Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Fri 07.31.2009
Cash for Clunkers list snafu resolved Some buyers will get the benefit anyway, but only if they acted before the EPA's changes. The last-minute snafu that suddenly disqualified some previously eligible vehicles from the Cash for Clunkers program has finally been cleared up. Last week, just before the program's July 24 official start date, 78 vehicles were made ineligible when the Environmental Protection Agency upped the estimated fuel economy ratings on those vehicles. At the same time, the EPA suddenly lowered the fuel economy ratings for 86 other vehicles, making them eligible. Acknowledging the confusion caused by the EPA's changes, the National Highway Traffic Safety Administration which manages the Clunkers program, said Thursday that trade-ins made between July 1 and July 24 of vehicles that became ineligible after the switcheroo will be allowed to keep their rebate, NHTSA spokesman Rae Tyson said.
Govt to suspend 'cash for clunkers' Government to suspend 'cash for clunkers' program out of funding concerns The government plans to suspend its popular "cash for clunkers" program amid concerns it could quickly use up the $1 billion in rebates for new car purchases, congressional officials said Thursday. The Transportation Department called lawmakers' offices to alert them to the decision to suspend the program at midnight Friday. The program offers owners of old cars and trucks $3,500 or $4,500 toward a new, more fuel-efficient vehicle. The congressional officials spoke on condition of anonymity because they were not authorized to speak publicly. Rae Tyson, a spokesman for the National Highway Traffic Safety Administration, which administers the program, declined comment.
Uh-Oh: Cash For Clunkers Is Too Popular The Cash-For-Clunkers law -- which gives a $4,500 rebate to people who turn in an old jalopy when buying a new car -- was roundly slammed before it was signed into law. And apparently even the government didn't think it would be all that popular--because it's already almost bankrupt due to its popularity. WSJ: Car dealers on Wednesday began expressing concern that the government's "cash for clunkers" incentive program could run out of money as soon as the end of August due to strong initial response from consumers. "It's important for customers to act because we don't know when the curtain is going to fall on this thing," said John McEleney, chairman of the National Automobile Dealers Association.
Gold rebounds as oil rallies, dollar weakens Holdings in biggest gold ETF falls again; silver ETF holdings steady Gold futures rose nearly 1% Thursday, gaining for the first session in three, as rebounding crude-oil futures heightened the metal's appeal as a hedge against potential inflation. Also pushing gold higher, the dollar weakened against most of its major rivals following a U.S. weekly jobless report that came in line with expectations. A weaker greenback tends to push up dollar-denominated gold prices. Gold for August delivery rose 0.8%, or $7.70, to end at $934.90 an ounce on the Comex division of the New York Mercantile Exchange. Gold had fallen 2.7% over the previous two sessions.
Gold's Downside Moves Don't Detract from Bullish Run Gold fell by $25 yesterday but has found reasonable support at $930/oz. In the short term, the daily momentum would appear to be bearish for gold and although it may experience a temporary bounce in the next day or two, a move to the downside should be expected, possibly falling as low as $905/oz. These short term factors should not detract from the longer term bullish run that gold will likely see in the seasonally bullish autumnal period as investors continue to hedge against deeply unpredictable currency and equity markets. A new high of $1,033/oz should be reached due to continuing risk aversion. The very poor US bond and treasury auctions, with demand for the unprecedented large issuance this week waning, does not bode well for the dollar in the coming weeks.
Gold to Revisit $1,000 on Falling Supply, World Council Says Gold will revisit $1,000 as investment demand and jewelry purchases rebound and supply decreases annually, a senior World Gold Council official said. “On the supply side, gold mining production has been decreasing at a rate about 4 to 5 percent per year after reaching a peak production in 2001,” Jason Toussaint, managing director of exchange traded gold, said today. “Even if demand stays the same, prices must go up.” He declined to give a timeframe for the increase.
Gold Rises as Dollar’s Drop, Equity Rally Boost Commodities Gold rose for the first time in three days as the dollar dropped and equities climbed, enhancing the appeal of commodities. Silver also gained. The greenback fell as much as 0.6 percent against a basket of six major currencies. The Standard & Poor’s 500 Index approached a nine-month high. Eighteen of 19 raw materials in the Reuters/Jefferies CRB Index advanced. “The dollar is likely to go lower, and thus gold higher today,” David Thurtell, an analyst at Citigroup Inc. in London, said in an e-mail.
A Very Few Elements of Gold Strategy Gold strategy depends on age, wealth, anticipated labor income, one’s expectations, and risk preferences, among other things. A complete gold strategy covers alternative metals, alternative ways to own gold, and shares in metal and mining companies. I will discuss none of this. One finds plenty of articles on those things on the internet. I’m going to mention only a very few elements of gold strategy that have to do with the general position that I think is appropriate, which is being long or owning gold as a long-term holder. The long-term means years. These elements suggest that one may well want to have a core position in gold.
Gold black market flourishing in China With the soaring gold prices luring millions of small investors into the bullion market, a new illegal trade is also thriving in China. With more and more people, lured by the rising yellow metal prices, wishing to make a profit from the bullion market, black market has become rampant in China now. Hundreds of underground gold dealers are luring investors who are keen on punting in the yellow metal, but stumped by the high entry barriers set by the gold bourses.
Alan Grayson: "Which Foreigners Got the Fed's $500,000,000,000?" Bernanke: "I Don't Know."
US Dollar Strength to Come Before Devaluation? The basic premise of this argument is the observation that when commodities and stock markets fall then the dollar is up, and vice-versa. What we have at the moment is a bear market rally and that has weakened the dollar. But Black Swan Capital thinks we are in for a double-dip recession with the Chinese recovery story going horribly wrong and energy markets going into a fresh crisis. It sees a capitulation in emerging market stocks and an exit of cash, and a large risk of a European banking crisis, both of which would strengthen the US dollar and bonds as a safe haven.
The next great bailout: Social Security Fortune's Allan Sloan takes a look at the troubled retirement program, why it's more important now than ever - and how lawmakers can repair it. In Washington these days, the only topics of discussion seem to be how many trillions to throw at health care and the recession, and whom on Wall Street to pillory next. But watch out. Lurking just below the surface is a bailout candidate that may soon emerge like the great white shark in Jaws: Social Security. Perhaps as early as this year, Social Security, at $680 billion the nation's biggest social program, will be transformed from an operation that's helped finance the rest of the government for 25 years into a cash drain that will need money from the Treasury. In other words, a bailout.
Bernanke May Have to Sacrifice Lending Powers or Independence The financial-overhaul plan before Congress leaves the Federal Reserve in the business of lending to everyone from General Electric Co. to investors in student loans. That makes it harder for Chairman Ben S. Bernanke to keep Congress from second-guessing what he does. Bernanke is trying to deflect a bill, co-sponsored by 276 members of the House of Representatives, that would require audits of central bank operations, including monetary policy decisions, by the Government Accountability Office. Audits wouldn’t be “consistent with independence,” Bernanke said at a Kansas City town hall meeting July 26. “I don’t think the American people want Congress running monetary policy.”
Ron Paul: Driving Ben Bernanke Crazy!
Minnesota's small banks on the brink Noah Wilcox's family has owned and operated Grand Rapids State Bank since 1920 and, as he watched colleagues and rivals plunge into Minnesota's hot real estate market over the past decade, he recalled a comment a friend in the business once made: "Real estate is the cocaine of the banking business." Today, even as the world's biggest banks show signs of recovery, many of the community banks that anchor the nation's Main Streets are paying the price for over-indulging on housing, retail and office projects.
Senate Probes Banks for Meltdown Fraud A Senate panel has subpoenaed financial institutions, including Goldman Sachs Group Inc. and Deutsche Bank AG, seeking evidence of fraud in last year's mortgage-market meltdown, according to people familiar with the situation. The congressional investigation appears to focus on whether internal communications, such as email, show bankers had private doubts about whether mortgage-related securities they were putting together were as financially sound as their public pronouncements suggested. Collapsing values for many of those securities played a big role in precipitating last year's financial crisis.
Fed Holdings of Treasuries For Central Banks Tops $2 Trillion The Federal Reserve’s custodial holdings of Treasuries for overseas accounts including foreign central banks reached $2 trillion for the first time. The holdings rose by $5.38 billion, or 0.27 percent, to $2.001 trillion in the week ended July 29, according to data released today by the Federal Reserve Bank of New York. Custodial holdings have climbed 18 percent this year, after surging 39 percent in 2008, the data shows.
Treasuries Rise as Higher Yields Bolster Note Auction Demand Treasuries rose after the highest seven-year note yields in more than a month bolstered demand at the government’s auction of a record $28 billion of the securities. The debt drew a yield of 3.369 percent, below the median forecast of 3.394 percent in a Bloomberg News survey of eight of the Federal Reserve’s primary dealers. The sale follows record auctions of two- and five-year notes the past two days that attracted lower-than-forecast interest from investors.
Weak Treasury Auctions Raise Worries About US Debt Burden The US Treasury sold $39 billion in five-year debt Wednesday but the auction drew poor demand, raising worries over the cost of financing the government's budget deficit.
Fed walks the tightrope The sound money set remains concerned that the Federal Reserve's emergency actions to corral collapse could ignite hyperinflation. In particular, they point to the explosion of excess reserves inside the banking system, which they call dry tinder just waiting for the spark of recovery. Bill Dudley, president of the Federal Reserve Bank of New York, says this isn't an issue because the Fed now pays interest on excess reserves. It's a good argument, but only in the short run.
pt 1/2 Gerald Celente on One Radio Network 24 July 2009
Ben Bernanke Is Wrong Again This video would be a good laugh if not for the fact that it centers around one of the most powerful men in the world's propensity to be wrong in case after case. I sincerely laughed at the "we've never had a nationwide drop in housing prices" line since it was one of my big beefs against the financial punditry (which I didn't realize, until I saw these clips, Ben was such a part of) - even before I started the blog. Just because something has not happened in the past does not mean it could not happen. And speaking of "it never happened before," was anyone measuring home prices in the 1930s?
Why Ben Bernanke’s Incomplete ‘Exit Strategy’ Could Lead to a Decade-Long Downturn At its most basic level, the U.S. Federal Reserve’s so-called “exit strategy” is designed to let government bailout and liquidity programs unwind on their own, as markets return to a state of “normalcy.” But what investors don’t realize is that without an exit strategy that includes plans for unwinding insolvent mortgage giants Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) - now more accurately defined as government-sponsored hedge funds - recent market gains will be limited and will likely reverse. If those setbacks cause the nascent U.S. housing market rebound to stall, it could even lead to a decade-long downturn.
Bernanke explains Fed’s new openness ‘Town hall’ session breaks with precedent Ben Bernanke has explained his decision to turn the normally secretive US Federal Reserve into something of an open house, saying his unusually large number of recent public appearances are the result of the “extraordinary” times the country faces. The Fed chairman has turned up at everything from a 60 Minutes television interview to a Kansas City town hall session over the past few weeks, prompting some to wonder if he is trying to ensure he is re?appointed when his four-year term ends in January.
Reappoint Ben Bernanke? No Way Should we have re-elected Jimmy Carter in 1980 for his stewardship of the US economy? Of course not. Should Ben Bernanke be reappointed as Chairman of the Federal Reserve for his stewardship of the banking and credit systems? Of course not. Certainly, the Fed under Mr. Bernanke is not solely responsible for the environment that produced the biggest credit bubble and credit deflation of our lifetimes, but Jimmy Carter wasn't solely responsible for the late-1980s inflationary spiral. Mr. Carter was not re-elected, and similarly Mr. Bernanke should not be reappointed. Simply put, how can Washington even consider keeping Mr. Bernanke as Fed Chairman when the US banking system effectively failed on his watch?
And All the Kings' Horses and All the King's Men... As we enter August we are getting closer and closer to real disruptions with the US dollar, as well as problems with the British pound, as both economies feel the sting of rising inflation within a progressive depression. The stimulus package has exhausted itself for this year so the economy in the US can at best stay neutral at a minus 4% of GDP. The causes of our depression have yet to be addressed as the Treasury and the Fed flood banking, Wall Street and insurance companies with funds to keep them afloat. The deterioration continues unabated as Wall Street and banking report higher earnings by laying off workers and by playing accounting games.
New York details big bonuses at bailed-out banks New York: Citigroup, which got $45 billion in govt. money, paid over $5 billion in bonuses Citigroup Inc., one of the biggest recipients of U.S. government bailout money, gave employees $5.33 billion in bonuses for 2008, New York's attorney general said Thursday in a report detailing the payouts by nine big banks. The report from Attorney General Andrew Cuomo's office focused on 2008 bonuses paid to the initial nine banks that received loans under the government's Troubled Asset Relief Program (TARP) last fall. Cuomo has joined other government officials in criticizing the banks for paying out big bonuses while accepting taxpayer money.
Big bonuses at bailed-out banks Citigroup Inc., one of the biggest recipients of government bailout money, gave employees $5.33 billion in bonuses for 2008, New York's attorney general said Thursday in a report detailing the payouts by nine big banks. The report from Attorney General Andrew Cuomo's office focused on 2008 bonuses paid to the initial nine banks that received loans under the government's Troubled Asset Relief Program last fall. Mr. Cuomo has joined other government officials in criticizing the banks for paying out big bonuses while accepting taxpayer money.
Tarp banks award billions in bonuses Citigroup and Merrill Lynch, which lost $55bn in 2008, between them paid 1,400 employees bonuses of $1m or more each, according to a New York state report, released on Thursday, on banks propped up with taxpayer funds. The study, compiled by Andrew Cuomo, New York attorney-general, showed that JPMorgan Chase and Goldman Sachs, which both finished in the black last year, paid the most million-dollar bonuses - 1,626 and 953, respectively. However, the totals at a profitable bank such as Goldman were nearly matched by two of the year’s biggest losers on Wall Street. Citi, which suffered a $27.7bn loss, paid million-dollar bonuses to 738 employees. Merrill, which lost $27.6bn, paid 696 bonuses of $1m or more.
The people's stimulus package With $2 bills and "buy local" promotions, towns are launching their own stimulus efforts to keep local merchants in business. As the recession continues decimating Main Street businesses, communities are taking matters into their own hands. From Bowdoinham, Maine, to Chico, Calif., and dozens of cities in between, activists have launched campaigns to stimulate their local economies. "The grassroots efforts have had more effect on my business than the stimulus," says Tanja von Kulajta Winn, owner of RSVP, a stationary and gifts store in Plymouth, Mich. "I have not received anything from Washington." The names and details vary, but the campaigns all share one goal: Educating shoppers about the power their spending has to shape their local business landscape.
China Can't Take Away The Punch Bowl Monday's 5% drop in the Shanghai market was a stark warning to the credit-happy central government: do a U-turn on cheap money, and this is what you get. So the government is already sending out signals that it won't be tightening any time soon. WSJ: Chinese bank stocks were higher after the People's Bank of China announced it would use more market-oriented measures to guide credit growth rather than administrative controls. Industrial & Commercial Bank of China rose 3.3% and China Construction bank jumped 6% in Shanghai, while their Hong Kong-listed shares gained 0.4% and 0.3% respectively.
How the Once-Respected Fannie Mae and Freddie Mac Helped Fuel the U.S. Real Estate Bubble Fannie Mae, originally designated as a “government-sponsored enterprise” (GSE), was born in 1938 as a child of U.S. President Franklin Delano Roosevelt’s Great-Depression-fighting “New Deal,” and was designed to stimulate mortgage lending. Fast-forward 30 years. In 1968, Fannie Mae shares were sold to the public to help finance the Vietnam War. Freddie Mac, also a GSE, was created by Congress in 1970 to compete with the growing - but monopolistic - Fannie Mae. Both firms were successful, profitable and made steady money by charging a fee to guarantee mortgage-originators against homeowner defaults. Their combined guarantees totaled almost $3.7 trillion at the end of 2008.
Obama's Approval Has Crashed Among Middle-Income Americans in Past Three Weeks, Says Gallup Poll A new Gallup poll shows that President Barack Obama's job approval rating has dropped ten points in just three weeks among middle income earners--those making between $60,000 and $89,988 per year. Obama’s support among the elderly (those 65 and older) is also dropping, despite an endorsement of his health care plan from AARP, the powerful senior citizens lobby.
U.S. States Face Ongoing Deficits, Rockefeller Institute Says U.S. states have identified more than $51 billion in revenue deficits for the next fiscal year less than a month after wrapping up their annual budgets, the Nelson A. Rockefeller Institute of Government reported. Among the worst projections for fiscal 2011 are California at $15 billion, New Jersey at $6 billion and Florida at $5 billion. In the current fiscal year, U.S. states totaled $160 billion in budget gaps, the report said. “States push large parts of fiscal problems into later years,” Donald J. Boyd, senior fellow at the institute, told a Governmental Research Association convention in Washington, D.C., July 27. “It can take three or four years before finances recover, even if economic recovery comes sooner.”
Be Careful what you Wish For... Recent polls now give Government's handling of the economy a negative rating because Government's 100 days of glory has not given the promised quick boost to the economy. The Democrats and their media friends, after blaming Bush for all the world's ills for 6 years, have begun to blame the Republicans in Congress for watering down the stimulus packages and attempting to block Cap and Trade and Health Care for no good reason: all in preparation to justify the failure of their massive Socialist policies, going into the next election. Unfortunately for the American public, sound economics teaches that regardless of how fast the money is spent or how much oversight is provided by bureaucrats, the money doled out by the stimulus plan will be mostly political and therefore wasted. It will have a detrimental impact on the economy not only in the short term, but especially in the long term. That is the nature of profligate government spending. Besides, very little of the money is getting into the hands of the people.
Danger on road ahead Nevada survived 2009’s yawning budget gap with one-time fixes. Without those, 2011’s outlook looks increasingly rocky Bailing wire and Band-Aids last only so long. When it comes to fixing the state’s financial affairs, it’s no different. The state leaned heavily on temporary tax increases and one-time federal stimulus funding to bridge the state’s $1.4 billion budget gap this year, but those stopgap moves have led to forecasts of an even larger deficit in 2011. More than $1 billion in tax hikes will expire in two years — a key condition for Senate Republicans’ support of the tax increases. The more than $500 million in federal stimulus money used to pay for ongoing expenses this time isn’t expected to be there when the next state budget is hammered out.
HyperInflation & The Bond Market (1 of 4) 6 2 2009
HyperInflation & The Bond Market (2 of 4) 6 2 2009
HyperInflation & The Bond Market (3of 4) 6 2 2009
HyperInflation & The Bond Market (4 of 4) 6 2 2009
Contractors wait for U.S. stimulus to create jobs Conditions in the U.S. construction industry have improved since President Barack Obama signed the economic stimulus plan into law in February, but employment in the battered sector needs more help, an industry trade group said on Thursday. A survey of 900 construction and construction-related companies found just 22 percent had won stimulus-funded contracts, the Associated General Contractors said. More than a third of those plan to hire new employees or rehire workers they had laid off. Nearly 60 percent said they had been able to retain positions because of the work.
May-June joblessness up in 90% of metro areas More than 90% of the nation's largest metropolitan areas saw their unemployment rates climb in June from the previous month. Some of the biggest increases hit college towns, where the annual summertime exodus of students causes bars, restaurants and other businesses to cut staff. The Detroit area, hit hard by manufacturing layoffs tied to the beleaguered auto industry, also got stung in June.
Unemployment spreads distress in U.S. home loans Cities in the U.S. Sun Belt states of California, Florida, Nevada and Arizona dominated the record foreclosure spree in the first half of the year, but distress in other regions emerged as joblessness spread, RealtyTrac said on Thursday. Metro areas with populations of at least 200,000 in those four states accounted for 35 of the 50 highest foreclosure rates. Mortgages have failed the fastest in the areas with the greatest overbuilding, purchases by speculators and reliance on riskier loan products to improve affordability.
Las Vegas, Fort Myers, Florida Lead U.S. in Defaults Las Vegas and Cape Coral-Fort Myers, Florida led U.S. metropolitan areas in foreclosures in the first half of the year as unemployment and falling home prices forced home-loan defaults, RealtyTrac Inc. said. The Las Vegas area had the highest rate of foreclosure filings, with 7.5 percent of households receiving a default or auction notice or being seized by a lender. That rate was six times the national average. The Cape Coral-Fort Myers region, on Florida’s Gulf Coast, was second, with a rate of 7.2 percent.
Foreclosures: How bad is your city? Foreclosures are easing in some of the worst hit metro areas, but watch out for the next wave of filings to start crashing in unexpected cities. Sun Belt cities dominated the list of metro areas with the biggest foreclosure problems during the first six months of 2009. Cities in just four states -- California, Florida, Arizona and Nevada -- captured 29 of the top 30 places with the highest foreclosure rates, according to a report issued by RealtyTrac on Thursday. Greeley, Colo., was the only outsider, coming in at 29th. The good news is that some of the worst hit spots, such as the Central Valley cities in California, showed some improvement, according to James Saccacio, chief executive officer of RealtyTrac.
Lucrative Fees May Deter Efforts to Alter Troubled Loans This week, the Obama administration summoned mortgage company executives to Washington to demand they move faster to lower payments for homeowners sliding toward foreclosure. Treasury officials called on the companies to hire and train more people quickly to field applications for relief. But industry insiders and legal experts say the limited capacity of mortgage companies is not the primary factor impeding the government's $75 billion program to prevent foreclosures. Instead, it is that many mortgage companies are reluctant to give strapped homeowners a break because the companies collect lucrative fees on delinquent loans.
pt 2/2 Gerald Celente on One Radio Network 24 July 200
Foreclosures Spread As Unemployment Rises The foreclosure crisis has entered a new phase. It’s spreading beyond the wreckage of the housing bubble to metro areas in Oregon, Idaho, Utah, Arkansas, Illinois, and South Carolina where unemployment is rising, according to RealtyTrac’s Midyear 2009 Metropolitan Foreclosure Market Report released this morning. California, Florida, Nevada, and Arizona continue to have the highest foreclosure rates in the nation. But some parts of Michigan, Ohio, Indiana, and California are seeing improvement, the report said. “While some of the markets that had the highest saturation of foreclosures over the past few years have seen declining rates, new markets like Provo, Utah, and Boise, Idaho, have seen large increases,” James J. Saccacio, chief executive officer of RealtyTrac said in a prepared statement. “As unemployment rates increase in different parts of the country, it’s very likely that we’ll see similar patterns develop elsewhere.”
Jobless claims increase Initial jobless claims up 25,000 in week, but 4-week moving average declines. The number of Americans collecting long-term unemployment aid fell to the lowest in three months in mid-July, according to government data that implied a slowing pace of layoffs as the economy stabilizes. The Labor Department said that while initial claims for state unemployment insurance benefits rose by 25,000 to a seasonally adjusted 584,000 last week, the number of people still on benefit rolls after collecting an initial week of aid fell by 54,000 to 6.20 million in the week to July 18, the lowest since early April.
Illegal Immigrants Account for $10.7 Billion of Nation’s Health Care Costs, Data Show House Speaker Nancy Pelosi (D-Calif.) said that “illegal immigrants are not covered” in the health care reform legislation that is now working its way through House committees. But when asked about illegal immigrants who go to public hospitals for care, Pelosi told CNN’s State of the Nation on Sunday the law requires that they be treated. The cost of treating illegal aliens amounts to nearly $11 billion a year, according to calculations done by the Federation for American Immigration Reform (FAIR), a non-profit group that opposes illegal immigration. And that cost is not expected to go away if a health insurance reform bill becomes law.
Obama Loses The Healthcare Debate From a purely political standpoint Obama has lost the healthcare message war. WSJ: Support for President Barack Obama's health-care effort has declined over the past five weeks, particularly among those who already have insurance, a Wall Street Journal/NBC News poll found, amid prolonged debate over costs and quality of care. In mid-June, respondents were evenly divided when asked whether they thought Mr. Obama's health plan was a good or bad idea. In the new poll, conducted July 24-27, 42% called it a bad idea while 36% said it was a good idea.
Dollars chase influence in U.S. healthcare debate Healthcare companies are spending millions of dollars and marshaling armies of lobbyists to influence a landmark debate in the U.S. Congress that could dramatically change the way they do business. Drugmakers, doctors, insurers and hospitals have opened their wallets, spending more than $1 million a day to buy a voice in the escalating political battle over what could be the broadest revamp of healthcare laws in decades. "I hate to use the word free-for-all, but this bill is in play and everyone wants a piece of it," said Bill Buzenberg, executive director of the Center for Public Integrity, a nonprofit investigative group.
10 Things You're Not Supposed To Know About the swine-flue vaccine. Let's not beat around the bush on this issue: The swine flu vaccines now being prepared for mass injection into infants, children, teens and adults have never been tested and won't be tested before the injections begin. In Europe, where flu vaccines are typically tested on hundreds (or thousands) of people before being unleashed on the masses, the European Medicines Agency is allowing companies to skip the testing process entirely.
In the 70s, Obama's Science Adviser Endorsed Giving Trees Legal Standing to Sue in Court Since the 1970s, some radical environmentalists have argued that trees have legal rights and should be allowed to go to court to protect those rights. The idea has been endorsed by John P. Holdren, the man who now advises President Barack Obama on science and technology issues. Giving “natural objects” -- like trees -- standing to sue in a court of law would have a “most salubrious” effect on the environment, Holdren wrote the 1970s.
EPA Cover-Up The Green Rope-A-Dope Here's what I wrote in last year's column titled "Global Warming Rope-a-Dope" (12/24/2008): "Once laws are written, they are very difficult, if not impossible, to repeal. If a time would ever come when the permafrost returns to northern U.S., as far south as New Jersey as it once did, it's not inconceivable that Congress, caught in the grip of the global warming zealots, would keep all the laws on the books they wrote in the name of fighting global warming. Personally, I would not put it past them to write more." On June 28, 2009, the House of Representatives, by a narrow margin (219–212), passed the Waxman-Markey bill. The so-called "cap and trade" bill has been sold as a system for cutting greenhouse gas emissions in the struggle against global warming. There's a full-court press on the U.S. Senate to pass its version of "cap and trade."
House rejects most Obama weapons cuts House rejects most Obama weapons cuts, retreats on F-22 fighter The Democratic-controlled House is going along with Defense Secretary Robert Gates' plans to kill the over-budget F-22 fighter jet, but is casting aside his efforts to cut off several other big ticket items. Despite objections and veto threats from the White House, a $636 billion Pentagon spending bill set for a vote Thursday contains money for a much-criticized new presidential helicopter fleet, cargo jets that Gates says aren't needed, and an alternative engine for the next-generation F-35 Joint Strike Fighter that the Pentagon says is a waste of money.
Rule by fear or rule by law? ...How the Government is preparing for martial law. "The power of the Executive to cast a man into prison without formulating any charge known to the law, and particularly to deny him the judgment of his peers, is in the highest degree odious and is the foundation of all totalitarian government whether Nazi or Communist." Your fiat money at work is building bi-level prison cars (by the thousands according to the San Francisco Chronicle) built by KBR (Kellogg, Brown and Root, a subsidiary of Halliburton). These were parked on the tracks behind a pecan orchard managed by one of my friends in Texas a few months back. They were completely hidden from the highway that paralleled the orchard. The Fetid Feds only moved them at night. It has been reported that some of these beauties have been pre-positioned in each and every state.
Cops suspended for Obama check Two DeKalb County Officers are being investigated for allegedly performing a background check on President Barack Obama. Officers Ryan White and C.M. Route have been placed on administrative leave pending the outcome of the investigation, according to DeKalb County spokeswoman Sheila Edwards. Edwards said the two patrol officers have been with the department for about two years. The incident occurred on July 20, according to DeKalb County officials.
Lou Dobbs: Just produce birth certificate CNN anchor says Obama's presidential actions could be 'illegal' After being attacked by groups ranging from the Southern Poverty Law Center to Media Matters for relentlessly calling on Barack Obama to prove his eligibility for the office of the presidency, CNN's Lou Dobbs wasn't backing off on either his syndicated radio or his television program today. Once again, he renewed his calls for Obama to produce his long-form birth certificate that would settle doubts about where he was born and offered that the president's actions could actually be "illegal." Dobbs took on the special-interest groups demanding that CNN shut him up.
Part 1: Freedom Watch w/ Ron Paul, Peter Schiff, Sheriff Mack, Walter Block (07/29/2009)
Part 2: Freedom Watch w/ Ron Paul, Peter Schiff, Sheriff Mack, Walter Block (07/29/2009)
Part 3: Freedom Watch w/ Ron Paul, Peter Schiff, Sheriff Mack, Walter Block (07/29/2009)
Part 4: Freedom Watch w/ Ron Paul, Peter Schiff, Sheriff Mack, Walter Block (07/29/2009)
Part 5: Freedom Watch w/ Ron Paul, Peter Schiff, Sheriff Mack, Walter Block (07/29/2009)
Part 6: Freedom Watch w/ Ron Paul, Peter Schiff, Sheriff Mack, Walter Block (07/29/2009)
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If you study prophecy, you'll find this most interesting
Did Jesus actually reveal name of the 'antichrist'? Viral video makes Hebrew word connection to latest White House occupant
A One World Currency is Inevitable I know it sounds impossible, but the world is being forced to a point of having to implement a one world currency. Or at least a one world currency among the major economies – maybe Tunisia might escape. Started with the USD. Why do I say that? Well, if you follow the evolution of the USD since roughly the end of WW2, it gradually became the world reserve currency, and that was intended. It started with the Breton woods agreement, and also during WW2 when the European allies currencies were collapsing as Hitler was conquering Europe.
U.S. Dollar Dying, Gold Gleaming Washington’s $2 trillion deficits, record-shattering borrowing by the U.S. Treasury and seemingly endless money-printing at the Fed make a decline in the value of the greenback a virtual certainty. In our view, the only question that remains is the timing: WHEN will the dollar decline begin? To get an answer, take a look at the historical cycle in the U.S. dollar to the right. Note how closely the actual value of the dollar (the black line) has followed its historical cycle based on data going all the way back to 1912 (the red line).
China, Dubai join hands to boost gold trade China, which is emerging as the leader in gold consumption almost beating Indian for the top slot, now eyeing Dubai to boost its yellow metal trade. In an apparent bid to win the numero uno position in gold consumption, China has started exploring opportunities in Dubai. China’s efforts bore fruit when the DMCC participated in the Asia Gold Focus 2009 Conference in Guangzhou, China, where investment strategies for the Dubai gold market was highlighted. At the meet, it was observed that Chinese gold and jewellery manufacturers are increasingly eager to work closely with Dubai-based companies.
Gold Lacks Relative Strength Gold is not going to breakout anytime soon. Its relative strength or lack thereof, is the chief reason. Gold has been rising recently, only due to the positive tide in most markets. In the chart below, you can see that the various ratio charts have formed a negative divergence to Gold. Gold has not only been weak against commodities and stocks but also foreign currencies. On the positive side, the ratio charts have formed a serious long-term positive divergence. Relatively speaking, Gold has bested its 2008 highs in most forms, but not in US dollars.
D-I-V-O-R-C-E price relationship between gold and silver Gold will still be gold, of course, and will remain as it has been since the dawn of civilization, valued by the world's inhabitants for its beauty and rarity. As will silver. Each will exist forever, as they have existed through the ages. Each will rise and fall in price based upon supply and demand and investment flows and the presence (or absence) of manipulation. Nothing can change that. What will change is the price relationship they have shared in everyone's living memory. They are about to begin separate journeys. . . . . . . . . It is the coming end of the silver manipulation that will set silver free to begin its own new price life.
The Coming Market Crash A year ago at Cambridge House when asked whether the economy was going to rebound I responded, "That light at the end of the tunnel is just the next train. Get out of the way!" Another commentator on stage, who helped manage about $10B at the time, responded that things would get better and not to worry. What happened? Lehman Brothers, AIG, Fannie Mae, Freddie Mac, Bank of America, Merrill Lynch, Citigroup, the Adjusted Monetary Base exploded from $800B to $1,800B as the Federal Reserve fails with quantitate easing, unemployment began to soar and the DOW crashed from 12,000 to 6,500 or 13.95 gold ounces to 7.
After the fall The collapse in world trade has stopped, but there is no sign of a recovery WORLD trade has been one of the worst casualties of the global economic slowdown and the source of some particularly startling figures. Towards the end of last year trade all but collapsed. According to the World Bank, the value of exports from a sample of 65 countries accounting for 97% of world trade rose by 20.2% in September, compared with a year earlier. But by November exports were worth 17.3% less than a year earlier, before slumping by a whopping 32.6% in the year to January. In March the managers of South Korea’s Busan port, long one of the world’s busiest, said that it had run out of space to store nearly 32,000 empty containers. The Baltic Dry Index, which measures demand for the ships that transport bulk goods such as iron ore or coal, fell from 11,793 at the end of May last year to a pitiful 663 in early December.
Ben Bernanke - "I Am Answerable to the American People."
Niall Ferguson: Is U.S. - China Economic Marriage on the Rocks? As the Chinese strategy was based on export-led growth, they had no desire to see their currency appreciate against the dollar. So they intervened consistently in currency markets, and as a result have now got international reserves totaling $2.1 trillion. Around 70 percent of these are in dollar-denominated securities, and a large proportion of these are in U.S. government bonds. The unintended effect of this was to help finance the U.S. current account deficit at very low interest rates. Without that, it's hard to believe that U.S. financial markets would have bubbled the way they did in the period 2002-7. The big question is now whether or not Chimerica is a marriage on the rocks.
Washington learns to treat China with care The economic crisis has shifted the balance of power, so the U.S. has stopped lecturing its biggest lender America met with its lead banker this week and was forced to answer plenty of tough questions about its spending habits. "Attention should be given to the fiscal deficit," China's finance minister, Xie Xuren, warned the U.S. And while U.S. officials gamely lobbed back the by-now-familiar refrain that China needs to boost its domestic consumption, rather than relying on exports to the U.S. for growth, it was clear which side was playing defense at this latest round of the three-year-old Strategic and Economic Dialogue.
China Seeks Assurances That U.S. Will Cut Its Deficit China sought and received assurances from the Obama administration that the United States would reduce its budget deficit once an economic recovery was under way, a senior Chinese official said Tuesday at the end of two days of high-level talks between the countries. “Attention should be given to the fiscal deficit,” said Xie Xuren, the Chinese finance minister. He said Treasury Secretary Timothy F. Geithner had assured the Chinese that once the economy rebounded, the deficit would gradually come down from its current record levels.
Chinese bubble fears as funds flow into IPOs Shares in Shanghai and Hong Kong tumbled on Wednesday as investors snapped up two newly listed mainland construction groups while selling down the rest of the market after reports that China’s central bank might rein in bank lending. Shares in China State Construction Engineering rose by as much as 90 per cent on their debut before closing 56 per cent stronger in Shanghai. China’s largest housebuilder had last week raised Rmb50.2bn ($7.34bn) in the world’s biggest initial public offering since Visa raised $19bn in March 2008.
USGovt Yuan Bond Threat The tables are fast turning against the deeply indebted USGovt officials. USA Inc is in deep trouble. Its productive engines in both finance and industry are either wrecked or sputtering, even as its debt burden grows exponentially. Debt default litters the landscape. Next its sovereign bonds will be have to be sold to some extent outside the US$ Sphere, which will put at great risk its stock, namely the USDollar itself. Let’s call them USGovt Dragon Bonds. The custodians desperately seek creditors to supply much needed capital in order to fund the gigantic and growing USGovt debts, which by the way are grossly understated. The last resort is to monetize the USTreasury Bond issuance, a process well along. With the aid of the USDollar Swap Facility, the USFed has been able to secretly bid on USTBonds from foreign soil, have it appear like foreign bids, and conceal the continued and broadening monetization initiative. The United States is boldly defying the creditor nations, printing money, and buying its own debt.
China Debt Bubble Looming According to the latest reports from China, the country’s GDP is growing at 8% a year. This is an amazing achievement and helps to bolster the argument that China will help lead the global economy out of its recession. Since it looks like exports will be the major driver of growth for the U.S., selling goods and services to many emerging economies like China it pays to dig a little deeper to understand this growth phenomenon.
How do you say 'bubble' in Mandarin? Chinese stocks are on fire and banks are lending like there's no tomorrow. Sound familiar? But China needs to remain healthy. The U.S. can't afford for it to slump. Is the Chinese economy in the same state as the American economy was in the summer of 2007? In other words, all pumped up and ready to pop? If so, it might be time to learn how to say bubble in Mandarin. And that could be bad news for those hoping for a sustainable U.S. recovery. The Shanghai Composite Index plunged 5% Wednesday, while Hong Kong's Hang Seng dipped nearly 2.4% on growing concerns that China's robust period of growth could soon stall.
Banks Reopen Global Casino Investment banks, of all things, are making serious money again, thanks in part to government aid. Ironically, they are benefiting from the crisis they helped to create. As profits go up, so do salaries -- only this time, it's the taxpayers who are shouldering the risks. Anshu Jain, 46, listened stoically and silently to the remarks of shareholders at the annual meeting of Deutsche Bank at the end of May. Many were troubled by the fact that the bank had reported its biggest ever loss in 2008, €3.9 billion ($5.6 billion), for which Jain, as its top investment banker, was responsible.
Federal Reserve for Dummies
Treasury finally getting tough on banks A $340 million warrant repurchase from credit card giant AmEx shows the Treasury, under pressure from Congress, is holding big banks' feet to the fire Don't look now, but the government has actually strung a couple modest victories together in its dealings with big banks. American Express, the New York-based credit card giant, said Wednesday it paid the Treasury Department $340 million to repurchase the warrants the bank issued in January after borrowing $3.4 billion under the Troubled Asset Relief Program. AmEx was among 10 banks that repaid their TARP loans last month. The government accepted the warrants, which confer the right to buy shares later at a specified price, to compensate taxpayers for the risks they took on in the bailout of the financial system.
Barney Frank Threatens Banks If They Don't Modify More Mortgages You have to love Barney Frank's bull-in-a-China-shop approach to dealing with the financial crisis. When he's not busy getting into fights with Erin Burnett on CNBC, he's not afraid to wield a big stick (and speak loudly) to get his way. Yesterday he was banging away at bonuses again. The latest: he's pissed at the banks for not doing more on the loan modification front.
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.
Insiders are selling Corporate insiders more bearish than at any time in nearly two years Corporate insiders have recently been selling their companies' shares at a greater pace than at any time since the top of the bull market in the fall of 2007. Does that mean you should immediately start lightening your equity exposure? It depends on whom you ask. But, first, the data. Corporate insiders are a company's officers, directors and largest shareholders. They are required to report to the SEC whenever they buy or sell shares of their companies, and various research firms collect and analyze those transactions.
Obama and Company say... All We Need Is A Little Help From Our Foreign Friends. . . . At the end of its 2008 fiscal year, ending in September, the government reported that foreign creditors held 48% of US public debt. In dollar terms, that was $2.8 trillion in IOU’s. What’s more, they absorbed 74% of the $765 billion borrowed by the US government in 2008. But that’s nothing new. Foreign creditors have been on a buying extravaganza since 2002, sucking up 73% of public debt net new issuance over that period, a whopping $1.8 trillion of government IOU’s.
Obama defends record on economy President Obama said during an appearance in North Carolina on Wednesday that the United States may be seeing the "beginning of the end of the recession" as he gave an impassioned defense of his administration's response so far to the economic crisis. Mr. Obama also gave Congress a new deadline to finish a bill on health care reform, saying he expects a vote on final passage by late September or mid-October. The president told a town hall meeting in Raleigh that he was "startled" by a Newsweek magazine cover that said "the recession is over." The president said that while government action has "stopped the free fall," the country still is shedding jobs and that "tough times aren't over."
Rachel Maddow: Rep. Barney Frank Takes On Credit Card Cos.
Fed Exit Strategy? Federal Reserve chairman Ben Bernanke used this week as an opportunity to address the Fed's exit strategy of removing the bank reserves that have been pumped into the banking system since September of last year. Of course, this will not happen until the Fed and our political leaders feel that both the banking system and the economy is on considerably sounder footing and tighter monetary policy is less likely to toss the economy back into the ditch. I say political leaders because the Fed has lost a considerable amount of its "independence" and pressure will be a tool wielded by our politicians (especially as elections near). Given the events of this week, it is a good opportunity to review the state of the Fed balance sheet, some if its recent operations, and a few key items in Bernanke's plan to drain reserves from the banking system at the "appropriate time". I will begin with a little background info that you can also find in previous articles, but presented a bit differently here.
Bernanke's dilemma: Ignore politics Why the Fed chairman should ignore Congress and start tightening up soon. After two years of pumping money into the financial system to keep the economy afloat, Fed Chairman Ben Bernanke will have to reverse the process or risk an opposite problem: inflation. After much anticipation, he announced in July the Fed's "exit strategy" from its vast intervention, declaring it will happen "in a smooth and timely manner." It's reassuring that Fed officials are aware of the inflation risk, but their program is unlikely to succeed. Much research shows that it takes about two years for anti-inflation policy to work. That means the Fed needs to start now and stick with it.
Dead Banks Walking In recent weeks, the financial world has been dazzled by strikingly high earnings reported by our leading investment banks... or at least what we used to call investment banks. The numbers are reminiscent of another era - the one that came to a crashing end last September. Today's euphoria was keyed to the record $3.44 billion 2nd quarter profit announced by that branch office of the Treasury Department also known as Goldman Sachs. Wells Fargo, JP Morgan Chase, and State Street also chipped in with strong numbers.
Kucinich: the Federal Reserve is paying banks NOT to make loans to struggling Americans!
Dudley says credit to remain tight William Dudley, president and chief executive of the Federal Reserve Bank of New York, sought to dispel fears of ?rising inflation on Wednesday, while playing down prospects for a speedy economic recovery in the US. Mr Dudley’s remarks came against a backdrop of concerns that the expansion of the Federal Reserve’s balance sheet, easy monetary policy and aggressive fiscal stimulus would inevitably undermine the value of the US dollar. Mr Dudley also offered a fairly downbeat economic vision, noting that weak income growth would limit the pace of consumer spending, historically the biggest source of growth in gross domestic product. “Credit availability will be constrained for some time to come and this will limit the pace of recovery,” he added.
US regulator criticises Obama bank plan he Obama administration’s plan to give US states more power to protect consumers from unfair banking practices would make it more difficult and costly for large lenders to operate across the country, a financial regulator has warned. John Dugan, who oversees national banks as comptroller of the currency, told the Financial Times that the proposals to create a federal consumer protection agency and give states more leeway to crack down on unfair practices would have negative “ramifications for companies operating across state lines”.
Five U.S. Banks Are Too Big to Exist Fitch Ratings released a stunning report a few days ago which disclosed that just five banks (all U.S. banks) hold 80% of all derivatives risk: Bank of America (BAC), Goldman Sachs (GS), JP Morgan (JPM), Morgan Stanley (MS), and Citigroup (C). Keep in mind that the global derivatives market has a notional value somewhere around 30 times global GDP. Put another way, each one of these five banks has derivatives risk that is much greater than the entire value of global GDP.
CFTC Conceals the Real Problem, the Infinite Dollar Today's hearing by the U.S. Commodity Futures Trading Commission to discuss speculation in futures markets is a sham, a kangaroo court. Notice that the concern of the CFTC is only why oil went up last year. The commission has no concern as to why oil fell so abruptly from $147 down to $35 even though Don Coxe was widely quoted at the time as saying the government had instigated a massive takedown. The commission's focus is on commodities of "finite supply" and preventing speculation.
Big Brother's House Big Brother (FINRA) has given Wall Street firms the cover to restrict ProShares, Direxion, Rydex and PowerShares products from use by their clients. This is being done under the guise of protecting them but that’s a smokescreen. You see, these firms live and die off residual fee income generated by wrapped high fee products within financial plans. It’s very disruptive to fee income for FAs and clients to mess with the plan. It is thus no longer permitted to use these products, denying the investor and FA the choice and opportunities they present. Rather than allow your FA to protect you from 40-60% bear market losses, they want you to stick with these plans and keep chucking money into them. Some firms are even going so far as restricting the use of unleveraged short products which is downright silly but shows you the extent firms will go to protect the flow of fee income.
Patriot Radio News Hour: Letter from Gregory Knox to Troy Clarke, GM President
US Government Orchestrates Market Moves To Affect Massive Treasury Auctions In A Day Filled With Irony . . . . "Usually The Gold Cartel is most aggressive around pivotal market reports (like the US jobs report), TV speeches regarding US economic policy, and key market events. The event this week is the astronomical amount of debt to be issued by the US Treasury … some $235 billion. The last thing the Treasury wants is a gold price headed towards $1,000 due to the perceived relationship between gold and US interest rates … so they are all over gold."
A Piece of the Stimulus Pie Despite what you are most likely reading in the press, the folks getting bailout money are pretty sharp. They’re very good at gaming the system. More about that in a minute. First, the Dow went nowhere yesterday. Gold fell $14 to $939. And Newsweek magazine announced, “The Recession is Over.” Newsweek hedged its bets; adding that the recovery won’t be a piece of cake. Elsewhere in the news is word that the housing bust is over. The papers are reporting the first gain in housing prices in three years – based on the latest Case-Shiller numbers. Hallelujah…right? Hold on. There’s too much statistical noise in the monthly figures. They just don’t mean anything. A better measure is the annual trend. The Federal Housing Finance Agency says its index for May registered the smallest drop in 10 months…but is still headed down. (More on why it is destined to continue going down…later in the week.)
Fed: Economy has begun to stabilize at low level Economic activity continued to be weak going into the summer, although the pace of decline has moderated and activity has begun to stabilize at a low level, the Federal Reserve reported Wednesday in its latest Beige Book assessment of the economy. Labor markets in all 12 Fed districts remain slack, the Fed said, as employment continues to decline. The weakness of labor markets has virtually eliminated upward wage pressure, and wages and compensation were steady or falling in most districts.
Decentralization for Socialists: A Brief Primer One thing that consistently vexes me is the amount of time the modern statists, particularly on the Left, spend labeling the idea of decentralization and secession as "kooky." The Virginia and Kentucky Resolutions of 1798 – if they have read them or know about them – are often portrayed as quaint and unsophisticated pronouncements of provincialism; the Essex Junto and Hartford Convention are called the products of deranged Northern madmen; Andrew Jackson, they say, was on the right side when he threatened the use of force to keep South Carolinian secessionists in line in 1832; and of course, they revel in the ultimate coup de grâce to states’ rights and secession, the Northern victory in the War for Southern Independence. Who could root for the evil, "undemocratic slave power" clad in butternut, anyway?
Desperate state may sell Capitol buildings, others Under GOP plan, government would pay to lease back most of the sites Call it a sign of desperate times: Legislators are considering selling the House and Senate buildings where they've conducted state business for more than 50 years. Dozens of other state properties also may be sold as the state government faces its worst financial crisis in a generation, if not ever. The plan isn't to liquidate state assets, though. Instead, officials hope to sell the properties and then lease them back over several years before assuming ownership again. The complex financial transaction would allow government services to continue without interruption while giving the state a fast infusion of as much as $735 million, according to Capitol projections.
Clunker confusion: MPG figures Some car shoppers find that the fuel economy for their old cars has suddenly improved - making them ineligible for Cash for Clunkers. Some car shoppers are finding that their trade-in vehicles, which qualified for a Cash for Clunkers rebate last week, don't this week because of changes in the EPA's fuel economy ratings. In some cases, car buyers say, dealers are backing out of sales they've already made because the EPA changed the fuel economy figures on their trade-in. "My wife just received a call from the sales manager saying that our clunker doesn't qualify anymore, and that we could either pay the extra $4,500 or return the new car (and get our old car back)," Greg Straka wrote Tuesday on a message board at the Edmunds.com automotive Web site.
Has the Housing Market Hit Bottom? Now that a number of recent housing reports are generating some incredibly positive headlines and the global economy appears to be slowly digging its way out of an enormous hole that was created last fall when the world nearly came to an end, the burning question on the minds of millions of people is ... Has the housing market hit bottom? here is no shortage of answers. Unfortunately, most of them are far too simple and, in most cases, the individual or organization providing the answer has a bias of some sort.
Housing Recovery: Sell Now Or Your Capital Will Be Trapped As news reports of housing's "recovery" fill the mainstream media, the devastating effects of rising interest rates are never mentioned: every house with equity becomes a capital trap. Anecdotally, breathless stories of the return of multiple bids are filtering into a Mainstream Media anxious to report "proof" of a "recovery in housing. This translates into a 50% decline in bubblicious areas of the nation: Dr. Housing Bubble: Calif. Housing drops 50% from peak. As noted in the above article, fully 58% of all California home sales are foreclosure resales. In other words, "the bottom is in, now is the time to snap up bargains." Not so fast. Let's focus on the key feature of buying a house as opposed to, say, a TV: very, very few people buy a house with cash. The vast majority of real estate purchases are financed with mortgages--debt.
Is the Fed Losing the Mortgage Rate Battle? The relationship between the 10 Year and the 30 Year Mortgage spread and the actual level of the 30 Year Mortgage has broken down in the last week. The correlation has dropped to zero, meaning the Fed's Open Market purchases in the critical part of the curve may be having less and less of an impact on the ever-critical mortgage rate. Did the (mortgage) vigilantes pull a fast one?
Money, Banking and the Federal Reserve
Should They Risk Missing a Payment? You can see the fine hand of government at work in the homeowner rescue package that has been struggling to get off the ground since its inception last spring. The goal was to reduce foreclosures by lowering mortgage payments for homeowners who were struggling. But struggling how badly? For would-be lenders, that can be a tricky question to answer, and they are understandably reluctant to commit to the program without clear guidelines from the federal government. As it stands, some homeowners are being told they cannot receive help unless they fall behind on their payments. But if you were struggling yourself to stay on track, would you take the risk of skipping a payment or two just to qualify?
Subprime mortgage companies warn on U.S. foreclosures Companies that service risky residential mortgages are warning U.S. officials that a key program to slow foreclosures may push some financing costs higher and derail their efforts, said a leading subprime firm. Companies forming the Independent Mortgage Servicers Coalition, service many of the riskiest mortgages made during the housing boom, making them key players in programs to rein in foreclosures. The group collects and distributes payments on more than $700 billion in loans, according to its leader, Carrington Mortgage Services of Santa Ana, California.
U.S. Consumer Confidence Falls More than Expected The Conference Board Consumer Confidence Index™, which had retreated in June, declined further in July. The Index now stands at 46.6 (1985=100), down from 49.3 in June. The Present Situation Index decreased to 23.4 from 25.0 last month. The Expectations Index declined to 62.0 from 65.5 in June. Says Lynn Franco, Director of The Conference Board Consumer Research Center: "The decline in the Present Situation Index was caused primarily by a worsening job market, as the percent of consumers claiming jobs are hard to get rose sharply. The decline in the Expectations Index was more the result of an increase in the proportion of consumers expecting no change in business and labor market conditions, as opposed to an increase in the percent of consumers expecting conditions to deteriorate further."
'$20 Per Gallon' How the Inevitable Rise in the Price of Gasoline Will Change Our Lives for the Better Christopher Steiner looks ahead and projects, $2 at a time, how rising gasoline prices will transform civilization. During the summer of 2008, Americans found out just how much was too much to pay for gas. On July 11, a barrel of oil hit $147.27, which translated into $4.11 for a gallon of regular gas at the pump -- the highest price ever reached in the U.S. And that was just the average. In some places, the price got close to $5 a gallon. It was the Summer of Pain.
Get Ready For A $10-$15 Drop In Oil After rallying nearly 50% this year, crude prices hit a major speed bump this week as the dollar has firmed up and inventories have risen. Oil prices were "well overpriced" in the $70s and will continue to weaken in the weeks and months ahead, says James Cordier, President of Liberty Trading Group and co-author of The Complete Guide to Option Selling. Rather than increased demand, the recent rally was based mainly on speculative demand driven by government stimulus packages, Cordier says. Most notably, a flood of liquidity in China found its way into commodities and China's economy now "looks like a bubble," he says, joining a growing chorus.
Taxing the fat in your food New study argues that a tax on fattening foods could help pay for health reform and curb obesity -- and lower health costs. Others aren't so sure. Health care costs keep growing fatter in part because Americans are, too. More than 25% of the increase in medical costs between 1987 and 2001 is attributable to obesity and obesity-related conditions such as hypertension and diabetes, according to a new report from the non-partisan Urban Institute. Come 2015, it is estimated that 40% of American adults will be obese, which is more than double the rate 40 years ago. And today, close to 20% of children are obese, up from 4% four decades ago.
House committee has breakthrough on health bill House Democratic leaders have reached an agreement with a group of rebellious conservative Blue Dogs that will allow the stalled health care reform package to move through a key committee and on to the full House for a vote. Four Democratic Blue Dogs on the House Energy and Commerce Committee said they were prepared to vote for the compromise, allowing the long-delayed markup to begin Wednesday afternoon, according to several lawmakers. But the agreement also puts off any action by the full House until after the August recess. The four were part of a bloc of seven Blue Dogs on the committee who had balked at the original language in the bill.
'Blue-Dogging' Health Care One of the traits that people prize most in dogs is loyalty. However, the question then becomes loyalty to whom or what? In the case of the "Blue Dog Caucus," the group of Congressional Democrats that has emerged as the major player in health care reform, it appears that its loyalty is first and foremost to its big campaign contributors -- the health insurance firms and the drug companies. The general claim that they make is that they are worried about the fiscal consequences of health care reform, but when it comes to specifics, they are most opposed to the very elements of the reform package that are most likely to be successful in driving down the overall cost.
Good and Bad News for the House Health Bill In my recent paper about how the Congressional Budget Office analyzes health proposals, I noted that one of the most important things that CBO does is to provide additional information about its cost estimates. Cost estimates often can’t speak for themselves, so it’s important that members of Congress and other interested observers ask for additional clarification about key issues. Well, four leading House Republicans recently took this step, and CBO’s response is a doozy. It contains too much to summarize here, so let me focus on the two most important points:
One Big Problem with Private Health Insurance The This American Life crew, once again proving that they can cover any topic they want better than anyone else in the media,* has a segment in this weekend’s episode on rescission of health insurance policies – insurers’ established practice of looking for ways to invalidate policies once it turns out that the insured actually needs significant medical care. (The segment is around the 30-minute mark.) The story describes a couple of particularly egregious cases, such as a woman who was denied breast cancer surgery because she had been treated for acne in the past, and a person whose policy was rescinded because his insurance agent had incorrectly entered his weight on the application form.
Gregory Knox's Letter to Troy Clarke, President of GM In response to your request to call legislators and ask for a bailout for the United States automakers please consider the following, and please also pass this onto Troy Clark, the president of General Motors North America for me. You are both infected with the same entitlement mentality that has bred like cancerous germs in UAW halls for the last countless decades, and whose plague is now sweeping the nation, awaiting our new "messiah" to wave his magical wand and make all our problems go away, while at the same time allowing our once great nation to keep "living the dream"? The dream is over!
Eliot Spitzer Takes On The Fed - MSNBC w/ Dylan Ratigan (7/24/09)
Spitzer: Federal Reserve is 'a Ponzi scheme, an inside job' The Federal Reserve - the quasi-autonomous body that controls the US's money supply - is a "Ponzi scheme" that created "bubble after bubble" in the US economy and needs to be held accountable for its actions, says Eliot Spitzer, the former governor and attorney-general of New York. In a wide-ranging discussion of the bank bailouts on MSNBC's Morning Meeting, host Dylan Ratigan described the process by which the Federal Reserve exchanged $13.9 trillion of bad bank debt for cash that it gave to the struggling banks.
US Senator Slams Washington Post Defense Of Fed Secrecy Sanders: "Absolute power corrupts absolutely" Senator Bernie Sanders (I-VT), sponsor of S 604, the Federal Reserve Sunshine Act of 2009, has slammed a recent Washington Post editorial that contends the Federal Reserve should not be subject to a general audit. Sanders vented his opinions in a letter to the editor which was published in the Post today. "We must not equate 'independence' with secrecy." Sanders writes in response to the Post's Friday editorial entitled "Focus on the Fed" which attacked his own and Congressman Ron Paul's efforts to enact the Federal Reserve Transparency Act, a move that would allow the American people to find out for the first time where trillions in taxpayer funded bailout dollars have been used.
Banks still need bigger cushions It was a surreal moment two weeks ago when analysts on Goldman Sachs’ earnings conference call pressed CFO David Viniar to jack up leverage. They seem to think that the worst of the credit crisis is behind us, so Goldman should goose its risk profile to increase returns. This is remarkably short-sighted. Yes, leverage is down, but only relative to the obscene levels reached a year ago. Measured by tangible common equity, the biggest banks are still levered over 20 to 1. If banks learn nothing else from the financial crisis, it’s that they should err on the side of prudence, carrying substantially more capital than appears necessary.
Ben Bernanke Was Incredibly, Uncannily Wrong We now have the diametrical opposite of the famous "Peter Schiff Was Right" video (a compilation of 2006 and 2007 clips in which Schiff, a financial expert who subscribes to Austrian economics, predicted the deep recession that would follow the bursting of the housing bubble). The new, opposite video is a compilation of the 2005–2007 prognostications of Federal Reserve Chairman Ben Bernanke. In it, Bernanke is shown to have been just as embarrassingly wrong as Schiff was uncannily right.
Bernanke: Why are we still listening to this guy?
The Three Triggers of the Global Gold Bubble As you review your investment portfolio to size up your current exposure to gold, keep one key point in mind: When it comes to profits, there's no rush like a speculative gold rush. And that's just what we have at hand. Inflationary fears are on the march the world over. And most of those worries are due to the trillions of dollars in stimulus spending the world's central bankers have engineered. Those worries about the pressure from rising prices are destined to cause the next big asset bubble. And the color of this particular bubble will be gold.
Gold Holding Strong Against Dollar Gold: A surging euro, which has already moved from 1.4244 to 1.4286 this morning, has seen gold fall off slightly in euro terms - down 0.09% at €668.90/oz. With the dollar going in the other direction, gold is holding strong at $956/oz and is already up 0.33% in this morning's early trading. Continuing dollar weakness could be instrumental in gold breaking through strong resistance at $966/oz. If this happens and we see a number of closes above this level, gold should be ready to challenge fresh highs.
Is Rich Dad Right About $15,000 Gold? Rich Dad is a publishing phenomenon that most investment analysts prefer to ignore. But his common sense advice on how to manage personal finance has become a best-seller. Therefore, when he comments on a new trend then it is worth paying attention. Now he is saying gold could hit $15,000 in a huge price spike. Well, he spotted the US housing market bubble before it happened, and helped millions to cash in before that market crashed.
Gold Bull Market Guaranteed to Make new Highs During 2009 Gold - For the week gold gained $14.10 (+1.50%) to close at $951.50 (continuous contract). This was the highest weekly close in the last seven weeks, so it is a positive development, especially if it holds. The daily chart below shows gold approaching overhead resistance, as represented by the late March high, which is marked by the upper white horizontal line on the chart.
Gold Drops Most in Three Weeks as Dollar Rebounds; Silver Falls Gold fell the most in almost three weeks as the dollar rebounded against the euro, eroding demand for the metal as an alternative investment. Silver also declined. Gold and the dollar have moved inversely every month since April, resuming a pattern in five of the past seven years. The greenback rose as much as 0.7 percent against the euro, partly on revived demand for the safety of the world's main reserve currency. "It is rather painful to describe the moves in gold solely in terms of the euro-U.S. dollar, but that is all that seems to be driving the gold price at the moment," John Reade, UBS AG's head metals strategist in London, said in a report.
China-The 800 lb. Gorilla of Commodities Demand You're not seeing the Chinese dump dollars to go and buy copper or gold, etc. What we're seeing is, rather than rolling dollars over and buying new notes where the yields are so much cheaper, they're going and buying other commodities. And that's a much different statement than saying "I don't like American dollars." They're just saying that they prefer at this stage to own commodities rather than a note that's paying 10 basis points.
Get Ready for the Next Reality Check We're on the verge of something big here. What we're on the verge of may surprise you. We've been waiting for the economy to show signs of life for a while now. We expected this to happen before the year was out. There were just too many catalysts for a short-term economic rebound. The amount of direct government spending was going to help out. The direct stimulus spending may be slow, but there has been a lot more spending from other sources. For instance, the $700 billion TARP bailout didn't disappear into thin air. A lot of it went straight into reserves to offset losses, but a lot of it was simply cash handed over to banks, automakers, and AIG. Currency-Trading Revival May Take Years After Slide Currency-trading volumes may take years to recover after a plunge in risk appetite sparked by the global financial crisis drove away hedge funds and speculators, according to foreign-exchange analysts. Daily trading in London dropped 25 percent in April from a year earlier, with volumes in North America slumping 26 percent, according to surveys released yesterday by the Bank of England and Federal Reserve Bank of New York. Trade in Tokyo slid 16 percent, data compiled by the Foreign Exchange Market Committee in Tokyo showed.
Geithner Assures 'Concerned' China It Will Shrink Deficit Treasury Secretary Timothy Geithner pledged to rein in the U.S. deficit as China underscored concern about preserving the value of its $801.5 billion of Treasury holdings. The U.S. will ensure a "sustainable" deficit by 2013, Geithner said at the beginning of the first round of Strategic and Economic Dialogue talks under President Barack Obama in Washington. China is "concerned about the security of our financial assets," Assistant Finance Minister Zhu Guangyao said.
U.S. backs Chinese push for greater say in global finance he leader of China's central bank said Tuesday he had secured U.S. support to give emerging economies -- including China's -- a "greater voice and representation" on the international financial scene. Zhou Xiaochuan, governor of the People's Bank of China, added that tU.S. officials have promised to support "qualified candidates from China being given full consideration" to assume high-level positions with international financial institutions (IFIs) such as the World Bank, International Monetary Fund and other global economic bodies.
U.S., China Pledge to Ensure Recovery Is 'Secure Policy makers from the U.S. and China, the world's largest and fastest growing economies, pledged to keep their stimulus efforts in place until an economic recovery is "secured." "We agreed it is vitally important for China and the United States to see through their commitments to repair the financial system and lay the foundation for recovery," Treasury Secretary Timothy Geithner said in remarks at the conclusion of two days of talks with Chinese officials today.
Geithner: Happy with framework of cooperation with China Roadmap for relations includes climate issues, U.S. savings rate Treasury Secretary Timothy Geithner said Tuesday the biggest achievement of two days of talks with his Chinese counterparts was a "framework for cooperation," mapping out future economic relations between the two countries. "The most important thing that we accomplished today ... is to set out a path to a more balanced and more sustainable global recovery in the future," Geithner said at a dinner at the end of the closed-door talks. The framework includes a pledge by both sides to seek more balanced growth, Geithner said. He said that U.S. consumers must bolster their savings and that Americans are "going to have to go back to living within our means." In that vein, the recent rise in the U.S. savings rate was likely to prove durable, he said.
Geithner: China Needs to Be Less Dependent on U.S. Consumer Treasury Secretary Timothy Geithner said China will have to adjust its economy to be less dependent on the U.S. consumer as Americans go back to "living within their own means." Mr. Geithner, speaking at a dinner marking the end of two days of discussions between the U.S. and China, said the Asian giant is embarking on "a remarkably ambitious set of reforms" that will see China grow more from consumer demand than exports. He added that both countries have taken big steps towards repairing the global economic crisis through a series of stimulus packages and reconstruction efforts that will put the U.S. and China "on a path to a more balanced and sustainable recovery in the future."
China is spending its Reserves Building Strategic Infrastructures Jim Rogers
Grantham: China Will Collapse China is bailing out the world economy, growing at 8% a year while the rest of the globe struggles. Unfortunately, if China bears are right, those days will soon be over. Jeremy Grantham of GMO is nervous about emerging markets, especially China. . . . . . . . . Edward Chancellor, strongly suspects that the Chinese economy is dangerously unbalanced and very likely to come unhinged in the next few quarters, surprising the pants off investors.
Mob beats Chinese steel factory executive to death Thousands of workers had gathered in northeastern rust belt city of Tonghua to protest the takeover of their company and threatened layoffs. Chinese state media confirmed Monday that a steel factory executive was beaten to death after thousands of workers gathered to protest the takeover of their company. Chen Guojun, an executive at Jianlong Steel Holding Co., died Friday after an angry mob in the northeastern rust belt city of Tonghua beat him and then blocked ambulances from reaching him, according to the China Daily. The protesters worked at the state-owned Tonghua Iron and Steel Group, which was going to be sold to Chen's privately owned Jianlong Steel. Chen sparked the riot by announcing 30,000 workers would be laid off, the newspaper said.
Obama's Plan Isn't the Answer For the 85 percent of Americans who already have health insurance, the Obama health plan is bad news. It means higher taxes, less health care and no protection if they lose their current insurance because of unemployment or early retirement. President Obama's primary goal is to extend formal health insurance to those low-income individuals who are currently uninsured despite the nearly $300-billion-a-year Medicaid program. Doing so the Obama way would cost more than $1 trillion over the next 10 years. There surely must be better and less costly ways to improve the health and health care of that low-income group.
Geithner: US to address deficits after recovery Geithner: US will reverse spending after economy is on certain recovery Treasury Secretary Timothy Geithner says he has reassured China that the United States will take steps to address rising budget deficits once the economic recovery is firmly in place. China has huge investments in the United States and has worried it could be undermined by U.S. budget deficits. Geithner says the Obama administration plans to reverse the spending of hundreds of billions of dollars devoted to stimulating the economy and propping up a teetering financial system.
The Greatest Subprime A.R.M. of All is our Debt It troubles me greatly to know that while the 30 year Treasury bond is yielding a mere 4.6%, we are not locking in that low rate for our newly issued debt. Any thinking American knows it would be best to take advantage of that ridiculously low yield and finance the Treasury's borrowing at the long end of the curve. However, much like those homeowners who chose to think in terms of weeks not years when evaluating their long term finances, our government has subjected us all to what amounts to the mother lode of all subprime adjustable rate mortgages.
Lenders, Realtors Divided on Arizona Foreclosure Law Realtors and bankers are gearing up for a battle over Arizona legislation that would allow lenders to sue homeowners for losses incurred from a foreclosure. The change to the state’s so-called “deficiency judgment” law requires a borrower to live in the home for six months to be eligible for protection from lender-initiated lawsuits to recoup the full outstanding principal of a mortgage. Proponents of the law, including bankers that lobbied for the change, believe it will discourage investors from walking away from properties when they can’t make a profit.
U.S. housing turning corner but consumer mood darkens U.S. home prices rose in May for the first time in three years, the latest sign suggesting the battered housing market is stabilizing, but a weakening job market hit consumer confidence in July and could prevent near-term economic recovery. The most severe housing slump since the Great Depression helped propel the U.S. economy into recession and its turnaround is considered essential. Potential home buyers afraid of committing to a fast- depreciating asset have been clamoring for signs of stabilization in house prices.
Banks Asked to Ramp Up Loan Help U.S. Wants 500,000 Mortgage Modifications by Nov. 1; Firms Ask for Clarity Senior administration officials pressed executives from the nation's largest banks Tuesday to speed help to distressed borrowers after a frustrating start to the government's foreclosure-prevention effort and set a goal of more than doubling the number of homeowners receiving aid by November. After a series of meetings with top banking executives, Treasury Department officials said they want lenders to modify 500,0000 mortgages by Nov. 1. Since the program, known as Making Home Affordable, began in March, it has recorded about 200,000 loan modifications.
Wave of commercial loan defaults feared Nearly $165 billion in business mortgages are coming due as rents fall and vacancies rise. Almost $165 billion in U.S. commercial real estate loans will mature this year and need to be sold or refinanced as rents and occupancies fall, according to First American CoreLogic. The South has the most maturing loans with 60,893 mortgages valued at $96 billion coming due on shops, offices, hotels, apartment buildings and land, Santa Ana, Calif.-based First American said in a report. The West is second with 20,549 mortgages maturing for a value of $35 billion.
California companies for sale sit on the shelves Buyers face a shortage of available cash, so owners are accepting lowball offers or trying to wait out the recession. Five months after he opened PNK Pro Beauty Supplies in Glendale, owner Karhen Abramyan has put the shop up for sale. He's gotten a few lowball offers in the last few weeks, but no deal. "I have $60,000 in inventory here, I can't just sell it for $50,000," said Abramyan, who is asking $95,000. Blame the bad economy. Buyers and sellers of California businesses are hampered because the vast pools of money that once fueled sales have dried up.
Pyrrhic Victory in June Housing Data Many investors celebrated Monday after June's "surge" in U.S. new-home sales. Alas, it was largely wishful thinking. True, the Census Bureau reported sales up 11% from May. That is a big number, at first glance justifying Monday's 4.5% leap in the Dow Jones U.S. Home Construction Total Stock Market Index. But it fails a close inspection. Seasonally unadjusted data show a total of 36,000 new homes were sold last month, the lowest June total since 1982, notes Richard Moody, chief economist at Forward Capital. And the Census Bureau warns against assuming too much precision in these numbers, which are based on a sample survey.
Small Banks at Center of Overhaul Debate While the country's biggest banks have taken much of the blame for the economic crisis, the fate of the Obama administration's efforts to overhaul regulation of the financial industry could rest in the hands of thousands of small local banks, which have remained out of the national spotlight. The country's 8,000 community banks are a powerful lobbying force, and no one knows that better than the nation's largest financial firms, most of which oppose the creation of an agency to oversee consumer products ranging from mortgages to credit cards. Wall Street firms might have millions of dollars to spend on Washington lobbyists and public relations campaigns, but these companies possess neither the strong reputation nor the grass-roots reach of community banks.
Romulus, Remus, Stimulus: A Brief History of Monetary Madness Those whom the gods would destroy are first granted stimulus. When a man wins the lottery, for example, it has a stimulating effect on everyone around him. He usually spends the money quickly - often even before he gets it. But no matter how much he wins, he is usually broke within a few years…often, even broker than he was before he bought the winning ticket.
Jittery Economy, Relatively Low Cost Cited For Boom In Online Higher Education While the troubled economy may be bad news for GM dealers or people selling their houses, it's creating a greater demand for online college courses. Enrollment is growing steadily, especially among older, working students. The courses offer them a way to gain additional skills that could provide insurance if they get laid off or give them better credentials in the job market. "Students are fearful of losing their jobs and want stronger skills," said Shirley Adams, provost of Charter Oak State College in New Britain, where enrollment in online courses has soared in the past few years. "They may have been working in a field for many years, but a lot of times, employers are looking for that degree."
U.S. to mortgage firms: Pick up the pace Pummeled by complaints from borrowers, loan servicers commit to more mortgage modifications. White House wants 500,000 trial mods by Nov. 1 Loan servicers will "significantly" increase the pace of mortgage modifications under the Obama foreclosure prevention program, the Treasury Department said Tuesday. The Obama administration wants to see 500,000 trial modifications in place by Nov. 1. Currently, 200,000 are underway. Officials called executives from 25 servicers participating in the program to Washington Tuesday to discuss improving the 5-month-old plan's implementation.
Home Prices Rise Across U.S. Bargain Hunting, Low Rates Drive First Gain in 3 Years; Double Dip Still Possible Home prices in major U.S. cities registered the first monthly gain in nearly three years, according to a new report that provided fresh evidence that the severe U.S. housing downturn could be easing. Standard & Poor's Case-Shiller index, which tracks home prices in 20 metropolitan areas, rose 0.5% for the three-month period ending in May, compared with the three months ending in April. It marked the index's first increase after 34 straight months of decline, and came after a variety of housing indicators has shown glimmers of hope for the past several months.
