Royalty is the name, eugenics their game.

Because the bluebloods considered their subjects as little more than animals, the inevitable next step was that they should expand their experimentations to their human quarry. Already a favourite hobby of European royalty, the elite transcended its original fiddling to refine the handiwork to a new level of efficiency. Eugenics was no longer some decadent deficiency on the part of the elite. It became a matter of policy, to be used at the pleasure of the state in oppression of the individual. However, the inclination of royalty to actually attempt breeding a subservient class of men was a relative novelty by the time Frederick William I from the house of Hohenzollern became king of Prussia in 1713.

The strange case of the Prussian Grenadiers Darwin wrote that human beings, unlike livestock, had never been forcibly bred for select characteristics, ‘except in the well-known case of the Prussian grenadiers.’ To the amazement of fellow-rulers and trembling subjects alike, the Soldier-King (as Frederick was nicknamed) began to collect giant men as one would collect rare stamps. From all over Prussia he had his agents look for- and oftentimes kidnap- men suffering from gigantism. In striving to create his own personal soldier core of giants, the king instructed his subjects to immediately signal the authorities whenever they should become aware of exceptionally tall men in the vicinity. He also made clear to his political allies that they could keep their gifts of gold for themselves as long as they provided him now and then with fresh giants to fill up his stock. The strange and sinister request dripped down to every segment of Prussian society. Prussian teachers, eager to appease the morbid king, kept an eye out for tall children and promptly handed them over to him when they got the chance. Newborn babies, expected to grow unusually tall, were marked with a bright red scarf for identification purposes.

If someone was unfortunate enough to be over six feet tall and born in the Prussian sphere of influence (which was quite extensive), he would sooner or later be noticed and assigned to the king’s private collection cabinet. Cautious parents, aware of his eccentric cravings, made improvised shelters for their children to hide them from the ever watchful eyes of king Frederick’s scouts- who feverishly roamed the land in search of specimens to satisfy his dark avocations. If the collection item-to-be happened to be well-to-do (or of noble descent himself) no expense was spared to acquire him- for the king reserved enormous amounts of cash just for the purchasing of giants. If one had the misfortune of being of modest means or descent, the conduct of the Prussian agents was altogether different: in this case they were given carte blanch to simply abduct the person in question, bring them before the Prussian king to be inspected, stamped with the royal seal and subsequently enslaved. It would sometimes occur that his agents were so eager in carrying out their assignment that their prey would not survive the brutal journey to the Prussian throne. This would always enrage the impatient king, and the agent in question could count on a swift reprimand for his negligence (usually on the unhappy end of a rifle). Some glitches aside, his collection grew steadily- and before long he managed to assemble his giants in a formidable ‘regiment’ which were regularly taken out on display when some befriended tyrant came to visit. But Frederick was not satisfied with merely collecting the giants to impress neighbouring monarchs; Frederick took the whole thing to the next level.

Crossbreeding Giants

According to Washington Monthly author David Wallace-Wells, ‘King Frederick’s obsession was more than mere schoolyard eugenics.’ Indeed it was. Frederick was not the man for silly pet projects or idle pastime pleasures. He was a Prussian king and that means thoroughness in absolutely every respect. With an ambition that would put Marie Stopes to shame he gathered from all over Europe the most impressive ‘samples’ and selected each and every one of them personally before sending them to his sublevel experimentation chambers. The most notorious of these experiments was the stretching of his grenadiers on a specially constructed rack to make them even taller than they already were. Frederick would sometimes preside over these racking sessions while enjoying his lunch at the same time. However absurd and cruel this method, it revealed the king’s stalwart fervour in all things unethical. One of the first to venture into the world of methodical eugenics, king Frederick encountered the same difficulties as his future counterparts. When it became apparent that this method resulted in the death of the giants instead of gaining even one inch in length, he ended the practice lest he run out of giants before he could breed new ones. But putting a halt to this racking practise could not prevent the giants from dying in alarming numbers, for many sought refuge in suicide. As only a German blueblood could devise, the king forced his rapidly shrinking collection to interbreed with equally tall women so as to build a future army of giants, which would be the envy of Europe’s upper-class. Here he actually attempted to breed a ‘new man’, and it is said that the city of Potsdam, lair of the Hohenzollerns, was littered with unusually tall men at the end of the 18th century as a result. It is sad, this tale of the Potsdam giants. They fell victim to the elite’s bloodthirsty appetite and unwittingly became one of the first to be sacrificed on the altar of eugenics.

