Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Fri 04.30.2010
It's For Your Own Good By Nancy Morgan - CapitolHillCoffeeHouse.com Since I’ve been otherwise occupied making a living, it’s reassuring to know that my government is looking out for me. In just the last month, our tireless public servants have proposed numerous measures that will make my life better and more worry free. No longer will I have to worry about drug addicts being able to rig a urine test. The Senate is set to vote on a measure that would make it illegal to sell fake urine for the purpose of falsifying a drug test. Whew.
U.S. Said to Open Criminal Inquiry Into Goldman By LOUISE STORY - NYTimes.com Federal prosecutors have opened an investigation into trading at Goldman Sachs, raising the possibility of criminal charges against the Wall Street giant, according to people familiar with the matter. While the investigation is still in a preliminary stage, the move could escalate the legal troubles swirling around Goldman. The Securities and Exchange Commission, which two weeks ago filed a civil fraud suit against Goldman, referred its investigation to prosecutors for the Southern District of New York, which has now opened its own inquiry.
Federal criminal probe into Goldman trading (Reuters) - Federal prosecutors are conducting a criminal probe into whether Goldman Sachs Group Inc or its employees committed securities fraud in connection with its mortgage trading, the Wall Street Journal reported on its website on Thursday. A spokeswoman for the office of the Manhattan U.S. Attorney said she could "neither confirm nor deny" any Goldman investigation. Goldman was not available to comment. The U.S. Securities and Exchange Commission has already filed a civil fraud lawsuit against Goldman, charging that it hid vital information from investors about a mortgage-related security.
Goldman set to settle SEC fraud case soon (Reuters) - Goldman Sachs may soon settle its fraud case with the U.S. regulator, the New York Post reported on Thursday, opting to end a legal fight rather than endure a repeat of the public flogging it received this week. The Post report, citing sources familiar with the matter, said Wall Street's top investment bank was mulling closing the fraud case with the U.S. Securities and Exchange Commission (SEC) to limit damage to its reputation. "It's almost a certainty that there will be a settlement," the paper quoted a source as saying.
SEC likely to win against Goldman Eliot Spitzer, Former New York Governor and Attorney General, says the SEC will likely be successful in its fraud charges against Goldman Sachs
Feldstein Says Greece Will Default and Portugal May Be Next By Simon Kennedy and Thomas R. Keene April 29 (Bloomberg) -- Harvard University Professor Martin Feldstein said Greece will eventually default on its bonds and other euro-area nations may follow, most probably Portugal. “Greece is going to default despite all the talk, despite the liquidity package,” Feldstein, who warned almost two decades ago that the euro would prove an “economic liability,” said in an interview with Tom Keene on Bloomberg Radio today.
Spain, Portugal crisis adds glitter to gold By Geena Paul LONDON (Commodity Online): It seems gods of luck and tragedies are helping gold out of the way now. One after another the world is witnessing economic catastrophes and the yellow metal is making the maximum out of all these disasters. After the US sub-prime crisis, Dubai debt disaster and Greek economic tragedy, the new imbroglio boosting gold is Spain and Portuguese debt situation. In fact, the recent Greek debt crisis is slowly spreading to almost all European countries and causing panic among investors as they fear another economic slump in the coming days. This fear has helped gold prices to gain as more and more investors started pumping in money to gold as a safe haven investment.
Spain is in Pain by Chris Vermeulen - FinancialSense.com US Dollar & Gold Are Safe Havens It’s been an interesting week with Spain being downgraded as Europe debt crisis widens. This has investors looking at the US dollar in a new light thinking that maybe it’s not that bad of an investment after all. This sent the US Dollar higher along with the price of gold so far this week. The past 7 days we have seen both the US Dollar and Gold rise together which is not something that happens often. With financial crisis’s popping up around the world I think the US dollar and gold will continue to strengthen (with corrections along the way). I think it will take another 12-24 months before another wave if issues arise in the financial markets and until then we just continue to focus mainly on buying the dips and corrections with the occasional short play in the larger corrections.
Eurozone Debt Crisis the 'Canary in the Coalmine' as U.S. Deficits Soar Gold: Gold finished at its highest level since early December and had its fourth consecutive day of gains Wednesday as a debt ratings downgrade for Spain and surging credit spreads created new fears of the eurozone sovereign debt crisis spreading and financial contagion. Gold for June delivery gained $9.60/oz, or 0.8%, to $1,171.80 an ounce on the Comex division of the New York Mercantile Exchange. Gold remained near record nominal highs in pounds, euros and Swiss francs. Some of the gains were given up in Asian trade overnight prior to gold rising again in all currencies in early European trade this morning. The US dollar and British pound have fallen and this is seeing gold rise again today
Asian markets wary after Spain downgrade Asian stock markets were little changed on Thursday after two days of selling, with investors treading cautiously after Spain became the third European country this week hit with a downgrade of its debt. AP - The dollar, meanwhile, gained against the euro and fell against the yen, and oil prices slipped toward $83 a barrel. The European debt crisis spread on Wednesday when Standard & Poor's lowered its credit rating for Spain amid concerns about the country's growth prospects following the collapse of a construction bubble.
Greece is just the 'tip of the iceberg', Nouriel Roubini warns Telegraph.co.uk Greece is just the "tip of the iceberg” of a sovereign debt crisis that has the potential to derail a global recovery, Nouriel Roubini has warned. Professor Roubini, the New York-based academic who was one of the few to anticipate the scale of the financial crisis, told a panel in California that the buildup of debt is likely to lead to countries defaulting or resorting to inflation to ease the burden on their populations. “While today markets are worried about Greece, Greece is just the tip of the iceberg,” Roubini told the Milken Institute Global Conference in Beverly Hills, California. "The thing I worry about is the buildup of sovereign debt.”
Sovereign Default - Who Is at Fault? I am watching the Greek crisis as it takes its painful course, and have noted that there are some views which seem to suggest that Germany has an obligation to rush to the rescue. The following Guardian article is typical, though the excerpt below does not really capture the overall sentiment of the article: After days and days of hesitation and apparent indecision, when speaking to the audience at the rally in Bocholt, Merkel played the populist card. We're right to tell the Greeks: you have to save money, you have to be candid and you have to work on your honesty, otherwise we can't help you, Merkel said.
Geithner: market should have more say on yuan rate David Lawder - Reuters.com (Reuters) - It is important for China to allow the market to play a bigger role in setting the value of its currency, U.S. Treasury Secretary Timothy Geithner said on Thursday. The Obama administration has been pressing China for months to allow the yuan to resume appreciation, with some economists estimating the currency is as much as 40 percent undervalued, giving Chinese firms a huge competitive advantage.
European Debt Crisis Right Around the Corner? U.S. Housing Collapse Redux on the Way? I must admit folks that I am in awe of what I see each day in the financial markets. It's also very hard to make any sense of any of it when it comes to investing. Things that would have been considered tinfoil 4 years ago now have become reality. I mean heck: If anyone would have told me three months ago that Goldman Sachs (GS) would be accused of fraud I would have laughed in their face. Yet (minus Tuesday's hiccup), the market continues to march higher despite being surrounded by seemingly endless economic landmines that threaten to destroy our financial system.
Marc Faber Says It's Time to Kick Greece Out of EU
European Debt Woes Complicate China’s Money Moves By KEITH BRADSHER - NYTimes.com HONG KONG — Spreading problems in Europe’s sovereign debt markets pose potential challenges for China, which has been stepping up its investments in European government bonds and relies on Europe as its biggest export market. The turmoil that Europe’s difficulty has caused in financial markets already appears to have caused tens of billions of dollars in paper losses in China’s foreign exchange reserves. And the problems may complicate the timing of an expected Chinese move to break the informal peg of the Chinese renminbi to the dollar, Chinese and Western economists and bankers said on Thursday.
Gold hits four-month high By Kara Gammell - telegraph.co.uk The gold price has risen to a four-month high after Standard & Poor's, the rating agency, lowered Greece and Portugal's credit ratings, spurring demand for the metal. The price of gold later fell back after speculation that economic growth would erode demand for the precious metal as an alternative asset. In sterling terms, gold hit a new record of £767. S&P's downgrade means certain investors will no longer be allowed to buy Greek debt and could also curb Greece's access to vital European Central Bank funds. Soon after Portugal's downgrade, gold surged – rising from $1,145 an ounce to $1,172.60 – on safe haven demand. It rose strongly in dollars but by even more in all other major currencies, except the yen, which was strong yesterday despite increasing concerns about the Japanese fiscal position.
Gold, Silver, Palladium True Bull Market by Sol Palha - FinanacialSense.com The injuries that befall us unexpectedly are less severe than those which are deliberately anticipated. Marcus T. Cicero, 106-43 BC, Great Roman Orator, Politician All the precious metals are behaving extremely well in the face of a stronger dollar; the standout player is Palladium. Palladium has refused to buckle under the face of a stronger dollar and instead continues to put in a series of new highs. This is what a true bull market looks like. Gold has refused to put in a new 6 month low even though the dollar continues to trend higher and has put in several 11 month new highs and will soon most likely put in a series of new 52 week highs. This action suggests that once this consolidation/corrective phase is over, the odds of the entire precious metals sector exploding upwards are rather high.
‘Gold bull at $2100 is a severe inflation booster’ By Jordan Roy-Byrne - CommodityOnline.com Since early 2009 we’ve written about the super-bullish long-term cup and handle pattern in Gold. It dates back to 1980 and has a logarithmic target of about $2,100. We noted that previous cup and handle patterns in Gold all reached their logarithmic target. We expect that this move to $2,100 will be the recognition move that awakens the masses to the Gold bull market and the reality of severe inflation in the near future. Speaking of the near future, the relative strength of Gold in the face of a strong US dollar (or weak Euro) is one big hint that this recognition move is around the corner. We’ve noted this before and it is important to explain to new readers. Gold priced in foreign currencies has been leading Gold in US$ terms. It is true for the entire bull market and is quite evident in just the past few years.
Gold and ‘The’ Parabolic Peak by Dudley Baker - FinancialSense.com Frequently we are told that gold will go to $2,000, $3,000 or more. We will not get into all of the arguments of attempting to arrive at a reasonable price based on supply/demand, inflation/deflation, etc. but rather to see if there is a pattern we can detect from reviewing some historical charts. Sometimes we hear in the press that gold is in a bubble or has gone parabolic. What does all of this mean to investors and how do we make decisions based upon these statements?
Get Prepared For Massive Launch by Neil Charnock - FinancialSense.com We have been looking at global trends and the debt markets very carefully this year so as to remain prudent about our views on the direction of gold and the Australian gold sector. This may seem like a long bow to draw however the thigh bone is connected to the knee bone when it comes to global markets and capital flows. We specialize on coverage of gold and the Aussie gold stocks that make up the Australian gold sector which is one of the important gold share markets due to our high level of gold production and another key reason I will get to shortly. Another important part of our work is on the currencies due to the importance of the AUD to our gold sector and also for our international clients. We have even taken on a leading Fx broker as an advertiser due to the importance of Fx for international capital flows at this point in history.
The Ultimate Currency Hedge by Adrian Ash Nothing works like gold when you need to hedge against your own currency... WEDNESDAY'S NEWS that, at last, Standard & Poor's has caught up with the bond market – and the steady trickle of fleeing bank deposits – by downgrading Spanish debt had a marked effect on the Euro. So did Tuesday's downgrade to "junk status" of Greece's government bonds. And the cut to Portugal's credit rating, too. It all had a marked effect on gold as well, not least versus the Euro, but also against the US Dollar and Japanese Yen – apparently the only beneficiaries of "Ebola contagion" in Europe...
Gold scores full while Dow a dismal zero By Hubert Moolman - CommodityOnline.com It seems that gold and the Dow have an agreement regarding the number 10. This number has acted like a “golden ratio” in that things really start to happen before or after the Dow/gold ratio breaches 10, either way. 10 out of 10 for Gold In Jan 1973 the Dow peaked at 1067, a level it did not managed to surpass until after gold peaked in 1980. In that same year gold bottomed at about the $90 level just after it made a peak close to the $130 level in the same year. Also in 1973 the Dow/gold ratio managed to go below 10 for the first time since it peaked in the middle of the 60’s at about a ratio of 27. At the end of 1973 it retested the 10 level and from there zoomed down to bottom at about the 3.2 level the very next year. From that bottom in 1973 gold doubled in a matter of less than 6 months.
The Economic Policy Error Behind the Stock Market Rally and the Next Phase of the Financial Crisis JESSE'S CAFÉ AMÉRICAIN "The 20th century has been characterized by three developments of great political importance: The growth of democracy, the growth of corporate power, and the growth of corporate propaganda as a means of protecting corporate power against democracy." Alex Carey The strategy of the Bernanke Federal Reserve and of the Obama Administration's economic team is fairly clear: prevent the bank failures of the 1930's by propping up the biggest banks with huge infusions of publicly subsidized capital, and hope that they start lending again as the economy recovers. It is a variation of the 'trickle down' theory of economics adjusted by the perceived Fed policy errors of the first Great Depression, with little from the New Deal programs.
The 800 LB Gorilla in the Financial Reform Bill by Joel Skouse - FinancialSense.com The lackluster Republican opposition to Senator Dodd’s Financial Reform bill is focused on whether or not the Democratic proposal allows for or prohibits additional bailouts. A secondary hot topic is the supposed derivative limitations. Frankly, these are both red herrings. They serve to mask an even larger danger that no one is talking about: a huge new government agency that will control all financial institutions in the US—and not just the "too big to fail" ones. It’s called the Financial Institutions Regulatory Administration (FIRA), and its authority absorbs and supersedes every other banking, thrift and stock market regulatory agency including the SEC—though it technically doesn’t actually eliminate any agency (as we might expect of government).
The Fed’s Hollowing Out Of US Banks by Daniel R. Amerman, CFA - FinancialSense.com Overview Have the Federal Reserve’s unprecedented market and banking interventions fundamentally weakened America’s banks? In this article, we will illustrate how the Federal Reserve has been hollowing out the US banking system. We will show how the Fed has been creating a banking industry shell that looks strong on the surface, but is increasingly empty beneath that facade, with less and less economic strength, and an ever greater reliance on the Federal Reserve’s monetary creation ability.
Bob Prechter Points Out The Many Signs Of Deflation by Editorial Staff - FinancialSense.com Yes, You Heard Us Right Everywhere you look, the mainstream financial experts are pinning on their "WIN 2" buttons in a show of solidarity against what they see as the number one threat to the U.S. economy: Whip Inflation Now. There's just one problem: They're primed to fight the wrong enemy. Fact is, despite ten rate cuts by the Federal Reserve Board to record low levels plus $13 trillion (and counting) in government bailout money over the past three years -- the Demand For and Availability Of credit is plunging. Without a borrower or lender, the massive supply of debt LOSES value, bringing down every exposed investment like one long, toppling row of dominoes. This is the condition known as Deflation.
Watching and Waiting, the U.S. Defers to Europe on a Debt Crisis By SEWELL CHAN - NYTimes.com THE United States is the largest shareholder in the International Monetary Fund and has played a forceful, interventionist role in financial crises since the early 1990s, in countries like Mexico, South Korea, Russia and Argentina. But as Europe gropes for a solution to a debt crisis that threatens to spread from Greece to Portugal and Spain, American officials have been resolutely reticent. “There’s a sense in the Obama administration that it’s Europe’s responsibility to straighten out problems in the euro zone,” said Randall W. Stone, a political scientist at the University of Rochester and an authority on the I.M.F. “I suspect that any kind of overt interference wouldn’t be appreciated very much.”
U.S. banks not worried about Greece - yet By Chavon Sutton NEW YORK (CNNMoney.com) -- The debt crisis in Greece is unlikely to have an immediate impact on U.S. banks, analysts said Thursday, but contagion to the rest of Europe could prove problematic. U.S. banks have about $176 billion of exposure to the troubled so-called PIIGS countries - Portugal, Ireland, Italy, Greece and Spain - according to a recent report from Barclays Capital, citing data from the Federal Financial Institutions Examinations Council.
Sino-French ties back on track By Ding Qingfen, Ai Yang and Zhang Haizhou (China Daily) Hu will visit France in fall; leaders hold talks on Iran, "New Monetary Order" BEIJING - China and France on Wednesday pledged to draw a line under past tensions and breathe new life into their relationship by working together on issues from Iran to global monetary policy. In a joint appearance before the media after their talks, President Hu Jintao said his French counterpart Nicolas Sarkozy's second state visit to China had "opened a new page" in bilateral relations. Hu also said he will visit France in the autumn, indicating Sino-French relations are back on track.
Goldman Scrutinized by Prosecutors Reviewing SEC Case By Justin Blum and David Glovin April 29 (Bloomberg) -- Federal prosecutors in New York have been examining transactions by Goldman Sachs Group Inc., accused of fraud by U.S. securities regulators, to determine whether to pursue a criminal case, according to two people familiar with the matter. The federal review, which lawyers say is common in such a high-profile case, is being done by the U.S. attorney in Manhattan, said the people, who weren’t authorized to comment and spoke on condition of anonymity.
Goldman and Tourre solidarity might not last By Stephanie Kirchgaessner in Washington - FT.com It is a reality that must make Lloyd Blankfein, chief executive of Goldman Sachs, grimace. The bank’s ability to defend itself against civil fraud charges brought by the Securities and Exchange Commission appears to be linked to the fate of Fabrice Tourre, a 31-year-old trader who once boasted in e-mails that he was selling complex financial products to “widows and orphans”. If Mr Tourre, who has also been charged with fraud, can beat the charges, so can Goldman.
The Disconnect Between Wall Street and Main Street One of the most common questions that I receive goes something like this: “Why should I be investing in the stock market while the economy is still on shaky ground?” This is certainly a reasonable question. After all, U.S. unemployment remains very high, the global real estate market is soft, taxes are rising, countries in Europe are on the verge of bankruptcy, the State of California is basically insolvent, and I could go on and on. So the question that begs to be asked is how, in the face of all these headwinds, can the stock market continue to head higher? How can Wall Street surge while Main Street suffers? Disconnect
Obama to nominate 3 new Fed governors By Hibah Yousuf NEW YORK (CNNMoney.com) -- After months of speculation, President Obama finally named names on Thursday, saying who he plans to nominate to the Federal Reserve's board of governors. Obama will nominate San Francisco Federal Reserve Bank President Janet Yellen to serve as vice chairman of the central bank, the White House said on Thursday.
United and Continental near merger deal By Hibah Yousuf - CNNMoney.com EW YORK (CNNMoney.com) -- Continental Airlines Inc. and UAL Corp.'s United Airlines are nearing a deal to consolidate into the world's largest airline, the Wall Street Journal reported Thursday. The commercial carriers' boards of directors are expected to discuss the negotiations through the weekend and announce the merger on Monday, said the Journal. The union would allow the company to overtake Delta Air Lines, which merged with Northwest Airlines in 2008, as the world's biggest airline.
Vermont House passes health reform bill, 91-42 The Associated Press - Brattleboro Reformer MONTPELIER - The Vermont House has passed a health reform bill that includes designing a single-payer system. By a vote of 91-42 Friday, the House passed a bill with two major sections. One calls for expanding Vermont's Blueprint for Health, which has regional teams of health professionals working to manage the cases of patients with chronic diseases. The bill would set up those teams statewide and would expand the types of health care they deliver.
US cities forced to consider bankruptcy By Nicole Bullock in New York - FT.com Council meetings in Harrisburg, the capital of Pennsylvania, have weighed issues ranging from snow removal and rubbish collection to a rise in dog fighting, but a meeting this week was particularly unusual. In a sign of the tough times, officials called in experts to discuss the pros and cons of going bankrupt. “There is no good option,” Dan Miller, Harrisburg city controller, told the city’s administration committee. Mr Miller and some members of the committee advocated exploring bankruptcy as way to get out from under its debts. Other officials at the three-hour meeting worried about the ramifications.
What's Your Home Worth...In Gold? Joseph L. Shaefer - SeekingAlpha.com I discovered the great chart below at Chart of the Day. It basically tracks the median price of a single-family home in the United States and divides it by the price of one ounce of gold. The result tells you, in a store of value that pre-dates all paper currency and will no doubt outlive any single paper currency, what the value of US housing is today and what it has been for the past 40 years. There are those who will protest that “gold fluctuates too wildly” to provide a worthwhile indicator of value. I would disagree. While gold may fluctuate in dollar terms, or euro terms, or yen terms, it is often the value of those currencies that fluctuate around the price of gold.
‘Strategic’ Mortgage Defaults Jump to 12% of Total By Jody Shenn April 29 (Bloomberg) -- Decisions by U.S. homeowners to walk away from mortgages they can afford account for an increasing share of defaults, according to Morgan Stanley. About 12 percent of all mortgage defaults in February were “strategic,” up from 4 percent in mid-2007, New York-based Morgan Stanley analysts led by Vishwanath Tirupattur wrote in a report today. Borrowers are more likely to stop paying their mortgages the higher their credit scores and the larger their loans, the analysts said.
Not all is well on the housing front. Housing still too expensive for middle class Americans MyBudget360.com 9 Years of Housing Inventory and 7 Million Homes 30+ Days Late or in Foreclosure. How the government is keeping and encouraging expensive housing. Since the recession started in December of 2007, over 7 million foreclosures have been initiated. In no other time in history have we seen this magnitude of problems in the housing market. And these problems still persist. It is estimate that another 6 to 9 million homes are at risk of foreclosure in the upcoming years given the current economy and overhang from the housing bubble. If we measure the health of the housing market through foreclosures, we are only half way through this housing calamity. In many ways, the problem still stems from homes being too expensive relative to the income people make.
Foreclosure Rates Rise in Most Cities By BETSY SCHIFFMAN - DailyFinance.com Less than a month after President Barack Obama announced plans to revamp the federal mortgage assistance program, foreclosure rates in some of the country's hardest hit locales are finally showing signs of a slowdown, according to first-quarter numbers released by RealtyTrac. Predictably, cities in California, Florida, Nevada and Arizona topped the list of metropolitan areas with the highest foreclosure rates, and California dominated with 10 of the 20 cities suffering the most foreclosure activity. But in 14 of those top 20 metro areas, foreclosure activity dropped on a year-over-year basis.
Foreclosure easing in big cities but still spreading By Les Christie NEW YORK (CNNMoney.com) -- Foreclosure filings declined in more than half of the country's worst-hit spots in the first three months of 2010. But that doesn't mean the healing has begun. In a release issued Thursday, RealtyTrac, a leading online marketer of foreclosed homes, reported that foreclosure filings declined in 14 of the top 20 cities year-over-year, most of which are concentrated in the Sunbelt "bubble" states of California, Arizona, Florida and Nevada.
Gerald Celente on BILL MEYER 26 April 2010
Friday's GDP Report: No Middle Class Recovery Peter Morici - SeekingAlpha.com On Friday, the Commerce Department will report estimated first quarter GDP growth. The consensus forecast is for a 3.5 percent increase, further confirming the end of the recession and that the recovery is moderate and disappointing. Unemployment will hang above 8 or 9 percent well into 2011, and most workers will continue to face a tough job market and declining living standards. This recovery is decidedly anti middle class. Wages will not keep up with rising prices, health care premiums and taxes. A good deal of the gains, so far, are going to Wall Street and the medical and intellectual property industries.
More Than a Million in U.S. May Lose Jobless Benefits By Brian Faler April 29 (Bloomberg) -- Since the U.S. recession began in December 2007, Congress has extended the length of unemployment benefits for the jobless three times. Now, the lawmakers may have reached their limit. They are quietly drawing the line at 99 weeks of aid, a mark that hundreds of thousands of Americans have already reached. In coming months, the number of those who will receive their final government check is projected to top 1 million.
Immigration: The Rule of Law Awakens In Arizona By Frosty Wooldridge - CapitolHillCoffeeHouse.com After 30 years of the U.S. Congress and four presidents failing to enforce our immigration laws-- Arizona, led by State Senator Russell Pearce and a brave band of lawmakers—passed SB 1070, the most diligent and forceful immigration law in the nation. In excess of 460,000 criminal illegal aliens find themselves facing, for the first time in 30 years, the rule of law. “We’re tired of tens of thousands of stolen vehicles,” said Arizona resident Michelle Dallacroce. “We’re the kidnapping capital of America. Arizonans fear for their lives daily. Illegals have destroyed our schools, hospitals and communities. They fill our prisons. They kill our cops, ranchers and ordinary citizens. We’re tired of it.”
2 lawsuits challenge new Arizona immigration law BY JONATHAN J. COOPER and PAUL DAVENPORT - AP PHOENIX (AP) - An Arizona police officer and a Latino group filed the first legal challenges of Arizona's sweeping new law cracking down on illegal immigration Thursday. Fifteen-year Tucson police veteran Martin Escobar argues there's no way for officers to confirm people's immigration status without impeding investigations. The lawsuit, filed Thursday in U.S. District Court in Tucson, alleges the new immigration law violates numerous constitutional rights and could hinder police investigations in Hispanic-prevalent areas.
On Arizona and Immigration By Doug Edelman - CapitolHillCoffeeHouse.com Now that Arizona has passed its “controversial” law on illegal immigration, the pro-amnesty crowd is convulsing in a massive collective conniption fit! Unlike the imaginary “violence” of the Tea Parties, these people actually RIOT! Liberals are disingenuously claiming that the law somehow promotes racism or profiling. They’re likening the law to Nazi oppression. They discount the fact that the law does not authorize checkpoints, stopping people to check their status etc. It simply authorizes police, in the course of their normal law enforcement, to check the status of people stopped for other reasons, and to detain those found to be illegally present in the country. This is nothing more than allowing AZ law enforcement officials to enforce the Federal Law!
Judge Napolitano National ID Is Coming For Every American
Republican Tea Party movement could get first senator By Alex Spillius in Washington - Telegraph.co.uk America's burgeoning Tea Party movement is on course to get its first senator. The withdrawal of Charlie Crist, Florida's moderate governor, from the Republican primary has left the way clear for conservative favourite Marco Rubio to claim the party's nomination. Hailed as the first member of the Tea Party to have the potential to break into the Senate, Rubio has risen from political obscurity a year ago to poster boy for the Right-wing populist movement that has spread across the country in reaction to President Barack Obama's liberal agenda.
U.S. Army Trains to Take On "Local Militia Groups / Anti-Government Protesters / TEA Party"
Apple’s Chief Makes Case Against Flash to the Public By NICK BILTON - NYTimes.com Steven P. Jobs, Apple’s chief executive, posted a 1,700-word letter on Apple’s Web site on Thursday, explaining the company’s decision not to allow the multimedia software Adobe Flash on Apple’s mobile devices, including the iPhone and iPad. The letter is the first in-depth public statement by the company discussing its position on Adobe’s software, which is behind millions of graphics and advertisements on Web sites worldwide, since Apple announced that position in January 2007 when it introduced the iPhone.
Kennedy mini-series provokes outrage among American liberals By Nick Allen in Los Angeles - Telegraph.co.uk A new television mini-series on the Kennedys masterminded by the rightwing creator of '24' has outraged American liberals and historians who have branded it a "political character assassination" concentrating on sex and scandal. The series will be broadcast on the History Channel and is being created by Joel Surnow, a political conservative who was behind the globally successful drama in which Kiefer Sutherland plays Jack Bauer, a special agent hunting down terrorists. The History Channel usually screens documentaries and factual reconstructions and "The Kennedys", which will focus on the presidency of John F Kennedy, will be its first venture into the scripted mini-series genre.
Gulf of Mexico oilspill spreads all the way to Capitol Hill Nils Pratley - Guardian.co.uk The Deepwater Horizon oil disaster has killed people, harmed the environment, and has severely damaged BP as a company The fact that 11 people are presumed dead should have made it obvious that the disaster in the Gulf of Mexico represented a threat to the reputation of BP. It was only today, however, a week after the accident, that the penny dropped in the City: BP's share price fell 6.5%, an enormous fall for a £100bn company. The rig that suffered the catastrophic blowout was owned and operated not by BP but by Transocean, the world's largest specialist, which may have lulled investors' fears. When the legal bills are finally settled, that may limit the financial impact on BP. But the company, in the regulatory wording, is the "responsible party" for the field (it owns 65%) and that could be a key factor in the inevitable blame game.
Gulf of Mexico oil spill is likely to be a catastrophe By Geoffrey Lean - Telegraph.co.uk Environmentalists always cry "ecological catastrophe!" when oil gushes into the the sea, and usually they are wrong. A 1993 spill off the Shetlands from the wrecked oil taker Braer, forecast to kill "whole populations" of birds, actually did little damage. Nor did a similarly apocalyptically-hailed one off Spain in 2002. And a scientific expedition a year after the release of a million tons of oil, affecting 350 miles of coast on the Arabian Gulf during the first Gulf War, found no trace of it in 177 out of 180 dives in the sea. WHERE Yet sometimes nature cannot cope. The spill from the Exxon Valdez in Alaska's Prince William Sound in 1989 killed at least 250,000 birds –ten times as more as in any previous disaster – and the area's fragile ecology has yet to recover fully. And already it looks as if the new spill in the Gulf of Mexico may be even worse.
Failed Tool of ‘Last Resort’ Doomed Rig Workers, Allowed Spill By Joe Carroll and Mark Chediak April 29 (Bloomberg) -- A 2-foot-long metal clamp that failed to cut a pipe on the ocean floor may be to blame for the Deepwater Horizon catastrophe last week that killed 11 workers, sank a $365 million drilling rig, and cast a sprawling sheet of crude toward coastal fisheries and beaches. All subsea oil wells are equipped with steel blades known as shear rams that are supposed to slash through the pipe at the top of the well during dangerous pressure surges and close off the flow of crude, said Ron Bohuslavicky, the senior well- control instructor at Well Control School in Houston.
Clinton blasts Iran, Syria in appearance before Jewish group By the CNN Wire Staff (CNN) -- As the United States prepares for a visit next week by Iranian President Mahmoud Ahmadinejad, Secretary of State Hillary Clinton condemned his regime in some of the Obama administration's strongest language to date in a speech Thursday night. "Iran, with its anti-Semitic president and hostile nuclear ambitions, also continues to threaten Israel, destabilize the region, and sponsor terror," Clinton said, addressing the annual meeting of the American Jewish Committee.
Lord Monckton Returns on Alex Jones Tv 1/5: Climate Policy Deception
Lord Monckton Returns on Alex Jones Tv 2/5: Climate Policy Deception
Lord Monckton Returns on Alex Jones Tv 3/5: Climate Policy Deception
Lord Monckton Returns on Alex Jones Tv 4/5: Climate Policy Deception
Lord Monckton Returns on Alex Jones Tv 5/5: Climate Policy Deception
Why Should You Be Freaked Out About Greece? by Megan McArdle - BusinessInsider.com Remember, The Great Depression Had Two Parts The most terrifying words I've seen written so far about the growing crisis in Greece were penned by Yves Smith yesterday: "So the whole idea that the financial crisis was over is being called into doubt. Recall that the Great Depression nadir was the sovereign debt default phase. And the EU's erratic responses (obvious hesitancy followed by finesses rather than decisive responses) is going to prove even more detrimental as the Club Med crisis grinds on." The Great Depression was composed of two separate panics. As you can see from contemporary accounts--and I highly recommend that anyone who is interested in the Great Depression read the archives of that blog along with Benjamin Roth's diary of the Great Depression--in 1930 people thought they'd seen the worst of things.
Roubini: "In A Few Days Time, Joe Weisenthal - BusinessInsider.com There Might Not Be A Eurozone For Us To Discuss" When it comes to the PIIGS, Dr. Doom is in full-on doom mode. Felix Salmon has some good notes on a PIIGS panel from the Milken Global Conference, which included Nouriel Roubini, who is in his wheelhouse when talking about sovereign debt crises. Nouriel, of course, takes that kind of thinking to its logical conclusion, and kicked off the panel by announcing that it was just in time: “in a few days,” he said, “there might not be a eurozone for us to discuss.” There's no way that Greece can implement the 10% spending cut it needs to do in order to stop its debt spiralling out of control at current interest rates — and even if it did, the economic effects would be disastrous.
Nouriel Roubini Discusses U.S., Government Deficit
Already Holding Junk, Germany Hesitates By JACK EWING - NYTimes.com FRANKFURT — Add this to the list of reasons German taxpayers are unhappy about having to lend Greece money to ease its debt crisis: In effect, they already have. Germany’s financial institutions hold some 28 billion euros, or $37 billion, in Greek bonds, according to estimates by Barclays Capital, extrapolating from International Monetary Fund data. Germany’s regulators and many of its banks do not disclose precise figures, but an informal survey on Wednesday of the largest banks indicates that about half of that debt — rated as junk by Standard & Poor’s since Tuesday — appears on the balance sheets of institutions that are owned or controlled by the German government.
The Cost of Insuring the Financial Industry By Bill Bonner - DailyReckoning.com “Ask me how insurance works.” “All right, how does insurance work?” “Well, okay, you give me your money…” “Is that all there is to it?” “Yes.” “Is that a joke?” “Not exactly…” Fire insurance works by sharing out the risk of a fire among hundreds of homeowners. In effect, if one house burns down, the others have already put aside enough money to rebuild it. It’s a kind of voluntary socialism…freely collectivizing the risk of a house fire. But just because you have fire insurance doesn’t mean you will leave a can of gasoline on the kitchen stove. You know it would be a big pain to replace the house and its contents – even if you were made whole financially. That’s why it works, because it doesn’t change human behavior. So, actuaries can calculate the odds of a fire fairly accurately.
Gold Potential to Hit $2,000 to $3,000 Within 2 Years By: Aden Forecast - MarketOracle.co.uk This month’s jump up in precious metals, resources and oil reinforces that the lows in February were likely the lows for the downward correction. For now, the second quarter is off to a good start. The fact that gold’s decline was mild (down 13?%) is saying that the underlying bull market is strong and solid. You should now have your positions bought and in place, waiting for the bull market to further unfold. Platinum and palladium have been strong, reaching new highs and they seem to be leading gold, silver and the metals shares in another leg up in the bull market. In fact, the new highs in many commodities reinforces this.
If gold goes to $5000, where will commodities head By Stewart Thomson - CommodityOnline.com The Bugs Bunny Show continues to take comedy to new levels, surpassed only by the Angela “Euro to Zero” Merkel show. How she manages to keep a straight face while mauling the currency of her citizens, while they give her a standing ovation, is beyond my understanding. If I was in her place, I’d be on the floor screeching with laughter at the stupidity of my citizens while I ruined their currency, if I had her character. After handing the commercial banksters a $500 billion blank check after 8 hours of supposed “deliberation”, she has engaged in endless weeks of rants about why the Greek govt can’t get 1/100th of that amt, unless they agree to an equally endless list of supposed demands to ensure austerity.
Gold climbs as eurozone debt crisis intensifies People's Daily Online - Xinhua Gold futures on the COMEX Division of the New York Mercantile Exchange extended gains on Wednesday, as euro sank to one-year lows against U.S. dollar amid intensified sovereignty debt crisis in Europe. Silver and platinum both dropped. The most active gold contract for June delivery rose 9.60 U.S. dollars, or 0.8 percent, to finish at 1,171.80 dollars. Rating agency Standard & Poor's announced on Wednesday to downgrade the debt rating of Spain by one notch to AA, indicating a negative outlook and possible further downgrade.
All Aboard the Gold Train as Recognition Move Approaches By: Jordan Roy Byrne - MarketOracle.co.uk Since early 2009 we’ve written about the super-bullish long-term cup and handle pattern in Gold. It dates back to 1980 and has a logarithmic target of about $2,100. We noted that previous cup and handle patterns in Gold all reached their logarithmic target1. We expect that this move to $2,100 will be the recognition move that awakens the masses to the Gold bull market and the reality of severe inflation in the near future. Speaking of the near future, the relative strength of Gold in the face of a strong US dollar (or weak Euro) is one big hint that this recognition move is around the corner. We’ve noted this before and it is important to explain to new readers. Gold priced in foreign currencies has been leading Gold in US$ terms. It is true for the entire bull market and is quite evident in just the past few years.
Five Questions About Gold The IMF Refuses To Answer Vince Veneziani - BusinessInsider.com You'll recall that a few weeks ago, we interviewed the IMF on why it had blocked investor Eric Sprott's attempt to buy gold from the fund. We then spoke with Eric Sprott and the Gold Anti-Trust Action Committee, better known as GATA for their take on the matter. Along the way, both GATA and Sprott suggested we ask the IMF some questions that the fund has avoided answering in the past. So we did. They were:
What are the incentives for the IMF not to sell gold on the open market or to investors, be it institutional or retail?
What are the designated depositories for gold?
Did gold physically change hands with the banks you have sold to so far or was the transaction basically bookkeeping stuff (the IMF still holds the physical gold in this case)?
Are there available records on the actual serial numbers of bullion? How is the gold at the IMF tracked and accounted for?
When the IMF says it will "phase out" the sal of available gold, could you be more specific? What amount of gold in regard to what amount of time.
Does IMF support a need for total transparency in the sale of gold despite the effects it could have on various markets?
U.S. Households Lost $100,000 From Crisis By Rebecca Christie April 28 (Bloomberg) -- The financial crisis and recession cost U.S. households an average of about $100,000 in lost wealth and income, according to a study by former Treasury Department economist Phillip Swagel. From June 2008 through March 2009, households’ stock holdings fell $66,000 and real estate dropped $30,000, according to the study released today by the Pew Economic Policy Group. Each household also lost an average $5,800 from unemployment and lower earnings from September 2008 through December 2009, the study said.
Junking Greece May Be Beginning of End for Euro Commentary by Mark Gilbert April 29 (Bloomberg) -- Greece cheated its way into the single-currency club, lied about its deficit for years, and now brings the shame of becoming the first junk-rated member after losing investment-grade status at Standard & Poor’s this week. Greece’s punishment? A 30 billion-euro ($40 billion) handout from its neighbors, with Germany on the hook for almost 8.4 billion euros, followed by France for 6.3 billion euros and 5.5 billion euros from Italy. The rest of the gang members are expected to contribute pro rata, based on their capital subscriptions to the European Central Bank.
Yuan’s Gain Against Euro May Delay China Ending Peg By Bob Chen and Shamim Adam April 28 (Bloomberg) -- The yuan’s climb to a one-year high against the euro will erode China’s competitiveness in its largest export market and delay an end to its currency’s peg against the dollar, said UniCredit SpA and Societe Generale SA. Forward contracts on the currency fell after debt-rating downgrades of Greece and Portugal yesterday deepened concern that a sovereign-credit crisis will hamper a global economic recovery. The European turmoil may buttress Premier Wen Jiabao’s reticence to abandon the yuan’s peg to the dollar, adopted in July 2008 to shield exporters from the world recession.
Jim Rogers on Get out of The Dollars!
Greece's Bill Is Now Due - And Others Will Be Next, Debt Denial and the Five Stages of Greece By: Justice Litle - MarketOracle.co.uk The phenomenon of "debt denial" has gripped not only Greece and the eurozone, but the entire roster of rich Western nations. When the smoke finally clears, you'll want to own gold coins... The eurozone is slowly but surely imploding under an unsustainable debt load. Greece is still center stage, but the woes will soon spread. Ultimately, Greece is the first domino in a long chain of looming debt defaults... and at the end of that chain lies the United States. You'll want to be paid up on "printing press insurance" before the final domino falls - and gold coins might fit the bill nicely in that regard. More on that at the end of today's piece...
Selling Greece to Disney Solves Europe’s Woes Commentary by Alice Schroeder (it's a spoof! . . . . but plausible) April 28 (Bloomberg) -- The following is this columnist’s look into the future of Europe’s debt crisis. A news story on Jan. 5, 2011, may look something like this: . . . . Disney’s decision to buy Greece has been credited to Steve Jobs, CEO of Apple Inc. and Disney’s largest shareholder. In 2009, Jobs told Disney to “dream bigger,” setting into motion a deal that is generating a new series of Disney hit movies and product spin-offs, and transforming the theme-park industry. Theme Parks Already under construction are Space Mountain Olympus, the Pirates of the Aegean water theme park covering hundreds of nautical miles, the Little Mermaid Harpoon thrill ride, and “Trojan,” a multimedia adventure that the company reassured shareholders yesterday will not be adult-themed.
Goldman And The PIIGS Keep Stock Market Jittery By: PaddyPowerTrader - MarketOracle.co.uk The price action and news headlines Tuesday were dominated by US rating agency Standard and Poor’s decision to downgrade the sovereign ratings of Greece and Portugal to BB+ (by a savage and unprecedented three notches) and A- (down two notches) respectively. This saw a dramatic further significant ballooning in bond spreads and CDS to fresh highs whilst the domestic equity markets were down 6% and 5% respectively. With the downgrade of Greek sovereign ratings, the fate of Greek depends on ratings action by the other two major rating agencies Moody’s and Fitch.
Mohammad El-Erian And Paul Krugman by Joe Weisenthal - BusinessInsider.com Both Wildly Gloomy About Spiraling Crisis In Greece The market has been in full-on panic about Greece for awhile now -- hence the parabolic spike in short-term rates -- and now it seems the wise men of the market are fully on board. Felix Salmon points to new pieces from both Mohammad El-Erian and Paul Krugman, both of whom see nothing but bad news right now. El-Erian, in so many words, says Greece will default. Krugman is talking about the real possibility of unwinding the euro and ends his piece with: "I think I’ll go hide under the table now."
Massive Inflation is Coming - Jim Rogers!
Goldman Death Fight May Explain Lloyd’s Words Commentary by Jonathan Weil April 29 (Bloomberg) -- If we are to take Lloyd Blankfein’s word for it, and that’s always a big if, then there must be a lot worse behavior by Goldman Sachs that has yet to be discovered, beyond what was publicly unearthed at this week’s Senate hearing. Here’s what Goldman’s chief executive officer told Tom Coburn of Oklahoma, the ranking Republican on the Senate Permanent Subcommittee on Investigations, when asked if he had any “legal, ethical or reputational” concerns about any of the activities undertaken by Goldman employees that were described during the daylong hearing. “I heard nothing today that makes me think anything went wrong,” Blankfein said.
Barofsky Says Criminal Charges Possible in Alleged AIG Coverup By Richard Teitelbaum April 28 (Bloomberg) -- Neil Barofsky was unpacking boxes in December 2008 when the stench of sewage wafted through the hallways at the 168-year-old Main Treasury Building. The space assigned to him as head of the Office of the Special Inspector General for the Troubled Asset Relief Program, or SIGTARP, was shoehorned into the basement, three floors below U.S. Treasury Secretary Henry Paulson’s offices. “They eventually discovered a broken sewer main beneath the floor,” says Barofsky, 40, adding that he doesn’t think any slight was intended by relegating him to the malodorous quarters. Still, he says with a smile, “I wasn’t given the prime real estate in Treasury.”
Roubini Says Rising Debt Leads to Inflation, Defaults By Vivien Lou Chen and Gabrielle Coppola April 28 (Bloomberg) -- Nouriel Roubini, the New York University professor who predicted the U.S. recession more than a year before its start in December 2007, said rising sovereign debt from the U.S. to Japan and Greece will ultimately lead to higher inflation or government defaults. “While today markets are worried about Greece, Greece is just the tip of the iceberg, or the canary in the coal mine for a much broader range of fiscal problems,” Roubini, 52, said today during a discussion on financial markets at the Milken Institute Global Conference in Beverly Hills, California. Increasing tax revenue won’t be enough “to save the day.”
America’s Second Great Depression (Part 1) By: Mike Stathis - MarketOracle.co.uk Overview - Washington, Wall Street and their partners in crime, the media, have continued to spread the myths of an economic recovery since late summer 2009. In response to the propaganda, the stock market has continued to rally. But most individual investors have been left out of this tremendous rally. . . . With the national debt approaching $13 trillion, no real improvements to the worst and longest recession since the Great Depression, blue chips slashing dividends for the first time in history (eg. DOW), century-old financial institutions now in bankruptcy (Lehman Brothers, Bear Stearns, Washington Mutual), trillions of dollars in bailouts, the largest year-over-year decline in GDP, state tax revenues and housing starts since the Great Depression, over 7 million foreclosures, an additional 7 million more foreclosures over the next 2 to 4 years, more than 8 million lost jobs with about 32 million Americans out of work, more than 40 million Americans on food stamps, a healthcare crisis that has not been addressed, a continuing trend of excessive inflation for food, energy and healthcare, and consumer spending coming to a halt…you can be assured of many things over the next several years:
Several more stimulus packages (which won’t offer any permanent assistance)
Soaring consumer loan defaults
Soaring commercial real estate defaults
Several million additional foreclosures
Rapidly rising and high interest rates
Muted real wage growth
Declining job quality
Lingering high unemployment for several years
Significant downside in the U.S. stock market
Continuation of employee benefit cuts
Continuation of healthcare inflation with millions more medical bankruptcies
A deepening of the entitlement crisis
Excessive inflation over an extended period OR massive inflation that will be countered by double-digit interest rates
A long period of muted consumer spending
Much higher taxes (not just income, but all taxes)
A worsening of America’s Second Great Depression, with up to two lost decades.
World War III
Western Civilization is Doomed By: John Kozy - MarketOracle.co.uk Peace cannot be achieved through violence, it can only be attained through understanding." Ralph Waldo Emerson When I was a boy, I knew a man who repaired clocks and watches as a hobby. (Quartz watches had not yet been invented.) I often sat for hours in utter fascination watching him work. Then one day, I asked, "Frank, how do you know how to do that?" He answered, "Johnny, what man has done, man can do." Therein lies the fallacy of the Nuclear Nonproliferation Treaty. Science and technology is a Pandora's Box. Once opened by one man, company, or country, what is emitted soon becomes everyone's.
Gold vulnerable to Greek debt crisis: by Jeff Nichols NEW YORK (Commodity Online) Last week, the sovereign debt crisis caused daily swings in gold prices and it remains vulnerable to more bad news for Greece or signs that one or another European Union member is following Greece down the road to insolvency, according to Jeffrey Nichols, Senior Economic Advisor to Rosland Capital and senior precious metals economist. Jeff Nichols said that gold should benefit from euro problems and its continuing loss of status as a dollar alternative. In fact, with Europe facing a chronic sovereign debt problem, the euro is itself a shrinking yardstick, hardly a stable unit of value against which to measure the dollar.
EMU domino fears as Spain downgraded, Germany drags feet on rescue By Ambrose Evans-Pritchard - Telegraph.co.uk German leaders have agreed in principle to a rescue package of up to €135bn for Greece in emergency talks with EU and IMF officials, but failed to offer any clarity on the conditions for such aid. Hopes for a respite for Southern Europe's battered bond markets were quickly dashed as Standard & Poor’s downgraded Spain. Rainer Brüderle, Germany’s economy minister, said the Greek bail-out would be much larger than first thought, acknowledging that Greece cannot hope to tap the private debt markets for three years. The heads of the European Central Bank and the International Monetary Fund made a joint pilgrimage to Berlin, pleading with lawmakers in the Bundestag to throw their full weight behind rescue efforts before the chain-reaction spreads to Portugal and the rest of the EMU periphery. Their presence as supplicants in Berlin marks the symbolic moment when Germany appears the undisputed master of Europe.
ECB warns on sovereign debt crisis By Ralph Atkins in Frankfurt - FT.com A top European Central Bank policymaker has intensified warnings of a “full-blown sovereign debt crisis” unless governments take ambitious steps to bring public finances under control, saying the UK, US and Japan faced an even greater challenge than the eurozone. The comments by Jürgen Stark, ECB executive board member – which echoed similar warnings by the International Monetary Fund – highlighted the spreading concerns sparked by the escalating crisis over Greece’s public debt. However, he played down the idea of the ECB offering Greece a lifeline in an extreme scenario by buying its government bonds.
Currency Wars: Markets Shudder on Downgrade of Spain There was unusually heavy put buying yesterday in NY markets on the Spanish stock index ETF. Last month a group of US hedge funds were investigated for collusion in planning short selling assaults on the euro. Having exhausted the developing world, which has largely tossed them out, have the economic hitmen finally turned on the developing world as we forecast in 2005 that they would? This is not to say that Greece, Portugal, or Spain are without problems or fault. There is a general crisis in many of the developed country fiat currencies, including the United States. The rising price of gold and silver, despite the heavy handed manipulation by a few of the banking centers, is a sure sign of a flight from paper controlled by central banks.
Spain hit as Greek 'illness' spreads over Europe Carl Mortished - The TimesOnline.co.uk The crisis affecting the eurozone worsened yesterday when Spain’s credit rating was downgraded less than 24 hours after Greece was sent into financial meltdown. Fear of contagion gripped Europe’s financial markets when the debt rating agency Standard & Poor’s cut the rating on Spain’s sovereign bonds. The decision — coming after the agency downgraded Portugal’s rating and cast Greek bonds into the scrapyard, designating them junk — sent the euro plunging against the dollar.
I.M.F. Promises More Aid for Greece as European Crisis Grows By LANDON THOMAS Jr., NICHOLAS KULISH - NYTimes.com Hoping to quell its biggest crisis since the Asian woes of 1997, the International Monetary Fund promised on Wednesday to increase the 45 billion-euro aid package for Greece to as much as 120 billion euros over three years. The fund is racing to conclude an agreement for more painful austerity measures from Greece by Monday, clearing the way for the government to receive funding and reassuring investors worldwide that European debt is safe. On Wednesday, Dominique Strauss-Kahn, the I.M.F.’s forceful managing director, made the higher aid pledge in a private meeting with German legislators. The package would be the equivalent of up to $160 billion and would come from both the I.M.F. and from other countries using the euro.
Dangers loom beyond the eurozone By Chris Giles in London - FT.com The crisis in Greece serves as a warning to other countries not to lose control of their fiscal positions and the confidence of markets. But advanced countries have now stretched their public budgets so far that investors, economists and international organisations are getting worried. Returning to form, the International Monetary Fund warned this month that reducing budget deficits, “should precede the normalisation of monetary policy” in many economies and that they “need to make more progress in developing and communicating credible medium term fiscal adjustment strategies”.
NYU's Roubini Says Greece Wasn't Ready to Join EU
My big fat Greek market bloodbath By Colin Barr - CNNMoney.com (Fortune) -- Europe is finally cobbling together a credible Greek bailout. But even a big wad of cash may not be enough to prevent another round of market mayhem. Officials from the European Union and the International Monetary Fund said Wednesday they hope to agree this weekend with the Greek government on the terms of a bailout package. The IMF said the package could cost as much as $160 billion over three years -- well above the sums previously discussed. European officials have been "dragging their feet" on Greece for months, said Mitchell Orenstein, a European studies professor at Johns Hopkins University in Baltimore.
Ireland suffers fallout from Greek crisis By John Murray Brown - FT.com Ireland was hit by the fallout from the Greek crisis on Wednesday as its bond spreads widened, in spite of bold steps to contain its budget deficit and stabilise its banking sector. Irish government bonds were trading 35 basis points wider at 255bp above German bonds, the largest spread since July last year. Alan McQuaid, chief bond analyst with Bloxham stockbrokers, said: “As much as the Irish economic stabilisation and the progress in recapitalisation of the banking sector are welcome, Ireland remains vulnerable to the external stresses in the financial markets.”
Irish Official Calls Markets 'Irrational' By DAVID JOLLY - NYTimes.com PARIS — A top Irish finance official said Wednesday that the soaring borrowing costs many European governments were facing showed that markets had become “irrational,” and he played down any comparison of Ireland’s financial situation to that of Greece. “The blowout that has occurred across the markets indicates I think that we’ve reached an irrational phase in the pricing of bonds generally,” John C. Corrigan, chief executive of the National Treasury Management Agency, said during an interview. “And the situation with Irish bonds” — the yields of which have soared this week as Greece has melted down — “is on the back of a general blowout.”
Portugal to rush through austerity measures By Peter Wise in Lisbon - FT.com The Portuguese government said on Wednesday it would immediately implement austerity measures initially planned for 2011 in an effort to regain the confidence of international financial markets after a downgrade of its sovereign debt hit borrowing costs and share prices. José Sócrates, Portugal’s Socialist prime minister, said the government would accelerate plans to increase capital gains tax, introduce new road tolls and reduce spending on unemployment and other welfare payments. High earners would also pay more income tax.
Keiser Report with very special Hollywood guest
Goldman on Senate hot seat for reform By Patrice Hill - WashingtonTimes.com Executives explain e-mails, risky deal Goldman Sachs executives on Tuesday strongly resisted attempts by a Senate investigative subcommittee to use the storied Wall Street firm as "Exhibit A" in the Democrats' drive to enact a sweeping reform of Wall Street practices. Members of the Senate Homeland Security and Governmental Affairs permanent subcommittee on investigations repeatedly accused the firm of working against its own clients as well as creating the housing and credit disaster that brought down the global economy in the fall of 2008.
Goldman Sachs adds to its ranks of lobbyists By Tomoeh Murakami Tse - Washington Post Until a few years ago, Goldman Sachs operated a sleepy lobby shop in the nation's capital. But now, faced with fraud charges, investigations, a firestorm of criticism and a regulatory overhaul bill that could seriously damage its profitability, the venerable Wall Street firm is assembling a team of veteran lobbyists, well-connected former Hill staffers and top public relations strategists to confront what is arguably the most traumatic moment in its 140-year history.
Goldman Sachs Bribed Senate To Pass Bailout Bill
Obama Said to Announce Fed Board Nominees Tomorrow By Hans Nichols and Scott Lanman April 28 (Bloomberg) -- President Barack Obama plans to announce his choice of Federal Reserve Bank of San Francisco President Janet Yellen tomorrow as vice chairman of the Fed Board of Governors, according to two people familiar with the decision. The president will also name Sarah Bloom Raskin, Maryland’s commissioner of financial regulation, and Peter Diamond, an economics professor at the Massachusetts Institute of Technology, for the two remaining open seats on the central bank’s seven-person board, according to the people, who spoke on condition of anonymity before the announcement.
Obama Sends in the Clowns By J. Matt Barber - CapitolHillCoffeeHouse.com With a potential political bloodbath looming in November, liberals are understandably desperate. They see it all slipping away and it shows. The grassroots groundswell of opposition to Obama’s neo-Marxist, secular-humanist agenda intensifies daily despite the left’s best efforts to silence dissent. Commensurate with plummeting poll numbers and evaporating public trust, Democrats, media elites and the usual gaggle of left-wing pressure groups have ramped-up the unhinged “right-wing-extremist” twaddle to historically hysterical levels. For those who delight in watching the self-styled “progressive” movement implode, it’s priceless.
Wall Street Begins Taking Bets on Jumbo-Mortgage Debt By Jody Shenn April 28 (Bloomberg) -- Wall Street banks began taking bets on pools of jumbo-mortgage bonds as trading started today on four new credit-default-swap indexes. The PrimeX indexes, administered by London-based Markit Group Ltd., are similar to the ABX indexes tied to subprime debt that began in early 2006, allowing easier wagers on the subsequent record defaults among homeowners with bad credit. When a plan to create the indexes linked to older prime loans larger than the limits for government-supported Fannie Mae and Freddie Mac was announced in December, Wells Fargo & Co. analyst Glenn Schultz suggested investors consider selling jumbo-mortgage securities because PrimeX trading could drive down their prices, as happened with subprime bonds and the ABX indexes he had called “Frankenstein’s monster.”
California Declares War on State Bond Short-Sellers Commentary by Joe Mysak April 28 (Bloomberg) -- California wants to know why underwriters take its money to sell the state’s bonds, and then talk trash behind its back. That’s what California Treasurer Bill Lockyer asked in March of six banks that have made $215 million from selling the state’s general obligation bonds since 2007. “We have information that indicates your firm, which sells California GO bonds, may participate in the municipal credit default swaps market,” the letter said. Lockyer wanted to know why, and to what extent. The treasurer posted the banks’ responses on his Web site last week.
Foreclosure more likely if you’re bad at simple math There’s a better chance you’ll experience foreclosure if your math isn’t up to snuff, according to a new research paper from the Atlanta Fed. Three researchers studied the effect of borrower’s financial literacy and cognitive ability to see what type of role, if any, they played in the mortgage crisis. They surveyed subprime borrowers who took out mortgages between 2006 and 2007, and found foreclosure starts were approximately two-thirds lower in the group with the highest measured level of numerical ability compared with the group with the lowest measured ability.
Homeownership Rates: That Was Then, This Is Now Every now and then it's good to take a stroll down memory lane. Today we have politicians, the media and many borrowers incensed about banks with lending standards that are too loose and complaining about how so many people were enticed to buy homes that they couldn't afford. Doomers might detect a slightly different tone in this excerpt from a 1999 Los Angeles Times article on booming homeownership rates among minorities.
Purchases up as homebuyer tax credit set to expire Mortgage demand decreased 2.9 percent during the week ending April 23 compared with one week earlier, the Mortgage Bankers Association said today. The weekly decline was led by an 8.8 percent drop in refinance applications, while purchase applications picked up the slack with a 7.4 percent week-to-week gain, thanks in part to the expiration of the homebuyer tax credit on April 30. “Purchase activity continues to increase as we approach the end of the homebuyer tax credit program,” said Michael Fratantoni, MBA’s Vice President of Research and Economics, in a release.
Housing Shows Recovery Signs After Prices Fell to 2003 Levels By Kathleen M. Howley April 28 (Bloomberg) -- U.S. housing prices are showing signs of recovery after a slide that sent values to levels last seen in 2003 and left almost a quarter of homeowners with properties worth less than their mortgages. The S&P/Case-Shiller index of home prices in 20 cities rose 0.6 percent in February from a year earlier, the first annual gain since December 2006, the group said yesterday. The National Association of Realtors reported last week that existing-home prices advanced 0.4 percent in March as sales climbed for the first time in four months.
Housing Rebound at Least 3 Years Away By Dan Levy and Daniel Taub April 28 (Bloomberg) -- The U.S. housing market won’t recover for three to five years as mounting foreclosures hold down prices, according to mortgage-bond pioneer Lewis Ranieri. “There’s another big leg down and the question is how long does it stay,” Ranieri, chairman of Ranieri Partners LLC, said during a panel discussion today at the Milken Institute Global Conference in Beverly Hills, California. “You can’t have much of a rally when you’ve got this big overhang.”
One Down, Three to Go By Armand C. Hale - CapitolHillCoffeeHouse.com The passage and signing of SB1070, Arizona immigration enforcement law is a prime example what Joe and Jane Citizen can do. Fed up Arizonans banded together and legally took matters in their own hands. This was to the shock of the east coast D.C. establishment. The border state citizens of Texas, New Mexico, and California must demand their states follow Arizona’s lead or suffer the economic, social and criminal consequences. Attention boarder states. Here is how you can make your state house listen. It is up to you:
Justice Department considers suing Arizona to block immigration law By Jerry Markon and Anne E. Kornblut - Washington Post -- Officials in the Obama administration are urging the extraordinary step of suing Arizona over its new immigration law, and the Justice Department is considering such an action to block the legislation from taking effect, government officials said Wednesday. The Arizona law criminalizes illegal immigration by defining it as trespassing and empowers police to question anyone they have a "reasonable suspicion" is an illegal immigrant. President Obama and Attorney General Eric H. Holder Jr. have blasted the legislation, with Obama saying that it "threatened to undermine basic notions of fairness."
Arizona immigrant law energizes Hispanics, Democrats by Tim Gaynor - Reuters.com (Reuters) - U.S. Hispanics and Democratic lawmakers furious over Arizona's harsh crackdown on illegal immigrants expect huge weekend rallies across the United States, piling pressure on President Barack Obama to overhaul immigration laws in this election year. Protest organizers said on Wednesday outrage over the Arizona law -- which seeks to drive illegal immigrants out of the state bordering Mexico -- has galvanized Latinos and would translate into a higher turnout for May Day rallies in more than 70 U.S. cities. "The marches and demonstrations are going to be far more massive than they otherwise would have been," said Juan Jose Gutierrez, a Los Angeles rally organizer who runs an immigration assistance company.
In 2014, IRS will become health insurance enforcer By Sandra Block, USA TODAY The IRS processed more than 230 million tax returns last year, paid 127 million refunds and received about 68 million phone calls. The agency is responsible for enforcing a tax code that, at 71,000 pages, makes Anna Karenina look like a comic book. Starting in 2014, the agency will have another task: making sure all Americans have health insurance. Under the law, Americans who can afford health insurance but refuse to buy it will face a fine of up to $695 or 2.5% of their income, whichever is higher. More than 4 million Americans could be subject to penalties of up to $1,000 by 2016 if they fail to obtain health insurance, the Congressional Budget Office said last week. The IRS will be the enforcer — sort of.
Wal-Mart $40 Million Pay Suit Accord Wins Approval By Janelle Lawrence April 28 (Bloomberg) -- Wal-Mart Stores’ $40 million settlement of a lawsuit over employee pay in Massachusetts was approved by a judge. “I have approved this settlement,” Superior Court Judge Thomas R. Murtagh in Woburn, Massachusetts, said today. “I believe it is fair and adequate and free of collusion.” Hourly workers claimed in the class-action suit that the world’s biggest retailer made them work “off the clock” and denied or cut short their breaks. The settlement was first announced in December. Each of about 87,000 employees at Wal-Mart and Sam’s Club stores covered by the accord will be paid from $400 to $2,500 depending on their years of work, according to the settlement agreement.
The Real Story of the Oklahoma City Bombing By Roger Aronoff - CapitolHillCoffeeHouse.com While liberal news outlets such as MSNBC were cynically exploiting the April 19 anniversary of the 1995 Oklahoma City bombing by attempting to tie the terrorist attack to the anti-government sentiments of the modern-day Tea Party movement, investigative reporter Jayna Davis was setting the record straight in an exclusive interview on the AIM radio show, Take AIM. The Oklahoma City bombing was an Arab/Muslim terrorist attack on the United States, she says. Davis, author of a blockbuster book on the attack, The Third Terrorist, has examined and presented the evidence showing that Oklahoma City bomber Timothy McVeigh was in fact a front man for Middle Eastern terrorists. The third terrorist, in addition to the two, McVeigh and Terry Nichols, who were convicted, was an Arab. This was the mysterious “John Doe” who was never found. But other members of an Arab terrorist network were involved, she says.
Nation's 1st offshore wind farm, off Mass., gets U.S. go-ahead BOSTON (AP) — The Obama administration has approved what would be the nation's first offshore wind farm, off Cape Cod, inching the U.S. closer to harvesting an untapped domestic energy source — the steady breezes blowing along its vast coasts. U.S. Interior Secretary Ken Salazar announced the decision Wednesday in Boston, clearing the way for a 130-turbine wind farm in Nantucket Sound. Cape Wind was in its ninth year of federal review, and Salazar stepped in early this year to bring what he called much-needed resolution to the bitterly contested proposal.
White House seeks to soften Iran sanctions By Eli Lake - WashingtonTimes.com Wants exemption for firms based in China and Russia The Obama administration is pressing Congress to provide an exemption from Iran sanctions to companies based in "cooperating countries," a move that likely would exempt Chinese and Russian concerns from penalties meant to discourage investment in Iran. The Comprehensive Iran Sanctions, Accountability, and Divestment Act is in a House-Senate conference committee and is expected to reach President Obama's desk by Memorial Day.
Greece's Action on Aid Package Fails to Quiet Threat of Debt Contagion By DON MILLER, Associate Editor, Money Morning -- A request by Greece to trigger a $60 billion rescue package has failed to quell turmoil surrounding the country's bonds - heightening concerns that the debt contagion will force the European Union (EU) to bail out the region's other heavily indebted nations. Greece on Friday asked the International Monetary Fund (IMF) and European governments to fund the emergency aid package to help fend off default when debt payments come due next month.
***** Greece took Goldman's advice on derivatives! GS allegedly shorted euros (insider info about Greece).
Big Fat Greek Debt: Engdahl on bailout way out
Debt Ratings Are Lowered for Portugal and Greece By JACK EWING - NYTimes.com FRANKFURT - Europe's debt crisis deepened still further Tuesday after the ratings agency Standard & Poor's downgraded Greek and Portuguese debt, investors sold off government bonds amid fears of a default, and workers in the two countries took to the streets to protest austerity measures. S.&P. downgraded Greek government debt to junk status, saying in a statement, "Greece's economic and fiscal prospects lead us to conclude that the sovereign's creditworthiness is no longer compatible with an investment-grade rating."
ECB may have to turn to 'nuclear option' to prevent Southern European debt collapse By Ambrose Evans-Pritchard - Telegraph.co.uk The European Central Bank may soon have to invoke emergency powers to prevent the disintegration of southern European bond markets, with ominous signs of investor flight from Spain and Italy. Greece’s fortunes were dealt yet another blow as Standard & Poor’s slashed its credit rating to junk status - BB+ - the first time that has happened to a euro member since the single currency was created, pushing yields on 10-year Greek bonds up to a record 9.73pc. The credit-rating agency also cut Portugal’s sovereign debt ratings by two notches to A-, as the swirling storm hit the country with full-force. “We have gone past the point of no return,” said Jacques Cailloux, chief Europe economist at the Royal Bank of Scotland.“There is a complete loss of confidence. The bond markets are in disintegration and it is getting worse every day.
Ron Paul's Texas Straight Talk 4/26/10: Socialism vs Corporatism
Wall Street's heist Brett Arends, WSJ.com and MarketWatch Goldman Sachs case reminds investors of Deep Throat BOSTON (MarketWatch) -- The fraud case against Goldman Sachs Group Inc. is in early days. And if experience is any guide, you can now expect days of breathless "inside" accounts of every twist, turn, argument, meeting and memo, allegations and counter-allegations, at Goldman and lots of details about who knew what, and when. All very entertaining. But if you want to stay focused on what really matters, just remember the advice Hal Holbrook gave Robert Redford in "All the President's Men." Follow the money. And don't lose sight of the "overall."
The Federal Reserve and the banks join forces against Blanche Lincoln's derivatives proposal Ezra Klein - WashingtonPost.com The banks, of course, aren't big on Blanche Lincoln's idea to spin derivatives-trading desks out of the banks. Particularly the big banks, which as you can in the graphic atop this post, pretty much control the market. But it turns out the Federal Reserve is on their side. According to the Wall Street Journal, "the Federal Reserve over the weekend tried to kill the provision," sending lawmakers a letter saying the idea should be "deleted" from the bill. But as it is, the idea actually appears to be gaining ground, moving from some weird regulation that Lincoln proposed and nobody expected to part of the actual bill.
Peter Schiff vs James Galbraith on CNBC 4/26/10
Finance-Bill Proposal Worries Banks BY SCOTT PATTERSON AND ROBIN SIDEL - WSJ.com Forced Spinoffs of Risky Trading Operations Would Upend a Profitable Wall Street Business A proposal gaining ground on Capitol Hill to force banks to spin off their derivatives-trading operations would represent a severe blow to one of Wall Street's most profitable businesses. Banks took in about $20 billion in revenues in 2009 on trading of derivatives, according to industry estimates of the size of the market for financial contracts tied to other assets, such as oil or mortgages.
"Suck it up. The party's over." Washington's Blog Plan to replace dollars with SDRs? America Is Losing Its Imperial Status, And Global Institutions Such As The IMF, G20 And BIS Are Filling The Void When the International Monetary Fund or World Bank offer to lend money to a struggling third-world country (or "emerging market"), they demand "austerity measures". As Wikipedia describes it: In economics, austerity is when a national government reduces its spending in order to pay back creditors. Austerity is usually required when a government's fiscal deficit spending is felt to be unsustainable. . . . Since the IMF and World Bank lend to third world countries, you may reasonably assume that this has nothing to do with "first world" countries like the US and UK. But England's economy is in dire straight, and rumors have abounded that the UK might have to rely on a loan from the IMF. And as former U.S. Comptroller General David Walker said: People seem to think the [American] government has money. The government doesn't have any money. Indeed, the IMF has already performed a complete audit of the whole US financial system, something which they have only previously done to broke third world nations. . . . The IMF is - in fact - now saying that the U.S. must live more austerely. . . . . And the IMF's currency - Special Drawing Rights (SDRs) - may become the world's reserve currency.
Whose Country Is This? By Patrick J. Buchanan - CNSNews.com With the support of 70 percent of its citizens, Arizona has ordered sheriffs and police to secure the border and remove illegal aliens, half a million of whom now reside there. Arizona acted because the U.S. government has abdicated its constitutional duty to protect the states from invasion and refuses to enforce America's immigration laws. "We in Arizona have been more than patient waiting for Washington to act," said Gov. Jan Brewer. "But decades of inaction and misguided policy have created an unacceptable situation." We have a crisis in Arizona because we have a failed state in Washington.
What's More Important: Liberty Or The Entity That Protects It? By Chuck Baldwin on (Apr 27, 10) - CapitolHillCoffeeHouse.com Let me ask readers a question. What's more important: freedom and its undergirding principles, or the entity meant to protect it? A word of caution: be careful how you answer that question, because the way you answer marks your understanding (or lack thereof) of both freedom and the purpose of government. Thomas Jefferson--and the rest of America's founders--believed that freedom was the principal possession, because liberty is a divine--not human--gift. Listen to Jefferson: "We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men."
Glenn Spencer - The Second Mexican-American War (June 30, 2008)
Civil War on U.S. Border.....Mexican Citizens Fed Up (Feb 23, 2009)
Gold is real asset as paper currencies plunge By Howard S. Katz - CommodityOnline.com Many a weekend since the beginning of the year has been occupied by a "crisis" in the euro. But this weekend's "crisis" seems to be the mother of them all. As such, it will probably put an end to them, and the gold market will pull out of its funk and resume its bull trend. The euro is based on the West German deutschmark. In 1957, Konrad Adenauer instituted the Bundesbank and started Germany on a path of very limited issues of money. Like all other countries of the time the Bundesbank issued paper money. However, it issued it far more conservatively than any other central bank. As a result, Germany's progress was so rapid that it became known as the "German Economic Miracle."
Gold is forever - just store it! By Adam - CommodityOnline.com Although the U.S. economy and the dollar remain on shaky ground, many analysts are predicting that one thing will remain strong during 2010, the price of gold. The strong price of gold can help consumers weather the current economic downturn in two ways. For investors looking to store their wealth, gold provides an attractive alternative to the stock market or real estate. And for consumers and small businesses seeking quick cash to pay off outstanding bills, now is an excellent time to be selling your scrap gold, outdated gold jewelry, or other gold assets.
Ride Wall Street's "Great Global Commodities Grab" BY WILLIAM PATALON III, Executive Editor, Money Morning . . . . Banks are now also taking physical delivery of the gold they control through certain futures contracts, instead of settling the contracts in cash at maturity. JPMorgan and Goldman Sachs Group Inc. - two of the real heavyweights in this realm - have recently purchased metals-warehousing businesses. To make these transactions, the two banks spent a combined $2.2 billion-plus, so you know they're taking this whole physical-commodities strategy very seriously - as well as to an entirely new, and unprecedented, level. . . . Globally speaking, banks realize that we're in long-term - secular - bull market for natural resources. And they understand that the end of this "bull run" is nowhere in sight. These big banks have more than $4 trillion riding on commodities, so they're making sure that this trade goes their way. How better to influence the price of a commodity than to control its supply - or at least enough of it to have a measurable impact? That's why they're taking steps to gain physical control.
Investors flock to silver now LONDON (Commodity Online): Popularity of commodity investment websites and increased awareness among investors have come to the rescue of silver in 2010 with the metal winning the hearts of many top level investors in the recent past. Till now, considered as a metal which always plays second fiddle to gold, silver has come of age now as far as investment is concerned. In a recent analysis, it has emerged that more and more investors are reading about the investment options on websites and they take decisions on investments after considering expert opinions. This has helped a big way silver, which is a favourite for market experts as of now. In 2010, almost all commodity websites and market analysts had advised people to put their money in silver as the metal prices are set to soar in the coming days.
Control Frauds HyperInflate and Extend Bubbles Maximizing Damage - A Control Fraud at Work in the Silver Market Short Positions? JESSE'S CAFÉ AMÉRICAIN Here is a working paper by William K. Black about 'control frauds' and how they relate to the most recent credit crisis in the United States, a breakdown of stewardship that has placed the rest of the world's financial sector at risk as well. Control frauds are by their very nature conspiratorial in that they involve the suborning of regulators, ratings agencies, exchanges, the media, and legislators to ignore and facilitate misrepresentation that enable white collar crime. They are difficult to prosecute because by their nature they involve twisting the legal into the extra-legal on a broad basis to achieve a particular financial effect, while limiting many specific aspects to the letter of the law, or at least the gray areas.
IMF's Lipsky Discusses Greece's Debt Crisis, Aid Package
A Realistic View of Goldman Sachs and Their Lastest Quarterly Results By: Reggie Middleton - SafeHaven.com I'm about to go over Goldman Sach's 1st quarter 2010 results, but before I do, let's recap the last quarter's price movement and the consequences of believing in infallible name brands. This is basically a continuation of the rant - So, How Many Banks and Analysts Were Bearish On Goldman Before Today? and Is the Threat to the Banks Over? Implied Volatility Says So. Some may ask why I'm being so generous in regards to the extent of this quarter's earning review. Well... A European institutional subscriber recently stated he was able to get the same content found in my offerings from his investment bank research. Whaaatt!!! I told him that he probably wasn't reading the subscriber content. He wrote back stating that that wasn't the case. He also said that he doesn't see any fundamental analysis in the work. I nearly fell out of my chair. Hmmmm.
Goldman CEO says firm didn't bet against clients Lloyd Blankfein says in remarks prepared for his Congressional testimony on Tuesday that the company can't survive without its clients' trust. (AP) - Goldman Sachs Group Inc.'s chief executive says in prepared remarks to Congress that the firm didn't bet against its clients and can't survive without their trust. CEO Lloyd Blankfein and several other executives will testify Tuesday to the Senate Permanent Subcommittee on Investigations. Earlier this month, the Securities and Exchange Commission filed a civil fraud case against Goldman, saying it misled investors about securities tied to home loans.
Goldman Sachs: 7 power players CNNMoney.com Lloyd Blankfein, Fabrice Tourre and 5 other Goldman Sachs managers are appearing on Capitol Hill Tuesday to defend the company's mortgage market moves.
Lloyd Blankfein, Chief Executive Officer and Chairman - "It was one of the worst days in my professional life."
Fabrice Tourre, Executive Director, Structured Products Group
David Viniar, Chief Financial Officer
Craig Broderick, Chief Risk Officer
Dan Sparks, Former Managing Director and Head of the Mortgage Department
Josh Birnbaum, Former Managing Director, Mortgage Department
Michael Swenson, Managing Director, Mortgage Department
Goldman's fall, part of the plan Goldman culture crash By David Weidner, MarketWatch From white shoes to the 'Fabulous Fab' tap dance NEW YORK (MarketWatch) -- More than anything else, the Securities and Exchange Commission's fraud case against Goldman Sachs Group Inc. has illustrated the fall of the firm from Wall Street's preeminent bank to riverboat casino. The case is the final indictment in long decline for the brokerage. Some of the wounds have been self-inflicted, others by outside forces. The upshot is that during the last decade, Goldman has transformed from a client-oriented firm to a bona fide hedge fund. For a while, it was one of the best. But now, as the SEC case shows, it's as sloppy and imperfect as any on Wall Street.
Industrial Wind and the Wall Street Cap and Trade Fraud, Part 2: Cap and Trade blowback By James Hall on (Apr 27, 10) CapitolHillCoffeeHouse.com What is the primary reason that Wall Street wants to finance, maintain huge equity interests and underwrite industrial wind development? Cap and Trade is the hidden motive behind this defective alternative energy technology and wind turbine development. The environment and the economy will suffer incalculable greater harm.
Wall St. reform plan is 'weak'
Spitzer & Black: Questions from the Goldman Scandal by Eliot Spitzer and William Black - NewDeal2.0 Spitzer and Black argue that the Goldman revelations underscore the need for serious financial reform. For those who have spent years investigating fraud, it was no surprise to hear that Goldman Sachs, the (self-described) jewel of Wall Street, is the latest firm to emerge from the financial crisis with tarnished reputation. According to a lawsuit brought by the Securities and Exchange Commission, Goldman misrepresented to its customers the quality of the toxic assets underlying a complex financial derivative known as a “synthetic collateralized debt obligation (CDO).” As you may now have heard, the story involves a pair of Paulsons. As CEO of Goldman, Hank Paulson oversaw the buying of large amounts of CDOs backed by largely fraudulent “liar’s loans.” When he became U.S. Treasury Secretary, he went on to launch a successful war against securities and banking regulation. Hank Paulson’s successors at Goldman saw the writing on the wall and began to “short” CDOs
Market Manipulation, Systemic Risk and Fraud, Pure and Simple, And It Continues Today JESSE'S CAFÉ AMÉRICAIN This article by the Financial Times should remove any doubt in anyone's mind that Goldman Sachs was willfully selling fraudulent financial instruments. It appears that they were working in conjunction with Ratings Agencies, Mortgage Origination Firms, and Hedge Funds to cheat investors. "Cheat" means to circumvent or distort the normal price discovery process through misrepresentation, price manipulation, and omissions and distortion of key data.
Obama Launches His Fiscal Commission By Susan Jones, Senior Editor Republicans Call It A Front for Tax Hikes (CNSNews.com) - As President Obama formally launched his deficit-reduction task force on Tuesday, Republican leaders said it will simply provide Democrats with the cover they need to raise taxes. The bipartisan National Commission on Fiscal Responsibility and Reform is co-chaired by former White House Chief of Staff Erskine Bowles, a Democrat, and former Republican Senate Whip Alan Simpson. The panel is examining ways to cut costs and boost revenues to produce a maximum deficit of $550 billion by 2015, an amount equal to about 3 percent of the total U.S. economy. That would require deficit savings of at least $250 billion, the Associated Press reported.
NY tops nation in mortgage fraud By James Comtois - CrainsNewYork.com Metro area's rise to the top of the pile came amid a surge in such cases last year; 12% of all cases in the U.S. came from the metro area in 2009. New York City has earned the dubious distinction of the nation's leader for mortgage fraud in 2009, according to a report released Monday by LexisNexis Mortgage Asset Research Institute. MARI's 12th Periodic Mortgage Fraud Case Report reveals that of the 67,190 Suspicious Activity Reports filed with the Financial Crimes Enforcement Network in 2009, 12% were filed from the New York metro area. New York's rise to the top of the pile came amid a surge in such cases last year. "The data suggests that in 2009 there was a 7% increase in the number of incidents of fraud reported, on top of the 26% increase reported in 2008," said Jennifer Butts, MARI manager of data processing and report co-author. "While this is a noticeable increase, we believe that mortgage fraud is significantly understated."
