Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Tues 12.01.2009
Warning on US muni market threat States need to consider permanent budgetary changes to close ballooning deficits or risk “significant cracks” in the municipal bond market, the lieutenant governor of New York said on Monday. Richard Ravitch said New York and other states have historically relied on temporary measures to balance budgets in downturns as a bridge to recovery, a strategy that is unsustainable. “If nothing changes, you will see significant cracks in the $3,000bn [municipal bond] market,” said Mr Ravitch, a long-time fixture in New York public office who served as an adviser to the governor during New York City’s financial crisis in the 1970s. He is now devising a four-year financial plan for New York state.
Democrats push new war tax After years of putting the cost of war on the nation's credit card, liberal members of Congress say the time has come to impose a new war tax and drive home to average Americans how expensive it is to keep fighting in Iraq and Afghanistan. The call for a tax on high-income earners, coming from top Democrats in the House and Senate, signals a deep level of concern in President Obama's own party about his plans to escalate the battle in Afghanistan.
An Empire at Risk We won the cold war and weathered 9/11. But now economic weakness is endangering our global power. Call it the fractal geometry of fiscal crisis. If you fly across the Atlantic on a clear day, you can look down and see the same phenomenon but on four entirely different scales. At one extreme there is tiny Iceland. Then there is little Ireland, followed by medium-size Britain. They're all a good deal smaller than the mighty United States. But in each case the economic crisis has taken the same form: a massive banking crisis, followed by an equally massive fiscal crisis as the government stepped in to bail out the private financial system.
Should Homeowners Be Able To Walk Away From Mortgage? Should homeowners who are behind in their mortgage be allowed to just walk way from the payments? A University of Arizona law professor suggests that maybe they should. While not recommending that homeowners forgo their responsibilities, Professor Brent White told CNBC Monday that there is a different set of rules for the business community and homeowners. "There's a double standard when it comes to banks and homeowners," said White. "Businesses often walk away from bad contracts, but homeowners can't. The banks need to modify bad loans."
The Catastrophic End of Market Manipulation . . . . This year we have witnessed first hand the problem with planned economies and free market manipulation. Tim Geithner, Lawrence Summers and Austan Goolsbee have tried to inflate a contracting economy by using massive manipulation and deception across all markets and have failed miserably. What they have done is further transferred the wealth of our nation from the poor and middle class to the rich bankers that caused the mess in the first place. What they will see very soon is the “blowback” from their market manipulation project with the total destruction of our global economic system. The Obama Administration Economic Team should be tried in court by a “jury of their peers” for the high crimes of Free Market Manipulation and may god have mercy on their souls.
The Collapse of America by excessive debt and hyperinflation - Gerald Celente, Marc Faber
Is Government Debt the Next Crisis to Strike? While American investors were busy enjoying their Thanksgiving dinners, global markets were shaken by word that Dubai asked for a payment holiday on the $59 billion it owes via its investment vehicle, Dubai World. The move, which comes as oversized bets on Persian Gulf real estate sour, was considered a default by the major rating agencies. Last week’s “standstill” request puts at risk up to $80 billion in debt linked to the emirate. While this is small in the context of the $3 trillion in losses written down by global banks since the credit crisis began, it may very well result in the largest country debt default since Argentina in 2002.
Precious Metals: Gold, silver buyers are increasing The head of a Delaware-based precious metals vault says he has seen unprecedented gold buying levels so far this year. Physical Gold Investment has been surging in 2009 as prices climb higher, with the World Gold Council revealing recently that demand grew by 11 percent on a quarterly basis in Q3. Now Bob Higgins, chief executive of First State Depository, has revealed that the number of people looking to use his facility - particularly first-time gold buyers - has been "off the charts".
Economic crisis keeps money flowing into gold A senior figure at Nihon Unicom says that gold prices should be able to resist even a major sell-off. With the yellow metal smashing records in recent weeks, some observers have predicted that the price could take a hit in the near future as investors look to cash in their profits. However, Hiroyuki Kikukawa, general manager at the Tokyo-based firm's market research department, explained that the economic crisis will keep money flowing into gold.