BofA plans to pare back its branches nationwide Bank of America Corp. could eventually shrink its 6,100-branch network by about 10 percent as consumers utilize other methods of banking, a company spokesman said today. Bank of America spokesman James Mahoney made the comments when asked about a published report that CEO Ken Lewis and another bank executive described such a plan to investors at a meeting last week in Charlotte, where the bank is based.
Foreclosures Are Often In Lenders' Best Interest Numbers Work Against Government Efforts To Help Homeowners Government initiatives to stem the country's mounting foreclosures are hampered because banks and other lenders in many cases have more financial incentive to let borrowers lose their homes than to work out settlements, some economists have concluded. Policymakers often say it's a good deal for lenders to cut borrowers a break on mortgage payments to keep them in their homes. But, according to researchers and industry experts, foreclosing can be more profitable.
Consumer confidence takes second straight monthly drop Consumer confidence took its second consecutive monthly drop in July, the Conference Board reported Tuesday, underscoring still-gloomy sentiment about the U.S. economy. The index dropped to 46.6 in July from an unrevised 49.3 in June. In May, the confidence gauge stood at 54.8. The confidence measure was worse than expected. Economists surveyed by MarketWatch were expecting confidence to dip to 48.0 in July from the June reading. See Economic Calendar. The weaker-than-expected July number helped to sap stocks after the opening on Tuesday. The Dow Jones Industrial Average (INDU 9,097, -11.71, -0.13%) was recently off by 37 points. The June and July declines follow rebounds of the index in the spring.
U.S. to provide $1 billion to hire cops The federal government will give $1 billion in grants to law enforcement agencies in every state to pay for the hiring and rehiring of law enforcement officers, Vice President Joe Biden and Attorney General Eric Holder announced Tuesday. The money comes from the stimulus bill -- the American Recovery and Reinvestment Act of 2009 -- the officials said. The law is designed to help pull the U.S. out of its recession by providing and saving jobs, and helping those most affected by the downturn in the economy. Beneficiaries can include state, local and tribal governments.
'Cash for clunkers' bashed Analysts question program's stimulus, gas savings Despite an early surge of interest from consumers, analysts say the federal "cash for clunkers" program will fall short of its potential to reduce emissions and stimulate the economy. Rules allow buyers to make only slight improvements in fuel economy, and any increase in cars sold will likely come at a steep cost. The Obama administration expects the plan to boost sales by 250,000 over the next three months by providing rebates of up to $4,500 for new-car buyers trading in old models with a combined fuel economy of 18 miles per gallon or less.
U.S. manufacturers scraping bottom U.S. factory output at its lowest point in 60 years, and even massive job cuts haven't produced profits. Las Vegas has always served as an important - if odd - barometer for Charles Martin's manufacturing firm, which makes commercial-grade door hinges. That's because even in bad times, casinos still went up in Nevada. Not so today. "When gamblers aren't building, forget about people who make rational decisions," said Martin, president of Bommer Industries, the last completely American manufacturer of door hinges for hotels, malls, universities and other big commercial buyers. "The gamblers have quit building, and they're always optimistic."
Foreign Investment in the U.S. - Going Down, Down, Down Here at Casey Research, we've been watching the actions of foreign holders of U.S. dollars as closely as a Las Vegas pit boss watches a card player on a $1 million winning streak. Many of those in the deflation camp largely, or entirely, ignore the potential role these foreign holders may play in the drama now unfolding. But in fact, foreigners have, over the last decade, been by far the single most important source of buying for U.S. Treasuries. Given the Treasury's need to flog on the order of $3 trillion worth of its unbacked paper this year just to keep the government's doors open - and that is a four- or fivefold increase over 2008 - the foreign buyers not only have to show up for the Treasury auctions, they have to show up in droves.
Seniors Air Doubts to Obama President Tries to Allay Fears Over Cuts to Medicare Spending, Says Waste Is Target President Barack Obama on Tuesday sought to reassure senior citizens that squeezing billions of dollars from Medicare spending won't hurt their benefits. He also defended a proposal aimed at encouraging Americans to make plans in advance for end-of-life medical care. Wringing savings from Medicare, the federal health-care plan for the elderly, is key to lawmakers' efforts to cover the roughly $1 trillion cost of expanding health insurance to nearly every American. The House version of health-care legislation calls for a net $246 billion in cuts to Medicare spending over a decade.
Obama to seniors: 'This is not like Canada' President Obama on Tuesday directed his message of health-care reform to the country's oldest residents. "All I know right now is we have a problem, and it includes the spiraling cost of Medicare," Mr. Obama said at a town-hall-style meeting at the AARP headquarters in Washington. Mr. Obama stuck to his familiar points such as cutting health-care costs by eliminating waste -- including patients taking the same tests "over and over again." He also restated that advance screening for cancer and rewarding doctors for "quality, not quantity" care also will cut costs.
Plan to Tax Insurers Stirs Interest in House Senior House Democrats seeking a health bill acceptable to rank-and-file lawmakers are warming to a plan to tax insurers that sell so-called gold-plated health policies. Incorporating the proposed tax -- which so far has attracted more support in the Senate -- would allow the House leadership to shrink the surtax on wealthy households in the current bill. That might widen support among Democrats who are wary of the legislation.
U.S. Pays $2.5 Trillion for Care Costing $912 Billion The last time a president tried to overhaul U.S. health care, Americans were spending $912 billion on the system and 40 million were uninsured. Today they're spending $2.5 trillion and almost 50 million lack coverage. President Barack Obama's effort to revamp the system faces resistance from lawmakers of both parties who warn that the more than $1 trillion cost of the plan will break the budget at a time when the government already faces record deficits.
Obama aide proposes tax on cosmetic procedures to help fund healthcare Proposal comes as conservative congressional members continue to rail against cost of overhaul Americans wealthy enough to afford cosmetic surgery could be asked to pay a bit more for their tummy tucks and pectoral implants to fund treatment for Americans who cannot afford basic healthcare. An aide to Barack Obama proposed a vanity tax of sorts on cosmetic surgery to help pay for his broad overhaul of the country's healthcare system. This month, US treasury department economic adviser Gene Sperling suggested to Senate negotiators an excise tax on elective cosmetic surgery procedures, Politico reported. Senators appear cool on the idea of a "botox tax" however. Efforts to reform America's healthcare system, a patchwork of government-provided care and private insurance typically offered by employers, have flummoxed US presidents since Harry Truman in the 1940s.
Fighting Obesity Is 'At the Heart' of Obama's Plan to Provide Better and Lower-Cost Health Care "President Obama and I are committed to delivering a health care system that provides all Americans with better quality and lower costs. And fighting obesity is at the heart of both of these goals," Health and Human Service Secretary Kathleen Sebelius told a conference at the Centers for Disease Control and Prevention on Tuesday. With obesity reduction as the main goal, Sebelius said the Obama administration will "require" health insurance plans to cover some weight loss programs.
"Anytime you want one,'' the organization told him. "Platinum.''
The stage was set at AARP, the powerful Washington-based lobby for senior Americans, for Obama to host another "town hall'' forum on healthcare reform, where the president allowed that both he and his wife Michelle have "living wills'' drafted but hope they don't have to use them anytime soon. "If you have insurance that you like, you will be able to keep that insurance,'' Obama said of the healthcare reforms that he is pursuing on Capitol Hill. "Nobody is trying to change what works.''
Socialized Healthcare vs. The Laws of Economics The government's initial step in attempting to create a government-run healthcare monopoly has been to propose a law that would eventually drive the private health insurance industry out of existence. Additional taxes and mandated costs are to be imposed on health insurance companies, while a government-run "health insurance" bureaucracy will be created, ostensibly to "compete" with the private companies. The hoped-for end result is one big government monopoly which, like all government monopolies, will operate with all the efficiency of the post office and all the charm and compassion of the IRS.
Healthcare debate's next hurdle: abortion Some Democrats opposed to abortion rights threaten to pull their support for the bill unless it includes language restricting taxpayer funds for the procedure. With House leaders struggling to reach agreement on healthcare legislation, aiming toward a possible vote this week, a new hurdle has emerged: abortion. Some conservative Democrats are threatening to pull their support from the massive healthcare bill unless their concerns over potential federal funding of abortion procedures are met. They fear that the Obama administration will take advantage of an expanded government role in healthcare to increase the availability of abortions nationwide.
CalPERS appears to be a willing victim The California Public Employees' Retirement System played along as three credit rating firms it blames in a suit gave three mortgage funds AAA ratings. Its investment in them led to a $1-billion loss. Students of the fine art of pointing fingers know that the key thing is to not make yourself look like an idiot in the process. By that standard, the California Public Employees' Retirement System just flunked. In a lawsuit filed this month in state court, CalPERS blamed the three major credit rating agencies, Moody's Investors Service, Standard & Poor's and Fitch Ratings, for its recent billion-dollar investment loss in three complex mortgage funds. The pension system says it got rooked because the firms gave the funds inflated AAA ratings.
THE U.N. SEIZURE OF PARENTAL RIGHTS From Family Freedom to Global Control "...some opponents of Humanism have accused us of wishing to overthrow the traditional Christian family. They are right. That is exactly what we intend to do."[1] The British Humanist Association,1969
"...if you give me any normal human being and a couple of weeks, ...I can change his behavior from what it is not to whatever you want it to be.... I can turn him from a Christian into a Communist.... We can control behavior."[2] Psychology Professor James McConnell, 1966
Don't be deceived! The twenty-year-old Convention on the Rights of the Child (CRC) has little to do with personal rights. It has everything to do with changing values and undermining the traditional family. Since it transfers parental authority to the state, Christian children are legally free to reject safe family guidelines. The state will back their choice! As Hillary Clinton wrote back in the nineties, "It Takes a Village!"
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Tues 07.28.2009
Bernanke to the sheeple: don't even THINK about auditing the Fed, you swine!
Rearranging Deck Chairs On The U$$ Titanic America's paper empire is slowly sinking into the sea, and all the powers that be can do about it is rearrange the deck chairs for a while as they wait for the inevitable. Increasingly, more and more people are comparing the US to Japan, and it's 20-plus year bear market / economic doldrums, realizing try as they might, the prognosis for American is a match. This is of course why the stock market trading patterns are a match, because once you bubblize the real estate market (Japan peaked in 1990) it's all over, as this assures a structural high in credit creation that cannot be fixed as easily as floating a new CDO, or throwing a trillion or two at the bond market. Nope - once you play that card, as Sir Allen did back in 2002 to counter the negative effects of the tech wreck, yet another bubble he inspired, there's nothing left to do but inflate with abandon and hope nobody notices.
Barofsky Discovers The Bailout Was Based On A Big, Fat Lie At the heart of the clash between TARP watchdog Neil Barofsky and his critics in the Obama administration is that Barofsky thinks that the bailout should be publicly accountable for meeting its public goal: Keeping banks lending money to fuel the economy. The Treasury Department, meanwhile, is happy with the secret goal--recapitalizing banks and consolidating weak banks with stronger ones.
How To Think About The TARP Bait And Switch When then-Treasury Secretary Hank Paulson explained to the American people that the TARP had shifted gears from buying toxic assets toward making direct capital injections in banks, he insisted that the purpose of the program was to get banks to "deploy, not hoard, their capital." "And we expect them to do so, as increased confidence will lead to increased lending," Paulson said.
Richard Posner: Nope, Fed Probably Won't Stop Inflation In Time Richard Posner has weighed in on the chances the Federal Reserve will act as promised and use its tool kit to enact an exit strategy. His answer is: probably not. The main problem will be that, if trends continue, the Fed may be faced with the need to raise rates while employment is at the highest levels seen in generations. That will be enormously politically unpopular. And this time around we'll have the Barack Obama rather than the Ronald Reagan in the White House.
Peter Schiff Moneybomb August 7th 2009
Gold Futures Rise in New York as Dollar Retreats; Silver Gains Gold futures climbed in New York as the dollar retreated, supporting demand for the precious metal as an alternative investment. Silver also gained. The dollar dropped to a seven-week low against a basket of six major currencies. Gold gained 4.8 percent in the previous two weeks as the greenback dropped 1.8 percent. Purchases of new homes in the U.S. jumped 11 percent in June, the biggest gain in eight years, government data showed today. A "positive economic outlook" and the sliding dollar are "slightly bullish" for gold, Societe Generale analysts in London said in a note.
Gold moves in a mysterious way - well perhaps not! People trust gold more than governments and the political establishment. That is gold's inherent strength that makes it a good investment throughout difficult economic times. Fundamentals are not good, the season is not one where gold is known to perform well, the top gold ETF seems to be losing a bit of its allure - and its volume - buying from the jewellery sector remains very depressed, general stock markets appear to be strengthening, some feel the financial crisis is behind us reducing the safe haven perception of gold, yet the gold market continues to show strength. True it is off its peaks, but every time it seems to be slipping back toward $900, so far this summer doldrum season it has picked up again to settle around the $950 level. Why?
Why US Fed should buy tons of gold American government has one good thing about it. It has Inspector Generals. The government ignores what they say, but at least they give us a measure of truth about government. The truth these days on the extent of government bailouts is undeniably mind-boggling. It may make you feel queasy. It may set off alarm bells. There is something called The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP). Congress, you will recall, created the TARP program in 2008 in its Emergency Economic Stabilization Act.
Higher risk appetite may decrease appeal for gold Equity rally may reflect the global sentiments about economic recovery and the feeling that the worst may be over. Gold prices also rallied last week and traded between $940-960 levels. However the uptrend seems to have settled for gold as beyond a point stock rally signifies increased risk appetite that weakens the yellow metal's safe haven appeal. On the other hand increased risk appetite often benefits the energy and agri-commodities at the global level. This week too gold is expected to trade above $960 but still below the $1000 mark while the picture looks positive for silver as its prices are often determined by increase or decrease in industrial demand.
Real U.S. Treasury Yields Highest In History The highest inflation-adjusted yields in 15 years are helping provide the Treasury with record demand at auctions as the U.S. prepares to sell $115 billion of notes this week. Treasuries are the cheapest relative to inflation since 1994 after consumer prices fell 1.4 percent in June from a year earlier. The real yield, or the difference between rates on government securities and inflation, for 10-year notes was 5.10 percent today, compared with an average of 2.74 percent over the past 20 years. The gap helps explain why investors are buying bonds after losing 4.8 percent this year, the steepest decline on record, according to Merrill Lynch & Co. indexes that date back to 1978.
Emerging markets rush to issue debt Emerging market bond issuance has risen to record levels as investors hungry for greater risk switch to the securities because of attractive yields. The surge in issuance this year, to its highest since records began in 1962, is an encouraging sign for the world economy as activity in emerging market bonds had seized up until a few months ago. The bond market freeze had made it difficult for governments and companies, especially those in eastern Europe hit by the credit crunch and needing to refinance debt.
Is the Emerging Market Bubble About to Burst? Attracted by rich returns this year, The Wall Street Journal reports investors are once again throwing piles of cash into emerging market funds. $35.5 billion flowed into these stock funds in the first half of the year according to EPFR Global. That's the most since the company started tracking the data in 1995.
China warns banks over asset bubbles Chinese regulators on Monday ordered banks to ensure unprecedented volumes of new loans are channelled into the real economy and not diverted into equity or real estate markets where officials say fresh asset bubbles are forming. The new policy requires banks to monitor how their loans are spent and comes amid warnings that banks ignored basic lending standards in the first half of this year as they rushed to extend Rmb7,370bn in new loans, more than twice the amount lent in the same period a year earlier.
China's hidden debt problem Despite robust growth, the world's third largest economy is potentially deeper in debt than originally thought. But when Chinese leaders meet their U.S. counterparts this week, they should pause for reflection before venting any criticism, because hidden liabilities mean China's books are uglier -- potentially much uglier -- than at first sight. Thanks to successive years of fast economic growth and even faster government revenue growth, the official debt-to-GDP ratio was 17.7% at the end of last year, far lower than almost any other major economy.
Hidden from sight, debt creeps up on China On the surface, China presents a fiscal study in contrast with the United States, keeping a remarkably low ceiling on debt even as it spends its way out of the financial crisis. But when Chinese leaders meet their U.S. counterparts this week, they should pause for reflection before venting any criticism, because hidden liabilities mean China's books are uglier -- potentially much uglier -- than at first sight.
U.S.-China Economics: They Need Us as Much as We Need Them This week's U.S.-China economic dialogue kicked off Monday with the usual pomp and circumstance befitting a visiting head of state, as well as a joint WSJ op-ed by Treasury Secretary Tim Geithner and Secretary of State Hillary Clinton. Despite the fanfare, don't expect any major policy announcements to emerge, says William Gamble, president of Emerging Market Strategies, a consulting firm that specializes in emerging markets. "There might be some nice talk but the economics of both sides of the coin show there will not be any great announcements," he says.
Top US officials seek to reassure Chinese Administration brings in top officials to reassure Chinese government on deficits, inflation President Barack Obama put forward his top economic officials on Monday to try to reassure China that the U.S. will not let huge budget deficits or runaway inflation jeopardize the value of Chinese investments here. Among the officials meeting with Chinese representatives Monday, the first day of two-day talks, were Treasury Secretary Timothy Geithner, Federal Reserve Chairman Ben Bernanke, National Economic Council Director Lawrence Summers and Peter Orszag, Obama's budget director.
A cautionary tale from China One company's experience of fraud highlights the potential pitfalls of doing business in China Raiding his own company's Beijing headquarters with the help of lawyers and a police escort was not what Heinz Zuercher had in mind when he agreed in March to take over as chief executive of Frankfurt-listed Business Media China. But that is where he found himself in early June as he and another German manager broke into the finance department while a group of his employees barricaded themselves inside and hid under their desks.
Dollar in Disarray, China Buys Away Since peaking on March 5, the dollar has fallen nearly 12 percent against the trade-weighted U.S. Dollar Index (DXY). This weakness has coincided with price gains for gold, oil and copper, but several other commodities are starting to break out as well. Cocoa, sugar, cotton and orange juice prices have all jumped recently. Dollar weakness has been especially bullish for emerging markets.
Obama Opens Policy Talks With China Saying that the ties between the United States and China are as "important as any bilateral relationship in the world," President Obama welcomed senior Chinese leaders on Monday to begin high-level consultations on issues like the global economic downturn and North Korea. "The United States and China share mutual interests," Mr. Obama declared at the opening ceremony for the two days of talks, which will be led by both the secretary of state, Hillary Rodham Clinton, and the Treasury secretary, Timothy F. Geithner, and their Chinese counterparts.
U.S. courts China cooperation The Obama administration is hoping that two days of high-level talks with top Chinese officials in Washington this week will help restore China's confidence in the dollar and to restore some balance to the lopsided U.S. trade deficit with Beijing. President Obama, during opening ceremonies Monday morning at the Ronald Reagan Building and International Trade Center, stressed the two countries' special bond as two of the world's economic superpowers.
Top US officials seek to reassure Chinese Administration brings in top officials to reassure Chinese government on deficits, inflation President Barack Obama put forward his top economic officials on Monday to try to reassure China that the U.S. will not let huge budget deficits or runaway inflation jeopardize the value of Chinese investments here. Among the officials meeting with Chinese representatives Monday, the first day of two-day talks, were Treasury Secretary Timothy Geithner, Federal Reserve Chairman Ben Bernanke, National Economic Council Director Lawrence Summers and Peter Orszag, Obama's budget director.
Mr. Bernanke's Report Card: We Should All Be Holding Our Noses On Sunday, July 26, 2009, Federal Reserve Chairman Benjamin Bernanke participated in a town-hall styled meeting, moderated by public television's Jim Lehrer in Kansas City, Mo., where he was peppered with several questions about government decisions last year to rescue so-called "too big to fail companies" like insurance giant American International Group.
Will They Ever Grasp the Simple Truths? It's funny how little those in charge have learned from the nightmare of the past two years. All the evidence suggests that the various machinations of the Fed, the misjudgments of the Treasury, the manipulations of the moneyed interests, and the malfeasance of elected officials who supposedly serve our interests has helped bring about the worst financial crisis since the Great Depression. And yet, what do we have now? More of the same. More of the same kind of disastrous thinking and misguided policy-making that has helped transform the U.S. from an unrivaled economic powerhouse into a nation that is slowly being consumed from within by wreckless profligacy and an addict's dependence on borrowed money.
Taking Questions: Mr. Bernanke Fed Chairman Opts for Televised Event to Explain Moves Federal Reserve chairmen have long explained their decisions to Congress and groups of economists using dry and technical language. On Sunday night, Ben S. Bernanke showed a different side of himself. Bernanke took questions from ordinary Americans in an unusual town-hall-style event in Kansas City, Mo., hosted by PBS anchor Jim Lehrer and set to be broadcast this week. It was part of a campaign by the Fed chairman to instill confidence in the economy and to position himself as a voice of calm leadership amid the financial crisis. Also, his term as chairman will end in January, and President Obama will decide in the coming months whether to reappoint or replace him.
Bernanke Unplugged! - the Heartland Tour, Kansas City - 26 July 2009
Ben Bernanke's Big Problem Ben Bernanke has proved that he's an effective public advocate for the Federal Reserve, ably defending it in front of his Capitol Hill inquisitors. One of his most effect talking points was to argue that the Fed has an effective "tool kit" to implement on "exit strategy" to prevent hyperinflation once the economy starts to recover. Unfortunately, Bernanke lacks the one tool he needs the most: a gauge to tell him when to use the other monetary policy tools.
Bernanke on the Campaign Trail: Does the Fed Chief Deserve Reappointment? Any doubts whether Ben Bernanke is lobbying for reappointment were dashed this weekend when the Fed chairman participated in a "Town Hall" style meeting in Kansas City. Starting Tuesday, the meeting will air this week in three installments on PBS's "The NewsHour with Jim Lehrer," but both the content and the intention of the campaign-style event are clear: Fearing a lack of support in the Obama Administration, Bernanke is taking his case for reappointment directly to the American people.
Upside Down and Backwards: Is Central Banking on Death's Door Step? In a rare lucid moment, British Prime Minister Gordon Brown recently quipped, "Technology means that foreign policy will never be the same again" Elaborating before a group of leading thinkers at the TED global conference in Oxford, England, Brown further explained, "The power of technology - such as blogs - meant that the world could no longer be run by "elites" While Mr. Brown didn't exactly enunciate it, he might as well have said, "the advances in technology [read: the internet] also mean that our system of fractional irredeemable fiat currency [read: backed by NOTHING] practiced by Central Banks like the Federal Reserve may also soon be passé too." This is largely due to the masses becoming informed about the world's biggest ponzi scheme, namely, irredeemable fiat currency - forget about the warm-up acts like Madeoff and sub-prime.
Call for Rapid Recovery Is Bubble All Its Own Hats off to officials in Seoul. South Korea's ability to expand at the fastest pace in almost six years is some of the best news Asia has had in a long while. It's a sign that even with the $14 trillion U.S. economy in chaos, Asia is beating the odds and holding its own. For now, at least. The region can't be complacent for two reasons. One, increased spending and low interest rates are fine for the moment, yet they don't replace a return of global demand. Two, loose policies may be doing more to fuel bubbles that merely provide the illusion of economic recovery, leaving Asia even more vulnerable to further problems in markets.
When the Revolution Begins, Socialism Ends
Newsweek Says: The Recession Is Over! The recession is over, Newsweek screams from the cover of its most recent issue, which is out today . . . Three things you need to know:
a) No, it isn't.
b) Magazines depend on rack sales for revenue.
c) Rack sales are driven by purposefully hyperbolic headlines, everything from "ELVIS LIVES!" to "The Recession Is Over!"
Is"Better Than Expected"Good? When you expect a failing grade, but just past that math class, is that "better than expected" necessarily good? Evidently on Wall Street, limping over the very low "expectations" hurdle has been enough to push stocks up and over to be solidly higher for the year. In the rear view mirror are now the market lows for this cycle, the worst economic collapse in a few generations and the broken banking system. The markets seem to be anticipating a better than 3% economic growth (that we don't see yet) based upon their 3+ month rally. Also missing in the analysis has been the decline in revenues by many of the companies reporting "better than expected" earnings, which came at the hands of cost cutting (read layoffs). Without revenue growth, sustainable earnings growth will be very hard to come by, making the current valuations of the markets seem a bit rich. While will the markets come to their economic senses? Judging by the recent market action, it could be a while - but look out when it does.
SEC rule on 'naked' short-selling now permanent SEC makes emergency rule targeting 'naked' short-selling permanent Federal regulators on Monday made permanent an emergency rule put in at the height of last fall's market turmoil that aims to reduce abusive short-selling. The Securities and Exchange Commission announced that it took the action on the rule targeting so-called "naked" short-selling, which was due to expire Friday. Short-sellers bet against a stock. They generally borrow a company's shares, sell them, and then buy them when the stock falls and return them to the lender -- pocketing the difference in price. "Naked" short-selling occurs when sellers don't even borrow the shares before selling them, and then look to cover positions sometime after the sale.
When Workers Attack! Thank god. Thank god that for all of the layoffs, vanished 401(k)s, and general economic devastation we still haven't seen any meaningful social unrest or violence in the US. There's been gun buying, but no pitchforks. That can't be said elsewhere, however. In China, India, Belgium and France (especially France), violent unrest has been common, with workers taking out their frustrations against their bosses in the form of kidnappings and even murder.
Dodd, Conrad told deals were sweetened Loan official says Dodd, Conrad were told they were getting VIP home loan deals Despite their denials, influential Democratic Sens. Kent Conrad and Chris Dodd were told from the start they were getting VIP mortgage discounts from one of the nation's largest lenders, the official who handled their loans has told Congress in secret testimony. Both senators have said that at the time the mortgages were being written they didn't know they were getting unique deals from Countrywide Financial Corp., the company that went on to lose billions of dollars on home loans to credit-strapped borrowers. Dodd still maintains he got no preferential treatment.
Obama czar pick: 'Raving animal rights nut' Nominee advocated hunting ban, giving creatures right to file lawsuits Martosko told Beck, "When you embrace this whole utilitarian idea, guess what else comes in the back door? Some animals, according to Singer, are worth more than some humans. A smart border collie, he says, is worth more, inherently, than a retarded child. … Cass Sunstein has embraced the whole enchilada. … He believes that animals should have some of the same rights as humans, in fact, greater rights than some people – including the right to follow lawsuits."
Guest David Martosko 7-22-09
Actually, There Will Be TWO Housing-Market Bottoms... Jim Cramer said six months a year ago that housing would bottom on June 30. He's been declaring victory ever since. Meanwhile, another group of analysts--Barry Ritholtz, Whitney Tilson, ourselves, et al--think Cramer & Co. are hallucinating. Prices have at least another 15% to fall! Part of the disconnect here is a failure to define exactly what one means by a "bottom." When prices continue to fall into next year, as they almost certainly will, those who say housing is bottoming now can always say they were talking about housing activity, not prices. Housing activity, as measured by housing starts, new home sales, and other similar measures, does appear to be bottoming.
Renters finding it cheaper to own a house For Aaron Carter, a musician who was struggling to fit a drum set, a piano and three guitars into his 600-square-foot apartment in Phoenix, the math on owning a home finally began to work in his favor. Rent for the apartment he shared with his wife: $615. Mortgage payment for a home with twice the space: $760. And the interest on a mortgage is tax deductible. So they jumped at the chance to buy some elbow room.
Main Street's soaring sour loans Small businesses that aren't considered 'too big to fail' are doing exactly that: Failing. As the effects of the economic collapse began pouring down Main Street, the government last year was left holding a record $2.1 billion in write-offs of small business loans it had guaranteed. Officials expect the number of defaults to rise as the nation continues to climb out of the recession. Records obtained under the federal Freedom of Information Act show the public is paying to offset bank losses on small business loans across the country, from a convenience store in the tiny Canadian border town of Houlton, Maine, to a graphic arts design company on the island of Hawaii, more than 5,000 miles away.
Verizon profit falls, eyes 8,000 job cuts Verizon Communications Inc posted a lower quarterly profit and said it would cut 8,000 jobs in its wireline business, as weakness in wholesale and corporate segments overshadowed wireless growth. Verizon, whose shares fell 2.6 percent on Monday morning, said it would accelerate cost cuts in its landline business, with new layoffs amounting to 3.4 percent of its workforce of 235,000 employees. They come on top of 8,000 job cuts in the last year.
Past, Present And Future: All In the Numbers While recent economic data have shown signs of improvement, there just haven't been that many numbers to look at lately. That changes this week, with several important releases shedding light on the economy's recent past, its present and its future. For the economy just past us, Friday marks the release of second-quarter gross domestic product data. The numbers are expected to show that the economy shrank at a 1.5 percent annual rate from April through June. That would be much milder than the 5.5 percent rate of decline in the first quarter, but it would signify that the recession continued through the spring.
New-Home Sales Up 11%, Most Since 2000 Purchases of new homes in the U.S. climbed 11 percent in June, the biggest gain in eight years, underscoring evidence that the deepest housing slump since the Great Depression is starting to stabilize. Sales increased to a 384,000 annual pace, higher than every forecast in a Bloomberg News survey and the most since November, figures from the Commerce Department showed today in Washington. The number of houses on the market dropped to the lowest level in more than a decade.
Americans With Insurance Become Pivotal in Debate With the Obama administration's top domestic priority struggling in Congress, supporters and opponents of the current health-care proposals are now focusing on the constituency that both sides agree has become pivotal to the debate: the majority of Americans who have health insurance and, despite concerns, are generally satisfied with their care. Although polls have consistently shown that just over half of Americans think the health-care system is in need of reform, a substantial majority say they are satisfied with their own insurance and care. Any hope of changing the system will require their support, according to experts and advocates across the ideological spectrum.
The Scary Reason Healthcare Can't Be Reformed It turns out that if you want to find good examples of healthcare institutions meaningfully improving quality and reducing costs at the same time, you don't have to look very far. They're right here in our own backyard. The New York Times has a story on the unusual idea of paying doctors a flat salary, rather than fees for actions performed, thus cutting down on unnecessary tests to patients, while changing the incentive structure for the doctor:
Drugmakers May Pay for $100 Million in Health Ads Drugmakers may spend $100 million for an advertising campaign starting as early as September to push legislation that would overhaul the health-care system, said a person familiar with the discussion. The Pharmaceutical Research & Manufacturers of America, the industry lobbying group, discussed funding the ad campaign during a meeting in Washington last week, the person said. A PhRMA spokesman, Ken Johnson, said no decision has been reached on the group's campaign strategy for when Congress reconvenes after the August recess.
Bureaucracy drives up health care plan's costs House Democrats propose new boards, task forces The health care reform plan proposed by House Democrats would create at least a dozen new federal programs, boards and task forces, contributing to the proposal's hefty price tag that has drawn criticism from Congress' official scorekeeper. Democrats say the bureaucratic infrastructure is necessary to administer the expansion of health care benefits to the tens of millions of uninsured Americans while creating more competition for private insurers to drive down out-of-control costs.
Democrats Face 'Peril,' Opportunity for Health Plan President Barack Obama and Democratic leaders are trying to salvage health-care legislation as disputes within their own party stall progress on the president's top domestic priority. Senate Finance Committee Chairman Max Baucus is struggling to get a bipartisan deal on his panel before an Aug. 7 recess after weeks of delay, and party leaders postponed a vote by the full Senate until September. Leaders in the House, which is scheduled to adjourn July 31, are fighting to contain a mutiny over the $1 trillion cost of the bill that last week had them threatening to force a quick floor vote.
Pastor James David Manning: White Folks Are Not Gonna Take It No More !!!
An Incoherent Truth Right now the fate of health care reform seems to rest in the hands of relatively conservative Democrats - mainly members of the Blue Dog Coalition, created in 1995. And you might be tempted to say that President Obama needs to give those Democrats what they want. But he can't - because the Blue Dogs aren't making sense. To grasp the problem, you need to understand the outline of the proposed reform (all of the Democratic plans on the table agree on the essentials.)
Dubai boom ends as one cheque in four bounces Up to one quarter of all the cheques written in Dubai may be bouncing as expatriate residents in the Gulf state struggle as the economy slows. Blank cheques are used to underwrite financial arrangements, such as credit cards, in Dubai, guaranteeing future payments such as a rental agreement or bank loan. This system arose in the United Arab Emirates (UAE), which includes Dubai, because of the difficulty of doing credit checks on foreign workers. As many of these workers have now lost their jobs in the recession, the number of bounced cheques has risen.
7 regional banks fail 6 subsidiaries of a Georgia bank go down, bringing the tally to 16 for the state in 2009. A N.Y. bank is the first FDIC-insured bank in the state to fail since 2004. State regulators shut down seven regional banks Friday, the Federal Deposit Insurance Corporation said, bringing the total number of banks to fail in the United States to 64 this year. Six of the banks that closed were subsidiaries of one larger bank, the Security Bank Corporation, based out of Macon, Ga. So far in 2009, 16 banks have failed in Georgia, more than in any other single state.
Guaranty Bank warns that it's on the verge of failure The firm, which has more than 50 branches in California, reports that its capital has been wiped out and that it is unable to raise new funds. Guaranty Bank, which has more than 50 branches in California, warned that it could become the biggest financial institution to fail this year. Asset write-downs have wiped out the company's capital, and the firm has been unable to raise fresh funds, parent Guaranty Financial Group Inc. said in a securities filing Thursday.
No. 2 Texas bank expects to fail In filing, Guaranty Financial says it's 'critically' short of capital, and is talking to investors about recapitalization. Guaranty Financial Group Inc , the second-largest publicly traded bank in Texas, said it will probably fail after loan losses and writedowns left it "critically" short of capital. The bank, whose investors include Carl Icahn and Robert Rowling, is in talks with at least one investor group for a possible recapitalization, said a source familiar with the situation. The source requested anonymity because the talks are not public.
Importance of Silver and Gold Recently an interviewer asked me why silver and gold are doing much better than silver and gold mining stocks. This was a question that I anticipated and had given a great deal of thought. First, there is a contingency out in the precious metals camp that "gold" is the only asset that is not at the same time someone else's liability. This is a mantra that is only partially true. Any thinking person would recognize that silver, copper, or firewood would represent an asset that is not someone else's liability. This of course is based upon the fact that the commodity is owned outright. We could argue that any tangible asset could be considered "another" asset that is not simultaneously someone else's liability. I plainly do not buy the idea that gold is the ONLY asset that is not a liability to someone else!
Gold price may soar to $900-1000/oz this week Gold price is on a boom. Analysts have predicted that gold prices might soar to of $ 990-1000 an ounce this week in international markets thanks to weakening dollar. "Gold prices are going to go up this week. The global dollar index is falling and this is making gold to surge to record levels. So investors with good gold positions are going to benefit this week," predicted Dubai-based bullion analyst Mark Robinson.
Is The Rally in PMs Running Out of Steam or Are They Going Higher Right Away? Precious Metals are still in a favorable fundamental situation, and with the recent news confirming the strength of the investment demand, the overall picture is even more bullish. However, as far as timing is concerned, we may need to consolidate for several days. Once we see that the technical situation has improved in the USD Index and S&P 500, the precious metals should be ready to move much higher, probably above the $1000 level.
Gold is genuine Wealth, it is real money Throughout history no paper currency has survived in its original form. Paper currencies are normally inflated away until they are worthless. The purchasing power of the US dollar has declined by 90% since 1950. The situation is the same for most currencies. When governments come under financial pressure they can never resist printing money to pay for debts, be they war debts or just excessive spending. Gold is the only currency which has no liability attached to it.
how Obama could confiscate your gold according to Marc Faber
Dollar May Depreciate ‘Quite Aggressively,’ Standard Bank Says The dollar risks a “break to the downside” amid falling volatility, Standard Bank Plc said. “There may well be a resignation within the market that range-trading will be with us through the rest of the summer,” said Steve Barrow, head of Group of 10 research in London, wrote today in a report. “This could prove incorrect. The dollar is just as likely to break down and possibly quite aggressively. Spot-market stability and falling volatility can work against the dollar right now and produce a significant fall.” The dollar weakened 0.5 percent to $1.4211 per euro as of 10:01 a.m. in London.
You Can't Print Production and Prosperity It's hard to imagine that the monetary policy talk can get any nuttier, but we've likely only just begun. After all, despite the Federal Reserve growing its balance sheet by 140 percent and dropping rates essentially to zero, the bankruptcies just keep on coming. Ex-Fed governor Wayne Angell told Larry Kudlow's CNBC audience, "monetary policy always works!" Although Angell does stipulate that it takes time before the tromping on the monetary gas pedal will spin the economic tires and spray the prosperity gravel.
World Prepares to Dump the Dollar American economists think the world can't afford to let go of the dollar's reserve currency status. The world is about to teach them differently. What do China, India, Brazil, Russia, France and Germany have in common? These countries most often can't agree on anything. But they are united in one strange - and ominous - way. They blame the United States for wrecking the global economy. And they think the dollar is the wrecking ball.
Peter Schiff: I Was Right And Art Laffer Was Wrong The editors of the Daily Bell are pleased to publish this exclusive interview with free-market financial advisor Peter Schiff who founded the successful investment firm of Euro Pacific Capital and is contemplating running for Senator from Connecticut.
Marc Faber the recent rally is the result of excess liquidity The worst is still to come
THE DARK YEARS ARE HERE In this newsletter we will outline what is likely to be the devastating effect of the credit bubbles, government money printing and of the disastrous actions that governments are taking. Starting in the next 6 months and culminating in 2011-12 the world will experience a series of tumultuous events which will be life changing for most people in the world. But 2011-12 will not be the beginning of an upturn in the world economy but instead the start of a long period of economic, political and social upheaval that could last for a couple of decades.
Get ready for banking's next headache A weak economy and frozen financing markets could spell trouble for regional banks with big commercial loan portfolios. Regional banks can no longer ignore the elephant in the room -- their exposure to the commercial real estate bust. Though housing markets remain weak, analysts expect credit problems over the next year to center on commercial real estate -- mortgages on office and apartment buildings and shopping malls, as well as construction, development and industrial loans.
A) From 1776 to 1912 (136 years), the value of the dollar, relative to the Consumer Price Index, increased by 11%.
B) The United States Federal Reserve was created in 1913. The stated purpose of the Fed, by its own definition taken from its website, is to "conduct the nation's monetary policy by influencing money and credit conditions in the economy in pursuit of full employment and stable prices."
C) Then after The Fed's creation, from 1913 to 2008 (95 years), the value of the dollar, relative to the Consumer Price Index, decreased by 95%.
Foreclosure inn: Luxury hotels default Missed loans payments are on the rise, but what is hurting hotels is good for consumers as owners slash room rates by as much as 12%. There's plenty of room at the inn. So much, in fact, that many high-end hoteliers are bleeding cash and defaulting on their loans. "The industry is clearly in a downturn," said John Fox, a vice president with PKF Consulting, an advisor to the hotel industry. "It's across the board with the luxury end of the business hit a little harder than the moderate end."
Bernanke had to 'hold my nose' over bailouts Bernanke voices anger at bailing out risk-takers, but says had to avoid 2nd 'Great Depression' Federal Reserve Chairman Ben Bernanke said Sunday that he had to "hold my nose" over last year's taxpayer-financed bailouts of big financial companies but argued that the action had to be taken to avoid a major meltdown of the U.S. financial system and the broader economy. Bernanke's comments came during a town-hall style meeting in Kansas City, Mo., where he was peppered with several questions about government decisions last year to rescue so-called "too big to fail companies" like insurance giant American International Group, whose collapse would have wreaked havoc on the global economy.
Bernanke Defends Fed’s Response to Financial Crisis Federal Reserve Chairman Ben S. Bernanke defended the central bank’s response to the financial crisis and recession in a forum to be televised this week, saying he sought to avoid a "second Great Depression." "The problem we have is that in a financial crisis, if you let the big firms collapse in a disorderly way, it will bring down the whole system," Bernanke said today at a town- hall-style meeting in Kansas City, Missouri, taped for broadcast on PBS television. "I was not going to be the Federal Reserve chairman who presided over the second Great Depression."
Bernanke says the U.S. economy has 'a very long haul' ahead 'Unemployment is going to stay high for quite a while,' and probably won't peak until the end of this year, according to the central bank chairman. He also predicts that foreclosures will head higher. Federal Reserve Chairman Ben S. Bernanke, offering a more hopeful outlook on the grim jobs picture than many economists, projected that the U.S. unemployment rate would peak at the end of this year. Although economists generally expect the jobless rate, which hit 9.5% in June, to keep rising into the first half of next year, Bernanke suggested that the labor market could begin a recovery sooner.
Bernanke: Economy to bounce back stronger At a town hall meeting in Kansas City, Mo., the Fed chairman said the recovery will take some time, but that lessons learned will benefit the nation. Federal Reserve Chairman Ben Bernanke said Sunday that lessons learned from the recession and the financial crisis will help make the economy stronger than it was before the crisis. Speaking at a town hall event at the Kansas City, Mo., Fed called "Bernanke on the Record," the chairman answered questions from members of the public as well as moderator Jim Lehrer of PBS.
Bernanke takes his message to the heartland The U.S. jobless rate is likely to stay high even once the nation exits recession some time in the next few months, Federal Reserve Chairman Ben Bernanke said on Sunday. Taping a "Bernanke on the Record" special that will air on PBS this week, the top U.S. monetary policy-maker defended the aggressive, even unorthodox actions taken by the Fed during the long recession and deep financial crisis. "I was not going to be the Federal Reserve Chairman who presided over the second Great Depression," Bernanke said.
The Great Preventer Roubini thinks Bernanke need to be reappointed LAST week Ben Bernanke appeared before Congress, setting off a discussion over whether the president should reappoint him as chairman of the Federal Reserve when his term ends next January. Mr. Bernanke deserves to be reappointed. Both the conventional and unconventional decisions made by this scholar of the Great Depression prevented the Great Recession of 2008-2009 from turning into the Great Depression 2.0.
On the Edge with Max Keiser - 24 July 2009 (pt1 of 3)
Wall Street: Here comes the hard part Investors wade into the heaviest week of corporate reporting yet. Reports on GDP, housing, consumer confidence and manufacturing also due. Can a recharged stock market rally withstand the biggest week of corporate profit reports yet? Maybe. "As long as earnings continue to surprise to the upside and revenues aren't disastrous, the market should move higher in this period," said Timothy Ghriskey, chief investment officer at Solaris Asset Management.
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.
US hopes China talks spur economy, job creation Despite diplomatic tensions, US hopes China talks help spur economic recovery, job creation With the global economy mired in recession, the United States and China begin talks Monday to seek a solution together despite tensions over currencies, the U.S. budget deficit and the huge U.S. trade gap with China. Ultimately, how well the U.S. efforts succeed could help determine how fast the economy recovers and how many U.S. jobs might be created once it does. Other issues, such as climate control and North Korean nuclear ambitions, also will command attention. Few expect the talks to bridge the sharp differences between Beijing and Washington. But both governments want to use the occasion to help build a less confrontational relationship.
The 'new' new tax on the rich As Congress continues to grapple with how to pay for health care reform, taxing the wealthy is still in play. Just how wealthy is the next question. The definition of "rich" may be going up should lawmakers choose to impose extra taxes on the wealthy to pay for health reform. Three committees writing the lead House bill have called for an additional tax to be imposed on income above $280,000 for singles and $350,000 for married couples. The so-called surtax would run as high as 5.4% on income over $1 million.
On the Edge with Max Keiser - 24 July 2009 (pt 2 of 3)
Mortgage relief efforts are criticized Senate panel hears complaints amid a new push by some lawmakers to allow bankruptcy judges to modify home loans. Federal programs aimed at modifying loans to stem foreclosures aren't working, witnesses told a Senate Judiciary subcommittee, and some lawmakers called on Congress again to pass a bill allowing bankruptcy judges to modify home loans -- a procedure known as mortgage cram-downs. Separately, the Federal Reserve took steps to make lending terms more understandable as part of its efforts to avoid another mortgage meltdown, which triggered the deep recession worldwide.
U.S. Home Vacancies Hit 18.7 Million on Bank Seizures More than 18.7 million homes stood empty in the U.S. during the second quarter as the steepest recession in 50 years sapped demand for real estate and banks seized properties from delinquent borrowers. The number of vacant properties, including foreclosures, residences for sale and vacation homes, was little changed from 18.6 million a year earlier, the U.S. Census Bureau said in a report today. The quarterly homeownership rate was 67.3 percent, seasonally adjusted.
Will Big U.S. Banks Be Forced to Cover Large Gold Short Positions? For many years, accusations that JPMorgan Chase, Citigroup, Bank of America and Goldman Sachs have wide open and huge, exposed short positions against gold and silver, have been made by groups like GATA and others. In the United States these four banks control over 90% of the derivatives market. They too will be subject to "substantial supervision and regulations," including conservative capital requirements and strong business conduct standards. U.S. Treasury Secretary Timothy Geithner is set to propose giving securities and futures regulators authority to police the over-the-counter derivatives market. Discussions on these regulations begin next week.
Real Yields Highest Since '94 Aid Treasury $115 Billion Auction The highest inflation-adjusted yields in 15 years are helping provide the Treasury with record demand at auctions as the U.S. prepares to sell $115 billion of notes this week. Treasuries are the cheapest relative to inflation since 1994 after consumer prices fell 1.4 percent in June from a year earlier. The real yield, or the difference between rates on government securities and inflation, for 10-year notes was 5.06 percent on July 24, compared with an average of 2.74 percent over the past 20 years.
On the Edge with Max Keiser - 24 July 2009 (pt3 of 3)
ANIMAL FARM - 2009 All animals are equal, but some animals are more equal than others. - - George Orwell – Animal Farm The United States has gradually degenerated from a Republic based on individual liberties to a socialized oligarchy run by an exclusive few. The country was founded upon the platform of individual rights. We declared our independence from Great Britain because of excessive regulation and taxation. Americans fought for the right to live their lives free from the subjugation of an overbearing governmental body. The Founding Fathers declared our independence with these immortal words:
A Worldwide Bubble in Everything The depression deepens. "These are not layoffs...they're permanent job losses," said Barry Ritholtz yesterday morning in his presentation at the Agora Financial Investment Symposium in Vancouver. "These people are not going back to work anytime soon." That is the difference between a recession and a depression. In a recession people get laid off...and then they are called back to work when things go back to normal. But in a depression, they are let go permanently. They exhaust their unemployment benefits and become desperate. They must find new employment in new industries. Because things cannot go back to normal; normal is played out.
China May Press Geithner on Dollar, Economy in Washington Talks The dollar may be the focus of Chinese-U.S. talks starting in Washington today as China presses the Obama administration on how it will tame the fiscal deficit and protect the U.S. currency’s value, Morgan Stanley said. Treasury Secretary Timothy Geithner and Secretary of State Hillary Clinton will host two days of meetings spanning topics from the economic crisis to North Korea. The Strategic and Economic Dialogue is the Obama administration’s first with China.
Mass Layoffs: The Continuing Devastation Stock market investors shrug off a disaster in our midst: mass layoffs. Investors act as though it will soon be business as usual. Companies cut costs by firing employees that have been with them for decades. Then the companies can report higher earnings from cost-cutting measures. The media then proclaim an increase in earnings. But how will these increases be sustained? How will an unemployment rate of 11% help get the economy back on its feet?
He Promised Change, but Is This Too Much, Too Soon? Among the biggest decisions President Obama faced in the weeks before his inauguration were how to assess the scope of the mandate he had received from the voters and how to act on it. It was inescapable after the troubled presidency of George W. Bush that people were ready for change. But how much and how fast were not so apparent from the election returns. Obama's decision to launch the most ambitious domestic agenda since Lyndon B. Johnson's thus became the defining decision of his presidency.
The New Consumer Debt Strategy: Just Walk Away Consumers are mad as hell and they're not going to take it anymore. Every day, the bank calls--demanding to know why the consumer hasn't paid his credit card bills. Every time the consumer skips a payment (to persuade the bank to cut the interest rate), the bank responds by jacking up the interest rate. And so on. Now consumers are finally responding by doing what banks do when they can't pay their debts: just walking away.
Helping the unemployed pay their mortgages As more jobless fall into foreclosure, the Obama administration is looking at ways to help them save their homes. As a growing number of jobless Americans default on their mortgages, the Obama administration is considering new ways to help them avoid foreclosure. Among the options being floated are giving the unemployed money, in the form of grants or loans, to cover their mortgage payments or allowing them to remain in their homes as renters after foreclosure.
Consumer confidence dips in July The Reuters/University of Michigan Surveys shows consumers are wary about the slow pace of recovery. U.S. consumer confidence waned in late July to its lowest ebb since April on growing pessimism about the long-term economic outlook, especially about income and jobs, a survey showed Friday, even as some economists reckon the longest recession in decades may be easing.
Joe Biden: ‘We Have to Go Spend Money to Keep From Going Bankrupt’ Vice President Joe Biden told people attending an AARP town hall meeting that unless the Democrat-supported health care plan becomes law the nation will go bankrupt and that the only way to avoid that fate is for the government to spend more money. “And folks look, AARP knows and the people with me here today know, the president knows, and I know, that the status quo is simply not acceptable,” Biden said at the event on Thursday in Alexandria, Va. “It’s totally unacceptable. And it’s completely unsustainable. Even if we wanted to keep it the way we have it now. It can’t do it financially.”
Pelosi does not favor second economic stimulus U.S. House of Representatives Speaker Nancy Pelosi does not favor a second economic stimulus package, she said in an interview broadcast on Sunday.
Obama touts healthcare plan for small businesses President Barack Obama said Saturday that Democratic plans to revamp the U.S. healthcare system would benefit small businesses, an argument that quickly drew criticism from his Republican opponents. Obama is trying to build more public support for a broad healthcare overhaul after action stalled in the U.S. Congress this week and polls showed many Americans were skeptical about the $1 trillion program.
5 freedoms you'd lose in health care reform If you read the fine print in the Congressional plans, you'll find that a lot of cherished aspects of the current system would disappear. In promoting his health-care agenda, President Obama has repeatedly reassured Americans that they can keep their existing health plans -- and that the benefits and access they prize will be enhanced through reform. A close reading of the two main bills, one backed by Democrats in the House and the other issued by Sen. Edward Kennedy's Health committee, contradict the President's assurances. To be sure, it isn't easy to comb through their 2,000 pages of tortured legal language. But page by page, the bills reveal a web of restrictions, fines, and mandates that would radically change your health-care coverage.
House Democrats Censure Republican's Use of Term 'Government-Run' Health Care in Constituent Communications Rep. John Carter (R-Texas) made public last week an e-mail from the Franking Commission that asked him to change the audio message on a telephone town hall meeting on health care from “government run” to “public option.” The Franking Commission, a bi-partisan committee authorized by law to oversee mail and other communications between members of Congress and their constituents that is paid for with federal funds, responded to the audio message from Carter’s staff for the town hall event that said: “The House Democrats unveiled a government-run health care plan.”
What will triumph in health care push -- reform or recess? Something old and something new to watch this week: The continuing -- some say languishing -- health care debate, and the launch of the "Cash for Clunkers" program designed to improve the nation's fuel efficiency, not to mention Detroit's bottom line. "Busy week," was the understatement of a top House Democratic leadership aide as he looked ahead.
Dems: We'll move forward on health plan Senate Democrats alone cannot pass President Obama's ambitious overhaul of how Americans receive health care, a top lawmaker acknowledged on Sunday. Republicans said they will continue their opposition to a plan they say is simply a government takeover of private decisions. Both sides said they want to improve the system and provide care for almost 50 million Americans who lack health insurance coverage, but the two parties remain deeply divided over how to reach that goal. Republicans said the longer the delay, the more the public understands the stakes of a policy that has vexed lawmakers for decades.
Democrats wait and see on health care A key Senate Democrat said Sunday that passing a major health-care bill is impossible without Republican support, though the chamber's top Republicans were not forthcoming with such support on the weekend's political talk shows. "Look, there are not the votes for Democrats to do this just on our side of the aisle," said Sen. Kent Conrad, North Dakota Democrat and a member of the Senate Finance Committee crafting the bill.
Pelosi Says She Will Pass U.S. Health-Care Overhaul House Speaker Nancy Pelosi said she will pass legislation to overhaul the U.S. health-care system through her chamber even as members of her own Democratic Party expressed skepticism after days of discord and delays. “When I take this bill to the floor, it will win,” Pelosi said in an interview on CNN’s “State of the Union” program that aired today. “This will happen.”
White House hits watchdog on Medicare plan Orszag says Congressional Budget Office exaggerates costs in saying little would be saved by oversight panel. The White House has criticized the Congressional Budget Office's findings that the Obama administration's proposal to control Medicare costs would yield a moderate savings of $2 billion over the next decade. White House Budget Director Peter Orszag said the CBO's analysis -- which it relayed to House Majority Leader Steny Hoyer on Saturday -- could feed a perception of the office's bias toward "exaggerating costs and underestimating savings."
Former AMA Head Warns of ‘Disaster in the Details’ of Obama Health Overhaul The former president of the American Medical Association, Dr. Donald Palmisano, a surgeon, warned that if the Obama administration did not slow down on its drive for a government-led health care overhaul, the treatment choices available to patients would be undercut. He added that the president’s “public option” plan in particular would be a disaster for patients and medical innovation.
A Cliffhanger to See if a G.M. Turnaround Succeeds SATURDAY, May 30, offered the kind of warm, sunny afternoon that rain-soaked New Yorkers had longed for all spring. In the theater district, crowds were gathering to catch a glimpse of Barack and Michelle Obama, who were planning to attend a Broadway show so the president could fulfill his campaign promise to his wife of a date night in Manhattan. Fourteen blocks north, high up in a boardroom at 767 Fifth Avenue, Fritz Henderson was about to make the toughest decision of his life, and one that Mr. Obama and his advisers had seemingly foisted upon him.
Don't speed into cash-for-clunker offer Once again, the federal government wants you to shop to save the economy. After the Sept. 11 terrorist attacks, the Bush administration made the case for “patriotic” stock and bond buying sprees. The domestic car makers rolled out flag-waving commercials and zero percent financing deals to persuade Americans to buy American. Politicians passed tax cuts in 2002 and pushed citizens to spend their rebates to rev up the lackluster economy. Economic stimulus packages created another opportunity to proclaim shopping as a patriotic pastime. Now, the Obama administration is making the same pitch, dressing it up in green.
Conservatives Now Outnumber Liberals Almost Two to One in America, According to Washington Post Poll Americans who consider themselves conservatives now outnumber Americans who consider themselves liberal by almost two to one, according to a new poll by the Washington Post and ABC News. In the poll of 1,001 adults conducted between July 15-18, respondents were asked: “Would you say your views on most political matters are liberal, moderate, or conservative?” Thirty-eight percent said they were conservative, while only 20% said they were liberal. Thirty-nine percent, meanwhile, said they were moderate.
Get Ready for Ditch Power! Irrigation canals are glamorous like the sea, but it might be easier to harvest power from them, says Hydrovolts. Think of it as the love child between a steamboat paddlewheel and a small hydroelectric dam. Seattle, Wash.-based Hydrovolts has devised an "in-stream hydrokinetic turbine" for harvesting electric power from canals, irrigation networks, wastewater systems and the streams in and around industrial sites.
Alaska Gov. Palin to leave office with cloudy future Sarah Palin, the former Republican U.S. vice presidential candidate, will step down as Alaska's governor on Sunday with her political future clouded by ethics probes, legal bills and dwindling popularity. Palin made a surprise decision on July 3 that she would resign, raising questions about her next move and whether she was planning to mount a run for president.
Weak economy pushing Russia to arms deal: Biden Russia's struggling economy and its leaders' pragmatism will push it to make deals on nuclear arms reduction as Washington seeks to reset ties with Moscow, U.S. Vice President Joe Biden said. Biden made the remarks in an interview with the Wall Street Journal published on Saturday, after he visited Ukraine and Georgia to reiterate U.S. support for the two former Soviet states at loggerheads with Moscow.
U.S. defense chief heads to Israel, Jordan U.S. Defense Secretary Robert Gates heads to Israel on Sunday for talks covering missile defense, Israel's plan to acquire the multinational F-35 fighter jet and efforts to curb Iran's nuclear ambitions. During a visit that will last about six hours on Monday, Gates is to meet Prime Minister Benjamin Netanyahu and Defense Minister Ehud Barak to discuss those and other bilateral defense issues, a senior U.S. defense official said.
U.S. tries to spur Middle East peace talks The United States launched a fresh drive on Sunday to restart Middle East peace talks, sending senior officials to the region to deal with issues ranging from Jewish settlements to Iran's nuclear ambitions. The visits by Middle East envoy George Mitchell, Defense Secretary Robert Gates and National Security Adviser Jim Jones were a strong signal from U.S. President Barack Obama of his intention to keep Israeli-Arab peacemaking high on his agenda.
Clinton urges North Korea to return to talks U.S. Secretary of State Hillary Clinton said on Sunday that major powers wanted North Korea to return to negotiations over its nuclear program but would not reward any provocative actions. "We are not going to reward them for half-measures. They now know what we in the world community expect," said Clinton in an interview with NBC's "Meet the Press" program.
Rallies around globe back Iran protesters Iranians protesting last month's disputed presidential election won support across the world Saturday as sympathizers rallied in dozens of cities demanding the release of opposition activists jailed by the Islamic republic. In Iran, police and pro-government militia attacked and dispersed hundreds of protesters who had gathered in Tehran, while opposition leaders appealed to the country's top clerics in the city of Qom to intervene and end the crackdown.
Iceland's krona proves the magic wand as Europe ails Iceland's krona is working its magic cure. Well-heeled Japanese tourists – once a rarity – can be seen these days sampling halibut at Reykjavik's Siggi Hall, or buying Gymur jackets at the 66°North store on Bankastraeti. The krona has fallen by half against the euro since the `New Viking' trio of Landsbanki, Glitnir, and Kaupthing strayed out of their depth and brought down Iceland's financial system. Nothing is cheap, but prices have come within reach. Reykjavik's cafés are packed with euro-youth, at last able to afford a taste of all-night dancing at this Arctic Ibiza.
Henry Lamb on agenda 21
Global Plantation NWO Agenda 21
AGENDA 21 DEPOPULATION 2009 PART 1
AGENDA 21 DEPOPULATION PART 2
Obama Admin to Depopulate This Fall 2009
The 2012 NWO Agenda 1 of 10 (a few falsehoods in this part)
Gold-to-silver ratio jumps as silver prices slump Silver's volatility has been in evidence yet again since our last report was published, the price having crashed by almost 22% from its 3rd June high of $15.97/oz to $12.47/oz on 13th July, although it has since recovered slightly, while gold has slumped by 7% over the same period. This corresponds to the increase in the gold/silver ratio, which had dropped to a low of 61.16 on 3rd June to a high of 72.85 on 13th July. Silver's fall from grace in the past few weeks has been accompanied by the liquidation of net longs on Comex, over and above the slip in net longs for gold, suggesting that investors are concerned that industrial demand for silver may not recover in as timely a fashion as anticipated just one month earlier.
Gold steadies above $950 on 7-week low dollar Its a clear sign. Money is coming back into the resource sector as investors around the world are beginning to recognise the exceptional values in the context of a longer term outlook. And companies that are generating shareholder value by advancing their projects will continue to be rewarded. At the moment, the most favoured area for investors remains precious metals, especially gold. Gold steadied above US$ 950 per ounce on Thursday as the US dollar stayed near a seven-week low against a basket of currencies marked the previous day, maintaining bullion's allure as an alternative asset. Earlier this month, economic worries encouraged investors to buy the US dollar and US Treasuries instead of gold, dragging the precious metal's prices down towards US$ 900.
Central bank sales big burden on gold From 1998 to early-2002, gold prices stayed mostly below $300 per ounce with heavy central bank selling, low inflation, and little interest from investors. That all changed in April of 2002, thanks to 9/11 and a strong trend of consolidation among gold producers. Prices eventually traded their way to $1,000 per ounce by March of 2008 before they got hit with selling in the financial panic of 2008. Prices rebounded in November of 2008 with some buying gold as a safe haven and some buying as an inflation hedge. Prices are currently strong with critical support at $850?
Gold best inflation hedge: WGC If there is an economic crisis world over and if you want to keep your money in a very safe way, there is only one thing you can bank on, that is gold. The World Gold Council has also found out this indomitable position of gold when it comes to hedging against any economic worries. According to World Gold Council's regular quarterly appraisal of the gold market, the yellow metal increased modestly in the second quarter, supported by, among other things, ongoing inflation fears. Traditionally an inflation hedge, gold was sought by investors who had growing concerns about central banks' exit strategies and the implications of a reversal in quantitative easing measures.
Fort Knox, Fort Hocks or Fort Shocks: Three United States Gold Scenarios For 72 years, the building at the intersection of Bullion Boulevard and Gold Vault Road in Fort Knox, Kentucky has symbolized the financial strength of the United States of America. The United States Bullion Depository, better known as Fort Knox, is said to contain 147.3 million troy ounces of gold, over half the nation's total reported gold bullion holdings of 261.5 million troy ounces. The remaining 114 million ounces are said to be stored at the Denver and Philadelphia Mints, the West Point Bullion Depository, and the San Francisco Assay Office. Assuming a price of $1,000 / ounce, the nation's gold is worth $261.5 billion. If the metal is actually there, it represents the largest sovereign stockpile of gold bullion in the world.
China adds silver lining to investment option China has finally realized the importance of silver as an investment option and cleared the way for people to put their money on silver bars. The bars are available in 500 gm, 1 kg, 2 kg and 5 kg with a purity of 99.9 per cent. This move comes after the increasing importance of silver is felt in all bullion markets across the globe. In 2007, Gold was 50 times more expensive than silver. But now that figure has reached to over 70 times, the highest in the past five years.
Must be major change in regulation: Geithner U.S. Treasury Secretary Timothy Geithner said on Friday he was willing to work with lawmakers on shaping an overhaul of financial regulations but insisted major changes are necessary. The financial crisis of the past two years show the financial system "failed in its most basic responsibility" to supply credit and protect consumers and that cannot happen again, he said in prepared testimony for delivery to the U.S. House of Representatives Financial Services Committee.
Following the Money: Report of TARP Special Inspector General Part 1
Skating on Thin Ice As 2009 moves past its midpoint, many market participants are briskly trying to forget the carnage of 2008 and the first quarter of 2009. But, before we get lost in the euphoria of the 36% Dow rally in the Spring/Summer of this year, a little hindsight is in order. In March, the Dow had plunged to 6,547, or some 53 percent down from its nominal 14,164 high in 2007. Despite the recent gains, we are still nearly 40% below the 2007 peak. This is a brutal truth that everyone seems to be ignoring. Last week, Merrill Lynch, that storehouse of economic sagacity, announced that the recession was over. Even the bearish NYU economist Nouriel Roubini was reported as saying "the worst is behind us." However, wishing earnestly for something does not make it so.
TARP Could Cost $23.7 Trillion!?!
UK economy falls in Q2, dashing recovery hopes Contraction in Britain's economy in second quarter dashes hopes of an imminent recovery The British economy contracted by twice as much as economists had forecast in the second quarter, leaving it mired in recession and dashing recent hopes of an imminent recovery as premature. Official figures released on Friday showed that the economy shrank by 0.8 percent between April and June amid a record fall in manufacturing output and declines in financial services. While the contraction was much smaller than the 2.4 percent recorded in the first quarter of the year, it was more than double the 0.3 percent average expected by economists.
Yuan Unlikely to Oust Dollar for a Decade The yuan won't replace the U.S. dollar as China's leading international trade currency at least for a decade because of limits on investment flows, according to an executive at Bank of Communications Co. A pilot program allowing Chinese companies to settle trade in their local currency has produced a "small" amount of business in the first three weeks, said Zhang Xiaoming, general manager at the international banking department of the nation's fifth-largest bank by assets. China should expand channels for companies to invest yuan to preserve the value of their assets or make a profit, he said.
Bernanke Sidesteps the Three Big Questions, Again In a recent international Bloomberg poll, Bernanke was rated by investors as the greatest central banker, the man who saved the world's economy. All it took was a doubling of the monetary base and $3 trillion – as of today – of government bailout money. The FED still faces three problems. (1) If it deflates, the financial markets will collapse. (2) If it does nothing, there will be mass price inflation if banks start lending, making use of the FED's doubling of the monetary base. (3) If banks don't start lending, the recovery will not appear. The FED wants to avoid all three. How?
Welcome to the Eye of the Storm The Dow has rallied nicely since March of this year. Washington, D.C. appears to be returning to the good status of "stalemate" which satifies the world. The "War against Terror" is now the police action against misguided radicals. All must be well with the world because bankster profits are off the scale and I swear Maria the Money Honey had an actual Bubblegasm reporting Apple's earnings this afternoon. Welcome to the eye of the storm. And that storm, as displayed above, is Hurricane Wilma, the most intense storm in recorded history. That storm is getting ready to move again and the most powerful part of the eyewall is about to slam into our economic fantasy land at full force.
Banks kick commercial real estate loans down road For the past six months or so, Wall Street has been bracing for what many fear may be the next shoe to drop on the already battered U.S. economy: a U.S. commercial real estate bust that could rival the housing market collapse. Yet, lenders have been keeping that shoe in the closet -- forestalling foreclosures by extending loans, despite rapidly rising mortgage default rates. "In today's environment, it's obviously not very attractive to foreclose on a borrower," said Matthew Anderson, co-founder of real estate consulting services firm Foresight Analytics.
Following the Money: Report of TARP Special Inspector General Part 2
Abandoned USDollar & Paradigm Shift A paradigm shift is underway, unrecognized inside the US kettle. Its water level is falling and its temperature is rising, even as fewer foreign born cooks stir its contents. The US banking and political leaders errantly pursue a path toward a return to normalcy, when all pathways have been washed out by powerful storms. Several key developments point to a new global order taking shape, as the Chinese actively work to plant global seeds that result in the Yuan currency serving more of a role in global trade. They will eventually de-throne the USDollar from its primal perch. The USDollar will be used less in global trade. The US$-based assets are being diversified. These developments are gaining traction, power, and publicity. The foreign creditors continue to protect their core US$-denominated reserves, while clearly undermining the US$ on the margin, as alternatives are chosen. To date, the alternative choice is hard assets, commodity supplies, and properties from the resource camp. The paradigm shift will change the face of the United States permanently, but to date few recognize the changing landscape.
The Myth of Fed Independence by Ron Paul Mr. Chairman, at a time when we find ourselves once again receiving a report on the Federal Reserve's conduct of monetary policy, it is more important than ever that we in the Congress push for more effective oversight and transparency of the Federal Reserve System. It would be unconscionable for this body, especially after the financial crisis of the last two years, not to take forceful and deliberate action to bring more transparency to the Fed.
The FED: No Exit The FED has changed enormously in the past nine months. Between last September and now, Reserve Bank credit has gone up 135 percent. Will the FED change back to what it used to be? Does it have a workable exit strategy? Very, very doubtful. The FED used to manage monetary policy, and that was about all. Today it’s engaged in fiscal actions that have to do with the government’s debts. The two main ones are that it is buying $300 billion of U.S. Treasuries and it is buying $1.25 trillion of mortgage-backed and agency debts. The FED traditionally bought U.S. debt, but never in such volume. The government deficits are so large that the FED will probably eventually announce one or more new programs to buy U.S. debt. At a minimum, these deficits ensure that the FED will not be soon selling what it now is in the midst of buying. No exit here.
CIT Chapter 11 Filing May Follow August Swap in Plan Advisers to bondholders that rescued CIT Group Inc. with a $3 billion loan said creditors may push the company into Chapter 11 bankruptcy after a debt swap next month, according to people familiar with the matter. If the company succeeds in swapping 90 percent of the $1 billion of floating-rate notes that come due Aug. 17, the lenders should require New York-based CIT to try to restructure out of court through debt exchanges with a pre-packaged bankruptcy option, Jeffrey Werbalowsky, chief executive officer of bondholder adviser Houlihan Lokey Howard & Zukin, said on a call with creditors yesterday, according to one of the people.
Bernanke cites option to raise interest rates Federal Reserve Chairman Ben S. Bernanke assured the Senate banking committee Wednesday that the Fed has developed an "exit strategy" that would enable the central bank to raise short-term interest rates to fight inflation when it eventually becomes necessary. Mr. Bernanke was confident the Fed will achieve this goal despite the fact that it has injected extraordinary amounts of liquidity throughout the banking system in fighting the worst financial crisis since the Great Depression.
Global Power and Global Government: Evolution and Revolution of the Central Banking System Humanity is on the verge of entering into the most tumultuous period in our history. The prospects of a global depression, the likes of which have never been seen before; a truly global war, on a scale never before imagined; and societal collapse, for which nations of the world are building totalitarian police states to control populations; are increasing by the day. The major global trend forecasters are sounding the alarms on economic depression, war, a return to fascism and a total reorganization of society. Through crisis, we are seeing the reorganization of the global political economy, and the transformation of capitalism into a totalitarian capitalist world government. Capitalism has never stayed the same through its history; it has always changed and will continue to do so. Its changes are explained and analyzed through political-economic theory, both mainstream theory and critical. The changes are undertaken over years, decades and centuries. The next phase of capitalism is one in which the world moves to a state-controlled economic system, much like, of totalitarian capitalism.
Roberts: Cap and Trade Will Hurt Kansas U.S. Senator Pat Roberts today warned cap and trade will have negative impacts on rural communities and agricultural producers in exchange for little to no reduction in carbon emissions. Senator Roberts joined former U.S. Secretary of Agriculture, U.S. Senator Mike Johanns (R-NE) and U.S. Senator John Thune (R-SD) at a press conference today on the issue. "USDA's analysis has holes big enough to drive a truck through," Roberts said. "It's based on EPA's political assumptions regarding energy use. EPA grossly underestimated the increased costs of natural gas and the increased costs of fertilizer. Energy costs paid by farmers, ranchers, local businesses, hospitals and you and I will skyrocket. Roberts said the legislation will damage rural main streets across America. "Kansas is home to three refineries, all located in small towns and each one employing over 600 people. If this bill becomes law, all three could close their doors.
Well-known Portland developer faces foreclosure John Beardsley, known for renovating historic downtown buildings, is Portland's first major commercial developer to see his properties move toward foreclosure amid growing problems nationwide in commercial real estate. Since May 1, lenders have filed default notices -- the first step in a foreclosure -- on 10 properties owned by Beardsley's companies. The defaults cover loans and sales contracts originally signed for $58 million and taken out during the real estate bubble between 2003 and 2007, according to Multnomah County property and court records Beardsley also owes the county $354,000 in back taxes, according to county records.
Miami Condos 94% Off We've seen lots of wild haircuts in the world of real estate, but nothing like this. Condovultures: A South Florida private equity group purchased 51 new, oceanfront condo-hotel units in the luxury One Bal Harbour complex at $63 per square foot, a discount of 94 percent off of the $1,100 per square foot average recorded sales price, according to a new report from Condo Vultures® LLC.
New U.S. jobless claims rise to 554,000 The number of newly laid-off U.S. workers seeking jobless benefits rose last week, though the government said its report again was distorted by the timing of auto plant shutdowns. Unemployment insurance claims have declined steadily since the spring, but most private economists and the Federal Reserve expect jobs to remain scarce and the unemployment rate to top 10 percent by year-end. The Labor Department said Thursday that its tally of initial claims for unemployment insurance rose by 30,000 to a seasonally adjusted 554,000. That was above analysts' estimates of 550,000.