Denver home prices up for 4th straight month DENVER BUSINESS JOURNAL - BY Mark Harden For the fourth month in a row, home prices in the Denver area showed a year-over-year increase in February in the latest S&P/Case-Shiller Home Prices Index, despite a month-over-month decline. The closely-watched report from Standard & Poor's showed metro-Denver home prices rising 3.6 percent between February 2009 and February 2010. Out of 20 U.S. cities in the Case-Shiller report, released Tuesday, Denver was one of nine that showed a year-over-year increase in prices. The 3.6 percent rise was Denver's largest year-over-year increase of the last four months. Denver prices climbed 2.6 percent in January from a year earlier, 1.2 percent in December 2009 and 0.5 percent in November 2009.
Colorado long-term care costs 12% higher than U.S. DENVER BUSINESS JOURNAL Costs for long-term care for the elderly and others in Colorado are 11.7 percent higher than the median cost nationwide, according to the latest annual survey from Genworth Financial Inc. Genworth -- which sells long-term care insurance and other financial products -- said its "2010 Cost of Care Survey" shows that the median annual cost for home care and other forms of long-term care in Colorado is $48,574, versus a national median of $43,472. It said Colorado ranks as the 13th most-expensive state for long-term care. The survey indicates that home-care costs in Colorado have risen roughly 2 percent each year over the last five years. It said median fees for licensed home health aide services in the Denver-Aurora area are $21 an hour, versus a U.S. median of $19.
Security Threat in NYC MTA subway? MIKE JACCARINO, PETE DONOHUE - NYDailyNews.com Get magic keys that open the gates at 468 subway stations for only $27 This is the key to the city, and it cost only $27. The key unlocks swing gates next to every subway turnstile, granting easy - and free - access to all platforms and trains. And while these universal keys should only be in the hands of authorized transit workers or police and fire officials, copies have fallen into the hands of some regular New Yorkers - and they are taking the MTA for a ride. "I've been saving a lot of money. There are 468 stations in the city and you can use it at any one of them," said a Brooklyn man who says he obtained a key from a transit worker for $27, the same price as a one-week unlimited MetroCard.
The Coming Tsunami By John LeBoutillier - CapitolHillCoffeeHouse.com The new Pew Poll, which has found that a stunning 80% of the American people now distrust the government, is a window into a long-building political trend: the voters this November are furious at everybody but especially at the Democratic leadership of Obama/Pelosi/Reid. Thus, the inevitable outcome in the mid-term elections is going to be a historic thrashing of the "in" party - the Democrats. They are going to lose dozens of seats in the House - perhaps enough to lose control - and maybe 5-8 seats in the Senate, too. (Make no mistake: the American people are ticked off at the GOP, too. But the Democrats are in power so they will feel more of the wrath. But in primaries like Florida and Arizona, GOP media establishment faves like Charlie Crist and John McCain may lose to this same anti-establishment anger.)
Old RNC vs. New GOP -- Upholding the Constitution By JB Williams on (Apr 27, 10) - CapitolHillCoffeeHouse.com The battle lines for the future of America's conservative party have been drawn, though not all that clearly yet. It is the old RNC and their loyal guard, against the new GOP made up of constitutionally conservative activists across the country, currently moving into power precinct-by-precinct via operations like National Precinct Alliance (NPA).
Tea Party hoping to steer Republicans further to the right BY JOE HALLETT - Columbus Dispatch.com A deeply involved Republican from northwestern Ohio called last week with a tip: The Tea Party is trying to take over the Ohio Republican Party Central Committee and, if successful, will oust state party Chairman Kevin DeWine. If she's right and that happens, the Ohio GOP will die. The primary job of a party chairman is to raise the millions needed to pay rent, utilities and staff, support candidates and win elections. Since 1988, when Robert T. Bennett began his 20-year reign as chairman, the Ohio GOP has been enormously successful in fundraising and winning.
Arizona Gov. Jan Brewer signs immigration law 124 years after great-grandmother's journey MICHAEL DALY - NYDailyNews.com When she came here as an Arizona delegate to the 2004 Republican National Convention, Jan Brewer seemed as sunny as her home state. "Just fantastic," she exclaimed about New York. "So many things to see!" Things like the Statue of Liberty, which had just reopened after being closed after 9/11. The monument was dedicated in 1886, which public records suggest was the very year Brewer's great-grandmother arrived in New York from England.
Aztlan Rising
AZTLAN Charles Truxillo, Professor, University of New Mexico "Native-born American Hispanics feel like strangers in their own land." Under the euphuism 'Hispanic Homeland' and 'Nation of Aztlan,' activists from numerous organizations including Mexican American Legal Defense and La Raza (The Race) activists are attempting to annex large portions of SW United States to Mexico. "Republica del Norte," the Republic of the North, which would include the present U.S. states of California, Arizona, New Mexico, Texas, plus southern Colorado, along with several current Mexican states, is "an inevitability" says Charles Truxillo, professor, University of New Mexico. He further states the new "Hispanic Homeland" should be brought into being "by any means necessary." The Mexican-American Legal Defense and Education Fund (MALDEF), the National Council of La Raza (NCLR), Movimiento Estudiantil Chicano de Aztlan (MEChA), and the National Immigration Forum (NIF) whose names imply grassroots organizations reflecting the will of American Hispanics, do not represent mainstream American Hispanic opinion. Rather, they speak only in their own best interests, favoring the mass immigration that gives them more constituents they can then profess to represent. Polls show that Hispanic-Americans, like all Americans, support stronger enforcement of our immigration laws.
The Mexican Invasion of America has Started!!!
What about Voter Intimidation by Black Panthers, Mr. President? By John Lillpop on - CapitolHillCoffeeHouse.com With each passing day, it appears as though President Barack Obama is on a mission to divide America along racial and economic lines. The administration seems bent on legislating one set of rules and perks for people of color, including anemic whites, and a package of higher taxes, restricted freedoms, and government scrutiny for Caucasians. Is this not race-based fascism at its evil worse? Evidence of this evil CHANGE is abundant in the president's reaction to Arizona's SB 1070, the law that deals with illegal aliens. The law made necessary because of President Obama's refusal to uphold the rule of law and enforce U.S. borders.
Immigration fix: Political science fiction by Mark Silva - SwampPolitics.com "We don't have 12 million pairs of handcuffs in this country,'' Sen. John McCain of Arizona once said, during a debate over immigration reform that ultimately collapsed in the Senate in the summer of 2007. The Arizona Republican, the late Democratic Sen. Edward M. Kennedy of Massachusetts and others were sponsoring a bipartisan effort to fix the nation's broken borders, institute a new guest-worker program and offer a path toward citizenship for an estimated 12 million immigrants living illegally in the United States.
La Raza and Jews on Collision Course in Alta California There are now significant signs of an impending collision between La Raza and Jews in California. The signs were first manifested during the state's 1998 election primary when a Mexicano defeated the Jewish candidate Richard Katz in the state's 20th Senate District and when the wealthy Jew, Ron Unz, was successful in having an anti-bilingual education initiative approved by the state's electorate. The battle lines between Mexicanos and Jews in California have been drawn and they have been drawn most clearly in the City of Los Angeles. La Raza's battle for the 20th Senate District is a perfect example of how the Jews will fight tooth and nail to maintain their dominance in state government. The victorious battle by La Raza in the 20th S.D., which is located in the middle of the San Fernando Valley in Los Angeles, was only a small skirmish of a larger battle that is about to occur as we seek more equitable proportional representation in state and local governments.
Aztlan Underground "Nazio Ibiltaria Naiz"
Mexico will cause the collapse of America !!!!
Persistent Unemployment Looms As Political Pitfall for Obama, Other Democrats By Julie Pace, Associated Press Washington (AP) - Even as he touts his efforts to put more Americans to work, President Barack Obama faces a public increasingly skeptical of his ability to bring jobs back to Main Street. During stops in Iowa, Illinois and Missouri, Obama will try to convince voters that his economic policies are working, despite an unemployment rate that's expected to remain at painfully high levels for months if not years.
Health Care Law Not Working As Advertised for Some Families By Ricardo Alonso-Zaldivar, Associated Press Some families will face wait to cover young adults Washington (AP) - President Barack Obama's health care overhaul was supposed to take care of a major worry for parents of 20-year-olds making the transition to work: keeping the kids insured. But what sounds like a simple solution -- starting this year, letting young adults stay on their parents' health plan until they turn 26 -- involves a surprising amount of fine print. As a consequence, some families may have to wait until 2011 to get their kids covered, particularly if the parents are working for a large employer, benefits experts and government officials say.
Nearly 4 million to pay health insurance penalty by 2016 By Associated Press WASHINGTON -- Nearly 4 million Americans -- the vast majority of them middle class -- will have to pay the new penalty for not getting health insurance when President Barack Obama's health care overhaul law kicks in, according to congressional estimates released Thursday. The penalties will average a little more than $1,000 apiece in 2016, the Congressional Budget Office said in a report. Most of the people paying the fine will be middle class. Obama pledged in 2008 not to raise taxes on individuals making less than $200,000 a year and couples making less than $250,000.
The New Secessionists By Chris Hedges - Truthdig.com Acts of rebellion which promote moral and political change must be nonviolent. And one of the most potent nonviolent alternatives in the country, which defies the corporate state and calls for an end to imperial wars, is the secessionist movement bubbling up in some two dozen states including Vermont, Texas, Alaska and Hawaii. These movements do not always embrace liberal values. Most of the groups in the South champion a "neo-Confederacy" and are often exclusively male and white. Secessionists, who call for statewide referendums to secede, do not advocate the use of force. It is unclear, however, if some will turn to force if the federal structure ever denies them independence.
Feds may set Gulf oil slick ablaze By Steve Hargreaves NEW YORK (CNNMoney.com) -- Coast Guard officials are considering setting the Gulf of Mexico oil slick on fire as it moved Tuesday to within 20 miles of sensitive ecological areas in the Mississippi River Delta. Officials say it could become one of worst spills in U.S. history. Oil is still leaking at a rate of about 42,000 gallons a day from the well, located some 50 miles off the coast of Louisiana beneath a drill rig that exploded and sank last week. Eleven workers are still missing following the incident, and are presumed dead.
X-37B: Secret plane launched
U.S. Prepares Non-Nuclear "Doomsday" Weapon Pravda.ru In a recent interview with the newspaper The New York Times, the U.S. president, Barack Obama revealed that his administration gave the green light for the study and development of a new kind of concept of a military attack without the use of nuclear weapons, but with the same destructive power. This concept is called Prompt Global Strike, a system of attack with missiles and "conventional" weapons that can reach any point on earth within an hour. Political and financial support to the project is not lacking. Robert Gates, Secretary of Defense, told the U.S. broadcaster ABC that the administration has embraced the Prompt Global Strike. This includes the $250 million that Obama has asked from Congress in order to explore this alternative, which combines a military and aerospace technology edge. John McCain, Republican presidential candidate in 2008, has also expressed his support for a program that is both "expensive as essential."
Re-Election of Sudan's President Underscores Limits of International Court By Patrick Goodenough, International Editor (CNSNews.com) - Sudanese President Omar al-Bashir, the first sitting leader to be indicted for war crimes by an international court, has now become the first leader in that position to win re-election. In a result that underlined the inability of the International Criminal Court to enforce its decisions, Bashir of the ruling National Congress Party (NCP) was declared winner Monday with 68 percent of the vote. Bashir has ruled Sudan since leading a military coup in 1989.
Eyjafjallajokull's Economic Impact Goes Beyond Flight Delays BY JON D. MARKMAN, Contributing Writer, Money Morning I've been looking for an excuse to get the name Eyjafjallajokull into an article, and now I finally have something special to say about the mighty Icelandic volcano that has wreaked havoc with European air traffic. It's mostly science and history, which appeals to my finely honed annotation instinct, but there is most definitely an investment point, which you will have to wait to the end to see. First, I learned today from some hedge-fund sources that scientists believe the real threat from the relatively small Eyjafjallajokull volcano is that it could trigger an eruption in its much larger neighbor, which is called Katla. I was told there's a better than even chance that this would happen.
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“Potential for financial system crisis is still feared”
“Greece has continuing economic problems”
“The Federal government is considering Value-Added-Tax”
“California fighting off bankruptcy”
“Federal government bureaucracy growing fast”
“Unemployment is persistent difficulty for economy” (…and so on)
These seem to be all disjointed headlines. A patch of problems here…a crisis over there…and some difficulty over here. Worry and concern seem to be everywhere and for good reason. Prosperity seems as unreachable as the stars. What will hopefully dawn on people is that there is a common thread throughout all this upheaval. It is really the epic economic battle of “Freedom vs. Statism”.
Let no Incumbent Survive (the next Three Elections) by Mike Endres - FinancialSense.com Fact: There is no difference between the Republican and Democratic political parties. Both are concerned only with maintaining power in the Presidency and Congress and over the American citizen and will do whatever it takes to buy, bribe or force within and outside the law to accomplish this goal. Fact: The appointed and supposedly independent "regulators" appointed by President Obama (and those before him) are a farce on the very face of it. They do not regulate or act as watchdogs for the public but instead act in every way to enable the Military/Industrial complex, banks and power brokers to cheat, lie, misuse taxpayer funds for personal gain and generally rip us all off with complete impunity (Goldman Sachs not withstanding). They do not enforce laws that are on the books now, much less provide inputs to a currently useless and corrupt Congress on how to to protect the taxpayer or figure more ways to eliminate waste and fraud in order to release more funds to the private sector to truly create jobs and new industries and technology.
George Soros and the next financial crisis by Clif Droke - FinancialSense.com Speculation has been rife in the financial press lately about the possibility of another financial market meltdown. It seems that investors are waiting for the proverbial “other shoe” to drop as worries continue to mount over the sustainability of the financial market recovery that began over one year ago. Even the president of the United States has jumped on the fear bandwagon. On Thursday, President Obama was stumping in New York as he attempts to win favor for his proposed financial overhaul legislation. Playing the fear card, Obama said it was “essential that we learn the lessons of this crisis, so we don’t doom ourselves to repeat it. And make no mistake; that is exactly what will happen if we allow this moment to pass.”
Ron Paul: They're Warmongering Like It's 2002!
Gold could hit $1,600/oz but silver, pgms will likely outperform Author: Dorothy Kosich - Mineweb.co.za RENO, NV - Under the right circumstances, BMO Capital Markets' Bart Melek says gold could rally as high as $1,600 per ounce by 2011. In analysis published Thursday, Melek said, "Silver, platinum and palladium are expected to outperform gold, benefiting from their quasi-money properties and high use in industrial applications." "Gold is projected to strengthen modestly, buoyed by long-term inflation concerns, sovereign debt, the U.S. dollar, fiat currencies generally and the expectation that the Fed will not raise rates aggressively," he said.
Gold survives Goldman Sachs By Peter Brimelow, MarketWatch Radical gold bugs jubilant, if jaundiced NEW YORK (MarketWatch) -- Gold rebounds, and the gold bugs are gathering. When I last wrote about gold, it was after what I called "freaky Friday" -- the steep, chart-disrupting price slump in gold triggered by heavy selling following the Goldman Sachs litigation announcement. About the only element in the gold-watching crowd not aghast was the hard-bitten group I call the "radical gold bugs," mustered around Bill Murphy's LeMetropolecafe Web site. They were comforted (as so often) by their confidence in Indian buying. And they were even morbidly cheered (they're funny that way) by what they regarded as further proof of their defining belief: that the gold market is often manipulated by public and private interests.
Gold futures inch up after seesaw session By Claudia Assis & Kate Gibson, MarketWatch Rising dollar takes toll on metal; platinum sets 20-month high -- SAN FRANCISCO (MarketWatch) -- Gold futures edged higher Monday as concerns about Greece's aid package and euro-zone countries provided a floor for prices, but a stronger dollar capped bigger gains. Gold futures for June delivery, the most active contract, gained 30 cents, or 0.03%, to settle at $1,154 an ounce on the Comex division of the New York Mercantile Exchange. It earlier hit an intraday low of $1,151.10 an ounce and an intraday high of $1,160.70 an ounce. Other metals tracked gold's moderate gains, with platinum setting a 20-month high for a most-active contract.
Venezuela's Hugo Chavez threatens to nationalize gold mining Author: Dorothy Kosich - Mineweb.co.za -- "We cannot allow national and transnational mafias to continue destroying our homeland," the Venezuelan President said during his regular Sunday broadcast RENO, NV - After seizing the Las Brisas gold project from Gold Reserve and denying appeals for final approval of Crystallex's Las Cristinas gold mine, Venezuelan President Hugo Chavez has now threatened to nationalize gold mining concessions. During his regular Sunday broadcast, Chavez said, "If we are going to exploit our gold reserves we will have to nationalize the lost, recover and put an end to the degenerative (system of) concessions...they have only served to deplete the rainforests, the mines, water supplies and the environment."
Climbing The Wall of Worry by Warren Bevan - FinancialSense.com While things are incredibly bullish everywhere you look, including the precious metals, options expiry is Tuesday April 27, so be aware gold and silver could see some consolidation until that passes. The general markets continue to power higher in the classic “wall of worry” fashion. I worry every day about holding positions overnight, but they almost always seem to continue higher the following day. We are nearing a top, but until then I am surfing that wave higher, nervously.
The Fall of the Euro By Howard S. Katz - GoldSeek.com Many a weekend since the beginning of the year has been occupied by a “crisis” in the euro. But this weekend’s “crisis” seems to be the mother of them all. As such, it will probably put an end to them, and the gold market will pull out of its funk and resume its bull trend. The euro is based on the West German deutschmark. In 1957, Konrad Adenauer instituted the Bundesbank and started Germany on a path of very limited issues of money. Like all other countries of the time the Bundesbank issued paper money. However, it issued it far more conservatively than any other central bank. As a result, Germany’s progress was so rapid that it became known as the “German Economic Miracle.”
On the Brink of an Asset Explosion, II by Toby Connor - FinancialSense.com Let me start off by saying the market should be correcting. Sentiment has reached ridiculous bullish extremes, the kind of extremes that led to the January /February correction. That correction separated the second leg of the bull from the third. But let’s face it, sentiment has been in this condition for several weeks now and the best we could muster was a minor correction of 30 points on the news the SEC was filing charges against Goldman Sachs for fraud.
Bureaucracy Backfire By: CAPTAINHOOK - GoldSeek.com As with Rome, that became the globally unchallenged center of power and finance in its time, so to is the American Empire visibly rotting from inside now as well, which will be its undoing. The elitists steer the bureaucracy to do their bidding in an effort to increase the power of the machine, and this can go on for some time, which it has. However again, as with all such fascist like episodes in history, the bureaucracy grow past sustainable mass and eventually must feed on itself, playing the blame game in an attempt to maintain a semblance of credibility with the public they intend to keep raping. That’s what the financial crisis hearings are suppose to do. They are suppose to make an increasingly besieged and weary public feel better about continued gang rape by the bureaucracy via increasing taxes, loss of liberties, and confiscation of wealth.
U.S. Finally Starts Dumping Citigroup -- Smart Move, Tim Geithner! by Henry Blodget - Tech ticker After years of bailouts, outrage, and disappointment at the hands of Wall Street behemoth Citigroup (C), the US taxpayer is finally catching a break. The Treasury is unloading the first batch of the 7.7 billion Citigroup shares that taxpayers acquired in the course of bailing the firm out at least three times during the financial crisis--and, on these shares, anyway, taxpayers are actually making a profit.
Republicans block bank-reform bill By Ronald D. Orol, MarketWatch Democrats fail to overcome filibuster, may try again on Wednesday WASHINGTON (MarketWatch) - The Democrats' efforts to change how the nation's banks are regulated received a major setback Monday after Republicans voted unanimously to block the bill from coming up for debate by the full Senate. "We're not going to be rushed based on assurances from the other side," said Senate Minority Leader Mitch McConnell, R-Ky., shortly before the vote.
4 tough questions for Goldman Sachs By David Ellis NEW YORK (CNNMoney.com) -- Goldman Sachs' moment of public flogging is here. On Tuesday, top representatives from Wall Street's most powerful firm will appear on Capitol Hill, where they are expected to endure a harsh line of questioning from lawmakers about their role in helping bring about the financial crisis. Much of the focus however will likely center on the complicated mortgage investment Goldman (GS, Fortune 500) sold that is now the subject of a civil fraud suit brought against the firm earlier this month by the Securities and Exchange Commission.
Goldman's "Fabulous" Fab's Conflicted Love Letters By Steve Eder and Karey Wutkowski - ABCNews.com NEW YORK/WASHINGTON (Reuters) - Fabrice Tourre and his girlfriend talked like a couple very much in love. They emailed back and forth about how they wanted to curl up in each other's arms and how they looked forward to tender moments together. Tourre, a Goldman Sachs bond trader, also wrote in the emails of the impending collapse of the subprime mortgage market and how he was masterminding ways at Goldman to make money from it. Little did they know that three years later these very personal emails written through Tourre's Goldman Sachs e-mail account would become part of one of the biggest investigations into the subsequent financial crisis. In the email exchanges between Tourre and his girlfriend, Marine Serres, Tourre comes off as a young, hotshot trader who foresaw the subprime meltdown while still selling shoddy subprime-backed products so prolifically he could peddle them to "widows and orphans."
Tourre emails show agony, ecstasy of being a banker By Alistair Barr, MarketWatch Goldman executive director wrestled with 'ethical questions' SAN FRANCISCO (MarketWatch) -- Fabrice Tourre comes across as an arrogant investment banker in the Securities and Exchange Commission lawsuit against him and his employer Goldman Sachs Group Inc. But personal emails released by Goldman this weekend show Tourre struggling with "ethical questions" as he sold complex mortgage-related securities that he worried were suspect. The SEC charged Goldman with securities fraud on April 16, alleging the investment bank didn't tell investors in a collateralized debt obligation that hedge fund firm Paulson & Co. helped structure the deal and was betting against it. Goldman and Paulson have denied wrongdoing.
Inner workings at Goldman revealed By Stephanie Kirchgaessner in Washington and Francesco Guerrera in New York - FT -- In their 16-month probe into Goldman Sachs, Senate investigators described on Monday how they frequently found the letters “LDL” in company e-mail correspondence. The letters were short for “Let’s Discuss Live”, and at that point, investigators said, the trail went cold. But even though Goldman had a habit of keeping sensitive discussions out of e-mails, some documents shed light on its inner workings. Among them are self-written career appraisals by former executives who will testify on Tuesday before a US Senate panel about its trading activities in the financial crisis.
"Completely Wicked": Martin Wolf and Simon Johnson on Goldman Fraud Case by Aaron Task - Tech Ticker -- John Paulson and top associate Paolo Pellegrini have broken their silence on the hedge fund's role in the Goldman fraud case. In a letter to investors, Paulson told clients the firm's role in the Abacus deal was "appropriate and conducted in good faith," The FT reports. Meanwhile, CNBC reports Pellegrini told the government he informed ACA Management that Paulson intended to short the Abacus portfolio at the heart of the SEC's fraud charge. If true, the testimony would undercut the SEC's claim that ACA was kept in the dark about Paulson's intentions.
Senate Panel Says Goldman Sachs 'Misled the Country,' Helped Create Housing Bubble By MATTHEW JAFFE - ABCNews.com Sen. Carl Levin: Goldman Sachs Helped Inject 'Toxins' Into Financial System Wall Street powerhouse Goldman Sachs helped create a housing bubble by selling securities backed by risky subprime mortgage loans and then profited off that bubble's bursting by secretly betting against the market, a Senate investigation has found. A day before a high-profile hearing featuring numerous Goldman Sachs officials, the Senate Permanent Subcommittee on Investigations released a flurry of excerpts from internal bank documents that the panel says show that the embattled firm misled the American public about its role in the build-up to the financial crisis in September 2008.
Goldman Emails Show Need for Transparency: Summers WASHINGTON (Reuters) - Emails sent by Goldman Sachs Group Inc's executives on money the firm made by betting against risky mortgage securities highlight the need for transparency in financial markets, senior White House adviser Lawrence Summers said on Sunday. Summers, on CBS's "Face the Nation," said he would not comment on specifics of a fraud suit against Goldman brought by the Securities and Exchange Commission.
Euro Falls on Concern Greece Aid Package Won’t Contain Crisis By Yasuhiko Seki and Ben Levisohn April 27 (Bloomberg) -- The euro dropped against the yen on concern the European Union-led 45 billion euro ($60 billion) aid package for Greece won’t stop the deficit crisis from spreading. Europe’s common currency traded near its lowest level since January versus the pound as German Chancellor Angela Merkel said she won’t release funds for Greece until the nation has a “sustainable” plan to reduce its shortfall. The dollar traded near its strongest level in almost three weeks versus the yen on speculation the Federal Reserve is moving closer to withdrawing stimulus as the U.S. economic recovery gathers momentum.
Greece in limbo will keep markets volatile DANIEL BASES AND VIVIANNE RODRIGUES - Mail & Guardian Until investors have a clear idea of exactly how much money Greece will receive from the European Union and the IMF -- and when -- uncertainty stemming from the Hellenic Republic's growing fiscal despair will weigh on global markets. For Greece, the situation is critical as the cost of insuring its debt against default jumps from record to record, and the cost of raising capital to pay off old debts and run the country has spiraled out of control.
Rogoff Says Greece May Not Be Europe’s Last Bailout By Simon Kennedy April 26 (Bloomberg) -- Greece is unlikely to be the last euro nation to need an International Monetary Fund bailout, with Ireland, Spain and Portugal “conspicuously vulnerable,” said Harvard Professor Kenneth Rogoff. “It’s more likely than not that we’ll need an IMF program in at least one more country in the euro area over the next two to three years,” Rogoff, a former IMF chief economist who has co-authored studies of financial and sovereign debt crises, said in a telephone interview. “The budget cuts needed in Europe in many countries are profound.”
Greek bonds plunge again By David Oakley in London, Quentin Peel in Berlin and Kerin Hope in Athens - FT.com -- Greek bond markets plunged on Monday amid growing worries among investors that the country will need to restructure its debts in spite of a proposed €45bn ($60bn) assistance package from the international community. The yield on two-year Greek government bonds, which has an inverse relationship with price, jumped 3 percentage points – the biggest one-day rise since the country joined the euro nine years ago – to close at 13.522 per cent.
G20 wary of overconfidence as Greece cast long shadow LOUISE EGAN AND FRANCESCA LANDINI - Mail & Guardian G20 finance leaders said on Friday they had secured a better-than-expected global economic recovery but were wary of overconfidence as Greece's debt crisis put the focus on worsening public finances. The Group of 20 rich and emerging countries failed to forge consensus on how best to recoup the cost of bailing out financial firms, whose risky bets sent the global economy into its worst tailspin since World War II.
Celente: Obama = Wall Street? Celente on corruption and gambling in finance
Top 10 mortgage fraud states By Les Christie - CNNNews.com NEW YORK (CNNMoney.com) -- Mortgage fraud is still on the rise, according to a report released Monday, despite efforts by law enforcement and policy makers to rein it in. Incidents of mortgage fraud perpetrated by industry professionals increased 7% in 2009, after jumping 26% the year before, said the Mortgage Asset Research Institute (MARI), a division of LexisNexis. The worst-hit states include Florida, California, Arizona, New York, New Jersey and Maryland. (See table at right).
Mortgage Fraud Incidents Rise 7 Pct Last Year By ADRIAN SAINZ AP - ABCNews.com Report finds fraud still a problem for mortgage industry; incidents rise 7 percent in 2009 Incidents of residential mortgage fraud increased last year, a sign that scammers are still targeting the industry despite more diligent efforts to find and report such activity. The number of mortgage fraud reports among loans made in 2009 grew 7 percent, a smaller increase than the 26 percent jump seen the previous year, according to a study released Monday by the LexisNexis Mortgage Asset Research Institute.
Buyers have no moral duty to lenders by Brent T. White Brent T. White Associate professor of law, UA - The Arizona Republic As a result of the housing collapse, many Arizonans have seen their homes lose half of their value. Many owe several hundred thousand dollars more than their homes are worth and are unlikely to dig out of their negative equity hole for decades. For these homeowners, the American dream has become a nightmare - and their financial future is dim. To compound the stress and anxiety, when they've called their lender to work out a solution, they've discovered that their lender won't even talk to them about a loan modification or a short sale as long as they are current on their mortgage.
Why it Would Take 9 Years to Clear the Current Housing Backlog By Rocky Vega - The DailyReckoning.com 04/26/10 Stockholm, Sweden – At this point there are so many bank-owned foreclosed homes that it would take almost nine years to clear out the housing inventory. That time frame doesn’t even begin to take into consideration the additional homes that are likely to also enter the backlog while the current inventory of foreclosed homes gets cleared out. According to The Wall Street Journal: “How much should we worry about a new leg down in the housing market? If the number of foreclosed homes piling up at banks is any indication, there’s ample reason for concern.
Sales-tax hike could weigh heavily on Cave Creek retailers by Beth Duckett - The Arizona Republic Faith Weinberg has conflicting views on a state sales-tax increase that, if passed, would bolster education but deliver a blow to local businesses. A Cave Creek business owner and parent,Weinberg said local businesses are balking at the 1-cent-per-dollar hike that would propel Cave Creek's sales tax to 10.3 cents per dollar, the highest in Maricopa County. But she will likely vote for it anyway. "It's intended to help the schools," said Weinberg, owner of Big Bronco store. "It's not just because I have a son in middle school, but it's the future of our children."
Fed May Keep Rates Low as Tight Credit Impedes Small Businesses By Steve Matthews and Vivien Lou Chen -- April 26 (Bloomberg) -- Michael Chapman, the owner of a building company with 20 employees in Santa Fe, New Mexico, has had trouble getting a bank loan and this month he let Kansas City Federal Reserve Bank President Thomas Hoenig know it. Tight credit in commercial real estate “has really made it impossible for banks to lend to people like me,” the president of Chapman Homes said during a question period after an April 7 speech by Hoenig. Chapman said his company, unable to get a loan to hire 15 workers while big Wall Street firms get record bailouts, is “too small to succeed.”
REIT American Mortgage files for bankruptcy NEW YORK, April 26 (Reuters) - Real estate investment trust American Mortgage Acceptance Co filed for Chapter 11 bankruptcy protection on Monday, blaming a sharp drop in property values. The company, which invests in multifamily and commercial property mortgage loans, said in court documents it had assets of about $6.4 million and liabilities of about $120 million, according to court documents. In 2007, the company had owned assets worth $666.4 million.
California to Refinance $2 Billion Power-Crisis Bonds Next Week By William Selway -- April 26 (Bloomberg) -- California is planning to sell $2 billion of bonds next week to refinance debt that raised money to purchase electricity for cash-strapped utilities during the state’s power crisis in 2001 and 2002. The California Department of Water Resources is scheduled to sell the securities on May 5, according to California Treasurer Bill Lockyer’s office. Tom Dresslar, a spokesman for Lockyer, said the securities will be offered first to small investors, with shorter maturities intended to capture the interest of that market.
Generation Y faces steep financial hurdles by Christine Dugas - USA Today They're called "Generation Y" — teens and twenty-somethings known stereotypically for their coddled upbringing, confidence, opinionated dialogue, free-spending habits and openness to change. Ultimately, however, the more than 50 million members may be best remembered for whether they can overcome the dire financial straits that plague many of them. Even before the recession, those in Generation Y — the latest products of a get-it-now, pay-for-it-later mind-set that has permeated the nation's economy — faced a range of financial pitfalls as they embraced expensive high-tech gadgets and added credit card debt onto student loans.
Sign of the times: Going swapping, not shopping By Olivia Barker, USA TODAY PHILADELPHIA — In a funky corner of this sprawling city, a sisterhood of a traveling black dress is forming. First, Dara Patrusky picked up the Ted Baker halter dress from a Buffalo Exchange thrift store (it still had the tags). Then she passed it on to her friend, Naomi Brownstein. Now, Brownstein has brought it here to the Bohema boutique, where Patrusky, in a twin nod to spring-cleaning season and Earth Day, is hosting her latest clothes swap and where Brownstein hopes the frock finds a new and grateful owner.
Younger adults to pay more for health insurance by Ken Alltucker - The Arizona Republic Health insurers: Rates likely to spike in 2014 Young adults likely will face sticker shock when mandatory health insurance becomes law. Health insurers say that health-insurance rates for young adults in Arizona likely will spike when mandatory coverage starts in four years. Under reform legislation passed last month by Congress, older adults cannot be charged more than three times as much as younger adults just based on age. Such restriction on "age-rating" likely means that younger, healthier adults will subsidize health insurance for older adults when mandatory coverage begins in 2014, health insurers say.
Insurers: Brace for fast and furious costs By Parija Kavilanz - CNNMoney.com NEW YORK (CNNMoney.com) -- As the insurance industry prepares to adjust to reform, two big players say mandated changes that kick in soon could push up premiums faster and greater than before. "The headline for everyone is that costs will be more. Cost will definitely go up," said Mark Bertolini, president of Aetna (AET, Fortune 500), which covers more than 19 million individuals under its plans. However, Bertolini declined to say specifically how much premiums would increase other than to say the biggest impact on them would happen in 2014 when the health law is fully implemented.
Here's the Beef: U.S. Cattle Prices Are Rising With the Economy By BRUCE KENNEDY - DailyFinance.com -- It's been quite a spring for Bill Gray. The former president of the Colorado Cattlemen's Association has been watching the price of beef rise throughout the winter, monitoring the changing prices, sometimes by the hour, on his computer in Ordway, near Pueblo. In August he sold 600-pound steer calves for November delivery at $1 a pound. But last week, comparable-size winter steers in his part of southern Colorado sold at $1.28 a pound. You'd think he'd be pleased to see such a sharp price increase for his product. "I would be very happy if it just stayed where it is," says Gray of the price of beef. "We've had such an upswing in the market since the first of the year. It's going to have to stop and take a breath."
Appeals Court Rules Walmart Sex Discrimination Case Can Go to Trial By EMILY FRIEDMAN - ABCNews.com -- Walmart Fears Suit Could Cost The Chain Billions A class action lawsuit representing more than 1 million women got the green light to proceed today against Walmart Stores Inc. Walmart claims the suit, which alleges the giant chain store discriminates against female employees, could cost it billions of dollars if it is upheld. The reputation of an iconic company is also on the line.
Both sides of immigration debate blame congressional inaction for Arizona law By Peter Slevin - Washington Post -- PHOENIX -- On the grounds of the capitol, in a state that only days earlier had adopted the nation's strictest anti-immigration law, the two sides of an angry debate are united on one thing: They blame Washington. Years of congressional inaction and paralysis on immigration created a vacuum that either forced the Arizona legislature to step in or allowed overzealous legislators to trump federal authority, depending on whom you ask.
Mexican officials condemn Arizona's tough new immigration law By William Booth - Washington Post -- MEXICO CITY -- President Felipe Calderón on Monday vigorously condemned a tough new immigration law in Arizona that requires police to question anyone who appears to be in the country illegally -- a measure Calderón said "opens the door to intolerance and hatred." Under the new law, signed by Arizona Gov. Jan Brewer (R) on Friday, legal immigrants will be required to carry documents proving their status. Police will question anyone they "reasonably suspect" of being undocumented, and illegal immigrants could be detained and handed over to federal authorities. The law takes effect in 90 days. Brewer said the costs of uncontrolled illegal immigration and the lack of enforcement by the federal government forced her state to act on its own.
New Arizona law forcing hard choices on migrants by Tim Gaynor (Reuters) - With Arizona's crackdown on illegal immigrants looming, Guatemalan Samuel Roldan is swapping the family's battered Chevy Suburban, which he feels marks them out as low-income migrants, for a smarter, more corporate-looking Nissan. "When you have an old car with stickers for a Spanish-language radio station ... it's only logical that they will think you are Hispanic and you don't have papers," Roldan said. Roldan is among an estimated 460,000 illegal immigrants in the Mexico border state carefully weighing their options on Monday, three days after Arizona Governor Jan Brewer signed the United States' toughest immigration measure into law.
Boycotts of Arizona immigration law add up By Roger Yu, USA TODAY Many officials in Arizona's tourism and hospitality industry fear that the state's new immigration law is anything but hospitable. Hotel owners, tour operators and convention executives say the law could discourage visitors and companies from meeting there at a time when one of the state's vital industries already is suffering. The law, signed by Gov. Jan Brewer last week, makes it a misdemeanor to not prove lawful U.S. residence when asked to provide such documentation. Already there are ramifications and threats:
Home Tax Credit Called Successful, but Costly By DAVID KOCIENIEWSKI - NYTimes.com Realtors, home buyers and sellers are rushing to complete sales agreements before the tax credit for home purchases expires this week. Home buyers must have a deal by April 30 and close by June 30 to qualify for the federal tax break, up to $8,000 for first-timers and $6,500 for those merely moving to a different residence. Though the Treasury Department and the real estate industry have termed the program a success, helping 1.8 million people buy homes, many tax policy experts say it has been singularly cost-ineffective: most of the $12.6 billion in credits through end of February was collected by people who would have bought homes anyway or who in some cases were not even eligible.
Cape Cod Project Is Crucial Step for U.S. Wind Industry By TOM ZELLER Jr. - NYTimes.com More than 800 giant wind turbines spin off the coasts of Denmark, Britain and seven other European countries, generating enough electricity from strong ocean breezes to power hundreds of thousands of homes. China’s first offshore wind farm, a 102-megawatt venture near Shanghai, goes online this month, with more in the pipeline. But despite a decade of efforts, not a single offshore turbine has been built in the United States. Experts say progress has been slowed by a variety of factors, including poor economics, an uncertain regulatory framework and local opposition.
Oil still leaking from sunken Gulf rig By Steve Hargreaves - CNNMoney.com NEW YORK (CNNMoney.com) -- The well beneath the oil rig that erupted in a deadly blast last week in the Gulf of Mexico is leaking oil at a rate of about 42,000 gallons a day, according to the U.S. Coast Guard. The spill has the potential to become significant if left unchecked, although it would take the better part of a year to rival the Exxon Valdez grounding, which discharged some 11 million gallons into Alaska's Price William Sound. The Coast Guard said it is preparing for the worst.
JORDAN: Israeli threat to expel Palestinians stokes old fears For many Jordanians, an Israeli ruling this month expanding the state's authority to arrest and deport people in the West Bank is more than an injustice foisted on the Palestinians of the West Bank -- it is also seen as a threat to Jordanian identity. Earlier this month, an Israeli military court amended an existing law to allow Israeli authorities to arrest, imprison or deport anyone in the West Bank lacking a recognized permit, leading rights groups to warn of the possibility of mass deportations of Palestinians.
U.N. pulls foreign workers out of Afghan city of Kandahar By Laura King LATimes.com Local staffers were also told to stay home. The decisions reflect the perilous state of security in Afghanistan’s second-largest city, where two civilians were killed in explosions Monday. Reporting from Kabul, Afghanistan Reflecting the sharply deteriorating security situation in Kandahar, Afghanistan's second-largest metropolis, the United Nations on Monday pulled foreign staff out of the city and instructed hundreds of local employees not to come to work. The move came on the same day as a series of explosions in the city killed two civilians.
Pakistanis Living on Brink, and Too Often in the Dark By SABRINA TAVERNISE - NYTimes.com LAHORE, Pakistan — The Taliban may be plotting bombings, and the economy is on the brink. But these days, the single biggest woe tormenting Pakistanis is as basic as an electric light bulb. Pakistan is in the throes of an energy crisis, with Pakistanis now enduring about 12 hours of power cuts a day, a grueling schedule that is melting ice, stopping fans and enraging an already exhausted populace just as the blast furnace of summer gets started
Military's Hypersonic Falcon Missile Test a Dud? FOXNews.com On the heels of last week's top-secret X37-B launch, the U.S. Air Force launched -- and ultimately crashed -- an experimental hypersonic glider theoretically capable of hitting Mach 20. It was a watershed week for conspiracy theorists, with President Barack Obama throwing his support behind several major upgrades to the country's rapid-response strike capability. On the heels of the top-secret X37-B launch, the U.S. Air Force launched an even more secret experimental hypersonic glider able to travel more than 4,000 miles in 30 minutes from launch. The craft -- dubbed the Falcon Hypersonic Technology Vehicle 2 -- was launched via a Minotaur 4-Lite rocket Thursday from Vandenberg Air Force Base, the Air Force announced.
Launch X-37B on Atlas V 501
X-37B Orbital Vehicle
USAF X-37 Orbital Test Vehicle Launch With Background
Pentagon planning for space bomber Documents show how X-plane could be used by military By Robert Windrem - NBC News producer Aug. 14, 2001 - An experimental NASA spacecraft could well be the harbinger for a small armada of billion-dollar space bombers - "space operations vehicles" that could be launched from a U.S. base and fire weapons at almost any target on Earth, all within 90 minutes of a presidential order. Last May 19, well out of the glare of the media spotlight, the stubby 22-foot-long unmanned spacecraft rolled to a stop at 6:17 a.m. on the hot, dry lakebed of NASA's Dryden Flight Research Center at Edwards Air Force Base in California.
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FDIC shuts down 4 more banks for a total of 54 failures this year By Stevenson Jacobs, Associated Press -- NEW YORK — Regulators shut down four banks in Illinois on Friday, putting the number of U.S. bank failures this year at 54. The Federal Deposit Insurance Corp. took over three banks in Chicago: New Century Bank, with $485.6 million in assets; Citizens Bank&Trust Company, with $77.3 million in assets; and Broadway Bank, with $1.2 billion in assets. The FDIC also closed Amcore Bank of Rockford, which had $3.8 billion in assets. MB Financial Bank agreed to acquire the deposits of both Broadway Bank and New Century Bank. Republic Bank of Chicago agreed to assume Citizens' deposits, while Chicago-based Harris National Association agreed to acquire Amcore Bank's deposits.
The Middle Class Game Is Up: Joe Bageant - SilverBearCafe.com We're Heading to a Slave Labor Planet Class solidarity was such a good idea. It really was. Obviously, most of the people who need solidarity are in the world's laboring classes. After all, the rich have more than enough solidarity already, as was recently demonstrated by their successful execution of the greatest global financial heist in history. Oh sure, we'll see some state sponsored mock show trials of a few of them - they always throw a few of their own out of the sleigh to the wolves during their escapes. The big heist was big news. Working Americans will be applying Preparation H to their keisters for a long time to come.
The outlook for the world economy Economist.com Curb your enthusiasm A welcome recovery-but an uneven one, with dangers both for sluggish Europe and bubbly emerging economies THERE is a whiff of exuberance around the world economy these days. Financial markets are buoyant, business confidence is rising and global growth seems increasingly robust. In its latest forecasts, released on April 21st, the IMF predicts that global output will grow by 4.2% this year on a purchasing-power basis, a full percentage point more than it foresaw six months ago. Other seers are even more optimistic, predicting growth of more than 4.5%-or close to the average pace of the boom years before the recession. The level of global output is now back to where it was before the downturn. And given the scale of the financial crisis, the recovery is surprisingly brisk. With global business investment accelerating and consumer spending strong, there is growing optimism that the recovery is becoming self-sustaining.
Frauds And Scandals Follow The Collapse Of The Financial System Bob Chapman - TheInternationalForecaster.com -- The collapse of the financial system is under way, a giant debt that will never be repaid, deliberate destruction of the economy, bailouts a part of the manipulation of the markets, More creative forms of destruction for the economy, Wall street a criminal enterprise, Goldman CEO visits the White House, often, another giant Ponzi in Florida... As the world faces an ongoing sovereign debt debacle we see an attempt to defuse an oncoming scandal involving Goldman Sachs, Paulson and perhaps others. The collapse of the fiat money system is underway and each day picks up momentum. The only question is how long it can survive? In the interim we are faced with inflation and perhaps hyperinflation as the privately owned Federal Reserve and other central banks add stimulus and money and credit into their financial systems.
Marxist Mosaic By Larry Wilke - CapitolHillCoffeeHouse.com Obama has “suggested” the idea of “a new value added tax” on the very same Americans who are being punished with hundreds of other taxes, fees and fines relative to the totalitarian TARPS, bogus bailouts and the health scare hokum. Obama “adviser” Paul Volker shilled the VAT idea for Obama elsewhere as one of the many Democratic deflection sessions, probably the one where Obama said that “whether we like it or not, we remain a dominant military superpower..”, was being used as the cover to sidetrack the nation’s attention from the novel idea of Obama wanting to grab another bag full of tax monies…
Mortgage-Backed Securities Return, but Are We Really Ready? By GIL RUDAWSKY - DailyFinance.com All roads from the real-estate meltdown lead to crumbled mortgage-backed securities. And after a three-year respite from these investments, the industry is starting to go down that path once again. The big question is whether financial institutions -- and investors -- have learned anything. What everyone is wondering is whether this move is a logical and positive outgrowth of a recovering industry. "Are we ready for this again?" asks Boston University economics professor Laurence Kotlikoff. "Absolutely not. We still don't have any checks or balances put into place to make sure we don't end up in the same situation."
Wall Street Deceit and Main Street Revulsion Szandor Blestman - SilverBearCafe.com I had the misfortune of listening to CNBC the other day while visiting my mother. The talking heads on the tube were discussing the surge in stock prices and the lifting of the DOW Industrials above the eleven thousand mark. They went on and on about how much of a psychological barrier the eleven thousand mark was and how that meant that the "recovery" wasn't just some fluke and everything was going to be hunky dory and rosy from now on. They then began asking the question when the "retailer investor" (that's you and me in Wall Street lingo) was going to get back into the market and really start cranking it up. They thought that all of us little, ordinary people with no money wouldn't want to miss the investment boat. All I remember thinking was "How stupid do these people think I am?" Indeed, how stupid do the Wall Street moguls think we are?
Reports of Our Recovery Are Greatly Exaggerated John Browne - SilverBearCafe.com From all outward appearances, it seems that a grim chapter in U.S. economic history has come to an end. Newsweek magazine declares that "America is Back," government statistics indicate revival, and our stock market has put in a rally for the record books (by rate of ascent, not highs - we are still more than 25% below the 2007 peak). And yet, despite massive federal stimuli and subsidies, American unemployment clings stubbornly to the 10 per cent level, with the "underemployment" rate closer to 20 per cent. The IMF does not appear to buy into Washington's optimism; it projects a "double dip" contraction by the second half of this year. With so much conflicting sentiment, it is difficult for investors to know whether the cup is half-empty or half-full.
'Gold price most likely to double' By John Dourekas Hong Kong (Kitco News) -- Gold will most likely double from its current $1150 an ounce during the course of the bull market, according to Puru Saxena, founder of Puru Saxena Wealth Management. In an exclusive interview with Kitco News, Saxena said one major factor in gold’s favor "is that central banks have now become net buyers of gold. So that reduces supply from the market,” said Saxena. Investment demand will appreciate over time as people become more dubious over currencies and they transfer assets into gold as a hedge, said the investment adviser from his Hong Kong office.
Gold bull run is not over: Marc Faber By John Dourekas - CommodityOnline.com Hong Kong (Kitco News) -- The rising price of gold is far from over since paper money will continue to lose value, according to Marc Faber, editor and publisher of The Gloom, Boom & Doom Report. “If you have $100 today, you buy that much less in terms of a basket of goods and services then you did ten years ago – paper money has already lost a lot of value and in my view it will continue to lose value. The price of gold will adjust on the upside according to the loss of the purchasing power of money,” Faber said in an exclusive interview with Kitco News.
Gold, Economic Recovery and George Soros on the Next Financial Crisis By: Clif Droke - MarketOracle.co.uk -- Speculation has been rife in the financial press lately about the possibility of another financial market meltdown. It seems that investors are waiting for the proverbial “other shoe” to drop as worries continue to mount over the sustainability of the financial market recovery that began over one year ago. Even the president of the United States has jumped on the fear bandwagon. On Thursday, President Obama was stumping in New York as he attempts to win favor for his proposed financial overhaul legislation. Playing the fear card, Obama said it was “essential that we learn the lessons of this crisis, so we don’t doom ourselves to repeat it. And make no mistake; that is exactly what will happen if we allow this moment to pass.”
Goldman, Gold, And U.S. Dollar's Influence on Precious Metals By: Przemyslaw Radomski - MarketOracle.co.uk -- When gold declined last Friday we were not caught by surprise and neither were our Subscribers. Based on our technical analysis, we gave you a heads up two weeks ago when we said that gold was ready for a decline before resuming its upward climb. But sometimes news can rattle the market, which is what happened Friday when gold hit an air pocket and dove $25 in a few minutes to move very close (or slightly below) the levels mentioned in our Friday update. While it is always the sell order (or rather a large amount of them) that causes a dramatic move, and one should not automatically assume that one single event is responsible for it (without giving it a second thought), in this case it seems that the immediate cause for the decline was news of the Securities and Exchange Commission’s (S.E.C.) civil fraud charges against Goldman Sachs.
When Gold Fundamentals Don’t Matter By: Kevin George - MarketOracle.co.uk One of the biggest talking points in the financial world is the direction of Gold. The internet is awash with predictions of price, mostly based on some combination of inflation, money-printing excesses and Chinese demand. Those who believe that gold is a one-way bet, are failing to account for the potential of an unseen event, such as the sub-prime fallout or the Lehman Brothers collapse and the effect they had on the financial markets. This despite the recent problems in Dubai and Greece, with many more debt-ridden countries close behind. The reflation of all risk assets created from the March 2009 low, is once again a serious risk to the markets and any unwind would likely be more severe than the 2008 collapse.
Will Gold be Bolstered by the Goldman Sachs Fraud Case? By: Julian DW Phillips - MarketOracle.co.uk Initially the gold price fell on the news of the S.E.C. civil fraud charge against Goldman Sachs in the belief that both they and Paulson’s hedge fund would have to sell their gold holdings. A reaction that was founded on uncontrolled emotions, you would rightly suppose. The reaction was very like gold market after the news that Greece is going to the EU & I.M.F. [because few believe that Greece will correct matters thereafter] for their bailout. The € fell as the Greek crisis impinged on the value of the €. The additional reaction in gold was based on the supposition that gold is tied to the €. Not a great deal of thought goes into these reactions, but if you can make money by inciting investors like this, why not? These reactions illustrate that emotion, alongside the Technical picture drive short-term prices, exclusively. Longer-term investors apply more thought to their investments than this. It is their view that needs to be looked at with depth if we are to understand just how the Goldman Sachs story could influence future gold and silver prices.
Gold "Crisis Protection" Proven as Eurozone's Greek Bail-Out Begins By: Adrian Ash - MarketOracle.co.uk -- THE PRICE OF GOLD retained a slight weekly gain as the close approached in London on Friday, trading above $1141 an ounce while the Euro bounced – and world stock markets rose – following Greece's formal request for a joint European and IMF bail-out. Gold priced in Euros spiked within 0.3% of April 9th's record, hitting €27,743 per kilo before easing back as the single currency rose. British investors looking to buy gold, the price held at £743 an ounce – 0.3% higher from last Friday's finish – after UK data showed the economy growing half-as-fast as analysts forecast between Jan. and March, adding just 0.2% year-on-year. Crude oil and broader commodities were little changed. "Greece is asking for the activation of the support mechanism," said a letter sent this morning by finance minister Papaconstantinou to the European Commission, fellow Eurozone states, and the European Central Bank. "The moment has come," Greek premier Papandreou told reporters, apparently catching the European Commission unawares.
The Rules of the Gold Standard Game By Bill Baker - The DailyReckoning.com 04/23/10 Baltimore, Maryland – The academic and investment community has intellectually bought into theories of interest rate manipulation based upon signals gleaned from the quicksand of near-term economic statistics. Although proven by the scientific methods of economics, somehow the chain of desired short-term outcomes generated through this central planning has a side effect of producing long waves of debt accumulation.
This is a Weak Case: Actually, no — its a very strong case. Based upon what is in the SEC complaint, parts of the case are a slam dunk. The claim Paulson & Co. were long $200 million dollars when they were actually short is a material misrepresentation — that’s Rule 10b-5, and its a no brainer. The rest is gravy.
Robert Khuzami is a bad ass, no-nonsense, thorough, award winning Prosecutor: This guy is the real deal — he busted terrorist rings, broke up the mob, took down security frauds. He is now the director of SEC enforcement. He is fearless, and was awarded the Attorney General’s Exceptional Service Award (1996), for “extraordinary courage and voluntary risk of life in performing an act resulting in direct benefits to the Department of Justice or the nation.”
Goldman's "Unsure" Defense: Is That the Best It Can Do? By PETER COHAN - DailyFinance.com The Washington Post got its hands on an 11 page memo that Goldman Sachs (GS) CEO Lloyd Blankfein will use in his Senate testimony in Washington on Apr. 27. I'm not sure that this testimony represents Goldman's best foot forward in its attempt to deflect the idea that it's not acting in its clients' best interests. But it could represent an interesting line of reasoning in Goldman's effort to defend itself against Securities and Exchange Commission charges that it committed fraud in marketing a collateralized debt obligation (CDO) called Abacus on which investors lost $1 billion.
Goldman Sachs readies forceful response against claims it misled clients By Zachary A. Goldfarb - Washington Post -- Goldman Sachs is preparing its most detailed defense yet to allegations that it misled clients in its mortgage securities business, arguing that the firm was unsure whether housing prices would rise or fall and did not take any action at odds with the interests of its clients. An internal Goldman document, prepared for senior executives and obtained by The Washington Post, addresses the criticism that the bank invested its own money betting against the housing market while simultaneously urging clients to invest in securities that would increase in value only if the housing market did.
Goldman-deal gamblers knew the score By Bill Fleckenstein - MSN Money The players on both sides of the trade that the SEC has targeted knew the risks and knew one side was bound to lose. It's far from the worst sin of this mess. Goldman Sachs. John Paulson. Those are hot-button words that have dominated business news lately, with many of the reports biased toward a black-and-white supposition: guilty. This column, however, wouldn't live up to its name if it didn't take a contrarian view. Not surprisingly, I'm going to discuss the Goldman/Paulson flap from a slightly different perspective. What I believe may have happened -- at worst -- is that Paulson, a hedge fund manager, identified various bits of mortgage flotsam he wanted to short, betting they would go down. Then he might've gone to Goldman Sachs (GS, news, msgs) and asked something like, "Hey, would you put a basket of this stuff together?"
E-mails: Goldman Boasted as Meltdown Unfolded By AP / DAN STRUMPF (NEW YORK) — E-mails released by a Senate committee investigating the financial crisis show top executives at Goldman Sachs Inc. boasting about money the firm was making as the housing market collapsed in 2007. The documents suggest that Goldman benefited at least for a time from bets that subprime mortgage-backed securities would lose value. The e-mails appear to contradict previous statements by the investment bank that it lost money on such securities. "Of course we didn't dodge the mortgage mess," CEO Lloyd Blankfein wrote in an e-mail dated Nov. 18, 2007, according to the documents released Saturday morning. "We lost money, then made more than we lost because of shorts."
Goldman Sachs Should Cut Losses in SEC Standoff By Joshua Gallu and David Scheer April 23 (Bloomberg) -- Goldman Sachs Group Inc. may be better off cutting its losses instead of fighting what it terms “unfounded” fraud claims, say professors of securities law who have examined the U.S. Securities and Exchange Commission’s lawsuit against the bank. The most profitable firm in Wall Street history will probably lose what is typically the first hurdle in court, a motion to throw out the April 16 suit because it lacks legal merit, the professors said in interviews this week. After that, Goldman Sachs’s risks will mount and its negotiating position will weaken, they said.
Goldman Clashes With Senate’s Levin Ahead of Blankfein Hearing By Christine Harper and Ryan J. Donmoyer -- April 25 (Bloomberg) -- Goldman Sachs Group Inc. and U.S. Senator Carl Levin fired opening shots ahead of a congressional hearing this week, releasing conflicting evidence of the investment bank’s tactics during the mortgage market’s collapse. Levin, a Michigan Democrat who leads the Senate’s Permanent Subcommittee on Investigations, posted internal Goldman Sachs e-mails on his website yesterday that he said show the firm “made a lot of money by betting against the mortgage market.” Goldman Sachs responded with documents indicating the firm lost money on mortgages in 2008 and that executives didn’t know the market would fall.
Goldman Sach's CEO and board are named in shareholder lawsuits By Bernard Condon, Associated Press -- NEW YORK — Goldman Sachs's CEO and other top officers are accused in a pair of shareholder lawsuits of lax oversight in deals involving risky mortage-backed securities that later went bad. The lawsuits filed Thursday in New York State Supreme Court name Lloyd Blankfein and the firm's entire board of directors as defendants. The suits follow civil fraud charges filed last week by the Securities and Exchange Commission over the same investments.
Goldman Sachs wages war of words with US Senate By Jonathan Sibun - Telegraph.co.uk Tensions between Goldman Sachs and the US Senate have reached breaking point as the two sides wage a public war over whether the investment bank hoodwinked clients by betting against the sub-prime mortgage market. The two sides have been battling for the moral high ground ahead of tomorrow's (Tuesday) Senate testimony by Lloyd Blankfein, the investment bank's chief executive. Carl Levin, a Democrat who heads the Senate committee investigating Goldman's role in selling sub-prime mortgage products, released emails over the weekend that he claimed show the bank "made a lot of money by betting against the mortgage market".
Maastricht madhouse fuels EMU-wide contagion from Greece By Ambrose Evans-Pritchard - Telegraph.co.uk If the chief purpose behind the EU-IMF bail-out for Greece – or for banks exposed to Greece – is to prevent a "full-blown and contagious sovereign debt crisis", the market verdict must be a sobering surprise. The relief rally fizzled shortly after Greece folded its bad poker hand and invoked aid. Bond risk as measured by Markit's 5-year credit default swaps jumped to fresh records of 280 for Portugal and 177 for Spain. Irish CDS contracts rose 13 points to 185. This was an entirely logical response to the twisted events that are unfolding. The rescue obliges countries in trouble to go deeper into trouble. Portugal must come up with €774m as its share of the EU's initial €30bn package. Ireland must find €491m, Spain €3.7bn.
An extreme necessity Econiomist.com Greece's request for aid from the euro zone and the IMF will provide only temporary relief GREECE'S prime minister, George Papandreou, faced the television cameras on Friday 23rd April to anounce that his government would draw on emergency aid to tide it over for the rest of the year. Mr Papandreou decribed the rather embarassing request to to other euro zone members and the IMF as "an extreme necessity." This followed a week in which yields on Greek bonds reached an alarming 8.9%. That in part reflected an announcement by Eurostat, the European statistics agency, that Greece's budget deficit reached 13.6% of GDP in 2009, even worse than it had previously thought. The agency added that the number might be revised up again, owing to the poor quality of the available data. Moody's, a credit-rating agency, responded by giving the latest of many downgrades by agencies to Greece's sovereign bonds.
Greece Activates Emergency Bailout, Testing Financial Strength of Eurozone Countries BY KERRI SHANNON, Associate Editor, Money Morning Greece on Friday officially asked to tap into a $60 billion (45 billion euro) emergency aid package after months of talks, setting into motion a bailout process that will put the financial strength of Eurozone nations to the test. Greece Prime Minister George Papandreou called his debt-stricken country's economy a "sinking ship," as borrowing costs reached 12-year highs and recent austerity measures didn't rally the market support needed to save Greece. "This is the moment. The time that was not granted to us by the markets will be given to us by the support of the Eurozone," Papandreou said.
Greece presses "help" button, markets still wary (Reuters) - Debt-stricken Greece appealed to its European partners and the IMF for emergency loans on Friday, yielding to overwhelming market pressure to start the first financial rescue of a member of the euro zone. Prime Minister George Papandreou asked to tap the 45 billion euro ($60.5 billion) package after investors feared a default and pushed borrowing costs to record levels, undermining Athens' efforts to cut its 300 billion euro debt pile. "It is a national and imperative need to officially ask our partners in the EU for the activation of the support mechanism we jointly created," Papandreou said in a statement broadcast live from the remote, tiny Aegean island of Kastellorizo.
Greece Requests EU-IMF Rescue in Euro's Biggest Test By Jonathan Stearns and Maria Petrakis April 23 (Bloomberg) -- Greece called for activation of a financial lifeline of as much as 45 billion euros ($60 billion) this year in an unprecedented test of the euro's stability and European political cohesion. The appeal for help from the European Union and International Monetary Fund follows a surge in borrowing costs to what Greek Prime Minister George Papandreou called unsustainable levels that undermine efforts to cut a budget deficit that is more than four times the EU limit.
Greece, Out of Ideas, Requests Global Aid By NIKI KITSANTONIS and MATTHEW SALTMARSH - NYTimes ATHENS - Describing his country's economy as "a sinking ship," Greece's prime minister formally requested an international bailout on Friday, creating the biggest test so far to the European monetary union. "We drew up a plan, we took difficult and painful measures," Prime Minister George A. Papandreou said in a nationally televised address. "But the markets did not respond."
Rich world may face next downturn with dull weapons by Emily Kaiser - Analysis (Reuters) - Rich countries may not be able to resharpen their crisis-fighting tools fast enough to get them ready for the next downturn, leaving them increasingly reliant on cash-rich emerging powerhouses to ensure stability. Before the latest upheaval struck, advanced economies had enjoyed a relatively peaceful stretch dating back to the early 1990s. Aside from the 2001 recession, which proved to be mild, the financial trauma was largely centered in emerging markets. That has changed. As the International Monetary Fund has stressed in the run-up to this week's meetings of world finance officials in Washington, the biggest threats to the global recovery are concentrated in advanced economies now.
China currency move a matter for medium-term: IMF (Reuters) - China recognizes the need to let its currency appreciate for the good of its domestic economy but the move will only come in the "medium term", the International Monetary Fund's Asia director said on Saturday. IMF Asia Director Anoop Singh told Reuters that China and other export-focused Asian countries have been compelled by the stalling of growth in Western economies to seek a new model of sustained growth. "That involves a range of policies to raise consumption (and) rebalancing and improving the exchange rate is part of this and I think we will see that over the medium term," he said in an interview. He would not be drawn further on how soon appreciation might be allowed.
Shortsighted to oppose bank tax, IMF warns (Reuters) - Countries that weathered the global economic crisis with their financial systems relatively unscathed are being shortsighted by opposing a global bank levy, the IMF's chief said on Saturday. International Monetary Fund Managing Director Dominique Strauss-Kahn suggested a bank tax would be helpful in preparing for crises that could strike anywhere and indirectly criticized countries that might think they would never feel the brunt of a downturn. "The countries ... which are likely to implement (a bank tax) are the ones having had problems in the banking sector," Strauss-Kahn said. "The others say, 'We didn't have a problem so we're immune.'"
IMF chief tries to shore up fraying G20 unity (Reuters) - The IMF sought to maintain unity within the Group of 20 economic powers on Thursday, urging countries not to go separate ways in reforming the financial sector, as frictions emerged over a controversial plan to tax banks. At the start of four days of meetings in Washington, International Monetary Fund chief Dominique Strauss-Kahn said countries need to ensure they are moving in the same direction on regulatory reform if they are to curb the risky practices blamed for the global financial crisis. "Our main concern is to have everyone working together and to maintain the cooperation momentum," he said.
Policymakers' comments at IMF, G20 meetings (Reuters) - Following are key quotes from global financial leaders on the third day of talks around the IMF's annual spring meetings. On the 45 billion-euro ($60.5 billion) aid for Greece: "Some countries think it's not enough. ... some of the G20 countries, including some of the European countries." On the yuan: "My impression ... with China is that in the right circumstances, they (will) allow more flexibility. "That's their perception of the right circumstances, and I think that is becoming, again, more likely than it was before because we're starting to emerge from crisis situations."
Saving America from Corporate-Statism Nelson Hultberg - SilverBearCafe.com As America sinks deeper into the tyranny of bureaucratic corporatism via today's incestuous relationship between Washington and Wall Street, it is inspiring to see thousands of Tea Parties spring up to express outrage. Unfortunately the "new deal" campaign approach still works as it has been malefically doing for over 70 years since FDR came to visit us. Every election season artful political pitchmen hit the hustings to call for "change" and "more prosperity for the people," in which millions get swept up.
Barack Obama promises to end bailouts 'once and for all' By Alex Spillius - Telegraph.co.uk President Barack Obama promised an end to taxpayer-funded bailouts "once and for all" as the US Senate prepared to start debating this week an overhaul of the financial system to restore confidence in Wall Street. Mr Obama called on Congress to pass the most wide-ranging changes to oversight of the financial market since the Great Depression and said the changes would help revive the economy and "put an end to the cycles of boom and bust". "In the absence of common-sense rules, Wall Street firms took enormous, irresponsible risks that imperiled our financial system - and hurt just about every sector of our economy," said the president in his weekly address. "Some people simply forgot that behind every dollar traded or leveraged, there is family looking to buy a house, pay for an education, open a business, or save for retirement."
To Peg or Not to Peg? Peter Schiff - SilverBearCafe.com While I attended an economic conference last week in Shanghai, I found it notable - but not surprising - that two former Secretaries of the Treasury, John Snow and Hank Paulson, as well as current Treasury Secretary Tim Geither, and former President George W. Bush were then in the country at the same time. The fact that so many key American power brokers (myself not included) were in China simultaneously is no coincidence. In an overly indebted world, the $2.5 trillion that China holds in foreign reserves is acting as a center of economic gravity, inexorably pulling all market participants into its orbit.
Awash in $100 Bills That Add Up to Zero By JIM DWYER - NYTimes.com For eight nights in March, the Allman Brothers played at the United Palace Theater in Washington Heights, and after the shows, their fans would come steaming along Broadway. One celebratory stop was at Coogan'son 169th Street. The crowds were good for business. They were swept into the usual tides of cops and politicians, neighborhood people and regulars from the hospital next door. Near the end of the run, which included St. Patrick's Day, the bar owners inspected a small pile of $100 bills that they had held out of their bank deposits. "I could tell by feeling the linen," said Peter Walsh, one of the partners. "It was this really heavily linen feeling. Whatever linen they usually have in the bills, this was triple."
A new idolatry Economist.com The economic crisis has revived the old debate about whether firms should focus most on their shareholders, their customers or their workers THE era of "Jack Welch capitalism" may be drawing to a close, predicted Richard Lambert, the head of the Confederation of British Industry (CBI), in a speech last month. When "Neutron Jack" (so nicknamed for his readiness to fire employees) ran GE, he was regarded as the incarnation of the idea that a firm's sole aim should be maximising returns to its shareholders. This idea has dominated American business for the past 25 years, and was spreading rapidly around the world until the financial crisis hit, calling its wisdom into question. Even Mr Welch has expressed doubts: "On the face of it, shareholder value is the dumbest idea in the world," he said last year.
Worried About a Double Dip in Housing? It May Be Here Already By BETSY SCHIFFMAN - DailyFinance.com While many home sellers fret over the possibility of a double dip in the real estate market, at least one economist thinks there's no sense in worrying -- it's too late. The double dip is here, says Paul Dales, of Capital Economics, an investment research firm. Existing home sales are up -- they climbed nearly 7% in March -- but prices have dropped over the last three months, culminating with a 3.4% decrease in February, according to the Federal Housing Finance Agency. All told, prices are down 2.7% from November and 13.3% below the market peak in April 2007.
Harley CEO offers no promises on preserving jobs THE BUSINESS JOURNAL OF MILWAUKEE - BY Rich Rovito -- Harley-Davidson Inc. president and CEO Keith Wandell said Saturday that the Milwaukee motorcycle manufacturer will continue to face challenges from the economy and that he won't make any guarantees to employees about their job security. "I wish to God I could stand in front of everybody and say that you're going to be guaranteed a job for life," Wandell said. "We'd all be great friends and pat each other on the back and walk into the sunset together. You know what? Life isn't that simple."
The Real Definition of Sedition That Liberals Don't Want You To Know By J.J. Jackson - CapitolHillCoffeeHouse.com Watch out all you who dare to speak up against our government in Washington as those at the reins of power are snatching up every last bit of control they can! You are the dangerous ones. Worse yet you are committing a crime in the eyes of leftists like Joe Klein. That’s right folks your talk is dangerous and borders on sedition which people like Klein are all too eager to warn is a felony and that you could be hauled off to jail for engaging in.
Arizona's immigration law may spur a showdown By Nicholas Riccardi, Los Angeles Times Gov. Jan Brewer signs a bill that opponents say encourages racial profiling. President Obama calls the measure 'misguided.' A federal review is underway. Arizona Gov. Jan Brewer on Friday signed the toughest law against illegal immigration in the country, shrugging aside warnings from religious and civil rights leaders — and President Obama — that it would lead to widespread racial profiling. Hours after Obama denounced the measure as "misguided," Brewer held a signing ceremony for the bill, which makes it a crime to be in the state illegally and requires police to check suspects for immigration paperwork.
Hundreds protest immigration law in Arizona By the CNN Wire Staff Phoenix, Arizona (CNN) -- Hundreds of people gathered outside Arizona's Capitol building on Sunday in a largely peaceful protest against the state's tough new immigration law. Chanting "Yes we can," waving American flags and holding signs reading "We have rights" and "We are human," demonstrators kept up a festive spirit as they denounced the bill signed Friday by Gov. Jan Brewer. The new law requires police to determine whether a person is in the United States legally. It also requires immigrants to carry their alien registration documents at all times and requires police to question people if there is reason to suspect they're in the United States illegally.
Senators postpone climate bill unveiling (Reuters) - One of President Barack Obama's top priorities -- tackling global warming -- suffered a severe setback on Saturday when a fight over immigration derailed plans to unveil a compromise climate change bill. A bipartisan group of senators led by Democrat John Kerry had been aiming to outline details of their climate change bill on Monday. That plan was canceled after Republican Senator Lindsey Graham, a member of the working group, threatened to pull out if Democrats pushed for a debate on an overhaul of immigration before doing the huge environmental and energy legislation.
Well beneath sunken rig U.S. has serious oil leak (Reuters) - An oil well on the ocean floor beneath a drilling rig that exploded and sank into the Gulf of Mexico began spewing oil on Saturday, the U.S. Coast Guard said. The well, 5,000 feet beneath the ocean surface, was leaking about 1,000 barrels per day of oil, a Coast Guard spokeswoman said, in what the agency called a "very serious spill." Remote underwater vehicles detected oil leaking from the riser and drill pipe, the spokeswoman said. "We are classifying this as a very serious spill and we are using all our resources to help contain it," Coast Guard Petty Officer Connie Terrell said.
Iran reportedly tests five new missiles By the CNN Wire Staff Tehran, Iran (CNN) -- Iran said Sunday it fired five new types of locally-made coast-to-sea and sea-to-sea missiles in the last stage of its "Great Prophet 5" military maneuvers in the Persian Gulf. The missiles were fired simultaneously and struck a single target at the same time -- a feat the Revolutionary Guard Corps described to the Islamic Republic of Iran Broadcasting as "very important." The military exercises on Sunday also included high-speed boats waging a "war" against a warship. The maneuvers fell on the 31st anniversary of the elite force and were designed to demonstrate new weapons systems. Iran begins war games
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A Free Market in Chains By Dan Amoss - DailyReckoning.com 04/22/10 Jacobus, Pennsylvania – If left to its own devices, a truly free market would have already corrected many of the imbalances of the late, great credit bubble. Instead, US policymakers at the Federal Reserve and the Treasury Department have been trying to re-inflate the credit bubble by pumping trillions of dollars of fresh credit and currency into the financial system. The Fed is still maintaining these Keynesian tactics, despite the increasing possibility that inflation and other adverse outcomes will result. Kansas City Fed President Thomas Hoenig is one of the few policymakers who appear to grasp the following simple economic truism: There is no free lunch. In his April 7 speech “What About Zero?” Hoenig says, “Low rates, over time, systematically contribute to the buildup of financial imbalances by leading banks and investors to search for yield.” In other words, Hoenig doesn’t want to be complicit in the ZIRP (zero interest rate policy) experiment the Fed is currently conducting.
Governments Will 'Bankrupt Us': Marc Faber By: CNBC.com Current economic policies are not sustainable and the world faces doom because "the governments are taking over", said Marc Faber, editor & publisher of The Gloom, Boom & Doom Report. "They will all bankrupt us and expropriate us, but it may not happen tomorrow. They'll give us something to play with, until the whole system breaks down...they'll just print money and print more money," he said on CNBC Thursday.
Senate Investigation Says Banks Caused Crisis, Not Borrowers Mandelman Matters They finally got it! And geeze, it took them long enough. I wrote an article TWO YEARS AGO, titled “What Happened on Wall Street and Why,” and it explained the factors the contributed to the unfolding crisis… no, not all the factors, for example I didn’t go back to the origins of securitization, or regulatory changes that were made during the Clinton years, or look to lay the blame on Fannie and Freddie and the CRA (Community Reinvestment Act). Why? Because to do so would have been stupid and I don’t do stupid. Why would it have been stupid to cite those things, I hear some of you cry? After all, each of those factors did in fact contribute to the crisis in some way. Perhaps some had supporting roles, others talking parts, a few had cameos, and some were merely extras… but they were all in the movie, right? Of course they were. But so were many other things, and I don’t find it terribly useful to debate and discuss factors that, while contributing, did not contribute in a proximate cause sort of way, or contributed only in hindsight.
Gold May Rise as Investors Seek Haven From Risk of Debt Default By Claudia Carpenter -- April 23 (Bloomberg) -- Gold may advance as investors seek a haven in precious metals from the possibility of debt defaults, a survey showed. Fifteen of 20 traders, analysts and brokers surveyed by Bloomberg, or 75 percent, said gold may rise next week. Two people expect a decline and three were neutral. Gold futures for June delivery rose 0.1 percent this week to $1,138.30 an ounce on the Comex in New York by 11:30 a.m. local time yesterday. The total budget shortfall for 16 countries that use the euro widened to 6.3 percent of gross domestic product last year, from 2 percent in 2008, the European Union’s statistics office said yesterday. Gold rose 24 percent last year as the Federal Reserve kept interest rates close to zero to revive the economy.
Gold outlook remains bullish, say DGJG experts DUBAI (Commodity Online): Gold experts at the Dubai Gold & Jewellery Group (DGJG), a group for Dubai jewellery industry has maintained that the future outlook for gold remains bullish and with the global economy going through fluctuations, gold will be highly sought after as an investment and the ultimate time-tested safe haven. According to Tarek El Mdaka, Managing Director of Dubai based Kaloti Jewellery Group, an integrated gold and precious metals company with international presence in the physical commodity markets, gold would hover between a USD 800-1200 trading range during this year.
Why is Gold and Silver not yet in mainstream? By Dr Jeffrey Lewis - CommodityOnline.com While talking heads and economic pundits scream that somehow precious metals are bubbling, the markets are saying the opposite. When investors break out the calculator and look to decipher the data, they'll find that there is no bubble at all. In fact, investors are largely underweighted in gold and silver in their own portfolios. Metals are Mainstream Prior to the four-bagger returns that began at the turn of the millennium, gold and silver were seen as fringe investments for “paranoid” investors. Dot coms and tech stocks, the world thought, would rise forever, and following the deep recessions throughout the world in the 1990s, economists reported that we would never again see another deep recession or depression.
Forget nukes, Iran’s gold is more lethal By Geena Paul LONDON (Commodity Online): Even as the world is watching Iran with suspicion over its nuclear ambitions, Tehran is harbouring plans to tackle the US pressure through gold. Otherwise, how will you explain the gold hunt Iran has launched after the Gulf war. To stop an effort by the West to seize Iranian assets in Europe, the Iranian leadership decided to begin a massive, secret repatriation of its international currency reserves. Therefore, the Central Bank of Iran started buying gold so that it can stall any economic threat by countries like US and England. And, nobody knows how much gold Iran has already amassed. That too at a time when the world is still reeling under recession impacts and several central banks are hunting for gold to convert their foreign reserves into yellow metal.
Three scenarios for the gold price Author: Geoff Candy - MineWeb.net Is the price going to double in the next year or two or is there a greater chance of it falling back toward $600? GRONINGEN - Over the past week I have had three very different conversations about gold with three well known commentators, all with very different views on what is likely to happen to the price of gold. But, at the centre of all three arguments is a discussion about investment in the metal and whether or not this is just another wave in a very long-standing cycle or if there is something different about the current scenario.
The Devaluation of the USDollar By: Jim Willie CB - GoldSeek.com he need is urgent. The recognition is broad. Supply & Demand of American debt paper demand price adjustment. The USGovt avoids the topic like the plague. The billboard fact of the matter, as USCongressional politicians like to say, is that the USDollar must be take a downward revaluation of significant magnitude in order to even begin to offer a semblance of equilibrium and balance. Natural forces are aligned against those in power who resist the adjustment. Imbalances are too magnificent. They invite continued global revolt and financial insurrection.
Teaching Inflation Mises Daily: by T. Hunt Tooley I had a great teaching experience early last school year. I taught the history of inflation, and I have never timed a course better. I have taught in colleges and universities since 1985, and I have often thought about doing a course on the history of inflation. But this time, current events pushed me to go ahead. Of course, it was clear to me long before the spring of 2008 that the federal government was inflating the money supply. As a historian of war and a student of Austrian economics, I have long known that higher-than-normal monetary inflation would become painfully apparent during our glorious War on Terror, WMDs, Iraq, and Afghanistan. Since World War I and earlier, inflation has always been the handmaiden of war (inflation being a silent theft from the populace through which any war government can help finance the horrendous costs of the war). Moreover, the Fannie Mae/Freddie Mac fiasco and the massive credit expansion of the Fed were fueling a boom of really huge proportions.
Escalating Greek default fears rock Europe's debt markets By Ambrose Evans-Pritchard - Telegraph.co.uk Greece's debt crisis has reached a dramatic crescendo after the EU revealed that the country's debt and deficit figures are even worse than feared and leading banks began to talk openly of debt-restructuring. With contagion spreading across Southern Europe, spreads on 10-year Greek bonds exploded to almost 600 basis points over German Bunds in panic trading, pushing borrowing costs close to 9pc. Rates on two-year debt rose to 10.6pc in a market gone mad. “It is clear that the Greek situation is a very serious one,” said Dominique Strauss-Kahn, head of the International Monetary Fund. “There is no silver bullet to solve it in an easy manner.” Credit default swaps (CDS) on Portuguese debt surged 50 basis points in a matter of hours to an all-time high of 270. Markit said the CDS on Spain reached a fresh record of 175, and Ireland jumped to 162, with jitters reaching Hungary, Bulgaria, Romania, Russia and even Argentina.
