Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Thurs 06.25.2009
YOU CAN’T BORROW YOUR WAY OUT OF DEBT “Rather than love, than money, than fame, give me truth.” - Henry David Thoreau Time is running out. The public relations campaign being conducted by the Obama administration, Federal Reserve and nation’s largest banks is beginning to fail. The lies, half-truths, and cover-up regarding the solvency of the largest banks in the U.S. will be revealed as reality interrupts their master plan. The politicians and government bureaucrats know that 80% of the population don’t understand or care about economic issues. The plan is insidious, systematic and deceptively simple:
'Dollar faces challenge as reserve currency' A leading economist said in Seoul yesterday that the U.S. dollar's supremacy as the world's reserve currency is facing profound challenges as the balance of economic and financial power shifts East amid the current economic crisis. "There is a slow-burning fuse underneath the dollar," Gerard Lyons, chief economist at Standard Chartered Bank, said in the World Economic Forum. Underscoring the strengthening role of Asia, Lyons said that the depth of the global downturn drove key emerging economies, such as China and Russia, to cite the possibility of a new global reserve currency.
Near-record growth in the custodial holdings at the Fed; ongoing angst about the dollar’s role as a reserve currency … by Brad Setser CFR Central banks haven’t lost their appetite for Treasuries. At least not shorter-dated notes. John Jansen noted before yesterday’s 2-year auction “the central banks love that sector [of the curve].” And the auction result certainly didn’t give him cause to backtrack. Indirect bids — a proxy for central banks — snapped up close to 70% of the auction. Jansen again: The Treasury sold $ 40 billion 2 year notes today and the bidding interest from central banks was frantic. The indirect category of bidding ( which the street holds is a proxy for central bank interest) took 68 percent of the total. That leaves about $ 13 billion for the rest of us. Central banks also seem increasingly interested in five year notes. Indirect bids at today’s five year auction were quite high as well.*
In-Depth Look - Roubini On The Economy - Bloomberg Interview and discussion with Nouriel Roubini of the New York University. He talks about home sale revenues, health-care reform, and currencies.
Hyperinflation still fuels gold’s worth The economic packages announced by the US and other countries have a big impact on gold prices. Because this has fueled speculation that the economic packages will cause hyperinflation and that has contributed to gold’s popularity. So, gold’s popularity is remaining strong due to the current weaknesses in global economies. Buyers in the US are still opting to purchase the precious metal due to fears over hyperinflation, which would see the value of the dollar fall.
Chinese official urges buying of gold, U.S. land top Communist Party research chief said Thursday that China should buy gold and U.S. real estate rather than Treasurys, according to a Reuters report. Li Lianzhong, who is head of economics at the party's policy research office, said the U.S. dollar is poised for a fall, making gold and land better investments for China's $1.95 trillion in foreign exchange reserves, the report said. It quoted Li as saying Beijing should also focus on buying up energy and natural resources.
As Global Currencies Weaken, Gold Posts Triple Digit Gains Worldwide Thus what started as one country trying to keep a strong currency from hurting its economic interests morphs into an endless cycle that doesn’t do much to help the world economy in the long run. But this powerful global trend does benefit one particular “currency.” In fact, it has benefited investors by generating returns in the multiple hundreds of a percent - minimum - to anyone on earth who has owned it since 2000. This currency is the world’s oldest form of money, one that’s been in use long before any of the other currencies were even dreamed about. And it will be used long after all of them are merely memories chronicled in history books. It is a form of money that cannot be printed at will and artificially cheapened. And even though all central banks own it, it is the creation of none of them. In case you haven’t already guessed, I’m speaking about gold.
