Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Tues 09.29.2009
Gold, silver inch higher, other commodities mixed Gold and silver prices have broken a three-day losing streak, rising slightly in quiet trading. Oil prices are higher, while soft commodities are mixed. Gold for December delivery is up $2.50 at $994.10 an ounce, while December silver is up 13.5 cents at $16.1950 an ounce. Higher prices are being supported by a rebound in stocks, analysts say, which rose amid news of two big acquisitions.
Gold Rises in New York as Dollar Erases Gains, Boosting Demand Gold rose for the first time in four sessions as the dollar erased earlier gains, increasing demand for the precious metal as an alternative investment. The U.S. Dollar Index, a six-currency gauge of the greenback's strength, was little changed after earlier advancing as much as 0.6 percent. Before today, gold gained 12 percent this year while the greenback lost 5.5 percent.
Gold Hit by Dollar, Yen Strength as Markets Fear Repeat of Fall '08 The PRICE OF GOLD bounced from its lowest level against the US Dollar in 13 sessions early on Monday, recovering last week's close at $992 an ounce by lunchtime in London and rising sharply against Euros and Sterling. European equities held flat but Asian shares finished the day sharply lower. The US Dollar jumped again on the forex market, outpaced only by the Japanese Yen, which reached an 8-month high on rumors the new Tokyo government may let the currency rise unhindered. Government bonds ticked lower. Crude oil slipped below $66 per barrel – more than 8% below last week's start.
Preserve Your Wealth with Precious Metals In this extraordinary environment, preserving your personal wealth becomes priority one. Before you make another major financial decision, it is imperative to understand the big picture by recognizing and understanding three critical issues. First, we are in a secular bear market for financial assets (stocks and bonds). Second, the consequences of the global bailouts will likely be highly inflationary. Third, we are at a pivotal point in the long-term investment cycle. Let’s examine each of these three keys in more detail.
A Few Facts about Silver and Gold Silver is less than 1/4 of its 1980 cost (nominal prices, not inflation adjusted). Is there anything else on the planet you can think of that is currently 1/4 of its 1980 price? Oh, and do they have the following attributes? Silver is an industrial metal and a monetary metal. 5,000 years of sound history as a measure of value and store of wealth, portable, fungible, divisible and unique.
Aristotle 384 - 322 BC - Qualities of good money
Durable: Money must stand the test of time and the elements. It must not fade, corrode, or change through time;
Portable: Good money needs to hold a high amount of 'worth' relative to its weight and size;
Divisible: Money should be relatively easy to separate and re-combine without affecting its fundamental characteristics. An extension of this idea is that the item should be "fungible", defined as "being freely exchangeable or replaceable, in whole or in part, for another of like nature or kind."
Intrinsically Valuable: This value of money should be independent of any other object and contained in the money itself, starting with rarity.
Gold was $850 in 1980 Everyone into Gold has heard it many times and some, like me, want to scream every time some mainstream financial analyst puts this comment into one of their articles or commentaries. It must be part of the Wall Street and financial planner training manual. It goes something like this, for those who haven't heard or seen it yet: "Gold was $850/ounce in 1980 and in 2009 it is only around $850/ounce. When you factor in inflation, if you bought Gold at the exact top of its previous bull market in 1980 at $850, this would have been a terrible long-term investment."
Will any central bank outside CBGA buy IMF gold? We have been waiting such a long time for clarity on how International Monetary Fund (IMF) is to conduct its gold sales of 403.63 tonnes, writes Julian Phillips of the Gold Forecaster. The IMF Executive Board has now approved those gold sales. Now the head of the IMF, Dominique Strauss-Kahn, has said "These sales will be conducted in a responsible and transparent manner that avoids disruption of the gold market.
The case for inflation -- and gold Top investors in precious metals are waiting for a pullback to buy, but they say gold looks like a promising inflation hedge well into the future. China is hungry for it, too. On a recent trip to New York, I had the opportunity to meet with my (very successful) metal trader friends and some other smart investors, as well as listen to a star-studded cast of brilliant thinkers/investors who shared their world views at the Grant's Interest Rate Observer fall conference. My metal trader friends all want to see a big flush in gold -- a fairly quick 5% to 8% price drop -- before piling in. But they say if the drop doesn't happen in the next week or so, it probably won't.
