INSIDERS, How they do it.

i have advised some green readers of this blog that stocks are for insiders, here below you find a related article from wsj.

a really good article about insider trading that SEC helps expose and how they do it.

Executives Hit Sweet Spot on Stock Sales

Corporate Executives Give Favorable Stock Guidance, Sell Shares, Then Disclose Bad News

By

Susan Pulliam and

Rob Barry

Nov. 13, 2013 11:00 p.m. ET

When George Weinert, then chief executive of Novatel Wireless Inc., found out one of the company's largest customers planned to cancel scheduled orders, he warned managers in an email that losing the sales "would have a major impact on our business."

His email, written in January 2007, has surfaced in a lawsuit because of what happened next. Novatel didn't inform shareholders about the bad news. In a news release that May, the San Diego-based maker of telecommunications equipment said its quarterly earnings would exceed expectations, citing "strong sales" across the board. That June and July, Mr. Weinert sold $3.3 million of company stock.

When an analyst later disclosed the problem with the big customer, Sprint Corp. , the stock slumped. Months after that, Novatel disclosed that waning customer demand would hurt sales.

Ordinary investors often are dismayed when senior executives sell their own stock before hitting the market with bad news. The situation can be even stickier when corporate insiders declare their company's outlook bright, sell shares, then disclose bad news. Such one-two punches sometimes give rise to accusations that executives boosted the stock price—and withheld unfavorable news—to increase personal profits.

A Wall Street Journal examination of earnings-guidance data compiled by research firm Earnings Whispers identified 1,468 cases since 2005 in which public companies issued so-called upward guidance—saying results looked better than expected—then followed with downward guidance within 120 days. Securities and Exchange Commission filings show that in 755 of those cases, corporate insiders sold in the window between the up and down, an advantageous time to sell.

There is no way to tell from the data whether sellers knew about impending bad news before selling, and it is perfectly permissible for insiders to sell stock after upward guidance. In the 1,468 guidance-change cases, about 9% more insiders sold in the favorable window than in the year-earlier period. Executives often buy and sell stock around the same time each year.

Among the 2,389 corporate officers who sold between swings in guidance, about 74% would have collected less money had they waited to sell until after guidance was lowered, according to the Journal analysis. The stocks declined in value by an average of 10.8% between the sales and the day after the guidance was lowered.

Earlier: Dark Markets

The Journal is investigating a new age of murkiness in the financial markets and the challenges that creates for investors.

• Directors Take Shelter in Trading Plans
• Big Lots Chief Probed by SEC
• Executives' Good Luck in Trading Own Stock
• For Superfast Stock Traders, a Way to Jump Ahead in Line
• Investor Hazard: Zombie Funds
• Traders Navigate a Murky New World
• Source's Cover Blown By SEC

Novatel shareholders claim the executive selling there was fraudulent. Their lawsuit, slated for trial early next year in federal court in San Diego, alleges that Mr. Weinert and other top executives withheld bad news from shareholders, allowing them to sell their shares at higher prices. Novatel has responded in court documents that any lost Sprint business was immaterial and didn't trigger the stock sales. A Novatel spokeswoman says Mr. Weinert and the other executives had preset trading plans that "met all legal requirements."

Some market experts say any trading by senior executives around the time of good or bad news is potentially problematic. "There is the timing and the content of disclosures by companies, and those two can be played with because you know you have a sale coming," says Stanley Veliotis, a professor of accounting at Fordham University, who has studied trading by insiders after positive earnings developments.

On Jan. 14, Ixia, a Calabasas, Calif., company that makes Internet testing equipment, said revenue for last year's fourth quarter would exceed earlier guidance. It cited better-than-expected performance at two recently purchased companies.

As the stock rose, insiders began selling. Over the next two months, eight senior executives, including then CEO Victor Alston and the chairman and general counsel, sold a total of more than $18.4 million of stock at an average price of $20.96 a share. The sales exceeded what the firm's executives had sold during the previous seven years.

Then came a surprise. On April 11, Ixia lowered guidance for the first quarter, citing revenue-recognition problems. Revenues for 2010, 2011 and the first three quarters of 2012 were restated. On April 30, the firm said earnings for the second quarter would likely miss analyst expectations. By May 1, its stock had fallen to $14.51. If the insiders had sold at that point rather than when they did earlier in the year, they would have collected $5.7 million less, a Journal analysis determined.

It isn't clear when senior executives learned about the problems. An Ixia spokesperson and the insiders declined to comment on the trading.

On Oct. 24, Ixia said in a news release that Mr. Alston had resigned after the company determined he had misstated his age, academic credentials and employment history. Its chairman and founder, Errol Ginsberg, has taken over that position.

Federal regulators last year accused the top executive of another company of hiding bad news from shareholders while he unloaded stock. In a civil suit filed in a California federal court in July 2012, the Securities and Exchange Commission accused the founder and former chairman of STEC Inc., a Santa Ana, Calif., maker of computer storage devices, of providing false or misleading information to shareholders.

STEC shares shot up about 800% between January and August of 2009 after the company disclosed good news: a new agreement to supply equipment to EMC Corp. The lawsuit alleges that founder, chairman and CEO Manouchehr Moshayedi learned that July that EMC was planning to order less the following quarter than STEC had hoped.

According to the SEC, he complained to fellow executives in a July 26 email that STEC was "now going to miss the top line and EPS [earnings per share] estimate numbers for Q-3." The following day, an EMC manager wrote to his boss that Mr. Moshayedi "wants us to make a deal in advance of their earnings call next week so he can guide appropriately," the lawsuit said.

The SEC alleges that Mr. Moshayedi persuaded EMC to place an order it didn't need, in exchange for a deep discount. The suit said that in a July 28 email, Mr. Moshayedi wrote to an EMC official: "Just tell me what you need, I knew asking you guys for a favor would go nowhere so I am now back at paying for favors. What is your price for keeping inventory for a week or two?"

The next day, Mr. Moshayedi and an EMC official "agreed to a secret deal to have EMC commit to purchase $55 million of STEC product in the third quarter, even though it only projected needing about $33-34 million," according to the complaint.

Days later, on Aug. 3, STEC kept its third-quarter earnings guidance unchanged. Mr. Moshayedi sold a chunk of his STEC shares through a secondary stock offering that same day, for $88 million, according to his lawyer.

Three months later, in a Nov. 3 conference call with analysts, Mr. Moshayedi disclosed that the EMC contract had been a "one-off" deal. STEC's stock dropped 38.9% by the end of the next day.

The lawsuit accuses Mr. Moshayedi, who stepped down as chairman and CEO in September 2012, of insider trading and fraud.

A lawyer for Mr. Moshayedi called the SEC's claims baseless and said the secondary offering was planned "long before" the SEC says Mr. Moshayedi learned the bad news. The lawyer said Mr. Moshayedi, based on past experience with EMC, had expected the company to boost its order.

The SEC declined to comment, as did EMC, which wasn't accused of wrongdoing. STEC has been acquired by Western Digital Corp.

At Aruba Networks Inc., a Sunnyvale, Calif., wireless-networking company, executives early this year tried to calm investors concerned about a competitive threat. Aruba-made equipment was for sale at an auction in 2011. Bloomberg News

At Aruba Networks Inc., a Sunnyvale, Calif., wireless-networking company, executives early this year tried to calm investors concerned about a competitive threat. In a Feb. 21 conference call, investors pressed management on whether competition from rival Cisco Systems Inc. would hurt Aruba's results. Chief Executive Officer Dominic Orr responded: "It seems like they seem to have lost the interest to compete with us head on."

Less than three months later, on May 7, Aruba lowered its revenue guidance, saying competition from Cisco was partly responsible for a deteriorating outlook for the quarter that would end in June. The stock dropped 23% that day.