Gold Jumps as ECB Front-Runs the Fed, Lends Near-Half Trillion Euros at 1.0% THE PRICE OF GOLD leapt overnight and early Wednesday, recovering all and more of this week's losses at $938 an ounce as world stock markets ticked higher but crude oil slipped for the second day running. US Treasury bond prices also drifted as the US Dollar Index held flat ahead of today's interest-rate announcement from the Federal Reserve, widely expected to reaffirm its commitment to Quantitative Easing and 0% interest rates. The world's No.1 reserve currency rose however against its main competitor, the Euro, after the European Central Bank pumped a record €442 billion ($618bn) into the region's banks, offering unlimited loans for 12 months at the current policy rate of just 1%. French, German and Italian investors saw the Gold Price in Euros bounce sharply from its lowest level since April 6th at €655 an ounce.
Gold & Deflation: A Trick Question SO DOES THE PRICE OF GOLD rise or fall in a deflation?Hint: It's a trick question, already tripping up plenty of would-be advisors. Because gold must fall during deflation, since it rose during the '70s inflation. Right? "Gold prices, in real inflation-adjusted terms, unsurprisingly tended to increase during inflationary times," nods one commentator, writing in London but posted at the Business Times in Singapore. "Its purchasing power tended to sag during depressions and deflation."
Bullion & Metals: China frightens Commodity Bulls As Grant’s Interest Rate Observer has been known to say, “We wrote it. Did you read it?” My slim hope is that the Chinese really and truly know what they are doing, because, in fueling investor optimism with such flair, they are playing a high stakes game. My worry is that they drop the ball, somehow, and the result shows up as a violent wake-up call for “high beta” assets...emerging market equities, energy, commodities and the like.
China & IMF Gold Sales; The Real Story China's recent veiled threats towards the establishment have been taken to heart. As China announced increased gold reserves from 600 to 1,054 tonnes it was an obvious warning. Initially I thought it was a direct threat against the ocean of Treasuries being issued, but I think I have a clearer answer now. China wants the IMF's gold!
Gold & US Dollar Update Below is a weekly line chart of Gold. Each data point is the closing price on Friday. There are two main supports. The first is at about $880 where the 40-week and 80-week moving averages reside. Should that area break then look for a bottom close to $800. There is a lot of support filling in towards $800. My thinking is that the market will trade in similar fashion (triangle) to what we saw in 2005 and 2007. The bottom chart on the picture is the width of the 40-week bollinger bands. The lower 80-week band (black) is actually inside of the lower 40-week band. This means that long-term volatility is actually more compressed then intermediate or medium term volatility. A few more months of consolidation would help close the 40-week bands. The lower band is already starting to move up.
Silver market will overtake gold David Morgan, whose interest in silver dates to the tender age of 11, returns to The Gold Report today to discuss the latest buzz about his favorite subject. One of the world's leading authorities on silver as a commodity, an investment, a safe haven and an increasingly important manufacturing metal, he expects this year's stronger-than-anticipated late spring climb to lose momentum before the end of the month. Longer term, though, the founder of the respected monthly, The Morgan Report, sees silver appreciating at a faster pace than gold. And while he also likes the idea of monetizing silver—rather than gold, because silver is far more liquid—that's one wish he does not expect to see granted.
State shutdowns loom as deadlines near At least 19 states still have to approve their fiscal 2010 budgets before next Tuesday. If they don't, staffers might not be paid and services might shut down. One week and counting. An unprecedented number of states have only days left to pass their fiscal 2010 budgets. At least 19 states are still hammering out their spending plans as the recession wreaks havoc with their finances and sparks fights between governors and lawmakers. If spending plans aren't approved, state workers may not receive their paychecks and some government offices may shut down. "A lot of states are coming down to the wire," said Todd Haggerty, research analyst for the National Conference of State Legislatures. "More than what's typical. The unprecedented economic situation is creating a lot of difficulty this year."
