Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Thurs 03.26.2009
A Letter From Inside AIG: "The Entire US System Is Committing Suicide" Dear Family, Friends and Colleagues, As most of you know I work at AIG, specifically in the division known as Financial Products which is often cited as the "root of the problem" at AIG. It seems to me that given the media circus, political hypocrisy and witch-hunting going on in the US right now, I should try to set a few facts out and make a few points that, while they are appearing in the press, are being drowned out in the populist frenzy. First of all, what happened at AIG? AIG has been destroyed by a systemic failure of management that started when Hank Greenberg was booted out. I have facts that prove that had Greenberg not been removed, AIG would be in fine form today, but he does need to accept the blame for the weak overall structure of the place. Now what I mean by systemic failure is this:
Administration unveils financial system overhaul Administration proposes financial system overhaul, will impose tougher rules on big players Obama administration on Thursday unveiled a sweeping overhaul of the financial system designed to impose greater regulation on major players like hedge funds. Treasury Secretary Timothy Geithner told lawmakers that the changes are needed to fix the flaws exposed by the current financial crisis, the worst to hit the country in seven decades. The goal is to repair a system that has proven "too unstable and fragile," he said
Gold hits record against euro on fear of Zimbabwean-style response to bank crisisGold has surged to an all-time high against the euro, sterling, and a string of Asian currencies on mounting concerns that global authorities are embarking on a "Zimbabwe-style" debasement of the international monetary system. "This gold rally is driven by safe-haven fears and has a very different feel from the bull market we've had for the last eight years," said John Reade, chief metals strategist at UBS. "Investors are seeing articles in the press saying governments should deliberately stoke inflation, and they are reacting to it." Gold jumped to multiple records on Tuesday, triggered by fears that East Europe's banking crisis could set off debt defaults and lead to contagion within the eurozone. It touched €762 an ounce against the euro, £675 against sterling, and 47,783 against India's rupee.
US backing for world currency stuns markets US Treasury Secretary Tim Geithner shocked global markets by revealing that Washington is "quite open" to Chinese proposals for the gradual development of a global reserve currency run by the International Monetary Fund. The dollar plunged instantly against the euro, yen, and sterling as the comments flashed across trading screens. David Bloom, currency chief at HSBC, said the apparent policy shift amounts to an earthquake in geo-finance. "The mere fact that the US Treasury Secretary is even entertaining thoughts that the dollar may cease being the anchor of the global monetary system has caused consternation," he said. Mr Geithner later qualified his remarks, insisting that the dollar would remain the "world's dominant reserve currency ... for a long period of time" but the seeds of doubt have been sown. The markets appear baffled by the confused statements emanating from Washington. President Barack Obama told a new conference hours earlier that there was no threat to the reserve status of the dollar.
Tim Geitner Lies : Flip Flops On New World Currency
Geithner gaffe roils markets 'Open' view to world currency recanted An unguarded comment by Treasury Secretary Timothy F. Geithner on Wednesday set off a sudden drop in the dollar and contributed to a chain of market-rocking events that included a setback in the stock market and a sharp uptick in interest rates. Mr. Geithner appeared to lend his support to a proposal by China's central bank governor to replace the dollar as the world's reserve currency with a basket of currencies that would be managed by the International Monetary Fund. In an appearance before the Council on Foreign Relations in New York on Wednesday morning, Mr. Geithner raised eyebrows by saying that "we're actually quite open to that," only a day after both he and President Obama had vehemently rejected the idea and affirmed their strong support for the U.S. currency.
Ron Paul On Fox Business News 03/25/09 Part 1
Ron Paul On Fox Business News 03/25/09 Part 2
Geithner Clarifies His Remarks After Dollar Tumbles Treasury Secretary Timothy F. Geithner on Wednesday said that the dollar would remain the world's dominant reserve currency for some time to come, clarifying earlier remarks that sent the dollar tumbling. "The dollar remains the world's dominant reserve currency," Mr. Geithner said after a speech in Midtown Manhattan to the Council on Foreign Relations. "I think that's likely to continue for a long period of time. Mr. Geithner's comments came in response to a question regarding a proposal by Zhou Xiaochuan, the governor of the People's Bank of China, that suggested a possible replacement for the dollar as a global reserve currency. The proposal called on the International Monetary Fund to increase the use of "Special Drawing Rights" - a basket of currencies made up of the euro, yen, pound and dollar that has served as a reserve asset.