The Silver Shortage Will Come Based on the supply and demand situation of silver, it's only a question of time when a silver shortage will come. Nobody can predict exactly when this is going to happen, but we have more and more signs that those who control the price of silver are sweating to balance the supply. The biggest question I have is, will the shorts be successful to cover their short position on time? Right now the CFTC seems to want to force all the manipulators to get in line by making them obey new rules of position limits, but I feel that the banks who are the big shorts will be exempt. Mr. Butler thinks that the CFTC will do the right thing, but I am skeptical. We argue about this a lot, as we both have strong opinions.
What Causes a Depression? …how does it all work? We’re doing some serious thinking this week. What is it that actually causes a depression? A stock market collapse? Or too much debt? How come government can appear to cure the problem sometimes – 2001-2007 – but not other times? How come the Japanese were not able to increase consumer prices? Even now…Japan’s inflation rate is negative. And why is it, despite the most massive effort at monetary inflation ever undertaken, the US bond market still forecasts an inflation rate of less than 2%? An interview with Richard Koo, author of The Balance Sheet Recession, and a new book by Ken Rogoff and Carmen Reinhart are helping us understand what it going on. More to come… In the meantime, the Dow went down 42 points on Friday. Gold dropped $7. Still no sign of the Chinese coming to the rescue in the gold market. “Global rally shows signs of running out of steam,” says The Financial Times.
From Deflation to Inflation Step by step, with little fanfare and great complacency, we are witnessing a fundamental, global shift that's rapidly transforming the investment scene: The forces of deflation are temporarily receding; and in the meantime, the forces of inflation threaten to roar back with a vengeance. They are everywhere. They could be overwhelming. They must NOT be ignored …
Obama Stock Rally Persists on $3.5 Trillion in Money Market Fund Hoarding Americans holding $3.5 trillion in cash are giving money managers increasing confidence that the stock market rally under President Barack Obama will continue through the end of the year. Even after reducing money-market accounts by 11 percent this year, investors have cash equal to 73 percent of Standard & Poor's 500 Index companies' net assets, according to data compiled by the Investment Company Institute and Bloomberg. At the peak of the bull market in 2007, the measure of buying power was 62 percent.
Trichet Says Strong Dollar Is 'Extremely Important' European Central Bank President Jean-Claude Trichet said a strong dollar is "extremely important" for the world economy and it's too early for the ECB to unwind emergency stimulus measures. "In the present situation it is extremely important that we can have in the framework at the level of global finance and the global economy a strong dollar, as the authorities in the U.S. are saying," Trichet told lawmakers in Brussels today. "The solidity of the dollar is very important."
Living, Dying by Currencies Is No Way to Succeed Less than two weeks into the job, Hirohisa Fujii is annoying corporate Japan. It's a good thing. Japan's new finance minister doesn't support a weak yen. In the currency world, with its winks, nods and secret handshakes, that's tantamount to appropriating former U.S. Treasury Secretary Robert Rubin's strong-dollar policy. Fujii's view is the right one for Japan's future. Asia's, too.
Zoellick Says U.S. Dollar's Primacy Not a Certainty World Bank President Robert Zoellick said the U.S. shouldn't take for granted the dollar's status as the world's main reserve currency. In remarks set for delivery tomorrow, Zoellick said the "next upheaval" in the international economic order is under way as emerging nations gain greater influence. "The United States would be mistaken to take for granted the dollar's place as the world's predominant reserve currency," according to excerpts released by the World Bank.
Bernanke’s Grand Strategy to Let the U.S. Dollar Fall By now it should be abundantly clear to you that my warnings are coming to pass. Gold is acting firm, having made a new 12-month high above $1,000 an ounce, and within a whisker of a new record high. And while it might not fully blast off yet, in time, it will — to well over $2,000 an ounce … then even higher to $3,000 … and ultimately, probably by the middle of the next decade, even to $5,000. Meanwhile, the U.S. dollar has sunk to a new 12-month low and is a mere 7 percent above its record low reached in July 2008. It won’t take much for the dollar to start plunging, almost out of control. A brief rally here and there, yes. But the long-term trend for the dollar is down, down, DOWN.
