Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Fri 02.05.2010
Breakdown Of The Gold Market By: Jim Willie CB - Market Oracle A great disconnect exists in the gold market between the exchange futures contract price (the paper price) and the gold bullion paid price for transactions (the physical price). The differential in price is growing wider, enough to place tremendous pressure on the gold market itself. Look not to the gold premium paid for purchases, but to high volume purchases in the tens of million$. In mid-December, almost every demand for gold contract delivery was matched by a cash delivery, complete with 25% bonus premium offered. The officials even produced a new ledger item called 'Cash For Delivery' that was necessary to balance their badgered books. It prompted little attention. Some call it a basic bribe. Others call it a technical default. . . . . . . . The true gold price might very soon become unknown, an extremely positive development.
Nuclear missile threats to U.S. mount By Bill Gertz Report warns of Pyongyang's aims North Korea is expected to deploy a nuclear-tipped missile capable of reaching parts of the United States in the next decade, despite two long-range missile flight-test failures, according to the Pentagon's ballistic-missile defense review. The review report, made public this week, concluded that missile threats from several states, including Iran, Syria, China and Russia, are growing "quantitatively and qualitatively," and it outlined Pentagon plans for silo-based and mobile anti-missile systems to counter them.
Massive revision will show recession was even worse By Rex Nutting, MarketWatch More than 8 million jobs lost since 2007, updated Labor data will show Friday On Friday, the government's official data on U.S. employment will be updated to reflect what everyone already feels: In terms of job losses, this has been the worst recession since the end of the World War II more than 60 years ago. Instead of job losses of 7.2 million as currently reported, it'll be more like 8.1 million lost jobs, if the annual benchmark revision of payrolls through March 2009 comes in as had been estimated four months ago by the Bureau of Labor Statistics.
America Is Abdicating Global Leadership by Brad McDonald - theTrumpet Last December, President Obama visited Europe twice within 18 days. His first trip was to Oslo to accept a medallion and a check. The second was to Copenhagen, where he addressed what was by then a melting conference on climate change. This week, the U.S. State Department confirmed that President Obama has canceled his visit to Spain in May for the yearly U.S.-EU summit. This annual meeting has been held since 1991. This is the first time a U.S. president has skipped the summit in 17 years.
See exclusive videoby Robert Morley to better understand the situation in Greece, Portugal, Spain, Italy, Germany, and the EU... The Ramifications of Greece's Economic Crisis The whole credibility of the Euro could be thrown into question and possibly be replaced by a new Deutschmark II currency to pay down sovereign debt. Greece's interest on its debt is escalating at rate of 1.5%/MONTH (Greek debt to GDP ratio is 12.5% which exceed EU limit of 3%)
As Greece's Woes Demonstrate the Fuse Has Been Lit on the Global Debt Bomb By Martin Hutchinson, Money Morning The big story in the international markets so far in the New Year has been the increasing shakiness of a number of countries' government bonds, with Greece right now being the most troubled of all. Since U.S. investors tend to avoid foreign government bonds, many will dismiss this as an irrelevant development.
The Spiraling Debt of Greece and Other PIIGS By Fil Zucchi - Minanville We may be close to a "Lehman/Merrill/AIG kind of September weekend", but with no buyer of last resort. The participation of the PIIGS (Portugal, Italy, Ireland, Greece, and Spain) in the EU structure is suffering a 9.0 earthquake -- these countries are now three to five times above the Maastricht deficit levels and over the last 65 years their populations haven't accepted belt tightening without socio-political unrest. So their choice is either to thumb their nose to the EU and the very essence on which the euro is based or suffer crippling popular strife. And if anyone thinks that Germans and French will go along with using their already depleted coffers to prop up their millennial-old cultural enemies, I have multiple bridges to sell you.
Fears of 'Lehman-style' tsunami as crisis hits Spain and Portugal By Ambrose Evans-Pritchard - Telegraph -- The Greek debt crisis has spread to Spain and Portugal in a dangerous escalation as global markets test whether Europe is willing to shore up monetary union with muscle rather than mere words. Julian Callow from Barclays Capital said the EU may to need to invoke emergency treaty powers under Article 122 to halt the contagion, issuing an EU guarantee for Greek debt. "If not contained, this could result in a `Lehman-style' tsunami spreading across much of the EU." Credit default swaps (CDS) measuring bankruptcy risk on Portuguese debt surged 28 basis points on Thursday to a record 222 on reports that Jose Socrates was about to resign as prime minister after failing to secure enough votes in parliament to carry out austerity measures.
Sovereign debt crisis?
See more articles on Greece, Spain, Portugal, EU, below . . .
Hedge Fund Manager Sprott Sees Gold at $1,500 in 2010 By Rob Delaney Feb. 4 (Bloomberg) -- Eric Sprott, whose Sprott Hedge Fund increased more than fivefold in nine years, said gold may rise to $1,500 an ounce this year and $2,000 within two years as the U.S. government takes measures to counter the credit crunch. “With quantitative easing and the financial problems we have, I suspect that the gold price goes up from here,” Sprott said today in an interview in Toronto, where he announced financial support for Canadian athletes. “If you tell me how much quantitative easing there is, I’ll tell you where the gold price will go, but I have no trouble imagining we get to $1,500 this year and to $2,000 in two years.”