China not fooling in call for review of dollar's status China's calls for a new international reserve currency to replace the U.S. dollar are more than mere bluster and could likely lead the debate over the future of the global foreign-exchange system, analysts say. "By proposing such a sweeping reform, China is demonstrating its growing influence in reshaping the global monetary system, and is now on offensive in the debate of who is responsible for the global imbalances," Deutsche Bank's chief economist for Greater China Jun Ma said in a note to clients Wednesday. The comments by People's Bank of China Gov. Zhou Xiaochuan are setting a framework for talks on how to resolve the huge trade imbalances between China and the U.S., analysts said. In the past, China has been blamed for its large trade surplus by officials in the U.S. and elsewhere, who see the yuan as undervalued.
China wants influence and has money to buy it This is the year when once-rich countries realised they needed China's money. But it will extract a high price. It will change the character of the International Monetary Fund, and other old institutions - if it agrees to help them out at all. Gordon Brown has made much of wanting to rebuild the IMF at next week's G20 meeting. It won't be a quick conversation. China, India, Russia and Brazil want more voting rights over how the IMF spends its money, to reflect their rising share of the world's economy. How much will they put in? There is a danger in expecting much. From China's point of view, it may win more influence by investing directly in troubled countries, rather than in one of the creaking institutions built after the Second World War.
China 'Super Currency' Call May Signal Dollar Concern China's call for the creation of a new international reserve currency may signal its concern at the dollar's weakness and ambitions for a leadership role at next week's Group of 20 summit, economists said. Central bank Governor Zhou Xiaochuan this week urged the International Monetary Fund to expand the use of so-called Special Drawing Rights and move toward a "super-sovereign reserve currency." The dollar weakened after the Federal Reserve said that it would buy Treasuries and the U.S. government outlined plans to buy illiquid bank assets.
U.S. Vows To Sustain Dollar's Dominance Geithner Defends Currency's Role Treasury Secretary Timothy F. Geithner said Wednesday that the United States would do whatever it takes to make sure the dollar would remain the world's dominant reserve currency, clarifying comments he had made earlier in the day that had caused the greenback to fall against major currencies. "I think the dollar remains the world's dominant reserve currency," Geithner said during a question-and-answer session at the Council on Foreign Relations here. "I think that's likely to continue for a long period of time. And as a country, we will do what's necessary to make sure we're sustaining confidence in our financial markets, and in the productive capacity of this economy and in our long-term fundamentals."
Taxpayers Will Get Hosed By The Collapse Of AIG's Insurance Business AIG was once an ultra-reputable insurance company. But its fantastic losses have now more or less ruined the company and the brand. Already there are rumors that AIG's insurance customers are fleeing. And now CEI's insurance expert says AIG may be the next Enron.
What's Missing from Geithner's Plan? Public Participation Earlier this week, Timothy Geithner unveiled his plan to rehabilitate the banking system. The program, in summary, is more than forty pages in length and contains proposal to deal with both bad loans and toxic mortgage backed securities. It addresses many of the concerns that have been voiced about further government intervention but is still lacking on a few key points. One of tenets of Geithner's proposal is the investment of private equity (alongside equal government equity) with leverage provided by an FDIC-backed program. While we applaud Mr. Geithner for what appears to be a reasonable attempt to ensure the rationale pricing of assets, as the government will not be responsible for pricing them, and reasonably sharing of any upside, as the government will participate equally in the equity, we can't help but point out two major issues with the program.
Jim Lacamp (Canada) on U.S. solvency crisis
Geithner to Seek Power Over Large U.S. Hedge Funds, Derivatives Treasury Secretary Timothy Geithner will ask Congress to bring large hedge funds, private- equity firms and derivatives markets under federal supervision for the first time as part of a revamp of U.S. financial rules. The Treasury chief will present his proposed framework at a House Financial Services Committee hearing in Washington tomorrow. Under the new so-called rules of the road, the government would get powers to seize and wind down any financial company big enough to destabilize the banking system.
