Fears of Crime Wave Grow in Canada

Two articles call out fears of crime wave happening in Canada.

From Toronto -- Agencies brace for crime wave
Experts say 2009 may mimic recession of 1990, when job loss drove people to desperate measures, Dec 27, 2008 04:30 AM, Robyn Doolittle STAFF REPORTER

"No one knew exactly how bad it was going to get, but economists warned of a difficult year ahead. It was December 1990. All predictions indicated a deepening recession and further job cuts. Worse still, a rapidly emerging crime wave was beginning to paralyze the city. Two weeks before Christmas, Toronto was hit by a record 26 robberies in one day – banks, cabs, stores, restaurants, pedestrians – many involving weapons. It was more than just a holiday blitz.
Police blamed the deteriorating economy and rising unemployment. Things only got worse in 1991, when Ontario experienced record high crime rates. It wasn't until the mid-1990s that the numbers began to taper off. Today, the GTA is one of the safest regions in Canada. The last decade has seen dramatic – and consistent – decreases in almost every criminal classification.
But now some experts are worrying that history may soon repeat itself."

From Alberta -- Canadians prep for economic induced crime wave.
By TAMAS VIRAG, SUN MEDIA, January 28, 2008.

"Cops and criminologists are warning that a serious downturn of Ontario's economy could mean more organized crime for Alberta. ""People go where there's money. If there's money here and it's disposable, someone's going to be looking for a piece of it," Sgt. Peter Ratcliff of the Edmonton Police Association said yesterday. "What that might look like, I don't really know." Criminologist Bill Pitt, however, has an idea of what that future may look like. And it's not pretty.
"You're going to see more narcotics on the street, pushed at lower prices. You're going to see more prostitution on the street, pushed at lower prices," he said, adding that the fallout from an increased number of gangs competing for one of the last pieces of prime Canadian turf might reach rarely seen proportions. "I think there's going to be issues between and among organized crime groups that are going to be fought out in the street, as they were in the recession in the '30s in Chicago ... fighting for dominance," he said, adding that all-out gang warfare - such as the one seen a decade ago in Quebec between two competing biker gangs - is not out of the question.
Part of the problem, he continued, is that police forces in Alberta have been facing west, working hard to keep out bad influences from Vancouver, but have largely ignored threats from the East.
"It's our back door and it's wide open ... I think we're going to see more movement from the East, we're going to see more intrusion from major organized crime," he said. "We're playing catch-up to them, and they're on the way."

Australia, UK, and US prepare for financial crises led Crime Wave

Preparations for economic misery led crime wave are being made in Australia, UK, and in parts of the US. Others will join the preparation bandwagon as unemployment rises in the coming year. Researchers point to a one-year time lag between the onset of significant negative financial events that cause economic misery (including unemployment, loss of purchasing power, asset devaluation) and crime waves. Preparations are now being made for this likely consequence of our steep financial downturn. From recent headlines we read the following.

Australia's Victorian police warning as hard times spur crime wave
The Australian reported on 12/27/08, "POLICE are bracing for a new wave of economic crimes driven by the financial crisis and rising unemployment, such as theft and burglary, after studying crime patterns from the previous downturn. Senior officers have drawn on crime statistics from the 1990 recession, when so-called property crime jumped sharply, to pinpoint the types of offences expected to rise as the financial crisis deepens."

The Australian further reported, "By tracking crimes over the past six months, police have found offences such as theft of valuables from motor vehicles, house burglaries, street robberies, handbag and wallet theft, shoplifting and other types of theft have begun to rise, as they did in 1990. Victoria's Deputy Commissioner of Police Kieran Walshe told The Weekend Australian: "We are starting to see crimes against property beginning to trend upwards. We have also seen an increase in petrol theft and those sorts of things. "Those are the kind of things potentially that are going to increase if you have a slowing economy. Particularly as unemployment starts to rise, that's going to cause people in some circumstances to seek other means of getting money."
With the article, the Australian reports, “Crime figures show that, in 1990-91, there was a sharp jump in property crime in Victoria compared with the previous year. Theft rose 13.6 per cent, robbery 12.3 per cent and burglary 8.1 per cent. The rates of those crimes began falling again as the economy began to pick up in following years. Victoria Police this month arrested a gang that had carried out eight ram-raids on retail outlets in Melbourne's northern and western suburbs in recent months, resulting in $700,000 in stolen and damaged property. About $150,000 in stolen goods was recovered. Mr Walshe said research on previous economically driven crime sprees would help develop preventative strategies, such as increasing police patrols in certain areas or encouraging the community to be more vigilant. “

UK public officials prepare for crime wave
Martin Gill, Ph.D., the well-respected criminologist cross-over Academic/Practioner, wrote the following this past week in his monthly Perpetuity newsletter to industry colleagues -- "Will crime rates rise with the failing economy? The Home Secretary, Jacqui Smith, certainly thinks so warning that violent crime could grow by nearly a fifth based on increases seen during the 1991-2 recession. But the academic evidence suggests that won't be the only crime type that's set to rise; fraud, forgery, burglary, robbery, theft, and arson have all been linked to recession and unemployment So what does this mean for you? It's clear that at a time when budgets are being reduced cutting back on security is not an easy option; with crime rates set to rise cutting back on security could result in rising costs of crime. Instead it's a good time to review your existing processes to identify any opportunities to improve efficiency and work smarter to cut costs, achieving greater value for money. "

US law enforcement prepares for crime wave, not uniformly, but in noticeable hotspots
Within the US, police chiefs are preparing for a coming crime wave of sorts, from the experienced professionals such as Chief Bratton of LAPD, to others that are dealing with increasing crime rates in south Florida, the Midwest and other locations impacted by economic misery harder than most.

Unemployment continues to rise; business capital still contracting; nimbleness key

On unemployment. This morning CNBC posted a list of firms that have announced or pre-announced job cuts at their firms. The article appears under the heading, "Layoffs Continue to Grow—Is Your Firm on the List?" http://www.cnbc.com/id/28193752/page/2/ The article relates a sizable list of firms that have reported job increases, but does not state how many of these have already occurred, leaving us to guess on how many job losses might be yet to come.

On business capital availability. Despite the optimism voiced by market pundits that report that we are bottoming, or near a bottom, there is still no bottom in site. Businesses are dealing with a sharp drop off in demand since 9/15/08. Some businesses will not recover through Q4, and are expected to file bankruptcy in 2009. The only certainty is that the future is cloudy, capital is still tight, and for-profit businesses are seeking to jettison costs to get to cash-flow positive, or bust. On this note, I have observed recently that several companies operating on business models based on debt-based growth are now dead. Cool technologies are locked in bankruptcy, proving once again that supply does not create demand, and oversupply for goods that don't sell can be costly. The market sentiment towards debt has now come full circle. Vultures look ready to pick the bones of bankrupt companies for pennies on the dollar.

Nimbleness. In these times, it pays to be quick to respond, proactive in cutting costs, focusing spending on needs and not wants. There is opportunity, but you must be willing to get out of your comfort zone and seize it. The age of debt-based finance business strategies is over for a season, perhaps longer. Promising companies that appeared to have great technologies and rapid growth that were funded on debt are now falling fast. Calls from business owners looking to dump their cash-guzzling business units are increasing and there is little capital out there for continuing operations beyond factoring receivables, that assumes companies are indeed making money. Just like the Kenny Rogers line, you need to know when to hold them, and know when to fold them. Some business plans are dead now, and it takes a brave heart to move nimbly and thoughtfully to where the cheese has been moved.

Future opportunities. I mentioned in an earlier post that my own security consulting business experienced a 'lock-up' or freezing of pipeline of sorts since 9/15/08, as a sizable block of contract suspensions and stop-work orders were focused on future construction projects where the monies for job completion were uncertain. At the same time as the construction related pipeline was freezing, I noticed a small bounce in restructuring related security consulting opportunities, which bounce has now turned into a sizable bounce. Being nimble means being willing to move on from the old plan when it is not working. What is working today is focusing businesses on reducing operating costs through restructuring and replacing routine manned operations by automated processes where possible. Remote monitored and delivered business process business opportunities are huge. While the economy is clearly down, buildings, physical assets, and other operations frequently remain with tighter budgets -- and having a labor saving technology to automate routine processes to save time and money are the new rage.

