For the first time, the Signs Team's most popular and discerning essays have been compiled into book form and thematically organized.

These books contain hard hitting exposés into human nature, propaganda, psyop activities and insights into the world events that shape our future and our understanding of the world.

The six new books, available now at our bookstore, are entitled:

• 911 Conspiracy
• The Human Condition
• The Media
• Religion
• The Work
• U.S. Freedom

Read them today - before the book burning starts!

NEW ORLEANS, Louisiana -- Parts of New Orleans are flooded with up to six feet of water Monday after some of the pumps that protect the low-lying city failed under the onslaught from Hurricane Katrina, Mayor Ray Nagin said.

Nagin said the Lower 9th Ward of New Orleans, on the east side of the city, was under five to six feet of rising water after three pumps failed.

WGNO reporter Susan Roesgen, who is with the mayor at the Hyatt hotel, said New Orleans police had received more than 100 calls about people in the area trapped on their roofs.

The National Weather Service reported the Industrial Canal, in the eastern part of the city, had breached a levee and three to eight feet of water could be expected.

The weather service reported "total structural failure" in some parts of metropolitan New Orleans, where Katrina brought wind gusts of 120 mph. While it offered no details, it said it had received "many reports."

Katrina came ashore Monday morning in southeastern Louisiana as a Category 4 storm, with winds topping 140 mph.

At 11 a.m. ET, the National Weather Service said Katrina had degraded to a Category 3 storm with maximum sustained winds near 125 mph.

New Orleans was prepared for a catastrophic direct hit from the powerful storm. About a million people fled the area, and about 10,000 people who couldn't leave hunkered in the mammoth Louisiana Superdome.

The National Hurricane Center said that the western eye wall was passing over the city at about 10 a.m. ET. (Watch video update on Katrina's path)

While the counterclockwise spin of a hurricane usually leaves the worst damage on its eastern edge, CNN meteorologist Chad Myers cautioned that "there's not really an easy side of a Category 4 storm" on the Saffir-Simpson scale.

CNN's John Zarella said that the wind was howling through the buildings in downtown New Orleans, ripping off chunks of debris and causing whiteout conditions.

He said that water was rushing down the street and had risen up to the wheel wells of parked cars.

Earlier, reporter Ed Reams from affiliate WDSU told CNN that Katrina ripped away a large section of the Superdome's roof. (See video of conditions within the darkened Superdome)

"I can see daylight straight up from inside the Superdome," Reams reported.

National Guard troops moved people to the other side of the dome. Others were moving beneath the concrete-reinforced terrace level.

About 70 percent of New Orleans is below sea level and is protected from the Mississippi River by a series of levees.

NHC deputy director Ed Rappaport told CNN that New Orleans could expect a storm surge of 15 to 20 feet.

That surge wouldn't top New Orleans' levees, but CNN's Myers noted that "there may be a 20-foot surge, but there may be a 20-foot wave on top of that."

Louisiana Gov. Kathleen Blanco said it was too soon to feel any sense of relief.

"We don't know yet," she said. "We still have a long way to go throughout this day. We are watching. We are worried of course."

At 11 a.m. ET, the storm was centered about 35 miles east-northeast of New Orleans and 45 miles west-southwest of Biloxi, Mississippi. Hurricane force winds extended about 125 miles from the storm's center.

The storm was moving north at 15 mph.

The storm's eastern eye wall was approaching Biloxi and Gulfport, Mississippi.

Authorities in Gulfport told CNN that 10 feet of water cover downtown streets.

"There is intense damage," said CNN's Gary Tuchman from Gulfport. "We are watching the dismantling of a beautiful town."

"We are watching these building deteriorate and break down before our eyes," he said. "Because the water is so deep, boats are floating up the street. There is extensive damage here. This is essentially right now like hell on earth."

In Biloxi, CNN meteorologist Rob Marciano reported that wind gusts topping 100 mph were starting to pull the roofs off of nearby buildings. (Watch video report from Biloxi, Mississippi)

Hurricane warnings are posted from Morgan City, Louisiana, eastward to the Alabama-Florida state line, including New Orleans and Lake Pontchartrain. This means winds of at least 74 mph are expected in the warning area within the next 24 hours.

A tropical storm warning is in effect from the Alabama-Florida state line eastward to Destin, Florida, and from west of Morgan City to Intracoastal City, Louisiana. A tropical storm warning is also in effect from Intracoastal City, Louisiana, west to Cameron, Louisiana, and from Destin, Florida, eastward to Indian Pass, Florida.

A tropical storm warning means tropical storm conditions, including winds of at least 39 mph, are expected within 24 hours. [...]

NEW ORLEANS, Louisiana - Hurricane Katrina claimed its first victims in Louisiana as it slammed into barrier islands while dumping torrential rain on a wide swath of the US Gulf of Mexico coast and threatened more death and massive destruction.

The hurricane made its first landfall as its northern eye crossed the coast near Grand Isle, one of Louisiana's barrier islands, at about 1000 GMT on Monday, said Martin Nelson, an official with the
National Hurricane Center.

"We may have a second landfall later on," Nelson said in a brief telephone interview.

Although slightly weaker than on Sunday, the monster storm has already forced hundreds of thousands of residents from New Orleans to Biloxi, Mississippi, to flee and seek refuge on higher ground. [...]