A Growing Chorus on the Hill Questions the Fed's Decisions Lawmakers Could Delay Expansion of Bank's Powers The Federal Reserve, which for the past year has drawn mostly praise from Congress for its aggressive response to the financial crisis, is increasingly on the hot seat. In recent weeks, members of Congress have criticized the central bank -- publicly and vociferously -- for failing to stop the payment of bonuses at American International Group, for not disclosing the names of companies that benefit from its massive lending programs and for acting without lawmakers' explicit approval in deploying vast sums of taxpayer dollars. While the attacks are loudest from junior members of Congress, even some senior legislators are expressing growing wariness over how much power the Fed has amassed in its bid to contain the financial crisis. That has put an institution whose leaders traditionally keep their distance from politics on the defensive.
Extensive regulatory overhaul planned Obama admin. proposing regulation overhaul in areas blamed for financial crisis The Obama administration is proposing an extensive overhaul of financial regulations to increase oversight of such exotic instruments as credit default swaps that have been blamed for contributing to the worst financial crisis to hit the country in seven decades. Officials said Wednesday that the administration will seek to regulate the market for credit default swaps and other types of derivatives and require hedge funds to register with the Securities and Exchange Commission.
When Bernanke Says All Is Well, It's Time to Duck and Cover "We've averted" the risk of a depression, Federal Reserve Chairman Ben Bernanke said this week. "Now the problem is to get the thing working properly again." Appearing on CBS network's 60 Minutes, Bernanke told correspondent Scott Pelley that concerted efforts by the government likely averted a depression similar to the 1930s. He also stated the nation's largest banks are solvent and that he doesn't expect any of them to fail; and that the U.S. recession will come to an end "probably this year." Is this finally the light at the end of the tunnel for the U.S. economy? We don't want to appear as perpetual gloom-and-doomers, but fact is, when Bernanke tries to predict the future, he's usually wrong.
Ron Paul: "I see no Purpose for the Federal Reserve..." 03-17-09
Ron Paul's HR 1207 Update Ron Paul gives an update on HR 1207, the Federal Reserve Transparency Act, which would thoroughly audit the Federal Reserve System.
Economy warrants bold policy moves Inflation fears 'overdone,' with greater risks of disinflation, deflation Federal Reserve Bank of San Francisco President Janet Yellen on Wednesday said the central bank would use all available tools to combat the recession, while expressing doubts an economic recovery would begin before 2010. "I share the guarded optimism of most professional forecasters that the economy may begin to grow again within the next several quarters. But I must admit that I see considerable downside risk, and my confidence in this outlook is greatly diminished by the nearly unprecedented set of circumstances we face," Yellen told the Forecasters Club of New York. Yellen also downplayed worries that the Fed's moves to stem the recession would spark inflation, saying deflation continues to be her greater worry.
Who foots the bill? Who is going to pay? Most of the world's major economies are trying to spend their way out of the sudden collapse in financial activity using borrowed money. While contentious, there are ample defences for this policy. But working out who pays is a harder question, which will be aired when the G20 heads of state meet in London next week. The air is thick with verbal barbs - from the Chinese central bank's interest in a new reserve currency, to the Czech prime minister's anger with the US deficit. Wednesday showed that the market is listening.
Commercial Real Estate Collapse Picking Up Steam Even if banks were being completely honest about their marks -- which we know they're not -- the accelerating collapse of the commercial real estate market would mean billions more in writedowns. WSJ: The delinquency rate on about $700 billion in securitized loans backed by office buildings, hotels, stores and other investment property has more than doubled since September to 1.8% this month, according to data provided to The Wall Street Journal by Deutsche Bank AG. While that's low compared with the home-mortgage delinquency rate, it's just short of the highest rate during the last downturn early this decade.
Gordon Brown brings Britain to the edge of bankruptcy Iain Martin says the Prime Minister hasn't 'saved the world' and now faces disgrace in the history books They don't know what they're doing, do they? With every step taken by the Government as it tries frantically to prop up the British banking system, this central truth becomes ever more obvious. Yesterday marked a new low for all involved, even by the standards of this crisis. Britons woke to news of the enormity of the fresh horrors in store. Despite all the sophistry and outdated boom-era terminology from experts, I think a far greater number of people than is imagined grasp at root what is happening here. The country stands on the precipice. We are at risk of utter humiliation, of London becoming a Reykjavik on Thames and Britain going under. Thanks to the arrogance, hubristic strutting and serial incompetence of the Government and a group of bankers, the possibility of national bankruptcy is not unrealistic.