The Price Of Oil Is Quietly Creeping Back Up After bottoming out on July 13th, the price of oil has quietly risen in the past two weeks. Today the price of a barrel closed at $67.16. Just like the oil rally earlier this year, it's got analysts that believe in the "fundamentals" of oil scratching their heads. Yes, we still have a big glut of oil. Nope, demand hasn't really improved. But, once again green shoots this time in the form of earnings that aren't catastrophic, investors are betting demand will bounce back.
* * * * * * pay attention to this one! * * * * * * Billions of People Expected to Die Under Current Codex Alimentarius Guidelines Your right to eat healthy food and use supplements of your choice is rapidly vanishing, but every effort has been made to keep you in the dark about the coming nutricide. Codex Alimentarius is scheduled for full global implementation on December 31, 2009, and not a word has been spoken in main stream media about this threat to humanity. Yet, according to the projections of the World Health Organization (WHO) and the Food and Agriculture Organization (FAO), a minimum of 3 billion people will die from the Codex mandated vitamin and mineral guideline alone. As the clock ticks toward this irrevocable deadline, the Natural Solutions Foundation (NSF) and its medical director, Dr. Rima Laibow, are feverishly working to change Codex guidelines. They need your help. Former Nazi is father of contemporary Codex
Forced Flu Shot - Governments preparing to vaccinate the entire populace? Are the governments of the world preparing to vaccinate the entire populace? It seems that may be the case. According to Reuters 4.9 billion vaccinations against the supposed swine flu could be ready shortly. Is Obama showing the first card? Documents have been leaked that suggest the CDC is preparing to have a Day of Planning for an H1N1 Vaccination Campaign. The WHO” is also now saying that because of the outbreak in Japan they may be forced to declare a level 6 pandemic.
No Healthcare Plan - America will become bankrupt - Joe Biden Vice President Joe Biden told people attending an AARP town hall meeting that unless the Democrat-supported health care plan becomes law the nation will go bankrupt and that the only way to avoid that fate is for the government to spend more money. “We’re going to go bankrupt as a nation,” Biden said. “Now, people when I say that look at me and say, ‘What are you talking about, Joe? You’re telling me we have to go spend money to keep from going bankrupt?’” Biden said. “The answer is yes, that’s what I’m telling you.”
Obama Open to Bank Fees for Risks, Surtax for Health-Care Plan President Barack Obama signaled support for a proposal to impose fees on some of the nation's largest financial firms to cover losses from risky transactions and avert another market meltdown. Obama, at a White House news conference last night, said the U.S. may need a mechanism similar to the Federal Deposit Insurance Corp. for firms that engage in "some of these other far-out transactions" that put the financial system at risk. "So if you guys want to do them, then you've got to put something into the kitty make sure that if you screw up, it's not taxpayer dollars that have to pay for it, but it's dollars coming out of your profits," he said.
Reid: No Vote on Health-Care Reform Before Aug. Recess Majority Leader Harry M. Reid (Nev.) confirmed Thursday that the Senate would not pass health-care reform legislation before the August recess. That the Senate would miss President Obama's Aug. 7 deadline had been obvious for days, if not weeks, as the Finance Committee methodically crafts the one version of the legislation that is expected to gain bipartisan support. But Reid finally made it official, informing reporters that he had granted a request for more time from GOP negotiators. "I don't think it's unreasonable," Reid said. "This is a complex, difficult issue."
Obama pegs health reform to future Obama sees support from some in GOP President Obama, seeking to reclaim momentum in the push for health care reform, told a prime-time national audience that their future was at stake in the debate and predicted the final deal would attract some Republican support. At his 10th extended news conference since taking office six months ago, Mr. Obama frankly acknowledged rising skepticism among voters about his ambitious plan, saying Americans feel "understandably queasy" about the ballooning federal debt.
Potential Change in the Federal Employees Health Benefits Program
Obama health-care claims disputed Even as President Obama delivered a prime-time sales pitch for his embattled health care reform plan Wednesday, basic facts about coverage, cost and who foots the bills remain in dispute and many of the president's favorite talking points are challenged not only by Republicans but also by independent fact-checkers. For example, Mr. Obama promises that people who are happy with their current health insurance can keep it. That's a claim contradicted by Factcheck.org, a nonpartisan consumer advocacy group at the University of Pennsylvania's Annenberg Public Policy Center.
Mayo Clinic calls House plan bad medicine Obama loses support on reform A world-renowned clinic that President Obama held up as an example of good medicine said Monday that the American people would be "losers" under the House's health care proposal, joining the growing chorus of critics the Obama administration is trying to fend off as the debate intensifies from Capitol Hill to Main Street. Minnesota's not-for-profit Mayo Clinic, which Mr. Obama has repeatedly hailed as offering top quality care at affordable costs, blasted the House Democrats' version of the health care plan as lawmakers continue to grapple with several bills from each chamber and multiple committees.
Ex-IBM Employee reveals TV Abandoned Analog Band to Make Room for RFID Chips Is Micro-chipping the World Behind Switch to DTV? According to a former 31-year IBM employee, the highly-publicized, mandatory switch from analog to digital television is mainly being done to free up analog frequencies and make room for scanners used to read implantable RFID microchips and track people and products throughout the world. So while the American people, especially those in Texas and other busy border states, have been inundated lately with news reports advising them to hurry and get their expensive passports, “enhanced driver’s licenses,” passport cards and other “chipped” or otherwise trackable identification devices that they are being forced to own, this digital television/RFID connection has been hidden, according to Patrick Redmond.
Obama Administration to Implement Government Flu Shot Program??
Clinton offers 'defense umbrella' for allies Considering nuclear Iran Reprising a position from her presidential campaign, Secretary of State Hillary Rodham Clinton said Wednesday the United States could extend a "defense umbrella" over its allies in the Persian Gulf if Iran does not abandon its pursuit of nuclear weapons. It appeared that Mrs. Clinton was not announcing a new U.S. policy and was speaking off the cuff. The White House and Pentagon had no immediate reaction to her comment, but Israel criticized it and suggested that it meant that the U.S. had accepted the prospect of a nuclear-armed Iran.
ACORN A Criminal Front And Should Never Work With US Government Again
Gold, Silver Gain as Dollar Drop Boosts Demand; Platinum Falls Gold rose for the third time in four sessions as the dollar weakened, boosting the appeal of precious metals as a store of value. Silver gained while platinum fell. The dollar slipped as much as 0.5 percent against a basket of six major currencies as Federal Reserve Chairman Ben S. Bernanke reasserted a plan to keep benchmark U.S. lending rates at historic lows for an “extended period.” Last week, gold prices jumped 2.7 percent as the dollar slumped. “If the dollar starts to weaken significantly again, it will send gold off to the races,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago.
Gold and Silver and the Coming Collapse Societal collapse and widespread suffering are prospects I do not enjoy contemplating; and, were it not for my deep belief that what we see is what we see, not all there is, I would face the future with far less equanimity than I do. We are in for some truly terrible times. The green shoots "seen" by Geithner and Bernanke make the LSD-based hallucinations of my generation seem rooted in rational experience; but those believing in these hallucinatory green shoots will find reality to be far different when the banker's world of credit-based paper disintegrates.
24 Trillion Reasons to Buy Gold It is a worst case scenario, but Neil Barofsky, the inspector general for the Troubled Asset Relief Program, has said the bailouts, bank rescues and other economic lifelines could end up costing the federal government as much as $23.7 Trillion. To put this number into perspective, it is nearly double the nation’s entire economic output for a year, more than the cost of all the wars the United States has ever fought combined and the most the federal government has spent on any single effort in American history. It is about $80,000 for every U.S. citizen.
Why gold is holding above $900 in July Weakness in the U.S. dollar and rising oil prices gave gold another boost on Monday. Gold futures rose 1.2 per cent to end at their highest level in more than five weeks as a private-sector rescue of U.S. lender Cit Group raised economic optimism, pressuring the dollar lower against most of its major rivals. Analysts also cited some buying in anticipation that prices will move higher later in the year on inflationary concerns. August gold rose $11.30 to $948.80 an ounce on the Comex division of the New York Mercantile Exchange. September silver climbed 22.2 cents to $13.625.
Gold demand up by 38% Even though demand for jewellery has come down during the recession, the world bullion market witnessed a surge in demand from investors in the March quarter. According to media reports, global demand for gold soared 38 per cent in the March quarter, compared to the corresponding period in 2008, as investors banked on the precious metal’s safe haven role. Experts said jewellery demand weakened, which isn’t surprising given the extreme economic conditions that .consumers face: rising unemployment, falling house prices and low levels of consumer confidence.
RON PAUL ON CAVUTO EXPLAINING THAT THE FEDERAL RESERVE IS DEEPLY FLAWED
Nature, Wealth, and Money Since the beginning of the current series of Archdruid Report posts on economics, I've wondered in an idle sort of way if it might come to the attention of a professional economist or two. Last week's post, though, seems to have settled that issue. I deliberately begged a question in that post, one that cuts to the core of conventional economic theory, and it would have taken a degree of self-control exceedingly rare in any profession for a mainstream economist to read the discussion and not rise to the bait.
Inflation - the real threat to sustained recovery Alan Greenspan The rise in global stock prices from early March to mid-June is arguably the primary cause of the surprising positive turn in the economic environment. The $12,000bn of newly created corporate equity value has added significantly to the capital buffer that supports the debt issued by financial and non-financial companies. Corporate debt, as a consequence, has been upgraded and yields have fallen. Previously capital-strapped companies have been able to raise considerable debt and equity in recent months. Market fears of bank insolvency, particularly, have been assuaged.
Dollar Trades Near Seven-Week Low on Reduced Demand for Safety The dollar traded near a seven-week low versus the euro as resilience in equities reduced demand for the relative safety of the world’s main reserve currency. The yen and dollar fell yesterday against higher-yielding currencies including the South African rand and Mexican peso as the Standard & Poor’s 500 Index touched the strongest level since November. The rand climbed to the strongest level versus the dollar in July as gold prices increased. “While the G-10 currencies are perhaps struggling a little bit, we’re seeing some select strength in some of the emerging and commodity currencies,” said Nick Bennenbroek, head of currency strategy at Wells Fargo & Co. in New York.
Too big to fail? Wall Street, we have a problem The moon vehicle system was based on a modular design. One advantage of such a design – that failure in one component is less likely to compromise the whole – was demonstrated on the Apollo 13 mission. The astronauts were brought back safely to earth despite an explosion that damaged systems on the principal craft. Any engineer will tell you of the importance of making complex systems robust. You need inspections to prevent failure, to be sure: but since failures are inevitable it is equally important to try to ensure that the consequences of such failure are contained.
US banks warn on commercial property Two of America’s biggest banks, Morgan Stanley and Wells Fargo, on Wednesday threw into sharp relief the mounting woes of the US commercial property market when they reported large losses and surging bad loans. The disappointing second-quarter results for two of the largest lenders and investors in office, retail and industrial property across the US confirmed investors’ fears that commercial real estate would be the next front in the financial crisis after the collapse of the housing market. The failing health of the $6,700bn commercial property market, which accounts for more than 10 per cent of US gross domestic product, could be a significant hurdle on the road to recovery.
RON PAUL JULY 22, 2009 ON MSNBC DISCUSSING AUDITING THE FED HR 1207
Fed Aims to Hold Down Interest Rates The economy is finally improving, but enough potholes lie ahead that the Federal Reserve needs to keep interest rates close to zero, at least until unemployment begins to come down, the Fed’s chairman, Ben S. Bernanke, told Congress on Tuesday. “On net, the past few months have seen some notable improvements,” Mr. Bernanke said in his semiannual report to the House Financial Services Committee. The pace will pick up next year and accelerate in 2011, he said, but unemployment will remain high, damping down inflation for two more years.
Bernanke Jabs Back at Fed's Critics In Congress Lawmakers More Vocal About Rescue Program As Recession Persists Federal Reserve Chairman Ben S. Bernanke launched a more aggressive defense of the central bank's multitrillion-dollar campaign to prop up the economy, as government bailouts came under fire Tuesday from all directions on Capitol Hill. Lawmakers were reluctant to second-guess rescues and interventions in the darkest days of the financial crisis. But now, with the financial system stabilizing and the unemployment rate at 9.5 percent and climbing, there is deepening frustration in Congress and around the country that there is not more to show from the trillions of dollars the government has put at risk.
Ron Paul's Statement at Financial Services Committee Hearing The Federal Reserve in collaboration with the giant banks has created the greatest financial crisis the world has ever seen. The foolish notion that unlimited amounts of money and credit, created out of thin air, can provide sustained economic growth has delivered this crisis to us. Instead of economic growth and stable prices it has given us a system of government and finance that now threatens the world financial and political institutions.
The Beginning of the End of the Dollar? Some interesting news today on the currency front. Remember all the hoopla a few months ago about how the dollar was going to be replaced by a wacky new IMF backed currency that went by the acronym “SDR” – or special drawing rights? China was calling for the new system, and U.S. Treasury Secretary Tim Geithner didn't rule it out. Well, the IMF is now on the verge of taking a big leap towards this new system, with a proposal to increase the supply of these SDRs (which are basically just a bundle of several currencies including the dollar, yen, sterling, and the euro) by eightfold. The IMF will vote on the measure on August 7th and would start issuing the new currency by the end of the month.
World Prepares to Dump the Dollar American economists think the world can’t afford to let go of the dollar’s reserve currency status. The world is about to teach them differently. What do China, India, Brazil, Russia, France and Germany have in common? These countries most often can’t agree on anything. But they are united in one strange—and ominous—way. They blame the United States for wrecking the global economy. And they think the dollar is the wrecking ball.
China Politely Moves Away from Dollar China's sovereign wealth fund has taken about 1 percent in drinks group Diageo, in a move which an analyst said is a sign the country is diversifying away from the US dollar. "Diageo is pleased that one of the largest Chinese investment funds has taken a shareholding of approximately 1 percent in the company," a company spokesman told CNBC in a statement.
RON PAUL ON CNBC KUDLOW JULY 21, 2009
THE NEXT GLOBAL FINANCIAL CRISIS: PUBLIC DEBT The cloud of the global financial meltdown has not even cleared, yet another crisis of massive proportions looms on the horizon: global sovereign (public) debt. This crisis, like so many others, has its root in the free flow of credit from the preceding economic boom years. The market prices of assets were rising steadily. Rising valuations, especially where they were based on improving revenues from robust economic activity, led to rising income streams for governments. This encouraged governments to borrow more, perhaps often to expand services – and the bureaucracy required to offer services – although sometimes to improve infrastructure.
Taxpayers Inferior to Shareholders With Obama Bonds State and local governments, forced to close budget gaps by firing workers and shutting schools, may pay at least $4.2 billion more in interest than companies with similar credit ratings on Barack Obama’s Build America Bonds. The $17.4 billion of Build America Bonds sold since April pay an average yield that’s 0.96 percentage point more than corporate securities with the same ratings, according to data compiled by Bloomberg and based on the 25 largest deals. “Taxpayers are taking it on the chin,” said G. Joseph McLiney, president of Kansas City, Missouri-based McLiney & Co., a firm that specializes in selling municipal bonds that qualify for federal tax credits. “There should be no spread.”
Global Exposure in Financial Derivatives Surpasses One Quadrillion Dollars When I posted the lowest responsibly sourced figure for global exposure in financial derivatives, $592 trillion, published May 19, 2009 by the Bank of International Settlements, all sorts of hoodoo apologists for Obama, Geithner, Summers, and Goldman Sachs crawled out the woodwork to claim that this figure is ridiculously exaggerated, there's really nothing to worry about, it's just a few bucks, and so on. All the same hoodoos unfailingly claimed that it's stupid to consider worst-case scenarios when you calculate risk, because... They have learned absolutely nothing from the ongoing financial meltdown which annihilated some of the oldest and largest investment banks in the world, and plunged the global economy into an almost vertical downturn.
Is The Market Underestimating The Potential Fallout From A CIT Collapse? Donna Childs and Sameer Bahtia argue that the market is seriously under-estimating the possibility of a systemic freeze-up of financial markets if CIT's capital crisis leads to a collapse. Credit default swaps are at the lowest levels in months, the stock market has been rallying. And the government had declared CIT can drop dead. Shouldn't there be a bit more fear?
Fannie & Freddie: The most expensive bailout Efforts to use the troubled mortgage finance firms to fix housing market problems are likely to push the taxpayer bill for Fannie & Freddie above $100 billion. The first big government bailout of the financial crisis -- the takeover of mortgage finance giants Fannie Mae and Freddie Mac -- is poised to be the most expensive and complicated to complete. Since Congress essentially wrote a blank check to the Treasury Department in July 2008 to do what needed to be done to inject capital into the two firms, Fannie (FNM, Fortune 500) has received $34.2 billion of direct government support while Freddie (FRE, Fortune 500) has received $51.7 billion.
Marc Faber the governments want you to lose money on Cash
Bernanke resists plan for consumer-products agency Bernanke resists Obama plan to create consumer-products agency, strip Fed of some oversight Ben Bernanke put himself at odds with the Obama administration Wednesday by resisting its plan to create a U.S consumer protection agency for risky financial products. The Federal Reserve chief said those responsibilities should stay with the central bank. Bernanke's pushback on the White House plan comes at a politically delicate time for the Fed chairman. His term expires early next year, and President Barack Obama will have to decide whether to reappoint him. In his second straight day in Congress, Bernanke argued that the Fed has expertise that would be difficult to replicate at a new agency. Consumer oversight, he said, coincides with the Fed's mission to oversee the safety and soundness of banks.
Bernanke Says Add Consumer Protection to Fed Mandate Federal Reserve Chairman Ben S. Bernanke said consumer protection should be added to the Federal Reserve Act as a formal policy goal along with low inflation and full employment, showing a willingness to work with Congress and reshape laws that govern the central bank. “We were not quick enough, we were not aggressive enough to address consumer issues earlier in this decade,” Bernanke, 55, said in response to a question from Christopher Dodd, the Connecticut Democrat who chairs the Senate Banking Committee. “My recommendation to you to consider, Mr. Chairman, would be to ask whether there are steps that could be taken to strengthen the commitment of the Federal Reserve,” Bernanke said on the second day of his semiannual testimony to Congress. “One would be to put consumer protection in the Federal Reserve Act along with full employment and price stability as a major goal of the Fed.”
Buyers of bad debt bide time as U.S. consumers fret The worst is yet to come for debt-laden, cash-strapped and increasingly jobless U.S. consumers. At least that is the view of major debt collectors -- many of which are holding off on acquiring much in the way of troubled consumer debt from banks and other institutions, betting that it will get cheaper as the economy languishes. With unemployment and defaults on the rise, companies like Portfolio Recovery Associates Inc (PRAA.O), Asset Acceptance Capital Corp (AACC.O) and Encore Capital Group Inc (ECPG.O) hope to be able to grab bad debt portfolios at fire-sale prices later this year.
Dollar hits 7-week low versus basket Greenback loses its safe haven appeal as stocks churn and data shows an increase in U.S. home prices. The dollar hit a seven-week low versus a basket of currencies Wednesday as steady stock markets and data showing stronger U.S. home prices offset weak bank earnings, denting the greenback's safe-haven allure. U.S. stocks seesawed with the Nasdaq gaining for its 11th straight session, buoyed by solid profits from Apple Inc (AAPL, Fortune 500). European shares also closed higher for the eighth straight session. "We've seen the stock markets grind higher ... and that has helped currencies gain a bit of a bid against the U.S. dollar," said Sacha Tihanyi, currency strategist at Scotia Capital in Toronto.
Marc Faber China had an over investment Bubble
U.S. business warns Congress of "green trade war" Leading U.S. business groups warned Congress Wednesday it could start a "green trade war" by passing a climate change bill that threatens other countries with tariffs on energy-intensive goods. "We urge the Senate to refrain from including provisions that could negatively impact U.S. relations with key trading partners and disrupt the global trading systems," the U.S. Chamber of Commerce, the National Foreign Trade Council and two other groups said in a letter to Senate leaders. "Climate change is a global problem that calls for international cooperation, not unilateral ultimatums."
GOP Lawmakers Assail Federal Meddling on Autos; Dealers Defended in Both Parties The government bailout of General Motors and Chrysler was roundly criticized by both Republicans and Democrats on Tuesday as a House subcommittee heard testimony from the chief of the Obama administration's auto task force. It was the Republicans on the House Judiciary Committee's administrative-law panel, however, who raised the gravest alarms over the aid to the automakers, depicting the bailout as an abandonment of the rule of law and the practice of capitalism.
Congresswoman Backs New Equal Rights Amendment; Points to Afghanistan, China as Models Rep. Sheila Jackson Lee (D-Texas) told activists rallying on Capitol Hill in support of the newly reintroduced Equal Rights Amendment (ERA), that the United States should join 27 other countries that have equality guarantees for women, including Rwanda, Algeria, China and Afghanistan. “It does make a difference if an Equal Rights Amendment is in place or not,” Lee told the people who gathered outside of the Capitol on Tuesday . “Twenty-seven other countries, including Rwanda, Afghanistan, Algeria and China have equality provisions,” Lee said.
MAX KEISER ON GOLDMAN SACHS 1 OF 2
Opposition mounts for Obama's consumer plan Proponents of plan to protect consumers of financial products have called a timeout. Fed doesn't like the idea, but top Democrats are pushing hard. One of the signature proposals in the Obama administration's efforts to reshape the regulatory framework for banks has been slowed as supporters regroup in the midst of mounting opposition. The creation of a new consumer protection agency to regulate mortgages, credit cards and credit insurance was never going to be easy. But the forces trying to stop or water down the proposal have grown beyond banks and financial sector lobbyists.
Obama: "You're going to destroy my presidency." President Obama could hardly be described as insecure or lacking in self-confidence. Or could he? A report on CongressDaily this morning suggests that a recent comment by Senator Jim DeMint (R-SC) hit close to home for the president. The comment came last Friday while Senate Republicans were discussing Obama's healthcare plan. "If we're able to stop Obama on this, it will be his Waterloo. It will break him," said the senator. Now, there is speculation that that comment will hurt any chance for bipartisan support of the healthcare legislation:
Obama Approval at 87% Outside U.S.; 49% at Home Among Investors President Barack Obama has rock-star appeal among the investing class -- except in his own country. The Quarterly Bloomberg Global Poll of financial investors and analysts finds attitudes about the new president in Asia and Europe are overwhelmingly positive. In the U.S., by contrast, they are slightly negative. In Europe and Asia, 87 percent of respondents say they view Obama positively, compared with just 49 percent in the U.S. His standing among American investors is even lower on economic matters: only a quarter of U.S. poll respondents rate his economic policies as “good” or “excellent,” compared with more than half in Europe and Asia.
Sallie Mae Loss Blamed On Investment Trouble Student loan giant Sallie Mae reported a second-quarter loss of $123 million Tuesday as it continued to feel the effects of a severe recession. The loss of 32 cents a share was in contrast to a profit of 50 cents a share, or $266 million, in the corresponding period a year ago, the Reston lender said. The company, officially known as SLM Corp., attributed much of the loss to a $484 million markdown on unrealized derivative and hedging activities. Excluding one-time charges, the company's core profit was $170 million, or 31 cents a share, up from $156 million, or 27 cents a share.
Credit Card Companies Take Another Hit As AAA Bows Out When it rains, it pours. The American Arbitration Association, often the go-to arbitration forum, has voluntarily agreed to stop participating in consumer-related debt collection disputes until guidelines addressing such battles are developed. This is an immediate follow-up to the lawsuit filed last week against the National Arbitration Forum that led to it agreeing to end its oversight of disputes between credit card companies and their customers.
Wells Fargo Sinks Despite "Record" Profit Whoo-hoo, record profit at Wells Fargo (WFC). Too bad investors don't seem to care, or don't believe it. Shares of Warren Buffett's favorite bank are off over 5% pre-market, despite record net income of $3.17 billion and record revenue of $22.5 billion, helped in significant part by the acquisition of Wachovia. The company also says it expects to have a stress test cushion soon (remember, they're one of the left-behinds that aren't yet in position to repay TARP).
MAX KEISER ON GOLDMAN SACHS 2 OF 2
Street Fighting Man We live in interesting times. But we're not necessarily cursed 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.
You Must Have Health Insurance, It's The LAW The healthcare reforms we've been calling "Pelosicare" -- because they're such an incoherent hodge-podge of ideas that only the august US Congress could dream up -- is actually three separate bills, each with different variations on the same theme. The Washington Post notes one common thread though: they all will make it practically illegal to be uninsured. When you file your taxes you'll have to prove some minimum level of care (though there will be rebates, naturally, for the poor).
Obama says healthcare crucial for economy U.S. President Barack Obama said on Wednesday a broad healthcare overhaul was critical to an economic recovery and promised to push a reform package through Congress this year despite growing doubts about the plan, even among fellow Democrats. In remarks prepared for his opening statement at an evening news conference, Obama said the biggest driving force behind the federal deficit was skyrocketing healthcare costs. "If we do not control these costs, we will not be able to control our deficit," he said after another day when leaders in Congress struggled to find common ground on the cost and scope of a healthcare plan, Obama's top legislative priority.
Obama seeks new health care momentum Launches offensive against GOP critics The White House on Tuesday launched a full offensive to regain control of the health care debate, wooing conservative Democrats with promises of cost cutting and attempting to paint Republican critics as attack dogs blocking change. President Obama is scheduled to hold a prime-time news conference Wednesday, as polls suggest he is losing ground on the issue. Republicans are exploiting fears about the state of the budget and the economy to slow the momentum on Capitol Hill. Fiscally conservative Blue Dog Democrats huddled with Mr. Obama for more than an hour Tuesday at the White House and told reporters that the president promised them that the bill he signs will not expand the federal deficit over the long term.
Obama goes prime-time to pitch healthcare U.S. President Barack Obama shifts his effort to convince the American people healthcare reform is the right thing to do right now to prime time Wednesday. In an evening news conference, Obama is expected to outline the case for healthcare reform as well as provide an update on what has been accomplished since he took office in January. White House Chief of Staff Rahm Emanuel told The New York Times Obama intends to use the news conference as a "six-month report card," to talk about "how we rescued the economy from the worst recession" and the legislative agenda moving forward, including health care and energy legislation.
Reforming Health Care: Deforming Economic Health The "free lunch" lie is served If we medicate enough people, maybe no one will notice that we are destroying the one sector of the economy that is producing jobs. It would seem this must be the secret hope spinning through the minds of many politicians, as they get set to knowingly vote the nation into an economic emergency ward. Admittedly, something needs to be done. The current health-care system is a shambles. There is a solution. But it is not any of the plans currently being pushed. Nor is it the status quo. It is a real health-care revolution. Politicians are seemingly so concerned with your health that they want to require everyone to be part of a publicly funded health-care plan. Sounds great! Yet, ironically they themselves will not be victims of the new health-care plans they are forcing on everyone else. No public health care for Capitol Hill legislators; they get to keep their current government health-care plans. Doesn’t exactly inspire confidence in the new plan does it?
Why Congress is stalling Obama's health plan The $1 trillion price tag has to come from somebody's pockets -- and legislators aren't ready to confront those details. President Obama's rush to rescue his health-care plan is coming just in time, because its critics are starting to give it a bad rap. On Monday, the Republican National Committee unveiled an ad that lumps the President's health-care reform efforts with the bank and auto bailouts. As forlorn looking children stare back at the camera, a voice intones that Obama's plan is simply a "massive spending experiment" -- yet another risky, big-ticket item that will leave a burden on future generations. In short, critics say, it's all getting too expensive. Obama never promised that a lofty goal like providing affordable health care to all Americans wouldn't cost anything -- he pledged only that the reform will pay for itself, meaning it won't deepen the federal deficit.
Pelosi Says She Has Votes to Pass House Health Plan House Speaker Nancy Pelosi said she has the votes to pass legislation overhauling the U.S. health- care system as Democratic Party leaders moved closer to an agreement with rebellious members of their own party. Leaders are “making progress” with Democrats who want more cost cuts in the legislation, Pelosi told reporters in Washington today, a day after President Barack Obama met with a group of Democrats to try to convince them to back the plan. “I have no question we have the votes on the floor of the House to pass this legislation,” Pelosi said.
The Dark Years Are Here In this newsletter we will outline what is likely to be the devastating effect of the credit bubbles, government money printing and of the disastrous actions that governments are taking. Starting in the next 6 months and culminating in 2011-12 the world will experience a series of tumultuous events which will be life changing for most people in the world. But 2011-12 will not be the beginning of an upturn in the world economy but instead the start of a long period of economic, political and social upheaval that could last for a couple of decades.
Experts paint 'a worrisome picture' on jobs Some fear rising unemployment will cause economic problems to snowball Consider: Is unemployment a "leading" or a "lagging" economic indicator? Most investors who follow economic news would probably say "lagging," because that's the conventional wisdom. Companies don't restart hiring until the recession is ending, the thinking goes, so the unemployment rate tends to stay high even after the recovery begins. Bullish stock market pundits have been eager to highlight that thinking lately as the unemployment rate has jumped to 9.5 percent. Their reasoning: If you are an investor waiting for a recovery, you don't need to worry much about unemployment -- it's going to come down. In other words, don't hesitate to buy stocks now, because the job picture will sort itself out.
A city without chain grocery stores National retailers are steering clear of Detroit, leaving independent grocers to serve the city's hard-hit residents. Detroit is one of America's largest cities, but there isn't a single grocery chain store within the city limits. Spurned by national retailers, Detroit's nearly 1 million residents instead rely on independent stores run by local entrepreneurs for their most basic needs. But for those entrepreneurs, staying in business can be a struggle. Running a grocery store "requires a lot of working capital up front, and small problems early on can escalate," says Olga Stella, vice president of business development for the Detroit Economic Growth Corp., a quasi-government development agency. "It's like any small business, but it has added complications because you're selling a highly perishable product that has very little collateral."
U.S. Home Prices Have Smallest Decline in 10 Months U.S. home prices had the smallest annual drop in 10 months, signaling the free fall of property values is abating in the three-year housing slump at the center of a global recession. Prices declined 5.6 percent in May from a year earlier and rose 0.9 from April, the Federal Housing Finance Agency in Washington said today. Economists expected a 0.2 percent drop for the month, according to the median of 16 estimates in a Bloomberg survey.
Mom-and-Pop Operators Key In a Marketing Edge Three weeks after Curtis Kimball opened his crème brûlée cart in San Francisco, he noticed a stranger among the friends in line for his desserts. How had the man discovered the cart? He had read about it on Twitter. For Mr. Kimball, who conceded that he “hadn’t really understood the purpose of Twitter,” the beauty of digital word-of-mouth marketing was immediately clear. He signed up for an account and has more than 5,400 followers who wait for him to post the current location of his itinerant cart and list the flavors of the day, like lavender and orange creamsicle.
Senate kills gun amendment In an unexpected defeat for the gun lobby, the Senate on Wednesday voted narrowly to kill an amendment that would have allowed gun owners to carry concealed firearms across state lines so long as they have valid permits or permission from their state of residence to do so. Backers of the amendment, sponsored by Sen. John Thune, South Dakota Republican, received 58 votes -- two short of the 60 needed to overcome a minority filibuster and add the measure to a defense authorization bill now on the Senate floor. Thirty-nine senators voted against the amendment. The loss came despite support from a number of pro-gun-rights Democrats, including Senate Majority Leader Harry Reid of Nevada. The National Rifle Association also had said it would score the vote in its ranking of lawmakers on gun-rights issues.
US pledges to defend Gulf against Iran Hillary Clinton said on Wednesday that the US was ready to guarantee the safety of its Gulf allies against Iran and would increase pressure on North Korea, as she set out Washington’s strategy to tackle nuclear proliferation from Tehran and Pyongyang. Speaking on a visit to Thailand, the US secretary of state sought to counter recent setbacks to the Obama administration’s plans for negotiations with Iran by insisting that the US could “extend a defence umbrella over the [Gulf] region” if Tehran developed a nuclear weapon. In the face of recent missile and nuclear tests by North Korea and worries about its military and possibly nuclear links with Burma, she also argued that Pyongyang would be subjected to “unrelenting” sanctions unless it irreversibly ended its nuclear weapons programme.
U.S., Israel at odds over 2003 settlements accord Israeli officials Tuesday accused the Obama administration of failing to abide by an agreement allowing settlement construction, but a key Israeli negotiator said the deal was never implemented. The unfinished negotiation between the administrations of Israeli Prime Minister Ariel Sharon and President George W. Bush has contributed to rising tensions between the two allies since the Obama administration took office. The U.S. insists that Israel freeze settlement construction to improve the prospects for Israeli-Palestinian negotiations. Israeli officials have claimed that a 2003 understanding with the Bush administration permitted "natural growth" within settlements expected to remain under Israeli control even if a Palestinian state is created.
pt1/4 Gerald Celente on the Alex Jones Show 22 july 2009
pt2/4 Gerald Celente on the Alex Jones Show 22 july 2009
pt3/4 Gerald Celente on the Alex Jones Show 22 july 2009
pt4/4 Gerald Celente on the Alex Jones Show 22 july 2009
Fed, Treasury take heat on Capitol Hill Lawmakers demand transparency from agencies handling bailouts Two government institutions at the heart of America's financial-rescue operations took fire from both sides of the aisle Tuesday on Capitol Hill over lack of transparency and accountability. Members of a House panel blasted the Treasury Department for failing to adopt several recommendations by an independent watchdog to increase openness and public scrutiny of the massive Wall Street bailout program. "The taxpayers now have a $700 billion spending program that's being run under the philosophy of 'don't ask, don't tell,' " said House Oversight and Government Reform Committee Chairman Edolphus Towns, New York Democrat.
Ron Paul Opening Statement Fed Hearing 07/21/2009
Bernanke: Slow recovery will begin this year The Federal Reserve, which lowered its target overnight interest rate to near zero last year, expects to maintain that rate "at exceptionally low levels for an extended period," Fed Chairman Ben S. Bernanke told the House Financial Services Committee on Tuesday morning. Economic output should "increase slightly" during the second half of 2009, the Fed chairman said. "The recovery is expected to be gradual in 2010, with some acceleration in activity in 2011," he said. The Fed's latest economic forecast expects the unemployment rate to peak at the end of this year near 10 percent. However, "the projected declines in 2010 and 2011 would still leave unemployment well above" the Fed's view of the longer-run sustainable rate.
Fed Throttles Back, Having Achieved Little The stock market carved out yet another bowl-shaped formation on the intraday charts yesterday, making everyone who bought the dip a lucky winner. Stocks have swooned in four of the last five sessions and closed higher for six consecutive days, but yesterday's swoon was a little more dramatic than the others. Some attributed the selloff portion of the day to mounting concerns that President Obama's tax proposals will soak not only the "rich," but the middle class. Whatever misgivings investors may have had about this were forgotten later in the day, however, when Helicopter Ben, in testimony before Congress, promised there would be no tightening until such time as the tempo of the U.S. economy picks up significantly. This should have come as good news to monetarists, since, given the grave structural weakness of the economy, it might be another ten years before things start to pick up significantly.
Marc Faber Gold price will explode
Dollar breakdown may catapult gold to $1224 MOPE (management of perspective economics - the new economics) worked overtime to seek new lows in gold but their accomplishment has been minimal at best. Keep the following in mind:
The price of gold is all in the dollar and has been since we met. Itwill continue to be.
China is quite upset with the disrespect received and what is perceived by them to be the Western element in the recent disturbances in remote provinces and an NGO believed to be financed by the West.
The weak position of the dollar could easily be an Achilles heel.
Dollar collapse will propel gold, silver, copper prices Gold is the hottest commodity among the bullion metals. Copper is the hottest commodity in the base metals camp. But if you compare gold with copper, which is hottest? Gold or copper? Which commodity will you invest in? Is gold or copper which is shining better? . . . . . . . . Let us first look at the economic recovery. Is there really a recovery going on? Well, there is certainly a bounce from horrific levels we saw last year in almost all markets. The latest reports suggest that China has been buying up commodities and grains while prices are low. That data is correct. They have been huge buyers of both.
China gold reserves to boost bullion market The implications of China increasing its gold reserves will be positive and even if purchases are small in the context of the Asian giant's overall foreign reserves, it could still turn out to be significant for bullion market, according to Philip Klapwijk, Chairman of GFMS Ltd, In an exclusive article to American Advisor,a quarterly newsletter of Goldline International, he said that the China buying will boost sentiments in bullion market. Klapwijk discusses the significance of China's increase in its gold reserves and its potential positive effect on future gold prices at length in the article.
Seeing Future Perils, Fed Aims to Hold Down Rates The economy is finally improving, but enough potholes lie ahead that the Federal Reserve needs to keep interest rates close to zero, at least until unemployment begins to come down, the Fed's chairman, Ben S. Bernanke, told Congress on Tuesday. "On net, the past few months have seen some notable improvements," Mr. Bernanke said in his semiannual report to the House Financial Services Committee. The pace will pick up next year and accelerate in 2011, he said, but unemployment will remain high, damping down inflation for two more years.
Lawmakers Call for Tighter Reins on Bailout Program Two senior Democratic lawmakers called on the administration Tuesday to make the $700 billion bailout program more visible and accountable to taxpayers. Representative Edolphus Towns of New York, chairman of the House Oversight and Government Reform Committee, and Senator Max Baucus of Montana, who heads the Senate Finance Committee, called on the Treasury secretary Timothy F. Geithner to adopt recommendations from a government watchdog that the department has resisted. The criticism came as the oversight committee heard testimony from special inspector general Neil Barofsky, who oversees the Troubled Asset Relief Program. Mr. Barofsky delivered a quarterly report to Congress that was sharply critical of Treasury's reluctance to better track how the bailout money is being spent.
Marc Faber there will be war and Hyperinflation
M3's false signal and the Japan myth M3 is sending a false signal, again During April-June of last year we described the rapid growth in M3 money supply that was occurring at the time as a "major league false signal". We thought it was a false signal because it contrasted starkly with the performance of the monetary aggregate known as TMS (True Money Supply). Whereas TMS was suggesting that the rate of monetary inflation was relatively slow, and, therefore, that a deflation scare was a distinct possibility within the ensuing 12 months, M3 was pointing to an inflationary shock to the system.
Credit Crunch Part Deux Green Shoots Everywhere! The credit crisis is over; an economic recovery is just around the corner! Hold your horses - there may not be enough water to nourish them at the next pit stop. Hold on - isn't a bad decision supposed to turn into good policy when you back it by trillions of freshly printed U.S. dollars? Conventional wisdom suggests that when you lower interest rates, splatter lots of money onto the economy through spending programs and credit facilities, the economy will recover. There are a couple of problems with that view. For starters, given the magnitude of the credit bust the world has just seen, "conventional wisdom" may no longer hold up. But wait - we have seen nascent signs of a recovery - the touted green shoots!
The Real Solution Last week, I made the case that the level of the speculative position limit in COMEX silver was completely out of line with the level of the limits in all other commodities, including gold. I pointed out that, based upon annual production, silver had a position limit from five to more than sixty times greater than a wide variety of commodities, including gold, copper, crude oil and grains. In terms of world bullion inventories, silver's position limit was more than 100 times larger than gold's limit.
Marc Faber hold on Real Estate and Gold
Growth: Never More Needed, Never More Misunderstood What should be clear to all Americans is that the need to grow the economy has never been more critical. But what constitutes real growth and the pathway to achieve it, has never before been more confused. The need for above trend growth in GDP was made even more pressing last week when the Treasury announced that the budget deficit for fiscal 2009 breached $1.1 trillion. The excess spending over revenue for June was $94.3 billion, the first deficit for that month since 1991 (fiscal 2010 will begin on October 1st). In addition, the national debt now stands at a record $11.6 trillion with trillion dollar annual deficit projections as far as the eye can see. While we continue to pile up a record amount of debt, the revenue outlook continues to decline, as the Administration's growth projections remain overly optimistic.
Bernanke saves the dollar - for now The Fed chairman faces the tough challenge of making sure the greenback doesn't continue to weaken. But a much stronger dollar won't help either. Federal Reserve chairman Ben Bernanke has a major problem on his hands. He is doing his best to try and save the economy from slipping further into recession. But he may have to sacrifice the U.S. dollar in the process. Bernanke appeared in front of the House Financial Services Committee Tuesday as part of his semi-annual testimony to Congress about the state of the economy.
Bernanke: Economy better, but ... Fed chairman says the economy is showing signs of stabilization, but added that the housing and labor markets are still not recovering. Federal Reserve Chairman Ben Bernanke told lawmakers Tuesday that the economy has started to show signs of stabilization, although he cautioned that improvement is uncertain and likely to be gradual going forward. Bernanke also reiterated that the Fed will be able to keep inflation at bay by unwinding many of the various lending programs it has put in place to encourage banks to start lending again. But he declined to give a time frame for when the Fed might begin its so-called exit strategy.
nothing had been solved expect a Total collapse soon
When Atlas Shrugs: The Great Default Have you ever heard this argument? "The national debt is too high. We are laying an enormous burden onto our children." It is misleading. In what way? Because our children, like Atlas in Ayn Rand's novel, will shrug. They will send Congress a message: "No more." Congress always responds to immediate threats regarding future sanctions. Whenever Congress thinks the voters will remember a vote at the next election, and will probably impose negative sanctions on incumbents, Congress always sees the light. "When we feel the heat, we see the light" said Senator Everett Dirksen a generation ago. His observation still holds true. Our children are not going to pay off the suckers - us - who naïvely thought they could pass on the Old Maid of government debt to them.
Inside the Meltdown: Financial Ruin and the Race to Contain It A year ago it would have been hard to imagine a book about the Federal Reserve and Treasury Department making it onto people's must-read summer reading lists. But the financial calamities of last autumn put the global economy on the brink of disaster and led to continuing fiscal woes. Understanding what happened has become vitally important not just for bankers and economists, but for everyone affected by the fallout, which means ... well, just about everyone.
Crude Oil's Collapse Is Coming On May 14th I wrote an article called "Oil at $25 a Barrel? Pump Gas $1.50? The Time Is Coming Soon" in it I made several projections as to where I thought the oil market would go. One of those projections was for the period "Early to Mid Summer" seeing as it's just past the middle of July that puts us squarely at mid-summer; time for an update. To refresh everyone; as of May 14th this is what I had to say for prices through this time of year. Recall when reading my prior call that oil was trading just under $60 per barrel and was charging upward at a torrid pace. The run up at that time also had a gigantic tidal wave of bullish "green shoot" sentiment behind it; I said this:
Bernanke says Fed can take on supercop role Federal Reserve Chairman Ben Bernanke ran into skepticism Tuesday from lawmakers wary of expanding the Fed's duties to police big financial companies. They argued that the Fed failed to spot problems that led to the financial crisis in the first place. "The Fed has made some big mistakes," said Rep. Spencer Bachus, R-Ala., ranking member of the House Financial Services Committee. An Obama administration proposal to make the Fed the supercop of globally interconnected financial companies would be "just inviting a false sense of security that inevitably will be shattered at the expense of the taxpayer," Bachus warned.
Peter Schiff: there is no exit strategy - Vlog 21 July
Obama Stimulus Spending Includes Rental Cars, Outhouses, and 'Sediment Removal' Among the 3,266 entries in a government database detailing to-date spending under the Democrats' stimulus law are expenditures for concrete outhouses, "deli-sliced" turkey, and hotel bills. Passed in February, the American Recovery and Reinvestment Act (AARA) - also called the "stimulus package" -- was sought and signed into law by President Obama, who declared at the time, "We have begun the essential work of keeping the American dream alive in our time."
Time For A New Mortgage Plan: Debt-For-Equity Swaps Obama's mortgage modification plan has, for all intents and purposes, failed. It's too complex, there's too much resistance from banks, and there are not enough resources in place to rapidly restructure existing terms. So, what's the answer? Just let millions more homeowners default? No, says professor Luigi Zingales, of the University of Chicago's Booth School of Business. (See the video above from TechTicker). Zingales' answer is something similar to the debt restructuring that bankrupt corporations go through: debt-for-equity swaps in which not only monthly payments but actual principal owed is reduced.
US financial market bailout tab hits $4.7 trillion The federal government has devoted $4.7 trillion to help the financial sector through its crisis, a level of assistance equal to about one-third of the overall U.S. economy, a watchdog report said Monday. Under the worst of circumstances, the report said, the government's maximum exposure could total nearly $24 trillion, or $80,000 for every American. The figures are part of a tough new quarterly report to Congress from special inspector general Neil Barofsky, who accuses the Treasury Department of repeatedly failing to adopt recommendations aimed at making one component of the government financial rescue effort more accountable and transparent.
Summers Urges Banks to Lend More, Says Growth Pace 'in Doubt' White House National Economic Council Director Lawrence Summers chastised some banks that received government aid for not doing enough to reduce foreclosures, while declaring that next year's economic growth pace is "in doubt." "Prudent financial institutions will recognize that the profits they're enjoying are in part a reflection of the commitment government and the broader society have made to the financial system that has enabled them to enjoy those profits," Summers said in an interview with Bloomberg News yesterday in Washington.
Ron Paul questions Ben Bernanke on definition of inflation 07/21/2009
The Effects of Inflation To fully understand how the entire process of deficit spending and inflation affects your life, it is necessary to separate and examine the actions of the government and the actions of the Fed. As we do this, keep in mind two fundamental economic realities. First, resources are limited. Only a given quantity of goods is available at any moment. If a person spends his time doing one thing, it means he cannot be doing something else. If he spends a dollar on one item, it cannot be spent on something else. Second, individuals resist changing their occupations and businesses. They resist because change means an immediate sacrifice. To learn a skill or create a business requires an investment of time, energy, and money - in other words, capital. To change form one trade to another - for example, to change from being an engineer to being a psychologist - means that the individual must learn new skills, spend time in study and training, and then invest time in practicing. To change businesses means abandoning capital invested in old tools, facilities, and inventory. Starting over is costly.
From left field, Brazil, Canada pull money out of Treasurys Brazil and Canada were among big sellers of Treasurys in the latest month for which data is available and the previous year, catching analysts off guard and raising speculation that quieter nations may be concerned about investing in the U.S. Brazil and Russia, which along with India and China are part of the so-called BRIC countries, have expressed concern with the strength of the U.S. dollar. It was therefore not so surprising that the two countries reduced their holdings of Treasurys in May, according to the latest data available from the Treasury International Capital report released last week. The two are among the largest holders of Treasurys.
What is the Government Hiding The legislative effort to audit the Federal Reserve took an interesting, though ugly, turn last week. On Wednesday, the entire Senate was considering an appropriations bill. Sen. DeMint, R-S.C., saw that several amendments had been added to the bill for various authorizations of audits to be performed by the Government Accounting Office. So he introduced an amendment to the appropriations bill to add the bill calling for the GAO to audit the Fed (DeMint is a co-sponsor of the original "audit the Fed" bill asking for an audit). When this happened, Sen. Ben Nelson, D-Neb., objected that this violated Senate Rule 16, which prohibits legislative amendments to appropriations bills. The Senate president immediately agreed and struck this particular amendment from the appropriations bill.
Alan Grayson grills Ben Bernanke on Foreign Lending 07/21/2009
China Sells 10-Year Government Debt to Yield 3.48%, Traders Say China's finance ministry sold 26 billion yuan ($3.8 billion) of 10-year bills at an average yield of 3.48 percent, according to traders at China Citic Bank and China Construction Bank Corp. in Beijing. The highest winning bid yield was 3.51 percent, said the traders at the primary dealers who are required to bid at government debt auctions. They asked not to be identified. The average yield matched the 3.48 percent median estimate in a Bloomberg News survey. The government last sold similar- maturity debt in June at 3.09 percent. A basis point is 0.01 percentage point.
Investment bankers fleece the world Tears for fees of at least USD 720m, paid for a proposed merger between BHP Billiton and Rio Tinto, a merger that never happened. Fees of $720m were paid for a proposed merger between BHP Billiton and Rio Tinto, a merger that never happened, but was recently substantially achieved, for relatively next to nothing, with an iron ore joint venture valued at $116bn. However, little, if any, protest has been heard over the quantum of the fees paid, in this instance, for something that never happened. By now books have been written on how investment banks managed to wreck their presence on Wall Street, perhaps for good this time around, but then look at how Goldman Sachs reported revenues of $13.76bn, and net earnings of $3.44bn, for its second quarter ending 26 June 2009.
Bill Posey continues Ron Paul's questioning of Bernanke on inflation/transparency 07/21/2009
For more people, scales tip toward buying a home For Aaron Carter, a musician who was struggling to fit a drum set, a piano and three guitars into his 600-square-foot apartment in Phoenix, the math on owning a home finally began to work in his favor. Rent for the apartment he shared with his wife: $615. Mortgage payment for a home with twice the space: $760. And the interest on a mortgage is tax-deductible. So they jumped at the chance to buy some elbow room. "We figured that everything together, getting more space, getting out of the apartment life and also just the prices right now, it just was the perfect time for us as a couple" to buy, said Carter, 20.
Bernanke Gets Top Marks as Investors Say Economy Is Past Worst Global investors give Federal Reserve Chairman Ben S. Bernanke top marks for combating the worst financial crisis since the Great Depression and overwhelmingly favor his reappointment amid optimism that the world economy is on the mend. Sixty-one percent of investors surveyed in the first Quarterly Bloomberg Global Poll say the world economy is stable or improving and almost 75 percent take a favorable view of the 55-year-old chairman. By almost a three-to-one margin, they say Bernanke has earned another four-year term when his current one expires in January.
Marc Faber Expect More Stimulus Packages
Pelosi on health: Overhaul is closer House Speaker Nancy Pelosi said Tuesday she is confident Congress will advance an overhaul of the nation's health care system despite divisions within her own party and mounting opposition from outside groups over its cost. As House and Senate lawmakers wrestle with how to pay the price of covering the nation's 46 million uninsured - more than $1 trillion in the first decade - the California Democrat told USA TODAY's editorial board that the best approach is to rely on savings rather than taxes. "There's, I believe, more to be squeezed out," Pelosi said, adding that Democrats hope to bring down the costs of the bill. "Many members think that there's more to be squeezed from hospitals, pharmaceutical companies and docs."
Health Insurance Industry Spins Data in Fight Against Public Plan The industry that helped scuttle health reform 15 years ago with its "Harry and Louise" ads is back, voicing support for a central element of the Obama administration's plans: making sure everyone is covered. That does not mean the industry is backing the administration. Indeed, the leader of the insurance lobby has sent lawmakers a message: Be careful what you change, because "77 percent of Americans are satisfied with their existing health insurance coverage." Karen Ignagni, president of America's Health Insurance Plans (AHIP), invoked the statistic to argue against the creation of a government-run insurance option. But the polls are not that simple, and her assertion reveals how the industry's effort to defend its turf has led it to cherry-pick the facts.
Imperfect Health Reform Still Beats the Status Quo Among the range of options for health-care reform, there's one that is sure to raise your taxes, increase your out-of-pocket medical expenses, swell the federal deficit, leave more Americans without insurance and guarantee that wages will remain stagnant. That's the option of doing nothing, letting things continue to drift as they have for the past two decades as we continue to search in vain for the perfect plan that would let everyone have everything they want and preserve everything they already have while getting someone else to pay for it.
Obama seeks new health care momentum Launches offensive against GOP critics The White House on Tuesday launched a full offensive to regain control of the health care debate, wooing conservative Democrats with promises of cost cutting and attempting to paint Republican critics as attack dogs blocking change. President Obama is scheduled to hold a prime-time news conference Wednesday, as polls suggest he is losing ground on the issue. Republicans are exploiting fears about the state of the budget and the economy to slow the momentum on Capitol Hill.
* * * * * * watch this one * * * * * * Like Car Insurance, Health Coverage May Be Mandated A Proposed Requirement That All Americans Have Policies Has Broad Support Among Reformers President Obama's dream of dramatically remaking the nation's health-care system is still a long way from reality. But if lawmakers can reach an accord, one thing is virtually certain: For the first time ever, every American would be required to carry health insurance. The requirement, known as an individual mandate, is among the most far-reaching changes envisioned this year by those pushing for health reform. And it is one of the few common threads running through all three bills being considered in Congress, greatly increasing the likelihood it will survive the legislative process. Obama continued Tuesday to push lawmakers struggling with the massive costs and scope of health legislation to move forward, pronouncing reform to be "closer than ever."
What health reform means for you The bills are in flux, but it's time to dig in. Here's what the big idea in Washington could mean if you get insurance at work, buy it on your own, or have none at all. Lawmakers are still far from consensus on how to fix the health care system. So it's too soon to know exactly what reform would mean for individual Americans. But a picture has started to emerge from two key bills put out by Democrats in the House and Senate. A third bill is expected soon from the Senate Finance Committee. The first two bills propose:
a national insurance exchange on which insurers would compete for consumers' business;
a public health plan that would compete with private insurers on that exchange;
and subsidies for financially strapped Americans eligible to buy health insurance on the exchange.
Marc Faber Dropping Dollars from helicopters is not going to solve the problems
California lawmakers reach budget deal California may soon be able to stop printing IOUs now that Gov. Arnold Schwarzenegger and legislative leaders have agreed on a compromise plan to close the state's $26 billion shortfall without tax increases. The governor and lawmakers announced the compromise late Monday, nearly three weeks after the state began issuing pay-you-later warrants to thousands of state contractors and vendors. Many recipients had trouble finding someone to take them after several major banks stopped accepting IOUs.
New Midwestern wine region is biggest in U.S. Quick, what's America's biggest wine region? If you answered California's Napa Valley, you're way, way off, thanks to a federal ruling that creates a new one starting Wednesday. It's the Upper Mississippi River Valley, covering a whopping 29,914 square miles and encompassing portions of Minnesota, Wisconsin, Illinois and Iowa. That's 39 times the Napa Valley's puny 759 or so square miles. The new region is huge news for Midwestern vintners. "I'm really excited about it," says Paul Tabor of Tabor Home Vineyards Winery, located about 40 miles south of Dubuque, Iowa. "Wine enthusiasts really do look at the labels for an appellation, and now we can use that as part of our marketing story."
Bowing to Veto Threat, Senate Blocks Money for Warplanes With some of his political capital on the line, President Obama won a crucial victory on Tuesday when the Senate voted to strip out $1.75 billion in financing for seven more F-22 jet fighters from a military authorization bill. The president had repeatedly threatened to veto the $679.8 billion bill if it included any money for the planes. The 58-to-40 vote clearly gives the Obama administration more leeway to overhaul military spending.
Pakistan Objects to U.S. Expansion in Afghan War Pakistan is objecting to expanded American combat operations in neighboring Afghanistan, creating new fissures in the alliance with Washington at a critical juncture when thousands of new American forces are arriving in the region. Pakistani officials have told the Obama administration that the Marines fighting the Taliban in southern Afghanistan will force militants across the border into Pakistan, with the potential to further inflame the troubled province of Baluchistan, according to Pakistani intelligence officials.
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Tues 07.21.2009
Total Bailout = $23.7 TRILLION Here's a crazy stat for you. The total amount of US backstops and bailouts has reached a staggering $23.7 trillion! How do we know? Because TARP watchdog Neil Barofsky is going to say so in his fresh report, and that report was leaked to many top media outlets, like WaPo and Dow Jones. If it's available to the public, we certainly can't find it on the SIGTARP website. The last report that's up is from April, 21.
IG: Bailouts could cost taxpayers $23.7 T The government's massive bailout of Wall Street could end up costing taxpayers almost $24 trillion, says an independent watchdog. Much of the bailout's attention has focused on the Treasury Department's $700 billion Troubled Asset Relief Program, or TARP, which Congress hurriedly passed last autumn. But some 50 other federal programs that began as early as 2007 could push the government's total financial support of the private financial sector to at least $23.7 trillion, says TARP's special inspector general Neil Barofsky.
Why Gold Should Anchor a Portfolio Recently I discussed some of the reasons investors often fall short. Today I want to help bring clarity to your investment goals and also explain why gold should hold a central place in your portfolio. If you succeed in these two areas, you’ll not only prosper, you will also be prepared for the incredible changes and shocks that I believe are coming.
World financial/economic crisis may have culminated and greatest risks have been averted but it is still very far from over
US dollar continues in its multi-year downtrend
World governments are committed to issue huge volume of government debt for many years to come
Quantitative easing – debt monetization – are becoming a routine practice of the Fed
President Obama’s plans for government spending are making Bush deficits seem like child’s play
Ron Paul Questions Fed Governor Elizabeth Duke at Financial Services Hearing 7/16/09
Hyperinflation and Gold The current administration promised to produce a rather lofty number of jobs in a given period of time. To do this they were going to stimulate the economy by focusing on the antiquated infrastructure of the country, on developing alternative energy supplies, etc., but just 5 months after inauguration, the emphasis seems on what is politely called social services but the more accurate label would be welfare. Money is being thrown into every possible program out there that will produce little to nothing in terms of long term benefits and by comparison in the areas that could produce a long lasting effect hardly any money is being allocated. We are not going to list all the programs for they are constantly mentioned in the news.
Alas Poor Gold Bug Alas, poor gold bug. Things are better than a week ago. Monday’s gap is explosive. But here you sit, with gold about to break above $1000 and make you rich. Yet you are torn with fear and doubt. When you look back at this period, you will think, “Why was I so scared? I made a beautiful play. I beat the stuffings out of all my friends. Why did I have such doubts?” And therein hangs a tale, dear gold bug. Listen to the wisdom of the One-handed Economist, and you will learn a valuable lesson, a lesson which will serve you well both in the financial markets and in life. Because it is easy to observe that every powerful move in the markets is preceded by a period where the large majority of the people are supremely confident that the exact opposite is going to happen. And the social pressure put on by these fools is difficult to resist.
Schmidt's Gold Thoughts Failing economic policies of the Obama Regime are setting the stage for the next significant rally for $Gold as massive debt monetization becomes necessary. Before going into that though, we need to understand the situation with the U.S. economy. That will allow us to understand how coming Federal Reserve actions will push $Gold above $1,000. Federal Reserve policies of the past year have managed to put a floor under the U.S. economy. However, those same policies have created the conditions that could, if unchecked, create the next leg down into further recession. That policy could exacerbate the negative impact of the high tax, anti growth policies of the Obama Regime.
Gold "Attracting Investment" as Price Jumps vs. All Currencies, Physical Buying "Provides Support" THE PRICE OF GOLD rose sharply against the US Dollar on Monday morning in London, jumping 1.6% to a 6-week high at $954 an ounce as world stock markets also rose yet again. Rising for the fifth session in six, Gold initially held flat against the world's other major currencies as the Dollar fell to a new July-low vs. the Pound. The Euro hit a 7-week high at $1.4245. But the Gold Price in Sterling then rose 0.6% to reach its best level in 5 weeks above £577 an ounce. For Eurozone investors now Ready to Buy Gold, the price gained 0.8% to €669.50 an ounce – its best level so far in July.
Gold Rises as Dollar Slump, Oil Gain Spur Demand From Investors Gold climbed to a five-week high as a weaker dollar and higher oil prices boosted the metal’s appeal as an alternative investment and a hedge against inflation. Other precious metals also gained. The U.S. Dollar Index, a six-currency gauge of the greenback’s value, fell to a six-week low on speculation that European and U.S. economic reports this week will show the global recession is easing, sapping demand for a refuge from risk. Oil climbed to the highest in almost two weeks. “Gold is moving up today due to the lower U.S. dollar,” said Lannie Cohen, the president of Capitol Commodity Services Inc. in Indianapolis.
7 Myths About Gold Debunked: Bubble Warning; $600 Target? A bubble is when prices gets distorted from fundamentals by speculation, fear, market manipulation, etc; they are different from cycles which are the natural trade-off and re-adjustment of supply and demand. The difference is that bubbles pop (see here). The problem with understanding gold is that it's hard to work out the fundamentals, which explains why there are so many myths about it.
Morgan Stanley pays damages for Precious Metals Fraud I have been warning people for several months not to confuse “bullion-ETF's” with actually owning real gold and silver (see “Bullion-ETF's: a multi-purpose scam”). In the case of silver, I've pointed out that it simply isn't possible that both the silver bullion-ETF's and the massive “short” positions at the Comex could be fully-backed since the two total more than 100% of existing inventories – with nothing left over for the other 95% of the world (see “History of Silver, Part III: inventories gone!”). What is important to note is that the bullion banks with those massive, short positions are also the custodians for most of the silver (supposedly) “owned” by the bullion-ETF's.
They Can't See the Forest for the Trees! In the last three weeks a very important event took place that has been overlooked and misunderstood in the financial sector. The United States and the European Union have filed complaints against China at the World Trade Organization (WTO) on June 23 accusing Beijing of placing export restrictions on raw materials and partially processed raw materials critical to many industries. The nine materials cited by the United States are bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow phosphorus and zinc. The complaint accuses China of restricting exports, thus creating an unfair advantage by contributing to disparities in prices of these precursor materials inside and outside China. The European Union also complained that the restrictions could undercut some 4 per cent of European industrial production if the resources are no longer easily accessible from Chinese suppliers.
How a "Very Pessimistic" Ron Paul Would Fix the Economy Congressman Ron Paul is "very pessimistic" about the state of the economy, largely because - from his view - the Obama Administration "continues to do the things that created the problem in the first place." Long a proponent of small government and a staunch opponent of the Federal Reserve system, Paul's main point is that increased spending and higher deficits are not the solution to our problems, but their cause. "You can take care of people, but never with a deficit, never by expanding the spending," the Texas Republican says in this exclusive video interview, taped in the Capitol Hill Rotunda in Washington D.C. "The more we do to interfere with the correction - the longer it lasts."
Summers Says 2010 U.S. Growth Pace Is ‘Very Much in Doubt’ Lawrence Summers, director of the White House’s National Economic Council, said the U.S. economy’s growth pace next year is “very much in doubt,” and will depend on confidence levels and the flow of credit. “I don’t feel there’s a basis for predicting that income growth is going to resume in the near term,” Summers said in an interview in Washington. While the economy’s contraction will likely end in the second half, “the question is what will follow from that, and to what extent it will be self-sustaining private-sector growth. And I don’t think there are any certainties in that regard.”
Treasuries Rise as Investors Prepare for Bernanke’s Testimony Treasuries rose, pushing yields down from the highest levels in almost four weeks, amid speculation Federal Reserve Chairman Ben S. Bernanke may indicate the economy remains weak in testimony to Congress tomorrow. Ten-year note yields declined as Bernanke may outline his strategy for exiting the biggest monetary expansion in history when he delivers his semiannual economic report to Congress at 10 a.m. tomorrow in Washington. Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, said economic growth will likely be “weak.” Pacific Investment Management Co., manager of the world’s largest bond fund, said it will buy five- to 10- year Treasuries.
The Great Credit Crunch Continues Unabated It was in mid-2005 when I predicted that the homebuilders were about to start their bear market. It was in April 2006 when I first listed banks that I thought would be vulnerable to Construction and Development Loans. I even listed fifty banks that I described as dominos ready to fall. Banks peaked in March 2007, and that’s when I first said that you can’t have a bull market for stocks with a bear market in financials. It was also in March 2007 when I predicted that the US economy would be in Recession in 2008 / 2009 and that in current dollar terms GDP would be lower at the end of 2009 than at the end of 2008, which would be the first year over year decline since 1948 / 1949.
Goldman Sachs A Vampire on the Jugular of America hose at the center of power are often reticent to criticize others feeding at the same trough. It is left to those on the fringe, in this instance Rolling Stone Magazine, a reviewer of popular music, to state the ugly truth about what is happening at the center—that bank-holding company, née investment bank Goldman Sachs, engineered America’s serial bubbles in stocks, housing and commodities; and, has now profited immensely from both the bubbles and America’s subsequent collapse. That bankers at Goldman Sachs will receive record bonuses the same year millions of Americans will lose their homes and their jobs is not by coincidence. Matt Taibbi’s article explains why and how this is so. In the game of last man standing called Western democratic capitalism the winner is clearly Goldman Sachs.
GRITtv: Matt Taibbi & Michael Lux: Goldman's Coup
Dismantling the Temple The financial crisis has propelled the Federal Reserve into an excruciating political dilemma. The Fed is at the zenith of its influence, using its extraordinary powers to rescue the economy. Yet the extreme irregularity of its behavior is producing a legitimacy crisis for the central bank. The remote technocrats at the Fed who decide money and credit policy for the nation are deliberately opaque and little understood by most Americans. For the first time in generations, they are now threatened with popular rebellion.
Bernanke Outlines Fed’s Future Strategy to Rein in Money Growth Federal Reserve Chairman Ben S. Bernanke outlined policy makers’ strategy to stem inflation once they decide their emergency efforts to shore up the economy and financial markets can be scaled back. The Fed chief said, in an opinion piece in the Wall Street Journal, officials will use the interest rate on banks’ deposits with the central bank as a principal tool of preventing a surge of money growth. The Fed can supplement that tool with others, including reverse-repurchase agreements and term deposits, he added, writing a day before his semiannual monetary-policy testimony to Congress.
Bailout Overseer Says Banks Misused TARP Funds Many of the banks that got federal aid to support increased lending have instead used some of the money to make investments, repay debts or buy other banks, according to a new report from the special inspector general overseeing the government's financial rescue program. The report, which will be published Monday, surveyed 360 banks that got money through the end of January and found that 110 had invested at least some of it, that 52 had repaid debts and that 15 had used funds to buy other banks. Roughly 80 percent of respondents, or 300 banks, also said at least some of the money had supported new lending.
Subprime Brokers Back as Dubious Loan Fixers From the ninth floor of a downtown office building on Wilshire Boulevard, Jack Soussana delivered staggering numbers of mortgages to homeowners during the real estate boom, amassing a fortune. By Mr. Soussana’s own account, his customers fared less happily. He specialized in the exotic mortgages that have proved most prone to sliding into foreclosure, leaving many now scrambling to save their homes.
The coming government debt default We have always assumed that governments would surreptitiously default on their debt via inflation, but recently we've come to the conclusion that a direct default is a distinct possibility. Here's why. Under the current monetary system there is no limit to how much debt a government can take on, provided that the debt is denominated in its own currency. The reason is that the central bank stands ready, willing and able to be the bond-buyer of last resort, and the central bank's pockets are infinitely deep (there is no limit to the amount of new money that the central bank can create). As a result, if it chose to do so the government could continue to issue new bonds until the currency became worthless. At the point where the currency had lost almost all of its purchasing power the surreptitious default would essentially be complete because any debt denominated in this currency would be almost worthless.
Marc Faber Governments Should Be Fired
Is the U.S. Dollar the Fed's Next Weapon? The second anniversary of the credit crisis has arrived and, in the light of the plethora of fiscal and monetary policy initiatives, it makes for interesting reading to reflect upon how the U.S. economic landscape has changed since the start of the crunch.
Fed funds rate: down from 5.25% to zero
Fiscal deficit: up from 2% to 13%
Mortgage rates: down from 6.5% to 4.7%
Home affordability: 70% improvement
Fed’s balance sheet: up from $850 billion to $2 trillion
Dollar Falls to Six-Week Low as CIT Prospects Boost Risk Demand The dollar dropped to a six-week low against the euro while the yen slid after stocks gained amid speculation CIT Group Inc. will avoid bankruptcy, encouraging higher-yield demand. New Zealand’s dollar climbed versus its U.S. counterpart to the strongest level since June 2 and the Canadian currency advanced after commodity prices rose. The pound climbed the most in more than a week as a report showed asking prices for U.K. homes increased this month. “People are looking for risk assets, not with a lot of conviction, but with equities there is some appetite,” said Brian Kim, a foreign-exchange strategist in Stamford, Connecticut, at UBS AG, the world’s second-largest currency trader. “They’re leaning away from safe havens, and the dollar and yen kind of suffered.”
Little banks shared risk, take big hit In late 2007, a small bank in Winder made a big bet on the real estate market 2,000 miles away in the Arizona desert. The lender, Peoples Bank, put together a $100 million loan for an Atlanta developer who planned to convert 5,600 acres of scrub brush an hour from Phoenix into a massive residential community. The loan was too big for Peoples to shoulder alone, so the bank pulled more than 60 other lenders, about half from Georgia, into a complex deal to share the business.
Obama Helps Banksters Loot American Economy There is no economy left to recover. The US manufacturing economy was lost to offshoring and free trade ideology. It was replaced by a mythical "New Economy." The "New Economy" was based on services. Its artificial life was fed by the Federal Reserve's artificially low interest rates, which produced a real estate bubble, and by "free market" financial deregulation, which unleashed financial gangsters to new heights of debt leverage and fraudulent financial products. The real economy was traded away for a make-believe economy. When the make-believe economy collapsed, Americans' wealth in their real estate, pensions, and savings collapsed dramatically while their jobs disappeared.
FDIC takes over Vineyard Bank and Temecula Valley Bank The failed Southern California banks will reopen today under new owners. Two failed Southern California banks will reopen today under new owners, after the Federal Deposit Insurance Corp. took control of them late Friday. Vineyard Bank of Corona, which has 16 branches, was sold to California Bank & Trust of San Diego, the FDIC said. Separately, Temecula Valley Bank of Temecula and its 11 branches were sold to First Citizens Bank and Trust of Raleigh, N.C. Both Vineyard and Temecula Valley have been careening toward collapse for the last year amid huge losses on loans related to real estate.
St. Regis Monarch Beach seized by Citigroup The St. Regis Monarch Beach, the Orange County luxury resort where American International Group Inc. sponsored a luxury retreat just days after accepting a federal bailout, has been seized by Citigroup Inc. The hotel will continue to operate as a St. Regis. "The acquisition will have no impact on the hotel, golf club or beach club," Citigroup said today. "Starwood's St. Regis brand will continue to be responsible for the day-to-day management of the properties." Citigroup's takeover is a sign of how deeply troubled the upscale lodging industry is now, said consultant Alan Reay of Atlas Hospitality Group. High-end hotels across the country have been hammered by a cutback in business and leisure travel.
It doesn’t pay to fall asleep in a recovery The vast majority of retail investors have “fallen asleep” on the broad market recovery since March. The sleepy character of market psychology has become even more pronounced in just the last few weeks as the market spent some time consolidating its gains. In that period of time we’ve seen quite a few analysts turn bearish on the market, which is usually a big mistake in a year when the dominant yearly Kress cycle is up.
Bear’s Beware At the risk of sounding a little crazy in knowing the fundamentals are indeed ‘that bad’, this is a cautionary note to those who are short stocks to expect volatility moving forward, but not the kind you are hoping for. And hey, the technicals in the markets are no hell either. In this regard, quite simply, there’s no buying power to legitimately send stocks higher on a lasting basis. To go along with this, the S&P 500 (SPX) is sporting a head and shoulders pattern measuring down to approximately 810. Again though; and in spite of this, if history is a good guide stocks will never get there within the present sequence.
Roubini: We Won't Test The March Lows Fresh after a mini-"I was misquoted scandal" last week, Dr. Doom, Nouriel Roubini just appeared on CNBC to discuss his market and economic outlook. Warning: It's a little conviction-less, a la Meredith Whitney, though not quite as bad. He says the worst is behind us in terms of the crisis, though not necessarily the economy. It's not going to be a V-shaped recovery, but it won't be an L-shaped depression. Instead, look for a long, slow, ever-so-slightly-upward slog.
