Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Thurs 02.26.2009
Ron Paul "You Can't Reinflate The Bubble!
Why the U.S. Government Should be Cut Off Like a Subprime Borrower By Peter Schiff With millions of homeowners now struggling to repay money that they clearly never should have borrowed, our leaders have been righteously wagging fingers at predatory lenders who allegedly enticed innocent borrowers, and the country, into a financial snake pit. While the mortgage industry clearly deserves a good share of the blame, unindicted co-conspirators abound. The ringleaders are still at-large and are, in fact, busy hatching a plan that would dwarf their earlier mistakes. Contrary to the message bouncing off the marble walls of the Capitol building, most borrowers in the inflating housing bubble clearly understood the terms of their loans. Most knew that they could not afford their mortgage payments once their teaser rates expired, but enthusiastically jumped into the debt pool anyway, believing that guaranteed real estate appreciation, or a quick and profitable sale, would keep them afloat, or bail them out.
A Second Try at Calming Bank Investors Government Wants New Infusions to Be Regarded as Capital The revised financial aid plan for troubled banks that the Obama administration is launching this week is the government's second attempt to convince investors that it is giving banks the money they need to cover mounting losses and survive the recession. The government has insisted that its investments should be counted as capital, the reserve that banks must maintain against losses. The Bush administration went so far last year as to rewrite the regulatory definition of capital to include the federal aid, which comes in the form of preferred shares.
Gold Most Favored Investment This Year, World Gold Council Says Gold is the most favored investment this year ahead of investment-grade bonds and other assets, according to a survey of investment advisers, the producer-funded World Gold Council said. About 60 percent of the 31 advisers surveyed in Europe expect investors to take fewer risks this year compared with 2008, while about 30 percent expect investors to be less risk averse, the London-based council said today in a report. Almost 60 percent expect better market conditions this year.
Bernanke: Bail out bad borrowers too Federal Reserve Chairman Ben Bernanke said Wednesday that the embattled housing market has crippled the economy, and at-risk homeowners need a bailout - even if they knew they couldn't afford their home in the first place. "Some borrowers presumably knew what they were getting into," Bernanke said before the House Financial Services Committee. "But from a public policy point of view, the large amount of foreclosures are detrimental not just to the borrower and lender but to the broader system." "In many of these situations we have to trade off the moral hazard issue against the greater good," he added. Bernanke's comments come after President Obama unveiled a $75 billion plan Feb. 18 to help up to 9 million borrowers suffering from falling home prices and unaffordable monthly payments. Borrowers with little or no equity will be able to refinance their mortgages at the current market rate, and monthly payments will be reduced for at-risk borrowers.
Plan to Repair U.S. Banking System Unveiled by Former Hedge Fund Manager The economic house of the United States is ready to collapse upon itself, leaving us exposed and defenseless against the next Great Depression. Bureaucratic handymen with a staple gun and a trillion-dollar roll can’t paper over holes in bank balance sheets or fill in the others created by plunging consumer spending. It won’t work. What is needed - and what would arrest the slide in U.S. housing prices - is a renewed general confidence in protective regulations, and tax incentives for investors to buy troubled assets and to make equity investments in banks.
In Geithner We Trust Eludes Treasury as Market Fails to Recover It was 2004 and Tim Geithner, president of the Federal Reserve Bank of New York, had a message for the Federal Open Market Committee in Washington. He told his 18 colleagues gathered around the long mahogany table that a clearinghouse was needed to monitor risks in the burgeoning $5 trillion market for credit-default swaps -- the over-the-counter derivatives that would later spin out of control and help take down Wall Street. In a move that may have foreshadowed his role as President Barack Obama’s Treasury secretary, Geithner over the next two years nudged financial firms to voluntarily clear a backlog of swap trades. They stopped short of creating a clearinghouse to bring more transparency to the market.
U.S. Sets a Six-Month Deadline for New Bank Capital The government set a six-month deadline for the biggest 19 U.S. banks to raise any new capital deemed necessary after a mandatory review of their balance sheets. The regulators will oversee the so-called stress tests by the end of April, which will identify how much extra cushion each bank will need, the Treasury said today in Washington. Lenders will have six months to raise private capital or accept government funds and the conditions that come with it. “While the vast majority of U.S. banking organizations have capital in excess of the amounts required to be considered well capitalized, the uncertain economic environment has eroded confidence in the amount and quality of capital held by some,” the Treasury said, announcing guidelines for new bank reviews.