Yes Virginia, there was an international financial crisis in 2007 and 2008 Now that the markets have lost a bit of their froth, it seems fitting to note just how sharply trade — and private financial flows — have contracted over the past year. The US q1 balance of payments data is rather stunning. Trade (as we all know) contracted far more rapidly during this cycle than in the past. But the fall in private financial flows — outflows as well as inflows — has been even sharper than the fall in trade flows. US private investment in the rest of the world rebounded a bit in the first quarter, but private demand for US financial assets remained in the doldrums. Private investors were still pulling funds out of the US in the first quarter.
pt 1/2 Marc Faber on The Alex Jones 23 June 2009
Return of the Dead Hand For much of the world, the period from the 1960s through the early 1980s was an era of ever-greater government intervention into the economy. The period, an expansion of policy built on an intellectual foundation of Marxism, socialism, corporatism, and progressivism culminated in economic stagnation and inflation in the market-oriented mercantilist-interventionist countries such as the "Great Society" in the United States and economic collapse in the Marxist dominated Soviet block.
H.R. 675: Building Obama’s Civilian National Security Force In January, without any recognizable corporate media coverage, Rep. Bob Filner, a California Democrat, introduced H.R. 675. The bill would amend title 10 of the United States Code and extend to civilian employees of the Department of Defense the authority to execute warrants, make arrests, and carry firearms. The bill was referred to the Armed Services Committee on January 26, 2009. Filner’s bill would amend the United States code with the following: “Sec. 1585b. Law enforcement officers of the Department of Defense: authority to execute warrants, make arrests, and carry firearms… for any offense against the United States.”
U.N. to Emerge as Global IRS While our media sleep, the United Nations is proceeding, with President Obama’s acquiescence, to implement a global plan to create a new international socialist order financed by global taxes on the American people. The Conference on the World Financial and Economic Crisis and its Impact on Development that begins on Wednesday will consider adoption of a document calling for “new voluntary and innovative sources of financing initiatives to provide additional stable sources of development finance...” This is U.N.-speak for global taxes. They are anything but “voluntary” for the people forced to pay them. The most “popular” proposals, which could generate tens of billions of dollars in revenue for global purposes, involve taxes on greenhouse gas emissions and financial transactions such as stock trades.
pt 2/2 Marc Faber on The Alex Jones 23 June 2009
Barney Frank Says Fannie And Freddie's Lending Standards Are Too High Of all the things you could say about Fannie Mae (FNM) and Freddie Mac (FRE), too-strict lending standards probably wouldn't come to mind. Afterall, the companies have been backstopped to the tune of $400 billion, which has to mean their standards were too loose. But powerful Congressman Barney Frank, in a desperate attempt to reflate the old bubble, says the two GSEs are being too stingy, particularly with respect to condos.
Barney the Underwriter Telling Fannie Mae to take more credit risk. Now there's an idea. Back when the housing mania was taking off, Massachusetts Congressman Barney Frank famously said he wanted Fannie Mae and Freddie Mac to "roll the dice" in the name of affordable housing. That didn't turn out so well, but Mr. Frank has since only accumulated more power. And now he is returning to the scene of the calamity -- with your money. He and New York Representative Anthony Weiner have sent a letter to the heads of Fannie and Freddie exhorting them to lower lending standards for condo buyers. You read that right. After two years of telling us how lax lending standards drove up the market and led to loans that should never have been made, Mr. Frank wants Fannie and Freddie to take more risk in condo developments with high percentages of unsold units, high delinquency rates or high concentrations of ownership within the development.
Fed Board Maintains the Status Quo Facing an economy that is perking up slightly but still deep in recession, the Federal Reserve left its rescue policies unchanged on Wednesday and said that it would keep interest rates low for “an extended period.” As expected, the central bank said that it would keep its benchmark overnight interest rate at virtually zero — where it has been since December — and signaled that it would continue buying long-term Treasury bonds and other government-backed securities to keep long-term rates low.
Peter Schiff Vlog Report 24 June 2009
Dollar climbs after the Fed The U.S. central bank says the economy will remain weak even as the pace of the decline has slowed. The dollar rose against rival currencies Wednesday as investors took shelter in the U.S. currency after the Federal Reserve said the economy would "remain weak for some time." The Fed also indicated that the pace of the economic contraction has slowed but didn't signal any major change in its unconventional monetary policy measures, including its purchases of U.S. Treasury bonds and mortgage backed securities. As was widely expected, the U.S. central bank held its key interest rate steady at a historic low near zero percent.
