Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.

Wednesday 08.31.2011

'Brand USA' sees $1 trillion wiped off value by rating cut
More than $1 trillion has been wiped off the value of "Brand USA" because of the loss of the country's triple-A credit rating, according to new analysis.
By Graham Ruddick - Telegraph.co.uk
Brand Finance, the corporate advisory group, says the value of the US brand has fallen 10pc since April to $11.4 trillion.
This still means the US brand is the most valuable in the world, reflecting its position as the world's biggest economy, but it has been severely damaged by inflation, higher unemployment and a declining image in the rest of the world.
The analysis, which is based on a "detailed analysis of economic data, perceptual market research data and infrastructure measures" follows comments last week from Sir Martin Sorrell, boss of the world's biggest advertising agency WPP, that the US did not realise the damage done by the Standard & Poor's downgrade.

US consumer confidence tumbles to 28-month low
Consumers' confidence in August dropped to the lowest level in more than two years as worries about the US economy fueled the wildest stock market swings since the financial meltdown in 2008.
Telegraph.co.uk
The US Conference Board, a respected industry group, said on Tuesday its index of consumer attitudes sank to 44.5 from a downwardly revised 59.2 the month before.
The number was the lowest level since April 2009 when the reading was 40.8. It also is far below the 53.3 that analysts had expected.
"Consumer confidence deteriorated sharply in August, as consumers grew significantly more pessimistic about the short-term outlook," said Lynn Franco, director of The Conference Board Consumer Research Center in a statement.
Americans have become increasingly worried about a weak job market, higher costs for food and clothing and recent stock market turmoil.

As Austerity Bites, Europe's Rich Speak Up to Be Taxed
By JULIA WERDIGIER - NYTimes.com
LONDON — Calls from wealthy Europeans asking to pay more taxes are getting louder, with high earners from Italy, Germany and France joining in urging their governments to raise top rates or enact special levies as a way of reducing burgeoning deficits.
Maurice Lévy, chairman and chief executive of the French advertising firm Publicis, on Tuesday became the latest European business figure to ask for higher taxes on top earners, writing in The Financial Times that it was "only fair that the most privileged members of our society should take up a heavier share of this national burden."
"I am not a masochist; I do not love taxes," wrote Mr. Lévy, who is also president of a French association of private enterprises. "But right now this is important and just."

A 20-rule manifesto for New No-Growth Economics
Classical economics is fatally flawed
By Paul B. Farrell, MarketWatch
SAN LUIS OBISPO, Calif. (MarketWatch) — Yes, a New Economics. With new rules. Why? Classical economics is fatally flawed. So investors better learn the new rules that will win in the New Economy. Delay, deny, you’ll lose.
After the coming global collapse — the big wake-up call — classical economics will be exposed as a fraud sabotaging investors, destroying America.
Yes, new rules. Why? Because everything you know about economics is wrong. Everything. The old economics is a rigged game in a Wall Street casino. The cards are stacked in favor of the banks and their co-conspirators, political lobbyists, corporate CEOs and the Super Rich. The house always wins. You always lose. Worse, America is losing.

Bernanke Stays Course, Says Fed Will Consider Move in Sept.
By: Jeff Cox - CNBC.com
Federal Reserve Chairman Ben Bernanke said the Federal Reserve stands ready to use additional tools to help the US economy in its nascent recovery, but he stopped short of explicit talk that another round of monetary easing is forthcoming.
The central bank chief's hotly anticipated remarks at Jackson Hole, Wyo., did not entail promises of more quantitative easing — QE3 in market parlance — nor did he discuss specific measures on whether the Fed will make any other attempts at intervention.
Citing "a range of tools that could be used to provide additional monetary stimulus," he said the Fed "will continue to consider those and other pertinent issues, including of course economic and financial developments, at our meeting in September, which has been scheduled for two days instead of one to allow a fuller discussion," Bernanke said in the speech.

The Federal Reserve Debates Tools to Combat Slowdown
It settled on announcing its intention to keep interest rates near zero through mid-2013, but five other possibilities were also discussed
By Daniel Indiviglio - TheAtlantic.com
When the Federal Reserve chose to try to stimulate the economy with its words earlier this month, the market wasn't impressed. The Fed attempted to provide investors more certainty on interest rates, saying they would remain near zero through mid-2013. But the market wanted some more tangible action, like another round of asset purchases. In the Fed's detailed August meeting minutes, we get a glimpse of how this and other tools were considered. The discussion provides a preview of how the Fed might intervene if the economy continues to struggle.