Obama Showers Wall Street Fees With Muni Stimulus While U.S. President Barack Obama criticized Wall Street bonuses, his stimulus plan offers bankers the opportunity to boost fees with incentives that may lead to $65 billion in municipal bond sales. School districts and local borrowers from Pennsylvania to California have already sold $465 million of tax-exempt bonds since Feb. 17 under revised rules in Obama’s stimulus package, signed last week, according to data compiled by Bloomberg. Municipal Market Advisors, a Concord, Massachusetts-based research firm, estimates the new measures may drive more than $65 billion in new bond sales through 2010. Banks that advise state and local governments and market their debt may collect $314 million in fees as a result of the sales, based on Bloomberg data. Municipal bond offerings, which totaled $392 billion last year, may expand as underwriters urge clients to take advantage of the stimulus tax breaks.
Gov't says 'mass layoffs' soared in January A purist could argue that the word nationalization should only be used to describe situations in which the government owns a company, the government runs the company and the government plans to keep on running the company. That kind of nationalization is wildly unpopular in the United States. So it's no surprise that Obama administration officials have objected so vigorously when their plans to rescue the banking industry are described as a form of nationalization. To understand why others continue to use the word, however, it's helpful to consider each of three components: Ownership, control and long-term intent.
What Is 'Nationalization'? Depends Who You Ask. A purist could argue that the word nationalization should only be used to describe situations in which the government owns a company, the government runs the company and the government plans to keep on running the company. That kind of nationalization is wildly unpopular in the United States. So it's no surprise that Obama administration officials have objected so vigorously when their plans to rescue the banking industry are described as a form of nationalization. To understand why others continue to use the word, however, it's helpful to consider each of three components: Ownership, control and long-term intent.
The Best Argument Against Nationalization We are very much in favor of the US government forcing banks to tell the truth about how little their assets are worth (take the writedowns) and then going to the shareholders and bondholders to fill the capital hole. It is hard to see how the government can do this without actually temporarily seizing such banks. Thus, in cases where it is warranted, we support "nationalization." We are NOT, however, in favor of the government actually running the banks. This would be a disaster. One of the big flaws of the current approach to the crisis, in fact, is that the government is already quasi-managing the banks (see Citi), while insisting that it not actually taking them over. As today's Wall Street Journal illustrates, the current situation at Citi is probably worse than temporary nationalization.
Government Offers Details of Bank Stress Test The Obama administration ordered the nation’s 19 biggest banks on Wednesday to undergo stress tests to check whether they could hold up if the economy deteriorated further. But analysts say the administration’s worst projections, which it describes as unlikely, is not much more dire than what many private forecasters already expect. According to the new Treasury Department guidelines, the banks would have to assume that the economy contracts by 3.3 percent this year and remains almost flat in 2010. They would also have to assume that housing prices fall another 22 percent this year and that unemployment would shoot to 8.9 percent this year and hit 10.3 percent in 2010.
'Oil is good buy at $40. Gold is good buy at $900' Bullion and oil appear in the lineup of power players that Doug Casey thinks investors can count on as the world slips deeper and deeper into what he calls the “Greater Depression.” Despite the raging economic storm and Doug’s doubts that Western civilization’s governments will take the actions needed to quell it, though, the Chairman of Casey Research is nowhere close to calling the game. In fact, he sees silver lining in the clouds of crisis—opportunity—and expresses optimism that technological advances, coupled with capital rebuilding once over-consumption runs its course, will prevail eventually. The Gold Report caught up with the peripatetic author, publisher and professional international investor between polo matches in New Zealand, one of several nation-states he calls home from time to time.
Gold investments to boom in Middle East DUBAI: Amidst dwindling property prices, increasing unemployment and dip in equity trading, there is a glittering line of hope as far as gold investments are concerned in the Middle East nations. Gold investments across the Gulf countries are set for a sharp rise this year. According to the World Gold Council (WGC), several Middle East nations including the City of Gold, Dubai, are going to be action centers for gold investments. “We feel Middle East nations are going to witness lots of investments in gold sectors. Several global companies including gold mining processing and production companies are looking at Middle East for major investments,” says Lama Al Saheb, head of marketing WGC head of marketing in Middle East.