US President George W. Bush declared a state of emergency that clears the way for federal aid, and urged people to get out of the hurricane's path.

"We cannot stress enough the dangers this hurricane poses to Gulf Coast communities. I ask citizens to put their safety and the safety of their families first by moving to safe ground," Bush said from his Texas ranch. [...]

Authorities also ordered evacuations in neighboring Mississippi, which is also expected to be slammed by the monster storm.

Since Katrina raged dangerously close to offshore oil platforms, most of which have been evacuated, oil prices hit new record highs after crossing 70 dollars a barrel in Asia Monday and were expected to go higher.

The deadly storm wrought havoc in Miami and other areas of south Florida last week, killing seven people, uprooting trees and flooding entire neighborhoods.

About half a million people still had no electricity on Sunday.

Katrina is the 11th named Atlantic storm this year and among the most powerful Atlantic hurricanes on record. Records going back to 1851 show that only three category-five hurricanes have hit the United States in more than 150 years.

Of three category-five storms noted in history, Hurricane Andrew killed more than two dozen people when it slammed into south Florida in 1992, while Camille caused more than 250 deaths in Mississippi in 1969, and "Labor Day" killed about 600 people in the Florida Keys in 1935.

NEW ORLEANS - Hurricane Katrina turned slightly to the east before slamming ashore early Monday with 145-mph winds, providing some hope that the worst of the storm's wrath might not be directed at this vulnerable, below-sea-level city.

Katrina, which weakened slightly overnight to a Category 4 storm, turned slightly eastward before hitting land, which would put the western eyewall - the weaker side of the strongest winds - over New Orleans.

But National Hurricane Center Director Max Mayfield warned that New Orleans would be pounded throughout the day Monday and that Katrina's potential 20-foot storm surge was still more than capable of swamping the city.

Katrina, which a day before had grown to a 175-mph, Category 5 behemoth, made landfall about 6:10 a.m. CDT east of Grand Isle in the bayou town of Buras.

The storm hammered the Gulf Coast with huge waves and tree-bending winds. Exploding transformers lit up the predawn sky in Mobile, Ala., while tree limbs littered roads and a blinding rain whipped up sand on the deserted beach of Gulfport, Miss.

Katrina's fury also was felt at the Louisiana Superdome, normally home of professional football's Saints, which became the shelter of last resort for about 9,000 of the area's poor, homeless and frail.

Electrical power at the Superdome failed at 5:02 a.m., triggering groans from the crowd. Emergency generators kicked in, but the backup power runs only reduced lighting and cannot run the air conditioning.

About 370,000 customers in southeast Louisiana were estimated to be without power, said Chenel Lagarde, spokesman for Entergy Corp., the main energy power company in the region. [...]

Mayor Ray Nagin said he believed 80 percent of the city's 480,000 residents had heeded an unprecedented mandatory evacuation as Katrina threatened to become the most powerful storm ever to slam the city.

"It's capable of causing catastrophic damage," Mayfield said. "Even well-built structures will have tremendous damage. Of course, what we're really worried about is the loss of lives.

"New Orleans may never be the same."

Crude oil futures spiked to more than $70 a barrel in Singapore for the first time Monday as Katrina targeted an area crucial to the country's energy infrastructure, but the price had slipped back to $68.95 by midday in Europe. The storm already forced the shutdown of an estimated 1 million barrels of refining capacity.

Terry Ebbert, New Orleans director of homeland security, said more than 4,000 National Guardsmen were mobilizing in Memphis and would help police New Orleans streets. [...]

For years, forecasters have warned of the nightmare scenario a big storm could bring to New Orleans, a bowl of a city that's up to 10 feet below sea level in spots and dependent on a network of levees, canals and pumps to keep dry from the Mississippi River on one side, Lake Pontchartrain on the other.

The fear is that flooding could overrun the levees and turn New Orleans into a toxic lake filled with chemicals and petroleum from refineries, as well as waste from ruined septic systems.

Nagin said he expected the pumping system to fail during the height of the storm. The mayor said the U.S. Army Corps of Engineers was standing by to get the system running, but water levels must fall first.

"We are facing a storm that most of us have long feared," he said. "This is a once-in-a-lifetime event."

Major highways in New Orleans cleared out late Sunday after more than 24 hours of jammed traffic as people headed inland. At the peak of the evacuation, 18,000 people an hour were streaming out of southeastern Louisiana, state police said. [...]

New Orleans has not taken a direct hit from a hurricane since Betsy in 1965, when an 8- to 10-foot storm surge submerged parts of the city in seven feet of water. Betsy, a Category 3 storm, was blamed for 74 deaths in Louisiana, Mississippi and Florida.

Evacuation orders also were posted all along the Mississippi coast, and the area's casinos, built on barges, were closed early Saturday. Bands of wind-whipped rain increased Sunday night and roads in some low areas were beginning to flood. [...]

Katrina hit the southern tip of Florida as a much weaker storm Thursday and was blamed for nine deaths. It left miles of streets and homes flooded and knocked out power to about 1.45 million customers. It was the sixth hurricane to hit Florida in just over a year.

