Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Fri 05.01.2009
A Letter from the Future by Richard Heinberg Greetings to you, people of the year 2009! You are living in the year of my birth; I am one hundred years old now, writing to you from the year 2109. I am using the last remnants of the advanced physics that scientists developed during your era, in order to send this electronic message back in time to one of your computer networks. I hope that you receive it, and that it will give you reason to pause and reflect on your world and what actions to take with regard to it.
Of myself I shall say only what it is necessary to say: I am a survivor. I have been extremely fortunate on many occasions and in many ways, and I regard it as something of a miracle that I am here to compose this message. I have spent much of my life attempting to pursue the career of historian, but circumstances have compelled me also to learn and practice the skills of farmer, forager, guerrilla fighter, engineer - and now physicist. My life has been long and eventful . . . but that is not what I have gone to so much trouble to convey to you. It is what I have witnessed during this past century that I feel compelled to tell you by these extraordinary means.
You are living at the end of an era. Perhaps you cannot understand that. I hope that, by the time you have finished reading this letter, you will.
Gold Consolidation Nears End The battle for survival continues, as banks resorted to basic revisionist accounting (aka fraud) in order to claim improved health. Their reward was a financial sector stock rally of the most queer kind. The rally depended on all manner of contrived demand from the most sordid of chambers opposed to free markets, using tactics that are typically abhorrent. Next this beleaguered sector must withstand valuation checks and fair value scrutiny. Unless analyst dissent is declared illegal, the sector should fall in value. The new facade of Stress Tests has filled the void left by Financial Accounting Standards Board (FASB) concessions that led to phony balance sheets. These Stress Tests are neither a test nor a reflection of stress. They are rigged excuses for continued funds, and worse, might be used to coerce healthier regional banks into merging with dead Wall Street banks laced with insolvency and fraud.
How Gold Will Top $2,000 Per Ounce You no longer have to be a gold bug to think gold will rise in price. In fact, this buying by some of the world's greatest investors may be the leading indicator for a quick 116% climb - to $2,000 per ounce or higher. Give gold the cold stare of a professional handicapper and the odds look very good, indeed.
Sell Bonds and Buy Gold . . . . Governments all over the world are about to flood the bond markets with paper to finance their bank bailouts and economic stimulus plans, and the final bill could amount to more than $6 trillion on some estimates and very much higher for a full derivatives rescue plan. In effect the governments are about to need to raise the funds to fight another Napoleon. This massive new supply of bonds will depress the price of existing bonds, and indeed this is evident in the recent fall in 10-year bond prices and their rising yield. Inflation of the money supply we also know to be a natural enemy of bonds which pay a fixed coupon and are thus extremely sensitive to any rise of inflation that will swiftly erode the coupon, and even make it negative in real terms. And we know governments all over the world have embarked on massive money creation. This can not be good news for bonds, although in the short term the brief return of deflation will help them.
China Stockpiles the "Perfect Money" I was amused by the Reuters headline "China Admits to Building Up Stockpile of Gold" - although it kind of took me by surprise that they bought about 600 tons of gold without telling anyone since 2003, growing their stash by 75% since then. I eagerly scanned the article to see where it says that they bought the gold, to paraphrase, "Thanks to the good advice of Running Dog Yankee Imperialist Mogambo (RDYIM), who showed us the genius of the Austrian school of economics, and told us to buy as much gold as we can get our hands on because without gold as a backing for a currency, the yuan will be just another stupid fiat currency dancing to the inflationary tune of the government, which always wants to spend too much, like the U.S. and all the other stupid fiat-currency countries in the world nowadays, because a stupid fiat currency allows it to happen, ruining everything and we look like a bunch of chumps instead of venerated elders.
The Bullish Case for Silver After dropping almost 60% from its March 2008 peak of $21/ounce, silver appears to be on the rebound: Silver gained 24% back in the first quarter of 2009. With a track record of strong performance during economic crises, silver seems particularly well poised to weather the current storm, especially the impending threat of inflation. Even our own Brad Zigler pointed out the potential staying power of the silver rally way back in February. But if silver has so much potential, why is it still so hush-hush among investors?
"Devil of Deflation Will Snuff Out Gold," Minyanville's Harrison Says With the Fed pulling out all stops to fight the financial crisis, the "spectre of inflation" is driving the financial markets currently, says Todd Harrison CEO of Minyanville.com. The Fed is keeping the printing press on overdrive and fear that will lead to runaway inflation has helped propel the recent stock market rally, kept a bid in gold prices and put upward pressure on Treasury rates despite the Fed's efforts to keep them down. But "without the velocity of money and with the demand destruction [that's occurring] it's going to be hard for inflation to catch its footing," says Harrison.
Stress Tests are Not Stressful Enough Last week, when the U.S. Treasury unveiled the basics of their lender "stress tests", the Fed concluded that "most U.S. banking organizations currently have capital levels well in excess of the amounts required to be well capitalized." Simultaneously, they also claimed that the banks needed more capital. Apparently the Fed has little understanding of irony. Why would our central bankers conclude that "well capitalized" banks need "more capital?" Quite possibly, they believe, as I do, that the rosy economic assumptions that form the basis of the "stress tests" may be far too optimistic. I believe that neither the Fed nor the Treasury have any will to paint a clear picture of our financial turmoil. But that won't stop them from operating under those assumptions. A brief examination of the stress test assumptions shows why the Fed should be hedging their bets.
Why Congress Won't Investigate Wall Street - $$ Republicans and Democrats would find themselves in the hot seat. The famous Pecora Commission of 1933 and 1934 was one of the most successful congressional investigations of all time, an instance when oversight worked exactly as it should. The subject was the massively corrupt investment practices of the 1920s. In the course of its investigation, the Senate Banking Committee, which brought on as its counsel a former New York assistant district attorney named Ferdinand Pecora, heard testimony from the lords of finance that cemented public suspicion of Wall Street. Along the way, the investigations formed the rationale for the Glass-Steagall Act, the Securities Exchange Act, and other financial regulations of the Roosevelt era.
Pearls Before Swine - Perils of Free Money The swine flu could not have come at a worse time. Just when there were signs of a nascent recovery, confidence takes another hit. As a result, "reflation trades" may be put on ice if investors revert to "panic mode" again. While it is difficult to assess the full economic impact of the swine flu, we believe some of the dynamics are foreshadowed. This flu may reinforce long-term trends and provide an opportunity for investors to position themselves accordingly.
Both Boom and Gloom are Risky From Here We seem to be at an interesting juncture in market psychology. The long always cheerleaders are still out in full force, urging everyone to buy, buy, buy. But they always say that, so we have learned to filter out the noise of perpetual optimism. At the other end of the spectrum there is now a famous club of "bear" commentators who called the downturn a couple of years ago and are now continuing to receive significant media attention with dire predictions of untold doom yet to come.
MBIA Sues Merrill Lynch Over Subprime-Debt Protection MBIA Inc., the largest bond insurer, said two of its units sued two Merrill Lynch & Co. businesses now owned by Bank of America Corp. over protection sold against mortgage-debt defaults. The suit, filed in New York State Supreme Court, seeks to unwind or recover payouts for $5.7 billion of credit-default swaps and related insurance sold against collateralized debt obligations, Armonk, New York-based MBIA said today in a statement. Merrill Lynch misrepresented the nature of the debt being protected as part of a “deliberate strategy to offload” billions of dollars of “deteriorating” subprime mortgages between July 2006 and March 2007, as homeowner defaults began to soar, the insurer said in the statement.
Fibonacci Nightmare Well, I did it. I started fooling around with Fibonacci numbers and I scared myself half to death. Leonardo Fibonacci, was perhaps the greatest mathematician of the Middle Ages. I pried open his seven hundred year old crypt, dusted him off and asked him his specialty ... a question about the future. The question I posed, "Are we headed for inflation or deflation in 2009?" I was stunned by the clarity of his answer. This Einstein of his day warned, inflation of nightmare proportions and worse, is coming to this nation soon. . . . . . . . . Are we really headed for war with ourselves and hyperinflation once again in 2009? This cluster of Fibonacci numbers linking up and landing on the year 2009 is striking and elegant. Is this the year where the old world ends and the new world begins? Leonardo Fibonacci says yes.
BILL MOYERS JOURNAL | William K. Black | PBS The financial industry brought the economy to its knees, but how did they get away with it? With the nation wondering how to hold the bankers accountable, Bill Moyers sits down with Bill Black, the former senior regulator who cracked down on banks during the savings and loan crisis of the 1980s. Black offers his analysis of what went wrong and his critique of the bailout.
Banks best Obama on mortgage relief Bankruptcy judges can't ease payments Senate Democrats handed President Obama a rare congressional setback Thursday by helping to scrap his plan to give bankruptcy judges the power to force banks to reduce mortgages payments for struggling homeowners. Critics said Mr. Obama failed to use any muscle to preserve the "cram-down" provision, but the president's allies in the Democrat-led Congress blamed lobbying by the banking industry for killing the bill. Mortgage banking industry lobbyists, who gave more than $1.8 million in campaign contributions to Senate members in 2008, fought fiercely against the legislation, which was offered as an amendment to a housing bill.
Flawed Credit Ratings Reap Profits as Regulators Fail Ron Grassi says he thought he had retired five years ago after a 35-year career as a trial lawyer. Now Grassi, 68, has set up a war room in his Tahoe City, California, home to single-handedly take on Standard & Poor’s, Moody’s Investors Service and Fitch Ratings. He’s sued the three credit rating firms for negligence, fraud and deceit. Grassi says the companies’ faulty debt analyses have been at the core of the global financial meltdown and the firms should be held accountable. Exhibit One is his own investment. He and his wife, Sally, held $40,000 in Lehman Brothers Holdings Inc. bonds because all three credit raters gave them at least an A rating -- meaning they were a safe investment -- right until Sept. 15, the day Lehman filed for bankruptcy. “They’re supposed to spot time bombs,” Grassi says. “The bombs exploded before the credit companies acted.”
China Banks Surge to World’s Biggest May Be Too Good to Be True Just when the world is beginning to appreciate China’s biggest banks, unencumbered by Wall Street assets of no discernible value and fortified by record first- quarter lending, some analysts say it’s too good to be true. While Industrial & Commercial Bank of China Ltd., China Construction Bank Corp. and Bank of China Ltd., three of the world’s four largest banks by market value, led an increase in lending focused on investments in railways, roads and ports, similar state-directed loans caused bad debts to snowball in the 1990s. The resulting rescue cost $650 billion and took 10 years.
Fed plans 5-year loans under TALF The U.S. Federal Reserve plans new loans with five-year terms under its Term Asset Backed Securities Loan Facility, or TALF, in a bid to boost the commercial real estate market, the Wall Street Journal reported on its website on Thursday. An announcement could come as soon as Friday or early next week, the paper said, adding that plans could still change. Earlier this month, a Fed official told Reuters that the central bank was considering expanding TALF to include commercial mortgage-backed securities with terms longer than three years.
U.S. Bank Test Results Delayed as Conclusions Debated The Federal Reserve will postpone the release of stress tests on the biggest U.S. banks while executives debate preliminary findings with examiners, according to government and industry officials. The results, originally scheduled for publication on May 4, now may not be revealed until toward the end of next week, said the people, who declined to be identified. A new release date may be announced as soon as tomorrow, they said.
Obama Again Uses the Word ‘Investment’ to Describe the Deficit Spending He Plans When President Barack Obama gave a primetime press conference on March 19, he used the terms “invest” and “investment” 18 times to describe the deficit spending he wants the federal government to pursue under his budget plan. In another primetime press conference last night, Obama again used the term “investment” three times to describe the deficit spending while almost in the same breath decrying “overleveraged banks” and those who “maxed-out on credit cards.” Merriam-Websters Online Dictionary defines “investment” as “the outlay of money usually for income or profit.” It defines “invest” as committing money “in order to earn a financial return.”
Obama say tough economy means 'more will be lost' resident Barack Obama is warning that "more will be lost" during a recession that has already cost millions of Americans their homes and their jobs. Marking 100 days in office, Obama was holding a prime-time news conference on Wednesday. The White House released excerpts of his opening statement in advance.
Government Will Stop ‘Meddling’ in Private Sector ASAP, Obama Says at News Conference At a primetime press conference Wednesday night, President Barack Obama said his goal is “to get the U.S. government out of the auto business as quickly as possible.” “I want to disabuse people of this notion that somehow we enjoy, you know, meddling in the private sector,” the president said in response to a question.
Bulldozing new homes in Southern California (Eric said this would happen!)
Part 2
U.S. power grid seen at risk Key members of Congress launched an effort Thursday to protect the nation's electricity grid from criminals, vandals or U.S. enemies, who could use the Internet to cripple computers that control the generation and distribution of power. The effort, led by the chairmen of the House and Senate homeland security committees, follows reports of hackers - possibly working for foreign governments - probing power controls for weaknesses.
MetLife posts 1Q loss; premiums, investments down MetLife reports loss in 1st quarter, hurt by sinking stock markets and lower premiums MetLife Inc. posted a first-quarter loss on Thursday, as declining revenue from premiums and losses on investments pushed the life insurance company's results below Wall Street's expectations. . . . . Like other insurers, MetLife has been hurt by stock market declines in recent months. The company said its loss on investments widened to $618 million, taking into account taxes. Its net investment income declined 24 percent to $3.3 billion from $4.3 billion in the year-ago quarter.
U.S. House acts to protect credit card users The U.S. House of Representatives overwhelmingly voted on Thursday in favor of legislation to protect credit card users from hidden fees, sudden interest rate hikes and questionable billing practices. The chamber voted 357 to 70 in support of the Credit Cardholders' Bill of Rights, sponsored by New York Democrat Carolyn Maloney. This year, 107 Republicans voted in favor of the bill, compared with 84 Republicans voting for a similar bill last year.
Detroit's angry lenders The Obama administration is learning Robert Burns' wisdom about "the best laid schemes o' mice an' men" the hard way as its plans to rescue Chrysler and General Motors meet commercial reality. The effort has been flawed from the outset. But once the political decision was taken that bankruptcy was not an option, two fundamental errors were made. First, the administration and its Congressional allies repeatedly shifted the goalposts, giving the impression they would use taxpayer cash and their bully pulpits to seal a deal. This encouraged brinkmanship. Second, they favoured politically influential unsecured creditors, giving better terms to the United Auto Workers than to lenders or even taxpayers. Under GM's offer, the UAW would get almost half the equity while noteholders, whose claims have legal parity, would get a fourth as much for debts more than twice as large
US auto industry opts for unthinkable Chrysler's Chapter 11 bankruptcy filing on Thursday sets the stage for what promises to be an epic legal battle over the Obama administration's attempt to reorder the US auto industry. Facing off against the administration will be a group of senior Chrysler debt holders who rejected a last-minute offer from the company under which creditors would have received $2.25bn (€1.7bn, £1.52bn) in cash for their $6.9bn in debt. Four leading banks, holding 70 per cent of Chrysler's debt, agreed to take 29 cents on the dollar. The dissident creditors argue that the proposed restructuring plan championed by the administration is unfair because it places their claims - which are secured on Chrysler's assets - below the unsecured claims of the United Auto Workers trade union.
Obama Says Chrysler Getting 'New Lease on Life' resident Barack Obama said the U.S. and Canada will commit more money to Chrysler LLC, which filed for bankruptcy, as it forms an alliance with Fiat SpA that will give the automaker a "strong chance of success." As part of the deal to get as much as $3.5 billion in operating loans from the U.S. government, Chrysler sought court protection today in New York, a process that an administration official said should be completed within two months.
'Surgical' Bankruptcy Is Set for Chrysler Chrysler, the third-largest American auto company, filed for bankruptcy protection Thursday and entered into an alliance with the Italian automaker Fiat in a bid for survival. The bankruptcy case, which government officials envisioned as a swift, "surgical" process, was filed in United States Bankruptcy Court in New York, with the first hearing scheduled for Friday morning.
Chrysler files for Chapter 11 bankruptcy Chrysler filed for bankruptcy protection Thursday and announced it will temporarily halt most of its vehicle production while it completes a deal with Italian carmaker Fiat designed to revive its tattered fortunes. The Obama administration said it had long hoped to stave off bankruptcy for the nation's third-largest automaker, but it became clear that a holdout group of creditors wouldn't budge on proposals to reduce Chrysler's $6.9 billion in secured debt. Clearing those debts was a needed step for Chrysler to restructure by a government-imposed Thursday deadline.
The Health Czar Can't Calculate Experts agree that our healthcare system is unsustainable and in need of reform to promote better coordination, accountability, outcomes, and cost effectiveness.[1] Regrettably, they also seem to agree that we need a robust central-planning authority — a health czar — to make this coordination happen. But as economist Ludwig von Mises proved in his 1920 treatise "Economic Calculation in the Socialist Commonwealth,"[2] under central planning any rational economic calculation, that is, any method to efficiently allocate resources, is practically and theoretically impossible — not just of higher cost, lower quality, and reduced innovation; not just uncoordinated, inefficient, and ineffective; but literally impossible.
Obama Security Aide’s Family Has Swine Flu A security aide helping with arrangements during President Barack Obama's recent trip to Mexico became sick with flu-like symptoms and three members of his family later contracted probable swine flu, the White House said Thursday. The disclosure from press secretary Robert Gibbs comes days after the White House played down risks to the U.S. delegation on the two-day trip that started April 16. Gibbs remained steadfast that the president was never at risk of contracting the flu, which has quickly spread across the globe. The employee, who was not named by the White House, is an aide to Energy Secretary Steven Chu and helped plan security for part of the administration's Mexico trip.
White House: ‘Vice President Misrepresented What the Vice President Meant’ White House (CNSNews.com) – What Vice President Joe Biden meant and what he actually said about traveling and the swine flu are two different things, White House Press Secretary Robert Gibbs told a somewhat snickering press room on Thursday. The explanation came after Biden, on NBC’s “Today” show, said that in light of concerns over the swine flu, he would not travel in “confined places,” such as an airplane or the subway. That goes beyond the precautionary measures cited by President Barack Obama, Homeland Security Secretary Janet Napolitano, and the Centers for Disease Control and Prevention – all of whom have advised people to wash their hands and to cover their mouth if coughing and nose if sneezing.
Shocker: Obama Staffers Attend Secret Dinners With Lefty Media The Washington Post’s Howard Kurtz has let the cat out of the bag in the Post’s April 27 issue about a regularly scheduled secret media dinner attended by some of the top left-wing journalists in the country. But it isn’t just the lefty scribblers that have attended these secret, off-the-record dinners for these gatherings have each featured a guest. Rahm Emanuel, Sec. of the Treasury Tim Geithner, and Fed Chairman Ben Bernanke have all recently had their chance to schmooze the press and guide them with the spin desired by the White House. So, not only does Obama’s Chief of Staff Rahm Emanuel have secret daily phone calls with which to program the media’s coverage of the White House, now it is revealed that Emanuel and other Obama staffers have been attending secret dinners to help the press “understand” what the White House wants reported? As Kurtz says, it all sounds “rather cozy,” doesn’t it?
A pandemic of panic -- are we dead yet? We were all supposed to be in the graveyard by now, done in by AIDS, SARS, bird flu, poisoned peanut butter, Hong Kong flu, killer tomatoes, global warming and strangulation by kudzu. But here we are, proof that there really is life after death. Now we learn that we might freeze before the pigs get us. (The chickens failed.) NASA scientists have observed that the solar wind is the weakest since we began keeping such records, that the magnetic axis of the sun is tilted to an unusual degree, and Ol' Sol is the quietest he has been in a century. A chill, say the solar scientists, may be on the way. (Or not.) Worse, says one of them, this could compel reappraisal of the science of global warning. Try as he might, poor old Al Gore just can't keep the cosmos in line.
Swine Flu Hammers Mexico In Mexico, Virus Adds to Effects of Global Slump $$ MEXICO CITY -- Mexico's government Wednesday suspended all nonessential activities to battle a swine-flu epidemic, which may be responsible for some 150 deaths here and also is hammering Mexico's economy deeper into recession. Mexico's health minister, José Ángel Córdova, urged private businesses to do the same. He also confirmed 99 cases of swine-flu infection, of which eight have proven fatal. The official said that the government has decided to step up restrictions, including suspending government administrative activities from May 1 to May 5. The suspension excludes supermarkets, communications, transport, gasoline stations, health services, banks and other financial services, he said.
When the Obama Backlash Comes Public opinion can be very fickle. Barack Obama has ridden a positive wave of opinion all the way to the White House. The public has welcomed him into office in that same spirit of hope in which he ran. Since the inauguration, however, the president is showing he has different plans than the ones he spoke about during the campaign. It should come as no surprise when the public turns on him just as easily as he has turned on them. The contradictions between Obama’s words and actions are many. He opposes big government, and then he vastly expands it. He says he favors bipartisanship, but doesn’t practice it. He says he is against earmarks, and then signs the largest pork package in history. And that is just to name a few.
Max Keiser on The Financial Armaggedon
Many South Florida car dealerships on the chopping block The financial toll on U.S. automakers GM and Chrysler will soon be evident in South Florida as more dealerships are forced to close. South Florida's love affair with shiny new cars is legendary, but for those who have a passion for General Motors and Chrysler vehicles, those bonds could soon be tested. inancially ailing GM said this week that it will cut 2,600 dealerships -- 42 percent of its network. It will begin notifying dealers as early as next month as it decides which will be eliminated. That's in addition to plans to shut down the Saturn brand entirely and over time phase out Pontiac models.
Consumer Spending Slows, Job Cuts Mount Consumer spending in the U.S. fell more than forecast at the end of the first quarter as mounting job losses threatened to weigh on a projected economic recovery later this year. Purchases decreased 0.2 percent in March, the first drop this year, the Commerce Department said today in Washington. Other reports showed wages and benefits rose at the slowest pace on record and firings continued, straining American workers.
New Hate Crimes Bill Unconstitutional and Threat to Religious Freedom? Wednesday night, while President Barack Obama held his televised press conference marking his first 100 days in office, the federal hate crimes bill passed in the House of Representatives by a vote of 249 to 175. But not everyone believes this piece of legislation is a great idea. They are cautioning many supporters that such a law is a two-edged sword and may have unintended consequences that includes misuse by overzealous and politically motivated prosecutors. During a discussion of HR 1913, the Local Law Enforcement Hate Crimes Prevention Act of 2009, opponents of the proposed law offered compelling arguments for scrapping the bill.
Secession: the Ultimate States' Right by Ron Paul Last week the governor of Texas ignited a media firestorm for his remarks involving the idea of secession. He did not call for Texas to secede from the United States. He merely pointed out that the federal government was treading heavily on the sovereignty of the states and that this can not continue indefinitely without a breaking point. The reaction to Governor Perry’s statements has been nothing short of hysterical. He has been called treasonous for making this obvious point and opening up a discussion. I am not calling for secession either, however there is nothing wrong with a healthy and open discussion of this issue. America was born from an act of secession. When King George’s rule trampled on the rights of the colonies, we successfully seceded from England. It took a war, but we were well within our rights. We applauded when former soviet states seceded from the USSR and declared their sovereignty. And hopefully the United States will eventually secede from the United Nations. We pay most of the bills of the UN, yet do not have the commensurate votes, so someday we will wake up and realize that membership, for these and other reasons, does not serve our interests.
4/24/2009 Ron Paul On Lew Rockwell Show : Federal Reserve, Secession, Future (1/2)
4/24/2009 Ron Paul On Lew Rockwell Show : Federal Reserve, Secession, Future (2/2)
Secession Is in Our Future The Inalienable Right of Secession . . . . The Declaration of Independence of the United States of America invokes the self-evident truths that all men are created equal and are endowed by their Creator with certain inalienable rights, that governments are formed to protect these rights and gain their just powers from the consent of the governed, and that when a government becomes abusive of these rights, it is the right — no, it is the duty — of the people to alter or abolish that government.
On October 17, 2006, 'a date which will live in infamy' . . . there were two acts of tyranny committed. The first was a public signing of the 'Military Commissions Act of 2006' which suspended habeas corpus allowing the president to declare you an 'enemy combatant' and end your rights to seek legal or judicial relief from unlawful imprisonment.
The second act of tyranny took place in a private Oval Office ceremony, in which the president signed into law the 'John Warner National Defense Authorization Act (NDAA) of 2007' which essentially eliminates the protections of the Posse Comitatus Act and re-wrote the Insurrection Act. The NDAA will allow the president to declare a 'public emergency' and take control of state-based National Guard units without the consent of the governor or local authorities, in order to 'suppress public disorder'!
Starve the Beasts - Start the Revolution It is apparent now there remains only one way for ordinary Americans who love their country and want at least some of what's good about it to be preserved for future generations: We must kill the FIRE Economy beasts (FIRE: Finance, Insurance and Real Estate). Recommended method of choice: Starvation - suitably slow and painful. We're the victims in a hostage situation, if you didn't know, held captive and mesmerized by the soft, flat-panel-TV glow of the FIRE Economy, which depends on our sheep-like conformity and Stockholm-syndrome-like admiration of our captors, but it's NOT too late to regain our senses, if only for the benefit of our children and grandchildren. Even if it is only wildly exaggerated - and it isn't - that the Systemically Important Too Big To Fail (SITBTF) institutions completely have captured our flag, our capital, our political parties, our "democracy" and our very lives, we as regular, hard-working, country-loving J6Ps have only this one remedy remaining, as all others woefully have failed.
A BRIEF OVERVIEW OF CAPITALISM, (SOCIALISM & BARACK OBAMA), COMMUNISM, FASCISM........ / PART 1 of 3
A BRIEF OVERVIEW OF CAPITALISM, (SOCIALISM & BARACK OBAMA), COMMUNISM, FASCISM........ / PART 2 of 3
A BRIEF OVERVIEW OF CAPITALISM, (SOCIALISM & BARACK OBAMA), COMMUNISM, FASCISM........ / PART 3 of 3
N. Korea Issues Threat on Uranium SEOUL, South Korea - North Korea said Wednesday that it would start a uranium enrichment program, declaring for the first time that it intended to pursue a second project unless the United Nations lifted sanctions. Calling the United Nations Security Council "a tool for the U.S. highhanded and arbitrary practices," North Korea also threatened to conduct nuclear and intercontinental ballistic missile tests.
China's Leaders Take Visible Approach to Swine Flu HONG KONG - In the clearest sign yet of how seriously China is taking the swine flu outbreak, President Hu Jintao convened a meeting on Thursday morning of the Standing Committee of the Politburo - the nine men who run China - that was immediately announced. It is rare for China's authorities to disclose any meeting of the standing committee, and particularly to do so as soon as the meeting ended. "I don't know if it has ever occurred before - it is really, really unusual," said Cheng Li, the director of the China Center at the Brookings Institution.
Civilians Flee as Pakistani Forces Hit Resistance SHEIKH JANA, Pakistan - The Pakistani forces air-dropped commandos into the main town in Buner on Wednesday and quickly retook control of it from Taliban militants who flooded into the area last week, the military said. But the district was far from recaptured and the military may be in for a hard fight. Villagers who fled the fighting and made it to this village on the plains said the military was bombing in Buner with fighter jets and firing rockets from helicopter gunships as Pakistani troops battled the Taliban on the ground for a second day.
Heavy Battles Are Raging With Taliban In Pakistan Heavy fighting raged for a third day in Pakistan's northwest on Thursday as civilians flooded from the area and the Pakistani military reported some gains in pushing back Taliban insurgents. The Pakistani military secured mountain passes to the west and south of Buner, a district 60 miles from the capital, according to its spokesman, Maj. Gen. Athar Abbas, who spoke at a news briefing at the military headquarters in Rawalpindi. Helicopter gunships also rocketed Taliban positions in the north of Buner, where the militants had apparently fortified positions in areas adjoining their stronghold in the Swat Valley.
Heavy Battles Are Raging With Taliban In Pakistan ISLAMABAD, Pakistan - Heavy fighting raged for a third day in Pakistan's northwest on Thursday as civilians flooded from the area and the Pakistani military reported some gains in pushing back Taliban insurgents. The Pakistani military secured mountain passes to the west and south of Buner, a district 60 miles from the capital, according to its spokesman, Maj. Gen. Athar Abbas, who spoke at a news briefing at the military headquarters in Rawalpindi. Helicopter gunships also rocketed Taliban positions in the north of Buner, where the militants had apparently fortified positions in areas adjoining their stronghold in the Swat Valley.
BARACK OBAMA: The Audacity of Marxism (American's Have Been Decieved) / Part 1 of 5
BARACK OBAMA: The Audacity of Marxism (American's Have Been Decieved) / Part 2 of 5
BARACK OBAMA: The Audacity of Marxism (American's Have Been Decieved) / Part 3 of 5
BARACK OBAMA: The Audacity of Marxism (American's Have Been Decieved) / Part 4 of 5
BARACK OBAMA: The Audacity of Marxism (American's Have Been Decieved) / Part 5 of 5
Congress OKs $3.6 trillion Obama budget Plan lacks Republican support Congress signed off on President Obama's $3.6 trillion budget largely along party lines Wednesday night, handing him a legislative victory that paves the way for a health care overhaul. The Senate cleared the plan by a vote of 53 to 43 after the House passed it 223 to 193. Not a single Republican in either chamber voted for the measure. Democratic defections included Sens. Evan Bayh of Indiana, Robert C. Byrd of West Virginia, Ben Nelson of Nebraska and Pennsylvania's former Republican Sen. Arlen Specter, all of whom joined 17 House Democrats in voting no.
Fed Is Said to Seek Capital for at Least Six Banks At least six of the 19 largest U.S. banks require additional capital, according to preliminary results of government stress tests, people briefed on the matter said. While some of the lenders may need extra cash injections from the government, most of the capital is likely to come from converting preferred shares to common equity, the people said. The Federal Reserve is now hearing appeals from banks, including Citigroup Inc. and Bank of America Corp., that regulators have determined need more of a cushion against losses, they added.
Beijing has 1,054 tonnes of gold now! Even when the world has been struggling to cope with the recession and its cascading effects, China has been secretly booking profits. If you have any doubt about the Communist nation’s ability to secretly convert adverse situations to its benefit, just check the data released by State Administration of Foreign Exchange (SAFE). In a recent announcement, SAFE said China has earned $82.5 billion from nearly $2 trillion in foreign exchange reserves last year, and is now the fifth largest holder of gold.
Special Alert - Stand Down In October 2007, just two days after the DJIA made its all-time high, I issued a newsletter entitled “Man Your Battle Stations.” Despite being known for having written two similar dire forecasts in August 1987 and January 2000, this one was clearly the most bearish. It literally said to sell everything except investments related to precious metals and to even short the stock market. I spoke of tremendous social, political (and geopolitical), economic and spiritual upheaval to come. This dire forecast led to BNN having me on to discuss this forecast.
2009 Silver Eagle Bullion Coins Scorching Hot Sales of 2009 Silver Eagle Bullion Coins are blistering hot, with an incredible record-breaking pace of 9.64 million sold through Monday, April 27, according to the latest US Mint sales stats. More silver eagles have been sold during February, March and even an unfinished April than any corresponding month since the American Eagle series was launched in 1986. What happened in January 2009? It was a great month for the eagles as well, coming in second place behind the record sales in January 2008.
How Government Guaranteed Bank Debt May CRUSH Public Borrowing It's no secret the the federal government's need to borrow has sky-rocketed. Thanks to the various bailouts and stimulus measures, expenditures by the feds have increased by one third and are likely to grow even higher. Meanwhile, the economic slowdown has decreased the amount the government collects in taxes. The only way to bridge the gap is more borrowing. While many are confident that the global appetite for the sovereign debt of the United States will remain robust, some of the government's own programs may start to diminish that appetite. The government's guarantees of various kinds of debt issued by financial institutions essentially makes some bonds issued by banks as "risk free" as Treasuries. But these bonds pay higher yields than government debt, which should make them more attractive for risk-adverse investors looking to maximize their returns on investment.
Dollar to Decline as 10-Year Yields Rise: Technical Analysis The dollar will probably decline should 10-year Treasury note yields rise “decisively” above 3.06 percent, Citigroup Inc. said in a report citing trading patterns. The greenback strengthened in 1993 against the currencies that went on to form the euro as U.S. 10-year notes rallied, technical analysts Tom Fitzpatrick in New York and Shyam Devani in London wrote today in a note to clients. The U.S. currency erased most of its gains as yields climbed in 1994, they said. “If this were the correct picture then one would expect significant renewed dollar weakness,” the analysts wrote. Buying the dollar and Treasuries was “the trade of choice” toward the end of 2008 and “is now unraveling,” they said.
U.S. Economy: GDP Shrinks in Worst Slump in 50 Years he U.S. economy plunged again in the first quarter, making this the worst recession in at least half a century. Gross domestic product dropped at a 6.1 percent annual pace, weaker than forecast, after contracting at a 6.3 percent rate in the last three months of 2008, the Commerce Department said today in Washington. The report, which reflected a record slump in inventories and further declines in housing, came hours before Federal Reserve officials said the economy continued to contract at a “somewhat slower” pace.
Niall Ferguson How bad the crisis could get Harvard historian Niall Ferguson in an interview about the severity of the global economic Crises. Will China save the United States or will they decide to concentrate on themselves? Protectionism could lead to a global meltdown
Geithner's Ridiculous Public-Private Crap Asset Partnership Plan Is Not Dead Yet Here's the official presser on the P-PIP: The Treasury Department today announced the receipt of more than 100 unique applications from potential fund managers interested in participating in the Legacy Securities portion of the Public Private Investment Program (PPIP). A variety of institutions applied, including traditional fixed income, real estate, and alternative asset managers. Successful applicants must demonstrate a capacity to raise private capital and manage funds in a manner consistent with Treasury's goal of protecting taxpayers. Treasury will also evaluate the applicant's depth of experience investing in eligible assets. Finally, the applicant must be headquartered in the United States.
Banks Urge Senate to Reject Mortgage Relief Bill A dozen financial groups, including the U.S. Chamber of Commerce and American Bankers Association, on Wednesday urged every member of the U.S. Senate to reject a key piece of President Barack Obama's plan to keep tens of thousands of Americans from losing their homes. The letter to senators was the latest push by an industry that has helped stall the proposal, which would have let debt-ridden homeowners reduce their payments in bankruptcy court. The Senate was expected to defeat the measure on Thursday. The plan faces nearly unanimous opposition by Republicans and even some Democrats who say they share industry's concerns that the forced easing, or "cram-down" of mortgage terms would ultimately drive up interest rates and further freeze credit lines.
Donald Luskin: Gold and the Upside-Down Bell Curve I regard gold as substitute money. So when you ask, "What's gold worth?" to me, what you're really asking is "What is the expected value of money?" If the financial crisis deepens and the world's demand to hold safe-haven balances increases sharply again back to the levels of panic that we saw last October, November, December, then the world will be plunged into a monetary deflation; deflation defined as extreme appetite for money as opposed to any asset or any thing - a desire for the complete safety of money. So when the demand for money completely outstrips the supply of money, you get deflation. In that kind of world, even gold isn't a safe haven; the only thing that would do is liquid money.
Do Treasury Bond Sales Influence Currency Markets? This week, the Treasury is auctioning 101B worth of 2, 5, and 7 year notes. They sold 40B 2 year notes Monday at a yield of .00949%. Yesterday they sold a record 35B 5 year notes and today they will offer 26B of 7 year notes. Next week they continue with an estimated 73B of 3,10 and 30 year bonds. The total amount borrowed during the quarter ending March 31st was 481B. During the current quarter ending June 30th, it is estimated they will borrow 515B dollars. Thus it can be implied from the massive current quarter’s needs that tax receipts have shrunk dramatically because of the recession. If total borrowing as estimated by some is at three trillion that means the 4th quarter borrowing by the Treasury will be huge. Where will all this money come from?
U.S. economy tumbles steeply in first quarter The U.S. economy shrank by a surprisingly steep 6.1 percent in the first quarter, hit by a record plunge in business inventories and sinking exports, but investors read signs of recovery in the report. The economy remained on track to emerge from recession in the second half of the year, analysts said, pointing to the run down in inventories that helped boost U.S. stock prices.
Perot Fund Turned Billions Into ‘Zero,’ Investor Says The family trust of billionaire and former presidential candidate H. Ross Perot was accused in a lawsuit of mismanaging a fund open to outsiders so that it went from $2.5 billion to “less than zero.” Southern Avenue Partners LP, which sued the Perot Family Trust and related entities, said Bermuda-based Parkcentral Global Hub Ltd. lost more than $3 billion while falsely claiming it was hedged against such losses. Southern Avenue wants to expand the suit to represent all the investors as a class.