Shares Slip and Bonds Fall After Fed Statement Stocks ended mixed but mostly higher Wednesday after the Federal Reserve said the economy was on the mend. Bond prices fell, however, after the Fed said it would not step up its spending to purchase Treasuries and other debt to lower interest rates. The central bank’s decision Wednesday to leave its main lending rate at a low of zero to 0.25 percent was not a surprise, but some investors have been hoping the central bank would do more to revive the economy. Others wanted it to more clearly lay out how it would keep inflation in check.
The Erosion of the Dollar and the Rise of the East The outcome of the push for globalization is a severe decline in the median standard of living in the US and an erosion of those individual liberties and freedoms which has made the US somewhat unique on the vast historical sweep of world history. Few understand this. One cannot be completely sovereign when the push for 'competitiveness' is used to consistently erode the commitment to individual freedom. David Rockefeller, and Sam Walton, and Bill Gates, looked at the social and economic structure of the People's Republic of China and saw the new American paradigm. Not in the evolution of China to democracy and freedom, but in the subjugation of the United States to huddled masses docilely wearing the yoke of debt subservience to the ruling elite.
Commodity Bulls Snared by China Stimulus Snafu . . . . The bulls happily embraced the China story and ran with it as fast and far as they could, taking oil and copper and the like to eight-month highs. But, as it turns out, much of China’s stockpiling drive looks to have been pure speculation. And not even official speculation sanctioned and planned out by the mandarins in Beijing... but instead a fast and loose misallocation of funds. As part of China’s economic stimulus plan, Chinese banks were ordered to lend massive sums to steelmakers, iron ore importers and other industrial players. A large portion of these funds was plowed directly into big commodity price bets.
Obama's Economic Reforms Should Re-structure the System -- Not Just Reform It A recent study cited by the Editor of the Financial Times argues that we are now in a Depression although no one wants to use the term or face the music. Recall that it took the National Bureau of Economic Research a full year to recognize the reality of a recession that analysts at investment banks had been acknowledging for as long. Despite everything that has happened, and is continuing to occur on the economic front---a rise in unemployment claims, mounting foreclosures, and escalating bankruptcies-the sense of crisis is being downplayed to stoke confidence and encourage the belief in "green shoots" and an emerging recovery.
Lending money in return for your soul A financial firm in Russia is offering loans to citizens for their eternal soul. Russia Today reported that a financial company named "Kontora" in the Latvian capital Riga offers every adult citizen loans in cash. According to the article, the financial institute has an extraordinary client agreement form saying that the loan is given using as security, "the client's immaterial being, namely immortal soul." Except for the clause saying that the soul is owned by the company until the last cent of payment, there are none for force majeure. The "soul-sellers" can lend money for 90 days maximum with the 1 percent credit each day. If clients do not pay back the debt in 90 days, their souls are the property of the company. However, the agreement offers a second chance: the agreement includes that the soul may be bought back from Kontora on its own terms, possibly with an extra sum of money for each individual case.
Buffett: Yes, We're Monetizing The Debt Tim Geithner says it's impossible because we have a strong independent Federal Reserve, but Warren Buffett has no reason to be politically correct. And in his interview with CNBC, he told Becky Quick: we are monetizing the debt. We are using printed paper to pay our government. It's obvious, really. That's what quantitative easing is, but the government says it's not that way. So Buffett is concerned about inflation -- in sounds like it's inevitable to him -- though he says deflation is something we'll never see in our lifetime.
Inflation or Hyperinflation? Inflation is dead – long live inflation! We hear about the threat of hyperinflation in the media – is this for real, can it happen in the U.S.? Are we hyping up the word inflation, is it an inflationary play of words to grab attention to discuss the threat of hyperinflation? Let’s deflate the hype and put inflation where it belongs… at the forefront of your concerns. Stop right here. In the words of European Central Bank (ECB) President Jean-Claude Trichet, what we suggest is “extraordinarily counterproductive.” Discussing how policies pursued by the Federal Reserve (Fed) and other central banks might lead to inflation makes the job of central banks more difficult. That’s because the best predictor of future inflation may be inflation expectations.
