Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Fri 10.30.2009
In White House Vs. Fox News War Of Words, Who Gets Your Vote? The stories about what the Obama White House has to say about Fox News Channel keep coming. There was White House communications director saying telling Howard Kurtz of The Washington Post and CNN "let's not pretend they're a news network the way CNN is."
Stock analysts issue 'Black Tuesday' warning Trends on anniversary of 1929 collapse indicate markets on verge of 'crash' On this 80th anniversary of the "Black Tuesday" stock market collapse, some analysts are experiencing déjà vu, warning a major crash in the stock market is imminent. Graham Summers, senior market strategist at OmniSans Research, wrote in the firm's daily e-letter yesterday that the markets may finally be on the verge of the crash he has been predicting for more than two months. "Well, judging from the market's action today, I believe we may be within 48 hours of getting the "Official Sell" signal I've been waiting for," he wrote in "Gain, Pains, and Capital."
Great Depression, Great Recession: What 1929 can teach us about 2009 How do you commemorate the worst stock market crash in history? With the news that another devastating economic implosion may be nearing its end. That's where America finds itself on the 80th anniversary of the Great Depression -- reacting to the first positive GDP numbers in a year, slowly pulling itself out of the Great Recession, and looking for ways to make sure the country doesn't wind up mired in a decade of dismal economic conditions similar to the one that began 80 years ago on Oct. 29, 1929. Analysts and market watchers have been comparing the two meltdowns all year, and investors can take note of the similarities in their causes as they consider how to navigate their portfolios through the aftermath (we hope) of the most recent one.
Phony GDP Growth
Stock Market Black Monday Crash, Ancient History Or Imminent Future? Once upon a time, the term "Black Monday" was to Wall Street what the name "Lord Voldemort" was to Hogwarts. It turned the air freezing cold and sent traders flinching around every corner in fear of a repeat of the October 19, 1987 or October 28, 1929 meltdown. Case in point: The 2008 "Black Monday" anniversary. At the time, the U.S. stock market was locked in a ferocious downtrend that included regular, triple-digit daily declines of 400 points and more. Needless to say, when the final two Mondays of October arrived, the least superstitious investors surrounded their portfolios with more good-luck talismans than a Bingo player.
From US Bank Failures to Civil Unrest: How Soon? How Bad? According to Bloomberg, the FDIC said 416 banks with combined assets of $299.8 billion were on its list of "problem" lenders at mid year. Meanwhile 106 banks have been closed by regulators this year to date. This compares with 179 banks which were shut down during the Savings and Loan Fiasco of 1992. Last week FDIC Chairman Sheila Bair told a Senate subcommittee on financial institutions -- "The most prominent area of risk for rising credit losses at FDIC-insured institutions during the next several quarters is in Commercial Real Estate lending." What does it mean?
Central banks chill asset rally The liquidity tide is turning. Authorities across large parts of the world have either begun to tighten the spigot or are taking steps to wean their economies off emergency stimulus. This is a treacherous moment for markets. Oil-rich Norway raised rates a quarter point to 1.5pc on Wednesday, the first European country to move since the crisis. Governor Svein Gjedrem said asset prices have "risen sharply and probably excessively". The Norges Bank is taking pre-emptive action to choke off a property bubble, though manufacturing remains sluggish. The era of "asset targeting" has begun. Australia took the plunge earlier this month. It dodged recession over the winter and has since been lifted by China's torrid demand for commodities. Israel kicked off in August.
Fed's Massive Secret Wall Street Bailout Still Going Strong Remember last fall, when our government explained that the reason we needed to give $800 billion to Wall Street was so the banks could lend it back to us and shock the economy back to life again? That was a happy story! And we fell for it. What happened, of course, was that the banks took the money, stopped lending, and used it to pay themselves and their shareholders through the nose. Twelve months later, the banks still aren't lending, and we're still bailing them out hand over fist.
Dollar Set for Fourth Monthly Loss Against Euro on Risk Demand The dollar headed for a fourth monthly drop against the euro, its longest stretch since 2004, as the U.S.’s return to growth renewed optimism a global recovery will quicken, aiding demand for higher-yielding assets. The yen was little changed against the euro, set for the biggest monthly slide since May, after a government report showed Japan’s jobless rate unexpectedly dropped for a second month, reducing demand for the relative safety of the Japanese currency. Australia’s dollar is rising for a record ninth month as global stocks rallied and prices climbed for commodities that comprise more than half the South Pacific nation’s exports.
Gold's a Great Investment Because There's a War Coming The people who are telling you to buy gold because of impending hyper-inflation don't know what they're talking about, says "cycles" analyst Charles Nenner. Yes, gold has done well in times of inflation. But it has also done well in times of deflation. So the causality link between inflation and gold I wildly overblown. The real reason to own gold, says Nenner, is that there's a war coming. Gold does well in times of military conflict, and we're heading pell-mell into an era of military conflict.
Checking in on Gold Has gold topped out? The guys over at MarketClub don't think so. They take a look at the gold chart and highlight why the recent dip is just a normal course of action for the longer-term uptrend. Here's their video on gold where they highlight support levels to buy at and identify price targets going forward. They note that gold clearing the psychological and technical resistance area of $1000 was a big deal (duh). However, even more important could be the fact that it has been able to remain above that threshold for over a month.
Gold Rises Most in Three Weeks as Dollar’s Drop Spurs Demand Gold rose the most in three weeks as a sliding dollar increased the metal’s appeal as an alternative investment. The greenback tumbled for the first time in five sessions against the euro after a report showed the U.S. economy, the world’s biggest, expanded in the third quarter for the first time since June 2008, stoking demand for higher-yielding assets. Before today, gold futures dropped 3.2 percent since Oct. 21 after reaching a record $1,072 an ounce a week earlier.
Gold rebounds as U.S. returns to growth, dollar falls Copper tops $3 a pound as greenback dips for first session in six Gold futures closed above $1,047 an ounce, breaking five straight sessions of losses, after a report showing the U.S. economy expanded for the first time in a year enticed investors back to commodities and stocks. Gold for December delivery added to gains throughout the session to end at $1,047.10 by the close of floor trading in New York. Gold rose $16.60 an ounce, or 1.6%, to mark the contract's highest close since Friday. December silver rose 42 cents, or 2.6%, to $16.655 an ounce. "It's the better economic figures, better oil and better moving averages in gold," that are supporting prices Thursday, said George Gero, vice president of global futures at RBC Capital Markets.
'Believe in gold. But gold is not a religion' The US dollar fell along with the yen overnight, as speculation ahead of the release of US GDP data pushed stock index futures higher and reignited a modicum of risk appetite. Following four days of climbing against the euro, and backing away from the 75 mark on the trade-weighted index, the greenback slipped 0.20 this morning, coming down to 76.27 and this action resulted in partial repairs of yesterday's $12 rout in gold prices. Yesterday's sell-off capped the longest slide in gold since March - the dollar was cited a the prime mover, yet again.
Seeing Next Boom, Tudor Goes for Gold Those who doubt an economic recovery is under way may want to check out the latest investor letter from Paul Tudor Jones. The legendary hedge fund manager of Tudor Investment sees a wave of money flowing into the markets, pushing up stocks, commodities and other assets in what he terms “The Great Liquidity Race.” Winning the race, Mr. Jones posits, will be gold, emerging-market equities denominated in local currencies and commodity-related stocks. “I have never been a gold bug,” he says in the letter. “It is just an asset that, like everything else in life, has its time and place. And that time is now.”
U.S. Gold Futures Rise on GDP Thursday morning gold futures extended gains trading after the U.S. third-quarter gross domestic product reading came in higher than expected. That sends the U.S. dollar lower and equities futures higher. In recent trading, December gold was up $7.20 at $1,037.70 on the Comex division of the New York Mercantile Exchange. The U.S. economy expanded in the third quarter for the first time in more than a year thanks to a bounce back in consumer spending, but a weak labor market is expected to keep the recovery subdued.
What Is Your Exposure? A well-known truism is that every investor needs to start with savings. But what if that “savings” gave the investor too much exposure to risk? What investors or people in general need in this financial environment is savings that don’t deteriorate. We are in an environment now where the idea of making money, which is kind of the preamble to being American, is going away. In other words, today’s environment is, he who loses the least, wins, and the way that you do that is to hold a currency that doesn’t devalue over time. There really are only two currencies, and they are gold and silver.
Golden Accumulation Opportunity Actually, the golden opportunity is for buying silver at current prices. The motive for lifting the USDollar was the gargantuan $115 billion in USTreasurys offered this week. With bond yields rising from gargantuan supply, the USGovt and USDept Treasury and USFed did not wish to have both bond principal values fall and the USDollar fall. So the witch doctors engineered a meager semi-lifeless US$ rally, and a full 100-cent silver price discount. The claim again came that the bond auction bid/cover was strong at over 3:1 ratio. But 1.0 of that comes from the primary dealers who are bound to bid. The rest came in majority from foreign central banks. Same Modus Operandi by the Big Boyz. The difference is that precious metals were taken down in price, using the typical naked shorting of futures contracts sponsored and endorsed by the USGovt, which refuses to enforce the regulatory requirement to maintain 80% metal in inventory.
***** Very Funny Spoof ***** US To Trade Gold Reserves For Cash Through Cash4Gold.com
Weak Dollar Is ‘Welcome Change’ for McDonald’s, PPG Profits McDonald’s Corp., United Technologies Corp. and PPG Industries Inc. are among the companies whose earnings may get a boost in the fourth quarter from a weak dollar because of foreign operations and exports. U.S. firms are benefiting when they convert revenue from Europe with the euro touching $1.50 this month and having climbed 16 percent from a year ago as of yesterday. United Technologies, the maker of Pratt & Whitney jet engines, adds $10 million in annual operating income for every penny the euro gains against the dollar, Chief Financial Officer Gregory Hayes said in an Oct. 20 conference call.
Decline and fall of the U.S. dollar Commentary: Bigger dynamics drive the greenback's value As the dollar slowly grinds towards all-time lows, there's been a lot of blustery speech about its fate. Many economic experts believe this weakness bodes very badly for the country and that government banking authorities should act quickly to prop up the world's most important currency. Others welcome the slide as an opportunity to boost our economy with rising exports and the chance to repay our growing debts with cheaper dollars tomorrow. The reality lies somewhere in the middle of these extremes because of much bigger dynamics driving the dollar's value. Economic ascendancy around the globe has put the dollar in a major downtrend for decades, populated by periodic swings of renewed strength. Our large trade deficits with countries like China, creating a transfer of wealth overseas, have been fueled both by American consumerism and the "dirty pool" of the Chinese currency peg.
Dangerous Inflationary Side Effects of G20 Ultra-Easy Money Operating under the elixir of ultra-low interest rates, and flush with trillions of fiat currency at their disposal, courtesy of the world’s top-20 central banks, hedge funds and banking Oligarchs are once again making risky and daring bets in commodities, emerging markets, junk bonds, and blue-chip stocks, defying gravity with trades that would have been un-thinkable just six-months ago. In order to engineer a 180-degree turnaround in trader psychology, from the chronic fear of meltdowns last year, to the opposite side of the spectrum - the euphoric illusions of V-shaped recoveries, the “Group-of-20” have committed $12-trillion of taxpayer money, equivalent to a fifth of the entire globe’s annual economic output. The G-20’s largesse has been used to fund capital injections into banks, soaking-up toxic assets, guaranteeing financial company debt, and flooding the world credit and stock markets with ultra-cheap liquidity.
The Next Economic Crisis, Spiralling Inflation As the credit crisis ends, a bigger one is just beginning “The US government has a technology, called a printing press… that allows it to produce as many US dollars as it wishes at essentially no cost.” – Ben Bernanke The US economy contracted for four consecutive quarters since October 2008, something we have not seen since the Great Depression. A V-shaped recovery is simply not in the cards because the credit crisis has caused deep, systemic damage. Having said that, if the recession ends this year, it certainly won’t be because the global economy is healthy.
Inflation Supply Shock Inferno The gasoline for rampant inflation already permeates the US economy – and all it will take is one bad day for a series of interrelated supply shocks to set off an inflationary inferno. As we will cover in this article, the accelerant in this case is the $700 billion annual United States trade deficit. We’ll explore how the real world economics of being the world’s largest debtor in a globalized economy trump insular deflationist monetary theory, as well as what happens when you pit exogenous supply shocks against Santa Claus
The current notional value of the derivatives market is
The current notional value of derivatives on US commercial banks’ balance sheets is $203 trillion.
97% of these ($196 trillion) sit on FIVE banks’ balance sheets (more on this shortly)
If even 1% of this $203 trillion is “at risk” … you’re talking about $2 TRILLION in at risk bets made in the derivatives market
If 10% of that 1% end badly, you’re talking about $200 billion in losses
Total equity at the five banks is $737 billion. So if you assume that only 1% of derivatives are “at risk” (odds are it’s more) and 10% of that at risk money is lost, you’ve wiped out nearly 1/3 of the banks’ equity.
The Economy Grows! Don't Rejoice, Forecaster Charles Nenner Says Things Will Sour Again in 2010 The recession is over! Pundits and economists have been saying it for months, and now the third-quarter GDP results back that claim. The economy grew at a 3.5% pace in the third quarter on the back of President Obama's stimulus bill. But, many of those same voices also acknowledge that as government assistance fades so to will the economic recovery. Market and economic forecaster Charles Nenner agrees.
Central banks chill asset rally The liquidity tide is turning. Authorities across large parts of the world have either begun to tighten the spigot or are taking steps to wean their economies off emergency stimulus. This is a treacherous moment for markets. Oil-rich Norway raised rates a quarter point to 1.5pc on Wednesday, the first European country to move since the crisis. Governor Svein Gjedrem said asset prices have "risen sharply and probably excessively". The Norges Bank is taking pre-emptive action to choke off a property bubble, though manufacturing remains sluggish. The era of "asset targeting" has begun. Australia took the plunge earlier this month. It dodged recession over the winter and has since been lifted by China's torrid demand for commodities. Israel kicked off in August.
Dangerous Side Effects of Ultra-Easy Money Operating under the elixir of ultra-low interest rates, and flush with trillions of fiat currency at their disposal, courtesy of the world’s top-20 central banks, hedge funds and banking Oligarchs are once again making risky and daring bets in commodities, emerging markets, junk bonds, and blue-chip stocks, defying gravity with trades that would have been un-thinkable just six-months ago.
How the Nation’s Only State-Owned Bank Became the Envy of Wall Street The Bank of North Dakota is the only state-owned bank in America—what Republicans might call an idiosyncratic bastion of socialism. It also earned a record profit last year even as its private-sector corollaries lost billions. To be sure, it owes some of its unusual success to North Dakota’s well-insulated economy, which is heavy on agricultural staples and light on housing speculation. But that hasn’t stopped out-of-state politicos from beating a path to chilly Bismarck in search of advice. Could opening state-owned banks across America get us out of the financial crisis? It certainly might help, says Ellen Brown, author of the book, Web of Debt, who writes that the Bank of North Dakota, with its $4 billion under management, has avoided the credit freeze by “creating its own credit, leading the nation in establishing state economic sovereignty.” Mother Jones spoke with the Bank of North Dakota’s president, Eric Hardmeyer.
Emerging Market Economies in the New World Disorder Chris Mayer writes: In horse racing, a match race is when two horses race against each other. One of the most famous such races happened at Pimlico, when Seabiscuit beat War Admiral in November 1938. In markets, one of the most watched and ongoing match races is the one between Emerging (or developing) Markets and Developed Markets. The former include China, India, Brazil and others. The latter include the US, the EU and Japan. Which one do we bet on and when?
F.D.I.C. Chief Criticizes Reform Plan Senior regulators and some lawmakers clashed once again with the Obama administration on Thursday, finding fault with central elements of the White House’s latest plan to unwind large financial companies when their troubles imperil the financial system. Describing the details of the legislation to the House Financial Services Committee, Treasury Secretary Timothy F. Geithner emphasized that the plan would give officials the tools to more tightly supervise the largest financial companies. The government would also have the authority to order companies to shed risky assets or limit trading activities if they posed a threat to the companies’ stability.
FDIC, Geithner Clash on Financial Failure Fund A top U.S. bank regulator said on Thursday a government mechanism to dismantle troubled giant financial companies should be pre-funded, a departure from the administration's draft legislation on the subject. Sheila Bair, chairman of the Federal Deposit Insurance Corp, said that Congress should establish a Financial Company Resolution Fund (FCRF) that is pre-funded by assessments on financial companies with assets of at least $10 billion.
Do banks have something to hide? Even experts have a hard time getting a handle on how bad losses might get as the commercial real estate market implodes. The banks have taken some lumps since the economy went bad. But some believe their biggest headaches are yet to come. The pace at which U.S. commercial banks are adding to their loan loss reserves has slowed this year, while loans continue to go bad at a brisk pace. Despite the optimism of lenders like Wells Fargo, some observers warn that banks aren't socking away enough for a rainier day.
Doubts greet financial oversight plan OBAMA REFORMS FACE BATTLE Lawmakers question proper role of agencies The Obama administration on Thursday ran into skepticism from lawmakers on both sides of the aisle, as well as a key regulator, as it pushed for broad new powers to monitor risks throughout the financial system and to wind down large, troubled financial firms whose failure could endanger the economy. The criticisms included how the proposals would be funded, whether the Federal Reserve stood to gain too much influence and if the government would end up with the ability to continually bail out big financial firms without congressional approval.
House Passes Stopgap Spending Measure The House Thursday approved a stopgap spending measure to avoid a shutdown for 11 Cabinet-level departments whose budgets won't be enacted by a midnight Saturday deadline. The measure would give Congress until Dec. 18 to finish seven incomplete spending measures that were supposed to be wrapped up by Sept. 30. The bill passed by a 247-178 vote and now goes to the Senate, which must pass it this week to avoid a partial shutdown. The legislation also extends highway programs and federal loan guarantees for larger mortgages.
Federal deficit: Trail of broken promises Republicans and Democrats rage about the long-term deficit, as if they had nothing to do with it. But both parties undermine efforts to get it under control When it comes to figuring out what has caused the country's record accumulation of debt, just about every politician in Washington has a theory. The theories usually boil down to this: The other guy did it. The other party's White House. A previous Congress. You get the picture. In reality, growing the deficit has been very much a bipartisan effort. Members of Congress from both parties and presidents past and present have all contributed to the problem.
7 on defense panel scrutinized Separate probes focus on ties to lobbying firm founded by Hill aide Nearly half the members of a powerful House subcommittee in control of Pentagon spending are under scrutiny by ethics investigators in Congress, who have trained their lens on the relationships between seven panel members and an influential lobbying firm founded by a former Capitol Hill aide. The investigations by two separate ethics offices include an examination of the chairman of the Appropriations subcommittee on defense, John P. Murtha (D-Pa.), as well as others who helped steer federal funds to clients of the PMA Group. The lawmakers received campaign contributions from the firm and its clients. A document obtained by The Washington Post shows that the subcommittee members under scrutiny also include Peter J. Visclosky (D-Ind.), James P. Moran Jr. (D-Va.), Norm Dicks (D-Wash.), Marcy Kaptur (D-Ohio) , C.W. Bill Young (R-Fla.) and Todd Tiahrt (R-Kan.).
Investors Sense Rout in Stocks After 8-Month Rally An eight-month, 68 percent rally in global stocks failed to convince investors and analysts that it’s time to take on more risk or dispel their concerns about U.S. economic policies and its banking system. Only 31 percent of respondents to a poll of investors and analysts who are Bloomberg subscribers in the U.S., Europe and Asia see investment opportunities, down from 35 percent in the previous survey in July. Almost 40 percent in the latest quarterly survey, the Bloomberg Global Poll, say they are still hunkering down. U.S. investors are even more cautious, with more than 50 percent saying they are in a defensive crouch.
Moody’s May Downgrade Mortgage Bonds With New Outlook Moody’s Investors Service said it’s planning a review of U.S. home-loan securities that will likely lead to another round of rating changes based on a new view that property prices won’t bottom until next year’s third quarter. The firm will boost its loss projections by “significant” amounts for prime-jumbo, Alt-A, option adjustable-rate and subprime mortgages backing bonds issued between 2005 and 2008, also after seeing higher losses per foreclosure than expected, Moody’s said today in a statement. Recent data showing rising home prices doesn’t prove the slump is over, the company said.
Does a Fall in Bank Credit Lead to Deflation? US credit is undergoing a major contraction. In the week ending October 14, US commercial-bank lending stood at $5,686.8 billion: a fall of 6.6% from the end of January. Year on year, loans fell by 7% in October after declining by 5.8% in September. On the same basis of comparison, in October last year, loans increased by 6.6%. The growth momentum of commercial-bank business loans has also had a large decline so far this October. Year on year, these loans plunged by 15.9% after falling by 13% in September, and rising by 19.1% in October last year. Since the end of January, business loans fell by $215.7 billion.
Commercial Real-Estate Crush, The Next Crisis Not to Be Wasted? As I walked home recently from a weekend trip to the grocery store, I passed a total of 13 vacant offices with signs saying "for lease" or "for sale." These spaces ranged from approximately 500 to 5,000 square feet according to their signs, and they are stretched along a main, commercial street in the center of Tucson, AZ. There is also an eight-screen movie theater that sits empty as well. These empty commercial spaces span a very short stretch of road; less than three-quarters of a mile. The former places of business (mostly restaurants, ice cream shops, and coffee shops, along with a few real-estate offices) are empty now, and have been for quite some time.
Fed Ends Treasury Buys That Capped Rates, Stabilized Housing The Federal Reserve completed its $300 billion Treasury purchase program today amid signs the seven-month buying spree helped stabilize the housing market and limited increases in borrowing costs. Yields on the benchmark 10-year note, which help determine rates on everything from mortgages to corporate bonds, never rose above 4 percent after the central bank began acquiring the debt. They are less than half a percentage point higher than the day before the program was announced on March 18, even though the U.S. sold a record $1.25 trillion in notes and bonds, more than double the amount in the year-earlier period.
Treasury Secretary Geithner set to prosecute thousands on tax charges The Internal Revenue Service will be more aggressive in collecting back taxes and prosecuting Americans accused of tax evasion, according to the new Treasury Secretary, Timothy Geithner. The Internal Revenue Service, one of the Treasury Department's agencies, claims that billions of dollars in income tax assessments were not paid by Americans. If not collected, annual unpaid taxes keep accumulating each year along with penalty and interest charges to create an inventory of "tax debts," which approached $300 billion at the end of fiscal year 2007.
Newspapers Cannot Survive Real estate investment legend Sam Zell acknowledges that his $8.2 billion takeover of Tribune Co. didn't work out so well. But he says the failure simply reflects a dying industry. Tribune Co., owner of the Chicago Tribune, has declared bankruptcy. I think with some reasonable luck, it'll be out (of bankruptcy) probably the end of the first quarter, Zell told Bloomberg. Bankruptcies by definition are frustrating, and I think they'll continue to be. The Tribune takeover was the worst business decision of his career, Zell says.
Price to PepsiCo for Not Being in Court: $1.26 Billion What's the cost of not showing up to court? For PepsiCo Inc., it's a $1.26 billion default judgment. A Wisconsin state court socked the company with the monster award in a case alleging that PepsiCo stole the idea to bottle and sell purified water from two Wisconsin men. Now the company is scrambling to salvage the situation. The damages award was handed down on Sept. 30. PepsiCo filed motions to vacate the order and dismiss the claims on Oct. 13, saying it wasn't even aware of the lawsuit until Oct. 6. The litigation began in April when Charles Joyce and James Voigt sued the soft drink maker and two of its distributors, alleging they had misappropriated trade secrets from confidential discussions the plaintiffs had with the distributors in 1981 about selling purified water. The information was illicitly passed to PepsiCo, which used it to develop and sell Aquafina bottled water, the plaintiffs allege in the case filed in the Circuit Court of Jefferson County before Judge Jacqueline Erwin.
Goldman Sachs: Home Prices Will Drop More Goldman Sachs analysts think home prices will resume their decline as government stimulus measures wane. The risk of renewed home price declines remains significant, Alec Phillips, a Goldman economist, wrote in a note to clients. Our working assumption is a further 5 percent to 10 percent decline by mid-2010. The home market has been buoyed by government measures, such as the $8,000 first-time buyer tax credit, foreclosure halts and Federal Reserve purchases of mortgage-backed securities.
U.S. Home Vacancies Rise to 18.8 Million on Defaults About 18.8 million homes stood empty in the U.S. during the third quarter as banks seized properties from delinquent borrowers and new home sales fell in September. The number of vacant properties, including foreclosures, residences for sale and vacation homes, rose from 18.4 million a year earlier and 18.7 million in the second quarter, the U.S. Census Bureau said in a report today. The record high was in the first quarter, when 18.95 million homes were vacant. The homeownership rate, meaning households that own their own residence, stood at 67.6 percent.
Homebuyer Tax Credit Measure Backed by Administration The Obama administration endorsed plans to extend an $8,000 tax credit for first-time homebuyers, saying it is helping stabilize the nation’s housing market. The tax break, enacted earlier this year as part of the $787 billion economic stimulus package, has “brought new families into the housing market and contributed to three consecutive months of rising home prices,” Treasury Secretary Timothy Geithner said today in a statement. The tax break will expire Nov. 30 unless Congress intervenes.
Clunkers: Taxpayers paid $24,000 per car Auto sales analysts at Edmunds.com say the pricey program resulted in relatively few additional car sales A total of 690,000 new vehicles were sold under the Cash for Clunkers program last summer, but only 125,000 of those were vehicles that would not have been sold anyway, according to an analysis released Wednesday by the automotive Web site Edmunds.com. Still, auto sales contributed heavily to the economy's expansion in the third quarter, adding 1.7 percentage points to the nation's gross domestic product growth.
China reportedly probing trade case against U.S. autos China is launching a trade investigation that could lead to new import duties on U.S. autos, according to a report Thursday. Beijing is considering the tariffs on cars and sport utility vehicles made by General Motors Co. , Ford Motor Co. and Chrysler, according to a Reuters report, citing a U.S. industry official. The probe is apparently aimed at alleged unfair pricing and government subsidies, the report said. The report cited Steve Collins, president of the American Automotive Policy Council, as saying the U.S. government had received documents spelling out charges by Chinese officials this week, but that they had not been translated fully and that it was too early to comment on specifics
Postal Service turns to selling greeting cards to boost revenue Facing declining mail volume, workforce cuts through employee buyouts and the possible closure of hundreds of post offices, the U.S. Postal Service has a new "get well" remedy: greeting cards. About 1,500 post offices nationwide started selling Hallmark greeting cards two weeks ago, part of a one-year experiment that may lead all 34,000 postal outlets to sell the cards and offer other goods and services, including banking, insurance and cellphones.
Something really scary for Obama's Democrats This is one Mr. Deeds who apparently isn't going to town. The collapse of the Democratic campaign for governor of Virginia speaks volumes - chapters, anyway - about what the body politic is trying to tell Barack Obama's Democrats. They're learning, painfully, that campaigning without George W. Bush is baffling, frustrating and scary. Worse, it offers a preview of what the congressional campaigning will be like next year. One Obama doorbell ringer, working neighborhoods in Northern Virginia for Creigh Deeds, says even the promise of free pizza can't lure faithful Democrats to a rally.
HITECH - Your Medical History in the Machine In the future, a visit to your family physician, or any specialist, will begin with a quick scan of the computer screen, where a few keystrokes will tell the doctor everything he or she needs to know about you – all the way from how much you weighed at birth, to X-rays of that bone you broke when you flipped your motorcycle thirty years ago, to how much you spent on blood work last year, right up to the hypertension pills you took after dinner yesterday (and maybe even what you ate, although hopefully not). Much of your medical info is already stored electronically, of course, but much more is stuffed into old paper file folders. Nor is there any centralized database that routes your records wherever they are wanted. That is going to change, and change dramatically.
Ron Paul on H1N1
Constitutionality of health overhaul questioned Legal scholars divided over Congress' authority On top of all the other obstacles facing President Obama in his quest to pass health reform is this one: Does the U.S. Constitution allow the government to require uninsured Americans to buy medical insurance or impose a tax penalty if they refuse? Congress has never before required citizens to purchase any good or service, but that is what both House and Senate health bills would mandate.
Private Insurers Protest against Government-Run Insurance Plan As House Democrats presented their health care legislation than the insurance industry gave it a thumbs-down. Karen Ignagni, president and chief executive of America’s Health Insurance Plans, which represents many of the nation’s insurance companies, warned in a statement issued on Thursday that the House bill would increase costs for consumers and employers and disrupt the current health care system. She also painted a dire picture of the consequences of a government-run insurance plan, or public option, which is designed to compete with private insurers. She said it would “bankrupt hospitals, dismantle employer coverage, exacerbate cost-shifting from Medicare and Medicaid, and ultimately increase the federal deficit,” The New York Times reports.
House Health Plan Has Public Option, Millionaire Tax House leaders unveiled an $894 billion plan to overhaul the U.S. health system by creating a government-run insurance program, requiring employers to cover workers and imposing a surtax on the wealthiest Americans. The legislation comes after three months of negotiations among Democrats and represents the most sweeping health-care changes since the 1965 creation of the Medicare program for the elderly. The 10-year measure would put new restrictions on insurers, encourage greater use of preventive medicine and require Americans to buy coverage, with aid if needed.
Obama asks small businesses to back health reform President Obama appealed Thursday to small businesses to support congressional legislation on health-insurance reform, saying it will revive America's entrepreneurial spirit slowed by the high costs of coverage for owners and their employees. "We all know that family premiums have skyrocketed more than 130 percent over the past decade," the president said from the White House. "But small businesses have been hit harder than most. . . . in part because small businesses pay higher administrative costs than large ones, your employees pay up to 18 percent more in premiums for the very same health insurance policies."
Plan to Drill on Colorado Plateau Meets Resistance RIFLE, Colo. — Standing in a canyon in hilly terrain, Ken Neubecker cast his fly into a cold stream. Minutes later he had a bite. Thrashing at the end of his line was a speckled green fish, a scarce Colorado cutthroat trout. Mr. Neubecker was fishing on the Roan Plateau, a high stretch of terrain beloved by hunters, anglers and hikers for its clear streams, herds of deer and elk, and rugged beauty. “There just aren’t many places like this in the West,” Mr. Neubecker said. “It’s a real gem.” Energy companies are looking at the Roan Plateau, too — through entirely different eyes. Vast deposits of natural gas are believed to lie beneath the stretch on which Mr. Neubecker was fishing, and the companies want to drill.
Boxer pushes ahead on climate measure Effort may be stalled by GOP Senate Environment and Public Works Committee Chairman Barbara Boxer said late Thursday that she wants to hold drafting sessions as early as Tuesday on the climate change bill pending before her committee, but that the meetings could be delayed by Republican stalling tactics. A spokesman for Sen. James M. Inhofe of Oklahoma, the ranking Republican on the panel, said committee Republicans were leaning toward boycotting the sessions and would meet soon to decide whether they would stay away. At least two members of the minority must attend the sessions, known as markups, for them to be convened, according to committee rules.
Climate Deal May Be Unlikely in 2010 If Summit Fails Countries are unlikely to agree on a treaty with binding greenhouse-gas reduction targets next year if United Nations-led climate talks fail in Copenhagen this December, Denmark’s minister for climate and energy said. “Do we believe that we’ll have stronger figures by March or April? No, it’s very unlikely to happen,” Connie Hedegaard said in a meeting with journalists in the Danish capital.
Tehran seeks big changes to nuclear deal Iran on Thursday night indicated it wanted to make significant changes to a draft agreement with the US and other world powers over its nuclear programme, in a move that may scupper the chances of any final accord being reached. Almost two weeks after starting negotiations with the US, France and Russia over the draft, Iran finally delivered its response to the International Atomic Energy Agency in Vienna. The agency said last night it was negotiating with Iran and other parties over the accord, but western diplomats suggested Tehran’s demands were unacceptable. The US, France and Russia have proposed that Iran should transfer two-thirds of its current stock of low enriched uranium out of the country for manufacture into more highly enriched fuel used for cancer treatments. They are also insisting that the full batch of LEU designated for transfer should be shipped out before the end of the year. If Iran were to do so at this speed and on this scale, it would underscore that the material could not be used for a nuclear weapon.
China and US move to defuse trade row China and the US resolved several thorny trade disputes on Thursday even as Beijing confirmed it was investigating potential dumping of US-made cars in the Chinese market. At a high-level meeting of officials from both countries in the eastern Chinese city of Hangzhou, China said it would allow US pork imports and relax restrictions on wind power components and government procurement rules. Thursday’s meeting comes three weeks before the first visit to China of President Barack Obama and against a backdrop persistent trade tensions, concerns about the strength of the US economy and renewed criticism of China’s currency policy. Last month Mr Obama imposed a 35 per cent duty on imports of Chinese tyres and Beijing responded by launching anti-dumping investigations into US imports of auto parts and poultry.
Iran Reply to UN Fuel Plan Falls Short of Acceptance The United Nations nuclear agency was consulting with the world powers and Iran after the country failed to fully accept a UN-brokered plan to provide it with fuel for a medical-research reactor. “Iran’s technical and economic concerns in relation to the provision of fuel for this research reactor should be addressed,” Aliasghar Soltanieh, Iran’s ambassador to the UN’s International Atomic Energy Agency in Vienna, said after delivering his country’s response to the proposed deal today, the state-run Iranian Students News Agency reported. He said Iran would continue talks in Vienna “with a positive view.”
Lindsey Williams Back on Alex Jones Tv 1/6: Lindsey Takes Your Questions
Lindsey Williams Back on Alex Jones Tv 2/6: Lindsey Takes Your Questions
Lindsey Williams Back on Alex Jones Tv 3/6: Lindsey Takes Your Questions
Lindsey Williams Back on Alex Jones Tv 4/6: Lindsey Takes Your Questions
Lindsey Williams Back on Alex Jones Tv 5/6: Lindsey Takes Your Questions
Lindsey Williams Back on Alex Jones Tv 6/6: Lindsey Takes Your Questions
Glenn Beck Interviews Lord Monckton On Climate Treaty Part 1
Glenn Beck Interviews Lord Monckton On Climate Treaty Part 2
Facing A Total Breakdown Of Financial Markets Yet another bank bights the dust, stocks have net outflows of capital, big insider sell offs and other bad moves that enable insiders to control the market, biggest S&P rally ever, Plunge protection team working overtime, Gold in a new phase. This is another victim of the FDIC Friday Night Financial Follies. Early Friday morning, state and federal agents walked into the Bank of Elmwood and closed the failed 49-year-old independent bank after a year of struggling to improve a bleak financial situation, officials announced Friday.
Dollar ‘Over-Owned,’ Will Fall to Record, Gross Tells CNBC The dollar is an over-owned currency and likely to fall to an all-time low against major counterparts, Pacific Investment Management Co.’s Bill Gross said in an interview on CNBC. “The Chinese, the Asians, have owned too many dollars for too long,” said Gross, a founder and co-chief investment officer of the world’s biggest manager of bond funds. “The dollar becomes more and more owned and less and less desirable, so ultimately the direction is down. I don’t sense stability in the dollar.”
Fed Up with the FED The political movement to curtail the Federal Reserve goes from fringe to mainstream. Rep. Ron Paul (R-Texas), the libertarian-leaning congressman and failed 2008 GOP presidential candidate, has been suspicious of the Federal Reserve since before first entering Congress in 1976. In a 1981 article that mentioned the then-obscure legislator, United Press International reported that Paul "has proposed abolishing the Federal Reserve, repealing laws which make the dollar legal tender, and switching to currency issued by banks, 100 percent backed by gold."
When Money Dies Bottom line: "When money dies, so do people." Hyperinflation in a modern urban nation would kill people. I think it would kill a lot of people. Why? Because we rely on the social division of labor to feed ourselves, heat our homes, and supply everything else that we buy or sell. This requires a highly complex price system. At the heart of this system is money. It would not exist without money. The free market coordinates the buying selling of billions of products and services. Products are tracked by an identifier called a stock keeping unit, or SKU. In the region around New York City, there are something in the range of ten billion SKUs, according to economist Eric Beinhocker (The Origin of Wealth, 2007, p. 9). This does not count services. The service sector is more than twice the size of the goods sector in the United States.
Death Cometh for the Greenback THE DOLLAR is in trouble. That’s clear, and it’s been true for a while. The cornerstone of the global economic system has long been the greenback. In the aftermath of the Vietnam War and the oil shocks that brought on inflation, the value of the dollar relative to other currencies could not be maintained, so countries moved away from pegging their currencies to America’s. But still, the almighty dollar was used by countries all over the world for their reserves. The reserves provided backing for the currency and the country. They were a bank account that could be drawn upon in times of need. If oil prices shot up, a crop failed or lenders demanded their money back, there was a stockpile of money that could be used.