Liar, Liar: Ken Lewis Changes His Story On Merrill Lynch Deal Remember the brouhaha last week over Ken Lewis's testimony to New York attorney general Andrew Cuomo about the government forcing his hand to close the acquisition of Merrill Lynch without disclosing losses to Bank of America's shareholders? It was the confession that launched a thousand inquiries into whether Hank Paulson or Ben Bernanke was behind the government's threat to remove Lewis if he backed away from the deal and whether Lewis should have resigned in protest rather than sacrifice shareholder interests to regulators demands.
Lewis out as Bank of America chairman, remains CEO Lewis loses post as Bank of America chairman after shareholder vote; remains CEO Ken Lewis was ousted as chairman of Bank of America Wednesday after shareholders angry about the company's acquisition of Merrill Lynch voted to separate the job from that of chief executive. Lewis will remain the CEO of the bank, but board member Walter E. Massey, president emeritus of Morehouse College in Atlanta, will become Bank of America Corp.'s chairman.
Obama vows great `vigilance' as swine flu spreads Obama vows `great vigilance' for swine flu as it takes first life in US, won't close border President Barack Obama pledged "great vigilance" in confronting the swine flu outbreak Wednesday night as it spread coast to coast across the U.S. The outbreak hit 11 states and closed schools amid confirmation of the first U.S. death -- a Mexican toddler who visited Texas with his family -- and the confinement of dozens of Marines after one came down with the disease in California. Some 100 schools were closed, and more might need to be shut down temporarily, Obama said, declaring, "This is obviously a very serious situation." The total confirmed cases in the U.S. rose to nearly 100, with many more suspected.
Chrysler Bankruptcy Looms as Deal on Debt Falters Last-minute efforts by the Treasury Department to win over recalcitrant Chrysler debtholders failed Wednesday night, setting up a near-certain bankruptcy filing by the American automaker, according to people briefed on the talks. Barring an agreement, which looked increasingly difficult, Chrysler was expected to seek Chapter 11 protection on Thursday, most likely in New York, these people said.
Will GM soon stand for ‘Government Motors?’ Restructuring plan calls for government to gain majority ownership If the government takes a majority stake in General Motors, will it end up taking the wheel, too? Under a restructuring plan put forth this week by GM, the ailing automaker would give majority ownership to the federal government to stave off bankruptcy. That handoff would amount to an extraordinary partial nationalization of the maker of Buicks, Cadillacs and Chevys that has been an independent company since 1908.
GM Bondholders Said to Plan Counteroffer to Take Majority Stake General Motors Corp.’s bondholders plan to present a counteroffer to President Barack Obama’s auto task force in Washington tomorrow that would give them control of the carmaker, according to a person familiar with the committee representing creditors. The bondholder committee plans to reject GM’s April 27 debt exchange offer that asked them to swap all their claims for a 10 percent stake in the reorganized automaker, said the person, who declined to be identified because the negotiations are private.
As Detroit Is Remade, the U.A.W. Stands to Gain In the devastating slump that has forced two of Detroit’s automakers to the brink of bankruptcy, the United Automobile Workers union stands to become one of the industry’s few winners. According to restructuring plans proposed this week, the union will have more than half the stock in Chrysler and a third of General Motors, meaning it will have tremendous influence, with the government, in determining the future of the companies. The United Automobile Workers union said Wednesday that its members ratified a cost-cutting deal with Chrysler by a 4-to-1 margin.
Boeing Presses Congress to Order More of Its Planes The Boeing Company, which was hit harder by the Obama administration’s spending cuts than any other defense contractor, is pushing Congress to increase its orders for planes and fighter jets by $3 billion, industry officials said Wednesday. Boeing is trying to get more orders for C-17 cargo planes and F/A-18 fighter jets added to a supplemental war-funding bill, officials said. They said Boeing’s lobbyists contend that building the extra planes would help preserve the military’s industrial base. Several analysts said they were likely to prevail because members of Congress are seeking to preserve thousands of jobs in their districts.
U.S. lawmaker sees credit card law in May President Barack Obama will sign wide-ranging, pro-consumer credit card reforms into law by late May, senior U.S. House Democrat Carolyn Maloney predicted on Wednesday. "President Obama seems very determined," Maloney, who met with Obama on Tuesday at the White House, told the Reuters Global Financial Regulation Summit in Washington. "He said, 'We're going to get that bill. We're going to enact it into law'."
Donors demand refund from Specter Political switch gets expensive as lawmaker's support shrinks Sen. Arlen Specter's switch to the Democratic Party is prompting his campaign donors large and small to demand their money back, including several Republican senators whose political action committees gave tens of thousands of dollars to the Pennsylvania lawmaker. Sen. Johnny Isakson didn't waste any time putting himself at the front of the refund line. The Georgia Republican asked Mr. Specter for a return of his leadership political action committee's $5,000 contribution Tuesday on the Senate floor - just hours after Mr. Specter announced he was changing his political stripes.
U.S. House passes "hate crime" bill that Bush opposed The Democratic-led U.S. House of Representatives Wednesday approved an expansion of federal "hate crime" laws -- an effort that former Republican President George W. Bush had opposed. On a vote of 249-175, the House passed and sent to the Senate a bill backed by the new Democratic White House to broaden such laws by classifying as "hate crimes" those attacks based on a victim's sexual orientation, gender identity or mental or physical disability.
American Express Cutting Clients Like Crazy American Express' risk-cutting poses its own risks What does AmEx want? That's a question American Express cardholders are asking more and more these days as the company turns the screws on long-standing customers and seems determined to show as many as possible the door. Similar moves by leading card issuers drew a scornful response from President Obama, who told industry leaders last week that "the days of any-time, any-reason rate hikes and late-fee traps have to end."
More than 100 U.S. schools closed because of swine flu At least 74 schools have closed across the country because of confirmed or probable cases of swine flu and 30 more have closed as a precautionary measure, the Department of Education said Wednesday. The elementary, junior high and high schools have closed because of the H1N1 virus, Department of Education spokesman Massie Ritsch said.
World Health Organization Raises Swine Flu Alert Level The global spread of swine flu, a pandemic, is highly likely, the World Health Organization said on Wednesday and raised its alert level to Phase 5, the next-to-highest level in the worldwide warning system. Phase 5 had never been declared since the warning system was introduced in 2005 in response to the avian influenza crisis. Phase 6 means a pandemic is under way.
Climate Talks for New Treaty Will Be Tough President Barack Obama’s chief climate negotiator said talks for a new treaty to combat global warming will be “extremely difficult” as nations grapple with how far emerging economies such as China should go to curb greenhouse-gas emissions. It’s “not going to be easy to reach an agreement,” Todd Stern, Obama’s special envoy for climate change, said yesterday at the conclusion of a two-day meeting in Washington of the world’s biggest emitters of carbon-dioxide pollution, a greenhouse gas blamed for rising temperatures and sea levels.
The Rise And Fall Of AIG's Financial Products Unit As we delve into the back-story behind the collapse of AIG, we thought it might be useful to lay out some key factual information about the firm's Financial Products unit, known as AIGFP, whose disastrous credit default swaps brought the company to its knees. How and when did AIG Financial Products get started? Who ran it, and from where? How did it get into credit default swaps, and what exactly are they, anyway? And how did this group of derivatives traders eventually wind up bringing down one of the most admired financial firms in the world?
AIG keeps key Paris employee, avoids possible default American International Group Inc said a key French employee will stay at the company, staving off the risk that his departure would leave the insurer in default on billions of dollars of insurance contracts. James Shephard has agreed to serve as chief executive of Banque AIG, with overall responsibility for the bank, AIG spokesman Mark Herr said. The Wall Street Journal reported that Shephard's departure could have triggered an AIG default on $234 billion of derivatives contracts.
American Statement of Grievance on Government & Judiciary (Part 2) Once the rights of the individual were treated as almost sovereign and respected above all else, as it was written into our Constitution. But now, after decades of individual liberty erosion, the rights of the collective are now considered superior, and are ceded a deference above those of any one person. This tendency, repeated many times over the years in controlling legal precedent, has slowly teased our society into a socialist mindset, spirit and practice. This quiescent tendency of belief is now normal and accepted, and it is the presumption and acceptance that all individual rights are only provisional, and are only granted solely at the discretion and benevolence of our governmental leaders. 3 We assert that without correction, this trend will lend itself to a slippery slope. As one set of injustices wrought becomes convention, it will become implicit foundation for the next set.
Obama Sows Seeds of Own Demise When the Obama administration crashes and burns, with approval ratings that fall through the floor, political scientists can trace its demise to its first hundred days. Although Americans are careful not to consign a presidency they desperately need to succeed to the dustbin of history, the fact is that this president has moved - on issue after issue - in precisely the opposite direction of what the people want him to do.
Europe's age crisis begins to bite The EU's working age population will peak next year before tipping into decline for half a century This will cause a relentless rise in pension and health costs that risk asphyxiating the region's economy. A new report by the European Commission said this financial crisis could turn into a "permanent shock to growth" from which Europe never fully recovers unless it moves fast to bring its public debts under control. The main danger is a "Lost Decade" akin to Japan's deflation slump, with economies contracting by 0.9pc into the middle of the next decade, but there is also a risk of a deeper downward spiral.
Don’t Know Much About Capitalism After eight years of watching conservatives blow trillions of dollars and comport themselves like anti-intellectual, jingoistic blockheads, I found myself ashamed to admit that the Left seemed to have all the genuine intellectuals - people who seemed to possess real curiosity, who refused to accept whatever official line the government was shelling out, and who sought genuine understanding instead of name-calling and pointless vitriol. With the Left now in power, though, they’ve by and large reverted to form. The very same people who just a year ago prided themselves on evaluating every Pentagon press release with an air of suspicion and hostility now accept without cavil whatever the Federal Reserve chairman or the Treasury secretary tell them. They’ll believe whatever economic superstition, no matter how transparently ludicrous, that happens to be in fashion. Whatever happened to “Question Authority”?
Blueprint (or blue plate special) for 'change'? Fabian Socialism & world government
Barack Obama: The Mendacity of Hope, Pt. I President Barack Obama's Brain Trust appears to be composed of recycled Washington insiders from previous administrations. Obama's Cabinet: Change? Obama voters wanted change. During the election, Obama supporters made it clear that "change" not only meant a different party occupying the White House and a different direction for American foreign and domestic policy, but—by choosing Obama over Clinton in the primaries—they expressed their desire for a Washington outsider. It might be instructive to take a look at the people with whom Obama has surrounded himself:
Barack Obama: The Mendacity of Hope, Pt. II Barack Obama's foreign policy posture is reminiscent of a previous president: George W. Bush In 2008, then-Senator Obama was pushed to the forefront of the passel of potential Democratic nominees due in no small part to his apparent status as the peace candidate. During the presidential campaign, Obama constantly reminded supporters of his 16 month plan for withdrawal from Iraq—except when he claimed to have an eleven and a half month plan. I clearly recall warning my liberal friends and family members that they were very likely going to be sorely disappointed with Obama.
UN Agenda 21 Sustainable Development
****** Important ! ******* Barack Obama, Fabian Socialist Who needs Molotov when we've got Alinski? Barack Obama is a Fabian socialist. I should know; I was raised by one. My Grandfather worked as a union machinist for Ingersoll Rand during the day. In the evenings he tended bar and read books. After his funeral, I went back home and started working my way through his library, starting with T.W. Arnold's The Folklore of Capitalism. This was my introduction to the Fabian socialists. Fabians believed in gradual nationalization of the economy through manipulation of the democratic process. Breaking away from the violent revolutionary socialists of their day, they thought that the only real way to effect "fundamental change" and "social justice" was through a mass movement of the working classes presided over by intellectual and cultural elites.
Obama on Track For Agenda 21
A Fabian Socialist Dream Come True The gradual revolution of the Fabian Socialists is quickly becoming a reality in America. The Fabian Society began in England in 1887 by a very small group of elitist socialist that sought to reform society gradually into one of socialism instead of through violent revolution. At first their purpose was to be an alternative in Britain for the more dominate Marxist Social-Democratic Federation, but their true goal was to accomplish socialism through a very gradual process using the voting booth and representative democracy as their instrument of change. In fact, one of their symbols is a Turtle with the motto: "When I Strike, I Strike Hard". Another symbol is the Wolf in Sheep's Clothing and the Globe on an Anvil being hammered into the Fabian model.
The World Rearms - Except for America The day is coming when Washington will have more military challenges to handle than just Afghanistan. Often, it takes an economic crisis to reveal where a country’s national priorities really lie. With this in mind, it is sobering to note that all of the world’s major power blocs are using this time of financial hardship to increase their military spending - except for the United States.
North Korea threatens nuclear and missile tests Isolated country raises stakes in worsening standoff over atomic program North Korea threatened Wednesday to conduct nuclear and missile tests and start an uranium-enrichment program in addition to its existing plutonium-based one, unless the U.N. apologizes for criticizing its recent rocket launch, dramatically raising its stake in the worsening standoff over its atomic programs. Pyongyang's Foreign Ministry said in a statement the country "will be compelled to take additional self-defensive measures" unless the U.N. Security Council apologizes immediately. "The measures will include nuclear tests and test-firings of intercontinental ballistic missiles."
Freedom Watch 4/29/2009 Guests Ron Paul, Peter Schiff, Daniel Hannan, Lew Rockwell (1/6)
Freedom Watch 4/29/2009 Guests Ron Paul, Peter Schiff, Daniel Hannan, Lew Rockwell (2/6)
Freedom Watch 4/29/2009 Guests Ron Paul, Peter Schiff, Daniel Hannan, Lew Rockwell (3/6)
Freedom Watch 4/29/2009 Guests Ron Paul, Peter Schiff, Daniel Hannan, Lew Rockwell (4/6)
Freedom Watch 4/29/2009 Guests Ron Paul, Peter Schiff, Daniel Hannan, Lew Rockwell (5/6)
Freedom Watch 4/29/2009 Guests Ron Paul, Peter Schiff, Daniel Hannan, Lew Rockwell (6/6)
A new gilded age Gold finds added lustre among formerly jaded investors When people look back on 2009 a few decades from now, it will be hard to find a better symbol of the tough times than an Internet gold jewellery buyer delivering the Super Bowl's most memorable commercial. Yet in an era in which bullion is emerging as the only reliable investment, it seems appropriate that Cash4Gold.com, a two-year-old startup out of Florida, claims to be the United States' fastest-growing company by taking gold pawning to the mainstream.
Inflation & Revolution The French Revolution was caused by the fiscal irresponsibility of the monarchy. Nobles and the Clergy paid no taxes, and when a title was given, that person was tax exempt for life. France was suffering from the costs of the Seven Years War, and helping America with its own revolution against the Brits. On top of that, there had been extremely bad weather and poor harvests. Starvation was common, and the government was broke. Unrest was everywhere, and innocents had been imprisoned. Finally, on July 14th, 1789, came the storming of the Bastille, and ever since, "Bastille Day," has been celebrated in France. France had heavy debts and huge deficits. (Gee Dad, isn't that what we seem to suffer from now?) Nine months later, in April, 1790, the inflating began.
China's big gold buy barely kept pace with forex The big surprise in China's revelation on Friday that it had secretly added over 450 tonnes of gold to its foreign reserves over the past six years may be the fact that it hasn't bought far more than that. Now, many analysts say the rare public disclosure may be a prelude to Beijing accelerating its purchases -- possibly from big government agencies or central banks -- as it worries about the erosion of its $2 trillion cash pile.
Jim Rogers Interview with Gold Seek Radio pt 1/2 24-04-09
China admits to building up stockpile of gold China revealed on Friday that it had secretly raised its gold reserves by three-quarters since 2003, increasing its holdings to 1,054 tonnes - or a pot worth about US$30.9-billion - and confirming years of speculation it had been buying. Hu Xiaolian, head of the State Administration of Foreign Exchange, told Xinhua news agency in an interview that the country's reserves had risen by 454 tonnes from 600 tonnes since 2003, when China last adjusted its state gold reserves figure.
Economic BBQ on the Credit Default Spit . . . . The fact that a local barbeque place opened and closed in the last three years brought this tragically home to me, but it's going to get worse as he notes that "it was the first wave of defaults in 'subprime' mortgages that sparked today's economic meltdown," which was bad enough, but not as bad as the news that a "second wave" of "toxic property loans, however - a flood what you call 'option ARM' or 'Alt-A' loans - won't hit peak resets until 2011."
The U.S. Treasury's Golden Shell Game, Part 2 Good News: The US Treasury has a little over 261 million ounces of gold which, because of Breton Woods, they value at a price of $42.22 per ounce, giving it a book value of slightly more than 11 million dollars. The gold appears to be in repositories and while the amount has fluctuated slightly prior to 2006, the number has apparently settled at the level first noted in March 2006 and remained unchanged, including monthly working stock at the mint, since then. The above should be consolation for all the theorists who say the US no longer has any gold in Ft. Knox, or Denver or anywhere else. Physically, the gold is right where the government says it is. Fiscally, well, that's where some of the bad news comes in.
Jim Rogers Interview with Gold Seek Radio pt 2/2 24-04-09
Citi Scrambling To Raise Cash After Failing Stress Test When the history of this crisis is written, it will likely be the government's unending attempts to save two disastrous companies known as AIG and Citigroup that get the most attention. We don't suppose there's any way we could persuade Tim Geithner to just cancel this crazy share swap and just finally seize Citi and be done with it? We didn't think so.
Citi Begging Geithner For Permission To Pay Massive Special Bonuses Fresh off Citi's failing the stress test comes a familiar story. Citi's prize commodities-trading unit, Phibro, didn't have anything to do with stuffing the balance sheet full of the assets that are dragging the firm (and taxpayers) to the bottom of ocean. Phibro also generated more than half-a billion dollars of revenue for the firm last year. The head of the unit, Andrew Hall, took home $100 million.
Commercial mortgages at risk The volume of commercial mortgages at risk of default has quintupled since the beginning of 2008 as a deteriorating economy has made it increasingly difficult for shops and businesses to keep up with their payments. Special servicers, companies that collect payments from borrowers in distress on behalf of mortgage bond investors, reported $23.7bn of mortgages under their care at the end of the first quarter, according to Fitch Ratings. That was five times higher than the $4.6bn of mortgages needing special servicing at the end of 2007. Servicers experienced an almost 50 per cent increase in the volume of distressed commercial mortgages in the first quarter alone.
Fed's future role at issue on Hill Congress struggles with complex plan for reordering financial regulation. A key hangup is how much new power to give the Federal Reserve. A major Obama administration plan to deal with financial companies too big to fail is becoming too big to zoom through Congress. Top White House and Treasury Department officials have been working behind the scenes for weeks to push lawmakers to start tackling legislation aimed at rescuing giant financial companies on the brink of failure -- like American International Group.
Fed Relies on Bank Reserves to Stem Inflation When Crisis Eases Federal Reserve officials are relying on interest paid on bank reserves to help stem inflation once the economy stabilizes, spurring some former insiders to intensify their warnings that consumer prices may soar. By paying lenders to keep cash on deposit at the central bank, the Fed is seeking to prevent the money being poured into the broader economy, potentially pushing prices higher. The strategy is a gamble: interest on reserves last year failed to stop the benchmark interest rate from falling below the policy makers' target. Officials may discuss the issue at their gathering today and tomorrow in Washington.
Fed to reassess efforts at reviving economy At this week's meeting, policymakers will weigh the effectiveness of ongoing programs. As the recession grinds on, Federal Reserve policymakers will open a two-day meeting Tuesday to make a fresh assessment of economic conditions, review the effectiveness of programs in place and weigh whether they need to expand or change them. Any policy decisions would come Wednesday. Fed Chairman Ben Bernanke and his colleagues have already ratcheted down a key lending rate for banks to a record low near zero. To ease the impact of the recession, economists predict the Fed will keep its targeted range for its bank lending rate between zero and 0.25 percent at this week's meeting and probably well into next year. Fed officials have left the door open to announcing a new relief program, though they haven't hinted in recent weeks of any new efforts.
Salbuchi - Global Meltdown: What We Can / Should Do... Part 1 Describes what needs to be done regarding the Financial Meltdown. Put the financial system in its proper place and bring Health to the Economy. All based on the Argentine experience of having suffered systemic collapses, hyperinflation and the gross corruption of wanton speculation.
Treasury to borrow record amount for current quarter The Treasury Department said Monday it will need to borrow $361 billion in the current April-June quarter, a record amount for that period. It's the third straight quarter the government's borrowing needs have set records for those periods. Treasury also estimated it will need to borrow $515 billion in the July-September quarter, down slightly from the $530 billion borrowed during the year-ago period. The huge borrowing needs reflect the soaring costs of the $700 billion financial rescue program and the recession, which is nearing a record as the longest in the post-World War II period.
$1 billion a day for stimulus The Obama administration has committed $75 billion in stimulus money in 10 weeks. So far $14.5 billion has been spent, mostly for Medicaid. The federal government has made available more than $75 billion for stimulus projects in the 10 weeks since President Obama signed the $787 billion recovery package into law. Not all of that money has hit the streets, however. So far, $14.5 billion has been spent, nearly all of it to help states cope with rising Medicaid costs.
Justices Hear Arguments on Bank Regulation The Supreme Court heard arguments on Tuesday in a case that could change the way big banks are regulated. In the case, Cuomo v. the Clearing House Association, federal and state regulators have squared off over which part of the government should serve as the nation's watchdog for national banks. The case began four years ago, when Eliot Spitzer, New York's attorney general at the time, questioned why some national banks seemed to be making a disproportionate number of high-interest home mortgage loans to black and Hispanic borrowers.
Optimism About US Economy May Be Wishful Thinking Consumers hoping that the worst of the recession is over may be setting themselves up for disappointment as the US economy continues to deteriorate, a panel of economists and financial experts said Tuesday. Surging unemployment and the slow-moving impact of the government stimulus program will stall any real economic recovery until 2010 or even later, the panel said. Consumers fearful of losing their jobs are likely to continue to spend less while the housing and financial crises continue to unwind.
Bonds Show 'Terrifying' Economic Weakness The recent rise in stocks and talk about green shoots in the markets are optimistic assumptions, as the world downturn "still has a way to run," Hugh Hendry, Chief Investment Officer at Eclectica, told CNBC Tuesday. World gross domestic product looks overestimated, because global consumption has been based on debt, and this cannot continue, Hendry told "Squawk Box Europe." "In the last five weeks we had a rally in risk. Big deal," he said. "I am fearful of the surplus countries, like China and Germany. I think GDP has been overstated," Hendry added.
Citi, BofA reportedly told to boost capital Early results of bank stress tests indicate the troubled banks need more capital in case economic conditions worsen, according to a published report. Government regulators have told Bank of America Corp. and Citigroup Inc. that the banks need to increase their capital reserves based on preliminary "stress test" results, according to a report published Tuesday. The capital shortfall at Bank of America could amount to billions of dollars, the Wall Street Journal said, citing people familiar with the situation.
Mad Scramble to Spin Today's Stress Test Leak It's not good news that Bank of America and Citigroup have been told to raise more capital following the completion of the Fed's stress tests. The thing is, the stress test isn't even that stressful, so if they're being told to raise more cash under this scenario, how much more would they need under realistic worse-case conditions? But the defenders are all out with the same line: Well, gee, everyone knew they needed more cash, how can this be a surprise to anyone?
U.S. consumer confidence soared in April Americans lifted by hopeful signs economy starting to stabilize Hopeful signs that the worst may be over for the economy boosted Americans' moods in April, sending a closely watched barometer of sentiment to the highest level since November. The New York-based Conference Board said Tuesday that its Consumer Confidence Index rose more than 12 points to 39.2, up from a revised 26.9 in March. The reading marks the highest level since November's 44.7 and well surpasses economists' expectations for 29.5.
A New Plan to Help Modify Second Mortgages The Obama administration sought to expand its $50 billion plan to reduce home foreclosures, announcing a new program on Tuesday to help troubled homeowners modify second mortgages or piggyback loans. Under the new plan, the Treasury Department will offer cash incentives and subsidies to lenders who agree to substantially reduce the monthly payments on second mortgages or forgive those loans entirely. The goal of the plan is to plug a hole in the administration's original program, which offered subsidies to lenders who agreed to modify the primary or first mortgages of homeowners who had fallen delinquent or were in danger of doing so.
Mortgage Modification Bill Faces Trouble in Senate Days before an expected vote, Senate leaders yesterday touted their version of a proposal to allow bankruptcy judges to modify mortgages, but have yet to secure the support of the financial services industry and face fierce opposition that could derail the proposal again. Senate Majority Whip Richard J. Durbin (D-Ill.) has been negotiating with Bank of America, J.P. Morgan Chase and Wells Fargo for weeks. They are facing increasing pressure to conclude negotiations before a Senate vote later this week, but talks continue, according to Senate aides.
Home Prices in 20 U.S. Cities Declined at Slower Pace The decline in home prices in 20 major U.S. cities slowed in February for the first time since 2007, amplifying signals that the market may be stabilizing. The S&P/Case-Shiller index's 18.6 percent decrease compares with a record 19 percent decline the month before. The gauge has fallen every month since January 2007, and year-over-year records began in 2001.
Administration set to expand housing aid plan Incentives for mortgage lenders to lower bills on second mortgages The Obama administration is expected to announce Tuesday that it is expanding its plan to stem the housing crisis by offering mortgage lenders incentives to lower borrowers' bills on second mortgages. During the housing boom, lenders readily gave out "piggyback" second loans that allowed consumers to make small down payments or avoid fees entirely. While home prices soared, such mortgages were even extended to borrowers with poor credit scores and people who didn't provide proof of their incomes.
US home prices post 18.6 pct annual drop in Feb. Index shows US housing prices falling by 18.6 percent in February, but no annual record Home prices dropped sharply in February, but for the first time in 25 months the decline was not a record, another sign the housing crisis could be bottoming. The Standard & Poor's/Case-Shiller index released Tuesday showed home prices in 20 major cities tumbled by 18.6 percent from February 2008. That was slightly better than January's 19 percent and the first time since January 2007 the index didn't set a record. The 10-city index slid 18.8 percent, the first time in 16 months its decline was not a record.
A Look at Case-Shiller Numbers, by Metro Area The S&P/Case-Shiller home-price index, a closely watched gauge of U.S. home prices, showed accelerating price declines in November. No area experienced year-over-year price gains, the eighth straight month that has happened. None of the cities managed to avoid month-to-month declines for the second month in a row. In September, Cleveland and Boston managed to eke out gains from the prior month, while prices were flat in Chicago and Denver. Phoenix, Las Vegas and San Francisco continued to lead decliners, all with monthly drops over 3% and year-to-year drops over 30%.
CalPERS to vote against BofA board re-election California pension fund to vote against Bank of America's board, including CEO Ken Lewis The California Public Employees' Retirement System, the largest U.S. public pension fund, said Tuesday it will vote against re-electing all 18 Bank of America Corp.'s board members, including Chairman and Chief Executive Ken Lewis. CalPERS, an influential fund, says Lewis and the board failed to disclose information on Bank of America's acquisition of New York-based investment bank Merrill Lynch & Co. The group also opposes the more than $3.6 billion in bonuses that were paid ahead of schedule to Merrill employees before the deal was completed, even as Charlotte-based Bank of America was begging the government for aid to complete the acquisition.
Salbuchi - Global Meltdown: What we Can / Should do - Part 2 Describes practical example of how Finance and Economy can be put back straight again. To do this, we need to apply good Common Sense, which means not listening to the "experts" anymore...
F.D.I.C. Chief Calls for Broader Powers for Agency The chairwoman of the Federal Deposit Insurance Corporation, Sheila C. Bair, said in a speech on Monday that her agency should have broader powers to take over and close a variety of financial institutions to prevent taxpayers from shouldering the losses on firms deemed too big to fail. Instead of just seizing commercial banks, Ms. Bair said the F.D.I.C. should be able to take over troubled insurers, bank holding companies and other insolvent financial institutions and force stockholders and bondholders to bear the cost.
Arlen Specter Leaves GOP, Shifting Senate Balance Democrats Are Poised to Hold A Powerful 60-Seat Majority Sen. Arlen Specter of Pennsylvania provided a boost to President Obama's ambitious legislative agenda yesterday by abandoning the Republican Party in the face of shifting political realities at home and an aggressive courtship by the White House and party leaders. In an announcement that shocked colleagues on both sides of the aisle, Specter said he had become increasingly uncomfortable as a moderate in a party dominated by conservatives and would join the Democrats. He bluntly admitted that his decision was tied to his belief that he could not win reelection as a Republican next year.
Terror Plane Photo-Op Cost $328,835 Obama Orders Review of New York Flight as Cost Put at $328,835 President Barack Obama ordered a review of a publicity-photo shoot with one of the planes that serves as Air Force One that cost taxpayers $328,835 and caused a furor in New York City. Obama said he wasn't informed in advance of yesterday's low-altitude flight over New York Harbor, which rattled windows in New York's financial district and prompted some office workers to flee buildings in fear it was a terrorist attack. "It was a mistake," Obama said today before a meeting at FBI headquarters in Washington. "It will not happen again."
Flu could derail fragile global economy If the outbreak spreads quickly, analysts say the effect on trade could prolong - or even deepen - the recession. A quick and extensive swine flu epidemic could derail a global economic recovery, and even prolong and deepen the worldwide recession, economists said Monday. "We're not there right now. This has to first become a large-scale pandemic," said James Auger, senior analyst, North America, with IHS Global Insight, a global economic research and forecasting firm.
US flu cases rise, officials warn will worsen US swine flu cases, hospitalizations rise; Obama seeks $1.5b to fight outbreak Swine flu cases in the United States rose above 60 on Tuesday as governments around the world intensified steps to battle the outbreak that has killed scores of people in Mexico. President Barack Obama asked Congress for $1.5 billion to fight the fast-spreading disease. Federal officials suggested the flu may be spreading so fast, there may be no practical way to contain it, and no need to tighten borders further. So far, there have been no deaths from the fast-spreading virus in the United States.
Swine Flu Pandemic Outbreak Model - G4T Update
Swine Flu In this video, Dr. Joe Bresee with the CDC Influenza Division describes swine flu - its signs and symptoms, how it's transmitted, medicines to treat it, steps people can take to protect themselves from it, and what people should do if they become ill.
Chrysler lenders and Treasury reach deal The U.S. Treasury has reached an agreement in principle with Chrysler LLC's first-lien lenders that may help the troubled automaker avoid bankruptcy, two people briefed on the discussions said on Tuesday. The terms of the high-stakes debt restructuring deal were not immediately available, and representatives of Chrysler, the lenders and the Treasury could not be immediately reached for comment.
GM to force more than 1,000 dealers to close General Motors tells dealers it will force more than 1,000 underperforming outlets to close General Motors Corp. told its dealers Tuesday that it will force 1,000 to 1,200 underperforming locations to close their doors as the automaker tries to thin dealer ranks to make the remaining outlets more profitable. GM told the dealers about the plan in a video conference, according to a dealer who spoke on condition of anonymity because the video conference was private. It is part of the company's plan announced Monday to cut more than 2,600 dealers by 2010.
Tentative Deal Set on Chrysler Debt to Avert Bankruptcy The Obama administration is prepared to force Chrysler into bankruptcy by the end of the week unless it gets unanimous consent from a group of banks and hedge funds to retire the automaker's debt. The Treasury Department has told the lenders - 46 creditors in all - that they must accept $2 billion in cash to eliminate about $6.9 billion in secured debt by a deadline on Thursday. Anything short of total agreement to the terms would cause a bankruptcy filing, people close to the negotiations said Tuesday. None would agree to be identified because the talks have not been completed.
GM's New Road Map: Partial Nationalization Automaker to Shed Brands and Workers; Future Hinges on Deal With Bondholders Once a symbol of capitalist might and U.S. industrial prowess, General Motors would be half owned by the Treasury under a new sweeping plan that would also shut down GM's Pontiac operations, lay off 21,000 workers and impose harsh terms on the company's bondholders. The partial nationalization proposal -- a last-ditch effort developed by GM and the Obama administration's auto task force to keep the leading U.S. carmaker out of bankruptcy -- raised hackles in Congress and ratcheted up the game of brinkmanship with the company's bondholders, who have until May 8 to accept or to try to negotiate better terms.
GM cuts: Coming to a town near you Location, car models, and union deals are all factors General Motors will consider as it decides where its 23,000 layoffs will be made. Saying they'll cut costs is the easy part. Now, in order to stave off bankruptcy, comes the hard part: General Motors must axe 23,000 people and decide which plants to keep open, and which to permanently shut down. The company probably still doesn't know which factories it will close, analysts say. Over the next few weeks, GM execs will pour over numbers, charts and strategy as the government's end-of-May deadline for a viability plan approaches.
U.S. Home Prices Continued to Decline in February Phoenix has achieved the unwelcome distinction of becoming the first major American city where home prices have fallen in half since the market peaked in the middle of the decade, according to data released Tuesday. Though historical statistics are scant, experts said the precipitous decline probably had few if any equals in modern times. "Even during the Depression, I'm not sure prices fell this quickly," said Karl Guntermann, a professor of real estate at Arizona State University.
Clinton Says U.S. Is Ready to Lead on Climate After eight years largely on the sidelines of the international policy debate on climate change, the United States is prepared to lead negotiations toward a new global warming treaty, Secretary of State Hillary Rodham Clinton said Monday. "The United States is fully engaged and determined to lead and make up for lost time both at home and abroad," Mrs. Clinton told delegates from 16 countries at a State Department conference on energy and climate. "We are back in the game."
Global warming alarmists out in cold IT'S snowing in April. Ice is spreading in Antarctica. The Great Barrier Reef is as healthy as ever. And that's just the news of the past week. Truly, it never rains but it pours - and all over our global warming alarmists. Time's up for this absurd scaremongering. The fears are being contradicted by the facts, and more so by the week.
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Tues 04.28.2009
The History and Revisionist Theory of the Great Depression -- Can It Happen Again?
Excellent! One of the best articles you'll read on banking crisis: Falsifying Bank Balance Sheets by Antal E. Fekete Professor of Money and Banking San Francisco School of Economics . . . In 2009 we are wondering what has hit our banks. No mystery there. It was not subprime mortgages nor other loose lending practices. The banking crisis is entirely self-inflicted or, more precisely, government-inflicted the origins of which go back almost ninety years: faking balance sheets. That practice cannot go on forever. The day of reckoning comes when capital is called upon to do what it is supposed to do: to tie over the bank during a temporary setback. The kitty is opened, and found empty. Bank capital is gone, due to earlier legerdemain in trying to paper over paper losses. (No pun intended.)
The situation is actually worse, as far as the condition of our banks is concerned. . . . .
. . . . If you examine the latest measures initiated by the Geithner Treasury, there is indeed reason for alarm. Treasury Secretary Timothy Geithner openly invites private investors to speculate, risk free, in buying the toxic assets of the banking system. The risks, should they materialize, are covered by pledging, most improperly, the assets of the FDIC. If the gamble succeeds, private investors may keep the assets they have bought on the cheap. Otherwise the FDIC will pick up the tab and will reimburse investors for their losses.
The Effects of Inflation The effects of monetary inflation are three-fold. First, it brings about an unwarranted transfer of purchasing power (resources) to the creator of the new money and/or the first user of the new money. Another name for this unwarranted transfer is theft. Second, it has a NON-UNIFORM effect on prices, leading to mal-investment and the wastage of resources. The huge amount of savings and resources squandered in real-estate investments over the past several years exemplifies the havoc that can result from monetary inflation and why its effects cannot simply be counteracted at some later time by "withdrawing liquidity". Third, it EVENTUALLY results in a broad-based increase in the prices of everyday goods and services.
A Run On Gold Eagles?! Most people have never held a gold coin in their hands. Historically, an ounce of gold was worth a year's wages. Today, you can get one for about a thousand bucks. Seems like they must be rather common then. Not really. Still, most people have never held one or seen one. It's the lack of demand, and lack of knowledge out there. But demand is soaring from about 0% to maybe about one person in 23,000 of the population actually wanting one. Actually it's less people, since most people who have one, actually have more than one. ($14,000,000 million cash in the banks / $600 million market = 23,000).