Gold price to remain $1,200 to $1,400 in December Despite gold’s big gains in recent weeks, it is not yet time to take profits. The above chart remains very bullish, so it is reasonable to forecast higher gold prices in the weeks ahead. Gold has clearly broken out from the huge base it formed over the past two years. This base is a ‘rocket pad’ that has launched gold, which I expect has the capacity over the next few weeks to climb into the $1200 to $1400 range I forecast for year-end, but it could be volatile. The $50+ trading range in gold this past Friday may be an indication that more volatility is coming.
Gold’s market-driven surge difficult to suppress Gold’s spectacular swoon on Friday provided fresh evidence that a red-hot bull market is in no imminent danger of cooling off. The initial plunge was orchestrated by bullion bankers and other promiscuous borrowers of gold when some unsettling financial news out of Dubai triggered a misbegotten panic into, of all things, dollars. Smelling blood, gold shorts pulled their bids when it looked as though the dollar was about to soar. Alas, the buck barely got off the launching pad before gravity re-asserted itself with a vengeance. The rally was so short-lived and feeble that it will have significantly diminished the dollar’s bizarre status as a “safe haven.”
Steadiness in gold and copper prices The announcement of a surprisingly large US trade deficit for September had some assuming the US consumer is back in a buying mood. Alas, the much watched Michigan consumer confidence index for November quickly followed, and it is off a large 4.6 points, from 70.6 in October to 66.0 now. The import gains were largely for crude oil, and there was some gain from the “declunkering” auto sector. Even in weak markets there will periods of restocking that have to be figured into single bits of data. Before Friday was done inventory levels for crude came out that were full enough to knock its price back from recent highs.
Gold steady near $1,180, uptrend intact Gold was mostly steady around $1,180 per ounce on Tuesday taking a break from a rally to record highs late last week, although the precious metal's appeal as a safe haven is expected to continue to attract buying. The yen fell against the dollar on Tuesday on news that the Bank of Japan would hold an extra policy meeting at 2 p.m., but the news only had a moderate impact on the gold market. The precious metal inched down as low as $1,175.50 after the news, but soon regained ground.
Gold steady, investors eye Dubai Tokyo - Gold was steady around $1,180 per ounce on Tuesday even as investors continued to watch for any fallout on financial markets from Dubai's loan payment troubles.
China should boost gold reserve holdings China should increase the amount of gold it holds in reserves to reduce potential losses from a depreciating dollar, the China Youth Daily said today, citing Ji Xiaonan, head of the supervisory committee at the state-owned Assets Supervision and Administration Commission. “We recommend China increase its gold reserves to 6,000 metric tons within three-to-five years and possibly to 10,000 tons in eight to 10 years,” the paper quoted Ji as saying. China increased its gold reserves by 76 percent to 1,054 tons since 2003, the official Xinhua News Agency reported in April.
China to buy IMF gold if price comes down Gold traded in a volatile 1.5% range early Monday in Asia and London, bouncing hard from a dip to $1165 as world stock markets unwound last week's gains and crude oil slipped below $76 per barrel. The "safe haven" US Dollar rose on the forex market, as did the Japanese Yen. Eurozone investors looking to Buy Gold saw the price retreat to a four-session low by the AM Gold Fix, down 1.1% from last week's all-time record Fix of €787.24 per ounce. Gold priced in British Pounds traded at £710 an ounce by lunchtime in London, some 2.3% below Friday's new record intra-day peak.
China may beat India in gold consumption China is showing an unending appetite for the yellow metal and its production is set to record a new high this year. According to newspaper reports, the country’s gold demand might be more than 450 tonnes this year, up from 395,6 tonnes last year, and output might climb to 310 tonnes, compared with 282 tonnes a year earlier. China overtook South Africa to become the world’s largest gold producer in 2007. The World Gold Council (WGC) said in July China might pass India as the biggest consumer. Bullion touched a record of 1195,13 /oz on Thursday as a weaker dollar drove demand.