NEW ORLEANS - When Hurricane Katrina hits New Orleans on Monday, it could turn one of America's most charming cities into a vast cesspool tainted with toxic chemicals, human waste and even coffins released by floodwaters from the city's legendary cemeteries.

Experts have warned for years that the levees and pumps that usually keep New Orleans dry have no chance against a direct hit by a Category 5 storm.

That's exactly what Katrina was as it churned toward the city. With top winds of 165 mph and the power to lift sea level by as much as 28 feet above normal, the storm threatened an environmental disaster of biblical proportions, one that could leave more than 1 million people homeless.

"All indications are that this is absolutely worst-case scenario," Ivor van Heerden, deputy director of the Louisiana State University Hurricane Center, said Sunday afternoon.

The center's latest computer simulations indicate that by Tuesday, vast swaths of New Orleans could be under water up to 30 feet deep. In the French Quarter, the water could reach 20 feet, easily submerging the district's iconic cast-iron balconies and bars.

Estimates predict that 60 percent to 80 percent of the city's houses will be destroyed by wind. With the flood damage, most of the people who live in and around New Orleans could be homeless.

"We're talking about in essence having - in the continental United States - having a refugee camp of a million people," van Heerden said.

Aside from Hurricane Andrew, which struck Miami in 1992, forecasters have no experience with Category 5 hurricanes hitting densely populated areas.

"Hurricanes rarely sustain such extreme winds for much time. However we see no obvious large-scale effects to cause a substantial weakening the system and it is expected that the hurricane will be of Category 4 or 5 intensity when it reaches the coast," National Hurricane Center meteorologist Richard Pasch said.

As they raced to put meteorological instruments in Katrina's path Sunday, wind engineers had little idea what their equipment would record.

"We haven't seen something this big since we started the program," said Kurt Gurley, a University of Florida engineering professor. He works for the Florida Coastal Monitoring Program, which is in its seventh year of making detailed measurements of hurricane wind conditions using a set of mobile weather stations. [...]

ANNA MARIA ISLAND - Ten miles off our coast are areas bereft of sea life along the Gulf floor. The devastated marine communities span 2,162 square miles - larger than the state of Delaware.

The Fish and Wildlife Research Institute in St. Petersburg, and Sarasota's Mote Marine Laboratory continue investigating reports of "dead zones," or areas devoid of life in the Gulf of Mexico from Sarasota to New Port Richey.

Preliminary results were released Tuesday from a three-day research cruise conducted last week from the mouth of Tampa Bay to Pasco County, indicating that oxygen and sea life are beginning to return to some affected areas.

Also on Tuesday, the Sierra Club held a press conference to call for local, state and federal authorities to curb pollution of coastal areas and fund research into algal blooms and coastal degradation.

It is unclear how much of a role pollution played in the latest red-tide season and resulting reef devastation, but researchers said oxygen is returning to areas that had little or none during the past two weeks, an encouraging sign to the institute's Cynthia Heil.

"The bottom communities are still impacted, but it's the first step in the recovery process," Heil said.

The bottom waters of sample areas from northern Pinellas and Pasco counties, however, still show conditions of anoxia, the absence of dissolved life-sustaining oxygen, and hypoxia, or little dissolved oxygen.

The most intense anoxic areas appear to lie between Anna Maria Island north to Pasco and Hernando counties, said Richard Pierce, senior scientist and director of Mote's center of ecotoxicology.

Offshore from Sarasota, areas of low oxygen were found last week at the 1 mile mark and further south to the Fort Myers area, Pierce said.

Scientists are still unsure whether the mass mortalities were caused from direct contact with the red tide toxin or the secondary effects of oxygen depletion from the decomposition of marine life, Heil said.

The preliminary report said there's a strong thermocline, the zone where the water changes temperature and can prevent upper and lower water levels from mixing and diluting the red tide toxin or pockets of anoxia.

High concentrations of the red tide toxin Karenia brevis were found at the surface and bottom of nearshore regions, as well in the surface waters offshore of the affected area.

Affected sites showed low visibility and high levels of hydrogen sulfide. Hydrogen sulfide is produced by bacteria, emits a rotten-egg-like smell and turns metals black, two occurrences reported by divers last week.

The full report, expected to be released today, will include data from Mote Marine focusing on areas south of Longboat Pass.

The waters off Longboat Pass is where captain Wayne Genthner said he first witnessed the absence of life from the water's surface to sea floor.

"Last Wednesday, (I) found a dead zone seven miles out of Longboat Pass," Genthner told The Herald. "I went diving down there and did five others the same day to confirm my observations."

At Tuesday's press conference, Genthner said the situation has shrunk his weekly charter boat revenue from $3,000 to $300 per week.

Genthner said fish are moving further west so he must take fishing charters further out. The result is higher expense in gas and potential safety issues.

"What happens if a storm gets in between me and land?" Genthner said.

Dr. Larry Brand, a scientist at the University of Miami, also spoke at the press conference to share the results of a study he conducted for Lee County using data going back to the 1950s.

"The red tide organisms are 10 times more abundant than 50 years ago," Brand said.

According to the data from the Gulf between Tampa Bay and Sanibel, Brand said the blooms are more intense, spatially larger and longer lasting.

MATAGORDA CO., TX - Miles and miles of dead fish are turning up in Texas waters and it's hitting Matagorda especially hard.