Fed's Evans backs more easing
Not only hawks were unhappy at Aug. meeting
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) – The Federal Reserve should take further easing steps because the economy is "moving sideways" and the labor market is in a recession-like state, said Charles Evans, the president of the Chicago Fed, on Tuesday.
"I think we need to do more," Evans said in an interview with CNBC.
Evans is the first Fed official who publicly has supported additional easing. Evans is a voting member of the FOMC this year.
Fed Chairman Ben Bernanke said last week that the Federal Open Market Committee would meet for two days next month to decide whether the economy needs more stimulus.

A Few Fed Policy Makers Favored Stronger Move
By Jeannine Aversa and Scott Lanman - Blooomberg.com
A few Federal Reserve policy makers this month favored more aggressive action to stimulate the economy and lower unemployment, minutes of their meeting released today showed.
Those members, who weren't identified, "felt that recent economic developments justified a more substantial move" beyond the pledge adopted at the Aug. 9 meeting of the Federal Open Market Committeeto hold its key interest rate at a record low until mid-2013.
Stocks rallied on bets the minutes indicated growing support among Fed policy makers for further steps to bolster a recovery hobbled by unemployment stuck above 9 percent. Consumer confidence fell to the lowest point in 28 months in August, a report earlier today showed, raising the risk households will cut back on the spending that accounts for 70 percent of the world's largest economy.

Divisions at Fed Resulted in Compromise on Interest Rates
By CATHERINE RAMPELL - NYTimes.com
No one knows what to do to fix the economy.
At their meeting this month, Federal Reserve policy makers were in strong disagreement, with some advocating aggressive options to stimulate the economy and others pressing to do nothing, according to minutes released on Tuesday.
At the time of the Aug. 9 meeting, the Fed disclosed three dissenting votes — unusual given that most decisions are reached by consensus — but it was not known until Tuesday that there was such a broad array of disagreement and such vigorous debate about the options.
In the end, the Federal Open Market Committee took a middle ground, agreeing to keep interest rates near zero through mid-2013.

Double-dip fears across the West as confidence crumbles
The Western world is at mounting risk of a double-dip recession after key measures of confidence collapsed in both the United States and Europe, with Germany suffering the steepest one-month fall since records began in the 1970s.
By Ambrose Evans-Pritchard - Telegraph.co.uk
The US Conference Board's index of consumer sentiment in August plunged to the lowest level since the depths of the slump in 2009, falling to 44.5 from 59.2 in July. Future expectations fell even harder.
The drop was far steeper than expected and follows grim warnings over the weekend from Christine Lagarde, new chief of the International Monetary Fund, that the global crisis is entering "a dangerous new phase" .
The fund has slashed its growth forecast for America and Europe, according to a leaked draft of its World Economic Outlook. It has called on both the US Federal Reserve and the European Central Bank to stand ready for "further easing of monetary policy" - implying a fresh blast of quantitative easing (QE) by the Fed.

How The Economy Quietly Entered A Recession On Friday, And Why The GDP Predicts A Sub-Zero Nonfarm Payroll Number
Submitted by Tyler Durden - ZeroHedge.com
While the key market moving event from last Friday may have been Bernanke's Jackson Hole speech which merely left the door open to future QE episodes, the most important event from an economic standpoint was the first GDP revision Q2, which dropped from preliminary 1.3% to a sub stall speed, in real terms, 1.0%. What is just as important is that as the following chart from Bloomberg demonstrates, the YoY change in real GDP, which is now at 1.5%, is a slam dunk indicator of recession: "Since 1948, every time the four-quarter change has fallen below 2 percent, the economy has entered a recession. It’s hard to argue against an indicator with such a long history of accuracy." Bernanke agreed that "growth has for the most part been at rates insufficient to achieve sustained reductions in unemployment." And while Bernanke is shifting dangerously into Greenspan territory with the open-ended interpretation of his statement, another thing that is more actionable is the observation that virtually every time real YoY GDP has dropped below 1.5%, this has led to a negative nonfarm payroll number. Granted, the result may not be as shocking as what the Philly Fed implied vis-a-vis this Friday's NFP, but we believe a subzero print in the August labor report will convince the three Fed holdouts that the time for yet another monetary intervention is here (Arab Spring part deux consequences be damned).