Goldman: Get Ready For A MONSTER Second-Half Rally Strap in your seatbelts, folks. The second half of this year is going to be killer, says the strategists at Goldman Sachs (GS). Bloomberg: Goldman Sachs Group Inc. boosted its forecast for the Standard & Poor 500 Index, saying improving earnings will spur the steepest second-half rally since 1982.
Peter Schiff on CNBC talking about the stock market rally 17 July 2009
S&P 500 to Rally Most Since 1982, Goldman Sachs Says Goldman Sachs Group Inc. boosted its forecast for the Standard & Poor 500 Index, saying improving earnings will spur the steepest second-half rally since 1982. The benchmark index for U.S. stocks will advance 15 percent from its June 30 level to 1,060 on Dec. 31, an increase from David Kostin’s prior projection of 940. The chief U.S. investment strategist at New York-based Goldman Sachs also lifted his 2009 and 2010 earnings estimates for S&P 500 companies to $52 and $75 a share, which are 30 percent and 19 percent higher than prior estimates.
Frank: I'm Not to Blame for Housing Bubble Who's to blame for the subprime housing bubble? A popular answer - especially on the right side of the aisle - is Massachusetts Democrat, Barney Frank. Why? The argument, best summed up in an Investor's Business Daily editorial published in March 2009, goes like this: "Starting in the early 1990s," Rep. Barney Frank "(and other Democrats) stood athwart efforts by regulators, Congress and the White House to get the runaway housing market under control." It goes on to say in, "2002, Frank nixed reforms" of Fannie Mae and Freddie Mac and that in 2003, "led by Frank, Democrats stood as a bloc against any changes" that President Bush proposed making to Fannie and Freddie. Is it true? Frank doesn't think so.
"The Fed Will Be a Less Powerful Institution," Rep. Barney Frank Says Ben Bernanke delivers his semi-annual report on the economy Tuesday in an atmosphere of intense political debate over the fate of the central bank. One man at the center of the discussion, Congressman Barney Frank, chairman of the House Financial Services Committee, is an advocate of less power for the Fed, not more. "The Fed will be a less powerful institution" when all is said and done, Frank says in the accompanying video exclusive, taped last week in Washington D.C.
Making the (tough) case for free markets Deregulation suddenly looks like a mistake. But Brink Lindsey, one of Washington's sharpest market advocates, says liberals wouldn't really want a return to the past. After three decades of dominating the political conversation, free-market thinking is out of style. The new conventional wisdom: It's time to go back to the pre-Reagan era of strong government and secure jobs. But Brink Lindsey of the libertarian Cato Institute (a think tank that provided a lot of the intellectual ammunition for deregulation) wants you to know that the good old days weren't as good as you might think.
Commercial brokers are swimming in empty space In a distressed market, the stakes are higher and deals are more elusive. Real estate broker Carl Muhlstein maneuvered his silver BMW convertible through downtown Los Angeles traffic, one hand steering the car and the other pressing a cellphone to his ear. "Come on," he teased. "Insult me with an offer." While some who swim the deep and often lucrative waters of commercial real estate have retreated to the golf course, Muhlstein is among those pushing on -- joking, nudging and networking in hopes of making deals in a time of no deals.
The commercial real estate time bomb There’s a new main character moving to center stage in the great real estate meltdown. Underwater homeowners vying to refinance or score a loan modification have grabbed much of the headlines (and bailout attention) to date. But now commercial real estate is moving into the spotlight as the next potential body slam for the economy. Last week The Washington Post reported that the U.S. Treasury department has begun to contemplate what can muck things up for the economy and the recovery beyond what is currently being bailed out. This effort has come to be known as Plan C. As in, “Yikes, Plan B might not do the trick, so what do we need to focus on next?”
New federal rules protecting applicants for home loans take effect July 30 The Federal Reserve regulations require lenders to provide consumers with initial disclosures of their mortgage costs within three business days of their loan applications, among other changes. If you're applying for a loan to buy a primary or secondary home, or planning to refinance, you should be aware of a little-publicized set of federal consumer-protection rules that take effect July 30. Among other key changes, the new Federal Reserve regulations require lenders to provide you with initial disclosures of your estimated mortgage costs within three business days of your loan application. If you don't get them, you can pull the plug.
Obama Pushes Senate as Health-Care Focus Turns to Finance Panel President Barack Obama, who has won three legislative victories in his bid to overhaul the U.S. health-care system, is now ramping up pressure on the congressional panel that may matter the most. The Senate Finance Committee, which is seeking a bipartisan compromise, has failed to reach an agreement even as two House committees and a Senate panel cleared their versions of the legislation with only Democratic approval. Chairman Max Baucus said a deal will come this week at the earliest, a month after he had planned to finish a draft and get a panel vote.
Dr. Ron Paul: Healthcare Is Not A Right! Ron Paul's solution to the healthcare crisis, not surprisingly, is to get the government out of healthcare altogether. We agree wholeheartedly with one part of that: Funding healthcare shouldn't be an employers' problem. Employer-provided healthcare is an outgrowth of mid-century wage controls. Whatever we do, we should get the burden off the country's companies. The proposals on the table, of course, will do exactly the opposite, fining companies that don't provide healthcare. Ron Paul thinks the proposal will cost $2-$3 trillion.
Dodd on Why Health Care Bill Allows Federal Funding of Abortion: ‘We Like the Idea That People Have Choices’ The Senate version of health care reform, which passed in committee on a 13-10 party-line vote last Wednesday, would effectively mandate federal funding of abortion through various insurance coverage mechanisms included in the bill. When asked about the fact that the bill will allow federal funding of abortion, Sen. Christopher Dodd (D-Conn.) told CNSNews.com, “I think we handled the issue well.
RNC chairman: Obama's health care is socialism The chairman of the Republican Party on Monday called President Barack Obama's plan to overhaul health care "socialism," accusing the president of conducting a risky experiment that will hurt the economy and force millions to drop their current coverage. Michael Steele, in remarks at the National Press Club, also said the president, House Speaker Nancy Pelosi and key congressional committee chairmen are part of a "cabal" that wants to implement government-run health care.
On health care, Blue Dogs may wag tails The conservative Blue Dog Democrats were top dog in the House's negotiations of health care legislation Monday, but past revolts by this pivotal voting bloc usually ended with members bowing to the party's liberal leadership. The Blue Dogs, who hold enough seats on the Energy and Commerce Committee to kill the bill this week, spent the day in closed-door negotiations with Democratic leaders and pressed demands for more cost controls and greater protections for small businesses and rural areas.
Paying for health care: Wealth tax is 'legitimate More work is needed on proposed health care reform legislation to ensure that whatever bill eventually gets passed by Congress is budget neutral, Health and Human Services Secretary Kathleen Sebelius said Sunday. Appearing on the NBC program "Meet the Press," Sebelius said an additional tax on wealthy Americans is "a legitimate way to go forward." She noted the tax surcharge provision in a House proposal was one of several options under discussion to help pay for overhauling the nation's ailing health system. A final bill "will be paid for -- it will not add to the deficit," Sebelius said of health care reform, which is currently President Barack Obama's top domestic priority.
Look Out, Are You About to Join the White Underclass? "We're starting to hear a little discussion about the white underclass... Mainly because so many middle class folks are terrified of falling into it." "White underclass" is a term I've used often in my writing, and most American readers seem to know what I mean. They've got eyes and live in the same nation I do. But in a sudden burst of journalistic responsibility, I decided that if I am going to throw around the word underclass, then I should offer some clearer, perhaps more scientific definition.
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Mon 07.20.2009
Currency Crisis - The Yuan to go Global and soon! Gold will Rise! Suddenly the pressure from China to change the world's monetary order is pressing. At the G-8 China asked for the forum to debate proposals for a new global reserve currency! They were largely ignored! China's rising presence in the global economy [$2 trillion reserves now] and the threatening weakness of the $ is prompting China to act in this way and with speed. Not only the Chinese but the French, Finance Minister and Central Bank President called for greater currency stability and a system to avoid piling up currency reserves as we see with the $. It is clear that more and more countries are objecting to the debasement of the U.S. $ through Trade deficits and Quantitative Easing.
Home Resales, Leading Index Probably Rose Gold advanced on rising demand for the precious metal as a hedge against inflation after U.S. housing starts increased in June, adding to signs the world's biggest economy is stabilizing. Silver also gained. Home-building starts rose 3.6 percent to an annual rate of 582,000, the highest since November, the Commerce Department said today in Washington. Building permits, a sign of future construction, jumped the most in a year. Crude-oil futures, used by some investors as an inflation indicator, advanced. Some investors use gold as a store of value.
'Gold is the only safe haven commodity' Many people are talking about oncoming inflation and even hyperinflation, but in my opinion there's no chance of either for at least a couple of years. The reason is that a huge amount of deleveraging remains. Whenever we see the dollar and the yen climb and all other currencies fall, that is a symptom of the need for dollars and yen to deleverage. So much was borrowed in the first decade of this century-and it was borrowed in dollars and yen. Of course, when the dollar is strong, commentators say it's a safe haven. That's total nonsense. I'm not sure there is a safe haven now except perhaps in gold.
Supply Side Economics How Is Gold Going to Fare This Year? Gold started the summer doldrums looking strong and has retreated since, but what are its prospects for the rest of the year and beyond? That will largely be determined by the interplay between supply and demand; let's take a look at the supply side. Reports of dwindling supply are accurate in some areas; however, the story is not that simple. Unlike most metals that are consumed in industrial use, most of the gold ever mined is still around. Gold is forever. Thus newly mined, refined, and fabricated gold is not all that's entering the marketplace; there are multiple ways of meeting demand. Here's a look at each.
Swiss banks have no space left for gold! Do you know what is the immediate impact of the gold rush on Swiss banks? They are running out of space to store the world's gold! According to a website report, Swiss banks have no more secure storage space for gold bullion held by investors and institutions. Swiss news website 20 Minute Online said fears of hyperinflation, the economic downturn and the success of gold index funds (ETFs), which are supported by physical gold, has led to a run on precious metals investment - and in gold in particular, and in the necessary secure storage space in which to hold it.
The Gold Stocks Are Still Undervalued Even after a massive recovery with sustained gains the gold stocks are still significantly undervalued. At the major highs of Gold $1030/oz and HUI 520, the costs to these companies were very high. Oil was high, steel was high and because of general inflation most costs were escalating. Now we have Gold 940, and HUI 350, but Oil and Steel are much lower. Also the local price of Gold everywhere except in the US and Japan is higher than at the peak in March 2008. If you mine in Canada, you care about the price of Gold in Canadian Dollars, not the regular quoted Gold price. That is because most of your costs are in Canadian Dollars.
Gold plays truant again! Where will gold prices head for? That is the billion dollar question haunting investors now. With contradicting signals emerging from various markets across the globe, analysts are caught in a spot with their predictions going haywire. Take the case of Asian markets and London, the price of gold this week reversed slight losses, rising to see a slight gain at $939.85 at the start of New York trade. Gold price then fell to see a $6.75 loss at $932.65, but it rallied back into the close and ended with a loss of just 0.4 per cent. The gold price in Euros fell to €663.
Silver - The Metal of Hope Recently I was asked to do an interview with Philip Judge of The Anglo Far-East Company. After the interview was completed, Mr. Judge sent our interview out with a short story called "THE METAL OF HOPE." His missive begins, "In history, gold alone has been the money of Kings. However, throughout most of recorded time there has been a metal far more important to the average man than gold. In the ancient of days it was silver alone that could provide the means for a slave to save and eventually purchase his freedom, which is why silver became referred to as the Metal of Hope.
Fiscal ruin of the Western world beckons For a glimpse of what awaits Britain, Europe, and America as budget deficits spiral to war-time levels, look at what is happening to the Irish welfare state. Events have already forced Premier Brian Cowen to carry out the harshest assault yet seen on the public services of a modern Western state. He has passed two emergency budgets to stop the deficit soaring to 15pc of GDP. They have not been enough. The expert An Bord Snip report said last week that Dublin must cut deeper, or risk a disastrous debt compound trap. A further 17,000 state jobs must go (equal to 1.25m in the US), though unemployment is already 12pc and heading for 16pc next year.
Max Keiser takes offense to Goldman Sachs story (pt1 of 2)
Pimco’s Gross Reduces Mortgage Holdings, Adds to Cash Position Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., reduced holdings of mortgage debt last month and trimmed his bet against cash and equivalent securities. Gross cut the $161 billion Total Return Fund’s investment in mortgage bonds to 54 percent of assets, the least in almost two years, from 61 percent in May, according to Pimco’s Web site. Cash comprised negative 6 percent, the most in 2009, rising from negative 14 percent.
Failure to Tax Taxes don't cover spending, so we're heading toward financial collapse-- that's simple arithmetic. It's political suicide to suggest increasing taxes. Every election we hear mobs chanting: "NO NEW TAXES!" But those same people are in favor of balancing the budget. The problem is that income taxes reallocate wealth, and taxpayers scream when it is their activity that gets hit with a tax increase. Instead of trying to get approval for a tax on income from activity X or Y (and bring out the lobbyists), why not apply a NEUTRAL tax that AUTOMATICALLY comes into play to mop up the effects on the money supply of government spending that has already occurred? All the lobbying (and delays) should be on the spending side, so that the taxing can be automatic.
TARP Inspector Urges Treasury to Track Banks' Aid More Closely Treasury Secretary Timothy Geithner should press banks for more information on how they use the more than $200 billion the government has pumped into U.S. financial institutions, according to a new oversight report. When queried, banks are able to explain where the money goes in their businesses, said the report from Neil Barofsky, special inspector general of the Troubled Asset Relief Program, which covers a survey of the banks collected in March.
All Businesses Should Be Lucky Enough To Be Big Banks! The half-dozen or so banks that became too big to fail have had it good. They received $billions in taxpayer bailout money and loan guarantees, were hand-fed lucrative deals to take over the choicest parts of less fortunate competitors, were allowed to exchange some of the toxic waste assets on their books with the Fed for Treasury bonds, and have been able to hire the best of the many newly unemployed bankers and traders.
Re-pricing On Chinese Yuan - Bloomberg
Obama's Stimulus Plan Slow to Trickle Through Economy The debate over whether the $787 billion stimulus package is sufficiently large or efficiently designed obscures a broader question, some economists say: Can any fiscal measure pull the economy out of the recession? With credit still crimped and the outlook for consumer demand gloomy due to rising unemployment and increased personal saving, no amount of government intervention will be able to stanch the hemorrhaging of jobs and quickly ease the U.S. out of its deepest recession in a half-century, they said.
Banks with bailout funds say loans rise More than 80 percent of the U.S. banks that received federal bailout funds said the money had helped them increase lending or avoid a drop in lending as the recession worsened earlier this year, according to a new survey released on Sunday. The survey by the Special Inspector General for the U.S. Treasury's $700 billion Troubled Asset Relief Program (TARP) found nearly 40 percent of the 360 banks surveyed had used some of the funds to build up capital cushions to absorb unanticipated losses.
China's Rebound Carries U.S., Asia Toward Recovery China's economic comeback is under way, towing along companies from Intel Corp. to Hyundai Motor Co. and starting to make up for weak demand in other major economies. The world's third-largest economy grew 7.9 percent in the second quarter from a year earlier after expanding at the slowest pace in almost a decade in the previous three months, the statistics bureau said yesterday. The first acceleration in growth in more than two years came after the government implemented a 4 trillion yuan ($585 billion) stimulus plan and prodded banks to lend more.
Marina Kalashnikova's Warning to the West Meet Marina Kalashnikova: a Moscow-based historian, researcher and journalist. Last August she criticized foreign "experts" for suggesting that a conflict with Moscow will not happen because Russia's elite is too closely associated with the West. According to Kalashnikova, "The West does not care to wake from the dream of its wishful thinking, even when Moscow turns to … reanimating Stalin's cult of personality together with the ideology of the Cheka [i.e., the secret police]."
Dollar, Yen Fall Most Since May on Economic Outlook, Earnings The dollar and the yen posted the biggest declines against the euro since May as corporate earnings topped forecasts and U.S. reports showing gains in housing and a slower decline in industrial production. The Canadian dollar advanced to a one-month high against the greenback as crude oil rebounded. The Mexican peso had the biggest gain in two months this week after policy makers said yesterday that they will "pause" after cutting the overnight interest rate a quarter percentage point to 4.5 percent.
Peter Schiff on CNBC talking about the stock market rally
Is The IMF Becoming A Bad Bank? Brazil's, Russia's, India's and China's (BRIC) intention to buy IMF issued bonds raises several questions. The publicly announced plan states that the BRIC countries will buy the first-ever IMF issued bonds, which will be denominated in Special Drawing Rights (SDR). The plan's objective, as suggested by the IMF, is to increase the IMF's funds in order to allow it to lend greater amounts of capital to countries during times of distress while also giving the BRIC countries a greater voice within the IMF. Another aspect of the IMF bond issuance is the BRIC's possible intent to use the IMF as a bad bank to hold toxic assets that financial markets cannot absorb, specifically, US Treasury Bonds.
Bank of America credit losses soar, profit falls Bank of America Corp, the largest U.S. bank, posted a quarterly profit that topped Wall Street forecasts but warned of a fresh surge in soured loans to credit card, mortgage and business customers. Soaring credit losses may add to pressure on Chief Executive Kenneth Lewis as the U.S. Congress and regulators ramp up scrutiny of the bank's ability to manage risk and its controversial purchase of Merrill Lynch & Co, and that tough economic conditions could hurt results into 2010.
BREAKDOWN BECOMES BEAR TRAP Last week I presented an alternate scenario to the head and shoulders breakdown and projected decline: "While the bearish case seems strongest at this point, a bullish outcome is not impossible. Bullish forces have weakened, but it is not at all clear that the bear market has resumed. A more positive analysis of the situation could be that there has been a two-month rally from the March lows, followed by a two-month correction/consolidation. The neckline violation could be the end of the correction and a bear trap. I present this outcome because I have seen it happen before, and it is not yet out of reach; however, I don't think it is likely." Well, I didn't think it was likely, but that is what happened. I don't feel too bad about that because our Thrust/Trend Model is still on a medium-term buy signal, proving once again that the timing model is smarter than I am. But being wrong can also impart useful information. Since the bearish formation ultimately resolved in a bullish direction, we can assume that bullish forces are in command, and that the rally will continue.
Banks use Tarp funds to boost lending A large majority of US banks claim that government bail-out money has allowed them to write new loans to customers, while a minority has used it to buy rivals, according to a report by the programme's watchdog. The audit by Neil Barofsky, special inspector-general for the troubled asset relief programme (Sigtarp), reveals a continuing argument with the US Treasury over how much information should be disclosed by recipients of the money. Some 83 per cent of the 360 recipients surveyed by the Sigtarp team said that they had used funds from the government for lending. That may provide a boost to both the banks and the Treasury after a week in which Goldman Sachs, one former recipient of Tarp funds, was criticised for preparing to pay large bonuses.
What is 'Fractional Banking'? It became evident to goldsmiths two and a half thousand years ago that the owners of the gold they were paid to keep in their vaults very seldom even looked at it let alone came after it. So goldsmiths became bankers in the sense that they lent money out - at interest, the money being letters of credit to the effect that the bearers of the credit notes did have that gold in the vault.
Max Keiser takes offense to Goldman Sachs oligarchy (pt2 of 2)
Paulson harshly criticized by House committee for role in market meltdown Former Treasury Secretary Henry M. Paulson sat uncomfortably before a congressional committee not just as a key figure in the Bank of America Corp.-Merrill Lynch & Co. imbroglio, but also as the embodiment of the bailouts of last fall. Appearing on Capitol Hill for the first time since leaving office in January, Paulson's tall frame quickly turned into a lightning rod. Democrats and Republicans fired bolts of criticism for more than three hours Thursday, accusing him of such offenses as misleading Congress about the use of the $700-billion bailout fund and going skiing at one point during the crisis.
Paulson reveals US concerns of breakdown in law and order The Bush administration and Congress discussed the possibility of a breakdown in law and order and the logistics of feeding US citizens if commerce and banking collapsed as a result of last autumn's financial panic, it was disclosed yesterday. Making his first appearance on Capitol Hill since leaving office, the former Treasury secretary Hank Paulson said it was important at the time not to reveal the extent of officials' concerns, for fear it would "terrify the American people and lead to an even bigger problem".
The "Beat the Market" Fallacy During long bull markets, a myth develops that a money manager's goal is to match or beat some benchmark for a market that is rising. This judgment bias explains why investors in recent years came to believe that a proper benchmark against which to judge money managers was the gain or loss recorded by the S&P index. Although "beating the S&P" became a popular basis upon which to judge performance, it is bogus.
---- A MUST Read! --- The Big Inflationist Scare Yes, the bankers are terrified, not just in the US but globally. However, Gary's hypothesis "the Federal Reserve can re-ignite monetary inflation at any time by charging banks a fee to keep excess reserves with the FED", is just that, a hypothesis, and I believe a very poor one at that. Bernanke's idea to pay interest on reserves will slowly recapitalize banks over time. This is why he desperately wanted to do so. To suggest he is about to charge interest on deposits is silly. The key fact now is there are not enough credit worthy customers for banks to want to lend, or for that matter willing borrowers looking to expand debt. Thus, if banks had to pay interest on reserves, rather than causing mass inflation, the Fed would cause mass panic.
America's Sick - Part 2 In my first article "America's Sick - Part I" I wrote about the health care reform bill being proposed by Barack Obama. Through that writing I touched on the problems facing the United States health care system. I also discussed the government's proposed solutions to those problems. In Part II of this article I will layout the solutions that would actually fix our issues and will discuss a more prudent way to move US health care forward.
pt 1/2 Gerald Celente the greatest depression of 2012
Home Resales, Leading Index Probably Rose Home resales in the U.S. probably rose in June and a gauge of the economic outlook improved, signaling the recession may soon be over, economists said before reports this week. Purchases of previously owned homes climbed to an annual rate of 4.83 million, the highest level since October, according to the median of 57 estimates in a Bloomberg survey before the National Association of Realtors' report on July 23. Figures tomorrow may show the index of leading indicators climbed for a third consecutive month.
Meyer Sees No Return to 'Full' Employment Until 2015 The U.S. won't see a return to "full" employment for another six years, helping to hold down inflation, according to former Federal Reserve Governor Laurence Meyer. "I think there's going to be a long legacy of the financial crisis and the deep recession," Meyer said in an interview today on Bloomberg Radio. Meyer, who served at the Fed from 1996 to 2002, is vice chairman of St. Louis-based Macroeconomic Advisers LLC.
Recession Lesson: Share and Swap Replaces Grab and Buy The recession is reminding Americans of a lesson they first learned in childhood: Share and share alike. They are sharing or swapping tools and books, cars and handbags, time and talent. The renewed desire to share shows up in a variety of statistics: A car-sharing service has had a 70 percent membership increase since the recession set in. Governments are putting bikes on the street for public use. How-to-swap Web sites are proliferating.
CIT LIVES CIT (CIT) has reached an agreement with lenders to stave of bankruptcy, reports WSJ. The company will get a $3 billion lifeline, allowing it to restructure outside of court. No word yet on whether shareholders will be left with anything more than a couple pennies. WSJ: The final term sheet still needs to be reviewed by the various financial and legal advisers, said the people familiar with the matter. And there is the chance that a final deal could falter over last-minute negotiations.
The Politics of Stinginess Stimulus Arithmetic When her husband was in the oval office Laura Bush launched an initiative to promote literacy across the country. Unfortunately, there was no comparable effort to promote numeracy in our nation’s capital. This has been evident in the discussion of the stimulus among politicians and commentators in the week since the June job numbers were released. Republicans were anxious to pronounce the stimulus a failure, while Democrats insisted that the package just needed more time, pointing out that most of the money had not yet been spent. Neither assertion can withstand the test of third grade arithmetic.
pt 2/2 Gerald Celente the greatest depression of 2012
Video game industry sales sink 31% in June The recession is hammering the video game industry. Marking the sector's fourth consecutive monthly decline, sales of video games and consoles in the U.S. fell 31% last month to $1.2 billion, down from $1.7 billion in June 2008, according to a report released Thursday from market research firm NPD Group Inc. It was the largest monthly decline since September 2000, when industry sales slumped 41%, said NPD analyst Anita Frazier. "This level of decline is certainly going to cause some pain and reflection in the industry," Frazier said.
Back-to-school sales: Shoppers truant? Stores use deep discounts to tempt tight budgets Back-to-school shopping this year means back-to-the-closet for many consumers. More than a third of shoppers say they will slash budgets for the upcoming school year by "making do with last year's school items" -- one of the trends that is expected to reduce retail spending for the season by 7.7 percent, according to the National Retail Federation.
Prescription for Disaster by Peter Schiff The health care bill unveiled this week by the House of Representatives (with the full support of the Obama administration) is one of the worst pieces of legislation ever drafted. If passed, it will reduce the quality and increase the cost of health care in America. But more importantly, it will severely undermine our already weak economy. To burden a country currently in the throes of a violent recession with such a bureaucratic albatross clearly illustrates the scarcity of economic intelligence in Washington.
It's Not An Option Congress: It didn't take long to run into an "uh-oh" moment when reading the House's "health care for all Americans" bill. Right there on Page 16 is a provision making individual private medical insurance illegal. When we first saw the paragraph Tuesday, just after the 1,018-page document was released, we thought we surely must be misreading it. So we sought help from the House Ways and Means Committee. It turns out we were right: The provision would indeed outlaw individual private coverage. Under the Orwellian header of "Protecting The Choice To Keep Current Coverage," the "Limitation On New Enrollment" section of the bill clearly states:
Obama to Congress: 'Seize' health care chance President Obama told the nation Saturday that his health care overhaul is financially sound and Congress should not squander the chance to make meaningful change. Republicans didn't relent in their criticism of his plan as a costly burden unwisely on a fast track. For a sixth straight day, Mr. Obama sought to keep the focus on his chief domestic priority in the face of mounting resistance on Capitol Hill, including conservative Democrats. White House officials are worried they face a tougher road to passage than anticipated.
White House stands by August goal for healthcare The White House budget director on Sunday accused opponents in Congress of trying to kill off plans to overhaul U.S. healthcare but predicted each house would pass a bill in the next two to three weeks. "There are those who are advocating delay just as a desperation move to try to kill this," director Peter Orszag said on CNN's State of the Union on Sunday. Asked on FOX News Sunday whether the House of Representatives and Senate would meet a target and pass a bill before the August recess, he said, "I think the chances are high."
Orszag Says Opponents Try to Delay Health-Care Bill White House Budget Director Peter Orszag said opponents of overhauling the U.S. health-care system are trying to run out the clock and that the White House still wants Congress to produce legislation by August. "We need to get this done," Orszag said on CNN's "State of the Union" program. "We want to get it done by August." Orszag's comments underscored the mounting tensions between President Barack Obama and many lawmakers of both parties over his deadline for each house of Congress to pass its version of health-care legislation before leaving early next month for a month long summer recess.
Health care plan a work in progress Administration officials defended President Obama's broad health care proposals on Sunday and urged a skeptical public not to judge the Democrats' overhaul until Congress writes a final version. Facing independent budget predictions that contradict the White House's rhetoric, officials sought to refute Republican objections to massive changes in how Americans receive health care. They emphasized that Congress has not yet settled on an outline for health care legislation and reiterated Mr. Obama's desire for a bipartisan approach.
Paying for health care: Wealth tax is 'legitimate' Health and Human Services Secretary Kathleen Sebelius said Sunday that higher taxes was one possibility for paying for an expansion of coverage. More work is needed on proposed health care reform legislation to ensure that whatever bill eventually gets passed by Congress is budget neutral, Health and Human Services Secretary Kathleen Sebelius said Sunday. Appearing on the NBC program "Meet the Press," Sebelius said an additional tax on wealthy Americans is "a legitimate way to go forward." She noted the tax surcharge provision in a House proposal was one of several options under discussion to help pay for overhauling the nation's ailing health system.
As Detroit Crumbles, China Emerges as Auto Epicenter America's auto titans are dismantling their global empires. But across the Pacific, it's as if the global economic forces that have pummeled Detroit never struck. Chinese auto sales are up, and this year China is projected to displace Japan as the world's largest car producer. Now, the auto world is buzzing that China's auto industry may try to pick up the pieces of Detroit -- at a bargain.
House Passes Bill to Make GM, Chrysler Rehire Dealers The U.S. House approved a plan, opposed by President Barack Obama, that seeks to force General Motors Co. and Chrysler Group LLC to restore agreements with dealerships shed during the automakers' bankruptcy proceedings. The provision, part of a spending bill that passed 219 to 208 yesterday, would require the automakers to restore franchise agreements with thousands of dealers as a condition of receiving federal aid. Lawmakers said the companies terminated dealerships with little notice or explanation.
You Call That a Clunker? Even a Classic Might Qualify for Federal Program Washington's wordsmiths are at it again. A new federal program seems to have changed the very definition of the word "clunker." A vote, a stroke of the pen, a desire to get Americans buying cars and a mandate to shrink greenhouse gas emissions have turned a fleet of old Audis, BMWs, Acuras and other luxury cars into clunkers overnight. The Consumer Assistance to Recycle and Save Act of 2009 -- also known as "Cash for Clunkers" -- will offer vouchers of up to $4,500 for car owners who trade in their old fuel-slurping cars for new models that can really stretch a tank of gas.
Will feds use new power to dictate what you drive? Senator's take on gasoline mandates: 'We own auto companies, why not?' Now that the federal government has gained control over the nation's auto industry, one U.S. senator contends, it's time to make some changes in the kinds of cars Americans drive and the kinds of fuel they use. According to a Des Moines Register report, Sen. Tom Harkin, D-Iowa, wants Congress to use "climate change" legislation to mandate that auto manufacturers fit all new cars to run on a blend of 85 percent ethanol. "We own the automobile companies," Harkin said earlier this week. "Why not? I think that will be an easy one."
Revolt against nanny state New York yoga teachers' successful challenge Yoga? Even yoga? In addition to all the other little things that government is regulating in a drip, drip, drip that is gradually becoming an ocean, states have lately been telling yoga schools what to do and how to do it and threatening them with fines or extinction if they don't. Take that, you meditating bunch of stretch practitioners. Believe me, I wish I was making this up, that I hadn't read about it in the New York Times, that I had not learned about "the fees, inspections and paperwork," that I hadn't had to think about how one state, Michigan, told yoga schools to get certified or cease operations, no pleas accepted, no rationality or liberty permitted.
Boeing engineer passed secrets to China former Boeing engineer accused of passing trade secrets to the Chinese government for more than 30 years has been found guilty in the first big economic espionage trial in America. The conviction of Dongfan "Greg" Chung marks a stepping up of US attempts to protect commercial and national security interests against overseas spies. After a 10-day trial in Santa Ana, California, the judge, acting without a jury, found Chung guilty of six counts of economic espionage, as well as acting as a foreign agent and making false statements to the FBI.
Broadcaster Walter Cronkite, the 'most trusted man in America', dies aged 92 He wept as he announced John F Kennedy's assassination, shouted encouragement when the Apollo astronauts lifted off for the moon and was the nightly conduit of information on America's Vietnam war nightmare for families across the nation. Walter Cronkite, the veteran US newsreader described as "the most trusted man in America", has died at his home in New York at the age of 92 from brain disease. He was the face of CBS News from 1962 to 1981, when stories ranged from the Kennedy assassination to Watergate and the Iranian hostage crisis. An experienced journalist who had already covered the second world War in Europe, he joining CBS as a television correspondent in 1950. His stirring reports on everything from the Kennedy assassination to the Apollo space programme and the Vietnam war often had as much impact as the events themselves.
India rebuffs US carbon demands India on Sunday night rebuffed an appeal by Hillary Clinton, US secretary of state, to embrace a low-carbon future in which the two countries would work together to devise new ways of consuming and producing energy. Mrs Clinton, on a five-day visit to the country, said that low-carbon emissions would not jeopardise India's high economic growth rates and its goal of lifting millions of people out of poverty. She offered a technological partnership to secure the fast growing nation's energy supplies and help boost the livelihoods of its farmers.
Netanyahu tight-lipped about imminent Iran attack Israeli warships cross Red Sea in apparent signal to Tehran Prime Minister Benjamin Netanyahu's office refused to respond to a report today purporting to quote an Israeli defense official stating the recent deployment of warships across the Red Sea should be seen as serious preparation for an attack on Iran. "It is not our policy to comment on such reports," Mark Regev, Netanyahu's spokesman, told WND. Earlier this week, two Israel Navy gunboats openly sailed through the Suez Canal into the Red Sea with permission from Egypt.
Israel rejects US call to halt project Benjamin Netanyahu, Israel's prime minister, on Sunday rejected a US call to halt construction on a controversial project in mostly Arab east Jerusalem. The move increases tensions with the country's staunchest ally over expansion of Jewish settlements. The premier's statements came after a senior Israeli official confirmed that the US state department had over the weekend summoned Michael Oren, the country's ambassador to Washington, to demand the plan be suspended. Mr Netanyahu, speaking at his weekly cabinet meeting, reiterated his stance that Israeli sovereignty over the entire city of Jerusalem is "indisputable" and said: "We cannot accept the idea that Jews will not have the right to live and purchase [homes] in all parts of Jerusalem."
China's Silk Road ambitions delayed by financial crisis China's ambition to restore the old Silk Road as a trade route fit for the modern era of globalisation has been halted by the financial crisis and unrest in the western region of Xinjiang. From far-flung trading outposts to bazaars in millennia-old Central Asian cities, Chinese shopkeepers are heading home, leaving behind their unsold goods. Towns are filling instead with unemployed former migrant workers, whose jobs on building sites in Russia have disappeared. The financial crisis is largely the cause. But traders in China's Central Asian borderlands, which lie in Xinjiang, also blame the violent clashes between the province's Muslim Uighur population and local Han Chinese.
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Gold to shine as dollar ails Gold prices are set for solid gains this year and next, with the $1,000 mark in sight, as potential inflationary concerns and a softer dollar outlook prompt analysts to ramp up forecasts, a Reuters survey showed. The poll of 48 analysts and traders showed that expectations for gold prices this year have risen 7.8 percent to a median $930 from $862.50 in a similar survey carried out in January, when fears over the economic outlook were at their height.
Lombard Odier sees gold hitting record high Gold has potential to set a record peak by December and the metal's average price is likely to be higher in 2010 than this year, as issues related to the credit crisis or inflation may resurface, a fund manager said. Buying shares of precious metal companies, especially mid-cap gold miners, could yield attractive returns this year and next, said Aurele Storno, the manager of two funds at Switzerland-based Lombard Odier.
Is the Death of the U.S. Dollar Imminent? For a long time I've recognized that the death of the U.S. dollar is inevitable. It is so thoroughly debauched that it should be worthless right now, but it's also such a vital instrument that nobody can afford to let it die, at least not yet. Moreover, as I've learned over the years, while it's easy to predict what is going to happen - that's usually just a matter of logical deduction - it's nearly impossible to predict when it's going to happen. I have to admit that I've been awed by the acumen of the powers-that-be to keep levitated the corrupt system we have today. I guess when you own the world's reserve currency, the world's most powerful military and have a media empire in your back pocket you can do pretty amazing things, for a while anyway.
Jim Rogers Printing Money is not the solution
Imminent Erosion of USDollar Seawall The globe is losing patience with leadership and management of the USGovt ship at sea. They simple refuse to offer a credible solution to the primary keynote crack in the hull, falling housing prices and cratered mortgages, each of which work their destructive magic to wreck the banks. The home loan modifications are a farce, a travesty not designed to modify but rather to frame a series of loan forbearances. The motive for not fixing the mortgage mess is mysterious to the masses, but not here. Jackass claims have been consistent, that effective loan modifications would alter the underlying mortgage bonds drastically.
US dollar - a currency in decline In the midst of the longest and deepest, post World-War II recession, America's financial position relative to the rest of the world has deteriorated sharply. Three decades of massive trade deficits have turned the United States from the world's top lender into the world's largest debtor and as a result has made it dependent on the whims of so-called emerging nations, laden with huge foreign currency reserves, to finance the bailout of Wall Street Oligarchs, and President Barack Obama's social programs. Foreigners own roughly half of the US government's publicly traded debt, or $3.47-trillion, representing nearly 25% of the size of the US economy - the highest level in history. If foreign lenders were to significantly reduce their purchases of US Treasury notes, without even dumping their current holdings, US long-term interest rates could zoom higher and the US dollar could crumble.
Can The Economy Recover? There is no economy left to recover. The US manufacturing economy was lost to offshoring and free trade ideology. It was replaced by a mythical "New Economy." The "New Economy" was based on services. Its artificial life was fed by the Federal Reserve's artificially low interest rates, which produced a real estate bubble, and by "free market" financial deregulation, which unleashed financial gangsters to new heights of debt leverage and fraudulent financial products.
Gerald Celente switch from the Dollar
The Next Five Years There are always major and minor causes to all effects. When one is dealing with the stock market and the economy the major causes that run the show are:
Money Supply
Interest Rates
Government Intervention (taxes, regulations, permits, trade barriers, etc.)
Government Spending (high or low percent of GDP, deficit policies etc.)
The above, in turn, influence the following:
GDP
Stock Prices
Employment Rates
Inflation Rates
Fed Saw Economy as 'Vulnerable' at June FOMC Meeting Most Federal Reserve officials judged the economy at risk to further shocks last month even as they rejected an expansion in asset purchases, reflecting doubt at the likely impact of such a move. "Most participants saw the economy as still quite weak and vulnerable to further adverse shocks," the central bank said in minutes of the Federal Open Market Committee's June 23-24 meeting released today in Washington. "Although financial market conditions had improved, credit was still quite tight in many sectors."
Should We Absolve the Fed? Are supporters of the free market engaged in special pleading when they identify the federal government and its central bank, the Federal Reserve, as the most significant factors behind the financial crisis? Absolutely, says Bruce Ramsey in the August issue of Liberty magazine. Ramsey's argument comes in the context of a review of two books: Paul Muolo and Matthew Padilla's Chain of Blame: How Wall Street Caused the Mortgage and Credit Crisis and my own Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse. He likes the Muolo and Padilla book better, because in his view it merely tells the story. Since my book applies a theoretical apparatus to the events of the past several years, it is a case of ideology masquerading as analysis.
Two-Thirds of CMBS Maturities at Risk into 2018, Deutsche Bank Says At least two-thirds of commercial mortgage-backed securities loans maturing between 2009 and 2018, $410 billion, will unlikely qualify for refinancing at maturity without significant equity infusions from borrowers, said a report from Deutsche Bank, New York. The Future Refinancing Crisis in Commercial Real Estate said more than 80 percent of 2007 CMBS vintage will unlikely qualify for refinance and borrowers will need at least $100 billion in additional equity to help loans qualify. "Our [conservative] estimate of maturity default-related losses for fixed rate CMBS is $50 billion, 6.5 percent of the aggregate outstanding balance," the report said. "We estimate that maturity default-related losses will be at least 4.6 percent for the 2005 vintage, 5.8 percent for the 2006 vintage and 12.5 percent for the 2007 vintage."
The Silver Supply/Demand Imbalance I try not to think about silver, because when I do, my head ends up whirling around at the sheer compelling nature of the fundamentals, and I always come to the conclusions that whirling makes me dizzy and that I need to buy more silver right away because silver is going to start exploding in price over the next few years, it could happen soon enough to do me some good, especially considering the sorry state of all alternative investments right now and the sorry state of just about everything right now, and by the fact that I am slashing the kids' allowances to zero, freeing up some of the cash I will need!
Gold, the U.S. Dollar, and the Chinese Yuan In late April, a Chinese sovereign wealth fund, the State Administration of Foreign Exchange, announced that China had purchased 454 metric tons of gold over the past six years. Officials indicated that this increase was accomplished by tapping domestic mine supply and refining scrap gold. As China reported gold production of 282 t last year, the reserves have absorbed about 25% of this output since 2003. China now has the fifth largest official gold reserve, 1,054 metric tons, surpassing Switzerland. While this was a 76% jump in gold holdings, the yellow metal is still only 1.6% of China's foreign reserves. Just to reach the global average of 10.5%, China would have to grow its gold hoard to nearly 7,000 t.
Mobius Says Derivatives, Stimulus to Spark New Crisis A new financial crisis will develop from the failure to effectively regulate derivatives and the extra global liquidity from stimulus spending, Templeton Asset Management Ltd.'s Mark Mobius said. "Political pressure from investment banks and all the people that make money in derivatives" will prevent adequate regulation, said Mobius, who oversees $25 billion as executive chairman of Templeton in Singapore. "Definitely we're going to have another crisis coming down," he said in a phone interview from Istanbul on July 13.
Treasury Bets U.S. Financial System Can Weather CIT Collapse The U.S. spurning of CIT Group Inc.'s aid request suggests officials are betting they've fixed the financial system enough to withstand the bankruptcy of a mid-sized lender. "I hate to say this, but it was probably expendable," said Dennis Santiago, chief executive officer of Institutional Risk Analytics, a Torrance, California, research firm that studies systemic risk. "It may have just missed the boat" on federal rescues, Santiago said.
Lawmakers say Paulson kept bailout details secret House lawmakers say Paulson bent to bank CEO; Paulson defiant Lawmakers accused former Treasury Secretary Henry Paulson on Thursday of bending to the demands of a major bank and keeping negotiations of a hefty bailout secret in his rush to stabilize financial markets last year. Paulson, testifying for the first time since leaving office in January after putting in place a $700 billion bank bailout program, was defiant in his response and admitted no wrongdoing. "No one was tougher than I was in trying to protect the American taxpayer," he told the House Oversight and Government Reform Committee.
Paulson Counters His Critics What began Thursday as a Congressional hearing into the takeover of a single Wall Street firm quickly grew into a public interrogation of Henry M. Paulson Jr., the former Treasury secretary, about his role in heading last year's rescue plan for the financial industry. In a series of heated exchanges, several lawmakers accused Mr. Paulson of misleading Congress about how he had planned to use the $700 billion authorized under the government's Troubled Asset Relief Program, or TARP. Days after telling Congress last autumn that he intended to use the money to buy impaired mortgage assets, Mr. Paulson instead injected $250 billion directly into several large banks.
Paulson Pressured BOA CEO Before the House Oversight and Government Committee, Former Treasury Secretary Henry Paulson admitted pressuring Bank of America to go through with plans to buy Merrill Lynch.
Lawmakers grill Paulson over Merrill deal A bipartisan chorus of House lawmakers on Thursday angrily accused former Treasury Secretary Henry M. Paulson Jr. of abusing his authority and misleading Congress in pressuring a reluctant Bank of America to go through with a takeover of Merrill Lynch last year. Mr. Paulson, while testifying on the merger before the House Oversight and Government Reform Committee, said he warned Bank of American Chief Executive Ken Lewis that backing out of the deal would "show a colossal lack of judgment," have a "destructive" impact to the economy and possibly be illegal.
CIT Shares Plunge After U.S. Denies Aid Request Shares of the CIT Group plummeted Thursday after the survival of the company, one of the nation's largest commercial lenders, was thrown into doubt as federal officials rebuffed pleas to rescue it a second time. Unless a buyer emerges for CIT - a prospect that seems unlikely - the century-old lender could founder, even after it received a $2.33 billion taxpayer-financed bailout in December. CIT's shares fell $1.23, or 75 percent, to 41 cents. Trading of the stock had been halted late Wednesday afternoon before CIT announced the breakdown of talks with the government, but trading resumed Thursday morning.
This Too Shall Pop The monsoons came to an end yesterday afternoon…more below… In the meantime, the Financial Times, on the final page of the first section, reports the big news: "China…is back in bubble land." After the expansion comes the contraction. After the bubble comes the clean-up. After the storm comes the sun. But what is going on in China? What comes after the biggest export-led bubble ever? Another bubble? It doesn't seem possible. China's number one customer is broke. It has far too many factories for those that are left. It should be closing up shop…and waiting out the bad weather. And yet, China is growing. A combination of hot money…and hot financial policy…is falling on everyone's favorite green shoot like Miracle-Gro. Its trade surplus and foreign direct investment - the usual source of reserves of foreign currencies - are only half what they were last year. But the speculators are coming in…and they are bringing cash. This has boosted Chinese reserves past the $2 trillion mark…and provided the liquidity for another round of bubble-like conditions. Trading volumes in Chinese stocks, for example, are running three times last year's.
Causes and effects Let us imagine that in August of 1971 the governments of the world decreed that as of that date all vehicles of the world should run on water rather than on gasoline. Within 48 hours, at the most, all vehicular traffic in the world would have ceased. The cause - an absurd decree - would have produced disastrous effects immediately. In human affairs, which are much more complex, it generally happens that bad decisions do not produce all their bad effects immediately, but only in the course of time. Today the world is struggling with an unprecedented economic collapse, caused by a mistaken decision taken almost 38 years ago.
Worst behind us but more stimulus needed: Roubi Nouriel Roubini, one of the few economists who accurately predicted the magnitude of the financial crisis, said on Thursday that the worst of the turmoil has passed. But Roubini emphasized the United States will still need a second fiscal stimulus, possibly by the end of this year, as the unemployment rate quickly approaches 10 percent. Developed economies are bottoming out or close to doing so, but the recovery will be anemic, with the United States remaining in recession throughout the year, said Roubini, who is chairman of RGE Global Monitor.
Stung by jobs data, White House defends stimulus Amid worsening jobs figures and continuing criticism about the speed of its economic recovery plan, the White House on Thursday defended President Barack Obama's efforts to lift the United States out of recession. Some five months after Democrats pushed the president's $787 billion economic stimulus package through the U.S. Congress, the package -- which spans two years -- has had limited impact on rising unemployment figures. On Wednesday, the Federal Reserve forecast that the unemployment rate would stay above 9.5 percent in 2010.
The One Mega Trend No One Is Talking About Thus far, analysis the financial collapse has been framed almost entirely in terms of money. All the research I've seen has delved into lending standards, securitization, inflation, interest rates, housing and the like. Yet underneath this veneer lies one larger, mega-trend that has driven all of these themes to a greater or lesser degree. It created one of the largest stock bull markets we've ever seen from 1982-2001. It helped drive the Bubbles in Tech stocks AND Housing. And now it will guide the coming collapse in stocks and consumer spending.
Dollar Is Near 2-Week Low Versus Euro as Safety Demand Weakens The dollar traded near the lowest level in two weeks against the euro on speculation advancing stocks will reduce international demand for safer assets such as Treasuries and Japanese debt. The yen is headed for the biggest weekly loss in two months against the euro after Nouriel Roubini, the New York University professor who predicted the financial crisis, said the recession will end this year. The Australian and New Zealand currencies were set for a weekly gain as investors bought the South Pacific nations' higher-yielding securities.
Verleger Sees $20 Oil This Year on 'Devastating' Glut Crude oil will collapse to $20 a barrel this year as the recession takes a deeper toll on fuel demand, according to academic and former U.S. government adviser Philip Verleger. A crude surplus of 100 million barrels will accumulate by the end of the year, straining global storage capacity and sending prices to a seven-year low, said Verleger, who correctly predicted in 2007 that prices were set to exceed $100. Supply is outpacing demand by about 1 million barrels a day, he said.
Gerald Celente we need Zero Point Energy t 15 July 2009
Fed Sees Heightened Joblessness Drawing Out Recovery A new forecast raised fresh doubts yesterday about how strong any economic recovery might be, as the Federal Reserve projected that the unemployment rate may surpass 10 percent by year's end and warned that the economy may not return to full health for at least five years. The projections, by 17 top Fed leaders, suggest that a jobless recovery could be approaching -- one in which the economy begins growing again in the coming months but times remain tough for American workers. The Fed leaders forecast higher unemployment rates than they had just two months earlier. At the same time, they upped their expectations for economic growth.
Foreclosures at record high in first half 2009 despite aid U.S. home foreclosure activity galloped to a record in the first half of the year, overwhelming broad efforts to remedy failing loans while job losses escalated. Foreclosure filings jumped to a record 1.9 million on more than 1.5 million properties in the first six months of the year, RealtyTrac said on Thursday. The number of properties drawing filings, which include notices of default and auctions, jumped 9.0 percent from the second half of 2008 and almost 15 percent from the first half of last year.
Foreclosures At New High The current wave of foreclosures is hitting people who are no longer able to pay their mortgage because they have lost their job. As Ben Tracy reports, loan modification programs are not keeping up.
Card Fees Pit Retailers Against Banks The most profitable item at Patricia Orzano's 7-Eleven store on Long Island is coffee. Slurpees are a distant second. But as more customers use plastic to pay for even small purchases like these, she has watched a growing share of her revenue vanish in a stream of credit and debit card fees that retailers say raise the price of goods and sharply lift the cost of doing business.
Health Legislation Is Said to Carry Debt Risk The director of the nonpartisan Congressional Budget Office testified on Thursday that health care legislation proposed by House Democrats and the Senate health committee would not slow what he called the unsustainable government spending on medical care, but instead could drive the nation further into debt. The testimony by the director, Douglas W. Elmendorf, before the Senate Budget Committee drew unusually blunt criticism from both the House speaker, Nancy Pelosi of California, and the Senate majority leader, Harry Reid of Nevada, in a sign of their rising frustration over the difficulty in paying for the health care bills. Asked about the testimony by Mr. Elmendorf, a highly regarded economist, Mr. Reid snapped derisively, "Maybe what he should do is run for Congress."
Health bill would deliver pre-Reagan tax rates Small-business owners are warning that the economy would suffer under a health care bill proposed by House Democrats, which would drive tax rates for high-income taxpayers to levels not seen since before President Reagan's tax reform of 1986. The top federal income tax rate, which Mr. Reagan and a bipartisan Congress lowered from 50 percent to 28 percent, would reach 45 percent in 2011 if Congress and President Obama enact the surtaxes that are part of the health care reform plan that House Democrats announced Tuesday.
Coburn: Dem health plan will kill Americans Sen. Tom Coburn said Thursday that President Obama's proposed government-run health-care system to help the uninsured would instead kill more Americans. "The last 10 years, a million more Americans are alive than otherwise would be if they had Canadian or British health care," Mr. Coburn, Oklahoma Republican, told The Washington Times American's Morning News. "That's because our survival rates for cancer, malignancies and coronary-artery disease are so far better. We have the available technology and acute interventions as well as prevention that those countries don't have."
Portable solar powered fridge goes off-the-grid A fridge that positively thrives in direct sunlight might seem a bit of a strange idea, but if you find yourself in a baking hot country where keeping your medical supplies cool and fresh could mean the difference between life and death, or you just want to sell some chilled refreshments to passers-by, then you need a portable, stand-alone chill solution. Industrial Insulation Systems (IIS) has developed a solar powered fridge/freezer which can be tailored to meet the needs of these off-the-grid scenarios.
'Wise Latina' routs gang of white men Judged against the standard of the U.S. Senate, maybe Sonia Sotomayor has a point. "A wise Latina" certainly came across smarter than most of those white men on the Judiciary Committee. The hearings on her nomination to the U.S. Supreme Court ended Thursday, and the mash notes served up to her by gaga Democratic senators when it was time for everybody to go home summed up just about all that everybody learned from the week's work.
Sotomayor's route to confirmation seems clear Supreme Court nominee Sonia Sotomayor appeared on the fast track to confirmation as the top Republican on the Senate Judiciary Committee said Thursday that he and his colleagues would not filibuster her historic nomination. The final day of the judge's testimony did not go entirely smoothly. The National Rifle Association (NRA) came out strongly in opposition to her nomination, and the New Haven, Conn., firefighter who has become the public face of one of her most fiercely debated decisions testified before the panel.
Security and Economic Revival Raise Hopes in the West Bank The first movie theater to operate in this Palestinian city in two decades opened its doors in late June. Palestinian policemen standing beneath new traffic lights are checking cars for seat belt violations. One-month-old parking meters are filling with the coins of shoppers. Music stores are blasting love songs into the street, and no nationalist or Islamist scold is forcing them to stop. "You don't appreciate the value of law and order until you lose it," Rashid al-Sakhel, the owner of a carpet store, said as he stood in his doorway surveying the small wonder of bustling streets on a sunny morning. "For the past eight years, a 10-year-old boy could order a strike and we would all close. Now nobody can threaten us."
Eastern Europe Is Uneasy Over U.S. Ties With Russia The deep concern among America's Eastern European allies over improved relations between Russia and the United States spilled into the open on Thursday when 22 prominent figures, including Poland's Lech Walesa and the Czech Republic's Vaclav Havel, published an open letter to the Obama administration begging not to be forgotten. In the letter, the leaders urged President Obama and his top policy makers to remember their interests as they negotiate with Russia and review plans for missile defense bases in Poland and the Czech Republic. Abandoning the missile defense plan or giving Russia too big a role in it could "undermine the credibility of the United States across the whole region," the letter said.
Taliban uses Afghan fear to fight surge Kills backers of U.S., government in Kabul The Taliban is seeking to blunt the surge of an additional 20,000 U.S. troops through stepped-up attacks on Afghans working with the U.S.-backed government, U.S. and Afghan officials say. For much of the past year, the militant group has worked to weaken the link between the government and citizens through targeted assassinations of people who work for or with Afghan institutions. This wave of intimidation is an enormous obstacle to Afghan officials and local tribal council members trying to reach out to Afghan citizens, often in areas where the government has lacked a firm grip.
Don't miss this interview! . . .
pt 1/3 Gerald Celente on Coast 2 Coast AM 14 July 2009
pt 2/3 Gerald Celente on Coast 2 Coast AM 14 July 2009
pt 3/3 Gerald Celente on Coast 2 Coast AM 14 July 2009
As one of the few economists with a record of successfully forecasting the recession, I can say with certainty that unless we return to true free-market principles, our economy will not rebound. Our families will continue to suffer. Unemployment and inflation will continue to rise. Our debt and deficits will continue to grow.
It is time to change course. Unfortunately, Congress and the President are continuing down the reckless path of more spending, more government intervention and more restrictions on free enterprise and individual liberty. Socialism has never worked anywhere, and it won’t work here. Washington must have the courage to stand by our founding principles in this time of crisis. Our politicians do not understand the stakes – which is why I am considering a run for the U.S. Senate.
Bad for the Goose, Worse for the Gander Last week, major banks announced they would no longer offer cash for the IOU's written by the state of California. At the same time, China proposed that the U.S. dollar be replaced as the world's official reserve currency. Although seemingly unrelated, these two developments have at their root the same issue: uneasy creditors. Inspired by Washington's profligacy, California's Democratic majority long pursued a policy of populist politics, supercharged by referendums, which called for increasingly massive expenditures. Exploding deficits were the natural result. Now, it has reached the point where holders and potential buyers of California debt have lost confidence in the state's ability to ever repay.
Part 1: 07/15/2009 Freedom Watch 23 w/ Ron Paul, G. Edward Griffin, Peter Schiff, more
Honest Money Mr. Gnazzo's meticulous research provides the reader with empowering information concerning America's monetary system. This eight part essay explains a dysfunctional system, why it is dysfunctional, and how it got that way. This is, IMO, mandatory reading for every responsible patriot
Honest Money, Part I: The Constitution and Honest Money The recent bull market in gold and silver has generated much discussion in the media regarding the "gold standard" of the past - versus the present system of irredeemable paper fiat currency known as Federal Reserve Notes. Even the issue of the constitutionality of the Federal Reserve and the irredeemable fractional reserve banking system it wields, as the Sword of Damocles above unwary heads, has been debated. Many well-intentioned and knowledgeable writers have rightfully questioned both the efficacy and the soundness of the present monetary system of paper fiat.
Honest Money, Part II: Silver Standard with a Bimetallic Coinage System As we have seen, the Constitution along with the Coinage Act of 1792, established by statutory decree that the dollar was the unit of account and also declared that a dollar or unit was "each to be of the value of a Spanish milled dollar as the same is now current, and to contain three hundred and seventy-one grains and four sixteenth parts of a grain of pure silver, or four hundred and sixteen grains of standard silver".
Honest Money, Part III: Coinage Acts from 1834-1900 The various monetary acts from 1792 until the act of 1834 were not of any important consequence and did not stray far from the original constitutional plan. Most of the acts had to do with “regulating” the value of foreign coinage with our own coin. The first act of major importance was the Act of 1834.
Honest Money, Part IV: Treasury Notes Article I, Section 8, Clause 2 of the Constitution grants Congress the power “to borrow money”. During several occasions in the 1800s, Congress used the power to borrow money by issuing Treasury Notes, which were paper claims of public indebtedness. In keeping with the constitutional mandate against “emitting bills of credit”, all but one series of Treasury Notes, until the Civil War, were issued accordingly: without creating any type of paper currency with legal tender authorization.
Honest Money, Part V: History of American Money and Banking During the 17th century, American settlers were starting to grow from small colonies and villages into larger towns and cities. Barter was the earliest method of trade, the direct exchange of one good for another. Soon certain commodities became most favored, such as furs and tobacco. In Virginia, warehouse receipts for bales of tobacco circulated as money.
Honest Money, Part VI: The European Connection Although Greenbacks are believed to be the main source of financing for the Civil War, they were not – government bonds were. The total emission of Greenbacks was under $850 million, while Treasury Bonds were issued in the amount of almost $2 billion.
Honest Money, Part VII: The Moneychangers - Secrets of the Temple Nelson Aldrich was financially well off when he left the wholesale grocery business. He then turned his attention to the political arena. Election to the United States Senate quickly followed. Within a few short years, Aldrich became a multi-millionaire of powerful influence. He was the father-in-law of John D. Rockefeller, and his grandson, Nelson Aldrich Rockefeller, later became Vice President of the United States.
Honest Money, Part VIII: Final Summary and Conclusions THE GOLD STANDARD Many are of the opinion that a return to the gold standard is the best answer for the urgently needed reform of our monetary system. As we have seen, however, the gold standard was not what many believe it to be. Gold was not the original constitutional standard – silver was. The so-called failure of the gold and silver standards is not a reflection on either silver or gold. The would be masters of the universe have gone to great lengths to discredit and dishonor both metals, by purposefully entangling them within a finely spun web of self-destructive standards and systems, knowingly doomed to fail from the start. All by careful design to attain the final goal: the removal of gold and silver from the world’s monetary system. Nothing was left to chance, just in case it exists.
Part 2: 07/15/2009 Freedom Watch 23 w/ Ron Paul, G. Edward Griffin, Peter Schiff, more
Gold Trades Near Two-Week High as Dollar, Oil Sustain Demand Gold traded near a two-week high in Asia after jumping yesterday as a slump in the dollar and a rally in oil prices helped sustain demand for alternative assets to hedge against inflation. Bullion was little changed after jumping 1.5 percent yesterday as oil rose the most in three weeks and a report showed U.S. consumer prices climbed the most in a year in June. The gain, after a three-day U.S. equity rally, shows the extent of investor inflation concerns, said Ben Westmore, energy and minerals economist at National Australia Bank Ltd.
'Gold is a hedge against US dollar decline' Agoracom market analyst Peter Grandich, who isn’t among those who expect the world at large to emerge from “this absolutely horrific downturn” by year-end, instead sees good opportunities on the horizon for investors who want to “buy things on the cheap” because prices will fall in the equity markets. He also sees bright prospects for gold—particularly gold ETFs and mining companies that are in or near production and have potential for developing additional deposits. At the same time, Peter tells The Gold Report that the “severely wounded” U.S. economy should anticipate rougher and tougher times. Given his penchant for accurate predictions, that’s not a very comforting forecast.
Will gold fall to $800/ounce? Even though gold remained in its new found highs following the recession-boosted safe haven sales, now doubts are being expressed over its ability to stay above $900 per ounce in the coming months. Although it has pulled back from the recent peak seen in February, the price has remained near historic highs amid uncertainty about how sustainable the current recovery is. Even as equity markets bounced gold has consistently continued to trade around $900 an ounce, amid ongoing fears about the health of economies around the world.
Washington's Dilemma: This Isn't a Recession, It's a Collapse Washington is bluffing that it will not bail out California, and every other state suffering from collapsed revenues and massive job losses. If cuts in police and schools don’t force DC off from its current position, then the math will. Because in many states the aggregate revenue losses and looming cuts to state payrolls will largely render the intended effects of federal stimulus as moot. Frankly, unless Washington prints money and bails out every state that needs capital, including California, federal power will decline amidst this severe economic recession, and the process of a soft American devolution will begin. If you think this idea is outrageous, then you’ve still not come to terms with a core reality of our current situation: the structure of this financial crisis is wholly different than any in our post-war era. This isn’t a recession. This is collapse.
The Carbon Cap: The Newest Form of Taxation It’s possible that no concept in history has ever come so far, so fast, and with so little substance behind it, as “global warming.” Or, to be precise, anthropogenic global warming (AGW) – the kind caused by us puny humans rather than by that fireball that keeps the planet habitable. We’re extraordinarily lucky. If present thinking is correct, the first single-celled living organisms may have appeared as much as 3? billion years ago, and it would appear that once life arrived, it never went away. That’s a very long time for conditions to have remained favorable enough to keep the chain from breaking.
Part 3: 07/15/2009 Freedom Watch 23 w/ Ron Paul, G. Edward Griffin, Peter Schiff, more
Funds drawn to China like 'moths to a flame' Fund managers from across the world are shunning the West in favour of China and emerging markets, yet still seem deeply concerned that rally over the last four months may prove to be a false dawn. The July survey of investors by Merrill Lynch found that a net 63pc believe the world will recover over the next year, but they lack conviction and are not committing hard money to the rebound. “Asset allocators remain very cautious on global equities,” said the bank. It noted a “very sharp increase” in cash as funds opt for caution, as well as a retreat from growth stocks into the safe havens of pharmaceuticals, health care, and utilities. Hedge funds have cut their net “long positions”, with many switching to the “short” side as the rally falters.
World Bank warns of deflation spiral The World Bank has given warning that global economy will fall into a "deflationary spiral" unless urgent action is taken to reduce high levels of excess capacity in industry. Justin Lin, the bank’s chief economist, said factories running idle around world threaten to trap economies in a vicious cycle, risking further spasms of financial stress, requiring yet more rescue packages. "Significant excess capacity has been built up and unless this issue is addressed, we will face a deflationary spiral and the crisis will become protracted," he told an audience in Cape Town.
Gary Shilling: Stock Market Will Crash As US Consumers Retrench . . . . here's a quick overview of Gary's outlook on things, along with a gallery of exhibits from his recent monthly Insight. • The economy won't start to recovery until 2010 (versus the current consensus of now). It will recover because the government will be forced into a second stimulus. • The US consumer rules the world...and the US consumer is cutting back fast • Consumer spending will drop from 70% of GDP to 60% as consumers pay down debt and go on a saving spree. . . .
Paulson: Hell Yeah We Threatened Ken Lewis! Why was Bank of America (BAC) CEO Ken Lewis so paranoid about losing his job if he defied regulators by wiggling out of the Merrill deal? Well maybe because he was threatened. At least that's what Hank Paulson is going to tell Congress tomorrow: BBC: Hank Paulson warned the bank's chief executive Kenneth Lewis that the Federal Reserve could oust him and the board if the rescue did not proceed. The Fed had previously denied putting pressure on anyone to seal the deal. Bank of America (BoA) bought Merrill during the height of the financial crisis and suffered severe losses.
Paulson defends his response to economic crisis Former Treasury Secretary Paulson defends response to financial crisis in bipartisan probe Defending the government's handling of the economic crisis last year, former Treasury Secretary Henry Paulson said Wednesday that the Bush administration's responses were not perfect but "saved this nation from great peril." "Many more Americans would be without their homes, their jobs, their businesses, their savings and their way of life," he said in written testimony prepared for a hearing Thursday.
Paulson takes responsibility in Merrill deal Former Treasury Secretary Henry M. Paulson Jr., in prepared testimony to be presented Thursday, deflects the blame from Federal Reserve Chairman Ben S. Bernanke and says he is the one who told Bank of America chief executive Kenneth Lewis he would be removed if he didn't go through with his acquisition of Merrill Lynch last December. It was only one of many times President Bush's last Treasury secretary knocked heads with top bank executives as he combated the worst financial crisis since the Great Depression. Among his strong-arm tactics, Mr. Paulson in October forced the nine biggest banks to accept $125 billion of federal funding to ensure they did not become victims of the crisis like Merrill Lynch, though Goldman Sachs, JP MorganChase and other banks did not want the cash and later returned it.
Paulson Sent ‘Strong Message’ to BofA Chief Henry M. Paulson Jr., the former Treasury secretary, intends to defend the “strong message” he sent to Bank of America’s chief executive, Kenneth D. Lewis, last year that abandoning the bank’s planned takeover of Merrill Lynch could cost Mr. Lewis and other executives their jobs. “Bank of America’s completion of the merger, and the subsequent assistance from the government, not only protected our country’s financial system, but also was in the best interest of the shareholders, customers, employees and creditors of Bank of America and Merrill Lynch,” Mr. Paulson said in testimony prepared for a Congressional hearing on Thursday.
Paulson Makes No Apologies for Role in Merrill Lynch Sale Former Treasury secretary Henry M. Paulson Jr. plans to tell a House committee today that he was right to pressure Bank of America to complete its acquisition of Merrill Lynch because allowing the deal to fall apart would have damaged the companies and the broader economy, according to a copy of his prepared remarks. The strongly worded testimony makes no apologies for the government's actions, which have become the subject of considerable controversy. Paulson acknowledges, for example, that he warned Bank of America that its senior managers could be removed if the deal fell through. He says the warning was issued because, "It would be unthinkable for Bank of America to take this destructive action for which there was no legal basis and which would show a lack of judgment."
Part 4: 07/15/2009 Freedom Watch 23 w/ Ron Paul, G. Edward Griffin, Peter Schiff, more
Mortgages Are Now a Bank’s Best Friend For the last two years, housing has been at the center of the banking industry’s troubles. But for at least one quarter, it will help lift its results. Even as banks remain cautious about lending and millions of borrowers still risk losing their homes, the mortgage business is returning as one of the most lucrative corners of the financial industry. The clearest evidence is emerging this week, as the nation’s biggest banks report their second-quarter numbers. As independent mortgage companies and brokers shut their doors last fall, and major players like Bank of America, JPMorgan Chase and Wells Fargo swallowed up troubled rivals, lending profit margins widened, doubling at big banks amid a refinancing wave during the first half of the year, analysts said.
Federal Inquiry Looks at Derivatives Data Providers Federal antitrust officials have opened a broad inquiry into the practices of the companies that serve as clearinghouses for trades of derivative instruments and are looking in particular at whether any companies have improperly used inside information about trades to profit, officials said on Wednesday. Markit Group Holdings, a data warehouse controlled by several big banks, disclosed on Tuesday that it had been notified by antitrust officials of an inquiry into the “credit derivatives markets and related markets” and that it would “provide any information requested.” On Wednesday the Justice Department issued a statement confirming the investigation and said that it would be looking to see whether any improper practices had occurred on an industrywide basis.
A Panel Is Named to Examine Causes of the Economic Crisis Congressional Democrats announced on Wednesday that Phil Angelides, a former California treasurer, would lead a commission to examine the causes of the financial crisis. The vice chairman of the panel, which has 10 members, will be Bill Thomas, the former Republican representative from California who led the Ways and Means Committee, who was selected by Republican leaders. Other Democratic-appointed members of the committee include Brooksley Born, the chairwoman of the Commodity Futures Trading Commission under President Bill Clinton; Bob Graham, a former Democratic senator from Florida; Heather Murren, a retired managing director at Merrill Lynch; Byron Georgiou, a Las Vegas businessman; and John W. Thompson, chairman of Symantec.
Pimco Says Yield Curve May Steepen to Record Level The difference between Treasury two- and 10-year yields may widen to record levels set last month as the U.S. economy recovers, according to Pacific Investment Management Co., which runs the world’s biggest bond fund. “Long-term rates will rise at a faster speed than short- term rates,” Pimco portfolio manager Tony Crescenzi wrote in a report distributed by e-mail early in the Asian trading day. “Market participants decided months ago that the Armageddon scenario was out and stabilization was in.”
Munis Outperform Treasuries for Third Day as Colorado Borrows Municipal bonds held their value better than Treasuries for a third day as Colorado sold almost $300 million of taxable debt securities for which the state will receive a partial interest-cost subsidy from the U.S. government. Colorado sold Build America Bonds to finance a justice complex and history museum in Denver, offering yields ranging from 5.27 percent on 10-year securities to 6.72 percent on those due in 2045. The University of Missouri also began offering about $252 million of the federally subsidized, taxable bonds and $75 million of traditional tax-exempt bonds.
Blinder Says Fed May Raise Rates in First Half of Next Year The Federal Reserve may start to raise its target interest rate from near zero in the first half of 2010 as the economy recovers, Princeton University economist Alan Blinder said. “I think the Federal Reserve will look around at the state of the financial system and the state of the economy” and “bump the federal funds rate above zero,” Blinder, who served as Fed vice chairman from 1994 to 1996, said in a Bloomberg Television interview today. “I am not talking about a massive tightening,” he added.
Obama to Change His Tune: Get Ready For A Second Stimulus, Shilling Says There was a great clamor last week for a second Federal stimulus - because the first one wasn't working. President Obama threw cold water on that idea over the weekend, when he rejected calls for a second stimulus and suggested that we need to be patient and give the first stimulus time to work. Well, President Obama will soon be changing his tune, says our guest Gary Shilling. By the third or fourth quarter, Gary says, the government will launch a second stimulus. Next year is an election year, and despite ballooning deficits, politicians won't sit idly by and watch themselves not get re-elected because the economy has failed to recover.
Treasuries, Dollar Pessimism Wanes as Recovery Outlook Dims Investors are turning less bearish on Treasuries and the dollar as signs the global economic recovery may not be as quick as anticipated bolsters demand for U.S. assets, a survey of Bloomberg users showed. Participants lowered their expectations for how high yields on 10-year Treasuries will rise and how far the dollar will fall over the next six months after the U.S. unemployment rate approached 10 percent and global stocks declined, according to 2,738 respondents from New York to Tokyo to London in the Bloomberg Professional Global Confidence Index. The outlook on the pound fell from the most bullish level since November 2007 to neutral, while optimism toward Brazil’s real faded.
At Goldman, Did Inflation Bring Deflation? Some people on Wall Street are suggesting that Goldman Sachs inflated its staffing numbers to deflate its compensation figures per employee. In a footnote to its financial results on Tuesday, Goldman said that for the first time it was including consultants and temporary staff in its overall employee figures. This had the result of increasing its official staffing levels by 2,000 jobs or so in both the first and second quarters. Earlier this year, for example, Goldman said it had 27,898 workers at the end of the first quarter, but now it says that number was 29,800.
Does Goldman Owe the Taxpayers? There have been plenty of strong reactions to the $3.4 billion profit that Goldman Sachs reported Tuesday, as well as the $11.4 billion it set aside to pay its workers. Janet Tavakoli, president of Tavakoli Structured Finance, has an especially interesting take: She thinks that United States taxpayers deserve a big chunk of Goldman’s profits. In a commentary Wednesday on CNN.com, Ms. Tavakoli argues that Goldman has been raking in money in large part because of help from the government, through debt guarantees, money it received from the American International Group bailout and access to cheap loans from the Federal Reserve.
CIT Calls Bailout Unlikely, Fueling Speculation of Bankruptcy CIT Group Inc., the 101-year-old commercial lender running short of cash, said it probably won’t receive a federal bailout, fueling speculation the company is on the verge of bankruptcy. Talks with regulators have broken off and “there is no appreciable likelihood of additional government support,” the New York-based firm said yesterday in a statement. CIT, once the biggest independent commercial lender, may seek court protection if no U.S. aid emerges, Standard & Poor’s said this week. The company said it is “evaluating alternatives.”
