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Tuesday, December 6, 2011

Iran Shoots down US drone

Why U.S. Unemployment Numbers Are A Fantasy



There is more fantasy in the U.S. employment numbers than in a Harry Potter novel. According to the BLS, the U.S. added 120,000 jobs in November 2011 and the unemployment rate fell by 0.4%. This is not possible. The U.S. economy needs to create approximately 150,000 jobs a month to keep the unemployment rate steady based on new entrants into the labor force (the oft cited 200,000 figure is based on past conditions that are no longer applicable).
According to official sources, the U.S. added 131,000 jobs a month in 2011. This is better than in previous years, but still not enough to reduce the unemployment rate. Yet, the BLS (Bureau of Labor Statistics) claims the unemployment rate is dropping and fell from 9.0% to 8.6% in November. How is this possible? Well, first of all, it isn't. These numbers were created — and "created" is a very appropriate word in this case — by claiming that large numbers of workers left the U.S. labor force. At the same time, the U.S. government has stated that an economic recovery has taken place. A country’s labor force does not shrink during recoveries, it grows. This has not happened during the current U.S. "recovery".
The U.S. labor force had approximately six million fewer workers in November 2011 than it did in November 2007. Four years ago, 146,793,000 people were employed in the U.S. In November 2011, only 140,987,000 had jobs. These numbers make no sense if a recovery has taken place. It does make sense however if there is an ongoing recession and government statisticians have decided to massage the numbers for political reasons.
On the flip side, there were 79,069,00 people not in the labor force in November 2007 and today that number is 86,757,000 — almost eight million greater. The labor force of the U.S. should not be shrinking because the number of students and immigrants looking for jobs exceeds the number of people retiring.
People do leave the labor force though if they have determined that there simply are no jobs to be found. The recent Consumer Confidence survey from the Conference Board indicated that less than 6% of Americans thought jobs were currently plentiful. In November 2011 alone, the BLS claims that the U.S. labor force dropped by almost a net 600,000. This helped reduce the reported unemployment rate to 8.6%.
This form of statistical manipulation is something that might be expected in a corrupt third-world backwater. Apparently, this is the standard that Washington is now adhering to for its statistical reporting. Disclosure: None, Daryl Montgomery Author