Peter Schiff talks about the US Dollar
Inflation by Stealth So for now, inflation is like a ninja stalking our economy. It's lurking in the shadows but can't easily be seen. But once its strikes, it will be fast and deadly. Over the past two years, the federal government and the Federal Reserve have dispersed trillions of public dollars, run up enormous deficits, and kept interest rates at zero. In just about any economic textbook, this combination of policies would be described as the perfect recipe for inflation. Yet, with the exception of the usual increases in health care and education, prices by and large are not rising. Many have concluded that our economic leadership has simply outsmarted the textbooks. The benign CPI figures are serving as a rallying point behind which the financial talking-heads are forming a parade of optimism. The low CPI is their 'proof' that inflation is not a pressing concern. This view is two dimensional.
Congress fears risk of economic relapse Eyes housing, jobless aid Fear that the economy might fall back into recession is compelling Congress to extend unemployment benefits and incentives for homebuying that lawmakers hope will help sustain growth. The threat of a relapse in housing has prompted Senate leaders to start negotiating an extension of the first-time homebuyers' tax credit, now set to expire Nov. 30. They hope to attach the measure to legislation extending soon-to-expire unemployment benefits and then pass both by the end of the week.
USD Future and a World Currency Some very big questions With the USD fluttering around 76 on the US Dollar currency basket index, the USDX it’s a good time to pontificate on its near term future, and longer term future. Gold’s big rally since 2002 begs a lot of major questions. The US is now flirting with an immediate debt of around $14 trillion (US Treasury bonds etc, and not including future liabilities like Medicare). The US now passes a key level of indebtedness considered to be a first stage of crisis. That puts US current debt at 100 pct of GDP. Just this week, the US needs to sell a record $130 plus billion of debt, for one week. The US is running a fiscal deficit of about $2 trillion a year, and for the total government budget that amounts to 40% of its budget. Imagine trying to run your own personal life that way.
Power Shift On Monday, November 2nd, it will have been seven months since the G2o met in London to expand the international currency known as the Special Drawing Rights. If you want to brush up on the background of this international currency, our November 2008 newsletter, states: Consider the history of SDRs from the IMF’s own website. The Special Drawing Right (SDR) was created by the IMF in 1969 to support the Bretton Woods fixed exchange rate system. After the collapse of the Bretton Woods system in 1973, the SDR was redefined as a basket of currencies, today consisting of the euro, Japanese yen, pound sterling, and U.S. dollar. The U.S. dollar-value of the SDR is posted daily on the IMF's website. As we read the IMF’s website further, we learn that the IMF has been trying to expand the number of SDRs in circulation for years.
Gold to Rise to $2,000 Amid ‘Massive’ Inflation, Superfund Says Gold may rise to a record $2,000 an ounce in the next three years as investors hedge against “massive” inflation sparked by governments printing money, according to Superfund Financial Singapore Pte’s Aaron Smith. “In the next few years, after the deflation cycle, we’ll see massive inflation,” Managing Director Smith, 30, said in an interview. “Soon, when you go to buy a cup of coffee, you’ll pay $20 or $30 because the dollar won’t be worth anything.”
'Gold to hit $2,000 in three years' Aaron Smith is the managing director of Superfund Financial (Singapore) Pte Ltd with a deep knowledge in the bullion trade. In a recent interview to Bloomberg news agency, Aaron said that gold may rise to a record $2,000 an ounce in the next three years as investors hedge against massive inflation sparked by governments printing money. This prediction by one of the world's leading providers of managed futures funds is not without reason.
Silver Unmasked Hyperinflation Most individuals have no clue about the dynamics of silver, thinking there is an infinite supply of it both above and below ground. But those Savvy investors who incorporate commodity based stocks in their portfolios likely own the silver ETF (SLV) or silver miners with a high degree of leverage to the price of silver. The largest of this group include Silver Wheaton (SLW), Pan American Silver (PAAS), Coeur d'Alene Mines (CDE), Silver Standard Resources (SSRI), Hecla Mining (HL). There are also numerous junior and exploration companies that will provide extraordinary returns over the long term.
Soros: Buy Hard Assets, And Don't Keep Betting On A Weak Dollar This week’s Guru Outlook takes a look inside the mind of George Soros – one of the original masters of the global macro hedge fund universe. Soros, of course, became famous for breaking the Bank of England. Soros made a spectacularly leveraged bet against the British Pound which netted him over $1B in a day. Soros rose to recent notoriety for predicting the financial crisis. He was far more bearish than most others and appeared to have a crystal ball with a play-by-play for each step of the crisis. Like some of the guru’s we’ve spoken of lately, he wasn’t bearish all the way up. Soros saw the decline in markets as a buying opportunity and has taken the liberty to make billions for his investors on both the way down and the way up.
Newcrest Says Gold Outlook Strong on Investor Demand Newcrest Mining Ltd., Australia’s largest gold mining company, said the outlook for the precious metal was strong as the global financial crisis increased demand from investors. “Demand for gold as a store of value has strengthened during the recent global uncertainties,” Chairman Don Mercer said today in a copy of a speech to the company’s annual general meeting in Melbourne. Jewelry demand has been “flat”, he said.
Revival of the Petrodollar Recycling Machine Generally we think of the Federal Reserve as being very queasy, in an old school sort of way, about rising oil prices. But at a time of collapsed trade flows and the attendant reduction in Dollar reserve building, might the Fed secretly welcome an advance in the price of oil? Readers of this site know that in a number of posts this year I’ve laid out the case that recession is bullish for sovereign debt, but collapse is not. In addition, at a time of 1.5 -2.0 Trillion dollar annual budget deficits in the US, I’ve also noted the punk rate of saving here domestically that cannot hope to cover such spending increases. And so, into this gaping maw the Fed itself has been active, buying 300 Billion of Treasury debt so far in 2009. But with the rise in the price of oil, have oil producer recycling flows started back up again.
The dollar's fall is felt overseas Europe, Japan fear fallout Declining value aids U.S. economic recovery The dramatic decline of the U.S. dollar is aiding the American economic recovery but setting off alarm bells overseas, with corporate executives, politicians and pundits calling it among the biggest threats to the rebounds underway in Europe and Japan. Mounting concern abroad over the shrinking dollar underscores how exchange rates have emerged as a growing source of friction, with many countries jockeying for the weakest currency to boost exports and protect their markets from foreign competition.
Bankster Holiday Evidence that the U.S. is a failed state is piling up faster than I can record it. One conclusive hallmark of a failed state is that the crooks are inside the government, using government to protect and advance their private interests. Another conclusive hallmark is rising income inequality, as the insiders manipulate economic policy for their enrichment at the expense of everyone else. Income inequality in the U.S. is now the most extreme of all countries. The 2008 Organization for Economic Cooperation and Development report, “Income Distribution and Poverty in OECD Countries,” concludes that the U.S. is the country with the highest inequality and poverty rate across the OECD and that, since 2000, nowhere has there been such a stark rise in income inequality as in the U.S.
Those who cash out 401(k) plans are at risk Younger worker especially ignoring advice to not take money out of plans Millions of workers take a huge chance with their retirement savings every year: They cash out their 401(k) accounts when they lose their jobs or move to new employers. When people cash out, a chunk of their money just disappears. Employers and financial advisers have warned workers about the possibility of retiring poor, something that's more likely to happen when people cash out their accounts. The rhetoric to keep saving ratcheted higher over the past year as stock prices fell and the average retirement account balance fell by a third.
N.Y. Fed pushed AIG on contracts After federal bailout, insurance giant lost its leverage with banks The Federal Reserve Bank of New York said Tuesday that it had no choice but to instruct American International Group last November to reimburse the full amount of what it owed to big banks on derivatives contracts, a move that ended months of effort by the insurance giant to negotiate lower payments.
Tim Geithner, Don't You Dare Bail Out GMAC Again Tim Geithner's getting ready to shovel more taxpayer money down the rat hole, this time to GMAC. GMAC, in case you're in understandable denial, has been bailed out twice already. And now Tim Geithner wants to shovel another $2.8 billion in. What is the US taxpayer getting in exchange for all these GMAC bailouts? Preferred stock. Why are we getting preferred stock, which is neither a claim on the future upside of the company's equity, nor a senior debt security that will be completely repaid in the event that taxpayers finally get mad as hell and won't take it anymore?
The Full Story Of How Tim Geithner Secretly Bailed Out Wall Street And Screwed The Taxpayer Last Fall When the historians finally finish sorting through the appalling decisions that have been made in the past two years, this one will probably be at the top of the heap. Last fall, as AIG began to realize how screwed it was, it started negotiating with the counterparties to all the credit default swaps it had written. One of the AIG's goals was to persuade these counterparties--including Goldman Sachs--to accept buyouts discounts of as much as $0.40 cents on the dollar. These sorts of negotiations are exactly what should happen when a company gets in trouble. It goes to its creditors and says, look, we can't pay you everything, so here's your choice: Take something, or take your chances in banktuptcy court. (And, in this case, this wouldn't have been much of a choice, given the standing of CDS holders in the liquidation line).
Dylan Ratigan: Goldman Sachs magic trick
Governments Never in Default Pay More Interest Than Companies California is the world’s eighth- largest economy. Diamond Offshore Drilling Inc. is the largest U.S.-based deepwater oil driller. The state known for its wine, Hollywood and earthquakes collected about $80 billion in taxes in the year ended June 30, compared with $3.6 billion in revenue for Houston-based Diamond. The two have similar credit ratings, and the state can rely on its taxing authority to address deficits. Still, the company got a better deal than California when each borrowed money this month.
Will The Government Really Be Able To Keep The List Of Too Big To Fail Firms Secret? Does anyone think that the government's proposal to keep the list of systemically risky firms secret is actually a workable idea? The new proposal (PDF) out of the House Financial Services Committee proposes to create a new framework for identifying financial firms that would threaten financial stability if distressed or have a nature, scope or mix of activities that pose a threat to the economy. The proposal says the new financial regulatory council will make a list of the firms and then periodically revise the list of identified firms, adding or subtracting firms as the market changes. It then goes on to insist that the council may not publicly release the list of companies identified.
A Short History of British Bankruptcy If we manage to escape national bankruptcy, we have set up a slavery far more oppressive than any previous form of bondage..." BRITAIN'S BANKRUPTCY has been a long time coming. "By our political folly we have a put a large part, probably the greater part, of the nation in possession of rights to draw from the public purse," wrote Ernest J.P.Benn in his hilarious Account Rendered of 1930. How hilarious? Forced to live with the "smudge readers" at passport control, policemen demanding to see one's driving license down at the station, and Whitehall drones obsessed with how many pencil sharpeners their department controlled, Britain's moneyed classes knew the lower orders could only travel, drive and wear white-collared shirts if kill-joy regulations applied to the gentry and their staff alike.
Deflation fears as Eurozone and US credit contracts Bank lending to firms and households in the eurozone has fallen for the first time, raising fears of an economic relapse and a slide into deflation next year. Data from the European Central Bank shows that the M3 broad money supply has contracted over the last six months, confounding expectations that ultra-low interest rates would soon boost monetary growth. Loans to the private sector fell 0.3pc from a year earlier, the first such decline since the data started in 1983. The M3 figures include a wide range of bank accounts. They are watched closely by experts for early warnings about the economy a year or so ahead.
Rogoff, Ferguson Say Global Financial Crisis Is Not Yet Over The global financial crisis isn’t over, said Harvard University professors Kenneth Rogoff and Niall Ferguson, who challenged assertions by Group of 20 leaders at last month’s meeting in Pittsburgh. “The G-20 is right that it’s over for all the banks they guaranteed,” Rogoff, former chief economist at the International Monetary Fund, said today in an interview with Bloomberg Radio. As a consequence of bailouts and stimulus measures, “the financial crisis may eventually morph into a government-debt crisis.”
Adrian Salbuchi, Argentina is Talking, (1) (NWO SOCIETY/ 'Social Unrest', 'Martial Law' & 'War')
Adrian Salbuchi, Argentina is Talking (2) (NWO SOCIETY/ 'Social Unrest', 'Martial Law' & 'War')
Adrian Salbuchi, Argentina is Talking (3) (NWO SOCIETY/ 'Social Unrest', 'Martial Law' & 'War')
Adrian Salbuchi, Argentina is Talking (4) (NWO SOCIETY/ 'Social Unrest', 'Martial Law' & 'War')
Adrian Salbuchi, Argentina is Talking (5) (NWO SOCIETY/ 'Social Unrest', 'Martial Law' & 'War')
Adrian Salbuchi, Argentina is Talking (6) (NWO SOCIETY/ 'Social Unrest', 'Martial Law' & 'War')
Midnight Candles Bill Gross A cold wind from the future blows into my nighttime bedroom, more often than not during those midnight hours when fear dominates and hope retreats to a netherworld. This wind is a spectre, an oracle of darkness and eventual death, not easily dismissed. Once merely a whisper, its decibels intensify with the advancing years. It will be heard, this reaper – this grim reaper, yet in the nights when it howls the loudest I fight back, silently screaming for it to get out, to leave me alone, to let it all be a bad dream. It never is. Shakespeare’s Macbeth expressed it more subtly: “Out, out, brief candle!” Yet the finer words provide no solace; the final act is always the same.
Bernanke, Shirakawa Trail Gjedrem as World Policy Split Widens The global monetary policy divide is widening as the Federal Reserve, Bank of Japan and major counterparts lag behind Norway and Australia in raising interest rates, a trend that’s set to continue into 2010. While Fed Chairman Ben S. Bernanke and BOJ Governor Masaaki Shirakawa may soon unwind some of their emergency measures, JPMorgan Chase & Co. doesn’t expect a Group of Seven member to lift rates before the third quarter. The divergence may boost the currencies of those nations shifting first, with New York University professor Nouriel Roubini warning low U.S. rates may be generating “huge” bubbles as investors borrow dollars to invest in other assets.
Top China Banker: We Must Raise Rates China must raise interest rates if the country wants to avoid seeing an asset-price bubble burst, says Qin Xiao, chairman of China Merchants Bank, the country's sixth-largest bank. Economic stimulus programs are inflating stock and real estate prices, and the country should not be afraid of tempering its red-hot growth rates. Monetary policy must not neglect asset-price movements, Qin tells the Financial Times. Therefore it is urgent that China shifts from a loose monetary policy stance to a neutral one.
U.S. foreclosures spike in new regions in 3rd qtr U.S. mortgage defaults ebbed in some hard-hit cities in the third quarter, but unemployment created new trouble spots as foreclosures set a record in the quarter, real estate data company RealtyTrac said on Wednesday. Foreclosure activity declined in five of the top 10 metro areas from a year earlier, at least temporarily aided by government programs to modify terms of home loans. Job loss as well and mortgage rate resets, however, are severely curbing the ability of homeowners to make timely payments. Many metro areas with the 50 highest foreclosure rates had sharp increases in filings during the past three months.
City of Houston is Bankrupt (So are California, Oregon, and Pension Plans in General) Houston, we have a problem. We are bankrupt.That is the finding of Bob Lemer, CPA, Retired Partner at Ernst & Young; Aubrey M. Farb, CPA, Retired Partner at Grant Thornton; and Tom Roberts, CPA, Retired Partner at Fitts Roberts.Cover LetterOctober 22, 2009Name, Title and Address [see list below]Subject: Finances of the City of HoustonDear : [see list below]Enclosed is our partial analysis of the very serious financial situation at the City of Houston. We would be derelict if we failed to share this financial analysis with you. This financial heads up will assist you in meeting your fiduciary responsibilities to Houston voters, taxpayers, readers, viewers or investors---as the case may be.We feel a public discussion of the City’s financial situation is necessary and firmly believe that addressing the City’s financial condition is in the best interest of the Houston economy and Houston taxpayers. We believe the sooner the City of Houston addresses the financial shortfall the better.
Credit cards still use practices to be banned Study: Fees, rates increasing ahead of law to stop them taking effect Not only have credit card companies continued to use practices that will be outlawed under a strict law due to take effect in February, in many cases their policies have gotten harsher since the law passed. A review of nearly 400 cards offered by the largest 12 card issuers in the U.S. found nearly all contracts still allow banks to raise interest rates on outstanding balances. Most also still have penalty interest rates that can be triggered with just one or two late payments or overlimit transactions. And most still allow banks to apply payments to the lowest interest portion of balances first.
Foreclosures double in Washington area Subprime borrowers in three counties bear the brunt, report says The number of Washington area homeowners in foreclosure has more that doubled in the past year, according to a report to be released Wednesday that shows the problem remains most acute in a few counties and could get worse as more borrowers fall behind on their payments. About 2.7 percent of local borrowers are in the foreclosure process, meaning that the bank has started the legal process to take back the property, according to the report by the Urban Institute, a nonprofit policy research group based in Washington. That was slightly below the national average of 2.9 percent.
South Florida homeowners walking away from underwater mortgages Andres Duque thought he got a real steal when he paid $125,000 for his Little Haiti condo. But four years later, similar units are selling for $35,000 and even less. And so, faced with the prospect of being underwater on his mortgage - owing more than the unit is worth - for the next 20 years, Duque, 33, made what seemed to him like a rational choice: to cut and run.
Homeowners walking away from underwater mortgages Many South Florida homeowners who can afford to make their mortgage payments are choosing not to, forcing the lender to foreclose. It's called strategic default. Walking away, however, is fraught with financial, legal and ethical dilemmas. Lenders, government and the credit industry are starting to pay more attention to how strategic defaulters think and behave -- in an effort to convince them to tough it out. ``It's a huge problem, and it doesn't get addressed in the process right now,'' said Ron Kaniuk, a Boca Raton foreclosure and bankruptcy attorney. He said lenders are encouraging the trend by primarily offering loan modifications only to those who have fallen behind or are seriously at risk of foreclosure.
Senators agree to extend homebuyer tax credit Senators agree to extend tax credit for first-time homebuyers, expanding it to repeat buyers Senators agreed Wednesday to extend a popular tax credit for first-time homebuyers and to offer a reduced credit to some repeat buyers. The tax credit provides up to $8,000 to first-time homebuyers but is set to expire at the end of November. The Commerce Department said Wednesday that new home sales fell 3.6 percent in September, and some industry representatives blamed uncertainty about the tax credit. Senators agreed to extend the existing tax credit for first-time homebuyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years, said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev.
New home sales fall a surprising 3.6 percent September new US home sales post surprise drop as benefit of first-time buyer tax credit wanes Sales of new U.S. homes dropped unexpectedly last month as the effects of a temporary tax credit for first-time owners started to wane. The Commerce Department said Wednesday that sales fell 3.6 percent to a seasonally adjusted annual rate of 402,000 from a downwardly revised 417,000 in August. Economists surveyed by Thomson Reuters had expected a pace of 440,000. It was the first decline since March. Sales in September were off 7.8 percent from a year ago. Despite the surprising decline, the market is up 22 percent from the bottom in January, though down more than 70 percent from the peak in July 2005.
MAX KEISER in Fall of the Republic the Presidency of Barack Obama - all of Max Keiser's clip taken from Fall of the Republic the Presidency of Barack Obama released on October 21st 2009
China to pursue trade case against US automakers China to launch investigation that could result in higher tariffs on US autos China has told the U.S. that it will take steps that could lead to higher tariffs on imports of autos made by GM, Chrysler and Ford. Steve Collins, president of industry trade group the American Automotive Policy Council, said Wednesday that U.S. officials have told the three Detroit automakers that China is expected to begin an investigation under anti-dumping laws into their business practices as soon as next week.
China to launch case against U.S. Big Three automakers China has told the United States that it plans to formally launch an investigation that could lead to new import duties on autos and sports utility vehicles made by Chrysler, Ford and General Motors, a U.S. industry official said on Wednesday. "The documents containing the charges were presented by China to the U.S. government this week, but have not yet been translated. Therefore we are not in a position to comment on the matter at this time," Steve Collins, president of the American Automotive Policy Council, told Reuters.
Treasury, GMAC in talks for 3rd round of US aid Treasury says auto lender GMAC in talks for billions more in taxpayer funds to boost capital GMAC, the former lending arm of General Motors Co., is in talks with the Treasury Department for a third injection of taxpayer aid, a further sign of the U.S. government's entrenchment in the auto industry. The government mandated earlier this year that GMAC Financial Services raise an additional $11.5 billion in capital by early November after undergoing a "stress test" along with 18 other banks. While other banks deemed undercapitalized have been able to raise funds from private investors, GMAC has been forced to go back to the government.
Cash for Clunkers: Good for dealers, automakers, bad for taxpayers Car sales and research site Edmunds.com estimated today that each new car sold under the Cash for Clunkers government subsidy program cost the American taxpayers more than $24,000. Edmunds estimated that 82 percent of vehicle sales during the program would have happened anyway (then or at some point in the near future), so the program only enticed about 18 percent of the buyers who participated in the program, which moved 690,000 new vehicles off the lots of very relieved dealers.
Revelations of the Swine Flu and Forced Vaccinations - Just Say No to the Vaccine
WHO memos 1972 explains how to turn vaccines into a means of killing Two key memorandums from WHO, discovered by Patrick Jordan, prove WHO has intentionally created the three-shot killer vaccine that people in the USA and other countries could soon be forced to take. 1972 WHO Bulletin 47, No 2 Memordanda #1 and #2 Virus-associated immunopathology: Animal models and implications for human disease * technically outline the ability to create biological weapons in the form of vaccines that:
First totally disable the Immune System.
Load every cell of the Victim’s body up with Infection.
Switch the Immune System on causing the host to kill themselves in a Cytokine Storm.
One, Two, Three, Dead. These WHO Memorandas describe the three-stage impact of the three "shots" many people will be forced to take this fall to allegedly treat a virus that WHO also helped create and release.
House to unveil health bill Thursday House Democrats plan to release their health care reform bill Thursday after reaching agreement within their party on how to structure the government-run insurance program. A ceremony is planned for outside the Capitol to release the legislation, which would dramatically alter the nation's health care system. The House and Senate reform bills would create a national health insurance program, but the Senate plan would allow states to "opt out" of the program. Both chambers could begin debate on their bills as soon as late next week.
Joe Lieberman: I'll block vote on Harry Reid's plan Sen. Joe Lieberman (I-Conn.) said Tuesday that he’d back a GOP filibuster of Senate Majority Leader Harry Reid’s health care reform bill. Lieberman, who caucuses with Democrats and is positioning himself as a fiscal hawk on the issue, said he opposes any health care bill that includes a government-run insurance program — even if it includes a provision allowing states to opt out of the program, as Reid has said the Senate bill will. "We're trying to do too much at once," Lieberman said. “To put this government-created insurance company on top of everything else is just asking for trouble for the taxpayers, for the premium payers and for the national debt. I don’t think we need it now."
Amendment Would Let Kansas Opt Out of Potential Health Reforms Kansas Senator Mary Pilcher-Cook of Shawnee, along with colleagues in the Kansas House from Wichita and Emporia, is planning an attempt to amend the Kansas Constitution, should Congress pass health reforms that mandate everyone carry health insurance. The amendment would allow the state to basically opt-out of such legislation. Cook tells KMBZ it would need the support of two-thirds of lawmakers, and then a thumbs up from the Kansas people on the 2010 ballot.
Big U.S. companies balk at healthcare public option Some of the nation's largest companies pushed back against U.S. Democrats' plans to deliver a government-run insurance option in a healthcare overhaul, decrying it as a step backward that would drive up costs for employers and their workers. The Business Roundtable, comprised of chief executives at Verizon Communications, JPMorgan, General Electric, Wal-Mart and other companies that together employ more than 12 million people, said the federal government is inefficient and would underpay providers. That would result in providers boosting prices for private insurers and employers, the group said on Wednesday.
Centrists unsure about Reid's public option Citing principle and pragmatism, moderate Democrats stay on fence Senate Majority Leader Harry M. Reid's risky decision to bring to the chamber's floor a health-care bill containing a government insurance plan was met with skepticism by moderate Democrats, who said they still do not know whether they could support a public option on a final vote. The latest challenge to the Nevada Democrat's move came from Sen. Joseph I. Lieberman (I-Conn.), who told reporters that he was "inclined to support" a procedural motion to bring the measure to the floor. But he remains opposed to a government-run insurance plan in any form -- even with an "opt-out" provision for states that Reid said Monday he will include in the legislation.
Sean Hannity And Sen. John McCain On Public Option "Opt-Out" Plan
A good time to be a conservative Bien-pensant conservative elites and establishment-friendly Republican big shots yearn for a more moderate, temperate and sophisticated Republican Party. It's not likely to happen. And probably just as well. The Gallup poll released Monday shows the public's conservatism at a high-water mark. Some 40 percent of Americans call themselves conservative, compared with 36 percent who self-describe as moderates and 20 percent as liberals. The conservative number is as high as it's been in the two decades that Gallup has been asking the question.
Lou Dobbs: U.N. Push For "Climate Change" Stalls
Afghan, Pakistan carnage raises heat on Obama Carnage in Pakistan and America's bloodiest month in Afghanistan are sharpening President Barack Obama's dilemma on troop deployments while stoking political demands for swifter action. "We watch this situation continue to deteriorate while this long protracted process of decision making goes on," Republican Senator John McCain told CBS on Wednesday.
U.S., China trade talks precede visit by Obama HANGZHOU, China (AP) | U.S. officials will raise perennial trade issues, including copyright piracy and Chinese restrictions on U.S. farm products, in talks Thursday that are expected to reduce frictions ahead of President Obama's first visit to China. Before the annual talks, held in the eastern Chinese city of Hangzhou, U.S. Commerce Secretary Gary Locke said he hoped for progress on protecting intellectual property, clean energy, medical devices and pharmaceuticals -- the sorts of nuts-and-bolts issues the gathering will focus on.
Bill O'Reilly: "Will Afghanistan Be President Obama's Waterloo?"
Coming in December: World government It is impossible to overstate the importance of the climate-change treaty now being negotiated for adoption at the Copenhagen, Denmark, U.N. meeting in December. The Kyoto Protocol was bad enough. It required the United States to reduce its carbon emissions 7 percent below 1990 levels by 2012. When fully implemented, the Kyoto target was supposed to reduce global carbon emissions by 5.2 percent. Thanks to George W. Bush, the U.S. did not participate in the Kyoto accord. According to the World Bank, global emissions have risen by 19 percent since 1990. U.S. emissions have risen 20 percent since 1990. India's and China's emissions have risen by 88 percent and 73 percent respectively. Neither of these countries was bound by the Kyoto Protocol. The new treaty now under negotiation seeks to impose an emissions reduction requirement on developed countries of as much as 45 percent below 1990 levels by 2017, and by as much as 95 percent by 2050. (Read paragraph 31 on page 16 of the 181-page negotiating text). These numbers are completely ridiculous; compliance would require a return to the Stone Age.
Celente: Wall Street has hijacked Washington DC Although Wall Street seems to be optimistic about economic recovery in the near future, economists like George Soros and Gerald Celente warn that things could only get worse in the future. Celente calls the U.S. economic system 'perverted.' RT's Dina Gusovsky gets more details from Celente.
Gold steady as dollar takes a breather Some analysts see a correction to the $1,025-$1,030 level before further move upwards Gold steadied above $1,040 per ounce on Tuesday as a rally in the dollar paused, soothing concern among investors who rushed to sell the precious metal the previous day on a jump in the greenback from a 14-month low versus the euro. As of 0310 GMT, spot gold XAU= was up 0.4% at $1,041.60 an ounce from New York's notional close of $1,037.10. Bullion hit a low of $1,036 earlier on Tuesday, its lowest price since Oct. 6, as it fell about 3 percent from a record high above $1,070 hit on Oct. 14. Gold has rallied in the last two months as the dollar steadily weakened, making bullion cheaper for non-dollar holders and boosting investor interest in gold as a hedge.
Gold over $1000 and still no gold bubble For the past ten years we could run ourselves ragged trying to counter the gold disinformation machine. . . . . . . . Gold does not rise in response to future inflation fears but in response to currency risk. As the risk to the dollar has risen every year since 1998, so has gold; the greater the risk, the greater the rise.
Gold Blast-Off Starts Friday? There are two significant events this week that could exert pressure for higher gold prices. Because of this, I expect to see major behind-the-scenes actions to try to suppress gold (and silver) prices until the middle of Thursday afternoon. First, the U.S. government’s Treasury debt auctions will sell the greatest amount of debt ever sold in one week. The net debt increase of $153 billion is so high it will exceed the current authorized federal debt limit. Flooding the financial markets with so much debt is a sign of weakness for the U.S. dollar. As the dollars declines in value, the price of gold in U.S. dollars invariably rises.
How High Could Gold Go? Not 'How High Will Gold Go?'. Nobody knows for sure. Anyone who says they know is a fool, has inside (illegal) information, or has a hidden agenda. The answer is not knowable as the future is uncertain. However, we can make inferences and educated guesses by looking at the past and surveying the present. After all, history tends to rhyme and there is nothing new under the sun. . . . . . . . . The world is currently in the midst of a bull market in precious metals. Gold has been in a bull market in US$ terms since at least 2001 (as has silver). Even better, this bull has not been limited to the U.S., but is present in all major world currencies, and seems likely to continue for some time. The reasons are manifold: Currency debasement, Economic uncertainty, Decreased mine supply, Central Bank net buying, Geopolitical concerns. One could write a book, really.
Gold, Exchange Rates and the London Fixing. The Gold Price and non-U.S. $ Gold prices While the rise in the $ price of gold has been sound, without being spectacular [the rise of late has only been around 10% over the average of the last 18 months], it has barely moved in many currencies. With South Africa, as one of the leading gold producer’s currencies, the Rand, the gold price has hardly moved, while gold investors there have steadily built up their holdings. In that period the Rand has strengthened from a low point of around R10: U.S. $1 [October 2008], to R7.4: $1, sucking out all the benefits of a $ rise in the gold price.
Gold Declines on Concern Rising Dollar May Erode Metal Demand Gold fell for a fourth straight session, the longest slide since August, amid concern that the dollar will extend a rally, curbing demand for the precious metal as an alternative asset. The dollar rose against a basket of six major currencies, adding to three consecutive advances since Oct. 21, when it touched a 14-month low. Gold, which often moves inversely to the greenback, has dropped 2.7 percent in the past four sessions. “Gold doesn’t have that much buying interest,” said Matt Zeman, a LaSalle Futures Group Inc. metals trader in Chicago. “The dollar could undergo a wicked short-covering rally, and the gold market needs to look out below.”
Gold Neckline Play. Easy on The Trampoline All hail the regulators. They've done it again. The banksters are masters at directing the public's anger at a red herring, while they operate a vastly larger robbery elsewhere. An example is bank manager salaries. The public is focused on those salaries, not on the trillions of dollars that have simply disappeared after being handed to the banksters, printed money now, to be paid in real money by your great grandchildren over the next 100 years. Should any taxpayer refuse to pay his share to the banksters, it's "hi ho hi ho off to the clink you go."
Russia scraps gold sales plan for 2009 We can dwell on yesterday's happenings after we take a quick scan of the markets as they stand on this crisp Tuesday morning. Gold, still nervous, and still trading at under the $1040 level (namely, at $1038.00) - trying really to get up off the floor and dust itself off. Silver, down another 10 cents, breaking the $17 level, also still hoping for a recovery, following its worst drop in a month. Platinum and palladium, down a bit more. The former, at $1325, the latter at $327. The dollar, off a tiny fraction, but still orbiting very near the 76-mark on the index. Oil, up a third of a dollar, but not looking very strong.
Gold rides emotional wave, to stay above $1000 What is happening to gold? Is every investor in the world buying gold dumping equity and other commodities? Why the mad rush to buy gold even at a rate above $1000 per ounce? These are questions that haunt market analysts for the past one year. Still there seems no end to the crave for gold among buyers. Indians, who normally stay away from gold when the prices are above Rs 15,000 per 10 gm, bought 56 tonnes of gold during the Diwali week, throwing recession blues to the wind.
Factors converge for possible run on gold Rob Kirby of Kirby Analytics in Toronto has reported details of a recent “run on the bank” in the London Bullion Market Association Gold Exchange. The London Bullion Market is the world’s largest gold exchange with daily turnover now running almost equal to a year’s global gold mine output. Since this market theoretically is trading contracts for actual delivery of physical metal, gold sellers are supposed to be ready to deliver the real thing and not paper.
How to effectively play the Gold/Silver ratio Whether you're a gold bug or a silver buff, you've been a happy camper so far in 2009. As of Friday's close, gold was at $1,056.40, up 20 percent year-to-date. Silver has done even better; it was up 56 percent to settle at $17.723. The upward trend has many investors going long in both metals, but there's more you can do with gold and silver than just buy and hold. You can also play the two metals off one another—but to do it successfully, you must first understand the ever-changing gold/silver ratio.
Silver to soar above $20? In the melee over gold, silver is being ignored by several investors. This fact has now come to light and many people are slowly showing interest in putting their money in silver which is giving big returns for the past few months. The silver spot price had touched $17.80 an ounce before dropping to $17.10 on Monday. According to analysts, this was a long-awaited correction in silver prices. Silver has been tracking gold’s rally on an ever-weakening dollar. And the downward pressure on dollar is expected to continue as long as the Fed keeps up its low-interest rate.
When Will Inflation Really Hit Us? Most of us are gathered at the station, watching for the Inflation Express to come rumbling in. But we've been waiting for a while now. Just when should we expect the big locomotive to arrive and start pushing the prices of most things uphill? We'd all like to know the exact date, of course, but no one can know for sure. Not even a careful reading of the Mayan calendar will help. What we can do is estimate a time range for price inflation to show up, and that alone should have some important implications for investment decisions.
U.S. stock market closely tracking moves of dollar Some analysts believe relationship will persist until Fed raises rates The U.S. stock market is paying more attention than usual to the movements of the U.S. dollar, with the greenback's newfound status as a funding currency leaving its moves highly correlated to equities and other riskier assets. Since the S&P 500 (SPX 1,063, -3.54, -0.33%) hit a low in early March, the index of large-cap stocks has jumped nearly 60%. The U.S. dollar has moved in the opposite direction, falling 15%. "We expect the relationship between the movement in the dollar and stock prices to continue for several more months until the Fed actually steps in and begins to lift short-term interest rates," said Fred Dickson, chief market strategist at Davidson Companies
The US Dollar Rally of 2008: The Consequence of a Bull Market in Fraud The theory of a short squeeze in Eurodollars which we had first put forward last year "The Dollar Rally and Deflationary Imbalances in the US Dollar Holdings of Overseas Banks" seems to be confirmed by this paper from the NY Federal Reserve bank, and the latest figures on cross border currency transactions from the BIS. "Highlighting the international dimensions of the financial crisis that began in the fall of 2007, authors Niall Coffey, Warren B. Hrung, Hoai-Luu Nguyen and Asani Sarkar examine the difficulties international firms encountered obtaining U.S. dollars and the ensuing effects on the foreign exchange (FX) swap market. Analysis shows that as firms increasingly turned to the FX swap market to obtain funding, the dollar "basis"-the premium paid for dollar funding-became persistently large and positive, primarily as a result of higher funding costs paid by smaller firms and non-U.S. banks." The Global Financial Crisis and Offshore Dollar Markets
USD Wobbles on Chinese Currency Diversification Concerns Gold fell yesterday as oil prices and equities came under pressure and the dollar rose. The dollar has fallen marginally today after the People's Bank of China said that while the dollar may remain dominant, the share of the euro and the yen should increase in its foreign exchange reserves. Diversification of China's nearly $2.3 trillion stockpile of foreign exchange reserves is a long-standing policy that aims to avoid short-term volatility, a senior central banker said. Officials in the People's Bank of China recently stated that they were increasing their gold reserves which currently constitute just some 2% of their entire foreign exchange reserves.
Marc Faber Dollar will become wall paper
Dollar turns mixed as uneasy consumers send investors reaching for safety Poor reading on US consumers props dollar The dollar was choppy in Tuesday trading after a report showed consumers' confidence dropping this month, raising doubts about the vitality of the economy's recovery. The 16-nation euro dropped to $1.4812 in morning New York trading from $1.4859 late Monday. Meanwhile, the British pound rose to $1.6314 from $1.6303. The dollar fell to 92.13 Japanese yen from 92.21 yen. The dollar had been weaker in overnight trading in Asia and Europe before the release of this morning's report from the Conference Board on consumers' sentiment. The Consumer Confidence Index dropped to 47.7 in October, the second-lowest reading since May.
The Global Financial Crisis and Offshore Dollar Markets The Federal Reserve Bank of New York today released The Global Financial Crisis and Offshore Dollar Markets, the latest article in its series Current Issues in Economics and Finance. Highlighting the international dimensions of the financial crisis that began in the fall of 2007, authors Niall Coffey, Warren B. Hrung, Hoai-Luu Nguyen and Asani Sarkar examine the difficulties international firms encountered obtaining U.S. dollars and the ensuing effects on the foreign exchange (FX) swap market. Analysis shows that as firms increasingly turned to the FX swap market to obtain funding, the dollar "basis"-the premium paid for dollar funding-became persistently large and positive, primarily as a result of higher funding costs paid by smaller firms and non-U.S. banks.