A Final Word on Inflation and Deflation A serious bout of inflation is rarely caused by normal business activity, such as commercial bank lending and private debt. In almost every case that I have studied, a very serious monetary inflation is triggered by excessive government debt obligations, and not private debt, that can no longer be adequately serviced by a productive real economy and domestic taxation. That unserviceable debt becomes 'monetized' and a serious inflation results. It is a form of debt default.
Deflation vs. Inflation - Which Is the Bigger Threat? As far as my two cents goes, one could easily argue that the dollar's long-standing role as a reserve currency means that there are a great many "unnatural" holders of the U.S. currency around the globe. Generally speaking, they require more incentives than Americans to remain invested. In a world where the U.S. is no longer seen as the leader it once was, where the risks stemming from hyper-expansive fiscal and monetary policies are increasingly apparent and growing by the day, and where many old truths are no longer being taken for granted, it is not a stretch to think that today's demand for the currency could easily evolve into tomorrow's rapidly growing supply.
Buffett: No Green Shoots At All Add Berkshire Hathaway (BRK) CEO Warren Buffett to the "no green shoots" crowd. In an interview with CNBC's Becky Quick, the Oracle says they're just not there. And he should know, given Berkshire Hathaway's involvement in everything from housing to finance to utilities to manufacturing to retailing to candy. If there were any, he'd have seen some and he sound pretty unequivocal about it.
The Commercial Real Estate "Stomach Blow" Philip Blumberg, CEO of Blumberg Capital Partners speaking at the Reuters 2009 Global Real Estate Summit in New York:
Democrats Agree to Concessions on Climate Bill An agreement on a string of demands sought by farmers and lawmakers from rural areas erased a major obstacle facing a massive climate bill that for the first time would limit the pollution linked to global warming and redirect the nation toward greater use of clean energy. With some Democrats still worried about the bill's impact on energy costs, especially in regions that rely heavily on coal for power, Democratic leaders on Wednesday were looking for broader support for the bill ahead of a vote scheduled for Friday.
Waxman clueless about his Cap & Trade bill: “You’re asking me?!” Rep. Waxman: "I don't know the details. I rely on the scientists."
The climate change e-mails EPA doesn’t want you to see Another day, another Obama cover-up. The Competitive Enterprise Institute has obtained internal EPA e-mails that show the agency willfully and recklessly disregarded scientific data that undermined the bureaucracy’s global warming zealotry. This information is especially relevant as Congress rushes to pass the cap-and-trade nightmare on Friday. CEI general counsel Sam Kazman has notified the EPA and requested that the internal communications and suppressed study be released to the public and added to the public record. Will another whistleblower be disappeared? Note especially this warning to the dissenting scientist: “The time for such discussion of fundamental issues has passed for this round. The administrator and the administration has decided to move forward on endangerment, and your comments do not help the legal or policy case for this decision… I can only see one impact of your comments given where we are in the process, and that would be a very negative impact on our office.”
US Government's Climate Con-job Obama administration “report” on climate change is deceitful, scare-mongering, bogus science… Suppose a company doctored data, misrepresented study findings, replaced observations with computer simulations, and hired PR flacks to promote its new “wonder drug.” News stories, congressional hearings and subpoenas would be in overdrive. Fines and jail sentences would follow. And rightly so. But the standards change when “climate catastrophe” is involved.