Schiff: Dollar is the New Peso The U.S. dollar will continue weakening, and investors may borrow it to invest in higher-yielding assets, says Peter Schiff, president of Euro Pacific Capital. I don't know when (the dollar) is going to strengthen, Schiff told CNBC. The dollar isn't the new yen, its unfortunately the new peso. A weak dollar and low U.S. interest rates push the greenback toward becoming a carry trade currency, which, like the yen for many years, attracts investors to borrow it cheaply to invest elsewhere.
Roubini: No Plausible Alternative to Dollar Former Clinton White House senior economist Nouriel Roubini opines that there is a global liquidity crisis, but since all plausible alternatives to the U.S. dollar lack liquidity, creditors like China and Japan are still willing to furnish financing for U.S. federal debt. As the G-20 prepared to meet in Pittsburgh last week to discuss the global economy, Roubini wrote in Forbes that it is unlikely Americas creditors will raise many hackles for now. G-20 leaders will probably avoid making specific reference to individual currencies, and will particularly avoid references to the U.S. dollar, Roubini wrote.
The dollar is dead - long live the renminbi Whatever happens at the G20, the days of Western dominance are at an end, says Jeremy Warner. Sometimes it takes a crisis to restore reason and equilibrium to the world, and so it is with the trade and capital imbalances that were arguably the root cause of the financial collapse of the past two years. To economic purists, the changes now under way in demand and trade are inevitable, necessary and even desirable. Even so, dollar supremacy and the geo-political dominance of the West are both likely long-term casualties. One, almost unnoticed, effect of the downturn is that past imbalances in trade and capital flows are correcting themselves of their own volition, the simple consequence of lower demand in once profligate consumer nations.
The Real Reasons Behind Fed Secrecy by Ron Paul Last week I was very pleased that the Financial Services Committee held a hearing on the Federal Reserve Transparency Act, HR 1207. The bill has 295 cosponsors and there is also strong support for the companion bill in the Senate. This hearing was a major step forward in getting the bill passed. I was pleased that the hearing was well-attended, especially considering that it was held on a Friday at nine o’clock in the morning! I have been talking about the immense, unchecked power of the Federal Reserve for many years, while the attention of Congress was always on other things. It was gratifying to see my colleagues asking probing questions and demonstrating genuine concern about this important issue as well.
Dollar crashes against yen! Just when the worldwide onslaught against the U.S. dollar seemed to be temporarily subsiding, a new round of attacks hit Friday - this time from Japan. On August 30, in a landslide election victory that shook the world, the left-of-center Democratic Party of Japan derailed the ruling party and swept a new leader to power, Yukio Hatoyama. It was the most significant tipping point in that country's politics since 1955. Now, 30 days later, we are starting to see the repercussions for the U.S. dollar: For the first time in decades, the new Japanese regime is effectively giving up supporting the greenback in the currency markets!
China and Japan Control U.S. Solvency The United States could be in for a major crisis if China and Japan lose their appetite for our government debt, hedge fund legend Julian Robertson says. "It's almost Armageddon if the Japanese and Chinese don't buy our debt, The founder and chairman of Tiger Management told CNBC. "I don't know where we could get the money. I think we've let ourselves get in a terrible situation, and I think we ought to try and get out of it." Together, Japan and China hold a whopping $1.52 trillion of Treasuries. They are financing a U.S. budget deficit that may reach $2 trillion this year.
Chinese Spending Puts Treasuries in Danger China may soon begin importing more than it exports thanks to rising income levels and government stimulus programs. That, says one economist, may mean bad news for U.S. Treasuries and ultimately, higher interest rates. If China saves much less and spends more as a nation, it has less money to buy U.S. Treasuries, which would force up rates and make borrowing more expensive here.
THE GREAT CHINA CONUNDRUM Probably the biggest “X-factor” in the ongoing effort at reviving the global economy is China. China is seen by many as the world’s emerging industrial powerhouse and its relationship with the United States is considered to be crucial for its own development, as well as for the strength of the world economy. With the U.S. in the role as the world’s premier consumer and China considered to be the major industrial player, all eyes are on the respective economies of these two great nations.
Debt, the Rogue Elephant In Our Living Room What does “unsustainable” mean and look like with respect to our economy. Most of the public media (bubblevision), experts, pundits, economists, academics and elected officials don’t know economic history or choose to ignore it. I do believe the American people should understand these things and they aren’t taught in most universities. We need to keep our eye on the ball here and pay attention to what is being done, not what is being said. “Talk doesn’t cook rice” – Chinese proverb. This IS the elephant in our living room.