The Green Guise

To consolidate their place in 20th century society, modern eugenicists have manoeuvred themselves comfortably inside an ancient genealogy, dating all the way back to the marbled days of Plato.

Yet the discussion that has emerged in the wake of Obama’s announcement sheds light on the domination of government by a tiny financial elite and the increasingly threadbare pretense of democracy in the US. This financial aristocracy, the episode reveals, is a power to be approached on bended knee.

The media have responded to Obama’s proposal of a $500,000 limit on executive compensation, which would affect only a handful of firms, as though this were a severe and astonishing punishment. Yet the figure represents approximately 12 times the annual salary of the typical worker. To the majority of the population, a salary of a half million dollars is a staggering amount of money.

Obama’s servility before the financial aristocracy was summed up by the reassurances he gave it in announcing his limits on executive pay. “This is America,” Obama said. “We don’t disparage wealth. We don’t begrudge anybody for achieving success.”

Such a vision of America is at odds with both its present circumstances and its history, which has been characterized by deep democratic and egalitarian traditions that date back to before the Jeffersonian democracy of the early Republic. And while liberals are busy attempting to equate Obama to Franklin Roosevelt, the latter, in the midst of the Great Depression, attempted to capitalize on the tremendous contempt for the rich in the population at large by regularly issuing bromides against the “money changers.”

Indeed, Obama’s obsequiousness stands in sharp contrast to the anger of the working masses, who find it incomprehensible that the same executives who are responsible for ruining the economy and squandering trillions in taxpayer money are now presented with pay “limits” of a half million dollars. Workers are wondering why there haven’t been criminal indictments and television scenes of handcuffed executives frog-marched from their offices.

But on Wall Street, $500,000 is considered a pittance. The New York Times reports that executives felt cheated by taking home “only” $18 billion in collective bonuses in 2009. “I feel like I got a doorman’s tip, compared to what I got in previous years,” an investment banker with Citigroup told the Times.

The Financial Times reported on Wall Street’s opposition to the largely token measures. “Senior bankers were quick to warn the plans would cause a ‘brain drain’ from the profession as top executives seek more rewarding jobs out of the public eye,” it wrote. “Unlike other careers where job satisfaction and other considerations play a part, finance tends to attract people whose main motivation is money.”
“‘The cap is a lousy idea,’ complained one top Wall Street executive. ‘If there is no monetary upside, who would want to do these jobs?’”
Andrew Ward, a University of Georgia professor and specialist on corporate boards and management, told the Financial Times that executives could respond to Obama’s measure by calling his bluff—refusing to allow their firms to accept a bailout that would in any way limit their personal enrichment. “One of the potentially unintended consequences is that executives might try and hold off asking for government assistance until it is too late,” Ward said.

Media and academic figures who have tried to argue that the massive pay packages of the Wall Street executives are somehow legitimate, or even rational, succeed only in revealing the rot that characterizes intellectual life in the US. Their central argument—that the same CEOs who have driven their companies and the economy as whole into the ground are worthy of remuneration in the tens of millions—is so absurd it is almost an embarrassment to answer.

The immense power of the financial elite is revealed by the case of Bernard Madoff, the investor who squandered more than $50 billion in wealth in a giant Ponzi scheme. While working class Americans are arrested and spend years in prison for far lesser offenses, Madoff remains ensconced in his Manhattan penthouse.

For nearly a decade, a whistleblower named Harry Markopolos, who had uncovered Madoff’s scheme, attempted to draw the attention of the Securities and Exchange Commission (SEC), the federal regulatory agency ostensibly tasked with policing the securities and stock industries. Instead, the SEC ran interference for Madoff. Rather than being applauded for his efforts, Markopolos feared for his safety. “We knew that he was one of the most powerful men on Wall Street and in a position to easily end our careers or worse,” he said.
The social psychology and physiognomy of the financial elite—with its wealth, special privileges and its control over the organs of public opinion—resembles nothing so much as a modern aristocracy.

Any discussion of a rational attempt to find a solution to the economic crisis runs immediately into the ferocious opposition of this elite. Similarly, in the 18th century the aristocracy of the French ancien regime precipitated a financial crisis through its avarice and wars. When the aristocracy convened the Estates General in 1789, it was to demand that the Third Estate, the commoners, bail the aristocracy out of the crisis of its own making. But the monarchy and nobility refused to cede a bit of its power and privileges. This set the stage for the great French Revolution.

