Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Fri 01.01.2010
Happy New Year, 2010!!
The Top Business Stories of 2009 It was a year of historic change in business, economics, and finance. General Motors and Chrysler made whirlwind trips through the bankruptcy process, and the U.S. Senate narrowly voted in favor of health care reform in a dramatic vote on Christmas Eve morning, bringing President Obama just this close to achieving a top campaign priority. In other times, any one of these sagas might have been an obvious and easy selection as the business story of the year. Yet 2009 was so full of drama that health care reform will have to settle for a position on the short list, and Chrysler might not have made the list at all if it hadn't been paired with GM.
2010 could be a year that sparks unrest IF THE world appears to have escaped relatively unscathed by social unrest in 2009, despite suffering the worst recession since the 1930s, it might just prove the lull before the storm. Despite a tentative global recovery, for many people around the world economic and social conditions will continue to deteriorate in 2010. An estimated 60m people worldwide will lose their jobs. Poverty rates will continue to rise, with 200m people at risk of joining the ranks of those living on less than $2 a day. But poverty alone does not spark unrest-exaggerated income inequalities, poor governance, lack of social provision and ethnic tensions are all elements of the brew that foments unrest.
2010: Walking away will gain cachet Why bother? That’s the question more underwater Americans are asking themselves about their mortgage. Trapped in the abyss of negative equity, more will decide to quit paying. As they should. About a quarter of all mortgages in the United States are on houses that are worth less than the unpaid balance of the mortgage, according to real estate consultant First American CoreLogic. About half of that group, 5.3 million borrowers, are 20 percent or more underwater. For 2.2 million, the property is worth less than half the mortgage balance. Those folks are called “homeowners,” but “homeborrowers” would be more accurate. All they own is an obligation to whatever entity services their mortgage. They’re essentially renters paying above-market prices.
12/29/09 Gerald Celente on Fox Business: 2010 Market Trends
The Shape Shifters of 2009 Columnist Suzanne McGee looks beyond the headlines to find a baker's dozen of people who are shaping Wall Street. It's that time of year again-time to step back and try and assess the last 12 months and think ahead to what awaits us in 2010. In that spirit, the final StreetWise column of 2009 takes a look at a baker's dozen of Wall Street (or quasi-Wall Street) figures who represent some important trend or issue during the year. It's not a list of the most influential people on Wall Street, of those with the biggest bonuses or most awe-inspiring titles. Rather, they're involved in something interesting and potentially transformative. Perhaps they are running a new business or tackling a new job. Or they could, like Lloyd Blankfein, simply be trying to return as rapidly as possible to "business as usual." This isn't intended to be a definitive list, but rather a starting point for debate and discussion about the most significant themes of 2009 on Wall Street and what may lie ahead. Happy New Year!
December 30 2009: The Year for Plan B Ilargi: The major difference between Tim Geithner and me, apart from my obviously superior looks, is that he is willing to gamble double or nothing with your money and your lives, and I would not be. Or, as one might also put it, he thinks the risk of misery for millions of American people is less important than his own personal career. I do not. Other than that, when it comes to the way he defines his policy decisions, there are no differences that matter, not his experience in guiding the New York Fed, or his palliness with the likes of Bob Rubin and other self-ordained rulers of the realm, nor all the inside knowledge that comes with that. The reason none of it matters is that Geithner doesn't know what he's doing.
Keys to Next Year: Stimulus, Employment As the 2009 ledger is tallied and closed, investors, consumers, business owners and traders await the arrival of 2010 with a mix of trepidation and optimism. Just more than a year removed from the near collapse of the U.S. financial markets, economists say 2010 will bring more stability, but joblessness will remain a major obstacle to full recovery. With unemployment topping10% and little hiring on the horizon, Main Street will remain cautious “We think the unemployment rate is going to keep rising through next summer, peaking at 10.6%,” said Marisa DiNatale of Moody’s Economy.com. “We think the extent of unemployment is the greatest risk to recovery.”
The Great Recession: A Hidden Depression? The story of the Great Depression is often told in pictures: while few people recognize the names "Smoot-Hawley" or "Schechter Poultry," photographs of bank runs and bread lines continue to pack a punch, almost 80 years after they were first snapped. But the Great Depression's position as our absolute standard for economic disaster carries an unintended consequence: The power of its images seem to overwhelm -- and minimize -- the economic troubles of our own time. After all, if it doesn't look like a Depression, how tough could things be?
Economic Disasters Need Taxpayer Support It’s one of those days. Reading the financial press is a delight; the big challenge is deciding what to laugh at first. Take your choice. There’s Martin Wolf, writing in The Financial Times, with a claim that is so staggeringly conceited, the gods must have marked him for punishment before the ink was dry. He thinks economists should be thanked, not merely for saving the world economy…but for saving civilization itself. We will come back to this later…after we’ve had a chance to catch our breath.
Peter Schiff With Charles Payne 1 Of 3 12_28_09
One Lie After Another Sometimes, you can overlook something that is right in front of you. That just happened with me. I'm talking about something I should have seen before now in silver and gold. A year and a half ago, the Commodity Futures Trading Commission (CFTC) published a 16 page public report denying there was any manipulation in the silver market, due to concentration by large short traders on the COMEX. The report, issued on May 13, 2008, by the agency's Division of Market Oversight (DMO) went into painstaking detail about how the short concentration in silver was no big deal. Certainly, the title, "Report on Large Short Trader Activity in the Silver Futures Market" is very straight forward. Here's the report - http://www.cftc.gov/ucm/groups/public
The Economy and 2010: What is your Resolution? With the recent unexpected drop in jobless claims, an uptick in consumer spending and New Year mirth, you might expect that recovery is truly in the wings. Saner voices still ring the bell of reality. The U.S. Government and many others focus on percentages, which don’t paint the real picture at all. Just look at the unemployment situation on a month-to-month basis in the U.S. and what this really means for Americans and you will begin to get a clearer picture of economic reality beyond having millions of Americans use their credit cards for a month to spur the illusion of economic growth. Nobel laureate economist, Joseph Stiglitz says that the U.S. economy will be permanently stunted if the government doesn't do much more to create jobs and to invest in the nation's potential.
Bubble-onomics: 10 Predictions for 2010 This analysis has got nothing to do with the much loved but now sometimes tarnished financial//economic theories that were so popular until mid-2008. Just some weird ideas for how market bubbles work; with roots somewhere between Entomology and International Valuation Standards. Some of the ideas were looked at by George Soros in his book on “Reflexivity” published in 1987 and in Bob Farrell’s “10 Market Laws” published in 1992. The first “hard” prediction that used this approach was made in January 2009 (“S&P 500 will turn at 675”), followed by one in February 2009 (“When it hits 675 Jump In!”), since then the approach has been used with varying degrees of success to predict the inflection points for oil, gold, treasuries, toxic assets, housing, and the Shanghai Index.
Can I sell gold at $5,000 in 2010? Happy New Year! 2009 will be remembered as an exceptional year for commodities. The commodities bull run this year has been fueled by gold, platinum, garlic and turmeric. Gold emerged as the singular driver that pushed the boom in commodities. Gold, gold, gold…everywhere we hear and read about the glistering yellow metal. As the year draws to a close, it is celebration time for gold scrap sellers as the yellow metal they bought for $700 per ounce an year back is worth $1100 now. That is a huge return that common people, investors and traders are lured to buy more and more gold.
Gold rallies as dollar eases, heads for 9th annual gain Gold rallied on Thursday, helped by a weaker U.S. dollar, a factor that has helped propel gold to a record high earlier this month and its ninth annual gain in as many years. The gain reversed a slide in bullion prices on Wednesday, when investors ditched gold as the dollar .DXY advanced on positive outlooks for U.S. business activity and housing. With gold looking to end the year up by around a quarter, investors will turn to the prospects for 2010, which are likely to largely hinge on how quickly the U.S. Federal Reserve moves to tighten monetary policy.
Gold Inches Higher, Ending Banner Year For the ninth straight year, the yellow metal will have increased in value as investors keep on buying, motivated by a widely held fear of impending inflation and a belief that the Federal Reserve, anxious to nurse a delicate economic recovery, will leave interest rates at historically low levels for as long as it can. In mild pre-holiday trading New Year's Eve, U.S. equities declined slightly, while the U.S. dollar index was slipping 0.04%. Gold, meanwhile, ended a two-day losing streak, bouncing $3.40 to $1,095.90 an ounce on the Comex division of the New York Mercantile Exchange.
Gold stays positive as greenback pares early losses YEAR-END position squaring enabled gold futures to hold onto some of their gains yesterday even as the dollar recovered most of its early weakness. Lightly traded but nearby January gold rose $US3.70 to $US1095.20 an ounce on the Comex division of the New York Mercantile Exchange, while most-active February climbed $US3.70 to $US1096.20. Most-active March silver rose US4.3 cents to $US16.845. Gold opened the session higher with the ICE Futures US March dollar index on the defensive, hurt in part by a survey showing a rise in UK house prices last month. Investors often buy the metal as a hedge against US dollar weakness.
Gold Ends 2009 With 25 Pct Return Gold prices sealed their biggest absolute annual gain in three decades with a small advance on Thursday, rising for an unprecedented ninth year in a row after dollar-hedging traders and central banks joined investors who turned to gold for price performance and protection. Bullion rose slightly as the dollar ebbed and oil climbed as high as $80 a barrel. Palladium jumped sharply to notch a record 119 percent return this year, bolstered by improving industrial demand and anticipation of more investment with the launch of a new U.S. exchange traded fund next year.
China's 2010 Gold Rush THE COLLAPSE in India's gold demand during 2007-09 might seem good reason to question the fundamental strength of gold buying worldwide. After all, if the world's No.1 gold buyers can't keep up with record-high gold prices, who can...? But the plain fact, as BullionVault first forecast in spring 2009, is that China has overtaken India as the number one private gold buyer this year. The typical Chinese New Year gold rush has already begun (thanks in part to 3% discounts at major retailers), and robust demand looks likely to continue through 2010 if not beyond.
Gold Climbs, Capping Ninth Annual Gain, on Currency Outlook Gold futures rose, capping the ninth straight annual gain, on speculation that the dollar will extend a slump, spurring demand for the metal as an alternative investment. Silver had the biggest yearly increase since 1979. Gold advanced 24 percent this year as government spending aimed at reviving the U.S. economy sent the dollar down 4.2 percent against a basket of six major currencies. The metal rose to a record $1,227.50 an ounce on Dec. 3 and also reached all- time highs based in sterling and euros.
Peter Schiff With Charles Payne 2 Of 3 12_28_09
Jim Sinclair - A markets bear, but gold bull, crying in the wilderness Jim Sinclair can't find a markets bear anywhere and that rings warning bells! Jim Sinclair, a much respected and followed bull on the gold price, despairs of the analysts predicting a stock market boom in 2010. In a note yesterday Sinclair says "As we approach the New Year it seems the party has already begun, and the commentators are all full of spirits. I can't find a bear in the woods." "According to them the equity market is going up, the dollar is going up, commodities are going up, and even lip service is being paid to gold, but lip service only. The conviction being blasted out there is a line up of former pro-gold guys like Faber and Rogers. Today they rolled out Barton Biggs for his bullish equity-bullish dollar forecast. Soros and Buffett have already made their contribution to a dollar rally."
Gold prices will make history in 2010 With the gold price at $1,100 dollar per ounce in late 2009, gold investors are likely to increase purchases, creating a new cycle of price increase. The greenback is depreciating in the eyes of investors and the price of the dollar and gold always go in opposite directions. Central banks of the world have realized the need to diversify asset reserves in anticipation of the depreciation of the dollar and higher inflation, which will promote gold purchases by banks.
How China overtook India in gold consumption The collapse of Indian gold demand since the global financial crisis broke in 2007 might seem good reason to question the fundamental strength of gold buying worldwide today. After all, if the world's No.1 gold buyers can't keep up with record-high Gold Prices, who can...? But the plain fact, as BullionVault first forecast in spring 2009, is that China has overtaken India as the number one private gold buyer this year. The typical Chinese New Year gold rush has already begun (thanks in part to 3% discounts at major retailers), and robust demand looks likely to continue through 2010 if not beyond.
Will IMF part with its gold on George Soros plan? In 2009, what was the most interesting and valuable proposal from billionaire global investor George Soros? Soros made a passionate plea for clean tech sector, saying that the International Monetary Fund (IMF) should part with its gold reserves to promote carbon cutting projects in the developing countries. George Soros' comments have invited criticism and applause. But will his suggestion that IMF should dispose of some $100 billion out of its gold reserves to spend on green loans in carbon-cutting projects to the developing countries come true in 2010?
Jim Rogers on gold, dollar, commodities in 2009 It is the time of the year, when you love to recollect what others said on things you like and dislike. And on commodities, what better voice to listen to than that of Jim Rogers, the global investing guru on commodities. Rogers' views on gold, silver, platinum, palladium, dollar, pound and agricultural commodities were the most resounding during the whole of 2009. Rogers, chairman of Rogers Holdings, and a vocal critic of America and Britain, has been arguing all through 2009 that agricultural commodities are the best investment place to put your money.
Dollar Bulls Bushwhack Foreign Currencies The non-dollar currencies got bushwhacked yesterday by the dollar bulls around mid-day, and there’s been no recovery since. The Treasury is back at the auction table, with $32 billion in 7-year Treasuries for you to buy at the fantabulous yield of…. Drum roll please…. 2.60%! All that and more, so buckle yourself in, and make certain to keep your arms and legs inside the Pfennig at all times during the ride!
Camaraderie of the Damned There is not a lot of action in the markets. Most of the investment world is home for the holidays… At least, the investors are home. The pros – the bankers, for example – are celebrating the holidays in fancy resorts. They can afford it. It was a great year for the financial sector. After nearly going broke because of their reckless speculations, the bankers took money from the feds and went on to speculate some more…making huge profits. Bonuses for many of them were better than ever.
Peter Schiff With Charles Payne 3 Of 3 12_28_09
Commodities Post Biggest Annual Gain in Four Decades on China Commodities posted the biggest annual gain in four decades, led by a doubling in copper, sugar and lead prices, as Chinese demand compensated for the longest slump in the global economy since World War II. In 2009, the S&P GSCI Index of 24 raw materials rose 50 percent, the most since at least 1971, and commodities drew record investment of $60 billion this year, Barclays Capital estimated. This year, the MSCI World Index of stocks in 23 developed nations climbed 27 percent, and U.S. Treasuries fell 3.5 percent, according to Bank of America Merrill Lynch indexes.
Why the Federal reserve wants to drain excess reserves I wrote a post yesterday (The Fed's exit strategy) to explain the mechanics surrounding Monday's Federal Reserve announcement that it is offering CD accounts to banks. The Federal Reserve does not control the demand for credit and therefore cannot increase aggregate demand by increasing bank reserves. This is an important point because it colors how you view the potential for inflation as a result of Fed action. I see little need for immediate inflation concerns because there is huge amounts of excess capacity.
Support grows for tackling nation's debt Senate action late last week that increased the limit on the government's credit card to a record $12.4 trillion gave a significant boost to a proposal to appoint a special commission to make the tough decisions that will be required to dig the nation out of debt. President Obama has voiced support for such a plan, and 35 Democratic and Republican senators have signed on to legislation that would create a bipartisan commission with broad power to force painful spending cuts and tax increases through Congress.
Money printing scheme is working, Bank of England says Lending to households and businesses continued to pick up in the final three months of last year and is expected to rise further in the coming months, the Bank of England said yesterday, boosting hopes that its scheme of quantitative easing is working. The Bank’s latest quarterly Credit Conditions Survey, which asks lenders about credit conditions over the past three months, showed that the availability of credit to businesses rose for the fourth consecutive quarter between October and December, while the availability of mortgages rose after falling in the third quarter.
Treasury makes the last bailouts, $29M to 10 banks The Treasury Department said Thursday it has pumped $29.3 million into 10 banks, the last to receive investments as part of the taxpayer-funded program to shore up the financial system. The aid comes from a $700 billion financial bailout program created last year during the height of the financial crisis. The investments in the 10 banks are the last under Treasury's so-called Capital Purchase Program, Treasury officials said. By law, the Treasury must report the transactions — which occurred on Tuesday — within two business days.
1/3 Gerald Celente top 10 Predictions for 2010! StopTheRobbery.com
Huffington to consumers: boycott big banks There can be few institutions more despised as 2010 begins than big U.S. banks, but what can the average person do about it? The answer, according to Huffington Post website founder Arianna Huffington and former Senate Banking Committee chief economist Rob Johnson: Withdraw your money. In a widely read blog post this week,Huffington and Johnson try to stir up a popular revolt by encouraging bank customers to yank their deposits from Bank of America, Wells Fargo, Chase and Citibank and move them to community banks and credit unions.
Why Did They Close WaMu? Washington Mutual had enough money to survive. So why did regulators shut the thrift down in one of the biggest bank takeovers in history? On a sunny Sunday afternoon in late September, a year and two days after regulators closed Washington Mutual, the bank's former leaders gathered for an improbable, and tragic, reunion at a Seattle restaurant. Among those present: Lou Pepper, the CEO who guided WaMu through the 1980s, and Kerry Killinger, the CEO who presided over both its vast expansion in the 1990s and its later deep dive into risky mortgage lending.
FDIC plans to seek stakes in buyers of failed banks The agency hopes to recoup the costs of closing lenders by sharing in any profits from an increase in the buyer's stock after a takeover. The Federal Deposit Insurance Corp. plans to seek stakes in the companies bidding for seized banks, aiming to gain when the shares rise and helping recoup the costs of closing lenders. The arrangement would let the agency share any profits from an increase in the buyer's stock after a takeover, said James Wigand, the FDIC's deputy director of resolutions and receiverships.
Mortgage Bond Rally May End, Rates Rise as Fed Stops Purchases Mortgage bonds are poised to slump after a record rally as the Federal Reserve’s unprecedented buying of $1.25 trillion of the securities ends as soon as March, driving up interest rates on new home loans. Analysts at BNP Paribas SA, Credit Suisse Group AG and JPMorgan Chase & Co. say the extra yield over benchmark rates that investors demand to hold the securities will widen as much as half a percentage point as the Fed stops purchasing. The 11- month-old program has reduced yields, which guide lending rates, by about 1 percentage point, BNP estimates.
U.S. in fiscal peril with $12.1 trillion debt After $787 billion in stimulus spending and $700 billion in bank bailouts, 2010 is fast shaping up to be the year of the federal budget diet. Bipartisan support is growing in Congress for action to stabilize the nation's bulging debt, which is now $12.1 trillion. Influential experts from former Federal Reserve Board chairman Alan Greenspan to former comptroller general David Walker have joined the cause.
Cybercrooks stalk small businesses that bank online A rising swarm of cyber-robberies targeting small firms, local governments, school districts, churches and non-profits has prompted an extraordinary warning. The American Bankers Association and the FBI are advising small and midsize businesses that conduct financial transactions over the Internet to dedicate a separate PC used exclusively for online banking. The reason: Cybergangs have inundated the Internet with "banking Trojans" — malicious programs that enable them to surreptitiously access and manipulate online accounts. A dedicated PC that's never used for e-mail or Web browsing is much less likely to encounter a banking Trojan.
Neel Kashkari’s Quiet Path to Pimco The financial crisis did not produce many stars. One of the few was Neel T. Kashkari, the former Bush administration bailout chief. A onetime investment banker at Goldman Sachs, Mr. Kashkari became an instant celebrity in October 2008 when he was tapped by Henry M. Paulson Jr., then the Treasury secretary, to run the Troubled Asset Relief Program for banks. He was christened “the $700 billion man” for overseeing such a huge amount of banking aid.
2/3 Gerald Celente top 10 Predictions for 2010! StopTheRobbery.com
Congress lets 50 tax breaks expire at end of ’09 Many likely to be revived sometime in 2010 — but it’s a pain for taxpayers When members of the U.S. Senate went home earlier this month, they left the future of 50 individual and business tax breaks in limbo. All expire at the end of 2009. Among the disappearing breaks are the research tax credit and an annual alternative minimum tax "patch," which keeps 23 million additional middle-income Americans from being forced into calculating and paying the dreaded AMT. (For 2009, with the patch in place, 4 million upper-middle- and high-income families will pay AMT.)
China Property Bubble May Lead to U.S.-Style Real Estate Slump Li Nan has real estate fever. A 27- year-old steel trader at China Minmetals, a state-owned commodities company, Li lives with his parents in a cramped 700- square-foot apartment in west Beijing. Li originally planned to buy his own place when he got married, but after watching Beijing real estate prices soar, he has been spending all his free time searching for an apartment. If he finds the right place -- preferably a two-bedroom in the historic Dongcheng quarter, near the city center -- he hopes to buy immediately. Act now, he figures, or live with Mom and Dad forever. In the last 12 months such apartments have doubled or tripled in price, to about $400 per square foot.
How Commercial Real Estate Could Trigger a Double-Dip Reports that commercial real estate (CRE) is suffering from a double whammy of soaring vacancies and declining valuations have been making news recently with sobering regularity. DailyFinance addressed the risks that CRE meltdowns pose to banks in early December. And in a stunning confirmation, just weeks later Morgan Stanley announced it was "walking away" from five San Francisco office towers, giving them back to the lenders. These accounts address the impacts on real estate investors, banks and hard-hit locales such as Southern California. But a bigger, often-overlooked, risk is the potential for CRE to remain a drag on the U.S. economy for years to come, or its potential to trigger a slide back into recession -- the so-called double dip that many fear.
3 reasons home prices are heading lower After four months of gains, home prices flattened in October. Worse yet, industry insiders think that they'll soon start to fall. Prices have risen more than 3% since May, according to S&P/Case-Shiller. But most forecasts predict price declines in 2010, with possible losses ranging from anywhere from 3% on up. Fiserv Lending Solutions, a financial analytics firm, forecasts that prices will fall in all but 39 of the 381 markets it covers, with an average drop of 11.3%.
False Hope in the Real Estate Comeback The Los Angeles Times tells us that mortgage defaults in the prime category rose in the 3rd quarter. If you are wondering what might happen to housing prices in the US…should the depression continue…you might want to keep an eye on the default rate. Housing prices are down about 30% nationwide. In some areas, they are down much more. But they had been going up for so long…this downswing still seems like an aberration. Hope has momentum…especially in the housing market. Housing prices rose along with inflation for 100 years. Then, they rose much faster than inflation over the last 10 years, ending in 2007. This leaves people with the impression – false – that housing always goes up over the long run. As we have pointed out many times in these Daily Reckonings, housing prices in the nicest neighborhood of Baltimore, where we have our offices, hit their highs, in real terms, in the 1920s. They’ve been going down ever since. Even after the big run up to 2007, they were still below their ’20s peaks. That’s a bear market in real estate prices that has lasted, so far, 80 years.
3/3 Gerald Celente top 10 Predictions for 2010! StopTheRobbery.com
Fannie mortgage holdings sink, delinquencies leap Fannie Mae's gross mortgage portfolio shrank sharply in November while the delinquency rate on single-family loans it guarantees leaped in October, the government-controlled U.S. home funding company said on Monday. The company said its mortgage investments fell at a 26.1 percent annual rate last month to $752.2 billion. Year-to-date, the portfolio has declined by an annual 4.9 percent from $787.3 billion at the end of last December. Fannie Mae also reported an ongoing jump in the rate of late payments on single-family loans it guarantees, a problem that has eaten into its capital and forced borrowing from the U.S. Treasury.
U.S. to Lose $400 Billion on Fannie, Freddie, Wallison Says Taxpayer losses from supporting Fannie Mae and Freddie Mac will top $400 billion, according to Peter Wallison, a former general counsel at the Treasury who is now a fellow at the American Enterprise Institute. “The situation is they are losing gobs of money, up to $400 billion in mortgages,” Wallison said in a Bloomberg Television interview. The Treasury Department recognized last week that losses will be more than $400 billion when it raised its limit on federal support for the two government-sponsored enterprises, he said.
The Ethics of Walking Away, Continued Tuesday, I asked Megan McArdle how much of one’s life’s savings should be given to the bank before they take one’s house. She answers, gratifyingly, that in the particular case I was writing about, “obviously he should have walked away immediately.” Good, we’re in agreement on that. If you’re going to lose your house, best just to lose your house, rather than to lose your house and your savings. But then, puzzlingly, Megan asks “what Felix thinks this has to do with people who decide to default on their mortgages so that they’ll have more money to spend on cruises and new furniture”.
Retirees Snared by Medicare As People Work Longer, They Risk Penalties for Missing Deadlines Rules for enrolling in Medicare are complex. But when people postpone retirement past age 65, as many people are doing these days, it's easy to get caught up in red tape. Older adults can't get into Medicare any time they want. The easiest time to sign up is when you turn 65, and, if you're already collecting Social Security, enrollment is automatic. But if you keep working beyond that age and opt instead to stay with your employer's group health plan, your options for getting Medicare can be sharply limited. It's important to pay attention to strict enrollment deadlines, or you may face a fine and risk going without coverage for months.
Mayo Clinic in Arizona to Stop Treating Some Medicare Patients The Mayo Clinic, praised by President Barack Obama as a national model for efficient health care, will stop accepting Medicare patients as of tomorrow at one of its primary-care clinics in Arizona, saying the U.S. government pays too little. More than 3,000 patients eligible for Medicare, the government’s largest health-insurance program, will be forced to pay cash if they want to continue seeing their doctors at a Mayo family clinic in Glendale, northwest of Phoenix, said Michael Yardley, a Mayo spokesman. The decision, which Yardley called a two-year pilot project, won’t affect other Mayo facilities in Arizona, Florida and Minnesota.
Economist: Health Care Bill "Is Just Another Bailout Of The Financial System" It is obvious that many republicans oppose the proposed health care bill. But many liberals and progressives oppose it as well. For example, economist L. Randall Wray writes: Here's the opportunity, Wall Street's newest and bestest gamble: there is a huge untapped market of some 50 million people who are not paying insurance premiums-and the number grows every year because employers drop coverage and people can't afford premiums. Solution? Health insurance "reform" that requires everyone to turn over their pay to Wall Street. Can't afford the premiums? That is OK-Uncle Sam will kick in a few hundred billion to help out the insurers. Of course, do not expect more health care or better health outcomes because that has nothing to do with "reform" … Wall Street's insurers… see a missed opportunity. They'll collect the extra premiums and deny the claims. This is just another bailout of the financial system, because the tens of trillions of dollars already committed are not nearly enough. Wray points out that - with the repeal of Glass Steagall - the financial sector and the insurance businesses (the "f" and "i" in the "fire" sector) are somewhat merged.
Report: 13 States Threaten to Sue Over Health Care Deal Republican attorneys general in 13 states say congressional leaders must remove Nebraska's political deal from the federal health care reform bill or face legal action, according to a letter provided to The Associated Press Wednesday. "We believe this provision is constitutionally flawed," South Carolina Attorney General Henry McMaster and the 12 other attorneys general wrote in the letter to be sent Wednesday night to House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid. "As chief legal officers of our states we are contemplating a legal challenge to this provision and we ask you to take action to render this challenge unnecessary by striking that provision," they wrote.
Watch Small Business for Employment Trends. The Outlook Is Bleak The Discover Small Business Watch index is the most up-to-date poll on conditions in the sector which has accounted for the vast majority of employment growth in all the economic recoveries of the past thirty-five years. The DSBW Index collapsed in November, to 76.5 from 88 in October. December remains unchanged. But fewer small business owners expect the economy to improve.
Colorado's minimum wage becomes 1st in US to drop Colorado's minimum wage going down 3 cents in 2010, first drop in the nation since 1938 Colorado's minimum wage will drop slightly in the new year -- the first decrease in any state's minimum wage since the federal minimum was adopted in 1938. Colorado's wage is falling 3 cents an hour, from $7.28 to the federal level of $7.25. That's because Colorado is one of 10 states that tie the state minimum wage to inflation. The goal is to protect low-wage workers from having unchanged paychecks as the cost of living goes up. But Colorado's provision also allows wage declines, and the state's consumer price index fell 0.6 percent last year, so the minimum wage is going down.
20 million-plus collect unemployment checks in '09 A record 20 million-plus people collected unemployment benefits at some point in 2009, a year that ended with the jobless rate at 10 percent. As the pace of layoffs slows, the number of new applicants visiting unemployment offices has been on the decline in recent months. But limited hiring means the ranks of the long-term unemployed continues to grow, with more than 5.8 million people out of work for more than six months. The number of new claims for jobless benefits dropped last week to 432,000, the Labor Department said Thursday, down sharply from its late March peak of 674,000. The decline signals that the economy could begin adding a small number of jobs in January, several economists said.
Rick Warren's Saddleback Church In Desperate Fundraising Appeal After Collection Plates Run Dry Rick Warren is the conservative evangelical minister who somehow has become a trusted friend to both Republicans and Democrats. Obama came to his Saddleback Church during the campaign, and then Warren spoke at his inauguration. But the bad economy is taking its toll on his empire, and yesterday he sent out an emergency fundraising appeal to the church's members.
FCC Urges Fox, Time Warner to Settle Dispute The nation's top telecommunications regulator waded into the ongoing programming negotiations between News Corp. and Time Warner Cable Inc., urging the companies to reach a temporary agreement and prevent subscribers from losing some Fox channels. "I have urged Fox and Time Warner Cable to agree to a temporary extension of carriage if they do not come to terms on a new carriage agreement today, in order to prevent disruption to their viewers," said Julius Genachowski, chairman of the Federal Communications Commission, in a written statement Thursday. "Companies shouldn't force cable-watching football fans to scramble for other means of TV delivery on New Year's weekend."
Scripps Networks Warns Cablevision Viewers of Blackout over Fees Scripps Networks Interactive Inc. began warning Cablevision Systems Corp. subscribers Thursday that its Food Network and HGTV channels may be "dropped from your TV lineup," as another contentious negotiation over programming fees spilled into public view. Cablevision's agreement to carry the Scripps channels expires at midnight Thursday, according to a person familiar with the matter. Cablevision provides TV service to approximately 3.1 million people largely in the New York area.
Delta, Northwest can work as single carrier US gov't authorizes Delta, Northwest to operate as single carrier Delta Air Lines Inc. has received government permission to operate its namesake service and its Northwest Airlines subsidiary as a single carrier, a Delta executive said Thursday. The single operating certificate from the Federal Aviation Administration allows Delta to put its code on Northwest flights and phase out the Northwest name. That process will be complete in the first quarter of 2010. For now, travelers won't notice anything different. Delta, based in Atlanta, acquired Northwest for $2.8 billion in stock in October 2008 to become the world's biggest airline.
Mailman to deliver aid in case of anthrax attack President Obama puts the Postal Service in charge of dispensing drugs If the nation ever faces a large-scale attack by a biological weapon like anthrax, the U.S. Postal Service will be in charge of delivering whatever drugs and other medical aid Americans would need to survive. In an executive order released Wednesday, President Barack Obama put the Postal Service in charge of dispensing "medical countermeasures" to biological weapons because of its "capacity for rapid residential delivery."
Special update on Schiff for Senate
North Korea bans foreign currencies North Korea has banned the use of foreign currency, another sign its hard-line communist government is intent on reasserting control over the country's nascent market economy. Reports say the decree warns of severe punishment for anyone using U.S. dollars, euros, yuan and other non-North Korean currencies. Foreign currencies previously were accepted in some shops, restaurants and other outlets, particularly those catering to foreigners. The order, issued by North Korea's state security bureau and going into effect Jan. 1, aims to "forbid the circulation of foreign currency," China's state-run CCTV television said in a brief report late Wednesday.
Snowstorm squelches climate change protest A downtown protest of the climate change talks in Copenhagen became a victim of Wednesday's snowstorm. "Not many people showed up because of the blizzard conditions," said organizer Clea Major, an international studies student at the University of Utah. It didn't take long for the six friends to pack up a bullhorn and posters they'd planned to use for their "scream-in," an outlet for their frustration about the failure of the Copenhagen climate talks earlier this month to curb the pollution blamed for climate change.
Yes, Yemen Has Oil The Middle Eastern nation - in the south of the Arabian Peninsula, bordering the Arabian Sea, Gulf of Aden, and Red Sea - has been exporting a couple of billion dollars worth of crude oil per year. But it's oil supplies are shrinking rapidly, and may be totally depleted within 10 years. As the Yemen Observer notes: Yemeni crude oil exports decreased to $1.5 billion during the fiscal period from January -October of 2009, compared with $4.2 billion during the same period of 2008, a decrease of $2.7 billion, the Central Bank of Yemen reported.
Yemen oil revenue decreases by 2 million barrels Yemeni crude oil experts decreased to $1.5 billion during the fiscal period from January -October of 2009, compared with $4.2 billion during the same period of 2008, a decrease of $2.7 billion, the Central Bank of Yemen reported. The statement revealed that the record decline in oil returns was accompanied by the government's ebbing share of total oil exports during this period, from 38.8 million barrels to 24.5 million barrels. A report issued by CBY attribute the decline to the decrease of Yemen oil production in conjunction with the decrease of oil prices globally.
Nigerian Terrorist Patsy Yet Another CIA Ploy in US-backed Buildup of al Qaeda in Yemen Civil War Tarpley tells RT that the case of Umar Farouk Abdulmutallab is not a matter of unconnected dots, but rather that of a protected patsy or puppet deliberately used by the US intelligence community for a Christmas Day provocation designed to facilitate US meddling in the civil war in Yemen, which is where Umar Farouk allegedly trained and was given his PETN device. Banker's son Umar Farouk had been denied an entrance visa to Great Britain , and had been denounced to the US Embassy in Lagos, Nigeria as a possible terrorist by his own father in mid-November. His one-way ticket to Detroit was bought in Ghana for cash, and he reportedly entered Nigeria illegally. In Amsterdam , he was assisted at the Northwest Airlines gate by a "well-dressed Indian" who explained that Umar Farouk had no passport. He did have PETN, the same substance supposedly used by the mentally impaired shoe bomber Richard Reid in his abortive attack of eight years ago. In spite of all this, Umar Farouk's US entry visa was never revoked, he never made it onto the no-fly list, and he was never thoroughly searched.
Detroit terror attack: United States 'plans retaliatory attacks on Yemeni soil' The United States is planning to attack al Qaeda militants in Yemen in retaliation for the attempt to bring down an aeroplane over Detroit on Christmas Day, it has been reported. Intelligence efforts are said to be focused on finding those involved in the plot to get Nigerian Umar Farouk Abdulmutallab on the Northwest Airlines plane with explosives in his underwear. Security officials are also likely to identify other "high value" al Qaeda targets who could be the target of strikes.
Eyewitnesses: 2 arrested in Christmas flight terror 'How stupid do you think the American public is?' Several passengers aboard the Christmas Day flight to Detroit where a Nigerian man attempted to blow up the airplane say a second passenger was arrested after the foiled terrorist attack – and they suggested other men may have played roles as well. Kurt Haskell of Newport, Mich., and his wife, Lori, claim they were aboard Flight 253 as they returned from a safari in Uganda, seated only a few rows behind suspected attacker Umar Farouk Abdulmutallab, a man who admitted to affiliation with the terrorist group al-Qaida. Haskill presented a boarding pass to Michigan Live to show that he had been a passenger on the plane.
Northwest Bomb Plot 'Oddities' In 2008, the ACLU estimated the US 'No Fly List' to have grown to over 1,000,000 names -- heck, even Cat Stevens and the late Senator Ted Kennedy were on it -- and it continues to expand. But, suspected terrorist Abdul Farouk Abdulmutallab, who was curiously able to obtain military-grade high explosives --80 grams of PETN (Gee, where'd he get that?) -- managed to escape airport security and detonate his underwear bomb! In April 2009, American authorities reportedly refused an Air France flight from Paris to Mexico entry into US airspace because a left-wing journalist writing a book on the CIA was on board. Hernando Calvo Ospina, who works for Le Monde Diplomatique and has written on revolutionary movements in Cuba and Colombia, figured on the US authorities' 'no-fly list.' Air France said the April 18 flight was forced to divert to the French Caribbean island of Martinique before continuing its journey .
Webster Tarpley: 'Detroit jet terrorist attack was staged'
Officials Claim Second Man Unrelated To Christmas Attack Bomber's accomplice being protected? Multiple eyewitness accounts contradicted Having first denied the very existence of a possible accomplice in the Christmas Day bombing attempt, officials are now denying that a second man detained in the aftermath of the Flight 253 incident had anything to do with the attack, completely contradicting multiple eyewitness accounts. Authorities have attempted to downplay the significance of other men seen involved in the plot, including an Indian man that helped bomber Umar Farouk Abdulmutallab board the plane, another man witnessed filming the entire flight including the bombing attempt, as well as an Indian man handcuffed by the FBI after sniffer dogs detected something suspicious in his luggage.
Number of U.S. soldiers killed in Afghanistan doubles in 2009 The year's tally was 318, compared with 155 in 2008, due mostly to the crude but ever larger and deadlier roadside bombs employed by the Taliban. And Western military fatalities are expected to spike. Reporting from Kabul, Afghanistan - American military fatalities in Afghanistan doubled in 2009 compared with the previous year, and U.S. officials and analysts acknowledge that the new year is likely to prove even more lethal.
Dennis Kucinich "This War Is A Threat To Our National Security!
President makes Top 10 list of corrupt politicians Believes he 'can violate privacy rights of Americans' without legal consequence President Obama has been named to a "Top 10" list he'd likely be grateful to avoid: Judicial Watch's "Ten Most Wanted Corrupt Politicians," for 2009. "The Obama White House believes," said the report from the organization that monitors government for corruption, and sues when it chooses, "it can violate the privacy rights of American citizens without any legal consequences or accountability." The report released yesterday said Obama joined the likes of Rep. Barney Frank, D-Mass.; Treasury Secretary Timothy Geithner; Attorney General Eric Holder; House Speaker Nancy Pelosi; Rep. John Murtha, D-Pa.; and Sen. Christopher Dodd, D-Conn., on the list.
Social Engineering behind leader worship
***** Important . . . if your kids are watching
About avatars: Caveat emptor! Even before the buzz began building for James Cameron's sci fi blockbuster Avatar, today's "millennial generation," the film's biggest fans, knew what the word meant. Few knew the classical definition of "avatar" as "the incarnation of a Hindu deity" that people my age learned in the 1960s taking comparative religion courses or reading Hermann Hesse. To current-day collegians, the word is the self-definition of a hi-tech kid who manipulates an image of himself projected in a computer game. . . . . . . . . YET WHAT could seem further apart than Hitler the Aryan white supremacist and Cameron's hero, Jake, who loves the wronged Navi enough to be reborn as one? Unfortunately, youthful members of the rightist underground who avidly read reprints of Devi's deification of the Fuhrer don't look at Hitler with Cameron's loathing - and they may view Avatar as quite compatible with their own extremist faith.
A Call for Geithner's Head Columnist Gary Weiss proposes several New Year's resolutions in the name of Wall Street overseers. Number one: President Obama should fire Tim Geithner. This week I’d like to make some New Year’s resolutions. This being a time of giving, I’ve generously made New Year’s resolutions not for myself, but for the people and institutions who run and supervise Wall Street. There are some things they need to do next year, and they’d better get cracking. So without further ado: President Obama: My New Year’s resolution for the president is that he fire Tim Geithner. That’s the best thing he can do to restore investor confidence in the markets.
Coming Soon: The Bill for the Massive U.S. Debt Americans could be in for a rude awakening in coming months when they discover the true scope of the massive national debt racked up by the U.S. government. In fact, the $1.6 trillion deficit expected for 2010, which is above 10% of gross domestic product (GDP), is only the beginning. Since the current economic crisis began in late 2007, the U.S. Federal Reserve has tripled the size of its balance sheet, creating enormous amounts of new money by lending to hundreds of ailing banks and buying up more than $1 trillion of questionable asset-backed securities. But that's only a small part of the story.
United States Debt Ridden Road to Perdition Decade after decade, Americans have voted for intellectually and morally bankrupt dullards that promise them more goodies under the tree. Every day is Christmas in Washington DC. Long-term means the next election cycle to these traitors of the Republic. I have written ad nauseum about the impending financial cataclysm that awaits our nation. I have spent countless hours documenting the unsustainable path of our politicians’ financial decisions and lack of courage in addressing the forthcoming tragedy that grows closer by the day. Our political system is so corrupt and dysfunctional that there is absolutely no chance that our path will be altered at the voting booth. Government programs are fashioned, but never finished. The IRS tax code consists of 3.4 million words covering 7,500 pages of payoffs to business lobbyists. Simplicity is a virtue.
Countdown to a Meltdown America's coming economic crisis. A look back from the election of 2016 It is time to think carefully about the next year. Our position is uniquely promising - and uniquely difficult. The promise lies in the fact that you are going to win the election. Nothing is guaranteed in politics, but based on everything we know, and barring an act of God or a disastrous error on our side, one year from today you will be sworn in as the forty-sixth president of the United States. And you will be the first president since before the Civil War to come from neither the Republican nor the Democratic Party.1 This is one aspect of your electoral advantage right now: having created our new party, you are already assured of its nomination, whereas the candidates from the two legacy parties are still carving themselves up in their primaries.
Times Square, Nasdaq reopened after scare New York City's Times Square was closed briefly and three buildings including the Nasdaq headquarters were evacuated in a security scare on Wednesday, a day before the traditional New Year's Eve festivities in the famed intersection. The street closings and evacuations were prompted by a police investigation of a suspicious van that local media reported had been parked on Broadway for two days. No explosives were found in the van, which police examined with robots and remote cameras. The typically busy Times Square intersection, Nasdaq building and two other buildings were cleared of people during the investigation which lasted about two hours.
Doug Casey on Gold Proofing Your Way Out of the Recession As the world's economies continue to crumble, you need to rethink your financial strategies if you plan on having enough left when you retire. This gives you insights on what to do no matter your current situation.
Gold steadies after dollar's rise dulls price Gold prices steadied in Asia on Thursday after dropping in U.S. trading as investors unwound long-gold short-dollar positions and cashed in on bullion's 25 percent rally this year, the metal's ninth consecutive annual rise.
Gold to hit $1,500 in 2010: Merrill Lynch Gold prices have been on a surge in 2009. Will the yellow metal continue to shine better in 2010; that is the question bullion traders and investors are asking these days. Global consultancy Merrill Lynch says gold bullion prices could rise to as high as $1,500 an ounce over the next year and a half thanks to a combination of factors. Bill O'Neill, from Merrill Lynch Wealth Management, told the Times that ongoing credit risk, the strength of commodities and the weakness of the US dollar would contribute to the rise.
Precious Metals to glitter in 2010 In welcoming 2010, the stars could not be better aligned for precious metal investors. Stimulus spending, coupled with a low federal funds rate and a new jobs program, should put plenty of money in the hands of precious metals holders. Stimulus and Silver 2009 was just the beginning for federal stimulus programs. Although the American Reinvestment Act was pushed through Congress in a matter of days, the money has moved much slower. Currently, only 58% of the allocated $158 billion has been awarded to start work on "shovel ready projects." However, of all the money awarded, only about $37 billion has actually been spent thus far. Many more projects are slated to start early 2010, and nearly all of the money will have been spent by 2011.
2010 Forecast: Gold to hit $1500, Silver to hit $25 I have been making my 10 predictions for 2 years now, since 2008. I initially got this idea from Byron Wien who has been publishing them every year since the 1980s, when he was with Morgan Stanley, then Pequot Capital , and now with Blackstone. My first picks for 2008 were accurate and had anticipated almost all major trends, substantially better than Byron's - something I called beginner's luck.
2009: A Good Year Mary Anne & Pamela Aden The Aden Sisters WHAT ABOUT 2010? Will these upmoves continue as we move into the new year? We believe that they will. But since these markets have all had significant gains, we’ll likely see further downward corrections first before they resume their rises. So don’t be surprised. Remember, no market goes straight up or straight down. Corrections along the way are normal and they’re healthy. The major trends are always the most important. That’s where your focus should be because that’s where the greatest profits are made.
Gold on sale as year ends The price of Gold dropped to a 3-session low at the start of London dealing on Wednesday, cutting its 2009 gains vs. the Dollar to 30% and losing 2.1% for the week so far. World stock markets fell together with government bonds. The US Dollar ticked higher on the forex market. Crude oil held near a 77% gain for the year above $79 per barrel.
Gold-price forecasts are all over the map Analysis estimates range from $950 to $1,500 The 2009 gold price average has settled-in at $972/troy ounce. A recovery in industrial production is likely to be needed to spark major gains in the industrial precious metals, but there's little consensus among analysts where the gold price is going in 2010-with forecasts are ranging from $950 to $1,500. The 2009 gold price jumped about $100 from the 2008 average as the noble metal was boosted by central bank diversification of cash reserves into bullion and by weakness in the dollar that pushed safe-haven investments into precious metals.
Gold Reserves: Nations scramble for golden pie Bullion and precious metals lovers and investors will remember and relish 2009 for all the good and bad things that made gold the hottest darling of investing public, traders, market manipulators and speculators across the world. Good things that they would relish: gold prices hit a record of $1227 per ounce; gold rush is on by mining countries across the world and nations are scrambling to amass gold reserves. Bad things that they pray that should happen in 2010: further collapse of the US dollar, wild stock market fluctuations and crashes that make gold a safe haven asset, and real estate bottoming down so that people rush to buy gold and silver as family assets!
Gold set to end year down 10pc from its December high Gold prices edged down with the dollar's firmness curbing bullion's appeal as a currency alternative. Gold hovered around the $1,080/oz level as the year draws to a close, around 10pc lower than its December high of $1212/oz. Trading remained very subdued with many Japanese players out of the market for new year holidays until January 4. Market players eyed the dollar, which kept the firmer tone it has developed recently on shifting sentiment about the outlook for U.S. rates in view of improving economic data. Some traders said the correction in gold prices was about to end as dollar short-covering, which was partly responsible for the dollar's recent rebound, was also nearly completed.
Gold, Silver, U.S. Dollar: All Hovering Below Resistance Areas Last week, and coming into this week we said the story in gold/silver vs. the US dollar would be a key marker. Thus far we have no resolution and with so little energy and volume in the markets - one should not expect any more clarity until the new year. Let's check in on the updated charts. First the US dollar (again, this chart is delayed by 1 day but the Dollar Index is currently just over $78, so a bit higher than Tuesday's close). Recall we sold our UUP (dollar ETF) options (bought just before Thanksgiving) on that first run into the 200 day moving average to lock in just under 30% gains; which in retrospect was the perfect play. As we said then, we are more than happy to re-buy our long dollar exposure but this time around we want to see the dollar index clear resistance - in this case the 200 day moving average (i.e. over $78.50) - this looks like it could happen.
Gold, lover of 2009 doom, hates booming 2010! Even as the world gets ready to write the obituary for 2009, there are millions of investors across the globe who must be thanking gold for saving the year for them. . . . . . . . . Near-term risk for gold at the moment remains very much on the downside. So analysts predict that gold will be around $1000/oz-to- $1100/oz band in the next six months. However, there are optimists who say gold prices will hover around $1400 to $1450 in the second quarter of 2010.
Jim Sinclair - A markets bear, but gold bull, crying in the wilderness Jim Sinclair can't find a markets bear anywhere and that rings warning bells! Jim Sinclair, a much respected and followed bull on the gold price, despairs of the analysts predicting a stock market boom in 2010. In a note yesterday Sinclair says "As we approach the New Year it seems the party has already begun, and the commentators are all full of spirits. I can't find a bear in the woods." "According to them the equity market is going up, the dollar is going up, commodities are going up, and even lip service is being paid to gold, but lip service only. The conviction being blasted out there is a line up of former pro-gold guys like Faber and Rogers. Today they rolled out Barton Biggs for his bullish equity-bullish dollar forecast. Soros and Buffett have already made their contribution to a dollar rally."
GATA sues Fed to disclose gold market intervention records GATA today brought suit against the U.S. Federal Reserve Board, seeking a court order for disclosure of the central bank's records of its surreptitious market intervention to suppress the monetary metal's price. The suit was filed in U.S. District Court for the District of Columbia and targets Fed records involving gold swaps, exchanges of gold with foreign financial institutions. In a letter dated September 17 this year to GATA's law firm, William J. Olson P.C. of Vienna, Virginia, (http://www.lawandfreedom.com) Fed Board of Governors member Kevin M. Warsh acknowledged that the Fed has gold swap agreements with foreign banks but insisted that such documents remain secret: http://www.gata.org/files/GATAFedResponse-09-17-2009.pdf
Ron Paul vs. The Fed Congressman Ron Paul crusades to get the Federal Reserve to become more transparent and end favoritism.
Dollar Gains as Gold, Equities Retreat on Stimulus Speculation The dollar climbed, sending gold and U.S. equities lower, as signs of an improving economy added to speculation the Federal Reserve will withdraw stimulus measures. Treasuries were little changed before an auction of $32 billion of seven-year debt.
2010's Perils & Potential To see 2010’s Potential we must first consider the Main Perils. “Hyperinflation Nears… The intensifying economic and solvency crises, and the responses to both by the U.S. government and the Federal Reserve in the last two years, have exacerbated the government’s solvency issues and moved forward my timing estimation for the hyperinflation to the next five years, from the 2010 to 2018 timing range estimated in the prior report. The U.S. government and Federal Reserve already have committed the system to this course through the easy politics of a bottomless pocketbook, the servicing of big-moneyed special interests, gross mismanagement, and a deliberate and ongoing effort to debase the U.S. currency. Accordingly, risks are particularly high of the hyperinflation crisis breaking within the next year…
Ghosts of 1987 I am a 'fan' of very few people in the money business. One of my favorite pundits is a frequent guest on Bloomberg Television, which I tend to watch off and on during the day on my computer screen: Joe Saluzzi. Another person for whom I always turn up the volume is Howard Davidowitz, the savvy and no-nonsense retail analyst. Here is Joe Saluzzi's excellent explanation for the 'odd' market behaviour which many traders have noted to me in the past few weeks.
Joe Saluzzi of Themis Trading on Bloomberg TV's Starting Bell
Renminbi set to replace US dollar for trade in Asia Pacific Hong Kong moves to position itself as clearing hub for renminbi-based transactions The Chinese renminbi is taking on an increased role in the Asia-Pacific region, and is expected over time to replace traditionally dominant currencies such as the US dollar and the euro for certain transactions. Chinese government policy changes have enabled Asian corporates to settle trades with their Chinese counterparts in renminbi. And increased intra-Asian trading volume may lead Beijing to also consider allowing other trade-related insurance and derivatives denominated in renminbi to be done offshore, according to bankers and regulators in Hong Kong
Lawmakers Want Probe Into Treasury Aid for Fannie, Freddie The Treasury Department's surprise Christmas Eve move to uncap the potential aid to Fannie Mae and Freddie Mac should be investigated, lawmakers from both political parties said Wednesday. Rep. Dennis Kucinich (D., Ohio) said his congressional subcommittee plans to investigate Treasury's decision to lift the existing $400 billion cap on government cash available to the two firms. Separately, Reps. Scott Garrett (R., N.J.) and Spencer Bachus (R., Ala.) called for the House Financial Services Committee to hold a hearing on the matter.
Fannie, Freddie lifeline comes with a big catch The government's Christmas Eve pledge of unlimited financial aid to mortgage giants Fannie Mae and Freddie Mac is aimed at making sure the housing market doesn't take another turn for the worse and cause the economic recovery to unravel. This insurance policy taken out by the Treasury Department will help keep mortgage rates low, and may wind up being a gift of sorts to struggling homeowners and banks. But there's a catch: The housing crisis is now likely to cost taxpayers much more.
Fannie, Freddie proving too big to shrink Taxpayer tab for Fannie Mae, Freddie Mac likely to rise after Treasury's Christmas Eve pledge The government's Christmas Eve pledge of unlimited financial aid to mortgage giants Fannie Mae and Freddie Mac is aimed at making sure the housing market doesn't take another turn for the worse and cause the economic recovery to unravel. This insurance policy taken out by the Treasury Department will help keep mortgage rates low, and may wind up being a gift of sorts to struggling homeowners and banks. But there's a catch: the housing crisis is now likely to cost taxpayers much more.
Lenders Write Off More Credit Card Debt As job losses continued to mount, more and more consumers fell behind on their payments in November, Moody's Investor's Services reported Tuesday. Moody's Credit Card Index showed the charge-off rate on U.S. credit cards rose to 10.56%, up from October's charge rate of 10.04%. This reverses the recent downward trend in the charge-off rate, which had fallen in September and October.
'Too Big To Fail' Response Supports Bank Debt Government support of the U.S. banking sector, pending regulatory reform and reduced borrowing needs may benefit financial-company debt in 2010, according to Bank of America Merrill Lynch analysts. Declining loan demand means banks won't refinance all their debt coming due next year, analysts led by Jeffrey Rosenberg at Bank of America Merrill Lynch in New York wrote in a Dec. 23 report. John Gerspach, Citigroup Inc.'s chief financial officer, said his bank plans to refinance a third of the $45 billion in debt coming due next year, the analysts wrote.
Bankers Get $4 Trillion Gift From Barney Frank To close out 2009, I decided to do something I bet no member of Congress has done -- actually read from cover to cover one of the pieces of sweeping legislation bouncing around Capitol Hill. Hunkering down by the fire, I snuggled up with H.R. 4173, the financial-reform legislation passed earlier this month by the House of Representatives. The Senate has yet to pass its own reform plan. The baby of Financial Services Committee Chairman Barney Frank, the House bill is meant to address everything from too-big-to-fail banks to asleep-at-the-switch credit-ratings companies to the protection of consumers from greedy lenders.
Judge Napolitano: One Big Monster Government
Treasuries Set for Worst Year Since 1978 as U.S. Steps Up Sales Treasuries headed for the worst year in at least three decades as the U.S. stepped up debt sales to help spur growth in an economy recovering from the biggest slump since the Great Depression. The existing seven-year note was little changed after a $32 billion of sale of the debt drew a yield of 3.345 percent, compared with an average forecast of 3.372 percent in a Bloomberg News survey of four of the Federal Reserve's 18 primary dealers. U.S. government securities have fallen 3.6 percent this year, according to Bank of America Merrill Lynch indexes, the worst performance since 1978.
World Credit Market Shrinks First Time in 15 Years, Mizuho Says The amount of corporate debt outstanding globally shrank for the first time in at least 15 years in the first half of 2009 as U.S. banks reduced the size of their balance sheets, according to Mizuho Securities Co. The volume of corporate bonds, commercial paper and asset- backed securities fell to $52.9 trillion at June 30 from $53.2 trillion on the same day in 2008, Tetsuo Ishihara, a senior credit analyst for Mizuho in Tokyo, said in a report yesterday that analyzed data from the Bank for International Settlements.
Eurozone credit contraction accelerates Bank loans and the M3 money supply in the eurozone contracted at an accelerating pace in November, raising the risk that a lending squeeze will choke the region's fragile recovery next year. The European Central Bank said that loans to companies fell by a record 1.9pc from a year earlier. The broad M3 money supply - watched closely as a leading indicator for the economy a year ahead - fell by 0.2pc and has now been shrinking for several months. Julian Callow from Barclays Capital said the decline in lending was steeper than expected and will cause the ECB to move with great care before withdrawing emergency stimulus. "This is the weakest data since the statistics began in 1970 and probably in the post-war era. It is a message about what is happening to the banking system, which is the lending nexus for the eurozone economy," he said.
Michael Moore on The Charlie Rose Show (Friday, October 9th, 2009) "It's called a pyramid scheme, because only a few people can sit on top of the pyramid. Their job is to convince everybody else in the pyramid to work really hard because 'maybe you, too, can be up there in the pyramid with me some day,' but of course we all know that's not gonna happen. ... This whole system is set up to make sure that the people at the very, very top get away like bandits. ... You're asking the foxes to mind their own henhouse ... That's essentially what I feel we have, when you have the Rubins' and the Summers' and these guys still around. ... I think there is something boiling beneath the surface out there -- there is an anger. You can't throw that many people out of their homes ..." -- Michael Moore on The Charlie Rose Show, Friday, October 9th, 2009
"Financial Reform" Just Camouflage for Wall Street's Latest Power Play Anti-Wall Street sentiment makes for a good cover, but behind the scenes and rhetoric, legislators are working with the country's largest financial firms to fashion a new system that concentrates even more risk and reward at fewer banks. And what's more, the underlying socialization of the system will guarantee the success of excess with the full faith and credit of taxpayers. On Dec. 11, the U.S. House of Representatives passed the Wall Street Reform and Consumer Protection Act of 2009, which among other things, creates a consumer protection agency, strips the U.S. Federal Reserve of certain powers and subjects it to politicization, calls for big banks to finance a $150 billion bailout fund and gives the government power to break up or coddle financial firms as they see fit.
Treasury grants GMAC $3.8 billion in new aid The government on Wednesday provided a fresh $3.8 billion cash infusion to stabilize GMAC Financial Services as the financing company struggles with hefty losses in its home mortgage unit. The Treasury Department said the new aid, which comes from a taxpayer-financed bailout fund, is less than the nearly $6 billion the government had earlier thought GMAC would need to stabilize the company. The fresh infusion is on top of $12.5 billion in taxpayer money Detroit-based GMAC has already received from the government. The new agreement will boost the federal government's ownership in GMAC to 56 percent, from 35 percent.
Episode: The Card Game Investigating the massive consumer loan industry and what's ahead for banks and consumers... Duration: (56:23) Premiere Date: 11/24/2009
Honeywell reports 265 layoffs, temporary closures Honeywell Aerospace is laying off and furloughing workers and will temporarily shut down Phoenix-area operations next week to cut costs. The New Jersey-based aerospace and electronic components manufacturer reported to the Arizona Department of Economic Security that it will cut 265 Phoenix-area jobs in 2010. Honeywell has 12,600 workers in Arizona, mostly in its aerospace division. Details of the actions were not disclosed other to say the cuts will occur at the Honeywell plant on Air Lane near the airport in Phoenix.
Philadelphia Faces Rising Toll of Domestic Violence Responding to a sharp increase in homicides stemming from domestic violence, the Philadelphia Police Department announced plans this week to change how officers handle domestic abuse cases. While Philadelphia's overall homicide rate has dropped about 9 percent and all violent crime in the city is down compared with this time last year, there have been 35 domestic homicides since January - a 67 percent increase from 2008. The police say two additional killings are still being investigated and are likely to be added to the tally.
If Anybody Bothered to Take a Close Look at the Latest Housing Numbers... I read through the usual suspects in the mainstream media yesterday after the Case Shiller numbers were released and see headlines such as "Home Prices Flatten in October After 5 Months of Gains" and "Mortgage insurers rally after housing data" and wonder just how many of these reporters and analysts actually bothered to look at the data versus repeating sound bites. This has been a bad three quarters for the fundamental bears, but there is absolutely no macro or fundamental reason to turn bullish. As a matter of fact, the only reason I can see to buy stocks is that the stock prices are going up. That, in and of itself, should give one pause.
Rich Cling to Life to Beat Tax Man Nothing's certain except death and taxes -- but a temporary lapse in the estate tax is causing a few wealthy Americans to try to bend those rules. Starting Jan. 1, the estate tax -- which can erase nearly half of a wealthy person's estate -- goes away for a year. For families facing end-of-life decisions in the immediate future, the change is making one of life's most trying episodes only more complex. "I have two clients on life support, and the families are struggling with whether to continue heroic measures for a few more days," says Joshua Rubenstein, a lawyer with Katten Muchin Rosenman LLP in New York. "Do they want to live for the rest of their lives having made serious medical decisions based on estate-tax law?"
America’s Looming Class War In the weeks and years immediately following September 11, 2001, many Americans succumbed to the attractive yet fictional idea that all people in the United States share the same interests, goals and values. This idea of a mystical "unity" among all Americans took widespread hold as a natural human reaction to an attack by foreigners on American soil. With a dangerous cocktail of fear and anger coursing through their veins, and prodded on by the docile and unquestioning American political-media establishment, it was easy and emotionally satisfying to imagine that "we" were united together in a quasi-spiritual bond against an evil and maniacal foreign enemy. Members of America’s political class were not oblivious to the fact that they could exploit this idea for their own personal gain, and they pounced at the opportunity to pass legislation aimed at controlling and subduing Americans themselves – in the name of protecting them, of course. Seeking to distract Americans from the obvious fact that the U.S. government had both provoked the attack and failed to stop it, a bellicose vanguard of the political class pounced at the opportunity to make real their dream of sending American soldiers into far-away deserts and rocky mountains in order to spread "democracy" to the savages of the world.
Survivalism Lite Preparing for the worst Lisa Bedford is what you'd imagine of a stereotypical soccer mom. She drives a white Tahoe SUV. An American flag flies outside her suburban Phoenix home. She sells Pampered Chef kitchen tools and likes to bake. Bedford and her husband have two young children, four dogs, and go to church on Sunday. But about a year ago, Bedford's homemaking skills went into overdrive. She began stockpiling canned food, and converted a spare bedroom into a giant storage facility. The trunk of each of her family's cars got its own 72-hour emergency kit – giant Tupperware containers full of iodine, beef jerky, emergency blankets, and even a blood-clotting agent designed for the battle-wounded. Bedford started thinking about an escape plan in case her family needed to leave in a hurry, and she and her husband set aside packed suitcases and cash. Then, for the first time in her life, Bedford went to a gun range and shot a .22 handgun. Now she regularly takes her two young children, 7 and 10, to target practice. "Over the last two years, I started feeling more and more unsettled about everything I was seeing, and I started thinking, 'What if we were in the same boat?'" says Bedford, 49.
Snow-Removal Bills Leave States Scrambling Paying for Future Storms Worries Officials After Blizzards Squeeze Cash-Strapped Budgets in Midwest, East The blizzards that hit the Midwest and the Eastern Seaboard this month rang up huge snow-removal bills for cash-strapped state and local governments -- and left officials scrambling to figure out how they will pay to clear roads later in the winter. Maryland's State Highway Administration has spent more than $27 million this year on snow removal, the bulk of that clearing away a massive pre-Christmas storm. But the agency's annual snow-removal budget is just $26 million.
Will recession bring the end of free TV? For more than 60 years, TV stations have broadcast news, sports and entertainment for free and made their money by showing commercials. That might not work much longer. The business model is unraveling at ABC, CBS, NBC and Fox and the local stations that carry the networks' programming. Cable TV and the Web have fractured the audience for free TV and siphoned its ad dollars. The recession has squeezed advertising further, forcing broadcasters to accelerate their push for new revenue to pay for programming.
Judge Napolitano : Healthcare is a Good, Not A Right!
Trial Lawyers Sidestep Malpractice Curbs With Blitz in Congress U.S. Senate staff members arriving at work by subway this month were greeted by signs proclaiming that "98,000 patients may die" through medical malpractice. On a single day in October, lawmakers received visits from more than 70 victims of doctors' errors and the attorneys who represented them. And the trial lawyers' political action committee gave members of the Democratic congressional majority more money than all but two other PACs.
Michael Moore Blasts House Health Care Bill "The health insurance companies are going to make an extra 70 billion dollars as a result of Americans being forced to buy their health insurance. What company wouldn't love this bill?" -- Michael Moore in Toronto Tuesday, November 17th, 2009
Codex Alimentarius (World Food Code) Summarized in 7 Points Dr. Rima Laibow HealthFreedomUSA.org, the website of the Natural Solutions Foundation, is beholden to no one: our only interest is health freedom. Rima E. Laibow, MD, successful natural medicine physician since the 1970s, has studied 16,000 pages of Codex documentation. Her conclusion is that people who say that Codex is "consumer protection", "voluntary", or "harmless" are, at best, seriously mistaken.
Codex: Serious Threat to Health and Health Freedom
Serves Economic Interests of Sickness Industries Through WTO and Napoleonic Code
DSHEA Protects America From Codex Alimentarius
Your Action is Needed Now!
Conclusion The objective of the pro-Codex Alimentarius multi nationals is to "boil the frog slowly" so that we do not wake up to it in time to avoid Codex. Once we have "HARMonize" to Codex Alimentarius, as long as we are in the WTO, we cannot amend or change what we've been "HARMonize" to. Codex Alimentarius will go into global implementation by December 31, 2009, unless We, the People, avert it. We must act now because right now, with $758 Million spent on declared Congressional lobbying by Big Pharma last year, there are members of Congress who are trying to overturn DSHEA and allow Pharma-friendly free reign for Codex. If protective laws like DSHEA are destroyed, the sanctioning power of the autocratic WTO kicks in, and it will be impossible to get out from under Codex Alimentarius. We can protect our access to high potency nutrients and stave off an adulterated food supply only by putting pressure on Congress
Codex Alimentarius - Google video 1:29:27 - 1 year ago Having spent the past twelve months investigating Codex Alimentarius, I am deeply disturbed by the almost total lack of awareness (or even interest) with regard to the implications of this pernicious global Commission, particularly amongst those most affected by the excesses of this restrictive legislation. In the words of the National Health Federation[i], the aims and objectives of Codex Alimentarius are as follows: * Only low-potency, "me too" supplements available that will do nothing for your health. * All or most foods genetically-modified. * Beneficial supplements unavailable or sold by prescription only. For many people, this agenda is so outrageous, they cannot believe such goals are achievable; yet this may well be the reality as soon as 31st December 2009, if the Codex Alimentarius Commission continues to disregard input from those who offer a counter perspective to the combined forces of Big Farmer & Big Pharma.
Codex Alimentarius Threatens Human Health On its web site, CA (Latin for food code) says: "The Codex Alimentarius Commission was created in 1963 by the FAO (Food and Agricultural Organization of the UN) and WHO (World Health Organization) to develop food standards, guidelines and related texts such as codes of practice under the Joint FAO/WHO Food Standards Programme. The main purposes of this Programme are protecting health of the consumers and ensuring fair trade practices in the food trade, and promoting coordination of all food standards work undertaken by international governmental and non-governmental organizations." Whatever its founding purpose, CA is much different today because corporate interests control it - global pharmaceutical, food, and banking giants in league with complicit UN and government agencies to promote GMOs over healthy foods, and drugs over natural remedies by restricting or banning vitamin and dietary supplements, except ones they control. Organic food as well by irradiation and hidden synthetic additives or ingredients.
Codex Alimentarius: Big Brother's Plan to Control Health Supplements Monstrously Toxic Power Play for Control of the Global Food Supply & Natural Health Industry The Codex Alimentarius agenda, which has long metastasized in the recesses of closed board rooms and governmental chambers, is now coming to light. This is the paramount issue of our times, yet few know about it. If Codex standards ever replace the current laws in the U.S. governing food and dietary supplements, it will affect not just Americans' right to choose supplements, but our right to grow crops with untampered seeds, to buy pure organic food, and to live free of the tyranny of Big Agro-Chem-Pharma-Med, through health-destructive FDA rules enacted and enforced by a pro-corporate government that cares nothing about our health freedom. In other words, the "natural health" industry will perish. Now more than ever, we must exercise our democratic duty and be vigilant in protecting that freedom, the health and survival of the Earth, and all her creatures and citizenry.
Judge Napolitano : Health Care Bill Will Destroy American Liberty!
Obama Slams Security Breach Reports, Intercepts Suggested Attack Preparations; Multiple Agencies Had Warning The U.S. had multiple pieces of information about alleged bomber Umar Farouk Abdulmutallab, according to senior U.S. officials, including intelligence reports and communications intercepts suggesting a Nigerian was being prepped for a terror strike by al Qaeda operatives in Yemen. The intercepts were collected piecemeal by the National Security Agency, which has been monitoring al Qaeda militants in that country, including former Guantanamo detainees believed to be leaders there.
Lieberman: Next Stop on the War on Terror Express – Yemen! On Sunday, Rep. Pete Hoekstra (R-MI) and Sen. Joe Lieberman (I-CT) told Fox News viewers about the latest country posing a threat to America: Yemen. Lieberman was particularly dire, warning that "if we don't act preemptively, Yemen will be tomorrow's war." On Fox News Sunday, Chris Wallace asked Hoekstra and Lieberman what kind of attitude America should take toward Yemen.
The Silent Cleric Who Holds the Key to Iran's Future We like to believe-and newspapers and television like us to believe-that the battle for Iran is being fought on the streets of Tehran, of Isfahan, of Najafabad. Untrue. The future of the nation is being decided in Qom, among the clerical leaders of Iranian Shia Islam; and one of the most influential of them-perhaps the closest of all the ayatollahs to President Ahmadinejad-is silent.
Eight Americans killed in Afghan blast were CIA agents Eight American civilians who were killed in a suicide attack at a military base in ?eastern Afghanistan yesterday were CIA agents, US officials confirmed tonight. CIA officials in Washington were not immediately available for comment, and US officials said they could not provide details before the agents' families were informed. The attack occurred late yesterday inside Forward Operating Base Chapman in Khost province, eastern Afghanistan. The base has been used to house a 'provincial reconstruction team' operating under Nato authority.
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Wed 12.30.2009
Patriot Radio News Hour Guest Host: Mark Call Radio show call-in # 877-254-7524
Trying to Revive an Economic Corpse We're coming to the end of the year… What have we learned? Here's how we would put it, a four-word lesson that applies to almost everything: "It's Not That Simple." We were on pretty solid ground - at least as far as understanding what was going on in the markets and the economy - up until the middle of 2009. The Bubble Epoque led to the Bust Epoque…just as we thought it would.
Tech Ticker's Best of 2009: Fan Favorite, Howard Davidowitz Davidowitz is a straight shooter who always tells it like he sees it. Whether it's his bearish predictions on the economy or his criticism of the government's bailouts, Davidowitz is always an impassioned observer.
All Eyes On Dollar As 2009 Comes To An End With a slow trading day expected today, investors will likely keep there eyes on the U.S. Dollar and whether it can maintain its recent upswing going into the New Year. Set to be released later today, the U.S. Consumer Confidence report should give traders a good idea about the general direction of the greenback as 2009 draws to a close.
FDIC Moves to Seize Slice of Bank-Stock Rallies The government has auctioned off more than 100 failed banks this year to other financial institutions. Now, it wants a bigger cut of the action. Starting next year, the Federal Deposit Insurance Corp. will ask bidders for some seized banks to offer the agency a chance to profit if the deal is well-received by the buyer's shareholders.
U.S. Economic Disaster Worse Than Weimar or Zimbabwe Interviewed by Louis James with Doug Casey L: So, Ben Bernanke just got named “Person of the Year” by Time magazine. I know you must have some thoughts in response to this auspicious event? Doug: I just don’t know where they find these people... On the other hand, Slime magazine has always said that those named Person of the Year are not necessarily the most laudable people, but those who’ve had the greatest impact on the events in a given year. That would explain Hitler’s achievement of the same honor, and Stalin getting the nod twice. L: Not to mention Bin Laden. Doug: Yes, let’s not mention him. This is different: Bernanke isn’t being held up as a villain, but as a hero
The Worldwide Crack Up Boom, According to Ludwig Von Mises Bill Bonner, June 2007 . . . . What is a "Crack-Up Boom?" Von Mises explains (with thanks to Ty Andros for reminding us): "'This first stage of the inflationary process may last for many years. While it lasts, the prices of many goods and services are not yet adjusted to the altered money relation. There are still people in the country who have not yet become aware of the fact that they are confronted with a price revolution which will finally result in a considerable rise of all prices, although the extent of this rise will not be the same in the various commodities and services. These people still believe that prices one day will drop. Waiting for this day, they restrict their purchases and concomitantly increase their cash holdings. As long as such ideas are still held by public opinion, it is not yet too late for the government to abandon its inflationary policy.'
Testing the Deflationist There are a handful of newsletter writers - but not one economist - who predict deflation. Why no economists? There is an old line, "where there are four economists, there will be five opinions." You would think that there would be at least one Ph.D-holding economist out there somewhere who is predicting price deflation. Maybe there is, but I have not found him yet. Note: nobody is predicting monetary deflation. The deflationists are predicting monetary inflation and price deflation. So, when you read someone who says that price deflation is just around the corner, you can be 99% sure that he is not an economist. That doesn't mean that he's necessarily wrong. It does mean that he can't find any back-up among the hordes of specialists who are paid to forecast such matters. He therefore has a problem in directing you to evidence.
2009 Review: Bulls Bet Big on Bernanke, Batter Bears What a difference a year makes: If 2008 was all about what went wrong on Wall Street, 2009 was characterized mainly by what went right, at least for the financial markets. Stocks sure didn't start the year on the right foot, tumbling into early March amid the ongoing fallout from the September 2008 Lehman Brothers bankruptcy and fears of bank nationalizations. But from the depths of the March lows, major averages mounted a historic and pretty much unrelenting rally. In the past 12 months, the Dow and S&P are each up more than 20% while the Nasdaq is up more than 40%.
The Debt Bomb Make no mistake; the developed world is drowning in debt and there are only two viable options – a global economic depression or very high inflation. It is our contention that the policymakers have chosen the latter option and over the following years, we will experience the trauma of severe inflation. Look. The American government is staring at total obligations of US$115 trillion, America’s debt-to-GDP ratio is off the charts and the American public is also up to its eyeballs in debt. Under this scenario, you can bet your bottom dollar that the American establishment will try to reduce this debt overhang through a process known as monetary inflation. If you have any doubt whatsoever, take a look at the chart below, which captures the incredible expansion in America’s monetary base.
We're on the Path for Fireworks in 2010 Many commentators have over the past few days churned out lists of 2010 predictions. Although never one to produce best and worst lists at the turn of the year, Richard Russell, 85-year-old doyen of newsletter writers and author of the Dow Theory Letters, did express a major concern, as quoted below: I’m thinking that we’re on the path for fireworks in 2010. The reason I say that is because the federal deficits are running into the trillions of dollars. The roll-over of debt coming up in the next two years defies comprehension. For instance, in the next two years the U.S. must roll over $2.5 trillion. Worldwide, banks during the coming two years will have to roll over $7 trillion. On top of that commercial real estate in the U.S. has $750 billion to roll over.
Leading the American Middle Class Through a Lost Decade As people prepare to pop champagne corks at midnight on New Year’s Eve, I see media hype about the years 2000-2009 being the "lost decade" in America. Those years overall were bad ones for Wall Street, but not for Main Street. So what if 401k portfolios became "201k" in and around the 2001 recession? House prices still went up. Jobs disappeared primarily in computer technology sector. The American middle class directly or indirectly measures its economic well being first by jobs and second by home ownership. All the other factors combined don't equal to either of these factors. Just because the stock market performed poorly over the zeroes doesn't mean it was a lost decade in suburbia. Middle America did just fine all the way through 2007 when the unemployment rate last stayed below 5%. Too bad Main Street’s lost decade didn't start on an even number nicely packaged for media spin and public consumption.
String of investment bubbles marked 2000-09 The bubble decade: Get-rich-quick lure of stocks, oil, mortgages led to trillion-dollar losses A string of exploding investment bubbles that started with the dot-coms and ended with mortgages and oil dominated the years from 2000 to 2009. And it looks like the next decade will be no different. It doesn't seem to matter to many hedge fund traders and other professional investors that the Standard & Poor's 500 index has turned in its first losing performance over the course of a decade, having fallen 23 percent from 1,469.25 at the start of 2000 to its current 1,126.20. Or that they or other investors helped create and then destroy the bubbles that left stocks worth $2.5 trillion less today than when the decade began -- and that's before adding in the effects of inflation.