Warren Buffett Slams "Cap and Trade" as a Regressive Tax on All Americans
Congress Must Pay for What It Spends Democrats won't be the party of deficits. In recent years, America's fiscal story has been one of steady decline -- from record surpluses to record deficits. In 2001, the federal government had a projected 10-year surplus of $5.6 trillion. Today, we are looking at a fiscal year 2009 deficit of $1.7 trillion. A number of factors have brought us to this cash-strapped point, including reckless tax cuts, the cost of two wars, entitlement programs that have grown on autopilot, and the necessary, though costly, efforts to get our economy out of recession. But by far the worst decision was the abandonment in the Bush years of the principle that our country should pay for what it buys. It's time to learn from that error and establish that principle in law.
A Bank Holiday on Deck? We've been hearing the same rumours about embassies buying foreign currencies for their own use as cited here, but have not been able to obtain enough confidence to comment on it before this public disclosure in a major news source. Harry Schulz apparently thinks a bank holiday is in the offing. We think that if something decisive like this happens it is more likely related to a de facto devaluation of the dollar, a market break, that would be very brief. The Banks would close in order to allow the markets to stabilize. The occasion is therefore likely to be a major failure of a household name in banking, or perhaps even the failure of the State of California. California is the size of a large national economy.
Rewriting Rules to Protect Money Funds The Securities and Exchange Commission proposed more stringent rules for money market funds on Wednesday in an attempt to avert runs like the one that erupted last fall. Until last September, money market funds had been deemed a safe place to store cash. Then investors rushed to pull their cash out of the Reserve Primary fund, a multibillion-dollar fund, during the worst of the financial crisis.
CNBC: Alan Grayson Asks for Investigation on $306B Treasury-Fed-FDIC Citigroup Deal
Rules to prevent ‘breaking the buck’ advance SEC votes unanimously for tightened regulations for money-market funds Federal regulators on Wednesday proposed tightened rules for money-market mutual funds that will require them to hold a reserve of assets that could be easily sold and to invest only in the highest quality securities. The Securities and Exchange Commission action came after a $60 billion money fund "broke the buck," exposing investors to losses that could ultimately reach about 8 cents on the dollar. The value of the Primary Reserve Fund's assets in September fell to 97 cents per investor dollar — below the dollar-for-dollar level needed for full repayment.
The Great Depression Although the Great Depression engulfed the world economy many years ago, it lives on as a nightmare for individuals old enough to remember and as a frightening specter in the textbooks of our youth. Some 13 million Americans were unemployed, "not wanted" in the production process. One worker out of every four was walking the streets in want and despair. Thousands of banks, hundreds of thousands of businesses, and millions of farmers fell into bankruptcy or ceased operations entirely. Nearly everyone suffered painful losses of wealth and income.
Gov. Mark Sanford Admits Affair, Resigns Republican Governors Association Columbia, S.C. (AP) – Gov. Mark Sanford admitted Wednesday he's been having an affair with a woman he visited on a secret trip to Argentina and said he'll resign as head of the Republican Governors Association. Sanford, a rumored 2012 presidential candidate, refused to say whether he'll leave office. "I've let down a lot of people, that's the bottom line," Sanford said at a news conference. He said he's known the woman about eight years, but their relationship turned into something more a year ago while he was on an economic development trip to Argentina. Sanford, a 49-year-old father of four, choked up during remarks to reporters. He said his wife has known about the affair for the last five months.
DID TAXPAYERS FUND SANFORD’S LOVE JAUNTS? Some Mark Sanford trips were taxpayer-paid South Carolina Gov. Mark Sanford has taken at least three taxpayer-paid trips to Argentina, however, it’s unclear whether he met his girlfriend during any of them. At his news conference in Columbia Wednesday, Sanford said he paid for his most recent trip with is own money. “It was my own ticket,” he told reporters. But sometime after his 2002 election as governor, Sanford traveled to Argentina on the dime of the South Carolina Department of Commerce. Though it’s unclear precisely when the trip occurred, it likely would have taken place after he had met the woman. Sanford said Wednesday he met the woman eight years ago, though a romantic relationship did not develop until one year ago.