China to increase gold reserves to 10,000 tons An official is quoted as saying China means to increase its gold reserves (last quoted at about 1054 tons) to 6000 tons in the next 3-5 years and perhaps 10,000 tons in the next 8-10 years. It also provides an unusually blunt statement regarding China’s low opinion of the U.S. dollar and other Western currencies. A professor at the central bank’s graduate school is quoted as saying, "Strictly speaking, almost half of our country’s foreign exchange reserve is not stable in value and is of high risk."
Gold: Will Dubai sandstorm hit bullion market? The Dubai-based financial sandstorm that roiled the markets late last week showed some signs of dissipating as the new trading week got underway. While the Dubai finance minister indicated that the emirate will not guarantee anything when it comes to local banks, such banks appeared to receive verbal support from Abu Dhabi. The UAE's stepping up to the plate to support institutions that have exposure to what was to be the ultimate amalgam of Disneyworld/Las Vegas ultimately led to a bounce in emerging market stocks and a resumption of the trend in the dollar and commodities.
'Dubai debt crisis will not hit gold prices' The Dubai debt crisis will have no impact on the gold prices. We at GJF had predicted one year ago that gold trading in Dubai will become a problem because there is much more gold trading happening in India and China, compared to Dubai. The government has signed an agreement with Asean countries to allow the transit of gold through these Asean countries at zero duties from 2012.
Gold Buyers Nip at Ultimate Emotional Experience Why is it no matter how much the world advances intellectually and technologically, people keep speculating on gold? John Neff, who managed Vanguard Group’s Windsor Fund for three decades, once offered this take on the precious metal: “It’s not an investment, it’s an emotional experience.”
John Paulson Hoarding More Gold Than Several Countries Combined John Paulson of Paulson & Co, the legendary hedge fund manager who made tens of billions betting on the mortgage crisis between 2007 to 2009, likes gold. He really likes it. He likes gold more than a friend. To most market participants, this is not news, but here’s something you probably didn’t know: Paulson owns more gold than several major countries! Combined!
China 2009 Gold Demand, Output May Gain to Records China, the world’s largest gold producer, may break records for both demand and output this year as jewelry consumption soars and miners expand production after prices reached all-time highs, the China Gold Association said. Gold demand may be more than 450 metric tons compared with 395.6 tons in 2008, and output may climb to 310 tons, compared with 282 tons a year earlier, Zhang Yongtao, deputy secretary- general of the association, said at a conference in Kunming yesterday. China’s gold production increased by an average 9.5 percent in the past eight years, he said.
China May Use Dubai Crisis to Purchase Gold, Oil, Daily Reports China may use Dubai World’s possible default as an opportunity to buy gold and oil with it foreign currency reserves, an official at the commission that oversees Chinese state-owned companies was cited as saying by a newspaper. The effects of Dubai World’s possible default may last some time, giving China an investment opportunity, Ji Xiaonan, head of the supervisory committee at the State-owned Assets Supervision and Administration Commission, was cited as saying by the Economic Information Daily.
A grudging acknowledgement of gold market manipulation Another important acknowledgement of manipulation of the gold and silver markets was published today -- and by a long-time disparager of suggestions of manipulation. The acknowledgement came from Robert J. Moriarty, proprietor of the excellent 321Gold.com Internet site. In a wide-ranging commentary headlined "Last Week Was a Top in Gold," Moriarty wrote: "Gold and silver are no more manipulated than any other commodity. The government thinks it's their job to manipulate currencies, interest rates, and probably the stock market as well. Why wouldn't they manipulate gold and silver as well? "But a fundamental belief in manipulation and conspiracy as being the prime mover behind the price of silver and gold is to say you don't believe in supply and demand. Sooner or later, supply and demand have to have some effect."