Greek Budget Deficit Hits 13.6 Percent of GDP in 2009 MoneyNews.com Financially-stricken Greece had an even bigger budget deficit for 2009 than previously thought, official figures showed Thursday — at a time the country is considering whether to tap a bailout facility from its 15 partners in the eurozone and the International Monetary Fund. The European Union's statistics office Eurostat said that Greece's budget deficit in 2009, as a percentage of economic output, was 13.6 percent. That's up from the previous estimate of 12.9 percent and nearly double the 7.7 percent recorded in 2008. Greece's total government debt as a proportion of GDP stands at a massive 115.1 percent, a burden so large that some analysts think it will have trouble paying it over coming years even if a bailout saves Athens from default this year.
Another bad day for Greece By Annalyn Censky NEW YORK (CNNMoney.com) -- Moody's downgraded Greece's government bonds Thursday casting further doubt that the debt-laden country will be able to meet its May 19 deadline for refinancing 8.5 billion euros, or about $11.4 billion, in borrowings. The credit rating agency cut its bond rating for Greece one notch, to an A3 level, citing "significant risk." A3 is still considered investment grade, although it's not an entirely high-quality credit level. Moody's cautioned that further downgrades are possible as it continues to review Greece's economic outlook.
EU Sees Wider Greek Deficit, Roiling Markets By CHARLES FORELLE - WSJ.com Bonds Fall as Investors View Bailout and Default as Givens BRUSSELS—New figures revealed that Greece's debt crisis is even worse than investors believed, delivering a fresh shock to European markets and all but ensuring that the International Monetary Fund and euro-zone countries will have to step in within weeks to bail out the country. The European Union's statistical authority said Thursday that Greece's 2009 budget deficit—already yawning—was wider than Athens had estimated. Also Thursday, Moody's Investors Service downgraded Greece's debt rating.
Traders Bet on a Default From Greece By TOM LAURICELLA And STEPHEN FIDLER - WSJ.com Greek bond prices posted a drastic decline Thursday as traders began betting a debt default is inevitable, even if the country receives a massive bailout. The Greek bond market is now priced for a "catastrophic event," says Sebastien Galy, senior foreign-exchange strategist at BNP Paribas. Greece's woes helped sink the euro to an 11-month low before the common currency recovered some of its losses. Although conditions in the Greek bond market have generally been deteriorating over the past several weeks, Thursday's session saw an especially steep decline in short-term debt prices. As a result, the yield on Greek two-year notes jumped to more than 12% from 8.3% Wednesday, according to Tradeweb.
Max Keiser on Inside Story - 22 April 2010 - Greek Debt Crisis Continues
Dealers Defend Swaps as Obama Predicts ‘Big Battle’ By Shannon D. Harrington and Matthew Leising April 22 (Bloomberg) -- Legislation to regulate the $605 trillion derivatives market is reaching beyond issues that threatened the financial system two years ago and may impede the market, according to industry leaders. U.S. Senate legislation that would require traders to instantly report prices and execute contracts on exchanges or facilities resembling exchanges won’t lessen risk to the financial system, said Robert Pickel, executive vice chairman of the International Swaps & Derivatives Association. The Federal Reserve demanded dealers curb such risks since the bankruptcy of Lehman Brothers Holdings Inc. and near-failure of Bear Stearns Cos. in 2008.
Key Player on Debt Commission Says VAT in the Mix FOX News The Executive Director of the White House panel charged with reducing the national debt told Fox Wednesday a value-added-tax or VAT would be among the options up for consideration. "We need to talk through all sides of this equation," Bruce Reed told Fox in an interview in his makeshift office two blocks from Capitol Hill. "We're going to look at discretionary spending, mandatory spending, tax reform...look at this issue from every angle. And also look at ways and making sure that the economy is strong and it's growing faster than debt is growing."
Fitch warns of debt 'shock' for Japan By Ambrose Evans-Pritchard - Telegraph.co.uk Fitch Ratings has warned that Japan's sovereign debt is rising to ominously high levels as the workforce shrinks and deflation grinds deeper, while the government's reserve assets may prove unusable for defence in a funding crisis. The agency said Japan's gross public debt has reached 201pc of GDP and is likely to continue pushing higher into the danger zone unless premier Yukio Hatoyama starts to get a grip on public accounts. "Japan is increasingly vulnerable to an adverse interest rate shock, given the scale of government debt and hence the volume of refinancing," said Andrew Colquhoun, Fitch's Asia specialist. "The lack of a coherent and credible plan" for fiscal discipline is likely to put "downwards pressure on creditworthiness in the medium term." The Fitch Report comes two days after the IMF warned that the global banking crisis has mutated into a sovereign debt crisis that risks setting off a second phase of economic turmoil.
Bubbles building in China 4/21/10 Marc Faber on Bloomberg
Market Manipulation and Delusions of Prosperity By: Richard Daughty - GoldSeek.com It was too late that I remembered that having margaritas for lunch was a bad idea, and I was now sleepy and argumentative, my eyelids drooping, when my eyes suddenly few open when I read the Bloomberg headline, “Leading Economic Indicators Index in US Rose 1.4% in March”. Wow! Bloomberg said, “The 1.4 percent increase in the New York-based Conference Board’s measure of the outlook for three to six months was more than anticipated” which would seem to be an understatement of the first order! Wow! In searching for explanations, the article went on that “Seven of the 10 indicators in the leading index contributed to the gain”, with which they followed, “led by the interest-rate spread.”
America must face up to the dangers of derivatives By George Soros - FT.com The US Securities and Exchange Commission’s civil suit against Goldman Sachs will be vigorously contested by the defendant. It is interesting to speculate which side will win; but we will not know the result for months. Irrespective of the eventual outcome, however, the case has far-reaching implications for the financial reform legislation Congress is considering. Whether or not Goldman is guilty, the transaction in question clearly had no social benefit. It involved a complex synthetic security derived from existing mortgage-backed securities by cloning them into imaginary units that mimicked the originals. This synthetic collateralised debt obligation did not finance the ownership of any additional homes or allocate capital more efficiently; it merely swelled the volume of mortgage-backed securities that lost value when the housing bubble burst. The primary purpose of the transaction was to generate fees and commissions.
Goldman CEO Lloyd Blankfein to testify at Senate hearing By David Lieberman, USA TODAY NEW YORK —Goldman Sachs on Tuesday will have its most public — and potentially dramatic — opportunity yet to defend itself against government charges that it hoodwinked investors in 2007. CEO Lloyd Blankfein and executive Fabrice Tourre plan to testify at a hearing called by the Senate Permanent Subcommittee on Investigations to explore fraud allegations made by the Securities and Exchange Commission, the panel announced Thursday. Fabrice Tourre, who was named along with Goldman in the charges filed Friday, will testify Tuesday before the Permanent Subcommittee on Investigations, the panel said.
Senate sends for Fabrice Tourre, the banker at heart of Goldman ‘fraud’ Christine Seib, Helen Power - TimesOnline.co.uk Fabrice Tourre, the banker at the centre of Goldman Sachs’ alleged $1 billion fraud, could appear in Washington next Tuesday to defend his imploding mortgage product. Before he was charged with securities fraud last Friday, the Frenchman, 31, was invited to appear at what was expected to be a fiery Senate committee hearing alongside Lloyd Blankfein, Goldman’s chairman and chief executive, to talk about the causes of the financial crisis. If he attends, Mr Tourre is expected to say that he did nothing wrong in creating the Abacus 2007-AC1. Goldman, which was also charged over Abacus, has denied any wrongdoing.
Obama's Wall Street Bill Lets Crooks Escape By Cliff Kincaid, CapitolHillCoffeeHouse.com The indictment of Goldman Sachs is as deceptive as the “financial reform” bill that President Obama and the liberals are pushing on Capitol Hill, says Zubi Diamond, author of the blockbuster book, Wizards of Wall Street. Diamond is warning legislators not to fall for the Obama Administration’s claim that the legislation somehow punishes Wall Street for bad financial practices. Diamond, who has emerged as a major critic of the unregulated hedge fund industry, says he was not surprised that the Securities and Exchange Commission (SEC) named hedge fund short-seller John Paulson as a key player in the Goldman Sachs scheme to defraud investors but failed to indict him.
Wall Street to Obama: Hands off! By Aaron Smith NEW YORK (CNNMoney.com) Misguided. Unworkable. Hypocritical. Wall Street was unimpressed by President Obama's argument for financial reform on Thursday. The reaction of nearly a dozen financial industry workers ranged from skepticism to animosity. "It doesn't seem necessary for him to come down here," said Frank Clemente, a stock broker. "It's all political, not any real reform." Clemente was particularly annoyed that Obama criticized the financial industry after having accepted political contributions from Goldman Sachs employees during his presidential campaign.
Goldman's White House connections raise eyebrows by Greg Gordon | McClatchy Newspapers WASHINGTON — While Goldman Sachs' lawyers negotiated with the Securities and Exchange Commission over potentially explosive civil fraud charges, Goldman's chief executive visited the White House at least four times. White House logs show that Chief Executive Lloyd Blankfein traveled to Washington for at least two events with President Barack Obama, whose 2008 presidential campaign received $994,795 in donations from Goldman's employees and their relatives. He also met twice with Obama's top economic adviser, Larry Summers.
SEC workers watched porn as economy tanked USA Today.com WASHINGTON (AP) — Senior staffers at the Securities and Exchange Commission spent hours surfing pornographic websites on government-issued computers while they were being paid to police the financial system, an agency watchdog says. The SEC's inspector general conducted 33 probes of employees looking at explicit images in the past five years, according to a memo obtained by The Associated Press. The memo says 31 of those probes occurred in the 2 1/2 years since the financial system teetered and nearly crashed. It was written by SEC Inspector General David Kotz in response to a request from Sen. Charles Grassley, R-Iowa.
Blankfein fights back on SEC case By Henny Sender in New York and Stephanie Kirchgaessner in Washington - FT.com Lloyd Blankfein on Wednesday attacked the Securities & Exchange Commission’s fraud charges in telephone calls to ?clients as Goldman escalated its campaign to stem the damage to the bank’s reputation. One person who received a call from the Goldman chief said he was told the regulator’s case against the bank was politically motivated and would ultimately “hurt America”.
REPO 105 Lawrence McDonald discusses Lehman Brothers' Repo 105
Lehman Brothers - Cooked the Books, Jail Geithner, Jail Fuld
Back to Basics on Financial Reform By NIALL FERGUSON, TED FORSTMANN - WSJ.com The case for limiting leverage and regulating derivatives is overwhelming, but that doesn't require a new 1,300-page law. A "trilemma" is like a dilemma, only there are three things to choose from and you can have just two. The current debate over post-crisis financial regulation suggests we face such a trilemma: We can choose any two of the following, but not all three: 1) efficient capital markets 2) no bailouts to big banks and 3) a depression-free economy. From the 1980s until 2007, we essentially opted for one and two. Financial markets operated with more freedom than at any time since the 1930s and the Federal Reserve stood ready to cut interest rates if asset prices tanked. But the idea that big banks might be able to get new capital from the Treasury was scarcely even contemplated. Choosing one and two resulted in a global financial and economic crisis worthy of the name depression.
Fed Said to Press Largest Banks to Lower Pay Incentives for Risk By Ian Katz -- April 22 (Bloomberg) -- Federal Reserve supervisors are telling about two dozen of the largest U.S. banks they must do more to end pay practices that encourage excessive risk-taking and are ordering boards to step up scrutiny of incentives, according to three people briefed on the discussions. Fed officials met in recent weeks with executives and board members and told them to submit plans for repairing deficiencies in how they monitor pay, the people said. The banks also must ensure that managers of individual business units aren’t given too much discretion over employee compensation. Firms in the Fed’s review program include Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., Bank of America Corp. and Morgan Stanley, one of the people said.
Financial Regulation
Obama Urges Finance Industry to End Regulation Fight By Roger Runningen and Hans Nichols April 22 (Bloomberg) -- President Barack Obama called on the financial industry to drop the “furious effort” to fight his regulation plan, saying a failure to impose tougher rules on the market will put the U.S. economic system at risk. The U.S. was almost dragged into a second Great Depression by “a failure of responsibility -- from Wall Street all the way to Washington,” Obama said today in a speech he delivered at Cooper Union in New York, about two miles from Wall Street.
Obama to Wall Street: I Told You So CBSNews.com President Criticizes Financial Leaders Even as He Asks for Their Support on Regulatory Reform (CBS/AP) Speaking just two miles from Wall Street, President Barack Obama chided the financial leaders for a "failure of responsibility" even as he sought their help for "updated, commonsense" regulations to head off any new financial crisis. "Ultimately there is no dividing line between Main Street and Wall Street. We rise or we fall together as one nation. So I urge you to join me," Mr. Obama said in a high-stakes speech near the nation's financial hub.
Obama Doesn’t Intend to Give Back Goldman Donations By John McCormick April 22 (Bloomberg) -- President Barack Obama doesn’t plan to give back almost $1 million in campaign contributions from employees of Goldman Sachs Group Inc. “We make these decisions on a case-by-case basis, and in this case we have not accepted contributions from specific individuals accused of wrongdoing, nor have we advocated for positions that big Wall Street banks generally favor,” Hari Sevugan, a Democratic National Committee spokesman, said in a statement.
William K. Black's Testimony to the Congress on Lehman's fraud The recent US financial crisis is always and everywhere founded in regulatory capture, dissembling, influence peddling, and fraud.
Bill Black's eye-popping opening statement at House FinServ hearing on Lehman Bros. failure
Budget Crisis Puts LA Court System At Risk CBS News.com Los Angeles Court System Dealing With Painful Cuts, Courtroom Shutdowns That Could Get Worse LOS ANGELES (AP) - The nation's largest court system is in the midst of a painful budget crisis that has shut down courtrooms and disrupted everything from divorce and custody proceedings to traffic ticket disputes. The Los Angeles court system has already closed 17 courtrooms and another 50 will be shut down come September unless something is done to find more money. The judge who presides over the system predicts chaos and an unprecedented logjam of civil and family law cases in the worst-case scenario.
Oil Trades Below $84 as Stronger Dollar Curbs Commodity Demand By Ben Sharples April 23 (Bloomberg) -- Crude oil traded below $84 a barrel in New York, paring gains for the week, as the stronger dollar curbed demand for commodities. Oil rebounded yesterday to close little changed after the National Association of Realtors said home purchases advanced 6.8 percent to a 5.35 million annual rate and a government report showed new applications for jobless benefits dropped. OPEC will reduce oil shipments for the first time since March as Asian refiners cut imports while performing maintenance. “Oil is taking a bit of a breather, the U.S. dollar strengthened and that has knocked it over a bit,” Peter McGuire, managing director at CWA Global Markets Pty, said by phone from Sydney. “Over the next two to three months there is more upside.”
Burning oil rig sinks into Gulf; 11 still missing By KEVIN McGILL - Associated Press NEW ORLEANS (AP) - An oil platform that burned for more than day after a massive explosion sank into the Gulf of Mexico on Thursday, the U.S. Coast Guard said. Crews searched by air and water for 11 workers still missing from the Deepwater Horizon, though one relative said family members have been told it's unlikely anyone survived Tuesday night's blast. Supply vessels had been shooting water into the rig try to control the flames enough to keep it afloat, but couldn't, Coast Guard Petty Officer Katherine McNamara said.
Even Good Housing Numbers Aren't Adding Up Right By: Diana Olick - CNBC Real Estate Reporter So first time buyers are juicing the housing market once again, accounting for 44 percent of all sales in March. While the percentage is high, the actual volume is not nearly what it was last fall, when the tax credit for them was originally set to expire. And while investors are still in there at a 19 percent share of buyers, my sources on the ground say they are losing ground, especially in California, where the inventory of cheap homes is very low.
Wholesale Prices Rise in March as Food Costs Jump By CHRISTOPHER S. RUGABER - AP Wholesale prices rise in March as food costs jump, but core inflation remains all but flat Wholesale prices rose more than expected last month as food prices surged by the most in 26 years. But excluding food and energy, prices were nearly flat. The Labor Department said the Producer Price Index rose by 0.7 percent in March, compared to analysts' forecasts of a 0.4 percent rise. A rise in gas prices also helped push up the index. Still, there was little sign of budding inflation in the report. Excluding volatile food and energy costs, wholesale prices rose by 0.1 percent, matching analysts' expectations.
Jobless claims drop; food prices surge USA Today.com WASHINGTON (AP) — First-time claims for jobless benefits fell 24,000 last week to a seasonally adjusted 456,000, and a wholesale price index rose more than expected last month as food prices surged the most in 26 years, the Labor Department said in two reports Thursday. The number of jobless claims was slightly below analysts' estimates of 458,000, according to Thomson Reuters. The drop comes after claims rose in the previous two weeks. A Labor Department analyst attributed those increases to seasonal adjustment difficulties around the Easter holiday, which falls on different weeks each year.
New Taxes to Help You Curb Your Sense of Freedom By Rocky Vega - DailyReckoning.com 04/22/10 Stockholm, Sweden – We’ve written before about how our taxes could be shipped abroad, and also about how a value-added tax could be on the way. Now, we take a look at the new sin taxes cropping up in states all across the nation. It’s one of the older plays in the book. Uncle Sam’s state governments can once again fly under the sensible cover of morality in order to tighten the screws on your income. According to The New York Times: “Texas, Georgia and Pennsylvania have considered “pole taxes” — for buyers of pornography and patrons of strip clubs and escort services. Seven states last year either enacted new taxes on alcohol or raised old ones, according to the Center on Budget and Policy Priorities.
How foreclosure impacts your credit score By Les Christie NEW YORK (CNNMoney.com) -- If you're delinquent on your mortgage, your credit score will suffer. Everyone knows that. The question is, by how much? Until recently, those answers were hard to come by. Credit bureaus were uncommunicative about expressing, in points, just how much impact different foreclosure types of mortgage delinquencies have on scores. Recently, Fair Isaac, which developed FICO scores, pulled back the curtain a bit, revealing some estimates of point-score declines following mortgage delinquency problems.
Killer fungus seen in Pacific Northwest By Amanda Gardner - CNN.com (Health.com) -- A rare but life-threatening tropical fungus that causes lung infections in both people and animals has been seen in the Pacific Northwest and could spread, researchers are reporting. The fungus, known as Cryptococcus gattii (or C. gattii), has infected dozens of humans and animals--including cats, dogs, and dolphins--in Washington and Oregon in the past five years. While rare, the fungus has been lethal in about 25 percent of the people in the U.S. who have developed infections, according to Edmond Byrnes III, a doctoral student in molecular genetics and microbiology at Duke University and one of the lead authors of a new study about the fungus.
Illegal immigration becomes Arizona state crime By Jim Kouri, CapitolHillCoffeeHouse.com Arizona is the first state in the U.S. to make illegal immigration a crime—and illegal aliens and their advocates aren’t happy about it. While the pleas from American citizens in Arizona and other states fall on deaf ears in Washington, DC, the violence and crime at the U.S.-Mexico border continues unabated. In yet another example of violence spreading north of the border, a deadly Mexican gang is actively plotting to kill U.S. law enforcement officers and their families in Texas, according to a Department of Homeland Security alert that warns U.S. cops to wear body armor and vary routes to avoid being tracked.
The Real Republican Civil War By KIMBERLEY A. STRASSEL - WSJ.com The struggle between Marco Rubio and Charlie Crist for the Florida Senate seat symbolizes the rift between the reformers and the establishment in the GOP. Marco Rubio appeared on a Sunday talk show this month to say something remarkable. The Republican running for Florida's Senate seat suggested we reform Social Security by raising the retirement age for younger workers. Florida is home to 2.4 million senior citizens who like to vote. The blogs declared Mr. Rubio politically suicidal. The response from Mr. Rubio's primary competitor, Gov. Charlie Crist, was not remarkable. His campaign slammed Mr. Rubio's idea as "cruel, unusual and unfair to seniors living on a fixed income." Mr. Crist's plan for $17.5 trillion in unfunded Social Security liabilities? Easy! He'll root out "fraud" and "waste."
Liberals and the Violence Card Conservative protest is motivated by a love of what America stands for. By RUSH LIMBAUGH - WSJ.com -- The latest liberal meme is to equate skepticism of the Obama administration with a tendency toward violence. That takes me back 15 years ago to the time President Bill Clinton accused "loud and angry voices" on the airwaves (i.e., radio talk-show hosts like me) of having incited Oklahoma City bomber Timothy McVeigh. What self-serving nonsense. Liberals are perfectly comfortable with antigovernment protest when they're not in power. From the halls of the Ivy League to the halls of Congress, from the antiwar protests during the Vietnam War and the war in Iraq to the anticapitalist protests during International Monetary Fund and World Bank meetings, we're used to seeing leftist malcontents take to the streets. Sometimes they're violent, breaking shop windows with bricks and throwing rocks at police. Sometimes there are arrests. Not all leftists are violent, of course. But most are angry. It's in their DNA. They view the culture as corrupt and capitalism as unjust.
Gerald Celente on Gary Null 20 April 2010
Radical Muslim Group Warns "South Park" Creators CBSNews.com Website Posting Says Depiction of Prophet Muhammad in Bear Suit Was "Outright Insulting" (AP) A radical Muslim group has warned the creators of "South Park" that they could face violent retribution for depicting the prophet Muhammad in a bear suit during last week's episode. The website RevolutionMuslim.com has since been taken down, but a cached version shows the message to "South Park" creators Trey Parker and Matt Stone. The article's author, Abu Talhah Al-Amrikee of New York, said the men "outright insulted" the religious leader.
Iran begins war games in Persian Gulf oil route Associated Press - TEHRAN, IRAN TEHRAN, Iran (AP) — Iran's elite Revolutionary Guard held war games Thursday in the strategic Persian Gulf oil route, the Hormuz Strait, a show of its military strength at a time when the country's leaders are depicting President Barack Obama's new nuclear policy as a threat. Ahead of the military maneuvers, Supreme Leader Ayatollah Ali Khamenei accused Washington of trying to dominate the world through its nuclear arsenal and vowed that Iran would not bend before what he called "implicit atomic threats."
Mystery rocket explodes in Jordan News.BBC.co.uk - A rocket has exploded near the southern Jordanian city of Aqaba, damaging a warehouse but causing no casualties. The rocket was one of two fired early on Thursday which landed in Jordanian territory - the other fell into the Red Sea. There are conflicting reports as to where the rockets were launched. Egyptian officials denied Israeli reports they had come from Egypt's Sinai Peninsula. Jordan's PM said they had not been launched from his country.
Netanyahu: Iran provoking Israel-Syria conflict JERUSALEM (AP) — Israeli Prime Minister Benjamin Netanyahu says Iran is trying to provoke a war between Israel and Syria. Netanyahu says Iran is trying to convince Syria that an Israeli attack is imminent, which he says is a "lie." Tensions have been high recently between Israel and Syria. The sides have traded threats, and last week Israel accused Syria of smuggling powerful rockets to the Lebanese guerillas of Hezbollah. Syria denied the charge.
Israel rejects US demand to halt building in disputed east Jerusalem James Hider in Jerusalem - TimesOnline.co.uk -- Israel has officially rejected President Obama’s demand that it halt all construction in east Jerusalem, deepening the diplomatic deadlock between the allies just as the US regional envoy is due to renew efforts to resume indirect peace talks. Officials said that Binyamin Netanyahu, the Israeli Prime Minister, conveyed his position to the White House at the weekend. Mr Netanyahu and other senior ministers had already declared publicly that they would not cease construction in the disputed eastern half of the city, which Israel captured in the 1967 Six-Day war.
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Thurs 04.22.2010
Decrying U.S. ‘Threats,’ Iran to Launch War Games By NAZILA FATHI, DAVID E. SANGER - NYTimes.com Iran’s supreme religious leader, Ayatollah Ali Khamenei, declared Wednesday that President Obama’s new nuclear strategy amounted to “atomic threats against Iranian people,” and the Iranian military announced it would conduct a large military exercise in the Persian Gulf, where the United States and Israel have both increased their presence in recent months. The ayatollah’s statement referred to the section of Mr. Obama’s “Nuclear Posture Review” that guaranteed non-nuclear nations that they would never be threatened by a United States nuclear strike — as long as they are in compliance with the Nuclear Nonproliferation Treaty as judged by the United States.
North Korea Torpedoed South's Navy Ship By REUTERS SEOUL (Reuters) - South Korea's military believes a torpedo fired from a North Korean submarine sank its navy ship last month, based on intelligence gathered jointly with the United States, a news report said on Thursday. The Yonhap news agency report appears to be the clearest sign yet that Seoul blames Pyongyang for the sinking, thought to have killed 46 sailors in what would be one of the deadliest incidents between the rivals since the end of the 1950-53 Korean War.
IMF world outlook warns of debt in developed world, inflation in emerging markets By Howard Schneider - WashingtonPost.com DEVELOPED WORLD Government debt Levels of government debt in the developed world are approaching levels not seen since World War II, and IMF economists see this as one of the chief risks for continued recovery. The fund is calling for a period of "fiscal consolidation" -- spending cuts and tax hikes -- in the United States, Europe and Japan, so that debt levels stabilize soon and begin a period of gradual decline. The risk, the agency says, is that chronically higher interest rates and chronically slower growth will set in as government borrowing undermines private-sector activity. The more acute danger involves a series of Greek-style crises in which governments would find it harder to raise the money needed to operate, risking a broader economic malaise.
Double-Dip Recession, Shot Federal Wad by Gary North - LewRockwell.com The case for a secondary recession rests on several factors: a double-dip decline in the residential real estate market, the accelerating decline in the commercial real estate market, the unresolved losses in bank balance sheets, the narrow focus of the profitability (earnings), which has been limited to bailed-out banks, and the threat of rising long-term interest rates, i.e., a decline in the bond market. All of these factors are known to the investment community, yet they have not persuaded stock market investors that there is any threat to corporate profits. So, either the negative factors are minor issues or else the optimism of stock market investors is an example of the same sort of stock market boomlet that took place in 1930. It collapsed in 1931.
America's Impending Master Class Dictatorship Stewart Dougherty - SilverBearCafe.com At certain times, focusing on the big picture is important not just for investment success, but for personal welfare, and even survival. We believe such times are here. It is estimated that 98% of Americans have never held a gold coin in their hands. Yet 100% of Americans regularly handle Federal Reserve Notes. From a contrarian standpoint, the financial message from those two statistics is clear. Even so, gold is much more than money or an investment medium; it stands for liberty and throughout history has facilitated escape and ensured freedom. Never having touched a gold coin is the monetary equivalent to never having breathed fresh air, felt the warmth of sunshine, looked up at the stars or risen from the gutter. Fiat Federal Reserve Notes are becoming nothing more than sewage decomposing in the vast, toxic septic tank of predatory Washington politics, epic Federal Reserve arrogance and error, blatant Wall Street fraud and outright Master Class plunder. Below, we outline America’s troubling and compounding predicament, and urge you to think about how to protect yourself from its consequences, both financially and personally.
Eight Reasons America Is On Edge Howard Fineman - Newsweek.com Fifteen years after the Oklahoma City bombing, the parallels to today are striking. On the banks of the Potomac River, guys carrying guns gathered in a Virginia park to proudly advertise the state's "open carry" law. Their compatriots gathered on the National Mall to honor the Second Amendment. They carried signs warning "Don't Tread on Me". On cable TV, Republicans speak about a "gangster government" and the need to "reload"—all innocent discourse, they claim—while on another channel, Democrats warn that such talk could lead to violence. And in Oklahoma City this week, families of those who died in the 1995 bombing are remembering their loved ones. People across the country wonder if, or when, it could all happen again.
Gold at $1130-40 attractive for long-term investors Commodity Online Gold has fallen from its Friday high of $1160 to $1130 levels on Monday, a decline of 2.5%. Prices have since recovered to $1140 levels, the $1130-40 price range is an attractive entry point for long-term investors, according to Jeffrey Nichols, renowned precious metals Economist and Senior Economic Advisor to Rosland Capital. "There is good support under these levels from the main Asian markets – China and India – where current prices should engender price-sensitive buying. In addition, we are at a seasonally important time for the Indian market ahead of the propitious May wedding period. Bullion traders and jewelry manufacturers stepped up their buying earlier this month – and I expect we'll see still more buying at recent prices."
Bullish Bullion: Gold to gain 10%, Silver 20% The multi-faceted yellow metal gold had a hard time during the wake of the worst recession since the Second World War as an untimely rise in US dollar eclipsed the safety haven appeal of the metal. Gold was also caught up in the imbroglio where panic selling engulfed the market. The metal usually shares an inverse relationship with US dollar as it is considered an alternative investment to the currency. However, the metal benefited from the subsequent dip in the economical cycle, which pummeled the US currency, driving investors towards the safety of gold. The metal, since then, went o on to explore new heights with investment and safety buying piling up, lending the metal with wings to rise.
When Will Gold Make its Next Big Move? by Jordan Roy-Byrne - FinancialSense.com In recent commentaries, we’ve focused on the macro factors that will drive acceleration in the precious metals sector. Namely, the gradual exodus from both government and corporate bonds as authorities are forced to monetize debts in an effort to avoid rising interest rates, which would hasten default and bankruptcy. This, and not bank lending or consumer demand, is the cause of severe inflation. Predicting the timing is more difficult then the actual event. Luckily for our subscribers we constantly pour over numerous technical charts and sentiment indicators in order to advise as to favorable entry and exit points. In analyzing Gold, we find that intermarket analysis is an essential tool. Intermarket analysis is analyzing a market by comparing it to other markets.
Silver The Most Bullish Currency Hubert Moolman - SilverBearCafe.com Gold appears extremely bullish in most of the world's currency. Probably more than it has ever been in the last 30 years. However, there is one currency in which gold is looking really bearish. That currency is none other than the world's other true currency called silver. The outlook for silver as a currency is as bright as it has ever been; in fact, in my opinion, there is no currency that will match silver over the next couple of years. Below is a long term chart of the gold/silver ratio, which translates to the silver price of gold.
Cash Futures, Physical Forwards, and London Gold's "100-to-1 Leverage" by Paul Tustain - FinancialSense.com SOME COMMENTATORS are alarmed that the amount of 'physical' gold in London is not sufficient to meet the immediate demands of the market. This concern is based on a simple misunderstanding. Read what follows and you will have a much better idea of how gold futures, forwards, the spot and physical markets interact. Professionals who trade gold over the counter use a convenient standard for specifying the form of the gold they will deliver between each other. The standard is written and maintained by the London Bullion Market Association (LBMA).
Big banks mint money again: $18.7 billion By Colin Barr - Fortune (Fortune) -- The biggest banks are minting money. Can they keep it up? Do we even want them to? The six biggest bank holding companies - Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley - raked in $18.7 billion in profits in the first quarter. That's more than six times as much as they earned in the fourth quarter of 2009, and their biggest haul since the financial crisis of 2008.
Sound Money and Schoolyard Politics Szandor Blestman - SilverBearCafe.com Economics is not rocket science. In fact, most everyone learns the basics of economics when they’re children. It’s quite simple, really, like math. If you have something I want and I have something you want, we can trade. We’re both happy. That’s really about it. Oh, sure, there are subtleties involved and other considerations to take into account, but those are really more about psychology and human behavior rather than economics. At its most basic level, economics is simply about how one acquires stuff.
Euro Is Near 2-Week Low on Concern Greece Talks May Fall Short By Yoshiaki Nohara and Ben Levisohn -- April 22 (Bloomberg) -- The euro traded near a two-week low against the dollar on concern discussions of a 45 billion- euro ($60 billion) aid package for Greece will fail to stem the nation’s debt crisis. The 16-nation currency fell against the yen for a second day as the International Monetary Fund yesterday cautioned that a failure of nations to contain soaring public debt might have “severe” consequences for the world economy. The yen may advance against higher-yielding currencies on expectations U.S. President Barack Obama will say today that new financial- industry regulations are needed.
IMF and Bundesbank fear contagion from Greece as bond spreads soar to fresh records By Ambrose Evans-Pritchard - Telegraph.co.uk The International Monetary Fund has warned that Greece’s debt crisis risks spinning out of control, threatening to spill over across the region unless action is taken soon to restore confidence. "In the near term, the main risk is that – if left unchecked – market concerns about sovereign liquidity and solvency in Greece could turn into a full-blown sovereign debt crisis, leading to some contagion," said the Fund in its World Economic Outlook. Bundesbank chief Axel Weber echoed the concerns, saying the financial system was still very fragile and subject to a "significant risk of contagion effects. A possible default by Greece would most likely be a severe economic blow for other countries in monetary union".
V-Shaped Explosion Martin Hutchinson - SilverBearCafe.com Commentators, including the egregious Ben Bernanke, are increasingly claiming that the United States is in the process of a V-shaped recovery from the Great Recession. Certainly first-quarter GDP, to be announced next week, is likely to show a substantial bounce, albeit not quite the inventory-driven 5.6% annualized growth of the fourth quarter. Yet commentators should be careful what they wish for: a V-shaped recovery is likely to lead not to a prolonged period of healthy growth, but to an economic explosion and collapse.
IMF Urges Stronger Chinese Yuan; Japan Might Need More Stimulus By Aki Ito April 22 (Bloomberg) -- The International Monetary Fund said China should let the yuan gain to cool growth, while Japan must be prepared to widen its stimulus measures as Asia’s two biggest economies diverge. Japan, with its “tentative” economic recovery, is an exception in a region that’s leading the global rebound, the IMF’s semiannual World Economic Outlook, released yesterday, showed. The Washington-based lender that offered rescue packages to countries from Iceland to Ukraine during the crisis raised its projections for growth in Asia’s economies for 2010 and 2011.
Wall Street's Bad Dream By ANDREW COCKBURN If only for a moment, things look a little sour for Wall Street. Amid the SEC’s indictment of Goldman-Sachs and consequent reminder to the citizenry of the crookedness rampant in the financial “services” industry, a hitherto loyal ally, Senate Agriculture Committee chair Blanche Lincoln, has proposed legislation requiring major banks to divest themselves of their their vitally lucrative derivatives trading desks. Only at the very end of the senate Democrats’ enormous 1408 page financial reform is there a hefty chunk of solace for the bankers, in the form of Section 1155, a generally unnoticed provision clearly mandating another taxpayer-funded bailout all round the very next time disaster strikes.
The Role of Government Dan Denning - SilverBearCafe.com We're going to paint with a broad brush and say most well-meaning government interventions in public and private life are designed to promote equality of outcome, social justice, or reduce the seeming unfairness and volatility of life in market economy. But have you ever wondered if, in the earnest attempt to eliminate risk in our society (financial, physical, emotional), we're actually make people less safe and society more inherently risky?
Goldman Sachs Not 'Too Big For Jail', House Dems Write Attorney General Ryan Grim - HuffingtonPost.com Democrats in the House are pressing the Justice Department to pursue a full-scale criminal investigation of Goldman Sachs, the bank hit last week with civil fraud charges by the Securities and Exchange Commission. Led by Rep. Marcy Kaptur (D-Ohio), the group is asking more members of Congress to sign on to the letter to Attorney General Eric Holder requesting that "if the DOJ is not currently looking into this particular case, we respectfully ask you to ensure that the U.S. Department of Justice immediately open a case on this matter and investigate it with the full authority and power that your agency holds."
Goldman Sachs in legal crosshairs By Tomoeh Murakami Tse and Zachary A. Goldfarb Washington Post Staff Writer Along with SEC, other investigators and suits may target Goldman Sachs NEW YORK -- As investigators in Massachusetts considered charging Wall Street firms for their role in the financial collapse, they focused on Goldman Sachs because it had bundled and sold the shoddiest of subprime mortgage loans, setting up the housing market for a greater fall by continuing to sell shaky securities even as other banks withdrew. After discussions with the office of state Attorney General Martha Coakley (D), Goldman last year agreed to pay up to $60 million to end that investigation, the first major settlement involving Wall Street's role in the subprime mortgage crisis.
AIG Said to Insure Goldman's Board Against Investor Suits By Hugh Son -- American International Group Inc., the financial firm rescued by the U.S., is the lead insurer of Goldman Sachs Group Inc.’s board against shareholder lawsuits, said a person with knowledge of the policy. AIG is among firms that sold so-called Side A directors and officers’ coverage to the New York-based bank, said the person, who declined to be identified because details of the policy are private. Goldman Sachs was sued last week by the Securities and Exchange Commission, which claimed it misled investors in 2007.
The Multiple Scams of Goldman Sachs By DEAN BAKER Last year, Rolling Stone columnist Matt Taibbi described Goldman Sachs as “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money." It turns out that Mr. Taibbi was far too generous in his assessment of the huge investment bank. Since that time we have learned that Goldman played a central role in helping Greece to hide its government budget deficit from the European Union, the financial markets, and the public at large. Goldman sold complex swaps to Greece in which it paid the Greek government for future revenue streams on items like airport landing fees. This was in effect a loan, but the swap allowed the Greek government to avoid entering the borrowed money on its books as a loan, which would have raised its budget deficit above the euro zone limits. Today of course Greece’s financial meltdown is threatening the stability of the euro.
Lehman fiasco fuels Obama bill debate By Sean Lengell - WashingtonTimes.com Big partisan battle brews again A probe of one of Wall Street's biggest failures has become a proxy battle in the congressional fight that could decide the fate of President Obama's push to overhaul the nation's financial regulatory system. As talks continued on a bid to reach a compromise deal, lawmakers on Tuesday used the investigation into the historic September 2008 bankruptcy of Lehman Brothers to spar over key provisions of the bill, which is shaping up as the biggest partisan clash on Capitol Hill since the passage of Mr. Obama's health care law.
There's a New AIG Story. I Was an AIG Exec. Here's the Deal. Richard (RJ) Eskow - HuffingtonPost.com It's looking like the SEC/Goldman Sachs lawsuit could open up a whole new can of worms -- one that Tim Geithner and some bank executives aren't likely to be very happy about. The story's about AIG and I used to work there so, as much as I like to stay out of the story, a little personal background is in order. We'll do the story first and then get to the personal stuff. The story is this: As almost everyone knows by now, the SEC filed a suit against Goldman over a program called Abacus. The suit alleges that Goldman didn't tell Abacus investors that the bonds they were essentially insuring were being picked by a firm (Paulson) which was betting that they'd fail. Remember that Twilight Zone episode called "To Serve Man," where the aliens promised to help everybody but were really just getting ready to eat them? In this story the investors are the humans and Goldman's execs are the aliens.
Ex-GSE Insiders Debate the Future of Fannie, Freddie By Jerry Ascierto - HOUSING FINANCE NEWS The entire structure of the nation’s housing finance system is up for play as Congress begins its debate on the future of Fannie Mae and Freddie Mac. But the next generation of housing finance will be forged at a time when partisan divides are as deep and heated as at any time in recent history. “The mood on Capitol Hill is one of tension, and sometimes bordering on hysteria, about the GSEs,” said Doug Bibby, president of the National Multi Housing Council, as he kicked off "The Government, the GSEs, and the Future," a keynote session at the 2010 Apartment Finance Today Conference.
Fed paid record $47.4 billion to Treasury in 2009 (Reuters) - The U.S. Federal Reserve said on Wednesday it transferred a record $47.4 billion to the U.S. Treasury in 2009 as a result of its programs to help the economy and financial firms during the financial crisis. The increase in income was primarily due to interest earnings on mortgage-backed securities issued by government supported mortgage finance agencies, the Fed said. Some of the data in the Fed's 2009 annual financial statement revises estimates released in January. The 12 Fed regional banks are required to transfer their profits to the Treasury after paying dividends to member banks and retaining some of their surplus.
Why religion could affect Obama's court nomination By James Oliphant, Los Angeles Times With the exit of John Paul Stevens, the court will be without a Protestant for the first time. Catholics dominate. Does it matter? When Supreme Court Justice John Paul Stevens steps down this summer, he will leave the court — long dominated by Protestants — without one for the first time in its history. That historical oddity has reopened a low-key debate as to whether the religion of a justice matters, and whether President Obama should consider the faith of his next nominee.
Gerald Celente Says This Is Among His Most Important Trends Ever Mac Slavo - SilverBearCafe.com The world's top trend forecaster, Gerald Celente, who has been publishing the Trends Journal since 1991, says his Spring 2010 report is one of the most important Trends he's ever published: "Of all the Trends Journals® I have published since 1991, this issue stands apart. Were I to rank it, I would say it is among the most important. The United States is on a path that, if not diverted, will lead the world into the first "Great War" of the 21st century.
SEC charges Miami schemer in massive Ponzi By Aaron Smith NEW YORK (CNNMoney.com) -- The SEC and the U.S. Attorney's office in New Jersey on Wednesday charged a Miami Beach-based businessman with allegedly running a Ponzi scheme that sucked in close to $1 billion. The Securities and Exchange Commission and U.S. District Attorney Paul Fishman filed fraud charges in New Jersey against Nevin K. Shapiro, founder and president of Capitol Investments USA. Shapiro is accused of fraudulently offering risk-free annual returns as high as 26% to investors in his grocery diverting operation, a type of business where low-cost groceries are purchased in one region and sold for a higher price elsewhere.
New York State May Run Out of Money Before July By Henry Goldman April 21 (Bloomberg) -- New York’s general fund may run out of cash in June and will for the first time in state history end the months of May through August with a negative cash balance, state Comptroller Thomas DiNapoli said. The third-most populous U.S. state ended its past fiscal year on March 31 with $2.3 billion in its general fund after Governor David Paterson delayed disbursing $2.9 billion, mostly in tax refunds and school aid. Because those payments must be made in the first quarter of the current fiscal year, the general fund may run out of money before July, DiNapoli said.
Fed's supersized reverse repos could come by summer Pedro Nicolaci da Costa - Reuters (Reuters) - The Federal Reserve could take a first crack at draining liquidity from the financial system this summer as the economy shows signs of healing, an opening salvo for eventual interest rate hikes that could rattle still-fragile financial markets. The Fed could begin draining bank reserves, via transactions known as reverse repurchase agreements, or repos, in large increments as early as this summer, market analysts say. Importantly, the U.S. central bank could begin repos before it openly abdicates a commitment to keep interest rates low for an "extended period" since, technically speaking, reverse repos do not constitute an actual rate hike.
U.S. Offers a Hand to Those on Eviction’s Edge By PETER S. GOODMAN - NYTimes.com SAN MATEO, Calif. — Two years into a merciless downward spiral, Antonio Moore was threatened with living on the street. He had lost his $75,000-a-year job as a mortgage consultant, his three-bedroom house with a Jacuzzi, his Lexus sedan. He could no longer pay even the rent on his cramped studio apartment — not on his $10-an-hour part-time job as a fry cook at a fast food restaurant. Faced with eviction, he was staring last month at the imminent prospect of joining the teeming ranks of the homeless. His last hope was a new $1.5 billion federal program aimed at preventing that fate.
Oklahoma lawmakers to sue over federal health reform (Reuters) - Leaders of the Oklahoma House and Senate said on Tuesday they plan to file a lawsuit to block President Barack Obama's reform of the U.S. healthcare system. House Speaker Chris Benge and Senate President Pro Tempore Glenn Coffee, both Republicans, said they plan to sue the U.S. Congress, president and U.S. Secretary of Health and Human Services to prevent provisions of the act Obama signed into law last month from taking effect. Their announcement follows the refusal earlier this month of Oklahoma Attorney General Drew Edmondson to join a multi-state lawsuit led by Florida's attorney general. Edmondson, a Democrat, said he would join the lawsuit if required by legislative action.
No job for years and still looking By Chris Isidore NEW YORK (CNNMoney.com) -- John Miller wasn't too nervous when he lost his job in the mortgage industry in June 2008. The worst of the financial crisis was still months away. While the subprime mortgage industry had already imploded, there was still a debate at the time whether a recession had started. Job losses were steady but not dramatic. Miller lost his job when Deutsche Bank shut down a unit making government-guaranteed FHA loans, but he had found work in the past when an employer had closed a unit. He thought that even if it took a few months to find another job, something would turn up.
KB Home’s Bruce Karatz Guilty in Backdating Trial By Edvard Pettersson April 21 (Bloomberg) -- Former KB Home Chief Executive Officer Bruce Karatz was found guilty by a U.S. jury of hiding from auditors and regulators that he backdated stock options. Jurors in federal court in Los Angeles today found Karatz guilty of two counts of mail fraud and two counts of making a false statement. He was acquitted of 16 charges, including mail and wire fraud, securities fraud and filing false proxy statements.
Will others follow Arizona's lead on immigration? By Kristi Keck, CNN (CNN) -- Now that Arizona lawmakers have passed what's considered some of the toughest immigration legislation in the country, other states are watching to see whether they should follow in the state's footsteps or stand back. Arizona's bill orders immigrants to carry their alien registration documents at all times and requires police to question people if there's reason to suspect they're in the United States illegally. It also targets those who hire illegal immigrant day laborers or knowingly transport them.
Savers Get the Shaft Jim Amrhein - SilverBearCafe.com The Bean Counter's Guillotine They think this because I go out of my way to avoid the gaze of cameras on traffic-light posts, highway underpasses, parking garages, airport departure lanes, stores and malls and coffee shops and government offices. They think this because I have three loaded guns in my house, one in every room in which I spend time - bedroom, living room, and office. OK, so I've got one in the bottom of the magazine basket next to the toilet in my master bathroom, too... But it's only a .22 snub-nose. It shouldn't even count. They think I'm a nut-job because I'm aware of how just vulnerable I am in an America where people think the "rule of law" gives them the right to $2 million in damages when they spill hot McDonald's coffee into their crotches - but not the right to their own safety and property under a natural conformity to legal order.
Tata May Beat Hyundai in India Helped by World’s Cheapest Car By Vipin V. Nair -- April 21 (Bloomberg) -- A Tata Motors Ltd. factory opening this month in western India to assemble the $2,500 Nano, the world’s cheapest car, may help the company surpass Hyundai Motor Co. this year as the nation’s second-largest automaker. The plant in Sanand will start producing the Nano by April 30 and make up to 250,000 a year, said Debasis Ray, a spokesman for the Mumbai-based company. That’s about 80 percent of Hyundai’s India sales last fiscal year, based on industry data.
Distrust, Discontent, Anger and Partisan Rancor by Pew Research - LewRockwell.com By almost every conceivable measure Americans are less positive and more critical of government these days. A new Pew Research Center survey finds a perfect storm of conditions associated with distrust of government – a dismal economy, an unhappy public, bitter partisan-based backlash, and epic discontent with Congress and elected officials. Rather than an activist government to deal with the nation's top problems, the public now wants government reformed and growing numbers want its power curtailed. With the exception of greater regulation of major financial institutions, there is less of an appetite for government solutions to the nation's problems – including more government control over the economy – than there was when Barack Obama first took office.
The Slippery Definition of Extremist by James Bovard, Future of Freedom Foundation Americans are once again hearing of the perils of extremism. But the definition of this offense is slipprier than a politician’s campaign promise. The definition of extremism has continually been amended to permit government policies that few sober people previously advocated. Prior to 2000, anyone who asserted that the Census Bureau was deeply involved with the roundup of Japanese-Americans for internment camps in 1942 was considered an extremist. The Census Bureau spent 60 years denying its role but finally admitted its culpability ten years ago after academics uncovered undeniable proof. Regardless of the Census Bureau’s past abuses or perennial deceit, only extremists believe that their answers to this year’s census could ever be used against them.
SOUTHERN POVERTY LAW CENTER PUBLISHES PATRIOT HIT LIST By Chuck Baldwin - NewsWithViews.com -- In a report on its web site dated April 2010, entitled "Meet The Patriots," the Southern Poverty Law Center (SPLC) profiled "36 individuals at the heart of the resurgent [patriot] movement." (In reading the list, I counted only 35 "patriots" and 5 "enablers" for a total of 40. I'm not really sure how the SPLC came up with "36." Perhaps their ability to count is commensurate with their ability to appreciate patriotism and liberty.) The SPLC (founded by Morris Dees) sees itself as America's guardian against "right wing militias" and loves to label conservatives and libertarians that it doesn't like as "extremists." The SPLC is one of the most ultra-liberal organizations in the country and should be dismissed as a group of paranoid leftists, not worthy of thought or mention.
Leftwing extremist 'Southern Poverty Law Center' smears conservatives, patriots Conservative ExaminerAnthony G. Martin -- The Leftwing extremist group called 'The Southern Poverty Law Center' of Montgomery, Alabama has with one stroke of the pen smeared conservatives and Patriots in its new, infamous 'blacklist' it entitles, 'Meet the Patriots.' Among those it includes in the blacklist are some of the most reputable conservative Patriots in America today, such as U.S. Representative Michelle Bachmann (R-MN), federal judge and Fox News legal analyst Andrew Napolitano, U.S. Representative Ron Paul (R-TX), Gun Owners of America (GOA) chief Larry Pratt, Fox News personality Glenn Beck, and U.S. Representative Paul Broun (R-GA), among others.
THANKS SPLC, . . . for listing a few freedom loving Americans who will not be intimidated.
Meet the 'Patriots' Southern Poverty Law Center In the last year and a half, militias and the larger antigovernment "Patriot" movement have exploded, accompanied by the rapid expansion of other sectors of the radical right. This spectacular growth (see timeline) is the result of several factors, including anger over major political, demographic and economic changes in America, along with the popularization of radical ideas and conspiracy theories by ostensibly mainstream politicians and media commentators. Although the resurgence of the so-called Patriots — people who generally believe that the federal government is an evil entity that is engaged in a secret conspiracy to impose martial law, herd those who resist into concentration camps, and force the United States into a socialistic "New World Order" — also has been propelled by people who were key players in the first wave of the Patriot movement in the mid–1990s, there are also a large number of new players. What follows are profiles of 35 individuals at the heart of the resurgent movement:
Heaven Can Wait - Chuck Baldwin, 57
The Repentant Taxman - Joe Banister, 47
Bulldozer vs. Bulldozer - Martin "Red" Beckman, 80
'Needle of Estrogen' - Catherine Bleish, 26
Arguing at Gunpoint - Chris Broughton, 29
The Pricey 'Patriot' - Bob Campbell, 69
Murder: The Fantasy - Robert "Lil Dog" Crooks, 59
Unfair and Unbalanced - Joseph Farah, 55
The FEMA Fabulist - Gary Franchi, 32
The Exaggerator - Al Garza, 64
Of Government and Guillotines - Ted Gunderson, 81
The Unnamed Co-Conspirator - John Hassey, 60
Telling Tall Tales - Alex Jones, 36
The Red-Hot Patriot - Devvy Kidd, 60
Apostle of Disunion - Larry Kilgore, 45
Writing Right - Cliff Kincaid, 55
Swim for Your Life - Mark Koernke, 52
A Sheriff of Their Own - Richard Mack, 57
Facts and Fiction - Jack McLamb, 65
Railing About Reds - John F. McManus, 75
Facing Down the UN - Daniel New, 64
Back in the Saddle - Norm Olson, 63
Out of the Barrel of a Gun - Larry Pratt, 67
Of Cops and Conspiracies - Stewart Rhodes, 44
Correcting the Constitution - Jon Roland, 66
The 'Patriot Journalist' - Luke Rudkowski, 23
Militia Midwife - Robert "Bob" Schulz, 70
The Cautious Conspiracist - Joel Skousen, 63
The Rough Guide - Jim Stachowiak, 49
Running Radical Radio - John Stadtmiller, 56
'Alice in Wonderland' - Orly Taitz, 49
Teed Off in Tulsa - Amanda Teegarden, 54
Gunning for the Government - Mike Vanderboegh, 56
Uncommon Citizen - Paul Venable, 56
Architect of Militias - Edwin Vieira Jr., 66
100% American - Michele Bachmann, 54
Meet the Enablers:
The Ringmaster - Glenn Beck, 46
Doctor of Demonization - Paul Broun, 64
Fox Pox - Andrew Napolitano, 59
'Dr. No' - Ron Paul, 74
Special army unit ready to be deployed on American soil just before Nov. elections April 21, 2010 - Newark Examiner.com In October of this year, one month prior to the November midterm elections, a special army unit known as 'Consequence Management Response Force' will be ready for deployment on American soil if so ordered by the President. The special force, which is the new name being given to the 1st Brigade Combat Team of the 3rd Infantry, has been training at Fort Stewart, Georgia and is composed of 80,000 troops. According to the Army Times, "They may be called upon to help with civil unrest and crowd control or to deal with potentially horrific scenarios such as massive poisoning and chaos in response to a chemical, biological, radiological, nuclear or high-yield explosive, or CBRNE, attack."
Consequence Management Response Force CCMRFs now training on US soil! Marial Law NorthCOM
Perot: Time will show impact of tea party effort By JOHN MILBURN - The Associated Press KANSAS CITY, Mo. -- Texas billionaire Ross Perot said Tuesday that the national tea party movement seems to be doing well but that time will tell how it will affect the country, government and November elections. The former Reform Party presidential candidate also said he wouldn't be offering the group advice anytime soon. "In a free society, you're entitled to do whatever you want to do. Time will tell how effective it is," Perot told reporters in Kansas City on Tuesday, where he was receiving a leadership award from the Army's Command and General Staff College Foundation. "Just as a layman looking at it from afar, it seems to me they are pretty well organized and getting the crowd."
Allen West speaks about Islam
Allen West: Define the Enemy: What it takes to win in Afghanistan
America’s Economic Recovery Is a Rotten Sham By: Justice Litle - MarketOracle.co.uk More evidence has arisen that the "strategic default" consumer spending thesis is correct - and that the economic recovery on the whole is based on a rotten sham. The economic "recovery" we are now witnessing is based on theft, greed and deceit. It's a giant rip-off, a rotten sham. In this sleazy imitation of a free market economy, liars, cheats and deadbeats are the ones getting rewarded. And as for the savers, the hard workers, the ones who chose to honor their debts and live within their means? Nothing but a bunch of suckers. (They're the ones paying for it all.) If you're one of those "suckers," at least you've got company. I'm a sucker too. All this time, I thought working hard for my money and staying debt free was wise. I thought sticking with one credit card - paying down the balance every month, no exceptions - was prudent. I thought driving a five-year-old car - fully paid off, nothing flashy - was a sensible thing to do.
A Few Reasons Explaining the Jobless Recovery By Rocky Vega - DailyReckoning.com 04/20/10 Stockholm, Sweden – US economists would like us to believe that the recession is over. However, unemployment has been reluctant to go along with the farce, and has remained at newly high natural levels of 9.7 percent despite reports of solid growth last quarter. How could that be? Basic economics theory would argue that an employee is hired for a wage that is roughly equal to the value he or she adds to the company’s output. This would mean that workers should get hired now that the US is back to growth. In the face of the discrepancy, economists would describe that such a monster as an aggregate demand (AD) shock is responsible for the difference, but can that really explain it all?
Hyper, Stag or De-Flation? Paul Krugman is wrong. . . .The major, world threatening “flation” problems are not likely to destroy us with Stagflation or Hyperflation and are only tangentially related to simple Deflation as measured by the GDP deflator. They are much worse. Krugman spends a lot of blogging time trying to debunk hyperinflation, an event which even its supporters claim is years in the future. Krugman has been caught by what salesmen call the “Fool’s Choice” where a question is framed so that the real issue is excluded and discussion is in choices favorable to his opponents.
Gold Recovers as Markets Mull Recent Events Gold went up to $1,137/oz before dipping slightly in New York yesterday, but it then recovered, ending with a loss of 0.06%. It has risen from $1,135/oz to $1,142/oz in Asian and early European trading this morning. Gold is currently trading at $1,142/oz and, in euro and GBP terms, is trading at €847/oz and £742/oz, respectively. Gold has recovered much of the losses from Friday and gold's fall was as much to do with dollar strength and oil weakness last week as it was to do with the Goldman Sachs (GS) allegations. Indeed, gold has already recovered much of the losses from Friday especially in euro and sterling terms.
Gold may cash in on volcanic ash By Geena Paul LONDON (Commodity Online): A fuming volcano is holding the entire economy of Europe and several other nations to ransom as the world is pondering over the economic impact of this aerial attack for the past one week. For those who are not in the grip of things, the Eyjafjallajokull volcano in Iceland is wreaking havoc with European air traffic by spewing lava and ash into the air. The volcano is sputtering and bubbling and will probably create a cone formation as the lava spills over and freezes into rock. So, the world is in the grip of an ash cloud now and economic pundits are busy calculating how this volcanic disruption will impact the economies of several nations.
Dollar, Gold and Silver By: Sol Palha - SafeHaven.com "A man who has committed a mistake and doesn't correct it is committing another mistake." - Confucius, BC 551-479, Chinese Ethical Teacher, Philosopher The dollar as expected has mounted a very strong rally, and it just missed its target of closing above 82 on a monthly basis by a few points. It did, however close above 81 on a monthly basis which indicates that it is going to trade higher before a top is in place. As long as it does not close below 78.00 on a weekly basis, the odds of it trading to the 85-86 ranges are rather high. If it manages to close above 82 on a monthly basis, it would move the final targets to the 90-92 ranges. While a lot of noise is being made about the Aid package that the EU members have in place for Greece, the Euro is still not out of the red zone as many members are still facing huge budget shortfalls. Potentially Spain, Portugal or Italy could find themselves in the same place Greece is now in.
Oil and dollar can create a big spark in gold prices By Jon Nadler -CommodityOnline.com Portions of the Icelandic ash cloud and dissipated along with some portion of the concerns about the fate of Greece’s debt overnight. Thus, risk-taking (in the air as well as on market floors) became manifest once again and attempts were made to get back to business as usual. Whatever ‘usual’ has come to mean lately, that is. While a new ash cloud was already looming in the skies near Europe, the Goldman legal cloud appeared to have very little chance of having a successor of its own.
Explaining Gold Price Fluctuations BY STEVE SAVILLE - GreenFaucet.com Most mainstream financial journalists try to link the daily market action with the news of the day, as if the markets did nothing other than react to news. In general terms, they make the assumption that if a market fluctuation coincided with or followed a news event, then the news event must have caused the market fluctuation. Due to this modus operandi, it is not uncommon for journalists to cite the same event when attempting to explain a price rise one day and a price decline the next. For example, if the stock market rises one day and then falls the next, and at the same time there is news of a Greece bailout, it would be typical for the press to link both the rise and the fall to the bailout news.
GOP resists finance bill push By Patrice Hill - WashingtonTimes.com Geithner offers modifications The Senate's 41 Republicans held firm Monday against White House attempts to peel off one vote and ram through a partisan financial reform bill in a Senate floor vote expected at the end of the week. Treasury Secretary Timothy F. Geithner in recent days has met with a string of moderate Republicans to see whether any modifications in the bill could win their votes, but Republican legislators have emerged from the meetings saying they want the Democrats to go back to negotiating with Senate banking committee Republicans to come up with a bipartisan bill. Financial reform legislation traditionally has been bipartisan in both houses of Congress. "I am very optimistic that, given more time and the kind of discussion that I just had with the secretary of the Treasury, that we can put together a bipartisan bill that will deal effectively with the 'too big to fail' phenomenon," said Sen. Susan Collins of Maine, the latest to meet with Mr. Geithner.
Bankruptcy Reform Will Limit Bailouts By THOMAS JACKSON AND DAVID SKEEL - WSJ.com If Bear Stearns or AIG had been able to keep their derivatives creditors at bay, there would have been much less justification for a taxpayer rescue. The volcanic language coming out of Washington suggests there are only two choices with financial reform: Cram down Sen. Chris Dodd's bill over Republican opposition, or stop the bill in its tracks. But there is a third option that would address both sides' concerns by linking bankruptcy reform to the proposed framework for regulating derivatives. Derivative contracts are largely unregulated today, in part because both parties to most of the contracts are banks and other large financial institutions that were thought to be well able to protect themselves. Both the Dodd bill and the companion legislation that Sen. Blanche Lincoln (D., Ark.) has introduced in the Agriculture Committee would subject derivatives to two related kinds of regulation.
Does Wall Street control the government? Ezra Klein - WashingtonPost.com Tyler Cowen offers some interesting thoughts on whether the financial sector dominates the U.S. government: Perhaps the strongest piece of evidence for the financial sector dominance of U.S. political economy is the recent bailouts. Yet it's instructive to ask which other groups have received bailouts in the last fifteen years. The list would include Mexico and the numerous countries which have borrowed from the largely U.S.-created International Monetary Fund, such as Indonesia. They are hardly dominant forces of influence in Washington. It was China who made out like a bandit from the bailout of the mortgage agencies, and the validation of their debt issues, but again the Chinese are not in charge.
Are there more Cockroaches in the Kitchen by Hans Wagner - FinancialSense.com If you have you ever seen a cockroach in the kitchen, you know there are more that what you see. The same concept applies to improper financial activity by companies. When you find one bad action, you will more than likely find others. The Securities Exchange Commission (SEC) is suing Goldman Sachs for failure to disclose “vital information” regarding a synthetic collateralized debt obligation, named Abacus 2007-ACI. The SEC accuses Goldman of creating the sub-prime residential mortgage-backed securities portfolio and then selling it to investors, knowing that the security was filled with mortgages that were likely to fail causing the value of the package to fall. The SEC press release and complaint make for some interesting reading.
Surprise: Goldman Sachs to pay out $5 billion more in bonuses for first three months of 2010 By John Byrne - RawStory.com -- As if to put the icing on the cake, the investment bank Goldman Sachs is set to shell out another $5 billion in bonuses to employees. What's more, the bonuses are expected to cover the employees' work for just the first three months of the year, according to the UK Sunday Times. According to the report, bankers will receive remuneration of about $170,000 per person for the firm's 32,500 employees. Some traders are set to receive millions.
Dylan Ratigan Puppet Show Helps Explain Financial Crisis
SEC gambles with Goldman suit By Zachary A. Goldfarb and Tomoeh Murakami Tse Washington Post Staff Writer SEC sued Goldman Sachs to break an impasse For months, Goldman Sachs and the Securities and Exchange Commission had been involved in secret talks over allegations that the Wall Street bank defrauded customers in selling them investments designed to fail. Then, after a crucial meeting last month between lawyers for Goldman and the SEC, the agency came to a fork in the road. Even after SEC lawyers had told Goldman in writing they were prepared to file a federal suit, the firm gave no ground, declining to ask for a settlement, according to three people familiar with the case. The agency could prolong negotiations in hopes of reaching a deal Goldman would accept, as the SEC had often done in previous cases, or take the bank to court.
Schwab Settles Suit Over Mortgage-Backed Securities By THE ASSOCIATED PRESS - NYTimes.com SAN FRANCISCO (AP) - Charles Schwab will pay $200 million to resolve a federal class-action lawsuit filed by investors who say the financial holding company misled them over the safety of mortgage-backed securities. If approved by the court, the settlement announced Tuesday will result in a retroactive charge that would nearly eliminate the first-quarter profit that Schwab posted last week.
Goldman Sachs taps ex-White House counsel By EAMON JAVERS & MIKE ALLEN - Politico.com Goldman Sachs is launching an aggressive response to its political and legal challenges with an unlikely ally at its side - President Barack Obama's former White House counsel, Gregory Craig. The beleaguered Wall Street bank hired Craig - now in private practice at Skadden, Arps, Slate, Meagher & Flom - in recent weeks to help in navigate the halls of power in Washington, a source familiar with the firm told POLITICO. "He is clearly an attorney of eminence and has a deep understanding of the legal process and the world of Washington," the source said. "And those are important worlds for everybody in finance right now." They're particularly important for Goldman.
Goldman Sachs fraud charges 'just the tip of the iceberg' By Andrew McLemore - RawStory.com Charges of fraud brought against banking titan Goldman Sachs by the Securities and Exchange Commission rocked financial markets Friday, but experts say the allegations are merely the first of many to come, Reuters reported. After the SEC went public with the allegations, the Dow Jones dropped 125 points and Goldman Sachs stocks dropped 13 percent - the largest one-day drop in company history.
AIG vs. Goldman: Insurer May Match SEC's Fraud Suit Against Bank By PETER COHAN - DailyFinance.com -- You may recall that back in the good old days, American International Group (AIG) paid Goldman Sachs (GS) $12.9 billion of taxpayer money in a 100-cents-on-the-dollar settlement of credit default swaps that AIG had written. Now, according to a report in the Financial Times, AIG is hoping to piggyback on the SEC's fraud case against Goldman to get $2 billion back from the investment bank. Missing from the article is any evidence that AIG has a case for charging Goldman with fraud, but its willingness to fight for money in court is a sign that the old AIG is back. According to the Financial Times, AIG may sue Goldman -- whose earnings rose 91% to nearly $3.5 billion in the first quarter -- for $2 billion in losses it took insuring $6 billion worth of Goldman deals involving collateralized debt obligations similar to the ones in the Abacus family, over which the SEC is suing the investment bank.
Rivals say Goldman customers are taking a back seat By Steven Mufson and Tomoeh Murakami Tse Washington Post Staff Writer One former hedge fund manager said that when he read the headline about Goldman Sachs being charged with fraud he thought, "It's about time." But when he read the details of the case, he said he thought, "That's it?" Among many financial executives, there is little love lost for the powerful Goldman Sachs, which has been at the center of controversy over such things as bundling subprime mortgages, trading oil futures, and engineering Greek currency transactions. Although the positions taken by Goldman's own trading desk aren't public, many rival traders and fund managers say Goldman frequently bets against the very securities it is promoting to customers.
America on the verge of bailing out Greece By Mark Jurkevich - WashingtonTimes.com Nancy and Barack go into debt to solve Europe's problem When the president and the speaker of the House recently reached into taxpayer pockets for a trillion-dollar wealth-redistribution exercise under the guise of containing our health care costs, at least the recipients were, by and large, fellow Americans. As an encore, within the next month, billions of U.S. tax dollars will be spent plugging budget holes within the European Union's core eurozone. Evidently with Nancy and Barack's blessing. I am, of course, writing about the International Monetary Fund's (IMF) recent commitment to participate in the inevitable bailout of Greek national debt. The initial tab is $50 billion, and consensus is that this is just for triage and the patient ultimately will require much more. With the United States having the largest IMF quota, it is the largest donor country. While this unfolding story is getting daily media attention in Europe, including heads of state speaking out, President Obama and Speaker Nancy Pelosi seem to have decided just to let it happen. Except for specialty financial media, it seems as if the media also is giving a free pass to this story.
IMF Advises G-20 Nations to Tax Financial Firms By BOB DAVIS - WSJ.com WASHINGTON—The International Monetary Fund advised Group-of-20 nations to tax balance sheets, profits and compensation of financial institutions to reduce the chances of another financial crisis, and pay for the costs if one occurs. "Expecting taxpayers to support the [financial] sector during bad times while allowing owners, managers and/or creditors of financial institutions to enjoy the gains of good times misallocates resources and undermines long-term growth," the IMF wrote in a briefing paper for the G-20 industrialized and developing countries.
IMF: Mounting debt threatens global recovery By Howard Schneider - Washington Post Historic levels of government debt in the developed world could throw the global financial system back into crisis and clear plans are needed to bring it under control, the International Monetary Fund said Tuesday. In one of its first broad surveys since the recent recession gave way to renewed growth, the agency said that "sovereign risk" -- the chance that sovereign nations have racked up so much debt they won't be able to borrow enough money to pay their bills -- is now perhaps the central threat to the global financial system.
IMF's misdeeds unforgiven and unforgotten in Asia EarthTimes.org Bangkok - The Internal Monetary Fund (IMF) may be enjoying increased popularity as a financial saviour in Eastern Europe and, perhaps, even Greece, but in Asia the institution remains a pariah. The IMF was the key player in handling the Asian financial crisis that started in Bangkok in July 1997. That downturn quickly threw the region into a deep recession, wiping out foreign exchange reserves, depreciating currencies and causing a wave of bankruptcies and a slowdown in economic and social development. Back then, the IMF was a tough taskmaster, and set strict conditions for its bail-out funds to hard-hit countries such as Indonesia, the Philippines, South Korea and Thailand.
Short-Term Greek Debt Sale Succeeds By DAVID JOLLY - NYTimes.com PARIS - Greece easily sold a block of three-month bonds Tuesday, and at a lower interest rate than many forecasts. But its long-term prospects worsened amid skepticism that the country can pull itself out of a financial hole without drawing on aid from the European Union and International Monetary Fund. The Public Debt Management Agency said in a statement that it had sold €1.95 billion, or $2.6 billion, of 13-week Treasury bills. It said demand for the bills exceeded the supply on offer by 4.6 times, showing healthy demand.
Germany warns of 'Lehman' crisis if Greece defaults By Ambrose Evans-Pritchard - Telegraph.co.uk German finance minister Wolfgang Schauble has pleaded with his country's citizens to back a joint EU-IMF bail out for Greece worth up to €45bn (£40bn), warning that failure to act risks a financial meltdown. "We cannot allow the bankruptcy of a euro member state like Greece to turn into a second Lehman Brothers," he told Der Spiegel. "Greece's debts are all in euros, but it isn't clear who holds how much of those debts. The consequences of a national bankruptcy would be incalculable. Greece is just as systemically important as a major bank," he said. Mr Schauble said Berlin had scant room for manoeuvre over the bail-out given a likely court challenge by German professors but promised to "abide by the constitution".
Soros: Greece Faces 'Death Circle' of High Loan Rates MoneyNews.com Greece needs help to beat its crisis and there is a risk it will fall into a "death circle" of recession and falling budget revenue if its borrowing costs stay high, financier George Soros told Greek Skai TV on Monday. Athens hopes to begin talks with European and International Monetary Fund officials on Wednesday on a policy program that investors are increasingly convinced will lead the debt-ridden country to tap what would be the biggest bailout ever attempted. Soros said the spike in Greek bond spreads — the premium investors pay to buy Greek debt instead of equivalent German bonds which hit a euro lifetime high on Monday — was caused in part by market speculation.
Marc Faber on American oil companies
Is volcanic ash the new swine flu? By Gerald Warner - Telegraph.co.uk Is volcanic ash the new swine flu? That is not a rhetorical question: along with the rest of the public, I honestly haven't a clue. Are either self-interested or self-empowering jobsworths creating a panic where there is no threat? Or, spurred on by desperate airlines haemorrhaging income, would it be crassly irresponsible to allow families to embark on aircraft which might be downed by ash damaging their engines, with catastrophic consequences? We do not know. And the reason why we do not know is more important than the dilemma to fly or not to fly, more important even than the paralysis of international travel, the £500m already lost to the British economy and the plight of Britons stranded abroad. We do not know because we can no longer trust the sources from which we would normally expect to receive authoritative information. There is a complete breakdown in confidence between the public and the politico-scientific establishment.
Rahm wants to be mayor of Chicago WashingtonPost.com Rahm Emanuel's next (political) step From almost the moment he took the job as chief of staff to President Barack Obama, Rahm Emanuel has made clear that he wants to return to public office in the not-to-distant future. Emanuel, who left his Chicago-area congressional seat and his leadership position in the House to serve as Obama's chief adviser, went public with those intentions during an interview with PBS' Charlie Rose on Monday. "I hope Mayor Daley seeks re-election," Emanuel told Rose. "I will work and support him if he seeks reelection. But if Mayor Daley doesn't, one day I would like to run for mayor of the city of Chicago."
Rahm Emanuel: Media 'exacerbating' anger By ANDY BARR - Politico.com White House chief of staff Rahm Emanuel on Monday night said the media are partially responsible for the nasty rhetoric that is dominating political discourse. Emanuel said during an interview with PBS's Charlie Rose that "everybody's accountable … including the media" for the overheated language that was used during the health care debate and beyond. "They play a role in exacerbating the sense that America's pulled apart, and it's not as pulled apart as being reported," he said.
Pew poll: 4 out of 5 Americans don't trust Washington WASHINGTON (AP) - The 19th Century American statesman Henry Clay called government "the great trust." But most Americans today have little faith in their government's ability to deal with the nation's problems. For Americans, public confidence in government is at one of the lowest points in a half century, according to a survey from the Pew Research Center. Nearly 8 in 10 people in the country say they don't trust the federal government and have little faith it can solve America's ills, the survey found.
Professor Warren Debunks A Few Healthcare Myths
School Districts Warn of Even Deeper Teacher Cuts By TAMAR LEWIN and SAM DILLON - NYTimes.com School districts around the country, forced to resort to drastic money-saving measures, are warning hundreds of thousands of teachers that their jobs may be eliminated in June. The districts have no choice, they say, because their usual sources of revenue - state money and local property taxes - have been hit hard by the recession. In addition, federal stimulus money earmarked for education has been mostly used up this year. As a result, the 2010-11 school term is shaping up as one of the most austere in the last half century. In addition to teacher layoffs, districts are planning to close schools, cut programs, enlarge class sizes and shorten the school day, week or year to save money.
Envoy had business ties to Pelosi's hubby By Chuck Neubauer - WashingtonTimes.com Critics say speaker should have told of link House Speaker Nancy Pelosi, the most powerful woman in Congress, proudly sang the praises of her longtime friend and major Democratic donor Eleni Tsakopoulos-Kounalakis during the California real estate developer's confirmation hearing in November as U.S. ambassador to Hungary. "My husband and I are here as friends of the family and admirers of the Tsakopoulos-Kounalakis family," she told the Senate Foreign Relations Committee at the Nov. 18 hearing. "I salute her for her patriotism and for all that she will bring to this position."
Obama's jobless crisis By THE WASHINGTON TIMES The administration created the worst labor market since the Depression Forty-four percent of America's unemployed have been jobless for more than six months. That's the highest rate since the Great Depression. The previous high was 26 percent in June 1983. No matter what the White House says, an economic recovery has not arrived. On Friday, President Obama signed a new law to maintain unemployment insurance benefits for the chronically unemployed for up to 95 or 99 weeks. Eligibility for 99 weeks applies when a state's unemployment rate is more than 8.5 percent. That's almost two whole years, which represents a huge increase compared to the maximum 26 weeks that were available as recently as June 2008. For perspective, between 1954 and 2007, the national average maximum duration for unemployment insurance ranged from a low of 22.8 weeks in 1954 to a high of 27.2 weeks during most of the 1970s.
NACA's Bruce Marks: Quirky Populist Lights the Fuse of Homeowners' Rage By BRUCE WATSON - DailyFinance.com As Tea Party protests grabbed headlines last week, another angry group found itself fighting for attention. The Neighborhood Assistance Corporation of America (NACA) took its case to the Capitol, where some of its members disrupted a congressional committee hearing, surprised a bank executive, and dramatized the problems faced by many "underwater" homeowners.
U.S. Housing Program Fails to Stem Foreclosures By Lorraine Woellert April 20 (Bloomberg) -- The U.S. Treasury Department’s efforts to help troubled homeowners are ineffective, as foreclosures continue to rise and aid fails to reach all those who need it, a watchdog said. The Treasury’s Home Affordable Modification Program, or HAMP, “has made very little progress in stemming this onslaught,” with 230,000 mortgage loans permanently modified in a year, according to the report by Neil Barofsky, special inspector general for the Troubled Asset Relief Program.
Arizona Sheriff Says Cops Are Being Killed by Illegal Aliens; Joins Call for U.S. Troops at Border By Penny Starr, Senior Staff Writer (CNSNews.com) - Law enforcement officials from the Arizona counties hardest hit by illegal immigration say they want U.S. troops to help secure the border, to prevent the deaths of more officers at the hands of criminals who enter the country illegally. "We've had numerous officers that have been killed by illegal immigrants in Arizona," Pinal County Sheriff Paul Babeu said Monday at a Capitol Hill news conference. "And that shouldn't happen one time."
Iceland volcano could force BMW assembly lines here to grind to a halt BY RUDOLPH BELL - GreenviilleOnline.com A volcano in Iceland has slowed BMW's assembly line, and if its impact lingers, it could affect Upstate workers' pay checks The volcano's ash cloud that brought trans-Atlantic flights to a near standstill also has disrupted the supply chain at BMW Manufacturing Co. The automaker is days away from running out of parts, and some of its suppliers are in the same bind A work stoppage would shrink the incomes of thousands of Upstate families. BMW said cargo flights it was using to transport transmissions and other parts to its sole U.S. plant near Greer were among those grounded by the ash cloud.
Ten American cities caught in free fall By Francesca Levy - Forbes Economic indicators in these metros have gone from bad to worse Miami boasts a popular South Beach club scene, Art Deco Architecture, and perhaps the best Cuban food in the country. But residents don't have much else to celebrate. More than three years after the economy started its downward slide, the Miami metro area, like a handful of Sun Belt cities, still hasn't begun to recover. Median home prices in Miami have fallen 38 percent since its market peaked in the second quarter of 2007; the city's 11 percent unemployment rate is above the national average and has grown more than most of the 40 cities we surveyed.
Prof. Elizabeth Warren & Bill Maher The Usury States of America (UNDERSTANDING NWO ECONOMICS)
FDA plans to limit amount of salt allowed in processed foods for health reasons By Lyndsey Layton - Washington Post Staff Writer -- The Food and Drug Administration is planning an unprecedented effort to gradually reduce the salt consumed each day by Americans, saying that less sodium in everything from soup to nuts would prevent thousands of deaths from hypertension and heart disease. The initiative, to be launched this year, would eventually lead to the first legal limits on the amount of salt allowed in food products. The government intends to work with the food industry and health experts to reduce sodium gradually over a period of years to adjust the American palate to a less salty diet, according to FDA sources, who spoke on condition of anonymity because the initiative had not been formally announced.
Water company defends Anthem rate hike as 'just, reasonable' by Betty Reid - The Arizona Republic An attorney for the water company seeking an increase in water and sewer rates in Anthem defended the request Monday as "just and reasonable rates." Thomas H. Campbell appeared before Administrative Law Judge Teena Wolfe on Monday at the Arizona Corporation Commission hearing room at 1200 W. Washington St. The hearing was part of Arizona American Water's application to double the cost of sewer and water services to 8,300 Anthem residents who live in the unincorporated area of Maricopa County. The water company also serves Anthem's 250 commercial businesses. Anthem residential homes with ?-inch meters pay an average $85 a month for water and sewer. If Wolfe and the commission members approve the increases as is, those Anthem residents will pay $78 per month more for water and sewer.
Gov't regulators call on Google to respect users' privacy By Peter Sayer - computerworld.com IDG News Service - Ten government regulators responsible for protecting the private information of their countries' citizens have sent an open letter to Google calling on the company to respect national laws on privacy. The regulators say the letter is also intended for other companies offering services over the Internet, but the version published is addressed to Google CEO Eric Schmidt and takes particular issue with the roll out of the company's Buzz social networking service. Buzz came in for criticism for the way it revealed users' most-mailed contacts in a public feed, without warning them this would happen. Google later modified the service's behavior, but that wasn't enough to satisfy the privacy commissioners.