Obama woos governors on health care President Barack Obama made a strong pitch for health care reform on Wednesday, hosting a handful of key governors at the White House and planning a televised town hall meeting on the topic in the East Room as negotiations over his top priority progressed on Capitol Hill. “There’s no perfect unanimity across the table in terms of every single aspect of reform,” Obama said after his meeting with five governors. “I think everybody here wants to make sure that governors have flexibility, that they have input into how legislation is being shaped on the Hill. ... And we’re committed to working with them in the weeks and months to come to make sure that when we get health reform done, it is in partnership with the states, where the rubber so often hits the road.”
Government Health Plans Always Ration Care Europe offers a glimpse of the future if President Obama and congressional Democrats have their way. Only by expanding government control of health care can we bring down its cost. That's the faulty premise of the various proposals for health reform now being batted around Washington. The claimed cost control depends on politically safe ideas such as preventive care or the adoption of electronic health records. And neither -- even according to the Congressional Budget Office -- will do much to reduce spending. If these proposals are implemented and fail to produce savings, government will turn to a less appealing but more familiar tool to cut costs: the regulation of access to drugs and medical services. Medicare is already going down this path. What will be new about government-run health care is the instrument of regulatory control. There will be an omnipotent federal health board. Buried in current reform proposals, this board deserves closer scrutiny.
Obama leaves door open to tax on health benefits Obama leaves door open to tax on health benefits in struggled for overhaul legislation President Barack Obama left the door open to a new tax on health care benefits Wednesday, and officials said top lawmakers and the White House were seeking $150 billion in concessions from the nation's hospitals as they sought support for legislation struggling to emerge in Congress. "I don't want to prejudge what they're doing," the president said, referring to proposals in the Senate to tax workers who get expensive insurance policies. Obama, who campaigned against the tax when he ran for president, drew a quick rebuff from organized labor.
Obama Quietly Pushing Back Healthcare Deadline to December? The folks at http://HealthcareHorseRace.com have discovered an interesting inconsistency with Obama’s June 20 statements on his healthcare bill deadline and that posted in the “official” transcript on the White House website. As far as the White House website is concerned, the goal is to have a bill before the president by October. But in verbal statement reported by several media sources, Obama himself has said December and not October. So, what we have here is a hint that Obama might realize his bill is in major trouble and he is quietly trying to push back the expectations on his self-imposed deadline.
Union: Shreveport GM plant to shut by 2012 General Motors plans to close its assembly and stamping plants in Shreveport, La., no later than June 2012, a union official said Wednesday. Doug Ebey, the president of United Auto Workers Local 2166, said the company filed documents late Tuesday in bankruptcy court saying that the plants, which employ 950 people, are "not going to be part of the new General Motors when it emerges from bankruptcy."
Indian automakers aim to eat Detroit's lunch Mahindra & Mahindra's small diesel-powered trucks to go on sale here by the end of this year, while Tata Motors' Nano car is slated stateside in 2011 It wasn't too long ago that the thought of buying a reliable car from Korea seemed laughable. Today, Korean vehicles are common fare and automakers from India are getting ready to invade the U.S. market. Experts say their vehicles are no joke. Plus, Detroit's turmoil could give Indian automakers a foot in the door here. With General Motors and Chrysler both looking to save money, in part by trimming their dealer ranks, hundreds of new-car dealers could be ready to sign up with new competitors like these.
Why Did New Homes Sales Go Down When Existing Home Sales Improved? The grim news from the government today was that sales of new homes are down 32.8 percent from a year ago. The government also said that new home sales had decline 0.6 percent since April. The inventory of new houses for sale now represents 10.2 months worth of sales, down slightly from the 10.8 months of inventory at this time last year. The downtick in new home sales may surprise some people who noticed that existing home sales actually improved in May. Why are existing homes selling more than new homes?
California Could Run Out of Money by July 28 To hear Gov. Arnold Schwarzenegger and state finance officials tell it, July 28 is California's last stand before fiscal Armageddon. Top financial officers say that's when the state will run out of cash to pay its daily expenses unless lawmakers pass a balanced budget. Schwarzenegger has warned that government will come to a "grinding halt." The state controller describes "a meltdown." But what exactly will happen just five weeks from now is less clear-cut than the dire pronouncements suggest.