Lessons from Life in the Great Depression (1930s)

From the collapse of the NY Stock Market in 1929, economic misery spread quickly throughout the country. The misery started first in the financial sectors most hit by the crash, and then the circle of waves of bank failures, insurance company failures, and business failures vibrated out into the broader economy in unemployment and lost wealth. Locations like Idaho were somewhat isolated from the financial shocks for a short season, but within one year, all were to come and understand the devistation of capital and crises of confidence in the broader economic markets.

The photo shown aside is a clip from a riot of unemployed individuals marching to protest their unemployment as they sought jobs to feed their familes. http://www.5min.com/Video/The-Great-Depression-1354261

The debt that the US has amounted today, and that political leaders are throwing at the severe recession is unparalled in scope or size. If current stimulous and market stabillity funding fails to support the current economic base, then home prices may fall further, and we may see another downfall of mortgages and abandoned homes. Consumer credit cards, commerical loans, and commercial real estate appear to be next for the downturn.

While our times have certainly changed in terms of population, communications, transportation, technology, and culture -- it would behoove us all to be mindful of the past and take whatever lessons we might gleam from our history. In this post I put up a few stories of people who describe living through the Great Depression.




There will be many that look to the past to see what we can learn. One short film that was prepared recently was one that covered the lives of five individuals that lived through the Great Depression. http://www.youtube.com/watch?v=hbEVeKIghCk

Recent Business Leaders Survey reporting upwards of 18-24% Increase in Employee Crime

Crime and unemployment are inexorably linked together, and frequently move in step. Research on the relationship of crime and unemployment shows mixed results, sometimes showing a relationship, and at other times not. The research that found a statistical relationship between crime and unemployment found that for every 1 percent increase in unemployment, that crime rose 1.1 to 2.2 percent. As unemployment conditions worsen and employees become fearful of losing their jobs, or seek to regain that pay they were denied in bonuses or the annual holiday party, businesses need to be every watchful for the crime within, as the crime opportunity is increasing.

The Wall Street Journal reports results of a November 2008 business leaders survey that found that "Businesses Say Theft by Their Workers Is Up"Wall Street Journal (12/11/08) ; Needleman, Sarah E. The subtitle for the article reads -- "Companies Find That Trusted Employees Often Commit the Crimes, and They Believe the Recession Is to Blame." http://online.wsj.com/article/SB122896381748896999.html

WSJ Needleman writes, "In the wake of the recession, more businesses are facing a growing financial threat: employee theft. New research shows that employers are seeing an increase in internal crimes, ranging from fictitious sales transactions and illegal kickbacks to the theft of office equipment and retail products meant for sale to customers. Employers suspect that workers are pilfering from them to cope with financial difficulties at home or in anticipation of being laid off. What's more, it's often the most trusted workers who are committing the thefts."

Summarizing the article, Security Management Daily writes, "approximately 20 percent of employers polled in a new survey said workplace theft has become a moderate to significant problem recently. The survey was conducted by the Institute for Corporate Productivity and HR.com, and involved supervisors and executives at 392 U.S. firms. Eighteen percent of respondents said they have noticed a recent increase in monetary theft among workers, such as missing cash or bogus transactions. In addition, 24 percent of respondents said they had seen a rise in stolen, non-monetary goods like office supplies and retail products. Data from PricewaterhouseCoopers (PwC) reveals that in 2007, companies lost an average of $2.4 million to fraud, most of which was committed by workers, up from $1.7 million in 2005. Brian J. Mich, head of anticorruption compliance and investigations at BDO Consulting, says during tough financial times, "people have a tendency to give in to temptation to commit criminal behavior," and that employers tend to become more vigilant. Mich also observes that people viewed as the most trustworthy--those who have "access to systems and information"--often commit the biggest thefts. A 2007 PwC survey found that in general, 85 percent of people who commit workplace fraud are male, 44 percent are between the ages of 31 and 40, and 38 percent hold at least a bachelor's degree.

New US War Front -- Mexican Border Corruption and Killings

"Hey Lucy, we have a problem," and its in our backyard. If we are not careful, the corruption, violence, and murder raging along the southern side of the southwest Mexican border may spill over. With illegal drug gangs terrorizing each other, law enforcement, newspaper reporters, and the local communities, getting a grip on crime in Mexico is critical for the financial viability of the Mexican economy, and the safety and security of Mexico and the US, particularly our states along the southwest border. If President Elect-Obama is looking for an expansion of his New Deal employment-based infrastructure and energy projects, I suggest the new war front to fight, is right here at home. Perhaps that is why Arizona Gov. Janet Napolitano has been tapped for the Homeland Security Director position?

The issue of lawlessness and violence along the border is an order of magnitude more baneful than the free trade and migratory worker issues discussed in the campaign. The number of Mexican gang related slayings along the US border exceeds 4,500 to date in 2008. This number greatly exceeds the total number of US military deaths in Iraq since the war began in 2003, totaling 4.209 US personnel deaths in Iraq conflict at the time of this writing.

"Mexico has one of the highest kidnapping rates in the world, with dozens of Americans among the victims. Officially, an average 70 people are abducted each month, although private security firms say the real figure is 10 times higher. Most Mexicans don't report kidnappings for fear of endangering the victims' lives or that the police may be involved," reports the Houston Chronicle on 12/06/08. http://www.chron.com/disp/story.mpl/world/6150186.html

Citing examples of the violence, the HC reports, "In a recent high-profile case that shook the nation, Fernando Marti, the 14-year-old son of a sporting goods magnate, was kidnapped and killed in Mexico City in August. Marti's driver and bodyguard also were tortured and killed. Two Mexico City police officers, including the head of the airport's anti-kidnapping squad, were later implicated in the murder and 14 more officers were under investigation."

The news of violence along the border has reached worldwide attention. Even far away Australia posted this recently -- "As the cartels compete for control of lucrative trafficking routes and fight against newly attentive authorities, bodies are routinely mutilated, videos of executions are posted on the Internet, corpses are dumped on playgrounds and heads roll in the streets.

"No one is immune to this anymore," said Roderic Ai Camp, a Mexico expert at Claremont McKenna College in California. "It has really brought home on a personal level that there's corruption and crime and, in extreme cases, violence that's touching everyone." Many of the kidnappings are carried out by the drug syndicates, which are diversifying their criminal activities amid a government crackdown on the narcotics trade. The recent deployment of 30,000 Mexican soldiers and federal police to areas controlled by the drug gangs, together with tightened U.S. border security and a slump in U.S. cocaine use, has dramatically cut the traffickers' profits, security officials here say.

Meanwhile, more than 5,000 Mexicans have been slain gangland-style since January — twice the rate for all last year. "The real issue isn't the death penalty," said Miguel Sarre, a Mexico City law professor. "It's the death sentences that are being carried out every day with no legal process against people who are involved in crime, and those who aren't." Spill over violence of this type if left unabated is a risk, particularly on the border, and the routes of interconnected gang transit and traffic.

# # #

For an earlier blog on this topic read -- my blog first posted on 11/12/08.
http://d2crimewave.blogspot.com/2008/11/hard-times-hit-mexican-illegal-drug.html

Massive job losses since September 2008, Portends crime wave by September 2009

This morning I write about bleak times now for the broad economy, and bleaker times ahead -- unless you are in the business of security which will experience boom time conditions by Q3 2009. A rise in property and violent crime is forthcoming if current trends persist: shoplifting, burglaries, robbery, intimidation, extortion, kidnapping, robbery, arson, or worse. The history of severe economic negative economic shocks show a crime wave following within one year.

The US economy is in an economic death spiral of sorts with real estate, equities, commodities, business investment, and employment heading downwards fast. The animal spirits that encouraged investors of times past to invest in equities and bonds are in retreat and seeking to hold treasuries and cash. Indeed, holding cash today is viewed as a store of value as assets are rapidly losing their store of value -- homes, cars, assets, and commodities have retreated in value. Without a sizable exogenous event, within one year, indeed by Septembers' end 2009, there will be a widely recognizable, and vicious crime wave that hits this country the likes that have not been seen since the great depression. In that day, a man will set a tool down, and it will be gone.

Statistically speaking, for every rise in the unemployment rate you will notice a multiplied increase in the local property crime rate between 1.4x to 2.6.x depending on the local geography, population density, and job opportunity climate. These figures are taken from years of individual and time series data research conducted by economists and criminologists that examined the impact of rising unemployment on crime rates. One can only imagine what it must have been like living through the first great depression with unemployment rates of 24%.

