Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Thurs 10.23.2008
'Gold will go even to $2,000 in two years’ Expect short-term hesitancy in the upward movement of the gold price until liquidity returns to the markets, says Frank Holmes, CEO and chief investment officer at U. S. Global Investors and co-author of the new book “The Goldwatcher: Demystifying Gold Investing” (John Wiley & Sons). In this exclusive interview with The Gold Report, he predicts gold will go to $1,000, even $2,000, over the next two years. A growing money supply due to a change in government policies will help lift some juniors out of their misery, too. Holmes advises selective nibbling until conditions improve and names a few companies to consider.
Personal loans out, Gold is God now At a time when most banks have closed or scaled down the personal loans and other non-collateral lending, gold has come to the rescue of a large number of Indians who depend on loans for their business and other needs. And who else other than World Gold Council will be heartened to make this happen. Gold is a traditional and emotional investment in India and WGC is now engaging banks to have gold as collateral for personal loans.
Pay Attention To Indian Silver Buying Spree The massive correction in silver brings back Indian buyers. According to a Reuters story, Indians also shift to silver as the high silver/gold ratio of 80:1 makes the white metal appear cheaper to its competitor gold. Imports have jumped to 250 tons every month since August after a dull first half 2008 when record prices repelled buyers. Silver dramatically undershot my worst case scenario of a low at $14, trading briefly below $9 before it recovered to the current level around $10. The silver miners got knifed accordingly, playing out the bad side of beta with losses of up to 90% this year. But the Indian buying spree and losses in production because base metals mines are closing due to the price slump may be a solid base for the next upleg on fundamentals.
Presidential Change May Spur Attack, Chertoff Says Terrorists may see the change to a new U.S. presidency during the next six months as a prime chance to attack, no matter who wins the White House, Homeland Security Secretary Michael Chertoff said. "Any period of transition creates a greater vulnerability, meaning there's more likelihood of distraction," Chertoff said in an interview yesterday. "You have to be concerned it will create an operational opportunity for terrorists." The risk is the same whether Democrat Barack Obama or Republican John McCain is elected president on Nov. 4, he said. That comment undercuts McCain's argument that the U.S. would be more in danger of an attack if Obama, 47, wins.
Top Iran officials recommend preemptive strike against Israel Senior Tehran officials are recommending a preemptive strike against Israel to prevent an Israeli attack on Iran's nuclear reactors, a senior Islamic Republic official told foreign diplomats two weeks ago in London. The official, Dr. Seyed G. Safavi, said recent threats by Israeli authorities strengthened this position, but that as of yet, a preemptive strike has not been integrated into Iranian policy.
"Nuke strike would make 9/11 insignificant" and other weird warnings Over the last 72 hours there has been a strange melange of cryptic messages leaked from world political leaders about what could be in store for America over the next few months. These predictions of impending doom come from England, France, Australia and the United States. In each case there has been a press releases or news expose’ predicting huge and building threats emerging from faceless enemies in shadowy places. Crisis will lead to unpopular decisions by Barack Obama.
Nuclear incident would make 9/11 'insignificant': nuke commission The world is on the brink of an avalanche in the spread of devastating weaponry, a new global non-proliferation group warned Tuesday, saying that a nuclear incident would dwarf the September 11 attacks. The Middle East, particularly Iran, is a potential tipping point, according to Gareth Evans, co-chair of the newly formed International Commission on Nuclear Non-proliferation and Disarmament. Evans, a former Australia foreign minister, said the world had been "sleepwalking" on the issue of atomic weapons for a decade. "The devastation that could be wreaked by one major nuclear weapons incident alone puts 9/11 and almost everything else (in) to the category of the insignificant," he said, referring to the attacks inflicted on the United States in 2001.
Israel will hit Iran nuke sites, France's Kouchner warns Visiting French Foreign Minister Bernard Kouchner warned that Israel would strike archfoe Iran before it was able to develop nuclear weapons, in comments published on Sunday. "I honestly don't believe (a nuclear weapon) will give any immunity to Iran," Kouchner said in an interview conducted in English with Israel's Haaretz newspaper during a two-day visit to the region. "First, because you will hit them before. And this is the danger. Israel has always said it will not wait for the bomb to be ready. I think that (the Iranians) know. Everyone knows."