4 more banks fail, lifting this year's tally to 29 Regulators shut banks in Georgia, Michigan, Idaho, California; 29 so far tops 2008 total Regulators on Friday shut down four more banks, boosting the number of failures this year to 29 -- more bank closures than in all of last year. The latest banks seized were American Southern Bank in Georgia, Michigan Heritage Bank, First Bank of Idaho, and First Bank of Beverly Hills in California. The Federal Deposit Insurance Corp. will continue to insure deposits at American Southern Bank, Michigan Heritage Bank, and First Bank of Idaho. The FDIC will payout the insured deposits of First Bank of Beverly Hills. Regular deposit accounts are insured up to $250,000.
At Fed meeting, central bank will weigh options New programs to jump-start economy unlikely, as are interest rate changes As the recession grinds on, Federal Reserve policymakers will open a two-day meeting Tuesday to make a fresh assessment of U.S. economic conditions, review the effectiveness of programs in place and weigh whether they need to expand or change them. Any policy decisions would come Wednesday.
TARP’s Price Tag Could Reach $2.9 Trillion, Inspector General Says For many Americans, the $700-billion financial bailout was a tough pill to swallow, but the cost to taxpayers could reach $2.9 trillion – nearly on par with the entire federal budget – according to the watchdog agency charged with oversight of the Troubled Assets Relief Program (TARP). Although the Treasury Department is only authorized to spend the $700 billion approved last year by Congress and signed by the president, the Federal Reserve and Federal Deposit Insurance Corporation (FDIC) will invest up to $1 trillion each in partnering with the Treasury Department’s TARP.
G7 & G20: "Gee, Things Are Bad!" Finance ministers from around the world, including U.S. Treasury Secretary Timothy Geithner, have held a sort of economic summit this weekend in Washington D.C. While there appears to be signs that the global economy is in the process of stabilizing, financial ministers remain cautious that the world may not emerge from what is being categorized as the worst recession in decades until the middle of next year.
Marc Faber The FED will continue Printing Money
China gold stocks hit $US31bn after extensive buying CHINA has revealed it bought 454 tonnes of gold in the past six years as its foreign-exchange reserves surged, bringing its total holding of the precious metal to $US31 billion. In China's first update of gold stocks since 2003, Hu Xiaolian, head of the state administration of foreign exchange, said the country's bullion stockpiles had grown from 600 tonnes to 1054 tonnes, giving it the world's sixth-biggest holdings. The news is a positive sign for the prospects of gold, which is forecast to be Australia's third-biggest export earner next year, and confirms expectations China was boosting its stockpiles.
G-7 Says Strength of Rebound Depends on Bad Assets The Group of Seven finance chiefs' ability to handle banks' toxic assets will determine the strength of the economic recovery they now say will begin this year. In warning that the world economy could still take another turn for the worse, the finance ministers and central bankers who met over the weekend in Washington singled out the banks' impaired balance sheets as the biggest threat to a sustainable recovery.
Roubini Says U.S. Stress Tests Not 'Serious,' Banks Insolvent A persistent recession and mounting unemployment will leave the U.S. financial system "insolvent," implying the stress tests performed by regulators weren't rigorous enough, said Nouriel Roubini, the New York University economics professor who predicted the financial crisis. Losses at U.S. banks and broker dealers will swell to $1.8 trillion, almost 100 percent more than the current amount, as the economic slump lasts at least through this year and the jobless rate climbs to 12 percent by 2010, Roubini said today at the CFA Institute's annual conference in Orlando, Florida.
Recession, Far From Over, Already Setting Records THE current recession has become the second-worst in the last half-century and is close to surpassing the severe 1973-75 downturn, according to the Index of Coincident Indicators, based on government data and compiled each month by the Conference Board, a private organization. Unlike the more widely followed Index of Leading Indicators, which is supposed to help forecast changes in the economy, the coincident index is aimed at simply recording how the economy is doing now.
Obama's legacy will turn on economic results Economic crisis is Obama's greatest challenge, principal focus The economy will determine whether Barack Obama achieves what few presidents have: a far-reaching change in American politics that might even earn its own title and legacy. Will there be an Obama version of the New Deal, the Great Society or the Reagan Revolution? Afghanistan, North Korea and other foreign hot spots certainly will test Obama. But the deeply troubled economy is his signature challenge and the focus of his greatest efforts, attention and gambles in his first 100 days in office.
White House miscalculations linger For those who were hoping that the Barack Obama administration had genuinely intended to resolve issues between Washington and Tehran, recent news has been disappointing. Hillary Clinton, in her first congressional testimony since becoming secretary of state, commented, "We actually believe that by following the diplomatic path we are on, we gain credibility and influence with a number of nations who would have to participate in order to make the sanctions regime as tight and as crippling as we would want it to be."
Stress Tests Put Obama Administration in “No-Win” Situation The Obama administration may have backed itself into a corner when it released the details of the "stress test" methodology being used to evaluate the health of the nation’s big banks. With final results not expected to be released until May 4, releasing the testing methods for Citigroup Inc., JPMorgan Chase & Co., Bank of America Corp., and 16 other banks is only likely to increase market speculation - the exact result Obama’s economic team is trying to avoid.
Reflation watch The Morgan Stanley Cyclical index surged 7.0% last week and has now rallied 85% off of March 6 lows. Over this period, the S&P Homebuilding index is up 85%. The banks have risen 95% off lows, while the Morgan Stanley Retail index has rallied 64%. I thought it made sense to take a closer look at global reflation dynamics. Various risk markets have traditionally provided early indicators of reflationary dynamics. The "emerging" economies are clearly responding to the loosened global monetary backdrop.
Wall Street Shuts Off Money Supply To Capitol Hill In a move that may surprise a lot of folks, Wall Street reduced its political giving to just a few tiny drips in the first quarter of 2008. The total donations from employees at the top five banks receiving TARP capital was down 97% from the first quarter of 2007, according to an investigation by the Washington Independent. The reason for the decline isn't clear. As Washington and Wall Street move into an ever tighter relationship, with many banks dependent on taxpayer funds for their survival, you might expect political giving to increase. The Independent raises three plausible explanations for the drop in donations.
Tim Geithner Was Offered The Citi CEO Job Tim Geithner formed all his views of the financial crisis during his time as President of the New York Fed, where he worked side-by-side with many of the top banking CEOs. Because of this, and his conclusion that we're still just in a liquidity crisis, he's been an advocate of generous bailing out in order to get the credit flowing again. But the NYT has done some excellent digging to shed more light on just how close to Wall Street and Wall Street-friendly Geithner has been.
Are the Knives are Coming Out for Geithner? The clout of the press has decayed enormously over the last 40 years. The fourth estate was feared, resented, and begrudgingly respected in the corridors of power. But rule by beancounters, savvy media spin, and access journalism (journalists who write pointed stories get frozen out) have largely leashed and collared the press. Indeed, a friend who grew up in Eastern Europe when it was Communist said as of roughly 2000 that the news felt controlled.
Geithner, as Member and Overseer, Forged Ties to Finance Club Last June, with a financial hurricane gathering force, Treasury Secretary Henry M. Paulson Jr. convened the nation’s economic stewards for a brainstorming session. What emergency powers might the government want at its disposal to confront the crisis? he asked. Timothy F. Geithner, who as president of the New York Federal Reserve Bank oversaw many of the nation’s most powerful financial institutions, stunned the group with the audacity of his answer. He proposed asking Congress to give the president broad power to guarantee all the debt in the banking system, according to two participants, including Michele Davis, then an assistant Treasury secretary.
Who Else Did Hank Paulson Push Around? .... Ken Lewis is no innocent, but Hank Paulson comes off like a fracking psycho in Andrew Cuomo's letter to the SEC and TARP oversight committee. Cuomo basically gets Lewis to admit that he was taking one for the team (America) at the expense of his own shareholders, but would only admit that the negative impact of buying loss-laden Merrill would affect shareholders with a short-term time horizon. That's like a deli owner knowingly poisoning customers with day-old egg salad only between noon and two pm, followed by a fresh batch being put out for the dinner rush. There are also several insinuations uncovered by Cuomo's investigation that Paulson threatened the board of Bank of America with losing their jobs if they publicly discussed Merrill's imploding financial condition or sought to terminate the merger agreement.
Nouriel Roubini "I'm a realist" on Canadian Business Network 1/2
One Nation, Under Banks With Justice for No One The spectacle of Ben Bernanke and Henry Paulson running roughshod over Kenneth Lewis and his minions at Bank of America Corp. raises a pivotal question for all Americans: Is the U.S. a nation of laws, or a nation of banks? Let's start by examining the facts disclosed last week in a letter by New York Attorney General Andrew Cuomo, while taking pains to present the actions of each player in this drama in the fairest possible light.
Obama Overthrows Reagan's Government-Bad Dogma to Rescue Market Ronald Reagan used to joke that the nine most terrifying words in the English language were "I'm from the government and I'm here to help." Barack Obama is making those words welcome. As he approaches his 100th day in office, Obama is rolling back the Reagan Revolution and restoring government to a central role in the economy. He has passed the biggest budget stimulus ever, prepared the way for an overhaul of the U.S. automobile and banking industries and proposed a $634 billion government- funded expansion of health-care benefits.
Obama's Plans May Be Doomed by Unchecked Spending "A hundred million there, a hundred million here, pretty soon, even in Washington, it adds up to real money," President Barack Obama declared last week, paraphrasing a line attributed to the late Republican Senate leader, Everett Dirksen. The context is a looming policy and fiscal clash: Obama's economic, energy, health-care and education initiatives are expensive, and the U.S. faces trillion-dollar deficits as far as the eye can see. The president can make a compelling case that these priorities are urgent and can help revive the economy. Still, those initiatives, and a strong economy, may be unattainable without fiscal discipline elsewhere.
Schmidt's Gold Thoughts . . . . Just as mankind can not repeal the laws of physics, it can not repeal the "Laws of Money." The Federal Reserve is aggressively attempting to defy the "Laws of Money," believing that it can stuff the money genie back in the bottle anytime it desires to do so. . . . . . . . . Ultimately, this massive debt monetization will have an impact on the value of the U.S. dollar. To argue otherwise is to repudiate all of monetary history. The inevitability of the depreciation of the U.S. dollar that will follow is not in dispute by any reasonable or objective observers. Ideologues now in power in the Obama Regime may argue otherwise. However, ideology does not trump reality.
Stress Tests May Force Banks to Convert TARP Stock U.S. banks that received results of their federal stress tests last week were given three options if they need additional capital to withstand the recession. The reality is they may only have one. Getting federal aid or selling shares -- two of the choices offered to the 19 lenders being tested -- aren't practical politically or financially, according to analysts, including Jeff Davis, the research director at Howe Barnes Hoefer & Arnett Inc. in Chicago. Lawmakers have opposed adding more to the $700 billion that the government already committed and investors have balked at buying shares of financial firms after a two-year drop.
Fed study puts ideal US interest rate at -5% The ideal interest rate for the US economy in current conditions would be minus 5 per cent, according to internal analysis prepared for the Federal Reserve's last policy meeting. The analysis was based on a so-called Taylor-rule approach that estimates an appropriate interest rate based on unemployment and inflation.
IMF Says G-20 Fiscal Stimulus Will Reach 2% Target The International Monetary Fund raised its estimate for how much fiscal stimulus governments are injecting in an effort to fight the worst global recession since World War II. The Washington-based lender said yesterday that the Group of 20 industrial and developing countries had committed to spending increases and tax cuts totaling 2 percent of their gross domestic product this year and 1.5 percent next year. That marks an increase from last month's estimates of 1.8 percent for 2009 and 1.3 percent for 2010.
Paulson's 'Gift' to Lewis Delivered at Gunpoint Oil and water don't mix. Neither do business and politics, a truism becoming increasingly obvious with each new government initiative, or the exposure of fissures in the old ones, to save the financial system. The latest example of what happens when the business of government is business was last week's release of testimony from Bank of America Chief Executive Officer Kenneth Lewis to New York Attorney General Andrew Cuomo. In it, Lewis says he was strong-armed by former Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke to seal the deal to buy Merrill Lynch without telling his shareholders about the brokerage's mounting fourth-quarter losses, which came to $15.4 billion.
Cycle Revisited by Howard Ruff John Williams publishes the Shadow Government Statistics newsletter (www.shadowstats.com). He is an amazing professional economist with a great grasp of the real economy. He and I have arrived at the same conclusions about almost everything in the economy, despite the fact that we approach it from totally different directions: me from the fundamentals, and he from a real technical and numbers point of view. I am now in John's home in Oakland, California, looking past the government numbers to get his views on the world as it really is. Shadow Government Statistics reconstructs published government statistics the accurate way we used to do it that reflects reality, rather than the way these numbers are now manipulated, and comes up with different conclusions about the economy, such as the Consumer Price Index (CPI), and other revealing areas published by government.
Nouriel Roubini "I'm a realist" on Canadian Business Network 2/2
GM Debt-Exchange Plan Faces Hurdle - $$ A Counteroffer or Court Challenge From Bondholders' Group Is Possible General Motors Corp.'s bonds rose slightly and the cost of debt insurance fell after the auto maker announced its widely anticipated tender offer to eliminate $27 billion of bonds outstanding. But bondholders late Monday indicated they were far from happy with the offer. People close to an ad hoc committee representing bondholders said the group is preparing to make a counterproposal within the next 10 days. These people also said the offer may be challenged in court.
US to take majority GM stake US taxpayers would take a majority shareholding in General Motors under a sweeping debt-for-equity restructuring proposal that the carmaker revealed on Monday in a bid to avoid bankruptcy. Under the plan, GM said it would shut 13 of 47 plants by the end of next year, resulting in an additional 7,000 job losses. The latest job cuts would reduce GM's US workforce from 61,000 last year to about 40,000 by the end of 2010.
GM to cut 21,000 US factory jobs, shed Pontiac General Motors to cut 21,000 US factory jobs, shed Pontiac as it speeds restructuring effort General Motors Corp. said it will cut 21,000 U.S. factory jobs by next year, phase out its storied Pontiac brand and ask the government to take more than half its stock in exchange for half of GM's government debt as part of a major restructuring that would leave current shareholders holding just 1 percent of the company.
Faster Cuts and More Loans Are Key to G.M. Survival Plan General Motors said on Monday that it needed $11.6 billion more in government loans and that it planned to file for bankruptcy protection if a debt exchange with its bondholders was unsuccessful. G.M. also said that, by 2010, it would phase out its Pontiac brand, eliminate 42 percent of its dealers, close 13 plants and cut 21,000 hourly jobs as part of its revised restructuring plan.
UAW to Get 55% Stake in Chrysler for Concessions - $$ The United Auto Workers union would eventually own 55% of the stock in a restructured Chrysler LLC under the deal reached by the union and the auto maker, according to a summary of the agreement that was reviewed by the Wall Street Journal. Fiat SpA "eventually" will own 35%, and the U.S. government and Chrysler's secured lenders together will end up owning 10% of the company once it is reorganized, that summary said. The summary was distributed Monday evening at a gathering of union leaders in Sterling Heights, Mich. The deal was first disclosed Sunday night. The UAW aims for Chrysler workers to vote Wednesday on the proposed agreement, which requires changes to the union's current Chrysler contract.
Increasingly, not just the poor are uninsured Officials say economic downturn is leaving those in the middle class without insurance The free-falling economy is sending many more people to the state's clinics that treat the uninsured. Last month, 2,498 patients without health insurance went to the clinics of Nevada Health Centers, a federally funded program that charges on a sliding scale. That's 52 percent more than in March 2008, when the clinics saw 1,642. If you look at the past six months compared with the previous six months, the increase is less, but still striking: 21.5 percent. Patricia Durbin, executive director of the Great Basin Primary Care Association, a nonprofit organization that promotes health care for people in need, said she didn't find those numbers surprising, given double-digit and growing unemployment rates.
WHO raises global alert level on swine flu WHO raises global alert level, signaling swine flu is spreading, but stops short of pandemic The swine flu epidemic entered a dangerous new phase Monday as the death toll climbed in Mexico and the number of suspected cases there and in the United States nearly doubled. The World Health Organization raised its alert level but stopped short of declaring a global emergency. The United States advised Americans against most travel to Mexico and ordered stepped up border checks in neighboring states. The European Union health commissioner advised Europeans to avoid nonessential travel both to Mexico and parts of the United States. The virus poses a potentially grave new threat to the U.S. economy, which was showing tentative early signs of a recovery. A widespread outbreak could batter tourism, food and transportation industries, deepening the recession in the U.S. and possibly worldwide.
Peso Tumble, Swine Flu May Prompt Mexico to Tap IMF Credit Line Mexico is more likely to draw on a $47 billion credit line from the International Monetary Fund after the deadly swine flu outbreak sparked the peso's biggest tumble in six months, according to Barclays Capital Inc. The spreading disease "raises the odds of tapping the facility," Eduardo Levy-Yeyati, head of emerging-market strategy at Barclays in New York and a former economist at the IMF, said in an interview. "The flu increases growth risks and currency pressures."
March 24, 1976: President Ford Orders Swine-Flu Shots for All Ford was acting on the advice of medical experts, who believed they were dealing with a virus potentially as deadly as the one that caused the 1918 Spanish influenza pandemic. . . . . It recalled 1918, when infected soldiers returning from the trenches of World War I triggered a contagion that spread quickly around the world, killing at least 20 million people. Fearing another plague, the nation’s health officials urged Ford to authorize a mass inoculation program aimed at reaching every man, woman and child. He did, to the tune of $135 million ($500 million in today’s money).
Congressman Paul on the Recent Swine Flu Scare
Monday - Apr 27, 2009 Government's Terror Plane Forces Evacuations All Over Financial District, Jersey City The plane that circled the Hudson River near lower Manhattan was an Air Force One on a "photo op" for the government. The FAA says that officials in New York were notified. But apparently the notification did not extend to Manhattan and Jersey City office buildings, many of which were evacuated this morning. Panicked office workers in the financial district and Jersey City were forced down stairs in a scene that recalled that terrible day in September 2001. One office worker reported having to rush down 40 flights on stairs in lower Manhattan.
'Panic Can Spread More Quickly Than Swine Flu' With the first case of swine flu confirmed in Europe, the world is gripped by fear of a global pandemic. German newspapers on Monday examine the measures taken to contain the disease and some warn against the spread of panic. With more than 100 people dead in Mexico and almost 30 infected in the US and Canada, the threat of a flu pandemic is gripping the world. Although there had been hopes that the emergency could be contained to the North American continent, Europe saw its first confirmed case on Monday.
US Declares Public Health Emergency for Swine Flu The U.S. declared a public health emergency Sunday to deal with the emerging new swine flu, much like the government does to prepare for approaching hurricanes. Officials reported 20 U.S. cases of swine flu in five states so far, with the latest in Ohio and New York. Unlike in Mexico where the same strain appears to be killing dozens of people, cases in the United State have been mild -- and U.S. health authorities can't yet explain why.
Is Swine Flu A Biological Weapon? Or are relatively limited number of deaths an indication that the panic is worse than the actual threat? There are some factors that suggest the swine flu killing people in Mexico may be a biological weapon, but obviously no such conclusion can be drawn at this time. The World Health Organization and the U.S. government have been quick to deny such claims. The swine flu virus is described as a completely new strain, an intercontinental mixture of human, avian and swine viruses. Tellingly, there have been no reported A-H1N1 infections of pigs. According to a source known to former NSA official Wayne Madsen, “A top scientist for the United Nations, who has examined the outbreak of the deadly Ebola virus in Africa, as well as HIV/AIDS victims, concluded that H1N1 possesses certain transmission “vectors” that suggest that the new flu strain has been genetically-manufactured as a military biological warfare weapon.
Swine Flu Pandemic Would Cost Trillions This afternoon, the WHO declared that the swine flu outbreak in Mexico and the U.S. is a health emergency of international concern. Reuters has put together a list of estimates of the economics costs that may be incurred if swine flu becomes a full out pandemic. The World Bank estimated in 2008 that a flu pandemic could cost $3 trillion and result in a nearly 5 percent drop in world gross domestic product. The World Bank has estimated that more than 70 million people could die worldwide in a severe pandemic.
Baxter To Develop Swine Flu Vaccine Despite Bird Flu Scandal The fox has been given the duty of guarding the henhouse A U.S. based pharmaceutical company that just weeks ago was involved in a scandal involving vaccines tainted with deadly avian flu virus has been chosen to head up efforts to produce a vaccine for the Mexican swine flu that has seemingly migrated into the U.S. and Europe. Baxter confirmed over the weekend that it is working with the World Health Organization on a potential vaccine to curb the deadly swine flu virus that is blamed for scores of deaths in Mexico and has emerged as a threat in the U.S., reports the Chicago Tribune.
CDC: US begins border monitoring for swine flu CDC: US has begun monitoring borders for evidence of swine flu spread, urges calm among public Amid surging worries about a global pandemic, the United States launched border screening for swine flu exposure Monday and a top federal health official said people should brace for more severe cases, "and possibly deaths." Meanwhile, President Barack Obama says the spread of swine flu is a cause for concern but "not a cause of alarm" and he's staying on top of the problem. Obama told a gathering of scientists Monday that the administration is "closely monitoring" cases of swine flu, how many people have it and what the threat is. Obama also said the American people can expect to get regular and frequent updates about what Washington is doing.
Secession: the Ultimate States' Right by Ron Paul Last week the governor of Texas ignited a media firestorm for his remarks involving the idea of secession. He did not call for Texas to secede from the United States. He merely pointed out that the federal government was treading heavily on the sovereignty of the states and that this can not continue indefinitely without a breaking point. The reaction to Governor Perry's statements has been nothing short of hysterical. He has been called treasonous for making this obvious point and opening up a discussion. I am not calling for secession either, however there is nothing wrong with a healthy and open discussion of this issue.
More Atheists Shout It From the Rooftops CHARLESTON, S.C. — Two months after the local atheist organization here put up a billboard saying “Don’t Believe in God? You Are Not Alone,” the group’s 13 board members met in Laura and Alex Kasman’s living room to grapple with the fallout. The problem was not that the group, the Secular Humanists of the Lowcountry, had attracted an outpouring of hostility. It was the opposite. An overflow audience of more than 100 had showed up for their most recent public symposium, and the board members discussed whether it was time to find a larger place.
Falungong silent in China, thriving abroad HONG KONG - Over the past decade, China's leadership has stood up to a daunting array of challenges as the nation continued its rise as a world power. Remarkably, one of the largest has been an army of meditation and exercise addicts whose leader claims to have supernatural powers. Ten years ago this week the Falungong, an organization devoted to a variety of the ancient practice of qigong or deep-breathing exercises, shook the Chinese government to its core. In the largest demonstration since the occupation of Tiananmen Square by student-led pro-democracy demonstrators in 1989, more than 10,000 Falungong practitioners gathered outside Zhongnanhai, the red-walled Communist Party headquarters in Beijing. There they demanded the release of 50 sect members who had been detained in the northern city of Tianjin and government recognition of the group as a legal entity.
Ron Paul gets some love from Hillary Clinton 04/22/2009 CSPAN
How Does $9000 Gold Sound? In recent days the Canadian and Swedish central banks have joined the majority of other G10 central banks by indicating that they too may engage in quantitative easing now that the interest rates have been reduced to 25 and 50 basis points respectively. The ECB is wrestling with ways to extend its own form of quantitative easing and an announcement is likely at its next meeting on May 7th.
Gold Up Sharply as the Bear Market Rally Falters Gold finished the week up 5.1 per cent at $913 while silver jumped 8.4 per cent to $12.90 as precious metals became a safe haven from the faltering six-week old bear market rally. This left gold prices at their highest levels in three weeks but fell short of a third break of the $1,000 barrier. However, the precious metals clearly established their position as the place to be as the bear market rally breaks down.
The capital well is running dry and some economies will wither The world is running out of capital. We cannot take it for granted that the global bond markets will prove deep enough to fund the $6 trillion or so needed for the Obama fiscal package, US-European bank bail-outs, and ballooning deficits almost everywhere. Unless this capital is forthcoming, a clutch of countries will prove unable to roll over their debts at a bearable cost. Those that cannot print money to tide them through, either because they no longer have a national currency (Ireland, Club Med), or because they borrowed abroad (East Europe), run the biggest risk of default.
Americans Rally Nationwide to End the Fed “End the Fed” rallies were staged across the nation in more than two dozen cities April 25. Attendees protested in front of every one of the dozen Federal Reserve Bank branches and expressed support of Ron Paul’s H.R. 833, which would abolish the Fed, and H.R. 1207, which would provide an independent audit of the quasi-private central bank. Peter Schiff keynoted the rally in New York City, noting of the current economic bust: “The Federal Reserve was behind all of it and we’re not going to get to the root of our economic problems unless we get to the root cause, which is the Federal Reserve and the phony monetary system we now have.”
End The Fed Rally NYC 1/2 - Who is the CRAZY Guy?!!!
China turns IMF gold sales into a wet noodle There may be some misunderstanding about the increase in Chinese gold reserves. The bulk of that gold has come from purchases of their own domestic production, not open-market purchases, so the impact on the price is indirect. But because China is the largest gold producer in the world and it is retaining the bulk of its production for reserve diversification, the impact is significant.
Gold, Silver - Important Alert! The Gold Direction Indicator is flashing another buy signal. This indicates that the pull-back that started late February is probably finished. A new rally is about to start. Some of the monetary inflation that the Obama team is injecting into the system is starting to turn into price inflation. The stock market rally which had drawn attention and money away from the gold market is running out of steam.
Buy Silver.... Now “by 2010 … banks will have enormous raw materials for … inflation.” Dr. Feldstein is one of the economists (there are many) 1 concerned that the Fed will follow form and not be able to handle the expanded money supply once money multiplier (velocity) turns up. As I pointed out on Monday’s Morning Note, the St Louis fed multiplier has fallen 40%, the same decline as during the Depression. Now most believe, including Dr. Feldstein, that the global economic recession will run “somewhere into 2010.” In the meantime there is more than a hint of disinflation in the global “air.” In Spain it is outright deflation with 35% unemployment in the under 25 age group.
Unintended Consequences by Peter Schiff With much fanfare this week, Congress and the Administration began a series of actions designed to protect over-leveraged consumers from the high fees imposed by credit card lenders. As with most other initiatives devised by government, this policy will create a host of unintended consequences that will undermine the benefit the program hopes to create. Anyone who carries a credit card knows that billing practices have become much more aggressive, punitive, and seemingly arbitrary over recent years. Sadly, these fees have become one of the only means the companies can use to compensate for the increasing defaults on their unsecured loans.
Fed Scandal Puts The Us Dollar Under Virtual Attack.... ...on the forex market, and if the front page article in yesterday’s Wall Street Journal regarding the Bank of America’s President, Mr. Lewis, the former Treasury Sec’y, Mr. Paulson, and Dr. Bernanke is even half way toward the truth the dollarwill be under even further material selling. If what Mr. Lewis has accused Dr. Bernanke of…. being directly complicit in withholding information from the BofA’s shareholders and from the American taxpayers regarding the Bank’s problems with assimilating Merrill Lynch… is even tangentially correct, Dr. Bernanke is economic and political “toast.”
Dollar Wins Heads-or-Tails Toss on Growth or Weakening Economy Former Federal Reserve Chairman Alan Greenspan said five years ago that predicting currencies is no better than tossing a coin. A growing number of traders are betting that heads or tails, the dollar wins. Investors bullish on the U.S. economy say the dollar will strengthen as America recovers first from the global economic recession. Those who expect the longest contraction since the early 1980s to continue say the currency should appreciate as the haven from turmoil in world markets. Foreign investors bought a net $22 billion of U.S. financial assets in February, the Treasury Department said April 15.
The Fed Needs A TARP Bailout The Federal Reserve has released fresh information on what assets it took on via the bailout of Bear Stearns and AIG. Not surprisingly, it's a bunch of toxic sludge -- $74 billion worth -- and it's already taken about $9.6 billion worth of losses. The upshot. The Fed may need a bailout:
Summers Says U.S. Economy to Decline ‘For Some Time’ The U.S. economy will continue to contract “for some time to come,” said Lawrence Summers, director of the White House National Economic Council. “I expect the economy will continue to decline,” with “sharp declines in employment for quite some time this year,” Summers said today on “Fox News Sunday.”
End The Fed Rally NYC 2/2 Peter Schiff Speaks to Angry Crowd!
Bear, AIG Dumped $74 Billion in Subprime, CDOs on Fed The Federal Reserve took on more than $74 billion in subprime mortgages, depreciating commercial leases and other assets after Bear Stearns Cos. and American International Group Inc. collapsed. In its biggest disclosure of the securities accepted to stabilize capital markets, the Fed said yesterday it had unrealized losses of $9.6 billion on the assets as of Dec. 31. The bonds, swaps and notes were taken in from Bear Stearns, once the fifth-biggest Wall Street firm by capitalization, and AIG, which had been the world’s largest insurer.
Gold and China's Global Currency Threat to the U.S. Dollar . . . . The bulk of international trade transactions have nothing to do with the U.S. except through the use of the $ to denominate their trade. Approximately 75% of global trade is denominated in the U.S. $ in this way. But the volatility of the U.S. $ has distorted and damaged, this aspect of global trade. Thus has been created an ideal environment for gold to rise as its importance in the changing global monetary system grows again.
China's Bubble Will Burst. And Painfully One more bubble, please. After the bubbles in technology, housing, and commodities, we saw the mother of all bubbles: the one in global liquidity. The world economy seemed to require bubbles for its continued functioning. I get the distinct feeling that investors’ prayers are now being answered: There's a new bubble now - or an old one is being re-inflated, depending on your perspective even as I type this. I’d like to call it the Troubled China Revival Program (TCRP).
China Is Not Another Ascendant Superpower, It's Just Another Nation with Structural Problems Correspondent Cheryl A. recently sent in two articles on China's ascendency with stake out the extremes in the thesis. The first is The great shift in global power just hit high gear, sparked by a financial crash: As an emboldened China sees, the American dollar is gravely wounded. And the days of US political supremacy are numbered.
China Won't Be Saving Grace for Commodities . . . . I think Wall Street's thinking that China is going to be the saving grace for commodities is inaccurate. I also think Freeport-McMoRan’s management has blatantly said that they don’t think that copper prices have bottomed out, but they still think that North America has more downward pressure, and they said they don’t think that China is going to be the saving grace.
Chinese Diversification Strategy In a series of maneuvers, Chinese officials have revealed their strategy implementation in a very broad set of steps. Beijing leaders plan to establish the yuan currency as a global reserve currency. The process will be made more complete after issuance of a large volume of Chinese Govt debt securities, soon in coming. The number of policy actions is impressive. While the USGovt is busy stepping backwards with FASB rules enabling false bank accounting, gearing up Treasury programs to direct colossal elite welfare / confiscation to failed banks responsible for the crisis, covering up Wall Street fraud and regulatory lapses and debt rating agency collusion, and ordering pork like the $9 billion high speed train from Disneyland to Las Vegas, the Chinese are making important meaningful critical strides. Within a year, the Chinese will have established the yuan currency as a legitimate alternative to the USDollar for global trade, and later to some extent for global banking. The Chinese Govt has ordered monetary policy changes that have boosted their money supply by 25.5% over the last twelve months, with a giant stimulus program and relaxed bank credit rules.
World looks to U.S. to spark recovery Leaders cite tentative signs of stabilization in American economy While much of the world blames the United States for triggering the global financial crisis and recession, most nations also are looking to America to start pulling the rest of the world out of the slump. A parade of foreign financial leaders in town for this weekend's spring meetings of the International Monetary Fund and World Bank denounced the financial excesses on Wall Street that have cost millions of jobs and caused trillions of dollars in lost output from Detroit to New Delhi. Yet they also hailed some tentative signs of stabilization in the U.S. economy after a winter of free fall that led the world economy into its worst downturn in modern times.
Barack Obama’s financial disaster will be much worse than you probably think. That’s because there is another even bigger financial disaster lurking ahead and that will start to come into play in a few short years.
There are alternatives to the Obama-style socialist health-care reforms. The Obama reform that will compound our financial crisis and create a health-care crisis
You can find better thinking and analysis on our major public policy questions in a free publication than you can in many of the expensive periodicals and newspapers you may be subscribing to.
I.M.F. Planning to Sell Bonds to Finance New Loans Hoping to raise money quickly for a new $500 billion emergency loan program, the International Monetary Fund is in the advanced stages of a plan to sell bonds for the first time in its history, officials for the group said Saturday. The bonds’ buyers are expected to be the governments of fast-growing emerging economic powers like China, Russia, Brazil and India. Though the fund has been authorized for decades to raise cash by selling bonds, officials have never done so because they wanted to avoid what amounts to short-term borrowing.
Warning over UK derivatives backlash London’s status as a leading financial centre risks being damaged if policymakers regulate over-the-counter derivatives without distinguishing between products that contributed to the financial crisis and those that did not, a report commissioned by the City of London Corporation says Monday. The report, prepared by consultancy Bourse Consult, will urge regulators not to “throw the baby out with the bathwater” amid recent calls for OTC – or privately negotiated – derivatives markets to be subjected to greater clearing and regulatory scrutiny.
Finance Chiefs Back a Bolder IMF, Bigger Role for Emerging Nations Global financial chiefs agreed yesterday to reshape the International Monetary Fund, moving to broaden its mission and accelerate plans to give developing giants including China, Brazil and India more say within the institution. The IMF, which in recent years had become largely an advisory body to nations in crisis, will now be charged with aggressive monitoring of the global economy. Underscoring that role, Treasury Secretary Timothy F. Geithner said yesterday that Washington had consented to a rigorous IMF review of the U.S. financial system for the first time since the fund was created at the end of World War II.
Bank CEO Blackmailed By The Federal Reserve And Treasury Department?
Back To The Future Recession - Or The Fed At A Crossroads... . . . .So what happens is, if we increase the supply of money and velocity stays the same, and if GDP does not grow, that means we'll have inflation, because this equation always balances. But if you reduce velocity (which is happening today) and if you don't increase the supply of money, you are going to see deflation. We are watching, for reasons we'll get into in a minute, the velocity of money slow. People are getting nervous, they are not borrowing as much, either because they can't or the animal spirits that Keynes talked about are not quite there.
There Goes More Taxpayer Money Into Wall Street Pockets (GS, JPM, MS) You can stop feeling bad for Wall Street now. Despite, Andrew Cuomo, Glenn Beck, Maxine Waters and the many other vessels of populist outrage, salaries for brokers, bankers and traders are climbing again. In fact, the New York Times points out, Goldman Sachs’ recent earnings report showed the financial giant set aside $4.7 billion for compensation in the first quarter.
Profits mask coming storm Contrary to surface appearances such as the recent stock market rally and "glowing" first quarter profitability statements from certain Wall Street banks, multipronged risks for renewed, considerable turmoil in the US financial sector are mounting. The recent six-week rally on Wall Street, led mostly by banking and other financial shares, isn't based on any concrete turnaround in the deeply worrying fundamentals of the financial sector.
FORECLOSURE ACTIVITY INCREASES 9 PERCENT IN FIRST QUARTER RealtyTrac®, the leading online marketplace for foreclosure properties, today released its U.S. Foreclosure Market Report™ for Q1 2009, which shows that foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 803,489 properties in the first quarter, a 9 percent increase from the previous quarter and an increase of nearly 24 percent from Q1 2008. One in every 159 U.S. housing units received a foreclosure filing during the quarter.
U.S. Housing Market Heading for a Bigger Crash, Another $4 Trillion of Asset Price Deflation Due to the lifting of the foreclosure moratorium at the end of March, the downward slide in housing is gaining speed. The moratorium was initiated in January to give Obama's anti-foreclosure program---which is a combination of mortgage modifications and refinancing---a chance to succeed. The goal of the plan was to keep up to 9 million struggling homeowners in their homes, but it's clear now that the program will fall well-short of its objective.
Chrysler Reaches Labor Accord With UAW, Ratification With CAW Chrysler LLC, racing against an April 30 deadline to cut labor costs or face bankruptcy, reached a tentative contract agreement with its biggest U.S. union and won ratification of a new accord with Canadian workers. Members of the United Auto Workers must still vote on their proposed money-saving contract, according to a statement today from the Detroit-based union.
GM to announce brand changes, restructuring moves GM to hold news conference Monday to announce brand changes, restructuring moves General Motors Corp. will announce details of its massive restructuring plan on Monday, including the demise of its storied Pontiac brand, more factory closures and bigger job cuts as it fights to avoid bankruptcy protection. The struggling automaker must make the announcement in advance of a planned offer to its bondholders to swap debt for company stock. GM owes $28 billion to large and small bondholders, and under Securities and Exchange Commission rules, it must disclose its operational plans before making an exchange offer.