From the sky, a sea of white is covering the mouth of the Colorado River. Upon closer look, you'll see dead fish – millions of them.

"Unbelievable if you haven't seen it before," said Matagorda County Commissioner George Deshotel.

The stunning images of devastation run for miles. It's one of the largest fish kills people in the town of Matagorda have seen in years.

Ronnie Dodd runs a spring bridge and watched dozens of fish die from his perch.

"The flounder were trying to get to the side of the edge of the bank and trying to come up and get air," he told us.

Surprisingly, this is a natural event caused by stagnant water and little wind, rain, or flow.

"Millions of these menhaden come in from the Gulf into the Colorado River and because of low tidal action and low wind action, there's nothing to replenish the oxygen in the water," said Deshotel.

Texas Parks and Wildlife is closely monitoring the situation.

"It'll run its course, and when it's done, it's done," said Bill Balboa with Texas Parks and Wildlife. "It may happen again, but it happens all up and down the coast."

But for now, Matagoda is the worst place...a place with a community that depends on the fish that are quickly dying.

The fish began dying a few days ago. If the menhaden keep coming in and the conditions don't change, more can die. And that's not good news for the local economy.

Back in 1995, there was a similar situation. Then, 60 million fish turned up dead. If you see dead fish, shrimp or crabs, contact the Texas Parks and Wildlife Department's 24-hour hotline. That number is 512-389-4848.

HURRICANES can trigger swarms of weak earthquakes and even set the Earth vibrating, according to the first study of such effects.

When Hurricane Charley slammed into Florida in August 2004, physicist Randall Peters of Mercer University in Macon, Georgia, had a seismometer ready to monitor any vibrations in the Earth's crust. He did so for over 36 hours as Charley travelled briefly over Florida, then slid back out into the Atlantic.

As the hurricane reached land, the seismometer recorded a series of "micro-tremors" from the Earth's crust. This happened again as the storm moved back out to sea. Then, as Charley grazed the continental shelf on its way out, it caused a sharp seismic spike. "I suspect the storm triggered a subterranean landslide," says Peters.

More surprisingly, the storm also caused the Earth to vibrate. The planet's surface in the vicinity of the hurricane started moving up and down at several frequencies ranging from 0.9 to 3 millihertz. Such low-frequency vibrations have been detected following large earthquakes, but this is the first time a storm has been found to be the cause (www.arxiv.org/physics/0506162).

Two coronal mass ejections hit Earth's magnetic field on August 24th, sparking a severe geomagnetic storm. Bright auroras appeared over Canada and many US states. The display was especially good in New Zealand and Australia, where sky watchers saw a rare display of Southern Lights:

A Category 5 hurricane, the most severe type measured, Katrina has been reported heading directly toward the city of New Orleans. This would be a human catastrophe, since New Orleans sits in a bowl below sea level. However, Katrina is not only moving on New Orleans. It also is moving on the Port of Southern Louisiana. Were it to strike directly and furiously, Katrina would not only take a massive human toll, but also an enormous geopolitical one.

The Port of Southern Louisiana is the fifth-largest port in the world in terms of tonnage, and the largest port in the United States. The only global ports larger are Singapore, Rotterdam, Shanghai and Hong Kong. It is bigger than Houston, Chiba and Nagoya, Antwerp and New York/New Jersey. It is a key link in U.S. imports and exports and critical to the global economy.

The Port of Southern Louisiana stretches up and down the Mississippi River for about 50 miles, running north and south of New Orleans from St. James to St. Charles Parish. It is the key port for the export of grains to the rest of the world -- corn, soybeans, wheat and animal feed. Midwestern farmers and global consumers depend on those exports. The United States imports crude oil, petrochemicals, steel, fertilizers and ores through the port. Fifteen percent of all U.S. exports by value go through the port. Nearly half of the exports go to Europe.

The Port of Southern Louisiana is a river port. It depends on the navigability of the Mississippi River. The Mississippi is notorious for changing its course, and in southern Louisiana -- indeed along much of its length -- levees both protect the land from its water and maintain its course and navigability. Dredging and other maintenance are constant and necessary to maintain its navigability. It is fragile.

If New Orleans is hit, the Port of Southern Louisiana, by definition, also will be hit. No one can predict the precise course of the storm or its consequences. However, if we speculate on worse-case scenarios the following consequences jump out:

- The port might become in whole or part unusable if levees burst. If the damage to the river and port facilities could not be repaired within 30 days when the U.S. harvests are at their peak, the effect on global agricultural prices could be substantial.

- There is a large refinery at Belle Chasse. It is the only refinery that is seriously threatened by the storm, but if it were to be inundated, 250,000 barrels per day would go off line. Moreover, the threat of environmental danger would be substantial

- About 2 percent of world crude production and roughly 25 percent of U.S.-produced crude comes from the Gulf of Mexico and already is affected by Katrina. Platforms in the path of Katrina have been evacuated but others continue pumping. If this follows normal patterns, most production will be back on line within hours or days. However, if a Category 5 hurricane (of which there have only been three others in history) has a different effect, the damage could be longer lasting. Depending on the effect on the Port of Southern Louisiana, the ability to ship could be affected.