Joe Biden warns Barack Obama supporters of war and depression - "Gird your loins" Biden warns of International Crisis within six months of Obama Presidency "Mark my words. It will not be six months before the world tests Barack Obama like they did John Kennedy. The world is looking. We’re about to elect a brilliant 47-year-old senator president of the United States of America. Remember I said it standing here if you don’t remember anything else I said. Watch, we’re gonna have an international crisis, a generated crisis, to test the mettle of this guy." JFK faced down nuclear Armageddon. What type of international crisis is Biden talking about? Barack Obama has said he would send military aircraft into Pakistan and Iran in previous speeches. If he does this it could lead to a world war with Russia. Are they planning a world war?
Ballot debacle predicted for November 4 A "perfect storm" could be building for US election day on November 4 because of a combination of sky-high voter interest, new ballot machines and a shortage of poll staff, the independent Pew group warned yesterday. The Washington-based group set out a long series of problems still facing the US despite reforms aimed at avoiding a repeat of the 2000 and 2004 debacles.
"If you liked Act 1, just wait until Act 2!" . . . . The Fed’s response to the financial crisis has been more of the hair of the dog that bit ya. Virtually everything the Fed is doing is increasing debt, not decreasing it. It seems that the Fed’s theory is to keep the drunk drinking to avoid the inevitable hangover. As we have said many times, the longer you put it off, the worse the hangover will be. And we are due for a whopper, thanks to the bartender, I mean the Fed’s irresponsible actions.
Fears of Mortgage Rate Re-Sets May Fuel LIBOR Manipulation and Mask Deeper Banking System Problems It’s panic time for U.S. legislators, regulators, banks and lenders. More than $24 billion worth of adjustable-rate mortgages (ARMs) are expected to “re-set” to higher interest rates in November – boosting the likelihood of further home foreclosures. And it gets worse. That increase in borrowing costs will spread to other parts of the global debt market, representing an across-the board threat to corporate, institutional and sovereign borrowers. If interest rates remain high and interbank lending remains tight, the credit crisis is not likely to recede.
Fiscal Cat 5 Hurricane Warning You only think the Stock Market has been smashed. Just wait until you see what will come next. If you're playing "Buffett", following his claim (note: there is no penalty for lying on national television about what you're doing in your personal account) that he's buying here, there is a little ugly fact you need to be aware of. That fact is treasury issuance. See, to fund all this crap that Congress, Paulson and Bernanke have in the pipe (you know, the TARP, the newly-minted SIV that Ben announced this morning to buy commercial paper, etc) the treasury issue requirements will be north of three trillion dollars in this fiscal year. Oh, and that's before Obama wins (and he will) and promises another $1 trillion worth of new spending without a nickel's worth of ability to fund it.
CNBC stooges quarrel with Jim Rogers over hyperinflation
Inflationary Holocaust - Jim Rogers - Dollar Collapse - America Bailing Out Wallstreet (Incompetents And Crooks) At The Cost of The People
Bernanke May Seek New Ways to Ease Credit as Fed Rate Nears 1% Federal Reserve officials are likely to bring interest rates down so aggressively over the next few months that they will have to search for fresh tactics to continue easing credit. The Fed's Open Market Committee will probably reduce the benchmark federal funds rate by half a point next week to 1 percent, the lowest since May 2004, according to futures trading. The official rate has never been lower since the Fed made it an explicit target in the late 1980s.
FDIC: New foreclosure prevention plan on tap One of the country's top banking regulators said Thursday that the government is working on a plan to do more to help troubled homeowners. Sheila Bair, chairwoman of the Federal Deposit Insurance Corp., told the Senate Banking Committee that her agency and the Treasury Department are working closely to find ways to prevent avoidable foreclosures. The plan would use the Treasury Secretary's new authority under the Emergency Economic Stabilization Act to provide guarantees to mortgage lenders. "Loan guarantees could be used as an incentive for servicers to modify loans," Bair said. "Specifically the government could establish standards for loan modifications and provide guarantees for loans meeting those standards."
Jobless claims increase as labor market weakens Jobless claims increase more than expected as layoffs rise, labor market deteriorates New claims for jobless benefits increased by more than expected last week as companies cut jobs due to the slow economy, the Labor Department said Thursday. The Labor Department said new applications for unemployment benefits rose 15,000 to a seasonally adjusted 478,000, above analysts' estimates of 470,000. Former Federal Reserve Chairman Alan Greenspan said the job market will likely get worse. "Given the financial damage to date, I cannot see how we can avoid a significant rise in layoffs and unemployment," Greenspan told a House committee Thursday.
US working on plan to help homeowners refinance Bank regulator says US working to help besieged homeowners refinance; Greenspan grilled The federal government is working on a loan-guarantee plan that could help many homeowners escape foreclosure, a banking regulator told Congress Thursday. At the same time former Federal Reserve Chairman Alan Greenspan said the financial crisis will get worse before it gets better. Accused of contributing to the meltdown, but denying that it was his fault, Greenspan told a House panel the crisis left him -- an unabashed free-market advocate -- in a "state of shocked disbelief." Federal regulators told Congress they were making steady headway in confronting the worst financial crisis since the 1930s as committees in both the House and the Senate held hearings on a contagious financial collapse that has infected global markets.