Now I don't expect (or care) if anybody necessarily agrees with me -- the facts will speak for themselves. But I do hope that you will prepare yourselves for more difficult times ahead. Unfortunately for us all, time and the consequence of actions taken to date, and the downward trend are in my forecasting favor. I am putting this out now so that everyone can wake up and understand that we need to address the serious question of unemployment, loss of household income, and lack of access to capital (in homes that are depreciating monthly). Without income, people make up the difference by other means. The question is this -- how quickly do you take heed to this forecast? how will you prepare? what can you do now to make yourself much less a 'victim' or target of crime opportunity?

The economy fell off a financial cliff with the siemic event of 9/15/08 and the Lehman Brothers bankruptcy and the subsequent market events that followed. Commercial lending has literally ground to a halt, businesses have contracted spending, consumers have covered their wallets and pulled back from large purchases, and unemployment has spiked -- and this condition is not likely to turn around for many months. President Elect Obama's New Deal broadbased jobs based employment plan as announced will not cover the enormity of the jobs lost at current forecast. More creative thinking must emerge.

Leading off the front page of the New York Times on December 5, 2008, is a headline that reads -- U.S. Loses 533,000 Jobs in Biggest Drop Since 1974 . "The nation’s employers cut 533,000 jobs in November, the Bureau of Labor Statistics reported Friday. Not since December 1974, toward the end of a severe recession, have so many jobs disappeared in a single month — and the current recession, far from ending, appears to be just gathering steam." Most importantly, a total of 1.9 million jobs have been lost since December 2008, the start of the deep recession and two-thirds of these loses have occured since September 2009. This trend will continue for the foreseeable future of months and several quarters. The NY Times articles goes on to post - "More significantly, the unemployment rate does not include those too discouraged to look for work any longer or those working fewer hours than they would like. Add those people to the roster of the unemployed, and the rate hit a record 12.5 percent in November, up 1.5 percentage points since September. "

http://www.nytimes.com/2008/12/06/business/economy/06jobs.html

The chorus call asking if we are going to have a crime wave has began. Today's article of interest has the heading, "Now that the recession is official, is a crime wave coming?" http://www.daily-journal.com/archives/dj/display.php?id=432114 The article provides the following comments -- "Richard Rosenfeld is a professor of criminology and criminal justice at the University of Missouri-St. Louis. He believes it is inevitable -- no matter where you live. "My research has shown that crime rates tend to rise when consumers become pessimistic. Why? Economic theory predicts that people weigh the costs and benefits of law-abiding versus criminal behavior," he recently wrote. "Like it or not, a failing economy increases the temptation." And Rosenfeld added, "Worried consumers do not necessarily resort to street crime. But some will resort to buying stolen goods when they can no longer afford the prices at Target or Wal-Mart. As that demand increases, so does the incentive for the street criminals who supply underground markets."

It's time to prepare. In pioneer times they would circle the wagons to protect themselves. What is the equivalent of circled wagons today? More on this in coming blogs.

Second Great Depression Not Off The Table

I like Jim Cramer of CNBC's Mad Money and think he is both witty and smart. I have also found that he is objective, hard-hitting, and a truth teller -- until this week. It seems that Cramer wants to be considered for the position of the new SEC Chairman, and with it, he has adopted the very optimism of the politicians he seeks to thrash for their non-awareness of the problems. This week Cramer declares, the great depression 2 is off the table -- “Enough with the hysteria,” Cramer said during Tuesday’s Mad Money, we’re not going to suffer another Great Depression." http://www.cnbc.com/id/28017109


oh really.......... awareness of the problem is the root of solving it. If people think that we are not going to go through the pain, they will hold out thinking falsely that somehow this time is different; it is not. With collective voice, nearly all acknowledge that the global economy is contracting rapidly with many developed nations now in declared recessions, and even more developing nations at great risk from economic dependence in terms of trade with developed nations. During this downturn we have observed the speed and depth of the downturn surpass prior barriers -- the post 9/11 downturn, the 1991 recession, the 1987 stock market crash, the 1974 deep recession. Each time the bar was lowered as the market continued to retract faster and more severely than past experience.

The only remaining comparable to our current market is the Great Depression of the 1930s, sparked by the dramatic collapse of the stock markets in the fall of 1929. Those were extraordinary times that nobody seeks to repeat. Optimists for subscribing to the theory that this time will not be as bad as the Great Depression point out that we have learned from the Great Depression and have pulled out all the stops to create a soft landing for the economy, and hopefully, wishfully, prayfully to declare that the Great Depression Two is off the table for the following reasons.

More response monetary policy and interconnected or correlated international banker actions including massive coordinated interest rate cuts to spur investment and liquidity.
US Federal Reserve policies to provide needed liquidity to markets through multiple tools introduced since the 1930s with advantage of lessons learned.

1. US Federal government responses like the US TARP provide liquidity and capital to financial markets.
2. FDIC insurance safeguards individual depositor accounts in banks up to $250k preventing runs on banks.
3. Federal and state unemployment insurance for employees losing jobs preserving a modicum of income for households for the first few months of unemployment while workers find new work opportunities.
4. Many other New Deal policy actions of the federal government.

Some also comment that since we are not now at Depression levels that somehow are times are irrelevant. Take for instance this post commenting on the parallels of the Great Depression to today, and how times are somehow different now.
“By the afternoon of March 3, scarcely a bank in the country was open to do business,” FDR said in his March 12, 1933, fireside chat (now available on a very cool podcast at the Federal Deposit Insurance Corp.’s Web site). In 1933, some 4,000 commercial banks failed, causing depositors to take huge losses. (There was no FDIC back then.) The recession that started in August 1929 lasted for a grinding 43 months, during which unemployment soared to 25 percent and national income was cut in half. By contrast, through mid-November 2008, only 19 banks had failed. The Federal Reserve last week said it expects unemployment to top out at 7.6 percent in 2009. Economists surveyed by the Philadelphia Federal Reserve Bank believe the recession, which started in April 2008, will be over by next summer. (Of course, back in January the same guys forecast that the economy would grow nicely in 2008 and 2009.) But don’t take it from me. Take it from this year’s Nobel laureate in economics. “The world economy is not in depression,” Paul Krugman writes in his just-reissued book The Return of Depression Economics. “It probably won’t fall into depression, despite the magnitude of the current crisis (although I wish I was completely sure about that).” This quote and more on this line of thought can be found at http://www.outsidethebeltway.com/archives/not_the_great_depression/

Balderdash. From a factual frame of view, no economic downturn in the past 100 years has occurred more sharply or deeply as our current condition. Perhaps it is our electronic broadcasting, rapid news transfers, or speed of transactions and movement of capital, or perhaps or recollection of history that has caused this downturn to hit with more speed than any other of recorded history in the past century. The scary facts are this -- the stock market collapse, an indicator of market sentiment and store of value, has now reached (touched) market levels not seen since the 1929 stock market crash. While it took more time for the market to reach it current levels than in 1929, there are many conditions that exist that portend extremely stormy weather ahead. Here are some trends that bespeak more negative news in the future.

First, despite political leadership commenting otherwise throughout last year that the fundamentals of the economy were sound -- they clearly were not. We are now confirmed as being one-year into the Recession that started December 2007, as reported by the National Bureau of Economic Research, as reported 12/01/08; http://www.washingtonpost.com/wp-dyn/content/article/2008/12/01/AR2008120102771.html You simply cannot listen believably to political leaders that in the face of negative facts hope to prop up the markets with their unbridled optimism when the facts speak otherwise. Political leaders are cheerleaders and hope to not yell 'fire' in the theatre causing greater mayhem, so while we need political leaders to conduct actions for the benefit of the general public, to rely on their boldfaced statements is to put your head in the sand.

Second, housing prices continue to slide downwards impacting individual wealth and prosperity and wealth-making options in the US. Massive unemployment and layoffs announced during the past 90 days, if continued, may cause a would-be housing bottom in spring 2009 to fail, and we could be headed further down if more home loan defaults occur. Home equity is one of the primary vehicles used by entrepreneurs, small business owners, and new business start-ups to provide cash for their businesses whether the homes are used as collateral for business loans, or more simply as credit lines in the form of Home Equity Loans. When housing prices are expected to continue falling, the amount of capital that banks are willing to lend on an asset-backed basis severely contracts.

As a small business owner since 1994, I too have used the equity in my home(s) as a backstop for my business enterprises both as collateral for loans and performance bonds, as well as home equity loans. The appreciation in real estate values in the 1990s and early 2000s enabled me to provide capital to my company relatively easily and quickly. And when business cycles impacted my business, such as the NASDAQ market crash in 2000 or post 9/11 terrorism events, I was able to use my home equity to create a soft landing and recovery means for my business to conduct a business-cycle recovery that would not otherwise been available to me or my employees.