Hi ho silver, up and away Other white metal appears set for a gallop . . . . Here’s what I like about silver as a long-term investment instead of gold: it’s got the one-two punch. Not only is it a precious metal like its big brother, but the bulk of demand for silver actually comes from its industrial uses: batteries, dentistry and as an electricity conductor. Silver even has anti-bacterial qualities — which is why surgical equipment is often made with silver (and why 2000 years ago whenever a ship went on a long voyage they’d store water and food in silver vessels). It is the health features of silver that probably led to the various myths surrounding the metal (for instance, it takes a silver bullet to kill a vampire).
If the US Weakens Again, What Happens to Metals? . . . . If gold’s price gains are saying anything specific it’s that a strengthening Yuan could be harder on the Dollar than anything else. The broader message is however that the currencies dance winners won’t be known till the music stops. This is creating a market for the yellow metal as a neutral asset against all fiat currencies that we expect would largely be sustained even if the currency pairs roll over and the Dollar sees a gain. A consolidation of gold’s price on a large uptick for the greenback should still be expected, but gold holders would be as interested in the yellow metal’s value in their home currencies as in its trade against the Dollar, and that could steady its market. The Dollar has seen brief periods of strength in the past few sessions that have not led to anything like the gold selloffs expected by some. It’s also of note that gold is now quite close to record highs in several other currencies, including the Euro.
Madmen, Gamblers, Alcoholics, the US Dollar and Gold . . . . For every intervention in the free market, whether by government edict or monetary policy, there are unintended consequences. Government intervention in the US housing market, for example, intended to increase opportunities for home ownership among less successful members of society, played a key role in undermining lending standards. Combined with the Federal Reserve’s policy of low interest rates, which fueled speculation in real estate and mortgage backed securities, government intervention ultimately proved disastrous.
U.S. Dollar Set To Surprise by Falling to Test All Time Low The dollar ($) is set to surprise the few remaining speculators that think it can't happen by falling further straight away, possibly taking it down to test all time lows at 71. Here, we are talking about the possibility of a more disorderly decline in the $ developing as a result of gold progressing into a parabolic rise, primarily predicated on year-end hedge fund buying into December. First it will be this that takes precious metals higher into year-end, and then the rally could continue for numerous other reasons, not the least of which being a lack of physical, which appears to be a growing concern.
Run on the U.S. Dollar ....Soon Porter Stansberry writes: It's one of those numbers that's so unbelievable you have to actually think about it for a while... Within the next 12 months, the U.S. Treasury will have to refinance $2 trillion in short-term debt. And that's not counting any additional deficit spending, which is estimated to be around $1.5 trillion. Put the two numbers together. Then ask yourself, how in the world can the Treasury borrow $3.5 trillion in only one year? That's an amount equal to nearly 30% of our entire GDP. And we're the world's biggest economy. Where will the money come from?
Dollar May Fall as Emirates’ Bank Aid Renews Demand for Risk The dollar may extend its drop against most of its major counterparts as investors shifted to riskier assets on optimism creditors to Dubai World can absorb losses on the state-controlled holding company’s debt. The greenback posted its longest stretch of monthly declines versus the euro in almost five years as the United Arab Emirates’ monetary authority said on Nov. 29 it “stands behind” local and foreign banks. The dollar weakened versus the Canadian currency as a report showed U.S. business activity posted its first back-to-back expansion in more than a year.
Dollar May Return to Being ‘Under Seige,’ UniCredit Says The dollar may resume its decline as concern eases that the Dubai World crisis will escalate, UniCredit SpA said. “News that the United Arab Emirates central bank will back Dubai debt should convince markets that the Dubai crisis won’t spread,” analysts including Roberto Mialich in Milan wrote today in a report. “Expect more swings depending on stocks, but the dollar should ultimately return under siege.”