Home Sales and Prices Continue to Plummet Sales of previously owned homes fell 5.3 percent in January from December, an industry group reported Wednesday. The National Association of Realtors reported that existing-home sales, fell to an annual rate of 4.49 million in January, the slowest rate in more than a decade. Sales were down 8.6 percent from January 2008. The median home price fell to $170,300, its lowest point since March 2003. The median price in January was down 26 percent from its peak of $230,100 in July 2006.
Ben Bernanke and the Unabridged "May Happen" List for 2009 Satire From Lillpop Fed Chairman Ben Bernanke made instant headline news by telling Congress that America’s gut-wrenching recession MAY end in 2009… His words brought immediate relief to Wall Street investors and others worried about America’s dire economic circumstances, including President Obama who is not sure whether it is better to tell the American people that it will take many years to heal the mess, or to promise a miraculous halving of the deficit by the end of his first term. While the “Bernanke Bounce” was a welcome change of pace after six consecutive sessions of dreadful news, the Fed Chair made a number of other forecasts which he believes are just about as likely as an economic recovery in 2009.
Waiting for Inflation? It May Take Awhile Talk of the inevitable incoming inflationary spike has increased as gold broke through $1000 an ounce, Chairman Bernanke discussed the Fed retracting liquidity and money supply surged. Of course this chatter has spilled into the bond market and is one of the legs of the “short the bond bubble” theme. However, a close inspection of the mechanics of inflation suggest that it may be a long time before we have to worry about rising prices.
Tax Suspicions Grow on Swiss Accounts Federal authorities suspect the scandal over Americans’ secret offshore accounts at UBS, the big Swiss bank, runs far deeper than they believed only a week ago. While UBS admitted last week that it had failed to properly withhold American taxes on 17,000 accounts held by affluent Americans, the authorities are now investigating how the bank and its intermediaries handled taxes for an additional 35,000 accounts, according to two people briefed on the investigation. At issue is whether UBS withheld taxes, as required by American law, and, if so, where the money went, these people said. If UBS failed to collect taxes on all 35,000 accounts, the bank could owe the Treasury Department as much as $800 million in taxes, interest, fines and penalties, according to a tax lawyer briefed on the investigation, who spoke on the condition he not be named because he is representing UBS clients.
Peter Schiff "Obama should fire his economists and ask Ron Paul what to do!"
Stocks drop as Obama speech and housing data weigh Stocks fell on Wednesday as investors found little new in a major speech by President Barack Obama on how he planned to stabilize the economy, while gloomy home sales data weighed on the market. Long-standing worries about recession and the fate of the banking sector persisted despite Obama's speech to Congress on Tuesday night, sending shares of financial services companies, big manufacturers and energy companies lower. "The market was up 4 percent yesterday and I think that was probably a little excessive given the economic backdrop," said Michael James, senior trader at regional investment bank Wedbush Morgan in Los Angeles. "There was a little bit of an overshoot to the upside yesterday and we're just giving some of that back early as President Obama didn't have anything substantive to say last night."
Obama urges quick action on Wall Street reform President Barack Obama called on Wednesday for a sweeping overhaul of Wall Street regulations, saying big changes were needed to avoid a repeat of the financial meltdown. Obama convened a high-level White House meeting on the issue that included Democratic and Republican lawmakers who said they would work with the administration to craft legislation in the next few weeks. Obama, a Democrat, said "painful experience" showed the rules needed to be modernized. The economy cannot sustain "21st century markets with 20th century regulations," Obama told reporters after the meeting with lawmakers.
Obama’s Cap on Carbon Pollution Is A Huge Tax Increase, Republican Lawmaker Says In his speech to Congress Tuesday night, President Barack Obama “committed himself to the largest annual tax increase in the history of America,” warns a Republican congressman. The implementation of a cap-and-trade system, something Obama favors, would raise $300- to $330-billion a year, said Sen. Jim Inhofe (R-Okla.). “As bad as the stimulus spending bill was, this would be much worse because instead of being one-time spending, the cap-and-trade tax increase would keep occurring year after year,” Inhofe said.