Treasuries Little Changed on Inflation, Interest-Rate Outlook Treasuries were little changed as investors speculated Federal Reserve officials will signal interest rates will remain at record-low levels for the foreseeable future as inflation remains subdued. Ten-year yields held within three basis points of the lowest level in more than two weeks before government reports this week that may show the unemployment rate increased in September and gross domestic product shrank last quarter at a faster pace than previously estimated. Treasuries rose the most in a month last week after policy makers said weakness in the economy is "likely to continue to dampen cost pressures." There will be seven speeches by Fed officials this week.
Fed Members Walk Fine Line on Economy Remarks The Federal Reserve's high-wire act in easing the extraordinary support it has provided the economy was on display Friday. Fed Chairman Ben Bernanke said a key consumer lending program is still needed, while one of his colleagues talked about acting forcefully when the time comes to boost interest rates. Fed member Kevin Warsh's comments that the central bank can't wait for the economy to return to normal before embarking on a rate-raising campaign to fend off inflation rattled some investors.
Negative Bond Returns Converge With Mortgage Miracle Federal Reserve Chairman Ben S. Bernanke has some good news for investors: Treasury bondholders will lose money for the first time in 10 years amid an unprecedented decline in the gap between the interest rate on 30-year mortgages and government notes, signaling an end to the worst financial crisis since the Great Depression. Yields on benchmark 10-year notes will end the year little changed at 3.36 percent before rising to 3.65 percent by mid- 2010 as bond prices fall, according to the average estimate in a Bloomberg News survey of JPMorgan Chase & Co., Goldman Sachs Group Inc. and the rest of the 18 primary dealers that trade Treasuries directly with the central bank.
The Global Carry Trade and the Crimes of Patriots Our trip to Chicago last week to participate in "The International Financial Crisis" conference sponsored by the Federal Reserve Bank of Chicago and the World Bank was instructive in several ways. First and foremost, it confirmed that the US economics profession is still trying to defend the old ways and means in terms of analytical methods for bank safety and soundness. While there were many calls for "reform" of regulation, we heard nary a suggestion that the mish-mash of quantitative methods that currently comprise the framework for assessing the safety and soundness of banks needs to be set aside and a new approach defined. Indeed, the foreign participants in the two-days of presentations seem to be far more advanced in their thinking about bank safety and soundness than their counterparts from the US.
Trade Wars Guarantee An End To The Party On one side of the formula we have the continued need for speed in monetary creation by whatever means, capably characterized by Doug Noland in his weekly commentary explaining that while it will all end badly, government largesse will likely get out of control before its all over. The point he is getting at here is that because of all it’s meddling, the government (and us) is locked in an inflation death grip it necessarily needs to keep building on or face implosion. So in essence, Doug is alluding to the risk of hyperinflation, or the closest we will ever come to it on a macro-scale. And he is perfectly correct in this accounting of our dire circumstances, and the eventual disastrous effects of all this government intervention to keep the bailout finance bubble growing. One day this thing is going to pop, like all bubbles do, and it will be game over for the global economy, US Dollar ($) hegemony, runaway socialism, and unchecked fiat currency regimes.
Volcker: Obama Financial Reform Plan Too Risky Former Federal Reserve Chairman Paul Volcker isn't too happy with the White Houses proposal for financial regulation reform because it retains the too big to fail doctrine. The Obama administration plans to subject systemically important financial firms to more stringent regulation by the Fed. In testimony before Congress, Volcker pointed out that this idea implies the government will be prepared to bail out the firms in a crisis, encouraging even more risky behavior in a phenomenon known as moral hazard.
Rally in 'toxic' securities set to boost banks The recent rally in the markets for "toxic" securities could deliver a significant boost to US banks' third-quarter earnings if financial groups decide to book accounting gains on assets that caused them billions of dollars in losses during the crisis. Wall Street executives and analysts say the significant rise in the price of mortgage-backed securities and other once-battered debt offers banks the first meaningful chance to "write up" some of the value of these distressed assets.
G-20 Plans to End 'Financial Balance of Terror' After Summit President Barack Obama and fellow Group of 20 leaders are trying to end what Obama adviser Lawrence Summers has called the "financial balance of terror." World leaders, meeting in Pittsburgh last week, adopted a framework for more durable economic growth as they sought to prevent a replay of the worst crisis since the Great Depression. They also acknowledged the growing clout of China and other emerging economies by giving them a bigger voice in decision- making.