Bush invites world leaders to summit The G-8 (even Russia) plus 12 should make for a head-turning summit President Bush today invited leaders of the world's industrial powers to an economic summit in Washington starting on Nov. 15. The president will officially be a lame duck at that point, yet the economic crisis underway will be foremost on the mind of his successor and the world's other leaders. The invitations for a summit on the global economic crisis have gone out to members of the other G-8 nations and 12 more players: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States, and the European Union.
US to host G20 world summit over crisis Global stock markets plunged on Wednesday as the White House said it would invite world leaders to a global financial summit next month, 11 days after the US presidential election. The S&P 500 fell more than 6 per cent to close at its lowest level in five years, while London’s FTSE 100 lost 4.5 per cent and Japanese stocks dropped 6.8 per cent. The stock-market retreat came as prices for oil and gold fell sharply and European currencies slumped against the dollar and yen as traders bet on interest rates being slashed to offset a looming recession.
Bush's Financial Crisis Summit President Bush plans to host a major economic conference with many of Europe's top leaders in order to address the worldwide financial meltdown. Kimberly Dozier reports from the White House.
Bush invites world leaders to Washington for economic summit President George W. Bush has invited the leaders of 20 nations to come to Washington on Nov. 15 for an international summit meeting on the economy, the White House said Wednesday. The meeting could eventually lead to a far-reaching overhaul of the rules governing global financial markets. The meeting, intended to be the first of several global economic meetings, will come less than two weeks after the U.S. presidential election, and its timing underscores the urgency the Bush administration feels in addressing the financial crisis. The White House said that Bush would "welcome input" from the president-elect, although it is unclear if Bush's successor will attend.
Europe Seeks to Implement New Bretton Woods Fiat Currency System Bretton Woods was effectively an exchange rate mechanism, were gold backed the new kid on the world block, namely the post war US dollar and all other currencies floated around the dollar in a fixed range. If a currency moved too far either way of the range then the respective Central Bank stepped in and delivered the appropriate medicine. However the US dollar was pegged to the price of gold which was fixed at an official rate of $35. All went well until one or two countries, well, mainly France decided that they wanted the gold that backed the dollar reserves they had accumulated by repatriating the dollars back to Uncle Sam.
Getting Ready for "The Turn" in the Dollar Over the years, I have written a number of controversial articles, some which were correct, and some which were off base. Like a player that bats .300 in baseball, in the financial markets, if you can correctly see what’s coming next more then half the time, you are doing reasonably well. I start today’s article on this note because I know that right here, right now, this article and this call are bound to be among the most highly controversial and represent one of the more aggressive calls I have made in some time. Yet, looking at the state of the currency markets, it appears as though a truly major turn is dead ahead. Now, I am writing this article from the point of view of a market technician, and I want to state up front that I have no idea "why" the Dollar will weaken, and why the Euro will bounce back. For whatever reason, I would assert that at the moment, an "inflection point" of epic proportions is now directly ahead.
US Dollar Still the Safe-Haven of Choice – More Gains in Store? Despite dismal fundamentals, the US dollar rally continues to dominate as it remains one of the strongest currencies, second only to the Japanese yen. The Federal Reserve is still struggling to stabilize the markets as banks remain worried about counterparty risk and are avoiding lending. As a result, the Fed said they would raise the interest rate paid on bank reserve balances in an attempt to keep liquidity in the financial system without impacting their monetary policy.
Max Keiser - Special Liquidity Schemes, Gold and the Dollar
Commodities Bull Run Ahead Global crisis aside, commodities will roar again, and soon, says Jim Rogers, CEO of Rogers Holdings. "We have had eight or nine periods of forced liquidation over the past 100 to 150 years wherein everything was liquidated without regard to fundamentals. This is such a period," Rogers told the Web site Commodity Online. A slowdown in China and economic malaise in the United States and Europe have hit commodity prices short term, Roger says, but nothing about the basics of supply and demand have changed.