Higher Taxes, Fewer Govt. Services Coming Despite Obama's Pledge In his first address to a joint session of Congress last night, President Obama called for expensive and broad efforts in three major areas -- energy, health care and education. He also suggested government bailouts are far from over. In short, Obama outlined a broad, ambitious overhaul of domestic policy after eight years under President George W. Bush. Will the blueprint work? Our guest Joe Brusuelas, director of market economics for Moody's Economy.com, so far likes what he has heard, saying now is the time for decisive leadership on spending issues. And that's a compliment coming from Brusuelas, who publicly had supported Senator John McCain.
The next big financial meltdown? The mortgage and credit sickness that brought banks and brokers to their knees has now infected the companies that insure our lives and protect our families. The life insurance companies that millions of Americans entrust to help protect their families or pay the bills in their golden years are caught in a downward spiral eerily similar to the one that has brought down banks and brokers. Like Bear Stearns and Lehman Bros., life insurers Hartford Financial Services, Principal Financial Group, Lincoln National and many others all have significant exposure to mortgage-backed securities and other risky debt instruments. They're reporting huge losses that -- if they continued -- could trigger a meltdown.
Obama's words on home aid ring hollow President Barack Obama knows Americans are unhappy that their taxes will be used to rescue people who bought mansions beyond their means. But his assurance Tuesday night that only the deserving will get help rang hollow. Even officials in his administration, many supporters of the plan in Congress and the Federal Reserve chairman expect some of that money will go to people who used lousy judgment. The president skipped over several complex economic circumstances in his speech to Congress — and may have started an international debate among trivia lovers and auto buffs over what country invented the car. A look at some of his assertions:
Obama Seeks $634B over 10 Years for Health Care President Barack Obama's first budget will seek $634 billion over 10 years as a down payment on health care reform, a senior administration official said Wednesday. The official said Obama's proposal is meant to start a dialogue with Congress over how to provide coverage for an estimated 48 million uninsured while also slowing health care costs, which amount to $2.4 trillion a year and keep rising even as the economy is shrinking. The senior official spoke on condition of anonymity because the budget won't be released until Thursday. Obama's request comes on top of recent health care expansions approved by Congress and also described by his administration as down payments toward overhauling the health care system. Those include $32 billion to expand coverage for the children of low-income workers and $19 billion to speed the adoption of computerized health records.
This is a MUST-SEE Video . . . Testimony of illegal alien care from 1 Florida hospital
Obama Chooses Locke to Run Commerce Department President Barack Obama on Wednesday announced he has chosen former Washington Gov. Gary Locke as his nominee for Commerce secretary, trying a third time to fill a key Cabinet post for a country in recession. "I'm sure it's not lost on anyone that we've tried this a couple of times. But I'm a big believer in keeping at something until you get it right. And Gary is the right man for this job," Obama said, standing with the fellow Democrat in the Indian Treaty Room at the Eisenhower Executive Office Building near the White House.
A Contrived Crisis? You Decide Through a series of supposedly random but arguably deliberate chain of events, America is poised to jettison 220 years of a free market system called capitalism, in favor of the tried and failed system of socialism. Myself and others are now starting to question how we reached this point… Last summer, as McCain and Obama were in the midst of their campaigns to capture the presidency, a series of events dramatically changed the focus of the campaign from Iraq to the economy. From that point on, Obama took the lead and eventually won the presidency.
Citi customers angry about reported gov't plans Citigroup customers disgruntled as government considers taking a larger stake in the company The sight of a Citibank logo makes Rumi Turkel cringe. She's seen her banking fees climb, and found out Tuesday that interest rates on her savings accounts have fallen again. That's not to mention the substantial amount of money she says her family has lost from owning stock in the bank's parent company, Citigroup Inc. Like other Citi customers interviewed by The Associated Press on Tuesday, she is infuriated that the company has reportedly approached regulators about expanding government ownership of the bank, which has already received $45 billion in bailout money and guarantees to cover losses on hundreds of billions of dollars in risky investments.
