Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Monday 01.31.2011
Bank failures for week ending January 29th, 2011
By Kenneth Schortgen Jr - National Finance Examiner | Examiner.com
As we head towards the end of January, four more banks closed their doors or went into receivership on Friday. This brings the total number of bank failures for the month to equal 11 institutions.
OK, Camargo - The First State Bank: $20.1 million dollar estimated FDIC DIF cost.
WI, Stoughton - Evergreen State Bank: $22.8 million dollar estimated FDIC DIF cost.
CO, Louisville - FirsTier Bank: $242.6 million dollar estimated FDIC DIF cost.
NM, Taos - First Community Bank: $260.0 million dollar estimated FDIC DIF cost.
Total cost to the FDIC this week was $545,500,000.
FCIC Report: Wall Street and Regulators Get Final Blame
for Mortgage Meltdown
NationalMortgageProfessional
The Financial Crisis Inquiry Commission (FCIC) has delivered the results of its investigation into the causes of the financial and economic crisis. In producing this report, the "Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States,"held 19 days of public hearings in New York, Washington, D.C., and communities across the country that were hardest hit by the economic crisis; interviewed more than 700 witnesses and reviewed millions of pages of documents. The FCIC concluded that the crisis was avoidable and was caused by a number of factors, including:
Widespread failures in financial regulation, including the Federal Reserve's failure to stem the tide of toxic mortgages;
Dramatic breakdowns in corporate governance including too many financial firms acting recklessly and taking on too much risk;
An explosive mix of excessive borrowing and risk by households and Wall Street that put the financial system on a collision course with crisis;
Key policymakers ill-prepared for the crisis, lacking a full understanding of the financial system they oversaw; and
Systemic breaches in accountability and ethics at all levels.
Full copy of the "Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States."
---- MIDDLE EAST ----
Bread & butter revolution in Egypt or pawns of the NWO regime change?
The Riots In Egypt And The Price Of Oil
TheEconomicCollapseBlog.com
As if the world economy did not have enough problems already, now the riots in Egypt threaten to send the price of oil soaring into the stratosphere. On Friday, the price of U.S. crude soared 4 percent. A 4 percent rise in a single day is pretty staggering. The price of Brent crude in London closed just under the magic $100 a barrel mark at $99.42. The incredibly violent riots in Egypt have financial markets all over the globe on edge right now. Any time there is violence or war in the Middle East it has a dramatic impact on financial markets, but this time things seem even more serious than usual. Many believe that we could see an entirely new Egyptian government emerge out of this crisis, and the uncertainty that would bring would make investors all around the globe nervous. Financial markets like predictability, peace and security. If Egyptian President Hosni Mubarak's 30 year reign is brought to an end, it will severely shake up the entire region, and that will not be good news for the global economy.
10 Things That The Egypt Riots Can Teach Us About What Happens When Society Breaks Down
EndOfTheAmericanDream.com
The rioting in Egypt is perhaps the biggest single news story so far in 2011. The pace at which Egyptian society has been transformed over the past week has been absolutely breathtaking. A few months ago, nobody would have ever dreamed that there would be huge riots in the streets of major Egyptian cities calling for the resignation of Hosni Mubarak. But it has happened, and now Egypt will never be the same again. So what does the future hold for Egypt? Well, many are hopeful that this revolution will bring about a better government in Egypt and a better way of life for average Egyptians. Personally, I am not nearly so optimistic. In fact, I believe that there is a great danger that an even more repressive government could take the place of the current regime. But in any event, there are important lessons that the Egypt riots can teach all of us about what happens when society breaks down. Societal collapse is often a very messy, very violent affair. Someday if the global economy completely implodes, we may see economic riots erupt all over the world (including inside the United States) and we all need to get prepared for that.
Egypt and Tunisia usher in the new era of global food revolutions Political risk has returned with a vengeance. The first food revolutions of our Malthusian era have exposed the weak grip of authoritarian regimes in poor countries that import grain, whether in North Africa today or parts of Asia tomorrow.
By Ambrose Evans-Pritchard - Telegraph.co.uk
If you insist on joining the emerging market party at this stage of the agflation blow-off, avoid countries with an accelerating gap between rich and poor. Cairo's EGX stock index has dropped 20pc in nine trading sessions.
Events have moved briskly since a Tunisian fruit vendor with a handcart set fire to himself six weeks ago, and in doing so lit the fuse that has detonated Egypt and threatens to topple the political order of the Maghreb, Yemen, and beyond.
As we sit glued to Al-Jazeera watching authority crumble in the cultural and political capital of the Arab world, exhilaration can turn quickly to foreboding.
Egypt protests: America's secret backing for rebel leaders behind uprising The American government secretly backed leading figures behind the Egyptian uprising who have been planning "regime change" for the past three years, The Daily Telegraph has learned.
By Tim Ross, Matthew Moore and Steven Swinford - Telegraph.co.uk
The American Embassy in Cairo helped a young dissident attend a US-sponsored summit for activists in New York, while working to keep his identity secret from Egyptian state police.
On his return to Cairo in December 2008, the activist told US diplomats that an alliance of opposition groups had drawn up a plan to overthrow President Hosni Mubarak and install a democratic government in 2011. The secret document in full
He has already been arrested by Egyptian security in connection with the demonstrations and his identity is being protected by The Daily Telegraph.
Mubarak under pressure from West as lawlessness takes hold President Hosni Mubarak came under increased pressure from the West yesterday, when Hillary Clinton called for an "orderly transition" to democracy as lawlessness took hold on the streets of Egypt.
Telegraph.co.uk --
As an anti-government revolt raged for a sixth day, with thousands of protesters still on the streets, the US Secretary of State and William Hague, the Foreign Secretary, only just stopped short of demanding that Mr Mubarak end his 28-year rule immediately.
But in a clear sign that their support for his regime is wavering, they made it clear they could envisage a time without the 82-year-old in charge in the not too distant future.
In an attempt by the Egyptian military to demonstrate its muscle power, two F-16 fighter jets swooped low over central Cairo in the afternoon, making multiple passes of a crowd of 10,000 people or more thronged in Tahrir Square. Mr Mubarak was pictured on state television in a meeting with his vice-president and defence minister at the military operations headquarters.
Mohamed ElBaradei: Globalist Pied Piper Of The Egyptian Revolt
Meet the new boss, same as the old boss: Soros and Brzezinski prepare to hijack the revolution
Paul Joseph Watson - Prison Planet.com
The revolt in Egypt is an organically driven people-power movement to oust a dictator, restore universal freedoms, and wrestle the country free from the clutches of the US military-industrial complex, but the man now being positioned to form a new government is a pied piper working for the very same globalists and NGO's that autocrat leader Hosni Mubarak has dutifully served for nearly 30 years.
Make no mistake about it, under the current regime Egypt is a vassal state for the new world order. Under Mubarak, the country receives some $2 billion in aid every year from the United States, second only to Israel. In addition, Egypt pays out $1.1 million annually to the Podesta Group, an organization closely tied with the Obama administration, to act as "foreign agents" for Mubarak's regime.
A Nation in Waiting
A special programme looking at Egypt under Hosni Mubarak.
Our Middle East policy date back to the Cold War Why We Give Egypt So Many Weapons
Claire Berlinski, Ed. - Ricochet.com
Two days ago a friend said to me, "I've never understood why we give Egypt so much military aid." I've actually been waiting patiently since 1993 for someone to say that to me.
I wrote my doctoral dissertation about the formation of American arms transfer policy toward the Arab-Israeli antagonists. In other words, I could actually bore you from now until the end of time with a really serious answer to that question, not just the kind of fine-sounding thing pundits typically pull out of their keisters because there's a microphone in front of them. I really, actually know the answer.
Special Report: The Revolt in Egypt and U.S. Policy Two basic possibilities: the regime will stabilize (with or without Mubarak) or power will be up for grabs
By Barry Rubin - GLORIA Center - Global research in International Affairs
There is no good policy for the United States regarding the uprising in Egypt but the Obama Administration may be adopting something close to the worst option. This is its first real international crisis. And it seems to be adopting a policy that, while somewhat balanced, is pushing the Egyptian regime out of power. The situation could not be more dangerous and might be the biggest disaster for the region and Western interests since the Iranian revolution three decades ago.
Experts and news media seem to be overwhelmingly optimistic, just as they generally were in Iran's case. Wishful thinking is to some extent replacing serious analysis. Indeed, the alternative outcome is barely presented: This could lead to an Islamist Egypt, if not now in several years.
What's puzzling here is that a lot of the enthusiasm is based on points like saying that the demonstrators are leaderless and spontaneous. But that's precisely the situation where someone who does have leaders, is well organized, and knows precisely what they want takes over.
Hillary Clinton says U.S. not pushing for ouster of Egyptian President Mubarak Secretary of State Hillary Clinton makes clear in TV interviews Sunday that the United States is not demanding that President Hosni Mubarak step down. She also backs away from earlier threats to pull Egypt's billions of dollars in aid.
By Paul Richter - Washington Bureau
Reporting from Washington - Secretary of State Hillary Rodham Clinton on Sunday called for Egypt to move toward "real democracy" but also made clear that the United States was not demanding that embattled President Hosni Mubarak step down in the face of continuing demonstrations.
In a series of television interviews, Clinton also eased slightly off the administration's threats on Friday to yank Egypt's billions in aid, saying such a step was not now under discussion.
Clinton spoke warmly of the Egyptian military as a "respected institution" and advised it to help move the country from its current unrest to an "orderly transition."
Hillary Clinton speaking about Mubarak and Egypt, 30th Jan 2010
Egyptian Military Attempting to Retain Control
By: STRATFOR - MarketOracle.co.uk
Egyptian President Hosni Mubarak remains the lifeblood of the demonstrators, who still number in the tens of thousands in downtown Cairo and in other major cities, albeit on a lesser scale. After being overwhelmed in the Jan. 28 Day of Rage protests, Egypt's internal security forces - with the anti-riot paramilitaries of the Central Security Forces (CSF) at the forefront - were glaringly absent from the streets Jan. 29. They were replaced with rows of tanks and armored personnel carriers carrying regular army soldiers. Unlike their CSF counterparts, the demonstrators demanding Mubarak's exit from the political scene largely welcomed the soldiers. Despite Mubarak's refusal to step down Jan. 28, the public's positive perception of the military, seen as the only real gateway to a post-Mubarak Egypt, remained. It is unclear how long this perception will hold, especially as Egyptians are growing frustrated with the rising level of insecurity in the country and the army's limits in patrolling the streets.
'Domino revolutions' top EU agenda THIS WEEK
By ANDREW RETTMAN
EUOBSERVER / AGENDA (31 January to 4 February) - With tanks on the streets of Cairo and the death toll climbing steeply in protests against Egyptian leader Hosni Mubarak over the weekend, EU foreign policy in the Arab and Muslim world will be in sharp focus next week.
EU institutions on Friday declined to speculate on the implications of a potential revolution in what is arguably the most important country in the Arab world.
A senior EU official poured cold water on Italy's idea to send an EU crisis mission to north Africa: "Yes, but at what level? Official level or political level? The high representative [EU foreign foreign affairs chief Catherine Ashton] or the European Commission [neighborhood commissioner Stefan Fuele]? ... We have to reflect, what if we meet with an interlocutor who the next day is not there?" he said.
Fall of Saudi Arabia to End Dollar Reserve System?
TheDailyBell.com
The civil unrest in Egypt is growing fiercer. Electronic communications have been shut down throughout Egypt and massive demonstrations have been planned for today. A changing of the guard in Egypt would be a massive political shift indeed, but what if the disturbances don't stop there? What if they ultimately spread to Saudi Arabia and end up bringing down the dollar reserve system?
We suggest this possibility because we believe there are larger forces at work in the Middle East. Could it be that the power elite itself is inciting these disturbances? Is the idea, eventually, to crash the dollar and set up a global currency in its place?
Chaos, Looting Spread as Mubarak Names Key Deputies
By CHARLES LEVINSON , MARGARET COKER And MATTHEW BRADLEY - WSJ.com -- CAIRO - Egyptian protests continued and reports of looting spread as demonstrations to oust longtime President Hosni Mubarak entered a sixth day despite the appointment of intelligence chief Omar Suleiman to the post of vice president.
Scenes of chaos ensued in Cairo and other cities, with the death toll sharply rising to 102, according to the Egyptian Organization for Human Rights, with 80 of those deaths coming since Friday. The U.S. Embassy Sunday advised Americans to leave Egypt as soon as possible, and recommended not traveling to the country.
Meanwhile, security officials said hundreds of inmates escaped prisons across Egypt on Sunday, including at least one jail that housed Muslim militants northwest of Cairo, the Associated Press reported.
Chaos spreads in Egypt
Military moves to enforce curfew after 6th day of demonstrations
By MarketWatch
SAN FRANCISCO (MarketWatch) - Egypt's banks and stock exchange were closed Sunday and the military used a show of force to attempt to enforce a late-afternoon curfew as anti-government demonstrations intensified in Cairo and other cities, according to media reports.
The death toll climbed to 102, with thousands injured, after six days of demonstrations against President Hosni Mubarak. Cairo's airport was jammed with people attempting to leave Egypt, although media reports said many flights out of and into Cairo had been canceled by carriers.
Perilous choices for Egypt's military
By Jon Alterman, Special to CNN
Washington (CNN) -- Egypt's government is not just Hosni Mubarak's government, it is a military government. Generals and former generals control much of the government, and many are influential in business.
Since the military overthrew Egypt's monarchy in 1952, senior military officers have constituted Egypt's new aristocracy, holding on to positions of privilege from the socialist 1950s and 1960s to the capitalist present.
Mubarak is, of course, a former air force chief of staff who led Egypt's air campaign in the country's 1973 war against Israel -- a war that Egyptians remember as their country's greatest military triumph. He has a military bearing, a military distrust of disorder, and a military attachment to hierarchy.
Egypt's Regime on the Brink Mubarak Digs In as Mobs Battle Police
By CHARLES LEVINSON And MATT BRADLEY - WSJ.com
CAIRO - President Hosni Mubarak's 30-year grip on power hung in the balance as protesters massed around Egypt and overpowered the police, prompting the army to deploy on the streets of the nation for the first time in 25 years.
The protesters returned to Cairo's central Tahrir Square Saturday, chanting slogans against Mr. Mubarak after Egyptian television broadcast a speech in which the president signaled he would stay but dismiss his government.
"There is no turning back from the path of reform that we chose," he said. "We seek more democracy and freedoms."
Israeli, Saudi and American Leaders Say Arabs Are Not Ready for Democracy -- George Washington's Blog
Israeli Prime Minister Benjamin Netanyahu said on Friday:
I'm not sure the time is right for the Arab region to go through the democratic process.
Also on Friday, Saudi King Abdullah said he support Egyptian president Mubarak and called the protesters troublemakers for calling for freedom of expression:
Saudi King Abdullah has expressed his support for embattled President Hosni Mubarak and slammed those "tampering" with Egypt's security and stability, state news agency SPA reported on Saturday.
The Saudi ruler, in Morocco recovering from back surgery performed in the United States, telephoned Mubarak early Saturday, the report said.
Lindsey Williams & Bob Chapman: Egypt Conflict by Design &
Oil, Gold, Silver To Go Much Higher! 1/2
Lindsey Williams & Bob Chapman: Egypt Conflict by Design &
Oil, Gold, Silver To Go Much Higher!2/2
White House warns $1.5bn aid to Egypt could be withdrawn Robert Gibbs calls on President Hosni Mubarak to address 'legitimate grievances' of protesters
By Chris McGreal in Washington - The Guardian
Barack Obama has warned the Egyptian leader, Hosni Mubarak, that he must reform his regime and refrain from violence against protesters. But the US president's message suggested that Washington will go on supporting its longstanding ally for now.
Obama said that he spoke to Mubarak and asked him to turn "a moment of volatility in to a moment of promise," after the Egyptian leader addressed his nation to say he would replace his government but not tolerate what he called a continued threat to the security of the country from protesters demanding his resignation.
Egypt Shut Down Its Net With a Series of Phone Calls
By Ryan Singel - Wired.com
Egypt's largest ISPs shut off their networks Thursday, making it impossible for traffic to get to websites hosted in Egypt or for Egyptians to use e-mail, Twitter or Facebook. The regime of President Hosni Mubarak also ordered the shut down of mobile phone networks, including one run by the U.K.-based Vodafone, all in an attempt to undermine the growing protests over MubarakÕs autocratic rule of the country.
While the world has seen net filtering and disruption in places like Burma and Iran following social and political unrests, Egypt's decision to shutter it is different, according to Craig Labovitz, the chief scientist at Arbor Networks, a computer security firm that has nearly unequaled real data on international internet traffic.
"What's different with Egypt is the scale," Labovitz told Wired.com. "By that I mean that Egypt has fairly significant internet infrastructure with a diversity of paths - satellite, microwave and fiber links - a number of large providers and hundreds of smaller providers. It is one of the more significant internet infrastructures in the Middle East and certainly within Africa. Egypt has a very well-developed economy with a significant reliance on the internet, this is very different from Burma."
So how did Egypt shut down the net? Did someone in the government hit a giant stop button?
Not quite.
Italy calls for EU crisis mission, as Egypt boils over
By ANDREW RETTMAN
EUOBSERVER / BRUSSELS - Italy has said the EU should send a crisis mission to north Africa, as Egypt orders a security crackdown ahead of mass anti-Mubarak rallies on Friday (28 January).
Speaking in the Italian senate on Thursday, Italian foreign minister Franco Frattini said the EU should send a high-level "political support team" to calm tensions in Algeria, Egypt, Tunisia and other countries in the region hit by deadly civil unrest in recent days.
"The European mission ... [should] take contact with the highest levels, beginning with the authorities in Tunisia, with civil society, mayors, opposition parties, to collect information, not to give orders," he said, Italian newswires report.
Inequality In America Is Worse Than In Egypt, Tunisia Or Yemen
GeorgeWashington's Blog
Egyptian, Tunisian and Yemeni protesters all say that inequality is one of the main reasons they're protesting.
However, the U.S. actually has much greater inequality than in any of those countries.
Specifically, the "Gini Coefficient" - the figure economists use to measure inequality - is higher in the U.S.
Gini Coefficients are like golf - the lower the score, the better (i.e. the more equality).
According to the CIA World Fact Book, the U.S. is ranked as the 42nd most unequal country in the world, with a Gini Coefficient of 45. In contrast:
Tunisia is ranked the 62nd most unequal country, with a Gini Coefficient of 40.
Yemen is ranked 76th most unequal, with a Gini Coefficient of 37.7.
And Egypt is ranked as the 90th most unequal country, with a Gini Coefficient of around 34.4.
And inequality in the U.S. has soared in the last couple of years, since the Gini Coefficient was last calculated, so it is undoubtedly currently much higher.
So why are Egyptians rioting, while the Americans are complacent?
Dow Declines 166 on Egypt Unrest
By MARK GONGLOFF - WSJ.com
Protests in the streets of Egypt shook global financial markets on Friday, tempering the optimism that has dominated investor sentiment so far this year.
Though most investors believed the effects of the protests would fade quickly, few were taking chances on Friday.
"The more-dire situation would be continued instability in the Middle East, leading to oil prices continuing to rise and having a real economic impact," said Jim McDonald, chief investment strategist at Northern Trust in Chicago. "The odds favor things settling down, but it's hard to say."
The Dow Jones Industrial Average fell 166.13 points, or 1.4%, to 11823.70, the worst one-day performance for the blue-chip index since mid November. The day also saw the index retreat further from 12000 after flirting with the milestone for much of the week.
Egypt protests lift gold, oil in New York
SINGAPORE (Commodity Online) : Gold and oil prices received a surprise help from anti Mubarak protests in Egypt as both finished higher for the week on Friday in New York.
Gold futures on the Comex jumped the most since Nov. 4 as gold for February delivery added $27.50, or 2.1%, to $1,345.90 an ounce while most active gold contract for April delivery surged $21.9 , or 1.7 percent, to $1,341.7 an ounce.
Spot silver rose 3.5 per cent to $US27.82 an ounce.
Gold heading for a nice comeback
By Jeffrey Nichols - CommodityOnline.com
January has been a difficult month for gold, so much so that many market mavens - analysts and investors alike - are abandoning their bullish expectations.
From its year-end 2010 price near $1,420 an ounce to its recent low just over $1,320 gold has so far shed some $100 - about seven percent. Measured from its all-time high just over $1,432 in early December, the recent decline is less than eight percent.
Either way, in percentage terms, this doesn't amount to much of a correction in the metal's 10-year old bull market.
Small Gold Trader Makes Big Splash Daniel Shak's Aggressive Bet Grabbed Sizable Chunk of Contracts, But Prices Fell and Wager Went Bad
By CAROLYN CUI And GREGORY ZUCKERMAN - WSJ.com
A huge trade by a tiny hedge fund has sent shudders through the gold market.
Thanks to the nature of futures trading, Daniel Shak's $10 million hedge fund held gold contracts valued at more than $850 million, more than 10% of the main U.S. futures market, and the equivalent of South Africa's annual gold production.
But as gold prices started falling this year, the trade, which was a combination of being long and short gold contracts - bets that prices will both rise and fall - started going bad. Monday, he liquidated his position, and is returning money to clients.
China buying gold bullion at a discount
By Jim Willie CB - CommodityOnline.com
Use the above link to subscribe to the paid research reports, which include coverage of critically important factors at work during the ongoing panicky attempt to sustain an unsustainable system burdened by numerous imbalances aggravated by global village forces. An historically unprecedented mess has been created by compromised central bankers and inept economic advisors, whose interference has irreversibly altered and damaged the world financial system, urgently pushed after the removed anchor of money to gold. Analysis features Gold, Crude Oil, USDollar, Treasury bonds, and inter-market dynamics with the US Economy and US Federal Reserve monetary policy.
Whether Americans and Westerners in general like it or not, the Chinese have become and will remain the key drivers to many economic and financial market developments, progress, and averted wreckage. The intrepid lapdog US press, loyal to the syndicate, is a critical element to maintain distractions. Of course, China must adapt and react to their own stumbles and accidents, assured since for years they have maintained a tight link in monetary policy. Doing so has linked their asset bubble expansion and bust cycle to the deadly one in the United States, and filled their coffers with US$-denominated toxic debt securities.
Private gold demand surging in China
By Julian Phillips
Does it make a difference to the price if a central bank chooses to Buy Gold at the mine-head or from the open market?
Private demand for gold is increasing rapidly in China, and this is likely to continue in line with the growth of the Chinese middle classes. We do not know for sure how much the People's Bank of China took into its reserves in 2010, and are only likely to know in two years' time, if it chooses to announce figures in line with recent patterns. But China currently produces 340 tonnes of gold from its domestic mines each year. This may increase by up to 100 tonnes a year or more. It also imported 210 tonnes in 2010.
GATA Case: Judge reviews Federal Reserve documents
By Cecylia Tulikowski-Denison
(Kitco News) - A federal district judge in Washington, D.C. is reviewing 20 documents provided by the U.S. Federal Reserve as part of a Freedom of Information Act request by the Gold Anti-Trust Action committee for information relating to gold swaps as far back as 1990.
If U.S. District Judge Ellen Segal Huvelle turns the documents over to GATA, it will be up to the group to decide whether the information will be released to the public.
Judge Huvelle's Jan. 10 order was for an "in camera" inspection, which is a private inspection by the judge where the public and the press are not allowed to attend. "In camera" is sometimes referred to as "in chambers."
---- DAVOS - World Economic Forum ----
Yuan's Value Is Hot Topic at Davos
By Shen Hong - WSJ.com
The Chinese currency is such a hot topic at Davos this year a breakfast meeting didn't even go without it.
At a function hosted by a Chinese financial magazine Saturday morning, with China's 12th five-year plan as the theme, Chinese executives, academics and their Western counterparts spent a big chunk of their time talking about nothing else but the controversial renminbi, or "People's Money" as literally translated.
Surprisingly, this time, it was Joseph Stiglitz, the American Nobel laureate, who showed some degree of sympathy toward Beijing while his Chinese counterparts were arguing for a stronger yuan. Mr. Stiglitz said the U.S. has clearly won the political debate of accusing the Chinese of undervaluing the yuan but the rhetoric betrayed the mentality of a weakening superpower.
Brussels examines finances of four member states
By ANDREW WILLIS - EUObserver.com
The European Commission ruled on the public finances of four member states on Wednesday (27 January), deciding to grant Malta and Lithuania an extra year to bring their deficits into line.
Hungary and Latvia were denied this privilege however. Both countries have had to turn to the International Monetary Fund and the European Union for bailouts as a result of the financial crisis, but the commission said they are now making progress in improving the health of their accounts.
Envoys Push for Global Trade Deal
By MATTHEW DALTON And STEPHEN FIDLER - WSJ.com
DAVOS, Switzerland - Top trade negotiators from the U.S. and the European Union said that emerging economies like China, India and Brazil must make large concessions to reach a global trade deal.
Trade ministers from the U.S., the EU, China, Japan, Brazil, India and Australia were meeting informally here on Friday night to inject new life into talks that began nearly 10 years ago in Doha, Qatar. More than 20 trade ministers will meet Saturday for further talks.
The pressure on the fast-growing nations reflects their growing clout in world economic affairs and the expectation among rich countries that this new stature demands greater responsibility.
EU Trade Commissioner Karel De Gucht, who hosted the informal meeting, said at its closing that the seven participating trade ministers agreed to aim for a final global trade deal by July.
Lonely Analyst Warns of 2015 Bank Crisis Amid 'Upbeat' Davos
By Christine Harper
Jan. 31 (Bloomberg) -- As politicians, executives and financiers networked at parties and panels last week in Davos, Switzerland, Barrie Wilkinson was in a nearby hotel, warning that a 2015 financial catastrophe may be looming.
"The fundamentals haven't been addressed at all," Wilkinson, a London-based partner at consulting firm Oliver Wyman, said in an interview at the Hotel Morosani Schweizerhof. "The things that caused the previous crisis -- loose monetary policy and trade imbalances -- they're actually bigger now than they were then."
Globe-Trotter Clinton Makes Davos Stop
BY PETER LATTMAN - NYTimes.com
If there is anyone who is tailor-made for the global gab-fest that is Davos, it is Bill Clinton.
On Thursday, the schmoozer-in-chief, who first attended the World Economic Forum a decade ago as president, took the main stage for interview with Klaus Schwab, the founder of the conference.
"It's good to see you looking so fit," said David Gergen, the United States political strategist who delivered a few questions to his former boss.
As a matter of fact, the 64-year-old Mr. Clinton did look fit, and in a wide-ranging chat, he discussed topics including Haiti, American politics, the Middle East, particle physics and the Neanderthal genome project.
Barney Frank: Clinton Is 'Cool Kid' at Davos
By Matthew Dalton
Barney Frank, the witty Democratic congressman from Massachusetts, held forth on a number of topics during an impromptu question-and-answer session with reporters Saturday morning at Davos.
Among the more random questions put to the long-serving congressman: Can Bill Clinton - whose Thursday evening talk was one of the conference's best-attended events - be considered the "Mayor of Davos"? "No," Mr. Frank replied. "I don't know what that means."
Instead: "He is the most popular kid in Davos High School."
"He may even go beyond Bono ... He's got that rock star plus the politico thing."
Foreclosed On, Downsizing And Combining Households
HousingDoom.com
Yesterday's Austin Statesman quoted a local economist who said that construction will pick up in the next two years due to "pent up demand". I thought that was an interesting contrast to the following ad in yesterday's Austin Craigslist:
The bank took away our houses and now we've combined households to move into a house 1/3 the size. That means a LOT of stuff that has to be sold or we'll have to walk away from it. For example, we have:
The ad goes on to list many expensive goods such as "antiques" and "original art". This was not a subprime loan.
Yes, the Craigslist ad is only one data point. It is one more data point however, than the data provided by the Statesman. Too often "real world" evidence such as this is passed over in favor of unsubstantiated, hopeful projections.
EXCLUSIVE INTERVIEW WITH ROBERT SHILLER:
House Prices Could Fall For Years
By Henry Blodget In Davos BI: Where are we now in terms of the deflation of the housing bubble? I know the Case-Shiller numbers have started to turn down again; how much more of that is there to go? RS: I wish I knew the answer to that. The housing market is behaving strangely. The peak in the market was around 2006; it went down for three years and if it behaved the same way it had in the last cycle, it would continue going down for years more. But then it had a sudden and sharp turn-around that we rarely see in this market, in the spring of 2009, and that seems to coincide with the American Recovery and Reinvestment Act, which created also the Homebuyer Tax Credit. And the recovery lasted about as long as the tax credit lasted.
"World War III will be a global information war with no division between civilian & military participation." Marshall McLuhan
Follow the Arab World Protests Online
Wired.com - How-To Wiki
Based on work by noah_shachtman and spencer_ackerman.
It started in Tunisia, where weeks of protests forced dictator Zine El Abidine Ben Ali to step down on Jan. 14. Now Egypt, the historic hub of the Arab world, is in its third day of protests to end the 30-year regime of Hosni Mubarak; and Yemen is aping the Tunisians, too. Unlike prior eras of Mideast unrest, it's all happening online. Here's how to follow what could be history in the making.
Turmoil in N. Africa: Economy is key to protests
From Ben Wedeman, CNN Senior International Correspondent - CNN.com
Cairo, Egypt (CNN) -- Egypt has been rocked by protests in recent days, only weeks after similar disturbances sparked revolution in Tunisia and forced then-president Zine El Abidine Ben Ali to flee the country.
What similarities are there between the situation in Egypt and that in Tunisia?
Both nations have seen dramatic rises in the cost of living in recent years as well as accusations of corruption among the ruling elite.
Egyptian President Hosni Mubarak has now been in power since 1981 -- six years before ex-Tunisian ruler Zine El Abidine Ben Ali, who was forced from office earlier this month, assumed the presidency of his country.
Debt, Currency React to Egypt Protests
By ART PATNAUDE, IRENE CHAPPLE And JESSICA MEAD
LONDON - Escalating anti-regime protests in Egypt are increasing perceptions of political risk in the region, pressuring currencies and driving up the cost of insuring government debt against default.
Fitch Ratings on Friday revised the outlook on Egypt's credit rating to negative from stable. The ratings agency said the country's double-B-plus rating could face a downgrade if there is a continuation or intensification of the political unrest, which has seriously threatened economic and financial performance as well as the economic-reform process.
"The outlook revision reflects the recent upsurge in political protests and the uncertainty this adds to the political and economic outlook ahead of September's elections," said Richard Fox, head of Middle East and Africa sovereign ratings at Fitch.
"We're living on a volcano," experts warn
By YAAKOV LAPPIN- Jerusalem Post
As with Iran in '79, Islamists could hijack pro-democracy movements; ex-IDF research chief: "We're on thick ice, but even that melts eventually."
Israeli security experts are casting an uneasy eye at the civil unrest spreading through the region.
On Thursday, Yemen joined the list of Arab states experiencing unprecedented demonstrations calling for authoritarian leaders to step down, and Egypt braced for more civil unrest.
'Army out' in Egyptian capital
Source: Al Jazeera and agencies
Army reportedly on the streets of Cairo. Protesters had previously chanted slogans calling for army support.
Egyptian military vehicles were sighted on the streets of Cairo on Friday after a day of violent clashes between police and protesters demanding an end to President Hosni Mubarak's rule.
Protesters had previously chanted slogans calling for the army to support them, complaining of police violence during clashes on Friday in which security forces fired teargas and rubber bullets.
"Where is the army? Come and see what the police is doing to us. We want the army. We want the army," the protesters in one area of central Cairo shouted, shortly before police fired teargas on them.
Egypt's Internet Shutdown Can't Stop Mass Protests
By Spencer Ackerman - Wired.com
Protesters have flooded the streets of Alexandria and Suez. In Cairo, they're publicly praying in the thoroughfare. And the Egyptian government can't seem to stop them, despite the crackdown on internet access and cellular communications.
The past four days' worth of protests in Egypt, spurred by those that dethroned the Tunisian government on Jan. 14, have been accelerated by social media. The #Jan25 hashtag gave the leaderless revolt an internal organizing tool and global communications reach. So it shouldn't be surprising that the Mubarak regime responded by ordering the withdrawal of over 3,500 Border Gateway Protocol routes by Egyptian service providers, shutting down approximately 88 percent of the country's Internet access, according to networking firm BGPMon.
Egypt Deploys Military On Cairo's Streets
By CHARLES LEVINSON And MATT BRADLEY - WSJ.com
CAIRO - Egypt's ruling regime faced its biggest challenge Friday, the fourth consecutive day of street protests, as police used tear gas, bullets and batons while plainclothes thugs wielded clubs against demonstrators at scattered points across Egypt's sprawling capital.
With dusk descending on Cairo, protesters broke through a cordon of riot police guarding one of the key bridges in the center of the city and attempted to surge across the Nile River and reach Tahrir Square.
The move is typical of the back-and-forth battles between riot police beat and demonstrators seeking to overcome a hostile security presence and unite in central locations across the sprawling city.
Egypt - Evidence of torture and repression by Mubarak's Police
By Mar’a Luisa Rivera, Wikileaks, 28 January 2011, 15.00 GMT
Many well-known activists including Mohamed ElBaradei, the Nobel peace laureate, have been arrested in their homes, civilians have been wounded and even killed in clashes with Egyptian police and security forces. As an Internet blackout imposed by the state covers the country, every citizen and grassroots organization will now be exposed to arbitrary police forces. As secret documents from US prove, during the demonstrations today, authorities might use physical threats, legal threats and extraordinary laws such the Emergency Law as an excuse to persecute and prosecute activists during the pacific demonstrations taking place in Cairo and other cities.
As described by Cable 10CAIRO64 sent from the Embassy of Cairo on 12January, 2010, "Egypt's State of Emergency, in effect almost continuously since 1967, allows for the application of the 1958 Emergency Law, which grants the GOE broad powers to arrest individuals without charge and to detain them indefinitely". The cable also describes how "The GOE has also used the Emergency Law in some recent cases to target bloggers and labor demonstrators".
Viewing cable 10CAIRO64,
EGYPT'S EMERGENCY LAW AND ITS BROAD USES
wikileaks.ch
1. KEY POINTS
-- Egypt's State of Emergency, in effect almost continuously since 1967, allows for the application of the 1958 Emergency Law, which grants the GOE broad powers to arrest individuals without charge and to detain them indefinitely.
-- The Emergency Law creates state security courts, which issue verdicts that cannot be appealed, and can only be modified by the president.
-- The Emergency Law allows the president broad powers to "place restrictions" on freedom of assembly. Separately, the penal code criminalizes the assembly of 5 or more people in a gathering that could "threaten public order."
Concerns about the Muslim Brotherhood Israel Fears Regime Change in Egypt
By Gil Yaron in Jerusalem - Spiegel.de
Israel is watching developments in Egypt with concern. The government is standing by autocratic Egyptian President Hosni Mubarak, out of fear that the Islamist Muslim Brotherhood could take power and start supplying arms to Hamas.
Israel is usually a country where politicians have an opinion on any topic, and vociferously so. But in recent days, Israel's leadership has been unusually silent on a certain question. No one, it seems, is willing to make an official comment on the ongoing unrest in Egypt, where protesters have been holding anti-government rallies. It's not because Israel does not care about the riots ravaging its southern neighbor -- on the contrary, Israeli news channels, normally prone to parochialism, have been closely following recent events in the Arab world, from Tunisia to Lebanon.
Italy calls for EU crisis mission, as Egypt boils over
ANDREW RETTMAN
EUOBSERVER / BRUSSELS - Italy has said the EU should send a crisis mission to north Africa, as Egypt orders a security crackdown ahead of mass anti-Mubarak rallies on Friday (28 January).
Speaking in the Italian senate on Thursday, Italian foreign minister Franco Frattini said the EU should send a high-level "political support team" to calm tensions in Algeria, Egypt, Tunisia and other countries in the region hit by deadly civil unrest in recent days.
ElBaradei arrives in Egypt vowing to oust Mubarak
By HERB KEINON AND AP - Jerusalem Post
Muslim Brotherhood set to join demonstrations; "My priority right now is to see a new regime," says former IAEA head.
The protests that began in Egypt on Tuesday were showing no signs of letup on Thursday night, and the country was braced for what are expected to be massive demonstrations on Friday as Nobel Peace Prize winner Mohamed ElBaradei returned to Cairo to help try to bring down President Hosni Mubarak.
Prime Minister Binyamin Netanyahu, who has met with Mubarak on numerous occasions since coming to power in 2009 and views him as a key player in the region and the diplomatic process, met on Thursday with senior defense and intelligence officials to evaluate the swiftly moving developments.
2 killed in Egyptian clashes, ElBaradei under house arrest
By JPOST.COM STAFF AND ASSOCIATED PRESS- Jerusalem Post
One woman killed in Cairo, another man shot to death in Suez in latest round of protests; ElBaradei arrested after hiding in mosque; Egyptian gov't imposes curfew, orders army reinforcement as violent clashes continue.
At least two people were killed on Friday in mass Egyptian protests against the government.
One woman was killed in Cairo, and another man was shot to death in Suez.
The Egyptian government imposed a curfew from 6 pm to 7 am on Friday, in the cities of Cairo, Alexandria, and Suez after violent demonstrations there.
With protests growing, Egypt cuts links to Internet
Neary 90% of network routes in Egypt suddenly vanish; government is blamed
By Robert McMillan - Computerworld.com
IDG News Service - As protesters continue to clash with police in anti-government demonstrations, Egypt has pulled the plug on the Internet.
The cut-off happened just after midnight, local time, according to Internet monitoring firm Renesys, when the largest Internet Service Providers operating out of the country stopped providing the Border Gateway Protocol (BGP) routing information used to connect the rest of the world with computers in the Egypt.
Internet access isn't the only method of communications hit by the Egyptian government's blackout. It has ordered mobile phone operators to suspend service in some areas, according to Vodafone, which runs a network there. "Under Egyptian legislation, the authorities have the right to issue such an order and we are obliged to comply," the company said.
Nuke Watchdog Wants to Lead Egypt Revolt. No, Really
By Spencer Ackerman - Wired.com
When last most Americans heard from Mohamed ElBaradei - if they ever heard of the Egyptian diplomat at all - he was that guy from the United Nations atomic watchdog, complaining about Iran's failure to come clean about its nuclear program. Now he's positioning himself as the public face of the explosive Egyptian protest movement. Could this bureaucrat actually become the next ruler of Egypt?
Probably not, but that's not to say he can't play a role whatever comes next for one of the most important Arab nations - and one of the United States' most important Mideast allies. ElBaradei, who's lived in Vienna for ages while he headed the International Atomic Energy Agency, returned to Egypt on Thursday to much fanfare - much of it self-created.
IMF chides US for fiscal folly The International Monetary Fund (IMF) has issued its clearest warning to date that the latest US fiscal stimulus is ill-judged, unlikely to do much for growth and raises the risk of a bond crisis over the medium term.
By Ambrose Evans-Pritchard - Telegraph.co.uk
The IMF said the US economy was enjoying a short-term spike as a result of quantitative easing by the US Federal Reserve and the fiscal package agreed by Congress and the White House late last year, but expressed reservations about the side-effects of these policies.
"Although some targeted measures in the US are justifiable at this juncture given the still weak labour and housing markets, the recently implemented stimulus is expected to deliver only a relatively small growth dividend [given its size] at a considerable fiscal cost," the IMF said in its update to the World Economic Outlook.
In Panel's Report, Stern Warning on Repeating Financial Crisis
By SEWELL CHAN - NYTimes.com
WASHINGTON - The blow-by-blow chronicle of regulatory failure and Wall Street recklessness released Thursday by a Congressional commission amounts to a scathing warning to the government about ways to prevent a recurrence of the 2008 financial crisis.
Drawing on millions of e-mails, testimony and other documents, the final report of the Financial Crisis Inquiry Commission delves deeply into the actions - and negligence - of officials at regulatory agencies, investment banks, credit rating companies and mortgage lenders.
Fiscal policy setting stage for a new bubble
CommodityOnline.com
Marshall Auerback, corporate spokesperson for Toronto-based Pinetree Capital, is a so-called "hedge fund" strategist. He believes that deficit spending is not bound by anything other than inflation, which, he says, is of limited consequence right now. Marshall believes the U.S. government's main goal should be to reduce unemployment, and he predicts the gold price is likely to remain rangebound between $1,100 and $1,400 an ounce in 2011. However, his long-term outlook for precious metals remains rosy given that "casino capitalism" is setting the stage for a new bubble. In this exclusive interview with The Gold Report, Marshall reveals some of Pinetree Capital's precious metals holdings and explains why he fears for the global economy.
Federal Budget Deficit Climbing Dangerously Higher on Continued 2011 Government Spending
BY KERRI SHANNON, Associate Editor, Money Morning
On the heels of U.S. President Barack Obama's State of the Union address - during which the commander in chief highlighted the need for investment in innovation - a steep federal budget deficit projection yesterday (Wednesday) showed the harsh reality of the U.S. government's spending spree.
In the Congressional Budget Office's (CBO) economic outlook report, the nonpartisan body estimated the budget deficit would reach $1.5 trillion in 2011, or 9.8% of gross domestic product (GDP). The report cited the Bush-tax-cut extension, low production, and a weak labor market as key factors for reducing revenue, increasing spending and pushing the deficit higher in fiscal 2011.
This year's federal budget deficit is up from $1.3 trillion in 2010 and $1.4 trillion in 2009. The deficits, when measured as a percentage of GDP were the largest since 1945, reaching 8.9% in 2010 and 10% in 2009.
As Bankers Kill Off Mark-To-Market For Good, Former FDIC Chairman Gloats - by Tyler Durden - ZeroHedge.com
By now everyone is aware that following tremendous pressure by the banker lobby, which knows too well the Ponzi jig will be immediately up if Quantitative Easing's TBTF Madoffs are forced to disclose the true value of their worthless assets (yes, true value comes from asset cash flow generation, not from diluting money), the FASB decided to stop its push for a return to MTM. From the WSJ: "Accounting rule makers, bowing to an intense lobbying campaign, took a key step Tuesday to reverse a controversial proposal that would have required banks to use market prices rather than cost in order to value the loans they hold on their balance sheets." Transparency? What moron would propose that in an economy that is so obviously healthy and surging.
Defending the Euro at Davos
BY JACK EWING AND KATRIN BENNHOLD - NYTimes.com
DAVOS, Switzerland - There is no shortage of euro skepticism at the World Economic Forum this year, but the beleaguered single currency had its defenders as well on Thursday, ranging from President Nicolas Sarkozy of France to Jamie Dimon, chief executive of JPMorgan Chase.
"To those who would bet against the euro, watch out for your money because we are fully determined to defend the euro," Mr. Sarkozy said in his typically impassioned style, adding that he was speaking not only for himself, but for Chancellor Angela Merkel of Germany as well.
$100 Trillion: Bank Error in Whose Favor?
From theTrumpet.com
The banksters at the Davos World Economic Forum are at it again.
One headline says it all: "World Needs $100 trillion More Credit, Says World Economic Forum."
Yes, that is a "T" as in trillion. No typo.
If the world is to continue growing over the next decade, banks will need to create $100 trillion to lend to people, say the experts at Davos. They will need to double the total global existing supply of debt.
It is insanity gone to the extreme. It was a debt implosion that melted Wall Street and led to the current slump. Bankers haven't learned anything. Bailouts removed the sting of market correction. No failure allowed. No lessons learned.
And now they are telling us that the fix for our debt problems is to create even more debt.
Sarkozy: 'Failure of euro would be cataclysmic'
By LEIGH PHILLIPS
EUOBSERVER / BRUSSELS - French President Nicolas Sarkozy has come out swinging in defence of Europe's single currency, saying France and Germany "will never let the euro fail."
In a keynote speech to some of the most powerful businessmen and politicians on the planet at the World Economic Forum in Davos, Switzerland, on Thursday (27 January), Mr Sarkozy attempted to kill off suggestions that the euro could splinter.
"The euro is Europe. And Europe spells 60 years of peace. Therefore we will never let the euro go or be destroyed," he said, according to reports from the Swiss resort town.
"To those who bet against the euro, watch out for your money because we are fully determined to defend the euro."
"Ms Merkel and I will never - do you hear me? - never let the euro fall."
Such an event would be "cataclysmic", he said.
China's Double Standard Relationship With The Dollar
Posted By: eToro - iStockAnalysis.com
By Barbara Zigah
In recent months, China has argued that the world's monetary system is nearing obsolescence and that the U.S. Dollar, which has a unique role in the current system as the key reserve currency, should be maintained at relatively stable levels. The U.S. Dollar has been struggling in recent sessions, with EUR/USD at 1.3717and USD/JPY at 82.9550. Criticism of the United States' monetary policy and, especially, the quantitative easing program currently underway is not without precedent. Decades ago, the finance minister of France complained that the U.S. currency was afforded undue privilege; the response to that charge was essentially, 'yes, but that's not our problem - it's yours.'
S.&P. Downgrades Japan as Debt Concerns Spread
By HIROKO TABUCHI and BETTINA WASSENER - NYTimes.com
TOKYO - A leading credit ratings agency downgraded Japan's long-term sovereign debt Thursday, a sharp reminder of the heavy financial obligations plaguing one of the world's largest economies at levels that stand out even in an increasingly debt-ridden world.
The agency, Standard & Poor's, lowered its sovereign credit rating for Japan to AA- from AA, warning that the Japanese government's already high debt burden was likely to continue to rise further than it had anticipated before the financial crisis.
Asian investors lead massive demand for first Euro bail-out bond Asian and Middle-East investors have thronged to buy the first issue of AAA-rated bonds by the eurozone's new bail-out fund, marking a key moment in the evolution of Europe's monetary union. -- By Ambrose Evans-Pritchard - Telegraph.co.uk
The auction of €5bn (£4.3bn) of five-year bonds to fund the first stage of the Irish loan package was nine times subscribed, reflecting appetite for bonds ranked with core German or French debt but offering higher returns. The yield was 2.89pc, compared with 2.31pc for Bunds.
The outcome was not in doubt after Japan said it would buy 20pc of this month's total issue by the European Financial Stability Facility (EFSF), and China emerged as a white knight for EMU debt. Asian investors bought 38pc of the issue.
With Reforms in China, Time May Correct U.S. Current Account Imbalance
by Jian Wang - Federal Reserve Bank of Dallas
The U.S. current account deficit has deepened significantly since the late 1990s. This shortfall - the value of net exports of goods and services, international financial investment net income and transfer payments - was $803 billion at its peak in 2006, or 6 percent of U.S. gross domestic product (GDP). Conversely, China, Germany, Japan and the oil-exporting countries have been running current account surpluses that have risen substantially (Chart 1). This divergence has raised concerns among policymakers, economic researchers and private investors about whether these imbalances are sustainable and at what risk to the global economy.
A Decade Of Progress Wiped Out By Financial Policy
By Bob Chapman - TheInternationalForecaster.com
January 26 2011: The corporation is not a person, a government that spends most of what it has, DHS snoops in your safety deposit box, a decade of jobs wiped out, Fed may feel losses, inflation makes itself known again.
There is nothing dumb about the financial media. They know exactly what they are doing. All they want to do is keep their jobs and in that process they sell out themselves, their families and friends, other people and their country. They know government statistics are bogus, but they won't report that, because if they did they will be discharged. There are two sets of alternative figures. One shows inflation at 6.75% and the other 8%. As we have reported before the PPI reflects 13-1/2% to 14%, so how can official inflation be 1.2%? If this is truly the case how can inflation be tame with food and energy prices going through the roof?
China's economic boom and gold
By Drake Fune - CommodityOnline.com
Let us get a few things strait about China's economic boom; most recently it was reported that China now has managed to secure close too three trillion dollars in foreign currency reserves as result of the nation's savings and manufacturing practices and capacity.
However, admiration for China's accomplishments are yet another misunderstood series of values adopted by much of the western world without considering ultimately what it all actually means for the world.
The current paradigm practiced and pedestal fixed within the beliefs of much of the world is the western capitalist model; which by its very nature represents the most destructive, polluting, dangerous, unequal, racist, anti-life, malicious and wasteful systems that has ever been created as a monetary economic system of choice to mine and manage the earth's resources.
Daily Pfennig: 01/27/11: Downgrading Japan...
By Chuck Butler - Kitco.com
.... The Russell advice -- swap your dollars for physical gold or CEF, GLD, or SGOL. In other words, do as China and Russia and many other nation are now doing -- get out of your dollar assets.
... I realize that what I've written above may seem outlandish to many subscribers. Outlandish? Then you tell me how the US is going to finance a national debt of $13.9 trillion (some say the real debt is over $50 trillion). The fact is that we now BORROW just to pay the interest on the national debt. Treasury is moving the debt to ever-shorter maturities, hoping that the current zero interest rates on short debt will ease the situation. But with bonds sinking, rates are now rising, so what's the answer?"
Why Gold and Silver Have Declined
By Rob Kirby - Implode-O-Meter Blog
The Thompson Reuters CRB index weighting has not changed since 2005. However, virtually all other commodities related indexes do rebalance in early Jan of every year. For instance the $CCI consists of 17 commodity constituents - with 5.88 % of the index allotted to each commodity. It rebalances in early Jan. every year.
Silver's RABID TEAR [out-performance] last year ensured that it would be "cut back" to conform to its intended 5.88 % weight.
Other commodities indexes do the SAME THING.
Big Banks know this - they run or manage most of these index funds.
Index funds dominate the trading universe more today than at any time in our financial history.
Silver and gold are being PUNISHED - in a macro sense - in early Jan - from a commodity index re-weighting point of view - PRECISELY because they outperformed so much last year. This explains why silver is getting creamed so much more than gold - it way outperformed gold on a relative basis last year.
It's my understanding that this rebalancing window effectively closes with the expiration of Jan. Options [Wed].
If I'm correct in my thinking / analysis - this sell off is likely done and we are going to SCREAM HIGHER in both gold and silver.
Silver to hit $42 in 2011
NEW YORK (Commodity Online): Where is silver price heading? What will be the average silver price in 2011? Bullion investors have been predicting the possible price of silver between the range of $30-$50 for the year 2011.
A new forecast on silver from precious metals analyst Mark Thomas says that the white metal price will hit $42 in 2011.
Thomas' prediction published in the Silver Shortage Report says that silver price will touch a $42 target by the end of 2011, which would be an approximate 40% gain for the year.
"Our 2012 price target is $65, which would be an additional 55% annual gain in 2012. Finally we expect the price to hit $120 by the end of 2013 for an additional 85% annual gain. That would mean the price would go from approximately under $30 recently to $120 over the next three years for a potential staggering 300% plus gain. Do we have a crystal ball and know this for sure, of course not! We also do not try to predict the price trend tomorrow, next week, next month or over the next three to six months. However, the evidence to us says that over the next one, two and three years our price predictions are not only possible but very probable," says the report.
M2 Surges By Biggest Weekly Amount Since 2008 As It Hits Fresh All Time Record -- by Tyler Durden - ZeroHedge.com
Desperation kitchen sink anyone? The M2, which up until now was merely diagonal, is about to go parabolic. In the week ending 1/17/2011, Seasonally Adjusted M2 surged by $46.6 billion, the biggest weekly increase in the broadest tracked monetary aggregate (ever since the cost-cutting associated with discontinuing the M3) since 2008. One look at the chart below indicates precisely what is fueling the endless market ramp. Furthermore, for those who realize there is a 93% correlation between M2 and gold, we would certainly recommend putting on the M2/Gold convergence trade on.
Hidden Inflation: Food Prices Flying Under the Fed's Radar
BY JASON SIMPKINS, Managing Editor, Money Morning
Soaring food prices have been, perhaps, the most pressing global issue of the past two years - yet the U.S. Federal Reserve has taken a "hear no evil, see no evil, speak no evil" approach to the global crisis.
Instead, the Fed has dutifully maintained its focus on so called "core inflation" in the United States - even as Americans suffer the consequences of the "hidden inflation" the government refuses to account for.
The Federal Reserve excludes food and fuel prices from its preferred gauge of inflation because they are often influenced by erratic weather patterns and political turmoil. That at times has been the case over the past few years.
Bernanke Says Fed Failed to See Broader Risks From Housing
By Scott Lanman - Bloomberg.com
Federal Reserve policy makers failed to foresee a threat to the financial system from the housing market in 2005 in part because central bank economists didn't find major risks, Chairman Ben S. Bernanke said.
At one Federal Open Market Committee meeting in mid-2005, Fed governors and regional presidents heard staff briefings suggesting that the U.S. mortgage system "might bend but would likely not break" from a large home-price drop, and that the market may rest on "solid fundamentals," Bernanke said in a Dec. 21, 2010, letter to the Financial Crisis Inquiry Commission, providing his views and revealing new details on FOMC meetings from 2005 to 2008.
FHA short refinance program has resulted in only 15 refis
TheTruthAboutMortgage.com
The FHA Short Refinance program, made available to loan servicers in June but formally launched in October, has resulted in just 15 refinances as of December 31, according to Congressional testimony from the Special Inspector General, Neil M. Barofsky.
A short refinance is a transaction in which a mortgage lender agrees to pay off a borrower's existing mortgage and replace it with new a loan with a reduced balance in order to prevent foreclosure.
In a quarterly report to Congress, Barofsky slammed efforts made by the Treasury to halt foreclosures and improve the housing outlook.
He noted that just 522,000 permanent loan modifications were active under the Making Home Affordable program as of year-end, with approximately 238,000 funded via TARP and the rest by the GSEs, Fannie Mae and Freddie Mac.
Bernanke gets 66% approval from investors in poll Two-thirds of investors have a favorable view of the 57-year-old former Princeton University economist, compared with 31% unfavorable. -- Crain's New York Business
Bloomberg) - Investors love Federal Reserve Chairman Ben Bernanke. It's just his policies they don't like so much.
Sixty-six percent of investors have a favorable view of the 57-year-old former Princeton University economist, compared with 31% unfavorable, according to a quarterly global poll of 1,000 Bloomberg customers who are investors, traders or analysts conducted Jan. 21-24. Mr. Bernanke is more popular than his European counterpart, Jean-Claude Trichet, and scores higher than all other world political and economic leaders in the poll with the exception of German Chancellor Angela Merkel.
House Votes to End Subsidies for Candidates
By David Espo, Associated Press - CNSNews.com
Washington (AP) - Eager to cut spending, the Republican-controlled House voted to end multimillion-dollar federal subsidies for presidential candidates and national political conventions on Wednesday, the first of what party leaders promised will be weekly, bite-sized bills to attack record deficits.
The 239-160 vote sent the measure -- and the fate of the familiar $3 check-off box on income tax returns -- to the Senate, which is controlled by the Democrats.
"Eliminating this program would save taxpayers $617 million over ten years, and would require candidates and political parties to rely on private contributions rather than tax dollars," said Majority Leader Eric Cantor, R-Va., "In times when government has no choice but to do more with less, voting to end the Presidential Election Campaign Fund should be a no brainer."
Republican bills try to force payment of debt
Reuters via MSNBC.com
WASHINGTON - U.S. Republicans introduced legislation on Wednesday to mandate that the government pay the interest on its debt if the nation reaches the $14.3 trillion ceiling -- before allowing other federal spending.
It is the latest bid by conservative Republicans to fulfill demands from their Tea Party faction to rein in government spending to tackle the budget deficit, now forecast to near $1.5 trillion this year.
"We must keep good on our obligation to pay off our debt, protect taxpayers, grow our economy, and stop the out-of-control spending that got us here in the first place," Representative David Schweikert, a Republican co-sponsor of the effort, said.
Herbert Obama?
By CATHERINE RAMPELL - NYTimes.com
David A. Rosenberg, the chief economist and strategist at Gluskin Sheff, noticed some eerie parallels between President Obama's State of the Union speech and some statements by Herbert Hoover, who presided during the early years of the Great Depression. From Mr. Rosenberg's client note today: Obama's State of the Union: "Two years after the worst recession most of us have ever known, the stock market has come roaring back. Corporate profits are up. The economy is growing again." Herbert Hoover, May 1, 1930, U.S. Chamber of Commerce Meeting: "While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover."
Obama Changes the Narrative
By Joe Conason - TruthDig.com
Complaints about President Obama's State of the Union address on both sides of the political divide (which was obscured but not obliterated by the evening's novel seating arrangements) seemed to miss its point and purpose.
Like every successful speech of its kind, Obama's message resonated on more than one level. So while he conceded little ground to the right, the president nevertheless sought to draw his adversaries - and even more so the independent voters who temporarily sided with them - into the American story he told.
Too many caveats and concessions in State of the Union
By: Cal Thomas - Washington Examiner
In his State of the Union address, President Obama at times sounded like he was channeling President Reagan: cutting the deficit, hailing private enterprise and individual initiative, talking about the future. But for all his eloquence, the president wrapped his liberal ideology in conservative sheep's clothing.
On the surface, the president said many things with which conservatives might agree, but words can mean something, or they can mask true intentions.
There was no indication the president plans to retreat on his far-left agenda of the last two years. Why should he? That would require denying who he is.
Absent the glamorous rhetoric, let's examine the major subjects on which the president touched.
The Burger Response to the State of the Union
By Robert Hamburger
The United States is in trouble. With diminishing resources on the planet, systems stretched beyond sustainable levels, the reckless printing of money, and our species, and in particular our country, still waging wars, things will only get better if we can wake up in time. As things continue to unravel in the financial world, America is heading towards becoming a Banana Republic. World history teaches us what happens to counties that trash their currencies.
How do we win the future? Three things:
Obfuscating Unemployment
By Moshe Adler - TruthDig.com
David Leonhardt of The New York Times wonders why unemployment has remained so high for so long. At first, it seems to him that it is because American employers are too strong and American workers too weak. But after contemplating the matter further, he discovers his own folly.
Leonhardt starts with unions. Unions are good, he explains, because they give workers bargaining power. But strengthening unions would nevertheless be difficult because, according to Leonhardt, too many unions have hurt the companies for which their members work. And after consulting with a Harvard economist, Leonhardt discovers two more reasons why unemployment is the fault of the unemployed: Disability insurance gives workers an incentive not to work, and low levels of education make them unemployable.
Social Security Fund Will Be Drained by 2037
By Stepehn Ohlemacher, Associated Press - CNSNews.com
Washington (AP) - Social Security's finances are getting worse as the economy struggles to recover and millions of baby boomers stand at the brink of retirement.
New congressional projections show Social Security running deficits every year until its trust funds are eventually drained in about 2037.
This year alone, Social Security is projected to collect $45 billion less in payroll taxes than it pays out in retirement, disability and survivor benefits, the nonpartisan Congressional Budget Office said Wednesday. That figure swells to $130 billion when a new one-year cut in payroll taxes is included, though Congress has promised to repay any lost revenue from the tax cut.
Houston-area led nation in 2010 foreclosure increase
Houston Business Journal - by Christine Hall
The Houston-Sugar Land-Baytown metropolitan area had the biggest increase in home foreclosure activity between 2009 and 2010 among the largest 20 metro areas, according to the latest report by Irvine, Calif.-based RealtyTrac Inc.
Houston saw an increase of 26 percent as 35,816 homes received foreclosure notices in 2010. That amounts to one in every 62 households receiving a notice.
Also having a large increase in activity were Seattle and Atlanta. Meanwhile, Washington D.C.; Riverside, Calif.; and San Diego saw the biggest decrease in foreclosure activity.
Home Prices Are Dropping Again as the Markets Head Toward a Devastating "Double-Dip" Could it drag the larger economy into a double-dip recession?
By Joshua Holland - AlterNet
There was no mention whatsoever of the housing crisis in Barack Obama's State of the Union Address on Tuesday, or in the responses offered up by Republican Reps Paul Ryan, Wisconsin, and Michele Bachmann, Minnesota.
It's a stunning omission. According to analysts, the housing markets have taken a downward turn after rebounding during the first months of 2009. Home prices took a sharp hit in November, and have now declined for 4 straight months. The American housing market now appears to be heading towards a painful "double dip."
The Case-Shiller index of housing values in 20 metropolitan areas -- the highly respected index that predicted the collapse of the housing bubble years before it crashed -- now stands just 3 percent higher than the trough set in April of 2009, and according to Standard and Poor's, the data suggest that "a double-dip could be confirmed before Spring." It's already here for many cities. According to the latest data, "nine markets - Atlanta, Charlotte, Chicago, Detroit, Las Vegas, Miami, Portland (OR), Seattle and Tampa - hit their lowest levels since home prices peaked in 2006 and 2007, meaning that average home prices in those markets have fallen even further than the lows set in the spring of 2009."
The latest on states declaring bankruptcy
By James Pethokoukis - Reuters.com
Some Republicans are against the idea, but a couple of heavy hitters - Jeb Bush and Newt Gingrich - continue to be for it. Here is a bit from their LA Times op-ed:
First, as with municipal bankruptcy, it would have to be completely voluntary.
Second, as with municipal bankruptcy, a new bankruptcy law would allow states in default or in danger of default to reorganize their finances free from their union contractual obligations. In such a reorganization, a state could propose to terminate some, all or none of its government employee union contracts and establish new compensation rates, work rules, etc.
Third, the new law should allow for the restructuring of a state's debt and other contractual obligations.
2011: Transition to a New Global Order
Written by Mariano Aguirre - OilPrice.com
Three issues will dominate international relations in 2011: the United States's relations with Europe, the emerging powers, and various countries of the global south; the ongoing international financial crisis (particularly acute in the north Atlantic area); and violence both along acute fracture-lines (such as the Pakistan-Afghanistan and Mexico-US borders) and within various states (such as Yemen and Somalia).
The powers that commanded the international stage since the 1950s - especially the United States, Britain, and France - no longer have the ability to lead (and in the case of the now defunct USSR, no longer exist). The WikiLeaks release of US diplomatic documents show that these powers continue to exert a great deal of influence; at the same time, many other governments - from Iran to the Ivory Coast, and including Israel, Venezuela, Sri Lanka and Sudan - are now becoming active decision-makers in ways that further reduce the control of the traditional powers.
After Tunisia, familiar CIA trademarks now seen in Egypt to implement the NWO -- Glenn Gordon - InfoWars.com
Here we go again. Looking at the latest scenes of civil unrest in Egypt, we need hardly be surprised, since the corporate, CFR run media, had already prepped us, following the events in Tunisia. If anyone had read my last post, you'll already know that this was coming. So, be prepared for more instability and chaos in the surrounding Arabic regions.
The Chinafication of Asia
BY JEREMIAH JACQUES - theTrumpet.com
Beijing is not satisfied with the status quo and is maneuvering to expand its reach, especially in Asia.
"Anybody who ignores China would have to reexamine his head," said the Philippines Senate President Juan Ponce Enrile last month. And a growing number of Asian policymakers are demonstrating that they agree with Enrile.
Wielding the twin forces of soft-power diplomacy and intimidating military growth, Beijing is rapidly expanding China's reach throughout Asia. Viewed individually, the gains China has made don't appear terribly significant, but, when analyzed together, they paint a sobering picture of a rapidly rising Chinese powerhouse and of a dramatic shift in Asia's balance of power.
THE GREAT REFLATION, BATTLE FOR THE WORLD
by Christopher Laird - FinancialSense.com
I mean it.
How to describe this mess. This horror. We are witnessing the total transformation of the world economy at the same time that the world is awash in debt. At the same time the world is very clearly and scarily entering a food crisis that originates as scarily and simply as the petri dish model or the glass of sugar water... that the organisms (in this case bacteria) multiply and notice no shortage of sugar (food) until the end and start to run out. Do you know what happens? They cannibalize each other. This clearly relates to the food crisis as a model. Each year we have roughly two harvests, and the entire food supply for the world must be replaced in total - or the world starves. Food commodities are totally different than say oil - which is supposedly a fixed reserve we draw down.
Financial Crisis Was Avoidable, Inquiry Finds
By SEWELL CHAN - NYTimes.com
WASHINGTON - The 2008 financial crisis was an "avoidable" disaster caused by widespread failures in government regulation, corporate mismanagement and heedless risk-taking by Wall Street, according to the conclusions of a federal inquiry.
The commission that investigated the crisis casts a wide net of blame, faulting two administrations, the Federal Reserve and other regulators for permitting a calamitous concoction: shoddy mortgage lending, the excessive packaging and sale of loans to investors and risky bets on securities backed by the loans.
Financial crisis was caused by corporate mismanagement, says US government 2008 crash was avoidable and largely caused by unnecessary risk-taking, says financial crisis inquiry commission report
By Dominic Rushe in New York - The Guardian
The 2008 financial meltdown was avoidable and largely caused by unnecessary risk-taking, corporate mismanagement and inept regulation, according to the US government's official report.
The financial crisis inquiry commission's official report is due tomorrow but according to leaks in the New York Times it will conclude: "The greatest tragedy would be to accept the refrain that no one could have seen this coming and thus nothing could have been done. If we accept this notion, it will happen again."
Empty Promises: 5 Reasons Why Barack Obama's State Of The Union Address Was Completely Wrong About The Economy
TheEconomicCollapseBlog.com
Barack Obama's State of the Union address sure sounded good, didn't it? There were lots of solemn promises, lots of stuff about America's "bright future" and a line about how we are now facing this generation's "Sputnik moment" that will surely make headlines all over the globe. But we all knew that Barack Obama could give a good speech. That has never been the issue. What the American people really need are some very real answers to some very real problems. So were there any real answers in Barack Obama's State of the Union address? Well, Barack Obama promised that America will "out-innovate, out-educate and out-build" the rest of the world. He also pledged that America will become "the best place in the world to do business" and that the government must "take responsibility" for our deficit spending. But does all of this rhetoric mean anything or is all this just another batch of empty promises to add to the long list of empty promises that Barack Obama has already made and broken?
CHINA PLAYS EUROPE CARD
Submitted by Jim Willie - FinancialSense.com
Whether Americans and Westerners in general like it or not, the Chinese have become and will remain the key drivers to many economic and financial market developments, progress, and averted wreckage. The intrepid lapdog US press, loyal to the syndicate, is a critical element to maintain distractions. Of course, China must adapt and react to their own stumbles and accidents, assured since for years they have maintained a tight link in monetary policy. Doing so has linked their asset bubble expansion and bust cycle to the deadly one in the United States, and filled their coffers with US$-denominated toxic debt securities. However, China has three advantages over the US that stand out. They have $2.65 trillion in savings, rainy day money in a war chest. They have a vast industrial base, courtesy of the US, the West, and Japan, which donated the technology for the fabled disastrous low-cost solution. They have an expanding middle class. Neither the US, the UK, nor Western Europe has anything remotely similar to these three benefit allowances. It is slowly becoming clear that the US granted the Most Favored Nation status to China in return for massive gold & silver swaps to the USGovt. The Wall Street fraud kings illicitly sold the leased bullion into the market, to sustain the American fiat paper congame, and thus a betrayal to the Chinese.
Yes Virginia, The Chinese CAN Dump The Dollar
by Aaron Krowne - Implode-O-Meter Blog
I'm surprised how persistently I see the dubious assertion that the Chinese "can't move away from the dollar because they own so many of them". A related argument is that they are "stuck in dollars because of the trade deficit". They certainly can move away from the dollar, though, by continuing to do what they are already doing. This will bring them to a point where they will be positioned to transition away from the dollar, possibly rapidly. Here is what I mean.
Assume China has $2 trillion in total dollar reserves. By "dollar reserves" I mean mostly Treasury securities (Treasuries) and to a lesser extent Agency securities (Fannie and Freddie) and cash dollars. However, for the purposes of this discussion, they will be considered one and the same, and can just be called "Treasuries".
U.S. Budget Deficit to Pass $1.5 Trillion This Year
By Megan McArdle - The Atlantic.com
"Grim" doesn't seem to be a terrifying enough word to describe the budget outlook that the CBO released today. Oh, sure, we sort of knew this was coming--tax cuts are expensive if you don't find spending cuts to match. And yet the numbers still hit one like a punch to the gut. From a guy wearing brass knuckles. Wrapped around a roll of quarters. Shiny new quarters that you can't really afford to use for punching people, because you've got a $1.5 trillion budget deficit this year.
What is there to say? This has got to stop? At this point, saying so feels sort of Job-like. Speciically, Job 14: "Man born of woman is of few days, and full of trouble. He cometh forth like a flower, and is cut down: he fleeth also as a shadow, and continueth not." It's absolutely true, of course, but it's kind of a downer. And no matter how often you say it, you know you're still going to die.
Deficit Outlook Darkens Stark Warning for 2011 Fuels Battle Over Government Spending and Taxation
By DAMIAN PALETTA, JANET HOOK And JONATHAN WEISMAN - WSJ.com
WASHINGTON - The federal budget deficit will reach a record of nearly $1.5 trillion in 2011 due to the weak economy, higher spending and fresh tax cuts, congressional budget analysts said, in a stark warning that will drive the growing battle over government spending and taxation.
At that size, the deficit - up from $1.29 trillion in 2010 - would be roughly $60 billion more than the White House projected last summer, the nonpartisan Congressional Budget Office said Wednesday. Last year's tax-cut package alone will add roughly $400 billion to the deficit, the CBO said. As a percentage of the nation's economic output, the 9.8% deficit would be the second-largest since World War II, behind only the 10% level in 2009.
Do Not Let The Establishment Divide Us - We Are All Americans
EndOfTheAmericanDream.com
Have you ever noticed how almost all the mainstream news stories carried on the major news networks are slanted in a way that is intended to divide Americans? The truth is that the "establishment" is constantly trying to divide us and get us fighting with one another. They pit the Republicans against the Democrats (even as though control both sides). They pit one race against another. They pit one gender against another. We are told that the rich are against the poor, the north is against the south, urban is against rural and that there are even "generational battles" going on. Frustration and hate are rapidly growing in the United States today, and a lot of that frustration and hate is unfortunately aimed at the targets that the mainstream media has programmed all of us to hate. Meanwhile, those at the top of the pyramid who are controlling the whole game love it when we are divided because we can never become united and challenge their control.
Geithner: 'Level Playing Field' Key in Tax Revamp
By DAVID WESSEL - WSJ.com
In his State of the Union address, President Barack Obama called on Congress to embark on a major revamp of corporate taxes: "[S]implify the system. Get rid of the loopholes. And use the savings to lower the corporate tax rate for the first time in 25 year - Ñwithout adding to our deficit."
On Wednesday, Treasury Secretary Timothy Geithner talked to The Wall Street Journal's David Wessel about the initiative. Mr. Geithner emphasized the administration's insistence on offsetting the corporate rate, now 35%, by eliminating deductions, credits and incentives.
Raising more revenue from businesses in light of global competition "isn't realistic," he said. But, given the deficit, "We can't raise taxes on individuals to lower business taxes."
The 13 Countries That Control the World's Gold
247wallst.com
Even if 2011 has gotten off to a rough start for gold, everyone knows that the value of gold is at historic highs. What is interesting is that there is rarely a discussion about which countries actually have a lock on the world's gold. 24/7 Wall St has compiled a list of the top 13 nations which hold the bulk of the world's gold reserves and added in an outlook for 2011.
After having peaked above $1,420 per ounce at the end of 2010, gold has recently traded under $1,330 per ounce and has basically put in 3-month lows. As part of its analysis 24/7 Wall St. looked at the trends of the world's top holders that may drive demand up or down ahead in 2011 after taking a look at the new data from the World Gold Council.
Many issues should be considered in gold investing including demand from the private sector for bars, coins and jewelry along with industrial use.
China to dominate world with Yuan backed by gold, silver
By James West
With technical indicators today suggesting gold could dip as low as US$1,322 an ounce in the current corrective phase, bears and bugs are deploying opinions in-line with their interests. The drop by nearly $100 in ten weeks is nothing new, nor is the strident tone growing in both camps. Its all consistent with the bull market in gold and silver that has been underway for the last decade.
In a pattern that is as clear as the four seasons, the tone in the media presages market sentiment, which segues into market action, then market re-action, classically followed by market price adjustments for over-reaction, which itself engenders a reversal of market sentiment, and a subsequent reversal in media tone. Metaphysical economic ping pong at its finest.
Gold to benefit as currency woes continue Continued currency woes, further monetary easing and the potential for default are likely to further boost gold's appeal in 2011 - Author: David Levenstein - MineWeb.com
JOHANNESBURG - Since 2000, gold has been in a bull market that has driven the price of the yellow metal from around $250 an ounce to just over $1400 an ounce. Even though this impressive five-fold gain has occurred in the US dollar price of gold, the price has recorded major gains in almost every currency around the world. Although, after ten successive years of price increases, it may be tempting to ask if prices are peaking, I don't believe so. In fact I think this bull market has a long way still to go.
While the price of gold is influenced by a myriad of different factors, the main contributing factor over the last 10 years has been the declining values of the major currencies in particular the US dollar, which as measured by the Dollar index, has dropped from a high of 120 in 2001 to a low of just above 70 in April, 2008.... a loss of some 35%.
Why the Smart Money is Trading Dollar Bills for Hard Assets
By Eric Fry - dailyreckoning.com
01/26/11 Laguna Beach, California - "With each passing day," we observed last week, "inflation seems less and less a theoretical fiction, and more and more a genuine threat... No self-respecting economist or self-aggrandizing central banker is acknowledging any inflationary risk whatsoever," we continued. "But the indifferent data points of real-world prices testify to the contrary."
Shortly after airing these remarks we learned that import prices soared 1.2% during the month of December alone Ð lifting the year-over-year surge in import prices to 4.7%. The following day we learned that producer prices jumped 3.8% year-over-year. A few days after that, the Federal Reserve Bank of Philadelphia announced that producer prices in the Philadelphia region had jumped to their highest levels since July 2008.
US Senators to introduce bills to repeal rules opposed by gold dealers
By Allen Sykora - CommodityOnline.com
(Kitco News) - Republican and Democratic Senators say they are introducing bills to repeal so-called Form 1099 reporting requirements that are broadly opposed by businesses, including gold-coin dealers.
Senate Finance Committee Chairman Max Baucus (D-Mont.) and Senate Majority Leader Harry Reid (D-Nev.) issued a statement Tuesday saying they have introduced a bill for repeal of the controversial rules that otherwise are scheduled to go into effect in 2012. Additionally, Sen. Mike Johanns (R-Neb.) said in a column posted on his Web site Monday that he intended to introduce legislation Tuesday continuing his past efforts to repeal the 1099 rules.
Paper Money Madness: Inflation-Fueled Economic Growth Does Not Indicate That An Economy Is Getting Stronger
TheEconomicCollapseBlog.com
If the U.S. economy "grows" by 4 percent in 2011, but by the end of the year we are paying $3.00 for a loaf of bread, $4.00 for a gallon of milk and $5.00 for a gallon of gasoline are the American people going to be better off economically or worse off? The answer is obvious, but most "experts" in the mainstream media continue to insist that as long as U.S. GDP is increasing and as long as the stock market is going up that our economy is improving. But that is just not the case. If the amount of money in circulation was relatively constant, those measurements would be helpful, but unfortunately the U.S. government and the Federal Reserve are dramatically pumping up the money supply right now. Just because larger amounts of paper money are changing hands does not mean that the economy is getting stronger. Of course GDP is going to rise when there is much more money in the system. But economic growth that is fueled by inflation is just an illusion and it is not an indicator of economic health at all.
Peter Schiff Inflationary Nightmare Coming
INFLATION'S REAL VICTIMS: QUALITY, HONESTY, CHARACTER
Submitted by John Rubino - FinancialSense.com
.... This isn't just a generic story of corporate greed, nor is it just an indictment of Wal-Mart's business model. It's much bigger than that, because Wal-Mart is doing what everyone ends up doing when inflation takes hold.
For a merchant, it's hard to ask customers to pay a higher price, but relatively easy to fool them. Just lower the quality or shave the amount, and customers think they're still getting the same good deal as always. But in reality you both suffer: they get a lower-quality product and you become a liar. This kind of soft fraud, because it strikes at the culture rather than just the economy, is far worse than simple higher prices.
Fed Disappoints, Dollar Tumbles
BY KATHY LIEN - GreenFaucet.com
The first monetary meeting of the year has proven to be a disappointment. The Fed barely upgraded its assessment of the economy and the decision was unanimous, which makes this monetary policy statement slightly more dovish than the last. Despite significant improvements in the housing market and stronger service and manufacturing sector activity, the Fed erred on the side of caution, opting to make minimal changes. Perhaps they want to hedge themselves in case the improvements start to recede but their conservativeness has not been lost to investors.
Federal Reserve toes the line
By Annalyn Censky
NEW YORK (CNNMoney) -- Looks like the new year brought no change for the Federal Reserve.
In its first meeting of 2011, the central bank said it remains cautious about the economic recovery. It decided to leave interest rates unchanged near historic lows and continue with its $600 billion bond buying program to stimulate the economy.
"This is the same language," said economist Robert Brusca with FAO Economics. "The language of disappointment from the Fed."
The anticlimactic decision was unanimous among all 11 members of the Fed's voting committee, including the four newest voters.
Muni bond market stays on recovery path
By Tom Petruno - LATimes.com
The municipal bond market continued to stabilize Wednesday after the vicious sell-off of the last three months, as prices of many bonds rose for a sixth straight trading session.
The rise in prices pushed market yields lower, though the rate of decline slowed from the previous few days. The annualized tax-free yield on the Bond Buyer index of 40 long-term muni issues nationwide (charted below) slipped to 5.79% from 5.80% on Tuesday.
The Bond Buyer yield had soared to a two-year high of 5.95% on Jan. 18, an increase of more than one full percentage point from mid-October.
Watch out for the Black Swans
by Mad Hedge Fund Trader - OilPrice.com
It is not my intention to ruin your day. But I may well do that if you read this piece. While traders pile on their longs with reckless abandon, and retail flows into equity mutual funds turn positive for the first time in two years, I am hearing a rising tide of negativity from the jungle telegraph. There are Òblack swansÓ circling out there everywhere, and the risk is that they alight upon us in great unexpected flocks, like a scene out of Alfred HitchcockÕs classic film, The Birds.
Let me give you a list of things that can go wrong this year:
The ten year Treasury bond spikes to 5% and money gets expensive.
Crude soars to $120 a barrel and gasoline rises to $4 a gallon.
Europe blows up again, sending the dollar through the roof.
Seeing stock prices soar, Ben Bernanke ends QE2 early, paring it down to QE 1/2.
The high frequency traders and quants hungry for a mean reversion smell blood in the water and trigger another "flash crash."
Retails investors conclude they were right to stay away and bail on what they have remaining.