CIT Says It Won’t Get More U.S. Aid The survival of one of the nation’s largest commercial lenders, the CIT Group, was thrown into doubt late Wednesday after federal officials rebuffed pleas to rescue the struggling company a second time. Unless a buyer emerges for CIT — a prospect that seems unlikely — the century-old lender could founder, even after it received a $2.33 billion taxpayer-financed bailout in December. The plight of CIT, which provides loans to about a million small and midsize companies, particularly in the now-sagging retail sector, poses a crucial test of Obama administration’s attempts to stabilize the nation’s financial industry.
NO BAILOUT FOR CIT CIT Group Inc (CIT), a leading provider of financing to small businesses and middle market companies, today announced that it has been advised that there is no appreciable likelihood of additional government support being provided over the near term. The Company’s Board of Directors and management, in consultation with its advisors, are evaluating alternatives. So what's the play here? Do they think all those small businesses will find alternative financing? Will there be some other kind of bailout for the customers?
An Economy on Life Support Our faith is weakening. That is, our faith that the government will be able to cause inflation, sooner or later. Let’s review our own narrative: deflation now, inflation later. It’s very simple. Maybe too simple. After a half a century of credit expansion, we now have a credit contraction. In this sense, everything is happening as it should. There was a crash and credit crunch at the end of last year. Then, the feds panicked. They fought back with monetary and fiscal stimulus. Rates were cut to nearly zero. The Fed flooded the system with cash and easy credit – buying up Wall Street’s bad investments…propping up bad banks…and guaranteeing trillions worth of bad debt. And the federal government passed a stimulus program that authorized more than $700 billion in spending.
Part 5: 07/15/2009 Freedom Watch 23 w/ Ron Paul, G. Edward Griffin, Peter Schiff, more
The One Mega Trend No One Is Talking About Thus far, analysis the financial collapse has been framed almost entirely in terms of money. All the research I've seen has delved into lending standards, securitization, inflation, interest rates, housing and the like. Yet underneath this veneer lies one larger, mega-trend that has driven all of these themes to a greater or lesser degree. It created one of the largest stock bull markets we've ever seen from 1982-2001. It helped drive the Bubbles in Tech stocks AND Housing. And now it will guide the coming collapse in stocks and consumer spending.
Obama Officials Threaten to Cut Funding to Arizona in Response to Criticism From Arizona Senator Here's a bluff I'd like to see called, if only to watch the White House try to defend basing its spending decisions on whether a state's politicians have enough snap in their salutes: On This Week with George Stephanopoulos on Sunday, Sen. Jon Kyl, R-Ariz., said of the $787 billion stimulus package, "the reality is it hasn't helped yet. Only about 6.8 percent of the money has actually been spent. What I proposed is, after you complete the contracts that are already committed, the things that are in the pipeline, stop it."
A day later, Arizona Gov. Jan Brewer received letters from Secretary of Transportation Ray LaHood, Agriculture Secretary Tom Vilsack, Department of Housing and Urban Development Secretary Shaun Donovan and Secretary of the Interior Ken Salazar all pointing out the billions headed to Arizona.
Upscale home sales lag as jumbo loans are hard to get More than four months after the Obama administration launched its housing rescue plan, scores of lenders are focused on rewriting mortgage loans to make them more affordable. But one demographic is being largely ignored: homeowners with higher-price loans. They don't qualify for mortgage modifications under the Obama plan. They can't get today's low interest rates if they try to refinance. And with newly cautious lenders warier about who they lend to, just try to sell a home that costs $730,000 or more these days. In many cases, finding a buyer who can get financing takes far longer than for lower-price homes, because banks want as much as 30% down and six months of mortgage payments in reserve.
Dems Introduce $1 Trillion Health Care Bill to Cover All AmericansPlan Would Require Wealthy to Pick Up the Cost; Republicans Vow to Oppose Bill On Capitol Hill today, House Democrats unveiled their $1.04 trillion plan for health care reform, a sweeping plan that was quickly endorsed by President Barack Obama, who wants Congress to pass legislation before the August recess. "This legislation is landmark legislation, and this is a defining moment for our country," said House Energy and Commerce Committee Chairman Henry Waxman, D-Calif. The sweeping changes to the health care system would cover 97 percent of Americans and include a mandate requiring all Americans to buy health insurance or pay a fine. Subsidies would be available to those with an income of less than $88,000.
Obama Health Care Plan Will Provide Taxpayer-Funded Abortion on Demand Democrats in both the House and the Senate want abortion be included as a health benefit in both government and private insurance plans, leading to millions more abortions, a Republican lawmaker warned. Taxpayer money would be used to pay for abortions in the government-run health care option. But congressional Republicans, strongly opposed to an abortion requirement in health care reform, are pushing for a ban on using taxpayer money to pay for such procedures.
Tobacco Use—Not Promiscuity or Drug Abuse Will Be Only Vice Legally Punishable by Higher Insurance Premiums Under Senate Health Care Bill Under the terms of the health-care reform bill approved by the Senate Health, Education, Labor and Pensions Committee, the legal use of tobacco products is the only vice for which insurance companies will be able to charge their customers higher premiums. The summary of the bill published by the committee specifically states that premiums may be varied to account for tobacco use, but any other use of a person’s record of insurance claims, health status or medical history will be forbidden.
Americans want health care bill, but not the cost Most Americans say it's important to overhaul health care this year, a USA TODAY/Gallup Poll finds, but they are less enthusiastic about some of the proposals to pay for it. And while a majority say controlling costs should be the legislation's top goal, more than nine in 10 oppose limits on getting whatever tests or treatments they and their doctors think are necessary. The findings underscore the difficult path ahead for the White House and Congress as the health care debate enters crunch time. President Obama, who has called for the House and Senate to pass bills before their August recess, met Monday with two key congressional chairmen to try to hammer out financing for the $1 trillion-plus legislation.
Part 6: 07/15/2009 Freedom Watch 23 w/ Ron Paul, G. Edward Griffin, Peter Schiff, more
Senate Panel Approves a Health Care Bill, But Will it Pass? More Challenges Ahead; Separate Committee to Decide How to Finance Measure, Obama Asks Congress to 'Buck Up' and Pass Health Care Reform Though a Senate committee approved one health care reform bill this morning and the House Democrats unveiled their own plan for health care reform yesterday, it remains to be seen which plan -- if any -- will get passed into law by Congress this year. President Barack Obama called on lawmakers to "buck up" and move quickly with health care reform. "We can do what we've done for so long and defer tough decisions for another day -- or we can step up and meet our responsibilities. In other words, we can lead," Obama said in the Rose Garden this afternoon.
How much health care for $1 trillion? The White House and Democratic congressional leaders, scrambling to pass health care bills within the next few weeks, are trying to keep the cost of legislation that expands coverage and controls costs to about $1 trillion over 10 years — a benchmark for moderates in both parties. So what can you buy for $1 trillion? Although the eye-popping price tag would help boost insurance coverage to 95% or more of the public, it's not enough to do everything advocates initially want.
Senate committee green-lights health care bill 1 of 5 bodies working on the overhaul The White House's health care overhaul passed its first congressional committee Wednesday on a party-line vote as backers of President Obama rolled out a new ad campaign to sway undecided lawmakers and rally public support. In a 13-10 vote, the Senate Health, Education, Labor and Pensions (HELP) Committee supported a $600 billion bill that would create a public health insurance program and require Americans to purchase insurance. The committee was the first of five Capitol Hill bodies working on the reform. The president is "willing to spend whatever capital, in his words, to achieve the result," said Sen. Christopher J. Dodd, Connecticut Democrat and acting chairman of the HELP committee.
Fed Sees Economy Improving, but Unemployment Getting Worse The Federal Reserve released the minutes from its June meeting Wednesday, and not surprisingly policymakers felt that "the economy remained very weak." However, the Fed did note that "declines in activity seemed to be lessening." Along with the minutes, the Fed issued an updated forecast, and it was mixed. The central bank now believes the U.S. economy will contract at a 1% to 1.5% pace in 2009, an improvement from its previous outlook of a 1.3% to 2% decline.
"We Are Seeing Our Country Disappear Before Our Eyes" Former Congressman Van Hilleary said he is dismayed by huge recent outlays in Congress. "We are seeing our country disappear before our eyes," he told the Chattanooga Pachyderm Club. Mr. Hilleary, who has moved from Spring City to Murfreesboro, said the most disturbing development has been the Cap and Trade Bill. "It will raise the price of everything in this country," he said. He said it will put the U.S. at a further competitive disadvantage with countries like China and India "who would never pass something like this."
Fed: Unemployment Will Top 10 Percent This Year Fed sees economy sinking at slower pace but says unemployment will worsen, top 10 percent The Federal Reserve expects the economy this year will sink at a slower pace than it previously thought, but that unemployment will top 10 percent and remain high for the next few years, according to a new forecast released Wednesday. The Fed now predicts the economy will shrink between 1 and 1.5 percent this year, an improvement from its old forecast issued in May. At that time, the Fed projected the economy would contract between 1.3 and 2 percent. The upgrade — which helped major stock indicators jump about 3 percent and the Dow Jones industrial average to add 257 points — comes from the expectation that the economy's downhill slide in the first half of 2009 wasn't as bad as previously thought. The Fed said the economy should start growing again in the second half of this year, although the pace is likely to be plodding.
Roubini and Shiller Say Recession May Be Prolonged - Bloomberg
Part-Time Workers Mask Unemployment Woes In California and a handful of other states, one out of every five people who would like to be working full time is not now doing so. It is a startling sign of the pain that the Great Recession is inflicting, and it is largely missed by the official, oft-repeated statistics on unemployment. The national unemployment rate has risen to 9.5 percent, the highest level in more than a quarter-century. Yet it still excludes all those who have given up looking for a job and those part-time workers who want to be working full time.
Car dealers see bill as road to recovery Backers of efforts to aid auto dealers vowed to keep fighting Tuesday, and said legislation could put closed dealerships back in business by government fiat - the same way dealers say they were shut down. A pro-dealer amendment has been added to a House appropriations bill, which could boost chances of relief for the dealers. More than 100 dealers from across the country and key lawmakers, including House Majority Leader Steny H. Hoyer, Maryland Democrat, rallied outside the U.S. Capitol on Tuesday for the amendment and for the separate Automobile Dealer Economic Rights Restoration Act, which they said could save 169,000 jobs.
Schwarznegger to Obama: Watch and Learn According to the San Diego Union-Tribune, Republicans and Democrats alike embraced legislation last Friday that would make California IOUs legal tender for all taxes, fees and other payments owed to the state. Effectively, California is using its IOUs to create a currency. If this bill passes it would allow California to deficit spend just like the Federal Government and with the IOU's acceptable as payment of state taxes, it instantly imparts value to them (see here and here). In effect, what you have is a state of the union creating a sovereign currency right under the noses of Treasury, Fed. They are stumbling their way into it, and as they do so, some of the true nature of contemporary money is being revealed. It will be viewed as a stop gap measure at first, and then could very well become entrenched as states realize they have a way to escape balanced budget requirements.
********** "EMP 101" A Basic Primer & Suggestions for Preparedness WHAT IS AN EMP? EMP is shorthand for Electro Magnetic Pulse. It is a rather unusual and frightening by - product when a nuclear bomb is detonated above the earth's atmosphere. We all know that our atmosphere and the magnetic field which surrounds our planet is a thin layer which not only keeps us alive, but also protects us from dangerous radiation from the sun. On a fairly regular basis there are huge solar storms on the sun's surface which emit powerful jets of deadly radiation. If not for the protective layer of our atmosphere and magnetic field, those storms would fry us. At times though, the storm is so power that enough disruptive energy reaches the earth's surface that it drowns out radio waves and even shorts electrical power grids...this happened several years back in Canada. View the detonation of a nuclear bomb, two hundred miles straight up as the same thing, but infinitely more powerful since it is so close by.
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Historic Euphrates River is drying up Strangled by clashing policies and rampant misuse UBAISH, Iraq – Throughout the marshes, the reed gatherers, standing on land they once floated over, cry out to visitors in a passing boat. "Maaku mai!" they shout, holding up their rusty sickles. "There is no water!" The Euphrates is drying up. Strangled by the water policies of neighbouring Turkey and Syria; a two-year drought; and years of misuse by Iraq and its farmers, the river is significantly smaller than it was just a few years ago. Some officials worry that it could soon be half of what it is now.
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Wed 07.15.2009
Why Gold's Price Rose in the Great Depression THE STORY OF A GOVERNMENT-RIGGED COMMODITY The United States government guaranteed the dollar-price of gold from the end of World War I until August 15, 1971. On that Sunday, Richard Nixon announced a new policy. The United States government would no longer redeem dollars for gold at $35/ounce when presented with dollars by foreign governments and central banks. Until then, the world's gold price had a floor: $35/ounce. Gold was a rigged commodity. It was not a free market commodity. Nobody sold gold below $35/ounce because the United States Treasury would buy gold at this price. The United States Treasury guaranteed a market for gold. It was not a free market.
King of Metals Will Keep Its Crown . . . . And that is why I am so bullish on gold. First, we have history on our side. For thousands of years, when paper assets and/or economic empires declined, their currencies declined but one asset always held its purchasing power. That's gold. In addition, the supply and demand scenario for gold itself has improved tremendously. Year after year, we see demand outstripping new supply, despite much higher gold prices. We have not seen a dramatic increase in new gold reserves for a while. The other factor is that former major sellers, most being the world central banks, no longer affect the gold price. It wasn't too long ago that if a central bank sold gold, the gold price declined tens or hundreds of dollars and stayed there for a year or two. Now, if a decline lasts a few days, it's a long time. These are all signals that the supply and demand scenario for gold remains very, very bullish.
Rising gold-gold stocks ratio and what it means? “I think we're going to have some of the worst inflation, with all the printing presses around the world running 24/7.” That’s what leading contrarian investor David Dreman said in an interview two weeks ago. Now, I know what you’re thinking, classic inflation hedges have fallen out of favor. Precious metals stocks have taken a beating over the past few weeks. And deflation, not inflation, is the fear du jour. But if you recall, Dreman is a true contrarian and value investor. His success has come from sticking to investment trends through all the ups and downs. For example, Dreman really made his mark in the early 80’s. At the time, stocks went nowhere for a decade. No one wanted anything to do with stocks except for Dreman who wrote a book making the case for buying stocks.
U.S. Dollar Wobble Sends Gold Higher Gold: The dollar wobbled overnight pushing gold to $923/oz. Gold is determinedly staying above the psychological $900 mark at the moment and the news that the US federal deficit has topped $1 trillion for the first time ever and could grow to nearly $2 trillion in the coming months is causing concern about higher interest rates and inflation and this should see gold well supported at these levels. The market will likely takes its direction from U.S producer prices and retail sales data released later today.
The Doctrine of Preemptive Bailouts and the Biggest Bailout you haven’t Heard About: The U.S. Treasury Plan C and the $3.5 Trillion You will be Paying. Last week a story which gained very little traction hit the financial newswires. The U.S. Treasury is working on an internal project informally called “Plan C” which seeks to deal with further problems in the economy before they occur. The anonymous report came out stating the administration is reluctant to commit any additional money especially to the level mentioned in the report. However this is a disturbing new development in our bailout nation since this is one of the first times that the U.S. Treasury will try to preemptively deal with a financial problem. The issues with this Plan C is that it is setup to be a buffer on further deterioration in various loan categories but the big one is commercial real estate. The commercial real estate market is gigantic and many of those loans are still active: Some $3.5 trillion in commercial real estate loans are out in the market. The problem is complicated because commercial real estate holders simply rollover their debt into new loans. That of course has changed since the economy and credit markets have shutdown and many of these properties are now severely underwater.
The Sage Counsel of Jim Rogers On Commodities, Stocks, Bonds, Currencies, Gold, Silver, and the "Idiot Bernanke." . . . . You read The Economic Times and your ET TV. So, you know that the markets always have corrections whether they are going up or down. Nothing goes straight up or down forever. So, it's having a normal correction. In my view, the best place to be is in real assets/commodities, because if the world is going to recover, they (commodities) will recover first because of the shortages and if the world economy is not going to recover, they are still the best place to be, because governments around the world are printing huge amounts of money. So, if you got to own something, I don't know much to own besides commodities.
"How Bad Will the Economy Get? Bad, Really Bad" "Historically, every financial and economic crisis has been used to further centralize power and concentrate wealth. This one is no different, and in fact the moves being promoted by the Obama administration and the central banks of the Western powers will take the whole world to the pinnacle of financial despotism - unless enough people wake up and claim their own "money power." In recent months, the Fed has expanded its "assets" from about $800 billion to more than $2,000 billion. Those so-called assets are securities it bought from financial institutions and loans made to central banks in other countries. But the Fed refuses to name the specific recipients of those funds, while admitting that by doing so they are manipulating the value of the US dollar on foreign exchange markets.
The Economy Is Even Worse Than You Think The average length of unemployment is higher than it's been since government began tracking the data in 1948. The recent unemployment numbers have undermined confidence that we might be nearing the bottom of the recession. What we can see on the surface is disconcerting enough, but the inside numbers are just as bad. The Bureau of Labor Statistics preliminary estimate for job losses for June is 467,000, which means 7.2 million people have lost their jobs since the start of the recession. The cumulative job losses over the last six months have been greater than for any other half year period since World War II, including the military demobilization after the war. The job losses are also now equal to the net job gains over the previous nine years, making this the only recession since the Great Depression to wipe out all job growth from the previous expansion.
The Great Baby-Boomers Economic Depression of 2007-2017 "Under a paper money system, a determined government can always generate higher spending and hence positive inflation." Fed Chairman Ben Bernanke, in 2002 Many observers think that “prosperity is around the corner” and that this recession, like others since World War II, will end as soon as the stock market, as a leading indicator, recovers and people start spending again. This is a myopic view of the current economic big picture. In fact, since the peak of the housing bubble (in the U.S.) in 2005, the onslaught of the subprime financial crisis in August 2007 and the beginning of the recession in December 2007, the U. S. economy, and to a certain extent, the world economy, have entered a period of protracted adjustments. For sure, there will be some quarters of positive economic growth ahead and the recession may be declared officially over in the coming months, but the radical economic reorganization that is taking place will go on for years to come.
Peter Schiff July 14 Vlog
Preparing for the New Economy America is beginning to consider a new stimulus program,” said Irish television last night. It was a rainy day in the Emerald Isle yesterday. The wind was blowing. Rain was coming down. By 7pm, it was time for a pub and a drink. The Irish know what to do in the evening… “Welcome to Ireland,” said the cab driver this morning. “Don’t you love this summer weather?’ It would have passed for a bad winter in Maryland. Cool. Wet. Disagreeable. “What happened to that global warming?” asked a colleague. “It was supposed to make Ireland hot and dry.” Meanwhile, back in the USA…people were wondering what happened to the stimulus program. It was supposed to stimulate.
Democrats slam stimulus' plan inefficiency Senate Democrats said Tuesday that President Obama's $787 billion stimulus program needs to be fixed to ensure money is spent more quickly and on projects that will provide a faster boost to the economy. They expressed their concern even as Mr. Obama warned that unemployment will continue to rise, and as a Washington Times analysis shows the states that have lost the most jobs this year are receiving less money per capita from the stimulus bill than states that are doing relatively well.
Tim Geithner's latest headache The treasury secretary's bid to rein in derivatives meets skepticism. The Obama Administration has given itself two months to tell Congress what new legislation is needed to control over-the-counter derivatives, and testimony by Secretary of the Treasury Timothy Geithner late last week indicated how incredibly difficult the job of writing a law is going to be. Scores of House members turned up to express their special concerns: Will grain elevator operators be required to register as users of derivatives? Can utilities continue to enter into the customized OTC contracts they regard as essential to their business? How, Secretary Geithner, are you going to prevent the derivatives business from migrating to Dubai?
Fed's Hoenig says U.S. recovery to be very slow The U.S. recession is almost over but the recovery will be very slow, a top Federal Reserve policy-maker said on Tuesday, while warning that even in this climate inflation is a long-term threat that should not be ignored. "I judge the economy at or near the bottom of the cycle," Thomas Hoenig, president of the Kansas City Federal Reserve Bank, told Reuters in an interview. "I am not suggesting a V-shaped cycle," he said, referring to a quick bounce back. "I think ... it will be a very slow recovery, given the seriousness of the problems in the financial industry and the slowness with which the capital in those institutions will be rebuilt," he said.
China’s Foreign-Exchange Reserves Top $2 Trillion China’s foreign-exchange reserves, the world’s biggest, topped $2 trillion for the first time as overseas investors became more confident that the nation’s economy is recovering. The reserves rose a record $178 billion in the second quarter to $2.132 trillion, the People’s Bank of China said today on its Web site. That dwarfs a $7.7 billion gain in the previous three months. The World Bank, BNP Paribas SA and Standard Chartered Bank have raised estimates for China’s growth and the Shanghai Composite Index has surged 74 percent this year as record lending and surging investment counter a slump in exports. The increase in the reserves highlights China’s concern that its $763.5 billion of Treasury holdings may fall in value as the U.S. sells record amounts of debt to fund stimulus spending.
Momentum builds to possible end of this U.S. entity Rep. Ron Paul: Congress can revoke central bank's charter 'at any time' A movement to audit the Federal Reserve – the private institution that virtually controls U.S. interest rates, money supply and other economic influences – is gaining momentum in the House and Senate while the Fed ramps up its efforts to thwart scrutiny of its books. House Resolution 1207, the Federal Reserve Transparency Act, now has 260 co-sponsors with many members of the House Financial Services Committee – where the bill currently resides – signed on already. Likewise, Senate Bill 604, Federal Reserve Sunshine Act, orders a complete audit of the Federal Reserve Board of Governors and the Federal Reserve Banks before the end of 2010. The bill, sponsored by Sen. Bernie Sanders, D-Vt., has eight co-sponsors and remains in the Senate Committee on Banking, Housing and Urban Affairs.
Back to big profits for Wall Street powerhouse Goldman Sachs, powerhouse of Wall Street, blows past expectations with big profits Goldman Sachs is emerging as the king of post-meltdown Wall Street. Already the nation's most powerful financial company before the credit crisis, the bank profited handsomely from Wall Street's rally and the recovering credit markets during the second quarter and distanced itself from the few competitors still standing. The result was a stunning profit of $2.7 billion -- even as the bank repaid $10 billion in federal bailout money. The total blew past what Wall Street analysts were expecting.
Gasparino: Stop Protecting Goldman Sachs We missed this when it happened but, via Zero Hedge, here's a great clip of Charlie Gasparino going off on Goldman Sachs (GS), and how even they're fallible. He seems to be insinuating that CNBC is protecting the bank from criticism right around the 3-minute mark. Either that or he's just speaking vaguely about all the adoration they receive for being so smart.
Goldman: Go Ahead And Wipe Out CIT, We're Fine Goldman Sachs has a $3 billion line of credit out to troubled small-business lender CIT Group. This, of course, has many recalling that Goldman was one of the biggest creditors to AIG, which received an enormous bailout from the federal government. Much of that was passed on directly to creditors such as Goldman, prompting calls that the government was really engaging in a covert bailout of AIG's creditors. Goldman said at the time that they had effectively hedged their exposure to AIG or held collateral that made their exposure to AIG minimal. Now they're saying the same thing about CIT, downplaying any risk to the firm if CIT draws down on its credit line and then goes into bankruptcy.
CIT Rises on Talks With U.S. Regulators About Lender’s Rescue CIT Group Inc. rose in New York trading and the cost to protect its debt against default fell after the lender said it’s in talks with regulators about a rescue. The lender’s stock jumped 36 cents, or 27 percent, to $1.71 at 9:42 a.m. in New York Stock Exchange composite trading, boosted by CIT’s statement that it was in “active discussions” with regulators about federal aid. CIT has $1 billion of bonds maturing next month, and the firm so far has been unable to persuade the U.S. to back its debt sales. Those talks continued yesterday, said Curt Ritter, a CIT spokesman.
Geithner Says Global Economy Faces Recovery Setbacks U.S. Treasury Secretary Timothy Geithner said the global economy probably will suffer setbacks during its recovery as nations adapt to a loss of wealth and a surge in public debt. “This crisis has been brutal in the extent and severity of damage to economies around the world,” Geithner said in a speech today in Jeddah, Saudi Arabia. “Given the extent of damage to financial systems, the loss of wealth, the necessary adjustments to a long period of excessive borrowing around the world, it seems realistic to expect a gradual recovery, with more than the usual ups and downs and temporary reversals.”
Geithner promises to defend dollar Tim Geithner, US treasury secretary, sought to assure Gulf nations on Tuesday about their holdings of treasury bills when he told Saudi business leaders that his country “has a special responsibility to play” in defending the value of the dollar. He also said that the US is committed to maintaining the openness of its economy to foreign investment and to expanding international trade. Mr Geithner, who is due to hold talks with King Abdullah and senior Saudi economic officials later on Tuesday, said his talks will focus on the two countries’ commitment to the recovery of the global economy, and efforts to speed up the G-20 reform process. Saudi Arabia is the only Arab member of the grouping of 20 major economic states.
It's Still the Debt, Stupid As pointed out in a recent Financial Times opinion piece by Nassim Nicholas Taleb and Mark Spitznagel, the core economic problem that we are facing "is that our economic system is laden with debt." In fact, as pointed out by the authors, the debt load is about triple the amount relative to the GDP levels of the 1980s. Given that Tabel and his colleague have been betting on debt-induced hyperflation becoming the next black swan event, and making them even more coin in the process, it might be easy to dismiss this as someone simply talking their book - which is probably somewhat the case. Yet the levels of the deficit spending and debt are unprecedented, and scary.
Regulation Every major industry in the world, including food, commodities, housing, transportation, medicine, energy, and money, is regulated at almost every level by government. Just listing the regulations pertaining to any single industry would take volumes. In the field of finance, the government regulates (among other things) the amount of interest each type of financial company can pay on loans, the amount that can be charged for loans, the way interest must be disclosed to borrowers, where finance companies can open offices, what their advertisements can and cannot say, what types of securities can be issued, what must be and what cannot be said about securities, who can sell them, and how the sellers can be compensated for their sales.
China's Well-Prepared; We're Not Meredith Whitney, the well-known banking analyst, upgraded her outlook on Goldman Sachs (GS) yesterday, resulting in the market as a whole making some gains. We have to give Ms. Whitney her due. After all, she was one of the first to call attention to the problems at Citigroup (C) and other banks, the weakness in the housing industry, and how these might affect the economy as a whole. However, we think the market's reaction to Whitney's comment highlights a serious problem in our nation. Investors today pay far too much attention to quarterly (if not daily) results, and not enough to the long-term picture.
China takes steps to break sway of the mighty greenback Reports of the US dollar's death have, so far, been greatly exaggerated. It is still, by far, the most liquid currency in the world. The US has the deepest and most liquid capital markets in the world, despite all its sub-prime and banking difficulties. The dollar is used on one side of the vast majority of currency trades. If someone wants to swap out of Brazilian reals into, say, Korean won, it's typically a two-step process n from reals into dollars and then from dollars into won. Central banks in the emerging world mostly hold their - in some cases, huge - foreign exchange reserves in the form of US dollars. It is, therefore, the international currency of choice. It remains the world's reserve currency.
Debt and Financial Scam's Six Syllables to a Savage Truth On December 9, 2008, $65 billion of investor money was at peace. On the fear / greed seesaw that is said to characterize investor emotion, fear was down on the ground, while greed was high in the sky, having all the fun. Greed was earning a steady 1% per month, making fear look like an over-cautious fool. On December 10, 2008, six simple syllables transformed that greed into lead, sending it crashing to earth while launching fear to the moon. The syllables were these: "It's all just one big lie," and they were spoken by Bernard Madoff, in an admission that his investment fund was nothing but an illusion and a fraud. They represented a savage truth that would wipe out the savings of thousands, and toll the bell for the rest of the world's investing public.
Worried about Future Inflation? Don’t Be What is most impressive is that all this is being accomplished without inflation (we are presently experiencing marginal deflation), without a major increase in the price of gold (it is only up 3% YTD and down 4% over the past month) or other commodities and without a declining U.S. dollar In fact, the USD is actually up 5.3% YTD vis-à-vis the Canadian dollar in which many of the commodity related stocks are denominated.
Excessive Speculation Defined The Commodity Exchange Act was passed in 1936. The legislation mandates that regulators prohibit “excessive speculation,” but never defines the term. In the current public debate about the role of speculation, there’s been some understandable unease as we all should feel discomfort at the thought of prohibiting any transactions in a free market system. It’s important to move towards a definition of “excessive speculation” if our policymakers are going to comply with existing law properly and if we are going to have functioning commodity markets.
What the Fed’s Exit Strategy Will Mean for the Economy Economics is not an exact science. It pales in comparison to mathematics because it contains a high component of art in its analysis. With that said, there are several principles that still apply. One such principle is: when the condition of an economy becomes overleveraged, it needs to experience consistently expanding GDP with unabated asset price appreciation and a falling currency, or it will become insolvent. A fall in economic activity leads to lower asset prices, which force the dumping of those assets held on leverage. Also, an increase in the value of money will increase the value of all debt making it much more difficult to repay. The resulting dumping of assets leads to a deflationary spiral and economic turmoil.
The Game Changer? Every once in a great while, something big comes along to upset the status quo. Sometimes the change is long overdue and welcome. I think we may soon witness such a game-changer in silver. As I briefly referenced last week, the new chairman of the CFTC, Gary Gensler, issued a statement on July 7, that I felt was very important. Upon further reflection and subsequent additional statements from Commissioner Bart Chilton, I am convinced that great change may be on the way. The statement from Chairman Gensler is clear; he is deeply concerned about and is soliciting your input on the matter of speculative position limits. In a moment, I will suggest how you can participate in the coming great change.
Memo to Congress: Check this before voting for 2nd stimulus Will lawmakers follow citizenry, or risk political suicide in 2010? A new poll reveals a strong majority of Americans oppose the idea of a second stimulus – and many voters say they would throw their own lawmakers out of office if they dared support another stimulus package. A Zogby/O'Leary Poll conducted Jue 10 to June 13 asked 4,420 voters, "Some members of Congress have said we need to jumpstart the economy with a second stimulus package. Do you favor or oppose Congress passing a second stimulus package?"
A Fine Time to Raise the Minimum Wage? To show you the kind of idiocy that passes for economics, The Wall Street Journal, in a story about the imminent rise in the minimum wage from $6.55 to $7.25 an hour, notes that the Economic Policy Institute “estimates that the minimum-wage increase will add $5.5 billion to the economy” which makes me laugh – Hahaha! – in a mocking-yet-scornful way as my humble way of saying, “These guys are idiots!” If another lousy 70 cents an hour will add $5.5 billion to the economy, then raise the minimum wage by $7 an hour and add $55 billion! Or raise the minimum wage by $70 an hour and add $550 billion! Hahaha! So I’ve got a real Hot Mogambo Tip (HMT) for these Economic Policy Institute (“a liberal think tank” says the WSJ) weenies: Wrong-o! Morons!
The Small Business Surtax The Obama Democrats pick income redistribution over job creation and economic growth. Jason Furman owes an apology to Michael Boskin, the Stanford economist who wrote a year ago on these pages that Barack Obama would raise American income tax rates nearly to 60%. Mr. Furman, then in the Obama campaign and now at the White House, claimed this was wrong and that Democrats would merely raise taxes back to their Clinton-era level. House Democrats are now proving that Mr. Boskin had it right, and before it's over even he may have underestimated how high taxes will go. In the middle of a recession and with rising unemployment, Democrats have been letting it leak that they want to raise U.S. tax rates higher than they've been in nearly 30 years in order to finance government health care.
Illegal. Illiberal. Ill-Fated. Why Washington shouldn't run Detroit On March 30, 2009, the president of the United States told an anxious nation: “Let me be clear: The United States government has no interest in running G.M.” If only he were telling the truth. One way you could tell Barack Obama was being less than honest was that the day before, he had fired General Motors Chief Executive Officer Rick Wagoner. This unprecedented hostile takeover of a former American manufacturing giant signaled that the basic social contract between U.S. government and private business was being ripped up on live television. The fact that Obama followed his unpersuasive declaration of disinterest with a stern lecture about G.M.’s product lines (“They must ask themselves: have they consolidated enough unprofitable brands?”) only confirmed the suspicion: Not only will this White House seize any company it deems to pose a “systemic risk” to the economy, but it will do so without regard to restraint, to the law, or to basic economic principles. All while dissembling enough to keep its most loyal political supporters distracted from the fact that robbing taxpayers to pay failed corporate executives is almost the definition of economic unfairness.
Guess What Really Brought Us out of the Great Depression? A grumpy President Obama says that the $787 billion dollar stimulus package “has worked as intended.” The President’s man at the Treasury, Tim Geithner, is also towing the party line. On Friday Turbo Timmy spoke of “substantial improvements” in trying to beat back the “worst recession globally we’ve seen in generations.” Why the defensive posturing? Because the White House is feeling touchy and irritable as the polling numbers sink. The rotten jobs market, it seems, has cut into Mr. Obama’s popularity. A poll of Ohio voters showed approval numbers falling from 62% to 49% in a mere two-month span. If the stimulus is “working,” then, heaven forbid how things might look had there been no stimulus at all. Or hold on, wait a minute. How might things have looked really and truly with no stimulus? What would have been different?
Is Income Inequality an "Existential Threat to Our Democratic Values"? A fascinating and typically clever new report from Cato scholar Will Wilkinson on income inequality argues (among other important, compelling points) that "intellectuals and policymakers...waste time and energy worrying that some people, who have had the opportunity to make the most of our institutions, have done too well" while ignoring larger, underlying social crises. From the summary: Recent discussions of economic inequality, marked by a lack of clarity and care, have confused the public about the meaning and moral significance of rising income inequality. Income statistics paint a misleading picture of real standards of living and real economic inequality. Several strands of evidence about real standards of living suggest a very different picture of the trends in economic inequality.
Five Months After Signing $787-Billion Stimulus, Obama Predicts Unemployment Will Continue Increasing for Months Five months after he signed an emergency $787-billion “stimulus” law designed to spur the economy and create jobs through a massive burst of deficit spending, President Obama said on Tuesday that he expects unemployment to continue to rise in the United States for several more months. Obama predicted continuing, rising unemployment while speaking with reporters at the White House after meeting with the prime minister of the Netherlands. Obama was about to leave for an event in Warren, Michigan, preceding a trip to Tuesday evening’s Major League Baseball All-Star game.
Destroying Jobs in Order to Save Them Obama's corporate tax "reforms" make a bad situation worse. President Barack Obama is very insistent on the need to “save American jobs.” The spending and the Buy American provisions of his massive stimulus package, approved by Congress in February, were meant to “create or save” millions of U.S. jobs. “Saving jobs” was also the stated goal of his recent pledge to eliminate tax advantages for companies that do business overseas. But instead of saving American jobs, Obama’s new corporate tax is apt to worsen what is already the highest unemployment since 1983 and make America’s companies even less competitive in the global marketplace.
Why creating jobs is so hard An economy built on bubbles looks healthy until all that froth disappears, exposing the rotten framework. A structural repair is needed, and it won't be quick or easy. Vice President Joe Biden recently acknowledged the administration's misreading of the weak economy. In view of his comments, I would like to update readers on my three-baseball-game analogy (introduced Nov. 3, 2008, in "Economy sinks as we save bankers") and note where we are now: Although we've managed to put the financial crisis behind us, the reality of the economic crisis is slowly becoming clearer to more and more people.
House bill to hit millionaires with 5.4 pct surtax A sweeping overhaul of the U.S. healthcare system to be announced on Tuesday in the U.S. House of Representatives will include a surtax on millionaires of 5.4 percent, congressional sources said.
Tax Increase on 'Rich' People Planned by House Democrats Would Strike More Than a Million U.S. Small Businesses More than a million small business owners and about two-thirds of the profits earned by U.S. small businesses would be hit by the income tax increase on the "rich" that House Democratic leaders want to enact to pay for the health-care reform plan President Obama wants passed this summer, a taxpayer watchdog says. Ryan Ellis, director of tax policy for Americans for Tax Reform, told CNSNews.com he calculated that 1.09 million of 21.5 million small business owners would see a one- to three-percent surtax on their profits in order to fund the House of Representatives’ trillion-dollar health care reform bill.
House reform requires health insurance Tax on wealthy helps fund plan Americans would face new requirements to obtain health insurance or face hefty tax penalties as part of a $1.5 trillion health care reform plan introduced by House Democrats on Tuesday that will be paid for, in part, by a new 5.4 percent tax on the wealthiest Americans. Employers would have to provide coverage to employees or face penalties of their own under the 1,018-page bill, released by Democratic leaders and chairmen of three committees that share jurisdiction over health care. It would also create a public health insurance program and impose a series of new regulations on the insurance industry, including a ban on denying coverage of pre-existing conditions.
House Democrats vow healthcare plan by August U.S. President Barack Obama's plans to overhaul the $2.5 trillion healthcare industry got a boost on Tuesday as Democrats in the House of Representatives offered sweeping legislation and predicted passage on schedule by August. House Democratic leaders released their 1,000-page proposal which breaks new ground for the United States in healthcare by offering a government insurance option that would compete with private insurers. A healthcare overhaul is considered central to the success of Obama's administration, and he has pressed the Democratic-led Congress to move swiftly on legislation to provide insurance coverage for all Americans, control soaring medical costs and improve quality of care. He hopes to sign the bill by October.
Obama Prods Top Democrats to Pass Health-Care as Momentum Slows President Barack Obama is pressing top Democratic lawmakers to move forward on overhauling the U.S. health-care system amid signs momentum for the legislation is slowing. Obama summoned Senate Majority Leader Harry Reid, Senate Finance Committee Chairman Max Baucus, House Speaker Nancy Pelosi, House Ways and Means Committee Chairman Charles Rangel and House Majority Leader Steny Hoyer to the White House yesterday to push for action before Congress takes its August break. “We are going to do health care before we leave,” Reid, a Nevada Democrat, said at the Capitol following the meeting.
House releases healthcare overhaul bill The healthcare overhaul proposal offered on Tuesday by U.S. House of Representatives' Democrats will include an extra 5.4 percent tax on those earning more than $1 million. One congressional aide said that would bring the top tax rate for the wealthy to 45 percent. The 1,000-page healthcare legislation will be considered by three House committees with an aim to finish work in the House by August. President Barack Obama, who has made the healthcare overhaul his signature domestic policy issue, voiced his support for the proposal and said it would help control skyrocketing costs that have reached $2.5 trillion a year.
Obama to Propose $12 Billion in New Community College Spending President Barack Obama will propose $12 billion in new federal spending for community colleges that the administration says will help prepare U.S. workers for 21st- century jobs. Obama will announce his plan in a speech today at a community college in Michigan. His initiative is intended to stimulate renovations at schools, expand curricula and increase by five million the number community-college graduates in the country by 2020. James Kvaal, an Obama economic policy adviser, said the announcement highlights the president’s “view of the centrality of community colleges in providing higher education.”
Moody's downgrades status of California bonds Schwarzenegger warns of 2,000 more layoffs in California Gov. Arnold Schwarzenegger told state employee unions Tuesday his administration would cut another 2,000 jobs to help close California's $26.3 billion budget deficit. Meanwhile, Moody's Investor Services downgraded California bonds to near-junk status, from A2 to Baa1, and placed the state's credit rating on watch for possible further reductions. Moody's said the budget deadlock had put constitutionally required payments to bond holders at risk. "If the state gets to a position where it is unable to make priority payments, a multi-notch downgrade may result," Moody's said in a statement. The state's cash crisis has forced state Controller John Chiang to issue nearly 130,000 IOUs worth a total of $436 million to state vendors so far.
Many banks turning away California IOUs If you have a California IOU you would like to cash, your options are much more limited than they were last week. Major banks including Bank of America, Wells Fargo, Chase and Union Bank no longer will take the state's scrip from customers. However, as reported Saturday, Citibank says it will accept the IOUs (from customers) through Friday. Bank of the West says it plans to allow customers to deposit the paper indefinitely. Some smaller banks, and many credit unions, also continue to redeem the IOUs from members for full cash value.
Obama says lost auto jobs are gone President Barack Obama took a dose of reality to Michigan on Tuesday, saying that thousands of jobs lost to the auto industry's downturn are not coming back and it is time to prepare for new industries. Traveling to Michigan, a state hit hard by job losses as Detroit's Big Three automakers have reeled from the U.S. recession, Obama planned to promote a $12 billion initiative to boost community colleges and increase the graduation rate. "(The) hard truth is that some of the jobs that have been lost in the auto industry and elsewhere won't be coming back," Obama was to say, according to prepared remarks released by the White House.
Producer prices up twice expectations Index jumps 1.8% in June on large rise in energy prices. Sharpest gain since November 2007. U.S. producer prices jumped by twice as much as expected in June on a big rise in energy prices, a government report showed Tuesday. The Producer Price Index, which measures prices received by farms, factories and refineries, increased by 1.8%, the steepest gain since November 2007, the Labor Department said. Core prices, which strip out volatile food and energy costs, rose a much greater-than-expected 0.5%, boosted by car and truck sales.
Stores Take Christmas In July More Seriously A small display of snow-topped villages and ornaments sits nestled between the mattress and hardware departments at the Sears store in Manassas. Next week, Toys R Us stores in the area are inviting children to decorate Christmas cards and slurp away on candy canes while their parents shop Christmas sales. Yes, it's July, but some stores have decided that to get ahead of the poor economy they need to start now on the holiday shopping season. Nick White, a consultant in the Gerson Lehrman Group network, called the strategy a good bet for the struggling retail industry.
Obama mulls rental option for homeowners U.S. officials are weighing a plan to let borrowers who have fallen behind on mortgage payments avoid eviction by renting their home instead, sources familiar with the administration's thinking said on Tuesday. Under one idea being discussed, delinquent homeowners would surrender ownership of their homes, but would continue to live in the property for several years, the sources told Reuters.
Jobless benefits run out in record numbers After final payments, folks still seeking work turn to already-strapped aid agencies. With the recession midway through its second year, the number of people running out of jobless benefits has reached a record high. Just as first-time claims for unemployment insurance surged in the sour economy, final payments – made when laid-off workers have exhausted their initial benefits and all extensions – are climbing, with Mecklenburg County numbers more than double from a year ago. As a result, more people are seeking help from already strained assistance agencies and trying to find creative ways to generate income, from babysitting to braiding hair to refinancing loans to taking on roommates.
Back-to-school spending to drop 7.7% Families say they'll spend less than they did last year to get kids ready for the fall, relying heavily on sales and coupons. Back-to-school spending is set to slip 7.7% this year, according to a survey released Tuesday. Thanks to pay cuts and job losses, cash-strapped consumers are planning to spend less on everything from pens and paper to fall clothing. The average family with students in grades kindergarten through high school is expected to spend $548.72 on school supplies, down from $594.24 in 2008, according to the National Retail Federation.
Mexico Faces ‘Unsustainable’ Gap, Morgan Stanley Says Mexico’s fiscal accounts may be heading toward “unsustainable deficits” as a decline in oil production cuts government revenue, according to Morgan Stanley. Mexico may need to curb spending growth to keep the deficit in check should the government fail to push through changes to tax laws that buoy revenue, Morgan Stanley analysts Luis Arcentales and Daniel Volberg wrote in a report published today. The prospect that Mexican legislators can increase taxes, broaden the tax base, or tax food and medicine has become “more challenging” after President Felipe Calderon’s National Action Party lost its status as the biggest in the lower house in midterm elections held July 5, Arcentales and Volberg wrote.
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Tues 07.14.2009
Gold As Insurance In spite of the sharp drop in shares over the past nine years or so, most investors remain firmly committed to common stocks. Mutual fund statistics show that very few holders have pulled their money out of their funds. And the recent “Big Money Poll” in Barron’s shows that the big guys are even surer than they were even at the very top. It is clear that investors have been stirred, but far from shaken, by the decade’s decline and by our faltering economy. And gold? To many investors and even professionals, buying gold is like traveling to Myanmar or northern Pakistan: Few dare to venture there. The truth is, that to our Ivy League and Keynesian educated financial community, gold is viewed as a superstitious relic.
The U.S. Mint Again Suspends Gold Coin Sales: Is It Really Out of Gold I may have missed one or the other suspension of gold coin sales by the US Mint. But here we go again: Checking the online store of the US Mint I came across notices of delays and suspensions with golden Eagles and Buffalos, with waiting times ranging from 'weeks' and to 'await further notice'. The US Mint press room has entirely omitted this confirmation about the tightness of the bullion market which enjoys upward momentum thanks to the thousands of big problems the world faces. Checking on 24kt Buffalo gold coins, the Mint saddened me with this statement: Production of United States Mint 2009 American Buffalo Gold Proof Coins has been delayed because of the limited availability of 24-karat gold blanks. The 2009 American Buffalo One-ounce Gold Proof Coin is scheduled to go on sale in the second half of the 2009 calendar year after an acceptable inventory of 24-karat gold blanks can be acquired. The release date, once established, will be posted to the 2009 Scheduled Products Listing.
Gold, Silver, Economy + More . . . . We are now almost six months into the depression approaching a 1932 scenario. America is now the world’s biggest debtor. The US has had a fiat currency for 38 years and major trade deficits for more than 30 years. Is it any wonder we are in depression? Is it any wonder the dollar is under pressure even though our government supports it at every turn in the market?
Gold, Silver Gain as Dollar Drop Boosts Demand; Platinum Rises Gold prices climbed as the weakening dollar raised demand for alternative assets. Silver also gained, after touching a 10-week low, and platinum advanced. The U.S. Dollar Index, a basket of six major currencies that measures the greenback’s value, fell as much as 0.2 percent. Gold tends to rise when the dollar drops, as some investors buy precious metals to preserve value. “The dollar may be the most important driver in the gold market,” Eliane Tanner, an analyst at Credit Suisse Group AG in Zurich, said today by telephone.
Unlocking the Money Matrix - The Summers Gold Price Suppression Scheme "Gold is the sovereign of all sovereigns." - Democritus, Greek scientist and philosopher, circa 430 BCE. July 24, 1998, was an epic day for the global financial system. In "The Money Matrix - Bring Light to Dark Derivatives! (PART 11/15)," we reviewed the consequences of FED Chairman Alan Greenspan's decision to allow negotiation of OTC derivative contracts without the use of an exchange to make transactions transparent and reduce counterparty risk. Greenspan also stated: "Nor can private counterparties restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise."
Shiny days ahead for silver US Federal Reserve credit dropped US$58.5 billion last week, taking the total amount of Federal Reserve credit that they created to a hefty $1.997 trillion. Now, one does not have to be a paranoid, gold-bug, gun-nut, Austrian-school economist lunatic moron like me to see that if you take this weekly decrease in Fed credit and multiply it by 52 to get the yearly total, it comes to a staggering $3.042 trillion a year, which be a whopping 40% decrease in the M2 money supply, which would be plenty bad enough if that were the end of it, but this is Fed credit, which is the stuff of legend where it appears as if by magic - poof! - in the books of the banks (although it is not magic that put it there, but the mere whim of Fed chairman Ben Bernanke), which the banks use to lend out gigantic multiples of that increase in credit! Gaaahhh!
Peter Schiff on CNBC 13 July 09
Minimum Wage, Maximum Stupidity In a free market, demand is always a function of price: the higher the price, the lower the demand. What may surprise most politicians is that these rules apply equally to both prices and wages. When employers evaluate their labor and capital needs, cost is a primary factor. When the cost of hiring low-skilled workers moves higher, jobs are lost. Despite this, minimum wage hikes, like the one set to take effect later this month, are always seen as an act of governmental benevolence. Nothing could be further from the truth.
Fed Independence or Fed Secrecy? Last week I was very pleased that hearings were held on the independence of the Federal Reserve system. My bill HR 1207, known as the Federal Reserve Transparency Act, was discussed at length, as well as the general question of whether or not the Federal Reserve should continue to operate independently. The public is demanding transparency in government like never before. A majority of the House has cosponsored HR 1207. Yet, Senator Jim DeMint’s heroic efforts to attach it to another piece of legislation elicited intense opposition by the Senate leadership.
Geithner Urges Servicers to Boost Loan Modifications The US Treasury Department sent a strong message to mortgage servicers participating in the Home Affordable Modification Program (HAMP), urging a ramp-up in renegotiating loans, according to a letter signed by Treasury secretary Timothy Geithner and Housing and Urban Development (HUD) secretary Shaun Donovan. The HAMP distributes Troubled Asset Relief Program (TARP) funds for servicer, borrower and lender/investor incentives on successful modifications initiated.
Are mortgage rates headed back below 5 percent? Mortgage rates have been uppermost on the minds of many potential homebuyers and those who plan to stay put but have been itching to lower monthly payments. A short time ago Fed Chief Ben Bernanke's plan to buy close to $2 trillion in mortgage-backed securities and longer-term Treasuries was working as planned, affording many the chance to lock in at rates below 5%. Truly, that was an historic opportunity.
Treasuries Record Demand Damps Concern Supply to Grow Bond investors across the country are snapping up 10-year Treasury notes as expectations for a U.S. economic recovery this year disappear. Firms from New York-based BlackRock Inc. to Franklin Templeton Investments in San Mateo, California, are turning more bullish a month after yields on Treasuries rose to the highest since October. Declining consumer confidence, falling stocks and unemployment climbing toward 10 percent has overcome concern that record auctions of government debt will overwhelm demand. Barclays Plc estimates $1.1 trillion more sales by the end of the year, on top of the first half’s $963 billion.
U.S. Budget Gap Exceeds $1 Trillion for Fiscal Year The U.S. budget deficit topped $1 trillion for the first nine months of the fiscal year and broke a monthly record for June as the recession subtracted from revenue and the government spent to rejuvenate the economy. The shortfall for the fiscal year that began Oct. 1 totaled $1.1 trillion, the first time that the gap for the period surpassed $1 trillion, Treasury figures showed today in Washington. The excess of spending over revenue for June was $94.3 billion, the first deficit for that month since 1991, according to data compiled by Bloomberg.
We Need More Stimulus and More Government Borrowing, Shiller Says The political war over stimulus heated up this weekend: Several Republicans declared the $787 billion plan passed in February a "flop," while President Obama defended the package in a Washington Post op-ed piece: "It was, from the start, a two-year program, and it will steadily save and create jobs as it ramps up over this summer and fall," the President declared. "We must let it work the way it's supposed to, with the understanding that in any recession, unemployment tends to recover more slowly than other measures of economic activity."
Dollar Near One-Week Low Against Euro Before Goldman’s Earnings The dollar traded near a one-week low against the euro on speculation Goldman Sachs Group Inc. will report stronger earnings today, spurring investors to increase holdings of higher-yielding assets. New Zealand’s dollar gained against 13 of the 16 most- active currencies after Reserve Bank Governor Alan Bollard said the nation’s economy is likely to start recovering earlier than many of its trading partners. South Korea’s won rose the most in more than two months after a rally in U.S. stocks bolstered investor demand for Asian equities. The euro earlier advanced against the yen before a German report that economists said will show investor confidence climbed to a three-year high.
Why the Fed's Power Should Not Be Increased Somehow, anything written by Edmund L. Andrews these days seems tainted as a result of him telling the world about his Personal Credit Crisis in the New York Times a while back and then hearing subsequent revelations regarding his wife's credit history. Nevertheless, he does fill in a few very important details on Thursday's Congressional hearing, in which elected officials queried a panel of experts on the possibilities of expanding the regulatory power of the Federal Reserve and opening up the central bank's books.
Mathematics Versus Economic Logic The problems of prices and costs have been treated also with mathematical methods. There have even been economists who held that the only appropriate method of dealing with economic problems is the mathematical method and who derided the logical economists as "literary" economists.
U.S. mulling mortgage aid for unemployed President Barack Obama is mulling new ways to delay foreclosure for jobless homeowners who are unable to keep up with monthly payments, an administration official said on Monday. The official told Reuters it was reasonable for policymakers to consider options for loan forbearance -- allowing borrowers to delay, defer or skip payments -- that are more effective than those currently available in the private sector. The number of failing home loans has been climbing for three years as risky borrowers have defaulted on their easy-to-get loans, property values have sunk and the unemployment rate has climbed.
Geithner sees growth resuming but risks ahead There is a good chance that the United States and other leading economies will start growing again over the next few quarters, but significant risks to the outlook remain, U.S. Treasury Secretary Timothy Geithner said. "In my view there are still significant risks and challenges ahead," Geithner said when asked on Monday if he was concerned about the possibility of a double-dip recession. "We have a very powerful set of policies in place, coming on stream. I think there is a very good chance we will see the U.S. economy and the world economy get back to recovery, get growing again, over the next few quarters."
Geithner to DeMint: Bailouts may never end, no exit plans Sen. Jim DeMint (R-SC) questions Treasury Secretary Timothy Geithner during the Senate Banking Committee TARP Oversight Hearing on whether the bailouts are permanent and if the Obama administration has any exit plans for ending Washington control of the markets. Geithner says Treasury can use the $700 billion indefinitely and there are no exit plans.
Geithner to reassure Gulf allies on dollar assets Treasury Secretary Timothy Geithner will seek to reassure Gulf Arab states this week that U.S. dollar assets they hold in large quantities remain a strong investment. A recent decline in Saudi foreign assets shows the purchase of U.S. treasuries by Washington's Gulf allies, five having currencies pegged to the dollar, at levels seen in the past decades should no longer be taken for granted.
Stimulus Is Bankrupt Antidote to Failed Stimulus The Obama administration began to prepare the ground for another stimulus package last week, amid countless signs that the first one isn’t working. While the president’s favorite partisan economists held hands and chanted in unison from the Keynesian prayer book, Warren Buffett captured the mood of the American people when he said that the first stimulus package “was sort of like taking half a tablet of Viagra and then having also a bunch of candy mixed in.” The simple arithmetic of the February stimulus suggests that Buffett got it wrong. It wasn’t half a tablet of Viagra with candy; it was a tiny dose of a mysterious herbal remedy, with a stick of sugarless gum.
Gerald Celente switch from the Dollar
CIT Group Says Its Failure Risks Demise of Customers CIT Group Inc., the century-old lender that hasn’t been able to persuade the government to back its debt sales, says its demise would put 760 manufacturing clients at risk of failure and “precipitate a crisis” for as many as 300,000 retailers. A collapse would ripple across the “small and medium-sized businesses who rely on CIT to operate -- to pay their vendors, ship goods to their customers and make their payroll,” the New York-based lender said in internal documents obtained by Bloomberg News that make the case for its importance to the U.S. economy. CIT spokesman Curt Ritter declined to comment on the documents.
Geithner Too Much Of A Wimp Not To Bail Out CIT Despite the tough talk about CIT Group not being systemically important enough to be bailed out by the government, it looks like the bailout is coming. Tim Geithner all but telegraphed this today when he said he was closely monitoring the situation from his trip abroad. Now the Wall Street Journal reports that U.S. government officials are in "advanced talks" about aiding CIT Group.
“Another Bubble” In Housing? It Could Happen, Says Yale’s Robert Shiller The slowing rate of decline in home prices is likely to continue but the housing market is "still in an abysmal situation," says Robert Shiller, a professor of economics at Yale. The co-creator of the S&P Case-Shiller Index, which tracks national housing prices, says the housing market could "languish for many years," due to the "huge inventory" of unsold holds, "shadow inventory" of homes kept off the market by banks and other potential sellers, and "a lot of financial problems."
Debt Still Swallowing Up Our Cash Americans are finally feeling less stressed about their debt payments, but make no mistake, paying off debt will continue to be a major suck on finances for some time. As this data from the Fed shows, household debt service ratios have come of their peak, but are still well above historical levels for the last three decades. Until this gets in line, don't expect a rebound in spending.
Goldman executives sold $700m of stock Executives at Goldman Sachs sold almost $700m worth of stock following the collapse of Lehman Brothers last September, according to filings with the Securities and Exchange Commission. Most of the sales occurred during the period in which the investment bank enjoyed the support of $10bn from the troubled asset relief programme. The surge in selling among Goldman partners, at a time when the US government had thrown a lifeline to Wall Street, is likely to draw criticism from lawmakers on Capitol Hill. Having survived the crisis, the bank is expected to report strong second-quarter earnings on Tuesday on rebounding trading profits.
The Coming Nantucket Real Estate Crash We recently had the chance to do some first-hand investigative reporting on the crash of the Nantucket real-estate market. Here's what we found. (Just take the tour >) (In case you don't care about Nantucket in particular--most people who don't live or go there don't--think of Nantucket as a microcosm of the next segment of the real-estate market that's poised to collapse: The super-expensive fabulously wealthy communities who heard for years that they were immune.) Some analysts think the high-end will be the next segment of the real-estate market to crash. And the situation on Nantucket certainly supports this view.
California ills could give US headache California’s fiscal crisis is in danger of becoming a serious headache, not just for the state and its feuding politicians in Sacramento, but for the entire nation. In public, federal government officials talk about California’s problems as if they were ringfenced – a crisis for the state but with few national ramifications. They know the slightest whiff of federal intervention would take away the incentive for California’s politicians to agree on tough spending cuts and tax increases.
You Go First Barack! Today, I will more than likely surprise a number of you. With that said, I will support President Barack Hussein-Obama’s Government health plan, “The Moment That He Stands In Line And Picks Up His Insurance Card.” There is one other stipulation—see I can be as narcissistic as this guy. Every last one of those “Me First” Democrat Congressmen and Senators will also have to sign up, and accept “Obama Care.” That is my demand, Mr. Obama!
BOOMERS – WINTER IS COMING Winter is coming. Are you prepared? Americans see time as their enemy. Most Americans have bought into a view of the past and future as linear. When you observe the world in linear way and things are going well, the population is happy and confident. If you view the world in a linear way and things are going badly, the population sees nothing but terrible times ahead. This linear outlook of history and the future is not rational or supported by facts. I’m convinced that world history is not on a linear path towards Armageddon and the Rapture. This belief is preached by many of the mainstream religions, but the truth is that we’ve seen this movie before and it doesn’t end in the 2nd Coming of Christ. The American belief in a destiny of never ending progress will undergo its 3rd major crisis period since its founding. The resolution of this crisis is 10 to 20 years in the future. The outcome will remain in doubt until the definitive resolution.
Airlines, Already Suffering, Brace for Further Woes The airline industry is in the midst of one of its most wrenching summers ever. And the fall and winter may be even worse — unless people start to fly again. While the airlines have been struggling for more than a year as leisure travelers pulled back on spending, the industry has been battered from all directions since the financial system nearly collapsed last September.
Obama’s Chief Auto Adviser Steps Down Steven Rattner is quitting his post as President Obama’s chief adviser on the troubled automobile industry at a time when an investigation into his former Wall Street firm’s role in a scandal involving public pension funds has intensified. Mr. Rattner, who has won plaudits for directing the rapid restructuring of General Motors and Chrysler, has been under a cloud since shortly after arriving in Washington in late February after it was disclosed that his firm, the Quadrangle Group, made payments to middlemen that helped it win state pension business.
Senate backs 700 miles of fencing on border Real fencing to be used in lieu of vehicle barriers and high-tech equipment The Senate voted Wednesday to require actual fencing along 700 miles of the border with Mexico rather than vehicle barriers and high-tech equipment. The plan by Sen. Jim DeMint, R-S.C., won approval by a 54-44 vote as the Senate began a second day of debate on a $42.9 billion measure to fund the Department of Homeland Security for the budget year beginning Oct. 1.
Is Washington Playing a Deeper Game with China? After the tragic events of July 5 in Xinjiang Uyghur Autonomous Region in China, it would be useful to look more closely into the actual role of the US Government’s ”independent“ NGO, the National Endowment for Democracy (NED). All indications are that the US Government, once more acting through its “private” Non-Governmental Organization, the NED, is massively intervening into the internal politics of China. The reasons for Washington’s intervention into Xinjiang affairs seems to have little to do with concerns over alleged human rights abuses by Beijing authorities against Uyghur people. It seems rather to have very much to do with the strategic geopolitical location of Xinjiang on the Eurasian landmass and its strategic importance for China’s future economic and energy cooperation with Russia, Kazakhastan and other Central Asia states of the Shanghai Cooperation Organization. The major organization internationally calling for protests in front of Chinese embassies around the world is the Washington, D.C.-based World Uyghur Congress (WUC).
China doubles down in Africa "Obama to Africa: Drop Dead," echoing the famous admonition of president Gerald Ford to a cash-strapped New York City in the 1970s, was, for all practical purposes, the message the American president delivered to the African continent in Ghana on Saturday. Barack Obama, mindful of the shaky United States domestic constituency even for the bailout of the American economy, and loath to display favoritism to his father's home continent, decided against investing any political capital in a call to provide significant amounts of assistance to sub-Saharan Africa during the current global recession. His rather empty declaration, "We must start from the simple premise that Africa's future is up to Africans," provided little consolation or inspiration for the poorer nations of Africa, which are reeling from the balance-of-payments, aid, investment and developmental consequences of the West's catastrophic exploration of the extremes of sophisticated financial leverage.
The great invisible wall in China Most of the media reports will not present a thorough and balanced analysis of the situation in China's Xinjiang region, a vast area where stability and development are not only strategic for the People's Republic of China but are also key elements of Central Asia's fragile equilibrium. Therefore, 16 months after the violence in Tibet, Urumqi's tragic clashes will affect China's image in the West. On the backdrop of a global financial and economic crisis, the understanding gap between Beijing and the West is widening. It is urgent to reverse this trend.
Russia Predicts Deeper Recession as Exports Plummet Russia’s economy may shrink as much as 8.5 percent this year after exports plummeted and companies depleted stockpiles during the global slowdown, the Economy Ministry said. The government revised its May forecast for an 8 percent contraction. Gross domestic product probably fell 10.2 percent in the first six months and may slump 6.8 percent in the second half, the Moscow-based ministry said in its forecast for the next three years, approved by the government today. Exports tumbled 47.4 percent through May, it said.
The Fed Under Fire The Federal Reserve is one of the most powerful and secretive institutions in Washington, long considered beyond the reach of lawmakers. But now, as details emerge of how the Fed secretly doled out more than a trillion dollars during the financial crisis, a rare bipartisan movement in Congress demands that the Fed be held accountable.
Refuting the Deflation Scare How can there be Deflation, when Inflation is raging? . . . . When someone borrows money from a bank, that bank creates the money, lends money out, and that money gets spent, and thus, given to someone else. That someone else, the third party, still has the money, or they spend it, giving it to 4th, 5th, and 6th parties, and that money is NEVER destroyed. So when the bank can't get repaid, no money is destroyed, it's only the bank's balance sheet that is harmed. Now, if that bank were allowed to go bankrupt, and if that bank could not pay out depositors, who thought they had money with the bank, which then would disappear, yes, then we would have deflation. But it's a weird kind of deflation, because the amount "destroyed" would exactly match what they lent out in the first place, which was originally created, so it would be a "push".
A Silver Dream I had a dream last night. A silver dream. It all starts with a regime change in the Latin American republic of La Plata. The new president is swept into office on the heels of 2000% inflation by an electorate fed up with IMF-induced bank failures. On his second day in office, El Presidente appoints a new central bank governor, an economist and former labor leader, who quietly informs the central bank's silver lease counterparties that the leases will no longer be rolled over. The silver must be returned at the end of the current lease term, 55 days hence, or the central bank will go public with announcement of the default. But the physical silver cannot easily be repaid, because it is long gone, having been sold into the spot market and used in industrial production a decade earlier. So the counterparties, large New York firms, have a challenge.
Medvedev sees single currency dream in G8 coin gift Even if Russia's call for a global currency failed to gain much traction at a G8 summit, President Dmitry Medvedev took home a coin meant to symbolize that the dream may one day come true. The Russian leader proudly displayed the coin, which bears the English words "United Future World Currency", to journalists after the summit wrapped up in the quake-hit Italian town of L'Aquila. Medvedev said that although the coin, which resembled a euro and featured the image of five leaves, was just a gift given to leaders it showed that people were beginning to think seriously about a new global currency.
How To Create a New World Reserve Currency For several months, there have been news reports of announcements by bureaucrats in China and politicians in Russia about the need for a new reserve currency to replace the U.S. dollar. One suggestion: substitute the non-currency known as the SDR (special drawing rights) of the non-governmental, non-central bank IMF (International Monetary Fund). No bureaucrat or politician recommends that his own nation's currency replace the dollar. This is strange, on the face of it. The United States possesses a unique series of advantages as a result of its reserve currency status. These include the following:
Fed Gets It Wrong, Credit Crisis Losses Rising Everywhere Mike Larson writes: Remember when policymakers at the Federal Reserve told us in 2007 and 2008 that the credit problems were "contained" to the subprime mortgage sector? Or when then-Treasury Secretary Henry Paulson spouted the same line? Oops. We've already established how those guys were dead wrong about home loans. Indeed, the delinquency rate on U.S. mortgages surged to a record 9.12 percent in the first quarter of this year. Late payments rose in ALL categories, including prime fixed-rate loans, the absolute "cream of the crop" in the mortgage world. Now, it's clear they were dead wrong about the entire credit market! Credit losses and delinquencies are rising anywhere and everywhere, and I've got the numbers to prove it.
Senator Jim Bunning Questions Treasury Secretary Tim Geithner U.S. Senator Jim Bunning questions Treasury Secretary Tim Geithner about the government's response to the financial crisis at a Budget Committee Hearing on March 12, 2009.
Questioning Geithner on Budget (3/12/2009) Senator Mike Crapo questions Secretary of Treasury Tim Geither on deficit reduction and tax policy at a hearing held by the Senate Budget Committee.
Fed Deflation Propaganda to Meet Wealth Destroying Inflation Howard S. Katz writes: The Federal Reserve is lying about the nation's money supply (M1). The current figure for money supply is being given as $1.6 trillion. The actual number is $2.34 trillion. The reported number is equivalent to an increase of 16% over the past year. The actual number is equivalent to an increase of 70% over the past year. This compares with the nation's high money-supply increase of 16.9% in 1986. However, the monetary base is a part of the money supply. How can the part exceed the whole? (Money is created in 2 basic steps. First, the Federal Reserve prints up paper money. This is called special money and is usable by private banks as reserves. It is treated in the system in the way gold used to be.
Mortgage Bankers: Bring Back The No-Doc Loan Realtor.org: No-doc loans are particularly hard to get, locking out people whose incomes are derived from investments or who are able to tax-shelter significant dollars. The California Mortgage Bankers Association spokesman Dustin Hobbs says the industry understands that banning most alternative financing isn't the long-term answer. "It's a reaction to the current environment," he says. "There's such a lack of appetite for risk right now in general that any product viewed as having any sort of risk at all has a tough hill to climb." Chris George, president of CMG Mortgage, predicts that no-docs and other nontraditional loans will be back within the next six months as lenders gain confidence. "As with injuries, as with your credit, as with the economy, time heals all wounds," he says.
Headed to National Socialism It was common on the left to intimate that George W. Bush was like Hitler, a remark that would drive the National Review crowd through the roof but which I didn't find entirely outrageous. Bush's main method of governance was to stir up fear of foreign enemies and instigate a kind of nationalist hysteria about the need for waging war and giving up liberty through security. Hitler is the most famous parallel here, but he is hardly the only one. Many statesmen in world history have used the same tactics, dating back to ancient times. Machiavelli wrote in his Art of War advice to the ruler: "To know how to recognize an opportunity in war, and take it, benefits you more than anything else."
WORLD GLOBALIZATION OF THE BANKING & REGULATORY STRUCTURE PART 2 Concentrating Total Financial Power at the Bank For International Settlements and the Financial Stability Board There are those who have been predicting a time when there would appear a world government structure. That time is here. Many, however, have predicted that it would be political in power. That is not necessarily so. Although the United Nations has been an organizing power worldwide to harmonize national law with international law, they do not issue or print money-for that is the role of central banks. With the new and vast empowerments being given to the central banks of the world and with the restructuring of the Financial Stability Board, it appears that world government is financial and economic. The old adage is true, "He who owns the gold makes the rules."
Geithner committed to strong dollar as reserve currency US Treasury Secretary Timothy Geithner said Sunday he is not concerned that the US dollar is weakening as a reserve currency, despite recent criticisms from China, Russia and France. "I actually don't worry about that," Geithner said in an interview on CNN. "In part because if you just look at the response of the world as we go through this period of time, when people are most concerned about risk, generally they want to be investing in the most liquid, safest market," he said.
Bunning says Treasury Secretary Tim Geithner should resign or be fired - Senator Jim Bunning discusses the AIG bailout and says Treasury Secretary Tim Geithner should resign or be fired in a interview with Stuart Varney on the Fox Business Network.
The Great Credit Contraction Cometh "In a fundamental shift, consumers are saving rather than spending," notes the Los Angeles Times. This is the shift we've been talking about for months. The great credit expansion of 1945-2007 is over. Now cometh the great credit contraction. During the bubble years, more and more credit produced less and less real prosperity. It was as if you were borrowing more and more, to invest in your business or merely to increase your standard of living, but your income didn't rise fast enough to keep up with the interest payments. In 2005, Americans saved nothing. Not even aluminum foil or string. Now, the savings rate is approaching 5% of disposable income - a big turnaround.
Does 5 Trillion of New Debt Mean End of the Recession? There is no doubt that the US is in financial trouble. Those talking of a strong recovery are just not dealing with reality. But the US is in better shape than a lot of countries. This week, we begin by looking at Japan. I have written for years about how large their debt-to-GDP ratio is, yet they keep on issuing more debt and seemingly getting away with it. But now, several factors are conspiring to create real problems for the Land of the Rising Sun. They may soon run into a very serious-sized wall. And it is not just Japan. Where will the world find $5 trillion to finance government debt? We look at some very worrisome graphs. Those in the US who think that what happens in the rest of the world doesn't matter just don't get it. There is a lot to cover in what will be a very interesting letter. I suggest removing sharp objects or pouring yourself a nice adult beverage.
A Prescription for America As I view the situation that America is currently in, I cannot help myself from being extremely pessimistic. I would like to be optimistic but I can't. I don't regard myself as a pessimist; I prefer to think of myself as a realist. In a nutshell the reasons that cause my pessimism are: Approximately 50% of the eligible voters in the United States pay no income tax whatsoever. These voters overwhelmingly vote for public officials and programs that they perceive will improve their wellbeing. They have no concern for private property rights, the U.S. Constitution, or the fiscal condition of the country. It is not that they wish to harm the country, they just vote for the official or program that they feel will be of the greatest benefit for them.
Ron Paul on Reuters News - Audit the Federal Reserve !! July 08/09
Over Two-Thirds of Chinese Economists Favor Gold Over US Bonds In a survey of major Chinese economists, more than two-thirds are reportedly bearish on the prospect of China increasing its holdings of US government bonds, and believe instead the nation should putting more of its hard-earned into gold. According to a China Business News survey of 70 Chinese economists (including one foreign economist), the exact figure is 71.4% anti-bonds and pro-gold. The use of China's huge foreign exchange reserve is a topic of concern and controversy. The remaining 28.6% of those polled believe China should continue to buy U.S. Treasury bonds. 38.6% think that China should not continue to buy, but also should not to sell US bonds. 32.8% believe that China should unload the bonds, 22.8% of whom think we should have a slight sell-off, while 10% think China should drop them like a bad habit.