Worries that Dubai washing its hands of debt woes As investors look for reassurance, Dubai offers little, distancing itself from debt crunch If global investors were looking for reassurances from Dubai that it would stand behind its massive, debt-swamped investment conglomerate, they got none Monday. Instead, the Gulf city-state seemed to wash its hands of the financial woes that have rattled world markets. The muddled message from Dubai has fueled worries over a possible default by the conglomerate, which is involved in projects around the world -- from Gulf banks and ports in 50 countries to luxury retailer Barneys New York and a grandiose six-tower hotel-entertainment complex in Las Vegas.
Dubai rejects debt guarantee Dubai’s government will not guarantee the debts of Dubai World, the state-owned holding company struggling under the weight of $59bn (£36bn) in liabilities, arguing that lenders were mistaken to think that there was sovereign backing. Abdulrahman al-Saleh, department of finance chief, said that creditors were responsible for their own lending decisions and should differentiate between companies and the state. “Creditors need to take part of the responsibility for their decision to lend to the companies. They think Dubai World is part of the government, which is not correct,” Mr Saleh said.
Dubai Debt Fiasco Could Weigh on U.S. Banks A potential default by Dubai on debt payments could have a ripple effect on U.S. banks and the still-gloomy commercial real estate industry, some analysts say. Citigroup Inc. (NYSE: C) has $1.9 billion invested in the nation’s state-owned investment vehicle Dubai World, JPMorgan Chase & Co. (NYSE: JPM) said in a research note. While not directly affecting Citi or other major U.S. banks, the indirect effects could be more crippling on a broader scale, Rochdale Securities analyst Dick Bove told CNNMoney. “There could be huge indirect exposure,” Bove said. “One has to assume that U.S. banks will be hurt.”
The Lesson of Dubai: The Crisis Is Not Over As we reach the end of a miserable 2009, signs continue to mount across the globe that the world economy is stirring back to life. The U.S. finally returned to growth in the third quarter, with its strongest showing in two years, India posted inspiring 7.9% growth and the results out of tiny Taiwan, one of the economies slammed the hardest by the global recession, were so impressive one economist beamed that the island "got its groove on." Stock markets, aside from a downward blip here and there, have generally been buoyant. During this season of Thanksgiving and holiday cheer, there seems to be good reason to give thanks and be cheerful.
Dubai World over-reaction, Ben Bernanke Op Ed
Dubai World heavily invested in US hotels Dubai World debt woes could spell trouble for its high-profile US commercial properties Dubai World borrowed billions of dollars to acquire some of the most high-profile commercial developments in the United States in recent years, and it could be forced to sell them at a loss if the Persian Gulf conglomerate can't restructure its debts. Dubai World said last week it would seek a six-month delay in paying creditors on nearly $60 billion it owes. The desert emirate racked up the debt during its own real estate bubble that popped with the global recession.
Dubai's threat to U.S. banks Although there's little direct exposure to Dubai World's default risk, U.S. financial institutions could take major indirect hits. The news that the state-run investment company of Dubai requested a postponement of billions of dollars of debt this week could pose a big problem for U.S. banks. Dubai World owes about $60 billion. It rang up much of that in a building boom that included the world's tallest skyscraper and the Palm Islands in the Persian Gulf, settlements shaped like palm trees.
Dubai says not responsible for Dubai World debt The Dubai government said on Monday it was not responsible for the debts of Dubai World, dealing a blow to creditors' assumptions that the Arab emirate would guarantee the conglomerate's liabilities. "Creditors need to take part of the responsibility for their decision to lend to the companies," said Abdulrahman al-Saleh, director general of Dubai's Department of Finance. "They think Dubai World is part of the government, which is not correct."
Dubai World to Restructure $26 Billion of Debt Dubai World said it began “constructive” talks with banks to restructure $26 billion of debt, including liabilities owed by units Nakheel World and Limitless World. Debt from subsidiaries such as Infinity World Holding, Istithmar World and Ports & Free Zone World will be excluded from the negotiations because those companies “are on a stable financial footing,” Dubai World, one of the emirate’s three main state-related holding companies, said in a statement.