Don't miss this one from across the pond! Daniel Hannan MEP: The devalued Prime Minister of a devalued Government
E.U. President Calls U.S. Stimulus the 'Way to Hell' BRUSSELS - Transatlantic tension over the handling of the global economic crisis intensified Wednesday when the prime minister of the Czech Republic, which holds the European Union presidency, described the President Obama's stimulus measures as the "way to hell." Addressing the European Parliament in Strasbourg, France, Prime Minister Mirek Topolanek argued that the Obama administration's fiscal package and financial bailout "will undermine the stability of the global financial market." Mr. Topolanek's comments, only a day after he offered his government's resignation following a no confidence vote, took European officials by surprise. The rotating European Union presidency lasts for six months and the country that holds it is supposed to speak on behalf of the entire 27-nation bloc.
IMF rescues Romania with €20bn aid while Serbia handed €4bn Romania has joined the long list of countries in Eastern Europe to tap emergency aid from the International Monetary Fund (IMF), securing a €20bn (£18.7bn) package to help cover an avalanche of foreign debts due this year. The IMF-led rescue includes €5bn from the European Union's bail-out fund as well as project aid from the World Bank and the European Bank for Reconstruction and Development. Romania is the seventh country in the region to need IMF help along with Hungary, Ukraine, Latvia, and Belarus. Serbia on Wednesday secured a €4bn bail-out and Bosnia said it was starting rescue talks. The latest trio of supplicants come as the IMF introduces a new lending system aimed at giving countries longer to sort out problems and avoid the wrenching - and often self-defeating - adjustments forced on East Asia's tigers in 1997 and 1998. The Romania package aims to smooth the downturn as the economy struggles with collapsing steel prices and a fall in demand for car exports. The Fund said the country faced a "financing gap" as foreign loans come due in a hostile global market.
G20 summit: London prepares for lockdown The G20 conference will lead to a London "lockdown" next week, with parks, roads and businesses closed to keep world leaders safe, Government officials are warning. Protesters with armed with buckets and spades are among several thousand people who are planning to bring chaos to the heart of central London. Last night it emerged that City workers were being advised to "dress down" next week to avoid drawing attention to themselves. More than 1,000 officials and diplomats are expected in the capital, including the leaders of the International Monetary Fund and the World Bank, for the G20 London Summit Senior Whitehall sources warned yesterday to expect "widespread disruption" with parks and roads likely to be closed for most of the week.
G20 to be most expensive police operation in British history The most expensive police operation in British history has been launched to secure the G20 summit in London, The Daily Telegraph can disclose, at an estimated cost of up to £8 million. Three police forces are combining under Scotland Yard's command to protect world leaders at the summit and cope with thousands of demonstrators who will attempt to paralyse central London. A "huge" security operation is already underway in preparation for the three-day gathering of heads of state, including US President Barack Obama, and security has been stepped up amid fears that violent protesters will find out where they are staying.
Czech Republic joins East Europe's falling dominoes The economic crisis sweeping Central and Eastern Europe has claimed a third victim in a month after the Czech government lost a vote of no confidence on Tuesday night in a drama that risks setting off a fresh round of investor flight from the region Latvia's government fell last month following violent street protests. Hungary's premier Ferenc Gyurcsany resigned last week after struggling to impose austerity measures required under the terms of a $25bn (£17bn) bail-out from the International Monetary Fund. But the Czech crisis has unnerved investors even more because the country has been seen as a rock of stability. It kept a tight rein on credit and avoided the stampede into euro and Swiss franc mortgages that occurred in other parts of Eastern Europe. The fate of premier Mirek Topolanek - toppled in the middle of the Czech Republic's EU presidency - shows how fast the crisis is moving from finance into the core economy. Czech industrial output fell 23pc in January as car plants moth-balled production lines.