Two hedge-fund managers predict the economy’s next leg down Shorting Goldman Sachs. PERHAPS ONE OF THE greatest failings in the run-up to the financial meltdown was a lack of perspective — an inability by many market participants to see the big picture. Not so with Kevin Duffy and Bill Laggner, principals of the Dallas-based hedge fund Bearing Asset Management. With the help of their proprietary credit-bubble index, developed in 2004, the managers sounded early warnings on housing and credit excesses, and capitalized handsomely on their forecasts by shorting Fannie Mae, Freddie Mac, money-center banks and brokers, builders, mortgage insurers and the like. Students of the Austrian school of economics, which espouses a free-market philosophy that ascribes business-cycle booms and busts to government meddling with interest rates, the pair is solidly in the contrarian camp, believing that the worst for the markets may be yet to come.
Pimco CEO: We're Trained to Think the "Farther You Fall, The Higher You'll Bounce Back. We're Hostage to the V"-Shaped Recovery Model Barton Biggs and Marc Faber think that investors should move out of bonds and back into stocks. On the other hand, the chief executive officer of bond giant Pimco - Mohamed El-Erian - says that most financial managers, investment officers and economists are erroneously assuming this will be a V-shaped recovery because they are "fighting the last war" instead of looking at what is really happening in the economy:
Poll: 70 Percent of Firms to Cut Jobs or Not Hire U.S. employers expect to hire more new workers in 2010 than they did in 2009, a sign the U.S. recession may be easing its grip, research showed on Tuesday. One-fifth of employers plan to add full-time, permanent employees next year, up from 14 percent in 2009, according to CareerBuilder.com, an online jobs site that surveyed more than 2,700 hiring managers and human resource professionals. Just 9 percent said they plan to cut head count in 2010, down from 16 percent in 2009, according to the nationwide survey.
Gold, silver to explode with 2010 treasury issuance Now that 2009 has come to a close, investors are looking forward to the happenings of 2010. One of the most important events is the issuance of nearly $2.2 trillion in Treasury bonds to fund government spending. Although $2.2 trillion seems relatively small compared to a federal debt just over $12 trillion, the size is magnified when you consider its impact on the markets.
2010: Deciding Year for Gold Is it prudent for investors to continue banking on gold in 2010 also after the unprecedented surge in prices of the yellow metal in 2009? Analysts are divided over this issue. With 2009 coming to an end and the global economic scene looking bright with India and China posting surprise economic growth, gold’s doomsday value has certainly come down. But still the yellow metal prices are on the rise showing no signs of a price correction. Gold closed at a record high of $1,215.30 in December, well up from its low of about $817 per ounce in January 2009.
Will gold boom again in 2010? AFTER the strengthening of the gold price by more than 20% – at one stage by 40% – since January, pundits are split over just how well the precious metal will fare next year. But three top experts do agree that it will be well above the price of just under $875 at which it began this year. This is despite gold failing to meet some expectations that it would enter the new decade at fresh highs. The yellow precious metal has climbed steadily through the year to end at 24% stronger than it began. Starting the year at a London fix of $874,50 an ounce, gold rallied through $1200/oz to hit a high of $1226,60 early this month.
Marc Faber on Economy Gold and Silver Part 1 of 3
Gold prices hold up as demand exceeds supply Gold has soared to record highs and there is no shortage of those wanting to get exposure to the precious metal, but will it all end in tears for investors? Gold shone brightly this year, but analysts are divided on whether 2010 could see some of the gloss fade. Gold closed at a record high of US$1215.30 (NZ$1715.73) in local trade on December 2, well up from its low of about US$817 an ounce in January.
Gold dips back below $1,100 as dollar rises Gold and other metals fell Tuesday in response to a stronger dollar, while energy futures eked out small gains. The price of gold ended a three-day winning streak, falling back below $1,100 as the dollar rose against other currencies. Gold for February delivery lost $9.80 to settle at $1,098.10 an ounce on the New York Mercantile Exchange. Gold is seen as a hedge against a weak dollar, so when the greenback rises, investors often sell the metal.
Gold's Volatility is Your Free Leverage "Gold is a high risk investment." Dec 27, 2009 - Martin Feldstein, former Chairman of Ronald Reagan's council of economic advisors and professor at Harvard. Gold is not a high risk investment. Martin is dead wrong. Gold is the lowest risk investment in the world. He is correct that the gold price is volatile, although it can be argued that the price volatility is because of the successful efforts of most world governments and the banksters to convince everyone that gold IS a high risk investment and an irrelevant asset.
US Mint Provides 2009 Fractional Gold Eagle Sell Out Figures 2009 Fractional American Gold Eagle bullion coins are in the history books with leading sales figures, despite their late launch and quick sell out. Having only been released on Dec. 3, 2009, the coins in the fractional sizes of one-half ounce, one-quarter ounce, and one-tenth ounce weights recorded smashing release day sales — 345,000 were sold for a total of 58,000 ounces of gold. On the very next day, the United States Mint announced that the supply of the smallest size was depleted, and that the other two sizes were nearly exhausted. It offered the remaining bullion coins in an allocated process, and then suspended sales until the final 2009 inventory was produced from available in house blank supplies.
Gold prices driven by huge investment demand . . . . Investment demand has been the main driver behind prices over the past couple of years and more so over the past several months. I think investors continue to be concerned over financial markets, economic conditions and political conditions as well. So I think with weak economic growth, with high unemployment, with what’s going on in Afghanistan, Iran, etc., you have increased concern. And investors continue to rush to safe-haven assets such as gold.
Peak Gold Pushes Prices Since 1999, global gold production has fallen 19% while gold prices have jumped 400%. Many analysts believe one of the contributing factors to prices' meteoric rise is the constriction of above ground gold stock. Above ground stock grows by 2,400 tons a year but as central banks shift from being net sellers of gold to net buyers and investor demand increases, gold supply tightens. If this trend continues, gold prices could see another spike up.
Marc Faber on Economy Gold and Silver Part 2 of 3
Gold rush grips China as people on buying spree As the year nears to a close and 2010 is all set to shine, there is gold glittering in the Chinese landscape. There is a mad gold rush going on across China as people are on the streets, swarming gold jewelry shops to buy coins, bars and ornaments during an year-end shopping spree. China is today the world's largest gold market. China recently overtook India and emerged as the largest gold consumer in the world. The dragon land is the largest global gold producer.
No full stops for central banks’ gold race In October this year, Reserve bank of India triggered a new wave among central banks across the globe, resulting in huge purchases of gold by them. With India leading the way with a 200 tonne gold purchase from the International Monetary Fund (IMF), other banks also followed suit by purchasing the yellow metal in bulk. Now, to add to that in 2009 European Central Bank (ECB) has decided to downsize its annual gold sale to 155 tonne. This move has further boosted the central banks’ crave for the yellow metal. Before this, Sri Lanka and Russia had purchased gold through their central banks.
U.S. Dollar and Gold Trends into 2010 The dollar finally broke through resistance at 23, which has turned into support. Price is backing up and testing support. The CCI index at the bottom of the chart has gone from overbought (+200) to 89. When an asset moves from being this overbought to back below 100, it often signals a consolidation/correction is likely. As reported last week, some commodities have been harder hit than others: gold and oil receiving the short end of the stick. This week, however, oil spiked up almost 5%, while gold stabilized. The daily USO (oil) chart shows a positive MACD crossover with the histograms turning up into positive territory as well.
U.S. Dollar, Gold Stocks and Inflation 2010 In his most recent work, Martin Armstrong postulates that because of accelerating inflation, possibly leading to hyperinflation, a falling dollar ($), cycles associated with his Economic Confidence Model (ECM), and a move away from immovable assets by the investing public, stocks are destined to hit new highs as measured by the various indices around the world, and that such a move could begin in earnest at any time. And while he does allow for an alternative scenario, one where stocks could most pessimistically test the March lows in 2011 (an ECM low), using the Dow for discussion purposes, according to Martin a more likely scenario is that allowing for volatility, 2010 should be characterize by a trading range between 12,500 and 8,800, with new highs possible as early as 2011, the inverse of the possible low discussed above.
Why is the U.S. Dollar Rising, Treasury Bond Market Failure 2010? Now am not a trader nor do I rely on charts but those who do, tell me that dollar has broken a “falling wedge” and is all set to rally a great deal in the coming weeks. Most research houses have put in dollar targets of anywhere between 78 and 83.
JP Morgan: 78
Morgan Stanley 82
CLSA 83
GS: They still cant believe dollar is rallying let alone leaving a target.
USD collapse 2012 and the end of the world as we know it Devolution of the USD 2012? - As the first public article for me just before 2010, it seems appropriate for me to comment on one of the biggest stories we will be all facing – that is an end game of events leading to the end of the USD. The implications for the world are no less than Armageddon – like. I mean it. Before we get into some details, I have been working on forecasts for 2010, and my study of the USD situation and how much time it has left. I first came to the conclusion that it was roughly (and I am getting close here on timing, I’m sure of this) two years from 2010. Actually, the calculation is two more years of relative USD functionality before the world realizes in about a shocking week’s time that the USD is just about to really go belly up. It’s not 5 years out anymore in my calculations, we have roughly two more years left.
In God We Trust I'm not here to preach today. Well, maybe I better take that back. I do want to persuade you of something. But we're not going to talk about religion. Unless you consider having faith in fiat a religion. I would call that having faith in False God's. If the dollar is your almighty god, then Pilgrim, I am here to convert you. Having faith in the dollar is not going to save you when hyperinflation hits.
Marc Faber on Economy Gold and Silver Part 3 of 3
U.S. Dollar Takes Temperature of Troubled World How is one to explain the wild gyrations in the international exchange value of the U.S. dollar in recent times over the past year or so? During one month it is falling fast, in another it is rising just as fast. Since early December, it has risen about 5 percent against the yen -- not a weak currency these days -- and almost as much against the euro. Some older-fashioned bankers must be yearning for the days of fixed exchange-rates, for a time when a national currency was attached to the steady price of gold. Alas, no more. So it is not just the U.S. dollar and other currencies, but also the spot prices of oil, gold and other commodities that fluctuate wildly in the world markets.
Elvis Has Left The Building In his most recent work, Martin Armstrong postulates that because of accelerating inflation, possibly leading to hyperinflation, a falling dollar ($), cycles associated with his Economic Confidence Model (ECM), and a move away from immovable assets by the investing public, stocks are destined to hit new highs as measured by the various indices around the world, and that such a move could begin in earnest at any time. And while he does allow for an alternative scenario, one where stocks could most pessimistically test the March lows in 2011 (an ECM low), using the Dow for discussion purposes, according to Martin a more likely scenario is that allowing for volatility, 2010 should be characterize by a trading range between 12,500 and 8,800, with new highs possible as early as 2011, the inverse of the possible low discussed above. Such an outcome would be predicated on 2009 finishing above 10,800 (1140 on the S&P 500[SPX]), and 12,000 next year. Without a doubt, if such an outcome were to unfold, I would also have few reservations about probabilities in this regard, this, and the likelihood of continued $ weakness.
Astonishing Inflation Data from the BLS I’m talking about inflation data courtesy of the Bureau of Labor Statistics (BLS). I find the stats startling because it’s proof positive that inflation is far from dead. And as I just mentioned, even more so because the BLS’s inflation data is contrived and manipulated to almost always show less inflation than there really is. Consider the following price increases which have occurred since the beginning of the financial crisis in October 2007. In the 24 month period since then, a time when deflation was supposedly striking everywhere …
Food and beverage prices increased an average of 5.6%
Cereal and bakery prices jumped 11.5%
Sugar and sweets prices, up 11.8%
Cooking oils, up 11.6%
Meanwhile …
The cost of medical care increased an average of 6.7%
Medical care services, up 7.1%
Hospital services, up 14.0%
The cost of education (tuition) at private schools jumped 10.7%
Educational books and supplies, up 14.9%
The bubble decade: Get-rich-quick lure of stocks, oil, mortgages led to trillion-dollar losses A string of exploding investment bubbles that started with the dot-coms and ended with mortgages and oil dominated the years from 2000 to 2009. And it looks like the next decade will be no different. It doesn't seem to matter to many hedge fund traders and other professional investors that the Standard&Poor's 500 index has turned in its first losing performance over the course of a decade, having fallen 23 per cent from 1,469.25 at the start of 2000 to its current 1,126.20. Or that they or other investors helped create and then destroy the bubbles that left stocks worth $2.5 trillion less today than when the decade began - and that's before adding in the effects of inflation.
John Hussman Says Stock Market Bulls Dancing on the Edge of a Cliff Last week, the dividend yield on the S&P 500 dropped below 2%, versus a historical average closer to double that level. While part of the reason for the paucity of yield in the current market can be explained by the 20% plunge in dividend payouts over the past year, as financial companies have cut or halted dividends to conserve cash, the fact is that current payouts are not at all out of line with their historical relationship to revenues, and even a full recovery of the past year's dividend cuts would still leave the yield at a paltry 2.5%. The October 1987 crash occurred from a yield of 2.65%, which was, at the time, the lowest yield observed in history, matched only by the 1972 peak prior to the brutal 1973-74 bear market.
Small Chinese Company Tells Goldman To Take A Hike, Refuses To Pay $80 Million In Derivative Losses It appears that even after thoroughly dominating the US legislative, judicial and executive branches, the long tentacles of the squid have been no better than the Mongolian hordes at overcoming the Chinese Wall (which is ironic seeking how easy it is to ignore the same construct internally between the firm's prop and flow traders...and yes, we will be posting our response to Goldman shortly, we have not forgotten). In the meantime, half a world away, a small Chinese power generator, Shenzhen Nanshan Power, is blatantly refusing to honor contracts with Goldman Subsidiary J. Aron for $80 million in derivative losses, and it appears that China itself has decided to stand behind the small company.
Liberty, Fannie & Freddie, Fed, housing
Are Banks Scamming Fannie? You remember the announcement that Fannie and Freddie would have an "unlimited" credit line from Treasury to cover shortfalls and buy-outs of defaulted loans from MBS, right? Well then, read this from the forum: After the Fannie news came out this weekend, a friend called me and his brother works for Chase Mortgage. He told me that Chase is redoing stated income loans and instead of actually appraising the home, they are going back 3 years on the homes valuation in order to get the loan processed. Then they are selling these mortgages to Fannie Mae. Yes, that's an anecdotal claim, but if true can someone explain to me how this isn't out-and-out fraud? Is Fannie requiring the actual appraisal with the loan package information they buy, or is the entire "verification" nothing more or less than a checkbox that says "yes, we have an appraisal"? Toxic waste dumping ground? Maybe.
Moody's: November credit card payments slip More U.S. credit card users fell further behind on their payments in November, Moody's Investor's Services said Tuesday. The charge-off rate on U.S. credit cards, as measured by Moody's Credit Card Index, rose to 10.56% last month after falling for the two previous months. October's charge-off rate was 10.04%. The charge-off rate measures those credit card account balances written off as uncollectible, as an annualized percentage of total outstanding principal balance. The record-high of 10.76% was reached in June.
Credit Card Writeoffs Rise, Could Get Worse U.S. credit card debts written off as uncollectible rose in November, following two consecutive months of decline, though early stage delinquencies dropped for the month, Moody's Investors Service said Tuesday. Credit card charge-offs rose by about one-half percentage point in November to 10.56 percent, and is likely to continue to rise to a peak of between 12 percent and 13 percent in mid-2010, Moody's said in a statement.
Ky. budget shortfall could exceed $1.5 billion Kentucky governor warns budget shortfall could surpass $1.5 billion over next 2 years Kentucky could be facing a budget shortfall of more than $1.5 billion over the next two years because of the economic recession, Gov. Steve Beshear said Tuesday. "We face a challenge much greater than many had anticipated," Beshear said at a Capitol news conference. "Obviously, this is going to require, more than ever before, a cooperative, bipartisan working relationship between the legislature and the governor's office if we are going to continue to move this state forward." The Democratic governor didn't rule out the possibility of furloughs or layoffs among the state's nearly 34,000 employees.
Local tax coffers fall lower nationwide In another ominous sign for state budgets nationwide, state and local governments reported another drop in overall tax revenue on Tuesday. General sales tax, individual income tax and corporate income tax were all down in the third quarter of 2009, resulting in an overall 6.7% drop in total tax revenue, compared to the same quarter in 2008, according to the U.S. Census Bureau. This is the fourth consecutive quarter in which tax revenue collection has fallen.
The Mother of All Balance Sheets Motrgage Backed Madness The Federal Reserve’s balance sheet has quietly ballooned back to near-record highs. The Fed announced yesterday that it’s balance sheet expanded to $2.22 trillion last week, it’s grossest level in nearly a year and just a hair from an all time high. Hmmm… if Mr. Bernanke assures us the recession is “very likely over,” then why is the Fed balance sheet in crisis mode? What are they worried about? Here’s the answer:
Shoplifters? Studies Say Keep an Eye on Workers Gift cards are just so easy — so easy for dishonest employees to exploit, that is. At the Saks flagship store in Manhattan, a 23-year-old sales clerk was caught recently ringing up $130,000 in false merchandise returns and siphoning the money onto a gift card. “Gift card fraud is spiking,” said Joshua Bamfield, author of the Global Retail Theft Barometer, an annual international survey of retailers. “To employees, this is like currency. It’s almost as good as the U.S. dollar.”
Illinois AG to Fed: End Incentives for High-Risk Mortgages Illinois’ attorney general Lisa Madigan urged the Federal Reserve to end financial incentives for loan officers and mortgage brokers for the types of loans written for borrowers. According to a statement from Madigan’s office, federal law allows lenders to receive bonus compensation based on the type of loan issued, meaning loan officers who place borrowers in higher risk, adjustable-rate mortgages may actually receive incentives to do so. An inquiry to the Fed was not immediately returned.
Atlanta home prices off 8.1 percent from last year Georgia home prices were essentially flat in October from a month earlier, but are still off significantly from the same period last year, according to a report issued Tuesday. According to the Standard & Poors/Case-Shiller Home Price Index, the price of a home in Atlanta declined 0.2 percent following monthly rebounds in price over the summer months. Still, prices overall are off 8.1 percent from October 2008, though that figure has narrowed. The report comes a week after the National Association of Realtors said the sales prices of existing homes in November rose 2.4 percent from the same period last year.
Stable Home Price Data Can't Dash Double Dip Fears U.S. home prices were unchanged in October, according to the widely watched Standard & Poor's/Case-Shiller indexes released on Tuesday, indicating stabilization in the hard-hit housing sector though the figures dashed hopes for a sixth straight monthly increase. The S&P composite index of home prices in 20 metropolitan areas was flat in October, falling short of expectations for a rise of 0.2 percent according to a Reuters survey. September's index was revised upward to a gain of 0.4 percent, from a previously reported 0.3 percent.
Home Prices Mask Signs of Weakness Just as the economy is finally beginning to strengthen, the real estate market is showing new signs of deterioration. Prices slipped in many cities in October, new figures show, despite low mortgage rates and a generous tax credit meant to spur sales. Now rates are starting to rise, making it harder for many buyers to afford a house, and the tax credit seems to be losing its capacity to lure them into the market.
Bad news for housing: Prices flattening Home price gains earlier this year flattened out in October, according to a report issued Tuesday. The S&P/Case Shiller Home Price index, covering 20 of the largest metropolitan areas in the nation, was unchanged in October, after four consecutive months of gains. The index is down 7.3% from 12 months earlier. "The turnaround in home prices seen in the spring and summer has faded," said David Blitzer, chairman of the Index Committee at Standard & Poor's, in a statement. "Coming after a series of solid gains, these data are likely to spark worries that home prices are about to take a second dip," he said.
Mortgage Rate Jump Could Choke Off Housing-Led Recovery As the 2010 approaches, a mix of housing market factors are falling into place which could lead to a very nasty start to the New Year for the U.S. economy. If predictions of soaring fixed mortgage rates come true and damper any nascent housing recovery, the United States could experience the double-dip recession many experts have warned is possible. Morgan Stanley now predicts 10-year Treasury bond yields will jump more than 40 percent next year, while 30-year fixed mortgages may surge more than 50 percent. The exploding budget deficit will do the damage, David Greenlaw, Morgan Stanley’s chief fixed income economist, told Bloomberg News.
What Soviet Medicine Teaches Us In 1918, the Soviet Union became the first country to promise universal "cradle-to-grave" healthcare coverage, to be accomplished through the complete socialization of medicine. The "right to health" became a "constitutional right" of Soviet citizens. The proclaimed advantages of this system were that it would "reduce costs" and eliminate the "waste" that stemmed from "unnecessary duplication and parallelism" — i.e., competition. These goals were similar to the ones declared by Mr. Obama and Ms. Pelosi — attractive and humane goals of universal coverage and low costs. What's not to like?
Health Care Nullification: Things Have Just Gotten Underway“The several States composing the United States of America, are not united on the principle of unlimited submission to their General Government.” ~ Thomas Jefferson For the past few days, I’ve received loads of e-mails urging me to get active regarding the healthcare vote – most of which had a subject line similar to: “Last Chance to Stop National Healthcare!” Well, if you believe the only way to protect your rights is by begging federal politicians to do what you want, then these e-mails are certainly right. The vote went as expected, and so will the next.
Consumer confidence rises, but still weak Americans are ending 2009 feeling better about the economy than when the year began, buoyed by optimism that job prospects will improve in the first half of 2010. Consumer expectations for the job market reached their highest level in two years, but most people remain downbeat about their current prospects, according to a monthly survey released Tuesday. The survey also showed that fewer people plan to buy automobiles and homes in the next six months, compared with November.
As defense agencies hire, other government workers get incentives to retire Uncle Sam may be hiring, but he's also trimming staff in some corners of the government, as agencies suffer through a budget squeeze or shift their focus. The federal government hired 97,445 people in the first nine months of 2009, mostly for the departments of Defense, Homeland Security and Veterans Affairs, according to the Office of Personnel Management. But just as new faces show up at some offices, seven agencies or departments hope to cut about 37,000 workers with buyouts and early-retirement offers.
GM offers dealers incentives on Pontiacs, Saturns General Motors is sweetening the deal to help blow out dwindling stocks of discontinued Pontiac and Saturn models. GM just told dealers that it will give them a $7,000 incentive for every leftover vehicle from either brand that they move into their rental or service fleets. They could then sell the vehicles to consumers and pass along some or all of the savings.
GMAC Said to Discuss $3 Billion or More in U.S. Aid GMAC Inc., the home and auto lender that counts the U.S. government as the largest stakeholder, is discussing with the Obama administration a third bailout of $3 billion to $4 billion, said a person familiar with the matter. The size of the assistance is under negotiation, the person said on condition of anonymity because the talks are private. A deal may be reached in days as Detroit-based GMAC incorporates losses from its home-loan businesses, the person said.
Japan: Slowly Going Broke We reported that the US government would need to roll over $2.5 trillion worth of debt next year. We probably erred. The number was right, but it was meant to be over the next two years. During the next two years also, worldwide, banks need to roll over $7 trillion. Whether it is over one year or two years, we’re talking big money. Most people who bother to think about it are coming to the conclusion that this is very inflationary…and very bullish for gold. They think the Fed will need to “monetize the debt” directly, or indirectly. One way or another, they say, the central bank will have to increase the volume of money so that the government can finance its deficits.
Estate tax set to expire Thursday Benjamin Franklin's maxim that "nothing is certain but death and taxes" remains true. But a congressional stalemate has left the federal estate tax, the levy on assets left to heirs, in doubt for at least part of 2010. The tax is poised to expire Thursday, though the House and Senate are expected to pass a reauthorization, possibly retroactive to Jan. 1, next year. In the meantime, what might seem like a potential tax savings has become a guessing game for taxpayers, accountants, estate planners and tax lawyers. The impasse also could mean capital gains taxes on more inheritances.
Is There a Constituency for Liberty in the U.S. Media? When I was a journalism student at the University of Tennessee 35 years ago, one thing we were told over and over again was that journalism served a "watchdog" role in keeping tabs on government. I had assumed (naïvely, of course) that the term "watchdog" meant serving as a counterforce against the predations of the state. Alas, what I have found that it really means is that modern journalists and their mainstream organs like the New York Times, Washington Post, Vanity Fair, Time and Newsweek, not to mention a gaggle of numerous smaller wannabe publications, are making sure that the state is using all of its powers and then some to push people into line. As a college professor who works on a faculty that is overwhelmingly left-liberal, the one thing I hear time and again from my colleagues is that people need a tough, "kick-ass" government to make them behave.
Ron Paul on Terrorism Congressman Ron Paul gives his thoughts on Yemen, the attempted airline bombing, the motivations of Al Qaeda, the radicalization of the Middle East, and the negation of our liberties to government provided "security."
Putin threatens new missiles to counter U.S. shield Russian Prime Minister Vladimir Putin warned Tuesday that Russia will have to go ahead with a new class of advanced offensive nuclear missiles if the United States continues with plans to develop a defensive missile shield. The powerful ex-president said in Vladivostok that the dispute was the main issue holding up negotiations on a new Strategic Arms Reduction Treaty (START).
US readying paralyzing Iran sanctions The US administration is heading towards placing "paralyzing" sanctions on Iran, Israeli Ambassador to Washington Michael Oren said Tuesday. Speaking to Army Radio, Oren added that although it was "too early," the US had also not yet abandoned the military option. "The Americans attribute the highest importance to the Iranian issue," he said during the interview. "The US, along with other countries, is preparing to impose paralyzing sanctions on [Iran], and preparations are happening even now."
Afghans Increasingly Turning to Taliban’s Shadow Govt NATO: Taliban Has 'Government in Waiting' Reports of a Taliban “shadow government” complete with its own court system are not new. Indeed, we’ve been covering the phenomenon for well over a year, and it has only grown as the group’s influence has gained. But to appreciate just how big and how credible this alternative government has gotten, one needs to closely examine its inner workings, particularly in regions where it has replaced the NATO-backed government for all intents and purposes.
Yemen: the new front in the fight against terror The trail of the foiled terrorist attempt to blow up a packed Northwest Airlines flight to Detroit on Christmas Day appears to lead to Yemen. At least the suspected attacker, Umar Farouk Abdulmutallab, 23, of Nigeria, has said in initial interrogation that al-Qaeda had trained him in Yemen and provided him with the explosive device. The poorhouse of the Arab world has suddenly come to the centre of international media attention. Will Yemen become the next front in the so-called "War on Terror?" With its impenetrable mountain ranges and rocky deserts, its tribes and clans following ancient laws of honour, Yemen does indeed provide an ideal terrain for terrorist training camps.
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Tues 12.29.2009
Patriot Radio News Hour Guest Host: Mark Call
Survey finds 'significant' anxiety about economy The majority of Americans say they still have "significant uncertainty and anxiety" about the nation's economy and are doubtful about a quick recovery in 2010. In a survey of 1,000 Americans by StrategyOne, 87 percent say the nation remains in a recession, despite economists' assertions, and 78 percent disagree with economists that the nation is on the rebound. Only one in four Americans polled said the economy will recover fully in the new year, and half say the economy won't be on track until the end of 2011 or 2012. Fifteen percent of respondents said they think the economy will never recover.
Brace For Impact: In 2010, Demand For US Fixed Income Has To Increase Elevenfold... Or Else As everyone is engrossed by assorted groundless Christmas (and other ongoing bear market) rallies, and oblivious to the debt monsters hiding in both the closet and under the bed, Zero Hedge has decided it is about time to present the ugliest truth faced by our 'intellectual superiors' and their Wall Street henchman who succeeded in pulling off Goal #1 for 2009 - the biggest ever bonus season (forget record bonuses in 2010... in fact, scratch any bonuses next year if what is likely to transpire in the upcoming 12 months does in fact occur).
Doug Casey on Bungling Ben . . . . Bernanke is always presented as a Ph.D., a scholar of the Great Depression, its causes, and how to cure such an economic downturn. But he hasn’t prevented an economic catastrophe – he’s done just the opposite of what needs to be done, and there’s going to be hell to pay. It’s quite perverse. Look at Alan Greenspan. In the 1960s, he was an acolyte of Ayn Rand and wrote a famous essay defending the gold standard, which I read in her book, Capitalism: The Unknown Ideal. And then he goes on to become the most inflationary Fed chairman in history until Bernanke superseded him.
Why I Fear for my Country For the first time I'm scared. I mean really scared. For the first time in my lifetime it looks like America may actually be coming to an end. As I traveled over the Thanksgiving and Christmas holidays I paid special attention to the public. At gas stations and shopping centers - I took the time to observe. We are doomed. These people have nothing, know nothing, and are not interested. Talk about rabble. As I spoke to members of my family at holiday celebrations - about topics foreign to me - like what's going on with their favorite TV show... my heart sank. No hope. As I browsed the web to see the most recent joke of a terrorist attack - just enough not to cause property damage but just enough to scare the cringing American soccer-moms - I just stared. The conversation in the background continued - I didn't participate.
Fannie, Freddie Changes Clear Way for 'Large-Scale' Buyouts The U.S. government's expanded capital backstops and portfolio limits for Fannie Mae and Freddie Mac increase "the prospect of large-scale" purchases by the companies of delinquent mortgages out of the securities they guarantee, according to Credit Suisse Group analysts. The Treasury Department announced Dec. 24 that the two mortgage-finance companies, which were seized by the U.S. almost 16 months ago, could tap an unlimited amount of capital for three years, up from as much as $200 billion each. It reworked caps on Fannie Mae and Freddie Mac's mortgage-asset portfolios to require the holdings to fall to $810 billion by Dec. 31, 2010, rather than about $690 billion.
U.S. may prop up housing further via Fannie, Freddie Unlimited support may presage more aggressive action in mortgage market The government's decision to provide unlimited support to Fannie Mae and Freddie Mac probably presages more aggressive action to prop up the U.S. housing market. The government may put a mortgage-modification effort, called the Home Affordable Modification Program, or HAMP, into overdrive in coming years, pushing for reductions in the principal outstanding on home loans overseen by Fannie and Freddie, Bose George, an analyst at Keefe, Bruyette & Woods, wrote in a note to investors Monday.
Fannie and Freddie: Wards of the State, Yet Management Receives Private Sector Pay Packages I was disappointed with the Christmas Eve ditties from Treasury and FHFA re: the Agencies. To be honest, I was appalled. The two releases contained significant information. The timing was obviously an attempt to slip in some bad news while everyone is drinking eggnog. Of course that backfired. The blogs, and yes, the MSM disintegrated those that sent the emails out on Christmas Eve. The smell that these announcements have created is not likely to go away anytime soon. If you are reading this you know the story. Treasury ponied up for another $200b for Fannie and Freddie and the management of these entities are getting serious paychecks.
Mortgage Anxieties Mean Limbo for Fannie and Freddie Fannie Mae and Freddie Mac, the linchpins of the American housing market, continue to bedevil the U.S. financial system. In February 2003, their regulator issued a report saying the companies were taking on too much risk by using implicit government backing to plunge deeper into the mortgage market. The government-sponsored enterprises would pose a systemic threat to the economy in the "remote" chance that either failed, Armando Falcon told the Bond Market Association the same day. The Bush administration, considering his report a potential threat to financial markets, asked him to resign.
pt 1- 12-24-09 Gerald Celente 2010 predictions
pt 2- 12-24-09 Gerald Celente 2010 predictions
Gold Bubble Debate: Is it wise to invest in gold? As 2009 is heading for a close, traders, investors and analysts are in the midst of mixed feelings of hope, dejection and euphoria. 2009 was not a bad year for investors in stocks and commodities compared to the year 2008 when we were bombarded with bank failures and the global economy teetering on the brink of collapse. Markets revived partially in 2009. Investors are now confident that markets will come back to a boom in 2010.
Analysts divided on gold Gold has soared to record highs and there is no shortage of those wanting to get exposure to the precious metal, but will it all end in tears for investors? Gold shone brightly in 2009, but analysts are divided on whether 2010 could see some of the gloss fade. Gold closed at a record high of US$1215.30 in local trade on December second, well up from its low of about US$817 per ounce in January.
Gold: the commodity of the year Even though copper and sugar prices have more than doubled this year, 2009's commodity of the year has to be gold. In fact, it's probably the investment of the decade. If you bought gold at the millennium, you would be sitting on gains of about 280pc. An investment in the FTSE 100 over the same period would have lost you more than 20pc of your capital. When dividends and inflation are taken into account you would have barely broken even.
The current bull market in gold is far from over. In fact it is only just beginning While it has come off its highs, gold is still up 30% this year and, many factors still point to a long term bull trend. As we see the end of another year, and even though the price of gold has come off its highs of over $1225, the price gold gained some 30% this year. Now, as the dollar rebounds from it's lows, and as most equity analyst are looking for global equities to continue upwards, there is talk that gold has made it's high. While we are all entitled to our opinions, I believe that these analysts fail to see the bigger picture and that the price of gold has a long way to go before this bull market peaks.
Dip in dollar lifts prices for gold, other metals; Grain prices rise sharply in light trading Gold and other metals inched higher in light trading Monday as the U.S. dollar dipped against other currencies. Energy and agriculture futures also rose as the ICE Futures U.S. dollar index, a widely used measure of the dollar against other currencies, slipped 0.1 per cent. A drop in the dollar makes commodities more attractive to foreign buyers.
Holiday Gold, Oil and Index Trading Another holiday trading extravaganza!!! Last week the market fell into its regular holiday tradition of light volume, as institutions and big traders enjoyed the holidays thus allowing prices to drift higher. We still have one more week of light trading volume before this year and holiday season is officially over.
Gold rises as investors bet on $US drop Gold rose in New York for the third straight session on speculation that the dollar will extend a slump, boosting demand for the metal as an alternative asset. The dollar pared gains of as much as 0.4 per cent against the euro after declining 1.1 per cent in the previous three sessions. Gold has climbed 25 per cent in 2009, heading for the ninth straight annual gain, while the dollar slid 2.9 per cent. "Gold’s moves will all be dollar-based now," said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. "Some pressure has come off the euro, and that’s allowed gold to come back."
Gold recovers some ground as year end approaches and dollar slips In light trading over the holiday period, the gold price has recovered a little, although major markets remain closed. Gold inched higher on Monday,helped by a recovery trend in the euro against the dollar, but trade was light as many investors stayed on the sidelines with U.S. and European markets closed since late last week for Christmas. Spot gold was up 0.8 percent at $1,112.35 an ounce as of 0710 GMT, compared with New York's notional close of $1,103.80 It has risen more than 25 percent so far this year. Spot gold fell to a seven-week low of $1,074.10 an ounce on Tuesday, but has since attracted bargain-hunting.
China Bullish on Silver
Gold: how high will the price go in 2010? Gold rose to a record high in 2009, but can it continue to rise above the $1,200/oz level, or will it fall back? "Notwithstanding the recent correction - and the possibility that gold may yet fall further before bargain hunters and other buyers (including central banks) reappear - the four pillars of gold-price strength remain intact. They are inflation-fueling US monetary and fiscal policies; Central bank reserve diversification with the official sector being a taker rather than a supplier of gold in 2009 and the next few years; expanding retail and institutional investor participation in the United States, China, and around the world; and declining world gold-mine production.
Why Gold Will be the "Greatest Trade Ever" . . . . Don't forget that gold's clocked a positive gain every year since 2001. Yet gold's run is far from over; rather, it's just getting warmed up... My research tells me we're currently in what I've labeled as "Stage Two" of the current bull market in gold. Stage Two begins when gold decouples from the dominant currency (something that's clearly already taking place against the U.S. dollar). The yellow metal then rises against most other currencies, as investment demand kicks in.
If Gold Goes To $5000, John Paulson Could Become The Richest Man In The World If gold ends up rocketing higher as bulls expect, it could turn John Paulson into one of the richest men in the entire world, if not the richest. This is because much of the world's wealthy lost money during the recent crisis and remain long the world economy, in contrast to Mr. Paulson.
Gold undervalued Jeffrey Nichols expects it to go to $1 500 in 2010, $2 000-$3 000 longer term. Gold has enjoyed a long and enviable climb, rising some 380 percent from a cyclical low near $255 an ounce in April 2001 to an all-time high just over $1,225 early this month. Nevertheless, the bull market in gold has a long way to go - both in magnitude and direction. Looking ahead to 2010, don't be surprised to see gold trade at $1,500 or higher sometime during the New Year. And that's not all: I've been telling clients that the yellow metal's price will continue its long-term upswing for at least a few more years, very likely reaching $2,000 an ounce . . . and possibly hitting $3,000 or more before the gold price cycle begins its next long-term cyclical "bear" phase.
Gold, Dollar, Euro: 2010 'Menage a Trois'? Gold hit a 7-week low on Dec. 22 from recent optimistic data of the U.S. economy. For example, U.S. existing housing sales jumped more than expected, and GDP grew at a 2.2% rate in the third quarter, the fastest pace in two years, amid a larger-than-expected downward revision. The upbeat news lifted the dollar and pushed yellow metal prices to below the $1,100 benchmark. Bullion has gained 23% this year on a strong inverse relationship to the Dollar as the longest recession since World War II eroded confidence in the dollar and boosted gold’s status as a safe haven.
Gold Is the Decade's Best . . . . We consider gold a legitimate asset class, and for that reason, we consistently suggest that investors consider a maximum 10 percent allocation to gold-related assets — half in bullion or bullion ETFs and the other half in gold equities — and that they rebalance each year to capture the swings. What the next decade will bring for gold? Who knows. But we do know one thing — those who held gold for the past 10 years will have a happier New Year than those who listened to the perma-skeptics.
Gold rush grips China as people on buying spree As the year nears to a close and 2010 is all set to shine, there is gold glittering in the Chinese landscape. There is a mad gold rush going on across China as people are on the streets, swarming gold jewellery shops to buy coins, bars and ornaments during an year-end shopping spree. China is today the world's largest gold market. China recently overtook India and emerged as the largest gold consumer in the world. The dragon land is the largest global gold producer.
Gold may rise on Asian central bank interest regardless of dollar Strong dollar equals falling gold price, right? Except, perhaps, when Asia's central bankers are involved. Three-quarters of the region's $5 trillion in foreign-exchange holdings are parked in U.S. dollars. A desire to diversify away from the greenback, though, has become evident. The dollar's share in reserve accumulation dropped to less than 30% in the third quarter, Barclays Capital estimates. Admittedly, knowing exactly what is in central bank reserves takes guesswork, but analysts think most diversification in 2009 favored the euro.
Lindsey Williams - Economic Dollar Collapse Amero Gold Silver
The Trade of the NEXT Decade No, dear reader…it’s not that simple. It never is. That’s true of almost everything…. The bond market has begun to sell off. The big question is: what does it mean? Is it A sell-off? Or THE sell-off? We’ve done well with our simple trade for the last ten years. We bought gold. We sold stocks. But what’s ahead? Will that be the best trade for the NEXT 10 years too? Or is it time to sell bonds, rather than stocks? Hmmm….
U.S. Dollar Down Overnight Higher global equity markets are helping to boost demand for higher yielding assets, leading to a rise in U.S. stock index futures. The lack of any significant economic reports is giving traders a free ride to the upside. There is no strong resistance at this time. Treasuries are trading lower once again. Demand for higher yielding assets and a weaker Dollar is helping to pressure March Treasury Bonds and March Treasury Notes. The T-Bonds are trading below a retracement level at 115'08. Regaining this area could trigger a short-covering rally.
Chandler Says Dollar Gains May Be a 'Head Fake' Before Year-End The dollar's most recent gains may be a "head fake" as investors close bets before the end of the year that the greenback will fall, said Marc Chandler, global head of currency strategy at Brown Brothers Harriman & Co. "I'm not sure this is the real thing," New York-based Chandler said in an interview on Bloomberg Radio. "It's sort of like a B movie and with the first large sound it's going to be a head fake."
Forecast 2010 : The center does not hold… but neither does the floor James Howard Kunstler There are always disagreements in a society, differences of opinion, and contested ideas, but I don't remember any period in my own longish life, even the Vietnam uproar, when the collective sense of purpose, intent, and self-confidence was so muddled in this country, so detached from reality. Obviously, in saying this I'm assuming that I have some reliable notion of what's real. I admit the possibility that I'm as mistaken as anyone else. But for the purpose of this exercise I'll ask you to regard me as a reliable narrator. Forecasting is a nasty job, usually thankless, often disappointing - but somebody's got to do it. There are so many variables in motion, and so much of that motion is driven by randomness, and the best one can do in forecasting amounts to offering up some guesses for whatever they are worth.
"Reasonably High Chance" Of Double Dip Coming Next Year Paul Krugman was on ABC's The Week on Sunday declaring a "reasonably high chance" of a double dip coming next year. Actually, he doesn't sound quite as gloomy as you might guess. Yes, he describes the entire recovery so far as being driven by government spending and inventory rebalancing, but the odds of a double dip he does place at lower than 50/50, so that's good. Obviously he wants much more spending.
Paul Krugman Talks More Stimulus
Foreign central bank U.S. debt holdings fell: Fed Foreign central banks' holdings of U.S. Treasuries and agency debt at the Federal Reserve fell in the latest week, data from the U.S. central bank showed on Monday. The combined holdings of Treasuries and agency securities by foreign central banks at the Fed fell $4.97 billion to a total of $2.954 trillion in the week ended December 23. Treasuries held by overseas central banks at the Fed fell $1.412 billion to total $2.185 trillion. Foreign central banks' holdings of securities issued or guaranteed by the two biggest U.S. mortgage financing agencies, Fannie Mae and Freddie Mac, fell by $3.557 billion to $769.433 billion in the latest week.
New Frontier Bank failure highlights weaknesses in inspections and oversight As state auditors combed through the files of the Colorado Division of Banking in 2003, they discovered glaring problems in how it inspects banks. They found the staff of examiners inadequate to glean critical detail from banks' books. They spotted inconsistencies in how they gauged financial weaknesses. And they discovered that inspectors did not follow up on fraud risks they detected at banks. "Colorado's average number of institutions per examiner was higher than all but one other state" in a six-state region, according to the Office of the State Auditor findings. It was the last audit of the Banking Division.
A Record $118 Billion In US Debt To Be Auction Off In Final Week Of The Year It wasn't long ago that the US government had never even sold $100 billion worth of debt in a single week. Now, in the final week of the year (and a shortened, holiday one at that), the Treasury is set to auction off a record-tying $118 billion. WSJ: With foreign buyers holding about half of the Treasury market, their continued appetite for government securities is essential in order to continue funding mounting budget shortfalls in the U.S. at historically low interest rates. The auctions will be the last offerings of Treasury debt for 2009, adding to a record net supply of $1.48 trillion for the year. They start Monday with $44 billion in two-year notes, followed by $42 billon in five-year notes Tuesday and $32 billion in seven-year notes Wednesday, all matching the amounts offered a month earlier.
Treasuries Little Changed on Concern 5-Year Sale Demand to Cool Treasuries were little changed, with two-year yields at the highest level since August, on concern demand at today’s sale of five-year notes will cool after yesterday’s two-year auction was the weakest in four months. The Treasury prepared to offer $42 billion of five-year notes today, following a $44 billion auction of two-year securities yesterday and before a $32 billion sale of seven- year debt tomorrow. Treasuries of all maturities have fallen 3.7 percent this year, according to Bank of America Merrill Lynch indexes. That would be the worst performance since at least 1978, when Merrill began collecting the data.
Eyes wide open and petal to the metal On Christmas Eve, in No Morals, No Hazard, I talked about Eric Sprott’s report "Is it all just a Ponzi scheme?", which suggests that $704 billion in purchases of US Treasuries cannot be accounted for, since they are on file as purchases by what the Federal Reserve Flow of Funds Report labels the "Household Sector", which, it turns out, doesn't exist. It's merely a name under which all unknown purchasers are grouped, while remaining unknown. The purchaser may be the Fed itself, unwilling to admit to more purchases than are already on file. Alternatively, as someone suggested, the Treasuries may never have been issued in the first place, and the entire thing may be an empty charade aimed solely at keeping up the appearance of a functioning US sovereign debt market.
Our 2009 Christopher Columbus Prize Beginning a new tradition, we give an award to the person who has done the dumbest thing in the financial world during the preceding 12 months. We call it the “Christopher Columbus Prize,” named after the mariner who didn’t know where he was going, didn’t know where he was when he got there, and as Churchill pointed out, did it all at government expense. Anyone can make a mistake. But to make a truly colossal blunder you need the support of the taxpayer. That’s why TIME magazine named Ben Bernanke its “Man of the Year.” Yes, you guessed it, he is our man too.
Krugman: 'Reasonably High Chance' the Economy Will Contract Nobel Prize winning economist Paul Krugman said he thinks there’s a “reasonably high chance” the economy will contract in the second half of next year. On the "This Week" Roundtable, Krugman said he agreed with the assessment of fellow Nobel-winning economist Joseph Stiglitz that there is a significant chance the economy will shrink in 2010. “I would go with Joseph Stiglitz,” Krugman added, “I’m really worried about the second half.”
Ponzi Collapses More Than Tripled in 2009 It was a rough year for Ponzi schemes. An Associated Press analysis of all 50 states shows that the recession caused nearly four times as many Ponzi scheme collapses in 2009 as there were in 2008. Tens of thousands of investors watched more than $16.5 billion disappear. That included the life savings of many people. Investors lost more money to such scams in 2008 thanks to the failure of Bernie Madoff's long-running scheme estimated at $21 billion to $50 billion.
Fed exit strategy: Let banks set up CDs Fed proposes letting banks set up equivalent of CDs as tool to drain money from economy The Federal Reserve on Monday proposed allowing banks to set up the equivalent of certificates of deposit at the central bank, a move that would help the Fed mop up money pumped into the economy and prevent inflation from taking off later. Under the proposal, the Fed would offer so-called "term deposits" that would pay interest. Doing so would provide banks with another incentive to park their money at the Fed, rather than having it flow back into the economy.
War on Wall Street as Congress Sees Returning to Glass-Steagall A one-page proposal gaining traction in Congress could turn back the clock on Wall Street 10 years, forcing the breakup of banks, including Citigroup Inc. Lawmakers in both parties, seeking to prevent future financial crises while soothing public anger over bailouts and bonuses, are turning to an approach that's both simple and transformative: re-imposing sections of the 1933 Glass-Steagall Act that separated commercial and investment banking.
Feds probe banker Allen Stanford's ties to Congress The ties between indicted banker Allen Stanford and members of Congress -- including millions in contributions and weekends in five-star Caribbean resorts -- are now the subject of a sweeping federal investigation. Just hours after federal agents charged banker Allen Stanford with fleecing investors of $7 billion, the disgraced financier received a message from one of Congress' most powerful members, Pete Sessions. "I love you and believe in you," said the e-mail sent on Feb. 17. "If you want my ear/voice -- e-mail," it said, signed "Pete." The message from the chair of the National Republican Congressional Committee represents one of the many ties between members of Congress and the indicted banker that have caught the attention of federal agents. The Justice Department is investigating millions of dollars Stanford and his staff contributed to lawmakers over the past decade to determine if the banker received special favors from politicians while building his spectacular offshore bank in Antigua, The Miami Herald has learned.
Nathaniel Rothschild Said to Be Rusal IPO Investor Nathaniel Rothschild's private investment company may buy shares in United Co. Rusal's $2 billion Hong Kong initial public offering, said three people familiar with the plan. Paulson & Co., the New York hedge fund run by billionaire John Paulson, and the Russian state-owned development bank Vnesheconombank also may be among so-called "cornerstone" investors guaranteed shares in the IPO in exchange for a pledge not to sell them for a number of months, the people said. They declined to be identified because the information is private.
The Recession Begins Flooding Into the Courts New York State’s courts are closing the year with 4.7 million cases — the highest tally ever — and new statistics suggest that courtrooms are now seeing the delayed result of the country’s economic collapse. The Great Recession may be showing signs of easing, but the legal fallout from the financial troubles, the numbers suggest, may have only just begun. And the increase in New York offers a preview of the recession-related cases showing up in courts across the nation.
Assisted Living: Back to the Future It's right in my neighborhood, so I've probably driven past that gracious Victorian house, painted a dusty rose, a zillion times. But because it looks like many other houses in Montclair, N.J. - big old trees, nice landscaping, wraparound deck - I never realized that it was an assisted living facility. Ever since a 1990's building boom, the term "assisted living" has conjured up mental images of a three-story stucco building on a highway, with a brass chandelier in the lobby and a "concierge" desk. But long before those places began popping up, many owned by regional and national chains, lots of smaller, homier residences for seniors were tucked into ordinary neighborhoods.
Seniors Worry About Medicare Advantage Cuts Insurers constantly caution seniors that their Medicare Advantage perks such as hearing aids, dental payments and even gym memberships will fizzle if Democrats get their way and cut government subsidies for them. But tens of billions of Medicare dollars funneled through insurers also pay for extras that never reach beneficiaries: multimillion-dollar salaries, executive retreats in Hawaii, Scotland and Cancun, and massive expenditures on marketing to lure more customers to the privately administered Advantage plans that serve as an alternative to government-provided Medicare.
Democrats Say Final Health-Care Bill Will Look Like Senate's Any health-care legislation that reaches President Barack Obama's desk will be close to the version the Senate passed last week, top Democrats said yesterday. The Senate garnered the minimum 60 votes needed to overcome Republican objections and pass its measure overhauling health care, and any major changes would jeopardize final approval, said Senator Bob Menendez of New Jersey, chairman of the Democratic Senate Campaign Committee.
Healthcare Reform is a Lump of Coal Ron Paul Last week on Christmas Eve, after many backroom deals were made, the Senate passed the healthcare reform bill with a strictly partisan vote. I was pleased that my colleagues in the GOP are on the right side of this bill. Although this vote was a major step in healthcare reform becoming reality, they still have to reconcile the Senate bill with the House-passed version in conference committee. This could prove even more difficult and costly than the Senate vote. There was a little bit of controversy surrounding one particular Senator who was initially against the bill, but then, coincidentally, a large amount of Medicare funding specifically for his state was tucked inside and he ended up voting for it. One wonders how much more of that will have to go on to achieve final passage.
Health Care, The "Patriot" Act & the U.S. Constitution
D.C. housing market's collapse lessens developers' swagger In the go-go years of the housing boom, in one of Washington's hippest neighborhoods, Scott Pannick built more than 300 loft-style condos, many of them attracting fevered bids even before their gourmet kitchens were installed. "Sold just like that," Pannick recalled, snapping his fingers. That was before the housing market collapsed, before Pannick's lender seized his last modern design -- the glass, steel and brick Metropole on 15th Street NW. In September 2008, days after the fall of Lehman Brothers, Pannick trumpeted the opening of the Metropole by throwing a Hollywood-style theme party, with cigarette girls, spotlights and pink champagne.
Higher-End Homes Face Price Pressure Though the cheapest houses on the market may not get much cheaper, more-expensive homes still have further to fall, which will likely slow the broader housing recovery. The Standard & Poor's/Case-Shiller home-price indexes for October are due on Tuesday morning. Economists estimate the index tracking prices in 20 major cities was down 7.7% from a year ago. That would mark the smallest year-over-year decline since November 2007, but would also leave prices slightly lower than in September, ending a four-month string of month-to-month improvements. That might cause some anxiety about the housing recovery. Despite recent signs of a bottom, many observers expect home prices to fall an additional 10% before the bust ends.
Global Agenda: How's your house It's worth keeping an eye on the American housing market - after all, that's where the bubble developed and burst, and that's where the big trouble began, eventually encompassing the entire economy and then the whole world. The problem is that, at any rate at first blush, it's difficult to make sense of what is happening. There's no need to look further than the most recent data, published this week, to become thoroughly confused. What is one to make of the fact that sales of existing homes are rising sharply and seem to be recovering well from the slump, while sales of new homes fell sharply and have barely risen from the lowest levels they plumbed earlier this year?
Stranded by Arrow Trucking, employees strike back with lawsuit The class-action lawsuit claims that Arrow Trucking violated federal laws by not giving employees 60 days' notice of the shutdown. A class-action lawsuit against Arrow Trucking was expected to be filed in federal court Monday. A principal charge: The Tulsa, Okla., flatbed carrier broke federal law by not giving its employees 60 days' notice about its precarious financial state. Instead, Arrow last week stranded hundreds of its drivers around the country. Many of them found out their employer was shutting down when their company-issued fuel cards wouldn't work. On Tuesday, the company abruptly told its headquarters staff to pack up and go home. "It was just outrageous conduct, I think, to do it on the eve of Christmas," said Chuck Ercole, an attorney with Klehr Harrison Harvey Branzburg LLP in Philadelphia. "People's paychecks on the 15th bounced."
Information on Arrow Trucking shutdown:
TheBobChapmanChannel --Dec 24 2009 part 1
TheBobChapmanChannel --Dec 24 2009 part 2
Rolling in Dough, Still Kicking Out Families Goldman Sachs Subsidiary Among 'Loan Servicers' Collecting Criticism There's no place like home for the holidays. But this year, Phil and Barb Kubes and their three children will have to settle for memories of Christmas past. Last month, the Omaha, Neb., family was forced out of their home of 12 years after falling drastically behind on mortgage payments. Having failed to reach a workable solution with Litton Loan Servicing, the Houston-based company that collects their mortgage debt, the Kubes were foreclosed upon and told to vacate. They ended up renting a house across town.
Tribes buy back America - acres at a time Purchases to help protect culture, way of life by preserving sacred areas OMAHA, Nebraska - Native American tribes tired of waiting for the U.S. government to honor centuries-old treaties are buying back land where their ancestors lived and putting it in federal trust. Native Americans say the purchases will help protect their culture and way of life by preserving burial grounds and areas where sacred rituals are held. They also provide land for farming, timber and other efforts to make the tribes self-sustaining.
Weak economy motivates Americans to save more As crazy as it sounds, losing a $70,000-a-year job has been good for Marty Morua's finances. The former Wall Street stockbroker says the setback forced him to scrutinize his family budget and snip away at expenses. And soon, even with less income, their savings grew. First, he and his wife decided to live on her salary so he could be home with their 5-year-old daughter after school. Without a nanny, they saved $12,000 a year. He dropped services he didn't use on his cellphone -- texting and video games -- to pocket $250 a year. He took a defensive-driving course for a 10 percent discount on his auto insurance and dropped car-rental and roadside-assistance coverage, for an extra $150 a year.
Most important civil right of all Well, to paraphrase a famous president of a slightly earlier time, "you're doing a heckuva job, Janet." That goes for everybody at the White House. If Barack Obama wants to reassure a nervous public that bureaucratic incompetence won't be tolerated, he might look to the example of what happened to the director of FEMA in the wake of Hurricane Katrina. But no one expects the president to sack Janet Napolitano, the secretary of something the government insists on calling Homeland Security. That's not how an administration that regards words and deeds as equals actually works. The lessons in the latest Islamist attempt to bring down a Western airliner could be useful, but such lessons are too painful for the guvvies to think about.
Wither Sovereignty Executive Order Amended to Immunize INTERPOL In America - Is The ICC Next? Last Thursday, December 17, 2009, The White House released an Executive Order "Amending Executive Order 12425." It grants INTERPOL (International Criminal Police Organization) a new level of full diplomatic immunity afforded to foreign embassies and select other "International Organizations" as set forth in the United States International Organizations Immunities Act of 1945. By removing language from President Reagan's 1983 Executive Order 12425, this international law enforcement body now operates - now operates - on American soil beyond the reach of our own top law enforcement arm, the FBI, and is immune from Freedom Of Information Act (FOIA) requests.
pt 1/4 Destruction of Freedom, Police State | MEP Nigel Farage on KWN Many US Citizens that follow European Politics are deeply concerned the the United States is following Europe into a post democratic age. Nigel Farage is currently a Member of European Parliament/MEP and a founding member of the United Kingdom Independence Party/UKIP. Nigel has become legendary in all EU countries as a voice of the people is Europe. The EU is now appointing people without going through the election process and many feel that even when they do have an election it consists of several politicians from different parties but the same agenda. Nigel has taken on the establishment and with his tremendous leadership he has given others the courage to stand up against an onslaught of injustices against the people. This interview is a glimpse into what Americas future may soon look like if our government continues to follow the EU mold. In this interview the unbelievable clips from his exchange in the EU are heard and snapshots above are taken from the video of this incredible exchange. Nigel also discusses the losses of freedoms in Europe, the police state which is enveloping the people of the European Union, the hijacking of democracy which has taken place in Europe, the injustice of the appointing of European leaders rather than by traditional democratic election, why he has decided to fight for the people, the Lisbon Treaty, cap & trade and much more.
pt 2/4 Destruction of Freedom, Police State | MEP Nigel Farage on KWN
pt 3/4 Destruction of Freedom, Police State | MEP Nigel Farage on KWN
pt 4/4 Destruction of Freedom, Police State | MEP Nigel Farage on KWN
Have Americans Traded Freedom for Security? Obama’s dwindling band of true believers has taken heart that their man has finally delivered on one of his many promises – the closing of the Guantánamo prison. But the prison is not being closed. It is being moved to Illinois, if the Republicans permit. In truth, Obama has handed his supporters another defeat. Closing Guantánamo meant ceasing to hold people in violation of our legal principles of habeas corpus and due process and ceasing to torture them in violation of U.S. and international laws. All Obama would be doing would be moving 100 people, against whom the U.S. government is unable to bring a case, from the prison in Guantánamo to a prison in Thomson, Illinois.
Al Qaeda takes credit for plot to down plane Al Qaeda in the Arabian Peninsula claimed responsibility on Monday for the unsuccessful Christmas Day effort to bring down a jet over Detroit, while the Obama administration rushed to deal with the political fallout from the attack. President Obama issued his first statement on the attack, telling Americans that his government was doing everything in its power to keep them safe. Hours earlier, the homeland security secretary backed away from her Sunday comments that "the system worked."
Napolitano Now Says Airline Security System Failed Homeland Security Secretary Janet Napolitano conceded Monday that the aviation security system failed when a young man on a watchlist with a U.S. visa in his pocket and a powerful explosive hidden on his body was allowed to board a fight from Amsterdam to Detroit. The Obama administration has ordered investigations into the two areas of aviation security -- how travelers are placed on watch lists and how passengers are screened -- as critics questioned how the 23-year-old Nigerian man charged in the airliner attack was allowed to board the Dec. 25 flight.
More Pilot Discretion on Security Measures The heightened security measures faced by air travelers in the United States and worldwide during the weekend were eased somewhat on Monday, the first business day after Friday’s terrorism incident on a jet bound to Detroit from Amsterdam, federal officials said. But airlines still delayed and canceled flights in response to the measures, and blamed the disruptions on the security moves. And Canadian officials, seeking to reduce the backlog at the security checkpoints, have effectively banned carry-on luggage for passengers heading to the United States.
Smart-grid efforts will receive $200B, report says Governments and utilities are expected to spend a cumulative $200 billion on smart-grid technologies from 2008 through 2015, according to a report released Monday by Pike Research. The research firm, based in Boulder, Colo., found that utilities will find the best return on their investment, and predicted they'll invest most of their capital budgets in smart-grid infrastructure projects. "Smart grid" is a term used to describe technological innovations to help conserve energy, such as "smart meters," which allow homeowners to cut down on electricity usage.
Yen to Fall Versus Dollar in '10 as Rates Diverge The yen may weaken to 95 to the dollar by the end of next year as deflation keeps the Bank of Japan from following interest-rate increases by the Federal Reserve, based on the median estimate of 12 Tokyo-based analysts. Eleven of those surveyed by Bloomberg News expect the yen to decline versus the dollar from the end of March to Dec. 31. Futures prices show the U.S. central bank may start raising rates as soon as June, whereas Bank of Japan Governor Masaaki Shirakawa has pledged to keep rates "persistently" near zero to fight deflation.
Brazilian Real Advances on Strength of Several Transactions Brazil's real rose the most among major currencies after a few "large" dollar sales by investors, said Luiz Roberto Monteiro, currency manager of Corretora Souza Barros in Sao Paulo. "We detected a $200 million transaction by a state-owned company and there are more operations like that today," Monteiro said in a telephone interview. He declined to identify the company. Low liquidity due to the Christmas and New Year's holidays is also contributing to the large move in the real, Monteiro said.
Colombia Growth in 2010 May Be Cut by Venezuela Colombian Finance Minister Oscar Ivan Zuluaga said Venezuela's move to freeze trade between the countries will reduce economic growth next year. Exports to Venezuela may fall by about half to $2 billion next year, Zuluaga said today in an interview in Bogota. Exporters are diversifying by sending more goods to Mexico, Peru, Central America and the Caribbean, Zuluaga said. "The government's basic premise is that Venezuela's economic problems will continue and the exports will remain below what they reached in recent years," Zuluaga said. "This is the most realistic outlook."
Venezuelan President Threatens To Nationalize Toyota CARACAS, Venezuela — Venezuelan president Hugo Chávez has threatened to nationalize Toyota Motor's assembly plant and turn it over to a Chinese company. The incendiary statement came as Chávez accused Toyota of failing to produce enough vehicles appropriate for rural areas of the South American country. He made the same threat to Fiat and General Motors, which also operate plants in the country and also said the international automakers are not transferring enough of their corporate new technology to local plants.
China to Cool Property Prices, Resist Yuan Pressure Chinese Premier Wen Jiabao said the government will cool property prices, resist pressure for the yuan to appreciate and keep inflation at "reasonable" levels. "Property prices have risen too quickly in some areas and we should use taxes and loan interest rates to stabilize" them, Wen said yesterday in an online interview with the official Xinhua News Agency. China will "absolutely not yield" to calls for currency gains, he said.
Who Will Blink First? Iran has responded to America's end-of-the-year, engagement-or-else deadline by, among other things, test firing upgraded long-range missiles and temporarily seizing control of an Iraqi oil field. The latter incident, it has been widely reported, is not unusual. Since the Iran-Iraq War ended in 1988, there have been frequent territorial disputes along the border that separates the two nations. But as George Friedman noted at Stratfor on Monday, given the broader context of the current high-stakes showdown between the United States and Iran, the cross-border raid cannot be dismissed as insignificant.
Iran Sanctions are Precursor to War Ron Paul Last week the House overwhelmingly approved a measure to put a new round of sanctions on Iran. If this measure passes the Senate, the United States could no longer do business with anyone who sold refined petroleum products to Iran or helped them develop their ability to refine their own petroleum. The sad thing is that many of my colleagues voted for this measure because they felt it would deflect a military engagement with Iran. I would put the question to them, how would Congress react if another government threatened our critical trading partners in this way? Would we not view it as asking for war?
Iran divide deepens after arrests Iranian authorities on Monday arrested about a dozen reformists, including senior aides to opposition leaders, in a fresh crackdown following mass protests in Tehran and elsewhere at the weekend. At least three allies of Mir-Hossein Moussavi, the opposition leader, who claimed victory in Iran’s disputed presidential election in June, and two aides to Mohammad Khatami, the former president, have been detained. Ibrahim Yazdi, the head of the Freedom Movement of Iran, a religious nationalist party, and several reform-minded clerics in the holy city of Qom, were also held. No official reason was given for the arrests, which seem certain to deepen the antagonism between the government and the reform movement.
Maverick Iraqi politician claims Iran could go nuclear within weeks Iraqi parliamentarian Mithal al-Alusi is warning that Iran is much closer to attaining nuclear capability than most sources, including the International Atomic Energy Agency and the US State Department, believe. In fact, he predicts the Iranians could have a nuclear capability - and may announce that they have it - as soon as next month. "We are receiving information which says Iran is so close to producing an atom bomb," Alusi said in an interview earlier this month, the latest in a series of interviews conducted since September. "All the international community, they don't realize how close [the Iranians] are to the goal... The Iranians will surprise us one day [soon] and say, 'We have it.'"
UAE Splits the Atom Club It is hard to imagine a more politically sensitive new energy project than the Arab world's first nuclear power plants. But by awarding the $20.4 billion contract to a group of South Korean companies, the United Arab Emirates has shrugged off lobbying from Washington and Paris and gone for the cheapest and simplest industrial option. The U.A.E. has sent a message it is open to foreign investors without close political, military or oil-industry ties. And South Korea's victory suggests the nuclear industry is less of an oligopoly than commonly perceived. The consortium led by Korea Electric Power defeated bids led by America's General Electric and by France's Electricité de France and Areva.
Peres hosts Christian leaders, stresses commitment to freedom of religion President Shimon Peres hosted a traditional ceremony at his official Jerusalem residence on Monday to welcome the Christian leadership in Israel. Peres offered his blessings to hundreds of Christian leaders, wishing them a "Happy New Year and a Merry Christmas." The president also stressed Israel's fundamental commitment to freedom of religion, in Jerusalem and the holy sites. "It is Israel's responsibility to make sure every believer can pray to his or her Lord without interruption," he said. "Israel is deeply committed to protecting the holy sites for every religion. We will not tolerate any offense toward any church, mosque or synagogue."
Critical Currents: The European connection The status of Israeli-Palestinian relations depends more on the fate of health reform in the United States than on any other factor - or so conventional wisdom here has it. This approach suits the present Netanyahu government's strategy well: It allows for ongoing diversions in the hope of delaying - and perhaps ultimately obviating - any serious movement on a viable political settlement. But it completely disregards the changing international climate in general and the new currents emanating from Europe in particular. The US without a doubt has played in the past and continues to play a lead role in determining the terms and the pace of progress toward resolution of the conflict. It is not, however, the only player. Increasingly Europe, for many years content to take a back seat to Washington, is becoming a more vocal political (as well as economic and security) actor. This is being done with American foreknowledge, if not actual encouragement.
Israel Concerned About Strengthening Egypt-Iran Axis Iran and Egypt have taken strides to bolster ties in their first round of high-level talks since 1979. On December 20, Egypt's ailing and aged president, Hosni Mubarak, received a rare two-hour, face-to-face visit from Iranian Parliament Speaker Ali Larijani. Larijani had flown to Cairo to represent Tehran at a committee meeting for member states of the Parliamentary Union of the Organization of the Islamic Conference. In addition to the meeting with Mubarak, Larijani also held talks with his counterpart Ahmed Fathi Surur and Egyptian Foreign Minister Ahmed Aboul Gheit. According to the Los Angeles Times, Egyptian sources said that Iranian President Mahmoud Ahmadinejad is trying to bring an end to tensions between his country and Egypt.
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Mon 12.28.2009
Patriot Radio News Hour Guest host: Mark Call
Back From the Brink (but Watch Your Step) UNLESS you’re Tiger Woods, 2009 has probably been a heck of a lot better than 2008. Last year, most Americans felt as if they had been hit in the head by a 4-iron. Wall Street nearly collapsed. The economy plunged into its deepest recession in decades. As housing prices sank, many homeowners realized that they owed more on their mortgages than their homes were worth. Millions lost their jobs, and even those who didn’t hunkered down, burying their wallets in the backyard. This year — with more than a few bumps along the way — the situation brightened. The stock market surged, and the housing and auto markets appeared to have bottomed out. Demand for certain tech toys like smartphones, which allow people to check e-mail, surf the Web and play games, perked up.
Of Christmas, War and Peace “And this shall be a sign unto you: You shall find the infant wrapped in swaddling clothes, and laid in a manger. “And suddenly there was with the Angel a multitude of the heavenly army, praising God, and saying: Glory to God in the highest and on earth, peace to men of good will.” Here the argument begins. Is it biblical to say, “Peace on earth and good will to men,” which is inclusive but inexact? Or does that dilute and distort the meaning of “Peace on earth to men of good will,” which is restrictive? The former, while ecumenical, seems pacifist. Do we wish good will today to al-Qaida? And is not the chorus singing out peace on earth “to men of good will” at the first Christmas a “heavenly army”?
Fragile U.S. Economy Under Increasing Stress from Escalating Afghanistan War Sherwood Ross writes: If Iraq war spending helped plunge the U.S. economy into its worst slump since the Depression, what does President Obama think his escalation of the Afghan war will do it? Besides forcing taxpayers to cough up fresh billions to enable the Pentagon to chase down a few hundred Taliban fighters, the Afghan war is liable to continue to inflate oil prices---and this means more than the ongoing swindle of motorists at the pump. Higher oil prices also slow the global economy, causing our trading partners to buy fewer Made-in-USA goods, thus reducing demand for our products and leading to layoffs. Spending money on war also siphons billions of dollars from truly productive uses.
South Korea to Build Reactors in Middle East The United Arab Emirates said Sunday that it had chosen a South Korean-led consortium for a $20 billion contract to create the first nuclear power reactors in the Middle East. The Korean consortium beat out a General Electric-Hitachi team and a French consortium that included Électricité de France and Areva. The deal, one of the largest in the energy sector this year, comes amid a resurgence of nuclear power projects and had involved prominent lobbying from officials including the presidents Nicolas Sarkozy of France and Lee Myung-bak of South Korea.
The Economic Crisis Ends 2009, the Political Crisis Begins 2010 First Iceland, then Ireland, now Greece. Much of Europe is mired in inescapable debt and bankrupt nations, the result of crashing banks, bank bailouts, and soaring unemployment. The U.S. and U.K. watch from a distance, knowing their turn is next. The European corporate-elite — like their American counterparts — lavished non-stop praise on the “bold yet necessary” decision to bail out the banks; the economy was supposedly saved from “impending collapse.” But every action has an equal but opposite reaction. Bailing out the banks saved the butts of dozens of European bankers, but now millions of workers are about to experience a thundering kick in the ass.
We're Screwed! ShadowStats.com founder John Williams explains the risk of hyperinflation. Worst-case scenario? Rioting in the streets and devolution to a bartering system. Do you believe everything the government tells you? Economist and statistician John Williams sure doesn't. Williams, who has consulted for individuals and Fortune 500 companies, now uncovers the truth behind the U.S. government's economic numbers on his Web site at ShadowStats.com. Williams says, over the last several decades, the feds have been infusing their data with optimistic biases to make the economy seem far rosier than it really is. His site reruns the numbers using the original methodology. What he found was not good.
An Introspective Look at the Future of America As we close out 2009 and look forward into 2010 and beyond, this has been a year of near financial catastrophe and monumental change, none of which benefited America or ordinary Americans. Late in 2008 and throughout 2009, events have happened in the US which would have been labeled unfathomable just a few short years ago, and yet already these monumental changes are expected to be filed into the memory hole and Americans are expected to believe nothing has changed.
Renegade Economist Christmas Special with Max Keiser
Obamacare sparking 10th Amendment rebellion, action in seven states Looks like the steadily growing list of constitutional, ethical and political outrages that constitute the Harry Reid version of Obamacare is sparking a rebellion in the states, as AP reports South Carolina's attorney general plans to investigate the vote-buying that surrounded the proposal in the Senate majority leader's office. According to AP, South Carolina's Henry McMaster is being joined by the attorneys general of Michigan and Washington state in a suit to determine the constitutionality of the Obamacare proposal. Their initiative was prompted by a request from South Carolina's two senators, Lindsay Graham and Jim DeMint, both Republicans.
“The Last Time That Happened Was During the Great Depression” Until a few years ago, running a U.S. city was pretty easy. You added services when voters asked, you hired more workers (who were likely to vote for you come election time) to provide the services, and you promised lavish retirement benefits to cops and teachers who weren’t going to retire until long after you left office. If tax revenues didn’t cover day-to-day operations, no problem; Washington was sending plenty of aid to make up the difference. No longer. The gap between what a typical city gets from sales and property taxes and what it owes its employees is a now a chasm that even trillions in federal stimulus money can’t fill. So for the first time in most Americans’ memory, cities actually have to live within their means. The result, according to today’s Wall Street Journal, isn’t pretty.
NIB to stop handling cash One of the country's larger banks has told to its customers that it is to stop handling cash in its branches. National Irish Bank says it is moving to a Scandinavian model of "cashless banking" - with an increased reliance on ATMs and debit cards. NIB has told customers that its branches will no longer handle cash withdrawals or lodgements, nightsafe lodgements or foreign exchange cash. They are instead urging customers to use ATMs or get cash back on their laser cards if they need notes. Branches will continue to accept cheques and postal orders.
Gold inches higher in light trade TOKYO, Dec 28 (Reuters) - Gold inched higher on Monday in light trading as many investors stayed to the sidelines after U.S. and European markets were closed late last week for Christmas.
Gold ends above $1,100 as greenback weakens Gold futures on the COMEX Division of the New York Mercantile Exchange returned above 1,100 dollars on Thursday on weak dollar. Silver and platinum both rallied. The most active gold contract for February delivery gained 10.80 U.S. dollars, or 1 percent, to finish at 1,104.80 dollars an ounce. Dollar failed to climb higher despite economic data provided some early-morning support and slowed earlier losses. The U.S. durable goods orders showed healthy growth in business capital expenditures for the month of November, while initial jobless claims data showed that fresh unemployment insurance claims fell to their lowest levels in 15 months.
Gold Recovers as USD Rally Slows Gold prices recovered the past two days as the rally in the USD halted after the release of a disappointing New Home Sales report yesterday. With the greenback under pressure and extremely low levels for Gold, investors have take advantage of the low prices to return investing in Gold. Gold for immediate delivery gained $17.05, or 1.6% to $1,104.60 today.
A PRACTICAL GUIDE TO “GOLD CLAUSES” As most of my readers know, I have long advocated the use of alternative currencies, consisting of silver and gold, in order to return America to constitutional and sound money. There are three means by which such alternative currencies could be introduced into the economy: (i) through an act of Congress; (ii) by State legislation, one State at a time; and (iii) by the private action of individuals. At the present time, option (i) is likely impossible; and option (ii) will require a fair amount of political organizing and “grass-roots” lobbying in suitable “target” States before the first such statute can be enacted. For the time being, then, that leaves option (iii) as the only way to move ahead immediately. Of course, purely private action alone cannot reform even one State’s monetary system.
Peter Schiff on Goldseekradio.com
Gold and Silver Forecast Update What a month for gold and silver as they peaked and crashed by over 10% this month. But instead of being disappointed, I think this is the perfect fodder and stage for the next super fast bull rally. In fact the next move will be among the powerful and sustainable rallies in 7 year bull run of Gold as it will suck in even the most conservative of funds as Gold takes out levels like $1200, $1300 as if they were fig leaves.
Gold The Greatest Currency Trade of the Millennium Even though gold has been in a correction during these last few months, it is important to step back and see how it has out-performed every other currency since this decade, century, and millennium began. I first recommended gold and gold stocks back in February 2002 because the trend I saw of currencies cheapening themselves against their trading partners. You can call this "competitive devaluation." This had not been seen since the Great Depression, and to me, even back then, was a signal that the world economy was heading into tough times. Since about 2001, whenever any currency rises too much, the local manufacturers or farmers – or anyone who lives by exporting – start to scream about it. Their local governments respond by doing all they can to lower the value of that currency, having it fall in value and thus making exports cheaper, all this in the hope that the domestic economy will become better.
Sparkling period for gold is driven by global fears House prices, shares and cash savings have struggled with recession and low interest rates this year, but one asset has enjoyed a golden period. Earlier this month the price of gold hit an all-time high of $1,226.56 (£766) an ounce, up 41% this year and more than four times higher than a decade ago - a sparkling return against most other lacklustre investments.
Gold untraded Dec 25 but platinum and silver inch up With some eastern markets open on Dec 25, silver and platinum prices edged up in light trading, but gold was untraded that day. Gold was untraded on Friday with many players away for the Christmas holidays, while silver and platinum prices inched up. Spot gold was untraded at 0040 GMT. The New York notional close was $1,104.45 per ounce. Spot gold fell to a 7-week low of $1,074.10 an ounce on Tuesday. It has since recovered by about 3 percent. Platinum and palladium prices surged on Thursday after a British firm moved a step closer to launching the first U.S. exchange-traded funds on the precious metals used for cleaning auto emissions.