Top executives at Aruba sold $8 million of stock during the three months before lowering guidance. On May 1, six days before the guidance adjustment, Mr. Orr, the CEO, sold $168,000 of stock. If he had waited until right after the announcement, he would have collected $39,000 less, the Journal calculated.

To avoid accusations of insider trading, executives can create preset trading plans that call for automatic sales of stock, as long as the plans don't use inside information as a basis for the trades. An Aruba spokesman said Mr. Orr's sales were made under preset plans, and that the sale in May was consistent with his historical pattern of sales. He declined to elaborate.

Securities filings show that Mr. Orr sold more shares during the first four months of this year than he did all of last year. The spokesman said Mr. Orr continued to sell even after the stock fell in May, and that the other executive also sold under present plans.

Wall Street analysts were skeptical about the timing of Aruba's guidance shift. In a May 16 conference call, Ehud Gelblum, then a Morgan Stanley analyst, asked whether the heightened competition "really happened in the last four, five weeks?" according to a transcript.

Mr. Orr responded that the "uniformity and ubiquity" of the competition from Cisco was "rather dramatic." Mr. Orr didn't respond to requests for comment, and Mr. Gelblum declined to comment.

In May, shareholders filed suit in a California federal court, alleging that Aruba "purposefully downplayed the intense competition it was experiencing from Cisco." Aruba denies wrongdoing.

In the case of Novatel, the telecom-equipment maker that lost business from Sprint, the first sign of trouble came in January 2007 when Sprint notified the company it would cancel some planned orders for Novatel's big-selling product, a computer modem, according to court documents. Novatel had told investors that product was "a primary growth driver," according to the documents.

That May, when Sprint followed through on its warning, Mr. Weinert, then the acting CEO, sent an email to senior managers who now are defendants in the lawsuit, including current CEO Peter Leparulo. "We cannot loose [sic] all of our SPRINT business," his email said. "I made this clear in January didn't I??????"

The following month, on June 8, Mr. Weinert said in a news release: "We are currently seeing strong demand across our major product lines."

Between that May 14 and June 13, Messrs. Weinert and four other executives put in place new or amended preset trading plans calling for automatic sales. Under his plan, Mr. Weinert sold $3 million of his stock.

In court documents, Novatel and the other defendants have argued that the information about any lost Sprint business wasn't material, that insiders didn't believe it would affect the company's financial performance, and that sales by insiders weren't spurred by the Sprint development.

A Novatel spokeswoman says Sprint never canceled any current orders and that its customer "transitioned" from one product to another in the fall of 2007. Mr. Weinert didn't return calls for comment.

That July 20, analyst Anthony J. Stoss of Minneapolis's Craig-Hallum Capital Group published a note to clients saying he believed Novatel "may lose market share at Sprint," which he said accounted for 38% of Novatel's business at the time. Novatel stock closed down 5% that day. Mr. Stoss declined to comment.

Novatel raised its earnings guidance two more times in 2007 and said its outlook was bright. No mention was made of the change in Sprint orders. On an earnings call that Aug. 6, Mr. Weinert said: "We had an exceptionally strong first half of the year with Sprint."

That Nov. 5, Mr. Weinert said on an earnings conference call: "We don't see any shortage of demand…we are very optimistic."

Bad news arrived for investors about three months later, on Feb. 20, 2008, when the company announced disappointing fourth-quarter results and said first-quarter results in 2008 would be lower than expected, citing a shift in the market.

The next trading day, Novatel's stock declined by 22.9%.

Less than two months after that, on April 14, Novatel reported results that were $19 million lower than forecast, attributing the downturn to even weaker demand. The stock was hit hard, leaving it more than $6 below the $14-a-share level in early February.

That May 13, the company disclosed to investors that an "enhanced review of the accounting for a specific customer contract" would cause a delay in filing first-quarter results.

That August, the company said an internal accounting review would result in the lowering of first-quarter 2008 results by $3.4 million. It later said it had failed to provide "adequate training" regarding its "revenue recognition cutoff policies and procedures to ensure that revenues…were recognized in the proper period."

Jury selection in the case, which the judge has certified as a class action, is expected in January, according to lawyers who are involved.

Novatel's shares dropped to around $3.50 by November 2008 and haven't risen above $11 since 2011. Novatel stock closed at $2.14 in Nasdaq trading Wednesday.

Write to Susan Pulliam at susan.pulliam@wsj.com and Rob Barry at rob.barry@wsj.com

Quantitative Easer

if you want to hear from an insider about QE, here is it.

article from wsj

Andrew Huszar: Confessions of a Quantitative Easer

We went on a bond-buying spree that was supposed to help Main Street. Instead, it was a feast for Wall Street.

By

Andrew Huszar

Nov. 11, 2013 7:00 p.m. ET

I can only say: I'm sorry, America. As a former Federal Reserve official, I was responsible for executing the centerpiece program of the Fed's first plunge into the bond-buying experiment known as quantitative easing. The central bank continues to spin QE as a tool for helping Main Street. But I've come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time.

Five years ago this month, on Black Friday, the Fed launched an unprecedented shopping spree. By that point in the financial crisis, Congress had already passed legislation, the Troubled Asset Relief Program, to halt the U.S. banking system's free fall. Beyond Wall Street, though, the economic pain was still soaring. In the last three months of 2008 alone, almost two million Americans would lose their jobs.

The Fed said it wanted to help—through a new program of massive bond purchases. There were secondary goals, but Chairman Ben Bernanke made clear that the Fed's central motivation was to "affect credit conditions for households and businesses": to drive down the cost of credit so that more Americans hurting from the tanking economy could use it to weather the downturn. For this reason, he originally called the initiative "credit easing."

My part of the story began a few months later. Having been at the Fed for seven years, until early 2008, I was working on Wall Street in spring 2009 when I got an unexpected phone call. Would I come back to work on the Fed's trading floor? The job: managing what was at the heart of QE's bond-buying spree—a wild attempt to buy $1.25 trillion in mortgage bonds in 12 months. Incredibly, the Fed was calling to ask if I wanted to quarterback the largest economic stimulus in U.S. history.

Phil Foster

This was a dream job, but I hesitated. And it wasn't just nervousness about taking on such responsibility. I had left the Fed out of frustration, having witnessed the institution deferring more and more to Wall Street. Independence is at the heart of any central bank's credibility, and I had come to believe that the Fed's independence was eroding. Senior Fed officials, though, were publicly acknowledging mistakes and several of those officials emphasized to me how committed they were to a major Wall Street revamp. I could also see that they desperately needed reinforcements. I took a leap of faith.

In its almost 100-year history, the Fed had never bought one mortgage bond. Now my program was buying so many each day through active, unscripted trading that we constantly risked driving bond prices too high and crashing global confidence in key financial markets. We were working feverishly to preserve the impression that the Fed knew what it was doing.

It wasn't long before my old doubts resurfaced. Despite the Fed's rhetoric, my program wasn't helping to make credit any more accessible for the average American. The banks were only issuing fewer and fewer loans. More insidiously, whatever credit they were extending wasn't getting much cheaper. QE may have been driving down the wholesale cost for banks to make loans, but Wall Street was pocketing most of the extra cash.

From the trenches, several other Fed managers also began voicing the concern that QE wasn't working as planned. Our warnings fell on deaf ears. In the past, Fed leaders—even if they ultimately erred—would have worried obsessively about the costs versus the benefits of any major initiative. Now the only obsession seemed to be with the newest survey of financial-market expectations or the latest in-person feedback from Wall Street's leading bankers and hedge-fund managers. Sorry, U.S. taxpayer.