- A narrow, two-lane highway that handles approximately 10,000 vehicles a day, is used for transport of cargo and petroleum products and provides port access for thousands of employees is threatened with closure. A closure of as long as two weeks could rapidly push gasoline prices higher.

At a time when oil prices are in the mid-60-dollar range and starting to hurt, the hurricane has an obvious effect. However, it must be borne in mind that the Mississippi remains a key American shipping route, particularly for the export and import of a variety of primary commodities from grain to oil, as well as steel and rubber. Andrew Jackson fought hard to keep the British from taking New Orleans because he knew it was the main artery for U.S. trade with the world. He was right and its role has not changed since then.

This is not a prediction. We do not know the path of the storm and we cannot predict its effects. It is a warning that if a Category 5 hurricane hits the Port of Southern Louisiana and causes the damage that is merely at the outer reach of the probable, the effect on the global system will be substantial.

As they happily watch their houses swell in value, Americans are changing their attitudes toward mortgage debt. Increasingly, a home is no longer a nest egg whose equity should never be touched, but a seemingly magical ATM enabling the owner to live it up or just live.

Homeowners took $59 billion in cash out of their houses in the second quarter, double the amount in the 2004 quarter and 16 times the average rate of the mid-1990s, according to data released this month by mortgage giant Freddie Mac.

People are cashing out so quickly that the term "homeowner" may soon be inaccurate. Fifty years ago, Americans owned, on average, three-quarters of their house and the lender owned the rest. These days, it's approaching an even split.

This spend-now-rather-than-save-for-later phenomenon has produced undeniable benefits. Experts attribute much of the nation's economic growth to cash-out refinancings, home equity loans and other methods of tapping rising home values. And additional real estate investments financed by home equity have contributed to the rising home prices that bring owners such pleasure.

But the spending spree has a price. With the savings rate at zero, consumers' eagerness to tap home equity is only worsening their retirement outlook, financial advisors say.

If mortgage rates rise sharply or home prices fall, many homeowners could be in financial turmoil. They may be unable to service their loans, or could even find that their homes are worth less than their mortgages.

Such a prospect seems unimaginably distant to Doug Levy, a university administrator in San Francisco.

When his two-bedroom condominium rose in value by 10% - which took nine months in the hot Bay Area real estate market - Levy refinanced. That increased the size of his mortgage but gave him $25,000 to pay bills and take a modest skiing vacation in British Columbia. He's considering tapping his equity again if his condo continues to appreciate.

"It's like I'm sleeping in my piggy bank," said Levy, 44. "In this market, real estate is a liquid asset."

Bill and Barbara Brockmann have a different view of their house. The retired Huntington Beach couple is sitting on half a million dollars of equity, but they're ignoring it. They aren't drawing on it to buy a new car or invest in a condo in Miami.

"I don't like debt," said Bill Brockmann, 79. "I don't buy anything I can't pay for."

Such thriftiness has gone out of fashion. What was once considered undesirable - taking on large debt - is now seen as smart. And what used to be smart - becoming debt-free - is described as imprudent.

"If you paid your mortgage off, it means you probably did not manage your funds efficiently over the years," said David Lereah, chief economist of the National Association of Realtors and author of "Are You Missing the Real Estate Boom?" "It's as if you had 500,000 dollar bills stuffed in your mattress."

He called it "very unsophisticated."

Anthony Hsieh, chief executive of LendingTree Loans, an Internet-based mortgage company, used a more disparaging term. "If you own your own home free and clear, people will often refer to you as a fool. All that money sitting there, doing nothing."

The financial services industry is doing all it can to avoid letting consumers be foolish. Ditech.com touts home loans as a way to pay off credit cards, and Morgan Stanley says they're a good way to fund education expenses. Wells Fargo suggests taking a chunk out of your house to finance "a dream wedding."

One obvious reason for the 69% rise in mortgage debt over the last five years is the exploding cost of homes, which has far outstripped wage growth. That's led many buyers to interest-only loans and skimpy down payments, both of which minimize their equity. [...]

"There is no longer an incentive to paying off your mortgage," said Levy. "The only way I'll ever pay mine off is if I win the lottery."

That's probably the only way he'll ever be able to stop working, too. "I'm never going to be able to retire, because I'll never have enough money in the bank."

The temptation to add debt can be overwhelming. Between 1997 and 2003, the percentage of people who owned their own homes outright, without any mortgage debt, declined from 38.9% to 34.6%, according to Census figures.

"Why can't people stay on diets? Because once you get down to a certain level, you start feeling good, and then you splurge," said Richard Targett, a research analyst with Ernst & Young. "So when your home goes up in value, you take that cruise. You figure, I got money in my house, I didn't earn it, let me spend some."

But he warned that if home prices stopped their rapid ascent - which might be happening this summer - Doug Levy won't be the only one who has to have a job for the rest of his life.

"If you're not working, where would you get the two grand you need every month for your mortgage?" Targett said. "We're living longer, retiring younger, and don't want to give up our lifestyles. Something's got to give."

The old way had much less built-in risk. [...]

CMG Financial Services, a mortgage company in San Ramon, Calif., introduced another tool this summer: a combination checking account and mortgage.

It works like this: Your paycheck is deposited into your account and immediately applied to your mortgage principal. Over the course of the month, as you spend money on food, gas and other necessities, the principal creeps back up. But the result is that your mortgage debt gets paid off more quickly.