GM Pushes the Throttle in China - $$ Affiliate's Plan to Expand Into Cars Is Seen as a Key to Growth in Asia General Motors Corp. is intensifying its focus on China as it edges closer to a bankruptcy filing in the U.S. and other international units sputter. The auto maker, until recently the world's biggest by output, has remained a relative powerhouse in China thanks to a pair of partnerships: a joint venture with Shanghai Automotive Industry Corp. and a minority interest in microminivan maker Liuzhou Wuling Motors Co.
Time For A Gas Tax (Starting In 2012) We hold this truth to be self-evident: When the global economy recovers, fossil-fuel prices are going to skyrocket again. Why? Three billion new capitalists consuming the same, largely finite resource stream. If there's an intelligent argument why oil will stay at $40 into the hereafter when production is relatively steady and consumption is rising, we'll be happy to evaluate it. But we haven't heard it yet.
Hill battle on war spending looms Critics fault bill's priorities President Obama's $83.4 billion war-spending bill is headed for an unexpectedly tough time on Capitol Hill, where Republicans are scrutinizing the funding priorities and rank-and-file Democrats want to include performance benchmarks for the Afghanistan mission. Despite bipartisan support for Mr. Obama's war policy in Iraq and Afghanistan, Republicans are taking a stand against the more than $81 million requested to shut down the prison camp at U.S. Naval Base Guantanamo Bay, Cuba.
Nouriel Roubini Obama Plan Too Little Too Late
Iceland takes a Left turn Turning Page, Iceland Elects New Leaders - $$ A coalition of left-leaning parties won elections in Iceland on Saturday, decisively beating conservatives who have dominated the island's politics for two decades and are widely blamed for the meltdown in its banking system last fall. The Social Democratic Alliance will hold 20 seats in the 63-seat parliament, and its coalition partner the Left-Green Movement will hold 14, giving the two parties an outright majority, according to results as of Sunday afternoon from state broadcaster RUV.
Democrats Agree to Fast Track for Health Care Revamp Democrats reached a tentative agreement to use a parliamentary procedure that would prevent Senate Republicans from blocking President Barack Obama’s proposed overhaul of the nation’s health care system, congressional aides said. The agreement calls for the same procedure, known as reconciliation, to be used to try to pass Obama’s proposal to cut federal subsidies to private providers of student loans, the aides said today.
Swine flu triggers alerts worldwide Governments and health authorities worldwide went on the alert over the weekend for a possible influenza pandemic as the death toll from a new strain of swine flu in Mexico reached 81. Janet Napolitano, homeland security secretary, on Sunday declared a “public health emergency” in the US as about 20 people there were confirmed to have been infected, though none is seriously ill. The World Health Organisation in Geneva had earlier made a similar announcement.
U.S. Declares Public Health Emergency Over Swine Flu American health officials on Sunday declared a public health emergency over increasing cases of swine flu, saying that they had confirmed 20 cases of the disease in the United States and expected to see more as investigators track down the path of the outbreak. “We are seeing more cases of swine flu,” Dr. Richard Besser, acting director of the Centers for Disease Control, said in a news conference in Washington. “We expect to see more cases of swine flu. As we continue to look for cases, I expect we’re going to find them.”
Mexico Peso Falls on Concern Swine Flu to Deepen Economic Slump Mexico's peso sank to its lowest in almost three weeks on concern an outbreak of the deadly swine flu will deepen an economic slowdown. The peso fell 1.7 percent to 13.5718 per U.S. dollar at 8:10 a.m. in Tokyo, compared to 13.3405 on April 24. The decline was the biggest among the 16 most-traded currencies against the dollar. Trading volumes in the Mexican peso usually picks up at about 7 a.m. New York time.
Pork Industry Moves to Quell Flu Fears - $$ The U.S. pork industry shifted into rapid-response mode following the news of an outbreak of swine flu in humans, trying to quell disease fears and protect an already weak pork market. Although there appears to be no evidence yet tying the flu to human contact with pigs, Russia banned meat imports from Mexico, several U.S. states and nine Latin American nations. In a news release Sunday, the National Pork Producers Council said, "Pork is safe to eat." The producers council, citing the Centers for Disease Control, said "preliminary investigations have determined that none of the people infected with the hybrid flu had contact with hogs."
Swine Flu Could Become More Dangerous The swine flu virus that has killed more than 80 people in Mexico may mutate into a "more dangerous" strain, the World Health Organisation has warned. Skip related content "It's quite possible for this virus to evolve... when viruses evolve, clearly they can become more dangerous to people," said Keiji Fukuda, of the global health watchdog. Mr Fukuda also called for international vigilance as health experts wait to see whether the virus will turn into a worldwide pandemic.
Could Food Shortages Bring Down Civilization? One of the toughest things for people to do is to anticipate sudden change. Typically we project the future by extrapolating from trends in the past. Much of the time this approach works well. But sometimes it fails spectacularly, and people are simply blindsided by events such as today's economic crisis. For most of us, the idea that civilization itself could disintegrate probably seems preposterous. Who would not find it hard to think seriously about such a complete departure from what we expect of ordinary life? What evidence could make us heed a warning so dire - and how would we go about responding to it?
How Long Will Our World Last? (Yes, We Are Screwed) Most people get worried about how much energy reserves we have left, but as this graphic shows, that's the least of our problems. The real problem is the materials we use to make things. Energy could be harnessed from eternal sources, like the sun, the wind, or the seas. But there is only a limited amount of elements in planet Earth and - what's worst - bringing them from other planets will prove impractical with our current technology (and the technology that will be available in the next century).
Americans Who Reject Marxist Socialism Are Castigated as 'Right-wing Extremists' It could not be nearer to what you suspect. Under his new regime, President Barack Obama’s Department of Homeland Security sent an intimidating message to law enforcement agencies nationwide calculated to silence any American who does not agree with the president’s social notions and political agenda. It is obvious that Rev. Jeremiah Wright is the driving force behind Obama’s paranoia. What the future president took away from Rev. Wright’s sermons contributes to Obama’s outlook and resultant policies, both at home and abroad. We have become a weakened country. Our enemies see a president who is ready to cozy up to any unscrupulous dictator who wants to inflict harm against our country, while Obama calls it a meaningful dialogue.
Obama Positioning For Backdoor Gun Control By Chuck Baldwin On his recent trip to Central America, President Barack Obama did more than cozy up to Marxist dictators; he also signed onto an international treaty that could, in effect, be used as backdoor gun control. It appears that Obama wants to use international treaties to do what congressional legislation is not able to do: further restrict the right of the American people to keep and bear arms.
There's No Place Like (Someone Else's) Home - $$ To Help Sell Houses, Temps Are Moved In; Hanging Baby Photos OCEANSIDE, Calif. -- The fragrance of sage-scented candles and sounds of jazz fill the air of a 2,600-square-foot house a block from the beach. Tiger-striped chairs flank tables crafted from exotic woods. Photos of a chubby baby hang on the walls. Whoever occupies 211 Windward Way, they seem to live the good life. Too good to be true, in fact. The house is owned by a builder, who hasn't been able to sell it for more than a year. And while someone really does live here, it's as part of an elaborate bit of stagecraft aimed at moving Southern California's echoing inventory of luxury vacant homes.
Swiss Ask U.S. to Drop Demand for Names of UBS Customers A tax-evasion case involving the Swiss bank UBS and 52,000 of its wealthy American clients is turning into a diplomatic chess game. The president of Switzerland, Hans-Rudolf Merz, has asked Timothy F. Geithner, the Treasury secretary, to drop a lawsuit led by the Justice Department seeking to force UBS to turn over the clients’ names, Daniel Haener, a Swiss government official in New York, said on Sunday. Under Swiss bank secrecy laws, disclosing clients’ names is a criminal offense that can carry prison terms and large fines.
Economy in intensive care while G7 squabbles Global economic recovery will take coordinated action among all the big economies, the International Monetary Fund warned this week, but as the IMF's spring meeting opens in Washington this weekend, the big economies are still squabbling over who's to blame for the crisis, and who should bear the cost of fixing it. More money for the IMF is nice, but it is "hardy going to solve the world's crisis," said Desmond Lachman, a former IMF official and now an analyst at the American Enterprise Institute.
Participants in Government Investment Plan Most financial institutions have received capital infusions via the Treasury's Capital Assistance Program, a bank-share purchase program intended to restore confidence in banks and get them to lend. This program is funded with $250 billion of the $700 billion Troubled Assets Relief Program authorized by Congress in October 2008 via the Emergency Economic Stabilization Act. Below, see a list of participating companies
Geithner to Outline Efforts to Fix Banking System Treasury Secretary expected to outline the Obama administration's efforts to clean up the U.S. banking system during meetings Friday with finance ministers from the Group of Seven nations. Treasury Secretary Timothy Geithner is expected to outline the Obama administration's efforts to clean up the U.S. banking system during meetings Friday with finance ministers from the Group of Seven nations, a department official said. Getting banks to lend again, along with government stimulus spending, is critical to turning around the U.S. and global economies, the official said Thursday, speaking on condition of anonymity because he wasn't authorized to speak on the record.
China's been building its gold reserves - now over 1,000 tonnes China revealed on Friday that it had quietly raised its gold reserves by nearly three-quarters since 2003, increasing its holdings to 1,054 tonnes and confirming years of speculation it had been buying. Hu Xiaolian, head of the State Administration of Foreign Exchange (SAFE), told Xinhua news agency in an interview that the country's reserves had risen by 454 tonnes from 600 tonnes since 2003, when China last adjusted its state gold reserves figure.
Who holds the highest gold reserves? China becoming the fifth biggest holder of gold reserves with 1054 tonnes and it has already hit the headlines on Friday leading to a marginal rise in gold prices in major trading centres. The world leader in gold reserves is United States with 8133 tonnes as on September 2008 that accounts for 76.5% of its foreign exchange reserves. Germany has the second highest gold reserves at 3412.6 tonnes while IMF has 3217, France has 2508 tonnes constituting 58.7% of its forex assets.
Obama’s leap to socialism President Obama showed his hand this week when The New York Times wrote that he is considering converting the stock the government owns in our country’s banks from preferred stock, which it now holds, to common stock. This seemingly insignificant change is momentous. It means that the federal government will control all of the major banks and financial institutions in the nation. It means socialism.
Dick Morris: Obama Stimulus A Trojan Horse Filled With Socialists
Obama's Energy Czar: Socialist Agent For World Government Socialist International scrubs Carol Browner but deep connections to Bilderberg and globalist agenda remain Barack Obama's "climate czar" Carol Browner has been exposed as being a member of Socialist International, a highly influential group headed by a Bilderberg Group luminary that calls for the implementation of global government, despite Socialist International's attempts to seemingly "memory-hole" information about Browner on their website. It doesn't take a rocket scientist to understand that Obama and his cabinet are preparing to exploit fearmongering about global warming to push new measures of taxation, regulation and internationalism. Obama himself has vigorously promoted the revival of a bill that would slash carbon emissions by 80 per cent, a move that would inflict a new Great Depression, cost millions of jobs, and sink America to near third world status.
THE REAL DANGER (free pdf of this book) As We Go Marching Fascism will come at the hands of perfectly authentic Americans who have been working to commit this country to the rule of the bureaucratic state; interfering in the affairs of the states and cities; taking part in the management of industry and finance and agriculture; assuming the role of great national banker and investor, borrowing billions every year and spending them on all sorts of projects through which such a government can paralyze opposition and command public support; marshalling great armies and navies at crushing costs to support the industry of war and preparation for war which will become our nation’s greatest industry; and adding to all this the most romantic adventures in global planning, regeneration, and domination – all to be done under the authority of a powerfully centralized government in which the executive will hold in effect all the powers, with Congress reduced to the role of a debating society.
Fascist America, in 10 easy steps Naomi Wolf Tuesday 24 April 2007 From Hitler to Pinochet and beyond, history shows there are certain steps that any would-be dictator must take to destroy constitutional freedoms. And, argues Naomi Wolf, George Bush and his administration seem to be taking them all . . . . Because Americans like me were born in freedom, we have a hard time even considering that it is possible for us to become as unfree - domestically - as many other nations. Because we no longer learn much about our rights or our system of government - the task of being aware of the constitution has been outsourced from citizens' ownership to being the domain of professionals such as lawyers and professors - we scarcely recognise the checks and balances that the founders put in place, even as they are being systematically dismantled. Because we don't learn much about European history, the setting up of a department of "homeland" security - remember who else was keen on the word "homeland" - didn't raise the alarm bells it might have.
Invoke a terrifying internal and external enemy
Create a gulag
Develop a thug caste
Set up an internal surveillance system
Harass citizens' groups
Engage in arbitrary detention and release
Target key individuals
Control the press
Dissent equals treason
Suspend the rule of law
THE FINAL PLUCKING OF AMERICA'S FINANCIAL AND ECONOMIC SOVEREIGNTY Believe as you will about the 2008 Credit Crisis but if you fail to recognize that the final pieces of America's financial and economic sovereignty are being transferred in the name of finding a global solution to the crisis, then you will have believed those who intend to steal your assets next, as well as your freedom. How could America's financial sovereignty be plucked from her both at the domestic and international levels? It is not because of a five or even twenty-five year plan but one that may be hundreds of years old. This plan, I'm sure, did not happen all at once but took time to evolve. It is a diabolically brilliant strategy in its scheming. In order to understand, we need to review how the credit crisis will lead to the total transfer of America's sovereignty. . . . . . . . While there were concerted steps that helped to create the credit crisis, i.e.: Clinton's Community Reinvestment Act of 1994, the repeal of the Glass-Steagall Act in 1999, and 45 year low interest rates as a result of 9/11 in 2001. All of these were major steps to create the "right circumstances" to transfer control over America's financial and economic wealth.
MARXISM COMES TO AMERICA A dire warning, from a man born and raised under communism. Something is very, very wrong. This article is meant to get your attention. It is meant to scare you into finally seeing what is happening all around you. What you are trying so very hard to ignore. The things discussed here are real. They are documented fact. For the sake of everything you hold dear, your children and your grandchildren, please read this article with an open mind, then check the facts for yourself. What you do after that is between you and God. PUBLIC PRIVATE PARTNERSHIPS In a communist/socialist country there is no such thing as private enterprise. Everything is either owned or controlled by the government. The socialists are taking over America through the bailouts. The bailout money comes with strings. Through the strings and mandates that come with the money the government becomes your partner. It's called "Public Private Partnership." Create the financial crises, offer the solution (bailout money) and you have a complete totalitarian state. These huge bailout/stimulus packages will create hyperinflation and result in a worldwide economic disaster dwarfing the Great Depression. It will indenture you, your children, and your children's children under Socialist tyranny
Regulators to Meet With Banks on Friday on 'Stress' Tests Federal regulators have quietly scheduled face-to-face meetings on Friday with leaders of the nation's biggest banks to reveal the preliminary results of the stress tests. Officials plan to meet separately with top executives from each of the 19 major banks at the offices of the Federal Reserve Bank in their district, according to people briefed on the sessions. The banks will then have until Tuesday to dispute any of the findings. Federal officials are preparing to disclose the final results on May 4, and they expect to rely on the banks to release findings specific to their institution.
U.S. Weighs Revealing Bank Capital Needs After Tests The Obama administration may direct banks judged to need capital after stress tests to disclose how they plan to get additional funds when the government reveals the results May 4, a person familiar with the matter said.
U.S. to Tell Big Banks the Results of Stress Test Wall Street is stressed out about stress tests. After a two-month wait, the nation's 19 largest banks will start learning on Friday how they fared in important federal examinations - and which among them will need another bailout from the government or private investors. While many of the banks reported surprisingly strong first-quarter earnings, they are by no means out of the woods. A number of them are likely to need more capital to weather a prolonged recession, and the losses that might accompany it.
Harvard's Feldstein Sees U.S. Inflation Danger After 2010 Harvard University economics Professor Martin Feldstein said inflation will emerge as a threat to the economy after a sustained recovery develops next year. "In the next few years inflation is going to be the bigger problem" than deflation, or widespread declines in consumer prices, Feldstein said in an interview with Bloomberg Radio. He also said "we're not going to see a sustained turnaround in the economy until next year."
GLOBAL FINANCIAL COLLAPSE America is OVER !
Gold, Silver - Important Alert! The Gold Direction Indicator is flashing another buy signal. This indicates that the pull-back that started late February is probably finished. A new rally is about to start. Some of the monetary inflation that the Obama team is injecting into the system is starting to turn into price inflation. The stock market rally which had drawn attention and money away from the gold market is running out of steam. The situation in Pakistan which has been smoldering for months is moving to the front pages, and is causing anxiety in India, where people buy gold bullion when fear mounts.
Gold Should Be At the Heart of New Global Currency Since the Chinese put a new global reserve currency on the table at the G20 summit which created $250 billion in new IMF Special Drawing Rights, discussion of the new currency has increased, and the logic of putting precious metals into this basket is clear. Gold and silver have been used as money for several millennia because even the most artful alchemist has failed to find a way to manufacture precious metals. Over recent century's fiat or paper money collapses have always been followed by a reversion to gold and silver, why should it be different this time?
A Brief Look at Bernanke, Inflation, Deflation & Gold While the average American has some understanding of gold as a hedge against inflation and the dilutive printing of paper money, a more thoughtful analysis suggests that gold may actually prosper the most in response to the threat of deflation as we are now experiencing in 2009. In fact it is the Federal Reserve's greater concerns about deflation, not inflation, which may produce the greatest gains ahead for gold.
Fed Purchases $7 Billion of Treasuries in Buyback The Federal Reserve bought $7 billion of Treasuries maturing between May 2012 and August 2013 as part of the central bank's efforts to reduce lending rates and lift the world's largest economy out of a recession. All of the securities listed for possible purchase were acquired for the first time since the buybacks began last month, according to a Federal Reserve Bank of New York statement. The $985 million of the 3.625 percent notes maturing in May 2013 was the largest amount of the 20 securities acquired.
Bernanke Defends Bear Stearns Bailout Fed Chair Says Failure To Save Ailing Investment Bank Would Have Led To "Chaotic Unwinding" The Federal Reserve moved to assist a Wall Street investment bank on the brink of bankruptcy to prevent a failure that could have dealt serious consequences to the U.S. economy, Federal Reserve Chairman Ben Bernanke said Thursday. "Given the exceptional pressures on the global economy and financial system, the damage caused by a default by Bear Stearns could have been severe and extremely difficult to contain," Bernanke told the Senate Banking Committee.
Storm erupts over BofA's Merrill takeover The circumstances surrounding Bank of America's controversial takeover of Merrill Lynch on Thursday sparked an unprecedented public dispute involving the bank's embattled chief executive, Ken Lewis, and top officials past and present. The furore - which adds to the pressure on Mr Lewis's position atop the bank - erupted when Andrew Cuomo, New York attorney-general, released documents raising fresh questions over Mr Lewis's failure to tell investors about huge losses at Merrill before completing the acquisition.
Bank of America Pressured by Paulson to Buy Merrill Bank of America Corp. Chief Executive Officer Kenneth D. Lewis failed to tell shareholders about mounting losses at Merrill Lynch & Co. because of pressure from federal regulators to complete the takeover, according to New York State Attorney General Andrew Cuomo. Henry Paulson, who was Treasury secretary last December, may have threatened to remove the management and directors of the Charlotte, North Carolina-based bank if they didn't comply, Cuomo wrote in a letter to Congress that was released today. Lewis also was told not to disclose his opposition to the Merrill deal because of "staggering" deterioration at the brokerage, or the regulator's action, according to Cuomo.
Paulson Contradicts Bernanke, Blames Bernanke For Lewis Threat Hank Paulson admitted to Andrew Cuomo that he threatened to oust Ken Lewis and the Bank of America board if Bank of America invoked a Material Adverse Change (MAC) clause to block the deal, Cuomo says. Paulson also added, however, that he made this threat at the request of Ben Bernanke. This contradicts Bernanke, who earlier denied (through a Fed spokesman) that he did not threaten Ken Lewis.
PAULSON RECANTS: Bernanke Didn't Make Me Do It Hank Paulson has recanted on what he told Andrew Cuomo, which was that Ben Bernanke asked him to threaten to oust Ken Lewis and the Bank of America board if Lewis decided not to go forward with the Merrill deal. Paulson says his words were his own and that Bernanke did not ask him to convey a specific message to Lewis, CNBC says.
BofA’s Lewis: Feds urged quiet on Merrill Charlotte Business Journal Bank of America Corp. Chief Executive Kenneth Lewis says Federal Reserve Chairman Ben Bernanke and former Treasury Department chief Henry Paulson pressured the bank not to discuss its increasingly troubled plan to buy Merrill Lynch & Co. According to The Wall Street Journal, Lewis, testifying under oath before New York Attorney General Andrew Cuomo in February, said he believed Paulson and Bernanke were instructing him to keep silent about Merrill’s financial problems. Merrill lost $15.3 billion in the fourth quarter. According to the newspaper’s review of the transcript, Lewis said the federal government wanted him to keep quiet while the two sides negotiated government funding to help BofA absorb Merrill. BofA bought the troubled brokerage on Jan. 1 for $29.1 billion, including $8.6 billion in preferred stock. The deal resulted in BofA’s receiving an additional $20 billion in federal bailout funds under the Troubled Asset Relief Program.
Lewis Testifies U.S. Urged Silence on Deal - $$ WSJ Bank of America Chief Says Bernanke, Paulson Barred Disclosure of Merrill Woes Because of Fears for Financial System Federal Reserve Chairman Ben Bernanke and then-Treasury Department chief Henry Paulson pressured Bank of America Corp. to not discuss its increasingly troubled plan to buy Merrill Lynch & Co. -- a deal that later triggered a government bailout of BofA -- according to testimony by Kenneth Lewis, the bank's chief executive. Mr. Lewis, testifying under oath before New York's attorney general in February, told prosecutors that he believed Messrs. Paulson and Bernanke were instructing him to keep silent about deepening financial difficulties at Merrill, the struggling brokerage giant.
Forget About Inflation... It's Deflation You Should Worry About A consensus has formed that the government's massive money printing and debt-powered spending binge will soon destroy the destroy the dollar, crippling the remaining savings of anyone dumb enough not to buy "real" assets--like gold. The Fed is printing money, Mauldin says, but overall credit is being destroyed. The government is desperately trying to bring back inflation, so we can lessen the real burden of our huge debts, but this will take a year or two at best. So in the meantime, Mauldin says, ignore the gold bugs. They've been wrong for 25 years and they'll keep on being wrong for the foreseeable future.
Time To Get Bernanke And Paulson Under Oath Sorry Bernanke and Paulson, we need more than an off-the-record statement through Steve Liesman on Ken Lewis's claim that he was told to clam up about troubles at Merrill Lynch. So far, all we have is the Bank of America (BAC) CEO's story, but if Attorney General Andrew Cuomo is actually serious about figuring out what happened, then he has to get both Ben Bernanke and Hank Paulson under oath. And if there are serious disagreements between what they say and what Lewis is saying, then someone's committing perjury.
U.S. pressured BofA to complete Merrill deal: Cuomo Bank of America Corp CEO Kenneth Lewis was pressured by senior federal officials Henry Paulson and Ben Bernanke to accept a merger with troubled Merrill Lynch & Co or lose his job, New York Attorney General Andrew Cuomo said on Thursday. In a letter to senior members of congressional committees and the head of the U.S. Securities and Exchange Commission, Cuomo said Lewis met then U.S. Treasury Secretary Paulson and Federal Reserve Chairman Bernanke in Washington in mid-December.
Mortgage Investors Form Battle Lines Over Housing Aid The head of Greenwich Financial Services LLC warned bond investors in Washington last month that government efforts to reverse the housing slump are doing more harm than good by undermining debt contracts. More than 30 money managers with stakes in the $6.7 trillion mortgage bond market that underpins the real-estate industry heard Bill Frey's March 25 talk, according to a list of the attendees. Since then, a group of investors with home-loan bonds totaling more than $100 billion have hired Patton Boggs LLP, Washington's biggest lobbying law firm, said Micah Green, a partner and former head of the Bond Market Association.
Rising Home Vacancies Give Bernanke Extra Time to Withdraw Cash Rising home vacancies may be a blessing in disguise for Ben S. Bernanke. A record number of empty homes across the U.S. will depress rents, the largest item in the Labor Department's consumer price index, into 2010, analysts said. That offers the Federal Reserve chairman plenty of time to withdraw the cash he's pumped into financial markets.
Know Your Enemy Do you know the enemy? Is it Iraqis, Iran, the Taliban, terrorists, Muslims, Russia, North Korea, China, or our government? General Douglas MacArthur had a distinct point of view on the more likely threat. "I am concerned for the security of our great Nation; not so much because of any threat from without, but because of the insidious forces working from within." . . . . . . . . Are You a Terrorist? Most people in America, comfortable in their manicured lawn suburban sprawl will discount the possibility of civil unrest, war, and dictatorship in this country. Could Nazi like sociopaths gain control of our government? It is inconceivable. Anyone who would bring up this possibility would be branded a lunatic. As Doug Casey recently pointed out in his article Street Fighting Man, the Germans thought the same thing.
Street Fighting Man Longtime readers know my standard response to questions about the severity of the Greater Depression: It's going to be worse than even I think it's going to be. "Coming Collapse" books will undoubtedly accumulate into an entire genre in the next few years, as they did a generation ago. This time it's not just fear mongering, although things won't get as bad as in James Kunstler's book The Long Emergency and certainly not as rough as in the movies Road Warrior or I Am Legend. But it's a good bet that a lot more is going to change than just some features of the financial system. Let's engage in a little speculation as to the shape of things to come.
I've long believed that this depression would not only be much different but much worse than the unpleasantness of the '30s and '40s. In those days, only a few people were involved in the financial markets; now almost anyone with any assets at all is a player. In those days, there were no credit cards, consumer debts, or student loans; now those things are ubiquitous. It's true that nobody will lose any money because of bank failures this time around; instead, everybody is going to suffer a loss from a collapse of the U.S. dollar, which is much worse.
Warning over US toxic asset plan The Obama administration will on Friday get the first indication of investor interest in its $1,000bn toxic assets plan amid fears that the threat of government intervention and banks' reluctance to sell will deter fund managers from participating. Applications to become one of the five asset managers charged with raising funds to buy mortgage-backed securities from banks are due today and groups including BlackRock, Pimco and Bank of New York Mellon are set to apply.
US accepts 'blame' for crisis ahead of IMF meeting America must take a "substantial share" of the blame for the continuing financial crisis, US Treasury Secretary Tim Geithner admitted as he warned that the rest of the world cannot be reliant on the US for its recovery. Mr Geithner, commenting on America's part in the global recovery in a speech in Washington DC, said that although the world needs the US to recover quickly, the opposite is also true. "The rest of the world needs the US economy and financial system to recover in order for it to revive," said Mr Geithner. "Just as importantly, we need the rest of the world to recover if we are to prosper again here at home." His comments came as the IMF's World Economic Outlook forecast the US economy would contract by 2.8pc this year and witness flat growth next year.
IMF predicts world recession will deepen The International Monetary Fund has slashed growth forecasts for every major country and urged governments to take forceful action to ensure the world economy's recovery from a severe recession. In its latest World Economic Outlook, the IMF said the global economy would likely contract 1.3 per cent this year in the deepest post-Second World War recession by far. Growth is set to re-emerge at a sluggish 1.9 per cent next year but the pick-up depends on aggressive measures to repair a poorly functioning financial system.
IMF WILL CREATE GLOBAL MONEY OF THE NWO Had Ronald Wilson Reagan not been elected the 40th President of the United States on Nov. 4, 1980, and had James Earl Carter been reelected instead, by the summer of 1981 the newspapers would not have been focused on Reagan recuperating from a near-fatal assassination attempt at the hands of wannabe assassin John Hinckley, but rather the media would be asking when would Americans start using the global currency of the International Monetary Fund instead of the US dollar? . . . . . . . . It is important to understand the ramifications of what transpired in London. While the national media in the United States reported that President Barack Obama's visit to the G-20 was a success, it was successful only if you think Jimmy Carter's stint in the White House was a success. Obama, who envisioned his trip to the G-20 as the reincarnation of FDR's dominance over Europe's leaders actually rebirthed the inefficaciousness of Carter. The community activist is simply not up to the task of leading a nation let alone believably affirming his role as the leader of the free world.
Is Obama's Stimulus Package Socialism in Disguise?
CYBER-SECURITY LEGISLATION HAS ORIGINS IN 'SUMMIT OF THE AMERICAS' Two new pieces of legislation are causing quite a stir and rightly so. Americans protective of our freedoms and privacy are once again confronted by the constant onslaught against our rights which requires our vigilance. This new legislation seeks to give even more power to the government to regulate the Internet and, in future, the possibility to regulate content and usage. What begins as a method of defeating terrorism and protecting telecommunications, can quickly become a method to regulate 'hate speech' to assign 'motive' or 'intent' to harm and even to regulate and legislate the flow of information that is deemed by the 'thought police' to be inflammatory or counter-productive to their cause.
OBAMA: TRILATERAL COMMISSION ENDGAME As previously noted in Pawns of the Global Elite, Barack Obama was groomed for the presidency by key members of the Trilateral Commission. Most notably, it was Zbigniew Brzezinski, co-founder of the Trilateral Commission with David Rockefeller in 1973, who was Obama's principal foreign policy advisor. Is this a mere coincidence or is it a continuation of dominance over the Executive Branch since 1976?
Secretary of Treasury, Tim Geithner
Ambassador to the United Nations, Susan Rice
National Security Advisor, Thomas Donilon
Chairman, Economic Recovery Committee, Paul Volker
Director of National Intelligence, Admiral Dennis C. Blair 6- Assistant Secretary of State, Asia & Pacific, Kurt M. Campbell
Deputy Secretary of State, James Steinberg
State Department, Special Envoy, Richard Haass
State Department, Special Envoy, Dennis Ross
State Department, Special Envoy, Richard Holbrooke
Experts Warn that Banking Euphoria Is Premature Good news from six US banks has raised hopes that an end to the financial crisis might be in sight. But German experts think the euphoria is wishful thinking. As they see it, things are going to get worse soon -- and banks will be forced to make billions more in write-downs. The news spreads like wildfire and hope starts to bloom. One after the other, six US banks -- including the largest, Bank of America -- have submitted performance figures for the first quarter of 2009 that are far better than experts had predicted.
Treasury Has 'No Strategy' to Manage the Billions in Securities it Owns Under TARP, Report Says The Treasury Department has not developed a strategy to manage the billions of dollars of investments it holds under the Troubled Asset Relief Program (TARP), according to a startling new report from TARP's inspector general. Treasury also does not have sufficient oversight authority over a joint Treasury-Federal Reserve lending program that is supposed to expand to $1 trillion, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) said in a report issued Tuesday.
Will New Fed "Tools" Avert Hyperinflation? People often accuse me of making "irresponsible" forecasts of massive price inflation. Even though they know that history is replete with examples of central banks ruining their currencies, these critics are sure that "it can't happen here." So in the present article I'd like to make the brief case for why we should all be very alarmed about the prospects for the U.S. dollar.
Barack Obama supports the ONE WORLD GOVERNMENT
Obama's Climate Change Envoy Urges Global Warming Treaty, Offers Few Specifics President Barack Obama's special envoy for climate change told the Senate Foreign Relations Committee Wednesday that the United States urgently needs to sign a new international treaty to control global carbon emissions in the name of fighting global warming. However, other than indicating that the administration is committed to imposing a cap-and-trade system to limit carbon emissions within the United States, he gave few specifics about the sort of international agreement the administration is seeking. The envoy, Todd Stern, had just returned from climate-treaty negotiations in Bonn, Germany. . . . . . . The conference in Copenhagen has a genesis in the United Nations Framework Convention of Climate Change that dates back more than a decade and includes the Kyoto Protocol. The Kyoto Protocol was opposed by the Bush administration because it required stricter sanctions on reducing greenhouse gas emissions for developed industrialized countries than developing industrialized countries, including China and India, both considered heavy contributors to global carbon emissions. [Because third world developing nations are exempt from energy related rules and restrictions imposed on developed nations under the treaty, this will be the biggest transference of wealth in the history of the world, from the first world economies, to the emerging economies - all under the guise of global warming. The US will be required to return to early 1970's level of energy usage, not adjusted for increase in population and that is the tip of the iceberg. Water vapor us the largest of the 'greenhouse gasses' they are trying to reduce. Carbon dioxide (what we exhale) is the second largest. Methane and nitrous oxide round out the top four. It's a sham they are trying to shame the US public into swallowing. Don't buy it!]
Introduction to Global Governance Since the beginning of civilization, someone, somewhere has fantasized about ruling the world. Alexander the Great, Julius Caesar, the various leaders of the Holy Roman Empire, are but a few of the would-be rulers of the world. The fantasy faded during the dark ages, but flourished again during the renaissance and was actively pursued by proponents of a British empire on which the sun never set. . . . . . . . . History demonstrates that global governance is not an event that will occur by force at some point in the future. Global governance is a process that has been underway for many years, gaining new definition and momentum since the collapse of the Soviet Union. The publication of Our Global Neighborhood is a signal of confidence that the international community is secure enough in its establishment of global governance that the movement cannot be reversed.
Mortgage Investors Form Battle Lines Over Housing Aid The head of Greenwich Financial Services LLC warned bond investors in Washington last month that government efforts to reverse the housing slump are doing more harm than good by undermining debt contracts. More than 30 money managers with stakes in the $6.7 trillion mortgage bond market that underpins the real-estate industry heard Bill Frey's March 25 talk, according to a list of the attendees. Since then, a group of investors with home-loan bonds totaling more than $100 billion have hired Patton Boggs LLP, Washington's biggest lobbying law firm, said Micah Green, a partner and former head of the Bond Market Association.
Commercial properties fall to foreclosure Crisis can sow blight, cut into local tax bases The foreclosure crisis is now claiming commercial properties across Massachusetts, prompting a surge of fire sales as the owners of office towers, hotels, and stores cannot meet or refinance sizable loan payments. In the first four months of the year, some auctioneers report they have already handled double the number of distressed properties they did in all of 2008. Among the recent casualties are Glen Ellen Country Club in Millis, a prominent Art Deco building in Boston's Park Square, and a yacht club and inn with views of the city skyline.
U.S. Said to Seek a Chrysler Plan for Bankruptcy The Treasury Department is directing Chrysler to prepare a Chapter 11 bankruptcy filing as soon as next week, people with direct knowledge of the talks said Thursday. The company faces a deadline of April 30 to come up with a viable business plan supported by its creditors, the United Automobile Workers union, and Fiat, the Italian car company that wants to acquire a stake in Chrysler.
California Sues Wells Fargo Over Securities Sales Joining a roster of state lawmen pursuing civil actions against banks, California's attorney general, Jerry Brown, sued three subsidiaries of Wells Fargo on Thursday, claiming the bank had lost some $1.5 billion for investors in the state who bought auction-rate securities. The lawsuit, filed in San Francisco, claims that three Wells Fargo units gave "false and deceptive advice" when they marketed the securities to small investors by claiming that they were as safe and liquid as cash. Instead, investors lost money when the market for auction-rate securities collapsed in February 2008.
Obama takes plastic, fine print to task Tells bankers no 'unfair' fees President Obama spelled it out for credit card issuers in large type Thursday -- no more "unfair" fees, sudden rate increases and misleading fine print. "The days of any time, any reason rate hikes and late-fee traps have to end," Mr. Obama said after meeting in the White House with executives from 13 of the largest credit card issuers, including Bank of America and Capital One Financial. "We want clarity and transparency from here on out," Mr. Obama said.
U.S. Existing Home Sales Dropped More Than Forecast Sales of U.S. previously owned homes fell in March after jumping a month earlier by the most in more than five years, indicating the market will remain depressed for much of the year. Purchases decreased 3 percent to an annual rate of 4.57 million, lower than forecast, from 4.71 million in February, the National Association of Realtors said today in Washington. The median price slumped 12 percent from a year ago and distressed properties accounted for about 50 percent of all sales.
U.S. jobless claims rise, home sales fall The number of newly laid off U.S. workers filing claims for unemployment aid rose last week and sales of previously owned homes fell in March, according to data on Thursday that showed the economy still sliding downward. First-time claims for jobless benefits rose 27,000 to 640,000 last week, the Labor Department said. In addition, the number of people still drawing benefits after an initial week of aid jumped 93,000 to a record 6.14 million in the week ended April 11.