ETFs, physical investments drive gold market Six geese a laying. Five, Gooollden Riiinnngs." Every year, PNC bank calculates the cost of buying the 12 Days of Christmas. This year's cost: $87,403. Unsurprisingly, labor is the biggest component of that, what with all the pipers piping, lords a-leaping, ladies dancing and maids a-milking. Obscure livestock is also pricey (who knew swans a-swimming cost $750 a pop?). But the only commodity component of that $87,403 - the golden rings - is responsible for the biggest percentage gain in the Christmas index, with PNC estimating manufactured gold to have risen 43 percent since this time last year.
Beijingers in gold rush at year end Gold jewelry sales jumped more than 30 percent over the weekend in Beijing, as bargain shoppers swarmed the city's major jewelry stores on year-end promotions. In a collective sales campaign after international gold prices fell, stores including Caibai, Gongmei and China Gold reduced the pure gold's price by as much as 9 yuan per gram, with more Christmas-themed jewelry designs for shoppers to choose from.
Gold brings a smile to the world's central bankers here is little to beat the lure of gold, as many recipients of a lavish Christmas gift will confirm, but it is not only seasonal impetus that has put a new shine on the precious metal — for the first time in 21 years the world’s central banks have been net buyers. World Gold Council (WGC) data reveals that amid growing concern over the weakness of the dollar, about $28 billion of bullion was bought by central banks this year, based on an average price of $978 an ounce. The biggest buyers have been the emerging economies of China, Russia and India, but smaller countries such as the Philippines, Kazakhstan, Sri Lanka and Mexico have also been shifting their reserves into gold.
Central banks keen to stock up on gold The European Central Bank (ECB) decision to downsize its annual gold sale in 2009 to 155 tonnes is expected to further boost yellow metal prices in 2010. The ECB has sold 400- 500 tonnes annually the last 10 years. Of late, there is a tendency among central banks of many countries to hold a major portion of their reserves in gold. The emergence of new net buyers is expected to add strength to the bullish trend in the metal. China had acquired 450 tonnes, India 200 tonnes and Russia 120 tonnes from the International Monetary Fund this year.
Gold, dollar and euro: A love triangle into 2010 This post is a guest contribution by Dian Chu*, market analyst, trader and author of the Economic Forecasts and Opinions blog. Gold hit a 7-week low on Dec. 22 from recent optimistic data of the U.S. economy. For example, U.S. existing housing sales jumped more than expected, and GDP grew at a 2.2% rate in the third quarter, the fastest pace in two years, amid a larger-than-expected downward revision. The upbeat news lifted the dollar and pushed yellow metal prices to below the $1,100 benchmark.
2009 witnessed change in sentiment towards gold Gold: Prices continued to stay under pressure last week because of a firming dollar. The market dropped below the psychological $1,100 an ounce even as less-committed investor exited. However, speculative longs are still holding considerably large positions on the bourses. While investor interest remains the key to the gold market, in the short-term, currency will play a crucial role. A firming dollar is sure to pressure prices down.
Bullion & Business Weekend Report - Dec. 26 Gold and silver prices moved narrowly in both New York and London during the holiday-shortened week. Platinum, however, soared following news that the SEC approved a proposed rule change to list and trade ETF Securities Platinum and Palladium Trusts. In other markets, crude oil pushed above $78 a barrel for the first time in three weeks while US stocks ended at new 2009 highs. Major European indexes enjoyed weekly gains as well.
Silver Showing Positive Bullish Developments Last week's update was too bearish - especially as there have been a number of positive developments this week not only in both silver and gold but also with respect to major elements having an important bearing on Precious Metal prices. In the Gold Market update we have seen how gold appears to have bottomed and to now be in position to advance again. The action in silver last week was similar, as we can see on its 6-month chart, with it recovering late in the week following an exact contact with the lower boundary of a channel that began to form last September. At the time of this contact a V bottom formed, as with gold, a sign that it had hit a low. Following this positive action and the improvement late in the week it is now in position to advance back towards the top of this channel, a move which would result in appreciable gains from the current level. Various indicators such as the MACD are oversold, providing the leeway for such an advance.
Does dollar’s rally impact the bull market for gold It as become clear that the media and many institutional analysts are going to keep talking the Dollar up despite the lack of fundamental reasons, writes Julian Phillips of the Gold Forecaster. We feel that you will benefit most from a look at what lies ahead for the Dollar and its fundamentals and what could take it higher, if it does rise.
Welcome to the gold party craze: A new day pawning Sometimes when Amber Watson-Tardiff comes across a single cuff-link or a massive tangle of chains in her jewelry box, it occurs to her that it might be time for a gold party. Like many people who are looking for an extra way to make some cash, Watson-Tardiff is skipping the pawn shop and opting instead to sip champagne cocktails with her friends while an appraiser announces just how much her unwanted bling will bring her in unexpected riches. With the price of gold hovering around $1,100 an ounce, the take can be pretty lucrative.
2010 likely to be more testing for hedge funds Hedge funds making big bets on currencies, commodities and equities are favoured by fund selectors in what is likely to be a more testing 2010 after a bumper year for hedge fund returns, it is claimed. While 2009 was characterised by buying riskier assets rebounding from last year's depressed prices, managers believe that 2010 will not see such large price rises. Many fund managers think countries will emerge from the global downturn at different speeds. The UK, for example, was still in recession in the third quarter while some trading partners had begun growing in the second quarter meaning loose monetary policies may be tightened at different times.
Do we need a new reserve currency? A new global currency should replace the US dollar as the international reserve currency, as the long-term deterioration of America's economy and the greenback is fuelling a "currency-regime crisis", says Martin Wolf, associate editor and chief economics commentator of the Financial Times. Wolf, who has honorary doctorates from three universities, bases his argument in part on the Triffin dilemma, an economic paradox named after economist Robert Triffin. The paradox shows that the US dollar's role as a global reserve currency leads to a conflict between US national monetary policy and global monetary policy. It also points to fundamental imbalances in the balance of payments, particularly in the US current account.
Gulf nations may opt first for dollar in currency union Four Gulf nations entering the Middle East's first monetary union pact are expected to peg their single currency to the US dollar in the first phase of the historic project but might opt for a basket later, according to analysts. Saudi Arabia, Kuwait, Qatar and Bahrain, members of the six-nation Gulf Co-operation Council (GCC), have kept the world guessing on what type of currency they would adopt for their monetary union, which was ratified by their heads of state at their annual summit in Kuwait in mid-December.
What Will the New World Reserve Currency Regime Be? The deterioration of the dollar reserve currency regime is obvious. As we have forecast, the world will look to some variation of the IMF's Special Drawing Rights as an eventual replacement for the US dollar. Therefore, the recomposition of the SDR next year will become a lightning rod for the global stresses created by an increasingly unstable and impractical system of global trade.
Concerns grow over sovereign debt risk Sovereign debt risk is emerging as an important concern for senior bankers, risk consultants and auditors following financial woes in Dubai and Greece. After two years of worrying about mortgage and corporate risk, attention is now shifting to managing the risk of country defaults and bankruptcies of heavily indebted regional governments and city administrations, say bankers. Bankers at some large institutions are discussing whether they need to make provisions for sovereign risks in the same way they now set aside reserves to cover losses from corporate or emerging market risks.
Wen dismisses currency pressure Wen Jiabao, China’s premier, has said Beijing would not give in to foreign demands for its currency to strengthen, taking an increasingly defiant tone amid mounting international pressure. In an interview published by the Xinhua news agency on Sunday, Mr Wen said some of the demands for China to let its currency appreciate were an effort to contain the country’s development. “We will not yield to any pressure of any form forcing us to appreciate. As I have told my foreign friends, on one hand, you are asking for the renminbi to appreciate, and on the other hand, you are taking all kinds of protectionist measures,” he said.
A Way to Share in a Nation’s Growth It's Time For Governments To Issue Stock Instead Of Just Borrowing CORPORATIONS raise money by issuing both debt and equity, the latter giving investors an implicit share in future profits. Governments should do something like this, too, and not just rely on debt. Borrowing a concept from corporate finance, governments could sell a new type of security that commits them to paying shares in national “profit,” as measured by gross domestic product.
US treasury bonds a Ponzi scheme waiting to crash It is really no secret that US treasuries have become the biggest Ponzi scheme in global financial history. In a Ponzi scheme new buyers’ money is used to pay out redemptions until the new buyers dry up and the whole thing crashes. For US treasuries the buyers are now waning. The most recent evidence points to the Fed as the main buyer of these bonds last year, with the Chinese second in line and then the banks.
Treasury Yield Curve Steepens to Record on Debt Demand Concern Treasuries fell, with the difference in yields between 2- and 10-year notes widening to a record amount, as investors bet the U.S. recovery will fuel inflation and reduce demand at the government’s debt auctions. The 10-year note’s yield climbed to the highest level in four months as reports showed increases in sales of existing homes and orders for durable goods. The U.S. will sell a record- tying $118 billion of 2-, 5- and 7-year notes next week.
What Iceberg? Just Glide to the Next Boardroom YOU might think that board members overseeing businesses that cratered in the credit crisis would be disqualified from serving as directors at other public companies. You would, however, be wrong. Directors who were supposedly minding the store as disaster struck at companies like Countrywide Financial, Washington Mutual or Fannie Mae have not all been banished from other boardrooms. In many cases, directors just seem to skate away from company woes that occurred on their watch.
The Yield Curve Is Signaling Bigger Growth What’s a yield curve, and why is it so important? Well, the curve itself measures Treasury interest rates, by maturity, from 91-day T-bills all the way out to 30-year bonds. It’s the difference between the long rates and the short rates that tells a key story about the future of the economy. When the curve is wide and upward sloping, as it is today, it tells us that the economic future is good. When the curve is upside down, or inverted, with short rates above long rates, it tells us that something is amiss — such as a credit crunch and a recession.
U.S. rate hikes in 2010? Plausible, but not a given Wall Street's raging bulls may be getting ahead of themselves. From the first inklings of U.S. economic growth after the deepest recession since the 1930s, some investors have extrapolated a robust expansion that will force the U.S. Federal Reserve to raise interest rates in the second half of next year. Their reasoning, based on the notion that companies overreacted to last year's epic financial meltdown by cutting staff and production too sharply, has some merit.
Senate OKs rise in debt limit to $12.4 trillion The Senate voted Thursday to raise the ceiling on the government debt to $12.4 trillion, a massive increase over the current limit and a political problem that President Obama has promised to address next year.
Schumer Urges Wall Street Banks to ‘Get That Money Out There’ New York Senator Charles Schumer warned Wall Street firms to “live up to your responsibilities” and increase lending, particularly to small businesses, while showing restraint on executives’ bonuses. “Get that money out there,” Schumer said in an interview Dec. 23 on Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend. Banks should make sure the bonuses aren’t “excessive” and are based on merit, Schumer said. The position of firms such as Goldman Sachs Group Inc. that they didn’t need the government’s help to survive “is just false,” he said.
Here's The Secret Reason We Eliminated The Bailout Caps On Fannie And Freddie On Christmas Eve, when the news was assured of getting no coverage whatsoever, The White House announced that it had eliminated the maximum bailout cap for Fannie Mae (FNM) and Freddie (FRE). As some observers have pointed out, all the move really did was formalize what everyone has figured for decades, that the two zombie GSEs were truly organs of the federal government, and that their debts would be backed up ad infinitum. So, why the move, and why then?
U.S. Move to Cover Fannie, Freddie Losses Stirs Controversy The Obama administration's decision to cover an unlimited amount of losses at the mortgage-finance giants Fannie Mae and Freddie Mac over the next three years stirred controversy over the holiday. The Treasury announced Thursday it was removing the caps that limited the amount of available capital to the companies to $200 billion each. Unlimited access to bailout funds through 2012 was "necessary for preserving the continued strength and stability of the mortgage market," the Treasury said. Fannie and Freddie purchase or guarantee most U.S. home mortgages and have run up huge losses stemming from the worst wave of defaults since the 1930s.
Commercial Real Estate Holders Decide to Walk Away: The Continuing Double Standard from the Banking Industry. Debt Ceiling Raised to $12.4 Trillion Making Room for more Bailouts. There will be many new financial stories in 2010 but one that is certainly to garner much attention is the implosion of the commercial real estate market. A $3.5 trillion market that has taken it on the chin alongside the residential real estate market. The commercial real estate debacle usually follows a similar pattern. Residential real estate pulls back followed by commercial real estate. But in this massive decade long real estate bubble commercial real estate debt ballooned into uncharted territory. The bust is going to be deep and has no parallel in history just like the housing bubble bursting. Yet the U.S. Treasury and Federal Reserve have already had backroom talks about coming out with a “Plan C” to bailout this segment of the American economy.
Bailed Out Freddie Mac Says Mortgages Will Be More Expensive Showing once again that the path to living in a greener and more energy efficient world is fraught with difficult choices and unexpected consequences, the New York Times tells the story of rare-earth mining in China. Many green technologies rely on one or more of the seventeen rare-earth elements that come almost entirely from China. The mines are dangerous and wreak environmental havoc on the surrounding area, even as they yield “miracle ingredients” without which some green products couldn’t exist. What’s worse, the Chinese mining industry is controlled by gangs, the paper reports. However, it was a Chinese government ministry that threatened this year to stop all export of raw materials and require Western countries to buy finished products. That plan was quickly shouted down, but by no means are the issues around rare-earth mining resolved. One executive whose company buys rare-earths said about the mining practices, “we can’t [save the world] and leave a product that is glowing in the dark somewhere else, killing people.”
Homeownership in U.S. May Decrease, New York Fed Study Finds The rate of home ownership in the U.S. may fall in coming years as households rebuild equity wiped out by the worst slump since the Great Depression, according to a study by economists at the Federal Reserve Bank of New York. “The official home ownership rate will likely experience significant downward pressure in the coming years,” Andrew Haughwout, Richard Peach and Joseph Tracy wrote in a paper posted on the bank’s Web site. Owners whose mortgages are larger than the properties are worth “very likely will convert officially to renters,” assuming prices don’t climb in the next several years, they said.
Retailers Shift Focus to Post-Holiday Deals to Lure Buyers Post-Christmas Discounts With Sales Forecast to Decline 1% U.S. retailers extended discounts on computers, toys and clothes beyond Christmas to lure consumers who held out for lower prices and have gift cards to redeem. Toys “R” Us Inc. shoppers who buy a Nintendo Wii video game can buy a second game for half price. Target Corp. offered a set of six wine glasses for $8.98, down from $17.99 and reduced the price of a cotton-blend argyle women’s sweater to $17.50 from $25.
Gift Cards Are Retailers' Last Chance for a Happy Holiday The books are closed on the holiday shopping season, and researchers from ComScore to the National Retail Federation are adding up the final numbers, which will probably start to trickle out this week. Based on the figures through last weekend, sales in bricks-and-mortar stores might be up 1% from last year -- or down 1%. E-commerce sales, on the other hand, appear to have been higher by as much as 4%. But the online numbers may not be much comfort to the big store chains because cyber sales account for only a small fraction of their total revenue.
Frequently Asked Questions about ObamaCare Moon bats who voted for Barack Obama are obviously delighted that the U.S. Senate passed ObamaCare on the morn of Christmas Eve. However, many are confused and do not realize that the House and Senate must reconcile any differences before a final bill can be sent to the president. Others are not misinformed as to the effective dates and coverage terms. The following list of Frequently Asked Questions (FAQs) is provided as a public service to help the DNC provide answers to anxious voters…
Pelosi Asked Where Constitution Grants Congress Authority to Mandate Purchase of Health Insurance
House backers of public insurance option may yield Some House supporters of public health insurance plan seem resigned to giving it up in talks Two House Democrats who favor a government insurance plan, a central element of health care legislation passed in their chamber, acknowledged Sunday it might have to be sacrificed as negotiators work out a final agreement with the Senate. Rep. James Clyburn of South Carolina, the No. 3 Democrat in the House and one who had appealed to President Barack Obama not to yield on the public plan, set out conditions for yielding himself. Asked during rounds on the Sunday news shows whether he could vote for a final bill that does not embrace a public plan, Clyburn said: "Yes, sir, I can."
It's Not Socialism. It's Communism. If you felt a frisson of fear on news that the Senate had passed Obamacare the day before Christmas, then you now know what it was and is like to live in a dictatorship. The voice of the People was ignored in a demonstration of raw political power. There was a time when Americans took Communism seriously. It challenged us in the form of the Soviet Union and we witnessed its takeover of China. In Europe, uprisings against Soviet rule were crushed in East Germany in 1953, Hungary in 1956, Czechoslovakia in 1968, and Poland in the 1980s gave proof that only oppression can sustain this failed economic and political system. President Reagan gave voice to it when he called the Soviet Union an “evil empire.”
Everyone's Defaulting, Why Don't You? Strategic defaults—the phenomenon of people who could continue to make payments on the mortgages on their homes deciding to walk away from their obligations—are rising. According to the Wall Street Journal, strategic defaults are likely to exceed 1 million in 2009. This is making some worry about the very future of capitalism. Georgetown University business ethics professor George Brenkert told the Journal that borrowers who can afford to stay current are morally required to do so, and that were Americans to conclude they could just walk away from obligations, it would be disastrous. Mortgage Bankers Association CEO John Courson wondered about "the message they will send to their family and their kids and their friends?" Blogger Megan McArdle expressed disdain for people who chose to indulge themselves on consumer goods and services while not keeping current with their mortgages.
Obama urges review of terror watch-list President Barack Obama on Sunday ordered an urgent review of how US authorities use terrorist watch-lists to foil attacks on US targets after a Nigerian tried to destroy a transatlantic passenger aircraft with an explosive device he smuggled on board. Umar Farouk Abdulmutallab, 23, undergoing treatment for burns sustained in Friday’s abortive attempt on a flight from Amsterdam to Detroit, figured on a US database of people with suspected terrorist connections but had not been added to a 4,000-name no-fly list. He has been charged with trying to blow up the airliner as it was coming in to land.
Spy chiefs struggle to counter threat The revelation that a 23-year-old Nigerian accused of trying to blow up an aircraft in the US was placed on a watchlist and yet still was able to board a flight to the US is a stark reminder of the challenge facing intelligence agencies in combating terrorism. In recent years, intelligence chiefs in the US and Britain had appeared increasingly confident they had a better grip on the Islamist terrorist threat – and a far better oversight than they did a decade ago of potential jihadist attackers. Yet the case of Umar Farouk Abdulmutallab is a reminder of how easily potential terrorists can still slip under the radar.
Northwest Bomb Plot Planned by al Qaeda in Yemen Officials Say Bomb Materials Sewn Into Suspect's Underwear by Top Terror Bomb Maker The plot to blow up an American passenger jet over Detroit was organized and launched by al Qaeda leaders in Yemen who apparently sewed bomb materials into the suspect's underwear before sending him on his mission, federal authorities tell ABC News. Investigators say the suspect had more than 80 grams of PETN, a compound related to nitro-glycerin used by the military. The so-called shoe bomber, Richard Reid, had only about 50 grams kin his failed attempt in 2001 to blow up a U.S.-bound jet. Yesterday's bomb failed because the detonator may have been too small or was not in "proper contact" with the explosive material, investigators told ABC News.
Wealthy, quiet, unassuming: the Christmas Day bomb suspect The inside story of the privileged student who embraced al-Qa'ida and tried to blow a transatlantic jet out of the sky - and the lessons for us all With his wealth, privilege and education at one of Britain's leading universities, Abdul Farouk Abdulmutallab had the world at his feet – able to choose from a range of futures in which to make his mark on the world. Instead, the son of one of Nigeria's most important figures opted to make his impact in a very different way – by detonating 80g of explosives sewn into his underpants, and trying to destroy a passenger jet as it came in to land at Detroit Airport on Christmas Day.
25 Brits in jet bomb plots COPS fear that 25 British-born Muslims are plotting to bomb Western airliners. The fanatics, in five groups, are now training at secret terror camps in Yemen. It was there London-educated Umar Abdulmutallab, 23, prepared for his Christmas Day bid to blow up a US jet. The British extremists in Yemen are in their early 20s and from Bradford, Luton and Leytonstone, East London. They are due to return to the UK early in 2010 and will then await internet instructions from al-Qaeda on when to strike. A Scotland Yard source said: "The great fear is Abdulmutallab is the first of many ready to attack planes and kill tens of thousands.
BREAKING NEWS! Iran WAR LOOMING!
Iraqi and Iranian forces stand off in oil well row Iraqi and Iranian forces are dug in on either side of a disputed inactive oil well in the sensitive border area, with Iraqis vowing to fight if necessary to fend off another occupation of the well by Iranian soldiers. Iraqi troops say they will defend the well, where Iranian troops raised a flag for several days this month. It is unclear how many troops are involved in the stand-off, but as many as 30 lightly armed Iraqi troops usually occupy border outposts in sensitive areas, and up to 10 in other areas. Some 11 Iranian soldiers are stationed near the disputed well.
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Fri 12.25.2009
Merry Christmas 2009!
Straight No Chaser - Carol of the Bells
All I Want For Christmas Is You - Mariah Carey
White Christmas by Bing Crosby
Christmas Light Show - Amazing Grace Techno
Leann Rimes - Amazing Grace
Donkeys escape from live nativity scene in Colo. A living nativity scene in near the Colorado ski resort of Vail almost had to go without two crucial actors when two donkeys escaped. The nativity scene is an annual tradition for Eagle River Presbyterian Church in the Vail Valley. Pastor Rob Wilson says two borrowed donkeys were being held in a fenced-in pen for the event Wednesday night, but the animals pushed their way through it. A church member who stopped by the church Wednesday morning noticed the donkeys were gone. He and a sheriff's deputy followed footprints in the snow and eventually caught up with them.
Storm turns holiday travel dangerous in Midwest A blustery storm spread snow and ice across the heartland Thursday as Americans rushed to get home for the holidays, grounding flights, stranding drivers on white-knuckle highways and forcing churches to cancel Christmas Eve services. "I don't think God wants anyone to get killed or break a hip or break a knee or something," said the Rev. Joseph Mirowski of the Greek Orthodox Church of the Transfiguration in Mason City, Iowa, which was expecting up to a foot of snow and sleet.
Retailers Slug Out Season With More Discounts, Hours U.S. retailers used extra promotions and extended hours to draw procrastinators and shoppers delayed by the East Coast snowstorm in the final stretch before Christmas. Target Corp. extended its hours to midnight Dec. 21 through yesterday. Borders Group Inc., Wal-Mart Stores Inc. and Toys “R” Us Inc. also kept stores open longer. Best Buy Co. offered some DVDs for half off and Jos. A. Bank Clothiers Inc., a men’s clothing chain, deepened discounts to at least 50 percent.
Shrinking Credit Threatens Almost $9 Billion in [Christmas] Sales Target Corp. and U.S. retailers may lose almost $9 billion in holiday sales as banks rein in lending to cash-strapped consumers before a new credit-card law takes effect. Sales in November and December may fall 1.2 percent to $436.7 billion from the same period in 2008, said Britt Beemer, chairman of consumer polling firm America’s Research Group. If lenders weren’t cutting customer spending limits and rejecting more credit-card applicants, sales would gain about 0.8 percent to $445.5 billion, he said in a Dec. 21 interview.
LAPD to hand out 10,000 pairs of shoes The counterfeits were confiscated by police. They will go to missions and homeless shelters for distribution starting Monday. In the season of giving, authorities have come up with a way to help the homeless through items they have confiscated: Hand out about 10,000 pairs of counterfeit athletic shoes. The shoes, which include knockoff Nike and Adidas sneakers minus the labels, were seized for trademark infringement by the Los Angeles Police Department's anti-piracy unit.
No holiday joy for beauty salons Hairstylists and manicurists are starved for business as customers forgo traditional pampering and do it themselves. During the holidays, Katie McCranie usually treats herself to a trip to the nail salon and an appointment with her hairstylist. This Christmas season, with a tight budget and a temporary job, the 28-year-old from Santa Monica said she can't afford to splurge on those little luxuries. "I do everything myself -- I've been doing my own hair, painting my own toenails," she said. Instead of getting a leg wax, "I just went back to the razor." For many women, primping and pampering are as important to the holidays as buying gifts and decorating the Christmas tree. But with continued economic uncertainty, penny-pinching is taking the place of personal beautification this holiday season.
Financial Markets and Economic Forecasts 2010, Recovery or More Crisis?Experts offer differing views, with some predicting 2010 to be a difficult year and others saying it will see recovery continuing THE world escaped from a financial meltdown and a new Great Depression more easily than many dared hope in 2009. Asia in particular bounced back faster than expected, thanks largely to huge fiscal and monetary stimulus in China. The situation in the world's most advanced economies was also stabilised by massive government spending, financed largely by central banks printing money. Will 2010 be a year of further recovery, fuelled by reviving private demand, or will it be the 'year of reckoning' when double-dip recession and deflation appear, and when debts shifted from the private to the public purse have to be paid? The Business Times assembled a panel of eminent and seasoned experts to review economic and investment prospects.
Is war the answer to a depression?
Don't be surprised if gold trades at $1500 in 2010' Looking ahead to 2010, a number of factors will influence gold prices to go bullish and push it to $1500 per ounce according to Jeffrey Nichols, Senior Economic Advisor to Rosland Capital "Gold has enjoyed a long and enviable climb, rising some 380 percent from a cyclical low near $255 an ounce in April 2001 to an all-time high just over $1,225 early this month. Looking ahead to 2010, don't be surprised to see gold trade at $1,500 or higher sometime during the New Year. And that's not all: I've been telling clients that the yellow metal's price will continue its long-term upswing for at least a few more years, very likely reaching $2,000 an ounce and possibly higher.
Nichols still bullish on gold - $1500 in 2010 and $2000-$3000 longer term Gold has enjoyed a long and enviable climb, rising some 380 percent from a cyclical low near $255 an ounce in April 2001 to an all-time high just over $1,225 early this month. Nevertheless, the bull market in gold has a long way to go - both in magnitude and direction. Looking ahead to 2010, don't be surprised to see gold trade at $1,500 or higher sometime during the New Year. And that's not all: I've been telling clients that the yellow metal's price will continue its long-term upswing for at least a few more years, very likely reaching $2,000 an ounce . . . and possibly hitting $3,000 or more before the gold price cycle begins its next long-term cyclical "bear" phase.
Gold Finishes Above $1,100 As Dollar Slides Gold finished higher in an abbreviated session Thursday as the dollar continued a pullback versus the euro. The metal rose for a second straight session after hitting a seven-week high earlier in the week. December gold finished at $1,104.10 an ounce, up $10.80 on the session. Prices hit as high as $1,105.30 and as low as $1,092.00. Floor trading is closed tomorrow for Christmas. For the week, gold lost $5.30 an ounce. The metal had hit as low as $1,075 on Wednesday.
Gold Prices Fight Back After Losing Ground Gold is seeing more strength Thursday on the back of a weaker U.S. dollar. The precious metal started reclaiming lost ground Wednesday after a multi-day losing streak. Prices settled Wednesday at $1,094 an ounce. Mixed economic data supported signs of an economic recovery, prompting an uptick in equities and commodities and a slight decline in safe haven assets like the dollar. The U.S. dollar index was slipping .25% to $77.73 while gold was rising $7.10 to $1,101.10 an ounce at the Comex division of the New York Mercantile Exchange.
Gold Rises Most in a Week as Dollar Drop Spurs Demand for Metal Gold rose the most in a week as a drop in the dollar spurred demand for precious metals as alternative assets. Silver, platinum and palladium also gained. The dollar fell to the lowest level this week against a basket of six major currencies, losing as much as 0.5 percent. Bullion, which some traders buy as a hedge against inflation, typically rises when the dollar falls. The metal has gained 25 percent this year, touching a record $1,227.50 an ounce earlier this month, as the dollar slipped more than 4 percent.
Gold rises 1.5 percent as US dollar falters Dollar dips, easing from three-month highs Gold prices rallied more than 1.5 percent on Thursday to above $1 100 (R8 239) an ounce as the dollar lost ground and on the back of robust investment flows betting on higher bullion prices. Other precious metals took their cue from gold's strength with both palladium and platinum rallying to their highest in about a week at $375 an ounce and $1 4560.50 an ounce respectively.
Selling gold is popular in a struggling economy Nouriel Roubini Selling gold has become much more popular within today’s struggling economy. It is not unusual for the price of gold to rise when the economy is not doing very well. Over the past two years, gold prices have increased nearly 70 percent. Gold is part of the greenest industry that we have and has always been recycled. When it is taken out of the ground, it is never returned, being used over and over again.
Gold Bubble: Jim Rogers lambasts Nouriel Roubini The differences of opinion on gold forecast by Jim Rogers and Nouriel Roubini are turning sharp and deep. Global commodities investor Rogers has once again lambasted Roubini for predicting that gold price is on a bubble that will burst soon. “I am flabbergasted at Roubini’s comment about bubbles because there is not a single market in the world making all-time highs except gold, US Government Bonds, Cocoa, and the Sri Lankan stock market. That’s hardly reason to call for a bubble. So, I am most perplexed about this alleged bubble which is out there,” Rogers, who is now settled in Singapore and an aggressive investor in Chinese agri commodities market, told Wall Street Cheat Sheet.
The gold bubble and gold bugs Gold is afire. The performance of the dollar and excess global liquidity are key to understanding this Gold prices have been rising sharply, breaching the $1,000 barrier and in recent weeks rising towards $1,200 an ounce and above. Today’s “gold bugs” argue that the price could top $2,000. But the recent price surge looks suspiciously like a bubble, with the increase only partly justified by economic fundamentals.Gold prices rise sharply only in two situations: When inflation is high and rising, gold becomes a hedge against inflation; and when there is a risk of a near-depression and investors fear for the security of their bank deposits, gold becomes a safe haven.
US Mint Sales: Gold and Eagles Rise; Fractionals Sell Out If last week’s US Mint coin sales report could be considered lackluster, the most recent figures for this week do nothing but continue that trend. Fortunately, a few entries did show some movement, even if that movement could not be called extraordinary. Gold coins appear to have led the pack with decent demand. Most likely this is due to the $50 price reduction on gold issues that stemmed from the lower gold prices. Sales of the American Buffalo Proofs jumped 524 units over last week to 922, bringing the total number sold to 41,553. Also possibly playing into the increased sales is the fact that the bullion versions of the Buffalos reached a sold-out state from the Mint on December 4th of this year, making the proofs the only Buffalos still available.
Passport Capital's gold experiment Burbank sees contracts broken, prepares to buy physical gold The bars, which were light enough to carry in a backpack, marked the culmination of a $95,000 experiment by Passport Capital, a San Francisco-based hedge fund where Moran is director of business operations and strategy. Passport, headed by John Burbank, wanted to find out how easy it would be to buy physical gold, rather than futures contracts or gold exchange-traded funds. The firm was also interested in testing conspiracy theories about the availability of the precious metal.
Russian Central Bank $1 billion gold purchase confirmed The report on Mineweb of 10 days ago that the Russian Central Bank was buying 30 tonnes of gold, worth around $1 billion at current gold prices, for its reserves (see Russian Central Bank to buy 30 tonnes of gold from Gokhran) has now been confirmed as having taken place by an official from Russia's Finance Ministry. This effective transfer of gold from one government entity to another is yet another example of how countries can handle gold holdings so that they do not necessarily show up in official Central Bank figures. Whether, in this case, this is intentional government fudging of the figures to mislead the markets is uncertain - the amounts are perhaps too small - but it will be remembered that China effectively did the same thing earlier in the year when it announced that it had transferred some 454 tonnes of gold over the past few years, which it already held in one government account, to its Central Bank, the news of which gave a strong stimulus to the gold price at the time.
Weaker dollar drives gold higher for 2nd day Gold prices have inched higher for a second day in a row, boosted by a weaker dollar. Gold for February delivery is settling up $10.80 at $1,104.80 an ounce in quiet, holiday-shortened trading on the New York Mercantile Exchange. The modest gain comes as the dollar dipped against other currencies. Gold, which is considered a hedge against a weak greenback, tends to rise when the dollar falls.
Weakness in Dollar Could Help Trigger Sell-off Despite the higher equity markets overnight, the lack of upside momentum is making traders leery of a possible short-term profit-taking correction ahead of tomorrow’s holiday. Weakness in the Dollar could help to trigger a sell-off. Treasuries are trading flat to better. March Treasury Bonds and March Treasury Notes are trying to recover after a hard sell-off this week. Selling pressure should resume after the holiday as traders are beginning to price in the possibility of an interest rate hike in 2010. Aggressive buying by Japanese investors helped to drive up yields earlier in the week.
Dollar Falls on Easing Bets; Japan Stocks Dip, Copper Rises The dollar declined, poised to end three weeks of gains on speculation the Federal Reserve will maintain stimulus to secure the U.S. economy’s recovery. Japanese stocks dropped, while copper climbed to a 15-month high. The greenback fell against 10 of its 16 most-traded counterparts before reports next week forecast to show a slide in U.S. business activity and a rebound in initial jobless claims. Makers of electronics and cars led a 0.2 percent drop in Japan’s Nikkei 225 Stock Average on concern recent gains made shares expensive relative to earnings. Copper and rubber advanced on optimism that the global economic recovery will boost demand for materials.
Central Banks Avoiding Dollar to Kill 2010 Rally, Barclays Says The U.S. dollar’s gains may end in the middle of 2010 as central banks shy away from adding greenbacks to their reserves and the Federal Reserve raises rates at a slower pace than investors expect, Barclays Plc said. Long-term demand for dollars is set to weaken after the currency’s share of global reserves added in the third quarter slid to less than 30 percent, a decline “unprecedented in a period of U.S. dollar weakness,” Barclays said in a note to clients. The dollar stemmed 11 months of declines versus the 16 most-traded currencies in December, gaining against all but two, after investors increased bets the Fed will remove monetary stimulus next year as the economy recovers.
Faber Says Watch US vs. China Great Powers Game Play During 2010 Dr Faber, in the September issue of the Gloom, Boom & Doom Report you said that the future will be a total disaster with a collapse of our capitalistic system as we know it. Three months later do you still stand by that assessment or did you underestimate the power of the governments to shore up the global economy? Well, I think we had this huge intervention in the world but if you look at the cause of the financial crisis. The cause of the financial crisis was excessive credit growth and essentially the private sector has reacted rationally. After 2008, the private sector has reduced its leverage, in other words, the consumer credit is declining and business credit is also declining but this is being offset by a huge expansion of government credit. So total credit as a percent of the economy in the US is still growing.
Congress raises debt ceiling to $12.4 trillion The Senate voted Thursday to raise the ceiling on the government debt to $12.4 trillion, a massive increase over the current limit and a political problem that President Barack Obama has promised to address next year. The Senate's rare Christmas Eve vote, 60-39, follows House passage last week and raises the debt ceiling by $290 billion. The vote split mainly down party lines, with Democrats voting to raise the limit and Republicans voting against doing so. There was one defection on each side, by senators whose seats will be on the ballot next year: GOP Sen. George Voinovich of Ohio and Democratic Sen. Evan Bayh of Indiana.
Bailout's big mistake: Loans to small banks The last of the big banks have returned their bailout funds, but uncorking the champagne would be premature: taxpayers still have a lot of skin in the game, and getting paid back only gets more difficult from here on out. There are still 663 banks that have received a total of $58.6 billion in loans from the Troubled Asset Relief Program and have yet to pay the Treasury Department back.
Bipartisan Duo Moves Ahead on Finance Bill The top Democrat and Republican working on the Senate bill to overhaul regulation of U.S. financial markets outlined the goals they share, and said they hoped to resolve differences on the measure before lawmakers return in January. Sens. Christopher Dodd (D., Conn.) and Richard Shelby (R., Ala.) issued a joint statement Wednesday saying that discussions in recent weeks between Democrats and Republicans had been "extremely productive."
Banks Bundled Bad Debt, Bet Against It and Won In late October 2007, as the financial markets were starting to come unglued, a Goldman Sachs trader, Jonathan M. Egol, received very good news. At 37, he was named a managing director at the firm. Mr. Egol, a Princeton graduate, had risen to prominence inside the bank by creating mortgage-related securities, named Abacus, that were at first intended to protect Goldman from investment losses if the housing market collapsed. As the market soured, Goldman created even more of these securities, enabling it to pocket huge profits.
A Nightmare before Christmas
U.S. Treasury Ends Cap on Fannie, Freddie Lifeline for 3 Years The U.S. Treasury Department will remove the caps on aid to Fannie Mae and Freddie Mac for the next three years, to allay investor concerns that the companies will exhaust the available government assistance. The two companies, the largest sources of mortgage financing in the U.S., are currently under government conservatorship and have caps of $200 billion each on backstop capital from the Treasury. Under a new agreement announced yesterday, these limits can rise as needed to cover net worth losses through 2012.
Treasury removes cap for Fannie and Freddie aid The government has handed its ATM card to beleaguered mortgage giants Fannie Mae and Freddie Mac. The Treasury Department said Thursday it removed the $400 billion financial cap it will provide to keep the companies from failing. Already, taxpayers have shelled out $111 billion to the pair. Treasury Department officials said the $400 billion limit would be replaced with a flexible formula to ensure the two agencies can stand behind the billions of dollars in mortgage-backed securities they sell to investors.
U.S. Uncaps Support for Fannie, Freddie The U.S. Treasury said it would provide capital as needed to Fannie Mae and Freddie Mac over the next three years, effectively opening its checkbook to the government-controlled companies in a bid to reassure investors in their debt. Treasury also will end its purchases of the companies' mortgage-backed securities and terminate a never-used short-term liquidity facility set up for the firms and the Federal Home Loan Banks. And it moved to allow the companies to shrink their giant portfolios of mortgage securities more slowly, though it said it was still "committed to the principle" of reducing the portfolios.
Fannie Mae, Freddie Mac CEOs could each earn $6 million a year Michael Williams at Fannie and Charles E. Haldeman Jr. at Freddie will each receive a base salary of $900,000 in 2009 and 2010. They could get $5.1 million more if certain targets are met. Reporting from Washington - The chief executives of Fannie Mae and Freddie Mac each could earn as much as $6 million this year and next, despite huge continued losses at the seized mortgage giants and a government bailout tab of more than $100 billion that the Obama administration said could rise even higher. Fannie Mae Chief Executive Michael Williams will earn a base salary of $900,000 in 2009 and 2010, with a deferred base salary of $3.1 million each year to be paid "only if the enterprise meets performance metrics" set by its board and subject to government review, according to filings Thursday with the Securities and Exchange Commission. An additional $2 million is possible annually, identified as "target incentive opportunity." Freddie Mac Chief Executive Charles E. Haldeman Jr. will get the same compensation package.
Is it all just a Ponzi scheme? Sprott Calls The Fed "A Ponzi Scheme" As Half A Trillion In Treasury Purchasers Are Unaccounted For By: Eric Sprott & David Franklin In our May/June Markets at a Glance, "The Solution…is the Problem", we discussed how much debt the US government would need to issue in order to balance the budget for fiscal 2009. We calculated they would need to sell $2.041 trillion in new debt - or almost three times the new debt that was issued in fiscal 2008. As a thought experiment, we separated all the various US Treasury owners and asked our readers whether each group could afford to increase their 2009 treasury purchases by 200%. In the end, we surmised that most groups couldn’t, and prepared our readers for the worst.
Senate Bill: True Health-Care Reform or the End of Capitalism? The Senate passed health-care reform legislation Thursday morning, bringing America "incredibly close to making health insurance reform a reality in this country," as President Obama told reporters. The Senate bill means "for the first time, most Americans would be required to obtain health insurance, either through their employer or via new, government-regulated exchanges," The Washington Post reports. "Those who can't afford insurance plans would receive federal subsidies. And Medicaid would be vastly expanded to reach millions of low-income children and adults."
The Three-Step Plan to Stop Nationalized Health Care Congressional Democrats, after all their faux wrangling, open bribery and bully tactics, are poised to reach agreement on a massive makeover of the American health system. This makeover will bankrupt the insurance companies, raise premiums, and eventually lead to the full nationalization of health care. That's what it is intended to do. By forcing insurance companies to cover pre-existing conditions, the Democrats destroy all profit margin for the insurers, expecting that the healthy insured will pay for the unhealthy insured. To prevent the healthy insured from opting out of the system, the Democrats levy the threat of fines and jail time. And when the insurers go under, as they surely will, the Democrats will be waiting.
Health Care Reform Has Americans Dazed and Confused Most Americans still don't have a clue about health care reform. Months of debate in Congress, endless chest-thumping by pundits and scores of dramatic 30-second ads have done shockingly little to educate Americans about the sweeping legislation that promises to affect all of them for decades to come. Quoting a Pew Research Center analysis of its Dec. 9-13 nationwide poll, McClatchy Newspapers reports that "a large majority of Americans -- 69% -- say they find the issue hard to understand." That's even higher than the response Pew got in late July of 63%. For anyone involved in the debate, that statistic has to be depressing. Then again, this issue is a nightmare to explain to anybody, regardless of their political persuasion.
Senate OK's Health Care Bill in Victory for Obama Senate approves health care bill, clears way for final compromise with House on legislation In an epic struggle settled at dawn, the Democratic-controlled Senate passed health care legislation Thursday, a triumph for President Barack Obama that clears the way for compromise talks with the House on a bill to reduce the ranks of the uninsured and rein in the insurance industry. The vote was 60-39, strictly along party lines, one day after Democrats succeeded in crushing a filibuster by Republicans eager — yet unable — to inflict a year-end political defeat on the White House.
As Health Bill Advances, Few Changes Seen for Millions Now that the Senate has caught up with the House by passing a sweeping health care bill, lawmakers are on the verge of extending coverage to the tens of millions of Americans who have no health insurance. But what about the roughly 160 million workers and their dependents who already have health insurance through an employer? For many people, the result of the long, angry health care debate in Washington may be little more than more of the same. As President Obama once promised, “If you like your health plan, you can keep your health plan.”
Nice Home. Where’s the Rest of It? The author of the Craigslist posting in Las Vegas made no effort to disguise his or her intentions. “Stripping House — Before Foreclosure,” the ad declared, offering potential buyers the cabinets and countertops, the sinks and toilets, the doors, the appliances, the sprinklers. Even the palm and citrus trees in the yard were for sale, with a catch. “You dig,” the author advised. In Nevada and other states hit hard by the housing crisis, stripping fixtures and appliances from homes in foreclosure has become commonplace. Craigslist, the Web site for classified ads, functions as a bazaar where stripped items are sold openly. Often, the stripping is not done by strangers. It is done by the owner, just before the bank forecloses on the mortgage and takes the property back.
There Are Tea Parties and Tea Parties, and Here the Twain Meet, Uneasily Mr. Richardson, Who Knows How to Brew, Visits Ms. Sims, Steeped in Politics There are two tea-party movements in America. One favors low taxes, small government and patriotic feeling. The other favors fine china, orange pekoe and cordial chitchat. The two have coexisted uneasily since Dec. 16, 1773, when antitax demonstrators dumped 342 chests of quite drinkable tea into Boston Harbor. Lately, tea dumpers have touched off a raucous revival. But tea sippers, enjoying a genteel revival of their own, aren't showing the dumpers much sympathy.
Senate Agrees to Vote on Proposal to Halt EPA's CO2 Action The Obama administration may be forced to delay new greenhouse-gas regulations for a year under a Senate Republican proposal that the Democratic leadership has agreed to allow a vote on in early 2010. As part of a deal on a bill to increase the nation's debt limit, Majority Leader Harry Reid (D., Nev.) will allow the GOP to submit a controversial amendment to temporarily suspend new emissions regulation. The agreement was reached late Tuesday. While it's unclear whether the proposal will become law, it could be an early show of how many Democrats support the administration's decision to regulate greenhouse gases under the Clean Air Act.
Israel threatens another large-scale Gaza war Israel has threatened another massive war against the Gaza Strip as the impoverished enclave continues to suffer in the aftermath of the devastating January offensive. Israeli planes have been dropping thousands of leaflets across Gaza, warning Palestinians against cooperating with the resistance fighters based in the coastal sliver. The leaflets also threaten Gazans with a new attack just ahead of the first anniversary of Israel's 22-day onslaught against the Palestinian territory.
Church concerned over Gaza dire situation The head of the Roman Catholic Church in Bethlehem, Patriarch Fouad Twal, has voiced concerns over the worsening humanitarian situation in Gaza. "How can one celebrate while Palestinians are still struggling with a devastating blockade one year after Israel's onslaught on Gaza?" Twal said while addressing the Midnight Mass at Bethlehem's Church of the Nativity on Thursday.
Ahmadinejad: West not brave enough to come clean President Mahmoud Ahmadinejad says some Western countries are using Iran's nuclear program as a pretext to put pressure on the Islamic Republic. In an interview with Britain's Channel 4, Ahmadinejad said that Iran opposes the expansionist policies being pursued by certain Western countries, adding that this was the real reason behind their animosity towards Iran.
[CFR]:Money Out Of Nothing (1 of 3)
[CFR]:The Unseen Guardian Angels (2 of 3)
[CFR]:Media Controlled and Manipulated by Corporate (3 of 3)
Bernanke, Time’s Person of the Year Drives the Debt Crisis Spiral Fed President Ben Bernanke has been named Time magazine’s Person of the Year for 2009. However, in looking back at former People of the Year it becomes crystal clear that this title doesn’t necessarily mean that the honored person has done something good for the world … It only meant that he or she had made a big influence on the course of history during the preceding year. Some have brought us blessings, while others have brought plagues. And this year it surely seems that Time’s journalists think of Bernanke as a blessing for the world. Well, I have to strongly disagree … It Didn’t Work in Zimbabwe, And it Won’t Work in the U.S.
Obamas Healthcare Reform Spells Disaster for Americans (Part 1) First, I want to point out that this article should by no means encourage support for the Republican Party. If you are not already aware, both parties deliver essentially the same results when it comes to issues that matter most to the people, such as the case with free trade and healthcare, while fooling you to think they represent opposing positions. They are able to carry out this deceit with the help of the media monopoly, which uses censorship, lies, misinformation, scare tactics, brainwashing and other methods to deceive the public. Most Americans have been fooled into thinking one party has the solutions to the nation’s problems, when the facts paint a much different picture. You need to understand that both parties are the same. As history shows, you get the same result regardless who resides over the White House and Congress.
Fiat currencies out, gold & silver the new currencies In the currency game, only one player has dominated throughout the course of history: precious metals. Over time, fiat currencies lose their worth, as governments inflate the paper through printing and confidence is lost with each recession. This phenomenon was proven in the United States with the Continental currency, which was rapidly inflated to pay for the revolutionary war. Thereafter, the inflated Continental dollar was replaced with hard metals, which retained and actually grew in value from 1774 to the creation of the Federal Reserve Bank in 1913.
Jim Rogers Bloomberg December 2009 (1) (NWO SERIES/ ECONOMIC COLLAPSE)
Gold rises on stalled dollar rally NEW YORK: Gold prices climbed the most in a week as the dollar sank for the first time in seven days, boosting demand for precious metals as a haven. The dollar fell as much as 0.7% against a basket of six major currencies on speculation that December’s rally will be hard to sustain. Before today, the greenback rose 4.5% this month against the currency basket as gold fell 8.1%. “The gold moves are all related to the dollar,” said Lannie Cohen, the president of Capitol Commodity Services Inc. in Indianapolis. “The dollar had been strong for a few weeks now, putting a cap on prices. If this is the end of that rally, then gold will start to move higher again.”
Gold steady around $1,090 in holiday-thinned market TOKYO, Dec 24 (Reuters) - Gold prices were steady near $1,090.00 per ounce on Thursday as trading was subdued with many players out for the Christmas holidays and investors squaring positions before the year-end.
Gold catches fancy of common investors Gold has made a tentative entry into the portfolios of many common investors in 2009. Of course, it was mainly aided by the yellow metal's blinding returns in a short bursts, when all other assets were plumbing depths in the aftermath of global economic crisis. According to investment experts , many investors have realised the precious metal's ability to act a stabilizer in the wake of economic uncertainties and its important role as a perfect diversification tool over a long period of time during the current year.
Gold rises as dollar weakens after home sales data Gold futures traded higher Wednesday, rebounding from their seven-week low as disappointing consumer confidence and new home sales data weighed on the dollar and boosted gold's appeal as a hedge against a weaker currency. Sales of new homes fell 11.3% in November to a seasonally adjusted annual rate of 355,000, the Commerce Department estimated. The consumer sentiment index came in at 72.5 in late December, according to Reuters/University of Michigan. Analysts had expected the index to climb to 74.
Will Gold Bullion Investors Become Enemies of the State? According to Adolf Hitler: "Gold in the hands of the public is an enemy of the state." I wonder what he meant by this? Was Hitler retarded? Did he have a childhood marred by parental beatings with Gold plated items? Why would he say such a thing? Here's another Hitler quote on Gold: "Gold is not necessary. I have no interest in [G]old. We will build a solid state, without an ounce of [G]old behind it. Anyone who sells above the set prices, let him be marched off to a concentration camp. That's the bastion of money."
Gold: Best Return for the Decade Unless something really drastic happens in the light trading left in the year, this decade belonged to commodities and especially, gold. Here’s a chart showing how much you would have if you invested $100 in each major asset class since 2000: Knowing about the 18 year cycle between commodities and equities, this isn’t surprising. In fact, thanks to this long term historical pattern, we can look forward to almost another decade of the same type of outperformance.
Gold prices to touch $5000: US Gold Corp Gold Prices recovered from a new 7-week low in Asian and London dealing on Wednesday, rising above $1080 an ounce as world stock markets extended their 3-day gains. "Trading is uneventful with Tokyo out on holiday," said one dealer. "Investor and physical interest in the Far East seems to be slowing down ahead of the year end," says another. Crude oil crept back above $74.50 per barrel, meantime, more than twice the price of this time last year.
Gold Bouncing Off Support Levels as Markets Hold Steady The chart above (click to enlarge) shows the pullback in gold prices, which are now nearing support levels. The red line I have drawn represents what had been former resistance levels around $1075. That former resistance is now acting as support, and gold is attempting to bounce from these levels. I trimmed half of our gold etf positions at higher levels, but yesterday I added back a little to play a potential bounce. I don't plan to add back all of our exposure to gold until I see it hold support. Often times there is an initial bounce, and then a pullback to retest said support levels. If this occurs, the second pullback would represent a better entry point. We shall see.
Gold has become part of the global asset bubble . . . . When we chatted in August, you were looking at a gold price in the $900 neighborhood, indicating that fear of another financial disaster was driving gold prices. Since then, gold broke through $1,200 and has now corrected down to about $1,120. Is fear still the driving factor or has the dynamic changed?
Brent Cook: I was probably wrong in my assessment at the time. I didn't take into account the amount of liquidity—money being pumped into the system. I think what is driving gold now and drove it up through $1,200 is greed much more than fear. In my view, gold has become part of the global asset bubble—which includes foreign real estate, stock markets and base metals. So it's actually greed that's been driving gold, at least over the past few months.
Can China beat US in gold reserves in 10 years? China has set the most ambitious task on gold reserves and gold mining: take the country’s gold holdings from the current 1054 tonnes to a massive 10,000 tonnes in the next 10 years. Is this grand task a realistic plan or a golden dream? Chinese officials say the dragon country wants to overtake the United States in gold reserves. America is the world leader in gold reserves. America owns 8133 tonnes of gold reserves that accounts for 76.5% of its foreign exchange reserves. Naturally, the Chinese plan is to ensure that bulk of its foreign exchange reserves--currently held in the forms of US dollar and bonds--is turned into gold reserves.
Will the U.S. Dollar Rally End the Gold and Silver Bull Market? It has become clear to us that the media and so many institutional analysts are going to keep talking the $ up despite the lack of fundamental reasons. We feel that you will benefit most from a look at what lies ahead for the $ and its fundamentals and what could take it higher, if it does rise. A Rally is due? The main reason a rally in the $ is being promoted is because it is due for a rally. The same is being touted for the Pound Sterling. It is certainly true that a price never moves in a straight line. It is also true that investors, buyers and sellers must see trade around all levels to ensure they are balanced and accept price levels as convincing. When the market sees a price 'spike' you can be sure that sellers will turn up to bring it down. The only time it stays there is when buyers and sellers feel that, that price is justified by them both.
Jim Rogers Bloomberg December 2009 (2) (NWO SERIES/ ECONOMIC COLLAPSE/ UK's Debt Crisis)
Gold steadies as lower prices attract buyers Physical buying re-emerges in Europe as prices subside Gold prices steadied in Europe on Wednesday as the metal's slide to a seven-week low in the previous session prompted buying of physical stocks of the precious metal. A persistently firmer tone to the dollar, which hit its highest level since early September versus the euro on Tuesday, is limiting further gains, however.
Is Gold Going Higher or Popping Now? Part2 Yesterday, we analyzed the current bull market in Gold from a historical context. Right off the bat, we ran into some conflicting issues: from a timing perspective, Gold’s recent run is a little long of tooth, however, from a gains perspective, Gold still looks to have plenty of room to run (during the last Gold bull market, it rallied 750% during its second leg up).
How hyperinflation progresses and how to profit With the current US deficit soaring above $12 trillion, the conditions are ripe for inflation. However, is hyperinflation just around the corner?
Step 1: A Collapse
Step 2: Keynesian Solutions
Step 3: Weeding Out Bad Investments
Step 4: Rampant Inflation
Flaherty Says Russia, China May Buy Canada Dollars Canada’s Finance Minister Jim Flaherty said China, with the world’s largest currency reserves of $2.3 trillion, may be poised to buy Canadian dollars as it seeks to shield its reserves against the U.S. dollar’s decline. “It does not surprise me that China and Russia would take greater positions in the Canadian dollar than they have previously,” Flaherty, 59, said during an interview in his office in Ottawa. “I would expect countries looking around the world to invest in market currencies that are reliable.”
Turbulent Year Ahead for Sovereign Debt Issuers As the global economic recovery attains a more solid footing, 2010 will at best see a ?normalization and at worst a severe tightening in government financing conditions. Long-term interest rates may increase more rapidly than expected because of an over-reaction to economic news, which we believe will be mildly positive overall. Moreover, the slow unwinding of quantitative easing will accelerate this credit repricing process.
Top Ten Reasons Why the Yield Curve Will Flatten (Hint: This Is a Different Sort of Recession) As I told Larry Kudlow on CNBC Monday night, the employment recovery will be poorer than the market appears to expect, for reasons I’ve posted on this site during the past two weeks. The yield curve is at record steepness. I think that’s an overreaction. In fact, the steep yield curve in the present environment is NOT a harbinger of recovery — it’s a brake on recovery because it encourages banks to own Treasuries rather than risky assets (see below). Here are my top ten reasons to expect the yield curve to flatten.
Fannie, Freddie Executives Get Big Payday The top regulator for Fannie Mae and Freddie Mac is expected to announce on Thursday millions of dollars in pay packages for top executives at the government-run mortgage-finance titans, people familiar with the matter said. The Federal Housing Finance Agency approved multimillion-dollar pay packages for Fannie Mae Chief Executive Michael Williams and Freddie Mac CEO Charles Haldeman Jr., and those packages are expected to be in a range of $4 million to $6 million, people familiar with the matter said.
Bernanke's Flawed Understanding of Economic Theory In his speech at the Economic Club in Washington, DC on December 7, the Fed chairman, Ben Bernanke, detailed his expectations of the future course of the US economy. . . . . . . . . The actions that policymakers have taken amount to the introduction of extremely loose monetary and fiscal policies. But how does Bernanke know that such policies have averted a global financial meltdown? Neither printing money nor increasing government spending can be a catalyst for economic growth.
Geithner: On the Road to Recovery, but in the Slow Lane Treasury Secretary Timothy Geithner told National Public Radio in an interview Tuesday that he strongly believes we are on the road to recovery, but it won't be fast. He said "we were in a very deep hole . . . It's going to take a long time to repair the damage done to confidence." But he sees people spending more and businesses starting to invest again, all good signs.
Obama Tries to Get Small Banks to Take Bailout This time, no fat cats. President Barack Obama took his plea for more small business lending to community bankers Tuesday, but his prodding was far gentler than it was with high finance CEOs last week. The president offered to help ease regulation that bankers say has restricted lending. He praised the small bankers as pillars of their communities. And he listened sympathetically to their pleas for easier access to capital. "It's fair to say that most of these community banks were not engaged in some of the hugely risky activities that helped to precipitate the financial crisis," Obama said at the conclusion of the meeting with 12 regional bankers and top administration officials.
Study Finds That Of All Factors Determining The "Bailoutability" Of Crappy Banks, Ties To The Federal Reserve Are Most Critical Adam Smith, Charles Darwin and George Washington are not only rolling in their graves, they are dancing the macarena. A new study by the UMich School of Business has found what everyone has known since the crisis began, if not centuries prior: that the biggest, crappiest banks were guaranteed to get more bailout funding the more political ties they had (and more kickbacks they had offered). Is this sufficient to claim that capitalism in its purest sense has been corrupted beyond repair, courtesy of political intervention and constant pandering? David Walker: The U.S. Economy is Unsustainable (originally aired in 2007)
What George Soros Knows About Super Bubbles George Soros, Chairman of Soros Fund Management and author of The Crash of 2008, has been around the financial market block a few times, so I think it pays to heed the regulatory reform recommendations as it relates to the “Super bubble” of 2008. As you probably know, financial bubbles are not a new concept. Beyond the oft-mentioned technology and real estate bubbles of this decade, bubbles such as the “Tulip-mania” of the 1630s serve as a gentle reminder of the everlasting existence of irrational economic behavior. If the Dutch were willing to pay $76,000 for a tulip bulb (inflation-adjusted) almost 400 years ago, then virtually any mania is possible.
Rise and Fall in Dubai, An Austrian Economics Perspective All Is Well - It was January 2008 when I first set foot in Dubai. It was a land full of grandiose, landmark projects. Few cities in the world could match the sheer number of high-rise buildings and skyscrapers being built in the emirate (more than 80 units over 150 meters high are completed or under construction as of this writing). Shopping malls were cropping up everywhere, and the biggest one in the world, Dubai Mall, was then under construction. Retail and the service sector were booming, not just from the significant increase of population in the last several years but also on account of the boost provided by tourism. Needless to say, hotels were flooded with tourists; occupancy rates were over 80%. Lastly, the real-estate and construction sectors were just spectacular. Stories of investors profiting over 20% in one day by buying and selling off-plan properties were commonplace.
Household Financial Burdens Still on a Downtrend Every time I post an update of this chart (click to enlarge) I seem to get a number of incredulous responses. What the chart shows is that households' financial burdens are, on average, lower today than at any time in the past five years. Moreover, they are not any worse today than they were in 2001, and financial burdens have not risen materially for the past three decades.
Disappointing New Home Sales in November May Be a Tax Credit Glitch New homes sales unexpectedly plunged 11.3% in November to a seasonally adjusted annual rate of 355,000, the U.S. Commerce Department announced Wednesday. Demand tapered off as the popular federal first-time home buyer credit was originally set to expire at the end of the month. It was eventually, however, extended by Congress.
New-Home Sales Drop 11.3% As Impact of Stimulus Fades The U.S. economy is showing more signs of recovery, but new data on housing and household income underscored concerns that the economy could lose momentum next year as the impact of government stimulus fades. Sales of newly built homes fell 11.3% in November to a seven-month low, the Commerce Department reported, as the government's tax credit for first-time buyers was originally set to expire. "The housing rebound has so far been largely supported by government programs, raising questions of sustainability as these programs come to an end next year," said BNP Paribas economist Anna Piretti.
Home Sales Plunge 'Unexpectedly' It was "unexpected" since by now all Americans were supposed to be safely ensconced in the home of their dreams with Barack Obama paying their mortgages and utility bills, health care was going to be "free" for all, the world was going to love us again, Club Gitmo was to be shuttered, thereby improving our "image" around the world, Obama would have reduced the sea levels while eliminating mythical global warming and shiny magic unicorns would be delivering toys for all the kids. Or was that Santa Obama? Whatever, you have to laugh at these clowns from AP. Whenever it's depressing economic news somehow it's unexpected. Seriously, what alternate reality are they living in?
The Terrifying Future Facing America During the boom years, no place in America boomed more than Las Vegas. But when the economy collapsed, Vegas fell hard. Laura Ling tours the wreckage of Sin City, from unemployed strippers and half-built, abandoned casino projects, to hospitals turning away cancer patients and ambulances, to one of the few remaining boom industries--evicting people. "Lost Vegas" previews the terrifying future facing America. We are looking at a disaster unprecedented in recent history.
Outsourcing Unemployment:
Oil rises $2 following US inventories Crude oil rose more than $2 a barrel on Wednesday following the latest US weekly inventories data while white sugar prices reached a fresh peak. Nymex February West Texas Intermediate was $2.27 higher at $76.67 a barrel, while ICE February Brent added $1.99 at $75.45 a barrel. US crude stocks dropped 4.9m barrels last week, far above the consensus forecast for a decline of 900,000 barrels. The decline in stocks was due in part to low imports, down 65,000 b/d to just 7.71m b/d last week, after fog affected vessels in the Houston Shipping Channel.
Health care bill: The real money question The health care reform bill on track to pass the Senate on Thursday would do more than any proposal yet to reduce the deficit over time - by an estimated $132 billion over 10 years and by substantially more thereafter. But reducing the deficit is not entirely synonymous with the oft-stated goal of health reform: reducing the growth rate in health care costs and expenditures - often referred to as "bending the cost curve." That growth rate is what drives federal spending on Medicare and other federal health programs.
House Democrats making plans for final health care bill House Democrats are already home for the holidays, but they huddled on a conference call Wednesday afternoon to discuss the next steps in negotiating a final health care bill with the Senate. Speaker Nancy Pelosi restated that the goal is to get a final bill to the president's desk before his State of the Union address in late January or early February, but she admitted the timeline could slip, according to two senior Democratic aides who were on the call.
Sen. Vitter: Healthcare bill is 'Louisiana Sell-out,' not 'Louisiana Purchase' The Senate's healthcare bill might offer Louisiana about $300 million in Gulf Coast recovery money, but that's still not enough to win Republican Sen. David Vitter's (R) support, he told supporters on Wednesday. The entire bill's costs to the state amount to a "Louisiana Sell-out," he said this afternoon -- not a "Louisiana Purchase," as some of Vitter's colleagues have charged when referencing Democratic Sen. Mary Landrieu's (D-La.) decision to vote for the bill despite her initial skepticism.
President: Healthcare bill is more than 'half a loaf' compromise President Barack Obama on Wednesday dismissed criticisms among the left that he has hedged his principles as this year's healthcare debate has toughened. During an interview with PBS's "Newshour," the president said those who now charge he has "compromised" his key healthcare goals are "not paying attention" to the debate itself.
Senate health overhaul clears last procedural step Capitol Hill vote on final passage set for early Thursday morning The White House-backed health-care overhaul got a step closer Wednesday to final Senate passage as lawmakers voted to cut off debate on the $871 billion bill. The move paves the way for a 7 a.m. final vote Thursday morning on the package, which seeks to extend insurance coverage to millions of Americans and put new rules on insurers, among many other features. Senators voted 60-39 to stop debate. Final passage of the bill is all but certain. That legislation will then need to be reconciled with the House-passed version, which includes a government insurance plan left out by the Senate and different language on abortion coverage.
Senior Dem: Kill the Senate health reform bill and start over The Senate's healthcare bill is fatally flawed, a senior Democrat atop a powerful committee said on Wednesday. Rep. Louise Slaughter (D-N.Y.), the chairwoman of the House Rules Committee and co-chairwoman of the Congressional Pro-Choice Caucus, said that the Senate's bill is so flawed that it's unlikely to be resolved in conference with the bill to have passed the House. "The Senate health care bill is not worthy of the historic vote that the House took a month ago," Slaughter wrote in an opinion piece for CNN's website.
Abortion funding still hurdle to health bill The way abortions are covered under health care reform is a major obstacle to finalizing the legislation, even though the House and Senate both agree that no federal money should be used. The stumbling block is whether insurance plans that get federal money are completely barred from covering abortions, or whether they can cover it as long as they require customers to write separate checks for the procedure using their own money. Why does that matter?
Don't mess with Texas: More Americans moving in Americans, it seems, still have a love affair with the West. Texas and Wyoming were the big winners in the Census Bureau's annual population estimates, which were released on Wednesday. In the year ended July 1, Texas added more people than any other state, and Wyoming had the highest growth rate in the nation. The population of the United States has grown more than 9% to 307,006,550 since the 2000 census. The population grew 0.86% since last year's estimates. Just three states shrank during the year. Michigan's population fell by 0.33%, Maine dropped 0.11%, and Rhode Island lost 0.03%.
California vs. Greece: Two Economies in Trouble The LA TImes reports that things are not so golden in the Golden State, as Governor Arnold Schwarzenegger once again turns to Washington for help in averting a death spiral. Facing a budget deficit of more than $20 billion, Gov. Arnold Schwarzenegger is expected to call for deep reductions in already suffering local mass transit programs, renew his push to expand oil drilling off the Santa Barbara coast and appeal to Washington for billions of dollars in federal help, according to state officials and lobbyists familiar with the plan.
Apple May Be on the Verge of Kneecapping the Cable Industry The cable companies suck. All of them. Some suck less than others. But they all suck. We need someone to whip them into shape. And that someone may be Apple. Apple may be on the verge of gaining two key television network agreements, according to The Wall Street Journal. Specifically, CBS and Walt Disney (which runs ABC) are said to be considering a proposal by Apple to offer a subscription-based TV service over the Internet. Presumably, this would work through iTunes like all of Apple-based content, but also presumably it would work over Apple’s Apple TV device (though maybe a new version of it) to bring this content into the living room, where people are used to consuming it. Simply put: This could be huge.
Climate-Gate - Michael Coren with Lord Christopher Monckton - part 1 of 5
Climate-Gate. Michael Coren with Lord Christopher Monckton - Part 2 of 5
Climate-Gate - Michael Coren with Lord Christopher Monckton part 3 of 5
Climate-Gate - Michael Coren with Lord Christopher Monckton part 4 of 5
Climate-Gate. Michael Coren with Lord Christopher Monckton part 5 of 5
**** Caution! Message from a globalist: David Rothschild regrets Global Governance tough to activate in Copenhagen "Simon Linnett, Executive Vice-Chairman of Rothschild, has called for a new international body, the World Environment Agency, to regulate carbon trading. In a recently published paper, Trading Emissions, for the Social Market Foundation, Mr Linnett argues that the International problem of climate change demands an international solution. Unless governments cede some of their sovereignty to a new world body, he says, a global carbon trading scheme cannot be enforced and regulated." David Rothschild regrets that Global Governance is proving very hard to activate at the UN climate conference in Copenhagen.
IMF turns down $2bn loan to Ukraine The International Monetary Fund has turned down recession-battered Ukraine’s plea for a $2bn emergency loan before the New Year, a senior Ukrainian official said on Wednesday, citing his country’s failure to adopt a fiscally prudent 2010 budget and muster political consensus ahead of a hotly contested presidential election. But officials said the financially-stretched government had other last-minute options that could allow it receive the needed $2bn in coming months, enough to cover natural gas import bills to Russia’s Gazprom, as well as citizens’ pensions and wages.
E.U. IMF Debt Revolt, Greece, Iceland, Latvia May lead the Way Europe’s small, debt-strapped countries could follow the lead of Argentina and simply walk away from their debts. That would shift the burden to the creditor countries, which could solve the problem merely by a change in accounting rules. Total financial collapse, once a problem only for developing countries, has now come to Europe. The International Monetary Fund is imposing its “austerity measures” on the outer circle of the European Union, with Greece, Iceland and Latvia the hardest hit. But these are not your ordinary third world debtor supplicants. Historically, the Vikings of Iceland successfully invaded Britain; Latvia n tribes repulsed the Vikings; and the Greeks conquered the whole Persian empire. If anyone can stand up to the IMF, these stalwart European warriors can.
On the Edge with Max Keiser - 18 December 2009 (1/3)
On the Edge with Max Keiser . . . and Edward Harrison (2/3)
On the Edge with Max Keiser . . . and Edward Harrison (3/3)
Gold at $1,400 in 2010 Almost all analysts have revised their gold price forecast in the recent past and latest in the list is JP Morgan. JP Morgan analyst John Bridges said gold will hit a whopping $1,400 to $1,450 an ounce in the second quarter of 2010 before slipping back. According to Bridges, there is literally no reason to believe that the gold rally is going to end soon. According to a report in Financial Post, his main rationale for this argument is US dollar weakness, which he expects will continue until mid-2010. Forex strategists at JP Morgan are calling for the greenback to weaken to a new all-time lows against the euro (1.62) and the yen (82). While they do not expect the dollar to fall off a cliff, they think it will remain weak because of the Federal Reserve's belief that core inflation is not a problem right now.
Gold Santa, What's in His Toybag? WHY is gold falling? One of you asked this yesterday. Responding to price is important, but why is gold falling? In the end, gold is falling because there are more sellers than buyers. Breaking that down, the US dollar is rising, and gold moves - usually - opposite to the US dollar. Technically, as gold rose to $1200, many of the indicators were at points that would attract more technical sellers than buyers, and as various chart support and trend points failed, more sellers came in. Items rise and fall. Gold rose from $905 with almost no down. All the way to $1225. That's a $300 move, a 30% move, in price. If you are looking for a general explanation of why gold rises or falls, it is usually, but not always, because the US dollar is doing the opposite.
Cartel controlling gold price about to be smashed Gold behaved as predicted in last weekend's update - it rallied into the middle of last week before plunging on Thursday and then ended the week with a modest upturn. Thursday's plunge involved a sharp break below our important parabolic uptrend channel, and although the break was not by a decisive margin and gold rallied Friday, this sharp drop has bearish implications. We can see this latest action on the 1-year chart on which we can also see that although gold has broken down from the parabolic uptrend, it has yet to breach the "last ditch" support of the lower boundary of the parallel uptrend channel, which is shown as a dotted line.
The Real Reason Not to Bet Against Gold The much anticipated gold correction hit faster than most expected. After weeks of eerily consistent gains, gold is now shedding anywhere from $20 to $50 on the down days and struggling to post $10 upticks on short-lived rebounds. On top of that, the U.S. dollar is showing its first signs of strength in months. The new trend in gold is down. And as you might expect, the short-sighted “hot money” is finding all the reasons they can to justify selling gold.
US Gold CEO sees gold price soaring “Annual mine production is declining and costs are going up, so that means higher prices,” Rob McEwen, chairman and CEO of US Gold Corporation, said in an interview. “By the end of 2010 I see the gold price at $2000 and before the game’s over at over $5000.” Asked when that might occur, McEwen said: “That will probably be in 2012 to ‘14, because of lack of supply and also gold is money, it’s a currency.
Gold is the top investment tip for 2010 The recent $125 correction in the gold price from $1,226 per ounce leaves some analysts thinking that the bull market is finished. But anybody with even a passing knowledge of investment analysis ought to recognize a buying opportunity rather than the end of an uptrend. Gold has been moving up in $200 steps every two years for the past decade. However, each leg up is characterized by a hesitation and retracement. That is what we are seeing now.
Gold Not Going Up in Price, Money Losing Value
Gold Being Driven Higher by Speculation Not Real Physical Demand Over the last two days, we’ve looked at the current Gold bull market from historical and supply/ demand perspectives. Thus far, the data has lead us to believe that Gold has entered a speculative “mini-bubble” phase in bull market. This scenario can of course change at any time should the public’s demand for physical bullion pick up again. However, until that occurs, Gold is in the same phase that Oil was in 2008: a speculative market in which sharp rallies or corrections can occur at any time.
Gold slides more than $20 in two days Gold prices have taken a dive this week as investors rekindle their faith in the stock market and the almighty dollar. "There are a lot of people throwing in the towel as gold moved below $1,100 for the second day running," said Adam Klopfenstein, senior market strategist at commodities brokerage firm Lind-Waldock. "I do think the bull case for gold is going to be on hold for the rest of the year."
Gold Falls as Dollar Rises, More Central Banks "Will Follow India's Example" Says Marc Faber THE PRICE OF GOLD slipped to a new 7-week low for US investors early Tuesday, dropping through yesterday's low at $1090 per ounce as world stock markets rose and government bonds fell. The US Dollar rose for the ninth time in 13 sessions on the forex market, hitting its best level against the "safe haven" Japanese Yen since the start of November. "There's some speculative demand for gold," said Wolfgang Wrzesniok-Rossbach, sales director at Germany's Heraeus refinery, to Reuters earlier. "There's also physical demand, not so much in Europe but definitely in Asia."
Gold long term bullish, short run correction likely Gold is in a clear bullish trend primarily because of the governments inability to match up the equation of earnings with spending. This is not a local phenomenon but a global one. . . . . . . . . Printing more currency leads to fall in intrinsic value of money thereby we pay more for same level of goods & services. US has been involved in printing dollar since a decade to match its rising deficit which in turn led to increase in money supply leading to rise in prices right from commodities to housing to almost every asset class. Seeing an ever rising opportunity Investment banks and financial institutions relaxed risk norms to earn better profitability and thus exposing themselves to the vulnerable world of financial derivatives, the outcome of which is known to all of us.
Inflation, Here We Come
Gold Fluctuates After Falling Past Two Days on Dollar Outlook Gold fluctuated in early trading in Asia after falling the past two days as a rebounding dollar reduced demand for the precious metal and volumes wane as investors prepare for year-end holidays. The Dollar Index, a six-currency gauge of the greenback’s value, is trading near its highest level in more than three months, on signs of a recovery in the world’s largest economy. Sales of existing U.S. homes reached their highest level in almost three years last month, a report showed yesterday.
Central Banks to step up gold reserves: Marc Faber The Gold Price slipped to a new 7-week low for US investors early Tuesday, dropping through yesterday's low at $1090 per ounce as world stock markets rose and government bonds fell. The US Dollar rose for the ninth time in 13 sessions on the forex market, hitting its best level against the "safe haven" Japanese Yen since the start of November. "There's some speculative demand for gold," said Wolfgang Wrzesniok-Rossbach, sales director at Germany's Heraeus refinery, to Reuters earlier. "There's also physical demand, not so much in Europe but definitely in Asia." "The metal [on Monday] broke last week's low of 1095 and the 4-month rising trend line at 1097," says a technical note from bullion bank Scotia Mocatta.
Russian central bank buys 30 tonnes of gold Adding another reason for the gold prices to shoot up, Russia’s central bank has bought another 30 tonnes of gold for $1 billion as part of its efforts to increase its gold reserves. The money will be used to help ease the crisis in the country’s budget. The cash slightly reduces Russia’s deficit — around 7.3 per cent of gross domestic product this year. The Central Bank is the only government body mandated to engage in foreign commodity and currency trade. The deal marks the first large sale of gold from Russian coffers since the collapse of the Soviet Union. Russia is weathering its worst financial crisis in a decade.
A Case for the Inflation Camp One of the more awkward situations facing Austrian economists today is that we are divided on whether to expect price deflation or inflation. Although it's good that we publicly disagree with each other — rather than bury our disagreements to reassure the lay public that we know what we're talking about — it's nonetheless unsettling that our prognoses for the US dollar are so divergent.