The odious subjective characteristics of the US financial aristocracy—its greed, arrogance, stupidity and decadence—are themselves deeply rooted in objective historical developments, the social expression of an underlying economic process. The rise of this narrow social layer with its obscene levels of accumulation is inextricably bound up with the decline of American capitalism in the world market and the gutting of its domestic industrial base. Indeed, what makes the whole process so filthy, what imparts to it such a decadent and repulsive character, is the degree to which this wealth is unconnected to any progressive economic process. It is in every sense destructive and reactionary.

In an earlier period of history the US had its “robber barons,” such as Cornelius Vanderbilt, Andrew Carnegie and John D. Rockefeller. As brutal and greedy as these men were, their wealth was bound up with the creation of enormous industrial empires. The latter-day robber barons of Wall Street, on the other hand, have made their billions from the destruction of the industry and productive capacity built up over decades.

The staggering wealth accumulated in the top one percent of American society over last 25 years is directly bound up with the deterioration of the economy, the decline of industry and the impoverishment of the working class. The enormous personal fortunes of the elite have been built up on hedge funds, the leveraging of debt and other forms of financial speculation. This has entailed an enormous transfer of resources out of manufacturing and into finance, and out of the working class and into the pockets of those who have played the critical role not only in destroying living standards, but in setting the stage for the present disaster.

The fortunes that grew on this basis at a certain point assumed a dynamic of their own. Their sheer scale assumes a malignant character that becomes an insurmountable obstacle to any rational policy coming from within the confines of bourgeois politics.

It follows that there is no solution to the crisis without a direct and massive assault on social inequality, and thus the wealth and privileges of the financial and business aristocracy. This cannot be carried out by pressuring the Democratic Party. The Obama administration’s meager rules on executive pay shows that it will not consider any policies that even hint at the redistribution of wealth.
The American political elite, Obama included, is tied by a thousand strings to the financial aristocracy. The Obama administration is populated by individuals who have parlayed their political positions into lucrative positions in finance. Virtually the entire cabinet fits this billing—not only Tom Daschle, the former senator who withdrew his nomination for the Secretary of Health and Human Services amidst revelations that he had withheld tens of thousands in taxes owed on payments he received from his corporate sponsors.

Yesterday it came to light that Leon Panetta, Obama’s nominee for chief of the Central Intelligence Agency, took home more than $1 million last year through payments from corporations for consulting, speaking appearances and through his membership on corporate boards. He was paid handsomely for speeches by financial firms that have since collapsed, including $56,000 by Merrill Lynch and $28,000 by Wachovia. Chief of Staff Rahm Emanuel and Secretary of State Hillary Clinton have also used their political connections to make millions from the same financial elite that would ostensibly be targeted by Obama’s rules on executive pay.

Obama knows very well that when he leaves office he will be able to make millions of dollars, as Bill Clinton, the last Democratic president, and countless other leading politicians have done. Nor would this be a departure for Obama, whose career was taken into hand early on by leading financial and political figures in Chicago.
The subordination of the whole of society to the financial aristocracy is most clearly expressed in the massive bailout of Wall Street. Its political representatives, Democrats and Republican alike, hand over trillions to the biggest banks, while providing no provisions for the masses of people who have lost their jobs and homes.

Millions of workers who voted for Obama are now coming face to face with the fact that his administration will defend the interests of the financial elite every bit as ruthlessly, if with a slightly different presentation, as the Bush administration.

The solution to the economic crisis is not a technical question but a social, political and revolutionary settling of accounts, and a historical necessity. At a certain point in the late 18th century, it became necessary for the oppressed classes of France to rise up and destroy the power and privileges of the nobility. In the America of the 1860s, the only resolution to the “irrepressible conflict” was the destruction of the “slave power” in the South.

So dangerous is the world now, according to the argument offered by Jones, the NSC will apparently encompass “the Energy Department, Commerce Department and Treasury, all the law enforcement agencies, the Drug Enforcement Administration, all of those things.” After Obama issues his directive, the NSC will strive to “embrace a broader membership” and roll these government agencies into the National Security State, initially created in 1947 when Congress passed the National Security Act. In addition to the NSC, this legislation created the CIA and institutionalized under the rubric of “national security” the justification for new weapons systems, huge military expenditures, and military interventions in the third world.