Geithner to lay out new risk, consumer rules Geithner details plan for 'too big to fail' companies Treasury Secretary Timothy Geithner on Wednesday said he will soon outline proposals for new, tougher requirements on major financial firms to protect the financial system and new rules to prevent financial fraud and abuse against consumers and investors. Geithner, speaking to the Council on Foreign Relations in New York, said he would on Thursday unveil a framework for dealing with the kind of systemic risk that bailed-out insurer American International Group posed.
Yes, Geithner Still Believes In The Dollar CNBC just debunked this, but in case there was any doubt, Tim Geithner is still a strong believer in the dollar. Apparently there was a wire report referring to a Q&A he was giving at the Council on Foreign Relations, and was asked about a Chinese economist's call for expanded use of the IMF's Special Drawing Rights, perhaps as an alternative to the Dollar. . . . . . . . .Geithner follows up by saying that the future of the dollar in the international system is really a function of long-range U.S. fiscal policies. Wants to keep U.S. debt-to-GDP ratio stable, and asserts that there is now a consensus in Washington about fiscal rectitude. This is juuuust a little strange to hear given this year's fiscal balance sheet.
Central Bank Efforts Will See Fiat Currencies Fall Against Gold . . . . Macroeconomic, systemic and monetary risk has seen the dollar, the euro and more particularly sterling fall versus gold in recent months. Gold would have likely risen by much more were it not for likely central bank and bullion bank gold sales which have artificially capped the price. International quantitative easing, zero percent interest rates and competitive currency devaluations will see other fiat currencies come under pressure in the coming months. So called "save haven" currencies such as the yen and the Swiss franc have fallen in recent weeks and are also likely to come under serious pressure in the coming months. The Swiss have in recent weeks been devaluing the Swiss franc by intervening in currency markets and selling millions of Swiss francs and buying euro. The global financial and economic meltdown is leading to central banks internationally attempting to devalue their currencies and this has profound implications for investors and savers as it will lead to significant inflation in the coming months.
Reflation: Déjà Vu All Over Again? It is possible we are experiencing a Yogi Berra (former Yankee catcher) moment reminiscent of his observation, "This is like déjà vu all over again." We all know the government is trying to reinflate asset prices with money printing, leverage, and bailouts. While stocks may not be out of the woods yet, yesterday's move through 806 on the S&P 500 sends a signal the markets are paying attention to all the "liquidity facilities". Since all of the gains from the 2002-2007 bull market were fully retraced, you can make a simplistic argument the entire bull market (2002-2007) was largely based on easy credit and asset inflation. The fundamentals did not support a bottom in stocks in October of 2002, but the Fed was able to inflate asset prices with easy credit and leverage. Since the Fed is using a page from their 2002 playbook, we can reference 2002 to help us better understand the possible effectiveness of the current money printing extravaganza.
Why the Price of Gold Is Not Yet Soaring Gold has been one of the best investments in what is increasingly looking like a "lost decade" for most asset classes. Yet, despite its steady, workmanlike gains - average annual increases of 16 percent since 2001 - many gold investors are extremely disappointed with its recent performance. By many accounts, its stature as a safe haven asset has been diminished since it failed to better its early 2008 high when the wheels fell off the global financial system last fall. . . . . . . . . So, why is gold still under $1,000? Lost in a typical discussion about why the yellow metal does not fetch a substantially higher number of dollars are important factors about supply and demand. As exchange traded funds and mints all around the world take hundreds of tonnes of the metal off the market for investors, similar size adjustments are occurring elsewhere in the supply-demand equation.
Obama Plans to Name Task Force to Overhaul Tax Code President Barack Obama plans to name a task force to review and overhaul the U.S. tax code, a spokesman for the Office of Management and Budget said today. Obama will ask the Economic Recovery Advisory Board, led by former Federal Reserve Board Chairman Paul Volcker, for a top- to-bottom review of the 96-year-old law in an effort to "rebalance the federal tax code," spokesman Tom Gavin said in an interview.
Battle begins over federal budget The fight on Capitol Hill over next year's federal budget begins in earnest on Wednesday, when the Senate and House Budget Committees will debate just how much they want to spend and tax in 2010. Those meetings are the second formal step in a months-long process that started in February when President Obama put forth his own proposed budget outline -- a fuller version of which will be delivered to the Hill in April.The president's proposed $3.6 trillion budget will frame the debate, as will the Congressional Budget Office's analysis of his budget proposals. The CBO's estimates of how much the president's plan would increase the long-term deficit are notably higher than those of the administration and lawmakers must use the CBO numbers as their reference point.
