first couple months." Real estate agents are bracing themselves for an increasing number of vacant homes waiting for buyers.

But Lawrence Yun, chief economist at the National Association of Realtors, says it doesn't come as a surprise.

"These properties will come onto the market, that is a given," he says.

Yun says there is a massive shadow inventory homes not yet on the market where the owners are more than 90 days behind on their payments.

"It's just inevitable that they will go into a foreclosure," he says.

But Yun says he doesn't expect all of those properties to get dumped onto the market in a single month. It will be gradual. But the question is whether the already fragile housing market will be able to handle them.

"Hopefully the improving economy, job creation, will provide the necessary housing demand to absorb the shadow inventory that will be reaching the market," he says. But will there be buyers out there for all of those homes? Yun says he's hopeful, but other economists aren't so sure. Most predict the unemployment rate will remain near 9 percent throughout 2011. People who are unemployed or worried about keeping their jobs aren't going to buy homes.

And then there's the issue of loans. Mortgage lenders have so tightened their credit standards that now, even people with relatively good credit scores are having a hard time borrowing the money they need to buy a house.

 New York Attorney General Andrew M. Cuomo said four insurers, including Zurich Financial Services AG and Ace Ltd., agreed to pay almost $120 million to settle claims they collected too much in workers’ compensation fees.

Pennsylvania Manufacturers’ Association Insurance Co. and CNA Financial Corp. also entered into the settlement, Cuomo said today in an e-mailed statement.

“These four groups of insurance companies have done the responsible thing by agreeing to resolve their disputes with the state,” Cuomo said in the statement. “Other insurers who still retain excess funds should follow their lead or they will be brought to justice.”

The state Workers’ Compensation Board charges annual fees to workers’ compensation insurers, and insurers cover these costs by collecting a surcharge on premiums from policyholders, Cuomo said.

The board changed its formula for calculating surcharges in 2000, Cuomo said. Some insurers collected too little in surcharges from their policyholders, while others -- including ACE, Zurich, Pennsylvania Manufacturers, and CNA -- collected too much. Laws were changed to prevent the overcharging, Cuomo said.

Under the settlements, the Ace companies agreed to pay $70 million, the Zurich companies $37.5 million, the Pennsylvania Manufacturer companies $5.9 million, and the CNA companies $5.75 million, according to Cuomo.

“Tax-exempt municipal bonds are heading for their worst quarterly performance in more than 16 years as yields soared amid a U.S. Treasury selloff and the looming expiration of Build America Bonds.  Municipal investments have lost 4.5% this quarter through Dec. 27.”

“Corporate bond sales worldwide topped $3 trillion for a second straight year, led by the highest-ever issuance of junk-rated debt…  Ally Financial Inc., Ford Motor Credit Co. and 509 other speculative-grade companies sold $287 billion of debt in the U.S., smashing the previous record of $162.7 billion in 2009…  Yields on investment-grade corporate bonds worldwide fell to an average of 3.36% on Oct. 11, the lowest ever level for the daily data that began in 1996…  Companies in the U.S. sold $844 billion of investment-grade bonds denominated in dollars this year, a 21% decline from 2009, as borrowers built a $1.17 trillion cash hoard, the most on record.

Leveraged-loan issuance in the U.S. more than doubled this year.  More than $369 billion of loans were raised as of Dec. 28 up from $170 billion in 2009. Interest rates fell to 3.91 percentage points more than the London interbank offered rate on average, from 10.28 percentage points at the end of 2009.

Bond offerings tied to automobile loans and leases are poised to dominate sales of asset-backed debt for a third straight year in 2011 after issuance of all types of the securities plunged 31% in 2009.  Vehicle debt bundled into securities will likely total from $70 billion to $75 billion, up as much as 23% from 2010. According to Barclays Capital. Bond sales linked to auto and education loans, and credit cards may reach $115 billion in 2011. Total issuance fell to $92 billion this year from $134 billion as banks relied more heavily on deposits to fund credit card lending and the Federal Reserve ended its Term Asset-Backed Securities Loan Facility.

