From Volume 37, Issue 50 of EIR Online, Published Dec. 24, 2010

U.S. Economic/Financial News

Half of Seniors Will Be in Poverty

Dec. 13 (EIRNS)—A new study by Professors Mark R. Rank and James Herbert Williams says that "nearly half [47.4%] of all elderly Americans [60-90 years old] will encounter at least 1 year of poverty or near-poverty across these ages. In addition, 58% of those between the ages of 60 and 84 will at some point fail to have enough liquid assets to allow them to weather an unanticipated expense or downturn in income."

The study shows that the proportion of poverty among non-white seniors would be nearly double that of whites, with widows and less-educated people also having higher rates than the average.

These estimates are posited for the current economic situation; thus the conditions to be experienced by the elderly in a potentially catastrophic collapse would be genocidal in scope.

The professors state that a "remarkable reduction in poverty and economic insecurity has been due largely to the increasing generosity of Social Security, as well as to the introduction of the Medicare and Medicaid programs in 1965."

But longer life-spans and increasing numbers of older Americans from the Baby Boom, together with decreased savings among the aged compared with earlier generations, point to a disaster for these elderly people.

The study is a clear retort to demands for savage cutbacks in Social Security and medical care.

Mark R. Rank is a professor of social work at Washington University, St. Louis, Missouri. James Herbert Williams is dean and professor at the Graduate School of Social Work, University of Denver. The study, "A Life Course Approach To Understanding Poverty Among Older American Adults," was published in the October-December issue of Families in Society: The Journal of Contemporary Social Services.

Detroit Unveils Forced March to Dark Age

Dec. 13 (EIRNS)—Bucking the trend, one element is moving into the former industrial City of Detroit: the undead. The ghouls have unburied earlier urban terrorists' goals of literally turning out the lights in whole sections of the city, and relegating them to Dark Age conditions with no police patrols, no garbage collection, no road repair, no street lights.

Detroit "planning" officials are set to turn more than 20% of the city's 139 square miles into wastelands, if they can get away with it.

Whether they know it or not, they are resuscitating the "red lining" "planned shrinkage" proposals put forward for New York City in the 1970s and '80s, in coherence with Felix Rohatyn's Big MAC bankers' dictatorship. The New York Times' Roger Starr wrote at that time that by having their services in sections of the city eliminated, resident-victims could be "encouraged" to move. Detroit is going one step beyond, insisting that people leave, with the option of moving into unoccupied housing in areas of the city said to be salvageable.

Karla Henderson, a city "planning" official, said in a Wall Street Journal interview last week that her staff had deemed just seven to nine sections of Detroit worthy of receiving the city's full resources, but she declined to identify them.

The city plans to present its findings in meetings this Winter and Spring, culminating in June with at least three Hobson's choices for targeted areas, and pulling services from thinly populated neighborhoods. The city estimates it has about 60,000 parcels of surplus land.

Fed Bailout of Foreign Banks Was Bigger than Admitted

Dec. 12 (EIRNS)—In addition to the hundreds of billions of dollars funnelled to foreign banks directly through the Troubled Asset Relief Program (TARP), foreign and U.S. mega-banks also soaked up Fed "paper" through the use of "conduits": corporate intermediaries which make up the world of "shadow banking." According to a Dec. 13 article in Bloomberg, Fed records show that four companies—Hudson Castle, BSN Holdings, Liberty Hampshire Co. and Northcross—received Fed paper and passed it along to at least 12 "banks and other companies," naming the British bank Barclays and the Royal Bank of Scotland among the secondary recipients. U.S. institutions named include CitiGroup, Bank of America, and General Electric's "finance unit."

Created in October 2008 and closed in February 2010, the Fed's Commercial Paper Funding Facility CPFF tried to resuscitate the bubble by injecting over $700 billion directly into the jugular of the financial system, at a time when nothing was moving. Corporate paper is sold by banks, to banks (or other prime lenders) with a maturity short enough (less than 270 days) that it doesn't have to be registered by the Securities and Exchange Commission, providing for a quicker, quieter transaction. As one banker told Bloomberg, "If securitization was shadow banking, this was in the shadow of the shadow ... even further down the line."

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