“National Security State institutions like the NSC and CIA are also dangerous because they greatly expand the power of the executive branch and thereby threaten the constitutional system of checks and balances,” writes Jack Nelson-Pallmeyer in his book, Brave New World Order. “The institutions that make up the National Security State apparatus are supposedly set up to defend national security and the integrity of the state. However, they often abuse power, violate national and international laws, and may actually erode the democracy they supposedly defend. Senate investigations led by Frank Church in 1975 detailed numerous illegal activities conducted by the CIA against U.S. and foreign individuals and groups. The recent Iran-Contra scandal… offers frightening testimony to abuses of power by the National Security Council, including numerous violations of the U.S. Constitution.”

In other words, with a stroke of Obama’s pen, the military and intelligence policy-making and control functions of the shadow government operating under cover of the NSC — unanswerable to Congress or the American people — will dictate energy policy, computer network security, “climate change” mandates, national infrastructure, and the homeland security surveillance gird.
It should be noted that the secret 5412 Committee (now known simply as the Special Group), responsible for black operations, is a component of the NSC.

According to the research of David Guyatt, (The Secret Gold Treaty: The Truth Behind WW II Gold, Nazi Plunder & Elite Plans To Control Our Financial Future) the 5412 Committee, which met in Room 40 at the CIA headquarters in Langley, Virginia, became the de facto parallel government of the United States, a fact that was later acknowledged by President Eisenhower in his speech regarding the dangers of the “military industrial complex.” At the heart of the US secret government lay a doctrine that was “driven by the twin goals of reinforcing the private interests that largely control the state and maintaining an international environment in which they can prosper.” The broader interests of the people are not permitted to enter the equation, which is reserved entirely for men of wealth and power.
As the Post story notes, Jones’s deputy, John O. Brennan, a CIA veteran who serves as presidential adviser for counterterrorism and homeland security, “will review options for the homeland council, including its responsibility for preparing for and responding to natural and terrorism-related domestic disasters.”

On January 27, Paul Joseph Watson, writing for Prison Planet, reported on a bill introduced in Congress authorizing the Department of Homeland Security to set up a network of FEMA camp facilities to be used to house U.S. citizens in the event of a national emergency. “Ominously, the bill also states that the camps can be used to ‘meet other appropriate needs, as determined by the Secretary of Homeland Security,’ an open ended mandate which many fear could mean the forced detention of American citizens in the event of widespread rioting after a national emergency or total economic collapse,” wrote Watson. Obama’s directive will pass operational responsibility for this proposed network of internment camps from the DHS directly to the parallel government in the NSC.

The DHS plan — soon to become a plan implemented by the NSC and the Special Group — followed on the heels of the Pentagon’s announcement late last year that it “expects to have 20,000 uniformed troops inside the United States by 2011 trained to help state and local officials respond to a nuclear terrorist attack or other domestic catastrophe,” as the Washington Post reported on December 1, 2008. “The Pentagon’s plan calls for three rapid-reaction forces to be ready for emergency response by September 2011. The first 4,700-person unit, built around an active-duty combat brigade based at Fort Stewart, Ga., was available as of Oct. 1, said Gen. Victor E. Renuart Jr., commander of the U.S. Northern Command.”

According to Bert B. Tussing, director of homeland defense and security issues at the U.S. Army War College’s Center for Strategic Leadership, the new Pentagon approach “breaks the mold” by assigning an active-duty combat brigade to the Northern Command for the first time.

The Illuminati may use the brief upsurge derived from the PPP and the PPPP as an opportunity to complete the Big Sting Two, where they dump their dollar-denominated paper assets in favor of tangible real assets via dark pools of liquidity and unregulated OTC markets out of the view of both regulators and the public, leaving all the non-insider sucker-dupes holding the bag full of the worthless fiat currency known as Federal Reserve notes (aka toilet paper) or paper assets denominated in such. Dollar surplus nations who are tight with the Illuminists will be allowed to go on a spending spree and join in on the fun by spending their once-sterilized dollars, and this will then very seriously aggravate an already deadly bout of hyperinflation. You won’t know about what these other nations are doing, however, because the Illuminist-controlled FTC no longer publishes figures about foreign investment in the US. How incredibly convenient.
When the Big Sting Two is set into motion, gold and silver will then go on a moon-shot, and if you don’t own any, you will be financially vaporized, and join the ranks of the other crispy critters who were too dumb to recognize that gold and silver are the only real money in this world. The Illuminati are certainly aware of this fact, as they all collectively own tens of thousands of tons of gold and silver, which they have looted from their own central banks by stealing it outright, like the Rockefellers’ likely looting of what is now an empty Fort Knox, or by purchasing it at bargain-basement prices, like the Rothschilds’ purchases from Gordon Brown’s big gold giveaway of the UK’s national gold reserves via planned and publicly announced auctions at the bottom of the market. The Illuminati have accumulated these tens of thousands of tons over many centuries.