Gerald Celente on www.financialsense.com with Jim Puplava
Third Quarter US GDP Comes In Significantly Lower Than Original Estimates Could we have expected anything else from the Madoff nation, a country whose major export is fraud, and predominant industry a large scale variation of Liar's Poker? GDP in the third quarter is significantly weaker than the results reported in late October. And even the positive value that remains is probably overstated by a chain deflator that underestimates the monetary expansion by the Fed. Ironically it is ineffective because it is so heavily applied to a broken and outsized banking model rather than to the real economy.
NIA's Top 10 Predictions for 2010 The National Inflation Association - http://inflation.us is pleased to announce its top 10 predictions for 2010.
We will learn the 2009 holiday shopping season was a bust.
We will see a major decline in the Dow/Gold ratio.
We will see a sharp decline in the Gold/Silver ratio.
The U.S. Dollar Index will see short-term bounce, then huge crash.
Oil will rise back above $100 per barrel.
There will be a move towards a Libertarian third-party.
Peter Schiff and Rand Paul will both win Republican primaries and be elected to U.S. Senate.
Large 'End the Fed' Protests.
Major Food Shortages.
Paul Volcker Resigns.
Did the Fed Monetize by Stealth? I don’t know if he does those charts himself but they are a work of art! Like some sort of marvellous abstract expressionism, reminds me a bit of Rothko with hard lines. See how the colours are balanced so the ones at the back look like they are behind, that part is reminiscent of Paul Klee, a masterpiece! Mm…now I wonder- what does that big red blob signify? Uh huh…that’s Mortgaged Backed Securities! Now let me get this straight, those are things that the Fed has either purchased or took over as collateral in return for shovelling cash out of the discount window to banks like Goldman Sachs who, since they are now a “regulated” bank (if that’s not a contradiction in terms), are now eligible to feed at that tough.
Why the Fed will fail The set-up for a deflationary collapse - December 2009 Most investors are positioning themselves for an expected up-tick in inflation driven mainly by "quantitative easing" and the expectation that the Fed will not be able to withdraw liquidity later on. Inflation assets are currently being bid up while deflation assets are being bid down. What are deflation assets? These would include shorts, bonds and cash. The covering of shorts only adds to the upward thrust of inflation assets. The effect on price of a sell off in bonds is fairly straight forward (price is bid down and yields go up).
More bailed-out community banks failing to pay U.S. dividends A growing number of community banks that got federal bailouts are failing to pay quarterly dividends they owe to the government, including two banks that got aid after congressional intervention on their behalf, according to data released Monday by the Treasury Department. Fifty-five banks failed to make dividend payments in November, a 67 percent jump over the number of delinquent banks three months earlier.
Red Ink Watch: Red Ink Flowing
The Fed is a Fascist Cartel No one in the freedom movement today disputes that the Federal Reserve is the source of many of our economic woes. Where disagreement arises is in defining the precise nature of the Fed and the source of its capacity to create the harm it does. Many who support gold money and free enterprise claim that the Federal Reserve is a "private corporation" run by capitalist mega-financiers. This I believe to be mistaken.
Bernanke’s Confirmation Support Runs 3-1 in Favor in Senate U.S. senators are backing Federal Reserve Chairman Ben S. Bernanke for a second term by a 3-to-1 margin, based on a count of 77 lawmakers by Bloomberg News. Bloomberg today interviewed 53 senators who aren’t on the Banking Committee, which voted 16-7 on Dec. 17 to recommend Bernanke’s nomination to the full Senate. Twenty-one lawmakers said they are inclined to vote for Bernanke, while four said they would oppose the central bank chief, giving Bernanke 37-12 support so far for a four-year term starting Feb. 1. Another 28 said they’re undecided or declined to comment.
Why the Fed Will Be Sidelined in 2010 The release of the Non-Farm Payroll Report for November along with the latest inflation data from the Bureau of Labor Statistics placed further into question the Federal Reserve’s free money policy. The spate of less bad news on the economy and increases in certain price levels has brought some of the bond vigilantes back from hibernation, while the cacophony from the hard-money guys (me chief among them) to raise interest rates is growing yet louder. But unfortunately in my opinion, the Fed will be watching the economy from the bench for nearly all of 2010. The reason is simple; the central bank already has scheduled a tremendous de facto tightening which will occur at the end of the first quarter. As most of us already know, the Fed will conclude its planned purchases of $1.25 trillion in Mortgage Backed Securities (MBS) in March. The problem is that according to the St. Louis Federal Reserve, Mr. Bernanke is responsible for 90% of the purchases of all newly issued agency MBS. That means the Fed is the securitization market for mortgages.
Gerald Celente Blacklisted Radio with Michael Vail 16 Dec 2009
The Long Decline of the U.S. Economy The official position on the cause of the current financial downturn is that it was caused by the reckless practices of financial institutions and the failure of regulatory bodies, and it is likely that these were the proximate causes, but they were not the ultimate cause. Americans, unfortunately, are rarely willing to search for ultimate causes or do anything about them when they are found.
An Organ Grinder's Monkey Couldn’t have Done Any Worse As we look back and this year comes to an end we find two plus years of failure. Even government admits to 1-1/2 years of negative growth - a sorry record after having poured trillions of dollars into the economy. The recent 3rd quarter results supposedly broke that record. If it did it was the result of government stimulus and Fed monetization. If you look back further you will find a stock market that rallied 54% just to reflect the highs of 1999. House prices have decline to 1990s levels as well. Both markets, which were bubbles, next year will fall again. Americans opened their markets to products of Communist China’s slave labor and China became the world’s biggest exporter. Via free trade, globalization, offshoring and outsourcing, transnational conglomerates have stolen America’s destiny and handed it to China. This is what corporatist fascism is all about.
The Recession Is Over but the Economic Depression Has Just Begun Edward Harrison writes: This is an updated version of a post I wrote about two-and-a-half months ago over at Credit Writedowns. When I wrote it, I had been looking for bullish data points as counterfactuals to my bearish long-term outlook. I found some, but not nearly enough. Early this year, I wrote a post “We are in depression,” which called the ongoing downturn a depression with a small “d.” I was optimistic that policymakers could engineer a fake recovery predicated on stimulus and asset price reflation – and this was bullish for financial shares if not the broader stock market. But, we are witnessing temporary salves for a deeper structural problem.
Charles Goodhart warns of return to recession as bank lending fallsThe contraction of bank lending and the M3 money supply in the US and Europe over recent months has become a serious concern and raises the risk of a slide back into recession, according to one of Britain's most celebrated economists. Professor Charles Goodhart, a former top official at the Bank of England now at the London School of Economics, said policymakers have neglected the flashing danger signal of the monetary data. "What has happened to all the monetarists? Growth in money holdings and lending has plummeted. Thirty, or 40, years ago they would have been forewarning doom and destruction at this juncture, and casting anathemas at the authorities," he wrote in a consultant report for Morgan Stanley. "There is a danger that markets and authorities become obsessed about the fiscal implications of the crisis at a time when the real worries should still focus on private sector access to credit and money."
Small Banks Speak Out
Small banks, big problems The New Year is shaping up to be a rough one for community lenders. Dozens if not hundreds of small banks figure to disappear in 2010, as a weak economy and regulatory pressure lead to more failures and mergers. Despite this reality, President Obama met Tuesday with eight community bank executives, including the chiefs of German American Bancorp (GABC) and Monadnock Bancorp. Obama hailed the bankers as playing a "vital function," and cited "enormous opportunities" for economic growth if they keep lending.
Is the Free Money Party Over? Is the Fed’s free money, economic “reflation” party coming to an end? There are a lot of well-publicized signs it may be. Inflation is starting to tick up. The Labor Department reported this week its inflation measures rose at annual rates of 1.8% (CPI) and 2.4% (PPI). On the unemployment front, “good” news is just around the corner too. The Census Bureau has to finish up its search for 1.4 million temporary workers in the next few months. Also unemployment benefits will start expiring soon for many folks. Which means people will leave the work force or take whatever jobs they can get, both of which reduce the official unemployment rate.
Obama urges community banks to lend more President Obama brought a dozen community bankers to the White House Tuesday to press them to boost their lending to small businesses. The roundtable discussion with regional bank leaders was aimed at figuring out "how we move forward over the next year so that businesses are getting the capital that they need, and that we are starting to see people hired again," Obama said afterward.
Inflation vs Deflation
Why Is Obama Failing? "What's costing the president are three things: a laissez faire style of leadership that appears weak and removed to everyday Americans, a failure to articulate and defend any coherent ideological position on virtually anything, and a widespread perception that he cares more about special interests like bank, credit card, oil and coal, and health and pharmaceutical companies than he does about the people they are shafting." Drew Westen, Leadership Obama Style I think it is more that last of the three than anything else, and explains the others. Obama is captive to special interests, as are many of the key members of the Congress, and the Obama Administration, and the Federal Reserve. And I should add his two predecessors.
It explains why he cannot articulate a coherent ideological position and make it stick. Make no mistake, he is a smart and verbally adept individual, a gifted person intellectually. But he cannot adhere to principles because he has abandoned whatever principles he may have had to serve a variety of corrupting interests. And he appears laissez faire and distant because he is a figurehead, a household servant, and not in control.
Senate rewrites financial reform More than a year after the financial system blew up, efforts to build a better financial regulatory system are just now getting hammered out in the Senate. The big question is: Will it be tough enough? Eight senators have paired up, one from each political party, to negotiate behind closed doors parts of a regulatory reform package that could pass the Senate with a filibuster-proof 60 votes.
Global commodities prices will continue to move higher.
Emerging economies will outgrow their richer, more-mature counterparts.
And the countries that were stingy with their monetary and fiscal bailout plans will now reap the benefits; they will outpace the countries that slashed their interest rates to zero and allowed their deficits to soar.
One country is poised to profit from all three of those trends. What's more, the political worries that always seem to diminish its allure to investors are poised to recede, making this emerging southern hemisphere heavyweight one of the premiere profit opportunities for 2010. I'm talking about Chile.
What You Need to Know About Credit Reform
Opec indicates $70-$80 oil price target The Opec oil cartel on Tuesday gave the strongest indication yet it aims to keep oil prices at $70-$80 a barrel next year as it tries to support the economic recovery. Ali Naimi, Saudi Arabia oil minister and the group’s de facto leader, said the current oil price was “excellent” and added he would like to “keep it that way” in 2010. “Everyone needs this price: this is the future,” the minister said. As a first step, the cartel, which controls more than 40 per cent of the world’s oil output, agreed to leave leave its production levels unchanged at least until March.
US town halls find fresh angles to meet recession “Other duties as assigned,” reads the job description for municipal workers in Siloam Springs, Arkansas. Like the rest of the US, this town of 14,000 in the north-west of the state near the Oklahoma border is grappling with the fallout from a national recession. In response to plummeting revenue, David Cameron, the city administrator, has redrawn the roles of many employees. “Our [revenues from] sales taxes are down 11 per cent but we still need to pick up the trash,” Mr Cameron says. “I pay more money to less people and maximise their use with more tasks.”
U.S. Government Caught in a Lie on Bogus Jobs Data It’s no secret governments and our ruling elite (the bureaucracy) lie for their own benefit, and this has been increasingly prevalent for years now. Perhaps the most well known statistics in this respect center on the Employment Report, viewed as the central economic release of the month by most observers in that employment is seen as the core of the economy. In knowing this, and not forgetting governments lie to us in just about everything, it should be of no surprise then that John Williams of Shadow Government Statistics has been able to make a business out of reporting on irregularities and discrepancies in official statistics, where even though such fraudulent data was sufficient to spark a noticeable sell-off in commodities and precious metals last Friday via bogus jobs numbers, one knows this is more fiction than reality.
Nursing crisis looms as baby boomers age America could be facing a nursing shortage that will worsen exponentially as the population grows older. The problem: Baby boomers are getting older and will require more care than ever, taxing an already strained nursing system. America has had a nursing shortage for years, said Peter Buerhaus, workforce analyst at Vanderbilt University School of Nursing in Nashville, Tenn. But by 2025, the country will be facing a shortfall of 260,000 RNs, he said.
Ron Paul: Foreign Policy Ignored As the health care reform battle rages, Congressman Paul points out the need to also keep paying attention to developments in foreign policy and discusses recent events that could have long-term effects.
Health bill money for hospital sought by Dodd A $100 million item for construction of a university hospital was inserted in the Senate health care bill at the request of Sen. Christopher Dodd, D-Conn., who faces a difficult re-election campaign, his office said Sunday night. The legislation leaves it up to the Health and Human Services Department to decide where the money should be spent, although spokesman Bryan DeAngelis said Dodd hopes to claim it for the University of Connecticut. The provision is included in a 383-page series of changes to the health care bill that Senate Majority Leader Harry Reid, D-Nev., outlined Saturday. Scattered throughout are numerous items sought by individual lawmakers, many of them directing money explicitly to programs or projects in their home states.
Health Coverage for the Jobless Gets a Life Extension Congress gave recently laid-off workers a holiday gift of sorts. Last week it extended a subsidy to help them pay health-insurance premiums. Part of a massive defense bill that passed Saturday, the provision extends the 65% subsidy for six months, for a total of 15 months, and expands eligibility for the program an additional two months -- through February 2010. Without the extension, many unemployed workers faced the prospect of paying much higher premiums or losing coverage all together if they couldn't afford the cost of the coverage, provided through the Consolidated Omnibus Budget Reconciliation Act of 1985.
Health-Care Bill Clears Hurdle, Vote Set for Dec. 24 Democrats moved closer to passing the most sweeping health-care legislation in four decades, clearing their second major hurdle in the Senate and winning the endorsement of the American Medical Association. Democrats today won another party-line procedural vote, keeping the measure on the path to final Senate approval on Dec. 24. The last procedural vote is planned for tomorrow, and the Senate agreed to an 8 a.m. vote the next day for final passage.
Dropping the Bomb on Health Care As business owners undergo the yearly ritual of passing through eye-popping health insurance premium increases to their employees, it's easy to understand why any attempt at health insurance reform would be met with some degree of hope. Unfortunately, President Obama and his Democratic allies in Congress are about to take a very bad system and make it unimaginably worse. While ramming their new legislation through Congress, the Democrats have taken great pains to point out that they do not intend to "socialize medicine." But make no mistake, that's where we're headed. Even if some naïve centrists believe that their efforts have denied the Left a total victory, the practical implications of the current legislation sow the seeds for complete capitulation.
Nebraska Governor on Ben Nelson Deal
Marijuana-Reeking Tour Bus, Red Ferrari Are FDIC’s Crisis Booty The financial crisis that popped the real estate bubble and pushed U.S. bank failures to a 17-year high landed the Federal Deposit Insurance Corp. a rapper’s tour bus that reeked of marijuana. “It smelled so bad of pot after one tour that they had to completely pull out most of the interior and replace it,” said Jerry Jenkins, who sold the bus at Penny Worley Auctioneers after the FDIC acquired it in the collapse of an Atlanta bank. “By the time we got it, it was almost brand-new.”
Mortgages Delinquencies and In-Process Foreclosures Jump Americans' mortgage woes continued to get worse in the third quarter. Just 87.2% of U.S. mortgages were current in the third quarter, a decrease of 1.5% from the previous quarter, according to the OCC and OTS Mortgage Metrics Report released Monday. The Office of the Comptroller of the Currency and the Office of Thrift Supervision report covers 34 million loans totaling $6 trillion in principal balances, about 65% of the U.S. mortgage market. Serious delinquencies jumped to 6.2% of mortgage-servicing portfolios, an increase of 16.7% from the previous quarter. The number of prime borrowers in trouble continues to mount as 3.6% of prime mortgages were more than two months behind on payments, more than double the number in default a year ago.
The New Homeless: Shawn Martin at the Coalition for the Homeless of Central Florida Earlier this year, the National Alliance to End Homelessness estimated that 1.5 million people would be made homeless over the next two years as a result of the recession. In this series of profiles, DailyFinance speaks with some of the people who have fallen victim to layoffs, foreclosure, unforgiving creditors and plain old bad financial luck. Here are their stories. One day four months ago, Shawn Martin of Orlando, Fla., showed up for work at the restaurant where he was a cook -- and learned the business would close two days later. He never got his last paycheck. And with the economic downturn, he has yet to find another job.
The real Rain Man dies of heart attack in home town of Salt Lake City, aged 58 Kim Peek, the real Rain Man whose almost unimaginable powers of memory were coupled with severe disabilities and who inspired the Oscar-winning film role played by Dustin Hoffman, has died of a heart attack in his home town of Salt Lake City, aged 58. Peek has been called a "mega-savant" for his ability to memorise to the word up to 12,000 books, including the Bible and the Book of Mormon. He could read two pages in about 10 seconds – the right page with his right eye and the left simultaneously with his left eye.
Fired for Playing Fantasy Football, or for Being 26 Years Old? Your heart has to go out to Cameron Pettigrew, losing a job in this economy. The 26-year-old Fidelity Investments employee, along with three others, was fired in October for violating a company policy regarding gambling while participating in fantasy football, a virtual game that utilizes real-life statistics from football players to form fantasy teams and leagues. Employed at the company's office in Westlake, Texas, Pettigrew, who was the commissioner of his fantasy league, told the Fort Worth Star-Telegram that he knew his company had a policy against playing fantasy football while at the office, but it was poorly communicated and ignored by leadership. Pettigrew sent no fantasy football emails at work, he said. But investigators did find two instant messages that had related material.
Climategate: the corruption of Wikipedia (article from today's show with Mark Call) If you want to know the truth about Climategate, definitely don’t use Wikipedia. “Climatic Research Unit e-mail controversy”, is its preferred, mealy-mouthed euphemism to describe the greatest scientific scandal of the modern age. Not that you’d ever guess it was a scandal from the accompanying article. It reads more like a damage-limitation press release put out by concerned friends and sympathisers of the lying, cheating, data-rigging scientists Which funnily enough, is pretty much what it is. Even Wikipedia’s own moderators acknowledge that the entry has been hijacked, as this commentary by an “uninvolved editor” makes clear
Evangelicals, Faith Leaders Push Green Cause at Copenhagen Prominent evangelical leaders along with representatives of other religions are attending the United Nations summit on climate change in Copenhagen this week, where they aim to persuade global leaders to support cuts in carbon emissions. Among the evangelical figures present in Copenhagen are Richard Cizik, former vice president of the National Association of Evangelicals, and Jim Ball, a leader at the Evangelical Environmental Network.
Fitch warns that Britain and France risk losing their AAA rating Fitch Ratings has given its bluntest warning to date that Britain and France risk losing their AAA status unless they map out a clear path to budget discipline over the next year. Highlighting the "unpleasant fiscal arithmetic" facing states across the Old World, Fitch said that none of the "arguably" benchmark AAA states can safely rely on their top rating for much longer. Public debt in both Britain and France will reach 90pc of GDP by 2011, higher than the 80pc (net) level when Japan lost its AAA rating earlier this decade. Japan's error at the time was the failure to set out any serious plan to rein in spending, a lesson that the Europeans need to study closely. "The UK, Spain, and France must articulate credible fiscal consolidation programmes over the coming year, given the budgetary challenges they face in stabilising public debt. Failure to do so will greatly intensify pressure on their sovereign ratings," it said.
Ahmadinejad dismisses nuke deadline TEHRAN -- Iran's president on Tuesday dismissed a year-end deadline set by the Obama administration and the West for Tehran to accept a U.N.-drafted deal to swap enriched uranium for nuclear fuel. The United States warned Iran to take the deadline seriously. President Mahmoud Ahmadinejad also accused the United States of fabricating a purported Iranian secret document that appears to lay out a plan for developing a critical component of an atomic bomb.
Greece Too Corrupt To Be Bailed Out? “Greece is a beautiful, mountainous country with diverse natural scenery. Geographically, it occupies the majority area of the ancient Hellenic world at the southern part of the Balkan peninsula and the eastern part of the European community. It has a land area of 130,800 square kilometers. Its coastline extends for 13,676 kilometers, with 227 inhabited islands that rest on a sea of amazing clarity. Historical monuments abound, making the land a virtual museum and attracting millions of tourists every year. It has a population, according to the 2001 census, of 10,964,020, and a per capita GDP of $30,681. It boasts the largest ownership of shipping tonnage (tanker and cargo) in the world, with a total dwt of 141,931 thousand. It owns some of the largest natural resources in specific minerals in the EU, such as bauxite, magnetite, nickel, and perlite. There are also has anhydrite, gypsum., bentonite, gold. cement, magnesium compounds, pumice, and of course marble. In addition it has large flocks of livestock and fish stock. The abundant sun shine and the winds make it potentially self sufficient in clean energy.
How do I know China wrecked the Copenhagen deal? I was in the room As recriminations fly post-Copenhagen, one writer offers a fly-on-the-wall account of how talks failed Copenhagen was a disaster. That much is agreed. But the truth about what actually happened is in danger of being lost amid the spin and inevitable mutual recriminations. The truth is this: China wrecked the talks, intentionally humiliated Barack Obama, and insisted on an awful "deal" so western leaders would walk away carrying the blame. How do I know this? Because I was in the room and saw it happen. China's strategy was simple: block the open negotiations for two weeks, and then ensure that the closed-door deal made it look as if the west had failed the world's poor once again. And sure enough, the aid agencies, civil society movements and environmental groups all took the bait. The failure was "the inevitable result of rich countries refusing adequately and fairly to shoulder their overwhelming responsibility", said Christian Aid. "Rich countries have bullied developing nations," fumed Friends of the Earth International.
Snarky Disinformation About Gold and the Nature of Money We're going to review your 2010 asset allocation strategy in a roundabout way by exposing some of the snarky disinformation being put out by the mainstream media about gold, courtesy of Michael Pascoe at The Age. First though, let's just check to see that markets are still functioning normally. That is, let's just check to see that heavy government intervention is supporting house prices (by providing guarantees to home lenders), GDP growth (by spending money on infrastructure), and disguising the true state of the labour market (by lying about how many people are out of work). Yep. Situation normal, all fouled up. The oil price, the U.S. dollar, and bond yields were all up on bullish industrial production figures in the U.S. The "recovery" meme is taking a tenuous hold. Stocks were down. Because why would stocks rise if the economy were recovering?
The Inflation Bomb Hiding On The Fed's Balance Sheet However much it infuriates people like Paul Krugman to hear analysts warn about inflation while the economy is still sputtering along joblessly, there is good reason to worry about the ability of the Federal Reserve to prevent the massive build up of the monetary base from resulting in out of control inflation.
The Small Business Carnage That Shows The Real Reason Jobs Aren't Being Created In America While some parts of the U.S. economy show early signs of an economic rebound, for small business, the situation remains extremely tough. Latest December small business conditions reported by the National Federation of Independent Business makes this very clear. None of the optimism shown by major U.S. corporations can be found.
Bigger Than Watergate ACORN critic Rep. Steve King (R-Iowa) is mystified that both the Democratic-controlled Congress and the Obama administration aren't doing much about the tax-subsidized organized crime syndicate ACORN even as evidence of its wrongdoing continues to pile up. In an exclusive interview, the House Judiciary Committee member describes the ACORN saga as "the largest corruption crisis in the history of America." "It's thousands of times bigger than Watergate because Watergate was only a little break-in by a couple of guys," said King. "By the time we pull ACORN out by its roots America's going to understand just how big this is."
Bernanke Tightens the Noose Brace Yourself for a Hard Landing Ben Bernanke has been a bigger disaster than Hurricane Katrina. But the senate is about to re-up him for another four-year term. What are they thinking? Bernanke helped Greenspan inflate the biggest speculative bubble of all time, and still maintains that he never saw it growing. Right. How can retail housing leap from $12 trillion to $21 trillion in 7 years (1999 to 2006) without popping up on the Fed's radar?
More bailed-out community banks failing to pay U.S. dividends A growing number of community banks that got federal bailouts are failing to pay quarterly dividends they owe to the government, including two banks that got aid after congressional intervention on their behalf, according to data released Monday by the Treasury Department. Fifty-five banks failed to make dividend payments in November, a 67 percent jump over the number of delinquent banks three months earlier.
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Banks with political ties did best with bailouts, study concludes NEW YORK -- U.S. banks that spent more money on lobbying were more likely to get government bailout money, according to a study released on Monday. Banks whose executives served on Federal Reserve boards were more likely to receive government bailout funds from the Troubled Asset Relief Program, according to the study from Ran Duchin and Denis Sosyura, professors at the University of Michigan's Ross School of Business. Banks with headquarters in the district of a U.S. House of Representatives member who serves on a committee or subcommittee relating to TARP also received more funds.
Fed's approach to regulation left banks exposed to crisis Foreclosures already pocked Chicago's poorer neighborhoods but the downtown still was booming as the Federal Reserve Bank of Chicago convened its annual conference in May 2007. The keynote speaker, Federal Reserve Chairman Ben S. Bernanke, assured the bankers and businessmen gathered at the Westin Hotel on Michigan Avenue that their prosperity was not threatened by the plight of borrowers struggling to repay high-cost subprime loans.
Serious U.S. mortgage delinquencies up 20 percent Serious delinquencies among U.S. prime mortgages rose nearly 20 percent in the third quarter from the prior quarter, as the percentage of current and performing mortgages fell for the sixth consecutive quarter, banking regulators said on Monday. The report by the Office of Comptroller of the Currency and the Office of Thrift Supervision, which are part of the Treasury Department, covered about two-thirds of all U.S. mortgages.
Dreading our future I am a baby boomer, which is to say my life has coincided with turbulent and awesome times. From the Cold War to Vietnam, from Watergate to Monicagate, through the horrors of 9/11 and the stunning lifestyle advances, my generation's era has been historic and exciting. Yet for all the drama and change, the years only occasionally instilled in me the sensation I feel almost constantly now. I am afraid for my country. I am afraid - actually, certain - we are losing the heart and soul that made America unique in human history. Yes, we have enemies, but the greatest danger comes from within. Watching the freak show in Copenhagen last week, I was alternately furious and filled with dread. The world has gone absolutely bonkers and lunatics are in charge.
Nervous money will limit gold's downside risks A more sober assessment of gold's likely price patterns suggests upwards movement may be limited for the time being, but downside risk is also relatively muted. There is no shortage of advice for the gold investor available on the internet and much of it is wildly contradictory. There are those predicting a crash as the price has come off the boil, while others predict heady heights ahead. You pay your money and you take your choice the expression used to be - but now most of the advice comes thrust at you for free - although in many cases it comes with exhortations to buy some newsletter or investment service or other.
The Coming Shortage Of All The World's Most Important Industrial Metals There's been a a lot of discussion lately about so-called peak gold. But as gold's fans will tell you gold isn't a commodity, it's a form of money. Gold isn't actually intended to be used in anything. But what about metals that are meant to be used in industrial purposes.
Salbuchi - 2010 Forecast: Transition from Globalization to World Government -2 of 3
The Dollar, Euro and Gold What we warned of seems to have come to pass. Since publishing the two articles titled “The Gold Bull; time for a breather or? And “Bonds and Gold”, gold has shed almost 127 dollars. This is but a small drop in the bucket in comparison to the gains Gold has made in the past few months. We are not against gold, in fact, we are long term bulls, but we cannot simply ignore the short term developments and blindly hope that Gold will race higher. No market, not matter how strong it is can rally upward indefinitely without pulling back and Gold is no exception to this rule. Thus what we have said so far in our previous articles and what we have to say now might spoil the current party, but that’s life; all parties must end in order to make way for new ones down the line.
Gold Trends, Hot Commodities and the Major Indexes, What’s Next? Gold has been leading the market for almost a year. Last week gold and gold stocks were trading at support looking ready to bottom but as you will see in my charts below, both broke support on heavy volume. With gold now underperforming the stocks market, I get the feeling we could see the broad market top. Topping is a process and after this strong climb I figure it will be choppy (tough to trade). Much like the price action on the Dow and S&P500 the past month, but this time it will be on a larger scale.
Christmas Comes Early For Precious Metals Buyers Interestingly enough the long inverse correlation between the large US markets and the US dollar has seemingly broken down. Since March 2009 the dollar has been in a protracted downtrend while the markets have risen steadily. The US dollar broke out of the downtrend this past week while the US markets did no such thing technically. Their moves were similar on a percentage basis, but night and day technically. We shall see if this correlation has indeed broken down once the new year is rung in. Right now, and for the rest of the year, trading will be thin. That can exaggerate moves either way, without really having any significance.
Chinese Withdraw Offer For Nevada Gold Concern company controlled by the Chinese government has withdrawn its bid to buy majority control of a small Nevada gold mining operation after Obama administration officials, pointing to a nearby Navy air station, raised national security concerns about the deal. The decision by the company, Northwest Nonferrous International Investment Company, averts a showdown over its proposed $26 million purchase of a 51 percent stake in the Firstgold Corporation. The Treasury Department was prepared on Monday to recommend that President Obama block the sale.
Gold Price Plummets While Gold Bears and Gold Bulls Battle The gold price plummeted $19.43 to $1,092.57 and gold mining stocks followed as continued strength in the U.S. dollar sent the prices of gold-related investments lower. The U.S. dollar has appreciated as short dollar trades are unwound in anticipation of brighter growth prospects for corporate America and an eventual end to the crisis-driven monetary policy of the Federal Reserve. This has been apparent in the price action in the bond market as the 10-year yield reached 3.69%, its highest level in four months.
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Gold investment demand rises as prices fall The recent fall in Gold Prices could result in an upturn in the number of people investing in the yellow metal as they look to capitalize on cost reduction. That is the opinion of Stephen Platt, a commodity analyst at Archer Financial Services Inc. in Chicago, who made his comments following futures dropping below $1,100 on Friday for the first time since November 10th. He said: "Gold prices have fallen down to a level where you might start to revive investment demand. There's a lot of reallocation going on.
Gold price may pull back to $1000 It was not so long ago that I was writing about the weak US dollar and how it was one of the main reasons why the gold price was increasing. But, since around the middle of November we have seen resurgence in the value of the US dollar and now this reversal in trends is putting some pressure on the gold price. During the last few weeks the US dollar has gained around 5%, and during last week, the Euro dropped sharply against the greenback on news that Greece was downgraded by a second credit rating agency. Just two days after the Greek government unveiled measures to trim its debt by cutting 10% in public spending, S&P downgraded Greece's government debt rating from A- to BBB+, reflecting their opinion that the measures are "unlikely...to lead to a sustainable reduction in the public debt burden."
Gold prices may fall as stronger dollar curbs demand LONDON -- Gold, little changed in London, may decline as gains in the value of the dollar curb demand for the metal as an alternative investment. The dollar rose as much as 0.4 percent against the euro to trade near a three-month high amid signs that the world's largest economy is gaining traction. Last week, gold fell for a third straight week, touching the lowest level since Nov. 6 as the U.S. currency rebounded.
Gold prices fall as New Year nears The weekend brought our few additional gold buyers overseas, as Friday’s better than 1% gain in gold prices dampened the bargain-hunting spirits. At the start of the new week, the best thing that could be said about the metals, the dollar, and other markets was that steadiness was manifest. Whether or not such calm is of the typical variety that one sees prior to a little storm of volatility (exacerbated by thinness in participation), remains to be seen.
Mint reveals location of missing gold OTTAWA -- More than $3-million in government gold was unwittingly sold off at a fraction of its value as refinery slag, while $8-million more was miscounted and never left the Royal Canadian Mint, the Crown corporation revealed on Monday in a full accounting of how it lost track of a fortune in gold for a year. A series of miscalculations and blunders in the mint's gold refinery dating back to 2005 were responsible for 17,500 troy ounces -- a system of weights for precious metals -- of gold going missing from the mint's Ottawa inventory count last October, the mint announced in a 12-page report. That's the equivalent of almost 44,400-ounce bars, worth more than $20-million in today's prices.
Russia transfers R7.65 billion worth gold to central bank Russia's Finance Ministry has sold 30 metric tons of gold to the country's Central Bank for $1 billion (R7.65 billion), an official said Monday, saying the cash will be use to help ease the crisis in the country's budget. The cash slightly reduces Russia's deficit - reportedly around 7.3 percent of gross domestic product this year. The Central Bank is the only government body mandated to engage in foreign commodity and currency trade.
Silver's smart run to continue in 2010 Till now, market analysts have been going ga-ga over the rise and rise of gold prices but silver has been shining better than gold in 2009 and this trend is set to continue in 2010 also. Driven by demand from auto sector for silver-zinc batteries which are used in 'smart automobiles' and an array of portable electronic devices, the silver's shining story will continue in the coming year also.
interest rates, death tax, health care
Can the Dollar Rally Continue? Doing God's work Everyone is talking about the strength in the dollar now and reflecting on what it means for gold. Many are expressing surprise at how fast it jumped up. That is why I try to convey to you a sense of urgency when I speak of stop loss orders. When the Fat boys pull their nets in, they don't want any fish getting out. Always have a stop loss order in place, I put my stop loss in before I place my buy order. Think back to about two weeks ago. Do you remember how the media and every analyst was talking about the demise of the dollar. It is easy to succumb to that drum beat and join the lemmings on their march over the cliff. Remember how strong the pull was, it is a good lesson.
Dollar Drives Down Gold Prices Gold prices get pounded by a stronger U.S. dollar. Gold continues to stay in a tight trading range as any U.S. dollar strength and subsequent weakness in gold prices is offset by bargain hunting. Investors seem torn between an optimistic global economic recovery, which would increase risk appetite for assets like gold, and pessimistic credit woes, which would buoy the U.S. dollar and pressure precious metal prices.
Dollar Trades Near Three-Month High on U.S. Economy, Rate View The dollar traded near the strongest level in more than three months against the euro on speculation the Federal Reserve will withdraw stimulus earlier than expected on signs the U.S. economic recovery is gaining momentum. The greenback reached the highest level in more than a month against the yen before reports this week forecast to show increases in U.S. personal spending and home sales. The Japanese currency fell after Bank of Japan Governor Masaaki Shirakawa said he will “persistently” keep policy rates at “virtually zero” and the yield spread of U.S. debt over Japanese bonds reached the widest in more than a year.
U.S. recovery expectations drive dollar up, gold down Optimism about the economic recovery Monday encouraged investors to buy stocks and dump U.S. Treasurys, while gold prices fell as investors expected the dollar to remain firm in the beginning of 2010. Expectations that the U.S. economy is reviving drove the dollar to more than a six-week high against the yen and kept it near its strongest level against the euro in three months. The price of oil rose on concerns about the security of energy facilities in Iraq and Nigeria, and as cold weather on both sides of the Atlantic increased fuel demand.
Dollar Would Benefit From a Double-Dip Risk, Barclays Survey Shows A “double-dip” recession is the most “underpriced” risk in financial markets and the dollar would benefit from a renewed bout of market turbulence, according to a Barclays Plc survey. More than 25 percent of the 724 customers surveyed said another downturn in the global economy is the most underestimated risk, the London-based bank said in a statement today. About 21 percent of the participants, including hedge funds, money managers, and central banks, ranked weak-than- expected Chinese growth as the second-biggest risk.
Rand Weakens as Dollar ‘Bounce’ Sparks Concern of Carry Unwind The rand declined to a six-week low against the dollar on speculation the interest-rate appeal of holding South African assets may diminish as the U.S. currency appreciates. The currency of Africa’s biggest economy dropped for a third day, losing as much as 1.6 percent to 7.6869 per dollar, the weakest level since Nov. 5. The rand traded at 7.6853 by 5:26 p.m. in Johannesburg, from 7.5646 on Dec. 18. “When the dollar was weakening a lot of investors borrowed cheaply in dollars to fund carry trades in other currencies,” said John Cairns, head of foreign-exchange research at Rand Merchant Bank in Johannesburg.
US and European stocks advance as dollar stabilises US and European bourses burst higher on Monday, damping demand for haven assets, after the dollar stabilised and Asian markets put in a mixed performance. Those traders from Frankfurt to London and across to New York that were able to overcome the chilly weather challenge and make it to their terminals seemed flushed with festive cheer and determined to end the year on a positive note.
Treasury 10-Year Yields Reach 4-Month High on Inflation Bets Treasuries dropped, pushing 10-year yields to the highest level in four months, on prospects the U.S. government’s final figure for third-quarter gross domestic product will signal accelerating inflation. The yield curve, the gap between shorter- and longer-term debt used as a barometer for the economy, widened to a record as investors bet an accelerating recovery will fuel inflation and hurt demand for unprecedented government debt sales. Government securities extended yesterday’s losses, the largest drop since August, before the U.S. tomorrow announces the sizes of two-, five- and seven-year auctions next week.
Stiglitz Says U.S. Should Prepare for Second Stimulus Nobel Prize-winning economist Joseph Stiglitz says the U.S. needs to prepare for a second stimulus package as there’s a “significant” chance growth will slow in the second half of 2010. The world’s largest economy isn’t likely to expand fast enough to create jobs for new entrants into the labor force or compensate for increases in productivity that will reduce demand for workers, Stiglitz told reporters in Singapore today.
Stiglitz warns US economy may contract in second half of 2010, calls for more stimulus Nobel Prize-winning economist Joseph Stiglitz warned there's a "significant" chance the U.S. economy will contract in the second half of next year, and urged the government to prepare a second stimulus package to spur job creation. "The likelihood of this slowdown is very, very high," Stiglitz told reporters in Singapore. "There is a significant chance that the number will be in the negative range." Stiglitz, a professor at Columbia University, called on Washington to make more funds available to state governments who face a drop in tax revenue. The U.S. economy, the world's largest, must grow at least 3 per cent to create enough jobs for new entrants into the labour force, he said.
U.S. senators propose reinstating Glass-Steagall Act U.S. Senators John McCain and Maria Cantwell proposed reinstating the Depression-era Glass-Steagall Act that split commercial and investment banking to rein in Wall Street firms in response to the financial crisis. "Under our proposal, too-big-to-fail banks would be forced to return to the business of conventional banking, leaving the task of risk taking or management to others," McCain, an Arizona Republican, said at a Washington news conference. A former bank regulator said splitting up companies is "crazy."
Bankers fear sovereign risk in 2010 In normal circumstances, the question of how banks manage their collateral deals with other financial players is not of interest to ordinary mortals. However, these are not normal times. In the past couple of years the risk managers of the world’s largest banks have been forced to confront a series of shocking situations, as seemingly remote events, or “tail risks” as they are dubbed, have come to pass.
NY Fed: Federal Reserve Will Indeed Be Able to Raise Rates A new paper by the Federal Reserve Bank of New York offers some empirical support to the view among senior Federal Reserve officials that they do have the technical means to raise interest rates when needed, despite some naysayers who caution there is too much money in the system to do so effectively. The Fed has pumped $1 trillion into the banking system in the past year, which in theory means all of that cash floating around in the financial system puts downward pressure on bank lending rates, interfering with the Fed’s ability to raise rates as the economy improves to fend off inflation. But there is a way around it: The Fed can pay banks interest on bank reserves of unused cash.
Fed's Evans says low inflation gives Fed breathing room Charles Evans, president of the Chicago Federal Reserve Bank, said on Monday he expects the U.S. economy to grow 3.0 to 3.5 percent over the next 18 months, but that low inflation will give the central bank room to keep monetary policy easy for an extended period. Next year "will definitely be a better year" than 2009, Evans told business television channel CNBC in an interview, but added he expects the jobless rate to creep up further. Evans said he expects the U.S. jobless rate -- currently at 10 percent -- will edge up "a few tenths" before coming down. He said he sees the jobless rate peaking in the spring or summer of 2010.
Lawmakers' OK of defense bill comes at a price President Obama won most of his spending fights with Congress over the Defense Department this year, but it cost several billion dollars of taxpayers' money to buy legislative peace. The $636 billion defense spending bill that Mr. Obama signed into law Monday fully funds his plans for the F-35 Joint Strike Fighter, but Congress added $465 million for an alternate F-35 engine that the Pentagon says it doesn't need or want.
Web retailers extend shipping deadlines Retail Web sites have bumped back deadlines and offer free express shipping after weekend snowstorms kept holiday shoppers home in large areas of the East Coast. Amazon.com has extended the cutoff for standard shipping by one day through Monday. Macy's Web site is offering free shipping through Monday, and J.C. Penney through Tuesday.
The US Misery Index Misery Index (11.84) = Unemployment rate (10) + Inflation rate (1.84) The misery index was initiated by economist Arthur Okun, an adviser to President Lyndon Johnson in the 1960's. It is simply the unemployment rate added to the inflation rate. It is assumed that both a higher rate of unemployment and a worsening of inflation both create economic and social costs for a country. A combination of rising inflation and more people out of work implies a deterioration in economic performance and a rise in the misery index.
Joblessness eats into fast-food sales Fast-food restaurants finally feel slowdown, despite popularity of dollar menus McDonald's, Burger King, Hardee's, other chains continue to emphasize value In 2008, the steep recession dealt only a glancing blow to the fast-food industry. In fact, an inexpensive burger and fries was downright popular. No wonder McDonald's stock was one of only two members of the Dow Jones industrial average that posted a gain last year. But in 2009, economic ugliness caught up with fast food. Customer traffic steadily declined through the year, and by the fourth quarter even McDonald's, which had held up best against the deluge, was experiencing a sales decline in U.S. outlets open at least 13 months. This year, the Golden Arches' stock has been a clear laggard, ranking near the bottom of Dow components.
Small business bankruptcies rise 81% in state With credit tight and consumers still pinching their pennies, many business owners find they can't go on. The Obama administration's new plan to give a boost to small businesses reflects continued trouble in that sector, which is facing new failures even as much of the nation's economy is stabilizing. As credit lines have shrunk and consumers have cut back on spending, thousands of small businesses have closed their doors over the last year. The plight of struggling firms has been aggravated by the reluctance of banks to lend money, said Brian Headd, an economist at the Small Business Administration's office of advocacy.
States' jobless funds are being drained in recession The recession's jobless toll is draining unemployment-compensation funds so fast that according to federal projections, 40 state programs will go broke within two years and need $90 billion in loans to keep issuing the benefit checks. The shortfalls are putting pressure on governments to either raise taxes or shrink the aid payments. Debates over the state benefit programs have already erupted in South Carolina, Nevada, Kansas, Vermont and Indiana. And the budget gaps are expected to spread and become more acute in the coming year, compelling legislators in many states to reconsider their operations.
Michigan wants land banks to spur redevelopment State seeks $290M from feds to fix up blighted properties Michigan is poised to launch an ambitious plan to take control of thousands of foreclosed, blighted and vacant properties statewide through land bank programs, and hopes to get $290 million in federal funds to accomplish it. The state leads the nation with 29 land bank authorities, which are quasi-public agencies whose aim is to spark commercial and residential development in struggling areas. Most states have one or two.
U.S. Commercial Property Falls to Lowest in 7 Years Commercial property values in the U.S. declined in October to the lowest level in more than seven years as unemployment reduced demand for apartments, offices and retail space. The Moody’s/REAL Commercial Property Price Indices fell 1.5 percent in October from September to the lowest since August 2002. Prices were down 36 percent from a year earlier and are 44 percent below the peak in October 2007, Moody’s Investors Service Inc. said in a statement.
Modified mortgages falling into trouble Many borrowers who were helped are finding themselves falling behind Homeowners who get a substantial cut in their monthly mortgage payments still stand a good chance of falling behind again, a report by two federal regulators says. Nearly 40 percent of homeowners who received a loan modification that reduced monthly loan payments by 20 percent or more were at least two months late again within a year, the Office of the Comptroller of the Currency and the Office of Thrift Supervision said Monday.
Modified loans are quickly in default Borrowers fall behind in year One of the biggest challenges to ending the foreclosure crisis is this: A surprising number of homeowners who get their monthly payments reduced fall behind again within a year. When borrowers get into financial trouble, lenders have several ways to help. They can offer grace periods, longer repayment schedules, lower interest rates or reduced balances.
Lower loan payments = fewer redefaults for homeowners It should come as no surprise that fewer troubled borrowers will redefault if their loan payments are lowered in a mortgage modification. Now, there's federal data that shows this is true. Only 18.7% of borrowers who had their loans modified in the second quarter were delinquent three months later, according to a banking regulators' report released Monday. This compares to 30.7% of borrowers in the first quarter. Why the sharp drop in redefaults? Regulators attribute it to their March directive that urged financial institutions to make sure the loan modifications they do are affordable and sustainable.
Apple TV-Service Proposal Gets Some Nibbles CBS Corp. and Walt Disney Co. are considering participating in Apple Inc.'s plan to offer television subscriptions over the Internet, according to people familiar with the matter, as Apple prepares a potential new competitor to cable and satellite TV. The proposed service by the maker of iPhones and iPod music players could, in at least some scenarios, offer access to some TV shows from a selection of major U.S. television networks for a monthly fee, according to people familiar with the discussions. Apple is pushing to complete licensing deals and hopes to introduce the service in 2010, some of those people said. It is unclear whether any networks have signed on yet.
Holiday Cliff Hanger: Stores Hope Last-Minute Shoppers Boost Season The storm that battered the East Coast over the weekend pushed already-delayed holiday shoppers even later, leaving retailers still uncertain about how well the season will end up. More than 40% of consumers still have holiday shopping left to do, nearly double the share of a year ago and the highest in 10 years, according to a survey taken over the weekend and released Monday by America's Research Group and UBS Investment Research.
Holiday shoppers use cash, miles -- anything but credit cards Shoppers are doing all they can to keep their credit cards in their wallets this holiday season. They're paying with cash or debit cards, using layaway plans and even exchanging frequent flier miles for cash to buy gifts. When they pull a credit card, it's at a store that doesn't charge interest for up to six months. A desire to stick to a budget and to avoid interest rates that have risen sharply have helped drive a marked shift away from credit cards. Banks have also reduced the amount of credit they're making available, even to low-risk clients.
Honda Plans New Plant in China BEIJING – Japan's Honda Motor Co., joining a host of global auto makers expanding production capacity in China, plans to build a new plant in the country to keep up with surging demand, according to two company executives. The executives said one of Honda's main joint ventures is getting close to using up the capacity of a plant it operates in the city of Wuhan in Hubei province. That venture, with Dongfeng Motor Group Co., is expected to sell a total of about 200,000 vehicles this year, and its sales are likely to exceed the plant's maximum capacity as early as next year, they said
In Ireland's deep budget cuts, an omen for a heavily indebted United States? DUBLIN -- Is this the ghost of America's future? Like other heavily indebted nations around the world, Ireland is borrowing vast sums from foreign investors to plug its budget deficit. Fearing that the country will buckle under the weight of so much debt, the Irish have an answer: Put the government on a diet.
ECB Member: We Will Not Save Greece The euro fell against the dollar Monday on heightened concerns about the huge debts of certain European countries, notably Greece. In London morning deals, the single currency fell to $1.4327 from $1.4343 in New York late on Friday. Against the Japanese currency, the dollar rose to 90.42 yen from 90.40 yen on Friday. The dollar was supported against the euro by recent upbeat US economic data that contrasted with gloomy news from Europe, where worries are growing that government debt problems may threaten an economic recovery, dealers said.
U.S.-Backed Climate Deal to Give Obama Sway in Senate The first offer by China and India to limit greenhouse gases in a global agreement may help U.S. President Barack Obama win over members of the Senate who don’t want to impose similar restrictions on American companies. The accord brokered by the three countries last week at United Nations talks in Copenhagen, while not legally binding, also calls for international verification. That addresses demands by senators who oppose UN rules that may hurt U.S. businesses’ ability to compete in the global marketplace.
Dubai World fails to seal deal on debt talks Dubai World today failed to reach agreement on a suspension of its $22 billion debt repayments after a day of talks with more than 90 banks. The state-owned conglomerate insisted that negotiations had been constructive and that the group will be ready to set out a comprehensive proposal for restructuring the debt “within weeks”. Instead, negotiations focused on information-sharing between the group and its creditors, with both sides stressing that the restructuring would be long and complex.
Obama on the brink of a dream as deals seal vote to back healthcare revolution President Obama’s vision of near universal healthcare took a big step closer to reality yesterday when his plans secured a watertight majority in the Senate. With Washington covered in 2ft of snow and some senators flown in on government jets to make sure they were there for the 1am roll call, all 58 Democrats and the chamber’s two independents held together to deliver the 60 votes needed to cut off Republican efforts to block the Bill.
Democrats: Stop screaming and pass health reform For progressives, the question on the health-care battle going forward is not whether they have a right to be angry but whether they can direct their fury toward constructive ends. The alternative is to pursue a temporarily satisfying and ultimately self-defeating politics of protest. Of course what has happened on the health-care bill is enraging. It's quite clear that substantial majorities in both houses of Congress favored either a public option or a Medicare buy-in.
AMA backs Senate health care bill The American Medical Association gave its support Monday to the Senate's latest health-care reform bill as a result of several key changes. Dr. Cecil B. Wilson, the group's president-elect, said the major changes to the bill -- which passed a key vote early Monday morning -- include more coverage for preventive and wellness care and more research to help patients and physicians make better decisions about treatment.
Castro: Obama seeking to topple Cuban communism HAVANA - Raul Castro gave the strongest signal yet his government's would-be honeymoon with the Obama administration is over, delivering a harshly worded speech Sunday charging that the White House endorses efforts to topple the island's communist system. Offering Cuba's first public acknowledgment of the arrest of an American contractor, Castro said the case shows "the United States won't quit trying to destroy the revolution and bring a change to our economic and social regime."
Colombia denies Venezuela's claims of spy drones Colombia has denied spying on Venezuela using an unmanned drone aircraft built with US technology. The allegation was made on Sunday by the Venezuelan President, Hugo Chavez. He claimed the drone aircraft flew over a Venezuelan military base "a few days ago" and took a number of photographs, before disappearing. But the Colombian defence minister said his country had no access to drones - and joked that perhaps Venezuelan soldiers saw Santa's sleigh instead.
Philippine volcano Mount Mayon 'may erupt within days' Scientists in the Philippines have raised the alert level for the volatile volcano Mount Mayon, amid fears of an imminent eruption. It is now at four out of a possible five, meaning a hazardous eruption "is possible within days". Level five is when a major eruption has begun. Scientists raised the level after the number of volcanic earthquakes more than doubled on Sunday. The cone-shaped volcano has already been emitting lava and ash for days.
Social unrest 'on the rise' in China Social unrest is on the rise in China, according to an analysis by a Chinese think-tank. The country is grappling with more acute social problems than ever before, according to a report from the Chinese Academy of Social Sciences. Crime is also up, despite a nationwide campaign to shore up social stability. Although continued economic growth has provided a greater number of jobs, China has seen more social conflict in 2009 than before.
Ahmadinejad denies Iran nuclear bomb trigger tests Iranian President Mahmoud Ahmadinejad has said a document apparently showing that Tehran plans to test a trigger for a nuclear bomb is a US forgery. In an interview filmed on Friday with ABC News, Mr Ahmadinejad said the report in the Times newspaper was "fundamentally not true". Mr. Ahmadinejad said criticism of Iran's nuclear programme had become "a repetitive and tasteless joke".
Pentagon must ready Iran options: top U.S. officer Diplomacy remains the best course for curbing Iran's nuclear ambitions but the Pentagon must have military options ready should President Barack Obama call for them, the top U.S. military officer said on Monday. In an annual assessment of the nation's military priorities, the chairman of the Joint Chiefs of Staff, Admiral Mike Mullen, offered no details about what those options might entail but said using force would have limited effect. "My belief remains that political means are the best tools to attain regional security and that military force will have limited results," Mullen wrote. "However, should the president call for military options, we must have them ready."
Iran faces 'significant new sanctions', US warns Iran faces "significant" new sanctions over its nuclear programme, according to US Defence Secretary Robert Gates. And he reiterated that all options - including possible military action - should stay on the table. Mr Gates was speaking to US troops during a visit to northern Iraq. His comments come a day after the US, Britain and France warned that Iran faced tougher sanctions unless it immediately complied with UN Security Council resolutions.
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There'll be nowhere to run from the new world government 'Global' thinking won't necessarily solve the world's problems, says Janet Daley There is scope for debate – and innumerable newspaper quizzes – about who was the most influential public figure of the year, or which the most significant event. But there can be little doubt which word won the prize for most important adjective. 2009 was the year in which "global" swept the rest of the political lexicon into obscurity. There were "global crises" and "global challenges", the only possible resolution to which lay in "global solutions" necessitating "global agreements". Gordon Brown actually suggested something called a "global alliance" in response to climate change. (Would this be an alliance against the Axis of Extra-Terrestrials?)
Obama Ordered U.S. Military Strike on Yemen Terrorists On orders from President Barack Obama, the U.S. military launched cruise missiles early Thursday against two suspected al-Qaeda sites in Yemen, administration officials told ABC News in a report broadcast on ABC World News with Charles Gibson. One of the targeted sites was a suspected al Qaeda training camp north of the capitol, Sanaa, and the second target was a location where officials said "an imminent attack against a U.S. asset was being planned."
US Attack Kills 120 In Yemen On orders from President Barack Obama, the U.S. military launched cruise missiles against two suspected al-Qaeda sites in Yemen, administration officials told ABC News in a report broadcast on ABC World News with Charles Gibson. American officials said the missile strikes were intended to disrupt a growing threat from the al Qaeda branch in Yemen, which claims to coordinate terror attacks against neighboring Saudi Arabia. The al Qaeda presence in Yemen has been steadily growing in the last two years. According to Richard Barrett, coordinator of the UN's Taliban al=Qaeda Sanctions Monitoring Committee, "Al Qaeda generally has been pushed into these ungoverned areas, whether it is the Afghanistan-Pakistan border area [or Yemen]," "I think many of the key people have moved to Yemen."
Bank Failure Friday: 7 Banks Go Down, 3 with No Buyer It was another busy Friday for regulators, as they closed seven banks, bringing this year’s total to 140. As always, we’ve updated our complete list of failed banks [http://projects.propublica.org/tables/failed-banks/]. The failures figure to continue in 2010. FDIC Chair Sheila Bair said last month failures will “peak” next year. The FDIC’s recently announced budget for 2010 reflects that: In order the handle bank closings, the agency plans to add 1,600 temporary employees to its staff of about seven thousand. The FDIC said last month that its list of “problem” banks has risen to 552.
Inflation Nation The Movie Part 1/3 - Dollar Collapse Ft. Peter Schiff Ron Paul Faber Rogers Inflation Nation - Dollar Collapse starring Peter Schiff, Ron Paul, Rand Paul, Marc Faber, Jim Rogers, and others. The dollar has been in an orderly decline for the past 10 years. Can the United States change course or is it doomed to be another cautionary tale?
Bank failure tally reaches 140 Banks in six U.S. states were closed Friday, bringing the total number of failed banks this year to 140, at a cost of over $1 billion to the Federal Deposit Insurance Corporation. Among the institutions seized by regulators was a so-called "bankers' bank" in Illinois called Independent Bankers' Bank (IBB), which had about 450 client banks in four U.S. states.
Feds shutter 7 banks for a total of 140 failures this year Regulators on Friday shut down two big California banks, as well as banks in Alabama, Florida, Georgia, Michigan and Illinois, bringing to 140 the number of U.S. banks brought down this year by the weak economy and mounting loan defaults. The Federal Deposit Insurance Corp. took over all seven. Regulators shuttered First Federal Bank of California, based in Santa Monica, with $6.1 billion in assets and $4.5 billion in deposits, as was Imperial Capital Bank of La Jolla, Calif., with about $4 billion in assets and $2.8 billion in deposits.
First Federal Bank of California and Imperial Capital Bank of La Jolla closed Both are sold immediately to other Southern California institutions. Regulators have closed 140 U.S. banks this year, 16 in California. Two more loss-battered Southern California banks were shut down by regulators Friday and immediately sold to two of the largest financial institutions based in the region. Stung by defaults on tricky adjustable mortgages, 80-year-old First Federal Bank of California was closed by federal savings and loan regulators, with its 39 branches to reopen today as part of OneWest Bank.
Midnight in the food-stamp economy At 11 p.m. on the last day of the month, shoppers flock to the nearest Walmart. They load their carts with food and household items and wait for the midnight hour. That's when food stamp credits are loaded on their electronic benefits transfer cards. "Once the clock strikes midnight and EBT cards are charged, you can see our results start to tick up," says Tom Schoewe, Wal-Mart Stores Inc's chief financial officer. As food stamps become an increasingly common currency in a struggling U.S. economy, they are dictating changes in how even the biggest retailers do business.
Utility Bill Is One More Casualty of Recession PROVIDENCE, R.I. — For the Cardente family, the shutoff of their electricity and gas in September was a wrenching marker in a two-year downslide. A run of mishaps, including illness and the husband’s workplace injury, extensive structural damage from a burst water bed and the mother’s layoff from a nursing job, had already upended their middle-class lives. Then the pile of utility bills emerged as a headache to rival the past-due mortgage. “You always try to pay your mortgage or rent to keep a roof over your head,” said Debra Cardente, the mother. “Then you ask, do you pay your electric or gas bill, pay your telephone or put food on the table?”
Will the new frugality born of the recession reshape a generation? Helen Wilson knows thrift. In the years after the Great Depression, she raised chickens and planted vegetables at her home in Alexandria to feed her children. Now she smirks a little when her daughter Loretta Haley, 55, describes the recession as "life-changing." "Absolutely I've changed my spending habits," Haley said, as she and her mother came out of a Shoppers Food Warehouse with just a few bags of what she described as "healthy" groceries in a giant shopping cart. "I'm only getting essentials."
Inflation Nation The Movie Part 2/3 - Dollar Collapse Ft. Peter Schiff Ron Paul Faber Rogers
Debt default in a developed country is unthinkable – or is it? Greece’s fiscal travails and ratings downgrades have provided some year-end trades for the speculators who have been betting against the bonds of the least flush euro area governments, and a great deal of material for professionally gloomy commentators such as myself. Most of the product of the euro-commentariat has stopped short of predicting outright default. That would, it is generally understood, be unthinkable for a developed country. It’s the sort of thing done by the Argentines of the world, not Europeans or Americans.
Bankruptcy and Fiscal Collapse, Global Economic Crisis Tipping Point Forecast for Spring 2010 LEAP/E2020 believes that the global systemic crisis will experience a new tipping point from Spring 2010. Indeed, at that time, the public finances of the major Western countries are going to become unmanageable, as it will simultaneously become clear that new support measures for the economy are needed because of the failure of the various stimuli in 2009 (1), and that the size of budget deficits preclude any significant new expenditures.
Financial Markets 2010 Scenario's Building My focus over the coming week is in completing the UK inflation analysis and forecast that is at the core of what happens to subsequent market trends as it directly feeds into interest rates, house prices, economy and stocks. Last years analysis and concluding forecasts for RPI and CPI proved remarkably accurate (30 Dec 2008 - UK CPI Inflation, RPI Deflation Forecast 2009) and hence the inflation road map resulted in the generation of many accurate projections for subsequent trends throughout 2009 and especially for UK savers that if they followed my cue of fixing savings at above 5% for 1 - 2 years would not have been burned by the subsequent crash in UK interest rates to pittance of as low as 0.1% on savings accounts, shame on you HBOS.
Why the US Economy is Facing a Very Unhappy New Year? Since US business investment peaked in 2008 it has dropped by 20 per cent. Not to worry though. According to Professor Blinder -- an eminent Princeton economist -- the situation will reverse itself because "plants and equipment wear out". This is an incredible statement for professor of economics to make. It assumes an automatic process that replaces capital once it is consumed. But capital replacement requires a human decision based on the availability of savings and favourable expectations about the future.
The Debt Time Bomb America is staring at total debt of $115 trillion Make no mistake; the developed world is drowning in debt and as outlined above, there are only two viable options – a global economic depression or very high inflation. It is our contention that the policymakers have chosen the latter option and over the following years, we will experience the trauma of severe inflation. Look. The American government is staring at total obligations of US$115 trillion, America’s debt to GDP ratio is off the charts and the American public is also up to its eyeballs in debt. Under this scenario, you can bet your bottom dollar that the American establishment will try to reduce this debt overhang through a process known as monetary inflation. If you have any doubt whatsoever, take a look at Figure 1 which captures the incredible expansion in America’s monetary base. As you can see, over the past two years, the monetary base in America has expanded from US$827 billion to an astonishing US$1.93 trillion! Up until now, this surge in the monetary base has not permeated through the broad economy but once the money velocity picks up, the money supply will zoom and the end result will be surging price inflation.
Inflation Nation The Movie Part 3/3 - Dollar Collapse Ft. Peter Schiff Ron Paul Faber Rogers
Weapon of Monetary Destruction . . . . By way of review, the Fed has only one distinct power: the capacity to create money out of thin air. In the end, and despite all its other powers, this is the one that matters. So if you are interviewing the Fed governor, one would think that this would be the central question: what did you do with the money-creating power to bring about this situation? This is not a "fringe concern." This was a central issue in all 19th century debates on money. It was the primary concern before Keynes within the economic profession. The belief that money manipulations spawns booms and busts was the conventional wisdom even into the 1940s. As late as 1973, F.A. Hayek won the Nobel Prize for his work demonstrating the point.
2010 The Year of Debt Deleveraging It's All About Deleveraging I did a very interesting one-hour show this week with Tom Ashbrook on his National Public Radio syndicated radio show called On Point. About 20 minutes into the show, Professor Jeremy Siegel of Wharton came on, and we had a pleasant debate and lively Q and A with listeners. Jeremy of course was the bull, expecting that next year the US will grow by 5-6%. I was the "bear," expecting growth in the 1-2% range.
Social Credit and Meta-Feudalism . . . . Ideally the elites want the American economy to contract. They desire a constrained and hobbled society which is more demanding, more complex, more controlled, more diverse, more fractured, more local and less efficient. In a word: meta-feudal. To understand a world that is meta-feudal you should watch movies such as “Brazil”, “Roller-Ball” and “Blade Runner”. These worlds are technological but disintegrated and astonishingly unequal. The powers work through fabricated “crises”. The elite set up the current “crisis” through the “originate to distribute” Basel banking agreement of 1998. From this model evolved: the hyper property bubble, the market-fixing credit derivative system, asset laundering off-balance-sheet accounting and the eventual “credit” collapse.
Is Obama Preparing for War in South America? The US media is very critical of Venezuelan President Hugo Chavez. He's frequently denounced as "anti-American", a "leftist strongman", and a dictator. Can you briefly summarize some of the positive social, economic and judicial changes for which Chavez is mainly responsible? Eva Golinger---- The first and foremost important achievement during the Chávez administration is the 1999 Constitution, which, although not written nor decreed by Chávez himself, was created through his vision of change for Venezuela. The 1999 Constitution was, in fact, drafted - written - by the people of Venezuela in one of the most participatory examples of nation building, and then was ratified through popular national referendum by 75% of Venezuelans. The 1999 Constitution is one of the most advanced in the world in the area of human rights. It guarantees the rights to housing, education, healthcare, food, indigenous lands, languages, women's rights, worker's rights, living wages and a whole host of other rights that few other countries recognize on a national level.
Venezuela's Chavez launches new police force CARACAS, Venezuela – President Hugo Chavez launched a federal police force on Sunday that he hopes will change the overwhelmingly negative image most Venezuelans have of their public security forces while reducing crime in one of Latin America's most violent countries. "We are going to defeat crime," Chavez told uniformed cadets belonging to the newly formed National Bolivarian Police Force during his weekly television and radio show. "We are tackling one of our population's most sensitive problems: crime prevention."
Gold Bull Market Is Nowhere Near the Top The U.S. dollar has reigned as the world's reserve currency for more than 60 years. That's a real anomaly in the history of paper money, according to Stansberry & Associates Investment Research founder Porter Stansberry, but the dollar's days on the throne are numbered. With a sea-change in the monetary system on the horizon—and drawing ever-nearer as more and more U.S. creditors turn toward hard assets and away from paper dollars—he tells The Gold Report in this exclusive interview that the world is approaching a return to "at least a de facto gold standard." Porter does not recommend bullion as "insurance" (because that suggests hope for the dollar when there is nothing to pin hope on) but rather as "the perfect natural money."
Gold inches up but firm dollar weighs, ETF up Gold prices inched up on Monday but the dollar's firmness curbed investor appetite for the metal amid light trading ahead of the Christmas holidays.
'US gold reserves value is $6,000 per ounce' The U.S. dollar has reigned as the world's reserve currency for more than 60 years. That's a real anomaly in the history of paper money, according to Stansberry & Associates Investment Research founder Porter Stansberry, but the dollar's days on the throne are numbered. With a sea-change in the monetary system on the horizon—and drawing ever-nearer as more and more U.S. creditors turn toward hard assets and away from paper dollars—he tells The Gold Report in this exclusive interview that the world is approaching a return to "at least a de facto gold standard." Porter does not recommend bullion as "insurance" (because that suggests hope for the dollar when there is nothing to pin hope on) but rather as "the perfect natural money."
Volatility In Markets, Including Gold, Is This A Bad Sign For The Gold Price? Gold, is it inherently Volatile? A 5% correction in one day, is this reasonable? That happened to gold and many would say was consistent with its reputation as a volatile market. But at the same time most markets reflected the same volatility and have recently been doing so regularly. Actually, gold’s reputation as a volatile market [when others are stable] is misplaced.
Gold Hit With a Bear Raid Yesterday Memories of Citi's Eurobond Price Manipulation If the longs had been exiting the market, the open interest would have declined more significantly. These big plunges in price look to be driven by short selling, with weak hands being driven out, and then short covering or determined buyers stepping back in to maintain the overall number of contracts at a relatively steady level. Recall the case in the Euro bond market, wherein Citi came in and sold an enormous volume precipitously, running the stops and driving the price down sharply. The Citi trader came back in and covered his shorts, pocketing the difference in his market disruption based on size. This trading strategy was known as 'the Dr. Evil' trade. Citi Fined for Euro Bond Trades By British Regulator; Italy Indicts Citi Traders; Citi Haunted by Dr. Evil Trades in Europe;
Gold Is the New Tupperware, and You're Invited to the Party It's Much More Fun Than a Pawnshop; the Cash Is Only So-So but Comes in Handy The 1950s were big for Tupperware parties. The 1970s were hot for Mary Kay cosmetics. As this decade hobbles to a close, a new kind of social gathering is invading America's living rooms: the gold party. Shannan DeCesare, 40 years old, brought four gold chains, two unloved bracelets, some earrings that had lost their mates and a couple of other old pieces to her neighbor's house here last week. Minutes later, she was showing off a check for $610. "Merry Christmas to me!" she exclaimed amid applause from the small group of women clustered around host Christine Smith's dining-room table. "Don't tell my husband," she joked, as she pondered how she might spend the loot.
Gold and Silver Correct But What If The Stock Market Really Plunges? The recent tumble in the price of gold came as no surprise to experienced technical traders and to readers of Premium Update. We gave you a heads up to close out your speculative gold positions before the beginning of the correction. Keep in mind that even the strongest bull markets need to pause and correct before moving higher. I’m not even sure that the decline we have seen so far should be labeled a correction.
Now, gold coins from United Nations Now, the United Nations is also lured by the glitter of gold. In a bid to raise money for its projects, United Nations has licensed the minting of gold bullion coins bearing its logo to provide a public option world savings currency. Oro gold coins are hoped to contribute to making the UN better funded by 2015, with revenue rising by ten to 15 per cent.
They buy gold, because they lost faith in banks! All of us thought gold prices are soaring because of the fear among investors that recession will take away all their money. But, the reality is different. People go for gold because they don’t have faith in the central banks. And in the recent past people have realized that the banks are no more the best place to keep your money.
China may overtake India as world's top buyer of bullion It's taken all of recorded history, but this year China finally looks set to overtake India as the world's No 1 gold consumer. It may struggle to hold that position in the short term, as the one-off factors that have slowed India's gold demand fade, but in the long term China's rapidly growing economy and investment demand could see it add gold to the long list of commodities where it is the world's largest buyer.
Keeping the Midas touch Although gold coins and small bars account for a small portion of the precious metal market, analysts see them as a good indicator of investor appetite as both demand and price continue to rise All things for all people, everywhere. Or so says the motto of Harrods, the London department store. Except in jewellery, "all things" until recently did not include gold. But the store, heartened by the current rally in the yellow metal, now sells bullion. "Sales are ahead of our expectations," says Chris Hall, Harrods' head of gold, as he shows a collection that ranges from tiny wafers of 5g, costing about $200 (Dh734), to a central bank-style 400 troy ounce bar valued at $480,000. "People are buying several at the same time," he says of a bar costing about $38,500. "Not one is coming back to sell."
Obama asked to block Chinese investment in U.S. gold mine on security groundsPresident Obama may have to decide whether to allow Chinese investment in a Nevada mining operation after getting recommendation to block a majority stake in Firstgold which is developing a mine 80km from a US naval base U.S. mining company Firstgold still hopes to complete a partnership deal with a Chinese mining company despite U.S. national security concerns that could cause President Barack Obama to block it, the company's chief executive said on Friday.
Canada’s Dollar Rises as Oil, Gold Gain, RIM Beats Estimates Canada’s currency gained versus its U.S. counterpart after commodities including crude oil and gold advanced and the Blackberry maker Research In Motion Ltd. forecast sales and profit that exceeded analysts’ estimates. The Canadian dollar posted a second weekly loss, even as it outperformed all but one of its 16 most-traded counterparts today. The franc was best performer as the Swiss national bank refrained from selling the currency and demand for a haven rose amid reports that Iranian forces occupied an oil well yesterday in Iraqi territory.
Dollar rally, jobs bill, death tax
Dollar Trades Near Three-Month High on U.S. Economy Optimism The dollar traded near a three-month high against the euro as signs that the world’s largest economy is gaining traction and lingering credit concerns in Europe buoyed demand for the greenback. The U.S. currency may extend its biggest weekly rally since June against its major counterparts before reports this week forecast to show increasing sales of existing homes and new homes in the U.S. The 16-nation euro dropped for a fourth day against the Swiss franc after the European Central Bank raised its estimate for writedowns in nations using the single currency by 13 percent.
Sales of dollar junk bonds hit record Sales of dollar junk bonds have hit all-time high levels in 2009, as issuers rush to tap strong global investor demand after a year in which the asset class has produced record returns. Total issuance so far this year of high-yield bonds, commonly known as junk, last week topped $144bn (£89bn), passing the previous high of $143bn reached in 2006, according to Dealogic. This marks a big reversal from last year, when investors shunned this corner of the credit markets.
The Greatest Outpouring of Money and Credit from Central Banks and Governments in History The past two years have seen the greatest outpouring of money and credit from central banks and governments in history. In most countries interest rates cannot fall much lower being presently under 1% or close to zero. You might call this an attempt at fiat money recovery. As a result of pump priming for the past six months or more investors have returned to the same gambling and risk taking they engaged in before, the losses of which caused the world economy to come to the edge of the financial abyss. All sectors of investment are again affected by a casino mentality.
Instead of lending, banks focus on covering losses President Obama has been demanding that banks start lending again, but the unstated secret is that banks are not lending much because they are busy paying back their government aid and covering losses of $1 trillion or more on defaulting loans. Banks and the administration all but abandoned efforts to clean up their immense toxic-loan problems through the bank bailout program earlier this year, and instead have been hastening to settle accounts. All of the top banks have repaid their bailout funds to free themselves from public scrutiny and government interference, and the Treasury has been trumpeting the return of $164 billion in bailout funds by year's end.
Senate panel backs Bernanke for second term Federal Reserve Chairman Ben Bernanke's nomination to a second term cleared a Senate panel on Thursday despite some lawmakers' misgivings, setting the stage for a contentious Senate debate and vote in January. The Senate Banking Committee backed Bernanke on a 16-7 vote, with one Democrat joining six Republicans in opposition. Several senators voiced concern over perceived Fed missteps they said laid the groundwork for the financial crisis. Others criticized actions the Bernanke-led central bank has taken since the crisis broke.
Timing of taxes could be crucial to U.S. recovery More economists across the political spectrum are now worrying that the economy will still be quite weak at the end of next year, when the Bush tax cuts are scheduled to expire for high-income households. The White House confronts a jobless rate (10 percent today) that will likely remain in double digits through the end of next year, according to many private economic forecasts.
Fed's Spring Tightening Won't Stop Price Hikes Import price surge suggests investors brace for inflation. The Federal Reserve's free money policy is coming under even greater scrutiny following release of the November Non-Farm Payroll Report and latest Bureau of Labor Statistics inflation data. The spate of "less bad" news on the economy, and increases in certain price levels, has brought some bond vigilantes out of hibernation. Meanwhile the cacophony from hard-money guys--me chief among them--is now calling on the Fed to raise interest rates sooner rather than later.
Fears over bank reserves overblown: Fed paper Concerns over the surge in excess reserves in the U.S. banking system and its potential to fire up inflation are "largely unwarranted," according to two New York Federal Reserve economists. The jump in excess reserves, or the amount of funds banks hold beyond what the U.S. central bank requires, is largely the by-product of the unprecedented lending the Fed has conducted to combat the credit crisis and the ensuing recession, Todd Keister and James McAndrews wrote in an article for the New York Fed's December bulletin released on Thursday.
Crumbling U.S. Treasury Bond Market Suggests Spike in Interest Rates 2010 The Warning Signs Are There. Please Don’t Ignore Them! Each and every week, the U.S. government sells Treasuries to fund its operations. Four-week bills. Three-month bills. Six-month bills. One-month bills. Two-, 3-, 5-, 7-, and 10-year notes. And of course, the granddaddy of them all, the 30-year Treasury Bond. The Treasury auctions offer those securities to all kinds of bidders — individual investors, banks, insurers, pension funds, mutual funds, and foreign central banks are among them. The more aggressive the bidding, the lower the yields Treasury has to pay on the securities it sells. And the lower the yields, the lower the U.S. government’s financing costs.
Gerald Celente on Goldseekradio.com
Agencies in a Brawl for Control Over Banks In the darkest days of the financial crisis a year ago, Sheila Bair was hailed for having predicted the housing bust. Today, the chief of the Federal Deposit Insurance Corp. is fighting for her agency's future. The FDIC was set up in 1933 as part of a successful attempt to rescue the banking system, and its deposit guarantees helped save the industry in the present crisis. But as lawmakers hash out the biggest overhaul of financial regulations since the Great Depression, the FDIC could wind up a shadow of its former self.
Impeachment appears imminent for federal judge It's not the lifestyle of a typical federal judge: Five or six vodka cocktails during lunch; gambling with borrowed money; bankruptcy under a phony name; cash, trips or home repairs from lawyers; and a bail bondsman with business before his court. Witnesses in the congressional impeachment case against U.S. District Court Judge G. Thomas Porteous Jr. paint a jarring portrait of the former Louisiana state judge appointed to the federal bench in 1994 by President Clinton.
Pimco’s Gross Boosts Cash to Most Since Lehman Failed Bill Gross, who runs the world’s biggest bond fund, cut government debt holdings and boosted cash to the most since Lehman Brothers Holdings Inc. collapsed in 2008 amid increasing speculation that interest rates will rise. Gross, who manages the $199.4 billion Total Return Fund at Pacific Investment Management Co., increased cash to 7 percent in November from negative 7 percent in October, according to Pimco’s Web site. The fund can have a so-called negative position by using derivatives, futures or by shorting. He reduced government-related securities to 51 percent from a five-year high of 63 percent in October.