That's the theory, at least. Of course, if you're indulgent, you can pay much less of your mortgage - like none. Any shortfall is added on to the principal.

"This loan gives you a lot of power," said CMG's vice president of marketing, Doug Nesbit. "You can use it, you can abuse it."

In the old days, retirees who were house-rich and cash-poor generally downsized, perhaps moving in with their kids or retiring to the Sunbelt. To help consumers avoid those fates, reverse mortgages have been developed, which allow them to drain the equity from their houses while still living in them.

Irvine-based Financial Freedom Corp. says one of the major reasons people buy its reverse mortgages is "lifestyle enhancement" - extra money to have fun. Financial Freedom says it is on track this year to nearly double the 5,000 reverse mortgages it sold in 2004 in California.

The Brockmanns have resisted all such newfangled products, as well as the advice of their 55-year-old daughter. "Take out a line of credit and go travel," Sandi Bandfield said she had suggested. "Interest rates are so low, your payments would be next to nothing. You'd be enjoying life."

They already do. [...]

For their eldest daughter, the more houses the better. Bandfield was a medical transcriptionist until recently; her husband Bud, 49, is an independent electrical contractor. They bought their home in Boulder Creek, Calif., near Santa Cruz, for $157,000 in 1989. Substantially remodeled, it's now worth at least four times that.

Last year, the couple began talking about retirement. "We don't want to work forever, and someone's got to pay for this house," Bandfield said. "We have a nice life, but nothing in savings to speak of. I saw us relegated to a dinky gray condo in Las Vegas if we didn't do something."

Stocks? "I dabbled. I think I made $26 last year." Social Security? "It's piddly. Who wants to live like that?"

Real estate seemed the obvious, and only, answer. The couple attended seminars, began to educate themselves. They remortgaged their home to buy a three-bedroom in Visalia, then a two-bedroom cabin near Lake Arrowhead. More recently, they bought two houses in Colorado.

Buying houses to rent them out is a popular strategy. The National Association of Realtors estimates that as many as a quarter of all homes were purchased last year by investors, drawn by the lure of immediate rental income and long-term appreciation.

Bandfield's goal is 10 properties, each yielding $1,000 a month above the mortgage and upkeep. That would nicely fund their retirement. "If we don't do anything," she said, "we're going to have nothing."

WALL STREET shuddered yesterday after Alan Greenspan, the United States' central banker, warned American homebuyers that they risk a crash if they continue to drive property prices higher.

He said that the US house-price spiral had become an economic imbalance, threatening stability like the country's trade gap or its budget deficit.

In a pre-retirement speech to fellow central bankers at Jackson Hole, Wyoming, Mr Greenspan said that people were investing in houses as if they were a one-way bet, not allowing for the risk of price falls. He said "history had not dealt kindly" with investors who kept ignoring risks.

The Federal Reserve Chairman's warning, his strongest yet, sent share prices falling on Wall Street, at one point knocking 66 points off the Dow Jones industrial average. By the close the Dow had recovered to 10,397.30, down 53.30 points.

Traders said that Mr Greenspan's comments were reminiscent of his 1996 inveighing against "irrational exuberance" on the stock market, for fear that a crash there would hit consumers and push the economy into recession. When the share price bubble finally burst, Mr Greenspan cut Federal interest rates to 1 per cent, triggering the flood of cheap loans for housing. He fears that rate increases set in train as the economy recovered could throw the housing market into reverse and suggested that the twin deficits would now restrict his room to manoeuvre if a house price downturn hit spending. Asset prices were, he complained, driving monetary policy more than ever before.

Share traders were also worried by an unexpectedly sharp fall in the University of Michigan consumer confidence index, a small but influential barometer, which fell for the first time in three months. The expectations index slid from 88.5 to 76.9.

Rob Carnell, of ING Bank in London, said that Mr Greenspan's warning was an eerie reminder of a successful campaign last summer by Mervyn King, Governor of the Bank of England, to "use rhetoric rather than interest rates" to cool an overheating homes market. Britain has avoided a crash thus far.

On traditional tests, about a third of US local homes markets are now markedly overpriced. Over the past five years, the average US house price has risen by 50 per cent, half the rate of increase in UK prices in the five years to summer 2004. However, prices have risen more sharply in favoured areas, such as New York, and more than doubled in a few cities, such as San Diego.

You owe $145,000. And the bill is rising every day. That's how much it would cost every American man, woman and child to pay the tab for the long-term promises the U.S. government has made to creditors, retirees, veterans and the poor.

And it's not even taking into account credit card bills, mortgages - all the debt we've racked up personally. Savings? The average American puts away barely $1 of every $100 earned.

Our profligate ways at home are mirrored in Washington and in the global marketplace, where as a society America spends $1.9 billion more a day on imported clothes and cars and gadgets than the entire rest of the world spends on its goods and services.

A new Associated Press/Ipsos poll finds that barely a third of Americans would cut spending to reduce the federal deficit and even fewer would raise taxes.

If those figures seem out of whack to you, if they seem to cut against the way you learned to handle money, if they seem like a recipe for a national economic nightmare - well, then, at least you're not alone.