Tax cut deal pushes deficit to $1.5 trillion
By Jeanne Sahadi
NEW YORK (CNNMoney) -- The federal deficit for 2011 will hit $1.5 trillion, driven higher by the "slow and tentative" economic recovery and the bipartisan tax cut deal passed late last year, the Congressional Budget Office said Wednesday.
The deficit forecast would equal to almost 10% of the economy.
And if lawmakers extend many of today's current policies otherwise set to expire soon, the national debt would likely rise by $12 trillion over the decade from 2012 to 2021. That is about $5 trillion more than would be the case otherwise and would bring total debt to $23 trillion, the CBO said.
More than half of the accumulated debt will be the result of the interest payments.
Random Thoughts About the Year Ahead
BY STEVE SAVILLE
• When we penned our 2010 forecast at around this time last year we stated that similarities between the stock market's current situation and its situation during the early 1930s had been eliminated. If any more evidence were needed to rule out an early-1930s-like scenario, 2010's market action provided it.
• As also stated in our 2010 yearly forecast, the monetary backdrop is the single most important difference between the early 1930s and the current situation. Specifically, there was massive monetary deflation during the early 1930s and there has been massive monetary inflation since September of 2008. Although it has helped to support prices, the surge in money supply will have very negative long-term consequences.
• Our view continues to be that a global economic depression of the inflationary kind has begun. At this stage the symptoms of economic depression are only evident in the US, Europe and Japan, but we expect that the depression will become more widespread after China's real-estate bubble bursts.
New World Order: Food Price Inflation; House Price Deflation
By: Richard Daughty - GoldSeek.com
You can tell by my bleary, bloodshot eyes, my rumpled appearance, my musky aromas and my overtly hostile attitude that I have been holed up in the Mogambo Armageddon Bunker (MAB), scared out of my mind about the inflation in prices that is surely going to consume us, thanks to the unholy Federal Reserve creating so incredibly much, so stupendously much, so astoundingly much, So Freaking Much Money (SFMM).
Naturally, as a lunatic-fringe Austrian Business Cycle Theory kind of guy, and one who has also seen the terrifying 4,500-year historical record of fiat currencies, and being an ordinary guy who is also paranoid and scared enough as it is without the added terror of this inflation thing, I am furiously buying gold, silver and guns, the latter item to protect the two former items, which will be so valuable in the collapse that I can buy anything I want, any time I want, anywhere I want, which you have to agree is a really nice way to get through a hyperinflationary collapse!
Foreclosure Document Fraud Drives Notaries to Take the Fifth
By ABIGAIL FIELD - DailyFinance.com
Among the many legal problems now being discovered with the foreclosure documents that banks have been using are false notarizations. The most typical variety of this problem occurs when a notary certifies that the person whose signature appears on a document really did sign it, even though the notary didn't witness the signing.
While such false notarizing is criminal, I've not yet heard of any notaries being charged. However, in Maryland, Steve Lash of The Daily Record reports that 18 current and former notaries have invoked their Fifth Amendment right against self-incrimination in a foreclosure case.
Inspector general: Mortgage modification program a 'failure'
By Gregory Korte, USA TODAY
WASHINGTON - A mortgage modification program aimed at saving homeowners from foreclosure has failed because regulators are "afraid to rein in or impose penalties on the mortgage servicers" whose record "has been nothing short of abysmal," the program's watchdog told Congress Wednesday.
As a result, some House Republicans moved to scrap the 2-year-old program.
Neil Barofsky, the special inspector general for the government's bank bailouts, bluntly labeled the mortgage program a "failure" in testimony before the House oversight committee.
Inside Mortgage Mess
In States Where Foreclosures Bypass Judges
New Evidence of Robo-Signers
by Marian Wang - ProPublica
When problems in the foreclosure process caused banks to temporarily freeze foreclosures last fall, the focus was on improperly signed foreclosure affidavits - legal documents used when foreclosure are required to go through courts.
But as we've noted, most states are "non-judicial" states, meaning foreclosures can proceed without a court order. And turns out, those states - where the process lacks judicial supervision and homeowners have less recourse to fight back - also seem to have problems with banks using robo-signers and taking other foreclosure shortcuts, American Banker reports.
Is Now a Good Time to Pay Down Your Debts?
by Gail Tverberg - OilPrice.com
The question of whether a person should pay down debts comes up often, when there are forecasts that suggest unemployment rates and consequently debt defaults will rise dramatically in future years. I know some people say, definitely, "Yes". I would say, "It depends."
Clearly, at this point, interest rates you can get in a bank are low, and the long term value of most stocks and bonds is very iffy. So from that point of view, if you have assets that aren't going to earn much in the future, and a smaller amount of debt, you may want to offset the assets against the debt. But not everyone is in that position. And not all debts are not equally important to pay back.
Gallup Poll: How Underemployment Hurts the Economy
By DANNY KING - DailyFinance.com
Even with a full-time job, it can be hard enough to pay the bills. But for those who are unemployed or underemployed, that task is about three times harder, according to a Gallup Poll released Tuesday. The poll found that unemployed and underemployed Americans are three times as likely to fall behind on their bills -- and risk bankruptcy -- as those who are working.
About one in four people facing employment problems say they're facing financial difficulties, compared to about 8% of those who are fully employed, according to the survey. On average, about one in nine adults say they're facing financial challenges.
US Unemployment and Other Data Not Indicative of "Recovery"
By Bill Bonner - dailyreckoning.com
01/26/11 Baltimore, Maryland - There are two legs to American household wealth - jobs and housing. Here's the latest on housing from The New York Times:
The long-predicted double-dip in housing has begun, with cities across the country falling to their lowest point in many years, data released Tuesday showed.
Prices in 20 major metropolitan areas fell 1 percent in November from October, according to the Standard & Poor's Case-Shiller Home Price Index. The index is only 3.3 percent above the low it reached in April 2009 and has fallen fell 1.6 percent from a year ago.
Health Care and the State of the Union: Obama Eager to Improve Law, Not Kill It
By MELLY ALAZRAKI - DailyFinance.com
In his State of the Union address Tuesday night, President Barack Obama didn't shy away from tackling the ongoing questions about the health care reform law head on. And though he started with a bit of humor -- "Now, I have heard rumors that a few of you still have concerns about our new health care law" -- he quickly made one thing quite clear to anyone who might think he's taking the matter lightly:
"What I'm not willing to do," said Obama, "what I'm not willing to do is go back to the days when insurance companies could deny someone coverage because of a pre-existing condition."
New York Times May Create Its Own WikiLeaks
By Alexis Madrigal - the Atlantic.com
This makes sense. The New York Times may create a technical conduit for would-be leakers to send things anonymously to the paper. One assumes it would be encrypted and provide considerable protections for its users.
The New York Times is considering options to create an in-house submission system that could make it easier for would-be leakers to provide large files to the paper.
Executive editor Bill Keller told The Cutline that he couldn't go into details, "especially since nothing is nailed down." But when asked if he could envision a system like Al Jazeera's Transparency Unit, Keller said the paper has been "looking at something along those lines."
Davos elites see global economic shift East, South
AFP - Breitbart.com
Power in the global economy is shifting from the advanced world to Asia as recovery takes hold, Davos analysts said Wednesday, as political and business elites began their annual meeting.
"What is really happening is a slowdown of the western world and the growth of the emerging markets. This is a complete shift in the balance of power," Azim Premji, chairman of Indian software major Wipro, told the opening panel.
"In 10 years, the economy of the emerging world will be ... equal or slightly larger than the US economy," added the billionaire at the World Economic Forum.
China's highest ranking official at the International Monetary Fund, Zhu Min, said that global recovery was still being driven predominantly by Asian giants India and China.
Ron Paul "We're NOT Threatened Militarily By ANY Country AT ALL!
IT'S ALL A POLITICAL GAME!"
After Tunisia: Obama's Impossible Dilemma in Egypt Could the U.S. find itself on the wrong side of history?
By Shadi Hamid - The Atlantic.com
The Middle East just got more complicated for the Obama administration. The January 14 popular revolt in Tunisia, the first ever to topple an Arab dictator, has called into question a basic premise of U.S. policy in the Middle East - that repressive regimes, however distasteful, are at least stable. They can also be counted on to support key American interests, which is part of why the U.S. provides them with substantial assistance. Tunisia was considered one of the least likely to fall, but it fell. Across the region, opposition groups, hoping to repeat Tunisia's successes, are emboldened and increasingly active. For the first time, they know what change looks like. More importantly, they now believe it can happen in their own countries. But in the growing battle between Arab autocrats and popular oppositions, the U.S. is finding itself torn between the reliable allies it needs and the democratic reformers it wants.
State of the Union: Full text of the speech
'We will move forward together, or not at all ... challenges we face are bigger than party'
WASHINGTON - Here is the transcript of President Barack Obama's State of the Union Address to Congress, as prepared for delivery on Tuesday night:
Mr. Speaker, Mr. Vice President, Members of Congress, distinguished guests, and fellow Americans:
Tonight I want to begin by congratulating the men and women of the 112th Congress, as well as your new Speaker, John Boehner. And as we mark this occasion, we are also mindful of the empty chair in this Chamber, and pray for the health of our colleague - and our friend - Gabby Giffords.
It's no secret that those of us here tonight have had our differences over the last two years. The debates have been contentious; we have fought fiercely for our beliefs. And that's a good thing. That's what a robust democracy demands. That's what helps set us apart as a nation.
Obama: Freeze Spending
President Pledges Curbs on Some Domestic Programs; GOP Says Plan Falls Short
By PATRICK O'CONNOR - WSJ.com
WASHINGTON - President Barack Obama used his State of the Union address to challenge lawmakers in both parties to rise above partisan divisions to tackle problems that will allow the U.S. to compete in the global economy.
"To win the future, we'll need to take on challenges that have been decades in the making," the president told a joint session of Congress.
The president called on Congress to lower the corporate tax rate by closing industry-specific loopholes, find spending cuts across the government and invest more money in education, infrastructure and research. The president also called for a five-year freeze on nondefense discretionary spending.
*****
Obama endorsed correction of 1099 burden on small business, in State of the Union speech 1.25.2011 Reid, Baucus move to repeal 1099 provision
By Rich Daly - ModernHealthCare.com
The two Democratic leaders in the Senate most responsible for enactment of the healthcare reform law last year are now pushing for a change in the law, even as they fight off Republican efforts to make other changes or repeal the entire measure.
Senate Majority Leader Harry Reid (D-Nev.) and Max Baucus (D-Mont.), chairman of the Senate Finance Committee, introduced legislation Tuesday that would repeal the healthcare law's requirement for businesses to report every vendor payment valued at $600 or more to the IRS using Tax Form 1099. The provision has drawn near-universal scorn from business advocates for creating a new regulatory burden for little benefit and none related to healthcare.
Heading to the World Economic Forum at a Crossroads Moment for the World
By Arianna Huffington
As soon as I hit "Publish," I'm getting on a plane for the seven-hour flight to Zurich, followed by a two-hour drive to Davos for the 2011 World Economic Forum.
According to early reports, the mood in Davos this year will be "somber."
"Humanity is at a cross-roads," Klaus Schwab, the Forum's founder, plans to say in his open remarks. "We can either continue to work as lobbyists for our narrowly defined self-interests and keep doing the same old things that got us into the crisis in the first place," or we can "act together as true global leaders, with the long term global public interest in mind and at heart."
IMF: Europe poses the key risk to global economy
By Howard Schneider - WashingtonPost.com
Europe needs to increase the size of its economic rescue fund and take more decisive action to fix its weaker banks, the International Monetary Fund said Tuesday in a new report that cites lingering problems in Europe as the key risk to the global economy.
The 17 nations that share the Euro as a currency pledged roughly $600 billion to assure global markets that troubled countries such as Greece and Ireland would pay their bills. But to assure the fund's credit rating remains high, only about half of that money is actually available -- meaning the fund could, as a practical matter, be tapped out if another country such as Portugal or Spain needs help.
IMF: Instability Threatens Recovery
By MICHAEL R. CRITTENDEN
WASHINGTON - The uneven global recovery continues apace but sovereign debt and financial sector risks, particularly in Europe, could threaten global stability, the International Monetary Fund said Tuesday.
A pair of reports released by the fund suggested that advanced economies are still struggling to move past the recent financial crisis, while growing emerging economies are showing signs of overheating and inflationary pressures.
Policy makers around the globe need to address these issues, including through the expansion of the rescue fund for the euro area, or risk a faltering recovery, the IMF said.
"A host of measures are needed in different countries to reduce vulnerabilities and rebalance growth in order to strengthen and sustain global growth in the years to come," the fund said.
High frequency trading dominates UK stock market TABB Group Says Only 65% of UK Equity Turnover Represents Meaningful, Executable Liquidity
Martin Rabkin - TABB Group
New Research Shows How Reprints of Already-Conducted Trades and High-Frequency Trading Make UK Equity Markets Appear Deceptively Deep, While 50% of Cash Trading is CFD-Related
LONDON & NEW YORK, January 24, 2011 - New research published today by TABB Group shows that only 65% of turnover in the UK, Europe's largest equity market, is actually meaningful and executable liquidity with 35% consisting of "noise," or reprints of already already-conducted trades. Cash trading is further diluted by a plethora of execution channels as well as alternative products, such as Contracts-for-Difference, and the true size of the investor market is masked by high-frequency trading.
China's Global Currency Expansion Bringing More Yuan Denominated Products to Market
BY KERRI SHANNON, Associate Editor, Money Morning
Chinese regulators plan on developing more yuan-denominated products and allowing more offshore yuan investment opportunities in the continued push for the global expansion of China's currency.
More yuan-denominated bonds, foreign direct investment (FDI) opportunities and eventually initial public offerings (IPOs) will hit the markets in coming years as China gradually allows its currency, also called the renminbi, to be more accessible in international trade and investment. Chinese regulators also want to support international development of Chinese entities.
The People's Bank of China (PBOC) earlier this month announced that it has started looking into permitting Chinese companies with overseas yuan accounts to engage in FDI in the mainland. The central bank also recently said it would allow mainland companies to conduct overseas direct investments (ODI) with the yuan.
Does Favoring Free Enterprise Mean Favoring "Business"?
Mises Daily: by Jeffrey A. Tucker
American political rhetoric seems to operate on a regular cycle, like a clock, which is why it seems lately like we are reliving the Clinton years.
The story goes like this. A Democratic administration with lefty ideas gets elected, pushes hard for a series of goofy reforms like protosocialized medicine, which prompts a backlash and thereby a rethinking among the rulers, who then tack to the right and become "centrist" by praising the great contribution that the business sector makes to American life.
Most of these grandiose shifts - Obama is going through one now - are illusory and pointless, like slapping a new color of paint on a car that is traveling in one direction in order to fool people into believing that it is a different car going in a different direction.
The Most Predictable Financial Calamity in History
By Greg Hunter's USAWatchdog.com
In November 2010, the Federal Reserve announced a second round of economic stimulus commonly referred to as Quantitative Easing (QE2). The reason, according to the Fed, was "progress toward its objectives has been disappointingly slow." So, to try and turn the economy around, the Fed said, ". . . the Committee intends to purchase a further $600 billion of longer-term Treasury securities by the end of the second quarter (June) of 2011, a pace of about $75 billion per month." (Click here to read the complete announcement from the Fed.) QE means the Fed basically creates money out of thin air to buy debt. The current money printing orgy is financing more than half of U.S. government right now. The first round of QE bought toxic mortgage debt and bailed out the bankers.
INFLATION IS SO MUCH WORSE THAN WE'RE TOLD
by Chris Martenson PhD - FinancialSense.com
Inflation is actually much higher than what the BLS claims it is; something that purchasers of college tuition, pharmaceuticals, or health insurance know all too well.
To give the BLS some credit, they must try and estimate a single rate of inflation that applies to everyone equally. But that is a completely impossible task. An octogenarian living in Seattle on a meager pension and taking lots of prescription medications will have a totally different inflation experience than an 18 year old living in their parent's basement eating Ramen noodles.
But even after spotting the BLS some slack, there are some enormous and glaring errors in their methods that render the official inflation measure hopelessly - and dangerously - inaccurate.
Outlook 2011: Fear and Love in Gold Trading
By Frank Holmes, CEO, U.S. Global Investors Inc.
Wall Street has been calling gold a bubble since 2005, when it hit $500. Some media naysayers remained negative even as they wrote the headlines proclaiming record highs and saw gold rise almost 30% in the past 12 months.
Interestingly, despite gold's latest run, it was still a laggard compared to many other commodities. In the commodity world, gold didn't even place in the top half in 2010. Against a basket of 14 commodities that includes everything from aluminum to wheat, gold's 29.52% return places it eighth. Palladium took the top spot with a 96.6% return, followed by silver with an 83.21% return. Natural gas continued its cellar-dwelling ways, dropping 21.28% to become the worst-performing commodity of the basket.
There are two main drivers of gold demand: The Fear Trade and the Love Trade.
Gold traders eyeing FOMC meeting, technical charts for next clues
By Allen Sykora
(Kitco News) - Gold traders are looking ahead toward a meeting of the Federal Open Market Committee and also keeping an eye on technical-chart patterns as a new trading week gets under way.
Analysts say the likelihood is that Fed policy-makers will maintain accommodative monetary policy, which would be supportive of gold. But while this could mean a slight bounce, much of this is presumably already factored into prices.
At the same time, traders are also watching the chart picture after gold's recent weakness. Some fear gold may run into further technically oriented selling if it can't recapture the 100-day moving average, yet others are hopeful that gold will be able to hold around its the November lows.
How gold became politically correct
by Michael J. Kosares
It all started very quietly with a little-known speech in May of 2008 by Benn Steil, a highly respected policy insider at the the Council on Foreign Relations. The CFR is generally considered the font of establishment thinking on foreign and international economic policy. Steil's speech had to do with gold -- an unusual subject for someone so prominent in the CFR. His proposal? That gold should be restored to a central role in the international monetary system.
Steil's proposal had an immediate impact. Reports began to filter into the markets that certain central banks were beginning to accumulate gold bullion as part of their reserves. Some went about their acquisitions quietly. Others pursued their interest in the open. India, for example, made a highly publicized 200-tonne purchase from the International Monetary Fund. Simultaneously, traditional gold sellers, like many of the European central banks, shelved selling plans. Sales under the Central Bank Gold Agreement came to a standstill. It was about this time, too, that reports began to surface of a very strong developing interest in gold bullion among major hedge fund operators.
Justice Scalia: Lawmakers Need To Get Familiar With Federalist Papers
By HENRY C. JACKSON - HuffingtonPost.com
WASHINGTON - Supreme Court Justice Antonin Scalia says members of Congress need to get themselves a copy of the Federalist Papers - and make sure they read it.
Scalia made the short walk from the Supreme Court to the Capitol on Monday to speak at a seminar organized by GOP Rep. Michele Bachmann and the Tea Party Caucus. In remarks closed to the media, Scalia told about 50 members of Congress and their staff to "pay attention" and read up on their roles. Attendees described the associate justice as professorial and occasionally playful.
"He said we should all get a copy of the Federalist Papers and read it, underline it and dog-ear it," said Rep. Jan Schakowsky, D-Ill., who attended the event.
How the State of the Economy Has Changed Under Obama
By JONATHAN BERR- DailyFinance.com
The economy may be showing signs of improving, but try telling that to the millions of Americans still struggling to make ends meet. That disconnect is one of several problems President Barack Obama faces as he prepares to deliver his second State of the Union message -- an event that coincides with the rising power of the Republican Party following last year's midterm elections.
Obama has the daunting task in his speech of refuting GOP claims that he's antibusiness - while at the same time trying not to alienate his liberal supporters. His midterm move to the political center is becoming more apparent every day. The president recently picked General Electric (GE) CEO Jeffrey Immelt to head an economic advisory group, and he has named former Commerce Secretary and JPMorgan Chase (JPM) exec William Daley as his new White House Chief of Staff.
E-mails Suggest Bear Stearns Cheated Clients Out of Billions Lawsuit alleges the bank took extreme measures to defraud investors, and now JPMorgan may be on the hook
By Teri Buhl - The Atlantic.com
Former Bear Stearns mortgage executives who now run mortgage divisions of Goldman Sachs, Bank of America, and Ally Financial have been accused of cheating and defrauding investors through the mortgage securities they created and sold while at Bear. According to e-mails and internal audits, JPMorgan had known about this fraud since the spring of 2008, but hid it from the public eye through legal maneuvering. Last week a lawsuit filed in 2008 by mortgage insurer Ambac Assurance Corp against Bear Stearns and JPMorgan was unsealed. The lawsuit's supporting e-mails, going back as far as 2005, highlight Bear traders telling their superiors they were selling investors like Ambac a "sack of sh--."
Small Government's Last Hurrah
By Rev. Michael P. Orsi - Thge American spectator.org
.... Given recent experience with the North American Free Trade Act (NAFTA), passed in 1994, it would appear that Coolidge and the industrialists were on to something. Reform Party candidate H. Ross Perot predicted that NAFTA's elimination of most trade barriers between the U.S., Mexico and Canada -- a step supported by the leaders of both the Republican and Democratic Parties -- would result in American jobs being sucked down to Mexico. That happened, and American industry has never recovered. Likewise, the low tariffs and high import quotas which China enjoys through its Most-Favored-Nation (MFN) Status have decimated American manufacturing jobs and contributed greatly to our national debt. Alexander Hamilton, Theodore Roosevelt, and Ronald Reagan had no problem restricting imports to promote our national interest. Because of present realities some social scientists believe that at least 10% of the blue-collar workforce will not be employed at any given time. In fact, this group is becoming more and more dependent on government largess for survival.
SEC Illinois Pension Fund Probe Confirmed, WSJ Reports
By Lila Shapiro - The Huffington Post
On Monday night, the Illinois state governor's office confirmed that the Securities and Exchange Commission has launched an investigation into public officials' statements concerning the state's chronically underfunded pension fund - which faces one of the biggest shortfalls in the nation.
The Wall Street Journal reported that the inquiry is focused on "public statements concerning an overhaul measure passed in 2010 meant to help shore up the retirement system." According to the governor's spokeswoman, the governor's office is fully cooperating with the inquiry.
The WSJ details what the investigation will be looking at:
"An issue being examined is whether Illinois was taking future savings and treating them as current reductions in the cost of the pension fund, said Robert Kurtter, a managing director in the public finance division at Moody's Investors Service, who said his firm spoke with Illinois officials about the inquiry. One of the measures that Illinois took to save costs was to raise the retirement age for newly hired Illinois workers."
The Myth of a Middle Class
Mises Daily: by Cristian Gherasim
Almost a year ago, during the State of the Union address, President Obama came up with another plan to ease the economic burden on middle-class families. No news here. In fact, he gave that same do-or-die case for big government we have heard over and over: "The middle class has been under assault for a long time... We've just come through what was one of the most difficult decades the middle class has ever faced."
What always intrigues me is that we seem to take for granted, without too much scrutiny, the things government officials tell us, especially those in highest office. This speech is no exception. How many of us have really questioned the validity of expressions like "middle class"? Is there really a middle class? What's behind this terminology so beloved by our leaders? I shall try to answer the last question first.
No Jobs, No Hope, No Future: 27 Signs That America's Poverty Class Is Rapidly Becoming Larger Than America's Middle Class
EndOfTheAmericanDream.com
In the America that most of us grew up in, most Americans considered themselves to be part of the "upper middle class", the "middle class" or "the lower middle class". Yes, there have always been poor people and homeless people, but they were thought to be a very small sliver of the population. Well, today all of that is dramatically changing. America's emerging "poverty class" is exploding in size at the same time that America's middle class is rapidly disappearing. You won't hear it on the mainstream news, but the truth is that the United States has lost ten percent of its middle class jobs over the past decade. Only the top 5 percent of income earners in the U.S. has had their incomes increase enough to keep up with the rising cost of living over the past 40 years. The truth is that today there are a whole lot of people aggressively jostling for the small number of good jobs that are actually available and each year millions more Americans are being squeezed out of the middle class. The number of Americans that are financially dependent on the U.S. government continues to set new records month after month. The number of Americans that are participating in the labor force continues to go down. The sad reality is that the "American Dream" that so many Americans used to take for granted is being ripped away from us. If you still believe that the United States is guaranteed to always have a very large, very prosperous middle class then you really need to read the statistics listed below.
Who are America's jobless?
By Susan Page, USA TODAY
The jobless have lost more than their jobs.
In a USA TODAY/Gallup Poll of unemployed Americans, most of those surveyed have lost any optimism they will find a job soon or end up with work they really want to do. Two-thirds struggle to pay their bills. Nearly half have had to deal with such major personal problems as moving to cheaper housing or fighting depression.
"One day you have a job, and the next day they call you into a big meeting and tell you in 30 days you'll no longer be employed," says Lakiesha McPherson, 32, of Philadelphia, who was laid off last June from her job as a middle-school counselor. She was among those surveyed. "At this moment, I'll take any job, just to say I have a job."
Animal Farm Comes to Arizona
By Jeffrey Lord - The American Spectator.org
Talk about irony.
For the most unexpected of reasons, Congresswoman Gabrielle Giffords, a supporter of Obamacare, may well become a popular symbol of the reason to repeal it.
Outside of a lone, extremely disturbed man in a Tucson jail cell, there is no one who doesn't wish Congresswoman Giffords well in her fight to recover from a gunshot wound to the head.
But there's something else that is, however uncomfortable, necessary for the rest of America to discuss. Thatsomething has nothing to do with talk radio, Fox News, Rush, Sean, Mark, Glenn, O'Reilly, Sheriff Dupnik, civility or gun control.
The issue at hand is the reality of Obamacare in practice.
More plainly put: Animal Farm has come to Arizona.
Robert Shiller on Human Traits Essential to Capitalism Yale economist Robert Shiller argues that rising inequality in the US was a major cause of the recent crisis, and little is being done to address it. He chooses books that give insight into human nature
TheBrowser.com
You've chosen a fascinating topic, but quite a tough one to get one's head around.
It's been the subject of discourse for centuries - or even millennia - so it's very hard to summarise.
If you did try to summarise it, what would you say you're trying to get at with these book choices?
I think that our economic system reflects our understanding of humankind, and that understanding has been developing, with especial rapidity lately. You have to understand people first before you can understand how to devise an economic system for them. And I think our understanding of people has been accelerating over the last century, or even half-century.
Robo-Signing: Documents Show Citi and Wells Also Committed Foreclosure Fraud
By ABIGAIL FIELD - DailyFinance.com
Documents submitted to a court are supposed to be true as submitted. As an attorney, if I file with a court a document in which I swore that I personally verified the information contained within the document is true, but I didn't actually do that, I'd get in real trouble. It's simple: That's fraud in the eyes of the court.
GMAC, JPMorgan Chase, Bank of America and One West Bank employees routinely sign hundreds of documents without verifying what they're signing. Those documents are then submitted to courts as if the documents were true, to enable the banks to foreclose on delinquent properties. Wells Fargo and Citigroup's CitiMortgage told The New York Times their employees do not engage in similar practices. Yet, new evidence I've found shows they have. At deadline, I was still awaiting a response from CitMortgage.
Case-Shiller: Home Prices Continued Their Descent In November
By ALEX VEIGA - HuffingtonPost.com
LOS ANGELES - Home prices are falling across most of America's largest cities, and average prices in eight major markets have hit their lowest point since the housing bust.
The Standard & Poor's/Case-Shiller 20-city home price index released Tuesday fell 1 percent in November from October. All but one city, San Diego, recorded monthly price declines.
Eight others sank to their lowest levels since prices peaked in 2006 and 2007: Atlanta, Charlotte, N.C., Las Vegas, Miami, Portland, Ore., Seattle, Tampa, Fla., and Detroit, which saw the largest drop at 2.7 percent from the previous month.
Home prices at lowest levels since housing bust
Prices down across most big U.S. cities, S&P/Case-Shiller index shows
WASHINGTON- Home prices are falling across most of America's largest cities, and average prices in eight major markets have hit their lowest point since the housing bust.
The Standard & Poor's/Case-Shiller 20-city home price index fell 1.6 percent in November from October. All but one city, San Diego, recorded monthly price declines.
"Everything in this report is still sliding - it's still pointing downward," David M. Blitzer, Chairman of the Index Committee at Standard & Poor's, told CNBC Tuesday. "We still seem to be, at best, scraping along the bottom."
In other economic news Tuesday, the Conference Board said its closely-followed Consumer Confidence Index rose in January to its highest level in eight months with Americans growing a little more confident about the job market and business conditions.
California hotel foreclosures up 122% in 2010
By Hugo Martin - LATimes.com
The number of California hotels that were foreclosed on in 2010 jumped 122%, to 138 properties, compared with the previous year, according to a new real estate report.
The quarterly survey by the Atlas Hospitality Group of Irvine attributes the growing number of foreclosures on the effects of the recession on hotel owners who took out expansion and renovation loans during better economic times.
Atlas predicted that the number of hotels in default and foreclosure will continue to rise through the first half of 2011 before the numbers begin to level off under a stronger economy.
The largest hotel in the state to be foreclosed on in 2010 was the 512-room San Jose Holiday Inn near the Norman Y. Mineta International Airport.
U.S. Home Prices Slump Again, Hitting New Lows
By DAVID STREITFELD - NYTimes.com
The long-predicted double-dip in housing has begun, with cities across the country falling to their lowest point in many years, data released Tuesday showed.
Prices in 20 major metropolitan areas fell 1 percent in November from October, according to the Standard & Poor's Case-Shiller Home Price Index. The index is only 3.3 percent above the low it reached in April 2009 and has fallen fell 1.6 percent from a year ago.
"A double-dip could be confirmed before spring," the chairman of S.&P.'s index committee, David M. Blitzer, said.
Eight of the 20 cities in the index fell to new lows for this cycle, including Atlanta; Charlotte, N.C.; Portland, Ore.; Miami, Seattle; and Tampa, Fla. Only a handful of places - essentially California and Washington - saw prices rise.
Churches Find End Is Nigh The Number of Religious Facilities Unable to Pay Their Mortgage Is Surging - By SHELLY BANJO - WSJ.com
ROSEVILLE, Calif. - Residential and commercial real-estate owners aren't the only ones losing their properties to foreclosure. The past few years have seen a rapid acceleration in the number of churches losing their sanctuaries because they can't pay the mortgage.
Just as homeowners borrowed too much or built too big during boom times, many churches did the same and now are struggling as their congregations shrink and collections fall owing to rising unemployment and a weak economy.
Obama Administration Touts New Tools to Fight Health Care Fraud
By Susan Jones
(CNSNews.com) - The Obama administration says its efforts to prevent health care fraud are paying off, and it expects to boost those efforts with new rules authorized by the Democrats' health care law.
Republicans also support efforts to reduce health care fraud, and they say such efforts can and should proceed, even if the Democrats' health care law is repealed.
The Health and Human Services Department on Monday announced final rules, including expanded screening of health care providers to help keep cheaters out of Medicare, Medicaid and the Children's Health Insurance Program (CHIP).
Obama adviser Carol Browner leaving
By Kara Rowland - The Washington Times
Carol Browner, the former Clinton official whom President Obama tapped to help enact a cap-and-trade approach to global warming, will soon step down from her post as coordinator for energy and climate change policy, according to media reports.
The departure of Ms. Browner, who led the Environmental Protection Agency under former President Bill Clinton, comes a few months after Mr. Obama publicly acknowledged that comprehensive climate-change legislation is basically dead-on-arrival in the newly divided Congress.
News of her plans to step down was first reported by Politico, which said it's not clear that she will be replaced.
Chinese Company Files Suit to Block Sale of Motorola Unit
By DAVID BARBOZA - NYTimes.com
SHANGHAI - The Chinese telecommunications giant Huawei Technologies has filed a lawsuit seeking to prevent Motorola from completing the sale of its wireless networking division to Nokia Siemens Networks because of a dispute over technology contracts.
Huawei, a longtime partner of Motorola, said in a suit filed Monday in United States District Court in Illinois that it did not object to Motorola's decision to sell its unit to Nokia Siemens but was concerned that the equipment and technology Motorola was selling included technologies developed by Huawei. Motorola's sale of those technologies, Huawei said, would result in the misappropriation of trade secrets, copyright infringement and breach of contract.
Palestinians condemn US plan to settle refugees in South America Suggestion revealed in Palestine papers clashes with refugees' fundamental right to go home, say Palestinian groups
By Rory Carroll, Latin America correspondent - guardian.co.uk,
Palestinians have expressed shock and dismay at the US suggestion to settle Palestinian refugees in Argentina and Chile rather than let them return to ancestral land in Israel.
Representatives of the Palestinian diaspora said the plan to ship displaced Palestinians from the Middle East to a new homeland across the Atlantic clashed with their fundamental right to go home.
"It's completely unacceptable. It contradicts our inalienable right to return to our own homeland," said Daniel Jadue, vice-president of Chile's Palestine Federation. "That right cannot be renounced. To make this suggestion shows the mediation was not honest. It was clearly tilted in favour of Israel. This is extremely grave."
As Egypt Erupts, Will Obama Remain Silent?
By John Tabin - The American Spectator.org
Inspired by events in Tunisia, Egyptians are holding sizable anti-government protests in many cities today. In this context, it's worth highlighting a critique Jackson Diehl made last week:
More surprising is the Obama administration's de facto suport for Mubarak's immobility. On Tuesday, Obama called Mubarak; according to a White House "readout," they discussed "a broad range of issues, to include the New Year's attack on a Coptic Christian church in Alexandria, developments in Tunisia and Lebanon, and how best to advance Middle East peace."
Cairo a 'war zone' as demonstrators demand president quit
Protests continue in Tunisia and Lebanon
Summary of key events so far
Guradian.co.uk - Live updates 5.16pm (Cairo): Hillary Clinton, the US secretary of state, has urged all sides in Egypt to exercise restraint in the wake of today's protests. She said she believed the Egyptian government was stable and looking for ways to respond to its people's aspirations.
PENSIONS: A NEW CRISIS IS ABOUT TO HIT THE HEADLINES
by Fred Cederholm - FinancialSense.com
My State presently owes its pension funds $208 BILLION, what about yours?
I've been thinking about pensions. Actually I've been thinking about the State of our Union, unemployment/ underemployment, working people, Illinois obligations, dona/ gifts, defined benefits, defined contributions, deferred compensation, and bankruptcy. We are about to venture into major untested areas in 2011. There are a great many problems facing US/ us, but the issue of pensions has not yet even been put on the table of concerns for our consideration. That is going to change in the very near future. Which state or city will be the first to seek redress or forgiveness from obligations? What will be the areas of forgiveness sought? When the first hits, many others will follow!
The Great Debt Shift
By: John Browne - GoldSeek.com
If one were asked to describe the major global economic changes that have unfolded since the financial crisis began, a good starting place would be the massive shift of debt from the private to the public sector. Attempting to arrest a deepening crisis, governments all around the world have bailed out businesses and companies by transferring bad debts to the public books. Although these moves have provided some current stability (after all, governments are much less likely to default), the long-term consequences may be dire.
Two of the world's largest economies, the EU ($16 trillion) and the US ($14 trillion), have become the leading practitioners of private-to-public debt shifting. The US has assumed the debts of banks, insurers, mortgage holders, and even entire industrial sectors. The European Union has done the same for entire states. The resulting public debt levels are, predictably, placing strains on both the dollar and the euro.
Sarkozy Said to Seek Club of Nations to Address Currency Issues
By Sandrine Rastello and Helene Fouquet
Jan. 24 (Bloomberg) -- French President Nicolas Sarkozy wants to persuade the Group of 20 nations to establish a smaller forum to address global currency issues because the larger body is too unwieldy, three French government officials said.
For Sarkozy, who holds the rotating leadership of the G-20 and Group of Eight this year, establishing the club underscores the top item on his G-20 agenda: mediating the dispute between China and the biggest economies with freely traded currencies, said the officials, who spoke on condition of anonymity because he has yet to agree to a plan.
Spain tempts fate with minimalist bank rescue Spain has set in motion a partial nationalisation of its crippled savings banks, or cajas, but stopped short of the giant rescue deemed necessary by some experts to contain the country's festering crisis.
By Ambrose Evans-Pritchard - Telegraph.co.uk
Finance minister Elena Salgado said capital injections into the cajas would "in no way exceed €20bn [£17bn]", with a large part coming from the private sector. Spanish banks will have to boost their core Tier 1 capital ratio to 8pc, even stricter than the Basel III rules.
"This is unlikely to be a game-changer, and could potentially unwind the relief rally we have seen in the markets," said Silvio Peruzzo, RBS''s Europe economist.
"We view €50bn as the minimum recapitalisation for the Spanish banking system that would restore investors' confidence," said the bank.
RBS said Spain remains caught in a vice of tightening fiscal policy and a deepening property slump that may culminate in a 40pc fall in house prices, eroding the solvency of the cajas. The Madrid consultants RR de Acuna estimate the overhang of unsold homes at 1.2m.
BRIC Inflation Imperils Consumer Stocks as Food Bills Increase
By Michael Patterson and Lynn Thomasson
Jan. 25 (Bloomberg) -- Emerging-market consumer companies are valued at the most expensive levels on record just as surging food and energy costs curb household spending from Sao Paulo to Shanghai.
Shares in the MSCI Emerging Markets Consumer Discretionary Index traded at a 15-year high of 2.6 times net assets last week, data compiled by Bloomberg show. Wynn Macau Ltd., owned by billionaire Stephen Wynn's casino company, fetched a record 28 times forecast profit. Mahindra & Mahindra Ltd., India's biggest sport-utility vehicle maker, has a price-to-book ratio 53 percent higher than global peers, while Brazil's Cia. Hering, producer of Hering brand apparel, commands a 15 percent premium.
IS THIS TIME DIFFERENT FOR THE DOLLAR?
by Chris Mack - FinancialSense.com
The recent correction in precious metals and miners has led some investors to question whether they missed the ultimate top in the bull market for gold and silver. Conversely, this would lead to the question of whether the dollar and other fiat currencies have bottomed.
According to a study of 775 fiat currencies by DollarDaze.org, there is no historical precedence for a fiat currency that has succeeded in holding its value. 20 percent failed through hyperinflation, 21 percent were destroyed by war, 12 percent destroyed by independence, 24 percent were monetarily reformed, and 23 percent are still in circulation approaching one of the other outcomes.
Bernanke's Golden Dismount
By Michael Pento, Senior Economist at Euro Pacific Capital
There can be little doubt that Fed Chairman Benjamin Bernanke has been a very, very good friend to gold investors. However, some of those who have benefited from his largesse now fear that the recent selloff in gold indicates an imminent end to Bernanke's monetary high-wire act. Most assume that a cessation of the Fed's stimulative efforts, if it were to occur, would spell the end of gold's bull run. But a closer reading of Bernanke's economic philosophy and the Fed's own recent history, shows that once central banker begins a strenuous routine starts, it is very hard, if not impossible, for them to dismount.
It is widely believed that the unemployment rate, core inflation and home prices are the three key pieces of economic data that Bernanke and his Fed cohorts rely upon when formulating monetary policy. Although other data points, such as regional manufacturing surveys and the producer price index (which have rebounded significantly in some cases) attract some attention, they do not carry near the weight of the big three. With the unemployment rate remaining north of 9.4%, YOY core CPI inflation still less than 1% and the Case/Shiller Home Price Index down .8% from the year ago period, the Fed is in no mood to downshift. If anything, my guess is that Bernanke will step on the gas.
Favorable Interest Rates and Inflationary Concerns to Support Gold
By Mike Stall - GoldSeek.com
After a record ten straight years of annual gains, gold has entered a critical phase in one of its longest rallies. Markets are abuzz with contradictory views on whether gold will continue to rise in 2011. Signs of a slowdown are apparent in the short to medium-term. However, we investigate two compelling factors affecting gold prices and find out why there is no reason that the prolonged rally does not continue well into this year as well.
Interest Rates and Gold Prices
The Fed fund rate maintained through open market operation (OMO) shares a positive relationship with gold. However, in spite of the fact that the overall correlation of fed rate with gold is considerable, it is not strong enough to impact gold prices single handedly. An analysis of gold prices and the Fed fund rate suggests that the metal price moves do not depend entirely on the Fed OMO, but rely on the investor sentiment and their interpretation of the Fed OMO rather than Fed numbers. Change in the Fed fund rate has always influenced gold prices, but not in a systematic way. Our analysis indicates that the excess liquidity inflow into the system, in terms of reduced fund rate, does not necessarily find its way into gold investment. The relationship between rates and gold prices depends on the economic scenario.
Alan Greenspan and gold standard
By Dan Norcini
I want to go on record with comments about Alan Greenspan's remarks about a gold standard that hit the news today. That this man, who has rightly been criticized for speaking in riddles so that his hearers could take from his comments that which they wanted to hear him say, has now apparently changed his tune once again and yet can do so without the least bit of remorse is infuriating to me.
He basked in the accolades of his peers in the financial community being acclaimed, "The Maestro", because of his supposed ability to deal with financial crises and keep the US economy humming along in spite of it all come hell or high water. Yet we all know that his manner of so doing was to ramp up the printing presses and have them running at warp speed, flooding the system with liquidity at the first sign of any potential danger signs. Whether it was Mexico, or Russia, or Y2K, or the breaking of the tech stock bubble , his solution was always the same, lower interest rates and increase liquidity.
Gold traders eyeing FOMC meeting, technical charts for next clues
By Allen Sykora
(Kitco News) - Gold traders are looking ahead toward a meeting of the Federal Open Market Committee and also keeping an eye on technical-chart patterns as a new trading week gets under way.
Analysts say the likelihood is that Fed policy-makers will maintain accommodative monetary policy, which would be supportive of gold. But while this could mean a slight bounce, much of this is presumably already factored into prices.
At the same time, traders are also watching the chart picture after gold's recent weakness. Some fear gold may run into further technically oriented selling if it can't recapture the 100-day moving average, yet others are hopeful that gold will be able to hold around its the November lows.
'Gold to hit $1600; Silver to touch $40'
CommodityOnline.com The Gold Report: Gold and silver are off to rocky starts so far this year. But some gold pundits are still bullish on gold, predicting the yellow metal could finish 2011 at about $1,600/oz. Is the roughly 4% drop we've seen in the 2011 gold price simply profit taking by gold investors, or is something more fundamental behind gold's price weakness? Michael Berry: Well, I don't think there's anything fundamental about it. The gold price ran up toward the end of the year. There was a lot of positioning by the buy-side investors in gold and silver. I think the situations of both gold and silver are fundamentally different today - particularly silver, which could soon have reasonable position limits in the futures markets. We don't yet know what they'll look like.
Nine Responses to the "Gold Is A Bubble" Crowd
By Andrew Mickey, Q1 Publishing
The "Gold is a Bubble" crowd has been reawakened.
CNN warned earlier this week: Gold is a bubble, resist its charms.
Gold's six percent fall in the last six weeks and the Amex Gold Bugs Index (HUI) nearly 20% decline have signaled the gold correction is here.
The correction has emboldened the anti-gold crowd more than they have been since the 2008 credit crunch.
The correction is has been a tough one so far. But it hasn't shown itself to be anything more than just a correction. And if history is any example, it will last about two more months and gold will be returning to new highs by the end of 2011.
Despite the needed correction, gold's future is as bright as ever. Contrary to rising opinion, gold is not in a bubble... yet. Here are nine reasons why.
OUTLOOK 2011: EVERYONE NEEDS COMMODITIES
by Frank Holmes - FinancialSense.com
The essence of natural resources and commodity investing can be boiled down to one key point:
As the earth's population swells to 7 billion, the migration to cities accelerates, incomes rise, and people desire the things that improve their lives, thus increasing global demand for commodities and natural resources.
A larger, wealthier class of people in the emerging world are demanding more goods as they raise their standard of living and the supply of these goods is impacted by geopolitics, diminishing mature sources and even weather.
American Arrested in Mexico for Carrying 150 Gold Coins; Coins Seized
from El Siglo via PrimaPanama - EconomicPolicyJournal.com
Arnold even had a receipt for some of the coins and it appears there was no legitimate reason for them to be seized, or for him to be arrested.
According to a Sify news report, the gold coins were found in the baggage of a Arnold as he awaited a flight to Panama from the Mexico City airport, officials said.
Arnold appeared visibly nervous' prompting agents to run his suitcase through a scanner, which detected several containers inside, the Mexican Public Safety Secretariat said.
One container held 50 gold coins with the legend 'Suid Afrika-South Africa' on them and two others had 100 coins inside that said 'United States of America'.
Budget Cuts in the Irrational Financial System
By Bill Bonner - DailyReckoning.com
01/24/11 Baltimore, Maryland - Gold down another $5 on Friday. Are you tempted to get out of gold now... and get back in, after the dip bottoms out?
Forget it.
The advantage of investing family money rather than personal money is that you have time on your side. You can sit tight and let the big trends make you big money... If you can get them right.
But don't try to trade in and out. Because you can't know exactly when the trend will back off... and when it will explode to the upside.
So if you want to take advantage of a big trend, you have to just get in and stay in... and take a very long-term approach. In the case of the gold bull market, for example, it may be years before the final blow-off bonanza comes.
Bonuses for bankers, bankruptcy for public services Goldman Sachs sets aside $15bn for pay; the state of California cuts $1.5bn from education. What's wrong with this picture?
By Richard Wolff - guardian.co.uk
So, now we know about the $15bn-plus 2010 pay package for Goldman Sachs partners and employees. The top rungs will get their many millions each, with lesser and lesser amounts going down the GS hierarchy. The mass of its more than 35,000 employees will, as usual, get much, much less than the top. In addition, the appreciation of Goldman's share prices likewise adds billions to employees who got stock options, which were likewise distributed very unequally throughout the firm. The unequal division of rewards within Goldman Sachs mirrors and mocks the far larger social divide it feeds.
While vast wealth flows for the tops of finance, austerity is the watchword across the United States. Every one of the 50 state governments and nearly all of the thousands of city and town governments are sharply reducing their citizens' economic wellbeing. Their debates concern the mix of raised taxes and reduced public payrolls and services to impose on a citizenry already reeling from the continuing economic crisis conditions: high unemployment, home foreclosures, job insecurities and benefit reductions.
Fed Signals Seen Raising Treasury Yields 60 Basis Points in '11
By Rich Miller and Joshua Zumbrun
Jan 24 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke and his colleagues may shift from focusing on the gap between actual and optimal employment to an emphasis on the economy's speed limit in the months ahead.
"By the middle of the year, the economic momentum will be building, and all the hawks are going to be crazy about tightening," said Laurence Meyer, a former Fed governor who's now vice chairman at St. Louis-based Macroeconomic Advisers, referring to officials who concentrate on fighting inflation.
Budget Cuts in the Irrational Financial System
By Bill Bonner - DailyReckoning.com
01/24/11 Baltimore, Maryland - Gold down another $5 on Friday. Are you tempted to get out of gold now... and get back in, after the dip bottoms out?
Forget it.
The advantage of investing family money rather than personal money is that you have time on your side. You can sit tight and let the big trends make you big money If you can get them right.
But don't try to trade in and out. Because you can't know exactly when the trend will back off and when it will explode to the upside.
So if you want to take advantage of a big trend, you have to just get in and stay in and take a very long-term approach. In the case of the gold bull market, for example, it may be years before the final blow-off bonanza comes.
Judges to weigh mortgage document destruction
By Scot J. Paltrow
(Reuters) - Federal bankruptcy judges in Delaware are due to hold separate hearings Monday on requests by two defunct subprime mortgage lenders to destroy thousands of boxes or original loan documents.
The requests, by trustees liquidating Mortgage Lenders Network USA and American Home Mortgage, come despite intense concerns that paperwork critical to foreclosures and securitized investments may be lost.
A series of recent court rulings have increased the importance of original loan documents, holding that they are essential for investors to prove ownership of mortgages and to have the right to foreclose.
In the Mortgage Lenders case, the U.S. Attorney in Delaware has formally objected to the requested destruction because loss of the records "threatens to impair federal law enforcement efforts."
Economy News Nightmare: 20 Things That You Should Not Read If You Do Not Want To Become Very Angry
TheEconomicCollapseBlog.com
Today America is very, very frustrated. In fact, we probably have not seen this level of anger in the country since World War 2 ended. So why are so many Americans so frustrated and so angry right now? Well, for most Americans it comes down to the economy. Very few things are more frustrating than not being able to find a job that will enable you to pay the mortgage and feed your family. Middle class Americans that do have a little bit of money are digging into their savings and investments at a staggering rate as they desperately try to keep their heads above water. Millions of other families that do not have a "safety cushion" are on the verge of losing their homes or have already been callously tossed out onto the streets by big, greedy banks. Meanwhile, our politicians continue to burden us with increasingly larger amounts of government debt and they stand idly by as our jobs and our industries are shipped overseas. So even though the mainstream media seems absolutely puzzled by the growing anger in America, the truth is that it is not a great mystery. The economy is an absolute nightmare, and if it gets even worse people are going to become even more angry.
Sen. Bob Casey to reintroduce bills to aid businesses
by Athena D. Merritt - Pittsburgh Business Times -
U.S. Sen. Bob Casey Jr., D-PA, said Friday that he will be reintroducing two bills to help minority and women-owned businesses when the Senate reconvenes.
One would authorize $200 million over a five-year period for the U.S. Department of Commerce's Minority Business Development Agency (MBDA) to provide technical and procurement assistance to minority-owned businesses. The other would put new safeguards in place to prevent contractors from fraudulently listing minority and women-owned businesses on bids to strengthen their applications and then not using them. The bill would do the following, Casey said:
• Require subcontractors identified on a solicitation for a competitive proposal made by an executive agency be notified by the prime contractor before the application is submitted. A written agreement between the prime contractor and the subcontractor must be submitted to the contracting officer that includes the identity of the subcontractor, the scope of the work to be performed under the subcontract and the dollar amount of the subcontract.
A Culture of Corruption
By: CAPTAINHOOK - GoldSeek.com
ItÕs a funny thing - actually it's not so funny for the poor lost and trusting souls that give their money to the crooks in New York to manage - but for some strange reason (greed) managed account returns don't seem to even come close to those enjoyed by money managers today, not even after a good year like 2010. And this is especially true if you include the fact that if money managers have a bad year, or worse, where they may go out of business, our central planners (and central banks) step in and bail them out, and executives at these companies are still paid fat bonuses which is all gravy (for screwing up), never mind a return on investment. This hardly seems fair considering most investors (especially the little guys) are never bailed out, but it's your own fault if you allow it to happen in knowing all too many of these characters take untenable risks with your retirement dreams because to them it's other people's money within a culture of corruption - and they simply don't give a damn because they know if trouble arises a bailed out would come - which accounts for the orgy of risk taking on Wall Street these days.
One house, two banks: The property that sums up America's mortgage nightmare
By DANIEL BATES - DailyMail.co.uk
It is the one house owned by two banks that sums up the unintelligible mess that America's mortgage system is in.
This detached suburban home on Staten Island in New York is at the centre of a bitter legal row between lenders Home123 Corporation and U.S. Bank.
Both have launched separate legal bids to take over the property and foreclose it, leaving the homeowner caught in the middle of a row which sums up the mess the mortgage system is in.
Whilst Home123 claims it has its name on the county tax rolls, U.S. Bank has said in court papers that it is responsible for the property.
But in a farcical twist, the bank was forced to admit that the original mortgage documents have been lost by its staff and are nowhere to be seen.
More on states going bankrupt
By James Pethokoukis - Reuters.com
Lots of buzz about this NYTimes story that says Washington policymakers (Republicans, really) are "working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers." (My blog post from six weeks ago that said the same thing is here.)
Government unions don't like the idea, of course. Neither does Reuters' Felix Salmon, always a reliable guide to what the liberal blogosphere is thinking. He and others have several objections. A big one is this: States wouldn't be able to borrow, being shut out from credit markets.
I supposed for a time that might be true, but only for a time. Orange Country eventually returned to borrowing, as has Argentina. In the case of the OC, it took five years for their debt to return to investment grade. So their borrowing costs rose. In the meantime, would states need some sort of bridge loan to from Uncle Sam to keep paying their day to day bills? Not necessarily. Tax revenue would continue to flow in. Budget cutting would commence in earnest. Assets, such as roads and bridges, could be sold or privatized. Would bankruptcy mean a radical reorganization of state government? Yes, that's the whole point.
TALK OF HAIRCUTS
by Russ Winter - FinancialSense.com
I suspect much (but not all) of the GOP's new spending cut proposals and the beginning of political season will end up as ungovernable, destabilizing rhetoric. Even so, this approach has key elements that illustrate in spades that the days of continual stimulus and backing up the Gumnut truck to fill the trough are numbered. Federal supports in key areas are being scaled back. The battleground areas for the Republican legislators are spelled out primarily as repeal of the FMAP Medicaid increase totaling $16 billion, and repeal of the remaining stimulus of $45 billion.
These are programs that run out and sunset this fiscal year, so the real message is that they won't be extended (referred to as the "ARRA or stimulus cliff"). The wild card would be some paring back in the current fiscal year. Also because Republicans won't cut defense (a mistake) this will result in an immediate crisis at the state level particularly in education and in human services for the growing deluge of poor, coupled with public safety cutbacks and prison releases. Throw in nasty food and energy inflation and the prospects for a long hot summer look quite likely.
House GOP Begins Long Drive to Dismantle Obamacare
By Byron York - Townhall.com
Everyone knows House Republicans (along with three Democrats) voted on Jan. 19 to repeal Obamacare. But fewer people know what those same House Republicans -- this time, with more than a dozen Democrats -- did on Jan. 20.
By a vote of 253 to 175, the GOP directed key House committees to report on ways to lower healthcare premiums, allow patients to keep their current health plans, increase access to coverage for those with pre-existing conditions, and decrease the price of medical-liability lawsuits. In other words, the committees are beginning work on replacing the House-repealed Obamacare with Republican health policies.
HOW FAST HAS THE JOBLESS RATE DECLINED AFTER PRIOR DOWNTURNS?
by Asha Bangalore - FinancialSense.com
The 9.4% unemployment rate in December 2010, an elevated reading, is down from a high of 10.1% in October 2009. The recent cycle low for the unemployment rate was 4.4% in May 2007. Although each business cycle is different, it is still worthwhile to recall how fast the jobless rate has declined in the past 60 years after each recession. Highlights of the upward trend of the jobless rate provide a perspective before assessing the pace of the decline in the unemployment rate. The median increase in the jobless rate, following a recession, is 2.7 percentage points during 1960-2003. The unemployment rate has risen 5.7 percentage points in the recent downturn, which ended in June 2009; this is 3 percentage points higher than the historical median gain.
GM sells more vehicles in China than in U.S.
By Tom Krisher And Yuri Kageyama, AP Business Writers
DETROIT - General Motors sold more cars and trucks in China last year than it did in the U.S., for the first time in the company's 102-year history.
Despite GM's growth in China, Toyota Motor held onto the title of world's largest automaker. The Japanese company reported 8.42 million sales worldwide last year. That's 30,000 more than GM's 8.39 million.
GM said Monday that it sold 2.35 million vehicles in fast-growing China, about 136,000 more than it sold in the U.S., with China sales surging 29% as an expanding middle class gained wealth. Sales in the U.S., including heavy-duty vehicles, rose 6.3% as GM continued to rebound from its 2009 stay in bankruptcy protection.
Federal Government Unions Looting American Taxpayers
By Lurita Doan - Townhall.com
Lines are being drawn and the fight to reduce overly generous pay and benefits to government employees at the federal, state, and local level is underway. Not too surprisingly, public employee unions are gearing up, rallying government employees, and exerting pressure to maintain the generous pay and benefits that has loaded government with unsustainable debt. Public employee unions are, even now, pressing the Obama Administration for additional benefits and power.
President Obama, either unwilling, or perhaps unable, to bring long-overdue accountability to powerful public employee unions, has instead issued guidance requiring greater Union representation and input into federal agency decision making. Obama's decision will likely embolden union bosses to think they can escape accountability and an honest review of benefits, salary, and pensions of government employees.
Texas Used Stimulus to Cover 97% of Its Deficit
By DEREK THOMPSON - The Atlantic.com
Even as he railed against the Recovery Act, Texas Gov. Rick Perry used the government's stimulus plan to cover 97 percent of the state's budget deficit in 2009:
Turns out Texas was the state that depended the most on those very stimulus funds to plug nearly 97% of its shortfall for fiscal 2010, according to the National Conference of State Legislatures.
Texas, which crafts a budget every two years, was facing a $6.6 billion shortfall for its 2010-2011 fiscal years. It plugged nearly all of that deficit with $6.4 billion in Recovery Act money, allowing it to leave its $9.1 billion rainy day fund untouched.
"Stimulus was very helpful in getting them through the last few years," said Brian Sigritz, director of state fiscal studies for the National Association of State Budget Officers, said of Texas.
10 Ways to Avoid a Tax Audit
By BARBARA WELTMAN - WSJ.com
Worried about extra scrutiny from the Internal Revenue Service?
While you can never completely "audit-proof" your business's income tax return, you can take actions that will greatly reduce your chances of being flagged.
Here are 10 ways to avoid a tax audit:
Postal Service to close another 2,000 locations
By Aaron Smith, CNNMoney
NEW YORK (CNNMoney) -- The money-losing U.S. Postal Service is planning to shut down thousands of stations and branches to try and ward off its fiscal woes.
The Postal Service has set a goal of closing 2,000 stations and branches in 2011, said Postal Service spokeswoman Joanne Veto. That's in addition to the 491 closures that are already underway, she said.
The Postal Service is not planning to close any post offices, she said, noting that the law prevents the closure of post offices for solely economic reasons. She described stations and branches as being smaller than post offices, with no mail processing, and sometimes no mail carriers.
The end of credit cards is coming
By Blake Ellis
NEW YORK (CNNMoney) -- Credit cards may soon be as outdated as vinyl records. (Remember those?) And this is the year that the slow, steady march to oblivion begins.
You can already use your iPhone, Droid or BlackBerry to buy a hotdog at the ballgame, buy your Starbucks latté, or give a friend a few bucks by Bumping phones. But by the end of the year you may not even think twice about reaching for your phone to pay at the register instead of fumbling for your credit card.
"Your plastic card hasn't changed since the age of the vinyl records," said Michael Abbott, CEO of Isis, a new mobile payment network. "This is the chance to bring payments forward from the plastic age and the vinyl records age to the digital age."
Renewed Push to Give Obama an Internet "Kill Switch"
by Declan McCullagh - CBSNews.com
A controversial bill handing President Obama power over privately owned computer systems during a "national cyberemergency," and prohibiting any review by the court system, will return this year.
Internet companies should not be alarmed by the legislation, first introduced last summer by Sens. Joseph Lieberman (I-Conn.) and Susan Collins (R-Maine), a Senate aide said last week. Lieberman, an independent who caucuses with Democrats, is chairman of the Senate Homeland Security and Governmental Affairs Committee.
"We're not trying to mandate any requirements for the entire Internet, the entire Internet backbone," said Brandon Milhorn, Republican staff director and counsel for the committee.
VR Breakdancing: Lockheed's New Jet-Building Tool
By Spencer Ackerman - Wired.com
Skin-tight outfits. Body-rocking avatars. Executives in lipstick. Daft Punk helmets. Funny accents. Welcome to Lockheed Martin's newest tool for designing fighter jets.
Officially, the Collaborative Human Immersion Laboratory, or - yes - CHIL - is an immersive virtual reality mechanism to cut down on the cost of building America's Air Force. In reality, the CHIL gives engineers an excuse to do some VR line dancing. But that rings hollow. Lockheed Martin has just built its engineers a virtual-reality playpen, unveiled today and based in Littleton, Colorado. Employees are hooked up to a suite of motion-detecting sensors, gamer gloves and a head-mounted display helmet, with wires hanging out of their extremities and optional Tron-ready clothing.
Is Illegal Immigration Destroying The Southwest United States? 19 Immigration Facts That Very Few People Are Talking About
EndOfTheAmericanDream.com
Immigration is not a bad thing. In fact, the United States is a nation that is made up of immigrants. However, the truth is that rampant, unchecked illegal immigration is a really, really horrible thing and it is permanently destroying many areas of the southwest United States. The U.S. government has refused to control the U.S. border with Mexico for decades, and this has allowed millions of criminals, drug dealers and gang members to cross freely into the United States. Not only that, but our refusal to secure the border has allowed thousands (if not millions) of people that have very serious diseases into the country. After illegal immigrants arrive they either try to make a living legally (by directly competing with blue collar American workers and driving their wages down) or illegally by selling drugs or being involved in other kinds of criminal activity. The economic burden that these tens of millions of illegal immigrants has put on our system is almost incalculable.
Barack Obama lifts then crushes Palestinian peace hopes Secret papers reveal Palestinian frustration at lack of decisions but Middle East envoy warns against blaming US president
By Ian Black and Seumas Milne - guardian.co.uk
The rise and rapid collapse of Palestinian hopes invested in Barack Obama are laid bare in graphic detail in the leaked documents. They make clear that PLO leaders continue to regard a string of far-reaching concessions as a negotiated package which remains on the table for the US and Israel to pick up.
"The deal is there," the chief negotiator, Saeb Erekat, told the president's Middle East envoy, George Mitchell, early in the new administration. "With it you can develop the 'Obama plan' with your associates in Europe ... It is time for decisions." Two years later a deal that includes compromises on territory, Jerusalem and refugees has yet to be taken up.
Condoleezza Rice: send Palestinian refugees to South America Palestine papers show US secretary of state told negotiators that Chile and Argentina could be asked to give land to displaced
By Rory Carroll, Latin America correspondent - guardian.co.uk
The United States proposed giving Palestinian refugees land in South America as a radical solution to a problem that has haunted Middle East peace talks for decades.
Condoleezza Rice, the Bush administration's secretary of state, wanted to settle displaced Palestinians in Argentina and Chile as an alternative to letting them return to former homes in Israel and the occupied territories. Rice made the proposal in a June 2008 meeting with US, Israeli and Palestinian negotiators in Berlin, according to minutes of the encounter seen by the Guardian.
Bank failures for week ending January 21st, 2011
Examiner.com
Now that the holidays are over, it appears that bank failures are beginning to pick up again in the US. On Friday, there were four financial institutions that closed their doors, or went into receivership to the FDIC.
GA McDonough - Enterprise Banking Company - $39.6 million dollar FDIC DIF cost estimate.
SC Easley - CommunitySouth Bank & Trust $46.3 million dollar FDIC DIF cost estimate.
NC Asheville -The Bank of Asheville - $56.2
CO Denver - United Western Bank - $312.8 million dollar estimated FDIC DIF cost
The last one, United Western Bank of Denver, Colorado was a big one, as it had a lot of Florida real estate on its books.
These closings now bring the total number of failed banks in 2011 to 7 institutions.
12 Economic Collapse Scenarios That We Could Potentially See In 2011
TheEconomicCollapseBlog.com
What could cause an economic collapse in 2011? Well, unfortunately there are quite a few "nightmare scenarios" that could plunge the entire globe into another massive financial crisis. The United States, Japan and most of the nations in Europe are absolutely drowning in debt. The Federal Reserve continues to play reckless games with the U.S. dollar. The price of oil is skyrocketing and the global price of food just hit a new record high. Food riots are already breaking out all over the world. Meanwhile, the rampant fraud and corruption going on in world financial markets is starting to be exposed and the whole house of cards could come crashing down at any time. Most Americans have no idea that a horrific economic collapse could happen at literally any time. There is no way that all of this debt and all of this financial corruption is sustainable. At some point we are going to reach a moment of "total system failure".
Hu Jintao's visit: the story the media missed The one issue that mattered for ordinary Americans was whether Obama pushed China hard enough on undervaluing the yuan
Dean Baker - guardian.co.uk
When China's President Hu Jintao came for his state visit last week, the White House press corps completely ignored almost all the substantive issues raised by Hu's visit. The domestic policy issues raised by this trip were altogether invisible in the reporting in major news outlets.
The news accounts were filled with the long list of items that President Obama was likely to raise with President Hu. There are issues about China respecting the patents and copyrights of US firms. The US has concerns about market access in China for our retailers, our financial firms and some of our manufactured products.
Trade War to Lose:
Jim Rogers on Hu Jintao American trip
Appeasement is the proper policy towards Confucian China We all learned at school how the status quo powers mismanaged the spectacular rise of Germany before World War I, a strategic revolution so like the rise of China today.
By Ambrose Evans-Pritchard - Telegraph.co.uk
And we all learned how the Kaiser overplayed his hand. That much was obvious.
Yet it is difficult to pin-point exactly when the normal pattern of great power jostling began to metamorphose into something more dangerous, leading to two rival, entrenched, and heavily armed alliance structures unable or unwilling to avert the drift towards conflict. The Long Peace died by a thousand cuts, a snub here, a Dreadnought there, the race for oil.
The German historian Fritz Fischer has in a sense muddied the waters with his seminal work, Griff nach der Weltmacht (Bid for World Power). He draws on imperial archives in Potsdam to claim that Germany's general staff was angling for a pre-emptive war to smash France and dismember the Russian Empire before it emerged as an industrial colossus. Sarajevo provided the "propitious moment".
Obama Misinforming Public About U.S. Dollar and Yuan
National Inflation Association - SilverBearCafe.com
President Obama's comments on Wednesday in a joint press conference with Chinese President Hu Jintao, misinformed the public about potential changes in foreign exchange rates and their effects on U.S. citizens. Obama on Wednesday said that he would like to see the Chinese yuan appreciate faster in value. While Hu indicated that China is committed to allowing the free market to better dictate the value of the yuan, Obama said China is implementing their steps to allow the yuan to appreciate "not as fast as we'd like."
For years, the U.S. has been criticizing China by calling them "currency manipulators". The fact is, the Federal Reserve is the real currency manipulator because their actions will soon lead to a U.S. Hyperinflationary Great Depression that destroys the lives of all Americans who aren't prepared for life with a worthless U.S. dollar. All China is doing is pegging the yuan to the U.S. dollar so that their product manufacturers and exporters can maintain some level of stability. However, the U.S. is using this as an excuse to explain its rapidly deteriorating export market.
Trade With China?: 25 Facts That Prove That China Is Kicking Our Rear Ends
EndOfTheAmericanDream.com
Do you believe that trade with China is a good thing? Well, you might not be so sure after you read the 25 facts listed below. The truth is that China is kicking our rear ends all over the planet. When it comes to world trade, China is absolutely dominating the United States. Have you wondered why the U.S. economy cannot produce nearly enough jobs for everyone anymore? Have you wondered why so many thousands of factories have been closing down? Have you wondered why it seems like America is getting poorer? Well, the answers are below. Of course both major political parties continue to insist that "globalism" is a good thing and that what we are experiencing now is just a period of "adjustment" as we are merged into the new global economic order. Our corrupt politicians will continue to sell you the same tired lies over and over and over as thousands more U.S. factories and millions more U.S. jobs continue to be shipped overseas. So will you keep buying the lies of our corrupt politicians or will you believe the facts that are right in front of your face?
China Bank Moves to Buy U.S. Branches ICBC Signs a Deal for Bank of East Asia's Retail Outlets
By LINGLING WEI - WSJ.com
CHICAGO - China's biggest bank signed an agreement that would make it the first Beijing-controlled financial institution to acquire retail bank branches in the U.S., though regulators could still block the deal.
Under the deal, Industrial & Commercial Bank of China Ltd., by some measures the world's largest bank, agreed to acquire a majority stake in Bank of East Asia Ltd.'s U.S. subsidiary. ICBC will pay $140 million for an 80% stake. Bank of East Asia, which is a publicly traded company based in Hong Kong, has a total of 13 branches in New York and California. ICBC and Bank of East Asia have talked to U.S. regulators about the deal, these people said.
The move represents what could be the start of big expansions by Chinese financial institutions in the U.S.
Euro, bonds, China, musical advisors
Which Of The Currencies Of The World Is Going To Crash First?
TheEconomicCollapseBlog.com
Last year was an absolutely fascinating time for world currency markets. The yen, the dollar and the euro all took their turns in the spotlight. Each experienced wild swings at various times, but the overall theme that we saw was that faith in paper currencies is dying. The biggest reason for this is the horrific sovereign debt crisis that has swept the globe. The United States, Japan and a whole host of European nations are all drowning in debt. The U.S. and Japan are both steamrolling toward insolvency, and several European nations would have already defaulted on their debts if they had not been bailed out. So which of the major currencies of the world is going to crash first? Will one (or more) of the big currencies fall before the end of 2011? Once one major currency collapses will the rest start to fall like dominoes? The truth is that the world has never seen a sovereign debt crisis of this magnitude in all of human history. Almost the entire globe is drowning in a sea of red ink and it has brought us right to the brink of financial disaster.
Britain triggers global inflation alarm
By Richard Milne and Tanya Powley in London, Dan McCrum in New York and Robert Cookson in Hong Kong - FT.com
Some of the world's leading investors have turned bearish on government bonds from developed countries as they warn of the growing danger of inflation.
Data this week showing the UK's consumer price index hit 3.7 per cent in December fuelled that concern and sent benchmark British borrowing costs to an eight-month high of 3.72 per cent.
In Europe, inflation has risen above the European Central Bank's target for the first time in more than two years, leading investors to bet on interest rates rises in the eurozone and UK this year.
Global Price Fears Mount As Food, Raw Materials Soar, Europe's Central Bank Head Warns on Inflation
By BRIAN BLACKSTONE And MARCUS WALKER - WSJ.com
Inflation fears - fueled by spiraling food, oil and raw material prices - are mounting around the globe, prompting the head of the European Central Bank to signal that it could raise interest rates in the future even though some countries have been weakened by the Continent's debt crisis.
In an interview with The Wall Street Journal ahead of this week's annual meeting of the World Economic Forum in Davos, Switzerland, Jean-Claude Trichet warned that inflation pressures in the euro zone must be watched closely, and urged central bankers everywhere to ensure that higher energy and food prices don't gain a foothold in the global economy.
Cattle Network Warns Farmers: Big Time Inflation Is Coming and You Better Have an Explanation
Robert Wenzel - SilverBearCafe.com
The insiders know, they see it coming. A spike in food prices is just around the corner. Here's what Drovers Cattle Network is telling farmers:
Americans have spent less than 10 percent of their disposable income on food for many years now. That's about to change. Food prices are on the rise and there will be new records set for some, actually many goods, this year. Meat, dairy and poultry prices are among the products on pace to set records.
While the general inflation rate was nearly zero in 2010, food and fuel presents another story. Predictions for 2011 food inflation range from 3 percent to 6 percent, with some estimates in recent days pushing into the double digits.
This will come at a time when gasoline and energy prices also are on the rise - oil is projected to reach beyond $100 per barrel....Consumers will see higher prices in the supermarket and hear about record commodity prices and will perceive you as riding waves of money.
U.S. Economic Turmoil in 2011
By: Stephen Lendman - MarketOracle.co.uk
Wall Street predicts blue skies. Economic recovery will continue. Stocks will deliver double-digit gains. On January 14, the Wall Street Journal's Economic Forecast Survey headlined, "Economists Optimistic on Growth," expecting in 2011:
3.3% GDP growth;
unemployment declining to 8.8%;
inflation contained at 1.9%;
crude oil at around $90 a barrel;
improved housing starts in a depressed market;
on average, 180,000 monthly jobs created;
no Fed interest rate hike until 2012 at the earliest;
continued QE II buying of $600 - $900 billion in government bonds; and
an overall upbeat sentiment for economic recovery and growth.
Others disagree, including long-time insider/market analyst Bob Chapman, calling current economic policy destabilizing enough to have profound future social costs. Sometime in 2011, he says conditions are "going to be nasty. The handwriting is on the wall," but no one's listening.
Natural Resources Outlook 2011: Everyone Needs Commodities
By: Frank Holmes - MarketOracle.co.uk
The essence of natural resources and commodity investing can be boiled down to one key point:
As the earth's population swells to 7 billion, the migration to cities accelerates, incomes rise, and people desire things the things that improve their lives, thus increasing global demand for commodities and natural resources.
A larger, wealthier class of people in the emerging world are demanding more goods as they raise their standard of living and the supply of these goods is impacted by geopolitics, diminishing mature sources and even weather.
The story begins in emerging markets where economies are growing at stable, healthy rates. Current growth rates for countries such as China, India, Malaysia and others are in the 6-10 percent range, manageable levels that are not characteristic of overheating economies. Many forecasters are expecting a slight slowdown in growth for emerging countries but a few (South Africa, Indonesia and Russia) should see GDP growth rates surpass last year's levels.
China is to Gold as the US is to Paper Currency
By Bill Bonner - dailyreckoning.com
01/21/11 Baltimore, Maryland - Big drop in gold yesterday - down $23. Oil fell hard too. Otherwise not much action.
We'd still like to see a deep decline in the gold price. Too many people are getting onto gold. Most of them have no idea of what they are doing. Like readers of MONEY magazine, they're buying the yellow metal as a speculation. Most likely they're going to lose money. Almost everyone who speculates on gold loses money. Don't ask us why. It's just one of those Iron Laws of investing.
Gold goes up for 10 years straight. Speculators notice. They jump on board. And then the train runs off the tracks.
That's just the way it works.
Fed Traders Buying Billions in U.S. Debt, Nation Risks Credit Downgrade
By Jerome Corsi MarketOracle.co.uk
Fed Traders Buying Billions in U.S. Debt, Nation Risks Credit DowngradeFed Traders Buying Billions in U.S. Debt, Nation Risks Credit Downgrade
At the same time, Moody's and Standard & Poor's warned the triple-A sovereign debt rating of the United States is in jeopardy of being downgraded if there continues to be a deterioration in the negative fundamentals of the United States, including the trillion-dollar federal-budget deficits President Obama has run in the last two years.
Unfortunately, this is not the first time since the current economic downturn began that the Fed has bought U.S. debt, and it may not be the last time.
Fed bought $1.7 trillion in U.S. mortgage, Treasury debt in 2009-2010
In March 2009, the Federal Reserve had announced terminating an earlier plan under which the Fed had purchased $1.25 trillion in federal government mortgage-backed securities issued by Freddie Mae and Fannie Mac.
Increasingly Confident Fed Is Set for First Meeting of 2011
By SEWELL CHAN - NYTimes.com
WASHINGTON - The Federal Reserve will use its first policy meeting of 2011 this week to revisit its economic projections amid a climate of modest but increasing confidence about the recovery.
The statement it will issue on Wednesday, according to people familiar with the private deliberations of Fed officials, is likely to reflect a guarded optimism about the economy, while also maintaining the Fed strategy announced last November to accelerate the recovery by pumping $600 billion into the banking system.
Recent comments by Fed officials who had been particularly skeptical of the $600 billion bond-buying plan suggest that the criticism has moderated somewhat. Noisy and harsh dissents now seem less likely.
State Bankruptcy Is a Bad Idea Politicians already have the power to tame public unions without roiling municipal bond markets. They merely have to use it.
By E.J. MCMAHON - WSJ.com
As states struggle with enormous deficits and exploding pension costs, some analysts are urging Congress to enact a law enabling states to declare bankruptcy the way municipalities can under Chapter 9 of the federal bankruptcy code. This is a bad idea. A state bankruptcy provision could create more problems than it solves.
Bankruptcy proponents understandably worry that states such as California and Illinois are so deep in the hole they may end up petitioning Congress for federal relief. To forestall this possibility, the argument goes, even the threat of bankruptcy would give governors and legislators a powerful new weapon for forcing concessions from recalcitrant public employee unions.
What Every American Needs To Understand About The Economy
Richard Duncan - SilverBearCafe.com
As the United States debates its economic future in light of large government budget deficits, it is important that the public has a clear understanding of how the economy works. A good starting point for understanding how the economy works is to understand how it is measured.
Economies are measured in terms of their Gross Domestic Product or GDP. GDP is made up of personal consumption expenditure, private investment, net trade (i.e. exports minus imports) and government spending at both the federal level and the state and local level. If the size of each of these components is known, it is only necessary to add them together to find the size of the whole economy. In 2009, the United States GDP was $14.1 trillion, according to the Bureau of Economic Analysis (BEA). Of that amount, spending on personal consumption accounted for 71% or $10 trillion; private investment 11% or $1.6 trillion; and government spending 21% or $2.9 trillion, with federal government spending of $1.1 trillion and state and local government spending of $1.8 trillion. Net trade deducted 3% or $390 billion from GDP because exports from the US were $390 billion less than imports into the US.
'The Death of America' - Doug Casey
2010 weakest year for home sales since 1997
By Martin Crutsinger - Associated Press - WashingtonTimes.com
WASHINGTON (AP) - The number of people who bought previously owned homes last year fell to the lowest level in 13 years. But home sales in December jumped to fastest pace in seven months.
The National Association of Realtors says sales dropped 4.8 percent to 4.91 million units in 2010. That was slightly lower than 2008, which had been the weakest level since 1997.
Home prices have been depressed by a record number of foreclosures and high unemployment. Many potential buyers held off on purchases last year, fearful that prices hadn't bottomed out yet.
The poor year for sales ended strong in December. Buyers snapped up homes at a seasonally adjusted annual rate of 5.28 million units, an increase of 12.8 percent from November and the strongest sales pace since last May.
Can U.S. automakers build a small car in this country? GM thinks so.
By Peter Whoriskey - Washington Post
This summer, a General Motors plant in Orion, Mich., will begin cranking out some very small cars.
The Chevrolet Sonics, as they will be known, are by themselves hardly a breakthrough. There are tens of thousands of cars this tiny on the road - among them the Honda Fit, the Toyota Yaris and the Ford Fiesta.
What will set the Sonic apart from its rivals and make it one of the most closely watched experiments in the industry, however, is that it will be the smallest car currently mass-produced in the United States.
At Obama's midpoint, an altered State of the Union
By Nancy Benac - Associated Press - WashingtonTimes.com
WASHINGTON (AP) - Nearly two years ago on a cold February day, President Obama stood for the first time before a joint session of Congress and spoke of a national day of reckoning.
It was time not just to stabilize the shaken economy, he declared, but to reach for lasting prosperity.
His goals were expansive: overhauling health care, cutting the deficit, improving schools, finding a way out of Iraq and a way ahead in Afghanistan. Most of all, creating jobs. Jobs by the millions.
He had big plans and a Democratic majority in Congress to help him carry them out.
"We will rebuild, we will recover, and the United States of America will emerge stronger than before," Mr. Obama said to rousing applause.