And Now For Something Entirely Different: How Things Change Out From Under Us Anyone who has been around for a while and who pays any attention to the news sees many disturbing changes. Recently, I read a report that two children, ages seven and eight, had an altercation at school during recess. They were carted off in handcuffs by the police. The teachers or principal had dealt with the boys' disagreement by calling in the law. I wonder if the kids now have felonious assault records that will cancel their Second Amendment rights when they come of age.
Crisis Plunges US Middle Class into Poverty SOUP KITCHENS AND TENT CITIES The financial crisis in the US has triggered a social crisis of historic dimensions. Soup kitchens are suddenly in great demand and tent cities are popping up in the shadow of glistening office towers. Even drug dealers are feeling the pinch. Business is poor in the New York banking district around Wall Street these days, even for drug dealers. In the good old days, they used to supply America's moneyed elite with cocaine and crack. But now, with the good times gone, they spend their days in the Bowery Mission, a homeless shelter with a dining hall and a chapel.
Tony Blair calls on world to wage war on militant Islam Tony Blair has said he does not regret leading Britain to war in Iraq when he was Prime Minister and has called on the world to take on and defeat Islamic extremists. He believes that, without intervention, the problem will continue to grow in countries such as Afghanistan. He called for a battle to be waged against militant Islam similar to that fought against revolutionary communism. In an address last night to a forum on religion and politics in Chicago, Mr Blair said that the world today faced a struggle posed by "an extreme and misguided form of Islam", which threatened the majority of Muslims as well as non-Muslims.
Germany's slump risks 'explosive' mood as second banking crisis looms Warning that downturn will see unemployment hit 4.7m by 2010 A clutch of political and labour leaders in Germany have raised the spectre of civil unrest after the country's leading institutes forecast a 6pc contraction of gross domestic product this year, a slump reminiscent of 1931 and bad enough to drive unemployment to 4.7m by 2010. Michael Sommer, leader of the DGB trade union federation, called the latest wave of sackings a "declaration of war" against Germany's workers. "Social unrest can no longer be ruled out," he said. Gesine Swann, presidential candidate for the Social Democrats, said "the mood could turn explosive" over the next three months unless the government takes drastic action.
US seems powerless to halt Dear Leader The Obama Administration is gravely concerned about North Korea's nuclear programme, which is far more advanced than Iran's The Obama Administration is gravely concerned about North Korea's nuclear programme, which is far more advanced than Iran's. Yet its policy toward Pyongyang is little different than the course followed by George Bush in his second term and appears increasingly ineffective. Laying out that policy on Wednesday during congressional testimony Hillary Clinton, the US Secretary of State, urged North Korea to refrain from provocative acts and return to six-party talks, which Pyongyang abandoned in December.
US journalists to stand trial in North Korea Two women arrested in North Korea in March could be charged with spying to pressure Washington into talks with the regime Two U.S journalists detained in North Korea are to go on trial for unspecified criminal charges. Laura Ling and Euna Lee, who work for Current TV, were arrested in MArch near North Korea's border with China, while reporting on Koran refugees living in China. Pyongyang's official Korean Central News Agency said the reporters would stand trial 'on the basis of the confirmed crimes.'
North Korea is fully fledged nuclear power, experts agree The world's intelligence agencies and defence experts are quietly acknowledging that North Korea has become a fully fledged nuclear power with the capacity to wipe out entire cities in Japan and South Korea. The new reality has emerged in off-hand remarks and in single sentences buried in lengthy reports. Increasing numbers of authoritative experts - from the head of the International Atomic Energy Agency (IAEA) to the US Defence Secretary - are admitting that North Korea has miniaturised nuclear warheads to the extent that they can be launched on medium-range missiles, according to intelligence briefings.
Chinese Diversification Strategy In a series of maneuvers, Chinese officials have revealed their strategy implementation in a very broad set of steps. Beijing leaders plan to establish the yuan currency as a global reserve currency. The process will be made more complete after issuance of a large volume of Chinese Govt debt securities, soon in coming. The number of policy actions is impressive. While the USGovt is busy stepping backwards with FASB rules enabling false bank accounting, gearing up Treasury programs to direct colossal elite welfare / confiscation to failed banks responsible for the crisis, covering up Wall Street fraud and regulatory lapses and debt rating agency collusion, and ordering pork like the $9 billion high speed train from Disneyland to Las Vegas, the Chinese are making important meaningful critical strides.
The New Global Currency Franchise he recent G20 meeting revealed the beginnings of a seismic shift in the world's money system. Up until now, the United States has had the great good fortune to own the franchise on the global reserve currency. In effect the USA, unique among the nations, has had the ability to create and spend money at will, and best of all, have it accepted at par by most foreign nations. This franchise was acquired following the Second World War in a two step bait-and-switch maneuver. In 1944, the Bretton Woods Agreements established a currency exchange system based on the US dollar, which in turn was anchored in a fixed amount of gold. Seventeen years later, in 1971, the United States ended redemption of dollars in gold, effectively cutting the world's currency system adrift from its mooring to anything of real value.
Facism in America? - History Destined to Repeat? (1/5) - 4.10.2009
Facism in America? - History Destined to Repeat? (2/5) - 4.10.2009
Facism in America? - History Destined to Repeat? (3/5) - 4.10.2009
Facism in America? - History Destined to Repeat? (4/5) - 4.10.2009
Facism in America? - History Destined to Repeat? (5/5) - 4.10.2009
The Shock Doctrine: The Rise of Disaster Capitalism
Federal Program to Boost Private Lending Struggles to Get Money to Consumers In its first two months, the government's signature initiative to support consumer lending has fallen well short of expectations, deploying only a fraction of the amount officials had hoped to extend to stimulate auto loans, student loans and credit card lending. The slow rollout of the program has frustrated staff at government agencies working on the effort and diminished hopes that they could engineer a rapid return to healthy lending levels, according to interviews with government and industry sources. The initiative also serves as a window into the complexities of designing a giant rescue of the financial system.
Everything Hinges On Unemployment Defaults among prime borrowers are really starting to pick up. Why? Cause even solid borrowers can fall behind if they lose their jobs. Credit card companies see much deeper charge offs than they'd foreseen just a few months ago. Again, unemployment. While the talking heads insist that unemployment is a "lagging indicator", it's pretty clear that the financial system is highly levered to this numbers, so it's hard to imagine a real turnaround unless the economy stops bleeding jobs
Geithner says crisis unprecedented in modern times Geithner says US bears substantial share of responsibility for global economic crisis Treasury Secretary Timothy Geithner said Wednesday the United States bears a substantial share of responsibility for a global economic crisis that could cost the world up to $4 trillion in lost output this year alone. While the crisis started in the U.S., Geithner said its damage has spread widely with serious challenges facing much of the globe.
COP Hearing with Treasury Secretary Timothy Geithner
Uh-Oh: Prime Defaults Surge When JPMorgan announced earnings last week, it said the one category in its portfolio that was slightly worse than expectations were the loans made to prime borrowers. Now Fannie and Freddie, in a letter to Sen. Chris Dodd, say they're seeing the same thing -- a surge in prime defaults.
We Are All Flint, Michigan Now Flint, Michigan became a symbol of the vanishing of American manufacturing and the epitome of suburban decline, like a modern-day Wild West ghost town, only with way more Pistons fans. In today's New York Times, David Streitfeld wrote about Flint's latest proposal to put an end to the slow-motion trainwreck that is their daily existence once and for all. Once you get over the laughable aspects of this, you will realize, with horror, the fact that there are any number of cities and towns in this country that may end up having to do the same thing:
An Effort to Save Flint, Mich., by Shrinking It FLINT, Mich. — Dozens of proposals have been floated over the years to slow this city’s endless decline. Now another idea is gaining support: speed it up. Instead of waiting for houses to become abandoned and then pulling them down, local leaders are talking about demolishing entire blocks and even whole neighborhoods.
Treasury Secretary Geithner Says World Needs U.S. to Recover U.S. Treasury Secretary Timothy Geithner said Wednesday that the U.S. bears the brunt of responsibility for causing the financial crisis, and that the country's economy needs to recover in order for the rest of the global economy to bounce back. Speaking to the Economic Club of Washington, D.C., Geithner said the International Monetary Fund is forecasting that world growth will contract 1.3% in 2009.
Gold Spreads: The Real Gold Market Speaks The vast majority of those who read this site are fully aware of the shenanigans of the bullion banks over at the Comex and how they continue to bamboozle the hedge funds whose automaton-like response to momentum trading prevents them from beating this group at the paper game by standing for delivery in size. Additionally, their allegiance to system-trading and computer algorithms prevents them from thinking creatively and learning to take advantage of their enemies’ tactics against them. Good traders learn to adapt to changing market conditions and modify their strategies when confronted by successive losses - the hedge funds, however, when it comes to gold, do no such thing. Keep in mind that the name of the game in gold, as far as the monetary authorities are concerned, is deception. By artificially suppressing the price of gold, for much the same reason as the Fed has been artificially attempting to suppress long term interest rates by a deliberate policy of quantitative easing, the money lords hope to cloud the signals that free market prices would generate to the investing public.
Silver and gold guarantee freedom Silver and gold are not merely valuable commodities, investments, and media of exchange. More importantly, they are key "checks and balances" in America's legal and political institutions. The fight against the use of silver and gold as money that has been waged by bankers and rogue politicians since the 1870s as to silver and the 1930s as to gold --and will intensify as fiat currencies collapse throughout the world -- is ultimately directed against America's national independence, her constitutional government, and every common American's individual liberty and prosperity.
Platinum Climbs on Demand Outlook in China; Palladium Soars Platinum prices rose for the first time in five sessions on signs of increasing demand in China. Palladium futures jumped the most in almost a month. Platinum imports in China surged 35 percent in March from a year earlier, said Tom Pawlicki, a metals analyst at MF Global Ltd. in Chicago, citing government data. The metal gained as much as 2.4 percent, while gold rose as much as 1.4 percent. Platinum and palladium are used in auto parts and jewelry.
US gold rises on firm physical demand, PGMs higher U.S. gold futures rose on Wednesday on firmer physical demand, while renewed market talk of cold fusion technology boosted palladium and other platinum group metals.
Gold & Silver: Why London bullion market is booming LONDON: Which is the biggest Over-the-Counter (OTC) market for gold and silver in the world? It is the bustling city of London where bullion trade in the OTC market continues to boom, often beating futures trading in gold and silver.
Soon, gold to help docs scan human body! Soon, gold will help doctors see the inside of your body in a better way. Researchers have come out with a new method in which gold is used to generate internal images of the human body. Researchers at the Stanford Centre for Innovation in In-vivio Imaging have combined the precious metal with nanotechnology and lasers to create an imaging method that could replace MRIs and PET scans.
Miners rush to Zimbabwe gold treasure Zimbabwe, the country with over 1,00,000 per cent inflation is on the verge of a new era as far as the mining sector is concerned. Mining is Zimbabwe’s one major source of economy. But Draconian laws had been blocking the mining industry from expanding business in Zimbabwe. Following this, the government has been working on new rules for mining in the country. Now, the country has implemented these laws and gold producers are re-opening mines shut down in Zimbabwe. As a result of the new set of rules, the companies can sell gold directly in world markets which was not the case earlier.
Explaining the American Gold Rush! MoneyNews.Newsmax.com had the interesting headline "Mints Rush to Meet Gold Coin Demand." It starts off with a blockbuster statement, namely that the world is in "crisis mode". In fact, a report by The Independent in the United Kingdom notes, "With the world economy now in crisis mode, gold coin production is rising" all over the place, with the result that, "As investor appetite for gold increases worldwide, nations which mint coins of the precious metal have hiked production to satisfy the growing demand."
Gold Shrugs Off Fools’ Body Blows With the stock market giddy as ever yesterday, gold held up surprisingly well. The June Comex contract was off just slightly even though Dow Industrials tacked on 128 points. Ordinarily, with the broad averages in a moderate short-squeeze, we would have expected bullion futures to give up more of the gains they’d achieved on Friday. In a bigger picture gold looks even more impressive, since it has fallen by only six percent while the Dow has risen 24 percent since the bear rally began on March 6. The inverse correlation between gold and the stock market has become so pronounced lately that a nimble trader could practically arbitrage one against the other tick-for-tick. Why should gold and stocks be moving in opposite directions these days? The reason is simple: Gold has at last come to reflect anxiety about the true state of the global economy, and there are times like now when that anxiety momentarily abates.
Is China Trying to Back its Currency With Metal? There's talk of a recession from the Reserve Bank, down yonder way. And the Prime Minister has again promised the government is going to spend its way out this slump, or at least go broke trying. But we begin today's Reckoning with the idea that Australia is a massive treasure trove of mineral wealth, which is the next best thing to money in an age of paper paupers.
Sorry, Geithner, Law Says You Can't Refuse To Let Banks Repay TARP Treasury secretary Tim Geithner said again today that he plans on imposing conditions on banks that want to wriggle free of government control by repaying bailout funds. As we explained yesterday, this seems to fly in the face of a provision of the stimulus bill signed into law earlier this year which specifically prohibits the government from imposing conditions. What makes Geithner think he can impose conditions in violation of this law?
Tim Geithner: The Bureaucrat With No Friends When the market rallied yesterday, many were quick to cite Tim Geithner's appearance on Capitol Hill and some comments about the solid position of the banking sector. That Geithner could lift the markets is quite a perception change since earlier this year, when he was considered toxic. But though the market may rally, there are still considerable doubts about the Treasury Secretary, particularly when it comes to his presentation and handling of the economy.
More Goldman Sachs Secrets that Tim Geithner Might Not Share with You! Okay, this is going to be a quick and dirty review of Goldman's derivative real estate and off balance sheet real estate exposure as is probably reflected through their credit exposure as well. . . . . . . Now, why would Goldman's OTC Credit Exposure be increasing and deteriorating even as it has taken expensive emergency money from Warren Buffet and strings attached TARP funds it is trying to pass on like a itchy veneral disease? You would think they would be trying to get rid of this stuff versus stuffing the balance sheet with it.
Marooned on an Island of Debt by Greenspan’s Money Flood As usual, I put on an adult-sized diaper and my tinfoil hat in careful preparation to look at the change in Total Fed Credit last week, and it is a good thing I did, too, because the Federal Reserve (as expressed in their secret motto “We Are Evil”) created, out thin air, $29 billion new dollars in bank credit! Wow! The interesting part is that the Federal Reserve used that new money – and a lot more – to buy $62 billion of U.S. government debt last week! Hahaha! What a fraud! $62 billion! In one week! We are so freaking doomed!
Oil Rally Stalls as U.S. Equity Market Slide Dents Confidence Crude oil was little changed in new York after the risk of widening bank losses dragged U.S. equities and other commodities lower. Oil’s two-day climb stalled after lenders including Wells Fargo & Co. said credit markets haven’t recovered yet, pulling the Dow Jones Industrial Average and Standard & Poor’s 500 Index lower in late trading yesterday. U.S. oil stockpiles rose for a seventh week to their highest since September 1990, the Energy Department said yesterday.
Debt Issuance is a Rapidly Growing Problem On Wednesday the UK's Debt Management Office (DMO) announced they would be issuing a whopping £220 bln ($319 bln) in gilts this fiscal year. That's a 50% increase from the £146.4 billion borrowed in the fiscal year ended 31-Mar, and well above the £180 bln the market was expecting. . . . . . . Here on our side of the pond, we're faced with the same predicament: The need to issue massive amounts of new debt into a market already awash with debt. Meanwhile the historic buyers of our debt (China and Japan specifically), faced with their own domestic economic concerns and understandable concerns about the huge amounts of dollar denominated instruments already on their books, have hinted that they may be looking to scale back purchases.
Forget global imbalances, it is now a Sino-American imbalance – Or perhaps a Sino-North Atlantic or Sino-Euramerican imbalance. Europe plays a supporting role in the drama. If oil averages $50 or so this year and $60 or so next year – and if intra-European surpluses and deficits are netted out – the world’s macroeconomic imbalances reduce to the United States external deficit (which the IMF estimates will be under 3% of US GDP in 09), a somewhat smaller EU deficit and China’s 10% of GDP surplus. On the surplus side of the global ledger, the IMF forecasts that there will soon be China – and almost no one else.
Government to Complete Takeover of US Banks and Begins News Organizations Key to establishing a dictatorship worth its salt is gaining virtually absolute control of a country’s financial system. Today, that is what’s happening in the United States of America. In order to gain said control Barack Obama’s minion and Secretary of the Treasury Timothy Geithner is pushing for converting the current government-owned bank (under the pretense of “tax payer owned") preferred stock to common stock. This will give Obama’s government majority control of all banks who have taken advantage of the bogus TARP and “stimulus” bills. Do any still really wonder why the government is refusing to take back payment of those loan monies from the banks?
Too Big To Survive On April 20th, Bank of America announced a first quarter surge in earnings to $4.2 billion. At first blush, it looked like the kind of news that would ignite a stock market rally. Instead, the Dow closed down 289 points. Could it be that, despite the apparent good news, investors don't trust the banks or the economy? In recent months, the Administration has poured billions of dollars into those banks that it has deemed "too big to fail". B of A alone received some $45 billion. Perhaps now it is time to examine whether the liabilities of these same banks make them, conversely, too big to survive.
Police investigating death of Freddie Mac official VIENNA, VA. - The chief financial officer of Freddie Mac, one of the mortgage giants at the heart of the nation's financial meltdown, was found dead in his basement early Wednesday morning in what police said was an apparent suicide. David Kellermann, 41, apparently hanged himself in his suburban Washington home, said a law enforcement official familiar with the investigation. He asked not to be identified because the investigation was ongoing.
Freddie Mac Acting CFO David Kellermann Found Dead Freddie Mac Acting Chief Financial Officer David Kellermann, 41, was found dead early today in the basement of his home in a Washington suburb, police said. There were no signs of foul play, and the death is under investigation, Fairfax County, Virginia, Police Officer Shelley Broderick said. She said early reports from others in the department indicated Kellermann’s wife reported a suicide. The medical examiner’s office said it’s conducting an autopsy, and the results may be released as soon as today.
Suicide Sheds Light on Pressures at Freddie Mac The pressures were already immense when David B. Kellermann was promoted to the top financial position at the mortgage giant Freddie Mac last September. Then they got even worse. Mr. Kellermann’s boss and other top executives were ousted when the Treasury secretary seized Freddie Mac and its sibling company, Fannie Mae; others left on their own and were not replaced. Soon President Obama told the companies they were responsible for carrying out some of his programs to revive the economy, in addition to keeping the housing market afloat by buying and selling hundreds of thousands of mortgages a month.
Freddie Mac CFO Suicide Delays Bond Sale The tragic suicide of Freddie Mac CFO David Kellermann did have some financial market reverberations. Across The Curve says the mortgage giant was forced to postpone bond sale, at least for one day. The reason: traders want some added assurance that the suicide wasn't directly due to fraud or cooked books.
Gigantism stamped with failure "Too big to fail." It's been the mantra of our economic meltdown. Although meant to emphasize the overwhelming importance of this bank or that corporation, the phrase also unwittingly expresses a shared delusion that may be at the root of our current crises - both economic and ecological. In nature, nothing is too big to fail. In fact, big is bound to fail. To understand why that's so means stepping away from a prevailing set of beliefs that holds us in its sway, especially the deep conviction that we operate apart from nature's limits and rules.
GE exec says economic crisis resetting capitalism The top executive of General Electric Co. said Wednesday he couldn't predict when the recession would end or how bad it will be, but said the global economic crisis has "fundamentally reset" the way companies do business and capitalism itself. Speaking at GE's annual shareholder meeting in Orlando, Fla., following what has been a punishing year for the conglomerate, CEO Jeff Immelt said the downturn was the worst since the Great Depression, and that it would ultimately lead to changes such as greater government involvement in business and a restructuring of the financial services sector that was a root of the crisis.
What's Behind Us Is No Longer Important Paradigm Shift: Fundamental unperceived change in an individual's or a society's view of how things work . . . . The years ahead can be best described by the two Chinese symbols which when used together make the word danger; crisis and opportunity. Three trends will greatly influence investment considerations during the next decade; the current financial mess, agriculture, and energy. It is essential to understand how they are interconnected in order to position your portfolios to benefit. I must also note that of these three themes only the current financial mess has an immediate solution, and that solution is inflation.
The Goldsmiths—Part LXXIII n the past year, the Goldsmiths have broached the possibilities of deflation in at least four presentations (parts 27, 47, 54 and 56) in the context that the present economic deflation pressures are coming precisely from the plutocratic ruling Rothschild Cabal. But ultimately, the Goldsmiths have allowed that the eventual threat will devolve to a hyperinflationary blow off.
Soaring U.S. Budget Deficit Will Mean Billions in Bond Sales Millions of lost jobs mean billions in lost tax revenue for the U.S. government, and billions in additional Treasury debt to fund a federal budget deficit that may soar to more than four times last year’s record $454.7 billion. Employers cut 3.7 million positions from their payrolls in the six months since the fiscal year began Oct. 1, and the unemployment rate reached a 25-year high of 8.5 percent in March. That suggests receipts for April -- the biggest month for tax collection -- are likely to come in well below April 2008, analysts said.
California Sells Record $6.9 Billion in Build America Bond Deal California sold $6.85 billion of debt in the largest long-term general obligation bond sale in the state’s 158-year history, aided by a new federal subsidy introduced in the economic stimulus package. California, the most populous U.S. state and the lowest rated, sold $5.23 billion of taxable 25- and 30-year debt with the federal government rebating 35 percent of interest costs, The deal included $1.62 billion in notes that aren’t subsidized, Treasurer Bill Lockyer said in a news release today.
Pimco’s McCulley Says Commercial Mortgages ‘Broken’ Pacific Investment Management Co.’s Paul McCulley said problems still exist in the commercial mortgage market even as economic data including today’s housing price gains indicate the economy is in a bottoming process. “The commercial securitization market is broken,” said McCulley, a partner and fund manager at Pimco, in a Bloomberg Television interview from Newport Beach, California. “The focus in the last couple years has been on the residential side, but we are having a bust of sorts on the commercial side.”
Capital One Says Credit Card Defaults Are Soaring Here's bad news for the banks' credit card units. Capital One (COF), which reported a deeper-than-expected net loss last night, said on its conference call that it expected card defaults to surge past 10%. The current default rate is 8.4%, which is ahead of the 8.1% it was expecting just last quarter. For this type of thing, it all comes down to unemployment. If it the rise halts and people find jobs again, this should turn around to. If not, then the losses will exceed anything they've planned for.
European Central Bank used gold sales to buy dollars The European Central Bank said in its Annual Report that it used proceeds from gold sales to boost its U.S. dollar reserves in 2008, although dollar holdings fell as a proportion of overall currency reserves. The European Central Bank said on Tuesday it used proceeds from gold sales to boost its U.S. dollar reserves in 2008, although dollar holdings fell as a proportion of overall currency reserves.
Given its showing, shouldn't the IMF just pipe down? The casual way the IMF overstated British bank losses by some £60bn, and then retreated after a call from the Treasury, does not inspire much confidence that the fund is ready for its fast-escalating role as the world's monetary overlord. Critics are already irked by its G20 coup, when it secured powers to create £250bn in liquidity through Special Drawing Rights – its own quasi-currency. Jurgen Stark, Germany's man on the European Central Bank, called it "helicopter money" for the globe. "There hasn't been a study to see whether the world needs additional liquidity. In the old days, one would take a long time to explore such a thing."
Global Economy Called Worst Since 1945 The global economy will most likely contract this year for the first time since World War II, and the recovery will take longer than expected, the International Monetary Fund said Wednesday. The I.M.F. projected a 1.3 percent decline in global economic activity for 2009, down sharply even from the modest 0.5 percent growth it had projected in January. In the United States, still the “epicenter” of the crisis, according to the fund, economic contraction would be even greater, at 2.8 percent this year, with zero growth for 2010.
IMF sees 1.3% drop in global output The global economy will contract sharply this year and recover only sluggishly in 2010, the International Monetary Fund said on Wednesday as it called on governments to sustain or even increase fiscal stimulus next year. The IMF said that world output would contract by 1.3 per cent this year and grow by just 1.9 per cent the year after in what it described as a “substantial downward revision” of its January forecasts, when it said that the global economy would grow by 0.5 per cent this year and spring back to 3 per cent growth in 2010
World economy in severe recession, IMF says The International Monetary Fund on Wednesday slashed growth forecasts for every major country and urged governments to take forceful action to ensure the world economy's recovery from a severe recession. In its latest World Economic Outlook, the IMF said the global economy would likely contract 1.3 percent this year in the deepest post-World War Two recession by far.
The Case against "Smart Taxes" on Carbon Today is Earth day, and a week ago we "celebrated" tax day. It is fitting, in a sense, that Earth Day and Tax Day are only one week apart. Those who blame global warming on human activity see taxation as an effective and desirable means of preventing environmental global catastrophe. In a recent publication, former Bush advisor Greg Mankiw has extended an "open invitation to join the Pigou club" by embracing the idea of regulating greenhouse gases with corrective taxes.
Latin American Economy to Contract 1.5% in 2009 The economy in Latin America and the Caribbean will contract 1.5 percent this year on a drop in commodities prices, and slumping demand for exports and tourism, the International Monetary Fund said. The contraction will be more severe in Mexico because of its close ties to the U.S., and in Venezuela, the IMF said its World Economic Outlook report released today.
Treasury makes offer to Chrysler lenders Wall Street Journal: Treasury offers Chrysler lenders $1.5 billion plus 5 percent equity stake The Treasury Department lobbed back a new offer to Chrysler LLC's lenders, proposing that banks and hedge funds which hold $6.9 billion in debt forgive $5.4 billion in exchange for a 5 percent stake in a Chrysler-Fiat alliance, media reports said late Wednesday. The new offer represents payment of 22 percent of the debt lenders are owed, according to a report by The Wall Street Journal. That would be up from a previously rejected government offer of 15 percent payment and no stock.
G.M. Likely to Skip $1 Billion Debt Payment General Motors would likely forego making a $1 billion bond payment due June 1, opting instead to begin a debt-exchange offer by then, a spokesman for the carmaker said in a statement on Wednesday. The decision by G.M. isn’t much of a surprise. By that government-set date, G.M. will either have reorganized itself out of court, or it will file for bankruptcy protection. The Obama administration had previously told G.M. that it does not want to see its $13.4 billion lifeline to the carmaker used to make bond payments, a person briefed on the matter said.
Mich. gov, AG send letters to banks, automakers Mich. governor asks banks to help Chrysler; AG says auto bankruptcies should be filed in state Michigan's governor and attorney general have taken up letter writing in their latest efforts to affect the fate of two troubled automakers. The federal government's auto task force has given Chrysler LLC until the end of April to make further cuts and take on a partner or face liquidation. If General Motors Corp. doesn't meet the task force's June 1 deadline, it will be forced to restructure under bankruptcy protection.
Sources say GM to close plants up to nine weeks Most facilities to be affected; usual summer shutdowns last two weeks DETROIT - General Motors Corp. is planning to temporarily close most of its U.S. factories for up to nine weeks this summer because of slumping sales and growing inventories of unsold vehicles, two people briefed on the plan said Wednesday.
In China, G.M. Remains a Driving Force SHANGHAI — Ford may be standing taller than General Motors in Detroit these days — flush with cash while its rival is forced to go repeatedly to Washington, hat in hand, seeking government bailouts. But in China the tables are turned. G.M. is a powerful presence here with 8 to 10 percent of the market for cars, minivans and sport utility vehicles, making it the second-largest automaker in China for such vehicles, passed only by Volkswagen. One of G.M.’s local joint ventures, Wuling, dominates the sale of bare-bones pickups and vans, hugely popular in rural areas, with nearly half the market.
G.M. Plans to Double China Sales in Five Years General Motors, at its press conferences at the Shanghai auto show, is trying to prepare its Chinese customers for what a possible bankruptcy in the United States might mean to its ambitious Asian expansion plans. “It is very important to understand that if there is a court-ordered restructuring, it is different from in some other countries,” Kevin Wale, president of G.M.’s China Group, told a media gathering. “A company continues to trade and continues its business and can come out of it stronger than before.”
Small Cities Save Air Links Through Guardian Angels in Congress Taxpayers paid more than $3,600 per passenger last year to subsidize round-trip air fares on the 150-mile flight between Albuquerque and Alamogordo, New Mexico. For that much, a family of four could fly from Albuquerque to Paris and back. Alamogordo, with fewer than 40,000 residents, is one of about 150 small U.S. cities that benefit from $133 million the government will spend this year to keep planes flying on otherwise unprofitable routes. While New Mexico Airlines makes 12 round trips per week, an average of less than one passenger per day flew to or from Alamogordo last year.
Surprised at concentration of foreclosures in hard-hit states Foreclosure filings topped 800,000 for the first time in the first quarter, and RealtyTrac says most of those were concentrated in four states: Nevada, California, Florida and Arizona, and "What we found was that the concentration of foreclosure activity was even more severe in the hardest-hit states than we anticipated," says RealtyTrac's Rick Sharga
Delinquencies and Defaults Up, Up and Away Delinquencies and defaults are on the rise, due mainly to a handful of circumstances, including the backlog from recent foreclosure moratoria, a jump in unemployment and even a slight rise in marital spats, according to data released by the Federal Housing Finance Agency (FHFA) Tuesday.
Record number of Californians miss mortgage payments More than 135,000 notices of default -- the first step toward foreclosure -- were issued in the first quarter of 2009. That's a steep increase from the end of 2008; still, actual foreclosures decline. A record number of California homeowners failed to make their loan payments in the first three months of 2009, even as the number of homes lost to foreclosure continued to drop, according to figures released today. According to MDA DataQuick, the number of notices of default, the first step in the foreclosure process, rose to more than 135,400 for the period from Jan. 1 to March 31.
As Housing Market Dips, More in U.S. Are Staying Put Stranded by the nationwide slump in housing and jobs, fewer Americans are moving, the Census Bureau said Wednesday. The bureau found that the number of people who changed residences declined to 35.2 million from March 2007 to March 2008, the lowest number since 1962, when the nation had 120 million fewer people.
For Housing Crisis, the End Probably Isn’t Near The closest thing to a real estate crystal ball in the last few years has been the house auctions that are regularly held around the country. In 2006 and early 2007, the official housing statistics were still showing that house prices were holding up. But that was largely because so many sellers were refusing to sell. The auctions, made up mostly of foreclosed homes, showed the truth: house values were starting to plummet in many places.
U.S. credit card bill advances on eve of Obama meet Legislation to curb credit card fees and limit consumer penalties cleared a congressional panel on Wednesday, a day ahead of a meeting between industry executives and President Barack Obama at the White House. The bill is an early test of political will for Democrats pushing for regulatory reform amid the economic crisis and would mean sweeping changes for card-issuing banks, many of which have received government bailout money.
New Mexico Governor Raised $197,300 From Brokers New Mexico Governor Bill Richardson’s campaigns and political action committees received at least $102,300 from brokers hired by money managers seeking to handle $11.7 billion of state trust funds, campaign finance records show. In addition to the those donations, Richardson, a Democrat who ran for President in 2008, received at least $95,000 from the state trusts’ outside money managers, including $20,000 from former Quadrangle Group LLC founder Steven Rattner and $50,381 from Leo Hindery, founder of InterMedia Advisors LLC, according to New Mexico and federal campaign finance records.
Obama's New Muslim Appointment is Hope... for Egyptians? Muslim woman's appointment as Obama advisor draws cautious optimism Dalia Mogahed, a veiled Egyptian American, will advise President Obama on prejudices and problems faced by Muslims. Many Arabs hope it's a step toward reversing stereotyping. Reporting from Cairo -- Egyptians are cautiously rejoicing over the recent appointment of a veiled Egyptian American Muslim woman as an advisor to President Obama. Dalia Mogahed, senior analyst and executive director of the Gallup Center for Muslim Studies, was appointed this month to Obama's Advisory Council on Faith-Based and Neighborhood Partnerships.
Democrat Waxman: Climate Change Bill Will Not Drag Down Economy Top environmental advisers to President Barack Obama expressed general support Wednesday for a House Democratic bill to tackle climate change as the measure's chief sponsor rejected claims that limiting greenhouse gases will be a drag on the economy.
Army: 3 vials of virus samples missing from Maryland facility Missing vials of a potentially dangerous virus have prompted an Army investigation into the disappearance from a lab in Maryland. The Army's Criminal Investigation Command agents have been visiting Fort Detrick in Frederick, Maryland, to investigate the disappearance of the vials. Christopher Grey, spokesman for the command, said this latest investigation has found "no evidence of criminal activity." The vials contained samples of Venezuelan Equine Encephalitis, a virus that sickens horses and can be spread to humans by mosquitoes. In 97 percent of cases, humans with the virus suffer flu-like symptoms, but it can be deadly in about 1 out of 100 cases, according to Caree Vander Linden, a spokeswoman for the Army's Medical Research Institute of Infectious Diseases. There is an effective vaccine for the disease and there hasn't been an outbreak in the United States since 1971.
Huge Solar Storm Could Shut Down US A massive solar storm could be catastrophic for the United States and other countries, scientists warn. Such a storm could knock out power nationwide, ABCNews.com reported, leading to a nightmarish scenario that could include failures of transportation, communication and financial systems; shutdowns of government services; and a lack of safe drinking water, food and medication. Solar storms form when intense bursts of plasma erupt from the surface of the sun, creating what's called a coronal mass ejection (CME). These eruptions can produce electromagnetic interference that wreaks havoc with electricity-dependent technology on Earth.
Are We Ready for a Solar Katrina? Severe Solar Storms Could Harm Power Grid, Navigational Systems and Spacecraft, Scientists Say More than a million people without power. The distribution of drinkable water disrupted. Transportation, communication and banking upset. Trillions of dollars in damage. Hurricanes, blizzards and other earthly tempests aren't the only natural forces with the potential to sow catastrophe. Severe weather in the sun's outer atmosphere could knock out much of the country's power grid, incapacitate navigational systems and jeopardize spacecraft, scientists say.
No quick cybersecurity fix seen The intelligence expert who prepared a still-secret study on cybersecurity for President Obama said on Wednesday the danger of attacks on U.S. computer networks cannot be fixed easily or quickly. "Cyberspace won't be secured overnight and on the basis of one good plan," Melissa Hathaway told the nation's largest conference of private security experts, RSA. "This is a marathon, not a sprint." Hathaway said she had completed work on her report, prepared at the request of the president, and it will be made public soon. Her report aims to address the problem that countries and individuals can compromise, steal, change and destroy information, or damage the U.S. electric grid.
Obama Pushing Treaty To Ban Reloading -- Even BB guns could be on the chopping block Remember CANDIDATE Barack Obama? The guy who “wasn’t going to take away our guns”? Well, guess what? Less than 100 days into his administration, he’s never met a gun he didn’t hate. A week ago, Obama went to Mexico, whined about the United States, and bemoaned (before the whole world) the fact that he didn’t have the political power to take away our semi-automatics. Nevertheless, that didn’t keep him from pushing additional restrictions on American gun owners. It’s called the Inter-American Convention Against Illicit Manufacturing of and Trafficking in Firearms, Ammunition, Explosives, and Other Related Materials. To be sure, this imponderable title masks a really nasty piece of work.
Alan Keyes: Government Will Stage Terror, Declare Martial Law Former Presidential candidate gives most dire warning yet about Obama agenda Former presidential candidate Alan Keyes has given perhaps his most dire warning yet, saying that the Obama administration is preparing to stage terror attacks, declare martial law and cancel the 2012 elections, which is why they are demonizing their political enemies as criminals and terrorists. . . . . . . . . “It’s obvious that they will stop at nothing,” Keyes told attendees of a reception in Fort Wayne, adding, “We may wake up one day and there’s a series of terrorist attacks, the economy is paralyzed….martial law will be declared everywhere in the United States and it won’t end until the crisis ends.”
NLE 09: FEMA Takes Preparations for Martial Law to the Next Level FEMA is preparing to take its martial law exercises to the next level this July. According to a fact sheet buried on the FEMA website, the agency will host National Level Exercise 2009 (NLE 09) on July 27 through July 31, 2009. “NLE 09 will be the first major exercise conducted by the United States government that will focus exclusively on terrorism prevention and protection, as opposed to incident response and recovery,” the fact sheet states. It is designated as a Tier I National Level Exercise, or TOPOFF, which are exercises conducted annually in accordance with the National Exercise Program (NEP), “which serves as the nation’s overarching exercise program for planning, organizing, conducting and evaluating national level exercises,” according to FEMA.