Third, massive unemployment announcements continue to weigh down on the overall market, suppressing consumer views of the economy and market, and reducing expectations. There has been much written on this topic elsewhere. The important thing here is that unemployment impacts other variables, and lack of income creates crime opportunity for those that would otherwise be law abiding. "The national unemployment rate rose last month at the fastest pace in 26 years, foreshadowing what economists fear could be the biggest increase in joblessness since the recession of the 1970s. There are now more than 10 million Americans out of work, nearly 3 million more than a year ago, with manufacturing, construction, and retail sectors particularly hard-hit."
http://www.boston.com/news/local/massachusetts/articles/2008/11/08/unemployment_rate_in_us_surging/
The unemployment levels of the mid 1930s at massive levels occured some four years after the 1929 stock market crash. The banks that collapsed at their peak in the mid-1930s collapsed within four years of the crash. While the recession started December 2007, the market crash actually is pin-pointed to the collapse of Lehman Brothers on 9/15/08. It is too, too early to say that today's unemployment and massive layoffs will not lead to further deterioration. Just look at what happens in Detroit with the massive restructurings, whether through bankruptcy or not, will grossly impact the current unemployment rolls, along with the associated microcosim of markets of suppliers, servicers, etc.

Fourth, another shoe to drop in this centipede market is the credit card bubble and contraction of consumer credit, just at a time when many employees are losing their jobs. Credit cards have been viewed falsely by individuals as a store of value, safety, or safe haven for consumers to smooth the periods between financings. I have openly chastised financial planners such as CNBC's On the Money analyst for encouraging individuals to pay-off all of their credit card debt with available cash, when she fails to tell these same individuals that once they pay-off their credit cards, that the credit card companies can unilaterally cut their credit availability and they would end up with no credit and no cash -- the worst of the situations in an economic downturn. On an individual basis, the only prudent move is to hold as much cash and credit available to make it through the rough patches ahead -- if you spend all your cash, you are prone to paying higher prices as you have fewer options ahead.

On this note, the Motley Fool cited, "Meredith Whitney -- bank analyst extraordinaire -- predicts that the credit card industry may slash more than $2 trillion of existing credit lines -- 45% of the total -- over the next year and a half. Yikes! The obvious outcome here would be a huge risk reduction for companies that issue consumer credit, such as JPMorgan Chase (NYSE: JPM), Bank of America (NYSE: BAC), and Citigroup (NYSE: C), while kicking an already-bloodied consumer -- and to a lesser extent, card processors Visa (NYSE: V) and MasterCard (NYSE: MA) -- while they're down." Read more on this at: http://www.fool.com/investing/dividends-income/2008/12/01/the-death-of-credit-cards.aspx

Fifth, residential and commercial lending crises in regional banks to be a future shoe to drop. Regional banks have financed home loans and loans for small businesses and construction loans throughout the US. Reuters reports that "Regional banks exposed to deteriorating home equity loans are facing a greater risk of bankruptcy, possibly extending a U.S. credit crisis to 2010, a senior Morgan Stanley credit analyst said on Monday. Wall Street bank exposure to sub prime mortgage debt and structured finance products already has resulted in more than $400 billion of write-downs and losses since last year. Now other consumer debt, such as credit cards and auto loans, may be the next source of busted loans. See http://www.reuters.com/article/InvestmentOutlookMid08/idUSN0964320080609

Sixth, commercial real estate bubble to burst in coming year. Massive unemployment of white collar positions in banking, advertising, and other traditional salaried positions will be leaving massive amounts of commercial real estate empty. Of the trillion notes to be refinanced in 2009, over 1/3 are underwater, meaning they cannot be refinanced. One blogger posts, "Fitch has been saying since last April that commercial real estate was exhibiting the same sort of frothiness as subprime. CMBS spreads started widening sharply last August. Investors started pulling back from purchases in September, expecting prices to fall considerably. In November, Nouriel Roubini added commercial real estate to his list of impending financial train wrecks, estimating the damage at $100 to $150 billion." http://www.nakedcapitalism.com/2008/03/surprise-commercial-real-estate-woes.html

Seventh, government receipts from tax collections are impacted significantly and will be another source of economic harm in the economy. California has warned of danger of running out of operating capital in 2009 without significant financial assistance; they are not alone. "Led by California with a $28 billion hole in its budget, 41 states are in financial trouble, and many of their leaders are looking to Congress to bail them out." http://www.idahostatesman.com/1425/story/571171.html Not only are the states in trouble, but many cities are in financial trouble and looking for ways to cut services and costs at a time of peaked needs. It is not just the tax revenues that are down, but also the state and local governments ability to borrow as many tax-based finance bond auctions have gone under-subscribed since 9/15/08.

I could go on, but you get the idea. The confluence of the above negative events if left unabated will create an economic death spiral for the economy that will lead to the second great depression and the concomitant other ills such an economy brings. Our leaders are using the playbook of lessons learned from the great depression, and that book of experience has its limits. Communication is faster, transportation quicker, capital moves electronically, news reaches a boiling point swifter, and the world is more interconnected. Criminals are more sophisticated and using complex instruments and technology to dodge responsibility and capture. Add to this milieu the fact that we live in a troubled world of anarchists, terrorists, pirates, and extremists, and you have a cocktail of misery for the next year and several years.

Consequently, not talking about the second great depression will not forestall it. We do however need to focus attention on solutions as being a town-crier on its own does not solve the problem. However, recognition of our current dilemma and its gravity, is necessary to proactively combat the economic forces that weigh us down today. Only the collective genius of all working to make active change to our current circumstance will make a difference.

Unfortunately, a hard landing is in the offing, and if you live in the pockets of misery such as Detroit, what was bad, is about to get unbearable; http://www.youtube.com/watch?v=ufexZnViDiU It was sad to see recently in a local Detroit newspaper print 137 pages of tax foreclosure notices, and only 4 pages of employment opportunities -- and the massive layoffs from the automotive industry have not occurred in any meaningful way yet. Many of the tax foreclosure notices were on properties that are underwater or homes that cannot sell in this market. This story also illustrates the loss of working capital of state and local governments that need funds to operate.

At this holiday season of gift giving, let us pray that US law makers move, not for the industry, but for the broad market and the families of the automakers and allied industries to create a softer landing for the over 1.2 million workers vulnerable in the mid-west from a prolonged downturn in the US automotive industry.

News report - Bad Economy, Dangerous Holiday Shopping

While not rising to crime wave proportions yet, this year's holiday shopping season is starting out rougher and more violent than any years in recent memory. From stampedes for bargain priced items, to breaking down doors to get in first, to gun violence at a few malls, to spikes in shoplifting reported by great numbers of stores, this year has been notable for bad behaving shoppers. This is the essence of an article on the topic that appeared on ABC News on 12/2/08, titled,

Bad Economy, Dangerous Holiday Shopping, Violence Marks Holiday Shopping Season; Some Say Stores Haven't Done Enough to Increase Security http://abcnews.go.com/Business/Economy/story?id=6371057&page=1

The article points out that in addition to the Wal-Mart employee killed by a human stampede for the low-marked item, that other violence has accompanied this years Black Friday shopping seaons. Here are the low-lights -- ABC News reported that "In addition to the Friday morning stampede that led to the Wal-Mart worker's death, there was a spate of shootings: Two men shot each other to death at a Toys "R" Us store in Palm Desert, Calif., Friday; a pregnant woman was injured in a shooting at an Atlanta mall Saturday and armed robbers killed one man at an Express store in a suburban Miami mall Monday. "

The article further reports, "According to the National Retail Federation, at least one kind of crime -- shoplifting -- is on the rise. Of the more than 100 retail executives surveyed by the federation in October, 74 percent reported an increase in shoplifting. "We do feel the economy is a trigger for someone taking an opportunity to commit a crime that they otherwise would not think about," said Joseph LaRocca, the vice president of loss prevention at the federation. "

LA Police Chief - Bucks Trend - Increases Officer Count as City Budget Contracts

Applaud goes to LA Police Chief Bratton who has successfully persuaded LA city execs to support his expanded police manpower requirements in the face of significant down turned economic conditions. At a time when city governments and police chiefs around the country are reducing headcount due to budget shortfalls, LA's top cop has countered this trend and made a successful argument to city leaders that funding police operations is the key to safeguarding public order, supporting real estate prices, jobs for commercial enterprise, as crime and public fear of crime erode property values in crime plagued areas. Chief Bratton has rightly observed that "The irony is that as we go into this economic downturn, we're expanding… which is exactly what you need to do when the economy turns bad."