80% Chance Of A Market Crash Over The Next Year Fund manager John Hussman says he under-estimated how little investors have learned in the market crashes of recent years and thus has missed much of the market upside this year. But he's not changing his tune. And the market's current altitude, combined with crappy economic fundamentals, make Hussman put the odds of a crash and economic downturn over the next year at a startling 80%.
Fed moves to drain some money out of economy The Federal Reserve is taking steps to fine-tune a strategy to reel in some of the unprecedented amount of money that's been pumped into the U.S. economy during the financial crisis. The Federal Reserve Bank of New York said Monday that investors and others shouldn't read anything about the timing of when the central bank will need to reverse course and start boosting interest rates and removing other supports to fend off inflation.
After flooding economy, Fed to mop up money Central bank to test plan, warns that it will have no effect on rate policy The Federal Reserve is fine-tuning a strategy to reel in some of the unprecedented amount of money that's been pumped into the economy during the financial crisis. The Federal Reserve Bank of New York said Monday that investors and others shouldn't conclude anything about when the central bank will reverse course and start boosting interest rates and removing other supports to fend off inflation.
The Dangerous US Financial Sector Is Still Smoldering and May Reignite Timmy and the Merry Pranksters at the Treasury and the Fed are throwing taxpayer money at the financial sector with the same prudence with which Angelo Mozilo used sunblock. Smothered by paper, the fire in the financials is still smoldering, and could reignite with the breezes of further credit contractions in commercial real estate, mortgage foreclosures, and frothy debt in the developing world.
Bove: 26 Banks May Need To Raise More Capital The traders were closely monitoring the action in overseas banks on Monday after Dubai asked to postpone repaying billions of dollars in debt. However, many domestic banks traded higher after Goldman Sachs said Citigroup, Bank of America, JP Morgan and others US financials should avoid a major hit because they have a lot less direct exposure to Dubai than their European counter-parts.
Bove predicts 200-300 more bank failures Richard Bove of Rochdale Securities, who spoke at The Deal Economy 2010 Conference says that 200-300 more banks will fail in a year or a year and a half due to commercial and residential real estate loans. In this video Bove also adds that financial reform is headed in the wrong direction.
Controlling the Currencies It's no secret that emerging markets are the place for growth these days. Having not only survived, but thrived, post--financial crisis, nations from China to Indonesia have seen huge inflows of foreign investment in the last few months. While that's good news on many fronts, it also pushes up the value of local currencies, making exports less competitive and labor and other business costs higher, which could threaten growth.
China-U.S. Currency Fight Turns Nasty China rejected Monday the charge that it was keeping the yuan artificially low against the dollar, but rather blamed another "major economy" for keeping its own currency weak. China's trade minister Chen Deming didn't mention a specific country by name, but was widely understood to be referring to the United States. Many in the West blame Beijing for pegging the yuan at unfairly low rates to help exporters undersell foreign competitors in global markets. Critics say the currency control has aided China's rapid rise this decade as an export powerhouse, costing manufacturing companies and jobs in Europe and the United States.
In-Geithner-We-Trust Bond Market Gets Lowest Yield Less than a week after deflecting calls for his resignation, Timothy Geithner sold bonds on behalf of U.S. taxpayers at the lowest yields on record in a show of confidence in the Treasury Secretary’s policies. Even as the nation’s debt increased by $1.15 trillion this year to $6.95 trillion in October, the government’s interest expense under Geithner dropped 15 percent, the biggest decrease since before 1989, according to data compiled by Bloomberg. The Treasury auctioned $44 billion of two-year notes Nov. 23 at a yield of 0.802 percent, the lowest on record.
Geithner under fire Calls for Treasury Secretary's resignation from both right and left could hurt administration's influence in some key debates coming up on Capitol Hill. Despite recent calls for him to resign coming from both the right and the left, Treasury Secretary Tim Geithner isn't likely to lose his job. The bigger question is how much the recent criticism limits his ability to do his job. And that's an important question. Geithner will be in the lead in many issues about to break into the forefront for the Obama administration.