Dobbs & Panel On The New World Order In Relation To The G20
G20 sets up long struggle over bank capital rules The long fight over bank capital standards can begin now that the G20 speeches are done, with U.S. and French industry lobbyists already digging in. In a struggle that will unfold at least through 2012, bankers will grapple with national authorities working to implement G20 goals set last week by leaders in Pittsburgh.
The Government is the Mortgage Market It’s time to ask ourselves a collective question; what have we learned from the economic chaos caused by a collapsing real estate market, which was itself caused by government intervention and easy credit? The answer is unfortunately, an emphatic nothing! Rather than let the market dictate the appropriate price level of real estate, our government is seeking to re-inflate the bubble, only this time with fire and hydrogen instead of just hot air.
Federal Reserve Buys More Than 100% of Mortgages Issued in 2009 This is important information. What I've found and present below is that the Federal Reserve is not just supporting the housing market, it is the housing market. Just as important as a person's desire to buy a home is their ability to gain access to mortgage funding. The mortgage market is a gigantic beast with many moving parts, but it is pretty easy to understand from a high level. The process works like this: A homeowner secures a mortgage from a bank or mortgage company. Then the mortgage is sold off to another company, with the cash generated by that sale now available to lend to other potential homeowners. Ultimately the mortgage may pass through several sets of hands but ultimately it lands with a terminal holder.
Why U.S. Treasury Should Loan TARP to FDIC Bank Failure Friday, Lagging Home Sales, Should the TARP be Rolled Up, and Tracking the Charts for the S&P 500 Only one bank failure on Bank Failure Friday brings the total to 50 in the third quarter, Georgian Bank became the 95th bank failure in 2009 bringing the total to 120 since “The Great Credit Crunch” began at the end of 2007. Like almost all bank failures this $2 billion private bank had overexposures to C&D and CRE loans with risk to capital ratios of 559% and 741% versus the ignored regulatory guidelines of 100% and 300%. I estimate that the FDIC’s Deposit Insurance Fund is in arrears by $4.6 billion. Existing and New Home Sales are running out of stimulus
freddie mac delinquency rate hits record high The delinquency rate on single-family homes hit a record high 3.13 percent last month at mortgage financier Freddie Mac. That’s up from 2.95 percent in July and roughly 200 percent higher than the 1.11 percent delinquency rate seen in August 2008, shortly before the company was placed into government conservatorship. The delinquency rate is based on loans that are at least 90 days past due or somewhere in the foreclosure process.
Is Arthur Laffer Setting Up Another Debt Bomb? Arthur Laffer, the primary architect of Reagan’s debt bomb that we are currently trying to defuse, has now executed a complete 180° turn from his monetary policies that gutted the Midwest industrial base in the 1980s. In a WSJ article on September 22, 2009, he claims the problems of the Great Depression are not caused primarily by tight monetary policy but rather tariffs and taxes. While he gets the facts he mentions right, he ignores the timing of taxes and deficits, tariffs and balance of trade.
Economic engine Railroads planning for economy to get back on track Rows of locomotives are still parked at Union Pacific Railroad's Davidson Rail Yard under the Hulen Street bridge in Fort Worth, waiting for the company's shipping volume to go back to pre-recession levels. Both Union Pacific and Burlington Northern Santa Fe Railway have seen shipping volumes and demand drop during the last year, with Burlington Northern continuing to see flat and dropping volume numbers, and Union Pacific seeing slight increases in some types of goods. Because of the recession, Union Pacific currently has 4,500 employees furloughed, 54,000 rail cars waiting in storage, and 1,850 locomotives parked, said Clint
IMF Says Loan Recipients Face Slow Recovery and High Risks The International Monetary Fund said that as many as 20 countries getting loan support from the Washington-based lender will probably face a slow economic recovery as fiscal challenges arise in the years ahead. The IMF, which has rescued economies from Pakistan to Iceland since the start of the global financial crisis, said in a report today that, while there are signs of stabilization in troubled countries, many loan recipients may need assistance beyond their current arrangements. The fund singled out Latvia, Iceland and Ukraine as facing the greatest difficulties.