Geithner, Bernanke Seek to Plug Gaps in Finance Rules The Obama administration is preparing an overhaul of U.S. banking rules that would force financial companies to keep more cash on hand in case their trading bets go wrong. Treasury Secretary Timothy Geithner told lawmakers yesterday that changes will include "strong oversight, including appropriate constraints on risk-taking." Federal Reserve Chairman Ben S. Bernanke said the case of American International Group Inc. showed the "intense problem" of trading with insufficient capital to guard against losses.
U.S. Dollar in the Crosshairs Ahead of G-20 Summit In the run-up to next week's G-20 summit in London, developing countries led by China and Russia are stepping up calls for the U.S. dollar to be pushed aside as the main global reserve currency. China's central bank governor, Zhou Xiaochuan, suggested this week that reforms to the international monetary system include the long-term goal of an international reserve currency not connected to an individual nation. China is the biggest holder of U.S. dollar assets and is concerned about the currency's volatility.
Obama Pressed On New Global Currency
Welcome to Fuffland! In the unfolding global financial collapse, it is not just our accounts and balance sheets that come up short, but our language as well. What do you call a bunch of liar loans packaged into toxic assets and placed on the balance sheet of the Federal Reserve as collateral for rescue loans? J,K. Galbraith has proposed the term "Bezzle," taking it to mean the eternal ebb and flow of questionable transactions within an economic cycle. Rational actors cut corners during easy times when they know no-one is looking, and then play nice again when the times change and someone starts paying attention again. But I believe that the phenomenon we are observing is something different: we need a word that describes the artifacts generated in response to irrational actors who demand to be fooled. As the old saying goes, "A fool and his money are soon parted" - at the fool's own insistence, no less! If the deer comes out of the forest and walks up to the hunter, it is not proper hunting, and this is not proper con artistry or grift or embezzlement or any other term we use to describe proper works of evil. If the victim, at the sight of the economic predator, goes into doggie submission, we must stop discussing the phenomenon in terms of conflict and consider whether what we are observing might be some strange instance of symbiosis.
American Home Fires Back, Sues Hedge Fund for Racketeering After finding itself dragged into court by hedge fund manager Bruce Rose of Greenwich-based Carrington Capital, Irving, Tex.-based mortgage servicer American Home Mortgage Servicing, Inc. fired its own volley back at both Rose and Carrington on Thursday, suing for alleged acts of racketeering and a scheme to profit illegally from holding REO hostage at the servicing firm. American Home is owned by legendary investor Wilbur Ross' WL Ross & Co., and is the nation's largest independent residential mortgage servicer. The allegations made in the complaint by AHMSI against Rose and Carrington show just how complex relations between servicers and investors can be, amid increasing pressure from lawmakers and regulators to find solutions to the nation's housing mess.
Postal chief says post office running out of money Postmaster general says post office in dire financial straits, promotes cutting back delivery The post office will run out of money this year unless it gets help, Postmaster General John Potter told Congress on Wednesday as he sought permission to cut delivery to five days a week. "We are facing losses of historic proportion. Our situation is critical," Potter told a House panel. The agency lost $2.8 billion last year and is looking at much larger losses this year. Reducing mail delivery from six days to five days a week could save $3.5 billion annually, Potter said. Potter also urged changes in how the post office pre-pays for retiree health care to cut its annual costs by $2 billion. If the Postal Service does run out of money, the lingering question, Potter told the House Oversight post office subcommittee, is which bills will be paid and which will not. Ensuring the payment of workers' salaries comes first, he said, but other bills may have to wait.
More companies check credit before job offers With thousands of newly unemployed people looking for jobs, employers have found a new way to do background checks on applicants. More employers are running credit checks on potential workers. "They're using credit (ratings) to determine character," said Charisma Jones, a credit counselor. Jones says employers used to run checks only on people applying to work in certain fields, particularly those handling money. Now, some would-be employers are using your credit history to make a judgment on what type of person you are. If you're paying your bills on time, Jones said, the credit check's a good thing.