California May Be Forced to Issue I.O.U.’s Signaling that California is slipping deeper into financial crisis, the state’s controller said Wednesday that his office would soon be forced to issue i.o.u.’s to scores of the state’s creditors, as lawmakers failed at their first attempt as a body to close the state’s multibillion-dollar shortfall. If the i.o.u.’s are issued as threatened, it would be the first time since 1992 — when Gov. Pete Wilson paid roughly 100,000 state employees with them — that the warrants were used to hold over those to whom the state owed money. Before that budget crisis, California last issued the warrants during the Depression.
California: Harbinger of National Doom? If you were given the perfect country, could you mess it up as bad as California? Begin with fertile, productive, well-irrigated soils capable of growing just about anything. Add vast agricultural tracts and miles upon miles of wine country with lush, bountiful vineyards. Include majestic mountain ranges containing rich deposits of gold, silver and other useful metals, and covered with thick, immense forests with every type of timber imaginable. Toss in critical navigable rivers to move these resources to market. Insert vast oil and natural gas deposits while you are at it, along with wind, water, geothermal and solar resources. Give it a long coastline with beautiful beaches, plentiful fresh water, ocean fisheries, many natural harbors, a well-connected transportation grid with first-class roads, rails and airports too. Don’t forget universities at the cutting edge of technology and an unparalleled educational system.
Southern California Churches Advocate Arming Congregants The genius of concealed carry of handguns is that would-be murderers remain uncertain as to who is armed and who isn’t. You never know if the target is armed with lethal force, and more to the point, how alert and prepared they are to resist. This is true for everyone interested in being as safe as they can be from future violence, because it comes to the realization of specific unalterable realities: you’re on your own. It’s a matter of positive attitude, not belligerence. This week some Southern California Church Leaders came to that very same conclusion, and took up a position advocating not only a very discreet security presence of professionals, but also took the advice of their consultants and adopted the policy of advocating concealed carry of handguns among the congregation.
U.S. monitoring several N.K. ships for possible WMD The United States said Wednesday it is closely monitoring several North Korean ships for allegedly carrying weapons of mass destruction for possible proliferation, although it was tailing only one at the moment, according to Yonhap News. "We have been interested in this one ship, but we've been interested in, frankly, multiple ships," Pentagon press secretary Geoff Morrell said, but added, "It's the only ship that we have tracked like this." Morrell was talking about the Kang Nam, the North Korean ship that the U.S. military has been shadowing since its departure from a North Korean port early last week, possibly on its way to Myanmar. He would not discuss where the ship was headed.
Russia Facing Long Recession, World Bank Says The recession in Russia will run deeper and longer than it appeared even a few months ago, the World Bank concluded in a report released Wednesday, underscoring the impression that Russia has been one of the countries hit hardest in the downturn. The Russian economy, which seesaws from boom to bust along with commodity prices in the best of times, has experienced the most extreme swing from growth to contraction of any large economy in the current downturn.
Iran 2.0 The world of wired dissidents will grow. Mark down the Iranian people as an inconvenient truth. Those who have become close followers of the Iranian nuclear-weapon program -- now approaching its fifth anniversary of Western wheel-spinning in the Persian sand -- know that the menu of options on the table has been limited. One was bomb Iran. No need to rehearse the reasons given for not doing that, other than the clear understanding that the West simply won't do it. Two was sanctions, mainly a gasoline embargo. Again, the main show-stopper is that the Western powers won't do it.
Fresh Clashes as Ruling Cleric Says Iran Will Not Yield TEHRAN — Iranian officials stepped up efforts to crush the remaining resistance to a disputed presidential election on Wednesday, as security forces overwhelmed a small group of protesters with brutal beatings, tear gas, and gunshots in the air. Intelligence agents shut down an office of the defeated presidential candidate, saying it was a “headquarters for a psychological war.”
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