A chorus of economists, government officials and elected leaders both conservative and liberal is warning that America's nonstop borrowing has put the nation on the road to a major fiscal disaster - one that could unleash plummeting home values, rocketing interest rates, lost jobs, stagnating wages and threats to government services ranging from health care to law enforcement.

David Walker, who audits the federal government's books as the U.S. comptroller general, put it starkly in an interview with the AP:

"I believe the country faces a critical crossroad and that the decisions that are made - or not made - within the next 10 years or so will have a profound effect on the future of our country, our children and our grandchildren. The problem gets bigger every day, and the tidal wave gets closer every day."

Federal Reserve Chairman Alan Greenspan echoed those worries just last week, warning that the federal budget deficit hampered the nation's ability to absorb possible shocks from the soaring trade deficit and the housing boom. He criticized the nation's "hesitancy to face up to the difficult choices that will be required to resolve our looming fiscal problems."

Certainly, there are those who feel such comments bring to mind the preachers who predict the end of the world at a specific time and place, and have always been wrong. And undeniably, borrowing isn't all bad - easy access to money has been a critical tool in building America's businesses, from mom-and-pops to multinationals.

But something has changed. More than two centuries ago, Benjamin Franklin warned: "He that goes aborrowing, goes asorrowing." Now, a laugh-til-you-cry commercial portrays a man with a beautiful home and car declaring: "I'm in debt up to my eyeballs. I can barely pay my finance charges. Somebody help me."

The epidemic of American indebtedness runs from home to government to global marketplace. [...]

The AP/Ipsos poll of 1,000 adults taken July 5-7 found that a sweeping majority - 70 percent - worried about the size of the federal deficit either "some" or "a lot."

But only 35 percent were willing to cut government spending and experience a drop in services to balance the budget. Even fewer - 18 percent - were willing to raise taxes to keep current services. Just 1 percent wanted to both raise taxes and cut spending. The poll has a margin of error of 3 percentage points.

The nation's political leaders could hardly be said to have a mandate calling for fiscal responsibility. [...]

Some note things are getting better: The latest reports project a deficit of $331 billion for 2005, nearly $100 billion less than expected. Outstanding debt - the amount of securities and bonds that must be repaid - is far below what it was in the early 1990s.

But bigger worries lie ahead.

The nation's three biggest entitlement programs -
Social Security, Medicare and Medicaid - make promises for retirement and health care (for the elderly and the poor) which carry a huge price tag that balloons as the population grows and ages.

Add it up: current debt and deficit, promises for those big programs, pensions, veterans health care. The total comes to $43 trillion, says Walker, the nation's comptroller general, who runs the Government Accountability Office. That's where the $145,000 bill for every American, or $350,000 for every full-time worker, comes from.

Simply hoping for good times to return won't erase numbers like that, Walker says.

"There's no way we're going to grow our way out of our long-range fiscal imbalance," he says, adding that the country must re-examine tax policy, entitlement programs and the entire federal budget.

"I really do not believe the American people have a real idea as to where we are and where we're headed, and what the potential implications are for the country if we don't start making some tough decisions soon," he says. [...]

Some people, however - including economists - think the picture isn't so gloomy.

Ben Bernanke, who recently left the Federal Reserve Board to serve as President Bush's top economic adviser, has argued that the problem is not with the United States. The trouble lies overseas, where people want to save rather than spend their money. The key is to encourage other countries to spend and invest more, he says, though he also believes that the federal budget needs to be balanced.

By raising the issue of foreign investment, Bernanke touches on another area that scares economists - America's inexhaustible desire for foreign goods.

The trade deficit - the difference between what America imports and what it exports - is the highest it's ever been, both in absolute numbers and in comparison to the size of the economy.

As a society, Americans are on track this year to spend $680 billion more on foreign goods such as Chinese-made clothes, Japanese-made cars and Scandinavian cell phones than overseas buyers do on American goods. The crush of arriving, Asian-made products recently spurred the Port of Los Angeles to switch to 24-hour operations.

Nearly two decades ago, the country fretted over a trade imbalance equal to 3.1 percent of the overall economy, or the gross domestic product. It's more than twice as big now, roughly 6.5 percent. [...]

In the end, Roubini, Walker and others say, disaster is still avoidable, but it's going to require the American people and the country's leaders to clean financial house - to reduce the federal deficit and the trade deficit. Global economics may drive some changes: if Japanese cars cost more, for example, Americans may buy less-expensive GMs.

If not, the future poses some frightening what-ifs:

• What if the dollar plummets? Do stocks follow? How about pensions?
• What if interest rates soar? How would all the new homeowners, who stretched to buy with adjustable and interest-only loans, cover their mortgages?
• How would consumers with record credit-card debt make their payments? Would they stop buying? Stop taking vacations? What will happen if they go bankrupt? New rules going into effect later this year make it harder on such debtors.
• How would government, which depends on the taxes of a strong economy to operate, keep all its promises?

Roubini says time is critical because the worse debt becomes, the more vulnerable America is to shocks in the global economic systems - another spike in oil prices, another major terrorist attack, another major military conflict.

Comment: Or perhaps an enormous hurricane striking a vital US shipping port...

OK, now back to you. No one's asking you to write a check to cover that $145,000, not yet. But the pressures are building around the world, in Washington, and in America's homes to straighten out our finances or get ready for a real mess.