25 Signs That The Financial World
Is About To Hit The Big Red Panic Button
TheEconomicCollapseBlog.com
Most of the worst financial panics in history have happened in the fall. Just recall what happened in 1929, 1987 and 2008. Well, September 2011 is about to begin and there are all kinds of signs that the financial world is about to hit the big red panic button. Wave after wave of bad economic news has come out of the United States recently, and Europe is embroiled in an absolutely unprecedented debt crisis. At this point there is a very real possibility that the euro may not even survive. So what is causing all of this? Well, over the last couple of decades a gigantic debt bubble has fueled a tremendous amount of "fake prosperity" in the western world. But for a debt bubble to keep going, the total amount of debt has to keep expanding at an ever increasing pace. Unfortunately for the global economy, sources of credit are starting to dry up. That is why you hear terms like "credit crisis" and "credit crunch" thrown around so much these days. Without enough credit to feed the monster, the debt bubble is going to burst. At this point, virtually the entire global economy runs on credit, so when this debt bubble bursts things could get really, really messy.

Ben Bernanke's Dream World
J. Bradford DeLong - Project-Syndicate.org
BERKELEY – US Federal Reserve Board Chairman Ben Bernanke is not regarded as an oracle in the way that his predecessor, Alan Greenspan, was before the financial crisis. But financial markets were glued to the speech he gave in Jackson Hole, Wyoming on August 26. What they heard was a bit of a muddle.
First of all, Bernanke did not propose any further easing of monetary policy to support the stalled recovery – or, rather, the non-recovery. Second, he assured his listeners that "we expect a moderate recovery to continue and indeed to strengthen." This is because "[h]ouseholds also have made some progress in repairing their balance sheets – saving more, borrowing less, and reducing their burdens of interest payments and debt." Moreover, falling commodity prices will also "help increase household purchasing power."
Finally, Bernanke claimed that "the growth fundamentals of the United States do not appear to have been permanently altered by the shocks of the past four years."

From 500 yards out, Fed weighs putter or wedge
Central bank has all but waved the white flag
WASHINGTON (MarketWatch) — If you're not interested in 10 pages of two-column verbiage, here are the condensed minutes from the Federal Open Market Committee meeting of Aug. 9:
"The economy's lousy. It's not our fault. We can do more things but they probably won't work, or at least not work well."
To be fair, the Fed does have ideas. Most we've heard before: buying more bonds, buying longer-dated bonds, cutting interest on the reserves it pays to banks that park money. (A quick aside: Even at a puny quarter-percentage point, why should the Fed be helping out banks that refuse to lend?)

How Bill Gross' wrong call on bonds has cost his Pimco investors
By Tom Petruno - LATimes.com
Bond market guru Bill Gross is telling his investors what many of them already know: He made the wrong call on U.S. Treasury bond interest rates this year, and that has cost him dearly in his renownedPimco Total Return bond fund.
Gross told the Financial Times on Monday that the U.S. economy has grown more slowly in 2011 than he had expected, which has pushed Treasury bond yields lower as investors have rushed for relative safety.
Because he kept the $245-billion Pimco fund largely out of Treasuries until recently, Gross missed out on the rising market value of older fixed-rate Treasuries as rates on new bonds fell.

PIMCO says betting against U.S. debt was a mistake
(Reuters) - Bill Gross, the manager of the world's largest bond fund, feels like "crying in his beer" for having bet so heavily against U.S. government-related debt earlier this year, the Financial Times reported on Monday.
Showing a more bearish view on the U.S. economy, Gross said PIMCO had initially dumped all of its U.S. debt holdings in March as he expected economic growth to be higher, resulting in inflation down the road.
That decision greatly undermined the performance of PIMCO's Total Return Fund. As Treasuries prices rallied, the fund lost 0.97 percent in the past four weeks, while the benchmark Barclay's U.S. Aggregated Bond Index rose 0.23 percent in the same period, according to Lipper data.