Top Cop in Los Angeles Says Cutting Crime Pays
http://online.wsj.com/article/SB122791606618265561.html?mod=googlenews_wsj

Contrarian View - NPR broadcasts story that Bad Economies do not lead to crime waves

Mark Twain is credited with saying, there are liars, damn liars, and statisticians. That is the problem with examining crime data from the Great Depression era. Mainstream criminologists examine sterile statistical data and make general assumptions about human behavior and crime based on this data. However, frequently, there are nuisances in the data that render the conclusions of the data invalid. Consider the category of crime called "floating bodies," this is the way that Ecorse Police Department of Michigan recorded dead human bodies pulled from the river that float down from Detroit and parts north in the early 1990s. This mis-labeling had the effect of hiding the crime data as there is no FBI Uniform Crime Report (UCR) category called floating bodies. Hmmmm.

Well in a more heinous manner, crime data being analyzed from the 1930s have been likewise scrubbed of real meaning leaving the picture that crime actually went down during the Great Depression -- leading some to falsely assume that we should expect no crime wave from the economic downturn. Nothing could be further from the truth -- crime was horrible, and it took specific large actions to combat crime before it finally receded. This is not considered in the article that appeared on National Public Radio titled,

Experts: Bad Economies Don't Cause Crime Waves
http://www.npr.org/templates/story/story.php?storyId=97234406#commentBlock
Article conclusion: “The Depression years had very little crime.” “With the economy's current troubles, many people assume a crime wave is just around the corner. But criminologists say that's just an American myth. Just look at the 1920s, says David Kennedy, director of the Center for Crime Prevention at John Jay College of Criminal Studies. "It was a period of booming economic prosperity, the roaring '20s, and very high crime," he says. The 1950s and '60s were the same. The economy was great, but crime rates rose every single year.

Nothing could be farther from the truth. Not only was there a huge crime wave in starting in the 1920s and extending in greater flagrancy in the 1930s with the onset of the Great Depression, but the crime was so severe that the Federal Government created a strategic crime control plan of sweeping broadness that it rivals the Paulsen Financial Plan today. Consider that the US government went to great strides to combat crime in the 1930s that included the creation of the FBI, elimination of Prohibition stripping organized crime of illegal gains from liquor sales, and most formidably, the era saw the creation of the Civilian Conservation Corps to incapacitate serious habitual offenders and provide crime demand reduction programming for the young male unemployed population living in the cities, and they were sent to rural work bootcamps.

There is a strong linkage between negative economic shocks, economic hardship, unemployment, and loss of purchasing power and crime -- and the relationship is stronger with more significant economic shocks. The crime wave that was prevalent during the in the 1920s and early 1930s was significant and brutal, and was only brought under control after the implementation of the FBI and the extraction of serious habitual offenders from the general population, along with a large cohort of young unemployed men at greatest risk for crime. Modern researchers fail to understand the significant crime environment of the 1930s and falsely claim that statistical reports of reduced crime during the depression occurred as a natural result. Rather crime went down during the Depression when over 500,000 unemployed young men of greatest risk for crime involvement were taken out of the cities and placed into 2300+ work camps managed by the CCC. The statistics show that in 1934, young men between the ages of 18-24 comprised only 6% of the population, but accounted for 51% of arrests for auto theft, robbery, burglary, rape, and assault; one-third of larceny arrest, and two of ten homicide arrests. It was necessary for the US Government to proactively remove a significant portion of the unemployed population at greatest risk of crime involvement, and they placed them in work camps in rural areas managed by the Civilian Conservation Corps (CCC). This is the primary reason that crime reduced -- there were fewer likely offenders. The impact of a huge targeted diversion program, taking the unemployed males of greatest risk out of the city and sending them to camps in the rurals had a huge impact by reducing likely offenders.

On background, the CCC was created by President Franklin Roosevelt on March 23, 1933, just three weeks after his inauguration. The CCC would operate as many as 2,650 rural work camps with up to 500,000 young high-risk unemployed males engaged in these camps. The “enrollees” were removed from the general population and were geographically isolated so that they could not be a risk to the populations remaining in the cities. The camps operated with military discipline and supervision of the US Army. Free time was provided for enrollees but there was no access or transportation to leave the work areas. These camps provided the geographical containment of a prison through their isolation.

These and other notes are contained in my forthcoming book, Severin Sorensen, CPP, Economic Misery and Crime Waves: The future history of the second coming of the Great Depression and the crime wave that followed, and what to do about it.

# # #

Sorensen, Severin. "Contrarian View - NPR broadcasts story that Bad Economies do not lead to crime waves." Weblog post. Economic Misery and Crime Waves. 21 Nov. 2008. .

Crime On Rise In Quiet Broward Neighborhood

There is a theme growing with crecendo on this blog and that is crime is growing, not receding as a consequence of economic misery expressed in terms of economic hardship, unemployment, and loss of purchasing power (sometimes referred to as inflation, but could also describe reduced equity in home values).

Crime is occuring in neighborhoods that were formerly sleepy, where nobody would think you would have crime. Consider this story posted from Broward County Florida. Within the last few months, crime has been on the rise in this normally sleepy town.

In an article titled Crime On Rise in Quiet Broward Neighborhood we read these statements --

We usually don't lock our stuff but now we do. It's very sad," said neighbor Michelle Duke.

Locals residents report a string of boat thefts.

"Three this week is what I heard," said one neighbor.

They're also reporting car break-ins.

"My husband walked out at about 5:30 this morning and there was just glass all over the driveway," said another.

Jon Jenkins has experienced a little of both.

"My house, five times this year. I've had motorcycles stolen, numerous tools and now the boat," he told Local 10's Sasha Andrade.

Police said thieves are driving around with trucks and simply hooking up any boat and trailer in sight.


"We're putting a wall up and gates and surveillance cameras. That’s what it’s come to," Duke said.

.The Sheriff’s Office said anyone with a boat should lock down the trailer, or run a steel bar through its rims. They said you should do whatever you can to make your boat less appealing to thieves

For the full article - http://www.local10.com/news/17999513/detail.html

Past as Prologue: Pirates Sieze Oil Tanker Carrying Two Million Barrels of Oil

During the Great Depression, criminals targeted the Osage Indian tribe in Oklahoma to steal their land rights to their oil fields. Through trickery, extortion, and murder, criminals swindled oil and property rights away from land granted members of the Osage Tribe. The extent and depravity of lawlessness and slaughter targeted on the tribal members on US soil was one of the pivotal milestones that led to the creation of the FBI in the 1930s.

Economic hardship of global proportions has struck again, and criminals have become more brazen. This target is again oil and other commodities in transport. The technology used by the modern Pirates enables them to out maneuver law enforcement. Consider the Somali Pirates caper in progress. Pirates operating off the coast of Somalia seized a large oil tanker, approximately three times the size of a US Aircraft Carrier. The Oil tanker was seized approximately 450 miles off shore and was carrying 3 million barrels of oil.

Somali pirates also hijacked a 26,000-ton Iranian cargo carrier on Tuesday. A US Navy officer operating in the theatre of the piracy has commented, "It is suspected that these Pirate gangs have become more sophisticated, operating large "mother ships," often former Russian trawlers, which follow their targeted ship with GPS devices. When they are close enough, they offload smaller dinghies or speedboats that move in for the capture. "

"They just come up to the stern, throw up their hook and ladder, and once you are on board, the ship is yours, because no one is going to mess with a man with an RPG [rocket propelled grenade launcher]," says Richard Cornwell, a senior researcher at the Institute for Strategic Studies in Tshwane, as Pretoria is now called. "Once [they're on board], it's over in 10 to 15 minutes. Unless you have a warship in the immediate area, and crucially, with a helicopter, you've got no chance of stopping them."

The great take away is that criminals are becoming more brazen, they are using technology to their great advantage. And through overwhelming incidents perpetrated by many, they operate with impunity.

Whether off shore on within our borders, brazen crime is on the rise.