Marc Faber said, U.S. Treasuries are a ‘suicidal’ investment.  Government bonds are likely to decline, said Faber, who publishes the Gloom, Boom and Doom report. This is a suicidal investment,’ Faber said. ‘Over time, interest rates on U.S. Treasuries will go up. Investors will gradually understand that the Federal Reserve wants to have negative real interest rates. The worst investment is in U.S. long-term bonds.

U.S. health-insurance costs are rising more quickly than the ability of U.S. families to pay and the gap is widening, according to the Commonwealth Fund.  private-insurance premiums for families rose three times faster than median household income over six years. Deductibles rose almost five times faster, the fund said.  ‘Families are being priced out of the market,’ said Cathy Schoen, an economist with the fund. The consequences are less adequate insurance coverage, costlier insurance coverage, higher rates of no coverage and growing stress on the family.

The cost of insuring Illinois’s bonds against default rose to the highest level in five months as the state headed for the new year without a plan to finance a $3.7 billion pension-fund contribution.  The cost of credit-default swap insurance on the lowest-rated state after California has risen 16% to $330,000 to protect $10 million of debt.

Illinois Governor Pat Quinn is considering borrowing $15 billion to pay overdue bills and balance the biggest budget deficit in the state’s history.  The plan is among a range of proposals that Quinn is discussing with state lawmakers as they prepare to return to Springfield Jan. 3 for the final days of the legislative session. Illinois faces a budget shortfall of at least $13 billion because of declining tax revenue.

Indiana cities would be allowed to file for Chapter 9 bankruptcy protection under a bill touted by Republican Gov. Mitch Daniels.  Daniels this week called the measure - Senate Bill 150 - a ‘useful mechanism’ for helping fiscally stressed cities that would help provide clarity on the topic of municipal bankruptcy.

Detroit has filed its annual audit on time for the first time in five years.  The 237-page financial report warns that the city faced a total deficit of $1.6 billion as of June 30. The deficit grew by $692 million over the previous year, the bulk of which was due to a change in accounting rules that requires governments to now report expected future costs of derivatives.

Home prices dropped more than forecast in October, a sign housing will remain a weak link as the U.S. recovery accelerates into the new year.  The S&P/Case-Shiller index of property values fell 0.8% from October 2009, the biggest year-over-year decline since December 2009.  A wave of foreclosures waiting to reach the market means home prices will remain under pressure in 2011, representing a risk to household finances. Federal Reserve policy makers this month said ‘depressed’ housing and high unemployment remained constraints on consumer spending, reasons why they reiterated a plan to expand record monetary stimulus.”

 

Monday on Fox news they learned that the staffers of Congress family members are exempt from having to pay back student loans. This will get national attention if other news networks will broadcast it. When you add this to the below, just where will all of it stop? For too long we have been too complacent about the workings of Congress. Many citizens had no idea that members of Congress could retire with the same pay after only one term, that they specifically exempted themselves from many of the laws they have passed (such as being exempt from any fear of prosecution for sexual harassment) while ordinary citizens must live under those laws. The latest is to exempt themselves from the Healthcare Reform... in all of its forms. Somehow, that doesn't seem logical. We do not have an elite that is above the law. I truly don't care if they are Democrat, Republican, Independent or whatever. The self-serving must stop.If each person that receives this will forward it on to 20 people, in three days, most people in The United States of America will have the message. This is one proposal that really should be passed around.           Proposed 28th Amendment to the United States Constitution: "Congress shall make no law that applies to the citizens of the United States that does not apply equally to the Senators and/or Representatives; and, Congress shall make no law that applies to the Senators and/or Representatives that does not apply equally to the citizens of the United States."