This is their failsafe money and their possible backing for a world currency. This is not a situation where, if you can’t beat them, then join them. This is a situation where you can beat them by joining them. If you send gold and silver to new heights before they can bail out of their paper assets, you will deal a serious blow to their plans for world government! Buy, baby, buy!!!

Our Treasury plans to borrow $493 billion in the first quarter versus a forecast of $368 billion.

Our new president believes our Fed Chairman, Ben Bernanke, will wave his magic wand and with his genius will save our economy and financial world. Unfortunately, Mr. Obama doesn’t realize that the elitist goal is not to save our country, but to destroy it. Who in their right mind would even talk about using the printing press to save the financial system, or dumping money out of helicopters. Being cavalier should not be the province of an economist. Ben, in his speeches, conveniently forgets to tell listeners that he has increased the monetary base from $1 trillion to $3 trillion in just five months. He is a modern day Hercules, he is.

Needless to say such policy ignites hyperinflation, which in turn puts downward pressure on the dollar. The infusion of capital into the finance industry along with the increase in money and credit has not tempted banks to increase lending. That monetary base is huge, yet no credit expansion.

Soon inflation will accelerate and normally Mr. Bernanke would withdraw cash from the system, but he does not have that luxury this time, because of the continually downward pull of deflation and asset destruction. The implied safety of the dollar is already being questioned as we see both short and long-term interest rates rise.

Once these rates rise higher tremendous pressure will be put on the dollar and borrowing costs will rise. These higher rates, as they rise, will attract lenders to some degree.

Money is never neutral. As it enters the system it increases demand for goods and services. Presently you have seen a large drop in retail sales. Can you imagine how large that drop would have really been if this onslaught of money and credit had not been created? This injection also creates malinvestment, which as the boom ends creates more terrible problems, as unemployment rises further, wages fall and the dollar comes under further pressure. These massive monetary injections distort the financial and economic structure making the final outcome much more devastating. Central bankers fool themselves into believing that they can control what they are doing when in fact they have no real control.

The big question is when will some foreign nations break ranks and become dollar sellers? We believe that will happen when Treasury sales fail and debt has to be monetized by the Fed. Then the panic will begin. This is why you have to be long gold and silver assets now, so you do not get left in the dust.

Harry Markopolos, a former money manager, who sought to convince regulators for 9 years that Bernard Madoff was a fraud, said the SEC suffers from investigative ineptitude. He is too kind. The SEC was in on it. They knew what was going on. They protected the fraud. They protect all the connecteded insiders. They only close down small brokerage firms, small brokers and newsletter writers. They knew all about Enron as well. These are the same people at the SEC and CFTC who refuse to uncover the manipulation of gold and silver.

Markopolis gave the SEC a beating they’ll never forget. Unfortunately, he doesn’t know what we know. If he did he could have tied it all together and put a red bow around it.

The FDIC just three months ago said that $40 billion would carry the fund from 2008 to 2013. Magically that figure has jumped to $100 billion.

Late payments on credit cards has topped record levels and defaults rose sharply to just below all-time highs last month as consumers struggled.

The latest report on China’s holdings for the end of 2008 are $900 billion in Treasury bonds and $600 billion in Agency bonds. They have another $150 in corporate bonds, $40 billion in US equities and $40 billion in short-term deposits. That is $1.72 trillion.

The US Treasury on Wednesday opened the floodgates of government bond issuance, revealing plans for a record debt sale in February and more frequent auctions in the months to come.
The announcement came amid growing fears about US government deficits and sent the yield on the benchmark 10-year Treasury note rising to 2.95 per cent, up from just over 2 per cent at the end of December.

The rise in Treasury yields has been pushing mortgage rates higher, complicating efforts to revive the economy. The US Federal Reserve said last week it was “prepared to” buy Treasuries if that would be a “particularly effective” way of reducing private borrowing costs.
The Treasury said it would sell $67bn (£46bn) in new securities next week, the largest ever quarterly refunding, beating the last peak in August 2003. It may also start monthly sales of all its benchmark Treasury securities.