Google Discloses Government Demands for User Data By JESSICA E. VASCELLARO - WSJ.com Google Inc. moved to highlight the issue of government censorship and demands for information about Web users, just as the Internet company came under fire from a group of government officials over the way it handles user privacy. The Silicon Valley giant Tuesday disclosed for the first time the number of requests it has received from government agencies for data about its users. Google also disclosed how many government requests it gets to remove content from its search engine, YouTube video site, Blogger blogging software and other services.
Ten Countries Ask Google to Do More to Protect Privacy By JESSICA E. VASCELLARO - WSJ.com Privacy officials from 10 countries Monday sent Google Inc. a letter demanding that the Internet giant build more privacy protections into its services, the latest sign of increasingly international anxiety over Google's power. The letter, reviewed by the Wall Street Journal, was signed by officials in Canada, France, Germany, Ireland, Israel, Italy, the Netherlands, New Zealand, Spain and the United Kingdom. The signatories could not be reached for comment.
Tom Cole to Bill Clinton: Don't 'cheapen' Oklahoma City By ANDY BARR - Politico.com Rep. Tom Cole (R-Okla.) is warning former President Bill Clinton to not "cheapen" the memory of the Oklahoma City bombing by comparing the anti-government sentiment that fueled it to the anti-Washington anger that drives the tea party movement. In the lead-up to Monday's 15th anniversary of the bombing, Clinton frequently drew parallels between the two periods and warned that extreme rhetoric sometimes encourages violent action. Cole took exception to Clinton's comments in an e-mail to POLITICO and cautioned the former president against invoking the memory of the bombing to move the ball in political debate.
There Bill Clinton goes again By Tony Blankley - WashingtonTimes.com Beware the unforeseen consequences of charging sedition Former President Bill Clinton last week inadvertently demonstrated Karl Marx's shrewd observation, "History repeats itself, first as tragedy, second as farce." The historical event in question is the attempt to deter by smearing a broad-based, popular, American anti-high-tax, anti-big-central government movement as likely to induce seditious violence against the government. The historic example of this calumny was Alexander Hamilton's slander against Thomas Jefferson and James Madison's emerging Republican/Democratic Party. The first repetition, as tragedy, was Bill Clinton's attack on the Republican Contract With America rhetoric following the Oklahoma bombing in 1995 - which resulted in deflecting the upward progress of conservatism from the summer of 1995 onward.
The Violence Card Bill Clinton plays politics with Timothy McVeigh. Liberal Democrats and their friends in the media have tried just about everything to dismiss and discredit the tea-party movement. They've accused Americans who are anxious and angry about a rapidly encroaching government of being racists, extremists, birthers, pawns of a corporate "AstroTurf" effort—and, now, potential Timothy McVeighs. No less a figure than Bill Clinton seized on the occasion of the Oklahoma City bombing's 15th anniversary to lecture tea-party activists, first in a speech last week to the Center for American Progress Action Fund, then in a Monday New York Times op-ed. "Have at it, go fight, go do whatever you want," he said in the speech. "You don't have to be nice; you can be harsh. But you've got to be very careful not to advocate violence or cross the line." In the op-ed, he wrote: "There is a big difference between criticizing a policy or a politician and demonizing the government."
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Tues 04.20.2010
Get Ready, Inflation Is On The Way Giordano Bruno - SilverBearCafe.com In the professional financial world, the term "inflation" has many inferences, consequences, supposed benefits, and definitions. One Wall Street economist may have an entirely different interpretation of the word than another Wall Street economist working in the same building. This lack of a common orientation to the issue creates serious confusion for the everyday investor and the average American only looking for the fundamentals, so that they may better protect their livelihood. In fact, it is not unusual to see two financial analysts discussing inflation in the MSM, only to completely fumble over each other because they do not share a mutual idea of what it actually means.
Gold Hits All-Time Record High in Euros and Pounds By Rocky Vega - The DailyReckoning.com 04/19/10 Stockholm, Sweden – While the value of gold is still about five percent below its record high in dollars, it’s reached an all-time high in both euros and British pounds, at €865 and £754 respectively, partly due to the current weakness of those currencies relative to the US dollar. According to the Telegraph: “Gold is seen as a safe haven investment but, because it is priced in dollars, investors in countries other than America are exposed to currency risk. “For example, British gold investors saw the value of their holdings fall by 10pc in the six months to August 2009 as the pound recovered strongly against the dollar – even though gold in dollar terms appreciated by 2.2pc over the period.
Gold prices to soar on Goldman Sachs crisis By Geena Paul LONDON (Commodity Online): At a time when the paper gold scam was about to rock the bullion boat, like a godsend came the Goldman Sachs crisis which is all set to ensure that gold prices will gain out of it. After the market recovers from the initial shock, which has hit even equity markets because of the huge reach Goldman Sachs has in the global market, gold is all set to soar riding this crisis also. Gold traditionally loves to cash in on crises. When the world was under the grip of recession, gold made the maximum profit. Then came various problems which dogged the equity market across world.
This Gold Bullion Index Comes With a Twist by W. Lorimer Wilson - FinancialSense.com . . . . The Relationship Between the USD’s Strength/Weakness and the Price of Gold When the USD gets stronger, it takes fewer dollars to buy any commodity that is priced in $USD. When the USD gets weaker it takes more dollars to purchase the same commodity. The price of all USD denominated commodities, like gold, will change to reflect the fact that it will take fewer or more dollars to buy that commodity. As such, it’s almost always the case that a portion of the change in the price of gold is really just a reflection of a change in the value of the USD. Sometimes that portion is insignificant but often the opposite is true where the entire change in the gold price is simply a mathematical recalculation of an ever-changing USD value.
GOLD THOUGHTS by Ned W. Schmidt - FinancialSense.com One needs only read the story of Goldman Sachs’ creation of CDOs of dubious value to sell to one client while allowing another to short them to understand why Gold has existed as an investment down through the ages. We cannot think of one story of kings in times long past that accepted CDOs as payment for taxes. We now know why they usually demanded Gold, or other needed commodities. Actually, the buyers of this dubious paper should not be suing Goldman Sachs. They should be suing the universities from which they received their MBAs. The value of that education may be in question. How could educated investment professionals purchase for their clients paper assets of questionable value based simply on the advice of a firm’s traders and sales people?
Ron Paul: The SEC is a Total Failure and Part of the Problem
NIA:IMF SDRs are inflationary, buy silver-gold now Commodity Online The International Monetary Fund (IMF) has issued new Special Drawing Rights worth approximately $300 bn which shows that inflation is a major problem the worldover, according to National Inflation Association (NIA). Perhaps, this is the right time to buy gold and silver. NIA said that SDR's may not become the new world reserve currency. In a set of 10 questions and answers on precious metals, inflation and crude oil, it addresses key issues of interest to US and global investors.
Owning Gold and Silver: The Unsafe Method By The Mogambo Guru - DailyReckoning.com 04/19/10 Tampa, Florida – Thanks to Bill Murphy and the Gold Anti-Trust Action (GATA) committee, the slimy, market-manipulating goings-on in the short-selling of gold futures and silver futures to suppress their prices at the CFTC have pretty well been exposed, and about time, too. Tyler Durden at zerohedge.com calls it “one of the largest frauds in commodity markets history”, to which I can only add “I can’t think of one bigger!” although I admit that I am not up-to-speed on the history of frauds in the commodities markets, nor am I up-to-speed on anything, now that I mention it, which probably explains why I am such a failure, but which is another sad story for another time.
Gold – Investment demand poised to jump? by Julian D.W. Phillips - FinancialSense.com We were right in believing that the € and gold will and are de-coupling. But far more than that is happening in the gold markets of the world. But the process is an ebb and flow process, with this week seeing gold move with the € and last week moving independently of both. What is becoming clearer and clearer to investors is the gold price should not move with the € or with any other currency, as there are few common denominators between gold and currencies. The erosion of confidence in currencies is far more pertinent to the gold price. Along that line of thought a look over the last year and more is relevant to the future of gold.
Silver/Gold Ratio Reversion 3 Adam Hamilton - SilverBearCafe.com Silver's recent rallying action is starting to catch traders' attention. Since the end of its latest correction in early February, this white metal has surged 23% higher. It has well outperformed gold, which only climbed 9% over this same 9-week span. And based on silver's strong historical relationship with gold, odds are today's silver rally is only beginning. Silver's gains should accelerate in the months ahead.
Precious Metals Slow Motion Lottery Ticket by Captain Hook - FinanacialSense.com Is there a precious metals mania on deck directly ahead or will another deflation scare, which could curb demand for gold and silver, bail out the bureaucracy yet again. Indeed the bureaucracy seems to have nine lives in this regard, with gold and silver still trading at half their respective inflation adjusted values running all the way back to 1980. Of course there is a different way of viewing this, where the bureaucracy’s level of desperation to maintain the party atmosphere an unbridled fiat currency monetary system will sponsor can be measured by the London OTC Metals Exchange (LBMA) running paper promises to physical ratios at 100:1, which to a conservative mind is the definition of insanity. Because you see this means the entire economy is a ‘house of cards’, which is in fact the reality of the situation, a suicide mission courtesy of an emboldened bureaucracy riding high on gold’s back all these years.
There is good reason to question JP Morgan’s concentrated short position in COMEX silver futures, and to investigate the allegations that JPM used it to manipulate the silver market.
GATA has failed miserably in handling this matter, and has focused its attention on nonsensical and unproven conspiracy allegations pertaining to the London gold market (outside CFTC’s jurisdiction) when it has in hand very compelling evidence that is directly material to the still-pending CFTC investigation GATA should be the focus of their attention on the business at hand.
Jeffrey Christian’s testimony at the CFTC Hearing has been taken completely out of context.
Despite the best efforts of some responsible journalists including Jim Puplava, others including Tyler Durden (ZeroHedge) and Eric King (King World News) have contributed to the misinformation campaign by promulgating GATA’s baseless allegations. . . .
Roubini Discusses Fed Monetary Policy, U.S. Economy
The Policies of Insolvency By: Ty Andros - GoldSeek.com The global financial maelstrom continues to unfold as public serpents, central banks and crony capitalists continue to pour gas on the fires. It is set to continue. The collapse of FIAT paper wealth storage is unfolding with breathtaking speed. Asset bubbles continue to emerge in the emerging world and collapse in the developed world as capital FLEES. Today’s missive covers the deep insolvencies in the developed world and the definitions of solvency of Austrian Economics. The inflationary depression still lies in our futures. First let’s look at the definition of insolvency, courtesy of Jim Sinclair’s www.jsmineset.com: The Austrian School’s Seven Commandments: The Austrian free-market economists use common sense principles.
You cannot spend your way out of a recession.
You cannot regulate the economy into oblivion and expect it to function.
You cannot tax people and businesses to the point of near slavery and expect them to keep producing.
You cannot create an abundance of money out of thin air without making all that paper worthless.
The government cannot make up for rising unemployment by just hiring all the out of work people to be bureaucrats or send them unemployment checks forever.
You cannot live beyond your means indefinitely.
The economy must actually produce something others are willing to buy.
Yuan Gains May Help China Vault Past Japan to Be No. 2 Economy By Bloomberg News -- April 19 (Bloomberg) -- China’s anticipated move to let its currency appreciate may help the nation overtake Japan as the world’s second-largest economy, Australia and New Zealand Banking Group Ltd. said. A 5 percent revaluation against the dollar could see quarterly gross domestic product exceed Japan’s as soon as July- to-September this year, estimated Liu Li-Gang, a Hong Kong-based economist at ANZ. The Chinese economy is likely to vault past Japan by year’s end even if the yuan remains stable, Liu said in an e-mailed interview.
Germany warns of 'Lehman' crisis if Greece defaults By Ambrose Evans-Pritchard - Telegraph.co.uk German finance minister Wolfgang Schauble has pleaded with his country's citizens to back a joint EU-IMF bail out for Greece worth up to €45bn (£40bn), warning that failure to act risks a financial meltdown "We cannot allow the bankruptcy of a euro member state like Greece to turn into a second Lehman Brothers," he told Der Spiegel. "Greece's debts are all in euros, but it isn't clear who holds how much of those debts. The consequences of a national bankruptcy would be incalculable. Greece is just as systemically important as a major bank," he said.
German Windfall Profits From Exiting The Euro by Daniel R. Amerma - FinancialSense.com Germany is a nation that fears inflation for good historical reason, and among the nations of the world, Germany places a particularly high priority on price stability. Yet, so long as Germany remains in the European Economic and Monetary Union (EMU) with the euro as its currency, Germany may not be in control of German inflation. In particular, the current crisis with Greece, and the crises that may follow with other nations such as Portugal, Italy, Spain and Ireland may prove disastrous for German investors and taxpayers. For so long as it is in the EMU, Germany may have no effective choice but to bail out countries that have been running up huge deficits – despite Germany itself not having the economic capacity to do this for all of Europe on an indefinite basis, let alone the political will to do so. These are among the reasons why in a letter to clients late last week, Morgan Stanley warned that Germany may leave the euro and the EMU and that investors should be prepared for this event.
Another Trillion Dollar "Crisis," Courtesy of Barack Obama By John Lillpop - CapitolHillCoffeeHouse.com Eventually, the American people and the mainstream media are bound to wise up to Barack Obama’s bait and switch scheme of screaming “crisis” in order to waste trillions more of the U.S. treasury on failed liberal causes. Obama’s latest “wolf” cry involves his Marxist proposals for reform of the financial industry. In a nutshell, Obama wants to destroy private enterprise in the financial industry by replacing it with onerous government regulations and oversight. And why not?
Bond Crash to Drive Gold By Neil Charnock - GoldSeek.com The gold market has been heating up and conditions are moving into an alignment which is ideal for a gold price rally this year. Fear and uncertainty will drive the price northwards even if the current CTFC saga does not eventuate in immediate disciplinary action or regulatory change. The fact is that the lack of physical supply has been exposed and this will attract more investors to gold as rarity is again bought to the forefront for investors. If the issues raised at the enquiry are to be addressed we could see explosive short covering and gold price action. However this is a bonus I am not counting on at this stage.
John F. Kennedy vs The Federal Reserve Anthony Wayne - SilverBearCafe.com On June 4, 1963, a virtually unknown Presidential decree, Executive Order 11110, was signed with the authority to basically strip the Federal Reserve Bank of its power to loan money to the United States Federal Government at interest. With the stroke of a pen, President Kennedy declared that the privately owned Federal Reserve Bank would soon be out of business. The Christian Law Fellowship has exhaustively researched this matter through the Federal Register and Library of Congress. We can now safely conclude that this Executive Order has never been repealed, amended, or superceded by any subsequent Executive Order. In simple terms, it is still valid.
Greenspan Came Not to Save Consumers but to Bury Them Mises Daily: Monday, April 19, 2010 by Frederick J. Sheehan he attention Alan Greenspan devoted to consumer protection on April 7, 2010, was a strange diversion, which is what it was. The Financial Crisis Inquiry Commission had penetrated, to an uncomfortable degree, the shallow defenses Greenspan has dreamt up to justify his indefensible behavior. For instance, he offered a ridiculous response when asked if monetary policy was one failure during his tenure. Greenspan changed the subject, only — one suspects to Greenspan's surprise — to be asked the same question again. He again ran off on a tangent. Maybe even Greenspan understood the emperor who wore no clothes had been exposed.
Obama to head to New York to promote new Wall Street regs USAToday.com President Obama will promote new financial regulations Thursday near the belly of his beast: New York City. Obama speaks at the Cooper Union, about two miles from Wall Street, where traders will no doubt be paying careful attention to his remarks. Spokesman Robert Gibbs said the president will call for swift action by the Senate on new regs, "almost two years after the crisis hit and almost one year after the administration first laid out a detailed plan for holding Wall Street accountable and protecting consumers."
Obama and Democrats challenge GOP on Wall Street Jim Puzzanghera and Janet Hook - LATimes.com 'Whose side are you on?' Sen. Christopher Dodd says as Democrats try to frame the vote on financial rules as a choice between Wall Street and Main Street. Emboldened by the fraud allegations against giant Goldman Sachs & Co., the Obama administration and Senate Democrats will push for a showdown this week on their sweeping overhaul of financial regulations — a confrontation that echoes the epic battle over healthcare. President Obama is traveling to Manhattan on Thursday to deliver a major speech urging passage of the reforms, with the fate of the legislation likely to hinge on framing an issue that resonates with voters still dealing with the fallout from the deep recession.
Why America Hates Goldman Sachs By Eric Fry - DailyReckoning.com 04/19/10 Laguna Beach, California – If you shine a light on a cluster of cockroaches, they scatter and hide. But when you shine a light on a cluster of investment banking con men, they simply stare back and reply, “The SEC’s charges are completely unfounded in law and fact and we will vigorously contest them and defend the firm and its reputation.” As the entire investing world knows by now, Goldman Sachs is the latest cockroach to scuttle under the spotlight. Last Friday, the Securities and Exchange Commission accused Goldman of defrauding investors out of $1 billion.
Goldman Sachs Fraud Aftermath by Paul J. Nolte - FinancialSense.com WorldCom, Enron, Bear Stearns and Arthur Anderson – just but a few names that once lit up the Wall Street sky that are no more. While still way too early to declare it a has-been, the SEC suit against Goldman Sachs for fraud is now the poster child for all that is wrong on Wall Street and led to Friday’s 100+ point decline. The question investors focused upon in the aftermath of the revelations is this the next shoe to drop in the financial meltdown? For some, this is gasoline tossed on the smoldering fire of regulation proposed by Sen. Dodd last month, but will the ensuing fire burn investors anew? All the financial machinations cast a pall over what had been a decent start to earnings season, with over 70% of those reporting beat estimates for both earnings and revenue. The economic numbers reported remained uneven as unemployment claims remain high, however a modest increase in new home construction gave some hope for real estate. Goldman is likely to remain center stage for at least the next couple of weeks, stealing the show from earnings and the economy, as Greece did early in January. It remains to be seen if this develops into more than just a modest 5-7% correction.
Goldman can beat the SEC By David Weidner, MarketWatch If Goldman lost money, it will be tough to prove intent NEW YORK (MarketWatch) -- Let me begin by saying that in the way the Securities and Exchange Commission laid out the case, what Goldman Sachs Group Inc. did was troubling and not too far from morally reprehensible, unethical, slimy, devious and unjustifiable. Goldman, in packaging a collateralized debt obligation in which parts were hand-picked by the hedge fund Paulson & Co. and not disclosing that firm's role to long investors, apparently used the vagaries of derivative market rules to cater to a client who would bring in fees, not only on this deal, but on deals down the road.
Global Real Estate Looks Like the Next Bubble, Says WSJ's Greg Zuckerman by Peter Gorenstei - TechTicker -- From technology to housing to commodities, investors have been moving from one bubble to the next over the last 10 years. Rather than a passing fad, the trend is here to stay says Gregory Zuckerman, Wall Street Journal reporter and author of The Greatest Trade Ever – a book that chronicled Jim Paulson’s multi-billion dollar bet against the housing bubble. Paulson made his fortune betting against the pack but that's not how most professionals succeed, Zuckerman observes. "The incentive is not to be a contrarian on Wall Street," he says; instead, most traders, "chase the trade way too often."
Commercial Property Prices: The Downturn Continues SeekingAlpha.com The latest release of the Moody’s/REAL Commercial Property Index showed a notable decline of 2.6% since January, breaking a three month streak of rising prices and continuing to suggest that the nation’s commercial property markets are experiencing a tremendous downturn with prices down some 25.81% on a year-over-year basis and a stunning 41.66% since the peak set in October 2007.
Robert Shiller: A Double Dip for Housing and Stocks Ahead? Prieur du Plessis - SeekingAlpha.com This week on Wealthtrack, renowned Yale economist and “financial thought leader” Robert Shiller tells Consuelo Mack why he believes home prices could suffer a double dip and stock prices are not cheap. Shiller has several best-selling books to his credit. One of them, Irrational Exuberance, published in 2000 before the tech bubble burst, traced the stock market boom and its ever escalating trajectory. The second edition, in 2005 gave early warning of the emerging global real estate bubble and the long run consequences we are living with today. Shiller believes that human psychology drives the economy. A recent book, Animal Spirits, co-authored with Berkeley economist George Akerlof describes how and why.
BofA plan: No job? No house payment By Stella M. Hopkins - CharlotteObserver.com If OK'd by regulators, program could be banking industry's broadest effort to ease foreclosure pain for the jobless. Bank of America wants to give struggling mortgage customers who are collecting unemployment benefits up to nine months with no mortgage payment. That's right. Zero payment. Customers would have to agree that, if they haven't found a job within the nine months, they will sign over their house to the bank. The Charlotte bank would give them at least $2,000 to help with moving expenses. The proposal needs regulatory approval, and the bank doesn't know when, or if, that will happen.
The 'easy mortgage' era won't last By Bill Fleckenstein - MSN Money Along with easy money, the economy has gotten a boost from practices that let many homeowners stop paying their mortgages and use the 'extra' money elsewhere. The real-estate market will soon see banks take a much more aggressive approach to foreclosures. It will be interesting to see how the economy is affected as rates are ratcheted up in earnest. This story line, the focus of this week's column, draws its inception from the government's easy-money policies and the bank bailouts. To this point, the economy has gotten a substantial boost from homeowners who simply don't pay their mortgages and use the "extra" money for other things.
Jury has a question in KB Home options backdating case LATimes.com Jurors asked the judge for help last week during deliberations in the stock-options-backdating prosecution of former KB Home chief Bruce Karatz, according to documents released Monday. The panel asked the court for a definition of a "derivative action," which was referenced in a KB Home internal document that is evidence in the case. Shareholders filed derivative-action lawsuits against Karatz and several other KB executives in 2006, alleging that the backdating of employee stock options had diminished the value of the company's stock. The lawsuits were settled in 2008. After discussing the jury's question with prosecution and defense attorneys by e-mail, U.S. District Judge Otis D. Wright II sent the jury this response: "There is no testimony about a derivative action and you should not concern yourself with it."
How Deep Has Washington Reached Into Your Pockets? By Thomas D. Segel - CapitolHillCoffeeHouse.com As is the case with most retired military personnel, I have taken care of my future and made sure my family is financially protected. I continued to work after my military career and I have saved for that rainy day. I am certainly not in any category that could be considered wealthy. With that being said, that rainy day I saved for seems to be here. Still, I was interested in how all of these government-spending actions would personally impact my pocketbook. I went to the Fox News website and looked up the “Its All Your Money” national debt calculation program. Boy did I get a shock.
L.A. Spurns Build America Debt for $290 Million in School Bonds By Allison Bennett and Brendan A. McGrail April 19 (Bloomberg) -- The Los Angeles Unified School District, the second-largest U.S. school system after New York City, plans to sell $290.2 million in Qualified School Construction Bonds to tap a bigger federal subsidy than offered by the Build America program. The Los Angeles issue, scheduled for April 22, would be the second-largest use of the taxable school bonds since they were created last year, together with Build America Bonds, under President Barack Obama’s economic stimulus program. The school obligations are part of a $449.7 million sale that will be the second-largest in a week of $5.8 billion in municipal issuance, according to data compiled by Bloomberg.
Foreclosure Pipeline Is Full to Bursting Charles Hugh Smith - SeekingAlpha.com The foreclosure pipeline will be full for years to come. That precludes any "recovery" in housing valuations as supply will swamp demand. According to realtytrac.com, foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 932,234 properties in the first quarter, a 7 percent increase from the previous quarter and a 16 percent increase from the first quarter of 2009. Meanwhile, the heavily hyped Federal program to stave off defaults via massaging the terms of mortgages is failing spectacularly: Defaults Rise in Loan Modification Program.
Oil Rises From Three-Week Low on Forecast for U.S. Supply Drop By Gavin Evans and Yee Kai Pin -- April 20 (Bloomberg) -- Oil rose from a three-week low on speculation a report tomorrow will show crude stockpiles in the U.S., the world’s biggest energy consumer, declined for a second week and as rising equity prices buoyed investor sentiment. Oil inventories probably fell 600,000 barrels last week, a Bloomberg News survey showed. U.S. stocks yesterday reversed losses as Citigroup Inc. beat profit estimates and Bloomberg reported that the Securities and Exchange Commission was divided in its decision to sue Goldman Sachs Group Inc. Asian stocks rose today, led by finance companies.
Google battle over Internet censorship goes far beyond China By Jessica Guynn, Los Angeles Times At least 25 nations have blocked access to the search giant over the last several years. Google Inc.'s fight with China over Internet censorship made headlines around the world, but it has been engaged in similar battles around the globe. At least 25 countries, many of them with repressive regimes but even those with democracies, have at times blocked the public's access to Google over the last several years. All told, more than 40 countries actively censor the Internet, compared with a handful in 2004, which is when the OpenNet Initiative, a group of academics, began tracking global censorship. Censorship runs the gamut. Denmark bans child pornography. Iran has the most extensive filtering and surveillance system of any country, blocking access to all online content critical of the government. It stepped up its Internet crackdown and surveillance during the disputed presidential election last summer.
Tea Party Financiers Owe Their Fortune to Josef Stalin By Yasha Levine, AlterNet The Tea Party movement's dirty little secret is that its chief financial backers owe their family fortune to the granddaddy of all their hatred: Stalin's godless empire of the USSR. The secretive oil billionaires of the Koch family, the main supporters of the right-wing groups that orchestrated the Tea Party movement, would not have the means to bankroll their favorite causes had it not been for the pile of money the family made working for the Bolsheviks in the late 1920s and early 1930s, building refineries, training Communist engineers and laying down the foundation of Soviet oil infrastructure.
8 Banks Close in Calif., Fla., Mass., Mich., Wash. By THE ASSOCIATED PRESS - NYTimes.com WASHINGTON (AP) -- Regulators on Friday shut down eight banks -- three in Florida, two in California, and one each in Massachusetts, Michigan and Washington -- putting the number of U.S. bank failures this year at 50. The Federal Deposit Insurance Corp. took over the three Florida banks: Riverside National Bank in Fort Pierce, with $3.4 billion in assets; First Federal Bank of North Florida in Palatka, with $393.3 million in assets; and AmericanFirst Bank in Clermont, with assets of $90.5 million.
Obama: Fresh crisis without new financial rules By DARLENE SUPERVILLE - AP WASHINGTON (AP) - The U.S. is destined to endure a new economic crisis that sticks taxpayers with the bill unless Congress tightens oversight of the financial industry, President Barack Obama said Saturday. The overhaul is the next major piece of legislation that Obama wants to sign into law this year, but solid GOP opposition in the Senate is jeopardizing that goal. "Every day we don't act, the same system that led to bailouts remains in place, with the exact same loopholes and the exact same liabilities," Obama said in his weekly radio and Internet address. "And if we don't change what led to the crisis, we'll doom ourselves to repeat it.
Jobless claims rise for second straight week By JEANNINE AVERSA (AP) WASHINGTON — The number of newly laid off people signing up for unemployment benefits rose sharply for the second straight week, suggesting that jobs are still hard to come by even as the economic recovery gains traction. The Labor Department reported Thursday that first-time requests for jobless benefits rose by 24,000 last week to a seasonally adjusted 484,000, the highest level since late February. Economists had predicted claims would fall. It marked the second week that claims took an unexpected leap. In the prior week, claims rose by 18,000 to 460,000.
Unemployment rises in 24 states By Ben Rooney - CNNMoney.com NEW YORK (CNNMoney.com) -- Nearly half of all U.S. states reported rising unemployment rates in March, the government said Friday, with rates above the national average in 11 states and the District of Columbia. A total of 24 states suffered jobless rate increases in March, according to the Labor Department's monthly report. But rates declined last month in 17 states and the District of Columbia.
Rising Yuan Could Lift Commodities, Hit Treasurys By TOM LAURICELLA, ALEX FRANGOS and MARK GONGLOFF - WSJ.com -- When China allowed the yuan to rise in 2005, it startled investors and sent waves through the financial markets. This time around a revaluation is widely expected. So will a higher yuan turn out to be a big yawn? Not necessarily. Based on the experience of 2005, a rising yuan could boost other Asian currencies, lift commodity prices and hurt U.S. Treasurys. Domestic-focused Chinese stocks are also likely to rise. With China being an even bigger economic force throughout the global economy, sucking up commodities and dominating exports, the market effects could be bigger this time around.
Gold, silver lead investor interest in commodities CommodityOnline.com Late last week’s sharp decline in commodities prices may lead to increased buying interest this week. While a round of profit-taking had been expected to hit prices, especially if prices were not able to break above key resistance levels, prices sold off Friday for a reason that does not support such a downward move. Thus, prices may be expected to spring back this week, as investors reverse last Friday’s selling. Prices will have to hold above key support levels to attract investor fund, but that should not be a problem.
Gold Technical Pullback, China Demand, Euro PIIGS and Goldman Sachs Paulson Massive Positions By: Dian L Chu -MarketOracle.co.uk Gold fell the most in two months as the SEC’s action against Goldman Sachs (GS) spurred investors rushing out of riskier commodities and into perceived safer assets such as the U.S. dollar. Futures for June delivery slid 2% in one day to $1,136.90 an ounce. Paulson Linked to Goldman’s Case Goldman Sachs, the largest U.S. commodity broker, is charged with defrauding investors with a financial product tied to subprime mortgages by the Security Exchange Commission (SEC). In addition, hedge fund Paulson & Co. is also mentioned by the SEC, but not charged, in connection with the Goldman Sachs matter.
Jim Rogers : Gold will go higher
Gold Drops Most in Two Months as SEC Sues Goldman, Dollar Gains By Pham-Duy Nguyen -- April 16 (Bloomberg) -- Gold fell the most in two months after regulators accused Goldman Sachs Group Inc. of fraud, spurring investors to seek a haven in the dollar and eroding the precious metal’s appeal as an alternative asset. The dollar rose as much as 0.5 percent against a basket of six major currencies, including the euro. The Securities and Exchange Commission accused New York-based Goldman Sachs, the largest U.S. commodity broker, of defrauding investors with a financial product tied to subprime mortgages. Gold rose 24 percent last year as the dollar fell 4.2 percent.
Current monetary system and gold's parabolic rise By Hubert Moolman - CommodityOnline.com The death blow of a financial era that started in about 1971 appears to be in its final stages and seems to be waiting for a fierce run to gold, silver and certain other non monetary asset classes. The blow could be provided by the massive increase in the “paper prices” of gold, silver etc. over the next couple of years, which could lead to an end of confidence in fiat money and other debt based financial assets. The current monetary order will be exposed for the fraud that it is, and it will collapse just like the monetary orders before i.e. the gold exchange standard and the Bretton Woods standard.
Kitco Gold Index Identifies Influence of USD Strength vs. Demand for Gold on its Price By Lorimer Wilson - Ktico.com Up until now we have always questioned to what extent the price of gold was due to the U.S. dollar’s weakness or to gold’s secular strength but with the introduction of the Kitco Gold Index now we know - precisely - because it measures the price of gold, not in terms of U.S. dollars (USDs), but rather in terms of the same weighted basket of currencies that determine the US Dollar Index. How ingenious! By way of explanation below are further edited excerpts from Kitco's introductory article* on the subject:
Goldman warned of SEC suit 9 months ago By Alistair Barr, MarketWatch Investment bank could be exposed to a raft of private lawsuits SAN FRANCISCO (MarketWatch) -- Goldman Sachs Group Inc. was warned nine months ago that Securities and Exchange Commission staff wanted to bring a civil case against it, but the investment bank didn't specifically disclose this to investors in regulatory filings, Bloomberg News reported Saturday, citing unidentified people it credited with direct knowledge of the communications. Goldman Sachs responded to the so-called Wells notice from the SEC within months and met with agency officials in an effort to fend off the civil lawsuit, Bloomberg reported, citing its sources, who declined to be identified because the discussions weren't public.
So, Goldman Sachs, where are your friends now? Gentlemen of Goldman Sachs - is it time to pay back those bonuses? The investment bank memorably dubbed a "giant vampire squid" by one populist critic has suddenly found itself up on fraud charges - and there aren't too many sympathisers shedding tears. The accusations levelled at Goldman by the Securities and Exchange Commission today are extremely serious. They were sufficient to send the bank's stock tumbling by 12%, wiping $12bn off its market value. Before any court hearings even begin, the risk is that clients will simply opt to take their business to a less controversial institution. And Brits will not be amused that UK taxpayers took a hit on the affair through bailed out Royal Bank of Scotland.
The End of 'Government Sachs'? by Peter Gorenstein - TechTicker Fraud Charge Builds Momentum for Financial Reform, Ritholtz Says Timing is everything. With Washington putting renewed attention on regulation reform, the SEC's fraud charges against Goldman Sachs couldn't have come at a better time for supporters of the cause. "There is nothing in (the complaint) that would give comfort to people who are opposing more regulation on Wall Street," says Barry Ritholtz CEO of FusionIQ and author of Bailout Nation. The focus comes later than some would have wanted, but as Ritholtz says, "the momentum is clearly moving in the direction of more regulation."
Goldman Sachs prosecution threatens to open the floodgates on Wall Street Andrew Clark in New York - guardian.co.uk -- The US government's $1bn fraud prosecution of Goldman Sachs has spurred calls for a wholesale crackdown on the opaque world of derivatives trading, with pressure mounting on the White House to deliver reforms forcing greater transparency in highly complex financial products. President Barack Obama is engaged in a battle with Senate Republicans over an overhaul of financial regulation and has vowed to veto any bill that does not contain strong enough controls on derivatives. The US government will face demands this week to use its 27% stake in Citigroup as a lever to extract more public information about trading. Citigroup's annual meeting will be held on Tuesday, and a shareholder group has urged the US treasury to vote its shares in favour of a resolution requiring greater disclosure from the bank on its collateral policy and speculative activities.
SEC Investigating Other Soured Deals By CARRICK MOLLENKAMP, SERENA NG, SCOTT PATTERSON and GREGORY ZUCKERMAN - WSJ.com -- The Securities and Exchange Commission, after having hit Goldman Sachs Group Inc. with a civil fraud charge, is investigating whether other mortgage deals arranged by some of Wall Street's biggest firms may have crossed the line into misleading investors. The SEC's case against Goldman Friday has exposed an open secret on Wall Street: As the housing market began to wobble a few years back, some big financial firms designed products aimed at allowing key clients, such as hedge funds, to bet on a sharp housing downturn.
SEC Faces Challenges With Goldman Case By KARA SCANNELL - WSJ.com The Securities and Exchange Commission unearthed significant evidence against Goldman Sachs Group Inc. in its fraud case filed Friday, but the agency still faces challenges in persuading a jury should the case go to trial, lawyers not involved in the case said. The SEC's suit against Goldman is the agency's biggest assault on a Wall Street firm in a matter stemming from the credit crisis. A successful outcome for the SEC could go a long way in repairing its reputation, which was damaged by its failure to discover Bernard Madoff's Ponzi scheme and other shortcomings that emerged during the crisis.
Paulson Says It Had No Authority Over Goldman CDOs By Saijel Kishan April 16 (Bloomberg) -- Paulson & Co., the New York-based hedge-fund firm run by billionaire John Paulson, said it had no authority over the selection of assets linked to a Goldman Sachs Group Inc. mortgage security from whose decline it later profited. Goldman Sachs was sued today by U.S. regulators for fraud tied to collateralized debt obligations that contributed to the worst financial crisis since the Great Depression. The bank, based in New York, created and sold a CDO tied to subprime mortgages in early 2007 together with Paulson, who bet against some of the underlying securities, the SEC said.
U.S. charges Goldman with subprime fraud By Jonathan Stempel and Steve Eder - Reuters Goldman Sachs: Charges ‘unfounded’ and it will ‘defend the firm’ -- NEW YORK - Goldman Sachs Group was charged with fraud by the U.S. Securities and Exchange Commission over its marketing of a subprime mortgage product, igniting a battle between Wall Street's most powerful bank and the nation's top securities regulator. The civil lawsuit is the biggest crisis in years for a company that faced criticism over its pay and business practices after emerging from the global financial meltdown as Wall Street's most influential bank.
Black Says Goldman Sachs Suit to Give Rules Bill `Push'
Goldman Sachs charged with $1bn fraud over toxic sub-prime securities by Andrew Clark - guardian.co.uk -- Securities and exchange commission charges Goldman Sachs with conflict of interest in sub-prime mortgage asset sales The Wall Street bank Goldman Sachs, long considered a shrewd winner from the financial crisis, was slapped with potentially devastating fraud charges todayas US regulators accused the firm of fiddling investors out of more than $1bn (£640m) by wilfully mis-marketing toxic sub-prime mortgage-related securities. A 22-page lawsuit filed by the US securities and exchange commission (SEC) charged Goldman Sachs with working with a controversial US hedge fund, Paulson & Co, to structure and sell a complex package of mortgages to clients while Paulson took a "short" position betting that the very same mortgages would fail.
Goldman Sachs Clients-First Pledge Undercut by SEC By Christine Harper April 17 (Bloomberg) -- Goldman Sachs Group Inc.’s efforts to burnish its reputation just got a lot tougher. Chairman and Chief Executive Officer Lloyd Blankfein, 55, spent the last year defending the firm against criticism from politicians and pundits, who decried Goldman Sachs’s profit in the aftermath of the financial crisis and its sale of mortgage securities that went sour. Now the U.S. Securities and Exchange Commission is charging the company with fraud. On Goldman Sachs’s list of business principles, “clients’ interests always come first” ranks highest. The SEC paints a different picture. The firm failed to tell investors when selling them a so-called collateralized debt obligation tied to mortgages that the package had been designed to fail by hedge fund Paulson & Co., which profited from the losses, the agency alleged. Goldman Sachs said it will contest the case, calling it “completely unfounded in law and fact.” Shareholders weren’t comforted: The stock plunged the most in more than a year.
Rivals may not be smiling at Goldman Sachs’ predicament for long By Richard Fletcher - Telegraph.co.uk -- So how bad is it for Goldman Sachs? It certainly doesn’t look great. The allegations made by the Securities and Exchange Commission play to Wall Street conspiracy theories about the “vampire squid”. Sub-prime mortgages, toxic collateralised debt obligations (CDOs), billion dollar profits and – at the centre of it all – Goldman Sachs’ relationship with its lucrative hedge funds customers. It’s all there. The bank insists it will “vigorously contest” the “unfounded allegations”. Given our “love-hate relationship” with Goldman there was no doubt a number of bankers on both sides of the Atlantic who raised a wry smile at Goldman Sachs’ difficulties – even if it brought the week’s fragile stock market rally to a dramatic halt.
Goldman Sachs finds $5bn for pay and bonuses amid fraud investigation Ruth Sunderland - The Observe -- Goldman staff will benefit from almost half the investment bank's first-quarter revenues Goldman Sachs is expected to earmark about $5bn (£3bn) for staff pay and bonuses this week, days after being accused of securities fraud by the US regulators, fuelling the controversy over bankers' rewards in the teeth of the financial crisis. Chief executive Lloyd Blankfein is expected to unveil revenues of $11bn for the first quarter of this year on Tuesday, up from $9.4bn in the same period of 2009. About 47% of that will go into a "compensation pool" for bosses and employees.
Did Goldman Sachs caused both the 1929 and 2008 depressions? (1/2)
Did Goldman Sachs cause both the 1929 and 2008 depressions? (2/2)
Goldman attacked by UK premier By Francesco Guerrera in New York, Jean Eaglesham in London and Ralph Atkins in Frankfurt - FT -- Pressure on Goldman Sachs mounted on Sunday as UK prime minister Gordon Brown attacked the “moral bankruptcy” revealed by the Securities and Exchange Commission’s fraud charges , while the gulf between the bank and the regulator widened with revelations that the two sides never discussed a settlement. The lack of settlement talks in the nine months since the SEC formally told Goldman it wanted to press charges is unusual and underlines the hard line taken by both the authorities and the bank in this case.
The crisis is no American invention – the City was in it, up to its neck by Ruth Sunderland - The Observe -- Look at how many of the characters in the credit crunch were operating out of London The Securities and Exchange Commission's decision in the US to go for Goldman Sachs shows it is time for the UK authorities to get real. There could not be a more high-profile target than the Wall Street titan, which until now seemed to be emerging from the crisis with its reputation and finances relatively intact – so much so that the Financial Times named its chief executive, Lloyd Blankfein, as its Man of the Year, for his diligence in carrying out what he – apparently jokingly – described as "God's work".
Gordon Brown and Angela Merkel attack Goldman Sachs Andrew Clark in New York - guardian.co.uk, Bank under pressure amid claims it misled clients as PM calls for investigation and threatens bonus ban A crisis gripping Goldman Sachs deepened today as Britain and Germany moved towards joining the US in pursuing a fraud investigation against the Wall Street bank for allegedly fiddling clients out of $1bn ($650m) through a misleading mortgage investment deal. Gordon Brown ordered a special investigation into Goldman, accusing the bank of "moral bankruptcy". He threatened to block multimillion-pound bonus payouts if the firm is found guilty of wrongdoing.
SEC Charges Goldman Sachs With Fraud Costing Investors $1 Billion By MATTHEW JAFFE, DAN ARNALL and ZUNAIRA ZAKI - ABCNews.com Goldman Veep Joked About Not 'Necessarily Understanding' the Implications of His Deals -- Federal regulators today charged investment bank Goldman Sachs with fraud over the sale of risky subprime mortgage securities that were secretly designed to fail, costing investors $1 billion. In a civil suit filed Friday, the Securities and Exchange Commission alleged that Goldman Sachs didn't tell investors that a massive hedge fund -- Paulson & Co. -- had hand-picked the subprime mortgages that went into the securities in question, all with an eye toward picking those most likely to go bust. The securities were then bundled up and sold to investors, who were told the mortgages had been picked by an independent third party.
No prospect of any more German rescues as Portugal hits a brick wall By Ambrose Evans-Pritchard - Telegraph.co.uk -- Portugal, not Greece, poses the greater existential threat to Europe's monetary union. The long-drawn saga in Athens can perhaps be deemed a case apart. Greece lied. Its budget deficit was egregious at 16pc of GDP last year on a cash basis. It wasted its EMU windfall, the final chance to bring public debt back from the brink of a compound spiral. You cannot blame the euro for this, although EMU undoubtedly created a risk-free illusion that lured both Athens and creditors deeper into the trap – and now prevents a solution. Nor would an orderly default under IMF guidance along Uruguayan lines necessarily imperil Europe's banks. The Bundesbank hints that letting Greece go would prove a healthier outcome for EMU in the long run, upholding discipline.
China urged to introduce ‘junk’ debt By Jamil Anderlini in Beijing and Henny Sender in New York - FT -- China should introduce “junk” bonds to provide smaller private companies with new funding channels as the country develops its debt capital market, a senior Chinese financial official has suggested. “It may be a little bit radical, but I think we should promote junk bonds in China,” Guo Shuqing, chairman of state-controlled China Construction Bank, the country’s second-largest lender, told the Financial Times. “But we would probably use a more appropriate name, like ‘innovative’ bonds or ‘high-yielding’ bonds.”
Greek bail-out teams face hard balancing act By Kerin Hope in Athens and Alan Beattie in Washington - FT -- European Union and International Monetary Fund officials were due to hold a tele-conference on Monday on the terms of a emergency bail-out package for Greece after their flights to Athens were cancelled because of the volcanic ash cloud. The EU-IMF negotiations are seen as urgent because of a sharp rise last week in the premium paid by Greece to finance its debt on the international capital markets.
Greece’s bail-out only delays the inevitable By Wolfgang Münchau FT.com The European Union finally agrees a bail-out, and the much-predicted rally of Greek bonds turns into a rout. A week later, spreads on Greek bonds had reached their highest levels since the outbreak of the crisis. The financial markets have recognised that, bail-out or no bail-out, Greece is in effect broke. The bail-out prevents a default this year, but makes no difference whatsoever to the likelihood of a subsequent default. Just do the maths: Greece has a debt-to-gross domestic product ratio of 125 per cent. Greece needs to raise around €50bn ($68bn, £44bn) in finance for each of the next five years to roll over existing debt and pay interest. That adds up to approximately €250bn, or about 100 per cent of Greek annual GDP.
US Treasury chief hardens stance on derivatives By Tom Braithwaite in Washington - FT.com Tim Geithner, US Treasury secretary, stiffened his call for derivatives reform on Sunday as lawmakers and officials used allegations that Goldman Sachs committed fraud in marketing complicated financial instruments to push for more transparency. With a financial regulation bill due to be considered by the Senate within days, Mr Geithner and others expressed confidence that Republicans would vote in favour of the legislation, whose final derivatives language may be tougher after the Goldman charges from the Securities and Exchange Commission.
U.S. loan modification program wasting billions BY KIMBERLY MILLER - PALM BEACH POST More than 10,000 South Florida homeowners have received permanent reductions in their mortgage payments under the Obama administration's foreclosure rescue program. But even as the Treasury Department released the updated March figures this week, a congressional oversight group panned the $50 billion plan, saying it's not keeping up with the pace of the housing crisis and that so called "permanent" modifications, which are really only good for five years, are just delaying the inevitable -- more mortgage defaults.
Press TV-On the edge with Max Keiser -04-16-2010
Financial Reform Bill Will Devastate U.S. Economy, and Goldman Sachs CDO's Squared By: John Mauldin - MarketOracle.co.uk -- When you draft a 1,300-page "financial reform" bill, various special interests get language tucked into the bill to help their agendas. However, the unintended consequences can be devastating. And the financial reform bill has more than a few such items. Today, we look briefly at a few innocent paragraphs that could simply kill the job-creation engine of the US. I know that a few Congressmen and even more staffers read my letter, so I hope that someone can fix this. The Wall Street Journal today noted that the bill, while flawed, keeps getting better with each revision. Let's hope that's the case here.
WaMu crisis fuelled by raging turf war By Stephanie Kirchgaessner in Washington - FT.com Ben Bernanke, chairman of the federal reserve of the United States...and babysitter? In the final weeks leading up to the collapse of Washington Mutual, Mr Bernanke was not only facing the prospect of a cratering US economy. He was also dealing with another headache: two bickering federal banking regulators who were at odds over how to cope with a thrift that was teetering on the edge of a cliff.
Gereld Celente Russia Today interview 16 Apr 2010
FedEx, Teamsters Battle Over Bill By JOSH MITCHELL WASHINGTON—FedEx Corp. and the Teamsters union are battling over whether wide-ranging aviation legislation will contain provisions to make it easier for unions to organize airline employees and harder for carriers to cut costs by allying with rivals or outsourcing maintenance. A House version of the bill to fund the Federal Aviation Administration—a three-year, $54 billion package passed last year—contains several pro-union provisions. A two-year, $35 billion Senate version doesn't. Lawmakers from both chambers are set to negotiate a final version within the next few weeks.
China Lends Venezuela $20 Billion, Secures Oil Supply By Daniel Cancel April 19 (Bloomberg) -- China will lend Venezuela $20 billion and form a joint venture with a state company to pump crude oil from an Orinoco Belt block, President Hugo Chavez said as he promised to meet the Asian country’s energy needs. The financing from China is separate from a $12 billion bilateral investment fund, Chavez said, and will pay for Venezuelan development projects. Venezuela currently sends China 460,000 barrels a day of crude oil. The oil is used to repay the Asian country for $8 billion Venezuela used from the fund for infrastructure projects.
China Gives Venezuela $20 Billion By DAN MOLINSKI CARACAS—China will provide $20 billion in fresh funding to Venezuela, the latest sign of the Asian giant's expanding economic and financial role in Latin America. Venezuelan President Hugo Chavez said that the funds will be used for highway-building and other projects, and that in return for the money, his oil-rich country will continue to offer China the petroleum it needs. China's state-run Xinhua news agency said the $20 billion was in "soft loans" for Venezuela's energy sector and would be provided by state-owned China Development Bank.
Tax credit ups risk of audit By STEPHEN OHLEMACHER, Associated Press Examinations mean delays in getting refund checks WASHINGTON -- Here's a good way to get audited by the Internal Revenue Service this year: claim the first-time home buyer tax credit. About a fifth of all IRS examinations done by mail in the past six months were for people claiming the credit, National Taxpayer Advocate Nina E. Olson told a congressional committee Thursday -- the filing deadline for individual tax returns. The audits mean big delays in getting refunds -- as much as five months -- just as Congress and the Obama administration hope that tax refunds will spur economic growth and the home buyer tax credit will improve the housing market.
Main Street left out of recovery By Catherine Clifford - CNNMoney.com NEW YORK (CNNMoney.com) -- The economy may be showing halting signs of recovery, but the turnaround hasn't reached Main Street yet: A pair of recent small business surveys found that most owners are skeptical or downright gloomy about their business prospects this year. "Something isn't sitting well with small business owners," Bill Dunkelberg, chief economist of the National Federation of Independent Business, said in a written statement accompanying the latest edition of his organization's monthly "Small Business Optimism" report. "Poor sales and uncertainty continue to overwhelm any other good news about the economy."
Skip the mortgage, pay the credit card By David Ellis NEW YORK (CNNMoney.com) -- Millions of Americans are not only upside down on their mortgage, they also appear to be shunning that monthly payment in favor of meeting their everyday expenses. In the state of California, for example, more than 10% of credit card-carrying consumers were choosing to pay that bill rather than their mortgage as of last fall, according to a recent study published by the credit reporting agency TransUnion.
Arizona Clears Strict Immigration Bill MIRIAM JORDAN - WSJ via InfoWars.com Arizona lawmakers on Tuesday passed one of the toughest pieces of immigration-enforcement legislation in the country, which would make it a violation of state law to be in the U.S. without proper documentation. It would also grant police the power to stop and verify the immigration status of anyone they suspect of being illegal. The bill could still face a veto from Arizona Gov. Jan Brewer. A spokesman for Ms. Brewer said she has not publicly commented on the bill. Ms. Brewer, a Republican, has argued for stringent immigration laws.
Tough immigration bill OK'd by Arizona House by Mary Jo Pitzl and Daniel Gonzalez - The Arizona Republic -- The Arizona House of Representatives on Tuesday passed a wide-ranging bill that, if signed by Gov. Jan Brewer, would cement the state's reputation as the leader in tough and controversial immigration-control measures. Senate Bill 1070 would, among other things, make it a state crime to be in the country illegally and bar what its proponents call "sanctuary city" policies. The bill passed on a party-line vote.
Welcome to Arizona, Home of Papers Please!
Clinton Says He Got Wrong Advice on Derivatives By Joshua Zumbrun April 18 (Bloomberg) -- Former President Bill Clinton said his Treasury Secretaries Robert Rubin and Lawrence Summers were wrong in the advice they gave him about regulating derivatives when he was in office. “I think they were wrong and I think I was wrong to take” their advice, Clinton said on ABC’s “This Week” program. Their argument was that derivatives didn’t need transparency because they were “expensive and sophisticated and only a handful of people will buy them and they don’t need any extra protection,” Clinton said. “The flaw in that argument was that first of all, sometimes people with a lot of money make stupid decisions and make it without transparency.”
Bill Clinton Takes on Conservatives Former president says heated words of right wingers could foster violence.
'This Week' Transcript: Former President Bill Clinton ABC News TAPPER: You've made some news over this weekend. You gave a speech on Friday talking about -- on the 15th anniversary of the Oklahoma City bombing which is coming up. How public officials have a responsibility to be careful with their words. This prompted a response from -- from Rush Limbaugh Rush Limbaugh: "With this comment you have just set the stage for violence in this country. Any future acts of violence are on your shoulders, Mr. Clinton." TAPPER: Do you have any response? CLINTON: Doesn't make any sense. The only point I tried to make is that when I went back and started preparing for the 15th anniversary of Oklahoma City, I realized that there were a lot of parallels between the early '90s and now, both in the feeling of economic dislocation, and the level of uncertainty people felt. The rise of kind of identity politics. The rise of the militia movements and the right wing talk radio with a lot of what's going on in the blogosphere now.
Interview with Bill Clinton (Part 1) Former President Bill Clinton sits down with ABC's Jake Tapper on "This Week."
Russia must have role in Europe-based missile defence system, says Nato chief by Richard Norton-Taylor - guardian.co.uk -- Anders Rasmussen calls for Russian involvement in missile defence project Russia must play a central role in plans for a missile defence system in Europe, Nato's top official will tell a meeting of alliance foreign ministers this week. Nato secretary general Anders Rasmussen believes that bringing Russia into the plans will help to allay its concerns about the project and contribute to further arms control measures, alliance officials say. "Russia should be included in a missile defence system which covers Europe, the secretary general believes, " Nato spokesman James Appathurai said during a visit to London. He said plans for a "new security architecture" should be "one roof which includes the Russians [who should be] part of the same security family".
BRIC must create a new world order: Lula The BRIC group of the world's four biggest emerging powers has a fundamental role in creating a new world order, Brazil's President Luiz Inacio Lula da Silva said on Thursday. Lula was speaking at the end of a summit in Brasilia with the leaders of China, India and Russia. The countries reiterated their call for developing nations to have a bigger role in global economic and financial decision-making.
Clinton fears ‘regional conflict’ without Iran accord By Daniel Dombey in Washington - FT.com Hillary Clinton, US secretary of state, has warned of the risk of regional conflict if new United Nations sanctions are not imposed on Tehran’s nuclear programme, telling the Financial Times that “ignoring the threat posed by Iran will put the world in a more precarious position within six months to a year”. Senior Pentagon officials last week said Iran could develop enough fissile material for a bomb within a year, although it would probably take three to five years for Tehran to develop a serviceable weapon.
Gates clarifies Iran nuclear memo WASHINGTON (AP) — Defense Secretary Robert Gates is disputing the characterization of a memo he wrote in January suggesting the U.S. needed to advance a long-term plan for dealing with Iran's nuclear program. Gates said Sunday allies and foes should have no doubt the U.S. is prepared to act "across a broad range of contingencies" in support of its interests with Iran. He said the memo identified steps to be taken in defense planning after Washington decided to increase pressure against Iran's nuclear ambitions.
U.S. military plans against Iran being updated By Barbara Starr, CNN Washington (CNN) -- The Pentagon and U.S. Central Command are updating military plans to strike Iran's nuclear sites, preparing up-to-date options for the president in the event he decides to take such action, an Obama administration official told CNN Sunday. The effort has been underway for several weeks and comes as there is growing concern across the administration's national security team that the president needs fresh options ready for his approval if he were to decide on a military strike, according to the official who is familiar with the effort.
US strike could delay Iran nuclear program Source: Reuters NEW YORK, April 18 (Reuters) - The nation's top military officer said on Sunday that a U.S. strike against Iran would go "a long way" to delaying its nuclear program but that he considered doing so his "last option" right now. "Military options would go a long way to delaying it," Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, told reporters after speaking at a forum at Columbia University in New York.
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Fri 04.16.2010
Not exactly a constitutional republic anymore, . . . is it? What are we NOW and where are we going?
Government Stimulus: The Multi-Trillion-Dollar Free Lunch By Joel Bowman - The DailyReckoning.com 04/15/10 Taipei, Taiwan – Milton Friedman got it wrong; there IS such a thing as a “free lunch.” Just ask any mainstream economist. These folks relish the opportunity to beguile anyone – whether or not they are possessed of the time and inclination to listen – with a litany of magic public programs, all designed to serve up the gratis grub. The unspoken dilemma, alas, is that “free” lunches are usually so expensive that neither nation nor individual can ever reasonably hope to afford them. Invariably, as those in the European welfare utopia are lately discovering, “free” lunches often end up costing unsuspecting diners their breakfast and dinner money, too…just as the free-market economist had warned. Deficit spending…market meddling…price controls…subsidies…bailouts and boondoggles of every stripe… You name it; the teleconomist has an ill-conceived sermon for credulous acolytes everywhere. Let’s start at the end of the beginning of the end…
***** Excellent! *****
The LONG TREND by Warren Edward Pollock excerpt:. . . . Markets must be paid for with empire. Capital resides in the life support needed to make the poor rich through compressive anticipatory design science. Freedom depends not on details but instead on the integrity of having overview. I forecast that we are in a breakdown collapse of empire, not a depression. We must work to reverse the myopic and dated concept of Malthusian shortage through integrity and comprehensive anticipatory design science. Shortly we must either act or face the consequence of societal embezzlement, a dark age.
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Income Tax vs. Consumption Tax
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Now, let's look at Health Care Reform legislation:
H.R. 3590:House version passed as an 'amendment' to a 1986 IRS bill on 12.24.2009:
Entitled ‘‘An Act to amend the Internal Revenue Code of 1986 to modify the first-time homebuyers credit in the case of members of the Armed Forces and certain other Federal employees, and for other purposes.’’
SHORTTITLE — This Act may be cited as the ‘‘Patient Protection and Affordable Care Act’’.
Health Care Reform Publications Sunday, 21 March 2010 07:25 Summary of Health Care Reform Legislation (notice the 'Obama campaign-like' logo and the words in the banner's background - socialist slogans and rhetoric) PREPARED BY THE HOUSE COMMITTEES ON WAYS AND MEANS, ENERGY AND COMMERCE, AND EDUCATION AND LABOR MARCH 23, 2010
Are seeing ONLY what the government wants us to see? Maybe it's time to look a little closer
Judge Andrew Napolitano Health-Care Reform Will Set Up "Ready Reserve" Health Corps Doctors and health care workers will training with the military and they will have power of the military. Tuition and student stipends paid by government and 2 years service is required for every one year of training.
Obama's Civilian Army is now LAW and is Funded
H.R.3590 - Became Public Law No: 111-148 Title: Patient Protection and Affordable Care Act Sponsor: Rep Rangel, Charles B. [NY-15] (introduced 9/17/2009) Cosponsors (40)
Rep Becerra, Xavier [CA-31] - 9/17/2009
Rep Berkley, Shelley [NV-1] - 9/17/2009
Rep Blumenauer, Earl [OR-3] - 9/17/2009
Rep Brown-Waite, Ginny [FL-5] - 9/17/2009
Rep Courtney, Joe [CT-2] - 10/6/2009
Rep Crowley, Joseph [NY-7] - 9/17/2009
Rep Davis, Artur [AL-7] - 9/17/2009
Rep Davis, Danny K. [IL-7] - 9/17/2009
Rep Doggett, Lloyd [TX-25] - 9/17/2009
Rep Etheridge, Bob [NC-2] - 9/17/2009
Rep Filner, Bob [CA-51] - 10/6/2009
Rep Green, Al [TX-9] - 10/6/2009
Rep Gutierrez, Luis V. [IL-4] - 10/6/2009
Rep Higgins, Brian [NY-27] - 9/17/2009
Rep Johnson, Henry C. "Hank," Jr. [GA-4] - 10/6/2009
Rep Jones, Walter B., Jr. [NC-3] - 9/17/2009
Rep Kagen, Steve [WI-8] - 9/17/2009
Rep Kind, Ron [WI-3] - 9/17/2009
Rep Larson, John B. [CT-1] - 9/17/2009
Rep Levin, Sander M. [MI-12] - 9/17/2009
Rep Lewis, John [GA-5] - 9/17/2009
Rep McDermott, Jim [WA-7] - 9/17/2009
Rep McGovern, James P. [MA-3] - 10/6/2009
Rep Meek, Kendrick B. [FL-17] - 9/17/2009
Rep Minnick, Walter [ID-1] - 10/7/2009
Rep Moore, Dennis [KS-3] - 10/6/2009
Rep Neal, Richard E. [MA-2] - 9/17/2009
Rep Pascrell, Bill, Jr. [NJ-8] - 9/17/2009
Rep Peters, Gary C. [MI-9] - 10/6/2009
Rep Platts, Todd Russell [PA-19] - 10/6/2009
Rep Pomeroy, Earl [ND] - 9/17/2009
Rep Sanchez, Linda T. [CA-39] - 9/17/2009
Rep Schwartz, Allyson Y. [PA-13] - 9/17/2009
Rep Skelton, Ike [MO-4] - 9/17/2009
Rep Stark, Fortney Pete [CA-13] - 9/17/2009
Rep Tanner, John S. [TN-8] - 9/17/2009
Rep Thompson, Mike [CA-1] - 9/17/2009
Rep Titus, Dina [NV-3] - 10/6/2009
Rep Van Hollen, Chris [MD-8] - 9/17/2009
Rep Yarmuth, John A. [KY-3] - 9/17/2009
Related Bills: H.CON.RES.254, H.RES.1203, H.R.3780, H.R.4872, S.1728, S.1790
Judge Andrew Napolitano on Obama Corps Just what are National Security Issues?
Obama Just Got His Private Army Remember when Obama said he wanted a "national security force?" Not the national guard, but a civilian force that has not sworn to uphold the Constitution but trains with the military. July 2, 2008 in a speech in Colorado Springs:
Remember that first alarming glimpse of what that army might look like? Notice how much these "Hitler youth" type young men talk about health care! . . . chanting "Alpha-Omega" as if Obama was a god.
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Bits & Pieces from H.R. 3590. . . .
Subtitle C-Increasing the Supply of the Health Care Workforce Sec. 5201. Federally supported student loan funds. Sec. 5202. Nursing student loan program. Sec. 5203. Health care workforce loan repayment programs. Sec. 5204. Public health workforce recruitment and retention programs. Sec. 5205. Allied health workforce recruitment and retention programs. Sec. 5206. Grants for State and local programs. Sec. 5207. Funding for National Health Service Corps. Sec. 5208. Nurse-managed health clinics. Sec. 5209. Elimination of cap on commissioned corps. Sec. 5210. Establishing a Ready Reserve Corps.
SEC. 5209. ELIMINATION OF CAP ON COMMISSIONED CORPS. Section 202 of the Department of Health and Human Services Appropriations Act, 1993 (Public Law 102-394) is amended by striking ''not to exceed 2,800''.
Lifts the cap of 2,800 on how many commissioned corpsmen can be recruited to implement the law . . . . government now says 6,600, but there is NO LIMIT as to how many can be recruited or conscripted into commission of national service.
The mission of the U.S. Public Health Service Commissioned Corps is to protect, promote, and advance the health and safety of our Nation. As America's uniformed service of public health professionals, the Commissioned Corps achieves its mission through:
Rapid and effective response to public health needs
Leadership and excellence in public health practices
Looks like the state may be "taking care of grandma and grandpa plus anyone with a major disability at taxpayer expense which will pay for the ElderCare (i.e. could include 'humane' warehousing of the old, the infirm, and maybe a future program for euthanasia (extermination) of the useless eaters in society under the guise of "mercy killing" together with possible physician assisted suicide):
Sec. 2405. Funding to expand State Aging and Disability Resource Centers. Sec. 2406. Sense of the Senate regarding long-term care. Sec. 3306. Funding outreach and assistance for low-income programs.
''(e) ELITE FEDERAL DISASTER TEAMS.-The Surgeon General, in consultation with the Secretary, the Director of the Centers for Disease Control and Prevention, and other appropriate military and Federal government agencies, shall develop criteria for the appointment of highly qualified Track faculty, medical, dental, physician assistant, pharmacy, behavioral and mental health, public health, and nursing students, and graduates to elite Federal disaster preparedness teams to train and to respond to public health emergencies, natural disasters, bioterrorism events, and other emergencies.
Sean Hannity: This Is Socialism
more entitlements at taxpayer expense. . .
CLASS act in health bill really isn't By SALLY C. PIPES Pacific Research Institute president and CEO Just before the curtain closed on 2009, the U.S. Senate voted to proceed with landmark health care legislation. The bill had appeared to be at a dead end, until Senate leaders assuaged moderates' concerns about cost by dropping both the "public option" and the proposed "Medicare buy-in" for people between the ages of 55 and 65. But if they were really concerned about the cost of the bill, the moderate holdouts should've requested that a third expensive provision - the so-called CLASS Act - also be dropped. The CLASS Act - an acronym for the Community Living Assistance Services and Supports Act - would establish a national long-term care insurance program. Proponents claim that it would help seniors and the disabled pay for things like an in-home caretaker or adult day services - all while purportedly lowering the federal budget deficit. But it takes some creative math to come up with those cost savings. In reality, the CLASS Act would create a massive new entitlement that would rapidly become a liability for taxpayers. America can ill-afford to add yet another money sink to its balance sheet. The CLASS program is designed to be self-financed by monthly premiums deducted from workers' paychecks. Participants in the program would be eligible for cash benefits of $50 to $100 per day if they became disabled - but only if they had paid premiums for at least five years.
Don't Be Fooled: Republicans Love Government Enforced Healthcare Kurt Nimmo Infowars.com -- Forget all the self-serving diatribes by Republicans about Obamacare. They are for government enforced health care. "Republicans were for President Barack Obama's requirement that Americans get health insurance before they were against it," the Associated Press reports this morning. Republicans trumpeted the "obligation" (at gunpoint) that Americans buy health care insurance from large monopolistic corporations for decades, long before Hill and Bill attempted to foist their version on the plebs.
Judge Andrew Napolitano Says Court Will Strike Down Obamacare
Health Care Reform Publications Sunday, 21 March 2010 07:25 On March 21, 2010, the House of Representatives took an up or down vote to improve the lives of tens of millions of American families and small businesses owners. This final health care legislation will ensure that all Americans have access to quality, affordable health care and significantly reduce long-term health care costs. Below are a number of documents that explain how the new legislation will affect you.
We ask . . . . why is this Health Care Reform legislation being 'explained' and 'promoted' by the Committee On Energy And Commerce?
Obamacare: Hidden Goodies
Overlooked Section of Health Care Law? Reform creates 'ready reserve corps' of emergency medical professionals
The health care reform bills: what employers should know now Jenner & Block - lexology.com William L. Scogland, Matthew J. Renaud, Julie A. Wenell and Gregory M. Wu
Fact Sheet: The Truth About the Health Care Bill By: Jane Hamsher Friday March 19, 2010 The Firedoglake health care team has been covering the debate in congress since it began last year. The health care bill will come up for a vote in the House on Sunday, and as Nancy Pelosi works to wrangle votes, we’ve been running a detailed whip count on where every member of Congress stands, updated throughout the day. We’ve also taken a detailed look at the bill, and have come up with 18 often stated myths about this health care reform bill. Real health care reform is the thing we’ve fought for from the start. It is desperately needed. But this bill falls short on many levels, and hurts many people more than it helps.
Hospitals, Temples of the Occult Eustace Mullins, Global Sciences Congress, August 1993
Ron Paul: Bill Makes Health-Care System Worse
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Europe Fiddles, Gold Sizzles By: John Browne - GoldSeek.com Much to the relief of jittery global markets, Greece's chronic debt problem has been papered over in a burst of European solidarity and apparent magnanimity. But this act of mercy may cost Germany its key position of financial dominance over the European Central Bank (ECB), which, in turn, could be detrimental to the long-term health of the euro. And so even though the euro stiffened once the immediate default fears abated, the price of gold was pushed to a new all-time high in euro terms (and a five-month high in dollar terms).
The Comex and The Fractional Bullion System The Golden Truth blog Everyone knows the concept behind a "fractional" banking system, right? You have $1 in deposits and you lend out $10. The Romans invented the concept and it is widely understood to have been one of the ingredients that led to Rome's demise. As per the electrifying CFTC hearings on March 26, and a fact that GATA has long understood, the Big Banks which deal in gold and silver, also known as "Bullion Banks," apply and utilize the fractional banking system to bullion dealings.
Jim Rickards: Possible Run on the Gold Bank, Fed Insolvent, Currency Endgames in US Debt Crisis JESSE'S CAFÉ AMÉRICAIN "Somewhere ahead I expect to see a worldwide panic-scramble for gold as it dawns on the world population that they have been hoodwinked by the central banks' creation of so-called paper wealth. No central bank has ever produced a single element of true, sustainable wealth. In their heart of hearts, men know this. Which is why, in experiment after experiment with fiat money, gold has always turned out to be the last man standing." Richard Russell
Jim Rickards - KingWorldNews.com April 14, 2010 In our continuing coverage of what could be the largest fraud in history we interviewed Jim Rickards the day after the release of the Harvey and Lenny Organ and Adrian Douglas blockbuster to get his opinion not only on the ScotiaMocatta vault news but also regarding the whistleblower interview with Andrew Maguire and Adrian Douglas that involves the LBMA. He also discusses how gold could go to $20,000 an ounce.
Eric Sprott on the Economy, the Markets, and the PHYS Gold Trust
Silver prices to zoom if manipulation is proved By Dr Jeffrey Lewis As the CTFC begins to investigate claims by a whistle blower that the precious metals markets have been manipulated by several large US banks, investors are left to ponder: “What will happen to silver if manipulation is found?” Can you say, payday? Silver’s Current Price At just over $18 per ounce, silver is heavily underpriced considering both its historical prices, as well as the amount of inflation in the years since. Since 1913 and the creation of the third US central bank, the Federal Reserve, the price of silver has advanced at a small discount to the actual rate of inflation. The monetary base has grown from a few billion dollars to more than $1.6 trillion since 1913, all while silver has only increased by 3000%. Though 3000% has been enough to accurately track the change in prices, it has done little to keep up with real inflation, that is, changes in the money supply.
U.S. Dollar – Grave Concerns Remain By: Axel G. Merk - GoldSeek.com We continue to see risks ahead for the U.S. economy, and in particular, the U.S. dollar. Significant global imbalances remain – indeed; the recent global financial crisis has served to exaggerate many of these imbalances. Of grave concern is the unsustainable Federal budget deficit, which may have morphed out of control, with no signs of government constraint over the near-term. The U.S. current account deficit remains at a high level, and will likely weigh on the dollar for years to come. Add to this the inflationary pressures brought about by the Federal Reserve Bank’s (Fed) substantial balance sheet expansion – the balance sheet has grown nearly threefold since the beginning of the crisis – which may cause a further devaluation of the U.S. dollar. Despite political rhetoric to the contrary, in our assessment, policies are clearly working against a strong U.S. dollar. Moreover, we are yet to see evidence of a strong, sustainable economic turnaround in the U.S.
Greek aid in doubt as German professors prepare court challenge By Ambrose Evans-Pritchard Telegraph.co.uk -- A quartet of German professors is to preparing to challenge the EU-IMF rescue for Greece at Germany's constitutional court as soon as the mechanism is activated, claiming that it violates the 'no-bail-out' clause of the EU Treaties. The group will ask for an injunction to block the transfer of German funds until the court has ruled. It will demand a verdict on whether the European Central Bank has broken EU law by bending collateral rules to help Greece. The warning comes as fresh details emerge on the scale of the bail-out. Germany's Handelsbatt cited sources in Berlin warning that the bill may be three times as high as thought, pushing the EU share to €90bn (£79bn) - with an extra €15bn from the IMF.
Max Keiser Report - April 15th, 2010 Stacy Summary: In this episode we look at the scandals of Greece winning a loan; the exodus from Iceland while billionaire plunderers receive safe haven in London; and the dumping of US Treasury bonds as American consumers are about to get squished. In the second half of the show, Max talks to Birgitta Jonsdottir, a Member of Parliament in Iceland, about the Black Report into the country’s banking collapse.
Alan Greenspan and the Ruination of the US Financial System By The Mogambo Guru - The DailyReckoning.com 04/15/10 Tampa, Florida – The Financial Times had the article “Greenspan Mauled Over Role In Meltdown”, which was about that loathsome, worthless lunatic Alan Greenspan testifying at the Financial Crisis Inquiry Commission, which is enough to make you laugh in itself; the morons who perpetrated constant deficit-spending are facing off with the guy who provided the money and credit with insane levels of monetary inflation to make it happen! Hahahaha! For his part, Greenspan lamely admitted that he and the Fed had never tried to do anything other than keep creating money, day after day, month after month, year after year, to finance those boom-era boondoggles, like, for example, the housing bubble, a federal government idiocy of massive size and a particularly odious failure, a pungent stinkeroo made possible with the low, low, low, insanely-low interest rates and laughable banking changes that Greenspan, alone, provided.
Markets could be derailed again, warns Soros Reuters Railway porter-turned-billionaire financier George Soros delivered a stark warning last night that the financial world is on the wrong track and that we may be hurtling towards an even bigger boom and bust than in the credit crisis. The man who ‘broke’ the Bank of England (and who is still able to earn a cool $3.3 bln in a year) said the same strategy of borrowing and spending that had got us out of the Asian crisis could shunt us towards another crisis unless tough lessons are learned.
Debt Worries Shift to Portugal, Spurred by Rising Bond Rates By LANDON THOMAS Jr. - NYTimes.com LONDON — Next target: Portugal. Speculators have begun to zero in on another small member of Europe’s troubled monetary zone, highlighting the same economic flaw that brought Greece to the verge of insolvency: a chronically low savings rate that forces a reliance on the now-diminishing appetite of foreign investors to finance persistent deficits. Just as investors are turning their attention to the next vulnerable country, Greece moved a step closer on Thursday to activating a $61 billion rescue package, as Prime Minister George A. Papandreou asked the European Union and the International Monetary Fund to meet in Athens next week.
Krugman Strikes Again By Peter Schiff - The DailyReckoning.com 4/15/10 Westport, Connecticut – In a commentary a few weeks ago, I rebutted dangerously silly arguments put forward by New York Times columnist Paul Krugman about how the United States should pressure China to drop its support for the US dollar. Although there is far more happening in the world outside of Mr. Krugman’s brain than within it, fresh drivel from the acclaimed Nobel Prize winner compels me to turn my focus there once again. In today’s column, Krugman analyzes the Greek debt crisis, arguing that the best solution for Athens would be to simply inflate away its debt burden with printing press money. Krugman laments that this sensible option is being foreclosed by the monetary priggishness of the German heavyweights in the European Union, who are ‘foolishly’ seeking to prevent inflation and impose fiscal discipline.
Central Banks Stoking Market Euphoria By Gary Dorsch, Editor, Global Money Trends - Goldseek.com -- With only the slightest degree of hesitation, the Dow Jones Industrials penetrated the psychological 11,000-level this week, extending its historic gains to +70% above its March 2009 lows, and melting away deep-seeded skepticism over whether equities have gone “too-far, too-fast,” in what is the least-loved bull market in history. Yet the bearish skeptics might want to judge the outlook for the US-economy through the lens of the stock market, rather than vice versa.
Prosecutors probing Goldman director in Galleon case: WSJ By MarketWatch -- HONG KONG (MarketWatch) -- Federal prosecutors are examining whether Goldman Sachs Group Inc. board member Rajat Gupta gave inside information to Galleon hedge-fund founder Raj Rajaratnam during the financial crisis, The Wall Street Journal reported Thursday. The government is examining whether Gupta, currently a director on the investment banking giant's board and formerly the head of McKinsey & Co., shared inside information about Goldman, the report said, citing people close to the situation.
JPMorgan earns $3.3 billion in first quarter By Stevenson Jacobs - AP via MSNBC.com Strong trading revenue helped offset continuing losses on consumer loans NEW YORK - JPMorgan Chase & Co.'s first-quarter profit easily beat expectations Wednesday as trading gains helped offset consumer loan losses. The bank's CEO said the economy was showing clear signs of improvement. JPMorgan Chase, the first of the big banks to report earnings for the January-March period, said it earned $3.3 billion, up from $2.1 billion a year earlier. The company again added to its reserves for failed loans during the quarter, but its investment banking division and other businesses enabled it to more than overcome the ongoing weakness in lending.
Is the Fed manipulating prices to protect itself? by Mike Miller - LibertyMaven.com Gold and silver prices signal inflation. If the Fed can silence this signal then it can make its own product, Federal Reserve Notes, look more valuable than they really are. If you and I tried to manipulate the market in this way we would go to jail. So why should such behavior be okay for an institution that’s supposed to serve the public interest? If this price manipulation is occurring, then . . .
It defrauds investors
It tricks innocent Americans into keeping their savings in depreciating dollars, when they might be better off shifting to more stable assets
Ron Paul vs. Ben Bernanke at JEC Hearing 4/14/10
Obama, GOP spar over financial reform By Caren Bohan, Kevin Drawbaugh - Reuters MSNBC.com President steps up pressure to push financial reform legislation WASHINGTON - President Barack Obama and top Republicans faced off Wednesday over a planned Democratic bill in the Senate to crack down on Wall Street excesses. The Democrats want to tighten oversight of derivatives markets and protect consumers from abusive mortgages among other restraints, but need the support of Republican lawmakers.
The “Right To Rent” A Foreclosed Property? By twist If a borrower can't be "rescued" by a loan modification or a short sale, should they have the "right to rent" their home after the lender has foreclosed instead? This was advocated yesterday by Dean Baker, co-director of the Center for Economic Policy and Research in testimony before the Subcommittee on Housing and Community Opportunity Hearing. Baker points out that programs implemented in 2009 to support home prices are disappearing. That and other factors such as increased foreclosures and delinquency rates, tighter lending, etc. will lead to additional price declines in the housing market. He explains why this will lead to the failure of many loan modifications:
Foreclosure rates surge, biggest jump in 5 years By Alex Veiga - AP via MSNBC.com 'On pace to see more than 1 million bank repossessions this year' - LOS ANGELES - A record number of U.S. homes were lost to foreclosure in the first three months of this year, a sign banks are starting to wade through the backlog of troubled home loans at a faster pace, according to a new report. RealtyTrac Inc. said Thursday that the number of U.S. homes taken over by banks jumped 35 percent in the first quarter from a year ago. In addition, households facing foreclosure grew 16 percent in the same period and 7 percent from the last three months of 2009.
Housing Bailout Backfires By Addison Wiggin - The DailyReckoning.com 04/15/10 Baltimore, Maryland – We’re barely two weeks away from the expiration of the homebuyer tax credit that has been propping up the market since last fall. And already, signs point to its lugubrious affects wearing off. First, the Home Affordable Modification Program (HAMP) has been a joke. Of roughly 1.4 million “trial modifications,” less than one in five has been made permanent. But a report out this morning reveals it’s even worse than that. Even those modifications that stuck are blowing up. As of March, 2,879 permanent modifications were canceled – nearly double the total from February.
New jobless claims surge in latest week Reuters via MSNBC.com Jobs still hard to land despite signs of recovery in other parts of economy WASHINGTON - The number of U.S. workers filing new claims for jobless aid soared last week as the backlog from the Easter holiday was processed, adding to worries about the recovery, while U.S. industrial output rose less than expected in March. Initial claims for state unemployment benefits rose 24,000 - the largest increase in two months - to a seasonally adjusted 484,000, the Labor Department said on Thursday. Markets had expected a dip to 440,000.
On The Sidewalk by Clyde James Aragon - LibertyMaven.com Like many free Americans who want to stay that way, I was at a Tea Party rally on April 15th. I’m not a card-carrying member of that group but I agree with them wholeheartedly on the bad direction this country is taking under the Obama regime. So I picked a spot on the sidewalk on Menaul Boulevard at 4 in the afternoon, brandished my sign, yelled a bit, waved a bit, and said what had to be said. For the most part, the event was very, very peaceful except for a young lady who stopped at the light and tried to share the water she had with her in her environmentally-friendly and recyclable water bottle. I was deeply dismayed for it appeared she was far more in need of a shower than any of us.