Comex speculators bombing gold By Jim Sinclair Gold is down today because stops got run on the paper gold exchange. That came on the back of a strengthening dollar due to a weaker euro as a mirror effect. Please return to December of 2009 when the impending dollar rally was sold based on a sustainable US economic recovery. That was enough to convince money managers. That demand then triggers the algorithms which fires off huge fund buying for what today is no reason at all.
Gold to hit $2,500: Ernst and Young The price of Buying Gold will continue to rise in the long-term, reaching as much as $2,500 per ounce within the next two years, some analysts believe. Viren Mehta, a financial services expert at Ernst and Young, which employs 144,000 people around the world, is one such analyst. He told Forbes India that the underlying factors driving up Gold Prices remain in play and will continue to do so for some time, meaning that the precious metal will remain an attractive proposition.
Precious Metals: The future of investing By Dr. Jeffrey Lewis - Commodity Online Slowly but surely, the path to the future of investing is being carved. This time, it isn't equities or debt that is leading the charge; it's none other than precious metals. . . . . . . . . The ability of precious metals to protect against inflation, as well as deflation, and everything in between truly shows how versatile and rewarding gold and silver are as investments. Never has the public been so interested in gold and silver coins.
Why gold surges during dollar bear market Fortis Bank Nederland - Commoditiy Online The impact of a stronger dollar Periodic dollar rallies are a salient reminder of two things regarding currency markets: exchange rates are a ratio of one currency to another - the strength of a currency is not just related to its own fundamentals, but that of the currency in which you are measuring it; and most studies have shown they are largely unpredictable, except perhaps in the very long run. Thus we might get a US dollar revival simply because economic conditions in other countries look worse, such as parts of the Euro zone. But there are reasons why the US currency might prosper anyway, such as if the US economy stages a stronger rebound than other economies and there is a hint that US interest rates may rise earlier than the market expects. This is not yet our view; history suggests that US interest rates do not rise until long after a recession has ended.
Gold "In No Man's Land" Ahead of US Jobs Data; Falls vs. Dollar, Steady in Euros By: Adrian Ash - Gold Seek THE PRICE OF GOLD fell further against a rising US Dollar in Asia and London on Thursday, holding steady for Euro and UK investors as global stock markets sagged and crude oil extended yesterday's loss. Silver erased this week's gains-to-date, trading below last Friday's close of $16.24 an ounce. US and German government bonds pushed higher, but UK gilts fell – nudging yields higher – after the Bank of England made no changes to its key interest rates or £200bn quantitative easing program. The European Central Bank surprised no one by keeping its bank-lending rate at 1.0%.
Chinese govt advise gold buying - why? What is their plan?
China Shows Little Patience for U.S. Currency Pressure By Mark Landler - NY Times BEIJING - A senior Chinese official said on Thursday that China would not bow to pressure from the United States to revalue its currency, which President Obama says is kept at an artificially low level to give China an unfair advantage in selling its exports. The official, Ma Zhaoxu, a Foreign Ministry spokesman, said at a regular news conference here that "wrongful accusations and pressure will not help solve this issue."
Treasury Secretary Geithner says China is likely to let currency appreciate By Don Lee - LATimes A revalued yuan would address a long-sought U.S. goal that could help boost American exports and create more jobs. Reporting from Washington - Treasury Secretary Timothy F. Geithner said Thursday that China was likely to let its currency appreciate -- addressing a long-sought U.S. goal that could help boost American exports and create more jobs. Though Geithner didn't specify when he expected Beijing to loosen its grip on the yuan, his statement to the Senate Budget Committee struck an optimistic note against a background of deepening tensions with Beijing, partly over economic policy but also over arms sales to Taiwan and President Obama's plans to meet with the Dalai Lama.
Geithner to press G-7 nations to keep stimulus aid By Martin Crutsinger - Washington Post IQALUIT, Nunavut -- Treasury Secretary Timothy Geithner will press major U.S. allies meeting in this Canadian town this weekend to maintain their stimulative aid to help the global economy rebound from the worst downturn in seven decades. Aides say Geithner will argue that the recovery could falter if governments rely too much, too soon on still-sluggish spending by consumers and businesses. Unemployment rates have hit double digits in the United States and several European countries.
Canadian Dollar Tumbles as Crude Oil Prices, Equities Plunge By Allison Bennett and Chris Fournier -- Feb. 4 (Bloomberg) -- Canada’s dollar dropped the most against the yen in almost a year as an unexpected increase in U.S. jobless claims and Europe’s deficit troubles led to a rout in commodity prices and equities. The loonie fell to the weakest level since November against the U.S. dollar as concern the global economic recovery is losing momentum deterred demand for currencies tied to growth. The two-year government bond’s yield fell the most in more than two weeks before Canadian and U.S. reports tomorrow on payrolls.
Pimco’s Michael Gomez Says ‘Stay Away From the Euro’ By Michael Patterson Feb. 4 (Bloomberg) -- Investors should avoid the euro because the region’s finances hinder its ability to adjust to changes in the global economy, said Pacific Investment Management Co.’s Michael Gomez. “I would want to stay away from the euro, the eurozone and some of the emerging European currencies,” Gomez, co-head of emerging markets at Newport Beach, California-based Pimco, said today at a conference in Moscow. “When you look at the state of balance sheets in Europe, when you look at the state of pegs and quasi-pegs across the region, that hinders the ability for adjustment.”