Abolishing Risk Destroys America and Your Wealth Our willingness to engage in risks drives our prosperity. We urgently need a public debate on risk, one driven by reason, not emotion. Without risk, individuals are bound to lose the purchasing power of their savings; corporations that don’t take risk will fade into oblivion; and governments that regulate away risks destroy the growth engine of their nation. The U.S. is the most prosperous nation because it has embraced risk taking. Silicon Valley has created some of the greatest innovation because it has been a magnet for entrepreneurs. When we evaluate our love-hate relationship with investment banks, let’s not forget that as one of their key roles, they facilitate the aggregation and deployment of risk takers’ capital. When policy makers interfere with crucial elements of the American growth engine, we all deserve a broad debate on the subject.
Economy is kick-started, but can it motor ahead? Over the past year, the U.S. government has thrown almost every tool at its disposal toward making the economy grow again. And it has worked, at least for now. The trillion-dollar question for the economy now is: What will happen when those government supports are gone? While the government has successfully jump-started the U.S. economy, there are emerging signs that its engine still isn't running very well, and may even sputter out.
Commerzbank Says Too Early to Call End of Dollar-Weakness Trend The dollar’s gains yesterday are unlikely to signal the end of the U.S. currency’s depreciating trend, according to Commerzbank AG. “It would probably be premature to call this the end of the dollar’s weakness,” a team led by Ulrich Leuchtmann in Frankfurt wrote in a report today. “It remains under pressure due to the low interest rates and the resulting attractiveness as a financing currency for carry trades.”
Today in Commodities: U.S. Dollar on the Doorstep If the dollar does in fact rally and this is not another head fake expect a wash out. Oil made a new low but buyers came in, tomorrow’s inventory report will be the “X” factor. We’re still expecting a sell off to $75ish but will need some help from the dollar. A falling stock market would also help as the correlation is strong.
Roubini Says Dollar-Funded Carry Trades Are Fueling ‘Huge’ Asset Bubble Investors worldwide are borrowing dollars to buy assets including equities and commodities, fueling “huge” bubbles that may spark another financial crisis, said New York University professor Nouriel Roubini. “We have the mother of all carry trades,” Roubini, who predicted the banking crisis that spurred more than $1.6 trillion of asset writedowns and credit losses at financial companies worldwide since 2007, said via satellite to a conference in Cape Town, South Africa. “Everybody’s playing the same game and this game is becoming dangerous.”
Will a Dollar Rally Stop the Asset Reflation Story? It's so amazing how the rally we've seen in stocks, commodities, emerging market assets and gold are all dependent on a single factor: the US dollar weakness. I mean, it has been a no-brainer. US dollar down, bonds down, everything else up. Now with the dollar index rallying 0.70% last night, voila! We had this massive reversal in stocks, gold and commodities. Now with so much of the asset reflation story hinged on just this one phenomenon, could a rally in the US dollar force a massive unwinding of trades in the related assets?
Dimon defends dollar -- and JPMorgan The chief executive officer of JPMorgan Chase said the U.S. needs a strong dollar and that job creation is key to a rebound; also says his bank is not 'too big to fail.' JPMorgan Chase chief executive officer defended the dollar -- and the size of his company -- at a securities industry conference Tuesday. "The ultimate strength of the dollar will depend on the strength of the United States," Dimon said. Dimon discussed the dollar and other key financial topics with PBS host Charlie Rose as part of the Securities Industry and Financial Markets Association (SIFMA) annual meeting held in New York.
House to take on 'too big to fail' On Thursday, House lawmakers will start thinking about shaping bills that would prevent future financial crisis. But creating such power comes with risks One year after risky practices by the nation's biggest banks almost brought down the economy, many of those institutions are even bigger -- and some say even riskier. This week, a key committee is set to release legislation that finally addresses the issue, according to House aides. The legislation, from the House Financial Services Committee, would aim to better watch and take over those institutions currently deemed "too big to fail."
What is Money? Money is primarily a medium of exchange or means of exchange. It is a way for a person to trade what he has for what he wants. Ideal money serves three critical functions: it acts as a medium of exchange; a store of value; and a means of economic calculation. Medium of Exchange To properly understand money as a medium of exchange one must first go back to the first methods of trade. Before money was invented one would have to engage in direct barter. A farmer who produced grain – but wanted shoes for his family – would have to find someone who, a) had shoes and, b) wanted grain. You can imagine the difficulty involved in finding that perfect someone who had what the farmer wanted and wanted what the farmer had.
Most U.S. Stocks Retreat on Bond Auction, Consumer Confidence Most U.S. stocks fell for a third day as stronger-than-forecast demand in a Treasury auction and an unexpected drop in consumer confidence spurred concern investors are questioning the strength of the economic recovery. Alcoa Inc., Walt Disney Co. and Hewlett-Packard Co. lost at least 1.1 percent after the Conference Board’s gauge of sentiment trailed estimates and its measure of employment availability slumped to a 26-year low. International Business Machines Corp. helped lead the market higher earlier after its board approved $5 billion in buyback funds. Treasuries rose following the record $44 billion auction of two-year notes.
Wall Street plays new game of risk Banks, emerging markets and techs are on fire. And while there are some signs of economic improvement, some worry that it's not enough to sustain the rally. Hey there risk. Welcome back. What's shaking? Banks and other financial stocks have soared this year and have helped lift the broader market. Shares of top Internet companies are surging too. And while some of them appear to be reasonably valued -- if not necessarily cheap -- the fact that the dot-coms are on the march again is clearly a sign that investors have regained their appetite for riskier assets.
Bank protesters descend on downtown Chicago Angenita Tanner, a 45-year-old owner of a day care center, said that times are so tough that her customers have begun paying with food instead of money. "Everything's in limbo," said Tanner, who lives in Chicago's Woodlawn neighborhood. "It just seems like everyone is struggling." Tanner this morning joined about 3,000 people in downtown Chicago to protest the American Bankers Association convention. The event, organized by a host of unions, human rights and advocacy groups, is part of a series of protests aimed at bankers and congressmen who are trying to prevent financial reform. On Sunday, protesters tried unsuccessfully to crash the convention's opening reception.
Dismantling America By Thomas Sowell Just one year ago, would you have believed that an unelected government official, not even a Cabinet member confirmed by the Senate but simply one of the many "czars" appointed by the President, could arbitrarily cut the pay of executives in private businesses by 50 percent or 90 percent? Did you think that another "czar" would be talking about restricting talk radio? That there would be plans afloat to subsidize newspapers-- that is, to create a situation where some newspapers' survival would depend on the government liking what they publish? Did you imagine that anyone would even be talking about having a panel of so-called "experts" deciding who could and could not get life-saving medical treatments?
Death of 'Soul of Capitalism': Bogle, Faber, Moore 20 reasons America has lost its soul and collapse is inevitable Jack Bogle published "The Battle for the Soul of Capitalism" four years ago. The battle's over. The sequel should be titled: "Capitalism Died a Lost Soul." Worse, we've lost "America's Soul." And, worldwide, the consequences will be catastrophic. That's why a man like Hong Kong contrarian economist Marc Faber warns in his Doom, Boom & Gloom Report: "The future will be a total disaster, with a collapse of our capitalistic system as we know it today."
Regulators Prepare for the Next 'Big One' Global economic policy makers are just beginning to grapple with a key issue rising out of last year's bankruptcy of Lehman Brothers Holdings: how to react if -- or when -- the next big global bank spins out of control. While the furor over bankers' bonuses has captured most of the headlines, policy makers are in the process of assigning each of the world's 25 most complex international banks to a multinational crisis-management team to draw up contingency plans if they run into trouble. But remarks from current and former officials underscore the major challenges such an effort will face. At the heart of the problem, said Harvey Pitt, who chaired the U.S. Securities and Exchange Commission from 2001 to 2003, are "fundamental concerns about sovereignty."
Bill in works to let U.S. dissolve [non-financial] failing firms Intent is to avoid bailouts 'No taxpayer money' would be spent House Democrats and the Obama administration are preparing to introduce major legislation aimed at eliminating the devil's choice the government faced last fall, when officials felt forced to decide between spending billions of dollars to rescue some of the nation's most powerful financial firms or letting their failures sink the economy.
Obama financial reforms advance in Congress The Obama administration made gains on Tuesday in its push for U.S. financial reform, unveiling a landmark bill to tackle systemic risk in the economy and winning congressional committee approval for a measure to expose hedge funds to more government scrutiny. The systemic risk bill would grant vast powers to a new systemic risk regulatory council, the Federal Reserve and the Federal Deposit Insurance Corp to monitor and address risks to economic stability posed by shaky financial holding companies.
Tim Geithner's $14 Billion Gift of Taxpayer Funds to Goldman Sachs: Crisis Profiteering? Tim Geithner should be given the option to resign immediately, or be fired. He is either incompetent, too conflicted to do his job with the banks properly, or possibly both. Stephen Friedman should be investigated for $5.4 million in profits made through potential insider trading. His breach of fiduciary responsibility as chairman of the NY Fed is shocking.
Financial regulation fight is a "just war": Geithner Treasury Secretary Timothy Geithner on Tuesday told a packed room of Wall Street dealers and bankers they could not look America in the eye and argue that financial regulation is fine as it is. Geithner said the financial system was tragically fragile after experiencing the worst crisis since the 1930s, and the government must respond by adding new regulation as well as improving on current ones.
House Bill Would Charge Biggest Firms for Resolution A U.S. House committee is calling for financial firms with more than $10 billion in assets to pay the costs after the government takes over companies deemed too big to fail, according to draft legislation released today. The House Financial Services Committee measure lays out rules for dealing with institutions whose collapse would pose risks to the financial system. The bill is a compromise worked out by the Treasury Department and the panel’s Democratic chairman, Barney Frank of Massachusetts.
New York Fed's Secret Decision on AIG Swaps Cost Americans $13 Billion In the months leading up to the September 2008 collapse of giant insurer American International Group Inc., Elias Habayeb and his colleagues worked nights and weekends negotiating with banks that had bought $62 billion of credit-default swaps from AIG, according to a person who has worked with Habayeb. Habayeb, 37, was chief financial officer for the AIG division that oversaw AIG Financial Products, the unit that had sold the swaps to the banks. One of his goals was to persuade the banks to accept discounts of as much as 40 cents on the dollar, according to people familiar with the matter.
Treasuries Rise as 2-Year Sale Draws Most Demand in Two Years Treasuries rallied as a record $44 billion sale of two-year notes drew the strongest demand since the financial crisis began and a report showed confidence among U.S. consumers unexpectedly fell this month. Two-year note yields declined as much as 10 basis points, the most on an intraday basis since June 9. The auction drew a bid-to-cover ratio, which gauges demand by comparing total bids with the amount of securities offered, of 3.63. That’s the most since August 2007 and the second-highest since at least 1992. An investor class that includes foreign central banks purchased 44.5 percent of the securities, versus an average of 42.6 percent for the past 10 sales.
Pellegrini Says Shorting U.S Debt ‘Attractive Bet’ Paolo Pellegrini, the former Paulson & Co. hedge-fund manager who helped make more than $3 billion with bets on a U.S. housing crash, said shorting long-term U.S. debt is the “only attractive bet” for investors. “I always like to think about assets that are likely to experience a breakdown; the only thing I’m pretty comfortable with right now is U.S. Treasury securities and U.S. agency mortgage-backed securities,” he said in a telephone interview from Beijing today. “I think that those are overpriced so they are attractive shorts.”
Valero to Shut Delaware, Louisiana Plants for Repairs Valero Energy Corp., the largest U.S. refiner, said it will shut its Delaware refinery in November for repairs and its Norco, Louisiana, plant in January for planned work. “It’s more cost-effective” to shut a refinery when repairing major processing units, Bill Day, a company spokesman, said in an interview. Four other refineries will undergo planned repairs, Day said in releasing a maintenance schedule for the fourth quarter and the first quarter of 2010. The Delaware refinery will shut in November for 52 days to repair the 81,000-barrel-a-day fluid catalytic cracker and alkylation unit. The plant shut a coker and gasifier this month and is cutting jobs as Valero seeks strategic alternatives for the money-losing operation, including a possible sale.
House Bill Would Charge Biggest Firms for Resolution Biggest Banks Would Bear Bulk of Future Bailout Costs Under House Plan A U.S. House committee is calling for financial firms with more than $10 billion in assets to pay the costs after the government takes over companies deemed too big to fail, according to draft legislation released today. The House Financial Services Committee measure lays out rules for dealing with institutions whose collapse would pose risks to the financial system. The bill is a compromise worked out by the Treasury Department and the panel’s Democratic chairman, Barney Frank of Massachusetts.
Civilization at the Crossroads In our last letter we stated that, "American capitalism ended in 1913 and remains "An Unknown Ideal." We also commented that, "A troubling question arises: Has the financial community hijacked government?" We are going to discuss those issues in an historical and philosophical context. We all today live in a twilight zone where things seemingly are and yet aren't. We must travel down some roads, which are troubling and rather dark. But, it is necessary, because it is today's reality. We can say at the start that you will find the trip unbelievable - I know I did when I first stumbled down this path. Matter of fact, at first I totally dismissed it as absolute insanity and therefore not possible. For, it was inconceivable that the morality of man could descend to such naked malevolence.
U.S. Economy: Consumer Confidence Down on Job Concern Confidence among U.S. consumers unexpectedly fell for a second month in October, reinforcing the views of Federal Reserve policy makers who say household spending will be restrained by rising unemployment. The Conference Board’s confidence index dropped to 47.7, trailing the lowest economist forecast, from a revised 53.4 in September, a report from the New York-based private research group showed today. A measure of employment availability slid to a 26-year low.
Gloom Spreads on Economy, but GOP Doesn't Gain Americans are growing increasingly pessimistic about the economy after a mild upswing of attitudes in September. But Republicans haven't been able to profit politically from the economic gloom, according to a new Wall Street Journal/NBC News poll. The survey found a country in a decidedly negative mood, nearly a year after the election of President Barack Obama. For the first time during the Obama presidency, a majority of Americans sees the country as being on the wrong track.
Consumers: Current economy at 26-year low Conference Board's reading of consumer confidence falls in October, surprising economists. A key measure of consumer confidence continued to slip in October, with consumers' gauge of the current economic situation falling to a 26-year low, a research group said Tuesday. The Conference Board, the New York-based research group said its Consumer Confidence Index fell to 47.7 in October from an upwardly revised 53.4 in September. Economists were expecting the index to increase to 53.5, according to a Briefing.com consensus survey. The figure, which is based on a survey of 5,000 U.S. households, is closely watched because consumer spending makes up two-thirds of the nation's economic activity.
IRS to rich tax cheats: Be afraid. Be very afraid. Internal Revenue Service ramps up efforts to target international tax dodgers worth $30 million or more. The Internal Revenue Service detailed plans on Monday to weed out wealthy, international tax cheats with renewed urgency. IRS Commissioner Douglas Shulman said the agency recently formed the Global High Wealth Industry task force to target investors with assets "in the neighborhood of $30 million." Shulman, as he addressed members of the American Institute of Certified Public Accountants in Washington, DC., said that a more "holistic" approach was necessary to find international tax cheats, given the growth in Americans investing overseas, and the broad and complicated nature of modern financing.
Net neutrality is far from neutral Access to the internet is not a right – it's a commercial business. Governments seem to have forgotten that fact When the internet first came into existence 40 years ago, it was a tool used by researchers who wanted to collaborate and share information with their colleagues, and commercial interests had nothing to do with it. Now, however, the internet is filled with behind-the-scenes, pay-per-ranking, prioritised content with premium services that are spooned out to the consumer in bite-sized pieces by powerful content-providing companies.
Obama Announces $3.4 Billion in ‘Smart-Grid’ Grants President Barack Obama today announced $3.4 billion in government grants to improve the efficiency of the nation’s electrical transmission network. “We are making the largest-ever investment in a smarter, stronger and more secure electric grid,” while boosting a “clean-energy economy,” Obama said in Arcadia, Florida, at one of the nation’s largest solar-power generating facilities.
Treasury, GMAC in talks for 3rd round of US aid Treasury says auto lender GMAC in talks for billions more in taxpayer funds to boost capital GMAC Financial Services is in talks with the Treasury Department for a third injection of taxpayer aid as the auto lender faces a November deadline to raise the $11.5 billion capital cushion mandated by results of the government's "stress test" earlier this year. A Treasury Department spokesman confirmed Tuesday that GMAC is in discussions about securing additional government help. Of the 19 banks that underwent the government's stress tests, 10 were determined to be undercapitalized. GMAC is the only one of those to not have been able to raise all of its necessary capital from investors.
GMAC Asks for Fresh Lifeline Lender in Advanced Talks for Third Slug of Taxpayer Cash -- at Least $2.8 Billion More In a stark reminder of how some battered financial firms remain dependent on government lifelines, GMAC Financial Services Inc. and the Treasury Department are in advanced talks to prop up the lender with its third helping of taxpayer money, people familiar with the matter said. The U.S. government is likely to inject $2.8 billion to $5.6 billion of capital into the Detroit company, on top of the $12.5 billion that GMAC has received since December 2008, these people said. The latest infusion would come in the form of preferred stock. The government's 35.4% stake in the company could increase if existing shares eventually are converted into common equity.
A maker of electric cars plans to use old GM plant in Delaware California-based Fisker is poised to revamp Wilmington factory The White House is expected to announce Tuesday a multimillion-dollar deal that will convert a closed General Motors plant in Wilmington, Del., into a factory making electric vehicles. Vice President Biden will make the announcement that Fisker Automotive of Irvine, Calif., is expected to invest $175 million to retool the plant. Fisker, which will pay the old GM $18 million for the facility and equipment, is getting tax incentives from the state of Delaware, although officials there declined Monday to say how much.
Obama Risks a Domestic Military 'Intervention' There is a remote, although gaining, possibility America's military will intervene as a last resort to resolve the "Obama problem." Don't dismiss it as unrealistic. America isn't the Third World. If a military coup does occur here it will be civilized. That it has never happened doesn't mean it wont. Describing what may be afoot is not to advocate it. So, view the following through military eyes: Officers swear to "support and defend the Constitution of the United States against all enemies, foreign and domestic." Unlike enlisted personnel, they do not swear to "obey the orders of the president of the United States." Top military officers can see the Constitution they are sworn to defend being trampled as American institutions and enterprises are nationalized. They can see that Americans are increasingly alarmed that this nation, under President Barack Obama, may not even be recognizable as America by the 2012 election, in which he will surely seek continuation in office.
Deal-Breaker for Climate-Change Treaty May Be U.S. When Barack Obama was elected president, he was heralded as a possible savior for climate- treaty talks that had dragged on for years while George W. Bush rejected limits on U.S. greenhouse-gas emissions. “America is back” at the United Nations negotiating table, Democratic Senator John Kerry declared after the November election. Danish climate minister Connie Hedegaard said U.S. emissions policy moved forward 35 years overnight.
President Obama 'still undecided' about attending Copenhagen climate conference The White House yesterday kept alive campaigners’ hopes that President Obama could travel to the UN climate change summit in Copenhagen despite the slim chances of a comprehensive deal being signed there. Responding to a report in The Times that a presidential appearance was highly unlikely given the obstacles to a breakthrough at the meeting, an Administration spokesman insisted that “no decision has been made”.
Britain needs to learn to love Latin America again Latin America was an integral part of the British mercantile system in the 19th Century. Argentina was known as the honorary Spanish-speaking member of the imperial family. Harrods opened its only foreign branch in Buenos Aires. LATIN America was an integral part of the British mercantile system in the 19th Century. Argentina was known as the honorary Spanish-speaking member of the imperial family. Harrods opened its only foreign branch in Buenos Aires. Divorce came in the 1930s and 1940s as populist governments turned inwards. With a few shining exceptions, British companies have largely shunned Latin America ever since. The perception has lingered that the region is run by colonels, and prone to episodic debt crises. This caricature is a quarter century out of date.
63 Per Cent of Americans Thinks Obama Has No Clear Plan for Afghanistan According to U.S. military officials a series of powerful bombs killed eight American soldiers and an interpreter in southern Afghanistan Tuesday morning. The attacks, a day after 14 Americans died in two helicopter crashes, made October the deadliest month for the U.S. military of the eight-year Afghanistan war. The growing violence -- along with continued political turmoil in Afghanistan -- will likely be a factor in the Obama administration's deliberations over its war strategy.
- - - - - - - - - - - - - - - - Archived Page Link
- - - - - - - - - - - - - - - -
Tues 10.27.2009
Dollar Rises as Euro Fails to Surpass Technical Tipping Point The dollar rose the most against the euro in almost two months, reversing its drop to a 14-month low after the European currency failed to exceed a level above $1.50 that trading patterns indicated would have propelled it higher. The U.S. greenback rose against the South African rand and the New Zealand dollar on bets a drop in stocks discouraged investors from buying higher-yielding assets. South Korea’s won was the best performer versus the dollar among 10 emerging- market Asian currencies as the nation’s economy grew at the fastest pace in seven years. “At some point, the euro will fall victim to its own success,” said Vassili Serebriakov, a currency strategist at Wells Fargo & Co. in New York. “We’ve seen the euro touching new highs but really struggling to extend them significantly.”
Dollar Will Be Worthless Amid ‘Disaster’ in U.S., Faber Says The dollar will become worthless when people eventually realize the fiscal situation in the U.S. is a “disaster,” said Marc Faber, publisher of the Gloom, Boom & Doom report. “It will go to a value of zero eventually, but not right now,” Faber said today in an interview on Bloomberg Television. “Looking at Mr. Obama’s administration, it should already be there. I think it will take about 10 years until people realize that the fiscal situation of the U.S. is a complete disaster.”
Marc Faber, Dollar Will Eventually Go to Value of Zero, Oct 26, 2009
Are Stocks About To Be Killed In A Dollar Squeeze? Today the price action (mainly on the bid per NYSE tick) on the S&P500 & Nasdaq indicated a clear inverse correlation between the dollar and equities. Obviously the connection has always been part of the equation, what has not been as obvious is how many traders are watching this trade. As I posted earlier today on twitter, UUP showed large volume spikes today following the rumor of S&P downgrading the banking sector. If you look a bit further out you can see UUP has been in a downtrend finally finding some historical support down here around 22ish. As Roubini mentioned a dollar collapse is a lot less likely than a dollar rally. If this is the case profits from the rally we begin to be taken aggressively out of fear of, this will create great sell side pressure on equities and commodities alike. This timing is almost perfect, the rally has been way over extended, near 60%, we are exhibiting price action (tight ranges, easier to fall than to rise) in the index's which indicates a toppy environment. I am basing this off of most good news is being sold in relation to earnings, as NOT good enough.
Troubled Dollar could shed 60% more value The rapid breakdown of the dollar after putting in a series of new highs illustrates what lies in store for it in the years to come. However, in the interim some sort of relief rally is to be expected as the dollar has mounted a very hard correction in a relatively short period of time. A 2 year chart reveals that the dollar is very close to hitting a very strong support zone that falls in the 75.00-75.50 ranges. A test of this zone should lead to a bounce that has the potential of taking the dollar to the 80-82 ranges.
US-China currency war eclipses Davos, and threatens the world Turning a corner in the labyrinthine corridors of the Davos nerve-centre, I ran smack into Chinese premier Wen Jiabao – followed by a regiment of retainers and senior offices in full regalia. They have not quite adapted to the “sport” dress code of capitalism in Alpine retreat. Jeroen van der Weer – a Davos stalwart – wears horrendous corduroy trousers (pink sometimes) with a 1950s-era Tyrolean woolly. I dread to think how they react to Swiss prices if they venture into the restaurants. Mr Jiabao smiled at me benignly, but he is not in a good mood. Indeed, he is fuming over the remarks by US Treasury Secretary Tim Geithner that China was “manipulating” its currency to gain market share. Reports were circulating this afternoon in Davos that Mr Jiabao erupted into a tirade after lunch at the mere mention of Mr Geithner’s name.
Dollar wobbles after Chinese comments The dollar dropped to a fresh 14-month low against the euro in intraday trade yesterday after the People's Bank of China suggested that, while the dollar should remain dominant, the share of the euro and the yen should increase in its foreign exchange reserves. The exact composition of China's $2,270bn foreign exchange stockpile, the world's largest, is a state secret, but it is estimated that it is held 60 per cent in dollars, 30 per cent in euros and the remainder in sterling and yen. Fears that China would diversify its reserves away from a weakening dollar have been a drag on the US currency in recent months, amid repeated concerns from Chinese authorities over the value of its stockpiles. The dollar fell to a low of $1.5061 against the euro, its weakest level since August 2008, on the news. But the dollar pared its losses against the single currency, after the author of the report, which appeared in the Financial News, a paper published by the PBC, said it was purely a "personal view".
China faces 'economic slowdown' in 2010 China may face an economic slowdown next year, Stephen Roach, the chairman of Morgan Stanley Asia, has warned. A massive government stimulus package and more than $1 trillion of new bank lending helped the Chinese economy jump 8.9pc in the third quarter. However, Mr Roach warned that China still faces "tough challenges in the years ahead". Speaking in Shanghai over the weekend, Mr Roach said: "China's growth model is much more about supply than demand. It's not a sustainable model for China. It's not a sustainable model for any nation."
George Soros on the Global Economy, China and Regulation Chrystia Freeland, U.S. managing editor of the Financial Times, interviewed George Soros, the legendary fund manager, about the state of the world economy, relations between the U.S. and China, his investment performance and regulating bankers’ compensation. A link to the transcript of the interview follows at the end of the post.
China Needs ‘Unexpected’ Yuan Jump to Limit Inflows China should allow an immediate one- off jump in the yuan’s value and widen the currency’s trading band to stem inflows of speculative capital that may fuel inflation, said UBS AG economist Wang Tao. “China’s economic fundamentals mean that the yuan should strengthen,” the Beijing-based Wang said in a phone interview yesterday. “The central bank will find it harder to manage liquidity and inflation when a flood of speculative funds returns, betting on the yuan’s appreciation.”
Platinum demand soars in China In China platinum is taking big strides with the demand for the metal rising even in remote areas. Higher sales are being fueled by holiday-related jewellery sales and for bridal rings, which were helped by 2009 being considered an auspicious year for getting married and an increasing desire for platinum. Platinum jewellery sales in China increased by more than 400,000 ounces, compared to the same period in 2008, largely in response to lower platinum prices, but also given the reduced premium over gold.
Here's Why Asia Must Eventually Ditch the Dollar Talk is cheap, and all ASEAN’s leaders did last weekend was to talk about an Asian currency zone and free trade agreement by 2015. News reports exaggerate the near-term ability to maneuver of the major players, for example, this rather overwrought report in the Times of India Oct. 23: BEIJING: China is set to use the ASEAN meet to sell the idea of making the Yuan an international currency. It is using the sense of uncertainty about the US dollar to sell a new dream of enlarged regional trade, financial support from Beijing and reduced dependence on the volatile dollar.
'US taking laissez faire approach to dollar' With all the 'strong dollar' rhetoric coming from the Fed and broken-record Bernanke, it's a wonder any investors are making money. But one we know and trust is. . .because he's not listening. "The U.S. will continue to take a laissez faire approach to the dollar," says John Doody, Economics Professor for nearly two decades and current author and publisher of Gold Stock Analyst. In this exclusive interview with The Gold Report, John explains how he measures gold's price performance, why he believes most investors don't have enough gold stocks in their portfolios and which companies he's making money on right now.
Niall Ferguson: U.S. Empire in Decline, on Collision Course with China The U.S. is an empire in decline, according to Niall Ferguson, Harvard professor and author of The Ascent of Money. "People have predicted the end of America in the past and been wrong," Ferguson concedes. "But let's face it: If you're trying to borrow $9 trillion to save your financial system...and already half your public debt held by foreigners, it's not really the conduct of rising empires, is it?"
DOLLAR ALERT - REVENGE of the GREENBACK... The dollar is at a crossroads and there are two probable scenarios. One is a final plunge following the recent grinding decline to an intermediate low that is followed by an intermediate reversal. The other is that it suddenly breaks out upside from the severe downtrend it has been stuck in since early March and rallies strongly, strongly because it is likely to be juiced by a sudden wave of panic short-covering.
Please Mr Geithner Don't Pass the Buck on the Dollar It seems nobody in this country wants to take responsibility for the secular decline in the value of the U.S. dollar. When Fed Chairman Ben Bernanke is asked about the currency's decline, he refers the query to the Treasury Department. When the president is asked about the dollar, he often gives the tired old platitude that the U.S. has a strong dollar policy, but his vacuous words seem more like perfunctory utterances than a bona fide dollar-boosting strategy.
Dollar firms as concerns over stocks, banks mount The dollar turned higher on Monday, fed by safe-haven demand as analysts cited pressure on U.S. stocks nearing technical resistance levels, while concerns over the health of financial firms returned. "The dollar is now rallying across the board," said Ashraf Laidi, chief market strategist at CMC Markets. "The parameters of risk appetite were drawn by $82 oil and by 1,100 on the S&P 500," he said. Rising concerns that stocks might be overstretched were fed by worries over the financial sector of the market, following the downgrades of several big U.S. banks, Laidi said. . . . . . . . a Chinese central bank researcher called for moving some of the country's massive foreign reserves into euro and yen holdings.
America's Weak Dollar Policy: "You Can Envision All Sorts of Crises" . . . . With the U.S. Treasury set to auction a record $123 billion of notes this week and the Fed's $300 billion Treasury purchase program set to expire, those risks should not be taken lightly. Of course, such concerns have been circulating for a while and have not come to fruition, to date. It's "very difficult to say" when foreigners stop talking about diversifying away from the dollar and take more concerted action, Tilman admits. But "it's hard to imagine a lot of foreign buyers are going to tolerate further declines in the dollar. "
Dollar Advances as Bank Losses, Stock Drop Spur Safety Demand The dollar gained for a third day against the euro and reached a one-month high versus the yen on concern U.S. bank losses will derail the global economic recovery, sapping demand for higher-yielding assets. The dollar traded near the highest in almost one month against the yen on speculation U.S. lawmakers will phase out a tax credit for homebuyers and Bank of America Corp. will have to sell shares to pay back its government bailout. Australia’s dollar traded near the lowest in a week before a report tomorrow that may show consumer price gains slowed, reducing pressure on the central bank to raise interest rates.
Conditions are Ripe for Dollar Rally The strong recovery in the U.S. Dollar late in the week and the inability to break it sharply lower could be a sign that a short-covering rally is imminent. Rumors that the Fed may begin to raise interest rates earlier than expected, a poor U.K. economy and fear of intervention all helped boost the Dollar on Friday. The uptrend continued on the daily USD JPY chart as rumors swirled that traders are betting the Fed will raise interest rates sooner than expected. Traders who sold Dollars and bought Yen when U.S. interest rates became the lowest in the world are not being forced to buy back their positions. This is helping to boost the USD JPY. There will come a point when the Yen once again becomes the world's carry trade. The Dollar should rally substantially and equities should break hard when this occurs.
Dollar Not in a Disorderly Drop, Pimco’s Clarida Says The dollar is not experiencing a “disorderly” decline and will likely remain the world’s main reserve currency for a number of years, according to Richard Clarida of Pacific Investment Management Co. “My bet is that we don’t see a disorderly decline,” Clarida, a global strategic adviser to Pimco, said in a Bloomberg Television interview in New York.
Peter Schiff issues a Red Alert: "Get out of the US dollar"
Anything Less Than Full Disclosure is Unacceptable By: Dr. Ron Paul Last week a new bill was introduced in the Senate to audit the Federal Reserve. Some backers of my bill HR1207 and the existing Senate companion bill S.604 were a little miffed at this, but depending on how you think about it, this new legislation poses no great threat to our efforts. With the economy in shambles, people are looking for answers - not just because of lost savings on Wall Street, but because of lost houses on Main Street. Because of the many problems we face, the Federal Reserve and its powers over the economy have come under scrutiny. This translates into a lot of political pressure on Congress. With all the House Republicans signed on as co-sponsors and over half of the Democrats, HR 1207 has enormous bipartisan support. It would be disingenuous for Washington not to embrace the principles behind this bill after all the promises for transparency. How can one credibly argue for more transparency in government in one breath and defend the secrecy of the Federal Reserve in the next?
$2,000. Gold Zero Discount Value of Gold in the Total Banking System The U.S. banking system has many banks with large amounts of bad loans on their books. How do these bad loans affect the value of the dollar and gold? Specifically, how do they affect the Zero Discount Value (ZDV) of gold? . . . . . . . . To estimate the ZDV in this simple situation, in which no other assets than gold qualify as valuable assets, divide the monetary base by the number of ounces (oz) of gold that the bank holds. If, for example, 200 oz. of gold are held against 400,000 dollars of monetary base, then the ZDV is $400,000/200 oz. = $2,000 an oz. Only if gold is valued at $2,000 an oz. does every dollar that has been issued by the central bank correspond to one dollar’s worth of gold.
Gold: How the Mainstream Gets It So Wrong It turns out that public perception and mainstream TV commentators have had things entirely wrong. Data shows that gold has been outperforming equities for the last 40 years. Gold today is at $1,050. That’s 30X times the gold price of $35 in 1971, when the United States went off the gold standard. That represents a 3,000% gain. The Dow Jones Industrial Average (DJIA) in 1971 traded around 900. It’s now 10,000. That’s a gain of about 10X, or 1,000%, over the same period of time. Gold has outperformed the DJIA by a factor of 3 since coming off the gold standard.
'Gold price should be at least $3000 per ounce' When you get right down to it, no matter what techniques one might rely on for his investment decisions there is one thing that they all have in common. In order to be successful an investor has to be on the right side of the longer term trends. We are all bombarded with daily charts and sometimes weekly, but looking at the long term monthly charts can reveal areas where price on the long term has historically shown to be important turning or continuation points. Not only do they give you a perspective or where price has been in the past, it gives you an idea of where price is now in relation to where major peaks and bottoms occurred.
Boiling Point I remember well when gold rose from the measly price of $400 to above $700, the excitement was contagious. Then it rose from $700 to $1000 and the excitement was marginal. Now as we are at the beginning of the next major up-leg the excitement is moribund. The only excitement is from select institutional investors and central bankers, but even they are a rare breed and certainly not listened to by the masses, but they will. There are three obvious stages to a bull market, smart money accumulation being the first. That stage is just winding down now. We are only at the beginning of the second stage where gold climbs the so called wall of worry as institutions and funds accumulate before telling their clients to get into the market.
Gold Calls the World Bankers’ Bluffs In Friday’s essay we discussed the frightening chart of the US dollar index. In particular we focused on the manner in which the Dollar has broken critical support (76) and is on its way to its all time low of 72. Below that… and we’re in uncharted territory. Long-time readers know that I’m no fan of Ben Bernanke. But Bailout Ben is in no way unique in his thinking (though he has managed to spend more money than WWI, WWII, and the New Deal combined). Indeed, virtually every central bank in the world has engaged in a massive printing orgy. Australia, Canada, China, Germany, Korea, Russia, even South Africa and Turkey have all engaged in Stimulus plans in one form or another.
Gold in the Early Stages of Breaking Out in Multiple Currencies October 2009 has developed into a truly glorious month. For the first time in history the average monthly price for US$Gold will exceed $1,000. Certainly all are celebrating such a wonderful event. Perhaps the most important aspect of this remarkable event is that the purveyors of price suppression and manipulation theories can now turn off the lights in their caves. Reality has crushed their misconceptions. If an $800 bull market is price suppression, give me some more!
Hold That Gold! Eric Hommelberg argues that gold has significantly outperformed the Dow in terms of valuations, and as he sees it, the bull run will last at least until the middle of the next decade. The rhythm of this market over the past eight years tells him that $1,000 gold is history, and we can expect the current climb to push the price past the $1,250 mark next spring. . . . . . . . . Again, investors were waiting for a trigger. When the news came out that the Gulf Arabs - along with China, Russia, Japan and France - plan to end dollar dealings for oil, all heck broke loose. The news made it very clear that a new basket of currencies will most likely include gold - as well as the yen, the yuan and the euro. Sure enough, it was very dollar-bearish - and therefore very gold-bullish news. This prompted, of course, a buying spree for gold, which overwhelmed the short players in the short term.
Gold Says Stimulus "Making a Mess" as Private Investors Forecast Higher Prices, Lose Confidence in Fiat Money THE PRICE OF GOLD gave back early gains in London on Monday, dipping below last week's all-time record finish versus the Dollar as European stock markets also gave back an early 1% rise. Asian trading was light, with Hong Kong closed for a holiday. Oil drifted lower to $80 per barrel, while the major currencies – and government bonds – were little changed. This week the US Treasury will issue a record $123 billion in new debt.