Dow Gold Ratio Hits 80 Year Extremes, Time to Buy? YOU MIGHT LIKE to know, if you put store by such things, that the US stock market just sank to a 14-year low against gold. With the Dow Jones index dipping below 9,000 last week, the price of gold held near $850 an ounce – at least until last Thursday's AM Gold Fix in London. So the Dow/Gold Ratio – which simply divides the one by the other, thus pricing the Dow Jones Industrial Average in ounces of gold – fell to a little above ten, making the 30 stocks of the DJIA cheaper in Gold Bullion terms than at any time since January 1995. Y'know, like the Tech Stock Bubble and Reflation Rally were merely a dream Alan Greenspan had after eating wild mushrooms and blue cheese right before bedtime.
Gold can plunge to $600 soon September 17, 2007. Ten days after the beginning of the Fed rate cuts (and financial market turmoil) that would eventually bring gold to $1033.90 on March 17 of 2008. That's how long ago it was that gold traded at $720 per ounce. We have now come full circle. The metal is currently showing a 20% loss over one month, and 3.5% on the one year timetable. Our long-stated (and much derided) $732 objective has been achieved, of that there is no doubt. The remaining question now emerging is: has gold seen its lows, or are we at the start of a phase in the mid-to-high $600's?
'Comex paper gold can not manipulate gold price' When will Comex paper gold no longer be able to manipulate the price of gold as they did today and most every day for the last many years? Can the Comex paper gold exchange default? . . . . The Comex will no longer be able to manipulate price as Asia recognizes the dangers inherent in financial institutions and are therefore channelling their business into the cash bullion market. The Asian demand in the cash market then will not be of the kind that runs away from paper supply, but rather one that stands still and takes it. Should there be a shortfall of gold in the bullion market, delivery will be taken out of the COMEX warehouse to make cash bullion deliveries.
Bearish Outlook on the Markets A look at why U.S. investors should brace themselves when foreigners come to their senses, with Peter Schiff, Euro Pacific Capital Inc. and CNBC's Rick Santelli
War between paper gold and bullion gold It is axiomatic that the most leveraged gold market most often (95 percent of the time) sets the price of any cash market. First derivatives (listed futures) commands price. This remains true as long as the COMEX warehouse of gold is NOT meaningfully depleted by long gold contracts by taking delivery from the exchange warehouse. As long as an exchange maintains a warehouse that historically overwhelms historical demand for delivery the first derivative, The COMEX listed gold future, will be the primary cause of price.
Gold May Pay Only in Case of Maximum Despair Gold is for rich guys -- buying physical gold, that is. The metal's highest and best investment use is as insurance policy against a currency collapse. For that purpose, you need a lot of it, stored around the world. Owning 20 or 30 coins is nice but won't protect your standard of living in a world where dollars are dust. Gold isn't even a reliable hedge against inflation. It reached $850 an ounce in January 1980, a price not seen again until January 2008. During those intervening 28 years, gold plunged and reared but lost more than half of its purchasing power. For a 1980 investor to break even after inflation, gold would have to reach $2,200.
The bail-out threat to free markets As the global financial crisis deepens, European leaders are making a virtue of big government and state intervention. This is a dangerous path to take. Corporate bail-outs beyond the banking industry may now be an inevitable consequence of decisions to save the banks and, in the US, to lend billions of dollars to, say, the automotive industry. The siren calls should be resisted. Some European Union leaders affect to believe the crisis has ex?posed the failures of US-style free markets and justifies a return to the state’s historically strong role in setting European economic policy. Their response has struck a popular chord. Italy’s Silvio Berlusconi basks in media adoration for his state-sponsored rescue of Alitalia, the collapsing airline, and promises of help for carmakers. Nicolas Sarkozy, France’s president, advocates creating European sovereign wealth funds to save companies that are vulnerable to takeover by non-European predators.
The Myth that Laissez Faire Is Responsible for Our Financial Crisis The news media are in the process of creating a great new historical myth. This is the myth that our present financial crisis is the result of economic freedom and laissez-faire capitalism. . . . . Beyond all this is the further fact that the actual responsibility for our financial crisis lies precisely with massive government intervention, above all the intervention of the Federal Reserve System in attempting to create capital out of thin air, in the belief that the mere creation of money and its being made available in the loan market is a substitute for capital created by producing and saving. This is a policy it has pursued since its founding, but with exceptional vigor since 2001, in its efforts to overcome the collapse of the stock market bubble whose creation it had previously inspired.
Greenspan Urges Tighter Regulation After 'Breakdown' Former Federal Reserve Chairman Alan Greenspan called for tighter regulation of financial companies, distancing himself from the free-market culture that he helped to create. Firms that bundle loans into securities for sale should be required to keep part of those securities, Greenspan said in prepared testimony to the House Committee on Oversight and Government Reform. Other rules should address fraud and settlement of trades, he said. Greenspan's office released the text ahead of the hearing scheduled for 10 a.m. in Washington.