Peter Schiff, Currency Crisis Imminent (NWO ECONOMICS/ Economic Collapse/USA)
Containing Inflation Via Unlimited Money Creation: The Fed's Strategy By Daniel R. Amerman, CFA - GoldSeek The Federal Reserve was well aware of the severe inflationary dangers when it directly created almost a trillion dollars as part of its separate bailout of Wall Street. If this cash – which exists in highly liquid form right now - escapes into general circulation, the result could be immediate and major inflation that would devastate the value of the dollar and all of our savings. Therefore, even as it created the trillion dollars, the Fed set up a series of barriers to contain the new cash and ultimately return it to the void from whence it came, lest the new cash break out and wreak monetary havoc.
Deficit imperils nation's top credit rating By Patrice Hill Moody's sees urgent need to narrow gap The United States is drawing closer to the kind of debt crisis plaguing some European countries, where a financial emergency forces political leaders to make draconian spending cuts and tax increases to maintain the confidence of international investors. Moody's, a top Wall Street credit agency, brought the U.S. closer to such a point this week by, for the first time, warning that the U.S. could lose its gold-plated AAA credit rating in coming years unless it quickly puts into place plans to curb budget deficits of more than $1 trillion that have the potential to destabilize government finances and the financial markets.
House sends $1.9 trillion debt-limit increase to Obama 'Pay-as-you-go' measure would curb future deficits By Robert Schroeder, MarketWatch The U.S. government would be allowed to go $1.9 trillion deeper into debt under legislation approved in the House of Representatives on Thursday, which boosts the overall debt limit to $14.3 trillion, but also includes a budget-control mechanism known as "pay as you go." The House approved legislation increasing the debt limit on a procedural vote of 217-212, following a tight vote of 60-39 in the Senate last week. It now goes to President Barack Obama for his signature. The "pay-as-you-go" mechanism requires that any increases in spending be offset with cuts elsewhere in federal outlays. The language was attached to curb future deficits, and the debt-limit measure including the pay-as-you-go mechanism was voted on separately. It passed 233 to 187.
Clarence Thomas on Citizens United, Corporate Speech, and the State of the Union Damon W. Root - Reason.com -- Justice Clarence Thomas gave one of his famously frank and entertaining speeches to a law school audience this week in Florida, and as Adam Liptak reports in the New York Times, Thomas offered some choice quotes about the fallout from last month’s landmark free speech decision in Citizens United v. F.E.C.: By a 5-to-4 vote, with Justice Thomas in the majority, the court ruled last month that corporations had a First Amendment right to spend money to support or oppose political candidates. “I found it fascinating that the people who were editorializing against it were The New York Times Company and The Washington Post Company,” Justice Thomas said. “These are corporations.”
Marc Faber Lashes Out – Again by Gwen Robinson - LewRockwell The deepening US debt trap is unnecessary. After his recent and widely disseminated quip on CNBC that “Obama makes Bush look like a genius”, Marc Faber is now offering some insights into how the US can get out of its “debt trap”. In his latest GloomBoomDoom market commentary, the irrepressible pundit concludes that the US has basically two choices: default on obligations or massively monetize US debts and reduce the debt through inflation. “In my opinion,” he declares, “additional massive monetization of debts is the most likely outcome”. And yet, “frantic monetization” lies at the root of the banking system’s ills, in Faber’s view . . .
Faber-World Economy Is Doomed
Faber-World Economy Is Doomed Part II
Obama's $6.3 Trillion Scam Is America's Shame Commentary by Jonathan Weil Feb. 4 (Bloomberg) -- Look through President Barack Obama's proposed 2011 budget, and you'll see a line calling for a $235 million increase in the Justice Department's funding to fight financial fraud. Lucky for them, the people who wrote the budget can't be prosecuted for cooking the government's books. Whether on Wall Street or in Washington, the biggest frauds often are the perfectly legal ones hidden in broad daylight. And in terms of dollars, it would be hard to top the accounting scam that Obama's budget wonks are trying to pull off now.
Taleb Says 'Every Human' Should Short U.S. Treasuries By Michael Patterson and Cordell Eddings Feb. 4 (Bloomberg) -- Nassim Nicholas Taleb, author of "The Black Swan," said "every single human being" should bet U.S. Treasury bonds will decline, citing the policies of Federal Reserve Chairman Ben S. Bernanke and the Obama administration. It's "a no brainer" to sell short Treasuries, Taleb, a principal at Universa Investments LP in Santa Monica, California, said at a conference in Moscow today. "Every single human being should have that trade."
Bonds jump on global stock selloff By Julianne Pepitone NEW YORK (CNNMoney.com) -- Bond prices rose Thursday as stocks sold off worldwide amid continued fears over foreign debt problems and an unexpected increase in U.S. jobless claims. What prices are doing: The benchmark 10-year note gained 24/32 to 98-1/32, pushing the yield down to 3.61% from 3.70% late Wednesday. Prices and yields move in opposite directions.
US banks back from the brink but mortgages still a problem Standard & Poor's Rating Services, which is maintaining its negative outlook on the industry, believes that in 2010 the US banking industry will, overall, show pretax profit margins of less than 1%, reflecting a fragile economic recovery, slumping business demand, a moribund housing market, and deteriorating asset quality across various loan categories. "We believe that smaller and regional banks-those most exposed to depressed local economies-will be most likely to succumb eventually to these conditions. Regulators might ultimately nudge many of them into the corporate arms of stronger competitors, as happened to approximately 140 such banks in 2009. But we think it's unlikely that any major bank (with more than $100 billion in assets) will fail this year."