Trading for the first round of QE ended on March 31, 2010. The final results confirmed that, while there had been only trivial relief for Main Street, the U.S. central bank's bond purchases had been an absolute coup for Wall Street. The banks hadn't just benefited from the lower cost of making loans. They'd also enjoyed huge capital gains on the rising values of their securities holdings and fat commissions from brokering most of the Fed's QE transactions. Wall Street had experienced its most profitable year ever in 2009, and 2010 was starting off in much the same way.

You'd think the Fed would have finally stopped to question the wisdom of QE. Think again. Only a few months later—after a 14% drop in the U.S. stock market and renewed weakening in the banking sector—the Fed announced a new round of bond buying: QE2. Germany's finance minister, Wolfgang Schäuble, immediately called the decision "clueless."

That was when I realized the Fed had lost any remaining ability to think independently from Wall Street. Demoralized, I returned to the private sector.

Where are we today? The Fed keeps buying roughly $85 billion in bonds a month, chronically delaying so much as a minor QE taper. Over five years, its bond purchases have come to more than $4 trillion. Amazingly, in a supposedly free-market nation, QE has become the largest financial-markets intervention by any government in world history.

And the impact? Even by the Fed's sunniest calculations, aggressive QE over five years has generated only a few percentage points of U.S. growth. By contrast, experts outside the Fed, such as Mohammed El Erian at the Pimco investment firm, suggest that the Fed may have created and spent over $4 trillion for a total return of as little as 0.25% of GDP (i.e., a mere $40 billion bump in U.S. economic output). Both of those estimates indicate that QE isn't really working.

Unless you're Wall Street. Having racked up hundreds of billions of dollars in opaque Fed subsidies, U.S. banks have seen their collective stock price triple since March 2009. The biggest ones have only become more of a cartel: 0.2% of them now control more than 70% of the U.S. bank assets.

As for the rest of America, good luck. Because QE was relentlessly pumping money into the financial markets during the past five years, it killed the urgency for Washington to confront a real crisis: that of a structurally unsound U.S. economy. Yes, those financial markets have rallied spectacularly, breathing much-needed life back into 401(k)s, but for how long? Experts like Larry Fink at the BlackRock investment firm are suggesting that conditions are again "bubble-like." Meanwhile, the country remains overly dependent on Wall Street to drive economic growth.

Even when acknowledging QE's shortcomings, Chairman Bernanke argues that some action by the Fed is better than none (a position that his likely successor, Fed Vice Chairwoman Janet Yellen, also embraces). The implication is that the Fed is dutifully compensating for the rest of Washington's dysfunction. But the Fed is at the center of that dysfunction. Case in point: It has allowed QE to become Wall Street's new "too big to fail" policy.

Mr. Huszar, a senior fellow at Rutgers Business School, is a former Morgan Stanley managing director. In 2009-10, he managed the Federal Reserve's $1.25 trillion agency mortgage-backed security purchase program.

ROTE LEARNING

this article is for parents with young kids and teachers who have been through new style teaching should be aware of the goods of rote learning.

an article from wsj

What's 12 x 11? Um, Let Me Google That

Contrary to today's educational theories, memorization is critical in the classroom and life.

By

David G. Bonagura Jr.

Oct. 30, 2013 6:59 p.m. ET

I'm a bad teacher. Or so I would be labeled by today's leading education professionals. My crime? Not my classroom performance and not my students' test scores. The problem is that I require students to memorize.

My students learn proper grammar by drilling. They memorize vocabulary by writing given words and their definitions multiple times for homework, and then sitting the following day for an oral quiz. They memorize famous quotations by reciting them at the start of class each day.

For centuries, these pedagogical techniques were the hallmark of primary and secondary education. But once John Dewey's educational theories were adopted in public schools beginning in the 1940s, they fell out of vogue, ridiculed and rejected by education professionals across the country as detrimental to learning. In schools of education such techniques are derisively labeled "drill and kill" and "chalk and talk." Instead, these experts preach "child-centered" learning activities that make the teacher the "facilitator" in education, which is understood as a natural process of self-discovery.

This educational philosophy has driven every national educational initiative of the last several decades: New Math, Whole Language, Outcome-based Education and now the Common Core Standards that are being rolled out across the country.

Getty Images

All of the previous initiatives have at least three things in common. First, they didn't work. The U.S. still lags behind the world in education, even though each program, in its day, was touted as the means to bring our children to the top. Second, they all espoused the same child-centered educational philosophy, which has coincided with American students' mediocre performance in the classroom. Third, they rejected memorization out of hand.

Of course, all good teachers want their students to acquire not just basic knowledge, but a deeper, conceptual understanding that is manifested through critical thinking and analysis—skills that educational fads and initiatives rightly extol. But such thinking is impossible without first acquiring rock-solid knowledge of the foundational elements upon which the pyramid of cognition rests.

Memorization is the most effective means to build that foundation. Yet drilling multiplication tables, learning to spell, and reciting formulas and rules are almost nowhere to be found in today's classrooms, tarred as antithetical to true learning and even harmful for students.

My classroom experience proves otherwise. Once students have memorized a given set of vocabulary and grammar rules, they are able to apply their knowledge to more difficult concepts and activities. Having the fundamentals at the ready gives them both skill and confidence, two attributes that make learning effective and enjoyable. If they skipped the memory work on the grounds that the information can easily be found online, they would drown in a sea of URLs as they struggled to find the basic information necessary to answer the deeper questions.

Memorization doesn't need to be as odious as schools of education make it sound. In fact, memorization exercises in the classroom can be made exciting with a little ingenuity and humor on the part of the teacher. Elementary school students, whose minds are particularly fit for memorizing, but not yet ready for critical thinking, especially excel in these activities.

Even so, students are not likely to love doing homework or studying for tests. It's a safe bet they also don't like eating vegetables or going to bed early. But these are all necessary habits for good health.

In our technologically sophisticated culture, some people have concluded that memorization is no longer necessary since all the information we need is available at the push of a button or tap of a screen. But I shudder at what might have happened to the Apollo 13 flight crew if its NASA team had to spend precious minutes looking up multiplication tables, or what will happen if our government's national-security advisers needed to consult Wikipedia to shape their foreign policy decisions. If teachers compel their students to memorize basic facts about math, science, grammar, literature and history, then these students will be far more adept at responding to challenges when they become leaders.

Before we implement the same faulty educational philosophy disguised in the new dressings of the Common Core, memorization deserves to be reinstated to its foundational role in learning. Only then will American students have a core of knowledge that they can think critically about.

Mr. Bonagura is a teacher and writer in New York.

S&P500 update

click for better view

a reader has written to ask that dow has an opposite rsi trend while sp500 looks still a rising rsi.

i have not tracked sp500 usually since dow is quite a good estimate although sp500 is more indicative of the economy since it is composed of 500 largest companies in the states.

now look at this chart, a futures spot month chart of sp500 since i do not have a sp500 chart, it should be a good enough proxy.

sp500 has a good base looking towards 2260 [now only 1700], but it wont be happening right away, the slightly downward neckline confirms this trend. this trend forms over a five year span [2007-2012] so it should be quite accurate.

there are some reasons to the slightly bearish short term view vs a bull medium term view as:

• the rsi is sloping downwards while the sp500 is sloping upwards, in line with the dow trend [read earlier blogs on dow]. if you look back in history on this chart, an uptrend not supported by a rising rsi is followed by sharp corrections.
• the low reach in 2012 nov is about 1350 [1346 to be exact] and we are not in 2013 nov yet but we are now at 1700, a rise of 26%, do not forget the low reached is not a medium term low, it is only a correction, so the high reached is even more phenomenal. the earlier low is reached in 2012 may [just a few months earlier], that low is 1264. if you use the may low, the rise is 34%.

shd you have read this blog on earlier updates of hsi, it also is forming a strong base that can point to much higher levels provided it does not fall off the w [or 2v] trend as described earlier in this blog.

compare this update with earlier updates on dow and hsi.

the conclusion is - buy on corrections in steps not one off, do not chase up on highs as it is not cheap by any measure.