Citadel Broadcasting Files for Bankruptcy Protection Citadel Broadcasting Corp., the owner of radio stations in cities including New York and Chicago, filed for U.S. bankruptcy protection in Manhattan. The company, which syndicates Don Imus’s morning talk show through its U.S. radio network, listed assets of $1.4 billion and debt of $2.5 billion in its Chapter 11 filing today in U.S. Bankruptcy Court. Forstmann Little & Co., a New York-based private equity firm, owns 29 percent of the company’s common stock, according to court papers. The filing covers about 50 units of Las Vegas-based Citadel.
Full repayment of Dubai debt still option Dubai, set to ask creditors for a standstill on restructuring some $22 billion in debt linked to troubled conglomerate Dubai World, may still repay lenders in full, a local newspaper said on Sunday, citing unnamed sources. The National daily said two top Dubai officials, on a confidence-building mission to Britain and the United States in recent days, told financial leaders in London that repaying all bank loans in full "was discussed as a medium-term possibility."
To Borrow or Not to Borrow I just got off the phone with a friend who’s buying some commercial real estate but isn’t sure how to pay for it. Should he use cash and own it outright, with no worries about making payments? Or should he finance it and pay off the loan with ever-cheaper dollars — in effect going long the property and short the dollar on the same deal? As we tossed around the pros and cons of debt in a world where paper money is being inflated away, it occurred to me that a lot of other people — including many homeowners — are probably asking themselves similar questions. So here’s some material that might help:
Va. Gov. raises income tax, ends car tax The state's hated local car tax would be replaced with a $2 billion-a-year income tax increase under the new budget Gov. Timothy M. Kaine presented Friday. The departing Democratic governor's tax proposal accompanied a budget that prescribes about $1.2 billion in spending cuts in a bid to reconcile a $3.6 billion state revenue shortfall for 2010 through 2012.
Commercial real estate on shaky foundation Optimism about a national economic recovery, fueled by rising stock prices and an improved residential real estate market, is tempered by the widespread belief that a raft of commercial real estate loan defaults is just around the corner. Fears of a commercial real estate mortgage meltdown are bolstered by persistent unemployment, which has led to office and retail vacancies, rising commercial loan default rates and hundreds of bank failures - including two in the Bay Area in recent months.
Another Mortgage Meltdown Ahead? What Likely Lurks Around the Corner Over the next two years, the so-called Alt-A and Option ARM loans face massive resets. Even with today’s low mortgage interest rates, most of these home loans, currently enjoying ultra-low teaser rates or pick-your-own-monthly-payment schemes, will see their monthly payments adjust higher – far higher. The result: loan losses and write-downs will balloon for banks, and mortgage holders will get hit with another wave of homeowner defaults. We just don’t see any way for the economy and markets to escape the fallout.
More homes are poised to hit the market A 'shadow' inventory of properties close to foreclosure or seized but not yet for sale has been growing. A supply of 1.7 million homes headed for sale because of foreclosure or delinquency looms over the nation's housing market, which could dampen progress toward recovery should the Obama administration fail in its efforts to aid struggling homeowners, researchers said. A variety of measures to keep discounted bank-owned properties off the market -- including moratoriums on foreclosures by major lenders and federal initiatives aimed at keeping people in their homes with mortgage payments they can afford -- has helped increase a backlog of so-called shadow inventory 55% in the year ended Sept. 30, according to a report released Thursday by First American CoreLogic, a Santa Ana-based real estate research firm.
U.S. mortgage delinquencies at new high Mortgage delinquencies rose to a new record in November and could remain high in December as Americans set aside more money for holiday expenses, Equifax Inc data show. Among U.S. homeowners with mortgages, 7.91 percent were at least 30 days late on payments in November, up from 7.76 percent in October, according to the monthly data the credit bureau provided exclusively to Reuters on Wednesday. Delinquencies are an indication of future consumer bankruptcy filings, according to Equifax. "(Consumers) spend a lot more during November and December and they get behind and can't get to their payments," said Myra Hart, senior vice president of Analytical Services at Equifax. No real improvement is possible until unemployment levels come down, she said in an interview.
Strategically Defaulting on 'Shadow Inventory' Paris, France – Ben Bernanke is Time’s “Man of the Year.” Reading the commentary, it is clear that the popular press has even less of an idea of what is going on than Bernanke himself. The more we think about it, the more our jaw drops. In Copenhagen this week, a large group of apparatchiks and hacks got together to discuss a “climate deal.” There, Hillary Clinton pledged US support to a plan to spend $1 trillion to try to influence the earth’s climate. Governments can do many things, but can they really improve the weather? There is no evidence for it. Not even a respectable theory.
U.S. regulators propose guidance on reverse mortgages U.S. regulators, prompted by the potential for rapid growth in reverse mortgages as the population ages, have issued proposed guidance for institutions to follow when doing business with elderly customers. Reverse mortgages, which are targeted at homeowners who are at least 62 years old, allow homeowners to tap the equity in their home and receive cash from the lender. The loan does not have to be repaid as long as the borrower lives in the home. Because the elderly use the proceeds for the cash flow they need to pay for health care and other living expenses, regulators say there is the potential for abuse in this vulnerable group.
Who wins, who loses in Senate health bill The little town of Libby, Mont., isn't mentioned by name in the Senate's mammoth health care bill, but its 2,900 citizens are big winners in the legislation, thanks to the influence of Finance Committee Chairman Max Baucus, D-Mont. After pushing for years for help for residents, many of whom suffer from asbestos-related illnesses from a now-closed mineral mining operation, Baucus inserted language in a package of last-minute amendments that grants them access to Medicare benefits. He didn't advertise the change, and it takes a close read of the bill to find it. It's just one example of how the sweeping legislation designed to remake the U.S. health care system and extend coverage to 30 million uninsured Americans also helps and hurts more narrow interests, often thanks to one lawmaker with influence or bargaining power.
Health Care bill faces key Senate test vote Senate Democrats confidently advanced heath care legislation Sunday toward a make-or-break test vote in a push for Christmas-week passage. Republicans vowed to resist what they appeared unable to stop. In the run-up to the vote, the escalation in rhetoric was remarkable on both sides of an issue that has divided the two political parties for months. "This process is not legislation. This process is corruption," said Sen. Tom Coburn, R-Okla., referring to the last-minute flurry of dealmaking that enabled Majority Leader Harry Reid, D-Nev., and the White House to lock in the 60 votes needed to approve the legislation.
Obama hails 60th Senate vote for health care Jubilant Democrats locked in Nebraska Sen. Ben Nelson as the 60th and decisive vote for historic health care legislation Saturday, putting President Barack Obama's signature issue firmly on a path for Christmas Eve passage. At the White House, Obama swiftly welcomed the breakthrough, saying, "After a nearly century-long struggle, we are on the cusp of making health care reform a reality in the United States of America."
Senate’s Health-Care Legislation Poised for Passage The U.S. Senate is poised tomorrow to take an early morning vote that will lead toward passage of the most sweeping overhaul of the nation’s health-care system in more than four decades. The vote to cut off debate is scheduled for 1 a.m. in a U.S. Capitol blanketed by snow and filled with weary senators and staff. Democrats, finally united in favor of the bill, are using the clock to overcome delaying tactics by Republicans universally opposed to the effort.
Pivotal Senate Health Vote Looms The Senate is marching toward a Christmas Eve vote on the biggest health-care legislation since the passage of Medicare 45 years ago, and its version is likely to form the template for the final bill that President Barack Obama hopes to sign next month. The White House and Senate leaders expressed confidence Sunday that they have the 60 votes in the Senate needed to overcome Republican opposition and pass a bill estimated to cost $871 billion over a decade.
Senate Sends Defense Bill to Obama The U.S. Senate voted Saturday to approve a $635 billion bill to set the Defense Department's budget for the remaining 10 months of fiscal 2010, completing Congress' last piece of unfinished must-pass spending legislation. The vote was 88-10. The House of Representatives voted Wednesday to approve the legislation, meaning it will go to President Barack Obama for his signature early next week.
Al-Qaeda's New Business Model: Cocaine And Human Trafficking Arrests show terror group's growing dependence on organized crime for funding. Osama Bin Laden's terrorist organization has become increasingly reliant on organized crime, including cocaine smuggling, human trafficking and kidnapping, according to a criminal complaint unsealed Friday in Manhattan's federal court. The charges filed against three alleged al-Qaeda associates by the U.S. Attorney in Manhattan is the latest chilling evidence of a convergence between terrorism and organized crime.
Obama to clear secret records Executive order follow-up on inaugural pledge President Obama plans to deal with a Dec. 31 deadline that automatically would declassify secrets in more than 400 million pages of Cold War-era documents by ordering governmentwide changes that could sharply curb the number of new and old government records hidden from the public. In an executive order that the president is likely to sign before year's end, Mr. Obama will create a National Declassification Center to clear up the backlog of Cold War documents. But the order also will give everyone more time to process the 400 million pages, rather than flinging them open at year's end without a second glance.
Obama Snubbed by Chinese Premier at Climate Meeting President Barack Obama’s first closed-door meeting with world leaders in Copenhagen to forge an agreement to slow climate change had a notable absentee: Chinese Premier Wen Jiabao. While the U.S. leader and Wen later met privately for almost an hour, China’s premier didn’t show up for a second meeting with Obama and other leaders this afternoon, adding to speculation the world’s two biggest producers of greenhouse gases are far apart on an agreement to fight climate change.
Barack Obama’s climate deal unravels at last moment The United Nations climate change conference ended in recrimination yesterday without reaching a clear deal on emissions targets. After a stormy session in Copenhagen, in which a vociferous anti-American minority brought the talks close to collapse, most countries agreed simply to “take note” of a watered-down agreement brokered by President Barack Obama and supported by Britain. This accord — which had been drawn up in discussions with China and 30 or so other countries on Friday — sets a target of limiting global warming to a maximum of 2C above pre-industrial times.
China Facing Economic, Financial and Stock Market Crash Scenario Money Supply Growing Record 29.74% Problems in China continue to mount. Money supply is growing rampantly out of control, property prices are in a bubble, exports are weak, commodity speculation is pervasive, and GDP growth is more of a mirage than real. Please consider China Monthly New Loans Are 294.8 Billion Yuan, Above Forecast New local-currency loans totaled 294.8 billion yuan ($43.2 billion), compared with 253 billion yuan in October, according to data released by the People’s Bank of China on its Web site today. The median forecast of 19 economists in a Bloomberg News survey was 250 billion yuan.
China’s Export of Labor Faces Growing Scorn TRUNG SON, Vietnam — It seemed as if this village in northern Vietnam had struck gold when a Chinese and a Japanese company arrived to jointly build a coal-fired power plant. Thousands of jobs would start flowing in, or so the residents hoped. Four years later, the Haiphong Thermal Power Plant is nearing completion. But only a few hundred Vietnamese ever got jobs. Most of the workers were Chinese, about 1,500 at the peak. Hundreds of them are still here, toiling by day on the dusty construction site and cloistered at night in dingy dormitories.
Patriot Radio News Hour - Friday Guest host: Mark Call
The annual "Outrageous Predictions" of Denmark's Saxo Bank US pensions go bust, gold crashes, China flops, Bunds soar, predicts Saxo America's Social Security Trust Fund will go bankrupt; both gold and the Japanese yen will crash; and China's currency will devalue as bad loans catch up with the over-stretched banking system – all in the course of 2010. The annual "Outrageous Predictions" of Denmark's Saxo Bank are not for the faint-hearted, though there is good news for some. David Karsboel, chief economist, thinks the US trade balance may go into surplus for the first time since the mid-1970s, benefiting from the delayed effects of the weak dollar. . .
A New World War for a New World Order The Origins of World War III In Parts 1 and 2 of this series, I have analyzed US and NATO geopolitical strategy since the fall of the Soviet Union, in expanding the American empire and preventing the rise of new powers, containing Russia and China. This Part examines the implications of this strategy in recent years; following the emergence of a New Cold War, as well as analyzing the war in Georgia, the attempts and methods of regime change in Iran, the coup in Honduras, the expansion of the Afghan-Pakistan war theatre, and spread of conflict in Central Africa. These processes of a New Cold War and major regional wars and conflicts take the world closer to a New World War. Peace can only be possible if the tools and engines of empires are dismantled.
Gulf Petro-Powers to Launch Currency in Latest Threat to Dollar Hegemony The Arab states of the Gulf region have agreed to launch a single currency modelled on the euro, hoping to blaze a trail towards a pan-Arab monetary union swelling to the ancient borders of the Ummayad Caliphate. “The Gulf monetary union pact has come into effect,” said Kuwait’s finance minister, Mustafa al-Shamali, speaking at a Gulf Cooperation Council (GCC) summit in Kuwait. The move will give the hyper-rich club of oil exporters a petro-currency of their own, greatly increasing their influence in the global exchange and capital markets and potentially displacing the US dollar as the pricing currency for oil contracts. Between them they amount to regional superpower with a GDP of $1.2 trillion (£739bn), some 40pc of the world’s proven oil reserves, and financial clout equal to that of China.
Times, Bernanke Joins a Long List of Infamous Underachievers There's a culture in our society that rewards bad behavior. Take the Fort Collins, Colo. couple that pretended to send their 6-year-old boy up in a homemade balloon so the family could star in a reality show? Well, Time magazine's anointment of U.S. Federal Reserve Chairman Ben S. Bernanke as its "Person of the Year 2009" is an example of the same thing. For starters, no other U.S. central bank head has been a "Person of the Year." Not William McChesney Martin Jr. (Fed chairman, 1951-70) who defined monetary policy accurately, saying the Fed's job was "to take away the punchbowl just as the party gets going." Not even Paul A. Volcker (Fed chairman, 1979-87), who bravely pursued a tight-money policy that broke the back of inflation.
Person of the year
Moody’s warns of 'social unrest’ as sovereign debt spirals Britain and other countries with fast-rising government debts must steel themselves for a year in which “social and political cohesiveness” is tested, Moody’s warned. In a sombre report on the outlook for next year, the credit rating agency raised the prospect that future tax rises and spending cuts could trigger social unrest in a range of countries from the developing to the developed world. It said that in the coming years, evidence of social unrest and public tension may become just as important signs of whether a country will be able to adapt as traditional economic metrics. Signalling that a fiscal crisis remains a possibility for a leading economy, it said that 2010 would be a “tumultuous year for sovereign debt issuers”.
American Purgatory Are financial markets a direct reflection of the overall health of a nation? I wish they were not, but I fear they are. I wonder at times if our nation has entered a state of purgatory – all of us mulling around in the waiting room to Hell, anxiously counting the minutes until the grim reaper saunters through the door sickle in hand his mission to send us off to eternal damnation. Unfortunately, there is little time to close this door so that we may stave off this potential fate that looms so near. What we need to alter this course is a procession of men who possess moral fortitude and common sense, men of rationality and reason. Men of action who will set in motion the dismantling of institutions that bleed this nation dry.
U.S. Lets Big Banks Repay TARP for All the Wrong Reasons Citigroup and Wells Fargo each raised billions this week to repay their TARP funds, the last of the major banks to do so. On the surface, this seems like unalloyed good news for fans of free-market capitalism: The banks were able to raise huge sums from private investors and will now be able to operate as fully private organizations, most notably when it comes to compensation.
Foreclosure backlog estimated at 1.7M About 1.7 million homeowners were on the verge of foreclosure in the fall, a looming "shadow inventory" of homes that will be put up for sale in the coming years and weigh down prices, a report said Thursday. The number, up from 1.1 million a year earlier, is likely to keep rising through the middle of next year or later, said Mark Fleming, chief economist of First American CoreLogic, the real estate research firm that released the study.
FDIC Increases Budget on Expectations of Mounting Bank Failures Although signs of economic recovery have begun to take shape, don’t expect the number of bank collapses to ease – that’s the opinion of the federal agency that insures the nation’s financial institutions. The FDIC is boosting its 2010 budget by a hefty 55 percent and adding staff in order to cope with another round of excessive bank failures next year. Earlier this week, the agency’s board approved a $4.0 billion corporate operating budget for the upcoming fiscal year, up from the current 2009 budget of $2.6 billion.
Credit card's newest trick: 79.9% interest It's no mistake. This credit card's interest rate is 79.9%. The bloated APR is how First Premier Bank, a subprime credit card issuer, is skirting new regulations intended to curb abusive practices in the industry. It's a strategy other subprime card issuers could start adopting to get around the new rules. Typically, the First Premier card comes with a minimum of $256 in fees in the first year for a credit line of $250. Starting in February, however, a new law will cap such fees at 25% of a card's credit line. In a recent mailing for a preapproved card, First Premier lowers fees to just that limit — $75 in the first year for a credit line of $300. But the new law doesn't set a cap on interest rates. Hence the 79.9 APR, up from the previous 9.9%.
A Tough Year Ahead for the U.S. Economy? As the dollar has depreciated, commodity prices have risen, causing commodity-focused companies such as Freeport-McMoRan, Rio Tinto, and Southern Copper to soar. Most notably, gold has rocketed a glittering 30% this year, boosting gold stocks like Newmont Mining, Barrick Gold, and Kinross Gold. So are commodity stocks still the place to be in 2010? Will the economy improve next year, validating the market's torrid run in 2009?
The Economy is Being Strangled by the Banksters... and no one seems to Care The past two years have seen the greatest outpouring of money and credit from central banks and governments in history. In most countries interest rates cannot fall much lower being presently under 1% or close to zero. You might call this an attempt at fiat money recovery. As a result of pump priming for the past six months or more investors have returned to the same gambling and risk taking they engaged in before, the losses of which caused the world economy to come to the edge of the financial abyss. All sectors of investment are again affected by a casino mentality.
Peter Schiff's Predictions!
Gold firms as dollar weakens vs euro Gold prices firmed towards $1,110 per ounce on Friday as the dollar fell versus the euro, recovering some ground lost in the previous session when it fell 3 percent. Bullion slipped below the key level of $1,100 per ounce on Thursday, hitting a six-week low of $1,094.50.
'Gold at $ 2,000 becoming acceptable to investors' In 1705, John Law submitted a proposal to the Scottish Parliament that a new bank be set up that issued interest bearing notes to replace gold and silver coins as currency. He believed that public confidence alone was the basis of public credit and would allow bank notes to replace gold. As he told a friend "I have discovered the secret of the philosopher' stone; it is to make gold out of paper." The Scots rejected the proposal as did the Duke of Savoy, who said about Law's scheme "I am not rich enough to ruin myself."
Expect Continued Upside for Gold, Commodities and Stocks in 2010 In its updated report on global commodity strategy, BMO Senior Commodities Analyst Bart Melek lauds stimulus packages around the world as stemming "possible depressing and massive deleveraging and panic selling". These international efforts led global commodities markets to perform far better than could have been predicted at the start of the year. Base and precious metals and energy commodities performed "extremely well".
Central banks eager to get their hands on gold Some of the biggest buyers of gold may be sending the strongest signal to sell it, if past performance is indicative of future results. Central banks, holding about 18 percent of all gold ever mined, are expanding their reserves for the first time in a generation as a nine-year bull market drives prices to a record. The banks will buy 13.8 million ounces (429 tons) this year, worth $15.5 billion, for the first net expansion in reserves since 1988, New York-based researcher CPM Group estimates. Gold fell 15 percent that year and took another 15 years to trade again at the same price as central banks from Switzerland to the UK cut their holdings.
Central banks may trigger gold selling Even though Central Banks across the globe are buying gold fearing fall of dollar, this has given an indication to people to sell the yellow metal now. Because, whenever central banks had bought gold in the past to increase their reserves, gold prices had crashed. Central banks, holding about 18% of all gold ever mined, are expanding their reserves for the first time in a generation as a nine-year bull market drives prices to a record, said a report in the Economic Times.
Gold falls to mid-Nov. lows as Fed bolsters dollar Losses for gold futures deepened Thursday to close at mid-November levels, pressured as investors bid up the U.S. dollar on concerns about Greece's ability to pay its debts and on expectations the Federal Reserve was inching toward raising rates. A higher dollar undermines the value of gold, which is typically bought as an alternative if investors expect paper currencies to depreciate.
Optimism Fades Heading Into 2010 Dec. 17, 2009 A new Wall Street Journal/NBC News poll tells that the economic crisis is taking its toll on the national psyche. WSJ's Jerry Seib explains what this declining optimism could mean for Obama and those incumbents running for re-election in 2010.
Pray, gold doesn't do a 2008 crude! The Fed has been keeping interest rates very low hoping that both business and consumers will start to spend money they don't have as they used to in the past. In reality, consumers continue to borrow less. Consumer borrowing has dropped for 9 months in a row and long-term yields have been slowly rising. The bond market determines long-term rates and not the Feds. Rising rates tend to favour a stronger dollar as higher interest rates make a currency more attractive.
Four Pillars of Gold-Price Strength Remain Intact - Just Ask China Jeffrey Nichols, Senior Economic Advisor to Rosland Capital, fresh from a recent trip to China, today made the following comments on the recent volatility of gold: "While gold traders and investors are currently focusing on U.S. economic data, they're missing the just-as-important statistics from China. "Recent indicators point to a "V" shaped recovery in the Chinese economy. Chinese industrial production accelerated in November to its fastest rate this year - up over 19 percent from a year earlier. I can tell you first hand from my recent visit to Shanghai that China's largest city is booming with new construction - roads, bridges, office towers, and apartment blocks - rising everywhere, streets crowded with shoppers, and auto sales so strong that many buyers wait months for delivery.
Media gives gold bad name The numismatic hobby and gold investors might have been excited when gold passed the $1,200 milestone, but you would never guess it from mainstream media reports. In fact, the precious metal is being trashed by mainstream media that claims it has not outpaced inflation; that it would have to go to more than $2,500 an ounce before it made up for its lack of traction over the years, and a host of other calumnies.
Buyers spurn gold for silver A leading bullion dealer says that there has been a marked interest from investors for silver in recent weeks Investors are looking to silver as an alternative to gold with a leading dealer reporting that one-ounce silver rounds are outselling anything else by a factor of 10 to one. "Silver rounds" – which look like coins but are not legal tender – are selling well at the moment, according to Alex Baird of Baird & Co, the bullion dealer. "One-ounce silver rounds at £14.50 with a box are outselling anything else by a factor of 10 to one," he said. "They are significantly cheaper than silver coins."
China's Impact on Precious Metals Is Strong, But Bottom in Silver May Not Be in Yet It was only in April of this year that the world found out that China had increased its gold reserves by a whopping 76 percent to 1054 tons since 2003, moving from 10th place to 7th in terms of global central bank rankings. The Chinese government now owns 30 times the gold it held in 1990. And China is believed to be a leading candidate to buy some or all of the gold the International Monetary Fund still has to sell, after India bought the other 200 a few months ago. Keep in mind that as China's reserves continue to grow, it will have to purchase gold just to maintain the small gold-to-reserves ratio of 2 % that it currently has, let alone increase it. Therefore, the country must continue buying gold.
Platinum, Palladium Fall as Dollar Gain Curbs Demand for Metals Platinum and palladium prices dropped the most in more than a week after the dollar rose to a three-month high against the euro, eroding demand for precious metals as alternative assets. The dollar gained against all of the 16 most-traded monies as equity-market declines and a Greek-debt downgrade yesterday stoked demand for the U.S. currency as a refuge. While most platinum and palladium goes into auto parts and jewelry, some investors use precious metals to hedge against changes in the greenback’s value. Gold slipped the most in almost two weeks.
European financial woes gives boost to dollar's strength Souring economic prospects in Europe have helped halt the dollar's months-long decline, enabling the greenback to rise to unexpected heights against the euro this week in line with signs of strength in the U.S. economy. It was not good news for shareholders, though. The dollar's rise to a three-month high Thursday helped push down stocks worldwide because investors had placed leveraged bets that depended on a further weakening of the dollar.
Chinese Central Banker Zhu Says Dollar Set to Weaken Chinese central banker Zhu Min said that the dollar is set to weaken further and it will become more difficult for nations to buy U.S. Treasuries. “When the U.S. has to fund its deficit through the combination of issuing more Treasuries and printing more dollars, it is inevitable that the dollar will continue to weaken,” Deputy Governor Zhu said at a forum in Beijing today. China, the biggest foreign holder of Treasuries with $798.9 billion of the securities, expressed concern this year at the safety of its dollar assets and central bank Governor Zhou Xiaochuan called for moves toward an alternative global currency. Zhu’s comments, which he said were a personal view, focused on the twin U.S. deficits, fiscal and current account.
Dollar Rises as Stocks, Commodities Fall in Flight From Risk The dollar rose to the highest level in three months while stocks and commodities slid as investors fled risky assets on concern the global economic recovery will stall. Ten-year Treasuries jumped the most since October. The U.S. currency advanced against the 16 most-traded peers and the Dollar Index, which tracks the dollar against six major trading partners, surged 0.9 percent to 77.714. The Standard & Poor’s 500 Index tumbled 1.2 percent to 1,096.08 after Citigroup Inc. sold stock at a discount, FedEx Corp.’s profit forecast trailed estimates and initial jobless claims unexpectedly increased. The S&P GSCI Index of 24 commodities fell for the first time in six sessions, losing 0.8 percent.
Inflexible Currencies Add to Global Imbalance, Bank Group Says A group of international bankers raised concern that countries such as China with fixed exchange rates could be hampering global adjustments in capital flows, as the dollar falls and investment floods into some emerging markets. The Institute of International Finance, based in Washington, said the dollar’s slide has so far been “orderly” and has helped reduce global imbalances. At the same time, countries with flexible exchange rates have carried a “skewed burden of adjustment” that could hurt growth in some regions and possibly lead to financial protectionism, the group said.
Why Are Banks Holding So Many Excess Reserves? The buildup of reserves in the U.S. banking system during the financial crisis has fueled concerns that the Federal Reserve’s policies may have failed to stimulate the flow of credit in the economy: banks, it appears, are amassing funds rather than lending them out. However, a careful examination of the balance sheet effects of central bank actions shows that the high level of reserves is simply a by-product of the Fed’s new lending facilities and asset purchase programs. The total quantity of reserves in the banking system reflects the scale of the Fed’s policy initiatives, but conveys no information about the initiatives’ effects on bank lending or on the economy more broadly.
Treasury 10-Year Notes Rise Most in 11 Weeks on Safety Buying Treasury 10-year notes gained the most in 11 weeks as a decline in stocks amid concern the global economic recovery will stall spurred demand for the relative safety of government debt. Two-year notes gained for a third day after a report showed more Americans than anticipated filed first-time claims for jobless benefits last week. Standard & Poor’s yesterday cut Greece’s credit rating and the Federal Reserve reiterated a pledge to keep interest rates “exceptionally low” for an “extended period” at the end of its policy meeting.
Suddenly, safe haven Treasurys get tricky The flight-to-safety crowd could be in for a bumpy landing. Long-term Treasury bonds are on track for their worst year in at least three decades. The Barclays 20-plus-year Treasury index has posted a total return of -20% in 2009. f you aren't trying to sell some Treasurys of your own, the price drop actually points to some good news. The fear of economic collapse has eased, reversing the so-called risk-aversion trade that briefly sent government bond prices through the roof last fall. Some once-petrified markets have reopened, freeing sellers to reinvest elsewhere.
Fed’s Statement Fails to Fuel Dollar Rally The U.S. Dollar erased earlier losses after the Federal Reserve released its monetary policy statement. The Dollar turned higher after trading most of the day lower after the Federal Open Market Committee offered more detailed plans to remove excess liquidity from the financial system. The Fed also offered commentary on the economy, saying that deterioration in the labor market is “abating.” This statement is a reaction to the decline in the unemployment rate earlier in the month from 10.2% to 10.0%. The Fed did reiterate, however, that it will keep its benchmark interest rate at a historically low level for “an extended period.”
Citigroup’s ‘Dark Cloud’ Lingers After Share Sale Citigroup Inc. left its shareholders under a “dark cloud” by selling stock to pay back a taxpayer bailout while the U.S. government held a controlling stake, according to Chris Kotowski, an Oppenheimer & Co. analyst. The CHART OF THE DAY shows the number of outstanding shares and stock price in the past six months for Citigroup, the last of the four largest U.S. banks to raise funds to leave the government’s Troubled Asset Relief Program.
Citigroup to suspend foreclosures for 30 days Citigroup will suspend foreclosures and evictions for 30 days in a temporary break for about 4,000 borrowers during the holiday season. The New York-based bank said Thursday the suspension will run from Friday through Jan. 17. It applies only to borrowers whose loans are owned by Citi. Borrowers who make payments to Citi but whose loans are owned by other investors are out of luck. "We want our borrowers to have a much less stressful time, to spend their time with their families during the holidays as opposed to worrying about their homes," Sanjiv Das, head of the company's mortgage division, said in an interview.
Treasury decides not to sell its Citigroup stock too cheaply In a striking reversal of its attempts to unwind the government's financial stakes in big banks, the Treasury Department is backing out of plans to sell its 34% stake in Citigroup. The move came after investors responded tepidly to a massive stock offer by the New York-based bank. Citi said Wednesday that it will sell 5.4 billion common shares at a steep discount to raise the cash it needs to repay $20 billion of the $45 billion in taxpayer support it received to weather the financial crisis. Citi is the last remaining Wall Street bank in which the government still owns a major stake.
Stocks slump on global jitters Stocks closed sharply lower Thursday after Greece received another credit downgrade and the dollar rose on the U.S. central bank's cautious comments. . . . . . . . . The stock slump came as the dollar rebounded 1.3% against the euro, to its highest levels since September. The greenback was also up sharply on the pound and slightly higher against the yen.
Bernanke Backed for Second Fed Term by Senate Panel Ben S. Bernanke won backing for a second term as chairman of the Federal Reserve, overcoming criticism that the central bank failed to head off the deepest financial crisis since the Great Depression. The Banking Committee voted 16-to-7 to recommend Bernanke’s nomination to the full Senate, with 12 Democrats and four Republicans in favor. Six Republicans and one Democrat, Jeff Merkley of Oregon, were opposed.
Bernanke moves closer to second term Ben Bernanke moved closer to a second term as chairman of the Federal Reserve in the face of a revolt in Congress against his appointment by Senate Republicans. In a high-stakes hearing, the Senate Banking Committee voted 16 to 7 to advance Mr Bernanke’s renomination to a full vote of the Senate. But while the Fed chief won overwhelming support from Democratic senators on the committee, more than half the Republican members voted no, including ranking member Richard Shelby.
Bernanke Foes Seek to Curtail Fed Ben Bernanke is widely expected to win Senate approval for a second term as Federal Reserve chairman, but opponents are hoping to use the debate on his nomination to curtail his autonomy at the central bank. The Senate Banking Committee is poised to clear Mr. Bernanke's nomination on Thursday, sending it to the full Senate for a vote. Several lawmakers plan to use the proceedings to gain momentum for a bill that aims to subject the Fed's monetary-policy making to congressional audits.
Is The Fed Getting It Right? Discussing whether the Fed is doing a good job when it comes to repairing the economy, with Christopher Thornberg, Beacon Economics; Len Blum, Westwood Capital; and CNBC's Maria Bartiromo.
Treasury Official Outlines Exit Strategies for TARP Investments The U.S. government continues to reluctantly hold sizable investments in a handful of auto companies and financial firms, but hopes to exit from those positions in the next several years, a top Treasury Department official said Thursday. "The government's role as a shareholder is to manage its investment, not to manage the company," Assistant Secretary Herbert Allison Jr. said in prepared remarks before a House panel.
House narrowly OKs year-end, $100B jobs bill Democrats in the House Wednesday muscled through a year-end plan to create jobs, mixing about $50 billion for public works projects with another almost $50 billion for cash-strapped state and local governments. The unemployed would get continued benefits. But conspicuously absent from the plan were President Barack Obama's recently announced proposals to give Social Security recipients $250 payments, a tax credit for small businesses that create jobs and a program awarding tax credits to people who make their homes more energy efficient.
House Approves $154 Billion Job Bill The House approved a $154 billion package aimed at stimulating the labor market with a combination of infrastructure projects, aid to states and funding for several safety-net programs. The bill passed late Wednesday on a 217-212 vote, with no Republicans voting for the plan. The hastily assembled legislation was completed late Tuesday night, leaving lawmakers little time to study it and prompting criticism from Republicans who said it was a waste of taxpayer money.
Credit Card Issuers Face Angry Customers and Lost Revenue Credit card consumers are voting with their feet and letting credit card issuers know they're not going to take it any more. Two-thirds of credit card users have modified their spending habits or changed providers in response to harsh issuer changes this year, according to comScore's 2009 Online Credit Card Report. In its survey of credit card users, comScore found that 97% of respondents changed the way they used a card if an issuer increased the interest rate, reduced the customer's credit limit, added fees or made some other change the customer didn't like.
‘Shadow Inventory’ of U.S. Homes Climbs The number of homes that may be in the pipeline for a sale because of foreclosure and delinquency climbed about 55 percent to 1.7 million at the end of September, according to estimates by First American CoreLogic. The “shadow inventory” rose from 1.1 million a year earlier. Such properties include those taken over by banks and mortgage companies and those where the loans are at least 90 days delinquent, the Santa Ana, California-based research firm said in a report today. The number of unsold homes listed for sale was 3.8 million in September, down from 4.7 million a year earlier, First American said.
Loan Resets Projected to Cause Mortgage Crisis in 2010 As many exotic adjustable rate mortgages (ARMs) are set to recast in 2010, the Consumer Mortgage Audit Center (CMAC) is projecting a mortgage crisis in 2010 as large as the subprime. “We’ve spoken to Florida attorneys who sit at the forefront of the U.S. foreclosure crisis and have learned that 53 percent expect recasting ARMs to present a mortgage crisis as large as subprime and 61 percent expect to work on more loan modifications in 2010 than they did in 2009,” said Sylvia Alayon, VP of operations for CMAC “The New Year is going to hold very rude awakenings for some homeowners, but there are things you can do to analyze your situation and get help if you need it.”
Luxury-Home Owners in U.S. Use ‘Short Sales’ as Defaults Rise Homeowners with mortgages of more than $1 million are defaulting at almost twice the U.S. rate and some are turning to so-called short sales to unload properties as stock-market losses and pay cuts squeeze wealthy borrowers. “The rich aren’t as rich as they used to be,” said Alex Rodriguez, a Miami real estate agent with JM Group USA Inc., whose listings include a $2.9 million property marketed as a short sale because the price is less than the mortgage, leaving the bank with a loss. “People have reached the point where they can’t afford the carrying expenses of a $2 million home.”
Home buyers are focusing on smaller homes Out of the depths of housing's worst downturn, smaller new homes are turning into a bright spot for some home builders. The trend toward more compact new homes is being driven partly by the fact that more customers are first-time buyers who have less to spend. Home builders are responding by offering smaller designs with features such as high ceilings and large windows that create a spacious feel and options that let buyers personalize the model they choose.
U.S. Mortgage Rates Rise to 4.94%, Freddie Mac Says Mortgage rates for fixed 30-year U.S. home loans rose for a second consecutive week after hitting a record low this month. The rate for the week ended today increased to 4.94 percent from 4.81 percent. It set a record low 4.71 percent in the week ended Dec. 3. The average 15-year rate was 4.38 percent, the McLean, Virginia-based company said today in a statement.
Sacramento home sales keep falling Sacramento home sales continued to slide on a year-over-year basis and the recent rise in prices has ended, according to figures released by MDA DataQuick on Thursday. The company reported that 2,837 homes of all types, including new homes, in the four-county area were sold in November, down from 3,001 homes in the same month last year, a 5.4 percent drop. Prices, which had been climbing slightly in recent months, leveled off or dropped in November. In Sacramento County, the median sales price was $175,0000, still slightly below the $185,000 median price last year. Prices were down in the other three counties on a year-over-year basis as well.
Citi's holiday treat: No foreclosures for a month Citigroup will suspend foreclosures and evictions for 30 days, giving 4,000 at-risk borrowers a break during the holiday season, the company said Thursday. The New York-based bank said distressed homeowners with first mortgage loans owned by CitiMortgage or CityFinancial North America who also meet certain other criteria will not be subject to foreclosure sales or notifications between Dec. 18 and Jan. 17.
Tiger Woods linked to Arizona rehab facility A Wickenburg rehabilitation center is not commenting on speculation that golfer Tiger Woods could be checking into its facility. There were numerous media reports Thursday regarding Woods possibly checking into a rehab center in the wake of his Thanksgiving night car accident in front of his home and subsequent reports of various women claiming extramarital affairs with the golfer.
Tiger Woods REHAB? Sex Compulsion, Vicodin, Ambien May Land Woods In Clinic, Report Says The Daily Mail reports that Tiger Woods is planning to enter rehab in Arizona for "sexual compulsion" as well as Vicodin and Ambien use. Woods has been described before as a sex addict , and the officer responsible for investigating Woods' car accident reportedly requested a subpoena because he believed Vicodin and Ambien may have been a factor. Intriguingly, Woods may have been marked as an overdose when he entered the hospital.
U.K.- 3,000 victims of home snatchers: Record numbers of elderly are forced to sell their homes to pay for care The scale of Labour’s betrayal of pensioners was laid bare tonight as it emerged that every year at least 3,000 elderly people are forced to sell their homes to pay for residential care. The scandal of Britain’s crumbling care system has reached such proportions that a third of all those paying the cost of their care end up without their house. Critics say it is appalling that, after more than a decade of Labour promises, a record number of people who have saved all their lives are still having to put their houses up for sale, while those who have squandered their money get free care.
Rahm Emanuel Tests Limits of His Persuasion in Health-Care Overhaul When Pfizer Inc. Chief Executive Officer Jeffrey Kindler saw that health-care legislation unveiled by House Democratic leaders in October threatened to squeeze drugmakers’ profits, he got on the phone with White House Chief of Staff Rahm Emanuel. Kindler was upset that the House measure would require pharmaceutical companies to forgo $140 billion in revenue over 10 years, said a person familiar with the discussion. He wanted assurance from Emanuel that the White House would honor an agreement to limit the drugmakers’ cost to $80 billion. The deal held.
Reid Fights for 60th Vote on Health Bill Senate Majority Leader Harry Reid struggled to win over the last Democratic vote on health-overhaul legislation as uncertainty grew about whether the measure can be brought to a vote before Christmas. After more than two weeks of debate, Mr. Reid (D., Nev.) remained a vote short of the 60 votes needed to ensure passage of the White House-backed initiative. The focus Wednesday was on Sen. Ben Nelson, the conservative Nebraskan who stands as the only undecided member of the party's 60-member caucus, which includes two independents. Democratic leaders were confident Wednesday that Sen. Joseph Lieberman, the Connecticut independent, would support the bill after a move to drop plans to expand Medicare.
Left Behind Even with a health-care overhaul, thousands of Americans may pay a fine rather than purchase insurance. Here's why. When Beverly Flaxington's husband left his corporate job in 2001 to become a self-employed software salesman, the middle-aged couple sat down and assessed their health-insurance situation. They had relied on his coverage since 1995, when Beverly became an independent consultant. The couple, who live outside of Boston, settled on purchasing a catastrophic plan to cover major health expenses and paying out of pocket for small expenses such as doctor visits and prescriptions.
Labor unions oppose Senate's health bill Two politically powerful labor unions came out Thursday against the Senate's health care overhaul bill as Democratic leaders struggled to find a compromise on the measure's abortion language and lock down enough support among their party to move toward a final vote by Christmas Eve. Moderate Democrat Sen. Ben Nelson of Nebraska, who wants to ensure that federal money is not used to pay for abortions, said Thursday that he hasn't found a compromise that would win his vote without threatening the support for the bill from liberal, pro-choice members.
America's most wanted: doctor found living in tent on Mont Blanc Missing man faces fraud trial after five years on run Fugitive lived on tinned food and melted snow On 21 September 2004, Michelle Weinberger woke up on the 79ft powerboat that she and her husband, Mark, owned as it rocked gently in the waters of a marina on the Greek island of Mykonos. "I put my hand on his side of the bed, and I remember feeling it empty," she later told the US television channel NBC. Weinberger leapt from bed in alarm to find that her husband had vanished, taking with him his passport and money he had stashed secretly on board. It was the beginning of a five-year flight from justice that ended this week even more strangely than it began, almost 6,000 feet up in the Italian Alps.
Obama's arrival expected to inject fresh momentum into Copenhagen talksUS president said to be preparing 'knock out punch' after Hillary Clinton's gamechanging promise to back $100bn climate aid Barack Obama is poised to arrive in Copenhagen tomorrow with additional pledges of cash for poor countries which will suffer the most from global warming, a day after America's promise to support a $100bn a year climate fund. Obama's arrival has been the most anticipated event of the 10-day summit, which has lurched between optimism and rank despair. He will seek to make a decisive impact, building on the announcement today by Hillary Clinton, the secretary of state, who said for the first time that America would support a $100bn global climate change fund from 2020. But she will be a tough act to follow, as the statement was seen by delegates as a gamechanger.
Climategate: Why those Russian 'experts' might not have our best interests at heart he front page of today’s Daily Express carries a story which resonates strongly with global warming sceptics. According to a report by Anil Dawar and Will Stewart, “experts at the Moscow-based Institute of Economic Analysis” have said that leading British climatologists “probably tampered with Russian climate data” in order to produce a biased report submitted to world leaders at the Copenhagen summit. James Delingpole (aka Mr Strangelove) has his take on the story here, in a blog post which is currently the most viewed article on Telegraph.co.uk. But before we get totally carried away, let’s take a moment to examine the facts.
U.S. pledges aid, urges developing nations to cut emissions COPENHAGEN -- With an offer of significant new aid to help poor nations cope with the effects of global warming, the Obama administration began a major diplomatic effort Thursday aimed at saving the troubled climate talks before the president's expected arrival Friday morning. The United States is pressuring developing countries to agree to emissions cuts along with the industrialized world for the first time, and insisting on transparent monitoring of those reductions. High-ranking U.S. officials were assuring nations behind the scenes that after years of resistance, Washington is also serious about reducing emissions at home and doing more to prevent global warming.
U.S., China deadlock in Copenhagen Obama to arrive as expectations sink even further The United Nations climate change summit in Copenhagen appeared Wednesday to be falling victim to a standoff between the United States and China, with observers starting to voice fears that already-low expectations for the conference will not be met. The conference is scheduled to conclude Friday soon after President Obama and more than 100 other world leaders arrive, but little progress was evident in closed-door negotiations between rich and poor nations.
China transforms balance of power in Copenhagen's negotiating halls China will shape whatever deal comes out of Copenhagen, but is so far reluctant to accept its binding consequences Despite the huge differences that have emerged during the UN climate talks, one thing that almost everyone can agree on is that China has transformed the balance of power in the negotiating halls. In its alliance-building, wallet-wielding and unusually effective public diplomacy, China will shape whatever deal comes out of Copenhagen far more than it influenced the protocol made at Kyoto 12 years ago.
US drones hacked by Iraqi insurgents One of America's most sophisticated weapons in the conflicts in Iraq, Afghanistan and Pakistan, the unmanned drone, has been successfully penetrated by insurgents using software available on the Internet for $26. Insurgents in Iraq intercepted live video feeds from the drones being relayed back to a US controller and revealing potential targets. A US official said the flaw was identified and fixed in the past 12 months. The problem only came to light after the US found many hours' worth of videotaped recordings on militant laptops late last year and earlier this year. The insurgents used software programmes such as Skygrabber, developed by a Russian company and originally intended to download music and videos from the Internet.
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Thurs 12.17.2009
Debtor's Dilemma: Pay the Mortgage or Walk Away In Down Real-Estate Market, Homeowners Are Deciding to Abandon Their Loan Obligations Even if They Can Afford the Payments PHOENIX -- Should I stay or should I go? That is the question more Americans are asking as the housing market continues to drag. In good times, it would have been unthinkable to stop paying the mortgage. But for Derek Figg, a 30-year-old software engineer, it now seems like the best option. Mr. Figg felt trapped in a home he bought two years ago in the Phoenix suburb of Tempe for $340,000. He still owes about $318,000 but figures the home's value has dropped to $230,000 or less. After agonizing over the pros and cons, he decided recently to stop making loan payments, even though he can afford them.
4 Big Mortgage Backers Swim in Ocean of Debt Even as the biggest banks repay their government debt in what is being heralded as a successful rescue program, four troubled giants of the financial world remain on government life support. These companies, the American International Group, Fannie Mae, Freddie Mac and GMAC, are not only unable to repay the government, they are in need of continuing infusions that make them look increasingly like long-term wards of the state. And the total risk they pose to the taxpayer far exceeds that of the big banks. Fannie and Freddie, in the final days of the year, are even said to be negotiating with the Treasury about greatly expanding the money available to them.
Ron Paul Reacts to Bernanke as Time Person of the Year ~ Morning Joe 12-16-09
TIME's "Nerd of the Year" Bernanke Makes Inflation Present & Dangerous THE PRICE OF GOLD rose in Asian and early London trade on Wednesday, recovering one-fifth of the last fortnight's 10% drop vs. the Dollar and hitting one-week highs against the Euro ahead of today's interest-rate announcement from the US Federal Reserve. The Fed statement, due at 14:15 EST (19:15 GMT), is not expected to signal any change to the US central bank's current zero-rate policy. "Nothing in either the economic data or financial markets will lead the Fed to signal a change in policy," says a BNP analyst quoted by the Wall Street Journal. "Fed will hike rates in 2011," says a headline at CNN Money.
Person of the Year, My Foot! Bernanke "Failed Miserably," Chris Whalen Says Ben Bernanke has been named Time's "Person of the Year," for his aggressive actions to stem the global financial crisis. "His creative leadership helped ensure that 2009 was a period of weak recovery rather than catastrophic depression, and he still wields unrivaled power over our money, our jobs, our savings and our national future," Time's Michael Grunwald writes. "The decisions he has made, and those he has yet to make, will shape the path of our prosperity, the direction of our politics and our relationship to the world. "
Bernanke Foes Seek to Curtail Fed Some Senators Plan to Use Debate on Nomination to Push Audit Measure Ben Bernanke is widely expected to win Senate approval for a second term as Federal Reserve chairman, but opponents are hoping to use the debate on his nomination to curtail his autonomy at the central bank. The Senate Banking Committee is poised to clear Mr. Bernanke's nomination on Thursday, sending it to the full Senate for a vote. Several lawmakers plan to use the proceedings to gain momentum for a bill that aims to subject the Fed's monetary-policy making to congressional audits.
A Tough Year Ahead for the U.S. Economy? Peter Schiff: Assuming that we don't have a currency collapse next year, then the economy will continue to deteriorate beneath the surface. The unemployment picture won't improve. We will continue to lose manufacturing and production jobs. The trade deficit will continue to expand. The savings rate will continue to fall. The budget deficits will get worse. Prices will be creeping higher for commodities -- particularly food and things of that nature. The dollar will be losing value, gold will be rising -- it's not going to be a pretty picture.
Nearly half of Detroit's workers are unemployed Analysis shows reported jobless rate understates extent of problem Despite an official unemployment rate of 27 percent, the real jobs problem in Detroit may be affecting half of the working-age population, thousands of whom either can't find a job or are working fewer hours than they want. Using a broader definition of unemployment, as much as 45 percent of the labor force has been affected by the downturn. And that doesn't include those who gave up the job search more than a year ago, a number that could exceed 100,000 potential workers alone.
Recession hitting Ohio's former steel towns hard All day long the front door buzzes at Uptown Gems & Jewels. The people come in with their trinkets wrapped in tissue or velvet boxes. They say their hours have been cut or they've been laid off. Some have their first names stitched in cursive on their uniforms, others wear safety-toe boots. At campaign time, they are celebrated as the people who built America. Now they just want to know how much they can get for a wedding band. "Let me show you something," says Dallas Root, standing behind the counter with a jeweler's loupe strung around his neck. He holds up a gallon-size Ziploc bag that's two-thirds full of gold -- engagement rings, class rings, promise rings, serpentine chains, St. Christopher medals, bracelets, anklets and earrings.
Joyce warns of bigger GFC Aussie warns of US default THE Nationals Senate leader Barnaby Joyce is openly canvassing an economic upheaval that would dwarf the current global financial crisis, triggered by the US defaulting on its sovereign debt within the next few years. In unusually pessimistic comments for a senior political figure, Senator Joyce said the US Government was running such large deficits and building up so much debt that it was in a similar position to Iceland or Germany before World War II. In a Senate estimates hearing on Wednesday night, he asked Treasury secretary Ken Henry what would be the implications of an American debt default for the Australian economy.
As Good As Gold As the price of gold has pulled back from its recent run up to $1,200, many investors are left to ponder what exactly drives the movement of such an important and financially sensitive commodity. Most people are aware that gold prices respond to inflation expectations and that central banks, as the largest holders of gold, are big players in the market. But there is a very murky understanding as to why and how these players affect prices, and what their ultimate goal may be.
Gold ends higher, weathers brief post-Fed selling Gold rose on Wednesday as the market remained firm even as the dollar regained ground against the euro in late trading after the Federal Reserve stated optimism that the U.S. economy was stabilizing. But gold kept its appeal as an inflation hedge as the Fed pledged to keep interest rates low at a time many investors fear inflation may be picking up. These factors would be bearish for the dollar and bullish for gold in the long term.
Political Decision-making Process Guarantees Much Higher Gold Prices “Lack of confidence in the gold price bull prevails. Almost everyone seems obligated to hedge when predicting price, in spite of having marshaled an array of intimidating and compelling facts and arguments” says Arnold Bock and in his article below he questions why there is so much reluctance. Words: 1312 Bank of America suggests that gold will reach $1,500. Talk about going out on a limb with a high risk prediction!
Gold edges above $1130 in Europe Gold prices advanced over $1130 an ounce in European trade Wednesday ahead of a crucial US Federal meet. Spot gold was seen trading at $1130.54 an ounce at 3.30 p.m Indian time compared with $1,124.40 late in New York on Tuesday. U.S. gold futures for February delivery on the COMEX division of the New York Mercantile Exchange rose $8.80 to $1,131.80 an ounce. Prices firmed after above-consensus euro zone data lifted the euro from lows, but prices were range bound amid caution ahead of the Fed monetary policy statement due later.
Peak Gold: Is world running out of yellow metal? . . . . Gold does, of course, have tangible value. To the extent that it's intrinsically valuable, it's valuable because its physical properties – relatively scarcity, durability, transportability, divisibility, homogeneity – make it particularly useful as a monetary unit of exchange. To suggest it has no inherent value is to misunderstand the qualities that make money useful, and more importantly, sound. But back to the issue of production. It's not just the nut jobs in the newsletter industry warning that gold production is falling. It's the gold miners. Of course you have to discount what they're saying to the extent that they're talking their own book. But they do know their own business and they are saying that 2009 could be the last year for some time that gold production rises.
Gold heading for $1,500 before mid-2010- SocGen The bank suggests buying into the recent commodities correction as it expects precious metals to outperform the rest over six months as investors' fears intensify about inflationary pressures exacerbated by political interference. In its latest quarterly Commodity Review, investment bank Société Générale forecasts continued strength in investor flows into commodities in the first half of 2010, helped by central banks keeping policy rates at extremely low levels. The bank suggests that, not least due to the size of the output gap in the United States, the recently developed fears of an increase in FOMC interest rate policy has been overdone and therefore recommends buying into the latest correction in commodity prices.
Speculative bargain hunters back in gold market Gold prices ticked about 1% higher during the overnight hours as the US dollar pulled back ahead of the Fed decision announcement due later today. Yesterday’s surge in the dollar was notable however, and so was the fact that gold fell amid news of an unexpected rise in the PPI. The pre year-end trade shows all the conflicting signs that can be attributed to the cashing in on profits, window-dressing and/or book-squaring, and some ‘one for the road’ pile-on trades that speculators are noted for, around office eggnog season.
New Gold ETF Could Be Exchanged for Physical Gold There are several gold-focused exchange traded funds (ETFs), but a new product recently filed with the Securities and Exchange Commission (SEC) could have the most interesting twist yet. Sprott Asset Management is planning to introduce a new ETF called the Sprott Physical Gold Trust. It’s designed to provide investors with exposure to the physical gold bullion market, reports Rocky Vega on The Daily Reckoning. (Record prices for gold has assets flowing into ETFs). The lure for investors is that units in the trust can be redeemed for physical gold, as well as a possible trust-related tax rate advantage. The rate would be 15%, vs. 28% for the sale of collectibles held for more than a year. (The latest gold pause may simply be just that).
Precious Metals resurrection is not a bubble Critics of precious metals investing have called gold and silver a bubble, further claiming that today's higher prices will fade as economic conditions improve. Although gold and silver prices are much more expensive than they were even a few years ago, gold and silver are hardly near bubble status. One of the most prominent reasons that gold and silver aren't yet a bubble is that very few casual or institutional investors own physical gold and silver. A recent poll of professional money managers indicated that fewer than 30% have ever purchased gold for their clients. Ownership of gold is even rarer in the general populace, as investors have to go out of their way to buy physical metals.
How to Ride Gold's Next Move Up Gold has been doing a fantastic job of holding the line and is consolidating around 1125 on the February futures contract. I think it will head higher again. First, gold saw dramatic declines in the last two weeks. Given the run this market has had over the past few months, it is not surprising at all to see this type of wipeout. These moves typically shake out all the weak longs and present a wonderful buying opportunity for bulls and those looking to add to long positions.
Bullion: Is it time to buy or sell gold? In today’s turbulent, volatile, roller-coaster market, is the age-old adage about "Buy and Hold" bad advice? In recent months I have heard or read comments such as… "The "Buy and hold strategy" is an archaic idea and would be financial suicide in today’s market." "People are better off with short-term strategies so that they can try to buy before the market goes up and sell before the market goes down. Then…when the market goes down, that is a buying opportunity. Use the volatility in your strategies"
Central banks debase currencies to demonetize gold As the price of gold has pulled back from its recent run up to $1,200, many investors are left to ponder what exactly drives the movement of such an important and financially sensitive commodity. Most people are aware that gold prices respond to inflation expectations and that central banks, as the largest holders of gold, are big players in the market. But there is a very murky understanding as to why and how these players affect prices, and what their ultimate goal may be.
Foes turn friends for gold! Till recently central banks of all countries used to be the enemies of gold because they always tried to stop the bull run in gold. But the 2008 recession has changed the world for central banks and gold. Now, central banks are the first ones to rush to buy gold as they want to keep their reserves in the from of yellow metals instead of the traditional dollar. So, the global markets witnessed a gold buying spree from central banks like Reserve Bank of India and central banks of Sri Lanka and Russia.
Gold Climbs 1.2%, Silver and Platinum Advance New York gold futures put up their biggest numbers in two weeks on Wednesday, as the US dollar retreated prior to the Fed’s announcement that it would keep interest rates unchanged. Other precious metals followed with silver rising 1.4 percent and platinum inching 0.4 percent higher.
The "Political Process": A Gold Bug's Best Ally “Lack of confidence in the gold price bull prevails. Almost everyone seems obligated to hedge when predicting price, in spite of having marshaled an array of intimidating and compelling facts and arguments” says Arnold Bock and in his article below he questions why there is so much reluctance. Bank of America suggests that gold will reach $1,500. Talk about going out on a limb with a high risk prediction!
Ron Paul's Bill: US behind financial Iron Curtain? Private mints in the US are printing gold and silver coins. Congressman Ron Paul would like to see those coins in circulation. If businesses decide to accept these coins, would it mean the end of the dollar? Or just a big mess?
Gold forecast: Jim Rogers, Peter Schiff or Roubini? Whom should we believe on gold prices? Jim Rogers, Peter Schiff or Nouriel Roubini? That is the questions I have been asking several bullion traders and gold dealers across China these days. Some are optimistic and agree with Schiff that gold will indeed cross the massive $5000 per ounce mark that Schiff has predicted. Others say people like Schiff are inflating the value of gold by inflated predictions.
Why Roubini is wrong on gold Bad news for gold bugs: Professor Nouriel Roubini, the man who, as the FT puts it, "came to fame for predicting the global crash in financial markets", still refers to gold as a "barbaric relic". But even worse than that, he thinks our favourite metal is "in part a bubble that could easily go bust". I don't entirely disagree with him. Almost everything is in a little bit of a bubble, simply because of the low-interest-rate/high-liquidity environment in which we live. And I never expect anything to move in a straight line – corrections are par for the course.
Bonds and Gold The Fed has been keeping interest rates very low hoping that both business and consumers will start to spend money they don't have as they used to in the past. In reality, consumers continue to borrow less. Consumer borrowing has dropped for 9 months in a row. The above chart of the 30 year bond indicates that long term yields have been slowly rising. The bond market determines long term rates and not the Feds. Rising rates tend to favour a stronger dollar as higher interest rates make a currency more attractive. And a rising dollar will lead to drop in the value of Gold and many other commodities out there. The dollar is on the verge of crossing a very important threshold, and if it manages to do this then all competing currencies, commodities in general are going to experience large downward moves.
Chicken Little Roubini NOURIEL ROUBINI was "one of the few to predict the financial crisis" reckons the Financial Times. Yet plenty of other chicken littles, amateur and professional, had long warned of trouble ahead, too. Hence the 150% rise in gold prices even before the crisis broke in August 2007. Set against negative real interest rates, unfettered bank leverage and runaway deficit spending, gold's rare physical persistence looked a fair bet. And absent Armageddon or double-digit inflation, a growing handful of people chose to store a chunk of their change in metal, starting around 2001.
Are U.S. and China Together on Gold? While many precious metals bulls have been insisting for months that China is gold and silver's greatest ally, we saw first-hand last week exactly how capable the Chinese are of pulling a rabbit out of a hat when need be. Much of the finger wagging for the recent decline in the price of gold - as usual - has been directed towards those dastardly Americans. This time around, the gold bull's disdain had to do with the recent US jobs report on December 4. Yes, the numbers - which are unquestionably fabricated - had an impact on the precious metal markets; nevertheless, those gold bulls who insist upon using the adage of "see no evil, hear no evil, speak no evil," where China is concerned are fooling themselves and living in a sugar-coated dream world.
Silver can get you out of bad policies Barack Obama has charged banks with the task of lending more money to consumers and businesses in an effort to stimulate the economy. Luckily for gold investors, easy credit and greater loan activity have always meant higher precious metal prices. When you analyze the relationship between the Federal Reserve and fractional reserve banking, there is always a discrepancy between the amount of paper cash in circulation and the amount of money supposedly deposited in bank accounts.
There is Money and Then There Are Money Substitutes Claims to a definite amount of money, payable and redeemable on demand, against a debtor about whose solvency and willingness to pay there does not prevail the slightest doubt, render to the individual all the services money can render, provided that all parties with whom he could possibly transact business are perfectly familiar with these essential qualities of the claims concerned: daily maturity and undoubted solvency and willingness to pay on the part of the debtor. We may call such claims money-substitutes, as they can fully replace money in an individual's or a firm's cash holding.
Paper Currencies Trampoline Jumping Watching the national paper fiat currencies rising and falling relative to one another can be interesting, but it is misleading for many of those who take it seriously. When the U.S. Dollar Index is rising, Americans are gaining in their standard of living as it takes fewer dollars to buy things, right? Not necessarily
One more Dance before Midnight Strikes . . . . Nowadays, there’s a multitude of speculators who are engaging in the US-dollar carry trade, all betting that they’ll reach the exit door first, before the clock strikes midnight, - or when the Fed begins to tighten liquidity. However, recent signs that the US-economy is rebounding from its two-year slump, at a much faster pace than expected, has widened the US-Treasury’s yield curve to its steepest level in more than two-decades, a sure sign, that Fed rates won’t stay pegged near zero percent much longer, and that higher interest rates lie ahead in 2010.
Recognition of the U.S. Inflation Problem When the banking system (the central bank and the commercial banks) creates so much new money out of nothing that the total supply of money rises rapidly, it can be likened to counterfeiting on a grand scale. This counterfeiting distorts price signals, brings about the undeserved transfer of wealth to the first receivers of the new money, and depletes real savings. It therefore damages the economy. There are times when the economy is in good enough shape—due to an existing large pool of real savings—that the total amount of wealth is able to grow despite the hindrance of monetary inflation, but there are other times—now, for example—when earlier inflation and other central-bank/government-imposed distortions have already weakened the economy to such an extent that adding more inflation into the mix causes an irresistible drag.
The Inflation Mega-trend and the Illusion of Price Deflation Have we experienced Deflation and IF we have are we still in Deflation Now ? Deflation is the decrease of general prices in an economy. The most widely recognised measure of which is the Consumer Price Index (CPI), the composition of which aims to standardise the measure of prices of economies across the world to enable easier comparative analysis. Unfortunately many analysts mistakenly pick and choose alternative measures against which to support their own point of views at a particular point of time. This pick and mix attitude to analysis is not just limited to deflationists, but inflationists also have been seen to seek propaganda over facts. Inflation or Deflation is not measured by comparing one asset value against another i.e. Comparing Gold Prices against House Prices.
Economy bubbles up with wholesale inflation So much for Federal Reserve Chairman Ben Bernanke telling the country not to worry that zero percent interest rates might spark inflation. Economists' worst fears were realized yesterday when the Labor Department said wholesale prices climbed a surprising 1.8 percent last month -- double what economists had predicted and the second-biggest November jump in a decade, following the stunning 2.7 percent surge two years ago at the start of the housing collapse.
Short View: Oil and inflation There remain plenty of investors who worry about inflation, not least those still buying gold. However, it is one risk Ben Bernanke and fellow members of the US policy-making Federal Open Market Committee are not concerned about. Statements from the FOMC’s monthly meetings have stressed “subdued inflation” more than once. Certainly the current inflation picture does not contain much to worry about. US Consumer Price Index in November rose 0.4 per cent from the previous month. The comparisons with a year ago are not meaningful because those include the effects of a plunge in oil prices (remember, oil fell from more than $145 a barrel in July 2008 to less than $35 a barrel by December).
Bernanke says weak economy not at risk of inflation Federal Reserve Chairman Ben Bernanke, in a response to a lawmaker's questions made public on Tuesday, said the U.S. economy is operating so far beneath its potential that inflation is unlikely to become a problem. The letter to Senator Jim Bunning, a Republican from Kentucky, comes as Bernanke faces Senate confirmation for a second term as Fed chairman. In a confirmation hearing before the Senate Banking Committee earlier this month, Bernanke came under fire both for failing to prevent the financial crisis and for overextending the central bank in an attempt to ease the banking sector's strains.
Consumer prices edge higher, housing starts up U.S. consumer prices rose modestly last month, while new home building bounced back from an October slump, suggesting inflation is not yet a concern even as the economy's recovery moves forward. The Labor Department said on Wednesday the Consumer Price Index rose 0.4 percent in November after a 0.3 percent gain in October, pushed up by a strong increase in energy costs. Excluding food and energy however, prices were flat, cooling inflation worries in financial markets. A series of sturdy data, including a sharp rise in prices at the producer level in November, had fanned speculation the Federal Reserve -- the U.S. central bank -- could soon be forced to shift away from its pledge to keep interest rates exceptionally low for an "extended period."
1970-1982 A Possible Roadmap Part 2 Back in June 2006 I wrote an article called 1970-1982 A Possible Roadmap Part 1 which looked at the economic similarities between the first half of this decade and the 1970’s. In this article, we revisit the comparison and take it to its conclusion to the end of 1982. In just over 3 years, since the first article was written, a lot has occurred shedding some important light on the subject. When we continue to compare the two periods, some important differences are becoming increasingly apparent.
U.S. National Debt Tops Debt Limit The latest calculation of the National Debt as posted by the Treasury Department has - at least numerically - exceeded the statutory Debt Limit approved by Congress last February as part of the Recovery Act stimulus bill. The ceiling was set at $12.104 trillion dollars. The latest posting by Treasury shows the National Debt at nearly $12.135 trillion. A senior Treasury official told CBS News that the department has some "extraordinary accounting tools" it can use to give the government breathing room in the range of $150-billion when the Debt exceeds the Debt Ceiling.
Is Sovereign Debt the New Subprime? That’s a question many on Wall Street are asking as 2009 comes to a close. Just as many subprime borrowers were unable to make their mortgage payments in 2007 and 2008, investors now fear certain nations will be unable to pay their debts in the year ahead. Rising mortgage defaults and credit card delinquencies put many banks on the brink of bankruptcy in 2008, sending the global economy into a tailspin. But sovereign debt defaults are potentially even more catastrophic as they can lead to geopolitical instability, societal unrest and even war. And there will also be economic ramifications for investors worldwide, putting America’s (and the globe’s) fragile recovery at great risk.
Mort Zuckerman: Big City Commercial Real Estate Is Holding Up, Small Cities Are Toast
TARP: One Big Success but Many More Failures The Congressional Oversight Panel monitoring the Troubled Asset Relief Program concluded in its December report that TARP "proved decisive enough to stop the panic and restore market confidence," but failed to address many of the "ongoing problems" in the financial markets and the broader economy. Even in light of its failures, the panel stopped short of calling for the end of TARP. Indeed, only one member of the panel did that: U.S. Rep. Jeb Hensarling (R-Texas), the top Republican on the House Financial Services Subcommittee on Financial Institutions and Consumer Credit.
House backs $290 billion debt limit increase The House of Representatives on Wednesday narrowly voted to raise the nation's debt limit by $290 billion, enough to cover the government's financing needs for another two months. The House voted 218 to 214 to raise the debt limit to $12.394 trillion. The Senate is expected to vote on the measure before the Treasury Department reaches its current debt limit of $12.1 trillion as forecast by the end of the month. Democratic leaders in the House struggled to round up the 218 votes needed for passage amid increasing public concern about budget deficits. No Republicans voted for it, and 39 Democrats voted against it.
Obama signs $1.1 trillion spending bill into law President Barack Obama has signed into law a $1.1 trillion bill that increases the budgets in many areas of the government by about 10 percent, including health, law enforcement and veterans' programs. Obama signed the bill privately at the White House on Wednesday after receiving the bill from Congress on Sunday. The bill lumps together six of the 12 annual appropriations bills for the 2010 budget year that began Oct. 1.
Big Decision Looms on Fannie, Freddie The U.S. Treasury faces a decision by year end on whether to increase its bailout of Fannie Mae and Freddie Mac beyond the $400 billion it has already committed. So far, the companies have taken $112 billion in capital infusions from the government, and most analysts believe they are unlikely to use up the full $400 billion. But some analysts say the Treasury and regulators should take precautions, in case losses run higher than expected. After Dec. 31, the U.S. government would have to seek congressional approval for any increase. Until then, it can increase its commitment unilaterally.
Wamu asks to probe Fed over collapse Bankrupt holding company Washington Mutual Inc asked a federal court to compel the U.S. Federal Reserve, U.S. Treasury and more than a dozen others to turn over documents relating to its collapse in 2008. The company wants to investigate discussions between JPMorgan & Chase Co, regulators, competitors and rating agencies it said led to the seizure of Washington Mutual, or WMI, according to a filing in bankruptcy court on Monday. It said the alleged misconduct includes JPMorgan "disclosing confidential information, in violation of the confidentiality agreement, to government regulators, ratings agencies, media and investors in an effort to harm WMI by driving down WMI's credit rating and stock price."
Bernanke Endorses Limited Audits of Emergency Fed Lending Federal Reserve Chairman Ben Bernanke, in written responses to lawmakers this month, maintained that he’s open to congressional audits of the central bank’s emergency lending programs. But he said the reviews should be narrowly tailored to avoid probing the Fed’s monetary policy decisions.”A review of the operational integrity of these facilities could be structured so as not to involve a review of the monetary policy aspects of the facility, such as the decision to begin or end the facility or the choices made regarding, the structure, scope, design, or terms of the facility,” he wrote to lawmakers including Sens. Jeff Merkley (D., Ore.) and David Vitter (R., La.) in response to written questions tied to his confirmation. (Read responses to Sens.
Fed: Rates to stay low The Federal Reserve kept its key interest rate near 0% and appeared ready to do so for the foreseeable future, after declaring Wednesday that despite signs of improvement, the nation's economy is likely to remain weak. The fed funds rate is used as a benchmark to determine interest paid by consumers on credit cards and home equity loans, as well as the rate paid on many business loans. Fed policymakers cut the rate to a range between 0% and 0.25% in December 2008 in an effort to keep the economy from falling into a depression. It left it at that level throughout all eight 2009 meetings, even amid signs that the worst recession since the Great Depression came to an end at some point during the year.
Treasury working on new uses for bailout cash The Treasury is working on "a number of fronts" to use the government's $700 billion bailout fund to boost lending to small businesses, a senior Treasury official said on Wednesday, adding that tax incentives to boost hiring should be considered. Gene Sperling, counselor to Treasury Secretary Timothy Geithner, told Senate Democrats that Congress should "consider with an open mind ideas to encourage small businesses to hire new workers." "In so doing we should look at the jobs cycle, and ask whether at this moment -- as growth is reappearing -- there are tax incentives that could accelerate the pace at which companies move from adding hours for existing workers to hiring new employees," Sperling said in prepared remarks to the Senate Democratic Policy Committee.
House approves $154 Billion jobs package The House Wednesday overwhelmingly approved extending the filing deadline for unemployment benefits and the COBRA health coverage subsidy through the end of February. Later, the House narrowly approved a $154 billion job creation package that would provide funding for infrastructure projects and keep teachers and emergency personnel on the job. Congress has been rushing to extend the filing deadline for the safety net benefits before lawmakers leave for winter recess. As it stands now, the deadline to apply for federally paid unemployment benefits and for the 65% insurance subsidy is Dec. 31.
Stocks skid after Fed holds rates Stocks ended mixed Wednesday after the Federal Reserve left interest rates unchanged, saying market conditions were helping the recovery but weakness will persist. The Dow Jones industrial average fell 11 points, 0.1%. The S&P 500 index rose 1 point, or 0.1%, while the Nasdaq composite gained 6 points, or 0.3%. The U.S. central bank released its final policy statement of the year at 2:15 p.m. ET to capstone its two-day meeting.
Fed Keeps ‘Extended Period’ Pledge, Sees Improvement The Federal Reserve repeated its pledge to keep interest rates “exceptionally low” for “an extended period” and said the economy is strengthening. “Deterioration in the labor market is abating,” the Federal Open Market Committee said in a statement today after meeting in Washington. “Household spending appears to be expanding at a moderate rate, though it remains constrained by a weak labor market, modest income growth, lower housing wealth, and tight credit.”
Stocks stall as Fed prepares to remove supports for economy Stocks pared their gains Wednesday as the Federal Reserve reminded investors that it would end several of its extraordinary supports for the economy in the coming year. Investors had anticipated that several of the programs would be wound down as expected next year, but policymakers hadn't confirmed the precise timing. The Fed said it would leave interest rates near zero, as the market had expected, but policymakers also noted that weakness in the job market is "abating." Fed governors made the assessment in a statement following a two-day meeting to discuss interest rate policy.
THE TRUE DANGER LURKING BEHIND 0.00% TREASURY YIELDS AND THE 1-3-6 RULE Many a moon ago, a strange comment was made to me by what might be called a ’sage’ in the idea of trading in markets of all types. If it appeared that too much money was pouring into one particular investment or vehicle, then something was wrong with the efficient functioning of that market. Forever and a day I ignored this sage and probably should not have. Think about what we have witnessed since the great “crisis” began. In February of 2007 when the first cracks became evident that our subprime society was filled with cracks and that an earthquake was imminent with the failure of several medium sized mortgage lenders, the notion that we should expect an all out collapse was there and certain celebrity investors and talking heads made billions from the idiocy and misfortunes of those who thought that nothing could be whipped into something profitable and the residue they wiped on the curb by that fire hydrant was actually gold. Oops again.
Federal Reserve to wind down several emergency programs The Federal Reserve will allow several of its special programs supporting credit markets to expire early next year, winding down some of the unconventional efforts to prop up the financial system during the depths of the 2008 crisis. The Fed said Wednesday, following a two-day policymaking meeting, that it will allow five special lending programs -- designed to support money market mutual funds, short-term corporate lending and investment banks -- to cease to exist Feb. 1. It will also move to wind down special arrangements to pump hundreds of billions of dollars into other nations' banking systems.
Government Reconsiders Quick Sale of Citigroup Stake Just when Vikram S. Pandit thought he was out, Washington is pulling him back in. Two days after Mr. Pandit trumpeted news that Citigroup would start untangling itself from the federal government, his bank stumbled — this time, on Wall Street. Badly misreading the financial markets, the company struggled on Wednesday to raise the money it needed to repay its bailout funds. While Citigroup managed to raise $20.5 billion in the stock market and will forge ahead with the repayment, the sale went so poorly that anxious Treasury officials reversed course and delayed their plans to start unwinding the government’s stake in the company immediately, according to people briefed on the matter.
Treasury Halts Plan to Sell Off Citi Stock The U.S. government abruptly shelved plans to start trimming its 34% stake in Citigroup Inc., after investors demanded a price so low that the Treasury Department would have lost money on the deal. The embarrassing reversal came two days after the Treasury said it planned to sell as much as $5 billion of stock in the New York company, as part of Citigroup's plan to pay back $20 billion in taxpayer aid the troubled bank received last year. The huge offering encountered a lukewarm reception on Wall Street, where investors were skeptical of the company's earnings prospects and had already spent heavily on shares of rival banks this week.
Tax breaks continue for bailed-out banks Government ownership is issue Citigroup and other banks starting to repay the billions of dollars they borrowed from the government are getting another boost as they exit the bailout program: Billions more in tax breaks. Tax law allows money-losing corporations like Citigroup Inc. and General Motors Co. to use current net operating losses to offset future taxable income, reducing their tax bills for up to 20 years after the losses occur. Under ordinary circumstances, those tax breaks would be severely limited if the companies underwent an ownership change, much as many of them did when the government acquired big blocks of their stock.
U.S. gave up billions in tax money in deal for Citigroup's bailout repayment DEAL MADE TO RECOVER BAILOUT Firms exempted from rule when U.S. sells its stake The federal government quietly agreed to forgo billions of dollars in potential tax payments from Citigroup as part of the deal announced this week to wean the company from the massive taxpayer bailout that helped it survive the financial crisis. The Internal Revenue Service on Friday issued an exception to long-standing tax rules for the benefit of Citigroup and a few other companies partially owned by the government. As a result, Citigroup will be allowed to retain billions of dollars worth of tax breaks that otherwise would decline in value when the government sells its stake to private investors.
Abu Dhabi Seeks Exit From Citi Deal The Middle East's largest sovereign-wealth fund by assets is seeking to scrap a two-year-old agreement with Citigroup Inc. that would lead to a heavy loss for the fund on a $7.5 billion investment in the bank. The Abu Dhabi Investment Authority, controlled by the rulers of the Persian Gulf city-state, has filed an arbitration claim against Citigroup in New York, the lender said. Citigroup said Adia is seeking more than $4 billion in damages for what it alleges were "fraudulent misrepresentations" of the original agreement to invest in the bank if the agreement is upheld.
Bank failures spur FDIC budget increase he Federal Deposit Insurance Corp. said Tuesday its 2010 budget will jump to $4 billion from $2.6 billion this year, and announced plans to hire more than 1,600 mostly temporary employees as it continues to grapple with a rising number of bank failures. The FDIC's board voted at a public meeting to approve the 2010 budget, which includes $2.5 billion for resolving failed banks taken over by the agency. That's up from $1.3 billion in 2009. The hiring plans will bring the number of FDIC employees to 8,653.