Nuclear Fear of Cold War Now Applies to Terrorists By SCOTT SHANE - NYTimes.com WASHINGTON — The top secret National Intelligence Estimate did not mince words. The United States faced an enemy with “no scruples about employing any weapon or tactic,” it said, and nuclear weapons smuggled across porous borders threatened to devastate American cities. Sleeper cells, the document warned, might already be inside the country. Or so the Central Intelligence Agency told President Harry S. Truman. The year was 1951. It has become conventional wisdom, repeated by President Obama at the nuclear summit meeting this week, that the cold war danger of huge strikes by thousands of nuclear missiles has given way to a new threat: terrorists killing tens of thousands of Americans with a stolen or homemade nuclear device. A broad range of security experts agree that nuclear terrorism may well be the most serious danger the United States faces today.
BRIC leaders meet to seek change in global order By Alastair Stewart BRASILIA (MarketWatch) -- The presidents of Brazil, Russia, India and China will meet Thursday evening to discuss proposals for changes to the global financial system and multinational institutions. The summit of the BRIC group of emerging market giants was brought forward from Friday at the last minute after Chinese President Hu Jintao decided to rush back to China following a massive earthquake in Qinghai province early Wednesday. Earlier in the day, Hu and Brazilian President Luiz Inacio Lula da Silva had signed a wide-ranging, four-year bilateral action plan that was light on details but focused on increasing economic ties. They also agreed to jointly push for changes at the World Trade Organization, the Group of 20 nations and other international organizations.
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Thurs 04.15.2010
Have you filed your 1040 yet?
Free ice cream outside IRS building WASHINGTON BUSINESS JOURNAL - BY Jeff Clabaugh Dairy Queen has dispatched its Blizzardmobile to D.C. with plans to hand out free ice cream outside the IRS building on Thursday - also known as Tax Day. Dairy Queen will park its Blizzardmobile outside the IRS building at 10th Street and Pennsylvania Avenue NW. and give Mini Blizzards to taxpayers and accountants. The window of opportunity for free ice cream is short. Dairy Queen says the truck will be there from noon to 1 p.m.
Mortgage deduction: America's costliest tax break By Jeanne Sahadi, senior writer NEW YORK (CNNMoney.com) -- The mortgage-interest deduction is America's favorite tax break -- and it's also the costliest. Between 2009 and 2013, the government will lose out on nearly $600 billion because of it, according to the Joint Committee on Taxation. While there's no way to stabilize U.S. debt without making tough choices on the tax and spending sides of the ledger, some sacred cows are more sacred than others. And the mortgage-interest tax break is still deemed untouchable.
Income Tax Blast From the Past: Brian Doherty | Reason.com How Many Taxpayers Does it Take to Support A Boondoggle? From our tax day coverage of years past--and yes, the specific numbers and programs could use an update--comes my 1995 article that looks at your tax burden not in terms of how many pennies it takes from you to support any given program when your tax burden is presumed to be spread across the entire government megillah, but by imagining that your entire tax burden is going to support various too-small-to-mention bits of government silliness/stupidity.
10 foreclosures for every home saved By Tami Luhby, senior writer NEW YORK (CNNMoney.com) -- The Obama administration's mortgage-modification program is not keeping pace with the deluge of foreclosures hitting the market, a government watchdog found. Only 168,708 homeowners have received long-term mortgage modifications under the president's plan, as of February, a small fraction of the 6 million borrowers who are more than 60 days behind on their loans, according to the Congressional Oversight Panel's latest report, released Wednesday.
Dynamics of the Worldwide Currency Crisis By: Vincent Bressler - GoldSeek.com During most of world history, financial assets have been a small fraction of total wealth. But a number of "innovations" over the last one hundred years have created an imbalance that the world has never seen before. Today, financial assets represent 95% or more of the total wealth in the world. In our rigged markets, real productive capacity and resources have been valued at less than 5% of of total wealth. This is an absurd and unsustainable situation. The people (wizards) who can create unlimited financial assets at the click of a mouse button understand that, everyone else (sheeple) do not. In order to hang on the their share of the "wealth", the wizards must convert their wealth. The sequence is as follows: 1) Financial Assets -> 2) Monetary Metals -> 3) Tangible Assets -> 4) Financial Assets
World Monetary System Collapse and Gold’s Parabolic Rise By Hubert Moolman - GoldSeek.com We could be very close to the end of a financial era that started about 1971. The monetary system as we know it today, which is backed by a changing (non stable dollar), appears to be in its final stages and just waiting for a fierce run to gold, silver and certain other non monetary assets, to provide the death blow. The death blow could be provided by the massive increase in the “paper prices” of gold, silver etc. over the next couple of years, which could lead to an end of confidence in fiat money and other debt based financial assets. The current monetary order will be exposed for the fraud that it is, and it will collapse just like the monetary orders before i.e. the gold exchange standard and the Bretton Woods standard.
Russia says Iran reactor on track for August launch BUENOS AIRES, April 14 (Reuters) - A reactor being built by Russia at Iran's Bushehr nuclear power plant is scheduled to open in August, the head of Russia's state nuclear corporation said on Wednesday. "The launch is scheduled for August. We're on schedule," Sergei Kiriyenko told reporters in Argentina during a visit. "Bushehr doesn't threaten the regime of nonproliferation in any way. No one has any concerns about Bushehr."
Keep Your Eyes on the Golden Prize By: Adam Brochert Gold's bull market is starting to get warmed up again. The gains ahead in Gold are going to be greater than what we have seen since the secular bull market began at the turn of the century. Gold will continue to outperform general stocks, real estate, bonds and most if not all commodities. Paperbugs will hate it, will question Gold every step of the way and will produce vehement rants against the wisdom of investing in Gold during a secular credit contraction/economic depression. People like Nouriel Roubini, who haven't a clue as to why Gold has outperformed the U.S. Dollar since the transient deflationary collapse in late 2008, aren't going away any time soon. Krugman and his ilk will remain the economic philosopher kings of paperland, on that you can be sure. But it is your choice as to whether or not to listen to the siren song of those who claim to be able to create prosperity for all using nothing but magical debt tickets backed by nothing.
2010 set to see record gold demand CityAM.com GOLD is near the final phase of its 10-year bull run, but prices could still climb as high as $1,300 an ounce in 2010 driven by higher investment demand, said Philip Klapwijk, chairman of metals consultancy GFMS. The rise of gold prices is not sustainable because jewellery demand has dropped to less than half of total demand, and record investment buying at some point will fall off, Klapwijk said ahead of the release of GFMS’ Gold Survey 2010, considered the industry’s premier review of precious metals.
Gold in Perspective By David Galland - GoldSeek.com As the price of gold rises and the inevitable quacking begins again about the “barbaric” metal being overvalued, I thought a quick check-in with the historical perspective might prove useful. The first of two charts that follow shows the long-term picture of gold from 1970 to the present, correctly adjusted for inflation. In the second chart, we overlay the inflation-adjusted price of gold from the last secular gold bull market in the 1970s, with the secular bull market we’re now in. As you can see, if the current bull ends with the sort of grand finale we saw at the end of the last big blow-off, then prices have a long way to go from here. That said, a credible case can be made that this time around, the price could go much higher.
Gold can go up for another five to eight years Michael Ballange - CommodityOnline.com . . . . I hate putting dollar numbers on it. However, as I said, if money velocity catches all this freshly printed money globally, and becomes the spark that ignites the inflationary bonfire, then you can just pick any number you want for gold prices north of $3,000 an ounce. Who knows? For 2,000 years we've known that gold is money. The people that are in charge of central banks and treasuries globally have illustrated to us that they have no respect for fiat currency. They have proven it because they have, without any consideration of the ramifications for the average citizen, elected to debauch the currency. That's not just the U.S. That's everywhere. The inverse of that is gold. Gold is money. There's no counterparty risk associated with it. The same stuff we've read a thousand times by anybody that likes gold is what I believe. Gold is money. Fiat currency is paper with a promise.
Can gold save Greece from the torrid fiscal mess? By Geena Paul MUMBAI (Commodity Online): Greek literature boasts three great writers of tragedy: Aeschylus, Sophocles, and Euripides in the olden days. But, now Greek tragedy has nothing to do with literature. It is all about money or rather Euro. In the ancient days, the largest festival for Greek tragedy was the Dionysia held for five days in March or April, for which prominent tragedians usually submitted three tragedies and one satyr play each. In 2010, Greek Tragedy is again performed in March-April with three major players like Germany, France and Greece.
Is Wall Street Underestimating the Inflation Threat? By VISHESH KUMAR - DailyFinance.com As reports of a major economic revival pour in, investor sentiment is quickly swinging from unduly bleak to overly exuberant. The gaudy profits Wall Street analysts now forecast for next year ahead might be the most conspicuous example of the excess. But banking on tame inflation for the foreseeable future is the other part of the overly rosy economic picture now being painted. Low inflation and interest rates are expected to accompany the sharp recovery if a fast-growing segment of Wall Street is to be believed, as incongruous that may seem. And yet a growing number of fund managers "painted a picture of an ideal investment environment," according to a Bank of America/Merrill Lynch survey. A record 32% of fund managers -- the highest since the survey began in February of 2008 -- now envision a "Goldilocks" scenario where inflation remains tepid but growth picks up quickly, up sharply from 21% just a month ago.
China ’Power’ Over Metals for Smart Bombs Prompts U.S. Hearing By Peter Robison and Gopal Ratnam -- April 15 (Bloomberg) -- U.S. lawmakers called for a hearing after a government report exposed potential “vulnerabilities” for the American military because of its extensive use of Chinese metals in smart bombs, night-vision goggles and radar. China controls 97 percent of production of materials known as rare earth oxides, giving it “market power” over the U.S., the Government Accountability Office said in the report obtained by Bloomberg News before its public release on April 14.
Exclusive: Second Whistleblower Emerges Submitted by Tyler Durden - ZeroHedge.com A Deep Insider's Walkthru To Silver Market Manipulation A second whistleblower speaks. As the topic of physical delivery has gained prominent attention recently, it is crucial to complete the circle and show how this weakest link in the PM market is (ab)used by the big boys: Phibro and Warren Buffet. Pay particular attention to the analogues between the methods employed in the 90's commodity market and how the PM (and equity) market is being gamed currently. And to think that each new generation of traders believes it has discovered something new...
Lehman May Have Grounds to Sue Goldman, Barclays, Examiner Says By Linda Sandler, Matthew Leising and Donald Jeffrey -- April 14 (Bloomberg) -- Lehman Brothers Holdings Inc. may have grounds to sue Goldman Sachs Group Inc. and Barclays Plc after they obtained assets from CME Group Inc. for less than half their value, bankruptcy examiner Anton Valukas said. Goldman was the highest bidder for Lehman’s equity derivatives at CME, and took $445 million of those assets at a private auction in September 2008, according to previously censored details of Valukas’s March 11 report. Barclays was the highest bidder for Lehman’s energy derivatives and took $707 million in assets from CME.
The Great Lehman Derivative Robbery: by Tyler Durden - ZeroHedge.com From A Tipster; Lehman May Have Grounds To Sue Goldman And Barclays For Fraudulent Transfers Earlier today we posted the unredacted version of the 5th volume of the Lehman Examiner report, which unhid all the specifics of the unwind related to Lehman's options and futures positions. There was a reason why Goldman et al felt sufficiently motivated to make the data hidden in the first place. The reason: the banks participating in the liquidation made a killing on the unwind. Yet another involuntary gift from the Lehman creditor estate to the big banks who had the inside scoop on Lehman's books all along, and certainly in the days just before the bankruptcy was announced. The market continues to be one for the banks, and one for "everyone else." And "everyone else" still can not borrow at the Discount Window. Although we are confident that that may change soon.
Lehman Insolvent Weeks before Bankruptcy: Examiner By Reuters NEW YORK (Reuters) - Lehman Brothers Holdings Inc. used accounting gimmicks and had been insolvent for weeks before it filed for bankruptcy in September 2008, but there was not extensive wrongdoing, a court-appointed examiner has found. In a 2,200-page report made public on Thursday [March 11], examiner Anton Valukas, chairman of law firm Jenner & Block, reported the results of his more than year-long investigation into who could be blamed for the firm's collapse, which deepened the global financial crisis.
Fed Shouldn't Reveal Crisis Loans By Bob Ivry Banks Vow to Tell High Court April 14 (Bloomberg) -- The biggest U.S. commercial banks will take their fight against disclosure of Federal Reserve lending in 2008 to the Supreme Court if necessary, the top lawyer for an industry-owned group said. Continued legal appeals will delay or block the first public look at details of the central bank's $2 trillion in emergency lending during the 2008 financial crisis. The Clearing House Association LLC, a group that includes Bank of America Corp. and JPMorgan Chase & Co., joined the Fed in defense of a lawsuit brought by Bloomberg LP, the parent company of Bloomberg News, seeking release of records related to four Fed lending programs.
Bernanke: U.S. Should Press China on Yuan Policy By Corey Boles - WSJ.com The U.S. should continue to press China on its foreign exchange policy, Federal Reserve Board Chairman Ben Bernanke said Wednesday, agreeing with a top Democratic senator that the level of the yuan was one of the causes of the global recession. Bernanke agreed with Democratic Sen. Charles Schumer (D., N.Y.) that China's currency exchange policy was a major cause of "harmful of global imbalances." He said China would benefit from a more flexible yuan. Combined with other steps by the Chinese government, Bernanke said a rising yuan would encourage the development of domestic consumption in China.
Singapore’s Revaluation May Spur China, South Korea By Shamim Adam April 15 (Bloomberg) -- Singapore’s currency revaluation may prompt policy makers in China, Indonesia and South Korea to start withdrawing monetary stimulus as economic growth in the region outpaces the rest of the world. Asian central banks are mostly “behind the curve” in tightening monetary policy and inflationary pressures may rise, said HSBC Holdings Plc’s Robert Prior-Wandesforde. Singapore yesterday announced it will allow its currency -- the city- state’s principal monetary tool -- to strengthen, even as China, South Korea and Indonesia keep interest rates unchanged.
Fed Moves $421.8 Billion Without Warning By: Dr. Jeffrey Lewis - GoldSeek.com The St. Louis Federal Reserve Bank, which documents the inner workings and balance sheets at the nation's central bank, just released new research and data suggesting that the Federal Reserve lent $421.8 billion – with no one knowing exactly where it went. Where’s the Money? Each week, the St. Louis Fed releases data regarding the Federal Reserve's activity and public balance sheets. In ordinary times, this data is usually largely ignored, as the mainstream media has little interest in probing into the “small” $5-10 billion changes in the Total Loans and Leases of Commercial Banks. The week of March 24-31 was different, however, as the Federal Reserve made $421.8 billion in new loans, more than it made in the week following the Fed's big moves to combat the financial crisis in 2008! Is the Fed Bailing out Greece? Economists are all but left in the dark on the actual operations behind the scenes, and they have minimal data to investigate other than what the Federal Reserve is willing to release to the public. However, the timeliness of this most recent surge in lending activity suggests that the Federal Reserve may be taking a hand in bailing out foreign nations, or Greece in particular, by shoveling funds through commercial banks.
Greek Bonds Fall for a Second Day as Pimco Shuns Debt By Matthew Brown April 14 (Bloomberg) -- Greek government bonds dropped as some of the world’s biggest investors said the European Union’s 45 billion-euro ($61 billion) rescue plan for the nation fails to make the securities attractive. The declines sent the yield on the two-year note up for a second day after Pacific Investment Management Co., which runs the world’s biggest bond fund, said it’s too early to buy Greek debt and BlackRock Inc. said EU states planning to participate in a bailout must show they can withstand a “backlash” from their citizens. Portuguese bonds declined after the EU said the government needs to do more to tackle its budget deficit.
IMF Chief: Deflation Is Only Option for Greece MoneyNews.com Deflation is the only way Greece can effectively tackle its debt problems, International Monetary Fund (IMF) Managing Director Dominique Strauss-Kahn was quoted on Monday as saying. "The only effective remedy that remains is deflation," Strauss-Kahn told Austrian magazine. "And this is exactly what the European Commission has correctly recommended." Euro zone finance ministers approved a 30 billion euro ($40 billion) emergency aid mechanism for debt-plagued Greece on Sunday, but stressed Athens had not requested the plan be activated yet.
Japan mulls monetization of public debt and yen devaluation By Ambrose Evans-Pritchard - Telegraph.co.uk Japan’s ruling party has called for drastic monetary easing to devalue the yen by 30pc and halt the slide into deflation, putting it on a collision course with the Bank of Japan. A draft by 130 lawmakers from premier Yukio Hatoyama’s Democratic Party of Japan said the country needs a radical shift towards growth policies, calling for an inflation target above 2pc. The exchange rate should be steered to ¥120 against the dollar, from the current ¥90. Shizuka Kamei, financial affairs minister, said the central bank must monetize government debt to support the market for state bonds and prevent deflation becoming deeply lodged in the economy.
Funds shun Europe as 'no-go zone' after Greek crisis By Ambrose Evans-Pritchard - Telegraph.co.uk Global fund managers have changed their views of the euro area dramatically since the Greek crisis erupted last year and exposed the deep structural flaws in monetary union "Europe has become a no-go zone," said Patrik Schowitz, equity strategist at Bank of America Merrill Lynch. "As recently as five months ago investors regarded Europe as the most attractive play on global economic recovery". The bank's monthly survey of funds found that a net 18pc are underweight stocks in Europe. They are giddily optimistic about the "Goldilocks" recovery in the US, Asia, and emerging markets, increasing risk exposure to the highest since January 2006.
Wall Street reform: Washington's next battle By Jennifer Liberto WASHINGTON (CNNMoney.com) -- With the health care fight and two weeks at home behind it, Congress is taking on proposals to reform Wall Street and prevent future financial collapses. Nothing has really changed since the Senate Banking panel passed an overhaul measure along party lines in late March - except that the rhetoric on both sides has sharpened. Senate Minority Leader Mitch McConnell, R-Ky., came out swinging Tuesday and Wednesday, slamming Banking Committee chairman Christopher Dodd's bill as a "perpetual taxpayer bailout of Wall Street banks.
Spitzer: NY Fed “an absolute sinkhole” Reuters To say former New York Governor Eliot Spitzer is no fan of the Federal Reserve Bank of New York would be an understatement. After arguing financial regulatory reform proposals being discussed in Washington fall short, he said: “One institution needs to be completely overhauled: The New York Fed,” he said. At a panel in New York, Spitzer lambasted the New York Fed as “an absolute sinkhole when it comes to what went on over the past ten years.”
White House Urges Blankfein, Dimon to Stop Bill Fight By Julianna Goldman and Alison Vekshin April 14 (Bloomberg) -- Top White House officials last week pressed the chief executive officers of Goldman Sachs Group Inc., Bank of America Corp. and JPMorgan Chase & Co. to stop lobbying against a financial-regulatory bill advancing in Congress, according to people who attended the meeting. President Barack Obama’s senior adviser David Axelrod and National Economic Council Director Lawrence Summers met with Goldman Sachs CEO Lloyd Blankfein, JPMorgan’s Jamie Dimon, Bank of America’s Brian Moynihan and about 12 other executives at an April 6 event in Washington hosted by the Financial Services Forum, said the people, who declined to be identified because the meeting was private.
Fed Shouldn’t Reveal Crisis Loans By Bob Ivry Banks Vow to Tell High Court April 14 (Bloomberg) -- The biggest U.S. commercial banks will take their fight against disclosure of Federal Reserve lending in 2008 to the Supreme Court if necessary, the top lawyer for an industry-owned group said. Continued legal appeals will delay or block the first public look at details of the central bank’s $2 trillion in emergency lending during the 2008 financial crisis. The Clearing House Association LLC, a group that includes Bank of America Corp. and JPMorgan Chase & Co., joined the Fed in defense of a lawsuit brought by Bloomberg LP, the parent company of Bloomberg News, seeking release of records related to four Fed lending programs.
You call this a recovery? By Rex Nutting, MarketWatch Economy strengthening, but structural defects remain WASHINGTON (MarketWatch) -- The U.S. economy appears to be strengthening following the worst downturn in generations, but the recovery isn't setting anyone's heart on fire. Most of the hard economic data point to steady if unspectacular growth over the next year or two. The unsustainable boost from inventories and from government stimulus is giving way to a resurgence in private demand. Consumers are spending, companies are profitable, and inflation is low. The Dow is up and factories are busier. Businesses are beginning to hire workers.
The Whistleblower They Ignored By Robert Scheer There aren't too many genuine heroes to come out of the banking disaster, but Armando Falcon is one of them. You have probably never heard of him, but his testimony Friday before the Financial Crisis Inquiry Commission, available on the commission's website, is must reading for anyone trying to figure out why U.S. taxpayers had to bail out companies to the tune of hundreds of billions of dollars. Falcon was the chief regulator attempting to bring order to the houses of Fannie Mae and Freddie Mac during the first four years of this decade, and had he been listened to, a significant part of the housing crisis could have been mitigated. Instead his agency was denied serious regulatory power by Democrats in Congress including liberals such as Reps. Barney Frank and Maxine Waters, both of whom assumed he was undermining public support for more affordable housing.
11 Examples Of How Insanely Corrupt The U.S. Financial System Has Become EndOfTheAmericanDream.com -- If you ask most Americans, they will agree that the financial system is corrupt. It is generally assumed that just like most politicians, most big bankers are corrupt by nature. But the truth is that the vast majority of Americans have no idea just how corrupt the U.S. financial system has become. The reality is that the American Dream is literally being stolen from millions of Americans right out from under their noses and they don't even realize it. The corruption on Wall Street has become so deep and so vast that it is hard to even find the words to describe it. The level of greed being displayed by many Wall Street firms would make Gordon Gecko blush. It seems that the major financial players will try just about anything these days - as long as they think they can get away with it. But in the process they are contributing to the destruction of the greatest economic machine that the planet has ever seen. The following are 11 examples of just how insanely corrupt the U.S. financial system has become....
Defaults Rise in Loan Modification Program By DAVID STREITFELD - NYTimes.com The number of homeowners who defaulted on their mortgages even after securing cheaper terms through the government’s modification program nearly doubled in March, continuing a trend that could undermine the entire program. Data released Wednesday by the Treasury Department and the Housing and Urban Development Department showed that 2,879 modified loans had been ended since the program’s inception in the fall, up from 1,499 in February and 1,005 in January.
Financial overhaul duel is health care's offspring By Kara Rowland - WashingtonTimes.com Push is on to act with GOP or not Lawmakers appeared to be headed for a sequel to the battle over health care as President Obama and Democratic leaders on Wednesday demanded swift action on a financial overhaul bill that Republicans argue would perpetuate Wall Street bailouts. Mr. Obama has been making a full-court press on the issue, urging the Senate to vote as soon as possible on a plan to revamp the nation's financial regulatory system by giving the government more power to break up troubled firms, creating an independent consumer-protection agency and imposing new requirements on monetary instruments known as "derivatives."
Bad Decisions Led to Fannie, Freddie Collapse, Official Says By NICK TIMIRAOS WASHINGTON-Poor decision-making to try to regain market share and not government-mandated affordable housing goals led Fannie Mae and Freddie Mac to loosen their lending standards that prompted their collapse, said Shaun Donovan, the Obama administration's top housing official. While the Obama administration won't propose legislation revamp Fannie, Freddie and the broader housing-finance market until next year, the remarks offer insight into the administration's thinking over how to repair the broken housing-finance sector.
FDIC Offers Busted Bank Loans on Terms Buyers ‘Love’ By Jonathan Keehner and Phil Mattingly April 14 (Bloomberg) -- Starwood Capital Group LLC, Colony Capital LLC and TPG, whose leaders profited from the 1990s savings and loan crisis, are among firms buying assets from the Federal Deposit Insurance Corp. for as little as 22 cents cash on the dollar, according to data compiled by Bloomberg. The sales, some including no-interest financing from the agency, are part of an FDIC effort to clean out $40 billion of loans that regulators seized from failed banks. Starwood Chief Executive Officer Barry Sternlicht told potential investors in February it’s “very hard to lose money” on the deals.
Hold On – Interest Rates Are Going To Increase During The Second Half Of 2010 And Into 2011 EndOfTheAmericanDream.com Interest rates have nowhere to go but up. Interest rates will rise during the second half of 2010, and they will continue to rise during 2011. This is going to cause a lot of pain for the U.S. economy and for American consumers. Unfortunately, this is not just the opinion of a handful of half-baked Internet nutjobs. This is the assessment of the New York Times and of the highly respected economists that they interviewed. It seems that virtually everyone in the financial community agrees that it is inevitable that interest rates are going to rise. And that is really bad news for the U.S. economy. So why are interest rates going to rise?
Forget Traditional Banks: By PETER COHAN - DailyFinance.com Consumers Need Deposit-Only Institutions The news reported Friday that 18 of the largest banks have been using loopholes in financial reporting to mask how much money they are borrowing highlights the danger Wall Street's power poses to society. As I wrote in a DailyFinance article last June, I struggle with the whole idea of institutions that take consumer deposits and lend them out. What bothers me about the way the banking system is set up now is this: You and I put our money in banks because we want a safer place to keep it than under the mattress -- but that isn't what we really get. Other than safety, all most of us want from our bank is for the money we deposit to earn a little interest, and for it to be easily accessible to us through ATMs and the credit card system as we go about our daily routines.
Unions Win Public-Contract Row By MELANIE TROTTMAN The Obama administration is set to issue a rule Tuesday that will allow federal agencies to require that contractors on large-scale public construction projects agree to union representation for workers. The executive order, which will become effective next month, is the latest in a series of moves by the administration that are favorable to unions, whose members could play a critical role in the upcoming midterm elections as Democrats try to hang on to seats in Congress. The rule doesn't mandate that federal agencies require contractors to bargain with unions on all jobs, but it clears the path for government agencies to make such agreements a requirement for contractors on jobs costing $25 million or more. Labor unions applauded the new rule but builders decried it.
U.S. Must Start to Rein In the Deficit, Fed Chief Says By SEWELL CHAN - NYTimes.com WASHINGTON - The Federal Reserve chairman said Wednesday that the government must begin to make "difficult choices" to address its gaping deficits and warned that "postponing them will only make them more difficult." The chairman, Ben S. Bernanke, said that a "credible plan" for reining in federal deficits could help long-term interest rates and raise consumer and business confidence. "Although sizable deficits are unavoidable in the near term, maintaining the confidence of the public and financial markets requires that policy makers move decisively to set the federal budget on a trajectory toward sustainable fiscal balance," he said.
World Bank leader: By Howard Schneider - Washington Post Developed nations should yield more control of global economy World Bank President Robert B. Zoellick called on developed nations to give more authority over the global economy to developing countries, acknowledging that the financial crisis has erased any doubts about the rise of a "multi-polar" system. In a speech at the Woodrow Wilson Center for International Scholars on Wednesday, Zoellick offered a broad assessment of the lessons that should be learned from the economic shocks of the past two years.
White House Floats Diverse List for Court By LAURA MECKLER WASHINGTON-The White House said Monday it was considering a diverse list of about 10 candidates for the Supreme Court, including at least one Westerner, a former state court judge, two politicians and several women. The list was part politics, as the White House sought to show it was casting a broad net. "The process itself is a signal about the things that they value," said Tom Goldstein, a Washington lawyer who oversees a widely read Supreme Court blog. "There are three or four very serious people and other dark-horse candidates who are being discussed in part because they have a constituency."
Gerald Celente on The Alex Jones 14 Apr 2010
Foreclosure-Prevention Program Struggles to Make Impact By JAMES R. HAGERTY A congressional watchdog panel said in a report Wednesday that the U.S. Treasury is still struggling to get its foreclosure-prevention programs off the ground. The report from the Congressional Oversight Panel, created by Congress to monitor bailout spending, came as the Treasury prepared to release its latest monthly report on the $50 billion Home Affordable Modification Program, or HAMP. That report will show that so far more than 230,000 households had been given permanent reductions in loan payments by the end of March, a Treasury spokeswoman said. That is up from about 169,000 a month earlier. By comparison, nearly eight million households are behind on mortgage payments or already in the foreclosure process.
RealtyTrac: S. Fla. Q1 foreclosure filings rise SOUTH FLORIDA BUSINESS JOURNAL - BY Susan R. Miller -- Despite a slowly improving housing market, South Florida continues to be plagued by an increasing number of foreclosures. First quarter figures from Irvine, Calif.-based RealtyTrac show foreclosures were up in the tri-county area. The state also posted the nation’s third-highest foreclosure rate, with one in every 57 properties receiving a foreclosure filing between January and March.
New York’s home foreclosures up 10% in Q1 THE BUSINESS REVIEW (ALBANY) Home foreclosures in New York increased 10 percent in the first quarter of 2010 compared to the same period last year, according to RealtyTrac. The increase in the number of properties receiving a foreclosure filing wasn’t as large as the nation as a whole, and New York continues to rank among the lowest in terms of per-capita filings. New York ranked No. 42 out of the 50 states in per-capita filings during the quarter, according to RealtyTrac, an online seller of distressed properties.
Oregon ranks 11th for foreclosure PORTLAND BUSINESS JOURNAL Oregon ranked 11th in the nation for foreclosure activity in the first quarter of 2010. There were 12,076 notices of default and other foreclosure-related actions involving Oregon properties in the quarter, a 14.5 percent increase from the same period in 2009, according to figures released Wednesday by RealtyTrac, an Irvine, Calif.-real estate firm that tracks foreclosure activity. Foreclosure affected one in every 135 Oregon households in the first quarter, slightly less than the national average of one in 138. Nationally, there were 932,234 actions, a 16 percent increase from a year ago. Not only were the numbers up, so too was the severity.
Obama Foreclosure Plan Leaves Many Struggling Homeowners Out, Watchdog Says By Daniel Wagner and Alan Zibel, AP - CNSNews.com -- Washington (AP) - A watchdog panel overseeing the financial bailouts says the Obama administration's flagship mortgage aid program lags well behind the foreclosure crisis and leaves too many families out. The Congressional Oversight Panel says in a report released Wednesday that the administration projects only one million families will end up with lower monthly payments as a result of the program. The report says six million families are more than two months behind with their payments, and 200,000 more families receive foreclosure notices each month.
Mortgage Defaults Drive Consumer Spending: Experts Weigh In By: Diana Olick - CNBC.com I opened up a big can of debate Monday, when I repeated some chatter around that consumer spending might be juiced by all those folks not paying their mortgages. They have a little extra cash, so they're spending it at the mall. Some of you thought the premise had some validity, others, as is often the case, told me I was an idiot. Well after the blog went up Erin Burnett put the question to Economist Robert Shiller, of the S&P/Case Shiller Home Price Index, during an interview on Street Signs. He didn't deny the possibility, and added: "In some sense there might be a silver lining in that." Then I decided to ask Mark Zandi, of Moody's Economy.com, who will often shoot down my more ridiculous theories.
Program to Help Rural Home Buyers Is Nearly Broke MoneyNews.com A federal loan program that has helped hundreds of thousands of Americans buy homes in rural areas is about to run out of money, potentially crippling the real estate market in many small communities. Since last fall, the loans from the Department of Agriculture have fueled much of the real estate business in some parts of the country. Real estate agents are pleading with Congress to find a way to keep the money flowing until more funding becomes available later in the year. The program has doubled in size thanks to stimulus money, but now it appears to be a victim of its own success, largely because of the generous terms offered to borrowers.
For many, being jobless can seem never-ending By Don Lee - LATimes.com A record 44% of the nation's unemployed have been out of work at least six months. Many of those 6.5 million people may never completely rebuild their working lives. Reporting from Washington Despite optimism over recent job gains, one grim statistic casts a long shadow over the recovering economy -- a record 44% of the nation's 15 million unemployed have been out of work for more than six months. And the evidence suggests that many of them may never completely rebuild the working lives they lost. Never since the Great Depression has the U.S. labor market seen anything like it. The previous high in long-term unemployment was 26% in June 1983, just after the deep downturn of the early 1980s. The 44% rate in March translates into more than 6.5 million people.
Families Struggle to Afford Food, Survey Finds By JASON DePARLE - NYTimes.com WASHINGTON - Nearly one in five Americans said they lacked the money to buy the food they needed at some point in the last year, according to a survey co-sponsored by the Gallup organization and released Tuesday by an anti-hunger group. The numbers soared at the start of the recession, but dipped in 2009 despite the continuing rise in unemployment. The anti-hunger group, the Food Research and Action Center, attributed that trend to falling food prices, an increasing use of food stamps and a rise in the amount of the food stamps benefit. More than 38 million Americans - one in eight - now receive food stamps, a record high.
Even With Low Inflation Rate, Households Still Squeezed By Martin Crutsinger, Associated Press - CNSNews.com Washington (AP) - The recession has caused inflation to all but melt away. The problem is, the economic downturn has also translated into weak income growth. Economists say it is no wonder that consumer confidence is at such low levels. Americans' pocketbooks are being squeezed, even though inflation remains a no-show in many ways. For that reason, the prices that have been rising lately -- in such areas as energy and food -- seem to be having more of an impact than normal. "At a time when wages have not risen, people are obviously more sensitive to any kind of price increases," said Nariman Behravesh, chief economist at IHS Global Insight.
Totalitarian Collectivism: Part 6 -- SCHOOL By James Hall - CapitolHillCoffeeHouse.com Sartre Commentary For well over a century, the systemic dismantling of traditional education is an essential objective of transforming America into a despotic dependency. Education is a process, not an indoctrination. Schools should be about tutoring in the methods of critical thinking. Sound techniques and competent teachers can assist learning development. However, it has been decades since public schools provided a positive function.
An Insurer’s New Approach to Diabetes By REED ABELSON - NYTimes.com This could be one glimpse of the future of health insurance. The UnitedHealth Group, one of the nation’s largest health insurers, is teaming up with the Y.M.C.A. and retail pharmacies to try a new approach to one of the nation’s most serious and expensive medical problems: Type 2 diabetes. Rather than simply continuing to pay ever-higher medical claims to care for its diabetic customers, UnitedHealth is paying the Y.M.C.A. and pharmacists to keep people healthier. The result, they hope, will be lower costs and lower premiums for everyone.
Diet found to cut risk of Alzheimer's By Jennifer Harper - WashingtonTimes.com Cruciferous vegetables cited Take those salads seriously. A team of medical researchers from Columbia University Medical Center has identified a "protective diet" that lowers the risk of Alzheimer's disease, according to research released Monday in the Archives of Neurology, a publication of the American Medical Association. "We identified a dietary pattern that was strongly protective against the development of Alzheimer's disease," the researchers said. "The results of the current study indicate that higher consumption of certain foods (salad dressing, nuts, fish, tomatoes, poultry, cruciferous vegetables, fruits, dark and green, leafy vegetables), and lower of others (high-fat dairy, red meat, organ meat and butter) may be associated with a decreased risk of developing Alzheimer's." For the veggie-challenged, the "cruciferous" variety includes kale, broccoli, cauliflower, brussels sprouts and cabbage. "Dark and green" means just that: Romaine lettuce, spinach, watercress and collard greens.
Despite Ruling, F.C.C. Says It Will Move Forward on Expanding Broadband By EDWARD WYATT NYTimes.com -- WASHINGTON — The chairman of the Federal Communications Commission told a Congressional panel on Wednesday that a recent court ruling that the agency lacked authority to regulate the Internet should not prevent it from carrying out its plan to broadly expand the country’s high-speed Internet service. But the chairman refused to say if the commission would try to reclassify Internet service as a utility similar to telephone service to overcome the court decision, a move that some Democratic senators supported but that several Republican senators strongly warned against.
L.A. council refuses to freeze police hiring as city layoff plans proceed -- LATimes.com -- The Los Angeles City Council voted Wednesday to reject a plan to freeze hiring in the Los Angeles Police Department over the next three months, even as personnel officials continue preparing to lay off as many as 383 civilian workers July 1. The council sent the issue to a committee for more study, a move that would allow 90 officers to be hired by June 30 to replace those who plan to retire or resign. That vote came a few hours after Personnel Department officials told the council that they were moving ahead with plans to lay off at least 100 workers apiece in the Library Department and the Department of Recreation and Parks because of the city's budget crisis.
Library of Congress to house Twitter data SAN FRANCISCO BUSINESS TIMES - BY Patrick Hoge The Library of Congress will house Twitter Inc.'s archives of the billions of tweets that users broadcast on its micro-messaging platform, the company said Wednesday, the first day of its "Chirp" developer conference at the Palace of Fine Arts Theatre in San Francisco. Twitter co-founder Biz Stone said in a company blog post that the Library of Congress, which collects copies of books, pamphlets, maps, prints, and sheet music registered in the United States, had "signaled to us that the public tweets we have all been creating over the years are important and worthy of preservation."
Arizona's immigration strategy: Make life tough By Nicholas Riccardi and Ashley Powers - LATimes.com The bill passed this week reflects the government's belief that illegal immigrants will leave or stay away if conditions are harsh enough. Critics say it doesn't work. Reporting from Phoenix and Tucson For years Arizona's government has tried to deter unlawful immigration with a consistent approach -- make life for illegal immigrants so uncomfortable and uncertain that they will leave, or never come in the first place. So this week, when the House of Representatives passed what's viewed as the toughest state law against illegal immigration in the nation, it was the continuation of a pattern that has been widely popular in the state.
What's really behind the Toyota debacle By Alex Taylor III (Fortune) -- At 77, Hiroshi Okuda, chairman of Toyota, is still causing trouble for the automaker. He is being painted, most recently in Wednesday's Wall Street Journal, as both the architect of a global expansion that proved ruinous and an enemy of the Toyoda family. But blaming Okuda for what has gone wrong at Toyota (TM) recently hardly gets to the root cause of the company's problems. For that, Toyota executives will have to look deeper into themselves. If they are diligent, they will find an anachronistic management structure that has proved inefficient and counterproductive, and could be potentially ruinous.
'Twilight' Series on List of 'Most Complained About' Books By Hillel Italie, Associated Press - CNSNews.com New York (AP) - Stephenie Meyer, the hottest author for young people since J.K. Rowling, has a new link to the creator of "Harry Potter": a place high on the list of books most complained about by parents and educators. Meyer's multimillion-selling "Twilight" series was ranked No. 5 on the annual report of "challenged books" released Wednesday by the American Library Association. Meyer's stories of vampires and teen romance have been criticized for sexual content; a library association official also thinks that the "Twilight" series reflects general unease about supernatural stories.
Tea Party Contract From America: The Huffington Post | Elyse Siegel Activists Unveil 'Blueprint For 2010 And Beyond' Tea Party groups across the country unveiled the movement's "Contract from America" on Wednesday, one day before proponents plan to rally and protest in honor of Tax Day. The "Contract from America" is the Tea Party activists' "legislative blueprint for 2010 and beyond" -- a document of ten principles and priorities outlining the movement's agenda for the road ahead. Who was responsible designing the "Contract?" According to the coalition behind its construction, "Grassroots activists from across the country visited the website to choose their top ten priorities from a list of 21 action items that committed Americans from all walks of life proposed. The top ten issues comprise the final Contract." Below -- a slideshow of the ten principles outlined in Tea Party's contract:
Mitt Romney-Sarah Palin in 2012? You betcha! By Edward Mason, Hillary Chabot and Jessica Van Sack - BostonHerald.com -- Conservative superstar Sarah Palin opened the door today to joining forces with Mitt Romney for a 2012 White House run - a hot ticket that has some Republicans licking their chops at the prospect of unseating President Obama. “Sounds pretty good,” Palin declared at today’s Tea Party Express rally on the Common when asked about pairing up with the former Bay State governor - giving the idea a big thumbs-up as she left the stage after her headline speech. Earlier tonight, as Palin stopped for cannoli at Mike’s Pastry in the North End, she said she was “serious” about the idea. “I have a lot of respect for Mitt,” she told the Herald.
Tea Party Movement Mirrors a Deeply Divided America By Marc Hujer and Thomas Schulz - AFP US President Barack Obama came to power promising to unite the nation. Now he has divided it even more than his predecessor George W. Bush. The burgeoning conservative Tea Party movement is calling for Obama to be removed from office. The auditorium in Tulsa, Oklahoma is silent for a moment, as the Walkers, a happy couple in their mid-50s, walk onto the stage. They manage an electrical store in the area, and they say that after being married for decades, they still love each other just as much as they did on the first day. They are here to demonstrate that love to the audience -- with a passionate kiss.
Alinsky's Avenging Angels: Tea Party Saboteurs By Michelle Malkin - CNSNews.com One of the popular signs spotted at Tea Party protests across the country over the past year goes like this: "It doesn't matter what this sign says. You'll call it racism, anyway!" It's a pithy, perfect rejoinder to the fusillade of attacks that limited-government activists have weathered from their Democratic detractors and a hostile national media. Committed Alinsky-ites never let reality get in the way of a good Tea Party-bashing narrative.
Obama to the World: Damn America, Full Speed Ahead By Ben Shapiro - CNSNews.com In February 1945, three world leaders-FDR, Stalin and Churchill-gathered in Yalta, in Crimea, to discuss the fate of post-war Europe. At that conference, FDR signed away half of Germany, all of Poland, enslavement of the German population to the Soviet Union. While the conference suggested that liberated countries would be granted free elections, no enforcement mechanism was put in place, so the Soviets effectively annexed every piece of land they occupied. FDR insisted he had not been duped. "Poor Neville Chamberlain believed he could trust Hitler," FDR said days after the conference. "He was wrong. But I don't think I'm wrong about Stalin." FDR was wrong about Stalin, of course. But he had reason to be wrong-he had been misinformed by his own supposed allies. Soviet agent Alger Hiss worked as part of the American delegation at Yalta; communist superspy Kim Philby and the rest of the so-called "Cambridge Five" funneled papers from the British and the Americans regarding their positions on Poland.
'Hungary has Turned into a Grubby Hive of Nationalism' Media commentators in Germany are alarmed at the emergence of the far-right Jobbik party as the third-strongest force in the Hungarian parliament. Europe should pay more attention to the vicious xenophobia and political polarization wracking the country 20 years after it gained its freedom, editorials say. The people of Hungary shifted to the right in their general election on Sunday, evicting the Socialists from government after eight years, handing the center-right Fidesz party of Viktor Orban a strong mandate to form a government and making the far-right Jobbik party the third-strongest force in parliament. The Socialist government, led by technocrat Gordon Bajnai since April 2009, was punished for making painful budget cuts to rein in the deficit under a bailout led by the International Monetary Fund. Orban too will need to implement reforms to keep the country on track for growth.
Nuclear Summit Part of Obama Administration's 'Fantasy Foreign Policy,' Newt Gingrich Says By Penny Starr, Senior Staff Writer - CNSNews.com -- (CNSNews.com) - Former House Speaker Newt Gingrich characterized this week's nuclear summit in Washington as a "charade" that reveals the Obama administration's "fantasy foreign policy." "When you can give a speech on nuclear disarmament while the North Koreans are proving on the same day - deliberately - that they have no interest in your policy" -- that's fantasy, Gingrich told journalists at an Americans for Tax Reform gathering in Washington on Tuesday.
US Military Warns Of Oil Shortages By 2015 With Significant Economic And Political Impact, Especially On Weak Countries, India And China Submitted by Tyler Durden - ZeroHedge.com -- A report issued by the US Joint Forces Command has a rather bleak view on US oil production, and on peak oil in general. In a foreword to the report issued by General James Mattis, he warns that "By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 million barrels per day." Does this mean that oil, just like in the Bush administration, is about to become a "strategic interest", which coupled with the upcoming discoveries of non-existent weapons of mass destruction, would result in some additional geopoltical tensions particularly in the middle east? With nuclear tensions between Iran and Israel already at boiling hot levels, will Uncle Sam decide to make landfall in the Persian Gulg once again?
Experts On Third World Banana Republics: washingtonsblog.com The U.S. has Become a Third World Banana Republic Who are the leading experts on third world banana republics? Probably those at the International Monetary Fund with years of experience lending money to corrupt regimes after their excess became so out of hand that they needed emergency assistance. Today, two top IMF officials said that the U.S. has become a third world banana republic. First, Simon Johnson, former chief economist of the IMF, says recovery will fail unless we break the financial oligarchy that is blocking essential reform, and calls the U.S. a banana republic. In his essay "The Quiet Coup" (which includes sections like "Becoming a Banana Republic"), Johnson writes:
What Obama's Nuclear Weapons Conference Missed By William Pfaff The meeting on nuclear security convoked by Barack Obama this week was meant to prevent nuclear proliferation. This is a worthy cause, but-while I am writing before the meeting closes-I would assume that it will at best produce empty promises, as the meeting itself is fatally flawed. Its conceptual basis is that the United States is a disinterested world leader, calling on others to do what is self-evidently in the general interest. This is not true. The underlying incitement to nuclear proliferation is the permanent veto exercised over Security Council decisions by the five nuclear-armed permanent members, a result of the Second World War and now widely considered unfair or outdated. It nonetheless is unlikely to change.
Obama Phrase Highlights Shift on Middle East By MARK LANDLER and HELENE COOPER NYTimes.com -- WASHINGTON — It was just a phrase at the end of President Obama’s news conference on Tuesday, but it was a stark reminder of a far-reaching shift in how the United States views the Israeli-Palestinian conflict, and how aggressively it might push for a peace agreement. When Mr. Obama declared that resolving the long-running Middle East dispute was a “vital national security interest of the United States,” he was highlighting a change that has resulted from a lengthy debate among his top officials over how best to balance support for Israel against other American interests.
U.N. Jurist Calls for Pope to be Tried in International Court By Matt Cover, Staff Writer - CNSNews.com (CNSNews.com) - A United Nations jurist and former war crimes judge has called for the "full weight" of international law to be brought against Pope Benedict XVI because of sexual abuse cases involving some Catholic priests, calling into question the Vatican's claim that the pope is immune from legal proceedings because he is a head of state. The judge, British human rights lawyer Geoffrey Robertson, is currently a member of the U.N. Internal Justice Council and a former appellate judge on the U.N Special Court for Sierra Leone. Robertson said that the Vatican "should feel the full weight of international law" in an April 2 commentary in Britain's The Guardian.
Russia's Encounter With Islam By PAUL B. HENZE, S. ENDERS WIMBUSH - WSJ.com In the 19th century the Russian empire was home to some of the most progressive Muslim thinkers in the world. Then Lenin arrived. When bombs killed 40 people in Moscow's metro in late March, Russians received another poignant reminder of an increasingly likely future. These bombings were preceded by at least six similar outrages since 1996, all targeted at public transportation. All have been blamed on or claimed by Islamic militants. After the latest bombings, President Dmitry Medvedev promised that "We will find and destroy them all," echoing similarly empty promises by his predecessor Vladimir Putin, now Russia's prime minister.
Poland's Leaders Move to Weaken Currency, Then Die in Plane Crash Government Against The People There's no telling if the two events are connected, but their timing is mighty interesting. The Polish government and the National Bank of Poland, in a "rare moment of unity," agree to weaken Poland's currency, the zloty, in an act that would benefit Poland's exporters at the expense of Poland's trading partners-that is, the European Union, among others. Then, the next day, Poland's president and the president of its national bank die in a plane crash.
Poland Pulls Trigger to Weaken Zloty By Marcin Sobczyk In one of those rare moments of unity, the National Bank of Poland and the Polish government agreed on the need to weaken the Polish zloty, which over recent weeks has rebounded close to its precrisis strength. The currency's strength is now seen a possible threat to economic recovery. After several verbal interventions over the past few days, the central bank intervened with real money Friday, for the first time in more than a decade.
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Debt commission's dilemma: slash funds or raise taxes By Stephen Dinan - WashingtonTimes.com Postponements and taxes and cuts - oh my! The choices facing President Obama's debt commission when it begins meeting later this month are obvious, but just as obviously unpalatable to voters who are not certain how big the problem is. "The basic challenge is political in that we've gotten to a situation where the spending promises we've made can't be financed with the levels of taxation we've agreed upon," said Robert L. Bixby, executive director of the Concord Coalition, a long-standing bipartisan budget watchdog group. "Getting out of that dynamic requires either cutting back on the spending promises or raising taxes. Those are politically explosive choices."
The Real Reason Banks Won’t Modify Your Loan and It Involves Grandma’s Pension Steve Dibert, MFI-Miami Exclusive I began working on this project last year at the peak of the modification frenzy and finished it about a month ago. I originally planned on posting it last week on the eve of the Mortgage Servicers Convention in Dallas. I decided hold off because I didn’t want to ruin the fun of the champagne fueled Conga lines or the Mad Men style skirt chasing that usually goes on at conventions sponsored by the financial services industry. The findings of my year-long investigation would have put everyone into a panic mode and stopped the flow of the Dom Perignon for the Conga lines and the awkward moments at the water cooler this week and replaced it with Tums and Roll-Aids. So in the spirit of not to be a party pooper and in an effort to create a distraction for those employees who may have had “too much fun” I decided to wait.
Second Whistleblower Emerges - by Tyler Durden - ZeroHedges.com A Deep Insider's Walkthru To Silver Market Manipulation A second whistleblower speaks. As the topic of physical delivery has gained prominent attention recently, it is crucial to complete the circle and show how this weakest link in the PM market is (ab)used by the big boys: Phibro and Warren Buffet. Pay particular attention to the analogues between the methods employed in the 90's commodity market and how the PM (and equity) market is being gamed currently.
Whistle Blower Comes Forward With Solid Proof theeconomiccollapseblog.com The Price Of Gold And Silver Is Being Manipulated By Major Financial Institutions For a long time many of us have had very serious suspicions that the prices of gold and silver were being highly manipulated. But now, thanks to the mind blowing testimony of one very brave whistle blower, the blatant manipulation of the world gold and silver markets is being blown wide open. What you are about to read below is absolutely staggering. Once the American people learn how incredibly corrupt the world financial system is, it is going to change everything. The government that we are all trusting to guard the integrity of the financial system is failing to do that job. It turns out that the Commodities Futures Trading Commission has been sitting on solid evidence that the elite banking powers have been openly and blatantly manipulating the price of gold and silver. Even though they were basically handed a "smoking gun", they have done absolutely nothing with it. But now the information has gone public and the CFTC is red-faced.
Peak gold to fuel yellow metal prices By Marc Davis The inexorable onset of accelerating inflation, matched with a global decline in gold production, will underpin high-flying gold prices for years to come. So says John Embry, a world-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. “As inflation rears its ugly head and future demand for gold promises to overwhelm mine supply, gold’s price will launch a parabolic rise from current levels in the near future,” he says. “Gold has much, much further to go.”
Gold Advances as Dollar Weakens; Palladium at Two-Year High By Kim Kyoungwha April 14 (Bloomberg) -- Gold climbed, snapping a two-day decline, as the dollar weakened, improving the metal’s appeal as an alternative investment. Palladium soared to the highest level since March 2008. Gold for immediate delivery rose 0.4 percent to $1,155.57 an ounce at 11:30 a.m. in Singapore. The Dollar Index, a six- currency gauge of the dollar’s value, fell for a fourth day on expectations for the Federal Reserve to keep interest rates low. “Gold’s day-to-day ups and downs will continue to be driven by institutional traders and speculators,” Jeffrey Nichols, senior economic adviser to Rosland Capital, wrote in a note. “Despite short-term volatility, we believe gold remains in a strong rising uptrend” that will drive the metal to $1,500 an ounce by year-end, he said.
Falling output, debased dollar and inflation will keep gold high for years Author: Marc Davis - MineWeb.net The rally in bullion prices is far from over but merely in a consolidation phase says John Embry VANCOUVER, BC (BNW NEWS) - The inexorable onset of accelerating inflation, matched with a global decline in gold production, will underpin high-flying gold prices for years to come. So says John Embry, a world-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. "As inflation rears its ugly head and future demand for gold promises to overwhelm mine supply, gold's price will launch a parabolic rise from current levels in the near future," he says. "Gold has much, much further to go."
Gold in old & new Greek tragedy! By Geena Paul - CommodityOnline.com MUMBAI (Commodity Online): Greek literature boasts three great writers of tragedy: Aeschylus, Sophocles, and Euripides in the olden days. But, now Greek tragedy has nothing to do with literature. It is all about money or rather Euro. In the ancient days, the largest festival for Greek tragedy was the Dionysia held for five days in March or April, for which prominent tragedians usually submitted three tragedies and one satyr play each. In 2010, Greek Tragedy is again performed in March-April with three major players like Germany, France and Greece.
Gold Reserves: Tough for China to beat US BEIJING (Commodity Online): China is on a gold buying spree these days. The Chinese central bank—the People’s Bank of China—is taking a series of steps to increase its gold reserves to ensure that the precious yellow metal replaces forex reserves held in the US dollar. Chinese people in cities, small towns and rural areas are buying gold jewellery, gold coins and gold bars for investment like never before. Gold jewellery showrooms are mushrooming across the Chinese hinterland.
Preparations Being Made To Move Fort Knox Gold Into Your Bank Account by Bill Sardi - LewRockwell.com You hear the call to "End The Fed," but just exactly what would be substituted in its place? Imagine if I told you that all the gold in Ft. Knox, which was confiscated from Americans early in the 20th century, is about to be transferred to your bank account in an apportionment equal to the amount of banked money in your checking, savings or deferred-tax 401k accounts. Imagine this – you would own real gold. Depositors would receive paper IOUs stating their money on account is now fully backed by gold coins held in the vault of your bank. How does this sound to you? Furthermore, the bank that houses your money would no longer be reliant upon a central bank (The Federal Reserve) for its supply of money, an agency that has taken a profit off the top of every money transaction since its inception in 1913, nor would your bank offer you phony deposit insurance that simply leaves the public (you) on the hook to pick up the tab for irresponsible bankers.
Several ProShares Short ETFs Are Going to Have Reverse Splits This Week JESSE'S CAFÉ AMÉRICAIN The 'deflation trade' has been a tough row to hoe for the past year or so, compliments of the Fed's Balance Sheet. It has been SO bad, that nine Proshares 'short ETFs' are going to have substantial reverse splits this week. ProShares announced that it will execute reverse share splits on nine ProShares ETFs.
GATA's Chris Powell Weighs In On Sprott The IMF, And The Missing Gold Vince Veneziani - BusinessInsider.com Last week, we gave you the International Monetary Fund's view of why it wouldn't sell investor Eric Sprott gold from its fund. Mostly, the Fund pointed to following protocol and saying that its available gold can only be sold to central banks or sovereign nations. Then we contacted Mr. Sprott himself to find out his side of the story, which was starkly different from the IMF's rhetoric. Sprott believes the IMF doesn't have all the physical gold it claims it has and that these deliveries to the central banks that have bought gold from the IMF are all just bookkeeping fallacy. He believes the price of gold is being suppressed.
If The Money Supply Is Exploding theeconomiccollapseblog.com Why Are We Not Seeing Rampant Inflation? The U.S. money supply has been expanding at an absolutely unprecedented rate. So why are we not experiencing rampant inflation? Why is the U.S. dollar not falling through the floor? Well, the truth is that all of this new money has gotten into the U.S. financial system but it is not getting into the hands of U.S. businesses and consumers. In fact, even though the money supply is exploding, U.S. banks have dramatically decreased lending. This has brought us to a very bizarre financial situation as a nation. What we have seen is the U.S. government shovel massive amounts of cash into the U.S. financial system and then watch as the big banks sit on that cash and refuse to lend it. The biggest banks in the U.S. reduced their collective small business lending balance by another 1 billion dollars in November 2009. That drop was the seventh monthly decline in a row. In fact, in 2009 as a whole U.S. banks posted their sharpest decline in lending since 1942.
China spoils Barack Obama's nuclear success By Alex Spillius - Telegraph.co.uk Barack Obama’s success in reaching a broad international agreement on securing the world’s stocks of nuclear weapons material was dented after the Chinese failed to commit to a strong set of new sanctions on Iran The two-day Nuclear Security Summit in Washington brought 46 other nations and three major international agencies under one roof to sign a pledge to put highly enriched uranium under lock and key within four years to stop terrorists from creating a nuclear weapon. “Today is an opportunity, not simply to talk, but to act — not simply to make pledges, but to make real progress on the security of our people,” said Mr Obama.
Gold price is caught in an explosive move By Howard S. Katz - CommodityOnline.com The explosive move in gold which I have been predicting for some months is now under way. He who hesitates is not lost, but he does make smaller profits. You have undoubtedly heard of the death of a thousand cuts. You now face the death (of your profit) by a thousand decisions to do nothing. But first, let us review the art of speculation.
Obama Says He Told Chinese Leader Hu That Yuan Is ‘Undervalued’ By Edwin Chen and Rob Delaney -- April 14 (Bloomberg) -- President Barack Obama said the U.S. considers China’s currency to be “undervalued” and that currencies should “roughly” track the market so that no country has an advantage in trade. The U.S. and China, as part of the Group of 20 nations, have agreed that a rebalancing is needed to sustain global economic growth, Obama said at a news conference yesterday at the conclusion of a nuclear security summit in Washington. He said he conveyed the U.S. position that China’s currency should have a more market-based valuation in a meeting April 12 with Chinese President Hu Jintao.
Geithner Says China ‘Effectively Lets’ U.S. Set Rates By Ian Katz April 13 (Bloomberg) -- U.S. Treasury Secretary Timothy F. Geithner said China is likely to move toward a more flexible currency because its practice of pegging the yuan to the dollar limits that nation’s ability to conduct monetary policy. “As a strong, large, independent, growing economy, it doesn’t make sense for that country to run a monetary policy exchange-rate regime that effectively lets the Federal Reserve set interest rates for their economy,” Geithner said at an American Society of News Editors conference in Washington today. “That’s why I think -- why I’m confident that they’re going to move.”
Chinese President Rejects U.S. Calls to Let Yuan Rise By DAN BURROWS - DailyFinance.com Chinese President Hu Jintao (pictured) rejected President Barack Obama's call to let the yuan appreciate against the dollar, saying the two nations "should respect each other's core interests and major concerns," and affirmed that his country's monetary policy won't be swayed by "external pressure." Critics charge that the artificially low yuan-dollar exchange rate helped create the financial crisis and is exacerbating high U.S. unemployment. By keeping its currency pegged to the dollar at a low level, China has fed global trade imbalances and in effect siphoned off jobs from other countries, some high-profile lawmakers and scholars argue.
Spotlight Complicates China Steps on Currency By KEITH BRADSHER - NYTimes.com HONG KONG — Even as China’s leaders appear to have reached a consensus that the nation’s currency policy must change, the timing of any shift has been complicated by surging nationalism, a media frenzy in China over the issue and visits by top officials on each side to Beijing and Washington in recent days. China has spent several trillion renminbi over the past 21 months to prevent its currency from rising against the U.S. dollar. American lawmakers have become increasingly critical of the policy, complaining that it keeps Chinese exports artificially cheap.
Currency manipulation: Geithner to China
China May Post 11.7% Growth Adding Pressure on Rates, Yuan Peg By Bloomberg News April 14 (Bloomberg) -- China’s economy may have expanded 11.7 percent in the first quarter, the fastest pace in almost three years, making officials more likely to raise interest rates and scrap the yuan’s peg to the dollar. The median estimate in a Bloomberg News survey of 24 economists compares with a 10.7 percent gain in the previous quarter from a year earlier. The Asian Development Bank yesterday urged policy makers in the region to raise interest rates to prevent inflation from accelerating and avert asset bubbles. China, accused by some U.S. lawmakers of holding the yuan’s value down to secure an unfair advantage in trade, is likely to let the currency’s gains resume by June 30, a Bloomberg News survey of economists showed.
Sweden’s Cradle-to-Grave State Means Bad Stats Affect Everyone By Johan Carlstrom, Niklas Magnusson and Marybeth Sandell -- April 13 (Bloomberg) -- Everyone is allowed one mistake. In Sweden, the Statistics Office has made so many the biggest morning newspaper taunted it with the picture “2 + 2 = 3.” The agency calculates inflation and incomes that form the basis for making payouts for pensions, unemployment and parental leave. With more than half of all Swedes cashing state checks in the country’s cradle-to-grave social system, mistakes get noticed. The government and central bank use the numbers for their own forecasts and decisions. More than 10 percent of 71 statistical reports published in February and March were corrections, fueling mistrust among economists such as Robert Bergqvist of Stockholm-based SEB AB, the largest domestic bank by revenue.
FDIC Seeks to Charge Big, Risky Banks Higher Fees By MICHAEL R. CRITTENDEN - WSJ.com WASHINGTON—Some of the largest U.S. banks would have to pay higher government fees under a proposal that federal regulators are considering to discourage risky behavior by big financial institutions. The Federal Deposit Insurance Corp.'s five-member board approved a preliminary proposal Tuesday that would alter the way the agency assesses deposit-insurance fees for banks with more than $10 billion in assets. Regulators would use new financial measures to gauge a bank's risk profile and how the bank would deal with financial stresses. Those determined to be more risky, or which would cost the FDIC more if they were to fail, would have to pay more to the government.
Big Banks Draw Big Profits From Microloans to Poor By NEIL MacFARQUHAR - NYTimes.com In recent years, the idea of giving small loans to poor people became the darling of the development world, hailed as the long elusive formula to propel even the most destitute into better lives. Actors like Natalie Portman and Michael Douglas lent their boldface names to the cause. Muhammad Yunus, the economist who pioneered the practice by lending small amounts to basket weavers in Bangladesh, won a Nobel Peace Prize for it in 2006. The idea even got its very own United Nations year in 2005.
12 Reasons Americans Are Incredibly Angry About The State Of The U.S. Economy theeconomiccollapseblog.com We have reached a very interesting turning point in American history. More than at any other point in modern times, Americans are deeply angry about the state of the economy. In fact, it is no stretch to say that millions of U.S. citizens are hopping mad about the economic situation. Most of them don't know exactly what is wrong, and even fewer of them have any idea about how to go about fixing things, but they do know one thing. They know that they are mad. As Americans, we were raised with the belief that our overwhelmingly powerful economic machine would always provide good jobs and prosperity for all of us as long as we worked hard. But we have come to learn that is not true. We have come to learn that our politicians and our leaders have squandered the great inheritance that our forefathers left for us. We have come to learn that the financial future of our nation is beyond bleak. We have come to learn that our government has piled up the biggest mountain of debt in the history of the world. Now the foolish decisions of the past several decades are catching up with us. The U.S. economy is experiencing structural failure, and the American people are angry. They want answers. They want someone to fix things. They want things to go back to the way they used to be.
W-2 WTF?!?!: Tax Facts to Make Your Head Explode!
Banks Fight to Block Rules By DAMIAN PALETTA And SCOTT PATTERSON - WSJ.com Democrats Push Restrictions on Derivatives Trading; Showdown Looms in Senate WASHINGTON—Wall Street giants Goldman Sachs Group Inc., J.P. Morgan Chase & Co., and Morgan Stanley have launched a last-ditch effort in Congress to fight changes to financial regulation that would squeeze their lucrative derivatives-trading businesses. But the bankers' efforts appear to be faltering in the face of strong pressure on key congressional Democrats from the Obama administration. That's drawing Republican complaints that the pending rewrite of the rules of finance will put the economy at risk.
Big Banks Draw Big Profits From Microloans to Poor By NEIL MacFARQUHAR - NYTimes.com In recent years, the idea of giving small loans to poor people became the darling of the development world, hailed as the long elusive formula to propel even the most destitute into better lives. Actors like Natalie Portman and Michael Douglas lent their boldface names to the cause. Muhammad Yunus, the economist who pioneered the practice by lending small amounts to basket weavers in Bangladesh, won a Nobel Peace Prize for it in 2006. The idea even got its very own United Nations year in 2005.
Moody’s: Citigroup Still ‘Too Big To Fail’ For Now By Damian Paletta - WSJ.com Even though the Obama administration is trying to sell idea that the era of “too big to fail” is over, some in the market still aren’t buying it. Case in point: Citigroup Inc. Moody’s on Monday said in its “Weekly Credit Outlook” that the Treasury Department’s planned sale of its 7.7 billion shares of Citigroup this year doesn’t mean the government would remove its implicit support of the company if Citigroup were to fall into trouble again.
Money Out Of Thin Air: theeconomiccollapseblog.com Now Federal Reserve Chairman Ben Bernanke Wants To Eliminate Reserve Requirements Completely? Up until now, the United States has operated under a "fractional reserve" banking system. Banks have always been required to keep a small fraction of the money deposited with them for a reserve, but were allowed to loan out the rest. But now it turns out that Federal Reserve Chairman Ben Bernanke wants to completely eliminate minimum reserve requirements, which he says "impose costs and distortions on the banking system". At least that is what a footnote to his testimony before the U.S. House of Representatives Committee on Financial Services on February 10th says. So is Bernanke actually proposing that banks should be allowed to have no reserves at all?
Welcome to Zimbabwe by Doug French - Mises.org [Speech given on April 10, 2010, in Phoenix, Arizona, at The Inflationary Path to Despotism (Mises Circle, Sponsored by James M. Rodney)] If you follow economic affairs at all, you know who Ben Bernanke is. He's the chairman of the Federal Reserve. He was Time's 2009 "Man of the Year." CBS News said he may be the most important Fed chairman in history when Scott Pelley interviewed him for the highly watched 60 Minutes program. Bernanke's an expert on The Great Depression, and famously said, back in 2002. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.
Washington Mutual wasn't 'clubby' enough to save, claims former chief Andrew Clark - guardian.co.uk -- Seattle-based Washington Mutual was seized by regulators at the height of the financial meltdown in September 2008 A cosy circle of American regulators and Wall Street executives operated a "too clubby to fail" policy of protecting huge investment banks at the expense of high street players, according to a bitter attack on the US government's conduct by the former boss of the ill-fated savings bank Washington Mutual. Seattle-based Washington Mutual, widely known as WaMu, was seized by regulators at the height of the financial meltdown in September 2008, becoming America's biggest commercial banking failure on record. But its former chief executive, Kerry Killinger, claimed to Congress that its closure was an unjustified act by a self-serving elite.
Former WaMu CEO Blames Wall Street 'Club' By JOHN D. MCKINNON, DAN FITZPATRICK - WSJ.com Senators Begin Hearings as Regulators Remain Reluctant to Detail Their Handling of Collapse WASHINGTON—Former Washington Mutual Inc. Chief Executive Kerry Killinger scoffed at lawmakers who blamed him for the largest bank failure in U.S. history, accusing regulators of helping only financial institutions deemed "too clubby to fail." The 60-year-old Mr. Killinger's defiant, two-hour testimony at Tuesday's hearing by the Senate Permanent Subcommittee on Investigations was marked by confrontations with lawmakers who claimed he repeatedly ignored warnings that the overinflated real-estate bubble was about to burst. But the former CEO held his ground, insisting the Seattle thrift's seizure in September 2008 could have been avoided if regulators had offered the same help given to other battered banks, including capital infusions.
Warren on SCOTUS ABC's Z. Byron Wolf reports: One dark horse candidate for the Supreme Court seat to be vacated this summer by John Paul Stevens is Elizabeth Warren, the Harvard Law School professor and consumer watchdog who chairs the panel set up by Congress to oversee the TARP Wall Street Bailout.
Supreme Discussion
Obama casts wide net with list of possible Supreme Court nominees By James Oliphant and Christi Parsons - LATimes.com Advisors are calling for a nontraditional choice to replace Justice John Paul Stevens, someone who isn't a product of top-tier Ivy League schools or hasn't worked as a federal appeals judge. The White House list of potential nominees to fill the latest vacancy on the Supreme Court comprises an ethnically and geographically diverse group of at least 10 candidates, including established jurists and politicians, moderates and progressives. The list includes a sitting governor, Jennifer M. Granholm of Michigan, and a Cabinet secretary, Janet Napolitano of the Homeland Security Department.
Morgan Stanley Property Fund Faces $5.4 Billion Loss By ANTON TROIANOVSKI And LINGLING WEI -WSJ.com Morgan Stanley has told investors in its $8.8 billion real-estate fund that it may lose nearly two-thirds of its money from bum property investments, according to fund documents reviewed by The Wall Street Journal. That would likely make it the biggest dollar loss—$5.4 billion—in the history of private-equity real-estate investing. Over the past 20 years, Morgan Stanley's real-estate unit was one of the biggest buyers of property around the world, doing some $174 billion in deals since 1991, mostly with money raised from pension funds, college endowments and foreign investors. The losses come from investments in properties such as the European Central Bank's Frankfurt headquarters, a big development project in Tokyo and InterContinental hotels across Europe, among others.
The Silent Entitlements Monster: theeconomiccollapseblog.com Social Security, Medicare And Interest On The Debt Will Gobble Up Every Single Tax Dollar By 2020 There is a silent monster that looms menacingly over U.S. government finances. Every politician knows about it, but very few of them ever want to talk about it. This silent monster grows larger every year, and yet nobody seems to know quite what to do about it. Those who have closely analyzed this monster all seem to agree that one day it will create a financial tsunami of a magnitude that is absolutely unprecedented, but there is vast disagreement about how to escape this financial tsunami or if it is even possible to escape it. The name of this monster is "entitlements" - Social Security, Medicare and other social Ponzi schemes that the U.S. government has locked itself into funding. It would be hard to understate the seriousness of the problem that entitlements present. In fact, according to an official U.S. government report, rapidly growing interest costs on the national debt together with spending on major entitlement programs will absorb approximately 92 cents of every dollar of federal revenue by the year 2019. By 2020, that figure will be up around 100 cents of every dollar of federal revenue. So that means that interest on the debt and spending on entitlement programs will eat up everything the U.S. government takes in before a penny is spent on anything else. That is a recipe for national financial suicide.
FDIC Proposes New Fee System, Extends Deposit-Insurance Program By MICHAEL R. CRITTENDEN And DAMIAN PALETTA - WSJ.com -- WASHINGTON—The largest U.S. banks could end up paying the government higher fees under a proposal being considered by federal regulators eager to discourage risky behavior by the nation's largest financial institutions. The Federal Deposit Insurance Corp.'s five-member board approved a preliminary proposal Tuesday that would alter the way the agency assesses deposit insurance fees for banks with more than $10 billion in assets. Regulators would use new financial measures to gauge a bank's risk profile and how the bank would deal with financial stresses. Those determined to be more risky, or which would cost the FDIC more if they were to fail, would have to pay more to the government.
The FCIC: Passing the Buck by Ron Paul - LewRockwell.com Last week the federal government’s Financial Crisis Inquiry Commission held hearings as part of their continuing investigation into the causes of the acute economic meltdown which occurred in late summer 2008. This bipartisan commission, partly inspired by the Pecora Commission – which investigated the causes of the Great Depression – is expected to report back to Congress before the end of the year. Things don’t seem to be going well. The individuals questioned by the commission mostly seem to be diverting blame for the whole fiasco to someone else. Nobody is offering any tangible insights into the causes of the financial crisis.
Banking execs raise fairness issue on mortgage reductions By Alan Zibel, AP Real Estate Writer - USAToday.com -- WASHINGTON — Top banking industry executives are skeptical about helping troubled borrowers by forgiving a portion of their debt. The executives told lawmakers on Tuesday they are reducing the amount that troubled borrowers owe on their home loans only in limited cases. That's because consumers who are paying their mortgages on time are likely to see such reductions as unfair, the executive said. Such programs "could raise issues of fairness," agreed Sanjiv Das, Citigroup's top mortgage executive. The pair appeared in front of the Senate committee with top executives from Bank of America and Wells Fargo.
Is The United States Headed For A Commercial Real Estate Crash Of Unprecedented Magnitude? theeconomiccollapseblog.com -- Will commercial real estate be the next shoe to drop in the ongoing U.S. financial crisis? While most eyes are on the continuing residential real estate disaster, the reality is that the state of the commercial real estate market in America could soon be even worse. Very few financial pundits are talking about this looming disaster but they should be. The truth is that U.S. commercial property values are down approximately 40 percent since the peak in 2007 and currently approximately 18 percent of all office space in the United States is now sitting vacant. That qualifies as a complete and total mess, but the reality is that the commercial real estate crisis is just starting.
Small-Business Confidence in U.S. Dropped in March By Shobhana Chandra April 13 (Bloomberg) -- Confidence among U.S. small businesses fell in March to the lowest level since July 2009 as executives grew more concerned about earnings and sales, a private survey found. The National Federation of Independent Business’s optimism index dropped to 86.8 last month from 88 in February, the Washington-based group said today. Seven of the index’s 10 components declined last month and two were unchanged from February.
WHY INFLATION IS CATASTROPHIC !!! WIPE OUT MIDDLE CLASS !!! RON PAUL
The Fight for the Middle Class: Obama's Mortgage Relief Program Isn't Working By DAVID MUIR - ABCNews.com Millions Remain Underwater, But Banks Say They're Doing Enough to Help Homeowners President Obama's plan to help the 11 million Americans whose homes are underwater isn't working, according to a new report that will be released tomorrow on Capitol Hill by the Congressional Oversight Panel. The plan called for banks to adjust mortgages for homeowners paying more for their homes than they're worth, but most aren't receiving the help they requested. Legislators are already demanding that the big banks to do more, but today, four of the nation's largest banks pushed back.
Teachers’ Pension Gap May Be Triple That Reported By Dunstan McNichol April 13 (Bloomberg) -- Taxpayers across the U.S. owe public school teacher retirement accounts about $933 billion, nearly triple the amount reported by the plans themselves, a study says. The $332 billion gap estimated by teacher retirement funds between what they have on hand and the cost of promised benefits is low because it includes an “aggressive” 8 percent assumption on future investment earnings, the Manhattan Institute for Policy Research said in the study, released today. It also doesn’t reflect the full cost of stock market losses suffered in the past two years, the New York-based research organization said.
Retiring Boomers Will Leave a Huge Hole in the Job Market By MATTHEW SCOTT - DailyFinance.com -- The much-publicized announcement by United Parcel Service (UPS) last week that it will need to hire 25,000 new employees over the next five years to replace retiring baby boomers raises the specter of similar staffing issues to come for a number of employers. As odd as it may seem to be concerned about jobs going unfilled at a time when unemployment is nearly 10%, experts suggest that in some industries, employees may soon begin retiring at a much faster rate than they can effectively be replaced, a situation which could endanger corporate profitability. Where those new workers will come from and the cost of training them are employers' two top concerns.
Elizabeth Warren - The Two Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke
People@Work: Why America's 42 Million Freelancers Need Help By DAVID SCHEPP - DailyFinance.com -- Millions of Americans who have lost their full-time jobs amid the Great Recession have struck out on their own, creating do-it-yourself careers by becoming freelance or contract employees. Companies, of course, love it. Freed from the expense and obligation of providing key benefits such as health care and unemployment insurance, businesses are able to attract the talent they need on the cheap, while selling a lifestyle that offers flexibility and allows many to work from home.
Elizabeth Warren On Bankruptcy
Illinois ‘Poster Child’ of Debt Crisis Draining State Services By Darrell Preston April 13 (Bloomberg) -- Illinois, the second-lowest-rated U.S. state after California, must fend off a “financial implosion” as its unfunded liability for retiree benefits threatens spending for other services, a group of community leaders warned. The Civic Committee of the Commercial Club of Chicago, led by former and current executives, is pressuring Governor Pat Quinn and other state leaders to control growth of pension costs they say put the state at risk of fiscal collapse. Members of the group, which estimates the state’s retirement-related liabilities at $130 billion, are speaking out as Illinois enters its general-election season.
Thousands of Anthem Blue Cross customers await decision on rate hikes By Duke Helfand - LATimes.com The insurer had delayed the increases till May 1 pending a review by an outside actuary appointed by the state insurance commissioner. That report is expected within two weeks. Thousands of worried Californians who buy individual insurance policies from Anthem Blue Cross will soon learn whether they face rate increases of up to 39% that were put on hold for two months amid a public outcry that helped revive national healthcare legislation. California's largest for-profit health insurer agreed to postpone the increases for many of its 800,000 individual policyholders until May 1 while an outside actuary, appointed by state Insurance Commissioner Steve Poizner, evaluated its spending practices.
Health reform starts now: 2010 tax breaks By Catherine Clifford NEW YORK (CNNMoney.com) -- Most of the health care reforms President Obama signed into law last month won't kick in for another four years. But small businesses can look forward to some quick relief: a tax credit to offset insurance premiums took effect immediately. Millions of business owners will get postcards from the Internal Revenue Service in the coming weeks suggesting they check and see if they are eligible for the 2010 tax credit. Notifications are also going out to tens of thousands of tax professionals.
Toyota Halts Sales of Lexus SUV Labeled ‘Safety Risk’ By Alan Ohnsman April 14 (Bloomberg) -- Toyota Motor Corp. asked Lexus dealers in North America to halt sales of GX 460 sport-utility vehicles after Consumer Reports labeled the model a “safety risk,” the magazine’s first such designation in nine years. “We are taking the situation with the GX 460 very seriously and are determined to identify and correct the issue Consumer Reports identified,” Mark Templin, U.S. general manager for the luxury brand, said in an e-mail.
Arizona passes strict illegal immigration act By Nicholas Riccardi - LATimes.com The bill directs police to determine the immigration status of noncriminals if there is a 'reasonable suspicion' they are undocumented. Immigrant rights groups say it amounts to a police state. Arizona lawmakers on Tuesday approved what foes and supporters agree is the toughest measure in the country against illegal immigrants, directing local police to determine whether people are in the country legally. The measure, long sought by opponents of illegal immigration, passed 35 to 21 in the state House of Representatives. The state Senate passed a similar measure earlier this year, and Republican Gov. Jan Brewer is expected to sign the bill. The bill's author, State Sen. Russell Pearce, said it simply "takes the handcuffs off of law enforcement and lets them do their job."
Arizona House passes immigration bill PHOENIX BUSINESS JOURNAL - BY Mike Sunnucks The Arizona House of Representatives passed a sweeping immigration bill Tuesday that would give police broad powers to arrest illegal immigrants, require immigrants to carry valid papers, and make it a misdemeanor to pick up and transport undocumented day laborers and migrants. Senate Bill 1070 now goes back the Arizona Senate, which previously passed the measure and now must approve the House changes. The House version includes language exempting people who drive migrants to church or provide emergency services from being prosecuted. Republicans supporting the bill say it would help combat illegal immigration and Mexican drug cartels in the state. The bill also would require police to enforce immigration laws.