LEFT OUT IN THE COLD

an article from wsj, it shows how untrustworthy spy agencies are and govts as well.

Caught up in a terrorist rendition debacle, Robert Lady is wanted in Italy, lost his house and marriage, and says he has been abandoned by the CIA. Miami When the anniversary of 9/11 came around this year, Robert Seldon Lady was moving between lowend hotels around Miami. An international arrest warrant keeps him from returning to his home in Panama. He says he's flirting with bankruptcy, fears for his life, and is “getting pretty desperate.“ His marriage is broken. He blames this hard luck on his former employer, the Central Intelligence Agency. A decade ago, Mr. Lady served on the front lines of America's antiterror efforts after 9/11, heading up the agency's base in Milan. In the 2003 State of the Union address, President Bush credited him and his colleagues, albeit not by name, for dismantling several al Qaeda cells in that Italian city. “We've got the terrorists on the run,“ Mr. Bush said. “We're keeping them on the run.“ Mr. Lady's Italian stint capped a near quarter-century covert CIA career in Latin America, Asia and Europe. Three weeks later and a year before his planned retirement, Mr. Lady helped CIA contractors and agents snatch an Egyptian Islamist off the streets of Milan and deliver him to an interrogation cell in Cairo. This so-called extraordinary rendition--one of 130 or so carried out by the Bush administration--set in train events that soured America's relations with Italy and upended the life and career of Mr. Lady and other CIA agents. Saying “I'm fed up with all this,“ Mr. Lady has some extraordinary steps in mind to change his fate. His actions and outspokenness are going to add to the discomfiture of his former bosses at Langley over this messy episode from the early days after 9/11. On Feb. 17, 2003, Osama Mustafa Hassan Nasr, a heavyset and bearded man in his early 40s, went missing en route to midday prayers at his mosque in Milan. The CIA and Italian police considered the man, better known as Abu Omar, to be a recruiter for al Qaeda. His family and the Italian police had no inkling where he'd gone. Fourteen months later, Abu Omar emerged from jail, called his wife from Egypt and described his abduction and mistreatment in captivity. Italian authorities listened via a telephone tap on his home phone in Milan and started to look into a kidnapping. Their investigation led to the CIA and its man in Milan. The political mood in Italy, initially sympathetic to the U.S. in the wake of 9/11, turned to outrage when the alleged breach of sovereignty was revealed in 2005. An aggressive magistrate named Armando Spataro got indictments for 26 Americans and five Italians, the first known time that employees of the CIA had ever been prosecuted by a friendly government for doing their jobs. A judge brought separate terrorism charges against Abu Omar, but only the CIA case went to trial. The Americans were convicted in absentia. The debacle came to be known inside the agency as the “Italian job.“ Mr. Lady, who had planned to retire and become a security consultant from a farm house he bought with his life savings in Italy's Piedmont region, received the stiffest sentence--eight years in prison, increased to nine on appeal. Before the case went to trial, Magistrate Spataro sued to seize the house and use the proceeds to pay damages to Abu Omar. Mr. Lady fled Italy in 2005 and lost the property. His 30year marriage, he says, was another casualty. Of all the convicted agents, Mr. Lady is the only one who still faces prison time, which was reduced by the justice ministry to six years in 2012. He's also the only one whom the Italians are actively trying to catch. He was told by the U.S. government that an arrest warrant was issued by Italy last year, though he has not seen it. Two months ago Panama detained him for 24 hours but ignored calls from Italy's justice minister to hold him longer. The U.S. told him to leave his home and business in Panama at his own expense, he says, and lie low in the U.S. for a couple of years. Mr. Lady, who is 59, says he needs to travel internationally to make a living. Over dinner in Coral Gables with me and his lawyer, Tom Spencer, Mr. Lady calls himself “a piñata.“ After retiring from the CIA in 2004, he says he was on his own and an easy target: abandoned by the U.S. and scapegoated by the Italians. The intelligence agency “rallied around the [CIA] leadership to protect them,“ he adds. His cover in Milan was deputy consul working for the State Department, but the U.S. government didn't fight the Italians to honor his diplomatic immunity. The U.S. did assert diplomatic immunity for Jeffrey Castelli, the CIA's station chief in Italy and his boss, but it was eventually revoked by an Italian judge. Mr. Castelli was convicted on kidnapping charges in February and sentenced to seven years in prison, pending an appeal. Washington has never admitted that the agency was behind the rendition. “I'm a victim of American waffling,“ Mr. Lady says. “Italy is a very close ally“ and the U.S. government “should have come up with a solution.“ He says he received some compensation from the government but will only say it wasn't enough to cover his losses. The agency isn't paying his legal or any other costs now, he says. The politics of antiterrorism has changed in the U.S., and rendition is out of official favor even if it is still practiced. Mr. Lady says he has called phone numbers at CIA headquarters that he was once given, but with no luck: “I know they have instructions, `Don't answer him.' It feels bad that I gave them 24 years of my life, and I get treated like that. . . . As far as they're concerned, if I put a gun to my head and blew my head off, they'd be happy. The problem would be over. They would bring out the champagne.“ Telling his story, Mr. Lady layers his bitterness, which inevitably sounds self-serving at times, with an easy Latin manner. (He was born to an American father and Honduran mother and raised in Honduras.) While his travails have gotten a little attention in the U.S., Mr. Lady is a poster child for Bush-era antiterror policy in Italy. He's taking his appeals now to the Italian government. On Sept. 11 this year, he sent a letter to Italian President Giorgio Napolitano to ask for “personal forgiveness and legal pardon.“ Mr. Lady says he saved Italian and American lives by foiling multiple terror attacks. “I can assure you that at all times, I was informed that my activities were in accordance with United States, Italian and International law and vetted by very high officials,“ he wrote in the pardon appeal. Those officials who ordered and approved the Abu Omar rendition were never charged with a crime, he pointed out. Mr. Lady says he won't wait forever for Italy to answer. He's ready to take responsibility--as he says his bosses never have--and turn himself in “on my own terms,“ serve his prison sentence, and get his life back. He may be calling a bluff. Italy has never asked the U.S. to extradite the convicted agents. “If Italy believes they have the political will to arrest a former CIA officer and keep him in jail for six years, my hat goes off to them,“ he says. As the drama has played out, Mr. Lady has been depicted as either the central actor or a marginal CIA dissident. He offers the latter characterization, insisting that he fought the decision to abduct Abu Omar. Sabrina de Sousa, a CIA operative in Rome and Milan who was also convicted in absentia by the Italians, told MSNBC this summer: “Bob absolutely did not want to have this rendition take place.“ Ms. de Sousa still sued Mr. Lady and their boss in Rome, Jeff Castelli, for ruining her career. The case was dismissed. Mr. Lady says he opposed the Abu Omar snatch, but not rendition itself: “I think rendition is the second oldest profession, it has been happening forever.“ He helped organize the capture of drug kingpin Ramón Matta-Ballesteros from Honduras and transfer to the U.S. in 1988, he says. In 1998, Rome asked the U.S. to help extract an Italian mafia boss from his Latin American exile, says Mr. Lady. “He was in a country where he could pay judges and everybody,“ he says, declining to name the country or the don. “We lured this guy to Panama, grabbed him and turned him over to the Italians. No extradition, nothing.“ The abducted man was convicted in Italy, Mr. Lady says. More recently, Italy worked with the CIA to grab an al Qaeda member--a “high-level guy“--and put him into an Egyptian prison “forever,“ he says, but “I can't tell you the details.“ Thinking of his predicament, Mr. Lady says he's struck by “the hypocrisy of this whole thing.“ Bill Clinton approved extraordinary rendition, as has every president since. “In every rendition I have ever been involved in, the local government was a partner,“ Mr. Lady says, and Abu Omar was no exception. Who in Italy knew what about the Omar rendition remains unclear and controversial. The government of Silvio Berlusconi, then in power, denied direct knowledge. The brass at the CIA's Italian counterpart, the SISMI, was aware of the operation. An Italian policeman, who testified that he was tapped by Mr. Lady to take part, stopped Abu Omar on the street to check his documents seconds before American agents threw the cleric into a white van. Mr. Lady denies he recruited the policeman for the rendition, saying “I'm convinced that he was forced to say that so he could get immunity.“ He has no doubts the Italian government was on board. “Everything we did in Italy was joint. Everything,“ he says. “Italy is one of our closest allies. Our only interest in Italy was working on common targets.“ Mr. Lady, who arrived in Milan in 2000, developed close personal relationships with Italian counterterrorism police. He says he brought Abu Omar to the Italians' attention a month before 9/11, identifying him as rising militant. After the attacks on the World Trade Center and the Pentagon, field operatives were under pressure to produce “legitimate, actionable intelligence against terrorists,“ says Mr. Lady. “They were desperate times. We were working endless hours.“ He says his superior, Mr. Castelli, wanted to pull off a no table rendition just to help his own career. He calls Mr. Castelli “human exhaust“ and suggests the feeling was mutual. “Castelli hated me so much,“ Mr. Lady says, “that he wouldn't let me near an operation like that.“ (Mr. Castelli, who has since left the CIA, didn't respond to requests for comment submitted through his office.) The CIA station chief in Rome insisted on grabbing Abu Omar over objections from Mr. Lady and skep ticism in Washington, according to Mr. Lady and Ms. de Sousa. Mr. Lady says Abu Omar was “a bad guy“ but “not a major al Qaeda fig ure.“ His capture, the CIA agent worried, would irritate the Italian police, who had put in time and re sources to monitor him. Once Washington approved the rendition, Mr. Lady says he was told “either do it or get out of Dodge.“ Why not resign? “I was,“ he says with a long pause, “one year away from retirement. Would you throw away 23 years of your career and resign without a pension?“ As Italian investigators showed with excruciating detail, the “Italian job“ was sloppy tradecraft. The sev eral dozen agents brought in for the rendition--many more, says Mr. Lady, than the 20 identified by the Italians--used cellphones and paid hotel bills with credit cards that were easily traced back to them. Italian police raided Mr. Lady's house in 2005. They found a picture of Abu Omar on his computer and a flight reservation to Cairo from Zurich a few days after the IslaZina Saunders mist's rendition. He says he took part in some of the interrogation sessions in Egypt, but never saw Abu Omar tortured. Mr. Lady says the photo came from the Italian po lice and wasn't classified, as press accounts suggested. Still, he made a cardinal mistake of bringing a spy's work home. The Abu Omar case poisoned relations with the Italians and em barrassed the CIA. The fallout has also hurt antiterror efforts, Mr. Lady says: “Politics in Italy has made it so difficult to go after these characters. Throughout Europe you almost have to catch them with a bomb in their hands, and then if it doesn't blow up, they say it's a toy.“ The CIA's bloated bureaucracy has demoralized field agents like him, he adds. After spending several years in the custody of Egypt's Mukharabat without charge, Abu Omar lives to day in Alexandria, Egypt. He's a wanted man in Italy. Stuck in his own legal limbo, Mr. Lady says, “I'm a prisoner, serving time.“ He adds that the agency once told him it had picked up threats against him on al Qaeda Internet message boards. Sometimes, he says, “I wake up in the morning and say I want to shout to everyone, finally tell the truth about everything.“ The classi fied full story would cause a “scan dal,“ in his words. “But I can't. I made a vow and frankly I think I'm going to die with that vow.“ A vow to the CIA, the institution that you say betrayed you? “I made a vow to the flag. The institution, I clean my [expletive] with. My flag, I will never betray. I think the institu tion is betraying my country.“ Mr. Kaminski is a member of the Journal's editorial board.