Grand jury indicts U.S. Gold & Silver Investments owner Larry Heim in $1.7 million fraud scheme
By Brent Hunsberger, The Oregonian
A federal grand jury has indicted a longtime Portland gold and silver coin peddler, alleging he and others schemed to steal $1.7 million from investors in seven states.
The Portland jury indicted Lawrence H. Heim of Tigard with 12 counts of mail fraud and one count of wire fraud, U.S. Attorney Dwight C. Holton said Wednesday in U.S. District Court. Heim had owned U.S. Gold & Silver Investments, Inc., in Portland since 1972. He also operated a websitewww.noirs.com/invest and at one point hosted a radio show, according to the indictment.
If convicted, Heim faces up to 20 years in prison and a $250,000 fine for each of the 13 charges.
As recently as February, the indictment says, Heim's website told readers: "Buy gold and silver NOW! The sell-off may be over. Remember, my calculations say that gold is going to $11,500 per ounce. That is about 8 times where it is right now."

What could lie ahead for the S&P 500 & Gold
By JW Jones& Chris Vermeulen - CommodityOnline.com
Now that Mr. Bernanke’s speech is old news, what was the financial media thinking exactly? A significant number of financial writers have been anticipating discussion of QE III or QE III Lite which clearly were never even on the Fed Chief’s radar this week. The focus of the Jackson Hole Summit was how to achieve long-run growth, not conduct discussion of monetary policy.
QE III will not be discussed openly until the next FOMC meeting in September, which noticeably was extended to two days. Besides the extension and the Fed Chairman’s prediction of growth in the back half of the year, the remainder of Mr. Bernanke’s speech was nothing more than a brief synopsis of what he has already said in the recent past.

Bob Chapman On QE3 And Gold And Silver
September And October Are Going To Be Dreadful

Gold buoyed ahead of minutes from Fed's meeting
IndiaTimes.com
LONDON: Gold edged higher on Tuesday, following its worst weekly performance in two months last week, supported by improving physical demand and some investor uncertainty ahead of minutes from the US Federal Reserve's recent policy meeting.
The Fed did not offer any indication at its annual meeting at Jackson Hole over the weekend that it would offer any additional policy measures, such as more quantitative easing to prop up the sputtering economy.
Data on Monday showed US consumer spending rose at its fastest pace in five months in July, soothing some concern about a possible slip back into recession, which boosted stocks, the dollar and some commodities, including base metals.

New wave of Chinese gold bugs emerge as prices surge
Rather than subduing investor interest in the precious metal, record prices have seen a new wave Chinese investors getting into the gold market
Author: Fayen Wong (Reuters) - Mineweb.com
SHANGHAI (REUTERS) -
Record gold prices, rather than denting China's enthusiasm for bullion, have emboldened investors to plough more money into gold bars and riskier bullion-based derivatives.
August is traditionally a slow month for Chinese jewellers, but many shops in Shanghai visited by Reuters reported surprisingly solid gold sales over the last few weeks, with shoppers unfazed by gold's stellar price gains over the past few months.

Bank of America kept AIG legal threat under wraps
By Lauren Tara LaCapra
(Reuters) - Top Bank of America Corp lawyers knew as early as January that American International Group Inc was prepared to sue the bank for more than $10 billion, seven months before the lawsuit was filed, according to sources familiar with the matter.
Bank of America shares fell more than 20 percent on August 8, the day the lawsuit was filed, adding to worries about the stability of the largest U.S. bank. It wasn't until Warren Buffett stepped up with a $5 billion investment that those fears were eased, though hardly eliminated.

BofA MBS pact faulted by Fannie/Freddie, borrowers
By Jonathan Stempel
(Reuters) - The regulator for Fannie Mae and Freddie Mac, as well as dozens of investors, on Tuesday lodged objections to Bank of America Corp's proposed $8.5 billion mortgage-backed securities settlement.
Separately, a group of homeowners sued to block the accord, saying it would speed up foreclosures and perpetuate abuses in how mortgage loans are serviced. They are seeking a court order to force Bank of America to adopt and follow servicing policies that are "higher than current industry standards."
The settlement covers 530 mortgage pools from the former Countrywide Financial Corp, which was the nation's largest mortgage lender before Bank of America bought it in 2008.

Lehman seeking creditor vote on $65 billion payout
By Nick Brown
(Reuters) - Lehman Brothers Holdings Inc (LEHMQ.PK) told a bankruptcy judge on Tuesday it has resolved or pushed off eight of the 18 objections to its plan outline to pay creditors back $65 billion and end the biggest bankruptcy in U.S. history.
The company, seeking bankruptcy court permission to let creditors vote on its plan, reached new settlements with affiliates in Singapore and the Netherlands, Lehman lawyer Harvey Miller said at a U.S. Bankruptcy Court hearing.
It still faces objections from Fidelity National Title Insurance Co, Mason Capital Management LLC, Centerbridge Credit Advisors LLC and others, Miller said.