Obama pressing China over Iran nukes By Kara Rowland - WashingtonTimes.com President Obama on Tuesday acknowledged the challenge of bringing Chinese leaders on board for a multilateral push to impose stiff sanctions on Iran, but expressed confidence Beijing will ultimately join the U.S. and other allies in punishing the country for its suspected pursuit of nuclear weapons. In fact, Mr. Obama described progress on sanctions negotiations as evidence that international diplomacy is working, despite the failure thus far to reach an agreement.
Five million should flee Tehran over earthquake fears: Ahmadinejad At least five million Tehran residents should flee Iran's capital because it sits on several fault lines and is threatened by earthquakes, President Mahmoud Ahmadinejad said on Sunday. "We cannot order people to evacuate the city... but provisions have to be made. At least five million should leave Tehran so it is less crowded and more manageable in case of an incident," Mehr news agency quoted him as saying. Mr Ahmadinejad said the government could offer "land, loans at four per cent interest and substantial subsidies" in the provinces to encourage Tehran residents to leave the sprawling capital. Tehran province has nearly 14 million inhabitants, eight million of whom live in the city, which straddles several fault lines. Experts have warned that a strong quake in Tehran could kill hundreds of thousands of people.
Israel tells citizens to leave Sinai due to kidnap threat From Paul Colsey, CNN Jerusalem (CNN) -- An Israeli counter-terrorism unit is warning Israeli citizens in Egypt's Sinai peninsula to return home because they face the risk of militant attacks. The group said it had "concrete information" about an "imminent risk of a terrorist abduction operation" in the Sinai -- a popular tourist destination spot for Israeli Jews and Arabs.
Israel issues ‘urgent’ warning of terrorist attacks in Sinai By Samer al-Atrush in Cairo and Richard Spencer - Telegraph.co.uk Israel on Tuesday night issued an urgent warning of impending terrorist attacks aimed at tourists in the popular resorts of Egypt’s Sinai peninsula. The anti-terror office of the Israeli prime minister, Benjamin Netanyahu, said it was advising all Israeli tourists to leave the Sinai. It asked families who had relatives on holiday there to contact them and update them on the warning. It said it had “concrete evidence” of an attempt to kidnap Israelis who had crossed the Egyptian border to the peninsula’s Red Sea resorts. The resorts, particularly Sharm el-Sheikh on the peninsula’s tip, are also popular with British and other European holiday-makers, and the Foreign Office was last night thought to be reviewing the situation.
Nuclear summit told how Georgia 'foiled plot to sell weapons-grade uranium' Julian Borger in Washington - guardian.co.uk Georgian president tells nuclear summit of sting as Barack Obama calls on rest of world 'not simply to talk, but to act' Georgian security forces have foiled a criminal plot to sell weapons-grade uranium on the black market, the country's president told a gathering of world leaders today. The revelation brought a sense of urgency to the Washington summit on nuclear security, where Barack Obama called on the rest of the world "not simply to talk, but to act" to destroy vulnerable stockpiles of nuclear material, or to safeguard them against theft by terrorists.
Ahmadinejad Asks U.N. to Investigate 9/11 By ROBERT MACKEY -NYTimes.com Iran’s president, Mahmoud Ahmadinejad, who said last month that the terrorist attacks in the United States on Sept. 11, 2001, were “a big fabrication,” wrote to the United Nations secretary general, Ban Ki-moon, on Tuesday to ask him to open an investigation into the events of that day. In a letter to the secretary general, Mr. Ahmadinejad asked him to “form an independent fact-finding committee trusted by regional countries on major elements behind [the] September 11 attack which was carried out as the main pretext to attack the Middle East,” according to the Iranian Students News Agency.
Small Businesses Still Searching For The Recovery CHRISTOPHER S. RUGABER, AP - kesq.com WASHINGTON -- Small businesses are still waiting for the economic rebound that's enabled larger companies to obtain low-interest credit and to boost exports and production in recent months. Smaller companies aren't much more optimistic than they were in the depths of the recession, according to a survey released Tuesday by the National Federation of Independent Business. That pessimism is slowing job creation and likely weakening the recovery, economists say. The NFIB's small business optimism index fell 1.2 points to 86.8 in March, the lowest level since July 2009. That's a sharp contrast with other surveys showing larger companies rebounding.
Looting Main Street MATT TAIBBI - RollingStone.com How the nation's biggest banks are ripping off American cities with the same predatory deals that brought down Greece If you want to know what life in the Third World is like, just ask Lisa Pack, an administrative assistant who works in the roads and transportation department in Jefferson County, Alabama. Pack got rudely introduced to life in post-crisis America last August, when word came down that she and 1,000 of her fellow public employees would have to take a little unpaid vacation for a while. The county, it turned out, was more than $5 billion in debt — meaning that courthouses, jails and sheriff's precincts had to be closed so that Wall Street banks could be paid.
Foreclosures Hit Rich and Famous By CRAIG KARMIN And JAMES R. HAGERTY - WSJ.com The rich and famous now have something in common with hundreds of thousands of middle and lower-class Americans: The bank is about to take their homes. Houses with loans of $5 million or more will likely see a sharp rise in foreclosures this year, according to a RealtyTrac study for The Wall Street Journal. Just this week, a Tudor mansion in Bel-Air belonging to film star Nicolas Cage was in foreclosure auction and reverted to the lender. On Wednesday, Richard Fuscone, a former top Wall Street executive, declared personal bankruptcy, forestalling a foreclosure auction that had been scheduled this week on his 14-acre Westchester mansion. Last month a Manhattan condominium owned by Italian film producer Vittorio Cecchi Gori was sold in a foreclosure auction for $33.2 million.
China Rising: Assessing China's impact on America Christine Romans - CNN.com (CNN) – The question nine years after China was admitted to the World Trade Organization and officially welcomed in to the world economy is this: Has China's rise been good or bad for America? Meet Steve Udden. He is a husband, father of two daughters and a trade statistic. "I felt like a baseball player that got traded from a team that he loved playing for and loved the fans. I loved my customers; my coworkers were like second family to me," he explains.
CNN's Christine Romans looks at China's economic impact on the United States.
White House and Congress face off over Iran By Daniel Dombey in Washington - FT.com The Obama administration and Congress are gearing up for a battle over sanctions against Iran, with Capitol Hill resisting White House pressure on measures the administration says could antagonise allies and complicate its foreign policy. Congress, which returned from recess on Monday, will begin final negotiations on the legislation in coming days. The administration says the bill risks falling foul of World Trade Organisation rules and could damage President Barack Obama’s efforts to build a pro-sanctions coalition at the United Nations.
Pimco Says There’s a ‘Risk of Flipping to Deflation’ By Garfield Reynolds and Wes Goodman April 13 (Bloomberg) -- Developed economies face the risk of deflation as central banks end programs to revive their financial systems, according to Pacific Investment Management Co., manager of the world’s biggest bond fund. “There is a near-term risk of flipping to deflation given our view that developed economies have not fully healed and consumers are not yet ready to stand on their own two feet,” Mihir Worah, who manages the Newport Beach, California-based company’s $18 billion Real Return Fund, wrote on Pimco’s Web site.
Why The Coming Wall Street Movie Really Does Portend Another Crash Joe Weisenthal and Kamelia Angelova - BusinessInsider.com -- Some have wondered whether the forthcoming release of Wall Street II movie by Oliver Stone portends a market crash, considering that the last Wall Street was released right before the crash of 1987. Actually, this line of reasoning understates the case. There was actually another movie called Wall Street that came out in 1929. Of course, the market collapsed that year, too. The release of the movie got pushed back to September, so we got a reprieve. But if history is any guide, we're heading for trouble later this year.
Strapped City Cuts and Cuts and Cuts By LESLIE EATON - WSJ.com COLORADO SPRINGS, Colo.—Like many American cities, this one is strapped for cash. Tax collections here have fallen so far that the city has turned off one-third of its 24,512 street lights. But unlike many cities, this one is full of people who are eager for more government cutbacks. The town council has been bombarded with emails telling it to close community centers. Letters to the local newspaper call for shrinking the police department and putting the city-owned utility up for sale. A commission is studying whether to sell the municipal hospital. Another, made up of local businessmen, will opine on whether to slash the salaries and benefits of city employees.
27 million believe home is underwater The Truth About Mortgage.com Despite what looks like a potential housing recovery, albeit a fragile one, 27 million believe they owe more on their mortgages than what their homes are currently worth, according to a poll from Harris Interactive. Of the survey respondents who have a mortgage, 24 percent said they believe their home is worth-less than what is owed on the associated mortgage(s), with about half saying “a lot less.” And 26 percent of those homeowners are having a “great deal of difficulty” paying off the mortgage, which could mean strategic default if they’re unable to snag a loan modification.
This Rally Has Ignored Fundamentals, And Will Be Corrected Painfully Gregory White - BusinessInsider.com The market rebound we've experienced is near an end, and we should have seen it coming, according to John Hussman of Hussman Funds. Here's a breakdown of why Hussman thinks that, even if you ignore questions about the banking system, this market is clearly in line for a correction.
Investors have gone through two massive loss periods in the past 12 years, and only gained 2.4% if they tracked the S&P.
Returns are going to be low over the next several years, and while there might have been a price low in March 2009, the valuation low has yet to be found. It may take another 6-8 years.
This low return on the S&P is not the result of other potential crises looming in the system, including credit problems, but simple fundamentals.
People are now buying into the market, relying on economic growth and the absence of another credit crisis, rather than on fundamentals.
This Is How Inflation Begins Joe Weisenthal - BusinessInsider.com Raymond James strategist Jeff Saut is banging the inflation drum, arguing not just that it's coming, but that it's already here. Well, it's not here per se, but... Annualized inflation in India is running at about 15% and China is not all that far behind. In the Philippines, March’s inflation figure was just reported at +4.4%, up from the previous month’s 4.2%, with the cost of Philippine fuel/electricity/water up 14.6% over the trailing 12 months. In our country, since January 2009 the price of copper is up ~185%, crude oil is better by ~118%, and rubber is higher by ~167%. Moreover, from August of 2009 until now hog prices have rallied ~75%, while cattle prices have lifted ~19%. Such actions caused the Reuters CRB Commodity Index to travel above its 200-day moving average in June 2009 and stay there ever since (read: bullish and inflationary). Meanwhile, economists continue to insist there is no inflation because wage inflation is non- existent.
US Economic Boat Sinking in the Money Flood By Bill Bonner - The DailyReckoning.com 04/09/10 Baltimore, Maryland - Does anyone seriously think the feds can do a better job? These are the people who run the Post Office…and Amtrak, for Pete's sake. Even with monopolies, they can't make money. Now they're the majority owners of auto companies, insurance giants and mortgage firms. Hardly anyone buys a house in America anymore without the help of a government-owned mortgage business. And soon, you won't be able to get a doctor to take your temperature - assuming they still do that - without getting a bureaucrat's approval. In theory, the feds take charge of more of the economy, and spend more money, so they are able to keep the GDP from going down. The feds have been pumping about $4 billion per day of deficit spending (money they didn't collect in taxes) into the economy. The bankers say 'thank you very much' for the business and pay themselves big bonuses. But this money doesn't stimulate the private economy…it replaces it.
John McLaughlin Predicts National Sales Tax To Be Instituted By Early 2011; Will It Be Catalyst For Next Major Recession? by Tyler Durden - ZeroHedge.com At 27 minutes into his show, John McLaughlin predicts that Obama "will enact a new national sales tax in January, February or March of 2011." As we pointed out recently, tax withholdings, contrary to what the budget office or flawed groupthink will have you believe, were down in February and March compared to 2009. Alas, Obama will have no choice but to institute some form of VAT unless he has absolute faith that China will buy US debt into perpetuity. Yet what people in D.C. should remember, is that Japan's hike of the VAT in 1997 and increase in out-of-pocket medical expenses is often credited with prompting their 1997 recession.
The McLaughlin Group 4/2/10
Bullish gold may cross $1250 on investment fever LONDON (Commodity Online): Will gold price zoom past the record of $1227 per ounce that the precious metal achieved in December 2009? It looks gold price is surging once again prompted by a number of reasons that include the Greek financial crisis, volatility in dollar and Euro and several central banks’ decision to raise interest rates. On Monday, gold price started climbing in global markets across several continents from Asia to Europe. Gold prices hit a fresh four-months high in Asian trading on euros rebound as EU offered a bailout package to Greece. Gold for immediate delivery was seen trading at $1165.35 an ounce at 11.30 a.m while U.S. gold futures for June delivery was at $1,166.40 per ounce.
Gold price is caught in an explosive move By Howard S. Katz - CommodityOnline.com The explosive move in gold which I have been predicting for some months is now under way. He who hesitates is not lost, but he does make smaller profits. You have undoubtedly heard of the death of a thousand cuts. You now face the death (of your profit) by a thousand decisions to do nothing. But first, let us review the art of speculation.
Speculation is alive and kicking in gold and silver By Jon Nadler - CommodityOnline.com The $61 billion financial adrenaline shot given to Greece by the euro-region and the IMF helped resuscitate the euro overnight and gave a further lift to the precious and base metals markets. The US dollar fell about 0.35 on the index, and was earlier seen hovering near the 80.55 level. The biggest move in the overnight markets however was in the cost of insuring against a Greek default; it fell by the largest amount on record.
‘Al-Qaida’ in gold market? By Geena Paul LONDON (Commodity Online): Gold has the dubious distinction of abetting crimes across the globe. And, this time the yellow metal has done something which the world has never seen or heard till now. It is worse than 9/11 or 26/11 terror strikes on World Trade Center and Mumbai respectively. You must be wondering where did such a big crime occurred. Because, this terrorism is a bloodless one. Here, only gold and dollars are involved — that too in trillions. The new crime is called financial terrorism. And if you dare to expose this, your life is at danger. It is like a new ‘Al-Qaida’ plotting to hit world economies. And, if the plot is exposed, the financial terrorists will bump you off.
Precious metals surge on Greek bailout package By Dan Norcini - CommodityOnline.com The big mover of the day was news of the Greece bailout (okay – call it a “rescue package” – it is still a bailout) put together by the EU to the tune of €30 billion ($41 billion) at 5%. Further icing on the cake is to come from the IMF which is providing €15 billion. The Forex markets went into a tizzy last evening with the Euro jumping more than 2 points at one time before things began settling down and a bit of relative calm descended on the currency markets as traders attempted to sort out the implications. Once they did, the Euro surrendered over a full point worth of gains and the Dollar moved back ? cent off its worst overnight lows.
Martin Feldstein And Robert Reich Everyone Agrees, The VAT will Be Disastrous To The US Economy
China Issues Revised Policy on Procurement By LORETTA CHAO - WSJ.com BEIJING-China appears to be softening rules that sparked outcry from foreign businesses by limiting their access to a government procurement market worth billions of dollars a year. The Ministry of Science and Technology over the weekend issued a draft for a new set of rules on government procurement that omitted the most controversial clauses from an earlier version. Under rules published last year, but not officially enforced, vendors were required to gain accreditation for their products before they could be included in a government procurement catalog. The rules stated that products must "have Chinese intellectual property and proprietary brands," and that the intellectual property of applicants must be "totally independent of overseas organizations or individuals."
China to Float Yuan by June 30, By Bob Chen Shun One-Off Jump, Survey Shows April 13 (Bloomberg) -- China may allow the yuan to appreciate by June 30 to curb inflation while avoiding a one- time jump in value that might curb exports, a survey of analysts showed. Twelve of 19 respondents surveyed by Bloomberg said the central bank will allow the currency to float more freely this quarter, five expect it to happen by Sept. 30, and the rest expect the move by year-end. Eleven see no one-off revaluation, while eight forecast an immediate gain of between 0.5 percent and 5 percent. Fifteen predict a wider daily trading range.
China and the yuan: What's at stake By Chris Isidore NEW YORK (CNNMoney.com) -- Chinese and U.S. officials are reportedly close to a deal on boosting the value of China's currency, the yuan -- the first step to making U.S.-made goods more competitive versus Chinese exports. U.S. Treasury Secretary Timothy Geithner was in China for a surprise meeting last week, and Chinese President Hu Jintao arrived in Washington on Monday to attend a global conference on nuclear security. "It's basically seems like it's a done deal," said foreign exchange expert Ashraf Laidi, chief market strategist for CMC Markets.
Renminbi rise might have wider effects By Peter Garnham - FT.com Expectations that China could move to let the renminbi rise have escalated in recent days amid a thawing in Sino-US relations. The US has backed away from naming China as a currency manipulator, while rhetoric from Chinese officials suggests that Beijing is seriously considering allowing the renminbi’s appreciation. Speculation has reached such a level that analysts are not just considering the potential effect on other Asian currencies, but also the wider consequences for currency markets as a whole.
Currency manipulation: Geithner to China
Did FDR End the Depression? By BURTON FOLSOM JR., ANITA FOLSOM - WSJ.com The economy took off after the postwar Congress cut taxes 'He got us out of the Great Depression." That's probably the most frequent comment made about President Franklin Roosevelt, who died 65 years ago today. Every Democratic president from Truman to Obama has believed it, and each has used FDR's New Deal as a model for expanding the government. It's a myth. FDR did not get us out of the Great Depression-not during the 1930s, and only in a limited sense during World War II. Let's start with the New Deal. Its various alphabet-soup agencies-the WPA, AAA, NRA and even the TVA (Tennessee Valley Authority)-failed to create sustainable jobs. In May 1939, U.S. unemployment still exceeded 20%. European countries, according to a League of Nations survey, averaged only about 12% in 1938. The New Deal, by forcing taxes up and discouraging entrepreneurs from investing, probably did more harm than good.
Why The IMF's Involvement In Greece Is A Real Disaster For Europe And Its Leadership BusinessInsider.com -- Mike O'Rourke succinctly explains why the Greek bailout, which will involve both the EU and the IMF, is such a mistake. The problem with IMF involvement and the entire manner in which this situation has been handled is that investors are looking for EU leadership to establish a clear framework as to how the Club Med deficit problems will be addressed. Simply put, investors prefer a strategy as opposed to ad-hoc reactionary policy similar to what prevailed in the United State in the fall of 2008. Ad hoc responses are the result of policy makers chasing the market. As most every investor who has been around for the past decade can attest markets are often subject to extended bouts of inefficiency in both directions. Policy makers need to exhibit that they have the confidence and clout to navigate a volatile situation to establish the path out of the crisis, which will then eventually lead to the desired level of stability. This response has been reactionary and will likely solve Greece (at least for now), but still leaves the door open for a new ad hoc response should another debt laden EU nation come under pressure.
Sovereign Debt Default: Learning from Argentine Mistakes By Bill Bonner - The DailyReckoning.com 04/12/10 Buenos Aires, Argentina – Argentina is for economists with a sense of humor, if there are any left. It’s for anyone who likes a good drink and a good laugh. And for anyone who wants a peek at the future. What do defaults look like? Look at Argentina. The Argentines pulled off the biggest default on sovereign debt in history. In 2001, they defaulted on $132 billion in loans. Later, they negotiated a settlement that left lenders with their worst haircut ever. But at least the lenders must have had fun. They came down to Buenos Aires on rich expense accounts. They stayed at the Four Seasons. They ate steaks that were thicker than glaciers…and washed them down with a whole rio of malbec. They probably went to a few tango shows too. The visit may have cost them billions…but heck……it wasn’t their money.
Fed Picks Chief Of Monetary Affairs Division By THE NEW YORK TIMES WASHINGTON — The Federal Reserve Board on Monday named William B. English director of its division of monetary affairs, one of the most powerful staff positions at the central bank. On July 23, Mr. English is to succeed Brian F. Madigan, who will become senior adviser to the board and who intends to retire later this year after 31 years at the central bank. Mr. English, 49, has been deputy director of the division since February 2008. The division prepares research and recommendations for the Federal Open Market Committee, the Fed’s policy-making arm, which sets short-term interest rates.
Senate finds fraud in Washington Mutual mortgage lending -- WASHINGTON (AP) — Senate investigators say they found that the mortgage lending operations of Washington Mutual, the biggest U.S. bank ever to fail, were threaded through with fraud.
Get Ready for a More Conservative Supreme Court By Ruth Marcus - TruthDig.com Here is an unsettling thought for those who waited eight years to have a Democratic president appointing judges: Barack Obama could well end his first term with a more conservative Supreme Court than the one he inherited. This is, I hasten to admit, premature speculation-even with the not-so-surprise announcement that Justice John Paul Stevens, the anchor of the court's liberal wing, is retiring.
Economists warn against more state aid Congress considers extension of stimulus By Stephen Dinan - WashingtonTimes.com States say they've been kept afloat during the economic downturn by critical federal aid, but, with stimulus money set to run out soon, a report from conservative economists argues that another infusion would postpone, and could worsen, states' eventual reckoning with troubled budgets. Last year's stimulus bill designated hundreds of billions of dollars to states, either directly or indirectly. The aid peaked this year before dropping dramatically. States say they're still hurting, though, and Congress is trying to figure out how much more aid to extend, and for how long.
Interest Rates Have Nowhere to Go but Up By NELSON D. SCHWARTZ Even as prospects for the American economy brighten, consumers are about to face a new financial burden: a sustained period of rising interest rates. That, economists say, is the inevitable outcome of the nation’s ballooning debt and the renewed prospect of inflation as the economy recovers from the depths of the recent recession. The shift is sure to come as a shock to consumers whose spending habits were shaped by a historic 30-year decline in the cost of borrowing.
Pimco Says Investors to Hold Down U.S. Mortgage Rates By Garfield Reynolds and Wes Goodman April 12 (Bloomberg) -- Investor demand for mortgage-backed securities will keep U.S. home-loan rates down after the Federal Reserve ended its purchases of the debt, said Pacific Investment Management Co., manager of the world’s biggest bond fund. The Fed’s unprecedented program to buy $1.25 trillion of the securities that guide home-loan costs stopped U.S. housing prices from falling, Scott Simon, who is in charge of investing in the notes at Pimco, wrote on the company’s Web site. Pimco is among the fund companies that sold mortgage bonds to the Fed, and many money managers began 2010 “underweight” these assets, the report said.
PIMCO's Bill Gross Frantically Dumping Treasuries, Thinks U.S. Interest Rates Will Soar by Henry Blodget - Tech Ticker Nine months ago, Bill Gross's Total Return Fund was 50% in US Treasuries. Now it's only 30%, the lowest percentage in the 23 year history of the fund, says Nelson Schwartz of the NYT. Why is Gross dumping Treasuries? Two primary concerns:
Inflation
The massive tidal wave of money the US needs to raise in the coming years, which will increase the supply of Treasuries (driving prices down and rates up).
Treasuries Near ‘Structural Bear Market By Cordell Eddings and Thomas R. Keene April 12 (Bloomberg) -- Treasuries will enter a “structural bear market” if yields close above key levels, according to Louise Yamada, the former head of technical research at Citigroup Inc. A close in the 30-year bond yield above 4.8 percent “will have completed the bottoming process that will initiate the new structural bear market,” Yamada, managing director in New York at Louise Yamada Technical Research Advisors LLC, said in an interview with Tom Keene on Bloomberg Radio. “People who are putting long-term money into long-term bond funds may have it wrong,” she said.
Treasury 30-Year Bond Gains With Yields Near 30-Month High By Susanne Walker and Cordell Eddings -- April 12 (Bloomberg) -- Treasury 30-year bonds gained for a second day as yields close to the highest level since October 2007 attracted value-conscious investors. Treasuries had slumped earlier as a European rescue plan for debt-plagued Greece reduced demand for the relative safety of U.S. government securities. The committee responsible for determining when U.S. recessions begin and end said it’s premature to declare an end to the current slump. Thirty-year yields reached 4.86 percent on April 7, the highest intraday level since touching 4.91 percent on Oct. 17, 2007.
Investors' Biggest Mistake Was Trusting Wall St. By TREVOR DELANEY - ABCNews.com TV commentator, author Ben Stein says investors' biggest mistake was trusting Wall St. Good sense has vanished from many areas of American life including how families manage their money, says economist and television commentator Ben Stein. "You've got to correct your spending patterns so that you're saving every week or every month," Stein says. "You've got to correct your spending so that you're not even remotely spending more than you earn. You've got to live a life of good sense."
Ron Paul - Fox News, 04/12/10
Credit Card Customers Punished for Doing the Right Thing? By Asher Hawkins, Forbes.com - ABCNews.com -- Paying Down Your Credit Card Debt Could Yield a Nasty Surprise: a Lower Credit Limit One month ago Nick Trout decided to use $1,000 in spare cash to pay down the $2,500 balance on his Chase Freedom card. The 41-year-old printing company owner figured that, if anything, his responsible behavior would put him in good stead with card issuer . Instead, the San Antonio resident claims that paying down his balance was rewarded with a cut in his credit limit from $12,300 to $1,900. The 85% reduction left him just $400 in available spending above his outstanding balance.
Jobs will come back, but not the pay Robert Reich The Future of American Jobs Many of my students at Berkeley who will be graduating in June are worried about the job market. I understand their worries. But they and other new college grads have less cause for concern than most American workers. Let me explain. Since the start of the Great Recession in December 2007, the U.S. economy has shed 8.4 million jobs and failed to create another 2.7 million required by an ever-larger pool of potential workers. That leaves us more than 11 million jobs behind. (The number is worse if you include everyone working part-time who’d rather it be full-time, those working full-time at fewer hours, and people who are overqualified for the jobs they’re in.)
Stable Money Supply: The Real Way to Help the Poor By The Mogambo Guru - The DailyReckoning.com 04/09/10 Tampa, Florida - I am happy to note that the Tea Party, which appeals to me personally, is gaining traction and power, which adds more political overtones to my life and gets me, a shameful Republican, away from the loathsome Republicans (except Ron Paul), which have acted almost as despicably as the Democrats. I cheerfully denounce them all with a snotty, disrespectful tone in my voice and a condescending sneer on my lips, also an indicator of disrespect, because I am a guy who has spent a lifetime reading about what happens when governments try this "increasing the money supply" crapola that, since the 1960s, the Democrats made into a political mainstay and the Republicans went "grudgingly" along with it, and I am, in a word, horrified and disgusted.
Jeremy Siegel & Robert Shiller Siegel And Shiller Spar Over The Huge Double Dip Question
Foreclosure Rates At Record High PRNewswire.com Report Includes Data as of February 2010 Month-End LPS' Mortgage Monitor Report Shows Total Delinquent Loans 21.3 Percent Higher Than Last Year; -- The latest Mortgage Monitor report released by Lender Processing Services, Inc. (NYSE: LPS), a leading provider of mortgage performance data and analytics, shows that the total number of delinquent loans was 21.3 percent higher than the same period last year. Although the data showed a small 1.45 percent seasonal decline in delinquencies from January 2010 to February 2010 month-end, the national delinquency rate still stood at 10.2 percent. The report is based on data as of February 2010 month-end.
PIMCO: Don't Expect A Housing Recovery Anytime Soon Vincent Fernando, CFA - BusinessInsider.com PIMCO has completed an excellent Q&A with Scott Simon, the head of their mortgage and asset-backed securities team. Mr. Simon addresses the housing outlook now that the federal reserves historic mortgage-backed security (MBS) buying program (which had been used to provide liquidity and support market prices during the crisis) has ended. Overall, he presents a mixed outlook. Firstly, he thinks the MBS market can hold up on its own now and doesn't need the Fed's buying support, and in fact hasn't needed the Fed's support for many months now:
Fannie, Freddie Face More Foreclosures in 2010 by JON PRIOR - housingwire.com The government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, like the banking industry, are preparing for a surge in foreclosures to hit already overloaded REO portfolios in 2010. Freddie holds 45,000 real estate owned (REO) properties in its portfolio as of the end of 2009, according to a filing with a quarterly filing with the Securities and Exchange Commission (SEC). REO levels increased in every quarter last year from 29,145 at the end of Q109. A property is classified as REO after a bank forecloses and repossesses it. According to First American CoreLogic, the sale of these homes and short sales, which takes place after default but before foreclosure, make up 29% of the US market.
Brink of Bankruptcy Public pension crisis threatening to sink cities and states
Florida Bankers Want To Eliminate Homeowners Right to a Judicial Foreclosure MFI-Miami.com -- In an attempt to circumvent a recent Florida Supreme Court order that requires banks to mediate a foreclosure dispute, the Banking Lobby is attempting to ram through the Florida Legislature a bill that will convert Florida from a judicial foreclosure state to a non-judicial foreclosure state. What does this mean? It means you the homeowner won’t automatically get your day in court if your lender tries to take your house away. The way it works right now is the lender is required by law to file a civil lawsuit against you in order to foreclose. You then have to answer it. If you don’t answer it or don’t show up to court, the judge issues a summary judgment against you. In a non-judicial foreclosure everything is administratively and your right to due process is compromised and you have to beg for your day in court.
WaMu risky loans ‘riddled’ with fraud By Stephanie Kirchgaessner in Washington - FT.com Washington Mutual ramped up sales of high-risk mortgages to investors in the years before its collapse even though internal reports showed many of the loans were tainted by fraud, according to a congressional investigation into the bank’s failure. The Senate permanent subcommittee on investigations also found that the bank securitised loans that it knew were likely to fail without disclosing those problems to investors, said Democratic Senator Carl Levin, the panel’s chairman.
Washington Mutual created 'mortgage time bomb,' Senate panel says By Jim Puzzanghera and E. Scott Reckard - LATimes.com -- The failed bank made subprime loans it knew were likely to go bad and then packaged them into risky securities, investigators say. Reporting from Los Angeles and Washington Before Washington Mutual collapsed in the largest bank failure in U.S. history, its executives knowingly created a "mortgage time bomb" by making subprime loans they knew were likely to go bad and then packaging them into risky securities, a congressional investigation has found. In some cases, the bank took loans in which it had discovered fraudulent activity -- such as misstated income by borrowers -- and rolled them into mortgage securities sold to investors without disclosing the fraud, according to the report released Monday by the Senate's Permanent Subcommittee on Investigations.
Panel Tries to Unravel WaMu's Failure By DAN FITZPATRICK and JOHN D. MCKINNON Senators to Begin Hearings as Regulators Remain Reluctant to Detail Their Handling of Collapse More than 18 months after the largest bank failure in U.S. history, federal regulators have disclosed few details about their handling of Washington Mutual Inc.'s collapse, including the decision to let J.P. Morgan Chase & Co. buy the doomed financial institution at a bargain price. Washington Mutual has largely faded from the headlines as the U.S. banking industry gets back on its feet, helped by massive infusions of taxpayer-funded capital and intervention in the financial markets. But the decision-making process by regulators as the thrift teetered remains a mystery, showing the continued reluctance of government officials to release details about some of the biggest crashes of the financial crisis
Judge Dismisses 110 of the Felony Counts Against Southern California Attorney Accused of Loan Modification Scam Mandelman Matters -- It was a Friday afternoon not more than a couple of months ago when Christopher Lee Diener, a 42 year-old Orange County lawyer, was arrested and charged with 118 felonies in connection with an alleged loan modification scam that was taking advantage of distressed homeowners. Diener’s two partners were arrested as well. They were each charged with 98 felony counts. Diener was the first attorney in California to be arrested for running a loan modification scam. The very first one. Prosecutors said that Diener’s loan modification scam had defrauded 400 victims out of $1.25 million; that he took their money and did no work for the clients. Finally, a real loan mod scammer in the flesh.
Bankruptcy Court Confirms Trump Reorganization ABCNews.com NEW YORK (Reuters) - Trump Entertainment Resorts Inc said on Monday that its bankruptcy court confirmed its reorganization plan and that it expects to emerge from bankruptcy later this year. Judge Judith Wizmur of the United States Bankruptcy Court for the District of New Jersey chose the Trump plan over one from Icahn Partners, which filed a competing plan. Avenue Capital group, the lead bondholder in the reorganization process, will become the company's largest shareholder.
Unemployment Benefits Just a "Band-Aid" Tilton Says, America Needs Industrial Jobs Congress is expected to soon vote on extending unemployment insurance benefits. What's at stake? About one million Americans are at risk of losing their jobless benefits this month, according to the National Employment Law Project. While the benefits are an important issue, our guest Lynn Tilton says extending unemployment support masks much larger issues for Americans and job security going forward. "We're just addressing the symptom of the problem," says Tilton, chief executive of private equity firm Patriarch Partners. In addition to buying distressed businesses, Tilton has been an outspoken advocate of supporting U.S. industrial and manufacturing jobs.
The Jobs Picture Still Looks Bleak By ROBERT REICH - WSJ.com Many outsourced jobs will never return, and median income will likely continue to fall just like it did during the last so-called recovery. The U.S. economy added 162,000 jobs in March. That sounds impressive until you look more closely. At least a third of them were temporary government hires to take the census-better than no job but hardly worth writing home about. The 112,000 real new jobs were fewer than the 150,000 needed to keep up with the growth of the U.S. population. It's far better than it was-we're not hemorrhaging jobs as we did in 2008 and 2009-but the bleeding hasn't stopped. Since the start of the Great Recession in December 2007, the economy has shed 8.4 million jobs and failed to create another 2.7 million required by an ever-larger pool of potential workers. That leaves us more than 11 million jobs behind. (The number is worse if you include everyone working part-time who'd rather it be full-time, those working full-time at fewer hours, and people who are overqualified for the jobs they're in.) This means even if we enjoy a vigorous recovery that produces, say, 300,000 net new jobs a month, we could be looking at five to eight years before catching up to where we were before the recession began.
Income falls 3.2% during Obama's term By Joseph Curl - WashingtonTimes.com Real personal income for Americans - excluding government payouts such as Social Security - has fallen by 3.2 percent since President Obama took office in January 2009, according to the Commerce Department's Bureau of Economic Analysis. For comparison, real personal income during the first 15 months in office for President George W. Bush, who inherited a milder recession from his predecessor, dropped 0.4 percent. Income excluding government payouts increased 12.7 percent during Mr. Bush's eight years in office.
Smaller Fish to Fry -- IRS Targets Self-Employed By RICH BLAKE - ABCNews.com Bulk of Government's Audit Resources Go Toward Collecting From Bottom Rung Faced with a huge federal deficit and armed with better computer systems as well as a legion of newly trained auditors, the Internal Revenue Service in recent years has quietly established a new number one priority: extracting unpaid taxes from people who are self-employed. "I have seen more audits in the past two years, and it isn't who you think that's being singled out," said Jeff Fouts, a tax attorney based in Atlanta. "Most people tend to think the IRS goes after the wealthy or famous, but actually quite the opposite is true. It's the little guy most likely to be audited."
Death by Audit? CNBC.com Discussing whether IRS audits are targeting small businesses, with Bill Rys, NFIB tax counsel, and Tom Ochsenschlager, AICPA vice president of taxation.
One Marine's 'Liberty Walk' for the Rest of Us By Chris Hedges - TruthDig.com I met Ernest Logan Bell, a 25-year-old Marine Corps veteran, as he walked along Route 12 in upstate New York with a large American flag strapped to the side of his green backpack. There was a light drizzle and he was wearing a green Army poncho. Bell was on a six-day, 90-mile-long self-styled "Liberty Walk" from Binghamton to Utica in a quixotic campaign to challenge Democratic incumbent Rep. Michael Arcuri in the 24th Congressional District. He camped out along the road for three nights and stayed in cheap motels the other nights and was accompanied by Kevin Barlow, an unemployed welder. Bell opposes the health care law, calls for an end to the wars in Iraq and Afghanistan, advocates the abolishment of the Federal Reserve, is against the bailouts for Wall Street and wants to see immediate government relief for workers trapped in prolonged unemployment, including his own. He carried a handwritten sign: "End the Fed." In his backpack he had a copy of "The U.S. Constitution for Dummies" and a book on the Federal Reserve by Ron Paul that he planned to deliver to Arcuri's office in Utica.
The new MotorWorld order By Alex Taylor III - CNNMoney.com (Fortune) -- A couple of items in recent news clearly point to a new direction for the global auto industry: One was the decision by Daimler and Renault-Nissan last week to cooperate in the development of small cars and small engines. The other was the news that General Motors sold more vehicles in China during the first quarter of 2010 than it did in its home market of North America. The two messages couldn't be clearer: Automakers need scale in order to amortize the escalating costs of new technology and product development.
Defining the American Middle Class in Recession By JUDY ISIKOW - ABCNews.com How Do You Define a Group That's the Backbone of America? The American middle class, long the backbone of this country and the envy of the rest of the world, is dispirited. It is feeling financially threatened and may be in danger of losing its sense of upward mobility, the mojo that underpins the U.S. economy and America's famously optimistic attitude. A new ABC News poll shows that while nearly 50 percent of Americans see themselves as middle class, four in 10 say they're struggling to hold on. The numbers give a sense of Americans feeling stalled. Only 6 percent of those in the middle class see themselves moving up beyond their current status, according to the poll results.
One Day Soon, We'll All Be "Homegrown Terrorists" Giordano Bruno Neithercorp Press The word "terrorist" has assumed numerous presumptive connotations over the decades, and this trend of "redefining" the vicious label to suit certain governmental needs has only intensified in recent years, especially since 9/11. Its graduation as widely used political terminology gives it an almost archetypal quality, because it has the ability to trigger abundant and subconscious emotional reactions in the populace. However, these reactions are usually based on mass delusions: false ideas of what terrorism is, what it is not, and who is actually guilty of these loosely classified crimes. It is a weighted word, filled with projections, biases, and faulty perceptions.
What Your TV Is Telling You to Do By AMY CHOZICK - WSJ.com NBC Universal's Shows Are Sending Viewers Signals to Recycle, Exercise and Eat Right. Why In just one week on NBC, the detectives on "Law and Order" investigated a cash-for-clunkers scam, a nurse on "Mercy" organized a group bike ride, Al Gore made a guest appearance on "30 Rock," and "The Office" turned Dwight Schrute into a cape-wearing superhero obsessed with recycling. Coincidence? Hardly. NBC Universal planted these eco-friendly elements into scripted television shows to influence viewers and help sell ads. The tactic-General Electric Co.'s NBC Universal calls it "behavior placement"-is designed to sway viewers to adopt actions they see modeled in their favorite shows. And it helps sell ads to marketers who want to associate their brands with a feel-good, socially aware show.
Sebelius Says President Obama Has Instructed All Cabinet-Level Departments to Promote Public Health By Edwin Mora (CNSNews.com) -- Health and Human Services Secretary Kathleen Sebelius says President Obama "expects" all cabinet departments to leverage their resources in support of public health, a move she suggested is unprecedented. "One of the things that's happened in this administration, which I would suggest has not really happened in the past, is that the president has made it very clear to all of us at the cabinet level that while health may be directly in the portfolio of Health and Human Services, he expects all of the cabinet officers to spend some time figuring out ways that we can leverage their assets and work on this issue," said Sebelius in an April 8 speech on Capitol Hill.
Social workers take baby boy after mom refuses to feed him processed junk food David Gutierrez - Natural News -- British social workers took a toddler into custody after his parents refused to feed him junk food. Paul and Lisa Hessey of Bolsover, England, took their two-year-old son Zak to a doctor when he began refusing to eat his mother's cooking and dropped to 17 pounds. "I thought I was … going to the best people for advice when Zak began to lose weight," his mother said. "Instead they basically accused me of neglecting him and implied it was all my fault." Doctors advised Zak's parents to feed him junk food in order to stem his weight loss. His parents, firm believers in healthy eating, refused.
Can Taxes Cover Costs?
Arizona third for late loans PHOENIX BUSINESS JOURNAL Delinquent loans jumped 21.3 percent in February compared with a year earlier, according to the latest Mortgage Monitor report released by Lender Processing Services Inc. Monday. Florida beat all other states with 23.8 percent of its foreclosed inventory and noncurrent loans to active loans during the same period. Nevada came in second at 23.3 percent, followed by Arizona in third, but with a much lower percentage — 16.3. That compares with a national average of 13.5 percent.
New Documents Boost Egg-Price Fixing Lawsuit Claim AP - NYTimes.com FRESNO, Calif. (AP) -- A lawsuit alleging the U.S. egg industry conspired to increase consumer prices got a boost recently when a defendant turned over documents and internal memos that show an industry group called for egg producers to slow production. The lawsuit alleges that as egg prices climbed between 2004 and 2008, industry officials who blamed rising feed costs were covering up an orchestrated hen kill-off to reduce supplies. ''If you can get an agreement to manipulate supply, you are changing the economics of the market. Consumers will pay more,'' said attorney Michael Hausfeld, the lead attorney in the civil antitrust case against at least 13 of the nation's largest producers and trade groups, including industry giant Eggland's Best Inc. of Jeffersonville, Pa.
Health Law Bans New Doctor-Owned Hospitals Blocks Expansion of Existing Ones Monday, April 12, 2010 By Fred Lucas, Staff Writer (CNSNews.com) The new health care overhaul law, which promised increased access and efficiency in health care, will prevent doctor-owned hospitals from adding more rooms and more beds, says a group that advocates physician involvement in every aspect of health care delivery. Physician-owned hospitals are advertised as less bureaucratic and more focused on doctor-patient decision making. However, larger corporate hospitals say doctor-owned facilities discriminate in favor of high-income patients and refer business to themselves.
Drug Makers Reveal Payments to Doctors but Data Isn’t Easy to Parse By DUFF WILSON - NYTimes.com Pfizer recently became the latest big drug maker to start disclosing payments to doctors who act as consultants or speakers. But many followers of the pharmaceutical industry are still finding it far too difficult to follow the money. Industry bloggers and advocates for disclosure say the companies’ Web sites are not easy enough to use for patients or others who want to know which doctors are most financially entwined with drug makers. “More translucent than transparent,” is the way John Mack, editor of the Pharma Marketing blog sums up the databases.
Webster G. Tarpley On NSA, Google Alliance
Sinopec to Pay $4.65 Billion in Oil Sands Deal By Jeffrey Jones - ABCNews.com CALGARY, Alberta (Reuters) - China's state-owned Sinopec plans to buy ConocoPhillips' stake in the huge Syncrude project in Canada's oil sands for $4.65 billion, marking one of the country's largest investments ever in North America. ConocoPhillips, the U.S.-based oil major, said on Monday it will sell its 9.03 percent interest in the Syncrude Canada Ltd project to China's top refiner in a deal set to close in the third quarter. The acquisition is not the first investment by a Chinese company in Canada's oil sands but it is the largest.
All bets are off if US under biological attack, warns Hillary Clinton AFP -- US SECRETARY of State Hillary Clinton says the US cannot rule out using nuclear weapons if it came under biological attack, saying in that case "all bets are off". "If we can prove that a biological attack originated in a country that attacked us, then all bets are off," Ms Clinton said in an interview with CBS's Face the Nation. Ms Clinton was referring to a new US nuclear policy unveiled last week that restricted the use of atomic weapons against non-nuclear states that comply with the Nuclear Non-Proliferation Treaty (NPT).
In India, Wal-Mart Goes to the Farm By VIKAS BAJAJ - NYTimes.com HAIDER NAGAR, India — At first glance, the vegetable patches in this north Indian village look no different from the many small, spare farms that dot the country. But up close, visitors can see some curious experiments: insect traps made with reusable plastic bags; bamboo poles helping bitter gourd grow bigger and straighter; and seedlings germinating from plastic trays under a fine net. These are low-tech innovations, to be sure. But they are crucial to the goals of the benefactor — Wal-Mart — that supplied them. Two years after Wal-Mart came to India, it is trying to do to agriculture here what it has done to industries around the world: change business models by using its hyper-efficient practices to improve productivity and speed the flow of goods.
China tones down anti-U.S. rhetoric after setbacks By Charles Hutzler ASSOCIATED PRESS BOAO, China (AP) -- China is softening its recent muscular global posture, muting criticisms of the United States at a time of delicate negotiations with Washington and simmering economic troubles at home. The rhetorical time-out comes as President Hu Jintao heads to Washington this week, after months of friction with the United States, and was in full evidence this weekend at an international meeting designed to showcase China's growing reach as an economic and diplomatic powerhouse.
* * * * * IMPORTANT video series to understand big picture of foreign policy with regard to US/CHINA/Middle East:
Webster Tarpley Super Power Rivalry (US/ China) & World War III (1) (NWO GLOBAL POLITICS SERIES)
Webster Tarpley, Super Rivalry (US/ China) & World War III (2/6) (NWO GLOBAL POLITICS SERIES)
Webster Tarpley, Super Power Rivalry (US/China) & World War III (3/6) (NWO GLOBAL POLITICS SERIES)
Webster Tarpley, Super Power Rivalry (US/China) & World War III (4/6) (NWO & GLOBAL POLITICS SERIES)
Webster Tarpley, Super Power Rivalry (US/China) & World War III (5/6) (NWO & GLOBAL POLITICS SERIES)
Webster Tarpley, Super Power Rivalry (US/China) & World War III (6/6) (NWO & GLOBAL POLITICS SERIES)
Regulators shut South Carolina bank in 42nd failure this year By Marcy Gordon, AP Business Writer --WASHINGTON — Regulators on Friday shut down a bank in South Carolina, marking 42 bank failures in the U.S. so far this year amid mounting loan defaults, especially in commercial real estate. The Federal Deposit Insurance Corp. took over Beach First National Bank, based in Myrtle Beach, S.C., with $585.1 million in assets and $516 million in deposits. Bank of North Carolina, based in Thomasville, N.C., agreed to assume the assets and deposits of the failed bank. In addition, the FDIC and Bank of North Carolina agreed to share losses on $497.9 million of Beach First National Bank's loans and other assets.
Don’t Think That Cap-and-Trade Is Over By JAMES KANTER - NYTimes.com BRUSSELS — Profiteering, tax fraud, theft and dubious claims of emissions reductions are just some of the problems plaguing carbon trading. That litany of woes has helped prompt many commentators to proclaim that carbon trading is imminently headed for the scrap heap of history. Such predictions are almost certainly wrong. Carbon trading, also known as cap and trade, is on the cusp of generating mammoth amounts of money for governments — money that could start flowing just in time to help nations emerge from the worst financial crisis in a generation.
Depressed About Our Future by Mark Lutter - LewRockwell.com America is broke. We Americans have spent the last 15 years borrowing money for consumption instead of investment. Because of our high levels of debt, several prominent economists, including Gerald Celente – who predicted the collapse of the Soviet Union, the housing bubble and the tea parties – and Peter Schiff – who predicted both the NASDAQ bubble and the housing bubble – are predicting a coming collapse that will dwarf the housing bubble.
Agenda of Nuclear Talks Leaves Out a New Threat By DAVID E. SANGER, WILLIAM J. BROAD - NYTimes.com -- WASHINGTON — Three months ago, American intelligence officials examining satellite photographs of Pakistani nuclear facilities saw the first wisps of steam from the cooling towers of a new nuclear reactor. It was one of three plants being constructed to make fuel for a second generation of nuclear arms. The message of those photos was clear: While Pakistan struggles to make sure its weapons and nuclear labs are not vulnerable to attack by Al Qaeda, the country is getting ready to greatly expand its production of weapons-grade fuel.
Dylan Ratigan MSNBC exposes Federal Reserve Con - Part 1
Dylan Ratigan MSNBC exposes Federal Reserve Con - Part 2
Gold on a Tear Heading for a Test of All Time High By: Merv Burak - marketoracle.co.uk The move towards new all time highs continues, only about 6% left to go. The long term P&F chart shows no sign of any reversal of trend although a move to the $1080 mark would do so. That’s only 8% below the present level. A tight range for a long term market trend. As for the usual indicators, everything, as could be expected, is in the positive side. Gold is above its positive trending moving average line. The momentum indicator remains in its positive zone above a positive trigger line. The volume indicator is moving higher above its positive trigger line. The long term rating remains BULLISH.
Gold Market Flashing Debt Crisis Warning By: Larry Edelson - marketoracle.co.uk Gold anticipates the not-so-obvious and often completely unforeseen economic developments better than any other investment I know of. That’s why I am writing to you today. Gold’s rally last week to as high as $1,156 an ounce has an important message for all of us: It’s telling us that all is not well with the world and that something major is brewing out there. What’s going on out there that’s not so obvious and that gold is picking up on? It’s the relationship between China and the U.S. — and the implications of that relationship not just for the Chinese yuan, but also for the U.S. dollar.You see, Treasury Secretary Tim Geithner travelled to Beijing this past week, where he got on his knees with his hat in his hand, begging Beijing to push up the value of its currency.
Gold hits 4-mth high on euro jump, investment demand By Chikako Mogi TOKYO, April 12 (Reuters) - Spot gold prices rose to their highest in four months on a jump in the euro and investment demand, while platinum and palladium hit multi-month highs on expectations of strengthening industrial demand as the economy recovers. Gold prices were underpinned by investors fleeing to safety amid lingering concerns about Europe's financial stability, symbolised by Greece's debt crisis. The metal ended last week up about 3 percent, the biggest gain since the week of Jan. 10.
Gold Surges to Four-Month High on Demand for Currency Hedge By Pham-Duy Nguyen -- April 9 (Bloomberg) -- Gold climbed to the highest price since December as investors sought an alternative to holding currencies. The dollar fell as much as 0.8 percent against a basket of six major currencies. The euro headed for a weekly loss against the greenback on mounting speculation that Greece will default on its debt. Gold priced in euros and Swiss francs reached all- time highs. Investment in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, climbed to a record.
Gold breaches $1150 - technicals suggest further rise Author: Lawrence Williams - MineWeb.co.za Gold has been moving upwards, despite dollar gains against other Western currencies, and now has breached $1,150. Gold moved up through an $1145 chart point Wednesday without pausing for breath, and yesterday it gained further ground through the $1150 mark and stayed there overnight. The initial price boost this time appears to have been coming from the North American markets, but has been fairly flat, but supportive, in Europe and the East, even though the dollar has been making gains in its index against other currencies. The dollar may have come back a small amount against the Euro yesterday, but the overall significance of the latest moves in gold despite dollar ‘strength' should not be overlooked.
Gold nears $1,160 on safe haven buying amid currencies volatility -- Gold prices advanced today amid more volatility in currency markets. Gold is increasingly seen as a hedge against currency risks associated with huge sovereign debts of the US, Japan, the UK and euro zone member states, which has already led to a severe fiscal crisis in Greece and could soon hit other EU countries such as Portugal and Spain. Until recently, gold moved in tandem with the euro and inversely to the US dollar. Now, gold comes in demand with instability in the currency markets as investors are seeing to put money into safer assets such as precious metals.
Three Reasons to Add Gold to a Portfolio Recently, gold had a technical breakout surpassing $1,150/ounce and history suggests that a pullback is likely to follow. Despite this, there are three reasons to consider adding the precious metal to a portfolio. First, gold is a traditional hedge against inflation and the US dollar. A combination of massive stimulus spending and excess printing of dollars by the government is ultimately going to lead to inflation and a weak dollar. With the inverse relationship between gold and the dollar, gold is likely to reap the benefits of the inevitable.
Soros and Paulson are in gold - you should be too! Author: Lawrence Williams - MineWeb.co.za Most metals prices collapsed in 2008 after huge runups. Are we building for another similar episode and if so gold still provides the best protection. Not a day goes by without some analyst or other telling us that just about every other metal out there has been outperforming gold, with the implication that investment in the yellow metal is ineffective in terms of wealth generation and you should be putting your money elsewhere. However as the recent strength in the gold price has shown - being as it is driven by investment demand - there are plenty out there - among whom should be numbered mega-investors George Soros and John Paulson, who don't think that way. Or at least they see gold as the best way of protecting what they have. They may well have been investing in other commodities while they see prices rising, but have put huge chunks of their investments into gold-related assets, and will certainly be watching other trends very closely.
Gold Close To A Short-term Top? By: Peter Cooper The gold price hit a four-month high last week at $1,164 and consequently a new high for 2010. But there is good reason to think the trend could now turn downwards, and bottom out in the summer. That would set the stage for an autumn rally to new highs, well beyond the $1,226 an ounce posted last December. The main reason for being bearish about the outlook for gold prices at this point is that all financial markets now look overstretched and due for a correction after the long rally since the depths of March 2009. If there is any upside left it is pretty small.
The story is breaking out, and you can help GATA spread it By: Chris Powell, Secretary/Treasurer, GATA Dear Friend of GATA and Gold (and Silver): As you may have seen from a dispatch this morning, the gold and silver price suppression scheme today broke into the mainstream U.S. news media thanks to the New York Post. . . . While GATA has been anticipating this story for some time and GATA board member Adrian Douglas was crucial in facilitating it, because of their sensitivity you never know whether such stories will actually be executed or whether they will be spiked at the last minute. Thanks and congratulations to the Post and its deputy business editor, Michael Gray, the story's author, for publishing it.
Metal$ are in the pits By MICHAEL GRAY NYPost.com Trader blows whistle on gold & silver price manipulation There is no silver lining to the activities of JPMorgan Chase and HSBC in the precious-metals market here and in London, says a 40-year veteran of the metal pits. The banks, which do the Federal Reserve's bidding in the metals markets, have long been the government's lead actors in keeping down the prices of gold and silver, according to a former Goldman Sachs trader working at the London Bullion Market Association.
Why Are Silver Sales Soaring? The Casey Files - by Jeff Clark The U.S. Mint just reported another record, but this time it wasn’t for gold. The Mint sold more Silver Eagles in March and in the first quarter of the year than ever before. A total of 9,023,500 American Silver Eagles were purchased in Q110, the highest amount since the coin debuted in 1986. While this is certainly bullish, there’s something potentially more potent developing in the background. Namely, how this matches up with U.S. silver production. Like gold, the U.S. Mint only manufactures Eagles from domestic production. And U.S. mine production for silver is about 40 million ounces. In other words, we just reached the point where virtually all U.S. silver production is going toward the manufacturing of Silver Eagles.
Treasuries Drop as Greece Aid Package Curbs Demand for Safety By Wes Goodman -- April 12 (Bloomberg) -- Treasuries fell, pushing two-year yields up by the most in a week, as a European rescue plan for debt-plagued Greece reduced demand for the relative safety of U.S. government securities. Notes extended a loss from March and the euro climbed for a third day after European governments offered Greece as much as 45 billion euros ($61 billion) at below-market interest rates in a bid to stem its fiscal crisis. Treasuries also slid as economists said U.S. reports this week will show retail sales climbed and manufacturing accelerated, supporting the nation’s economic revival.
Greece Wins EU45 Billion Aid Pledge to Blunt Crisis By James G. Neuger and Jonathan Stearns April 12 (Bloomberg) -- European governments offered debt- plagued Greece a rescue package worth as much as 45 billion euros ($61 billion) at below-market interest rates in a bid to stem its fiscal crisis and restore confidence in the euro. Forced into action by a surge in Greek borrowing costs to an 11-year high, euro-region finance ministers said yesterday they would offer as much as 30 billion euros in three-year loans in 2010 at around 5 percent. That’s less than the current three- year Greek bond yield of 6.98 percent. Another 15 billion euros would come from the International Monetary Fund.
Bundesbank attacks Greek rescue as a threat to stability By Ambrose Evans-Pritchard - Telegraph.co.uk Germany's Bundesbank has fired a warning shot at Chancellor Angela Merkel, attacking the joint EU-IMF rescue plan for Greece as a threat to economic stability and probably illegal. Leaked extracts from an internal report appeared in the Frankfurter Rundschau and may have contributed to a fresh day of mayhem for Greek bonds. Investors were already digesting reports that Greek residents had shifted €10bn (£8.8bn) abroad over the first two months of the year. The yield on two-year Greek bonds surged by 136 basis points in early trading to 8.3pc, up from 5.2pc last week. The market stabilised later as Athens announced a 40pc cut in the budget deficit over the first quarter, suggesting that austerity measures are bearing fruit.
BIS: Bond Investors Are Fools, Western Debt Much Higher Than Official Figures, Recovery of World Economy May Be "Crushed" In a new report, the Bank for International Settlements (BIS) - often called the "central banks' central bank" - points out that bond investors are not as smart as they think, that Western debt is much higher than officially reported (since contingent liabilities and pension debts are excluded from official numbers), and that the recovery of the world economy may be crushed by fiscal problems.
The Greek people are being punished for Europe's errors By Ambrose Evans-Pritchard - Telegraph.co.uk The moment of "Ultima Ratio" has arrived for Greece. Brussels has failed to bluff investors with fudges that mask the battle between Germany and France over the shape of Europe. Last week's rise in spreads on Hellenic two-year bonds to 730 points over German debt is proof that Greece cannot tap capital markets at bearable cost. It must spiral into default unless the EU-IMF rescue mechanism is activated. "There is no point waiting for an accident to happen," said Nomura's Laurent Bilke.
Is A Big US Bank Betting On A Greek Default In 11 Days? Submitted by Tyler Durden - ZeroHedge.com Bankingnews.gr has disclosed something interesting. According to the Greek website, an account, allegedly a large US bank, has been dumping, in what it classified as "panic selling", its holdings of a 10 Year GGB maturing on April 20, 2010, or in 11 days. What is unclear is whether the bank has been trading for its own account or for a client. What is clear, is that the seller is certainly not too convinced that the bond will see a repayment of principal when it matures, in other words believes that Greece will go bankrupt before April 20th.
The Coming European Debt Wars by Michael Hudson - newdeal20.org Fasten your seatbelts. The world is in for a bumpy ride on the debt default trail. Government debt in Greece is just the first in a series of European debt bombs that are set to explode. The mortgage debts in post-Soviet economies and Iceland are more explosive. Although these countries are not in the Eurozone, most of their debts are denominated in euros. Some 87% of Latvia's debts are in euros or other foreign currencies, and are owed mainly to Swedish banks, while Hungary and Romania owe euro-debts mainly to Austrian banks. So their government borrowing by non-euro members has been to support exchange rates to pay these private-sector debts to foreign banks, not to finance a domestic budget deficit as in Greece.
Fitch Cuts Greek Debt Rating to Just Above Junk NewsMax.com Greece was hit with another financial headache Friday after Fitch Ratings slashed its credit rating on the country's debt because of mounting concerns about the government's ability to get a handle on its debt mountain. Fitch, one of the world's big three ratings agency, lowered its rating by two notches to BBB negative and said that the outlook on the country remains negative. The downgrade means that Greek debt remains investment grade - but only just. Another downgrade would make Greece's debt junk status - an ignominious position for a country using the euro currency.
Peter Schiff on the Financial sense News Hour
Soros Says U.S. Has Probably Struck Deal With China on Yuan By Scott Hamilton and Francine Lacqua -- April 9 (Bloomberg) -- Billionaire investor George Soros said China and the U.S. have probably come to an agreement on the yuan amid speculation the currency’s 21-month-old peg to the dollar may be scrapped. “I think a deal has been struck,” Soros said in a Bloomberg Television interview today in Cambridge, England. “What the arrangement is, I’m not privy to, but I think there is an understanding and there will be flexibility on both sides.”
China and the yuan: What's at stake By Chris Isidore NEW YORK (CNNMoney.com) -- Chinese and U.S. officials are reportedly close to a deal on boosting the value of China's currency, the yuan -- the first step to making U.S.-made goods more competitive versus Chinese exports. U.S. Treasury Secretary Timothy Geithner was in China for a surprise meeting this week, and Chinese President Hu Jintao is due in Washington next week.
China Imports Trigger Trade Deficit, Add Pressure for Yuan Move By Bloomberg News -- April 12 (Bloomberg) -- China’s trade deficit is likely to be only temporary and surging import costs may fuel inflation, bolstering the case for a stronger yuan. A surplus may return this month, according to the government and analysts from Bank of America-Merrill Lynch and ANZ Banking Group Ltd. In March, imports jumped 66 percent from a year earlier, leaving a $7.2 billion trade deficit, China’s first since 2004, the customs bureau reported April 10.
China may raise rates soon, revalue yuan by Oct (Reuters) - China might increase interest rates as early as this month, but Beijing will probably not resume yuan appreciation as soon as that, a senior government economist said on Friday. Another one-off currency revaluation looked unlikely, said Zhu Baoliang, chief economist at the State Information Center (SIC), a think-tank that comes under the National Development and Reform Commission, China's powerful planning agency. "I believe a band widening is possible but another one-off revaluation is unlikely. The yuan might be pegged to a basket of currencies," he told Reuters.
China March Trade Deficit Complicates Yuan Issue By J.R. WU - WSJ.com BEIJING—China ran its first monthly trade deficit in six years in March, data issued Saturday show, a development that, while likely temporary, was quickly seized on by the nation's Commerce Ministry to argue against the need to revalue China's currency. With imports of commodities surging last month, China swung to a trade deficit of $7.24 billion in March from a surplus of $7.61 billion in February, according to figures issued by China's Customs agency. Overall imports were up 66% from a year earlier in March, with purchases of crude oil and copper at near-record levels in volume terms. The import bill was further boosted by rising commodity prices.
Economists warn against more aid By Stephen Dinan Congress considers extension of stimulus States say they've been kept afloat during the economic downturn by critical federal aid, but, with stimulus money set to run out soon, a report from conservative economists argues that another infusion would postpone, and could worsen, states' eventual reckoning with troubled budgets. Last year's stimulus bill designated hundreds of billions of dollars to states, either directly or indirectly. The aid peaked this year before dropping dramatically. States say they're still hurting, though, and Congress is trying to figure out how much more aid to extend, and for how long.
U.S. Faults Regulators Over a Bank By SEWELL CHAN - NYTimes.com WASHINGTON — Regulators failed for years to properly supervise the giant savings and loan Washington Mutual, even as the company wobbled under the weight of risky subprime mortgages, a federal investigation has concluded. The two agencies that oversaw Washington Mutual, the investigation found, feuded so much that they could not even agree to deem the company “unsafe and unsound” until Sept. 18, 2008.
White House to Meet on Financial Overhaul By DAMIAN PALETTA - WSJ.com WASHINGTON -- The White House has called a meeting of top lawmakers on Wednesday to discuss its effort to overhaul financial regulations as part of an aggressive effort to push legislation through by the Memorial Day recess. "Enacting financial reform has been a goal of President Obama's since well before taking office, and he will discuss the choice he sees in this debate -- whether to stand with the American people or stand on the side of the status quo," a White House official said. "We believe momentum is on the side of real reform for the American people and consumers."
Ron Paul's Texas Straight Talk 4/12/10: Solution to Economic Crisis is Freedom
Banks Sue to Prevent FDIC Sale of Failed Bank's Loan on W Hotel By James Sterngold -- April 9 (Bloomberg) -- Six banks sued in Georgia state court yesterday to stop the Federal Deposit Insurance Corp. from selling a loan it seized from failed Silverton Bank N.A., for development of a W Hotel in downtown Atlanta. The lawsuit claims that Silverton, which collapsed in May, mismanaged the loan for the 237-room W Hotel and condominium project and failed to tell participating banks about problems with the loan, which fell into default a year ago.
State's Tentacles Choke Freedom at Every Turn by Robert Higgs - LewRockwell.com The health care legislation recently bulldozed through Congress is only the tip of the iceberg. With some 2,400 pages of dense legalese – with thousands of additional pages of regulations implementing the legislation still to be written – this huge statute puts government in effective control of some of life's most intimate, personal, and important decisions: who will receive medical care, and when, where, and how it will be received. A popular slogan of the Italian Fascists under Mussolini was, "Tutto nello Stato, niente al di fuori dello Stato, nulla contro lo Stato" – meaning, "Everything for the state, nothing outside the state, nothing against the state."
Calif. Lawmakers Pass Housing-Crisis Tax Relief By THE ASSOCIATED PRESS - NYTimes.com SACRAMENTO, Calif. (AP) -- The Legislature passed a bill Thursday that could help many homeowners who were hurt by the housing crisis save thousands of dollars in taxes. The bill would provide relief for homeowners who received mortgage modifications, lost their homes to foreclosure or sold their houses for less than they owed on their mortgages. It would prevent the canceled debt from being treated as taxable income. Currently, some types of debts that are forgiven can be considered as income and taxed by the government, meaning that homeowners spared from an overwhelming mortgage can face huge tax bills.
Major U.S. banks masked risk levels: report (Reuters) - Major U.S. banks temporarily lowered their debt levels just before reporting in the past five quarters, making it appear their balance sheets were less risky, the Wall Street Journal said, citing data from the Federal Reserve Bank of New York. The paper said on Friday 18 banks, including Goldman Sachs Group (GS.N), Morgan Stanley (MS.N), J.P. Morgan Chase (JPM.N) Bank of America (BAC.N) and Citigroup (C.N), understated the debt levels used to fund securities trades by lowering them an average of 42 percent at the end of each period. The banks had increased their debt in the middle of successive quarters, it said.
Obama Rallies Markets With Policies That Resemble Rubinomics By Mike Dorning -- April 9 (Bloomberg) -- It’s never easy to separate politics from policy, and the past 18 months have only increased the degree of difficulty. The U.S. has been through a historic financial crisis followed by a historic election and a series of historic federal gambles -- from bailing out American International Group Inc. and General Motors Co. to passing a $787 billion stimulus and a $940 billion health-care reform bill. All that risk has made policy more complicated and politics more fraught.
Tom Woods on Freedom Watch: States Rights vs. Federal Law
Customers Sue Countrywide Financial Over Theft And Sale Of Personal Data By Tim Wilson - DarkReading -- Class-action suit seeks $20 million as well as answers about company's involvement Customers of Countrywide Financial have filed a class-action lawsuit over the 2008 data breach that enabled company insiders to steal and sell their personal information. According to a Courthouse News Service report, the class-action lawsuit on behalf of 16 plaintiffs seeks $20 million in damages, plus punitive damages. The data theft, originally attributed to a single employee working over a two-year-period, exposed tens of thousands of customer records.
Onerous New DOE Regulations Headed Our Way by F. Swemson - LewRockwell.com The Department of Energy announced Thursday that it has finalized the new and higher energy efficiency standards for several classes of appliances which they decided upon last year. Those standards can be found here. Warning! Keep your seat belts on, this is going to be a bumpy ride. The announcement from DOE Secretary Steven Chu says that these changes will save 164 Million Metric Tons of CO2, from entering the atmosphere due to our use of more efficient electrical appliances. Damn that's a lot of CO2............. Or is it?
Second Mortgages Vex Borrowers By JAMES R. HAGERTY WSJ.com After losing her condo in San Diego to foreclosure last year, Charissa Kolich thought that at least she was free of mortgage bills. But Wells Fargo & Co., which holds a home-equity loan made five years ago to Ms. Kolich, last month filed a lawsuit against her in the Superior Court of California, San Diego County, seeking to collect the nearly $72,000 it said she still owed on that second mortgage. "This was all kind of a shock," says Ms. Kolich, a food-service administrator recently diagnosed with inoperable brain cancer.
Mortgage Bonds Weather End of Fed’s Purchases By Jody Shenn April 12 (Bloomberg) -- Yields on mortgage bonds with government-backed guarantees fell relative to U.S. government debt in the first full week of trading after the Federal Reserve ended its unprecedented purchase program, bolstering credit for housing as the economy begins to create jobs. Yields on Fannie Mae’s current-coupon 30-year mortgage bonds declined to within 0.66 percentage point of 10-year Treasuries last week, according to data compiled by Bloomberg. Spreads shrank after widening from a record low 0.59 percentage point on March 29 to 0.69 percentage point April 1, a day after the Fed completed its $1.25 trillion program.
* * * * * Gerald Celente on Jeff Rense 08 Apr 2010
Carlsberg workers strike over beer drinking limit at work COPENHAGEN (AP) — Scores of Carlsberg workers walked off their jobs in protest Thursday after the Danish brewer tightened laid-back rules on workplace drinking and removed beer coolers from work sites, a company spokesman said. The warehouse and production workers in Denmark are rebelling against the company's new alcohol policy, which allows them to drink beer only during lunch hours in the canteen. Previously, they could help themselves to beer throughout the day, from coolers placed around the work sites.
Michigan's Stupak, a Tea Party Target, Is Retiring By JOHN FLESHER AP - ABCNews.com Democratic Michigan Rep. Stupak, targeted by tea party over health care vote, is retiring Rep. Bart Stupak, an anti-abortion Democrat targeted for defeat by tea party activists for his crucial role in securing House approval of the health care overhaul, said Friday he would retire from Congress this year. The nine-term congressman told The Associated Press he could have won re-election and insisted he wasn't being chased from the race by the Tea Party Express, which is holding rallies this week in his northern Michigan district calling for his ouster. Instead, Stupak said he was tired after 18 years in office and wanted to spend more time with his family.
Justice John Paul Stevens to Retire From Supreme Court By ARIANE de VOGUE - ABCNews.com A Liberal Voice for 34 Years, Stevens Clears Way for Obama's Second Nomination Justice John Paul Stevens, 89, who served on the high court for a near record breaking 34 years, announced his retirement today, giving President Barack Obama his second chance to name a Supreme Court justice. "Having concluded that it would be in the best interests of the Court to have my successor appointed and confirmed well in advance of the commencement of the Court's next Term, I shall retire from regular active service as an Associate Justice," Stevens wrote in a letter to the president, stating his retirement would be "effective the next day after the Court rises for the summer recess this year." The last day of oral arguments is April 28 and the last day of the court will be sometime in the last week of June.
Obama Justice Nominee Withdraws Amid Republican Opposition By Nicholas Johnston -- April 9 (Bloomberg) -- Dawn Johnsen, President Barack Obama’s pick to be a top Justice Department official, withdrew her nomination after opposition among Republicans in the U.S. Senate stalled her confirmation. Obama nominated Johnsen, 48, to lead the Office of Legal Counsel at the Justice Department more than a year ago. After being approved by the Senate Judiciary Committee on a party-line vote, the full Senate hadn’t acted.
Small Farms Balk at Food-Safety Bill By JEAN SPENCER - WSJ.com WASHINGTON—Congress's food-safety fight is nearing an end but small farmers still have a bone to pick with the legislation. The Senate version of a food-safety bill has attracted broad bipartisan support and is expected to pass easily soon after Congress returns from recess next week. Iowa Democratic Sen. Tom Harkin, a co-sponsor, predicted it would be "on the president's desk by May." But small farmers worry the measure's fees and inspection requirements would be ruinously expensive and are pushing for exemptions.
Tom Woods on Brian Wilson Show 4/7/10
Michigan college offers money back if grads don't get jobs LANSING, Mich. (AP) — Even as Michigan endures the nation's highest unemployment rate, there are jobs available in select fields for people with the right skills. Among the "hot jobs" highlighted by one college are pharmacy technicians, call center specialists, computer numerical control machinists and quality inspectors. The average wage for those jobs typically ranges from $12 to $16 an hour.
States Skip Pension Payments, Delay Day of Reckoning By GINA CHON - WSJ.com State governments from New Jersey to California that are struggling to close budget deficits are skipping or deferring payments to already underfunded public-employee pension plans. The moves could help ease today's budget pressures, but will make tomorrow's worse. New Jersey's governor, a fiscal conservative, has proposed not making the state's entire $3 billion contribution to its pension funds because of the state's $11 billion budget deficit. Virginia has proposed paying only $1.5 billion of the $2.2 billion required pension contribution. Connecticut Republican Gov. M. Jodi Rell is deferring $100 million in payments this year to the pension fund for state employees to help close a $518 million budget gap.
Ariz. House Approves Concealed Weapons Bill NewsMax.com The Arizona House voted Thursday to make the state the third in the nation to allow people to carry concealed weapons without a permit, sending the governor a bill that would allow Arizonans to forego background checks and classes that are now required. The legislation, approved by the House 36-19 without discussion, would make it legal for most U.S. citizens 21 or older to carry a concealed weapon in Arizona without the permit now required. Currently, carrying a hidden firearm without a permit is a misdemeanor punishable by up to six months in jail and a fine of up to $2,500.
Ron Paul on the Dylan Ratigan Show
Supreme Court Weighs Chicago's Strict Gun Ban By ARIANE de VOGUE - ABCNews.com (Mar. 2, 2010) Justices Hear Second Amendment Case: Right to Have Gun at Home? Otis McDonald, 76, is afraid for his life in his crime-saturated Chicago neighborhood and he is asking the U.S. Supreme Court to overturn his city's strict ban on handguns in the home. "In my home, this is the only time I worry," McDonald said. "There's more guns coming into this city than the police can take away from them. So if I've got a gun, and if others have guns in their homes to protect themselves, then that's one thing that police would have to worry about less." For nearly 30 years, Chicago has banned possession of handguns and automatic weapons inside city limits, one of the most stringent gun laws in the country.
Obama hosts two-day summit on nuclear security By the CNN Wire Staff CNN) -- President Obama hosts leaders from 46 countries for a two-day nuclear security summit starting Monday that will focus on how to better safeguard weapons materials, both old and new, to keep them out of the hands of terrorists. The gathering at the Walter E. Washington Convention Center in the nation's capital is considered an unprecedented effort to rally global action on securing vulnerable nuclear materials.
Across the U.S., Polish-Americans Mourn Crash By CHRISTOPHER RHOADS in New York and SCOTT KILMAN in Chicago - WSJ.com -- In shock from the plane crash that claimed the lives of the Polish president and other high-ranking officials, many of the estimated 10 million American citizens of Polish descent mourned Sunday across the U.S. Churches in Chicago, New York, Cleveland, Detroit and other cities with large Polish-American communities held special mass services to help their members cope with the tragedy, which coincided with the 70th anniversary of the massacre of thousands of senior Polish officers by Soviet authorities in the western Russian forest of Katyn. The plane that crashed Saturday was carrying Polish leaders to Katyn to commemorate the event, which for decades Russians denied ever happened.
Poland mourns as president's body arrives home Warsaw, Poland (CNN) -- The body of Polish President Lech Kaczynski, who was killed in a plane crash in Russia over the weekend, returned to tributes in his homeland Sunday afternoon. Soldiers in perfect step carried the casket from the plane that transported onto the tarmac, where mourners were waiting. Catholic priests recited prayers at the military airport before Kaczynski's daughter and twin brother, followed by others, took turns kneeling before the flag-draped casket.
UN Climate Talks ‘Fracturing’ as Negotiators Delay Decision By Ben Sills April 12 (Bloomberg) -- Negotiators at United Nations climate talks put off a decision on how to treat a U.S.-brokered agreement on global warming, reducing the chances for a new plan on limiting emissions of greenhouse gasses after 2012. After three days of discussions, delegates from 175 countries left it up to Margaret Mukahanana-Sangarwe, a diplomat from Zimbabwe chairing the talks, to decide what parts of the accord signed by President Barack Obama in December 2009 in Copenhagen to include in the UN’s official negotiating text.
A Prime Minister who knows something about the economy? Here's a quote - see if you can guess who said it and when: "The real problem we're left with is that we now have an economy which is so locked in to international trading, so dependent on what happens in America, that anything that happens in Wall Street reverberates around the world. Now the key lesson that we've got to take out of this is the necessity for governments of any political colour to work together to stop the excesses of the free market, because that's what's really been shown over the last few days." I'll put you out of your misery - it was none other than a very young-looking Tony Blair in 1987, just after the Black Monday crash, which obliterated prices on Wall Street. I wonder if he ever looks back and agonises about why he chose not to heed his own words?
BBC one o'clock news 20th October 1987 interview with Tony Blair
Ron Paul on Larry King Live (Hosted by Jesse Ventura)
Press TV-On the edge with Max Keiser -04-09-2010 (part 1)
Press TV-On the edge with Max Keiser -04-09-2010 (part2)
Press TV-On the edge with Max Keiser -04-09-2010 (part 3)
Goldman-style Capitalism: Separating Fools from Their Money By Bill Bonner - The DailyReckoning.com Baltimore, Maryland – Cut expenses. Go broke. Be happy. Everybody is convinced the market is going up. So what does the market do? It goes down – 72 points yesterday. What do you call it when the market goes down 72 points? A beginning! Well, we don’t know if it’s really the beginning of the end or not. We’ve seen more beginnings than we can count. Still, no sign of the end. But there must be an end out there somewhere. Always is. And look at what is happening in the gold market. While everyone has been watching health care…and stocks…and bonds, gold has been moving up. It rose another $17 yesterday to bring the price up to $1,151. Why is gold moving up? Because it anticipates higher inflation? Because it is afraid of government defaults?
The Guy Who Stole All Our Money Now Wants to Steal Our Paycheck, Too Ben Bernanke has funneled trillions of dollars worth of bailouts, guarantees and sweetheart deals to U.S. banks. This money was pickpocketed from you and me, directly (through government spending) and indirectly (increasing debt costs, future inflation, etc). Bernanke is now calling for tax increases and raising the possibility of reductions in entitlements such as Medicare and Social Security. Tax increases means we keep less from each paycheck. Reduction in services means that money we've already paid to the government (through social security, etc.) will now instead be paid to the bankers to service the U.S. debt. Isn't that like a guy who stole our money now trying to steal our paycheck, too?
Geithner and Qishan to Let Yuan Float By Addison Wiggin - The DailyReckoning.com 04/08/10 Baltimore, Maryland – Treasury Secretary Tim Geithner and Chinese Vice Premier Wang Qishan shared dim sum yesterday. The topic of their discussion has been clear for several days. But today, the conclusion is only dribbling out. According to a vague report by The New York Times, the Treasury will delay calling China a “currency manipulator,” for whatever that’s worth. In return, China will depeg the people’s currency from the US dollar…sort of. The renminbi will be allowed to float within a fairly tight range, much like the last depeg, which took place 2005-2008.
Foreclosed? Here comes the tax man By Les Christie NEW YORK (CNNMoney.com) -- Did you lose your house to foreclosure this year? Did your lender forgive some of your mortgage debt because you sold it for less than it was worth? If so, you could be facing a big tax hit. It is IRS policy to tax forgiven debt you are personally responsible for as if it is income. Say, for example, your credit card company settled a $10,000 debt for 50 cents on the dollar. You'd have a debt forgiveness of $5,000, which the IRS would count as income, just like your wages.
Next ‘Big Crisis’ Is Unfolding in Muni-Bond Market Commentary by Joe Mysak April 9 (Bloomberg) -- Look to municipal bonds for the next big disaster. That’s the advice of Richard Bookstaber, a senior policy adviser at the Securities and Exchange Commission. Writing on his blog this past week, Bookstaber said the next big crisis looked a lot like the last big crisis, in housing and credit. Conditions in the municipal-bond market match almost exactly the conditions that existed for the blowup that sparked the worst recession since the Great Depression, he said. I would agree with him up to this point. What he then predicts seems rather unlikely to happen.
Meredith Whitney: By Scott Cendrowski Obama credit card reform makes it "more expensive to be poor" (Fortune) -- Meredith Whitney made her name warning Wall Street hotshots that Citigroup was in serious trouble in 2007, just ahead of the financial crisis. Zeroing in on commercial banking has long been her specialty, but in a conversation with Fortune, she inverted her gaze, focusing on how the upheaval in big banking, especially in consumer credit, is affecting America's middle class. One thing remains the same: her outlook is grim.