Passing Obamacare was theater and repealing is the reality show
By: Star Parker - Washington Examiner
Democrats who are calling the House's decisively passed repeal of Obamacare theater are hallucinating.
Perhaps it was theatrical to include in the name of the repeal act "job killing," though that is what it is.
But I prefer melodrama to dishonesty. Calling Obamacare -- government mandates, subsidies, price controls, taxes and rationed care -- the "Patient Protection and Affordable Health Care" act is the height of dishonesty.
The House repeal vote was important because the House is the legislative body closest to the people, and the people voted unequivocally last November to repudiate socialized medicine.
Target: ObamaCare Voters rejected it. Now Republicans must act.
By PETE DU PONT - WSJ.com
For two years Washington has been moving left - bigger spending, expanding regulation and a continual increase in government debt. In fiscal 2007, when George W. Bush was president, the debt increased $161 billion; in 2008, another $458 billion; and in 2009 (which began under Mr. Bush and ended under Barack Obama), it reached $1.4 trillion. In Mr. Obama's first two full years in office, 2010 and 2011, it will increase another $1.3 trillion each year.
Add it all together and Mr. Obama has presided over the creation of more new debt in two years than Mr. Bush did in eight. Most important, these spending increases are not a surprise, a mistake or a worry in the current administration; they simply reflect the belief of the Democratic president and Congress that we must Europeanize America - make the government larger, broader, and in charge of as many things as possible.
Keiser Report: Corrupt Kleptocracy
The More Americans That Go On Food Stamps
The More Money JP Morgan Makes
TheEconomicCollapseBlog.com
JP Morgan is the largest processor of food stamp benefits in the United States. JP Morgan has contracted to provide food stamp debit cards in 26 U.S. states and the District of Columbia. JP Morgan is paid for each case that it handles, so that means that the more Americans that go on food stamps, the more profits JP Morgan makes. Yes, you read that correctly. When the number of Americans on food stamps goes up, JP Morgan makes more money. In the video posted below, JP Morgan executive Christopher Paton admits that this is "a very important business to JP Morgan" and that it is doing very well. Considering the fact that the number of Americans on food stamps has exploded from 26 million in 2007 to 43 million today, one can only imagine how much JP Morgan's profits in this area have soared. But doesn't this give JP Morgan an incentive to keep the number of Americans enrolled in the food stamp program as high as possible?
Bill Collectors Face Disclosure Rules
By SARA MURRAY - WSJ.com
Bill collectors in New Mexico will be soon required to inform borrowers they can't be taken to court for long-overdue debts, changing the landscape for consumers and creditors in the state.
A handful of states and cities have addressed the issue, which has gained attention from the Federal Trade Commission as debt-collector complaints have risen.
Since April 2010, New York City has required debt collectors to notify consumers in writing if the debt has passed the statute of limitations, known as "time barred."
Wisconsin and Mississippi have laws that not only eliminate the right to sue on time-barred debts but extinguish the debt entirely.
Statutes vary by state but nearly all have a time limit for credit-card debt.
Dallas Fed President Attacks Ron Paul
by Gary North - LewRockwell.com
When the president of any regional Federal Reserve Bank stands in front of a bunch of Harvard University graduates to tell them about how the economic mess is not really the FED's fault, you know what's coming. It came.
It is clear who his target was: Ron Paul. I am not the only person to see this. An article on the Fortune site spotted it. It was written by a standard, gold-hating, unknown journalist employed by Fortune.
His only quibble with Texas, it seems, is with the Fed-bashing focus of one of the Lone Star state's representatives in Congress, who in Fisher's view might do well to turn his energies to actually doing something rather than grandstanding about the hugeness of the gold standard.
It ended: "In short, audit this, Ron."
Companies snapping up iPads, Apple exec says If the trend of spending on the devices and other items continues, companies will do what consumers haven't: spark a strong economic recovery.
Associated Press - LATimes.com
The news last week that Apple Inc.'s Steve Jobs is taking a leave of absence was a big story. But something else about the company got far less attention and could be even more important to investors this year.
Corporations "are adding iPads to their approved device list at an amazing rate," Peter Oppenheimer, Apple's chief financial officer, told analysts Tuesday. Apple's products, more known for their consumer appeal, are now used by employees of Wells Fargo & Co., Archer Daniels Midland Co., DuPont and others
Should you check Facebook before hiring? Many people do not realize the extent to which their friends could harm their online reputations.
By Bidhan "Bobby" Parmar - WashingtonPost.com THE BIG IDEA: Is it ethical to base a hiring decision on a job candidate's Facebook page? THE SCENARIO: Miranda Shaw, a manager at a leading consulting firm, is hiring for a senior analyst position. She has narrowed the field to two candidates, Rick Parsons and Deborah Jones, and must make her recommendation to the company's human resources department immediately. Both candidates graduated from the same highly ranked business school that Shaw attended. Both boast appropriate work backgrounds and shone in their interviews.
However, Parsons is first in line for the job because of his leadership skills, reputation for tireless energy and great communication skills. Before making her final decision, Shaw decides to Google both candidates.
Domestic use of aerial drones by law enforcement likely to prompt privacy debate - By Peter Finn - Washington Post
AUSTIN - The suspect's house, just west of this city, sat on a hilltop at the end of a steep, exposed driveway. Agents with the Texas Department of Public Safety believed the man inside had a large stash of drugs and a cache of weapons, including high-caliber rifles.
As dawn broke, a SWAT team waiting to execute a search warrant wanted a last-minute aerial sweep of the property, in part to check for unseen dangers. But there was a problem: The department's aircraft section feared that if it put up a helicopter, the suspect might try to shoot it down.
So the Texas agents did what no state or local law enforcement agency had done before in a high-risk operation: They launched a drone. A bird-size device called a Wasp floated hundreds of feet into the sky and instantly beamed live video to agents on the ground. The SWAT team stormed the house and arrested the suspect.
Secret papers reveal slow death of Middle East peace process
Seumas Milne and Ian Black, Middle East editor - guardian.co.uk
The biggest leak of confidential documents in the history of the Middle East conflict has revealed that Palestinian negotiators secretly agreed to accept Israel's annexation of all but one of the settlements built illegally in occupied East Jerusalem. This unprecedented proposal was one of a string of concessions that will cause shockwaves among Palestinians and in the wider Arab world.
A cache of thousands of pages of confidential Palestinian records covering more than a decade of negotiations with Israel and the US has been obtained by al-Jazeera TV and shared exclusively with the Guardian. The papers provide an extraordinary and vivid insight into the disintegration of the 20-year peace process, which is now regarded as all but dead.
U.S. Wars to Continue Until Economy Goes Bust
MarketOracle.co.uk
Chris Hedges writes:American wars will continue until the country's giant corporations, which pay the politicians in Washington's corridors of power, become financially unsustainable, says senior fellow at the Nation Institute, Chris Hedges.
Hedges told Press TV's U.S. Desk in a Wednesday interview that the economy will fail "because we're paying for it through debt, through borrowing."
"Well the fact is like that ... like most wars this is the business. Unlike previous wars we have privatized many of the functions that the traditional military used to do and whether the wars go badly, we're certainly losing the war in Afghanistan," he pointed out.
North Korea set on third nuclear test
By Sunny Lee - Asia Times
BEIJING - Old habits die hard. North Korea's predilection to resort to provocation to seek attention, receive concessions, then behave for a while before getting up to its usual tricks is likely to continue this year.
That will be particularly so since the much-trumpeted summit between Chinese President Hu Jintao and United States President Barack Obama that ended on Friday didn't yield anything substantive on North Korea.
"Judging by the joint statement, there's nothing that suggests more was achieved in their meeting," said David Straub, a former senior foreign service officer at the US State Department in charge of Korea who now serves as the associate director of the Korean Studies Program at Stanford University.
Stealth fighter sneaks up on Taiwan
By Jens Kastner - ATimes.com
TAIPEI - The maiden flight of China's new stealth jet fighter humbled those officials and observers who initially dismissed the possibility that the country could come up with such a sophisticated weapon any time soon. It was strikingly demonstrated that neither the intelligence apparatus of the United States nor that of Taiwan had a clue about the speed of Chinese advances.
Unnoticed by Beijing's adversaries, the J-20's engineers have mastered advanced stealth-shaping techniques, and even if mass production still lies a few years ahead, it is understood that the Chinese People's Liberation Army Air Force (PLAAF) in the foreseeable future will have super-cruising aircraft at hand that can't be stopped by any air defense system in Asia, including those of the US Navy's aircraft-carrier battle groups. Needless to say, this has tremendous repercussions for Taiwan's security situation.
Chinese stealth fighter jet may use US technology China may have bought parts of US F-117 Nighthawk shot down over Serbia in 1999, say experts
Associated Press - guardian.co.uk
A Chinese stealth fighter jet that could pose a significant threat to American air superiority may borrow from US technology, it has been claimed.
Balkan military officials and other experts said China may have gleaned knowledge from a US F-117 Nighthawk that was shot down over Serbia in 1999.
"At the time, our intelligence reports told of Chinese agents crisscrossing the region where the F-117 disintegrated, buying up parts of the plane from local farmers," said Admiral Davor Domazet-Loso, Croatia's military chief of staff during the Kosovo war. "We believe the Chinese used those materials to gain an insight into secret stealth technologies ... and to reverse-engineer them."
World needs $100 trillion more credit, says World Economic Forum The world's expected economic growth will have to be supported by an extra $100 trillion (£63 trillion) in credit over the next decade, according to the World Economic Forum.
By Emma Rowley - Telegraph.co.uk
This doubling of existing credit levels could be achieved without increasing the risk of a major crisis, said the report from the WEF ahead of its high-profile annual meeting in Davos.
But researchers warned that leaders must be wary of new credit "hotspots", where too much lending takes place, as the world emerges from a financial catastrophe blamed in large part "to the failure of the financial system to detect and constrain" these areas of unsustainable debt.
"Pockets of credit grew rapidly to excess - and brought the entire financial system to the brink of collapse," said the report, written in conjunction with consulting firm McKinsey. "Yet, credit is the lifeblood of the economy, and much more of it will be needed to sustain the recovery and enable the developing world to achieve its growth potential."
Economic Collapse Scenarios That We Could Potentially See In 2011
By: Chris Kitze - MarketOracle.co.uk
What could cause an economic collapse in 2011? Well, unfortunately there are quite a few "nightmare scenarios" that could plunge the entire globe into another massive financial crisis. The United States, Japan and most of the nations in Europe are absolutely drowning in debt. The Federal Reserve continues to play reckless games with the U.S. dollar. The price of oil is skyrocketing and the global price of food just hit a new record high. Food riots are already breaking out all over the world. Meanwhile, the rampant fraud and corruption going on in world financial markets is starting to be exposed and the whole house of cards could come crashing down at any time. Most Americans have no idea that a horrific economic collapse could happen at literally any time. There is no way that all of this debt and all of this financial corruption is sustainable. At some point we are going to reach a moment of "total system failure".
The Kudlow Report: Donald Trump Interview on China
Debt crosses $14 trillion mark
By Jeanne Sahadi - CNN.com
NEW YORK (CNNMoney) -- The amount of U.S. debt subject to the country's legal maximum has topped $14 trillion for the first time.
On Wednesday, the amount of debt subject to the cap hit $14.001 trillion at the close of trade, according to the daily Treasury statement released on Thursday.
That means the country is less than $300 billion away from the $14.294 trillion debt ceiling, which is a cap on how much the federal government can legally borrow.
The debt ceiling has become a focal point of the debate over spending and debt. Even though congressional leaders say the cap will be raised, Republicans are vowing to use the issue as leverage to force spending cuts.
China: U.S. No. 1 no more China's ambitions are not modest
By Michael Prell - The Washington Times
''If China becomes the world's No. 1 nation ... ." That was the headline in the official newspaper of the Chinese Communist Party, The People's Daily, on the eve of Chinese President Hu Jintao's state visit to Washington. The article went on to boast how "China's emergence is increasingly shifting to debate over how the world will treat China, which is the world No. 1 and has overtaken the U.S."
A story like this does not appear by accident in the official Chinese Communist Party newspaper on the eve of a state visit to the world's (current) No. 1 power, the United States.
It was a signal. The latest and boldest signal yet that China intends to become the world's No. 1 power.
President Obama took the occasion of his first visit to China to show "humility" and to assure his Shanghai audience that "we do not seek to contain China's rise."
Chinese president Hu Jintao given frosty reception on Capitol Hill Congress unhappy as Hu took only two questions on human rights and trade before heading off to other meeting
By Ewen MacAskill in Washington and Tania Branigan in Beijing - guardian.co.uk
The Chinese president, Hu Jintao, was given a chilly reception in Congress today, where both Republicans and Democrats were outspoken on China's human rights record and what they claim are Beijing's unfair trading practices.
Members of the house complained afterwards that there had not been enough time to air their complaints as Hu only took two questions before going on to hold a separate meeting with senior senators.
Hu met John Boehner, the house speaker, and the Senate majority leader, Harry Reid, both of whom shunned invitations to the state dinner for the Chinese leader on last night.
The Republican leader in the Senate, Mitch McConnell, also turned down the invitation.
Hu Says He's 'Fully Confident' About U.S.-China Ties
By Michael Forsythe and Peter Cook
Jan. 20 (Bloomberg) -- Chinese President Hu Jintao told a group of U.S. business executives that he's "fully confident" about the prospects for ties between the two countries.
"Looking forward, we are fully confident about the prospects of China-U.S. relations," Hu said in a speech in Washington today, following a White House summit yesterday with President Barack Obama.
The world's economic recovery is a "tortuous process" with "many uncertainties," Hu said. "We should keep our relations on the path of equality, mutual trust, mutual benefit and mutual development."
Trade War to Lose
Jim Rogers on Hu Jintao American trip
The Oddly Symbiotic Relationship Between the US and China
By Joel Bowman - The DailyReckoning.com
01/20/11 Buenos Aires, Argentina - Yesterday, against the better advice of Voltaire, your editor spent the afternoon tending another's garden. The weeds had grown long on the lawn and the vines' creeping tendrils spanned the entire stretch of the backyard wall. The yard, having been left to its natural state, was beginning to look like a jungle. We sweated against the sun, mate close at hand, the cool earth beneath our fingernails.
Why all the effort? For one thing, we write for a living; it's good to get one's lily-white hands dirty from time to time. For another, the garden is out back of the house we are temporarily occupying here in Argentina's capital. Our rental agreement is particularly favorable, so it behooves us to look after the place, to help out those who are taking care of us. Besides, we work (in the office downstairs) with an Englishman and, as we all know, there is nothing quite so offensive to an English gentleman's eyes as the sight of an unkempt garden with the possible exception, that is, of a disorderly queue.
Chinese follow same old script (and they get the punch line)
By Steven Pearlstein - Washington Post
Here we go again.
China's Supreme Leader visits Washington, and administration officials declare in the run-up to the visit that the United States has had quite enough of Beijing's currency-manipulating, intellectual- property-stealing, domestic- industry-subsidizing policies.
The Supreme Leader denies his country engages in such practices, then promises it will stop them in its own sweet time, without any more meddling interference from Imperialist Running Dogs.
Meanwhile, with great fanfare, the Supreme Leader announces an order for a few more Boeing passenger jets. There are toasts and smiles all around at the A-list White House dinner. As the Supreme Leader flies off, the Treasury secretary declares his "get tough" policy has been a success.
U.S. companies dump billions into China
By Chris Isidore - CNNMoney.com
NEW YORK (CNNMoney) -- While U.S. businesses are still reluctant to invest in new plants and jobs in the United States, many are pouring money into China. But not for the reasons you'd think.
Rather than "outsourcing" their operations to China's low-cost environment to produce cheap goods for U.S. consumers, multinational corporations are pouring billions into China to meet demand from the rapidly growing Chinese middle class.
Total investments in China by U.S. multinationals were worth $49 billion as of 2009 -- up 66% from two years earlier, according to U.S. Commerce Department figures. And 2010 is shaping up to be another banner year for the Chinese -- U.S. companies poured an additional $6 billion into China in the first three quarters alone.
Roach Says Threatening China Endangers Recovery: Tom Keene
By Bob Willis and Tom Keene
Jan. 20 (Bloomberg) -- Threatening China with trade sanctions is "particularly dangerous" now as the U.S. depends increasingly on its third-largest export market to help recover from the worst recession in seven decades, said Stephen Roach, non-executive chairman of Morgan Stanley Asia Ltd.
With U.S. consumers squeezed by unemployment above 9 percent, President Barack Obama has set a target of doubling U.S. exports within five years to help drive growth. U.S. policy makers should refrain from threatening sanctions and recognize China is unlikely to speed up revaluation of its currency more than the pace since 2005, Roach said.
"They've identified the target of doubling our exports," Roach said in a Bloomberg Television interview on "Surveillance Midday" with Tom Keene in New York today. "We can't do that without China. As long as China remains on a path for gradual currency appreciation, we'll be fine."
The bear case: Why top investors are betting against China As well as the most impressive growth story in global markets, China is also the biggest paradox.
By Louise Armitstead - Telegraph.co.uk
While the official data continues to paint a picture of an economic powerhouse, some of the most respected financial brains in the world are doing everything they can to "short China".
Jim Chanos, the hedge fund manager who famously made millions by uncovering and betting on the demise of Enron, has said he is now betting against China.
His view is that China's growth is based on a huge credit bubble backed by inflated property prices - and that the bubble is now so big that the Chinese government will not be able to engineer a soft landing.
Hedge Funds Bet Against China
by STUART - agmetalminer.com
It must be a lonely existence as a hedge fund manager. Depending on your area of focus, I wont call it expertise - that depends on the manager. But by their very nature, many hedge funds make their money betting against the pack. Given enough time, betting against the pack in any remotely cyclical market - which is most if not all - means sooner or later, you will make good. But it requires patience, very deep pockets and committed investors.
Mark Hart of Corriente Advisors is one such person. Having made a fortune predicting both the subprime crisis and the European sovereign debt crisis, he now has a fund betting China is a train crash waiting to happen, according to a Telegraph article on the topic. The paper also quotes an unnamed academic saying: "Economists have contrarian views all the time. But these hedge funds have their shirts on the line and do their analysis carefully. The flurry of "distress China" funds is a sign to sit up."
China's Inflation Problem Looms Large
Peter Schiff - SilverBearCafe.com
The global economy has become so unbalanced that even government ministers who would normally have trouble explaining supply or demand clearly recognize that something has to give. To a very large extent the distortions are caused by China's long-standing policy of pegging its currency, the yuan, to the U.S. dollar. But as China's economy gains strength, and the American economy weakens, the cost and difficulty of maintaining the peg become ever greater, and eventually outweigh the benefits that the policy supposedly delivers to China. In the first few weeks of 2011 fresh evidence has arisen that shows just how difficult it has become for Beijing.
SocGen crafts strategy for China hard-landing Société Générale fears China has lost control over its red-hot economy and risks lurching from boom to bust over the next year, with major ramifications for the rest of the world.
By Ambrose Evans-Pritchard - Telegraph.co.uk
The French bank has told clients to hedge against the danger of a blow-off spike in Chinese growth over coming months that will push commodity prices much higher, followed by a sudden reversal as China slams on the brakes.
In a report entitled The Dragon which played with fire, the bank's global team said China had carried out its own version of "quantitative easing", cranking up credit by 20 trillion (£1.9 trillion) or 50pc of GDP over the past two years. It has waited too long to drain excess stimulus.
"Policy makers are already behind the curve. According to our Taylor Rule analysis, the tightening needed is about 250 basis points," said the report, by Alain Bokobza, Glenn Maguire and Wei Yao.
China's Inflation Problem Looms Large
By: Peter Schiff - GoldSeek.com
The global economy has become so unbalanced that even government ministers who would normally have trouble explaining supply or demand clearly recognize that something has to give. To a very large extent the distortions are caused by China's long-standing policy of pegging its currency, the yuan, to the U.S. dollar. But as China's economy gains strength, and the American economy weakens, the cost and difficulty of maintaining the peg become ever greater, and eventually outweigh the benefits that the policy supposedly delivers to China. In the first few weeks of 2011 fresh evidence has arisen that shows just how difficult it has become for Beijing.
Debt crosses $14 trillion mark
By Jeanne Sahadi - CNNMoney.com
NEW YORK (CNNMoney) -- The amount of U.S. debt subject to the country's legal maximum has topped $14 trillion for the first time.
On Wednesday, the amount of debt subject to the cap hit $14.001 trillion at the close of trade, according to the daily Treasury statement released on Thursday.
That means the country is less than $300 billion away from the $14.294 trillion debt ceiling, which is a cap on how much the federal government can legally borrow.
The debt ceiling has become a focal point of the debate over spending and debt. Even though congressional leaders say the cap will be raised, Republicans are vowing to use the issue as leverage to force spending cuts.
Gold May Rise as Investors Go 'Bargain Hunting,' Survey Shows
By Tony C. Dreibus
Jan. 21 (Bloomberg) -- Gold may rise next week after prices dropped, making the precious metal more attractive to investors, according to a Bloomberg News survey.
Five of 11 traders, investors and analysts surveyed by Bloomberg, or 45 percent, said the metal will climb next week. Four predicted lower prices and two were neutral. Gold for February delivery was down 1.1 percent for the week at $1,344.90 an ounce at 11 a.m. yesterday on the Comex in New York.
Futures, down 5.4 percent this year, headed for their third straight weekly decline on speculation that signs of economic recovery in the U.S. and European Union will reduce the need for a haven investment. Prices rallied 30 percent in 2010, the 10th consecutive annual gain, and climbed to a record $1,432.50 on Dec. 7.
China concerns pull down commodities, Comex gold
By Jim Wyckoff
(Kitco News) - Comex gold futures prices are lower and trading near a two-month low Thursday morning, amid more technical selling pressure and on some commodity-market-bearish economic data coming out of China. The commodity sector, in general, is seeing price pressure Thursday morning. February Comex gold last traded down $12.30 at $1,357.90 an ounce. Spot gold last traded down $11.90 at $1,359.00.
Traders this week had been highly anticipating fresh economic growth data from China, due out Thursday. It was reported overnight that China's gross domestic product was up 9.8% in the fourth quarter, on a year-on-year basis. That was slightly higher than analysts had expected and has heightened speculation China's monetary authorities will move to tighten monetary policy to reduce consumption. That's commodity-market-bearish and most commodity markets, including the precious metals, are under selling pressure Thursday morning.
Marc Faber on CNBC 01_19_11
Oil, gold, silver, copper cool off
By Laurie Segall - CNNMoney.com
NEW YORK (CNNMoney) -- Oil, gold, silver and copper prices all staged a retreat this week, which analysts say isn't too surprising given the stellar run commodities had in 2010.
"I think that sentiment in many of these commodities has been very bullish," said MF Global senior vice president Andrew Lebow.
Commodities ended the year with a bang, with oil prices above $90 a barrel and gold hitting record highs, but the momentum was short lived. "The market is simply correcting here, and correcting sharply," said Lebow.
Despite $100 oil projections in 2011, crude prices have been easing. Oil prices for March delivery fell $2.11 to $89.70 a barrel on Thursday.
Silver has outperformed Gold by 235% since 2001
NEW YORK (Commodity Online): These are the times when investors are asking these questions to bullion analysts: which is the best precious metal to invest in? Gold or Silver? Platinum or Palladium? No bullion expert can give you the accurate forecast as to where you should put your money in.
But silver is shining as the brightest and most fortunate precious metal for investors for the last 10 years. Just remember that silver price in 2001 was just $4 during which time the gold price was around $265. So if you look at the climb of silver and gold since 2001, it becomes clear that silver is an outperformer to gold.
Panic Before the Herd, and Win, Win with Silver
W Lorimer Wilson - SilverBearCafe.com
A win-win situation, as we all know, occurs when opposing parties both gain from a certain outcome. Perhaps both don't always get all that they want but both 'win' something in the bargain. It's the best outcome that can be expected for both parties. With silver there is a lose-lose and a win-win scenario.
The Lose-Lose Scenario
While owning silver outright is a win-win situation, it will be a lose-lose situation for all those large banks around the world such as JPMorgan and HSBC who are reported to be short silver to the tune of 3.3 BILLION ounces! That figure is a multiple of all known above-ground silver in tradable bullion form - and a multiple of annual world silver production. The saying 'He who sells what isn't "hisin" gives it back or goes to prison' comes to mind. These shorts may need to deliver more silver than can possibly be delivered in any reasonable timeframe and once they begin (and there are reports that some have already begun) to cover their positions it will have major bullish implications for the price of silver.
Dollar Near 1-Week High on Treasury Yields, U.S. Recovery Signs
By Yoshiaki Nohara and Catarina Saraiva
Jan. 21 (Bloomberg) -- The dollar traded near a one-week high against the yen as gains in benchmark Treasury yields and signs the U.S. economy is improving boosted demand for assets in the world's largest economy.
The greenback held onto yesterday's advance against most of its 16 major counterparts before a report next week forecast to show U.S. consumer confidence rose. Australia's dollar was near the lowest level in a week against the greenback as commodities dropped, damping demand for growth-sensitive currencies.
"U.S. economic reports have been improving," said Misato Nakashima, a currency analyst at Himawari Securities, Inc. in Tokyo. "That makes it easier for the dollar to be bought."
Ferguson: The Nasty Fiscal Arithmetic of Imperial Decline
By Rocky Vega - The DailyReckoning.com
01/20/11 Stockholm, Sweden - With over 143,000 views, Harvard historian Niall Ferguson's recent video, on empires on the edge of chaos, has at least a lot of social proof going for it that it's worth a gander. He gave his lecture to the Centre for Independent Studies, a public policy think tank within Australasia, and addresses questions such as: What if history isn't cyclical and slow moving? And, what if collapse doesn't amicably settle in over centuries, but instead comes quickly, or overnight?
With these questions in mind, about the true nature of complex systems, he considers implications for the United States. He portrays the US as a complex system, which appears to be stable, or in equilibrium, but is constantly evolving and mutating. Just a small trigger can lurch its seemingly benign system into an abrupt collapseÉ at a scale that's impossible to anticipate.
Gerald Celente on The Wall Street Shuffle Jan. 14, 2011
The Fed Spinning Gold
Scott Silva - SilverBearCafe.com
The Fed is spinning gold. Deep in his subconscious, Ben Bernanke secretly yearns to return the country to the gold standard, but he knows that if this were to happen, he'd be out of job. And so would thousands on the government payroll who have perfected the art of printing money out of thin air. So, every day Chairman Bernanke issues the money printing quota to the cohorts, who print away, day after day, to the monotonous beat of the "deflation" drum.
There can be no other reason that the Chairman has stuck to the easy money policies of the last several years, despite the fact that his persistent intervention in the markets and his efforts to stimulate the US economy utterly have failed.
Deflation Diminishes in Bond Market on Food Costs: Japan Credit
By Mayumi Otsuma
Jan. 21 (Bloomberg) -- Japan's inflation-linked bonds show investor expectations for deflation are the least since September 2008 as rising food prices and accelerating expansion in the nation's two largest export markets spur growth.
Bonds indexed to inflation show money managers in Japan expect consumer prices to decline by an average 0.3 percent annually during the next eight years, compared with 0.4 at the start of 2011, according to data compiled by Bloomberg. So- called breakeven rates show U.S. prices rising 1.67 percent during the next year and 3.17 percent in the U.K.
Treasuries Fall, Push 30-Year Yields to 8-Month High on Outlook
By Susanne Walker
Jan. 20 (Bloomberg) -- Treasuries dropped, pushing 30-year bond yields to an eight-month high, as initial jobless claims fell and existing-home sales rose more than forecast, bolstering speculation the economic recovery is building steam.
U.S. debt extended losses after a record $13 billion auction of 10-year Treasury Inflation Protected Securities attracted lower-than-average demand.
"It's the stronger-than-expected data and the TIPS auction," said Richard Bryant, senior vice president in fixed- income at MF Global Inc. in New York, a broker of exchange- traded futures. "The combination has taken us to the cheaper end of the trading range. There will be increased focus on growth numbers going forward."
Social Insecurity: Inside the 'Trust Fund' Illusion
By CHARLES HUGH SMITH - DailyFinance.com
The recent tax deal approved by Congress and the president cut the payroll taxes that employees will contribute to Social Security for 2011 by about a third, and that $112 billion reduction in receipts has advocates of the program worried that the political meddling in Social Security's finances may threaten its viability.
Unfortunately, the Social Security Administration's (SSA) finances have been meddled with for decades, and a one-year tax holiday is the least of the program's problems. As I reported on DailyFinance this week, Social Security is already deep in the red, with outlays exceeding payroll tax revenues by $76 billion in 2010 -- a deficit that wasn't expected to occur until 2018.
Why the Fed Creates So Much Money
By: Richard Daughty - MarketOracle.co.uk
One of the reasons behind the Federal Reserve creating so many trillions and trillions of dollars in new money is so the stock market will go up so that more taxes will be collected, and the bond market will go up so that more taxes will be collected (and less interest paid by issuers, too!), and the housing market will go up so that more taxes will be collected, and prices of everything will go up so that more taxes will be collected, so that massive, backbreaking, bankrupting deficit-spending by the government can continue going up.
Run Turkey, Run
By William H. Gross
They say a country gets the politicians it deserves or perhaps it deserves the politicians it gets. Whatever the order, America is next in line, and as we go to the polls in a few short days it's incumbent upon a sleepy and befuddled electorate to at least ask ourselves, "What's going on here?" Democrat or Republican, Elephant or Donkey, nothing much ever seems to change. Each party has shown it can add hundreds of billions of dollars to the national debt with little to show for it or move our military from one country to the next chasing phantoms instead of focusing on more serious problems back home. This isn't a choice between chocolate and vanilla folks, it's all rocky road: a few marshmallows to get you excited before the election, but with a lot of nuts to ruin the aftermath.
A People's Economics
Robert J. Shiller - ProjectSyndicate.com
NEW HAVEN - We are in the midst of a boom in popular economics: books, articles, blogs, public lectures, all followed closely by the general public.
I recently participated in a panel discussion of this phenomenon at the American Economic Association annual meeting in Denver. An apparent paradox emerged from the discussion: the boom in popular economics comes at a time when the general public seems to have lost faith in professional economists, because almost all of us failed to predict, or even warn of, the current economic crisis, the biggest since the Great Depression.
Oil Trades Near Two-Week Low Because of China Rate Rise Concern
By Mark Shenk and Ben Sharples
Jan. 21 (Bloomberg) -- Oil traded near the lowest in almost two weeks after declining amid speculation China will raise interest rates to combat inflation, slowing economic growth and demand for fuel in the second-biggest crude-consuming nation.
Futures, which are down 2.2 percent for the week, dropped yesterday after China said inflation was 4.6 percent in December and that the economy grew 9.8 percent in the fourth quarter. Prices also slipped after the Energy Department said that U.S. crude supplies rose for the first time in seven weeks.
'Fiscal Meltdown' for States Exaggerated, Group Says
By Esmé E. Deprez
Jan. 20 (Bloomberg) -- Predictions of an "imminent fiscal meltdown" among U.S. states and municipalities are exaggerated and create "unnecessary alarm" for policy makers, the Center on Budget and Policy Priorities said in a report.
The operating deficits most states are forecasting for fiscal 2012 are the result of the post-recessionary weak economy and have been erroneously conflated with longer-term issues such as debt, pension obligations and retiree health costs, Iris J. Lav, senior adviser at the Washington research group, and Elizabeth McNichol, a senior fellow, said in the report today.
San Francisco Area Home Prices Fell 1.3% in December
By Dan Levy
Jan. 20 (Bloomberg) -- San Francisco Bay Area home prices fell 1.3 percent in December as foreclosure sales made up a larger share of purchases, MDA DataQuick said.
The median paid for new and resale houses and condominiums in the nine-county region was $375,000, down from $380,000 for both November and a year earlier, the San Diego-based real estate data firm said today in a statement.
Foreclosure sales increased for the fifth straight month to 31 percent of all purchases, the largest proportion since March. California as a whole had the most foreclosures of any U.S. state last year, with 546,669 filings, Irvine, California-based data seller RealtyTrac Inc. said last week.
Borderless Economy, Jobless Prosperity
By NANCY FOLBRE - NYTimes.com
Why has the economic recovery left workers behind? The question keeps coming up, in slightly different versions. As the headline of a recent New York Times article by Michael Powell put it, "Profits Are Booming. Why Aren't Jobs?" The term "jobless prosperity"- which surfaced in 1993 and again 2002 - now bobs high.
Many journalists argue that globalization is partly to blame for historically low rates of job creation over the last year. Companies in the United States are simply less reliant on American workers - and American consumers - than they once were. Maybe they just don't need us any more.
Few economists like this argument, but even some mainstream savants like Alan Blinder of Princeton University express concern about the effects of offshoring. And the effects of globalization extend well beyond job loss.
The recession strikes again: More people can't afford retirement
By Walter Hamilton - LATimes.com
As if lost jobs and foreclosed homes weren't enough, here's another lingering effect of the last recession: foundering retirement accounts.
Almost 3 million people ages 36 to 62 are now at risk of not having enough money to retire because their 401(k) accounts tumbled and the value of their homes fell during the recession, according to data released Thursday by the nonpartisan Employee Benefit Research Institute.
That figure measures only bare-bone readiness -- having enough for food, shelter and uninsured medical expenses.
Social Security Is in Far Worse Shape Than You Think
By CHARLES HUGH SMITH - DailyFinance.com
For years, politicians and policymakers have reassured the American public that the Social Security system, which sends monthly checks out to 53 million beneficiaries, is safely solvent -- and will be for decades to come. But federal spending and income data from the Treasury Department reveal that the Social Security program is already deep in the red, with outlays exceeding payroll tax revenues by $76 billion in 2010 alone.
This stunning shortfall calls into question the rosy fiscal forecasts made by the Social Security Administration (SSA) about the program's future solvency.
The annual report of the Social Security Trustees, published in August 2010, forecast that the primary Social Security program, the Old Age and Survivors Insurance Trust Fund (OASI), would not exceed its tax receipts until 2018. Unfortunately, it happened in fiscal 2010, which ended in October. That year's outlays for the OASI fund were about $580 billion, while receipts came to only $540 billion -- a whopping $40 billion shortfall.
How to Get the US Back to Full Employment in 30 Days
By Bill Bonner - The DailyReckoning.com
01/20/11 Paris, France - We're in the airport, on our way back to Washington. Below we'll tell you more about one family's economy But first, let's look at the whole world's economy...
Nothing much happened in the markets yesterday anyway.
"Why jobs aren't part of US revival," asks a New York Times headline.
The US now has a higher unemployment rate than Russia... or Britain or Germany... or Japan. When it comes to joblessness, the US is a world leader.
But why? Economists can't figure it out. Harvard economist Lawrence Katz says it's "genuinely puzzling."
After admitting that he has no idea why there are so many people without jobs, columnist David Leonhardt goes on to tell us that "fixing the job market will take years."
Why Retirements Are Going Bust, Again
By Jim Nelson - TheDailyReckoning.com
01/20/11 Baltimore, Maryland Ð Forget 2008... We're seeing the worst hit to retirement accounts right now!
Mutual funds, specifically tax-exempt funds, have long been favorites among near retirees. With the clock ticking, where would you go for an edge on retirement building? And if you could find tax-free, high-yielding, considerably safe income, wouldn't you take it?
Unfortunately, those who bought into this line of thinking over the past several years have just rudely awoken to a major collapse.
Many municipal bond funds offer investors a tax-exempt source of income that is backed by the full faith and credit of US cities and states. These, in turn, have an implied backing by the federal government. (After all, would Obama really let California break off into the ocean?)
A New Deal for the 21st Century: Less Entitlement, More Accountability
Remarks by Christopher Whalen - Indiana State University
In a January 2011 article in The Nation magazine, author William Greider bemoans the death of New Deal liberalism. "When the party of activist government, faced with an epic crisis, will not use government's extensive powers to reverse the economic disorders and heal deepening social deterioration," Greider writes, "then it must be the end of the line for the governing ideology inherited from Roosevelt, Truman and Johnson." i
Greider is not the only observer to note the end of the New Deal and the related unwillingness of liberals to fight efforts by members of both parties to roll-back the size of government. "[T]he public is being sold a big lie - that our problems owe to unions and the size of government and not to fraud and deregulation and vast concentration of wealth," former Secretary of Labor Robert Reich told the New York Times. "Obama's failure is that he won't challenge this Republican narrative, and give people a story that helps them connect the dots and understand where we're going."
Social Media Crackdowns Trigger Legal Fights
By JEANETTE BORZO - WSJ.com
Facebook gaffes that can cause trouble in the workplace aren't unique to drunken college students any more. As more companies - and their workers - tap into the world of blogs, Twitter and Facebook, employers are tripping over legal potholes in social media.
Next week, for example, a National Labor Relations Board judge will consider whether a medical-transportation company illegally fired a worker after she criticizing her boss on Facebook, in the federal agency's first complaint linked to social media.
In another case, workers sued a restaurant company when they were dismissed after managers accessed a private Myspace page the employees set up to chat about work.
Verizon challenges FCC Net neutrality rules
By Laurie Segall - CNNMoney.com
NEW YORK (CNNMoney) -- Verizon filed a legal appeal on Thursday challenging the Federal Communications Commission's authority to enforce the new Net neutrality rules it adopted last month.
"We believe this assertion of authority goes well beyond any authority provided by Congress, and creates uncertainty for the communications industry, innovators, investors and consumers," Verizon senior vice president and deputy general counsel Michael E. Glover said in a written statement.
Lindsey Williams Returns:
China Owns The United States - Alex Jones Tv 1/5
Lindsey Williams Returns:
China Owns The United States - Alex Jones Tv 2/5
Lindsey Williams Returns:
China Owns The United States - Alex Jones Tv 3/5
Lindsey Williams Returns:
China Owns The United States - Alex Jones Tv 4/5
Lindsey Williams Returns:
China Owns The United States - Alex Jones Tv 5/5
Are You Ready For The Universal Internet ID That Barack Obama Wants To Impose On All Of Us?
EndOfTheAmericanDream.com
The Obama administration is developing a "universal Internet ID" program that would watch, track, monitor and potentially control your activity on the Internet. These "trusted identities" are being touted as a way to increase safety and security on the Internet and as a way to eliminate the need for dozens of different usernames and passwords. But is a universal Internet ID that is issued and controlled by the U.S. government really a good idea? Right now, Obama administration officials are trying to make it seem as non-threatening as possible. They are insisting that it will not be mandatory. They are insisting that it would be impossible for hackers to steal the universal Internet identities. They are insisting that none of our personal information will be gathered or used by federal agencies. But in light of how regularly the government has abused our liberties and freedoms in recent years in the name of "security", should we really believe what they are saying about this new universal Internet ID?
Priceless: How The Federal Reserve Bought The Economics Profession
by Ryan Grim - LewRockwell.com
The Federal Reserve, through its extensive network of consultants, visiting scholars, alumni and staff economists, so thoroughly dominates the field of economics that real criticism of the central bank has become a career liability for members of the profession, an investigation by the Huffington Post has found.
This dominance helps explain how, even after the Fed failed to foresee the greatest economic collapse since the Great Depression, the central bank has largely escaped criticism from academic economists. In the Fed's thrall, the economists missed it, too.
"The Fed has a lock on the economics world," says Joshua Rosner, a Wall Street analyst who correctly called the meltdown. "There is no room for other views, which I guess is why economists got it so wrong."
Financial trends of the new American economy - Higher educated workforce with harder time finding and keeping jobs, median retirement account for Americans at $2,000, global stock market growth, and housing bust covering up inflation in other areas.
by mybudget360
he Great Recession is revealing some fundamental challenges in our economy. One of those challenges revolves around the exceedingly expensive college degree and its ability to translate into employment. As a percent many more American's have a bachelor's degree today than say in 1992 yet unemployment for college educated Americans is at modern record highs. Another profound challenge facing American families is retirement savings (or lack thereof which is more likely the case). Retirement is largely becoming a luxury that only a handful of families can count on. As we look back at the last decade not all global stock markets were created equal and this is evident when we compare the US stock market to those abroad. Finally we will examine what areas are seeing major price increases all the while overall inflation appears to be muted to average Americans.
Spain to Ramp Up Bailout of Banks
By SARA SCHAEFER MU„OZ And JONATHAN HOUSE - WSJ.com
Spain plans to pour billions more euros into its troubled savings banks and force them to be more open about their lending practices, people familiar with the matter said, an acknowledgment that previous efforts to fix the banks have fallen flat as the country seeks to ward off an international bailout.
In a first step, Spain is preparing to issue €3 billion ($4 billion) in debt in coming days, the people familiar with the matter said. Government officials are putting plans in place to eventually raise as much as €30 billion, according to these people, though some say the final tally will be less.
The hope is that a series of capital injections will quell investor jitters about the savings banks, known as cajas (literally, "boxes"), which have been a thorn in Spain's side as it seeks to convince investors that the country's finances are stable.
Hu Jintao questioned by Barack Obama on China's human rights record Chinese leader admitted 'more needs to be done' on the issue during joint press conference with US president in Washington
By Ewen MacAskill in Washington, Tania Branigan in Beijing - guardian.co.uk
China's president Hu Jintao was forced on the defensive today on the opening day of his state visit to the US, admitting for the first time in public that his country had to improve its human rights record.
Hu's visit, intended to improve relations between the two countries after a year of tensions over trade and diplomacy, was overshadowed by the human rights issue. It has been raised twice by Barack Obama in public, by US reporters at a press conference and by hundreds of demonstrators outside the White House.
China Should Call Washington's Obtuse Currency Bluff
By John Tamny - RealClearMarkets.com
With Chinese president Hu Jintao set to meet with President Obama today, readers can expect numerous media mentions of China's allegedly "undervalued" currency, along with calls by various members of the political class in Washington meant to convince them to revalue it upward against the dollar. Now's the time for the Chinese to call Washington's bluff.
About this, it can't be stressed enough that in pegging their currency to the dollar, the Chinese have been and continue to do the right thing. Money is not wealth, rather money is a representation of wealth that enables the easy exchange of goods between consenting individuals.
The U.S. and China Going In Opposite Directions
By: Julian D.W. Phillips - MarketOracle.co.uk
China is in the midst of a 'State visit' to the U.S. but this time China will get a state banquet. This implies a changed attitude to China by the U.S. It is clear to all today that there is unlikely to be a real confrontation between the two nations anymore. If there were to be a war between the two it is most unlikely to be an economic/financial one, not a military one. China is racing to be the number one economic world power and the U.S. is retreating from that position, slowly but surely. Each day, the power of the U.S. to dominate or even influence China falls slightly. Each day the power of China to influence and eventually dominate the global economy grows. At this moment in time China owns around half of U.S. Treasuries. They are already in a position to hurt the U.S. very badly, should they want to. But it is not in the interests of China to do that. China is empire-building and doesn't want to be distracted from that. They appear to be on a winning road already. China's is on the rising road and will soon pass the U.S. going the other way.
U.S And China Reach $45 Billion In Export Deals
By Caren Bohan and Doug Palmer - Reuters
Washington - The United States and China reached agreement on export deals worth $45 billion including a major contract with Boeing, the White House said on Wednesday at the formal start of Chinese President Hu Jintao's state visit.
The agreements included China's final approval of a $19 billion contract to buy 200 Boeing aircraft for delivery between 2011 and 2013, which U.S. officials estimated would support 100,000 American jobs.
"We value China's support for our products and its confidence in Boeing," said Jim Albaugh, CEO of Boeing Commercial Airplanes. "With the outstanding support provided by the United States Government, this deal is a win-win for the Boeing-China partnership which is approaching its 40th anniversary.
China's Growth Accelerates, Adding Tightening Pressure
By Bloomberg News
Jan. 20 (Bloomberg) -- China's growth accelerated to 9.8 percent in the fourth quarter as industrial production and retail sales picked up, adding pressure on policy makers to keep raising interest rates.
The expansion exceeded the 9.4 percent median estimate in a Bloomberg News survey of 22 economists and compared with a 9.6 percent annual gain in the previous three months, a statistics bureau report showed. Consumer-price inflation eased to 4.6 percent in December. Citigroup Inc. and Credit Suisse Group AG say inflation may peak at as much as 6 percent in the first half.
China's Economic Growth Accelerates to 9.8% From Year Earlier
By Bloomberg News
Jan. 20 (Bloomberg) -- China's growth accelerated to a more-than-forecast 9.8 percent in the fourth quarter, adding pressure for more monetary tightening to counter inflation.
The expansion reported by the statistics bureau in Beijing today compared with a 9.6 percent annual gain in the previous three months. The median estimate in a Bloomberg News survey of 22 economists was 9.4 percent. Consumer prices rose 4.6 percent in December, matching the median forecast.
Chinese officials may keep ratcheting up bank reserve requirements and allow more gains in the yuan after the currency strengthened to a 17-year high as President Hu Jintao visited the U.S. this week. The World Bank sees "considerable scope" for higher benchmark interest rates, with Citigroup Inc. and Credit Suisse Group AG estimating that inflation may peak at as much as 6 percent in the first half.
Obama Says China Ties Bring 'Substantial Benefits'
By Nicholas Johnston and Michael Forsythe
Jan. 19 (Bloomberg) -- President Barack Obama said the U.S. and China both reap "substantial benefits" from cooperation on economic and strategic issues even as friction remains over currency, trade and human rights.
Following a meeting with business leaders from both countries, Obama said that a prosperous and growing China is an important market for U.S. goods as the administration highlighted deals to sell Boeing Co. airplanes and General Electric Co. locomotives.
"We want to sell you all kinds of stuff," Obama said to Hu during a joint news conference at a White House. "We want to sell you planes; we want to sell you cars; we want to sell you software."
Brazil slams brakes to curb inflation, risking hot money tsunami Brazil has raised interest rates sharply, following China, India and host of countries across the emerging world in acting to curb inflation and counter the flood of dollar liquidity from the US.
By Ambrose Evans-Pritchard - Telegraph.co.uk
Alexandre Tombini, the new head of Brazil's hawkish central bank, kicked off his tenure by raising the key Selic rate a half point to 11.25pc, despite fears that this will push the over-valued real to extreme levels.
Poland also tightened, raising rates a quarter point to 3.75pc in a "pre-emptive" move to nip price pressures in the bud.
Brazil faces an acute dilemma since high rates have made it the darling of the global "carry trade", attracting US, European and Japanese funds chasing yield.
Economic depression to hit badly this year
By Toby Connor - CommodityOnline.com
Humans, for whatever reason, tend to project the past into the future. It is an emotional flaw in our genetic makeup. It is also the reason why so many otherwise intelligent people miss the big turning points in the economy and stock market.
A classic example occurred in the summer of `07. The sub-prime market was just starting to implode. With the benefit of hindsight we now know that was the beginning of the end for not only the stock market but the global economy.
Unfortunately, because we couldn't read the writing on the wall, we trusted that the Fed would "fix" this minor blip but cutting rates aggressively and spewing out an avalanche of freshly counterfeited dollar bills. It did not fix the credit markets and instead spiked the price of oil to $147 a barrel. That turned out to be the final straw that broke the camel's back and sent the global economy spiraling down into the worst recession since the Great Depression. The stock market rolled over into the second worst bear market in history.
The Politics of Deflation
By: Vijay Boyapati - MarketOracle.co.uk
The reason that political establishments have always been biased against monetary deflation[1] can be found in the manner in which wealth transfer occurs under inflationary and deflationary environments.
During an inflationary credit expansion, wealth is transferred from the public in general to the earliest recipients of the newly created credit money. In practice, the earliest recipients are interest groups with the strongest political connections to the state and, in particular, the state institutions that control monetary policy (i.e., the Federal Reserve in the United States). Importantly, the wealth transfer that takes place during an inflation is hidden and largely unrecognized by the majority of the population. The population is unaware that the supply of money is increasing and the attendant rise in prices, ostensibly beneficial to business, initially.
American eagle coins demand soars
WASHINGTON, DC (Commodity Online): The American Silver Eagle Proof & Bullion coins are in high demand.
With Silver breaking $30 an ounce last December and current forecasts projecting Silver to hit $40 an ounce in 2011, demand for American Silver Eagle Coins has greatly increased.
Demand for the coins is so strong that sales broke records in November 2010, exceeding sales in December 1986, the year the coin was first introduced.
With Silver currently trading well below $40 an ounce,investors are flocking to get their hands on Silver American Eagle proof coins. One reason for the strong demand is that these coins can be added to a self-directed gold IRA,in fact they are only one of five coins permissible in a self-directed IRA.
Gold advances in Asia as dollar dips
SINGAPORE (Commodity Online): Gold prices advanced further in Asian trade Wednesday as the dollar weakened amid lingering concerns over Europe debt crisis.
Spot gold was seen trading at $1372.97 an ounce at 12.30 p.m Singapore time while February- delivery gold was at $1372.51 an ounce in New York.
The greenback traded near a five-week low against the euro on speculation that slow recoveries in housing and labour markets will compel the Federal Reserve to put off interest-rate increases.
The Dollar Index, which measures the currency's strength against six major counterparts, fell for a second day.
Brace for a 'perfect storm' in gold Central bankers are readmitting gold back into the group of prudent asset classes
By Thomas Kaplan - FT.com
Investment implies moving some part of one's assets from financial safety to a position of acceptable risk with the hope of increasing wealth over time. What qualifies as "acceptable risk" may thus be seen to be the gating question for the investment criteria of a "prudent man". This has come to be known as the Prudent Man Rule to guide persons entrusted with the finances of others.
Although the rule remains a guiding principle in the fund management industry to this day, at least one key element has changed. In 1971, our understanding of ultimate safety was transformed when President Nixon ended the US government's certification that each dollar in circulation was, in effect, worth exactly 1/35th of an ounce of gold.
'Fear and Love Make Gold Strong'
An interview with Frank Holmes, by Jeff Clark - LewRockwell.com
BIG GOLD: Gold was up 30% in 2010; to what do you attribute its rise?
Frank Holmes: Investors have to look at gold demand as both the fear trade and the love trade. What most media focus on is the negativity of government policies to drive gold prices. I characterize this as the fear trade - deficit spending and negative real interest rates for the G7 countries.
More significant is the love trade - where more than 60% of the world's population is in emerging countries averaging over 6% GPD growth and 8% rising personal income, and they believe in giving gold as a gift for birthdays, weddings, religious holidays, etc. This love trade is entrenched, and it is not going away.
Fears over the European debt crises were a big driver of gold in the first half of the year, as investors bought both gold and the dollar for safety. However, by mid-year, the dollar started to break down as smoldering budget woes in the U.S. began to reignite concerns over the fiscal situation here.
Dollar erosion is the formula to Gold triumph
By Anthony Stills - Commodity Online
I want to look at the US dollar because it epitomizes what's wrong with the US. You have a very small group of very powerful unelected officials who are allowed to create unknown amounts of wealth out of nothing and give it to friends and supporters.
They answer to no one and they are not held accountable for their actions. The Chairman of the Federal Reserve has gone so far as to say that the American people don't have a need to know. Over the long run it is very difficult to fool the market, especially with the Internet and the fact that we now have a global market that trades twenty-four hours a day. That's why the US dollar has been declining for months even as the Fed insists it has a strong dollar policy.
Bill Fleckenstein: The Race To the Bottom Will Be Won By the Dollar
by Tyler Durden - ZeroHedge.com
"This printing money is going to lead to huge trouble. It's going to lead to higher interest rates. It's going to lead to more inflation and at some point there is going to be a train wreck in the currency and the bond market."
Market commentator and money manager Bill Fleckenstein sat down for a recent interview with ChrisMartenson.com and opened fire with both barrels on the Fed and the monetary policy it's pursuing. He and Chris discuss the factors that enabled Bill to be one of the first to accurately identify and warn of the housing and credit bubbles - and how history is now repeating itself via the profligate printing of US dollars. The interview covers a wide range of topics meaningful to the investor trying to make sense of where things are headed from here - including central banking culture, bubble psychology, high-frequency trading, inflation/deflation, and the true relative value of the dollar vs the Euro.
December consumer credit down for 11th straight month
Reuters - RealClearMarkets.com
WASHINGTON (Reuters) - A weak job market and tight credit conditions caused consumer credit to fall $1.73 billion in December, the eleventh straight monthly decline, a report from the Federal Reserve showed on Friday.
December consumer credit outstanding fell at a 0.8 percent annual rate to $2.457 trillion, following a sharp downward revision to November's record drop. November credit fell $21.83 billion, or a 10.6 percent rate, compared to the record $17.5 billion first reported.
Analysts polled by Reuters had forecast consumer credit to decline by $9 billion in December.
Front-Running the Fed in the Treasury Market,
There Is No Business Like Bond Business
By Professor Antal E. Fekete - MarketOracle.co.uk
For some nine years I have been predicting that the economy is going to a recession morphing into a depression, using a purely theoretical argument. The essence of my argument is that the open market operations of the Fed cause a protracted decline in interest rates which is responsible for the hard-to-detect capital destruction affecting the financial sector no less than the productive sector. The immediate cause of the depression is the destruction of capital. The ultimate cause is the monetary policy of open market operations. The chain of causation is as follows.
Wells Fargo Won't 'Pay Up' to Settle Mortgage Buybacks
By Dakin Campbell
Jan. 19 (Bloomberg) -- Wells Fargo & Co. won't seek a settlement with Fannie Mae or Freddie Mac on disputed mortgages, and terms offered to rival banks may not have been as generous as some portrayed, Chief Financial Officer Howard Atkins said.
"The quality of our securitizations was of a much higher caliber than all of the other large bank peers," Atkins said today in an interview. "It doesn't make sense for us to pay up to get rid of the remaining small amount of problems we have."
Prodded by lawmakers, Fannie Mae and Freddie Mac have pressed banks including Wells Fargo to buy back mortgages that were based on faulty data about the homes and borrowers. Wells Fargo said today in its fourth-quarter report that demands from the government-owned mortgage companies declined for a second straight quarter and now stand at $1.5 billion.
Law Allows Private Insurers to Profit on Medicare Float
By Ricardo Alonso-Zaldivar, Associated Press - CNSNews.com
Washington (AP) - Private health insurance plans catering to Medicare recipients are making millions by taking money the government sends in advance - but isn't immediately needed - and using it to make investments, federal investigators say in a report obtained by The Associated Press.
In financial parlance, it's called "playing the float."
In contrast with another government program that also deals regularly with health insurers, Medicare lets its plans keep the cash.
An audit by the Health and Human Services inspector general's office estimates that private Medicare Advantage plans collected $376 million from investment income on advance payments from the government in 2007, the latest year available.
Why High Interest Rates Are Good for the Future of the Housing Market and for Those Buying Houses
by Matthew Sercely - LewRockwell.com
Many politicians today speak of the dangers of allowing interest rates to rise. Some claim the entire housing market will come to a standstill. Others speak of the hardship of new buyers managing to buy houses if interest rates go up. It is no great surprise to any good student of economics that such fears are groundless.
1. Higher interest rates would lowers prices
The first and most important reason that high interest rates would be good for the housing market is that it would lower the price of housing to what a normal individual can afford.
Prices of houses are not truly determined by what one is willing to pay for the house; it is determined by what one is willing to pay per month for the house. A homebuyer really doesn't care if his house costs $100,000 or $1,000,000 - he cares whether his monthly mortgage payment is $1,200 or $1,300.
Union Protest Interrupts Mortgage Bankers Summit
By Shahien Nasiripour - HuffingtonPost.com
WASHINGTON -- About 200 union workers interrupted a meeting of mortgage bankers at a posh hotel Wednesday.
The protest -- aimed at the Pulte Group, one of the nation's largest homebuilders -- quickly turned into a scrum as workers wearing hardhats and shouting through bullhorns overwhelmed the security staff at the JW Marriott, bursting into a crowded conference room before a stunned crowd of bankers.
Shouting "Where are the jobs?" and "Where is the money?" the protesters from the Sheet Metal Workers' International Association and the International Union of Painters and Allied Trades, many in overalls and helmets, said taxpayers have provided $900 million in tax breaks to Pulte with the aim of creating jobs. They said they haven't seen the results they were promised.
Foreclosure Monitor May Be Required in a Bank Deal, Jepsen Says
By David McLaughlin and Sophia Pearson
Jan. 19 (Bloomberg) -- A third-party monitor may be required as part of any settlement of a probe by 50 state attorneys general to ensure that banks comply with foreclosure practices, Connecticut Attorney General George Jepsen said.
A settlement should include a mechanism to supervise bank practices, Jepsen said yesterday in a phone interview. Jepsen, who succeeded Richard Blumenthal as attorney general, said the framework for any deal is months away. The third-party monitor could be a law firm, he said.
"It's one of the many issues under discussion," Jepsen said. Any such oversight could last a couple years, he said. "There's going to be a need for some kind of process to make sure the banks do what they promise to do," he said.
Underemployed vs. Unemployed
By Phil Izzo - WSJ.com
The unemployment rate isn't as closely tied to how rich or poor a country is as its underemployment rate, according to new international data from Gallup.
Using its own polling data, Gallup finds that a nation's economic success is more closely tied to the percent of the population that works full-time for an employer. (View an interactive map of the data)
"In many developing countries, unemployment is often relatively low, particularly compared with that in developed economies, because it takes into account people who are doing whatever work they can find to get by or are self-employed in subsistence jobs. Economically developed countries are more likely to have larger percentages of the workforce employed for an employer, but these percentages vary by country," write Jon Clifton and Jenny Marlar of Gallup.
Behind the Numbers: Bad housing signs bode ill for 2011
By: Diana Furchtgott-Roth - WashingtonExaminer.com
December's housing starts left a lump of coal in the housing industry's stocking, rounding out a dismal year. The seasonally adjusted annual rate of 529,000 in December was the lowest rate of the year, down 8.2 percent from November; and the 2010 total of 587,000 starts was slightly better than 2009 (554,000) but lower than any other year since World War II.
An increase in apartment construction in December was more than offset by a drop of 14.2 percent in new homes, from a November rate of 458,000 to a December rate of 417,000 -- also the lowest of the year. Unfortunately, two very bad years in a row have not made a substantial dent in the overhang of unsold homes, which is not a good omen for 2011.
Home Construction Declines
By SARA MURRAY - WSJ.com
New-home construction dropped in December to its lowest level in more than a year as the feeble housing sector ended 2010 on a weak note.
Private building of new homes dropped 4.3% in December from a month earlier to a seasonally adjusted annual rate of 529,000 - the lowest level of housing starts since October 2009, the Commerce Department said Wednesday. The construction industry continued to stumble last year even as economic growth picked up and private-sector job creation returned. Housing starts ended the year 8.2% below December 2009 and there's little sign building will pick up early this year.
"From what we've heard from builders, they're not very hopeful for recovery in 2011," said Mark Vitner, a Wells Fargo Securities economist. "The first half of the year, it looks like housing's going to be dead in the water."
The Eight States Running Out Of Homebuyers
24/7WallStreet
The single biggest problem in the U.S. real estate market is simple: There are very few homebuyers.
That seems obvious, but the "buyers' strike" has caused house prices to drop, along with an epidemic of foreclosures. What's worse, the long depression in real estate is probably not over. S&P has forecast that home prices will drop by 7% to 10% this year. The S&P Case-Shiller Index has dropped for most of the 20 largest real estate markets over the last several months. RealtyTrac recently reported that more than one million homes were foreclosed upon in 2010.
Many economists argue that the housing market may take four or five years to recover. Even if that's proven to be true, the all-time highs of 2006 may never be reached again.
House votes to repeal health care law against long odds
By the CNN Wire Staff
Washington (CNN) -- The House of Representatives voted to repeal the Obama administration's signature health-care legislation Wednesday evening, a vote the newly elected Republican majority called a fulfillment of their No. 1 campaign promise.
The bill, dubbed the "Repealing the Job-Killing Health Care Law Act," passed 245-189. Three Democrats joined a unanimous Republican caucus on the vote.
The legislation is unlikely to make it past the Democratic-controlled Senate, where Majority Leader Harry Reid has said he won't bring it to the floor for a vote. And even if it did, it would face a certain veto by President Barack Obama. But Rep. Mike Pence, a leading GOP conservative, dismissed Democratic criticism that Wednesday's vote was a "gimmick."
House repeal of health care only a start
By: Susan Ferrechio - WashingtonExaminer.com
House Republicans on Wednesday took the first step to keep their pledge to undo the nation's health care reform law, passing a bill to repeal the measure even as they gear up to create a replacement.
The GOP's new House majority assured easy passage of their repeal measure on 245-189 vote Wednesday that split largely along party lines. But the long-term prospects of actually undoing the new law are far less certain. With the Democrat-led Senate unlikely to act on the bill, a complete repeal is unlikely.
Instead, Republicans will attempt to dismantle President Obama's health care reforms piecemeal by depriving it of the funding needed to enact the law's hundreds of new policies and provisions over the next year or two.
27 of 50 States Now Challenging Constitutionality of Obamacare in Court
By Fred Lucas
(CNSNews.com) - More than half of the states - 27 out of 50 - are now challenging the constitutionality of Obamacare in federal court.
Six additional states--Iowa, Kansas, Maine, Ohio, Wisconsin and Wyoming--petitioned in federal court on Tuesday to join Florida's law suit challenging the constitutionality of the health care law President Barack Obama signed last March. Nineteen states had previously joined with Florida in this suit, making the total number of states that are now a party to the suit 26.
Virginia, which has filed its own lawsuit against Obamacare, is the 27th state challenging the constitutionality of the health-care law in federal court. (A complete list of all 27 states appears at the bottom of this story.)
Obama Pulls a Clinton
By Robert Scheer - Truthdig.com
Here we go again. When Bill Clinton suffered an electoral reversal after his first two years in office, he abruptly embraced the corporate money guys who had financed his congressional opposition in an effort to purchase a second term. On Tuesday in his Wall Street Journal Op-Ed piece, Barack Obama veered sharply down that same course, trumpeting his executive order " ... to remove outdated regulations that stifle job creation and make our economy less competitive."
He employed the same "creating a 21st-century regulatory system" rationalization used by Clinton when he signed off on the sweeping deregulation legislation that unleashed the Wall Street greed that ended up being the biggest job-killer since the Great Depression. "Over the (past) seven years, we have tried to modernize the economy," Clinton enthused as he signed the Financial Services Modernization Act that repealed key New Deal legislation, adding, "And today what we are doing is modernizing the financial services industry, tearing down those antiquated laws and granting banks significant new authority." Modernizing was the propaganda constant, as in the Commodity Futures Modernization Act that Clinton signed, thus shielding financial derivatives from any government regulation.
Arby's Put On Auction Block
By JULIE JARGON - WSJ.com $$
Wendy's/Arby's Group Inc. plans to slice away the Arby's sandwich chain by putting it up for sale, people familiar with the matter said.
The move represents a concession by activist investor Nelson Peltz that Arby's, known for its roast beef sandwiches, is having trouble competing in an industry where the only viable ways to grow are to steal market share from rivals or expand overseas - two things Wendy's is better positioned than Arby's to accomplish.
Mr. Peltz is chairman of Wendy's/Arby's Group and his hedge fund, Trian Fund Management LP, owns a 24.3% stake in the fast-food holding company, which was created through the 2008 merger of the Arby's and Wendy's chains.
As Food Prices Soar, Eateries Scramble
By DANA MATTIOLI - WSJ.com $$
Soaring global food prices, particularly for meat, sugar and coffee, are putting pressure on the restaurant, travel and hotel sectors as they pursue a fragile recovery. In a bid to offset added costs without passing them on to price-sensitive consumers, many companies are scrambling to renegotiate contracts, find cheaper suppliers and reconfigure menus.
Increased demand and market speculation, as well as bad weather like the recent flooding in Australia, have driven up prices for items ranging from coffee beans to beef. Prices of corn and soybeans, used as feed for cattle and chicken, have leapt over the past six months, pushing up meat prices. As a result, meat prices have also increased.
Nearly $72 million renewed for local homeless programs, $1.4 billion distributed nationwide
by Alexandra Zavis - LATimes.com
Federal housing officials Wednesday announced nearly $72 million in renewed funding for 227 homeless programs in the city and county of Los Angeles.
The grants are part of $1.4 billion in nationwide funding to help organizations continue to provide stable housing and services such as job training, mental health counseling and substance abuse treatment in the coming year.
"Over the last decade we've seen that when localities combine housing with supportive services, the results are fewer ambulance and police calls, fewer visits to the emergency room and, just as importantly, real savings for taxpayers," Housing and Urban Development Secretary Shaun Donovan said in a conference call with journalists.
The approach reflects an emerging consensus among advocates for the homeless that putting a permanent roof over people's heads must be the priority. But it remains controversial.
California lawmaker pushes to tax online sales Assemblywoman Nancy Skinner says the tax could raise $300 million in badly needed state and local government revenue this year. -- By Marc Lifsher, Los Angeles Times
Reporting from Sacramento - A Berkeley lawmaker, backed by a coalition of large and small retailers, is pursuing a controversial bill to require Amazon.com Inc. and many other Internet retailers to collect sales taxes on purchases made by California consumers.
Democratic Assemblywoman Nancy Skinner touted a bill Wednesday that she said could raise $300 million in badly needed state and local government revenue this year. It's at least the third such effort by state lawmakers in the last three years.
Similar legislation was approved in 2009 as part of a proposed state budget but was vetoed by then-Gov. Arnold Schwarzenegger. The new governor, Jerry Brown, who is scrambling to fill an estimated $25-billion budget shortfall, hasn't taken a position on the issue, Brown spokesman Evan Westrup said.
California State University employee has $161,789 taxpayer-funded pension -- By: Mark Hemingway - WashingtonExaminer.com
Government employees across America get outrageously generous pensions paid for by taxpayers. Here's one of them. Who's pigging out: Robert Jones
Ingredients for this pigout: Jones worked for California State University at Sacramento
How big is this pigout? $161,789
Average annual private-sector retirement income: $31,757
Who pays for this pension pigout? The taxpayers of California
How can this happen? Public employee pensions in California are so generous the state now has a $535 billion unfunded future liability, equal to $36,000 for every household in the state. That's more than the gross national product of Sweden, Switzerland or Saudi Arabia. California is not unique; have you checked your state's public employee pensions lately?
Tale of three workers: Optimism and worry as signs of recovery grow Mark Gran, a sheet-metal fabricator in Kansas City, Kan.; Neri Cruz, a postal worker in San Marino; and David Viggiano, a software developer in Atlanta, plan to spend this year on things they've put off - but cautiously.
By Don Lee, Los Angeles Times
Reporting from Washington - After three years of brutal recession and tepid recovery, the outlook for the U.S. economy this year may boil down to a tale of three workers and their families - their hopes, fears and, most of all, their decisions on spending the money they earn.
For now, they seem to be getting their spending mojo back. But they are moving forward with a new caution, a hard-earned sense that events could quickly turn for the worse and they'd better be prepared.
In an economy that relies on consumer spending for 70% of the nation's gross domestic product, nothing really matters as much as what the 90% of U.S. workers with jobs decide to do with their money - spend it, squirrel it away, use it to pay down debt.
The Rise and Fall of the Labor Force
By Megan McArdle - The Atlantic.com
In keeping with today's emerging "labor" theme, I now turn to David Leonhardt's article on the mystery that is puzzling economists: why is American GDP recovering robustly, while employment growth lags other nations, and our own history?
This is not a new mystery. You may be old enough to remember the ponderous articles on the "jobless recovery" that appeared like clockwork to punctuate the passage of months of the early Clinton administration. You are almost certainly old enough to recall similar fare under Mr. Bush. Before the 1990s, recessions seemed to have a clear pattern--jobs would be lost during the downturn, then roar back along with the rest of the economy. Since then, we've seen a different pattern: the jobs go away, and the workers take a long time to find another. In 2003, Erica Groshen and Simon Potter offered a possible explanation for this, in a paper for the Fed. Unemployment was lagging, they suggested, because while previous downturns had mostly featured cyclical unemployment--employers laid off, then rehired when demand picked up--the more recent recessions were producing mostly structural unemployment: whole industries and job categories were going away, which meant that a lot of laboriously acquired human capital (both skills and networks of contacts) was being destroyed. Those workers were taking a lot longer to find new jobs.
Boeing cutting 900 jobs at Long Beach C-17 plant The sprawling factory, barring an unlikely rise in demand, is expected to shut down completely by the end of next year.
By W.J. Hennigan, Los Angeles Times
Time is running out at Southern California's last major conventional aircraft factory.
Citing declining orders for its C-17 cargo planes, Boeing Co. said it was cutting 900 of the 3,700 jobs at its sprawling Long Beach plant. Barring congressional intervention or a spate of foreign orders - which analysts say is unlikely - the factory is expected to shut down completely by the end of next year.
"There's just not that much of a market for this aircraft," said Scott Hamilton, an aviation industry consultant in Issaquah, Wash.
The layoffs, which the company announced late Wednesday, continue the decline in local aerospace jobs. The industry, which employed more than 160,000 people in Southern California in 1990, had an estimated workforce of about 47,650 last year.
American Express to cut 550 jobs as service needs shrink
USAToday.com
NEW YORK (AP) - American Express said Wednesday it plans to close a service center in Greensboro, North Carolina, and cut 550 jobs as more of the credit card company's transactions are handled online and on mobile devices.
The moves will lead to charges that will reduce fourth-quarter earnings.
American Express (AXP) said work now handled in Greensboro will be transferred to other locations in the U.S. A broader consolidation plan also will transfer work from a center in Madrid, Spain, to sites in the United Kingdom and Argentina, and shift service support for Japanese card operations from Sydney, Australia to Japan.
The 10 Companies That Control the Death Industry
The Atlantic
Dying in America is expensive. The average cost of a funeral, from the flowers to the plot, has grown to $9,000. With almost 1.8 million buried every year, that amounts to a $15 billion-a-year business.
The death industry, including funeral homes, crematoriums, and cemeteries, is a tale of two economies. Most of the 19,500 funeral homes in America are small operations, passed down through families over the generations. But a few large companies, many of them publicly traded (including Wal-Mart and Amazon), control the business. Those are the firms that we studied in this analysis of the death industry.
Your mobile phone is becoming your wallet Pay for coffee with your iPhone or BlackBerry
By Laurie Segall
NEW YORK (CNNMoney) -- Welcome to the dawn of mobile currency.
For years, tech companies have demoed flashy prototypes of systems that let customers use their mobile phones in place of cash or credit cards. This year, those systems are heading out of the labs and into the real world.
The result: A gold rush on the next e-commerce frontier.
"There's a lot of money at stake if it's done right," says Omar Green, director of strategic mobile initiatives at Intuit.
Starting Wednesday at Starbucks stores throughout the U.S., the cashier can now scan your phone to deduct payment for your lattŽ from the balance on your pre-loaded Starbucks card. Splitting the dinner bill with a friend? Download Bump, and you can beam over the cash from your PayPal account.
Samsung Granted RoboCop Patent
By Kurt Bakke - ConceivablyTech.com
Samsung just received confirmation for a patent that describes an unmanned automatic shooting mechanism that is designed to support and replace security forces in locations such as airports, harbors, and nuclear power plants.
Samsung fuels the 2011 IT patent frenzy with 151 patents granted in the second week of the year. One of them was particularly interesting and somewhat reminiscent of the automated "enforcement droid" in the 1990 movie RoboCop 2.
Tucson, Juarez and an Assault Weapons Ban
By Amy Goodman - Truthdig.com
The Glock 19 semiautomatic pistol that Jared Loughner is accused of using in his rampage in Tucson, Ariz., is, according to Glock's website, "ideal for versatile use through reduced dimensions" and is "suitable for concealed carry." The site continues, "Compact and subcompact Glock pistol model magazines can be loaded with a convincing number of rounds," from the standard 15 up to 33. The shooter was able to kill and wound to the extent that he did, with six dead and 13 injured, because he had a semiautomatic, concealed weapon, along with the "extended magazine." He was attempting to reload the weapon with another extended magazine when a brave, unarmed woman knocked his next clip from his hand.
Lockheed Gets Big Bucks to Prep Soldiers for Urban War
By Spencer Ackerman - Wired.com
By the end of the year, the U.S. Army will leave Iraq. But Iraq isn't going to leave the U.S. Army.
American soldiers spent seven years patrolling the urban neighborhoods of Iraq; its troops battled insurgents there block-by-block and house-by-house. Now that the Army is getting out of Iraq, it wants to make sure its urban combat skills don't wither away. So it today it gave Lockheed Martin a contract worth up to $287 million to build Urban Operations Training Systems - essentially, giant simulation facilities and modules to help soldiers get ready for life in the big, bad city.
Versions of those training systems can be as simple as shipping containers tricked out to resemble multi-story houses and arranged in village formations, so soldiers can practice how to seize a building without causing needless damage. The Army's got an entire 1000-acre facility in Indiana it uses to train soldiers in urban combat.
More Guard, Reserve Soldiers Are Committing Suicide
By Spencer Ackerman - Wired.com
Citizen soldiers are killing themselves at record rates, the Army announced on Wednesday. Last year, 145 Army Reservists and National Guardsmen committed suicide, compared with 65 suicide deaths across the entire Guard and Reserves in 2009. Worse, Army leaders aren't entirely sure what's caused the increase.
Gen. Peter Chiarelli, the Army's deputy chief of staff and its point person on suicide prevention, told reporters at the Pentagon that there were 343 suicides amongst active and reserve soldiers, Army civilians and family members last year. The number of active-duty suicides in 2010, 156, declined by 6 from 2009, indicating what Chiarelli called the "modest success" of Army suicide-prevention efforts. But 101 Guardsmen took their lives last year, an increase of 53 from 2009, as did 44 reservists, an increase of 12.
Homeland Security Dept. Cannot 'Precisely' Track the Number of Foreigners Working in U.S. on H-1B Visas
By Susan Jones
(CNSNews.com) - No one knows how many foreign workers with H-1B visas are in the United States at any given time because of "limitations in agency data," a new report says.
Congress created the H-1B visa program in 1990 so U.S. employers could hire temporary, skilled foreign workers to give their companies a competitive edge. Many H-1B workers come here to work in high-tech fields.
By law, the number of foreign workers holding H-1B visas is capped, currently at 65,000.
But according to the Government Accountability Office, "The total number of H-1B workers in the U.S. at any one time -- and information about the length of their stay -- is unknown, because (1) data systems among the various agencies that process such individuals are not linked so individuals cannot be readily tracked, and (2) H-1B workers are not assigned a unique identifier that would allow for tracking them over time--particularly if and when their visa status changes."
Supreme Court Upholds Intrusive Government Background Checks
By David Kravets - Wired.com
The Supreme Court ruled unanimously Wednesday that U.S. government contractors must undergo the same background checks as federal employees.
A lower court had declared the checks an unconstitutional "broad inquisition" when applied to the contractors.
The challenged background investigations sought information from any source surrounding an employee's sex life, finances and drug use. The background checks for contractors were required beginning in 2007, and were challenged by nearly three dozen NASA contractors as being too invasive. The contractors neither sought, nor were granted, security clearances for classified information.
Connect Ideas, Don't Protect Them
Mises Daily: by Doug French
Every day, virtually every minute, someone's good idea is making your life better. You're staring at one right now and later you will likely have a miniature version in your hand. Except, someone decided along the way that it could be part of a telephone, which of course used to be plugged into the wall, but was eventually freed to be carried about.
Remember the phone Gordo Gecko called Bud Fox on, while walking on the beach at sunrise, telling Bud he would be rich, in the movie Wall Street back in 1987? As cutting edge as it was at the time, movie audiences hooted in laughter last year when in the opening scene of Wall Street: Money Never Sleeps, Gecko collects a few personal belongings upon leaving jail, among them, that phone: a plastic brick with an antenna no less. You couldn't make a butt call with one of those, for sure.
Now of course, your phone fits in your palm, shoots pictures, and does most of the things your PC does. What you use everyday started out as good ideas. Good ideas are built upon by better ideas. And the results are not just felt in the abstract but become very real to millions.
Pooling our sovereignty with others only undermines it
By: John Bolton - WashingtonExaminer.com
For decades, Americans have slept while their national sovereignty has been threatened, chipped away and eroded by a series of innocuous-sounding and nearly imperceptible decisions. We have been locked in a struggle between our sovereignty and the advocates of "global governance" that most of our fellow citizens didn't even know was under way, let alone how disparate were these two worldviews.
This conflict is not about the buzzword "globalization" and its implications for commerce and culture, but a sharp confrontation about power and government: our power and our government.
Although "sovereignty" has many often contradictory meanings, for Americans, the idea is actually quite straightforward: Sovereignty rests in the Constitution's opening phrase "We the People," meaning our control over our own government.
For the Arab world, the revolution will be televised, on Al Jazeera Al Jazeera's rapid-paced, visceral coverage of the Tunisian upheaval has riveted viewers across the Middle East. Many see it as a big voice in a landscape of burgeoning Arab dissent. But governments accuse it of bias.
By Jeffrey Fleishman, Los Angeles Times
Reporting from Cairo - In cafes and living rooms across the Middle East, the whirling montages and breathless journalists of Al Jazeera are defining the narrative of Tunisia's upheaval for millions of Arabs riveted by the toppling of a dictator.
The Qatar-based television network, as it does with the Iraq war and the Palestinian-Israeli conflict, is airing visceral, round-the-clock coverage in a region of authoritarian states that rarely allow government-controlled media to show scenes of unrest. Al Jazeera is a messenger, pricking the status quo, enraging kings and presidents.
It is the big voice in a multimedia landscape of Arab dissent that encompasses bloggers and online social networks such as Facebook and Twitter. Whereas strategies of revolt on the Internet are largely the domain of the young and educated, Al Jazeera has for years been the touchstone for the masses seeking insight into the wider, mystifying world.
China to Purchase $45B in US Exports
By Julie Pace, Associated Press - CNSNews.com
Washington (AP) - Seeking to ease economic tensions with America's largest trading partner, the White House said Wednesday that China would purchase $45 billion in U.S. exports, including a highly-sought after $19 billion deal for 200 Boeing airplanes.
The announcement comes as Chinese President Hu Jintao arrived at the White House for a state visit with President Barack Obama.
In addition to the Boeing deal, China will also invest in U.S. exports from agriculture, telecommunications and technology companies, including General Electric, Honeywell and Navistar. The White House said the deals will support up to 235,000 jobs in the U.S.