Fidel Castro says Obama misinterpreted his brother's remarks The former Cuban president rejects suggestions that the island should free political prisoners or cut taxes on remittances from the U.S. HAVANA -- Fidel Castro says President Barack Obama "misinterpreted" his brother Raul's remarks regarding the United States and bristled at the suggestion that Cuba should free political prisoners or cut taxes on dollars people send to the island. Raul Castro touched off a whirlwind of speculation last week that the U.S. and Cuba could be headed toward a thaw after nearly a half-century of chilly relations. The speculation began when the Cuban president said leaders would be willing to sit down with their U.S. counterparts and discuss "everything, everything, everything," including human rights, freedom of the press and expression, and political prisoners.
Hillary Clinton warns of 'existential threat' in Pakistan Clinton says the government in Islamabad is ceding more and more territory to the militants and is 'abdicating to the Taliban and the extremists' in some matters. n an assessment that raised questions about the future of Pakistan, Secretary of State Hillary Rodham Clinton warned Wednesday that the country's fragile government is facing an "existential threat" from militants who are now operating within a few hours' travel of the capital. Clinton told a House committee that the government of Islamabad is ceding more and more territory to the militants and is "basically abdicating to the Taliban and the extremists" in signing a deal with militants that limits the government's involvement in the war-torn Swat Valley.
Ron Paul questions Hillary Clinton on Foreign Policy & Interventionism 4/22/2009
Japan Pays Foreign Workers to Go Home HAMAMATSU, Japan — Rita Yamaoka, a mother of three who immigrated from Brazil, recently lost her factory job here. Now, Japan has made her an offer she may not be able to refuse. The government will pay thousands of dollars to fly Mrs. Yamaoka; her husband, who is a Brazilian citizen of Japanese descent; and their family back to Brazil. But in exchange, Mrs. Yamaoka and her husband must agree never to seek to work in Japan again.
The Chinese are not happy BEIJING - At first it was nothing out of the ordinary. A book intriguingly titled China Is Not Happy was expected to generate a buzz because it claimed to detail the world's most populous nation and aspiring superpower's resentment of foreign abuses. . . . . . But, the book appears to have struck a cord with Chinese readers on a level that it was perhaps not intended to. In a surprising twist, the volume - which set out to arouse national indignation at foreign powers' treatment of China - has burst open the Chinese people's grievances with their own government.
Black Money In Black Money, FRONTLINE correspondent Lowell Bergman investigates this shadowy side of international business, shedding light on multinational companies that have routinely made secret payments -- often referred to as "black money" -- to win billions in business. "The thing about black money is you can claim it's being used for all kinds of things," the British reporter David Leigh tells Bergman. "You get pots of black money that nobody sees, nobody has to account for, ... you can do anything you like with. Mostly what happens with black money is people steal it because they can."
Gold Set for Huge Rally The gold price is poised to break through $1,000 an ounce this week and could reach $1,500 before a price consolidation. On Monday gold and silver closed higher while global stock markets fell as the five-week rally ended. This is an important trend reversal and marks a shift by investors to safe haven assets in advance of another plunge in equity values. The US dollar also strengthened across the board and bond prices rose. It is unusual to see both gold and the dollar rising together but again this normally signals an important trend reversal.
Why Gold Owners Are Targets of the Government If you own gold, you are in a war. You are under assault. You had better figure this out early. There is a full-scale war against you. The politicians and central bankers who are conducting this war against you are determined to see that you lose money on your investment. . . . . The reason why you are under assault is because you have demonstrated by your purchase of gold or a gold-related investment that you do not trust the monetary policies of your nation's central bank. If you are an American, this means you do not trust the monetary policies of the Federal Reserve System. You have taken a step that confirms your lack of trust in the government and its central bank. If you think the government and the central bank will sit quietly, while millions of citizens buy gold as a way to hedge against government and central bank policies, you are terminally naive. Gary North's detailed report on this: The Gold Wars
An Oil / Gold Reflation Pair Trade As commodities, gold and oil share many similarities. Both are negatively correlated to the U.S. dollar, offer a hedge against inflation, and perform well when investors seek hard assets. Over the last three years, the two items show daily price movements that are highly correlated to one another. All the similarities point to an expectation that as prices move up and down, the relationship between gold and oil should remain relatively static.
Birds best kept in hand MoneyNews.Newsmax.com had the interesting headline "Mints Rush to Meet Gold Coin Demand". It starts off with a blockbuster statement, namely that the world is in "crisis mode". In fact, a report by The Independent in the United Kingdom notes, "With the world economy now in crisis mode, gold coin production is rising" all over the place, with the result that, "As investor appetite for gold increases worldwide, nations which mint coins of the precious metal have hiked production to satisfy the growing demand."
A Nice Set Up A number of different factors have converged, creating what could be a lift-off point for the price of silver (and gold). This confluence of readily verifiable factors shows the silver market to be in a low risk and high reward situation. The factors involve both the paper and physical silver markets. The only question, as always, is if the manipulators, led by JPMorgan and protected by the CFTC, can thwart the set up once prices rally.
The Fed is now peddling inflation If there's any chance we'll avoid a painful bout of rising prices, it won't be the Federal Reserve that saves us. Also: Chipping away at tech forecasts. If there were any doubts of the inflationary determination of the Federal Reserve, the minutes of its Federal Open Market Committee meeting on March 17-18 should have put them to rest. Not only did certain Federal Reserve heads think that inflation was "below desirable levels," they also had this to say: "Even without a continuation of outright price declines, falling expectations of inflation would raise the real rate of interest and thus increase the burden of debt and further restrain the economy."
Coming Inflation Is Good for Commodities Higher inflation is coming. It's impossible to predict exactly when it will arrive, but the trillions of dollars worth of new money injected into the global financial system make it inevitable. The prospect of inflation will likely be one of the key drivers for the energy and commodities sectors over the medium term. Inflation will eat away at the dollar and other paper currencies, raising the value of tangible assets as a hedge. In this way, commodities are similar to gold.
Deflation could scupper UK economic recovery Britain's annual living costs fell for the first time in almost half a century last month, highlighting the risk that deflation could yet derail any UK economic recovery. Retail price inflation, which includes housing costs, fell to minus 0.4pc last month compared with March 2008 - the first negative reading since March 1960. While analysts said there were technical reasons for the fall, official confirmation of deflation - where asset prices and wages slide but debts do not - provides an uneasy backdrop for Wednesday's Budget. Experts attributed the negative RPI figures to the recent cuts in interest rates that have left Bank rate at a historic low of 0.5pc.
Roubini: You're All Fools Nouriel's not buying this "green shoots" memo: This consensus optimism is, I believe, not supported by the facts. Indeed, I expect that while the rate of US contraction will slow from -6 per cent in the last two quarters, US growth will still be negative (around -1.5 to -2 per cent) in the second half of the year (compared to the bullish consensus of +2 per cent). Moreover, growth next year will be so weak (0.5 to 1 per cent, as opposed to the consensus of 2 per cent or more) and unemployment so high (above 10 per cent) that it will still feel like a recession.
Roubini: Suckers Rally to Fade Well-known economist Nouriel Roubini, one of the few experts to foresee the current global crisis, said Tuesday a recent "suckers rally" in stock markets would fade as the U.S. economy continues to wither and the financial system suffers unexpected shocks. Hopes the world economy will stage a faster recovery this year have fueled a six-week rise in global markets, with major benchmarks on Wall Street and in Asia up more than 20 percent over just six weeks.
It May Be Time for the Fed to Go Negative WITH unemployment rising and the financial system in shambles, it’s hard not to feel negative about the economy right now. The answer to our problems, however, could well be more negativity. But I’m not talking about attitude. I‘m talking about numbers. Let’s start with the basics: What is the best way for an economy to escape a recession? Until recently, most economists relied on monetary policy. Recessions result from an insufficient demand for goods and services — and so, the thinking goes, our central bank can remedy this deficiency by cutting interest rates. Lower interest rates encourage households and businesses to borrow and spend. More spending means more demand for goods and services, which leads to greater employment for workers to meet that demand.
Fed’s Backdoor To Negative Interest Rates The confusion that Federal Reserve Chairman Ben Bernanke has created over the last two years has not done anything to improve the nation’s brain tissue bulk or toning either. Even a man of substantial physical and mental bulk, former Federal Reserve Chairman Paul Volcker has verbally challenged Bernanke’s 2% inflation target. If Volcker doesn’t get it, than there is little hope for the rest of us.
Peter Schiff Vlog Report 20 Apr 2009
Let big banks fail, bailout skeptics say Top economists tell Congress the administration must change its approach to saving troubled financial firms or risk strangling an economic recovery. The Obama administration must break up the biggest financial firms if the nation is to return to economic health, three prominent bailout skeptics told a congressional panel Tuesday. Columbia University professor Joseph Stiglitz and MIT professor Simon Johnson warned the Joint Economic Committee of Congress that the current government policy of propping up troubled financial giants could impede an economic recovery.
Gold Trades Little Changed as Geithner’s Remarks Ease Concerns Gold traded little changed in Asia after U.S. Treasury Secretary Timothy Geithner said the “vast majority” of the nation’s banks have enough capital, easing investors’ concerns about the global economy. The comments boosted equities and eased demand for the metal as an alternative investment.
Banks May Get Mix of U.S. Stock Conversions, Private Funding Treasury Secretary Timothy Geithner indicated that stress tests will show most of the 19 biggest U.S. banks have enough capital and said those requiring further funds may get a mix of converted government preference shares and private money. The Treasury chief, testifying at a congressional oversight panel yesterday, said each bank needing aid after the tests gauging their health would work with supervisors on the options, including tapping the $700 billion Troubled Asset Relief Program. Geithner also repeatedly stated that regulators -- not the Treasury -- are taking the lead on the exams.
Soaring U.S. Budget Deficit Will Mean Billions in Bond Sales Millions of lost jobs mean billions in lost tax revenue for the U.S. government, and billions in additional Treasury debt to fund a federal budget deficit that may soar to more than four times last year’s record $454.7 billion. Employers cut 3.7 million positions from their payrolls in the six months since the fiscal year began Oct. 1, and the unemployment rate reached a 25-year high of 8.5 percent in March. That suggests receipts for April -- the biggest month for tax collection -- are likely to come in well below April 2008, analysts said.
Dollar Declines as Geithner’s Bank Comments Erode Refuge Appeal The dollar declined against most actively traded currencies after Treasury Secretary Timothy Geithner said the “vast majority” of U.S. banks have sufficient capital, reducing the greenback’s haven appeal. The U.S. currency weakened more than 1 percent versus the Australian dollar, Swedish krona and New Zealand dollar on speculation the easing of concern about bank balance sheets will prompt investors to shift funds to higher-yielding assets. The euro gained for the first time in four days versus the yen and also strengthened against the dollar after a report showed German investor confidence in April increased to the highest level in almost two years.
Goldman Sachs Shook Tens of Billions Out of Tax-Payers Now They're Whining All the Way to the Bank The Wall Street crew relied on its political power to ensure that the rules remained rigged, even though their crooked deck wrecked the economy. Lloyd Blankfein, the CEO of Goldman Sachs, is very upset with the Troubled Asset Relief Program (TARP). Last fall, Mr. Blankfein borrowed $10 billion through the TARP at below market interest rates. Now, the government is starting to tie some real conditions to this money, for example, by limiting what Goldman can pay its executives. Mr. Blankfein argues that such conditions are making it impossible to run his business and is now anxious to return the TARP money.
Geithner's Testimony: Lots of Questions, Few Answers .... Secretary of the Treasury Tim Geithner testified before the Congressional Oversight Panel (COP) headed by Elizabeth Warren. In general, the questions were excellent; unfortunately, the answers were not forthcoming. One excellent question was, "How does protecting the common shareholders of Citigroup (C) help the economy?" There was no real answer to that question -- just a dance about how it was not appropriate for him to talk about any individual financial institution. The true answer to the question is: it doesn't.
Tim Geithner Is Trying To Steal Ben Bernanke's TARP Job Earlier this [Tuesday] afternoon we pointed out that Tim Geithner probably doesn't have the authority to tell banks they can't withdraw from TARP and its compensation restrictions by paying back the bailout money. The law actually says there should be no impediments to banks that want to withdraw--no requirements that they raise new money, and certainly no requirement that the "system" is healthy enough to withstand their withdrawal.
Credit Markets Still Tight, Geithner Says Despite huge government efforts to restore lending to normal, Treasury Secretary Timothy F. Geithner said Tuesday that borrowing costs remained high and credit was still not flowing normally. Speaking before a Congressional panel in Washington, Mr. Geithner said that some corners of the credit market had improved recently as the government set up programs to ease lending among banks, for home mortgages and commercial loans and credit for small businesses. But he acknowledged that the programs had not cured all problems in lending.
Stress Tests Are Biased In Favor Of Wall Street A Federal Reserve document obtained by the AP shows that the stress tests take a harsher view of loans than of other troubled assets. This would mean that banks holding large loan portfolios would be viewed as being at greater risk than banks holding derivatives and debt securities. Wall Street's former investment banks and the megabanks - JP Morgan, Citi and Bank of America - have large securities holdings, while regional banks tend to have a relatively larger portfolio of loans.
Obama's order to cut $100 million in federal spending underwhelms many Obama’s marching orders are less than meets the eye. Many of the savings he asked for are already under way and are included in the calculation. To be sure, this is an extra effort, on top of an agency-by-agency review of programs and proposed multibillion-dollar cuts in weapons programs. But it is decidedly marginal. "It’s always a good sign when the president is talking about savings," said Marc Goldwein, policy director of the Committee for a Responsible Federal Budget, a nonpartisan group that advocates fiscal discipline. "It’s valuable as a symbol," he said, "but $100 million is just not going to cut it."
A Crash this way Cometh The stock markets have gone up for six straight weeks. That's a pretty strong sign of a top. Our financial system continues to come unglued as Goldman Sachs leads the looting of the treasury after a financial coup d'état that has stolen $46,000 from each taxpayer to hand it over to the banks now running the country. After over $13.6 trillion has been poured into the banking system, I cannot see that a person I know has been enriched by even a single cent but each American is now indebted to the tune of an additional $46,000. It's going to end badly. We are not at the bottom; we aren't even near the bottom. In terms of the Great Depression, we are in 1931 or so; the bottom is ahead of us. I expect the dollar to default in the next few months after a General Motors and Chrysler bankruptcy convinces everyone that we are truly in a depression.
Meltdown losses of '$4 trillion' The International Monetary Fund (IMF) has warned that potential losses from the credit crunch could reach $4 trillion and damage the financial system for years to come. It says that even if urgent action is taken to clean up the banking system, the process will be "slow and painful", delaying economic recovery. It says that banks may need $1.7 trillion in additional capital. But it warns that political support for further bank bail-outs is waning. One year ago, the IMF estimated that total losses from the credit crunch would be $1 trillion, which has been exceeded, showing how rapidly the financial meltdown has escalated.
IMF: Losses from global credit crisis mounting IMF says US institutions could suffer losses totaling $2.7 trillion from credit crisis The International Monetary Fund said Tuesday worldwide financial institutions could suffer more than $4 trillion in losses from the global credit crisis with the U.S. leading the way with a total of $2.7 trillion. The $2.7 trillion estimate for the United States was nearly double the IMF's projection from just six months ago. The agency for the first time estimated losses for other regions of the world, saying the global total could surpass $4 trillion. The IMF also warned that governments must take decisive policy actions to contain the fallout. The agency said governments have made progress getting extra money into the banking system, but more needs to be done to deal with toxic assets on banks' books and shutting down insolvent financial institutions.
IMF Says Losses From Crisis May Hit $4.1 Trillion Worldwide losses tied to distressed loans and securitized assets may reach $4.1 trillion by the end of 2010 as the recession and credit crisis exact a higher toll on financial institutions, the International Monetary Fund said. Banks will shoulder about 61 percent of the writedowns, with insurers, pension funds and other nonbanks assuming the rest, the Washington-based lender said in a report released today on the state of the global financial system. The fund forecast $2.7 trillion in losses from U.S.-originated loans and assets, compared with its estimates of $2.2 trillion in January and $1.4 trillion in October.
Bail-out 'risk' for US taxpayers A watchdog for the US's $700bn bail-out plan for banks, said some aspects could be "unfair" to taxpayers. . . . . Part of Tarp is a "Public-Private Investment Programme" to buy troubled mortgages and securities that have been at the root of the credit crunch. But Mr Barofsky said taxpayer risk was many times that of the private parties. He also warned that the initiative, which includes giving private parties government subsidies to buy the troubled assets, could lead to more scope for fraud. The public-private partnerships - comprising Treasury, Federal Reserve and private investor money - could total $2 trillion.
Geithner Says Banks Will Have ‘Options’ for Boosting Capital Treasury Secretary Timothy Geithner said banks found to need additional capital at the conclusion of regulators’ stress tests will have a range of options for shoring up their balance sheets. The Treasury chief, testifying before a congressional oversight panel today, said lenders will be able to take taxpayer money, raise funds from private investors or convert previous government investments from preferred to common shares. Each bank can chose the “best mix” of alternatives and will likely make different choices, Geithner said. “They’ll be balancing lots of different considerations,” he said. “That’s a process they’re going to have to undertake, and it’s going to require a fair amount of care and effort.”
Dollar Declines as Geithner’s Bank Comments Erode Refuge Appeal The dollar declined against most actively traded currencies after Treasury Secretary Timothy Geithner said the “vast majority” of U.S. banks have sufficient capital, reducing the greenback’s haven appeal. The U.S. currency weakened more than 1 percent versus the Australian dollar, Swedish krona and New Zealand dollar on speculation the easing of concern about bank balance sheets will prompt investors to shift funds to higher-yielding assets. The euro gained for the first time in four days versus the yen and also strengthened against the dollar after a report showed German investor confidence in April increased to the highest level in almost two years.
Deflation: What is it? Deflation is a sustained decrease in the general price level of goods and services. It is often associated with periods of negative or stagnant economic growth like the Great Depression of the 1930s and the Japanese economy in the 1990s. What causes it? Deflation is typically triggered by falling consumer demand, as companies cut prices as they try to encourage spending. In the UK economy, spending has fallen as consumers are nervous about rising unemployment and investment losses, while tight credit markets limit borrowing. Why is it bad? Deflation increases the burden of debts as incomes fall while debts stay the same.
Spain’s Falling Prices Fuel Deflation Fears in Europe VALENCIA, Spain — Faced with plunging orders, merchants across this recession-wracked country are starting to do something that many of them have never done: cut retail prices. Prices dipped everywhere, from restaurants and fashion retailers to pharmacies and supermarkets in March. Hoping to increase sales, Fernando Maestre reduced prices by a third on the video intercoms his company makes for homes and apartment buildings. But that has not helped, so, along with many other Spanish employers, he is continuing to fire workers. The nation’s jobless rate, already a painful 15.5 percent, could soon reach 20 percent, a troubling number for a major industrialized country.
Geithner defends bank rescue program amid warnings Geithner faces questions about bailout amid warning it could expose taxpayers to losses Treasury Secretary Timothy Geithner defended the bank rescue program devised by the Obama administration Tuesday as the International Monetary Fund predicted U.S. financial institutions could lose $2.7 trillion from the global credit crisis. Geithner, testifying before the rescue plan's Congressional Oversight Panel, faced a battery of questions over the Treasury's public-private partnership investment plan to rid financial institutions of their troubled assets. His testimony came in the wake of a watchdog agency report that warned Obama administration initiatives could increasingly expose taxpayers to losses and make the government more vulnerable to fraud.
Banks still in distress, Geithner tells overseers Banks still broken, Geithner tells impatient overseers as they press for timetable, costs America's banks are still broken despite all their bailout billions, Treasury Secretary Timothy Geithner told impatient rescue overseers Tuesday as they pressed him on when things will get better and how much it will cost. A bleak new report estimated U.S. banks and other financial institutions could lose a stunning $2.7 trillion in all. How well is the mostly-spent $700 billion federal bailout working? "To date, frankly, the evidence is mixed," Geithner told a congressionally appointed oversight panel.
Fed tests harder on regional banks 'Stress tests' focus on loans, not securities, will favor big banks The government's "stress tests" of 19 large banks take a harsher view of loans than of other troubled assets, according to a Federal Reserve document obtained by the Associated Press. That approach favors a few Wall Street banks while potentially threatening major regional players. Regulators will use the tests to determine which banks are healthy, which need more capital and which might fail if the recession worsened.
U.S. Regulators Put Emphasis on Loan Quality in Tests tress tests on the 19 largest U.S. banks are increasingly focusing on the quality of loans they made after finding wide variations in underwriting standards, a regulatory official said. Supervisors concluded that banks’ lending practices need to be given as much weight as macroeconomic scenarios in determining the health of each bank, the official said. The approximately 200 examiners poring over the banks’ portfolios have found widely differing standards for mortgages and other loans, the person said.
Eliot Spitzer: Redemption Tour Emerging from exile after his own scandal, New York’s former top cop speaks his mind. Who has the right blend of power and personality to serve as Wall Street’s watchdog now? Very few government officials will be successful, because they don’t have the market credibility. If you want to understand markets, you have to understand the flip side of when markets don’t work. So if Warren Buffett wanted to say, “Here’s where, on a thematic level, government must step in to contain market failures,” he could do it. Or Felix Rohatyn. Or Bill Gates.
Traders Mounting "Speculative Attack" on U.S. Banks “The view being taken by people who trade credit in the United States is that we’re definitely not out of the woods. And I would say, in fact, there’s something of a run taking place in the credit market. Not a traditional bank run, but a speculative attack on some of the biggest financial players ….” Specifically, traders are shorting credit of major banks, betting that the government won't protect bondholders forever: ”Basically these people are betting the big banks will be forced into some sort of default. Now, if enough people bet that, and if the banks can’t draw on enough external support, which in their case would be from the U.S. government, then these runs can be self-fulfilling. It’s extremely dangerous and a situation that’s really not been addressed by the U.S. authorities.”
Treasury says about $110B left in bailout fund US Treasury says about $110 billion in resources left in $700 billion bailout fund Only $109.6 billion in resources remain in the government's $700 billion financial rescue fund. But Treasury Department officials said Tuesday they expect the fund will be boosted over the next year by about $25 billion as some institutions pay back money they have received. That would boost the total to $134.6 billion. The accounting details were made by Treasury Secretary Timothy Geithner in a letter to Elizabeth Warren, the head of the Congressional Oversight Panel.
IMF warns over parallels to Great Depression The International Monetary Fund has warned of "worrisome parallels" between the current global crisis and the Great Depression, despite the unprecedented steps already taken by central banks and governments worldwide. This recession is likely to be "unusually long and severe, and the recovery sluggish," said the Fund, releasing two advance chapters from its World Economic Outlook. However, it warned there is a risk that it could spiral down into a full-blown slump unless further action is taken to stop "feedback effects" gathering force.
Saving federal money the easy way SPIN METER: Obama's latest budget-tightening effort hardly makes a dime's worth of difference Cut a latte or two out of your annual budget and you've just done as much belt-tightening as President Barack Obama asked of his Cabinet on Monday. The thrifty measures Obama ordered for federal agencies are the equivalent of asking a family that spends $60,000 in a year to save $6. Obama made his push for frugality the subject of his first Cabinet meeting, ensuring it would command the capital's attention. It also set off outbursts of mental math and scribbled calculations as political friend and foe tried to figure out its impact. The bottom line: Not much.
5 Reasons Why House Prices May Never Recover House prices will eventually stop falling, probably in about two years. But will they ever recover to the levels we saw during the heights of boom? In some areas, prices might climb that high again. But for most markets, such a recovery will probably never happen, and would take decades it were to occur.
Once the bubble in an asset class pops, it never reflates.
Inflation destroys the gains anyway.
If we somehow avoid inflation, deflation will mean house prices keep sinking.
The combination of low interests rates and loose lending that fueled the boom is dead.
Demographics.
GM, Chrysler to get $5.5B more in government loans US gov't to loan GM up to $5B more, Chrysler to get $500M as automakers race to restructure. A federal report says the U.S. government will loan General Motors Corp. up to $5 billion more to make it through June 1, and Chrysler LLC could get up to $500 million more by April 30. The report on the bank bailout program released Tuesday by a special inspector general says the money will be made available for working capital as both companies try to meet government restructuring demands.
When Did Your County's Jobs Disappear? An interactive map of vanishing employment across the country. The economic crisis, which has claimed more than 5 million jobs since the recession began, did not strike the entire country at once. A map of employment gains or losses by county tells the story of how those job losses first struck in the most vulnerable regions and then spread rapidly to the rest of the country. As early as August 2007, for example—several months before the recession officially began—jobs were already on the decline in southwest Florida; Orange County, Calif.; much of New Jersey; and Detroit, while other areas of the country remained on the uptick.
USA - A Banana Republic Simon Johnson Decries Influence Of Wall Street Oligarchs America’s Crisis Resembles that of Emerging Markets: While at the IMF, Johnson saw so many financial crises that the core problem became old hat: In the free-wheeling growth years of an economic boom, the politicians and oligarchs of an emerging market like Russia or Argentina would get so close that eventually they would meld into a politico-industrial complex. As long as the boom lasted, this cozy relationship never bothered anyone--because everyone was getting rich. Fast forward to the latest market crisis--the one in the United States. The pattern is exactly the same, with a two-way money-and-power corridor now running between Washington and the modern oligarchs Wall Street.
Record Number Of State Businesses Close In First Quarter Nearly 3,500 Connecticut businesses closed between January and March - the highest number recorded in the first quarter of a year since the state began keeping records in 2000, Secretary of the State Susan Bysiewicz said Monday. The number of "business stops" rose by 16 percent to 3,477 in the first quarter of 2009 compared with the same period last year. In March alone, 1,676 Connecticut businesses shut down - the highest number in the month of March ever recorded. The number of businesses that opened during the first quarter was down by 13 percent compared with last year's first quarter, Bysiewicz said.
The Invisible Crash for Real Estate As I noted last week, the odds are high that in the coming months an inventory replenishment cycle will likely unfold, and in the process will give some long overdue lift to the moribund economic data. In my last article, I also tried to point out that while the headline numbers are bound to improve, that despite the improved news headlines, very little else is likely to have anything but an ongoing 'recession' feel. In fact, I would argue that ultimately, the contraction phase currently being seen is but a 'warm up' prelude to a much larger economic decline, which in the end will likely only be able to be characterized as a "major depression." The timing for the second phase of this large contraction is still hard to predict, as if the current Administration is successful in re-inflating the markets, the second leg of contraction could be pushed out several years. In that event, we would have the current contraction followed by a respite period of virtually stagnant, possibly slightly improving conditions, followed by a second and likely much more intense 'crash' phase a few years (2-4) down the road. In the end, much higher interest rates of all stripes are on the way, and with them eventually, a currency panic the world will remember for decades.
Don't Count on the Consumer for a Recovery The U.S. economy remains mired in a deep recession. How deep, well fourth quarter' GDP declined 6.3% which was the biggest drop in output in 26 years. GDP figures for the first quarter are not available yet but are expected to be down an equivalent amount. Earnings and profits will also be down substantially in the first quarter after falling 20% in the fourth.
Shakeout Nears for Real Estate Firms Though it came as no surprise to investors, the collapse of General Growth Properties, the nation's second-largest mall owner, has stirred new fears about a coming debacle in commercial real estate. The company, which owns 200 shopping centers encompassing 200 million square feet and 24,000 tenants, filed for bankruptcy protection last week. With the credit markets virtually shut down, General Growth said it was unable to refinance the $3.3 billion in debt that had already matured or would be due this year. These included loans totaling $900 million on two malls in Las Vegas - Fashion Show and the Shoppes at the Palazzo - that were due to be repaid in November. An additional $6.4 billion in debt matures next year.
Dealer Jobs Vanish as GM, Chrysler Bankruptcies Loom Thousands of GM and Chrysler LLC dealers across the U.S. are preparing for the probability that as many as 5,000 of them will be forced to close because of an automaker's bankruptcy. Dealers say they're ordering fewer vehicles, cutting expenses, retiring debt and firing workers to preserve cash.
GM, Chrysler to get $5.5B more in loan General Motors Corp. could get as much as $5 billion more in federal loans, while Chrysler LLC could get $500 million as they race against government-imposed deadlines to restructure, according to a government report filed Tuesday. The quarterly report by a special inspector general on the auto industry and bank bailout programs says the money will be made available for working capital. GM has until June 1 to complete restructuring plans that satisfy the government's auto task force, while Chrysler has until April 30.
In China, G.M. Remains a Driving Force Ford may be standing taller than General Motors in Detroit these days - flush with cash while its rival is forced to go repeatedly to Washington, hat in hand, seeking government bailouts. But in China the tables are turned. G.M. is a powerful presence here with 8 to 10 percent of the market for cars, minivans and sport utility vehicles, making it the second-largest automaker in China for such vehicles, passed only by Volkswagen. One of G.M.'s local joint ventures, Wuling, dominates the sale of bare-bones pickups and vans, hugely popular in rural areas, with nearly half the market.
The Top 12 Brands Likely to Disappear To determine which brands are most likely at risk, 24/7 Wall Street examined 100 large brands it believes are in trouble and, for each, looked at public financial records, sales information, analyses from industry experts, the competitive landscape in each's industry and the likelihood that a brand could be sold off in the case of parent-company financial trouble. The analysis points to the most serious peril for the following 12 brands which, 24/7 Wall Street says are most likely to disappear by the end of 2010:
Budget rental car
Borders books
Crocs footwear
Saturn vehicles
Esquire Magazine
Old Navy
Architectural Digest Magazine
Chrysler brand cars
Eddie Bauer
Palm
AIG
United Air Lines
Kerry aims to rescue newspapers The "death of newspapers" has drawn powerful political interest. Troubled by the possible shuttering of his hometown paper, Sen. John Kerry reached out to the Boston Globe on Tuesday, then called for Senate hearings to address the woes of the nation's print media. "To the Boston Globe family," the Massachusetts Democrat wrote to employees of the 132-year-old publication, which faces closure unless it can come up with $20 million in union concessions to parent company the New York Times by May 1. The Globe is losing $1 million a week.
'60 Minutes' video: Cold fusion is hot again Twenty years ago it appeared, for a moment, that all our energy problems could be solved. It was the announcement of cold fusion--nuclear energy like that which powers the sun--but at room temperature on a table top. It promised to be cheap, limitless, and clean. Cold fusion would end our dependence on the Middle East and stop those greenhouse gases blamed for global warming. It would change everything. But then, just as quickly as it was announced, it was discredited. So thoroughly, that cold fusion became a catch phrase for junk science. Well, a funny thing happened on the way to oblivion--for many scientists today, cold fusion is hot again. "We can yield the power of nuclear physics on a tabletop. The potential is unlimited. That is the most powerful energy source known to man," researcher Michael McKubre told "60 Minutes" correspondent Scott Pelley. McKubre says he has seen that energy more than 50 times in cold fusion experiments he's doing at SRI International, a respected California lab that does extensive work for the government.
More Than Junk Science
A Jackboot at Home, an Olive Branch Abroad President Obama seems intent upon cramming stifling socialist programs down our throats domestically, while he relies upon pretty-word diplomacy with foreign nations that have vowed to destroy us. Reportedly the President’s chief of staff Rahm Emanuel stated that an economic crisis is too good an opportunity to be wasted on economics, when it can be used, as Franklin Roosevelt did in the Depression, to revolutionize the nation’s social and political structure, in effect to amend the Constitution without the bother of submitting amendments in accord with the Constitution’s Article V.
San Francisco Police Department Their Representative in Congress is Nancy Pelosi. Chief Heather Fong (left), the first SFPD female chief of police; Theresa Sparks (center, former male), president of the San Francisco Police Commission, CEO of a multi million-dollar sex toy retailer, and a trans sexual woman. Sgt. Stephan Thorne (right, former female), the first transexual SFPD police officer.
Britain in elite company with budget blues Our predicament is desperate but not serious, as they used to say in the Austro-Hungarian Empire. Britain’s budget deficit threatens to hit £175bn this year, or 12pc of GDP. That is just about the worst performance of any major country at any time in history, during peacetime. Gordon Brown’s sin as Chancellor was to run a fiscal deficit of 3pc of GDP at the top of the long boom, when other countries were prudently using their windfall tax revenues to build a storm buffer. Many ran surpluses in 2007: Finland (+5.3pc), Denmark (+4.9pc), Sweden (+3.5pc), Spain (+2.2pc), Australia (+1.6pc) and Canada (+1.4pc). Germany was near balance.
Obama funds $20M tax payer dollars to immigrate Hamas Refugees to the USA Presidential Determination No. 2009-15 of January 27, 2009 Unexpected Urgent Refugee and Migration Needs Related To Gaza Memorandum for the Secretary of State By the authority vested in me by the Constitution and the laws of the United States, including section 2(c)(1) of the Migration and Refugee Assistance Act of 1962 (the ``Act''), as amended (22 U.S.C. 2601), I hereby determine, pursuant to section 2(c)(1) of the Act, that it is important to the national interest to furnish assistance under the Act in an amount not to exceed $20.3 million from the United States Emergency Refugee and Migration Assistance Fund for the purpose of meeting unexpected and urgent refugee and migration needs, including by contributions to international, governmental, and nongovernmental organizations and payment of administrative expenses of Bureau of Population, Refugees, and Migration of the Department of State, related to humanitarian needs of Palestinian refugees and conflict victims in Gaza. You are authorized and directed to publish this memorandum in the Federal Register. (Presidential Sig.) THE WHITE HOUSE, Washington, January 27, 2009 [FR Doc. E9-2488 Filed 2-3-09; 8:45 am] Billing code 4710-10-P
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Gold price could hit $1,500 The aggressive monetary policy of central banks around the world is playing havoc with the structure of the bullion market, creating a chronic shortage of gold that may soon push the metal to fresh records above $1,500 an ounce. Charles Gibson, a gold expert at Edison Investment Research, argues in a new report that negative real interest rates (below inflation) in the US and beyond has upset the "leasing" machinery in the gold industry and led to a sustained market squeeze. This is what occurred in the late 1970s, driving gold prices to $850 and ounce – roughly $1,560 in today's terms. Gold finished last week at $870.
Gold: Traders remain bullish as hedge fund managers buy gold futures Gold is set climb this week on speculation the decline in prices may boost demand from jewellers and other buyers of the physical metal, say analysts Gold is expected to climb this week on speculation the decline in prices may boost demand from jewellers and other buyers of the physical metal. Fourteen of 34, or 41 percent, of traders, investors and analysts surveyed by Bloomberg News said gold would advance this week. Eleven of them forecast lower prices and nine were neutral.
Gold yields an annual average return of 26% Gold is turning out to be the best form of investment asset for seasoned traders, financial planners and even house wives, according to a Gold Survey 2009 from the World Gold Council. The WGC survey says gold has yielded an annual average return of 26% in the last decade.
Fear Returns to Gold The markets (well, at least some of them) appear to be returning to the fearful reality that the global recession has no end in sight. The main beneficiaries of this realization are the dollar and gold and thus it should be no surprise that both are rallying strongly in tandem today. I have a suspicion, however, that gold will not be able to capitalize on the fear trade as successfully as it did earlier this year.
IMF Gold sale is a masterstroke from India, China India is working on a more ambitious proposal of selling the entire gold as it is an idle asset with the IMF. India and China want the IMF to sue the money to invest to raise IMF liquidity or spend it to improve incomes of the poorest countries. A large part of the IMF gold may find its way into central banks and private players. Since most of it will be out of reach for retail markets, gold prices may not get hammered.
Coming Inflation Good for Commodities Higher inflation is coming. It's impossible to predict exactly when it will arrive, but the trillions of dollars worth of new money injected into the global financial system make it inevitable. The prospect of inflation will likely be one of the key drivers for the energy and commodities sectors over the medium term. Inflation will eat away at the dollar and other paper currencies, raising the value of tangible assets as a hedge. In this way, commodities are similar to gold. The economic slowdown has reduced demand for oil and natural gas, but the supply-and-demand fundamentals are tightening rather than loosening. This is because supply has been declining at a greater rate than demand.