"We're living beyond our means," Roubini says, "and we have to get our act together."

The Dow Jones Industrial Average of the United States stock market closed at 10,406.20 on Friday, down 1.5% from 10,559.23 a week earlier. The NASDAQ closed at 2123.99, down 0.5% from last week's close of 2135.56. The yield on the ten-year U.S. Treasury Note was 4.18%, down four basis points from 4.22 at the previous week's close. The dollar closed at 0.8140 euros, down 0.9% from 0.8217 euros at the previous week's close. The euro closed at 1.2285 dollars up from 1.2177 a week ago. Oil closed at 66.13 dollars a barrel on Friday, up 1.7% from $65.05 on the previous Friday. In euros, oil would be valued at 53.83 euros a barrel at Friday's close, up 0.8% compared to 53.42 at the previous Friday's close. Gold closed at 441.80 dollars an ounce on Friday, up slightly from the previous week's close of $441.60. That would put gold at 359.63 euros an ounce, down 0.8% from 362.65 a week earlier. Comparing gold to oil, an ounce of gold would buy 6.68 barrels of oil, down 1.6% from 6.79 the week before.

The University of Michigan's Consumer Confidence report for July/August came out Friday and the numbers were worse than expected, which helped drag the stock market down and increase anxiety among economic analysts and players.

With the price of energy rising, with wages falling or stagnating, with the price of health care in the United States rising rapidly, and with the price of college educations rising rapidly, it should be no surprise that everyone outside of the elite think that the economy is in bad shape. Recently there have been attempts by the elite to understand why the rest of us feel that way:

Why a booming economy feels flat

Personal income is one key area where workers have fallen behind, compared with past periods of strong wage growth.

By Mark Trumbull
Staff writer of The Christian Science Monitor

Think back to the last time the American economy was rapidly rolling forward: output growing more than 4 percent a year, millions of new jobs were created, and unemployment on a downward slope.

Yes, the 1990s was a golden economic era. But the description refers to the performance that began last year.

Despite continued strong economic growth, this expansion is clouded with enough complications and uncertainties that, for many, it doesn't feel like good times.

The reason? A boom in corporate profits has not yet created a job market that makes workers feel secure, economists say. Hiring hasn't skyrocketed. Worse, wages are stagnant. This paycheck squeeze may prove more worrisome than soaring oil prices and concerns over a housing bubble. Some experts worry that wage stagnation may prove more permanent this time, because of an increasingly global market for labor.

Few economists claim that today's economy matches the late 1990s, when unemployment was lower and job numbers seemed to rise as easily as the Dow Jones Industrial Average.

There are real differences - higher oil prices are just the most obvious. But the current expansion is also occurring against a backdrop of worries.

The pace of job growth, for one thing, was almost imperceptible during two years of concern about a "jobless recovery." Now that the economy has some momentum, the financial press is focused on threats to consumer well-being, such as the burden of energy costs and a soaring real estate market.

"Surveys show that even though the economy is growing reasonably strongly, a lot of households don't feel that," says Nariman Behravesh, chief economist at Global Insight in Lexington, Mass.

He points to two key reasons. First, since the last recession ended in November 2001, job growth has been weak until last year, when the Labor Department's employer survey showed a gain of 2.2 million jobs. Second, wage growth has been lackluster, despite strong gains in worker productivity.

Normally, as employees are able to produce more in each hour of work, the result is greater cash flow that can be divvied up between workers and owners or investors. In the long run, rising productivity means rising wages and living standards.

But in the short run, "most of the gains in the economy have gone into profits rather than wages," says Mr. Behravesh.

The latest numbers from the Labor Department, in fact, show average weekly earnings for US workers have fallen by 0.5 percent in the past year, after adjusting for inflation.

The divergence between productivity has sparked a debate among economists. Some say the gap is temporary, and will narrow as the labor market tightens and workers get more leverage to bargain. Others worry that it's a sign of new realities in the global marketplace that are pushing down US wages as workers compete with increasingly educated rivals in places such as India, China, and South Korea.

Whichever view proves more valid in that debate, many Americans are feeling the combined pinch of slow wage growth, jobs that still aren't as plentiful as many would like, and a stock market that's snorting pretty softly for a bull.

Only 37 percent of the public thinks the national economy is in good shape, according to a June poll by the Pew Research Center poll. That's higher than two years ago, but down from 2004. Perhaps more ominously, the percentage of the public rating their own financial situation positively fell to 44 percent, down from 51 percent in January. Sixty percent say jobs are too scarce in their community.

This analysis exemplifies one of the worst aspects of neo-liberalism: a complete blind spot when it comes to exploitation. Notice the "not-yet" wording: "A boom in corporate profits has not yet created a job market that makes workers feel secure, economists say." Notice also the resort to that old chestnut of economists, the "long run," regarding the contrast between rising productivity and stagnating wages: "Normally, as employees are able to produce more in each hour of work, the result is greater cash flow that can be divvied up between workers and owners or investors. In the long run, rising productivity means rising wages and living standards."

Paul Krugman, under fewer illusions, depicts the situation more clearly than do the experts quoted in articles like the one above:

Summer of Our Discontent

By PAUL KRUGMAN
August 26, 2005

For the last few months there has been a running debate about the U.S. econ