At the end of February, the Treasury will start selling seven-year notes every month for the first time since the issue was discontinued in 1993. Sales of 30-year bonds will double to eight times a year and the Treasury will say in May whether the bond will be sold every month.

The Obama administration, aiming to overhaul the $700 billion financial-rescue program, is refocusing on an effort to guarantee illiquid assets against losses without taking them off banks’ balance sheets.

Treasury Secretary Timothy Geithner is skeptical of setting up a so-called bad bank to hold the toxic securities, an option that still may form part of the final package, people familiar with the matter said. Senator Charles Schumer yesterday said debt guarantees are becoming “a favorite choice” of options because a bad bank would be too costly.

The cost of President Barack Obama’s economic recovery plan is now above $900 billion after the Senate added money for medical research and tax breaks for car purchases. [We all know that eventual costs always greatly exceed original estimates.]

US taxpayers may be stuck with losses on $30 billion of Bear Stearns Cos. assets owned by the Federal Reserve even though the central bank has said otherwise, according to Robert A. Eisenbeis, Cumberland Associates Inc.’s chief monetary economist.
“There is no prospect for a profit on the assets,” Eisenbeis wrote in a report yesterday. “Losses are mounting.”

No wonder the Fed will not reveal its holdings! And how about all those TARP apologists braying that taxpayers would make money on the crappy paper that no one else wants!

The US Senate voted on Wednesday to soften a ”Buy American” plan in its $900bn stimulus bill after President Barack Obama expressed concern the original language could trigger a trade war. They are gutless.

Senators, on a voice vote, approved an amendment requiring that provisions that upset Canada, the European Union and other trading partners be ”applied in a manner consistent with US obligations under international agreements.”

Delinquencies on U.S. credit cards rose to record highs in January as the economic recession weakened consumers’ finances, Fitch Ratings said on Wednesday.

Payments at least 60 days late measured by a Fitch index rose 0.47 percentage point to 3.75 percent last month, after accelerating in the fourth quarter, Fitch said in a statement. The previous record was 3.73 percent in February 1997.

“U.S. consumers continue to struggle in the face of mounting pressures on multiple fronts, from employment to housing to net worth,” Michael Dean, a managing director at Fitch, said in the statement.

Concerns that the U.S. recession will deepen as foreclosures rise and businesses lay off thousands have sparked a flurry of unconventional moves to spur growth, including credit-easing measures that have already doubled the size of the Federal Reserve balance sheet to more than $2 trillion.

A Fed program to lend up to $200 billion to holders of ABS backed by new or recently issued consumer loans is expected by analysts to boost availability of loans for autos, education and credit card balances.

But rising delinquencies and charge-offs by credit card companies will hurt performance of asset-backed securities (ABS) supported by credit card receivables, Fitch said. But downgrades are seen limited in the near-term, it added.

Total charge-offs on prime, general purpose credit cards from the December collection period rose 0.66 percentage point to 7.5 percent, up 40 percent from a year earlier and the highest since bankruptcy reforms caused a spike in 2005, according to another Fitch index.

Fitch estimates charge-offs will near 9 percent by the second half of this year.

Retail store credit card delinquencies rose 0.12 percentage point to 5.2 percent, though the rate of increase has slowed for the second month. Charge-offs on retail cards were flat at 10.51 percent, 44 percent higher than a year earlier.

The unemployment rate climbed in nearly all of the biggest urban areas in the U.S. during December.

The U.S. Labor Department Wednesday said jobless rates rose in 363 of the 369 metropolitan areas compared to a year earlier.

Elkhart-Goshen, Ind., had the largest jobless rate increase from December 2007, up 10.6 percentage points to 15.3%. At second place, Dalton, Ga., rose 6.2 percentage points to 11.2%. Both areas were struck by manufacturing layoffs. On Friday, the Labor Department will release its January employment report; economists see the unemployment rate rising to 7.5% from 7.2% during December, with non-farm payrolls shrinking by 524,000 jobs.

The Institute for Supply Management said its non-manufacturing index came in at 42.9 in January compared with 40.1 in December.
The level of 50 separates expansion from contraction. The index dates back to July 1997.

Economists had expected a reading of 39.0, according to the median of 75 forecasts in a Reuters poll, which ranged from 37.0 to 44.0. The service sector represents about 80 percent of U.S. economic activity, including businesses such as banks, airlines, hotels and restaurants.