Federal Reserve tries theater ads to burnish its image Spots urging shoppers to use their credit cards wisely will be shown on big screens in 12 U.S. cities. The central bank has long been accused of neglecting its consumer protection duties. Reporting from Washington - The Federal Reserve isn't too popular these days, what with its failure to predict or prevent the financial crisis and recession, not to mention its involvement in last year's bailouts. Rep. Ron Paul (R-Texas) has a bestselling book out called "End the Fed," and some lawmakers are looking to cut back the central bank's power. It sounds like a perfect time for an ad campaign. The Fed has made a 45-second public service announcement to help consumers use their credit cards wisely. The spot will run before movie previews at theaters in 12 U.S. cities, including Long Beach, from Friday through Dec. 3.
Taxing Wall Street Today Wins Support for Keynes Idea John Maynard Keynes proposed a tax on financial transactions in the middle of the Great Depression, and another economist, James Tobin, revived the idea in the 1970s as a way to counter currency market speculation. Neither effort gained much acceptance. Now, a growing number of economists and politicians argue that it’s time for a levy on trading stocks, bonds, currencies and derivatives.
Fed's withdrawal from housing threatens growth The housing market has shown some encouraging signs of strength in recent months, but analysts caution that the market is mostly responding to powerful government stimulus measures and is not healthy enough to keep growing on its own after the withdrawal of federal aid. One major challenge: The Federal Reserve has said it would soon stop purchasing home mortgages after accumulating an unprecedented $1.25 trillion of them since January in an attempt to keep 30-year mortgage rates near or less than 5 percent.
NY Fed to Test Reverse Repos, Eventually Seen as Key to Exit Strategy The Federal Reserve Bank of New York said Monday it will implement “small scale” reverse repurchase agreement transactions “over coming weeks,” but it said the operations have no implication for monetary policy. “These forthcoming operations are being conducted to ensure operational readiness at the Federal Reserve, the triparty repo clearing banks, and the primary dealers,” the bank said in a statement. “The operations have been designed to have no material impact on the availability of reserves or on market rates,” it added.
U.S. Treasury to Push Lenders to Finish More Home Modifications The U.S. Treasury Department plans to intensify public pressure on lenders to finish modifying more home loans to troubled borrowers under a $75 billion campaign against the record tide of foreclosures. Almost 651,000 loan revisions had been started through the Obama administration’s Home Affordable Modification Program as of last month, from about 487,080 as of September, according to the Treasury. None of the trial modifications through October had been converted to permanent repayment plans, the Treasury data showed. That failure is getting the administration’s attention.
Bove on debt in the banking sector As the population of people at the age to buy a home decreased, banks started making subprime loans that were wrapped into newly created products like collateralized debt obligations, collateralized loan obligations, credit default swaps and mortgage-backed securities, which China bought up. As a result, by 2007, debt in the U.S. was growing three times faster than income growth. Thus, Bove concludes, the crash.
Lenders Face Sanctions for Failed Loan Modifications The U.S. Treasury Department will begin taking action against lenders that aren’t doing enough to ease mortgage payments for troubled homeowners as part of the Obama administration’s campaign to curb foreclosures. Lenders face “consequences” that may include sanctions and monetary penalties if they fail to perform under the Home Affordable Modification Program, the Treasury said. The $75 billion program requires banks that took federal aid to help homeowners at “imminent risk” of default by lengthening repayment terms, lowering interest rates and making other changes to the mortgages to avert foreclosure.
Why Black Friday Data Points To A Grim Holiday Season If you were counting on what Glenn Reynolds calls "the retail support brigade" to come riding over the hills, you might want to rethink. After last year turned in one of the worst holiday shopping seasons in decades, people were hoping that things might perk up this year, but Black Friday's results don't look too good for retailers. Sales were up a paltry 0.5% from last year, and that only because a lot more people came out bargain-hunting. Sales on the day after Thanksgiving rose just 0.5% to $10.66 billion, according to ShopperTrak RCT Corp., a research firm that monitors sales at more than 50,000 stores. That compared with a 3% year-over-year Black Friday increase in 2008 and an 8.3% surge in 2007.