Netanyahu cancels trip to Obama's nuclear summit By Douglas Hamilton Netanyahu fears Islamic ambush at conference JERUSALEM, April 9 (Reuters) - Israeli Prime Minister Benjamin Netanyahu has canceled a planned trip to Washington next week for President Barack Obama's 47-country nuclear security summit conference. He made the decision after learning Egypt and Turkey intended to raise the issue of Israel's presumed nuclear arsenal at the conference, a senior government official said on Friday. Israel is believed to be the only nuclear-armed power in the Middle East but has never confirmed or denied that it possesses atomic weapons. It has not signed the nuclear non-proliferation treaty, or NPT.
Obama & Co. Want National Biometric ID by Alex Newman - LewRockwell.com A bipartisan group of U.S. Senators is teaming up with the Obama administration to legalize illegal immigrants and require biometric national ID cards for every American worker, prompting a swift and bipartisan backlash across the nation. The proposal would unconstitutionally force nearly all Americans to obtain the new "tamper proof" Social Security cards while purporting to require that all employers purchase new $800 ID scanners. It would also provide a "path to citizenship" for the estimated 12 million to 20 million illegal immigrants currently living in America.
Liz Cheney: Obama Putting America on Path to Decline by Brian Montopoli - CBSNews.com NEW ORLEANS -- Liz Cheney kicked off the Southern Republican Leadership Conference here Thursday night with a direct and unapologetic speech attacking President Obama for his health care push, intelligence posture and foreign policy. Cheney told the roughly 3,500 conservative activists and donors gathered for the conference that there are three prongs to the president's foreign policy: "apologize for America, abandon our allies and appease our enemies."
Sovereign Debt Default: No Time Like the Present By Bill Bonner - The DailyReckoning.com 04/08/10 Baltimore, Maryland – While the markets are hot, the economy is cool. Nearly 7,000 people go bankrupt every day – a record number. And in March, M3, the broadest measure of the money supply, recorded its biggest drop ever. And get this. Peak to trough, December ’07 to February ’10, 8.3 million jobs were lost. As we reported yesterday, take away the statistical tricks and the number of people with real jobs actually fell last month – despite reports of an additional 163,000 new jobs in March. Consumer credit fell again in February – down $11 billion. To put this number in perspective, the US government has run about $2.5 trillion in deficits since the correction began. So, in spite of pumping monthly deficits on the order of $120 billion…consumer credit still sank by $11 billion. What can we say? It’s a Great Correction, after all.
'Gold could touch $1500 per ounce next year' Michael Berry (Commodity Online): The issues here that have been getting increasingly more difficult to handle are the deficits and the amount of debt that we have issued and continue to issue. To be able to push forward on what we're doing in this country, like saving the housing industry and the new healthcare bill will be difficult. They're going to cost a lot of money. They're not going to save us money. They're not going to reduce our deficits. They're going to increase them and they're going to have to be financed. My concerns are that sooner or later, the debt that we're using is going to be a bill that will come due. By that I mean that we will need to roll the debt forward— just like Greece must now do. We're very likely to have a bond refinancing situation that fails or partially fails. When that happens, interest rates are going up.
Gold Fluctuates on Speculation Rising Dollar Will Curb Demand By Pham-Duy Nguyen -- April 8 (Bloomberg) -- Gold fluctuated between gains and losses in New York, halting a five-session rally after touching a 12-week high, on speculation that a rising dollar will curb demand for the metal. The dollar rose as much as 0.6 percent against a basket of six major currencies, including the euro, before paring the gain. Some investors also sold after the metal surged to the highest price since January. “If you get a strong dollar, there are still traders out there who are going to sell gold,” said Frank Lesh, a trader at FuturePath Trading LLC in Chicago. “It’s a short-term trade.”
Jim Rogers Discusses Commodities Market, Gold Prices
Gold Strong on Global Fiat Currency Crisis Risk By: GoldCore - MarketOracle.co.uk Gold climbed steadily to as high as $1,153/oz in New York before reverting slightly to close with a gain of 1.56%. It has since range traded from $1,144/oz to $1,147/oz in Asian trading this morning. Gold is currently trading at $1,145/oz and in euro and GBP terms, gold is trading at €861/oz and £755/oz respectively. Gold rose some 1.5% to 2% in most major currencies yesterday including the US dollar, Swiss franc and the recently strong commodity currencies, the Aussie and Canadian dollars. Gold rose the most versus the embattled euro and against sterling. Gold is flat in most currencies today despite the growing concerns about Greece leading to risk aversion and a selloff in equity markets.
Eric Sprott Talks To Us About Gold, GATA, The IMF, And The Plunge-Protection Team SF Chronicle - sfgate.com Yesterday, we published an article about how the IMF wouldn't sell investor Eric Sprott any of the remaining 191.3 tonnes of gold it had left. We spoke with Alistair Thomson of the IMF and he clearly explained his reasonings behind not being able to sell Mr. Sprott gold. Among them:
The IFM only goes through a specific broker.
It only sells gold to sovereigns.
Thus, Sprott's desire to purchase IMF gold did not comply with 'protocol'.
Of course we want to hear all sides of the story, so today we spoke with Mr. Eric Sprott himself on the matter.
Sorry Eric Sprott, Vince Veneziani - BusinessInsider.com There's No Way You're Buying Gold From The IMF So here's the deal: a few weeks ago, hedge funder and investor Eric Sprott started up a physical gold bullion ETF that trades under the ticker "PHYS." The ETF IPO'd on February 26th with 40 million shares outstanding and the trust has listed assets of 13,685 ounces of gold owned, according to Jesse's Cafe Americain. Meanwhile, in mid-February, the IMF decided to sell a ton of gold. Specifically, 403.3 metric tonnes of the stuff. It sold 200 tonnes to the Reserve Bank of India, 10 tonnes to the Central Bank of Sri Lanka, and 2 tonnes to the Bank of Mauritius, a total of 212 tonnes.
Is the Sprott Physical Gold Trust in the Market Trying to Buy 10 Tonnes of Gold? JESSE'S CAFÉ AMÉRICAIN -- Something is powering the spot price of gold higher the past few days. Are the Chinese or some other entity claiming the 191.3 tonnes of IMF gold again? Perhaps relatedly, Sprott Asset Management is involved with a new physical gold bullion trust now trading in the States with the ticker symbol "PHYS." The IPO for the fund was last Friday 26 February, with a reported 40 million shares outstanding at 10$Cndn. There is no hard news yet on how much of the IPO was held by underwriters. In fact, most of the news on it is a bit dated.
Finding Safety in Gold and Silver By: The Gold Report - MarketOracle.co.uk Traditionally, the bond market is where investors have gone for safety in their portfolios. Discovery Investing pioneer Dr. Michael Berry says that investors may need to look elsewhere. In this exclusive interview with The Gold Report, Michael says the bill for deficits and debt in the U.S. will be coming due soon and that bond investors may be in for a rough ride. Michael says precious metals could be part of the safety portion of investment portfolios.
Emerging Market Inflation: Brace for Turbulence, Part II By Dan Amoss - The DailyReckoning.com 04/08/10 Jacobus, Pennsylvania – History shows that when the governments grow desperate to finance deficits, they get creative. During WWII, the US government needed investors to buy an unprecedented amount of Treasury bonds. Commercial banks loaded up on Treasuries, which limited the amount of credit that could be granted to the private sector. It may have been the patriotic thing to do, but the real returns from war bonds were very poor. Napier said, “That’s the type of society [the US and the UK] had to run to sustain our government debt. And I’m suggesting to you that these are exactly the sorts of things we have to look out for in our future.”
Greek tragedy, gold’s latest love! By Geena Paul LONDON (Commodity Online): The sub-prime crisis, recession, Dubai World disaster and now the Greek debt tragedy. What is the common link to all these incidents which happened during the past two years? Even as the world has been grappling with all these tragedies, there has been one market which was thriving on all these disasters. That is bullion. Gold always celebrates tragedies. And during these past two years there has been no dearth of tragedies in the world. And, gold has been on a high all through these catastrophes.
EU plan not halting Greek crisis By Elena Becatoros AP WashingtonTimes.com ATHENS (AP) -- Greece's borrowing costs spiked to a record high Thursday, intensifying the country's debt crisis and suggesting that a eurozone and International Monetary Fund rescue plan is providing little support for Athens' struggle to avoid default. The higher interest rates demanded by bond investors are potential poison for the Greek budget; unless they fall, the government will pay a massive premium to borrow and face a vicious cycle where higher borrowing costs fuel fresh default fears.
The Global Bubble Has Reflated By: Mike Stathis - MarketOracle.co.uk Back in the Spring of 2009, the World Bank forecast that the global economy would contract by 1.7% that year; the first global contraction since the Great Depression (yet another clear indicator we are in a depression). As it turns out, they were quite conservative (as you would expect). Latest numbers from the World Bank show a decline in global GDP by 2.2% for 2009. As I have alluded to on numerous occasions, it has been much of the developing world (China, Brazil and India) that have actually helped curtail the global contraction. Without their help, the global economy would have shrunk by around 3% in 2009, maybe more.
Is Goldman Sachs Playing Fair? By Armen Keteyian - CBSNews.com CBS News Investigates the Business Practices of the Most Profitable Investment Banking Firm Ask the average American worker about Wall Street, and they will shout about the bailouts, the bonuses and the excessive risk-taking that nearly took down the U.S. economy. "There's enormous tension, enormous envy," said Jon Corzine, who has served as governor of and as a senator from New Jersey. "There's an enormous gap between Wall Street and Main Street." CBS News chief investigative correspondent Armen Keteyian reports no one right now represents that gap more than the most profitable investment banking firm on Wall Street -- where Corzine was once CEO -- Goldman Sachs.
Goldman Sachs: Spinning Gold Janet Tavakoli - huffingtonpost.com Goldman Sachs claims great risk management skills, while it shirks responsibility for its role in the near collapse of the U.S. economy. The former is a myth, and the latter is a dodge. [1] As taxpayer wealth was destroyed, Goldman exploited the financial crisis it helped cause, while the U.S. was (and remains) at war. Goldman Sachs released its 2009 annual report today showing it made net revenues of $45.17 billion with net earnings of $13.39 billion. In its shareholder letter, Goldman says it repaid TARP money, but did not mention the massive new taxpayer subsidies it continues to enjoy. "Goldman did not and does not operate or manage our risk with any expectation of outside assistance." Yet due to the influence of highly placed Goldman Sachs former officers, Goldman received--and continues to receive--enormous assistance from taxpayers.
As Greek Bond Rates Soar, the Specter of Bankruptcy Looms By LANDON THOMAS Jr. - NYTimes.com LONDON — As interest rates on Greek debt spiral upward again, the question facing Europe is no longer whether Athens has the political will to cut spending and raise taxes to curb its gaping budget deficit, but whether Greece will run out of money before it gets the chance to do so. With the rate on 10-year Greek bonds reaching as high as 7.5 percent on Thursday, up from 6.5 just three days ago, the cost of insuring against a Greek default hit a record high. The message from the market could not be clearer: artfully worded communiqués from Brussels will no longer suffice. To avoid bankruptcy, analysts said, Greece needs a bailout from Europe, and fast.
China Appears Set to Make Its Exchange Rate More Flexible By KEITH BRADSHER - NYTimes.com HONG KONG — The Chinese government is preparing to announce in coming days that it will allow its currency to strengthen slightly and vary more from day to day, a move being taken for domestic policy reasons in China but likely to please the Obama administration, people with knowledge of the emerging consensus in Beijing said on Thursday. A change in Chinese currency policy would be a political windfall for President Obama and Treasury Secretary Timothy F. Geithner, who have maintained a scrupulous silence on the issue over the past month despite intense pressure from Congress for a confrontation with Beijing. Many members of Congress and economists say that by spending several hundred billion dollars each year to hold down the value of the renminbi, China has made its exports extremely competitive in foreign markets and taken away sales from manufacturers in the United States and other countries.
What China’s Currency Shift Could Mean By THE EDITORS - NYTimes.com China is expected to announce that it will allow the renminbi or yuan, to appreciate against the dollar in the coming days. The currency’s value would fluctuate day to day and any increase in value could be gradual and limited. Even so, the move would be good news for the Obama administration, because an undervalued renminbi keeps China’s exports cheap and makes American exports more costly by comparison.
What’s Good for China
A Slow Motion Train Wreck
Complicated Risks
Beijing Will Do What Benefits China
China on ‘Treadmill to Hell’ Amid Bubble, Chanos Says By Shiyin Chen April 8 (Bloomberg) -- China’s property market is a bubble that may burst by as early as this year, according to hedge fund manager James Chanos. The world’s third-biggest economy may need to keep up the pace of property investment because up to 60 percent of its gross domestic product relies on construction, said Chanos. The bubble may begin to “run its course” in late-2010 or 2011, he said in an interview on “The Charlie Rose Show” that will air on PBS and Bloomberg TV.
Treasury Secretary Geithner's Trade Diplomacy in China By JONATHAN BERR - DailyFinance.com Treasury Secretary Timothy Geithner squeezed in a trip to Beijing on his way home from a visit to India. His mission: to diffuse ever-increasing U.S. trade tensions with China ahead of a meeting next week between the two countries' leaders. He may find his counterparts in the People's Republic in a mood to compromise. According to most reports, the last thing the Chinese want right now is a dispute over whether they're keeping their currency, the yuan, artificially low. Famed short seller James Chanos and others are raising mounting concerns that the Chinese property market is in a bubble that's about to burst. Bloomberg News reports that Shanghai, China's wealthiest city, may impose a property tax. The central government has ordered local authorities to build low-cost housing for the poor, but like the U.S. before its economic collapse, many Chinese never contemplated a time when property values would decline.
Geithner Leaves Beijing After Talks With Vice Premier By Rebecca Christie April 9 (Bloomberg) -- U.S. Treasury Secretary Timothy F. Geithner left Beijing after meeting with a Chinese counterpart amid increasing speculation that the yuan may be revalued. Geithner and Vice Premier Wang Qishan “exchanged views on U.S.-China economic relations, the global economic situation and issues relating to” a May meeting of officials from the two nations in Beijing, according to a Treasury Department statement.
The Engineering of a Financial Crisis By: Sol Palha - MarketOracle.co.uk "Nothing is more common on earth than to deceive and be deceived." ~ Johann G. Seume, 1763-1810, German Theologist. The Dow continues to put in new highs but our 3 moving averages of new highs are trading well off the highs they put in last year. The 20 day moving average (current reading = 640) of new highs would have to surge past the 2500 mark to have a chance of putting in a new high. Based on this week's readings it would have to surge 400% from its current reading. It is very strange and disturbing that a market that appears to be strong is actually not as strong as it appears to be when one examines its internal structure.
What is Jamie Dimon trying to pull? By Simon Johnson (Fortune) -- Jamie Dimon could be the most dangerous person in America. It's not that he is incompetent and likely to lead his bank quickly onto the rocks. On the contrary, Mr. Dimon threatens our economic and political system precisely because he is so good at his job, and because he is determined to translate his recent success into making his bank even bigger. Dimon fully understands -- although he can't concede in public -- the private advantages (i.e., to him and his colleagues) of a big bank getting bigger. Being too big to fail -- and having cheaper access to funding as a result -- may seem unfair, unreasonable, and dangerous to you and me. But to Jamie Dimon, it's a business model -- and he is only doing his job, which is to make money for his shareholders (and for himself and his colleagues).
Greenspan Came Not to Save Consumers but to Bury Them By: Fred Sheehan - MarketOracle.co.uk April 7 (Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan defended the central bank's record on consumer protection in the years before the financial crisis.... "The Federal Reserve, often in partnership with the other federal banking agencies, was quite active in pursuing consumer protections for mortgage borrowers," Greenspan said in testimony for a hearing today of the Financial Crisis Inquiry Commission in Washington.
Congress's FCIC Nearly Nailed Former Citigroup Executives to the Wall -- Then Blew It Janet Tavakoli - HuffingtonPost.com -- Phil Angelides, Chairman of the Financial Crisis Inquiry Commission, had Robert Rubin, former senior advisor Citigroup (also former Treasury Secretary under President Bill Clinton, and former Co-Chair of Goldman Sachs), and Chuck Prince, former CEO of Citigroup, in the palm of his hand today. He asked them why they weren't alarmed for Citigroup in May of 2007, when the Bear Stearns hedge funds ran into trouble. He recalled they imploded in June 2007 and joked that it happened around the time of his birthday. Rubin and Prince shrugged it off, and Rubin that he didn't know about Citigroup's CDO troubles until the fall of 2007.
Congress Is a Criminal Syndicate By: Lew Rockwell - MarketOracle.co.uk The director of Trends Research Institute, Gerald Celente, comments on Congress taking a 2-week break while 200,000 American people may lose their unemployment benefits.
2 headed, 1 party system
Russia and U.S. Sign Nuclear Arms Reduction Pact By PETER BAKER - NYTimes.com PRAGUE — The United States and Russia opened what they called a new era in their tumultuous relationship on Thursday as they signed an arms control treaty and presented a largely united front against Iran’s nuclear program, marking a sharp change since they broke over the Georgia war two years ago. In a ceremony filled with flourish and the echoes of history, President Obama and President Dmitri A. Medvedev put aside the tensions of recent years to seal the New Start pact paring back their nuclear arsenals. The two leaders used the moment to showcase their growing personal relationship and a mutual commitment to cooperation on a host of issues.
Bernanke says policymakers prevented 'cataclysm' worse than Great Depression By Neil Irwin - Washington Post -- The world's economic policymakers successfully learned the lessons of the Great Depression, helping to avert a horrendous economic outcome from the 2008 financial crisis, Federal Reserve Chairman Ben S. Bernanke said Thursday. In a speech that harkened back to his academic specialty -- the economic history of the 1930s -- Bernanke sought to give some historical perspective to efforts by the Fed and other policymakers to combat the current economic downturn.
Totalitarian Collectivism: Part 5 -- ECONOMY By James Hall - CapitolHillCoffeeHouse.com Sartre Commentary - Economic commerce is the lifeblood of any society. In the simplest of terms, products and services are necessary for physical survival. The business history of the America saga developed under the direction of Alexander Hamilton. His view of commerce for America was to emulate the mercantile model of the British Empire.
Rubin: I learned of Citi's problems late ASSOCIATED PRESS WASHINGTON — Robert Rubin, a senior adviser to Citigroup Inc. at the time of its deep losses from subprime mortgages, said Wednesday that he learned belatedly that Citi had $43 billion in high-risk securities on its books. "I do not recall knowing before September 2007" that the bank had held onto the investments composed of repackaged mortgage bonds, Rubin said. In November 2007, Citigroup publicly estimated it would lose $8 billion to $11 billion in the fourth quarter that year from those securities.
2008 Market Crash Should be Investigated By Jeff Lukens - CapitolHillCoffeeHouse.com Almost two years after the mortgage crisis and stock market crash, no one seems to wonder about the “September surprise” that shifted the 2008 presidential election to an unknown leftist politician who had been elected to the Senate only two years before. A pulp-fiction writer could hardly have created a more contrived and bizarre story. But this was not make-believe. No, it is now our own gritty reality show that we only wish we could turn off. The week of Sept. 15, 2008, was a debacle of huge proportions. On Monday, Lehman Brothers filed for bankruptcy while other lending institutions lined up like dominoes teetering on the edge of bankruptcy. But the week was hardly over. On Thursday, an electronic run on the banks occurred. In an unprecedented move, the Treasury and the Federal Reserve had to act together to stop what had become a full-fledged panic. On Saturday, Sept. 20, The Wall Street Journal recounted events of that previous Thursday:
Will Rising Mortgage Rates Push Housing Into a Double Dip? By BETSY SCHIFFMAN - DailyFinance.com Federal Reserve Chairman Ben Bernanke has said in no uncertain terms that he wants to keep short-term interest rates low for an extended period of time. But that won't stop mortgage rates from rising. Last week, the national average for 30-year fixed-rate mortgages climbed to 5.21%, the highest it has been since August 2009. Rates started edging up as the Federal Reserve stopped buying mortgage-backed securities last week. What does that mean for the housing market? Probably nothing good. The more expensive it is to buy a house, the less likely people are to do it -- especially given that so many potential homebuyers are either are cash-strapped, underemployed or simply can't secure financing because of lenders' rigid credit requirements.
Frank proposes federal first-right-of-refusal for expiring low-income housing By Clifton W. Williams for GovTrack Bill claims 200,000 low-income individuals at risk of paying higher rents in next 10 years Since the 1960s the federal government has supported the production of privately owned housing for low and moderate income families. The government has offered favorable mortgage financing and long term rental assistance in exchange for a twenty and sometimes forty years for the commitment to house low and moderate income families The concern has always been that as these contracts expire the owners will convert these properties to market rates which will result in a significant loss of affordable housing stock. On March 17th Rep. Barney Frank (D-MA4) sponsored H.R. 4868: Housing Preservation and Tenant Protection Act of 2010. On Wednesday, the House Financial Services Committee held a hearing to discuss the impact of the loss of affordable housing on residents, efforts to recapitalized and preserve the properties and the cost compared to building new units.
Why the Deleveraging of U.S. Households Matters By CHARLES HUGH SMITH - DailyFinance.com There has been a lot of chatter about "deleveraging" in the two years since Bear Stearns folded in March 2008. But what deleveraging means for U.S. households and the U.S. economy is rarely specified. In a nutshell, leverage means taking on debt, and deleveraging means reducing debt. A common example of leverage is a stock market margin account, in which an investor borrows money against his stock portfolio in order to buy more stock. As long as his collateral -- the value of his portfolio -- keeps rising, he can continue to borrow more on his margin account to buy more stocks.
H.R. 2454... Cap and Trade: A License Required for your Home Frank M. Carrio, CMI - ESOP Committee Member
A License Required for your house Thinking about selling your house - A look at H.R. 2454 (Cap and trade bill) This is unbelievable! Only the beginning from this administration! Home owners take note & tell your friends and relatives who are home owners! Beginning 1 year after enactment of the Cap and Trade Act, you won't be able to sell your home unless you retrofit it to comply with the energy and water efficiency standards of this Act. H.R. 2454, the "Cap & Trade" bill passed by the House of Representatives, if also passed by the Senate, will be the largest tax increase any of us has ever experienced. The Congressional Budget Office (supposedly non-partisan) estimates that in just a few years the average cost to every family of four will be $6,800 per year. No one is excluded. However, once the lower classes feel the pinch in their wallets, you can be sure these voters get a tax refund (even if they pay no taxes at all) to offset this new cost. Thus, you Mr. and Mrs. Middle Class America will have to pay even more since additional tax dollars will be needed to bail out everyone else. But wait. This awful bill (that no one in Congress has actually read) has many more surprises in it. Probably the worst one is this: A year from now you won't be able to sell your house. Yes, you read that right.
http://www.govtrack.us/congress/bill.xpd?bill=s111-1733 S.1733 Clean Energy Jobs and American Power Act Sponsor: Sen Kerry, John F. [MA] (introduced 9/30/2009) Related Bills: H.R.2454, H.R.2998 COSPONSORS(3) Sen Boxer, Barbara [CA] - 9/30/2009 Sen Cardin, Benjamin L. [MD] - 2/23/2010 Sen Kirk, Paul Grattan, Jr. [MA] - 10/5/2009 Feb 2, 2010: Placed on Senate Legislative Calendar under General Orders. Calendar No. 267.
Doctors: A tough job just got tougher By Parija Kavilanz - CNN What does the health care legislation mean to those providing care? CNNMoney.com asked physicians to weigh in. Here are their responses:
'Hamster on a wheel'
'Real problem is shortage of providers'
'Lack of meaningful tort reform is very concerning'
'School debt is a limiting factor'
'I may be out of business'
'Hopefully it's a step in the right direction'
Jobless claims soar By Chavon Sutton NEW YORK (CNNMoney.com) -- The number of Americans filing for unemployment insurance for the first time jumped last week, according to government data released Thursday. There were 460,000 initial jobless claims filed in the week ended April 3, up 18,000 from an upwardly revised 442,000 the previous week, according to the Labor Department's weekly report. Economists surveyed by Briefing.com expected new claims to fall to 435,000 in the week. The number of new claims were just below the level reached in the Feb. 27 week, when initial claims totaled 466,000.
New Jobless Claims Soar, but Continuing Claims Fall By JOSEPH LAZZARO - DailyFinance.com A mixed bag this week on the employment front, as jobless claims unexpectedly rose 18,000 to 460,000, in part due to a seasonal factor associated with the Easter holiday, the U.S. Labor Department announced Thursday. However, continuing claims dropped 131,000 to 4.550 million. Economists surveyed by Bloomberg News had expected jobless claims to fall to 436,000. Meanwhile, the four-week moving average inched higher to 450,250. A year ago, initial jobless claims totaled 643,000, continuing claims totaled 5.844 million, and the four-week moving average was at 643,000. Economists generally view the four-week average as a better indicator of unemployment conditions, as it smooths-out anomalies for strikes, holidays or other idiosyncratic events.
33 states out of money to fund jobless benefits By Hibah Yousuf - CNNMoney.com NEW YORK (CNNMoney.com) -- With unemployment still at a severe high, a majority of states have drained their jobless benefit funds, forcing them to borrow billions from the federal government to help out-of-work Americans. A total of 33 states and the Virgin Islands have depleted their funds and borrowed more than $38.7 billion to provide a safety net, according to a report released Thursday by the National Employment Law Project. Four others are at the brink of insolvency.
New college grads to make less $$$ By Hibah Yousuf NEW YORK (CNNMoney.com) -- College students gearing up to graduate this spring are likely to make less on their first job than those who got their degree last year, according to a report released Thursday. The National Association of Colleges and Employers said that average salary offers to 2010 bachelor's degree candidates are down 1.7% to $47,673, compared to $48,515 last year. Students seeking liberal arts degrees may face the hardest blow. Their average initial pay offers are down 8.9% to $33,540, based on data collected from college career services offices.
No Substitute for Crude Oil on the Horizon By: The Energy Report The Energy Report: Oil is now trading at around $80 a barrel. Is $80 a barrel a sustainable price? Do you expect it to trade higher this year? Mark Leggett: I think $80 is about the right price, given the current economic conditions. We still don't really have a strong visible demand recovery and we are still sitting on above-average petroleum product inventories. Eighty dollars or just above $80 may be the top end of the range. The average cost to produce a barrel of crude oil globally is above $75. That tells us that the range that makes sense to us on a sustainable basis is $75 to $80.
Cigarette Tax Bump in 15 States Lifts U.S. Fees to $2.35 a Pack By Tom Randall April 8 (Bloomberg) -- Cigarette taxes were increased in 15 states last year, bringing the national average to about $2.35 a pack as lawmakers aimed to discourage smoking and add more than $1 billion to government coffers, a U.S. report found. The mean increase was 52 cents, raising state taxes to about $1.34 on each pack, according to the study by the U.S. Centers for Disease Control and Prevention. The federal tax was also increased last year to $1.01 from 39 cents a pack.
Colo. deputy used stun gun on students LEADVILLE, Colo. (AP) - A sheriff's deputy in Colorado has been placed on unpaid administrative leave after he used a stun gun to shock 30 students at a high school career fair. Officials with Lake County High School, in the small central Colorado town of Leadville, say the students asked the deputy to shock them so they knew what it felt like. Two students were treated for minor burns at a local hospital and released. School Superintendent Betty Kokenes told Denver's KUSA-TV that she didn't know the stun gun was being used on the students and that it wasn't an authorized activity.
THE OKLAHOMA CITY BOMBING: From Red Dirt Report staff reports STILL SEEKING THE TRUTH, 15 YEARS LATER OKLAHOMA CITY -- Oklahoma City bombing victim's family members and survivors, along with investigative journalists, law-enforcement officers, private investigators, documentary filmmakers and attorneys impacted by the bombing will hold a press conference to review the unanswered questions and latest revelations pertaining to this very important part of U.S. history. Well-documented information contradicting the patently false, official account of the Oklahoma City bombing of April 19, 1995 as offered by the U.S. Department of Justice and the FBI will be reviewed. Why should any one of us be asked to remember the deaths of the Oklahoma City bombing victims in a lie?
Alex Jones’ Message to Patriots: Warn the nation that the Police State has arrived Incremental tyranny has marched, step by step, up to our door. Are we going to accept authoritarian control over our lives, travel, currency and economy? Will we actually accept martial law in the streets or the internment of “domestic terrorists” and political dissidents? We must fight back– peacefully, but not passively– and get this film out to all those unaware of FEMA camps, the police state and the high-tech control grid set-up to enslave 21st Century humanity. An enlightened freedom movement, with the principles of Henry David Thoreau, Gandhi, Thomas Paine and Martin Luther King, Jr. at hand, can stop this Police State in its tracks– but only by informing the populace about the true nature of the tyranny that has cropped up in the United States and around the globe. Take a bold stance, and say no to dehumanization in every form!
Invisible Empire Sneak Peek #1 - The Council on Foreign Relations
Death Of The Internet: Unprecedented Censorship Bill Passes in UK “Wash-up” process used to rush through draconian legislation as a pitiful handful of MPs attend debate Steve Watson - Infowars.net -- A draconian Internet censorship bill that has been long looming on the horizon finally passed the house of commons in the UK yesterday, legislating for government powers to restrict and filter any website that is deemed to be undesirable for public consumption. The “Digital Economy Bill” was rushed through parliament in a late night session last night after a third reading.
Tea Party Ads Target Stupak for ‘Betrayal’ on Health-Care Vote By Patrick O’Connor -- April 8 (Bloomberg) -- Tea Party activists started an advertising campaign against Representative Bart Stupak yesterday for backing President Barack Obama’s health-care bill when it was passed by the House last month. The Tea Party Express began a fundraising drive earlier this week to raise $250,000 from its more than 400,000 members to pay for television and radio ads against Stupak, the Michigan Democrat whose decision to support the final health-care bill upset his former allies in the anti-abortion camp. Stupak, 58, is the second Democrat to be targeted by the group’s political action committee, Our Country Deserves Better, spokesman Levi Russell said.
Expect a Democrat Slaughter in November By John LeBoutillier - CapitolHillCoffeeHouse.com Since the health care bill passed the Congress and was signed into law—two weeks ago—the President has simultaneously tried to win back independents (changing his position on off-shore oil drilling) and then lurched back to the Left with his (feel-good for the Left) decision to limit the potential use of nuclear weapons. But the real story is Obama’s approval rating has dropped five points since the supposed triumph of the health care passage. The CBS poll shows his approval rating down to 44% - down from 49% right after he signed the health care bill. And in the generic ballot question: which party will you vote for in this fall’s congressional elections, Republicans have taken a one point lead over the Democrats for the first time in over three years.
Peter Schiff Serves Tea Party Bullion and Politics by Mark Pazniokas - LewRockwell.com NORTH HAVEN (CT) – The two worlds of Peter Schiff merged over the weekend at a Holiday Inn hard by I-91, where he pitched investment advice and his U.S. Senate candidacy to Tea Party activists. Schiff covered subjects never broached in last week's tepid debate with two rivals for the Republican nomination, things like the merits of burying gold vs. stashing it off shore. He was invited to give two talks, one on his candidacy and the other on how to use gold as a hedge against an economic collapse that he has been predicting since 2007. Over three hours, Schiff seamlessly mixed business and politics, telling his audience some things it wanted to hear and a few it didn't.
It's Time To Part Company by Walter E. Williams - LewRockwell.com One political question we have to answer is whether George W. Bush or Albert Gore shall be president, and just which party will control the House of Representatives and the Senate. But I'd suggest that there's a far more important long-run question we must answer: If one group of people prefers government control and management of people's lives, and another prefers liberty and a desire to be left alone, should they be required to fight, antagonize one another, and risk bloodshed and loss of life in order to impose their preferences, or should they be able to peaceably part company and go their separate ways?
Senators voice doubts on nuke treaty By Eli Lake - WashingtonTimes.com Conservatives demand no missile-defense limits Key Senate conservatives are holding off support for the new arms treaty signed by President Obama and his Russian counterpart on Thursday and are seeking promises that the agreement will not limit missile defenses, arms verification and nuclear modernization efforts. "Republicans have made clear for months what needs to be done in order to move this process; there's been no ambiguity in our position on a strong missile defense, nuclear triad and the need to verify any treaty," said Don Stewart, a spokesman for Senate Minority Leader Mitch McConnell, Kentucky Republican.
Palin Says Obama's Nuke Stance Is Like a Kid Who Says 'Punch Me in the Face' ABC News' Teddy Davis reports: -- Sarah Palin is hammering President Obama for putting unprecedented limits on the use of U.S. nuclear weapons, comparing him to a kid in a playground who is asking for a punch in the face. "It's unbelievable. Unbelievable," said Palin on Wednesday evening while appearing on Sean Hannity's Fox News program. "No administration in America's history would, I think, ever have considered such a step that we just found out President Obama is supporting today. It's kinda like getting out there on a playground, a bunch of kids, getting ready to fight, and one of the kids saying, 'Go ahead, punch me in the face and I'm not going to retaliate. Go ahead and do what you want to with me.'
Palin: Obama nuke strategy is like kid saying punch me in the face
President Obama questions Sarah Palin's nuclear acumen (Reuters) - President Barack Obama on Thursday made clear he was not going to take advice from Republican Sarah Palin when it comes to decisions about the U.S. nuclear arsenal. Palin, the former vice presidential candidate, has not been shy about criticizing Obama's policies and this week weighed in on his revamped nuclear strategy, saying it was like a child in a playground who says 'punch me in the face, I'm not going to retaliate.' "I really have no response to that. The last I checked, Sarah Palin is not much of an expert on nuclear issues," Obama said in an interview with ABC News.
EXCLUSIVE: 'Not Much of an Expert' -- Obama Slaps Sarah Palin for Nuke Policy Criticism By KAREN TRAVERS - ABCNews.com Obama Also Confident Senate Will Ratify New Nuclear Treaty In Prague to sign a nuclear disarmament treaty with Russia, President Obama pushed back against Republican critics, including Sarah Palin, who say that his new nuclear stance is too soft and leaves the United States vulnerable to attacks. The scene Thursday at the historic Prague Castle in the capital of the Czech Republic was one of cooperation between the United States and Russia. But back home, Obama may face a challenge getting the treaty through the Senate, given Republican concerns.
President Obama questions Sarah Palin's nuclear acumen (Reuters) - President Barack Obama on Thursday made clear he was not going to take advice from Republican Sarah Palin when it comes to decisions about the U.S. nuclear arsenal. Palin, the former vice presidential candidate, has not been shy about criticizing Obama's policies and this week weighed in on his revamped nuclear strategy, saying it was like a child in a playground who says 'punch me in the face, I'm not going to retaliate.' "I really have no response to that. The last I checked, Sarah Palin is not much of an expert on nuclear issues," Obama said in an interview with ABC News.
OBAMA THE DESTROYER Michael Savage OBAMA IS LIKE A DESTRUCTIVE CHILD WHO TAKES APART A WATCH AND THEN CAN’T PUT IT BACK TOGETHER AGAIN. HE HAS TAKEN APART THE CAR INDUSTRY, PLACING IT UNDER FEDERAL CONTROL. HE IS DISMANTLING THE BEST HEALTHCARE SYSTEM IN THE WORLD, REPLACING IT WITH SOCIALIZED MEDICINE. AND TODAY, HE STARTED DESTROYING OUR MILITARY BY SIGNING AN INSANE NUCLEAR TREATY WITH RUSSIA.
Peter Dale Scott Reveals Secret Order within U.S. Gov. on Alex Jones Tv Hosted by Jason Bermas 1/4
Peter Dale Scott Reveals Secret Order within U.S. Gov. on Alex Jones Tv Hosted by Jason Bermas 2/4
Peter Dale Scott Reveals Secret Order within U.S. Gov. on Alex Jones Tv Hosted by Jason Bermas 3/4
Peter Dale Scott Reveals Secret Order within U.S. Gov. on Alex Jones Tv Hosted by Jason Bermas 4/4
Netanyahu to skip Obama's nuclear security summit From Ed Henry, CNN Israeli Prime Minister Benjamin Netanyahu has informed the Obama administration that he will not attend President Obama's nuclear security summit in Washington next week, according to a senior U.S. official familiar with the situation. The move could be a sign of further tension between the United States and Israel and may distract from the Obama administration's attempts to highlight the unprecedented nature of a 46-nation summit aimed at reducing nuclear weapons.
World powers hold UN meeting on Iran nuclear sanctions The UN ambassadors of six world powers have met in New York to discuss possible new sanctions against Iran over its nuclear programme. The envoys described the talks as worthwhile, and said meetings would continue in the coming weeks. China and Russia have so far refused to back the new measures, mainly aimed at Iran's Revolutionary Guards, proposed by the US and some European states.
PETROL HITS £6 A GALLON By Louise Barnett - DailyExpress.co.uk THE £6 gallon arrived at Britain’s petrol pumps yesterday as motorists ?continue to be hammered by Labour. Unleaded hit an average of 119.9p a litre for the first time ever, breaking the previous July 2008 record of 119.7p. But some forecourts are already charging 131.9p a litre – just a penny short of the £6 gallon. “This is a dark day for Britain’s hard-pressed motorists,” said the RAC. And there is worse to come, warned experts last night.
China Is Eager to Bring High-Speed Rail Expertise to the U.S. By KEITH BRADSHER - NYTimes.com BEIJING — Nearly 150 years after American railroads brought in thousands of Chinese laborers to build rail lines across the West, China is poised once again to play a role in American rail construction. But this time, it would be an entirely different role: supplying the technology, equipment and engineers to build high-speed rail lines. The Chinese government has signed cooperation agreements with the State of California and General Electric to help build such lines. The agreements, both of which are preliminary, show China’s desire to become a big exporter and licensor of bullet trains traveling 215 miles an hour, an environmentally friendly technology in which China has raced past the United States in the last few years.
Dr Deagle Show 111609 1/4-DR MIKE COFFMAN- BANKSTER BAILOUTS & WORLD CARBON TAX SCAM IMPORTANCE OF PRIVATE PROPERTY RIGHTS!! Cap & Trade is design to destroy free enterprise and private property rights.
Dr Deagle Show 111609 2/4-DR MIKE COFFMAN- BANKSTER BAILOUTS & WORLD CARBON TAX SCAM
Dr Deagle Show 111609 3/4-DR MIKE COFFMAN- BANKSTER BAILOUTS & WORLD CARBON TAX SCAM
Dr Deagle Show 111609 4/4-DR MIKE COFFMAN- BANKSTER BAILOUTS & WORLD CARBON TAX SCAM
Don't let anybody hold your Gold KingWorldNews.com - Interview - mp3 Harvey & Lenny Organ & Adrian Douglas Harvey & Lenny Organ & Adrian Douglas: Drop Another Bombshell In What Could End Up Being The Largest Fraud In History - I was contacted again by Adrian Douglas, Board of Director for Gata with another stunning new bombshell involving the man he testified with at the CFTC meeting Harvey Organ. Harvey, who was invited by the CFTC to testify and his son Lenny describe an eyewitness account with another piece of the puzzle in what could turn out to be the largest fraud in history. This time a large international bank with almost 15 million customers in 50 countries around the world becomes part of this unfolding saga. It is so hard to believe and unimaginable so let's continue our trip down the rabbit hole with another King World News exclusive interview.
Morgan Stanley to settle class-action lawsuit NEW YORK, June 12, 2007 (Reuters) - Morgan Stanley (MS.N) will pay $4.4 million to settle a class-action lawsuit with brokerage clients who bought precious metals and paid storage fees, according to a court filing. The proposed settlement, which must be approved by the federal court in Manhattan, includes a cash component of $1.5 million and economic and remedial benefits valued at about $2.9 million, according to a court filing on Monday. The suit, filed in August 2005, alleged that Morgan Stanley told clients it was selling them precious metals that they would own in full and that the company would store.
"My Son..Went Inside There And Basically Saw that the Vault was Empty." JESSE'S CAFÉ AMÉRICAIN -- Every day when I think I am going to get a day off from this story, some revelation seems to be come out, each as compelling, shocking, and suspicious as the others, but all fitting together in what looks like a nasty picture of reckless behaviour gone wrong developing. Apparently some banks and brokers had been selling gold and silver which they do not have. We know it happens because Morgan Stanley was caught doing it, and was even charging storage fees from unsuspecting investors. Do these banks not have auditors? Are the regulators sweeping this under the rug? Are the insiders and their spokespeople correct in just dismissing this as a problem, as was done with the subprime market even by Ben Bernanke himself before it collapsed into a bank run that shocked the financial system?
Is Canada's Only Bullion Bank Gold Vault Nearly Empty? FORT LEE, N.J., April 8 /PRNewswire In our last article we detailed how a silver short squeeze could be imminent, due to Andrew Maguire exposing how JP Morgan was able to manipulate down the price of silver on February 5th through naked short selling paper silver that doesn't physically exist. We also discussed how there could now be as much as 100 to 1 leverage in terms of paper gold/silver that trades in comparison to the physical gold/silver backing it.
Goldman Sachs Denies It Bet Against Mortgage Clients By Gavin Finch and Ambereen Choudhury April 7 (Bloomberg) -- Goldman Sachs Group Inc., the most profitable securities firm in Wall Street history, denied it bet against clients in the mortgage-derivatives market and said it was “grateful” for government assistance in the credit crisis. “Although Goldman Sachs held various positions in residential mortgage-related products in 2007, our short positions were not a ‘bet against’ our clients,” Chief Executive Officer Lloyd Blankfein and President Gary Cohn wrote in a letter introducing the firm’s annual report.
Citigroup Underwriter Warned of Mortgage Lapses By Bradley Keoun April 7 (Bloomberg) -- Citigroup Inc. executives were warned as early as 2006 that the bank routinely bought mortgages that violated its own standards, the former chief underwriter for Citigroup’s consumer-lending group testified. Richard Bowen determined in mid-2006 that more than 60 percent of mortgages bought from other firms and sold to investors such as Fannie Mae and Freddie Mac were “defective,” according to his prepared remarks today before the Financial Crisis Inquiry Commission in Washington. The panel is probing causes of the 2007 mortgage-market collapse and ensuing bank bailouts.
Paying for Medicare, Social Security weighs on economy By Neil Irwin and Lori Montgomery - Washington Post Federal Reserve Chairman Ben Bernanke sounds a warning on growing deficit Federal Reserve Chairman Ben S. Bernanke warned Wednesday that Americans may have to accept higher taxes or changes in cherished entitlements such as Medicare and Social Security if the nation is to avoid staggering budget deficits that threaten to choke off economic growth. "These choices are difficult, and it always seems easier to put them off -- until the day they cannot be put off anymore," Bernanke said in a speech. "But unless we as a nation demonstrate a strong commitment to fiscal responsibility, in the longer run we will have neither financial stability nor healthy economic growth."
Retirement delay seen key to solvent Social Security By Jennifer Harper - WashingtonTimes.com The national fear that Social Security and Medicare will go broke under the huge demands of aging baby boomers could be remedied by a major "tectonic" cultural shift. An unprecedented upturn in the number of older Americans who delay retirement is likely to continue and even accelerate over the next two decades, a trend that should ease the pinch, according to a Rand Corp. study released Wednesday. Funded by the National Institute on Aging, the research also suggested that lawmakers should consider dismantling barriers that discourage or penalize older workers from remaining on the job, and throw in some incentives to encourage employers to hire seniors.
Bernanke: Economy not 'out of the woods' By Colin Barr - CNNMoney.com (Fortune) -- The economy seems to be recovering but is "far from being out of the woods," Federal Reserve chief Ben Bernanke said in a speech Wednesday. Bernanke, speaking before the Dallas Regional Chamber business group, said unemployment remains one of the "toughest problems" for policymakers, and one that he expects to ease only gradually. Bernanke said he expects the Fed's easy money policies and a gathering recovery "will be sufficient to slowly reduce the unemployment rate over the coming year" from its current level of 9.7%. But he admitted that the jobless rate remains a major concern.
How $1 Trillion Time Bomb Posts a Phony Profit Commentary by Jonathan Weil April 8 (Bloomberg) -- The Federal Home Loan Banks are a frequently overlooked band of government-chartered cooperatives whose name screams systemic risk with every word. Federal means Uncle Sam. Homes are a declining asset. A loan is money out the door. And banks are the things that get taxpayer bailouts when they’re too big to fail and enough of their loans go bad. So perhaps it shouldn’t come as a surprise that these 12 regional lenders collectively suffered massive losses last year. What’s astonishing is that you wouldn’t know it by looking at their bottom-line earnings or from the strange way their regulator measures their capital cushions.
The Rules are Written to Protect the Wealthy and the Powerful By DEAN BAKER The Myth of Market Fundamentalism -- Progressives have wailed against “market fundamentalism" for the last quarter-century. They complain that conservatives want to eliminate the government and leave everything to the market. This is nonsense. The Right has every bit as much interest in government involvement in the economy as progressives. The difference is that conservatives want the government to intervene in ways that redistribute income upward. The other difference is that the Right is smart enough to hide its interventions, implying that the structures that redistribute income upward are just the natural working of the market. Progressives help the Right’s cause when we accuse them of being “market fundamentalists,” effectively implying that the conservatives’ structuring of the economy is its natural state.
Bam man pitching (VAT) national sales tax By GEOFF EARLE, TONY DAVENPORT - NYPost.com Acknowledging it would be a highly unpopular move, White House economic adviser Paul Volcker said yesterday the United States should consider imposing a "value added tax" similar to those charged in Europe to help get the deficit under control. A VAT is a national sales tax that, like state and city sales taxes, would be collected by retailers. Volcker, at the New-York Historical Society, told a panel on the global financial crisis that Congress might also have to consider new taxes on carbon and energy. "The President has passed historic tax cuts for middle-class families and continues to push for more tax cuts. The President is not proposing to cut the deficit at the expense of middle-class families," said a White House official asked for comment.
I.M.F. Says West Bank Economic Growth Is Imperiled by Israel and Arab States By ETHAN BRONNER - NYTimes.com -- JERUSALEM — The International Monetary Fund is preparing a report on the Palestinian economy that praises the actions of the West Bank government and the large donations of Western countries, especially European ones, but argues that healthy recent growth rates are imperiled by the parties that claim to have the most at stake — Israel and the Arab states. “There is a very high risk that the growth of the last year will not last,” Oussama Kanaan, head of the fund’s mission to the Palestinian territories, said in an interview ahead of a meeting in Madrid next week of donor countries where he will present the report. “There has been no additional significant easing of restrictions by Israel so far in 2010. And there is a lack of donor support, especially among the Arabs, who need to give in a more systematic and predictable way to build investor confidence.”
Goodbye Paper Money: Scott Thill - SilverBearCafe.com Does It Mean More Ways for the Banks to Screw Us? The spiral of economic calculation is dizzying, when you factor in inscrutable fees and other invisible transactions banks attach to the light-speed movement of our money. Currency has come a long way in the past few thousand years of human existence. Ancient Turkey started using hybrid silver and gold coins around 640 B.C. and the Chinese started passing paper around 800 A.D. But it wasn't until the middle of the 20th century that Diners Club finally invented credit cards, or that electronic transfer payment systems like PayPal threw dirt on the century's grave in the late '90s. And now that the 21st century has fully arrived on the heels of both a harrowing terrorist attack targeting finance nerve centers in New York City and an economic depression downsizing everything from global bank accounts to job prospects, it is high time we rethought how we should pay and get paid to live and die.
Ahmadinejad promises 'crushing response' to Obama's nuclear plan
Iran derides Obama's 'cowboy' nuke stance By Ali Akbar Dareini and George Jahn - AP TEHRAN (AP) -- U.S. allies on Wednesday lined up behind President Obama's new policy aimed at reducing the likelihood of nuclear conflict. But Iran, classified as a possible target under the guidelines, dismissed it as a "cowboy" policy by a political newcomer doomed to fail. Russian President Dmitry Medvedev -- in Bratislava, the Slovak capital, for an official visit -- did not address the issue before leaving for Prague to sign a landmark treaty Thursday with Mr. Obama aimed at paring U.S.-Russian strategic nuclear weapons by 30 percent. But Washington's supporters in Asia and Europe welcomed Mr. Obama's pledge Tuesday to reduce America's nuclear arsenal, refrain from nuclear tests and not use nuclear weapons against countries that do not have them.
Key developments that may push up gold price Commodity Online Gold prices in the near-to-medium term will be affected by four prospective developments: The strength of Euro, the size of US Federal debt, eastern demand and Western appetite for gold ETFs, according to Jeffrey Nichols, Senior Economic Advisor to Rosland Capital and Managing Director of American Precious Metals Advisors. The Greek Rescue package is vague and the attention of the currency and financial markets could shift fous from Greece to one or another EU nation with excessive sovereign debt, Jeff Nichols said. Indeed, credit default swap markets are again signaling rising anxiety, not only over Greek debt but also over the sovereign debt of Portugal, Spain and Italy. In the near term, another run on the euro could again send gold lower, possibly even below the psychologically important $1100 level, he added.
Gold Revving Up For Pop to 1245? By: Rick Ackerman - GoldSeek.com Having spent more than a month in limbo, gold now lies just inches from triggering a potentially explosive rally. Before yesterday’s sharp surge, disappointment in the form of leaden price action had dogged bulls since early March, when Comex futures failed by a hair to surpass an important prior peak after trending higher for five days. A Formula 1 racer might as well have blown a head gasket a hundred yards from the checkered flag.
Finding Safety in the Precious Metals Michael Berry - GoldSeek.com . . . . The issues here that have been getting increasingly more difficult to handle are the deficits and the amount of debt that we have issued and continue to issue. To be able to push forward on what we're doing in this country, like saving the housing industry and the new healthcare bill will be difficult. They're going to cost a lot of money. They're not going to save us money. They're not going to reduce our deficits. They're going to increase them and they're going to have to be financed. My concerns are that sooner or later, the debt that we're using is going to be a bill that will come due. By that I mean that we will need to roll the debt forward—just like Greece must now do. We're very likely to have a bond refinancing situation that fails or partially fails. When that happens, interest rates are going up.
Jim Grant Presents A Prospectus For The United States, by Tyler Durden - ZeroHedge.com Discusses The Death Penalty For US Coinage Debasers Jim Grant joins Morgan Stanley (and contrary to Rosenberg's expectations) in anticipating US rates to rise promptly, primarily due to the world's negative "reappraisal of the US Treasury." This is not so much a debate on inflation or deflation, as it is a call on the (un)trustworthiness of the US as a lender. To that end, Grant has put together a Treasury prospectus (which we will post as soon as we procure it) which as Jim puts it "is a compendium of the salient facts about the Treasury as if it were an issuer that did not have a printing press... All you need to know about the credit risk of the US." The first risk factor, via the GAO, "improper payments that should not have been paid by the Treasury totalled $98.7 billion, equivalent to 5% of Treasury outlays."
James Grant Says U.S. Treasury Yields `Likely' to Rise
China, other Asian countries and gold - why they underpin the price Author: Lawrence Williams - MineWeb.net -- Developments in China, India and elsewhere in Asia and the Middle East, look like they are underpinning the gold price nicely and limiting downside risk. In his latest analysis of the gold sector, U.S. precious metals economist, Jeff Nichols, poses the question: "Will strong physical demand from China, India, and other important Asian gold markets continue to underpin the price, set an effective floor beneath the market, and limit downside risks?" He goes on to answer his own question in the affirmative, pointing out that there has been recent strong gold demand from the East Asian and Middle Eastern region which also serves as a reminder of the region's growing importance in the world of gold. Although different in many respects (economically, politically, culturally) many countries across Asia and the Middle East share an historical affinity and allegiance to gold as an adornment, as a symbol of wealth and good fortune, and as a preferred vehicle for saving and investment, he avers.
Alert that Euro on verge of real crisis by Christopher Laird, PrudentSquirrel.com Something big is up, and it’s possible the Euro is going into a real crisis within two months…Is this the next big market surprise ala Lehman? Not exactly like Lehman, but of the scale of that crisis that shook the entire world and almost caused worldwide bank shutdowns in Fall 2008? I am beginning to think so, and have been discussing this looming new worry for subscribers, IE we are right at the cusp of something big for the Euro and the European Union, not only financially but very much so politically. Imagine what a real Euro crisis would do to – everything! Alert that Euro on verge of real crisis We are so concerned by recent developments with Greece as a canary in the coal mine for the Euro that we just issued an alert to subscribers that we foresee a big blow up for the Euro in about roughly one month’s time. That is USD bullish and gold bullish, and bearish for about everything else out there. . .
Greenspan grilled as US bank reform rumbles ahead By Kevin Drawbaugh and Glenn Somerville WASHINGTON, April 7 (Reuters) - Alan Greenspan -- once revered as the oracle of economic wisdom -- defended his now deeply flawed legacy on Wednesday before a U.S. panel investigating the origins of the 2007-2009 financial crisis. As Senate aides worked behind the scenes to hammer out a bill tightening bank regulation, the Financial Crisis Inquiry Commission hammered on Greenspan at the first of three days of hearings that could sharpen the financial reform debate. Greenspan, 84, chaired the U.S. Federal Reserve for nearly two decades. He testified before the 10-member commission in his usual scholarly manner, carefully parsing his answers.
Lowenstein: Thanks to Greenspan and Bernanke, The Next Crisis Could Be "Even Scarier" Alan Greenspan is on Capitol Hill today testifying in front of the Financial Crisis Inquiry Commission. The former Federal Reserve Chairman Alan Greenspan has come under increased scrutiny for his failure to anticipate the housing bubble. Roger Lowenstein, author of The End of Wall Street, says the criticism is deserved. In Lowenstein's view Greenspan made several key mistakes. -- Too Low for Too Long: "He never said 'gee maybe we shouldn't have left rates at 1% three years into a recovery' when housing is rising at double digit rates."
Rock and a hard place by Puru Saxena The developed nations are over-extended, their debt levels are ballooning and their governments are creating copious amounts of money. Put simply, most industrialised nations are now caught between a rock and a hard place. After years of excesses, the developed world is slowly beginning to realise that you cannot continue to live beyond your means and spend your way to prosperity. Today, US national debt stands just north of US$12 trillion, its fiscal deficit for this year alone should come in around US$1.6 trillion and the nation faces mind-boggling deficits for as far as the eye can see. Furthermore, demand for US government debt has begun to wane and this implies that the Federal Reserve will have to resort to creating even more money over the following years.
U.S. looks beyond currency talks with China The Obama administration is hoping that talks on Thursday between Treasury Secretary Timothy F. Geithner and a top Chinese official will advance a broader conversation about China's place in the emerging world economic order, a discussion that might focus in the short term on technical issues such as exchange rates but is rooted in deeper concerns. Geithner is expected to be in Beijing only a matter of hours to meet Chinese Vice Premier Wang Qishan, detouring on his way home from India for talks with a man who has been a key negotiator with the United States over global economic issues. Discussion of China's currency policy is expected to dominate a meeting that comes amid widespread concern that the renminbi is purposefully undervalued in order to make Chinese exports cheaper on world markets, and among initial signs that China might be preparing to relax its strictly controlled exchange rate.
Geithner to visit Beijing amid currency dispute By AIJAZ ANSARI (AP) MUMBAI, India - U.S. Treasury Secretary Timothy Geithner will visit Beijing for talks with a Chinese vice premier for economic affairs on Thursday, Geithner's spokesman said, in a sign the two sides are moving toward settling a dispute over China's currency controls. Geithner will meet with Vice Premier Wang Qishan, spokesman Andrew Williams said Wednesday, as the Treasury secretary ended a two-day visit to India. "The secretary and the vice premier have been working together to find an opportunity to meet for some time," Williams told reporters in Mumbai, the Indian financial capital.
Geithner’s visit to China raises renminbi hopes By James Fontanella Khan,Jamil Anderlini - FT.com Deal could be close on currency regime Timothy Geithner, US Treasury secretary, will make an unscheduled visit to Beijing on Thursday, suggesting an understanding could be close on China’s contentious pegged currency regime. Mr Geithner will meet Wang Qishan, the vice-premier responsible for economic affairs, after spending two days in India. He is also making a stop in Hong Kong on his way to Beijing to meet with top government officials and advisers on mainland Chinese affairs, Reuters reported.
Geithner Travels to China Bearing ‘Olive Branch’ By Rebecca Christie April 8 (Bloomberg) -- U.S. Treasury Secretary Timothy F. Geithner embarked on a previously unscheduled trip to China as the world’s third-largest economy weighs letting its currency appreciate. Geithner left India for a meeting with Chinese Vice Premier Wang Qishan in Beijing today, Treasury spokesman Andrew Williams told reporters in Mumbai. The meeting will be closed to the press. Geithner will stop in Hong Kong en route for talks with local leaders, according to a Treasury statement.
US waits to see how far China will go By Alan Beattie, Jamil Anderlini - FT.com Charles Schumer, US senator for the state of New York, is threatening legislation to punish China for manipulating its currency. Tim Geithner, Treasury secretary, is advocating caution and diplomacy. The White House is concerned about managing its wider relationship with Beijing. It is all beginning to look like 2005, when the Treasury secretary was John Snow and George W. Bush was in the White House. Back then, Mr Snow’s repeated insistence that a move towards a flexible exchange rate was imminent was vindicated in July when the renminbi undertook a small revaluation and was then permitted to crawl slowly higher within a trading band.
China Said to Consider Yuan Trading Versus Ruble, Won By Bloomberg News April 7 (Bloomberg) -- China is considering allowing the yuan to trade against the Russian ruble, South Korean won and Malaysian ringgit to promote its use in cross-border trade, an official at the China Foreign Exchange Trade System said. The People’s Bank of China is investigating the possibility of offering new currency pairs, said an official at the Shanghai-based interbank exchange, a subsidiary of the central bank. He asked not to be identified as authorities have yet to make a final decision. Traders now can buy or sell the yuan against the dollar, the euro, the yen, the Hong Kong dollar and the British pound.
Trump: China thinks we're dumb SOBs
China Inflation Seen at 15% With Wen Jiabao Losing Boom Control By Bloomberg News -- April 8 (Bloomberg) -- “Look at the scale of this,” said Li Chongyi, an engineer, as he watched a 4-kilometer line of trucks and earth movers busy quadrupling the size of Chongqing’s Jiangbei International Airport. “This will take years.” Jiangbei, which begins work on a third terminal when the second is done next year, is one of 15 trillion yuan ($2.2 trillion) in projects begun in 2009, almost twice the economy of India. Most were started by local governments as China’s stimulus package sparked a record 9.6 trillion yuan of loans.
UK needs 'drastic austerity measures' to prevent debt explosion By Ambrose Evans-Pritchard - Telegraph.co.uk -- Bank for International Settlements issues stark warning on debt as OECD cuts growth forecast for British economy. Britain will need "drastic" austerity measures to prevent public debt exploding out of control, the Bank for International Settlements (BIS), has declared. Interest payments on the UK's public debt will double from 5pc of GDP to 10pc within a decade under the bank's "baseline scenario" before spiralling upwards to 27pc by 2040 – by far the highest among the OECD club of developed countries. Greece fares better, while Britain's interest burden is far worse than Italy's.
Greece steps in to shore up banks By Ambrose Evans-Pritchard - Telegraph.co.uk Greece's debt crisis has reached a critical juncture after spreads on the country's bonds surged to the highest since the launch of the euro and the government released €17bn in special funds to shore up Greek banks. Greece's debt markets were battered for a second day as investors sought clarity on whether Athens was attempting to secure better terms for an EU rescue package or trying to exclude the International Monetary Fund from any bail-out operation. The yields on 10-year Greek bonds rose to 409 basis points above German Bunds, a level that threatens to cripple Greece as it struggles to raise or roll over about €20bn in debt over the next two months. Credit default swaps on Greek debt rose above Icelandic debt on Wednesday and are now far higher than those of Hungary and other states in IMF care.
Greek Default Unavoidable Without More Aid, Jen Says By Anchalee Worrachate April 7 (Bloomberg) -- Greece may default on its debt as early as this year without “extraordinary” financial assistance from the European Union and International Monetary Fund, said Stephen Jen at BlueGold Capital Management LLP. The challenges facing Greece are similar to those that confronted Argentina, which defaulted on $95 billion of debt in 2001, as the government enacts austerity measures to narrow the European Union’s biggest budget deficit, Jen, managing director at the hedge fund, said today in an interview in London. That may drive the Mediterranean nation into a recession, he said.
Greek politicians and people responsible for Greece's economic woes
Citigroup executives face Financial Crisis Inquiry Commission grilling Associated Press - guardian.co.uk First witness is former Federal Reserve chairman Alan Greenspan. Critics say his policy of keeping interest rates low encouraged lending to borrowers who had little or no chance of repaying Former executives of Citigroup could be in for some surprises when they appear before a panel investigating the roots of the financial crisis. Commissioners and staffers for the Financial Crisis Inquiry Commission are readying pointed questions for eight former and current Citigroup executives due to testify at hearings that begin today. Some questions are based on a review of about 2m pages of documents the commission has obtained, including 1m pages from Citigroup.
Goldman Sachs: No apologies By Aaron Smith, CNNMoney.com NEW YORK (CNNMoney.com) -- Goldman Sachs defended its controversial employee bonuses and multi-billion dollar relationship with AIG in its annual report released Wednesday, while downplaying its short-selling in the mortgage market. Much of the letter was devoted to describing Goldman's (GS, Fortune 500) role in the financial crisis and the recession, praising its own "strong performance" in 2009, which it referred to as a "year of resiliency."
Greenspan mauled over role in meltdown By James Politi and Alan Rappeport in Washington - FT.com -- Alan Greenspan, once lauded as maestro of the financial system, was on Wednesday subjected to a rare public mauling on Capitol Hill, accused of causing or at least failing to prevent economic meltdown. Phil Angelides, the former California state treasurer who leads the Financial Crisis Inquiry Commission, asked the former chairman of the Federal Reserve if the Bank’s failure to curb subprime lending as the housing bubble unfolded fell into the category of “oops”. “My view is, you could have, you should have and you didn’t,” Mr Angelides said.
Blame Europe, former Federal Reserve boss tells US inquiry into financial crisis Phillip Inman - guardian.co.uk -- Former Federal Reserve chairman Alan Greenspan blamed much of the credit crunch and resulting financial crisis today on rampant demand from Europe for exotic financial derivatives based on the sale of US sub-prime mortgages. Greenspan, who ran the US central bank for almost 20 years until 2006, said demand from Europeans for property investments that paid high rates of interest encouraged them to buy mortgage-backed securities that were tagged by credit-rating agencies as low risk
Greenspan defends decisions before panel investigating crisis By Neil Irwin and Renae Merle - WashingtonPost.com Former Federal Reserve chairman Alan Greenspan on Wednesday defended his stewardship of the U.S. economy in the run-up to the financial crisis, rebuffing accusations that regulatory and other failures by the Fed under his leadership were a major cause of the near-collapse of the financial system. Testifying before the Financial Crisis Inquiry Commission, a bipartisan panel established to investigate the causes and lessons of the crisis, Greenspan conceded little in response to aggressive questioning from some committee members.
Greenspan: 'I was right 70% of the time' By Ben Rooney NEW YORK (CNNMoney.com) -- Alan Greenspan acknowledged Wednesday that mistakes were made during his long tenure as chairman of the Federal Reserve, but he argued that the low interest rate policy he championed at the central bank didn't inflate the housing bubble. In testimony before the Financial Crisis Inquiry Commission, Greenspan said the recent financial meltdown was possibly "the most severe in history." He admitted that regulators failed to grasp the severity of the crisis, but he maintained that his policies and predictions were correct most of the time.
Greenspan deflects blame for crisis By Patrice Hill - WashingtonTimes.com Former Federal Reserve Chairman Alan Greenspan on Wednesday testified that mortgage giants Fannie Mae and Freddie Mac played a critical role in fostering an explosion of growth in the subprime mortgage market that led to the global financial crisis. Deflecting the blame from himself and the central bank, which had broad authority to regulate banks and the mortgage market, the former Fed chairman, in testimony before the congressional Financial Crisis Inquiry Commission, gave the most prominent voice to date to Republican charges that congressional meddling with Fannie Mae and Freddie Mac played a critical role in the run-up to the crisis that brought down the global economy in the fall of 2008.
The SEC Details Its New Asset-Backed Securities Regulatory Proposal By SARA HANSARD - DailyFinance.com -- The Securities and Exchange Commission today voted 5-0 to issue new regulatory proposals covering the $2 trillion-plus asset-backed securities (ABS) market. Chairman Mary Schapiro calls the plan a "fundamental revision" in how the ABS market would be regulated. "At one time, the securitization market provided trillions of dollars of liquidity to virtually every sector of the economy," Schapiro says. "But securitization has also fostered poor lending practices by encouraging lenders to shift their risk of loss to investors." Sound underwriting practices in the mortgage-backed securities part of the ABS market "took a back seat to immediate profits," she says, resulting in investors largely withdrawing from the market when those securities went so bad after the U.S. housing bust.
10 big commercial real estate busts As acute as the pain has been in the U.S. housing market, commercial real estate has been no stranger to trouble. Here is a glimpse of some high-profile victims that have been claimed so far.
Chase Sued: Allegedly Told Homeowner To Stop Payments, Then Foreclosed Arthur Delaney - HuffingtonPost.com JPMorgan Chase told a California couple to quit making mortgage payments in order to qualify for a loan modification but then foreclosed on their Sacramento home, according to a lawsuit filed in federal court. Faiz and Khadija Jahani called Chase in December 2008 because they were having trouble making their mortgage payments. According to the suit, they were told that they wouldn't qualify for a modification without being delinquent and that they should stop making payments for three months.
Toward a new capitalism By Suzanne Fields - WashingtonTimes.com Time to be less destructive - and less creative Among the angels who rebelled against God and followed Lucifer in Milton's "Paradise Lost," Mammon is the most intriguing. He was the "least erect" of the angels because he was forever lowering his eyes to the golden pavements of heaven. He turned away from the creator of those riches to fall in love with the luster of gold, missing the essential value of God's work. Gold became the idol to worship.
Here’s What the Housing Inventory Picture Really Looks Like Michael White - Implode-O-Meter The federal government has tried every manner of strange intervention to foolishly support the price of real estate. The trend in unit sales shows very little evidence of success. Setting aside for a moment the massive stupidity of trying to uphold pricing created by a delirious and mentally-retarded credit bubble, the feds have failed in one obvious area: They haven’t been able to make the monthly mortgage payment for 15 percent of homeowners. This wildly high number of individual financial failures makes the typical inventory of homes for sale petite and pretty. The consequences for the prices of homes is obvious. Massive new supply leads to massive new losses (see below). I don’t know what fraud they are going to think up to try to cover this up, but I know it will be as dumb as what they have already tried.
Los Angeles’s Credit Rating Reduced to Aa3 by Moody’s By Christopher Palmeri and Catarina Saraiva April 7 (Bloomberg) -- Los Angeles had the rating on $3.2 billion of debt cut to Aa3 from Aa2 by Moody’s Investors Service a day after Mayor Antonio Villaraigosa called for a twice-a-week shutdown of “nonessential” services that might last until July. The one-level downgrade cited the difficulty of balancing the budget of the nation’s second-largest city by population. The mayor, whose workforce totals 35,000, told CNN today that 2,400 employees would retire early and 1,000 other positions would be eliminated.
Consumer Credit in U.S. Fell by Most in Three Months By Vincent Del Giudice April 7 (Bloomberg) -- Consumer credit in the U.S. declined in February more than anticipated, indicating Americans are reluctant to take on more debt without further improvement in the labor market. Borrowing fell $11.5 billion, the most in three months, after a revised $10.6 billion January gain that was twice as much as initially estimated, the Federal Reserve said today in Washington. The decline in the February measure of credit card debt and non-revolving loans was worse than the lowest estimate in a Bloomberg News survey of 34 economists.
General Motors loses $3.4 billion By Chris Isidore NEW YORK (CNNMoney.com) -- General Motors reported $3.4 billion loss in the fourth quarter of 2009, but is on track to possibly return to profitability in 2010, the company said Wednesday. Chief Financial Officer Chris Liddell, who joined the company earlier this year, stopped short of forecasting a profit this year, but said that results in the recently-completed first quarter, which will be reported in May, and the outlook for sales the rest of the year gives the company hope that it is close to returning to the black for the first time since early 2007.
Hummer sale: Only 2,200 left By Peter Valdes-Dapena - CNNMoney.com NEW YORK (CNNMoney.com) -- General Motors made it official on Wednesday: It is shutting down the Hummer SUV brand and offering rich rebates in a bid to move the remaining 2,200 vehicles. Buyers can get $6,000 rebates on a 2009 model year Hummer H2 full-sized SUV or H3 mid-sized SUV. GM is also offering $5,000 on the 2009 Hummer H3T, a pick-up version of the H3, and $4,000 on the few 2010 H3T's that were made and remain in stock. Buyers with good credit can also get 0% financing for six years on all Hummer models.
The States Must Rise Again: By Selwyn Duke - CapitolHillCoffeeHouse.com The Only Way to Combat Obama's Socialist Agenda With the passage of ObamaCare coming on the heels of government takeover of industries and taxpayer-funded bailouts of the irresponsible, many are wondering how we can turn the socialist tide. They see Uncle Sam expanding, their rights and economic prospects shrinking and their voices ignored. For these people, November cannot come soon enough. But November is not the ultimate solution. In the political universe, seven months is an eternity, and we cannot know precisely how public sentiment will evolve. Besides, the chances of Republicans retaking both Houses are slim and, even if they do, there’s no guarantee they’ll rise to the occasion. Some will be Scott Brown types — not the sort to give us tradition we can believe in.
Tom Woods vs Neil Siegel on States' Rights - NPR Debate 3/23/10
Dissent with Authority by Joseph Russo - FinancialSense.com One of the most essential elements present at the very founding of America was that of well-reasoned and persistent dissent. A healthy and aggressive dissent against proclamations of those in authority often results in clearer perspectives on matters of substantial import. Things can get ugly when peaceful means in resolving such dissent go unheard. Case in point was the violent and bloody revolution ground in dissent, which was the ultimate cost of freeing America. Without inherent unwavering confidence to intensely question, prudently conclude, and decisively take action, the founders would have failed in their valiant effort to break free from those who bound them. In our view, things are no different today than they were then.
FBI Arrests Man Said to Threaten Pelosi on Health Law By Karen Gullo and Justin Blum April 7 (Bloomberg) -- A man arrested by the FBI for threatening U.S. House Speaker Nancy Pelosi was allegedly upset over federal health care legislation passed last month, two law enforcement officials said. Gregory Lee Giusti, 48, of San Francisco, was detained today and will appear in federal court there tomorrow, said Joseph Schadler, a spokesman for the Federal Bureau of Investigation. The charges against Giusti are sealed, he said in an e-mail.
New nuclear arms policy shows limits U.S. faces By Mary Beth Sheridan - Washington Post In a landmark speech in Prague last year, President Obama pledged to "put an end to Cold War thinking" and move toward a world without nuclear weapons. This week, that soaring vision came down to Earth, with the issuance of a new policy reflecting the limits the president faces. Obama's nuclear policy breaks with the past by narrowing the circumstances under which the U.S. government says it will use the devastating weapons. But on one point after another, the changes are gradual rather than transformational.
Hackers can be traced to Chinese ring, report says By Cara Anna AP - WashingtonTimes.com Data was stolen from India, Dalai Lama BEIJING | China-based hackers stole Indian national security information, 1,500 e-mails from the Dalai Lama's office and other sensitive documents, a report said Tuesday. Researchers at the University of Toronto said they were able to observe the hacking and trace it to core servers in China and to people based in the southwestern city of Chengdu. The researchers said they monitored the hacking for the past eight months. The report said it has no evidence of involvement by the Chinese government, but it again put Beijing on the defensive. Separate reports earlier this year said security investigators had traced attacks on Google and other companies to China-based computers.
Southern China suffers worst drought in memory By Malcolm Moore in Shanghai - Telegraph.co.uk The whole of Southern China is in the grip of the worst drought in living memory, leaving at least 18 million people without access to drinking water, according to the government. Since 1517, when records began in the small Chinese village of Xiazha, there has always been water in its three wells. This spring, however, the wells dried up. "I'm 83 years old, I've never seen anything like this," said Yang Kuanren, a villager in Xiazha, in Guangxi province. "Not a single drop of water can be seen in our wells. For hundreds of years, we have relied on those wells for irrigation and drinking water and we do not know what to do. "It is time to start planting the fields, but the earth is so dry we cannot even plough it."
Obama weighs new peace plan for the Middle East By David Ignatius - WashingtonPost.com Despite recent turbulence in U.S. relations with Israel, President Obama is "seriously considering" proposing an American peace plan to resolve the Palestinian conflict, according to two top administration officials. "Everyone knows the basic outlines of a peace deal," said one of the senior officials, citing the agreement that was nearly reached at Camp David in 2000 and in subsequent negotiations. He said that an American plan, if launched, would build upon past progress on such issues as borders, the "right of return" for Palestinian refugees and the status of Jerusalem. The second senior official said that "90 percent of the map would look the same" as what has been agreed in previous bargaining.
Barack Obama orders killing of US cleric Anwar al-Awlaki By Tom Leonard - Telegraph.co.uk Barack Obama's administration has authorised the assassination of the radical Muslim cleric Anwar al-Awlaki, a rare move against an American citizen. The Yemen-based al-Awlaki has been linked to the Fort Hood massacre and the attempt in December to blow up a Detroit-bound jet by a man wearing explosives in his underpants. The decision to add him to the US hit list required a National Security Council review because of his citizenship. Officials said US intelligence had argued that the cleric now posed a direct threat to America, an al-Qaeda recruiter who had graduated from encouraging attacks to active involvement in them.
Karzai rhetoric threatens U.S. offensive By Ashish Kumar Sen - WashingtonTimes.com Government resists reform as coalition fights Taliban Afghan President Hamid Karzai's public accusations of vote-rigging against the West are eroding support among international backers already concerned about rampant corruption in his government and are jeopardizing a major U.S. offensive in the heartland of the Taliban, analysts say. International efforts to combat terrorism in the region, and to stem Afghanistan's drug trade, rest on Mr. Karzai's ability to create a stable, credible administration that blunts the Taliban insurgency in a war-torn nation of clans and warlords.
Upheaval in Kyrgyzstan Could Imperil Key U.S. Base By CLIFFORD J. LEVY - NYTimes.com MOSCOW — The president of Kyrgyzstan was forced to flee the capital, Bishkek, on Wednesday after bloody protests erupted across the country over his repressive rule, a backlash that could pose a threat to the American military supply line into nearby Afghanistan. Opposition politicians, speaking on state television after it was seized by protesters, said they had taken control of the government after a day of violent clashes that left more than 40 people dead and more than 400 wounded. The instability called into question the fate of a critical American air base in the country.
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When Soda Was a Nickel and Social Security Wasn’t Much More by Vedran Vuk - FinancialSense.com Every generation scolds the next one down the line and blames society’s ills on the guy up at bat. Considering past policy decisions, this common perspective doesn’t make much sense. Just look at the Great Depression generation, both known for its great character as well as the worst policies of the century. Clearly, older generations did not always make the best decisions. One of those bad decisions, Social Security, still haunts America today like the grim reaper waiting to take his harvest. It’s strange to think the same men who courageously stormed the beaches of Normandy didn’t have the political courage to dismantle this ticking time bomb. If it wasn’t for WWII veterans, many believe that this article would be written in German. That might be true. But due to an exploding national debt and that generation’s failure with Social Security, we’ll be speaking Chinese sooner than German.
Western Civilization and the Economic Crisis: The Impoverishment of the Middle Class Andrew Gavin Marshall - SilverBearCafe.com When Empire Hits Home The western nations of the world have built their great wealth and societies on the exploitation and plundering of the people and resources of the rest of the world. The wealth, freedom, and structures of our societies have been built on the starvation, robbery, deprivation and murder of millions upon millions of the world's people, both historically and presently. It seemed for a time that "Western Civilization" had worked, even if only for the west. We saw the emergence and growth of a vibrant middle class, which has its origins in the Industrial Revolution, out of which we also saw the formation of the "nuclear family." The middle classes of the west grew in wealth, education, and access. While the great problems of the world, and for the majority of the world's people, persisted and expanded exponentially, the great purpose of the middle class was siphoned and expanded into facilitating the development of a massive consumerist society. The function of the middle class became that of consuming, not necessarily contributing to determining the direction of society.
Illusion of Prosperity Entering Its Twilight By: Rick Ackerman - GoldSeek.com Even if the U.S. economy has hit bottom – a prospect that we view as extremely unlikely -- there is almost no chance the recovery will restore the nation to economic health. No one knows this better than the Baby Boomers, vast numbers of whom have seen their retirement plans go up in smoke because of the wealth-destroying effects of the Great Recession. Tens of millions of Baby Boomers are parents as well, and they are just starting to come to grips with the possibility that their children will experience a declining standard of living in the decades ahead. As recently as three years ago, before the banking system and housing market collapsed, few would have believed America could fall so far, so fast. Now, with public, corporate and private debt hanging over us that has grown far too large to redeem, only a fool in denial could fail to see the dark shadow that has fallen over the economy.
Volcker: Taxes likely to rise eventually to tame deficit (Reuters) - The United States should consider raising taxes to help bring deficits under control and may need to consider a European-style value-added tax, White House adviser Paul Volcker said on Tuesday. Volcker, answering a question from the audience at a New York Historical Society event, said the value-added tax "was not as toxic an idea" as it has been in the past and also said a carbon or other energy-related tax may become necessary. Though he acknowledged that both were still unpopular ideas, he said getting entitlement costs and the U.S. budget deficit under control may require such moves. "If at the end of the day we need to raise taxes, we should raise taxes," he said.
The Great Correction…Still Pending By Bill Bonner - The DailyReckoning.com 04/06/10 Baltimore, Maryland – For more than a year, the “recovery” bounce in the stock market has refused to give up. The indexes have recovered more than 50% of what was lost. Technically, they look pretty good. What’s more, the S&P sells at more than 21 times normalized earnings, according to Robert Shiller’s latest tally. It seems like nothing can stop stocks now. Then there’s the Treasury market. Overall, yields remain remarkably low. It is almost as if Treasury buyers are unaware that they are being asked to finance the biggest increase in sovereign debt ever. It doesn’t seem to matter either that many of the applicants for money will be incapable of repaying it. Several sovereign debtors, including the US, have already reached the “point of no return,” according to professors Rogoff and Reinhard.