U.S. commercial property prices by institutional investors posted their greatest quarterly fall in 22 years, according to an index developed by the Massachusetts Institute of Technology Center for Real Estate.
The transaction-based index, which MIT developed in 1984, fell 10.6 percent in the fourth quarter, surpassing the record fall of 9 percent seen in the fourth quarter 1987.

The index tracks the prices that institutions such as pension funds pay or receive when buying or selling commercial properties like shopping malls, apartment complexes and office towers.
“It now seems likely that this down market will be at least as severe as that of the early 1990s for commercial property,” Professor David Geltner, director of research at the Center for Real Estate, said in a statement.

The index fell a record 15 percent in 2008, and easily surpassed the 9 percent decline seen in 1991 and the 10 percent drop in 1992.
That period marked one of the most severe recessions in commercial real estate recession and was the result of the savings and loan debacle and U.S. tax code changes in 1986.

The current downturn in commercial property is the result of the credit crisis, which has cut off debt financing for sales. The U.S. recession has also dealt a blow to commercial real estate returns, as business tenants cut staff and office needs, cut hotel demand, or close stores.

The index declined a total of 27 percent from 1987 through 1992, with most of the decline occurring in 1991 and 1992.

The index’s performance means that prices in institutional commercial property deals that closed during the fourth quarter for properties such as office buildings, warehouses and apartment complexes are now 22 percent below their peak values attained in the second quarter of 2007. The index has fallen in five of the past six quarters, but the recent drop is by far the steepest.

The MIT Center for Real Estate also compiles indexes that gauge movements on the demand side and the supply side of the market that it tracks.

The demand-side index, which tracks prices potential buyers are willing to pay, has fallen for the past six quarters, and is down 23 percent for the year and 31 percent since its mid-2007 peak.
California today was branded the worst credit risk of all 50 states, after Standard & Poor’s cut its rating on the state’s debt because of the budget impasse.

S&P lowered its rating on the state’s $46 billion in general obligation bonds to “A” from “A-plus,” citing “the state’s inability to reach an agreement on a mid-year budget revision and its rapidly eroding cash position.”

Until now, California and Louisiana had been tied for last place, at “A-plus,” on S&P’s state ratings list. Most states are rated either “AA” or “AAA.”

The volume of applications filed to refinance mortgages increased 15.8% last week compared with the week before, as applicants looked past higher mortgage rates, the Mortgage Bankers Association said Wednesday.

Applications for mortgages to purchase homes fell down a seasonally adjusted 11.2% for the week ended Jan. 30 as opposed to the previous week, according to the Washington-based MBA’s survey. It covers about half of all U.S. retail residential mortgage applications.
The combined volume of home-purchase and refinance applications rose a seasonally adjusted 8.6% on a week-to-week basis. The four-week moving average for all mortgages was down 9.2%.

Total application volume was down 26.9% on an unadjusted basis compared with the same week in 2008.

Refinancings made up 73.2% of the total applications filed last week, up from 72.8% the week before. Adjustable-rate mortgages accounted for 2.1% of applications, down from 2.4%.
Rates on 30-year fixed-rate mortgages averaged 5.28%, up from 5.22% the previous week, while the average on 15-year fixed-rate mortgages increased to 5.15% from 4.98%. The rates on fixed-rate mortgages had been little changed last week, following a dramatic move lower recentlyTime Warner Cable Inc. says it is laying off 1,250 people over the next few weeks in the face of slowing growth at the nation’s second largest cable operator.

The Treasury Department is bringing back the seven-year note and doubling the number of its 30-year bond auctions as it works to handle a soaring budget deficit projected to top $1 trillion this year.

Treasury said yesterday it will begin auctioning seven-year notes once a month starting this month, and will auction 30-year bonds eight times annually, up from the current four per year. The last time the government needed to auction seven-year notes was in 1993.
The government also said it will auction $67 billion next week in three-year, 10-year, and 30-year Treasury securities, a record amount at a quarterly refunding.

The department on Monday said it will need to borrow $493 billion during the current January-March quarter, a record amount for this period. That borrowing estimate follows actual borrowing of $569 billion in the October-December period, the record high for any quarter.

The Congressional Budget Office is projecting the deficit for the current budget year will hit a record $1.19 trillion. That estimate does not include the cost of President Obama’s economic stimulus program, which is now above $900 billion in the measure being considered in the Senate.