Related Group Expects Banks to Take Over Miami Condo Project MIAMI—A group of lenders led by HSBC Holdings PLC and Bank of America Corp. are likely to take ownership of Icon Brickell, a Miami condominium and hotel complex, according to Jorge Pérez, chairman of Related Group, the current owner of the project. "The negotiations are almost finished," Mr. Pérez said in an interview Wednesday. He said he hoped the agreement would allow Related Group to remain the manager of the three-tower complex near downtown Miami, featuring décor and sculptures designed by Philippe Starck. Representatives of HSBC and Bank of America declined to comment on the talks.
Reserve currency of little benefit to US The US enjoys little advantage from the dollar’s status as the world’s reserve currency, according to research released on Thursday. A report from McKinsey Global Institute , the research arm of the management consultancy, says that far from enjoying an “exorbitant privilege” from the dollar’s status, the benefits to the US are modest. In a “normal” year, the management consultancy estimates a net financial benefit to the US of between $40bn and $70bn, or 0.3 to 0.5 per cent of GDP. Seigniorage, the financial benefit gleaned from non-residents holding US notes and coins, generates an estimated $10bn a year, the consultancy says.
Euro to Appreciate to $1.55 in Three Months, Goldman Sachs Says Goldman Sachs Group Inc. recommended its clients buy the euro versus the dollar, forecasting the common European currency will rise to $1.55 in three months amid an anemic U.S. economic recovery. The dollar reached a two-month high of $1.4504 per euro yesterday on speculation U.S. growth is gathering momentum and as Greece struggled to address concern that it isn’t doing enough to reduce its debt.
Mexico Credit Rating May Be Cut Further, Ramirez Says Mexico’s credit ratings may be cut further next year as the budget gap swells more than the government forecast, said Rogelio Ramirez de la O, the economist who predicted the 1994 peso devaluation. The deficit will widen to at least 5 percent of gross domestic product next year, almost double the government’s forecast of 2.8 percent, as the economic slump erodes tax revenue, Ramirez said. Standard & Poor’s cut Mexico one level to BBB, the second-lowest investment-grade rating, on Dec. 14, three weeks after Fitch Ratings made the same move on concern falling oil output was driving up the deficit.
What a difference a year will make Higher rates are likely for some filers in 2011, and 2010 could bring tax overhaul Some Americans likely will find their tax bills rising in about a year. The George W. Bush-era tax cuts expire at the end of 2010 and the current outlook is that high-income Americans will take the brunt of the pain as income-tax and capital-gains rates revert to higher levels. But experts also say it's highly likely Congress will act to protect middle- and lower-income taxpayers.
Goldman Sachs Blamed by Teamsters for Driving YRC Toward Ruin The International Brotherhood of Teamsters blamed Goldman Sachs Group Inc. for making derivatives trades that would benefit from the bankruptcy of YRC Worldwide Inc., the biggest U.S. trucker by sales. “The relatively small benefit Goldman would derive for itself in fees or for clients from such a position is unconscionable given the fact that the 50,000 livelihoods could be ruined by a bankruptcy filing,” Teamsters President James Hoffa wrote in a letter dated today to Goldman Sachs Chief Executive Officer Lloyd Blankfein.
Best Buy sinks on Wal-Mart threat Best Buy warned that steep discounts on laptops and big-screen TVs are hurting holiday margins, raising worries that the retailer faces a tough battle with Wal-Mart. Shares of the No. 1 electronics chain -- which this year had soared more than 60 percent to hit a 52-week high on Monday -- yesterday plunged $3.84, or 8.5 percent, to $41.53. That was their biggest one-day drop in more than a year.
‘Buy American’ Rules Strengthened in U.S. Measure “Buy American” rules requiring the use of U.S. goods in construction projects would be strengthened under legislation the U.S. House of Representatives approved today. Provisions in the $154 billion economic-aid measure would make it more difficult for government agencies to waive the requirement that most steel and manufactured goods used for highway and bridge projects be produced in the U.S. The waiver process has been “out of control,” Scott Paul, executive director of the Alliance for American Manufacturing, which represents U.S. Steel Corp. and the United Steelworkers union. “Waivers have eroded the impact and intent of our domestic content laws.”
Two major downtown Phoenix developments get go-ahead from city council Two new hotel brands now call Downtown Phoenix home, after Phoenix City Council approved separate development deals paving the way for the properties. Council members OK'd one deal One Central Park East that includes plans for a 280-room Westin hotel and corporate headquarters for Freeport-McMoRan Copper and Gold Inc., and another that rebrands the existing 520-room Wyndham hotel as a Marriott Renaissance.
U.S. consumers fall behind in holiday shopping: NRF The holiday shopping that consumers have completed so far this season is at a five-year low, according to a new survey, raising the stakes for retailers in their last major push to capture sales this year. Consumers on average had completed 46.7 percent of their holiday shopping by the second week of December, according to the survey by the National Retail Federation released on Wednesday. That is down from the 47.1 percent completed by this time last year and marks the lowest percentage completed since 2004. The NRF still expects total holiday season sales to fall 1 percent this year, an unprecedented drop for two straight years since a financial markets crisis erupted in late 2008.
Spendthrift to Penny Pincher: A Vision of the New Consumer Next spring, Fine Living Network, a cable channel created in 2002 at the height of America's infatuation with affluent living, is slated to be phased out. In its place, Scripps Networks Interactive Inc. will launch the Cooking Channel. Gone will be "I Want That!" celebrating diamond-encrusted sinks, and "Dream Drives," showcasing America's richest zip codes. Instead, viewers will see shows focusing on instructional cooking at home.
When Good Customers Become Bad Bill Payers When credit markets seized up more than a year ago, many small businesses were caught flat-footed. Their clients were not paying, or were paying more slowly, and the owners were left emotionally stressed and financially damaged. But after the initial shock wore off, those owners have come up with a variety of ways to make sure they do get paid. The National Federation of Independent Business, which has 350,000 members, signed up 200 members for a Web seminar on collections, said Karen Harned, executive director for the organization’s small-business legal center. “This is always a big issue for small-business owners.”
That Tap Water Is Legal but May Be Unhealthy The 35-year-old federal law regulating tap water is so out of date that the water Americans drink can pose what scientists say are serious health risks — and still be legal. Only 91 contaminants are regulated by the Safe Drinking Water Act, yet more than 60,000 chemicals are used within the United States, according to Environmental Protection Agency estimates. Government and independent scientists have scrutinized thousands of those chemicals in recent decades, and identified hundreds associated with a risk of cancer and other diseases at small concentrations in drinking water, according to an analysis of government records by The New York Times.
Overlooked 150-Year-Old Household Cleaner a Remedy for Swine Flu? In today’s modern world of medicine the FDA just will not let companies that sell products make medical claims about them unless they have been tested at great expense, and approved as a drug. But this was not always the case. In a 1924 booklet published by the Arm & Hammer Soda Company, the company starts off saying, “The proven value of Arm & Hammer Bicarbonate of Soda as a therapeutic agent is further evinced by the following evidence of a prominent physician named Dr. Volney S. Cheney, in a letter to the Church & Dwight Company:
Single-payer health care plan dies in Senate The liberals' longtime dream of a government-run health care system for all died Wednesday in the Senate, but Sen. Bernie Sanders of Vermont vowed it will return when the realization dawns that private insurance companies "are no longer needed." The proposal's demise came as Senate Democratic leaders and the White House sought agreement with Sen. Ben Nelson, D-Neb., to become the 60th supporter of President Barack Obama's health care overhaul -- the number needed to overcome a Republican filibuster.
President Obama: Federal Government 'Will Go Bankrupt' if Health Care Costs Are Not Reined In President Obama told ABC News’ Charles Gibson in an interview that if Congress does not pass health care legislation that will bring down costs, the federal government “will go bankrupt.” The president laid out a dire scenario of what will happen if his health care reform effort fails. “If we don't pass it, here's the guarantee….your premiums will go up, your employers are going to load up more costs on you,” he said. “Potentially they're going to drop your coverage, because they just can't afford an increase of 25 percent, 30 percent in terms of the costs of providing health care to employees each and every year. “
Why Joe Lieberman is holding Barack Obama to ransom over healthcare Democrats accuse Gore's former running mate of bitterness and vanity after he uses his deciding vote in Congress to water down president's reforms Joe Lieberman has long gone rogue in his own way. The senator from Connecticut and former Democratic vice-presidential candidate may not be quite out there with that other contender for high office, Sarah Palin. But Lieberman – a professed liberal who supports access to abortion, gun control and some gay rights – infuriated former allies and Democratic voters in his own state with support for George Bush's war in Iraq, and astonished them by campaigning for John McCain and Palin in last year's presidential election.
Israel Threatens International Law A humanitarian crisis of monumental proportions is happening in Gaza. At long last, a United Nations committee on Palestinian rights today called on the international community “to take urgent and decisive action against the continued illegal Israeli actions,” warning that Israel’s settlement activities in the occupied Palestinian territory risk undermining the whole structure of international law. That is an extremely strong statement coming from such a source. Indeed, Israel has been since its inception at the core of flagrant violations of international law and UN resolutions.
Barack Obama sends letter to Kim Jong-il Personal letter from US president seeks to persuade North Korean leader to return to nuclear disarmament talks Barack Obama has sent a letter to North Korea's leader Kim Jong-il to persuade him to return to nuclear disarmament talks. The US president's special envoy, Stephen Bosworth, delivered the letter while visiting Pyongyang last week for three days of discussions with officials. Obama hopes to encourage North Korea to return to talks over denuclearisation. The country left aid-for-disarmament discussions a year ago, vowing never to return. It subsequently tested a nuclear device in May.
Scientific Goals May Be Missed by Copenhagen Climate Agreement World leaders taking control of stalled climate talks today in Copenhagen may find the measures acceptable to 193 nations fall short of what scientists demand to slow global warming. Developed nations such as the U.S. and Japan may agree by tomorrow to cut greenhouse-gas emissions by about half what United Nations scientists said are needed to keep the planet from overheating. That’s a view shared by representatives of the Pew Center on Global Climate Change, Merrill Lynch & Co. and the European Commission, which represents 27 European nations.
U.S. to Capture Cow Farts to Save the Planet In the future, America will harness cow farts to curb pollution and power the grid. What? It sounds like a joke, but it's actually a real promise. By 2020, dairy industry emissions will be reduced by 25%, largely by persuading dairy farmers to capture methane gas, U.S. Agriculture Secretary Tom Vilsack announced at the Copenhagen climate change summit this week. Farmers will be able to buy anaerobic digesters that convert cow, errr, emissions into electricity. You've heard the over-simplified message from vegetable-positive environmental groups: eating animal products is a big cause of global warming. Indeed, 7% of the greenhouse gas emissions produced from U.S. sources are from agriculture. The dairy industry is ripe for change, with only 2% of the farmers whose operations are suited for methane capture currently making use of it.
Climate Talks Near Deal to Save Forests COPENHAGEN — Negotiators have all but completed a sweeping deal that would compensate countries for preserving forests, and in some cases, other natural landscapes like peat soils, swamps and fields that play a crucial role in curbing climate change. Environmental groups have long advocated such a compensation program because forests are efficient absorbers of carbon dioxide, the primary heat-trapping gas linked to global warming. Rain forest destruction, which releases the carbon dioxide stored in trees, is estimated to account for 20 percent of greenhouse gas emissions globally.
Rich Nations Offer $3.5 Billion to Fight Deforestation In what may be the first big news to come out of the contentious Copenhagen climate summit, six developed nations put their money on the table and made a big pledge to subsidize forest preservation. The U.S., Australia, Britain, France, Japan and Norway agreed to fund a program to stop deforestation, which is considered a major cause of global warming. Trees absorb carbon from the atmosphere and the growing deforestation has diminished arboreal belts around the globe. While a positive step, it remains a limited program with a planned duration of only two years.
The biggest threat for 2010 – countries going bust The sovereign debt disease is spreading, and looks set to be the big bad news story of 2010. This time it's Greece that's in trouble – and that's official. Just as the 'don't panic' brigade were telling us not to fret about Dubai World defaulting – not big enough to matter, it's an isolated case, surprised it didn't happen before, etc, etc – a much bigger problem has cropped up. Greece has had its credit score chopped by one major rating agency, and more of the same could be on the way.
Putting our economy in the hands of Chavez fans These maniacs in Copenhagen are voting on your future: President Chavez brought the house down. When he said the process in Copenhagen was “not democratic, it is not inclusive, but isn’t that the reality of our world, the world is really and imperial dictatorship…down with imperial dictatorships” he got a rousing round of applause. But then he wound up to his grand conclusion – 20 minutes after his 5 minute speaking time was supposed to have ended and after quoting everyone from Karl Marx to Jesus Christ - When he said there was a “silent and terrible ghost in the room” and that ghost was called capitalism, the applause was deafening.“our revolution seeks to help all people…socialism, the other ghost that is probably wandering around this room, that’s the way to save the planet, capitalism is the road to hell....let’s fight against capitalism and make it obey us.”He won a standing ovation.
Standard and Poor downgrades Greece Ratings agency Standard and Poor's downgraded Greece's credit rating Wednesday, voicing doubts that recent measures announced by the center-left government would tame the country's ballooning public debt. Last week another agency, Fitch, cut its own rating on Greece's national debt. The Greek government said it was taking the new setback "into serious consideration," but defended its plans for righting the economy. Greece has been facing its worst debt crisis in decades amid the global recession. It faces political pressure from the European Union to straighten out its finances and obey deficit limits intended to support the shared euro currency.
White House condemns Iran missile test The White House responded sharply Wednesday to word that Iran has tested an upgraded version of its most advanced missile, which is capable of hitting Israel and parts of Europe. "At a time when the international community has offered Iran opportunities to begin to build trust and confidence, Iran's missile tests only undermine Iran's claims of peaceful intentions," said Mike Hammer, a National Security Council spokesman. "Such actions will increase the seriousness and resolve of the international community to hold Iran accountable for its continued defiance of its international obligations on its nuclear program."
Worth seeing again. . . Did you know? An interesting presentation. Shift happens! Updated for a Sony BMG executive meeting June 2008.
Shadowstats' John Williams: Prepare For The Hyperinflationary Great Depression John Williams, who runs the popular counter government data manipulation site Shadowstats, has thrown down the gauntlet to deflationists, and in an extensive report concludes that the probability of a hyperinflationary episode in America over the next year has reached critical levels. While the debate between deflationists and (hyper)inflationists has been a long and painful one, numerous events set off in motion by the Bernanke Fed (as a direct legacy of the Greenspan multi-decade period of cheap and boundless credit) may have well cast America as the unwilling protagonist in the sequel of the failed monetary policy economic experiment better known as Zimbabwe. Williams does not mince his words:
If You Thought The Economy Was Being Inflated By The Stimulus, You Ain't Seen Nothing Yet Think the economy is being inflated by economic stimulus right now? Well if that's the case, then get ready for a ride over the next two years. The majority of Obama's stimulus hasn't even been spent yet. Thus the support won't disappear any time soon, and actually could accelerate. There's still another 70% to go. Slate: Since it was passed in February 2009, only $237.6 billion (30 percent) of the $787 billion package has entered the economy.
The Critical Unraveling of U.S. Society The economic elite have launched an attack on the U.S. public and society is unraveling at an increased rate. You may have missed it in the mainstream news media, but statistical societal indicators are reading red across the board. Before exposing the root causes of this breakdown, let’s look at some vital statistics and facts: . . . As the looting is occurring at the top, the US middle class is just beginning to collapse. . . . President Obama has enacted a $75 billion taxpayer funded program that has been a spectacular failure in stemming the foreclosure crisis and has proven to be another massive waste of billions of taxpayer dollars. . . . This means we have 25 million people who urgently need to increase their income, and they’re quickly running out of options. The unemployment rate is expected to rise further and remain high for several years. “The president’s chief economic adviser warned that the nation’s unemployment rate could stay ‘unacceptably high’ for years to come.”. . .
Fed Copies Weimar Hyperinflation
Predictions for the Next 10 Years . . . . Governments will find that they are unable to restrain themselves from printing ever more money in an endless wave of uncontrolled emission. At the same time, rising taxes, commodity prices, and costs of all kinds, coupled with a rising overall level of uncertainty and disruption, will curtail economic activity to a point where little of that money will still circulate. Inflationists and deflationists will endlessly debate whether this should be called inflation or deflation, unconsciously emulating the big-endians and little-endians of Jonathan Swifts Gulliver's Travels, who endlessly debated the proper end from which to eat a soft-boiled egg. The citizenry, their nest egg boiled down to the size of a dried pea, will not be particularly vexed by the question of exactly how they should try to eat it, and will regard the question as academic, if not idiotic.
What Likely Lurks Around the Corner In the short term, a catastrophic deflation is quite possible. But in the long term, extremely high levels of inflation are now inevitable. The situation is very serious. Gold is the best hedge against both of these things. The better part of your financial assets should be in gold, augmented by well-thought-out speculations. Doug Casey, November, 2009. Doug Casey and the editors at Casey Research are very skeptical that we are experiencing any sort of economic recovery. In our opinion, too many economic indicators are based on faulty data and optimistic assumptions. Our research suggests that a recovery isn’t sustainable yet. And with that, we lack the foundation needed to support the rapidly rising stock markets.
World Crisis: No Bailout Will Stop It Sometimes, a bailout is not enough. When Dubai World black swanned global investors last month with what amounts to be a reported $80 Billion in debt liabilities, it sent shivers down the spine of many a financial manager and stock trader. For those who were paying attention, Dubai’s troubled assets were no surprise, it was simply a matter of time. Oft repeated by contrarian analysts and investors like Dr. Doom Marc Faber, Gerald Celente, Jim Rogers, and Karl Denninger, the mathematical certainty of the economic crisis would play out - eventually.
U.S. gave up billions in tax money in deal for Citigroup's bailout repayment Deal made to recover bailout Firms exempted from rule when U.S. sells its stake The federal government quietly agreed to forgo billions of dollars in potential tax payments from Citigroup as part of the deal announced this week to wean the company from the massive taxpayer bailout that helped it survive the financial crisis. The Internal Revenue Service on Friday issued an exception to long-standing tax rules for the benefit of Citigroup and a few other companies partially owned by the government. As a result, Citigroup will be allowed to retain billions of dollars worth of tax breaks that otherwise would decline in value when the government sells its stake to private investors.
Are we being shortchanged by TARP repayments By letting banks exit the $700-billion program that saved them, the government may be giving up what could have been an effective tool of leverage over this misbehaving industry. The headlong rush by big banks to pay back their TARP bailout loans -- Citigroup is the latest candidate looking for the exit -- has prompted a lot of stock-taking about this widely detested $700-billion program. Among the questions being aired: Has the Troubled Asset Relief Program worked? Have the taxpayers made a profit on the deal? Did we force loan terms upon those banks on the brink of extinction last year that were too steep, or not steep enough?
Out from under TARP, banks are now free to fail again There's the president of the United States, sitting in the Cabinet room at the White House, cameras rolling, talking with the heads of the country's biggest banks, each one of which had benefited from an extraordinary government effort last year to prevent the financial system from collapsing. The purpose of the meeting is to pressure banks to make more credit available to small businesses, to restructure delinquent mortgages rather than pushing them into default and to call off their lobbyists, who have been trying to water down the administration's proposal to reform and strengthen bank regulation.
U.S. red ink flirts with crisis, panel warns Dire projections put public debt at 200% of GDP by 2038 A bipartisan commission of fiscal analysts warned Monday that the U.S. public debt is piling up so rapidly that it threatens to plunge the nation into crisis if Congress and the White House do not reverse course within two years. In the past year alone, the U.S. debt level soared from 41 percent of gross domestic product (GDP) to 53 percent, said the report by the Peterson-Pew Commission on Budget Reform, prepared in cooperation with the Committee for a Responsible Federal Budget.
Economic Contraction will Continue in 2010 My wife and I watched Oprah interviewing President and Mrs. Obama for her Christmas Special. The closing message that President Obama tried to communicate was one of hope – that the worst is behind us and, with hard work and determination, America can rebuild. Whilst the sentiments are admirable and probably believable in terms of America’s ability to rebuild – and possibly even true – there are serious questions regarding whether the worst is behind us. . . . . . . . So, whether or not President Obama is correct that the USA has the capacity to rebuild itself if its citizens apply their minds is not particular relevant. The more important question is whether he is correct in his statement that the worst is over. The answer to this question is probably “no”.
How Washington Will Mess with Your Money in 2010 Martin Hutchinson writes: In this era of growing government involvement, it's no surprise that Washington is poised to be the biggest economic wild card of the new year. Indeed, investors who are trying to estimate the impact that politics will have on their portfolios in 2010 are likely finding this attempt at analysis to be an exercise in futility. If that's been the case, read on: Political pundits - even those who claim to be impartial - spend a lot of time trying to score points for their side. But they aren't really that interested in the economic aspects of the endless battle. I certainly don't claim to be any more unbiased than the next person. However, I thought it worth trying to take an educated guess at what will actually happen, and what it will mean for our money.
Ignorant Americans Cutting Back On Spending More Than Investing After suffering $12 trillion in losses to their investment portfolio over the past two years, you might think that Americans would be hesitant to keep pouring money into the markets. Couple that with the fact that many Americans completely missed the stunning rally of 2009 and the signs that we might be headed for massive inflation that could wipe out many investment gains. This should be a recipe for Americans spending their dollars instead of risking them to inflation or further declines in buying power. But that’s not what’s happening at all.
Marc Faber, Gerald Celente, and Jim Rogers Agree No bailout will stop the global economic crisis. When Dubai World black swanned global investors last month with what amounts to be a reported $80 Billion in debt liabilities, it sent shivers down the spine of many a financial manager and stock trader. For those who were paying attention, Dubai’s troubled assets were no surprise, it was simply a matter of time. Oft repeated by contrarian analysts and investors like Dr. Doom Marc Faber, Gerald Celente, Jim Rogers, and Karl Denninger, the mathematical certainty of the economic crisis would play out – eventually.
Gold: how high will the price go in 2010? Gold rose to a record high in 2009, but can it continue to rise above the $1,200/oz level, or will it fall back? "Notwithstanding the recent correction – and the possibility that gold may yet fall further before bargain hunters and other buyers (including central banks) reappear – the four pillars of gold-price strength remain intact. They are inflation-fueling US monetary and fiscal policies; Central bank reserve diversification with the official sector being a taker rather than a supplier of gold in 2009 and the next few years; expanding retail and institutional investor participation in the United States, China, and around the world; and declining world gold-mine production.
Gold's 'Money' Value is $4,000 to $11,000: Market Strategist Federal Reserve officials on Thursday downplayed the consequences of the falling U.S. dollar, pounting to deflation as a lingering threat. The dollar has fallen 7 percent so far this year and likely has become a funding vehicle for bets on higher-yielding currencies in growing emerging markets. So how should investors guard their portfolios? Jim Rickards, senior managing director of market intelligence at Omnis, shared his insights.
Gold hovers near $1129 in Asia Gold prices remained higher in Asian trade Tuesday ahead of a crucial Fed meet scheduled for later today. Bullion prices firmed as the dollar stayed weak on improved risk tolerance after concerns eased about Dubai's debt woes.
‘A correction is good for gold as it was overbought’ . . . . In the first place, I said "coins and bullion" to differentiate from buying shares in the gold companies. I think it's important for discovery investors, in particular, to hold the physical gold. And I said "you must hold it" because I think bad things are going to happen to our currency, even though right now we're having a covering of the short dollar position and commodities are getting hit a little bit. I am not suggesting that they necessarily need to buy a lot more of the physical metals. I am certainly very happy that gold came off $66 the first week in December and another $66 or so during the following week. So this is correction great; this is wonderful.
Gold mostly unchanged as Fed meeting eyed Gold prices were mostly flat on Wednesday as traders refrained from betting heavily in either direction before they see if the Federal Reserve provides any clues on the timing of interest rate moves. On Tuesday, gold was pulled both ways due to the dollar's strength and inflation fears. The stronger dollar pressured gold while that was countered by inflation fears ignited by an unexpected jump in producer prices and rallying oil prices. Shuji Sugata, a manager at Tokyo's Mitsubishi Corp Futures Ltd, said the gold market was wary of trading heavily in either direction ahead of the Fed meeting. "There's a sense of caution and with the firm dollar this is capping gold's upside today," he said. But Sugata said gold was not falling heavily either due to bargain hunting at lows. The Fed is due to complete its policy meeting on Wednesday.
'Gold is pouring from weak hands to strong' A sea change is coming. But what is it? I spent 4 hours on the phone last night with my trader "The Brain" discussing this and other gold-related issues. When you make 30% a year for 10 years in a row, trading only gold including 2008, when that is all you do, trade Gold, with miniscule drawdowns, little or zero leverage, and win 7 out of 10 trading days, with a dollar win to loss ratio that is in the stratosphere, with thousands of trades, while holding a core gold position from vastly lower prices, while being a gold powerbull for the long term, you are a person I will spend hours on the phone with, discussing in great detail how your thoughts and actions can benefit both my subscribers, and the general gold community. That is the brain. When I talk to the brain about the market, I feel like a huge "goldmind" is enveloping me.
How to Make Convincing Fake-Gold Bars On Wednesday, the BBC reported that millions of dollars in gold at the central bank of Ethiopia has turned out to be fake: What were supposed to be bars of solid gold turned out to be nothing more than gold-plated steel. They tried to sell the stuff to South Africa and it was sent back when the South Africans noticed this little problem. This is an amazing story for two reasons. First, that an institution like a central bank could get ripped off this way, and second that the people responsible used such a lousy excuse for fake gold.
Fake fears over Ethiopia's gold Ethiopia's national bank has been told to inspect all the gold in its vaults to determine its authenticity. It follows the discovery that some of the "gold" it had bought for millions of dollars was gold-plated steel. The first hint that something was wrong reportedly came when the Ethiopian central bank exported a consignment of gold bars to South Africa. The South Africans sent them back, complaining that they had been sold gilded steel.
Short term gold likely to ease on hovering dollar This has been a great year for gold, but investors can’t seem to shake the jitters they acquired in 2008, when prices plunged 35% between March and October after poking briefly above $1000 for the first time. Is last week’s 10% selloff the beginning of another murderous correction? We don’t think so, although it could take a few more weeks for prices to consolidate for the next strong push.
Gold expected to regain its shine Uncertainty has led investors to the traditionally safe asset but it, too, has had an unpredictable year. If you want confirmation that fear and uncertainty still rule investment markets, look no further than the gold price, which is proving more volatile than the weather. This month the investment herd went charging for the perceived safety of gold, pushing the price to record highs above $US1200 an ounce in the face of a collapsing US dollar and fears of a stimulus-induced spike in global inflation.
An Unbelievable Opportunity in Gold Yes, there is no typo in the headline of this article. Today there is still an unbelievable opportunity to invest in gold that will disappear over the next several years as this monetary crisis deepens. Despite the general widespread sentiment of Western financial advisers that they have missed the run-up in gold and now it is too late to buy, this is not true at all. In fact, to illustrate how little people understand about the reasons to buy gold, of all my friends that I urged to buy physical gold more than six years ago when gold was less than half of its current price, I only know of one that has bought any gold, and it still took five years of my prodding, four times a year, for this single person to purchase gold.
Ron Paul Bill Seeks Coin and Bullion Tax Ban Congressman Ron Paul [R-TX] on Wednesday introduced legislation that would, if signed into law, end taxes on coins and bullion and repeal legal tender laws. The bill’s lofty goal is to reintroduce a system of competing currencies.
Gold Buying by Central Banks Signals Sell as Past Haunts Future Some of the biggest buyers of gold may be sending the strongest signal to sell it, if past performance is indicative of future results. Central banks, holding about 18 percent of all gold ever mined, are expanding their reserves for the first time in a generation as a nine-year bull market drives prices to a record.
Fabrice Taylor: The gold bubble myth It's easy to say gold is a bubble. It's up more than 26 percent in the past six months, so it has to be, right? Maybe, but I doubt it, for both obvious and less obvious reasons. Gold isn't as attractive as it was when no one wanted to own it a few years ago. Back then it was a no-brainer, trading for less than the marginal production cost. Today there's hot money in bullion, making it susceptible to sharp corrections. But the rally has legs nonetheless. Let's start with the obvious: Gold is up, true, but put it in a longer perspective and you'll find that gold is actually lagging other assets, and consumer prices. Since the start of the great bull market in 1980, gold is up only about 60 percent. Inflation, officially anyway, is up roughly 175 percent and stocks are up almost 900 percent. U.S. money supply is up nearly 500 percent. The price of something in a bubble tends to zoom ahead of everything. Gold has in the very short term but it's only catching up to other assets.
Why Precious Metals Aren't in a Bubble Critics of precious metals investing have called gold and silver a bubble, further claiming that today's higher prices will fade as economic conditions improve. Although gold and silver prices are much more expensive than they were even a few years ago, gold and silver are hardly near bubble status. Scarce Ownership of Precious Metals One of the most prominent reasons that gold and silver aren't yet a bubble is that very few casual or institutional investors own physical gold and silver. A recent poll of professional money managers indicated that fewer than 30% have ever purchased gold for their clients. Ownership of gold is even rarer in the general populace, as investors have to go out of their way to buy physical metals.
Michael Pascoe and the Snarky Disinformation About Gold . . . . Yep. Situation normal, all fouled up. The oil price, the U.S. dollar, and bond yields were all up on bullish industrial production figures in the U.S. The "recovery" meme is taking a tenuous hold. Stocks were down. Because why would stocks rise if the economy were recovering? Ah. Well that tells you something right there. It tells you that stocks haven't risen in anticipation of a global recovery. They're just enjoying the benefits of all that monetary and fiscal smack being peddled in Washington, London, Tokyo and Canberra. It's hard to rally on fundamentals when you're already over-valued.
Not Too Late to Buy Gold: Beware of Global Bumps Ahead, Lynn Tilton Says With markets still rallying from March lows, it's easy to wonder if the window is closed for investors who've been waiting on the sidelines. Not so says our guest, Lynn Tilton, founder and CEO of Patriarch Partners, a private equity fund with more than $7 billion under management. The fund focuses on distressed assets. With the recession in full swing, there are plenty of businesses and name brands available at affordable prices. "We're seeing a tremendous opportunity in companies that have got beaten down," Tilton tells Aaron. "Buy for the long term."
Bullion: What is this fuzz about IMF gold? Not a single day passes, perhaps, without the bullion markets around the world discussing gold reserves, the yellow metal price boom and which country will next buy gold from the International Monetary Fund (IMF). Why is IMF gold a hot commodity these days? Ever since India bought 200 tonnes of gold from IMF last month, there have been heated discussions and speculation that several countries and central banks around the world are queuing up to amass gold from IMF in an attempt to build their foreign exchange reserves in the wake of weakening US dollar. Most countries including India and China—the two largest gold consuming nations in the world—have US dollar as most part of their foreign exchange reserves kitty. Now, China, India and other countries want to move away from dollar to gold, for all perceive gold as a stable currency than a hot commodity!
Gold Correction Targeting and Inter-market Dynamics The following excerpt is a small sampling of this week’s full market wrap report, which covers all the major markets in detail, with the emphasis on gold and the precious metals. Before covering the pm sector, I’d like to discuss some inter-market dynamics that have contributed to the hot money flows recently affecting the markets.
Gold Near-Term Trend Analysis and Forecast Can Gold hold the channel? What are we referring to? First, let us go back to the end of 2005. The chart shows how a parallel channel contained Gold’s move from 2001 to 2005. The first move above $500 reversed after hitting channel resistance. Yet, the market would immediately surge above the channel to $575. Then the market corrected for five weeks and two weeks later broke to a new high.
Gold investment boom thanks to NASDAQ Dubai Gold investment trends and its demand supply dynamics in the third quarter 2009 will be detailed to investors via a webinar to be hosted by Dubai Gold Securities on December 16. Gold has remained a preferred investment through the economic downturn and has continued to attract capital flows given a climate of uncertainty and investor appetite for a US dollar and inflation hedging tool. This is evident in gold’s third quarter performance, which reflects continued flows into gold investment products, including ETFs. In the Middle East, the investment category has grown steadily on a sequential basis.
Why silver is not outpacing gold in current bull run A bizarre anomaly of gold's recent strong runup was the unusually poor performance of silver, which normally outpaces gold noticably during the middle and later stages of an uptrend. It did not gain any serious traction and is already back below its September peak. The fact that it did not even manage to break out to new highs is taken as a non-confirmation of gold's move, as is the failure of the PM stock indices to make new highs, and is viewed as bearish for the sector over the intermediate-term, meaning the coming 2 to 6 months.
Deflation or Inflation, Which Lurks Around the Corner? In the short term, a catastrophic deflation is quite possible. But in the long term, extremely high levels of inflation are now inevitable. The situation is very serious. Gold is the best hedge against both of these things. The better part of your financial assets should be in gold, augmented by well-thought-out speculations. Doug Casey, November, 2009.
U.S. Dollar Hedging Strategy Using Golden Commodity Currencies Discovery Investing pioneer Dr. Michael Berry's number-one hedging strategy against the struggling U.S. dollar is to simply own currencies of the commodity countries—of which Canada is his favorite. When Michael grew up in Canada, he recalls its currency— now fondly known as the loonie because of the image of the loon used on the die for the back of the C$1 coin—always being worth more than the U.S. dollar. We'll be revisiting those good ol' days within the next year, he predicts, as the Canadian dollar reaches parity with the greenback and then goes beyond.
Asian Currencies Fall, Led by Won, Peso on Greece, Banking Risk Asian currencies declined, led by South Korea’s won and the Philippine peso, on concern credit losses at European banks will reduce investor appetite for emerging-market assets. The won dropped the most in week on speculation deteriorating public finances in Greece boosted demand for the relative safety of the U.S. dollar. The dollar rose to a more than two-month high against the euro amid speculation improving economic data in the U.S. will spur the Federal Reserve to signal an exit from easing policies. Austria yesterday nationalized Hypo Alpe-Adria Bank International AG and injected 450 million euros ($656 million) into the lender, which faces a loss of more than 1 billion euros this year.
Abu Dhabi May Demand More Power for $10 Billion Dubai Lifeline Four days before Dubai World sought to delay $26 billion of debt repayments last month, Sheikh Mohammed bin Rashid Al Maktoum set out to race his horse, Al Ayed, across 120 kilometers (75 miles) of Persian Gulf desert. He had to withdraw when the mount became fatigued. Now Sheikh Mohammed must prove that the transformation of Dubai from fishing village to global business hub isn’t also running out of steam. He has to find a way for oil-poor Dubai to cover at least $80 billion in debts and liabilities, a sign of the gap between his ambitions and the resources to fund them.
Abu Dhabi Will Use Its Bailout To Crush Dubai's Leadership Dubai has a ridiculously weak bargaining position against Abu Dhabi right now, given that Dubai is essentially dead in the water without Abu Dhabi's liquidity. This might not just be money between friends. Expect Abu Dhabi to get their money's worth, given that they can extract pretty much whatever concession they want in the end -- even perhaps stealing Dubai's financial hub status. Starting at 1:00.
"They wanted Dubai to sweat..."
"I think they are going to get their pound of flesh... it might be ownership of Emirates Airlines, inheriting the mantle of regional financial services, Abu Dhabi I think is going to be the big winner here."
"They're playing their cards pretty well to take what they want."
Some Investors Brace for Inflation's Return Even as signs of deflation linger, some investors are moving to protect themselves against any surge in inflation. They fear the Federal Reserve will move too slowly to reverse the unprecedented flood of cash it pumped into the financial markets in response to the global financial crisis. With the crisis now seen as over, they feel the Fed could be setting the stage for a meaningful rise in inflation over the next several years by pledging to keep interest rates essentially at zero for the foreseeable future.
Stocks fall after inflation reading climbs The stock market fell and Treasurys slipped after inflation rose faster than expected last month. Trading was subdued Tuesday as Federal Reserve policymakers gathered for a two-day meeting on interest rates. The Labor Department says wholesale prices jumped 1.8 percent last month, more than double the gain analysts expected. For the day, the Dow Jones industrial average is down 49 at 10,452, falling from a 14-month high Monday. The Standard & Poor's 500 index is down 6 at 1,108. The Nasdaq composite index is down 11 at 2,201.
Spike in wholesale inflation sends stocks lower Stocks, bonds fall as wholesale inflation and the dollar rise; Fed meets to discuss rates The stock market fell for the first time in five days and Treasurys slipped after a jump in inflation stoked concerns that the Federal Reserve would be forced to raise interest rates. Stocks extended their losses late in the day Tuesday after General Electric Co. forecast that revenue and earnings would be largely flat in 2010. Major stocks indexes fell 0.5 percent from 14-month highs, including the Dow Jones industrial average, which lost 49 points.
Dollar Trades Near Two-Month High Versus Euro on Rate Outlook The dollar traded near a two-month high against the euro amid prospects the Federal Reserve will withdraw stimulus measures amid signs the U.S. economic recovery is gaining momentum. The greenback was near a one-week high against the yen before reports forecast to show U.S. housing starts rebounded and consumer prices gained. Traders increased bets that the Fed will raise its policy rate by June as the Federal Open Market Committee began a two-day rate-setting meeting. Australia’s dollar slumped after a government report showed the nation’s economy expanded less than economists had forecast.
Currencies - Long term forecast We begin by looking at USD intermediate and long term price patterns as well as Dollar's relationship to EURO, British Pound and Yen. We'll also look at EURO and EURO/British Pound relationship using Elliott Wave Theory. Elliott Wave Theory is based on the psychology of the masses which forms patterns. I use these patterns as well as the general sentiment in my forecasting. In addition, I take into consideration the behaviour of the commercial traders.
Fed will hike rates - in 2011 It appears 0% is here for the foreseeable future. A year ago, the Federal Reserve took its key overnight lending rate, the fed funds rate, down to near 0% for the first time in its history in an effort to keep the economy from falling into depression. The cheap money meant lower rates for consumers on credit cards and home equity loans, as well as for many business loans.
Traders wary ahead of Fed rate decision A reluctance by traders to take fresh positions ahead of the Federal Reserve’s last interest rate decision of the year left stock markets struggling to make headway on Tuesday. The FTSE World index fell 0.6 per cent in activity that is rapidly thinning as the holiday season approaches. Wall Street retreated from Monday’s 14-month closing high after a stronger-than-forecast report on producer prices raised fears of building inflationary pressures, a particularly pertinent concern given the Fed announces its decision on monetary policy on Wednesday.
Peter Schiff Debates Obama’s Economic Policies Epstein maintains that Obama’s economic policies are saving the economy: The Fordham Law School Federalist Society hosted this debate between David Epstein, Professor of Political Economy at Columbia University, and Peter Schiff, President of Euro Pacific Capital and U.S. Senate Candidate from Connecticut. Moderated by Fordham Law Professor Nicholas Johnson.
The topic: "Will the Obama Administrations economic policies lead to prosperity or disaster?"
Plan offered to avoid a debt crisis More than 30 leading budget experts on Monday prescribed a course for deficit reduction that the nation needs to take if it wants to "buy some breathing room" to avoid a debt crisis. In its report "Red Ink Rising," the Peterson-Pew Commission on Budget Reform called on Congress and the White House to commit to stabilizing the public debt to 60% of gross domestic product by 2018. Left unchecked, it's on track to hit 85% by 2018, and then grow to 100% four years after that. By 2038, it could reach 200%.
To Congress: Your Loan Has Been Called Leaders are considering a hike of roughly $300 billion to the nation's $12.1 trillion deficit, though the final figure has not been nailed down, congressional aides said on condition of anonymity. Democratic leaders had previously hoped to raise the limit by at least $1.8 trillion, enough to take care of the government's debt needs through the November 2010 congressional elections.
Is the US Financial Crisis Over? This frankness and honest statement of the situation is the reason that Paul Volcker, one of the most credible advisors in the Obama Administration, is a marginalized voice as compared to Larry Summers and Turbo Tim. Ironic, because only by assuming Volcker's leadership style can the US President hope to get his country out of this cycle of monetary bubbles, systemic fragility, and chronic imbalances driven by an outsized, counterproductive financial sector.
European Banks Are Hoarding Cash Too It's not just American banks that are being extremely cautious with their lending these days. In Europe, they aren't lending either despite government support. Bloomberg: For all the cash provided by the European Central Bank to ease the worst seizure in credit markets since World War II, financial institutions in the region are unwilling to lend, using the money instead to invest in the safest, most liquid government securities. Bond investors are offering money like never before as returns on corporate debt reach as much as 70 percent this year, according to Merrill Lynch & Co. indexes.
Gerald Celente on Jeff Rense 10 Dec 2009
Trend Alert: Breaking Point 2010 – Gerald Celente The first decade of the 21st century is going out the same way it came in with a bust and a bang. The dot-com bubble burst in 2000, and the Bailout Bubble will bust in 2010. 9/11 terror ushered America into the decade, and terror will strike again before the decade ends. The decade long wars waged by US and NATO against Afghanistan and Iraq are leading the world to the first Great War of the 21st Century. The 20th century belonged to America, in 2010 Empire America will be breaking apart. The signs are there for all to see. World leaders and most economists see a very different future unfolding. They insist the financial crisis is over and recovery is on the way.
Moody’s sees sovereign states a-suffering Moody’s has compiled a 1970s-style ‘Misery’ index. But instead of showing inflation and unemployment rates, it shows the fiscal deficit and the unemployment rate. On that basis, Spain, followed by Latvia, Lithuania, Ireland, Greece and the UK are the gloomiest Moody’s-rated sovereigns in the world. The US is eighth — just after Iceland.
Fed to split monetary and liquidity policy The Federal Reserve is unlikely to make any big changes to its monetary policy stance at the conclusion of its December meeting on Wednesday, though there is a chance it could make some alterations to its provision of liquidity. The US central bank is likely to keep the key line of its policy guidance – in which it says it expects to keep rates at “exceptionally low levels” for an “extended period” – unchanged. However, it is possible that policymakers might announce a decision to increase the discount rate at which the Fed makes emergency loans to banks, perhaps coupled with reaffirmation from the Fed board that it will shut down many emergency liquidity programmes on February 1.
Foreign demand for US assets wanes Foreign demand for long-term US securities fell back in October, deterred by the weaker dollar, according to data released by the Treasury on Tuesday. According to the latest Treasury International Capital (Tic) report, net foreign purchases of long-term US securities fell to $20.7bn in October from $40.7bn the prior month. The pace of purchases was slower than economists expected. Overseas investors purchased $43.4bn of long-term equities, notes and bonds, with private investors buying twice as much as foreign official institutions. US investors purchased $22.7bn in long-term foreign securities.
Full Circle of Govt Debt Default The continuation of the bank dominoes took 14 months, but it occurred. The initial destructive impact craters were carved in the United States and England. To be sure, major damage was done to assets in Spain and Greece and other smaller nations in the last year, but their banks had remained insulated. The discredit and death of the central bank franchise system showed first clear evidence in September 2008 on Wall Street. The unique mysterious aspect of banking systems is how they cannot be rebuilt once they turn insolvent. They rot in place, a process accelerated by rotten ethical values, euphemistically called moral hazard. To be sure, much so-called money flows through the dead rotten parts, but nothing becomes resuscitated except balance sheets. And besides, those balance sheets only look better due to accounting rules changes that deviate from mark to market (reality).
Fed is expected to leave rates at record low The Federal Reserve is expected to leave interest rates at a record low this week. The big question is whether Chairman Ben Bernanke and his colleagues will hint about when they will reverse course and start boosting rates. Plans for reeling in the unprecedented amount of money the Fed has plowed into the economy to bolster the recovery are likely to dominate its discussions Tuesday and Wednesday. The Fed is expected to announce its policy decisions on Wednesday afternoon. The central bank faces a high-stakes challenge: If it removes the stimulus too soon, it could short-circuit the fragile recovery. But if it moves too late, it could unleash inflation or new speculative asset bubbles.
Regulators Resist Volcker Wandering Warning of Too-Big-to-Fail Paul A. Volcker visited nine cities in five countries in the past eight weeks to warn that bankers and regulators “have not come anywhere close to responding with necessary vigor” to the worst economic crisis in 70 years. “There is a lot of evidence that financial weaknesses brought us to the brink of a great depression,” Volcker, 82, said Dec. 8. at a conference in West Sussex, England. He told executives there that the changes they’ve proposed are “like a dimple.”
U.S. 10-Year Yield Most Since August as Prices Rise, Fed Meets Treasuries fell, with the 10-year note yield touching the highest level since August, as wholesale prices in the U.S. increased last month more than forecast amid speculation the Federal Reserve will keep rates at record lows. Two-year notes fell for a fifth day, the longest series of declines since May, as a separate report showed industrial production increased in November by the most in three months. The Federal Open Market Committee will announce its decision on interest rates at around 2:15 p.m. tomorrow in Washington.
Treasury report shows bank lending down again Treasury reports that value of loans held by big bailout recipients falls again in October The value of loans held by the biggest beneficiaries of the government's bank bailout fell for the ninth consecutive month in October, the Treasury Department reported Tuesday, a day after President Barack Obama criticized top bankers for not doing enough to boost lending. The department's monthly report, which monitors the top 22 recipients of support from the government's $700 billion rescue fund, showed that their average loan balances dropped in October by $36.8 billion, or 0.9 percent. That followed a decline of 1.1 percent, or $45.9 billion, in September.
House to Vote on Jobs Bill, Extending U.S. Debt Limit House Democrats said they will vote tomorrow on a $150 billion jobs package along with a two-month increase in the $12.1 trillion U.S. debt limit. Lawmakers will approve a two-month extension in unemployment benefits and health-care subsidies for the jobless as part of a defense bill likely to reach President Barack Obama’s desk by Christmas, said House Appropriations Committee Chairman David Obey, a Wisconsin Democrat.
Buying a House – A Risky Proposition? After renting four homes in the San Francisco Bay Area this decade, I bought a house last month. I had been a long-time advocate of renting rather than buying, so what drove me to buy a house now? Has the time come to buy a house as an inflation hedge? Buying a house should be a matter of risk, not price.
Fewer Home Buyers Willing To Take Chance on Foreclosures US home buyers are less willing to buy foreclosed properties than they were six months ago, citing risks like hidden costs, but demand could grow because of the government's expanded tax credit, a survey showed on Tuesday. A continued drop in demand for the glut of foreclosed properties would add a fresh layer of pain to a housing market just emerging from a three-year nosedive.
Obama pushes bill as first step toward health care reform President Obama urged Senate Democrats on Tuesday to make history by passing their health care overhaul bill, with the understanding that this could just be the first in a series of legislation to repair the nation's health care system. Democrats said they are closing in on the final votes they need to pass their bill, voting Tuesday evening to kill an amendment to allow Americans to import prescription drugs from a handful of other countries. The proposal, sponsored by Sen. Byron L. Dorgan, North Dakota Democrat, and strongly opposed by the pharmaceutical industry, failed in a 51-48 vote - short of the 60 required for passage under rules for the debate - that scrambled party lines.
Senate healthcare bill advances with rejection of imported drugs President Obama asks a group of senators not to let details, like the dropping of the 'public option,' derail the landmark effort. Many liberal Democrats and leaders of progressive groups agree. Reporting from Washington - The path to enacting the first major healthcare overhaul in decades opened wider today, as the Senate voted down a divisive proposal for direct importation of prescription drugs, and President Obama rallied Democrats behind a decision to put aside one of liberals' most cherished ideas -- creating a government alterative to private medical insurance.
Calls to drop Medicare change intensify Senate Democrats are preparing to drop a compromise health-care plan that would allow 55- to 64-year-olds to buy into Medicare because of opposition from Connecticut Sen. Joe Lieberman, two senior Democratic sources said Monday. "It's what the White House wants, and there aren't many other options that allow us to finish by Christmas," said one source. Lieberman, an independent who caucuses with the Democrats, has emerged as the majority party's main obstacle to its efforts to get a health care bill through the Senate before Christmas. He ratcheted up his public opposition to the bill Sunday by threatening to join a Republican filibuster if the legislation contains either a government-run public health insurance option or a proposed alternative that would expand Medicare to people as young as 55.
Obama's Illinois prison plan faces a high wall: the GOP Lawmakers signal they'll seek to block the president's proposal to move terrorism suspects from Guantanamo Bay, Cuba, to a facility in Thomson, Ill. Reporting from Washington - As the White House on Tuesday detailed its proposal to move terrorism suspects from Guantanamo Bay, Cuba, to a prison in rural Illinois, some lawmakers made it clear that they would try to derail President Obama's plans to shutter the controversial detention center. In addition to buying the near-empty state prison in Thomson, Ill., to house the Guantanamo detainees, the government said, it plans to set up a courtroom in the facility for defendants who will be tried before a military commission.
Comcast launches Web TV service Fancast Xfinity will allow millions of its subscribers who pay for high-speed Internet access and television to watch cable shows online. Cable operator Comcast Corp. said it would make its experimental Web TV service available to millions of its subscribers who pay for high-speed Internet access and television, paving the way for people to watch cable shows online. The newly christened Fancast Xfinity TV service allows subscribers to watch full-length television shows from 27 networks -- including pay cable offerings HBO, Cinemax and Starz -- on their computers. The cable giant is aggressively rolling out the online service, which it tested with 5,000 customers over the summer. It will be available immediately to most of Comcast's 15.7 million Internet service subscribers who also receive cable TV service.
Jim Chanos: We're Shorting Autos, China, And Commodities But Not Financials
Trade Discord Fuels U.S.-China Tension in Copenhagen China is demanding that a global agreement to reduce greenhouse gases prohibit nations from imposing trade sanctions, further pitting the world’s No. 1 emitter against U.S. lawmakers. The draft accord from a meeting in Copenhagen to forge a climate treaty bars rich nations from adopting trade actions tied to global warming. China said such language will avert “trade wars.” The U.S. Chamber of Commerce sides with China.
Fidel Castro says US plotting against Latin America Cuba's former leader Fidel Castro has accused the US of plotting to overthrow left-wing governments in Latin America. The "friendly smile" of US President Barack Obama could not be trusted, Mr Castro said in remarks read out at a summit of leftist leaders in Havana. His comments were echoed by Venezuelan President Hugo Chavez and other regional leaders at the meeting. Fidel Castro's remarks suggest hopes for a thaw in US-Cuba ties may be waning, correspondents say. As the left-wing summit drew to a close, Mr Chavez read out a letter from Fidel Castro in which he said the US was again on the offensive in Latin America.
US and Russia close in on nuclear treaty Obama and Medvedev could sign agreement on nuclear arms reduction on margins of Copenhagen summit this week The United States and Russia are close to a breakthrough on a new treaty to cut their arsenals of nuclear weapons and the missiles, submarines and bombers that would be used to launch them, according to officials and analysts. Barack Obama and the Russian president, Dmitry Medvedev, could sign the agreement to replace the existing strategic arms reduction treaty (Start) – the cornerstone in US-Russian relations for almost two decades – as early as the end of the week.
Climate change talks enter 'important moment' Global warming talks entered what the top United Nations climate official described as "a very distinct and important moment in the process" Tuesday, as top ministers searched for a way to ensure the commitments nations made here would stand up over time. Yvo de Boer, the executive secretary of the U.N. Framework Convention on Climate Change, told reporters both large and small countries will have to make concessions in the coming days because "there is still an enormous amount of ground to be covered if this conference is to deliver what people around the world expect it to deliver."
Ministers lead climate change talks in Copenhagen Environment ministers are holding talks at the UN climate conference in Copenhagen amid threats of large-scale protests by environmental groups. Activists, angered by logistical issues and a lack of progress on a deal, have vowed to disrupt proceedings. The White House said President Barack Obama, who will join world leaders in Copenhagen later in the week, is confident of reaching a deal.
Japan ignores US pressure over air base Tokyo on Tuesday shrugged off heavy US pressure for speedy implementation of a deal to relocate one of the military bases on Okinawa island, in a response certain to anger Washington and fuel worries about the loyalties of Japan’s new ruling Democratic party. The decade-old plan to move the Futenma Marine Corps air base from the centre of a busy city to scenic Henoko Bay in northern Okinawa has become a lightning rod for friction since the DPJ’s election victory in August over Japan’s long-ruling and pro-US Liberal Democratic party.
Bob Chapman's Friday Report on Alex Jones Tv 1/4:A New World Currency Based Upon Carbon!! Alex also talks about the economy with regular guest and publisher of the International Forecaster, Bob Chapman.
Bob Chapman's Friday Report on Alex Jones Tv 2/4:A New World Currency Based Upon Carbon!!
Bob Chapman's Friday Report on Alex Jones Tv 3/4:A New World Currency Based Upon Carbon!!
Bob Chapman's Friday Report on Alex Jones Tv 4/4:A New World Currency Based Upon Carbon!!
The Fed's Money Monopoly by Ron Paul Last week, in the name of protecting the little guy from Wall Street, the House passed HR 4173 to increase the little guy's false sense of security in the financial system. This mammoth piece of legislation would massively increase government regulation and oversight in the banking industry under the misguided reasoning that more government could have stopped faulty lending practices, when in actuality it caused them. This bill would also greatly increase the powers of the Federal Reserve, which too many in Congress still see as savior rather than perpetrator in this mess.
Figures Indicate Declines In Net Worth And A Difficult Path To Recovery Congressional appropriators agreed Tuesday night to give civilian federal employees a 2 percent pay increase -- which includes a locality pay increase President Obama didn't want. Government workers will get a 1.5 percent nationwide increase in base pay and a 0.5 percent average increase in locality pay. The final agreement goes against the wishes of Obama, who called for a flat 2 percent jump and no locality increase. Locality pay helps address the gaps between federal pay and private sector wages in high-cost areas of the country. The Federal Salary Council estimates the current private-public gap is about 26 percent, on average. Locality increases mean a federal worker in Cincinnati might get a smaller increase than a worker in Washington, D.C., because of local costs of living. [Why aren't Social Security recipients and disabled veterans receiving their COLA raises for the next few years as well?]
Feds Say Don’t Worry About the Depression Nothing is quite as disagreeable as a neighbor who has made a lot of money by not following your advice. After 9 months of 'recovery' they are all around us. They think they have perfected the art of bubble riding. Here on the back page, we alert investors. We wag our fingers and shake our heads. Little good it does. We might as well warn surfers about an approaching storm. They don't head for cover; they rush to the beach, hoping it's not too late to catch a big one. As of this week, investors are still making money. Almost everything has outperformed cash over the last 9 months. Stocks, commodities, gold - you name it. This wouldn't be happening were it not for the government. The feds are making waves from Malibu to Manila. 'Don't worry about the depression,' they tell us; 'we're on the case.' That, of course, is what we're worried about.
Mission Not Accomplished by Peter Schiff Although Barack Obama has refrained, at least for now, from delivering triumphant speeches in a naval flight suit, there is nevertheless a strong tone of accomplishment emanating from the President and his deputies. Over the weekend, top White House economic adviser Lawrence Summers even pronounced that the recession is now over. Without hedging his bets, Summers declared that thanks to the Obama Administration's wise stewardship, economic stimuli, and emergency bailouts, another Great Depression, set up by the prior Administration, had been narrowly averted. Summers saw no impediments to the return of sustainable growth. He may as well have delivered these remarks from the deck of an aircraft carrier.
What's Really In Fort Knox? The Trading with the Enemy Act, enacted in 1917, gave the President the power by law to oversee or restrict any and all trade between the U.S. and her enemies in times of war. Franklin D. Roosevelt amended the act to extend its scope to the hoarding of all gold. As part of the New Deal, Congress approved legislative changes which removed gold from circulation as money. Private ownership of gold in the U.S. became illegal on April 5, 1933 with the passage of Executive Order 6102. An exception was made allowing each individual to retain five troy ounces, or $100.00. Rare and unusual numismatic gold coins - having recognized special value to collectors - were exempted.
Marc Faber on Goldseek radio 10 Dec 2009
Gold, A Good Bet Against Bernanke & Co We're not really in Dakar. We left there after a couple of hours on the runway. But we thought it would fun to file a Daily Reckoning from such an exotic place. Now, we're back in good ol' Bawlamer, Maryland. No matter where you go in the world, you won't find anything like Baltimore. It's probably best that way. This week, we've had our eye on gold...and the dollar. As the dollar rises, gold goes down. This is not the way we thought it would happen. We expected a crack in the stock market first. But you never know. And we'll take what we can get. Gold is correcting; that's what we were waiting for.
Gold will continue to rise despite dips Gold is the inverse of the dollar. The dollar is going to have a very difficult winter. It does not end there as downward spirals continue until corrective actions occur at the economic source of the problem. The problem is OTC derivatives and they are so far beyond corrective action with loopholes in the new financial legislation large enough to drive an 18 wheeler through sideways. The dollar is history as the reserve currency of choice. Now it is the reserve currency of being stuck, and awaiting a diversification.
Gold firms on weaker dollar, Fed eyed Gold prices firmed on Tuesday as the dollar stayed weak after easing concerns about debt woes in Dubai improved risk tolerance. Investors were bracing for comments by the U.S. Federal Reserve, which is to start its two-day meeting later in the day and will likely close out the year by repeating a pledge to keep interest rates extraordinarily low for an extended period, even as it makes a nod to signs of economic recovery.
Gold rebounds as declining $US spurs demand Gold rose, rebounding from the biggest weekly loss since February, as the falling greenback boosted demand for the precious metal as an alternative asset. The US Dollar Index, a measure of the greenback’s value against six major currencies, fell as much as 0.4 per cent after concerns eased that state-owned Dubai World might miss a debt payment today. Bullion sank 4.2 per cent last week as the dollar reached a two-month high against the euro. The slump followed a 12 per cent gain to an all-time high in the month ended December 3. "Gold is playing the dollar dance," said Frank McGhee, the head dealer of Integrated Brokerage Services LLC in Chicago. "If the dollar weakens against the euro, gold will come screaming back."
Four pillars of gold price strength remain intact Despite the recent setback in the gold price, the principal drivers of gold's recent strength remain in play and don't be surprised to see $1,500 gold next year. Friday seems to be gold's unlucky day. This past Friday, December 11th, gold tumbled as better-than-expected retail sales figures suggested that U.S. economic growth is rebounding. Retail sales for November rose 1.3 percent, much better than the 0.7 percent rise economists and markets were anticipating. Reflexively, the U.S. dollar strengthened and gold promptly tumbled from just over $1,140 to under $1,110 - a decline of more than $30 or about 2.6 percent..
Gold Corrects into Our Targeted Buying Area - Major Rally Likely to Continue into Spring When gold reached our short-term target of about $1200, we closed our gold and silver futures trading positions. We have since been looking to reenter our long gold and GDXJ junior gold miner trading positions whenever gold traded close to its 10 week (50 day) moving average (currently around $1102 and rising about $2 per day), and we did so on Friday at equivalent to $1110 spot when gold came within less than one percent of its 10 week moving average.
Gold edges up in Europe as dollar dips Gold climbed further in European trade Monday mainly on decline in dollar and on reports of Dubai getting financial aid to avert a debt default. Spot gold was seen trading at $1222.58 an ounce at 4.00 pm Indian time compared with Friday's close of $1,113.85 in New York.
Gold May Advance in New York as Weaker Dollar Spurs Demand Gold, little changed in New York today, may rise as a weaker dollar spurs investors to buy bullion to hedge against further declines in the currency. The U.S. Dollar Index, a measure against six counterparts, fell as much as 0.4 percent after Abu Dhabi pledged to bail out Dubai. Futures, which typically move inversely to the dollar, dropped to four-week low of $1,110.20 an ounce on Dec. 11, as the dollar climbed to a two-month high against the euro.
Tom Woods on Money and Freedom
Risk-taking may fuel gold prices A leading financial consultant has suggested that recent signs of a return to risk-taking could prove to be good news for people buying gold. Peter Fertig, a consultant at Germany's Quantitative Commodity Research, said that an increase in market-based risk can often be directly correlated with increases in gold prices as a result of its inverse relationship with the US dollar, according to Reuters. He told the news provider: "Stock markets have recovered and that indicates that at least a little more risk-taking is coming back into the market.
Retail investors flock to gold funds The continued surge in the price of the yellow metal has seen the number of new accounts created by India's gold ETFs jump by 57% between March and September Mutual funds investing in gold are attracting new retail clients at a heady pace, as the yellow metal surges to fresh records, giving money managers another opportunity to build assets. The number of new accounts created by gold exchange traded funds (ETFs) in India surged 57% between March and September, while assets under management of six gold ETFs has risen 72% to 12.75 billion rupees in the last one year, data from the Association of Mutual Funds in India shows.
How China is building up gold reserves China's latest slew of positive data "raises the prospect" of Beijing tightening its easy money and fiscal policies, or so the newswires claim. Currency strategist Steven Barrow at Standard Bank adds that China could be more significant for global liquidity than the United States, too. Because the Fed's asset pile is nothing next to the People's Bank's hoard of cash, he says. So "the Fed's grip on the [easy-money] punchbowl is not as firm as the market might think," as shown by Barrow's chart below.
Global gold resources around 330,000 tonnes According to GFMS, in 2008, mine supply was 2,415 tonnes, declining for a third year running. His also undershot the all-time high of 2,645.7 tonnes (2001). However, due to the high gold price, 2009 production should beat 2008. If mine supply is rising due to the higher gold price, the pressing question is: How much gold remains in the ground? While it is something of a moving target, we have made some estimates: The global gold reserves in 2008 have been measured at 47,000 tonnes (according to the USGS). Reserves are defined as gold which can be economically extracted or produced at the time of determination.
Gold’s Old Enemies: Allies in 2010 Central banks – the long-time nemesis of the gold sector – are doing an about-face to become its biggest supporters. And this quantum shift promises to gather momentum in 2010 with the prospect of a new era of net buying continuing to fuel robust demand for bullion. So say several of the world’s most prominent gold fund managers and investment industry gurus. They include John Embry, a renowned, long-time gold advocate and the chief investment strategist at Toronto-based Sprott Asset Management, which runs the Sprott Gold and Precious Metals Fund. “I think central banks will most certainly underpin the price of gold next year,” Embry says.
U.S. Mint resumes 2009 American Eagle bullion coin sales Record metals prices and a lousy economy generated record U.S. Government bullion coin sales, creating headaches for the U.S. Mint, which is resuming some sales on a weekly allocation basis. The U.S. Mint plans to resume the sale of several types of American Eagle Gold half-, quarter- and tenth-ounce bullion coins beginning today. The Mint will resume the sale of 2009 American gold one-ounce bullion coins Tuesday, but on a weekly allocation basis. Sales of some gold bullion coins had been suspended due strong demand exacerbated by a shortage of blanks.
Bullion: Is peak gold round the corner? A near-1% recovery was seen in gold prices overnight and early on Monday, and it was mainly precipitated by news the Abu Dhabi was handing out about $10 billion in financing to Dubai. A rescue package by any other name, the gesture ignited a bit of risk appetite which helped bring gold back from its one-month lows recorded on Friday. The US dollar was not trading significantly lower at last check, however. The trade-weighted index showed the greenback hovering near the 76.50-mark, and crude oil marginally lower, at $69.50 per barrel.
Recent gold price dip, just a minor hiccough While gold prices have fallen over the last few days on a slightly stronger dollar the fundamentals for the gold rally have not changed at all When the US non-farm payrolls were released on Friday 04, December, the US dollar rebounded immediately on the encouraging numbers. As to be expected the gains in the US dollar put pressure on the gold price. Then, on Friday December 11, gold eased after running up some US$15 during the day due to the stronger than forecast retail sales data, which caused the dollar to rally. As retail sales increase there is an expectation that the Fed may begin raising rates and that is considered to be bullish for the dollar. November retail sales rose 1.3% versus a consensus forecast of 0.7%. Sales excluding autos were up 1.2%. So does this mean that we have seen the high for gold and the low for the dollar?
Hot Commodities: Precious Metals boom in China Where on earth are the maximum number of investment seminars and summits held on precious metals? You may have guessed it right. Yes, undoubtedly, it is in Beijing, Shanghai and other Chinese cities that bullion and precious metals investors and analysts are gathering these days to interact on the big potential that China has for the global metals market.
Gold climbs 0.7% as dollar languishes Gold is awaiting fresh direction from the wider markets after posting a sharp fall last week, which depressed prices nearly 10 percent from the record $1,226.10 an ounce they hit in early December. Prices were supported on Monday by weakness in the dollar versus the euro as fears over Dubai’s debt eased, though the US currency recovered some early losses.
Dollar, Yen May Fall as Dubai Concerns Ease, Damp Safety Demand The dollar may decline for a second day against the euro as signs of a sustained economic recovery and receding concerns of a default in Dubai curb demand for the U.S. currency as a refuge. The yen, another funding currency, may also fall before reports this week that economists said will show industries in the U.S. boosted production and housing starts rebounded. The Australian dollar fell after the central bank said it discussed keeping interest rates unchanged in minutes of its December meeting, when policy makers raised borrowing costs for an unprecedented third straight month.
Currency/base metals correlations breaking down Friday was interesting in so much as you had a stronger dollar, weak precious metals, but strong base metals. Basically, the currency/base metals correlations appear to be breaking down, with the base metals reacting more to the global growth story rather than to the dollar. The key factor initially on Friday was the strong Chinese economic data, however during the afternoon, it was the positive reaction from the base metals to the better than expected US Retail Sales and Michigan confidence that was the important point. Rather than get sold off as the dollar strengthened, most of the base metals continued to rally.
Yen Replaces Dollar in Carry Trades as Japan Faces Deflation The yen is poised to replace the dollar as the top funding currency for investments in cities from Sydney to Sao Paulo after borrowing from Japan became almost as cheap as U.S. loans for the first time in four months. Rates on 90-day yen loans between banks have fallen the most in 13 years amid record deflation that prompted the Bank of Japan to start a $113 billion lending program last week. By easing demand for private-sector loans, the move helped shrink the gap between U.S. and Japanese London interbank offered rates by two-thirds over the past three months to 0.024 percentage point, the least since Aug. 26, data compiled by Bloomberg show.
Nouriel Roubini: Asia Must Brace for Difficult Start to 2010 Asian markets can expect a rough start to 2010 as low interest rates push down the value of the US dollar and drive asset bubbles, particularly in emerging markets, according to the New York-based economist, Professor Nouriel Roubini. In an interview with the Hong Kong Trade Development Council (HKTDC) ahead of Hong Kongs Asian Financial Forum, Prof Roubini said the trend will continue for another six to 12 months.
China May Let Yuan Appreciate by April China may allow the yuan to appreciate by April as exports recover, inflation creeps up and international criticism mounts, according to Stephen Jen at BlueGold Capital Management LLP. “At the current pace of the global recovery, I suspect by next spring Beijing will be in a position to consider allowing the renminbi to trade more flexibly,” Jen, the former global head of currency research at Morgan Stanley in London, wrote in a research note to clients. The Chinese yuan, known as the renminbi, was at 6.8282 per dollar.
Get Ready For A Couple Of Hot Inflation Numbers So far this year, the public perception of whether we're in a deflationary or inflationary environment has tended to turn on the lack of year over year price increases. This has created the impression among many investors that inflation is "tame" despite the fact that prices have been rising all year. When the the Bureau of Labor Statistics reported CPI data last month, it said that prices were 0.2 percent lower than October 2008. This pretty much white washed the fact that the month over month movement was a 0.3 percent increase. The cumulative rise in prices over the first 10 months of this year has been 2.8 percent. But hardly anyone noticed.
Recognition of the US Inflation Problem When the banking system (the central bank and the commercial banks) creates so much new money out of nothing that the total supply of money rises rapidly, it can be likened to counterfeiting on a grand scale. This counterfeiting distorts price signals, brings about the undeserved transfer of wealth to the first receivers of the new money, and depletes real savings. It therefore damages the economy. There are times when the economy is in good enough shape -- due to an existing large pool of real savings -- that the total amount of wealth is able to grow despite the hindrance of monetary inflation, but there are other times -- now, for example -- when earlier inflation and other central-bank/government-imposed distortions have already weakened the economy to such an extent that adding more inflation into the mix causes an irresistible drag.
U.S. needs plan to tame debt soon The government must craft a plan next year to get its ballooning debt under control or face possible panic in financial markets, a bipartisan panel of budget experts said in a report on Monday. Though the government should hold off on immediate tax hikes and spending cuts to avoid harming the fragile economic recovery, it will need to make such painful changes by 2012 in order to keep debt at a manageable 60 percent of GDP by 2018, according to the Peterson-Pew Commission on Budget Reform. Without action, investors could lose confidence in the United States, driving down the dollar and forcing up interest rates, said the former lawmakers and budget officials who crafted the report. That could cause a sharp decrease in the country's standard of living.
Senate sends $1.1 trillion spending bill to Obama The Senate on Sunday passed a $1.1 trillion spending bill with increased budgets for vast areas of the federal government, including health, education, law enforcement and veterans' programs. The more-than-1,000-page package, one of the last essential chores of Congress this year, passed 57-35 and now goes to President Barack Obama for his signature. The weekend action underlined the legislative crush faced by Congress as it tries to wind up the year. After the vote, the Senate immediately returned to the debate on health care legislation that has consumed its time and energy for weeks. Senate Democrats hope to reach a consensus in the coming days on Obama's chief domestic priority.
Plan Mulled to Lift Debt Cap Briefly Moderate Democrats in the Senate are considering supporting a short-term increase in the government's borrowing authority, a move that could -- for now -- defuse a looming conflict on the issue, lawmakers and congressional aides said Sunday. This comes as the Senate voted Sunday 57-35 to give final approval to a catchall spending bill that included $447 billion to fund some dozen departments and agencies for fiscal 2010, which began Oct. 1. The measure also included more than $600 billion in automatic spending on safety-net programs such as Medicare and Social Security.
Obama pushing banking execs on protection agency Obama meeting banking executives, wants their support for consumer protection agency President Barack Obama is asking bank executives to support his efforts to tighten the financial industry, while bankers are prepared to tell the president he should stop oversimplifying their concerns if he wants good-faith collaboration. An hour long meeting between the president and the nation's top financial firms was shaping up to be a tense White House encounter on Monday, not least because of Obama's description of bankers on the eve of the talks as "fat cats."
Obama to banks: 'Rebuild our economy' President Obama pressed Wall Street bankers at the White House on Monday, urging them to make more loans and modify mortgages to help taxpayers who propped their banks up with federal bailouts. "My main message in today's meeting was very simple: America's banks received extraordinary assistance from American taxpayers to rebuild their industry," Obama said. "Now that they're back on their feet, we expect an extraordinary commitment from them to help rebuild our economy."
A Setback for Government Sachs Just days after their top management "took one for the team" by accepting stock they can't sell for five years in place of billions of dollars in cash out of a bonus pool pegged at somewhere around $20 billion, the Wall Street Journal reports that the role of Goldman Sachs in the AIG recklessness/meltdown/bailout was much larger than originally believed.
America Must 'Reassert Stability and Leadership' Interview with US Economic Recovery Advisory Board Chair Paul Volcker Paul Volcker, 82, is one of US President Barack Obama's leading economic advisors. SPIEGEL spoke with him about the economic challenges facing the US, whether new taxes are needed to address public debt and how America can return to a position of economic leadership.
Damon Root on Fox's Freedom Watch With Judge Andrew Napolitano
Goldman Fueled AIG Gambles Wall Street Titan's Role Shown in Journal Analysis; Firm Says Problems Hidden Goldman Sachs Group Inc. played a bigger role than has been publicly disclosed in fueling the mortgage bets that nearly felled American International Group Inc. Goldman was one of 16 banks paid off when the U.S. government last year spent billions closing out soured trades that AIG made with the financial firms. A Wall Street Journal analysis of AIG's trades, which were on pools of mortgage debt, shows that Goldman was a key player in many of them, even the ones involving other banks.
Senate Health Bill Will Raise Costs Republicans on Friday seized on a report by government actuaries that said the Senate health bill would cause national health costs to rise. The report, compiled by the chief actuary at the Centers for Medicare and Medicaid Services, estimated that total health costs in the U.S. would be $234 billion higher than if the bill weren't passed. President Barack Obama has said Democrats' health plan would reduce the growth of health-care costs.
Medicare buy-in plan runs into Senate resistance A plan to let people as young as 55 buy into Medicare, heralded as a breakthrough in the Senate's health care debate, ran into resistance Sunday from lawmakers who can make or break Democrats' efforts to reshape the nation's health insurance system. Independent Sen. Joe Lieberman of Connecticut declared the early Medicare buy-in a bad deal for taxpayers and the deficit. He pleaded with Democrats to start subtracting expensive proposals from the overhaul, saying, "We don't need to keep adding onto the back of this horse or we're going to break the horse's back and get nothing done."
Nearly 650,000 are long-term jobless Californians who lose their jobs continue to be out of work longer, with 646,000 in October unemployed more than six months, according to state Employment Development Department data. Typically the newly unemployed — those out of work less than five weeks — make up the largest pool of the jobless, but the length and depth of this recession has turned the usual experience upside down. A year ago in October, 32.6% of the 1.2 million Californians who were unemployed had been out of work less than five weeks, the most of any category based on duration.
Middle Class Outrage, Solutions, & The Markets . . . . "Never before has the United States had so many citizens with so little means, little to no income, and heavy debt. Debt and costs of living have now shackled US citizens just as it has shackled people throughout the world. The economic hit men have now hit the US as well and millions of US citizens are now effectively sentenced to a slow death. Economic Imperial blowback has hit the mainland... "The inequality of wealth in the United States is soaring to an unprecedented level...the gap between the top 1% and the remaining 99% of the US population has grown to a record high...
U.S. post-Christmas shopping may fall Retailers looking for a big surge in customer traffic the week after Christmas may be disappointed by a new survey that shows an unusually low number of consumers plan to shop in the post-holiday week. Only 35 percent of consumers surveyed over the weekend said they would shop in the week after Christmas on December 25, according to survey questions posed by America's Research Group on behalf of Reuters. That is even lower than the 38 percent of a year earlier. Over the past decade, 48 percent to 55 percent typically said they planned to shop in that week, said America's Research founder Britt Beemer.
Underground Economy, the Creature of Corrupt Government Richard W. Rahn, writing in a recent Cato Institute article titled "New Underground Economy" observes "The underground or 'black' economy is rapidly rising, and the fault is mainly due to government policies." The underground economy refers to what governments call the black market and what libertarians call the free market. The free market, of course, is capitalism. Progressives and other socialists still labor under the old Marxist definition of capitalism even though corporatism replaced capitalism at least a century and a half ago.
Government salaries soar in bad times . . . . This recession has been such a boom time for the tax-supported bureaucracy that "federal employees making salaries of $100,000 or more jumped from 14% to 19% of civil servants during the recession's first 18 months -- and that's before overtime pay and bonuses are counted." USA Today was especially struck by the fact that there was only one career federal worker making an annual salary of $170,000 or more at the U.S. Department of Transportation when the current recession began. Today, 18 months later, there are more than 1,600 career employees making that much at Transportation. We can only hope that none of those additional 1,600-plus high-paid workers was responsible for the $2 billion Cash for Clunkers debacle run by the Transportation Department.
Tiger's Tail The hysteria over Tiger Woods is simply wonderful. Unlike Bill Clinton's tarts, Tiger's are a tiny bit better quality, which is not saying much. The prettiest of the lot, Rachel Uchitel, is something else. This is hard for me to admit, but she was at school with my daughter and I had actually noticed her and had said something to my little girl about her. ("Daddy, stop it..") Rachel's best friend was also an operator, a girl by the name of Shoshanna Lonstein, who managed to land a multi-millionaire once she graduated from Nightingale - Bamford, a top girls school in the Bagel. While attending school, Shoshanna was stepping out with a man called Jerry Seinfeld, of TV fame, not the type any self-respecting father would like to see his daughter bring home. In fact, I remember asking the mother of my children whether she planned to turn our daughter into a pole dancer or something.