Health Premiums Rise for 14 Million With Senate Bill Insurance premiums would jump as much as 13 percent for millions of Americans under a U.S. Senate proposal that Democrats have pitched as making care more affordable, a nonpartisan report found. The higher fees would be paid by the 14 million Americans who buy their own coverage and earn too much to get proposed subsidies, according to the report today from the Congressional Budget Office. Subsidies would lower costs for 18 million people. The 134 million people covered through large employers may see premiums hold steady or fall as much as 3 percent.
Health bills fail to block illegals from coverage Hundreds of thousands of illegal immigrants could receive health care coverage from their employers under the bills winding their way through Congress, despite President Obama's explicit pledge that illegal immigrants would not benefit. The House bill mandates, and the Senate bill strongly encourages, businesses to extend health care coverage to all employees. But the bills do not have exemptions to screen out illegal immigrants, who usually obtain jobs by using false identities and are indistinguishable from legal workers.
Sticker Shock at Pump: Gas Prices Poised to Soar The gap between what drivers are paying for gasoline compared with a year ago is widening and figures to get worse between now and the end of the year. Prices at the pump were $2.629 a gallon on Monday, 80.4 cents more a gallon than a year ago, according to auto club AAA, Wright Express and Oil Price Information Services. That is about $40 more a month for a typical motorist. The government releases its survey on retail prices late Monday.
Meet Al Gore at Copenhagen, for $1,209, snack included A fleeting few moments with a former vice president now goes for $1,209. "Meet Al Gore in Copenhagen." An official announcement from this fair Danish city says all: the former vice president is getting star treatment when he arrives with an entire swarm of green-minded gadflies for the United Nation's week-long global warming extravaganza that begins Dec. 7. "Have you ever shaken hands with an American vice president? If not, now is your chance. Meet Al Gore in Copenhagen during the UN Climate Change Conference," notes the Danish tourism commission, which is helping Mr. Gore promote "Our Choice: A Plan to Solve the Climate Crisis," his newest book about global warming in all its alarming modalities.
China's overdue credit-card debt reported rising sharply While China has the reputation in the West as a nation of frugal savers, a state-media report Tuesday cited another sharp rise in overdue credit-card accounts, highlighting a downside to the country's rapidly expanding economy. Credit-card debt at least six months overdue rose 126.5% for the first three quarters of 2009 compared to the same period last year, Xinhua news agency reported, citing People's Bank of China data. By the end of September, China's banks had issued 175 million credit cards, a 33.3% increase from last year, according to the report -- which said that the central bank has warned of potential risks of mounting overdue credit-card debt.
Venezuela closes four seized banks to public Venezuela’s socialist government has closed four private banks, a day after President Hugo Chávez said he would have “no problem” nationalising banks that failed to lend to the poor. Ali Rodriguez, finance minister, said the banks were “severely compromised”. The government seized control of them on November 20, citing insolvency, the questionable origin of funds and a failure to comply with regulations. “The negative performance of the banks makes their closed-door intervention necessary,” said Mr Rodriguez in a televised address on Monday. He said that two banks, Banco Provivienda and Banco Canarias, would be shut down indefinitely, while the two other banks, Banco Confederado and Bolivar Banco, could still be rescued.
Obama Issues Order for More Troops in Afghanistan The White House said Monday that President Obama had issued orders to send thousands of additional troops to Afghanistan, relaying his decision to military leaders late Sunday afternoon during a meeting in the Oval Office. Mr. Obama spent Monday telephoning his foreign counterparts — including the leaders of Britain, France and Russia — informing them of details that he will announce in a nationally televised address on Tuesday night from the United States Military Academy at West Point.
Press TV/On the edge with Max Keiser/11/27/2009-Part1
Press TV/On the edge with Max Keiser/11/27/2009/Part2
Press TV/On the edge with Max Keiser/11/27/2009/Part3
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