China's military raises its voice
By Rodger Baker - Asia Times
Chinese President Hu Jintao is visiting the United States, perhaps his last state visit as president before China begins its generational leadership transition in 2012. Hu's visit is being shaped by the ongoing China-US economic dialogue, by concerns surrounding stability on the Korean Peninsula and by rising attention to Chinese defense activity in recent months.
For example, China carried out the first reported test flight of its fifth-generation combat fighter prototype, dubbed the J-20, during US Defense Secretary Robert Gates' visit to China the previous week.
The development and test flight of China's J-20 is not insignificant, but it is also by no means a game changer in the US-China defense balance. More intriguingly, the test highlights how China's military increasingly is making its interests heard.
U.S. Defense Cuts Present A Huge Opportunity For The Chinese
24/7WallStreet
Defense Secretary Robert Gates won kudos earlier this month when he announced plans to slash $78 billion over 5 years from the Pentagon's budget and cut the size of the Army and Marine Corps. One issue that received little discussion, however, is how cutting defense spending may harm the U.S. economy over the long run and help its top competitor China.
Indeed, just as the U.S. is slashing spending on aerospace systems and defense equipment, China has opened its checkbook. According to GlobalSecurity.Org, the People's Republic had a 2010 defense budget of 532.115 billion yuan (about $77.9 billion at current exchange rates), an increase of 7.5% more than last year. Defense spending in China has gained by a whopping 12.9% annually since 1989. Other sources give the figure at $98.8 billion as of 2009. Regardless, it's a pittance compared with the $600 billion the Pentagon is due to spend. So far, it has been money well spent by China.
America's Coming Super Depression A Warning to America and to the World!
Nathan Leal - November 29, 2009
.... The Super Depression
It is not easy to share these things. But as Americans, we are all facing a tsunami of economic destruction! The US Dollar is going to collapse! As a result, life in America is going to change. The once strong middle class of the USA is going to be slaughtered and replaced with a new type of lifestyle. The rest of the world calls this lifestyle; Third world living!
The historians that chronicle the approaching crisis in America will have to fumble to find the right words; The Greatest Depression - The Dark Years of America - The Super Depression, etc.
Wary Powers Set to Square Off
By LORETTA CHAO, JASON DEAN and BOB DAVIS - WSJ.com
China's President Hu Jintao landed in Washington for a summit that will help to define a new relationship between the world's longtime superpower and its rising Asian rival, at a time when their bonds have been frayed by mutual suspicions and an ideological gulf.
Since Mr. Hu last visited the White House in 2006, his country's influence has surged and its relationship with the U.S. is now widely recognized as the world's most important bilateral matchup. In some ways ties have strengthened, as in the growing trade and business evident in a series of big commercial deals signed this week. But the two also seem increasingly buffeted by disagreements including Beijing's handling of North Korea, China's own military expansion, its exchange-rate policies and its treatment of foreign businesses.
Global Currency War: How to Keep the "Race to the Bottom" From Stealing Our Future
BY MARTIN HUTCHINSON, Contributing Editor, Money Morning
When Brazil Finance Minister Guido Mantega recently warned of a "currency war that is turning into a trade war," he wasn't far off the mark - at least as far as Latin America is concerned.
In that region - in the last two weeks alone - at least three countries have taken steps to prevent their currencies from appreciating against the U.S. dollar.
If you're a U.S. investor with no Brazilian holdings, you probably wouldn't think you'd have to worry a whole lot about what Brazil is doing to keep its currency - the real - from appreciating.
But on that point, you'd be wrong.
In fact, as Mantega warns, the fallout from a currency war could actually be quite severe - and global in reach. The games that governments are currently playing in currency markets could cause countries to set up trade barriers against imports. And that could bring about the end of the truly global economy - a "de-globalization" that would steal our current standard of living and thwart a return to prosperity.
China Plants Flag on Constitution Avenue
By Kurt Nimmo - Infowars.com
On Tuesday night, Obama followed the script closely.
He sat down to what the corporate media describes as "an unusual and intimate dinner" with Hu Jintao, the CEO of the sprawling slave labor gulag and globalist dream come true in China.
After dinner, Hu Jinato and Obama attended a "pomp-filled gala" designed to celebrate with sickening pageantry what is in essence a planting of the Chinese flag on American soil.
The Associated Press admits the lavish affair with its over-the-top entreaties is designed to "soften the American public's suspicions about China," a nation that detains and tortures individuals for exercising their rights to freedom of association, freedom of religion and freedom of expression.
Trade With China?: 25 Facts That Prove That China Is Kicking Our Rear Ends
EndOfTheAmericanDream.com
Do you believe that trade with China is a good thing? Well, you might not be so sure after you read the 25 facts listed below. The truth is that China is kicking our rear ends all over the planet. When it comes to world trade, China is absolutely dominating the United States. Have you wondered why the U.S. economy cannot produce nearly enough jobs for everyone anymore? Have you wondered why so many thousands of factories have been closing down? Have you wondered why it seems like America is getting poorer? Well, the answers are below. Of course both major political parties continue to insist that "globalism" is a good thing and that what we are experiencing now is just a period of "adjustment" as we are merged into the new global economic order. Our corrupt politicians will continue to sell you the same tired lies over and over and over as thousands more U.S. factories and millions more U.S. jobs continue to be shipped overseas. So will you keep buying the lies of our corrupt politicians or will you believe the facts that are right in front of your face?
Is China already the world's No. 1 economy?
By Ariana Eunjung Cha - WashingtonPost.com
The Peterson Institute's Arvind Subramanian argues in a paper released last week that when the presidents of China and the United States meet in Washington "neither will likely be aware that, measured in terms of purchasing power, it is Hu Jintao not Barack Obama who represents the world's largest economy."
He said that his calculations show that the size of the Chinese economy in 2010 was about $14.8 trillion dollars while that of the U.S. economy was $14.6 trillion if you account for the different costs of living in the countries.
Jim Rogers: Easy to blame Americas problems on China
China's Yuan Policy will be the Source of Much Discussion, but Little Change During President Hu's Visit
BY DON MILLER, Associate Editor, Money Morning
It's unlikely U.S. President Barack Obama will make much headway in his efforts to influence China's yuan policy when he meets with Chinese President Hu Jintao in Washington this week. President Hu made that abundantly clear on Sunday when he rejected U.S. arguments that allowing the yuan to appreciate against the dollar would help the government in Beijing tame inflation.
In response to written questions from The Wall Street Journal and the Washington Post, Hu said he favors greater cooperation with the United States on economic issues but he called the present U.S. dollar-dominated currency system a "product of the past," the newspapers reported on their Web sites.
Stronger Chinese Currency Might Not Help U.S. Exports
by Derek Thompson - The Atlantic.com
When the world's most powerful countries show our wares to the world, China excels in selling consumer goods like microwaves and socks, and the United States excels in selling capital goods, like forklifts, and sophisticated technology like medicine. If less than 15 percent of our export products overlap, what does that mean for the pundits screaming at China to raise its currency?
It means that more expensive Chinese goods won't necessarily help U.S. exports -- but it might make Chinese imports more expensive for us. That's one reason why the RMB shouldn't be the top item on the agenda this week when Chinese President Hu Jintao visits Washington.
China Disses the Dollar
By Chuck Butler - The DailyReckoning.com
01/18/11 St. Louis, Missouri - The US may have been on holiday yesterday, but the rest of the world was not. And so, we had some movement in the currencies in the early part of the day, but after the London boys and girls headed to the pubs, there was little to talk about. What movement we did see yesterday morning was weakness in the euro (EUR), which dragged the other currencies down. The headlines were full of stories about how the markets didn't believe that the European Union's plan to deal with the debt crisis of the periphery countries would be enough...
However, what a difference a day makes... Today, the main headline on the newswire is: "Euro strengthens amid speculation EU planned to fight debt crisis may succeed." Hmmm... A look into the details of the story, will tell you that the markets now believe the Eurozone's leaders will be quicker to increase borrowing costs than the Federal Reserve, which apparently is now more important than the debt crises problem!
China Says The End of The Dollar is Near
Alex Jones Tv (Sunday Edition) 1/3
China Says The End of The Dollar is Near
Alex Jones Tv (Sunday Edition) 2/3
China Says The End of The Dollar is Near
Alex Jones Tv (Sunday Edition) 3/3
India's Secret Economic Weapon in its Race With China
Written by Ed Dolan - OilPrice.com
The eclipse of the G7 by the G20 puts the spotlight more than ever on India and China as the economic superpowers of the future. So far, China has the lead, but India has a secret weapon that will carry it into first place by the end of the century. What exactly? Widely spoken English? That helps India's service sector, but it is not decisive. Democracy? True, democracies outperform authoritarian regimes on average. It is no coincidence that 17 of the G20 are functioning democracies, but China is hanging in there as an exception to the rule. No, the real secret weapon that will carry India into the lead is demographics.
It is not just that sometime around 2030, India's total population will become larger than China's. Total population is an ambiguous factor in prosperity, as those of us know who were raised on the intellectual sparring of Julian Simon and Paul Ehrlich. On the one hand, people are a country's most valuable resource; on the other hand, badly managed population growth can overtax other resources and leave a country populous but impoverished. Rather than total population, it is the inner dynamics of population growth, in particular, the evolution of the dependency ratio, that will make the difference for India and China.
Cost of Portuguese debt rises to unsustainable levels
By David Oakley in London, Peter Spiegel in Brussels and Kerin Hope in Athens - FT.com
Portugal-s cost of borrowing brushed close to euro-era highs on Tuesday as Germany resisted calls to bolster the eurozone's bail-out fund for heavily indebted economies on the continent's periphery.
Portuguese bond yields jumped above 7 per cent - a level that Lisbon has admitted is unsustainable - after concerns rose that the eurozone crisis could worsen, following comments from Wolfgang Schäuble, the German finance minister.
Mr Schäuble appeared to put the brakes on plans to increase the size and scope of the €440bn ($588bn) European financial stability facility, at the end of ministerial meetings in Brussels.
NASA's Hansen: Impose Chinese Totalitarianism on America
By Kurt Nimmo - Infowars.com
Totalitarian thugs love China. They love its authoritarian government and absolute political power. One such thug is the climatologist James Hansen of NASA. Hansen thinks America needs to adapt Chinese authoritarianism in order to force climate change down the throats of the American people.
"I have the impression that Chinese leadership takes a long view, perhaps because of the long history of their culture, in contrast to the West with its short election cycles," writes Hansen. "At the same time, China has the capacity to implement policy decisions rapidly. The leaders seem to seek the best technical information and do not brand as a hoax that which is inconvenient."
Because the U.S. government has not imposed draconian climate change measures on the people, Hansen insists a boycott is in order.
The Great Depression II
By Kirk W. Kelsen - AmericanThinker.com
One basis for deciding whether we are in a "recession" or a "depression" is distinguishing how recessions become depressions. With the hindsight of history, we already know.
Parallels between America's current economic crisis and the 1930's Great Depression are instructive. Then, as now, hardship was preceded by a major banking upheaval. Then, as now, a regulatory blizzard followed. Then, as now, millions were displaced. And then, as now, the cause of the Great Depression was widely misunderstood. Many believe today that the 1929 stock market crash caused the Great Depression all by itself, that it was so severe it mysteriously destroyed wealth for another 13 years. To put that in perspective, the serious Carter-era recession should have, by this logic, precluded the Reagan recovery in 1982 and perhaps wreaked havoc until 1990. Not only is this argument absurd, it manifestly did not happen.
Inflation expectation up 60% in 6 months - Thanks Ben!
by Bruce Krasting - ZeroHedge.com
It wouldn't be fair to say that Bernanke is responsible for all the run-up in global food prices. There are many factors at play. That's not to say the US monetary policy doesn't have a central role in the global commodities market. The Fed has a big axe. Policies like ZIRP and QE encourage speculation. It's contributing to overheating in a number of countries, this is adding to demand at every level. How much can we blame Bernanke for the increases in global food/commodities prices over the last year or so? My guess is about 25%.
Disinformation Fog Intensifies As Economic Turmoil Develops
By Giordano Bruno - Neithercorp Press
In the past few years, the concept of economic globalism has revealed itself as quite the Trojan horse; once posing as the next step in the evolution of "free market" capitalism and the savior of third world nations striving for development status, now revealed as a fiscal plague spreading delirium and destruction wherever it touches ground. There is no denying that the economies of the world are irrevocably tied to one another, but until recently, this was always thought of as a "good thing" in mainstream financial circles. Today, the great failings of engineered interdependency are painfully apparent. The EU's many peripheral nations are dropping one after another like flies in a fog of DDT, rising economies in Asia are bloated with investment capital escaping from debt default in the West, causing impressive levels of inflation, and the U.S. is on the verge of a currency implosion as the Federal Reserve opens the floodgates of fiat in a bid to hide our system's extreme destabilization and maintain what little international faith is left in our ability to service our rampant liabilities. Globalism has led us to disaster...
Greetings from Planet Goldbug
Ryan Jordan - SilverBearCafe.com
I come in peace
From the first moment I saw Ron Paul on C-SPAN (at some point before the Internet Boom) I felt that he must have been sent to Earth from another planet. How else can you account for such honesty, determination, and courage when faced with the doublespeak from financial officialdom? To just take one example of Paul's determination to call the emperor naked, in February of 2000 Paul challenged Sir Alan Greenspan regarding increases to M3 which at the time had well exceeded the Fed's own targets. Greenspan responded with some sort of excuse that money is difficult to define so Paul shouldn't worry about one definition of it, but Greenspan was forced to admit that many of the various monetary aggregates used by the Federal Reserve have left something to be desired. Without missing a beat, Ron Paul concluded his questioning to Greenspan with the quip, "So it's hard to manage something you can't define." (You will note that the Fed stopped publishing M3 data around 2006).
The failure of derivatives regulation of precious metals
FinanceAndEconomics.org
The regulatory failure of precious metal contracts in US derivative markets will have important systemic consequences, and nowhere is the problem becoming more obvious today than in silver. Several banks have been running a substantial short position for a considerable time. This position has been permitted to continue because of weak management by both Comex as the principal dealing exchange and by poor oversight from the US Commodity Futures Trading Commission as regulator.
Between them Comex and the CFTC have ignored two fundamental truths about the market. The first truth is that the continual rolling of short or long positions is fundamentally unhealthy, and is indicative of a growing risk of trader default over time. The second is that no market participant in an open outcry system has any commitment to deal or provide liquidity, unlike a market where there are licensed market-makers who have to make two-way prices at all times. There is therefore no reason why such a long-running speculative position should be permitted even for the Commercials (the banks), and their long-term presence, for which there must be a reason, may be evidence of price manipulation.
US Mint Reports January Silver Sales Hit 26 Year High
by Tyler Durden - ZeroHedge.com
When we had last checked on the total silver sales by the US Mint earlier today, the amount given was 3,407,000 ounces, a number which we had earlier speculated would be a monthly record if sales were maintained at the current pace. And as the number had not been updated we assumed that "either buying interest has ceased overnight (unlikely), that the mint is not updating its numbers (likely), or, worse, that the Mint has now stopped selling any form of silver for reasons unknown." Indeed, the result was the likely one, and following a quick check today on US Mint sales confirms that sales have once again surged following the Mint's delayed update. As of today they stood at a whopping 4,588,000, or nearly 1.2 million ounces sold in a few short days. This represents the biggest monthly total sold by the US Mint going back to 1986 when the Mint disclosed its first monthly sales record... And the month is not even over yet. In other words in just the first three weeks of January, the mint has sold more silver than in any month in its history according to its public records going back 26 years.
U.S. economy, inflation, China, euro, gold
How to Freeze the Debt Ceiling Without Risking Default Next year, the government will have 10 times more income than it needs to honor its interest obligations.
By PAT TOOMEY - WSJ.com
As members of Congress debate whether to raise the U.S. debt ceiling - the limit on our government's debt - we should all agree on at least one thing: Under no circumstances is it acceptable for the U.S. to default on its debt. Not only are we morally obligated to honor our debts, but we benefit greatly from the nearly universal conviction that those who lend to us will always be repaid, on time and in full. We should never undermine that conviction.
Fortunately, even if Congress doesn't raise the debt ceiling, a default on our debt need not follow when our borrowings reach their limit in the next few months. I intend to introduce legislation to make sure of this.
Let 'em go bankrupt Budget Crisis Rhetoric
By Thomas Sowell - Townhall.com
Government budget crises can be painful, but the political rhetoric accompanying these crises can also be fascinating and revealing. Perhaps the most famous American budget crisis was New York City's, back during the 1970s. When President Gerald Ford was unwilling to bail them out, the famous headline in the New York Daily News read, "Ford to City: Drop Dead."
President Ford caved and bailed them out, after all.
The rhetoric worked. That is why so many other cities and states-- not to mention the federal government-- have continued on with irresponsible spending, and are now facing new budget crises, with no end in sight.
Why Have a Debt Ceiling?
By Gene Schwimmer - AmericanThinker.com
Every Passover, Jews ask, "Why is this night different from all other nights?" As Republicans in the newly-minted 112th Congress take pooper-scoopers in hand to begin cleaning the Augean Stables of the 111th Congress, one might similarly ask, "Why will the upcoming debate on raising the debt ceiling debate be different from all other debt ceiling debates?"
The debate will be different this time because this Congress will be debating whether to raise the debt ceiling under the scrutiny of an electorate that is ready to raise the roof if their elected officials fail -- again -- to enact meaningful spending cuts.
True state of the economy You better be darn scared
Do not support Kucininch Fed bill
By: Devvy Kidd
The damnable lies that continue out of lazy, corrupt media mouthpieces regarding the true state of the economy is nothing short of reprehensible. We expect politicians to lie every time they open their mouths. We expect ethically bankrupt crooks like Ben Bernanke and Timothy Geithner to lie every time they open their mouth to protect their banking interests. However, a free media is supposed to be the watch dog for government corruption and report the facts, not propaganda. Not so for a long, long time for what is known as the "mainstream" media. Fools they are because like tens of millions of others, they will also be reduced to penury. Lackeys for their corporate masters no longer question numbers; perhaps they are as ignorant as the majority of adults in this country when it comes to fiat currency and taxation.
No hunger at the Fed
By Hossein Askari and Noureddine Krichene - AsiaTimes.com
Food and energy prices are raging upwards once again, forcing governments in China, India, Brazil, Russia, and others to ring the alarm bells. The United Nations Food and Agricultural Organization (FAO) has announced that in December 2010 food price inflation broke records, with the world food price index exceeding its peak level of 2008.
With gold prices racing beyond $1,400/ounce, rising by 30% in 2010, oil prices about to cross the $100/barrel, rising by 25% in 2010, and the US dollar crumbling, it is hardly surprising to see food prices also explode at alarming rates.
Federal Reserve Leveraged Like Crazy, One Interest Rate Rise From Bankruptcy
Kenneth Schortgen Jr - SilverBearCafe.com
Who does the US call for help if our central bank goes bust? That is a question no one wants to answer, but one that may be staring us in the face as we see insiders of the Federal Reserve coming out and reporting that the Fed appears on the brink of bankruptcy.
Late last week, former Federal Reserve governor William Ford did an interview with Larry Kudlow of CNBC, and in that interview, he spoke on the current state of the Fed, and just how close they may be to bankruptcy.
Not a good sign as China begins a push towards assuring the Yuan will be the world's next reserve currency.
Imminent fall in Dollar may not happen, it may surge now
By Andrew Mickey - CommodityOnllne
2011 is set to be the year of the dollar's rebound.
At first glance, the dollar shouldn't be on the rise. Official unemployment is stuck at near 10%. Dozens of municipal governments are set to fall into bankruptcy this year. The federal budget deficit is over $1 trillion. The Fed has signaled its intention to monetize more debt.
To top it all off, the government closed out 2010 by enacting a law to delay a tax hike and extend massive "temporary" spending that will widen the deficit by $858 billion over the next two years and, we expect, to push the annual U.S. deficit to nearly $2 trillion.
Long-Term Trends vs. Short-Term Corrections
By Eric Fry - The DailyReckoning.com
01/18/11 Laguna Beach, California - "The dollar, yen and euro are all headed to zero eventually," Chris Mayer predicts in his essay "Better than Zero." "But there is a journey of some length between here and there. In the between, you'll be glad you own real assets like oil, natural gas and gold."
But in the between, you'll also be sorry you own real assets like oil, natural gas and gold. That's simply the nature of financial markets. Even in bull markets, misery pays a visit periodically.
The recent history of natural gas prices makes the point. If you invested in natural gas at the beginning of 1999, you're sitting on a plump 150% gain - or more than five times what the S&P 500 Index gained over the same time frame.
Treasuries Snap Two-Day Decline Before Report on Housing Starts
By Wes Goodman
Jan. 19 (Bloomberg) -- Treasuries snapped a two-day loss before a government report that economists said will show housing starts fell in December as the industry that triggered the recession struggles to recover.
The Federal Reserve plans to purchase $6 billion to $8 billion of notes due from July 2013 to December 2014 today as part of its plan to spur the economy. Housing starts dropped 0.9 percent to a 550,000 annual rate, according to the median estimate of economists surveyed by Bloomberg News before the Commerce Department report.
"Keiser Report" Nigel Farage on 'Monster' Eurozone:
Bailout Reinforcing Failure China buying up worthless euro bonds and will ask Europe to pay in Gold
Goldman Sachs shuns the BRICs for Wall Street Goldman Sachs has issued a short-term alert on China and India as inflation rears its ugly head, advising clients to rotate into Wall Street and Old World bourses as a safer bet over coming months.
By Ambrose Evans-Pritchard - Telegraph.co.uk
"We're not as tactically positive on the BRICs as we have been," said Tim Moe, the bank's chief Asia-Pacific strategist, referring to the quartet of Brazil, Russia, India, and China.
"To be frank, we may have held on too long to our overweight position in China last year. We have decided that discretion is the better part of valour and have tactically reduced our weight. Asia is not in the sweet part of the cycle. The longer-term picture of Asia outperforming the US is taking a breather," he said, speaking at a Goldman conference in London.
The CEO and the New Feudalism Typical leader of a top 100 firm makes in three days what average worker must toil a year to earn.
By Murray Dobbin, The Tyee.ca (Canada)
Few developments in our era of savage capitalism are so powerfully symbolic of the new feudalism than the obscene compensation paid out to the new economic elite, the CEOs of the most powerful corporations in the country. The Canadian Centre for Policy Alternatives's Hugh MacKenzie now reminds us yearly of this economic and social sickness by identifying exactly when the average CEO (of the 100 largest firms) has earned as much as the average worker makes in a year (this time around it was by 2:30 p.m. on Jan. 3). The average total compensation for Canada's 100 highest paid CEOs was $6,643,895 in 2009.
The social and political implications of this grotesque overcompensation are more important than the actual dollars. Socially, in terms of class, it represents the ruling elite's deliberate and conscious declaration that they will take as much money as they want out of the system simply because they can. It is the most powerful way that the elite can make clear that they have nothing in common with the rest of us. Their excess compensation has little to do with their value to a firm, their contribution or their ability.
Rising Oil Prices and Municipal Bond Defaults
by Gail Tverberg - OilPrice.com
I have written quite often saying that rising oil prices can be expected to lead to debt defaults. For a while, some of this was hidden through lower oil prices and stimulus programs, but we are now beginning to see problems arise again, this time in the area of municipal bonds. The question is, "Who ends up holding the bag, if major municipal bond defaults take place?"
"Municipal" bonds include bonds issued by states, as well as bonds issued by cities and by many types of smaller entities, such as hospitals and toll roads. To date, everyone has assumed that there is not much risk of default, and even if there is, someone else will handle it. But if one looks at the long term oil situation, and the problems states and cities are having already, it is pretty clear that the debt default problem is likely to get worse over time, and there is really no one set up to handle the default risk.
Home Builders Still Pessimistic
By TOM BARKLEY And JEFFREY SPARSHOTT - WSJ.com
Builders remained pessimistic about the outlook for new home construction in the first month of 2011, despite increasing signs of improvement elsewhere in the economy.
The National Association of Home Builders said Tuesday its housing-market index remained flat at 16 in January. Although companies are adding jobs and economic growth appears to be speeding up, improvement in the construction industry has lagged behind.
The seasonally adjusted index, based on a survey of 420 builders, has held at 16 for three consecutive months. Numbers above 50 mean more builders view conditions as good than as poor. The last time the home builders' confidence gauge was above 50 was April 2006.
Brown Burdens Mayors by Unloading California Deficit on Cities
By Christopher Palmeri
Jan. 18 (Bloomberg) -- San Jose Mayor Chuck Reed can look out his City Hall window and see three Adobe Systems Inc. downtown towers, housing 2,000 workers, created in part with incentives California Governor Jerry Brown wants to eliminate.
The software maker built the towers with the help of $35 million in city redevelopment money, Reed said last week in a telephone interview. He and nine other California mayors plan to meet with Brown, himself mayor of Oakland from 1999 until 2007, to persuade him not to shut the authorities that provide low- cost funds for development. The idea is part of the governor's budget proposal.
California cities race to shield funds from state As Jerry Brown seeks to kill redevelopment agencies, officials move to protect the groups' money. They see a raid by Sacramento, while the state says the funds are needed to protect vital services.
By Jessica Garrison, Los Angeles Times
A revolt by city officials against Gov. Jerry Brown's proposal to abolish municipal redevelopment agencies is rapidly spreading across the state.
Over the last several days, officials in Long Beach, Pasadena, Palm Springs and numerous other cities have hastily called special meetings to discuss transferring billions of dollars from their redevelopment agencies to city control to keep the money out of the state's reach.
The move is an attempted end-run around Brown's proposal to scrap redevelopment and allow school districts, counties and the state to take the billions in property tax dollars the agencies now collect to improve blighted areas. Brown predicted that the move would save the state $1.7 billion in the next fiscal year and send much more money back to school districts and counties in years to come. The redevelopment agencies take in about $5 billion each year.
Deep layoffs to police, firefighters shake Camden, N.J.
USAToday.com
CAMDEN, N.J. (AP) - Firefighters began turning in their helmets and police officers their badges Tuesday as part of deep municipal layoffs hitting Camden, N.J., already one of the nation's most impoverished and crime-ridden cities.
The mayor of Camden said 168 police officers, 67 firefighters and about 100 non-uniformed city employees were laid off Tuesday.
Mayor Dana Redd added that about 100 of the police officers and most of the firefighters could be brought back if their unions agree to concessions.
College Education?: Shocking New Research Proves That Our College Students Are Learning Next To Nothing
EndOfTheAmericanDream.com
Have you ever wondered what all those college students are actually learning? Well, according to one shocking new study, they are apparently not learning much at all. According to very extensive research detailed in a new book entitled "Academically Adrift: Limited Learning on College Campuses", 45 percent of U.S. college students exhibit "no significant gains in learning" after two years in college. For many Americans, a statistic like that comes as a complete shock, but for anyone that has spent much time in or around U.S. colleges lately this should not come as much of a surprise. This new research also found that today's students spend approximately 50% less time studying than U.S. college students did just a few decades ago. What this research shows is what many of us have known for a long time - that the quality of college education in the United States today is a complete and total joke.
Gerald Celente on The Jeff Rense show 13 Jan 2011
When Rising Food and Energy Prices Begin to Wreak Havoc
By Addison Wiggin - The DailyReckoning.com
01/18/11 Baltimore, Maryland - This morning, we see Britain's consumer price index grew in December to an annualized 3.7%. Fuel prices are growing at their fastest pace since July, and food prices are zooming at a rate last seen in May 2009.
Like the US Federal Reserve, the Bank of England has an inflation "sweet spot"of 2%. But Britain's CPI has been above 3% for 13 months now. Unlike in the United States, even the "core" rate of inflation in the UK is rising at an alarming 2.9%.
"If history is any guide," Chris Mayer contends, "inflation will likely get much worse." Everyone seems to know the US inflationary story of the 1970s. The official inflation rate hit nearly 14% by 1980.
Court to decide if California can cut payments to Medi-Cal providers Justices will decide whether to allow the cash-strapped state to reduce what it pays to doctors, hospitals, pharmacies and other providers for medical care for the poor.
By David G. Savage and Shane Goldmacher, Los Angeles Times
Reporting from Washington and Sacramento - The U.S. Supreme Court announced Tuesday that it will decide whether to give California and other cash-strapped states more freedom to cut the amounts they pay doctors, hospitals and other providers of medical care for the poor.
The case could have a major impact on Gov. Jerry Brown's plans to close the state's massive budget deficit.
Federal courts previously blocked about $1 billion in Medi-Cal cutbacks adopted by the Legislature in 2008. Brown has proposed trying those cuts again. His budget plan would reduce the amounts the state pays healthcare providers by 10%, which would reduce the program by $719 million.
Study: 129 million have preexisting conditions
By Amy Goldstein - Washington Post
As many as 129 million Americans under age 65 have medical problems that are red flags for health insurers, according to an analysis that marks the government's first attempt to quantify the number of people at risk of being rejected by insurance companies or paying more for coverage.
The secretary of health and human services is scheduled to release the study on Tuesday, hours before the House plans to begin considering a Republican bill that would repeal the new law to overhaul the health-care system. The report is part of the Obama administration's salesmanship to convince the public of the advantages of the law, which contains insurance protections for people with preexisting medical conditions.
Where are All the Sick People Who Can't Get Insurance?
By Megan McArdle - The Atlantic.com
Approximately 300 million Americans face a serious risk of being killed in an auto accident. Which is to say, there are auto accidents, and the entire population of the country is at risk of being one of the thousands of people every year who are killed on our nation's highways.
That statement is about as useful as a new report from HHS, presumably timed to undercut the GOP as they debate their fruitless attempt to repeal the health care bill. HHS says that millions of people--about half the country, in fact--either has, or has a loved one with, a condition that could cause them to have difficulty securing insurance.
Auto Union Wants to Organize Non-Big-Three Plants
By Ken Thomas, Associated Press - CNSNews.com
Washington (AP) - The future of the United Auto Workers union is directly tied to its ability to sign up workers at U.S. plants owned by foreign-based car companies, the union's leader said Monday.
In a speech to union members, UAW President Bob King laid out in stark terms the importance of the union's work to organize a plant owned by a Japanese, South Korean or German competitor to the Detroit Three. King said the UAW would decide in three months which company it would target but said the organizing plans were critical to the union's outlook.
"If we don't organize these transnationals, I don't think there's a long-term future for the UAW, I really don't," King said in a speech at the union's legislative conference.
U.S. Factories Buck Decline Sector Creating More Jobs Than It's Cutting; 'Shining Star'
By JAMES R. HAGERTY - WSJ.com
U.S. manufacturing, viewed as a lost cause by many Americans, has begun creating more jobs than it eliminates for the first time in more than a decade.
As the economy recovered and big companies began upgrading old factories or building new ones, the number of manufacturing jobs in the U.S. last year grew 1.2%, or 136,000, the first increase since 1997, government data show. That total will grow again this year, according to economists at IHS Global Insight and Moody's Analytics.
Among others, major auto makers - both domestic and transplants - are hiring. Ford Motor Co. announced last week it planned to add 7,000 workers over the next two years.
FCC expected to approve Comcast-NBC deal
By Cecilia Kang - Washington Post
Federal regulators are expected to vote Tuesday to approve Comcast and NBC Universal's joint venture, putting an end to a more than year-long review of a controversial union that will combine the nation's biggest broadband Internet and cable service operator with a television-and-movie powerhouse.
According to sources familiar with the thinking of the Federal Communications Commission, the deal will be approved 4 to 1, with Democratic Commissioner Michael J. Copps dissenting. The senior member of the FCC has consistently expressed concern that the joint venture would harm the public interest as too much control of content goes into the hands of a company that also controls how consumers access the Internet and television.
Ron Paul: Why Government Cannot "Make Us Safe"
by Mandating Security
Obama's Plan to Admit Mexican Trucks
By Phyllis Schlafly - Townhall.com
It is amazing that, with unemployment unacceptably high, the Obama administration has endorsed a plan that will cost U.S. jobs and make highway driving for Americans more dangerous and less pleasant. Barack Obama wants to admit Mexican trucks to drive on all U.S. highways and roads.
Todd Spencer, executive vice president of the Owner-Operator Independent Drivers Association, explained what this means: "U.S. truckers would be forced to forfeit their own economic opportunities, while companies and drivers from Mexico, free from equivalent regulatory burdens, take over their traffic lanes." We wonder if Mexico has any regulatory standards at all.
G.E. to Share Jet Technology With China in New Joint Venture
By DAVID BARBOZA, CHRISTOPHER DREW and STEVE LOHR - LATimes.com
As China strives for leadership in the world's most advanced industries, it sees commercial jetliners - planes that may someday challenge the best from Boeing and Airbus - as a top prize.
And no Western company has been more aggressive in helping China pursue that dream than one of the aviation industry's biggest suppliers of jet engines and airplane technology, General Electric.
On Friday, during the visit of the Chinese president, Hu Jintao, to the United States, G.E. plans to sign a joint-venture agreement in commercial aviation that shows the tricky risk-and-reward calculations American corporations must increasingly make in their pursuit of lucrative markets in China.
Utah city may use blimp as anti-crime spy in the sky
By James Nelson
(Reuters) - A proposed unmanned floating airship surveillance system is being hailed by city officials in Ogden, Utah as one way to fight crime in its neighborhoods.
"We believe it will be a deterrent to crime when it is out and about and will help us solve crimes more quickly when they do occur," Ogden City Mayor Matthew Godfrey told Reuters.
The airship entails military technology now available to local law enforcement, he said.
Record Food Prices Causing Africa Riots Stoking U.S.
By Alan Bjerga and Tony Dreibus
Jan. 18 (Bloomberg) -- The same record food prices causing riots in Algeria and export bans in India are allowing President Barack Obama to combine the biggest-ever U.S. farm exports with the tamest inflation since the 1960s.
Global food costs jumped 25 percent last year to an all- time high in December, according to the United Nations. Countries probably spent at least $1 trillion on imports, with the poorest paying as much as 20 percent more than in 2009, the UN says. In the U.S., the largest exporter, retail food rose 1.5 percent last year and will gain as little as 2 percent in 2011, the Department of Agriculture estimates.
Lindsey Williams:
Insider Source says Food Prices Will Soar
Alex Jones Tv (Sunday Edition) 1/2
Lindsey Williams:
Insider Source says Food Prices Will Soar
Alex Jones Tv (Sunday Edition) 2/2
Nigeria's MEND (militant group) Says It Plans Attack on Oil Industry
By Dulue Mbachu
Jan. 18 (Bloomberg) -- Nigeria's main militant group, the Movement for the Emancipation of the Niger Delta, said it's planning a "ferocious" attack on the country's downstream oil industry soon.
Residents living close to depots that store petroleum products such as aviation fuel, diesel, kerosene, gasoline, propane gas and engine oil should evacuate the areas immediately, the group, known as MEND, said in an e-mailed statement today.
"We cannot guarantee the safety of staff that happen to be in the facility during the attack," spokesman Jomo Gbomo said in the statement. "We will also be targeting transport vehicles that convey petroleum products."
Who Lost the Middle East?
By Patrick J. Buchanan
Uneasy lies the head that wears a crown, especially today in the Maghreb and Middle East.
For the ouster of Tunisia's Zine El Abidine Ben Ali has sent shock waves from Rabat to Riyadh. Autocrats, emirs and kings have to be asking themselves: If rioters can bring down Ben Ali with his ruthless security forces, what prevents this from happening here?
Millions of militant Muslim young who have never shared in the wealth produced by the oil and gas must be asking: If Tunisians can take down a detested regime, why cannot we?
Will Tunisia's unrest have a ripple effect?
By Matt Smith, CNN
(CNN) -- The ouster of Tunisia's longtime ruler has cast a shadow over the surrounding region, but few analysts were willing to predict Tuesday that the revolt would spread to other countries.
Zine El Abidine Ben Ali was Tunisia's president for 23 years before Friday, when weeks of protests forced him into exile in Saudi Arabia. Tunisians complained that the president's family and supporters had grown rich while their living conditions stagnated and their voices were stifled.
But while the governments of nearby nations like Algeria, Libya and Egypt face similar criticism, the level of repression and the concentration of power and corruption were far more extreme in Tunisia, said Nathan Brown, a professor of Middle Eastern politics at George Washington University in Washington.
Big Trouble in Tunisia for America's Mideast Raj
by Eric Margolis - LewRockwell.com
Oops! Something has gone terribly wrong with Washington's plans for regime change in the Mideast. Wasn't there supposed to be a US and British engineered revolution against Iran's mullahs, followed by installation of a cooperative pro-western government and a bonanza for western oil companies?
The revolution came, all right, but in the wrong place. The explosion of popular fury in Tunisia that ousted its dictator of 23-years is sending shock waves across the Arab world and has alarm bells ringing in Washington.
Tunisian Revolution Shakes, Inspires Middle East
By Juan Cole
The Tunisian uprising that overthrew the 23-year-old regime of strongman Zine el-Abidine Ben Ali had resonances throughout the Middle East. Leaders of countries invested in the region's authoritarian and highly unequal status quo rejected the political revolution, while groups and states that want change welcomed it. The spectacle of masses of demonstrators pouring down Bourguiba Avenue on Friday, overwhelming security forces and putting the president to flight, raised the hopes of the dispossessed and the downtrodden, even as it inspired a gathering dread in the breasts of the region's dictators and absolute monarchs. Whether or not, as many observers rushed to predict, a wave of discontent will radiate from Tunis throughout the Arab world (and there are reasons to be cautious about that prospect), the "Jasmine Revolution" is a Rorschach test for distinguishing reactionaries from innovators in the region.
Tunisia Unity Government Fractures
By DAVID D. KIRKPATRICK - NYTimes.com
TUNIS - Five or more ministers from opposition parties resigned from Tunisia's unity government on Tuesday, bowing to a wave of street protests against the cabinet's domination by members of the ousted president's ruling party and putting mounting pressure on his prime minister, Mohammed Ghannouchi, to resign as well.
As the leaders of the established opposition parties renounced the unity government, the revolutionary passions unleashed across the region continued to reverberate, as two more men in Egypt set themselves ablaze on Tuesday and a third was stopped before he could do so. Those self-immolations followed six others, all in apparent imitation of the one that set off the Tunisian uprising a month ago.
Tunisian bank denies gold taken by wife of president
BBCNews.com
The central bank in Tunisia has denied reports that the wife of the deposed president took 1.5 tonnes of gold bars from it before leaving the country.
A spokesman for the bank said Leila Trabelsi "has never set foot here" nor met its governor.
The French newspaper Le Monde said she personally went to the bank to get the gold before her husband, Zine al-Abidine Ben Ali, was toppled.
They are now in Saudi Arabia after fleeing Tunisia.
China Moves Troops Into North Korea
Terrence Aym Salem-News.com
A South Korean official downplayed the report saying that it only permits China to come to North Korea's aid in the event of greater instability.
(CHICAGO) - South Korea's daily newspaper is reporting that what Western analysts have feared has happened: Chinese troops have been deployed into North Korea. The Chinese now have a presence in the rogue state for the first time in more than 15 years.
China has had no military presence in the rogue country since 1994 after it quit the Military Armistice Commission that supervises the Armistice that suspended the Korean war.
Since that time, Pyonyang has stridently announced that it will no longer abide by the agreement. During 2010 the North Korean government officially declared that it is once again in a state of war with South Korea and the U.S.
Niall Ferguson On Whether The Financial Crisis Will Lead To America's Decline And A Glimpse Of The "Post-Pax Americana" Dark Ages
by Tyler Durden - ZeroHedge.com
Two weeks after we presented Niall Ferguson's video lecture - "Empires On The Verge Of Chaos" to tremendous reader response and almost 30,000 views, we follow up with another must watch video presentation, this time highlighting the intellectual rigor of Ferguson, David Gergen and Mort Zuckerman. The topic once again is the Financial Crisis, and specifically how, why and whether it will lead to America's decline. Of particular note is Ferguson's spot on characterization of the primary deficiency in the so-called brains of economists, namely that they see patterns, equilibria and stable systems where there are absolutely none: i.e., in the complex (as in Lorenzian) world of economics: "Complex systems look like they are in equilibrium, but they are not: they are constantly adapting, highly decentralized, interdependent systems and this process of adaptation can continue for quite a long time. And you think to yourself when you look at it, that's in a wonderful equilibrium. That's how we think about the economy. That is how economists teach economics. They talk about it in terms of equilibrium. The bad news is that in fact we inhabit a complex system that has virtually nothing to do with the neoclassical model that you are taught in Econ 101. And that's why the economists failed to predict the financial crisis...
2011 Financial Meltdown Fast Approaching
By James West - GoldSeek.com
Despite the best efforts by the American mainstream financial media, the eager PR division of the United States Dollar Ponzi Scheme, to paint the rosiest of rosy pictures for blindly optimistic readers, the stubborn image of a debt-swollen jobless behemoth economy slowly toppling persists. No matter how much U.S. departmental data is primped, polished, and primed, no amount of lipstick is going to transform this fat pig into a princess.
This week's top harbinger headline points to the fact that the United States is once again bumping its fat head on the ceiling of its spectacularly stratospheric debt ceiling of $14.3 TRILLION dollars. That means an act of congress is once again necessary to lift that limit. The alternative is either a) a revaluation of the U.S. Dollar to reflect the depreciation inherent in Quantitative Sleazing as part of a debt restructuring, or b) default.
Default? Could it be?
High Oil Price = Faster Economic Decline For America
EndOfTheAmericanDream.com
Most Americans have no idea how important oil prices are to the overall health of the U.S. economy. Whenever oil prices have pressed toward record levels in recent decades, it has always resulted in an economic downturn. A high oil price does not just mean that consumers will have to pay a little more at the pump. The truth is that oil is the very lifeblood of our economic system. We have built our entire country around the concept that we can transport lots of stuff very long distances for a very, very cheap price. When that paradigm beings to change, it fundamentally alters the dynamics of the U.S. economy. A high oil price will mean an even faster economic decline for America. The cost of oil factors into everything. A high oil price means that transportation of products and services costs more, travel costs more and energy costs more. It means that consumers will have less disposable income. When the price of oil goes up it benefits the big oil producers and a few others, but for everyone else it is very painful. But perhaps even more importantly, because the U.S. has to import such massive quantities of oil, whenever the price of oil goes up it means that we are becoming poorer as a nation because even more of our money flows out of the country and into the hands of the oil barons.
JPMorgan Chase & Co. CEO Jamie Dimon Issues Warning for Municipal Bond Investors
BY KERRI SHANNON, Associate Editor, Money Morning
JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said he expected more municipal bankruptcies. In doing so, aligned himself with other critics of the muni-bond market, including analyst Meg Whitman and Money Morning's own Martin Hutchinson.
"There have been six or seven municipal bankruptcies already," Dimon said Jan. 10 at JPMorgan's annual healthcare conference. "I think unfortunately you will see more."
Cities like Detroit and Harrisburg, PA have recently raised their prospects for bankruptcy. They're troubles reflect the dire situation of state governments that are dealing with about $140 billion in deficits in the next fiscal year, according to a report from the Center on Budget and Policy Priorities.
Parting Veil of Secrecy Around Hu Jintao
By JASON DEAN
BEIJING - Chinese President Hu Jintao, who arrives in the U.S. on Tuesday, heads one of the world's most powerful countries, but is arguably among the least powerful of the world's major leaders - and almost certainly the least understood.
More than eight years into his tenure, little is known about the 68-year-old lifelong bureaucrat who leads an emerging superpower that is increasingly challenging the U.S. economically, politically and militarily. He functions behind a thick curtain of secrecy, rarely speaking to international media, divulging little in his meetings with other world leaders, and engaging with his own population only in highly stage-managed encounters.
Inflation Won't Drive Yuan Appreciation, China's Hu Tells Papers
By Sandrine Rastello
Jan. 17 (Bloomberg) -- Chinese President Hu Jintao rejected U.S. arguments that allowing the yuan to appreciate against the dollar would help the government in Beijing tame inflation.
Hu, who will meet President Barack Obama in Washington this week, made the comments in responses to written questions from the Wall Street Journal and the Washington Post, the newspapers reported on their websites.
The Chinese president said his government is fighting inflation with a package of policies, including interest rate increases, and that rising prices can "hardly be the main factor in determining the exchange rate policy," according to a transcript of the answers. He said the increase in the cost of living is "on the whole moderate and controllable," according to the transcript.
An Interpretation of the China Silver Short Theory and Fractional Reserve Bullion
JESSE'S CAFÉ AMÉRICAIN
I have had quite a few readers ask for clarifications on this story, Is JPM Covering Up a Naked Silver Short Held by China as a Claim Against the Yanks? The story offers one possible explanation for the overly large and quite possibly undeliverable short position at the Comex.
This is my interpretation of the China silver short theory as expressed by others, but especially the respected analyst Harvey Organ. As you may recall, Harvey was the trader who helped to identify the notable lack of actual bullion in the vaults of Scotia Mocatta, causing a minor scandal. There have also been other claims of a significant leverage or 'fractional reserve selling' in the physical bullion markets, with a circumstantial evidence of a potential 100 to 1 leverage involving unallocated bars and claims of cross ownership of bullion held by some of the large ETFs.
"The Fed No Longer Even Denies that the Purpose of Its Latest Blast of Bond Purchases ... Is To Drive Up Wall Street"
Washington's Blog
The stated purpose of quantitative easing was to drive down interest rates on U.S. treasury bonds.
But as U.S. News and World Reported noted last month:
By now, you've probably heard that the Fed is purchasing $600 billion in treasuries in hopes that it will push interest rates even lower, spur lending, and help jump-start the economy. Two years ago, the Fed set the federal funds rate (the interest rate at which banks lend to each other) to virtually zero, and this second round of quantitative easing--commonly referred to as QE2--is one of the few tools it has left to help boost economic growth. In spite of all this, a funny thing has happened. Treasury yields have actually risen since the Fed's announcement.
The following charts from Doug Short update this trend:
Fed's Plosser Won't Rule Out Rate Rise on Economy
By Randall Woods and Nathan Crooks
Jan. 17 (Bloomberg) -- Federal Reserve Bank of Philadelphia President Charles Plosser said that while unemployment will probably stay too high for the foreseeable future, he hasn't ruled out favoring a rate increase this year should economic growth warrant such a move.
"If economic growth in the United States continues to gain traction and the prospects begin to look ever better, it might be time for us to begin thinking about how do we begin to gradually take our foot off the accelerator," Plosser said today to reporters after a speech in Santiago. Asked if the recovery may improve enough this year that he'd want to begin a policy tightening, he said, "It might. I'm not going to rule that out."
Is the Fed Broke?
by Robert Wenzel - EconomicPolicyJournal.com
Bob McTeer, former President of the Federal Reserve Bank of Dallas, argues that the Federal Reserve has no reason to mark to market its securities holdings:
First, there is no need for the Fed to mark to market since its assets are not held for trading and can easily be held to maturity or recovery if necessary
Curiously, he does not discuss what happens to his theory if it turns out some Fed assets are total junk and worthless. This could very well be the case. The Fed has still not told us all the collateral it loaned money out against during the financial crisis.
Core Inflation Numbers Will Allow the Fed to Stay the Course - For Now
BY DON MILLER, Associate Editor, Money Morning
Even though the cost of living in the United States jumped higher in December, the way the government calculates inflation will give the U.S. Federal Reserve enough cover to maintain its loose money policy.
The consumer price index (CPI) rose 0.5% in December, the largest increase in 18 months, the Labor Department reported Friday. About 80% of the increase was due to an 8.5% rise in the gasoline index, also the sharpest increase in 18 months. Food prices rose by 0.1% in December.
The CPI is the broadest of three monthly price gauges from the Labor Department, because it includes goods and services. Almost 60% of the CPI covers prices consumers pay for services ranging from medical visits to airline fares and movie tickets.
The Outlook for Inflation
The Inflation Trader - SeekingAlpha.com
Retail Sales was softer-than-expected, Industrial Production stronger-than-expected, and CPI a smidge above expectations. More on CPI later.
"Close enough!" cried the equity traders, who subsequently put up prices 0.7% on the day, to 28-month highs in the S&P. Bond traders also felt the balance favored a stronger economy and faster price increases, but moved yields only a few basis points higher with the 10y note to 3.33%. Inflation swaps curiously softened 2-5bps despite the reasonably sunny outlook for carry; some traders and investors feel the inflation market is a bit frothy right now - which it is, but supply is tight and I am not sure I'd be very aggressive about shorting inflation-linked bonds even at these valuations.
Big Retailers Fill More Aisles With Groceries
By STEPHANIE CLIFFORD - NYTimes.com
For dinner tonight, pick up some sushi and salad - at Walgreens. Or maybe some Target chicken.
Reflecting a major shift in the way Americans shop for food, retailers better known for selling clothes or aspirin, including Walgreens, CVS/Pharmacy and Target, are expanding in a big way into the grocery business, with fresh produce, frozen meats and, yes, even sushi.
Target invested $500 million last year alone in a new push on groceries, retrofitting some of its general merchandise stores with full-blown food sections. Sales and traffic at stores with the new grocery areas are about 6 percent higher than at similar stores without them, the company says.
Chinese currency's clout on the rise
LATimes.com
Could Mao take a bite out of the greenback?
That's what economists will be asking as the Chinese yuan builds momentum toward becoming internationalized and a potential rival to the U.S. dollar.
Chinese President Hu Jintao may have heightened those expectations with comments made in a written interview with the Washington Post and Wall Street Journal published Sunday.
"The current international currency system is the product of the past," Hu said before describing the dollar's role as the world's chief currency in terms of trade and finance.
Hu's comments underscore concern in Beijing that as long as the dollar maintains its primacy, China will be beholden to a U.S. monetary policy that benefits the U.S. first.
We'll Soon Know Gold's Intentions
By: Rick Ackerman - GoldSeek.com
Although we see nothing scary in gold's so far 5.5 % fall from early December's record highs, we're monitoring the February Comex contract closely for the first hint that the selloff might be about to turn ugly. At the moment, that would require a drop of a little less than $50, to below 1317.40, without any intervening rallies lasting longer than a day. With the futures trading around 1365 late Sunday night, there is obviously not much margin for comfort, since quick, $50 selloffs are not that unusual with gold currently trading at historical heights.
Gold performs better than US dollar
By Ned W. Schmidt - CommodityOnline.com
As everyone seems to know, and as you have read endlessly in innumerable reports, the Federal Reserve has expanded its balance sheet by more than two trillion dollars. At present is in the process of adding another six hundred billion dollars of assets by monetizing U.S. government debt. At the same time, Obama Regime's deficit has spiraled out of control. Correctly measured, that deficit for the past year was $1.7 trillion.
What have been the consequences of these grand Keynesian schemes? U.S. unemployment is still above 9%, and likely to persist at that level for some time. U.S. housing market remains dysfunctional, and will likely continue to be for the remainder of the year. Most people in the U.S. over 50 will never recoup their investment in their homes.
Has Gold Topped Out? Nope, You Ain't Seen Nothing, Yet!
By: Goldrunner with Lorimer Wilson - GoldSeek.com
A Gold Bull Market is much like a bucking bronco in the Old West - constantly trying to buck investors out of the saddle - as many in the Precious Metals universe are calling an intermediate-term top for Gold. Some are even suggesting that we have seen the final top in this Historic Gold Bull. We have a completely different view maintaining that we are very close to the juncture where Gold starts another rip higher into May or June. Let me explain.
We believe such a significant move will just be one more step up for the developing Gold parabola that we have been following via the 1970's Gold Fractal Chart and will usher in a more parabolic rise on the chart.
Ex Tunisia President's Wife Left with 1.5 Tons of Gold:
By: CNBC.com
The French government suspects that former Tunisian president Zine al-Abidine Ben Ali and his family may have fled the country with 1.5 tons of gold, French daily Le Monde reported Monday.
According to the French secret service, Leila Trabelsi, the wife of the ex-president, went to the Central Bank of Tunisia to fetch the gold bars, the paper reported.
The governor of the bank is reported to have refused to give them to her, so Trabelsi rang her husband who first also refused to help, before giving in, according to Le Monde.
Holy Inflation: Ireland is Printing Euros
by Robert Wenzel - EconomicPolicyJournal.com
One of the most prominent features, sold to the world, aboout the multi-nation euro was that it added discipline to the printing of money, since all nations in the euro-zone would be in on the decision of euro printing via the European Central Bank. Thus adding a drag to rapid printing. Scratch that feature.
Ireland is printing euros entirely on its own. Writes the Telegraph:
The actions of the Irish central bank are authorised by Frankfurt, but fall into a grey area of monetary policy since they appear to involve creation of money outside the normal control of the ECB's governing council.
The details of the Irish money printing are frightening for the future of the euro:
Portuguese Bailout Will Make Euro Crisis Worse
Commentary by Matthew Lynn
Jan. 18 (Bloomberg) -- New year, new crisis. No sooner had Europe's bond traders, politicians and central bankers gotten back to their desks than it was time to begin tussling over the fate of a small economy on the periphery of Europe.
This time around, it's Portugal. And yet the script seems very similar to the one played out already in Greece and Ireland. Bond yields surge. The government denies furiously there is any need for a bailout. French and German leaders rehash some of their lines about the importance of European solidarity. And the guys at the International Monetary Fund and the European Union pack their bags and check flight schedules.
Before you know it, the defiant words have vanished, and the bailout has begun.
The Cuts Are Coming
By Bill Boyarsky - Truthdig.com
"Casino Jack," the movie about crooked lobbyist Jack Abramoff, portrayed anti-tax demagogue Grover Norquist as just another member of the Washington fixer's club. But the filmmakers greatly underestimated him.
Abramoff went off to prison while Norquist, who heads Americans for Tax Reform, has stayed around to twist the arms of legislators in every state in an effort to make them sign no-tax increase pledges. Those pledges, if honored, would result in reductions in already dwindling appropriations for education and social welfare programs and many other needed services in states with huge deficits. "My goal," Norquist famously said, "is to cut government in half in twenty-five years, to get it down to the size where we can drown it in the bathtub."
U.S. Debt Levels Elicit Warnings From Moody's and S&P
Money Morning Staff Reports
Although worries about European sovereign debt continue to top the list of key investor concerns, two major credit-rating firms last week reminded investors that the United States may also have a debt problem.
In a research report on Thursday, Moody's Investors Service said the U.S. government will have to arrest its explosive deficit growth if it's to have any hope of keeping its "Aaa" debt rating. In a separate action that same day, Carol Sirou, the head of Standard & Poor's France, told listeners at a Paris conference that her firm could conceivably lower the outlook for the U.S. debt rating sometime in the future.
Federal Debt Jumped $463.6 Billion In First Quarter of FY 2011--As Government Borrowed an Additional $1,500 Per Person in U.S.
By Terence P. Jeffrey - CNSNews.com
The national debt jumped $463.6 billion in the first quarter of fiscal year 2011 (which ran from Oct. 1 to Dec. 31), the Treasury Department reports.
That means the government borrowed approximately an additional $1,500 for every one of the 308,745,538 men, women and children in the United States as counted by the 2010 Census.
If government debt continues to accumulate at that pace through the remaining three quarters of the fiscal year, total new debt for the year would amount to approximately $1.85 trillion--or about $6,000 for every person in the country.
Camden, N.J., to lose nearly half its cops
By Tami Luhby
NEW YORK (CNNMoney) -- There will be fewer cops patrolling the streets of Camden, N.J., come Tuesday.
Struggling to close a $26.5 million budget gap, the city is laying off 163 police officers, nearly 44% of the force. And Camden will also lose 60 of its 215 firefighters. Some people with desk jobs will be demoted and reassigned to the streets.
The mayor's office says that the cuts will not affect public safety in the city that has the second highest crime rate in the nation, according to a recent study.
"We're still going to protect our residents," said Robert Corrales, spokesman for Mayor Dana Redd. Public safety "will remain our top concern. We'll shift our resources to be more efficient with what we have."
Perpetual War for Perpetual Employment?
by Anthony Wile - LewRockwell.com
Here at the Daily Bell, we remain convinced that America's serial wars have continually deepened that great country's economic crisis. And this gives rise to a peculiar dilemma that we don't usually point out, but which will be the purpose of this article. It may even explain the reluctance of the US to leave Afghanistan and to generally disengage from overseas violence.
This is the issue: "How can the US cease its warring when so many people in that beleaguered country depend on conflict for their employment?" The US unemployment or under-employment rate (the real one) is somewhere between 25 and 30 percent. To reduce or eliminate garrisons in both Iraq and Afghanistan would inject hundreds of thousands of additional individuals into an economy that is struggling to provide employment to available workers. (Not to mention the private-sector "defense" jobs that would be made redundant.) And assuming that the additional workers find jobs; wouldn't they be at substantially lower salaries than their existing military compensations?
*****
Own a business? 6 new tax breaks
By Catherine Clifford
NEW YORK (CNNMoney) -- Doing your taxes stinks, right? No fun at all. But take note as you brace for your 2010 return: A handful of changes in the tax code could translate into a fatter refund check.
The Small Business Jobs Act, passed last September, and the historic health care reform law, passed in March, enacted hefty credits and deductions for capital investments and employee health insurance costs.
Here is a rundown of six new credits and deductions likely to affect the most small business owners.
Health care tax credit:
Health insurance deduction for self employed:
Super-charged 'Section 179' provision:
Bonus depreciation extension:
Depreciation on a business car or truck:
General Business Credit:
Fed President Charles Plosser Says Fed Is Helpless To Reverse Sharp Decline in House Prices
by Tyler Durden - ZeroHedge.com
Philly Fed's Plosser once again releases a slam dunk speech which is the most vocal critique of Ben Bernanke's interpretation of the freedoms afforded to him by monetary policy to date. "How do you use monetary policy to burst a bubble in Las Vegas real estate, where house prices were appreciating at a 45 percent annual rate by the end of 2004, without damaging the Detroit market, where prices were increasing at less than a 3 percent annual rate? Because monetary policy is such a blunt instrument, asking monetary policy to do what it cannot do, such as seeking to deliberately influence the evolution of asset prices, risks creating more instability, not less. Moreover, the moral hazard created by the belief that the central bank would intervene if prices of a certain class of assets became "misaligned" might, in fact, cause more inefficient pricing and more instability, not less... monetary policy cannot reverse the sharp decline in house prices when the economy has significantly over-invested in housing" And more: "I have advocated the elimination of Section 13(3) of the Federal Reserve Act, which allowed the Fed to lend directly to "corporations, partnerships and individuals" under "unusual and exigent circumstances.""
Without aid, DPS may close half of its schools Class sizes also would swell under proposal filed with the state
Jennifer Chambers / The Detroit News
Detroit - Detroit Public Schools would close nearly half of its schools in the next two years, and increase high school class sizes to 62 by the following year, under a deficit-reduction plan filed with the state.
The plan, part of a monthly update Emergency Financial Manager Robert Bobb gives the Department of Education, was filed late Monday to provide insight into Bobb's progress in his attempt to slash a $327 million deficit in the district to zero over the next several years. Under it, the district would slim down from 142 schools now to 72 during 2012-13.
States eye 'sin' taxation as salvation for budgets
By David Eldridge - The Washington Times
It could cost a good deal more to be bad this year.
Cash-strapped state lawmakers across the country are looking at raising "sin" taxes on everything from traditional vices, like smoking cigarettes and imbibing alcohol, to more recently vilified habits like drinking sugary sodas and hitting the tanning salon.
In Mississippi, state Rep. John Mayo, citing the state's place at the top of national obesity ratings, is sponsoring a bill that would add about 25 cents in new taxes to a can of soda.
In New York, state Assemblyman Felix Ortiz, Brooklyn Democrat, wants a new "fat tax," a surcharge on the purchase of sweets and snacks.
A Bankruptcy Law - Not Bailouts - for the States We can see the fiscal crisis coming from miles away. Congress has no excuse not to act.
BY DAVID SKEEL - WSJ.com $$
Last week, Gov. Andrew Cuomo pledged to implement an "emergency" agenda because "the state of New York spends too much money." Governors across the country are making similar promises, but the obstacles to achieving fiscal sustainability in many states are far too deep. To help overcome these obstacles, Congress needs to enact a law that will enable states to declare bankruptcy.
California is first on most lists of troubled states - and for good reason. Thanks to decades of implausibly generous promises to public union employees and other fiscal misdeeds, the state's budget deficit for the next 18 months could exceed $20 billion. According to Stanford University's Center for Economic Policy Research, the state's pension funds are underfunded by more than $500 billion
Unemployment Insurance Debt Payments Loom
by Micah Maidenberg - ProgressIllinois.com
Illinois, like 29 other states around the country, has borrowed from the federal government to make sure unemployment insurance flows to those who lost their jobs during the Great Recession. But now a provision allowing the loans to be made interest free is expiring.
In the wake of the Great Recession and the widespread joblessness it caused, Illinois and 29 other states around the country turned to Washington to ensure that unemployment insurance flowed to the millions of people who had been thrown out of work. In all, the federal government extended more than $40 billion in interest-free loans to bolster state unemployment trust funds. More that $2.4 billion of that sum went to Illinois.
Who's the beneficiary in Quiet Title lawsuits?
Utah awards some homes free & clear, bypassing MERS How accurate are property records?
BY TOM HARVEY - The Salt Lake Tribune
A Utah court case in which the owner of a Draper townhouse got clear title to the property, even though he still owed $132,000 on it, raises new legal and financial questions about a property-records database created by mortgage bankers.
The award of a title free of liens means that whoever owns the promissory note on the Draper property - likely a group of faraway investors - no longer has the right to foreclose to collect on a delinquent loan. Indeed, the townhouse owner has sold the property and kept the money. Those who own the promissory note probably don't even know what occurred.
IS OPINION SHIFTING ON HEALTH CARE?
By John Hinderaker - PowerLineBlog.com
This Associated Press-GfK poll on health care has gotten a great deal of media attention. Here is how the AP characterizes its own findings:
As lawmakers shaken by the shooting of a colleague return to the health care debate, an Associated Press-GfK poll finds raw feelings over President Barack Obama's overhaul have subsided.
Ahead of a vote on repeal in the GOP-led House this week, strong opposition to the law stands at 30 percent, close to the lowest level registered in AP-GfK surveys dating to September 2009.
Health Care and the New Civility
By E.J. Dionne, Jr.
President Obama's call for "a more civil and honest public discourse" will get its first test much sooner than we expected.
Having properly postponed all legislative action last week out of respect for Rep. Gabrielle Giffords and the other victims of the Tucson shootings, the House Republican leadership decided it could abide no further delay in a vote on its "Repealing the Job-Killing Health Care Law Act." And so, as a spokesman for House Majority Leader Eric Cantor explained, "thoughtful consideration of the health care bill" is slated for this week.
It's disappointing that the House did not wait a bit longer before bringing up an issue that has aroused so much division, acrimony and disinformation. After all, their repeal bill has no chance of becoming law. The president would certainly veto it, and the Democratic-led Senate is unlikely to pass it.
Rising Gasoline Prices Put Consumers in Sour Mood
By Reuters.com
Rising gasoline prices beat down U.S. consumer sentiment in early January, overshadowing an improved job outlook and passage of temporary federal tax breaks, a survey released on Friday showed.
A year-end surge in gasoline prices ratcheted up consumer inflation expectations to their highest in more than two years, according to the latest data from Thomson Reuters and the University of Michigan.
The surveys' preliminary January reading on the overall consumer sentiment slipped to 72.7, below 74.5 in December. It fell short of a 75.4 reading predicted by economists polled recently by Reuters.
Cheney: Obama will be a one-term president
By David Jackson, USA TODAY
Former vice president Dick Cheney, back in the public eye after a major heart operation, predicts President Obama will be a one-term president because of health care and other big government programs.
In an interview to air Tuesday on NBC's Today show, Cheney cited Obama's "overall approach to expanding the size of government, expanding the deficit and giving more and more authority and power to the government over the private sector."
As for health care, Cheney said Obama has "enacted a program that a great many people are very worried about. And that there's a lot of support out there for the effort to repeal that health care package."
Jeb to GOP: How to Appeal to Hispanics
By MARY ANASTASIA O'GRADY - Coral Gables, Fla.
If Republicans were to run a classified ad for their 2012 presidential candidate, it might read something like this: GOP seeks popular former two-term governor of a large state for executive post. Qualified applicants will have a demonstrated understanding of the relationship between taxes and growth, a proven record on choice in education, and an ability to draw Hispanic voters. A commitment to states' rights and the U.S. constitution is a must.
Their candidate is out there. But Jeb Bush, Florida's governor from 1999 to 2007, insists that he's not applying for the job. Still, his ideas and style have gained national attention, so I braved the TSA gropers at New York's LaGuardia airport and hopped a flight to South Florida to talk to him.
Apple CEO Steve Jobs Takes Medical Leave
Monday, January 17, 2011
By Jessica Mintz, Associated Press - CNSNews.com
Seattle (AP) - Apple Inc. co-founder and CEO Steve Jobs sent a note Monday to employees saying he's taking a second medical leave of absence in two years so he can focus on his health.
No further information about his current condition was provided. Apple spokesman Steve Dowling would not directly answer questions about Jobs' health or whereabouts, referring only to the text of the brief note.
Jobs said he will continue as CEO and be involved in major decisions but has asked chief operating officer Tim Cook to be responsible for all day-to-day operations.
For Magazines, a Bitter Pill in iPad
By JEREMY W. PETERS - NYTimes.com
The frustration that the country's magazine and newspaper publishers feel toward Apple can sound a lot like a variation on the old relationship gripe, "can't live with 'em, may get left behind without 'em."
Since Apple introduced the iPad last year, publishers have poured millions of dollars into apps in the hopes that the device could revolutionize the industry by changing the way magazines are read and sold to consumers.
Publishing, Without Publishers
By DAVID CARR - NYTimes.com
In the not-so-distant past, a luxury brand like Richemont, the Swiss company that owns Piaget, Dunhill and Montblanc, would have killed for even the slightest attention from Jeremy Langmead, the editor of British Esquire.
Now, he works for them, building a menswear e-commerce site.
Luxury brands have always advertised in the likes of Vogue, Esquire and Architectural Digest and tried to impress their editors enough to get mentioned in the editorial pages, as well. But now companies like Richemont are reaching out directly to consumers - and cutting out the middlemen.
Last year, Richemont acquired control of Net-A-Porter, the 10-year-old online luxury fashion retailer founded by the British magazine editor Natalie Massenet. When it first began, people in the industry sniffed at Net-A-Porter, suggesting it was just a tatty e-commerce site masquerading as digital fashion magazine.
WikiLeaks: the latest developments Whistleblower Rudolf Elmer hands over Swiss bank documents, Dutch media publishes Afghan cables and more of today's WikiLeaks news and views
by Simon Jeffery - guardian.co.uk
Gregg Mitchell at the Nation reports that Norway's Aftenposten, which was leaked a set of the cables, has shared its cache with more media organisations. Die Welt, the German paper, has been named and there are three more to come, a contact at the paper tells him.
The Aftenposten set has also been shared with Politilken in Denmark, Svenska Dagbladet in Sweden and the Dutch broadcaster RTL and newspaper NRC Handelsblad, as mentioned below.
Keen readers may note that Assange has also said he gave the cables to the Dutch broadcaster and newspaper.
East Berlin fights back against the yuppy invaders The German capital is divided once again, as residents of the former east are forced from their homes by gentrification
By Peter Beaumont - The Observer
"How long is now," the giant mural on the side of the Kunsthaus Tacheles in Berlin's Mitte district asks. The answer, it appears, is not very long at all. The former department store, turned prison and then squat and alternative culture centre, appears to be on the verge of shutting down.
"We are expecting to be closed any day," says Yvonne Hildebrandt, a jewellery designer in a studio named Kalerie. After years of legal appeals, she admits, the occupants of the colourful graffiti-covered Tacheles in what was once the Jewish quarter of Berlin have finally run out of road.
Jean-Claude 'Baby Doc' Duvalier returns to Haiti Former dictator welcomed by supporters after flying home following 25 years of exile in France
By Rory Carroll, Latin America correspondent - guardian.co.uk
The former Haiti dictator Jean-Claude "Baby Doc" Duvalier made a shock return to the country last night for the first time since being toppled in 1986.
His return electrified Haiti, which is suffering a political and humanitarian crisis.
The frail-looking 59-year-old arrived in Port-au-Prince on an Air France flight from Paris, ending a quarter of a century exile with Haiti embroiled in a volatile political battle for a new president.
Duvalier, wearing a dark suit and tie, was hugged by supporters who chanted: "Long live Duvalier!"
"I was waiting for this moment for a long time," he said outside the airport. "When I first set foot on the ground, I felt great joy."
Barak's Break With Party Shakes Up Israeli Politics
By ETHAN BRONNER - NYTimes.com
JERUSALEM - Israel's defense minister, Ehud Barak, broke away Monday from the left-leaning Labor Party he had led and formed a smaller, centrist faction that will stay in the governing coalition under a new name. The surprise move shook up Israeli politics but was expected to have little impact on its policies.
Mr. Barak told a news conference that Labor had drifted too far from the mainstream and that he was tired of the pressure to withdraw from the government over the lack of progress on peace. Mr. Barak and four like-minded Labor parliamentarians will remain alongside Prime Minister Benjamin Netanyahu of the hawkish Likud party; the remaining eight Labor dissidents will become part of the opposition.
The Cyberactivists Who Helped Topple a Dictator A group of young Tunisians have helped to organize the protests that deposed a dictator with their activism online.
by Mike Giglio - Newsweek.com
For more than a month, protests have swept across Tunisia. But "Áli," a key organizer, has hardly left his home in a midsize town far away from the capital. In fact, he seldom leaves his desk. In a phone interview, Áli, who asked to remain anonymous for fear of arrest, estimated that he spends at least 18 hours a day in front of his computer running a Facebook page that has become one of the primary sources of information on the protests.
Áli leads SBZ News, a team of 15 cybersavvy activists who have been collecting dispatches, photos, and video from sources throughout the country, posting it on Facebook, and sending updates over Twitter.
Lebanon Government Collapses Ministers resign to force the formation of a new government in Lebanon
Pravda.ru
Hezbollah ministers who were part of the government of Lebanon's Prime Minister Saad al-Hariri resigned, confirmed the state agency in Lebanon. Hezbollah has called on President Michel Suleiman to form a new government. To cause the government collapse, more than a third of the 30 cabinet members were needed. With the resignation of the 11 ministers, President Suleiman will have to form a new cabinet.
Lebanese prime minister Hariri was visiting in the United States when the government collapse took place. He met with President Barack Obama, and then cut his overseas trip short to return home. Background
February 14, 2005, as Prime Minister Rafik Hariri's motorcade slowed down in front of the St. George Hotel in downtown Beirut, a huge explosion of a parked Mitsubishi pick-up truck detonated at 12:56 PM, killing him along with 22 others including his entourage, bodyguards and some passers-by. The resultant explosion was of an unprecedented proportion, well out of the capability of any but a sophisticated, well armed entity with a highly developed intelligence agency/agencies at their disposal.
Mexico losing its war with drug cartels
By: Sara A. Carter - WashingtonExaminer.com
What happens when a country declares war on its deadly illegal drug cartels and loses?
The violent deaths of nearly 35,000 in Mexico in the past four years symbolize a growing crisis for the United States as its southern neighbor is increasingly destabilized by competing drug organizations that have infiltrated every level of government, according to numerous U.S. officials.
President Felipe Calderon's efforts to dismantle the drug gangs since taking office in 2006 has increased the number of grisly killings without diminishing the strength of the various criminal groups so far, experts said. That has placed U.S. security and Mexican security at risk.
Muammar Gaddafi condemns Tunisia uprising Libyan leader claims protesters led astray by WikiLeaks disclosures amid reports of unrest in Libya
Matthew Weaver and agencies - guardian.co.uk
The Libyan leader, Muammar Gaddafi, has condemned the uprising in neighbouring Tunisia amid reports today of unrest on the streets of Libya.
In a speech last night Gaddafi, an ally of the ousted president, Zine al-Abidine Ben Ali, said he was "pained" by the fall of the Tunisian government. He claimed protesters had been led astray by WikiLeaks disclosures detailing the corruption in Ben Ali's family and his repressive regime.
The leaked cables were written by "ambassadors in order to create chaos", Deutsche Press-Agentur reported Gaddafi as saying.
His remarks came as Tunisian politicians hold talks to form a unity government to help maintain a fragile calm two days after violent protests forced Ben Ali from office.
Tunisia Names Unity Government
By DAVID D. KIRKPATRICK - NYTimes.com
TUNIS - Prime Minister Mohamed Ghannouchi announced the makeup of Tunisia's new unity government on Monday, including at least two top ministers from the cabinet of the ousted president, Zine el-Abidine Ben Ali, as demonstrators in the center of the capital called for a wholesale reshuffling of the country's leadership after the four weeks of protests that toppled Mr. Ali.
The interior and foreign ministers would keep their jobs under the agreement negotiated by Mr. Ghannouchi and the interim president, Fouad Mebazaa, both close allies of Mr. Ben Ali's, in meetings with opposition parties on Sunday. On Monday, The Associated Press reported that the ministers of defense and of finance would also remain.
Ike warned of 'military-industrial complex' 50 years ago
By David Jackson, USA TODAY
Today is the 50th anniversary of a very historic White House speech, one that resonates to this day: Dwight Eisenhower's warning against "the military-industrial complex."
"In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex," Ike said that night. "The potential for the disastrous rise of misplaced power exists and will persist."
As a general, Eisenhower led the U.S. to victory in World War II. As president, he presided over an era of unprecedented prosperity, one also shadowed by nuclear weapons, Cold War rivalry with the Soviet Union, civil rights abuses at home, and concerns about America's proper role in the world.
Eisenhower Farewell Address -- Military Industrial Complex
Markets closed for MLK Day on Monday
All financial markets will be closed Monday in observance of Martin Luther King Jr.'s birthday.
Banks also will take a holiday, as will many government offices.
But the majority of U.S. businesses don't observe MLK Day, which has been true since the holiday was established in 1986, according to information research firm BNA.
A survey the firm compiled last fall showed that the percentage of employers who give all or most workers MLK Day as a paid holiday has remained at about 30% for the last five years, though up from 14% in 1986.
Bank failures for week ending January 14th, 2011
By Kenneth Schortgen Jr Examiner.com
The United States experienced one bank failure for the week ending January 14th. This brings the total number of bank failures for 2011 to three institutions.
1/14/2011 *** GA *** Brunswick *** Oglethorpe Bank *** $80.4 million dollars estimated FDIC DIF cost.
For more on the FDIC bank closure lists you can go to the FDIC website and search through their report of failed banks, credit unions, and Trusts.
Do You Need a Chinese Bank Account?
by Brett Arends - WSJ.com
We're perfectly happy eating in a Chinese restaurant. But will we start banking in a Chinese bank?
It's not as crazy as it sounds. As The Wall Street Journal's Lingling Wei reported Wednesday, the Bank of China here in the U.S. has started allowing American customers to open an account and to invest up to $4,000 per day - and a total of $20,000 a year - in Chinese yuan, or renminbi. Until now, you had few options to hold money in yuan, which is a "closed" currency managed, and protected, by Beijing.
The bank has three U.S. branches - two in New York, and one in Los Angeles. You'll have to fill out paperwork to open an account and provide two forms of ID. And there's a minimum deposit of $500.
Guess Hu's coming to dinner? Chinese President Hu goes to Washington
Commentary: China's state capitalism stokes trade tensions
By Craig Stephen
HONG KONG (MarketWatch) - This week's summit meeting in Washington between President Hu Jintao and President Barack Obama will put trade and currency tensions firmly in the spotlight.
While we can expect various trade agreements to be inked, a decade after China joined the World Trade Organization, bilateral trade relations look to be on a collision course.
Indeed, last week U.S. Commerce Secretary Gary Locke described having reached a "turning point" in the U.S.-China economic partnership. The Economist in this week's edition describes relations between the Washington and Beijing as being at a 10-year low. So much for the concession last June, where China ended a two-year de-facto dollar-currency peg - the yuan has appreciated just 3% against the greenback since then.
Yuan Hong Kong Premium Widens as Rules Cap Supply: China Credit
By Bloomberg News
Jan. 17 (Bloomberg) -- The premium investors pay to obtain yuan in Hong Kong's offshore market is widening, after shrinking to zero last month, as the central bank limits supply and demand for the currency to buy renminbi bonds in the city grows.
The yuan traded in Hong Kong at 6.5785 per dollar, 0.2 percent more than the 6.5900 close on Jan. 14 in Shanghai, data compiled by Bloomberg show. The Hong Kong rate was cheaper between Dec. 21 and Dec. 28, after the premium reached a record 2.7 percent on Oct. 19. Hong Kong Monetary Authority rules released on Dec. 23 allow lenders to buy the currency onshore for customers' purchases of goods no longer than three months before the transaction.
U.S. lowers expectations on visit by China's Hu
By Eli Lake - The Washington Times
The Obama administration is lowering expectations ahead of the first state visit of Chinese President Hu Jintao during the Obama presidency.
Secretary of State Hillary Rodham Clinton on Friday rejected what China analysts have called the "G-2," or how the bilateral relationship between the United States and China will sublimate America's relationship with other East Asian powers, such as Japan.
"Today, it is as important as any bilateral relationship in the world, but there is no such thing as a G-2," Mrs. Clinton said in a speech at the State Department. "Both of our countries reject that concept. There are other key actors, allies, institutions and emerging powers who will also work with us to shape regional and global affairs."
U.S.-China Relationship Difficult, Lugar Says Before Hu Visit
By Julie Hirschfeld Davis - Washington Post with Bloomberg
Jan. 15 (Bloomberg) -- U.S. Senator Richard G. Lugar of Indiana, the Foreign Relations Committee's top Republican, said he's concerned China isn't doing enough to control the spread of nuclear material.
Reports that China has failed to prevent its companies from selling sensitive materials to Iran for its nuclear programs are "worrisome," Lugar said in an interview for Bloomberg Television's "Political Capital with Al Hunt," airing this weekend.
"We're coming into a very different kind of relationship, which is more difficult for Americans to encompass," Lugar said, speaking before next week's visit to the U.S. by Chinese President Hu Jintao. "There is another great power there. It's not necessarily an unfriendly power, but it's not one that necessarily is going to reform at our behest."
Hu questions future role of US dollar
By Richard McGregor in Washington - FT.com
China's president Hu Jintao has raised questions on the role of the US dollar in the global monetary system on the eve of a state visit to Washington, saying "the current international currency system is the product of the past".