How Islam Beheads Democracy "Tell me," I recently asked a leading British politician. "Had the movie Life of Brian been a parody of Islam rather than of Judao-Christian belief, would a single member of the Monty Python team currently be alive?" He could provide no real answer. So I shall endeavour to do it for him. You see, the right to give offence is the very bedrock of pluralism and western liberal democracy. Deny that right, and freedom narrows, and the walls of debate close in. Refuse to defend that right, and it is the extremists who prevail. Humour, argument and the rough and tumble of basic rudery are the stuff of liberty and our way of life. Outrage never killed anybody-until Islam became involved.
Developing countries boycott climate talks COPENHAGEN - China, India and other developing nations boycotted U.N. climate talks Monday, bringing negotiations to a halt with their demand that rich countries discuss much deeper cuts in their greenhouse gas emissions. The move disrupted the 192-nation conference and forced the cancellation of formal working groups, delaying the frantic work of negotiators trying to clear away technical issues before the arrival of more than 110 world leaders later this week.
Talks Stall as Poorer Nations Threaten to Walk Out COPENHAGEN - Ongoing climate negotiations were temporarily upended on Monday when dozens of developing countries, including China and India, threatened to walk out in protest, saying that the world's richer countries were not doing enough to cut their greenhouse gas emissions. The move seemed to be tactical, as climate talks entered a second, more serious week, and by Monday afternoon, representatives from developing countries said they were ready to return to the table. Still, the threat of nonparticipation underscored the tenuous balance between richer and poorer nations.
Greece defies Europe as EMU crisis turns deadly serious Euroland's revolt has begun. Greece has become the first country on the distressed fringes of Europe's monetary union to defy Brussels and reject the Dark Age leech-cure of wage deflation While premier George Papandreou offered pro forma assurances at Friday's EU summit that Greece would not default on its €298bn (£268bn) debt, his words to reporters afterwards had a different flavour. "Salaried workers will not pay for this situation: we will not proceed with wage freezes or cuts. We did not come to power to tear down the social state," he said.
Greek Finance Minister Comes Out Swinging, Hints At Similarities With US Debt Situation With confidence in his country unraveling, the Greek Finance Minister Giorgos Papaconstantinou is doing everything he can to convince investors that his country will make good on its debts. If you really want to understand bond vigilantes, or why Bill Clinton aide James Carville once said he wanted to be reincarnated as the bond market, so that he could come back and scare the crap out of people, then look at Greece.
With a New Phone, Google May Challenge Apple Two titans of the tech world, Google and Apple, may soon be engaged in hand-to-hand combat. Or, more precisely, handset-to-handset combat. Google plans to begin selling its own smartphone early next year, company employees say, a move that could challenge Apple's leadership in one of the fastest-growing and most important technologies in decades. Google's new touch-screen Android phone, which it began giving to many employees to test last week, could also shake up the fundamentals of the cellphone market in the United States, where most phones work only on the networks of the wireless carriers that sold them.
10 American Industries That Will Be Destroyed In The Next Decade The last decade saw the obsolescence of several technologies that once seemed cutting edge or permanent. Of course, the gales of creative destruction aren't slowing down. The next decade will see all kinds of upheaval and violent change. Last week The Bureau of Labor Statistics published an interesting study about the way employment will change over the next several years.
World 'losing faith in debt-laden UK': Bank's warning over the nation's credit rating The Bank of England today warns Britain is in danger of losing its 'credit standing' with international investors. Many are worried about the vast quantity of government bonds that will have to be sold over the coming years, the Bank reveals in its Quarterly Bulletin. The Bank adds that investors may be demanding 'additional compensation' for purchasing UK gilts, which are the main way the Government finances the gap between tax receipts and public spending.
How Asia Makes The U.S. Look Like A Third World Country Sorry to say it, but in many ways traveling back to the U.S. these days feels like you're entering a third world country. You fly back to America and you think, "Where are the bullet trains, automated customs, and man-made snowstorms?" While America definitely had an early lead with allegedly important breakthroughs such as the computer, car, airplane, and internet, Asia has been far better at actually implementing new technology and ideas.
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Mon 12.14.2009
A sharp turn toward another Vietnam By George McGovern As a U.S. senator during the 1960s, I agonized over the badly mistaken war in Vietnam. After doing all I could to save our troops and the Vietnamese people from a senseless conflict, I finally took my case to the public in my presidential campaign in 1972. Speaking across the nation, I told audiences that the only upside of the tragedy in Vietnam was that its enormous cost in lives and dollars would keep any future administration from going down that road again.
F.D.I.C. Closes 3 Failed Banks Regulators on Friday shut down banks in Florida, Arizona and Kansas, bringing to 133 the number of United States banks that have failed to hold up this year against the struggling economy and a cascade of loan defaults. The Federal Deposit Insurance Corporation took over Republic Federal Bank in Miami, with $433 million in assets and $352.7 million in deposits. The F.D.I.C. also took over Valley Capital Bank of Mesa, Ariz., with $40.3 million in assets and $41.3 million in deposits; and SolutionsBank in Overland Park, Kan., with $511.1 million in assets and $421.3 million in deposits.
U.S. bank failure tally reaches 133 Regulators close regional banks in Florida, Kansas and Arizona, at a cost of $252.1 million to the FDIC. Regulators closed regional banks in three U.S. states Friday, bringing the total number of failed banks this year to 133, the Federal Deposit Insurance Corp. said. Customers of the failed banks are protected. The FDIC, which has insured bank deposits since the Great Depression, currently covers accounts up to $250,000. In Florida, the Office of the Comptroller of the Currency (OCC) closed Republic Federal Bank, NA, and the FDIC was named receiver.
Worrisome trends of bank closings in America Yesterday’s bank closings (three total) evidence a continuation of the worrisome trends we have been seeing over the past several months. These are:
It is costing the FDIC a great deal more than it has historically to protect depositors in the failed banks.
In other words, these banks are in much worse shape financially than they have been historically by the time the FDIC gets around to closing them.
The fair market value of the assets held by these banks is turning out to be dramatically lower than the value at which they are being carried on the banks’ balance sheets. This most likely reflects unrealistic valuations assigned by bank management in the wake of the Financial Accounting Standards Board (“FASB”) having suspended fair value accounting rules this year. . . . .
American debt bulging between $56-$110 trillion Last week, we witnessed Ben Bernanke's Senate confirmation hearings for a second term as Fed Chairman. The air was thick with hypocrisy, as Senators vied with each other to cast blame on the Fed Chairman for the fiscal mistakes of the Congress. As an overtly politicized figure who has looked to bolster the poll numbers of successive Administrations, Bernanke certainly should shoulder a large share of the blame for steering the United States towards the brink of bankruptcy; however, he did not act alone. Ironically, many of his co-conspirators are currently his harshest critics.
Killing the Currency How Barack Obama and Ben Bernanke are destroying the dollar — and perhaps ushering in the amero First under the Bush Administration and even more so under President Obama, the federal government has been seizing power and spending money as it hasn’t done since World War II. But as bold as the Executive Branch has been during this financial crisis, the innovations of Fed chairman Ben Bernanke have been literally unprecedented. Indeed, it is entirely plausible that before Obama leaves office, Americans will be using a new currency.
Gerald Celente Trends Forecasts coming true year after year
Gold rises off four-week lows Gold prices rose and moved off from four-week lows on Monday as the US dollar reversed course and dipped against a basket of major currencies, paring gains made after upbeat US economic data late last week. Volume remained light with Christmas and year-end holidays approaching, and the market was seen likely to face more liquidations from investors looking to close or lighten positions.
The Correlation Between Gold and US Equities The relationship between US equities and gold obviously changed around the middle of 2008. But how has it changed? Has the correlation really reversed so dramatically? Is this the result of the Fed's reflationary efforts? But has not the Fed does this many times in the past? What is the relationship with both of these markets with the US dollar, and that with the money supply?
Gold Is Money In Extreme Times, Have They Arrived? . . . . If the trends we are now seeing are not drastically changed when we extrapolate the situation, we cannot see the monetary system surviving in its present state. Willingly or unwillingly we will see a huge change in economic and monetary power. There is not the political will to recognize this situation, so the likelihood of the bitter consequences of these changes rising into economic conflict on a much larger scale is growing by the day. So can one trust currencies? They are after all national obligations not real value ‘in extremis’? The future looks bleak, sad to say. So we are in extreme times and they are getting worse by the day. Looking ahead we can see nothing among the nations large or small that is capable of stopping this. Is Gold a Thermometer of this?
In an emergency turn to gold Gold prices are close to their all-time high. Is this a good time to unlock the value of your holdings in gold and take a loan against gold? If you are in need of cash, you might be able to borrow against gold. Here we explain to you the basics of gold loans. What are gold loans? Many people have assets such as gold ornaments and jewellery that earn no income because they lie idle at home or in a locker. If you are in need of a loan, and if you are confident of your ability to repay the loan on time, you can unlock the value of these assets by taking a loan against gold.
Investors hedge gold against weaker dollar At the end of last week, stronger economic reports gave unexpected strength to the U.S. dollar as some analysts speculated on a Federal Reserve rate increase. Typically, higher rates will signal a stronger U.S. dollar, and recent trading history on Wall Street will tell you a stronger dollar is a strong signal the bears will be coming out of hibernation. . . . . . . . But many gold traders don’t think the sell-off in gold is permanent. As Hansen elaborates: “For the long-term bulls, this is a positive thing because it gives the market breathing space; I don’t think we’re going to see any new highs this year. Now focus will turn to position-growing ahead of year end.”
Gold is not a bubble that will burst: Jim Rogers Global commodities investor Jim Rogers says gold is not a bubble that will burst and therefore he is not selling the yellow metal he owns even though gold prices have shot up by an incredible $540 per ounce in the last one year. Rogers, known for his bullish forecast on commodities, said in an interview to CNBC that gold is making waves these days thanks to the purchases of the yellow metal by central banks.
In bull market, gold trades like a currency One of the fundamental inputs in a gold bull market is a steady rise in the price of commodities. While in a bull market, gold trades primarily as a currency, its association with the commodity world cannot be neglected in the sense that commodities become an asset class that is sought out by investors to inoculate themselves from the depreciation of the native currency. In general, if commodities are rising, it is a signal that: 1.) economic growth is strong, credit is relatively available and demand for underlying commodities is therefore robust resulting in rising prices across the board and/or 2.) confidence in paper assets is waning and investors are seeking wealth preservation in things tangible
Federal Reserve manipulating gold prices: Ron Paul Politicians in the United States are coming out in the open demanding constitutional remedies to curb manipulation and rampant speculation in gold prices. Congressman Ron Paul said that the US Federal Reserve and the Treasury department have been manipulating gold prices to deflate the price of gold. Congressman Ron Paul of Texas this week introduced legislation designed to curb the ability of the President or the Treasury Secretary to manipulate worldwide gold prices. The "Monetary Freedom and Accountability Act" restores proper congressional authority over gold policy by requiring that body to vote its approval before the President or Secretary buys or sells gold.
Jim Rogers asks investors to buy gold and silver Global commodities investor Jim Rogers is consistently batting for investing in gold over the next one decade. Rogers, who has been piling money into agricultural commodities in China, says he is ready to buy gold as and when prices drop. He says silver is a better buy than gold, and Rogers is buying silver also these days. ”Gold is the best investment these days. Gold is great investment because the metal’s prices will go over $2000 per ounce in the next one decade, may be by 2019. I would surely buy gold when prices drop,” Jim Rogers told CNBC in an interview this weekend.
George Soros, IMF gold and bullion investors A day after Commodity Online published a commentary on George Soros and IMF gold, I have been flooded with e-mails, supporting and abusing Soros, gold reserves, the great historical value of gold and how the rich is cheating the poor on the alter of the yellow metal. Gold is a great asset into which investors are piling their money these days. Investors include our renowned names like George Soros, Jim Rogers, Jim Sinclair etc. They are, indeed, right in pouring money into gold, for gold is the real wealth on which central banks across the world are assessing their countries’ monetary stability.
Why George Soros is after IMF gold Gold reserves held by the International Monetary Fund (IMF) is again in the news, this time thanks to American billionaire financier George Soros. Soros has suggested that IMF should dispose of some $100 billion out of its gold reserves to spend on green loans in carbon-cutting projects to the developing countries. Really wonderful idea, coming in from none other than Soros, Chairman of Soros Fund Management, LLC and founder of The Open Society Institute, whom the global investing world keenly watch every day to get the right investment directions. It has been reported that Soros has been buying gold as investment for the past few years.
Funds Take a Shine to Gold Some Managers Fear Inflationary Effect of Stimulus; Others See Fuel for Returns Mutual funds that seldom indulged in commodities now have a lot riding on gold. Diversified stock funds have been purchasing actual gold bullion, and also piling into gold exchange-traded funds and stock of gold-mining companies. They've been doing it partly as insurance against a worrisome monetary situation and possible inflation, and partly to goose their returns.
Gold, silver buying frenzy in China Gold fell almost 5% last Friday to below $1,160 an ounce on the latest “positive” jobs data. Tuesday, gold futures fell for a third straight session as worries about credit problems in Greece and Dubai helped the U.S. dollar extend gains. This clearly is the beginning of the gold correction that I have been predicting for weeks (Market Alerts about exiting positions were sent on Nov 27th and Nov 30th). Is there any reason to be worried about the long-term bullish trend for gold?
Can fear spook gold? As Commodity Online has already reported, gold is a lover of tragedies and it thrives on uncertainties. But, now gold has reached a level where uncertainty is hitting its forward march. When last week, gold prices hit global record levels above $1,200 per ounce the yellow metal suddenly climbed down on fears among investors that gold has reached its peak and there will be a correction. In normal circumstances, fears should feed gold prices. In fact, gold’s best quality is that the metal is used as a hedge against any uncertainty in the market. And, if gold itself is falling prey to the uncertain future, then it is time for investors to think twice before putting their money on gold above $1,100 per ounce, say analysts.
Marc Faber - coming of US Hyperinflation; weak currency
Gold prices turns volatile on Comex Well people, it was a bad day on last Friday. Barchart reported that the Dec. gold contract went from 1227 at its Thursday high to 1147 at its Friday low – an eighty point difference in a single day. And yet there be rumors floating through the dark alleys of the Comex that a certain advisory letter sent out a special bulletin interday on Dec. 2, with Dec. gold at 1208, advising its clients to sell their gold stocks. . . . . . . . . The first thing you need to understand is that gold is a well behaved good. Most commodities are mean and nasty – at least to the newcomer. Each commodity has its own peculiarities. And you have to trade it for a while and become familiar with these peculiarities before you can make money.
Muslim investors may bring down gold prices Will Muslims bring the gold prices down in the coming days? If a report appeared in India’s leading business daily Economic Times is any indication, Muslims will help bring down the soaring gold prices as they are now selling their old gold to book profits. Muslims are rushing to the bullion markets now because gold is their favourite investment as it is a Shariah-compliant business which they can involve in. If they dispose of the gold they have to book profits, the prices are set to come down. So, when India’s Reserve bank of India bought the IMF gold the prices soared to new highs but when Muslims opt to sell the old gold they have the bullion market may see a fall in prices.
Gold investment less risky than crude oil I've seen many business owners embrace what the banksters do in the market, the buying weakness and selling strength in a pyramid formation, and no gold writer can compete with that when they begin to execute on the strategy repeatedly. The substantial business owner brings too much to the table. It's an overwhelming force, a force that goes way beyond simple dollars, and is understood by very few outside of the bankster community. The volume of understanding of risk and reward that the business owner has, is something incomprehensible to most writers and analysts. It is a force of tremendous power.
Russian central bank to increase gold reserves Central Banks around the world are going bullish on the hottest commodity around—gold. After India’s central bank—the Reserve Bank of India (RBI)—bought 200 tonnes of gold from the International Monetary Fund (IMF) last month, more central banks are taking various initiatives to step up their gold reserves. Media reports from Moscow said this weekend that Russia’s state repository will sell 30 tonnes of gold worth $1 billion to the central bank next week.
Goldcorp chairman to head World Gold Council World Gold Council (WGC), the leading global gold organization, has a new head. Ian Telfer, chairman of the Canadian gold producer Goldcorp Inc is the new WGC chairman. WGC said in a statement that the apex gold body has appointed Ian Telfer as its new Chairman. Mr Telfer is Chairman of the Canadian gold producer Goldcorp Inc. and succeeds Greg Wilkins, Vice Chairman of Barrick Gold Corporation, who steps down from the Board of WGC.
The Future of Gold, the Dollar, and More The dollar has had a huge effect on the stock market's moves this year. As the dollar has depreciated, many stocks have climbed higher; the logic is that a weaker dollar will boost the bottom lines of companies such as McDonald's, Aflac, and Coca-Cola, all of which derive a substantial portion of their revenues from abroad. The depreciating dollar has also boosted commodity prices and associated commodity stocks such as Freeport-McMoRan or Newmont Mining, serving to lift the market.
One-on-One With Jim Rogers- CNBC-12.10.09
GLD Conspiracy Theories As the world's second-largest exchange-traded fund, and sixth-largest holder of gold bullion, the GLD gold ETF has grown into a juggernaut. GLD's mounting popularity among stock-market investors and speculators has made it one of the most powerful forces in the global gold markets. This ETF's success is all the more remarkable considering it was born just 5 years ago, its rise to prominence has been meteoric. With GLD's large and growing impact on gold prices, no trader can afford to ignore this behemoth. So it is watched with intense interest, creating a fertile breeding ground for GLD conspiracy theories to flourish.
Can technology bring down gold prices? The recent gold rally has shown signs of cooling off thanks to dollar rebound and better than expected US jobless data released last week. Inflation concerns, zero US interest rates and dollar weakness against major currencies have supported the yellow metal in recent times. Dehedging data does suggest the mining industry is looking forward to a bullish trend ahead.
Ron Paul Calls for Competition in Money Many years ago, John D. Rockefeller, Sr. famously stated, “Competition is a sin.” He preferred a monopoly, the very antithesis of economic freedom, in order to increase profits. A monopoly accomplishes for its creator the opportunity to gouge the public, a consequence generally well-known, and generally despised. There is, however, one commodity existing as a monopoly that the public does not loathe, the creation of money. This monopoly seems to most Americans to be the only way to proceed. They are unaware that our nation once had competing currencies and this competition led to honesty in the field of money.
Outlook 2010: The Dollar Holds the Key, Todd Harris It's hard these days to forecast what's going to happen in the next 12 minutes, much less the next 12 months. Still, as 2009 comes to a close, we can't help but ask our guests to predict the big themes of 2010. Todd Harrison, CEO of Minyanville.com, is a short-term trader by nature but isn't averse to taking the long view, either. With the financial crisis not over by his reckoning, the potential for "societal acrimony" (read: populism and class warfare) and "socio-economic and geopolitical unrest" are high heading into 2010, . . .
How Strong Will The Dollar Become Before It Crashes? Only six months ago the dilemma facing dollar analysts looked acute, with hedging the solution. Now the position looks much clearer: the dollar bottomed out around $1.50 and is now rebounding, taking commodity prices and stocks down as it goes up. Most dramatically the gold price hit $1,226 an ounce as the dollar hit rock bottom, and has since given back $100, prompting renewed pessimism about the future of gold from the same voices that warned about gold at $300 as a ‘barbarous relic’. Oil has also dropped below $70 and could fall much further as the dollar rally continues.
Bear Market to Last Until 2018 in U.S., Shaw Says U.S. stocks are in a bear market that may last until 2018 and benchmark indexes may set new lows, said Alan R. Shaw, the technical analyst who retired from Citigroup Inc. after 45 years with the bank and its predecessors. “I don’t think the bear market that started in 2000 has run its course yet,” Shaw said in an interview in New York. In the last report he authored for Citigroup in 2004, Shaw said the Dow Jones Industrial Average might struggle to remain above 10,000 for up to 20 years, “and I see no reason to change it five years later. My mindset continues to be very cautious.”
Nations' mounting debts worry global investors Greece's troubles are a particular concern after bonds took a tumble The Greek government on Friday scrambled to put together an emergency plan to rein in its runaway finances amid fears that a debt crisis could reignite turmoil in world markets. With big banks returning to health, the financial woes of entire nations have emerged as the biggest threat to the global economy. Though vows of swift action in Athens eased turbulent bond markets on Friday, analysts continued to warn of concerns even in pillar nations such as Britain.
Morgan Stanley’s Roach Sees Risk in Fed Exit Strategy The Federal Reserve may cause another crisis by botching the withdrawal of liquidity from the U.S. economy, Morgan Stanley Asia Chairman Stephen Roach said. The Fed is the “weak link” among central banks and may fail to tighten monetary policy in time to stop asset bubbles from forming, Roach said at a conference in Berlin today. The Fed helped trigger the boom and then bust of the subprime mortgage market by being “quick to slash, slow to normalize” interest rates, he said.
Federal Reserve likely to repeat low rate pledge The Federal Reserve, at a meeting this week, will likely close out the year by repeating a pledge to keep interest rates extraordinarily low for an extended period even as it nods to signs of economic healing. The central bank's policy-setting meeting on Tuesday and Wednesday will mark a year since the Fed cut benchmark interest rates to near zero to combat the worst economic crisis since the Great Depression. A year later, the economic picture has vastly improved and the recovery is gaining strength, no doubt bringing closer the day the Fed starts to inch away from its supportive policies.
Interest Rates Are Low, but Banks Balk at Refinancing Mortgage rates in the United States have dropped to their lowest levels since the 1940s, thanks to a trillion-dollar intervention by the federal government. Yet the banks that once handed out home loans freely are imposing such stringent requirements that many homeowners who might want to refinance are effectively locked out. The scarcity of credit not only hurts homeowners but also has broad economic repercussions at a time when consumer spending and employment are showing modest signs of improvement, hinting at a recovery after two years of recession.
Top bankers destroy value, study claims Bankers should count themselves lucky they are being hit by a mere 50 per cent additional tax on bonuses, a new report argues on Monday, because their benefit to society is negative. The New Economics Foundation, a left-leaning think-tank, says that by contrast hospital cleaners and many other low-paid workers contribute far more to society and this should be reflected in their pay. Although the NEF is far from an orthodox economic think-tank, its “A Bit Rich” report stems from standard public economics theory that the government should step in if people’s value to society is remarkably different from their private value to an employer. The government already steps in, taxing everyone to ensure many jobs with high social value happen where those services would not be provided otherwise.
Obama argues for strong financial watchdog agency President Barack Obama defended on Saturday a consumer watchdog agency the financial industry wants to weaken or strip from legislation that would strengthen the regulation of Wall Street. The Democratic-controlled House of Representatives on Friday approved the biggest changes in financial regulation since the Great Depression -- a much-needed victory for Obama, whose job approval rating has fallen below 50 percent. He and his fellow Democrats want to impose steps that would avoid a repeat of the meltdown that put the U.S. economy on the brink of collapse a year ago, and he used his weekly radio and Internet address to argue for "common-sense reforms."
No End in Sight to Govt. Spending Spree: $12.1T Debt Ceiling Set to Be Raised Earlier this week, President Obama laid out his latest plan to promote job growth. On the delicate issue of how to pay for the program, Obama declared: "Even as we have had to spend our way out of this recession in the near term, we have begun to make the hard choices necessary to get our country on a more stable fiscal footing in the long term." Clearly we are still in the "spending our way out of the recession" phase, judging by the House passage Thursday of a $1.1 trillion spending bill, which includes nearly 10% annual increases for the 10 cabinet agencies covered.
Financial reforms could shrink Fed's role The House of Representatives on Friday approved a financial reform bill that would expose the Federal Reserve to more scrutiny, threatening its cherished political independence. The provision is one of several in the House legislation that would affect the central bank. The Senate is also mulling proposals that could alter the Fed's role, with one leading plan aiming to strip the central bank of its bank regulatory powers.
Economists Voice Stimulus Worry Top economists from the U.S. and Europe warned of the danger of creating asset-price bubbles if central banks and governments repeat the past mistake of keeping expansive monetary and spending policies in place for too long. The financial crisis of the past two years is blamed partly on decisions by policy makers, especially the U.S. Federal Reserve, to keep interest very low after the 2001 downturn, despite a recovering economy.
Paul A. Samuelson, Economist, Dies at 94 Paul A. Samuelson, the first American Nobel laureate in economics and the foremost academic economist of the 20th century, died Sunday at his home in Belmont, Mass. He was 94. His death was announced by the Massachusetts Institute of Technology, which Mr. Samuelson helped build into one of the world’s great centers of graduate education in economics. In receiving the Nobel Prize in 1970, Mr. Samuelson was credited with transforming his discipline from one that ruminates about economic issues to one that solves problems, answering questions about cause and effect with mathematical rigor and clarity.
Bernanke's second term could be as tough as first he Black Monday stock-market plunge that greeted Alan Greenspan in 1987 was a breeze compared with the hurricanes that confronted Ben S. Bernanke during his first term as Federal Reserve chairman. In fact, if you added up all the crises that Mr. Greenspan faced during his 18 years as Fed chairman — Black Monday, the savings and loan blowout, the Mexican peso debacle, the Asian financial meltdown, the implosion of Long-Term Capital Management and the Sept. 11, 2001, terrorist attacks — it would still be tough to approach the challenges that Mr. Bernanke has been forced to address.
Senate approves government funding bill The U.S. Senate on Sunday approved $447 billion in spending for several Cabinet departments and other agencies for the 2010 budget year -- money needed to fund the federal government after this week. On a mostly partisan vote of 57-35, the Senate approved the compromise omnibus spending plan worked out with the House, which passed it last week. The measure, which would succeed a funding resolution that expires Friday, now goes to President Obama to be signed into law.
Sweeping bank reform bill clears House Measure, aimed at preventing another big financial crisis, imposes more oversight and creates consumer protection agency. The House passed legislation Friday aimed at preventing the next big financial crisis, ushering in the most sweeping set of changes to the banking regulatory system since the New Deal. The bill, which passed 223-202, imposes more oversight and stronger capital cushions for the largest banks and Wall Street firms. It forces them to pay a total of as much as $150 billion into an emergency fund that could be tapped when a troubled company needs to be taken over and broken up.
Can Obama bully the bankers? The president wants more lending, less gouging and smaller paychecks. But after a year of pro-bank policies, he may not carry a big enough stick. President Obama is about to give the banks an earful about lending. But he may be a day late -- and $116 billion short. Obama will meet Monday with top executives of some of the nation's biggest lenders. CEOs of 12 banks are expected, including the heads of American Express, Bank of America, Capital One, Citigroup, JPMorgan Chase, Morgan Stanley, and Wells Fargo.
All eyes on the Fed As a tumultuous year nears an end, investors turn their attention to the Fed for an indication of when near-zero interest rates might begin to rise. As an insistent stock market rally coasts into the new year, investors are starting to look forward -- raising questions about just what kind of recovery we're in for. Investors are mulling two contrary thoughts, said Bernard McGinn, CEO at McGinn Investment Management: "Either we've turned a corner and things are looking better or it's still rough out there and we need to be cautious."
Peter Schiff: dollar, gold, growth, Volcker, debt
Recession's latest victim: U.S. innovation Patent filings fell in 2009 for the first time in 13 years, worrying Silicon Valley that it is losing its place as the leader in global innovation. U.S. innovation slowed this year for the first time in 13 years as the recession cut into budgets, and costs to protect inventions rose. The number of patent filings in the United States fell 2.3% in 2009 to 485,500 from 496,886 last year, according to a preliminary estimate by the U.S. Patent and Trademark Office. That makes 2009 the first year since 1996 in which businesses and inventors filed fewer patents year over year.
For feds, more get 6-figure salaries The number of federal workers earning six-figure salaries has exploded during the recession, according to a USA TODAY analysis of federal salary data. Federal employees making salaries of $100,000 or more jumped from 14% to 19% of civil servants during the recession's first 18 months — and that's before overtime pay and bonuses are counted. Federal workers are enjoying an extraordinary boom time — in pay and hiring — during a recession that has cost 7.3 million jobs in the private sector.
Obama and Rubin at the Bada Bing! "I did not run for office to be helping out a bunch of fat cat bankers on Wall Street," Obama said Friday in excerpts of an interview with CBS television to be aired on Sunday. With unemployment still hovering at around 10 percent, amid a recession triggered in part by the excesses of financial institutions, Obama voiced frustration that "some people on Wall Street still don't get it." Excuse me, Mr. President, but I'm pretty sure it’s either you who still doesn't get it, or it's the American people who still don't get it. I think the bankers do get it. And the lowest approval rating in history for a president after 1 year might just indicate that the American people are starting to get it too. According to Mr. Taibbi and me, ALL you’ve done since assuming office is help out a bunch of fat cat bankers.
Abu Dhabi Rescues Dubai With $10 Billion; Nakheel to Repay Bond Abu Dhabi government provided $10 billion for Dubai’s financial support fund to help repay obligations, including the $4.1 billion needed for Nakheel PJSC’s Islamic bond maturing today. Dubai will use the rest of the money to pay “trade creditors and contractors as well as meet interest expenses and company working capital through April 30, 2010 - conditioned on the company being successful in negotiating a standstill as previously announced,” the Dubai government said in an e-mailed statement today.
Euro Gains as Dubai Pledges to Repay Debt; Pound Reverses Loss The euro rose against the dollar after Dubai World said it will repay bonds owed by state-related Nakheel PJSC today, calming concern about losses on riskier assets.
Gulf States to Compete More for Money as Banks Balk After Dubai The emirs, presidents and sheikhs of the six members of the Gulf Cooperation Council meet in Kuwait this week with the days of easy credit over following a year of debt defaults and deferred payments. Dubai World said Dec. 1 it was seeking to restructure $26 billion of borrowing, and the race to build financial centers and skyscrapers is now turning into a competition to convince banks simply to keep lending to the region, investors and economists said. The GCC annual summit starts today.
China's Economy Is Still Recovering, But How About Ours? China's economic recovery accelerated in the third quarter, and November's export numbers were the best in a year. Driving the recovery is major government stimulus and, importantly, massive lending by China's banks. Meanwhile, in the U.S., our less-vibrant recovery is also being driven by government spending, but our banks aren't lending. Still overloaded with bad loans from the boom, and still finding relatively few companies and consumers with the capacity to borrow more, banks are hunkering down and buying risk-free Treasuries.
Interview with a Commercial Real Estate Developer about the CRE Industry Developer and commercial real estate (CRE) investor Mr. Solomon discusses how the once overheated CRE market froze over. Mr. Solomon (name changed) is a CRE veteran with 40 years of experience developing commercial real estate in 15 states and has kindly agreed to be interviewed about the current conditions in the CRE market.
Mortgage ‘Cram-Down’ Amendment Fails in U.S. House he U.S. House rejected a mortgage “cram-down” amendment that would have given federal judges the power to lengthen mortgage terms, cut interest rates and reduce loan balances for homeowners in bankruptcy court. Lawmakers voted 241-188 today against the amendment, which was to be part of broader legislation reining in excessive risk taking on Wall Street. All but four of the Republicans who voted opposed the amendment, pulling with them 71 Democrats to defeat the measure.
The Lure of Store Credit Cards, and the Hook You may be tempted this season to give in to the plea from that persistent sales clerk at one of the big retailers — “Are you sure you don’t want to save 15 percent today?” — and open up a couple of store-brand credit cards. After all, a 15 percent discount, or no interest payments for 18 months, sounds enticing when you are buying gifts by the armful. But before you start filling out the application, there are some things you need to know. If you carry a balance on store-brand cards, known in the industry as private-label cards, or if you miss a payment on your no-interest purchase, you can end up wiping out those initial savings, and then some. And when you open a new credit card, your credit score can suffer, too.
Are Americans a Broken People? Why We've Stopped Fighting Back Against the Forces of Oppression A psychologist asks: Have consumerism, suburbanization and a malevolent corporate-government partnership so beaten us down that we no longer have the will to save ourselves? Can people become so broken that truths of how they are being screwed do not "set them free" but instead further demoralize them? Has such a demoralization happened in the United States? Do some totalitarians actually want us to hear how we have been screwed because they know that humiliating passivity in the face of obvious oppression will demoralize us even further?
Four More Years To Fall Residential Property Price Index The exhaustive Freddie Mac price index fell 2% nationwide in the 3rd quarter and analysis of its data predicts prices will continue to fall for the next four years. While Freddie announced Tuesday that its purchase-only index has gained for the past two quarters, the “Classic Series” of the Conventional Mortgage Home Price Index, which includes refinance appraisals as well as purchase values, has fallen 9% from the high in June 2007 and 3.8% for this year. The projections say homeowners have lost only $1 for every $3 they can expect to lose in the end.
Lieberman resists Medicare buy-in plan Lieberman rejects plan to let people 55 and up buy into Medicare Risking the wrath of Democrats, Sen. Joseph Lieberman, I-Conn., threatened Sunday to join Republicans in opposing health care legislation if it permits uninsured individuals as young to 55 to purchase Medicare coverage. Lieberman, whose vote is critical to the bill's prospects, expressed his opposition twice during the day: first in an interview with CBS, and more strongly later, according to Democratic officials, in a private meeting with Senate Majority Leader Harry Reid. Reid, who is hoping to pass the legislation by Christmas, needs 60 votes to overcome Republican objections, and has been counting on Lieberman to provide one.
NRA-ILA Grassroots Minute 12/11/09
Fastest Food Inflation Since Riots Means Milk Costs Rising 39% Falling production in commodities from rice to milk is bad news for just about everyone except investors. Rice may surge 63 percent to $1,038 a metric ton from $638 on Philippine imports and a shortage in India, a Bloomberg survey of importers, exporters and analysts showed. The U.S. government says nonfat dry milk may jump 39 percent next year, and JPMorgan Chase & Co. forecasts a 25 percent gain for sugar. Global food costs jumped 7 percent in November, the most since February 2008, four months before reaching a record, according to the United Nations Food and Agriculture Organization.
Greenspan Sees Jobs Rebound as Stretched Companies Boost Output Former Federal Reserve Chairman Alan Greenspan said today he expects a quick rebound in jobs because companies are stretched to expand production after workforce cuts made during the recession. Greenspan said on NBC’s “Meet the Press” program that businesses were “very frightened” by the financial crisis and deterioration of the U.S. economy early this year and cut their payrolls so deeply that they will have to begin hiring soon.
Google to produce, sell own "Nexus One" phones Google Inc plans to sell its own cellphone direct to consumers as soon as next year, bypassing wireless operators in a rare strategic move, the Wall Street Journal cited sources as saying on Saturday. Called the Nexus One and made by smartphone maker HTC, the phone will run on the search giant's Android operating system -- around which Motorola and other cellphone makers have built devices -- and will be sold online, the newspaper cited persons familiar with the matter as saying. Cellular service will have to be bought separately, it added.
Big Risk in a One-Man Brand Like Tiger Woods Accenture, the giant consulting firm, ended its six-year marketing relationship with Tiger Woods on Sunday, showing once again that in advertising as in sports, there are no sure things. Mr. Woods had been featured in Accenture campaigns with the tagline, “Go On. Be a Tiger,” splashed in business magazines and airport waiting rooms since 2003. Since most consumers have no idea what a company like Accenture does, Mr. Woods became the human face of the corporation and a means to extol the corporate virtues of performance and risk-taking.
Accenture: Tiger 'no longer the right representative' Global consulting firm Accenture Ltd. has ended its relationship with Tiger Woods, marking the first major sponsor to cut ties altogether with the golfer since his alleged infidelities surfaced and he announced an indefinite leave from the sport to work on his marriage. In its first statement since the Woods' scandal erupted, Accenture said Sunday the golfer is "no longer the right representative" after the "circumstances of the last two weeks." The move ends a six-year relationship during which the firm credited its "Go on, be a Tiger" campaign with boosting its image significantly. Accenture has used Woods to personify its claimed attributes of integrity and high performance.
Beijing Auto to Buy Some Saab Assets Beijing Automotive Industry Holding Co. has reached a tentative deal to acquire certain assets of General Motors Co.'s Saab unit, including intellectual property for two sedans and equipment to produce those cars, according to a person with direct knowledge of the agreement. The deal, sealed over the weekend in Sweden, will enable Beijing Auto, one of China's main state-owned auto makers, to integrate the Saab technology into its own vehicles. The agreement covers some models of Saab's 9-3 compact sedan series and the current 9-5 midsize car, along with their engines and transmissions, the person said.
GM Said to Push Full Sale of Saab as Spyker Becomes Frontrunner General Motors Co. has adjusted its plan for Saab to focus on selling the entire unit, with Spyker Cars NV emerging as a frontrunner, according to people familiar with the situation. Spyker, the Dutch maker of $235,000 sports cars, was negotiating details of an agreement with GM over the weekend in Zurich, said two people, who asked not to be identified because the talks are confidential. GM has separately reached a preliminary deal to sell some technologies for Saab’s 9-3 and 9-5 models to Beijing Automotive Industry Holding Co., with an agreement likely to be announced soon, a person said.
China signals climate funds shift China signalled on Sunday that it had abandoned its demand for funding from the developed world to combat climate change, the first apparent concession by one of the major players at the Copenhagen climate talks. However, in the same interview with the Financial Times, the most senior Chinese negotiator accused rich countries of preparing to blame a failure at Copenhagen on Beijing. As the talks entered their critical final week, He Yafei, Chinese vice-foreign minister, said financing from rich countries should be directed to poorer countries.
Greece Struggles to Stay Afloat as Debts Pile On ATHENS — Ever since Greece’s credit rating was downgraded last week, its new Socialist government has fought back, saying it has the mettle to tackle the soaring deficit and structural woes that have earned the country a reputation as the weak link in the euro zone. “We will reduce the deficit, we will control the debt and there will be no need for a bailout,” the Greek finance minister, George Papaconstantinou, said in an interview in his office here this week. “We are not Iceland; we are not Dubai.”
Greece defies Europe as EMU crisis turns deadly serious Euroland's revolt has begun. Greece has become the first country on the distressed fringes of Europe's monetary union to defy Brussels and reject the Dark Age leech-cure of wage deflation. While premier George Papandreou offered pro forma assurances at Friday's EU summit that Greece would not default on its €298bn (£268bn) debt, his words to reporters afterwards had a different flavour. "Salaried workers will not pay for this situation: we will not proceed with wage freezes or cuts. We did not come to power to tear down the social state," he said. Were we to believe that a country in the grip anarchist riots and prey to hard-Left unions would risk its democracy to please Brussels?
Greece warned to act over default risk Greece must announce bold initiatives in the next few days to rescue its collapsing bond market and avert the possibility of defaulting on a rising public debt, leading economists and bankers warned on Sunday. George Papandreou, prime minister, will outline structural reforms on Monday aimed at cutting the budget deficit from 12.7 per cent to 3 per cent of gross domestic product – the limit allowed by the eurozone’s stability and growth pact – over the next four years. But observers were pessimistic on Sunday night that Mr Papandreou would reverse his current policy and call for an immediate freeze on public sector wages and higher excise taxes
Gulf States to Compete More for Money as Banks Balk After Dubai The emirs, presidents and sheikhs of the six members of the Gulf Cooperation Council meet in Kuwait this week with the days of easy credit over following a year of debt defaults and deferred payments. Dubai World said Dec. 1 it was seeking to restructure $26 billion of borrowing, and the race to build financial centers and skyscrapers is now turning into a competition to convince banks simply to keep lending to the region, investors and economists said. The GCC annual summit starts today.
John Christy VS Gavin Schmidt On Climate Gate
China to Block Climate Deal Without African Payouts Chinese Premier Wen Jiabao won’t sign any climate change agreement in Copenhagen unless African demands for compensation for the effects of global warming are met, Ethiopian Prime Minister Meles Zenawi said. Meles, who is representing 52 African nations at the talks, said “the indications are India is likely” to make the same pledge. “I assume if there is no agreement that Africa can sign, I assume there will be no agreement that anybody can sign,” he said late yesterday in Addis Ababa. “If Copenhagen is simply going to be about an agreement that rides roughshod over Africa, then obviously we’ll try to scuttle it.”
Developing Countries Say ‘No Money, No Deal’ in Climate Talks Four days before 110 world leaders fly to Copenhagen to complete a deal to curb global warming, negotiators are far apart on aid to poorer countries and how to verify nations fulfill their pledges to reduce greenhouse gases. Envoys from 192 countries discussing a climate-protection accord in the Danish capital released a draft on Dec. 11 that shows they cannot agree on how to police an agreement. The document contains no subsidies to help developing nations cut carbon-dioxide emissions and adapt to climate change.
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Fri 12.11.2009
Guest host, Mark Call - Friday Patriot Radio News Hour - 9-10 am MST Contact Mark via e-mail
Break the Monopoly! Ron Paul Introduces HR 4248, the Free Competition in Currency Act Statement of Congressman Ron Paul United States House of Representatives
Statement Introducing the Free Competition in Currency Act
December 9, 2009
Madame Speaker, I rise to introduce the Free Competition in Currency Act of 2009 (HR 4248). Currency, or money, is what allows civilization to flourish. In the absence of money, barter is the name of the game; if the farmer needs shoes, he must trade his eggs and milk to the cobbler and hope that the cobbler needs eggs and milk. Money makes the transaction process far easier. Rather than having to search for someone with reciprocal wants, the farmer can exchange his milk and eggs for an agreed-upon medium of exchange with which he can then purchase shoes. . . . .
Americans: Angry and Very Confused Up for a little schizophrenia with your recession blues? People are hurting and angry, but some on Wall Street seem oblivious. Worse, citizens want contradictory things from the federal?government: More spending, a lower deficit, and lower taxes. That suggests it will be difficult to gain political?support for the policies needed to revive the economy.
Americans Are Furious at Wall Street A new Bloomberg National Poll shows them angry at banks and brokers—and furious about bonuses Wall Street firms are recovering—but their standing with the American public is not. The public rage directed at Wall Street banks and brokerages remains at high levels, according to a Bloomberg National Poll of 1,000 U.S. adults conducted on Dec. 3-7 by the Des Moines firm Selzer & Co. Two-thirds of Americans say they have an unfavorable view of financial executives. More than half say big financial companies, which are expected to pay record yearend bonuses, are out only to enrich themselves and also should not have received government aid.
What Must Be Addressed: Rising Abject Poverty I define abject poverty as lacking shelter and sufficient food to stave off hunger. By this simple measure, abject poverty is rising in the U.S. This is happening even as Wall Street pockets billions in bonuses, the government squanders $2 billion a day in Afghanistan and trillions more on toxic mortgage securities and other bailouts of the Power Elites. Yes, there are homeless shelters and food stamps, but the reality of how many are living on the knife-edge financially is not captured in the usual (manipulated and massaged) government statistics.
Food Stamps Go to a Record 37.2 Million, USDA Says A record 37.2 million people, or about one out of every eight Americans, received food stamps in September, as the recession drove a surging jobless rate, according to a government report. Recipients of the subsidy for retail-food purchases climbed 18 percent from a year earlier, according to a statement posted today on the U.S. Department of Agriculture’s Web site. Participation has set records for 10 straight months.
New Underground Economy The underground or "black" economy is rapidly rising, and the fault is mainly due to government policies. Here is the evidence. The Federal Deposit Insurance Corp. (FDIC) released a report last week concluding that 7.7 percent of U.S. households, containing at least 17 million adults, are unbanked (i.e. those who do not have bank accounts), and an "estimated 17.9 percent of U.S. households, roughly 21 million, are underbanked" (i.e., those who rely heavily on nonbank institutions, such as check cashing and money transmitting services). As an economy becomes richer and incomes rise, the normal expectation is that the proportion of the unbanked population falls and does not rise as is now happening in the United States.
House passes $447 billion spending bill The House of Representatives on Thursday approved a $447 billion bill that boosts funding for a large part of the U.S. government and reflects priorities of Democrats who control Congress and the White House. The House approved the spending bill by a vote of 221 to 202 and sent it to the Senate, which must pass it by December 18 or extend a temporary measure to keep the government running. The measure would fund dozens of government agencies through the rest of the 2010 fiscal year, which ends next September 30. No Republicans voted for it. They blasted the 2,444-page measure as an irresponsible 14 percent spending increase for domestic programs at a time of record government deficits.
The On-Again, Off-Again Depression The US stock market is still in "bounce mode." All bounces come to an unhappy end. This will be no exception. If you step back a bit further, you could see it in a different light. Ten years ago, The Daily Reckoning warned of a long, Japan-like slump. Then, the stock market fell and the economy went into a recession. But the downturn didn't last long. And in the bubbly years that followed, our alert was quickly forgotten - especially by us! But now, 10 years have gone by. The S&P 500 has lost 20% of its value during that period. Wages and income are static. And there is not one single more job in America than there was then. It was a "Lost Decade" for the American economy.
U.S. Economy: The Big Questions for 2010 What can we expect from the consumer next year? From business spending? Trade? The Fed? Action Economics has some answers—and questions of its own Are U.S. consumers growing confident over growth prospects, or just more terrified over federal fiscal imprudence? Are businesses coiled for a cyclical spending surge, or just "recoiled" in the face of an ongoing commercial real estate collapse and one-sided risk for tax, regulatory, and health-care changes? Will movement in net exports and energy costs help or hinder U.S. growth? Will a rapidly changing political dynamic translate to a voter tsunami in 2010? And will the Fed get caught in the undertow? It's likely that all these questions will be answered in 2010
Geithner: don't declare victory too soon in crisis The U.S. economy is struggling against "headwinds" that mean the government must retain the ability to respond to unexpected crises, even as it starts to wind down emergency programs, Treasury Secretary Timothy Geithner said on Thursday. Testifying before a congressional panel that oversees the Troubled Asset Relief Program, or TARP, Geithner took credit for having averted a complete financial meltdown but warned against becoming too optimistic about a rebound. "The financial and economic recovery still faces significant headwinds," he said, citing high unemployment and home foreclosure rates, tight credit and impaired securitization markets, especially for mortgage-backed securities.
What Recovery? America's Problems "Getting Worse, Not Better," Jim Rogers Says "It's getting worse, not better." That's how Jim Rogers responds to the recent talk of improvement from President Obama, Treasury Secretary Geithner and Fed Chairman Bernanke, among others. "Papering over the problem is not going to solve America's problem," Rogers says. "The idea you can solve a problem of too much debt and too much consumption with more consumption and more debt defies belief. I cannot believe that grownups would stand there and say that."
Gold gains by whopping $540 an ounce in 13 months he 13 month old bull market in gold has an incredible $540 dollar run behind it a short time. This is significant when you consider that for all of history, gold was under $700 at one point last October. The best part of the seasonal run on average is behind us. But that is on average. In bull markets, gold has the tendency to run higher in the mid winter to early spring timeframe. The bullish fundamentals and news of nations and central banks buying gold, the short supply in the physical markets, the rumors of physical shortages at the exchanges, the debasement of paper currencies via the printing press, and the “LOSS OF CONFIDENCE” in world government provides a powerful incentive for potential price increases in gold.
Gold: The Ultimate Un-Bubble **Newsflash** The gold bubble has not popped! ...because gold is not in a bubble. There is no gold bubble. There is no such thing as a gold bubble. Never has been. Never will be. 1980 was not a gold bubble. And anyway, today's situation is entirely different. In fact, gold is the opposite of bubbles. It is the inverse, the recipient, the beneficiary of "frothy air" that escapes at lightning speeds when bubbles pop. It has already capitalized on the demise two bubbles this decade. And it is now about to absorb the froth spontaneously expelled by two more, the two biggest bubbles the world has ever seen.
Gold prices set to increase HE gold bullion price increase which characterised the last quarter of 2009 is expected to continue in 2010 following increased demand on the global market. According to the investment company, Investec’s gold price analysis, the upsurge in the precious commodity is driven by continued weakness in interest rates. The increase in gold prices is expected to transform the fortunes of the mining sector left in a financial mess after the global economic crisis swept through the world economies. The increase in gold prices next year comes amid the mass consumption of gold from the International Monetary Fund reserves by Sri Lanka and India.
Gold retains lustre despite rising price The soaring price of gold in the international market has not taken the shine off local demand for jewellery. Habib Jewels Sdn Bhd managing director Datuk Meer Sadik Habib said demand for gold and other jewellery remained high as consumers not only see it as an ornament but also as an investment. “There is a lot of confidence in gold,” he said. “But what is stranger is that when the prices were falling previously there was a lack of demand then,” he said at the opening of the Habib Jewel showroom at the new Suria Sabah complex here yesterday. He believed that people found gold a safer investment as it was not exposed to geo-political risks like currencies and other investments.
Gold rises above $1,130 as dollar steadies Gold prices rose above $1,130 an ounce on Friday as the dollar steadied after snapping a four-day losing streak the day before, when investors returned to buy bullion following its fall from record highs hit last week. Spot gold hit a one-month low below $1,120 per ounce earlier this week and looks set for a weekly loss of 2.4 percent if prices stay at current levels, which put it 8 percent below the record high reached last week.
Gold Price Draws Bargain Hunters Gold prices settled Wednesday down $100 from its record high of $1,226 on global credit fears, but the precious metal is finding support on the back of a weaker U.S dollar. The U.S. dollar index was slightly lower at $75.90. While gold delivery for February was adding $10.40 to $1,131.30 an ounce at the Comex division of the New York Mercantile Exchange. The contract has traded as low as $1,121.80 and as high as $1,137.70.
Why gold and silver have intrinsic value Intrinsic Means Forever Intrinsic value does not mean that the product may have value for some time, or even for a long time. Instead, intrinsic value denotes value forever, and that value remains relatively unchanged and equal to the same amount today as it was thousands of years ago. Gold and silver are some of the only products with intrinsic value (excluding food and shelter) because they've been demanded for thousands of years. In addition, they still purchase the same goods today as they would in ancient times. The best example is that of the custom suit, which can be purchased today for $1100 (the price of an ounce of gold), just as it could during the 1940s and ancient times for an ounce of gold.
A Gold Correction Won’t Derail The Long-Term Bull Market Dennis Gartman today addresses the correction in gold which will without a doubt wet the appetite of central banks looking to add it to its reserves. In The Gartman Letter this morning, Mr. Gartman — with Gold continuing its correction, dipping below the $1140 level this am — predicts the appropriate price for the precious metal to be in the $1025 to $1065 range:
Could $5,000 gold be too low as dollar loses value? Long-term readers know that gold moves inversely to the dollar, meaning if the dollar drops, gold tends to rise (and vice versa). This happens with about 80% regularity. But what many gold writers haven’t acknowledged is the leveraged movement our favorite metal has demonstrated this year to the world’s reserve currency.
A Low May Be Forming in Gold Unfortunately for gold bulls, the yellow metal broke below the Dubai low of $1135.80 and to as low as $1125 after the COMEX close yesterday during the thin electronic session. Interestingly though, that breach of the Dubai low didn't trigger an avalanche of stop-loss-related selling like one might have expected. And the metal even bounced into the equity close to go out back up at $1130ish, which makes one wonder if this late-day slide was bears leaning on the price in the thin electronic session, looking for stops to run. After all, based on the record volume in the 2x short gold ETFs (GLL and DZZ) over the past few days, the shorts have been extremely active in gold.
Gold Fever: The Business in Bullion | Made in Germany The price of gold is on the rise,and the raw material has never been as valuable as it is today. In times of uncertainty,investors fall back on the security of gold -- whether it's in the form of bars,coins or jewelry.But even gold dealers and jewelry manufacturers need a sure supply,so they regard the surge in the price of raw gold with mixed feelings. Meanwhile the business of purchasing raw gold flourishes. Gold fever is spreading in Germany. Report by Marion Kappel.
Gold bounces off, better opportunity to sell Gold prices edged up in early London dealings on Thursday, after succumbing to a late session sell off in NY on Tuesday that came after the U.S. dollar added to its recent days gains following renewed credit worries. Rating agency Standards & Poors downgraded its outlook on some Spanish ratings to “negative”, while Moody’s downgraded Greece’s debt, which lent support to the U.S. currency.
Over for gold? Not so fast Bullion's bull market remains intact Don't be suckered into thinking the recent plunge in gold prices means a bubble has burst. It's just too early to say if it's just a pop. My bet: Bullion's bull market remains intact because the factors fueling the rally haven't disappeared. Last Friday, the price of gold saw its biggest one-day drop since March 2008. It slid to $1,142.50 a troy ounce in London on Monday from an all-time high around $1,218.25 Thursday following Friday's modestly favorable employment news.
Bernanke's golden heirloom On December 1, gold breached the US$1,200 per ounce mark and, despite slight declines since then, it still looks that the sky is the limit for the precious metal's price. This shouldn't be a surprise. It was predicted a year ago, a sure outcome of US Federal Reserve chairman Ben Bernanke's zero interest rate policy and a US dollar printing press running on overtime. This is the market's response, pointing to a failure of Fed's policies and a brewing of other bubbles in commodities and asset prices. It is also a blow to the Group of 20 countries' approach to restoring economic stability and growth.
How to Forecast the Gold Price Long-term readers know that gold moves inversely to the dollar, meaning if the dollar drops, gold tends to rise (and vice versa). This happens with about 80% regularity. But what many gold writers haven’t acknowledged is the leveraged movement our favorite metal has demonstrated this year to the world’s reserve currency. The U.S. dollar index, a six-currency gauge of the greenback’s value, has dropped 7.8% so far this year (as of December 3). Meanwhile, gold is up 38.7% year-to-date. In other words, for every 1% drop in the dollar index, gold has risen 4.9%. If that approximate percentage holds over time, one can begin to estimate what the gold price might be if you know what the dollar might do.
Gold futures poised for second day of gains Gold futures headed higher in electronic trading Friday afternoon in Asia, extending the gains seen in New York as traders reassessed the recent four-session price drop of nearly $100 an ounce. Gold for December delivery was up $9 at $1,134.70 an ounce in Asian afternoon trading on Globex. The contract had gained $5.30, or 0.5%, to end at $1,125.70 an ounce Thursday on the Comex division of the New York Mercantile Exchange. See Thursday's Metals Stocks column. The front-month December contract lost nearly $100, or 8%, in a losing streak that began last Friday and spanned four sessions -- the longest losing streak in six weeks.
A Bear Market Until 2018? Major U.S. stock indexes may be headed for new lows, says veteran technical analyst Alan R. Shaw, who predicts gold will reach $2,000 per ounce U.S. stocks are in a bear market that may last until 2018 and benchmark indexes may set new lows, said Alan R. Shaw, the technical analyst who retired from Citigroup Inc. after 45 years with the bank and its predecessors. "I don't think the bear market that started in 2000 has run its course yet," Shaw said in an interview in New York. In the last report he authored for Citigroup (C) in 2004, Shaw said the Dow Jones Industrial Average might struggle to remain above 10,000 for up to 20 years, "and I see no reason to change it five years later. My mindset continues to be very cautious."
Jim Rogers buys dollar, predicts $2000 gold by 2019 . . . . Jim Rogers, who is now settled in Singapore and who designed the Rogers International Commodity Index (RICI)--a composite, US dollar-based, total return index, pointed out that the global economy is going into a deep mess and the US dollar is collapsing, day by day. “The collapsing US dollar is putting the global economy into a deeper crisis,” he added. Rogers has been predicting that gold prices are on a bull run, powering the great commodities bull run that will last for the next one decade.
Globe "Overdue for a Currency Crisis" Why Jim Rogers Is Buying Dollars "It wouldn't surprise me at all to see a nice rally in the dollar,” says Jim Rogers. The legendary investor tells Tech Ticker he has started to accumulate more greenbacks as of late. Rogers is still negative on the long-term fundamentals for the dollar, noting "the U.S. is the largest debtor nation in the history of the world." But "when everybody is on one side of the boat, invariably you should run over to the other side, for awhile," he tells Aaron in the accompanying video.
Copenhagen climate summit: George Soros urges use of IMF gold for green loans George Soros, the billionaire investor, has suggested that the International Monetary Fund should use $100bn of gold reserves to back green loans from rich to poor nations. Mr Soros waded into the Copenhagen climate change talks this morning, explaining that the “not sufficient” money offered by developed nations to help out developing countries is threatening to “wreck the talks”. He claims to have “found a way to bridge the gap” between the two sides, calling on the 192 governments at the summit to listen to his proposals.
Commodity Demand Will Surprise in 2010 Commodities demand likely will “continue to surprise” as investors pump a record $60 billion into raw materials through index swaps, exchange-traded products and medium-term notes this year, according to Barclays Capital. By year-end, “commodity assets under management” will reach about $250 billion, within 8 percent of a peak at the end of June 2008, Barclays said today in a report. By then, oil was headed to a record and corn had touched an all-time high.
Official Chinese paper calls for more gold reserves China should increase the proportion of gold in its foreign exchange reserves to ensure the safety of its overall portfolio, an official Chinese newspaper said on Tuesday. The commentary, which was written by an academic and appeared in the overseas edition of the People's Daily, also said that a bigger holding of gold was a crucial building block for the yuan to become an international currency. Gold XAU= has soared to record highs over the past month, in part on expectations that China will step up gold purchases to boost its official reserves of the precious metal.
The Power of The Theory of Money and Credit With the great bursting of the real-estate bubble in 2008, the federal government is reforming and expanding its regulatory oversight in hopes of legislating away booms and busts. Recent decades have featured a series of speculative manias followed by harrowing financial busts, with central banks applying the same tonic — a flood of monetary stimulus — to salve the nation's financial wounds.
How would today's SuperInflation compare with the 1970s? It is no secret that we are staunch believers that Uncle Benny and Co’s wild monetary adventures will result in massive inflation down the line. To describe the inflationary effects that are likely to result from such monetary expansion we have often invoked the term SuperInflation, which we have defined as a Consumer Price Index (CPI) reading of 25% annual change, irregardless of how long it stays there. For some context, this has only happened 3 times in the history of the US, and only briefly each time. In traditional economics, it’s all about timeframe; it is said all you must do is wait long enough and you will always be correct. For that reason, we have also given a timeframe over which we expect SuperInflation to happen, within 2-3 years time. Clearly, at the moment, regulators, the media and some portion of the public are more concerned about the prospects of deflation. In the near future, we will do a post on the whole deflation/inflation debate from a Hegelian perspective.
Outlook 2010: The Dollar Holds the Key, Todd Harrison Says It's hard these days to forecast what's going to happen in the next 12 minutes, much less the next 12 months. Still, as 2009 comes to a close, we can't help but ask our guests to predict the big themes of 2010. Todd Harrison, CEO of Minyanville.com, is a short-term trader by nature but isn't averse to taking the long view, either. With the financial crisis not over by his reckoning, the potential for "societal acrimony" (read: populism and class warfare) and "socio-economic and geopolitical unrest" are high heading into 2010, as he writes here.
The dollar, despite widespread pessimism, could stage a sharp rally A few years ago, ever rising home prices seemed like a sure bet. Today, Wall Street's sure bet is a weak and falling dollar. But investors would be wise to consider what would happen if the conventional wisdom were to fall short yet again and the greenback staged a turnaround. While some giant fund managers say that the dollar has no place to go but down thanks to record deficits, a handful of investors with a knack for going against the grain have started to look for a rally instead. As the status quo increasingly counts on a glide down, any surprise -- positive or negative -- could lead to a sharp reversal that would have major implications for investors.
European Monetary System Crisis, Debt Show Down in Athens Greek Finance Minister George Papaconstantinou has the European Central Bank over a barrel and doesn't even know it. If he had a handle on the situation, he'd thumb his nose at the ECB's austerity measures, and demand a no-strings-attached loan package to help his country get through the current rough patch. Instead, he's carrying on like a faint-hearted schoolboy.
Funds see Dubai contagion as chance to buy Gulf debt and build positions Elite global funds are snapping up the bonds and debt derivatives of energy rich countries across the Gulf, taking advantage of the Dubai storm to accumulate rock-solid assets at bargain prices. Roy Maurer, managing-director of Qatar's QNB Capital, said panic flight from the region had led to an indiscriminate sell-off of quasi-sovereign bonds from oil and gas states with vast wealth and very low levels of debt. "Those who were spooked by Dubai are giving a nice profit to anybody who knows the region and understands that Qatar, Abu Dhabi, Saudi Arabia, and Kuwait are much stronger credits. Funds are building up positions significantly," he said.
Max Keiser on Dubai & the Second Phase of Global Debt Crisis - 10 December 2009
Lehman, Dubai Say Much About Double-Dip Economy Ask Japanese why their economy plunged in 2008 and most will blame the “Lehman shock.” A year from now, the “Dubai shock” may crop up in discussions about why Japan is shrinking anew. Dubai’s debt crisis accelerated an export-killing yen surge and showed that the world economy remains sick without an easy cure.
The Hottest Places to Invest in 2010 For global investors, 2010 is shaping up to be a year with two very distinct economic outlooks. In the first "half," which is actually likely to end in early September, investors can expect a continued escalation in commodity prices, generally bullish stock markets and an ongoing focus on powerful monetary and fiscal "stimulus" initiatives. In the second "half," reality will reassert itself, and investors will find the going tough in many markets.
Today's US Treasury 30 Year Auction Well, it is year end. But there is undeniably a strong move to the short end of the curve, especially by the big debt buyers like foreign central banks who prefer their maturities in the 3 to 5 year range or less, sans agences s'il vous plait. This was also seen in yesterday's Ten Year Auction. As for domestic buyers, the yield curve preference is less an investment decision than an IQ test. Only Zimbabwe Ben and the Last Resort Boys, along with a few pension and insurance funds who are compelled by a government mandate to match duration of obligations, are buying the long end ten years and out.
Loopholes Lurk in Bank Bill USAA, GE and Others Gain Exceptions to Full Impact of Regulatory Overhaul Buried in a 239-page amendment to the U.S. House of Representatives' financial regulatory overhaul is a provision that appears to do just one thing: exempts financial-services company USAA from some of the bill's tougher provisions. The carve-out is one of a number of exceptions that allow companies to avoid fresh scrutiny envisioned by the White House, which is aiming to overhaul the nation's financial-regulatory apparatus. The beneficiaries run from corporations such as General Electric Co. and Pitney Bowes Inc. to USAA, which caters to members of the military and their families, to so-called fraternal benefit societies.
Bernanke Blamed, U.S. Economy Lost Revenues and Inflation /Deflation Fears Before hitting the "send" button on the hate email, let me tell you that Ben Bernanke is not an indispensable Fed chairman. I have no doubt that there are many people who could do a better job than he (but no one has called). Having said that, I was amused by some of the haranguing he was subjected to at his Senate confirmation hearing last week. Okay, now you can hit the "send" button. As I have written previously, Bernanke's hands are not clean with respect to the primary cause of the recent financial and economic crisis. As a Fed governor, he never formally dissented from a Greenspan-led majority FOMC decision. In fact, then Governor Bernanke was a public cheerleader for Greenspan's easy credit policies of the early 2000s.
Audit the Fed, Then Abolish It Count famed investor Jim Rogers as an ardent support of Congressman Ron Paul's effort to audit the Fed. The Fed is "the only institution in the world I know of that doesn't expect to be audited," Rogers says in the accompanying video. "It's incomprehensible to me these people are saying they have no reason to be audited -- they must have done something wrong, must have something to hide." A longtime critic of Ben Bernanke and his predecessor, Rogers goes a (big) step further than merely auditing the Fed, suggesting we get rid of the central bank altogether.
TARP Becomes Obama's Slush Fund The US Treasury auctions $21 billion 10-Year notes today, as the daily chart favors higher yields. Risk aversion should be strong enough to trump supply as long as the auction holds daily and weekly pivots at 3.415 and 3.446. If these supports hold, the yield should return to its 200-day simple moving average at 3.322. Tomorrow Treasury sells $13 billion in 30-Year bonds.
Tarp Extended Until October 2010: Geithner's Letter To Pelosi Can't say this was a surprise; TARP extension (and expansion) right up to the 2010 midterm elections. Of course, it's about recovery and not politics. ---------- The following is the full text of the letter on the Treasury’s TARP exit strategy sent by Secretary Tim Geithner to House Speaker Nancy Pelosi:
Dear Madam Speaker: I am writing to update you on the status of the Obama Administration’s financial policies, including programs initiated under the Troubled Asset Relief Program (TARP) established by the Emergency Economic Stabilization Act of 2008 (EESA), the results they have achieved, the challenges ahead, and our plan for exiting TARP. . .
Recycling Tarp Funds Is Illegal Skeptical Sherman: TARP $$ Paid Back Is NOT Geithner's Revolving Fund Should PAYOFF National Debt!!
U.S. in red for 14th straight month Treasury reports $120.3 billion November shortfall. That's better than October but steep revenue fall brings year-to-date total higher than recorded a year ago. The U.S. government rang up a deficit of $120.3 billion in November - the 14th straight month it has spent more than it has taken in. That's well below the $176 billion recorded for October and about $5 billion less than recorded in November of last year. But the November shortfall, reported Thursday by the Treasury Department, brings the total deficit for the first two months of fiscal year 2010 to $296.7 billion, or about $16 billion more than the deficit accrued in the same period a year ago, when the economy and financial markets were falling apart.
Bankers are now even less popular than members of Congress Politicians, lawyers and insurance salesmen now have some company in America's doghouse: A new survey finds that Wall Street bankers are among the country's least favorite people. This suggests that while financial firms may have begun to mend their bottom lines, they're a long way from rehabilitating their public image. Two out of every three Americans hold unfavorable views of financial executives, according to a survey commissioned by Bloomberg earlier this month. And 64% said bailing them out was a bad idea.
Treasury Yield Curve Steepest Since at Least 1980 After Auction Treasuries fell, with the gap in yields between 2- and 30-year securities reaching the widest margin since at least 1980, after a $13 billion offering of 30- year bonds drew lower-than-forecast demand. The so-called yield curve touched 373 basis points, the most in at least 29 years, as the bonds drew a yield of 4.52 percent, compared with an average forecast of 4.483 percent in a Bloomberg News survey of five of the Federal Reserve’s 18 primary dealers. The so-called yield curve has widened from 191 basis points at the end of 2008, with the Fed anchoring its target rate at a record-low range of zero to 0.25 percent and the Treasury extending the average maturity of U.S. debt.
Trade Deficit in U.S. Unexpectedly Narrows on Exports The trade deficit in the U.S. unexpectedly narrowed in October as rebounding economies overseas and a weaker dollar pushed exports up for a sixth consecutive month. The gap shrank 7.6 percent to $32.9 billion from a revised $35.7 billion in September, Commerce Department data showed today in Washington. Exports were up 2.6 percent, reaching the highest level since November 2008. A plunge in demand for petroleum checked the gain in imports.
Democrats to seek higher limit on the federal debt Measure to be in defense bill House Republicans vow to block Pelosi's plan With the national debt projected to soar by nearly $1.4 trillion this year, congressional Democrats are planning a year-end push to dramatically increase the legal debt limit so they don't have to revisit the politically uncomfortable issue before facing voters in November. House Speaker Nancy Pelosi (D-Calif.) said Thursday that she would include legislation to raise the debt ceiling in a must-pass defense spending bill headed to the House floor next week.
Obama, sovereign debt, senate race
Effort to Reform Finance Instead Turning into a Coup by Banksters I am not sure whether Potemkin reform is worse than no reform at all, except the latter makes it abundantly clear that America is in the hands of a corrupt plutocratic elite. The latest, from the Huffington Post, is that the normal flurry of last minute amendments to gut legislation has gone one step further, in the case of H.R. 4173: Wall Street Reform and Consumer Protection Act of 2009.
Bank-Friendly Dems Shut Down House Threaten To Kill Wall Street Reform A group of Democrats friendly to Wall Street interests forced a delay in consideration of the landmark financial regulatory reform bill scheduled to hit the House floor on Wednesday, Financial Services Committee Chairman Barney Frank (D-Mass.) told reporters in the Speaker's lobby. Frank accused the New Democrat Coalition of blocking the bill because its members are being prodded by big banks to abolish the Consumer Financial Protection Agency and to allow major financial institutions to avoid state laws tougher than federal regulations.
Soros Seeks $100 Billion in IMF Funds for Green Plan Billionaire George Soros asked the richest nations to use $100 billion of foreign-exchange reserves to finance emissions-reducing projects in poor countries. The reserves, from the International Monetary Fund, would go into a “green fund” to make investments in rain forests, agriculture and land use that will lower carbon-dioxide emissions, the financier said today at climate-treaty negotiations involving about 192 nations in Copenhagen.
Four More Years To Fall The exhaustive Freddie Mac price index fell 2% nationwide in the 3rd quarter and analysis of its data predicts prices will continue to fall for the next four years. While Freddie announced Tuesday that its purchase-only index has gained for the past two quarters, the “Classic Series” of the Conventional Mortgage Home Price Index, which includes refinance appraisals as well as purchase values, has fallen 9% from the high in June 2007 and 3.8% for this year. The projections say homeowners have lost only $1 for every $3 they can expect to lose by the end of the cycle.
U.S. Foreclosures to Reach Record 3.9 Million in 2009 Foreclosure filings in the U.S. will reach a record for the second consecutive year with 3.9 million notices sent to homeowners in default, RealtyTrac Inc. said. This year’s filings will surpass 2008’s total of 3.2 million as record unemployment and price erosion batter the housing market, the Irvine, California-based company said. “We are a long way from a recovery,” John Quigley, economics professor at the University of California, Berkeley, said in an interview. “You can’t start to see improvement in the housing market until after unemployment peaks.”
Foreclosure activity slides for fourth month, but trouble lies ahead The terrible trouble in the housing market may be ending. RealtyTrac reports that foreclosure filings fell 8% in November compared to the previous month, down to 306,627. One in every 417 homes in the U.S. received a foreclosure filing during the month. The figure was up 18% from November 2008. "November was the fourth straight month that U.S. foreclosure activity has declined after hitting an all-time high for our report in July, and November foreclosure activity was at the lowest level we've seen since February," said James J. Saccacio, chief executive officer of RealtyTrac. "Loan modifications and other foreclosure prevention efforts, along with the recently extended and expanded home-buyer tax credit, are keeping a lid on the most visible symptoms of the nation's ailing housing market -- foreclosures and home value depreciation."
Lenders Modify 31,382 of 4 Million U.S. Home Loans U.S. lenders permanently modified 31,382 of the 4 million mortgages targeted for loan relief under the Obama administration’s main foreclosure prevention plan through last month, the Treasury Department said today. GMAC Mortgage Inc. completed 7,111 payment plans, more than any other servicer, the Treasury said today in a report. GMAC was followed by JPMorgan Chase & Co., which completed 4,302 modifications, and Ocwen Financial Corp. with 4,252.
Senate Dems may change health care compromise Concerns from doctors and hospitals prompt Dems to search for changes to health care compromise Senate Democrats are considering changing a proposed expansion of Medicare to address complaints from doctors and hospitals and defray costs for consumers, officials said Thursday, two days after party leaders hailed it as part of a breakthrough for health care. Under the plan, uninsured individuals ages 55 to 64 could purchase coverage under Medicare. The expansion is part of a compromise for dropping a full-blown national government-run insurance plan from the legislation that Democrats and the White House hope to push through the Senate by Christmas.
Credit card banks have eight new ways to hit you with hidden fees It appears credit card issuers are determined to maintain the high levels of profit they earn from charging fees. A new report released by the Center for Responsible Lending on Thursday shows that they have created or expanded at least eight hidden charges to replace the income they anticipate losing as a result of newly enacted federal legislation and Federal Reserve rules intended to stop credit card abuses. For example, the report shows that credit card issuers have implemented a tactic it calls "pick-a-rate" -- and it's not the customer who gets to pick. Previously, consumers were charged an interest rate tied to what the prime rate was on last day of their 30-day billing cycle. Under the increasingly prevalent pick-a-rate system, the interest rate is based on the highest prime rate reported at any time during the previous 90-day period -- a practice that costs Americans $720 million a year and could grow to $2.5 billion annually as it spreads. Already, 117 million credit card accounts are being affected by this tactic.
Credit Card Abuses Won't Stop After Reform Takes Effect Next February, the credit card reforms signed into law by President Obama earlier this year will finally take effect. Goodbye arbitrary rate hikes. Hello inactivity fees! Credit card companies will have an easy time switching to new ways of assessing fees on their customers, according to a new report by the Center for Responsible Lending. The report documents several practices that the Credit CARD Act does not prohibit. According to CRL, it's just a matter of time before they proliferate. "When bad products are allowed to flourish, it becomes a race to the bottom as they crowd out good products," said CRL's Kathleen Day. And switching costs make it unlikely that bank customers will go to the trouble of uprooting their accounts for another bank.
Stores' Dilemma: To Deploy Discounts Now or Hold the Line Who will blink first: retailers or shoppers? Chain-stores are holding bigger markdowns in reserve trying to gauge how long shoppers will wait for better deals to emerge. The standoff, which experts say could be decided in favor of shoppers as soon as this weekend, could help determine whether or not this holiday season marks the second year in a row of sales declines.
Unions Pressure Democrats on Health Insurance Tax Union leaders, among the most passionate backers of President Barack Obama's health care overhaul, pressed Democratic senators Thursday to drop a tax on high-value insurance plans to pay for remaking the nation's system. As the Senate entered its 11th straight day of debate on the sweeping legislation, members of several labor unions denounced the proposed tax on so-called "Cadillac plans," arguing it wouldn't just hit CEOs but also middle-class Americans who passed on salary increases to negotiate better health benefits.
Jobs Still Trashing U.S. Recovery Party President Barack Obama held a jobs summit last week. It surely was a coincidence that unemployment figures released the day after showed the U.S. jobless rate fell in November. True, unemployment did decline in July too, but only to increase in August, September and October. My suspicion is that this time, unemployment is close to its peak, and this is the beginning of a long, but slow, improvement in the labor market.
Americans Want Government to Spend for Jobs, Send Bill to Rich Americans want their government to create jobs through spending on public works, investments in alternative energy or skills training for the jobless. They also want the deficit to come down. And most are ready to hand the bill to the wealthy. A Bloomberg National Poll conducted Dec. 3-7 shows two- thirds of Americans favor taxing the rich to reduce the deficit. Even though almost 9 of 10 respondents also say they believe the middle class will have to make financial sacrifices to achieve that goal, only a little more than one-fourth support an increase in taxes on the middle class. Fewer still back cuts in entitlement programs such as Social Security and Medicare or a new national consumption tax.
Emergency Jobless Insurance Claims Surge By Most Ever In Prior Week The number you won't hear mentioned anywhere in the Mainstream Media: 327,729. That is how many people shifted to Emergency Unemployment Compensation programs in the last week alone, hitting an all time record high of 4.2 million! So as everyone is focused on the benign picture of initial claims in the last week which was "only" 474,000, the number of people rolling off continuing benefits has exploded and is now a stunning 592,579 only in the last two week. Look for this number to keep going into the stratosphere as the 6 month continuing claims cliff keeps getting hit by more and more people who are unemployed and keep looking not only for believable change, but actual jobs to go with it.