P Diana Conspiracy

click for better view





www.dailymail.co.uk

Princess Diana, that SAS murder claim - and why it may not be as mad as you think,
says SUE REID

Sue Reid
By
PUBLISHED: 22:13 GMT, 30 August 2013 | UPDATED: 12:44 GMT, 31 August 2013

The final, haunting photo of Princess Diana, taken on the night she died, shows her sitting with her boyfriend Dodi Fayed in the back of a Mercedes car as it roars away from the rear entrance of the Paris Ritz Hotel, heading for the couple’s secret love-nest near the Champs-Elysees.

Diana is twisting her head to peer out of the Mercedes’ rear window, anxiously looking to see if her car is being chased by the paparazzi who had besieged her and Dodi since their arrival in the French capital from a Mediterranean holiday eight hours earlier.

At the wheel is chauffeur Henri Paul. Dodi’s bodyguard Trevor Rees-Jones is in the front passenger seat.
Scroll down for video
Picture 1 above

The haunting last picture taken of Diana shows her peering out the rear window to look for paparazzi. Trevor Ress and chauffeur Henri Paul are also pictured What happened over the next two minutes is central to a new probe by Scotland Yard into an astonishing claim from an SAS sniper, known as Soldier N, that members of his elite regiment assassinated Diana seconds after the Mercedes sped at 63mph into the notoriously dangerous Pont d’Alma road
tunnel.

Many will dismiss Soldier N’s claims as yet another conspiracy theory. After all, millions of words have been written about Diana’s death at 12.20am on Sunday, August 31, 1997. Two inquiries, by Scotland Yard and the French police, have found the deaths were a tragic  accident. An official inquest, which ended five years ago, came to the same conclusion. The world was led to believe the blame lay with the grossly negligent driving of an intoxicated Mr Paul and the pursuing paparazzi.

But — however unlikely they may seem at first glance — I am convinced there is something in Soldier N’s claims.

Ever since Diana’s death at the age of 36, I have investigated forensically the events that led up to the crash and what happened afterwards.

I have spoken to eye-witnesses, French and British intelligence officers, SAS soldiers and to friends of Diana and Dodi. And I have interviewed the Brittany-based parents of the 41-year-old chauffeur Henri Paul. They told me, with tears in their eyes, that their son was not a heavy drinker: his chosen potion was a bottle of beer or the occasional Ricard, a liquorice-flavoured aperitif.

The fact is that too many of these accounts suggest that Diana’s death was no accident.

Picture 2 above
Diana in a hotel lift with Dodi Fayed. Sue Reid believes there may be some truth in he Soldier N's claims

Crucially, my investigations show that the paparazzi who supposedly hounded Diana to her death were not even in the Pont d’Alma tunnel at the time of the car crash.

They also reveal how a high-powered black motorbike — which did not belong to any of the paparazzi — shot past Diana’s Mercedes in the tunnel.

Eyewitnesses say its rider and pillion passenger deliberately caused the car to crash.

In addition, my inquiries unearthed the existence of a shadowy SAS unit that answers to MI6, as well as the names of two MI6 officers who were linked by a number of sources to Diana’s death.

Could the Establishment really have turned Henri Paul and the paparazzi into scapegoats? Could there have been a skilful cover-up by people in powerful places to hide exactly what did happen?