Struggling to keep up as crisis raced on "I feel like Butch Cassidy and the Sundance Kid. Who are these guys that just keep coming?" — Treasury Secretary Henry Paulson Jr. It was the weekend of Sept. 13, and the moment Treasury Secretary Henry M. Paulson Jr. had feared for months was finally upon him: Lehman Brothers was hurtling toward bankruptcy — fast. Knowing that Lehman had billions of dollars in bad investments on its books, Mr. Paulson had long urged Lehman’s chief executive, Richard S. Fuld Jr., to find a solution for his firm’s problems. "He was asked to aggressively look for a buyer," Mr. Paulson recalled in an interview.
Horse is already out of the barn . . . . Senators Seek to Ensure Bank Injections Boost Lending A group of Democratic senators asked the U.S. Treasury Department on Wednesday to set guidelines saying that banks receiving government capital injections should use the funds to restore their lending activities to levels prior to the credit crunch. The senators said in a letter that Treasury officials should also issue guidelines or best practices that specify the type of lending allowed, encourage loan modifications, and provide more oversight of executive compensation. "Although we are supportive of your efforts to restore stability to the financial system through direct capital injections into financial institutions, we are concerned that if the program is not implemented correctly, its effectiveness will be limited," the letter said.
Recession Will Last At Least Two Years: Roubini The US economy is entering a two-year recession that will be longer and deeper than previously feared, said Nouriel Roubini, a well-known economist and professor at New York University. "I believe we're going to have two years of negative economic growth," Roubini said on CNBC. "The last two recessions lasted only eight months each ... This time around this is going to be three times as long, three times as deep. This is going to be the worst recession the US has experienced since the 1980s."
Roubini on The Unfolding Financial Crisis P1
Roubini on The Unfolding Financial Crisis P2
Hedge Funds' Steep Fall Sends Investors Fleeing The gilded age of hedge funds is losing its luster. The funds, pools of fast money that defined the era of Wall Street hyper-wealth, are in the throes of an unprecedented shakeout. Even some industry stars are falling back to earth. This unregulated, at times volatile corner of finance — which is supposed to make money in bull and bear markets — lost $180 billion during the last three months. Investors, particularly wealthy individuals, are heading for the exits.
How hedge funds manipulate markets!
Five Ways to Fix Our Financial Architecture Some urgent reforms need to be made to the architecture of international financial regulation, but talk of a second Bretton Woods conference is misleading. Neither the International Monetary Fund nor the World Bank is a financial regulator in the sense of being a body that sets the rules for and supervises individual institutions. Those important tasks are carried out by less glamorous entities such as the Basel Committee and the International Organization of Securities Commissions. The real issues relate to the way in which these bodies carry out their jobs.
Credit Default Swaps, Part Two: ICE and Other Exchanges My favorite investment in the CDS market to be is the Intercontinental Exchange (ICE). Founded in the year 2000 in Atlanta, the ICE pioneered the market for WTI Crude [West Texas Intermediate Crude]. Most of this commodity is from smaller wells in Texas and Oklahoma. Plus, the ICE recently has benefited from the surge in sugar and coffee prices [and hence traders were buying/selling these contracts to hedge their volatile positions]. Anyway, the ICE has benefited from providing liquidity in the commodity market - and their purchase of the NYBOT was accretive to earnings from an early stage [from the get-go in fact]. Some analysts have recently downgraded the ICE and reduced earnings estimates by a little.
Markets hold breath as $360bn Lehman swaps unwind The $54trillion credit derivatives market faces a delicate test as $360bn worth of contracts on now-defaulted derivatives on Lehman Brothers are due to be settled on Tuesday. Due to the opacity of the market, which is one of the most complex, least regulated and least understood in the global financial system, it is still not clear how many contracts have to be settled or which institutions will take the ultimate hits once the billions of dollars worth of contracts have been unravelled. The collapse of Lehman Brothers, is expected to trigger credit default swap (CDS) protection pay-outs of about $400bn but because the contracts were sold many times through different counterparties it is not yet known who will be liable.
Banks Face More CDO Writedowns A Vicious CDO Circle - Subprime Losses Trigger Writedowns, Banks Fail as a Result, Triggering Losses on Bank Circuit; Synthetic CDOs Trading at Less Than 10 Cents Per Dollar; Lehman as Well as Icelandic Banks Failed; CDOs Paying Claims on Bond Losses
Job Losses Accelerate, Signaling Deeper Distress Employers are moving to aggressively cut jobs and reduce costs in the face of the nation's economic crisis, preparing for what many fear will be a long and painful recession. The labor market has been weak all year, with a slow drip of workers losing their jobs each month. But the deterioration of the job market is now emerging as a driver of economic distress, according to a wide range of data and anecdotal reports from corporate America.