The 1997 Silver Price Manipulation During the late 1970s, the silver market was claimed to be "cornered" by the Hunt Brothers. That was far from true, for what they failed to understand, was that the attitude of the major brokerage houses was not that you were a pure trader-customer, but someone to pick - off for profit. During the 1980s, I had to take on some hedging projects that were awesome. One was in platinum. When you are the largest trader in a narrow market, they watch everything you do. If I was to sell, they assume the whole lot is being sold and jump in front. You suddenly find yourself trapped. I was a witness to the Hunt collapse. They couldn't get out of the market at any price. The dealers were selling in front of them taking short positions looking to buy back when the Hunts were in a state of panic dumping at any price.
Jack Bauer can't stop 'The Goldman Conspiracy' 10 reasons why Wall Street has absolute power over America's democracy Two mind-numbing fast-paced dramas. Two parallel worlds. One real, one fiction, both deadly. Jack Bauer, mythic hero of "24." Dying from a deadly bio-pathogen leaked from weapons developed by Starkwood, a rogue mercenary army attacking the presidency, hell-bent on taking over America. The other drama in play: "Hank the Hammer" Paulson, iconic Wall Street hero, a Trojan Horse placed inside Washington by Goldman Sachs as Treasury Secretary in control of America's $15 trillion economy. Goldman, a modern dynasty with vast financial powers much like those once used by the de' Medici, Rothschilds and Morgans to control nations.
Bank bailout may hurt taxpayers, be open to fraud Inspector general cites potential flaws in bank bailout, urges Treasury to adopt safeguards Taxpayers are increasingly exposed to losses and the government is more vulnerable to fraud under Obama administration initiatives that have created a federal bank bailout program of "unprecedented scope," a government report finds. In a 250-page quarterly report to Congress, the rescue program's special inspector general concludes that a private-public partnership designed to rid financial institutions of their "toxic assets" is tilted in favor of private investors and creates "potential unfairness to the taxpayer."
Geithner faces critical report on bail-out Tim Geithner, US Treasury secretary, will face lawmakers in Congress on Tuesday morning, hours after publication of a report that criticises aspects of the bank bail-out and days before stress test results that could lead to the government taking larger stakes in the financial ?sector. His appearance before the congressional oversight committee comes after increasingly confident public performances and tentative signs of improvement in parts of the economy.
Krugman: New Treasury Plan Is Just Shuffling Deck Chairs On The Titantic The latest bank rescue idea is getting criticized in all the usual places. This morning the New York Times reported that the Obama adminsitration is considering converting TARP preferred shares to common equity. Paul Krugman, who has been a leading critic of the Bush-Obama bailout moves, thinks the move is just "shuffling-deck-chairs" on the Titantic. According to Krugman, the move to reclassify the shares does nothing to improve bank capital. Senior creditors should be indifferent to whether shares are preferred or common, since both are junior to debt.
Derivatives: A $700+ Trillion Bubble Waiting to Burst In the past three years, while banks all over the world and Wall Street were imploding, while some $40-$50 trillion of capital was being destroyed in global stock markets, one financial market kept growing. That market is the financial derivatives market. According to the Bank for International Settlements [BIS], the global Over the Counter [OTC] derivatives market has grown almost 65% from $414.8 trillion in December, 2006 to $683.7 trillion in June of 2008. On the BIS’s own website, there are no updated figures for the notional derivatives market since June 2008, so we can likely assume, with some margin of safety, that this market has now grown to more than $700 trillion. Comparatively speaking, the total market cap of all major global stock markets is approximately $30 trillion.
Fed's Kohn Says GDP to Show Large Decrease, Sizeable Risks to Inflation Ahead Federal Reserve Vice Chairman Donald Kohn said next week's release of the Commerce Department's advance GDP estimate for the first quarter of 2009 is expected to show another sizable decrease, and this recession is likely to be among the deepest and longest since World War II. Speaking in Delaware on Monday evening, Kohn said consumption appears to have steadied after a sharp drop in the second half of 2008. Kohn also said that the declines in sales and construction of single-family homes have abated, due in part to low mortgage interest rates and greater affordability of housing.
Stocks slide as investors dump financials Stocks fall as investors worried about trouble spots on balance sheets dump financials Investors are having doubts about banks' profit reports and wondering whether their better-than-expected performance mask larger problems with bad debt. Stocks fell sharply early Monday as investors sold financial stocks and locked in profits after a six-week rally. The major indexes slid more than 2.5 percent, including the Dow Jones industrial average, which fell 200 points.
Dow's biggest decline in 7 weeks Wall Street pulls back after six straight weeks of gains on worries about banks, despite BofA quarterly results. Stocks tumbled Monday as a six-week old rally lost steam on worries about financial sector earnings, despite Bank of America's better-than-expected quarterly results. . . . . "We had a nice run over six weeks, but it was still a bear market rally," he said. "Now today, people are looking at Bank of America and asking how they could have earned what they did and whether it's just a one-time thing."
A New Round of Worries Pushes Shares Lower Wall Street's nagging fears about the financial system resurfaced on Monday, pushing stocks sharply lower. Even as the banking giant Bank of America posted big profits, investors fretted about losses and other write-downs that could be lurking. And as the focus of earnings season shifts from banks to non-financial institutions, investors were bracing for lower profits and falling revenues that would reflect how the toll of the recession and last fall's financial crisis had spread to industrial companies, retailers and others.
Purported Stress Test "Leak" Gives Market Jitters Here's how on-edge the market and regulators are right now... Last night, The Turner Radio Network, a white supremacist outlet run by Hal Turner, published what it claimed was a "leak" of the Treasury stress tests. They didn't actually publish a document, just a summary and in short they said the stress tests showed the entire banking system was stunningly insolvent.
U.S. Officials Signal No Need for More TARP Funds From Congress Obama administration officials signaled there may be no need to request more financial-rescue funds from Congress as several banks plan to return taxpayer money and others are pushed to tap private markets first. White House chief of staff Rahm Emanuel said while he had not seen results of stress tests on the 19 biggest banks, he believed "we won't" have to get more money. Aide Lawrence Summers said "the first resort for more capital is going to the private markets," by issuing new equity or swapping some liabilities into stock that dilutes other stakeholders.
At the heart of America's Economic Problems Any healthy economy has a reasonable balance of consumption and production. This is the manifestation of the age-old equation of "supply and demand". When you hear that there are "imbalances" in an economy, it sounds tame but it could mean anything from a bad problem to a massive crisis. America needs to address this balance of consumption and production if it is going to be back on a sound foundation for economic growth and prosperity. The problem is that government policy created the massive imbalances in recent years and current policy initiatives will only make matters worse.
Geithner says system health linked to bank paybacks U.S. Treasury Secretary Timothy Geithner said he would consider the health of the financial system and the flow of credit in deciding whether banks can repay bailout funds from the government, the Wall Street Journal reported on Monday. In an interview published on its website, the newspaper said Geithner indicated the health of individual banks would not be the sole criterion for returning government funds.
Profits mask bank problems A string of surprisingly strong earnings reports suggests US banks are emerging from a near-death experience, but some analysts say the troubled sector faces more pain. Bank of America on Monday joined the parade of financial firms reporting robust results - a profit of $US4.2 billion ($A6.02 billion) in the first quarter, beating its performance for all of 2008. Last week, Citigroup, JPMorgan Chase and Goldman Sachs all topped expectations with strong profits, a hopeful sign for an industry critical to recovery from the severe recession. Wells Fargo said its results would show "record" profits in the January-March quarter. The apparent renewed health of banking sector comes in part from record-low interest rates from the Federal Reserve, which has cut its base rate to near zero as part of an effort to stimulate lending and growth.
Bank of America's surge in bad loans revives economic gloom The embattled US financial services group Bank of America (BoA), which is facing a revolt by shareholders, delivered a gloomy assessment of economic conditions as a surge in bad loans forced it to set aside $13.4bn (£9.2bn) to cover credit losses. BoA reported a first-quarter profit of $4.2bn, compared with $1.2bn for the same period a year ago. But analysts said that after stripping out a series of large one-off gains, the bank's underlying performance was closer to break-even.
Treasury has enough capital for banks State preferred could be converted to common, raising governance issues The U.S. government has enough money to shore up 19 large U.S. banks that are participating in a $700 billion financial rescue package, according to key Obama administration officials. "We believe we have those resources available in the government as the final backstop to make sure that the 19 are financially viable and effective," White House Chief Of Staff Rahm Emanuel said on the ABC program "This Week" on Sunday.
Recession pits small banks against big banks First they felt their reputations were stained by the financial meltdown. Now they're paying a price they protest is unfair. Small bankers are complaining loudly that they had nothing to do with the excesses of big Wall Street firms, freewheeling deals in the mortgage market and risky investments that precipitated the economic crisis. Still, in the meltdown's wake, community bankers find themselves under tighter scrutiny from federal regulators. They say the $700 billion financial bailout has favored large institutions. And they are upset about a special assessment the government wants to charge to shore up the Federal Deposit Insurance Fund, which failed banks are draining. This all comes as the government, trying to stimulate the economy, is pleading with banks - big and small - to lend, lend, lend.
How Much Could the Government Lose on TARP? While the U.S. government keeps doling out taxpayer money in a frenzied effort to save the financial system, more scrutiny is being paid to what the government is getting in return for its bailouts -- and how big a loss taxpayers are likely to suffer in the end. Elizabeth Warren, who heads the Congressional Oversight Panel responsible for keeping tabs on the Troubled Asset Relief Program [TARP], estimates that $590.4 billion of the total $700 billion approved by Congress has been spent or committed over the past six months. But economic stabilization efforts that have relied on the Federal Reserve's balance sheet have "permitted Treasury to leverage TARP funds well beyond the funds appropriated by Congress," the panel said in its Apr. 7 oversight report.
TARP 25 cents per $1, Goldman 'Hidden forms of Government Subsidiaries', Obama Promises Broken
Big banks have a big credit problem Bank of America and Citigroup have been sinking billions into rainy day funds, but problem loans are growing even faster. Banks are socking away funds for future loan losses at a record clip. But at the sickliest institutions, problem loans are rising even faster. On Monday, Bank of America became the latest big bank to report a stronger-than-expected quarterly profit, posting net income of $4.2 billion, or 44 cents a share. Analysts had expected a profit of just 4 cents a share.
Yellen says policymakers need to pop bubbles San Francisco Federal Reserve President Janet Yellen said late Thursday that central banks need to deal with bubbles in asset prices before they get too big, although monetary policy may not be the best tool for the job. Letting them go unchecked "can lead to grave consequences," she said in prepared remarks for a conference held in honor of economist Hyman Minsky in New York. "Episodes of exuberance, like the ones that led to our bond and house-price bubbles, can be time bombs that cause catastrophic damage to the economy when they explode," said Yellen, a voting member this year of the Federal Open Market Committee. The FOMC has cut interest rates close to 0% and, by buying up debt and making special bank loans, the Fed has pumped about $1 trillion into the U.S. financial sector. It meets against later this month.
Help Design The Next Financial Meltdown Armed with the lessons of the current crisis, a brand new regulatory regime is set to emerge. Much of it will focus on reducing financial complexity, with an eye towards eliminating bizarre derivatives that "nobody" can value. Lenders will face new regulations so that we don't have the subprime mess again. Hedge funds will be forced to disclose what they own. Some of it may be helpful, and eventually we'll return to a new normal. The crisis will past. But people are wily. As Richard Bookstaber, author of Demon of our own Design, is fond of pointing out, when you design safety measures for a nuclear plant, the machinery doesn't sit there, trying to come up with ways to deceive safety officials. Sure, sometimes it breaks in unexpected ways, but not because it schemes.
Engineering Confidence Obama, Geithner, Bernanke Tout Hard It's normal for the CEO of a public company to speak glowingly of its products and prospects in complete contradiction to whatever reality might be showing. Have you ever heard of a company president saying, "Well things don't look that great for us, and our future isn't very exciting either."? The answer is probably " yes", but only after they've filed for Chapter 11. CEO's are expected to 'talk up' their companies, just as fund managers 'talk their book' whenever anybody sticks a microphone or camera in their face. When Goldman Sachs predicted that oil could rise to $105 a barrel in March of 2005 when it was trading in the $50 - 60 per barrel range, it set a new price record of $71 by the end of August.
Obama wants agency spending cut by $100M Official: Obama calling on Cabinet to cut spending by $100M, heads to CIA for consultations President Barack Obama convenes his first formal Cabinet meeting Monday and will ask department and agency chiefs to look for ways over the next 90 days to cut $100 million out of the federal budget, a senior administration official said. Back from his fence-mending trip to Latin America and the Caribbean, Obama will be reminding the panel that American families are having to make tough financial decisions and need to know the government is spending their money wisely, too. The official discussed Topic A for the session on grounds of anonymity because it will be behind closed doors. A second senior official, also speaking anonymously, said Obama will point to cuts already being proposed.
T. Boone Pickens sees oil at $75 at end-year Texas oil billionaire T. Boone Pickens on Monday reiterated his prediction that crude oil prices would hit $75 a barrel this year as producers scale back production. Pickens said about OPEC producers: "They told you they want $75 by the end of the year, I would count on that, I believe them."
Chrysler Financial Turned Down TARP Funds To Avoid Pay Caps Last week, Chrysler Financial turned away a $750 million government loan. Executives said that they had plenty of cash to meet short term financial needs. Now the Washington Post is reporting that the real reason Chrysler Financial turned down the government funding is that executives didn't want to abide by new federal limits on pay. The dynamic should be familiar to anyone who is a regular reader here. For executives, pay caps dramatically change the bailout calculus. If they take the bailout, they find their compensation so severely limited it isn't much better than having the company go bankrupt. If they don't take the bailout, they may risk their company but they also preserve a potential upside. Obviously, many executives will chose to risk the company to preserve their pay.
GM exec says 1,600 will lose jobs in next few days GM exec says 1,600 will lose jobs this week as automaker downsizes to stay in business About 1,600 white-collar workers at General Motors Corp. will lose their jobs in the next few days as the troubled automaker accelerates cost cuts in order to qualify for more government aid. GM North America President Troy Clarke said Monday in an e-mail to employees that the layoffs are needed to ensure the company's long-term viability.
Get Ready For A Web Sales Tax State tax rolls have been so decimated there’s an effort in Washington to squeeze local taxes out of web retailers to make up the difference. The New York Post reports that a bill is likely to be introduced this week to force eBay, Amazon and others to start collecting sales taxes fro online shoppers on behalf of states.
(Un)Intended Consequences: Uncertainty, Inflation & Inflexibility Present policies may be sowing the seeds for the next financial crisis. Despite recent market optimism, we believe present interventions could produce significant future adverse and unintended consequences. Rather than curing the patient, the present initiatives may be overprescribing the patient with medication that cause significant side effects (and leave a bad taste in the mouth).
Amish workers hit hard by recession After wave of layoffs, leaders change policy, OK jobless aid The Amish are defined by their religious beliefs, shunning modern conventions such as automobiles, insurance and electricity in their houses. But some of the Amish in hard-hit northern Indiana realize they can no longer avoid another newfangled idea: unemployment checks. The Amish church frowns on government aid but relented on unemployment checks after a wave of layoffs stung Amish laborers in this settlement 120 miles east of Chicago. Church leaders justified the decision because workers are collecting on the unemployment taxes they already paid into the system. "No one says go out and do it," explained Eli Miller, 72, an Amish bishop who also prepares income tax returns. "But when they have to feed their families, we thought it would be OK to accept some of it, even though we would rather not."
Astronaut says we're not alone We are not alone. "We are being visited," the 79-year-old grandfatherly "spacefarer" told 100 or so UFOlogists gathered at a National Press Club conference called by the Paradigm Research Group (motto: "It's not about lights in the sky; it's about lies on the ground"). "It is now time to put away this embargo of truth about the alien presence," said the astronaut who made the longest moonwalk in history. "I call upon our government to open up ... and become a part of this planetary community that is now trying to take our proper role as a spacefaring civilization."
Max Keiser on the worldwide food Riots Part 1/3
Max Keiser on the worldwide food Riots Part 2/3
Max Keiser on the worldwide food Riots Part 3/3
'60 Minutes' video: Cold fusion is hot again Twenty years ago it appeared, for a moment, that all our energy problems could be solved. It was the announcement of cold fusion--nuclear energy like that which powers the sun--but at room temperature on a table top. It promised to be cheap, limitless, and clean. Cold fusion would end our dependence on the Middle East and stop those greenhouse gases blamed for global warming. It would change everything. But then, just as quickly as it was announced, it was discredited. So thoroughly, that cold fusion became a catch phrase for junk science. Well, a funny thing happened on the way to oblivion--for many scientists today, cold fusion is hot again. "We can yield the power of nuclear physics on a tabletop. The potential is unlimited. That is the most powerful energy source known to man," researcher Michael McKubre told "60 Minutes" correspondent Scott Pelley. McKubre says he has seen that energy more than 50 times in cold fusion experiments he's doing at SRI International, a respected California lab that does extensive work for the government.
Banks Shut in Missouri, Nevada, Bringing 2009 U.S. Tally to 25 Banks in Missouri and Nevada were seized by regulators today, bringing this year's tally to 25 and equaling the number of banks shuttered in all of 2008, as a recession drives up unemployment and home foreclosures. American Sterling Bank of Sugar Creek, Missouri, was shut by the Office of Thrift Supervision and Great Basin Bank of Nevada in Elko was closed by the Nevada Financial Institutions Division. The Federal Deposit Insurance Corp. was named receiver of the banks with combined assets of $451.9 million and deposits of $393.3 million, the FDIC said in e-mailed statements.
The Moral Case For Rampant Inflation Despite the seeming complexity of the programs, the government's strategy for battling the financial situation is pretty straightforward. The idea is to transfer as much private debt as possible to the federal government, betting that the government's balance sheet can sustain the added leverage. Eventually, the private sector, free from all the debt it's built up, is expected to return to growth -- with the help of some new bridges, high speed rail lines and other stimulus goodies. There are basically two ways the government can buy up all this debt. It can borrow the money, in large part from foreign sources, or it can just print it up and create rampant inflation.
Inflation is looming on America's horizon The US last week showed its first signs of deflation for 55 years, prompting inevitable fears of further deflation in the future. Yet the primary reason for the negative rate of US inflation is the dramatic 30 per cent fall of commodity prices. That will not happen again. Moreover, excluding food and energy, consumer prices are up 1.8 per cent from a year ago. That is the good news: the outlook for the longer term is more ominous.
Gold - Confidence and Inflation "You can fool all of the people some of the time and some of the people all of the time, but you can't fool all of the people all of the time, but you can give it a good go and discredit the rest who won't be fooled!" If it doesn't go like that maybe it should? The issue of Money. Many are still digesting the outcomes of the G-20 meeting in London. So a thought occurred to me. If I went to my bank and asked, "May I have another loan? Oh, I know I am terribly over-borrowed already, but could you lend me my entire year's income on top of my present loans?" He would ask me, "against what collateral?" I would say, "none!" His reply would likely not come from the best of English. Now I tell him that, "I am your only client and say no and you'll go bust as well as me." Then he might smile and hail me as his financial savior too?
The Future of Money: The Return of the Gold Standard The most successful of the current crop of microcurrencies is GoldMoney, a 21st-century take on the oldest financial trick in the book. When a retired Florida oncologist named Douglas Jackson launched the world’s first digital-gold currency in 1996 - an online payment system fully backed by precious metal reserves and marketed under the brand name e-gold - he did not appear to be on the winning side of monetary history. Once upon a time, nearly a hundred years before, the gold standard reigned supreme: A dollar bill or a pound note or any other major currency was in those days just a marker for a fixed amount of government gold, redeemable at any time. But by the onset of the Depression, the economist John Maynard Keynes had declared the gold standard a “barbarous relic,” too crudely physical a form of money for the complex demands of modern economies. And by the century’s end, the multitrillion-dollar global money supply had long since shed its ties to gold or any other tangible asset in particular and now resided almost wholly in the digital circuitry of financial networks. Money had gone virtual, and reattaching it to gold made as much historical sense, it seemed, as instant-messaging by pigeon post.
Max Keiser about the Shadow banking System
The Calm Before the Storm I take a much longer-term view and, basically, the way certain things - like metal prices or market bottoms - are going to react is going to depend largely on what happens elsewhere, mostly with the government. The things we're trying to analyze are not masters of their own domains, so to speak. I think a lot of this money printing that has been taking place is starting to filter into prices and it's showing in metal prices, it's showing in grocery prices, it's showing in all kinds of prices. In terms of a market bottom for the general market, I hesitate to predict that because, again, so many things are wrong and so many things are moving or changing that it is absolutely impossible, at least for me, to predict. What I do know is the market is going to significantly underperform vs. gold.
The Time To Buy Gold And Short General Equities Is Near Gold is now very near our long anticipated target buying range of $855 to $823, and the S&P 500 is getting overbought, though it may push up to the 930-945 range (which should represent an excellent shorting opportunity). Crude oil remains trapped between $37 and $56, and the Japanese Yen is showing potential signs of starting to strengthen again. Below is a ratio chart of the gold price versus the S&P 500 Index - broadly representing the overall U.S. stock market. Most equity markets worldwide also fall or rise roughly in line with the S&P 500 index. The higher the ratio, the more gold is worth compared to the equity market.
The Goldsmiths - Part LXXI While the Rothschild Cabal plutocrats are busy planning their Amero or some other regional currency for the Americas (to lead the way to a one world currency), Venezuelan President Hugo Chavez and his colleagues are moving forward with their own plans for a regional currency to replace the US dollar. Chavez made the announcement on Apr 16, 2009 in Caracas. The Sucre In a story on "Venezuela and Leftist Allies Create Regional Currency," by Patricia Rondon, Reuters reported it as follows: "An alliance of Latin American and Caribbean governments led by Venezuela will create a regional electronic currency that is expected to circulate by 2010, Venezuelan President Hugo Chavez said on Thursday. "The leftist Chavez, who has called the global financial crisis the end of capitalism, has frequently urged allies to stop storing currency reserves in dollars and recently proposed creating an international currency backed by oil reserve/ es." Per the story, the new currency will be called the sucre. It is to be built around the ALBA trade bloc of nations.
Funds try to spot the great oil rebound Oil is too cheap. At around $50 a barrel, it is trading far below the production costs of almost all new sources of crude and energy substitutes. A sustained price above $70 is needed to cover investments in Canada's tar sands, the deep-water fields off Brazil, and Russia's "High North" above the Arctic Circle. Much the same goes for biofuels from grains (sugar is cheaper). They matter. Bioethanol swings the global crude price. It accounted for 60pc of extra oil supply worldwide from 2007-2008.
Socialism is no longer an insult, but it is a bit of a joke The s-word was once the worst thing you could call an American, but the recession has sparked a revival in its fortunes, writes Tom Leonard. Even before a poll last week revealed that almost a third of young Americans now prefer it to capitalism, socialism has been enjoying something of a renaissance recently in the United States. For decades, calling another American a socialist was about the nastiest thing you could say. Franklin Roosevelt got it all the time. But it declined in the post-Cold War era: without the commies, it just didn't sound so menacing. "Liberal" replaced it as the pejorative of choice for the political Right. Now, the "s" word is back on top again, thanks largely to huge bank bailouts and federal stimulus packages. If you can drive home the point with a "USSA - Comrade Obama" car bumper sticker, all the better.
What's this? Financial Chronicle reports that China and India want the IMF to sell its entire holdings of gold to raise money for funding poor nations (yeah, since when have China and Russia been worried about poor nations?). The IMF has gold holdings of about $100 billion. A very small part of China's reserves is in gold. It's obvious that China wants fewer dollars and more gold. If China went into the open market for gold, they would probably drive the price of gold up to $2,000 an ounce. My bet is that China would like to take in the whole $100 billion of the IMF's gold. And they're working on it.
President Obama may not sanction IMF gold sale Global stock markets continue to rally on the "we think it's over" hope, especially driven by financials as news about increased earnings for the first quarter has emerged. Some scepticism still persists as indicated through the ongoing collapse in global trade and employment which does not bode well for the broader markets. Crude Oil has spent either side of Easter in a tight range around $50 which has become a bit of a pivot point for now. Buyers are looking for demand to improve taking its cue from the improved sentiment in stock markets, also aided by expectation of supply problems once this current demand slump is over.
Why central banks refuse to sell gold? Do you know the role of Central Bank Gold Agreement in the global gold prices? The CBGA has a huge role in the prices of the yellow metal. And, this time, if you trust the World Gold Council's advice, the central banks are not selling as much gold as it used to under the CBGA. So, according to WGC, the central banks have sold only 91 tonnes of gold in the first six months of the fifth and final year of CBGA from the 500 tonnes permitted under the agreement. And the pact will expire in September. Total sales in the 2007-2008 year were 358 tonnes and sales in 2006-2007 year were 475.8 tonnes.
The New Financial Overlords: The Debt Class and those that provide the Debt in Serfdom. Understanding the new Structure of the American Financial Landscape. The stock market at least in its current form is a horrible indicator of the actual economic carnage falling upon the majority of Americans. Most Americans are witnessing the current rally and wondering why the massive run up (largely in financial related stocks) is going forward while they are getting called into supervisor offices behind closed doors and being laid off or seeing their hours cut back. Wall Street has completely disconnected from Main Street. It is also hard for many to understand how they are having their limited income being taxed to finance the bailouts of Wall Street and financial cronies while they are asked to do more with less. They are seeing these same institutions, alive because of the massive funding from the American people since our government ideally should reflect the will of the majority, shut off credit lines and raise rates while the government through the U.S. Treasury and Federal Reserve showers the banks and Wall Street with easy low rate financing thanks to the American taxpayer. Welcome to the new America.
Gerald Celente Violent Revolution will start soon part 1 /2 America moving into fascism - state controlled capitalism
Zero Percent on Treasury Bills as China, Fed Policies Converge The last time U.S. Treasury bill rates headed toward zero percent investors were panicking. Now it's an indication Federal Reserve Chairman Ben S. Bernanke's efforts to revive credit markets are starting to work. Rates on three-month bills turned negative in December for the first time since the government began selling them in 1929 as investors sacrificed returns to preserve principal. After increasing at the start of the year, rates have dropped 0.20 percentage point since the beginning of February to 0.13 percent April 17.
Treasuries shaky as investors' sanctuary America has seen a lot of speculative manias during the past decade - whether the wild buying spree in technology stocks in the late 1990s, the euphoric boom in housing in the middle of this decade, or the seemingly unstoppable rise in oil and other commodities last year. Now there may be a bubble developing in the market for Treasury debt, if only because there is no safer place for investors to park their cash and escape the collapse in stocks, commodities, mortgage debt and other stricken markets.
The Inundation of Debt and Its Toll on Our Economy It is the crux of our economy. It is the all-important foundation upon which economics is built. It is supply and demand and the constant attempt to reach an equilibrium that our policymakers are now dealing with in their attempt to revive our economy. To fund the astronomical size of the stimulus packages the White House has authorized, as well as to finance the budget deficit, the government has had to issue record amounts of debt. As the government sells its debt and increases the supply of bonds in the marketplace, it must lower the price to find sufficient buyers, driving interest rates on the debt up. On Friday, the yield on 10-year Treasury notes rose 13 basis points to 2.89%, as the price dropped $11.25 per $1000 face amount to 98?.
Gold Extends Decline for Third Day as Equity Rally Trims Demand Gold dropped for a third day as the strength of global equity markets eroded demand for the precious metal as a safe-haven investment. Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, fell for a second day, dropping 1.2 percent to 1,105.98 metric tons on April 17, the lowest since March 19. The decline in the fund's holdings may put pressure on bullion at the start of the week, according to UBS AG.
The Seduction of America The biggest step towards the world of modern finance was the abandonment of the Bretton Woods stability framework and fixed exchange rates that took place in the 1970's and Nixon's final nail in the coffin for gold convertibility with the US Dollar. It was not for the reason that most believe i.e. the creation of fiat currencies but because of the creation of a new era of financial complexity. Suddenly the world had a plethora of new financial variables - exchange rates, floating rate instruments denominated in euro-currencies and I do not mean the Euro of today but the euro market that originated for dollar based deals that were outside the US jurisdiction and based in London, financial futures and swaps etc. etc.
Max Keiser - Terminator Seeds & Copyright Inside Story 19 April 2009
Obama Says He'll Seek 'Accountability' for Bank Aid President Barack Obama said he'll demand "accountability" from any U.S. banks that require additional taxpayer money following "stress tests" being conducted by regulators. "We'll try to use as light a touch as we can, but I'm not going to simply put taxpayer money into a black hole where you aren't going to see results or some exit strategy so the taxpayers ultimately are relieved of these burdens," Obama said at a news conference today in Trinidad and Tobago as he wrapped up his first Summit of the Americas.
No taxpayer money for any bank "black hole" U.S. President Barack Obama said on Sunday that stress tests for the country's top banks would show some need more public help than others, but he vowed not to pour taxpayer money into a "black hole." "Different banks are in different situations. They're going to need different levels of assistance from taxpayers," Obama told a news conference in Port of Spain, Trinidad and Tobago, where he was attending the Fifth Summit of the Americas.
US to put conditions on Tarp repayment Strong banks will be allowed to repay federal bailout funds, but only if such a move passes a test to determine whether it is in the national economic interest, the Financial Times reported on Sunday, citing a senior U.S. administration official. The report said banks that had plenty of capital and demonstrated an ability to raise fresh capital from the market should, in principle, be able to repay government funds.
U.S. economy still under strain President Barack Obama said on Sunday that the U.S. economy remained under strain and his top economic adviser tempered hopes for a speedy recovery that have driven the stock market to successive gains. "We're not out of the woods. This is still a difficult time for the economy. Credit is still contracted," Obama told a news conference in Port of Spain, Trinidad and Tobago, where he was attending the Fifth Summit of the Americas.
Volcker: Recovery will be a 'long slog' Obama's senior economic advisor says economy is in a "great recession"; says Fed's role in economy will be reviewed. Paul Volcker, senior economic adviser to President Barack Obama, said Saturday that the U.S. economic recovery will be a "long slog" but that the rate of decline "is going to slow." The United States may not be in a Great Depression but it is "in a great recession for sure," following the economy's unprecedented tumble in late 2008, Volcker said at a financial markets conference at Vanderbilt University in Nashville, Tennessee. Volcker, a former chairman of the U.S. Federal Reserve, did not give a time-frame on his expectations for when the United States will pull out of the recession that started in December 2007.
Bernanke Says Crisis Damage Likely to Be Long-Lasting Federal Reserve Chairman Ben S. Bernanke said the collapse of U.S. lending will probably cause "long-lasting" damage to home prices, household wealth and borrowers' credit scores. "One would be forgiven for concluding that the assumed benefits of financial innovation are not all they were cracked up to be," the Fed chairman said today in a speech at the central bank's community affairs conference in Washington. "The damage from this turn in the credit cycle -- in terms of lost wealth, lost homes, and blemished credit histories -- is likely to be long-lasting."
U.S. May Convert Bank Bailouts to Equity Share President Obama's top economic advisers have determined that they can shore up the nation's banking system without having to ask Congress for more money any time soon, according to administration officials. In a significant shift, White House and Treasury Department officials now say they can stretch what is left of the $700 billion financial bailout fund further than they had expected a few months ago, simply by converting the government's existing loans to the nation's 19 biggest banks into common stock. Converting those loans to common shares would turn the government aid into available capital for a bank - and give the government a large equity stake in return.
Gerald Celente Violent Revolution will start soon part 2 /2
Federal banking takeover unlikely White House touts 'tools' Some big banks will need more bailout bucks, Obama administration officials said Sunday, although it is unlikely the government might need to take over any reeling institution. "We're confident that, yes, some are going to have very serious problems, but we feel that the tools are available to address these problems," senior presidential adviser David Axelrod said.
Citi's "Accounting And Government Magic" Credit ratings agency Egan-Jones is seriously unimpressed by Citigroup's (C) reported first quarter "profit." Zero Hedge has its latest comment on the bank: Accounting and government magic - the recasting of FASB157 enables financial institutions to defer the recognition of losses with the result that C's March trading profits swung from a $6.8B loss to a $3.8B gain. Another item worth reviewing is the decline in interest expense from $16.5B last year to $7.7B this year. Nonetheless, much more equity capital is needed. Beyond the conversion of preferred to common, watch the form of any additional capital.
Stiglitz Says Ties to Wall Street Doom Bank Rescue The Obama administration's bank- rescue efforts will probably fail because the programs have been designed to help Wall Street rather than create a viable financial system, Nobel Prize-winning economist Joseph Stiglitz said. "All the ingredients they have so far are weak, and there are several missing ingredients," Stiglitz said in an interview yesterday. The people who designed the plans are "either in the pocket of the banks or they're incompetent."
Bernanke calls for regulatory balance Federal Reserve Chairman Ben S. Bernanke said Friday that financial innovation is good for the economy but should be properly regulated. New financial products, such as subprime mortgages and structured investment vehicles, have become symbols of the economic crisis. The challenge for the government is to come up with regulations that protect consumers without stifling innovation, the Fed chief said. "As we have seen all too clearly during the past two years, innovation that is inappropriately implemented can be positively harmful," Mr. Bernanke said in a speech to a Fed conference.
Regulators Finally Admit Stress Test Isn't Stressful Enough Finally, regulators are acknowledging the fact that their stress tests aren't stressful enough. We've already passed the baseline scenario, and the pessimistic scenario of 10.4% unemployment isn't even that pessimistic. So, does this mean regulators are going to revisit their assumptions. Nope, they're too far along in the process to do that. But according to FT, they are going to take the results more seriously. In other words, if a bank "fails" the stress test, then they really failed.
Do Banks Have To Disclose The Stress Tests Results? When it comes to the results of the stress-test, the Obama administration believes that darkness is the best disinfectant. It doesn't want capital markets to freak out about the stress tests, and so it plans to keep the results quiet. We have a feeling the only time we'll hear that a bank needs to raise new capital is when it actually does.
Obama's Revenue Plans Hit Resistance in Congress President Obama is running into stiff Congressional resistance to his plans to raise money for his ambitious agenda, and the resulting hole in the budget is threatening a major health care overhaul and other policy initiatives. The administration's central revenue proposal - limiting the value of affluent Americans' itemized deductions, including the one for charitable giving - fell flat in Congress, leaving the White House, at least for now, without $318 billion that it wants to set aside to help cover uninsured Americans. At the same time, lawmakers of both parties have warned against moving too quickly on a plan to auction carbon emission permits to produce more than $600 billion.
Obama to ask agency heads for budget cuts President Barack Obama said Saturday he will ask all of his department and agency heads for specific proposals for cutting their budgets at his Cabinet meeting early next week as he searches for ways to streamline government spending. Obama, who is attending the Summit of the Americas in Trinidad this weekend, said in his weekly radio and Internet address that he would make the request for cuts Monday at a Cabinet meeting.
Will public pensions be next bailout? Along with the stock market, retirement savings, and taxpayers' sanity, state and municipal government employee defined-benefit pension funds are reeling from the financial meltdown. The current economic turmoil and stock market downturn have caused government employee pension funds to lose hundreds of billions of dollars. The crisis only reinforces the need for states to move their pension systems from the onerous defined-benefit obligation to a more mobile and sustainable defined-contribution model. It's a potentially catastrophic problem.
Peter Schiff 4/18/2009 "Government Propping Up Malinvestment - Punishes Savers"
Obama to take aim at credit card abuses President Barack Obama plans to crack down on deceptive credit-card industry practices that have saddled U.S. consumers with huge debts and soaring interest rates, a senior aide said on Sunday. Top White House economic adviser Lawrence Summers said Obama would be "very focused in the very near term on a whole set of issues having to do with credit card abuses."
IMF to cut global forecast, sees 2010 recovery The International Monetary Fund's (IMF's) Managing Director Dominique Strauss-Kahn was quoted on Sunday as saying the IMF would cut its global economic forecasts in the coming week and that he expected a recovery to start in the first half of next year. "The forecast that we will present this week will be worse than the previous one," Strauss-Kahn told Germany's Handelsblatt business daily in an interview to be published on Monday.
After the Bank Failure Comes the Debt Collector Rick Williamson, a Chicago banker turned junk-loan buyer, knew the name-calling would start again when he moved to foreclose on the Fayetteville Athletic Club, a sprawling, family-run gym and spa complex in this corner of northwest Arkansas. "Vulture, bottom feeder," Mr. Williamson said, recalling insults thrown his way during his years hunting for bargains in distressed real estate. And just as he predicted, the insults are flying. "Trash-eating rat," is how Robert Shoulders, the club's owner for the last 13 years, described Mr. Williamson. "What he does is reprehensible. I am not sure how he can sleep at night." Mr. Williamson sees it differently. And the government agrees.