There is little doubt that Diana, recently divorced from Prince Charles, was a thorn in the side of the Royal Family. Her romance with Dodi, though only six weeks old, was serious.

The Princess had given her lover her ‘most precious possession’ — a pair of her deceased father’s cufflinks — and phoned friends, saying she had a ‘big surprise’ for them when she returned from Paris.




Picture 3 above
Dodi had slipped out of the Ritz Hotel, as Diana was having her hair done, to collect a jewel-encrusted ring adorned with the words ‘Tell Me Yes’ from a swanky Paris jeweller. It came from a collection of engagement rings.

Rumours were circulating, too, that the Princess was pregnant. Photographs of her in a leopard-print swimsuit, on holiday in the South of France 14 days earlier, show an unmistakable bump around her waistline.

And, as the Mail revealed after Diana’s death, she had visited — in the strictest secrecy — a leading London hospital for a pregnancy scan just before that photo was snapped.

To add to the disquiet, the mother of a future King of England and head of the Church of England was threatening to move abroad with her Muslim boyfriend and take the royal Princes, William and Harry, with her.

Dodi had bought an estate, once owned by film star Julie Andrews, by the beach in Malibu, California, and shown Diana a video of it. He told her the sumptuous house was where they would spend their married life.

Ostracised by the Royal Family and stripped of her HRH title, Diana was said to be excited by the prospect.

Dodi’s father, Mohamed Al Fayed, the multimillionaire former owner of Harrods, insists Diana was pregnant by his son and preparing to tell the young Princes about her forthcoming marriage when she returned to Britain on September 1 — the day after the crash — before they went back to boarding school.

However far-fetched it sounds, all the Establishment concerns about Diana were genuine. But could this really have led to her assassination? And if so, how could it have been carried out?

These questions are partially answered by the compelling testimony of 14 independent eyewitnesses near the crash scene that night.





They say Diana’s car was surrounded at the entrance to the Alma tunnel by a phalanx of cars and motorcycles, which sped after the Mercedes.






Picture 4 above
Conspiracy theories have long surrounded Diana's death in Paris in 1997 despite the official finding that it was an accident caused by paparazzi photographers

The assumption has always been that the cars and bikes were carrying the paparazzi. By the Monday morning after the crash, outside the Alma tunnel, a huge message had appeared. ‘Killer paparazzi’ had been sprayed in gold paint on the walls.

No one, to this day, knows who put it there — or why they were not stopped by the French authorities from doing so.

Yet the paparazzi following Diana did not reach the Pont d’Alma tunnel until at least one minute after the crash, so they cannot be to blame.

Indeed, two years later they were cleared of manslaughter charges after the French state prosecutor said there was ‘insufficient evidence’ of their involvement in Diana’s death.

What happened is that the paparazzi had been deceived. In a clever ploy devised by Henri Paul, the Ritz had placed a decoy Mercedes at the front of the hotel to confuse the photographers, which allowed the lovers to slip out of the back door into a similar car.

The last picture of Diana peering from the rear window was taken by a France-based photographer who had seen through the ruse and was standing on the pavement by the hotel’s rear entrance watching as the ‘real’ Mercedes sped off.

Picture 5 above
The allegation that Princess Diana was murdered by the SAS is under investigation Yet that Mercedes was definitely being hotly pursued when in the tunnel. The independent witnesses insist it was being followed not only by the black motorbike, but by two speeding cars, a dark saloon and a white turbo Fiat Uno.

There is no evidence to link these cars or the motorcycle to the paparazzi who had been waiting at the Ritz.

The saloon tail-gated the Mercedes,  which made the chauffeur — thinking, wrongly, he was being pursued by paparazzi — drive even faster and more erratically. Meanwhile, the Uno accelerated, clipping the side of the Mercedes to push it to one side.

This maneuver allowed the black motorbike to speed past Diana’s car, with its two riders wearing helmets that hid their faces.

Witnesses claim that when the bike was about 15ft in front of the car, there was a fierce flash of white light from the motorbike. The suggestion is that this came from a laser beam carried by  the pillion passenger and directed at the car.

The witnesses’ view is that the flash of light blinded Henri Paul temporarily. It was followed by a loud bang as the limousine swerved violently before slamming into the 13th pillar in the tunnel and being reduced to a mass of wrecked metal.

One of those eyewitnesses, a French harbour pilot driving ahead of the Mercedes through the tunnel, watched the scene in his rear-view mirror.

Chillingly, he recalls the black motorbike stopping after the crash and one of the riders jumping off the bike before going to peer in the Mercedes window at the passengers.

The rider, who kept his helmet on, then turned to his compatriot on the bike and gave a gesture used informally in the military (where both arms are crossed over the body and then thrown out straight to each side) to indicate ‘mission accomplished’.

Afterwards, he climbed back on the motorcycle, which raced off out of the tunnel. The riders on the bike, and the vehicle itself, have never been identified.

The harbour pilot, whose wife was with him in the car, has described the horrifying scenario as resembling a ‘terrorist attack’.

So, who could have been driving the bike and the other vehicles that did follow Diana’s car into the Alma tunnel that night?

Picture 6 above
Princess Diana and with Dodi Fayed (pictured together on the night they died) were killed alongside Henri Paul when the car crashed in a Paris tunnel

Could they really have been part of the plot to get rid of Diana and her lover — a plot orchestrated by MI6 or the SAS regiment, as the latest sensational claims suggest?

After Diana’s death, I received a nine-line note in the post containing the names of two MI6 men who have spent their entire careers working at the heart of the British Establishment,  representing the Government as senior diplomats, whom I will call X and Y.

Written in blue felt-tip pen on a flimsy piece of paper ripped from an A4 exercise book, the note said: ‘If you are brave enough, dig deeper to learn about X and Y. Both MI6. Both were involved at the highest level in the murder of the Princess.’ It signed off with the words: ‘Good luck.’

Of course, an unsigned note does not provide firm evidence, or anything like it, that MI6 spies  were operating in Paris that evening or were connected with Diana’s death.

Yet their names came up again when I received a call from a well-placed source within the intelligence services.

Picture 7 above
The families of Henri Paul and Dodi al Fayed (pictured with Princess Diana) have always
believed their was a murder plot

He named the same two men, X and Y, who had overseen the ‘Paris operation’ and said the crash was designed to frighten Diana into halting her romance with Dodi because he was considered an unsuitable partner.

‘We hoped to break her arm or cause a minor injury,’ said my informant. ‘The operation was also overseen by a top MI6 officer known as the tall man, who is now retired and living on the Continent. He admits it went wrong. No one in MI6 wanted Diana to be killed.’

And this week the men’s names were mentioned again, this time by Moscow intelligence.

According to the author of a new book, the Russian Foreign Intelligence Service, the SVR,
knew that X and Y were in Paris on the night Diana died. And after the car crash the SVR set out to find out why.

Gennady Sokolov, whose book The Kremlin vs The Windsors will be published next year, told me this week: ‘Of course our people were following your agents.

They were senior MI6 officers operating secretly in Paris that night, without the knowledge of even French counterintelligence. They left again after she was dead.

‘Her relationship and possible marriage to Dodi was deeply worrying to senior royals in Britain. The Princess’s phone was constantly listened to and she was followed all the time.

‘After the crash, public opinion was deliberately led astray. Scapegoats were created, such as the paparazzi and the drunk driver. There was a dance around Henri Paul, saying he was an  alcohol addict, a virtual kamikaze, who helped to destroy them all. It is total nonsense.

‘From the very beginning, it was clear to me it was not just an accident. My sources in the SVR and other Russian secret services are sure it was a very English murder.