PBGC (Government Pensions) Lost $1.2 Billion in Investments The government agency that insures private-sector pension plans for millions of Americans lost $1.2 billion in the past 11 months to Aug. 31, including a $3.1 billion loss in stock investments. The Pension Benefit Guaranty Corp. incurred the loss even before the stock market's historic tumble last month, according to preliminary unaudited figures released by the House Education and Labor Committee.
Willie Sutton Goes to Harvard "Because that's where the money is." -- Willie Sutton, when asked in 1934 why he robbed banks Washington is having a Willie Sutton Moment. Such moments occur when government, finding its revenue insufficient for its agenda, glimpses some money it does not control but would like to. Sen. Charles Grassley (R-Iowa) and Rep. Peter Welch (D-Vt.) recently convened a discussion of how colleges and universities should be spending their endowments.
The Trouble With a Homeowner Bailout In the government’s ever-morphing efforts to save the financial system, the moment when the nation’s homeowners get rescued seems, finally, to be getting near. John McCain has called for the Treasury Department to spend $300 billion buying up mortgages, and Barack Obama now favors a version of an idea he opposed during the primaries: a 90-day moratorium on foreclosures. Sheila Bair, the head of the agency that guarantees bank deposits, said last week that it was time for the government to shift its focus away from banks and do more to prevent foreclosures.
U.S. spending forecast points to recession In a season with plenty of chilling numbers, try this one: American households have lost something in the order of $7 trillion of wealth this year alone. That ballpark estimate of the damage done to households implies that personal spending will be cut back even more sharply than is already showing up in data. The debit side of personal balance sheets doesn't look so good either; credit is tougher to get and more expensive and banks are increasingly asking for their money back where they can.
For fallen bankers, sorry may be the hardest, and smartest, word No one expects a fallen Master of the Universe to say sorry. But some academics say that an apology - even for all the litigation risk it might entail - can be the basis of revitalized confidence and trust. With global markets paralyzed by the inability to rely on a counterparty, and as trust and accountability form the heart of debates about effective regulation, a slice of humble pie now might help bankers earn trust in the future.
Regional Banks Post Large Loan Losses This blog noted in May, thanks to comments from Chris Whalen of Institutional Risk Analytics, that the well publicized losses at large banks were soon to be followed by significant writedowns at mid and smaller sized banks. Whalen saw the wheels starting to come off in the June-July timeframe, meaning they would show up in third quarter earnings reports
Public-assistance numbers grow in Colorado The foundering economy has homed in on people unaccustomed to food stamps and unpaid bills. The woman fidgeted just outside the office door, wondering aloud if they could fit her in that day, if she should come back later — or if she even should have come in the first place. She had found the Douglas/Elbert Task Force a little before the nonprofit opened on a Monday morning — only to find more than a dozen adults and a handful of small children already occupying the small waiting area. A few more stood outside in the hallway, waiting for help with rent, with utilities, or with clothing and groceries. "It's embarrassing," said the 48-year-old woman, a laid-off real estate office administrator so mortified by her unemployment that she didn't want her name used. "I have a lovely apartment, nice furniture, thousands of dollars in nice business clothes in my closet. "And here I am."
Wall Street facing heavy job losses Wall Street could face tens of thousands more job losses as a result of the banking crisis and see average pay drop by more than a quarter, a report from the New York Federal Reserve suggested on Wednesday. In a comparison with previous financial sector downturns, the report said the current crisis shared characteristics with market problems in the late eighties and early years of this century. Employment in those periods fell 17 per cent and 12 per cent respectively, while in the early 2000s salaries fell 27 per cent.. There were 460,000 jobs in New York finance in September, according to Moody’s economy.com. A contraction of 12-17 per cent would be equivalent to 55,000 - 78,000 lost jobs.
Merck to cut 7,200 jobs U.S. pharmaceutical giant Merck said Wednesday it would trim its workforce by 7,200 positions by the end of 2011. The 12 percent job reduction was part of a cost reduction plan aimed at saving $3.8 billion to $4.2 billion by the end of 2011, the company said.
Goldman Sachs said to cut 10 percent of work force Goldman Sachs Group Inc. is cutting about 10 percent of its work force amid the ongoing downturn in the credit and lending markets, a person briefed on the plan said Thursday. Goldman Sachs will cut about 3,260 jobs. Goldman's work force, which was at record high levels at the end of the third quarter, will be pared back close to 2006 and 2007 levels. No additional cuts are planned, the person said. The job cuts are a direct result of the current economic environment and significantly lower levels of business activity, the person told the Associated Press.