Hill defends actions on N. Korea Brownback determined to block nomination Christopher Hill, President Obama's nominee to be ambassador to Iraq, had an easy Senate confirmation hearing Wednesday, but may still be blocked by a Republican senator who claims Mr. Hill in a prior post broke his word to raise human rights issues with North Korea. Sen. Sam Brownback, Kansas Republican, told The Washington Times last week that he intended to put a hold on Mr. Hill's nomination, because he did not fulfill his promise to include the George W. Bush administration's envoy for human rights in North Korea in negotiations with the communist state.
U.K. Bond Auction Fails for First Time Since 2002 The U.K. failed to find enough buyers for 1.75 billion pounds ($2.55 billion) of bonds for the first time in almost seven years as debt investors repudiated Prime Minister Gordon Brown's plan to stem the worst economic crisis in three decades. Gilts slumped after the London-based Debt Management Office, which manages bond auctions on behalf of the Treasury, said investors bid for 1.63 billion pounds of the 40-year securities. The last time the U.K. government was unable to attract enough investors was in 2002 when it tried to sell 30- year inflation-protected bonds. The yield on the 4.5 percent gilt due 2049 rose 10 basis points to 4.55 percent.
Canadian Bank Wants To Move To US To Get TARP One popular critique of immigration is that foreigners come here to mooch on our generous welfare benefits and are a drain on taxpayers. We're not particularly convinced by this, but it apparently applies very well to banks.
Free Speech Advocates Launch Campaign for 'International First Amendment' Troubled by attacks on free expression by groups wanting to shield Islam from criticism or scrutiny, free speech advocates are preparing to unveil a campaign for an "international First Amendment." The initiative will be launched by the International Free Press Society (IFPS) at an event in Washington, D.C., on Friday. Attending will be Geert Wilders, the Dutch lawmaker whose views on Islam have stoked controversy worldwide.
United Nations Wants To Regulate Free Speech Of Every Nation
Borrowing Costs for Small Gold Miners Triples Borrowing costs for small gold mining companies have almost tripled in the past year as the credit crunch forces banks to demand a premium for political and security risks, the World Bank's private financing unit said. Banks are asking for as high as 800 basis points above the London interbank offered rate, or Libor, for a typical $400 million loan maturing in six years, said William Bulmer, associate director at International Finance Corp., the private lending arm of the World Bank. That compares with a 300-basis point premium last year, he said.
Obama's EPA Puts Thousands of Mining Jobs at Risk Expressing "serious concerns" about the environment, President Barack Obama's Environmental Protection Agency on Tuesday announced it was putting mountaintop mining permits on hold - a move that could kill jobs, the industry warned. Environmental activists cheered the decision, but the National Mining Association (NMA) warned that the EPA's action may eliminate high-paying jobs in a relatively poor area of the country. "Jeopardizing coal mining activity throughout Appalachia will put more than 77,000 high-wage mining jobs at risk at a time when our nation is already battered by a deepening recession," said NMA President and CEO Hal Quinn. "This action is incomprehensible at a time when the country is losing 600,000 jobs every month and households are struggling just to meet basic needs."
House to Take Up Stalled Wilderness Bill After several false starts, the House is expected to take up a long-delayed bill to set aside more than 2 million acres in nine states as protected wilderness. . . . . . . . Critics, including Sen. Tom Coburn (R-Okla.), say the bill is an "anti-stimulus" measure "that will erect new barriers to energy exploration and squander billions of taxpayer dollars on low-priority parochial programs and frivolous earmarks."
JPMorgan sues Washington Mutual over $13 billion case JPMorgan Chase & Co has sued the Washington Mutual Inc holding company and urged a federal bankruptcy court not to interfere with its September purchase of the thrift's banking operations. The lawsuit was filed Tuesday with the U.S. bankruptcy court in Delaware, three days after Washington Mutual sued the Federal Deposit Insurance Corp for well over $13 billion in connection with the purchase. Washington Mutual accused the regulator of agreeing to an unreasonably low $1.9 billion price in arranging the sale of its banking operations to JPMorgan last September 25.