# # #

Read two articles on this incident for greater detail.

http://edition.cnn.com/2008/WORLD/africa/11/17/kenya.tanker.pirates/?imw=Y&iref=mpstoryemail

http://www.csmonitor.com/2008/1119/p01s03-woaf.html

Economic Misery Deepens - 50,000 Citibank Employees to Lose Jobs

Ronald Reagan is credited with saying, "Recession is when a neighbor loses his job. Depression is when you lose yours." Sadly, it is depression time for nearly 73K Citibank employees who have lost their jobs within the past year (23k prior to today, and another 50k announced this morning). I do not think the general public knows how bad it truly is out there. Sure they hear the news, but just exactly how the news relates to them is often a mystery, until it is too late for them.

If you have a job, keep it, do everything you can do to be a model employee to make the cuts that will be coming. If you are looking for a new job, do not let go of your old job until you have a new one firmly in place. If you have lost your job, consider where the new economy is headed and dont be afraid to move your ground. In looking at my own family history, in the Great Depression, my grandfather moved from the Detroit area to California where there was more opportunity -- where are the opportunity areas today? Put your thinking caps on and get there sooner, wherever 'there' is.

From Bloomberg news we read this morning -- http://www.bloomberg.com/apps/news?pid=20601103&sid=a13FLUOxOAyw&refer=us

"Nov. 17 (Bloomberg) -- Citigroup Inc., the U.S. bank with the most employees, plans to eliminate more than 50,000 jobs and cut expenses by 20 percent from their peak as the global economy contracts. Chief Executive Officer Vikram Pandit intends to reduce headcount by about 14 percent to 300,000 in the ``near term,'' according to a presentation on the firm's Web site today. Pandit has already cut 23,000 jobs, leaving the New York-based bank with 352,000 employees as of Sept. 30. Citigroup slumped 19 percent in New York trading last week and is down 68 percent this year, after four straight quarterly losses totaling $20 billion. The fourth-biggest U.S. bank by market value will probably post a loss of about $187 million for the fourth quarter, analysts surveyed by Bloomberg estimated. "

In terms of others within the banking sector, Bloomberg news reported the following,
"Banks and brokerages worldwide have announced more than 200,000 job cuts since the subprime mortgage market's collapse last year sparked a credit crisis. Goldman Sachs Group Inc., which converted last month from the biggest U.S. securities firm into a commercial bank, began earlier this month telling about 3,200 employees, or 10 percent of its workforce, they were out of a job, according to a person familiar with the decision. Citigroup, Goldman Sachs and rivals such as Merrill Lynch & Co. have been reducing staff as the revenue outlook dims for banks and securities firms. Most major global stock indexes have dropped more than 25 percent this year, with the Standard & Poor's 500 Index down 40 percent. The International Monetary Fund's World Economic Outlook forecast last month that global growth will weaken to 3 percent in 2009, from 3.9 percent this year and 5 percent in 2007. "

Intelligence Experts see Security Risks in Global Economic Downturn

On the front page of the Washington Post this morning (11/15/08) is an article titled, "Experts See Security Risks in Downturn: Global Financial Crisis May Fuel Instability and Weaken U.S. Defenses." The article warns that two forces are colliding with potential harmful effects to US security and global safety: (1) economic downturns in economies globally are causing increased economic hardship and political instability (in terms of food price inflation, rising unemployment), giving rise to vulnerability of insurrection and influence of extremist groups like Al-Qaeda, or new political alliances not in line or mind with US interests as those hit hardest in third world countries seek money (and by reference new political economic relationships) with those with funds, with China being the most likely financier. (2) the second trend they see is governments globally, but particularly in the US preparing to downsize their expenses in military, intelligence, and criminal justice due to budgetary concerns, or new Obama presidential administration interests, just at a time when crime and terrorism opportunity is rising.

Key highlights of the article by Joby Warrick, Washington Post Staff Writer Saturday, November 15, 2008; Page A01, include the following, " Intelligence officials are warning that the deepening global financial crisis could weaken fragile governments in the world's most dangerous areas and undermine the ability of the United States and its allies to respond to a new wave of security threats. U.S. government officials and private analysts say the economic turmoil has heightened the short-term risk of a terrorist attack, as radical groups probe for weakening border protections and new gaps in defenses. A protracted financial crisis could threaten the survival of friendly regimes from Pakistan to the Middle East while forcing Western nations to cut spending on defense, intelligence and foreign aid, the sources said. " Read the entire article at http://www.washingtonpost.com/wp-dyn/content/article/2008/11/14/AR2008111403864.html?hpid=topnews

The article author has focused their narrative on terrorism, but what is much more likely is insurrection, economic misery, and increased crime occurring in these locations that can create environments where terrorists can thrive with impunity. The world is into a deep global recession, and if unabated the history books will read the second coming of the Great Depression. In third world countries particularly, many people are hungry, unemployed, and feeling miserable and the World Bank has correctly assessed the risk.

Joby Warrick writes, "As bad as economic conditions are in the United States and Europe, where outright recessions are expected next year, they are worse in developing countries such as Pakistan, a state that was already struggling with violent insurgencies and widespread poverty. Some analysts warn that a prolonged economic crisis could trigger a period of widespread unrest that could strengthen the hand of extremists and threaten Pakistan's democratically elected government -- with potentially grave consequences for the region and perhaps the planet. Pakistanis were hit by soaring food and energy prices earlier in the year, and the country's financial problems have multiplied since late summer. Islamabad's currency reserves have nearly evaporated, forcing the new government to seek new foreign loans or risk defaulting on the country's debt. The national currency, the rupee, has been devalued, and inflation is squeezing Pakistan's poor and middle class alike. "

As the world leaders from the G-20 meet in Washington DC this weekend, it is becoming increasingly apparent that a deep freeze has hit the global economy, and one of the baneful consequences of the downturn is increased economic misery, crime opportunity, and terrorism threats. The world has changed, how much we do not yet know, but when the dust settles it will look like a different place.

To conclude this post, normally, at this time of year we in America prepare for Thanksgiving and thereafter a Christmas holiday season where children hope for gifts under the Christmas tree and candy in their stockings. This year however, I think I will opt for “coal” in my stocking as it looks to be a long cold winter.

UK economic woes turning up in cocaine seizure spike and feared crime wave

When one loses their job do to lay-offs, they don't necessarily lose their bad habits. For those who are addicted to drugs (whether illegal or prescriptive), their addictions when experiencing economic hardship can increase their risk of going to criminal lengths to support their baneful habits.

Reported today in the UK was an article with the headline, "Credit crunch cocaine crimewave predicted," that appeared Friday, November 14, 2008. The article goes on to report, "Police fear a crimewave could be looming 'on the horizon' as cocaine seizures across South Devon continue to rise at an alarming rate." The article reports that police are seeing a 50 per cent jump in seizures of cocaine. Figures just released reveal that seizures of cocaine in Torbay, South Hams and Teignbridge last year totaled 100 against the tally of 75 the previous. Already this year, from April, the number is up to 51 and rising steadily. DC Bradley said: "The number of significant seizures is also on the increase. "Many confiscations involve small amounts of cocaine for personal use, but there have been recent seizures on the M5 into the county which have seen amounts weighing in at as much as four kilos with a street value of £200,000."
A few notable quotes from police included, "When they lose their job and can't pay the mortgage and lose their home they still want their drug." "They become desperate and become involved in crime and steal. "Cocaine is now more prevalent. That's reflected in the seizures. It's a cause for some concern."
Read the full article at http://www.thisissouthdevon.co.uk/news/Credit-crunch-cocaine-crimewave-predicted/article-474726-detail/article.html

Hard times hit Mexican illegal drug trade, competition among rival gangs leads to violence as homicides spike up

In down turned economic times, competition for scarce resources and territory becomes intensified. This was true during the Great Depression when "Depression Desperadoes" gangs and thugs began crowding each other out when the economy went into a tailspin, and fewer dollars were available from their criminal enterprises. There is another similarity to the Great Depression era -- the old familiarity and corruption that some police and criminals seemed to enjoy together came to an about face and street war with the creation of the FBI and the battle royale that ensued. This phenomenon appears to be repeating itself in our era south of the US border.