"If gold is telling us anything today," writes Fidelity International analyst Tom Stevenson in London's Daily Telegraph, "it is that governments – principally America's and [the UK] – are about to make a mess of the exit from their economic stimulus programs."
Gold Falls as Dollar’s Rebound Erodes Demand for Alternative Gold fell the most in more than a week after the dollar rebounded, eroding the appeal of the precious metal as an alternative asset. Silver posted the biggest decline in a month. The greenback rose as much as 0.8 percent against a basket of six major currencies after dropping as much as 0.4 percent earlier. Gold, which typically moves inversely to the U.S. currency, climbed to a record $1,072 an ounce on Oct. 14. “It’s all predicated on the dollar,” said Marty McNeill, a trader at R.F. Lafferty Inc. in New York. “If the dollar rallies, gold can see some downside.”
The War on the U.S. Dollar Last week, I showed you the most shocking numbers I’ve seen in my lifetime: Up until the day Lehman Brothers collapsed in September of last year, it took the Fed 5,012 days — 13 years and 8 months — to double the cash currency and reserves in the coffers of U.S. banks. In contrast, after the Lehman Brothers collapse, it took Bernanke’s Fed only 112 days to double the size of those reserves. He accelerated the pace of bank reserve expansion by a factor of 45 to 1. . . . . . . . The dollar is careening toward its lowest level in history! Gold is going through the roof right now, plowing past every barrier, surging to its highest level of all time. Major oil producers all over the world are talking about abandoning the dollar as the basis for global oil contracts, right now!
Green Monster I’m a fan of economics and of history, as well as politics, a combination that forms some very interesting cycles to research, discuss and argue on. None is so interesting than the death of great nations, for here there is always the self destruction that comes before the final breakups and invasions. As they say: Rome did not fall to the barbarians, all they did was kick in the rotting gates. It can be safely said, that the last time a great nation destroyed itself through its own hubris and economic folly was the early Soviet Union (though in the end the late Soviet Union still died by the economic hand). Now we get the opportunity to watch the Americans do the exact same thing to themselves. The most amazing thing of course, is that they are just repeating the failed mistakes of the past. One would expect their fellow travelers in suicide, the British, to have spoken up by now, but unfortunately for the British, their education system is now even more of a joke than that of the Americans.
The War Over the U.S. Dollar Versus Gold A fierce war of words has erupted in recent weeks between the two major camps in monetary circles. The first camp – the gold bulls/dollar bears – have been loudly voicing their twin belief that the gold price is poised to skyrocket while the dollar price is perched for a collapse. The other side – the gold bears/dollar bulls – are making the counter claim the gold price is setting up for a crash. . . . . . . . Before we examine the claim of the “coming gold crash,” let’s examine the dollar crash scenario. Is it possible that the “powers that be” would allow the mighty greenback to cascade to new depths, eroding purchasing power for millions of Americans in the process? After all, no government has ever outlived its currency. Why would the federal government allow the dollar’s value to be sabotaged at the expense of its own survival? The possibility of an outright dollar implosion must therefore be seen as a slender one.
"Obama Demands Pay in Euros!" The "dollar debate" on the Internet has been ferocious and emotionally-charged, but sadly lacking in logic. To oppose the "dollar will crash" theorists is like arguing a woman's right to choose with the fist-waving throng assembled outside an abortion clinic. The results are equally disappointing. To say that "minds are already made up and the issue is settled", is an understatement. For many, the dollar's transition from the world's reserve currency to a Wiemar era Deutschemark is not a question "if" but only of "when". . . . . . . .
Here's a likely scenario of what could take place in the next few months:
Even though the signs of severe deflation are visible everywhere, investors short the greenback and the dollar plunges to $1.60 per euro. That increases public angst which sets off a firestorm on Capital Hill. The Congress forces the Fed to stop its quantitative easing (QE) program (which has already pumped over $1 trillion into US Treasuries and mortgage-backed securities) and long-term interest rates spike overnight. This puts downward pressure on the housing market and the slump deepens. More jobs are lost, more banks and financial institutions default, perfectly good businesses cannot role over their debt and call it quits, prices fall across the board, the stock market retraces its March lows, and the economy ends up in the ditch.
Calling a Market Top – Feldstein for Fed Chair Stock market trend: Inflection Point – Likely Trend Reversal It ain’t over til it’s over, but as a speculating man, I’ve been betting that we’ve reached a market top in the U.S. and that that top may well be signaling the onset of a double dip U.S. recession in one to two quarters. Loyal readers will know that I took most of my profits off the table some weeks ago and went to a cash and hedged strategy. In this next phase, I will hold my long positions in my cycle-resistant biotechs but I am moving cautiously and in small steps towards a net short position on the broad U.S. market to try to capture some of what I believe will be a downward move (TWM is my favorite shorting tool for the broad market).
America on a "Shaky Bridge Over a Volcano" With a meaningful economic recovery facing an uphill battle, Tilman says it may require another bubble before serious financial reform takes hold. "I'm thinking about the current environment. Unfortunately it's this shaky bridge over a volcano," he says. Meanwhile, Tilman points to three big themes:
The timing of the next bubble will depend on the U.S. economy and the dollar.
Economic signs point to extreme caution by mid-2010.
Ultimately, we still need the right kind of transparency among financial institutions for true financial reform.
Russia to sell two-thirds of its gold holdings Dollar weakness was manifest once gain as the new trading week got underway, with the US currency recording a fresh 14-month low against the euro overnight. The greenback also slipped on the trade-weighted index, losing 0.13 to 75.31 at last check. This morning's macroeconomic news reveals a mixed bag of confidence, one that is dependent on geography. German consumer sentiment slipped for the first time in more than a year, as locals worry about continuing job losses. Over in the UK, in the midst of a rather nasty economic picture, business confidence levels rose to an 18-month high based on the latest survey.
Not Inflation Or Deflation – But Speculation Call it what you want, the primary condition our condition is in is not inflation, or deflation, or even stagflation for that matter, although it’s much closer than the other two definitions in describing the macro. Why would the term stagflation better describe macro-conditions? Answer: Because the mature state of globalization that guarantees us a constant state of overproduction moving forward, which depresses prices, is being countered by monetary inflation, which has increased certain prices, but primarily only those under government influence, leaving the rest of the economy sluggish. And it gets worse when one realizes our fiat currency monetary system is also mature from this perspective as well, with gambling now the backbone of non-government activities within aged economies (US, Europe, etc.), which cannot go on indefinitely.
Corn, Soybeans Climb as Dollar Rally Halts, Increasing Demand Corn rallied, rebounding from the largest decline since June, and soybeans rose as a weakening dollar boosted the demand outlook for supplies from the U.S., the world’s biggest producer of the crops. Corn gained as much as 0.7 percent as the Dollar Index declined for the first day in four against six major currencies, increasing demand for commodities as an alternative investment. The grain lost 5 percent yesterday in Chicago trading, the steepest drop since June 30.
Oil Trades Below $79 as Dollar Gain Cuts Demand for Commodities Crude oil traded below $79 a barrel after falling the most in a month as the dollar rose, reducing investor demand for commodities to hedge against inflation. Oil also fell as a surge to a one-year high of $82 a barrel last week increased prices at a faster pace than a recovery in demand. OPEC may boost production targets at its meeting in December as prices climbed above $75, the group’s president said. “The rally will not sustain, eventually oil should go back down towards $70,” said Clarence Chu, a trader with options dealers Hudson Capital Energy in Singapore. “Demand hasn’t really come back.”
Asian Nations Aim to Succeed Where Bernanke Failed on Bubbles Policy makers from South Korea to Singapore, confronted with rising real-estate values that threaten to mimic in Asia the U.S. mortgage bubble that roiled the global economy, are stepping up efforts to rein in prices. Regulators in South Korea, Hong Kong and Singapore told banks in recent weeks they need to tighten lending standards. Central banks including India’s and South Korea’s have signaled a readiness to raise interest rates in the coming months.
Clock ticking on debt ceiling US is about to reach its credit limit This week Uncle Sam plans to sell $123 billion worth of Treasurys. That will bring the country's debt level very close to the $12.1 trillion debt ceiling. Roughly $211 billion separates what the country owes and its self-imposed credit limit. And by Friday, after another week of massive debt sales by the Treasury Department, that gap will likely have narrowed considerably. It is now expected that the $12.104 trillion debt ceiling could be breached by the end of November. It is also expected that lawmakers will raise the ceiling, as they have done more than 90 times since 1940 -- eight of them since 2002.
Back-Door Taxes Hit U.S. With Financing in the Dark Salvatore Calvanese, the treasurer of Springfield, Massachusetts, for four years, had a ready defense for why he risked $14 million of taxpayer money on collateralized-debt obligations laden with subprime mortgages in 2007. He didn’t know what he was buying, he says, and trusted the financial professionals who sold them and told him they were safe. “I thought they were money markets that were just paying more,” Calvanese said in an interview. “Nobody ever used the term ‘CDO,’ and I am not sure I would have known what that was anyway.”
Wall Street firms should not be called banks, US official says Head of government insurer says legal constraints on using the word 'bank' needed to dispel confusion One of America's top financial regulators has suggested that Wall Street institutions should be banned from calling themselves "banks" in an effort to clear a fog of confusion about the word in both political and consumer circles. Sheila Bair, chair of the Federal Deposit Insurance Corporation (FDIC), suggested that only commercial deposit-taking institutions, where customers' cash is safeguarded by a guarantee, should be permitted to describe themselves as banks.
Central Banks Hitting Assets Question Greenspan View Central bankers from Washington to Oslo are taking greater account of accelerating asset prices to avoid the policy mistakes that inflated two speculative bubbles in a decade and led to the worst financial crisis since the Great Depression. A month after warning that property prices are rising “probably excessively,” Norges Bank Governor Svein Gjedrem is set to increase interest rates on Oct. 28. Reserve Bank of Australia Governor Glenn Stevens cited costlier real estate as a reason for raising rates three weeks ago.
Geithner Widens Bills-to-Bonds Gap With New Sales Treasury Secretary Timothy Geithner’s plans to lock in near record-low borrowing costs in 2010 may mean a second year of losses on longer-term bonds. After selling $1.9 trillion of short-term securities to finance President Barack Obama’s efforts to end the worst recession since the 1930s, the Treasury plans to lengthen the average due date of its outstanding debt to 72 months from a 26- year low of 49 months. That may mean boosting sales of 10- and 30-year bonds by 40 percent over the next year to $600 billion, according to FTN Financial in Memphis, Tennessee, driving down prices of longer-term securities.
No relief in sight for Main Street banks With loan losses still mounting, some regional banks aren't looking to return to profitability until 2011. JPMorgan Chase, Goldman Sachs and other Wall Street megabanks may be showing signs of recovery lately, but things are hardly looking up for regional banks. From the Rust Belt to the Deep South, big commercial lenders with more routine banking businesses have endured some of their worst losses since the financial crisis began more than a year ago.
Treasury near deal on 'too big to fail' The Treasury Department and a senior House Democrat have decided against making financial firms pay up front the costs of dismantling them if regulators decide they have grown "too big to fail," according to a House aide familiar with the plan. Instead, those companies would be allowed to borrow money from the government. The government would then recoup the costs by either seizing the firm's profits or seeking restitution from the entire industry, the aide said. The aide spoke on condition of anonymity because details had not been released. Rep. Barney Frank, the Massachusetts Democrat who chairs the House Financial Services Committee, was expected to announce the agreement by Tuesday.
Abolishing Risk Destroys America and Your Wealth Our willingness to engage in risks drives our prosperity. We urgently need a public debate on risk, one driven by reason, not emotion. Without risk, individuals are bound to lose the purchasing power of their savings; corporations that don’t take risk will fade into oblivion; and governments that regulate away risks destroy the growth engine of their nation.
Got Perfect Credit? You Could Be Charged For It! Bank Of America, Citigroup First To Try Out Idea, Which Will Undoubtedly Alienate Many Who Follow The Rules Loraine Mullen-Kress carries a Bank of America credit card and religiously pays off her balance. "Flawless credit," she boasted. Yet now, her good credit habits could cost her. Earlier this month Bank of America started notifying customers like Mullen-Kress that they will be charged a new annual fee of $29 to $99. "There is a big segment of their population that they will have never made money on, which is people who pay their bills on time every month," said Ben Woolsey, Director of Consumer Research at CreditCards.com.
Madoff Secrets Go to the Grave Jeffry Picower, found dead at the bottom of his swimming pool yesterday, was Suspect Number One in terms of what happened to Madoff’s billions. Now, Allan Dodds Frank asks, will they ever find the money? Before he was found in his swimming trunks, dead at the bottom of the pool at Casa Del Sud, his $33 million oceanfront mansion in Palm Beach, Jeffry Picower held the keys to Bernard Madoff’s vault.
Seven battles that will decide the future of the presidency Obama has set a deadline of next month to have a bill on the Oval Office desk to extend health insurance to the 46 million Americans who have no cover. It is possible, though unlikely, that he will get no bill at all, but more likely, and almost as controversial, is that he will end up with a bill that has been so watered down it will disappoint reformers. Having lost ground to the Republicans over the summer, and seen support for healthcare slip in the polls, he will tonight in a rare address to Congress try to wrest back the initiative.
After the Billionaires Plundered Alabama Town, Troops Were Called in ... Illegally One of this year's more disturbing stories that were ignored was the illegal Army occupation of Samson, Alab., in March following a shooting spree that raged across two towns by a disgruntled worker, leaving 11 people dead. As I wrote at the time, Michael McLendon, 27, went on a killing rampage following years of relentless corporate exploitation and harassment against him, his mother (whom he mercy-killed), and the entire rural Alabama region, which suffered like so many parts of rural America at the hands of billionaire goons like chicken oligarch Bo Pilgrim of Pilgrim's Pride notoriety. One of the creepiest details to emerge in the shooting rampage were reports that troops from nearby Fort Rucker were brought into Samson and other surrounding areas to patrol the streets. This is a clear violation of the Posse Comitatus Act, every freedom-loving American's worst nightmare.
Fed Change To Home Appraisal Rules Has Been A Disaster It makes sense that the government wants to prevent home prices from becoming over-inflated again, but tut instead of helping out the now distressed housing market, recent changes to the way homes are appraised has actually lowered the value of existing prices: Detroit News: At issue is the Home Valuation Code of Conduct for mortgages securitized or held by Fannie Mae or Freddie Mac, which deal with about 70 percent of U.S. mortgages.
Fed appraisal rules sink home values New regulations kill home sales, industry groups say Federal actions intended to stabilize inflated real estate prices that led to last year's financial meltdown are instead depressing prices and killing some sales in an already weak market. At issue is the Home Valuation Code of Conduct for mortgages securitized or held by Fannie Mae or Freddie Mac, which deal with about 70 percent of U.S. mortgages. The new rules, which took effect May 1, were intended to prevent cozy relationships between appraisers, agents and brokers that could lead to bias, fraud and inflated home values.
Are You Middle Class? Maybe Not For Long Many people write of the imminent destruction of the U.S. middle class (of which I consider myself a member) but few have explained specifically how this occurs. Understanding the mechanism seems important if I hope to avoid the fate of most of my peers. An insight on this question came from an unexpected quarter. A gentleman by the name of Fernando Aguirre, who posts on Internet forums and his blog as FerFAL, has written voluminously about his experiences as an Argentine citizen during and after the economic cataclysm that wracked his country in 2001. I first found a long forum post, and then a Google search of "FerFAL" revealed a larger web presence, including a recently published book.
Stuy Town Ruling Already Screwing Other Commercial Landlords Last week's ruling against the owners of New York City mega-plex Stuyvesant Town, which noted that the landlords improperly raised rates, is already being used as a precedent against others. NY DailyNews (via SquareFeet): Residents of 1600 Sedgwick Ave. in Morris Heights allege that landlord Riverview Redevelopment illegally jacked up rents to market rates on 80 apartments after taking them out of a federal affordable housing program last February.
Nelson Says Senate to Extend, Reduce Homebuyer Credit Senate leaders are negotiating to extend and gradually reduce an $8,000 tax credit for first-time homebuyers through 2010, Senator Bill Nelson of Florida said. “We should be able to extend that later this week,” Nelson, a Democrat, told reporters traveling today with President Barack Obama on Air Force One to a speech in Jacksonville, Florida.
The Case-Shiller Will Show Housing Is Falling Again The last few Case-Shiller reports have shown sequentially increasing home prices, but this could come to an end when the new numbers come out tomorrow. (Or, more likely, next month, when the September numbers are finally reported).
From our October 2009 Real-time Housing Report, The Altos Research 10-City Composite Index was down by 0.5% in September and 1.1% during the third quarter.
Using the housing market ask prices and more specifically, looking at the ask prices of new sellers entering the market each week, it’s clear that new sellers are viewing the market more pessimistically than sellers entering the market during the Spring. This would make sense because of the clear seasonality in the national housing market.
Jobless rates stubborn Economists warn of low employment in near future Even with an economic revival, many U.S. jobs lost during the recession may be gone forever, and a weak employment market could linger for years. That could add up to a "new normal" of higher joblessness and lower standards of living for many Americans, some economists are suggesting. The words "it's different this time" are always suspect. But economists and policymakers say the job-creating dynamics of previous recoveries can't be counted on now.
60 Minutes [ October 25 ] The $60 Billion Fraud PART 1
60 Minutes [ 10/25 ] The $60 Billion Fraud PART 2
Health care: How the U.S. system is designed to waste your money On Monday, Thomson Reuters released "Where Can $700 Billion in Waste Be Cut Annually from the U.S. Healthcare System," a white paper exploring American health-care costs. The report identified six factors -- administrative inefficiency, provider inefficiency, lack of care coordination, unwarranted use, preventable conditions, and fraud -- that cost the U.S. health-care system roughly $700 billion a year. That's a shocking figure, but $700 billion is a conservative estimate. The price of waste may be as much as $850 billion annually, the report concluded, and other studies suggest the figure may be closer to $1.2 trillion. Given that the most expensive health-care proposal on the table in Congress would cost about $1 trillion, it's clear that significant industry reform could fund most of the cost of universal health insurance.
US health bill will include public option Compromise allows states to opt out Harry Reid, the US Democratic Senate leader, on Monday signalled the tide may have turned in favour of a more liberal version of healthcare reform when he said the impending Senate bill would include a government insurance plan, or “public option”. Mr Reid’s announcement, which follows two weeks of intense consultation with the 60-strong Democratic caucus in the Senate, marks a sharp turnround from a few weeks ago when the US healthcare debate was dominated by conservatives opposed to virtually any kind of reform.
Prices still aren't right for consumers The government's key inflation measure has shown lower consumer prices most of this year, but there are a lot of reasons why it doesn't feel that way. The government says consumers are paying less for their everyday needs compared to a year ago. But if it feels like your dollar is not going as far as it used to, you're not alone. The Consumer Price Index is down 1.3% from a year ago, meaning that the typical market basket of goods and services should be costing you that much less. But there are a number of factors, some having to do with how CPI is calculated by the Labor Department's Bureau of Labor Statistics (BLS) and some having to do with economic behavior, which can make those savings seem like a mirage.
American Preeminence Is Disappearing Fifteen Years Early You may not be prepared for time-travel, but welcome to 2025 anyway! Your rooms may be a little small, your ability to demand better accommodations may have gone out the window, and the amenities may not be to your taste, but get used to it. It's going to be your reality from now on. Okay, now for the serious version of the above: In November 2008, the National Intelligence Council (NIC), an affiliate of the Central Intelligence Agency, issued the latest in a series of futuristic publications intended to guide the incoming Obama administration. Peering into its analytic crystal ball in a report entitled Global Trends 2025, it predicted that America's global preeminence would gradually disappear over the next 15 years -- in conjunction with the rise of new global powerhouses, especially China and India. The report examined many facets of the future strategic environment, but its most startling, and news-making, finding concerned the projected long-term erosion of American dominance and the emergence of new global competitors. "Although the United States is likely to remain the single most powerful actor [in 2025]," it stated definitively, the country's "relative strength -- even in the military realm -- will decline and U.S. leverage will become more constrained."
***** Consider this *****
For the 2010 Census: Name and Address Only (Congress Will Obey the Constitution When the People Demand It) Next year the country will go through another census. The people and the states – the creators and on-going sustainers of the federal government – have authorized this undertaking (U.S. Constitution, Article I, section 2). The census should be seen not as a burden but rather as an opportunity for Americans to practice self-government. Let me explain. Our written Constitution embodies ideas to which every member of Congress has taken an Article VI oath to support. In taking their constitutional oath the members of Congress are joined by every member of the 50 state legislatures, every federal executive, legislative, judicial officer, and every executive, legislative, judicial officer of the 50 states, as well as all military personnel. That so many are required to take the oath "to support this Constitution" is ample evidence that the Framers thought their written document to be quite important, a belief shared by most Americans. Our Constitution is written in clear, understandable English. Consider the census provision. "The [first] actual Enumeration shall be made within three Years after the first Meeting of the Congress of the United States [March, 1789], and within every subsequent Term of ten Years, in such Manner as they [Congress] shall by Law direct." This allows Congress to count us, but only count us. The operative word, "Enumeration."
US Senate opens debate on climate change The Senate’s environment and public works committee will on Tuesday start hearings on a climate change bill, although it is unlikely that any legislation could be enacted before the Copenhagen summit in December. The draft bill, put forward by Barbara Boxer of California, chair of the committee, and John Kerry of Massachusetts, who heads the Senate foreign relations committee, aims to cut US emissions by 20 per cent by 2020.
New Climate Change Agreement Is Unlikely to Be Achieved Deutsche Bank AG analysts said, global plans to slow climate change will probably fail through 2020. Nations will require further limits equivalent to total yearly emissions in the U.S. Analysis of 270 climate policies indicate they won’t keep emissions from rising in 2020 to levels that exceed what is needed to keep temperatures from advancing 2 degrees Celsius (3.6 Fahrenheit), according to analysts including Mark Fulton, global head of climate change investment research at Deutsche Bank’s asset-management division.
Americans Pull Strings in Afghan Election Henry Kissinger once observed that being America's ally can be more dangerous than being its enemy. Take poor Hamid Karzai, the amiable former business consultant and CIA "asset" installed by Washington as Afghanistan's president. As the U.S. increasingly gets its backside kicked in Afghanistan, it has blamed the powerless Karzai for its woes and bumbling. You can almost hear Washington rebuking, "Bad puppet! Bad puppet!" The U.S. Congressional Research service just revealed it costs a staggering $1.3 million per annum to keep an American soldier in Afghanistan. Costs for Canadian troops are likely similar. This huge expense can't go on forever.
Are You Ready for the Next Crisis? One conclusive hallmark of a failed state is that the crooks are inside the government, using government to protect and to advance their private interests.
On the Edge with Max Keiser - 23 October 2009 (1/4)
On the Edge with Max Keiser - 23 October 2009 (2/4)
On the Edge with . . . Paul Craig Roberts (3/4)
On the Edge with . . . Paul Craig Roberts & The New Welfare Queens (4/4)
U.S. Bank Failures Exceed 100 for Year, First Time Since 1992 U.S. regulators closed more than 100 banks in a single year for the first time since 1992, signaling the financial crisis hasn’t abated for lenders struggling with mounting losses tied to commercial real estate. Seven banks -- three in Florida and one each in Georgia, Wisconsin, Minnesota and Illinois -- were shut yesterday, according to the Federal Deposit Insurance Corp., pushing this year’s total to 106. That’s the most since the savings-and-loan crisis led regulators to shutter 179 institutions in 1992.
Bank failures stack up: Now 106 for 2009 Banks in Florida, Georgia, Illinois, Minnesota and Wisconsin, were shuttered, costing the FDIC an estimated $356.6 million The tally of bank failures easily broke past the No. 100 milestone on Friday night, with regulators announcing the year's 106th closure. That's more than four times the number that were closed in 2008, and the highest total since 1992, when 181 banks failed. Earlier on Friday evening the dubious honor of the 100th failure went to Partners Bank, of Naples, Fla., which had $65.5 million in assets, according to the Federal Deposit Insurance Corp.
Bank failures hit 106; many troubled banks remain open It's a big number that only tells part of the story. The number of banks that have failed so far this year topped 100 on Friday -- hitting 106 by the end of the day -- the most in nearly two decades. But the trouble in the banking system from bad loans and the recession goes even deeper. Dozens, perhaps hundreds, of other banks remain open even though they are as weak as many that have been shuttered. Regulators are seizing banks slowly and selectively -- partly to avoid inciting panic and partly because buyers for bad banks are hard to find. Plus, going slow buys time. An economic recovery could save some banks that would otherwise go under.
'Gold to touch $1,250 per ounce soon' The head of a New Jersey-based brokerage firm has suggested that gold prices could reach as high as $1,250 per ounce by the end of the year, Bloomberg reports. Investors have been turning to the yellow metal in recent weeks over fears about the dollar and the prospect of oil price-led inflation, taking it to a record high of $1,070 per ounce. However, Philip Gotthelf, president of Equidex Brokerage Group in Closter, explained that there is no reason why additional gains cannot be made in the final two months of 2009.
High Gold Prices Here To Stay When gold hit $700 people said it would fall. Wrong. And wrong again at $1,000. Two years ago, almost to the day, gold sold for $787.50 an ounce. Many prognosticators and market savants said vehemently that gold's move was too strong and must correct. At the time I wrote: "Gold has risen to new highs this morning. It is the festive Diwali and marriage season in India, and investors there are buying. More important, gold has made new highs in several different currencies, not only dollars." In August 2007 the yellow metal bottomed under $660 per ounce. Since then, approximately two years and two months later, gold has appreciated $400 per ounce--66%. If you have owned the coins, bullion or mining stocks you can realize, in hindsight, the "store of value" utility of gold. Interestingly gold mining companies such as Goldcorp have not responded similarly to gold's gigantic move in the past two years.
Gold poised to make fourth straight week of gains But, investors focused on the pace of the dollar's slide Spot gold held above $1,060 an ounce on Friday and was on track to post its fourth straight week of gains, with investors focusing on the pace of the dollar's slide after it hit a new 14-month low versus the euro. Gold edged up to $1,061.70 an ounce by 0536 GMT, up 0.2% from New York's notional close of $1,060.00. At its current level, it is poised to rise 0.7% on the week. "The mood looks good enough for gold to test $1,070.40 in the near future ... The dollar is down against major European currencies, Asian currencies are strong as well," said Kaname Gokon, deputy general manager at Japanese commodity brokerage Okato Shoji Co's research section.
Pension Funds to Buy Gold as Insurance Pension funds will increase gold holdings to acquire “financial insurance,” pushing prices higher as currencies drop, according to Shayne McGuire, director of global research at the Teacher Retirement System of Texas. “I think the largest institutions like our own are realizing that we barely own any,” McGuire said in an interview in Hong Kong. “The same thing applies to most of the pension funds which manage trillions of dollars in world wealth.”
Gold gives a precious insight into economy What a strange and fascinating commodity gold is – a store of value that is no one's liability, which cannot be printed or debauched by governments but which, with no income stream, has no objective value. A simultaneous hedge against both deflationary slump and inflationary spiral, it is little wonder gold should be the investment of choice for the Armageddon crowd. Gold attracts conspiracy theories like no other asset. Google "Yamashita's Gold" and enter into a half-plausible thriller of Japanese wartime loot and abandoned bullion in the Philippines. It is the stuff of an airport page-turner but what can it tell us about the real world? Some serious people think that the recent rally in the gold price really is different this time. It's not like the safe-haven spikes that have pushed the yellow metal through $1,000 an ounce on a handful of recent occasions but each time failed to hold the gain. Traders are pointing to the shallowness of recent pull-backs and the volume of bets buying speculators the right to purchase gold at between $1,100 and $1,200 an ounce.
Rising Gold Dances, but Won't Die, with the Dollar With all the 'strong dollar' rhetoric coming from the Fed and broken-record Bernanke, it's a wonder any investors are making money. But one we know and trust is. . .because he's not listening. "The U.S. will continue to take a laissez faire approach to the dollar," says John Doody, Economics Professor for nearly two decades and current author and publisher of Gold Stock Analyst. In this exclusive interview with The Gold Report, John explains how he measures gold's price performance, why he believes most investors don't have enough gold stocks in their portfolios and which companies he's making money on right now.
Gold mutual funds may be a golden opportunity to run with the bullion bulls It appears that swine flu is not the only sickness going around – gold fever is also in the air. Inflation fears and a weak dollar have persuaded investors to move more money into gold, pushing the price of the precious metal above the $1,000 mark. Feverish investors have helped gold to climb to an all-time high of around $1,066 an ounce this week, and analysts are forecasting higher prices next year. Even luxury department store Harrods has gotten into the "cash for gold" business, last week agreeing to accept its exclusive clientele's cash for actual Swiss gold bars.
Outpaced gold's rally remains 53% below 1980 inflation-adjusted high In 1980, gold hit a then-record of $873 an ounce. In today's dollars, that would be $2 287, according to the US Labor Department's inflation calculator. Record government debt and interest rates close to 0 percent are pushing gold higher for a ninth consecutive year, and options show investors expect the rally to continue. When prices reached all-time highs the contract with the most open interest was the December call to buy the metal at $1 200. The contract to purchase at $1 500 an ounce was the third biggest.
Will Obama's Economic Policies Destroy the US Dollar? One doesn't need to be an economic genius to see that the US dollar is in trouble. That Americans are hopelessly confused about what is happening to their currency is no surprise. However, before we get to the point of whether Obama's economics will do the dollar in I think it is important to provide a brief outline of the history behind the economic thinking that is sometimes used to explain exchange rate movements in the hope that this will give readers a better understanding of the current situation.
China won't sell dollars to buy gold China is on a gold buying spree these days to ensure that the country overtakes the United States in gold reserves. China, which is "underweight" on gold holdings, will increase buying as the economy expands, said Jeffrey Rhodes, chief executive officer of INTL Commodities DMCC. China’s 1,054 tons of gold represents less than two percent of its reserves, Dubai-based Rhodes said in an interview today. That compares with the international average of 10.2 percent held by central banks worldwide which have under 30,000 tons of the metal, equivalent to about $960 billion.
The Big Secret in Gold The little-known state of the gold market as prices close at a new weekly high... YOU WON'T read it in your Sunday paper, nor elsewhere online this weekend. But this autumn's gold rush has, in truth, been no such thing at all. No one's actually buying gold right now. Not the physical metal (and not the exchange-traded trusts either)...not at anything like the rate they were buying a year or six months ago. Instead, this rush differs in kind from the surge of autumn '07 or the panic of late '08. Because it's a rush solely in leverage. Hedge funds and prop desks have been buying gold futures and options with virtually free finance. Hence the surge in stocks, bonds and commodities too, of course. Because anything traded on margin looks a safe bet when finance costs you 1% or less per year. And especially when your major funding currency – the long mighty but now tired and emotional Dollar – is universally condemned to fall further.
Gold Market – Accident Waiting to Happen or Crime Scene? Don’t shoot the messenger My analysis suggests that the data on the volume of gold traded, if put in its proper context, does not tally with my estimate of the amount of gold that is held in the form of bars which conform to “London Good Delivery” standard. In my opinion, one of the following is true: Alternative 1: On average there is more than one ownership claim on each gold bar conforming to London Good Delivery (LGD) standard on the “pool” of gold which acts as liquidity for the massive OTC gold trade based in London. . . . Alternative 2: There is FAR more gold bullion held in private hands than is acknowledged by current industry estimates.
The Great Silver Heist In an attempt to continue to purvey the "big picture" in the silver market, here are some interesting facts for your consideration. Silver is as important a strategic commodity as oil. The need for a supply of silver in times of war is so essential, that a shortage of the metal could pose dire and direct consequences to the continued well being of our country. With the evolution of technology, silver has become so intrinsically important, that a lack of it will adversely affect America's national security. Meanwhile, as a result of the collusion between industrial users, central bankers, the Commodity Futures Trade Commission, (CFTC), the Chicago Board of Trade, (CBOT), and government regulators, spanning the past fifty years, inventories have all but disappeared.
The War Over the Dollar Versus Gold A fierce war of words has erupted in recent weeks between the two major camps in monetary circles. The first camp - the gold bulls/dollar bears - have been loudly voicing their twin belief that the gold price is poised to skyrocket while the dollar price is perched for a collapse. The other side - the gold bears/dollar bulls - are making the counter claim the gold price is setting up for a crash.
Dollar Forced to Abdicate By: Peter Schiff For the most part, the value of the dollar is given cursory attention by the financial media. Typically, its movements are assigned an importance on par with much less determinative metrics such as natural gas futures and construction permits. It's only when major milestones are reached that anyone really takes notice of the dollar. We are living through one of those times. The great dollar rally of 2008-2009 has come full circle. When the financial crisis exploded in its full ugliness in mid-2008, the dollar, which had steadily declined over the previous four to five years, put in a rally for the record books. By March 2009, as investors across the world sought safety from the financial storm, the index had surged more than 25%. Since then, the dollar has steadily declined to the point where nearly all those gains have vanished. In short, the panic rally has given way to the long term trend.
The Dollar is now collapsing - Peter Schiff | Part 1
The Dollar is now collapsing - Peter Schiff | Part 2
CNBC Tells Peter Schiff Falling Dollar Is A Good Thing
Dollar Trades Near One-Month High Versus Yen on Rate Outlook The dollar traded near a one-month high against the yen on speculation the Federal Reserve will increase interest rates sooner than economists forecast. The dollar may gain versus higher-yielding currencies such as Australia’s dollar after Philadelphia Fed President Charles Plosser told Bloomberg Radio last week his “instinct is the time for raising rates will be before many of my colleagues” think it is. Fed officials are likely to discuss next month how and when to signal the possibility of higher U.S. interest rates, the Wall Street Journal reported without citing anyone.
Dollar hegemony for another century By Ambrose Evans-Pritchard Let me stick my neck out. The dollar will still be the world’s dominant reserve currency in 2030, sharing a degree of leadership in uneasy condominium with the Chinese yuan. It will then regain much of its hegemonic status as the 21st century unfolds. It may indeed end the century even stronger than it was at the start. The aging crisis in Asia — and indeed the outright demographic implosion in Japan and China, not to mention China’s water crisis — will soon be obvious to everybody. Talk of Oriental supremacy will start to sound overblown at first, and then preposterous.
George Soros Sees Renminbi Link Saving the US Dollar So long as the Chinese renminbi is linked to the US dollar billionaire hedge fund manager George Soros says he does not see how the decline in the US dollar can go too far. It is this sort of simple logic from the man who broke the Bank of England for a $1 billion profit in 1992 that makes currency traders sit up and pay attention. Mr. Soros has also made some bad calls but his $7 billion fortune stands as testimony that he is right more often than he is wrong.
Soros: China Must Be Part Of The New World Order In a recent interview Soros spills the beans, talks about the new world order and describes the current and future managed and well plot out destruction of the American dollar, all though he warns it might spin out of control.
When Will Inflation Really Hit Us? Most of us are gathered at the station, watching for the Inflation Express to come rumbling in. But we've been waiting for a while now. Just when should we expect the big locomotive to arrive and start pushing the prices of most things uphill? We’d all like to know the exact date, of course, but no one can know for sure. Not even a careful reading of the Mayan calendar will help. What we can do is estimate a time range for price inflation to show up, and that alone should have some important implications for investment decisions.
Global Money In a conclusion that smacks of problem, reaction, solution Garten adds "In terms of US and international politics, a Global Monetary Authority is probably an idea whose time has not yet come. That may change as today’s crisis evolves." What he describes is nothing less than a global financial dictatorship, operating across borders and forcing nations and corporations to register and adhere to strict monitoring and obey the same regulations. The implementation of such a system would represent total interventionism and the absolute final nail in the coffin of the free market.
Soros calls Wall St profits ‘gifts’ from state The big profits made by some of Wall Street’s leading banks are “hidden gifts” from the state, and taxpayer resentment of such companies is “justified”, George Soros, the fund manager, said in an interview with the Financial Times. “Those earnings are not the achievement of risk-takers,” Mr Soros said. “These are gifts, hidden gifts, from the government, so I don’t think that those monies should be used to pay bonuses. There’s a resentment which I think is justified.”
Unexpected Market Moves Should Not Be Ignored In the last two weeks, in Reflation Supported By Stocks, Commodities, and Oil, and Gold, Recessions, Bonds, and 1987, we hypothesized that recent bullish moves in gold, oil, and the CRB Index were evidence of successful "reflation" of asset prices via monetary and fiscal policy. This week, we can add copper and emerging markets to the bullish evidence list. From a fundamental perspective, the desire to hold copper is based on economic need (you want to make a product), and inflation protection (you want to own hard assets rather than paper currencies).