Home sales sink unexpectedly, lowest since 1997 Home sales sink unexpectedly in Jan. to lowest level since 1997; rebound hinges on jobs, banks Sales of existing homes sank unexpectedly last month to the lowest level in nearly 12 years as potential buyers worried about their jobs and awaited details of President Barack Obama's plans to stabilize the housing market. But the banking industry's teetering fortunes and mounting job losses could stall any recovery. Falling prices and low mortgage rates don't make much of a difference for people who are out of work -- or fearful of losing their jobs. The most optimistic outlook is for a spring revival as home prices plummet. Government officials, hoping to spur demand, on Wednesday rolled out the details of a new $8,000 tax credit for first-time buyers. About 40 percent of all home sales last year were from first-time buyers.
Gov't says 'mass layoffs' soared in January 'Mass layoffs' increased sharply last month as companies cut costs amid worsening recession Employers took a large ax to their payrolls in January, the government said Wednesday, and the cuts are likely to get worse over the next few months. The Labor Department reported that mass layoffs, or job cuts of 50 or more by a single employer, increased to 2,227 in January, up almost 50 percent from the same month last year. More than 235,000 workers were fired as a result of last month's cuts. January was a bad month for the labor market. Companies from a wide range of sectors announced thousands of layoffs, including Home Depot Inc., Boeing Co., Pfizer Inc. and Caterpillar Inc.
U.S. consumer confidence plunges to record low in February U.S. consumer confidence plunged to another record low in February with expectations that already dire economic conditions will continue to weaken and the jobs market will further deteriorate. The Conference Board, an industry group, said on Tuesday that its sentiment index fell to 25.0 from a downwardly revised 37.4 in January. The median forecast of economists polled by Reuters was for a reading of 35.5. The February reading was a new all time low for the index, which began in 1967. "All in all, not only do consumers feel overall economic conditions have grown more dire, but just as disconcerting, they anticipate no improvement in conditions over the next six months," said Lynn Franco, director of The Conference Board Research Center.
Defaults by Franchisees Soar as the Recession Deepens List of Small Business Administration-Backed Bad Loans at 500 Brands Increased 52% in Most Recent Fiscal Year The recession is bruising businesses across the franchising industry. From ice-cream parlors to tanning salons, franchisees' defaults on loans guaranteed by the U.S. Small Business Administration are piling up in amounts unseen in years. A list of loans at 500 franchises shows the number of defaults by franchisees increased 52% in the fiscal year ended Sept. 30, 2008, from fiscal 2007. Loan losses totaled $93.3 million, a 167% jump from $35 million just 12 months earlier. The figures, a stark barometer of the downturn's severity and scope, could give pause to banks that have loan money about where to lend next. Banks that make SBA-guaranteed loans say they use the annual list as guidance in assessing future commitments.
U.S. is a vast arms bazaar for Mexican cartels PHOENIX: The Mexican agents who moved in on a safe house full of drug dealers last May were not prepared for the fire power that greeted them. When the shooting was over, eight agents were dead. Among the guns the police recovered was an assault rifle traced back across the border to a dingy gun store here called X-Caliber Guns. Now, the owner, George Iknadosian, will go on trial on charges he sold hundreds of weapons, mostly AK-47 rifles, to smugglers, knowing they would send them to a drug cartel in the western state of Sinaloa. The guns helped fuel the gang warfare in which more than 6,000 Mexicans died last year.
America -- They Are Laying the Groundwork to Change the U.S. Constitution! WAKE UP AMERICA! Socialist Democrats are in the process of hijacking your country right from under you. These brazen people aren’t doing it in baby steps either. They are making bold moves every day. Their proposals may seem benign to you, however, if you open your eyes, you will see that these people are “An Enemy Of America.” Why do I say this? First, we have a socialist President, along with his confederates in the Congress and United States Senate who tried to sneak Universal Health Care into his so-called stimulus bill. Oh, Universal Health Care, at least the start of this socialist program is in Hussein’s package, but he was hoping that no one caught it.
Tea Party revolution brewing The kettle's whistling. Tea Parties are popping up all over the country. People are flocking to these sites which have cropped up practically overnight in search of information about rallies, demonstrations and Tea Parties in their cities. The revolution is brewing! "Somebody in our government needs to finally pay attention. It is what I've been talking about that was coming for a very long time and that is disenfranchisement which will turn into anger and then turn into God knows what," Glenn Beck said Friday on his radio program about CNBC'S Rick Santelli's passionate comments made Thursday from the floor of the Chicago Mercantile Exchange.