The Financial Crisis Is Not Over By: Paul Craig Roberts - MarketOracle The global crisis is understood as a banking crisis brought on by the mindless deregulation of the U.S. financial arena. Investment banks leveraged assets to highly irresponsible levels, issued questionable financial instruments with fraudulent investment grade ratings, and issued the instruments through direct sales to customers rather than through markets. The crisis was initiated when the U.S. allowed Lehman Brothers to fail, thus threatening money market funds everywhere. The crisis was used by the investment banks, which controlled U.S. economic policy, to secure massive subsidies to their profits from a taxpayer bailout and from the Federal Reserve. How much of the crisis was real and how much was hype is not known at this time.
Rewards Abroad By: John Browne - GoldSeek President Obama's State of the Union message only serves to reinforce my forecast that investors will continue to find better returns in markets outside America and in currencies other than the U.S. dollar. Indeed, the reward gap may well increase. Nothing in the President's speech indicated willingness to do the hard work of cutting spending. Rather, he reiterated his commitment to a costly new healthcare entitlement and more spending on make-work programs. Only days later, his budget acknowledged that, even before factoring in the cost of his proposals, the federal government is unlikely to be in surplus for the foreseeable future. In response, Moody's has issued a warning that the United States' triple-A credit rating is not unassailable. In short, the trend set some ten years ago will continue.
Debt fears rattle market By Alexandra Twin NEW YORK (CNNMoney.com) -- Fears about the fallout from a growing debt crisis in Europe dragged on Wall Street Thursday, sending the market to its lowest close in three months, with stocks hit across the board. The Dow Jones industrial average tumbled 268 points, or 2.6%, closing at 10,002.26, its lowest point since Nov. 4. The blue-chip briefly dipped below 10,000 late in the day, falling to that level for the first time since early November.
Ex-BofA chief Lewis charged with fraud By David Ellis NEW YORK (CNNMoney.com) -- New York Attorney General Andrew Cuomo said Thursday it was bringing civil charges against senior Bank of America executives, including former company CEO Ken Lewis, for their role in the company's controversial purchase of Merrill Lynch. Separately, the Securities and Exchange Commission said it had struck a $150 million settlement agreement with BofA over its decision to pay billions of dollars in bonuses to former Merrill employees.
Bank of America E-Mails Show Lehman Was Buy Target By Linda Sandler Feb. 4 (Bloomberg) -- When Bank of America Corp.’s board met to approve the acquisition of an investment bank on Sept. 15, 2008, members thought they were going to buy Lehman Brothers Holdings Inc., not Merrill Lynch & Co., according to New York Attorney General Andrew Cuomo. The bank bought Merrill after examining its books for just 25 hours, Cuomo claimed. Shareholders approved the deal Dec. 5, 2008. The acquisition closed Jan. 1, 2009, after Merrill losses had increased by billions of dollars, a change the bank didn’t disclose before the shareholder vote, Cuomo said.
Four More Years of Ben Bernanke Tim Iacono - Seeking Alpha Ben Shalom Bernanke, Time Magazine's "Person of the Year", was sworn in for another four-year term as Chairman of the Federal Reserve yesterday in a subdued affair that had none of the pomp and circumstance of four years ago. Instead of a crowd that included President Bush, one cabinet member, two former Federal Reserve chairmen, and members of Congress yesterday's ceremony was a staff-only gathering where the only one in attendance who was not on the Fed payroll was Bernanke's wife Anna and the event barely made the news.
Banks concede reform is inevitable By Patrick Jenkins and Brooke Masters Paul Volcker and Barack Obama have either thrown the world into chaos or given the cause of global bank regulation new impetus – it depends on your point of view. But one thing is for certain: the twin US initiatives to derisk banks and tax them according to their size – the Volcker rule and the Obama levy as they have been dubbed – have seized the attention of bankers and regulators around the world. The US last month first made clear that it wanted to exact a levy of 0.15 per cent on any bank balance sheet over $50bn. Then it said that banks should no longer engage in what it felt were riskier practices – investing in hedge funds, private equity or proprietary trading, the archetypal casino-style betting of bank funds for a quick profit.
Chase Denied Loan Mods for Now Forbidden Reason Homeowners in Limbo by Paul Kiel - ProPublica On the Saturday before Thanksgiving, Lesa Herron of Santa Rosa, Calif., opened a letter from Chase Home Finance (PDF). She’d been denied a permanent modification under the federal government’s loan-mod program, Chase said, because “Your hardship is not of a permanent nature.” No other reason was given. For Herron, that was hard to understand. She was working two jobs and her mortgage payment still amounted to more than half of her income. She’d fallen two payments behind. If her money troubles were only temporary, it was news to her.
Million-dollar homes in California suffer further sales drop in 2009 The number sold in the state falls 23.8%, for a fourth year of decline in a row. By Alejandro Lazo - LA Times -- Sales of California homes priced at $1 million or more tumbled for a fourth consecutive year in 2009, according to a report released Thursday. The number of million-dollar-plus homes sold dropped 23.8% to 18,621 in 2009 from 24,436 in 2008, according to San Diego real estate research firm MDA DataQuick. The decline was the result of buyers holding back, a weak mortgage market for big loans and the drop in home prices over the last several years, dragging the value of many houses below the $1-million threshold, DataQuick said.