No Retirement All the scaredy-cats are trembling in their shoes this week as gold dipped below the $1,000 level. Foolish people. Can’t they see that the U.S. dollar is in free fall? We told subscribers this on August 3, when the U.S. dollar index broke 78.20, thus completing a double top. That double top is now working out its implications, and the dollar bulls are taking it on the chin. As the dollar goes down, gold will go up. All those people who took part in the flew to “safety” got things a little bit wrong. Instead of taking part in a flight to safety, they have taken part in a flight from their senses. I would like to say that they will wake up after this is over poorer but wiser. However, that is not what happened in the 1970s. In the ‘70s, those people who followed the establishment woke up at the end of the decade a lot poorer than they had been but every bit as stupid.
Tight lending environment expected to continue The commercial real estate industry should be prepared to further weather the current economic storm for the coming six to 18 months as loans continue to mature in an ever-tightening lending atmosphere - at least according to one local expert. Ben Loughry, managing partner at Integra Realty Resources, gave his mid-year status report on the nation and the Dallas-Fort Worth area at the Sept. 23 Society of Commercial Realtors monthly breakfast. While Loughry said Texas has been fortunate to avoid market plummets to the degree of some U.S. regions, the Lone Star State is beginning to feel the pinch.
$35 Billion Slated for Local Housing The Obama administration is close to committing as much as $35 billion to help beleaguered state and local housing agencies continue to provide mortgages to low- and moderate-income families, according to administration officials. The move would further cement the government's role in propping up the housing market even as some lawmakers push to curb spending at a time of rising debt. The effort, which could be announced as early as this week, is aimed at relieving pressure on government-operated housing finance agencies, which have been struggling to find funding amid the downturn. These agencies, or HFAs, are a small part of the housing market but are critical to many first-time and low-income home buyers, who can get lower-rate mortgages through an HFA than they could through a private-sector lender. Rates are typically 0.5 to one percentage point lower than commercial lenders.
Unprecedented U.S. corporate default seen for '09 U.S. corporate debt default rates are expected to hit "unprecedented" levels in 2009, even though the economy may be past the halfway mark of the U.S. recession, according to a forecast unveiled on Monday at the Reuters Restructuring Summit."There is a lot of pain left - we are only just half way through the 600 or so defaults in this cycle," said Phil Kleweno, a partner at Bain's corporate renewal group.
For more, 'affordable' isn't so Tight credit is hurting those looking to move into or build lower-cost housing, even as demand rises It's never been easy building new homes affordable to people with moderate incomes, but selling them - that's usually a snap. Which is why no one at a Baltimore nonprofit that finished eight townhouses in December expected they'd still be sitting empty today. Demand isn't the problem. It's the credit crunch. With home prices and apartment rents both falling nationwide, it might seem like a good time to get more people into residences that don't overwhelm their monthly budgets. But affordable-housing activists say the reality is just the opposite.
Unemployment Confronts Obama Rhetoric With Chronic Joblessness Full employment ain't what it used to be. Economists since the mid-1990s have reckoned that full employment was equivalent to about a 5 percent unemployment rate, taking into account the time required to switch jobs. Now Nobel Prize winner Edmund Phelps and Pacific Investment Management Co. Chief Executive Officer Mohamed El-Erian say the fallout from the deepest recession in more than five decades is driving the so-called natural rate higher, perhaps to 7 percent.
Insurer Sales Decline Matches Biggest in 22 Years U.S. property and casualty insurers posted a 4.8 percent sales decline in the second quarter, matching the biggest drop in at least 22 years, on rising unemployment and reduced demand for coverage. The value of coverage sold, called written premiums, fell to $106.3 billion in the three months ended June 30 from $111.7 billion in the same period a year earlier, Insurance Services Offices Inc. said in a study today.
Health care in America: Ron Paul vs. Howard Dean As the health care debate in the U.S. heats up, RT's Dina Gusovsky speaks to Democrat Howard Dean and Republican Ron Paul to get a sense of where they stand in the health care battle. Both are doctors, both politicians, and both think they know how to fix health care. But what do the American people really want?
Health care: Insurance regulators rule Healthcare overhaul legislation moving through the Senate Finance Committee would put crucial rule-making authority in the hands of a private association of state insurance commissioners that consumer advocates fear is too closely tied to the industry. The National Assn. of Insurance Commissioners currently writes model laws and regulations that individual states are free to accept or discard. Under the bill by Sen. Max Baucus (D-Mont.), it would craft a model rule governing "health insurance rating, issuance and marketing requirements" that would become "the new federal minimum standard without any further congressional action." States would be permitted to deviate from the standards only by appealing to the Department of Health and Human Services.