Consider what is happening south of the US border in Mexico. Mexico has been hit by a brutal crime wave as rival drug gangs step up attacks against each other and the police. More than 4,000 people have died this year in violence connected to criminal gangs in Mexico. The intensity of violence rivals the violence levied by the Columbian cartels bringing full the mean streets of brutality, violence, and fear. The gangs are using typical intimidation tactics used in trafficking that involve stark displays of violence and murder. This past week, a Mexican newspaper reporter working in Juarez along the U.S. border was shot by armed men that killed the reporter on his way to work Thursday. From the press report, "A recent series of drug-related violence has left at least seven people dead in the northern border city. Police said Monday that a burned and mutilated body was dumped in front of a police station. Authorities say police later found two men and two women shot to death outside a medical clinic. The Associated Press reported that a woman's body was found in a trash bag, while a bystander was killed in a car crash caused by a police chase. On Monday, Mexican President Felipe Calderon named a former federal lawmaker, Fernando Gomez Mont, to replace Interior Minister Juan Camilo Mourino, who died in a plane crash last week in Mexico City.Mourino was a central figure in Mr. Calderon's government and helped lead a campaign against mounting violence by drug cartels. " Read the original article -- http://www.voanews.com/english/2008-11-13-voa45.cfm

Historically, thinking of lessons learned from the last great crime wave that broiled during the Great Depression, only when the federal government rationalized the illegal markets and stripped organized crime from their prohibition-led intoxicant sales did the situation turn around. Additionally, and not to be ignored, it took updated police methods along with new technologies to rival those being used by the criminal gangs to turn around the problem then in order to overcome the not insignificant local corruption problems of the era.

Economic misery and Crime Waves -- Japanese elderly committing increased number of crimes

Not since 1991 during the Japanese economy meltdown has crime peaked among elderly -- no, not victimization of elderly, but elderly offenders involved in numerous crimes such as pick pocketing, shop lifting, theft. Bloomberg reports that "The latest [Japanese] elderly-crime wave comes after markets plunged and as Japan frets about a return of deflation. In 2007, a total of 48,605 elderly people were arrested or investigated for crimes other than traffic offenses, a fourfold jump from the early '90s. " Besides theft and shoplifting, increased criminal activity by elderly includes acts of embezzlement and assaults. Reasons cited for the increase include money troubles and isolation from families. The articles commentator, William Pesek comments, "You don't need to be a criminal psychologist to see how this touches on many of the economic challenges facing Japan's 127 million people. It gets at everything from the gap between rich and poor to pressure on executives to how the government is dithering as the population ages.
``Elderly crime is a serious problem that our society must shoulder in the years to come,'' the government report said. ``With baby boomers becoming elderly within five years, we have reached a state where we must make a fundamental review of anti- crime measures in a fast-aging society.'' See the full article at: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=am..8hAE3mPI

Another article on this topic -- Shoplifting wave points to plight of elderly Japanese
Isolation, poverty set to drive elders' arrests above teens', read at http://www.chicagotribune.com/news/nationworld/chi-japanese-thefts_dec03,0,939818.story

Crime Spike in Russia on Individuals Holding Cash

With Russian citizens fearful of another financial failure of the banking system, and increased economic uncertainty in the political climate, more Russian citizens have withdrawn deposits from banks and are carrying greater amounts of cash on them. This has resulted in the unintended consequence of increasing crime opportunity for criminals that are now targeting individuals believed to be carrying cash, or retrieving cash from banks, or storing cash at home. Reported yesterday by Bloomberg, "Investors have withdrawn at least $140 billion from Russia since the start of August, BNP Paribas SA estimates, because of slumping commodities prices, the war with Georgia and the seizing up of global capital markets." This same type of crime opportunity risk could be seen in other parts of the world where individuals have clamoured for hard assets such as gold, silver, other precious commodities, and cash. Listed below are excerpts from the quoted article appearing in Bloomberg at http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aEFWvrUJRLsk

Crime Wave Hits Moscow as Russians Carry Cash in Credit Crunch
By Sebastian Alison, Nov. 12 (Bloomberg) -- Moscow has been hit by a crime wave as ever more Russians, distrusting the banking system during the global credit crunch, are withdrawing their savings and carrying large amounts of cash around, making them easy prey for thieves.
Yesterday alone, police registered four separate thefts from car drivers, of amounts ranging from 300,000 rubles to 3 million rubles ($10,900 to $109,000) state broadcaster Vesti-24 said in a report posted on its Web site. ``Police have noted that since the start of the crisis, such crimes have become more common,'' Vesti said. ``This is because people are carrying large amounts of cash. Some are changing it into foreign currency. Others are withdrawing it from banks and taking it home. Criminals are taking advantage of this.'' At 1:30 p.m. yesterday, four people attacked the driver of a Jeep Grand Cherokee which had stopped at a traffic light, injuring him with a hammer and baseball bats, before making off with a bag containing 300,000 rubles, police said. At about the same time, three men grabbed a bag with 3 million rubles in it from a 32-year-old sitting in a car, before making off in another car, according to police.
Shooting. Yesterday evening three men stopped a car in the city center driven by a 45-year-old businessman and snatched a bag from him with 500,000 rubles. At about 10 p.m. a group of five men shot a 32-year-old man as he got out of his car, wounding him, and escaping with ``a large amount of money,'' police said.

Falling off a bridge - by Ilene Dover, and search for a softer landing

This humorous children’s pun is riddled with satirical undertones of the current financial market and rapidly rising unemployment. The economy has indeed fallen off a bridge or cliff, and we have hope of a soft landing but there may be more rocks below. One of the primary reasons for our market collapse is the collective action of individuals and organizations who leaned over, whether it was credit liens, overreliance on cheap money, search for the next bubble, or jumping out of the market in an attempt to preserve capital, halting capital spending, curtailing credit extensions -- the collective action is a free fall for all.

Everyone is focused on self-preservation. Just two months into TARP, and the needs for TARP are greatly stretched – I hope the TARP is elastic as it might unravel. I find it more than ironic that the financial market prognosticators somehow think that the financial markets are more important than the real economy (e.g., strategic economic industries such as automotive, industry, infrastructure, etc), particularly where jobs are concerned. Ironically, banks can be nationalized far more easily than industries particularly when what is needed is economic backing, market confidence, and liquidity. Whereas nationalizing industries becomes more problematic in terms of nationalized industries being market responsive in terms of innovation, productivity, output, and inventory control -- and contrary to Say's Law, automobile supply does not create its own demand in today's environment. Preserving strategic industries, transforming industries, and forging new economies and by reference jobs are a vital requirement for the next administration.

Beyond supporting or retooling legacy industries, a new Congress and president might look to the past for guidance --- Consider the power and value of National Science Policy Goals -- it is frequently quoted that the initial funds spent on NASA to put a man on the moon returned 7:1 benefit for the economy in terms of jobs and economic stimulus. What other mutually beneficial science policy goals could be invested in with a 7:1 benefit or greater? Be it energy, environment, medicine, or transportation in terms of new bridges and roads? Regardless of the X factor multiple put on spending, there will be some left out of the jobs equation as their skills are not sufficient or no longer needed in the future economy. Significant investment in education and job re-training with real jobs at the end of course completion need to materialize in the coming plan.

Beyond transformational investment, there will be a need for additional jobs and criminal diversion programs. Many historical economists incorrectly look back on the Great Depression as a time when crime diminished statistically, and somehow they pass early judgment that there will be no spike in crime with a 2nd Great Depression (where we are headed). What is frequently missed in their analysis is the fact that the US government was heavily involved in one of the greatest crime control diversion programs during the great Depression where the government extracted unemployed, poor, inner city young men and placed them in distributed work camps called the CCC or Conservative Conservation Corps. Touted publicly as a jobs program for the economy, the real underbelly of the program served a crime control purpose to remove likely offenders and thereby reduce crime opportunity by providing work for the young male population at greatest risk for crime involvement.

From J A Pandiani's (1978), Crime Control Corps - An Invisible New Deal Program , "The extreme economic hardship and social dislocation of the Great Depression were widely expected to produce a crime wave of major proportions. From the mid-1920's until 1933, crime rates rose, but then the trend mysteriously reversed itself. Between 1933 and 1941, large numbers of poor young men were institutionalized in work camps far from population centers as part of the CCC relief program. They were thereby effectively removed from the crime-committing population. The crime control function of the CCC was probably intended, but remained unrecognized by the public. The expressed purpose of the program was to provide economic relief for enrollees and their dependents and to perform various conservation projects, such as flood control and reforestation. At its peak in 1935, CCC operated 2,650 camps with a total enrollment of over 500,000 men. Thus, it appears that from 1932 to 1940 between one-quarter and one-third of the Nation's poor young men were in the CCC. This failure to recognize the important social control function as well as the program's overall success must be attributed to its striking correspondence with American values and traditions surrounding free enterprise. "

As one looks more deeply into the underlying economic conditions of the current market collapse and the portended increased storm of economic misery, associated unemployment, and crime opportunity, there will be a need for preparation of a thoughtful crime control strategy to work alongside the other financial plans. To this end, this blog is dedicated – to focus rhetoric on the baneful economic consequences of the current situation, highlight likely future courses of market direction, and proactive solutions that might be recommended to create a softer landing, and avoid the rocks below.