Home Equity ATMs Run Out Of Cash The housing boom didn't just make Americans rich on paper. It padded our expense accounts. In the process, it goosed economic growth. How? Through "mortgage equity withdrawal"...the use of one's house as an ATM machine. In the years in which house prices rose 10%+ per year, Americans didn't just let that extra wealth sit around unused. They took it out and spent it (often on home improvements and downpayments on additional houses). Now that house prices have fallen nearly 30%, however, the source of that cash--home equity--has, in many cases, evaporated. So we've stopped making mortgage equity withdrawals. As a consequence, we've stopped spending the money we used to take out of our home ATMs.
Why a 50% Drop in Housing Is Not the Bottom The psychology behind the idea that a 50% reduction in bubble-era housing prices constitutes a "bargain" is flawed for a number of reasons. . . . . Let's consider a model of all bubbles, regardless of the asset or the era: No model can predict the timing, highs or lows of any bubble, but bubbles tend to follow a pattern traced in human psychology
Living adjustment not sure in 2010 Federal, military and Social Security retirees, who got a 5.8 percent inflation adjustment in January, won't like what's not coming up in 2010. According to the numbers crunchers, the retirees may not get any cost-of-living adjustment next January. That group of retirees represents about one in every six Americans. And it takes in a huge chunk of the Washington area, which is home sweet home to hundreds of thousands of federal and military retirees, as well as millions who get monthly Social Security benefits.
WH pushing to reinstate gun ban A top National Rifle Association official said the Obama administration is using the increased publicity surrounding drug cartels in Mexico as an opportunity to push for reinstating the ban on semi-assault weapons. "They're trying to piggyback this whole phony issue on the back of the tragedy in Mexico," said Wayne LaPierre, executive vice president of the gun-rights group, on CBS' "Face the Nation" on Sunday.
Gee . . . will Americans have to wear Fart-Monitors when the gov decides to regulate these emissions? Carbon emissions fuelled by high rates of obesity High rates of obesity in richer countries cause up to 1bn extra tonnes of greenhouse gas emissions every year, compared with countries with leaner populations, according to a study that assesses the additional food and fuel requirements of the overweight. The finding is particularly worrying, scientists say, because obesity is on the rise in many rich nations. "Population fatness has an environmental impact," said Phil Edwards, from the London School of Hygiene and Tropical Medicine. "We're all being told to stay fit and keep our weight down because it's good for our health. The important thing is that staying slim is good for your health and for the health of the planet." The study, carried out by Edwards and Ian Roberts, is published today in the International Journal of Epidemiology.
'Shut Up, America' author on 'Fox and Friends' Brad O'Leary exposes Washington's plan to ration free speech In "Shut Up, America! The End of Free Speech," O'Leary says the plan amounts to the development of party-approved "commissar committees" to censor the kind of lively and free-wheeling debate America has known since the scrapping of the so-called "Fairness Doctrine" by President Reagan's Federal Communications Commission in 1987. By demanding radio stations answer to local community watchdog boards to ensure programming is "balanced," "fair," "diverse," "tolerant" and "serving the public interest locally," O'Leary says the rules and legislation being planned will once again make talk radio accountable to politicians, political activists and bureaucrats at the FCC.
White House: GOP is 'party of no' President Obama wants Republicans to return to Congress this week from their spring recess with a more constructive attitude toward health care, energy and other administration initiatives. Republican lawmakers say they have ideas, just not the ones the president may want. "When you're the party of no, when you're the party of never; when you're the party of no new ideas, that's not constructive," White House Chief of Staff Rahm Emanuel said Sunday. "The challenge will be, will the Republicans come to the table with constructive ideas?"
Eight states hit by double-digit unemployment The unemployment rate increased in 46 states in March and eight states are now suffering from double-digit joblessness, the Labor Department reported Friday. The eight are: California, North and South Carolina, Indiana, Michigan, Nevada, Oregon and Rhode Island.
GM chief says bankruptcy still 'probable' Debt, labor costs remain key General Motors Corp. Chief Executive Officer Frederick A. "Fritz" Henderson said Friday that a bankruptcy filing remains "probable" around June 1 because the auto giant has not achieved breakthroughs in drastically reducing its debt and labor costs, though the company is working fervently to avoid bankruptcy. Chrysler executives, meanwhile, warned labor unions that the company will go bankrupt by the end of this month unless they agree to slash labor costs.
Porsche Chooses China for Entry Into Sedans Porsche unveiled its entry into the luxury sedan market here on Sunday night, the eve of the Shanghai auto show. It was the latest confirmation of the importance of the Chinese auto market and the first time that Porsche has entered a new market segment at an auto show outside Europe or North America. Auto sales rose 10 percent last month in China to a record, and exceeded sales in the United States for the third month in a row as the world’s largest single-country market. That has prompted automakers from around the world to pay particular attention to the Chinese market, with a range of models to be introduced here.
FEMA: National Level Exercise 2009 (NLE 09) National Level Exercise 2009 (NLE 09) is scheduled for July 27 through July 31, 2009. NLE 09 will be the first major exercise conducted by the United States government that will focus exclusively on terrorism prevention and protection, as opposed to incident response and recovery. . . . . EXERCISE FOCUS NLE 09 will focus on intelligence and information sharing among intelligence and law enforcement communities, and between international, federal, regional, state, tribal, local and private sector participants.
Russia's nuclear attack on U.S. may start with major banks While US scientists put forward the new doctrine of the Minimum Nuclear Deterrence (targeting missiles against Russia's 12 key enterprises), Bigness.ru decided to draw a map of a limited strike that could paralyze the US economy. It turns out that the United States is much more vulnerable than Russia at this point. An attack against only five targets in the USA will throw the US economy back into the Stone Age. US scientists put forward an idea to focus targets on 12 key objects of the Russian economy: enterprises of Gazprom, Rosneft, Rusal, Nornikel, Surgutneftegaz, Evraz and Severstal. The suggestion became an absolutely new approach to the deterrence doctrine. The USA currently has the Mutual Assured Demolition Doctrine, which stipulates an attack of some 200 targets on Russia's territory.
Obama Defends Reaching Out to Chávez Leaders from the Western Hemisphere, inspired by a new American president, closed a two-day summit meeting proclaiming a new dawn for relations in the region, which had been marked by bitter disagreements in recent years with the United States. The antagonism seemed to melt away, replaced by a palpable enthusiasm for a new openness from the United States and hopes of improved relations for Washington with Venezuela and Cuba, which emerged as a core issue here.
Obama Closes Summit, Vows Broader Engagement With Latin America PORT OF SPAIN, Trinidad and Tobago, April 19 -- President Obama concluded a summit of the hemisphere's leaders Sunday by articulating a broad new agenda for Latin America and the Caribbean, having gained momentum in his bid to repair relations with some of the region's shrillest critics of the United States. In a news conference at the end of the fifth Summit of the Americas, Obama outlined what he is learning about the world and how he intends to engage it based on his experiences here and earlier this month in Europe and Turkey. He expressed support for a more central U.S. place in global alliances, including a firm endorsement of the United Nations, and said, "We do our best to promote our ideals and our values by our example."
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Second Largest US Commercial Retail Real Estate Company Files for BankruptcyThis is the tip of the iceberg, still the early stages of failures in the real economy which has been distorted beyond all reason by the outsized financial sector, a failed regulatory regime under the influence of Wall Street, and reckless financial engineering by the Fed. The nation's second-largest shopping mall owner, General Growth Properties, filed for Chapter 11 bankruptcy protection Thursday in a tough bargaining move to restructure its $27 billion in debt. General Growth, which owns more than 200 malls including four in Colorado, said shoppers at its malls will not be affected by its bankruptcy filing.
Mall operator General Growth Properties files for Chapter 11 bankruptcy In its drive to become the second-largest owner of shopping malls in the nation, General Growth Properties Inc. racked up $27 billion in debt. At around 2 a.m. in Chicago on Thursday morning, the retail giant buckled under the weight. After months of tense negotiations with tightfisted lenders, General Growth filed for Chapter 11 bankruptcy in a bid to protect its 200-plus shopping malls including the Glendale Galleria in Southern California and the South Street Seaport in Manhattan.
Is commercial real estate a time bomb? Mall operator General Growth Properties' bankruptcy is worrisome. But even if commercial real estate weakens further, the market probably won't collapse. Bankruptcy is coming to the food court. And that's got to make you wonder if the commercial real estate market is a disaster waiting to happen. General Growth Properties, the nation's second largest operator of shopping malls, filed for Chapter 11 protection Thursday morning. That makes General Growth (GGP) the biggest retail casualty yet of this recession, a downturn that also led to the bankruptcies of Circuit City, Linens 'N Things and Steve & Barry's.
Barry Diller: Trust Me, This Isn't A Bottom IAC chairman Barry Diller has $2 billion in cash burning a hole in his pocket. But despite that -- and the recession -- he says valuations on the types Internet companies he'd like to buy are still too high. But those prices will come down soon enough, Barry told CNBC in an interview today: "We've seen the finance sector and we've seen all of the chaos that's come of that. We haven't seen it yet relative to real estate, relative to corporate debt, things like overleveraging.
Diller Doesn't See A Bottom
Six developers try selling condos in bulk With homebuyers becoming increasingly scarce, desperate sellers aim to tap the interest of real estate investors with bundled apartment units and reduced prices. With buyers of individual condominiums in short supply, developers are bundling up unsold units in a half dozen new residential buildings in Manhattan and Queens and hawking them to investors in bulk at substantial discounts. Halstead Property Development Marketing has been quietly marketing these packages for a few weeks. This week, the firm turned up the heat and began advertising the deals, according to Stephen Kliegerman, executive director at Halstead.
Robert Shiller's Fatal Prescriptions Economist Robert Shiller now prescribes a strong dose of medicine - actually poison - for the U.S. economy. Shiller's diagnosis and doctoring are the same as those of the Bush-Obama-Bernanke regimes. He only wants greater and more persistent doses of the poisons. Shiller's policies will crush the realization of the American entrepreneurial spirit, and even that spirit itself, as they crush the economy. They continue on a larger scale the process of destroying the foundations of American greatness that began with the Progressive movement.
Falling housing starts dampen hope on housing recovery New U.S. housing starts fell more than expected in March after a surprise surge the previous month, government data showed on Thursday, dealing a blow to hopes that housing market stability was on the horizon. The Commerce Department said housing starts fell 10.8 percent to a seasonally adjusted annual rate of 510,000 units, the second lowest on records dating back to 1959, from February's downwardly revised 572,000 units.
Depression Lurks Unless There's More Stimulus: Robert Shiller In the Great Depression of the 1930s the U.S. government had a great deal of trouble maintaining its commitment to economic stimulus. "Pump- priming" was talked about and tried, but not consistently. The Depression could have been mostly prevented, but wasn't. Ultimately, the reason for this policy failure was inadequate understanding of the relevant economic theory. In the face of a similar Depression-era psychology today, we are in need of massive pump-priming again. We appear to be in a much better situation due to the stronger efforts to date. Still, there is a danger that, because of a combination of faulty economic theory and inadequate appreciation of human psychology, as well as deep public anger, we will not continue with such stimulus on a high enough level.
Who is the 'Greater Fool' Now? Many Americans, and indeed many people the world over, have lived in a Ponzi bubble economy for more than a decade. They have applied the Greater Fool Theory in the false belief that they would always be able to sell their house or their stocks or bonds or other highly leveraged assets to "bigger fools" than they were for buying them in the first place. With the collapse of the housing bubble and the stock market it begs the question "Who is the 'greater fool' now?"
Dow to Gold Ratio - No Trends Broken The chart below is a long-term weekly line chart of the Dow Industrial to Gold ratio. With stocks rallying and gold swooning for the last six weeks, it is often easy to lose site of the big picture. The big picture suggests that the rally in stocks coupled with the correction in gold is just a counter trend move against the longer term and more important trend (bull market for gold relative to stocks).
Ten Reasons to Buy Silver Now Amid all the recent attention I've placed on the continued manipulation in silver, some may mistakenly assume that diminishes the case for silver. Nothing could be further from the truth. I'm convinced that silver is a better buy than ever before. Here are detailed reasons why I believe that is the case. One, the near-term emotional temperature of the market is low. There is no bullish "fever" where uninformed investors are driven to buy silver because of a sharply rising price. That will happen, but it's not true now. While silver is still above the price lows of last fall and higher than year-end prices, the recent price action is nothing to write home about. The price has been below most of the important moving averages, causing silver to be "oversold."
A 'Copper Standard' for the world's currency system? Hard money enthusiasts have long watched for signs that China is switching its foreign reserves from US Treasury bonds into gold bullion. They may have been eyeing the wrong metal. China's State Reserves Bureau (SRB) has instead been buying copper and other industrial metals over recent months on a scale that appears to go beyond the usual rebuilding of stocks for commercial reasons. Nobu Su, head of Taiwan's TMT group, which ships commodities to China, said Beijing is trying to extricate itself from dollar dependency as fast as it can. "China has woken up. The West is a black hole with all this money being printed. The Chinese are buying raw materials because it is a much better way to use their $1.9 trillion of reserves. They get ten times the impact, and can cover their infrastructure for 50 years."
TARP Report:`Very Deep Concern' About TARP Metrics, Goals - Warren TARP Oversight Elizabeth Warren, a Harvard University law professor and chairman of the congressional panel that oversees the U.S. Treasury's Troubled Asset Relief Program, talks with Bloomberg's Mark Crumpton about the panel's latest report on the use of TARP funds.
Banks Must Brace for New Losses Use the above link to subscribe to the paid research reports, which include coverage of several smallcap companies positioned to rise during the ongoing panicky attempt to sustain an unsustainable system burdened by numerous imbalances aggravated by global village forces. An historically unprecedented mess has been created by compromised central bankers and inept economic advisors, whose interference has irreversibly altered and damaged the world financial system, urgently pushed after the removed anchor of money to gold. Analysis features Gold, Crude Oil, USDollar, Treasury bonds, and inter-market dynamics with the US Economy and US Federal Reserve monetary policy.
The Deliberate Global Economic Crisis The top tiers of the United States government, along with numerous national and international organizations, are in complete cooperation and collusion with the entities controlling the money supply. In unity, the combined alliances of this money controlling entity have waged a global economic ambush against the governments and citizens of the world. Giving a name to this "entity" such as, Illuminati, Banking Cartel, Bilderberg Group etcetera, matters not. The organizations controlling the money supply exist and have coordinated together for decades to create, control, manage and manipulate all aspects of the faulty economic debt model being utilized around the globe. As a result, they have created a conglomerate of organizations which is without question the most influential power on the earth superseding all governments including the government of the United States. Let's label this group the PCMS -"People Controlling the Money Supply."
Let's Just Cancel The Stress Tests Is there any good reason to follow through with the stress tests and actually release the results? Word is, the White House plans to announce its findings on May 4. But, but... first regulators are going to publish a paper explaining the stress tests on April 24. It's the latest evidence that the whole concept is becoming something of a fiasco for the administration, which is now going to great pains to maintain its credibility as a serious test for banks, while not spooking investors.
Partners in Crime Rightly, the students of Austrian Economics have laid the blame for the current economic crisis squarely on the doorstep of the Keynesian policies of governments and central banks. However, in this case, there are other culprits involved, most notably the former titans of financial services. During this decade, major international money center banks from Wall Street to London and even to Zurich displayed unimaginable greed, reckless risk taking and gross negligence. Depositors, borrowers and shareholders should be questioning whether any major financial institution will ever again be worthy of their trust.
Beware incredible shrinking 401(k) match, expert warns Number of companies suspending or reducing contributions could double this year. Nearly 200 corporations have already stopped matching workers' contributions to their 401(k) plans and the number could very well accelerate — and possibly double — in the coming months. That's the prediction of Pam Hess, head of retirement research at consulting firm Hewitt Associates, who noted that roughly 5% of corporations have suspended or reduced their matching 401(k) contributions over the last year.
IMF Chief: Global Economy's Freefall May Be Ending The global economic meltdown may be starting to wind down, and recovery could emerge in 2010 if countries act together and immediately adopt policies aimed at ending the recession, the head of the International Monetary Fund said Thursday. Dominique Strauss-Kahn said "2009 will almost certainly be an awful year; we expect global growth to enter deeply negative territory." He said the impressive economic gains many countries have made during the past decade are threatened.
Jim Rogers: Diversification Is A Scam "Diversification is something that stock brokers came up with to protect themselves, so they wouldn't get sued [for making bad investment choices for clients]. Henry Ford never diversified, Bill Gates didn't diversify. The way to get rich is to put your eggs in one basket, but watch that basket very carefully. And make sure you have the right basket. You can go broke diversifying. Ask anyone who's diversified in the last three years. They've lost money."
Did Jamie Dimon Just Kill The Public-Private Partnership? Will any bank actually sell assets into Tim Geithner's Public-Private Partnership? Speaking on the company's just-concluded conference call, JP Morgan (JPM) CEO Jamie Dimon downplayed the PPIP, saying the bank had nothing to sell into it, and that it certainly had no interest in partnering with the government as a buyer. What's more, he said, he didn't consider the PPIP to be that big of a deal, suggesting that it's just one small piece of what Treasury is doing to prop up the system.
Losses On PRIME Mortgages Worse Than Expected At JP Morgan Although JPMorgan had to take various losses in its real estate and credit card portfolios this quarter, the management was quick to say that everything was in-line with previous estimates given by the company. One area that's coming in worse than expectations: prime mortgages.
Is JP Morgan Pessimistic Enough On Credit Cards? Jamie Dimon spoke with an almost uncanny candor about the chargeoffs at its core Chase Card operations. The firm says losses were already at 7.7%, a huge jump from 5.6% in the first quarter. It predicted that chargeoffs will likely reach 9% to 9.5% in the second quarter. That's a pretty pessimistic view but is it pessimisitic enough? Dimon was blunt about what he sees as driving losses in the credit card business. When unemployment goes up, so do chargeoffs for credit cards. When house prices decline, chargeoffs go up. When both happen, it gets even worse.
Learn About Making Home Affordable Refinancing Many homeowners pay their mortgages on time but are not able to refinance to take advantage of today's lower mortgage rates perhaps due to a decrease in the value of their home. Modification Many homeowners are struggling to make their monthly mortgage payments perhaps because their interest rate has increased or they have less income.
Peter Schiff 4/14/09 - Schiff Report Video Blog
NBC Brass Tell CNBC To Stop Bashing Obama Apparently, the right-wing tone of CNBC -- which has provided a platform towards tea protesters and tips on Obama-proofing your portfolio -- isn't going over well at NBC corporate. Top talent and execs at the network were ordered to a three-hour meeting, organized by Jeff Zucker, to discuss the issue . . . . . . . . One topic under the microscope, our insider said, was on-air CNBC editor Rick Santelli's rant two months ago about staging a "Chicago Tea Party" to protest the president's bailout programs -- an idea that spawned tax protest tea parties in other big cities, infuriating the White House.
CNBC SWEATS 'OBAMA-BASHING' "It was an intensive, three-hour dinner at 30 Rock which Zucker himself was behind," a source familiar with the powwow told us. "There was a long discussion about whether CNBC has become too conservative and is beating up on Obama too much. There's great concern that CNBC is now the anti-Obama network. The whole meeting was really kind of creepy."
Is Obama's Green Push Forcing GM To Shed A Profitable Brand? As, GM figures out what brands to sell, which ones to keep and which ones to just pull the plug on, you'd think the goal would be to consolidate the units that are the most profitable, while tossing the money losers. But it sounds like the administration, seeing the world through green-colored glasses, sees things differently. The Journal reports that GM is being pressured to dump its GMC light trucks business.
A.I.G. Chief Owns Significant Stake in Goldman Edward M. Liddy, the dollar-a-year chief executive leading the American International Group since its bailout last fall, still owns a significant stake in Goldman Sachs, one of the insurer's trading partners that was made whole by the government bailout of A.I.G. Mr. Liddy earned most of his holdings in Goldman, worth more than $3 million total, as compensation for serving on the bank's board and its audit committee until he stepped down in September to take the job at A.I.G. He moved to A.I.G. at the request of Henry M. Paulson Jr., then the Treasury secretary and a former Goldman director.
Napolitano: Rightwing Extremism Report Contains 'Assessment,' Not 'Accusations' Homeland Security Secretary Janet Napolitano went on national television Thursday morning to explain her department's controversial report describing who is at risk of becoming a right-wing extremist. The April 7 report raised the possibility that in the current economic and political climate, returning war veterans and people who "are dedicated to a single issue, such as opposition to abortion or immigration" may be susceptible to recruitment by "extremists" bent on carrying out violent attacks.
Increase in First-Time Delinquent Income Taxpayers As a deep recession strips Americans of their jobs, homes and investments, the 2009 U.S. tax season promises to see a large uptick in first-time delinquent income taxpayers. "Our calls are up 280 percent," said Richard Boggs, founder and chief executive of Los Angeles-based Nationwide Tax Relief, a firm that helps delinquent taxpayers resolve tax issues.
IMPORTANT -- It's much worse than you think! Insight as to why bank rates were lowered to 1% after 9/11, beginning the shadow banking system with 20 -30 trillion dollars worth of fraudulent trades and accounting which has now ballooned to hundreds of trillions of bad news for American taxpayers. The REAL CRISIS has not yet begun.
Max Keiser on Alex Jones Show April 6
SAN JOSÉ STATE UNIVERSITY ECONOMICS DEPARTMENT Thayer Watkins EPISODES OF HYPERINFLATION Hyperinflation is just inflation at an extremely high rate. Usually this also means the inflation is out of control and its level is not precisely predictable.
U.S. has nightmares about bedbug return EPA itching for a nationwide solution The federal government is waking up to a bedbug outbreak. The tiny reddish-brown insects, last seen in great numbers before World War II, are on the rebound. They have infested college dormitories, hospital wings, homeless shelters and swanky hotels. They live in the crevices and folds of mattresses, sofas and sheets. Then, most often before dawn, they emerge to feed on human blood.
Ohio to Replace Laid-Off Janitors with Inmates Ohio wants to use prisoners to replace Statehouse janitors and groundskeepers who were laid off because of budget cuts, angering a labor union. The state board that operates the building says it will probably use two inmates to do groundswork and another five for night cleaning. The Ohio Civil Service Employees Association, the state's largest public employees' union and the one that represented the laid-off workers, filed a grievance Wednesday to reverse the plan.
Foreclosure filings jump 24% March and first-quarter total filings were the highest monthly and quarterly totals on record. Repossessions fall 3%. Foreclosure activity skyrocketed in March and the first quarter of 2009 to their highest levels on record as banks lifted moratoria on filings. Total foreclosure filings - which include default papers, auction sale notices and repossessions - reached 803,489 in the first quarter, according to a report released Thursday by RealtyTrac, on online marketer of foreclosed properties. That is a 24% jump over a year earlier and a 9% increase compared to the previous quarter.
A Future of Private Roads and Highways Introduction to The Privatization of Roads and Highways. Walter Block writes, "This book is dedicated to my fellow Americans, some 40,000 of them per year who have died needlessly in traffic fatalities. It is my sincere hope and expectation that under a system of private roads and highways in the future, that this number may be radically reduced."
Tennessee Senate approves guns in restaurants bill The state Senate today approved the bill that would allow people with handgun-carry permits to take their guns into restaurants that serve alcoholic beverages as long as they are not drinking themselves. Guns are currently banned in Tennessee establishments that serve alcohol. But the legislation approved on a 26-7 vote in the Senate differs in two important ways from a similar guns-in-restaurants bill that passed in the House of Representatives earlier this month - and those differences must be resolved before either of them can become law.
Homeland Security Secretary to Name A 'Border Czar' Homeland Security Secretary Janet Napolitano is naming a "border czar" to oversee issues related to drug-cartel violence along the U.S.-Mexico border and the hundreds of thousands of people who try to enter the U.S. illegally through the Southwest. An Obama administration official says Napolitano on Wednesday will name Alan Bersin, a former federal prosecutor, to fill the new post at the Homeland Security Department. The official would speak only on condition of anonymity ahead of the announcement expected in El Paso, Texas.
Baptist pastor beaten + tazed by Border patrol - 11 stitches
Abusive Border Patrol Agents w/ Nun Chucks at NM Checkpoint
Deal Brings TV Shows and Movies to YouTube In another step in its transformation from an online jumble of amateur videos to a destination for mainstream TV programs and movies, YouTube said Thursday that it had signed deals with Hollywood studios to showcase thousands of TV episodes and hundreds of movies on its Web site. And Google, which owns YouTube, said it might eventually bring another innovation to the site: payment for some premium content.
Divisions grow as Afghan women protest law allowing marital rape The women shouted: "Equal rights and human rights!" A few feet away, men hollered back: "Death to you dogs!" and "Death to the slaves of the Christians!" Then some men picked up small stones and pelted the women. More than 100 protesters -- mostly young women -- demonstrated Wednesday against an Afghan law they say legalizes marital rape.
Iran About to Join the Nuclear Club Every week brings ominous new signs that Iran soon will possess operational nuclear weapons. Just this week Israeli President Shimon Peres-their senior diplomat and wise man-issued an uncharacteristic warning: "If (President) Ahmadinejad doesn't work with the Obama Administration and the international community to stop building nuclear weapons, of course we will then strike." his blunt threat is a startling development coming from President Peres, a normally calm, collected and reticent-to-bluster statesman. The Israeli President - a ceremonial post not a policy-making one - then added that "we will not be able to move forward on this without the United States."
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Thurs 04.16.2009
Tax Day Is Met With Tea Parties Some people wore their tea bags hanging from umbrellas or eyeglasses. Others simply tossed them on the White House lawn. Wednesday's deadline for filing income tax returns offered some Americans a timely excuse to vent their frustrations as demonstrators attended more than 750 Tax Day tea parties in cities like Boston, Washington, East Hampton, N.Y., and Yakima, Wash. The events were meant to protest government spending, particularly the Obama administration's $787 billion stimulus package and its $3.5 trillion budget.
N.S.A.'s Intercepts Exceed Limits Set by Congress The National Security Agency intercepted private e-mail messages and phone calls of Americans in recent months on a scale that went beyond the broad legal limits established by Congress last year, government officials said in recent interviews. Several intelligence officials, as well as lawyers briefed about the matter, said the N.S.A. had been engaged in "overcollection" of domestic communications of Americans. They described the practice as significant and systemic, although one official said it was believed to have been unintentional.
Top Dem 'dumbfounded' by 'extremism' report The top House Democrat overseeing the Department of Homeland Security is demanding that officials there explain how and why they wrote and released a controversial report identifying veterans as potential terrorist threats. Rep. Bennie G. Thompson of Mississippi, chairman of the House Homeland Security Committee, said in a letter to DHS Secretary Janet Napolitano that he was "dumbfounded" such a report would be issued. "This report appears to raise significant issues involving the privacy and civil liberties of many Americans -- including war veterans," Mr. Thompson said in the letter sent Tuesday. PDF of report: http://video1.washingtontimes.com/video/extremismreport.pdf
You Might Be a 'Radicalized Right-Wing Extremist' If… What and who exactly are President Obama's homeland security officials afraid of these days? If you are a member of an active conservative group that opposes abortion, favors strict immigration enforcement, lobbies to protect Second Amendment rights, protests big government, advocates federalism or represents veterans who believe in any of the above, the answer is: You.
Tossed package ends D.C. 'Tea Party' A demonstration against government waste and high taxes outside the White House on Wednesday was halted after a suspicious package was thrown over the White House fence. U.S. Secret Service officers immediately cleared Pennsylvania Avenue Northwest and Lafayette Park just north of the White House shortly after 2 p.m., forcing about 2,000 protesters to the sidewalks north of the park. Journalists at the White House were ordered back inside the press room. A robot was inspecting the package, which the Associated Press reported appeared to be a box of tea bags.
Whatever Happened to States' Rights? On Tuesday, Texas Gov. Rick Perry issued a statement in support of a state resolution supporting states' rights under the 10th Amendment to the U.S. Constitution. "I believe that our federal government has become oppressive in its size, its intrusion into the lives of our citizens, and its interference with the affairs of our state," Perry stated. "I believe that returning to the letter and spirit of the U.S. Constitution and its essential 10th Amendment will free our state from undue regulations, and ultimately strengthen our union." Perry's statement is a clarion call for more local sovereignty, for less command-and-control from above. But is it too late for states to regain their status in the great struggle for policymaking power implemented by the Constitution?
Tax Day Protests Could Be 'Saving Moment Of Our Republic,' Keyes Says The grassroots mobilization of the Tax Day Tea Party protests could be the 'saving moment of our republic,' former U.S. ambassador to the United Nations and presidential candidate Alan Keyes told CNSNews.com in an exclusive interview on Wednesday. Furthermore, voters should prepare to oust their congressional incumbents in the 2010 midterm elections regardless of their affiliation for selling the U.S. 'down the river to socialism,' Keyes told CNSNews.com.
Nationwide Taxpayer Tea Parties Protest Government Spending Protesters began gathering at state Capitols and in neighborhoods and town squares across the country Wednesday to kick off a series of tax-day protests designed to echo the rebellion of the Boston Tea Party. Demonstrators said they're steamed about government spending since President Barack Obama took office.
Enough is enough! That's the heartland tea-party message Is bailout nation about to strike again? Sure looks like it. According to a bunch of Page One news stories, life-insurance companies are about to get TARP'ed. This is nuts. The public is clamoring for an end to TARP and bailout nation. That's a key message coming from the heartland tea parties cropping up spontaneously across the country. This is turning into a real populist uprising against rising taxes (especially state, local and property taxes), the Troubled Asset Relief Program and all the federal bailouts - and the trillions of dollars in deficits and debt being used for financing. If Team Obama ignores this uprising, it has a political tin ear.
Note to Media: Just Do Your Damn Jobs and Cover Tea Parties If you build it, they will come. Forget the baseball reference. It is as outdated as the year "Field of Dreams" was released - 1989. Tea party tax protesters know why. The metaphor is a lie - at least as far as the mainstream media are concerned. If you do something of note and the media choose not to cover it - the issue might as well never exist. Such is the fate of Wednesday's national Tax Day Tea Party. This mega-gathering of tax protesters is scheduled for every single congressional district. More than 500 events are planned. And the national news media have either been silent or shown contempt for the effort. That's not journalism. It's blatant censorship that would amaze even George Orwell.
Economic survivalists take root When the economy started to squeeze the Wojtowicz family, they gave up vacation cruises, restaurant meals, new clothes and high-tech toys to become 21st-century homesteaders. Now Patrick Wojtowicz, 36, his wife Melissa, 37, and daughter Gabrielle, 15, raise pigs and chickens for food on 40 acres near Alma, Mich. They're planning a garden and installing a wood furnace. They disconnected the satellite TV and radio, ditched their dishwasher and a big truck and started buying clothes at resale shops.
Derivatives Losses Spreading New Data Reveals Largest US Banks at Risk of Failure According to Weiss Research: JPMorgan Chase, Citibank, Wells Fargo, HSBC USA, Goldman Sachs, SunTrust, Compass, Fifth Third, and Huntington In a press conference held yesterday to review fourth quarter call report data and TheStreet.com bank ratings, Martin D. Weiss of Weiss Research, Inc. concluded that:
Three out of four of the nation's largest banks are at risk of failure -- JPMorgan Chase, Citibank, Wells Fargo.
Also at risk are HSBC USA, Goldman Sachs and large regional banks, including SunTrust Bank, Compass Bank (Alabama), Fifth Third Bank (Michigan), Huntington Bank (Ohio) and Etrade Bank (Virginia).
The total number of at-risk banks and thrifts rose to 1,816 in the fourth quarter, from 1,568 banks in the prior quarter, an increase of 16 percent.
Dangerous Unintended Consequences: How Banking Bailouts, Buyouts and Nationalization Can Only Prolong America’s Second Great Depression and Weaken Any Subsequent Recovery
OIL SHOCK AND INFLATION AHEAD Slogans are comforting and easy to learn. Since late 2008 the hard-worked slogan is that cheaper oil, today, is one of the few rays of sunshine for the recession-wracked global economy. Today's variant of the mother slogan "High oil prices hurt economic growth" has little or no proof to offer, for example cheaper oil helping recovery of 4WD car sales, airline passenger numbers, house building activity, world steel output, or production of plastics, pesticides and fertilizer. The fallback slogan for cheap oil aficionados is that even if it doesn't restore growth, cheaper oil will hold down inflation.
Why IMF announces but fails to sell gold? As I wrote last week, the price of gold declined going into the G-20 meeting last Thursday. It has continued to decline since then in large part because the specter of International Monetary Fund gold reserves possibly being sold into the market. Supposedly, the IMF would be selling 403 tons (just under 13 million troy ounces) of its gold holdings to fund efforts to resolve the global financial crisis. In all likelihood, this gold will never be sold or, if it is, will be completely sold to a single central bank.
Obama's code of secrecy On April 15, tax day, most Americans feel a little violated as the government peeps into their most private affairs to see what's taxable. The Obama administration views such transparency as a one-way street. Government secrecy has become the norm under this administration, particularly when it comes to the financial bailout. Exhibit A is a gag order preventing banks from divulging how they performed on the Treasury Department's financial "stress tests." These tests were instituted Feb. 25 to gauge the liquidity of the country's 19 biggest banks and determine whether they could survive another dramatic economic downturn. Federal officials told the bankers to keep mum about how stressed out the tests say their institutions are.
Should Obama Control the Internet? Should President Obama have the power to shut down domestic Internet traffic during a state of emergency? Senators John Rockefeller (D-W. Va.) and Olympia Snowe (R-Maine) think so. On Wednesday they introduced a bill to establish the Office of the National Cybersecurity Advisor-an arm of the executive branch that would have vast power to monitor and control Internet traffic to protect against threats to critical cyber infrastructure. That broad power is rattling some civil libertarians. The Cybersecurity Act of 2009 (PDF) gives the president the ability to "declare a cybersecurity emergency" and shut down or limit Internet traffic in any "critical" information network "in the interest of national security." The bill does not define a critical information network or a cybersecurity emergency. That definition would be left to the president.
Obama: Economy Gaining Traction Weak Retail Data Signal Confidence Remains Off-Kilter The president and the Federal Reserve chairman voiced cautious optimism yesterday that the economy could be beginning to stabilize. But the economy wasn't cooperating. Retail sales dropped sharply in March, the government reported, and wholesale prices fell steeply. Both pieces of data underscore the hard slog the nation faces to emerge from its deep recession and the limitations of more optimistic talk from Washington. The stock market fell 2 percent, as measured by the Standard & Poor's 500-stock index.
All banks expected to pass stress test; analysts not so sure The U.S. banking industry is strong enough to weather a deteriorating economy - that's the headline expected from the government when it reveals the results of its bank stress tests in the first week of May. "We expect the stress test to demonstrate that the 19 banks are all well capitalized even under the stress test's worst-case scenario," says Scott Talbott, senior vice president at the Financial Services Roundtable, which represents the largest financial institutions. However, a chorus of bank analysts and economists are questioning the rigor of the stress tests if the results are really so positive. After all, just six months ago, the entire financial system was brought to its knees from the stress of capital market losses and rising mortgage defaults.
Treasury tallies $10 billion for mortgage mods Six large U.S. banks could pocket nearly $10 billion in federal subsidies if they modify troubled home loans and are able to save homeowners from foreclosure, the Treasury Department said on Wednesday. The mortgage specialty arms of Citigroup, JPMorgan Chase and Wells Fargo & Co. would each earn over $2 billion for modifications that have long-lasting success, according to the Treasury's formula. The money is available through a $50 billion program to encourage mortgage servicers to ease the terms on troubled loans. Many more mortgage servicers will be eligible for the subsidies, the Treasury said.
Goldman Revamp Puts Dec. Losses Off Books Calendar Shift Left 1 Month Unreported December was a disastrous month for Goldman Sachs, producing a loss of $780 million, but you wouldn't know it from looking at the company's bottom line for the last quarter of 2008 -- or the first quarter of 2009. December fell through the cracks as the big investment-banking firm moved from a fiscal year ending in November to a fiscal year beginning in January. Billions of dollars of write-downs in the value of commercial real estate loans and other assets showed up in neither period.
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