Foreclosures Are Rising By: Diana Olick - CNBC Real Estate Reporter The new foreclosure wave is here. Yes, banks are ramping up loan modifications and ramping up short sales and ramping up deeds in lieu of foreclosure, but the plain fact is that as the systems are oiled, the loans are moving through faster, and the pig in the python is showing its face. We won't get the numbers until next week, but sources tell me they will likely be a new monthly record. Tens of thousands of loans have been hitting the "notice of trustee sale" bin, and that means they are coming to foreclosure. The actual foreclosure numbers have been down recently because of all the modification efforts, but as we see more loans not qualifying for modifications and more loans defaulting on modifications, the foreclosure numbers rise.
Los Angeles Is About to Run Out of Cash By BETSY SCHIFFMAN - DailyFinance.com There may be signs of an economic recovery in the stock market, but times are still tough in Los Angeles: The city is expected to run out of cash as early as May 5, according to a desperate warning from City Controller Wendy Greuel. In a memo titled "URGENT CASH FLOW UPDATE," Greuel begs Los Angeles Mayor Antonio Villaraigosa and City Council members to approve a transfer of $90 million from an emergency reserve fund into the city's general fund to cover basic expenses, like payments for city employees.
Cash-starved Los Angeles may close city offices (Reuters) - Nearly all Los Angeles city offices would close for two days a week starting April 12 and lasting through the end of June under a plan proposed on Tuesday by the mayor of the second biggest U.S. city, which is running dangerously short on cash. Police, other public safety agencies and departments that generate revenue for the city would be exempt under Mayor Antonio Villaraigosa's plan, which comes a day after City Controller Wendy Greuel said Los Angeles is in an "urgent fiscal crisis" and just over four weeks away from being unable to pay its bills.
L.A. to Run Out of Cash in a Month, Controller Says By Christopher Palmeri - BusinessWeek.com April 5 (Bloomberg) -- Los Angeles will run out of cash on May 5, city Controller Wendy Greuel said today in a release in which she requested a $90 million transfer of reserve funds to pay bills. The controller said she received a letter from the Los Angeles Department of Water and Power today indicating the utility wouldn’t send an anticipated $73 million payment to the city’s general fund. That money is part of an annual contribution of 8 percent of power revenue that the utility makes in lieu of paying taxes to the city, according to Ben Golombek, a spokesman for the controller.
Gerald Celente on Russia Today 05 Apr 2010
Fed: Recovery may lose steam By Hibah Yousu NEW YORK (CNNMoney.com) -- Federal Reserve policymakers are worried that the economic recovery may lose steam going forward, despite recent moderate improvements, according to minutes from their recent policy meeting released Tuesday. Though the latest data suggest an uptick in economic activity, Fed members believe that some sectors of the economy could stifle overall growth, the minutes from the March 16 meeting said. "While participants saw incoming information as broadly consistent with continued strengthening of economic activity, they also highlighted a variety of factors that would be likely to restrain the overall pace of recovery, especially in light of the waning effects of fiscal stimulus and inventory rebalancing over coming quarters," the minutes said.
Summers to the US Economy: Bang, Zoom, Straight to the Moon! By Bill Bonner - The DailyReckoning.com 04/06/10 Baltimore, Maryland – No matter how absurd things get, they can always become more absurd. “Summers: US nears ‘escape velocity’ That’s the headline on the weekend Financial Times. Summers is jubilant. He got the latest employment figures on Friday. They tell the story of an economy that he thinks is headed into outer space, with 162,000 new jobs created in March. Hallelujah…all this intervention by the feds is paying off! Thank God Summers was on the job. If he hadn’t been…well, the economy would have had to get along on its own…right here on planet earth…just like it did for all those centuries up until the feds got control of it during the Great Depression (or shortly after).
Gold - Ready to Soar Howard Katz - SilverBearCafe.com Well, it's been a bad 5 months. Gold has mostly just gone back and forth, and gold bugs are wringing their hands in frustration. But this is the problem with using intuition in the markets. One intuitively remembers the recent past, and one forgets the larger picture. This is the big advantage of using charts. So let us look at a chart of this bull market going back to its start in early 2001 just slightly above $250. Well how about that gold bugs? Gold has multiplied by more than 4 times over the past decade! Viewed in the big picture gold has been steadily going up. And how well has the typical establishment follower done over the past decade? Well, we might take the S&P 500 as our measure. Over the past decade, the S&P 500 has declined by 25%. Now what would you prefer - 300% up or 25% down?
Gold at $2000, not too far a reality! By Ahmad Hassam Let many investment gurus keep talking of the demise of gold as an attractive investment instrument, but the yellow metal has remained one of the best long term investments in the current situation and is still undervalued! Why I say that gold is still undervalued? Well, right now gold is priced around USD 1,000 per ounce. A few months back gold had breached the historical barrier of USD 1200 per ounce. But was it a historical barrier. In the decade of 70s, gold market had seen an unprecedented bull rally. In 1980, gold prices had reached USD 850 per ounce. However, in terms of 1980 prices (inflation adjusted), today’s price of gold of USD 1100 per ounce is just equal to USD 425 per ounce.
US gold hits one-month high on currency uncertainty NEW YORK, April 6 (Reuters) - U.S. gold rose to a one-month high on Tuesday in the face of a stronger dollar, boosted by safe-haven demand driven by currency uncertainties and worries about Greece and some euro-zone economies.
Gold Gains as Euro Drop Drives Demand for Currency Alternatives By Pham-Duy Nguyen -- April 6 (Bloomberg) -- Gold climbed to a one-month high, erasing a decline, as Greek debt concerns spurred investors to buy precious metals as an alternative to holding currency. Platinum touched a 20-month high before giving up the gain. Gold priced in euros is up 11 percent this year, reaching a record today as the 16-nation currency dropped against the dollar on concern the European Union’s financial-rescue plan for Greece may fail. Greek 10-year bond yields climbed above 7 percent for the first time since January.
China is the future of Gold By Frank Holmes The new report “Gold in the Year of the Tiger” from the World Gold Council (WGC) predicts that gold consumption in China could double in the coming decade as a result of rising demand for jewelry, hard-asset investments and industrial uses. This forecast seems reasonable, and it lines up with what I’ve long been saying about the profound evolution in China’s economy – domestic consumption is replacing exports as the growth engine as more poor Chinese move up into the middle class and from there into the ranks of the wealthy. Tens of millions of people in China are joining the middle class every year – by some estimates, they already number more than the entire U.S. population and could double in the next decade.
Loonie straddles parity as investors seek haven Paul Vieira, Financial Post OTTAWA -- The Canadian dollar reached parity with its U.S. counterpart Tuesday morning, as investors looked to park their cash in the fundamentally-sound loonie amid troubles in Europe. Also, another rate hike from Australia's central bank appeared to heighten expectations that the Bank of Canada will soon follow suit. Parity was first achieved briefly at roughly 7 a.m. ET in London markets, hitting US$1.0001, achieving a level last hit in July 2008, before dipping down to the 99.70 US cents range. Yet, it catapulted toward parity again, reaching the US$1.0004 level as of roughly 9:45 ET.
Slow US Recovery Ahead: Fed's Kocherlakota By: Reuters via CNBC.com The U.S. economic recovery appears to be underway but housing will take a while to recover and the outlook for unemployment "is not promising", a top Federal Reserve official said Tuesday. Narayana Kocherlakota, the president of the Minneapolis Federal Reserve Bank, told the Minnesota Chamber of Commerce he expects U.S. gross domestic product growth of 3 percent per year over the next two years. In prepared remarks, Kocherlakota said he would be surprised if the U.S. unemployment rate, currently at 9.7 percent, were below 8 percent by the end of 2011.
Fed says "extended period" may last a long time by Pedro Nicolaci da Costa - Reuters (Reuters) - The Federal Reserve could keep interest rates ultra-low for even longer than investors expect if the economic outlook worsens or inflation drops, minutes from the central bank's last meeting suggested. The minutes of the Fed's March 16 gathering, released on Tuesday showed lingering concern about the economy's prospects, with policymakers indicating they were in no hurry to raise interest rates. "The duration of the extended period prior to policy firming might last for quite some time and could even increase if the economic outlook worsened appreciably or if trend inflation appeared to be declining further," the minutes said.
VP Biden, Peter Schiff, Michael Pento, Marc Faber: The Coming Depression
Banking Rules Breed Risks No One Sees Coming Commentary by Brendan Moynihan April 6 (Bloomberg) -- As Barack Obama’s administration turns its attention to financial-market regulation from health care, investors would do well to remember the last time the government gave us “the most far-reaching reforms of American business practices since the time of Franklin D. Roosevelt” as then-President George W. Bush said in 2002. The Sarbanes-Oxley Act of 2002, passed after a series of accounting fraud scandals including Enron Corp. and WorldCom Inc., was hailed as a great investor-protection achievement. It failed, though, to prevent accounting gimmicks that contributed to the largest bankruptcy in U.S. history six years later: Lehman Brothers Holdings Inc., at $639 billion was more than triple the Enron and WorldCom collapses combined.
Basically, The Federal Reserve Is Still Paranoid About 1937 Redux Joe Weisenthal - BusinessInsider.com -- The best thoughts on the Fed minutes come from BTIG's Mike O'Rourke, who makes two superb points, and ultimately concludes that the Fed board (Mr. Hoenixg excepted) is still in dove mode. The March FOMC minutes released today provide interesting insight into the thought process of the FOMC. In short, the tone of the minutes was one of a Fed that is very cognizant of the danger of a 1937 type scenario in which support is removed too early. The minutes recited the case made by the doves, who are currently dominating policy. “A few members also noted that at the current juncture, the risks of an early start to policy tightening exceeded those associated with a later start, because the Committee could be flexible in adjusting the magnitude and pace of tightening in response to evolving economic circumstances; in contrast, its capacity for providing further stimulus through conventional monetary policy easing continued to be constrained by the effective lower bound on the federal funds rate.”
A rush to buy failed Florida banks BY MARTHA BRANNIGAN - MIAMIHERALD.COM Dead banks auctioned off by the FDIC have become all the rage among the smartest money on Wall Street. Florida, which has dozens of small banks on the ropes, has emerged as one of the hot spots for such deals. John Kanas was at breakfast at the Four Seasons on Brickell Avenue recently when he bumped into Daniel Healy, his former right-hand man who had helped him build a big, profitable New York bank that sold for a princely sum. These days, the two veteran New York bankers are still chasing bank deals. But they're facing off as competitors in what is shaping up to be a gold rush to buy up failed Florida banks under lucrative deals with the Federal Deposit Insurance Corp. ``It was kind of strange. There we were: I was with a client. He was talking with a potential client,'' says Kanas, 63, former chairman and CEO of North Fork Bancorp -- and the man who led a group of private equity firms in a pioneering bid to acquire the collapsed BankUnited from the FDIC in May 2009.
Two Signposts & Stealth Run by Jim Willie - FinancialSense.com While the multitudes debate over whether an economic recovery is coming to the United States, signals sound loudly in harsh tones. While they point to the recent rise in the USDollar, signals sound loudly in harsh tones. Admittedly the signals are confusing, but they are important. The long-term bond yield for USTreasurys threatens the 4.0% mark. The crude oil price is close to threatening the $100 mark. Sleepy financial market anchors and mavens offer comment, but might miss altogether the significance of the signals. The signals clearly mean great strain on the credit markets still, and gradual decay of the major currencies led by the USDollar.
Yes We Can ... Walk Away from Bad Mortgages: Roger Lowenstein Blames the Banks by Heesun Wee - Tech Ticker As cracks emerge in the housing recovery and roughly a quarter of U.S. homeowners with a mortgage are "under water," the rhetoric surrounding voluntary, or "strategic", mortgage defaults is heating up again. "If American corporations and banks are walking away, why can't your neighbor or individual homeowners?," asks our guest Roger Lowenstein, a financial journalist and author of a new book, The End of Wall Street. "Why should the average homeowner make anything other than a cold, calculated business decision about whether it's worth it?"
The SEC Is Ready to Clamp Down on Asset-Backed Securities By SARA HANSARD - DailyFinance.com -- The Securities and Exchange Commission is set to release a major new regulatory proposal on Wednesday aimed at reining in the $2.1 trillion asset-backed securities (ABS) market that played such a prominent part in sparking the financial crisis. According to a knowledgeable source, the SEC will propose new restrictions on companies that issue these securities, the vast majority of which are backed by mortgages. The SEC's action follows on the heels of the Federal Reserve pulling out of the mortgage-backed securities (MBS) market on April 1. Since December, 2008, the Fed had bought $1.25 trillion in subprime MBS issued by Fannie Mae, Freddie Mac and Ginnie Mae in an effort to keep the MBS market going and help keep home-loan interest rates low.
Geithner in India for Economic Talks By HEATHER TIMMONS, VIKAS BAJAJ - NYTimes.com NEW DELHI - Kicking off a two-day trip intended to strengthen economic ties between India and the United States, Treasury Secretary Timothy F. Geithner met with top officials in New Delhi on Tuesday. The two sides pledged to cooperate to increase global economic stability, but no concrete goals, plans or business deals were unveiled. Together, India and the United States will play a "key role" in shaping consensus on international financial reform, Mr. Geithner said. Officials from the two countries promised to meet regularly to discuss macro-economic issues, their financial industries and how to pay for infrastructure improvements in both countries.
Geithner Sees ‘Huge Opportunities’ in U.S.-India Ties By Rebecca Christie April 6 (Bloomberg) -- U.S. Treasury Secretary Timothy F. Geithner said a new economic partnership with India offers “huge opportunities” for both nations as the world recovers from the worst recession since World War II. “We meet at a time of encouraging prospects for the U.S. and Indian economies, and the beginnings of global economic recovery,” Geithner said at a press conference today in New Delhi with Indian Finance Minister Pranab Mukherjee. “Our economic relationship presents huge opportunities for both India and the United States.”
Geithner hails economic partnership with India By Emily Wax - Washington Post NEW DELHI -- India and the United States have launched a new economic partnership that offers "huge opportunities" for both countries, U.S. Treasury Secretary Timothy F. Geithner said Tuesday during a two-day visit to India. The trip is part of the Obama administration's efforts to strengthen relations with one of the world's fastest-growing economies. Although few specifics were disclosed, Indian Finance Minister Pranab Mukherjee invited U.S. companies to invest in the country's booming construction industry, which is building airports, railroads and a planned 4,400 miles of highway a year in an effort to make freight traffic more efficient while spreading wealth to India's rural areas.
Key Political Risks to Watch in Greece By: Reuters via CNBC.com Why Investors Are Still Worried About Greece's Debt Greece is under huge pressure from markets and the European Union to deliver on pledges to slash a spiraling budget deficit that has shaken the euro zone. Even though it passed a draconian austerity package and received assurances that its EU partners and the IMF would not let it go bankrupt, Greece continues to be hammered by investors demanding twice the interest rate Germany offers. Polls suggest that a majority of citizens back the austerity plan, but discontent is rising among the groups most affected, notably civil servants, and the ruling socialists' own ranks.
Greece May Find U.S. Lukewarm to Dollar Bond on Deficit Concern By Lukanyo Mnyanda -- April 7 (Bloomberg) -- Greece may discover it’s no cheaper to sell bonds in the U.S. than in Europe as the government seeks to persuade investors it can plug the region’s biggest budget deficit. Investors may demand a yield of as much as 7.25 percent to buy Greek 10-year dollar bonds, 410 basis points more than benchmark German bunds and 330 basis points more than Treasuries, according to Paris-based Axa Investment Managers, which oversees about $669 billion. TCW Group Inc., which manages $115 billion in assets from Los Angeles, says Greece may have to offer a premium of as much as 400 basis points over Treasuries.
Concerns About Greece's Debt Again Unsettle Markets By JAVIER C. HERNANDEZ - NYTimes.com Worries that the European Union's plan to help Greece might fall apart rattled markets again on Tuesday, sending shares on Wall Street lower. Fresh doubts emerged after reports that Greece was seeking to sidestep aid from the International Monetary Fund because of concerns that the fund would impose severe austerity measures. Previously, the possibility of default had faded somewhat after Germany and France backed a plan to aid Greece. But Tuesday's reports rekindled fears about what Europe's monetary union could be in jeopardy.
Greek Deputy PM Says Portugal May Be Next Victim Reuters via CNBC.com The sort of debt problems seen in Greece are likely to spread further in the euro zone and Portugal could be the next victim, Greek Deputy Prime Minister Theodoros Pangalos was on Monday quoted as saying. Portuguese newspaper Jornal de Negocios also quoted Pangalos, who earlier this year accused Germany of not properly compensating Greece for World War Two occupation, as saying Germany's hard line in talks with Greece was based on a "moral, racial approach" and the idea that Greeks don't work enough.
Geithner Puts G-20 Power to the Test With Push for Firmer Yuan By Simon Kennedy -- April 7 (Bloomberg) -- U.S. Treasury Secretary Timothy F. Geithner is putting the Group of 20’s enhanced power to the test as he tries to prod China into revaluing the yuan. Seven months after the G-20 replaced the Group of Seven as the steering committee for the world economy and pledged to rebalance global growth, Geithner is calling such international forums “the best avenue for advancing U.S. interests” on China’s currency. G-20 finance chiefs meet in Washington in two weeks.
Obama to Press China on More ‘Market-Based’ Currency By Roger Runningen and Kate Andersen Brower April 6 (Bloomberg) -- President Barack Obama will keep pressing China to allow a more “market-based” valuation for its currency and likely will bring up the topic when he meets with Chinese President Hu Jintao next week, spokesman Robert Gibbs said. The value of the yuan is “of great concern to a number of economies around the world,” Gibbs said today at a White House briefing. Obama already has raised U.S. concerns about the yuan’s peg to the dollar in previous meetings, he said.
U.S. Will Lose a Trade War with China by Michael Pent - FinancialSense.com In light of the number of manufacturing and goods producing jobs lost in America over the past decade, it’s no wonder why many in Washington and on Main St. are clamoring for a trade and currency war with China. The raucous has grown so loud that Congress, Treasury and the Commerce department may soon be forced to declare China a currency manipulator. Senators Lindsey Graham (R) South Carolina and Chuck Schumer (D) New York have introduced legislation that would compel the Treasury to cite the Chinese as currency manipulators, which would allow the Commerce Department to impose duties and tariffs upon them.
Financial Crises and Newton's Third Law The Amphora Report by John Butler & Jon Boylan If more such “misregulation” is not the answer, then what is? Our solution is simple: Throw Wall Street to the wolves. Congress should pass a law making it illegal for the government or any agency thereof, including the Fed, to provide any form of direct financial assistance whatsoever, under any circumstances, to the non-depositor sources of funding for the financial system. How would financial markets respond? Presumably, absent any explicit or implied guarantees, the share prices of weak financial firms would decline, perhaps to levels implying a high risk of insolvency. The weakest institutions would probably also find that their bonds were trading at a large discount and would find it difficult, if not impossible, to refinance at attractive rates. They would be forced to shrink their balance sheets, if not immediately, then gradually over time. Larger (uninsured) depositors would begin to withdraw funds from those institutions deemed at growing risk of failure and place them in stronger institutions. They would also most probably spread deposits around, seeking greater diversification of risk. In general, capital would flow from weak to strong financial institutions, exactly what is needed to avoid a repeat of 2008.
Fed Officials Saw Recovery Curbed by Unemployment By Craig Torres April 6 (Bloomberg) -- Federal Reserve officials saw signs of a strengthening recovery that could be hobbled by high unemployment and tight credit, and some warned of raising rates too soon, according to minutes of their March meeting. “While recent data pointed to a noticeable pickup in the pace of consumer spending during the first quarter, participants agreed that household spending going forward was likely to remain constrained by weak labor market conditions, lower housing wealth, tight credit, and modest income growth,” minutes of the March 16 Federal Open Market Committee released today in Washington showed.
The End of Wall Street and the Fall of a Generation By: Gloria McDonough-Taub CNBC.com A great interview this morning on Squawk Box with Roger Lowenstein the author of, "THE END OF WALL STREET." In the book, Lowenstein theorizes that the financial crisis began long before the summer of 2008 and long before the failure of Lehman Brothers. In exposing the chain of events that led to the market's collapse (liquidity and capital) and the government's unprecedented bailout, Lowenstein pieces together the full story of "The End of Wall Street" as we knew it and what he calls, the fall of an entire generation.
Treasury Yield Rise Slowed as Currency Reserves Grow By Daniel Kruger and Matthew Brown April 6 (Bloomberg) -- The fastest growth in global currency reserves since the credit crisis is blunting a rise in Treasury yields even as concern increases about record U.S. borrowing to finance an unprecedented budget deficit. Worldwide reserve assets climbed 18 percent to $7.8 trillion in the 12 months ended in March, the biggest increase since the collapse of Bear Stearns Cos. in March 2008, according to data compiled by Bloomberg. Bank of America Corp. and Royal Bank of Scotland Group Plc forecast that growth in reserves, led by Asian nations, will sustain demand as Greece’s fiscal woes raise concern about the risk of holding sovereign debt and corporate bonds offer the slimmest yield premiums over Treasuries since November 2007.
Treasuries Gain as Yields Near June Highs Spur Auction Demand By Susanne Walker and Cordell Eddings -- April 6 (Bloomberg) -- Treasury notes rose for the first time in four days as yields near the highest levels since June lured investors to a record-tying $40 billion auction of three- year notes. Ten-year note yields declined from the four percent level amid concern the European Union’s rescue plan for Greece may unravel. Investors bid for 3.10 times the amount of securities offered at today’s three-year note sale, compared to a 10- auction average of 2.94. Some Federal Reserve officials warned of raising interest rates too soon, according to minutes of their March meeting.
20 percent of Florida foreclosure victims have income of $100,000 + The Truth About Mortgage.com -- Interesting little tidbit from the Florida Realtors regarding foreclosures and income levels. A new research study on foreclosures in the state over a three year period (March 2006 – February 2009) released today found that 20 percent undergoing foreclosure have annual income of $100,000 or more. Another 20 percent have annual income between $50,000 to $75,000, while just 27 percent have income of $35,000 or less. The big question is how many of these high-income foreclosures are strategic? After all, 48 percent of Florida mortgage properties are underwater, the third worst rate in the country behind just Arizona and hard-hit Nevada.
Winning the mortgage modification lottery By Les Christie NEW YORK (CNNMoney.com) -- When Bank of America announced last week that it would begin cutting loan balances for distressed mortgage borrowers, it marked a sea change in the way lenders deal with seriously delinquent loans. Until now, big lenders and servicers, such as BofA (BAC, Fortune 500), have only given principal reductions to a microscopic number of borrowers -- and only then as a last resort. But they're now having to play catch up to a new kind of mortgage servicer -- a so-called "specialty servicer" -- that is seeing success in avoiding foreclosures. They handle the worst-of-the-worst, loans at least 90 days late, and they commonly offer principal reductions.
Why Your House's Value (Probably) Won't Rise By EDWARD L. GLAESER - NYTimes.com For the fifth month in a row, Standard & Poor's Case-Shiller Housing Price Index figures for January that came out last week showed essentially flat prices. It has been 10 months since prices stopped their free fall, and there is a lot to like in price stability - not only relative to prices crashes but also relative to price booms. For years, many American homeowners persuaded themselves that real housing prices should rise year in and year out, but there is no reason to either expect or hope for perpetual price gains. One reason that people may have come to expect consistent housing price appreciation is that houses are assets, like stocks, and stocks should, on average, appreciate.
Housing collapse trickles down By Christopher Quinn - The Atlanta Journal-Constitution Christopher Norrell weighs the effects of the home-building crash in Cherokee and Forsyth counties by the bacon and eggs he hasn’t fried at his Cherokee Ranch Restaurant on Ga. 20. The highway once carried roofing crews, carpenters, construction foremen and lumber trucks to the new subdivisions spreading east and west from Canton and Cumming. Men with hammers and power saws would fuel up on Cherokee Ranch’s breakfasts or the meat-and-two-vegetable meals for $6.25 before heading to green fields and forests, where metro Atlanta’s exurban fringe was sprouting two-story houses.
Nearly 9 in 10 Americans believe it’s wrong to stop paying mortgage The Truth About Mortgage.com -- A shock poll from mortgage financier Fannie Mae revealed nearly nine in 10 Americans believe it’s unacceptable to stop making payments on an underwater mortgage. That includes seven in 10 who are currently delinquent on their own mortgages. However, 15 percent said financial distress would make stopping payments on an underwater mortgage acceptable. And both delinquent and current borrowers are more than twice as likely to seriously consider stopping their payments if they know someone else who has defaulted. So it sounds like a lot of respondents may be dodging the truth, or at least giving the standard “I wouldn’t do it” survey response.
U.S. Apartment Rents Decline as Vacancies at Record By Oshrat Carmiel April 6 (Bloomberg) -- U.S. apartment rents dropped in the first quarter and the vacancy rate remained at a record as unemployment near a 26-year high limited tenant demand. Actual rents paid by tenants, known as effective rents, declined 1.5 percent from a year earlier, Reis Inc. said in a report today. Asking rents fell 1.6 percent, according to the New York-based property research firm. Vacancies were unchanged at 8 percent, the highest level since 1980, when Reis began tracking the number, said Victor Calanog, director of research.
Government and Gasoline Dr. Ron Paul - SilverBearCafe.com As we head into the summer driving season and gasoline prices are again creeping up, the administration has announced plans to explore opening up more off-shore areas for exploration and drilling. On the one hand this can be lauded as a positive step. On the other hand, it is too little, much too late to have any meaningful or long-term effect on what Americans pay at the pump any time soon, if at all. Indeed, if increasing domestic energy production was really a priority, the administration would direct the EPA to remove its many roadblocks and barriers to energy production. In fact, abolishing the EPA altogether would do much to improve our country's economy. Instead of protecting the environment as they are supposed to do, most of what they do simply chills the economy. Polluters should be directly liable in court to any and all parties they harm, rather than bureaucrats at the EPA.
Communist leader hails health care as 'historic victory' By Aaron Klein - WorldNetDaily.com Hopeful Obama's new legislation will lead to socialist medicine as basic right President Obama's new health-care law is a "historic victory" that can lead to socialized medicine and "single-payer" health-care legislation, boasted Juan Lopez, chairman of the Communist Party USA in Northern California. "The signing into law of the new health care reform package has all the earmarks of a historic victory in more ways than one," wrote Lopez in a recent article in People's World, the official publication of the Communist Party USA.
Is 'ObamaCare' Destroying Wealth? By UWE E. REINHARDT - NYTimes.com A coalition of 300 large American corporations is lobbying Congress to rescind a tax provision in the recently passed health reform bill. This provision forces companies to book sizable write-offs in the current quarter. In its lead editorial of March 27-28, The Wall Street Journal decried the provision as "The ObamaCare Writedowns," writing that
ObamaCare passed Congress in its final form on Thursday night, and the returns are already rolling in. Yesterday AT&T announced that it will be forced to make a $1 billion writedown due solely to the health bill, in what has become a wave of corporate losses. This wholesale destruction of wealth and capital came with more than ample warning.
What might have prompted the Obama administration and its allies in Congress to embark on this alleged "wholesale destruction of wealth?" Is it, in fact, a wholesale destruction of wealth?
Sebelius Warns of Health-Insurance Scam Associated Press - WSJ.com WASHINGTON—Scam artists are taking advantage of the new health-insurance law to peddle phony policies. Health and Human Services Secretary Kathleen Sebelius said Tuesday she is warning state officials about a proliferation of scams involving phony health-insurance policies. Federal investigators are also on the lookout. Some of the hustlers are going door to door claiming there's a limited open-enrollment period to buy health insurance now. But the big expansion of coverage won't come for another four years, and door-to-door salespeople are unlikely to be part of the plan then.
Analysis of California Pensions Finds Half-Trillion-Dollar Gap By MARY WILLIAMS WALSH - NYTimes.com -- An independent analysis of California’s three big pension funds has found a hidden shortfall of more than half a trillion dollars, several times the amount reported by the funds and more than six times the value of the state’s outstanding bonds. The analysis was commissioned by Gov. Arnold Schwarzenegger, who has been pressing the State Legislature to focus on the rising cost of public pensions. Graduate students at Stanford applied fair-value accounting principles to California’s pension funds, using a method recently devised by two economists working in Illinois, Joshua D. Rauh of Northwestern University and Robert Novy-Marx of the University of Chicago.
Automaker Pensions Underfunded by $17 Billion By NICK BUNKLEY - NYTimes.com DETROIT — The pension plans at General Motors and Chrysler are underfunded by a total of $17 billion and could fail if the automakers do not return to profitability, according to a government report released Tuesday. Both companies need to make large payments into the plans within the next five years — $12.3 billion by G.M. and $2.6 billion by Chrysler — to reach minimum funding levels, according to the report, prepared by the Government Accountability Office. Whether the companies will be able to make the payments is uncertain, the report concluded, though Treasury officials expect the automakers will become profitable enough to do so.
Obama to Announce Limits on Nuclear-Arms Use in Policy Review By Nicholas Johnston -- April 6 (Bloomberg) -- President Barack Obama will today announce new limits on the use of U.S. nuclear weapons in a policy review that precedes the signing of a nuclear-arms treaty with Russia and a summit next week on nonproliferation. In his administration’s Nuclear Posture Review, Obama will limit the circumstances under which the U.S. would use nuclear weapons, call for cutting the number of weapons in the U.S. nuclear arsenal and emphasize non-proliferation, an administration official said on the condition of anonymity before the announcement of the new policy.
Boeing, U.S. Government Step Up Recruitment for ‘Cyberwarriors’ By Rachael King -- April 6 (Bloomberg) -- Kyle Osborn makes a convincing technical support representative. After just a few phone calls, he’s able to persuade the other party to download malicious software. Osborn’s ruse won’t undermine security of any actual computer networks. He’s working the phones during a mock hacking competition at California State Polytechnic University in Pomona, California. The late-March event is one of a growing number of challenges aimed at helping the government and corporations including Boeing Co. find security talent, Bloomberg BusinessWeek reported on its Web site.
Court Says F.C.C. Cannot Require 'Net Neutrality' By EDWARD WYATT - NYTimes.com WASHINGTON - A federal appeals court on Tuesday dealt a sharp blow to the efforts of the Federal Communications Commission to set the rules of the road for the Internet, ruling that the agency lacks the authority to require broadband providers to give equal treatment to all Internet traffic flowing over their networks. The decision, by the United States Court of Appeals for the District of Columbia Circuit, specifically concerned the efforts of Comcast, the nation's largest cable provider, to slow down customers' access to a service called BitTorrent, which is used to exchange large video files, most often pirated copies of movies.
FCC loses Comcast's court challenge, a major setback for agency on Internet policies Comcast on Tuesday won its federal lawsuit against the Federal Communications Commission in a ruling that undermines the agency's ability to regulate Internet service providers just as it unrolls a sweeping broadband agenda. The decision also sparks pressing questions on how the agency will respond, with public interest groups advocating that the FCC attempt to move those services into a regulatory regime clearly under the agency's control. The U.S. Court of Appeals for the District of Columbia, in a 3-0 decision, ruled that the FCC lacked the authority to require Comcast, the nation's biggest broadband services provider, to treat all Internet traffic equally on its network.
Militias, Political Activists, Government Agents, and Violence Against Politicians Szandor Blestman - SilverBearCafe.com -- Not long after the unconstitutional Obamacare bill was signed into law, I began to hear reports of violence against those congress critters who had voted for the law. I didn´t know quite what to think of this. On one hand, I know that violence against the system will only cause a backlash from the system. I do not condone violence in any way, shape or form, which is why I subscribe to libertarian thought, that one does not initiate violence against another, that one takes personal responsibility for his actions and that one leaves others free to do as they will as long as they don´t violate the individual rights of others. I think the vast majority of common folk understand and agree with this philosophy. This is why I was confused and concerned when I heard that corporate media talking heads had been blaming groups that many decent commoners relate to for the violence that had occurred.
Big Brother is Indeed Watching You: The Spy Side of Social Networking Posted by Brian Sommer - ZDNet.com The CIA will soon have nothing on the social networking watchdogs. Teneros has launched a product that is designed to let a company monitor its employees' social networking activities. Not that employers who wanted to see what employees past and present might say about them - but it would have been a labor intensive job. Now its automated - employers can discover and monitor their employees' Facebook and Twitter posts and tweets - with more sites promised (YouTube, MySpace, and LinkedIn, for example). Now there is a business benefit in some cases: let's say you as an employee want to spill the beans on an upcoming product or corporate strategy, go off on a politically incorrect tirade, use Facebook as a vehicle to blow the whistle on perceived or misperceived shady behavior, or start rumors of an impending acquisition or anything that might affect shareholder value. It may be important for the company to know these things, although clearly, one would hope that corporate-employee relations were such that better judgment on the employee's part might prevail.
Hutaree Suspected Former NATO Chief of Being the Antichrist Mark Hosenball - Newsweek.com -- The Hutaree Militia of southern Michigan, whose recently arrested leader and members consider themselves to be Christian warriors, evidently feared that a little-known (to most Americans) European politician and bureaucrat might be the antichrist. A lengthy posting on the Hutaree.com Web site, headlined "10 Horns of the European Super State; Mr. Europe and 7 years of peace in Israel," discusses at length-exhaustive length-a theory that Javier Solana, the former secretary-general of NATO and also a former senior official of the European Union, could be the antichrist. Part of the evidence for this notion, which seems to be popular among millennialist Christians and militia adherents, is the fact that most Americans have never heard of Solana-the reason for this being, according to the treatise's author, a conspiratorial "media blackout" on Solana's existence and activities.
Moody's Cuts Iceland's Outlook By ART PATNAUDE LONDON—Moody's Investors Service changed the outlook on the Icelandic government's credit rating to negative from stable, as uncertainty surrounding the country's ability to borrow abroad mounts amid the ongoing Icesave bank dispute. The outlook change moves Iceland to the verge of "junk" territory, which is any rating below Baa3. The ratings company said Iceland's short-term economic and financial prospects are under pressure as the government negotiates with the U.K. and the Netherlands over compensation for payments those governments made to depositors of Icesave, an Internet division of Landsbanki Islands that collapsed in October 2008.
7.8 earthquake off Sumatra NEW YORK — A magnitude 7.8 earthquake has rattled Indonesia's northwest island of Sumatra, the U.S. Geological Survey reported Tuesday. The quake struck at 2215 GMT (5:15 a.m. Wednesday local time) and was centered 205 kilometers (125 miles) northwest of Sibolga in Sumatra, and was 1,425 kilometers (880 miles) northwest of Jakarta, the U.S. Geological Survey said. A tsunami watch was issued for the region, said the Pacific Tsunami Warning Center in Honolulu.
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Bank of Mom and Dad Shuts Amid White-Collar Struggle By MARY PILON - WSJ.com FAIRFIELD, Conn.—When Maurice Johnson was laid off a year ago from his six-figure salary as a managing director at GE Capital, it wasn't his future he was worried about. It was his children's. The family income of the Johnsons is a fifth of what it used to be. And the children are about to feel the pain. Mr. Johnson's two oldest are attending his alma mater, Johns Hopkins University, at an annual cost of $50,000 apiece. And his youngest daughter, 15 years old, recently began her own college search. Mr. Johnson isn't sure whether he'll be able to help her to go to college, or even to get the older kids to graduation.
New Frontier's failure: By Sharon Dunn - GreeleyTribune.com Bank's closure set off chain reaction Many would say today that the closing of New Frontier Bank was a symptom of a greater problem, that of a faltering economy in which businesses could not make it. Greeley and its surrounding area saw its share of business closings in 2009, but only some could be directly connected to New Frontier. “If you look at the businesses that failed because they couldn't get financing or new loans because of the situation, there was a tremendous effect on the community,” said Carroll Miller, a former bank board member and an investor in the bank. Other closures — where business owners likely had no loans with New Frontier — happened throughout the year.
Obama Limits When U.S. Would Use Nuclear Arms By DAVID E. SANGER and PETER BAKER - NYTimes.com WASHINGTON — President Obama said Monday that he was revamping American nuclear strategy to substantially narrow the conditions under which the United States would use nuclear weapons. But the president said in an interview that he was carving out an exception for “outliers like Iran and North Korea” that have violated or renounced the main treaty to halt nuclear proliferation. Discussing his approach to nuclear security the day before formally releasing his new strategy, Mr. Obama described his policy as part of a broader effort to edge the world toward making nuclear weapons obsolete, and to create incentives for countries to give up any nuclear ambitions. To set an example, the new strategy renounces the development of any new nuclear weapons, overruling the initial position of his own defense secretary.
Inflation Meter Soars Over the Red Line By The Mogambo Guru - The DailyReckoning.com 04/05/10 Tampa, Florida – There has been a lot of discussion around here lately about inflation, mostly about who is divided up into the “We’re freaking doomed!” camp (me), and who isn’t in that camp, but instead are over in the other camp, which is, apparently, mostly everybody else, all of whom I consider to be morons who think that because the government, which has every reason to lie and whose entire history is the deplorable story of one government lie and corruption after another, says that prices are only going up 2% or 3%, which is classically horrifying, when in reality prices are inflating by even more than that! And even if they weren’t, the Ugly Economic Fact (UEF) is that 3% inflation in prices is, judging by all the rest of economic history, the actual “dividing line” between “intolerable inflation in prices” and “we’re freaking doomed!” At least, that is the way it has almost always worked out.
What Happens When Census Jobs Go Away? By DOUGLAS MCINTYRE - DailyFinance.com The Labor Department reported that the economy added 162,000 in new jobs in March, of which 48,000 were credited to the government's hiring of people for the U.S. Census -- the first surge in a once-a-decade burst of temporary employment surrounding the the nationwide collection of population statistics. According to the Associated Press, "Over the next two months, another 600,000 to 700,000 census jobs will be added, putting $10 to $25 an hour into the pockets of some desperate job seekers." These temporary jobs will only last through mid-July, raising the issue of what happens to the Census workers when the process is over?
Labor Pains By Eric Fry - The DailyReckoning.com 04/05/10 Laguna Beach, CA - Last Friday, the Labor Department informed the nation that the U.S. economy added 162,000 jobs in March – the biggest gain in three years. That’s goods news, of course…but not as good as it might appear. For one thing, newly hired Census workers contributed about 30% of the gain. These folks will be unemployed by summer. For another thing, the “underemployment rate” – which includes part-timer workers and people who want work but have given up looking – increased to 16.9 percent from 16.8 percent. Meanwhile, the number of workers who have been unemployed for 27 weeks or more rose to a record 44.1 percent of all jobless.
Greenspan: If CBO Numbers Wrong, Obamacare Disastrous By: John Rossomando - MoneyNews.com Former Federal Reserve chief Alan Greenspan warns the economic impact of the new healthcare reform law could be disastrous if the Congressional Budget Office’s (CBO) projections prove inaccurate. Greenspan told ABC News’ “This Week” on Sunday CBO is a “first-rate” operation, but significant danger exists should their projections prove inaccurate over time. “And when you're dealing with an economy in which debt is becoming, federal debt is becoming ever increasingly a problem, it strikes me that when you're dealing with public policy and you're in a position where you have to ask yourself, ‘What happens if we are wrong?’” Greenspan said in response to a question from ABC’s Jake Tapper regarding his thoughts about the newly passed healthcare reform act.
Gold-conspiracy theories go mainstream By Peter Brimelow, MarketWatch Paranoids have enemies, radical gold bugs have Wall Street NEW YORK (MarketWatch) -- Paranoids notoriously have enemies, but sometimes they have friends too. Long-derided financial conspiracy theories are finally being reported in the mainstream media. Could be ominous. In some ways, this situation is similar to the way in which conspiracy theories about the nefarious role of mega-investment-bank Goldman Sachs finally went mainstream last year. The difference, as I predicted then, is that the theories have now spread to include possible manipulation of financial and particularly gold markets -- and ultimately raise grave questions about the fundamental probity of key U.S. financial institutions.
Euro Declines on Concern Greece Will Struggle to Raise Funds By Candice Zachariahs and Ron Harui -- April 6 (Bloomberg) -- The euro fell for a second day against the yen amid concern Greece and other European countries will struggle to raise funds to repay maturing debt. The euro weakened versus 14 of 16 major counterparts after the Financial Times cited an unidentified official as saying Greece plans to sell bonds in the U.S. as the European nation struggles to fund the trading bloc’s widest fiscal gap. The yen strengthened on speculation Japanese exporters bought the currency after it fell to a seven-month low against the dollar.
China Trade Tensions With U.S. Have Been ‘Amplified,’ Kirk Says By Jim Efstathiou Jr. -- April 3 (Bloomberg) -- China’s trade disputes with the U.S. have been “amplified” and in some cases are no worse than those with other countries, U.S. Trade Representative Ron Kirk said ahead of a visit to Washington this month by President Hu Jintao. Kirk declined to single out China as a protectionist nation in an interview on Bloomberg Television’s “Political Capital With Al Hunt” airing this weekend. The U.S. and China, with $409 billion in annual trade, have a complex relationship that holds “great promise,” Kirk said.
Roubini and ONeill on Greece and China
Office vacancies hit 16-year highs By David Ellis, CNNMoney.com staff writer NEW YORK (CNNMoney.com) -- Office vacancy rates are now at their highest level in 16 years, according to a report published Monday, as elevated unemployment levels across the country continue to temper the demand for space. Roughly 700 million square feet, or 17.2%, of the more than 4 billion of available office space nationwide was unoccupied as of the end of March, according to the real estate research firm Reis. The last time office vacancies were this high was in 1994. The number of empty offices has been on the rise since the start of 2008, as soaring unemployment and a wave of business failures have crushed commercial real estate.
Mutual Manipulation By Bill Bonner - The DailyReckoning.com 04/05/10 Baltimore, MD - Front page headline on Friday’s Wall Street Journal proclaimed a big up-tick worldwide in the manufacturing sector. According to the paper, everybody is making more and more stuff. This helps assure that the recovery “has legs.” Auto sales, too, came in stronger than expected in March. So it sounds like the recovery has wheels too. What we want to know: does it have a brain? Who’s buying this stuff and where are they getting the money? At least the economic model of the bubble era made sense. The producers produced. The consumers consumed. That worked great until the consumers ran out of money. Then, they had to borrow from the producers. And eventually, the whole thing blew up when it became clear that the spenders had borrowed and spent too much, while the producers had expanded and produced too much.
MF Head: World Economy 'Not Out of the Woods' MoneyNews.com International Monetary Fund head Dominique Strauss-Kahn says the world economy was not "out of the woods" despite a faster recovery in developing and emerging countries than earlier forecast. He told reporters during a Sunday visit to Amman that although global recovery was "resuming sooner than expected, private demand was still not strong enough to signal the end of the prolonged recession experienced by the world economy."
Economist's cry: Break up the banks! By Chris Isidore, senior writer NEW YORK (CNNMoney.com) -- Simon Johnson would seem to be an unlikely candidate to be throwing stones at the global financial system. Johnson is the former chief economist at the International Monetary Fund, the organization that uses the economic might of the world's largest nations to rescue smaller countries whose currency is in free fall, all in the name of stability. He is now a professor at the Massachusetts Institute of Technology's Sloan School of Business and a fellow at the Peterson Institute for International Economics, an economic think tank generally seen as more neutral and non-partisan than most.
Now to Explain the Party Favors By ANDREW ROSS SORKIN - NYTimes.com On Thursday, two of the biggest — and among the most tarnished — names on Wall Street will testify in front of the Financial Crisis Inquiry Commission in Washington: Charles O. Prince III, the former chairman and chief executive of Citigroup, and Robert E. Rubin, a former top adviser and director of the bank. On the watch of these men, Citigroup lost more money than almost any company in history, requiring an extraordinary government bailout. There are, of course, many important questions for the commissioners to ask these men about how and why the bank filled its balance sheet with so many bad subprime loans, taking on enough risk to nearly topple the system.
Ron Paul Discusses America's Moral Decline & Economic Collapse on The Alex Jones Show 1/2
Ron Paul Discusses America's Moral Decline & Economic Collapse on The Alex Jones Show 2/2
Financial crisis panel turns to risky mortgages By Daniel Wagner, AP Business Writer WASHINGTON — A panel investigating the roots of the financial crisis will press current and former executives of Citigroup at hearings this week about the bank's role in spreading trillions of dollars in risky mortgage debt through the banking system. The hearings are the first by the Financial Crisis Inquiry Commission to focus on a single company. Witnesses include former Citi CEO Chuck Prince and former Chairman Robert Rubin, who was Treasury secretary during the Clinton administration.
BlackRock warns on banks’ distressed mortgages By Aline van Duyn in New York - FT.com Bond investor says banks must shoulder some losses BlackRock, a leading US bond investor, says banks will have to take their share of losses on distressed mortgages before it resumes large-scale purchases of new “private-label” mortgage bonds, which are sold without government backing. The position taken by Curtis Arledge, chief investment officer for fixed income at BlackRock, who oversees $580bn of investments, marks the latest development in an ongoing tussle over who should bear the costs of the US mortgage meltdown.
Stocks Rise Again, and Bond Yields Follow By DAN BURROWS - DailyFinance.com Stocks ground out yet another day of solid gains Monday, helped by more good economic news, but still fell short of the technically meaningless Dow 11,000 level. Meanwhile, the yield on the 10-year Treasury note, which serves as the benchmark for everything from corporate debt to mortgages, hit 4% for the first time since June before easing to close below that key level. With the market shut for the Friday holiday, investors had an extra day to digest the good-but-not-great hiring data, which dovetailed nicely with Monday's better-than-expected reading on the service sector and a surprise jump in pending home sales. Traders took the trifecta of data as confirmation that the economic recovery is taking root, bidding shares broadly higher.
Higher taxes threaten stock rally By Alexandra Twin, senior writer NEW YORK (CNNMoney.com) -- Between the new Medicare tax on investment income and a rise in capital gains and dividend taxes, investors will face higher costs. But the overall effect on stock returns is not as cut and dry. "It's hard to quantify the impact when stimulus, global expansion and so many other factors also drive growth," said Kelli Hill, portfolio manager at Ashfield Capital Partners. By 2013, investment taxes for the wealthiest Americans will rise to roughly 24% from the current level of 15% -- the highest level since the Reagan era. The tax applies to roughly 1 million individuals who earn over $200,000 and 4 million couples who rake in more than $250,000.
Bond yields, mortgage rates heading higher TheTruthAboutMortgage.com The record low mortgage rates we’ve come to enjoy may be a thing of the past, thanks in part to relatively good economic news and the end of the Fed mortgage securities purchase program. Last summer, some economists warned that mortgage rates could climb a half to a full percentage point in a hurry if the Fed stopped buying mortgage securities. But mortgage rates may not rise as much as many think. Yields on 10-year treasury bonds rose to four percent for the first time since June, while mortgage rates hit the second highest level this year (what causes mortgage rates to move).
Bond Buyers Demand Record Downgrade Protection: Credit Markets By Bryan Keogh -- April 5 (Bloomberg) -- Bonds with built-in protection against rating cuts are making up a record share of debt issues as investors hedge against a slowdown in the economic recovery. Anheuser-Busch InBev NV, the brewer of Budweiser and Stella Artois, is among companies issuing so-called step-up bonds, whose interest increases if a borrower is downgraded. Sales surged to $37.3 billion in March, or 12.4 percent of all debt issued, according to data compiled by Bloomberg. Most of the notes are sold in the U.S., where almost half of bonds rated as so-called junk or on the cusp of non-investment grade include the protection.
Bonds in the 'danger zone' By Colin Barr, senior writer (Fortune) -- Even bond managers are questioning the wisdom of buying bonds now. Government bond prices are sliding as an economic recovery takes hold and the feds struggle to fund a massive budget deficit. At the same time, the prices of corporate bonds are looking pricey after a ferocious year-long rally. With forecasters projecting higher interest rates and the market anxiously awaiting the Federal Reserve's next baby step toward normal policy, some strategists are counseling investors to hold more cash -- and to brace for a wild spring.
White House Focuses on Three High Court Candidates By Greg Stohr April 5 (Bloomberg) -- The Obama administration, likely to learn in the next several weeks whether Justice John Paul Stevens will retire, is focusing on three candidates to succeed him, a White House official familiar with the deliberations said. The group includes U.S. Solicitor General Elena Kagan and federal appellate judges Diane Wood and Merrick Garland, the person said, speaking on the condition of anonymity.
Rothbard and the Nature of the State Mises Daily: by Matt Palmer "To change government one must first change the way people think about government." In his article "Anatomy of the State," Murray Rothbard defines the state as "that organization in society which attempts to maintain a monopoly of the use of force and violence in a given territorial area; in particular, it is the only organization in society that obtains its revenue not by voluntary contribution or payment for services rendered but by coercion" (p. 57). The state, according to Rothbard, has two fundamental properties: the use of violence, and territory. Indeed, not only is the state made up of a body of people who claim the right to use coercive violence, but their claim to violence is, more typically, endemic to the territory over which they rule. Bank woes hurting Democrat vying for Senate seat in Illinois By Mike Robinson and Philip Elliott AP - WashingtonTimes.com CHICAGO | Democrats here are quietly worrying about whether Illinois Treasurer Alexi Giannoulias can win President Obama's old Senate seat. His family's bank is thought to be on the verge of collapse and reportedly made $20 million in loans to two convicted felons. Republican nominee Rep. Mark Steven Kirk is already accusing Mr. Giannoulias of lying to the voters about the loans, and his campaign is guaranteed to be pounding away at the bank's problems in millions of dollars worth of television ads. But the 34-year-old Mr. Giannoulias is still electable if he meets the bank embarrassment head on and strikes back at the Republican congressman as more conservative than this Democratic-trending state, Democratic insiders say.
Morality and the IRS Americans respect the law when the law is respectable By Richard W. Rahn - WashingtonTimes.com Would you consider taking a job with a government agency that:
Unnecessarily strikes fear into the hearts of tens of millions of your fellow citizens, causing such anguish and despair that some are driven to suicide each year.
Requires citizens to know 10 million words of rules and regulations because the failure to do so may result in draconian fines and even jail, while at the same time no one in the agency has a full understanding of all the rules and regulations it requires others to know.
Routinely ignores the constitutional protections against self-incrimination and the right to the presumption of innocence. . .
Bob Chapman's Friday Economic Report on The Alex Jones Show 1/2
Bob Chapman's Friday Economic Report on The Alex Jones Show 2/2
White House seeks to temper job expectations By Steven R. Hurst - MSNBC.com Obama advisers laud latest numbers but say recovery will be long and slow WASHINGTON - Buoyed by good news on the jobs front, the White House claimed credit Sunday for reversing the downward economic spiral while bracing out-of-work Americans for a slow recovery. The Obama administration also eased away from confrontation with China over its artificially low currency. The U.S. wants to encourage Beijing's help on nuclear proliferation and new penalties against Iran for its perceived attempts to build a bomb.
California Pensions Are $500 Billion Short, Stanford Study Says By Christopher Palmeri -- April 5 (Bloomberg) -- California’s three biggest pension funds are as much as $500 billion short of meeting future retiree benefits, a Stanford University report said. The California Public Employees’ Retirement System, the largest U.S. public pension fund; the California State Teachers’ Retirement System, the second-biggest, and the University of California Retirement System are understating their future liabilities by using projected rates of return that don’t properly account for investment risk, the Stanford Institute for Economic Policy said today.
Philadelphia Sells Debt as Muni Issuance Rises From Low of 2010 By Catarina Saraiva -- April 5 (Bloomberg) -- Philadelphia and Illinois are scheduled to join municipalities issuing a combined $5.1 billion of bonds this week as sales rebound from the slowest week of the year. State and local governments sold $4.4 billion of debt last week, the least since December, according to data compiled by Bloomberg. Yields on most tax-exempt maturities rose the past two weeks, with the 10-year touching an almost nine-month high, according to Municipal Market Advisors. Rates on taxable Build America Bonds climbed the past three weeks and are close to the highest in two months.
FHA shuts out another two lenders Two more lenders fell victim to the FHA’s ongoing campaign to remove bad players from the mortgage market. Last week, it permanently withdrew approval for Atlanta-based RSA Financial and 1st Alliance Mortgage LLC of Houston, Texas. FHA lending seems to be the only game in town these days, so the move could lead to their eventual demise. RSA Financial was cited for providing misleading information to the HUD regarding its licensing; there was also the matter of criminal history tied to one of its executives.
Mortgage Rates Headed Up Yet Again Apr. 05, 2010 (FreeRateUpdate.com) – It’s day three, post Fed Mortgage-backed securities buying, and current mortgage rates are leaning toward going up yet again. MBS prices, which drive mortgage rates in the opposite direction are down -10/32 this morning. The decline in MBS prices, which will likely result in another hike in mortgage rates, is the result of stronger than expected pending home sales data (pending home sales rose 8 percent).
Houses of God increasingly face foreclosure By Tom Hals - MSNBC.com Downturn, bad investments and risky loans put many in jeopardy FORT WASHINGTON, Md. - By the time thousands of parishioners stream into the 3,000-seat Ebenezer AME Church on Easter Sunday, church leaders hope to have something else to celebrate: financial revival. The congregation, one of America's largest, has been scrambling to raise funds to save the arena-sized sanctuary from potential foreclosure. To that end, it has enlisted national leaders, such as the Rev. Jesse Jackson and Harvard Law School's Charles Ogletree, who was President Barack Obama's law professor.
Changes to federal foreclosure program announced ST. PETERSBURG, Fla. (AP) — The federal government is relaxing some rules to make it easier for communities to spend money on redeveloping abandoned and foreclosed properties. The changes, effective immediately, will allow cities, counties and states to buy properties in mortgage default and uninhabitable homes with lingering code violations through the $4 billion Neighborhood Stabilization Program. The program was started in the midst of the nation's foreclosure crisis, but a year later about a third of more than 300 local governments that got grants have barely made a dent in them, according to a recent report from the U.S. Department of Housing and Urban Development.
Jim Rogers on CNBC part 1 25 March 2010
Jim Rogers on CNBC part 2 - 25 March 2010
Jim Rogers on CNBC part 3 - 25 March 2010
Homes with Chinese drywall should be gutted, feds say By Cain Burdeau, Associated Press Writer NEW ORLEANS — Thousands of U.S. homes tainted by Chinese drywall should be completely gutted, according to guidelines released Friday by the Consumer Product Safety Commission. The guidelines recommend that electrical wiring, outlets, circuit breakers, fire alarm systems, carbon monoxide alarms, fire sprinklers, gas pipes and drywall need to be removed. FROM THE CPSC: Drywall Information Center "We want families to tear it all out and rebuild the interior of their homes, and they need to start this to get their lives started all over again," said Inez Tenenbaum, chairwoman of the commission, the federal agency charged with making sure consumer products are safe.
Downturn fuels demand for free drugs in US By Andrew Jack in London - FT.com Demand for free medicines in the US has increased sharply following the 2008 economic crisis, highlighting continued difficulties by Americans in gaining access to medical care. Millions have lost their medical benefits along with their jobs in the downturn, underscoring the challenge for President Barack Obama in overhauling healthcare after signing reforms into law last month. Organisations helping people find free drugs have reported increases of up to 50 per cent in requests in recent months, while pharmaceutical companies say they have expanded donations through “patient assistance programmes” by typically 15 to 25 per cent.
A Medical Proletariat Mises Daily: by Melchior Palyi [Chapter 8, Compulsory Medical Care and the Welfare State (1950)] The doctors are, of course, the key figures of governmentalized medicine. The prime purpose is to procure their services and all that goes with them. Their honoraria alone, disregarding the dentists', constitute anywhere between nearly 50 percent (in Switzerland) and little more than 15 percent (in Britain) of the total cost. But far more is at stake. Being the focal point of medical procedures, the doctor directs the course. He decides who is sick and for how long, and thereby determines the trend of cash benefits, the quality and quantity of pharmaceutical products, the need for hospitalization, X-ray, laboratory, and hydrotherapeutical services, etc. Even the cost of administration is dependent in part upon the degree of control over the profession. And what is more important than all cost problems — the welfare of the patient is in the doctor's hands.
Obamacare to Delay Social Security Report by Three Months MoneyNews.com The Obama administration is delaying release of the annual report on the financial health of Social Security and Medicare so that the new report can reflect the impact of the recently passed healthcare overhaul. An administration official told The Associated Press that this year's trustees report will be delayed until June 30, three months later than it usually comes out. The official, who spoke on condition of anonymity before the formal announcement, said that the delay will allow the government to determine the impact of the massive overhaul of healthcare that President Barack Obama just signed into law.
Fifty Links to Our Healthcare Future? Mises Daily: by Christopher Westley As someone who has long been critical of our healthcare system and who has argued for true reform, I was frustrated with the bill passed in February by simple majorities in the House and Senate. Change in itself is not reform, and chanting "yes we can" to yourself one thousand times cannot make it so. Yet I wonder, Why did efforts to centralize healthcare fail in the early 1990s but succeed today? One big reason is that baby boomers are now older, grayer, and scared out of their wits by the economic crisis's effect on their retirement. Therefore, they are more open to the idea of using the coercive power of the state to force others to pay for their medical care.
Recession is sending water bills up for many By Clarke Canfield - MSNBC.com Less usage as businesses go under and tourist economy slows down PORTLAND, Maine - The grim economy is hitting some consumers in the wallet in yet another way: their water bills. Many water utilities are raising rates because water use is down, in part because manufacturers have closed or are cutting back, tourism has fallen and the real estate market is in the doldrums. Water sales for the Kennebunk, Kennebunkport & Wells Water District in southern Maine fell 11 percent last year, to 1995 levels. The No. 1 reason is the sour economy, said superintendent Norm Labbe.
Gasoline Futures Surge to 18-Month High on U.S. Jobs Report By Barbara Powell April 5 (Bloomberg) -- Gasoline surged to a 18-month high and heating oil to a 17-month high after a government report that U.S. employers added the most jobs in three years in March, indicating the economy is improving and fuel demand may rise. Futures gained after the Labor Department said March payrolls increased by 162,000 workers, the third gain in five months. This was the first trading day for futures since the report’s April 2 release because of the Good Friday holiday.
Ron Paul: Energy Exploration is None of the Government's Business
Crude Oil Trades Near $87 on Optimism Over Economic Recovery By Ben Sharples -- April 6 (Bloomberg) -- Crude oil traded near $87 a barrel in New York after rising as growth in U.S. jobs and service industries signaled that the economy is recovering from the worst recession since the 1930s. Oil climbed 2.1 percent to a 17-month high yesterday amid optimism that fuel demand will increase with an economic rebound in the U.S., the world’s largest energy-consuming country. The nation’s fuel-product supplies probably declined last week, according to analysts surveyed by Bloomberg News before an Energy Department report.
7 killed, 19 missing in southern W. Va. mine blast By LAWRENCE MESSINA AP - WashingtonPost.com MONTCOAL, W.Va. -- Rescuers converged late Monday on a remote coal mine where seven workers were killed and 19 missing deep underground after an explosion rocked the operation that has a history of violations for not properly ventilating highly combustible methane gas, safety officials said. The blast occurred around 3 p.m. at Massey Energy Co.'s sprawling Upper Big Branch as nine miners on a vehicle that takes them in and out of the long shaft were leaving, said Kevin Stricklin, an administrator from the federal Mine Safety and Health Administration. Stricklin said a crew ahead of the vehicle felt a blast of air and went back in to find out what happened.
Saudi Arabia, Abu Dhabi State Suppliers Raise Crude Oil Prices By Anthony DiPaola -- April 5 (Bloomberg) -- Saudi Aramco, the world’s largest state-owned oil company, raised official selling prices for light crude grades for customers in the U.S. and Asia for May. Abu Dhabi raised its retroactive March prices on all grades. The state-owned Saudi Arabian producer increased the formula price of its Arab Super Light crude to Asia the most, by $1 a barrel to $2.10 more than the Persian Gulf benchmark, according to an e-mailed statement late yesterday.
Iran Set to Reduce Heavy-Oil Prices for Asia After Saudi Cuts By Yee Kai Pin April 5 (Bloomberg) -- National Iranian Oil Co. is set to cut official selling prices for heavier grades of crude supplied to Asian refiners to 15-month lows after reductions by Saudi Arabia yesterday. The state oil company will set Iranian Heavy for May shipments at $1.60 a barrel below the average of Persian Gulf benchmark Oman and Dubai grades, based on a quarterly formula tied to Saudi Arabian Oil Co. prices, which it has followed in the past. That is 10 cents lower than April, bringing the discount to its widest since February 2009.
Airfares Rise 13% on Summer Rebound, Travelocity Says By Mary Jane Credeur April 5 (Bloomberg) -- Delta Air Lines Inc., American Airlines and other U.S. carriers are charging 13 percent more for the peak summer season as rising demand and fewer seats restore industry pricing power, Travelocity.com data show. The average round-trip fare jumped to $471 from $415 a year earlier, according to Travelocity.com, an online travel agency based in Southlake, Texas. The total reflects tickets for domestic and international flights. Stronger summer bookings add to the evidence of airlines’ recovery from the recession-driven travel slump that forced them to park more than 500 jets over the past two years. Average fares fell 11 percent a year earlier. The summer vacation season is traditionally the most profitable for airlines.
Taxes on hotel rooms are rising By Roger Yu, USA TODAY More cities, counties and states are looking to raise taxes on hotel rooms as they battle budget shortfalls and cuts in services. Among those increasing taxes or considering it: Baltimore; Scottsdale, Ariz.; Santa Clara, Calif.; and Connecticut. Taxing visitors is an old habit for local governments. Revenue from taxes on hotel rooms and rental cars have been used to fund tourism promotion, build stadiums and repair roads. While the taxes can infuriate travelers, they're seen as a politically palatable option in tough economic times. "The government entities are hurting financially and are looking for creative means to generate more revenue," says Trisha Pugal, CEO of Wisconsin Innkeepers Association.
Toyota Hid Pedal Defect in Violation of U.S. Law, LaHood Says By Angela Greiling Keane and Alan Ohnsman -- April 6 (Bloomberg) -- Toyota Motor Corp. “knowingly hid a dangerous defect” that caused its vehicles to accelerate unexpectedly, the U.S. said, for the first time accusing the world’s largest automaker of breaking the law. Transportation Secretary Ray LaHood proposed a record civil penalty of $16.4 million, the most the government can impose. The fine recommended yesterday escalates the confrontation between Toyota and LaHood, who initially praised the carmaker for its handling of recalls the company attributed to faulty accelerator pedals.
U.S. seeks $16.4 million fine against Toyota by Peter Valdes-Dapena, senior writer NEW YORK (CNNMoney.com) -- The Department of Transportation's National Highway Traffic Safety Administration is seeking the maximum fine of $16.4 million against Toyota Motor Corp. for failing to notify the agency of a "sticky pedal" defect in its cars for at least four months. Under federal regulations, automakers are required to inform the agency within five days of determining that a safety defect exists in one of its products. NHTSA learned, through documents obtained from Toyota (TM), that the automaker knew of sticky gas pedal problems since at least September, 2009, the agency said in an press release.
Former Kansas State Trooper Greg Everson: 'U.S. Forces Plan DIRECT ACTION AGAINST American Citizens'
Cuban advisers bolster Venezuelan regime By Martin Arostegui - WashingtonTimes.com SANTA CRUZ, Bolivia | Cuba's communist government has deployed thousands of technical and military advisers to Venezuela to bolster the regime of leftist President Hugo Chavez, as that country faces energy shortages and increased repression against opposition political leaders. A senior Cuban security official and former interior minister, Gen. Ramiro Valdez, arrived in Caracas, Venezuela, in February to take charge of a Cuban government mission that over the past several years has grown to an estimated 40,000 advisers and aid workers, including a large contingent of Cuban military personnel. The advisers include intelligence and security officers, political advisers and medical personnel.
Karzai Threatened to Join Taliban, Sources Say Increasingly Erratic Afghan Leader Said Would Not Submit to Foreign Pressure to End Corruption, Begin Political Reforms CBS News (AP) Afghan President Hamid Karzai threatened over the weekend to quit the political process and join the Taliban if he continued to come under outside pressure to reform, several members of parliament said Monday. Karzai made the unusual statement at a closed-door meeting Saturday with selected lawmakers - just days after kicking up a diplomatic controversy with remarks alleging foreigners were behind fraud in last year's disputed elections.
Deflation on the prowl as Bernanke shuts down his printing press By Ambrose Evans-Pritchard - Telegraph.co.uk The most audacious monetary experiment in modern history ended on April Fools' Day. America must walk without crutches, on gangrenous legs. The US Federal Reserve has completed its purchase of $1.7 trillion (£1.1bn) of mortgage securities, agency debt and US Treasuries, the conjuring trick of "credit easing" that allowed Ben Bernanke to create stimulus equal to 12pc of GDP. The Fed's money creation has been more or less the size of Washington's borrowing needs for the last year, as Beijing notes with suspicion.
Commercial Bankruptcies Increase By DAVID MCLAUGHLIN The total number of companies filing for bankruptcy in the U.S. jumped by more than 20% in March over the previous month, as business failures in the first quarter outpaced last year's total. The total number of commercial bankruptcy filings hit 8,208 in March, a sharp rise from February's total of 6,655, according to new data from Automated Access to Court Electronic Records. March's total brings the total number of commercial bankruptcies to 21,453 so far this year, almost 1,000 more than the total for the first quarter of 2009, a breakout year for business filings.
Personal Bankruptcies Rise 35% By DOUGLAS MCINTYRE - DailyFinance.com Personal bankruptcies rose 35% in March over February to 158,000, according to the Automated Access to Court Electronic Records. According to The New York Times, that was the highest monthly level since new bankruptcy laws went into effect in October 2005. Automated Access to Court Electronic Records reported earlier that personal bankruptcies were up 32% last year. The Times also writes, "Other experts point out that filings invoking Chapter 7 of the bankruptcy code, a simple and inexpensive option, are rising faster than more complex Chapter 13 reorganization filings, under which consumers repay a portion of their debts so they can keep their homes, suggesting that more homeowners are simply walking away from underwater mortgages."
Is This a Recovery? By: John Mauldin - GoldSeek.com Last week I wrote a letter to my kids trying to explain what Greece meant to them. Reader Ken V wrote: "Great letter, John. Now you should write one for the adults who are retired and don't have the long future your kids do. If the US becomes Greece, things won't recover in time for much of the rest of my life to be more than one grim, dreary period. What is your investment advice for those with roughly a 10-year horizon, not 30-40-50 years?" A very good question Ken, and one that was asked more than a few times. So today I will touch on that thorny issue, as well as look at the employment numbers for what we see about the potential for an actual recovery.
Gold jumps $5 to match previous close at $1,125.00 FXstreet.com (Barcelona) – XAUD/USD visited $1,120.00 area during pre-market trading. Investors, reassured in several occasions last week $1,125.00 acted as psychological closing level, rushed to pressure the precious metal up to equal Friday's close. Upticking movement has been capped at $1,125.50 as price now retreats towards $1,124.00. Last week, gold accomplished a 2-week high at $1,127.80 zone on USD weakness.
How the Next Phase of the Credit Crunch Will Affect Gold, Markets by Jordan Roy-Byrne Lately we’ve been writing about the importance of the bond market. Want a hint if we will have hyperinflation? Follow the bond market. Japan and the US in the 1930s didn’t have hyperinflation because there were enough domestic savings to finance the expansion of the government. Rather than argue about inflation/deflation, people should be talking about the bond market. Sovereign governments through their bailouts, stimulus packages and support, have basically become the credit markets. Hence, the one market to watch is the Treasury market. Globally, one should watch various sovereign bond markets. As a result of governments absorbing private debts (and soon to be state and local debts), the global bond market (especially US, UK and Japan) will be the next victim of the credit crunch.
The Silver Boom is Coming! By The Mogambo Guru -The DailyReckoning.com 04/02/10 Tampa, Florida – Many people know me as just a guy referred to by the news media as “local hothead” or sometimes “extremist loudmouth doom-and-gloomer” or (my favorite) “looney toon” but to most people I am known as just a guy who never shuts up about the horrors of inflation in prices that is going to be caused by the inflation in the money supply by the Federal Reserve. Oh, I had tried other identities in trying to “find myself”, of course, but “love god” never really worked out for me, which I explain, to the nay-sayers among you, is obvious only in hindsight, unlike how “genius” and “computer whiz” were ridiculous from the outset, and while I seemed perfectly suited to a career of “circus freak” it just didn’t have the cache to attract the really hot chicks.
Comex can easily go bankrupt, get physical gold/silver!
It's Rational to Expect the Irrational During This Gold Bull By: Adam Brochert I can promise you that the hard Gold bull crowd had to sit thru YEARS of irrational market behavior in the general stock market leading up to the 2000 peak in general stocks. While Gold stocks languished in the late 1990s, the NASDAQ bubble rose higher and higher. We are going to have the same thing during this secular Gold bull market. You should expect the price of Gold and Gold stocks to rise higher than justified by the fundamentals in the Gold market. We are a long way from this period but it will happen at some point. In fact, I think the party in the Gold patch is going to get started this year.
Gold, Time to Get Excited Again? By: Merv Burak - The MarketOracle.co.uk Is it time to get all excited again? Not yet. Gold has had a couple of good days but has yet not breached any major resistance levels so the move may only be temporary within a basic lateral trend. Let’s wait for better validation of the up move. . . . . . . . . The long term rating remains BULLISH.
Critical Juncture for Housing Market, Gold by Clif Droke - Safehaven.com Let's turn our attention to real estate for a minute. The thorn in the economic recovery's side, after all, has been the mortgage market. Investors are worried that with so many mortgage holders under water, the hoped for economic reversal has no chance to stick. Debt relief has been a paramount concern since the credit crisis began, and rightfully so. Yet it has been elusive. Lenders have stubbornly held off in offering anything in the way of substantial relief to the legions of debtors who could use a break. Until now that is...
Why IMF may not sell 191 tonnes of gold By David Lew The global gold market turned into an upbeat mood two months back when the International Monetary Fund (IMF) announced that it would be selling an additional 191 tonnes of gold in the open market. In November last year, India bought 200 tonnes of gold from IMF. The India gold buy from IMF turned historic as gold price zoomed to touch $1227 per ounce in the wake of frantic trading by bullion dealers across the world. Bullion analysts and gold enthusiasts predicted then that gold price would boom to $2,000 per ounce soon.
The #1 Reason Most Americans Don’t Own Gold and Silver By Patrick A. Heller - CoinUpdate.com There are many reasons why most Americans don’t yet own any gold and silver for investment or insurance purposes. On March 31, I witnessed a textbook example of what I consider to be the most important reason why gold and silver have such a small following in this country. The event was a presentation by Dana Johnson, the senior vice president and chief economist for Comerica Bank. His speech was titled “The Outlook for a Sustainable Expansion.” The attendees were business executives and government officials whose organizations mostly have accounts with Comerica plus several Comerica managers. Comerica is one of the largest banks to have originated in Michigan, with assets of about $60 billion.
Will fraud lift gold prices to $10,000/ounce? By Geena Paul NEW YORK (Commodity Online): After the sub-prime catastrophe in banking and realty sector, which led to the global recession in 2008-09, it is the turn of bullion markets now. ‘FRAUD’, that is the one word which comes to any investor’s mind when s/he reads about the Commodity Futures Trading Commission (CFTC) hearing on manipulations in bullion market by gold cartels. So, the small and clean investors have been short-changed by big cartels during the past many years, especially during the recent boom time in bullion markets. Otherwise, how will you explain the biggest boom in paper gold (Exchange Traded Funds, ETFs) in the recent past with hardly any gold available in the market.
Obama’s Greatest Crime by Ralph Peters - FrontPageMag.com President Barack Obama’s greatest crime against our flag and the republic for which it stands isn’t his administration’s health-care theft bill. That’s mere shoplifting compared to what’s coming next. Obama and the leftwing of the Democratic Party intend to turn ten to eleven million illegal immigrants into voters as expeditiously as possible, giving them a permanent national electoral majority based upon a beholden Lumpenproletariat. If they succeed, our country will face mob rule.
Is the Fed Likely to Act If There Is Another Stock Market Bubble? JESSE'S CAFÉ AMÉRICAIN . . . . The 'collateral damage' caused by the dot.com and housing bubbles, all those ruined lives and families, is really not a problem and can be addressed by monetary policy (inflation) after the bubble runs its course. The problem in this last financial crisis is that the housing collapse caused a bank run, and the banks themselves were injured, instead of profiting, in the bubble collapse. Talk about an unintended consequence. Good God, not the Banks! This is a fast being remedied by the enormous subsidies granted by the Fed, and their man Timmy at the Treasury, to set the Banks back up again at the roulette tables, bringing home those eight figure paydays.
If you think the Fed has learned anything, that they are somehow more prudent, more aware of the greater economy and the impact of their behaviour on the American people after this latest financial crisis, you are sadly mistaken. Their hubris is boundless, and they are able to rationalize almost any damage to the republic as a minor glitch in their experiments.
Inflation warning etched in steel By Bill Fleckenstein - MSN Money Rising steel prices -- a symptom of the nation's money printing -- are a harbinger of increases in other industries. Plus: The odd man out in the smart-phone market. Pretend it's 1933, as so many in the deflation camp think it is or soon will be (at least from the price-of-everything standpoint). If last Wednesday you reached for a copy of that day's Financial Times, would you have expected to see the following headline -- "Steel prices set to soar: Everyday goods will cost more" -- in large print above the fold? I don't think so. The newspaper went on to say: "Global steel prices are set to rise by up to a third, pushing up the cost of everyday goods from cars to domestic appliances, after miners and steelmakers yesterday agreed to a ground-breaking change in the iron ore price system."
Alan Greenspan & ABC Challenge
Economic Doomsday 2012 In The Cards By: Sharon Kayser - The MarketOracle.co.uk When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes... Money has no motherland; financiers are without patriotism and without decency; their sole object is gain." - Napoleon Bonaparte, 1815 Many of you surely remember that in 2008, the world elites urged a coordinated action to tackle the threatening down turn, plunging their respective countries deeper into debt to give the bankers an unlimited amount of blank checks, while convincing taxpayers to foot the bill under the guise of acting to save their jobs. Now that the bailouts' side effects are spreading like wild-fire and have obviously become global, the odds are setting us up for a day of reckoning the like of which has never been seen. Liquidation of the Western middle class is unavoidable; let alone the developing countries: for them it will be a lot worse as they have borrowed (from now bankrupt empires) since the end of the colonies. They earned not their independence but a colonization of another kind. If there is no major wake-up call, the entire planet will be left in the hands of a few fascist banks and corporations at the head of a World Government. The wolves in sheep clothing have worked on this for more than 300 years. Money doesn't mean anything to them, but power. This said, it is useful to mention that the system we now have was invented by the Chinese, and began with the Song (960-1279) dynasty. In fifty years from 1260 to 1309 Yuan's paper money was depreciated by 1000 percent!
Discount rate may rise next week, analysts say By Deborah Levine NEW YORK (MarketWatch) -- The Federal Reserve may again increase the discount rate at its meeting on Monday, further widening the gap to the more closely-watched fed funds rate, analysts said Friday. The Board of Governors will meet on Monday to consider the discount rate, now at 0.75%, to be charged by Fed banks to institutions seeking emergency funds, the Fed said in a release. The discount window is rarely used now, so has little impact on the economy and a sign of normalizing financial markets, since the discount rate used to be 1% above the fed funds rate.
Deleveraging and the Futility of 'Printing Money' Charles Hugh Smith - SeekingAlpha.com Base money supply of $2 trillion ("printed money") pales in comparison to the $38 trillion in private debt and the $11 trillion lost in the credit/housing bust. Frequent contributor Harun I. recently made a comment which highlighted the futility of "printing money" to compensate for deleveraging and credit/asset destruction
US Bonds - The End of a 30-Year Bull Market by Prieur du Plessis - SafeHaven.com The US jobless report on Friday sparked a jump in Treasury bond yields, sending the yield on 10-year Notes to 3.95% - the highest level since June last year. The yield on 10-year Treasuries is at long last catching up with the stronger underlying economy as measured by the GDP-weighted ISM PMI. Also, the Fed's purchasing of $1.25 billion of mortgage-backed securities ended last week, resulting in artificially lower long rates coming to an end. Additionally the US bond market is facing a crucial time this week, with $82 billion in government bond auctions that could push yields beyond their current 10-month highs. And pundits will, needless to say, also be cognizant of massive further issuance still lying ahead.
Buying popularity By Thomas Stratmann - WashingtonTimes.com Congressional earmarks as sleazy as 'Cornhusker Kickback' With the recent passage of health care legislation and amendments to strip out the special benefits certain states got, such as the "Cornhusker Kickback," it's easy to forget that they make sausage in Washington just like they do at the deli: with pork. While the senator from Nebraska won't be putting his state's medical bill on the federal tab, several of the on-the-fence Democrats who ultimately voted for health care reform submitted requests for hundreds of millions of dollars' worth of earmarks. These end runs around the formal budgeting process are no different from deals in the Senate that outraged the nation; they're just smaller. More to the point, some of my recent research suggests that the primary reason members of Congress want earmarks is to help get themselves re-elected.
Recent Growth In Economy Is But A Mirage Bob Chapman - TheInternationalForecaster.com A smoke and mirrors Economy, a rigged market means you will lose, capital controls now in place, market manipulation is public policy, stock market overpriced by manipulations, no monetary tightening without a collapse, predictions of gains and losses in job markets. We have an economy run on smoke and mirrors, based on the manipulation of markets. That was accomplished via the executive order signed by President Ronald Reagan in 1988 in the aftermath of the stock market collapse of October 19, 1987, known as the “President’s Working Group on Financial markets.” This order intended to be implemented during emergencies has been used to manipulate markets worldwide 24/7. We experienced an example of this misuse of power when the Dow Jones Industrial Average rose from 6,500 to 10,900 over this past year. This rise was aided by TARP and a host of other programs that injected trillions of dollars into the economy, which, of course, the American citizen is responsible for. The result is we do not have free investment markets. A secret group led by the Federal Reserve and the US Treasury Department runs them. The SEC and the CFTC play their parts as government agencies to make sure the public doesn’t know what is going on. Another recent example is the CFTC testimony of Andrew Maguire, who informed the CFTC the date on which the market in silver was going to be manipulated by JPMorgan Chase.
On the Edge with Max Keiser - 02 April 2010 - (1/4)
On the Edge with Max Keiser - 02 April 2010 - (2/4)
On the Edge with Max Keiser - 02 April 2010 - (3/4)
On the Edge with Max Keiser - 02 April 2010 - (4/4)
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