How long before a G7 central bank raises rates? Hardly a day goes by without mention of the phrase “exit strategies”, which is the jargon that economists use for central banks raising interest rates from their current exceptionally low levels (and, where applicable, unwinding their policies of so-called quantitative easing). So far, two central banks have embarked on the route to monetary policy normalisation: the Bank of Israel raised rates from 0.5 per cent to 0.75 per cent at the end of August, followed this month by the Reserve Bank of Australia, which upped its official rate from 3 per cent to 3.25 per cent — the first G20 central bank to do so. The Norwegian central bank meets this week and is widely expected to raise interest rates by 0.25 per cent to 1.5 per cent. But how long will it be until G7 central banks, such as the Bank of England, the US Federal Reserve and the European, Central Bank follow suit? Warren Told To Quit Now Because the Banks Always Win - Consumer Financial Protection Agency October 22, 2009 - The House Financial Services Committee votes 39 to 29 in support of the agency, which would have the power to impose new rules on subprime mortgages, payday loans and other financial products.
Treasuries Fall for Third Week on Fed Speculation; Supply Looms Treasury 10-year notes fell for a third week as investors speculated the Federal Reserve may begin to signal an increase in interest rates from historic lows and as the U.S. prepared to auction a record $123 billion of notes. The yield on the two-year security, most sensitive to monetary policy, yesterday rose above 1 percent for the first time this month as Fed Bank of Philadelphia President Charles Plosser on Oct. 22 told Bloomberg Radio his “instinct is the time for raising rates will be before many of my colleagues” think it is. The U.S. economy expanded in the third quarter for the first time since June 2008, a Commerce Department report will show next week as the Fed is scheduled to end its $300 billion Treasury purchase program.
Here Comes the Monetary Expansion Bubble The best looking economy that debt money can buy. We have included some graphs to put this in perspective. But the bottom line is that the economy may be growing nominally based on an explosion in Federal Debt. We are almost certain that the debt is being applied in ways that will do no good, provide no sustained benefit, to anyone except a few narrow sectors and especially the FIRE sector. Too bad the chain deflator is broken, but it may catch up on adjustments. These positive numbers, especially if there is an upside surprise, are due to an unprecedented monetary inflation, not seen since the early 1930's, and a bringing forward of future sales in automobiles through government programs.
Recovery doubts, asset bubbles and hopes for a slower recovery Why a more gradual recovery would be better for everyone but could be boring for commodities On Tuesday, the MSCI All-Country World Index hit its highest level since September 2008. Up as much as 75% from their pre-crisis lows, stocks, including all manner of miners, have been buoyed not only by a firming belief that the worst of this crisis is over but, also by a rash of economic and corporate earnings data. And, on Wednesday, expectations were that the UK would put out numbers Friday showing it was on the mend. But that was not to be. On Thursday, markets took a little bit of a hit after China announced slightly worse than expected GDP numbers - the Asian superpower grew at 8.9% in the third quarter as opposed to the 9.1% some analysts were expecting.
Curtain call for Inflationary run The collapse of 2008 occurred because the US was clearly on an unsustainable path of excessive consumption and speculation, financed by credit. Debts are IOU’s with repayment terms, which means debtors must pay interest to creditors; borrowers therefore are on the hook for the principle as well as the interest, and the whole system falls apart when debtors are unable to pay because they 1) don’t produce anything, or 2) are denied new credit that becomes scarce when booms turn to bust. Borrowing to consume is debt that is of the non self-liquidating type, an issue we have regularly written about. As it turns out, this type of borrowing was not limited to the know-nothing consumer and his get-rich-quick schemes this past decade, but government and corporations as well, who, one might think, should know better. The US economy is largely dependent on debt and smooth running credit markets. In the years leading-up to the collapse of 2008, large US corporations -- many not in the ‘finance’ business but rather industrial type companies -- greedily created finance arms to get a cut of the huge profits being generated by shuffling paper within the ballooning debt bubble.
The Snowball of Derivatives: The Specter of a Second Black Swan Banking sector consolidation (via acquisition of failed banks) and the generalized bailout of bondholders, actions both promoted by governments, have aggravated the problems of “too big to fail” and “moral hazard”. Hence incentives for reckless behavior have actually heightened. So far there has been lots of talk within the G-20 and other forums but little action to tackle the problem at national and especially at transnational levels. As Nouriel Roubini and others have pointed out, one could argue that systemic risks have in fact increased relative to the pre-crisis period. A follow-up financial meltdown would be devastating. Governments should not only hope for the best but act swiftly to forestall the worst .The arrival of a Taleb’s second black swan on stage would mean complete chaos.
Fed Weighs Shift to Market Signals As the Federal Reserve's next meeting approaches in early November, an internal debate is brewing about how and when to signal the possibility of interest-rate increases. The Fed has said since March that it will keep rates very low for an "extended period." Long before it raises rates, however, it will need to change that public signal to financial markets. Because the recovery is so young and is expected to be so weak, many central bank officials are comfortable, for now, keeping rates very low. But they are beginning to strategize about how to walk away from the "extended period" language.
Will Capitalism Save Or Destroy Your Retirement? Capitalism is one of the most powerful economic forces in the history of mankind, and in theory forms the base for traditional retirement investing. But is that how it's really going to work? Author and financial expert Daniel R. Amerman, CFA, challenges a key aspect of conventional retirement investing, and shows why capitalism may destroy more retirement wealth than it creates.
As Microsoft Goes, So Goes Nation? Although the Wall Street Journal’s classy copy desk deserves praise for adapting so quickly to the paper’s tabloid transformation under Rupert Murdoch, the headline writers appear to be struggling to find a balance between truth, sensationalism and, in this case, wishful thinking. Here’s the headline -- and see if you can spot the dereliction of syntax: “Microsoft Feeds Hopes for a Recovery”. Did you infer that the hoped-for recovery supposedly being fed by Microsoft encompassed the broad U.S. economy? We did too, since it was logical to think that’s what the headline meant. After all, who among us knows a single person who even remotely cares whether Microsoft itself recovers from its Vista-induced kamikaze dive?
Cellphone Makers Dumping Windows Mobile For Google Android Since 1996, Microsoft has been writing operating systems for little computers to carry in your pocket. It was a lonely business until the company’s perennial rival, Apple, introduced the Web-browsing, music-playing iPhone. But now that smartphones are popular, Microsoft’s operating system, Windows Mobile, is foundering. More cellphone makers are turning to the free Android operating system made by Microsoft’s latest nemesis, Google.
Banks Piling Cash At Fed New data show excess reserves topped $1 trillion this week, a record. What's up? Do banks know something the rest of us don't? Despite pressure from politicians to take federal bailout money and lend it to companies and consumers to kick the economy out of its doldrums, banks continue to horde cash in dizzying amounts. Weekly data released Thursday by the Federal Reserve show excess reserves held at the Fed--the equivalent of banks stuffing bills into shoe boxes for storage--topped $1 trillion this week, a record, after climbing steadily since the markets froze up last October.
Obama tells bailed-out banks to pay up Big banks that got big bailout bucks should return the favor by lending more to qualified small businesses, President Obama says. In his weekly radio and Internet address Saturday, Mr. Obama said too many small-business owners remain unable to get credit despite administration moves to jump-start lending, which was virtually frozen when the financial crisis took hold last year. "These are the very taxpayers who stood by America's banks in a crisis, and now it's time for our banks to stand by creditworthy small businesses and make the loans they need to open their doors, grow their operations and create new jobs," Mr. Obama said.
Bernanke: Biggest banks will face more rules 'Capital surcharge' laid out as one option open to the Fed The nation's biggest banks will be subject to more rules and regulations in coming months in order to protect the financial system, Federal Reserve Board chief Ben Bernanke said Friday. "With the financial turmoil abating, now is the time for policymakers to take action to reduce the probability and severity of any future crisis," said Bernanke at a Cape Cod conference put on the Federal Reserve Bank of Boston.
Prosperity and the Roots of American Order In the first chapter of Russell Kirk's The Roots of American Order we read the following statement: "Our own society, like that of any other people, is held together by what is called an 'order.'" Without order, society doesn't cohere. Instead, it flies apart, breaks up, and disintegrates. And, I would argue, a process of disintegration has been underway in the United States for many years. The breakup of the American order has been masked by American prosperity, which has continued throughout the process of social disintegration. To a very great extent, the financial crisis we are experiencing today is no ordinary economic downturn. It is also the result of spiritual and moral degeneration together with the total collapse of paternal authority.
Neil Cavuto on the Democrat "Closed Door" Policy
Real estate lender Capmark files for bankruptcy Company is one of largest handling commercial properties in the U.S. Capmark Financial Group, one of the nation's largest commercial real estate lenders, has filed for bankruptcy protection amid mounting bad debt. Capmark has been hurt by rising losses on mortgage loans. In its Chapter 11 filing Sunday in Delaware bankruptcy court, the company listed total debt of $21 billion and assets of $20.1 billion. It seeks to reorganize under court protection, reducing its debt while continuing to operate its businesses. Many U.S. banks have been hurt by rising losses on commercial real estate loans. With millions of jobs lost and office space remaining empty during the recession, developers have been forced to default on loans. Analysts predict that commercial real estate defaults will rise rapidly.
Household Debt Can Hasten Recovery, When It Goes Unpaid The pain of millions of people across America losing their homes hardly inspires confidence in the future. But in a brutal way, it could be restoring the financial health of the U.S. consumer faster than many recognize. One of the biggest clouds on the economic horizon is the vast amount of debt U.S. households took on during the boom years. The Federal Reserve puts total household debt, including mortgage debt, at about $13.7 trillion, or 125% of annual after-tax income, a burden that many economists believe will take several years to pare down to what they see as a more sustainable level of 100%. During that "deleveraging" process, the logic goes, U.S. consumers -- whose spending makes up more than two-thirds of the U.S. economy and about one-fifth of the global economy -- won't be able to play a leading role in any recovery.
Should the U.S. ban real estate lending? Lending money to people to build and buy real estate is a risky business that periodically costs taxpayers huge amounts of money. Not only do taxpayers lose as a result of all the tax incentives associated with real estate, but they also pay when the banks that make bad real estate loans go bankrupt. While there are clear benefits to owning real estate, the business of real estate lending costs America so much that I think we ought to let real estate prices drop to a level at which people can afford it without borrowing.
Largest Pension Fund in U.S. Faces Iffy Future Russell Read, the former chief investment officer of Calpers, the largest pension fund in the United States, knows his trees. Read owned a 500-acre Maine forest landscaped with the same mix of maples and oaks the colonists would have seen when they first arrived on the shores of America. Bob Carlson, who was a board member at the California Public Employees' Retirement System for nearly half its history, recalls asking about commodities like timber during Read's interview for the position at Calpers.
In Detroit, a housing auction of last resort Hours of ‘no bid’ broken up by speculators outbidding locals on foreclosures In a crowded ballroom next to a bankrupt casino, what remains of the Detroit property market was being picked over by speculators and mostly discarded. After five hours of calling out a drumbeat of "no bid" for properties listed in an auction book as thick as a city phone directory, the energy of the county auctioneer began to flag. "OK," he said. "We only have 300 more pages to go."
Jobless rates stubborn Economists warn of low employment in near future Even with an economic revival, many U.S. jobs lost during the recession may be gone forever, and a weak employment market could linger for years. That could add up to a "new normal" of higher joblessness and lower standards of living for many Americans, some economists are suggesting. The words "it's different this time" are always suspect. But economists and policymakers say the job-creating dynamics of previous recoveries can't be counted on now.
In the Shadow of Leviathan: Americas' Arising Fear-Based Society "Thought crime was not a thing that could be concealed forever. You might dodge successfully for awhile...but sooner or later they were bound to get you." George Orwell, 1984 "The fact is we are witnessing an all-out drive to impose thought control that seeks to ban the ability---the right---to think or speak for one's self. Thinking is becoming a crime." (Globally Acceptable Truth and the Crime of Thinking, Tom DeWeese, Address to the 10th Annual Freedom 21 Conference, 10/16/09) In an article entitled “Dems Undermine Free Speech in Hate Crimes Ploy,” the Washington Examiner exposes the insidious machinations of House statists in their determination to impose totalitarian hate crime laws upon the American people. Hate crime laws do much more than undermine free speech however, for in that what one says is the result of what first takes place in the mind, hate crime laws are mind-control devices.
The 2010 Census Master Address File: Issues and Concerns 10-21-09: OGR Information Policy, National Archives and Census Subcommittee
Losing their lifeline - 7,000 a day As the Senate debates whether to extend unemployment benefits, more than 200,000 jobless Americans are set to see their checks stop in October. Another day, another 7,000 people run out of unemployment benefits. One month after the House passed a bill extending unemployment benefits, the issue is still being debated in the Senate. Democratic leaders in the Senate introduced a bill two weeks ago to lengthen benefits in all states by 14 weeks. Those that live in states with unemployment greater than 8.5% would receive an additional six weeks. Senate Republicans want to add several amendments, including one that would pay for the extra benefits with stimulus funds rather than by extending a federal unemployment tax.
Gas jumps nearly 18 cents in 2 weeks The average price of a gallon of self-serve regular was $2.655 as of October 23, Lundberg survey reports. Gasoline prices jumped nearly 18 cents over the past two weeks, the first two-week rise since early August, according to a survey published Sunday. The average price of a gallon of self-serve regular was $2.655 as of October 23, said Trilby Lundberg, author of the Lundberg Survey. Since the October 9 survey, the average price per gallon has climbed by 17.82 cents. The current price is 12.3 cents less than the price a year ago. The retail price of diesel fuel jumped a similar amount in the past two weeks -- 16.75 cents. The price of diesel fuel is $2.817, Lundberg said.
28% Plunge In Our Standard Of Living What is the most immediate danger for 300 million Americans from the limitless bailout of the most politically powerful special interest group in America, the bankers of Wall Street? Author and financial expert Daniel R. Amerman, CFA, illustrates the very real danger of a 12% to 28% plunge in the standard of living for the average family, and shows how it could occur in a matter of weeks or months.
Food will never be so cheap again Biofuel refineries in the US have set fresh records for grain use every month since May. Almost a third of the US corn harvest will be diverted into ethanol for motors this year, or 12pc of the global crop. The world's grain stocks have dropped from four to 2.6 months cover since 2000, despite two bumper harvests in North America. China's inventories are at a 30-year low. Asian rice stocks are near danger level. Yet farm commodities have largely missed out on Bernanke's reflation rally in metals, oil, and everything else. Dylan Grice from Société Générale sees "bargain basement" prices.
Obama Declares Swine Flu a National Emergency President Barack Obama declared swine flu a national emergency, the White House announced in a statement yesterday. The declaration is designed to help U.S. medical treatment facilities deal with a surge in H1N1 influenza patients by waiving government rules on a case-by-case basis, the announcement said. That might make it easier for hospitals to set up separate emergency facilities to deal with an influx of flu patients.
Estate Tax Bill Coming Soon A U.S. estate tax bill is in the works and may arrive soon on the floor of the United States' House of Representatives, lower house Democratic Leader Steny Hoyer said on Friday. "We would like to bring to the floor in the next few weeks, if not next week, a bill to deal with the estate tax issue," Hoyer said on the floor in discussions about the House's upcoming schedule.
US bookshops urge regulator to investigate online price war Wal-Mart, Amazon and Target are making loss leaders out of bestsellers, say US booksellers Independent bookshops in the US have urged the justice department to investigate a "predatory" online price war between huge retailers such as Wal-Mart, Amazon and Target that has cut the price of hard-back bestsellers to $9. Works by popular authors including John Grisham, Stephen King and Barbara Kingsolver, typically selling for $25 to $35, have been the subject of deep discounts by powerful US players this month in a battle for online supremacy in book sales.
AT&T, Google Battle Over Web Rules There's nothing neutral in the battle between AT&T Inc. and Google Inc. over the future of the Internet. Google, the powerhouse of Silicon Valley, and AT&T, champion for the old-line phone industry, are marshaling political allies, lobbyists and - in AT&T's case - labor unions for a fight over proposed "net neutrality" rules that could affect tens of billions of dollars in investments needed to upgrade the U.S. broadband network, which lags in speed and affordability compared with some countries. On Thursday, the Federal Communications Commission made good on its promise to push new rules that would require Internet providers such as AT&T to deliver Web traffic without delay.
Act now against Net Neutrality The time is coming that the left is going to begin its drive for Single Payer Internet, and so the time has come for us to fight back. Finland is gradually nationalizing the Internet and declaring use of other people’s Internet hardware a “right,” and the left is cheering. Obama’s “Internet Czar” does not hide the left’s hopes for an end to freedom and markets for Internet service. FCC Chairman Julius Genachowski, President Barack Obama, and the rest of the radical left want to use the Net Neutrality movement as the crisis that gives cover to sweeping big government action, allowing the FCC to pick winners and losers and dictate to private individuals and firms how their private property must be run, putting government bureaucrats in charge of the Internet.
***** Climate Change | NWO plans *****
EU, U.S., to form energy council A joint European-U.S. energy council to coordinate policy on both sides of the Atlantic is expected to begin work in November, a U.S. official said. The official, speaking on condition his name not be used, told the EU Observer that President Obama and Jose Manuel Barroso, president of the European Commission, are scheduled to announce the council at a Nov. 3 summit meeting in Washington. The council is to hold its first meeting the next day. "Energy is an important foreign policy priority for the U.S. and a very important component of our bilateral relationship with the E.U.," the official said. "We wanted to have a form of engagement with the Europeans to reflect that and to raise it to the policy level, to the cabinet level."
Obama is dithering on Afghanistan After eight years of government by gut instinct, most Americans welcomed the arrival of a deliberative president. Yes, get the experts in. Reflect, weigh their advice. What a good idea. And so it is if you are attempting, say, to reform the healthcare system. (A shame it was not tried.) There is even more to be said for taking your time if you are contemplating going to war. But when you are already fighting one, it has drawbacks. The US has been at war in Afghanistan for eight years – and it is losing. On this issue, Barack Obama is giving deliberation a bad name. He needs to make his mind up. The White House is touchy about this and is deflecting critics by blaming the previous administration. Mr Obama is asking hard questions his predecessor ignored, goes the line. True enough, Mr Obama inherited a wretched situation – but the recent dithering is all his own.
10-23-09 Iran to reject UN proposals... Harsh sanctions or war to break out? Echoes of Iraq?
What if Israel strikes Iran from the air? By Ed Timperlake With Russia and China slow-rolling any meaningful Iranian sanctions, a fundamental question being left out of the current debate about stopping Iran's quest for a nuclear weapon is this: What could happen after the Israeli Air Force (IAF) takes out Iranian weapon sites? America, working through the United Nations, has been trying to initiate sanctions to stop Iran's nuclear weapon programs. Our efforts have proven to be rather ineffectual but probably delayed imports of some major state-of-the art weapons from Russia, China and North Korea. But to Israel it must appear the world does not take very seriously two famous words - "never again!"
Iran must give up its nuke materials .... otherwise sanctions or possible war looms! Tensions grow and the outcome of these negotiations will determine if war breaks out in the region. I predict the talks will fail and soon a major escalation in tensions and possible attacks on Iran will ensue.
Obama Calls America to Lead World on Climate Change Friday President Barack Obama said he saw consensus building in the U.S. Congress on climate change and energy legislation. Both issues are critical to international talks on a new global warming pact. Obama, who supports a bill to cut U.S. greenhouse gas emissions, promoted the legislation during a visit to Massachusetts, saying it would transform the U.S. energy system and spur the United States to lead the world on developing technology for "clean" types of fuel.
Senate Climate Measure Would Give Away Most Pollution Permits Lawmakers would give away for free the bulk of all pollution permits under a plan to curb global warming introduced yesterday by Senator Barbara Boxer. The 923-page measure is similar to legislation the House passed in June. The Senate bill gives away free carbon dioxide emission permits to some industries, including 35.5 percent for utilities, 15 percent for manufacturers and 2.25 percent for oil refineries.
- - - - - - - - - - - - - - - - Archived Page Link
- - - - - - - - - - - - - - - -
Fri 10.23.2009
Bank Failure 100 Is Near; Morrison Buys It is only a matter of hours before the 100th bank failure of 2009. When that happens, 72-year-old John Morrison will be ready. The chief executive of tiny Stillwater, Minn.-based Central Bank has been on an acquisition spree since August, buying two failed banks and adding them to his 16-branch network. He has just received the government's blessing to purchase another bank that is about to fail -- though he won't name it before the deal is announced.
Dollar’s Doom Puts a Face on New $1 Million Bill Forty years ago, the U.S. government said the $100 bill would be the highest-denomination note. With the Federal Reserve now trying to print its way out of the financial crisis, it may be time to revisit that decision. Reinstating $10,000 or $100,000 notes -- which existed in limited fashion years ago -- won’t cut it. In today’s, “Brother, can you spare a trillion dollars?” economy, we need to think bigger -- a $1 million bill may be in order.
Disorderly Decline’ of Dollar Cannot Be Ruled Out A “disorderly decline” of the dollar, leading to the end of its reserve-currency status, cannot be ruled out, Pacific Investment Management Co. said. An orderly dollar decline is the “most likely scenario,” Richard Clarida, a Newport-Beach, California-based global strategic adviser at Pimco, wrote in a note to clients today. “A disorderly decline, while unlikely, cannot be ruled out.”
The Dollar is on Death Row: Negative Interest Rates Are Here, the US has $118 Trillion in Obligations, Got Gold? “The idea of making money earn a negative return is not entirely new. In the late 19th century, the German economist Silvio Gesell argued for a tax on holding money. He was concerned that during times of financial stress, people hoard money rather than lend it. John Maynard Keynes approvingly cited the idea of a carrying tax on money. With banks now holding substantial excess reserves, Gesell’s concern about cash hoarding suddenly seems very modern. If all of this seems too outlandish, there is a more prosaic way of obtaining negative interest rates: through inflation. Suppose that, looking ahead, the Fed commits itself to producing significant inflation. In this case, while nominal interest rates could remain at zero, real interest rates — interest rates measured in purchasing power — could become negative.
10/21/09 Ron Paul with Tavis Smiley (Part 1/2)
10/21/09 Ron Paul with Tavis Smiley (Part 2/2)
Companies Globally Are Shorting The Dollar This chart, courtesy FT Alphaville, compares the inverted dollar index with total Foreign Financial Commercial Paper in dollars. As you can see, as the dollar's gotten (much) cheaper, commercial paper issuance has soared. Everyone wants to borrow in the dollar on the bet that it will be cheap to repay when the bills come due.
Monetizing the markets, the next stage? Gold implications What I predicted effectively has already happened. Central banks have monetized the markets to the tune of tens of $trillions worth. When I first wrote that, I thought to myself, ‘how will they actually do it? Surely, they cannot monetized $ten or twenty trillions?’ Well, they have, and they are. (Monetizing markets means central banks buy up troubled assets, stocks, etc with public money, putting a floor under them- another term they use for this is ‘quantitative easing’. One major way they all do this is to buy stock futures.)
Weak dollar raises talk of alternative world currency Just about every day seems to bring more bad news for the dollar. Recent months have witnessed a steady erosion in the greenback's value, down 16% since March against the currencies of the top U.S. trading partners. On Wednesday, the euro broke through the symbolically important $1.50 barrier for the first time in 14 months. Depending on whom you believe, a dollar hovering near its 52-week low represents either the market's devastating verdict on the Obama administration's profligacy or a salutary rediscovery of risk by newly emboldened investors.
Battered dollar struggles to gain traction The dollar was a touch weaker on Thursday, as it continued to trade around 14-month lows against the euro as global equities staged a late rally and boosted risk appetite. This undermined the dollar, which is a haven, prompting some switching out of the US currency. The dollar hit lows of $1.5027 against the euro, its weakest level since August 2008, in late afternoon New York trade. The dollar also eased slightly against the pound to $1.6623, fell 0.13 per cent to SFr1.0013 against the Swiss franc, but gained 0.38 per cent to Y91.31 against the yen.
Yuan Pegged Spurs China Exports Luring Pimco as Dollar Weakens Investors are the most bullish on the yuan in 14 months as China’s exporters say the currency’s link to the slumping dollar is helping revive sales. Contracts based on expectations for the currency’s value a year from now show the yuan will appreciate 2.8 percent, compared with estimates for 0.5 percent two months ago, data compiled by Bloomberg show. Twelve-month non-deliverable forwards touched 6.5440 per dollar on Oct. 20, the strongest level since August 2008. They were at 6.6384 yesterday, compared with a spot exchange rate of 6.8261.
Inflation fears drive dollar dip Oil prices surge as investors worry about deficit, Fed strategy Fears of inflation and large U.S. budget deficits drove the dollar on Wednesday to its weakest level since August 2008 and helped push oil prices to their highest in more than a year. The euro rose above $1.50, while crude oil prices climbed over $81 a barrel in trading on the New York Mercantile Exchange. Analysts said that investors and traders are worried that the Federal Reserve, fearing another dip in the economy, will hold interest rates low for too long and fuel a bout of inflation. And investors also fear that the Obama administration will be unable to rein in trillions of dollars of deficit spending used to revive the economy.
The Next Currency to Crash Jack's the best guy I know at currency analysis. I've known him for 16 years. Back in the mid-1990s, we worked 20 feet away from each other at a firm specializing in international investing. Jack taught me a lot about currencies and managing my trading (cutting your losses and such). . . . . . . . . In short, Jack thinks the Japanese yen today is like a ticking time bomb. It's ready to explode... We just don't know when. As of this month, the time may be right.
California moves east as New York nears a zero cash level. Think about this when you hear anything to do with stopping or curtailing QE.
Think about CIT’s major executive resignation before you become too happy about a $6 billion dollar loan from the private sector that would take the most senior debt level and therefore rights.
1968 to 1980 was a dress rehearsal as far as gold and the US dollar are concerned today.
Today is not a dress rehearsal where gold and the US dollar is concerned.
A permanent change in the US dollar’s international importance is in motion.
Is Euro set to displace Dollar as global currency? Since the beginning of currency, there has always been a “top dog” of the bunch. At any one time, there is always one dominant reserve currency for the world. There are lots of debates on which currency will be the next big thing and if there will one day be a one currency world. Today, the American dollar is the dominant currency, but a lot are speculating that the Euro may take its place. Forecasting this is very hard to do, so it will take time to see what the results will actually be. Some people don’t believe that the Euro will dominate the dollar, but will indeed share in its financial spoils. This in fact isn’t true because if you look back in history, all of the spoils go to the top dog.
10/22/2009 (1 of 2) Steep Market Declines Coming
10/22/2009 (2 of 2) Steep Market Declines Coming
Gold slumps as dollar rebounds on Chinese 'tightening' Gold futures closed lower Thursday as the U.S. dollar gained on concerns that Chinese government policies could cool a global economic recovery, reducing gold's allure as an alternative to paper currencies. Other metals also closed lower, with copper and silver shedding more than 1%. "There's some intermediate profit-taking going on. Any time you get a little bit of a dollar bounce, you see gold sell off," said Zach Oxman, managing director at TrendMax Futures, a commodities trading firm in Rancho Santa Fe, Calif.
Gold IS Gold IS the best game in town and when the music stops it may be the ONLY game in town that can yield any sort of return. The music I refer to here is the sound of spin given some measure of credibility (only to the un-initiated) by massive stimulus spending which has kept this farce of an economy on its last legs through various stages for 9 years. Why do I claim that gold is the best game in town? Gold has outpaced all investment classes over recent years - meaning that it IS the leading investment class of this decade. Gold IS at record highs and has broken above resistance in USD but you have heard all that already. Gold IS real money and vital to the monetary system at the highest levels, it IS real wealth and it IS a real store of wealth.
Gold prices in lofty range of $1,050-$1,060 Gold prices have shot through record highs two weeks ago and have since stayed in a lofty range of $1,050-$1,060 an ounce, due largely to a plunging US dollar. Two years ago, similar circumstances would have sparked predictions of an mergers and acquisition (M&A) feeding frenzy, but acquisition-minded miners are now exercising caution in valuing targets. Why is that? Aren’t the record gold prices an ideal bait?
Gold: Where is it headed? How will it perform? Gold prices are ruling above $1000 per ounce and there is no bull stops for the yellow metal even after Diwali in India. Market analysts are still clueless about the future of the metal as a prediction of gold’s future course is almost impossible at present. Still most of the analysts favour one thing that the metal will continue its bull run for some more time.
Gold Against the Dow - The Forest Ratio charts get into an important concept of relative value and relative gains. These things are extremely important in a paper currency world where the value of money itself is constantly changing. In 95% of cases, this is due to a loss of value in the currency, as all paper money (i.e. fiat) systems are abused until the currency becomes worthless and is replaced with a new currency. No historical exceptions actually. In other words, breaking even when investing may mean you are losing money and potentially lots of it. An example of this concept can be found using a nominal versus an inflation-adjusted chart of the Dow Jones to show two very seemingly dissimilar bear markets - the 1930s and the 1970s. Deflation versus inflation.
Gold prices climbing like a fast forward creeper We’ve all heard that inflation drives up gold prices. When inflation is on the rise, investors buy more gold to hedge their portfolios. And, with all the government bailouts and stimulus packages, it’s hard to deny that inflation is coming. After all, the money supply has more than doubled since October. Yet few people realize that inflation may be the least of the reasons why gold prices will push higher. Since bottoming out in 2001, gold prices have risen by nearly 300% and have twice targeted the $1000 mark. And that’s happened in a relatively “inflation-free zone.”
Gold's no-confidence vote on Obama Five peace-loving Norwegians have recently expressed their belief that Barack Obama holds great promise as a global leader. Much of the rest of the world is not nearly as sanguine, and the world is expressing its opinion openly, albeit quietly, by retreating from the dollar and embracing gold. Unfortunately, the flight from the dollar to gold has more ominous implications than does being jettisoned from sponsoring the Olympic Games.
10/22/09 Ron Paul at Joint Economic Committee Hearing
Crude Oil Poised for Fourth Week of Gains on Economic Recovery Crude oil traded above $81 a barrel in New York, poised for a fourth week of gains, on improved prospects for an economic recovery in the U.S., the world’s biggest energy consumer. Oil has advanced 3.3 percent this week as U.S. equities gained on better-than-estimated company earnings, boosting speculation that the worst recession since the 1930s is over. Prices also increased as the dollar declined against the euro, adding to the appeal of commodities as an alternative investment.
The World Is Terrified To Raise Rates Before The U.S. There's a huge problem with the entire world trying to have weaker currencies relative to the dollar right now. It's that they've all become slaves to U.S. interest rate policy, even more so than they already may have been. Right now, raising interest rates in any country before the U.S. does so is likely to strengthen that country's currency against the dollar, all else being equal. For example, Australia hiked its main interest rate to 3.25% from 3% early this month and the currency moved higher, both ahead of the hike, likely on anticipation, and then afterwards as well. There are many factors at play in currency markets, but higher interest rates make Aussie dollars even more appealing. For countries with a strong desire to keep exports competitive, that's a big problem.
Treasury Sets Record $123 Billion Bond Auction Week The U.S. government announced a record volume of $123 billion worth of bond auctions next week, which came at the high end of some analysts' expectations but caused no major market ructions. The figure beats the previous record of $115 billion set in July and includes two-, five- and seven-year notes in tandem with an offering of previously issued five-year Treasury Inflation Protected Securities. Upside surprises came in a slightly larger-than-expected seven-year note sale of $31 billion and a chunkier TIPS offering of $7 billion.
Taxpayers Fleeced When Leaders Tap Muni Marke State, county and municipal entities across the nation enjoy a privileged position in the debt markets -- the interest they pay is often tax-free and their market is lightly regulated. So, how is it possible that local entities frequently pay too much to borrow money? Consider the example of Build America Bonds. Part of President Obama’s economic stimulus program, the U.S. Treasury subsidizes their repayment, providing issuers with 35 percent of debt service costs. While BABs are taxable rather than tax- exempt, the subsidy gives them a far bigger advantage.
Reducing Deficit Key to US Rating: Moody's The United States, which posted a record deficit in the last fiscal year, may lose its Aaa-rating if it does not reduce the gap to manageable levels in the next 3-4 years, Moody's Investors Service said on Thursday. The U.S. government posted a deficit of $1.417 trillion in the year ended Sept. 30 as the deep recession and a series of bank rescues cut a gaping hole in its public finances. The White House has forecast deficits of more than $1 trillion through fiscal 2011. "The Aaa rating of the U.S. is not guaranteed," said Steven Hess, Moody's lead analyst for the United States said in an interview with Reuters Television. "So if they don't get the deficit down in the next 3-4 years to a sustainable level, then the rating will be in jeopardy."
Pay czar to slash bailout banks' salaries Heeding the public backlash against corporate bailouts, the Treasury's executive paymaster Kenneth Feinberg is preparing to slash by half the pay of top executives at the seven biggest beneficiaries of government aid. The cash pay of the top 25 executives at Citigroup, Bank of America, American International Group, General Motors, Chrysler and their financial subsidiaries will be slashed by 90 percent on average, and their stock compensation will be restricted so they cannot quickly cash it in, according to sources with knowledge of Mr. Feinberg's planned announcement later this week. Overall pay of the executives will average about half of what they earned last year.
10/22/09 Judge Napolitano on White House Slashing Salaries
Fed next to challenge Wall Street pay policies The Federal Reserve announced a proposal Thursday to set guidelines on the pay policies of U.S. banks. The central bank said it will examine 28 major banks and smaller, regional banks to make sure their compensation polices "do not undermine their safety and soundness." "Compensation practices at some banking organizations have led to misaligned incentives and excessive risk-taking, contributing to bank losses and financial instability," Fed Chairman Ben S. Bernanke said.
Fed pay rules to rein in risk-taking In a landmark moment for US finance, the Federal Reserve on Thursday unveiled draft rules for bankers’ pay extending the reach of regulators deep into the compensation practices of leading financial firms. But the Fed did not support a standard benchmark for the proportion of bonuses that should be deferred, in line with a proposal adopted by many European nations – raising fears over an uneven playing field between US and European banks.
U.S. cuts pay at bailed out firms, BofA hits back The U.S. pay czar on Thursday slashed compensation for top earners at seven bailed-out companies for the final two months of the year, and was immediately slammed by the country's largest bank which claimed the cuts could send talent fleeing. Many of the firms, which have together received more than $300 billion in taxpayer aid, issued conciliatory statements, but Bank of America said the ruling would put it at a disadvantage in competing with companies not under the pay czar's thumb.
Goldman should be allowed to fail . . . . So, if Goldman Sachs took on more risk when its equity was held by outsiders than with its partners’ own money, what can we expect now that the government implicitly accepts that it is “too big to fail”? Goldman has an even bigger incentive to risk other people’s money. This is the problem I identified last week, with the most powerful broker-dealer on Wall Street having the same privileges as the most mundane commercial bank. Not only does the fact that it may pay $23bn in bonuses this year upset people, but also its incentives are skewed. Solving this requires two things to be addressed. First, Goldman’s intention to operate as a institutional Wall Street firm – complete with its own hedge and private equity funds – while having government and Fed support. Second, its tradition of setting aside half its revenues each year for employees.
Goldman Exec: Inequality Is The Path To Prosperity This quote will not go over well, at least in America where we're really sensitive about this stuff. Lord Griffith Of Fforestfatch (really), a former Thatcher advisor and vice-chairman of Goldman Sachs (GS) international, defended his company's massive compensation at a debate.
Goldman Sachs vice-chairman says: 'Learn to tolerate inequality' One of Goldman Sachs’s senior advisers in London has said that British taxpayers should “tolerate the inequality” stemming from the investment bank’s plans to dole out a record $22bn (£13.4bn) in pay and bonuses this year for the sake of the “common good”.
A Deficit Revolt in the Senate? Within the next few weeks, probably as soon as the votes on health-care reform have been taken, the Senate faces the painful duty of once again raising the statutory limit on the national debt, as the House already has done. It is never fun for the party in power, but this year will be harder than ever on the Democrats. The final accounting on the just-ended fiscal year, delivered last week, showed a record deficit of $1.4 trillion, a gap that is the largest since the end of World War II when measured against the size of the overall economy. The Republicans are poised to pounce. Senate Republican leader Mitch McConnell accused the Democrats of "acting like a teenager on a spending spree with his parent's credit card with no regard to who pays the bill."
Lindsey Williams Back on Alex Jones TV 1/4: Total Economic Collapse of America in 2 Years?
Lindsey Williams Back on Alex Jones TV 2/4: Total Economic Collapse of America in 2 Years?
Lindsey Williams Back on Alex Jones TV 3/4: Total Economic Collapse of America in 2 Years?
Lindsey Williams Back on Alex Jones TV 4/4: Total Economic Collapse of America in 2 Years?