America - Innovate or Die! by Gordon Long - Safe Haven US innovation is plummeting faster than our Financial Markets did during the 2008 financial crisis! The future of America is presently in peril, not just because of the "banksters' shadowy ways, but because of a sputtering Innovation Engine that has had the fuel "choked off'. It has now gone "critical" and can no longer be left to only the carping of the academic community. The chart to the right from the Financial Times: "China scientists lead world in research growth" is frightening in its implications. It requires an immediate and serious congressional public policy response. Unfortunately most of those on the front lines are skeptical about Washington's ability to either recognize the gravity of the situation or legislate any meaningful and appropriate response.
You Cannot Buy Groceries with Your House By Michael J. Panzner - Financial Armageddon One of the many (dubious) assumptions that Wall Street rocket scientists made before the housing and credit bubbles burst centered on what mortgagors would do if the economy hit a "speed bump" (back then, of course, the conventional wisdom was that severe downturns had been eliminated by expert policymaking, reams of academic research, and the wisdom of the ages). Generally speaking, they believed that homeowners who ran into financial difficulties would behave in the same way that others had before them -- that is, they would make sure the monthly mortgage bill was among the first to be paid.
Borrowers pay credit cards before mortgages by Mathew Padilla - Mortgage Insider TransUnion today said borrowers, especially in California, continue to focus on credit card payments and ignore their mortgages. This is at least the company’s second study showing the same trend. The percentage of consumers current on credit cards and delinquent on mortgages first surpassed the percentage of consumers current on their mortgages and delinquent on credit cards in the first quarter of 2008. That earlier TransUnion study examined data between the third quarter of 2006 and the first quarter of 2008.
Card company results show waning credit card use By Eileen A J Connelly - Business Week Shoppers still reach for plastic at the checkout, but the card they grab most often these days is a debit card, not a credit card. That was spelled out Thursday in MasterCard Inc.'s fourth-quarter results. The payment processor posted a 23-percent profit leap, but its shares were beaten down as the numbers revealed further evidence of the fading use of credit cards, whether by choice or necessity. "People have been utilizing credit, obviously, to a much less extent," MasterCard Chief Financial Officer Martina Hund-Mejean said in an interview.
Jump in service disconnections sparks move by California The Public Utilities Commission votes to order providers to help their nonpaying customers keep the heat and lights on. By Marc Lifsher - LA Times -- Reporting from Sacramento - California regulators, reacting to a dramatic increase in service shut-offs, ordered electric and gas utilities Thursday to make greater efforts to help keep the lights and heat on for non-paying customers, especially those in poorer neighborhoods. Disconnections for low-income customers jumped 28% statewide from September 2008 to August 2009, compared with the previous 12 months, according to an independent arm of the Public Utilities Commission. The Division of Ratepayer Advocates' report speculated that widespread installation of so-called smart meters that allow service to be disconnected remotely may be a factor in the increased cutoffs.
Poof: Another 800,000 jobs disappear By Chris Isidore NEW YORK (CNNMoney.com) -- As bad as the government's jobs readings numbers have been during the Great Recession, we'll soon find out the real situation likely was worse. Job losses during the recession may have been underestimated by close to a million jobs. So instead of employers cutting just over 7 million jobs from their payrolls since the economic downturn began in December 2007, it's expected that the Labor Department's new estimate will be a loss of 8 million jobs.
Battle brews over hourly jobs By Jessica Dickle NEW YORK (CNNMoney.com) -- The next time you're asked if you want fries with that, you may be surprised at who's behind the counter. That's because many out-of-work experienced professionals with no other options are taking jobs, including some hourly-wage positions, that would otherwise go to younger workers with few skills. As a result, the unemployment rate among 16-24-year-olds has soared, peaking at a record high of 19.2% in October.
How to Fix Health Care After Massachusetts By Rep. Dennis Kucinich - TruthDig We should pay careful attention to the message of the Massachusetts election. And that message is to focus on the economy. To make sure that we have jobs programs that can put millions of people back to work. To make sure that we have programs to help those one-out-of-every-three Americans, who is upside down on their mortgages, to save their homes. To make sure we protect people’s investments, their savings and their retirement security. The verdict in Massachusetts was a verdict on the overall economy. But it was also a commentary on how the entire health care debate was flipped upside down by insurance interests who were able to intervene so that the final product that was offered out of the Senate was nothing more than a sell-out to the insurance industry.
Anthem Blue Cross dramatically raising rates for Californians with individual health policies Policyholders are incensed over rate hikes of as much as 39%, which they say come on top of similar increases last year. State insurance regulators say they'll investigate. By Duke Helfand - LA Times -- California's largest for-profit health insurer is moving to dramatically raise rates for customers with individual policies, setting off a furor among policyholders and prompting state insurance regulators to investigate. Anthem Blue Cross is telling many of its approximately 800,000 customers who buy individual coverage -- people not covered by group rates -- that its prices will go up March 1 and may be adjusted "more frequently" than its typical yearly increases. The insurer declined to say how high it is increasing rates. But brokers who sell these policies say they are fielding numerous calls from customers incensed over premium increases of 30% to 39%, saying they come on the heels of similar jumps last year.