Oklahoma House passes sovereignty bill Path set for other states seeking to reassert constitutional rights Oklahoma's House of Representatives is the first legislative body to pass a state sovereignty resolution this year under the terms of the Tenth Amendment. The Oklahoma House of Representatives passed House Joint Resolution 1003 Feb. 18 by a wide margin, 83 to 13, resolving, "That the State of Oklahoma hereby claims sovereignty under the Tenth Amendment to the Constitution of the United States over all powers not otherwise enumerated and granted to the federal government by the Constitution of the United States." The language of HJR 1003 further serves notice to the federal government "to cease and desist, effectively immediately, mandates that are beyond the scope of these constitutionally delegated powers."
European Creationists Take On Darwin By Jens Lubbadeh The US isn't the only place with heated debates about Darwin's theory of evolution: Europe has its own hardcore creationists and intelligent design backers, too. Increasingly, they are making their voices heard. He hesitated because he knew full well that his findings would have dramatic consequences on established notions of the world. For 20 years, Charles Darwin kept his revolutionary ideas about evolution to himself. "It's like confessing to a murder," he wrote to a friend. His anxiety was justified -- because it was no less than God himself who would fall victim to his theory of evolution. And so Darwin, a former student of theology who was married to a deeply devout woman, put off publishing his groundbreaking work "On the Origin of Species." In the end, he only published it when he did because he was forced to. Otherwise, Alfred Russel Wallace -- who had proposed his own theory of natural selection -- would have beat him to it.
'If One Major Bank Collapsed, Others Would Fall Like Dominoes' German regional bank HSH Nordbank has been saved from collapse through a bailout by the states of Schleswig-Holstein and Hamburg. Observers warn, though, that the states may be entering into an unknown risk they are ill-equipped to handle. Schleswig-Holstein Governor Peter Harry Carstensen and Hamburg Mayor Ole von Beust looked relaxed and confident Tuesday when they announced their states' joint rescue package for the troubled regional lender HSH Nordbank. But many observers are asking if the duo really knew what they were getting into.
Obama to Seek $75.5 Billion More for Wars in 2009 President Barack Obama will seek $75.5 billion more for combat operations in Iraq and Afghanistan through the end of this fiscal year, according to three people familiar with the request. It will be submitted along with the fiscal 2010 budget Obama sends to Congress tomorrow. That proposal will request $130 billion for the wars in fiscal 2010 in addition to a total Defense Department budget of about $534 billion, the people said. The amounts for the wars are less than Defense Secretary Robert Gates asked for and in keeping with expectations that the president plans a major reduction of the 142,000 U.S. troops now in Iraq.
And you think they don't HATE Americans and the USA?? Kuwaiti Professor Fantasizes about a Biological Attack at the White House and Prays for the Bombing of a Nuclear Plant on Lake Michigan
Kuwaiti prof: 330,000 dead from 4 pounds of anthrax Outlines potential White House attack that would make 9/11 'small change' A professor from Kuwait, the country liberated from Saddam Hussein's attack squads by the United States in the first Gulf War, has outlined on Arab television a potential terror attack that would involve smuggling anthrax from Mexico into the U.S. and killing 330,000 people in 60 minutes. The plan was described by Abdallah Al-Nafisi in a speech that aired on Al-Jazeera television Feb. 2, according to MEMRI, the Middle East Media Research Institute, an independent nonprofit that provides translations and analysis of media reports.
Fox News Strategy Room w/ Judge Napolitano, Ron Paul, Glenn Beck 02/25/2009 Part 1
Fox News Strategy Room w/ Judge Napolitano, Ron Paul, Glenn Beck 02/25/2009 Part 2
Fox News Strategy Room w/ Judge Napolitano, Ron Paul, Glenn Beck 02/25/2009 Part 3
Fox News Strategy Room w/ Judge Napolitano, Ron Paul, Peter Schiff, Glenn Beck 02/25/2009 Part 4
Fox News Strategy Room w/ Judge Napolitano, Ron Paul, Glenn Beck 02/25/2009 Part 5 Ron Paul anticipates they will destroy the dollar . . .
Fox News Strategy Room w/ Judge Napolitano, Ron Paul, Glenn Beck 02/25/2009 Part 6
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