Community banks to get bailout money as Obama seeks to boost small business To spur lending to small businesses, it is 'essential that we make more credit available to the smaller banks and community financial institutions that these businesses depend on,' the president says. Reporting from Washington - President Obama, looking to boost lending to small business, will start using some of the leftover federal bailout funds to shore up smaller community banks and induce them to offer credit to firms he called the "backbone of the American economy." Smaller financial institutions are in greater need of capital to grow and expand, whereas the country's large banks have moved past their need for what's left of the $700-billion Troubled Asset Relief Program, Obama said Thursday at a family-owned storage business in suburban Washington.
The Gathering Storm in Commercial Real Estate (CRE) Commercial real estate is a house a cards about to collapse on multiple fronts for deeply structural reasons. Correspondent Thomas H.submitted this fascinating story: 'Pop-up' stores are becoming an overnight sensation. (Los Angeles Times) The basic idea is that retailers are not signing 5-year leases anymore--they're signing 20-day leases for 'pop-up' stores which have the lifespan of an insect and low costs for retailers seeking to unload discounted inventory in a hurry.
Bernanke: Speeding up credit card rules could hurt consumers Cautions against date move Federal Reserve Chairman Ben S. Bernanke warned Congress this week about efforts to move up the effective date of tough new rules for credit card companies, saying such action could hurt consumers as much or more than help them. Mr. Bernanke's comments may pose difficulties to the House Financial Services Committee as it anticipates marking up a bill this week that would move up enactment of credit card protection regulations to Dec. 1 - weeks earlier than scheduled. While the new deadline could benefit consumers by providing protections earlier than scheduled, it also would force the Federal Reserve to implement the new rules without giving the public and the credit card industry time for comment, "which could lead to unintended consequences."
Joblessness Will Stick Around The unemployment rate in the United States will not drop quickly or soon, says Wharton professor and author Jeremy Siegel. While it appears the recession is over, investors should not expect the unemployment rate to bounce back as quickly, he told the Wisconsin State Journal. While unemployment figures could start improving as soon as December or January, the rates will stay high for the near future, Siegel said.
Obama Wrestling With Jobs Outlook Increasingly alarmed over bleak employment forecasts, the Obama administration is searching for ways to boost job growth without adding to the federal budget deficit. White House economist Christina Romer, in remarks that ratcheted up the administration's pessimism, told a congressional panel Thursday that "labor market conditions will remain painfully weak through 2010." She said that the jobless rate, which hit 9.8% last month, would likely remain "at its severely elevated level" for at least another year.
Cap-and-Trade Will Cost Jobs A House Bill authorizing a cap-and-trade system of pollution credits will slow economic recovery by keep unemployment high, according to the head of the Congressional Budget Office. CBO Director Douglas W. Elmendorf said those employed in fossil-fuel industries would look for jobs in sectors that would fare better under cape-and-trade legislation, such as power and wind energy businesses. But, not everyone will find employment, which could slow economic growth over decades.
U.S. Initial Jobless Claims Rose More Than Forecast More Americans than forecast filed claims for unemployment benefits last week, a reminder that the labor market will be slow to recover. Initial jobless applications rose by 11,000 to 531,000 in the week ended Oct. 17, from a revised 520,000 the prior week that were the fewest in nine months, the Labor Department said today in Washington. The number of people collecting benefits fell, while those receiving extended benefits increased.
Arizona jobless funds running out Arizona will have to borrow about $600 million from the federal government to continue paying unemployment benefits through 2010, with the funds to be replenished by a sharp increase in company unemployment-insurance taxes. Without those moves, the fund used to pay out benefits would be empty by March, according to the Arizona Department of Economic Security. The state agency, which manages the program, stressed that the decision to borrow will not affect the 145,000 Arizonans currently collecting unemployment benefits. They should continue to file for and receive weekly payments in the usual manner.
Coloradans file record new jobless claims A total of 7,284 Coloradans filed new claims for unemployment benefits in early January, the largest in any single week since at least 1987, the farthest back that records are available. The number of Colorado claims filed during the week ended Jan. 10 was up by 2,820 from the previous week, and up 3,271 from the same week in 2008, according to data released Thursday by the U.S. Department of Labor. Nationwide, initial claims for unemployment benefits rose by 62,000 to 589,000 in the week ended Jan. 17, matching the highest level in 26 years, as employers continued to slash jobs amid slowing economic growth.
Colorado ‘mass layoffs’ jump in September The number of Colorado businesses that laid off 50 or more employees at a time jumped in September after reaching an 11-month low in August, the U.S. Department of Labor reported Thursday. There were 14 “mass layoffs” at Colorado companies in September, up from five in August, the Labor Department’s Bureau of Labor Statistics said in its monthly report on large-scale layoffs. BLS said that 1,036 Colorado workers filed for unemployment insurance as a result of mass layoffs in September, up from 374 in August.
Fraud Reported in Program to Help New Homebuyers Just as Congressional leaders are calling to extend a popular tax credit for first-time homebuyers, government investigators are reporting new findings that point to widespread fraud in the program. A previously undisclosed report from the Treasury Department's inspector general said that as of Sept. 30, the Internal Revenue Service had identified 167 suspected criminal schemes and opened nearly 107,000 examinations of potential civil violations. In late July, the I.R.S. announced its first successful prosecution.
10/22/09 John Stossel on Homebuyer Credit Fraud John Stossel talks about the not-so-surprising fraud in a government program designed to give tax credits to first time home buyers.
4-year-olds are getting federal tax credits for buying homes It’s more than passing strange that, in the U.S. Senate, Johnny Isakson of Georgia has been pushing an expanded tax credit for homebuyers while, in the House, U.S. Rep. John Lewis of Atlanta is examining abuse of the same. The following paragraphs are from Lewis’ opening statements at a hearing held this morning by a House Ways and Means subcommittee, which the Georgia congressman chairs:
Foreclosures Are More Profitable Than Loan Modifications, According To New Report Mortgage companies are more likely to foreclose on homeowners than modify their loans because they make more money off foreclosures, argues a new report by a consumer advocacy group. While homeowners, lenders and investors typically lose money on a foreclosure, mortgage servicers do not, says report author Diane E. Thompson, of counsel at the National Consumer Law Center. Servicers are the companies that manage the mortgages and collect payments.
Foreclosure leads to cheap home auctions on eBay Apparently the U.S foreclosure crisis has cheap home buyers making bargain purchases on eBay. With some moderate sized homes selling on eBay outright (free and clear of liens) for less than $5,000.One cheap home sale took place October 8, 2009, where a large 4 bedroom, 2 bathroom, Victorian home located in Oil City, Pennsylvania received 23 bids (Selling on eBay) before it sold out right for only $4,100. According to James Massey, publisher of www.AffordableHousingAuctions.com, a free website which tracks cheap home auctions nationwide. “In our current economic situation, people in hard hit areas are understandably scared to commit to a home purchase, it’s likely affecting the bidding. I’ve been seeing homes in those (economically distressed) areas selling for less than $5,000 for awhile now.”
We Are the Deadbeat Nation. Join Us. There is an important movement forming with the goal of making most or all real estate foreclosures go away over the issue of securitization. Securitization entails bundling of your mortgage with other mortgages, slicing and tranching that bundle, and selling it as a bond or bonds. A mortgage servicer then takes over receiving and processing your checks, and in turn makes sure those further up the pipeline get paid. For mortgage bailout advocates, securitization has become a phrase like "cloning" or "warlords" or "health care reform." It is valuable because it is drained of meaning, and thus seems to offer an easy pro/con choice on ideas that are nebulous and often unrelated. Activists have picked up the idea that the securitization process means your mortgage either doesn't exist or is being manipulated against you.
Senate blocks Medicare payment bill The measure to overturn a scheduled 21% reduction in doctors' fees is blocked by a mixture of Republicans and centrist Democrats who objected that its $250-billion cost over 10 years was not offset. Reporting from Washington - With budget anxieties pervading the congressional healthcare debate, the Senate on Wednesday sidetracked popular legislation that would have increased Medicare payments to doctors by nearly $250 billion over the next decade. Voicing concern about adding that much money to the federal deficit, a coalition of 12 centrist Democrats, one independent and all the Senate's Republicans voted to block consideration of the bill, at least for now.
House bill would expand health coverage, repeal anti-trust exemption House leaders are closing in on an $871 billion health-care package that would extend insurance to millions of Americans who don't have it, raise taxes on the nation's richest families and repeal the insurance industry's long-standing anti-trust exemption, House Speaker Nancy Pelosi (D-Calif.) said Thursday. A measure to strip the industry of protection from federal investigations into price-fixing and other business practices won bipartisan approval in a House committee on Wednesday. This morning, Pelosi told reporters that she would include that measure in the health care package Democrats hope to bring before the full House early next month.
The Housing Slide Has Officially Resumed The last few Case-Shiller readings showed improved sequential home prices in many regions, but analysts widely expect the index to droop again, as the summer home buying season ends. We'll see. The next one will be crucial. In the meantime, other research indicates that the slide is back. Here, for example, is the FHFA, which today said that home prices declined 0.3% from July to August, after past months showed increases. This is an interesting chart showing home prices off the peak.
Home Prices Tick Down 0.5% in September, Says Altos The 10-City Composite Index of house prices declined 0.5% in September and 1.1% during the third quarter, according to real estate market data provider Altos Research. The index is a measure of home prices based on summaries of metrics associated with active residential property listings. After bottoming out at $470,017 in January, it gradually increased to $509,030 in July before again declining and was $503,401 in September. Of the 26 markets Altos Research examines, asking prices increased in only five, including Los Angeles, which experienced a 1.5% increase, the largest of the 26 markets. Phoenix had the largest monthly decrease of 3.7%.
Housing, tax credits, and realtors So, the home buyers tax credit is in the news again and it's becoming quite controversial... Proponents would like to see the program extended well into next year and have the credit expanded to $15,000 (or more), removing the first-time home buyer requirement which, by the way, really didn't restrict this to new home buyers at all, just those who hadn't owned a home in the last three years.
A 28% Plunge In Our Standard Of Living Crisis & Globalization For the average person, what is the immediate danger from the financial crisis? Not just the financial crisis itself, but the government and Federal Reserve's response to the financial crisis, which is essentially to create trillions of dollars out of thin air? For you and me, what’s the immediate, tangible danger of this limitless bailout of the most politically powerful special interest group in America, the bankers of Wall Street?
Bill giving FDA new powers to oversee food supply has wide support Industry and public backing -- a recent poll showed 90% of voters favor measures similar to those in the legislation -- add up to a 'quick win for both parties,' supporters say. Reporting from Washington - Legislation granting the Food and Drug Administration new powers to oversee the nation's food supply has elbowed its way onto Congress' crammed calendar with bipartisan support and rare agreement between consumer groups and an industry stung by product recalls. The legislation, sponsored by Sen. Richard J. Durbin (D-Ill.), would require the FDA to step up inspections of food facilities and to issue new rules to improve the quality of imported food and to combat contaminants in fresh produce. The measure also would give the agency authority to recall products on its own, instead of relying on industry cooperation.
FCC to begin crafting 'net neutrality' rules Federal regulators took an important step Thursday toward prohibiting broadband providers from favoring or discriminating against certain kinds of Internet traffic. Despite the concerns of the agency's two Republicans and prominent telecommunications companies, the Federal Communications Commission voted to begin writing so-called "network neutrality" regulations. Proponents say the rules would prevent phone and cable companies from abusing their control over the market for broadband access. FCC Chairman Julius Genachowski said the rules are needed to ensure that broadband subscribers can access all legal Web sites and services, including Internet calling applications and video sites that compete with the broadband companies' core businesses.
[Note from the WebBabe on Net Neutrality: The Net is the last bastion of freedom; government involvement always muddies the waters even if original objective appears to be beneficial. This matter warrants your close scrutiny so let your elected officials in Washington D.C. know this is not slam/dunk legislation in the minds of the voting public (i.e. taxpayers, voters). Learn about the REAL "Rules of the Net" ISBN: 0786881356 - book written in 1996 (out-of-print but available at www.abebooks.com) then you will understand why. Just my .02 worth]
FCC moves forward on net neutrality rule-making in unanimous vote With a unanimous vote to move forward on a rule-making process for how the federal government will police access to the Internet, FCC Chairman Julius Genachowski won a victory on his first major policy issue at the agency. The chairman, picked by President Obama, said, "The heart of the problem is that, taken together, we face a dangerous combination of an uncertain legal framework with ongoing as well as emerging challenges to a free and open Internet." Republican Commissioners Robert McDowell and Meredith Attwell Baker voted in favor of the proposal but said they dissented on "facts" of the proposal. They said their votes are for the beginning of a data-gathering process, which should last at least 120 days. They did not say whether they will vote in favor of ultimate rules and have disagreed that the Internet appears to need more regulation. "Today we do disagree on substance. I do not agree with the majority’s view that the Internet is showing breaks and cracks and that the government ... needs to fix it," McDowell said. "Nonetheless it is important to remember that the commission is starting a process, not ending one."
Net Neutrality: A Brief Primer . . . . Neutrality advocates often portray the policy as a way of keeping the Internet free from corporate control. But the truth is that there are big corporations, and big corporate interests, on both sides. On the pro-neutrality side are the companies whose businesses operate at the edge of the web: Silicon Valley Web services like Facebook, Amazon, Google, and Twitter. On the other side are the companies who manage the Internet's core: ISPs like Comcast, AT&T, and Verizon. Much of the debate comes down to a power struggle between these two interests: Will network owners and administrators be allowed to determine access rules, prices, and traffic-management mechanisms on the networks they control? Or will the government step in and regulate those networks, forcing them to operate more or less as dumb pipes, thus shielding the edge-network, web-service companies whose business models rely on those networks from management practices that they don't like?
***** VERY IMPORTANT FIGHT *****
FCC Approves Net Neutrality Rules, Now the Fight Begins The FCC approved strong openness rules for wired and wireless broadband connections to the internet Thursday, leaving the details of the rules open to public debate for the next 60 days. The move will gratify President Obama’s grassroots supporters and internet services like Google, but draw the wrath of large telecoms like AT&T and the wireless industry. The FCC’s five commissioners unanimously agreed to expand and codify rules from 2005 that require cable and DSL providers to allow their customers to use whatever devices or online services they want so long as they don’t hurt the network. A similar rule applied to AT&T’s phone monopoly in the 1960s led to the fax machine, the football phone and the internet.
The 107-page FCC proposal (.pdf) was made public several hours after the vote. However, the rules are only a draft and will be subject to intense public debate and lobbying in the next 60 days. After that, the FCC will issue final rules, which will then likely face court and Congressional challenges.
McCain introduces bill to block FCC's net neutrality rules U.S. Sen. John McCain, (R-Ariz.), has introduced legislation that would block the U.S. Federal Communications Commission from creating new net neutrality rules, on the same day that the FCC took the first step toward doing so. McCain on Thursday introduced the Internet Freedom Act, which would keep the FCC from enacting rules prohibiting broadband providers from selectively blocking or slowing Internet content and applications. Net neutrality rules would create "onerous federal regulation," McCain said in a written statement.
The NET is already being thoroughly policed - we don't need MORE rules & regs aimed at networks and ISPs for casual users (i.e. most of us)
Oct. 23, 1995: First Computer-Network Wiretap 1995: A federal judge for the first time authorizes a wiretap of a computer network. It leads to hacking charges against a young Argentine for breaking into sensitive U.S. government sites. Arrested and later extradited to the United States was Julio Cesar Ardita, who was 21 at the time. His online name was “griton” — Spanish for “screamer.” The hacks, using a dial-up modem, were traced to his parents’ Buenos Aires apartment, located near the university where Ardita was studying computer science. U.S. authorities said he first accessed a system at Harvard University’s Faculty of Arts and Sciences. Using a sniffer, he obtained passwords as users accessed other systems.
Senate OKs FBI Net Spying - 09.14.01 [legislation after 9/11] FBI agents soon may be able to spy on Internet users legally without a court order. On Thursday evening, two days after the worst terrorist attack in U.S. history, the Senate approved the "Combating Terrorism Act of 2001," which enhances police wiretap powers and permits monitoring in more situations. The measure, proposed by Orrin Hatch (R-Utah) and Dianne Feinstein (D-California), says any U.S. attorney or state attorney general can order the installation of the FBI's Carnivore surveillance system. Previously, there were stiffer restrictions on Carnivore and other Internet surveillance techniques. Its bipartisan sponsors argue that such laws are necessary to thwart terrorism. "It is essential that we give our law enforcement authorities every possible tool to search out and bring to justice those individuals who have brought such indiscriminate death into our backyard," Hatch said during the debate on the Senate floor.
Strapped Colorado colleges want relief from unfunded state mandates Cash-strapped Colorado colleges will not ask for more flexibility in raising tuition rates in the upcoming legislative session, but will seek to opt out of any state-issued funding mandates that do not come with funding increases attached. Representatives of a majority of the state’s public colleges and universities gathered at the Capitol Thursday to speak with Senate Majority Leader John Morse, D-Colorado Springs, about the financial struggles the schools are facing. The state has turned to higher ed to absorb more than $30 million in budget cuts for this fiscal year. And with the budget expected to shrink as much as $1.2 billion next year, school officials fear that they may get hit much harder.
America's gun spree could run out of ammo Fears of limits from a liberal president are firing sales, but gun-makers only have so many weapons in their arsenals. Private equity shop Cerberus plans to float gun-maker Freedom Group soon. It had better hurry. President Barack Obama's victory sent weapon sales -- and the valuations of firearms producers -- shooting upward. Falling backlogs hint sales could plunge. The U.S. gun bubble may backfire. Two sparks set off this speculative burst in the gun business. First, fears of economic calamity inspired sales of weapons -- Sturm, Ruger's 30 shot autoload SR-556 rifle is useful according to the company for shooting varmints and for "personal defense", presumably pesky biped varmints.
Johnny Gaskins and the End of Law As the federal government has become more powerful and more invasive, we have seen an explosion of new laws and regulations. Interestingly, as the number of laws increase, we have seen a similar decrease in anything that resembles the rule of law. The successful North Carolina criminal defense attorney Johnny Gaskins has found out the hard way that in the federal system, law has disappeared altogether. . . . . . . . . Johnny Gaskins was a keeper of the law who built his career defending those who disregarded it. But a jury decided Oct. 9 that Gaskins had gone from being an officer of the court to being a criminal. Gaskins, a Raleigh criminal defense lawyer, was convicted of dividing large sums of money into small deposits so that his bank would not fulfill an Internal Revenue Service requirement to report cash transactions of more than $10,000. The rule is intended to flag large sums of cash that might be tied to illegal activity.
Judge Napolitano: Facial Recognition Software to Find Fugitives is Illegal! Judge Andrew Napolitano speaks out against the use of facial recognition software to find fugitives and says it's an invasion of privacy and unconstitutional.
U.S. arrests 300 in raids on Mexican drug cartel U.S. law enforcement agencies arrested 303 people in 19 states over the past two days in the largest strike against a major Mexican drug trafficking cartel in the United States, officials said on Thursday. Attorney General Eric Holder said the sweep against networks of the La Familia Michoacana cartel involved more than 3,000 federal, state and local law officers.
China's push for oil in Gulf of Mexico puts U.S. in awkward spot Four years after denying a Chinese bid to buy Unocal, the U.S. may be in too weak an economic position to object. Rebuffing China could also push it into the arms of countries hostile to the U.S. Reporting from Beijing - A Chinese company's gambit to drill for oil in U.S. territory demonstrates China's determination to lock up the raw materials it needs to sustain its rapid growth, wherever those resources lie. The state-owned China National Offshore Oil Corp., or CNOOC, reportedly is negotiating the purchase of leases owned by the Norwegian StatoilHydro in U.S. waters in the Gulf of Mexico, the source of about a quarter of U.S. crude oil production. China's push to enter U.S. turf comes four years after CNOOC's $18.5-billion bid to buy Unocal Corp. was scuttled by Congress on national security grounds. The El Segundo oil firm eventually merged with Chevron Corp. of San Ramon.
Treaties and the Constitution On October 14, climate change expert Lord Christopher Monckton gave a presentation in St. Paul, Minn. on the subject of global warming and the threat to U.S. sovereignty if the U.S. joins the treaty to be debated in Copenhagen this December. Lord Monckton is wrong, however, when he states that the U.S. Constitution says that a treaty takes precedence over the Constitution, that the president can make it U.S. law by signing it, and that nothing can be done to reverse it. The Constitution is an act by We the People. Treaties and federal statutes are the enactments of our representatives. The U.S. Supreme Court has acknowledged the supremacy of the Constitution over both: It would be manifestly contrary to the objectives of those who created the Constitution, as well as those who were responsible for the Bill of Rights -- let alone alien to our entire constitutional history and tradition -- to construe Article VI as permitting the United States to exercise power under an international agreement without observing constitutional prohibitions. In effect, such construction would permit amendment of that document in a manner not sanctioned by Article V. The prohibitions of the Constitution were designed to apply to all branches of the National Government and they cannot be nullified by the Executive or by the Executive and the Senate combined.
Gates says moving ahead on Afghan troop policy U.S. Defense Secretary Robert Gates said on Thursday he is moving ahead with his recommendation on whether to send more troops to Afghanistan and would first tell the president before a NATO defense ministers meeting this week. Gates, speaking in Seoul after meetings with South Korean officials, gave no indication of what his recommendations to President Barack Obama may be regarding troop deployments. He was headed to the meeting in the Slovak capital of Bratislava that will be held on Thursday and Friday.
Webster Tarpley on Alex Jones Tv 1/3: U.S. Attacks Iran Via CIA-Funded Jundullah Terror Group
Webster Tarpley on Alex Jones Tv 2/3: U.S. Attacks Iran Via CIA-Funded Jundullah Terror Group
Webster Tarpley on Alex Jones Tv 3/3: U.S. Attacks Iran Via CIA-Funded Jundullah Terror Group
US Joins Ranks Of Failed States In any failed state, the greatest threat to the population comes from the government and the police... The US has every characteristic of a failed state. The US government's current operating budget is dependent on foreign financing and money creation. Too politically weak to be able to advance its interests through diplomacy, the US relies on terrorism and military aggression. Costs are out of control, and priorities are skewed in the interest of rich organized interest groups at the expense of the vast majority of citizens. For example, war at all cost, which enriches the armaments industry, the officer corps and the financial firms that handle the war's financing, takes precedence over the needs of American citizens. There is no money to provide the uninsured with health care, but Pentagon officials have told the Defense Appropriations Subcommittee in the House that every gallon of gasoline delivered to US troops in Afghanistan costs American taxpayers $400.
Fall Of The Republic 1/14: The Presidency Of Barack H Obama
Fall Of The Republic 2/14: The Presidency Of Barack H Obama
Fall Of The Republic 3/14: The Presidency Of Barack H Obama
Fall Of The Republic 4/14: The Presidency Of Barack H Obama
Fall Of The Republic 5/14: The Presidency Of Barack H Obama
Fall Of The Republic 6/14: The Presidency Of Barack H Obama
Fall Of The Republic 7/14: The Presidency Of Barack H Obama
Fall Of The Republic 8/14: The Presidency Of Barack H Obama
Fall Of The Republic 9/14: The Presidency Of Barack H Obama
Fall Of The Republic 10/14: The Presidency Of Barack H Obama
Fall Of The Republic 11/14: The Presidency Of Barack H Obama
Fall Of The Republic 12/14: The Presidency Of Barack H Obama
Fall Of The Republic 13/14: The Presidency Of Barack H Obama
Fall Of The Republic 14/14: The Presidency Of Barack H Obama
Financial Implosion and Stagnation Back To The Real Economy "The first rule of central banking," economist James K. Galbraith wrote recently, is that "when the ship starts to sink, central bankers must bail like hell." In response to a financial crisis of a magnitude not seen since the Great Depression, the Federal Reserve and other central banks, backed by their treasury departments, have been "bailing like hell" for more than a year. Beginning in July 2007 when the collapse of two Bear Stearns hedge funds that had speculated heavily in mortgage-backed securities signaled the onset of a major credit crunch, the Federal Reserve Board and the U.S. Treasury Department have pulled out all the stops as finance has imploded. They have flooded the financial sector with hundreds of billions of dollars and have promised to pour in trillions more if necessary-operating on a scale and with an array of tools that is unprecedented.
Drudge focuses on dollar decline with 18 'dollar' articles in 20 days; From Oct 1 -20, AllAmericanGold posted 134 'dollar' articles and videos.
Zeroing in on the dollar's decline On Tuesday, Matt Drudge ran a headline about the weakening U.S. dollar on his website, Drudgereport.com. In and of itself, that would be unremarkable, except that it was the 18th time Drudge had posted a link to a story about the weak dollar this month. And October was only 20 days old. Clearly, Matt Drudge has developed a fascination with the declining U.S. dollar. "He's fixated on it," said Tom Rosenstiel, director of the Pew Research Center's Project for Excellence in Journalism. "There's no question that Drudge can alter what people are paying attention to." Market watchers say it's unlikely that Drudge is actually moving the currency markets with his relentless attention.
Dollar's fall renews fears of higher oil prices Concerns about oil prices and inflation rise as dollar hits 14-month low against euro Hitting a 14-month low against the euro, the sinking dollar renewed concerns Wednesday about higher oil prices and other inflationary threats. A lower dollar can help U.S. manufacturers by making their exports cheaper for foreigners to buy. It also benefits factories in China, which pegs its currency to the dollar. But a weakening dollar hurts European businesses because their goods become relatively more expensive. Since early March, when the dollar hit a high for the year against the euro and other major currencies, it has declined about 12 percent against a basket of major currencies. On Wednesday, the dollar's value against the euro fell below the psychological barrier of $1.50. In response, oil prices jumped to a new high for the year, settling at $81.37 a barrel.
Doug Casey on Protecting Your Cash L: Doug, we talked last week about getting assets out of your home country, especially the U.S., where to take them and what to do with them. In so doing, you touched on the inevitability of currency controls just ahead, especially for Americans. Can you tell us more about that? Doug: Yes, I’m quite serious about what I said about "the grim reality of impending currency controls." As the global economy continues to deteriorate, governments will have to appear to be "doing something." It’s going to become very fashionable to institute some sort of foreign exchange control. Why might that be? Because obviously, people who are taking their money out of the country are unpatriotic…
Another new low for the Dollar
Gold advances as investors seek dollar alternative Gold gained for a third day in New York as a weaker dollar fueled demand for the metal as an alternative investment. Platinum and palladium reached the highest prices in more than a year. The U.S. Dollar Index slid as much as 0.5 percent to a 14- month low. Hedge funds and other large speculators hold their most-bullish position ever in futures, helping to propel gold 21 percent higher this year as a weaker dollar and rising government debt spur concern that inflation may accelerate. Gold futures touched an all-time high of US$1,072 an ounce on Oct. 14. “The dollar is weaker against other currencies,” Peter Fertig, the owner of Quantitative Commodity Research Ltd. in Hainburg, Germany, said Tuesday by phone.
How decisive is gold's move above $1000 an ounce? At this point, I am a little reluctant to say this is the final blast-off and we will never see gold trade below $1000 again, writes David Morgan of the Silver-Investor. Certainly the percentages are with the precious metals investors, and it seems gold has nowhere to go but up. As we know, you're at a level that has been resistance in the past ($1000 an ounce) – an area that proved resistance for quite some time. And once that level is penetrated decisively, then you have a strong probability that the trend is going to continue. In fact, we alerted our subscribers to that very fact! The biggest caveat is that the big, big picture is very tenuous going forward in the October/November timeframe. The powers that be seem to think that the recession is over, but the facts send a different message.
Gold rises above $1,060 on gains in euro, oil Gold prices clawed back above $1,060 an ounce Wednesday as oil rallied and the euro rose above $1.50 for the first time in 14 months. The metal continued to take heart from a steadily falling dollar. Investors were turning to gold as the depreciation of global currencies threatened the value of paper assets. Weak physical demand among jewelers and exchange-traded funds has put gold at the mercy of the currency markets, traders said. Spot gold was at $1,062.70 an ounce at 3:07 p.m. EDT compared with $1,054.00 late Tuesday in New York.
Has Gold Confirmed Weekly Breakout? With the new highs we have seen in October, the time has arrived where gold is making an important decision in its medium and long term price direction. In other words it has arrived at a major inflection point when viewed on a weekly price chart. We’ve been tracking this medium term breakout scenario and this is a follow-up to some of the recent articles published. Why Price charts? We live in a world where a few months ago, there was a glut of oil. That was about 25 dollars per barrel ago lower. If we were using the same formula in unemployment claims as we did in the past, the current unemployment reading would be 16% in the USA. Just because they’ve changed the formula and tell us its only 10%, the reality is that it’s really 16%. Yet, the stock market will think nothing of tacking on 3400 points in 6 months. How about the CPI (consumer price inflation)? That indicator is the most useless thing we have to measure inflation. The ONLY DEFLATION that I see is if you own gold. Then yes, the price of everything is going lower.
'Gold to touch $1,200 by December' Gold prices eased to under $1050 per ounce ahead of New York's midweek session opening, driven mainly by further light selling from speculators. The US dollar recorded only marginal gains overnight and was last seen hovering near the 75.50 mark on the trade-weighted index, while crude oil lost a somewhat more substantial chunk in value, falling more than $1.1 to very near $78 per barrel. Otherwise, conditions were muted, with very little in the way of activity being recorded in India, where potential buyers were seen clustering orders beneath the $1050 an ounce zone.
The New Gold Rush A remarkable piece of news came out of London last week. Harrods, one of Europe's best-known department stores, has begun selling gold bullion. This unprecedented move by the famous retailer reflects the rapidly growing appetite for investment-grade gold, which has been enjoying a bull run even as the world is bogged down in a global recession. Used as a hedge against currency weakness, especially the dollar, gold has been trading at record highs. Many analysts think this is no temporary spike, but a long-term surge that will continue as the word monetary system is pulled down by the mismanaged and collapsing dollar.
Gold coins, bars set to outshine jewellery MUMBAI (Reuters) - Gold investors in India, the world's largest consumer, are likely to outstrip jewellery buyers in 2-3 years with the economy on the rebound and buyers seeking new ways to protect their investments from pilferage. "The signs of heavy increase in investment demand are visible and may outperform jewellery demand in 2-3 years" said Anjani Sinha, president of Indian Bullion Market Association (IBMA), which represents about 10,000 jewellers across the country.
Arabian Gold: Will The Gulf go For Revaluation and a Gold Standard? Talk about revaluation of the Gulf currencies is back on the agenda as rising inflation exerts pressure on the Gulf dollar pegs, while at the same time rumors of discussions about linking a new single currency to a gold standard have been so emphatically denied that skeptics wonder if there is some truth in it. Over the past year Gulf States have seen inflation retreat from the double-digit levels of the oil boom years. But with oil prices having more than doubled since a low last December, those inflationary forces could be about to reassert themselves.
To All Who Value Gold and Liberty: When Will Atlas Shrug? History reveals, very clearly, that fiat currency always leads to destruction of wealth, disorder, political unrest and misery, every time, always. According to Keynes " Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some." Using the benefit of four hundred years of observation, we can say, beyond a shadow of a doubt, that men of no character will create fictions supporting the idea that fractional banking and fiat currency, if managed properly, will function to benefit mankind. But we know, as sure as we know that earth revolves around the sun, it is always used for theft - ALWAYS. Over the past 96 years the fiction building spinners of deceit have been quietly stealing from the poor, middle class and wealthy alike and then using the plunder to tighten the shackles of financial slavery.
Fish, Wasps, the Dollar & Gold The US dollar rally. My grandfather was in the orchard business. Fruit trees. He used to hang a big fish from the trees. The wasps that ate the fruit would eat the fish. They wouldn't just eat it, they would gorge on it in a frenzy, until they couldn't even fly. Then they would just fall to the ground. My grandfather was a pretty popular fellow with the wasps. Unfortunately for Team Wasp, my grandfather wasn't as generous as he appeared to be. He placed a bucket of water under the fish. As the greedy wasps ate too much, they did fall, but not to the ground. They landed in the water and drowned.
US Dollar Falling vs Gold (Sept 28, 2009)
The Cheap Dollar: Great News for Everyone Else I’d just like to send a special word of thanks to Chairman Bernanke on behalf of all the parts of the world that operate on dollars, or where the currency is explicitly or implicitly linked to the dollar. Thank you…your actions are really helping to stimulate the economy (outside of the USA). Example: These days you can borrow dollars for almost nothing and invest in property in Hong Kong or Dubai (where currency is tied to the US dollar), or in Tehran (where property is basically priced in dollars). Then you can watch it go up 20% to 30% a year in US dollars, gear that at 70% to 80% and all anyone can say is “Thank you!” And on top of that, seeing as all the Zombie Banks don’t want to lend to anyone in the US and are instead using the money that the Fed is handing them for free to speculate, for example, on the price of oil. Could it go to $100? Perhaps $200?
The perils of cheap money Here’s a little nugget from Germany. The regulator BaFin has woken up to the danger that near-zero interest rates are a major danger for the Germany’s €700bn life insurance industry. They may not be able to meet their premiums. If deflation takes hold, they risk going the way of all those life insurers that went bust in Japan during the 1990s. BaFin thought it had covered every possible shock – a share price crash, a debt crisis, etc – but nobody ever paid much attention to the long-term actuarial shock of low rates.
Hey Everybody! A New World Currency! Oct 1, 2009
Is alternative to dollar in works? Plan for 'Special Drawing Rights' creates competition for reserve currency The administration of President Barack Obama, without congressional authorization, is advancing a plan that could end the use of the U.S. dollar as the world reserve currency by setting up International Monetary Fund Special Drawing Rights to compete. The move comes as the dollar heads toward a 14-month low of $1.50/euro and as some top fund managers, including some of President Obama's top financial supporters, worry the decline will continue as long as Obama depends on China to fund trillion dollar budget deficits. It is Obama's promise to participate in a G20 nations agreement by giving $250 billion to the IMF to set up the alternative reserve currency that now has been documented in the final communiqué of the London meeting, according to the G20 website
Gold Futures Gain as Dollar Drops to 14-Month Low Versus Euro Gold rose for the fourth straight session as a decline in the dollar boosted the appeal of precious metals and other commodities as alternative assets. The euro topped $1.50 for the first time since August 2008 on optimism that the global economic recovery is gathering momentum, increasing demand for riskier assets at the expense of the greenback. Gold futures have climbed 20 percent this year, reaching a record $1,072 an ounce on Oct. 14, as the dollar slumped against major currencies. “Gold’s move is all dollar-driven,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. “You’re going to see continued erosion in the dollar. I’m very bullish on gold.”
Attack by Central Bank Lilliputians The US Federal Reserve continues to talk about their urgent Exit Strategy. My theory is they will be doing mostly talking and almost no doing. The nations that talk the least will be hiking interest rates the most, like Australia. The United States might be dead last in hiking interest rates. The credibility of the USFed will in the process continue to be harmed much more than already, which is rock bottom. The Dollar Carry Trade and the lost Petro-Dollar advantage will work to destroy the USDollar as the global reserve currency. The USFed will have to resort to unusual means to keep the world ‘interested’ and ‘involved’ in the USDollar at all. When they lose interest and involvement, the US$ will descend into the Third World. The USDollar will then be forced to find its true value, based on its own merit.
Media Litmus Test In a small bit of Washington irony, a government panel convened this week under the guise of ensuring 'expressive freedom' on the Internet, while at the same time the Obama Administration put Fox News on notice that ideological rectitude would be a prerequisite for White House engagement. This heightened wrangling with the media comes at a time when ordinary Americans are rapidly becoming disillusioned with the major parties. Their disgust is evident in innumerable web discussion sites that, for many, have replaced the major media outlets as the primary source of information. In its focus to keep control of the conversation, the Administration is seeking to disguise the fact that the 'change' Mr. Obama promised in the election is unlikely to materialize.
Why is the Fed so secretive and why must they rely on public ignorance? Our view is that the elitists are currently buying time for the dollar, and stalling the rally in precious metals, by weakening other currencies until they are ready for the big stock takedown/correction. This process of supporting the dollar is becoming extremely expensive and difficult, so they had to take the Dow down 200 points on Thursday to start some stock contagion in Asia and Europe to flush some money into dollars and treasuries. The FTSE, Nikkei and Hang Seng were all down big in the aftermath of Thursday's US market takedown. We believe that the Illuminati will probably try to punish all the stock shorts in mid October on options expiration day by having one final round of short-covering before taking the markets down for the big correction to start a dollar rally just as the precious metals seasonal rally goes into full swing. This yellow fever crash is just a repeat of last year's strategy, but it will not be as severe for purely political reasons. In this manner, they will flush everyone else out of their short positions so that only they can make any money when the boom gets lowered and there will be many put options that expire worthless in yet another round of total criminality reminiscent of what they just did to the gold and silver call options this month
A conversation with a Wells Fargo banker Part 1 of 3
A conversation with a Wells Fargo banker Part 2 of 3
A conversation with a Wells Fargo banker Part 3 of 3
TARP watchdog: Full repayment 'unlikely' The auto industry, AIG and other struggling recipients of the government's $700 billion Wall Street bailout will make it "extremely unlikely" that taxpayers will receive a full return on their investments, says a new report by the Treasury Department's independent watchdog. About 17 percent of Troubled Asset Relief Program (TARP) loans issued since the program began a year ago have been repaid, according to a 252-page report released Wednesdayby TARP's Special Inspector General Neil Barofsky. But with a handful of major bailout recipients battling for survival, such as General Motors, Chrysler and insurer American International Group (AIG), "full recovery is far from certain," says the study, which examines the Treasury's handling of TARP for the third quarter of 2009.
