Mario Cavolo

I quipped in an earlier article "Apocalyptic Bible thumping Armageddon lovers must be in a tizzy with the latest news..." speaking of the Northern Europe ash cloud crisis and the financial ruin of places like Saint Etienne, France and Jefferson County, Alabama due to their unbelievably greedy, ignorant involvement in derivatives contracts with taxpayers money. Suddenly everyone's a day trader!!

Well, the financial corruption, meltdown and other related crises are apparently rearing up in a global fury as since then, the situation has in fact, gotten much worse. Let's take a look:

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Cities like Saint-Etienne, France and Jefferson County, Alabama are financially devastated by their own stupidity and greed using derivatives contracts to hedge and speculate with public money. This news is nothing less than a harbinger of things to come with places California, Greece and many others at the state and municipal state also right at the default meltdown point. This is not conjecture. It is simple reality.

April 15 (Bloomberg) -- The worst global financial crisis in 70 years arrived in Saint-Etienne this month, as embedded financial obligations began to blow up. A bill came due for 1.18 million euros ($1.61 million) owed to Deutsche Bank AG under a contract that initially saved the French city money. The 800-year-old town refused to pay, dodging for now one of 10 derivatives so speculative no bank will buy them back, said Cedric Grail, the municipal finance director. They would cost about 100 million euros to cancel today, he said. ...the crisis is hitting Saint-Etienne in central France, Pforzheim in western Germany and Apulia, an Italian regional government on the Adriatic.

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In Northern Europe, (NOW OVER 50,000 over several day's delay)..."flights will be canceled today as the region is covered in volcanic ash, costing the airlines more than a handful of lost revenues." Can the stock markets be so callous and oblivious as to continue their rally?...anything's possible with all the old rules of economics apparently out the window. Most recently on the newswire "The easing could begin to unravel the gridlock that many rate as the worst peacetime air travel disruption, a nearly week-long halt in flights that stranded tens of thousands and cost airlines hundreds of millions of dollars.Full Must Read Story at Bloomberg

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Foreclosure Filings and Bank Seizures Hit New Record In U.S. (Bloomberg) Foreclosure filings in the U.S. rose 16 percent in the first quarter from a year earlier and bank seizures hit a record as lenders stepped up action against delinquent homeowners, according to RealtyTrac Inc. ...RealtyTrac is forecasting more than 1 million bank seizures this year and at least 4 million foreclosure filings, both potential records. Foreclosures won’t level off until next year, Sharga said.

Item - SEC files suit against Goldman Sachs, clearly implying that the entire banking system could collapse, as the other major banking firms have all been engaged in similar actions. Wall Street has become the banker's "private club" of manipulation and corruption, then bailed out with taxpayer money with the approval of the United States government leaders.

?So What's A Little Armageddon Amongst Friends?

How can it be that an entire continent is shrouded in a volcanic ash cloud causing 50,000 + flight delays and the stock market rallies higher and higher?

How can it be that U.S. foreclosures and bank seizures are at a new record and the stock market rallies and rallies higher?

How can it be that the SEC files a suit against the ringleader bank of the Wall Street and global financial corruption, implicating the entire banking system, and the stock market rallies higher and higher?

How can we see cities and municipalities like Saint Etienne and Jefferson County, who are only the tip of the bankrupt municipalities and states, who essentially gambled away the public coffers and are now broke and still, the stock market rallies higher and higher?

How can it possibly be that ALL of these things are happening at the same time and the stock market keeps rallying higher and higher?

We are living in dangerous times. Times when taking care of a country and its people is no longer the priority and role of the government, times when in the face of multiple global crises and disaster the U.S. stock market rallies and rallies. In the next ten years, the shape of the world's societies is going to continue unprecedented transformation at the hands of the global elite directly deteriorating daily quality of life for the masses. This is already evident and there are few precious signs to be found indicating it will do anything except continue to worsen for many more years. While it is true, for example that the U.S. Fed has injected trillions of dollars of new money into the world financial system, the majority of that money remains in the hands of the few. Think of that. Think of all it implies for the world we live and the future.

Mario Cavolo at www.mariocavolo.com

Big Headline at NY Times: Contrarian Investor Jim Chanos Sees Economic Crash in China

good grief, puke, puke....another "Gordon Chang" China-basher who DOESN"T live here and doesn't have a clue chimes in more of this misguided, China-bashing slop. I'll post it here again, as it is my desire to become world famous on Yahoo just like Jim very soon by the following quote:

NEVER IN HISTORY HAS A COUNTRY WITH PLENTY OF CASH, WHOSE GOVERNMENT HAS PLENTY OF CASH WITH MODERATE DEBT, AND WHOSE CITIZENS HAVE PLENTY OF CASH WITH EXTREMELY LOW DEBT, HAD AN ECONOMIC COLLAPSE. CHINA WON'T BE THE FIRST.