Unexpected Rise in U.S. Jobless Claims AP via NY Times WASHINGTON (AP) - The number of newly laid-off workers filing initial claims for jobless benefits rose unexpectedly last week, the Labor Department said Thursday. And a second report by the Labor Department showed that people with jobs worked harder in the fourth quarter. In the jobless filings report, the agency said that new claims for unemployment insurance rose by 8,000 to a seasonally adjusted 480,000. Wall Street economists had expected a drop to 460,000. The rise is the fourth in the five weeks. Most economists hoped that claims would resume a downward trend that was evident in the fall and early winter.
Does Anyone in Washington Know What Needs to Be Done to Create Jobs? By: Paul L Kasriel - Market Oracle -- This is a question that I often get as I speak to groups around the country. Based on the ADP monthly survey of employment, small- and medium-sized firms (less than 500 employees each) are the fount (or black hole, as of recent months) of jobs in the U.S. economy (see Chart 1).So, rather than asking Washington career politicians what it takes to create more jobs, why don't we poll small businessmen and businesswomen?
Unemployment filings head higher By Blake Ellis NEW YORK (CNNMoney.com) -- The number of Americans filing for initial unemployment insurance rose last week, the government said Thursday. There were 480,000 initial jobless claims filed in the week ended Jan. 30, the Labor Department said in a weekly report. This is the highest level since Dec. 12 and up 8,000 from an upwardly revised 472,000 the previous week. Economists were expecting claims to drop to 455,000, according to a consensus estimate from Briefing.com.
Government-owned GMAC loses $5 billion in 4Q By Dan Strumpf - AP Auto Writer NEW YORK - Home and auto lender GMAC Financial Services said Thursday it lost $5 billion in the last three months of 2009, as losses from its mortgage operations kept the company in the red for another quarter. GMAC, which is owned by the federal government, is still working to sell its troubled home lending business, ResCap. Mortgage operations overall lost more than $4 billion during the quarter, and GMAC $3.3 billion charge related to its efforts to sell the unit.
GMAC Reports Record Loss on Home Mortgage Defaults By Dakin Campbell Feb. 4 (Bloomberg) -- GMAC Inc., the auto and home lender controlled by the U.S. government, posted a record quarterly net loss, driven by the declining value of mortgage assets. The fourth-quarter loss from continuing operations was $3.9 billion, compared with profit of $7.7 billion a year earlier, Detroit-based GMAC said in a statement. GMAC’s net loss was $4.95 billion after writing down mortgage holdings. For the year, GMAC swung to a net loss of $10.3 billion from a $1.87 billion profit.
U.S. Starts Inquiry Into Brake Problems on Prius By Martin Fackler , Hiroko Tabuchi, Micheline Maynard - NY Times TOKYO - Safety regulators in Washington announced Thursday that they would open an investigation into the braking problems of the 2010 Prius hybrid, a few hours after Toyota said there were problems with the car's anti-lock braking system and left open the possibility of a recall.
Prius brakes: Toyota knew, didn't tell you by Peter Valdes-Dapena NEW YORK (CNNMoney.com) -- Toyota has known about brake problems in its popular Prius cars for some time, going so far as to fix it in new production vehicles, but has kept Prius drivers in the dark about the problem until the Japanese government called for an investigation. In the U.S., the National Highway Traffic Safety Administration announced Thursday that it is launching a formal investigation into the Prius brake problems, the first step on the road to a possible recall..
Toyota recalls total 8.1 million vehicles by Peter Valdes-Dapena NEW YORK (CNNMoney.com) -- The total number of vehicles Toyota Motor Corp. has had to recall for gas-pedal related issues now comes to 8.1 million, the carmaker confirmed Thursday. That figure may grow after the National Highway Traffic Safety Administration announced Thursday that it is launching a formal investigation into braking problems in the popular Toyota Prius.
The Tea Party Movement by Siddhartha Mahanta - LewRockwell Ron Paul on what it all means. In 2008, independents frustrated with establishment politics found a hero in Texas Republican Ron Paul. Warning voters about the dangers of an overstretched and overcommitted government, Paul provided today's Tea Partiers with a blueprint for grassroots success. Republicans like Reps. Michele Bachmann of Minnesota and Mike Pence of Indiana, and Kentucky Senate candidate Rand Paul – Ron's son – have embraced the Tea Party movement. NationalJournal.com talked to Ron Paul last week about the energy of today's grassroots movements and the Republican Party's evolving relationship with the Tea Partiers.
Ron Paul son Rand Paul The Tea Party Candidate in 2010 - FOXNews.com with Judge Napolitano
Running for Senate, Rand Paul lights a fire under Kentucky GOP By Jason Horowitz - Washington Post LOUISVILLE -- Rand Paul believes he was born to lead the anti-establishment movement sweeping the GOP. "I would say if there is a candidate who comes from the movement, who has never been a politician," Paul said, "I'm it." While Republicans across the country, from Scott Brown in Massachusetts to Marco Rubio in Florida, have succeeded in tapping into the anger of the "tea party" crowd, Paul, the third son of the anti-tax icon and Texas congressman Ron Paul, is a product of it. The insurgent GOP primary candidate, who wants to succeed retiring Sen. Jim Bunning in Kentucky, is being heralded as the second coming by a constituency long suspicious of government, protective of privacy and assured of America's chosen-people status.