 

Californians will welcome 725 new laws on Jan. 1. Here's a glance at some of the laws taking effect when you ring in the new year: http://lamesa.patch.com/articles/there-outta-be-a-law-californians-getting-725-new-ones-in-2011

 

AB 119 prevents insurance companies from charging different rates for men and women for identical coverage.

SB 782 prevents landlords from evicting tenants who are victims of domestic or sexual abuse or stalking.

AB 1844â€"informally known as Chelsea's Law and authored by local Assemblyman Nathan Fletcherâ€"will increase penalties, parole provisions and oversight of sex offenders, including a "one-strike, life-without-parole penalty" for some. _

AB 1871 allows people to lease out their cars when they are not being usedâ€"alleviating the need to purchase additional insurance.

AB 537 will make food stamps an acceptable form of payment at farmers markets through an EBT process.

SB 1411 makes it a misdemeanor to maliciously impersonate someone via a social media outlet or through e-mails._

SB 1317 allows the state to slap parents with a $2,000 fine if their K-8 child misses more than 10 percent of the school year without a valid excuse. It also allows the state to punish parents with up to a year in prison for the misdemeanor_._

AB 715 makes a change to the California Green Building Standards code. The change will require new California buildings to be energy efficient.

SB 1449 makes the possession of up to one ounce of marijuana an infraction with a penalty of a $100 fine.

AB 12 allows foster youth to acquire state services until the age of 21.

SB 1399 allows California to medically parole state prison inmates with physical incapacitating conditions and ultimately_ shifts some of the cost of care to the federal government.

AB 97 bans the use of trans-fats in food facilities.__

 

Itemize your tax deductions? Itching for a refund? You're going to have to wait.

The IRS said that it needs until mid- to late-February to reprogram its processing systems because Congress acted so late this year cleaning up the tax code. The bill, which includes deductions for state and local sales taxes, college tuition and teacher expenses, wasn't signed into law until Dec. 17.

The bill ensured that the federal income tax rates would not change, and itemized deductions will continue to be allowed in full for high-income taxpayers.

As a result, the 50 million taxpayers who itemize their deductions will have to hold off for a bit before they file. Of course, not everyone files early: only about 9 million of the 140 million U.S. tax filers filed in January or February of last year.

"The majority of taxpayers will be able to fill out their tax returns and file them as they normally do," said IRS Commissioner Doug Shulman in a statement. "The IRS will work through the holidays and into the New Year to get our systems reprogrammed and ensure taxpayers have a smooth tax season."

The delay affects both paper and electronic filers who itemize deductions on Form 1040 Schedule A. That includes those claiming the new Educator Expense Deduction, which credits grade school teachers for out-of-pocket expenses of up to $250.

It also includes those claiming deductions for college students, covering up to $4,000 of tuition, which is claimed on Form 8917, though the IRS said there will be no delays for those that claim other education tax credits.

Though itemizers can work on their tax returns before the IRS is ready to accept them, the government said people should not send them in before it is ready to process the returns.

The IRS hasn't yet said exactly what day it will be able to begin processing the impacted tax returns, but it expects to announce that date "in the near future."

Meanwhile, TurboTax said its customers can e-file with the company as early as Jan. 6, and it will hold onto the filings until the IRS is ready to process them. 

"John Williams of Shadow Government Statistics says that if the federal government would have used GAAP accounting standards to calculate the federal budget deficit for 2009, it would have been approximately 8.8 trillion dollars <http://www.shadowstats.com/article/hyperinflation-2010  and that there is simply no way out of all this debt...

The government’s finances not only are out of control, but the actual deficit is not containable.  Put into perspective, if the government were to raise taxes so as to seize 100% of all wages, salaries and corporate profits, it still would be showing an annual deficit using GAAP accounting on a consistent basis. In like manner, given current revenues, if it stopped spending every penny (including defense and homeland security) other than for Social Security and Medicare obligations, the government still would be showing an annual deficit. Further, the U.S. has no potential way to grow out of this shortfall."

 

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