Push for new Kan. transport plan to be renewed Backers of a new transportation program in Kansas have relaunched their campaign to get it passed with a report warning of approaching problems in the state's highway system. Topeka-based Economic Lifelines held a news conference Monday to highlight the findings in a new report by a national nonprofit groups. The report says Kansas will fall $6.4 billion short of funding its highway system's needs over the next decade.
Michigan Faces Another Government Shutdown Economically beleaguered Michigan faces a possible government shutdown shuttering highway rest areas, state parks, construction projects and the state lottery if lawmakers fail to reach a budget deal in the next few days. The state with the nation's highest unemployment rate has a nearly $3 billion shortfall. Federal recovery act money will fill more than half the gap, but the spending cuts or tax increases needed to fill the rest have caused bitter infighting at the state Capitol.
Whitman Seeks to Slash California Spending Republican gubernatorial candidate Meg Whitman sought to redirect attention from her spotty voting record Saturday as she promoted a platform of fiscal discipline to the party faithful. Speaking to the state Republican Party convention near Palm Springs, the billionaire former CEO of the online auction company eBay Inc. outlined a program of severe austerity for state government if she is elected next year.
Merkel warns on spending cuts, fearing Depression era The era of cosy consensus in German politics is over. The election victor is arch-Thatcherite Guido Westerwelle, who led his pro-business Free Democrats to their best result ever with acerbic attacks on the welfare state and trade unions – which he called a "plague on our country". The era of cosy consensus in German politics is over. The election victor is arch-Thatcherite Guido Westerwelle, who led his pro-business Free Democrats to their best result ever with acerbic attacks on the welfare state and trade unions – which he called a "plague on our country". Chancellor Angela Merkel's Christian Democrats and Bavarian allies survived the vote with a clipped mandate. She will have to give ground to Mr Westerwelle in the Centre-Right coalition as he presses for his great shrinkage of Germany's Leviathan state – tax cuts, spending cuts, subsidy cuts, labour reform, and emasculation of the state Landesbanken – whatever her own preference for playing the consensual role of national "Mutti" (Mum).
Iran flexes muscle ahead of talks with major powers Iran test-fired missiles on Monday which a commander said could reach any regional target, flexing its military muscle before crucial talks this week with major powers worried about Tehran's nuclear ambitions. The missile drills of the elite Revolutionary Guards coincide with escalating tension in Iran's nuclear dispute with the West, after last week's disclosure by Tehran that it is building a second uranium enrichment plant.
Iran tests most advanced missiles Iran tested its most advanced missiles Monday to cap two days of war games, raising more international concern and stronger pressure to quickly come clean on the newly revealed nuclear site Tehran was secretly constructing. State television said the powerful Revolutionary Guard, which controls Iran's missile program, successfully tested upgraded versions of the medium-range Shahab-3 and Sajjil missiles. Both can carry warheads and reach up to 1,200 miles (2,000 kilometers), putting Israel, U.S. military bases in the Middle East, and parts of Europe within striking distance.
China May Hamper Western Efforts to Increase Pressure on Tehran China has expressed concern about Iran's disclosure that it is building a second uranium enrichment plant. The country urged, however, that an escalating row be resolved by talks, as Western nations try to increase pressure on Tehran. China has long said it sticks to a doctrine of "non interference" in the affairs of other nations, partly because it does not want the United States or Europe criticizing its behavior or policies.
China and Russia Undermining U.S. Power The giants of the East are positioned to upset U.S. sanctions on Iran by supplying Tehran with gasoline. U.S.-led fuel sanctions on Iran are being undermined by China and Russia. Chinese companies are already selling gasoline to Iran, and Russia is poised to follow suit. Because Russia has so often thwarted sanctions on Iran in the United Nations Security Council, the U.S. has been forced to get more creative. In anticipation of Iran's refusal to enter into talks about its nuclear program, the United States has developed a sanctions plan that bypasses the UN.
pt 1/2 Gerald Celente on Freedom watch with Judge Napolitano
pt 2/2 Gerald Celente on Freedom watch with Judge Napolitano
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