22 Reasons Why We Could See An Economic Collapse In Europe In 2012



Will 2012 be the year that we see an economic collapse in Europe?  Before you dismiss the title of this article as "alarmist", read the facts listed in the rest of this article first.  Over the past several months, there has been an astonishing loss of confidence in the European financial system.  Right now, virtually nobody wants to loan money to financially troubled nations in the EU and virtually nobody wants to lend money to major European banks.  Remember, one of the primary reasons for the financial crisis of 2008 was a major credit crunch that happened here in the United States.  This burgeoning credit crunch in Europe is just one element of a "perfect storm" that is rapidly coming together as we get ready to go into 2012.  The signs of trouble are everywhere.  All over Europe, governments are implementing austerity measures and dramatically cutting back on spending.  European banks are substantially cutting back on lending as they seek to meet new capital requirements that are being imposed upon them.  Meanwhile, bond yields are going through the roof all over Europe as investors lose confidence and demand much higher returns for investing in European debt.  It has become clear that without a miracle happening, quite a few European nations and a significant number of European banks are not going to be able to get the funding that they need from the market in 2012.  The only thing that is going to avert a complete and total financial meltdown in Europe is dramatic action, but right now European leaders are so busy squabbling with each other that a bold plan seems out of the question.
The following are 22 reasons why we could see an economic collapse in Europe in 2012....
#1 Germany could rescue the rest of Europe, but that would take an unprecedented financial commitment, and the German people do not have the stomach for that.  It has been estimated that it would cost Germany 7 percentof GDP over several years in order to sufficiently bail out the other financially troubled EU nations.  Such an amount would far surpass the incredibly oppressive reparations that Germany was forced to pay out in the aftermath of World War I.
A host of recent surveys has shown that the German people are steadfastly against bailing out the rest of Europe.  For example, according to one recent poll 57 percent of the German people are against the creation of eurobonds.
At this point, German politicians are firmly opposed to any measure that would place an inordinate burden on German taxpayers, so unless this changes that means that Europe is not going to be saved from within.
#2 The United States could rescue Europe, but the Obama administration knows that it would be really tough to sell that to the American people during an election season.  The following is what White House Press Secretary Jay Carneysaid today about the potential for a bailout of Europe by the United States....
"This is something they need to solve and they have the capacity to solve, both financial capacity and political will"
Carney also said that the Obama administration does not plan to commit any "additional resources" to rescuing Europe....
"We do not in any way believe that additional resources are required from the United States and from American taxpayers."
#3 Right now, banks all over Europe are in deleveraging mode as they attempt to meet new capital-adequacy requirements by next June.
According to renowned financial journalist Ambrose Evans-Pritchard, European banks need to reduce the amount of lending on their books by about 7 trillion dollars in order to get down to safe levels....
Europe’s banks face a $7 trillion lending contraction to bring their balance sheets in line with the US and Japan, threatening to trap the region in a credit crunch and chronic depression for a decade.
So what does that mean?
It means that European banks are going to be getting really, really stingy with loans.
That means that it is going to become really hard to buy a home or expand a business in Europe, and that means that the economy of Europe is going to slow down substantially.
#4 European banks are overloaded with "toxic assets" that they are desperate to get rid of.  Just like we saw with U.S. banks back in 2008, major European banks are busy trying to unload mountains of worthless assets that have a book value of trillions of euros, but virtually nobody wants to buy them.
#5 Government austerity programs are now being implemented all over Europe.  But government austerity programs can have very negative economic effects.  For example, we have already seen what government austerity has done to Greece. 100,000 businesses have closed and a third of the population is now living in poverty.
But now governments all over Europe have decided that austerity is the way to go.  The following comes from a recent article in the Economist....
France’s budget plans are close to being agreed on; further cuts are likely but will be delayed until after the elections in spring. Italy has yet to vote through a much-revised package of cuts. Spain’s incoming government has promised further spending cuts, especially in regional outlays, in order to meet deficit targets agreed with Brussels.
#6 The amount of debt owed by some of these European nations is so large that it is difficult to comprehend.  For example, Greece, Portugal, Ireland, Italy and Spain owe the rest of the world about 3 trillion euros combined.
So what will massive government austerity do to troubled nations such as Spain, Portugal, Ireland and Italy?  Ambrose Evans-Pritchard is very concernedabout what even more joblessness will mean for many of those countries....
Even today, the jobless rate for youth is near 10pc in Japan. It is already 46pc in Spain, 43pc in Greece, 32pc in Ireland, and 27pc in Italy. We will discover over time what yet more debt deleveraging will do to these societies.
#7 Europe was able to bail out Greece and Ireland, but there is no way that Italy will be able to be rescued if they require a full-blown bailout.
Unfortunately, Italy is in the midst of a massive financial meltdown as you read this.  The yield on two year Italian bonds is now about double what it was for most of the summer.  There is no way that is sustainable.
It would be hard to overstate how much of a crisis Italy represents.  The following is how former hedge fund manager Bruce Krasting recently described the current situation....
At this point there is zero possibility that Italy can refinance any portion of its $300b of 2012 maturing debt. If there is anyone at the table who still thinks that Italy can pull off a miracle, they are wrong. I’m certain that the finance guys at the ECB and Italian CB understand this. I repeat, there is a zero chance for a market solution for Italy.
Krasting believes that either Italy gets a gigantic mountain of cash from somewhere or they will default within six months and that will mean the start of a global depression....
I think the Italian story is make or break. Either this gets fixed or Italy defaults in less than six months. The default option is not really an option that policy makers would consider. If Italy can’t make it, then there will be a very big crashing sound. It would end up taking out most of the global lenders, a fair number of countries would follow into Italy’s vortex. In my opinion a default by Italy is certain to bring a global depression; one that would take many years to crawl out of.
#8 An Italian default may be closer than most people think.  As the Telegraphrecently reported, just to refinance existing debt, the Italian government must sell more than 30 billion euros worth of new bonds by the end of January....