Stiglitz Urges ‘Powell Doctrine’ to Fix Jobs Picture Nobel Prize-winning economist Joseph Stiglitz urged U.S. lawmakers to use “overwhelming force” to cut a 10 percent unemployment rate that is forecast to rise. Stiglitz, a professor at Columbia University in New York and a former White House adviser under President Bill Clinton, told the Joint Economic Committee that more government spending and tax cuts are needed to put Americans back to work.
Apple’s Next Media Frontier Will Be Streaming Video Video entertainment was “the one that got away” from Apple, but recent moves reveal the company is taking a second stab at the category, and that streaming video will play a major role. The addition of video cameras to Apple’s latest iPhone and iPod Nano were just the first hints of the company’s new personal-media strategy. The company is also building a 500,000 square-foot data center in North Carolina, which could provide the massive bandwidth required for ubiquitous streaming video. And Apple’s recent acquisition of Lala suggests it’s interested in rebooting iTunes into a streaming service, according to Wall Street Journal. That means music, in Lala’s case, but the same infrastructure could be shared with streaming video.
Fans vent anger as PR experts say Tiger Woods could be 'eaten alive' by scandal What started out as a forum for fan mail on Tiger Woods’s website has turned into an embarrassing tide of vitriol as a public relations expert warned that the backlash over the golfer’s sexual liaisons could eat him alive. The rumours have prompted questions over why Woods’s once-slick management team have allowed the scandal to get out of control, as his online promotional machine appeared to have ground to a halt.
Corruption is destroying the soul of US society, warns FBI agent John Gillies attacks crooked officials, financial fraudsters and philandering sports heroes One of the FBI's top agents warned yesterday that corruption in the US was increasing and tearing at the fabric of society. Special agent John Gillies, who has led major anti-corruption drives during his 27-year career with the bureau, focused his words primarily on crooked financiers and unscrupulous officials. However, he added that sporting heroes such as Tiger Woods were also to blame, letting down children who saw them as role models. The golfer is currently embroiled in scandal since his high-profile car crash on 27 November. "Money can't buy everything," Gillies said.
The Thin Blue Whine: Petulant Police Demand Impunity Violence "is unpredictable, chaotic and thoughtless" by its nature, observed Peter Taylor in a recent op-ed column published in The Oregonian. "It doesn't like to be confined and doesn't lend itself to cooperation.... It is saddening to see the effects of violence on its victims, those who witness it and, yes, also those who wield it against others." As the final clause in that sentence suggests, Taylor's point is not to sympathize with victims of "unpredictable, chaotic and thoughtless" violence, but rather to defend those who often employ it. Taylor is an officer with the Portland Police Bureau, and his column was intended to explain why he – along with several hundred others – took part in a protest march and rally outside Portland's City Hall in defense of Officer Chris Humphreys.
$10 an hour with 2 kids? IRS pounces Rachel Porcaro knows she's hardly rich. When you're a single mom making 10 bucks an hour, you don't need government experts to tell you how broke you are. Rachel Porcaro knows she's hardly rich. When you're a single mom making 10 bucks an hour, you don't need government experts to tell you how broke you are. But that's what happened. The government not only told Porcaro she was poor. They said she was too poor to make it in Seattle. It all started a year ago, when Porcaro, a 32-year-old mom with two boys, was summoned to the Seattle office of the Internal Revenue Service (IRS). She had been flagged for an audit.
I.M.F. Withholds Latest Loan Installment to Ukraine The International Monetary Fund has decided to withhold the latest installment of a $16.8 billion loan to Ukraine until after next month’s presidential election, reflecting its growing frustration over the inability of the country’s politicians to get the budget under control. The installment, $3.5 billion, would be the fourth since last year to be paid out to Ukraine, which is facing its worst economic crisis in nearly two decades. The I.M.F. had already disbursed almost $11 billion to the country by last July.
Black caucus turns up heat on Obama Recession prompts impatience Black lawmakers who have held their tongues during most of President Obama's first year in office are stepping up their demands that the nation's first black president do more for minority communities hit hardest by the recession. While still careful about criticizing Mr. Obama publicly, they appear to be losing patience after a year of watching him dedicate trillions of dollars to prop up banks and corporations and fight wars in Iraq and Afghanistan, while double-digit unemployment among blacks crept even higher.
Obama's remarkable tutorial in Oslo Nobody teaches harder lessons than Experience, the lady who grades on the steepest curve. But sometimes even her most difficult student looks like he's beginning to get it. Barack Obama flew yesterday into Scandinavia, the redoubt of Volvo-and-bean-sprout state liberalism, to tell his Nobel Peace Prize patrons that he had no apology to make for a just war and that he'll use the prestige of the honor to "reach for the world that ought to be."
Obama, Secessionist Movements and the Nobel Prize STOCKHOLM, December 10, 2009: Today, President Barack Obama accepted the Nobel Peace Prize in a ceremony in which his speech was like a long commercial message promoting continued war. Obama gestured politely toward advocates of non-violence like Albert Schweitzer, Dr. Martin Luther King and Gandhi, but clearly stated that his intention for America is to be the policeman for the globe. Here is an excerpt that should enlighten all Americans about what the President is thinking.
China unveils its new worldview Chinese President Hu Jintao has signaled his administration's readiness to play a bigger - and perhaps more constructive - role in global affairs through the release of a five-pronged foreign policy game plan. Cited by the official Outlook Weekly as "Hu Jintao's Viewpoints about the Times", this far-reaching initiative consists of five theories on, respectively, "the profound changes [in the world situation], constructing a harmonious world, joint development, shared responsibilities and enthusiastic participation [in global affairs]".
Obama calls for climate deal, U.S. target under fire U.S. President Barack Obama urged world leaders on Thursday to break the deadlock at climate change talks in Copenhagen, although many nations accused the United States of lacking ambition. In a move that could boost Obama's position when world leaders join the U.N. talks next week, three U.S. senators outlined a compromise climate bill on Thursday that aims to win the votes needed for passage next year.
Nations seek climate financing for poor countries Nations seek billions of dollars in climate financing for developing countries European nations pressed former East bloc neighbors Thursday to help create a multibillion-dollar fund for poor countries suffering the most from global warming, while key U.S. senators signaled progress on legislation in line with what President Barack Obama will pledge at the U.N. climate conference next week. The release of the legislative blueprint was timed to bolster the argument by U.S. delegates in Copenhagen that Washington is taking climate change seriously and that Congress is making progress -- albeit slowly -- on reducing heat-trapping greenhouse gases.
Thousands Flee Iran as Noose Tightens Sadegh Shojai fled Iran after government agents raided his Tehran apartment, seizing his computer and 700 copies of a book he published on staging revolutions. Now, he and his wife spend their days in this isolated Turkish town in a cramped, coal-heated apartment that lacks a proper toilet. But Mr. Shojai, 28 years old, continues to churn out articles on antigovernment Web sites about Iranian political prisoners, and helps to link students in Tehran with fellow students in Europe. "I feel very guilty that I have abandoned my friends and countrymen, so I make up for it by burying myself in activism here," he says.
Mike Church interviews Ron Paul Part 1
Mike Church interviews Ron Paul Part 2
Petraeus Says Afghan War Is Tougher Fight Than Iraq General David Petraeus, the top U.S. commander in the Middle East and Central Asia, struck a note of caution on the war in Afghanistan, saying making headway against the insurgency probably will take longer than in Iraq. “Achieving progress in Afghanistan will be hard and progress there likely will be slower in developing than was the progress in Iraq,” Petraeus told the Senate Foreign Relations Committee today. “Nonetheless, as with Iraq, in Afghanistan hard is not hopeless.”
NO RULE OF LAW left in South Africa - podcast Mugabe's campaign of rape in Zimbabwe
Obama Reaffirms Commitment to Begin Afghan Withdrawal in 2011 President Barack Obama said he’s “unambiguous” about starting to withdraw U.S. combat troops from Afghanistan in July 2011, saying the date “will signal a shift in our mission” to a support role for Afghan security forces. “It’s very important to understand that we’re not going to see some sharp cliff, some precipitous drawdown,” Obama said at a joint news conference with Norwegian Prime Minister Jens Stoltenberg in Oslo. “The pace at which that takes place, the slope of a drawdown, how it occurs tactically, those are all going to be conditions-based.”
Obama Defends 'Just War' at Oslo President Barack Obama accepted the Nobel Peace Prize Thursday with an embrace of armed might in the service of a "just war," a sharp change in emphasis from his past rhetoric criticizing the foreign policy of the Bush years. The address set a new tone for his young administration, which been accused by foreign-policy hawks of being too accommodating to overseas powers and too quick to seek favor abroad.
China Curbs Property Speculators, Boosts Consumption China scrapped a tax break on property sales and extended subsidies for auto and home appliance purchases, seeking to cool speculation while sustaining a recovery in the world’s third-largest economy. The State Council will re-impose a sales tax on homes sold within five years after cutting the period to two years in January, the cabinet said in a statement yesterday. The government will scale back some tax breaks for car buyers, while continuing to fund vehicle purchases in rural areas.
China Syndrome: The Unbalanced Bicycle of Growth In 1971, Ralph Lapp, a nuclear physicist, used the term "China Syndrome" to describe a hypothetical nuclear reactor meltdown where the molten core breaches containment barriers and melts through the crust of the Earth, reaching China. The economic equivalent of the China Syndrome describes a process where China’s strong growth, abundant savings, and foreign?exchange?reserves assists a rapid restoration of global growth.
China Syndrome: Supercharging the Recovery In 2007, unsustainable levels of debt in many economies triggered a near collapse of the global banking?system that, in turn, triggered a major slowdown in growth. The unprecedented external demand shock, with sharp decreases in consumption and investment from synchronous deep recessions in the developed world, affected the Chinese?economy. The sudden and precipitous fall in exports led to a significant slowdown in China’s stellar growth rates in 2008, triggering sharp declines in stock and property markets.
China Syndrome: A Future That Was? China’s economic?model is reminiscent of seventeenth-century mercantilist policies. Thomas Mun, a Director of the East India Company, in England's Treasure by Foreign Trade (1664), wrote that the purpose of trade was to export more than you imported. At the same time, a country should amass foreign "treasure" that would be the basis of acquiring foreign colonies to allow control of essential natural resources. The strategy required reducing domestic consumption and imports and export of goods manufactured with imported foreign raw materials. China’s strategy coincides almost entirely with Mun’s views.
New underground economy Key indicator: Avoidance of bank accounts The underground or "black" economy is rapidly rising, and the fault is mainly due to government policies. Here is the evidence. The Federal Deposit Insurance Corp. (FDIC) released a report last week concluding that 7.7 percent of U.S. households, containing at least 17 million adults, are unbanked (i.e. those who do not have bank accounts), and an "estimated 17.9 percent of U.S. households, roughly 21 million, are underbanked" (i.e., those who rely heavily on nonbank institutions, such as check cashing and money transmitting services). As an economy becomes richer and incomes rise, the normal expectation is that the proportion of the unbanked population falls and does not rise as is now happening in the United States.
American Dream 2: Default, Then Rent Schoolteacher Shana Richey misses the playroom she decorated with Glamour Girl decals for her daughters. Fireman Jay Fernandez misses the custom putting green he installed in his backyard. But ever since they quit paying their mortgages and walked away from their homes, they've discovered that giving up on the American dream has its benefits. Both now live on the 3100 block of Club Rancho Drive in Palmdale, where a terrible housing market lets them rent luxurious homes -- one with a pool for the kids, the other with a golf-course view -- for a fraction of their former monthly payments.
Recent World Events Indicate Impending Market Chaos For the past couple years we have been covering every nuance of the economic collapse and in almost every instance we have come to the conclusion that 2010 would be the year that the U.S. would see an incredible downturn, possibly resulting in the inflationary disintegration of the Dollar, and a major stock market revolt which would destroy any remaining illusion Americans still have that a recovery is in progress:
A desperate thing to say He really said it. The nation must "continue to spend our way out of this recession". Obama presumably thinks such a thing is possible. And that in turn would seem to indicate that in his view it's been done before. But has any nation (note: what he means is "government") ever successfully spent its way out of a recession? At the very least any positive answer to that question would come dressed in question marks. For one thing, it’s much easier to see how a nation can spend its way into a recession than out of one.
Banking System "a Long Way from Healthy," Ken Rogoff Says The Obama Administration is going to extend the TARP program into 2010, Treasury Secretary Tim Geithner told Congress Wednesday. But the focus is going to be on aiding consumers vs. financial institutions, amid a sense the banking system is back on its feet after its near-death experience in 2008. "We didn't have a [second] Great Depression, we could have. You have to give them a lot of points for averting that," says Harvard professor Kenneth Rogoff, co-author of This Time Is Different. But that doesn't mean the danger is over.
History is Always Written with a Golden Pen THE DIFFICULTIES IN SEEING INTO THE IMMEDIATE FUTURE Any extrapolation from today's circumstances in an attempt to see into the immediate future (let's say 2010) is hamstrung for a number of reasons. These include:
There is probably quite a bit happening behind the scenes that is hidden from us. Anyone who doubts this merely has to recall the story last month of how the Bank of England revealed that it had extended secret emergency financing exceeding $100 billion to Royal Bank of Scotland and to what was then HBOS during the banking panic in October 2008.
The next problem is that "bombs" keep going off. How many more Dubai's are out there waiting to explode? How long before Ireland and Greece crumble?
Then there are the ongoing attempts by Chairman Bernanke to withhold information about who the recipients are of almost $2 trillion of emergency loans. Is this non-disclosure protecting the confidence in the system, is it protecting the recipient banks from a proper valuation of their share price or is it now protecting Chairman Bernanke from the wrath of the people and any decent congressmen?
Gold heads for strong year-end rally: Credit Suisse A prominent analyst says that gold prices will resume their ascent after a "reality check" period, Reuters reports. The yellow metal has been surging in the past six weeks and reached a record $1,227 per ounce before dropping back to current levels at roughly $1,145 per ounce. Tom Kendall, a precious metals strategist at Mitsubishi, explained that while there is still the possibility of a further sell-off, the longer-term trend still appears to be positive.
Gold futures bounce back after four-session drop Sovereign debt concerns lure investors back to gold, analyst says Gold futures bounced back Thursday, as concerns over sovereign debt rekindled investors' interest in the precious metal, which tacked on more than $13 in morning trading in Asia after suffering a four-session drop of around 8%. Gold for December delivery rose to a high of $1,134 an ounce on Globex, up $13.60, or 1.2%. Standard & Poor's cut Spain's credit outlook on Wednesday to negative from stable. S&P had put Greece on negative watch on Monday.
Gold Climbs, Paring Weekly Loss, as Dollar Retreat Fuels Demand Gold advanced, trimming this week’s loss, as a retreat in the U.S. dollar revived investor appetite for the precious metal as an alternative asset. Asian stocks may climb, tracking an overnight gain in their U.S. counterparts, as signs of an economic recovery helped ease concern some euro-region countries may struggle to meet debt commitments. The Dollar Index, a six-currency gauge of the dollar’s value, slipped 0.5 percent yesterday.
Gold will continue to push higher: Citigroup A senior figure at MKS Finance says that bargain-hunters could look to make a Gold Investment after the price drops of the past few days. The yellow metal's seemingly unstoppable rise was halted at the end of last week on positive US jobs data and has struggled to recover the momentum it held previously. However, Bernard Sin, head of currency and metals trading at the Geneva-based bullion refiner, explained that Gold Buying will occur on such lulls as the longer-term trend is positive.
Gold Gains in London as Weak Dollar, Four-Day Drop Lure Buyers Gold rose in London as prospects for a weaker dollar drew some investors to the metal after its longest losing streak since August. Bullion futures fell in New York. The U.S. Dollar Index, a gauge of the greenback’s strength against six major currencies, slid as much as 0.6 percent. Bullion fell in London for a fourth day yesterday, touching a three-week low, as the dollar gained and the Bank of Korea described the metal as an “illusion.” The bank said it was unlikely to buy more. Gold usually falls when the dollar climbs.
'Gold is a safe-haven area amid financial chaos' If you go through a period of hyperinflation, the worst thing you can own is cash because it becomes worthless. You want to own assets that will protect you against inflation. Gold is one of the simplest things that we all talk about as protecting against inflation. But interestingly enough, if you go back to Weimar Republic, Germany and if you look at the Zimbabwe Stock Exchange a few years ago, the stock exchanges actually acted as an inflation hedge. That's because many of the companies on the exchanges actually pushed through price increases on their end products.
Has the Gold Correction Ended? Gold has had a sharp sell-off that took it down over $100 in four trading days from December 3rd to the 8th. The rally that began in early October took spot gold up $200 from the breakout point of $1025 to a high of $1226. Approximately 50% of that was lost by the afternoon of December 8th in New York Globex trading. The $1125 level was tested again the next evening at 2AM New York time in Hong Kong trading. A 50% drop is a key Fibonacci retracement for rallies and a common place where counter moves stop. The next Fibonacci support level would be around $1100 for spot gold if the $1125 level doesn't hold.
Gold: Stabilization Points to a Buying Opportunity Watching the hysterical people on CNBC talk about gold, you would think it's back to $500. But it's not. Gold made new highs in the $1,227 zone and then corrected about $100 in about a week. It's at $1,130 or so as of Wednesday. Not so bad when you consider it was trading in the $900s in September (when none of the CNBC commentators liked it). This correction is small potatoes compared with the reaction in 2008 off the $1,000 high, which took gold back down into the low $700s.
Gold powers commodities boom Matthew McCall, author of the book, The Next Great Bull Market, says commodities are the best investment assets these days and gold is powering the bull market for commodities. Saying that the current gold boom is thanks to hyperinflation, McCall said that gold prices might cross $1,500 per ounce in the next two years. In an interview to HardAssetsInvestor.com, Matthew McCall said that Exchange Traded Funds (ETFs) are the most sought-after investment assets these days.
Gold, a lover of tragedies? Good news is bad news for gold! That is the situation in bullion markets across the globe now. When the bad news of Dubai World wanting to defer its debt payments, the gold prices soared to new heights. When dollar weakens, gold scales new peaks. But, when you get some good news that US job data showing a decline in unemployed’s number, the gold prices will nosedive. In fact, the yellow metal is allergic to good news which will help recover global economies. Means, gold prices are rising only because people are scared of the future of global economies. They are worried about the credibility of dollar.
Gold rises 1pc Gold rose over 1 per cent in Europe on Wednesday, recovering from the three-week lows it hit in the previous session, as the dollar weakened against the euro on concern selling of the single currency had been overdone.
Hedge funds stifling gold market: Jim Sinclair In my opinion there are two reasons why gold will, without any reservation, trade at $1650 after which it will seek both Alf and Martin’s price objectives. For those with ears to hear it was outlined this morning in an interview with the top man of Starwood Real Estate on, of all places, F-TV. The first reason is that we do in fact we have a 90s type Resolution Trust, but it carries another name. This time the Resolution Trust is the Federal Deposit Insurance Corporation. When you examine the mode of operation and consider what they will be required to do over the next two years and on into the future at an increasing rate, there is no question this is correct.
Gold edges up, futures remains lower Gold edged higher in Asian trade Wednesday, rose from three week lows, mainly after dollar eased against major currencies. Spot gold was seen trading at $1134.42 an ounce at 11.30 a.m Singapore time compared with New York's notional close of $1,129.30.
Comex Gold Closes Near 1-Month Low Gold fell sharply late in Wednesday's session as hedge funds sold to exit positions and capture profits ahead of the year-end, perhaps prodded by the dollar showing some stability lately. February gold fell $22.50 to $1,120.90 an ounce on the Comex division of the New York Mercantile Exchange. It closed lower for the fourth straight day, near a one-month low. March silver fell 62.7 cents to $17.18. "We're entering that time where you have end-of-year position squaring by hedge funds," said Michael Gross, broker and futures analyst with OptionSellers.com. "They have been heavily long in the gold and silver markets. But the recent strength in the dollar--even though it's not up today--has been enough to trigger end-of-year profit-taking."
Spot Gold Price Prediction . . . . Gold may not find much support from now until the end of the year as traders may be hesitant to take further long positions in the commodity with the year end fast approaching. We could see the price of gold trading sideways between the prices of $1180 and $1120 with a significant support line at $1135. However, after the start of the New Year a resurgence in gold buying could commence.
Gold's enemies multiplying Nouriel Roubini has joined the gold naysayers, but Alec Hogg reckons he'd better beware. There's nothing like kicking a golden dog when it's down. Just as the metal's recent surge runs out of steam - temporarily perhaps - new voices are being added to the recently silenced crowd which never misses an opportunity of dissing the "barbarous relic". Among the e-mails being circulated by the anti-gold lobby is an interview in late October by Nouriel Roubini, or Dr Doom as he prefers to be called, who told Yahoo Finance you'll never find him among bullion's supporters.
ETF Securities increases gold, platinum holdings The euro is under pressure following Greece’s downgrade. Precious metal prices are down, but still higher than the last time the dollar was at $1.4700 against the euro (at the beginning of November). At that time, the gold price was around a $1,050. Platinum was trading at $1,320 and palladium at $320. Although economic conditions have changed enough to justify higher precious metals prices, metals could fall more. The recent movements in major currencies are because of euro weakness rather than dollar strength. This is evidenced by the euro’s exchange rate with other currencies as well as the reaction of many EM currencies against the dollar.
Southern Europe on the Skids: Good for Gold, Good for the Dollar The prospective collapse of sovereign borrowers is deflationary. Nothing, in fact, is more deflationary. You can’t pump more air into the balloon if the balloon starts to leak. A Fitch table of “implied credit ratings” for sovereign borrowers published yesterday in the FT’s Alphaville blog is worth a second and third look: Trouble starts in the 80 bps range: Italy, Spain, and then of course the prospective basket cases of Greece and Ireland. That creates an interest problem for diversification out of the dollar: in the debt of which country do you put your money if you happen to be an Asian central bank?
Silver to hog limelight in winter Silver is considered as gold’s poorer cousin and usually lags the performance of gold in times when speculators are focusing on gold as a monetary commodity. The silver/gold ratio has been in an intermediate uptrend since last October. However, the focus of gold as a monetary commodity briefly reversed this trend in September and October. The ratio bottomed at the beginning of November and is showing early technical signs of resuming its upward intermediate trend.
Money printing a boon to commodities: Rogers Investors in oil, metals and grains shouldn't worry too much about selloffs in these markets as the vast sums of money being printed around the world will take prices higher, commodities bull Jim Rogers said. "If the world economy gets better, commodities are very good place to be in," Rogers told the Reuters Investment Summit in New York on Wednesday. "Even if the world economy does not improve, commodities are still a fabulous place to be because every government is printing money now. Throughout history, when countries printed money, commodity prices rose," Rogers said.
Aristophanes on Inflation It used to be that every economist worth his salt knew Gresham's Law (or, if he was Polish, Copernicus's Law): "bad money drives out good." Narrowly understood, this rule says that when the government requires people to accept different forms of money at an exchange rate fixed by law, the form of money that is overvalued (the "bad money") will circulate, while the form of money that is undervalued (the "good money") won't.
U.S. Dollar Rises as Traders Seek Safety Against Risk The stronger Dollar led stock market investors to pare positions as traders become more averse to risk. U.S. equity markets closed sharply lower following a sell-off which began in Asia and Europe overnight and spread to the U.S. throughout the day. Traders are trying to protect profits at the end of the year as chart patterns suggest there is more downside than upside potential at current levels. Traders are reacting to global debt concerns a lot faster than they did in 2008. This is leading to the excessive volatility.
The dollar’s fall reflects a new role for reserves I am often asked whether the ongoing decline of the dollar implies that it can no longer serve as a reserve currency. My short answer is that most countries no longer hold dollars and other currencies as traditional reserves. The role of foreign exchange balances has changed from being short-term funds used to bridge export-import gaps to being long-term investment funds. In this new world, the dollar has shifted from being almost the sole “reserve currency” of many countries to being the primary “investment currency”, a role that it will continue to play far into the future.
Beware the Hin-DEBT-burg A blinding affliction can be seen with the gold bugs. Make reference to a strong dollar and falling gold, and you must be a supporter of the central banks, as well as the powerful families with cross-border tentacles that stand behind them. In our case, nothing could be further from the truth. We must put politics and other biases aside if we are to understand the big picture, in order to avoid, and not be ruined by, what’s around the corner.
Sovereign Debt Defaults Likely Over Next Several Years, Says Rogoff Global markets tumbled overnight amid fresh concerns about the global economy, and more specifically, the prospect of sovereign debt defaults. Standard & Poor’s lowered its outlook for Spain's debt grade as the country's finances worsened. A day earlier, Fitch cut Greece's long-term debt to BBB+ from A minus, marking the first time in a decade the country has seen its rating pushed below an A grade.
Congress impatient with mortgage plan Only one in three homeowners who have signed up for the Obama administration's mortgage relief plan have sent back the necessary paperwork, highlighting continuing problems for the government's effort to stem the foreclosure crisis. The poor results from the mortgage industry drew sharp criticism from House Financial Services Committee members Tuesday. Since the program was launched in March, lenders have made loan modification offers to just 680,000 borrowers, far short of the administration's goal of up to 4 million.
Leading Senators call for fiscal commission The idea - presenting tough budget-balancing measures to Congress for vote by the end of 2010 - has some bipartisan support, but whether it can pass is another matter. The push to address the United States' long-term fiscal problems -- and to remove the debate from the partisanship in Congress -- took a step forward Wednesday. Senate Budget Committee Chairman Kent Conrad, D-N.D., and the committee's top Republican, Sen. Judd Gregg, R-N.H., introduced legislation that would create a bipartisan task force charged with making recommendations to Congress for reining in runaway spending growth that threatens to overwhelm the federal budget.
House votes to extend $31B in expiring tax breaks House votes to extend $31 billion in tax breaks; taps Wall Street to finance them The House voted Wednesday to extend $31 billion in popular tax breaks, including an income tax deduction for sales and property taxes, to be financed with a tax increase on investment fund managers and a crackdown on international tax cheats. The 45 tax deductions and credits for businesses and individuals are scheduled to expire at year's end. The House voted 241-181 to extend them for a year, with only two Republicans voting in favor. The bill now goes to the Senate, which has rejected the tax increase on investment managers in the past.
Congress Readies Huge Year-End Spending Bill Congressional negotiators sealed agreement Tuesday night on sweeping spending legislation that boosts housing and heating subsidies but curbs President Barack Obama's requests for aid to Afghanistan and Pakistan. The move comes as lawmakers wrapped the budgets of nine Cabinet agencies into a $1.1 trillion spending bill they hope to complete before a stopgap measure expires Dec. 18.
The Banks Must Be Restrained The Financial System Must Be Reformed There has been a loss of perspective with regard to the financial sector led by the Anglo-American banking interests. This will have to change before there can be a sustainable economic recovery. This will be difficult to accomplish, because there exists a fusion of corporate and government desires to control the distribution of wealth and power that is opposed to any significant reforms.
Failed bank deviated from business plan The toxic brew that has claimed so many other small lenders in Georgia felled American Southern Bank last April, according to a federal government report issued Wednesday. But in the case of the failed Kennesaw bank, it strayed from its business plan of lending to small businesses and consumers, and instead gorged on real estate development loans, falling victim to the dramatic collapse of the real estate market.
Feds target rating agencies' role in meltdown Fed enforcement officials 'looking closely' at credit rating agencies' role in meltdown Enforcement officials from the Securities and Exchange Commission and Justice Department said Wednesday that their staffs are targeting the role of Wall Street rating agencies in the financial meltdown. The three dominant agencies -- Moody's Investors Service, Standard & Poor's and Fitch Ratings -- have been widely criticized for failing to give investors adequate warning of the risks in subprime mortgage securities, whose collapse touched off the financial crisis.
Geithner: White House will extend bailout until next Oct. Treasury secretary pledges to withhold $150B to reduce nation's debt projections Treasury Secretary Timothy F. Geithner told lawmakers Wednesday that the Obama administration will extend the government's $700 billion financial bailout package until next October, and he pledged to withhold $150 billion of the funds to reduce the nation's massive debt projections. In a letter to the Democratic leaders of the House and Senate, Geithner said the extension of the Troubled Assets Relief Program was necessary to assure financial markets that the government enough resources to address an unforeseen crisis and to aid American families and businesses that are still struggling in the slumping economy.
Tishman, NY Fed in talks on Chicago loans Real estate private equity firm Tishman Speyer Properties said it was in discussions with the Federal Reserve Bank of New York and other lenders to restructure loans on a portfolio of downtown Chicago office towers. Tishman was not in default on the Chicago debt, said company spokesperson Rick Matthews. "During the course of these discussions, the lenders have delayed funding certain capital expenditures that already had been approved and that were required under the loan agreement," the company said in a statement.
Government Socialist Intervention and the Distortion of Capital In all times, but more especially of late years, attempts have been made to extend wealth by the extension of credit. I believe it is no exaggeration to say, that since the revolution of February, the Parisian presses have issued more than 10,000 pamphlets, crying up this solution of the social problem. The only basis, alas, of this solution, is an optical delusion — if, indeed, an optical delusion can be called a basis at all. The first thing done is to confuse cash with produce, then paper money with cash; and from these two confusions it is pretended that a reality can be drawn.
Wells Fargo Prudential Debt May Hamper TARP Repayment Wells Fargo & Co.’s efforts to repay U.S. bailout funds may be hindered by a $5 billion debt owed to Prudential Financial Inc. that could drain the bank’s cash or dilute current shareholders. Wells Fargo, recipient of $25 billion in U.S. aid, must pay Prudential for a 23 percent stake in the San Francisco-based bank’s securities brokerage unit, Wells Fargo Advisors. While the stake may be bought for cash or stock around Jan. 1, according to a Prudential third-quarter filing, most analysts said Wells Fargo will use shares.
Ron Paul’s Fed-Bashing Wins Over Lawmakers Wary of Bank’s Power For U.S. Representative Ron Paul, the ninth time may be the charm. After fighting for decades to increase scrutiny of the Federal Reserve or abolish it, the Texas Republican’s proposal requiring audits of the central bank’s interest-rate decisions is getting traction. The long-shot 2008 presidential candidate whose anti-tax, anti-government politics struck a chord with a swath of voters is again channeling public frustration with big government, bailouts and rising federal debt. And as Paul trains his sights on his favorite villain, the Fed, many in Congress are listening.
***** Don't miss these 3 videos *****
1 Tragedy - Lindsey Williams
2 Hope - Lindsey Williams
3 Reality - Lindsey Williams
Climate, Oil, Reality and Delusion Against a greater welter and flow of incoherence jerking the nation this way and that way en route to collapse comes "ClimateGate," the latest excuse for screaming knuckleheads to defend what has already been lost. It is also yet another distraction from the emergency agenda that the United States faces - namely the urgent re-scaling, re-localizing, and de-globalizing of our daily activities.
Oil below $71 amid signs of weak US demand Oil hangs below $71 in Asia as investors eye evidence that US crude demand remains weak Oil prices hung below $71 a barrel Thursday in Asia amid growing investor concern that U.S. crude demand isn't improving. Benchmark crude for January delivery was up 10 cents to $70.77 at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract dropped $1.95 to settle at $70.67 on Wednesday.
Volkswagen buys a piece of Suzuki, eyes world's largest automaker crown Volkswagen AG is on its way to becoming the world's largest automaker. On Wednesday, the maker of the popular Beetle and Jetta models agreed to purchase a 20 percent stake in Suzuki Motor Corp. for $2.5 billion, which will help it gain a foothold in emerging markets like China and India. If the vehicles produced by Suzuki are counted, third-place Volkswagen would be in a neck-and-neck race with first place Toyota Motor Corp. (TM), Edmunds.com senior analyst Michelle Krebs tells DailyFinance. General Motors Corp. (GRM) is currently in second place.
Wholesale inventories, mortgage demand rise U.S. wholesalers started restocking in October for the first time in more than a year, suggesting the economy could get a lift as a long-running effort by businesses to pare inventories reaches an end. The Commerce Department said on Wednesday that total wholesale inventories rose 0.3 percent, snapping a 13-month declining trend. They had fallen 0.8 percent in September. Economists had expected stocks of unsold goods to drop 0.5 percent and the surprise building of inventories prompted some to raise forecasts for fourth quarter U.S. economic growth.
Pimco Buys Abu Dhabi, Qatar Bonds After Dubai Shock Pacific Investment Management Co., which runs the world’s biggest bond fund, is buying the debt of Abu Dhabi, Qatar and Ras Laffan Liquefied Natural Gas Co., said Michael Gomez, co-head of emerging markets at the fund manager. The bonds fell after Dubai World, the state-run holding company, sought to delay payment on some of its debt, Gomez said. Dubai’s announcement on Nov. 25 spurred an increase in the cost of insuring government and company debt from default around the world. RasGas, a venture between state-run Qatar Petroleum and Exxon Mobil Corp., is one of Qatar’s two producers of gas.
Greece and Dubai fears weigh on markets Weak Japanese economic data combined with continued concerns about debt-laden Greece and Dubai to keep global bourses in cautious mood on Wednesday. Not even a small pull back in the dollar, following Tuesday’s rally, could fully salve investors’ anxiety – though it did help gold reverse some of its recent slide. The Athens stock market fell another 3.4 per cent and Greek government bonds tumbled as traders’ fears about the country’s fiscal position persisted following Fitch’s downgrade of Greece’s sovereign debt on Tuesday.
Mexico Has Hedged Oil for 2010 at $57 a Barrel Mexico spent $1.172 billion to buy oil hedges for 2010, covering a possible revenue shortfall if production falls for the sixth straight year and prices don’t recover from about a five-year low. Mexico purchased put options that give it the option, not the obligation, to sell its oil for $57 a barrel next year, the Finance Ministry said in an e-mail statement today. “We want this as an insurance policy,” Finance Minister Agustin Carstens said in New York today. “If we don’t collect any resources from this transaction it’s OK because that means oil would have been above $57 a barrel.”
For Some Ages 55 to 64, Medicare Will Cost Too Much Millions more Americans could get access to Medicare under the latest health proposal by Senate Democrats. But the program may not be cheap enough to entice some of them to sign up. The proposal is part of a compromise unveiled Tuesday night that jettisons a broader public health-insurance plan from the Senate's overhaul. Democrats also agreed to create a national nonprofit plan run by the same entity that administers benefits to federal employees. Under the Medicare plan, consumers ages 55 to 64 would for the first time be allowed to buy into the federal program for the elderly, starting as soon as 2011. Congressional aides estimate that two million to three million people would participate.
Hiring expected to remain weak Few employers plan to ramp up hiring early next year, two surveys show -- evidence that the economic recovery isn't likely to create many jobs anytime soon. That will mean fierce competition for job openings that do exist. Nearly 6.3 unemployed workers, on average, are vying for each opening, government figures released Tuesday show. When the recession began, only 1.7 jobless workers were competing for each opening.
Holiday jobs highlight underemployment crisis First the good news: According to the U..S Department of Labor Statistics, the November jobless rate fell to 10%, a 0.2% improvement over October, when unemployment hit its highest level since 1983. Better yet, according to the Kronos Retail Labor Index, 3.87% percent of job applications currently lead to a hiring. This is the highest percentage in over a year. The trouble is, those numbers translate into an economy in which 1 in 10 people is still out of work and 96.13% of job applications end up in the trash. What's more, even the healthy economic bounce that Kronos is reporting is likely the result of the roughly 600,000 seasonal jobs that The Wall Street Journal has predicted for this year. The retail sector has shed 850,000 jobs since 2007, which means that this temporary jump still represents a net loss of a quarter million paychecks.
Economist John Williams (shadowstats) debunks improving unemployment and GDP numbers 8-8-09
Obama lays out strategy for jobs Cutting taxes and limiting credit are among president's ideas President Obama outlined a response to the nation's intensifying job crisis Tuesday that encourages businesses to hire new workers by easing the flow of credit and implementing a series of tax cuts, but leaves important details -- including the cost of the plan -- to be hashed out by Congress. Obama's job-creation ideas build largely on elements of the $787 billion economic stimulus package passed this year, including tax cuts for small businesses, incentives to hire new workers and a fresh round of infrastructure spending.
Senate Democrats reach compromise on US healthcare plan Tentative plan leaves public healthcare option, which was touted by liberals, effectively abandoned The chances of President Barack Obama securing his healthcare bill soared today after Senate Democrats achieved a breakthrough at the end of days of tortuous negotiations. But the compromise, the most significant move since the bill was first introduced earlier this year, came at a price for liberals, with the effective abandonment of their cherished government-run insurance scheme.
US buyers want simple foods from supermarkets Recession may ease by 2010 but that may not change the grocery shopping habits in USA that has become a habit with consumers in a recessionary phase. Consumers will continue to seek simple foods they can prepare at home and that don't compromise on quality.This is the new reality in US grocery shopping, according Phil Lempert, the Supermarket Guru which works closely with ConAgra Foods and its retailers to analyse trends in industry.
Citizens of 12 countries singled out at US airports, document shows Leaked document shows passengers from countries including Cuba and Iran face additional screenings Citizens of 12 countries around the world, including Cuba, Iran and Syria, are automatically subjected to extra screening at US airports unless they have been specifically cleared, according to a leaked document from the Homeland Security department. The disclosure is part of an embarrassing array of information to have reached the public after guidelines issued to security officers at airports were posted online. The breach has led to five transport officials from the Transportation Security Administration which posted the document being suspended from duties while an investigation is carried out.
U.S., China clash over emission cut commitments The United States and China exchanged barbs Wednesday at the Copenhagen climate talks, underscoring the abiding suspicion between the world's two largest carbon polluters about the sincerity of their pledges to control emissions. U.S. chief negotiator Todd Stern urged China to "stand behind" its promise to slow the growth of the country's carbon output and make the declaration part of an international climate change agreement.
Thousands in Jerusalem protest settlement freeze Thousands of Jewish West Bank settlers and their supporters demonstrated near the official residence of Prime Minister Benjamin Netanyahu in Jerusalem on Wednesday to protest his 10-month building freeze. The demonstration, which generally went off without incident, was the first major gathering in several years of settlers to protest an Israeli government's actions to suspend settlement activity in the occupied West Bank. The main slogan "Break the Freeze" was one of many visible among the demonstrators who stood on the streets of a central neighborhood in Jewish west Jerusalem.
Recession Elsewhere, but It’s Booming in China For the first time, Chinese will buy more cars this year than Americans. Demand is so high that drivers put their names on long waiting lists for the most popular models. “I’m disappointed, but what can I do?” asked Zhang Ge Lu, a 28-year-old interior designer. He came recently with two friends to a row of dealerships here in southeastern China to buy a black Toyota RAV4, only to be told that he would have to wait two months for delivery. And it is not just cars. For more and more consumer goods, China is surpassing the United States as the world’s biggest market — from cars to refrigerators to washing machines, even desktop computers.
Colombia faces border tensions with Venezuela Colombia has been building up forces along its eastern border with Venezuela following weeks of provocations by Venezuelan President Hugo Chavez, who has threatened war against Colombia for a recent agreement that allows U.S. troops to use Colombia's main military bases. A new army division of 15,000 men has been formed to protect the 94,000-square-mile frontier region, according to a communique released by Colombia's defense ministry late last month.
***** Globalists' analysis of financial crisis *****
Soros Channel A Conversation with George Soros, Nouriel Roubini and Jeffrey Sachs CNN Earth Institute Part 1 of 10
Soros Channel A Conversation with George Soros, Nouriel Roubini and Jeffrey Sachs CNN Earth Institute Part 2 of 10
Soros Channel A Conversation with George Soros, Nouriel Roubini and Jeffrey Sachs CNN Earth Institute Part 3 of 10
Soros Channel A Conversation with George Soros, Nouriel Roubini and Jeffrey Sachs CNN Earth Institute Part 4 of 10
Soros Channel A Conversation with George Soros, Nouriel Roubini and Jeffrey Sachs CNN Earth Institute Part 5 of 10
Soros Channel A Conversation with George Soros, Nouriel Roubini and Jeffrey Sachs CNN Earth Institute Part 6 of 10
Soros Channel A Conversation with George Soros, Nouriel Roubini and Jeffrey Sachs CNN Earth Institute Part 7 of 10
Soros Channel A Conversation with George Soros, Nouriel Roubini and Jeffrey Sachs CNN Earth Institute Part 8 of 10
Soros Channel A Conversation with George Soros, Nouriel Roubini and Jeffrey Sachs CNN Earth Institute Part 9 of 10
Soros Channel A Conversation with George Soros, Nouriel Roubini and Jeffrey Sachs CNN Earth Institute Part 10 of 10
They Were Making It Up as They Went Along - And Still Are "Mr Kashkari admitted that he plucked “a number out of the air” when deciding with Mr Paulson how much funding to request from Congress for the Tarp." A telling memoir of the financial crisis by neo-mountain man Neel Kashkari, soon to be maven of what he hath wrought at bond insiders firm Pimco. Where did the $700 Billion Paulson Plan come from? Neel simply made it up. They not only did not know then, as should have been painfully obvious to anyone who looked at the ten page request for $700 billion or else, but they also do not know now. When you do not have the facts to support your case, employ fear, uncertainty and doubt (aka FUD factor).
Boomer stat rekindles "meltdown" debate for 2010 As soothsayers and strategists gaze into 2010, one statistic on the retiring baby-boom generation makes anxious reading for stock market bulls. The share of the U.S. population aged between 40 and 65, when people typically prepare for retirement by building their biggest pile of financial assets, peaks in 2010 and this ratio has shown an uncanny link with real equity prices for 40 years. In snapshot, 78 million Americans were born between 1946 and 1964 and by the mid-1980s earned half of U.S. personal income.
Recovery begins, but corporate America wary he U.S. economy is recovering from its worst downturn since the Great Depression, but corporate America remains far from confident about its prospects for next year. Two major U.S. industry groups reported data on Tuesday showing that companies expect revenue to start to rise again next year after a brutal 2009, though top officials at two blue-chip companies offered guarded 2010 forecasts. In a sign that average Americans may not feel a pickup in demand any time soon, the Business Roundtable reported that more U.S. chief executives plan to cut jobs over the next six months than add them.
What recovery? Most still see recession. CNN survey finds 84% believe the economy is still in a recession, and that pessimism is growing despite improved economic readings. Economists are in broad agreement that the Great Recession is over. The American public strongly disagrees. In a poll of more than 1,000 Americans conducted late last week by CNN/Opinion Research Corporation, 84% of those surveyed believe that the economy is still in recession. That's a slight improvement from the 87% who believed there was still a recession in the September survey, but it is almost the opposite view of the nation's economists.
Art Cashin: Dollar Trade Could End 'Very Badly' U.S. stock markets are sliding Tuesday on a stronger dollar and disappointing announcements from McDonald's and 3M. Art Cashin, director of floor operations at UBS Financial Services, told CNBC why the markets are especially "vulnerable" now. "We're in a kind of ambiguous pattern now that could break out either way," Cashin said. "We're at the end of certain 'cocktail napkin' formations and we're waiting for resolutions. It concerns me, because if it gets weak, and it's appreciably weak, it could start to change the charts around." Cashin addressed concerns about a strengthening US dollar: "The resistance in the DXY [US dollar index] is probably 76 to 76 and 1/4. You can sense the tension in the air: A lot of people who've got the dollar carry trade on...know if this thing should suddenly break out, they could get trapped very badly."
Recession for a Whopping 20 Years . . . . Today, we are living through the fallout - yet again - of the central banking meme. Central banking has taken root throughout the world and the results are truly ruinous. In America, as we can see from the article excerpt above, some are predicting that joblessness and general economic wretchedness may last another 20 years. We tend to agree with this, though we also think data and news will make it LOOK as if things are getting better when they are not. Of course, the latest economic crunch could not have come at a better time for those who want to impose global change from the top down. As Western economies shudder, people are too concerned with jobs and money to worry about the larger changes taking place. Or they become more malleable as the Irish did recently and vote for authoritarian solutions such as the EU because of the hope that large government entities may provide more funding and general economic stimulation than the private sector. This is actually a false hope. Government provides with one hand and takes away with the other. Most of all government decreases opportunity and substitutes barriers to entry.
Wealthiest Plan on Surviving Financial Chaos We have been reporting on economics and finance for over 40 years, and we thought that we had seen and heard it all. That is, until we heard that Lloyd Blankfein, the CEO of Goldman Sachs, stated that he and his firm were "doing God's work." While we were attempting to process that statement (and indeed we are still attempting to process that statement over a week later), our brains started "smoking." We're still not sure if the "smoke" was on account of seething anger, total perplexity, or both. In any case, before we proceed to tell you what we think about this warped whopper, we ask that you indulge us for a moment as we are all still a bit queasy in the aftermath of hearing this disgusting and disgraceful comment!
Job openings dwindle Employers remain reluctant to hire workers, keeping ratio of job seekers to job openings near record high. Job openings fell and layoffs rose in October, according to a government report released Tuesday. Job seekers still outnumber openings by more than six to one, the greatest differential since the Labor Department began tracking job openings in December 2000. Job openings: There were 2.5 million job openings in October, down 26% from a year ago, according to the latest Job Openings and Labor Turnover survey from the Bureau of Labor Statistics.
Unemployment Discrepancy and its Impact on Precious Metals Based upon November’s statistics, investors quickly sold off metals as the Bureau of Labor Statistics’ unemployment rate painted a picture that the recession may finally be coming to an end. Although the BLS statistics were positive, there's still a large discrepancy between the two leading reports. How Government Calculates Unemployment Every survey of unemployment works differently, although the US government's calculations are likely the most blurred. First, the BLS non-farm payroll report does not include those who have hopelessly given up their search for a job. These workers are called discouraged workers, and they are not included in the official tally.
Housing, Unemployment Will Get Worse Before They Get Better President Obama today unveiled several initiatives aimed at rebuilding the nation’s job market. Unemployment hovers at 10% as of November. But our guest, top economist and noted bear Kenneth Rogoff of Harvard University, forecasts more headwinds. "It's hard to see the kind of robust recovery that's really going to generate the 10, 11 million jobs that we need to get back to where we were before it started," says Rogoff, also co-author of a new book, "This Time Is Different: Eight Centuries of Financial Folly." While admittedly surprised by November's stronger-than-expected jobs report, Rogoff predicts employment "comes back very slowly" and the unemployment rate will remain elevated for several years.
Gold Starts Its Technical Correction While Dollar Rallies old had a sharp drop on Friday, December 4th. It was down more than 5% at one point, but closed at $1161.40, off its low. Gold was overbought on both the daily, weekly, and by one measure even on the monthly charts. It needed some pressure taking off after rallying almost every day and hitting one all-time high after another in November. While the bears are coming out of the woodwork and claiming the gold rally is over (as many have claimed was imminent for several months now), there is merely a needed technical correction taking place. The gold charts are so bullish that it would take a lot more selling before the technical picture became damaged. While gold is selling down, the U.S. dollar is not surprisingly rallying since they tend to move in opposite directions. As is the case with gold, it will require a lot more than a few days to change the technical picture of the dollar.
New catalysts for Gold’s next big move . . . . There are much bigger fundamental forces at work in the gold market. And for those investors who can put aside the short-term volatility and focus on the real catalysts for gold’s next big move, they will be set up to make a fortune in the years ahead because gold’s next move is likely to surprise a lot of folks. Here’s why. The Truth about the Dollar Carry Trade The Fed’s free money party has been the biggest driver of gold in the past few months. Traders, through the banks they work for, can borrow money at near 0% interest and go out and buy anything. Lately, they’ve been buying gold.
Gold's next stop is $1,350 per ounce Is gold heading for $1,300 per ounce? It seems so. Last week, gold climbed up to $1227 per ounce before falling back. According to analysts, long-term bull market in gold is still very much intact and the next major stop for gold will be $1,350 an once. However, analysts warned that in the short-term the gold trade was very crowded and its pace was on an ever accelerating slope. The yellow metal may come down to $1,000 an ounce where very strong support lies.
Gold Uptrend: Likely to Continue as Futures Open Interest Remains High The popular carry trade this year has been shorting the US Dollar and buying gold, oil and US equities. You might say that it is not the commodities appreciating, but the dollar’s depreciating that has led to the high prices of gold, oil and everything else which is denominated in USD. Last week’s worries about Dubai’s debt caused a flight to the safety of the US dollar and US government bonds, and subsequently as the American currency appreciated in value, the price of gold and oil dropped. Of particular interest is the gold market which had reached a multi-year high in the last few weeks.
Gold Market Was Looking for an Excuse for a Breather Two bits of hot news on Friday - the employment report...and the action in the gold market. According to the government, there were fewer people out of work in the month of November than there were in October. At least, that is the way the authorities tell it. The official jobless rate fell from its 26- year high of 10.2% down to a 26-year high of 10%. Good news, if you believe it's the beginning of a trend. The other big news is that gold fell $48. We'll come back to that in a moment...
Why the gold bears are wrong once again It behooves us to refrain from getting carried away by reports of the imminent demise of the US dollar. Eventually it will become worthless, but for now, and as long as it is measured against other fiat currencies, the decline will be gradual, not as a watershed. . . . . . . . . The main impact of a collapse in the US dollar will be felt, not in the dollar index (where everybody is watching), but in its relationship to the price of gold.
GOLD THOUGHTS Chairman Bernanke is in the process of being reconfirmed in his role as Chairman of the Federal Reserve. While some criticism of the Federal Reserve was forthcoming at the Senate hearings, why were not true alternative candidates considered? Henny Penny, for one, comes to mind. One of the Three Blind Mice would also seem to be a good candidate. How about an ostrich that each time an asset price bubble seems possible, it puts its head in the sand?
Gold extends fall, spooked investors seek dollars Gold prices dropped more than 1 percent on Tuesday to a session low of $1,142.30 an ounce, with risk aversion fuelling broad dollar gains after ratings agency Fitch downgraded Greece's credit rating. . . . . The dollar strengthened against the euro, with the single currency feeling the pinch as investors worried about Greece's fiscal health after Fitch downgraded the euro zone member's credit rating. Traders attributed gold's decline in the last three sessions from record highs to a recovery in the dollar after better than expected U.S. non-farm payrolls data for November lifted hopes that the world's biggest economy may be stabilizing.
Gold Battlefield: Think Less. Buy More I've seen many business owners embrace what the banksters do in the market, the buying weakness and selling strength in a pyramid formation, and no gold writer can compete with that when they begin to execute on the strategy repeatedly. The substantial business owner brings too much to the table. It's an overwhelming force, a force that goes way beyond simple dollars, and is understood by very few outside of the bankster community. The volume of understanding of risk and reward that the business owner has, is something incomprehensible to most writers and analysts. It is a force of tremendous power.
Gold edges towards $1169 in Asia Gold joined oil towards a northern journey Tuesday on reports of further weakness for dollar, boosting the appeal of the precious metal as an alternative investment. Gold rose for the first time in four days as a 5.6 percent slump from last week’s record renewed buying interest in the metal. Spot gold was seen trading at $1168.85 an ounce at 11.30 a.m after hitting as high as $1169 an ounce earlier. February-delivery gold on the New York Mercantile Exchange’s Comex unit rose 0.3 percent to $1,167.90 an ounce.
Why James Grant loves gold and hates US dollar As US dollar declines and global currencies turn volatile, more and more global investors and investment advisors are turning their heads towards the hottest investment asset these days: gold. James Grant, a global financial expert, is reposing his faith in gold in place of the US dollar. “Return to the gold standard is the best possible solution in these times of financial troubles,” he says.
John Paulson loves gold bull run... The price of gold has been falling, after peaking at over $1,200 an ounce. The dollar, and the US economy in general, are are recovering and now there is even speculation of Fed rate hikes. This reversal of fortune has some investors reconsidering gold investments, even as major hedge funds are betting on the precious metal. For more on this, see the following article from The Street. Gold prices have been in free-fall ever since the government announced a better-than-anticipated November jobs data last week.
Dubai, Inflation, and Gold . . . . As we've explained a number of times over the years, it is not strictly correct to say that gold is a hedge against inflation. We are convinced, however, that under the current system a high rate of monetary inflation is one of the two primary ingredients of a long-term gold bull market. Monetary inflation is not sufficient by itself, but when mixed with the second ingredient the result will be a powerful advance lasting many years.
Don't count on central banks to fuel the gold rush. Ask South Korea Gold bugs readily cite plenty of reasons why they think the precious metal's price will keep climbing. One argument gaining prominence lately is that the world's central banks will rush into gold, pushing the price ever-higher. But apparently the central bankers haven't gotten the memo. On Tuesday, the Bank of Korea -- the world's sixth-largest central bank -- became the latest one to pour cold water on the notion that it would buy gold to diversify out of the dollar. "There's an illusion in gold," Lee Eung Baek, the head of the bank's reserve-management department, told Bloomberg News in an interview. "We follow the big trend. Gold isn't the trend. Out of more than 200 nations, how many countries have bought bullion?"
Hedge Against Hyperinflation, Hard Assets Should Continue to Appreciate During 2010 The devil will be in the details of the balance sheet when hyperinflation hits. And while lots of companies have been using leverage to drive their ROE (and their stock prices), the structure of their debt may spell the difference between prospering and perishing. Those with low-interest debt that's locked in for a long spell actually will be poised to retire their obligations with cheaper dollars. But woe betide those stuck with floating rates. That's how Sprott Asset Management senior portfolio managers Charles Oliver and Jamie Horvat see what's brewing beyond the horizon, when time comes to pay the price for running the money-printing presses too hot and too long. As Charles and Jamie suggest in this exclusive Gold Report interview, investors who base decisions on the strength and structure of the balance sheet may not do too badly. In fact, they explain how the stock market itself may serve as a hedge against hyperinflation.
Will China ‘Amnesty’ Birth the Black Swan? For those who have been unsettled by gold's corrective weakness in recent days, I've reprinted a reassuring letter below from a friend and longtime subscriber who also happens to be a U.K.-based gold-dealer and metals trader. Andy, as he is known in the Rick’s Picks chat room, is bullish as ever on gold and sees a potential "black swan" bearing down on the financial system in the form of a Chinese derivatives-default. This is a looming catastrophe that we've written about here before, as some of you may recall. The threat surfaced with an announcement by China a couple of months ago that the government would take no legal action against its own banks if they walked away from derivatives deals gone bad.
The Coming Cyclical Collapse of the Dollar . . . . The US$ has been under attack from all sides lately. It is on the ropes taking hit after hit but it won't go down. You know what? I don't want it to fall. I don't want to see America fail. When we bet against the dollar, we bet against ourselves and our children. We bet against what is good. A way of life. We bet against hopes and dreams. Is there cyclical hope for the green back. Let's take a look.
Gerald Celente Says Bernanke Has Devalued the Dollar and Destroyed the Economy Gerald Celente of the Trends Research Institute is strongly opposed to the idea of Ben Bernanke seeking and getting a second term as head of the Federal Reserve. Celente strongly argues that Bernanke is creating the “bailout bubble” and destroying the U.S. economy. But he says the Fed Chief will get to keep his job because he’s an “insiders.”
Pimco Says ‘Fear Not,’ Weak Dollar Will Spur Growth Pacific Investment Management Co., which runs the world’s biggest bond fund, said the dollar is poised to fall and the decline may help spur the U.S. economy. “Fear not the falling dollar,” Scott Mather, head of global portfolio management at Pimco, wrote in an article on the company’s Web site. “A gradually weakening dollar may help heal the U.S. economy” by encouraging demand for the nation’s exports, he wrote.
Stock market slides as dollar strengthens Stocks slump as dollar strengthens, investors seek safe havens; 3M, McDonald's disappoint Investors dumped stocks and sought safe-haven assets like the dollar and Treasurys on signs that the global economy is still struggling. Major stock indexes fell about a percent, including the Dow Jones industrial average, which lost 100 points.
Dollar Makes the Most of the Shaky Markets The dollar rose against most of its rivals Tuesday as worries about deteriorating global credit quality hurt demand for stocks, gold, oil and higher-yielding currencies. The euro and the pound tumbled to one-month lows against the greenback. A number of other higher-yielding or commodity-related currencies declined sharply, including the Swedish krona, the Canadian dollar, the Mexican peso and the Australian dollar. Investor mood soured on the back of disappointing euro-zone economic data and downgrades of the debt of Greece and government-related companies in Dubai. Appetite for risk waned further after Moody's Investors Service reminded markets the U.S. and U.K. aren't immune to credit-quality issues.
The Destruction of the Dollar: It's Nearly Inevitable "We have experienced asset bubbles, and we now have an economy that is more highly leveraged than it ever has been in the post-World-War II period. Greenspan has been instrumental in bringing about this high leverage." -- Paul Kasriel “A dollar saved is a quarter earned.” -- John Ciardi
Meredith Whitney Video: US Government "Out of Bullets", Consumer in Trouble The government is running out of ways to help the economy as the US faces major issues regarding credit and employment ahead, banking analyst Meredith Whitney told CNBC. "I think they're out of bullets," Whitney said in an interview during which she reinforced remarks she made last month indicating she is strongly pessimistic about the prospects for recovery. Primary among her concerns is the lack of credit access for consumers who she said are "getting kicked out of the financial system." She said that will be the prevailing trend in 2010.
Meredith Whitney is still as bearish as she’s ever been on financials, Uncle Sam is out of bullets
U.K., U.S. Top Aaa Ratings Tested by Debt Burdens, Moody’s Says Moody’s Investors Service said the top debt ratings on the U.S. and the U.K. may “test the Aaa boundaries” because public finances are worsening in the wake of the global financial crisis. “The deterioration has been pretty severe,” said Pierre Cailleteau, managing director of sovereign risk at Moody’s, in a Bloomberg Television interview in London. “We expect a pretty strong policy response in the next couple of years in order to keep the debt in the Aaa range. We expect them to bend but not to break.”
Moody's U.S. credit warning spooks world markets The United States and Britain must take action soon to get their public finances in order if they want to avoid threats to their top triple-A credit ratings, a leading credit ratings agency said Tuesday, accelerating U.S. and European stock markets' decline. In an assessment of eight triple-A countries, Moody's Investors Services said the public finances in both countries are deteriorating considerably and may therefore "test the Aaa boundaries" in the future.
Dubai Company Bonds Dive as Swaps Show Default Risk The tumble in bonds of Dubai’s state- controlled companies to record lows signals growing concern more borrowers will fall behind on debt payments as Dubai World seeks to restructure $26 billion of obligations. “We are concerned that it’s just not Dubai World that has issues,” said Oliver Bell, the head of Middle East and Africa investment at Pictet Asset Management in London, which has $120 billion under management. “The health of other government- related entities is in question.”
Hedge Funds Win on Chicago Sewer Debt at Public Cost The “fair and reasonable” price financial advisers recommended to the Metropolitan Water Reclamation District of Greater Chicago for the biggest borrowing in its history cost taxpayers $8 million in unnecessary interest and resulted in a bonanza for bankers, according to documents initially withheld from the public. Hedge funds bought almost a quarter of the AAA-rated debt. Sellers reaped a profit of as much as 2.5 cents on the dollar by immediately trading their share of the $600 million of Build America Bonds because they realized the authority paid higher rates of interest than similarly rated and less credit-worthy companies, according to data compiled by Bloomberg. The Texas Transportation Commission, with a credit grade one level below the Chicago agency, sold almost twice as much of the federally subsidized debt the next week at lower cost to taxpayers.
Insider Loans Distrusted by Bair as Georgia Failures Lead U.S. James H. Blanchard and A.W. “Bill” Jones III played golf and hunted turkey, quail and deer together. They were passionate about servant leadership, the idea that corporate executives should emulate Jesus Christ as stewards for their workers, customers and communities. Together they were on the boards of Blanchard’s Synovus Financial Corp. and Jones’s Sea Island Co., a closely held resort on Georgia’s Atlantic coast. Starting in 2001, Synovus loaned Sea Island what eventually totaled $220 million to turn the resort into the “Pebble Beach of the East.”
Geithner Said to Be Seeking TARP Extension Until Next October Treasury Secretary Timothy Geithner plans to tell Congress that the Obama administration will extend the $700 billion financial-rescue program until next October, people familiar with the matter said. While the Troubled Asset Relief Program expires on Dec. 31, Geithner can extend it by notifying Congress. A letter notifying Congress of the extension could come as soon as tomorrow, said the people, who declined to be identified.
A lonely voice against the Fed now leads a chorus Rep. Ron Paul's attempt to rein in central bank is finally close to passing -- just don't expect him to vote for it Ron Paul is used to going it alone. During 20 years in Washington, the libertarian Republican congressman from Texas has proposed doing away with personal income taxes, federal antitrust laws and the minimum wage. He's advocated pulling the United States out of the United Nations, NATO and the International Monetary Fund. Those efforts have mostly been legislative non-starters. Many of his bills fail to attract a single co-sponsor.
Bernanke Signals Fed Will Maintain Its Outlook for Low Rates The Federal Open Market Committee will probably maintain its outlook for a long period of low interest rates next week as tight credit and high unemployment weigh on the economy, Fed Chairman Ben S. Bernanke signaled. Fed officials meet for the last time this year Dec. 15-16 after a report last week showing employers cut the fewest jobs in November since the recession began in December 2007. The report prompted some investors to raise bets the Fed would increase rates by the third quarter of 2010.
Bernanke Low Rates ‘Poison’ to U.S. Economy, Xie Says . . . . Bernanke is making decisions based on “marginal considerations” that will help short-term growth and employment, instead of focusing on the “soundness of the system,” Xie wrote in an e-mailed note today. The next worldwide crisis will probably strike in 2012, driven by inflation as the low cost of borrowing spurs increases in asset prices, he said. “There is a Chinese saying that one could quench the thirst by drinking poison,” said Xie, who predicted in September 2006 that the U.S. economy would fall into a recession in 2008. “Bernanke seems to be prescribing exactly this to the U.S. economy. The slower Bernanke raises interest rates, the bigger the next crisis.”
Marc Faber on sovereign debt default : American & Greek Marc Faber talks about sovereign debt default goverment default gse bankruptcy central bank printing money stimulus packages greece eurozone financial crisis us government bonds t-bills treasury bills inflation quantitative easing recorded in December 5th 2009
Banks Allowed to abandon Accounting Standards Board to Propose More Flexible Accounting Rules for Banks Facing political pressure to abandon “fair value” accounting for banks, the chairman of the board that sets American accounting standards will call Tuesday for the “decoupling” of bank capital rules from normal accounting standards. His proposal would encourage bank regulators to make adjustments as they determine whether banks have adequate capital while still allowing investors to see the current fair value — often the market value — of bank loans and other assets.
Amendment Allowing Judges to Modify Mortgages to be Included in H.R. 4173 - Wall Street Reform and Consumer Protection Act An amendment allowing judges to modify mortgages on primary residences for homeowners in bankruptcy will finally find a home as part of the Wall Street Reform and Consumer Protection Act (H.R. 4173). The amendment, which is being offered by Representatives Conyers (D, MI), Turner (R, OH), Lofgren (D, CA), Marshall (D, GA), Cohen (D, TN), Miller (D, NC), Nadler (D, NY), Delahunt (D, MA) and Waters (D, CA), is potentially the best news homeowners and our economy have had in quite some time. The amendment is essentially the same as H.R. 1106, a bill passed by the House on March 5, 2009, by a vote of 234-191, but subsequently defeated in the Senate by a vote of 51-45. The measure needed 60 votes to pass over Republican objections, and 12 Democrats succumbed to pressure from the banking lobby and voted nay.
SocGen Recommends Yuan Options to Benefit From ‘Gradual’ Gains Investors should use options to benefit from China allowing “gradual” gains for the yuan next year as the economy recovers, according to Societe Generale SA. “Any appreciation is likely to be gradual when it resumes, in a similar style to the appreciation from July 2005 to July 2008,” Adam Reynolds, Hong Kong-based co-head of the fixed income and currencies flow business for SocGen, France’s second- largest bank by market value, said in an interview yesterday.
Alan Grayson Asks Bernanke for Answers in Latest Retrade of AIG Deal The ongoing tempest in a teapot about executive compensation at AIG appears to be a bit of Kabuki theater designed to divert attention from the real drama, which is the continuing sweetening of the deal to the troubled insurer. We will get to Congressman Alan Grayson’s pointed questions to Bernanke about the latest de facto handout to AIG, but we wanted to give some of the sordid context first. Let us deal with some simple facts of life. Troubled borrowers pay a high rate of interest. And the Bagehot rule, a principle much admired by central bankers, but seldom observed of late, holds that the central bank should lend freely to a failing bank, against high-quality collateral and at a punitive rate. That was the logic of the original AIG deal, which from a structural standpoint, was the only bailout that made any sense.
Obama outlines new spending to boost economy Trapped between a bad economy and high budget deficits, President Obama on Tuesday called for a series of small fixes from a one-year capital-gains tax break for small businesses to incentives for consumers to make their homes more energy-efficient -- but he said Congress will have to work out the details. Seizing on a recent report that last year's Wall Street bailout will cost at least $200 billion less than previously thought, Mr. Obama said some money from the $700 billion Troubled Assets Relief Program (TARP) should be redirected toward encouraging small-business growth, but he also promised that some of the funds also would be used to reduce the deficit.
Obama redirects funds to help jobless Barack Obama unveiled what amounted to a second fiscal stimulus with plans to boost spending on job creation by using some of the $200bn that he said was left over from the bank bail-out programme. The president, who said his proposals were aimed at alleviating the “continued human tragedy” of unemployment, declined to put a cost on the measures he outlined on Tuesday. But Steny Hoyer, Democratic majority leader in the House of Representatives, estimated such spending could reach $150bn, without including the $100bn or so in the planned extension of unemployment benefits.
Democrats push more mortgage aid TARP WOULD PROVIDE FUNDS House to vote this week on financial regulation House Democrats are seeking to tap the government's massive bailout fund to help homeowners who have lost their jobs and are struggling to make their mortgage payments. House Financial Services Committee Chairman Barney Frank (D-Mass.) on Monday signed on to a proposal by Rep. Maxine Waters (D-Calif.) that would channel $3 billion from the federal Troubled Assets Relief Program toward mortgage relief for jobless Americans. The measure would designate another $1 billion for a program that gives grants to state and local governments to purchase foreclosed properties and use them for more productive purposes.
FHA wants to tighten limits on new mortgages The Federal Housing Administration is about to beef up the borrowing requirements for home buyers, a move that could dampen the fragile housing market's recovery. Among the steps scheduled to be outlined today are greater down payment requirements and higher credit scores for consumers who seek FHA-backed mortgages. Few specifics of the plan, designed to limit risks to the FHA's loan portfolio, are expected to be divulged immediately. But it seems clear from testimony that Housing and Urban Development Secretary Shaun Donovan will give later today that home buyers are going to have to dig deeper in their wallets to purchase a home.
Cash for Caulkers could seal $12,000 a home Under President's proposal, homeowners would be reimbursed for energy-efficient appliances and insulation. President Obama proposed a new program Tuesday that would reimburse homeowners for energy-efficient appliances and insulation, part of a broader plan to stimulate the economy. The administration didn't provide immediate details, but said it would work with Congress on crafting legislation. Steve Nadel, director at the American Council for an Energy-Efficient Economy, who's helping write the bill, said a homeowner could receive up to $12,000 in rebates.
Fat People Cannot Get Jobs And Jobless People Are Fat Last week, we highlighted a scary county-by-county map that a commenter posted to #tips showing metastasizing unemployment growth. Today, it occurred to us that we'd seen a graphic like that somewhere before: A CDC map of obesity by county. he left map is a snapshot of county-level unemployment rates from October 2008; darker counties have higher unemployment (the time-lapse map we grabbed it from goes to October 2009, at which point the whole country is basically black). At the right is a CDC map released last month of obesity rates in 2007—it's the first county-level rendering of obesity data.
Hunger, family homelessness on rise in U.S. cities Hunger is spreading while the number of homeless families is increasing as a result of the recession and other factors, according to a report on Tuesday. The U.S. Conference of Mayors said cities reported a 26 percent jump in demand for hunger assistance over the past year, the largest average increase since 1991. Middle-class families as well as the uninsured, elderly, working poor and homeless increasingly looked for help with hunger, which was mainly fueled by unemployment, high housing costs and low wages. The 2009 report is based on a survey of 27 cities, including Boston, Chicago, Detroit, Los Angeles, Miami, Philadelphia and San Francisco, that comprise the group's task force on hunger and homelessness.
PepsiCo Drops Tiger Woods Drink PepsiCo Inc. is dropping a Gatorade drink named after Tiger Woods from its lineup, and television ads featuring the golfer haven't been aired since a storm of publicity erupted over his car accident last month and subsequent revelations about alleged extramarital affairs. Mr. Woods has been at the center of a media frenzy since he crashed his Cadillac Escalade outside his Florida home Nov. 27, setting off a chain of events that has opened his personal life to scrutiny and led him to admit unspecified "transgressions." For nearly two weeks, news media have continued to closely monitor Mr. Woods and the comings and going of his family.
Poor demand more from rich to unlock climate talks Developing nations demanded deeper emissions cuts from rich nations, particularly the United States, at U.N. climate talks in Denmark on Tuesday, as a study showed that 2009 is the fifth warmest year on record. The first decade of this century was also the hottest since records began, the World Meteorological Organisation said, underscoring the threat scientists say the planet faces from rising temperatures. A record 15,000 participants at the talks are trying to work out a climate pact to combat rising seas, desertification, floods and cyclones that could devastate economies and ruin the livelihoods of millions of people.
Bond jitters as Japan launches yet another stimulus plan Japan has launched its fourth fiscal rescue package since the economic crisis began last year, spraying a further $81bn (£50bn) into the regions and on subsidies for "eco-cars" and refrigerators. The spending blitz will lift debt issuance to a record $835bn this year and comes despite warnings by finance minister Hirohisa Fujii that Japan risks exhausting the patience of bond vigilantes. "Japan's fiscal situation is serious. If we over-issue government bonds, there will be a loss of confidence," he said. There were already signs of investor fatigue at an auction for bonds yesterday, with yields rising as high as 2.23pc.
Copenhagen climate summit a wild ride Thousands of journalists, activists create carnival setting The calls for climate action begin at the airport, where the thousands of arriving journalists, negotiators and observers are greeted by billboards showcasing eco-friendly hotels, drowning polar bears and stern warnings of impending climate catastrophe. One features a polar bear alone on an ice floe. "The Arctic cant wait: climate deal now." Another features aged world leaders in the year 2020, with the words "Im sorry. We could have stopped catastrophic climate change ... we didn't."
The Buck Stops Where? Last week, we witnessed Ben Bernanke's Senate confirmation hearings for a second term as Fed Chairman. The air was thick with hypocrisy, as Senators vied with each other to cast blame on the Fed Chairman for the fiscal mistakes of the Congress. As an overtly politicized figure who has looked to bolster the poll numbers of successive Administrations, Bernanke certainly should shoulder a large share of the blame for steering the United States towards the brink of bankruptcy; however, he did not act alone. Ironically, many of his co-conspirators are currently his harshest critics.
The truth is that if there were no debt from Congressional deficit spending, there would be nothing for the Fed to 'monetize' with the printing press. By behaving as the voters' 'best friend,' delivering both low taxes and generous entitlements, Congress forced the Fed to play the disciplinarian. Except, not wanting to spoil the party, it didn't. Ben Bernanke, like his predecessor Alan Greenspan, is an intelligent man who knows exactly where reckless spending will lead the country. Yet he refused to hit the brakes.
Where Is the US Economy Heading? Economists are currently divided on the issue of how strong the US economic recovery is going to be. Some are of the view that as a result of the stimulus policies of the Fed and the Federal government, the recovery is going to be quite strong. Some others are more pessimistic given still-rising unemployment, which they believe will keep consumer spending subdued. In October the unemployment rate jumped to 10.2% from 9.8% in the previous month and 6.6% in October last year.
2010 Ready or Not Here It Comes Constant prosperity through credit is no more possible than constant peace through heroin Much has been written about the Great Depression and the present crisis. There is much that is similar and some that is not. The differences explain why events have unfolded differently. The similarities explain why the end will be the same. Deflationary depressions occur after the collapse of large speculative bubbles. The collapse of the 1920s US stock market bubble, then the largest bubble in history, caused the Great Depression of the 1930s. The collapse of the far larger dot.com and US real estate bubbles will cause the next.
Social Security Will Go Bust in 2010 For the third time in my life, the Social Security System will go belly-up. The first time was in 1977 – well, almost. To head off the bust, Jimmy Carter got Congress to pass a major FICA tax increase – sorry, "contribution" increase – in order to save Social Security. The rate would be hiked in phases from 2% to 6.15% (times two: employee and employer). He promised: "Now this legislation will guarantee that from 1980 to the year 2030, the Social Security funds will be sound."
Ron Paul with Judge Napolitano on Glenn Beck- Bernanke to be Renominated
Bernanke cautious on 2010's economic growth Although the manufacturing sector has expanded four months in a row and the unemployment rate dipped last month, Federal Reserve Chairman Ben S. Bernanke warned Monday that there still is not sufficient momentum to declare that the nascent economic recovery will be long-lasting. "Though we have seen some improvement in economic activity," Mr. Bernanke told the Economic Club of Washington, "we still have some way to go before we can be assured that the recovery will be self-sustaining."
Bernanke Sees ‘Formidable Headwinds’ for U.S. Federal Reserve Chairman Ben S. Bernanke said the U.S. economy faces “formidable headwinds,” including a weak labor market and tight credit that are likely to produce a “moderate” pace of expansion. “The economy confronts some formidable headwinds that seem likely to keep the pace of expansion moderate,” Bernanke, 55, said today in a speech to the Economic Club of Washington. He said inflation remains “subdued” and might even move lower.
U.S. debt to reach $50 trillion by 2030 Former Treasury official: Nation's liability growing to unmanageable levels A former State Department official is warning that U.S. national debt is growing to unmanageable levels, Jerome Corsi's Red Alert reports. C. Fred Bergsten, former assistant secretary of international affairs for the Treasury, sounded the alarm that dollar deficits may not be funded for long by foreign nations, including China, in the Nov./Dec. 2009 issue of the Council on Foreign Relations "Foreign Affairs" magazine. By 2030, Bergsten anticipates the net foreign debt of the United States will exceed $50 trillion, or 140 percent of gross domestic product.
Gold price is not on a bubble Well, I'm on record across the world as saying that gold is the best investment in the world for the next two to three years. It's fundamentally obvious, but when you're printing huge amounts of paper vs. something that is considered money, the paper will depreciate and the hard assets will go up. So gold and silver will do well – silver a little less so – but gold certainly.
Gold firms as dollar weakens after Fed comments Gold firmed slightly on Tuesday, recovering from a two-week low marked the previous day, as the dollar weakened after the Federal Reserve chief cautioned that the U.S. economic recovery remains fragile.
New Catalysts for Gold’s Next Big Move Gold took a big hit today. As I write, gold is down $51 per ounce. Wall Street’s momentum-chasing traders, whose new found affinity for the yellow metal helped push gold up 20 of the last 25 trading sessions, are scrambling for the exits today as the monthly jobs report turned out much better than expected. For Main Street, the news was good. The headline unemployment rate fell to 10% from 10.2% last month. The underemployment rate fell from 17.5% to 17.2%. Despite the decline in the rates of unemployment, the U.S. economy lost 11,000 jobs last month. That’s relatively good news compared to recent past.
Gold: Is it bubble time or buy chance? It was days of hype, golden talks and frantic buying of the yellow metal for every bullion trader and investor for the whole of November and the first week of December. Gold, the hottest commodity to invest in, was hailed as the right replacement for the declining doll
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