Mr Hu, who arrives in Washington on Tuesday, also delivered a thinly veiled critique of US monetary policy, underlining China's concern about the impact on its own economy of recent stimulus measures taken by the US Federal Reserve.
Hu Says U.S. Must Respect Sovereignty, Rejects Yuan Argument
By Bloomberg News
Jan. 17 (Bloomberg) -- Chinese President Hu Jintao said greater cooperation with the U.S. on economic and security issues must include recognition of each nation's sovereign rights as he rejected American arguments for yuan appreciation.
Hu, who will arrive in Washington tomorrow for his first state visit to the U.S. since 2006, said the two nations should abandon the "zero-sum Cold War mentality." He cited trade, energy and terrorism as areas for strengthening cooperation, according to a transcript of answers to written questions from the Wall Street Journal and the Washington Post.
Hu Highlights Need for U.S.-China Cooperation, Questions Dollar
By ANDREW BROWNE
BEIJING - Chinese President Hu Jintao emphasized the need for cooperation with the U.S. in areas from new energy to space ahead of his visit to Washington this week, but he called the present U.S. dollar-dominated currency system a "product of the past" and highlighted moves to turn the yuan into a global currency.
"We both stand to gain from a sound China-U.S. relationship, and lose from confrontation," Mr. Hu said in written answers to questions from The Wall Street Journal and the Washington Post.
U.S.-Chinese currency link creates spiral in global food costs
Worldwide commodity inflation looms as a threat
By Patrice Hill - The Washington Times
Loose-money policies in the United States have combined with robust growth in China and other emerging nations in recent months to set off a price spiral in food, energy and other basic goods needed to run the economy.
The trend threatens to pick up speed and become an obstacle for the global economy this year as growth in the United States accelerates to as high as 4 percent and contributes to burgeoning demand for basic goods obtained in global markets.
Hu calls currency system 'product of the past'
AFP - Breitbart.com
China's President Hu Jintao said Sunday the international currency system was "a product of the past," but it would be a long time before the yuan is accepted as an international currency.
Hu's comments, which came ahead of a state visit to Washington on Wednesday, reflected the continuing tensions over the dollar's role as the major reserve currency in the aftermath of the US financial crisis in 2008.
"The current international currency system is the product of the past," Hu said in written answers to questions posed by The Wall Street Journal and the Washington Post.
Chinese President Hu looks for 'common ground' with U.S.
By Keith B. Richburg - Washington Post
BEIJING - Chinese President Hu Jintao, who travels to Washington this week for a state visit after a year marked by disputes and tension with the United States, said the two countries could mutually benefit by finding "common ground" on issues from fighting terrorism and nuclear proliferation to cooperating on clean energy and infrastructure development.
"There is no denying that there are some differences and sensitive issues between us," Hu said in written answers to questions from The Washington Post and The Wall Street Journal. "We both stand to gain from a sound China-U.S. relationship, and lose from confrontation," he said.
America Replicating Japan's Depression
By By: Stephen Lendman - MarketOracle.co.uk
An except from Franck Biancheri's new book titled, "World Crisis: The Path to the World Afterwards" states:"The (current) financial and economic crisis....marks the end of the world order established after 1945." In 1991, the Soviet Union dissolved, and since fall 2007, we've "witness(ed) the accelerated decomposition of the 'Western pillar' with" America advancing disintegration.
After decades "spent living in the myth of an 'ended history' in which" Western ideology was triumphant, "it is almost impossible to imagine 'a world after' " without Washington/Wall Street dominance, "where 'Anglo-American' would not necessarily mean 'modern,' and where the dollar would no longer be king."
Doom And Gloom
TheEconomicCollapseBlog.com
Have you noticed that most Americans seem to know far more about American Idol, Dancing with the Stars, Justin Bieber and their favorite sports teams than they do about world affairs? Most Americans cannot even find Tunisia and Algeria on a map, and if you told them that food riots are happening in those nations right now most of them would not even care anyway. We have become a very self-centered, self-involved and self-absorbed nation. Quite a few people have accused this column of being obsessed with "doom and gloom", but the truth is that the world really is falling apart out there. What are we supposed to do?Ê Are we all supposed to stick our heads in the sand and pretend that everything is going to be okay? Should we all not try to warn others so that they can prepare for what is coming? Until people understand that we are facing absolutely massive problems they are not going to be motivated to take significant action, and hopefully those of us that are proclaiming "doom and gloom" are doing a good enough job of describing what is really going on out there that some people are starting to wake up and actually make changes.
On The Fed's "Stunning" Finding Of Gold As An Inflation Predictor
And The Subsequent Cover Up [Laughter]
Tyler Durden - Zero Hedge
The WSJ has an adorable article titled "The Fed's Laugh Track" in which it has done a word search for "laughter" and come up with some amusing results. Of course it would be far funnier if the WSJ had an article disclosing all the conversation transcripts between Jon Hilsenrath and the various Fed's presidents and executives. We won't hold our breath on that on. We would, however, like to present one of the laugh tracks that the WSJ conveniently decided to drop. Not surprisingly, the topic of that particular transcript disclosure is, well, gold.
U.S. growth agenda must broaden beyond tax cuts
By James Pethokoukis - Reuters.com
U.S. Treasury Secretary Timothy Geithner's meeting with chief financial officers further suggests the White House may push for corporate tax reform. But with unemployment high, President Barack Obama's efforts to boost growth shouldn't stop there. More government investment in research and infrastructure is also warranted.
Trend GDP growth of 3 percent will little improve the nation's dire jobs situation. The broadest measure of unemployment - which includes part-timers who would prefer full-time work - is double pre-recession levels, as is the percentage of the unemployed jobless for 27 weeks or longer. Clearly government must do more to foster long-term growth and job creation while also keeping an eye on the public purse.
Peter Schiff: Washington a parasite to economy
Irish lenders besiege central bank for emergency loans Irish banks are running out of collateral they can use to borrow from the European Central Bank, turning instead for emergency support from their own central bank on an unprecedented scale.
By Ambrose Evans-Pritchard - Telegraph.co.uk
The latest data shows that Anglo Irish Bank and other lenders had borrowed €51bn (£43bn) from the Irish central bank by the end of December, under an obscure progamme listed in the balance sheet as "other assets".
This comes on top of €132bn in loans from the ECB itself, the figure normally tracked by analysts and itself 24pc of all ECB lending.
"This is a horror story: it shows the cataclysmic condition of the Irish banking system," said Tim Congdon from International Monetary Research. "The banks have borrowed €183bn in total, or 110pc of Irish GDP. They have burned through all their capital and a lot of their deposits as well. This is going to end up on the national debt".
German coalition split on increasing EU's bail-out fund Important members of Chancellor Angela Merkel's coalition in Germany are resisting plans for an increase in the EU's bail-out fund to protect Spain from contagion, complicating a crucial meeting of EU finance ministers on Monday.
By Ambrose Evans-Pritchard - Telegraph.co.uk
Guido Westerwelle, the vice-Chancellor and head of the FDP Free Democrats, said there was no justification for last week's call by Brussels for an urgent boost in the size and powers of the €440bn (£371bn) fund.
"Only a small part of the fund has been used, so there is no need to talk about increasing it," he said, adding that any further aid must come on stringent terms.
The FDP's finance spokesman, Otto Solms, said the party's parliamentary group would oppose an expansion of the fund, and warned that it must not become a "bad bank" by purchasing EMU bonds pre-emptively.
Swiss tax whistleblower to give WikiLeaks new data
(Reuters) - A former Swiss private banker who was one of the first whistleblowers to use WikiLeaks by publishing internal bank documents on the site has pledged to hand over new data on offshore bank account holders on Monday, a newspaper said.
Rudolf Elmer, who was fired from Julius Baer in 2002 and who goes on trial in Switzerland on Wednesday for breaching bank secrecy, will hand over more data to WikiLeaks at a news conference in London, Der Sonntag reported on Sunday.
Elmer told the Swiss paper he would hand over two compact discs containing the names and account details of around 2,000 bank clients -- including prominent business people, artists and around 40 politicians -- who have parked their money offshore.
Swiss whistleblower Rudolf Elmer plans to hand over offshore banking secrets of the rich and famous to WikiLeaks He will disclose the details of 'massive potential tax evasion' before he flies home to stand trial over his actions
By Ed Vulliamy - The Observer
The offshore bank account details of 2,000 "high net worth individuals" and corporations - detailing massive potential tax evasion Ð will be handed over to the WikiLeaks organisation in London tomorrow by the most important and boldest whistleblower in Swiss banking history, Rudolf Elmer, two days before he goes on trial in his native Switzerland.
British and American individuals and companies are among the offshore clients whose details will be contained on CDs presented to WikiLeaks at the Frontline Club in London. Those involved include, Elmer tells the Observer, "approximately 40 politicians".
Elmer, who after his press conference will return to Switzerland from exile in Mauritius to face trial, is a former chief operating officer in the Cayman Islands and employee of the powerful Julius Baer bank, which accuses him of stealing the information.
EMU policies are pushing Southern Europe into systemic political crisis Let us assume for the sake of argument that Europe succeeds in containing the immediate EMU debt crisis, with help from Asia, and that Germany's fractious coalition actually agrees to a bail-out fund big enough to make any difference.
By Ambrose Evans-Pritchard - Telegraph.co.uk
What does this achieve, other than allowing banks to buy time by offloading liabilities onto European and Chinese taxpayers?
The 30pc gap in labour competitiveness that has built up between Germany and Club Med since the eurozone currencies were locked together in perpetuity will remain.
Greece, Portugal, Spain, and Ireland will stay trapped in structural depression through this year, and well into next, rotating from a liquidity crisis to a chronic political and social crisis that exposes the inability of elected governments to counter 1930s job wastage. Unemployment is 28pc in Andalucia, and 30pc in Cadiz.
Webster Griffin Tarpley [05-Jan-11] Rense Radio
public is STUCK between Wall Street/Obama democrats and the reactive Republicans/TeaParty, and they won't like it. Middle class is not what it was - independent, small business, etc. but now the white collar who work for large corporations... need another new deal to repair aging American infrastructure.
Feds threaten to sue four states over secret-ballot union laws
By Sam Hananel, Associated Press
WASHINGTON - The National Labor Relations Board on Friday threatened to sue Arizona, South Carolina, South Dakota and Utah over constitutional amendments guaranteeing workers the right to a secret ballot in union elections.
The agency's acting general counsel, Lafe Solomon, said the amendments conflict with federal law, which gives employers the option of recognizing a union if a majority of workers sign cards that support unionizing.
The amendments, approved Nov. 2, have taken effect in South Dakota and Utah, and will do so soon in Arizona and South Carolina.
Corporate tax reform: Talk grows louder
By Jeanne Sahadi - CNN.com
NEW YORK (CNNMoney) -- There's the sweet deal for companies that make Puerto Rican rum. Or the tax break intended to promote U.S. manufacturing but that's so broad it can include the making of hamburgers.
The list goes on. Welcome to the American corporate tax code, which is front and center for a possible overhaul.
On Friday, Treasury Secretary Timothy Geithner will meet with business executives to discuss corporate tax reform. It is expected to be the first of several meetings as the Obama administration decides whether to push the issue this year.
The US won't default, even if the debt ceiling stays
By Felix Salmon - Reuters.com
Greg Ip makes a very important point today, which I haven't seen made anywhere else*: even if the US debt ceiling isn't lifted, that doesn't mean the government will default.
In any given month, the government's income dwarfs its debt-service obligations, which means that the government could simply pay all interest on Treasury bonds out of its cashflow. Greg hasn't run the numbers on principal maturities, but I'm pretty sure that they too could be covered out of cash receipts - and when that happened, of course, the total debt outstanding would go down, and we wouldn't be bumping up against the ceiling any more.
The coming flood of Yuan and Chinese Gold Demand
By: Julian D. W. Phillips - GoldSeek.com
While China is taking a greater portion of our financial attention on a daily basis, it seems to us that the sheer size of China and its continued growth has not been factored into the world economic perspective, even now. One of the consequences of profit driven capitalism in the past was the relocation of manufacturing from high-cost, developed countries to the lower cost country of China. U.S. corporations that did that, have enjoyed better-than-ever profits, but in the process have educated new, Chinese, lower-priced competition that will overwhelm us all in the future. The enrichment of China and its arrival on the world scene will surpass the U.S. as the largest world economy by 2020 at the latest [we would not be surprised if this happened even before 2015]. This will trigger a financial tsunami that will change they way we think and invest.
Strong Indications of Gold & Silver Shortages
By: Adrian Douglas - GoldSeek.com
Since reaching new highs at the end of 2010 gold and silver have been sold off, and the selling has been particularly intense in the last few days. The news on the economy is almost exclusively bullish for the precious metals. From the price action one might be falsely led to believe that investment demand for the precious metals is waning. On the contrary the data analysis I will show in this article reveals strong indications of growing shortages and furthermore that the gold and silver markets are approaching "tipping points" that will lead to an acceleration of price appreciation.
We will first consider silver because the data for silver is the most dramatic.
Why Gold Is Still a Good Investment
By Bill Bonner
01/14/11 Cologne, Germany - Nothing much in yesterday's market news so we turn to a remarkable article that appeared in MONEY magazine, proving that MONEY doesn't know anything about money.
(MONEY Magazine) - Can you tell when a boom has turned into a bubble? One clue: When pop culture starts paying attention. The housing bubble, for example, brought both the TV show Flip This House and a rival on another network, Flip That House.
So if you own a lot of gold, you might regard a recent episode of Saturday Night Live as your first warning. In the opening skit, Bill Hader as China's President Hu Jintao declares that Glenn Beck was right and that "my government should have bought gold. Unfortunately, all our assets were tied up in US Treasury bills."
Jim Rogers: Gold price is not in a bubble
By Debbie Carlson
(Kitco News) - Gold prices are not in a bubble because not everyone is buying yet, but that doesn't mean that prices for the yellow metal can't take a "rest" for a while, said Jim Rogers, noted commodities investor.
Gold prices gained nearly 30% in 2010 and hit record nominal price levels, which has prompted some market observers to warn that the precious metal is in a bubble and could burst, sending prices down sharply.
"When there's a bubble, everybody is buying something and it's going up every day. You cannot say that about gold," Rogers said.
Bad Real Estate News Ignored to Spin Bright Future
By Greg Hunter's USAWatchdog.com
I was shocked to see this headline from an Associated Press story yesterday, "Economists project home sales, construction to rise sharply in 2011 from extreme lows of 2010." I was dumbfounded by the title of the article and even more taken back when I read the story which said, "The forecast delivered at the International Builders' Show in Orlando sees U.S. economic growth sharply lifting home sales and residential construction over the next two years, but from near-historic lows posted last year." The chief economist for the National Association of Home Builders, David Crowe, said, "Single-family home construction, a bellwether for the housing market and the economy, will rise 21 percent to 575,000 this year and climb to 860,000 in 2012."
Fed Officials Saw Housing Bubble, Kept Rate Policy
By Craig Torres
Jan. 14 (Bloomberg) -- Federal Reserve staff and policy makers identified a housing bubble in 2005 and failed to alter a predictable path of interest-rate increases to slow down the expansion of mortgage credit, transcripts from Open Market Committee meetings that year show.
Led by then-Chairman Alan Greenspan, the FOMC raised the benchmark lending rate in quarter-point increments to 4.25 percent from 2.25 percent at the end of December 2004. The committee also removed uncertainty about the pace of rate increases by telegraphing that future moves would be "measured" in every statement.
Home Building, Sales Probably Languished: U.S. Economy Preview
By Shobhana Chandra
Jan. 16 (Bloomberg) -- Homebuilding probably dropped in December and sales of existing houses struggled to rebound from a post-tax credit slump, reflecting a market trying to regain its footing more than a year into the economic recovery, economists said before reports this week.
Builders began work on 550,000 houses at an annual rate, down 0.9 percent from November, according to the median estimate of 61 economists surveyed by Bloomberg News before Commerce Department data Jan 19. Other reports may show purchases of previously owned homes rose for a second month and a gauge of the economic outlook climbed.
States that escaped housing boom due to rebound, report says
By STEVE KERCH
MARKETWATCH SouthCoastToday.com
ORLANDO, Fla. - Housing will rebound moderately in 2011, economists at the International Building Show here are predicting, and should gain even more steam in 2012.
But the recovery in home building and home sales will vary widely from one part of the country to another, with the states that had the most success during the boom times of the past decade being the last to come back from their historic bust, according to an analysis from the Portland Cement Association, a national trade group.
"The headwinds are still facing us in housing. They are less than they were but they are still in place," said Edward Sullivan, chief economist for the PCA, who examined data on mortgage delinquencies, unemployment rates and home-price declines to create a state-by-state recovery prediction.
Big Lenders May Lose With Simpler Mortgage Disclosure
By Carter Dougherty
Jan. 14 (Bloomberg) -- The Consumer Financial Protection Bureau said it will soon begin writing and testing a simplified mortgage-disclosure form aimed at making it easier for borrowers to compare deals from different lenders.
The bureau expects to award a contract to develop the form by the end of the month, making it one of the first projects of the new agency, according to a bidding document given to vendors in November and reviewed by Bloomberg News
Food Riots 2011
TheEconomicCollapseBlog.com
The stunningly violent food riots in Tunisia and Algeria show just how quickly things can change. Just a few months ago, these two northern Africa nations were considered to be very stable, very peaceful and without any major problems. But now protesters are openly squaring off with police in the streets. Many of the protesters are throwing "fire bombs" or are shooting fireworks at the authorities, and the police are responding with a tremendous amount of violence themselves. In Algeria, several protesters have been killed by police and several others have actually set themselves on fire to protest the economic conditions. In Tunisia, more than 100 people have been killed and the president of that country actually had to flee for his life. But on a global scale, food shortages have not even gotten that bad yet. Yes, food prices are starting to go up and food supplies are a little bit tighter right now, but much worse times than these are coming. So what in the world are the cities of the world going to look like when we have a very serious food shortage?
Illinois is No Peter Pan
By Frederick Sheehan - The DailyReckoning.com
01/14/11 North Weymouth, Massachusetts - "I'll never grow up, never grow up, never grow up, Not me!" - Peter Pan, Lyrics from play "I knew Peter Pan and you're no Peter Pan." - Vice-Presidential candidate Lloyd Bentsen, (sort of), 1988
"Top Illinois Democrats have agreed to push a plan that would temporarily boost income taxes by 75 percent and double cigarette taxes," harked CBS Chicago on January 6, 2011. The proposed plan would increase Illinois' personal income tax rate from 3 percent to 5.75 percent for the next three years. After that, it would drop back to 3.25%. So they say.
Illinois is a state in which the legislators have so betrayed the taxpayers that a lifetime on Devil's Island would be too good for them. For instance, the liability of the four state pension plans is calculated at $151 billion or $280 billion, depending on the assumptions used. The $280 billion figure is analytically controversial but deductively compelling given the efforts to deny and confuse bondholders and the public alike respecting the coming collapse of the municipal bond market.
A Bright Idea: Bring Back Incandescents
By Ken Blackwell - Townhall.com
Why is Paris known as the City of Lights ? Is it because the U.S. Congress banned Thomas Edison's incandescent light bulbs, so he had to take his invention offshore?
Well, not actually. Thomas Edison was an honoree at the 1889 Paris Universal Exposition and he did go up in the Eiffel Tower . The Italian government conferred a knighthood at that event on the man who gave the world a brighter idea.
No, Congress in the 1880s would not have been so foolish as to extinguish Edison's light bulb. But the liberal Congress in 2007 was so foolish. They passed (and, regrettably, President George W. Bush signed) the BULB Act. That cutesy acronym stood for the Better Use of Light Bulbs Act. By that act, incandescent light bulbs were to have been phased out by 2014.
The 'new normal' of unemployment Mainstream economists are preaching a decade of pain and historically high joblessness - as if no alternative policy existed
By Dean Baker - guardian.co.uk
The American Economics Association held its annual meeting in Denver last weekend. Most attendees appeared to be in a very forgiving mood. While the economists in Denver recognised the severity of the economic slump hitting the United States and much of the world, there were few who seemed to view this as a serious failure of the economics profession.
The fact that the overwhelming majority of economists in policy positions failed to see the signs of this disaster coming, and supported the policies that brought it on, did not seem to be a major concern for most of the economists at the convention. Instead, they seemed more intent on finding ways in which they could get ordinary workers to accept lower pay and reduced public benefits in the years ahead. This would lead to better outcomes in their models.
Tick, tick, tick: The cost of Obamacare is a time bomb
By: Timothy P. Carney - Washington Examiner
In fighting against Obamacare repeal this week, Democrats portray their health care law as a money saver, claiming Republicans would add to the deficit by abolishing the legislation. But in their franker moments, the bill's authors admit that "reform" could be something of a time bomb that will cause exploding health care costs down the line. One top Senate aide plainly stated last summer, "This is a coverage bill, not a cost reduction bill." The time-bomb nature of Obamacare was presaged by Mitt Romney's health care bill in Massachusetts, which also expanded health insurance coverage by mandating that all individuals buy insurance, prohibiting insurers from dropping customers, and subsidizing the insurance of those with difficulty affording it.
In Massachusetts, these subsidies, mandates and regulations quickly caused health insurance and health care costs to spike, compelling the governor and state legislature to impose cost controls on insurers and providers while raising taxes on the state's residents and business.
Some Vitriolic Rhetoric About Repeal The GOP still needs to repeal Obamacare
By David Catron - The American Spectator.org
It should by now be obvious to the meanest intelligence that the Democrats and their accomplices in the "news" media are deliberately exploiting the murders of six innocent people, and the wounding of a dozen others, for political purposes. Unlike the Tucson shooting itself, the grotesquely opportunistic response of the left was utterly predictable. No one should have been surprised by the spectacle of Democrat officials braying on television about "people in the radio business" or wondering in print if the crime was inspired by "a conservative politician publishing a map with a bullseye." Moreover, the goal of this cynical behavior is all too obvious. Having lost much of the legitimate power they wielded before November 2, the Democrats hope to use this tragedy as a means of gaining psychological sway over the GOP and using that ascendancy to cow the new House majority into compromising on its agenda.
The Super Bowl in Dallas: An Economic Field Goal At Best
By JONATHAN BERR - DailyFinance.com
The Super Bowl may be one of the grandest spectacles in sports, but its ranking as an economic booster for a local economy remains less clear.
A study released last year by the North Texas Super Bowl Host Committee, which is organizing next month's NFL championship game in Dallas, pegs the economic impact at $611 million. Other estimates claim that, at best, a Super Bowl brings in $30 million to $40 million. In fact, Dallas's WFAA TV pointed out last year that the committee's estimate was calculated by Michael Casinelli of Marketing Information Masters, who isn't an economist and who declined to divulge his methods. "He says he used to work with an economist, learned a lot from him, and he said economists don't have much `real world experience,'" the station says. A spokesman for the committee could not be reached for comment.
Fairness Doctrine fight goes on
By KEACH HAGEY - Politico.com
When some liberals called for reining in harsh political rhetoric after the Arizona shootings, Rep. Jim Clyburn (D-S.C.) took it one step further. He called for bringing back the Fairness Doctrine, in what was widely considered an attempt to clamp down on talk radio.
A week later, those calls have abated, and no one is seriously pursuing the idea of returning to the long-defunct policy, which required media on the public airwaves to present both sides of controversial political issues. Not Clyburn, not another Democrat who echoed his call for regulatory remedies, Rep. Louise Slaughter (N.Y.), and not the Federal Communications Commission, whose chairman opposes reinstating the policy.
WEST BANK: Political upheaval in Tunisia spurs Palestinian leaders to issue reassurances on own economy
LATimes.com
The factors that led to the popular upheaval in Tunisia set off alarm bells throughout the Arab world, and the Palestinian Authority was no different.
Palestinian Authority Prime Minister Salam Fayyad spent more than two hours on Sunday talking to 40 Palestinian journalists at his Ramallah office about the economic situation and living conditions in the West Bank and Gaza Strip.
The message he wanted to send to 2.5 million Palestinians in the West Bank and Gaza Strip was that economic conditions were good in spite of reports on the rise in consumer prices and relatively high unemployment and poverty figures.
Tunisian Uprising, Homeland Stupidity
China heads off US questions on human rights On eve of official visit, President Hu Jintao says that the two states should not interfere in each other's domestic agenda
By Ewen MacAskill in Washington - guardian.co.uk
The Chinese president, Hu Jintao, has held out the prospect of a clash with President Barack Obama over human rights when the two meet at the White House on Wednesday.
Hu, in a rare interview with the western media, told the Washington Post that the US and China should respect each other's route to development - code for not interfering in each other's domestic agenda. The White House said last week that Obama would raise the issue of China's poor human rights record at the meeting.
Hu arrives in Washington for the start of a four-day visit to the US on Tuesday. Since Obama became president in January 2009, he has pivoted US foreign policy to make Asia in general and China in particular his main priority.
Price Shocks, Food Shortages And Global Economic Riots In 2011?
EndOfTheAmericanDream.com
People need to wake up - 2011 has just begun and yet we are already seeing significant price shocks and serious food shortages in many areas of the globe. In fact, violent economic riots are now being reported in Algeria, in Chile and in Mozambique. Food shortages and price increases are also causing political unrest in other nations such as India, Bangladesh and Indonesia. This is a very serious situation, and if the major food producing nations of the world do not have another record harvest this year there is very likely going to be an incredibly serious global food crunch. According to the UN's Food and Agricultural Organization, the global price of food hit a new record high in December. The previous record high for food prices was in June 2008, and we all remember what happened during the summer of 2008. Massive food riots erupted in countries such as Cameroon, Haiti and Egypt. So with price shocks and food shortages already being reported all over the globe, will we see even worse global economic riots in 2011?
America's Economic and Social Crisis, No Fed Bailout for Main Street
By: Ellen Brown - MarketOracle.co.uk
The Federal Reserve was set up by bankers for bankers, and it has served them well. Out of the blue, it came up with $12.3 trillion in nearly interest-free credit to bail the banks out of a credit crunch they created. That same credit crisis has plunged state and local governments into insolvency, but the Fed has now delivered its ultimatum: there will be no "quantitative easing" for municipal governments.
On January 7, according to the Wall Street Journal, Federal Reserve Chairman Ben Bernanke announced that the Fed had ruled out a central bank bailout of state and local governments. "We have no expectation or intention to get involved in state and local finance," he said in testimony before the Senate Budget Committee. The states "should not expect loans from the Fed."
Why Democracies Will Always Go Bankrupt
By Gonzalo Lira
When I was growing up, finance was mother's milk to me, especially as I was a bit of a math geek. But for my formal education, I was trained - rather rigorously, and in spite of my laziness - as a philosopher and a historian. This odd combination is why I have such a jaundiced view of economics: I don't find economics particularly intimidating, or even particularly challenging - it's just finance's snooty but poor (and slightly daft) older cousin. History's surprisingly ignorant and blinkered accountant. Philosophy and Math's lightly retarded, Puritanically rigid, and altogether rather embarrassing spawn.
Gerald Celente's Financial Forecast for 2011
Alex Jones Tv 1/3
Gerald Celente's Financial Forecast for 2011
Alex Jones Tv 2/3
Gerald Celente's Financial Forecast for 2011
Alex Jones Tv 3/3
Europe fears motives of Chinese super-creditor The EU authorities fear that China's purpose in buying eurozone debt may be double-edged, intended to push up the euro exchange rate against the yuan and gain advantage for exports.
By Ambrose Evans-Pritchard - Telegraph.co.uk
Herman Van Rompuy, Europe's president, said during a visit to Downing Street that the Chinese may have "political" thoughts in the back of their minds for coming to Europe's help, and gave a strong hint that they are also engaging in currency manipulation.
"When they buy euros, the euro becomes stronger and their currency a little bit weaker. That is not neutral in regard to their competitive position. But I go no further in this topic. It could be too delicate," he said.
Mr Van Rompuy nevertheless welcomed the latest purchases of bonds from the eurozone periphery as a valuable gesture of support. "They invested even in some weak countries, so they are very confident in the solvency of some countries," he said.
China Should Raise Its Currency -- For Its Own Good
by Derek Thompson - The Atlantic.com
China's cheap currency, one of the great boogeymen of international economics, will come roaring back to front pages across the country before next week's summit. But as many smart writers (David Leonhardt and Jim Fallows, to name two) have pointed out, the best argument for raising China's undervalued RMB is not that it will immediately repair out trade imbalance.
The best argument for China to raise its currency is about what's best for China -- and the world.
2011, Another Year of Living Dangerously
By: Brady Willett - MarketOracle.co.uk
If the crisis has a single lesson, it is that the too-big-to-fail problem must be solved" Ben Bernanke. September 2, 1010
"It is unconscionable that the fate of the world economy should be so closely tied to the fortunes of a relatively small number of giant financial firms. If we achieve nothing else in the wake of the crisis, we must ensure that we never again face such a situation." Ben Bernanke. March 20, 2010
Unconscionable or not, the statistics released by the Fed in December speak for themselves: $3.3 trillion (at its peak) in emergency lending to primarily large financial firms. As for Mr. Bernanke's March 2010 epiphany, at the same time he was decrying "too-big-to-fail" the Fed's emergency TAF program was dolling out more than $3.5 billion to U.S. banks and the Fed's emergency TALF scheme was kicking out billions more to numerous LLC's. Remember, these and other activities were taking place when the Fed was supposedly focused on an exit strategy (from unprecedented monetary interventions), and Bernanke was giving a speech entitled "The Economics of Happiness". In this speech Mr. Bernanke claimed, rather prematurely, that with regards to the 1930s, the "lesson has been learned".
Gold price forecast to continue, $1,600 a year-end possibility
By Daniela Cambone
TORONTO (Kitco News) -- Gold will likely suffer a setback in the first few months of the year with prices moving materially higher towards the summer, possibly hitting $1,600 by late 2011, the consultancy GFMS said Thursday in its Gold Survey 2010.
GFMS expects gold to approach $1,500 mid-term and even breach $1,600 by late 2011. Low interest rates, the elevated level of government debts in Europe, the United States and Japan, and the QE2 and its ramifications for the dollar will all play a role in gold's rise, it said. The survey is its latest report on the gold market. Philip Klapwijk, chairman of the independent metals research consultancy unveiled the group's forecast in Toronto.
Seven reasons for gold to hit $1700 or higher this year
Gold specialist analyst Jeff Nichols firmly believes that this year the price will continue to rise to $1700 or higher and eventually reach $3,000 or higher at the next cyclical peak.
Author: Jeffrey Nichols - MineWeb.com
NEW YORK - Gold's steep ascent continued in 2010, finishing the year in New York at $1,420.75. Though just shy of its all-time high of $1,432.50 registered on December 7th, gold nevertheless advanced some 29.5 percent from the prior year's close and scored its tenth consecutive annual increase.
Despite a rocky start - with prices dipping briefly under $1,360 an ounce on January 7th - 2011 promises to be another stellar year as the metal's bullish price drivers continue at full throttle.
Precious metals and the dollar's next big move
CommodityOnline.com
There is a potentially big setup in precious metals sector along with the dollar which looks like it's about to unfold. Since mid-October of last year gold started to show signs of distribution selling.
Only a month later in November silver started warning us that some big players were taking some profits off the table also. Distribution selling is easy to spot on the charts. In short you will see heavy volume selling accompanied with strong moves to the downside.
Now if we look at the US Dollar chart we see the exact opposite price action. We see sharp rallies during October and November of last year. It's normal to say that gold and silver move inverse to the Dollar so this price action makes perfect sense.
Understanding the Federal Reserve Bank
By: EWI - MarketOracle.co.uk
Excerpted from Robert Prechter's February 2004 Elliott Wave Theorist
I am tired of hearing people insist that the Fed can expand credit all it wants. Sometimes an analogy clarifies a subject, so let's try one.
It may sound crazy, but suppose the government were to decide that the health of the nation depends upon producing Jaguar automobiles and providing them to as many people as possible. To facilitate that goal, it begins operating Jaguar plants all over the country, subsidizing production with tax money. To everyone's delight, it offers these luxury cars for sale at 50 percent off the old price. People flock to the showrooms and buy. Later, sales slow down, so the government cuts the price in half again. More people rush in and buy. Sales again slow, so it lowers the price to $900 each. People return to the stores to buy two or three, or half a dozen. Why not? Look how cheap they are! Buyers give Jaguars to their kids and park an extra one on the lawn. Finally, the country is awash in Jaguars. Alas, sales slow again, and the government panics. It must move more Jaguars, or, according to its theory -- ironically now made fact -- the economy will recede. People are working three days a week just to pay their taxes so the government can keep producing more Jaguars. If Jaguars stop moving, the economy will stop. So the government begins giving Jaguars away. A few more cars move out of the showrooms, but then it ends. Nobody wants any more Jaguars. They don't care if they're free. They can't find a use for them. Production of Jaguars ceases. It takes years to work through the overhanging supply of Jaguars. Tax collections collapse, the factories close, and unemployment soars. The economy is wrecked. People can't afford to buy gasoline, so many of the Jaguars rust away to worthlessness. The number of Jaguars -- at best -- returns to the level it was before the program began.
SEC Probes Banks, Buyout Shops Over Dealings With Sovereign Funds
By DIONNE SEARCEY And RANDALL SMITH - WSJ.com
The Securities and Exchange Commission is investigating whether banks and private-equity firms violated bribery laws in their dealings with sovereign-wealth funds, according to people familiar with the matter.
The SEC has sent letters of inquiry to banks such as Citigroup Inc. as well as private-equity firms including Blackstone Group LP, the people said. The letters are said to have been sent to as many as 10 firms in the past week, one person said.
Though the letters didn't contain specific allegations of bribery, they requested that firms retain documents and asked about the firms' dealings with sovereign-wealth funds, the people said. One person familiar with a firm that received a letter said it was brief, indicating the investigation was at the early stages.
Keiser Report: Schizo-Psycho-Bermuda-flation
Don't Bank on Hedge-Fund Gold Rush
By HESTER PLUMRIDGE
One sign the financial world may be returning to normal: Hedge-fund start-ups in 2010 reached the highest level since the boom, with 715 new funds launched in the first nine months of the year, according to Hedge Fund Research. Former Goldman Sachs proprietary trader Pierre-Henri Flamand has raised $1.2 billion for new firm Edoma Capital; his former Goldman colleague Morgan Sze hopes to raise a similar amount for a new Asian fund. And Morgan Stanley plans to spin out its proprietary trading desk as a stand-alone firm.
Loonie Declines as U.S. Jobs Report Damps North American Outlook
By Allison Bennett
Jan. 13 (Bloomberg) -- Canada's dollar declined against all its most-traded counterparts except the Mexican peso as a report showing an increase in U.S. initial jobless claims damped growth expectations for North America.
The loonie, as the currency is nicknamed, fell for the first time in five days against the dollar as crude oil slumped after the Canadian currency touched a 2 1/2-year high yesterday. Canada's recession may have lasted only seven months, according to a report from Statistics Canada released today.
"It does look like some of the froth is coming off the Canadian dollar," said Shaun Osborne, chief currency strategist at Toronto-Dominion Bank. "The Canadian dollar tends to do better with stronger U.S. data and underperform when the U.S. numbers disappoint."
Global Risk and Reward in 2011
Nouriel Roubini - Project-Syndicate.org
NEW YORK - The outlook for the global economy in 2011 is, partly, for a persistence of the trends established in 2010. These are: an anemic, below-trend, U-shaped recovery in advanced economies, as firms and households continue to repair their balance sheets; a stronger, V-shaped recovery in emerging-market countries, owing to stronger macroeconomic, financial, and policy fundamentals. That adds up to close to 4% annual growth for the global economy, with advanced economies growing at around 2% and emerging-market countries growing at about 6%.
U.S.-Chinese currency link creates spiral in global food costs Worldwide commodity inflation looms as a threat
By Patrice Hill - The Washington Times
Loose-money policies in the United States have combined with robust growth in China and other emerging nations in recent months to set off a price spiral in food, energy and other basic goods needed to run the economy.
The trend threatens to pick up speed and become an obstacle for the global economy this year as growth in the United States accelerates to as high as 4 percent and contributes to burgeoning demand for basic goods obtained in global markets.
SAVING INVESTMENTS, SOVEREIGNTY, & FREEDOM
Submitted by Deepcaster FinancialSense.com
"The Conservative (Canadian - ed.) government is set to announce a landmark security and trade deal with the United States, designed to create a perimeter around North America and allow people and goods to flow more freely across the border...
The U.S. announced a similar deal with Mexico in March. It included moves to expedite travel and commerce such as secure transit lanes for pre-cleared rail and truck shipments, as well as passenger pre-clearance for individuals...
The U.S. and Canada have taken piecemeal steps to coordinate their efforts against common threats like terrorism. Last year, Canada signed on to the NEXUS membership card and Free and Secure Trade (FAST) trusted traveller programs as a valid means of identification at the border. However, more sweeping agreements have foundered in the past, notably the Security and Prosperity Partnership agreement signed in 2005 by former Prime Minister Paul Martin, ex-U.S. President George W. Bush and former Mexican President Vicente Fox."
Don't Buy Government Bonds
Mises Daily: by Frank Chodorov
In 1800, the United States Treasury owed $83 million. The population was then three million. Every baby born that year was loaded down with a debt burden of about $28; if the interest rate was 6 percent, the newborn citizen could look forward to paying a service charge on the national debt of $1.68 per year. Today the debt load of the nation comes to well over $290 billion, and the population is, in round figures, 180 million. Thus, while the population has increased by 60 times, the national debt has increased by 3,600 times; and figuring the interest rate at 4 percent, the cost of handling this debt is, roughly, $68 per citizen per year. The child is now loaded down at birth with a debt load of $1,700. These figures might be adjusted to the increased production per citizen, and to the decreased value of the dollar. Even so, the fact sticks out that posterity does not pay off anything of the national debt, that each administration adds to the debt left to it, and that the promise of liquidation implied in every bond issue is a false promise.
U.S. Economy: Trade Deficit Unexpectedly Decreases
By Bob Willis
Jan. 13 (Bloomberg) -- The U.S. trade deficit unexpectedly shrank in November as growing global demand and a weaker dollar help boost overseas sales of everything from aircraft to cotton.
The gap shrank 0.3 percent to $38.3 billion, the smallest in 10 months, as exports climbed to the highest level in more than two years, according to data today from the Commerce Department in Washington. Other reports showed increases in claims for jobless benefits and wholesale prices.
Bernanke Says Higher Interest Rates Reflect Economy
By Scott Lanman and Joshua Zumbrun
Jan. 13 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke said increased interest rates since the central bank expanded record monetary stimulus reflect an improved economic outlook, not a failure in the Fed's program of buying bonds.
"Interest rates are higher, but I think that's mostly because the news is better," Bernanke said today at a forum in Arlington, Virginia, hosted by the Federal Deposit Insurance Corp. "It's responding to a stronger economy and better expectations. So I think that the policy has helped."
Yields on 10-year Treasuries have risen to 3.3 percent today from 2.57 percent on Nov. 3, when the Fed approved buying $600 billion of Treasuries in a move criticized by Republican lawmakers and some foreign governments. Bernanke said he's more optimistic for a pickup in U.S. growth this year that may boost credit to small businesses, as well as their sales.
Uncle Sam Wants His AAA Rating
By GRAHAM BOWLEY - NYTimes.com
Is Wall Street listening to the Tea Party?
Two major credit ratings agencies warned Thursday that the United States might tarnish its triple-A credit rating if its national debt kept growing.
It was not the first time the agencies, Standard & Poor's and Moody's Investors Service, warned that the nation's gilt-edged rating might fall into jeopardy.
But the two statements, made within hours of each other, were seized on by deficit hawks as further evidence that the government must reduce spending and debt to avert disaster. That is just what many Tea Party supporters insist.
But many economists say the reckoning, if it comes, is still years or even decades away.
The Growing Fiscal Disparity Between Insiders and Outsiders
By Bill Bonner - DailyReckoning.com
01/13/11 Paris, France - To the barricades!
Today, we continue to explore our new idea. Alert readers have already figured out that it is not a completely new idea. The ancient Greeks toyed with it too. Really new ideas are extremely rare.
In our modern version, it might be called the General Theory of Decadence or the Cycles of Growth and Decline, or more playfully, the Unified Zombie Theory.
Life goes on. Material progress accumulates. The story of human life on earth grows longer, and more interesting. We see no end to it. But each component part comes to an end. Each life, each economy, each company, each society and each civilization still shrivels, corrodes, and exterminates itself. The past must become history so that the future may become the present.
New Hit to Strapped States
Borrowing Costs Up as Bond Flops; Refinancing Crunch Nears
By MICHAEL CORKERY And IANTHE JEANNE DUGAN - WSJ.com
With the market for municipal bonds tumbling, cities, hospitals, schools and other public borrowers are scrambling to refinance tens of billions of dollars of debt this year, another sign that the once-safe market is under duress.
The muni bond market was hit with the latest wave of bad news Thursday, prompting a selloff that sent the market to its lowest level since the financial crisis. A New Jersey agency was forced to cut the size of a bond issue by about 40% because of mediocre demand, and pay a higher rate than expected. And mutual fund giant Vanguard Group shelved plans for three new muni bond funds, citing market turmoil.
Federal Reserve Chairman Ben Bernanke on Friday ruled out a central bank bailout of state and local governments strapped with big municipal debt burdens, saying the Fed had limited legal authority to help and little will to use that authority.
"We have no expectation or intention to get involved in state and local finance," Mr. Bernanke said in testimony before the Senate Budget Committee. The states, he said later, "should not expect loans from the Fed."
Congress has also discontinued the Build American Bond program, which was significant in temporarily financing California and other states' budgets. See this, this, this and this.
That's unfortunate, given that many states and big cities are in a dire financial situation, and given that Keynesian economists say that aid to the states is one of the best forms of stimulus.
Mess in Illinois Only the Beginning of States' Budget Woes
By Joseph Schuman - AOLNews.com
When Illinois legislators voted this week to raise state income taxes by 66 percent, they weren't sending a signal of tax-and-spend. It was tax-and-survive.
The millions of job losses, real-estate market implosion and relentless economic malaise wrought by the 2008-09 recession left Illinois' and other states' treasuries barren and their budgets deep in the red.
Budget shortfalls are expected to be bad again this year and next, leaving state governments around the country with no choice but to painfully cut social services, education funds and other spending, or raise taxes, or in most cases both.
"The wolf is at the door," Illinois state Rep. Greg Harris, a Chicago Democrat, said early Wednesday as the House approved a tax increase that was seconded by the state Senate hours later and that Gov. Pat Quinn promised to soon sign into law.
Auditors See Rising Defaults in Rural Loans
By WILLIAM NEUMAN - NYTimes.com
Seeking to buoy a strained rural economy in the midst of the recession, Congress ordered up a huge increase in federal mortgage guarantees for small-town home buyers as part of the 2009 economic stimulus package.
The response from lenders was immediate. The value of federally backed rural home loans soared to $16.2 billion in fiscal 2009, up from just $3.7 billion two years earlier. Last year, the guarantees reached nearly $16.8 billion.
Now, a newly released audit has found that the rural loan program, administered by the United States Department of Agriculture, was plagued by lax government oversight and many of the same sloppy banking practices that fed the broader mortgage debacle.
More banks walking away from homes, adding to housing crisis Research shows 1,896 red flag homes in Chicago appear to have been abandoned during foreclosure process
By Mary Ellen Podmolik, Chicago Tribune reporter
A new type of property is adding to neighborhood blight: the bank walkaway.
Research to be released Thursday, the first of its kind locally, identifies 1,896 "red flag" homes in Chicago - most of them are in distressed African-American neighborhoods - that appear to have been abandoned by mortgage servicers during the foreclosure process, the Woodstock Institute found.
Abandoned foreclosures are increasing as mortgage investors determine that, at sale, they can't recoup the costs of foreclosing, securing, maintaining and marketing a home, and they sometimes aren't completing foreclosure actions. The property, by then usually vacant, becomes another eyesore in limbo along blocks where faded signs still announce block clubs.
Why 2011 Won't be Much Better for the Housing Market
By Addison Wiggin - DailyReckoning.com
01/13/11 Baltimore, Maryland - Home prices have now fallen farther from their peak than happened during the Great Depression.
Sorting through the news this morning, we detect a common thread: IOUs gone bad and the inevitable response - a search for tangible wealth.
Since 2006, the average home price has fallen 26%, according to Zillow.com. ThatÕs a greater percentage than the 25.9% drop registered from the plunge that helped kick off the Great Depression from 1928-1933.
And for the record, home prices have now fallen for 53 straight months. They fell 0.78% in November, the fastest pace since February 2009.
Home Foreclosures Top 1 Million for First Time in 2010
Reuters - CNBC.com
Banks seized more than a million U.S. homes in one year for the first time last year, despite a slowdown in the last few months as questions around foreclosure processing arose, a leading firm said Thursday.
Banks foreclosed on 69,847 properties in December, bringing the year's total to 1.05 million, topping the prior record of 918,000 homes seized in 2009, real estate data firm RealtyTrac said.
The number of foreclosure filings, which includes default notices, auctions and repossessions, was a record 2.9 million last year, including 257,747 filings in December.
Banks repossessed million homes in 2010
By Janna Herron - Associated Press - WashingtonTimes.com
NEW YORK (AP) - The bleakest year in foreclosure crisis has only just begun.
Lenders are poised to take back more homes this year than any other since the U.S. housing meltdown began in 2006. About 5 million borrowers are at least two months behind on their mortgages and more will miss payments as they struggle with job losses and loans worth more than their home's value, industry analysts forecast.
"2011 is going to be the peak," said Rick Sharga, a senior vice president at foreclosure tracker RealtyTrac Inc.
JP Morgan Told Judge To Stop Paying Mortgage To Become Eligible For Loan Modification
by Tyler Durden - ZeroHedge.com
In the latest stunner of disclosure in what goes on just below the murky surface of the biggest scam market in the world (that would be the multi-trillion residential debt market), we learn that a Cuyahoga County Juvenile Court judge, Peter Sikora, who is facing foreclosure on his million dollar (8 room) home. But that is not what makes him unique: after all the story of your average American who buys iPads and garter belts with money that should be going into mortgage payments is all too well known by now. What is amazing, however, is that the reason for his 12 month delinquency is that according to JP Morgan, who service the loan, the only way Sikora would be eligible for loan modification would be if he were in delinquency, which is what they advised him to do. That's right - a bank formally told a client to willfully default on a mortgage. Now obviously no institution in its right mind would ever tell a counterparty to stop paying it for a service it is providing. Which begs the question: how is it that there is an opportunity cost for JP Morgan that is lower than a person paying a set mortgage, which involves both the cessation of payments and the lowering of payment rates. If there is any smoking gun that JP Morgan makes up for mortgage delinquency shortfalls by dipping in the GSE piggy bank of infinite taxpayer capital, this is it.
Foreclosure Filings in U.S. May Jump 20% This Year
By Dan Levy and Prashant Gopal
Jan. 13 (Bloomberg) -- The number of U.S. homes receiving a foreclosure filing will climb about 20 percent in 2011, reaching a peak for the housing crisis, as unemployment remains high and banks resume seizures after a slowdown, RealtyTrac Inc. said.
"We will peak in foreclosures and probably bottom out in pricing, and that's what we need to do in order to begin the recovery," Rick Sharga, RealtyTrac's senior vice president, said in an interview at Bloomberg headquarters in New York. "But it's probably not going to feel good in the process."
Rep. Alan Grayson - You Own the Red Roof Inn
Disappointing jobless claims point to patchy US recovery The number of US citizens claiming unemployment benefit has suffered its biggest upwards surge in six months, officials said, adding to disappointing data on America's recovery.
By Emma Rowley - Telegraph.co.uk
The number of Americans claiming first-time benefits last week rose to 445,000 from the previous week's 410,000, against forecasts for a fall.
The total number of people on benefits across the US rose to 9.2m from 8.8m.
Recent monthly data also failed to meet expectations as a drop in the unemployment rate to 9.4pc was attributed to large numbers of people giving up the search for work, indicating that the jobs market is still in the doldrums.
The US is pursuing massive stimulus measures to encourage growth and create jobs, so the latest weekly data came as a blow.
5 worst states for rising unemployment
They may not be the states with the highest jobless rates, but they are the ones where unemployment rose the most in the past year. Here's how they managed to move backwards when so many others moved ahead.
The biggest losers
For about 15 million unemployed workers, it's a tough slog out there. But just how bad is the job market? The answers are complex and it varies depending where you live.
JP Morgan CEO Jamie Dimon said earlier this week that he can't see "anything that is worse than it was a year ago." But in some states, the unemployment rate was higher at the end of 2010 than it was 12 months earlier. This happened even in states where the jobless rate has sustained lower levels than the national rate of more than 9%.
Elderly Reverse Mortgage Borrowers Facing Eviction
HousingDoom.com
I have come out against reverse mortgages on several occasions. I don't like the way they are marketed and have felt they were potentially dangerous to borrowers. According to a recent U.S. News and World Report article, my fears are justified. [Thanks L!]
The government is moving to head off a growing problem with its reverse mortgage program. Large numbers of elderly borrowers - perhaps thousands - face possible evictions from their homes because they've stopped making property tax and home insurance payments. While homeowners with reverse mortgages are freed from mortgage payments after taking out the loans, they remain liable for property tax, home insurance, and maintenance expenses. Failure to make these payments can trigger foreclosure and possible eviction.
House GOP to resume health-care repeal effort, but with more civil tone
By Shailagh Murrayand Paul Kane - Washington Post
House Republican leaders said Thursday that they will begin their effort to repeal the new health-care law next week, a return to normal legislative business after the shootings in Arizona suspended activity on Capitol Hill.
But no one quite knows what normal will look like, following a wrenching week in which members confronted concerns about their own safety and whether their heated rhetoric played any role in last Saturday's shooting of Rep. Gabrielle Giffords (D-Ariz.) and 18 others.
Seniors May Have to Pay for Medicare Home Health
By THE ASSOCIATED PRESS - NYTimes.com
WASHINGTON (AP) - Medicare recipients could see a sizable new out-of-pocket charge for home health visits if Congress follows through on a recommendation issued Thursday by its own advisory panel.
Until now, home health visits from nurses and other providers have been free of charge to patients. But the Medicare Payment Advisory Commission says a copayment is needed to discourage overuse of a service whose cost to taxpayers is nearing $20 billion a year amid concerns that fraudsters are also taking advantage.
Health Insurers Feel Heat in California
By AVERY JOHNSON - WSJ.com
California is once again a hot spot in the battle over the rising cost of health insurance.
Just 72 hours into his new job, the state's insurance commissioner, Dave Jones, started challenging insurance companies that are raising prices on individual policies. On Jan. 6, he called on Blue Shield of California to delay premium increases of up to 59%. This week, he asked Aetna Inc. and units of WellPoint Inc. and UnitedHealth Group Inc. to postpone their price jumps as he reviews them.
The issue has attracted national attention, and Health and Human Services Secretary Kathleen Sebelius has pledged to "stand ready to assist [Mr. Jones] and the people of California in any way that we can."
Commerce Secretary Gary Locke asks China to open its economy,
heed intellectual property laws
By Michael Birnbaum - Washington Post
Commerce Secretary Gary Locke on Thursday called for China to make its economy more open to international investment and to respect intellectual property laws, on the same day his department released November figures that showed an unexpected narrowing of the U.S. trade deficit.
Locke praised China for its growth and increasing openness over the past 20 years, but he said its old policies of protecting domestic industries would no longer suffice.
"The gross trade imbalances between our countries. . . threaten global stability and prosperity," Locke said.
Tunisia riots: Reform or be overthrown,
US tells Arab states amid fresh riots Riots by youths protesting against Tunisia's 50-year dictatorship clashed with police in the country's capital as the United States warned its Middle Eastern allies to reform or be overthrown.
By Richard Spencer - Telegraph.co.uk
Police in Tunis opened fire and shot tear gas in the air as stone-throwing youths breached a curfew and surrounded government buildings.
At least three people were reportedly killed, bringing to more than 60 the number said by human rights groups to have died in a wave of unrest in what was previously seen as one of the Arab world's most stable and prosperous countries.
Four more people had already been shot and killed in Tunis's suburbs on Wednesday night.
Clinton says Mideast faces disaster without reform
By Matthew Lee - Associated Press - WashingtonTimes.com
DOHA, Qatar (AP) - Secretary of State Hillary Rodham Clinton on Thursday delivered a stark warning to Arab leaders that they will face growing unrest, extremism and even rebellion unless they quickly address depleting oil and water reserves and enact real economic and political reform.
Wrapping up a four-nation tour of U.S. allies in the Persian Gulf with unusually blunt remarks to a regional development conference in the Qatari capital of Doha, Mrs. Clinton said economic and political space must be opened up for the Arab world's exploding youth population, women and minorities.
Mideast threats that can't be ignored
By Jackson Diehl - WashingtonPost.com
Barack Obama has been fortunate in the Middle East so far. Yes, his attempt to revive the Israeli-Palestinian peace process has been a high-profile failure. But Israel, the Palestinians and the region as a whole have enjoyed a remarkable stretch of relative tranquility and stability during the past two years.
This week has brought signs that that luck may be about to change. If it does, it will not be because Israelis and Palestinians have not agreed on a two-state solution. Rather, it will be because the regional troubles that the Obama administration has ignored in its preoccupation with the peace process can no longer be contained.
Remembering American as it used to be
By Jon Christian Ryter
I can honestly say I no longer live in the country where I was born. I was born in the United States of America. Today, I live in the United States of America. The street names look the same as they did when I was a child. And so does the mighty river called the Mississippi that chops the eastern third of the nation from rest of America from a rocky creek in Itasca, Minnesota to the Gulf of Mexico like a knife separating the social progressive liberal union States in the East from Middle America where old-fashioned values have not yet been corrupted by Machiavellian, greedy opportunists who sold their souls and sold out their country to those who are determined to destroy the island of liberty to make sure that those trying to escape tyranny had no place to flee. When there is no hope, it is easier to shackle humanity to the yoke of servitude. When there are no inalienable, God-given rights, then all rights are owned by the masters of the universe who will then possess the power to dole them out to the obedient human chattel and deny them to those deemed not loyal to the New World Order.
LONG SHADOWS CAST OVER US ECONOMY
Submitted by Jim Willie - FinancialSense.com
Numerous are the threats to the US Economy and US financial structures. Many are hidden threats, subtle challenges to undermine increasingly fragile support systems, planks, and cables that hold the system together. The year 2011 will be when the system breaks in open visible fashion, when the explanations that justify it sound silly and baseless, when the entire bond world endures major crashes. All thing financial are inter-related. Recall that in summer 2007, the professor occupying the US Federal Reserve claimed the subprime mortgage crisis was isolated. The Jackass countered with a claim that the bond market was suffering a crisis in absolute terms, where all bond markets were on the verge of fracture, perhaps globally. In year 2008 the banking system in the Western world broke, fatally and irreparably in my view. In 2009, the solutions, the treatment, the official programs were all exaggerated for their effectiveness while banker welfare became a fixture. Neglect of the people on Main Street became policy. In 2010, the system revealed it is still broken. The global monetary system after all rests atop the sovereign bond market. This year, it must fight off a collapse. Many are the hidden points of vulnerability. Gold & Silver will continue to be the great beneficiaries.
Trust is a must for superpower summit
By Francesco Sisci - Asia Times
BEIJING - While the world's number one and number two economic powers, the United States and China, meet in Washington on January 18, the rest of the world will be watching intently over a summit that will impact everybody. As many analysts [1] have pointed out, the success of American-led globalization has redefined the centers of power and wealth.
The relative weight of old economic centers such as Europe, Japan and United States is relatively declining as new ones, collectively called emerging markets, are taking center stage in the global economy. Besides China, countries like India, Brazil, South Africa and even Saudi Arabia are gaining influence. Their collective gross domestic product (GDP) could, in just as little as 10 years, surpass the percentage of global GDP produced by the US, once the only the superpower on the planet.
Geithner Urges New Start for U.S.-China Relations
By SEWELL CHAN - NYTimes.com
WASHINGTON - Treasury Secretary Timothy F. Geithner on Wednesday suggested a fresh start in relations between the United States and China, aimed at mutually beneficial economic growth.
In a speech at Johns Hopkins University, one week before the state visit of China's president, Hu Jintao, Mr. Geithner said the two countries would benefit by being more than rivals.
"We have a great deal invested in each other's success," Mr. Geithner said.
His main points - that China should reduce the government's control of the economy, lower barriers to imports from the United States, crack down on the pilfering of American technology and stop holding down the value of its currency - were nothing new.
US Treasury Secretary Tim Geithner calls on China to strengthen yuan
US Treasury Secretary Tim Geithner has gone on the offensive over China's attempts to devalue its currency.
Telegraph.co.uk
Ahead of next week's visit to Washington by Hu Jintao, China's president, Mr Geithner said the Eastern country needs to strengthen the "substantially undervalued" yuan because it puts other countries at a competitive disadvantage.
The yuan has climbed about 3pc against the dollar since officials in June scrapped a peg which had been in place since the global financial crisis.
Taking inflation into account, the yuan is rising at a rate of about 10 percent a year, "so if that appreciation was sustained over time, it would make a very substantial difference", he added.
Mr Geithner warned that China faces inflation problems that are of global concern. Inflation accelerated to 5.1pc in November from a year earlier, the biggest jump in 28 months, driven by higher food costs.
Geithner Warns China on Market
By BOB DAVIS
WASHINGTON - Treasury Secretary Timothy Geithner said China's rapid economic ascent is a "growing source of concern" and warned Beijing it risks not getting expanded access to the rich U.S. market unless it revamped its policies.
"We are willing to make progress" on issues of interest to China, Mr. Geithner said at Johns Hopkins University's School for Advanced International Studies, "but our ability to move on these issues will depend on how much progress we see from China," including a faster appreciation of the Chinese currency.
The tough words come a week before President Barack Obama meets with his Chinese counterpart, Hu Jintao, in Washington, and aim to set the tone and agenda for the meeting. Top Chinese officials are doing the same, as the two sides jockey to frame the meeting.
Geithner Urges New Start for U.S.-China Relations
By SEWELL CHAN - NYTimes.com
WASHINGTON - Treasury Secretary Timothy F. Geithner on Wednesday suggested a fresh start in relations between the United States and China, aimed at mutually beneficial economic growth.
In a speech at Johns Hopkins University, one week before the state visit of China's president, Hu Jintao, Mr. Geithner said the two countries would benefit by being more than rivals.
"We have a great deal invested in each other's success," Mr. Geithner said.
His main points - that China should reduce the government's control of the economy, lower barriers to imports from the United States, crack down on the pilfering of American technology and stop holding down the value of its currency - were nothing new.
Whitney Defends Muni Call, Sees 'Indiscriminate Selling'
By: Jeff Cox - CNBC.com Staff Writer
Financial analyst Meredith Whitney is sticking by her call that the nation's municipalities face a wave of defaults, despite a wave of criticism over her prediction that hundreds of local governments would not meet their obligations.
In fact, she took the forecast a step further and said when the defaults begin in earnest, it will mark an exodus from the muni bond market.
"When you have the first group of defaults you will see indiscriminate selling that would be a buying opportunity for some," the president of Meredith Whitney Advisory Group said in a CNBC interview. "Because there has been such complacency in the market and muni investors have been talked down to for so long - 'There's nothing to worry about, there's nothing to worry about' - they'll just fly."
Pimco's Gross Clashes With Whitney Over Municipal-Bond Outlook
By Darrell Preston and Margaret Brennan
Jan. 12 (Bloomberg) -- Bill Gross, who manages the world's biggest bond fund at Pacific Investment Management Co., clashed with Meredith Whitney, the banking analyst, when he said he doubted there would be many local-government bankruptcies.
"Ultimately, municipal bankruptcies will be at a lower level," Gross said today on Bloomberg Television's "InBusiness" program. "I don't subscribe to the theory that there will be lots of them."
Whitney, who correctly predicted Citigroup Inc.'s dividend cut in 2008, said on CNBC earlier today that she expected accelerated "outflows" from the municipal-bond market as state finances deteriorate in the next six months. Last month she forecast 50 to 100 "significant" municipal-bond defaults this year totaling "hundreds of billions" of dollars.
Muni Bond Smackdown! Bill Gross versus Meredith Whitney
By: Ash Bennington - NetNet Writer, Special to CNBC.com
Muni Bond Smackdown! Bill Gross versus Meredith Whitney [Bloomberg] "Bill Gross, who manages the world's biggest bond fund at Pacific Investment Management Co., clashed with Meredith Whitney, the banking analyst, when he said he doubted there would be many local-government bankruptcies."
Bumping our Heads on the Debt Ceiling: And the Folks Don't Like it One Bit [CNBC] "The U.S. public overwhelmingly opposes raising the country's debt limit even though failure to do so could hurt America's international standing and push up borrowing costs, according to a Reuters/Ipsos poll released Wednesday. Some 71 percent of those surveyed oppose increasing the borrowing authority, the focus of a brewing political battle over federal spending. Only 18 percent support an increase."
Fisher: Fed Has Done Enough, Now Congress's Turn
By Michael S. Derby - WSJ.com
Believing the Federal Reserve has done enough to aid the economy, a top Federal Reserve official is calling on Congress to help improve the economy's outlook by reducing uncertainty and get its financial house in order.
"The Fed has done much to provide the bridge financing until the new Congress gets to work restructuring the tax and regulatory incentives American businesses need to confidently expand their payrolls and capital expenditures here at home," Federal Reserve Bank of Dallas President Richard Fisher said Wednesday.
The official said none of his business contacts "are complaining about the cost of borrowing, the lack of liquidity or the availability of capital."
The Budget Battle: How President Obama Is Trapped
By Peter Ferrara - The American Spectator.org
The mistake that most commentators are making on the budget is the idea that a bill has to be passed to cut spending. For much of the 2012 budget, which Congress is now debating, that is not true. In many cases, the absence of legislation can cut spending. With Republicans thoroughly in control of one house of Congress, that legislative reality leaves them with great power to cut spending.
Moreover, today's new political realities, as evidenced by the historic 2010 election, sharply constrain the budget positions President Obama and Democrats in Congress can take. Many of these Democrats, including the President, got elected on the pretense that they would control spending better than the Republicans. In a nationally televised debate in 2008, President Obama pledged to the nation that his plan for the budget would involve a "net spending cut." The federal budget then was $2.982 trillion. President Obama's budget last year projected spending for the current fiscal year, 2011, to be $3.882 trillion. Speaker Boehner should ask for a personal meeting with the President, to which he would bring a dictionary to go over the meaning of the word "net."
Predictions 2011: Jim Rogers, Marc Faber and Richard Russell Agree
Beacon Equity - LewRockwell.com
What do Jim Rogers, Marc Faber and Richard Russell have in common? All three men possess a gift for analyzing financial markets independently and cautiously, and do so with decades of experience. Each man sells nothing but what's on his mind - the best kind of advice to cautious investors.
All three expect 2011 to be a troublesome year, with the growing possibility of unpleasant surprises, turmoil and wealth destruction.
Starting with Rogers, the commodities market prodigy of the famed Quantum Fund: he expects all real assets to enjoy a tailwind of inflation as central banks worldwide bailout banks, businesses and sovereign nations with as much fiat currency as required to forestall default.
My Outlook For 2011: Turbulence Ahead
Black Swan Insights - LewRockwell.com
You don't need a crystal ball or Svengali to see that 2011 will be a turbulent year for the economy and the markets. Here are some prognostications for 2011:
Housing Surprises To the Down Side
Stocks Decline When Priced In Gold
EU Debt Crisis Worsens
Debt Deflation In Europe
The Fed Keeps Interest Rates at 0%
Global Wealth Shifts as Asians Stock Up On Bad Debt
By Bill Bonner - DailyReckoning.com
01/12/11 Paris, France - Yesterday, we promised a new idea. Alert readers may have noticed - we didn't deliver.
But when you have a new idea you don't just throw it out like small change. It requires a certain amount of preparation... a bit of fanfareÉa drum roll and a countdown.
The subject yesterday was European debt. The bond vigilantes came ashore in Portugal, attacking Portuguese government bonds. They seemed to be heading for the Spanish border.
All over Europe, the cry went up: "Can anyone stop them?"
It was as if the Huns were at the doors of Vienna... or the Moors were massed at the walls of Poitiers. Where is Charles Martel when you need him?
The funny thing about yesterday's news was that Japan had come to Europe's aid. Following China's lead, Japan said it would lend the poor Europeans some money.
Bank of Korea surprises with rate hike
By Sarah Turner, MarketWatch
SYDNEY (MarketWatch) - The Bank of Korea surprised markets Thursday by unexpectedly raising its policy interest rate by a quarter point to 2.75%.
Most economists surveyed by Dow Jones Newswires had expected the central bank to stand pat on rates, while only 1 of 10 economists surveyed by Korea's Yonhap news agency had predicted the increase, after policy makers hiked rates twice last year.
The Korean central bank said Thursday that it expects inflationary pressures to persist in the coming months in an improving economy and against a backdrop of higher international commodity prices.
The bank also flagged higher house prices, an upward move in Korean equity prices and an appreciation of the Korean won.
Developing Countries Will Lead Global Growth in 2011, says World Bank -- By Eva Pereira - Forbes.com
The World Bank's 2011 Economic Prospects report released today expects lower but more stable growth for much of the world this year. In a meeting with Forbes to discuss the report, World Bank economists Andrew Burns and Hans Timmer noted the strong and unprecedented recovery of developing economies in the wake of the global economic downturn. "Countries that did better found new areas for growth rather than trying to recapture their old heights," said Timmer. It once was the case that when the first world caught a cold, the developing world caught the flu. Those days might be over as developing countries have managed to re-orient more of their production toward their domestic market in the wake of the downturn. Developing economies are expected to expand by 6% or more in 2011, which is more than twice the rate of growth anticipated for high income countries (2.4 - 2.7%).
France and Germany veto increase in EU rescue fund
Germany and France have rejected calls by Brussels for a rapid increase in the size and powers of the EU's rescue machinery, once again exposing serious differences at the heart of monetary union.
By Ambrose Evans-Pritchard - Telegraph.co.uk
Jose Barroso, head of the European Commission, called on EU leaders to boost the firepower of the EU's €440bn (£366bn) bail-out fund and beef up its role, allowing it to intervene with pre-emptive bond purchases to help states under threat.
"It is important for the markets to know that Eurozone leaders are committed to do whatever is necessary," he said, hoping for action as soon as early February.
He also proposed a "new phase of European integration" with far-reaching oversight of the budgets, pensions, labour markets, and trade flows of EU states to prevent a recurrence of the imbalances that led to the EMU debt crisis.
Brussels demands yet more austerity from member states
LEIGH PHILLIPS
EUOBSERVER / BRUSSELS - Despite hundreds of billions having already been slashed from EU member-state budgets in the wake of the economic crisis, the European Commission on Wednesday said the cuts have not been deep or radical enough and demanded still more austerity from European governments.
At the launch of the first ever 'European Semester', a new annual process of oversight of national budget-drafting by Brussels, the EU executive outlined a series of stringent recommendations, dubbed the 'Annual Growth Survey', that it wants national capitals to adhere to.
Public Opposes a Debt Ceiling Increase, Why Won't Congress?
By Rocky Vega - The DailyReckoning.com
01/12/11 Stockholm, Sweden - According to a Reuters/Ipsos poll released today, the "US public overwhelmingly opposes raising the country's debt limit even though failure to do so could hurt America's international standing and push up borrowing costs."
As far as the study is accurate, an astonishing 71 percent of the people have spoken, and they want to take a step now to clean up the nation's ragingly out-of-control fiscal mess. However, for the sake of re-election, Congress is still more than likely to approve an increase and wager the prosperity of future generations breaking piggy banks, and apparently floorboards, along the way.
A Price for Raising the Debt Ceiling Republicans should attach provisions repealing the worst aspects of ObamaCare and financial reform to spending that the president absolutely need
By ARTHUR B. LAFFER - WSJ.com
Addressing the possibility of the GOP-led Congress not voting to raise the debt ceiling, Austan Goolsbee, President Obama's top economic adviser, histrionically asserted this month: "This is not a game. The debt ceiling is not something to toy with. If we hit the debt ceiling, that's . . . essentially defaulting on our obligations, which is totally unprecedented in American history. The impact on the economy would be catastrophic."
In context, his comments are more than a bit hypocritical. Over the past four years - including the last two years of the Bush presidency - he and his boss supported every big, misguided spending program they could find, regardless of how much the electorate protested. There wasn't a dollar that didn't burn a hole in their pocket.
Gerald Celente - Tech Ticker Interview January 12, 2011
Should you open an FDIC-insured yuan bank account?
By Felix Salmon - Reuters.com
I've been looking at the instructions for opening a yuan bank account here in New York; it seems very easy indeed. Just like a normal US dollar account, it's FDIC insured, and it pays no interest. So, should New Yorkers with dollar savings convert some part of them to yuan?
On the face of it, the trade is a reasonably attractive one. The Secretary of the Treasury is still complaining loudly that the yuan is undervalued, which means that when you buy it at the current exchange rate, you're getting a bargain. A Chinese revaluation is going to happen at some point, and when it does, you'll make money.
On top of that, there's a simple diversification benefit. The dollar is still the main global currency, but there's no harm in putting a few eggs in various different baskets just in case.
Comes The Revolution; Buy Yuan In New York, As Much As You Like
By Robert Lenzner - Forbes.com
The Bank of China, on the corner of 48th St. and Madison Ave., is hardly ready for the the historic opportunity to invest in the fastest growing economy in the world, Communist China.
The vast banking floor was empty when I arrived to open my bid to make a small fortune in the currency that is bound to appreciate against the American dollar over time. No smooth bank executive, no gushing PR representative. No sign that the globe had been turned inside out besides the influx of phone calls to bewilderedÊ bankÊ employees.
25 Hard Questions That You Will Not See Asked On CNN, MSNBC Or Fox News
EndOfTheAmericanDream.com
There is a reason why so many millions of people are turning to the alternative media for their news today. The truth is that there are a whole lot of important things that the mainstream media will simply not talk about. There are a whole lot of other important issues that the mainstream media will tease their viewers with but then subsequently "whitewash" with the "official story" that none of us is supposed to question. Have you ever noticed how CNN, MSNBC, Fox News, ABC, NBC and CBS all seem to come up with the exact same version of "the truth"? But over the past several years we have seen a great awakening take place. Millions of Americans are sick and tired of being spoon-fed establishment propaganda like a bunch of small children and they are searching on the Internet for alternative media outlets that are asking the hard questions and that are willing to at least explore answers that are not part of "the officially sanctioned" version of the truth.
Illinois Braces for Tax Increases
By DOUGLAS BELKIN, LAUREN ETTER and ILAN BRAT - WSJ.com
Facing one of the biggest budget shortfalls of any state, Illinois took the risky step of jacking up income and corporate taxes even as its economy struggles to shake off the recession.
In a deal hammered out by the state's Democratic leadership, the lame-duck legislature pushed through a 67% increase in the state income tax and a 45% increase in the corporate tax.
The new income-tax rate would add about $1,040 to the tax bill of a family of four earning $60,000 a year, and the new corporate rate would move the state into the top 10 among corporate taxers nationally.
Skeptics worried the increase has the potential of chasing both businesses and residents out of the state, and Democrats face the possibility of losing political support in 2012.
Whitney: Forget Dividends, Do Acquisitions. But Will Banks Listen?
By: Jeff Cox - CNBC.com Staff Writer
As bank dividend talk heats up, analyst Meredith Whitney thinks it should cool down.
Implementing dividend hikes now is short-sighted, said Whitney, who spoke in an interview earlier with CNBC.
While banks have done a good job raising cash, they'd be better off putting it to work on overseas acquisitions that would pay off over the long term rather than stuffing it back into investors' pockets in the short term, she said.
Stocks climb to 2-year highs
By Laurie Segall
NEW YORK (CNNMoney) -- Financial shares sparked a broad rally Wednesday that sent all three major indexes to fresh multi-year highs.
The Dow Jones industrial average (INDU) added 83 points, or 0.7% to close at 11,755.44 -- its highest level since September 2008.
JPMorgan Chase (JPM, Fortune 500) was the Dow's biggest gainer, jumping more than 2%, followed by Bank of America (BAC, Fortune 500), American Express (AXP, Fortune 500) and Boeing (BA, Fortune 500).
Bank shares also got a lift Wednesday from Wells Fargo's upgraded outlook for the sector. "It's a group that lagged pretty badly in the fall, and they're still playing catch-up," said Timothy Ghriskey, CIO at Solaris Asset Management.
Two Toxic Bubbles In One
Martin Hutchinson - SilverBearCafe.com
Goldman Sachs' $2 billion deal for Facebook, valuing the social networking site at $50 billion, combines the worst elements of the 1997-2000 and 2004-07 bubbles. It sets a grossly excessive valuation on an Internet company with modest revenues and prospects. It also involves an investment bank structuring a complex deal to maximize its own fees, while driving a truck through two major elements of financial services regulation. Add a third element, that it places a company controlling personal information on 500 million users in close business partnership with a Russian billionaire with a criminal record and you can see the deal is truly groundbreaking. It should also raise important red flags about current market conditions.
US Banks Reporting Phantom Income on $1.4 Trillion Delinquent Mortgages
by Robert Lenzner Forbes.com
The giant US banks have been bailed out again from huge potential writeoffs by loosey-goosey accounting accepted by the accounting profession and the regulators.
They are allowed to accrue interest on non-performing mortgages until the actual foreclosure takes place, which on average takes about 16 months.
All the phantom interest that is not actually collected is booked as income until the actual act of foreclosure. As a result, many bank financial statements actually look much better than they actually are. At foreclosure all the phantom income comes off the books of the banks.
Keiser Report: Curse on Taxes; Max interviews Gonzalo Lira. Fed is purchasing over 60% of US Debt (i.e. monetizing the debt).
Home price drops exceed Great Depression: Zillow
By Al Yoon - Reuters.com
(Reuters) - Home prices fell for the 53rd consecutive month in November, taking the decline past that of the Great Depression for the first time in the prolonged housing slump, according to Zillow.
Home prices have fallen 26 percent since their peak in 2006, exceeding the 25.9 percent drop registered in the five years between 1928 and 1933, the housing data company said in a report on Monday. Prices fell 0.8 percent over the month.
It is a dubious milestone for the U.S. housing market which has failed to gain much traction despite a host of government programs to reduce delinquencies and encourage demand with temporary tax credits and lower interest rates. Many economists expect further price drops, even if there are some anecdotal signs of growing demand, such as in pending home sales data.
House Prices - Up Or Down In 2011?
TheEconomicCollapseBlog.com
How soon will it be before people finally start using the term "depression" to describe what has happened to the U.S. housing market? It has been four and a half years since housing prices began to decline, and they are still falling. In fact, U.S. housing prices have now fallen further during this economic downturn than they did during the Great Depression of the 1930s. Just think about that. We are now in unprecedented territory, and most analysts believe that U.S. house prices will continue to decline in 2011. Mortgage rates have been moving up, mortgage delinquencies are on the rise again, U.S. mortgage lenders have really tightened lending standards and "foreclosuregate" continues to plague the entire mortgage industry. It would be really nice for the overall economy if house prices did go up in 2011, but right now it looks like that simply is not going to happen.
U.S. Chamber of Commerce Calls for Repeal of Obamacare
By Penny Starr
(CNSNews.com) - Tom Donohue, CEO and president of the U.S. Chamber of Commerce, said on Tuesday that the health care bill signed into law last year by President Barack Obama should be repealed.
"Last year, while strongly advocating health care reform, the Chamber was a leader in the fight against this particular bill, and thus we support legislation in the House to repeal it," Donohue said. "We see the upcoming House vote as an opportunity for everyone to take a fresh look at health care reform and to replace unworkable approaches with more effective measures that will lower costs, expand access, and improve quality."
Prices Soar on Crop Woes U.S. Cuts Global Grain Supply Outlook;
Higher Prices Expected at Grocery Stores
By SCOTT KILMAN And LIAM PLEVEN - WSJ.com
Evidence of tightening global food supplies grew as the U.S. Agriculture Department cut its estimates for global harvests of key crops and raised some demand forecasts, adding to worries about rising food prices.
Prices of corn and soybeans leapt 4% Wednesday and wheat gained 1%, continuing the broad rally in commodity prices that began in June. With yesterday's gains, prices of corn futures contracts are now up 94% from their June lows; soybeans are up 51% and wheat is up 80%.
Piers Corbyn Returns:
The Cold Truth of What is to Come in 2011
Alex Jones Tv 1/2
Piers Corbyn Returns:
The Cold Truth of What is to Come in 2011
Alex Jones Tv 2/2
United Auto Workers Push to Unionize Foreign-Owned U.S. Auto Factories -- By DAVID SCHEPP - DailyFinance.com
In the wake of the mass downsizing of the domestic auto industry, the United Auto Workers union has seen its ranks thinned considerably despite its outreach efforts. The union also suffers from image issues, which spring from its historically combative relationship with management at Ford Motor, General Motors and Chrysler Group.
Under the leadership of Bob King, who was elected union president last June, the UAW is now taking a different tact, including expressing willingness to work with employers.
Tense time for workers, as career paths fade away
By Rick Hampson, USA TODAY
This is part of our year-long look at the unemployment crisis and prospects for recovery.
If you're a travel agent, bank teller or a file clerk; if you run a printing press, answer a switchboard or work at a sewing machine; if you repair watches or cameras; if you make anything that can be made more cheaply elsewhere, or do anything that can be done by a robot or computer, then you may feel history is against you.
An old vision of the post-industrial future - that work could be done by machines but nothing would take work's place - is being realized with a vengeance in the second decade of the 21st century.
Obama's Achilles' Heel
by Tait Trussell - FrontPageMag.com
The dreaded ghost of high unemployment haunts President Obama and his prospects for reelection in 2012.
The Obama Administration is hanging its hopes on consumer spending, which makes up about 70 percent of economic activity, and the approximately $2 trillion in assets the industrial community has been sitting on. But despite recent stronger economic growth, Fed Chairman Ben Bernanke forecasts as much as five more years of high unemployment.
Obama has brought the unemployment disaster on himself to a large extent. Like a cross-eyed marksman shooting at the wrong target, he wasted most of his first year shoving against the public will to enact a massive health care overhaul. He also took faulty aim at pushing a stimulus package that brought almost no economic sunshine.