US missionaries charged with child kidnapping in Haiti By Ben Quinn and agencies - guardian.co.uk Ten American missionaries arrested in Haiti for trying to take 33 children out of the country after last month's earthquake have been charged with child kidnapping and criminal association Ten American missionaries arrested in Haiti for trying to take 33 children out of the country after last month's earthquake were charged today with child kidnapping and criminal association. The group, most of whom are members of an Idaho-based church group, were sent back to jail today after a closed court hearing in the Haitian capital, Port-au-Prince. Their lawyer, Edwin Coq, said that the judge had found sufficient evidence to file charges against his clients, who were arrested last Friday at Haiti's border with the Dominican Republic while trying to take the busload of children out of the country without documents or permission.
Dubai discovers new oil field, a first in decades By Adam Schreck DUBAI, United Arab Emirates - Dubai's government, under pressure to repay billions of dollars in debt, said Thursday it has discovered a new offshore oil field - the first such find by the city-state in decades. The media office of the sheikdom's ruler did not provide details such as the size of the field or preliminary estimates of its production capacity, making it impossible to gauge the effect on Dubai's strained budget. An e-mailed statement from the media office announcing the find said the new deposit is located east of the existing Rashid oil field.
Pennsylvania State Capital Mulls Bankruptcy as a Budget Option By Dunstan McNichol Feb. 4 (Bloomberg) -- Harrisburg, the capital of Pennsylvania, will consider Chapter 9 bankruptcy protection along with tax increases and asset sales as options to address $68 million in debt service payments due this year, the chairwoman of a City Council committee said last night. Every option, including tax and fee increases, bankruptcy and a state takeover through Pennsylvania's Act 47 municipal oversight program will be considered, said Susan Brown-Wilson, chairwoman of the Budget and Finance Committee, which began a week of hearings last night to consider a 2010 spending plan.
THE RIGHT'S RESPONSE TO THE LEFT'S RESPONSE TO THE RIGHT.... By Steve Benen - Washington Monthly -- We learned late last week that some prominent Republican officials are in the process of creating something called the American Action Network. Led by luminaries such as Norm Coleman, Jeb Bush, Haley Barbour, and Karl Rove -- some of the same GOP leaders involved in the "rebranding" debacle of last year -- the group was created to ... well, that part was unclear. We were told the American Action Network was poised to get moving, but no one knew why.
G.O.P. Group to Promote Conservative Ideas By Jackie Calmes - NY Times WASHINGTON - A group of prominent Republicans is forming an organization to develop and market conservative ideas, copying a successful Democratic model and hoping to capitalize on the fund-raising and electioneering possibilities opened up by a recent Supreme Court ruling. The organizers, including former Senator Norm Coleman of Minnesota and Douglas Holtz-Eakin, the senior policy adviser to Senator John McCain's presidential campaign, describe their emerging American Action Network as a center-right version of the Center for American Progress, the six-year-old group for progressive policies that was founded by John Podesta, former chief of staff to President Bill Clinton and an informal adviser to President Obama.
Nouriel Roubini in Davos, Crisis not over, Eurozone and others towards disaster & economic collapse
France and Germany to unveil 10-year plan by Valentina Pop EUOBSERVER / BRUSSELS - Angela Merkel and Nicolas Sarkozy on Thursday (4 February) are set to unveil their own economic and political strategy document, the "Franco-German Agenda 2020," in an attempt to put some substance in the widely advertised but not always smoothly working partnership between the EU's two major economies. The plan, including 80 separate measures, ranges from economic and fiscal initiatives to common school books and simpler rules for Franco-German marriages. It is set to be published at the end of a joint ministerial council meeting of the two countries, chaired by both Mr Sarkozy and Ms Merkel in the Elysee palace. The two leaders have in the past disagreed on several issues, especially on economic recovery. Mr Sarkozy supported an EU-wide stimulus package, while Ms Merkel believes this should be done at the national level.
The race is on for Greece before the ECB exits By Gillian Tett Some investors are now betting on European debt defaults A few years ago, Warren Buffett famously observed that it is only when the tide goes out, that you can see who is swimming naked. It is a potent adage now. In recent months there has been much speculation about what might happen when central banks start to implement “exit strategies”. Now we have a few clues. The Bank of England has just announced that it is freezing its quantitative easing programme, spurring debate about the outlook for gilts. However, to my mind, one of the most revealing sagas in relation to the exit strategy debate lies with the drama that has recently developed around the Greek debt world.
Greece facing strict surveillance from Brussels by Andrew Willis EUOBSERVER / BRUSSELS - The European Commission has said it fully supports the Greek government's deficit-cutting plan announced last month, but outlined a strict surveillance programme at the same time to ensure targets are met. The EU executive body also issued Greece with recommendations under the bloc's excessive deficit procedure, and used Article 121 of the Lisbon Treaty for the first time to push for badly needed structural reforms. "We are endorsing the Greek programme, we are giving confidence and supporting the Greek authorities," said outgoing EU economy commissioner Joaquin Almunia, in Brussels on Wednesday (3 February)
Europe Backs Greece, but Hurdles Lie Ahead by: Mark Scott, Business Week Debt-ridden Greece got a bit of a boost on Feb. 3 when the European Commission approved the country's plan to bring its budget deficit problems under control. In 2009, Greece logged Europe's largest deficit, at 12.7% of GDP, but now it aims to lower the figure to just 2.8% by 2012. To meet the target, the country's prime minister, George Papandreou, unveiled ambitious belt-tightening plans on Feb. 2, ranging from a freeze in government workers' pay to tax hikes on gasoline and alcohol.