Beijing's Fad of US Dollar Bashing China has become the world’s main battlefield in the challenge to the dominance of the US dollar. At a recent global think tank summit held in Beijing by the China Center for International Economic Exchanges, China’s official think tank, voices for “international currency”, and “global supervision” sounded frequently, and some scholars proposed a special global currency meeting during the World Expo in 2010. “The world’s economic organizations are globalized, while political organizations are regional, or at state level,” stated the almost 90-year-old former US Secretary of State Henry Kissinger, pointing out a basic world contradiction at the meeting. Robert Mundell, known as the “father of euro,” said there was no doubt that all needed a single world currency.
The Mutation of the China-US Strategic "Economic" Dialogue The Strategic Economic Dialogue (SED) is undergoing a significant de novo mutation (not inherited from either parent). It is changing from an economic platform to a broader array of issues. The SED was crafted by President George W. Bush and President Hu Jintao as biannual meetings, alternating between China and US locations. During the Bush administration, Henry Paulson was the leading US spokesman and he telescoped into Yuan-Dollar exchange macroeconomics. The date of this year's China-US Strategic and Economic Dialogue has not been officially announced but may take place during the last week of July in Washington, according to sources familiar with scheduling, who spoke to ChinaStakes on conditions of confidentiality. The Obama administration is emitting different codes, none officially telegraphed, but suggestive enough of what to expect for future meetings. The first and most prominent evolution shows up with more people being involved and away from heavy dependency on one-man-one-issue engagement.
Commercial Real Estate: A Ticking Time Bomb? In a committee hearing in Congress that just ended, Joint Economic Committee Chairwoman Carolyn Maloney said that commercial real estate is a “ticking time bomb.” That comment alone has generated a Dow Jones story, an Associated Press story, a blog entry at the Washington Post, a Reuters story, a CNBC story and a Bloomberg story. The comment came in early in the hearing, which includes testimony from Jon Greenlee, Associate Director, Division of Banking Supervision and Regulation, Federal Reserve Board of Governors; Richard Parkus, Head of CMBS and ABS Synthetics Research, Deutsche Bank Securities; Jeffrey D. DeBoer, President & Chief Executive Officer, The Real Estate Roundtable and James Helsel, Partner, RSR Realtors, Harrisburg, PA and Treasurer, National Association of Realtors.
Next Shock Coming: Commercial Real Estate The Joint Economic Committee holds a hearing this morning on worsening conditions in commercial real estate – falling rents, fewer tenants, and defaults on debt down the road. This seems to be the first hearing on Capitol Hill to focus on these issues and what can be done. “Not much” seems to be the reasonable answer. The written testimony from Jon Greenlee, of the Federal Reserve, is particularly disheartening. There is currently about $3.5 trillion of debt associated with commercial real estate, about half of which is on the books of banks. He suggests that the Fed has been following this situation closely and has stayed on top of banks’ exposures to the sector. He also has some rhetoric about the recent stress tests. Why do I not find this reassuring?
Geithner: No, Really -- the Stimulus Is Right On Track Treasury Secretary Tim Geithner told two congressional committees this morning that President Obama's $787 billion economic stimulus bill is right on track. This, despite an unexpected jump in June unemployment, sinking stock markets, sagging consumer sentiment and growing concerns among budget hawks that a second stimulus may be gaining steam among Democrats on the Hill and in the White House. Yeah, Republican members of Congress weren't really buying Geithner's line this morning.
"I was just wondering, where do you think your plan went wrong?" asked Rep. Bill Posey (R-Fla.)
Geithner said the stimulus plan is on the "expected path" and that Americans are feeling better about it.
Not really, countered Rep. Michael Rogers (R-Ala.): "People are scared to death," he said.
Geithner said the economy is getting worse at a slower pace, the financial system is back from the precipice and consumer confidence has improved.
Ron Paul questions Vice Chair of Federal Reserve Kohn on transparency 07/09/2009
Geithner Pushes Derivatives Plan But He Warns Europe May Not Follow Treasury Secretary Timothy F. Geithner urged lawmakers yesterday to pass the Obama administration's plan to regulate derivatives, the exotic financial instruments that exacerbated the financial crisis. Geithner told a rare joint meeting of the House Financial Services Committee and House Agriculture Committee that it was crucial that, among other things, derivatives traders keep enough money in reserve to be able to meet their obligations.
There they go! . . . rewarding failure, again. White House Eyes Bailout Funds to Aid Small Firms The Obama administration is developing an initiative to take money from the $700 billion rescue program for the banking system and make it available to millions of small businesses, which officials say are essential to any economic recovery because they employ so many people, according to sources familiar with the plan. The effort would represent a striking shift from the rescue program's original mandate, since it would direct billions of bailout dollars toward a plan that aims more at saving jobs than at righting the financial system. Some economists estimate that small businesses, defined as firms with fewer than 500 workers, employ most of the country's workforce.
Europe digs its economic grave while the ECB answers to no one The European Central Bank preens as the last guardian of virtue in a sinful world, yet its actions are devastating the public finances of almost every country under its care. Without a radical change of strategy, the ECB risks pushing the weakest states into a debt-compound spiral that can only end in bond crises and/or the disintegration of Europe's monetary union – whichever comes first. The International Monetary Fund says the eurozone will contract by 4.8pc this year, worse than the UK (-4.2pc) or the US (-2.6pc). The deepest damage will occur next year as Europe remains mired in slump, even as the rest of the world recovers. It is the length of recession that matters most for jobs, social stability, and public finances. I am not easily shocked any longer but I did sit up when Spain's budget chief Luis Espadas said the economic collapse could "easily" push Spanish public debt to 90pc of GDP by 2011. This is up from 36pc in 2007.
Uh oh. Here come the 'profit' reports Wall Street braces for its first big week of second-quarter results as a derailed stock market rally slouches into summer. The spring stock market rally has lost momentum right as investors are primed to face another big hurdle: the start of the second-quarter reporting period. A scant 6% of the S&P 500, or 31 companies, is due to report results next week. But the list includes major financials Goldman Sachs, Bank of America, Citigroup and JPMorgan Chase, along with tech leaders Google, Intel and IBM. Currently, S&P earnings are expected to have declined 36% in the second quarter versus a year ago, according to the latest Thomson Reuters estimates. That means that barring some massive surprises, the S&P 500 is on track to post its eighth straight quarter of weaker profits, the longest streak since Thomson began tracking results in 1998.
Obama Calls for Patience On Impact of Stimulus President Obama, still traveling abroad, responded to increasing criticism that the stimulus package that he pushed through Congress is not working to prevent job losses in a still-struggling economy. In his weekly radio and Internet address yesterday, Obama said the critics -- which include many GOP leaders in Congress -- have little credibility. "When we passed this recovery act, there were those who felt that doing nothing was somehow an answer," he said. "Today, some of those same critics are already judging the effort a failure although they have yet to offer a plausible alternative." The criticism has intensified as job losses have continued to grow.
Obama rejects 2nd stimulus: Give recovery time President dismisses GOP complaints, defends plan 'to work over two years’ President Barack Obama on Saturday dismissed the idea the nation might need a second stimulus to jolt the economy out of recession and urged Americans to be patient with his economic recovery plan. Faced with rising unemployment numbers and criticism from Republicans who have already labeled the $787 billion stimulus a failure, Obama used his weekly radio and Internet address to remind voters that reversing job losses takes time.
What's killing banks on Main Street? Bad loans are only one part of the problem; disastrous investments and risky funding sources have also helped to bring about the latest batch of bank failures. On just about every Friday afternoon, bank regulators announce the latest batch of bank failures...they've shuttered 52 so far this year and the pace could well pick up. Behind these causalities is a dangerous mix of risky funding techniques and loans to local businesses that simply went bad. Most of the banks that have failed so far this year were ultimately done in by the large number of loans they issued to local residential and commercial real estate developers, who in turn were hit by the flagging economy. For example, when Nevada's Silver State Bank failed last September approximately two-thirds of its entire loan portfolio consisted of real estate development and commercial construction loans.
Audit The Fed: HR 1207 & The Financial Sector Assessment Program (FSAP) - Part I
Bob Shiller didn't kill the housing market He just predicted its demise. Now he's seeing some tentative signs of hope. It's noon in New Haven, and Yale economist Robert Shiller and I are leaving his office to walk down the block for pizza. It was a damp morning, but now the sun is breaking through the clouds. "Do we need an umbrella?" he asks. I say I don't think so. But a few steps outside his office, he turns around to get one. "It's better to be safe," he says. That's Bob Shiller for you. He's a worrier. Well, more than that. He's obsessed with taming risk. And that means all kinds of risk -- from the chance of stray showers to a danger that's on everyone's mind these days: falling home prices. Shiller's name will forever be linked with the worst housing bust since the Great Depression and the economic slump it caused. He first warned of a housing bubble back in 2003 when bankers were merrily minting mortgage-backed securities. And it is the widely cited gauge he helped create -- the S&P/Case-Shiller home-price index -- that has heralded, in grim monthly installments, the devastating collapse of the residential real estate market.
Are There Really 47 Million Americans Who Can't Afford Health Insurance? An editorial in the July-August 2009 AARP Bulletin repeats the same bromide heard almost nightly on the MSM news: That there are currently 47 million Americans without health insurance. The AARP editorial goes on to argue that this situation is disgraceful; that all Americans should have "affordable health care choices"; and that in terms of reform, "the time to act is now." The sad tale of the 47 million uninsured is, perhaps, the most emotionally persuasive argument put forth for national health care reform. But is the alleged number of uninsured reasonably accurate? Or is it, instead, a purposely misleading statistic designed to advance a specific reform agenda?
Palin to stump for conservative Democrats Vows to shun 'partisan stuff' ANCHORAGE, Alaska | Brushing aside the criticisms of pundits and politicos, Alaska Gov. Sarah Palin said she plans to jump immediately back into the national political fray — stumping for conservative issues and even Democrats — after she prematurely vacates her elected post at month's end. The former Republican vice-presidential nominee and heroine to much of the GOP's base said in an interview she views the electorate as embattled and fatigued by nonstop partisanship, and she is eager to campaign for Republicans, independents and even Democrats who share her values on limited government, strong defense and "energy independence." "I will go around the country on behalf of candidates who believe in the right things, regardless of their party label or affiliation," she said over lunch in her downtown office, 40 miles from her now-famous hometown of Wasilla — population 7,000 — where she began her political career.
Obama's Focus on Health Care Will Be Crucial to Reform After a week of international diplomacy, President Obama returns to Washington this week facing an even greater diplomatic challenge: nudging the large and controversial health-care reform package toward consensus on Capitol Hill. Headlines during his absence pointed to multiple problems -- beyond the virtual wall of opposition among Republicans. There is resistance among conservative Blue Dog Democrats over the potential cost. There is nervousness among progressives that the White House might compromise too much on a public insurance option. The all-important Senate Finance Committee appears stymied. As a result, the prospects of floor action in the House and Senate before the August recess now appear in jeopardy.
Health-Care Bill Would Tax High-Income Americans, Rangel Says Democratic lawmakers in the U.S. House of Representatives want to increase taxes on the highest- earning American families to help pay for an overhaul of the nation's health-care system. Legislation to be unveiled on July 13 would raise $540 billion over the next decade by setting a 1 percent surtax on couples with more than $350,000 in annual income, said Representative Charles Rangel, chairman of the tax-writing Ways and Means Committee. Higher rates would take effect for those earning $500,000 and $1 million, Rangel said. The New York Democrat said his panel decided this was the simplest means of funding the biggest health-care revamp in more than four decades after considering alternatives ranging from increasing Medicare levies to taxing sugary drinks.
House Dems to tax rich to pay for health care Taxes will hit households with incomes of $350,000 a year and above House Democrats plan to pay for a sweeping health care overhaul by boosting taxes on the wealthy. The taxes will hit households with incomes of $350,000 a year and above. Ways and Means Committee Chairman Charles Rangel of New York said the tax would raise $540 billion over 10 years. In combination with cuts to Medicare and Medicaid that would pay for a comprehensive health bill in the range of $1 trillion. Earlier on Friday, President Barack Obama acknowledged the tough going for his health care overhaul, but rejected the notion the legislation is doomed if lawmakers fail to act by August. "I never believe anything is do or die," Obama said.
The Road to Serfdom - 1
The Road to Serfdom - 2
Consumers' mood sours in early July Survey shows consumer sentiment dropping to its weakest since March U.S. consumer sentiment wilted in early July to the weakest since March, when confidence in the financial sector and economy were at a low ebb, the Reuters/University of Michigan Surveys of Consumers showed on Friday. Consumers' rising concerns about a protracted economic downturn, job security and erosion of wealth were the main factors depressing sentiment, the survey said. Its preliminary index of confidence for July fell to a reading of 64.6 from the final reading for June of 70.8.
Palin says she's not leaving politics She says she's eager to campaign for others Alaska Gov. Sarah Palin said she's not only staying involved in national politics, but she plans to jump back into the national scrum when she leaves office at the end of the month. The former Republican vice presidential nominee said she plans to write a book, campaign for political candidates from coast to coast — even Democrats who share her views on limited government, national defense and energy independence — and build a right-of-center coalition. "I will go around the country on behalf of candidates who believe in the right things, regardless of their party label or affiliation," she said during an interview published Sunday in The Washington Times.
Chips in official IDs raise privacy fears Climbing into his Volvo, outfitted with a Matrics antenna and a Motorola reader he'd bought on eBay for $190, Chris Paget cruised the streets of San Francisco with this objective: To read the identity cards of strangers, wirelessly, without ever leaving his car. It took him 20 minutes to strike hacker's gold. Zipping past Fisherman's Wharf, his scanner detected, then downloaded to his laptop, the unique serial numbers of two pedestrians' electronic U.S. passport cards embedded with radio frequency identification, or RFID, tags. Within an hour, he'd "skimmed" the identifiers of four more of the new, microchipped PASS cards from a distance of 20 feet.
Tehran readies proposals for West Won't say if 'basis for talks' includes nuclear program Iran is preparing a package of proposals to present to Western powers that could be a basis for future talks, the country's foreign minister said Saturday. Manouchehr Mottaki told reporters that the package will deal with political and economic issues as well as security and international affairs, but he did not say whether its proposals also covered Iran's nuclear activities. The U.S. and its European allies want to draw Iran back into negotiations over its nuclear program. At the Group of Eight summit in Italy last week, President Obama said there is now a September "time frame" for Iran to respond to offers to discuss its nuclear program.
Kim Jong-il Said to Have Pancreatic Cancer Kim Jong-il, the North Korean leader, has pancreatic cancer and the illness is life-threatening, the South Korean broadcaster YTN said on Monday, attributing the information to unidentified Chinese and South Korean intelligence sources. Mr. Kim's health is one of the most closely guarded secrets in the reclusive communist state of North Korea. Mr. Kim, 67, was widely thought to have suffered a stroke last year, but there has never been official confirmation. He looked gaunt during a public appearance last Wednesday at a memorial for his father, the founder of North Korea, Kim Il-sung.
----- worth repeating . . . . "Shut up, she explained:" Senate Democrats shut down GAO audit amendment. Senator Jim DeMint offered an amendment calling for a GAO audit of the Federal Reserve - something very popular in the House - and the Democrats shut it down. Their privilege, but as DeMint shows, also their hypocrisy.
Ron Paul On Fed Audit: We Will Not Be Stopped Congressman says investigating private Federal Reserve would reveal where missing TARP funds went Congressman Ron Paul has vowed that he will not be stopped in his effort to audit the Federal Reserve, as he slammed Senate authorities for blocking the bill earlier this week. Appearing on Fox News’ Freedom Watch with Judge Napolitano Paul referred to Senate authorities blocking Jim DeMint’s attempt to attach the legislation, which already has 250 co-sponsors in the House, as a provision to a spending bill as a “facade”. The amendment was blocked by Senate authorities on Monday after they claimed that it violated rules for provisions attached to spending bills.
Federal Reserve independence Vice Chairman Donald L. Kohn - Before the Subcommittee on Domestic Monetary Policy and Technology, Committee on Financial Services, U.S. House of Representatives, Washington, D.C. Chairman Watt, Ranking Member Paul, and other members of the Subcommittee, I appreciate the opportunity to discuss with you the important public policy reasons why the Congress has long given the Federal Reserve a substantial degree of independence to conduct monetary policy while ensuring that we remain accountable to the Congress and to the American people. In addition, I will explain why an extension of the Federal Reserve’s supervisory and regulatory responsibilities as part of a broader initiative to address systemic risks would be compatible with the pursuit of our statutory monetary policy objectives. I also will discuss the significant steps the Federal Reserve has taken recently to improve our transparency and maintain accountability.
G8 Leaders Agree to Limit Their Hot Air G8 summit participants have all agreed to cut carbon emissions by 80 percent over the next four decades. Enough to keep Florida above water? The world leaders involved have to keep their promises first, as do successive governments over the next 41 years. Then there are the developing nations that could just absorb all that outsourced pollution. Nice start, though.
Gold, the U.S. Dollar, and the Yuan In late April, a Chinese sovereign wealth fund, the State Administration of Foreign Exchange, announced that China had purchased 454 metric tons of gold over the past six years. Officials indicated that this increase was accomplished by tapping domestic mine supply and refining scrap gold. As China reported gold production of 282 t last year, the reserves have absorbed about 25% of this output since 2003.
Wait for gold’s next rally After several market analysts going ga-ga over gold, now the top-level research consultancy GFMS has announced that gold prices are all set to soar further this year. GFMS claimed that the present slump in gold prices is just a temporary phenomenon and gold will scale record heights in the second half of 2009 as the threat of inflation would drive a new wave of investment.
Here are 10 compelling reasons why gold is going to do well this year.
The Stimulus Effect
COMEX Traders Predict $1,600 Gold… by December
“Big Money” Inflows
China’s Doubling Down!
Demand Building across the Board
The Paper Dollar’s 30% Drop
Gold/Dow Ratio Signals $8,000 Gold
U.S. Treasury Dept. Signals $5,468 Gold
Riding the “Commodity Super Cycle”
Historic Model Predicts $6,214 Gold
Gold fever grips Chinese investors Bitten by the gold bug, Chinese investors are now rushing to hoard the yellow metal as fears over the global recession deepen. The increased sales of gold bars and gold jewelry in Shanghai, Beijing, Guangzhou and other large cities are reflected in the precious metal's price surge on the Shanghai Gold Exchange (SGE), which trades in gold contracts for forward deliveries. Gold prices quoted on the SGE have increased by an average 6.74 percent in the past month to the current level of about 209 yuan a gram.
Citigroup says silver investment will outshine gold Silver may not be as hot as gold as far as global investments are concerned. But silver continues to grip the investment sentiments of bullion traders and dealers across the world. According to a new report from Citigroup, silver will outperform and outshine gold. The global bank said on Thursdsay that investment flows into gold are moderating while the outlook for silver is improving. The ratio of gold-to-silver prices should return to its historical norm between 55 and 60 from the current 69, it said.
On the Edge with Max Keiser - 03 July 2009 (pt1 of 4) $57 TRILLION debt is holding American hostage through government intervention, manipulated markets, and fraud.
A Master Stroke of Silver Manipulation Federal Reserve Credit dropped $58.5 billion last week, taking the total amount of Federal Reserve credit that they created to a hefty $1.997 trillion. Now, one does not have to be a paranoid, gold-bug, gun-nut, Austrian-school economist lunatic moron like me to see that if you take this weekly decrease in Fed credit and multiply it by 52 to get the yearly total, it comes to a staggering $3.042 trillion a year, which be a whopping 40% decrease in the M2 money supply, which would be plenty bad enough if that were the end of it, but this is Fed Credit, which is the stuff of legend where it appears as if by magic – poof! – in the books of the banks (although it is not magic that put it there, but the mere whim of Ben Bernanke), which the banks use to lend out gigantic multiples of that increase in credit! Gaaahhh!
WGC warns gold import duty to hurt bullion market The World Gold Council (WGC) has welcomed the Indian government's massive economic impetus measures but warned that the rise in gold import duty will put added pressure on the gold market, already suffering from high local prices and the impact of lower consumer spending. The Indian government has announced in its budget that it is investing heavily in the agricultural, industrial and social sectors in an effort to boost consumer confidence and drive economic growth, resulting in a budget increase of 36 percent. To help pay for this package the gold industry has become a tax target.
Money Stability without Using a Gold Standard Numerous articles have been appearing about what is wrong with the current economic system. Usually the solution proposed is to adopt a gold standard. Here are the components of a system that combines the best of a gold standard (eliminating lasting inflation) with the flexibility required in today’s world and utilizing modern technology. This approach can create transparency, fairness and stability in government: Match tax with spending: Tax collected at the end of a period should EXACTLY reflect the amount of government spending that occurred during that period
World leaders want deal in trade talks G8 draft: Rich and developing countries want to restart stalled trade world trade talks Leaders of rich and developing nations want to finish a long-delayed world trade deal in 2010 and head off trade wars that could hit world economies as they struggle to emerge from the recession, according to a draft of a joint declaration obtained by The Associated Press. Completing the so-called Doha round of talks has risen up the agenda due to fears that the economic crisis will lead to an upsurge in protectionist policies like the ones that helped cause the Great Depression of the 1930s. "We reaffirm our commitment to maintain and promote open markets and reject all protectionist measures in trade and investment," according to a draft of the joint statement signed by 17 nations, including the Group of Eight industrialized countries and five key emerging market economies.
US lurching towards 'debt explosion' with long-term interest rates on course to double The US economy is lurching towards crisis with long-term interest rates on course to double, crippling the country's ability to pay its debts and potentially plunging it into another recession, according to a study by the US's own central bank In a 2003 paper, Thomas Laubach, the US Federal Reserve's senior economist, calculated the impact on long-term interest rates of rising fiscal deficits and soaring national debt. Applying his assumptions to the recent spike in the US fiscal deficit and national debt, long-term interests rates will double from their current 3.5pc.
Obama Presiding Over The Bankruptcy Of The United States Fed won't say what it is paying for CDOs, Bankruptcy growth, investigators start down Madoff Money trail and discover they are in Austria, pace of the economy continues to slow, Greenspan talks smack about the economy and little else, Revenues fall while spending increases The Obama administration may start its program to spur purchases of mortgage-backed securities from banks with about $20 billion in public and private money, down from as much as $100 billion when the effort was announced in March, sources said. The Treasury Department will pro vide about $1.1 billion in capital to eight to 10 money managers it will select for its Public-Private Investment Program.
This one will COST American households a lot of money! In-Depth Look - Waxman-Markey Bill G8 backed an 80% cut in greenhouse emission by INDUSTRIALIZED countries by 2050 (developing nations like China and Korea will not be held to the same global standards, but left free to pollute as much as they want. The developing nations won't have any burden to clean up the climate, so this bill represents a HUGE transference of wealth from the 'haves' to the 'have-nots'. They remain free to pollute with third world manufacturing; we (US TAXPAYERS and small business) have to compensate for global polluters, by tightening the energy belts of Americans, while paying more for it. Don't be deceived; Al Gore wants you riding a bicycle to work, . . . if you can find a job, and your utility bills could go up as much as $3,000 per household with Cap & Trade legislation now being considered. Watch video with 'great interest, but don't get sucked into the politically correct reasons and conclusions for Climate Change Treaty (International treaties supercede US Law) or Cap & Trade legislation. The globalists are promoting and sponsoring American middle class serfdom.
Treasuries Decline as U.S. Readies $11 Billon 30-Year Auction Treasuries fell on speculation yesterday’s rally in 10-year notes, the biggest since March, was too large to sustain and the U.S. readied the last of this week’s four note and bond auctions. Thirty-year bond yields rose from near the lowest in seven weeks before the $11 billion sale of the securities. Yesterday’s $19 billion auction of 10-year notes drew the most bids on record from investors seeking refuge from an economy whose recovery may take longer than expected.
Nope, The P-PIP Probably Still Won't Work Now that we've got the buy-side managers for the Obama administrations Public Private Investment Program lined up, the question is whether there will be anyone on the sell-side. With the buy-side guys saying that the P-PIP will allow them to pay between 5% and 10% more for toxic assets, you might think banks would be all over this thing. But that's not how its shaping up. The P-PIP is still stumbling. Many are now wondering whether bankers will sell into the program. Today Lucian Bebchuck has a guest column on the WSJ's Real Time Economics blog explaining why banks aren't eager to unload toxic assets. Mostly, its that so much of what the government has done is enabling and encouraging banks to retain the junk on their balance sheets.
Geithner Lies Again as PPIP Prepares for Launch Geithner is back at it, and this time it appears the PPIP will manage to launch, mysteriously without PIMCO as noticed by Calculated Risk. Please consider the Joint Statement on the PPIP Legacy Asset, Securities, and Loan Programs by Secretary of the Treasury Timothy F. Geithner, Chairman of the Board of Governors of the Federal Reserve System Ben S. Bernanke, and Chairman of the Federal Deposit Insurance Corporation Sheila Bair.
On the Edge with Max Keiser - 03 July 2009 (pt2 of 4)
The Fall of the Toxic-Assets Plan The government announced plans to move forward with its Public-Private Investment Program yesterday. Lucian Bebchuk, professor of law, economics, and finance and director of the corporate governance program at Harvard Law School, says that the program, which has been curtailed significantly, hasn’t made the problem go away. The plan for buying troubled assets — which was earlier announced as the central element of the administration’s financial stability plan — has been recently curtailed drastically. The Treasury and the FDIC have attributed this development to banks’ new ability to raise capital through stock sales without having to sell toxic assets. But the program’s inability to take off is in large part due to decisions by banking regulators and accounting officials to allow banks to pretend that toxic assets haven’t declined in value as long as they avoid selling them.
White House Ponders Bernanke's Future As the White House begins to ponder whether to reappoint or replace Ben Bernanke when his term expires in January, the Federal Reserve chairman's standing on Wall Street is on the rise while attacks on him from Congress mount. Treasury Secretary Timothy Geithner is expected to play a key role in advising President Barack Obama on whether to reappoint Mr. Bernanke. Mr. Geithner has worked closely both with Mr. Bernanke and with the leading alternative for the powerful post -- Lawrence Summers, the former Treasury secretary, who is currently the president's top economic adviser.
Chinese Banks Are Lending Like Crazy Despite the collapse of foreign demand, China is still growing its economy -- then again, it'd be kind of hard not to be with the kind of lending going on with Chinese banks. New lending in June hit $224 billion (1.53 trillion Yuan) double from just May. No wonder car sales are up; banks there are forcing money down the throats of borrowers.
Do Demographics Doom Us To Repeat Japan? . . . . Back during Japan’s lost decade of 1990-2000 (the first lost decade, that is), Japan’s population had just began to age dramatically. In 1990 the elderly dependency ratio stood at 17%, but it had risen to 25% by 2000. As the Japanese aged their appetite for savings grew, and as their stock portfolios and home values crashed, they saved more and more. The more they saved, the worse the economy did. Interest rates of 0.25% or less and spectacular government deficits couldn’t make a dent in the vast shift towards a propensity to save. The result was deflation: falling asset values and a strong yen.
HARD TIMES Our measure of how bad is it in this economy for a broad swath of Americans can be analyzed by asking three basic questions: Are people working, are they making any money, and do they have any money in reserves? To answer these questions and more, below are some shocking facts! First, are people actually employed? The glum employment situation continues to unravel and on the summer jobs front, 16 - 19 year olds are facing the worst environment since 1954, before their parents were even born. In 2007, 51 percent of graduating college students had jobs lined up before graduation. This year, less than 20 percent had jobs. Because they can’t find work, the youth of America are staying at home with their parents (maybe forever) and parents can be categorized as “payrents”.
Warren Buffett Calls for Second Stimulus As folks in Washington and the rest of the country grumble about the depressed job market and underwhelming consumer spending reports, the calls for a second stimulus continue. "I think that a second one may well be called for," Warren Buffett , the widely respected investor, said Thursday morning on ABC's "Good Morning America." "Our first stimulus bill... was sort of like taking half a tablet of Viagra and having also a bunch of candy mixed in," he said, "as if everybody was putting in enough for their own constituents."
Warren Buffett Favors Stimulus Part 2 Both Krugman and Buffett say we need another "strong" stimulus without the watered-down effect from the Party-of-NO
When Stimulus Does Not Stimulate A majority of Americans now give President Obama's handling of the economy a negative rating and many economists and city officials are concerned that Obama's gargantuan stimulus effort has not given the expected quick boost to the economy. Some argue this is because funds have been slow in coming due to bureaucratic red tape meant to ensure that the money spent will not be wasted. Jared Bernstein, chief economist for the office of Vice President Joe Biden (who knew that the Vice President needed a chief economist?), is quoted as saying "We're hitting the right balance between speed and oversight." Unfortunately for the American public, sound economics teaches that, regardless of how fast the money is spent or how much oversight is provided by bureaucrats, the money doled out by the stimulus plan will be wasted and will have a detrimental impact on the economy in the long term, because that is the nature of profligate government spending.
In-Depth Look - Does US Needs 2nd Stimulus Package? - Bloomberg
FDIC May Ease Rules on Buyout Firms Purchasing Banks The Federal Deposit Insurance Corp. may relax proposed rules for buying failed banks after some investors said they would block private-equity firms from participating, according to people briefed on the talks. Regulators may ease a provision that would require private- equity investors to maintain Tier 1 capital ratios of at least 15 percent for lenders they purchase, said the people, who declined to be named because the talks are private. Tier 1 ratios, which measure a lender’s ability to withstand losses, currently must be at least 8 percent for new banks.
75 Years of Housing Fascism On June 28, 1934, Franklin Delano Roosevelt signed into law the National Housing Act (NHA) of 1934. Hugh Potter, president of the National Association of Real Estate Boards (NAREB) called it "the most fundamental legislation … ever enacted affecting real estate and home ownership." While federal intervention in housing had begun in 1932 under the supposedly laissez-faire Hoover, Potter's assessment was correct in the sense that the act broke new ground in terms of the range of public-private collaboration — and the unintended destructive consequences of such.
Banks’ plan to refuse California IOUs causes a stir After taking multibillion-dollar bailouts from the federal government, some of the nation’s biggest banks are declining to lend a hand with a different financial mess: the California budget stalemate. The banks, including JPMorgan Chase & Co., Bank of America Corp., Wells Fargo & Co., Citigroup and some regional banks, are trying to pressure lawmakers to end the impasse by warning that, after Friday, they won’t accept IOUs issued by the state. The move would leave many businesses and families with pieces of paper and fewer options for getting their money immediately.
Gap, Abercrombie June Sales Trail Analysts’ Estimates Gap Inc. and Abercrombie & Fitch Co. reported June sales declines that were steeper than analysts estimated as a rise in U.S. unemployment and a drop in consumer confidence kept shoppers away from the malls. Sales at U.S. stores open at least a year fell 10 percent at Gap, operator of the Old Navy and Banana Republic chains, compared with the 8.7 percent average of analysts’ estimates compiled by Retail Metrics Inc. Comparable-store sales at Abercrombie & Fitch plunged 32 percent, a bigger decline than the 28 percent projection. American Eagle Outfitters Inc. fell 11 percent, compared with a 7.8 percent average estimate.
On the Edge with Max Keiser - 03 July 2009 (pt4 of 4) Rumors of a possible September "Bank Holiday"
Christina Romer's Faulty Depression History Christina Romer, chair of the Council of Economic Advisers to President Obama, recently wrote an ode to Keynesian deficit spending as a method for curing severe recessions. Yet a simple glance at the big picture shows that the Keynesian story makes no sense. Romer on the "Mistakes of 1937" Romer worries that President Obama will cave in to political pressures, and cut stimulus efforts before the economy has sufficiently healed. She alleges that this was the same mistake Roosevelt made after his initial (apparent) success in battling the Depression:
America’s Sick - Part I The Obama administration is currently working to push healthcare reform down the pipeline at an alarming rate. The reason for this is that President Obama is trying to make good on his promise that sweeping healthcare reform will be completed by the end of 2009. I even touched on the fact that this push would come in “Acting Quickly” from June 15th. What’s really important here though is not whether or not he meets that deadline. Hitting that deadline is actually quite irrelevant as the proposed options to fix the system won’t address the real problems in health care. Even worse yet it seems that the administration doesn’t care that the real problems won’t be addressed. Let’s take a look at the healthcare problem, analyze the facts, discuss the proposed solution, and identify what changes REALLY need to be made.
Obama Budget Chief Says Health Bill ‘Not Enough’ to Fix System The Obama administration pressed House lawmakers to strengthen legislation to revamp health care, saying it doesn’t go far enough to fix a system plagued by spiraling costs that leaves millions of Americans uninsured. White House Budget Director Peter Orszag raised the stakes in the congressional debate over the issue by telling Democratic lawmakers a proposal they are considering “would perpetuate a system in which best practices are far from universal and costs are too high.”
Democrats Are at Odds on Financing Health Care House and Senate Democrats appeared on Thursday to be on a collision course over how to pay for a sweeping overhaul of the nation’s health care system, with the House planning to propose an income tax increase on the wealthiest Americans, an idea that Senate negotiators have all but dismissed as unworkable. Paying for the roughly $1 trillion, 10-year cost of the health care legislation is arguably the biggest hurdle confronting lawmakers and the White House as they pursue President Obama’s top policy goal of extending health coverage to all Americans and curtailing the steep rise in the cost of medical care.
Biden Says National Health Care Plan Is on Track to Pass Congress by End of August Even while some Democratic senators are reportedly getting cold feet, Vice President Joe Biden affirmed that a health care overhaul is “on track” for passage by the end of next month. “Folks, reform is coming. It is on track. It is coming,” Biden said from the White House on Wednesday, flanked by hospital industry officials, who agreed to $155 billion in savings over 10 years. “We have tried for decades--for decades--to fix a broken system, and we have never, in my entire tenure in public life, been this close. We have never been as close as we are today, and things remain on track.”
In-Depth Look - How To Pay For Health Care?
The Unemployed Will Roar When a virulent disease is ravaging you like a cancer, you don’t want a cacophony of voices promoting different or contradictory cures. Yet that is what we’re starting to hear about the economic crisis, not only from a politically divided—and pretty scared—capital, but from within the Obama administration itself. In just the past few days, Vice President Joe Biden has said the young administration misread the depth of the recession—an honest account, since most private economists did as well. Laura Tyson, an outside economic adviser to the White House, said it’s wise to start preparing another stimulus package.
No end in sight to US jobless rise The unemployment rate in the United States rose to 9.5% in June 2009 from 3.6% in October 2000 and 4.1% in October 2006. Most puzzling, as indicated in the chart below, has been the obvious failure of Federal Reserve chairman Ben Bernanke's unprecedented aggressive monetary policy to produce the quick economic recovery that he promised at each interest rate cut. The more he cut interest rates and the more he inflated the balance sheet of the Fed, the higher unemployment has risen. Unemployment has kept on rising even though the federal funds rate has been near zero since December 2008. The unfulfilled promise of Bernanke, a proclaimed expert of the Great Depression, has been certainly disappointing. However, Bernanke and his supporters have kept crediting themselves that, without unorthodox cheap monetary policy, the unemployment rate would have been much higher.
Employment Is NOT A Lagging Indicator Most bullish commentators these days are in complete agreement about one thing: employment is a LAGGING indicator. In other words, pay no attention to the crappy jobs reports...because the job market lags the economy. That sounds encouraging. But it's wrong. As Richard Bernstein noted last week, most of the numbers in the monthly employment report are LEADING or COINCIDENT indicators of the economy. Only one, the UNEMPLOYMENT RATE, is a lagging indicator.
Jobless Claims Drop To Lowest Levels Since January Here's what you should probably do with this week's jobless numbers: ignore them. Here's what you probably will do: talk about how the "unexpected" drop to the lowest level since January indicates that the worst fears about the economy may not be coming true. But we're getting ahead of ourselves. Let's go to the tape: initial claims for jobless benefits dropped 52,000 to "a seasonally adjusted" 565,000 in the week ended July 4.
GM’s Sleepy Hollow Nightmare Shows Perils for Closing Factories General Motors Corp. closed its minivan factory in Sleepy Hollow, New York, 13 years ago, after a record 82-year run for a company plant. Encouraged by the site’s views of the Hudson River, just 23 miles north of Manhattan, GM made development plans to help the village replace it as the biggest employer and largest source of tax revenue. “This is some of the prime real estate in the world,” said Anthony Giaccio, 45, the village administrator, describing the potential that villagers and GM saw in the 97-acre site.
A Muscle Car to the Rescue for General Motors DETROIT — Believe it or not, General Motors has a hit car on its hands. Amid the gloom of bankruptcy and a miserable market for new vehicles, G.M.’s new Chevrolet Camaro muscle car is winning over consumers looking for a little excitement in a bland landscape of look-alike sedans and watered-down sport utilities. G.M. sold 9,300 Camaros during the month of June — more than either its entire Buick or Cadillac divisions could muster on their own. And with G.M. expected to emerge Friday from bankruptcy as a newly constituted company, it is hardly surprising that the Camaro will play a starring role in the company’s coming-out party and news conference at G.M.’s Detroit headquarters.
Does Obama Have a Friend in the Vatican? When President Obama meets with Pope Benedict XVI on Friday, there will be no right-wing Catholic demonstrators upbraiding the pontiff, as they did Notre Dame earlier this year, for conferring the church’s legitimacy upon this liberal politician. In fact, whether he is the beneficiary of providence or merely of good luck, Obama will have his audience with Benedict just three days after the release of a papal encyclical on social justice that places the pope well to Obama’s left on economics. What a delightful surprise it would be for a pope to tell our president that on some matters, he’s just too conservative.
On the Edge with Max Keiser - 03 July 2009 (pt3 of 4) Dr. Paul Craig Roberts talks on situation in Honduras and possible overthrow of government with US involvement. Also thought on new global reserve currency to replace the dollar
Constitutional crisis in Turkey escalates ANKARA - Tension between the ruling Justice and Development Party (AKP) and the high command of the armed forces (TSK) has escalated to new heights after a series of political coups and counter-coups. An Istanbul court ordered the arrest of a navy colonel on June 30 following the AKP's attempt to pass a law giving civilian courts the authority to prosecute military personnel accused of crimes such as threats to national security, constitutional violations, the organizing of armed groups, and attempts to topple the government.
A leaner, meaner Iranian regime Briefly, it looked like 1978-1979 all over again. The riots that engulfed Tehran - and to a much lesser extent a few other major cities - were ostensibly a protest at what the demonstrators (and their purported political leaders) considered to be "rigged" elections. They were quickly suppressed or fizzled out because they were directionless and failed to articulate any coherent or realizable aims. While the election results were indeed surprising and raised eyebrows everywhere - not least in the inner sanctums of the Islamic Republic - allegations of massive fraud are to this point unproven. While some tinkering may have occurred, fraud on the scale that is being alleged by two of the opposition candidates would have elicited a considerably greater amount of protest and resistance from within the system.
Iran Security Forces Move to Crush Renewed Street Protests Security forces began clashing with protesters shortly after they began massing in the streets of Tehran on Thursday evening, as an initially festive demonstration quickly turned grim, witnesses said. Tear gas was fired into Lelah Park, they said, and a woman whose coat was covered in blood ran from Revolution Square, one of the main gathering spots during the initial weeks of protests over the June 12 election. She said that police officers were beating protesters.
Cyberattacks Jam Government and Commercial Web Sites in U.S. and South Korea SEOUL, South Korea — A wave of cyberattacks aimed at 27 American and South Korean government agencies and commercial Web sites temporarily jammed more than a third of them over the past five days, and several sites in South Korea came under renewed attack on Thursday. The latest bout of attacks, which affected service on one government and six commercial Web sites in South Korea, was relatively minor, and all but two of the sites were fully functional within a few hours, said an official from the state-run Korea Communications Commission.
Mixed signals over Chinese missiles As defense analysts and experts in the United States, Japan and India digest the recent "Ballistic and Cruise Missile Threat" report by the US Air Force (USAF) National Air and Space Intelligence Center (NASIC) - particularly any elements pertaining to China - important gaps or omissions are surfacing. The bottom line is that these gaps, along with differences between the NASIC report [1] and a US Defense Intelligence Agency (DIA)-authored report on the Chinese People's Liberation Army (PLA) released earlier this year, are making the overall US analysis of the situation unfolding in China involving missiles and military space matters increasingly hard to gauge.
No question, Hu's in charge of Xinjiang Chinese President Hu Jintao cut short his trip to Europe, canceled his attendance at the Group of Eight (G-8) meeting and returned home on Wednesday in the wake of the violence in Xinjiang. It was an unprecedented move. This is the first time in the history of the People's Republic of China that a Chinese leader has scrapped a state visit overseas due to an unexpected domestic imbroglio. This suggests the situation in Xinjiang is so serious that Hu had to rush home to personally handle its aftermath. Hu left Beijing on Sunday, July 5, for a working trip to Europe. That evening, riots erupted in Urumqi, capital city of Xinjiang Uyghur Autonomous Region in northwest China. At least 156 people were killed and more than 816 injured in the most violent ethnic clash in the country in decades.
Riots Expose China’s Ethnic Divisions, Uneven Growth Guo Jianxin surveyed the wreckage of his car dealership in Urumqi and reflected on the violence that left at least 156 people dead in the northwestern Chinese city. “Most Uighurs are good people,” said Guo, after rioters from the mostly Muslim ethnic group burned 30 of the domestic cars he sells and smashed another 23, causing an estimated 3 million yuan ($440,000) of damage. “There are just a few rotten apples.”
China’s Bureaucrats Stir Anger by Approving BMWs for Officials The Chinese government’s addition of Mercedes and BMWs to the list of approved official cars for bureaucrats infuriates Yang Jun. “Why should they enjoy such luxury?” said Yang, a 50- year-old chauffeur. “It’s a waste of public money.” The announcement last month sparked an outpouring of criticism on Web sites and 98 percent of more than 96,000 people polled by state-controlled People’s Daily said the government should favor domestic brands. Adding to popular anger are the government’s own calls for people to buy domestic products as growth slows to 6 percent, the slowest pace in almost 10 years.
--- special issues needing your attention! ---
Don’t let them pass the PASS Act – It’s really the REAL ID Act The American people have rejected the REAL ID Act, and the national ID card it would create. The politicians claim they can fix REAL ID by replacing it with something called the PASS ID, to be enacted by the PASS Act, S. 1261. The PASS Act is a fraud. PASS ID is REAL ID by another name. Jim Harper at the Cato Institute has done a fabulous job of dissecting all the frauds involved in the PASS Act. . . . . One fear about REAL ID is that you would need it to have a job, or do anything really. But what if you were denied a REAL ID because of mistaken information or some bureaucratic blunder? Think, for instance, of all the non-terrorists who have ended up on the terrorist watch list. In that case… You would become a non-person.
Stop the NEW Real ID - S.1261 - The PASS Act Single biometric identification system via Driver's License Special interests groups are trying to force Democrats, Independents and Republicans to support this legislation. States have been and are working to ensure drivers licenses are secure documents and have document integrity. The federal government, in spite of the states, wants to set international standards that are not needed. The federal government wants control of your state drivers license. The federal government is bribing states to go along with its plans. Call to let them know your OPPOSITION:
Sen. McCaskill - 202-224-6154
Sen. Prior - 202-224-2353
Sen. Tester: 202-224-2644
Sen. Voinovich: 202-224-3353
Real ID Exposed at National Press Club with Mark Lerner, Host Mark Lerner, Stop Real ID Coalition, Constitutional Alliance, ACLJ, ACLU, Rep. Sam Rohrer, and Rep. Charles Key speaking straight out about the Real ID Act of 2005, the use of biometrics for identification, and related issues at the National Press Club. Mark Lerner is known for bringing the ACLU and ACLJ together to fight side-by-side against the Real ID; both national organizations are normally on opposite ends of the spectrum when it comes to issues, so to bring them together in agreement against anything, well this is a significant first! Mark Lerner is one of the founders of the Stop Real ID Coalition and a spokes person for the Constitutional Alliance.
Does the PASS ID Act Protect Privacy? . . . . “The PASS ID Act addresses most of the major privacy and security concerns with REAL ID,” said Ari Schwartz, Vice-President of CDT. The release cited four ways that PASS ID was an improvement over the bill it’s modeled on, REAL ID. Interstate Data Sharing? First, CDT said, PASS ID “[r]emoves the requirement that states ‘provide electronic access’ allowing every other state to search their motor vehicles records.” It’s technically true: The language from REAL ID directly requiring states to share information among themselves came out of PASS ID. But the requirements of the law will cause that information sharing to happen all the same. Like REAL ID did, PASS ID would require states to confirm that “a person submitting an application for a driver’s license or identification card is terminating or has terminated any driver’s license or identification card” issued by another state.
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Thurs 07.09.2009
Don’t let them pass the PASS Act – It’s really the REAL ID Act The American people have rejected the REAL ID Act, and the national ID card it would create. The politicians claim they can fix REAL ID by replacing it with something called the PASS ID, to be enacted by the PASS Act, S. 1261. The PASS Act is a fraud. PASS ID is REAL ID by another name. Jim Harper at the Cato Institute has done a fabulous job of dissecting all the frauds involved in the PASS Act. . . . . One fear about REAL ID is that you would need it to have a job, or do anything really. But what if you were denied a REAL ID because of mistaken information or some bureaucratic blunder? Think, for instance, of all the non-terrorists who have ended up on the terrorist watch list. In that case… You would become a non-person.
Remember, the POLITICIANS WORK FOR US! Tell them what YOU want, . . . or fire them!
Stop the NEW Real ID - S.1261 - The PASS Act- Single biometric identification system via Driver's License Special interests groups are trying to force Democrats, Independents and Republicans to support this legislation. States have been and are working to ensure drivers licenses are secure documents and have document integrity. The federal government, in spite of the states, wants to set international standards that are not needed. The federal government wants control of your state drivers license. The federal government is bribing states to go along with its plans. Web site: Stop Real ID Coalition
Call these Senators BEFORE NEXT WEDNESDAY to let them know your OPPOSITION to S.1261 THE PASS ACT:
Sen. McCaskill - 202-224-6154
Sen. Prior - 202-224-2353
Sen. Tester: 202-224-2644
Sen. Voinovich: 202-224-3353
Real ID Exposed at National Press Club with Mark Lerner, Host Mark Lerner, Stop Real ID Coalition, Constitutional Alliance, ACLJ, ACLU, Rep. Sam Rohrer, and Rep. Charles Key speaking straight out about the Real ID Act of 2005, the use of biometrics for identification, and related issues at the National Press Club. Mark Lerner is known for bringing the ACLU and ACLJ together to fight side-by-side against the Real ID; both national organizations are normally on opposite ends of the spectrum when it comes to issues, so to bring them together in agreement against anything, well this is a significant first! Mark Lerner is one of the founders of the Stop Real ID Coalition and a spokes person for the Constitutional Alliance.
Wednesday July 8th, 2009 - Senator DeMint on Glenn Beck Senator Jim DeMint discusses the Federal Reserve and the recent block by Senate Democrats of his attempt to bring S 604, the Senate version of Ron Paul's Audit the Fed bill, HR 1207, to the Senate floor as an amendment.
We're not out of the woods - G8 leaders fear double dip slumpLeaders agree five-point plan to boost growth amid concern that global economy needs help to avoid further recession The leaders of the west's most powerful countries expressed fears tonight of a double-dip recession and stressed the continued need for emergency measures to boost growth until recovery from the worst post-war global recession was assured. Gordon Brown said the G8 summit had agreed a five-point programme to boost economies and create jobs. "There are warning signals we cannot afford to ignore," the prime minister said. A G8 communique released after an opening round of talks at the three-day summit saw some signs of stabilisation following the slump in output last winter, but stressed the world economy still faced "significant risks" and might require help to avoid a double-dip downturn. Leaders stressed that pro-growth policies should be abandoned only once it was certain the recession was over.
Dead Cat Bounce In economics, as in many other "soft sciences," facts are often overshadowed by theories. The dominant economic theory currently in vogue is that the massive government stimuli orchestrated by the Bush and Obama administrations would produce an economic recovery by the end of this year. Thus, it is no surprise that media cheerleaders have seized on the recent steep, but thinly traded, rally to find the facts that appear to fit the theory. From where do these talking heads draw this conclusion? In recent months, we have allowed for the probability that a bear market rally, driven by seemingly low price-earnings multiples, would take hold for the first half of 2009. Months ago, I had stated that the rally would reasonably last into the summer and that the Dow could reach 10,000 before the next major downturn begins.
Barack Obama pushes for climate change deal between G8 and developing countries Mini-summit to lay groundwork for post-Kyoto meeting at Copenhagen but chance of breakthrough is slim The US president, Barack Obama, is to bring together the G8 industrialised nations and the five leading developing countries for a climate change mini-summit, but a breakthrough deal is not expected. Obama is hoping he can bring the two sides closer together so there is a clear understanding of the concessions needed at December's Copenhagen summit, at which a successor to the Kyoto treaty is to be thrashed out. The deal will have to include an admission that developing nations such as India and China must slow the pace in the increase of their carbon emissions.
Gerald Celente the G8 is a smoke and mirror summit
Think we're not in the 'end days' . . . think again. Pope Calls for “World Political Authority” As the leaders of the G-8 states packed their bags and jetted to Italy Tuesday, Pope Benedict xvi provided some moral and spiritual direction to all attending the summit in L’Aquila. Released yesterday, Benedict’s 144-page encyclical, the third of his papacy, is titled “Charity in Truth,” and deals extensively with the economy, business and finance. Benedict’s voluminous encyclical is widely perceived to be a strong argument for greater institutionalization and regulation of multiple global issues, including the global economy. Associated Press reported yesterday that in the communique, “Pope Benedict xvi called … for a new world financial order guided by ethics and the search for the common good, denouncing the profit-at-all-cost mentality blamed for bringing about the global financial meltdown” (emphasis ours throughout).
POPE SAYS CAPITALISM IS FAILING In the spirit of the poignant critiques of capitalism made popular by Pope John Paul II, Pope Benedict XVI has written a scathing letter just in time for the capitalist G-8 economic summit in Italy that demands we find a “profoundly new way of understanding business enterprise.” CNN: Pope Benedict XVI, on the eve of a global economic summit, lashed out at modern capitalism for being shortsighted and short on ethics. “Today’s international economic scene, marked by grave deviations and failures, requires a profoundly new way of understanding business enterprise,” the pontiff said in his third encyclical letter, “Charity in Truth,” which was released Tuesday.
G-8 leaders to receive books on Canova, gold coins World leaders attending the Group of Eight summit opening Wednesday in Italy will each be presented with a gift from the past and one for the future. Handmade books portraying works by Neoclassical sculptor Antonio Canova, as well as gold coins representing an imaginary future world currency will be given to the participants at the opening of the three-day summit. . . . . . . . . The coins, made by Belgian Luc Luycx, who designed one side of the Euro coins, are called "eurodollars," in a symbolic call for a common currency to unite Europe and the United States. They have a value of euro2,800 ($3,900) and were produced by the United Future World Currency, a group pushing the idea of a global currency.
G8 sees economy still in peril, falters on climate G8 leaders believe the world economy still faces "significant risks" and may need further help, according to summit draft documents that also reflect failure to agree climate change goals for 2050. Progress on the environment was impeded by Chinese President Hu Jintao returning home due to unrest in northwestern China in which 156 people have died. Before he left, summit host Silvio Berlusconi spoke of Chinese "resistance" on climate goals.
Wednesday, July 8th - Rand Paul on Glenn Beck On Wednesday, July 8th, Dr. Rand Paul joined guest host Judge Napolitano on the Glenn Beck show to discuss the federal government's plans to completely take over healthcare.
Treaty Limiting U.S. Nukes Should Not Also Limit Conventional Military Capabilities, Group Warns What’s the rush to negotiate a new nuclear arms treaty with Russia, especially one that limits conventional U.S. military capabilities, a conservative organization is asking. When President Dmitry Medvedev and Barack Obama met in Moscow on Monday, they signed a “joint understanding” that commits both countries to reduce their strategic nuclear warheads to a range of 1,500-1,675 – down from the current ceiling of 2,200 stipulated in the expiring START treaty.
World recession easing, recovery fragile, IMF says The global economy is slowly starting to pull out of its deepest recession since World War Two but recovery will be sluggish and policies need to remain supportive, the International Monetary Fund said on Wednesday. In an update of its World Economic Outlook, the IMF said the global economy is likely to contract 1.4 percent this year, a touch steeper than the 1.3 percent decline it projected in April.
China's dollar delusion Dethroning the US dollar as the world's most powerful currency might not be in China's long-term interests The People's Bank of China recently reiterated the need for a global currency to rival the US dollar - through a vastly expanded role for the Special Drawing Rights (SDRs) of the IMF. The issue was highlighted at the recent summit of Brics - the group comprising Brazil, Russia, India and China - and is likely to come up again at this week's G8 meeting. China is right in thinking that the global meltdown is due partly to abuse of the dollar's reserve currency status by the United States. But this has been aided and abetted by China's own mercantilist policies that have created huge current account surpluses and excess liquidity. China's search for an alternative international reserve currency is touched with irony: the drug pusher is pushing the addict to reform itself.
Commodities: Bursting Bubble or Crouching Tiger? Today's article is a follow up to last week's piece entitled, "Commodity Bubble Revisited." The premise of last week's article was to make the case that commodities were not in a bubble in the last bull market that ended in 2008 with a climatic top. Today's article makes the case that the secular commodity bull market that began earlier this decade is resting, waiting to pounce on the global market like a crouching tiger under the right conditions rather than a bursting bubble. While it is true that certain fundamental drivers that have underpinned the secular commodity bull market have changed -- think of a shell-shocked U.S. consumer rediscovering the meaning of saving -- other fundamental shifts remain in tact and will propel commodity prices to new highs in the years to come.
Republican Whip Eric Cantor (R-VA) Speaks on the Floor on Cap & Trade
Gold prices set for record highs by end 2009:GFMS Gold prices could easily re-attain the $1000 mark and rise to record highs before the end of the year, according to Philip Klapwijk, Chairman GFMS Ltd. Launching the Chinese language edition of the GFMS Ltd Annual Gold Survey, Klawijk said that prices could remain at sub $900 levels in the short term. Philip Klapwijk noted that the consultancy expected some increase in overall supply in 2009.This is because an expected further drop in net official sector sales could be offset by a modest increase in mine production and,especially, a record high in the recycling of fabricated products. Moving to demand side, fabrication demand, which is dominated by jewelry, is forecast to fall considerably in 2009, due to high and volatile gold prices coupled with the slowdown in the global economy.
Sell Gold, Then Buy It Many of the World's Great Investors Are Doing Exactly That From a technical standpoint, gold looks set for some short-term pain. Just like stocks, the gold chart is taking a page from 2008. Check it out: [see chart] When it hit the fan last year, gold failed to deliver the righteous moonshot many had forecast. It certainly was a better place to be than stocks, but gold still suffered. Until further notice, the same playbook appears to be in use today... gold may be the once and future money, but the dollar and U.S. Treasuries remain the ultimate flight to quality when the going gets tough.
Fundamentals, dollar puts pressure on commodities The US greenback remained range bound in last few weeks against the world’s major currencies. The benchmark dollar index has shown narrow range movement between 79 and 81 (on closing basis) in last few trading sessions. The commodities prices also track the dollar movement because they are denominated in dollar. Since the recovery process of global economies may slow down in coming quarters, the dollars` safe haven demand may spur the benchmark index, same time it may invite the fall in the commodities prices because in general the first is inversely proportional to the later.
Gold Drops as U.S. Dollar Rises THE PRICE OF GOLD dropped to a new two-week low lunchtime Wednesday in London, falling 1.6% from this week's start to slip through $918 an ounce. US stocks meantime ticked higher at the open after Tuesday's sell-off, while stock markets across the Far and Middle East ended the day lower. Emerging-market currencies also fell hard against the Dollar while crude oil dropped below $62 per barrel. The Euro touched its lowest level against the Japanese Yen since May 23rd. "While we expect Dollar strength to weigh on gold, we are seeing good technical support and physical buying interest at the $919-920 area," reports Walter de Wet at Standard Bank.
Why Trillion-Dollar Infusion May Not Produce Inflation—or Drive Gold Up The assumption is that because we've increased the U.S. monetary base by close to a trillion dollars over the last nine months that inflation is guaranteed. We're locked in, that's a certainty—we're heading toward higher prices for most of the things we buy. But just because you increase the money supply does not necessarily guarantee inflation. Certainly when you create a trillion new dollars, you raise the possibility of inflation, but the real key lies in where most of that money goes. The most telling statistic is that even though we've increased the monetary base by a trillion dollars, 90% of that money—about $900 billion—sits in the vaults of commercial banks around the U.S. as excess reserves. So we're in a situation where most of the new money has gone straight into bank vaults. It's not out roaming the streets, buying things like food and fuel and bidding up prices. We've seen this movie before. It was called "Terror in Tokyo." Back in the '90s, the Japanese government created the yen equivalent of about $400 billion in an attempt to reinflate its economy and the exact same thing happened. Most of that money sat in bank vaults and failed to inflate anything, with the result being that prices for almost everything in Japan fell for the next decade.
Republican Whip Eric Cantor (R-VA) on health care
Cantor On MSNBC - more on health care
Another Victim of America’s Ponzi Scheme Economy (Part 2) Today, America’s “New Economy” is based exclusively on services - primarily financial and technology-based services, with a whole slew of attorneys and consultants to support transactions and legal agreements. But there are other service industries as well. Over the past few decades, as America's economy has transitioned from old to new, millions of manufacturing jobs have been sent overseas. Many of these jobs have been replaced with blue collar service jobs like landscaping, valets, nannies, maid services, pet services, massage therapy and fitness trainers. Today, each represents a large and growing industry in America. Others have enrolled in for-profit colleges hoping to transition into another career. Little do they realize, most of these “new job opportunities end up being dead-end jobs.
IMF does not see Asia decoupling from world economy Asia cannot decouple from the global economy despite signs that it is emerging from the worldwide slump even faster than many economists had expected, an International Monetary Fund official said on Wednesday. Olivier Blanchard, the IMF's chief economist, said strong growth particularly out of China and India had rekindled hopes that the region could decouple from the slower-growing world economy and recover on its own.
Why Trouble in Iran Will Lead to War Iran is at a crossroads. America is ignoring it. Germany isn’t. In the broad scheme, Iran’s star is rising. It is ready to seize the advantage from a fading United States in both Iraq and Afghanistan. In fact, it has effectively neutralized the long-standing threat from the U.S. It has prepared its terrorist proxies in Lebanon and the Gaza Strip for a future attack on Israel. It is about to go nuclear. Many long-held dreams of Iran’s radicals appear about to come true.
The Mortgage Treason Of The Intellectuals And Regulators The new enthusiasm for government regulation of the financial sector often rests on a double standard that sees markets as fever swamps of irrationalism and government as the well of refreshingly rational guidance. Unfortunately, there's no justification for this view of things. In fact, regulatory pressure helped get us into the mess we're in. Sometimes this was an unintended consequence of regulations. Think risk capital requirements encouraging banks to manage risk through credit default swaps or off-balance sheet vehicles. Sometimes it was an intended consequence--such as the government pressuring bankers to make loans on "flexible" underwriting standards.
Obama's Support Collapses In Rust-Belt Ohio The weak economy -- or, more importantly, the failure to create jobs quickly -- is flensing Barack Obama's support on Ohio, a crucial electoral state. . . . . By a small 48 - 46 percent margin, voters disapprove of the way Obama is handling the economy, the independent Quinnipiac (KWIN-uh-pe-ack) University poll finds. This is down from a 57 - 36 percent approval May 6. A total of 66 percent of Ohio voters are "somewhat dissatisfied" or "very dissatisfied" with the way things are going in the state, while 33 percent are "very satisfied" or "somewhat satisfied," numbers that haven't changed since Obama was elected.
Goldman And Morgan Have The Most To Lose In New CFTC Regulations If the CFTC can successfully push through its anti-speculation regulations it would hurt Goldman and Morgan Stanley the most, Bloomberg reports. The CFTC plans to review exemptions to trading limits that since the 1990s allowed Goldman and Morgan to build multibillion-dollar ventures in futures, swaps and over-the- counter markets. “They’re very significant swaps participants, and they’re very significant dealers for over-the-counter swaps in the commodities market,” said Dan Waldman, former general counsel of the CFTC and a senior partner at Arnold & Porter LLP in Washington. “If their ability to do some of that business was limited, they’d have to find other ways to reduce their risk or reduce the size of their commodity swaps books.”
Taibbi missed a Goldman bubble In his colorful piece blaming Goldman Sachs for blowing every major financial bubble of our time, Matt Taibbi actually left out a rather big one: the Penn Central commercial paper debacle in 1970. WSJ: Goldman was nearly driven out of business…when the Penn Central railroad went bankrupt in 1970. Because it was Penn Central’s commercial-paper dealer, Goldman was sued not only for losing investors’ money but also for not informing clients that its privileged information had caused the firm itself to dump Penn Central’s paper. Goldman was censured by the Securities and Exchange Commission and lost tens of millions of dollars in the aftermath.
PT 1-5 The Great American Bubble Machine Matt Taibbi on how Goldman Sachs has engineered every major market manipulation since the Great Depression.
In Rolling Stone Issue 1082-83, Matt Taibbi takes on "the Wall Street Bubble Mafia" — investment bank Goldman Sachs. The piece has generated controversy, with Goldman Sachs firing back that Taibbi's piece is "an hysterical compilation of conspiracy theories" and a spokesman adding, "We reject the assertion that we are inflators of bubbles and profiteers in busts, and we are painfully conscious of the importance in being a force for good." Taibbi shot back: "Goldman has its alumni pushing its views from the pulpit of the U.S. Treasury, the NYSE, the World Bank, and numerous other important posts; it also has former players fronting major TV shows. They have the ear of the president if they want it." Here, now, are excerpts from Matt Taibbi's piece and video of Taibbi exploring the key issues.
PT 2-5 The Great American Bubble Machine
PT 3-5 The Great American Bubble Machine
PT 4-5 The Great American Bubble Machine
PT 5-5 The Great American Bubble Machine
U.S. mortgage fraud 'rampant' and growing-FBI U.S. mortgage fraud reports jumped 36 percent last year as desperate homeowners and industry professionals tried to maintain their standard of living from the boom years, the FBI said on Tuesday. Suspicious activity reports rose to 63,713 in fiscal year 2008, which ended last September, from 46,717 the year before. California and Florida, centers of the housing bust, had the highest numbers of suspicious reports as foreclosures jumped, the stock market dropped and credit dried up.
Wilbur Ross sees US PPIP plan as only $125 bln-C Billionaire investor Wilbur Ross predicted on Tuesday that the government's plan to have private investors buy unwanted bank assets would end up as a fraction of the original $1 trillion size, he told CNBC television in an interview. Ross, chairman and CEO of WL Ross & Co., said he believed the program would end up being about $100 billion to $125 billion in size, compared with early forecasts for sales of up to $1 trillion in securities.
U.S. House panel seeks plans for future of TARP The U.S. Treasury would have to inform Congress by December 1 on whether it expects to lend more from the $700 billion financial rescue plan under legislation approved late on Tuesday by a House of Representatives panel. The House Appropriations Committee approved a $24.2 billion 2010 spending bill to bolster the Treasury Department and other government agencies like the Securities and Exchange Commission as they try to address the economic and financial crisis.
Democrats expand Senate control, yet splits remain Democrats achieved their biggest majority in the U.S. Senate in decades on Tuesday as Al Franken of Minnesota finally took his seat -- but President Barack Obama will still have to fight hard to muster the votes to pass healthcare reform and other major initiatives. Franken, who won the seat after a 239-day recount and legal battle following last November's election, became the 60th member of the Senate Democratic Caucus. That gives them the potential to clear Republican procedural hurdles, confirm presidential nominees and pass legislation without a single Republican vote if they stick together.
PROGRESSIVES FLEX HEALTH CARE MUSCLE The progressive Democrats in Congress have had just about enough of all this bipartisanship, especially if it means scrapping a public health care plan. Rahm Emanuel recanted his hint of compromise to a room full of hopping mad House liberals Tuesday night. Roll Call: White House Chief of Staff Rahm Emanuel reassured House Democrats on Tuesday night that President Barack Obama strongly backs a government-run health insurance plan, seeking to quell a firestorm among liberals upset at Emanuel’s comments in the Wall Street Journal that suggested such a plan could be delayed.
Baseless expenditures The United States empire of bases - at US$102 billion a year already the world's costliest military enterprise - just got a good deal more expensive. As a start, on May 27, the State Department announced it will build a new "embassy" in Islamabad, Pakistan, which at $736 million will be the second priciest ever constructed. It will cost only $4 million less, if cost overruns don't occur, than the Vatican-City-sized one the George W Bush administration put up in Baghdad. The State Department was also reportedly planning to buy the five-star Pearl Continental Hotel (complete with pool) in Peshawar, near the border with Afghanistan, to use as a consulate and living quarters for its staff there.
Bachmann Rails Against Census On Beck
Economic Crisis Makes Killing More Popular Sometimes when writing about the second great depression gets too dreary, we try to distract ourselves by reading the work of Melissa Lafsky, a science writer at Discover magazine's blog. It usually a good way to get our minds off of the latest financial catastrophe. But not today. Today she is informing us that rises in unemployment similar to those in the current economic crisis increase homicide and suicide rates. Researchers at the University of Oxford and the London School of Hygiene and Tropical Medicine have established the connection between unemployment and killing. In the upcoming edition of the Lancet, a very important medical science magazine, they will publish a paper titled “The Public Health Effect of Economic Crisis and Alternative Government Policy Responses in Europe: An Empirical Analysis.” Here's what they find:
Chuck Schumer's Top Financial Analyst Is Now A Hedge Fund Lobbyist The hedge fund sector's main lobbying group employs Senator Chuck Schumer's former top banking aide, Carmencita Whonder. Just two years after Schumer sat down with top hedge fund managers to tell them that they'd better start playing politics now that Democrats were running Capitol Hill, the circle has been completed. Jim Chanos of Kynikos Capital set up the Managed Fund Association, which then hired Whonder's firm Brownstein Hyatt Farber Schrek to lobby lawmakers.
California Can't Even Deliver Its IOUs California has apparently invented the IOU-squared or the IOU-IOU, however you want to put it. Vendors in the state say, according to NYT, that they've not received the IOUs they were promised -- a problem, since banks have threatened to stop accepting them as cash by this Friday. Some vendors say they know of nobody who's received an IOU yet.
Ex-baseball star Lenny Dykstra files bankruptcy Lenny Dykstra, the former star center fielder for the New York Mets and Philadelphia Phillies Major League Baseball teams, has filed for Chapter 11 bankruptcy protection, court records show. The 46-year-old has no more than $50,000 of assets and between $10 million and $50 million of liabilities, according to a petition filed Tuesday with the U.S. Bankruptcy Court in the Central District of California.
Will Microsoft soon be 'toast"? Google Plans a PC Operating System In a direct challenge to Microsoft, Google announced late Tuesday that it is developing an operating system for PCs that is tied to its Chrome Web browser. The software, called the Google Chrome Operating System, is initially intended for use in the tiny, low-cost portable computers known as netbooks, which have been selling quickly even as demand for other PCs has plummeted. Google said it believed the software would also be able to power full-size PCs.
Guess who will win this one??? It won't be Microsoft. Google Starts New Microsoft War with Chrome OS When Google (GOOG) launched Android, the open-source operating system designed to power mobile Internet devices, industry analysts were surprised to discover that PC manufacturers had begun to use it to power netbooks, the cheap, low-power laptops that have become among the biggest sellers in a dismal market. Now, Google has thrown itself fully into the netbook market with the release of Chrome OS, a new operating system based on its Web browser and designed to directly challenge Microsoft (MSFT) for the future of the personal computer.
Americans are getting cold feet over Democratic proposals The financial system collapsed. Housing prices cratered. Unemployment is at a record high for the last quarter-century. The Democratic president has a solidly positive job rating. And yet we Americans have not suddenly become collectivists. The economic distress of the 1930s led Americans to favor less reliance on markets and more on government. The economic distress of the 1970s led Americans to favor less reliance on government and more on markets. It doesn't seem unreasonable to expect, as many political liberals have been predicting, that the economic distress of the late 2000s will produce a shift in the 1930s direction. But it doesn't seem to have happened yet.
Gerald Celente on Fox & Friends the 2012 Economic Apocalypse
Gerald Celente on Fox & Friends the 2012 Economic Apocalypse 2/2
Honduras rivals head for dialogue with U.S. backing The two rivals in Honduras' political crisis prepared on Wednesday to open talks on a solution to last month's coup and a senior U.S. official pledged Washington's strong support for the dialogue. President Barack Obama's administration, facing a major test of its promise to improve relations with Latin America, is counting on mediation by Costa Rica's president, an experienced peacemaker, to prevent bloodshed in one of the region's poorest countries.
Obama discredits Iran 'green light' Seeking to end speculation about whether his administration had eased its opposition to an Israeli military strike against Iran's nuclear facilities, United States President Barack Obama on Tuesday insisted that Washington's position remained unchanged. When asked in an interview from Moscow, where he has been meeting with top Russian leaders, Obama strongly denied that his administration had given a "green light" to Israel to carry out such an attack.
Clinton sees more Iran sanctions if outreach fails U.S. Secretary of State Hillary Clinton said that Washington would call for more sanctions against Iran if the White House policy of engagement with Tehran failed. Clinton said U.S. outreach to Iran may not work given the country's recent repression of protests after a disputed election. "It may not be possible, in which case we would ask the world to join us in imposing even stricter sanctions on Iran to try to change the behavior of the regime," Clinton said in an interview with Venezuelan television station Globovision, broadcast late on Tuesday.
MyDoom virus hits key networks in US and South Korea A paralysing barrage of electronic cyber attacks has been let loose on government computers and networks in the US and South Korea, including the White House and Pentagon, underscoring the growth in assaults against vital state infrastructure. Other targets affected by one of the most serious cyber attacks to hit the US included the New York stock exchange, the national security agency, homeland security department, state department and the Washington Post. In South Korea, the presidential Blue House came under fire from the rain of electronic interference, along with banks, government computers and media. South Korean intelligence officials quickly pointed the finger at North Korea, or pro-Pyongyang forces. But computer security analysts in Seoul said that they had tracked the attack as an updated version of the Russian MyDoom virus - the world's fastest spreading virus when it was first unleashed in 2004.
China Official Threatens Death Penalty After Riots URUMQI, China — As northwest China’s Xinjiang Uighur Autonomous Region settled into tense stillness on Wednesday after three days of deadly ethnic violence, a Communist Party leader from the region pledged to seek the death penalty for anyone behind the strife that state news reports say claimed at least 156 lives. Li Zhi, the party boss in Urumqi, the Xinjiang capital where the violence was centered, said that many suspected instigators of the riots had been arrested and that most were students. His promise to seek the death sentence for those responsible came as China’s president, Hu Jintao, cut short his stay in Italy, where he had planned to attend a Group of 8 summit meeting, to deal with aftermath of the riots, the worst ethnic violence in China in decades.