‘They have talked to me about an SAS squad called The Increment, which is attached to MI6, being involved in the assassination.

‘These guys work on the top level without leaving a single trace, and — perhaps — one was on the motorbike following Diana’s car.’ But why did none of this extraordinary story come out at the inquest into Diana’s death, which should have been the final word on it?

It’s true that 14 tunnel witnesses were at least allowed to appear or send their testimonies. But much of their vital information was completely submerged by the sheer volume of evidence  presented over the six months of the hearing.

We heard that chauffeur Henri Paul and Dodi Fayed were killed instantly; that the sole survivor was the bodyguard Trevor Rees Jones, who suffered such devastating facial injuries he has no memory of events in the tunnel, and that with the pulmonary vein in her chest torn, Diana died  nearly four hours later of heart failure and blood loss at Paris’s Pitie Salpetriere hospital.

But we also know that the inquest never unravelled the full truth. More than 170 important witnesses, including the doctor who embalmed Diana’s body (a process that camouflages  pregnancy in post-mortem blood tests) were never called to the inquest.

One radiologist from Pitie Salpetriere hospital, who said that she had seen a small foetus of perhaps six to ten weeks in the Princess’s womb during an X-ray and a later sonogram of her body, was not questioned.

Picture 8 above
Diana with Dodi's father, Mohammed Al Fayed, who has always said that she was pregnant

Instead, she was allowed by the judge heading the inquest, Lord Justice Scott Baker, to send a statement giving her current address in America and no more details.

Crucially, the hearing was cruelly unfair to chauffeur Henri Paul, who was vilified from the beginning.

On the day after the crash, French authorities insisted that he was an alcoholic and ‘drunk as a pig’ when he left the Ritz that night to drive the lovers to Dodi’s Paris apartment near the Champs-Elysees.

It has since emerged that the blood tests on Paul’s body had not been completed when they made the announcement to journalists. Furthermore, the chauffeur had passed an intensive medical examination for flying lessons three days before the crash — his liver showed no sign of alcohol abuse.

A string of witnesses at the Ritz say Paul drank two shots of his favourite Ricard at the bar before taking to the wheel, which was confirmed by bar receipts at the hotel.

However, after a shambolic mix- up over his blood samples (deliberate or otherwise), it was pronounced by a medical expert at the inquest that Paul had downed ten of the aperitifs, was twice over the British driving limit and three times over the French one, when he drove the Mercedes that night.

Today is the 16th anniversary of Diana’s death and there are bunches of fresh flowers on the gilded gates leading to her London home, Kensington Palace. The flowers to commemorate the Princess may be fewer now, but there are still as many questions into her death as ever.

more videos

http://www.youtube.com/watch?v=e-wXcJA-et0

http://www.youtube.com/watch?v=Ue-MLMnlTzY

http://www.youtube.com/watch?v=KlWSv0NZBRw

http://www.youtube.com/watch?v=afUS_58XC5I

funny videos

funny videos you should watch:

http://www.youtube.com/watch?v=dkamZg68jpk#t=353

http://www.youtube.com/watch?v=W9iyjRgDZoE

http://www.youtube.com/watch?v=XFvzWvqfrOU

http://www.youtube.com/watch?v=WIEWUYebrrY

FIVE rules to better investing

i read a lot on investing and sometimes we come across rules given by pros that  are quite worth adhering to, here below are five by brian hicks of wealth daily:


Note: My rules don't address specific sectors, because sectors that are in favor one decade won't be the next; this is a template for investing in any market sector in any market environment.

1. Protect the cash: That’s how fortunes are made.
   Depending on the market environment, there are times when I make five trades in a day.
   
   But there are also times when there’s no investment to make. I’ve gone days, weeks, even months without deploying investment capital... but when I’m ready, I have a nice big bankroll to use. So be patient.
2. You need to take 100% control.
   As my above experience proves, you need to have 100% control of your financial destiny. If your broker or money manager dismisses your concerns, questions, or objections, fire him immediately.
3. Liquidity.
   Make sure the investments you are in are liquid. If you get stuck in an investment that goes “no bid,” you could be in an investment (housing, for example) for months, even years, with no way out.
4. Trust your instincts.
   If something doesn’t feel right, chances are it’s not. This is why investment newsletters like Wealth Daily exist: The editors at Wealth Daily do not get paid by pitching funds or stocks (like money managers). We get paid by the success of our investment ideas. If you make money from our ideas, you stay with us — if you lose money, you leave us. Pure and simple.
   
   And finally...
5. If you’re going to speculate, go where the boom is.
   This one really is simple. As you know, we’ve been following the boom in the Bakken oil shale and the boom in the Marcellus for years. In fact, we were one of the first investment newsletters to bring this to your attention.
   
   Companies heavily involved in the Bakken are making money hand over fist — and so are the shareholders of those respective companies.

The new American poor: 4 in 5 live in danger of it

this is what is happening now in the usa, not the headline numbers you read from the media, below is a worth reading article from AP.

Debra McCown | AP

Four out of five U.S. adults struggle with joblessness, near-poverty or reliance on welfare for at least parts of their lives, a sign of deteriorating economic security and an elusive American dream.

Survey data exclusive to The Associated Press points to an increasingly globalized U.S. economy, the widening gap between rich and poor, and the loss of good-paying manufacturing jobs as reasons for the trend.

The findings come as President Barack Obama tries to renew his administration's emphasis on the economy, saying in recent speeches that his highest priority is to "rebuild ladders of opportunity" and reverse income inequality.

As nonwhites approach a numerical majority in the U.S., one question is how public programs to lift the disadvantaged should be best focused — on the affirmative action that historically has tried to eliminate the racial barriers seen as the major impediment to economic equality, or simply on improving socioeconomic status for all, regardless of race.

(Read more: Poverty rate to hit highest level since 1965: economists)
[Jobless claims up 7,000] PLAY VIDEO CNBC's Rick Santelli reports that initial jobless claims were up 7,000 to 343,000 this week, while durable goods are up 4.2 percent. With Richard Bernstein, Steve Liesman, and Tom Higgins, BNY Mellon's Standish Investment Management.

Hardship is particularly growing among whites, based on several measures. Pessimism among that racial group about their families' economic futures has climbed to the highest point since at least 1987. In the most recent AP-GfK poll, 63 percent of whites called the economy "poor."

"I think it's going to get worse," said Irene Salyers, 52, of Buchanan County, Va., a declining coal region in Appalachia. Married and divorced three times, Salyers now helps run a fruit and vegetable stand with her boyfriend, but it doesn't generate much income. They live mostly off government disability checks.

"If you do try to go apply for a job, they're not hiring people, and they're not paying that much to even go to work," she said. Children, she said, have "nothing better to do than to get on drugs."

While racial and ethnic minorities are more likely to live in poverty, race disparities in the poverty rate have narrowed substantially since the 1970s, census data show. Economic insecurity among whites also is more pervasive than is shown in the government's poverty data, engulfing more than 76 percent of white adults by the time they turn 60, according to a new economic gauge being published next year by the Oxford University Press.

(Read more: What is 'wealthy'? $5 million and plenty of cash)

The gauge defines "economic insecurity" as a year or more of periodic joblessness, reliance on government aid such as food stamps or income below 150 percent of the poverty line. Measured across all races, the risk of economic insecurity rises to 79 percent.

Marriage rates are in decline across all races, and the number of white mother-headed households living in poverty has risen to the level of black ones.

"It's time that America comes to understand that many of the nation's biggest disparities, from education and life expectancy to poverty, are increasingly due to economic class position," said William Julius Wilson, a Harvard professor who specializes in race and poverty. He noted that despite continuing economic difficulties, minorities have more optimism about the future after Obama's election, while struggling whites do not.