Big Banks: The Consensus Is Cracking Just when our biggest banks thought they were out of the woods and into the money, the official consensus in their favor begins to crack. The Obama administration’s publicly stated view – from the highest level in the White House - remains that the banks cannot or should not be broken up. Their argument is that the big banks can be regulated into permanently low risk behavior.
Ron Paul talks Economics on CNN
Fed’s Fisher Says U.S. Needs to Be ‘Mindful’ of Debt Sales Federal Reserve Bank of Dallas President Richard Fisher said the U.S. must return to fiscal sustainability to avoid flooding the market with excessive government debt. “We are issuing copious amounts of debt and I think we have to be very mindful of the fact that we can issue too much,” he said in an interview today with the Toronto-based BNN television network. The U.S. central bank doesn’t plan to raise interest rates “imminently,” he said. Referring to economic data, Fisher said “bad numbers are getting less worse” in the U.S., which faces a “tough slog” next year with growth “significantly below potential.”
Feinberg Said to Order 50% Pay Cuts at Rescued Firms Executives at seven bailed-out companies including Citigroup Inc. and Bank of America Corp. will have their pay cut by an average of 50 percent after negotiations with Kenneth R. Feinberg, the U.S. special master on compensation, two people familiar with the matter said. The cash portion of salaries for the 25 highest-paid employees will be slashed 90 percent, according to a person familiar with the plan who spoke anonymously because the details haven't been announced. Some cash will be replaced by shares that employees will be restricted from selling immediately, the same person said. An announcement could come this week.
U.S. to Order Steep Pay Cuts at Firms That Got Most Aid Responding to the growing furor over the paychecks of executives at companies that received billions of dollars in federal bailouts, the Obama administration will order the companies that received the most aid to deeply slash the compensation to their highest paid executives, an official involved in the decision said on Wednesday. Under the plan, which will be announced in the next few days by the Treasury Department, the seven companies that received the most assistance will have to cut the cash payouts to their 25 best-paid executives by an average of about 90 percent from last year. For many of the executives, the cash they would have received will be replaced by stock that they will be restricted from selling immediately.
Turn Goldman anger into government action Ratigan: Banks continue to steal from the taxpayers who bailed them out In a world where real competition, modern technology and lack of special government standing means most American businesses have no choice but to adapt and innovate — Wall Street's wimp's only apparent skill is rigging the game.
White House to push for big pay cuts Obama's pay czar will demand 50% decline in compensation, on average, for top earners at seven firms that received the most bailout funds. The Obama administration will soon order the nation's biggest bailed-out companies to drastically cut pay packages for their top executives, a senior administration official confirmed to CNN Wednesday. Kenneth Feinberg, who was named the White House's pay czar in June, will demand that the seven largest bailout recipients lower the total compensation for their top 25 highest paid employees by 50%, on average, the official told CNN.
Volcker Fails to Sell a Bank Strategy Listen to a top economist in the Obama administration describe Paul A. Volcker, the former Federal Reserve chairman who endorsed Mr. Obama early in his election campaign and who stood by his side during the financial crisis. . . . . . . . He wants the nation’s banks to be prohibited from owning and trading risky securities, the very practice that got the biggest ones into deep trouble in 2008. And the administration is saying no, it will not separate commercial banking from investment operations.
Like it or not, here comes more stimulus There's a push to extend some expiring provisions from the American Recovery and Reinvestment Act. But it will be done in bits and pieces. You won't see it all in one neat package. And you won't hear the White House call it stimulus. But there's a good chance lawmakers will decide to extend some of the stimulus measures included in the $787 billion economic recovery package passed in February and possibly create some new ones as well. On Wednesday, House Democrats are convening a forum of economists to debate the state of the economy, with a specific focus on job creation. And lawmakers are convening hearings on Capitol Hill this week to discuss the economic outlook and the state of the housing market.
Bailout's hidden costs SigTARP Neil Barofsky, overseer of the $700 billion TARP program, says the cost to taxpayers will be a lot greater than the government is letting on. The $700 billion bailout will ultimately cost taxpayers billions of dollars, but the government stands to lose much more than the money it's pouring into companies. Neil Barofsky, special inspector general for Treasury's financial sector rescue, wrote in a report released Wednesday that the bailout has several hidden costs. One is the hard cost of borrowing money to fund the rescues of banks and other companies. The others are, according to Barofsky, less tangible but no less important: The danger that comes with rewarding companies that took excessive risk, and the loss of the government's credibility with taxpayers.
The Warning (see full PBS video online) "We didn't truly know the dangers of the market, because it was a dark market," says Brooksley Born, the head of an obscure federal regulatory agency -- the Commodity Futures Trading Commission [CFTC] -- who not only warned of the potential for economic meltdown in the late 1990s, but also tried to convince the country's key economic powerbrokers to take actions that could have helped avert the crisis. "They were totally opposed to it," Born says. "That puzzled me. What was it that was in this market that had to be hidden?
"The Warning": Sneak Peek 1 | PBS
"The Warning": Sneak Peek 2 | PBS
In The Warning, veteran FRONTLINE producer Michael Kirk unearths the hidden history of the nation's worst financial crisis since the Great Depression. At the center of it all he finds Brooksley Born, who speaks for the first time on television about her failed campaign to regulate the secretive, multitrillion-dollar derivatives market whose crash helped trigger the financial collapse in the fall of 2008.
Derivatives Warning - Michael Greenberger interview This is a collection of soundbites from Prof. Michael Greenberger from the University of Maryland School of Law who was interviewed for a PBS FRONTLINE program concerning Brooksley Born, former chairman of the Commodity Futures Trading Commission, who attempted to regulate the secretive, multitrillion-dollar derivatives market whose crash helped trigger the 2008 financial collapse.
Housing numbers bother investors Dow drops from '09 high A disappointing report on housing starts made investors nervous about the economy Tuesday and sent stocks lower even as profits at many companies exceed expectations. The major indexes slipped about half a percent, and the Dow Jones industrials lost 50 points. Stocks retreated from 2009 highs after the Commerce Department said applications for home-building permits fell in September by the largest amount in five months. That is a discouraging signal for future construction. A rebound in the dollar from 14-month lows against other major currencies also hurt stocks by driving down commodities prices and, in turn, sending energy and materials companies lower. Bond prices rose after the government said wholesale prices fell last month.
Frozen Auction-Rate Bonds Cost U.S. $63.5 Billion The U.S. economy would get a $63.5 billion boost if businesses were able to free up their funds trapped in the auction-rate debt market based on student loans, a study prepared for holders of the securities shows. Businesses haven’t had access to about $25 billion in the auction-rate bonds since February 2008, when trading collapsed after the investment banks that managed the sales quit serving as buyers of last resort. Including student-loan securities held by banks, a total of $75 billion of the debt is outstanding, according to Mark Murphy, a spokesman for SecondMarket Inc., a New York-based clearinghouse for illiquid securities.
Americans save more but will they keep buying Treasurys? Americans may be embracing a more-frugal lifestyle, but when it comes to saving and investing, analysts are more skeptical the recession has changed behavior for good. After being burned during the credit crisis and the recession, Americans have flocked into safe assets and still hold more bonds than they have in years. But some see signs that the trend may not last, especially if once-frugal investors go back to rolling the dice with aggressive investments to recover losses elsewhere. "The desired savings rate has risen, but just as people say they will exercise every day, they don't necessarily do it," said Dick Hoey, chief economist at BNY Mellon.
Obama wants help for small businesses President Obama asked Congress on Wednesday to help community banks lend money to small businesses -- pillars of the U.S. economy hit hard by the recession. "Major banks need no new assistance," Mr. Obama said while visiting a small business in suburban Washington. "Make more money available so banks can watch [small businesses] grow from down the street, not Wall Street."
Obama administration shifts focus of rescue to small business, housing market The Obama administration is winding down several massive rescue programs that aided large banks and U.S. automakers during the heat of the financial crisis and launching more moderate initiatives to help small businesses and the housing market. The moves are being billed by senior administration officials as a "new direction" for the government's oft-maligned $700 billion bailout program, which has been credited for preventing a collapse of the financial system and angering politicians and ordinary Americans on both ends of the political spectrum for helping big banks who may have triggered the crisis in the first place.
Safety Nets for the Rich The headline next to it said: "Bailout Helps Revive Banks, And Bonuses." We've spent the last few decades shoveling money at the rich like there was no tomorrow. We abandoned the poor, put an economic stranglehold on the middle class and all but bankrupted the federal government - while giving the banks and megacorporations and the rest of the swells at the top of the economic pyramid just about everything they've wanted. And we still don't seem to have learned the proper lessons. We've allowed so many people to fall into the terrible abyss of unemployment that no one - not the Obama administration, not the labor unions and most certainly no one in the Republican Party - has a clue about how to put them back to work.
Population Reduction after economic collapse 2009
7 Months After Stimulus 49 of 50 States Have Lost Jobs The table below compares the White House's February 2009 projection of the number of jobs that would be created by the 2009 stimulus law (through the end of 2010) with the actual change in state payroll employment through September 2009 (the latest figures available). According to the data, 49 States and the District of Columbia have lost jobs since stimulus was enacted. Only North Dakota has seen net job creation following the February 2009 stimulus.
White House aide says hiring tax credit "complex" A White House economist said on Wednesday a proposed tax credit for business hiring was a "fairly complex" idea but that the administration was not at the stage of ruling in or out specific options for boosting the U.S. economy. As President Barack Obama and U.S. lawmakers consider ways to give an added lift to the economy and the job market, the business tax credit proposal has gained some attention on Capitol Hill. "It's a fairly complex idea," Jared Bernstein, chief economist to Vice President Joe Biden, told Reuters Television in an interview.
GM, Chrysler Recovery Not Assured, Rattner Says A successful recovery for General Motors Co. and Chrysler Group LLC is "far from assured" and will take time, the former head of the federal government’s auto task force said. The comments by Steven Rattner today may add pressure on GM and Chrysler to redouble restructuring efforts after the companies emerged from bankruptcy. GM chose a new U.S. sales chief this month, and Chief Executive Fritz Henderson said GM was “on path” to reach its financial goals. Chrysler will unveil its plan Nov. 4.
Walmart Sees 'Tough' Holiday Season With Late Buying Wal-Mart Stores Inc., the world’s largest retailer, expects a "tough" holiday shopping season with consumers delaying purchases, said John Fleming, chief merchandising officer. Walmart plans to reduce prices as the season advances in areas including home, food and gifts, Fleming told analysts today at a conference in Rogers, Arkansas. Consumers’ wallets "are challenged," Fleming said. The holiday season "is going to be tough, it is going to be late."
Unemployment in Nevada, Florida Increases to Record Unemployment rose in 23 U.S. states in September and hit records in Nevada, Rhode Island and Florida. Nevada’s jobless rate, at 13.3 percent, was the second- highest among U.S. states behind Michigan, the Labor Department said today in Washington. Unemployment in Rhode Island reached 13 percent, and Florida’s rate climbed to 11 percent, the highest since data began in 1976.
Easy-money mortgages still provided, by the feds o you thought easy-money mortgages with little or no down payment for people with bad credit was a thing of the past? Think again. You can get just such a loan today - and it's guaranteed by the federal government. Loans insured by the Federal Housing Administration (FHA) have become "the new subprime," and these loans are exposing taxpayers to the same kinds of soaring default rates and losses that brought down Fannie Mae and Freddie Mac as well as destroyed many banks and the private market for mortgage loans.
Mortgage applications plummet Industry group says activity sank by 13.7% last week as interest rates inched higher and tax credit expiration drew nearer. Mortgage applications plunged last week as rates ticked higher above 5%, an industry group said Wednesday, as the expiration of a home buyer tax credit drew nearer. The Mortgage Bankers Association said its index of mortgage application volume fell 13.7% in the week ended Oct. 16 from the prior week. The decline in activity came as rates on the widely-used 30-year fixed mortgage increased to 5.07% from 5.02%, according to the MBA. The week's adjustments included the Columbus Day holiday.
White House skeptical on renewing home buyers' credit The Obama administration is still considering whether to back extending a popular tax credit for first-time home buyers but is skeptical the government can afford the cost, Housing and Urban Development Secretary Shaun Donovan said Tuesday. The $8,000 tax credit, which will expire at the end of November, has boosted home sales in recent months, helping to revive a flagging housing market that had been a key factor driving the recession.
California Sending out Approximately 475,000 Notice of Defaults for 2009 yet Overall Foreclosures Declining. Shadow Inventory, Q3 Defaults, Toxic Loans. The State of the National Housing Market. California is on path for a record 2009. By the end of the year over 475,000 notice of defaults will be sent to California homeowners. This of course is simply from lenders that actually even bother to send a notice of default. The shadow inventory is growing and we have some concrete data showing the mismanagement in the housing market. Banks for the most part are playing hot potato with bad mortgages like Alt-A and option ARMs. It is interesting to note that today, we have data showing a record number of notice of defaults for 2009 yet actual foreclosures are less than 2008. What gives? Well for Q3 we found out that the median months behind before a lender filed a NOD is 5 months. That is right, 5 months with no payment before the lender even notices.
The Influenza Pandemic of 1918
Hospitals "Full-Up": The 1918 Influenza Pandemic
Bernanke Airs Concern on Speeding Up Credit-Card Law Speeding up the effective date of new credit-card rules to Dec. 1 from next year may result in "unintended consequences" for banks, said Federal Reserve Chairman Ben Bernanke. "Card issuers must be afforded sufficient time for implementation to allow for an orderly transition and to avoid unintended consequences, compliance difficulties and potential liabilities," Bernanke said yesterday in a letter to Spencer Bachus of Alabama, the ranking Republican on the House Financial Services Committee.
Democrats to Consider Credit Options for 'Underbanked' Americans On Friday, Rep. Barney Frank, chairman of the House Financial Services Committee, will join FDIC Vice Chairman Marty Gruenberg and others in a discussion of "new, safe and affordable credit options for America's underbanked." The policy discussion on Capitol Hill comes as banks - reacting to new credit card rules imposed by Democrats - start pulling the plastic from current credit-card holders, a move that is sure to lead to even more "underbanked" Americans. Press reports note that Citibank recently canceled a number of credit card accounts affiliated with the Shell, ExxonMobil, Citgo and Phillips 66-Conoco oil companies.
Pelosi Says House Health Plan Would Reduce Deficit, Citing CBO House Speaker Nancy Pelosi said health-care legislation being considered by her chamber would reduce the U.S. budget deficit over the next 20 years, meeting one of President Barack Obama’s main demands for the overhaul. Pelosi cited preliminary estimates by the Congressional Budget Office that various plans being debated by House Democrats for the biggest health-care expansion in four decades would cut the deficit over both the short and long term.
Obama Targets Insurance Companies Banks for Resisting Health-Care Changes President Barack Obama criticized insurance companies and banks as he urged supporters to pressure Congress to back his moves to revamp the health-care system and overhaul financial regulations. Insurers and the financial industry are resisting changes because they were "doing just fine under the status quo," the president told donors in New York City last night.
Republicans Look to Farmer to Retake U.S. House Stephen Fincher, a gospel-singing farmer, has never lived outside of Frog Jump, Tennessee. He hasn’t even visited Washington, D.C. Now he wants to work there. His profile -- a political neophyte with deep roots in his town of fewer than 400 people -- is emerging as a prototype for the kind of Republican candidate that his party is mobilizing in an effort to regain control of Congress next year. In background and temperament, Fincher fits his district, two hours north of Memphis, which is currently represented by Democrat John Tanner. It’s a formula that worked for Democrats in 2006, who under the leadership of then Representative Rahm Emanuel regained control of the House of Representatives for the first time since 1994. The Republican challenge will be at least as difficult.
Got a cell-phone or Wi-Fi router? Feds can search your house The FCC claims that its powers to inspect radio equipment in order to catch pirate radio stations means that it can also enter and search any home that has a WiFi access point, a cordless phone, a baby monitor, or a cell phone. "Anything using RF energy -- we have the right to inspect it to make sure it is not causing interference," says FCC spokesman David Fiske. That includes devices like Wi-Fi routers that use unlicensed spectrum, Fiske says.
"Make Mine Freedom" The more things CHANGE, the more they stay the same. It's freedom that makes America work. Based on actual events, this video interpretation of the 1948 classic will entertain you and make you think.
This is the bust in the boomtown that banks built Beneath Charlotte's shiny skyline, 'a new humility' CHARLOTTE -- A monument to the financial crisis is rising amid this city's thicket of skyscrapers: a gleaming, glass-walled trophy tower that was intended as a fitting headquarters for Wachovia's national banking empire. It will open instead as the headquarters of a regional power company. Wachovia, unable to survive a run of bad decisions, was swallowed by San Francisco-based Wells Fargo during the depths of the crisis last year.
If You Don't Hate the Cap and Trade Bill, Let Me Show You Section 304 . . . . bet you thought that if you bought a house, you actually own it and can, with reasonable exceptions, do with it what you want. You probably think that if you want to live in a log cabin, with wood stoves that belch smoke into the air for heat, and an old washer and dryer that don't have those little EnergyStar stickers on them you can because it's your life and your property. You paid for it with money you earned with the sweat of your brow and what the heck is America anyhow if a body can't live in the home they want furnished with the appliances they want? Ah, silly you. You didn't reckon on the Democratic Party's desire to control every miniscule aspect of your life. Let me introduce you to a little section of the Waxman-Markey cap-and-trade bill called the "Building Energy Performance Labeling Program". It's section 304 of the bill and it says, basically, that your house belongs to the state. See, the Federal Government really wants a country full of energy-efficient homes, so much so that the bill mandates that new homes be 30 percent more energy efficient than the current building code on the very day the law is signed. That efficiency goes up to 50 percent by 2014 and only goes higher from there, all the way to 2030. That, by the way, is not merely a target but a requirement of the law. New homes must reach those efficiency targets no matter what.
China, India Forge Alternative to UN Climate-Protection Treaty China and India’s joint plan to cut greenhouse-gas emissions provides the developing world with an alternative to the global climate treaty that wealthier nations want them to sign in Copenhagen this year, analysts said. Asia’s two biggest polluters from burning carbon-based fuels said they will collaborate on renewable power and energy- efficiency projects, in a memorandum of understanding yesterday in New Delhi. They rejected limits on their emissions proposed by industrialized nations under an international climate accord.
Barack Obama's Rules for Revolution - The Alinsky Model When you take a hard look at what Barack Obama already has done and plans to do, you quickly realize he is not Jimmy Carter. He is not even Bill Clinton. That's because Barack Obama, working in concert with the ultra-liberal socialists that run the Democrat party, is radically transforming America. Right now, the Freedom Center is pulling out all stops to expose the radical agenda of Barack Obama and the socialist leadership in Congress is trying to force on the American people.
Michael Savage We Must Stop The Copenhagen Climate Treaty
Ships Collide Off Texas, Cause Fuel Spill Two ships collided off the coast of Galveston, Texas, late yesterday, causing a bunker-fuel spill after a tank ruptured, the U.S. Coast Guard said. About 18,000 gallons (429 barrels) of fuel was spilled, Petty Officer Prentice Danner, a Coast Guard spokesman, said in a telephone interview today. The tank is no longer leaking and there were no injuries, according to a Coast Guard statement. Crew onboard Russia’s Sovcomflot OAO’s Krymsk, an 820-foot Aframax-class oil tanker, transferred fuel from a ruptured tank to an undamaged reservoir after the ship was hit by Malaysia’s American Eagle Tankers Inc.’s AET Endeavour, a 160-foot tug, during a lightering operation, according to the Coast Guard. Lightering is the offshore ship-to-ship transfer of oil.
Terrorist suspect arrested in Massachusetts Plot targeted U.S. shopping malls, politicians and military stationed in Iraq Federal prosecutors said Wednesday they have arrested a Massachusetts man in connection with terrorist plots that included attacks on U.S. shopping malls and on two White House officials. The suspect has been identified as Tarek Mehanna, 27, of Sudbury, Mass. He has been charged in connection with plotting with other terrorists from 2001 to May 2008 to carry out overseas and domestic terrorist attacks, which included killing shoppers and first responders at malls. However, none of the attacks was carried out because the conspirators could not obtain automatic weapons.
Brazil seeks to curb its soar-away currency South American nation reveals plans to impose tax on inward investment in stocks and bonds as value of real surges Brazil is taking extraordinary steps to curb the upward climb of its currency, the real, with a tax on inward investment into Brazilian stocks and bonds. The tax on capital inflows, which takes effect today, will take the form of a 2 per cent levy on foreign investment in the stock market and in fixed-income securities, such as government bonds.
Foreign investor tax sends Brazil’s markets reeling Brazil’s financial markets took a tumble on Tuesday as the Government erected a speed bump in the path of foreign investors, taxing their purchases of Brazilian stocks and bonds. The new levy of 2 per cent, imposed on Tuesday, is intended to put a lid on the soaring value of the Brazilian currency, which has been driven up by inflows of capital from foreign investors. News of the tax arrested the upward march of the Bovespa Index, Brazil’s stock market barometer, and pummelled the real, which fell 2.3 per cent against the dollar to 1.752 reals. The real has risen by more than a third against the dollar this year, creating anxiety among Brazilian exporters, who fear a loss of competitiveness.
Biden sent to soothe Europe on Russia overtures WARSAW | Vice President Joseph R. Biden Jr. arrived here Tuesday on the first leg of a delicate diplomatic repair mission that follows the Obama administration's abrupt reversal on missile defense, a decision that rekindled deep-seated unease in a region where the U.S. is seen as the only reliable counterweight to a potentially menacing Russian neighbor. By visiting with top Polish, Czech and Romanian officials this week, the vice president is hoping to reassure the three NATO allies that the United States remains deeply committed to their security. And, he intends his visit to serve as an important marker, coming 20 years after the fall of the Berlin Wall, in the evolution of American relations with the former Eastern Bloc nations.
Biden, Polish leaders agree on revised missile plan The Obama administration reached a new agreement Wednesday with top Polish government officials to place a new generation of missile interceptors on Polish soil, a surprising turnabout from just a few weeks earlier when it appeared the United States was ready to abandon its missile defense program in Eastern Europe. Vice President Joseph R. Biden Jr. and Polish Prime Minister Donald Tusk emerged from a lengthy private discussion to announce that Poland's participation in the missile defense system was, essentially, back on -- though in a new format that involves delivering a smaller number of defensive weapons in 2018. Mr. Tusk said through a translator that he considered the revised proposal "a very interesting idea." "We are ready to participate in this project," he said.
Prophecy, speculation, or scare tactics. We'll find out this weekend.
October 25, 2009 - America's Date with Destiny ... Six independent sources suggest October 25, 2009 is a critical date for the United States of America:
William Hague addresses US fears over Tories' EU allies William Hague, the shadow foreign secretary, yesterday defended the Conservatives' alliance with far-right parties in Europe during a meeting in Washington with the US secretary of state, Hillary Clinton. Hague sought to reassure Clinton about the Conservatives' partners, some of whose members have taken part in commemoration services for the Waffen-SS in Latvia and questioned the need to apologise for an anti-Jewish pogrom in Poland.
Israelis say deal near with U.S. on Mideast talks U.S. President Barack Obama's Middle East envoy is close to a deal with Israel on terms for resuming peace talks with the Palestinians, Israeli officials said on Wednesday. "There appears to be a meeting of the minds and hopefully the Israeli-Palestinian dialogue will be able to re-start in the near future," an Israeli official said, summing up talks held by negotiators for Prime Minister Benjamin Netanyahu in Washington.
Israel Property Market May Lose Top Ranking on Borrowing Costs Israel, the best-performing residential property market this year, may lose its standing after becoming one of the first countries to raise interest rates since the global recession began. "A bubble began to emerge this year, fueled by the Bank of Israel," said Shlomo Maoz, chief economist at Excellence Investments Ltd. in Tel Aviv. "The bank is now beginning to raise rates again to fight inflation." The higher borrowing costs will dampen demand for mortgages, leading to a drop in property prices by the middle of next year, Maoz said in an interview. He was one of two economists in a Bloomberg survey of 10 to correctly forecast an increase in the key interest rate to 0.75 percent in August.
China’s Economy Grows 8.9%, Fastest Pace in a Year China’s economy expanded at the fastest pace in a year as stimulus spending and record lending growth helped the nation lead the world out of recession. Gross domestic product grew 8.9 percent in the third quarter from a year earlier, the statistics bureau said in Beijing today. The median of 34 estimates in a Bloomberg News survey was for a 9 percent gain. Separate reports showed industrial production and retail sales advanced at a faster pace in September.
China Risks Property-Market 'Bubbles' to Boost Growth, Xie Says China is risking property-market "bubbles" to promote growth in the world's third-largest economy, according to former Morgan Stanley Asian economist Andy Xie. "People are looking at the bubbles as a way to gain economic growth in the short term," Xie said in a Bloomberg Television interview in Hong Kong today. "They are not sure of long-term damages that they may suffer."
U.S. envoy Holbrooke missing from Afghan talks President Obama called Richard Holbrooke "one of the most talented diplomats of his generation" when he named the globe-trotting foreign policy expert to be special representative for Afghanistan and Pakistan. But 10 months later, Mr. Holbrooke was anchored in Washington and far from the front lines of diplomacy that led to Tuesday's Afghan election deal. The Obama administration used other intermediaries to apply the pressure that got Afghan President Hamid Karzai to agree to a runoff after fraud-tainted elections. And when Mr. Obama praised his diplomatic team for its success, Mr. Holbrooke's name was pointedly missing. There was high praise for U.S. Ambassador to Afghanistan Karl Eikenberry and "great congratulations" to Sen. John Kerry, Massachusetts Democrat, who met with Mr. Karzai.
The Real Reason for More Troops in Afghanistan We can all look back at the wonderful decision that was made to send more troops to Korea. If we had not, we could have been bogged down in a quagmire there that would have required 50 plus years of American lives, involvement and money. What a wonderful decision it was to send more troops to Vietnam. If we had not, we could have lost over 58,000 soldier's lives; killed millions of Vietnamese soldiers and civilians and been forced to flee the country with our tails between our legs, deserting our allies to the horrors of communist retribution. Good thing our wonderful leaders had the wisdom and courage to send "more troops." Now we are forced with the same dilemma; send more troops or face military defeat.
- - - - - - - - - - - - - - - - Archived Page Link
- - - - - - - - - - - - - - - -
Wed 10.21.2009
Wake Up Washington! China Is Already Dumping the Dollar, Niall Ferguson Says Just as U.S. policymakers are too sanguine about China's military power, Harvard Professor Niall Ferguson says Washington D.C. is too complacent about China's ability to wean itself off the dollar. With about 1.7 trillion of dollar-denominated assets (mainly Treasuries) in its foreign currency reserves, conventional wisdom goes something like this: If China were to diversify away from the dollar or merely allow the renminbi to float, much less dump its greenbacks wholesale, they would be shooting themselves in the proverbial foot. That's both as investors and because further dollar weakness would put a damper on their biggest export market. (A weaker dollar makes foreign goods more expensive for Americans, meaning Chinese imports would become less "cheap.")
Recognizing a Bubble - Dynamics of Free Money . . . . The present reflation is fostered by a Fed printing money as if there were no tomorrow. However, there will be a tomorrow, and in our opinion, when tomorrow comes the Fed is likely to print even more money, not less. Here's why: while the government can try to boost this economy, it has been extremely "inefficient" at doing so, meaning that a lot more stimulus than many think - both fiscal and monetary - is likely to be necessary. The stimuli will go somewhere, though likely not where the government wants it to go; a possible worse side effect is that they may be creating a highly unstable environment dependent on continued stimulus.
U.S. flooding the world with dollars Europe Officials Concerned on Dollar, Euro’s Gains European finance officials are concerned the euro’s climb to a 14-month high against the dollar is eroding exports as an aide to French President Nicolas Sarkozy called the move a “disaster” for the economy. “Excessive volatility” in currency rates is “bad for economic development,” European Central Bank President Jean- Claude Trichet said in an unscheduled appearance at a press conference late yesterday after a meeting of euro-area finance ministers in Luxembourg. “It’s a problem which worries us,” said Luxembourg’s Jean-Claude Juncker, who led the talks.
Lipsky Says Currency Values Not Impeding Recovery Major currency valuations aren’t hampering the global economy’s return to growth, the No. 2 official at the International Monetary Fund said today. “In the near term, the currency relationships among the major trading currencies are not an impediment to recovery at this time,” IMF First Deputy Managing Director John Lipsky said in an interview on CNBC. He said the IMF monitors currencies “on a multilateral, inflation-adjusted, medium-term basis.”
Euro at $1.50 is 'disaster' for Europe France has given its clearest indication to date that the surging euro is a threat to Europe's fragile recovery and will not be tolerated for much longer. "The euro at $1.50 is a disaster for the European economy and industry," said Henri Guaino, right-hand man of President Nicolas Sarkozy. The currency has risen 15pc in trade-weighted terms since March, equivalent to six quarter of a percentage-point rises in interest rates. It briefly flirted with $1.50 against the dollar on Tuesday before falling back on intervention fears. What concerns European policymakers most is the lockstep rise against China's yuan. Beijing has clamped the yuan firmly to the weak dollar for over a year, quietly benefiting from the export advantages. It accumulated $68bn in reserves in September alone as a side-effect of holding down the currency. Fresh reserves are mostly being invested in eurozone bonds, pushing the euro higher.
Without dollar fall, U.S. will repeat crisis The United States may face a series of asset price bubbles and a rerun of the financial crisis unless it lets the dollar fall "at least" another 25 percent, economist Bernard Connolly said on Tuesday. Because fierce international resistance will likely prevent such a large dollar devaluation, Connolly told Reuters the Federal Reserve may instead have to extend indefinitely its artificial support of a struggling U.S. economy by purchasing another $2 trillion in U.S. Treasuries and federal housing agency debt.
Corporate America: Sinking Dollar Undermining Economy Chief executives from the biggest U.S. corporations worry that the slumping dollar could sap U.S. credibility around the globe, spur inflation and ultimately undermine the economy. The dollar has fallen to a 14-month low; and while a weaker dollar makes U.S. products cheaper overseas, chief executives gathered for the Business Council meeting in Cary, North Carolina, expressed deep concern that the anemic dollar signals serious jitters. "The issue is currency devaluation, and the worry is that it essentially lowers our credibility in the world," said Office Depot Inc CEO Steve Odland in an interview with Reuters on the sidelines of the conference. CEOs say that a slew of government spending programs on health care and other priorities could undercut economic recovery.
Dollar to Extend Slide as Global Economy Recovers, Pimco Says The U.S. dollar will extend declines as the global economy’s recovery prompts investors to shift away from U.S. assets, according to Pacific Investment Management Co., which runs the world’s biggest bond fund. Fundamental forces are set to put downward pressure on the dollar as the recovery gathers momentum, Pimco’s strategic adviser Richard Clarida wrote on the company’s Web site. Those forces include massive budget deficits, bets the Federal Reserve will keep borrowing costs near zero for an extended period, and prospects for a double-dip recession in the U.S., he said.
The U.S. Dollar Will Not Crash The dollar is not going to crash. There may be grumblings in foreign capitals and "secret meetings" between finance ministers but, for now, the dollar appears to be safe. Foreign countries don't trade in dollars because they like America. They do it because they have no choice. If they want oil, they need dollars; it's as simple as that. It's great to talk about a "basket of currencies" replacing the dollar, but that's still a work-in-progress. It might happen, or it might not; no one really knows. What's clear, is that we still live in dollar-centric world where paper claims on wealth are arbitrarily increased at will by a handful of unelected officials at the Federal Reserve. It's a process which relies more on Gutenberg than moral authority.
Is alternative to dollar in works? Plan for 'Special Drawing Rights' creates competition for reserve currency The administration of President Barack Obama, without congressional authorization, is advancing a plan that could end the use of the U.S. dollar as the world reserve currency by setting up International Monetary Fund Special Drawing Rights to compete. The move comes as the dollar heads toward a 14-month low of $1.50/euro and as some top fund managers, including some of President Obama's top financial supporters, worry the decline will continue as long as Obama depends on China to fund trillion dollar budget deficits.
The Dollar Is Dying a Slow Death, Says Niall 'Ascent of Money' Ferguson The weakening dollar is dying a slow death. "It's clear where we're headed," says Niall Ferguson, author of The Ascent of Money. "Ten years from now there will be more than one international reserve currency," he tells Tech Ticker. Ferguson dismisses the dollar loyalists, citing the British pound – the last international reserve currency - as his example. "These things don't last forever" but don't expect it to happen overnight. "It's a long multi-decade process," he states. Even with the dollar near a 14-month low against the Euro, he claims it's not without historical precedence for the greenback to lose "another 20%" this year.
Zero Discount Value of Gold and Dethroning the U.S. Dollar A truly major change in the global monetary system is beginning to materialize. The dollar is starting to be dethroned. Foreign governments and central banks are going to do the dethroning. I have no prediction as to how slowly or quickly this process will take. The major dethroners, the Chinese, are on record as favoring a slow process. The transition is already occurring, however. Now that attitudes have shifted among the dethroners, they are likely to keep at it. The transition will be away from the dollar’s use in international exchange and toward the use of stronger and/or more stable currencies. International deals are being made already in non-dollar currencies or through barter.
PRECIOUS-Gold steadies above $1,050/oz TOKYO, Oct 21 (Reuters) - Cash gold steadied above $1,050 per ounce on Wednesday after snapping a two-day gain a day earlier on a recovery in the dollar and a lack of physical buying.
Gold keeps rising on weak dollar Gold prices advanced further in late Asian trade Tuesday as the dollar continued its southward journey. Spot gold was seen trading at $1062.12 an ounce at 4.30 p.m Singapore time while December gold futures were at $1,063.60 an ounce at the same time. However, immediate-delivery bullion lost 0.1 percent to $1,062.69 in London. The U.S. Dollar Index slid as much as 0.5 percent to a 14- month low. Hedge funds and other large speculators hold their most-bullish position ever in futures, helping to propel gold 20 percent higher this year as a weaker dollar and rising government debt spur concern that inflation may accelerate.
Gold and the “Dis-Savings” Glut This morning the price of oil rose over $79. Gold is trading at $1,051…about one-tenth the price of the Dow. The Dow fell 67 points on Friday. Investors began to wonder if the news coming from the banks was as good as the first reports indicated. For example, the Bank of America reported losing a billion dollars on its consumer accounts. It is all very well for JPMorgan and Goldman to make money. They’re investment banks. And they’re making money thanks to the US government’s generous bailouts. They pay almost nothing for borrowed funds…in dollars, of course. And then they take the money and bet against the dollar. So far, those bets are doing pretty well.
Let’s Talk About Gold! Wow! What can you say about gold?! It’s amazing how quickly now things are developing. The dollar is falling faster than anyone guessed and the rise of inflation will be just around the corner. What we are entering now is equivalent to falling into a black hole. We have gone too far with the mindless money creation. Now the rest of the world realizes that any investment in the dollar is guaranteed simply to depreciate. Even light does not escape from the depths of a black hole. The US dollar sure isn’t going to do any better.
Greenlight's Einhorn holds gold, slams US policies David Einhorn, the hedge fund manager who had warned on Lehman Brothers' precarious finances, on Monday said he is buying gold and betting that interest rates will rise as he lambasted the U.S. government's financial chiefs for short-sighted policy decisions. The exploding size of the national deficit, which reflects government policies that have simply rewarded bad behavior with massive bailouts, will make gold and gold stocks as well as call options on higher rates good investments, said Einhorn.
Gold ends higher as housing data hits stocks, lifts dollar Gold finished slightly higher after a volatile session, as the dollar hovered near 14-month lows and crude oil futures touched a new high for the year above $80 a barrel. Gold for December delivery rose 50 cents, or 0.05%, to end at $1,058.10 an ounce on the Comex division of the New York Mercantile Exchange. It earlier rose to a high of $1,066.20 an ounce. The thinly traded October contract also gained 0.05% to finish at $1,057.80. The precious metal still finished well off morning highs as weak U.S. housing data and mixed earnings eventually led investors to sell stocks and oil and to buy dollars, reducing gold's appeal as a hedge against a weaker currency and rising prices.