The Giffords Shooting Changes Nothing
By Giordano Bruno - Neithercorp Press
Generally, when one is in the midst of national tragedy, unspoken but expected rules of social conduct tend to take effect. These rules require us to engage in a chorus of collective theater in which every person must act out their best teary-eyed monologue. We suddenly feel obliged to showcase for the world how much more empathetic we are to the plight of the victim or victims than others, or, we simply silence our dissent so that we might avoid appearing ÒinsensitiveÓ to the fads of cultural grieving. That is to say, if you dare to question the honesty behind the sobs, the outrage, or the reactionary zealotry of the ideologues hell bent on exploiting the latest calamity to their own benefit, then you are usually branded as monstrous as the villain or villains who carried out the terrible event in the first place.
Frankly, I could care less about such conventions. The truth takes precedence over all things, even tragedy...
Why the Left Lost It The accusation that the tea parties were linked to the Tucson murders is the product of calculation and genuine belief.
By Daniel Henninger - WSJ.com
There has been a great effort this week to come to grips with the American left's reaction to the Tucson shooting. Paul Krugman of the New York Times and its editorial page, George Packer of the New Yorker, E.J. Dionne of the Washington Post, Jonathan Alter of Newsweek and others, in varying degrees, have linked the murders to the intensity of opposition to the policies and presidency of Barack Obama. As Mr. Krugman asked in his Monday commentary: "Were you, at some level, expecting something like this atrocity to happen?"
The "you" would be his audience, and the answer is yes, they thought that in these times "something like this" could happen in the United States. Other media commentators, without a microbe of conservatism in their bloodstreams, have rejected this suggestion.
So what was the point? Why attempt the gymnastic logic of asserting that the act of a deranged personality was linked to the tea parties and the American right? Two reasons: Political calculation and personal belief.
Facebook changes its lobbying status in Washington
By Jon Swartz, USA TODAY
SAN FRANCISCO - As lawmakers and regulators ponder sweeping changes to online privacy law, Facebook is working to shape its image on Capitol Hill and avert measures potentially damaging to its information-sharing business.
The world's largest social-networking site is increasing its Washington office, spending more on lobbying and meeting with lawmakers, congressional staff and privacy experts who question whether the company is adequately protecting the personal information of its 500 million users. Founder Mark Zuckerberg is also on a charm offensive to show he's on the right side of the debate.
Your most dangerous possession? Your smartphone
By Blake Ellis
NEW YORK (CNNMoney) -- Forget what's in your wallet -- beware your smartphone. It's becoming one of your most dangerous possessions.
If your phone was stolen a few years ago, the thief could make prank calls and read your text messages. Today, that person can destroy your social life -- you said what on Facebook?! -- and wreak havoc on your finances.
Now that smartphones double as wallets and bank accounts -- allowing users to manage their finances, transfer money, make payments, deposit checks and swipe their phones as credit cards -- they are very lucrative scores for thieves. And with 30% of phone subscribers owning iPhones, BlackBerrys and Droids, there are a lot of people at risk.
Don't Follow Wikileaks or Big Brother will be following you!
BY northsunm32 - AllVoices.com
The Justice Dept. in its ongoing battle to frighten people from sites that might reveal embarassing truths about the U.S. government, issued subpoenas seeking information on Wikileaks associates and people who regularly read their twitter feeds. The move resulted in several thousand Twitter followers dropping out as followers.
It is a bit late of course. The subpoenas would still cover their earlier activity. The Justice Dept. was hoping to obtain not just IP addresses, but mailing addresses and banking information from the people involved. However, Twitter is not likely to have any banking data.
Fortunately Twitter refused to comply with the requests and challenged the act and informed the targets as well. However, Wikileaks lawyer Mark Stephens believe that similar subpoenas may have been sent to other companies such as Skype, and Facebook. THis has yet to be confirmed.
WikiLeaked: China's next president lashed out in Mexico against 'well fed foreigners'
Posted By Josh Rogin - ForeignPolicy.com
Not much is known about Xi Jinping, the expected next president of China, but according to a newly public WikiLeaks cable, Xi has been complaining to America's neighbors about "well fed foreigners" pointing fingers at China.
In a February 2009 trip to Mexico, the first stop in Xi's six country tour of Latin America, the current vice president of China blurted out his feelings about criticisms of Chinese diplomacy, according to a diplomatic cable classified by acting deputy chief of mission James Williard.
"There are some well fed foreigners who have nothing better to do than point fingers at our affairs," Xi blurted out at a lunch meeting, appropriately. "China does not, first, export revolution; second, export poverty and hunger; third, cause troubles for you."
North Korea's military: a bad hand played well
BY FOSTER KLUG - Stars and Stripes
POCHEON, South Korea (AP) -- Sleek fighter jets slice through the gray sky above a barren valley. Tanks and troops race across the frozen ground below. Helicopters hover in perfect formation, strafing the hills with fire.
South Korean drills like this one last month send a clear, calculated message: North Korea, despite its threats to turn the South's main city of Seoul into a "sea of fire," cannot compete with such advanced firepower. A military comparison would seem to give the South a lopsided victory, especially when its superpower ally, the United States, is factored in.
Gates: North Korea becoming 'direct threat' to U.S.,
ICBMs within 5 years
By KEVIN BARON - Stars and Stripes
BEIJING - North Korea likely will possess intercontinental ballistic missiles within five years and is "becoming a direct threat to the United States," Defense Secretary Robert Gates said Tuesday, offering a blunt new assessment of the threat posed by the reclusive Stalinist regime.
Shortly after meeting with Chinese President Hu Jintao in Beijing, Gates said he had told senior leaders here that he had identified two developments that "changed the status quo" on the Korean peninsula: Pyongyang's continued development of nuclear weapons and ICBMs, and South Korea's growing anger with the North's attacks, notably the sinking of the Cheonan and the shelling of Yeonpyeong island.
North Korea's missiles aimed for Iran
By Bertil Lintner - Asia Times
Kim Jong-eun's birthday was on January 8, but he received an early present on October 10 when his father North Korean ruler Kim Jong-il clearly designated him as his heir-apparent by allowing him to share the saluting stand at a massive military parade in Pyongyang.
This caused much excitement among the community of international experts who monitor that mysterious country. Less noted around the world, however, was the significant appearance in the parade in the North Korean capital of a new class of ballistic missile, which not only enhances the country's existing capability but has been exported to Iran, potentially allowing Tehran to threaten countries in western and northern Europe.
America has 'reached the point of no return,'
Reagan budget director warns
By Nathan Diebenow - RawStory.com
The Obama administration's $78 billion cut to US defense spending is a mere "pin-prick" to a behemoth military-industrial complex that must drastically shrink for the good of the republic, a former Reagan administration budget director recently told Raw Story.
"It amounts to a failed opportunity to recognize that we are now at a historical inflection point at which the time has arrived for a classic post-war demobilization of the entire military establishment," David Stockman said in an exclusive interview.
Here They Come For Your Money -
Dozens Of States Are Raising Taxes In 2011
EndOfTheAmericanDream.com
You didn't think that state governments would rack up all of this debt without eventually coming after your money, did you? In 2011, dozens of U.S. states are either implementing tax increases that have already been passed or are debating new tax increases that have recently been proposed. In most states, the actual state income tax is not being raised. State politicians have learned that voters really tend to get angry when that happens. Rather, our politicians on the state level are looking for taxes and fees that won't be "noticed" that they can raise. For example, cigarette taxes, alcohol taxes, gas taxes, carbonated beverage taxes and phone taxes get raised a lot because the voters do not pay them directly to the government and typically they do not get noticed as much. Another huge area where state politicians love to raise money is through various "fees". For instance, millions of Americans have noticed that car registration fees and license fees have absolutely soared in recent years. Instead of our politicians coming at us with one big, huge tax increase that we would surely notice, they are hitting us with dozens of smaller tax hikes and fee increases that they are hoping we will not get upset about. The truth is that the average American pays literally dozens of different kinds of taxes each year, and it still isn't nearly enough to cover the horrific debts that our politicians have piled up.
Do or die for massive Illinois tax hike
By Tami Luhby - CNNMoney.com
NEW YORK (CNNMoney) -- Democratic state lawmakers in Illinois are scrambling to pass massive personal and corporate income tax hikes Tuesday to bring their state budget back from the fiscal abyss.
Timing is critical because it will be much harder to raise taxes after Republicans take over more seats on Wednesday. The state GOP is firmly opposed to hiking taxes, preferring instead to cut spending.
While the proposal is still in flux, it contains a mix of tax increases and new borrowing, with a nod to keeping spending under control. Democrats are trying to garner more support for the measure by scaling back the tax spike to 66%, down from an initial proposal of 75%.
Two Americas: 12 Facts That Show That Those Who Are Too Big To Fail Are Thriving On The Bailout Money That Our Politicians Gave Them Even As The Economic Suffering Of Ordinary Americans Continues To Deepen
TheEconomicCollapseBlog.com
Most Americans have a deep aversion to the phrase "redistribution of wealth", and rightly so. On a fundamental level, it is just not right to take the money that one man has worked so hard to earn and "redistribute" it to someone else. In the political realm, the phrase "a redistribution of wealth" is usually a reference to our ballooning social programs, but what most Americans don't realize is that one of the biggest redistributions of wealth in world history took place during the Wall Street bailouts of a couple years ago. Trillions of dollars of our money and of money that belongs to future generations was redistributed to the Wall Street bankers. The Wall Street bankers did not earn this money and they did not deserve this money. We were told that if Wall Street did not get this money that the global economy would collapse and that there would be martial law in the streets. We were promised that this money would "fix" Wall Street and then the prosperity would "trickle down" to Main Street. So did this happen? Of course not.
Gerald Celente : 2011 predictions
Internet nuke bomb waiting to go off
Toward Sensible Monetary Policy
By Ron Paul
Last week the 112th Congress was sworn in. I am pleased that I will be chairing the Monetary Policy Subcommittee of the Financial Services Committee, which has oversight of the Federal Reserve. Obviously, this position will facilitate my efforts to ensure the Fed provides the American people with more information about what they have been doing with and to our money. Not surprisingly, since my chairmanship was announced, apologists for the Fed have been recycling the old canard about how increased transparency threatens the Fed's so-called political independence.
By independence, they are referring to the Fed's ability to greatly impact the economy with virtually no meaningful oversight. We only recently learned that the bankers at the Fed were able to use the latest financial crisis to bail out Wall Street cronies and foreign central banks with billions of dollars that were created and wasted, instead of appropriated and voted on by representatives of the people. The Fed and its supporters in Congress vehemently fought even this small bit of transparency and without this one-time provision in the financial reform act forcing disclosure, we would still not have this information. Indeed, we are in the dark on so much of what the Fed has done. This is extremely dangerous for our country, yet this power and secrecy is defended as some kind of public good, which is patently ridiculous.
Back on the Road to Serfdom
by Thomas E. Woods, Jr. - LewRockwell.com
It was not difficult to predict a major consequence of the Panic of 2008: disparaging the market economy and the free society is now more chic than it has been in half a century. In light of recent events, the argument runs, only a hopeless naïf would champion these things. What we need now is greater supervision by our public servants, and less adherence to the discredited dogmas of the past.
Just how much the free market was in fact responsible for the crisis, or the extent to which government itself and its central bank may have been the culprits (and thus whether the "free market" could have been to blame in the first place), is the subject of one of the essays in this volume. The unifying theme of this book, though, is the brute fact that a shift toward statism is indeed occurring, and that it will not end happily. History is littered with foreign and domestic crises that became pretexts for the expansion of government power, and the present instance appears to be no exception.
Hoover, Bush, and Great Depressions
Mises Daily: by Mark Thornton
The most basic rule of economic policy is to allow prices to adjust to market conditions. This maintains Say's Law and produces what Frédéric Bastiat called economic harmony.
Furthermore, unhampered markets minimize distortions and disruptions introduced by external forces. Most importantly, the unhampered price system minimizes the impact of the business cycle on the economy. This paper examines two historical episodes where interventionist policies turned business cycle corrections into depressions.[1]
The first episode occurred in the Great Depression during the Hoover and Roosevelt administrations. The second episode is the current economic crisis, which began during the George W. Bush administration and has carried over into the Obama administration.
Downturn's Ugly Trademark: Steep, Lasting Drop in Wages
By SUDEEP REDDY - WSJ.com
In California, former auto worker Maria Gregg was out of work five months last year before landing a new job - at a nearly 20% pay cut.
In Massachusetts, Kevin Cronan, who lost his $150,000-a-year job as a money manager in early 2009, is now frothing cappuccinos at a Starbucks for $8.85 an hour.
In Wisconsin, Dale Szabo, a former manufacturing manager with two master's degrees, has been searching years for a job comparable to the one he lost in 2003. He's now a school janitor.
They are among the lucky. There are 14.5 million people on the unemployment rolls, including 6.4 million who have been jobless for more than six months.
Business group: Regulation thwarts job growth
By Aaron Smith - CNNMoney.com
NEW YORK (CNNMoney) -- The head of one of the nation's top business organizations said Tuesday that the U.S. economy is "improving," but "regulatory roadblocks" stand in the way of job creation.
"When it comes to the nation's economy, we begin 2011 in better shape than we found last year," said Tom Donohue, chief executive of the U.S. Chamber of Commerce. "Yet we still face a number of risks that could send us in the wrong direction."
Donohue, delivering his annual State of American Business address in Washington, said regulatory roadblocks should be "swept away" to free up $180 billion in private capital that could be invested in U.S. infrastructure.
10 Things That Would Be Different If The Federal Reserve Had Never Been Created
TheEconomicCollapseBlog.com
The vast majority of Americans, including many of those who believe that they are "educated" about the Federal Reserve, do not really understand how the Federal Reserve really makes money for the international banking elite. Many of those opposed to the Federal Reserve will point to the record $80.9 billion in profits that the Federal Reserve made last year as evidence that they are robbing the American people blind. But then those defending the Federal Reserve will point out that the Fed returned $78.4 billion to the U.S. Treasury. As a result, the Fed only made a couple billion dollars last year. Pretty harmless, eh? Well, actually no. You see, the money that the Federal Reserve directly makes is not the issue. Rather, the "magic" of the Federal Reserve system is that it took the power of money creation away from the U.S. government and gave it to the bankers. Now, the only way that the U.S. government can inject more money into the economy is by going into more debt. But when new government debt is created, the amount of money to pay the interest on that debt is not also created. In this way, it was intended by the international bankers that U.S. government debt would expand indefinitely and the U.S. money supply would also expand indefinitely. In the process, the international bankers would become insanely wealthy by lending money to the U.S. government.
New Move to Make Yuan a Global Currency
By Lingling Wei - WSJ.com
China has launched trading in its currency in the U.S. for the first time, an explicit endorsement by Beijing of the fast-growing market in the yuan and a significant step in the country's plan to foster global trading in its currency.
The state-controlled Bank of China Ltd. is allowing customers to trade the yuan, also known as the renminbi, in the U.S., expanding the nascent offshore market for the currency which began last year in Hong Kong.
The decision is the latest move by China to allow the yuan, whose value is still tightly controlled by the government, to become an international currency that can be used for trade and investment.
"We're preparing for the day when renminbi becomes fully convertible," Li Xiaojing, general manager of Bank of China's New York branch, told The Wall Street Journal. He said the bank's goal is to become "the renminbi clearing center in America."
The yuan problem isn't going away
By Paul R. La Monica - CNNMoney.com
NEW YORK (CNNMoney) -- Now that China's trade surplus has narrowed to just $13.1 billion, do you think that President Hu Jintao and President Obama will just spend next week's visit at the White House talking about the weather?
Don't count on it. This massive trade surplus -- and the fact that the United States still views China's currency as artificially low -- is likely to dominate the talks between the two leaders on January 19.
Obama may rightfully point out that U.S. manufacturers will be at an unfair competitive disadvantage to China as long as the yuan is not trading more freely. A lower yuan makes goods exported by China cheaper.
Gold, silver strong on European debt woes
By Dan Norcini - CommodityOnline.com
Sovereign debt woes out of Europe, particularly Portugal, continue to bring a strong bid into gold. During the early part of the European trading session gold had pushed within a mere 4 euros of its all time high before it was taken down as the clock moved into New York trading (gee - what a surprise). These problems are not going to go away any time soon and as they come to the forefront of the headlines will serve to remind traders of the problems with the Euro and facilitate a drive to gold as a safe haven. They will also be there to serve as a supportive feature for the metal during bouts of price weakness should further fund long side liquidation take place.
If Portugal, or any other of these financially troubled Euro nations, cannot sell their bonds, the ECB is going to have to come in and become the buyer of last resort or else risk a spreading of a debt contagion on their watch. Chatter was that they were already doing just that today. We'll see how many of their bonds the Japanese and Chinese will actually buy after stating that they would be purchasers of some of the debt. Savvy investors in the Euro zone have figured out that what the ECB is doing is a sort of back door QE and that is why they are buying gold and thus why the price of gold in euros is so firm.
Gold as insurance against armageddon
By John Williams - CommodityOnline.com
The Gold Report: In our last two interviews, you noted that based on the contraction in the M3 in 2009, you anticipated a resulting contraction in the general economy six to nine months later. Are you seeing that impact yet?
John Williams: Just to be clear on what's involved. . .I continue to track M3, the Fed's broadest measure of the money supply until it ceased publication in March of 2006.Generally, the broader the measure of systemic liquidity, the better it serves as a predictor. In terms of giving a signal for the economy, you have to adjust the growth for inflation. What's happened historically is that every time the year-to-year change in the inflation-adjusted M3 has turned negative, the economy has followed in a recession or if already in a recession, the downturn has intensified.
Those signals don't come very frequently; but when they do, they are extremely reliable. There have been cases where a recession was not preceded by a contraction in the money supply, but whenever you contract liquidity, you can contract the economy.
Comex Gold ends firmer on bargain hunting as US Dollar Index weakens
By Jim Wyckoff - CommodityOnline.com
(Kitco News) - Comex gold futures closed modestly higher and near the daily high Monday as bargain hunters stepped in to buy the dip, following recent selling pressure. A weakening U.S. dollar index and stronger crude oil prices also supported some fresh buying interest in the precious metals Monday. February Comex gold last traded up $5.00 at $1,373.90 an ounce. Spot gold last traded up $4.30 at $1,374.50.
The U.S. dollar index started out the session higher Monday morning, hitting a fresh six-week high overnight, but then backed off on some corrective selling pressure. As the dollar backed down, gold prices started to move higher. Still, the dollar bulls have regained upside technical momentum. Much of the greenback's strength is coming from a weaker Euro, as that common currency is being pressured by the renewed, yet ongoing, European Union debt crisis that just won't go away. There are some smaller EU country bond auctions upcoming that have the market place concerned regarding investor demand, or lack thereof, for those bonds.
Virginia Creates Subcommittee To Study Monetary Alternatives In Case Of Terminal Fed "Breakdown", Considers Gold As Option
by Tyler Durden - ZeroHedge.com
In what may one day be heralded as the formal proposal that proverbially started it all, the Commonwealth of Virginia introduced House Resolution No. 557 to establish a joint subcommittee to "to study whether the Commonwealth should adopt a currency to serve as an alternative to the currency distributed by the Federal Reserve System in the event of a major breakdown of the Federal Reserve System." In other words, Virginia will study the fallback plan of a "timely adoption of an alternative sound currency that the Commonwealth's government and citizens may employ without delay in the event of the destruction of the Federal Reserve System's currency" and avoid or "at least mitigate many of the economic, social, and political shocks to be expected to arise from hyperinflation, depression, or other economic calamity related to the breakdown of the Federal Reserve System." Most importantly as pertain to the currency in question, "Americans may employ whatever currency they choose to stipulate as the medium for payment of their private debts, including gold or silver, or both, to the exclusion of a currency not redeemable in gold or silver that Congress may have designated 'legal tender'." Whether this resolution will ever get off the ground, and actually find that the world is at great risk should gold not be instituted as a backstop currency, is irrelevant. The mere fact that it is out there, should provide sufficient impetus to other states to consider the ultimate Plan B.
We urge all legislators to carefully read this resolution. Full proposal (pdf):
Ron Paul: I'll Vote Against Raising the Debt Limit
Attack of the inflation hawks
By Annalyn Censky - CNNMoney.com
NEW YORK (CNNMoney) -- The Federal Reserve's newest round of voting members are gearing up to make their opinions count at the next meeting on monetary policy in two weeks, and some are still expressing their distaste for the Fed's latest bond purchases.
"I would have voted against it," Dallas Fed President Richard Fisher told CNNI's Felicia Taylor in an interview Tuesday.
The Fed started the $600 billion bond-buying program in November. It's the second round of so-called quantitative easing in the past few years and has been dubbed QE2 for short. The central bank has expressed hope that QE2 can help keep interest rates low and stimulate more spending.
Seven Things That Will Cost More in 2011
EconomicPolicyJournal.com
This is serious. The very mainstream AOL is warning about price inflation.
I guarantee you that no one at AOL is anxiously waiting for the Fed money supply numbers that are issued in the Fed's H.6 release every Thursday afternoon. They are writing about price inflation because they feel it, and they think they can write about it without getting flack from their readers.
If AOL writers are noticing price inflation, it is a very ominous sign that price inflation is about to kick to the next level, where consumers start acting like prices will be higher in the future and thus cause an acceleration in the price inflation process by deciding to hold smaller cash balances.
Rising Chinese Inflation to Show Up in U.S. Imports
By KEITH BRADSHER - NYTimes.com
BEIJING - When garment buyers from New York show up next month at China's annual trade shows to bargain over next autumn's fashions, many will face sticker shock.
"They're going to go home with 35 percent less product than for the same dollars as last year," particularly for fur coats and cotton sportswear, said Bennett Model, chief executive of Cassin, a Manhattan-based line of designer clothing. "The consumer will definitely see the price rise."
Inflation has arrived in China. And after Tuesday's release of crucial financial statistics by China's central bank, few economists expect Beijing officials to be able to tame rising prices any time soon.
Bank of China allows U.S. customers to trade yuan
Reuters.com Africa
NEW YORK, Jan 11 (Reuters) - State-owned Bank of China Ltd has opened trading in the yuan currency to U.S. customers, according to a posting on the bank's website dated December 2010.
The move, seen as a strong endorsement of foreign trading in the yuan CNY=, or renminbi, comes ahead of a scheduled visit to Washington by Chinese President Hu Jintao next week. The visit may again spotlight China's exchange rate policies.
The website for the Chinese bank's New York branch said it now lets companies and individuals buy and sell the yuan through accounts with its U.S. branches, although U.S. businesses and individuals can also trade the currency through Western banks.
China's exchange reserves hit record level
By Howard Schneider - Washington Post
The thorniest problem in economic relations between the United States and China is getting worse, just as the world's two biggest economies prepare for a summit next week in Washington.
At issue is the imbalance in their financial relationship. China's central bank said Tuesday that Beijing's holdings of foreign cash and securities amount to $2.85 trillion - a jump of 20 percent over the year before - despite Chinese promises to try to balance its trade and investment relations with the United States and other countries.
China's Record Foreign-Currency Reserves Heat Inflation Concerns
By DANNY KING - DailyFinance.com
China's foreign-exchange reserves jumped by a record 7.5% during the fourth quarter, increasing inflation concerns, The New York Times reported Tuesday.
China logged about $2.85 trillion of foreign-exchange reserves at the end of the fourth quarter, up $199 billion from a quarter earlier, the newspaper said. Reserves had already increased by $194 billion during the third quarter, although about half of that jump came from euro appreciation and interest payments.
As foreign currencies have grown in value, the Chinese government has been rapidly printing the renminbi. That's kept its value comparatively low and helped Chinese exporters retain a competitive advantage. China's fourth-quarter money supply jumped 20% from a year earlier, higher than the 19% increase forecast by economists.
Will they continue buying US Treasury securities?
Geithner on China
EconomicPolicyJournal.com
On Wednesday morning, Treasury Secretary Geithner will deliver remarks at the Johns Hopkins School of Advanced International Studies, where he will discuss the economic relationship between the U.S. and China, ahead of President Hu's state visit to Washington.
The Real Problem With China
By DAVID LEONHARDT - NYTimes.com
When China's president, Hu Jintao, visits here next week, the exchange rate between Chinese and American currency will inevitably become a big topic of conversation.
China has been holding down the value of its currency, the renminbi, for years, making Chinese exports to the United States cheaper and American exports to China more expensive. The renminbi's recent rise has been too modest to change the situation, and Mr. Hu's state visit is sure to highlight the real tensions between the countries.
21ST CENTURY AMERICA: MADE IN CHINA
By Frosty Wooldridge - NewsWithViews.com
In the past week, I took a shopping tour in Denver, Colorado - my residence for the last four decades. Forty years ago, I walked into American stores like Sears, J.C. Penny's, K-Mart and McDonald's along with Ford, Chevy and Chrysler dealerships. I ate at Burger King, Dominos, Dairy Queen and Howard Johnson's.
As a teenager, I wore Converse All-Stars for playing basketball. I pulled on my Wrangler or Levi jeans every day for school. The local shoe store kept my feet protected with American cowhide. Hanes and Fruit of the Loom provided my T-shirts.
As I grew older, I owned a '57 Chevy, 68 Camaro, 73 Mustang and 79 Ford Pinto (Big mistake on the Pinto!). I bought gas for .24 cents a gallon when I hit 16.
The US-Japan Congruity Explained By David Rosenberg In Ten Easy Pictures
by Tyler Durden - ZeroHedge.com
Much has been said about the parallels and differences between the Japanese and US experience. Today David Rosenberg chimes in in an original fashion, and instead of providing the latest rambling discussion, shares ten simple pictures. Quote Rosie: "Consider the charts below the equivalent of 10,000 words explaining why the U.S. post-bubble economic and financial backdrop is looking more and more like the Japanese experience of the past two-decades."
Big tests loom for government bonds in Europe, U.S.
By Tom Petruno - LATimes.com
Government bond sales in Europe and the U.S. in the next two days could tell a lot about the near-term direction of interest rates in both markets.
Europe's government-debt crisis may be reaching a new tipping point, after investors in the last few months have demanded ever-higher yields on bonds of many of the euro-zone's financially weakest countries.
Portugal now is looking for a vote of confidence from markets: The country -- considered the next likeliest candidate for a European Union bailout -- hopes to sell four-year and 10-year bonds on Wednesday.
A Global Album Of Sovereign Insolvency
by Tyler Durden - ZeroHedge.com
When it comes to providing analytical perspectives and empirical insights into the realm of sovereign deterioration, few come close to the work of Reinhart and Rogoff. Citi's Willem Buiter is one such man. In his latest summary piece describing in excruciating detail just how bad things are at the sovereign level (and judging by tonight's opening print in the EURUSD more are starting to realize this), Buiter provides a terrific country by country guide of what is now an insolvent world, starting with the merely extremely risky, going through the backstop-baiters, and finishing with the time bombs that have already gone off and everybody pretends not to care. For those who do care, this is a definitive guide to what each individual European (and not only) country can look forward to in an age of global moral hazard. The only open question: with China's interest now to preserve the Euro's viability, how will Beijing act in the next few months as the eurozone finally starts unraveling.
David Einhorn - Federal Reserve's Policies are Quite Dangerous
King World News today interviewed David Einhorn, President of Greenlight Capital. When asked about the Fed's zero interest rate policy and other Fed actions being dangerous longer-term Einhorn responded, "I think that they're quite dangerous. We just went through a period with mortgage borrowers and with mortgage borrowers what we saw, particularly relating to the adjustable rates and so forth, the teaser rates, is when the rates are at a particular level the borrowers are able to service the debt.
You know if you charge no interest, it's pretty easy to make the interest payments... And then what would happen is the rates would eventually reset and the borrowers wouldn't have the income to support the adjusted payments... A lot of the borrowers found themselves upside down and effectively in default."
Small Business Sentiment Drops for First Time Since July
By Daniel Indiviglio - The Atlantic.com
After rising to the highest level in nearly three years in November, small business sentiment declined in December, according to the National Federation of Independent Businesses (.pdf). Its small business Optimism Index declined 0.6 points to 92.6 last month, after rising for four months straight. This is disappointing, but isn't cause for concern yet.
Obviously, it would have been nice to see small business sentiment continue to improve without taking a step back. But the good news is that it didn't move backwards much. Here's the Optimism Index chart since 2006:
Homebuilder Pulte agrees to pay $475,000 in settlement
with Nevada AG
By Steve Green - LasVegasSun.com
Homebuilding giant Pulte Home Corp. has agreed to pay $475,000 and improve its lending practices to settle an investigation of deceptive trade practices by the Nevada Attorney General's Office.
In papers filed Friday in Clark County District Court in Las Vegas, Pulte didn't admit wrongdoing but nevertheless agreed to the settlement to close a probe that was launched in 2009.
In describing the probe involving Pulte and homebuilder Lennar Corp. in March, the Nevada Attorney General's office said: "The investigation by our office results from the receipt of several complaints from Nevada residents against the companies raising serious allegations against Pulte and Lennar that they engaged in deceptive predatory lending practices against Nevada residents including falsifying and inflating income on loan applications; failure to disclose loan terms; changing agreed-upon terms at the last minute without the buyer's knowledge or consent; high interest ARM loans for people who requested and qualified for lower interest fixed rate loans; hidden balloon payments; and requiring people with good credit and down payments to take out 80/20 second mortgages at high interest rates."
November home prices fall 5%, expected to fall more
By Julie Schmit, USA TODAY
U.S. home prices fell 5.1% in November from a year earlier and are expected to go lower as the housing market struggles to find its recovery, according to a report Tuesday.
Real estate analytics firm CoreLogic said that single-family home prices declined for the fourth month in a row and at a faster pace. They dropped 3.4% in October year-over-year.
November declines occurred in 44 states, up from 18 in June when federal tax credits for home buyers were still pumping up sales. Sales and prices fell after the credits expired.
GM Rethinks Pay for Unionized Workers In a Major Shift, Executives Want to Tie Compensation of UAW Members to Performance and Company's Financial Health
By SHARON TERLEP - WSJ.com $$
DETROIT - General Motors Co. wants pay for union-represented workers be tied to employees' work performance and the company's financial healthÑmuch like the way its salaried workers are paid - in what would be a major shift in how generations of auto workers have been compensated.
GM wants more flexible pay levels for workers as a way to encourage better performance and avoid locking the company into handing out big raises when the company isn't performing well, company executives say.
"They are trying to give hourly workers the same metrics as salaried workers," GM Vice Chairman Stephen Girsky said Tuesday at the Detroit auto show. "There is a big pay-for-performance element going through the company and there is going to be more of it."
Eye Opening Statistics Which Reveal Just How Dramatically The U.S. Economy Has Collapsed Since 2007
TheEconomicCollapseBlog.com
Most Americans have become so accustomed to the "new normal" of continual economic decline that they don't even remember how good things were just a few short years ago. Back in 2007, unemployment was very low, good jobs were much easier to get, far fewer Americans were living in poverty or enrolled in welfare programs and government finances were in much better shape. Of course most of this prosperity was fueled by massive amounts of debt, but at least times were better. Unfortunately, things have really deteriorated over the last several years. Since 2007, unemployment has skyrocketed, foreclosures have set new all-time records, personal bankruptcies have soared and U.S. government debt has gotten completely and totally out of control. Poll after poll has shown that Americans are now far less optimistic about the future than they were in 2007. It is almost as if the past few years have literally sucked the hope out of millions upon millions of Americans.
Ron Paul, Tom Woods, Jim Rogers
and Judge Napolitano Take On the Fed
It's Hard to Put a Price on Obamacare
By Megan McArdle - The Atlantic.com
The vote on repealing the health care bill looks likely to be delayed for a while, which gives us more time to quarrel over what such a repeal would mean.
Not what it will mean, of course--Republicans don't have the votes to get it through the Senate, so this is largely a symbolic move. But there's still plenty of room to argue about what would happen if they managed to retake the Senate and get it done.
Democrats are pointing to the CBO score on repeal, which estimates that repealing the law would cost over $200 billion. Republicans are pointing out that the score is highly contingent on actually implementing the law as passed--something that even the bill's proponents recognize will be a political challenge. Already the high-risk pools are a disaster, and the provision to require greater use of 1099s is generally agreed to be a bad idea; we haven't even begun to do the hard stuff, like cutting back on services in order to hold down costs.
Conspiracy Theories About Health That The Mainstream Media Has Been Forced To Admit Are Actually True
EndOfTheAmericanDream.com
Who knows more about health - the mainstream media or those that believe in "conspiracy theories"? Well, the truth is that time after time after time those in the "alternative media" and those who believe in "conspiracy theories" have been proven to be far ahead of those in the mainstream media when it comes to matters of health. Sadly, the mainstream media receives so much funding and so many advertising dollars from the pharmaceutical industry, the medical industry, the big chemical companies and the health insurance industry that they are extremely cautious to report any information that would be harmful to any of them. So for years, the mainstream media generally refused to talk about the dangers posed by things such as fluoride, aspartame, prescription drugs, genetically modified crops and cell phones. But now the alternative media has been making so much noise about many of these health issues for so long that the mainstream media has been forced to acknowledge that some of these "conspiracy theories" about health are actually true.
Poisonous Politics
By Patrick J. Buchanan
On Feb. 15, 1933, Giuseppe Zangara, delusional and a loner, fired his .32-caliber pistol at FDR in the Bayfront Park area of Miami.
Five feet tall, Zangara could not aim over the crowd. So, he stood on a folding chair and was piled on after the first of five shots. He wounded four people, including Mayor Anton Cermak of Chicago.
In two weeks, Zangara, who pled guilty, had been sentenced to 80 years. When Cermak died on March 6, Zangara was retried for murder and sentenced to the electric chair, where he died on March 20, 1933.
In that time, if you knew what you were doing, knew the penalty for it and then committed the crime, you paid the price - and swiftly.
There was no wailing that Zangara, a misfit suffering from a stomach ailment, was not fully responsible.
There was no campaign to accuse Republicans, after a rough election, of creating an atmosphere in which a deranged mind may have been driven to try to kill FDR.
That came three decades later, when conservatives were charged with having "created the atmosphere" in which JFK was assassinated.
Speaker Boehner says no to new restrictions on firearms
By Mike Lillis - TheHill.com
Speaker John Boehner (R-Ohio) is rejecting gun-control legislation offered by the chairman of the Homeland Security Committee in response to the weekend shootings of Rep. Gabrielle Giffords (D-Ariz.) and 19 others in Arizona.
Rep. Pete King (R-N.Y.) announced plans Tuesday to introduce legislation prohibiting people from carrying guns within 1,000 feet of members of Congress.
King, who has previously called for the removal of illegal guns from the streets, made the announcement alongside New York City Mayor Michael Bloomberg, one of the nation's loudest voices for stricter gun laws.
What Democrats Might Learn From the Census
By EDWARD L. GLAESER - NYTimes.com
Last month's Census results seem to have given the Republican Party another victory. As the first chart shows, population growth was generally slower in the states that more strongly supported President Obama in 2008.
What does the growth of Red State America teach us about the course of the country?
The chart below shows that a 5 percent increase in the share of voters who supported President Obama was typically associated with a 1 percent lower growth rate over the decade. The most pro-Obama states in the continental United States - Vermont, Rhode Island and New York Ð grew by 2.8, 0.4 and 2.1 percent, respectively.
RI bans state workers from talking on talk radio No talk radio for Chafee, and on-duty state workers, too
By KATHERINE GREGg and RICHARD C. DUJARDIN - Providence Journal Staff Writers
PROVIDENCE - No one is likely to confuse new Governor Chafee with his Republican predecessor, Donald L. Carcieri, and now here's another way to tell them apart:
Chafee doesn't plan to spend his own time on talk radio, and he intends to ban state employees from spending their state work time talking on talk radio, which was Carcieri's favorite medium and an integral part of his communications operation.
Spokesman Michael Trainor said a directive will go out over the next day or so that reflects that new policy.
Michael Moore Is Right... about terrorism, anyway
by Laurence M. Vance - LewRockwell.com
In his new book Decision Points, former president George W. Bush complains about a 2004 tape by Osama bin Laden "mocking my response to 9/11 in the Florida classroom." What really upset Bush was that "it sounded like he was plagiarizing Michael Moore."
Moore is the documentary filmmaker and liberal political commentator who harshly criticized Bush in his 2004 film Fahrenheit 9/11, which he wrote, directed, produced, and stared in. As Lew Rockwell wrote about the film:
The movie decries the warmongering of the Bush administration, exposes the fraudulence of his excuses for invading and crushing Iraq, unearths the unseemly ties between the Bush regime and big oil and the Saudis, and blasts the Bush regime for its egregious violations of civil liberties and massive pillaging of the American taxpayer on behalf of the merchants of death.
Explaining Evil
By Cal Thomas - PatriotPost.us
In the aftermath of the senseless wounding of Representative Gabrielle Giffords, Democrat of Arizona, and the murder of six others, including U.S. District Judge John Roll and 9-year-old Christina Green, there will be many who will use this tragedy to advance their own political agendas.
Explanations will be sought and blame assigned. Necessary questions will be asked: Did the clerk at the Sportsman's Warehouse in Tucson violate any laws in selling the Glock 19 9mm gun to the accused, 22-year-old Jared Lee Loughner? Loughner reportedly cleared an FBI background check. So why didn't that check discover what one Arizona official called Loughner's "mental issues" and should they have disqualified him from purchasing the weapon?
Lawmakers consider new curbs on incendiary speech
By Russell Berman - TheHill.com
Shocked and saddened lawmakers grappled on Monday with the weekend shooting of one of their own, with some suggesting that new laws and regulations are needed to curb incendiary speech.
The aftermath of Saturday's attack on Rep. Gabrielle Giffords (D-Ariz.) brought a rare moment of unity on Capitol Hill, but it also escalated a contentious debate over violent imagery in the nation's political discourse.
Rep. Bill Pascrell (D-N.J.) was having a beer and eating pizza at a New Jersey bar when he heard the news via the television. Soon thereafter, he was contacted by his staff and was on the phone with other House members.
A Predictable Tragedy in Arizona We emptied state mental hospitals starting in the 1960s without providing adequate treatment alternatives.
By E. FULLER TORREY - WSJ.com
The killing of six people in Tucson is one more sad episode in an ongoing series of tragedies that should not be happening. The alleged shooter, Jared Lee Loughner, is reported to have had symptoms associated with schizophrenia - incoherent thought processes, delusional ideas, erratic behavior - and almost certainly was seriously mentally ill and untreated. The fact that he was barred from his college until he was evaluated by a psychiatrist would appear to confirm the nature of the problem.
The truth is that these tragedies are happening every day throughout the United States. The only reason this episode has received widespread publicity is because there were multiple victims and one victim was a member of Congress. Such senseless killings have become increasingly common over the past 30 years, starting in about 1980, when Allard Lowenstein, coincidentally a former congressman, was killed by Dennis Sweeney. Sweeney was a young man with untreated schizophrenia who had been Lowenstein's protégé in the civil rights movement. Congress was also prominently involved in 1998, when Russell Weston, who also had untreated schizophrenia, killed two policemen while trying to shoot his way into the Capitol Building in Washington, D.C.
Sen. Leahy On Gun Control: 'Easy Answer' Vermont has Low Crime Rate
and 'Doesn't Have Gun Control'
By Eric Scheiner - CNSNews.com
Senator Patrick Leahy (D-Vt.) will link his home state of Vermont's low crime rate to the restraint the state has shown towards gun control legislation, but claims that may not work for all areas of the country.
At an event focusing on the upcoming agenda for the Senate Judiciary Committee at the Newseum in Washington on Tuesday, a member of the audience referenced the weekend shootings in Tucson, Arizona asking; "In the wake of last weekend do you think there should be more talk about gun control and do you for see any legislative push for that on Capitol Hill?"
"There will be but I don't know if much will change it," Leahy responded.
Is Texas Special?
By Derek Thompson - The Atlantic.com
In the summer of 2010, the recovery was cooling and Texas appeared, comparatively, on fire. Its major metro areas claimed four of the top five spots in the Milken Institute's Best Performing Cities Index, four of the top ten of Forbes' "Cities Where the Recession is Easing," and another four spots in last year's Top Ten in Homebuilding. Its state debt ranked fourth best in the country. CNBC had recently named Texas the Top State for Business for the second time in three years.
Now what? Texas suddenly faces a deficit of $25 billion over the next two years -- arguably worse than New York. The state unemployment rate has stubbornly latched to 8.2 percent, also tied with New York. Paul Krugman seem pretty sure of it: The "Texas miracle" was a mirage.
Alaska Pipeline Could Restart Briefly as Early as Tuesday
By CASSANDRA SWEET - WSJ.com
ANCHORAGE -- The Trans Alaska Pipeline system could be restarted briefly, as soon as Tuesday, to ensure the pipes and oil in the system do not freeze while crews work to replace a damaged pipe, the pipeline operator said.
Most Alaska oil production has been shut in since Saturday as the operator of the Trans Alaska Pipeline has scrambled to replace a section of damaged pipe that is crucial for permanently restarting the pipeline system. But each day the system is down amid below-freezing temperatures at Alaska's North Slope oilfields, the possibility looms that something else could go wrong.
"We are very concerned about the integrity of the pipeline and the production facilities, and we're obviously very concerned about the environment," Alaska Gov. Sean Parnell said in an interview Tuesday.
Oil Pipeline in Alaska Has Plan to Restart
By CLIFFORD KRAUSS - NYTimes.com
HOUSTON - Worried about the effect of freezing temperatures, the operator of the Trans Alaska Pipeline System said it planned to temporarily restart the flow of oil through its 800-mile network, even though repairs had not yet been completed on the leak that forced the shutdown of the system on Saturday.
The pipeline operator, the Alyeska Pipeline Service Company, said the plan, which still needs federal and state regulatory approval, would cause a small amount of oil to leak from the broken pipe that was discovered last weekend. But industry officials said that leaking a little more oil was better than leaving liquid idle in the pipes in freezing temperatures. Without warm oil moving through the system, water in the pipes could freeze and expand, possibly causing cracks in the pipeline or around the North Slope oil wells.
Rust Belt Revolutionary
By George Will - PatriotPost.com
WASHINGTON -- Consensus is scarce but almost everyone agrees with this: The government is dysfunctional and the Internet is splendid. But last month, the Democratic-controlled Federal Communications Commission, on a partisan 3-2 vote, did what a federal court says it has no power to do: It decided to regulate the Internet in the name of "net neutrality." The next morning, a man who can discipline the FCC said: Well, we'll just see about that. "We are going to be a dog to the Frisbee on this issue."
Rep. Fred Upton, 57, who represents southwestern Michigan, is now chairman of the House Energy and Commerce Committee. He notes that last summer the Progressive Change Campaign Committee got 95 Democratic congressional candidates to pledge support for federal regulation of the Internet. In November, all 95 lost. Upton will try to stymie the FCC's impertinence by using the Congressional Review Act, under which a measure to reverse a regulation gets expedited consideration and cannot be filibustered in the Senate.
California Reclaims 48,000 State-Owned Mobile Phones
Jan. 11 (Bloomberg) -- California Governor Jerry Brown ordered state workers to hand in half the 96,000 government-paid mobile phones to save money and trim a $25 billion deficit.
Brown, a 72-year-old Democrat, today issued an executive order to agency and department heads to collect and turn in 48,000 phones. The move may save $20 million a year, he said. The state has mobile phone contracts mostly with Verizon Wireless, the biggest U.S. mobile-phone carrier, and Sprint Nextel Corp, the third largest, Brown's office said.
Brown yesterday proposed a budget that would cut spending by $12.5 billion, including $3.2 billion in health and welfare programs and $1.4 billion from public colleges and universities. He also wants to extend for five years as much as $9 billion in temporary tax increases set to expire this year.
Google Android More Vulnerable Than IPhone, Antivirus Maker Says
By Tim Culpan
Jan. 12 (Bloomberg) -- Google Inc.'s Android operating system for mobile devices is more vulnerable to hackers and viruses than Apple Inc.'s iPhone platform, according to security-software maker Trend Micro Inc.
"Android is open-source, which means the hacker can also understand the underlying architecture and source code," Steve Chang, chairman of Trend Micro, the world's largest provider of security software for corporate servers, said in an interview in Taipei yesterday. "We have to give credit to Apple, because they are very careful about it. It's impossible for certain types of viruses" to operate on the iPhone, he said.
Verizon iPhone will go on sale Feb. 10
By Julianne Pepitone
NEW YORK (CNNMoney) -- The wait is over. Verizon Wireless said Tuesday it will begin selling Apple's iPhone early next month, ending AT&T's four-year run as the phone's exclusive carrier.
"If the press writes something long enough and hard enough, it eventually comes true," Verizon President Lowell McAdam said at a press conference in New York City. "Today, we're bringing to market the fruit of our labor with another giant of the high-tech industry, and that's Apple."
Existing Verizon customers will be able to pre-order the phone beginning Feb. 3. The phone will launch in Apple and Verizon stores and online on Feb. 10, according to Verizon Wireless CEO Dan Mead. Verizon customers eligible for "new every two" upgrades will be able to use those upgrade credits toward an iPhone.
Catholic leaders warn of 'totalitarian' Venezuela
AP - WashingtonPost.com
CARACAS, Venezuela -- Roman Catholic leaders in Venezuela are calling for President Hugo Chavez to give up special lawmaking powers granted to him by his congressional allies.
The Venezuelan Bishops' Conference condemned a package of laws approved last month by the National Assembly, including one that grants Chavez power to enact laws by decree for the next 18 months. Chavez gained those powers shortly before a new congress took office with more opposition lawmakers.
ISRAEL: Poor diplomacy strikes foreign relations
By Batsheva Sobelman in Jerusalem - LATimes.com
Israel's foreign relations are suffering these days from an outbreakÊof poor diplomacy. Not necessarily bad; just poor.
Foreign Ministry employees say they are just that, poor. Their basic salaries have been devalued by about 40% since last being updated in the early 1990s, and many of them rely on help from welfare services, say activists from the ministry workers' union.
The diplomats have years of experience, a stack of academic degrees and high motivation to serve. They also have families to feed and pensions to fund, and say neither is doable on their paychecks, which some revealed on a popular news site. Only an idealist or a fool would join the foreign service under these conditions, they said. Finance Ministry officials said the paychecks didn't reflect considerable extras.
Can Argentina's Success Last?
By Bernardo Kosacoff - ProjectSyndicate.com
BUENOS AIRES - Argentina is a curious country. During the past eight years, the economy put up exceptional indicators: GDP grew almost 70% (nearly as dynamic as China) and formal employment increased more than 30%. The country's unprecedentedly solid fiscal results are accompanied by foreign-trade surpluses that are the envy of even the world's most fiscally solvent countries.
All of this represents an utterly unexpected recovery from the vast public and private external indebtedness of just a decade ago. Indeed, Argentina's sharp rebound has generated a huge accumulation of foreign reserves for the country.
China's Growing Military Might and American Rashness
By William Pfaff - TruthDig.com
Robert Gates' official visit to Beijing, probably the last before he leaves the office of U.S. secretary of defense, was a frustrating affair, distinguished by China's reiteration of its warnings that Washington must not sell arms to Taiwan, a demand that the United States has never accepted.
The Chinese enlivened Mr. Gates' visit with a display of their new J-20 fighter, which is claimed to be stealthy and to have other advanced features that put it in the same category as the American F-22, except that the Chinese plane is still in flight development and will not be operational for years - unless the Chinese aerospace industry is a great deal more efficient than the American. Nonetheless, it provided a subject for the defense secretary's reflection - and gained much attention in the aerospace press.
For better or worse, the computers are now in control. Algorithms Take Control of Wall Street
By Felix Salmon and Jon Stokes - Wired.com
Last spring, Dow Jones launched a new service called Lexicon, which sends real-time financial news to professional investors. This in itself is not surprising. The company behind The Wall Street Journal and Dow Jones Newswires made its name by publishing the kind of news that moves the stock market. But many of the professional investors subscribing to Lexicon aren't human - they're algorithms, the lines of code that govern an increasing amount of global trading activity - and they don't read news the way humans do. They don't need their information delivered in the form of a story or even in sentences. They just want data - the hard, actionable information that those words represent.
Lexicon packages the news in a way that its robo-clients can understand. It scans every Dow Jones story in real time, looking for textual clues that might indicate how investors should feel about a stock. It then sends that information in machine-readable form to its algorithmic subscribers, which can parse it further, using the resulting data to inform their own investing decisions. Lexicon has helped automate the process of reading the news, drawing insight from it, and using that information to buy or sell a stock. The machines aren't there just to crunch numbers anymore; they're now making the decisions.
Is America growing politically unstable?
By James Pethokoukis - Reuters.com
Is America becoming less politically stable? A glance at some foreign newspapers would certainly give that impression. This is an important economic question. The global primacy of Treasury bonds and the dollar stems mostly from the nation's massive economic might. But confidence in U.S. political stability also plays a role. The shooting of Arizona Congresswoman Gabrielle Giffords, though tragic, shouldn't alter those perceptions - unless freedom of speech suffers.
Amateur criminal psychologists in the Democratic Party and liberal punditocracy have been quick to blame conservative political rhetoric for helping nudge an unbalanced 22-year-old into acting on his murderous impulses. Pointed charges have been flung at the Tea Party movement and at Sarah Palin. In 2008, her political team created an online map that featured 20 targeted Democratic congressional districts identified by crosshairs, including that of Giffords.
Geithner Says U.S. Insolvent
by Michael S. Rozeff - LewRockwell.com
The U.S. government is insolvent. Who says so? Timothy F. Geithner, the U.S. Secretary of the Treasury.
Geithner sent a letter to Congress on Jan. 6, 2011 asking for the debt limit to be raised. If it is not raised, he warned, the U.S. will default on its debt. In his words:
Never in our history has Congress failed to increase the debt limit when necessary. Failure to raise the limit would precipitate a default by the United States."
He didn't say that the government will be inconvenienced. He didn't say that the government would be forced to muddle through by delaying payments, raising taxes, and cutting non-obligatory programs and services. He said the government will default. This means that the government doesn't have enough cash to pay its obligations to the many and sundry persons to whom it owes cash unless Congress authorizes an issue of even more debt.
Brinkmanship Begins Over Debt Ceiling Increase
By Brian Wingfield - Forbes.com
There is an old adage in politics that warns: Never take a hostage you're not prepared to shoot.
At an event Thursday at the National Press Club, Wall Street Journal Editor Paul Gigot confronted House Budget Chairman Paul Ryan, R-Wisc., with that maxim. The issue? The federal debt ceiling.
Perhaps as early as March 31, the United States will reach the ceiling on the amount of debt it can legally hold, according to a letter Treasury Secretary Timothy Geithner sent to congressional leaders Thursday. This is debt that Uncle Sam owes on already issued obligations, not new spending. The Obama administration has requested that Congress raise the debt limit, currently at $14.29 trillion, ASAP. Republicans say they'll do so only if it's accompanied by dramatic spending cuts. Historically, Congress has never failed to raise the debt ceiling when its confronted with hitting the limit.
U.S.O.F.C.: If the Fraud Stops, the Financial System Collapses
By Charles Hugh Smith - OfTwoMinds.com U.S.O.F.C.: the United States of Organized Financial Crime. The Status Quo is dependent on a Financial Mafia for its wealth, and it is loathe to surrender it.
What happens if fraud and misrepresentation of risk is expunged from the U.S. financial system? In President Bush's memorable phrase: This sucker's going down.
There is a fascinating disconnect between the "law and order" society ceaselessly depicted on TV and the realities of the American financial system, which is now totally dependent on lies, fraud, embezzlement and misrepresentation of risk.
Remove those and the system implodes.
As I observed in Fraud and Complicity Are Now the Lifeblood of the Status Quo:
Fraud, collusion, embezzlement, manipulation and misrepresentation of risk are not isolated incidents, they are now the essential fabric of our entire financial system.
Though fraud and complicity are presented in the mainstream media as isolated conspiracies outside the status quo, the truth is that the status quo is now entirely dependent on fraud and complicity for its very survival. Every level of the status quo would immediately implode were fraud and complicity suddenly withdrawn from the system.
Is the U.S. Economy in a 'Creeping Depression'?
By Tim Iacono
Ambrose Evans-Pritchard covers a lot of familiar ground in his latest commentary at the Telegraph, laying blame for our current condition at the feet of the central bank and offering up what you'll hear no U.S. politician or policy maker say - that the recent housing/credit boom/bust simply forestalled (and probably worsened) the inevitable decline in living standards here in the U.S. that are now more likely to produce social unrest (or worse).
There is a telling detail in the US retail chain store data for December. Stephen Lewis from Monument Securities points out that luxury outlets saw an 8.1pc rise from a year ago, but discount stores catering to America's poorer half rose just 1.2pc.
The Fed Synonymous With Stimulus Policy
By Bob Chapman's - TheInternationalForecaster.com
Today's economic problems started a long time ago, for those who ask why, it is because of the Fed, predators such as transnational conglomerates, empty homes, empty stores, working through the worst recession since the 1930s, currency traders feel pain, food riots around the world, Wall Street shills hard at work.
If you look back into the mid-1960s you will see the beginnings of today's financial and economic problems. Inflation was beginning to raise its ugly head as clad coins came into being. We were collecting all the pre-1964 90% dimes, quarters and halves we could find. As we moved into 1968 few were to be found in circulation. War in Vietnam was draining the country and the buffoon Lyndon Johnson, another socialist, was leading America into the Great Society. What he was really doing was taking the US into socialism and debt. It got so bad that countries were demanding gold for dollars, particularly, aggressive was President Charles DeGaulle of France. Then the beginning of the end came. On August 15, 1971 the dollar was moved off the gold standard and the dollar became just another fiat currency. Here we are almost 40 years later and the dollar has lost 95% of its purchasing power and two breadwinners are needed in every family, as apposed to one in 1971. That is when social engineering began, as we know it today. We've seen many losers walk across the stage over the years - all with either their hands in the till or exuding incompetence. Most of the bright still excelled but 55% of Americans slipped into stupidity. What is sadder is they think they know it all, but they do not. From 1976 to 1981 gold and silver warned us of what was coming. We have had cycles of inflation, buildup of debt and a general degeneration of society.
Did Bankers Rob the Middle Class?
By Derek Thompson - The Atlantic.com
In the last decade, a greater share of money flowed to our banking system than almost any time in American history. Meanwhile, middle class wages continued their 30 year freeze. Are the two related? Are the banks robbing the middle class?
Kevin Drums suggests as much in a series of articles that accuse the new super-rich, which is disproportionately in the financial sector, of swindling the middle class. At one point, Drum quotes from a great essay on income inequality by Tyler Cowen: "It's as if the major banks have tapped a hole in the social till and they are drinking from it with a straw."
The Debt Clock evidently needs more zeros
ZeroHedge NAILED IT almost 2 years ago ...
SUNDAY, APRIL 12, 2009 Observations On The U.S. Debt
Posted by Tyler Durden - Zero Hedge
Some observations on the total U.S. debt (the number are conservative) without commentary. The total is subject to interpretation and the probabilistic treatment of contingent liabilities and guarantees as well as the netting of derivative notionals. Total US Debt so far: $115 - $315 Trillion dollars? (excluding/including derivatives notional) $380,000 - $1,037,000 per person. The break out:
$9.7 Trillion in bailouts
$11 Trillion in national debt
$17 Trillion in corporate/financial debt, and $13.8 Trillion in household debt
$1 Trillion in credit card debt
$10.5 Trillion in mortgages
$52 Trillion in social security/medicare obligations
Like other government trust funds (highway, unemployment insurance and so forth), the Social Security and Medicare Trust Funds exist purely for accounting purposes: to keep track of surpluses and deficits in the inflow and outflow of money. The accumulated Social Security surplus actually consists of paper certificates (non-negotiable bonds) kept in a filing cabinet in a government office in West Virginia. These bonds cannot be sold on Wall Street or to foreign investors. They can only be returned to the Treasury. In essence, they are little more than IOUs the government writes to itself.
$200 Trillion in U.S. bank derivatives (notional)
The $200-Trillion Debt Which Cannot Be Named
The Daily Bell - LewRockwell.com
The scary real U.S. government debt ... Boston University economist Laurence Kotlikoff says U.S. government debt is not $13.5-trillion (U.S.), which is 60 percent of current gross domestic product, as global investors and American taxpayers think, but rather 14-fold higher: $200-trillion - 840 per cent of current GDP. "Let's get real," Prof. Kotlikoff says. "The U.S. is bankrupt." Writing in the September issue of Finance and Development, a journal of the International Monetary Fund, Prof. Kotlikoff says the IMF itself has quietly confirmed that the U.S. is in terrible fiscal trouble - far worse than the Washington-based lender of last resort has previously acknowledged. "The U.S. fiscal gap is huge," the IMF asserted in a June report. "Closing the fiscal gap requires a permanent annual fiscal adjustment equal to about 14 percent of U.S. GDP." This sum is equal to all current U.S. federal taxes combined. The consequences of the IMF's fiscal fix, a doubling of federal taxes in perpetuity, would be appalling - and possibly worse than appalling. ~ Globe and Mail (Canada) Dominant Social Theme: What? That can't be. Let's not talk about it. Free-Market Analysis: These numbers cited by Laurence Kotlikoff have been all over the Internet for a while now but have not been much reported by the mainstream press. No surprise there, but we are a bit shocked that the Globe and Mail chose to pick them up. Was it a slow news day? The story itself has been around since August.
Because the Globe and Mail has covered it, so shall we. Here is our question: Given these numbers, how can banks and institutions purchase US fixed-income securities, let alone the dollar? What sense does it make? These large institutions, with fiduciary responsibility, are basically buying a bankrupt product. And it is not just the US. The entire Western world (maybe with the exception of Germany) is pretty much either flat broke or worse than broke.
Federal Reserve Continues to Shovel Money to AIG
by Robert Wenzel - EconomicPolicyJournal.com
Think the bailouts are over? Think again.
The latest data from the Federal Reserve indicates the Fed continues to increase the amount of money they are providing to AIG.
At November 3, 2010, the balance of credit extended by the Federal Reserve to AIG stood at $19.235 billion by December 29, 2010, the credit extended increased to $20.452 billion. An increase of 6.3%
Judge orders Fed to deliver gold records for her review
by cpowell - GATA.org
GATA today scored a small but perhaps auspicious victory over the Federal Reserve in our lawsuit seeking access to the Fed's secret gold files. The judge presiding over GATA's federal freedom-of-information lawsuit in U.S. District Court for the District of Columbia, Ellen Segal Huvelle, granted GATA's motion to order the Fed to produce in complete form for the judge's private review 20 gold-related documents the Fed has sought to keep secret. The judge ordered the Fed to deliver the documents by Friday.
Through its lawyers, William J. Olson P.C. of Vienna, Virginia -- www.LawAndFreedom.com -- GATA has argued that the Fed's production of gold-related documents has been so inadequate and the Fed's arguments for keeping them secret so weak that the court should review the documents acknowledged by the Fed and order the Fed to answer 25 questions from GATA about the Fed's search for relevant information.
Silver needs to go to $135 to touch historic high of 1980
NEW YORK (Commodity Online): Investors have been going bullish on silver. Silver has been on a bull run along with the glittering gold in the last one year, driven by the commodities super cycle that is on these days.
In the last one year silver price has soared from $17 to touch a 30-year high of $30. But despite the record rise in silver price, it has not yet caught up with the historic surge in silver price that happened in 1980.
According to silver bulls and commodities analysts, if we compare the 1980 of silver at $48, today's silver price is insignificant.
Precious metals analyst Adam Hamilton says "on January 21st, 1980 at its all-time high, $48 silver translates into $135 in today's dollars."
The case for Washington bailing out some states
By Rob Cox and Richard Beales - Reuters.com
NEW YORK - The newly-installed governors of Illinois, California, New York and Connecticut face huge budget gaps that are worrying financial markets. In extremis, federal government rescues might be called for. Breakingviews imagines how these Democrat governors from traditionally left-leaning states might justify a plea for help from the U.S. Congress. Dear Esteemed Members of the 112th Congress:
Like many of you, the four of us have been elected with strong mandates. The voters of Illinois, California, New York and Connecticut have asked us to rectify past mistakes and set sustainable paths for the future. While we are Democrats and most of you are Republicans, we share your wish to address our financial challenges.
GOP to spendthrift states: The check will never be in the mail
By James Pethokoukis - Reuters.com
Exactly a month ago, I wrote a piece on a "secret GOP plan" to nudge fiscally troubled states in bankruptcy, giving their governors a chance to rewrite existing public employee union contracts and take other drastic measure to restore solvency. Step 1: Eliminate the Build American Bond subsidy to make it hard for states to borrow. [DONE] Step 2: Force states to reveal the true extent of their pension liabilities. [COMING SOON] Step 3. Rewrite the federal bankruptcy code [COMING SOON]. Two recent events give me further confidence in my call:
1) Note that Rep. Paul Ryan yesterday reiterated that the GOP had no interest in a state bailout. Here his exact words:
We can't do a bailout. If we bailed out one state, then all of the debt of all of the states is not just implied, but almost explicitly put on the books of the federal government. Then the federal debt will go from here to here by the amount of state debt. There seems to be some kind of implicit belief that [state bonds] are federally backed - they're not.
Uncertainty About Portugal Drives Bond Prices Down
By MATTHEW SALTMARSH - NYTimes.com
PARIS - European bond prices slipped anew Monday as investors remained focused on financial uncertainties in the euro area, notably whether Portugal can avoid turning to international lenders to fund its obligations.
Several European officials stepped forward to deny reports in the German press over the weekend that Berlin and Paris have been pushing Portugal, which has seen its borrowing costs rise to unsustainable levels in recent days, to accept outside aid.
"We are not exerting pressure on anyone, but we defend the euro" Wolfgang Schäuble, the German finance minister, said in Berlin, according to Reuters.
Euro Falling on Contagion Fears Pressure Mounts for Portugal Bailout
Spiegel.de
Germany and France want to push Portugal to seek a bailout from the EU's rescue fund in order to stop the debt crisis fromÊspreading to countries like Spain and Belgium, according to reports from SPIEGEL and Reuters.Portugal on Sunday denied any such pressure, but the euro is falling on fears of contagion.
The euro fell to a four-month low against the dollar at $1.2860 on Monday following mounting concern that Portugal will become the next euro zone member to seek a bailout, after reports by SPIEGEL and the Reuters news agency said German and France were pushing the highly-indebted country to seek financial help.
Core EU states put squeeze on Portugal to accept bail-out
LEIGH PHILLIPS - EUObserver.com
EUOBSERVER / BRUSSELS - Major European powers are putting the squeeze on Portugal to follow Greece and Ireland and knock on the doors of EU and IMF bail-out resources.
Reports over the weekend quote senior European sources as saying Berlin, Paris and other core eurozone capitals are leaning heavily on Lisbon to apply for a financial rescue, although the Portuguese government continues to deny that any pressure is being mounted.
The news comes as Portugal is set to go to the markets on Wednesday (12 January) with a fresh government debt offering of €1.25 billion.
All eyes will be monitoring the sale this week, as any indication that capital markets have abandoned the country will be seen as the final straw before Lisbon is forced to seek external financial assistance.
Obama economic adviser has small business smarts
Houston Business Journal - by Kent Hoover,
Gene Sperling, who President Obama picked last week to head his National Economic Council, was the architect behind the Small Business Lending Fund, the administration's initiative to provide community banks with cheap capital in order to increase lending to small businesses.
It was interesting to note that the company that hosted the president's Jan. 7 announcement, Thompson Creek Window Co., is a poster child for the Obama administration's efforts to help small businesses through tax breaks. It used a tax incentive for hiring unemployed workers to expand its workforce, and the company's sales boomed as a result of tax credits for residential energy-efficiency improvements. This year the company plans to take advantage of a new tax break that will enable it to immediately write off the cost of new equipment instead of depreciating the costs over time.
The Constitution: Not Just for Courts 'Each public officer who takes an oath to support the Constitution swears that he will support it as he understands it, and not as it is understood by others.' - Andrew Jackson
BY NEOMI RAO - WSJ.com $$
(copy & paste title into Google.com search to access article)
The recent attempt by House Republicans to bring constitutional deliberation to Congress has been roundly mocked-by Democrats, law professors and pundits. "When I went to law school they said the law's what a judge says it is," California Rep. Henry Waxman recently explained. Rep. Barney Frank of Massachusetts termed it an "air kiss" to the tea party. Washington Post columnist E.J. Dionne labeled the Constitution an "abstraction" preoccupying the GOP.
Leave the Constitution to the courts, their argument goes. Yet many liberals don't want the courts involved in constitutional issues either-at least not in any robust way. As challenges to ObamaCare work their way through the courts, we hear lamentations that such attempts represent judicial activism and are undemocratic. This leaves the president to protect the Constitution. But when George W. Bush asserted his own interpretation of the Constitution, liberals raised the specter of an "imperial presidency."
Be A Radical, Read The Constitution
Charles W. Kadlec - Forbes.com
Has reading the Constitution of the United States become the mark of a radical? Based on the ridicule and derision aimed at the House Republican Leadership's decision to do just that--and out loud in front of the entire House of Representatives--apparently so.
Ironically, I agree with the critics in this regard: The U.S. Constitution, and its premise of a government of limited and enumerated powers, is among the most radical political documents ever written. The public reading in Congress signals the growing strength of the political movement to restore the constraints on the size and power of the federal government put in place by the Founders.
The Truth About the U.S. Housing Market
By Leith van Onselen - SeekingAlpha.com
Last week, the United States Case-Shiller 20-Cities Composite House Price Index took an unexpected plunge, falling 1.3% in October from a month earlier. Prices have now fallen by around one-third: [see S&P Case-Shiller House Price Index chart]
Month-over-month prices fell in all metro areas covered by the index. And in six markets -- Atlanta, Charlotte, Miami, Portland, Seattle and Tampa -- house prices reached their lowest level since the housing bust began in 2006-07.
Fed president:
home sales not likely to rebound in 2011
TheTruthAboutMortgage.com
Existing home sales are down roughly 50 percent from their peak five years ago, while new home sales and housing starts are off nearly 80 percent.
Despite this, Dennis P. Lockhart, president of the Federal Reserve Bank of Atlanta, doesn't see a "sharp bounce back" in 2011.
Instead, home sales are expected to rise only gradually as the economy sees mild improvement.
"I see four major factors standing in the way of a clear turn in the housing market", Lockhart said in remarks prepared for a speech at the Rotary Club of Atlanta.
Big Banks To New Jersey:
Stop Bugging Us About Foreclosure Documents
By ABIGAIL FIELD - DailyFinance.com
When New Jersey tightened its rules for foreclosures in response to the crisis over false loan documents, it took the unprecedented step of ordering the six largest servicers -- Ally Bank/GMAC, Bank of America , Citibank, JPMorgan Chase, Wells Fargo and OneWest -- to explain why they should be allowed to continue with their foreclosures. If any of them couldn't adequately justify itself, New Jersey would suspend all the foreclosure actions by that bank in the state and appoint a special master to investigate its past and proposed processes.
On Jan. 5, the banks responded, and in essence each said: Look judge, we're good guys committed to keeping people in their homes whenever possible, and while we admit that in the past we had problems -- teeny-tiny problems -- we've fixed them already.
Global food price crisis coming to a country near you? G20 to tackle food prices as countries reassure
By Kim Yeonhee
(Reuters) - The world's biggest economies are working to find ways to bring down soaring food prices, a G20 official said on Friday, as top exporter Thailand vowed to keep rice supply steady and avert a repeat of the 2008 food crisis.
Global food prices hit a record high last month, outstripping the levels that sparked riots in several countries in 2008, and key grains could rise further, the United Nations' food agency said this week.
Policymakers are concerned that, if unchecked, rising food prices could stoke inflation, protectionism and unrest.
JPMorgan: Rising Food Prices Fuelling Inflation
By Robert Wenzel - EconomicPolicyJournal.com
"If you break down the inflation numbers then the impact of food has been extremely significant," Will Shropshire, head of investor trading, product development and agriculturals for JP Morgan said in an interview with Reuters.
Shropshire said prices for agricultural commodities had risen to a level that "reflects the tightness of the balance sheets (of the commodities)." He added prices could rise further if markets are hit by any more supply concerns.
"If we have any more shocks to supply the impact could get increasingly dramatic," he said.
In Illinois, a Giant Deficit Leads to Talk of a Giant Tax Increase
By MONICA DAVEY - NYTimes.com
SPRINGFIELD, Ill. - With Illinois's budget crisis reaching dizzying, desperate levels, lawmakers here over the weekend were seriously pondering something that would have been unimaginable even a few months ago: a 75 percent increase in the state's income tax.
That was just one element in an enormous, controversial and still evolving financial package the state's top political powers dreamed up in private meetings here. On Sunday, they were racing to find enough support to push it through before a new crop of lawmakers takes over on Wednesday.
Texas Whopper: 2-Year Budget Deficit Estimate at $27 Billion!
By Robert Wenzel - EconomicPolicyJournal.com
Texas is expected to collect $72.2 billion in taxes, fees and other general revenue during the 2012-13 budget, down from the $87 billion used in the current two-year budget, Comptroller Susan Combs announced Monday.
That puts the shortfall at $27 billion given that maintaining services would run $99 billion for the 2 year period.
NY couples compete for a free divorce OurDivorceAgreement.com is offering one free divorce package per week in January; thanks to new no-fault divorces, "onslaught" of New York residents jostling for the win.
By Hilary Potkewitz - Crain's New York Business
The smooching and celebrating of New Year's Eve often brings couples closer together, but one company is using the start of the New Year to help couples break up.
Milltown, Ind.-based OurDivorceAgreement.com, which offers online divorce services, launched a dicey sweepstakes this week: It's giving away one free divorce every week in January to couples who share the most compelling stories about why they deserve to win. The company is accepting entries via Facebook, Twitter, YouTube and on its blog.
Since kicking off Wednesday, the stunt has already generated dozens of entries.
"As soon as the ball drops in Times Square, we see an immediate uptick in inquiries to our call center," said Mark Stein, chief executive of OurDivorceAgreement.com.
Bloomberg: It's too hard to fire, punish city workers A mayoral task force calls NYC's civil service system ill-suited for a modern workforce and suggests changes to get rid of the bad and retain and promote the best. Unions howl.
By Daniel Massey - Crain's New York Business
Mayor Michael Bloomberg released a 23-step plan Friday to overhaul civil service work rules and make it easier for the city to fire and discipline workers - drawing immediate fire from municipal union leaders.
The mayor's Workforce Reform Task Force said in its report that civil service exams are not suited for the modern work force and called for abolishing state oversight of the city's hiring. The city has more than 300,000 employees, and the report argues that evolving technology, growing service needs and limited resources require workers with new skills and rules that allow for more flexibility in their deployment.
The Diversity Police Are At It Again
By Ken Connor - CNSNews.com
An alarm has been sounded for Republicans who advocate big-government, abortion, gay marriage, and gun control: Take heed! The GOP is being taken over by (gasp!) actual conservatives!
Offering a review of Monday's debate between the four individuals vying for the mantle of RNC chair, Washington Post columnist Dana Milbank first belittled, then bemoaned the lack of ideological diversity among the candidates:
With Cops on Electric Bikes, Bad Guys Won't Know What's Coming
By Keith Barry - Wired.com
Scofflaws in Scotts Valley, California, better keep an eye out: Cops are patrolling the town of 11,680 with the help of a silent, electric motorcycle.
Last week, the Scotts Valley Police Department became the first law enforcement agency in the world to add a Zero DS electric motorcycle to its fleet. The dual-sport machine sports a range of 50 miles and a top speed of 55 mph. It weight 270 pounds and the lithium-ion battery recharges in four hours at 110 volts.
Scotts Valley, the home of Seagate Technology and a Christian college, isn't exactly a high-crime hotspot, but it does have a mix of urban roadways and off-road bike trails where vehicle won't fit and foot patrol is impractical. The 4.6 square mile town might be the ideal place for an electric motorcycle to join a police fleet.
An Untested Type of Fluoride Is Used in the Overwhelming Majority of U.S. Water Supplies
Washington's Blog
Dartmouth University wrote in 2001:
In a recent article in the journal NeuroToxicology, a research team led by Roger D. Masters, Dartmouth College Research Professor and Nelson A. Rockefeller Professor of Government Emeritus, reports evidence that public drinking water treated with sodium silicofluoride or fluosilicic acid, known as silicofluorides (SiFs), is linked to higher uptake of lead in children.
Sodium fluoride, first added to public drinking water in 1945, is now used in less than 10% of fluoridation systems nationwide, according to the Center for Disease Control's (CDC) 1992 Fluoridation Census. Instead, SiF's are now used to treat drinking water delivered to 140 million people. While sodium fluoride was tested on animals and approved for human consumption, the same cannot be said for SiFs.
Current Fluoride Levels In Water Lead To Overexposure
Boston (SmartAboutHealth) - A new report from the U.S. government has revealed that Americans are getting too much fluoride from their water, their toothpaste, and other sources.
There is a renewed push to change longstanding recommendations and reduce the levels of fluoride in water as it stands now.
The U.S. Department of Health and Human Services along with the U.S. Environmental Protection have joined forces and released new recommendations that would do just that.
These new recommendations are aimed at reducing fluoride levels to try and avoid overexposure to fluoride among children as well as adults.
Did the Father of Propaganda Convince America that Fluoride Is Safe?
Washington's Blog
Freud's nephew, Edward Bernays, created the modern field of manipulation of public perceptions.
As veteran reporter John Pilger writes:
Bernays, described as the father of the media age, was the nephew of Sigmund Freud. "Propaganda," he wrote, "got to be a bad word because of the Germans . . . so what I did was to try and find other words [such as] Public Relations." Bernays used Freud's theories about control of the subconscious to promote a "mass culture" designed to promote fear of official enemies and servility to consumerism. It was Bernays who, on behalf of the tobacco industry, campaigned for American women to take up smoking as an act of feminist liberation, calling cigarettes "torches of freedom"; and it was his notion of disinformation that was deployed in overthrowing governments, such as Guatemala's democracy in 1954.
Hey GOP, cut Medicare Part D first
By John F. Wasik - Reuters.com
Now that House GOP members are off and running with scissors to trim the federal budget deficit and healthcare, I have a suggestion for immediate cost savings: Medicare Part D.
This is the part of Medicare that pays for most of prescription-drug costs for about 45 million Americans. While it may seem that this is cruel and unusual punishment to take away this benefit for older Americans, I have an alternative plan that will reduce the deficit and save money for taxpayers.
Contrary to the House leadership's position, my health reform would save taxpayers billions, lower drug costs and engage the noblest of free-market principles.
Small Leak Shuts Down Oil Pipeline in Alaska
By CLIFFORD KRAUSS - NYTimes.com
HOUSTON - A small oil leak at a pumping station has shut down the Trans Alaska Pipeline System, which could lead to higher oil and gasoline prices in the short term and deliver a new blow to the reputation and fortunes of the British oil giant BP.
Officials said they had not determined the cause or full extent of the leak in a pipe that connects a huge storage tank to a pump that pushes oil down the pipeline. In all, the 800-mile pipeline system carries about 10 percent of the oil produced domestically.
Why the Electric Car Will Never Become a Widespread Phenomenon
by Kurt Cobb - OilPrice.com
Many automobile enthusiasts believe that the electric car is the wave of the future that will help save the environment while expanding the availability of private transport to the world's growing middle class. They are likely wrong on both counts.
Not too long ago a dinner guest at a party I attended told me that my concern about the peaking of global oil production was misplaced. Didn't I know that the electric car was already on its way? That a lot of smart people were involved in making it a reality before too long? That the main problem of charging on long trips had already been solved with battery switching stations that could now be deployed?
Ford plans to hire 7,000 US workers by 2012
AP - MSNBC.com
DETROIT- Ford Motor Co. says it will add more than 7,000 workers in the U.S. over the next two years as it begins producing several new vehicles.
The company plans to hire 4,000 manufacturing workers this year. Almost half those workers will be at the Louisville Assembly Plant in Kentucky that will make the new Ford Escape starting late this year. It expects to add at least 2,500 new manufacturing jobs in 2012.
Verizon to announce iPhone deal Tuesday
Sacramento Business Journal - by Ron Trujillo
Arguably the worst-kept secret in a decade and the most-anticipated announcement since Lebron James' decision last summer, Verizon Wireless will likely confirm Tuesday that it will begin carrying the next-generation iPhone4.
Verizon Wireless president and chief operating officer Lowell McAdam is expected to announce a CDMA iPhone during a news conference Tuesday at Lincoln Center in New York City, according to media reports.
Verizon officials would not comment late Sunday.
Verizon, which has been rumored that it would soon offer its own version of the iPhone for the past several months - and even a few years ago - will compete with AT&T Corp., the exclusive dealer of the wildly popular smart phone since it debuted.
WSJ: Verizon will offer unlimited data plans with iPhone 4
By Rachel King - ZDNet.com
Even if Verizon Wireless announces the availability of the iPhone within its network tomorrow, it's still last year's iPhone 4. So what's a good way to attract consumers? Unlimited data plans.
According to The Wall Street Journal, Verizon will "will offer unlimited data-use plans when it starts selling the iPhone around the end of this month." That's according to "a person familiar with the matter." If it weren't the WSJ quoting such an anonymous, covered-up source, I wouldn't believe it at all.
1986 Privacy Law Is Outrun by the Web
By MIGUEL HELFT and CLAIRE CAIN MILLER - NYTimes.com
SAN FRANCISCO - Concerned by the wave of requests for customer data from law enforcement agencies, Google last year set up an online tool showing the frequency of these requests in various countries. In the first half of 2010, it counted more than 4,200 in the United States.
Google is not alone among Internet and telecommunications companies in feeling inundated with requests for information. Verizon told Congress in 2007 that it received some 90,000 such requests each year. And Facebook told Newsweek in 2009 that subpoenas and other orders were arriving at the company at a rate of 10 to 20 a day.
Why the Arizona Shooting is Unlikely To Be a Repeat of Oklahoma City
By Philip Klein - The American Spectator.org
In the wake of last November's defeat in the midterm elections, Democratic strategist Mark Penn, appearing on "Hardball," suggested that President Obama would need an event like the Oklahoma City bombings to "reconnect" with the American people as Bill Clinton did following the 1994 GOP takeover of Congress. Back then, Clinton cynically (and successfully) associated the anti-government rhetoric of his political opponents with the terrorist attack. This aided his strategy of portraying the newly elected majority as a bunch of extremists, allowing him to come across as reasonable by comparison, and helping to curtail their agenda. Democrats and their liberal allies in the media wasted no time on Saturday, seizing on the tragic Gabrielle Giffords shooting to condemn Sarah Palin, Fox News and tea parties -- even, in some cases, before the identity of the shooter was known. It's their hope to exploit Tucson the way Clinton effectively exploited Oklahoma City. But there are a number of key differences that make it unlikely Democrats will derive as much political benefit from this event.