Europe fears rock global markets By David Oakley, Tony Barber, Ralph Atkins, Aline van Duyn -FT Worldwide flight to dollar and US Treasuries -- Growing fears over the health of Europe’s weakest economies and the outlook for US employment rocked global markets on Thursday, sparking sharp falls in risky assets ranging from equities to oil and gold. The rout sent investors fleeing to the safety of US government debt, boosting the dollar to its highest level against the euro in more than eight months and sending US Treasury prices higher only days after the Obama administration forecast a $1,556bn deficit for 2010.
Trichet Says ECB 'Confident' Greece Can Cut Deficit By Gabi Thesing and Jana Randow Feb. 4 (Bloomberg) -- European Central Bank President Jean- Claude Trichet said he's confident Greece can get its budget deficit under control and signaled officials have no plans to raise their key interest rate from a record low of 1 percent. "We expect and we are confident that the Greek government will take all the decisions that will permit them to reach that goal" of cutting the deficit below the European Union's limit, Trichet said at a press conference in Frankfurt. Earlier, he said that the ECB's current interest rate is "appropriate."
Spain presents deficit plan to Brussels by Andrew Willis - EUObserver The Spanish government presented its stability programme to the European Commission on Wednesday (3 February), outlining a timetable to rein in an excessive deficit that reached 11.4 percent of gross domestic product last year. Under the plan, Spain will aim to cut its budget deficit to 9.8 per cent of GDP this year, 5.3 per cent of GDP by 2012, and eventually fall in line with EU limits of 3 percent by 2013. Last Friday the Socialist government of Prime Minister Jose Luis Rodriguez Zapatero agreed to some €50 billion worth of savings by 2013. Despite the clawbacks, the stability programme, part of an economic reporting system under EU rules, forecasts Spain's debt-to GDP ratio will continue to rise, reaching 74.3 percent in 2012.
Portugal near political crisis over debt By Peter Wise in Lisbon -FT Portugal moved towards a political crisis on Thursday night as its finance minister appealed to opposition parties not to defeat the minority Socialist government over a regional finance bill that he said would undermine the country’s international credibility. In a televised address, Fernando Teixeira dos Santos said opposition proposals to allow the Portuguese islands of Madeira and the Azores to increase their debt would have “grave consequences for Portugal’s public accounts” and send “the worst possible message” to financial markets.
Nato strategy to look at EU relations, says Albright by Valentina Pop EUOBSERVER / BRUSSELS - Relations between the EU and Nato are to be included in the new strategic concept for the military alliance currently being developed by a group of experts led by former US secretary of state Madeleine Albright. "We need to maximise collaboration with the EU and make more use of political consultation," Ms Albright told MEPs in Brussels during a special hearing on Wednesday (27 January). Ms Albright was the US' foreign policy supremo during 1997-2001 when Nato launched its first military action in the former Yugoslavia. The 72-year old has now been appointed to chair an expert panel tasked to advise Nato secretary general Anders Fogh Ramussen on an updated "strategic concept" for the military alliance.
Dalai Lama to meet Barack Obama as US relations with China worsen By Ewen MacAskill, Tania Branigan - guardian.co.uk President plans tougher line over trade surplus while Beijing refuses to back down over Iran sanctions The sudden deterioration in US-Chinese relations is set to accelerate after the White House confirmed today that Barack Obama will meet the Dalai Lama in Washington later this month in defiance of Beijing. The White House spokesman, Robert Gibbs, did not set a date, but the Dalai Lama's secretary has said he will be in Washington on 17 and 18 February. Beijing claims Tibet is part of China, views the Dalai Lama as a troublemaker and has lobbied firmly against the visit.
Russian Economy Compared to Chinese Toy Pravda.ru The Russian economy has been having dizzy ups and downs during the recent years, which made an author of French Le Figaro newspaper compare it to the yo-yo toy. It had a six-percent growth in 2008 and dropped by 7.9 percent in 2009. The main reason for such a fluctuation is Russia's dependence on raw materials, presumably crude and natural gas. A 20-dollar drop in the price on one barrel of oil triggers a 4-percent reduction for the Russian GDP, Natixis's Francois Theret told the newspaper. A slide in prices on Urals oil from $243 per barrel in July 2008 to $32 in December resulted in the avalanche-like distribution of the economic crisis in Russia during the first half of 2009.
Turkish girl, 16, buried alive for talking to boys By Robert Tait in Istanbul - guardian.co.uk Death reopens debate over 'honour' killings in Turkey, which account for half of all the country's murders Turkish police have recovered the body of a 16-year-old girl they say was buried alive by relatives in an "honour" killing carried out as punishment for talking to boys. The girl, who has been identified only by the initials MM, was found in a sitting position with her hands tied, in a two-metre hole dug under a chicken pen outside her home in Kahta, in the south-eastern province of Adiyaman.
Iran Opposition Leaders Urge Rally on Anniversary By Nazila Fathi - NY Times Throwing up a challenge to the increasingly violent tactics of Iran's ruling elite, the country's two leading opposition figures are urging protesters to defy the government and take to the streets in an antigovernment rally on Feb. 11. The government announced on Tuesday that it would execute nine protesters; two were hanged last week. The prosecutor also asked Wednesday for the death sentence for a 24-year-old protester, having charged him with moharebeh, or waging war against God, for "throwing rocks during protests," the news agency ISNA reported.
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