by Mike Whitney

The housing depression will last for a decade or more. This is by design. The Fed has been working with the banks to withhold inventory so prices do not fall too fast or too far. That way the banks can manage their write-downs without slipping into insolvency. But what’s good for the banks is bad for the country. Capital impairment at the banks, means no credit expansion in the near-term. It means the economy will continue to contract, unemployment will remain high, and deflation will push down wages and prices. Everyone will pay for the mortgage-backed securities scam that was engineered by the banks.

by Bob Chapman

by Washington’s Blog

America’s biggest creditor – China – has called our bluff.

As the Financial Times notes, the head of China’s biggest credit rating agency has said America is insolvent and that U.S. credit ratings are a joke:

The head of China’s largest credit rating agency has slammed his western counterparts for causing the global financial crisis and said that as the world’s largest creditor nation China should have a bigger say in how governments and their debt are rated.

A proposed U.S. arms sale to Saudi Arabia will include 84 new Boeing Co. F-15 fighter jets and may be valued at as much as $30 billion, according to a government official familiar with the plan.

The deal also calls for selling 72 UH-60 Black Hawk helicopters built by United Technologies Corp.’s Sikorsky unit and refurbishing 70 Saudi F-15s, said the official, who asked not to be identified because terms are still under discussion.

Navy Vice Admiral Jeffrey Wieringa, director of the Defense Security Cooperation Agency, which oversees foreign sales, said separately today that Congress may be formally notified “within two months” about the transaction, which he said includes jets, helicopters, ships and missile-defense systems. He said he couldn’t give specifics.

by Barry Grey

Reports issued Thursday on initial claims for unemployment benefits and sales of previously owned homes confirm that the US economy is slowing dramatically.

The Labor Department reported that initial jobless claims for the week ended July 17 rose by 37,000 to 464,000. The number was far higher than the consensus forecast of economists. It underscored the bleak prospects for any significant reduction in the unemployment rate, now officially at 9.5 percent.

The four-week moving average of initial claims also rose, hitting 454,750, up 1,250 from the previous week. In a healthy economy with substantial hiring, initial jobless claims usually fall below 400,000.

by Dr. Tony Phillips

NASA-funded researchers are monitoring a big event in our planet’s atmosphere. High above Earth’s surface where the atmosphere meets space, a rarefied layer of gas called “the thermosphere” recently collapsed and now is rebounding again.

“This is the biggest contraction of the thermosphere in at least 43 years,” says John Emmert of the Naval Research Lab, lead author of a paper announcing the finding in the June 19th issue of the Geophysical Research Letters (GRL). “It’s a Space Age record.”

by Bob Chapman

The crisis affecting Europe is nothing new. It goes back three years and the beginning of the credit crisis, 60% of the subprime CDOs, collateralized debt obligations, had been sold to European institutions. These were the mortgage bonds, which contained a variety of toxic waste, which the rating agencies, S&P, Moody’s and Fitch, in collusion with banks and brokerage houses, had sold as AAA bonds, when in fact their ratings should have been considerably lower. The holders of these bonds in many instances became insolvent and had to be bailed out by capital injections from central banks, most of the funds were lent by the Federal Reserve.

by Matthias Chang

For all intent and purposes, the United States is insolvent.

This is not my personal assessment but that of world renowned “experts” and economists, and financial institutions. Just google “US Debts” and you can find thousands of analysts stating that there is no way that the US can ever pay off its debts. The US cannot even liquidate the accumulated interest on the outstanding debts. The debts are in the trillions!

The Casey Daily Dispatch observed:

by Danny Schechter

An unusual word crept into the lexicon of the New York Times op-ed page, the arbiter of approved thought in the age of economic collapse. The new conservative columnist Ross Douthat dusted off a key phrase associated with Marxism, “class war.”

Of course, as you would expect, Karl was spinning again in his resting place at London’s Highgate cemetery by the Timesman’s spin. But in a country where, officially at least, the only classes are found in schools, the very idea of class war is not something you read about every day, even if the person writing about it is certainly on the wrong side.

Is Anyone Really Capable Of Fixing Our Many Deeper Crises?

by Danny Schechter

Progress is, as we have seen, “stalled” in Haiti six months after an earthquake that struck with the impact of a nuclear bomb. A country, we are told, that is trapped in its past actually may exemplify a more frightening future—a world whose institutions, agencies, governments and corporations are sinking in a swamp of their own making, unable and perhaps unwilling to repair catastrophic crises that are morphing into each other,