Chrysler cutting 1,825 jobs with moves at 2 plants Chrysler LLC will cut 1,825 jobs by eliminating one shift at a Toledo Jeep plant and accelerating the closure of its sport utility vehicle factory in Newark, Del., because of the slowing global economy and a shift toward smaller vehicles. About 825 workers at the Toledo North Assembly Plant will be laid off indefinitely as of Dec. 31. The Newark closure also will be effective at the end of the year and affect about 1,000 jobs, the company said Thursday in a news release. The cuts are about 6 percent of Chrysler's U.S. hourly work force of 33,000.
A.I.G. to Suspend Millions in Executive Payouts The beleaguered insurer American International Group has agreed to suspend payments to executives from a $600 million bonus fund as well as $19 million in payments to its former chief executive, the New York attorney general announced on Wednesday. The moves are the latest steps in an effort by the attorney general, Andrew M. Cuomo, to prevent bonuses and other compensation to former executives at A.I.G., which in recent weeks has received tens of billions of dollars in loans from the Federal Reserve.
Latinos Account for Half of U.S. Population Growth Since 2000 Since the turn of the century, Hispanics have accounted for more than half (50.5%) of the overall population growth in the United States -- a significant new demographic milestone for the nation's largest minority group. From April 1, 2000, to July 1, 2007, the Hispanic population grew by 10.2 million to 45.5 million, an increase of 29%. During this same period, the much larger non-Hispanic population of the U.S. grew by 10 million, an increase of just 4%. As of mid-2007, Hispanics made up 15.1% of the total U.S. population but accounted for a majority of the nation's total population growth since 2000. During the 1990s, the Hispanic population also expanded rapidly, but over the course of that decade its growth accounted for less than 40% of the rise in the nation's total population.
Lobster prices tank as diners claw back spending Lobster's price collapse boils down to supply glut, as Maine catches tail end of credit crisis The price of Maine lobster, which accounts for 80 percent of the U.S. catch, is tanking. The primary factor, a drop-off in demand by penny-pinching diners, has been in place since summer. But a secondary problem recently surfaced: the global banking crisis left Canadian processors short on credit, trapping Maine lobstermen and dealers with too much supply. While bargains abound for lobster lovers throughout the Northeast, there's growing angst in New England fishing communities. One small village held a lobster bake on the town pier to unload excess lobsters and help out the local fishing fleet.
MGM Mirage shares plunge on ratings cut MGM Mirage shares plunge on Fitch downgrade linked to financing worries for CityCenter resort Shares of casino operator MGM Mirage Inc. plunged nearly 14 percent Wednesday after Fitch Ratings downgraded the company on worries about financing its $9.2 billion CityCenter megaresort. Shares slid $1.97, or 13.7 percent, to $12.44. Earlier in the session, shares hit a 52-week low of $11.76. The stock is down 85 percent so far this year. Fitch cut its rating on the company's issuer default probability, senior notes and senior credit facility to "BB-" from "BB" and trimmed its rating on senior subordinated notes to "B" from "B+". All ratings are considered non-investment or junk grade.
After the House Is Gone MORE than a million homes have been lost to foreclosure in the last two years. And according to data from Mortgage Bankers Association, banks are now in the process of foreclosing on 1.5 million more. The impact of the mortgage crisis has been obvious in both the worldwide credit crunch and the presidential campaign, where there has been a lot of talk about the plight of overextended homeowners. But the specific personal costs of home loss have been less evident, at least to those not paying them.
So you think this is a free country - Free speech suppressed at Biden event On October 21st Joe Biden was inside the Adams City High School in Commerce City, Colorado talking about "the change we need." Outside the event the only change being made is the attempted eradication of free speech. But not for everyone just for those who do not like the corporate control of Washington. You are still free to support corruption and worship chosen political candidates but don’t you dare challenge the status quo.
WeAreChange Colorado Members Harassed by Police Outside Biden Event
OPEC tests prospect of a cut in Russian oil production As oil prices tumble amid fears of a worldwide recession, OPEC has been testing the prospects of Russia joining in production cuts to help support global prices, something the authorities in Moscow have not been willing to do in former downturns. So far, Russia has again been noncommittal in high-level meetings including an unusual visit by OPEC's secretary general, Abdullah al-Badri, to Moscow on Wednesday. Russia is the largest oil producer not in the Organization of Petroleum Exporting Countries.