Mixed signals over Chinese missiles As defense analysts and experts in the United States, Japan and India digest the recent "Ballistic and Cruise Missile Threat" report by the US Air Force (USAF) National Air and Space Intelligence Center (NASIC) - particularly any elements pertaining to China - important gaps or omissions are surfacing. The bottom line is that these gaps, along with differences between the NASIC report [1] and a US Defense Intelligence Agency (DIA)-authored report on the Chinese People's Liberation Army (PLA) released earlier this year, are making the overall US analysis of the situation unfolding in China involving missiles and military space matters increasingly hard to gauge.
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IMPORTANT ISSUE - watch and send to everyone you know! DeMint amendment to audit the Federal Reserve blocked by Senate Leadership Senator Jim DeMint (R-SC) is blocked by Senate Democrat Leadership from having a vote on his amendment to audit the Federal Reserve, based on a bill authored by Congressman Ron Paul (R-Texas) in the House, H.R. 1207, and Senator Bernie Sanders (D-Vermont) in the Senate, S. 604.
IMPORTANT ISSUE - watch and send to everyone you know! DeMint amendment to audit the Federal Reserve blocked by Senate Leadership Senator Jim DeMint (R-SC) is blocked by Senate Democrat Leadership from having a vote on his amendment to audit the Federal Reserve, based on a bill authored by Congressman Ron Paul (R-Texas) in the House, H.R. 1207, and Senator Bernie Sanders (D-Vermont) in the Senate, S. 604. http://www.youtube.com/watch?v=4tRQHsXujpo
Will gold replace dollar as global reserve currency? Of course the world is not going to replace the dollar as a reserve currency immediately, or for that matter ever. What is going to happen is the IMF or an Asian entity will formulate a basket of currencies and possibly gold into a unit much like the USDX. There will be an issuing agent and much like the SDR it will be an accounting unit representing the underlying bits and pieces. It is from this base that Japan has proclaimed major nations should support the dollar. This is management of perspective economics and spin.
Gold & Gold Stocks are the Best Bets, says Peter Schiff Gold prices are poised for a "spectacular" and prolonged rally as the recession deepens and investors finally become disillusioned with the U.S. dollar. So says renowned Wall Street financial forecaster and economist Peter Schiff, who loudly warned of the October 2008 stock market crash and accompanying recession as far back as 2006. Since the global economic meltdown, the president of the Connecticut-based investment firm Euro Pacific Capital has struck a chord with rattled investors who have lost faith in America's bedrock financial institutions. Hence, his well-received television media blitz in recent months has focused on extolling the virtues of owning gold bullion or gold equities, as well as urging Americans to get out of U.S. denominated investment assets.
'Gold is headed to $1224' The hyperinflation we face has nothing to do with demand pull. It is a currency event as it has always been in every historic example going back to the Romans. Hyperinflation has always occurred in the condition of the most vile economic activity. MOPE via its tool SPIN cannot and will not prevent what is 123 days away.
Investment demand for gold to explode soon As gold remains the ultimate safe haven, investors drove up investment demand for gold, according to the World Gold Council, to an unprecedented high in Q1 2009. Not surprisingly institutions like City Group, HSBC and Merill Lynch are calling for substantial higher gold prices down the road as world unravels.
How Long Can the US-Dollar Defy the Law of Gravity? In the midst of the longest and deepest, post World-War II recession, America’s financial position with the rest of the world has deteriorated sharply. Three decades of massive trade deficits have turned the United States from the world’s top lender to the world’s largest debtor, - and dependent upon the whims of the so-called emerging nations, laden with huge foreign currency reserves, to finance the bailout of Wall Street Oligarchs, and President Barack Obama’s social programs. Foreigners own roughly half of the US-government’s publicly traded debt, or $3.47-trillion, representing nearly 25% of the size of the US-economy, the highest level in history. If foreign lenders were to significantly reduce their purchases of US-Treasury notes, without even dumping their current holdings, US long-term interest rates could zoom higher, and the US-dollar could crumble.
Treasury Works on 'Plan C' To Fend Off Lingering Threats Troubling Issues in Lending Could Still Disrupt Economy As the financial system tries to right itself after its near-collapse last fall, the Treasury Department has assembled a team to examine what could yet bring it down and has identified several trouble spots that could threaten the still-fragile lending industry. Informally known as Plan C, the internal project is focused on vexing problems such as the distressed commercial real estate markets, the high rate of delinquencies among homeowners, and the struggles of community and regional banks, said government sources familiar with the effort.
World economies 'precarious' as G-8 meets The leaders of the Group of Eight convene their annual summit in Italy on Wednesday amid the most devastating global recession since the Great Depression. The G-8 makes up seven the world wealthy industrial democracies -- United States, Japan, Germany, Britain, Italy, France and Canada -- and Russia. Except for Canada, all have suffered much bigger declines in economic activity than the United States has during the past year. Representing 870 million people with as annual economic output approaching $32 trillion, G-8 leaders will hold a "working lunch" Wednesday.
G-8 gathers in city rocked by earthquake, bringing it visibility President Obama joins world leaders recovering from the past year's global recession today for three days of meetings in a symbolic setting: a city rebuilding from a deadly earthquake. It will be a fitting locale after months of government spending, bailouts and regulation aimed at fixing ailing economies. Rather than living on a cruise ship off a Sardinian island as planned, the leaders will bunk in barracks and meet in a converted police complex.
Aftershocks at G-8 Summit Site In Italy Raise Fears About Safety After an earthquake shattered this mountain city in April, killing 296 people and leaving tens of thousands homeless, the Italian government decided to move the Group of Eight summit here to draw global attention to the rebuilding effort. Since then, however, this geologically unstable region has been plagued by a series of aftershocks, fraying nerves in an already jittery population and raising doubts about whether L'Aquila is the best place for leaders of the world's top industrial nations to meet under one roof.
Tom Woods on Glenn Beck - Tuesday July 7th, 2009 (Judge Napolitano as guest host)
Big overflight news suddenly in the air Barack Obama landed Monday in Moscow, the first stop on his latest magical mystery tour, this time to eliminate nuclear weapons, cool global warming, drop in on the pope at the Vatican (perhaps to apologize for the Inquisition) and make a call on his ancestral Africa (perhaps to apologize for slavery). Important though Mr. Obama's trip is, there's a definite buzz in the air that something more interesting than talking and apologizing is on the bubble elsewhere. When an interviewer asked Joe Biden whether Israel is in its rights to punish Iran if no one else does, the veep was unusually forthcoming: "Look," he said, "Israel can determine for itself - it's a sovereign nation - what's in their interest and what they decide to do relative to Iran and anyone else." Then, as if remembering who he was, he added: "Whether we agree or not."
Federal Web sites knocked out by cyber attack Federal agency Web sites knocked out by massive, resilient cyber attack A widespread and unusually resilient computer attack that began July 4 knocked out the Web sites of several government agencies, including some that are responsible for fighting cyber crime, The Associated Press has learned. The Treasury Department, Secret Service, Federal Trade Commission and Transportation Department Web sites were all down at varying points over the holiday weekend and into this week, according to officials inside and outside the government. Some of the sites were still experiencing problems Tuesday evening. Cyber attacks on South Korea government and private sites also may be linked, officials there said. U.S. officials refused to publicly discuss details of the cyber attack. But Amy Kudwa, spokeswoman for the Homeland Security Department, said the agency's U.S. Computer Emergency Readiness Team issued a notice to federal departments and other partner organizations about the problems and "advised them of steps to take to help mitigate against such attacks."
From Here To Paternity The study of money, above all other fields in economics, is one in which complexity is used to disguise the truth or to evade truth, not to reveal it." John Kenneth Galbraith
“Paper money eventually returns to its intrinsic value - zero." ~ Voltaire - 1729
The more things change, the more they stay the same, eh dear readers? Who’s responsible for this incredible mess? Who’s the father! Is there one man, one institution responsible? How did the country allow itself to become dependent on mountains of debt, gratuitous consumption, and housing and related industries to generate prosperity? Are you kidding me? Housing? Accounting for 40% of the S&P 500 profits!! What were we drinking? Who on earth were we listening to? Did we think we were going to propel our way to prosperity by pushing paper around? By inflating assets through rampant money supply and credit growth? Have we all been drinking the Cool Aid for thirty years? The short answer is yes. Hell yes.
Treasuries Rise as Growth Outlook Tempers Debt Deluge Concern Treasuries rose, with the 10-year yield touching the lowest in more than a month, as investors speculated the worst recession in 50 years has further to run, tempering concern record U.S. borrowing may outstrip demand. U.S. debt gained as the U.S. sold $35 billion of three-year notes at the lowest yield since May. The auction is the second of a record four this week totaling $73 billion and stocks fell. An adviser to President Barack Obama said the economy is “worse than we forecast” and the government should consider drafting a second stimulus package.
Money, Money, Who Makes the Money (Editor's note: "Money, Money, Who Makes the Money" is the third chapter of a book by Mr. Pugsley entitled "The Alpha Strategy", written twenty-eight years ago. We intend to post a chapter each week. -JSB) As society grows, the inconvenience of barter becomes overwhelming. Things such as automobiles and accounting services are just plain difficult to barter with, especially when all you want is a quart of milk or a pencil. Consequently, as the population and number of products increase, individuals naturally select certain commodities to use in making exchanges. These items, by popular mandate, become money.
U.S. debt shrinking at glacial pace Eighteen months into a deep recession triggered by a credit bubble, consumers have made little progress shrinking a mountain of debt. Until they do, the economy will struggle to grow — likely for years. Household debt peaked at $13.9 trillion in 2008, almost double the figure from 2000. Since then, as consumers cut up credit cards, refinanced outsized mortgages and slashed spending, debt has fallen — all the way to $13.8 trillion, according to the Federal Reserve.
Peter Schiff July 7th special Vlog
Staggering Budget Gap and a Reluctance to Fill It No one argues that the staggering deficits run up by the American government in a bid to rescue the economy are desirable, healthy or even sustainable — not if the national debt continues to swell at its current pace. But considerable debate centers on when and how vigorously to start easing off Washington’s borrowing habit, with substantial risks at both extremes. Pull back on government spending now, the argument runs, and condemn an already hobbled American economy to years of mass joblessness and anguish. Indeed, some economists are already arguing that with unemployment near double digits, the government must consider giving another dose of stimulus spending now, despite the fact that this will add to the deficit.
Banks get stingy on credit; new cards down 38% Despite massive government efforts to bolster the credit market, banks are pulling back severely on card lending. In the first four months of the year — the latest data — banks issued 9.8 million new credit cards, a 38% drop from the same time last year, according to Equifax credit bureau data. Low-risk borrowers can still get credit, but they're getting less than before. The average limit on a new card, after rising during the recession, slipped 3% so far this year to $4,594.
Toxic asset program may be too late to help banks Treasury set to unveil managers for toxic asset plan, but many wonder if its moment has passed A government plan designed to rid banks' books of the troubled assets that exacerbated the financial crisis will do little to address a fundamental weakness of the industry or the broader economy, analysts say. The Treasury Department this week will announce the names of between five and 10 fund investment firms participating in the multibillion-dollar plan, according to two industry officials who requested anonymity because they are not authorized to discuss the matter. The plan, known as the Public-Private Investment Program, or PPIP, will leverage private capital with government subsidies so that these investment firms can buy up the soured mortgage-related assets that have clogged banks' balance sheets and made them reluctant to lend freely to businesses and consumers.
The Average Joe’s Take on Government Bailouts – and More A story is making the rounds on the internet these days describing the practical interpretation the average Joe (and plain Jane, too) is putting on the way in which the U.S. government is dealing with the country’s current financial woes. I’ve done some editing and enhancing and present it below for your amusement and enlightenment and have added a segment with some insights and suggestions on how we can all potentially recoup the losses we incurred in 2008.
Mortgage applications fall to 7-month low Higher rates, worries about job security dampen demand U.S. mortgage applications plunged to a seven-month low last week as demand for home refinancing loans tumbled 30 percent, data from an industry group showed on Wednesday. The drop does not bode well for the hard-hit U.S. housing market, which has been showing some signs of stabilization, with sales rising and home price declines moderating in many regions of the country.
The Nascent Depression: Be Ready to Barter and Adopt the Rhodesian View I receive several e-mails each day from readers asking whether the currently-unfolding economic depression will be inflationary or deflationary, whether it will last long, and whether or not the US Dollar will be supplanted by a new currency. My answer is simple: "All of the above." Back in early 2008, I warned that a depression with simultaneous inflation and deflation was possible. As I've mentioned several times in my blog, here in the US we are likely to see a continuation of the current gradual deflation followed by a period of mass currency inflation. Plan accordingly. Try to start looking at prices in terms relative value. In a world of hyperinflation where everyone is a millionaire, absolute prices area almost meaningless, but watching relative prices and values is crucial. For example, a loaf of bread and a gallon of gas have sold for roughly the same amount, since the late 1970s. This outlook on prices is what I call The Rhodesian View.
On Foundation of Lies, Recovery Impossible Gold continues to hang tough in the midst of oil’s nasty selloff. Although August crude has fallen more than 14%, from last Tuesday’s peak of $73.38, a Comex Gold futures contract expiring the same month lost just 2.5% of its value during the same period, falling from $947 to $924. The fact that gold has not plummeted in sympathy with oil strongly hints that it will be quite feisty when selling in the oil pits finally lets up. It was triggered by fears that the alleged global economic recovery is much weaker than had been thought. One might have expected investors to be prepared for this turn of events, but apparently not. The selling of oil began in earnest in connection with an uptick in job losses reported last week by the Department of Labor, and a 0.1 increase in the U.S. unemployment rate. But it has snowballed since, lending weight to the notion that investors really were surprised by signs of renewed weakness in the U.S. economy.
Can The Federal Reserve Really Spot Bubbles? Not so long ago the mantra of the Federal Reserve was that it lacked the ability to detect financial bubbles or pop them in an orderly way. Instead, the idea was that the Fed could try to ameliorate the busts that followed a boom. "It was far from obvious that bubbles, even if identified early, could be preempted short of the central bank inducing a substantial contraction in economic activity - the very outcome we would be seeking to avoid,” Alan Greenspan famously said. "Prolonged periods of expansion promote a greater rational willingness to take risks, a pattern very difficult to avert by a modest tightening of monetary policy."
Why Are We in This Bear Market? The short answer: somewhere around halfway through it. The long answer follows. The price to earnings ratio for the S&P 500 is currently greater than 100 and earnings are not coming back strong in the next few quarters, I can assure you. If you think so, stop reading here and go back to CNBC to get your analysis. Cramer has a hot stock tip for you right now! This is not a regular bear market. This is a credit contraction bear market like the one in the 1929-1932 time frame or the Japanese 1990-1992 bear market. Those who go on and on about money printing fail to realize that most of the money printing over the last decade didn’t come from the private, for profit federal reserve corporation or the government. It came from bankstas and Wall Street leveraging the printed money via loans and other credit instruments.
Obama Stands to Be Judged on Economic Recovery Nothing may be more important to public assessments of President Obama's leadership than the state of the economy, and at this point there are political warning lights flashing. In light of the latest unemployment figures, there are more persistent questions coming at the administration. Did Obama and his team get it right last winter when they put together their $787 billion stimulus package, or did they undershoot? If they made a mistake, what should they do now?
Wall Street hits 10-week low amid talk of new stimulus Socks fell to their lowest level in 10 weeks on Tuesday as talk of a second government stimulus plan heightened fears that the economy is not yet on the path to recovery and that the corporate earnings season starting this week will be weak. A member of the Obama administration's economic advisory panel said the United States should plan to possibly provide a second round of stimulus funds to prop up the economy. The comments come as investors question earlier optimism for a quick recovery, which had driven stocks as much as 40 percent higher since early March.
CFTC: Corrupt Foxes Tending Chickens All the hyperbole in the mainstream media announcing imminent changes by the CFTC (Commodities and Futures Trading Commission) amounts only to so much spin and P.R. There aren’t too many thinking adults involved even peripherally in the global poker game known as the Futures market who still believe the house always wins by dint of natural statistical preference. The game is rigged.
Ron Paul Explains NWO Banking Mafia System
Pope urges global action on economy Pope Benedict XVI on Tuesday released an encyclical tackling the moral dimensions of the global economic crisis, just in time for the Group of Eight industrialized nations summit that begins Wednesday in L'Aquila, Italy. Called "Caritas in Veritate," or "Charity in Truth," it calls for selfless love, truth and justice in a globalized society where great gulfs exist between the haves and have-nots. "If we love others with charity, then first of all we are just towards them," the pontiff wrote. "To love someone is to desire that person's good and to take effective steps to secure it."
HUD allocates over $1 billion in to jump-start affordable housing construction in 26 states U.S. Housing and Urban Development Secretary Shaun Donovan today announced that HUD is approving plans submitted by state housing finance agencies for $1,035,322,485 to jump start affordable housing programs in states throughout the country that are currently stalled due to the economic recession. Funded through American Recovery and Reinvestment Act of 2009 (Recovery Act), HUD’s new Tax Credit Assistance Program (TCAP) will allow 26 state housing finance agencies to resume funding of affordable rental housing projects across the nation while stimulating employment in the hard-hit construction trades.
Fed study: Obama mortgage plan should give money to borrowers, not banks A study by the Boston Fed has found that the administration’s mortgage rescue plan has failed to provide that all important profit incentive. According to today’s Boston Globe: Mortgage lenders don’t try to rework most home loans held by borrowers facing foreclosure because it would probably mean losing money. The Boston Fed’s findings suggest the Obama administration’s major effort to solve the foreclosure crisis by giving the lending industry $75 billion to rewrite delinquent loans to more affordable levels is not likely to work.
Apartment Vacancy Rate Hits 22-Year High The vacancy rate for U.S. apartments hit a 22-year high in the second quarter as rising unemployment reduced demand during what is usually the peak leasing season. Rents fell the fastest in markets that have shed white-collar jobs, such as New York and San Jose, Calif., and in markets where many foreclosed homes and condominiums have been turned into rental property, including Las Vegas and Orange County, Calif. Vacancy levels nationally rose to 7.5% in the April-to-June period, up from 6.1% a year earlier, according to Reis Inc., a New York real-estate research firm. Of the 79 markets tracked by Reis, 45 showed an increase in vacancies.
Moody’s Downgrades $7.6bn of Jumbo RMBS Moody’s Investor Service took the red pen to 344 tranches of 61 residential mortgage-backed securities (RMBS) backed by jumbo loans in excess of the conforming loan limit ($729,750). Together the relevant downgraded RMBS totals $7.59bn. Moody’s downgraded $4.25bn of jumbo RMBS issued by Wells Fargo. The ratings agency downgraded ratings of 104 tranches from 21 RMBS transactions backed by prime jumbo loans issued by Wells in 2004. It also downgraded 98 tranches of 18 jumbo RMBS — worth $2bn — issued from 2002 to 2004 by Banc of America.
Luxury Wine Market Reels from Downturn Many of America's high-end wineries are reeling from the economic downturn, as even wealthy drinkers slash spending on fine wines. The slump comes as Americans continue to drink more wine overall. Recession-weary consumers, however, are buying more mid- and low-priced wines, causing a sharp falloff in sales of wines priced at $25 a bottle and higher. The shift is pinching the profits of luxury vintners in Napa and Sonoma counties and forcing many to cut prices and seek new distribution channels. Some hard-hit wineries have quietly put themselves up for sale. There is likely to be "a lot of M&A activity in the short-term," says Mike Jaeger, president of Wilson Daniels Ltd., which helps luxury winemakers market their products.
The six family-controlled Illinois banks that collapsed on Thursday were doomed by massive holdings of trust preferred securities, Wall Street instruments that came into vogue during the industry's boom but are now battering a growing number of small banks.
... Wall Street brokerage firms bought the securities from individual banks and packaged them into collateralized-debt obligations. The firms then sold slices of the CDOs to investors, marketing them as lucrative but low risk. Many of the buyers were small and regional banks.
These trust-preferred securities (TPS) were attractive investments for small banks because they have characteristics of both debt and equity. If the securities were issued by a bank holding company (BHC) - with certain characteristics - they were treated as a tier 1 capital by regulators.
Where Are The Jobs Mr. Obama? Remember how Barack Hussein-Obama told the American people he just had to have the Congress pass his stimulus bill, because it would created thousands and thousands of “Shovel Ready Jobs?” The Congress as is its custom today, blindly passed the bill, and just last week, unemployment numbers hit 9.5%. Believe it or not, this disgraceful man is is saying that he didn’t realize what a mess the economy was in; and that it is “George W. Bush’s Fault.” He truly thinks we are idiots, incapable of thinking or processing information on an esoteric level.
CHART OF THE DAY: Remember The 40-Hour Work Week? Last week it was revealed that the average work week of non-farm workers had dropped to an all-time low of 33 hours. It's a worrying sign that even with all the layoffs, employers aren't making their existing employees work more. So what happened to the 40-hour work week? Turns out, that's a long, distant memory.
Jobless Feel Effects of States' Stimulus Rejection Latunga Childers lost her $8-an-hour job as a McDonald's manager in April. Soon after, she opened an envelope from Alabama unemployment officials expecting to find a check. Instead, there was a letter declaring her ineligible for benefits. Behind that letter was a complicated fight over the federal stimulus and the strings that come with it. Alabama stood to receive $100 million in federal stimulus money this spring for benefits to people who lose low-wage jobs, as well as part-timers and seasonal workers. In all, the stimulus provided $7 billion for such workers, an estimated 650,000 people nationally, who typically didn't qualify for any benefits.
The Crooks Get Cash While the Poor Get Screwed Tearyan Brown became a father when he was 16. He did what a lot of inner-city kids desperate to make money do. He sold drugs. He was arrested and sent to jail three years later for dealing marijuana and PCP on the streets of Trenton, N.J., mostly to white kids driving in from the suburbs. It was a job which saw him robbed at gunpoint and stabbed in the chest. But it made him about $1,400 a week.
The Free and the Dead I was out on a big Adirondack lake in a canoe this weekend while the American economy was dying - but you wouldn't have known it for the fleets of giant power boats dragging children back and forth across the water on rubber tubes, and the giant camping vehicles crammed into every bare spot. How do people pay for these things, I wondered. For not a few, installment loans, no doubt - though that still begs the question. The sheer programming of American life runs wide and deep. We are, apparently, a people born to drag children behind hundred-and-fifty horsepower two-stroke engines, so that's what we do, no matter what is really going on in the world. Alas, mindless programming is the sort of thing that kills societies.
Brand name companies go bankrupt As consumers cut back, businesses are scrambling. 13 brands you know -- from an NHL hockey team to Obama's suit maker -- that are hitting the skids. Maybe this is the comeuppance for planting a hockey team in the desert. In May, the Phoenix Coyotes filed for Chapter 11 bankruptcy protection with up to $500 million in debts and less than $100 million in assets. After that, a hockey-worthy fight broke out between the two potential new owners: Jim Balsillie, co-CEO of BlackBerry-maker Research in Motion, and Jerry Reinsdorf, owner of the Chicago White Sox and Chicago Bulls. While Reinsdorf said he would keep the club in its adopted home, Balsillie wanted to move it back to Canada. (The Coyotes started as the Winnipeg Jets before moving to Glendale, Ariz., a suburb of Phoenix, in 1996.)
Big Media "Sliding Into the Abyss" as Execs Head to Sun Valley, Wolff Says Major media executives are gathering in Sun Valley, Idaho this week for Herb Allen's annual media summit. The lush setting and (typically) fawning media coverage of the event masks the industry's grim reality, says Michael Wolff, founder of Newser.com and Vanity Fair columnist. "Every big media company is up against a wall in a way they've never been and never imagined they would be," Wolff says. "They are looking at their very survival."
Public Deficits Seen Curbing Infrastructure Spending Until 2011 Spending on public assets such as roads, rail lines and water systems will fall this year and next because of U.S. state and city budget deficits, a study says. Spending won’t grow until 2011 as tax receipts improve and $120 billion of federal stimulus funds are distributed fully, said the report, released today by IHS Global Insight, a consultant based in Lexington, Massachusetts.
U.S. House May Include Surtax on Wealthy in Health-Care Package House Ways and Means Committee members are likely to propose a surtax on high-income Americans to help pay for an overhaul of the health-care system, according to people familiar with the plan. The tax would be similar to, yet much smaller than, a surtax proposed in 2007 by Ways and Means Committee Chairman Charles Rangel, a person familiar with the committee’s talks said. That plan would have added at least a 4 percent levy on incomes exceeding $200,000, and was projected to reap as much as $832 billion over 10 years.
The Myth Of Medicare Cost Savings Whenever someone dares to ask whether a government-run program can actually save on healthcare costs, the low administrative costs of Medicare are always cited as proof that the public sector is already doing it better than the private sector. Well, maybe. Megan McArdle has a great post arguing why this simple factoid is woefully incomplete. The whole thing is worth a read, but she makes several key points which we'll bullet here:
Health care plan is unpopular Polls find 59 percent oppose taxes on at least some benefits Taxing employer-provided health care plans is a tempting pot of money for Democrats looking for ways to fund an overhaul of the nation's health care system, but the public isn't buying it. One of the key Senate Democrats working on a reform plan said even taxing just the most expensive plans used by wealthier Americans isn't popular "If you go to the public and ask them what they think, they don't like it," said Sen. Kent Conrad, North Dakota Democrat and member of the Finance Committee, referring to polling done recently.
Health Deals Could Harbor Hidden Costs The deals, trumpeted loudly by the White House, would each help pay for a sweeping overhaul of the health care system. First, it was a broad consortium of health industry groups — doctors, hospitals, drug makers and insurers, all promising to slow the growth of medical spending by 1.5 percent. Then, it was the big drug makers, promising savings of $80 billion over 10 years, by lowering the cost of medicine for the elderly. On Wednesday, it will be major hospital associations, pledging to save more than $150 billion over a decade. And a deal with doctors is said to be on tap next.
Consumers falling behind on loans at record pace Soaring unemployment and a shrinking economy drove delinquencies on credit card debt to an all-time high in the first quarter as a record number of cash-strapped consumers fell behind on their bills. Fallout from a still deteriorating housing market caused the rate of consumer loan payments at least 30 days late to rise to 3.23% in the January-to-March period from 3.22% in the 2008 fourth quarter, the American Bankers Association said.
Boeing Buys Plant That Makes Crucial Part of Dreamliner The Boeing Company celebrated its new 787 Dreamliner as not only a state-of-the-art plane, but as a model of how to streamline its production process by relying on outsourcing. But on Tuesday, the company took a step away from that vision after it agreed to acquire the manufacturing plant of a troubled supplier, Vought Aircraft Industries, for $1 billion. Boeing has already had to contend with other supply and production problems on its delayed 787 Dreamliner, a model considered crucial to the company’s future. It recently postponed its first test flight and has faced bottlenecks at Vought and other suppliers.
GM seeks to cut off 38 dealers that rejected 'wind-down' offer General Motors, which has been trying to shrink a dealer network it says it has been spending more than $2 billion a year to subsidize, has asked for bankruptcy-court approval to cut off contracts with 38 dealers who refused its offer to "wind down" their businesses with GM's help. Unlike Chrysler, which trimmed its dealer network in bankruptcy court by rejecting franchise agreements, GM had sought to cut its 6,000-store network primarily through "wind-down" deals. About 4,100 have been offered revised deals and signed to continue with GM.
Judge denies motion to fast-track GM sale appeal Judge denies motions to send appeal of GM sale directly to 2nd Circuit, stay closing A bankruptcy judge late Tuesday denied a motion by a group who claim they were injured as the result of defective General Motors products to directly appeal GM's asset sale to the 2nd Circuit Court of Appeals, and skip making their case to district court. U.S. Judge Robert Gerber also denied a separate motion from a group with asbestos-related claims against the automaker to put the sale on hold pending a district court appeal. Gerber didn't detail in court why he was denying the motions, saying he would issue a written ruling later in the evening.
Automakers’ Swift Cases in Bankruptcy Shock Experts In fewer than 45 days each, General Motors and Chrysler swept through government-sponsored sales in bankruptcy court — quick tours that most people in the legal community thought impossible not long ago. The swift action has riveted bankruptcy lawyers and law professors, who say the cases will be widely studied this fall when law students return. “It is remarkable,” said James J. White, a professor at the University of Michigan Law School in Ann Arbor, who is planning a three-day seminar on the cases in his bankruptcy class.
Senate Approves Disclosing Office Expenses Online The U.S. Senate voted to start disclosing online how much lawmakers spend on travel, staff salaries, office supplies, and other official expenses. The chamber approved on a voice vote today an amendment to an appropriations bill that would require the online publishing, beginning in 2011, of biannual reports itemizing how senators use their official allowances.
Tyson Says U.S. Should Mull Second Economic Stimulus The U.S. should consider drafting a second stimulus package focusing on infrastructure projects because the $787 billion approved in February was “a bit too small,” said Laura Tyson, an outside adviser to President Barack Obama. House Majority Leader Steny Hoyer said today “we need to be open to whether or not we need additional action” on an economic stimulus. Speaking in Washington, he cautioned, though, that it is “too early” to assess whether the current stimulus plan is succeeding.
What money doesn't buy: Luxury home market stalls In the affluent village of Bronxville, N.Y., where residents of million-dollar homes have an easy half-hour commute into Manhattan, selling a house has become a whole lot harder. Larry Brocchini put his four-bedroom Colonial on the market in late May, with a price tag of $969,000. He and his wife, who want to move closer to their son's private school, have hosted open houses and showed the home by private appointment about 10 times, but they have yet to receive a bid.
U.S. Home Prices to Fall Through 2011’s First Quarter Home prices may fall in more than half of the largest U.S. cities through the first quarter of 2011 as unemployment and foreclosures rise, mortgage insurer PMI Group Inc. said. Thirty of the 50 biggest metropolitan areas have at least a 75 percent chance of lower prices through March 31, 2011, Walnut Creek, California-based PMI said in a report today. The decline is likely to spread to “all regions of the nation” from California, Florida, Nevada and Arizona, the states most affected by the housing slump, PMI said.
U.S. Food-Stamp Recipients Reached Record 33.8 Million in April A record 33.8 million people received food stamps in April, up 20 percent from a year earlier, as unemployment surged toward a 26-year high, government figures show. Spending also jumped, as the average benefit rose. It was the fifth straight month of record participation in the Supplemental Nutrition Assistance Program, according to the U.S. Department of Agriculture, and up 1.8 percent from the prior month. Total spending was $4.5 billion, up 19 percent from the previous all-time high reached in March, the USDA said.
Pickens calls off massive wind farm in Texas Plans for the world's largest wind farm in the Texas panhandle have been scrapped, energy baron T. Boone Pickens said Tuesday, and he is looking for a home for 687 giant wind turbines. Pickens has already ordered the turbines, which can stand 400 feet (122 meters) tall — taller than most 30-story buildings. "When I start receiving those turbines, I've got to ... like I said, my garage won't hold them," the legendary Texas oilman said. "They've got to go someplace."
Honduras Outraged by Obama-Chavez Alliance I continue to receive messages from Honduran citizens upset at the international media for their distorted coverage of the situation in the Central American country. The people support the ouster of Manuel “Mel” Zelaya, who is considered a puppet of Venezuelan Communist ruler Hugo Chavez. They are mystified that an American president would want to return this Chavez puppet to power in Honduras.
Nervous in North Korea North Korea remains one of the major flashpoints in the world. It combines a hair-raising mixture of conventional and (potentially) nuclear weapons, an opaque and threatening Stalinist dictatorship, and a ticklish set of issues, encompassing imprisoned American journalists, the right to intervene on the high seas, and a potential missile threat to the region as well as Alaska and Hawaii. Looming over everything is the issue of political succession in North Korea, a development that involves not just that regime, but the United States, South Korea, Japan, Russia and China.
Obama Calls for Fresh Start With Russia as Two-Day Summit Ends President Barack Obama called for a “fresh start” in relations with Russia and praised its global contributions, ending a two-day summit between the world’s two largest nuclear powers. Obama heads next to Italy, where the Group of Eight leaders of industrialized nations will discuss the global economy, climate change and opposition to Iran’s nuclear program.
Obama's speech on U.S.-Russia relations Text of President Barack Obama's speech Tuesday at the New Economic School graduation in Moscow, as provided by the White House:
China’s Hu Cuts Short G-8 Visit to Italy After Xinjiang Riots Chinese President Hu Jintao cut short his visit to Italy, where he was scheduled to attend the Group of Eight summit, after two days of ethnic violence in the westernmost province of Xinjiang left at least 156 people dead. State Councilor Dai Bingguo will attend the summit in the central Italian city of L’Aquila on Hu’s behalf, the official Xinhua News Agency reported today, adding his state visit to Portugal will be rescheduled.
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Tues 07.07.2009
US lurching towards 'debt explosion' with long-term interest rates on course to double The US economy is lurching towards crisis with long-term interest rates on course to double, crippling the country’s ability to pay its debts and potentially plunging it into another recession, according to a study by the US’s own central bank In a 2003 paper, Thomas Laubach, the US Federal Reserve’s senior economist, calculated the impact on long-term interest rates of rising fiscal deficits and soaring national debt. Applying his assumptions to the recent spike in the US fiscal deficit and national debt, long-term interests rates will double from their current 3.5pc. The impact would be devastating by making it punitively expensive to finance national borrowings and leading to what Tim Congdon, founder of Lombard Street Research, called a “debt explosion”. Mr Laubach’s study has implications for the UK, too, as public debt is soaring. A US crisis would have implications for the rest of the world, in any case.
World Bank tells G8: 2009 remains dangerous year The Group of Eight nations should not presume a global economic recovery is near, World Bank President Robert Zoellick said in a letter to G8 host Italian Prime Minister Silvio Berlusconi obtained by Reuters on Monday. The letter, dated July 1 and copied to all G8 leaders, said interventions by central banks and governments appeared to have "broken the fall in the global economy" by stabilizing financial markets and boosting demand.
Debt Burden Quickens Power Shift as G-8 Nations Lose Influence The world's most affluent nations will take decades to work off the biggest buildup in debt since World War II. The political costs may be permanent, laid bare at this week's Group of Eight summit of leading industrial powers. Bank bailouts and recession-fighting measures will explode the debt of the advanced economies to at least 114 percent of gross domestic product in 2014, more than triple the 35 percent of the main emerging economies including China, the International Monetary Fund forecasts.
China reassures on dollar before G8 China said the dollar will retain its global dominance for years to come, offering its assurances ahead of the Group of Eight summit just as it takes another step to boost the profile of its own yuan currency. Beijing has floated the idea of looking for an alternative to the dollar as global reserve currency and France and Russia on Sunday called for a debate on the matter at this week's G8 summit in Italy, expanded to include China and other developing nations.
Brown says no room for complacency on economy Prime Minister Gordon Brown will use next week's G8 meeting to urge continued action to boost the global economy, despite indications that the worst of the financial crisis has passed, government sources said. Brown will argue that rising oil prices and constrained bank lending remain threats to recovery and world leaders need to step up the fight against protectionism.
Treasury ready to twist arms over consumer agency The Treasury Department is warning the financial services industry that it will not back down from its proposal to create a new consumer protection agency, even while lobbyists build a warchest and strategy to defeat the plan. The new agency, part of a wider revamp of U.S. financial rules proposed by the Obama administration, would have the power to regulate products like mortgages and credit cards in what advocates have likened to a safety commission for financial products.
Policymakers express concern, urge banks to lend World economic leaders called on commercial banks on Monday to step up lending to revive an economy pitched into recession by failure of the global financial system. The World Bank, in a letter to Group of Eight nations due to meet this week, said interventions by central banks and governments appeared to have "broken the fall in the global economy," but 2009 remained a dangerous year.
Gold is still money when money is still not wealth Like a character that refuses to die in a bad horror movie, the U.S. job market posted some shocking June numbers. It has revived the dormant nightmare that this may be a long "L" shaped recession. Or even worse, a double-dipper, with the second dip just getting started. The U.S. Labor Department Reported that around 467,000 Americans lost their jobs in June. This was unwelcome news. The data had been getting less bad every month since January. Then the June numbers rocked up, fell out, and took stocks down with them. This is causing everyone with a pulse (and most with a brain) to have second thoughts. . . . . . . . . But there is more to wealth than money too! Peace of mind, having your assets in forms that can't be inflated away or won't suffer from debt deflation...we would count these as "wealth" at a time like this.
Gold, Little Changed, May Rise in Asia as Dollar, Oil Steady Gold, little changed in Asia, may gain from a two-week low as crude oil stemmed a decline and the dollar rally halted. Bullion fell to $920.75 an ounce yesterday, the lowest since June 23, as oil led a drop in commodities on concern the global economic recovery will falter, damping demand for the precious metal as an inflation hedge. "In the near term, gold will trade in a wide $880 to $980 range as concerns swing between inflation and deflation," Lin Haoxiang, analyst at Guotai Junan Securities, said from Shanghai today. "Gold's day-to-day moves will still be broadly influenced by the U.S. dollar."
Who will buy the I.M.F. gold and when? At last, the U.S. Congress has permitted the U.S. representative at the I.M.F. to vote to sell the 403 tonnes of gold the I.M.F. bought from Brazil and Mexico. As it is not an individual member's gold we fully expect the members of the fund to OK its sale. The legislation will permit U.S. representatives to the I.M.F. to agree to its planned sale of 13 million ounces of gold, one-eighth of the organization's holdings. As the financial state of the I.M.F. has improved [due to the credit crunch], the purpose of shoring up the I.M.F. balance sheet appears to not be the issue any more. We believe that the continuing attempts to sell the gold has, as its purpose, a final attempt to confirm that paper money is more important than gold, irrespective of what the proceeds are used for. If we are right, the sale will follow the pattern of the Central Bank Gold Agreement sales coming to an end on 26th September 2009.
Bush’s Barrick Corps drops bombshell From Gold Anti-Trust Action Committee (GATA) Barrick Gold has confessed that it and its bullion banker, JP Morgan Chase & Co., are the direct agents of the central banks in the international control of the gold price. Barrick’s confession was filed in U.S. District Court in New Orleans as part of a legal maneuver to gain dismissal of the federal anti-trust lawsuit brought against it and Morgan Chase by Blanchard & Co., the New Orleans-based coin and bullion dealer. Barrick moved to dismiss the Blanchard lawsuit on the grounds that the suit had failed to include as defendants some “indispensable parties” whose vital interests are at stake, the central banks; that the central banks, having what is called sovereign immunity against suit, simply could not be included in the suit; and that the suit therefore had to be dismissed.
China may hike gold reserves If the advice from the leading industrialists in China, gold prices will further go up soon. According to news reports, a number of industrialists told China that the country should further increase its gold reserves to diversify reserve assets. China should boost its gold reserves, said Zhang Bingnan, vice-chairman and general secretary of the China Gold Association. An increase in holdings from both government and individuals are needed. In May, China said it had increased its gold reserves by 454 tonnes to 1,054 tonnes, the first such disclosure in six years. China is the world’s fifth-biggest gold holder, following the United States, Germany, France and Italy.
Korean central bank may buy gold to diversify reserves The bank of Korea is expected to buy gold as part of a review of its foreign exchange reserves, local media reports said on Saturday, quoting an unamed official. "The bank has begun to set up a plan to manage foreign exchange reserves for next year. It has also closely watched central banks in other nations and trends in the global gold market. Given the changing global financial environment, the bank's management plan is critical," a Bank of Korea official said. Experts said the comment implies that the bank plans to buy gold soon. Korea has the world's sixth largest foreign exchange reserves but ranks 56th in terms of gold holdings.
Glut of $4.5 Trillion Will Haunt Obama's Dollar It's not a job Barack Obama signed up for, but it's his nonetheless: Bond salesman-in-chief. Such is the lot of a U.S. president overseeing an historic increase in debt issuance. Cartoonists are busily churning out depictions of Obama, who partly nationalized automakers, standing on a car lot hawking Detroit's clunkers. It's time to begin picturing Obama shilling bonds few may soon want. His best customers? Asians, of course. Asia already holds about $4.5 trillion of currency reserves, most of them denominated in U.S. dollars. It's a product of Asia's "savings glut," of which the cash-strapped U.S. remains a major beneficiary. That is, if Asians don't pull the plug.
Traders criticise gold tax increase India, the world's largest consumer of gold, could face a drop in precious metal imports after the government announced plans to double import taxes on gold and silver. Customs duty on gold bars and coins is set to double to Rs200 ($4.12) per 10 grammes as part of India's interim budget. The move prompted an angry reaction from the Bombay Bullion Association, the traders' body. "Imports were down 50 per cent in the first half, and now even the remaining demand will evaporate," said Suresh Hundia, president of the BBA.
India's gold prices set to rise Gold traders in Mumbai said prices were set to increase slightly following a move by the government to double the customs duty on the import of gold as part of its interim budget for the financial year ended March announced on Monday. The government said the customs duty on gold bars and coins would rise from Rs100 per 10 grams to Rs200 per 10 grams while the duty on silver would also double from Rs500 per kilogram to Rs1,000.
Jim Rogers Sells Dollars, Plans to Short Treasuries The dollar and U.S. Treasuries are both likely to slide as soaring government debt in the world's biggest economy undermines confidence in its assets, according to Jim Rogers, chairman of Rogers Holdings. "The government is printing lots of money and borrowing even more; that's not the basis for a sound currency," he said in a telephone interview today from Singapore. "The idea that anybody would lend money to the U.S. government for 30 years at 3 or 4 or 5 or 6 percent interest is mind-boggling to me."
The Dollar: It’s an Overhang, not a Hangover Few things are more confounding to economists and traders as forecasting currencies. However, as I have come to realize, the approach each group takes is very different. Economists are never wrong, only early; traders are often wrong, but never in doubt. Economists look at interest rate differentials, growth differentials, current account positions, and other fundamental factors. It doesn’t always help much, but it is a defensible place to start. Traders, on the other hand, cognizant or not, focus not on the fundamentals, but on the “fundamental story”. These stories typically emerge to fit recent price action and are then coupled with what economists refer to as stylized facts. Unlike facts, stylized facts are not stubborn things. Some stories turn out to be true, others false, but whether they are true or not the most powerful ones share two characteristics: they are easy to explain and intuitively appealing. And once a good story takes root it can be very difficult to dislodge it—irrespective of how untrue it may be.
FIAT MONEY IN DEATH THROES Make no mistake about it: in this credit collapse we are witnessing the death throes of irredeemable currency. In vain have governments and their client banks tried, for hundreds of years, to graft this repulsive and degenerate bastard on the living organism of society. The result was always the same: the healthy organism rejected the unnatural implant in its own good time. The present episode is no different from earlier ones except, perhaps, in the degree of the conceitedness of the perpetrators, and in their contempt for the native intelligence of man.
Charlie Rose - Pete Peterson [short and to the point on excessive debt and the economy]
Race To Zero Acceleration A Certainty Just when you think you have it figured out - bang - something changes. And present circumstances are no exception to this rule. Last week it appeared conditions were forming to sponsor a significant sell-off in stocks / equities this summer / fall, where a combination of sentiment and internals were moving into alignment in this regard. Not out of character in a mature market environment however, speculators stepped up put buying at expiry late last week, which has materially altered the sentiment backdrop, and correspondingly the prognosis for stocks moving forward. Now, what is anticipated because of this is while stocks could still soften further in coming days and weeks, instead of more substantial losses a tighter consolidation pattern should emerge, where assuming the sentiment picture continues to push in this direction, eventually a secondary reaction higher in equities should be triggered, extending the present counter trend rally within the larger secular bear market.
Securitisation reinvented to cut costs Investment banks, including Goldman Sachs and Barclays Capital, are inventing schemes to reduce the capital cost of risky assets on banks' balance sheets, in the latest sign that financial market innovation is far from dead. The schemes, which Goldman insiders refer to as "insurance" and BarCap calls "smart securitisation", use different mechanisms to achieve the same goal: cutting capital costs by up to half in some cases, at the same time as regulators are threatening to force banks to increase their capital requirements. BarCap's structures involve the pooling of assets from several clients into a secured financial product that can be sold on to other investors and rated by a credit rating agency, potentially reducing the capital allocated against the assets by between 10 per cent and 50 per cent.
Will Ken Lewis Cave To Big Labor To Save His Job? We’ve been saying for a long time that probably the most important foreshadowing of what politicized banking will look like came just a few weeks after the TARP was passed. It happened in Chicago, when protesting workers backed-up by threatening politicians got Bank of America to agree to extend loans to a failing window-manufacturer. Very clearly, banks operating on government funding would find themselves unable to resist the demands of powerful special interests. Now it looks like Bank of America may have found itself in another labor mess. This time it is even more immediate: the powerful Service Employers International Union wants Bank of America to unionize its tellers and office workers. And now it is calling on Treasury Secretary Tim Geithner to oust Ken Lewis.
How Goldman Sachs and Citi Run the Show The Wall Street White House Robert Hormats, Vice Chairman of Goldman Sachs, is to be installed as Under Secretary of Economics, Business, and Agricultural Affairs. This comes as one more, probably unnecessary reminder of the total control exercised by Wall Street over the Obama administration’s economic and financial policy. True, Hormats is “a talker rather than a decider” according to one former White House official, but he will find plenty of old friends used to making decisions, almost all of them uniformly disastrous for the U.S. and global economy.
America Is Still A Financial Train Wreck Throughout America's spending binge, which really got going in the 80s, ignoring the mounting deficit has become the standard course of action. We've never (and still haven't) paid a price for running up such a big tab. It's been all gravy so far. And as Morgan Stanley analyst Richard Berner notes (via Paul Kedrosky), that's the problem. The lack of consequences to our spending has hardened us to the belief (however much Obama or anyone else proclaims to "lose sleep" over the matter) that deficit spending can go on forever.
Harley-Davidson, Bank of America Market Debt for Fed's TALF Harley-Davidson Inc., Honda Motor Co. and Bank of America Corp. lead about $9.5 billion of debt offerings for the Federal Reserve's program to jumpstart lending, according to people familiar with the sales. Harley-Davidson plans to sell $700 million of bonds backed by loans for motorcycles and eligible for the Fed's Term Asset- Backed Securities Loan Facility, said one of the people, who declined to be identified because terms aren't set.
Microsoft Plans for Worst as U.S. Companies Show No End to Fear During the last week of May, treasurers representing America's bluest chip companies gathered at the Park Hyatt hotel in Philadelphia for a conference dubbed "Survival Skills." Instead of discussing ways to take advantage of the drop in borrowing costs to expand their businesses after the Federal Reserve cut interest rates to near zero, representatives of New York-based Colgate-Palmolive Co., International Business Machines Corp. in Armonk, New York, and dozens of other companies had other plans.
Campaign Asks Congress to 'Pledge to Read' Bills Before Voting on Them Members of Congress are being asked to pledge that they will read the bills that come before them before voting to enact them into law. "We think the American public expects their legislators to know what's in a bill before they support it and we're urging legislators to sign a pledge to that effect," Colin Hanna, president of Let Freedom Ring, told CNSNews.com. Let Freedom Ring, a conservative organization, recently kicked off a "Pledge to Read" campaign, which challenges congressmen to be loyal to their constituents before voting on the health-care reform bill.
Doc Offers Cure for GOP Republicans need Ron Paul's honesty Republican Congressman Ron Paul became a hero to many Americans last year when he ran for president against the political establishment. The 11-term Texas congressman is the most respected and admired American politician around the world after President Barack Obama. Rep. Paul is a vocal critic of what he calls reckless deficit spending, "welfare" for big finance, and America's foreign wars. Paul's voice has resonance: he sits on the powerful House Foreign Affairs Committee.
A History of Labor Unions From Colonial Times to 2009 "Those who tell you of trade-unions bent on raising wages by moral suasion alone are like people who tell you of tigers that live on oranges." ~ Henry George, 1891 Labor unions have been defined as "private combinations of workingmen" that try to increase wages and improve working conditions for members. But how? What means do labor unions use? As Henry George suggests, trade unionists are hardly known for their kindness to strangers and genteel ways. From colonial times trade unionists found the going difficult in North America. There was no prevailing ideology of "working class solidarity" and unions were far from respectable; in fact, they had a well-earned reputation for being antisocial, even criminal. Some unions were secret societies with secret oaths, and unionists engaged in intimidation, threats, vandalism and violence, especially against uncooperative workers denounced as subhuman "scabs" and "blacklegs." Private property, freedom of contract, competition, and freedom of movement among occupations (slavery and indentured servitude aside) were celebrated concepts, while government-granted monopolies and cartels were not popular at the founding of the American Republic.
Ron Paul 7/6/09 "Independence Celebration Should Include The Determination To Fight For Liberty!"
What The Bankers Know [you need to see these charts!] Two years ago, we began to note similarities to the beginnings of the Great Depression. Our thesis was built on financial history and circumstantial evidence. But now we can make a more substantial comparison with economic data. As you can see below, (from VOXEU.org) the world economy is either performing closely to or worse than the 1930s. For instance, the contraction in world industrial output is very similar. All assets go down in price when deflationary fear takes hold. This obviously occurred in 2008. But right now we are currently in the reflationary bounce which we forecast at the end of February. As we stated: "We expect an intense selling Panic in March, much like September's action. The sell-off should end with the failure of a significant institution. This temporary bottom will support a sharp bounce into the fall." While we didn't have the institutional failure at the bottom (we aren't perfect), we did get the sharp bounce. It could continue into the fall.
Obama and the Market's Carnival Ride We probably don't have to tell you that being in the stock market in 2009 has been like spending six months on Coney Island's Cyclone roller coaster-turn by turn a terrifying and exhilarating ride. In the graphic below, the blue line shows the performance of the S&P 500 since Barack Obama became president on January 20, while the red line is the average performance of that index for each presidential term going back to Dwight Eisenhower's first term in 1953.
Home foreclosures expected to surge in coming months Moratoriums from banks, government to expire, setting off new wave of default actions Just as the nation's housing market has begun showing signs of stabilizing, another wave of foreclosures is poised to strike, possibly as early as this summer, inflicting new punishment on families, communities and the still-troubled national economy. Amid rising unemployment and falling home prices, mortgage loan defaults have surged to record levels this year. Until recently, many banks have put off launching foreclosure action on many troubled properties, in part because they had signed up for the home-stability plan from President Barack Obama's administration, which required them to consider the alternative of modifying loans to make it easier for borrowers to make payments.
Economic stress up in much of nation California, Michigan and South Carolina suffered the most financial pain in May as unemployment, home foreclosures and bankruptcies rose, according to The Associated Press' monthly analysis of economic stress in more than 3,100 U.S. counties. The latest results of the AP's Economic Stress Index show the worst financial crisis since the 1930s causing lingering damage even as other signs suggest the recession is winding down. The average county's Stress score, fueled by worsening unemployment, foreclosures and bankruptcies, rose to 10 in May, from 9.7 in April.
Colin Powell On Obama's Spending
Yes, We're Still in a Recession In the words of Maxwell Smart…missed it by that much! The jobs report came in much worse than expected and forced investors to review their "green shoots" thesis and pushing down stocks by 200 points in the process. One of the more interesting points about the jobs data is in the past seven recession since WWII, this one has shown the greatest percentage loss of jobs and unless it bottoms right now, will be the longest decline in jobs, beating the '73-'74 recession. Little better news came from the manufacturing sector, where their index improved, however remained below the "sector improving" level. Finally, the weekly reports on jobless and housing remain near extreme levels. The weekly jobless data is still over 600k, an indication that jobs continue to be lost at a rapid rate. The housing data, as e have mentioned in the past, remains very low, even with near historic lows in interest rates, home purchase activity also remains near historic lows. Would you believe, were still in a recession!
Unemployment Worse with Stimulus than Without Unemployment hit 9.5 percent in June, according to the Department of Labor, putting the figure 2.5 percent higher than the White House had predicted it would be if a government stimulus spending program went into place. Moreover, the new figure is nearly one percent higher than where the White House said it would be without any stimulus spending at all. In fact, the White House never predicted that unemployment would rise above nine percent regardless of whether Congress spent the nearly $800 billion in so-called economic stimulus spending it recommended at the time.
Social Security Numbering System Vulnerable to Fraud, Experts Say The nation’s Social Security numbering system has left millions of citizens vulnerable to privacy breaches, according to researchers at Carnegie Mellon University, who for the first time have used statistical techniques to predict Social Security numbers solely from an individual’s date and location of birth. The findings, published Monday in The Proceedings of the National Academy of Sciences, are further evidence that privacy safeguards created in the era before powerful computers and ubiquitous networks are increasingly failing, setting up an “architecture of vulnerability” around personal digital information, the researchers said.
White House Won't Reveal How Much Michelle Obama's European Vacation Cost Taxpayers America may be in the midst of a deep recession, and the nation may be facing unprecedented deficit spending and debt, but the White House will not reveal the cost to taxpayers of the European vacation that first lady Michelle Obama and the president's two daughters, Malia and Sasha, took last month. Travel by an American first lady typically includes the military passenger jet that carries her and the children, Secret Service personnel to provide security, and a separate cargo plane to haul official vehicles. First Lady Michelle Obama's tour of Paris with her children included a convoy of 20 vehicles, according to news reports. She also moved by "motorcade" through London.
Energy Bill Text Says It Will Cost Americans Money; Targets Help Only to Low-Income Families The text of the "cap-and-trade" energy bill, which passed the House of Representatives late last month, contains a frank admission that all Americans will experience "loss in their purchasing power" -- meaning a rise in electricity and energy costs. The bill also lays out an Energy Refund Program to offset the higher energy costs, but only for low-income households. The American Clean Energy and Security Act of 2009 would create a scheme to force companies to purchase permits that enable them to emit a certain amount of greenhouse gases into the atmosphere.
Cap and Trade Legislation Nightmare The global banking cartels are engaged in a total hostile takeover of everything right before our eyes. They see that we are waking up at record rates and they know their rule is about to end if they don't commit to a total takeover now. It's said that the best way to expose a tyrant is to make them act like a tyrant. Well folks, the members of Congress and the people they really work for are being forced to act like the tyrants they really are and have been all along. We must take control of our government and monetary system away from them before it's too late. If we allow their the tyrannical police state they are putting in place right now to succeed, it will become exponentially that much harder to regain our Constitutional Republic. We must ACT NOW to stop them.
Cap & Trade bill
Too Precious for a Recession In a different economy, Billy Mitchell and Nicole Drucker of San Francisco might have splurged on a $10,000 engagement ring. But Ms. Drucker is out of work and they need to save for a house. So in April, Mr. Mitchell got down on one knee on the Golden Gate Bridge and proposed with a $4,000 diamond ring he had bought on the Internet. "We had to decide, where do we want the money?" Mr. Mitchell said. "On her finger?" In this economy, many consumers would rather keep their money in their wallets than on their fingers, necks or ears. As people re-examine their budgets, jewelry is turning out to be one of the easiest places to cut back - or trade down.
Feds taking GM, bigger bite of economy Broad intervention continues Capping a series of bold government actions to rescue failing corporate giants, the White House has won approval of its restructuring plan for General Motors Corp., putting the government on track to take ownership of the storied automaker by the end of the week. The takeover, which is the most extensive federal intervention into the operations of a major industrial company, follows in quick succession a government-assisted bankruptcy reorganization of Chrysler LLC, the assumption of partial ownership of two of the nation's biggest banks -- Citigroup and Bank of America -- and the seizure of mortgage giants Fannie Mae and Freddie Mac as well as insurance goliath American International Group Inc.
How the Press Helped Destroy the Auto Industry Detroit's Collapse: the Untold Story For decades East Asian competition has played a controversial role in the decline of the American car industry. Both Japan and Korea have long been accused of unfair trade and closed markets. For their part Japanese and Korean officials have argued that their markets are open and that an incompetent and heedless Detroit doesn't make the sort of cars their consumers want.
Fiat and Chinese Carmaker Form Alliance The Fiat Group announced a 50-50 joint venture on Monday with the Guangzhou Automobile Group to make cars and engines for the Chinese market, the latest move by the Italian automaker to expand outside its home market. The companies said they would build a 173-acre plant in Changsha, in Hunan Province, at a cost of more than 400 million euros, ($556 million), with production set to begin by the end of 2011. Upon completion of the first phase of development, the venture will have the capacity to make 140,000 cars and 220,000 engines a year. The companies said capacity at the plant, which will make fuel-efficient, low-emission vehicles, could eventually be increased to 250,000 cars and 300,000 engines a year.
China's elderly will overwhelm the nation The one-child rule imposed 30 years ago has created too few young people to support the quickly expanding aging population. Reporting from Shanghai -- For three decades China's one-child policy helped power this nation's economic rise. With fewer mouths to feed, families saved. Poverty fell. Living standards improved. But a social experiment that worked well in some respects is now threatening the country's hard-won gains. China's working-age population -- the engine behind its prolific growth -- will start shrinking within a few years.
Muni bonds feel US states' fiscal stress California's high-profile budget crisis and the fiscal woes of states throughout the US are taking their toll on the public finance markets, sending borrowing costs higher for states, cities, counties and other municipal issuers. The Golden State and its gaping $26bn deficit have caught the headlines, but a handful of other states have also failed to agree on balanced budgets, even after federal stimulus. Even the states that have passed budgets have been forced to make dramatic cuts such as closing schools and laying off staff to compensate for plunging tax receipts.
As California struggles, Fitch cuts debt rating California suffered a new setback in its financial crisis on Monday when Fitch Ratings cut its rating on the state's general obligation debt to just two notches above junk status. Fitch cut its rating on California's long-term bonds to "BBB," two notches above speculative grade, citing the state's budget and cash crisis. The state last week started issuing "IOU" promissory notes to pay for some bills in order to conserve cash.
Wall Street gears up to trade California IOUs Amid the vacation rentals and used cars for sale, browsers of the website Craigslist will now find a unique offer: for California IOUs. "If you are receiving a California IOU and you need cash immediately, please contact me. I may be of assistance," reads one posting. Wall Street, quick to spot an opportunity, is also gearing up to trade the payment promises. "We have a whole team working on it," said Barry Silbert, chief executive of Second?Market, a company that trades illiquid assets such as bankruptcy claims, private company stock and toxic assets.
California's Nightmare Will Kill Obamanomics Last week, we discovered that the state of California will gladly pay you Tuesday for a hamburger today. With California mired in a budget crisis, largely the result of a political impasse that makes spending cuts and tax increases impossible, Controller John Chiang said the state planned to issue $3.3 billion in IOU's in July alone. Instead of cash, those who do business with California will get slips of paper.
EPA Suppresses Climate Report
Dems To Tax Health Benefits … Unless You Join a Union Don't ask, for the moment, why Congressional Democrats need to find an extra trillion dollars to pay for a socialized medicine scheme they insist will "reduce costs." We're WAY too far into Wonderland to worry about that. As Democratic senators including Max Baucus of Montana and Ted Kennedy of Palm Beach - whoops, "Massachusetts" - struggled to make their unnecessary and vastly expensive government scheme more attractive, they quickly realized the first thing they needed to do was to make America's existing private health care plans - with which 89 percent of Americans say they're perfectly happy - LESS attractive.
Congress returns to health-care issue Congress returned Monday from its July Fourth break trying to make significant progress on health-care reform before the August recess. The Democrat-controlled House and Senate have separate plans and are attempting to hold floor votes before the break. House Majority Leader Steny Hoyer attempted this weekend to reaffirm the House's commitment to swift action. "We're going to pass significant reform before the August recess," Mr. Hoyer said on the Fox News Sunday show. The House adjourns July 31, and the Senate leaves Aug. 8. President Obama has made health care a priority in the early stages of his administration and says reforming the system is essential to the country's economic recovery and "one of the most important challenges of our time."
Co-op Health Plans Run by Consumers May Offer Obama Compromise A compromise that may take decades to work A network of health insurance plans run by the customers they serve, proposed in the U.S. Congress to offset opposition to a government-run system, may take a generation to pay off, even with $10 billion in seed money. The cooperatives would follow the model of decades-old credit unions and farming co-ops, fixtures in the home state of Senator Kent Conrad, the North Dakota Democrat who floated the idea on June 8. The proposal gained interest after Health and Human Services Secretary Kathleen Sebelius said on June 26 that President Barack Obama is "open" to the idea, though he prefers a new government-backed health plan.
It's All About the Money Obama's False Friends of Health Care Reform I'm hoping President Obama realizes that some of the folks who've been currying favor with him are not, as they claim, bringing "solutions" to the health care reform table. Most Americans -- especially those who voted for him -- want nothing to do with the kind of "reforms" they are peddling. If you watched the president's televised Q&A on ABC last Wednesday night, you probably noticed that one of the people in the audience was Ron Williams, the chairman and CEO of Aetna, Inc., the nation's third largest health insurer, and currently one of the most profitable. But there are a few things that you should know about Williams.
Caught in the middle; the sandwich generation Coping as caregiver tougher in hard times Many times during my workday, I've been jolted by a call from my mother or grandmother who needed me to track down a doctor or make a financial decision. Those calls alternate with interruptions from one of my kids who needs help with a math problem. I'm a member of the sandwich generation, the increasing population of people who are caring for older relatives in addition to their children. The recession has been particularly hard on the sandwich generation. People squeezed by pay cuts have had to stretch further to give financial help to parents. And asking the boss for time off to take mom to the doctor causes more anxiety when layoffs loom. Thinly spread, the sandwich generation is overwhelmed trying to balance it all.
Mexico's Peso, Stocks Fall as Calderon's Party Loses Election Mexico's peso and stocks fell to a two-week low after President Felipe Calderon's party lost congressional seats in midterm elections, adding to concern the government will struggle to implement tax increases that economists say are needed to narrow a budget gap. The peso weakened 0.1 percent to 13.24 per U.S. dollar at 5 p.m. New York time. It touched 13.3755, the weakest since June 23. Mexico's Bolsa, the nation's benchmark stock index, tumbled 1.3 percent to 23,742.49.
The Racism of Minister Atias Israel Calls on Ultra-Orthodox Jews to Stop "Arab Takeover" Israel’s housing minister called for strict segregation between the country’s Jewish and Arab populations last week as he unveiled plans to move large numbers of fundamentalist religious Jews to Israel’s north to prevent what he described as an “Arab takeover” of the region. Ariel Atias said he considered it a “national mission” to bring ultra-Orthodox Jews -- or Haredim, distinctive for their formal black and white clothing -- into Arab areas, and announced that he would also create the north’s first exclusively Haredi town.
Iran Warns West Against Interference Iran's supreme leader, Ayatollah Ali Khamenei, warned foreign governments on Monday that Iranians would react as a "united fist" to meddling in domestic affairs, after officials in the elite Revolutionary Guards had warned Iranians that they would be treated as enemies of the state if they did not line up behind the leadership. Speaking before a supportive audience of Basij militia members, prayer leaders and students gathered at a mosque in Tehran, Ayatollah Khamenei aimed his remarks at his home audience, seeking to heal his sharply divided nation by promoting unity in the face of what he insisted was a foreign enemy.
With Wounded Pride, Unemployed Koreans Quietly Turn to Manual Labor KUNGHANG, South Korea — With his clean white university sweatshirt and shiny cellphone, Lee Chang-shik looks the part of a manager at a condominium development company, the job that he held until last year’s financial panic — and the one he tells his friends and family he still holds. But in fact, he leads a secret life. After his company went bankrupt late last year, he recently relocated to this remote fishing village to do the highest-paying work he could find in the current market: as a hand on a crab boat.
Obama Resets Russian Ties With Arms Cuts, Afghan Deal Presidents Barack Obama and Dmitry Medvedev agreed to slash their nuclear arsenals and cooperate on military action in Afghanistan as the U.S. and Russia seek to "reset" ties at a Moscow summit. The two leaders called for a reduction of nuclear warheads by as much as a third from current limits in a Kremlin meeting. Russia also agreed to allow the transit of U.S. arms shipments to troops fighting the Taliban in Afghanistan.
Obama signals backing for Medvedev Barack Obama used an interview with a Russian opposition newspaper on the eve of Monday's US-Russia summit to back President Dmitry Medvedev's promises to boost freedom and the rule of law. His comments to the newspaper Novaya Gazeta appear to be part of a carefully calibrated move to signal support for Mr Medvedev over Vladimir Putin, the conservative Russian prime minister.
China Locks Down Restive Region After Deadly Clashes The Chinese government locked down this regional capital of 2.3 million people and other cities across its western desert region on Monday and early Tuesday, imposing curfews, cutting off cellphone and Internet services and sending armed police officers into neighborhoods after clashes erupted here on Sunday evening between Muslim Uighurs and Han Chinese. The fighting left at least 156 people dead and 852 injured, according to the state news agency.
A Bloody Crackdown in China It is now estimated that at least 156 people have been killed, more than 800 injured and some 700 arrested as the Chinese government cracks down on protesters who are demanding justification for the death of two Uighur workers in restive Xinjiang province. Here is some video footage of the protests taking place.
Gold Price Manipulation: So What? Whether or not the price of gold, as many have been arguing here and elsewhere, is being manipulated or not, interestingly enough, doesn't matter. Gold is told to be an excellent preserver of wealth, especially in rough times like these. I agree with that but I don't think the manipulation hypothesis should be given as much focus as it's been given so far, simply because there is nothing wrong with central and commercial banks occasionally pushing the price lower.
Gold may cross $1,200/ounce! Investors who are in doubt about the gold price in the coming months have some soothing words from the Chinese Gold & Silver Exchange Society. Gold prices are set to cross $1,200 per ounce in coming two years’ time, that is what the chairman of Chinese Gold & Silver Exchange Society Feng Zhijian said. Addressing a conference, Feng said the price of the precious metal may rise as the global recession and political instability in some parts of the world sustain its appeal as a haven investment.
Gold is Money and Nothing Else The title of this post is actually a quote from Mr. JP Morgan in the early 1900s during a Congressional hearing in the United States. Big league bankstas know the role of Gold in the system. Gold is the asset base upon which paper schemes and leverage are constructed. Gold is not a way to get rich, but it is savings and it is money. When paper schemes and scams collapse, he/she who holds the Gold gets to start and/or participate in the new scheme because he/she has the money! Speculating in currencies is fine if it is one's interest, but Gold speculation is simply that. There are many other inflation hedges besides Gold. But to preserve wealth in US Dollars or any other paper fiat currency is risky over the longer term.
The Patriotic and Moral Imperative for Owning Gold and Silver Remember when you learned those words? It was back when everything was simple. The Pledge of Allegiance was written in 1892 by Francis Bellamy, the circulation manager of the Boston based "The Youth's Companion" magazine. The end of the Nineteenth Century was a much simpler time. The world was a much simpler place. It is not so simple anymore. When we recite those seemingly patriotic words, what are we really pledging our allegiance to? To the flag? To the United States? To the Republic for which it stands?
Zimbabwe seeks Chinese investment in gold mines Zimbabwe, a nation with 100000 per cent inflation, is on way to reforming its main economic sources - mining sector. As part of this strategy, Zimbabwe has changed a lot of laws related to mining sector. Following this several global mining companies, who used to shy away from investing in Zimbabwe, have now started showing interest in putting their money in this nation’s gold mines. Zimbabwe, from its part, has now started inviting countries to invest in their gold mines. Recently, the government appealed to Chinese firms to invest in Zimbabwean mines, asking companies to ignore the country’s recent troubles.
So You Think Gold Fell Due To A “Strong Dollar”? Don’t Make Me Laugh Just a month ago, the Dow Jones Industrial Average was completing a bizarre run from 6,800 to 8,800, following the monster decline from 14,000 less than a year ago. Aside from the obvious “dead cat bounce” phenomenon, the market (helped, of course, by the omnipresent PPT) was aglow with dreams of “green shoots of economic recovery”, a propagandist platform created by a combination of Washington, Wall Street, and scheming media outlets such as CNBC.
Gerald Celente the disintegration of Empire America
HyperInflation or Deflation Depression Which is More Probable? The inflation / deflation debate continues to rage as deflationists see continuing collapse in the global economies under the weight of the deleveraging debt mountain as recently iterated in a 20 minute video by the worlds foremost proponents for deflation. On the other hand the more consensus view is that of hyper inflation as most recently voiced by Marc Faber, as a consequence of governments printing money to monetize debt to ignite economic recovery. Which is more probable?
Biden Says Obama Administration ‘Misread’ Economy Vice President Joe Biden said the Obama administration “misread the economy” when it forecast unemployment would peak at 8 percent if Congress enacted a $787 billion fiscal stimulus. Biden, appearing on the ABC News program “This Week,” said that in crafting its initial economic policies, the Obama administration followed consensus views of the severity of the crisis. Unemployment reached 9.5 percent last month, the Labor Department said July 2. “The truth is, there was a misread” of how bad the economy was earlier this year, Biden said.
This Economy Is Getting Uglier This week things got a lot uglier with Thursday's employment report along with other news in the financial world that we'll discuss in a moment. For our part, our positions on the "short" side of the market performed well with unrealized gains of +2.0% in our interest rate position, +1.2% and +3.3% in our two inverse index positions and 0% in our currency position. We continue in the "Red Flag" mode as we expect lower prices ahead and those expectations were bolstered by this week's news and market activity.
Biden's Just Setting Up The Second Stimulus So did Joe Biden just pull another "Biden" with his line this morning about "misreading" how bad the economy was? Some folks in the White House may chalk it up to "Joe being Joe," but make no mistake, the administration is laying the groundwork for the second stimulus. We predicted on Thursday, after the weak jobs report, that the second stimulus was no definitely on its way. The very next day, Paul Krugman, a reliable thermometer for establishment thinking, chimed in and said we must do a second, bigger stimulus.
Current Recession Is a Severe Credit Bust of Depression-Era Magnitude There's a big difference between inventory-driven recessions and credit-driven recessions. An inventory recession is caused by a mismatch between supply and demand. It's the result of overcapacity and under-utilization which can only work itself out over time as inventories are pared back and demand builds. Credit-driven recessions are a different story altogether. They typically last twice as long as and can precipitate financial crises. The current recession is a severe credit bust of Depression-era magnitude.
Were in the Middle of a Crash 1/2 - Nassim Taleb
Inflationary Crack-up Boom has Commenced in the G7 Economies! There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved. --Ludwig von Mises Make no mistake, we are in the latter category (total catastrophe) throughout the G7, unfolding over the next four years or less, but many opportunities are presented during these periods as these booms create Mal-Investments, MISPRICED ASSETS AND MARKETS OF ALL STRIPES; some will zoom higher and others lower. In the G7, Mal-Investments have been piling up for almost three decades as credit was turned into an entitlement and as easy money (money below the rate of inflation) became a policy of G7 central banks and banking systems. Combine this with tax, spending and entitlement policies created by public servants, mandates, overregulation and misstated inflation numbers – which generated excess demand in many UN-ECONOMIC sectors – and many of these economies have been converted into asset-backed economies. Now as the debt pyramids collapse, so do the industries, businesses, state, local and federal government programs which were supported by them.
Summary of Inflation and Deflation in the United States Since 1800, the U.S. has had more years of inflation than deflation, 92 versus 53. The record for the two precious metals is remarkably similar. Both lost purchasing power in every inflation in the United States until the last period mentioned, 1951 to 1979, where silver out-performed gold. What adds interest to this similarity is that silver was effectively demonetized in 1834, whereas the gold standard prevailed a century longer. It is true that the U.S. Congress was fiddling with the silver market from 1807 through 1920, but the effect was to put a floor under the silver price, with the gold price being strictly set. And from 1933 until 1975, U.S. citizens could not buy gold.