Italy’s new government will have to sell more than EURO 30 billion of new bonds by the end of January to refinance its debts. Analysts say there is no guarantee that investors will buy all of those bonds, which could force Italy to default.
The Italian government yesterday said that in talks with German Chancellor Angela Merkel and French President Nicolas Sarkozy, Prime Minister Mario Monti had agreed that an Italian collapse “would inevitably be the end of the euro.”
#9 European nations other than just the "PIIGS" are getting into an increasing amount of trouble.  For example, S&P recently slashed the credit rating of Belgium to AA.
#10 Credit downgrades are coming fast and furious all over Europe now.  At this point it seems like we see a new downgrade almost every single week.  Some nations have been downgraded several times.  For instance, Fitch has downgraded the credit rating of Portugal again.  At this point it is being projected that Portuguese GDP will shrink by about 3 percent in 2012.
#11 The financial collapse of Hungary didn't make many headlines in the United States, but it should have.  Moody's has cut the credit rating of Hungarian debt to junk status, and Hungary has now submitted a formal request to the EU and the IMF for a bailout.
#12 Even faith in German debt seems to be wavering. Last week, Germany had "one of its worst bond auctions ever".
#13 German banks are also starting to show signs of weakness.  The other day, Moody's downgraded the ratings of 10 major German banks.
#14 As the Telegraph recently reported, the British government is now making plans based on the assumption that a collapse of the euro is only "just a matter of time"....
As the Italian government struggled to borrow and Spain considered seeking an international bail-out, British ministers privately warned that the break-up of the euro, once almost unthinkable, is now increasingly plausible.
Diplomats are preparing to help Britons abroad through a banking collapse and even riots arising from the debt crisis.
The Treasury confirmed earlier this month that contingency planning for a collapse is now under way.
A senior minister has now revealed the extent of the Government’s concern, saying that Britain is now planning on the basis that a euro collapse is now just a matter of time.
#15 The EFSF was supposed to help bring some stability to the situation, but the truth is that the EFSF is already a bad joke.  It has been reported that the EFSF has already been forced to buy up huge numbers of its own bonds.
#16 Unfortunately, it looks like a run on the banks has already begun in Europe.  The following comes from a recent article in The Economist....
"We are starting to witness signs that corporates are withdrawing deposits from banks in Spain, Italy, France and Belgium," an analyst at Citi Group wrote in a recent report. "This is a worrying development."
#17 Confidence in European banks has been absolutely shattered and virtually nobody wants to lend them money right now.
The following is a short excerpt from a recent CNBC article....
Money-market funds in the United States have quite dramatically slammed shut their lending windows to European banks. According to the Economist, Fitch estimates U.S. money market funds have withdrawn 42 percent of their money from European banks in general.
And for France that number is even higher — 69 percent. European money-market funds are also getting in on the act.
#18 There are dozens of major European banks that are in danger of failing.  The reality is that most major European banks are leveraged to the hilt and are massively exposed to sovereign debt.  Before it fell in 2008, Lehman Brothers was leveraged 31 to 1.  Today, major German banks are leveraged 32 to 1, and those banks are currently holding a massive amount of European sovereign debt.
#19 According to the New York Times, the economy of the EU is already projected to shrink slightly next year, and this doesn't even take into account what is going to happen in the event of a total financial collapse.
#20 There are already signs that the European economy is seriously slowing down.  Industrial orders in the eurozone declined by 6.4 percent during September.  That was the largest decline that we have seen since the midst of the financial crisis in 2008.
#21 Panic and fear are everywhere in Europe right now.  The European Commission’s index of consumer confidence has declined for five months in a row.
#22 European leaders are really busy fighting with each other and a true consensus on how to solve the current problems seems way off at the moment.  The following is how the Express recently described rising tensions between German and British leaders....
The German Chancellor rejected outright Mr Cameron’s opposition to a new EU-wide financial tax that would have a devastating impact on the City of London.
And she refused to be persuaded by his call for the European Central Bank to support the euro. Money markets took a dip after their failure to agree.
Are you starting to get the picture?
The European financial system is in a massive amount of trouble, and when it melts down the entire globe is going to be shaken.
But it isn't just me that is saying this.  As I mentioned in a previous article, there are huge numbers of respected economists all over the globe that are now saying that Europe is on the verge of collapse.
For example, just check out what Credit Suisse is saying about the situation in Europe....
"We seem to have entered the last days of the euro as we currently know it. That doesn’t make a break-up very likely, but it does mean some extraordinary things will almost certainly need to happen – probably by mid-January – to prevent the progressive closure of all the euro zone sovereign bond markets, potentially accompanied by escalating runs on even the strongest banks."
Many European leaders are promoting much deeper integration and a "European superstate" as the answer to these problems, but it would take years to implement changes that drastic, and Europe does not have that kind of time.
If Europe experiences a massive economic collapse and a prolonged depression, it may seem like "the end of the world" to some people, but things will eventually stabilize.
A lot of people out there seem to think that the global economy is going to go from its present state to "Mad Max" in a matter of weeks.  Well, that is just not going to happen.  The coming troubles in Europe will just be another "wave" in the ongoing economic collapse of the western world.  There will be other "waves" after that.
Of course this current sovereign debt crisis could be entirely averted if the countries of the western world would just shut down their central banks and start issuing debt-free money.
The truth is that there is no reason why any sovereign nation on earth ever has to go a penny into debt to anyone.  If a nation is truly sovereign, then the government has the right to issue all of the debt-free money that it wants.  Yes, inflation would always be a potential danger in such a system (just as it is under central banking), but debt-free money would mean that government debt problems would be a thing of the past.
Unfortunately, most of the countries of the world operate under a system where more government debt is created when more currency is created.  The inevitable result of such a system is what we are witnessing now.  At this point, nearly the entire western world is drowning in debt.
There are alternatives to our current system.  But nobody in the mainstream media ever talks about them.
So instead of focusing on truly creative ways to deal with our current problems, we are all going to experience the bitter pain of the coming economic collapse instead.
The Economic Collapse