OPEC Risks Split on Cuts as Economies Reel, Oil Drops OPEC, founded five decades ago to unify oil producers, risks dividing members as the group plans to cut output and raise prices just as developed nations face their worst recession since 1983. Iran's energy minister, Gholamhossein Nozari, said yesterday OPEC may slash output quotas by 2.5 million barrels a day, or 8.7 percent, an amount about equal to what's pumped from Kuwait. The Algerian minister and OPEC president, Chakib Khelil, said two days earlier the reduction at the group's Oct. 24 meeting in Vienna may be only 1 million barrels.
Copper Plunges Below $4,000 for First Time Since November 2005 Copper tumbled below $4,000 a ton for the first time since November 2005 on deepening concern a global economic slump will damp demand for commodities. Australian, New Zealand and Japanese shares dropped on increasing signs the world's economy has slipped into a recession. BHP Billiton Ltd., the world's biggest mining company, lost 11 percent after metal prices plummeted.
Hyundai Motor Profit Tumbles 38% on Strike, Warranty Provisions Hyundai Motor Co., South Korea's largest automaker, reported a 38 percent drop in third-quarter profit because of falling global demand, strikes and the impact of a weaker won on overseas warranty costs.
Owner said to weigh selling Chrysler in pieces Person briefed on talks says Chrysler could be sold in pieces to other companies Chrysler LLC could be sold in pieces to other companies as its majority shareholder Cerberus Capital Management LP seeks to exit the auto business, according to a person briefed on the discussions. Cerberus, the New York-based private equity firm, has been shopping the beleaguered automaker to General Motors Corp., the combined Nissan Motor Co. and Renault SA and other companies.
Marble for Unknowns tomb just sits The chunk of stone ready to be donated by a Glenwood Springs man is stalled again. Retired Glenwood Springs car dealer John Haines' hope of donating a giant chunk of snow -white marble to the federal government to replace the cracked Tomb of the Unknowns at Arlington National Cemetery is stalled again. Haines' hoped-for donation, which has sat outside the Yule Quarry near Marble since it was cut for the tomb in 2003, didn't even rate a mention in a 34-page Department of the Army report to Congress this week on replacement and repair options for the deteriorating tomb.
Rich-poor divide widens, says OECD The gap between rich and poor has widened in most developed countries over the past two decades as economic growth has benefited the wealthy more than the poor, according to the Organisation for Economic Co-operation and Development. Mid-way through this decade, Mexico and Turkey had the highest inequality in incomes, followed by Portugal and the US. Denmark and Sweden were the most equal societies in terms of income disparity in the 30-nation study.
Citic Pacific Tied to Australian Dollar After Losses Citic Pacific Ltd.'s attempt to manage currency risk means the Chinese steelmaker and property developer has four times more money riding on the Australian dollar than it earned last year.
Asian markets fall after opening Wall Street blues spread to Asian-Pacific markets Thursday as Japan's Nikkei index led the sell-off in early trading. The 225-stock Nikkei, which took a big hit the previous day on the Tokyo Stock Exchange, dropped more than 7 percent before paring some of the losses after opening Thursday as investor sentiments were badly shaken by the Dow's 515-point loss on Wall Street. A strengthening yen added to their woes.
U.S. imposes sanctions on Iran's Export Development Bank In yet another action to step up pressure on Iran to discourage it from pursuing a nuclear weapons program, the United States on Wednesday imposed sanctions on the Export Development Bank of Iran. The punitive action reflects Washington's opposition to the bank's involvement in the controversial nuclear activities of Tehran.
Mexico attacks ‘unethical’ derivatives selling Mexico’s central bank chief has accused investment banks of behaving irresponsibly and unethically in marketing derivative products to companies – warning that the problem extended far beyond Mexico. In recent weeks, many of Mexico’s biggest corporate names have admitted billions of dollars of mark-to-market losses through exchange-rate derivatives, sold by banks as a form of insurance against currency movements. Companies in other emerging economies, such as South Korea and Brazil, have also suffered big losses.
Debt Default Looms for Argentina Argentina to Seize $29 Billion of Funds; Argentina Last Defaulted in 2001; President Fernandez Says Argentine Plan Will Help Retirees and Workers
Brazil gives go-ahead to aid Brazil’s government-controlled banks have been given the green light to help prop up financial institutions owed money from companies that have made bad bets on the country’s currency amid growing concerns about the level of exposure. Sadia, a food processor; Votorantim, an industrial conglomerate; and Aracruz, one of the world’s biggest paper and pulp manufacturers, have admitted to heavy losses on currency derivatives after Brazil’s currency, the real, devalued sharply against the US dollar in the past few months after appreciating steadily for almost four years.
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