Administration plans for end of ‘too big to fail’ Megabanks may be slimmed down, told to prepare plans for own demise They are the biggest of the big — the Citigroups, the Goldman Sachses, the AIGs and other financial behemoths. The Obama administration doesn't want so many around anymore. Financial regulations proposed by the president would result in leaner and simpler institutions that don't carry the weight of the system on their marble columns. Around Washington and Wall Street they have come to be known as TBTF — too big to fail. It's not just size, though. These companies are so far-flung, so intertwined and so precariously leveraged that a single one's collapse can create systemwide tremors that imperil the finances of millions of Americans.
Achilles' Heel BIG PICTURE – The much anticipated economic recovery is now fully discounted by the financial markets. Most strategists and economists seem to agree that the US economy is stabilising and will start to revive towards the end of the year. Interestingly, the ‘great depression’ hyperbole doing the rounds last autumn has now been replaced by the ‘green shoots’ hype. It seems as though everyone is spotting some kind of ‘green shoots’ somewhere in the economy. If one didn’t know any better, after reading the latest headlines in the media, one could easily get the impression that perhaps the geniuses in the financial community have now become experts in horticulture!
A Political-economic Oligarchy has Taken Over the United States of America CNN interviewed a person recently who was seriously burned when his vehicle burst into flames because a plastic brake-fluid reservoir ruptured. Having sued Chrysler, he was now concerned that its bankruptcy filing would enable Chrysler to avoid paying any damages. A CNN legal expert called this highly likely, since the main goal of reorganization in bankruptcy is preserving the company’s viability and that those creditors who could contribute most to attaining that goal would be compensated first while those involved in civil suits against the company would be placed lowest on the creditor list since compensating them would lessen the chances of the company’s surviving. This rational clearly implies that the preservation of companies is more important than the preservation of people. Of course, similar cases have been reported before. The claims of workers for unpaid wages have often been dismissed as have their contracts for benefits.
Green Shoots of Economic Recovery and Other Bernanke Lies In the first televised interview by any Federal Reserve Board Chairman in two decades, Bernanke on March 15, 2009 appeared on 60 Minutes. Asked if he's seeing any progress, Bernanke said, "I think all of our efforts, so far, have produced results. We're buying about $500 billion in mortgages, in package and securities by the G.S.E.s, Fannie Mae and Freddie Mac. And that seems to have brought down mortgage rates significantly. It allows people to refinance. To get out of high rate mortgages. We are seeing progress in the money market mutual funds, and in the business lending area. And I think as those green shoots begin to appear in different markets and as some confidence begins to come back that will begin the positive dynamic that brings our economy back.
Were in the Middle of a Crash 2/2
India Joins Russia, China in Questioning U.S. Dollar Dominance Suresh Tendulkar, an economic adviser to Indian Prime Minister Manmohan Singh, said he is urging the government to diversify its $264.6 billion foreign-exchange reserves and hold fewer dollars. “The major part of Indian reserves are in dollars -- that is something that’s a problem for us,” Tendulkar, chairman of the Prime Minister’s Economic Advisory Council, said in an interview today in Aix-en-Provence, France, where he was attending an economic conference. Singh is preparing to join leaders from the Group of Eight industrialized nations -- the U.S., Japan, Germany, Britain, France, Italy, Canada and Russia -- at a summit in Italy next week which is due to tackle the global economy. China and Brazil will also send representative to the G-8 summit.
Dollar's Days of Dominance Are Over While it may not constitute the final “nail in the coffin”, India commemorated the 4th of July by joining China and Russia in announcing they were seeking “alternatives” to the U.S. dollar (as “reserve currency”). With yet one more “prop” removed from the gangrenous greenback, this left only the submissive Japanese as the last major holder of U.S. dollars who strongly supports its continued status. Bloomberg reported Saturday that the economic advisor to Indian Prime Minister Manmohan Singh has publicly and explicitly recommended that India reduce the U.S. dollar component of its currency reserves. “The major part of India reserves [totaling $264 billion] is in U.S. dollars – that is something that's a problem for us,” said Suresh Tendulkar.
Obama heads to Moscow for "reset" summit President Barack Obama heads to Moscow on Sunday promising a far-reaching effort to "reset" U.S.-Russia relations that hit a post-Cold War low under the Bush administration. Obama is expected to clinch summit deals on the outlines of a new nuclear arms pact and improved cooperation in the Afghan war effort, but deep divisions will remain over U.S. missile defense, NATO expansion and the 2008 Russia-Georgia war.
Trichet Sees Risk Big Nations Won’t Coordinate Economic Policy European Central Bank President Jean- Claude Trichet said he’s concerned that a lack of coordination of economic policy around the world will allow the imbalances that led to the financial crisis to persist. “There is a very big danger that major countries internalize their problems,” Trichet said at an economic conference in Aix en Provence, France, today. “If we return to a picture of internal and external deficits that led to this crisis, we’ll have the recipe for a new crisis.”
Recession may get worse, Gordon Brown warns world leaders The worst of the recession may be yet to come and world leaders are in danger of hampering the recovery, Gordon Brown will say today. As he begins a week of meetings with world leaders, the Prime Minister will strike an unexpectedly gloomy note about the prospects of an upturn and will demand that fellow heads of government “sound a second-wake up call for the world economy”. Soaring oil prices, rising 75 per cent this year, protectionist measures contributing to a 10 per cent drop in trade and the failure of banks to start lending again could all put the recovery at risk, according to Downing Street.
Dollar discomfort thrust onstage for Italy summit World leaders are bound to express the hope that the worst of the global economic crisis is passing when they meet this week, but they are now under pressure, too, to manage a Chinese challenge to dollar supremacy. Beijing, which has floated the idea of an alternative to the dollar as world reserve currency, wants the matter -- sensitive in financial markets wary of risks to U.S. asset values -- broached at a July 8-10 summit in Italy, officials say.
Dollar status unlikely to be in G8 communique: G8 source The dollar's status as the top global reserve currency is unlikely to be mentioned explicitly in the final communique at next week's Group of Eight summit, a European G8 source involved in preparations for the meeting said on Friday. "It is expected to be mentioned and discussed remotely. But the discussions have not yet reached the level of putting it in writing in the communiques," the source, who asked not to be identified, told Reuters.
Treasury’s Distressed Debt Plan Said to Begin With $20 Billion The U.S. Treasury Department may begin its program to spur purchases of mortgage-backed securities from banks with about $20 billion in public and private money, down from as much as $100 billion when it was announced in March, two people familiar with the matter said. The Treasury plans provide about $1.1 billion in capital to eight to 10 money managers it will pick for the Public-Private Investment Program, according to the people, who asked not to be identified before the details are announced. The firms will raise about $1.1 billion each for funds to buy distressed mortgage securities, less than they had expected the government to support. The plan also will include about $10 billion in government-backed loans.
For Banks, Wads of Cash and Loads of Trouble H. Averett Walker used hot money to turn Security Bank from a sleepy Southern lender into a regional powerhouse. Darrell D. Pittard used hot money to jump-start his brand-new MagnetBank, allowing it to lend hundreds of millions of dollars even though it did not have a single drive-up window or even a customer with a checking account. It is a formula being replicated at banks across the United States. Rather than simply wooing local customers, they have turned to out-of-state brokers who deliver billions of dollars in bulk deposits, widely known as “hot money,” from investors nationwide. In fast-growing regions like this one in central Georgia, the money produced record bank profits and financed whole new communities, built at a phenomenal rate.
Bailouts for Everyone, But Who's Going to Rescue Uncle Sam? Fourth of July weekend is a time for celebration and relaxation, but also reflection on the critical juncture our nation faces. The U.S. has been on an "unsustainable cycle of buying and spending" that cuts across all strata of society, says TJ Marta, chief strategist at MartaontheMarkets.com. The problem is that with everyone having a hand out -- from illegal immigrants to Wall Street to state and local governments -- the Federal government has now extended itself to the limits of its ability, and perhaps beyond.
Zero Money Down, Not Subprime, Led To Foreclosure Crisis The most important article you can read this weekend is economist Stan Leibowitz's analysis of loan level data on 30 million mortgages. His conclusion is straight-forward: the most important driver of foreclosures is homeowner equity. This means that the loans most likely to default are high loan to value, low-down payment loans. Equally arresting is the list of things we've come to associate with the boom that make very little difference on foreclosures. Subprime lending--nope. Teaser rates--not the problem. Liar loans--just move along. Predatory loans--sorry, kids. It's the low down payments.
Mortgage Loan Losses Nearly 65% For Alt-A It's not just delinquencies, defaults and foreclosures that have blown apart any models for mortgage lending. So are the loan loss severity numbers. Gretchen Morgenson at the NY Times writes about the work of Alan M. White, an assistant professor at the Valparaiso University law school in Indiana. White analyzed data on 3.5 million subprime and alt-A mortgages in securitization pools overseen by Wells Fargo and found the average loss was 64.7 percent of the original loan balance.
Securing a Jumbo: No Small Task EVEN as the federal government works to help loosen consumer credit, one home loan product is becoming more expensive and difficult to obtain: the nonconforming “jumbo” mortgage. These mortgages exceed the conventional “conforming” loan limit of $729,750 set by Fannie Mae and Freddie Mac, the government-owned companies. Interest rates on jumbo mortgages have typically been higher than rates on conforming loans, in large part because they are considered riskier without a guarantee that Fannie Mae and Freddie Mac will buy them.
So Many Foreclosures, So Little Logic LAST week, the stock market tumbled on news that housing foreclosures and delinquencies rose again in the first quarter. The Office of the Comptroller of the Currency said that among the 34 million loans it tracks, foreclosures in progress rose 22 percent, to 844,389. That figure was 73 percent higher than in the same period last year. But the comptroller’s office also said that amid the gloom, there was promising data about loan modifications: they rose 55 percent in the quarter. That growth came on a very low base, of course, but the move encouraged John C. Dugan, head of the comptroller’s office.
Virtual Currency In China Is A $2 Billion Economy The Chinese government is a little worried about how much virtual cash is being traded in the country, The New York Times reports. In fact some virtual currency, like the QQ coin, is actually affecting the market for the renmibi, China's actual currency. Much of the $2 billion in virtual currency is used to play games, but significant chunks, David Barboza writes, are now being traded for real physical goods, like clothes, food and services. The shift of using virtual currency to pay for real products is part of what's freaking out the Chinese central bank.
Japan backs dollar as reserve currency China has asked for a new currency to replace the dollar as the world's reserve, but Japan says major countries should stick with the greenback. Major countries should support the dollar as the key international currency, although emerging nations may discuss a new global reserve currency on the sidelines of the G8 summit next week, a Japanese official said on Friday. China has asked for debate on a new global reserve currency when leaders from the Group of Eight (G8) meet with the G5 emerging economies next week in Italy, G8 sources told Reuters. News of the Chinese request pushed the dollar down to a three-week low on Wednesday.
Here Comes The Second Stimulus! Today's disappointing jobs number is certain to trigger a serious push for a second stimulus bill. The talk was already happening. Earlier this week, John Judis at The New Republic argued that one was needed. Also this week, Obama responded to a question about a possible second stimulus by saying it was "too soon" to know whether one would be needed, suggesting that it's certainly on the table. Of course, House Speaker Nancy Pelosi was in favor of a second stimulus before the ink even dried on the first one, so it shouldn't be much of a stretch to get it through the Congress, especially with the Democrats newly-solidified supermajority in the Senate (welcome Sen. Franken!). And now we've heard it at least 10 times this morning on CNBC. The market is looking for its hit. Prediction: We'll get it by the end of the year.
Cap and traitors Selling out has a bipartisan flair Conservative activists are angry at eight Republican members of the House of Representatives for voting in favor of the American Clean Energy and Security Act (ACES), which passed the House June 26. They are right to be angry, but their outrage is misplaced. With the exception of New Jersey's Rep. Christopher H. Smith, these so-called RINOs (Republicans in name only) represent districts that voted for President Obama after he campaigned on a promise to fight global warming at any cost. As such, they were only following the misguided will of their constituents.
Americans Under Squeeze: Higher Credit Card Rates, Taxes Have "Devastating" Effect Citigroup this week joined Bank of America and JPMorgan in sharply raising fees on credit cards for late payments, balance transfers and the like. The banks appear to be trying to raise rates before new consumer-protection rules go into effect. They're also putting the squeeze on the same U.S. consumers whose taxes pay for the industry's ongoing bailouts. TJ Marta, chief strategist at MartaontheMarkets.com, sympathizes with the outrage but says there's more going on than just a craven effort by big corporations to take advantage of their clients.
Bankruptcies low in states that don't seize wages States that prohibit debt collectors from seizing wages have lower bankruptcy rates than peers States that allow debt collectors to seize consumers' wages have sharply higher bankruptcy rates than neighboring states that prohibit or strictly limit the practice, an Associated Press analysis has found. This link highlights a dilemma for credit-card companies and other debt chasers: By going after wages -- an increasingly popular maneuver since the recession began, lawyers say -- they risk pushing consumers into bankruptcy court, where judges can reduce or wipe away all sorts of financial obligations.
As retailers cut back cities confront 'ghostboxes' Communities confront 'ghostbox' buildings when big-box retailers leave Hundreds of anxious shoppers watched as city officials used power saws to cut 2-by-4s during Home Depot Inc.'s ribbon-cutting ceremony for its 102,700-square-foot building center in Bismarck. Less than three years later, the home improvement retailer shuttered the underperforming store, leaving a big orange empty eyesore on the outskirts of town. The building, sitting derelict and silent on acres of asphalt, is now listed for sale at $10.5 million. But there's been little interest in the near windowless warehouse-like building that occupies a lot the size of a dozen football fields. For potential tenants "it's a hard pitch because for most uses it seems to be a bit of a tough fit," said Brian Ritter, business development director of the Bismarck-Mandan Development Association.
U.S. home prices seen down over 40 percent U.S. housing prices will fall by a double-digit percentage from already beaten-down levels, resulting in an overall 40 percent plunge by the time foreclosures peak in the second half of 2010, Barclays Capital economist Michelle Meyer said. Meyer issued her forecast two days after the Standard & Poor's/Case-Shiller Home Price Indexes showed for April an 18.1 percent year-to-year decline, compared with 18.7 percent in March, in the rate of home price declines in 20 major U.S. metropolitan areas. The indexes have tracked the prices of U.S. single-family homes since 1987.
The unemployment timebomb is quietly ticking One dog has yet to bark in this long winding crisis. Beyond riots in Athens and a Baltic bust-up, we have not seen evidence of bitter political protest as the slump eats away at the legitimacy of governing elites in North America, Europe, and Japan. It may just be a matter of time. One of my odd experiences covering the US in the early 1990s was visiting militia groups that sprang up in Texas, Idaho, and Ohio in the aftermath of recession. These were mostly blue-collar workers, – early victims of global "labour arbitrage" – angry enough with Washington to spend weekends in fatigues with M16 rifles. Most backed protest candidate Ross Perot, who won 19pc of the presidential vote in 1992 with talk of shutting trade with Mexico.
Earnings Drop Worldwide as Job Losses Hurt Consumers Earnings at such companies as Ford Motor Co. and ArcelorMittal may continue to decline in the next three months as the highest unemployment in a quarter-century keeps consumers from spending. The year-over-year profit slide for Standard & Poor’s 500 Index members may narrow to 21 percent from July through September, after declines of an estimated 34 percent in the second quarter and about 60 percent in the year’s first three months, according to data compiled by S&P and Bloomberg. Earnings may rise by year-end based on comparisons to late 2008, which was roiled by the meltdown in financial markets.
U.S. Job Cuts in June Deeper Than Forecast, Paychecks Strained Employers in the U.S. cut more jobs than forecast in June and the unemployment rate rose to the highest in almost 26 years, limiting wages and threatening to erode the consumer spending essential to an economic recovery. Payrolls declined by 467,000 and followed a 322,000 drop in May, according to Labor Department figures released yesterday in Washington. The jobless rate rose to 9.5 percent, the highest since August 1983. Earnings per hour climbed at a 0.7 percent annual pace on average over the last three months, the smallest gain since records began in 1964.
Kennedy Plan Calls for Government Health Program, Employer Fees Senator Edward Kennedy’s health committee released a new health-care overhaul plan that lawmakers said would lead to coverage for most Americans, in part by assessing fees on companies that don’t offer insurance. The plan includes a government-run insurance program as an alternative to private coverage, and would cost about $400 billion less than an earlier proposal.
The Battle Of Health Care
Health care: Will 'pay or play' chase employers away? The latest proposal out of the Senate is estimated to keep the employer-sponsored insurance system in tact. But one skeptic has serious doubts. It is one of the touchiest issues in the health care debate: Would a government-run health plan upend the employer-based health insurance system used by 160 million Americans? Senate Democrats behind a key proposal released Thursday say the answer is no. Sens. Edward Kennedy, D-Mass., and Chris Dodd, D-Conn., say their plan would preserve employer-sponsored insurance coverage and create an affordable public option for those who need it.
Biden: U.S. won't stand in Israel's way on Iran Vice President Joseph R. Biden Jr. seemed to give Israel a green light for military action to eliminate Iran's nuclear threat, saying the United States "cannot dictate to another sovereign nation what they can and cannot do." Israel considers Iran its most dangerous adversary and is wary of hard-line Iranian President Mahmoud Ahmadinejad, who just won a disputed re-election. He repeatedly has called for Israel to be wiped off the map and contends the Holocaust is a "myth."
Iran clerics declare election invalid and condemn crackdown Iran’s biggest group of clerics has declared President Mahmoud Ahmadinejad’s re-election to be illegitimate and condemned the subsequent crackdown. The statement by the Association of Researchers and Teachers of Qom is an act of defiance against the Supreme Leader, Ayatollah Ali Khamenei, who has made clear he will tolerate no further challenges to Mr Ahmadinejad’s “victory” over Mir Hossein Mousavi.
Ousted Honduran president seeks to return after OAS move Ousted Honduran President Manuel Zelaya prepared to fly back home on Sunday, setting the stage for a possible confrontation as the interim government that has defied international pressure said it would not let him enter the country. Honduras' interim government, slapped with suspension from the Organization of American States over its refusal to reinstate Zelaya, said it would refuse Zelaya permission to land.
U.S. misread scale of Honduran rift Zelaya's ties to Venezuela's Chávez was source of concern for opponents Although the U.S. government knew for months that Honduras was on the brink of political chaos, officials say they underestimated how fearful the Honduran elite and the military were of ousted President Manuel Zelaya and his ally President Hugo Chávez of Venezuela. Rumors were buzzing in the capital that the fight between Zelaya and his conservative opponents had reached the boiling point, but diplomatic officials said the Obama administration and its embassy were surprised when Honduran soldiers burst into the presidential palace last Sunday and removed Zelaya from power.
Kuwait Wants Oil Prices to Stay Above $60 a Barrel Kuwait, the sixth-biggest OPEC producer, wants to see oil prices stay above $60 a barrel and will watch the market closely before deciding on its output at OPEC’s meeting in September, the country’s oil minister said. “We’d like to see the price not go below a certain level, at least to meet our budgetary target,” Sheikh Ahmed al-Abdullah al-Sabah told reporters today in Kuwait City. That certain level for Kuwait is $60 a barrel, he said.
North Korea Test-Fires Seven Missiles, Drawing Condemnation North Korea test fired seven short- range missiles, two days after launching four rockets, spurring condemnations from the U.S., South Korea and Japan. The launches took place between 8 a.m. and 5:40 p.m. today, from Kitdaeryong in Kangwon province, the South’s Joint Chiefs of Staff said in statements. “South Korea’s military is fully prepared to deal with any threats and provocations by the North, based on a strong joint defense alliance with the U.S.,” the statements added.
China urges calm after North Korea strikes CHINA has urged calm after North Korea test-fired seven missiles off its east coast in an act of defiance apparently timed for the US Independence Day holiday. "China ... hopes that all sides will maintain calm and restraint, and jointly safeguard peace and stability in the region," foreign ministry spokesman Qin Gang said. The launch of the ballistic missiles -- which the North is banned from firing under UN resolutions -- yesterday further fuelled tensions after the reclusive state conducted a nuclear test in May. On Thursday the North test-fired four short-range missiles with a range of 120km into the Sea of Japan. The US, Britain, France, Japan and Australia have condemned the latest launches, which come after a series of bellicose moves by North Korea this year.
PTG will be CLOSED Friday, July 3rd Happy 4th of July, America!
National Anthem USA
A Visitor from the Past
James Cagney / Mickey & Judy - Yankee doodle boy
Our Declaration of Independence Excerpts from July 4, 1776 We hold these Truths to be self-evident, that all Men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the Pursuit of Happiness. - That to secure these Rights, Governments are instituted among Men, deriving their just Powers from the Consent of the Governed, - That whenever any Form of Government becomes destructive of these Ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its Foundation on such Principles and organizing its Powers in such Form, as to them shall seem most likely to effect their Safety and Happiness.
Time for a tea party A drive to restore fiscal sanity and true division of powers Americans citizens have had enough already. The course the nation's government has taken over the past few decades has slowly slid away from the U.S. Constitution and the rule of law. The executive, legislative and judicial branches are running roughshod over the American people. It was only a matter of time before the American spirit rose up to fight against the rogue federal government; the T.E.A. (Taxed Enough Already) movement grew out of that vital American spirit. Conservatives were troubled when the Democrats took the majority in Congress and President Obama won the White House. We feared the worst with the executive and legislative branches suddenly free of checks and balances. But we truly could not have anticipated the speed with which Mr. Obama, House Speaker Nancy Pelosi, Senate Majority Leader Harry Reid and the rest of the gang in Congress have shredded the Constitution, forced federal programs upon the states and wreaked havoc on an already crippled economy.
N. Korea fires missiles; launch toward U.S. feared North Korea fired a barrage of short-range missiles off its east coast in a possible prelude to the launch of a long-range missile toward Hawaii over the U.S. Independence Day holiday. Firing a ballistic missile on the July Fourth celebration would be a challenge to Washington, which has been rallying international support for enforcement of U.N. sanctions imposed against Pyongyang following a May 25 nuclear test. North Korea is banned from testing ballistic missiles under U.N. resolutions. Japan's Chief Cabinet Secretary Takeo Kawamura said Thursday that a long-range missile launch this weekend was possible. "We cannot rule out the possibility," he said, citing Pyongyang's past behavior.
North Korea Test-Fires 4 Short-Range Missiles North Korea test-fired four short-range missiles into the sea that lies between it and Japan on Thursday, amid simmering tensions over the latest international sanctions against the Communist state, according to news reports and a spokesman for the South Korean government. North Korea fired two missiles from a base near Wonsan, a major city on the North's east coast, at 5:20 p.m. and at 6 p.m. local time, said a spokesman at the South Korean Defense Ministry who spoke on condition of anonymity because a formal announcement had not been made yet. Later Thursday, the North fired another short-range missile, the spokesman said. The South Korean news agency Yonhap reported that a fourth short-range missile was also fired.
Preserve Your Wealth With Precious Metals "I'm not so much interested in the return on my money as I am the return of my capital." -Will Rogers In this extraordinary environment, preserving your personal wealth becomes priority one. Before you make another major financial decision, it is imperative to understand the big picture by recognizing and understanding three critical issues. First, we are in a secular bear market for financial assets (stocks and bonds). Second, the consequences of the global bailouts will likely be highly inflationary. Third, we are at a pivotal point in the long-term investment cycle. Let's examine each of these three keys in more detail.
Next Stop for Gold Is $2,100 Not $1,300 Practically everyone in the gold community has mentioned the inverse head and shoulders pattern on the gold chart and the corresponding $1,300 target. The target is correct but the interpretation of the pattern is not entirely correct. That target comes from the pattern being a reversal pattern but in the current case of Gold it is not a reversal pattern. There is no downtrend it is reversing from. However, the pattern can actually function as a continuation pattern as John Murphy explains in his book, Technical Analysis of the Financial Markets:
Gerald Celente Gold at $2000 and The Dollar will become worthless
China's Zeng Urges More Supervision of Reserve-Currency Nations Former Chinese Vice Premier Zeng Peiyan urged today more supervision of nations issuing global reserve currencies, including oversight of fiscal and current- account deficits. He said there would be no dramatic change to the international currency system in the short term, so "your currency is likely to become my problem."
IMF Softens Language on Labeling Currencies Before China Report The International Monetary Fund is softening the language used to characterize exchange rates ahead of the lender's first report in three years on China's economy. The 186-nation fund won't use the phrase "fundamental misalignment" in describing currencies, and spokeswoman Caroline Atkinson told reporters yesterday that the new policy will promote better cooperation with member states. The IMF's board next week is scheduled to discuss its assessment of China, known as Article IV consultations, and then issue recommendations for the first time since 2006.
Platinum Futures Fall as Unemployment Gains; Palladium Declines Platinum fell as the U.S. jobless rate rose and employment fell more than forecast last month, signaling demand for the metal from key users, such as automakers, may take longer to recover. Palladium also declined. Employers cut 467,000 jobs in June, according to a U.S. Labor Department statement. The drop exceeded forecasts and pushed the number of unemployed workers to 14.7 million, the government said. The jobless rate rose to 9.5 percent from 9.4 percent in May, the department said in Washington.
Seven banks fail, pushing 2009 tally to 52 Regulators close six Illinois banks and one Texas bank setting the FDIC back a total of $314.3 million. Seven banks were shut down by authorities Thursday, pushing the tally of failed banks for 2009 to 52, more than doubling the failures in 2008. Six regional banks in Illinois and one in Texas closed their doors, according to the Federal Deposit Insurance Corporation. Twelve banks in Illinois have failed this year. Thursday's failure in Texas was the first for the state in 2009. Last year, 25 banks failed in the United States.
7 more banks fail as FDIC mulls rules for sales 7 more banks fail as FDIC seeks stronger rules for buyers of failed banks Six Illinois banks and one bank in Texas were shuttered Thursday as government regulators proposed new rules for private equity firms seeking to take over failed banks. That brought the number of U.S. bank failures this year to 52. That's more than double the 25 which failed in all of 2008 and the three closed in 2007. The Federal Deposit Insurance Corp. was appointed receiver of all seven. The total cost to the Deposit Insurance Fund from the seven closings will be $314.3 million, the FDIC said. The assets of most of the failed banks will be turned over to other institutions.
"We're in the middle of a Crash!"Nassim Taleb, author of "The Black Swan" "So if I'm going to forecast something, it is that it's going to get worse, not better."
China Takes A Big Step Forward in Monetary Policy This news was largely overlooked by the worse than expected US payrolls report, which dampened hopes of a quick economic recovery, a sentiment encouraged by some but certainly not realistic to anyone looking closely at the numbers. I think that little propaganda sound byte served primarily to apply some primer for the end of quarter paint job in US equities. Despite its strength today as stocks fall and the boys cash in after their most recent pump operation, the dollar is going to be taken down a peg, so to speak. It is a long term trend that is still well in place despite this bear market rally.
U.S. Gets Tough on Funds Trying to Buy Failed Banks Federal bank regulators toughened policies on Thursday that have allowed private equity firms to buy up failing banks, saying they were worried if such investors would have enough capital and the willingness to run the banks in a "prudent manner." The surprisingly tough rules came as a blow to high-rolling private equity firms, which control vast amounts of capital and have been pushing for greater ability to buy up failed banks at bargain prices from the government. The Federal Deposit Insurance Corporation adopted tentative rules that would require banks owned by private equity firms to have three times as much capital as ordinary banks.
Peter Schiff answering your Riddit questions pt 1/2
FDIC's tough terms for buyers of failed banks Proposed guidelines require private equity firms to hold bank purchases for 3 years and maintain capital levels. Private equity groups would have to meet strong capital requirements and pledge to maintain long-term investments before being allowed to buy failed banks, under controversial guidelines proposed by the Federal Deposit Insurance Corp Thursday. The bank regulators who serve on the board of the FDIC openly clashed about the proposals, with some officials arguing the guidelines go too far and could scare away needed capital for troubled banks.
The Inflation Deflation Debate Wages On The pendulum swings, day to day from fear of deflation and the collapse of asset prices to fear of inflation, hyperinflation, and the collapse of the U.S. Dollar. What is it deflation or inflation? The question is complicated and cannot be answered with an either or. The first thing to do when discussing such a complex issue is to define inflation and deflation. Most, including some renowned economists, mistakenly define inflation as rising prices and deflation as falling prices. The most accurate description I have seen of inflation and deflation comes from Robert Prechter.
Why stagflation is coming That certain aroma means it's baked in the cake Both the money supply and federal spending have increased at breathtaking rates over the past year, unprecedented in peacetime. The policy decisions made by the Federal Reserve Board and Congress virtually assure we will enter a period of 1970s-like stagflation. The recovery, when it comes, will combine slow economic growth, unusually long un- and underemployment, stagnating real incomes, rising interest rates and inflation. There is little that policymakers, having made colossal mistakes, can do to prevent such an outcome. However, there are steps that can be taken to shorten the period of stagflation and return to an era of robust economic growth, good jobs and stable asset and consumer prices.
What's in Store for US: Japan of the 90's or Argentina of 2002? The inflation / deflation debate in the US is still alive and well. In deflation camp, there is the rising star du-jour Nouriel Roubini and old timer Robert Prechter. They argue the debt collapse would cause price deflation and depress world economies for years to come. The inflation camp includes Jim Rogers and Marc Faber, who said on May 27 2009 that "I am 100 percent sure that the U.S. will go into hyperinflation "
In the Future, Interest Rates Will Soar and Consumers Will be Sore Too At the present, governments around the globe are printing money as if there were no tomorrow in order to try and prevent debt-laden banks from going under and trying to stimulate the fractional reserve banking system. The past 20 years of economic growth has been based on a "Pay it Forward" basis…someone gets a new couch or car and ends up paying for it over a defined period of time. The expansion of credit in turn allowed for false consumption because most people never really had the money in hand.
S.E.C. May Reinstate Rules for Short-Selling Stocks They have been reviled as the bad hats of Wall Street, nefarious traders who cashed in on the market collapse and, some insist, helped precipitate it. Now short-sellers, the market skeptics who correctly called last year's downturn, are coming under even more unwanted scrutiny, this time from federal regulators. The Securities and Exchange Commission appears poised to reverse itself and reinstate rules that would make shorting stocks - that is, betting their prices will decline - somewhat more difficult. Whether the S.E.C. will go far enough to satisfy the many critics of short-sellers is far from certain. The controversial role of these investors has divided not only the financial industry, but also federal regulators. As the S.E.C. considers its options, the debate is heating up.
Dollar's future in US hands Since 2008, I have been widely recognized on the Internet as the person who changed China's policy regarding the US dollar by advocating since 2002 that Chinese exports should be denominated in yuan. Chinese readers doing a Google search on my Chinese name will find numerous posts to that effect. The issue is not whether Asian central banks will continue to have confidence in the dollar, but why Asian central banks should see their mandate as supporting the continuous expansion of the dollar economy through dollar hegemony at the expense of their own non-dollar economies. Why should Asian economies send real wealth in the form of goods to the US for foreign paper of declining value instead of selling their goods in their own economy?
Peter Schiff answering your Riddit questions pt 2/2
'Rogue broker' blamed for oil spike The startling spike in oil prices to their highest level this year on Tuesday was caused by a rogue broker who placed a massive bet in the Brent oil market, triggering almost $10m (€7m) of losses for his company. PVM Oil Associates, the world's largest over-the-counter oil brokerage, said on Thursday it had been the "victim of unauthorised trading". The privately owned company said that as a result of the unauthorised trades it had been forced to close substantial volumes of futures contracts at a loss.
Canada's Dollar Drops Most in Two Weeks as Data Damp Risk Trade Canada's currency fell the most in almost two weeks after a report showed U.S. employers cut more jobs than forecast in June, lowering prospects for the country's economic recovery and damping investors' appetite for risk. "The U.S. dollar is gaining on a risk-aversion trend," said Jack Spitz, managing director of foreign exchange at National Bank of Canada in Toronto, the nation's sixth-largest lender. "All currencies are losing, except the U.S. dollar and the yen, which are historic beneficiaries of risk-aversion trades. Canada gets wrapped up in the fray."
Ruble Bonds Beat Dollar Sales as Currency Stabilizes Russian companies shut out of the international debt markets are selling more ruble bonds than dollar notes for the first time since 2006 as the domestic currency recovers from its 35 percent devaluation. OAO Russian Railways, the railroad monopoly, and X5 Retail Group NV, the largest food-store operator, led 261.6 billion rubles ($8.4 billion) of bond sales this year, according to data compiled by Bloomberg. That's more than double the combined value of the two dollar issues, by state-owned gas exporter OAO Gazprom and farming lender Russian Agricultural Bank.
Russia flits from Tehran to Washington Russians often express their displeasure with a country in a peculiar way. When the problem with Georgia flared in 2008 over the separatist republic of South Ossetia, Russian authorities suddenly discovered a serious problem with Georgian cognac and mineral water. Now, as Russia-Belarus tension grows, problems have been found with milk from Belarus. The Kremlin can also express its mood in other ways beyond food and drink, as it is doing with the Bushehr nuclear plant it has been building in Iran since 1995. Russia is well aware of the importance of the plant, both for Iran, which needs the nuclear energy, and the United States, which views it as another step in the direction of Tehran's alleged nuclear weapons program.
Treasury Said to Start Distressed Debt Program With $20 Billion The Obama administration may start its program to spur purchases of mortgage-backed securities from banks with about $20 billion in public and private money, down from as much as $100 billion when the effort was announced in March, according to two people familiar with the matter. The Treasury Department is set to provide about $1.1 billion in capital to eight to 10 money managers it will select for its Public-Private Investment Program, said the people, who asked not to be identified before the details are announced. Each firm will raise about $1.1 billion for funds to buy distressed mortgage securities, less than they had expected the government to support. The plan also will include about $10 billion in government-backed loans.
Is Still More Stimulus Needed? It hasn't been a good week for Wall Street's 'green shoots' analogy. This week's economic reports looked more like crop-killer than fertilizer, certainly not providing much support for the current popular wisdom that consumers will soon be spending us out of the recession. I have said from the beginning that consumer spending will not pick up to any degree until consumers are no longer seeing the value of their homes plunging; are no longer seeing neighbors lose their homes to foreclosure; begin to see 'For Sales' signs thinning out as homes begin selling; and no longer have fear of losing their jobs. Only then might they stop saving and paying down debt out of concern, and begin spending again to a degree that will have the recession bottoming.
Senate's Warner Concerned Obama Agency May be 'Gotcha' Enforcer U.S. Senator Mark Warner expressed concern that President Barack Obama's proposed Consumer Financial Protection Agency, centerpiece of a rules overhaul, is "divorced" from markets and would be a "gotcha" enforcer. "Is this going to be some kind of poor cousin, located across town, that will always be struggling to have the resources, personnel and expertise?" Warner, a Democrat on the Senate Banking Committee, said yesterday in an interview with Bloomberg News.
Lou Dobbs: States revolt against REAL I.D.
Cap-and-trade is a job killer Support for Obama's agenda is on the skids President Obama's domestic agenda is losing steam in an increasingly contentious Democratic Congress amid growing public doubts about the veracity of raising taxes in a deep recession. The economy remains sick. The stimulus plan isn't working. Investment capital, the lifeblood of a vigorous economy, is still on strike. Over 40 House Democrats voted against his energy tax bill, which barely passed by a seven-vote margin and now faces huge obstacles in the Senate. His health care plan is on shaky ground. His promise not to tax middle-class workers is in shreds, and massive deficits are piling up as fears mount that the economy may face months if not years of anemic growth.
Senate May Pass U.S. Climate Bill, Reject Treaty, Kerry Says The U.S. Senate may pass legislation to slow climate change and then fail to approve a global treaty that commits nations to do so, Senator John Kerry said. Kerry, chairman of the Foreign Relations Committee, will be a leader in Senate efforts to place the first domestic curbs on greenhouse gases, after the House approved a measure last week. Even if a Senate bill passes, there may not be enough support to ratify an international accord incorporating the U.S. commitments, the Massachusetts Democrat said in an interview.
US Signs Up For A Global Climate Pact For The First Time The U.S. is ready to join the rest of the world in a climate pact for the first time in history, Bloomberg reports. The U.S. is joining other developed countries for the first time in saying global greenhouse gases should peak by 2020 and the average worldwide temperature shouldn't rise more than 2 degrees Celsius, according to a draft document of the Group of Eight industrialized nations. "This is a crucial year for taking rapid and effective global action to combat climate change," according to the text, not yet final, that is being negotiated by government officials ahead of next week's G-8 summit in L'Aquila, Italy. The draft was circulated by nongovernmental organizations.
Emissions Must Peak by 2020, U.S. Says in Group of Eight Draft The U.S. is joining other developed countries for the first time in saying global greenhouse gases should peak by 2020 and the average worldwide temperature shouldn't rise more than 2 degrees Celsius, according to a draft document of the Group of Eight industrialized nations. "This is a crucial year for taking rapid and effective global action to combat climate change," according to the text, not yet final, that is being negotiated by government officials ahead of next week's G-8 summit in L'Aquila, Italy. The draft was circulated by nongovernmental organizations.
Small business lending falls sharply In its first full quarter since the Recovery Act kicked in, the SBA still backed 30% fewer small business loans than it did a year ago. Despite emergency stimulus measures, small business lending continues to fall. In the just-ended quarter, the Small Business Administration's flagship program backed 30% fewer loans than it did a year ago, and 55% fewer loans than it did in 2007, before the recession set in. The numbers bear out the grim reports from business owners who say that credit is dangerously scarce for small firms. The SBA's 7(a) program approved 11,580 loans in the quarter ended June 30, valued at $2.5 billion. That's down from 16,490 loans, worth $3.4 billion, in the same quarter last year.
Bank Fees Rise as Lenders Try to Offset Losses Bounced check: $32. Stop-payment: $30. A.T.M. charge: as high as $3. Even now, after all those bailouts, banks never seem to tire of dipping a little deeper into your wallet. Despite the tough economic times and increased scrutiny from Washington, they are keeping most fees at record highs, and are eking out slight increases on others like overdraft charges - a step they rarely took during past recessions. The result? Americans are paying more to save and spend their money.
Factories contract for 17th month Construction spending declines again in May Manufacturing activity declined for the 17th consecutive month in June, but the rate of contraction in the factory sector continues to be slower compared with the steep downturns during the fall and winter. Meanwhile, total construction spending fell again in May, indicating that the eventual recovery will not likely get a boost from the homebuiding sector before the end of the year. The manufacturing index, compiled by the Institute for Supply Management (ISM) in Tempe, Ariz., increased by 2 points to 44.8 in June. Index levels below 50 reflect a shrinking factory sector; levels above 50 indicate an expanding sector.
Drumbeat of Defaults Gets Louder Unemployment isn’t the only bearish economic indicator that just ticked higher. Defaults in speculative-grade debt rose sharply in June, as this asset class lived up to its nickname of “junk” and once-mighty companies like General Motors landed in bankruptcy court. Standard and Poor’s, the credit ratings agency, said in a report Thursday that speculative-grade debt defaults in the United States hit 9.2 percent last month, up from 8.1 percent in May, in what S.& P. said was a new year-to-date high. G.M., the apparel chain Eddie Bauer and hotelier Fontainebleau Las Vegas Holdings were among the 18 United States companies that defaulted on their debt in June, bringing the total number of defaults this year to 119. Lear, the auto parts giant, also defaulted last month, and it said Wednesday it was filing for Chapter 11 protection.
Obama Calls Jobs Losses 'Sobering,' Urges Innovation President Barack Obama praised innovative energy companies for creating jobs on a day of "sobering news" that employers shed 467,000 jobs in the U.S. in June. "It took years for us to get into this mess, and it's going to take us more than a few months to turn it around," Obama said in a Rose Garden appearance after meeting with energy business leaders. "These are folks whose companies are helping to lead the transformation towards a clean-energy future," Obama said. "Energy is one of the pillars" of a new foundation for the U.S. economy, he said.
U.S. Economy: Job Cuts in June Deeper Than Forecast Employers in the U.S. cut more jobs than forecast in June and the unemployment rate rose to the highest in almost 26 years, offering scant evidence the Obama administration's stimulus package is putting Americans back to work. Payrolls declined by 467,000 last month following a 322,000 drop in May, according to Labor Department figures released today in Washington. The jobless rate rose to 9.5 percent, the highest since August 1983, from 9.4 percent.
Job market takes turn for worse Employers cut more jobs than expected in June and unemployment rate climbed for the ninth straight month, hitting 9.5%. The battered U.S. labor market took a step backwards last month as employers trimmed more jobs from their payrolls in June, according to a government report Thursday. There was a net loss of 467,000 jobs in June, compared with a revised loss of 322,000 jobs in May. This was the first time in four months that the number of jobs lost rose from the prior month. The June job losses were also far worse than the forecast of a loss of 365,000 jobs by economists surveyed by Briefing.com.
Jobless data sends stocks reeling; Dow loses 223 Stocks tumble as US unemployment rate reaches 26-year high; Dow has worst day since April The stock market found little to celebrate heading into the long holiday weekend. Major stock indexes fell more than 2.6 percent Thursday, pushing the Dow Jones industrials to their lowest level in six weeks, after the government said the unemployment rate hit a 26-year high and employers cut far more jobs than expected. The data was especially disappointing since it broke a trend of four straight months of improvement in job losses. The report -- one of the most closely watched gauges of the economy's health -- delivered the latest blow to the market's already waning confidence.
Older job seekers struggling with age barrier Turning to social networks, removing dates from resumes, and Botox Like many unemployed older workers, 64-year old Allan Kellum fears his age has made it harder to find a new job. At a recent job fair, Kellum expressed interest in a supervisory role coordinating an international health assistance program. A recruiter set him straight: "The people applying for that are young." So now Kellum, who lives in McLean, Va., takes no chances. He's deleted his college graduation date from his resume and reduced the number of years it covers. He's hoping that will help move his resume past any screeners who would be put off by his age.
Ex-executive accuses insurance giant of 'purging' customers Wendell Potter says he is finished defending the insurance industry, which he says is "beholden to Wall Street." At a hearing last week before the Senate Commerce Committee, the former vice president of corporate communications at the insurance giant Cigna testified, "I know from personal experience that members of Congress and the public have good reason to question the honesty and trustworthiness of the insurance industry." The committee's chairman, Jay Rockefeller, D-West Virginia, told Potter, "You are better than Russell Crowe on 'The Insider,' " referring to the award-winning 1999 film about cigarette company executive Jeffrey Wigand, who blew the whistle on the tobacco industry's practices.
Health care: Will 'pay or play' chase employers away? The latest proposal out of the Senate is estimated to keep the employer-sponsored insurance system in tact. But one skeptic has serious doubts. It is one of the touchiest issues in the health care debate: Would a government-run health plan upend the employer-based health insurance system used by 160 million Americans? Senate Democrats behind a key proposal released Thursday say the answer is no. Sens. Edward Kennedy, D-Mass., and Chris Dodd, D-Conn., say their plan would preserve employer-sponsored insurance coverage and create an affordable public option for those who need it.
Health care reform: What small business wants Insurance costs are killing small firms -- but many entrepreneurs are ideologically opposed to government-backed health coverage. As Congress prepares to do battle over health reform, a parallel dispute is shaping up among small-business groups that are staking out opposing positions on a key element of reform proposals: whether Uncle Sam will take on a bigger role in offering insurance coverage or leave the field to the private market. The so-called "public option," backed by President Obama and many Congressional Democrats, would set up a government-backed health insurance plan that would compete with private plans. Though details remain fuzzy, the proposal already has critics on both sides of the aisle decrying "government-run health care." The American Medical Association and private insurers oppose any public option.
Confused U.S. Has Lots to Say About Health Care Introducing President Obama at yesterday's online town hall discussion, senior adviser Valerie Jarrett encouraged viewers to go to the White House's official site on Facebook.com, telling them: "As health-care reform moves through Congress, it's very important to President Obama that we take the time to engage the American people." Well, Mr. President, consider them engaged -- but perhaps not exactly in the way Jarrett intended.
Construction spending falls more than expected Construction spending fell more than expected in May, a sign the problems facing the nation's builders are far from over. The Commerce Department said today that construction spending dropped 0.9% in May, nearly double the 0.5% decline that economists expected. Adding to the signs of weakness, activity in the past two months was revised lower. Construction rose 0.6% in April, down from the 0.8% increase originally reported. A March increase of 0.4% was replaced with a decline of the same amount. That left the April gain as the only increase in the past eight months.
Obama's One-World, America-Last Government 'm not much for conspiracies. I'm not a black helicopter guy. I don't believe that a shadowy military-industrial complex controls the government. I don't think the North American Free Trade Agreement was cover to merge Canada, Mexico, and the United States. In fact, I like NAFTA. I think all the hubbub about President Barack Obama's birth certificate is hooey. I'm sure Lee Harvey Oswald shot JFK. So, believe me when I say there is nothing conspiratorial about Obama's obvious desire to be seen as a world leader by every ideological bloc spanning the globe.
Obama stands with tyrants Honduras is part of a pattern Dictators and demagogues can rest easy on President Obama's watch. When thousands of Iranians flooded the streets of Tehran protesting a rigged election and were beaten and shot down by pro-regime thugs, the president bided his time before making a series of noncommittal statements. He seemed to hope it would all just go away. However, when a socialist demagogue was ejected unceremoniously from Honduras on Sunday by his own government for trying to establish a presidency for life, Mr. Obama instantly sprang to his defense. What happened in Honduras was not a military coup. Honduras has a civilian president, Roberto Micheletti, a member of former President Manuel Zelaya's own Liberal Party, who was elevated to the post after Mr. Zelaya was removed. The army did not seize power, but acted as the elected government's instrument in ousting Mr. Zelaya, who was well on his way to subverting the Honduran constitution and erecting a dictatorship.
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Thurs 07.02.2009
Hyperinflation Special Report "How has the hyperinflation outlook changed since the Hyperinflation Special Report was published in April 2008?" Such is the most frequently asked question I receive these days. The answer is that the outlook is little changed, since the following report outlines the basic issues and limited options for the U.S. government that were in play well before the current crises broke. The actions taken since by the federal government, U.S. Treasury and the Federal Reserve, in response to the still-deepening recession and ongoing systemic solvency woes, just exacerbated the long-range problems described in the report. The official actions likely have advanced the timing of the hyperinflation to the much nearer future, perhaps within the next year or two. Since September 2008, the Federal Reserve has been attempting to debase the U.S. dollar at an extraordinary pace, and such now is recognized widely among the major U.S. trading partners.
Inflationary Recession Is in Place [PDF] Banking Solvency Crisis Has Opened First Phase of Monetary Inflation Hyperinflationary Depression Remains Likely As Early As 2010
The U.S. economy is in an intensifying inflationary recession that eventually will evolve into a hyperinflationary great depression. Hyperinflation could be experienced as early as 2010, if not before, and likely no more than a decade down the road. The U.S. government and Federal Reserve already have committed the system to this course through the easy politics of a bottomless pocketbook, the servicing of big-moneyed special interests, and gross mismanagement. The U.S. has no way of avoiding a financial Armageddon. Bankrupt sovereign states most commonly use the currency printing press as a solution to not having enough money to cover their obligations. The alternative would be for the U.S. to renege on its existing debt and obligations, a solution for modern sovereign states rarely seen outside of governments overthrown in revolution, and a solution with no happier ending than simply printing the needed money. With the creation of massive amounts of new fiat (not backed by gold) dollars will come the eventual complete collapse of the value of the U.S. dollar and related dollar-denominated paper assets.
$78.8 Trillion; United States Debt Obligations exceed world GDP; Monetary Collapse Looming? (from February 16, 2009 interview)
Fair Treatment for Precious Metals Investors Act S.1367: Fair Treatment for Precious Metals Investors Act Summary: Seeks to amend the Internal Revenue Code of 1986 to treat gold, silver, platinum, and palladium investments in the same manner as stock and mutual fund investments for the purposes of the capital gains tax rates imposed. The bill seeks to amend the Internal Revenue Code in order to attain fair treatment for precious metals investors as compared to stock and mutual fund investors. Under the current tax law, investments in precious metals are treated as "collectibles gains" which are subject to a tax rate of 28%. By contrast, investments in stocks and mutual funds are currently subject to a tax rate of 15% if the assets are held for more than one year.
Gold - It's Just Time To borrow a phrase from a recent piece by Martin Armstrong, "it's just time" for Gold to shine and revert to its role as money. Of course, the powers that be and their minions laugh in contempt at such a concept. Wall Street laughs at the investment that has no growth potential and pays no dividends. And yet, these are the people who didn't see this economic crisis coming and now declare that it is over! It may be over for them, since they have lined their pockets with taxpayer funds to mitigate their losses, but for the rest of us, the pain is just beginning. Economic depressions are a process, not a one-time event.
Gold rallies above $940, dollar drops on China news Gold climbed above $940 an ounce on Wednesday, as news that China has asked to debate proposals for a new global reserve currency sent the dollar reeling, highlighting the status of gold as a hedge against a falling U.S. currency. Investors have recently viewed the dollar as a safe haven. In early June, a resurgent greenback had foiled gold's attempt to break above the $1,000-an-ounce level.
US Dollar will default in 2009 1/3 Gold, the reserve currency . . . Will the US Dollar collapse under the weight of debt in 2009? Bob Moriarty from 321gold.com thinks so. M/C Michael Levy Panelists: Louis James, David Morgan, Jon Nadler, Robert Moriarty
US Dollar will Default in 2009 2/3
US Dollar will Default in 2009 3/3
Gold Rises, Halting Two-Day Drop, as Weak Dollar Boosts Demand Gold gained the most in a week, halting a two-day slide, as a weaker dollar boosted the metal's appeal as an alternative investment. The dollar fell as much as 1.1 percent against the euro as a report from Automatic Data Processing Inc.'s Employer Services unit showed U.S. companies cut 473,000 jobs last month, more than forecast. Gold typically rises when the dollar falls because some investors buy the precious metal to protect value when the world's reserve currency weakens.
Gold's Leading Authority Expects Gold to Break Price Record Don't own gold yet? Don't worry... Because even at $940 an ounce, gold prices are still positioned to surge by three... four... or even five times! In fact, if gold prices perform even half as well as they did during the bull market of the 1970s, the yellow metal will explode to over $2,500 in a matter of months. The world's top gold consultant agrees... GFMS Ltd. (formerly known as Gold Fields Mineral Services) recently echoed Gold World's longstanding rationale for higher gold prices and predicted a new price record within the next few weeks.
IMF gold sale to dampen bullion market The Gold Report recently caught up with newsletter writer and analyst Lawrence Roulston of Resource Opportunities, who's been travelling to learn more about the state of mining worldwide. In this exclusive interview, Roulston provides his thoughts on the outlook for the economy and what factors impact gold and other metal markets. "As the Western world gets back on track," says Roulston, "commodity prices will continue higher."
Gold is not bullish but don't count it out yet The demand for gold is potent, indicated by strong buying pressure. This is being brought on because of weakness in the U.S. dollar. Additionally, when analyzing the SPDR Gold Trust (GLD), the relative strength index and stochastic indicators both suggest that higher prices are likely to occur. GLD is up 5.4% year-to-date and is trading above its 200-day moving average. Trading volume doesn't indicate that gold is necessarily bullish, however, it doesn't confirm that gold isn't bullish, either. In other words, don't count it out yet.
pt 1/4 Georgre Soros Interview
Buying On Spec Through its rhetoric and actions, the Obama Administration has made it clear that no matter the current or future costs, the federal government will not allow a collapse of the banking system. The resulting aura of certitude has, in turn, encouraged investors to roll the dice one more time. Some of these investors are likely trying to make good prior investment losses through speculative trading in U.S. equities. The surety of the government guarantee has sadly allowed them to overlook the fact that U.S. corporate earnings continue to fall. So, as is the case with all government guarantees, the risks our economy faces are now disproportionate to the opportunities. Haven't we been down this road before?
Goldman Sachs The Fourth Branch of the U.S. Government Quietly and almost unnoticed by most Americans, the US Federal Government introduced a fourth branch to its political structure in 2006. As you know we already had three branches, they are:
The Judicial: the Supreme Court
The Executive: the President
The Legislative: Congress
This pretty much has us covered in terms of political strategy... but what about financial issues? Everyone knows Congress has no clue how to allocate capital. And the Executive Branch doesn't exactly have a great track record when it comes to financial matters either (we've run a deficit virtually every year since 1970).
The Great American Bubble Machine From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression - and they're about to do it again The first thing you need to know about Goldman Sachs is that it's everywhere. The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money. In fact, the history of the recent financial crisis, which doubles as a history of the rapid decline and fall of the suddenly swindled-dry American empire, reads like a Who's Who of Goldman Sachs graduates.
How Obama Blew His Credibility On The Economy Six months into the Obama presidency and the New York Times is already running an autopsy analyzing how he could have been so wrong about the economy. David Leonhardt's bottom line? The administration was deluded by hope. We doubt it. We suspect Obama, Summers, Geithner & Co. just decided that they had to issue rose-colored projections about the unemployment rate and recovery or they would never have a hope in hell of ramming such huge spending increases through. And if the forecasts proved optimistic? Well, by then, maybe everyone would have forgotten. They haven't.
A Forecast With Hope Built In In the weeks just before President Obama took office, his economic advisers made a mistake. They got a little carried away with hope. To make the case for a big stimulus package, they released their economic forecast for the next few years. Without the stimulus, they saw the unemployment rate - then 7.2 percent - rising above 8 percent in 2009 and peaking at 9 percent next year. With the stimulus, the advisers said, unemployment would probably peak at 8 percent late this year.
Mr. Sunshine? Ron Paul Wins Support to Audit Fed Reserve All of a sudden, Congress is paying close attention to Ron Paul. The feisty congressman from Texas, whose insurgent "Ron Paul Revolution" presidential campaign rankled Republican leaders last year, now has the GOP House leadership on his side - backing a measure that generated paltry support when he first introduced it 26 years ago. Paul, as of Tuesday, has won 245 co-sponsors to a bill that would require a full-fledged audit of the Federal Reserve by the end of 2010.
The Great Bank Robbery: How the Federal Reserve is destroying America As global leaders struggle to rescue their nations from economic breakdown, the legitimacy of the dollar as the world's reserve currency is under attack. Perhaps the problem lies with the Fed. A large part of the "super" in the American superpower is based on the modern creed of liberal democracy, which serves as the motor of free-market capitalism. And the lubricant that keeps this colossal machine humming at full speed 24/7 is the US dollar. So before we risk any conjectures on the future prospects of America's versatile banknote, which presently serves as the 'world's reserve currency,' perhaps we should know more about who controls it.
Obamageddon - 2012 Empire America is on the verge of collapse. Its social, economic and political systems are failed and failing. The measures taken by successive governments to save the politically corrupt, morally bankrupt, physically decrepit giant from collapse have served to only hasten its demise. While the decline has been decades in the making, the acceleration of ruinous policies under the current Administration is leading the United States - and much of the world - to the point of no return.
pt 2/4 Georgre Soros Interview
Walls to Block US Deflation Many are the obstructions to the so-called (mislabeled) deflation threat within the USEconomy. To begin with, falling asset prices does not constitute deflation. One of the primary objectives of the banking elite in firm control of the USGovt and USCongress is to confuse the public and investment community on the entire topic of inflation, what it is, how it is measured, and its risks. The same goes for deflation. All debate as to whether the Untied States will suffer from inflation or deflation is a horrible misdirected distraction that manifests the confusion. The US will suffer both higher monetary inflation and worse economic deterioration, not one or the other, but BOTH, and with steadily increasing intensity.
U.S. stimulus a small patch for big economic hole The $787 billion U.S. economic stimulus package may not be able to live up to lofty expectations, painting President Barack Obama into a policy corner once the money runs out. With only a little under 7 percent of the stimulus actually paid out so far, it is a bit early to try to measure success. However, the White House is already fielding questions about whether another spending package will be needed. One of Obama's top advisers said on Sunday that the current stimulus plan is "adequate to the task.
Shredding Your Safety Nets Modern man believes in government-funded safety nets. He thinks that other taxpayers can and should be taxed to bail out those taxpayers who make bad economic decisions, so long as those taxpayers being bailed out are people like themselves. They don't want bailouts for bankers, and they don't want bailouts for people who got into no-money-down mortgages to buy in neighborhoods "above their station."
The Myth of 2016 The ever-increasing share of Americans who keep working after age 55 will buy Uncle Sam some more time to solve the Social Security crisis. In May, the media flashed the latest grim news on Social Security: Its trustees had concluded that the money pouring out of the system will start exceeding the tax dollars flowing in by 2016, a year earlier than previously forecast. Unreported, however, was a curious fact: The calculations effectively deny the existence of a longtime trend that probably will delay the arrival of Social Security's doomsday. That trend is Americans' growing propensity to work beyond traditional retirement age. In doing this, the agency could be making a $200 billion mistake in its assessment of Social Security revenue over the next 10 years. That sum is the likely unanticipated income from payroll taxes levied on older workers who remain on the job, based on the projections of demographer Peter Francese, who has had an excellent record predicting such trends.
U.S. Economy: Manufacturing Shrank Least Since August Manufacturing in the U.S. shrank at the slowest pace since August 2008 and pending sales of existing homes advanced for a fourth month, underscoring signs the economy began to stabilize in the second quarter. The Institute for Supply Management's factory index rose in June for a sixth straight month, to 44.8; readings less than 50 signal contraction. The National Association of Realtors said the number of Americans signing contracts for existing homes increased 0.1 percent in May after a 7.1 percent gain.
Positioning for When Water Runs Out: Part I If current trends continue, there is no doubt that there will be wars fought in the 21st century over water. Not oil. Not ideology. Not theology. Water. Survival. It takes somewhere between the three pounds of grain the National Cattlemen's Beef Association estimates and the sixteen pounds some environmentalists and vegetarians claim to produce a pound of beef. I believe the truth lies closer to the cattlemen's numbers - all the ranchers I know, and I know plenty, graze their cattle where they consume vast quantities of weeds and natural grasses. What business person wants to buy grain, adding to their cost of doing business?
pt 3/4 Georgre Soros Interview
Lear to File Bankruptcy After Lenders Agree to Terms Lear Corp., the world's second- largest maker of automotive seats, is planning to file for Chapter 11 bankruptcy after reaching an agreement with representatives of secured lenders and bondholders. Lear is seeking support from other bondholders and lenders and plans to "commence shortly" with a restructuring under court protection, the Southfield, Michigan-based supplier said in a statement today. The company said it has commitment for $500 million in financing for the bankruptcy and exit from a syndicate led by JPMorgan Chase & Co. and Citigroup Inc.
Hotel Loan Defaults Double as Recession Cuts Travel As many as one in five U.S. hotel loans may default through 2010 as the recession means companies are spending less on travel and perks, according to University of California economist Kenneth Rosen. The value of hotel properties in default or foreclosure almost doubled to $17.3 billion in the second quarter through June 24 from $9 billion at the end of the first quarter, data compiled by Real Capital Analytics Inc. show. The New York-based research firm, which began tracking distressed commercial property in November, expects hotel defaults to increase by as much as $2 billion this quarter, said analyst Jessica Ruderman.
Small businesses vital to economic recovery go bankrupt Entrepreneurship and new small businesses are supposed to lead us out of the recession, just as they have in prior downturns, right? Sure. Your neighbor's grand idea will persuade a bank to lend her start-up money; she'll open for business in six weeks; and money will immediately flow from customers to her to her employees. Taxes will be paid, and the national economic engine will hum effortlessly in no time. If only.
Business owners cut to the bone Recent surveys indicate that business owners are still sacrificing staff, benefits, and personal savings to keep their doors open. To stay open. That's the goal of business owners across the country as they continue to lay off employees, cut benefits and pull back on retirement contributions. These cost-cutting strategies are likely to stay in place for months to come, according to several recent reports. On the employment front, the numbers remain grim: In the past month, small businesses with fewer than 50 workers shed 177,000 employees, according to a report released Wednesday by payroll processor ADP (ADP, Fortune 500). That's an improvement, but not much to celebrate. By contrast, mid-sized businesses cut 205,000 jobs and large businesses, those with more than 500 employees, lost 91,000 positions.
US private sector sheds 473,000 jobs US companies cut nearly a half million jobs last month as the recession continued to cut into the labour market in spite of other recent signs of hope in the economy. Private companies cut 473,000 jobs from their payrolls in June, according to a survey by ADP employer services on Wednesday. The figure was slightly lower than the revised 485,000 jobs slashed in May, but was worse than economists expected and raised fears that the unemployment rate would continue to climb.
pt 4/4 Georgre Soros Interview
California Misses Deadline to Avoid Issuing Need IOUs California is poised to issue more than $3 billion in IOUs to pay some bills after lawmakers failed to reach an agreement to close a $24 billion budget deficit facing the most-populous U.S. state. Last-minute negotiations between Governor Arnold Schwarzenegger, fellow Republicans, and Democrats who control the Legislature failed to produce a compromise before the state's fiscal year began at midnight. Without budget revisions to account for a recession-driven 20 percent drop in revenue, California doesn't have enough money to meet its debts and will issue IOUs beginning tomorrow, Controller John Chiang said.
California, Illinois Fail to Meet Budget Deadline Seven U.S. states from California to Connecticut began the fiscal year today without spending plans in place as they battle over tax increases and other measures to balance budgets amid declining revenue. Democratic Illinois Governor Pat Quinn refused to sign a budget after lawmakers failed to approve raising the income tax, said his spokeswoman Ashley Cross. Connecticut is at an impasse after Republican Governor Jodi Rell rejected a tax increase passed by the Democrat-led Legislature.
California declares fiscal emergency over budget California Gov. Arnold Schwarzenegger declared a fiscal emergency on Wednesday, forcing lawmakers to tackle a budget gap that has raised the prospect of drastic measures to keep the state working. Lawmakers debated late into the night Tuesday but could not agree on a plan to balance California's budget -- now showing a deficit of $26.3 billion -- in time for the new fiscal year, which began on Wednesday.
Tax hikes and budget woes: States crunched States are still struggling to balance their budgets as fiscal year 2010 starts. New tax hikes and spending cuts take effect. And California is running low on cash. It's not a happy new year for the states. States are carrying their financial woes into the new fiscal year, which for most started on Wednesday. Some had yet to pass their fiscal 2010 budgets. For others, tax hikes and draconian spending cuts went into effect. Governors and legislators spent fiscal 2009 wrestling to balance budgets as tax revenues plummeted amid the weakening economy. Many were forced to slash funding for social services, education and public safety, as well as raise sales levies, income taxes and other fees.
Why taxes will need to go up Health reform can reduce the deficit, but not nearly enough to address the country's debt problem. Higher taxes and spending cuts will be needed. The promise of health reform is to make care more accessible for everybody -- and to reduce the federal deficit by slowing the growth rate in costs. But the promise of deficit reduction through health reform might be overstated. Here's why: Even if reform works well, the cost savings will not be nearly enough to tackle the debt ogre breathing down Uncle Sam's neck.
Where the economy is going... from March 11, 2008
Obama enters decisive phase of presidency Healthcare reform will be a critical test Barack Obama is gearing up for the most decisive phase of his presidency when the fate of his core legislative proposals will show whether he is capable of taming Washington or whether Washington will tame him. Critics and supporters see Mr Obama's attempts to push his flagship healthcare reform through Congress this month as a critical test of the president's pledge to take on Washington's most powerful lobby groups.
Kennedy Seeks Public Health-Care Plan That Finances Itself Senator Edward M. Kennedy's committee will propose creating a government-backed alternative to private insurance designed to pay for itself after getting federal start-up money. A summary of the provision written by the Massachusetts Democrat's Health, Education, Labor and Pensions Committee describes a public insurance plan that could be quickly available around the U.S. with payment rates set by the Health and Human Services Department. The summary was provided by a person close to the committee.
Helen Thomas: Not Even Nixon Tried to Control the Media Like Obama Following a testy exchange during today's briefing with White House Press Secretary Robert Gibbs, veteran White House correspondent Helen Thomas told CNSNews.com that not even Richard Nixon tried to control the press the way President Obama is trying to control the press. "Nixon didn't try to do that," Thomas said. "They couldn't control (the media). They didn't try. "What the hell do they think we are, puppets?" Thomas said. "They're supposed to stay out of our business. They are our public servants. We pay them."
Delinquencies On Prime Mortgages DOUBLE! Delinquency rates on prime mortgages, the least risky category, more than doubled in the first quarter from a year earlier, according to statistics released yesterday by the government.
Prime mortgages 60 days or more past due climbed to 2.9 percent of such loans through March 31. At the same point last year, 60 day delinquencies were just 1.1 percent of all prime loans.
Two thirds of all mortgages in the US are prime mortgages, so any percentage increase in delinquencies represents a huge absolute number of delinquent mortgages.
So here are the absolute numbers: 661,914 prime mortgages were at least 60 days delinquent in the first quarter, a jump from 250,986 a year earlier.
Insured Mortgage Defaults Resume Upward Climb Defaults on privately insured U.S. mortgages rose in May following three months of declines, and the number brought up to date fell, providing new evidence that the nation's housing market is still deteriorating. The Mortgage Insurance Companies of America, a trade group, said 87,904 insured borrowers were at least 60 days late on payments in May, up 8 percent from April and up 29 percent from a year earlier. Late payments often foreshadow foreclosure.
David Walker: Who Will Bailout the Budget? (December 04, 2008)
The Growth Of Prime Mortgage Delinquencies Is Actually Slowing Despite government attempts to aid home owners in trouble with mortgages, the share of mortgages that are seriously delinquent-with payments over due by 60 days or more-is still growing. Serious delinquencies grew by nearly 9%, and now stands at 5% of all mortgages. The good news is this represents a dramatic slowdown in the growth of serious delinquencies. In the fourth quarter of 2008, serious delinquencies jumped from 3.54 to 4.60, a 30% increase from the previous quarter.
Mortgage applications fall to 7-month low Mortgage applications plunged to a seven-month low last week as demand for home refinancing loans tumbled 30%, data from an industry group showed Wednesday. The drop does not bode well for the hard-hit housing market, which is showing some signs of stabilization, with sales rising and home price declines moderating in many regions of the country.
Obama Offers Bailout To Homeowners Deep Underwater Obama is expanding the homeowner bailout so that underwater homeowners with a 125% LTV ratio can refi more easily through Fannie and Freddie. Before your LTV ratio could only be 105%, because, well, as we've learned, fat loans relative to value are more likely to go bad. As many have described it, Obama's solution to the housing crisis is: more subprime loans. Like the original subprime loans, they're really only going to work out of home prices grow rapidly over the next few years, otherwise you're looking at the perpetuation of people living underwater in their homes.
Real Estate Crash: How's Your City Doing? The rate of crash for real-estate prices nationwide has finally begun to moderate. Specifically, it dropped from -19% a year in March to -18% a year in April. No, not much to celebrate. But a step in the right direction. Of course, as your ever-optimistic neighborhood realtor will tell you, real-estate is a local business: Each market is different. What does that mean? Well, in this case, it means that some markets are falling slowly, and other markets are falling like rocks.
Banks brace for tough second half of '09 Loan losses and regulatory reforms will give bankers and investors plenty to worry about in the months ahead. Stress tests. Massive government interventions. Speculation that the government would nationalize Citigroup and Bank of America. Suffice it to say that the first half of 2009 was anything but normal for the usually sleepy U.S. banking sector. But even as some sense of calm has returned, there are few indications that lenders will make a full recovery by year's end. For starters, many banks are still trying to get a firm grip on their unwieldy loan portfolios that continue to deteriorate.
Four banks ordered to boost capital Regulators have served four Georgia community banks with "cease and desist" orders, requiring the banks to raise capital, clear bad loans off their books and improve lending practices. The orders, the most serious type of regulatory enforcement action short of a shutown, were made from mid-April to early May but were just made public by the Federal Deposit Insurance Corp. The banks are: Community Bank & Trust in Cornelia; Gordon Bank in Gordon; Crescent Bank and Trust, Jasper; and Farmers & Merchants Bank in Lakeland.
Dollar Collapse - America, A Country Living On IOU's - Peter Schiff -Part 1 - America Is Finished September 15, 2008
Dollar Collapse - America, A Country Living On IOU's - Peter Schiff - Part 2
Treasury official: If GM bankruptcy is delayed, U.S. will withdraw The only viable option to save General Motors is a sale of its main assets to a "New GM" backed by the federal government, a U.S. Treasury official told a bankruptcy court Wednesday as the automaker sought approval for the deal. The official, Harry Wilson, also said the government would withdraw its portion of the $33 billion "debtor-in-possession" financing for GM if the sale of the main assets did not close by the government's July 10 deadline.
GM Plans 'Garage Sale' for Toxic Plants, Golf Course As General Motors Corp. prepares to sell its best assets to a streamlined new entity, the worst of what it owns will be auctioned off in bankruptcy court, including contaminated factory sites, parking lots in Flint, Michigan, and a nine-hole golf course in New Jersey. One property the carmaker is ditching is a foundry in Massena, New York, bordered on the east by the St. Regis Mohawk Indian Reservation and on the north by the St. Lawrence River. Built to make aluminum cylinder heads for the Chevrolet Corvair in the 1950s, it generated PCB sludge and waste from hydraulic fluids.
Foreclosure help will reach more homeowners The Obama administration is expanding a program to stave off foreclosure for borrowers who owe more than their homes are worth. Housing secretary Shaun Donovan says borrowers who owe up 25% more than their home's market value will qualify for government help refinancing their mortgages. The program currently is limited to borrowers who owe 5% more than their homes are worth. The change addresses concerns that the initial terms excluded too many so-called 'underwater' borrowers.
Citi's credit card move will test Treasury Raising rates on credit cards at odds with government infusion Citigroup Inc.'s move to raise credit-card rates on nearly 15 million of its customers will test the government's stomach for affecting decision-making at the bank. In a statement, Citigroup (C 2.97, 0.00, 0.00%) said the "changes also reflect the dramatically higher cost of doing business in our industry as we work to preserve the broad availability of credit." That's kind of like a dentist saying he's going to ease your pain by knocking out a few teeth.
Spitznagel's Universa new Hyperinflation Project - Nassim Taleb explains the economic rationale behind Spitznagel's Universa betting on extreme price instability with a new Black Swan Protection Protocol - Hyperinflation.
U.S. 'ready' for N. Korean missile U.S. missile defenses are prepared to try to knock down the last stage of a Taepodong-2 missile that North Korea is expected soon to launch if sensors detect the weapon threatens U.S. territory, the commander of the U.S. Northern Command told The Washington Times. "The nation has a very, very credible ballistic-missile defense capability. Our ground-based interceptors in Alaska and California, I'm very comfortable, give me a capability that if we really are threatened by a long-range ICBM that I've got high confidence that I could interdict that flight before it caused huge damage to any U.S. territory," said Air Force Gen. Victor E. "Gene" Renuart, Northcom commander.
Arms to Be Focus in Meeting of Obama, Russian Leaders The Obama White House on Thursday adopted a hard line against negotiating away missile-defense sites in Eastern Europe and limiting NATO expansion in the former Soviet Union, just days ahead of a summit meeting in Moscow. The hardened posture made it clear the Kremlin wouldn't make headway on two of its top priorities for the summit. "We shouldn't have excessive hopes" for the meeting, said a senior Russian diplomat in Moscow. "Despite all this constructive atmosphere, the deeper you get into details, the more difficulties you find."
Fed Copies Weimar Hyperinflation
Hyperinflation - Germany 1923 A teaching resource to support an explanation of the economic process of inflation; how the Weimar Government reacted and how it contributed to the Year of Crisis 1923
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