Economic misery spreads -- portend of crime wave

Economic misery is spreading. Despite liquidity availability, credit has not made it to the marketplace, or in other words, few credit worthy enterprises or households remain, and credit remains tight. Crime is spiking in pockets all over. It surfaces in increased property crime and thefts, to more violent interactions in illegal drug trafficking. Here are some recent headlines from this week --

Mexico kidnap gang kills boy, 5, with acid
Times Online - UK
Experts say the crime wave reflects increased violence in the drug trade, in which 4000 have died in battles between cartels and the police this year.

Crimewave hits high street as recession bites
http://www.thisislondon.co.uk/standard/article-23584344-details/Crimewave+hits+high+street+as+recession+bites/article.do

>Credit crunch shoplifting rises by 36 per cent as economic downturn bitesTesco, the large Wal-mart style supermarkets chain has been hit by a shoplifting epidemic following the downturn in the economy. Essential items have become the most common target, suggesting that thieves are increasingly motivated by need rather than greed.Tesco caught more than 43,000 shoplifters in the first half of this year - an increase of 36 per cent on the same period in 2007.

Economic misery worsens -- unemployment notices

It is becoming painfully obvious that the financial markets first, and then the general economy second, hit the airbrakes hard and fast in September / October 2008. The unemployment notices have been coming in greater frequency and in larger lots. CNBC reports that tomorrow "Markets are braced for more hemorrhaging of jobs, with a Friday employment report expected to record 200,00 more jobs vaporized in October. This would push the jobless rate up two—tenths of a point to 6.3 percent. "Job losses are now likely to run around 150k to 200k per month, with a few whopping declines now and then," Tony Crescenzi, chief bond market strategist for Miller Tabak & Co. LLC wrote in a research note Thursday. Friday's employment report will show job losses of at least 200,000, and could go as high as 250,000.

Where the Layoffs Are—Is Your Firm on the List?
http://www.cnbc.com/id/27575462
This is a good article that highlights the widespread impact of the current financial crises as it hits general employment in many sectors.

Businesses that provide non-core goods and services are seeing huge downturns in demand; advertising, architects/engineers, bankers, construction, consulting, energy , luxury goods, marketing, and other expensive capital goods providers have been most severely impacted. Local and state governments have also been impacted by diminished demand for tax free bond financings, impacting employment and services of governments. The situation is not pretty, and getting worse fast. Sectors such as hospitals, physicians, schools, and law enforcement seem less impacted, however spending for capital projects at these later sectors has diminished.

So ear has now turned to action by corporations in terms of suspended capital projects, and the unemployment notices, particularly massive reductions of 100+ or more and piling up. Personal consumption should further retract with fear of prolonged unemployment and difficult operating conditions. The law of inertia would portend that the downward spiral will continue until moved upon by some greater force -- hitting the bottom. Until that time, whenever it arrives, further tightening is predictable.

What to do, prepare your own personal economic survival plan, and one for your company and community. With capital tightening, having access to cash or equivalents is vital, and one should seek to secure 6-9 months of operating capital. It is unlikely that anything soon will come from the transitional government or the New Congress so it is likely that it will be springtime before we see any meaningful change to the downward trend.

Pink slips are flying in sorties hitting specific markets, industries, and geographic locations

"Around the nation, mass job cuts jumped 74 percent to 2,269 events from 1,307 a year ago, seasonally adjusted. Unemployment insurance claims as a result were up more than 80 percent at 235,681, versus 128,487 last year. "
http://www.bizjournals.com/cincinnati/stories/2008/10/20/daily41.html

Cyber Crime Wave Rising - UK Report

Cyber crime, those crimes committed via a computing device and networks has risen this past year, and is expected to increase as economic misery deepens. A news story published by the BBC shows that "In 2007, the sharpest rise was in online financial fraud, with more than 250,000 incidents reported in 2007; a 20% rise on the previous year. The report highlighted a growing professionalism among online criminals, with personal and credit details being traded online. Garlik said that the information black market had doubled, with more than 19,000 illicit traders identified. " "Online harassment also increased. More than two million people were the victim of an abusive email, false accusation or blackmail attempt. It is thought the growing popularity of social networking sites helped drive this, providing a new widespread medium for online harassment." Read the article in its entirey at:
http://news.bbc.co.uk/1/hi/technology/7697704.stm

Keeping ones head above water in financial turmoil

These are indeed tumultuous financial times and if you have a job, you should do all you can do to keep it. The financial tsunami has hit the capital markets, and now the repercussions are starting to hit. Job layoffs announced this week included a stunning 24,000 RIFs at Hewlett Packard, 7000 RIFs at American Express, 3,000 at Motorola, and these add to the already announced 3,200 Goldman Sachs, 25% cutback in salaried and contract workers at Chrysler, 1,000 jobs cut at Yahoo, and approximately another 10,000 positions lost at the bankrupt Lehman Brothers, to name a few.

In times like these, you need a good lifeboat strategy for preserving your capital, preserving your job, and preparing for rainy days ahead. A short list of 12 financial tools were published today that provide some useful aids for those preparing for the future, or battling financial crises now.

PICKING UP THE PIECES: 12 OF THE BEST RESOURCES FOR INVESTORS IN TOUGH TIMES; 19-Member Alliance Including SEC, Fed, FINRA and States Highlights Timely Investor Education Tools. The new “Picking Up the Pieces" section of the AIE Web site features the following 12 top resources for consumers:

Top Five Facts When Investing in Turbulent Markets - CFA Institute.
Caution to Investors Against Making Uninformed, Sudden Decisions Amid Wall Street Crisis - North American Securities Administrators Association.
Mortgage Foreclosure Resources - Federal Reserve Board.
Treasury's Guarantee Program for Money Market Mutual Funds: What You Should Know - Financial Industry Regulatory Authority.
How Safe Are My Savings? - PathToInvesting.org/SIFMA.
Account Protection Concerns During Market Volatility - National Futures Association.
How SIPC Protects You in Case of a Brokerage Firm Failure - Securities Investor Protection Corporation.
Information for Individual Investors on Recent Market Events - Securities and Exchange Commission.
The Importance of Being an Informed Investor - Investment Company Institute.
Bank Failures, Mergers and Takeovers: A “Phish-erman’s Special” - Federal Trade Commission. Is R-I-S-K Really a 4-letter Word? - American Association of Individual Investors.
Life Crisis - Financial Planning Association.

For the full article follow this link
http://www.investoreducation.org/Release103008.cfm?CFID=258257&CFTOKEN=63217831

Thinking ahead: Crime "opportunity blocking" will be essential to curbing the resurgence of organized crime

Make no mistake, the economic conditions are worsening, and in such times inhibitions toward criminal activity are lessened, especially for seasoned criminals. Criminal opportunity, particularly “white collar” crime is increasing and must be abated.

One of the early lessons of fighting crime in the 1930s was the essential requirement to reduce criminal opportunities of organized crime that was allowed to flourish during the age of Prohibition. The essential strategy used to protect the public during then, was a concept characterized in criminal justice research as "opportunity blocking". This same method is used as the purposive hampering of activities of organized crime groups through interrupting or eradicating the supply of illicit goods and services, most notably narcotics. This approach has been referred to by Ronald Goldstock (1990) as “opportunity blocking," a method that "seeks to change the social, economic, physical, or organizational environment so that particular crimes become impossible, or at least very difficult, to carry out;" see full discussion on page 161 in in the "Racketeering in the New York City Construction Industry" Final Report of the New York State Organized Crime Task Force" (1990).

More importantly, while drawing clues and best practices from history, our time is radically different in terms of crime opportunity made available through the internet and communications methods. Thinking about crime control in our age must combat these increased challenges with specific, measured, and targeted approach to cut off the means and instruments of crime used particularly in International organized crime, from the low-level crimes of stolen goods sales on eBay, to the great frauds placed on the public in financial crimes.

Lesson learned becomes proactive action item #005 – Add crime opportunity blocking to the list of directives within the national crime control strategy. Focus on the crime opportunity market in the words of Goldstock (1990), seek to “change the social, economic, physical, or organizational environment so that particular crimes become impossible, or at least very difficult, to carry out.”