Gold above $1,000 isn't close to 'uncharted territory' Yesterday's Bloomberg News story with gold price predictions, appended here, may be most important for noting how much the gold price has lagged behind even official calculations of inflation and the growth of the world's money supply, strong evidence of the international central bank gold price suppression scheme. But as much fun as gold price predictions are, they are not really very useful, for few of them take the suppression scheme into account and anticipate the international political decisions that will perpetuate or end it more than ordinary market decisions will. In fact the world has no idea of a fair price for gold, a free-market price, since gold has never traded that way in modern times. In modern times the gold price always has been subjected to some degree of government intervention, sometimes open intervention, more lately largely surreptitious intervention.
Gold's Real Inflation Adjusted High at USD 7,150/oz Gold is trading at $1.063/oz this morning and traded between $1,048/oz and $1,066/oz over the last 24 hrs. In EUR and GBP terms, gold is trading at €710/oz and £648/oz respectively. Gold continues to gradually eke out gains and consolidate at near record levels on continuing oil strength and dollar weakness. Buying of physical remains robust on all price dips and this bodes well for further record highs in the short term. Most analysts have been wrong and bearish on gold in recent weeks, months and years and the predictions made by more bullish analysts that gold would reach its inflation adjusted high of over $2,300/oz were far from the consensus. But there is a gradual realization among some analysts that we are living in unprecedented financial and economic times and quantitative easing, near zero percent interest rates and the explosion of public debt on western governments’ balance sheets all mean that gold is very likely to reach its inflation adjusted high of 30 years ago at over $2,300/oz.
Is the London gold market a fractional system? . . . . Adrian Douglas’ assertion is that there is at a minimum four owners for each ounce of unallocated metal held in London. His support for this is to apply the ratio of average daily share trading in GLD (11.9m) to its shares outstanding (325m), rounding to a ratio of 1:30, to an estimate of the daily trading in gold in London to derive the amount of gold London should have. This is then compared to an estimate of what London does have, resulting in the 1:4 fractional ratio.
Gerald Celente on 'green shoots' - there is no recovery The Corbett report 19 Oct 2009
Who Woke the Dragon China is a sleeping dragon. Let it sleep. If it wakes, it will shake the world. -Napoléon Bonaparte It has been said God doesn't speak to mankind because mankind doesn't listen. Be that as it may, it is certainly true that England didn't listen to Napoléon's warning regarding China. Contrary to Napoléon's advice, England woke China up. In 1999 China was a source of cheap labor, the dot.com bubble hadn't yet burst, the financial deregulation allowed by the repeal of Glass-Steagall still had to work its destructive magic and global growth appeared to be endless. Life, however, was about to change. In 2000 the dot.com bubble burst and in 2007 the largest bubble in history, the US real estate bubble collapsed freezing credit markets around the world. Investment banks Bear Stearns and Lehman's fell, stock markets crashed and out of the rubble of change China emerged as a world power.
Senators Unveil New Bill to Audit the Fed Proponents of auditing the Federal Reserve have a new bill to support their cause. Sen. Jeff Merkley (D., Ore.) and Sen. Bob Corker (R., Tenn.) introduced legislation today to require the Government Accountability Office to audit several of the central bank’s emergency lending programs that were created during the financial crisis. The two junior senators are joining a movement that has drawn more than two-thirds of the House and a third of the Senate. But their legislation, the Federal Reserve Accountability Act, is intended to sidestep criticism that auditing the central bank would hinder the Fed’s independence in conducting monetary policy. The bill directs the GAO — the investigative arm of Congress — to audit emergency lending programs that aren’t already subject to government audits. (Institution-specific lending programs, such as those tied to AIG and Bear Stearns, are already open to GAO review, as are programs conducted jointly with the Treasury Department.)
Hank Paulson Held A Secret Meeting With Goldman Sachs In Moscow During that long summer between the collapse of Bear Stearns and the collapse of Lehman Brothers, Hank Paulson held a secret meeting with the board of Goldman Sachs in Moscow. Andrew Ross Sorkin tells the tale of the meeting in his new book, Too Big To Fail: When Paulson learned that Goldman’s board would be in Moscow at the same time as him, he had [Treasury chief of staff] Jim Wilkinson organize a meeting with them. Nothing formal, purely social — for old times’ sake.
Bernanke Guilty of Coercion and Market Manipulation In April Let the Criminal Indictments Begin: Paulson, Bernanke, Lewis I made the case that BAC chairman Lewis was guilty of fraud and Paulson was guilty of coercion in regards to the shotgun wedding between Bank of America and Merrill Lynch. The case against Bernanke was weaker because of Bernanke's selective memory. When confronted by Congress with his role in this mess, Bernanke defense was that he did not remember what he said while Paulson called Bank of America a "Turn in the Punchbowl". Please see Bernanke Suffers From Selective Memory Loss; Paulson Calls Bank of America "Turd in the Punchbowl" for details. In July, Paulson attempted to defend himself, and in doing so Paulson Admitted Coercion. I asked again "Where are the Indictments?" Today, I am asking the same thing again.
Geithner says core TARP programs ending The Obama administration will shutter programs at the heart of a $700 billion financial bailout but remains focused on supporting a fledgling economic recovery, Treasury Secretary Timothy Geithner said on Tuesday. "We are now at the point where we can begin to wind down the programs that really defined TARP in its initial stages," Geithner told Reuters in an interview, referring to the Troubled Asset Relief Program.
If Bernake Doesn’t Raise The Fed Interest Rate Very Soon There Will Be BIG Trouble The debate about whether it was Alan Greenspan’s “fault” will continue for generations, the “other side” summed up their position nicely in a quip that came up in the debate about whether to let the Fed have more power, “ That’s like buying your teenager a sports car after he wreaked the family saloon”. Greenspan did point out at one stage that with $100 trillion of debt created by the private sector of which $20 trillion was “manufactured” between 1998 and 2007 by securitization of assets in USA, something that the Fed had, or elected to have, no control over, what the Fed did or did not do to with the base rate was largely irrelevant.
Top banks cut small business lending by $8 billion As small business loans continue to dry up, the President readies a new set of initiatives aimed at reversing the trend. President Obama is trying -- again -- to help small business get the cash they desperately need. The President will visit a small business in Maryland on Wednesday to present a series of initiatives aimed at increasing bank lending to small businesses, according to a White House official. The programs the President will unveil include an increase in the maximum amount businesses can borrow through the Small Business Administration's primary loan program, which currently stands at $2 million. In addition, the Treasury Department will expand access for smaller banks to the Troubled Asset Relief Program (TARP), a move aimed at spurring more local lending by community banks.
Big banks take your money and run The titans that survived last year's tumult have gathered deposits by the bushel. But they have shown less of a knack for lending it out. A river of cash has flowed into the biggest banks over the past year. But for borrowers, it has been more of a meandering stream. Deposits at the top five bank holding companies soared 29% in the year ended June 30, according to the Federal Deposit Insurance Corp. Yet only one of those banks -- PNC of Pittsburgh -- boosted its lending by the same magnitude, according to midyear data from regulatory filings.
Anatomy of a Scam: This “Prime Bank Program” Has Already Cost Investors Billions Two years ago, an associate of mine lost $100,000 because he didn’t listen to me. A year ago, I saved a manufacturing company from the same scam. And just last week I saved a friend of mine $300,000. For several years now, a far-fetched but seemingly plausible investment opportunity has been wreaking havoc across the globe. In the United States alone, an estimated $10 billion has been lost in this particular gambit. The scheme is typically hidden behind such legitimate-sounding names as “Prime Bank Trading Programs,” “High-Yield Investment Programs,” or “Roll Programs.”
At rescued banks, perks keep rolling BOSSES BENEFIT AFTER BAILOUT Fringe compensation rose 4 percent last year Even as the nation's biggest financial firms were struggling and the federal government was spending hundreds of billions of dollars to save many of them, the companies as a group were boosting the perks and benefits they pay their chief executives. The firms, accounting for more $350 billion in federal bailout funds, increased these perks and benefits 4 percent on average last year, according to an analysis of corporate disclosures filed in recent months.
Morgan Stanley Resumes PAC Giving After TARP Funding Repayment Morgan Stanley’s political action committee resumed donations in the third quarter of this year after the New York-based investment bank paid back its U.S. taxpayer rescue funds, Federal Election Commission records show. The PAC had ceased making campaign contributions until Morgan Stanley repaid $10 billion in June under the Troubled Asset Relief Program. After making no donations during the first six months of this year, Morgan Stanley gave $157,500 between July 1 and Sept. 30, including $120,000 in September. The investment bank made $374,000 in political contributions during the first nine months of 2007; its donation total for the comparable period this year represents a 58 percent reduction.
TARP Chief Elizabeth Warren Says We’ll Never Know Where TARP Funds Went Elizabeth Warren is the person charged with overseeing the U.S. banking bailout, formally known as TARP. In a recent interview with Aaron Task of The Economist, speaking on the proposed Consumer Financial Protection Agency, she said: “The banks, big banks, always get what they want. They have all the money, all the lobbyists. And boy is that true on this one. There’s just not a lobby on the other side.” No lobby on the other side? The “pro-Consumer Financial Protection Agency” side? Isn’t that the President of the United State’s side? Does that side need a lobby? Oh dear. The President needs a lobby.
Dow Could Go to 13,000. But Will Likely Reverse (Suddenly) By More Than 20% This is the analysis used to predict in May that the Dow would reach 10,000 without a major reversal, (personally I didn’t expect then that it would happen so quickly). I’ve put on my estimate of where I reckon it is now (in red). It’s approaching the “danger zone” (dotted black ring), although reversals when the mispricing is negative tend to be more restrained. That analysis was based on two lines of logic, the first is to calculate what International Valuation Standards calls “other-than-market-value” (some people call that “fundamentals” but since so many people have so many opinions on what that is I don’t use that word, and I do it strictly in accordance with IVS with some don’t).
Global Recovery "Tenuous," Years of Slower Growth Ahead, says Former IMF Economist The recession may be over but with unemployment hovering near 10%, talk of a V-shaped recovery is exaggerated, says Zanny Minton Beddoes, economics editor at The Economist. Like famed investor George Soros, Minton Beddoes believes in a 'backward square-root shaped' recovery, i.e., a sharp recovery followed by a prolonged bout of slow or no growth. "We may be in a world economy that congenitally has a slower speed limit as a result of this crisis," she says. At this point the "global recovery is tenuous," the former IMF staff economist tells Tech Ticker. More importantly, "it's a recovery on the back of government support."
Will High Unemployment Strangle the Recovery? The worst recession since the Great Depression has already eliminated 7.2 million jobs, and analysts figure 750,000 more jobs could disappear over the next six months. That means the administration of U.S. President Barack Obama may be forced to employ a second stimulus if it wants to preserve the fledgling recovery that has carried the Dow Jones Industrial Average back above 10,000. The U.S. unemployment rate officially hit 28-year high of 9.8% in September, according to the Labor Department. But that number grows to 16.8% when you add the number of “total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers,” also known as the “underemployment” rate.
Obama Administration Announcing Another Dumb Housing Bailout Plan If at first you don’t succeed, you can try, and try, and try again- especially if you can just hand the check to the taxpayers. Here’s how the Treasury Department described the latest housing program in their press release yesterday: On February18, President Obama announced the Homeowner Affordability and Stability Plan, a comprehensive plan to stabilize the U.S. housing market by supporting low mortgage rates, providing alternatives to foreclosures, and expanding access to refinancing and loan modifications through the Making Home Affordable program. The plan is working. Millions of Americans have refinanced to lower rates, mortgage markets are helping families buy their own homes, and our modification initiative is giving households a second chance to stay in their homes.
Mortgage help to aid states The Obama administration on Monday unveiled a program to support state and local housing finance agencies. The plan will help the agencies finance mortgages for first-time homebuyers and develop rental housing. The agencies have had a hard time raising money because of the housing crisis and credit crunch. This year, the agencies have sold about $4 billion in tax-exempt bonds -- one-fourth the amount in a typical year. That reduction is limiting the number of loans they can make. The new program uses mortgage finance companies Fannie Mae and Freddie Mac to help fix the financing crunch. The two companies will package mortgages made by the housing agencies and sell them as bonds to the Treasury Department.
Homes: About to get much cheaper National home prices are forecast to shrink another 11%. Miami, Las Vegas and Phoenix will record steep declines, but a few cities will actually post gains. If you thought home prices were bottoming out, you may be wrong. They're expected to head a lot lower. Home values are predicted to drop in 342 out of 381 markets during the next year, according to a new forecast of real estate prices. Overall, the national median home price is predicted to drop 11.3% by June 30, 2010, according to Fiserv, a financial information and analysis firm. For the following year, the firm anticipates some stabilization with prices rising 3.6%.
Employers Hold Off on Hiring Companies across the economy are holding off on hiring even as the profit outlook improves, amid economic uncertainty and their own success at raising productivity in rough waters. Hiring always lags behind in economic recoveries, but the outlook this time is worse, many economists say. Most forecasters now expect a prolonged period of high unemployment, even though the government is expected to report next week that the economy grew in the third quarter, after four quarters of contraction. That is sure to frustrate the jobless and could be a problem for the Obama administration.
Blankfein: 'We contribute to growth' Facing jeers over outlandish pay, the CEO of Goldman Sachs stresses the social goods of his firm's business. Furor over bonuses shouldn't obscure the role Goldman Sachs plays in fostering global economic growth, CEO Lloyd Blankfein said Friday. Blankfein, speaking at a breakfast conversation hosted by Fortune, emphasized that the investment firm serves "an important social purpose" by channeling pools of money held by pension funds and others to companies and governments around the world.
How Uncle Sam is killing your savings Ultralow rates are hurting the nation's prudent savers as they bear the brunt of Wall Street. This is a quiz. What do the record-high Wall Street bonuses have in common with the record-low yields for savers? Answer: They show yet another way that prudent people, especially those living on fixed incomes, are being screwed by the government's bailout of the imprudent. Here's the deal. The government is spending trillions to keep interest rates down in order to support the economy and prop up housing prices, and those low rates have inflicted collateral damage on savers' incomes.
Citi closes gas-linked MasterCards without warning Shannon Burdette tried to pay with her Shell Mastercard after filling up her gas tank this weekend but found the card rejected. Confused, she called the customer service line on the back of the card, issued by Citibank, and was told the account was closed because of something that appeared on her credit report. But when the Sykesville, Md., resident got a copy of her credit report online, the only negative thing she saw was "closed at credit grantor's request" on the Shell MasterCard account. "They said there was a routine review," said Burdette, who maintained that she and her husband, Brian, used the card regularly and always paid the bill on time. Burdette isn't alone. People across the country have been reporting similar experiences in postings on various consumer Web sites.
Latest bank fee is for paying off credit card on time every month You floss regularly, yield to oncoming traffic and use your credit cards judiciously, dutifully paying off your balance every month. You may believe that your exemplary behavior shields you from unexpected credit card fees. Sadly, that is no longer the case. Starting next year, Bank of America will charge a small number of customers an annual fee, ranging from $29 to $99. The bank has characterized the fee as experimental. But card holders who have never carried a balance or paid late fees could be among those affected.
Countrywide Mortgages Lead California in Defaults Default notices on California home mortgages rose almost 19 percent in the third quarter from a year earlier as job losses and falling property prices deepened the state’s housing recession, MDA DataQuick said. Loans originated by Countrywide Financial Corp. accounted for 6.8 percent of the 111,689 default notices recorded by MDA DataQuick. Washington Mutual Inc. originated 4.6 percent of the sour loans and Wells Fargo & Co. almost 4 percent, San Diego- based MDA DataQuick said today in a statement. “There’s a batch of truly nasty loans that were made in mid-2006,” John Walsh, MDA DataQuick’s president, said in the statement. “It’s taking a long time to process them.”
Finance Committee [Health Care] bill has been filed Senate Finance Committee members have been notified that the committee's health reform bill was filed today. S. 1796 weighs in at 1,502 pages, according to a Senate Republican leadership source. . . . . . To provide affordable, quality health care for all Americans and reduce the growth in health care spending, and for other purposes.
Income levels rise in 36 states, but not in Arizona Personal income rose in 36 states and the District of Columbia during the second quarter of 2009, a sharp turnaround from the 49-state decline in the first quarter. But new figures from the U.S. Bureau of Economic Analysis (BEA) show that Arizona incomes were down 0.1 percent, ranking the state 40th out of the 50 states and the District of Columbia. North Dakota registered the fastest income growth rate during the three-month span of April, May and June. Personal income jumped 1.5 percent in that state, compared to the period of January, February and March.
Unemployment: Now That's Sustainable! Every time the media reports the unemployment numbers, it reminds me of George Orwell's book, 1984. In the legendary book, a governmental organization referred to as the "Ministry of Truth" would report through the telescreens that the price of chocolate was going down. Winston Smith, the lead character of the book, knew good and well that the price of chocolate was not going down but was actually going up. We are certainly living in Orwell's world! The difference between ours and the fictional world of Orwell, is that we are not being propagandized about chocolate, but rather unemployment statistics. The controlled news media always attempts to "butter up" the bad numbers, by putting a positive spin on the fact that we are losing our jobs, month after month.
Higher jobless rates could be new normal Even with an economic revival, many U.S. jobs lost during the recession may be gone forever and a weak employment market could linger for years. That could add up to a "new normal" of higher joblessness and lower standards of living for many Americans, some economists are suggesting. The words "it's different this time" are always suspect. But economists and policy makers say the job-creating dynamics of previous recoveries can't be counted on now. Here's why: The auto and construction industries helped lead the nation out of past recessions. But the carnage among Detroit's automakers and the surplus of new and foreclosed homes and empty commercial properties make it unlikely these two industries will be engines of growth anytime soon.
Economic Shock: 1 in 6 Americans in Poverty The level of poverty in America is even worse than first believed. A revised formula for calculating medical costs and geographic variations show that approximately 47.4 million Americans last year lived in poverty, 7 million more than the government's official figure. The disparity occurs because of differing formulas the Census Bureau and the National Academy of Science use for calculating the poverty rate. The NAS formula shows the poverty rate to be at 15.8 percent, or nearly 1 in 6 Americans, according to calculations released this week. That's higher than the 13.2 percent, or 39.8 million, figure made available recently under the original government formula.
Personal Bankruptcy Filings Skyrocket In Connecticut Personal bankruptcy filings in Connecticut skyrocketed 44 percent in the third quarter compared with a year earlier as job losses and salary cuts squeezed household budgets burdened by high credit card bills, a new report showed Monday. There were 2,569 personal bankruptcy filings in the state in the three months ending Sept. 30, compared with 1,773 for the same period in 2008, according to the report from The Warren Group.
Internet Influences Positively Old Brain Researchers found that older adults who started browsing the Web experienced improved brain function after only a few days. In a research scientists stated that a much greater extent of activity was detected especially in the areas of the brain that make decisions, the thinking brain after just a week of practice, -- "which makes sense because, when you're searching online, you're making a lot of decisions".
Financing to Become Critical for Climate Treaty This week the world's major economies met in London this week. Some of these countries of the Major Economies Forum (MEF) are long-term, hardcore fossil fuel addicts – rich countries including the US, UK and the rest of Europe – while developing countries are only just getting a taste for high-carbon development. Gordon Brown is right that world leaders must engage seriously in securing a strong and fair agreement and that action must be taken now. The question, of course, is how.
Israel Wants International War Laws to Be Changed Tuesday Israel's Prime Minister Benjamin Netanyahu instructed his government to draft an initiative to amend the international laws of war after the Goldstone report on its war in Gaza. The security cabinet did not, however, discuss calls made by ministers for an internal investigation into the 22-day offensive at the turn of the year that killed some 1,400 Palestinians and 13 Israelis, an official told AFP. "The prime minister instructed the relevant government bodies to examine a worldwide campaign to amend the international laws of war to adapt them to the spread of global terrorism," his office said in a statement.
Asia Said to Be Leading the Globe Out of Crisis Ben S. Bernanke, the chairman of the Federal Reserve, said on Monday that Asian nations were pulling the global economy out of its downturn but warned that both Asia and the United States needed to do more to reduce global trade imbalances. Speaking at a conference on Asia hosted by the Federal Reserve Bank of San Francisco, Mr. Bernanke said Asian countries had bounced back from the global recession faster than the rest of the world and had reported “impressive” growth.
William Hague under pressure from US over Conservative allies in Europe Clinton urged to condemn party's links with Polish and Latvian right-wingers The shadow foreign secretary, William Hague, is to meet the US secretary of state, Hillary Clinton, in Washington tomorrow amid concern in the Obama administration about the Conservatives' European policy and Jewish outrage at their alliance with far-right parties with alleged antisemitic and neo-Nazi links. There is growing unease in the White House that David Cameron's Euroscepticism could undermine the ability of a Conservative government to influence events in the EU, threatening to weaken Britain in the eyes of the US. Clinton, while anxious not be seen to be interfering in a domestic election, has discussed the issue informally in Europe.
U.S. offers much, Russia gives little It's not easy to craft a new relationship with Russia. Just ask Secretary of State Hillary Rodham Clinton. During a two-day visit to Moscow last week, she went out of her way to improve ties, going beyond even what her friend and Russian-speaker Madeleine K. Albright tried when she held the job from 1997 to 2001. But while the body language is better, the Russians appear to be pocketing the U.S. moves and giving little in return, diplomats and analysts say. "So far, the 'reset' of the relationship has been mostly on the U.S. side and that remains the case after [Mrs. Clinton's] meetings," said Angela E. Stent, director of the Center for Eurasian, Russian and East European Studies at Georgetown University's School of Foreign Service.
Barack Obama's envoy hails 'great opportunity' in Afghanistan President Hamid Karzai's decision to call a run-off election next month was hailed today by Senator John Kerry, who had been hastily dispatched to Kabul by Barack Obama to make it clear to Karzai that resolution of the political crisis was a prerequisite for increased military support. Kerry said that lack of a clear outcome in the election had left "many Afghans with legitimate doubts about the future". He said: "With the nation facing extraordinary challenges, a time of real uncertainty has been transformed into a time of great opportunity."
- - - - - - - - - - - - - - - - Archived Page Link
- - - - - - - - - - - - - - - -
Tues 10.20.2009
Congressman Mike Rogers' opening statement on Health Care reform in Washington D.C.
Colorado insurers say health care bill would lead to "system collapse Colorado insurance executives, cautious supporters of health care reform throughout the past year, are now warning that current proposals could cause a "system collapse." At issue are what insurance companies consider absurdly low penalties for people who choose not to buy health insurance. Their concern: People will buy insurance only when they desperately need it, such as after they're diagnosed with cancer or heart disease. Healthy people might choose to pay the penalty, now proposed at a few hundred dollars per year, because it is far less expensive than buying insurance.
Poll: majorities support public option, health insurance mandate As Democratic congressional leaders and White House officials work to shape health care bills that will go to the House and Senate floors, a new Washington Post-ABC News poll shows that support for a government-run health plan to compete with private insurers has rebounded from its summertime lows and now wins clear majority support from the public. Americans remain sharply divided about both the overall health care package and President Obama's leadership on the issue, reflecting the intense partisan battle that has raged for months over the administration's top legislative priority. But majorities now back two key and controversial provisions: both the so-called public option and a new mandate requiring all Americans to carry health insurance.
Alan Grayson on Bill Maher: GOP Health Care Reform Would Be Letting You Bring A Gun to the Doctor
Gold at $2,000 Becomes Inflation-Adjusted Bullseye for ‘80 High Gold’s rally to a record means prices are still 53 percent below the 1980 inflation-adjusted peak. While gold rose 19 percent this year to $1,072 an ounce on Oct. 14, consumer prices almost tripled in the past three decades, eroding the metal’s value. Bullion hasn’t kept pace with the cost of bread, fuel or medical care. In 1980, gold hit a then-record $873 an ounce. In today’s dollars, that would be $2,287, according to the U.S. Labor Department’s inflation calculator.
Gold climbs above $1050 as dollar eases Gold prices advanced again Monday as the dollar pared early gains against major currencies and oil hit a new one year high. The precious yellow metal was seen trading at $1050.85 an ounce at 3.00 p.m Indian time while U.S. gold futures for December delivery on the COMEX division of the New York Mercantile Exchange rose $4.20 to $1,055.70 an ounce. Analysts said gold is on the way to set new record highs above the peak of $1,070.40 an ounce it set last week if the dollar continues to weaken against the euro, boosting interest in the metal as an alternative asset.
Gold is Money Does this strike you as a curious title for an FOFOA blog post? I'll bet some of you are saying yes while others are thinking "huh? What kind of a stupid question is that?" Onward... One of the greatest compliments I receive is when people say that I write in a way that anyone can understand. But one of the reasons my posts come across this way is that I really try to avoid stereotypical and dogmatic words. I especially try to avoid words deeply embedded in our elite academia. The problem is that these words carry so much baggage. They carry a standardized mental picture that is often wrong. In fact, some words carry multiple images specific to different factions of belief.
David Einhorn Has A Gold Treasure Trove Somewhere In Manhattan David Einhorn revealed that Greenlight Capital has amassed a hoard of gold somewhere in Manhattan. Einhorn, the hedge fund manager famous for shorting Lehman Brothers back before shorting Lehman was cool, was talking at the Value Investing Congress in New York today. He was discussing his reasons for buying gold as a hedge against inflation.
GOLD AND SILVER RALLY OVEREXTENDED OR JUST GETTING STARTED? Gold and Silver are slowly becoming mainstream news when it comes to investing. Many investors are wondering if these precious metals are overextended or just getting started. The precious metals doubled bottomed back in November of 2008 and have moved almost straight up since. Since November Gold is up over 43% while Silver is up an astonishing 84%! During that same time period the S&P 500 is up almost 28%.
Is Gold Too High? . . . . To answer our original question, is gold too high? Gold is now in the second upswing of the commodity pendulum. In the first upswing, it multiplied by a factor of 25. So far, gold has multiplied by a factor of 4. Are we near the end? Probably not. I regularly monitor this second upswing of the commodity pendulum and estimate where we are now as compared with the pattern of the 1970s.
Gold in Early Stage of Uptrend Measured in Foreign Currencies, Crude Oil Near Breakout The first chart shows the gold price divided by the US Dollar Index Bearish Fund. In effect, it shows how gold is moving when measured in the currencies the US Dollar Index consists of. The index is a weighted geometric mean of the dollar's value compared with:
Euro (EUR), 57.6% weight
Japanese yen (JPY), 13.6% weight
Pound sterling (GBP), 11.9% weight
Canadian dollar (CAD), 9.1% weight
Swedish krona (SEK), 4.2% weight and
Swiss franc (CHF) 3.6% weight.
Gold recently broke out from a cup and handle formation marked by the thick green line, and appears to be starting a significant move against paper currencies in general, not just the U.S. Dollar.
Gold's virtual hostage crisis continues on Comex Gold prices started the new week off in Asia overnight by reversing Friday's slim gains and re-testing the $1050 level as a strengthening US dollar was once again part of the background picture. More than 13.5 tonnes of gold flowed out of the combined balances of gold ETFs on Friday. During a week when the metal inked new records into the books? The overnight losses in gold did not amount to more than $5 however, and the yellow metal was able to retake the mid-$1050s prior to the start of Monday's NY session. The European common currency also fell in the early hours, for a second day, due to concerns that Old World financial policy makers will discuss the currency’s recent strength and what to do about it, when they meet later today.
What Does Adens’ $5,800 Gold Projection Mean for Gold and Silver Junior Equities? The only bull market we can compare the current eight year rise in the price of gold to is the ten year rise in the 1970s. The Aden sisters, Mary Anne and Pamela, have extrapolated the future price of gold using the same growth rate as in the ‘70s and applied it to the current bull market and reported their findings in their latest Aden Forecast. They determined that if one were to compare the bull market’s second rise from 1976 to 1980 to the current bull market we could see gold eventually reach $4,100 during the next run-up. They further reported that if one were to take the entire bull market gain in the 1970s at 2,300% and extrapolate it to today’s situation then $5,800 would be the equivalent upside target.
Gold bears gathering, but gold bulls defiant Argument pits technical indicators against fundamentals Gold ends the week weakly, and the gold bears scent blood. But the gold bulls are still bellowing. Last week saw the highest U.S.-dollar gold price ever, just over $1,070, and the highest London P.M. fix ($1,059.50). Yet by the end of the week gold was $13.50 off its peak, less than $3 up on the week. Many voices were to be heard predicting an important -- possibly short-term -- decline. The bears cite a variety of technical indicators. The bulls deploy sweeping fundamental arguments, often very impressively.
THE GOLD BASIS IS DEAD ? LONG LIVE THE GOLD BASIS! . . . . There seems to be circumstantial evidence that this month the gold exchanges are unable to honor their expiring contracts for which delivery notices have been issued in September. It has occurred in spite of a robust, even increasing, contango. Furthermore, circumstantial evidence exists that counterparties to these expiring contracts for future delivery — bullion banks, to be precise, the name of J.P.Morgan and Deutsche Bank being prominently mentioned — have offered bribe money up to 125 percent of the quoted spot price to holders of long contracts if they would take settlement in paper, on condition that the embarrassing affair will be kept secret. If true, these maneuvers are motivated by the desire to conceal the real gold basis, and to deny that gold is in or approaching backwardation. If the truth were widely known, then there would be a run on the bullion banks.. . . . There seems to be circumstantial evidence that this month the gold exchanges are unable to honor their expiring contracts for which delivery notices have been issued in September. It has occurred in spite of a robust, even increasing, contango.
Physical Gold Inches Closer To Monetization, Now Allowed As Margin CollateralHere's some hope for those who wish we could back to a gold standard. Physical gold can now be posted as margin collateral with the CME Group for any exchange product. Dow Jones: Clearing member firms will be allowed to post up to a maximum of $200 million worth of gold as collateral to cover performance bond, or margin, requirements, Hughes said. The policy was a byproduct of CME's recent launch of clearing services for over-the-counter London gold spot and forward?contracts, he said.
CME To Allow Gold As Margin Requirement Collateral Is JPMorgan in urgent need of gold replenishment? If one reads between the lines of today's surprising announcement out of the CME, that the Chicago exchange will allow the use of gold as collateral for margin requirements (for up to $200 million), with the actual physical gold to be stored at JPM's bank in London, that is one possible explanation. From a Nasdaq press release: U.S.-based clearing house CME Group Inc. (CME) will allow physical gold to be used as collateral for margin requirements on all exchange products, a spokesman said Monday.
Is your gold really there? Continuing doubts are being expressed that all the gold claimed to be held by Central Banks and others may not be there, or title is being held by several parties as the statistics just don't appear to add up. It doesn't just seem to be GATA which nowadays is questioning whether the volume of gold held in ETFs and in official reserves is really there - or perhaps there is more than one title to what is actually in the world's gold vaults? Would a run on gold bullion thus create panic among the Bankers? Banking has run for centuries with the banks themselves only keeping on hand a fraction of the money owed to depositors with the balances loaned out and not always immediately available, if indeed it is even there at all, so when there is a run - like that on Britain's Northern Rock last year - the bank concerned can find it tough to keep its head above water. Northern Rock, in the event, needed to be bailed out by the U.K. government.
Platinum: A Stronger Safe Haven Than Gold? Gold has scored a lot of press lately, and for good reason: Its price just keeps on making new records and breaking them. Just last week, the yellow metal recently struck a new all-time high of $1,072/oz. But on a year-to-date basis, another precious metal has quietly outshone gold's returns: platinum. As we've discussed before, platinum is both an industrial metal and an investment vehicle, used to make jewelry, construct automobile catalytic converters and as a safe haven for bullion investors. Last year, the white metal was still in hot demand: According to Platinum Today, in 2008, miners across the globe produced 185.7 metric tons of platinum, but consumers used 197.4 metric tons of the white metal—a deficit of 11.7 metric tons.
Ron Paul: US Dollar Collapse When China Stops Buying Debt In February of 2009 Ron Paul warned of a US Dollar collapse when China stops buying out debt in this video. There are many good points that Mr. Paul points out in the video but none were more prophetic then calling for the dollar bubble to burst. When the video was recorded the US Dollar index was around 86. Today the US Dollar Index is currently at 75.5. Another ironic fact about this video is that shortly after this video was recorded President Obama went on 60 Minutes and made the statement that “the dollar is still strong.” Unfortunately the dollar was not strong and we have seen that as a 10% drop has happened since the president’s statement. For those of you wondering why the value of the dollar continues to decline it is truly supply and demand.
Won Crushes Yen as Dollar Substitute in Asian Rally Asian central banks are running out of ammunition to fight their currencies’ biggest rally since 1998, paving the way for South Korea, Taiwan, Indonesia, Thailand and India to help lead foreign-exchange performance next year. JPMorgan Chase & Co.’s index of Asian currencies has risen 5.6 percent since its strongest two quarters in 11 years began March 31. Of 34 currencies ranked by Bloomberg forecast surveys, the won, Taiwan dollar, rupiah, baht and rupee will be among next year’s dozen strongest, median estimates show. The won has the best prospects and is the second-most undervalued of 16 major currencies as measured by purchasing power.
Dollar continues to push gold upwards Dollar hits a 14 month low, oil a 12 month high and gold trades at a new historical high. Once again the US dollar is on the skids, and while much of the action was probably focused on the Yen and the Pound, the greenback lost some 200 pips against the Euro and the dollar index dropped to a 14-month low amid concerns over the mushrooming U.S. budget deficit and debt burden. This decline in the dollar has led central banks to diversify, and their diversification moves could push the dollar down further. The dollar index is now below 76. Meanwhile, gold continued its record-breaking run with December gold touching the $1070 an ounce level, the highest ever. The metal is up 19% this year, heading for the ninth straight annual gain, while the dollar has dropped 6.6% against a basket of six major currencies, since the beginning of the year.
Dollar slips as N.Y. Fed clarifies steps toward 'exit strategy' The U.S. dollar declined on Monday after the Federal Reserve Bank of New York shed light on some recent activity that market participants had interpreted as preparation for removing liquidity from the financial system. The dollar index , a measure of the greenback against a trade-weighted basket of currencies, stood at 75.373 down, from 75.584 late Friday. The greenback also faced pressure as benchmark U.S. equity indexes advanced about 1%, luring investors into riskier assets and away from the relative safety of the dollar.
Banks Tell Traders To Keep Attacking The Dollar It's no wonder the Dollar keeps taking a beating: Traders at banks are being told to keep hammering away at the poor greenback. An internal RBS memo tells traders in no uncertain terms to: Stay with the established themes of
USD weakness and
carry/trends trump valuations.
One place to oppose this is GBP. In part, their bet is to be on the same side as emerging market governments, such as those in Latin America: Expectations of a relatively strong economic recovery and USD weakness should increase pressure on the region's Governments to intervene to stem FX appreciation.
Dollar Touches Lowest Level in 14 Months on Fed’s Rate Signal The dollar touched a 14-month low against the euro as the Federal Reserve signaled it will keep borrowing costs down while assessing a way to drain cash from the financial system. Canada’s dollar rose against the U.S. currency yesterday for the first time in three days, climbing to almost the highest level since July 2008 on a rally in crude oil. The U.S. dollar declined against 13 of the 16 most-traded currencies tracked by Bloomberg as a gain in stocks encouraged demand for higher- yielding assets at the expense of the greenback.
The European Union at a crossroads in 2010: an accomplice or a victim of the collapse of the dollar?" The major trends at work in the 4th and 5th phases of the global systemic crisis (the decanting phase and the global geopolitical dislocation phase) are unveiling every day (1). Everyone has now realized that the United States is being swept into an uncontrollable spiral involving widespread insolvency of the country and gross incompetence of the U.S. elite in implementing the necessary solutions. The foretold US default is well underway as exemplified by the falling dollar and the flight of capital from the country: only the name of the liquidator and the recognition of the bankruptcy are still missing, but it shouldn't be long now. Following the example of its leader, the Western bloc (which Japan has undertaken to move away from, implementing completely new political, economic, financial and diplomatic policies (2)), is in total decay symbolized by NATO's coalition in Afghanistan (3).
Debt Spiral Financial Holocaust Fiat Currencies Zero Bound, the Next Down Leg The demise of the G7 financial systems, currencies and economies continues to march along as incomes collapse. The social welfare states and their banking system’s Ponzi finance-based economies are BROKE, their obligations and promises irredeemable and unpayable. A debt spiral is in full view, irreversible with policymakers unable or unwilling and opposed to making the changes required to CREATE PRIVATE SECTOR INCOME GROWTH and control SPENDING, and which must be done to avert the final CALAMITY.
FLECKENSTEIN: THE FED IS REINFLATING OUR PROBLEMS Bill Fleckenstein has navigated this market flawlessly over the last year and more importantly, he has absolutely nailed the macro outlook. He believes the Fed is reinflating all of our problems and believes that nothing has been resolved over the last year: Fleckenstein is correct, and he has a lot of company that he may not be aware of that are with him. To list just a
RSS
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/images/quotes_7a.gif)