Mario Cavolo

It amazes me to no end how even a guy as venerable as Chanos could be so clueless on the China thing. Yes, there's been a lot of liquidity pumped into the markets and yes, China has a big load of debt, too. BUT they also have CASH. Oodles and oodles of CASH CASH CASH. More than you can imagine. In the government. In the private sector. In the "off the books" market...

Jim Rogers, the world famous commodities investor also scratches his head at Chanos' negative outlook on China. "I find it interesting that people who couldn't spell China 10 years ago are now experts on China," said Jim Rogers, who co-founded the Quantum Fund with George Soros and now lives in Singapore. "China is not in a bubble."

Thanks Jim! We know which side the bread is buttered on.

Cheers, Mario

Information in this article comes from sources believed to be reliable. Mario Cavolo does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. The author may or may not hold positions in issues referred to in this article. No representations are to be taken as advice or recommendation by the author to buy or sell any asset. Copyright © 2010, Mario Cavolo. All Rights Reserved.

At his investment and trading website, veteran advisor Rick Ackerman asks this question,

"Why is it okay for Morgan Stanley to stop making payments on five buildings in San Francisco, but immoral for a homeowner to walk away from a mortgage that is underwater?"

The answer, my dear readers, is that in fact an individual has the same ability and right as a company to make that strategic choice without feeling guilty about it. Anyone trying to guilt you with the idea of "moral obligation" is filled with hypocrisy and should be ignored. They do NOT have your best interests in mind.

The laws of the United States of America work both ways. Laws and provisions on bankruptcy, credit, debt, loans and other related matters exists as a framework within which you are legally entitled to make a strategic decision that is best FIRST for you and your loved ones, not your creditors, who by the way, are apparently involved in some questionable games with their funds that threaten the stability of the entire financial system of your country.

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It takes 14 gallons of water to grow a pound of grain, 435 gallons to grow a pound of beef, 2,000 gallons of water to make one gallon of milk, nearly 20,000 gallons of water is needed to make one ton of steel.

The growing world is using more commodities all the time, and people in emerging markets want to eat and drink like the big good ol’ boys in America. That means each person will be using even more water.

Fascinating stats...add this looming crisis to the list...Cheers, Mario

This NY Times article is scary because it's NOT scary; it is a picture of the new, normal socio-economic structure of America for the middle and lower middle class of the country who have had the foundation of their lifestyle ruined by the capitalist white-collar crooks up top running American business and government.

While the stock market price and corporate earnings somehow swoon speculatively higher and higher across the country and, in fact, the world too, the average American has paid the dear price; facing a present and future of dashed dreams, far from the American dreams available decades earlier in the land of the free when my grandparents arrived at Ellis Island.

I'm sorry, in fact very sorry to be negative, very sorry to see what has happened to the country I was born and raised in. I don't like it, but read this NY Times article and you will understand yourself how a two class world of haves and have-nots has been created in America by those in power pulling the strings of market capitalism. Read Malcolm Gladwell's "Outliers" and Nicholas Taleb's "Fooled By Randomness" for a glaring reminder that the random probability of good or bad circumstances far beyond your control play a much greater role in the success and happiness you will or won't have in your life. It hurts to be told that. Yet, let it inspire you to somehow rise above it if you can and if you dare. But first start by reading and sharing this article.

Check this out:

...with 15 million now enrolled, the program (Food Stamps) is expanding at a pace of about 20,000 people a day.

...growth has come about equally from places where food stamp use was common and places where it was rare. Since 2007, the 600 counties with the highest percentage of people on the rolls added 1.3 million new recipients. So did the 600 counties where use was lowest.

...The richest counties are often where aid is growing fastest, although from a small base. In 2007, Forsyth County, outside Atlanta, had the highest household income in the South. (One author dubbed it “Whitopia.) Food stamp use there has more than doubled.

...This is the first recession in which a majority of the poor in metropolitan areas live in the suburbs, giving food stamps new prominence there.

...Use (of food stamps) has grown by half or more in dozens of suburban counties from Boston to Seattle, including such bulwarks of modern conservatism as California’s Orange County, where the rolls are up more than 50 percent.

What? This past Friday's famous Thanksgiving shopping day showed us an 18% increase over last year. But at the same time, 20,000 more people per day are applying for food stamps? This is happening today in AMERICA?

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There is a population of around 200,000,000 Chinese citizens (100 to 300 million depending on whom you ask), who are at the economic level of comfortable middle class or higher. As the case in most countries, 10% of them are quite rich while 1% are the super rich.

Perhaps 30% of this group (60,000,000) has at least $100,000 USD cash in the bank, zero, yes, zero credit card or mortgage debt, and typically own 1-4 apartments which have tripled in value during the past five years. Surprising to many of you...

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