LOUGHNER FRIEND "EXPLAINS GRUDGE AGAINST GIFFORDS" Loughner was not exactly a Tea Partier.
by John Hinderaker - PowerLine.com
A close friend of Jared Loughner named Bryce Tierney gave an interview to Mother Jones magazine; it is quite interesting:
[L]ater in the day, when Tierney first heard about the Tucson massacre, he had a sickening feeling: "They hadn't released the name, but I said, 'Holy shit, I think it's Jared that did it.'" Tierney tells Mother Jones in an exclusive interview that Loughner held a years-long grudge against Giffords and had repeatedly derided her as a "fake." ...
The Politics of Fear and Paranoia
by Andy Yee - OilPrice.com
We live in a highly organized climate of fear. If security organizations depend upon fear and paranoia to sustain their existence, Wikileaks suggests using the same tools to hold them to account.
Today, we live in a climate of fear. On 15 December, the US Department of Homeland Security and FBI issued an intelligence bulletin to state and local law enforcement agencies warning that terrorists could target mass gatherings at major metropolitan areas during the 2010 holiday season, although US officials said that is no specific and credible intelligence about planned terror attacks. In October, the US Department of State issued an alert warning Americans travelling to Europe to be cautious because of suspected terror plots to attack major European cities. At around the same time, the UK also said there was a 'high threat of terrorism' in France and Germany. In return, French authorities told citizens travelling to the UK to exercise caution as a terrorist attack on transportation systems and tourist sites is 'highly likely.'
Labor's Coming Class War Private-sector union workers begin to notice that their job prospects are at risk from public-employee union contracts.
By William McGurn - WSJ.com
Jeffrey Brown of PBS's "NewsHour" recently summed up the year's economic performance by invoking the most overworked chestnut of modern American punditry: "the disconnect . . . between Main Street and Wall Street."
The notion that Wall Street and Main Street are fundamentally at odds with one another remains a popular orthodoxy. So much so that we may be missing the first stirrings of a true American class war: between workers in government unions and their union counterparts in the private sector.
In theory, of course, organized labor is all about fraternal solidarity. For many years, it is true, private-sector unions supported collective-bargaining rights and better benefits for government workers, while public-employee unions supported the private-sector unions in their opposition to legislation such as the North American Free Trade Agreement in the 1990s.
The Unthinking Right
Mises Daily: by Llewellyn H. Rockwell Jr.
With each published interview, Ron Paul only seems to become more articulate, more persuasive and compelling, more to the pedagogical point in explaining the meaning and priority of liberty as the central political principle. Those of us who understand can only cheer. Those who hold contradictory opinions - favoring liberty in some areas and government expansion in others - find his views, in the words of National Review, "quixotic - unquestionably a little weird."
Let's talk about weird. What's weird is the world of National Review, where it troubles no one to call for huge spending cuts and slashing government at the domestic level while defending the worst form of global imperialism abroad, complete with reflexive defenses of every violation of human rights and liberty.
Pima County Sheriff: We Have Reached No Conclusions and the Investigation Into How Health Care Bill Opposition Caused This is Ongoing -- By Doug Powers - MichelleMalkin.com
Pima County Sheriff Clarence W. Dupnik, who admits to having no case-specific facts at this point and that the investigation is ongoing, has nonetheless repeatedly claimed Saturday's murders were caused by those on the right who fan political flames.
Fox News' Megyn Kelly interviewed Dupnik, who once again said the same thing. How he can justify alleging that baseless and irresponsible political flame-fanning opinions are responsible for violent acts while doing the exact same thing himself is anybody's guess:
Alaska pipeline restart unknown; oil up, BP dips
By Yereth Rosen and Joshua Schneyer
ANCHORAGE/NEW YORK - Reuters.com
(Reuters) - The Trans Alaska Pipeline was shut for a third day on Monday with no timeline for resuming oil flows after a leak forced producers to cut Prudhoe Bay output from 630,000 barrels per day to a trickle.
Oil prices rose 1 percent on Monday as the outage halted nearly 12 percent of U.S. crude output, and shares in BP, the major stakeholder in pipeline operator Alyeska Pipeline Service Co, fell 1.25 percent.
Alyeska discovered the leak in the basement of a pump station booster at the start of the pipeline in Prudhoe Bay early Saturday, and response crews have recovered nine to 10 barrels of oil from the building.
Alyeska has provided no estimate of when the pipeline would reopen or when normal oil production could resume.
Freedom of religion: the Pope's campaign for world peace
by Bernardo Cervellera - AsiaNews.it
Benedict XVI offers step by step instructions in how to put religious freedom into practice in the East and West. Specific requests to the governments of the Middle East, China, Europe and Latin America. No society should deprive itself of the contribution of religious people and communities. The example of Mother Teresa.
Vatican City (AsiaNews) - Convincing the world that "authentic and lasting peace... passes through respect for the right to religious freedom in all its fullness": this, in no uncertain terms, is the dominant intention of Benedict XVI's address delivered today to the diplomatic corps accredited to the Holy See.
Empire of Bases 2.0
by Tom Engelhardt and Nick Turse - LewRockwell,com
India, a rising power, almost had one (but the Tajiks said no). China, which last year became the world's second largest economy as well as the planet's leading energy consumer, and is expanding abroad like mad (largely via trade and the power of the purse), still has none. The Russians have a few (in Central Asia where "the great game" is ongoing), as do those former colonial powers Great Britain and France, as do certain NATO countries in Afghanistan. Sooner or later, Japan may even have one.
All of them together - and maybe you've already guessed that I'm talking about military bases not on one's own territory - add up to a relatively modest (if unknown) total. The U.S., on the other hand, has enough bases abroad to sink the world. You almost have the feeling that a single American mega-base like Bagram Air Base in Afghanistan could swallow them all up. It's so large that a special Air Force "team" has to be assigned to it just to deal with the mail arriving every day, 360,000 pounds of it in November 2010 alone. At the same base, the U.S. has just spent $130 million building "a better gas station for aircraft... [a] new refueling system, which features a pair of 1.1-million gallon tanks and two miles of pipes." Imagine that: two miles of pipes, thousands of miles from home - and that's just to scratch the surface of Bagram's enormity.
China Suspends Official After Lead Fumes Sicken Children
By MICHAEL WINES - NYTimes.com
BEIJING - The authorities suspended a local environmental protection official in eastern China after lead fumes from an illegal battery factory sickened 228 children, the state-run news agency Xinhua reported Sunday. Twenty-three of the children were reported hospitalized.
The episode joins a long series of pollution problems, including many instances of lead poisoning, that have struck rural China in recent years as the nation's industrial boom has spread from the Pacific coast to inland provinces.
The children, in Anhui Province's Huaining County, lived across a road from the Borui Battery Company Ltd., which had been ordered closed in August for violating a rule that requires battery factories to be at least 500 meters from residential areas.
How Will China Respond to a Rising India
Written by Rajeev Sharma - OilPrice.com
India-China ties are set to enter treacherous waters in the coming months. This is clear from the recent Chinese attitude, wherein Beijing has favored Pakistan at the cost of India. China is selling a one Giga watt nuclear reactor to Pakistan and is determined to ink a civilian nuclear energy cooperation agreement with the country which has for years indulged in nuclear proliferation. China has been issuing stapled visas to Indians living in Jammu and Kashmir but not for Pakistanis in Kashmir. This makes it clear on whose side China is in South Asia.
Against the backdrop of many serious differences, the visit by Chinese Premier Wen Jiabao (December 15-17) was expected to lower the temperatures. It did not; instead, it only exacerbated the Sino-Indian fault lines.
China Takes Hard Line With U.S. on Taiwan
By JULIAN E. BARNES And JEREMY PAGE - WSJ.com
BEIJING - China rebuffed a U.S. proposal for a clear timetable of strategic defense talks on the first day of a long-delayed visit to Beijing by Robert Gates, the U.S. defense secretary, and indicated that Taiwan remains the single biggest obstacle to improving the world's most important bilateral relationship.
While agreeing to narrower defense exchanges some time in the first half of the year, Mr. Gates's Chinese counterpart, General Liang Guanglie, also made clear that China would suspend military ties again if the U.S. continues to sell weapons to Taiwan, the island that Beijing regards as a rebel province.
Greece blasts EU 'hypocrisy' for opposing Turkey wall plans
VALENTINA POP - EUObserver.com
EUOBSERVER / BRUSSELS - Athens on Sunday (9 January) has slammed the "hypocrisy" of unspecified EU member states criticising its plans to erect a wall at the border with Turkey, while at the same time denouncing its incapacity to stem irregular migration.
"It is hypocrisy when some who denounce Greece for failing to guard its borders under the Schengen Treaty also criticise us... for seeking to strengthen the watch on our borders," Christos Papoustis, the minister for citizen protection told the Real News daily.
The European Commission last week said: "walls and barriers are short-term measures" that cannot solve immigration problems in a long-term manner. The UN's refugee agency, which has constantly slammed Greece for its poor detention conditions for irregular migrants, also warned against the plans.
ISRAEL, THE NEXT WAR?? OMINOUS NEWS ANALYSIS
By Constance Cumbey
This story appearing today, January 7, 2011, on Global Research, C.A.'s website originally appeared in Le Monde Diplomatique on January 3, 2011.
". . .The US's failure under Barack Obama to impose peace between Israel and the Palestinians makes a new war likely . . . "
Quoting from the article:
"Israel's refusal to accept Obama's proposal to halt settlements on the West Bank (but not in East Jerusalem) for three months in return for unprecedented promises - or bribes, according to columnist Thomas Friedman (2), who is not known for sympathy to the Arabs - confirmed that Obama is unable to exert any real pressure on Israel and that Netanyahu rejects any compromise. Netanyahu, like his predecessors, claims to want peace but he wants the humiliating peace imposed by conquest and based on denial of Palestinian rights. In secret negotiations over the past year, he has repeatedly told the Palestinians they had to accept Israel's "security concept", keeping Israeli troops stationed in the Jordan valley along the "barrier" (on the Palestinian side) and the occupation of a substantial part of the West Bank (3). He did not say how long the occupation would last.
Coast To Coast AM - Jan 6, 2011 Precarious World
George Noory with Steve Quayle
Tragedy in Arizona: The Shooting of Congresswoman Gabrielle Giffords
The Atlantic.com
In a shocking attack in Tucson, Arizona, U.S. Congresswoman Gabrielle Giffords and 17 others were shot at a public event on Saturday.
A gunman shot Giffords, federal District Judge John Roll, and others outside a Safeway supermarket where the congresswoman was meeting with constituents, according to news reports. Roll is among six dead.
As the nation reacts to this shooting, it will be parsed and explained. The alleged shooter, identified by AP sources as 22-year-old Jared Lee Loughner, was frustrated with the U.S. government, and the shooting has inevitably resonated with the dark and violent tones that have arisen in domestic politics at times over the past year and a half. Discussion is emerging over how directly this shooting is connected to politics, if at all.
See our coverage below:
Carolyn McCarthy readies gun control bill
By SHIRA TOEPLITZ - Politico.com
One of the fiercest gun-control advocates in Congress, Rep. Carolyn McCarthy (D-N.Y.), pounced on the shooting massacre in Tucson Sunday, promising to introduce legislation as soon as Monday.
McCarthy ran for Congress after her husband was gunned down and her son seriously injured in a shooting in 1993 on a Long Island commuter train.
"My staff is working on looking at the different legislation fixes that we might be able to do and we might be able to introduce as early as tomorrow," McCarthy told POLITICO in a Sunday afternoon phone interview.
Gun control activists cried it was time to reform weapons laws in the United States, almost immediately after a gunman killed six and injured 14 more, including Rep. Gabrielle Giffords, in Arizona on Saturday.
Establishment Media Demonizes Tea Party and Constitutionalists After Giffords Shooting
Kurt Nimmo - Infowars.com
Get ready for the shooting of Rep. Gabrielle Giffords to be used in a serious way against the Tea Party movement. MSNBC, CNN and the rest of the Mockingbird media are now attempting to portray millions of Americans as violence prone anti-government radicals.
Fox News attributes the shooting to anti-government sentiment.
In the hours following the shooting liberal bloggers blamed Sarah Palin's mid-term election rhetoric for the Gifford shooting. Palin's campaign organization, SarahPac, posted an adtargeting Democrat Giffords for defeat during the election. The liberal blogosphere is directly accusing Palin of stoking hatred against the Arizona Congresswoman that led to the shooting in a Tucson parking lot.
The first bank failures of 2011 as two banks close their doors into receivership
Kenneth Schortgen Jr - Finance Examiner.com
2010 was a banner year for bank failures as 160 went under, were bought out, or went into receivership. 2011 appears to picking up where last year left off as two banks on Friday, January 7th, closed their doors and went into FDIC receivership.
Banks and locations:
1/7/2011 FL , Orlando - First Commercial Bank of Florida - $78.0 million dollar FDIC DIF cost.
1/7/2011 AZ, Scottsdale - Legacy Bank - $27.9 million dollar FDIC DIF cost.
Obama Renews Commitment to Complete Destruction of the Middle Class - Meet the New Economic Death Squad
David DeGraw - SilverBearCafe.com
Sticking with my New Year's resolution to not participate in journalism of appeasement, this article and headline will definitely not be picked up by the appeasers. The unfortunate truth that they don't want to acknowledge is that Barack "Banana Republic Bankster Puppet" Obama has bowed to his masters yet again.
For the people still delusional enough to believe anything that the psychological operation known as Barack Obama says, this will just be more facts for you to ignore. So turn away now and go watch some "reality" TV - the economy is recovering, tax cuts for multi-millionaires will help everyone, exporting jobs to South Korea will be great for the middle class, the oil in the Gulf of Mexico is 75% cleaned up, seafood from there is perfectly healthy, health insurance rates are declining, the "situation" in Afghanistan is improving, non-combat troops are leaving Iraq, your civil liberties are just fine and a unicorn will soon give you a magical ride over the rainbow. Just click your heels together and the American dream will continue, after this message from our sponsors:
Investment bubble can take gold to $8,000/oz
By Bill Bonner - CommodityOnline.com
The supply of paper currencies is infinite; the supply of gold is finite. This striking contrast provides an excellent reason to exchange the former for the latter, writes Rob Marstrand, chief investment strategist for the Bonner & Partners Family Office.
The gold supply is limited... very limited. According to one estimate, all the above-ground gold in the world totals between 120,000 and 140,000 metric tonnes. Let's split the difference and call it 130,000 metric tonnes (about 4.2 billion troy ounces). If you brought it all together and made it into a gigantic cube, it would measure about 19 meters along each side - about three meters short of the length of a tennis court.
Metal commodities to boom in 2011
By Larry W. Reaugh - CommodityOnline.com
A new gold backed currency will be measured in fractions of a gram/$100.00 (US). As we begin 2011 gold is having another dramatic correction, followed by silver. This is a short term correction as the dollar strengthens and the gold price drops, the next move will see it trading at $1450/oz. with silver at $35/oz.
It has been 25 months since I published my first issue of "Fundamental View on Metal Markets" - December 9, 2008, since that time (as predicted) we have seen a dramatic upswing in the consumption and price of metal commodities. At year end copper had broken it's all time high traded at $4.42/lb. from $1.36/lb. in December of 2008. A new high of $6.00/lb. in the next 24 months is a real possibility. Silver which has traded at a disconnect with gold for several years has regained its status as a precious metal and ended the year at $31.50/oz. Other metals traded well above their 2008 lows. Gold traded at $1420/oz. and is the leader here, closely followed by copper. Gold is the longest lasting currency in the world with a 5000 year history.
Self Sustaining Recovery and the Great Gold Panic of 2011
Central Banks are Acquiring Gold, Dumping US Dollars
By: Michel Chossudovsky - MarketOracle.co.uk
There is evidence that central banks in several regions of the World are building up their gold reserves. What is published are the official purchases.
A large part of these Central Bank purchases of gold bullion are not disclosed. They are undertaken through third party contracting companies, with utmost discretion.
US dollar holdings and US dollar denominated debt instruments are in effect being traded in for gold, which in turn puts pressure on the US dollar.
In turn, both China and Russia have boosted domestic production of gold, a large share of which is being purchased by their central banks:
Crude Oil & Gold: Key asset class for 2011
By Monty Guild - CommodityOnline.com
Economic growth will be fine. The debt overhang will be handled by continuing and accelerated Quantitative Easing. Looking ahead, we are quite optimistic about demand for stocks, gold, and commodities in 2011
Investors are moving from bonds to stocks, and the huge cash balances at money market funds will likely find their way into stock and commodity markets in 2011. This means that inflation and commodities prices are likely to rise faster than wages, and those living on fixed incomes or bond interest will be affected the most, due to the fact that their money buys less of everything; both luxuries and necessities. However, the ramifications of this inflationary trend are also serious for wage-earners. In every inflationary period in recorded history, wages have risen more slowly than inflation.
Real Silver Highs 3
Adam Hamilton - SilverBearCafe.com
Thanks to its awesome autumn rally, silver has become something of a rock star in the commodities world. Investors and speculators alike are enthralled with this white metal. But with it just hitting new 30-year highs, many on Wall Street suspect silver is stretching to bull-ending extremes. However once silver's modern history is recast into real inflation-adjusted terms, this metal's secular bull is still looking young.
For any long-term price comparisons, over a decade, adjusting for inflation is absolutely essential. The US Federal Reserve is constantly creating new fiat dollars out of thin air, cheapening all the other ones already in existence. When the money supply grows faster than the pool of goods, services, and investments on which to spend it, nominal prices rise. Relatively more dollars compete for relatively fewer things to buy, driving up prices.
Massive Silver Withdrawals From The Comex
By: Jesse - MarketOracle.co.uk
It will be interesting to see how the CFTC, the Obama Administration and the Comex deal with this situation with silver, including massive paper short positions.
Harvery Organ's commentary:
"And now for the big silver report.
We witnessed a massive withdrawal of silver unprecedented in the history of the comex. First there was a smallish 6507 oz of silver deposited to two customers, one being 497 oz and the other 6010 oz). But just look at the huge withdrawals:
Four customers (not dealers) withdrew a total of 1,019,310 oz from the comex vaults. This is real silver leaving from 4 registered vaults. The individual withdrawals are: 579,081, 30,380, 399,994 and 9855 oz.
Bunker Hunt's Attraction to Silver: A History of Cornering the Silver Market
J.D. Seagraves - SilverBearCafe.com
The 1983 Hollywood comedy, Trading Places, offered many laymen their first glimpse at the hustle-and-bustle world of commodities trading. The film features a pair of imperious billionaire brothers, the Dukes, who attempt to add to their fortune by illegally manipulating the price of orange juice in the futures market.
The protagonists, played by Dan Akroyd and Eddie Murphy, foil the brothers' plot and leave the Dukes disgraced and penniless. But although the movie was a work of fiction, the Duke characters were in fact based on a pair of real-life brothers-Bunker and Herbert Hunt-and their story is truly stranger than fiction.
Market on alert over BP leak
By Sheila McNulty in Houston - FT.com
Oil markets were braced on Monday for the impact of the loss of up to 15 per cent of US crude after a pipeline leak forced BP, the UK-based oil company, to shut down 95 per cent of production from North America's biggest field.
The development, at the Trans-Alaska Pipeline System that carries oil from the Prudhoe Bay field, comes as BP is still grappling with the fallout from the oil spill in the Gulf of Mexico. A prolonged shutdown would cut into BP's output and could undermine earnings.
Keiser Report: United States and the Deathly Deficit
The Nomadic Nature of Money
By: Richard Daughty - MarketOracle.co.uk
I was intrigued that a guy named David Thurtell, of Citigroup, surprisingly said, "The liquidity pumped out by central banks means that there is a lot of money sloshing around that needs to find a home."
I was so intrigued that I was tempted to use it as the basis for my first report to the new supervisor for this quadrant of the galaxy, Karpus Klegg the Implacable, at his new office at Intergalactic Headquarters after the "palace coup" and interstellar personnel shake-up that I just found out about.
However, I did not want to start off a relationship with some guy I never met named Karpus Klegg the Implacable by saying that people on this planet believe that money can find a home, as it sounds so stupid.
When Will the Renminbi Overtake the Dollar?
Simon Black - SilverBearCafe.com
Without a doubt, the existing global financial system depends on the widespread use of fiat currencies issued by insolvent governments. The wealth of the world's large financial institutions requires that there be currencies with sufficient size and circulation to absorb massive capital flows.
The current system is based primarily on the dollar; with a $14 trillion economy, the United States was for years the only country in the world with a sufficient money supply and financial infrastructure to take in the preponderance of the world's wealth.
U.S. and Global Economic Forecast 2011, Russia and the Roots of World Inflation
By: John Mauldin - MarketOracle.co.uk
It is time once again to throw caution and wisdom to the wind and actually make my 11th annual forecast. I have to admit this is the most stressful letter I write each year. I do at least 5-10 times more research and thinking about this issue than any other. On a positive note, this may be one of the more optimistic forecast letters I have done in a long time. But there are some asterisks, as always. We will survey the world, trying to peer through the fog of the future. There are some very interesting side trails we will want to explore. Did you know some events in Russia could have real ramifications for inflation in China, the US, and the world? I pay attention to the background details and bring them to you. So settle back as we tour the world.
The Japan Myth
By Daniel Gros - ProjectSyndicate.com
BRUSSELS Ð The first decade of this century started with the so-called dot-com bubble. When it burst, central banks moved aggressively to ease monetary policy in order to prevent a prolonged period of Japanese-style slow growth. But the prolonged period of low interest rates that followed the 2001 recession instead contributed to the emergence of another bubble, this time in real estate and credit.
With the collapse of the second bubble in a decade, central banks again acted quickly, lowering rates to zero (or close to it) almost everywhere. Recently, the United States Federal Reserve has even engaged in an unprecedented round of "quantitative easing" in an effort to accelerate the recovery. Again, the key argument was the need to avoid a repeat of Japan's "lost decade."
Printing a Recovery... An Emerging Bubble Alert
Mike Whitney - SilverBearCafe.com
Counterfeiting is an effective way to stimulate the economy, but the costs can be quite high. For example, if trillions of dollars in fake cash was injected into the financial system (undetected), we'd probably see the same type of thing that we see when a credit bubble is inflating; asset prices would rise, unemployment would fall, economic activity would increase, and GDP would soar. But when people figured out what was going on, investors would panic, the markets would crash, and the economy would go into a deflationary nosedive.
So here's the point: Deregulation allows the banks to create as much bogus money as they want in the form of credit. When a bank issues a loan to someone who can't repay the debt, it's counterfeiting, which is the same as stealing. This is what the banks did in the lead-up to the Market Meltdown of '08; they issued trillions of dollars of mortgages to people who had no job, no income, no collateral, and a bad credit history. The banks abandoned all the standard criteria for issuing loans, so they could increase the quantity of loans they produced. Why? Because bankers get paid on the front-end of the transaction, which means that when they make a loan, they mark it as a credit on their books so they can draw a hefty salary and a fat bonus at the end of the year. In other words, there are powerful incentives for bankers to do the wrong thing, which is why they act the way they do.
Trade war looming, warns Brazil
By Jonathan Wheatley and Joe Leahy in S‹o Paulo - FT.com
Brazil has warned that the world is on course for a full-blown "trade war" as it stepped up its rhetoric against exchange rate manipulation.
Guido Mantega, finance minister, told the Financial Times that Brazil was preparing new measures to prevent further appreciation of its currency, the real, and would raise the issue of exchange-rate manipulation at the World Trade Organisation and other global bodies. He said the US and China were among the worst offenders.
"This is a currency war that is turning into a trade war," Mr Mantega said in his first exclusive interview since Dilma Rousseff, Brazil's new president, took office on January 1. His comments follow interventions in currency markets by Brazil, Chile and Peru last week and recent sharp rises in the Australian dollar, the Swiss franc and other currencies amid an exodus of investment from the sluggish economies of the US and Europe.
Lower Than Expected Employment Figures Fail to Rattle US Stock Markets
Global Intelligence Report - AllAmericanGold.com
Statistics released by the US Labor Department reflect a worsening employment situation despite the superficially positive headline numbers on which much media commentary focused. The US Labor Department surprised observers on Friday (7 January 2011) by announcing December job creation was only half of what observers were expecting it to be. Unemployment declined partly due to a statistical artifact, and it nevertheless remains high in historical terms. The US stock market barely seemed to notice any of the dispute over the significance of the numbers.
Gerald Celente with Ben Merens 1/4/2011
WPR Wisconsin Public Radio
The Jobless Recovery Hits a New Victim: College Grads
By HUGH COLLINS - DailyFinance.com
For most of the last three years, one group has survived the economic downturn with minimal damage: college graduates.
Workers with an undergraduate degree saw unemployment rising only slowly, even as the rest of the economy tanked, with millions of jobs lost in industries like construction and manufacturing. College grads were as close as you could get to recession-proof.
Not anymore.
Figures from the Bureau of Labor Statistics show that unemployment among people under 25 with bachelor's degrees vaulted to 9.6% in December. That's up from 8.6% in November and 5.9% just two years earlier. A stagnant labor market means the country can't create enough jobs for the thousands of young people set to graduate this academic year.
No good news for the long-term unemployed
By Felix Salmon - Reuters.com
The December jobs report turns recent history on its head. We've been used to healthy increases in employment making no dent in the unemployment rate, but this time a mediocre jobs figure - just 103,000 new jobs were created - coincides with a gratifyingly large fall in unemployment, to 9.4% from 9.8%. For those keeping track at home, that's employment up by 103,000 and unemployment down by a whopping 556,000.
There's no doubt that the headline payrolls number is a disappointment. The economy just doesn't seem to be creating jobs: we need to see 150,000 new jobs a month just to keep pace with population growth. But is there some good news, at least, on the unemployment front?
Number of Discouraged American Workers Hit Record High:
QE3 = A Matter of When
By: Dian L Chu - MarketOracle.co.uk
The latest U.S. Labor Department data indicated that non-farm payroll added 103,000 jobs in December, which is far short of expectation, but the unemployment rate somehow managed to fall sharply to 9.4% (from 9.8% in November) far exceeding expectation.
103k Jobs Not Enough To Drop Unemployment Rate
The current consensus is that the U.S. economy would need to create 150,000 to 175,000 new jobs each month in the next 5 years or so, at minimum, just to restore the 8+ million jobs wiped out by the Great Recession.
Since the nation added only 1.1 million jobs in total last year, or averaging 94,000 jobs a month, the 103,000 new jobs added, coupled with a 0.4% drop in unemployment rate in December, simply does not make much sense.
Totally Discouraged
Deepening crisis traps America's have-nots
The US is drifting from a financial crisis to a deeper and more insidious social crisis. Self-congratulation by the US authorities that they have this time avoided a repeat of the 1930s is premature.
By Ambrose Evans-Pritchard - Telegraph.co.uk
There is a telling detail in the US retail chain store data for December. Stephen Lewis from Monument Securities points out that luxury outlets saw an 8.1pc rise from a year ago, but discount stores catering to America's poorer half rose just 1.2pc.
Tiffany's, Nordstrom, and Saks Fifth Avenue are booming. Sales of Cadillac cars have jumped 35pc, while PorscheÕs US sales are up 29pc.
Cartier and Louis Vuitton have helped boost the luxury goods stock index by almost 50pc since October. Yet Best Buy, Target, and Walmart have languished.
Collapse of the Welfare State
By: Gary North - MarketOracle.co.uk
.... Politicians know that the hand that rocks the cradle rules the world. They want to get mothers away from the cradles as early as possible. Mothers, who think they have better things to do than rock cradles, agree. They hand over their children to a series of strangers whom the government has certified as professional cradle-rockers.
All over the world, governments pay for these cradles. Most governments have laws against private cradles. Those few cradles that are allowed are heavily regulated. As for cradles at home, in Europe this is illegal. In the United States, it is regulated.
The cradles are placed in government-funded trees. Each year, the growing children are placed in larger cradles higher up in the trees. The boughs droop. Caretakers put up wires to keep boughs from breaking. But anyone with eyes can see that the boughs are sagging badly in most trees. There are too many cradles and not enough boughs.
The Tea Party rules Washington as Barack Obama braces for savage cuts New breed of right-wingers takes over the Capitol with a slash-and-burn agenda that threatens the White House
Paul Harris - The Observe - Guardian.co.uk
Dick Armey's black, lizard-skin cowboy boots lay on the floor while he relaxed on the couch in stockinged feet. The former Texas congressman was in a jovial mood in his office just off the Washington Mall Ð and for good reason. He may no longer be a politician but as chairman of FreedomWorks, one of the main forces behind the conservative Tea Party movement, he is once more a major player in the new Washington DC.
"My wife likes the terminology of a 'paradigm shift'," he said in a western drawl. "And I like to agree with that. It is a paradigm shift. It's a phenomenon."
Ron Paul:
People Have To Know How To Take Care Of Themselves!
Will the Mortgage Market Die Without Government Guarantees?
The Atlantic.com
As the housing policy debate gets underway this year in Congress, there's really only one big decision to make: will the U.S. government continue to guarantee mortgages? Once that is determined, the rest is really just details about how to best implement policy. The Treasury could be moving away from government guarantees, even though the market and Democrats generally prefer them. In a sprawling op-ed this week in the New York Times, Vanity Fair writer Bethany McLean essentially argues that without government guarantees, the American mortgage market will fail. Is that true?
Problems
Here's McLean describing the problems with pulling government guarantees:
Mortgage modifications daunting for homeowners
By MATT VOLZ - AP - WashingtonPost.com
HELENA, Mont. -- Laverl "Nick" Nicholson used to look out of his kitchen window at the weeping willows that mark the burial place of two of his daughters. Then a debilitating car wreck left him unable to pay the $220,000 he owed on his northwestern Montana home.
He tried for a year and a half to lower his mortgage payments through a loan modification, but the government-insured loan that he took out three years ago came with restrictions. The best the bank could offer him was a reduction of $124 per month, leaving Nicholson with a $1,585 payment that he still couldn't afford.
Banks lose foreclosure fight in Mass.;
mortgage mess deepens
AP - USAToday.com
The highest court in Massachusetts ruled against U.S. Bancorp and Wells Fargo on Friday in a pivotal mortgage foreclosure case that could spark more turmoil and uncertainty in a housing market already mired in depression.
The Supreme Judicial Court affirmed a lower court judge's ruling invalidating two mortgage foreclosure sales because the banks, in their capacity as trustees for mortgage securities, did not prove that they actually owned the mortgages at the time of foreclosure.
How to Cope With Rising Gas Prices
By JEAN CHATZKY - DailyFinance.com
On Dec. 17, Tom Kloza, chief oil analyst for Oil Price Information Service, wrote on his blog that "we have never, ever celebrated Christmas day with U.S. gasoline prices at $3 a gallon or higher."
All of that changed a few days later, when the national average hit $3.01 two days before Christmas and just in time to pluck a few more dollars out of the wallets of holiday travelers. Kloza tells me that we started 2011 with the highest gas prices ever for January, which doesn't bode well for the coming months. Still, the sky isn't falling.
In The Future You May Not Be Able To Provide The Basics For Your Family Even If Everyone In Your Family Has A Job
TheEconomicCollapseBlog.com
Today, millions of American families are extremely stressed out because they are working as hard as they can and yet they find at the end of the month they still haven't been able to pay all of the bills. Unfortunately, things are only going to get rougher in the years ahead. The U.S. government has reached a terminal phase of the debt spiral that it is trapped in, and the only way to keep the system going is to print more money, borrow more money and spend more money. But won't this cause horrible inflation eventually? Of course it will. That is why so many people around the world have so loudly denounced "quantitative easing 2". The Federal Reserve is just creating hundreds of billions of dollars out of thin air and is chucking all of this money into the system in a desperate attempt to get it moving again. This is also why the Tea Party movement is so angry about the record amounts of government debt that are being piled up. When the U.S. government goes into more debt, it creates more dollars. As the Federal Reserve and the U.S. government flood the system with new dollars, it means that there are now more dollars chasing roughly the same number of goods and services, and that is a recipe for inflation.
7 Reasons Food Shortages Will Become a Global Crisis
by Nicholas West and Zen Gardner - LewRockwell.com
Food inflation is here and it's here to stay. We can see it getting worse every time we buy groceries. Basic food commodities like wheat, corn, soybeans, and rice have been skyrocketing since July, 2010 to record highs. These sustained price increases are only expected to continue as food production shortfalls really begin to take their toll this year and beyond.
This summer Russia banned exports of wheat to ensure their nation's supply, which sparked complaints of protectionism. The U.S. agriculture community is already talking about rationing corn over ethanol mandates versus supply concerns. We've seen nothing yet in terms of food protectionism.
Surviving an Accidental Retirement
By SHERYL NANCE-NASH - DailyFinance.com
Reaching retirement can be a wonderful thing -- except when it catches you by surprise. Say, for example, when you're in your late 50s and the boss gives you the boot. Or you might fall victim to downsizing at a newly merged company. The culprit could even be an illness that interrupts you in the twilight of your career. And suddenly, it becomes clear that the next job isn't just around the corner.
Whatever its cause, an accidental retirement can leave you scrambling to come up with a Plan B. With the economy still shaky, and unemployment still far too high, many more people are finding themselves looking for ways to the plug the financial gap created by an early retirement. Here are a few ideas.
For Millions Of Senior Citizens The Only Future They Have To Look Forward To Is One Filled With Debt And Poverty
EndOfTheAmericanDream.com
In America today, millions upon millions of senior citizens are very deep in debt. In fact, more elderly Americans than ever before are going bankrupt. Millions of others are living in extreme poverty or are just barely getting by on meager fixed incomes. Meanwhile, the price of food is going up, the price of gasoline is going up, the cost of heating homes is going up and health insurance premiums are absolutely soaring. Millions of our senior citizens suddenly find themselves financially squeezed more than they ever have been in their entire lives. Unfortunately, at the same time all of this is happening, our government officials are realizing that they simply don't have the money to keep the financial promises that they have been making to our retirees. Sadly, what this all means is that for millions of our senior citizens, the only future they have to look forward to is one filled with debt, poverty and financial pain.
Jobs Report, U.S. Constitution, SchiffRadio.com
Overall state revenues for 2009 dropped to worst levels in 60 years
By Kenneth Schortgen Jr - Finance Examiner.com
To see how difficult it is for state's finances, we need to realize the depth of revenue receipts all around the nation, and not just in the populous states. ÊAfter the crash of the housing bubble, and the subsequent credit crisis, income tax, property tax, business tax, and other necessary revenues fell swiftly and deeply in nearly every corner of the nation.
In a report yesterday from the Politico, state revenues for 2009 experienced their biggest declines in 60 years.
Worst state revenue drop in 60 years
By: Jennifer Epstein - Politico.com
In a sign of the sluggish economy's devastating impact, state government revenue across the country dropped by nearly one third in 2009 - the sharpest decline in 60 years, the Census Bureau said in a new report.
States saw record-breaking losses to their pension funds and in their tax revenues, as the recession wreaked havoc on payrolls and investments,
Revenues plummeted by 30.8 percent, from $1.6 trillion in 2008 to $1.1 trillion in 2009, according to the report.
New York owes $200 billion in retiree health care costs -
but there's no money
by: David Gutierrez
(NaturalNews) New York State, along with its cities and counties, have promised $200 billion worth of retirement health care benefits to their employees, and no one knows where that money is going to come from, according to a study conducted by the Empire Center for New York State Policy.
Unless the governments in question figure out a way to raise that money, they will soon be forced to decide between paying the promised health care bills and paying other expenses, such as the $264 billion in bonds that they also owe. With rising health care costs, a faltering economy, and steady public opposition to higher taxes and bailouts, the problem is only likely to worsen in the coming years.
GOP to spendthrift states: The check will never be in the mail
By James Pethokoukis - Reuters.com
Exactly a month ago, I wrote a piece on a "secret GOP plan" to nudge fiscally troubled states in bankruptcy, giving their governors a chance to rewrite existing public employee union contracts and take other drastic measure to restore solvency. Step 1: Eliminate the Build American Bond subsidy to make it hard for states to borrow. [DONE] Step 2: Force states to reveal the true extent of their pension liabilities. [COMING SOON] Step 3. Rewrite the federal bankruptcy code [COMING SOON]. Two recent events give me further confidence in my call:
1) Note that Rep. Paul Ryan yesterday reiterated that the GOP had no interest in a state bailout. Here his exact words:
Can Illinois save itself? Illinois Nearing a Tax Deal?
By Megan McArdle - The Atlantic.com
The state of Illinois is allegedly close to a deal to nearly double its income tax, from 3% to 5.25%. In a separate action, it's also passed a law allowing it to collect sales tax from any online vendor (read: Amazon) with affiliates in the state.
The latter law doesn't make much sense to me. It is a cause near and dear to the hearts of state legislators everywhere, but so far the only effect has been to embroil states in endless litigation, while causing Amazon (and for all I know, other online retailers) to cut off its affiliates in the states that have tried it. The affiliate businesses are making a lot of noise about all the jobs that will be lost, but this is highly exaggerated; almost definitionally, businesses that make the bulk of their revenue off of Amazon referrals, don't employ that many people. But if it won't cost many jobs, it's hard to see how it raises revenue, either; Amazon will terminate its Illinois affiliates, causing the bigger businesses to move across the border to another state, while the smaller businesses simply lose taxable revenue.
Instead Of Using This Period Of Economic Stability To Party We Should Be Using It To Prepare
TheEconomicCollapseBlog.com
The fact that the official U.S. government unemployment rate has dipped slightly is good news. However, it is not the "economic turning point" that Barack Obama and others are proclaiming it to be. Rather, what we are in right now is "the calm before the storm". The massive amount of government spending that the U.S. government has done over the past few years and the massive quantities of new dollars that the Federal Reserve has been pumping into the system has bought us all just a little bit of time. Instead of using this brief period of economic stability to party, we should all be using it to prepare for the very hard economic times that are coming. Please do not get fooled when the short-term economic numbers go up or down a little bit. When evaluating the state of the U.S. economy, the key is to look at the long-term trends. The truth is that when you take a longer-term view, it becomes undeniable that the United States is in the midst of a long-term economic decline from which there is no escape.
Unfortunately, Obamacare Is Not Going To Be Repealed In 2010, It Is Not Going To Be Repealed In 2011 And There Is A Good Chance That It May Never Be Repealed
EndOfTheAmericanDream.com
Right now the mainstream media is paying a lot of attention to the effort by Republicans in the House of Representatives to repeal the health care reform law that Barack Obama and the Democrats crammed down the throats of the American people during the last session of Congress. House Republicans are calling their legislation the "Repealing the Job-Killing Health Care Law Act", and the House of Representatives is expected to pass the legislation on January 12th. However, there are two huge problems. One is that Democrats control the U.S. Senate and they have declared that there is not a chance in the world that a repeal of the health care reform law will get through them. Secondly, even if a repeal of the health care law did somehow magically get to Barack Obama's desk, he has sworn that he would veto it. So unfortunately, Obamacare is not going to be repealed any time soon.
The Health Care Repeal Rorschach
By Derek Thompson - The Atlantic.com
Any post about the GOP's efforts to repeal health care reform this week should begin with the following caveat: Health care reform will not be repealed, not ever, so long as Democrats control the White House and half of Congress; so this is a symbolic vote and an academic debate.
That said, a letter today from the Congressional Budget Office summarizing the effects of repealing the health care law offers an important glimpse into how Republicans and Democrats think differently about entitlements.
Over the 2012-2021 period, the effect of [repealing health care reform] is likely to be an increase in deficits in the vicinity of $230 billion...
Rep. Gabrielle Giffords (D-AZ) and Staff Shot at Event
By Joshua Green - The Atlantic.com
Awful news from Tuscson, Arizona, where Democratic congresswoman Gabrielle Giffords was just shot at point-blank range, along with at least six of her staffers, at a town hall event. Given the lack of details, one shouldn't jump to any conclusions, but this is exactly the sort of tragedy that so many people have privately (and some openly) been worrying about, as anger has increasingly suffused our national politics. I could be mistaken, but I believe Rep. Giffords was among those whose offices were vandalized during last fall's campaign. Few details yet on Gifffords's condition, that of her staff, the shooter or a possible motive. Here's hoping that this turns out not to be a politically motivated event, and that this terrible news doesn't get any worse.
Tucson shooting reported globally as evidence of charged U.S. political climate -- By William Booth - Washington Post
The shooting of Rep. Gabrielle Giffords (D-Ariz.) captivated many countries around the world, dominating the Sunday newspaper front pages and creating a buzz on social media sites, with commenters saying the attack confirmed their image of the United States as a deeply polarized nation brimming with angry rhetoric and gun nuts.
In Mexico, where vicious fighting among government forces and drug-trafficking organizations is a daily occurrence, news of the Arizona attack ran side-by-side with stories about a sensational slaughter in the resort city of Acapulco, where 15 decapitated bodies, with the heads scattered around them, were left at a shopping mall Saturday.
Gabrielle Giffords shooting reignites row over rightwing rhetoric in US Sarah Palin at centre of storm over political vitriol after spree leaves six dead and congresswoman in critical condition
By Ewen MacAskill in Washington - guardian.co.uk
The US was tonight seized by a fierce debate over whether inflammatory rightwing rhetoric was to blame for a shooting spree in Tucson, Arizona, that targeted congresswoman Gabrielle Giffords and left six dead, including a nine-year-old child.
Giffords, 40, who remains critically ill in hospital after being shot through the head but is expected to live, criticised Sarah Palin last year for putting her and 19 other Democrats on a hitlist of districts, each shown as being in crosshairs.
"Toning Down The Rhetoric" Means Obeying Big Government Establishment exploits actions of deranged lunatic to stifle freedom of speech
Paul Joseph Watson - Infowars
Despite the fact that Jared Lee Loughner was a psychotic loner with "left-wing" beliefs according to those who knew him, the establishment has hastily exploited yesterday's tragic shooting in Tucson to demonize conservatives, libertarians and gun owners while ordering Americans to "tone down the rhetoric," which is nothing more than a euphemism for stifling dissent and coercing people to roll over on Obamacare, bailouts and whatever big government is preparing to unleash next.
"The nation's caustic political climate has become a suspect of sorts in the rampage that left six dead and a lawmaker critically injured in Arizona. Already, appeals are being heard to tone down the rhetoric," reports the Associated Press, in doing so framing the debate and profiting from the actions of a deranged lunatic to launch a fresh assault on freedom of speech.
Tea party's message: Don't blame us
By KENNETH P. VOGEL - Politico.com
Across the political spectrum, the first reactions to the news of Rep. Gabrielle Giffords' shooting Saturday were horror and grief. For many in the tea party movement, another reaction quickly followed: Don't try blaming this on us, too.
The populist conservative movement - which exploded across the political landscape in 2009 in angry opposition to what activists saw as the overreaching big government agenda pushed by President Barack Obama and congressional Democrats - has from the beginning struggled to debunk a storyline that its fiery rhetoric pushed followers towards violence.
John Boehner seeks to calm rattled House over Gabrielle Giffords shooting
By JAKE SHERMAN - Politico.com
Only days after the crowning moment of his congressional career, rookie Speaker John Boehner is facing a stunning test of his leadership skills as he tries to bind up a jolted House of Representatives and set the right tone for this moment in American politics.
What's at stake is not only substantive - Boehner is seeking to calm the institution in a time of tragedy - but also political: He needs to make sure the Republican Party, whose conservative wing is under fire for its incendiary campaign rhetoric, stays on message. All this must happen while many are still personally coming to terms with the emotions and shock of an assassination attempt on one of its own, Rep. Gabrielle Giffords (D-Ariz.).
Gun control activists slam Arizona over Gabrielle Giffords shooting
By SHIRA TOEPLITZ - Politico.com
Gun control activists slammed Arizona for its gun laws Saturday, which allow almost any adult who can pass a federal background check to purchase a firearm.
Jared Lee Loughner, the alleged gunman in an incident that claimed the lives of six people and injured 13 others, including Rep. Gabrielle Giffords, legally purchased a semi-automatic pistol in the state, The Washington Post reported.
Paul Helmke of the Brady Campaign to Prevent Gun Violence told POLITICO that he hopes the incident will "start a discussion on what we can do to prevent these things from happening."
Obama Eyeing Internet ID for Americans
Posted by Declan McCullagh - CBSNews.com
STANFORD, Calif. - President Obama is planning to hand the U.S. Commerce Department authority over a forthcoming cybersecurity effort to create an Internet ID for Americans, a White House official said here today.
It's "the absolute perfect spot in the U.S. government" to centralize efforts toward creating an "identity ecosystem" for the Internet, White House Cybersecurity Coordinator Howard Schmidt said.
That news, first reported by CNET, effectively pushes the department to the forefront of the issue, beating out other potential candidates including the National Security Agency and the Department of Homeland Security. The move also is likely to please privacy and civil liberties groups that have raised concerns in the past over the dual roles of police and intelligence agencies.
Where We're Headed...
by Eric Peters -LewRockwell.com
I have a feeling that Refusenik types like me will be the next crop to be harvested. (The first being overt "threats" to the government.)
Everything's already in place; the circle is closing. Soon it will be impossible to pretend we still live in an even semi-free country.
I try to practice avoidance - for example, not flying anymore to avoid being scanned/felt up. But I know that eventually, it will be impossible - illegal - to avoid being scanned (and much else, besides). For example, they are going to require us all to carry a biometric National ID card - not merely a driver's license. Without it, you will be unable to function (legally) and be subject to arrest merely for going about your peaceful, harming no one else business without it. Just wait.
The choice will be: Become an outlaw - or submit.
US orders Twitter to hand over WikiLeaks records
By Anthony Boadle
WASHINGTON, Jan 8 (Reuters) - A U.S. court has ordered Twitter to hand over details of the accounts of WikiLeaks and several supporters as part of a criminal investigation into the release of hundreds of thousands of confidential documents.
The Dec. 14 subpoena obtained by the U.S. Department of Justice and published by online magazine Salon.com on Friday said the records sought from the microblogging website were "relevant to an ongoing criminal investigation."
Mystery of Mass Animal Death Epidemic Deepens Overeating and indigestion blamed for 1,000 turtle doves falling dead in Italy with strange blue stain on their beaks
By NICK PISA - MailOnline.co.uk
Thousands of dead turtle doves that rained down on roofs and cars in an Italian town were victims of their on greed, an expert claimed today.
Residents in Faenza described the birds falling to the ground like 'little Christmas balls' with strange blue stains on their beaks.
Initial tests on up to 1,000 of the doves indicated that the blue stain could have been caused by poisoning or hypoxia.
NSA Begins Construction of Massive Utah Data Center
Utah's NSA spy center will house data, not analysts
(KSL 5 News) - PublicIntelligence.net
Computers drawing enough electricity to power a small city will soon fill a National Security Agency data center on a 240-acre site where officials officially broke ground on Thursday.
But that does not mean Utah is about to see a significant influx of NSA analysts who would not be able to tell their neighbors what they do for a living. Most of the long-term staff at the NSA's Utah Data Center will have technical jobs, keeping the machines in the 100,000 square feet of computer space working - that within a complex that will include 1 million square feet of enclosed space.
Google violates [So. Korean] laws: police
KoreaHerald.com
Google's high-flying Street View service is in violation of Internet privacy laws here, police said Thursday.
According to the Cyber Terror Response Center, the National Police Agency's Internet crime unit, the conglomerate's Street View mapping service had gathered sensitive private information from unencrypted wireless networks during the filming process.
"We succeeded in breaking the encryption behind the hard drives, and confirmed that it contained personal e-mails and text messages of people using the Wi-Fi networks," said a police official.
This puts the Internet global conglomerate in violation of the country's law on protection of telecommunications privacy.
US concerned over China's rapid development of new weapons Defence secretary says Beijing, whose arms development is outpacing US intelligence estimates, could 'put some of our capabilities at risk'
Associated Press in Beijing - guardian.co.uk
US defence secretary Robert Gates says China's rapidly developing defence capabilities are worrisome to the US.
China has made strides in building a new stealth fighter jet and Washington is also concerned about a new ballistic missile that could theoretically explode an aircraft carrier nearly 2,000 miles (3,200 kilometres) out to sea. China has also apparently beaten US estimates to develop that weapon.
Gates arrived in Beijing today for talks about these weapons and other military issues with Chinese leaders.
US concerned over China's rapid development of new weapons
Defence secretary says Beijing, whose arms development is outpacing US intelligence estimates, could 'put some of our capabilities at risk'
Associated Press in Beijing - guardian.co.uk
US defence secretary Robert Gates says China's rapidly developing defence capabilities are worrisome to the US.
China has made strides in building a new stealth fighter jet and Washington is also concerned about a new ballistic missile that could theoretically explode an aircraft carrier nearly 2,000 miles (3,200 kilometres) out to sea. China has also apparently beaten US estimates to develop that weapon.
Gates arrived in Beijing today for talks about these weapons and other military issues with Chinese leaders.
Defense Secretary Gates:
U.S. underestimated parts of China's military modernization
By John Pomfret - WashingtonPost.com
BEIJING - The United States has been surprised by the pace of China's military development, Secretary of Defense Robert Gates said Saturday, acknowledging that U.S. intelligence has underestimated elements of the country's military modernization.
Gates spoke on board his plane as he headed to China on a mission to further patch together ties with China's military. Gates last visited China in 2007, and subsequently China suspended military contacts - twice - following U.S. decisions to sell arms to Taiwan.
A Conservative Communique for 2011
CONSERVATIVE ACTION PROJECT
The American Spectator.org (see supporters below article)
Along with nearly 100 conservative leaders and tea party activists we gather to reaffirm our principles of constitutional limited government and economic freedom and our belief in a strong national security and traditional American values. In the recent election, the American people sent a strong message to the President and both Houses of Congress that they insist upon government grounded in constitutional principles and a restoration of Federalism.
Now we call upon President Obama and leaders in Congress to return America to a true and prosperous Nation by passing legislation and implementing policies supported by the vast majority of our fellow citizens that achieve the following [see details for each, online]:
Repeal of Obamacare.
Sustained Economic Growth and Job Creation.
Ensure No American Pays Higher Taxes.
Cut Government Spending.
Protect America-An Exceptional Country.
Restore Traditional American Values.
No More Bailouts
Resist President Obama's Court Packing Scheme.
New Leaders with a New Opportunity.
Reading Between the Battle Lines of the Constitution
An Annotated Guide
NYTimes.com
In a reflection of the influence of the Tea Party movement, the new Republican majority has ordered that the United States Constitution be read on the floor of the House of Representatives on Thursday, the day after new lawmakers are sworn in. Congressional historians say they believe this has been done only twice before.
Despite the framers' stated intentions in the preamble to the Constitution, there is little "domestic tranquility" when it comes to interpreting what the document means.
The following is an annotated guide to the clauses most revered, and disputed, by advocates on either side of the political spectrum. Click on the titles in the "Contents" below for more explanation. -- KATE ZERNIKE
Never Mind the Constitution, the House Should Read the Federalist 78
By Andrew Cohen - The Atlantic
On this day of constitutional pomp and dubious circumstance, it is worth remembering that the benighted document the Republicans in the House of Representatives took the time to read Thursday was neither the beginning nor the end of the discussion in the 1780s (let alone today) about the separation of powers or the role of government in American life.
In a perfect world, following the recitation of the Constitution, House Republicans would have taken another hour or so to read, for example, The Federalist 78, Alexander Hamilton's trenchant 1788 exposition about the role of the judiciary in its interactions with the other branches. Written after the drafting of the Constitution in 1787, and before the introduction of the Bill of Rights in 1789, it seems eerily relevant today.
Reading the Constitution; Plus, the Passing of the Gavel - An Alternate Ending
By Doug Powers - MichelleMalkin.com
The Republican reading of the US Constitution is today. Hopefully somebody out there is forcing Joy Behar to watch it, Clockwork Orange-style, but that's probably too much to hope for.
The New York Times refers to the reading (watch here) as a "ritual of self-glorification." That's a funny thing to say coming merely a day after the outgoing Speaker talked for longer than the incoming Speaker, not to mention invited camera crews to a street being named in her honor and had Tony Bennett sing to her.
Meanwhile, in a semi-parallel universe where Tea Party dreams come true and the sharp blades of whirring debt ceiling fans clip the fingers of anyone who attempts to push it higher, Jimmy Kimmel offered this alternate ending to yesterday's passing of the gavel:
House Reading of Constitution Is Not Without Issues
By JENNIFER STEINHAUER - NYTimes.com
Setting the tone for the 112th Congress - in which every House bill must cite the constitutional source of its authority - members of House of Representatives began to read the United States Constitution aloud from the floor of their chamber Thursday morning.
Like the Constitutional Convention itself, things did not begin auspiciously.
Before the reading began, Jay Inslee, a Democrat from Washington, asked Republicans to illuminate exactly what part of the Constitution would be read, what parts would be deleted and who would decide how things would unfold.
Reading the Constitution in Congress: So Sensible Even a Teenager Gets It
BY BOOKWORM - NewsRealBlog.com
.... Daughter: That sounds like a really good idea, since the Constitution tells them what they can and can't do. Me: I agree. And how about this - The new Republican House has promised that every bill it writes (and a bill is what becomes a law if it gets the vote) will have at the top a statement about which Constitutional power the House believes authorizes it to pass that law. Do you think that's a good idea? Daughter: That's a wonderful idea!
The liberal media may be outraged that the current House is going back to the seminal contract that defines its powers, duties and limitations, but at least one future voter likes the idea that her government is trying to follow the rules.
Too FUNNY! ... Pelosi Passes Gavel to Boehner
Life without the Fed: The Suffolk System
Mises Daily: by C.J. Maloney
Suppose for a moment that Republican Congressman Ron Paul's fondest wish came true, and the Federal Reserve Bank was not only audited but closed down. As far-fetched as such a notion may seem, it would not be the first time in our nation's history that a central bank has been shuttered. For all the Fed's imposing grandeur, Ben Bernanke is running our third (albeit longest-running) try at a central bank. This country has lived without a central bank before and, if given the chance, could do so again. Most every American (led by Paul Krugman), though, would be horrified at the thought.
There are certain functions that, due to their nature, many would argue can only be provided by the political authorities - police and fire protection are the prime examples that come to mind. To the majority of modern men, central banking is without any doubt another. Yet, history tells us that it need not be a government-run affair - private individuals acting outside the bounds of political control have proven entirely capable of providing much the same functions as a central bank, and at a far lower cost, no less.[1] Such was the case with the Suffolk banking system, operated out of Boston from 1824 to 1858.
An Avalanche of Liquidity Threatens Us With Inflation
Bob Chapman - TheInternationalForecaster.com
January 5 2011: The power of the people to understand has never been greater, money supply zoomed up, money creation is the trap the Fed will be ensnared in, the rest of the world values gold and silver, hollow promises for the Euro, repossessions of real property, new laws in California, no way out of US shortfall.
With Ben Bernanke as our Shepard how can we go wrong? He tells us quantitative easing is not inflationary. He says that with assurance because he knows all the CPI statistics are as realistic as a Madoff Ponzi scheme. He also tells us he doesn't create money out of thin air. He fails to mention that he does so digitally. His job is to further enrich the elitists who own the Fed and want to create a new world order. Prices are up 6-3/4% across the board as official inflation has only risen 1.2%.
Japan's Fiscal Situation 'Approaching the Edge of a Cliff,' Sengoku Says
By Takashi Hirokawa and Aki It - Bloomberg.com
Japan's top government spokesman said the country's fiscal situation is "approaching the edge of a cliff," underscoring Prime Minister Naoto Kan's call for a national debate on raising the 5 percent sales tax.
Kan is "expressing his deep sense of crisis and resolution about the sustainability of social security as the aging population increases under a low birth rate," Chief Cabinet Secretary Yoshito Sengoku told reporters today in Tokyo. "The supporting fiscal conditions don't allow for any delays, it's finally approaching the edge of a cliff."
VAT and voodoo economics
By George Irvin - EUObserver Political Economy 101
Whatever else can be said about the British Chancellor, George Osborne, he certainly does not lack chutzpah. His latest canonical pronouncement is that VAT (value added tax) is a progressive tax. For sheer guile, this statement must rank alongside Arthur Laffer's famously misleading advice to Ronald Reagan that cutting income tax for the rich would actually increase tax revenue, a statement (rightly) dismissed by the then US Vice-President, George H W Bush, as 'vodoo economics'.
How does Osborne justify his position? The simplest argument-as advanced on 4 January by the BBC's flagship Newsnight programme-is that VAT is progressive because the poor pay less in absolute terms than the rich; ie, if (say) you earn only £10 a day, the £2 you pay in VAT is far less than the £20 in VAT paid by somebody on £100 a day. Since £20 is greater than £2, the conclusion is that the rich 'shoulder the heaviest burden'. Note that this holds true even if the rich man saves half his £100-a-day income, paying total VAT of only £10. The accompanying diagram illustrates admirably how to mislead the public with numbers.
Europe unveils sweeping plans to govern reckless banks Brussels has called for sweeping powers for EU regulators to seize failing banks, sack board members, and impose haircuts on senior bank debt, aiming to ensure that taxpayers are never again held hostage by high finance.
By Ambrose Evans-Pritchard - Telegraph.co.uk
The European Commission's "Framework for Bank Recovery and Resolution" draws on Scandinavia's hard-line approach during their banking crises in the early 1990s. The goal is to end the pattern of moral hazard and mispricing of risk that generated Europe's debt woes.
"Banks will fail in the future and must be able to do so without bringing down the whole financial system," said Michel Barnier, the internal market commissioner Mr Barnier's consultation paper will lead to a "legislative proposal for a harmonized EU regime" as soon as this summer, with an insolvency structure in place by 2012.
The final phase will be the creation of a European Resolution Authority by 2014, adding a fourth pillar to the new EU's architecture of financial regulation. EU authorities typically have their own permanent staff and powers to override national bodies.
Markets snap up EU bonds for Ireland in first attempt to raise cash
LEIGH PHILLIPS - EUObserver.com
EUOBSERVER / BRUSSELS - Investors have snapped up the first set of bonds issued by the European Union in its efforts to raise cash as part of an €85 billion bail-out of debt-encumbered member state Ireland.
A €5 billion, five-year issuance sold out in one hour on Wednesday (5 January), according to the European Commission, which was pleased to see that demand had been three times what was being offered.
The sums were raised under the rubric of the European Financial Stablisation Mechanism (EFSM), guaranteed by the EU budget. The EFSM is to deliver €22.5 billion to Ireland as part of the broader €85 billion aid package.
Hungarian law endangers press freedom
ASSOCIATION DE LA PRESSE INTERNATIONALE
EUOBSERVER / COMMENT - API, the association of Brussels-based international journalists, is concerned that the new Hungarian law on media services and mass communication endangers media freedom.
The legislation came into force on the day Hungary assumed the presidency of the European Union for the next six months. During this period Brussels-based correspondents will be dealing continuously with representatives and officials of the Hungarian government.
The correspondents will fulfill their task to inform readers, listerners and viewers about the proceedings of the Hungarian presidency in an independent, objective and professional way. This also means they will ensure the principles of respect for the freedom of expression and a free media are upheld.
December Retail Sales Are Weaker Than Expected
By STEPHANIE CLIFFORD - NYTimes.com
Christmas wasn't quite so festive for many retailers.
Sales at stores open at least a year rose 3.1 percent in December compared with the same month a year ago, according to a tally of 28 retailers by Thomson Reuters. That was below analysts' expectations of 3.4 percent, a prediction buoyed by reports of rising foot traffic, online spending and early holiday sales.
Though December was weaker than expected, the overall holiday season was still relatively strong, analysts said, especially when November's 6 percent increase in sales is taken into account.
Geithner Urges Congress to Increase Debt Limit
By JACKIE CALMES - NYTimes.com
The Obama administration has formally urged Congress to increase the government's borrowing limit, now $14.3 trillion, as early as the end of March and no later than May 16 to avoid an unprecedented default.
The letter from Treasury Secretary Timothy F. Geithner arrived a day after a new Congress convened with Republicans now holding a majority in the House and a larger minority in the Senate, and with many of the newcomers pledged to vote against any increase in the debt limit.
Raising it is among the least popular actions that Congress must take and legislative brinkmanship between presidents and lawmakers has played out a number of times in past decades. The coming months promise to add another chapter to the history of budget showdowns: Republicans have said that they will try to force President Obama to accept deep cuts in domestic spending as the price for enough Republican votes to lift the limit.
America's Pensionless Future
BY ROBERT MORLEY - theTrumpet.com
The first debt bomb has already detonated. Is it the first explosion in a nationwide chain reaction?
Want to see the future? Go to Prichard, Alabama. It is a city with a sobering lesson for America and for millions of people who think the good times are about to return.
What draws our attention here?
Nothing. That's what's startling. There is hardly anything going on here anymore. Prichard in 2011 is a rundown, decaying, derelict collection of overgrown, boarded-up old buildings. Around them, abandoned homes litter a landscape crisscrossed with cratered roads and trash-strewn streets. The only thing making any noise is the graffiti.
Why the silence? It's because 40 percent of the population of Prichard isn't there. And the few remaining businesses operate from behind barred windows and guard dogs.
As JP Morgan & Other Banks Legal Costs Spike, Many Should Ask If It Was Not Obivous Years Ago That This Industry May Become The "New" Tobacco Companies
By Reggie Middleton - ZeroHedge.com
In October, I posted The Robo-Signing Mess Is Just the Tip of the Iceberg, Mortgage Putbacks Will Be the Harbinger of the Collapse of Big Banks that Will Dwarf 2008! and As Earnings Season is Here, I Reiterate My Warning That Big Banks Will Pay for Optimism Driven Reduction of Reserves. Time will tell if I am correct, but the trends are still moving in my favor. From Bloomberg:
JPMorgan Chase & Co. and the biggest U.S. banks face billions of dollars in legal costs related to their role in the financial crisis, threatening their profits and the stock price gains they made in 2010, analysts said.
JPMorgan, the second biggest bank by assets, reported $5.2 billion of legal costs in the first nine months of 2009, compared with a gain of $10 million in the same period a year earlier. The costs would rise if the bank reserves for multibillion-dollar lawsuits by Lehman Brothers Holdings Inc. and the trustee liquidating Bernard L. Madoff's firm.
Geithner Urges Debt Limit Increase, Warns of Default
By Rebecca Christie and Ian Katz - Bloomberg.com
Treasury Secretary Timothy F. Geithner today urged lawmakers to raise the federal debt limit in the first quarter of 2011, saying a failure to act could make it impossible for the U.S. to access global credit markets.
If Congress does not raise the debt limit, "the Treasury would be forced to default on legal obligations of the United States, causing catastrophic damage to the economy, potentially much more harmful than the effects of the financial crisis of 2008 and 2009," Geithner said in a letter to Speaker of the House John Boehner, Senate Majority Leader Harry Reid and all other members of Congress.
Volcker's Future as Obama Adviser Uncertain
BY SEWELL CHAN - NYTimes.com
WASHINGTON - The economic advisory panel that President Obama established at the start of his term is set to expire in a month, and its future - and that of its chairman, Paul A. Volcker - remains unclear.
The panel, the President's Economic Recovery Advisory Board, was established on Feb. 6, 2009, with a two-year mandate. That mandate could be extended by an executive order.
So far, the president has not given a clear indication of his plans, but it appears that he intends to do so on Friday when he announces a new director of the National Economic Council and discusses the monthly unemployment figures.
Sperling Is Said to Be Obama's Choice for Economic Post, Replacing Summers
By Julianna Goldm - Bloomberg.com
President Barack Obama will name Gene Sperling, a counselor to Treasury Secretary Timothy Geithner, as head of the National Economic Council, according to a person familiar with the matter.
Sperling, 52, is returning to the post he held from 1997 to 2001 under former President Bill Clinton. He replaces Larry Summers, who was NEC director for the first two years of Obama's presidency and left last month to return to Harvard University.
Obama is set to announce several appointments to his economic team tomorrow. They are among a series of changes for the White House staff as the president enters the second half of his term and prepares for a campaign for re-election in 2012. Obama later today will name William Daley, a JPMorgan Chase & Co. executive and former commerce secretary, as his new chief of staff, administration officials said.
I.R.S. Watchdog Calls for Tax Code Overhaul
By DAVID KOCIENIEWSKI - NYTimes.com
The various calls to revamp the nation's highly complex tax code were joined by a significant new voice on Wednesday - the I.R.S.'s own taxpayer advocate, who urged that the system be rewritten for the first time in a generation.
Nina E. Olson, the national tax advocate who acts as an ombudsman for the I.R.S., issued a sweeping criticism of federal tax policy in her annual report to Congress. Ms. Olson found that the volume of the tax code had nearly tripled in size during the last decade - to 3.8 million words in February 2010 from 1.4 million in 2001. She estimated that Americans spent 6.1 billion hours preparing their returns each year - the equivalent of 3 million employees working full time. By comparison, the federal payroll has 2.1 million full-time workers.
Democrats Plan Attack on Republican Repeal Effort
By MICHAEL D. SHEAR - NYTimes.com
Democratic leaders in Washington plan to spend the next week doing what they all but refused to do in the 2010 midterm elections: mount a vigorous defense of President Obama's health care legislation.
The "all fronts" plan is a response to the decision by the new House speaker, John A. Boehner, to schedule a vote next Wednesday on a complete repeal of the health care law that Mr. Obama signed last March.
Senior Democratic officials said their effort would be managed by a rapid response operation modeled after the ones Mr. Obama used in his presidential campaign. That team will monitor Republican claims, send out fact-checks and deploy a team of surrogates to get their views on television.
Ending ObamaCare
by Tait Trussell - FrontPageMag.com
The knives - and scalpels - are out to cut ObamaCare to ribbons or administer beneficial plastic surgery. Here are developments that can accomplish a coup d'etat or probably bring more rational health care to America.
Even with 87 new Republicans joining the new House of Representatives, a repeal bill has a steep hill to climb. But Rep. Steve King (R-Iowa) has said it is important to go through the process even if the Senate rejects such a kill or the President vetoes it. The Rasmussen Poll shows "59 percent of the voters favor repealing it. And it's important to respond to the voters."
CBO and ObamaCare Repeal
By Philip Klein - The American Spectator.org
Liberals are touting a new report by the Congressional Budget Office estimating that repealing the national health care law would add $145 billion to the deficit from 2012 to 2019, and $230 billion through 2021. These estimates should come as no surprise, because, aside from a few technical changes and updates, they are based on CBO projections from when the health care care law passed last March. These projections reflected the Democrats' use of a number of accounting gimmicks, without which, the CBO separately acknowledged the law would actually run up deficits. As Paul Ryan notes, the reality is that the national health care law is a "fiscal train wreck." The CBO deficit reduction number does not factor in double counting of Medicare savings and other revenue sources, and it doesn't include $115 billion in costs needed to implement the law. Also, even if you take the CBO numbers at face value, what it boils down to is that over the next several decades, the federal government is raising taxes and cutting Medicare to pay for trillions in new spending. Increasing federal obligations is not an effective tool for long-term fiscal health, because any savings (or revenues) claimed by the new law would no longer be available for shoring up entitlements.
Did Government's Share of Health Care Spending Really Shrink?
By Philip Klein - The American Spectator.org
The Obama administration has released its annual report on national health care expenditures, and news organizations are seizing on the headline figures showing that as a result of the recession, health care spending rose at a relatively modest 4 percent clip in the United States in 2009 while accounting for a record 17.6 percent of the U.S. economy given the lower gross domestic product. But Cato's Michael Cannon delved a bit deeper into the numbers and discovered something unusual -- the administration's Centers for Medicare and Medicaid Services, which issues the report, reclassified some public spending as private, which makes the government's role in health care appear smaller than it did previously. Interestingly, this comes at a time when government's share of spending was closing in on the 50 percent mark, and when the Obama administration fending off charges that last year's national health care law represents a government takeover of medicine.
Daley to Become Next White House Chief of Staff
By MICHAEL D. SHEAR and JACKIE CALMES - NYTimes.com
William M. Daley will become the next White House chief of staff, Obama administration officials said Thursday. A senior executive with JPMorgan Chase and a former commerce secretary in the Clinton administration, Mr. Daley will bring an outsider's voice and decades of business experience to the West Wing.
President Obama is expected to make the personnel announcement at 2:30 p.m. Pete Rouse, the interim chief of staff and a longtime friend of the president's, will become a counselor to Mr. Obama, officials said.
Obama's radical judicial nominees are back
By Michelle Malkin
President Obama just can't let go of far Left San Francisco liberals out of touch with mainstream America - and the law.
After dropping two controversial Bay Area judicial nominees from his slate before Christmas, Obama has resurrected the bids of 9th Circuit nominee Goodwin Liu and US Magistrate and ethnic-card jurist Edward Chen and renominated several dozen other candidates.
Land-Backed Securities: Time to Bulldoze Excess Housing Inventory?
BY ADAM QUINONES - MortgageNewsDaily.com
Yesterday we called attention to a Caroline Baum column on Bloomberg that suggested housing needs an act of God for home prices to recover quickly. Below is an excerpt from her commentary...
How I Missed the 'Housing Recovery' of 2010: Caroline Baum
"The U.S. just experienced the biggest speculative boom/bust in housing in history, a massive outward shift in the supply curve. Anyone expecting home prices to rise in the face of a glut of unsold homes is counting on either an act of God to destroy huge swaths of the housing stock (a shift back in the supply curve) or an influx of new immigrants needing shelter (a shift out in the demand curve.) Neither is likely, although acts of God are notoriously hard to predict."
How I Missed the 'Housing Recovery' of 2010
Commentary by Caroline Baum
Jan. 3 (Bloomberg) -- When I saw the headline last week, "Housing Recovery Stalls," my first reaction was to kick myself for having missed yet another milestone in the U.S. economy's long rehabilitation process.
Then I came to my senses. What housing recovery? If there is, or was, one, it is nowhere to be found in the data. Homebuilder sentiment, new home sales and single-family housing starts, which, in that order, lead the complex of residential real estate indicators, are bumping along the bottom. There was no recovery to stall.
There was a brief incentive-driven pick-up in sales in 2009 and the first half of 2010 that faded the minute the home purchase tax credit expired.
Foreclosures May Be Undone by Massachusetts Ruling on Mortgage Transfers -- By Thom Weidlich - Bloomberg.com
Massachusetts's highest court is poised to rule on whether foreclosures in the state should be undone because securitization-industry practices violate real- estate law governing how mortgages may be transferred.
The fight between homeowners and banks before the Supreme Judicial Court in Boston turns on whether a mortgage can be transferred without naming the recipient, a common securitization practice. Also at issue is whether the right to a mortgage follows the promissory note it secures when the note is sold, as the industry argues.
A victory for the homeowners may invalidate some foreclosures and force loan originators to buy back mortgages wrongly transferred into loan pools. Such a ruling may also be cited in other state courts handling litigation related to the foreclosure crisis.
The 10 Biggest U.S. Cities That Risk Running Out of Water
Some of the nation's largest metropolitan areas are in danger of running out of water in the next decades, according to a survey of studies conducted by 24/7 Wall St.
We consulted a range of sources, including an October 2010 report on water risk by environmental research and sustainability group CERES, a July 2010 report from the National Resources Defense Council, and our own independent analysis of water supply and consumption in America's 30 largest cities. Using these sources, we created a ranking of cities likely to face severe water shortage in the near future. Above are the ten largest cities, by population, that have a significant chance of going dry in the decades to come.
The top 10 most at risk of drought are:
Orlando, FL
Los Angeles, CA
Houston, TX
Phoenix, AZ
San Antonio, TX
San Francisco, CA
Fort Worth, TX
Las Vegas, NV
Tucson, AZ
Atlanta, GA
Classical Liberalism and the Single Tax on Land
Mises Daily: by Murray N. Rothbard
[Excerpted from An Austrian Perspective on the History of Economic Thought, vol. 1, Economic Thought Before Adam Smith (1995).]
Natural-rights, laissez-faire libertarians always confront several problems or lacunae in their theory. One is taxation. If every individual is to have inviolable property rights, and those rights are to be guaranteed by the government, taxation, itself an infringement of property rights, presents an immediate problem to laissez-faire theorists. For how high should taxes be, and who should pay them?
Classical liberalism, however inchoate, had been born in France as an opposition to the statist absolutism of King Louis XIV in the latter decades of the 17th and the early years of the 18th century. A favorite program of these liberals, as set forth by Marshal Vauban and by the Sieur de Boisguilbert, among others, was a single tax, a proportional tax on all income or property. The idea was that this simple, direct, universal tax would replace the monstrous and crippling network of taxation that had grown up in 17th-century France.
Goldman employees get Facebook tutorial Goldman employees got a private tutorial on the site from Facebook Chief Financial Officer David Ebersam.
Crain's NY Business
(Bloomberg) - Now that Goldman Sachs Group Inc. has invested $450 million in social-networking company Facebook Inc. it wants to make sure employees know how the website works.
They got a lesson Tuesday from David Ebersman, Facebook's chief financial officer, who walked members of the bank's private wealth-management group through the basics during a presentation at Goldman Sachs's San Francisco office, according to a person who listened in and asked not to be identified because the meeting was private.
Goldman Sachs, which discourages its employees from using social-networking sites at work, invested $450 million in Palo Alto, Calif.-based Facebook, according to three people familiar with the matter. The private-wealth unit is planning to create a special-purpose vehicle for its clients to make additional investments worth as much as $1.5 billion.
Verizon said to start offering iPhone in January Verizon Wireless, the largest U.S. mobile-phone company, will start selling Apple Inc.'s iPhone this year, ending AT&T's exclusive hold on the smartphone in the U.S.
Crain's NY Business
(Bloomberg) - Verizon Wireless, the largest U.S. mobile-phone company, will start selling Apple Inc.'s iPhone this year, ending AT&T Inc.'s exclusive hold on the smartphone in the U.S., two people familiar with the plans said.
The device will be available to customers as early as January 2011, according to the people, who declined to be named because the information isn't public. Natalie Kerris, an Apple spokeswoman, and Jeffrey Nelson, a Verizon Wireless spokesman, declined to comment.
The iPhone, which has been the sole domain of rival AT&T in the U.S. since June 2007, will give Verizon a boost in its competition for smartphone customers, UBS AG analyst John Hodulik said in an interview. Verizon customers, who numbered 92.8 million at the end of the first quarter, may buy 3 million iPhones a quarter, he estimates.
U.N. Data Notes Sharp Rise in World Food Prices
By WILLIAM NEUMAN - NYTimes.com
World food prices continued to rise sharply in December, bringing them close to the crisis levels that provoked shortages and riots in poor countries three years ago, according to newly released United Nations data.
Prices are expected to remain high this year, prompting concern that the world may be approaching another crisis, although economists cautioned that many factors, like adequate stockpiles of key grains, could prevent a serious problem.
The United Nations data measures commodity prices on the world export market. Those are generally far removed from supermarket prices in wealthy countries like the United States. In this country, food price inflation has been relatively tame, and prices are forecast to rise only 2 to 3 percent this year.
To Bee Or Not To Be?
Washington's Blog
Bees - upon which the entire human food chain rests - are suffering a sharp decline.
As the Guardian pointed out Monday:
The abundance of four common species of bumblebee in the US has dropped by 96% in just the past few decades, according to the most comprehensive national census of the insects [a three-year study published in the Proceedings of the National Academy of Sciences].
***
Sydney Cameron, an entomologist at the University of Illinois, led a team on a three-year study of the changing distribution, genetic diversity and pathogens in eight species of bumblebees in the US.
Here comes the NWO - Keep your eye on Javier Solana - Is he the one who will step onto the world's stage to 'assume leadership' for one-world governance and fulfill the NWO agenda and Biblical prophecy regarding the antichrist?
Watch it, maybe several times, to get full import of his remarks about our 'overcrowded planet.' This is a typical Club of Rome propaganda line. Read more about Javier Solana on Constance Cumbey's blog.
At CEU, Javier Solana talks about our rapidly expanding world
Former EU leaders challenge Ashton on Israel Solana comes out of the wings
ANDREW RETTMAN - EUObserver.com
EUOBSERVER / BRUSSELS - A large group of former EU leaders and commissioners, including Catherine Ashton's predecessor Javier Solana, has urged the Union to take sanctions against Israel on settlements. But Ms Ashton's reply indicates the plea will go unheard.
The group in a letter to EU capitals and the leaders of the EU institutions on 6 December, seen by EUobserver, says that Israel "like any other state" should be made to feel "the consequences" and pay "a price tag" for breaking international law by building thousands of new Jewish homes on Palestinian land.
It asks EU foreign ministers at a meeting in Brussels on 13 December to state as doctrine that the EU: "Will not recognize any changes to the June 1967 boundaries, and clarify that a Palestinian state should be in sovereign control over territory equivalent to 100 percent of the territory occupied in 1967, including its capital in East Jerusalem."
Attacks on Christians Show an Islamic Future for Egypt
From theTrumpet.com
A radical Egypt would change the world.
The attack on a Coptic Christian church 30 minutes into 2011 shows the growing power of Islamists. Stratfor's George Friedman explains that the attacks could point to a resurgence of radical Islam in Egypt. A radical Egypt, he explains, would be dangerous for the whole world.
Friedman explains that the attack on the Coptic church was unusual for Egypt both in its size and the choice of target. Egypt usually suffers few terrorist attacks, and when they have occurred, they have usually targeted tourists.
The fact that the attack occurred at the same time that churches were attacked in Nigeria and after al Qaeda threatened Egyptian Copts last month indicates that the Egyptian attacks could be part of a coordinated campaign.
EU to keep China arms embargo despite massive investments
By ANDREW RETTMAN - EUObserver.com
EUOBSERVER / BRUSSELS - Catherine Ashton has failed to persuade the UK and other Beijing-critical member states to lift the EU arms embargo on China. But China is continuing to build influence in the Union with bond purchases from vulnerable countries.
"There remains a broad consensus within the EU that the time is not right to lift the arms embargo. We need to see clear progress on the issues that necessitated the embargo in the first place, namely on civil liberties and political rights," a British diplomat told EUobserver on Tuesday (4 January) in response to speculation on a potential shift in EU policy, which would require agreement by all 27 EU members.