Contagion Spreading Fast! No More Time To Wait!




The global contagion is spreading so quickly, it could strike the United States before year end.
It’s the same contagion that began over two years ago in Greece … that hit Ireland and Portugal last year … that slammed into Italy last month … and is now striking down a fifth country: Spain.
Think Spain is too small to be a major factor in our markets? Think again!

Spain’s economy is double the size of Greece’s, Ireland’s and Portugal’s COMBINED.
Spain’s total debts, including mortgages and commercial loans, are large enough to bankrupt all of Europe.
Even if the United States manages to escape a direct contagion attack for a while longer, the impact of Spain’s demise ALONE will explode on global financial markets with a mega-tonnage that’s many times larger than anything we’ve seen so far from Greece.

Worst of all, Spain has simply run out of time. Its death spiral is under way; its plunge into default, virtually unavoidable.

Here are the horrifying facts …
Spain’s unemployment has skyrocketed to 22.6 percent; and among workers under 25, to an astronomical 48 percent!
At least one million people are at risk of losing their homes — the equivalent of nearly seven million people in the U.S.
Homelessness and begging are rampant; labor strikes and street protests, endemic.
And now, the final blow: Global bond investors are dumping Spanish bonds like a hot potato, driving Spain’s borrowing costs through the roof:
Last Nail in the Spanish Coffin
Just in the last few weeks, as the contagion of fear struck Spain, global investors have dumped Spanish bonds in wave after wave of panic selling, driving their prices down and their yields to the highest level in euro history.
Result: The Spanish government now has to pay nearly five full percentage points more than Germany for 10-year money. That’s nearly quadruple the peak level reached during the 2008 debt crisis … and beyond the levels that triggered the collapse of Greece.
Worse, last week, the Spanish government suddenly found itself paying through the nose even for short-term money — a whopping 5.11 percent on its 3-month Treasury bills. That’s more than double what Spain paid just one month earlier … and over FIFTY times more than what the U.S. Treasury pays.

Martin D. Weiss, Ph.D. ~ Money and Markets

Senate Approves Bill that Legalizes Sodomy and Bestiality in U.S. Military




(CNSNews.com) – (Updated) The Senate on Thursday evening voted 93-7 to approve a defense authorization bill that includes a provision which not only repeals the military law on sodomy, it also repeals the military ban on sex with animals--or bestiality.

On Nov. 15, the Senate Armed Services Committee had unanimously approved S. 1867, the National Defense Authorization Act, which includes a provision to repeal Article 125 of the Uniform Code of Military Justice (UCMJ).

Article 125 of the UCMJ makes it illegal to engage in both sodomy with humans and sex with animals.

It states: "(a) Any person subject to this chapter who engages in unnatural carnal copulation with another person of the same or opposite sex or with an animal is guilty of sodomy. Penetration, however slight, is sufficient to complete the offense. (b) Any person found guilty of sodomy shall be punished as a court-martial may direct.”

Family Research Council President Tony Perkins said the effort to remove sodomy from military law stems from liberal Senate Democrats' and President Obama’s support for removing the military’s Don’t Ask Don’t Tell policy.

“It’s all about using the military to advance this administration’s radical social agenda,” Perkins told CNSNews.com. “Not only did they overturn Don’t Ask Don’t Tell, but they had another problem, and that is, under military law sodomy is illegal, just as adultery is illegal, so they had to remove that prohibition against sodomy.”

Perkins said removing the bestiality provision may have been intentional--or just “collateral damage”

“Well, whether it was inadvertent or not, they have also taken out the provision against bestiality,” he said. “So now, under the Uniform Code of Military Justice (UCMJ), there’s nothing there to prosecute bestiality."

Former Army Col. Bob Maginnis said some military lawyers have indicated that bestiality may be prosecutable under another section of the military code of justice – the “catch-all” Article 134 for offenses against “good military order and discipline.”

But don't count on that, he said.

“If we have a soldier who engages in sodomy with an animal – whether a government animal or a non-government animal – is it, in fact, a chargeable offense under the Uniform Code? I think that’s in question,” Maginnis told CNSNews.com.

“When the reader stops laughing, the reader needs to ask the question whether or not this is in the best interests of the government, in the best interests of the military and the best interests of the country? I think not.”

He added: “Soldiers, unfortunately, like it or not, have engaged in this type of behavior in the past. Will they in the future, if they remove this statute? I don’t know.”

Perkins said there was no attempt to remove the UCMJ repeal provision from the bill, which Perkins had expected the Senate to approve.

Now that it has passed, however, the Senate version will have to go to a conference committee, and Perkins predicts there will be several sticking points with the House.

“The House in their version of the defense authorization, reinforced the Defense of Marriage Act, saying that there is a military DOMA as well, prohibiting same-sex marriage on military bases – something the Department of Defense is pushing for,” he said.

“And now this is an added concern, that sodomy has been removed, and as we have discovered, that bestiality--the prohibition against it--has been removed from the Uniform Code of Military Justice. So yes, the House will have problems with this bill.”

CNS News