By Fred Goldstein

Underneath the credit crisis that threatens the entire financial structure of U.S. capitalism is an overwhelming fact: large sections of the working class and the middle class are sinking under the burden of unsustainable debt. To make matters worse, 485,000 jobs have been lost in the last six months.

Most headlines are about the problems of Freddie Mac and Fannie Mae—two sweetly named financial bloodsuckers—and other financial institutions threatened with collapse. The crisis of the workers and oppressed who have been ensnared in the web of debt woven by the financial wizards of Wall Street is kept way in the background.

Treasury Secretary Henry Paulson and Federal Reserve Chair Ben Bernanke, in consultation with the banks, have got Congress to pass a $300-billion bailout plan for Freddie and Fannie, which are privately owned banks. Congress threw $4 billion into the legislation to help homeowners refinance, but left it to the banks’ discretion as to whether they’ll agree to the refinancing. Read more….

Gráinne Gilmore, Times Online

The housing market slump will wipe £50,000 off the value of the average British home and plunge one in seven homeowners into negative equity, influential new research suggests.

Some 70,000 mortgage-holders already owe more than their homes are worth after the near-10 per cent falls in house prices over the past year, Standard & Poor’s (S&P), the credit ratings agency, said. It forecasts that prices will fall by a further 17 per cent, or £30,000, by next April, putting 1.7 million borrowers into negative equity. A 17 per cent fall in prices would take the value of the average house to about £150,000, down from £199,600 in August last year, according to Halifax figures. S&P said that for every further percentage point decline in house prices, between 60,000 and 180,000 extra homeowners could fall into negative equity. Read more….

People in the developed world are eating more than what is good for their health. The increase in demand for meat products, thanks to the popularity of fast food and eating out, is the single biggest reason for the depletion of grain supplies that has precipitated the food crisis, argues A. Srinivas.

The debate on the ‘food crisis’ has overlooked an important issue — that lifestyle-related factors are playing a big role in expanding the demand-supply gap. The availability of cheap food in the post-War years, spurred an extraordinary rise in calorie intake in the rich countries, in particular.

Now, an impression has been created that, with the onset of diminishing returns in intensive agriculture, demand has outpaced supply, as a result of which hunger and starvation will loom large, unless further land is brought under modern agriculture. However, in advancing such a view, the factors underlying the rise in demand have not been fully understood. Read more….

by Martin D. Weiss, Ph.D.

The truth may be unthinkable, but the reality is undeniable:

Much of our nation’s financial structure is collapsing, and our government’s only response is phony money, bogus bailouts and a litany of false promises.

Ben Bernanke, Henry Paulson, the FDIC and the U.S. Congress say they can do it all.

They say they can save bankrupt brokers like Bear Stearns … take over recently failed banks like IndyMac Bank and First National of Nevada … prop up insolvent mortgage giants like Fannie Mae and Freddie Mac … refinance millions of defaulting mortgages … dish out hundreds of billions in tax rebates … and still have enough cash in the kitty to cover the next round of financial collapses.
Read more….

by Mike Swanson, WallStreet Window

I believe the next few days are going to be key days for gold stocks just as May was a key time for the S&P 500 and the broad market. If you were following me then you’ll know that I took short positions against the general market back in May. However I did not short at the exact top. In fact I got in a little early and let the S&P 500 go up a percent above my entry point. I was convinced when I got in that the market was about to make a critical top – one that would last for the rest of the year – but I wasn’t sure at the exact price or moment that it would come. I was only certain that it was coming within a week, so I decided to just start to build a position. Of course it worked fantastic as the market has fallen apart since then.

Gold stocks are now in a similar critical position – however, instead of topping out they appear to me poised to put in a final bottom within the next five trading sessions, maybe even today – and it will be one that should last for the rest of the year and lead to a huge rally. Read more….

By Martin Crutsinger, AP Economics Writer

Weekly applications for jobless benefits soared to 448,000 last week, highest level since 2003

WASHINGTON (AP) — The number of people filing claims for unemployment benefits jumped last week to the highest level in five years, reflecting in large part a new government outreach effort to locate people eligible for benefits.

The Labor Department reported Thursday that the number of applications for jobless benefits soared to 448,000, an increase of 44,000 from the previous week. That was far worse than the decline of 8,000 that economists had been expecting. Read more….

NEW YORK, July 30 (Reuters) – Merrill Lynch & Co Inc repackaged debt deals from 2007 have all performed poorly, which the bank should have predicted based on what was going on in the mortgage market at the time, consultant Janet Tavakoli said on Wednesday.

Tavakoli said in a report to clients that of the 30 collateralized debt obligations
(CDOs) Merrill sold in 2007, every one has either had its best-rated portion cut to junk,
is in technical default, is being liquidated, or is in danger of being liquidated.

The poor performance suggests that Merrill was underwriting deals it knew or should
have known were bad, Tavakoli said. That underwriting, combined with similar moves from
other banks — has shaken investor faith in CDOs, Tavakoli wrote in the report. Her
company is Tavakoli Structured Finance Inc.

Merrill Lynch spokesman Mark Herr declined comment.

“Investment banks have a huge credibility problem when trying to explain that they
‘didn’t know the gun was loaded,” Tavakoli wrote. Read more….

By Steve Brown, The Dallas Morning News

A North Dallas office tower has joined the growing list of commercial properties posted for foreclosure.

The 13-story Coit Central Tower at 12001 North Central Expressway just north of Forest Lane is one of the largest and most prominent Dallas-area commercial properties to be threatened with a forced sale in recent years, according to Addison-based Foreclosure Listing Service, which tracks foreclosures.

“I can’t think of any office buildings of decent size that has been posted in recent times,” said Foreclosure Listing Service president George Roddy. “I hope this is not the beginning of trouble for commercial.” Read more….

Commentary by Robert Gottliebsen,
Business Spectator

The National Australia Bank’s decision to write off 90 per cent of its US conduit loans will have dramatic repercussions around the world. Wall Street will be deeply shocked when they understand the repercussions of what NAB has done. It is clear global banks have nowhere near provided for their exposures to US housing loans which in the words of John Stewart are experiencing a “meltdown”. Read more….