Blood test could spot Alzheimer's
Test would look for antibodies that help body attack a range of diseases, researchers say
By Julie Steenhuysen - Reuters via MSNBC.com
CHICAGO - U.S. researchers have developed a way to harness the immune system to test for Alzheimer's, an approach they say could lead to a blood test for the disease within months.
A study of the technology showed it accurately spotted Alzheimer's in blood samples from six people with the disease, Thomas Kodadek of the Scripps Research Institute in Jupiter, Florida, wrote Thursday in the journal Cell.
The approach may work in other diseases, like cancer, Kodadek said in a telephone interview.
The test looks for antibodies, or immune-system proteins, that help the body attack foreign invaders.
US lets BP off the hook Gulf oil spill: BP set to avoid gross negligence charge US commission blames 'systemic' causes for spill and analysts say inquiry unlikely to contradict findings
Tim Webb - guardian.co.uk
BP is more likely to escape the potentially ruinous charge of gross negligence, according to City analysts, after a powerful US commission blamed "systemic" causes for the Gulf of Mexico disaster.
Barack Obama's national commission released part of its final report into the disaster last night on Wednesday night. The report, to be published next week, could influence several other parallel investigations into the spill that are yet to finish.
The commission was scathing in its criticism of BP, as well as its contractors Halliburton and Transocean, which it blamed for a collective "failure of management". But it added that it had found no evidence that the blowout which led to last April's disaster was the result of "aberrational decisions made by rogue industry or government official.
U.S. Jump-Starts Bid to End Truck Dispute With Mexico
By JOSH MITCHELL - WSJ.com
The Obama administration launched a bid to resolve a festering trade dispute with Mexico over allowing foreign truckers onto U.S. roads.
Transportation Secretary Ray LaHood said Washington would seek talks with Mexico over a U.S. ban on that country's trucks operating north of the border. The ban has prompted Mexico to slap punitive tariffs on some $2 billion in U.S. goods.
Mr. LaHood sent a blueprint to Congress outlining principles the White House would push. Mr. Obama could end the ban without congressional approval, but he is seeking to get key Democrats and others on board.
David Horowitz at UCSD 5/10/2010.
Hosted by Young Americans for Freedom and DHFC
David Horowitz Chilling Exchange With Muslim Student
follow-up interview to the above video
U.S. commander: Al-Qaida targeting Iraq's Christians
Bomb blasts at homes follow attack on Syrian Catholic Church
BAGHDAD - Al-Qaida in Iraq is targeting Christians in their homes after Iraqi authorities increased protection around the minority group's churches, a U.S. commander said on Thursday.
Lieutenant General Robert Cone, the U.S. deputy commanding general for operations in Iraq, said the Sunni Islamist group seemed determined to continue attacks against Christians following a siege of a Catholic cathedral two months ago.
"Al-Qaida has shifted to try and go after the Christians where they live," Cone told Reuters in an interview.
WikiLeaks: Secret whaling deal plotted by US and Japan American diplomats proposed Japan reduce whaling in exchange for US help cracking down on the anti-whaling activists Sea Shepherd, leaked cables reveal
John Vidal, environment editor - guardian.co.uk
Japan and the US proposed to investigate and act against international anti-whaling activists from the Sea Shepherd Conservation Society as part of a political deal to reduce whaling in Antarctic waters.
Four confidential cables from the US embassy in Tokyo and the state department in Washington, released by WikiLeaks, show US and Japanese diplomats secretly negotiating a compromise agreement ahead of a key meeting last year of the International Whaling Commission, the body that regulates international whaling.
U.S. Plans to Send 1,400 More Marines to Afghanistan
By ELISABETH BUMILLER - NYTimes.com
WASHINGTON - The United States will send an additional 1,400 Marines to Afghanistan in the next few months to try to solidify progress in areas of the south before troop reductions begin in the summer, a senior military official said on Thursday.
The Marines will be sent mostly to Kandahar province, the spiritual home of the Taliban and already an area of intense fighting by U.S. Army troops. American military officials say they have routed the Taliban from crucial areas of the province, but commanders remain under pressure to sustain that progress, as the White House examines whether a troop surge for the nearly decade-old war is working.
China and U.S. Have 'Useful' Talks on North Korea
By MICHAEL WINES and KEVIN DREW -NYTimes.com
BEIJING - On the heels of a North Korean plea for negotiations to end the crisis on the Korean Peninsula, the Obama administration's top envoys on North Korean issues met on Thursday with their Chinese counterparts for what American officials later called "useful" discussions.
The talks followed a stop on Tuesday and Wednesday in Seoul at which the American special envoy, Stephen Bosworth, said he was hopeful that serious negotiation on North Korea would begin soon.
Mr. Bosworth and Ambassador Sung Kim, the United States envoy to the suspended six-party talks on North Korea's nuclear program, met in Beijing with Vice Foreign Minister Zhang Zhijun and Wu Dawei, China's representative to the talks, as well as Wang Jiarui, a senior foreign affairs official in the Communist Party's International Department.
Thanks to: ANoTHeR DaY ANoTHeR DeBT
by williambanzai7 - ZeroHedge.com
(click thumbnails below to see larger images)
Economic Consequences Of The "New World Order"
By Giordano Bruno - Neithercorp Press - 1/05/2010
A common misconception among less aware segments of the American populace is that the phrase "New World Order" was concocted by attention seeking "conspiracy theorists" in dank basement apartments and sinister mountain shacks across the country. In reality, anti-globalists and Constitutionalists had nothing to do with the term's creation (and most of us have decent digs, too). The truth is that mumblings of a "New World Order" have been floating around various elitist circles for decades, and every once in a while, those mumblings are publicized in the mainstream media. Globalists created the warped ideal; we just point out that it exists. Lately, we haven't had to try very hard...
The Rise of the New Global Elite
By CHRYSTIA FREELAND - The Atlantic
F. Scott Fitzgerald was right when he declared the rich different from you and me. But today's super-rich are also different from yesterday's: more hardworking and meritocratic, but less connected to the nations that granted them opportunity - and the countrymen they are leaving ever further behind.
IF YOU HAPPENED to be watching NBC on the first Sunday morning in August last summer, you would have seen something curious. There, on the set of Meet the Press, the host, David Gregory, was interviewing a guest who made a forceful case that the U.S. economy had become "very distorted." In the wake of the recession, this guest explained, high-income individuals, large banks, and major corporations had experienced a "significant recovery"; the rest of the economy, by contrast - including small businesses and "a very significant amount of the labor force" - was stuck and still struggling. What we were seeing, he argued, was not a single economy at all, but rather "fundamentally two separate types of economy," increasingly distinct and divergent.
Economic Suicide
By William Pfaff - Truthdig.com
Is it a case of murder, or has the Western economy deliberately, if unwittingly, attempted suicide and nearly succeeded?
John Maynard Keynes was not just talking about defunct economists when he wrote that the world is commonly ruled by dead ideas, its leaders the slaves of the past. He said, "Indeed the world is ruled by little else." If he were alive today, he could name management consultants and business gurus among those responsible for the economic crisis of the present day.
As 2011 begins, people still talk about the crisis of the Western economy as though we have been the victims of a blight from nowhere, like Haitians in a hurricane or blackbirds in Arkansas. No individual is held guilty for anything - certainly none of the leaders of finance or business who insisted that markets know best, or the political leaders who empowered them.
Is the Fed Robbing Us Blind?
The American Dream
The Debt Ceiling Debate Really Doesn't Matter Either Way U.S. Government Finances Are Going To Crash
EndOfTheAmericanDream.com
Congratulations America, you are now 14 trillion dollars in debt. The U.S. national debt is now more than 14 times larger than it was just 30 short years ago. The federal government is literally drowning in debt. Now some members of Congress are actually debating whether we should raise the debt ceiling again. At the moment, the U.S. government debt ceiling is is set at $14.294 trillion, and considering the fact that the U.S. government is borrowing approximately 2.63 million more dollars every single minute, that cap will be reached very quickly. The U.S. Congress has raised the federal debt ceiling six times in just the past three years, so you would think that raising it again would not be that big of a deal for our debt-addicted politicians. But this past November a significant number of Tea Party candidates were elected to the U.S. House of Representatives, and they are eager to prove that they are serious about fiscal responsibility.
The Debt-Ceiling War: Wall Street Could Be a Casualty
By CHARLES WALLACE - DailyFinance.com
When the new Congress meets for the first time this week, debt and government spending will sit firmly at the top of its agenda. Unlike past debates, this one could have a chilling effect on Wall Street -- as worried traders wonder if the U.S. could end up on the same chaotic economic path taken by Greece or Spain.
No one really thinks the U.S. can't pay its bills anymore. But a threat by some Republicans to vote against raising the debt ceiling -- currently at around $14 trillion -- could cause major headaches for investors in the near future. The government is expected to hit that ceiling at some point in the next few months, possibly as early as March.
Playing a "Game of Chicken"
2011 - The year when money starts to die
FinanceAndEconomics.org
Between 1716 and 1720, John Law tried to rescue the French government from bankruptcy with a scheme that came to be called "The Mississippi Bubble". His strategy was to set up two entities: a bank whose purpose was to issue paper money, and a company whose primary but undeclared function was to refinance government debt. Law realised that he had to confiscate all gold and silver other than smaller quantities, and force French citizens to pay their taxes and buy shares in the Mississippi Company, only with the bank's newly issued notes. These were the three essential elements of his scheme.[i]
This is precisely what central banks in the US, Europe, Japan and the UK are doing today. They are rigging the markets by buying government debt at artificially high prices with freshly created paper money, having previously excluded gold and silver from any role as legal tender. The following quote from John Law, could equally be attributed to a central banker of today: "An abundance of money which would lower the interest rate to two per cent would, in reducing the financing costs of the debts and public offices etc. relieve the King." This is quantitative easing, pure and simple, and John Law had fully anticipated modern central banking. Law's scheme ended in disaster and as a precedent for today's central banking this should worry us greatly.
pt 1/2 Gerald Celente on The Gary Null Show 01/03/11
pt 2/2 Gerald Celente on The Gary Null Show 01/03/11
ARE LIBERALS COMING OUT OF THE CLOSET ON THE CONSTITUTION?
By John Hinderaker - PowerLine.com
We have written many times about the Progressive movement and its open hostility toward both the Constitution and the Declaration of Independence. We have also noted that modern progressives have generally had the good political sense to keep their opinions about the Constitution to themselves, beyond whatever critique is implicit in terming it a "living" document that is liable to call forth previously unknown "rights" at any moment.
Today's New York Times editorializes on the Republican takeover of the House. You could paraphrase the editorial as "wah-wah-wah;" the paper basically cries over its party's November defeat. But in the course of doing so, the editorialists are surprisingly open about their contempt for the Constitution:
Pomp, and Little Circumstance
NYTimes.com
A theatrical production of unusual pomposity will open on Wednesday when Republicans assume control of the House for the 112th Congress. A rule will be passed requiring that every bill cite its basis in the Constitution. A bill will be introduced to repeal the health care law. On Thursday, the Constitution will be read aloud in the House chamber. And in one particularly self-important flourish, the new speaker, John Boehner, arranged to have his office staff "sworn in" on Tuesday by the chief justice of the United States.
Those who had hoped to see a glimpse of the much-advertised Republican plan to revive the economy and put Americans back to work will have to wait at least until party leaders finish their Beltway insider ritual of self-glorification. Then, they may find time for governing.
What Constitutes a Gold Standard
Mises Daily: by Edwin Walter Kemmerer
[Excerpted from Gold and the Gold Standard (1944).] Definition and Explanation
The generic gold standard may be briefly defined as a monetary system where the unit of value - in terms of which prices, wages, and debts are customarily expressed and paid - consists of the value of a fixed quantity of gold in a large international market that is substantially free.[1]
This definition calls for some explanation. It contains no mention of gold coin or of free coinage of gold. Both of these may be of great convenience and may facilitate the efficient operation of a gold standard, but neither is necessary to the existence of a gold standard. The gold-bullion standard, and the gold-exchange standard, does not ordinarily make any provision for the minting and circulation of gold coins, but both of these standards are clearly forms of the gold standard.
Commodities outlook for 2011: $100 oil and $1,500 gold
By Hibah Yousuf
NEW YORK (CNNMoney) -- Commodity prices had a stellar 2010 and experts expect that momentum to carry over into this year, but at a more measured pace.
On average, investment strategists and money managers are predicting oil prices will rise 4% and gold will edge up just 1% by the end of 2011, according to an exclusive CNNMoney survey.
That may seem like a decent increase but consider where prices ended last year. Oil prices rose 15% and gold gained 30% in 2010. In fact, it seemed like gold was setting almost daily records during the second half of the year as the dollar remained under pressure and investors remained wary about the economic recovery.
Why rising rates are super bullish for gold and silver
Jordan Roy-Byrne - CommodityOnline.com
Heading into 2011, the consensus outlook on precious metals is slightly positive but the consensus believes that higher interest rates will ultimately support the US currency and in turn engender a move out of Gold. The Gold naysayers are using "rising rates" as a way to dismiss Gold. Let me explain why this belief is not only false but utterly dangerous.
First and foremost, the parameters have changed in just a few short years. Government debt has increased substantially in the last few years. This debt and the debt of the last 10 years has been serviced at very low interest rates. In fact, its been serviced at historically low interest rates. When interest rates were higher in the 1990s, the overall debt load was significantly lower.
What to Believe About Gold, Stocks and Bonds in 2011
By Bill Bonner - dailyreckoning.com
01/05/11 Broooklyn, New York - Yesterday, we promised to give you a "Prediction-Plus" about the stock market. You remember what a "Prediction-Plus" is, don't you? It's better than a prediction. It's what you should believe... even if it turns out to be wrong.
What should you believe about bonds? They're going down. They're a "suicidal" investment, says our old friend, Marc Faber.
What should you believe about gold? It's going up. Yes, we know... it might go down. Yesterday, gold dropped $44 dollars. Whee! We've been warning you for months that gold could correct. No bull market goes up in a straight line. And gold has already attracted too many speculators who don't really know what they are doing.
Remember what happened during the last big gold bull market in the '70s? Gold lost 50% (from memory) of its value, in '74, before finally hitting its high in '80. Gold could drop down below $1,000.
BCA Research: gold bull market will continue in 2011
"Gold is a potential mania candidate," says BCA Research but, it adds, "expect good returns in this metal in 2011".
Author: Barry Sergeant - Mineweb.com
JOHANNESBURG - For many years, "gold bugs", a rare but widely scattered species, have led the charge in preaching the irresistible advantages of owning gold bullion, above all else, except for more gold bullion. As in the case of most commodities, the price of gold bullion has been on the rip, broadly speaking, for nearly a decade, rising nearly six fold to recent all time highs of just over USD 1,431/oz.
But in percentage terms, much the same can be said for most commodities. The past decade has been characterised by ferocious increases in demand for raw materials from developing nations, and a protracted bear market for the dollar. During the 2008 credit market crisis, however, gold bullion fell less (in percentage terms) than other commodities.
Gerald Celente's Top Trends for 2011
Saudi Arabia to open world's largest gold factory
JEDDAH (Commodity Online) : Saudi Arabia, one of the world's largest gold consumers, said it will soon open world's largest gold factory at Jeddah.
The factory, once operational, will employ 500 to 800 workers, thus creating jobs for young Saudis, according to Taiba for Gold & Jewels Co. Ltd, which will build the factory.
The factory is already under construction at Jeddah Industrial Estate-II, covering an area of 22,000 square meters and will become a reality by the end of this year, said the Company.
Saudi Arabia has always led the Gulf and the Middle East in terms of gold and jewelry consumption and sales.
Gold, currencies drive record futures trading volumes in Dubai
DUBAI (Commodity Online): Annual volumes for 2010 on DGCX registered a 28% growth on 2009, reflecting a surge in the popularity of DGCX's cleared and regulated derivatives both as an asset class and a hedging tool. The Exchange ended 2010, its best-ever year, with a total annual volume of 1.925 million contracts. The value of the Exchange's annual volume reached $104.18 billion, a 32% increase on last year.
Why Gold Still Has a Long Way to Run
By Rob Marstrand - dailyreckoning.com
01/05/11 Buenos Aires, Argentina - The supply of paper currencies is infinite; the supply of gold is finite. This striking contrast provides an excellent reason to exchange the former for the latter.
The gold supply is limited very limited. According to one estimate, all the above-ground gold in the world totals between 120,000 and 140,000 metric tons. Let's split the difference and call it 130,000 metric tons (about 4.2 billion troy ounces). If you brought it all together and made it into a gigantic cube, it would measure about 19 meters along each side - about three meters short of the length of a tennis court.
Furthermore, about 20% to 25% of all the gold is stored in the world's central banks as country reserves. So the total amount of gold in private hands is enough for just 14 grams for each living person - that's less than half the quantity of a standard one-ounce coin like a US Gold Eagle or a South African Krugerrand.
Sharia banking? Just a constitutional minute!
By Lolly Madison - PPJ Gazette
It is still "the economy, stupid" as voiced by Bill Clinton in a one-phrase presidential platform focal stab. James Carville, his illustrious campaign manager, helped Clinton win against George H. W. Bush in 1992 on three points that have continued to be the hub of the Democratic Party's strategy including the Obama presidential bid: 1) Change vs. More of the Same, 2) The Economy, Stupid, and 3) Don't Forget Health Care. Barack Obama has taken points one and three to the extreme, but it is still number two we grapple with.
Yes, we Americans are supersensitive to our economic future. We wonder if there will ever be one again like the one based on an open, free market that brought this nation to its top world power status. We have fast become the sitting duck of world flaw-hunters. Islamic Sharia Law has even put its dirty fingers into our nice American apple pie, too.
Jim Rogers: Chinese Renminbi will replace US Dollar
LONDON (Commodity Online): Global commodities investing legend Jim Rogers who feels that the US dollar is in a terrible shape these days has predicted that the Chinese Renminbi has the potential to replace the US dollar as global currency.
Rogers, who is chairman of Rogers Holdings and founder of the Rogers International Commodity Index, said that even though the US dollar may rally for a week, or a month or a year from now, he does not plan to own the American currency five-ten years from now.
World Bank taps offshore yuan bond market for first time
(Reuters) - The World Bank issued its first yuan-denominated bond, raising $76 million and trying to promote the use of the Chinese currency in international markets at a time when China's stake in the institution is about to increase.
The World Bank said in a statement on Wednesday the International Bank for Reconstruction and Development, its low-interest lending arm, had priced the two-year paper at 0.95 percent, representing the lowest yield so far on same-maturity dim sum bonds -- the nickname for yuan-denominated bonds issued in Hong Kong.
EU plans for bondholder haircuts unsettles debt markets The European Commission will on Thursday press ahead with plans to spread the burden of EU bank failures to senior bondholders, marking the start of harsher times for Europe's creditors.
By Ambrose Evans-Pritchard - Telegraph.co.uk
Michel Barnier, the single market commissioner, will publish a "consultation paper" outlining ways to shield taxpayers from banking crises. It is the first stage of what will almost certainly become a binding law.
"We are pursuing the idea of a debt write-down or conversion to help stabilise a failing bank and reduce the need for public funds," said an EU source.
Fears that this could evolve into a crusade against bondholders set off fresh jitters on EMU debt markets yesterday, pushing yields on 10-year Greek bonds to a record 12.59pc.
World Bank issues its 1st yuan bonds in Hong Kong
By KELVIN CHAN - APNews.com
HONG KONG (AP) - The World Bank is issuing its first bonds denominated in China's yuan in Hong Kong, joining a growing number of borrowers tapping the new debt market as Beijing gradually promotes of its tightly controlled currency abroad.
The World Bank said buyers of its 500 million yuan ($76 million), two-year bond were mainly Hong Kong-based financial institutions, companies and wealthy individuals. It said the money will go into its general fund, rather than being raised for a specific purpose.
The yuan is not traded on global currency markets but Beijing has loosened controls and allows Hong Kong banks to use it. Hong Kong is Chinese territory but has its own currency and a Western-style legal system and often is used as a site for mainland companies to interact with foreign investors.
Debt and Democracy
Harold James - ProjectSyndicate.com
PRINCETON - The European Union's sovereign-debt crisis constitutes a fundamental threat not only to the euro, but also to democracy and public accountability. At the moment, Europe's woes and dilemmas are confined to relatively small countries like Greece, Ireland, and Hungary. But all of them look as if their governments have cheated on fundamental articles of the democratic contract.
The rotating presidency of the EU is about to shed a spotlight on one of these countries. Hungary's turn at the EU helm comes at a time of fierce debate over Prime Minister Victor Orbán's alteration of constitutional law and suppression of press freedom, as well as a new round of worries about the country's financial sustainability.
Americans spend 6.1 billion hours on their taxes
By Charles Riley
NEW YORK (CNNMoney) -- Filing taxes takes too long, costs too much money and is far too overwhelming a process for taxpayers.
That's the message from national taxpayer advocate Nina Olson, the watchdog charged with monitoring the Internal Revenue Service.
"There has been near universal agreement for years that the tax code is broken and needs to be fixed," Olson said in statement that accompanied her annual report to Congress released Wednesday."Yet no broad-based attempt to reform the tax code has been made."
Olson said the need for reform is clear.
Her analysis of IRS data shows that taxpayers and businesses spend 6.1 billion hours a year complying with tax-filing requirements.
IRS tax liens jump by 60%, but how effective are they?
By Kevin McCoy, USA TODAY
IRS liens filed against taxpayers jumped 60% since the start of the national recession, according to a new federal report that urges the tax agency to moderate the collection policy and study its effectiveness.
The IRS filed more than 1 million liens in federal fiscal year 2010, the highest in nearly two decades and a spike from the nearly 684,000 filed in the year ahead of the recession's December 2007 start, according to the annual report to Congress issued Wednesday by the National Taxpayer Advocate.
Although the IRS has taken some steps to aid financially struggling taxpayers, it "has continued the trend toward more lien filings despite the worst economy in at least a generation" - with serious financial impact on some of those unable to pay, the taxpayer advocate report concluded.
Momentum Builds for Corporate-Tax Overhaul
By JOHN D. MCKINNON And ELIZABETH WILLIAMSON - WSJ.com
The White House and congressional Republicans are moving from different directions toward a consensus that the U.S. corporate tax code needs a fundamental overhaul, a goal high on corporate leaders' agenda.
Specific proposals for retooling the complex corporate-tax system aren't on the table and the debate over the issue is sure to be lengthy and difficult. But President Barack Obama and Republican congressional leaders are separately sounding the same broad theme that corporate tax rates should be lower.
"Tax reform could be a significant boost to our competitiveness," Rep. Eric Cantor (R., Va.), the new House majority leader, said this week. "I'm hopeful and expect the president to put some action behind his statements."
Fed May Keep Easing at 'Full Throttle' Until Jobless Rate Falls
By Caroline Salas and Joshua Zumbrun
Jan. 5 (Bloomberg) -- Federal Reserve officials signaled they'll probably push ahead with unprecedented stimulus until the recovery strengthens and many of the 15 million unemployed Americans find work.
The jobless rate hasn't fallen below 9.4 percent since May 2009 and will probably average that figure this year, according to a Bloomberg News survey of economists. Unemployment probably declined to 9.7 percent last month from 9.8 percent in November, according to the average estimate of a Bloomberg poll prior to a Labor Department employment report on Jan. 7.
Peter Schiff - Dollar Collapse, Doomsday Scenerio For 2011
Investigate This!
By Ann Coulter - Townhall.com
The Republicans are back in charge in the House of Representatives this week, and not a moment too soon!
Forget "stimulus" bills and "shovel-ready" bailouts (for public school teachers, who need shovels for what they're teaching), the current financial crisis, which is the second Great Depression, was created slowly and methodically by Democrat hacks running Fannie Mae and Freddie Mac over the past 18 years.
As even Obama's treasury secretary admitted in congressional hearings, "Fannie and Freddie were a core part of what went wrong in our system." And if it's something Tim Geithner noticed, it's probably something that's fairly obvious.
ObamaCare Rewards Friends, Punishes Enemies The administration waives allies through the health law's onerous restrictions. -- By KARL ROVE - WSJ.com
Aprimary task for the new Republican House majority is to undo as many of the pernicious effects of ObamaCare that it can. One of these effects is the spectacle of employers going hat-in-hand to the Department of Health and Human Services (HHS) for waivers from some of the law's more onerous provisions.
In September, HHS Secretary Kathleen Sebelius began granting waivers to companies that provided workers "mini-med" coverage - low-cost plans with low annual limits on what the insurance will pay out. This followed announcements by some employers that they would have to drop these plans because they did not meet the new health law's requirement that 85% of premium income be spent on medical expenses.
Pelosi: Repealing Obamacare Would Do 'Very Serious Violence to the National Debt' -- By Dan Joseph
(CNSNews.com) - Rep. Nancy Pelosi (D-Calif.) said Tuesday that repealing Obamacare would do "very serious violence to the national debt and deficit."
As enacted, Obamacare requires all Americans to have a government-approved health insurance plan and provides federal subsidies to all individuals and families earning up to 400 percent of the poverty level to purchase health insurance.
"If everyone in America was very, very pleased with his or her health insurance and had no complaints, and had access to quality affordable health care in our country, it still would have been necessary for us to pass the health-care reform bill because we could not sustain the system," Pelosi said on Tuesday.
Blue Shield of California seeks rate hikes of as much as 59% for individuals Insurer says the increases result from fast-rising healthcare costs and other expenses resulting from new healthcare laws. The move comes less than a year after Anthem Blue Cross tried and failed to raise rates as much as 39%.
By Duke Helfand, Los Angeles Times
Another big California health insurer has stunned individual policyholders with huge rate increases - this time it's Blue Shield of California seeking cumulative hikes of as much as 59% for tens of thousands of customers March 1.
Blue Shield's action comes less than a year after Anthem Blue Cross tried and failed to raise rates as much as 39% for about 700,000 California customers.
San Francisco-based Blue Shield said the increases were the result of fast-rising healthcare costs and other expenses resulting from new healthcare laws.
Moral Hazards, Moral Buzzards
by Peter M. Casey - MonthlyReview.org
Is it a good idea to let the foreclosures roll on? A lot more than that, say the banking and mortgage industries, among others. "Home repo" is critical to economic recovery, they argue. Stopping foreclosures would cut the legs off a still-wobbly rebound. In the industry's view, the fewer foreclosures, the fewer resales; the fewer resales, the more depressed the home prices and the greater the losses; the greater losses, the less capital to lend. And we are back on the precipice of depression.
There are many ironies in the disaster of mortgage securitization -- the process that turns mortgages into tradable investments. Consider how legal and moral obligations have served the wealthy and disadvantaged everyone else. "Moral hazard" makes it taboo to "forgive" the debt of "underwater" borrowers, whose mortgages cost more than their home value. Letting them out of their obligations would only encourage them to continue to live beyond their means, borrowing more than they can afford, believing there are no adverse consequence. On the other hand, "moral hazard" did not deter the trillion-dollar plus bailout of Bear Stearns, Citibank, Goldman Sachs, AIG, their Wall Street wannabes, and hundreds of multi-billion-dollar hedge fund entrepreneurs. The latter were too big to fail, which trumps "moral hazard." The former weren't.
Dr Coburn on Dylan Ratigan 1 4 2011
Florida Is Still Letting Banks Break the Rules in Foreclosure Cases
By ABIGAIL FIELD - DailyFinance
Over the holidays, I wrote about judges in Lee County, Fla., and how they appear to prioritize completing foreclosures over the rule of law. The most extreme example was an order in one case by Judge James R. Thompson that specifically exempted banks from a rule on affidavits that all other Florida litigants must follow -- specifically, part (e), which requires claimants to provide legally valid documents to back up their claims.
Now, Judge Thompson has disowned the original order, replacing it with an order that claims banks do have to follow the rules. The problem? Even though he says the rules of evidence do apply to banks, the judge allowed the bank in that case to use an affidavit that obviously breaks the rule.
Bellevue Towers developer turns project over to lenders The region's biggest condo project ever has been transferred to its lenders after the developer sold less than a quarter of its units in almost two years.
By Eric Pryne - Seattle Times business reporter
The developer of Bellevue Towers, the region's biggest condo project ever, has turned over the development to lenders to avoid foreclosure.
Portland-based Gerding Edlen transferred the downtown Bellevue project's unsold units on Thursday to an entity led by investment bank Morgan Stanley, according to county records.
The new owners announced price cuts to help spur sales at the 539-unit development, where just 118 sales have closed since the two towers were completed nearly two years ago.
"This is an acknowledgment that prices today aren't what they were," Ira Glasser, an adviser to Morgan Stanley, said Monday.
Tallest Luxury Condo Tower In Phoenix Turns Rental
HousingDoom.com
Condo excess has become rental excess in downtown Phoenix. The biggest symbol of "condo mania" downtown is 44 Monroe. 44 Monroe is the tallest condo tower in the state of Arizona and the third largest building in the state. Built too late for boom, it was finished in Fall 2008 and the developer went into bankruptcy in 2009. Wikipedia said before completion.
The building will feature seven floors of above-ground parking and 196 residential units, ranging in size from 780 to 4,800 square feet (450 m2). Residential unit prices range from $480,000 to $3.2 million.
The units didn't go for anything close to the estimated $480K+. In fact, ST Financial, who purchased the project announced in October that it would sell the units at prices starting below $200K. Not one unit sold, so they are to be rented out instead:
Sara Lee poised for breakup, investors believe With its stock price up nearly 50% over the last year, the worst thing that could happen for shareholders, at least in the short term, is for the company to do nothing, analysts say
By Emily Bryson York - LATimes.com
Investors are betting that Sara Lee Corp. will be broken up or sold in the coming months.
With its stock price up nearly 50% over the last year, closing at $17.41 on Tuesday, the worst thing that could happen for shareholders, at least in the short term, is for it to do nothing, analysts say.
"It's trading at a very high multiple, which implies it's a potential takeout," Erin Swanson, an analyst with Chicago-based Morningstar Inc., said Monday.
IRS's 'hard-core' collection tactics needlessly harm taxpayers, report says - By David S. Hilzenrath - Washington Post
The Internal Revenue Service's increasing use of "hard-core" collection tactics "is inflicting unnecessary harm on financially struggling taxpayers," an in-house critic at the IRS said Wednesday.
The IRS routinely imposes liens on delinquent taxpayers, thereby damaging their credit scores and potentially jeopardizing their access to jobs, insurance and even rental housing, National Taxpayer Advocate Nina E. Olson said in an annual report to Congress.
By making it harder for taxpayers to get back on their feet, the IRS might actually reduce long-term tax collections, Olson wrote.
Olson serves as an independent ombudsman within the IRS, and her office helps taxpayers resolve problems with the agency.
Obamacare's Dirty Tricks
By Peter Ferrara - The American Spectator.org
Most commentators have focused on the revelation just before Christmas that Obamacare's end of life death panel consultations rejected by Congress were resurrected by the Obama Administration by regulatory requirement. There is no truth to the rumor that President Obama has agreed, after his term of office ends, to head up a new organization called Democrats Against Democracy.
But while this regulatory authoritarianism is, indeed, yet another dirty trick of Obamacare, it is small potatoes compared to the real dirty tricks of Obamacare. A dirty trick is defined here as burying in vague language in the abusive, several thousand page Obamacare legislation socially repulsive policies that the public overwhelmingly opposed and that Congress denied it was adopting. Like the end of life death panel consultations.
In The Future You May Not Be Able To Provide The Basics For Your Family Even If Everyone In Your Family Has A Job
TheEconomicCollapseBlog.com
Today, millions of American families are extremely stressed out because they are working as hard as they can and yet they find at the end of the month they still haven't been able to pay all of the bills. Unfortunately, things are only going to get rougher in the years ahead. The U.S. government has reached a terminal phase of the debt spiral that it is trapped in, and the only way to keep the system going is to print more money, borrow more money and spend more money. But won't this cause horrible inflation eventually? Of course it will. That is why so many people around the world have so loudly denounced "quantitative easing 2". The Federal Reserve is just creating hundreds of billions of dollars out of thin air and is chucking all of this money into the system in a desperate attempt to get it moving again. This is also why the Tea Party movement is so angry about the record amounts of government debt that are being piled up. When the U.S. government goes into more debt, it creates more dollars. As the Federal Reserve and the U.S. government flood the system with new dollars, it means that there are now more dollars chasing roughly the same number of goods and services, and that is a recipe for inflation.
A U S T E R I T Y
After Slashing Through Newspapers, Internet News Eyes TV
By Daniel Indiviglio - The Atlantic
If you were writing an obituary for newspaper, you would probably state that its fatal illness became critical in 2008. That year more people began preferring the Internet for news than newspapers. In the two years since then, the distance between those who choose the online news over newspapers has widened to 10 points, according to a new report from Pew. But Internet isn't finished in its quest for news supremacy. Television may be the next traditional media source to fall, as its lead on Internet news is beginning to shrink.
Here's a chart showing which sources Americans prefer to get their news from (they could chose up to two sources, which is why they these percentages add to more than 100):
Motorola Is Dead - Long Live the Motorolas
By Rob Spiege - E-Commerce Times
Investors are cheery now that Motorola has completed its long-anticipated split into two separate, more-focused firms, but there's still some nostalgia over the passing of the 83-year-old corporate titan. "In some ways it's sad," remarked In-Stat analyst Allen Nogee. "The big Motorola of the past is gone, but the truth is it has faded away slowly over the last several years."
After 83 years, Motorola has formally split into two entities -- a move that was more than two years in the making. Motorola Mobility Holdings Inc. will produce consumer products, and Motorola Solutions Inc. will sell into the professional and corporate markets.
AT&T Pins 4G Label to Existing Network
By ROGER CHENG - WSJ.com
AT&T Inc. flipped a switch and turned on its 4G wireless network Wednesday. The switch, however, was in the company's marketing department.
By relabeling its existing 3G network, the country's second-largest wireless carrier joined the noisy fray over so-called fourth-generation wireless technology, which promises mobile Internet speeds so fast that huge files can be downloaded in minutes and streaming video can be watched without the interruptions of earlier-generation technologies.
As recently as September, AT&T executives had referred to the company's current network, which runs on a technology it calls HSPA-plus, as 3G. But AT&T has subtly shifted its marketing message since then, now proclaiming "the nation's fastest mobile broadband network" instead of the fastest 3G network.
NO WARRANT NECESSARY FOR CELL PHONE SEARCHES IN CALIFORNIA -- Truthdig.com The California Supreme Court ruled Wednesday that police officers in the Golden State don't need a warrant to be able to peruse the cell phones of those under arrest - a decision that may have troubling implications and may eventually involve the U.S. Supreme Court. -KA
AP via CBS News:
California Deputy Attorney General Victoria Wilson, who represented the prosecution in the case decided Monday, told the newspaper the split opinions in California and Ohio could lead the U.S. Supreme Court to weigh in on the cell phone issue.
The California Supreme Court decided the loss of privacy upon arrest extends beyond the arrestee's body to include personal property.
Rense & Jeffrey Smith - The GMO End Game
Keiser Report: Monsanto and the Seeds of Evil
Governments Getting Into the Online Gaming Game
By Javad Heydary - E-Commerce Times
Current online gaming sites police themselves, which can potentially leave users and the system open to fraud, cheating and other illegal acts. As such, the respective governments believe that offering online gaming in a licensed, regulated environment will create standards regarding who can play, ensure responsible gambling, and thereby improve accountability.
Governments in a number of jurisdictions are moving not only to regulate online gaming but also to become an active participant in the industry.
Various provinces in Canada have recently entered into the online gaming industry by developing and providing online gaming websites. In July of 2010, the Province of British Columbia opened the first government-sanctioned online casino in North America. The government established PlayNow.com, which allows residents of British Columbia to register and play various games including bingo, sports book betting and blackjack.
Postcards From Geekopolis Products for 2011 Are New, Nifty;
Who Knew Phones Needed Pagers?
By DAISUKE WAKABAYASHI and DON CLARK
Las Vegas - WSJ.com
Big crowds - and big talk about new gadgets - are back at the Consumer Electronics Show, after two years in which the recession put a damper on the Las Vegas event, which runs Thursday through Sunday.
Companies are using relentless improvements in semiconductors and other components to make many of their gadgets smarter, sleeker and smaller. Unless the gadgets are TV sets. Then better means "bigger" - more than 7-1/2 feet, in the case of the 92-inch 3-D TV that a unit of Japan's Mitsubishi Electric Corp. is showing off this week.
But for all their hyperbole about tablet PCs and smart phones, most of the products on display this year are refinements of existing ideas, rather than trendsetters that break new ground. Sometimes the main innovation is the price, as in the case of Vizio Inc.'s plan to sell a small 3-D TV for less than $300 - a category where offerings routinely start at more than $1,000. Here's a sampling of the latest fare:
Jackdaws in Sweden, Fish in Brazil and New Zealand and Crabs in England Are New Victims of Global Spate of Mysterious Animal Deaths
by Wil Longbottom - DailyMail via LewRockwell.com
More and more animals are being found dead as the mysterious spate of mass bird and fish deaths has turned into a global phenomenon.
Experts were today carrying out tests on around 50 jackdaws found dead in a street in Falkoping, Sweden, that appear to have suffered the same fate as thousands of their cousins who fell from the sky in separate incidents in the U.S.
Swedish experts have said the shock of fireworks being let off near the city, in the south-east of the country, and difficulty finding food may have led to the deaths of the jackdaws.
China's Missile and Stealth Fighter Advances Draw U.S. Attention
By Tony Capaccio
Jan. 5 (Bloomberg) -- The Pentagon underestimated the speed at which China has developed and fielded a ballistic missile that may be capable of hitting a maneuvering U.S. aircraft carrier, the head of Navy intelligence said today.
"We've been on the mark on an awful lot of our assessments but there has been a handful of things we have underestimated," Vice Admiral Jack Dorsett told defense reporters. The DF-21D missile now has so-called initial combat capability, he said, according to his analysts and U.S. Pacific Command head Admiral Robert Willard.
Max Keiser: Economic Predictions for 2011
& Monsanto's Seeds of Destruction - Alex Jones Tv 1/5
Max Keiser: Economic Predictions for 2011
& Monsanto's Seeds of Destruction - Alex Jones Tv 2/5
Max Keiser: Economic Predictions for 2011
& Monsanto's Seeds of Destruction - Alex Jones Tv 3/5
Max Keiser: Economic Predictions for 2011
& Monsanto's Seeds of Destruction - Alex Jones Tv 4/5
Max Keiser: Economic Predictions for 2011
& Monsanto's Seeds of Destruction - Alex Jones Tv 5/5
The Cost of America's Free Lunch
By Daniel Gros - Project Syndicate
BRUSSELS - For decades, the world has complained that the dollar's role as global reserve currency has given the United States, in a term usually attributed to Charles de Gaulle but actually coined by his finance minister, Valery Giscard d'Estaing, an "exorbitant privilege." As long as exchange rates were fixed under the Bretton Woods system, the nature of that privilege was clear: the US was the only country that could freely determine its own monetary policy. All others had to adapt to the policy dictated by the US.
This changed with the advent of floating exchange rates in the early 1970's, which allowed more stability-conscious countries, such as Germany, to decouple from a US monetary policy that they considered too inflationary. But, even under floating exchange rates, the US retained an advantage: given that the dollar remained the key global reserve currency, the US could finance large external deficits at very favorable rates.
Forget Pep Talks; Governors Warn of Tough Times
By JAMES R. HAGERTY And BEN CASSELMAN - WSJ.com
New governors in 26 U.S. states are starting to take office with somber warnings to constituents of more tough times amid revenue shortfalls and a weak job market.
With sagging economies, soaring budget deficits and the loss of federal stimulus money, incoming governors face the deepest fiscal crisis in decades and expectations that they will remain true to campaign pledges to slash spending and taxes.
"I don't think a grand ceremony ... would be appropriate," Andrew M. Cuomo said Saturday after being sworn in as New York's governor. The Democrat, whose father led New York two decades ago, promised to put a lid on property taxes and shrink the state's government.
Pelosi: 'We Have No Regrets' About Debt Piled Up Over Last Two Years
By Nicholas Ballasy
(CNSNews.com) - When asked if she regrets not using the last two years with a Democrat controlled Congress to do more about the national debt, House Speaker Nancy Pelosi said she has "no regrets," adding that "deficit reduction" has been a "high priority" for the Democratic Congress.
Speaker Pelosi was asked, "Do you have regrets that you didn't use the 2 years that you had total Democratic control of government to focus more on jobs and especially the debt which we did not hear much at all from you?"
Pelosi, speaking on her last day as Speaker of the House, said, "No, we have no regrets. This House has over and over again sent to the Senate legislation for job creation, which the Republicans in the Senate held up. Deficit reduction has been a high priority for us, it is our mantra; pay as you go. Unfortunately, that will be changed now."
The States Versus ObamaCare
As new state attorneys general take office in the coming weeks, I expect an increase in the number of states challenging the law in court.
By PAM BONDI - WSJ.com
This week begins the inauguration and swearing-in ceremonies for newly elected officials all over the country. One thing many of us have in common is that the voters rewarded us for our outspoken opposition to ObamaCare.
The electorate's decisive rejection of the Obama administration's policies reveals a pervasive concern over the federal government's disregard of fundamental aspects of our nation's Constitution. No legislation in our history alters the balance of power between Washington and the states so much as ObamaCare does.
House to vote on repeal of health care law
Democrats say benefits will doom GOP effort
By Stephen Dinan and Sean Lengell - The Washington Times
It didn't save them from catastrophic losses at the polls, but Democrats say the nuts-and-bolts benefits already in place thanks to the health care law, such as coverage for young adults and people with pre-existing health conditions, will derail House Republicans' repeal efforts.
"The new law is giving people more freedoms and more choices," Health and Human Services Secretary Kathleen Sebelius said. "Repeal really takes away all of those freedoms and shifts power back to the insurance companies."
5 Reasons Why the GOP Is Smart to Vote on 'Obamacare' Repeal
By Chris Good - The Atlantic
Of course, Republicans won't actually repeal health care reform.
Having promised to repeal "Obamacare" during the midterms, Republicans won control of the House and are preparing to vote on repeal next Wednesday, but there is zero chance that this single vote will nullify the new 1,016-page health care law. With a united GOP majority, the House will probably vote in favor of repeal, but unless Senate Majority Leader Harry Reid and President Obama are usurped by bodysnatchers, repeal won't be approved by the Senate or signed by the president.
So, why even hold a vote? What's the point of empty symbolism?
As it turns out, Republicans are smart to hold this vote. Here's why:
House GOP health-care repeal: What will that bill do, exactly? The House GOP bill to repeal the new health-care reforms would reset laws of the land to last March, before Obama signed the measure. It also calls on Republicans to craft own reform plan.
By Peter Grier - CSMonitor.com
House Republicans have made public the text of their bill to repeal President Obama's health-care reforms. It doesn't take much time to read it - it's only two pages long, as opposed to the 2,000-plus page length of the law the GOP lawmakers are trying to reverse.
What's in those two pages? Is it just bare-bones legislative language?
Not exactly. The first line of the bill, which declares its purpose, reflects many Republicans' long-held opinion about the entire Obama health-care effort.
Constitution may be old, but it isn't senile
By: David Limbaugh - Washington Examiner
Congressional Republicans' decision to read the Constitution aloud on the floor of Congress has forced some Constitution-contemptuous liberals further out of the closet, which is an instructive development to behold. Blogger Ezra Klein of The Washington Post told MSNBC's Norah O'Donnell that the constitutional reading is "a gimmick," and "the issue of the Constitution is not that people don't read the text and think they're following; the issue with the Constitution is that the text is confusing because it was written more than 100 years ago and what people believe it says differs from person to person and differs depending on what they want to get done."
Is Financial Reform Unconstitutional?
By Daniel Indiviglio - The Atlantic
Democrats' proudest moment in 2010 was when they passed the health care reform bill. If not for that legislation, the summer's gigantic financial regulation package probably would have been their most major accomplishment. Of course, each is as controversial as it is significant. As a result, we're already starting to see opponents of the health care bill challenge it in court. Before long we may see similar cases against the financial reform bill. In fact, its constitutionality could be even more questionable.
That's what former George H.W. Bush White House counsel C. Boyden Gray argues in a recent Washington Post op-ed. He says that some of the bill's most significant regulatory changes are flagrantly unconstitutional. His arguments are rather compelling.
Everything Is Falling Apart: 20 Facts That You Will Not Want To Read If You Still Want To Feel Good About America's Decaying Infrastructure
TheEconomicCollapseBlog.com
If you haven't noticed lately, America is literally falling apart all around us. Decaying infrastructure is everywhere. Our roads and bridges are crumbling and are full of holes. Our rail system is ancient. Our airports and runways have definitely seen their better days. Aging sewer systems all over the country are leaking raw sewage all over the place. The power grid is straining to keep up with the ever-increasing thirst of the American people for electricity. Dams are failing at an unprecedented rate. Virtually all of our ports are handling far more traffic than they were ever intended to handle. Meanwhile, our national spending on infrastructure is way down. Back during the 1950s and 1960s we were spending between 3 and 4 percent of our national GDP on infrastructure, but today we are spending less than 2.5 percent of our national GDP on it. According to the American Society of Civil Engineers, we need to spend approximately $2.2 trillion on infrastructure repairs and upgrades just to bring our existing infrastructure up to "good condition".
HSBC sees China and America leading global mega-boom The greatest global boom of all time has barely begun. Over the next forty years, economic growth will quicken yet further as the rising powers of Asia, the Middle East, and Latin America reach their full stride
By Ambrose Evans-Pritchard - Telegraph.co.uk
Crunching everything from fertility rates to schooling levels and the rule of law, HSBC predicts that the world's economic output will triple again by 2050, provided the major states can avoid conflict - trade wars, or worse - and defeat the Malthusian threat of food and water limits. Growth will rise to 3pc on average, up from 2pc over the last decade.
In a sweeping report entitled "The World in 2050", the bank said China would snatch the top slot as expected, but only narrowly. China at $24.6 trillion (constant 2000 dollars) and the US at $22.3 trillion will together tower over the global economy in bipolar condominium - or simply the G2 - with India at $8.2 trillion far behind in third slot, and parts of Europe slithering into oblivion.
The Debt Ceiling Debate Really Doesn't Matter
Either Way U.S. Government Finances Are Going To Crash
EndOfTheAmericanDream.com
Congratulations America, you are now 14 trillion dollars in debt. The U.S. national debt is now more than 14 times larger than it was just 30 short years ago. The federal government is literally drowning in debt. Now some members of Congress are actually debating whether we should raise the debt ceiling again. At the moment, the U.S. government debt ceiling is is set at $14.294 trillion, and considering the fact that the U.S. government is borrowing approximately 2.63 million more dollars every single minute, that cap will be reached very quickly. The U.S. Congress has raised the federal debt ceiling six times in just the past three years, so you would think that raising it again would not be that big of a deal for our debt-addicted politicians. But this past November a significant number of Tea Party candidates were elected to the U.S. House of Representatives, and they are eager to prove that they are serious about fiscal responsibility.
Battle heats up Debt ceiling rhetoric: Loud, harsh, misleading
By Jeanne Sahadi
NEW YORK (CNNMoney) -- Everybody's talking about debt. No wonder: The country's tab is a whisker away from the current debt ceiling.
The rhetoric is already loud, harsh and, at times, misleading. And there is more to come.
To help counteract the half-truths and exaggerations, here are some debt ceiling facts worth noting.
What is the debt ceiling exactly? It's a cap set by Congress on the amount of debt the federal government can legally borrow. The cap applies to debt owed to the public (i.e., anyone who buys U.S. bonds) plus debt owed to federal government trust funds such as those for Social Security and Medicare.
The first limit was set in 1917.
National Debt Tops $14 Trillion
By Mark Knoller - CBSNews.com
The latest posting today of the National Debt shows it has topped $14 trillion for the first time.
The U.S. Treasury website today reported that as of last Friday, the last day of 2010, the National Debt stood at $14,025,215,218,708.52.
It took just 7 months for the National Debt to increase from $13 trillion on June 1, 2010 to $14 trillion on Dec. 31. It also means the debt is fast approaching the statutory ceiling $14.294 trillion set by Congress and signed into law by President Obama last February.
The federal government would have to stop borrowing and might even default on its obligations if Congress fails to increase the Debt Ceiling before the limit is reached.
De-globalization forces remain strong into 2011
By Martin Hutchinson - Reuters.com
The forces of globalization have been challenged by new global market barriers in the Great Recession. In 2011, the de-globalization process even could gather pace if commodity prices continue their surge or if there is another financial crisis.
The globalization of the last 20 years has been partly due to technology. The Internet and cellphones enabled companies to construct global supply, manufacturing and distribution networks not previously feasible. China, India and other emerging markets became integrated into the global economy, reducing costs for consumers and creating new demand. Since the formation of NAFTA and the World Trade Organization in 1994 and 1995, regulation has played only a minor role in greasing the process. Conversely, expansive monetary policies - which have reduced risk premiums for emerging market debt and produced pools of risk-seeking equity capital - have been critical.
The progressive embrace of Third World culture
By: Thomas Sowell - Washington Examiner
Dr. Victor Davis Hanson's quietly chilling article, "Two Californias," in National Review Online, ought to be read by every American who is concerned about where this country is headed. California is leading the way, but what is happening in California is happening elsewhere-- and is a slow poison that is being largely ignored. Professor Hanson grew up on a farm in California's predominantly agricultural Central Valley. Now, as he tours that area, many years later, he finds a world as foreign to the world he knew as it is from the rest of California today-- and very different from the rest of America, either past or present.
In Hanson's own words: "Many of the rural trailer-house compounds I saw appear to the naked eye no different from what I have seen in the Third World. There is a Caribbean look to the junked cars, electric wires crossing between various outbuildings, plastic tarps substituting for replacement shingles, lean-tos cobbled together as auxiliary housing, pit bulls unleashed, and geese, goats, and chickens roaming around the yards."
Italian Banks Pushing Plastic Declare 'War on Cash'
By Sonia Sirletti and Jeffrey Donovan
Jan. 4 (Bloomberg) -- Cash is king in Italy, a lesson Massimiliano Romano learned when he tried to pay for a cab with a credit card at RomeÕs main train station.
"I thought my cards would be enough," said Romano, head of research at brokerage Concentric Italy in Milan. "But I had to let 10 people go in front of me in the line before I found a driver who would accept a credit card."
The Italian Banking Association has declared "war on cash" in a country where credit-card usage is less than half the European Union average, according to the Bank of Italy. The association, known by its Italian acronym ABI, says it costs banks and companies as much as 10 billion euros ($13.3 billion) a year to process cash payments, mainly in increased security and labor. Rome-based ABI aims to cut those expenses by promoting electronic payments with credit and debit cards and wire transfers in both the public and private sectors.
Are German Banks Next To Seek Putback Claims From Bank Of America?
While everyone has been focusing on American institutions over the past several months looking for entities that may have claims on Bank of America and other domestic banks which have misrepresented their mortgage portfolios, a question that nobody is asking is why are European, and specifically German banks, not joining the fray? After all, when it came to finding idiot investors, Goldman et al's rolodex would always immediately jump to those in the Ruhr and Rhine valleys. And sure enough, as many German (Landes)banks ended up on the receiving end of Wall Street innovation, and thus bankrupt, it has been shocking that very little initiative has been demonstrated by German investors who lost most or all of their capital when subject banks ended up purchasing misrepresented securities. All this may be changing soon (see below). But even if it isn't, a key question is just what leverage does America have over Germany to prevent the country from pursuing rightful putback demands against the mortgage banks. Our guess: those lovely FX lines from Benny and the Inkjets. After all recall that the Swiss tax disclosure was the quid pro quo in exchange for the unlimited Fed credit facility to the SNB when the country was on the verge, and when UBS needed a bad bank to make sure the Swiss giant survived.
European nations begin seizing private pensions
Hungary, Poland, and three other nations take over citizens' pension money to make up government budget shortfalls.
By Jan Iwani - CSMonitor.com
People's retirement savings are a convenient source of revenue for governments that don't want to reduce spending or make privatizations. As most pension schemes in Europe are organised by the state, European ministers of finance have a facilitated access to the savings accumulated there, and it is only logical that they try to get a hold of this money for their own ends. In recent weeks I have noted five such attempts: Three situations concern private personal savings; two others refer to national funds.
Is the Federal Reserve Really Purchasing Over 60% of 2011's Fiscal Deficit? In a Word, uh . . . Yeah.
The other day, in my post "The Lull Before the Storm", I mentioned that for fiscal year 2011, the Federal Reserve would be purchasing over 60% of the Federal government deficit.
"In other words, the Fed would be dancing the Monetization Waltz, just like Latin American countries used to back in the 1970's: Proof positive that America is indeed a banana republic - only with nukes.
"A lot of people didn't believe me - or wanted me to check my figures. Or wanted to know if I was having an acid flashback from those aformentioned 1970's. A lot of people couldn't believe it.
Wall Street Preparing $4 Billion of Real Estate Bonds
By Sarah Mulholland
Jan. 4 (Bloomberg) -- Deutsche Bank AG, UBS AG and JPMorgan Chase & Co. are preparing the year's first bond sales tied to commercial property loans, according to people familiar with the transactions.
Deutsche Bank and UBS are teaming up to issue as much as $2.5 billion in commercial mortgage-backed securities linked to loans on office buildings, shopping malls and hotels in what would be the largest offering of its kind since the market froze in June 2008, according to a person familiar with the deal. JPMorgan plans to sell $1.5 billion in similar debt, a person familiar with that sale said.
Speculators return to bolster bullish gold positions
By Debbie Carlson
(Kitco News) - After several weeks of cutting exposure to long futures and options positions on the Comex division of the New York Mercantile Exchange, speculators have started to add back to those bullish positions, according to U.S. government data.
The Commodity Futures Trading Commission's weekly commitment of traders report showed funds in both the disaggregated and legacy reports returned to increasing their net-long position. The report is as of the week ended Dec. 28 and was released Monday afternoon.
Gold retreat seen as profit-taking correction
By Allen Sykora
(Kitco News) - Tuesday's sell-off in gold is mainly a profit-taking correction and not the start of something more ominous, especially since it came after an end-of-year uptick in prices and the retreat was not triggered by any major fresh news, traders and analysts said.
One analyst said he has been using the retreat as a buying opportunity.
At 9:53 a.m. EST, most-active February gold futures were lower by $36.20 an ounce, or 2.5%, at $1,386.70 on the Comex division of the New York Mercantile Exchange. The retreat comes after the contract ran up to a high of $1,424.40 on Monday from a low of $1,372.70 last week.
"It is nothing more than liquidation, that I am aware of," said a New York futures trader.
Numismatics Are Fool's Gold
By: Peter Schiff - MarketOracle.co.uk
Last month, I addressed the hype around gold confiscation, and debunked the myth that collectible or numismatic coins would offer effective protection. But there is another sales pitch that many dealers will use while trying to "up sell" you to numismatics. They may argue that on investment merits alone, numismatics are a better bet. While this may be a more rational line of thinking than the typical confiscation con, it is bad advice for investors hoping to protect their assets in an economic slump.
Will Silver Outshine Gold Again in 2011?
By CHARLES WALLACE - DailyFinance.com
Everybody knows gold had a great year in 2010, rising 27% and beating most other investments. But silver actually did much better, climbing a breathtaking 83%. Can the "poor man's gold" continue to outperform its more expensive big brother?
Many analysts think so. Adrian Day, an asset manager and author of a recent book on commodities, Investing in Resources, says that for 25 years silver stockpiles were so huge that its price didn't move. But in recent months, the stockpiles have been exhausted.
Price Inflation to Pay the Debt
By The Mogambo Guru - DailyReckoning.com
01/04/11 Tampa, Florida - The lights of the Mogambo Security System (MSS) glowed dimly in the gloom of the bunker as I cowered in the darkness, and there were no sounds except the thumping, thumping, thumping of my terrified heart at The World Outside (TWO), a place I consider to be a vicious, hostile environment containing not only enemies of every sort, both real and imagined, but family members who want to know if I am coming out for dinner, or to tell me that someone is on the phone for me, or that somebody is going to greedily eat the last of my treasured Double-Stuf Oreos, somehow trying to get me outside and into their clutches so that they can take all my money and ask me to sign various forms and documents.
And when I innocently and politely ask, "What is this paper that you want me to sign?" they hastily snatch it back out of my hand and rudely say, "Never mind, then!"
Currency Carry Trade Losses May Bolster U.S. Dollar
By Ron Harui and Wes Goodman
Jan. 4 (Bloomberg) -- Currency traders that seek profits by borrowing in nations with low interest rates to fund purchases in countries with higher yields are losing more money than at any time in at least a decade.
The strategy lost 2.5 percent in 2010 as the dollar -- a favorite for financing the trades because of record low U.S. rates -- appreciated, according to an index compiled by UBS AG, the world's second-largest foreign-exchange trader. That's more than the 0.98 percent drop in 2008 when the collapse of Lehman Brothers Holdings Inc. caused credit markets to freeze and the worst performance for so-called carry trades since at least 1999 when UBS began releasing yearly figures.
At Banks, New Fees Replacing Old Levies
By ROBIN SIDEL - WSJ.com
Banks, in an attempt to wring more revenue out of customer accounts, are conjuring up new ways to raise fees on basic products like debit cards, cash machines and checking accounts.
As regulation curtailing financial institutions from levying certain charges on consumers has mounted over the past year, banks have had to dream up new fees to replace those now trimmed by laws. Credit-card users have experienced new inactivity fees and foreign-exchange charges, while checking accounts have gotten hit with new monthly maintenance fees.
Fed Minutes: U.S. Economy Not Strong Enough to Wind Down QE2
By JOSEPH LAZZARO - DailyFinance.com
When the Fed met last month, it -- like many economists and business executives -- saw signs of improvement in the U.S. economy. But according to the minutes from the Fed's meeting, released Tuesday, the improvement wasn't enough to justify tapering its quantitative-easing bond-buying program, also known as QE2.
The plan, announced in November, calls for the government to purchase $75 billion worth of bonds per month -- and up to $600 billion in assets through June -- to help stimulate the economy. The December minutes indicate that some members of the Fed's board have "a fairly high threshold" for making changes to the central bank's controversial quantitative-easing program.
Liberals fear betrayal by Obama on Social Security in new political climate -- By Erik Wasson - TheHill
Liberal groups say they are increasingly worried that President Obama will strike a deal with Republicans on Social Security reforms in exchange for a 'yes' vote on increasing the nation's debt ceiling.
In a strong signal of the fight to come, Sen. Lindsey Graham (R-S.C.) said Sunday that he is prepared to let the U.S. default on its debt obligations if Social Security isn't reformed.
"I will not vote for the debt ceiling increase until I see a plan in place that will deal with our long-term debt obligation starting with Social Security, a real bipartisan effort to make sure that Social Security stays solvent, adjusting the age, looking at means tests for benefits," Graham said on NBC's "Meet the Press."
Bank of America braces for WikiLeaks
By Sarah Halzack
Bank of America does not know for sure that it will be the target of the next data dump from Internet provocateur WikiLeaks. But, in the wake of the site's recent release of State Department cables that embarrassed a number of political leaders, the bank is launching a damage control effort just in case.
The New York Times reported Monday that Bank of America is attempting not only to figure out what information Wikileaks may have about the firm, but also to assess possible consequences of a leak and how to minimize them.
Emancipation Day Gives Taxpayers More Time
By Maya Jackson Randall - WSJ.com
Here's a New Year's gift from the IRS to taxpayers: three extra days to file tax returns.
The Internal Revenue Service Tuesday announced that in this 2011 tax filing season, taxpayers will have until Monday, April 18, to file their 2010 tax returns.
Actually, credit for the extra time should go to the nation's capital and the fact that on Friday, April 15, the District of Columbia will observe Emancipation Day, a holiday that celebrates the freeing of slaves in D.C. By law, D.C. holidays impact IRS tax deadlines. That means all taxpayers have a few extra days to file.
In addition, taxpayers who request more time to file will have until Oct. 17 to submit their returns.
Why Safeway's Concerned About Blockbuster's Liquidation Plans
By DANNY KING - DailyFinance.com
At first glance, supermarket chain Safeway (SWY) would seem to have little to do with movie-rental company Blockbuster. But it turns out that Safeway owns several of the multiple-tenant shopping centers that contain Blockbuster stores slated for closure.
As a landlord, the supermarket has filed a motion to try to ensure that Blockbuster's liquidation plans don't disrupt neighboring businesses at Safeway-owned shopping centers and that the closing stores remain adequately maintained. The company wouldn't confirm where it filed the motion, but Home Media Magazine reported that the motion was filed in the U.S. Bankruptcy Court in New York, and that the properties are in California and Oregon.
Why Facebook Is Such a Crucial Friend for Goldman
BY PETER LATTMAN - NYTimes.com
Goldman Sachs and Facebook have friended each other.
In investing $450 million in the social networking giant, Goldman has established itself as the leading candidate to win the lucrative and prestigious assignment of Facebook's initial public offering, whenever that day comes. It also positions itself to reap millions of dollars in banking fees. Goldman has already begun the process of wooing its wealthy clients to invest alongside it in Facebook, forming an investment vehicle that seeks to raise as much $1.5 billion for the Internet company.
FDIC seeks $2.5 billion from failed bank honchos
Posted by Colin Barr - Fortune
Three years after the financial meltdown started, bank watchdogs are promising taxpayers will have their day in court.
The Federal Deposit Insurance Corp. said Tuesday it has approved lawsuits targeting 109 former directors and officers of failed banks in actions that seek $2.5 billion in damages.
But don't celebrate the righteous legal offensive just yet. So far, despite the obligatory talk of a wave of bank failure lawsuits, the FDIC has actually filed only two director-and-officer liability cases naming 15 defendants.
Further suits presumably are in the offing, though the bank fraud investigation mill grinds slowly.
2010 Was Another Banner Year in AZ- For Foreclosures
HousingDoom.com
2010 will be one for Arizona's history books- and not in a good way. Record foreclosures, stubbornly high unemployment and falling home prices made for a grim picture:
PHOENIX - Arizona closed out 2010 with a record number of home foreclosures, marking the third straight year of staggering growth for bank repossessions.
From January through November, 65,911 Arizona homeowners lost their houses to the mortgage holder, 12 percent more than were taken in all of record-setting 2009, according to foreclosure listing firm RealtyTrac Inc. Banks and loan companies were on track to take thousands more homes in December.
Dire States Deep in debt, most governors will have to either raise taxes or cut spending - exactly what not to do when recovering from a recession.
By MEGAN MCARDLE - The Atlantic
THREE YEARS AFTER the stock market cratered in 1929, American schools suffered their own crash. School districts had managed to ride out the early years of the Great Depression; in fact, because many districts depended on property taxes, which didn't crash as fast as income taxes, more than a few managed to increase spending.
But in the 1932-33 school year, many districts ran out of funds. With more than one in five workers unemployed, many households didn't have the money to pay property taxes, so all of a sudden, the school boards didn't have enough money to pay their bills. Some 2,200 schools in 11 states closed entirely - in Alabama, schools in 50 out of 67 counties shut down. Many more districts cut services or sharply reduced their hours; thousands of districts in the Midwest and South shrank the school year to fewer than 120 days.
Strained States Turning to Laws to Curb Labor Unions
By STEVEN GREENHOUSE - NYTimes.com
Faced with growing budget deficits and restive taxpayers, elected officials from Maine to Alabama, Ohio to Arizona, are pushing new legislation to limit the power of labor unions, particularly those representing government workers, in collective bargaining and politics.
State officials from both parties are wrestling with ways to curb the salaries and pensions of government employees, which typically make up a significant percentage of state budgets. On Wednesday, for example, New York's new Democratic governor, Andrew M. Cuomo, is expected to call for a one-year salary freeze for state workers, a move that would save $200 million to $400 million and challenge labor's traditional clout in Albany.
Unemployment up in two-thirds of metro areas Sharp reversal from the previous month and the most since June
AP - MSNBC.com
WASHINGTON - Unemployment rates rose in more than two-thirds of the nation's largest metro areas in November, a sharp reversal from the previous month and the most since June.
The Labor Department says unemployment rates rose in 258 of the 372 largest cities, fell in 88 and remained the same in 26. That's worse than the previous month, when the rate fell in 200 areas and rose in 108.
Consumer bankruptcies hit 5-year high in 2010 Last spike was caused by rush of filings ahead of law toughening requirements
By Jonathan Stempel - Reuters - MSNBC.com
NEW YORK - The number of U.S. consumers who filed for bankruptcy protection in 2010 was the highest in five years, and the figure could rise as Americans struggle with excess debt in an uncertain economy, a report issued Monday said.
Roughly 1.53 million consumer bankruptcy petitions were filed in 2010, up 9 percent from 1.41 million in 2009, according to the American Bankruptcy Institute, citing data from the National Bankruptcy Research Center.
Filings in December totaled 118,146, up 4 percent from a year earlier and 3 percent from November's total.
Illinois Has Days to Plug $13 Billion Budget Deficit
By Tim Jones
Jan. 3 (Bloomberg) -- Illinois lawmakers will try this week to accomplish in a few days what they have been unable to do in the past two years -- resolve the state's worst financial crisis.
The legislative session that began today as the House convened will take aim at a budget deficit of at least $13 billion, including a backlog of more than $6 billion in unpaid bills and almost $4 billion in missed payments to underfunded state pensions.
The fiscal mess is largely of the lawmakers' own making, and failure to address the shortages threatens public schools, local governments and other public services, said Dan Hynes, the state's outgoing comptroller.
Oil price to return to record highs
Oil prices will rise towards the record highs of 2008 this year as a global economic recovery sparks growing demand for fuel, according to a new survey of analysts.
By Graham Ruddick and Roland Oliphant in Moscow - Telegraph.co.uk
Bernstein, the research house whose forecast for the average 2010 crude oil price came within 1pc of the actual $79.60 a barrel, is predicting that oil will average $90 this year, an increase of 13pc.
Based on the median estimate of 34 industry analysts surveyed by Bloomberg, crude futures will average $87 a barrel on the New York Mercantile Exchange. This level would be the second highest recorded in a year after the $99.75 of 2008, and 40pc more than the $62.09 of 2009.
Oswald Clint, Bernstein's head oil analyst in London, said: "We expect OPEC to have to increase their production, causing a reduction in spare capacity, which to us is increasingly becoming a more important determinant of oil prices. Since China became a more important part of the demand pie, the spare-capacity factor has become more important."
Forget About $5 Gas: $3 Gas Is Bad Enough
By Lisa Margonelli - The Atlantic
James Schlesinger famously said that Americans have two modes when it comes to oil: complacency and panic. This week, it seems, we're having both at the same time.
Today the national retail average for gasoline is $3.07 per gallon, which is higher than it's been since 2008. But instead of freaking out about that, the media has been focusing on the possibility of $5 gasoline in 2012, a claim made by former Shell President John Hofmeister. Hofmeister's point (he heads a non-profit called Citizens for Affordable Energy) is that the problem is that we're "essentially frittering at the edges of renewable energy, stifling production in hydrocarbon energy," leading to "blackouts, brownouts, gas lines, rationing."
29% Of Americans Say It's Difficult To Afford Food
DeclineOfTheEmpire.com
The Pew Research Center for the People & the Press released their year-end survey on December 15, 2010. Their pollling revealed that for the public, a tough year ended on a down note.
Consistent with the mood of the nation all year, 2010 is closing on a down note. Fully 72% are dissatisfied with national conditions, 89% rate national economic conditions as only fair or poor, and majorities or pluralities think the country is losing ground on nine of 12 major issues.
Pew's survey results are not surprising, and I would cover them in depth if it weren't for some rather important information that was buried in the next to last paragraph.
The survey finds that a majority of the public (57%) says it is very difficult or difficult to afford things they really want. About the same percentage said this two years ago (55%). And for many Americans, affording basic necessities remains a struggle - 51% say it is difficult to afford health care, 48% say the same about their home heating and electric bills, and 29% say it is difficult to afford food.
Funding uncertain for US food safety overhaul
Reuters - LATimes.com
Republican opponents of food safety legislation are already promising a fight over its funding, even before it becomes law.
President Barack Obama was scheduled to sign the bill on Tuesday. It allows the Food and Drug Administration to increase inspections of food producers and gives it more enforcement authority.
The legislation follows a series of widespread outbreaks of foodborne illness and food product recalls. Health and Human Services Secretary Kathleen Sebelius calls it "the most significant food-safety law of the last 100 years."
Appeals court says cross on federal land is unconstitutional
By the CNN Wire Staff
(CNN) -- A federal appeals court ruled Tuesday that a cross displayed on public property for nearly a century is unconstitutional.
Three versions of the Christian symbol have been erected atop 822-foot Mount Soledad in the posh La Jolla neighborhood of San Diego, California, since 1913.
The current 43-foot cross was erected in 1954 in honor of Korean War veterans and has been the subject of near constant judicial back and forth since 1989, when two Vietnam War veterans filed suit against the city, saying it violated the California Constitution's "No Preference" clause.
Wildlife Experts Probe Mass Death of Blackbirds in Arkansas
By Jeannie Nuss, Associated Press - CNSNews.com
Beebe, Ark. (AP) - Celebratory fireworks likely sent thousands of discombobulated blackbirds into such a tizzy that they crashed into homes, cars and each other before plummeting to their deaths in central Arkansas, scientists say. Still, officials acknowledge it's unlikely they'll ever pinpoint a cause with certainty.
So for the small town of Beebe, Ark., where New Year's revelers spent the holiday weekend cleaning up more than 3,000 dead red-winged blackbirds, The Mystery of Why the Birds Fell Out of the Sky remains unsolved.
Some speculated Monday that a bout of bad weather was to blame. Others said one confused bird could have led the group in a fatal plunge. A few spooked schoolkids even guessed that the birds had committed mass suicide.
"There was probably some physical reason, but I doubt anyone will ever know what it was," said Thurman Booth, the state's wildlife services director.
Estonia's step away from Russia no guide for others to join the rocky euro Poland and the Czech Republic can afford to take their time before committing irrevocably to the rocky euro. For Estonia and fellow Baltic states, EMU is a strategic imperative.
By Ambrose Evans-Pritchard - Telegraph.co.uk
They are sitting on Europe's most dangerous fault-line, nestled against Vladimir Putin's overbearing Russia.
Estonia bent every sinew to secure its place on New Year's Day as the eurozone's 17th and poorest member, even though its economy contracted by almost a fifth after the credit bubble burst and its first EMU duty may be to help bail-out fatter debt-stricken states in southern Europe.
"Estonia is too small to allow itself the luxury of full independence," said finance Minister Jurgen Ligi.
The tiny country of 1.3m people has sought to lock itself as quickly as possible into every part of the Western system - NATO's military alliance, the EU, and now a step further with currency union - hoping to raise the bar so high that Moscow cannot safely attempt to coerce the country back into Russia-s orbit.
Is The New Madrid Fault Earthquake Zone Coming To Life?
EndOfTheAmericanDream.com
What in the world is happening in the middle of the United States right now? Thousands of birds are falling dead from the skies, tens of thousands of fish are washing up on shore dead, earthquakes are popping up in weird and unexpected places and people are starting to get really freaked out about all of this. Well, one theory is that the New Madrid fault zone is coming to life. The New Madrid fault zone is six times bigger than the San Andreas fault zone in California and it covers portions of Illinois, Indiana, Missouri, Arkansas, Kentucky, Tennessee and Mississippi. The biggest earthquakes in the history of the United States were caused by the New Madrid fault. Now there are fears that the New Madrid fault zone could be coming to life again, and if a "killer earthquake" does strike it could change all of our lives forever.
Rumblings of Imminence: The New Madrid Seismic Zone
Earthquake Fault Lines in America - ABC News
New Laws Govern Guns, Web, Banks
More Provisions of Health-Care Measure Also Begin This Year
By MELANIE TROTTMAN And NATHAN KOPPEL - WSJ.com
A raft of new federal and local laws ring in the new year, governing a span of topics from health care and finance to texting, guns and smoking.
Among the most far-reaching pieces of legislation is the new federal health-care law which this year includes new taxes on drug makers, as well as lower prescription-drug costs for many seniors and restrictions on tax-free medical spending. The provisions come amid heated debate, with many lawmakers saying they hope to overturn the health-care law.
An Awful 2011 Could Crush The Middle Class Dream Of Home Ownership
By Logan Mohtashami - BusinessInsider.com
The 2010 residential real estate market was a fetid stew of foreclosed homes, short sales, falling home prices and massive shadow inventory topped off with bad corporate behavior by the lending institutions and anemic government programs designed to help troubled borrowers.
But one man's poison may be another man's medicine. Low interest rates, reduced home prices and the new homeowner tax credit meant some buyers were able to purchase homes that even two years ago would have been well beyond their economic reach.
Wien's Ten Surprises for 2011
By Teresa Rivas - Barrons.com
Byron Wien, vice chairman of Blackstone Group's Blackstone Advisory Partners, today issued his list of The Ten Surprises for 2011. This is the 26th year for the list, which also includes ten "also ran" possibilities.
Wien defines a "Surprise" as an event which the average investor would only assign a one out of three chance of taking place but which he believes is "probable," having a better than 50% likelihood of happening.
Below are his predictions:
The Surprises of 2011
Economic War
TheEconomicCollapseBlog.com
Most Americans have no idea what an "economic war" is, and even fewer realize that economic warfare is being waged against the United States right now. For generations, it has been drummed into our heads that "free trade" is always a good thing and that truly free trade will always benefit both sides in the long run. None of our universities teach that trade can actually also be used as a brutally effective weapon of warfare and that economic warfare can bring down entire societies. Nowhere in the mainstream media will you even get a hint that other nations are purposely trying to damage the U.S. economy for their own benefit. But in a world where a "shooting war" with the United States is virtually unthinkable, those that wish to damage the U.S. must resort to other means to accomplish their goals.
2010 Poll Findings that Will Matter in 2011
by Andrew Kohut, President, Pew Research Center
On issues ranging from the rising power of China to the desirability of bipartisan cooperation and the outlook for the nation's future, Americans expressed views over the course of the past year that are likely to have consequences for the future course of U.S. policy and governance.
Doing Better: Blacks' assessments about the state of black progress in America have improved more dramatically than at any time in the last quarter century. (January 2010)
We're Beholden: Most Americans identify China as the foreign country holding the most U.S. government debt and most know that the United States imports two-thirds of the oil it consumes. (January 2010)
Nothing in It for Me: In assessing the personal impact of health care legislation, relatively few say they expect their insurance coverage to improve should the measure become law. (January 2010)
A Pistol-Packin' Public: The public is divided over state and local laws banning handguns, and expresses growing support for gun rights. (March 2010)
Economic Predictions for 2011
by Bruce Krasting - OilPrice.com
Oh boy is 2011 going to be an exciting year! Some things that I think might happen:
-Volatility is going up across the board. If you have the stomach for the swings that are coming across all markets there is a ton of money to be made; balls and timing are all that are necessary. The markets will create dozens of opportunities to make and lose.
-There will be 50 days with a swing in the S&P greater than 1%. There will be 10 days where gold swings $50. There will be two days with a drop greater than 100 bucks. Most of the big moves will be down moves. Bonds will not be spared the volatility.
-Gold will be higher a year from now but off its peak. At some time in the fall, gold will be near 1,800 and the New York Times will do a front-page story that gold is on its way to 2,000. That will be the high point of the year.
Predictions For 2011
Politics item by John LeBoutillier - Jan 3, 2011
By the end of the year, the unemployment rate will still be unacceptably too high - in the 8 - 8.5% range. And that will turn the country even more sour about the economy, the future and the 2012 elections
Articles will appear asking this question: has any incumbent president ever been re-elected with unemployment north of 7% or 8%?
While President Obama will not have a Democratic Party challenger, he will be viewed as beatable in November 2012. The Upper Mid-West - from Ohio to Minnesota - all states he won in 2008 - will now be against him and his Electoral College math will be difficult.
Both parties are going to be viewed negatively by the end of 2011 precisely because the economy continues to flounder.
GOP control of the House will cause a split inside the Republicans between Tea Party conservatives who want to address the National Debt and regular Republicans who want to cut more taxes to stimulate the economy.
Has America Already Defaulted?
Editorial of The New York Sun
"Insanity" is the word an aide of President Obama, Austan Goolsbee, is using to characterize a move in Congress to block the heretofore routine raising of the ceiling on the national debt. Members of the Tea Party, among others, are urging the Congress to refuse to authorize an increase in federal borrowing and instead to concentrate on keeping outlays within what we can cover with tax revenues. The debt ceiling, after all, is already north of $14 trillion dollars. "If we hit the debt ceiling," Mr. Goolsbee, who is chairman of the Council of Economic Advisers, warned on ABC television, "that's essentially defaulting on our obligations, which is totally unprecedented in American history."
Totally?
Never Forget... The Fed Caused The Economic Downturn
Bob Chapman SilverBearCafe.com
Chairman of the Federal Reserve, Ben Bernanke, would have us believe that if it were not for QE1 unemployment would have been considerably higher. Since QE2 began in June, U6 has only improved by 1/4%. Perhaps better numbers are on the way, but that has not been an auspicious start. If we remember correctly almost all the funds in QE1 and now in QE2 have been lent to financial firms in the US and Europe, transnational conglomerates and governments and central banks. Most of those funds have been held on balance sheets to fain solvency. Very little has reached the public or to reduce unemployment. All we have to show for 2-1/2 years is a financial sector hanging on by a thread and more massive debt in the trillions.
Facing the Coming Storm
By Terry Paulson - Townhall.com
There are forces in play in 2011 that make for the perfect storm. How we face it in 2011 will determine the future of America.
One thing is certain, the great game of life in America is about to change. Deficits are skyrocketing at the state and federal levels. Our politicians have over-promised, and the government cupboards are bare. Unemployment has remained high, the economic recovery has been slow in taking off, and few politicians have wanted to face the stark budget realities that now exist.
Do Economists Need a Code of Ethics?
By Daniel Indiviglio - The Atlantic.com
The field of economics has taken a beating over the past couple of years. For all their brilliant models and complex analyses, most economists completely failed to predict the disastrous outcome of the housing bubble. Was the problem simply a feature of an imperfect discipline or the result of biases on the part of many economists that made them blind to the truth? Those who have too much faith in the field of economics to give the former possibility much credit might advocate for a potential solution to the latter
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