California Home Prices Decline 41% on Foreclosures California home prices dropped 41 percent last month from a year earlier, more than double the U.S. decline, as surging foreclosures drove down values, the state Association of Realtors said today. The median price for an existing, single-family detached home in California sank to $247,590 in February from $418,260 a year earlier, the Los Angeles-based group said in a statement. The U.S. median price fell 16 percent during the same period, the second-biggest drop on record, according to the National Association of Realtors.
Exxon, Chevron Count Every Dollar to Protect $40 Billion Hoard Exxon Mobil Corp. and Chevron Corp., their coffers swollen by last year's record oil prices, are maneuvering to preserve a combined $40 billion in cash amid a global financial crisis that roiled the banking system. Exxon Mobil Chief Executive Officer Rex Tillerson says he checks in every night with Treasurer Don Humphreys to make sure the money is still there. The largest U.S. oil producers won't say where they're putting cash, even as both acknowledge going to greater lengths than in the past to protect their funds.
Buffett's Berkshire may lose "AAA" S&P rating Warren Buffett's Berkshire Hathaway Inc may lose its "AAA" credit rating from Standard & Poor's within a year if the insurance and investment company's capital levels or value of its equity holdings face more downward pressure. S&P late Tuesday revised its rating outlook for Berkshire to "negative" from "stable." It said any downgrade would probably be only one notch, to "AA-plus."
Congressman Warns Mexico More Dangerous than Iraq, Could Become Failed State At a House of Representatives hearing on federal law enforcement's response to the violence along the border between the United States and Mexico, Rep. John Culberson (R-Texas) said there is more danger in that region than in the Middle East. "Mexico is more dangerous than Iraq," Culberson said. "There were more deaths in Mexico than there were in Iraq."
Clinton: U.S. Drug Policies Failed, Fueled Mexico's Drug War Secretary of State Hillary Rodham Clinton traveled to Mexico on Wednesday with a blunt mea culpa, saying that decades of U.S. anti-narcotics policies have been a failure and have contributed to the explosion of drug violence south of the border. "Clearly what we've been doing has not worked," Clinton told reporters on her plane at the start of her two-day trip, saying that U.S. policies on curbing drug use, narcotics shipments and the flow of guns have been ineffective. "Our insatiable demand for illegal drugs fuels the drug trade," she added. "Our inability to prevent weapons from being illegally smuggled across the border to arm these criminals causes the deaths of police, of soldiers and civilians."
Mexico will cause the collapse of America - Glenn Beck
Beijing boosts cyberwarfare China is continuing a large-scale military buildup of high-tech forces that includes "disruptive" anti-satellite missiles, new strategic forces, and computer attack weapons, the Pentagon's annual report to Congress on the Chinese military says. "China has made steady progress in recent years in developing offensive nuclear, space, and cyber warfare capabilities -- the only aspects of China's armed forces that, today, have the potential to be truly global," says the report entitled "Military Power of the People's Republic of China (PRC)" that was released Wednesday.
N. Korea loads rocket for launch North Korea is loading a Taepodong rocket on its east coast launch pad in anticipation of the launch of a communications satellite early next month, U.S. officials say. U.S. counterproliferation and intelligence officials have confirmed Japanese news reports of the expected launch between April 4 and 8. North Korea announced its intention to launch the satellite in February. Regional powers worry the claim is a cover for the launch of a long-range missile capable of reaching Alaska. National Intelligence Director Dennis Blair said earlier this month that all indications suggest North Korea will in fact launch a satellite. North Korea faked a satellite launch in 1998 to cloak a missile development test. In 2006, it launched a Taepodong-2 that blew up less than a minute into flight.
North Korea Affirms It Plans 'Peaceful' Launch of Satellite North Korea affirmed it plans to launch a satellite as part of a "peaceful" space program as the U.S. said it will go to the United Nations in the event the communist country test-fires a missile. "The production and launch of the satellite is the amalgamation of modern science and technology," the official Korea Central News Agency said today, citing the Minjoo Choson newspaper. It accused South Korea and its allies of "harping on" about countermeasures to any missile launch. The U.S. will raise the issue at the UN if a missile is fired, Secretary of State Hillary Clinton said yesterday in Mexico City. A rocket launch would be a "provocation," South Korea's Defense Ministry said today in Seoul.
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