"There is the real possibility that white alienation will increase if steps are not taken to highlight and address inequality on a broad front," Wilson said.

Nationwide, the count of America's poor remains stuck at a record number: 46.2 million, or 15 percent of the population, due in part to lingering high unemployment following the recession. While poverty rates for blacks and Hispanics are nearly three times higher, by absolute numbers the predominant face of the poor is white.

More than 19 million whites fall below the poverty line of $23,021 for a family of four, accounting for more than 41 percent of the nation's destitute, nearly double the number of poor blacks.

Sometimes termed "the invisible poor" by demographers, lower-income whites generally are dispersed in suburbs as well as small rural towns, where more than 60 percent of the poor are white. Concentrated in Appalachia in the East, they are numerous in the industrial Midwest and spread across America's heartland, from Missouri, Arkansas, and Oklahoma up through the Great Plains.

Buchanan County in southwest Virginia is among the nation's most destitute based on median income, with poverty hovering at 24 percent. The county is mostly white, as are 99 percent of its poor.

More than 90 percent of Buchanan County's inhabitants are working-class whites who lack a college degree. Higher education long has been seen there as nonessential to land a job because well-paying mining and related jobs were once in plentiful supply. These days many residents get by on odd jobs and government checks.

Salyers' daughter, Renee Adams, 28, who grew up in the region, has two children. A jobless single mother, she relies on her live-in boyfriend's disability checks to get by. Salyers says it was tough raising her own children as it is for her daughter now, and doesn't even try to speculate what awaits her grandchildren, ages 4 and 5.

Smoking a cigarette in front of the produce stand, Adams later expresses a wish that employers will look past her conviction a few years ago for distributing prescription painkillers, so she can get a job and have money to "buy the kids everything they need."

"It's pretty hard," she said. "Once the bills are paid, we might have $10 to our name."

Census figures provide an official measure of poverty, but they're only a temporary snapshot that doesn't capture the makeup of those who cycle in and out of poverty at different points in their lives. They may be suburbanites, for example, or the working poor or the laid off.

In 2011 that snapshot showed 12.6 percent of adults in their prime working-age years of 25-60 lived in poverty. But measured in terms of a person's lifetime risk, a much higher number — four in 10 adults — falls into poverty for at least a year of their lives.

The risks of poverty also have been increasing in recent decades, particularly among people ages 35-55, coinciding with widening income inequality. For instance, people ages 35-45 had a 17 percent risk of encountering poverty during the 1969-1989 time period; that risk increased to 23 percent during the 1989-2009 period. For those ages 45-55, the risk of poverty jumped from 11.8 percent to 17.7 percent.

Higher recent rates of unemployment mean the lifetime risk of experiencing economic insecurity now runs even higher: 79 percent, or four in five adults, by the time they turn 60.

(Read more: 'Alarming' unemployment could get worse: ILO)

By race, nonwhites still have a higher risk of being economically insecure, at 90 percent. But compared with the official poverty rate, some of the biggest jumps under the newer measure are among whites, with more than 76 percent enduring periods of joblessness, life on welfare or near-poverty.

By 2030, based on the current trend of widening income inequality, close to 85 percent of all working-age adults in the U.S. will experience bouts of economic insecurity.

"Poverty is no longer an issue of 'them,' it's an issue of 'us,'" says Mark Rank, a professor at Washington University in St. Louis who calculated the numbers. "Only when poverty is thought of as a mainstream event, rather than a fringe experience that just affects blacks and Hispanics, can we really begin to build broader support for programs that lift people in need."

The numbers come from Rank's analysis being published by the Oxford University Press. They are supplemented with interviews and figures provided to the AP by Tom Hirschl, a professor at Cornell University; John Iceland, a sociology professor at Penn State University; the University of New Hampshire's Carsey Institute; the Census Bureau; and the Population Reference Bureau.

Among the findings:

For the first time since 1975, the number of white single-mother households living in poverty with children surpassed or equaled black ones in the past decade, spurred by job losses and faster rates of out-of-wedlock births among whites. White single-mother families in poverty stood at nearly 1.5 million in 2011, comparable to the number for blacks. Hispanic single-mother families in poverty trailed at 1.2 million.

Since 2000, the poverty rate among working-class whites has grown faster than among working-class nonwhites, rising 3 percentage points to 11 percent as the recession took a bigger toll among lower-wage workers. Still, poverty among working-class nonwhites remains higher, at 23 percent.

The share of children living in high-poverty neighborhoods — those with poverty rates of 30 percent or more — has increased to 1 in 10, putting them at higher risk of teenage pregnancy or dropping out of school. Non-Hispanic whites accounted for 17 percent of the child population in such neighborhoods, compared with 13 percent in 2000, even though the overall proportion of white children in the U.S. has been declining.

US poverty to hit highest level since 1965

here is an old article from RT, but very much worth reading as the media is not telling you the truth.

US poverty to hit highest level since 1965

Published time: July 22, 2012 17:40
Edited time: July 22, 2012 21:40

Poverty in the US is projected to spread at record levels unseen since the 1960s, affecting many groups including underemployed workers, suburban families and the poorest of America's poor.

­As unemployment aid dwindles and workers grow increasingly discouraged, poverty is reaching every corner of the US. In 2010, a family of four with a pre-tax income of  $22,314 was considered below the poverty line, while an individual with a pre-tax income of $11,139 would have the same status.

The Associated Press surveyed economists, think tanks and nonpartisan academics to estimate the rapidly escalating poverty rate. 2010's poverty rate of 15.1 per cent would only need to increase by 0.1 per cent to surpass what Americans faced in 1965 – but this year, the poverty level is estimated to grow to 15.7 percent.

US poverty reached 22.4 per cent in the late 1950s, and steadily declined throughout the 1960’s.

“I’m reluctant to say that we’ve gone back to where we were in the 1960s,” said Peter Edelman, director of the Georgetown Center on Poverty, Inequality and Public Policy. “The programs we enacted make a big difference. The problem is that the tidal wave of low-wage jobs is dragging us down and the wage problem is not going to go away anytime soon.”

Analysts interviewed by AP estimate that one sixth of the US population – some 47 million people – lived below the poverty line last year. Demographers predict the peak poverty levels to last at least until 2014 “due to expiring unemployment benefits, a jobless rate persistently above 6 per cent and weak wage growth.”

“I grew up going to Hawaii every summer,” said Colorado resident Laura Fritz, 27, as she filled out aid forms at a county center. “Now I’m here, applying for assistance because it’s hard to make ends meet. It’s very hard to adjust.”

Fritz grew up wealthy until her parents lost most of their money during the housing crisis. While still living in their half-million dollar house, they began to live off of food stamps. Lacking the funds to go to college, the young woman tried joining the army, only to become injured during basic training, she said.

With a baby and a boyfriend who can’t find work, Fritz pays rent with her disability checks and his unemployment checks.

And as the poverty rate remains at its current level, Americans aged 65 and older will suffer most as they become dependent on their Social Security payments.

“I’ve always been the guy who could find a job. Now I’m not,” 56-year old Dale Szymanski told AP. “You keep thinking it’s going to turn around. But I’m stuck.”

And the future looks bleak even to US lawmakers. Federal Reserve Chairman Ben Bernanke told the Senate Banking Committee last week that reducing unemployment is “likely to be frustratingly slow.” The chairman predicted that unemployment will still be at 7 per cent or higher by the end of 2014, and that the average increase in new jobs has been shrinking by about 75,000 per month since April.

The outlook is dismal, and some American voters have lost faith in politicians to turn the economy around. But the economy remains the number one issue for voters as the 2012 elections approach, and is expected to continue to dominate the debate.