Who Owns U.S. Debt?
Debt Carver - A breakdown of foreign and domestic control of the federal debt. [It's a GAME! and stats are also available]

An Unusual Economy?
By Thomas Sowell - PatriotPost.us
Many in the media are saying how unusual it is for our economy to be so sluggish for so long, after we have officially emerged from a recession. In a sense, they are right. But, in another sense, they are profoundly wrong.
The American economy usually rebounds a lot faster than it is doing today. After a recession passes, consumers usually increase their spending. And when businesses see demand picking up, they usually start hiring workers to produce the additional output required to meet that demand.
Some very sharp downturns in the American economy, such as in the early 1920s, were followed quickly by bouncing back to normal levels or beyond. The government did nothing -- and it worked.
In that sense, this is an unusual recovery in how long it is taking and in how slowly the economy is growing -- while the government is doing virtually everything imaginable.

EUROPE’S BIG MISTAKE
by James Surowiecki - The NewYorker.com
In July, 2008, on the eve of the biggest financial crisis in memory, the European Central Bank did something both predictable and stupid: it raised interest rates. The move was predictable because the E.C.B.’s president, Jean-Claude Trichet, was an inflation hawk; he worried about rising oil and food prices and saw a rate hike as a way of tamping them down. But the move was also remarkably ill timed. The crisis was already under way, European economic growth had slowed to a crawl, and within a couple of months the global economy had collapsed, inflation had disappeared, and the E.C.B. was forced to slash interest rates, in an attempt to avert economic disaster. That July rate hike was like kicking the economy when it was down.
One might have thought that the E.C.B. would learn from the experience. No such luck. This year, Europe has been wrestling with high unemployment, slow growth, and a continuing debt crisis, with the economies of Portugal, Ireland, Italy, Greece, and Spain (the so-called PIIGS) struggling to avoid default. Given the situation, Trichet could have decided to keep interest rates where they were, as both the Federal Reserve and the Bank of England have done. Instead, the E.C.B. raised interest rates in April and, once more, in July. Again, as if on cue, European economic growth stalled and the continent’s debt crisis deepened, which has created problems for markets around the world.

America's Self-Inflicted Decline
Malcolm Fraser - Project-Syndicate.org
MELBOURNE – If the broad post-World War II prosperity that has endured for six decades comes to an end, both the United States and Europe will be responsible. With rare exceptions, politics has become a discredited profession throughout the West. Tomorrow is always treated as more important than next week, and next week prevails over next year, with no one seeking to secure the long-term future. Now the West is paying the price.
President Barack Obama’s instincts may be an exception here, but he is fighting powerful hidebound forces in the United States, as well as a demagogic populism, in the form of the Tea Party, that is far worse – and that might defeat him in 2012, seriously damaging America in the process.

The Coming Battle Over State Public Pensions
BY MICHAEL SHEDLOCK - FinancialSense.com
In a prelude for what will eventually happen in every state, a Battle brews over Texas public pensions.

Texas could be gearing up for its own Wisconsin-style grudge match over publicemployee benefits.
A group of high-powered Houston business leaders is starting a statewide campaign to overhaul retirement for future teachers, firefighters, police officers, judges and other state and local government workers.
"I think the state needs to get the hell out of this (pension) business completely," said lawyer Bill King , who is forming Texans for Public Pension Reform with others from the Greater Houston Partnership, an über-chamber of commerce with business members representing $1.5 trillion in assets.

Fifty Seven Percent of Americans Believe Cutting Government Spending Will Help the Economy
Explaining why the emphasis is on spending
Emily Ekins | Reason.com
As explored in our previous post, public sentiment has turned toward cutting government spending. Recent Reason-Rupe poll results help explain why Americans have focused their attention on spending cuts.
First, 69 percent of Americans anticipate their future taxes increasing, and 32 percent say they anticipate their taxes to "increase a lot" over the next five years. Twenty two percent expect their taxes to stay the same and only 6 percent expect their taxes to decrease.

Obama's Labor Board Reverses Bush Union Rule
By Holly Rosenkrantz and Stephanie Armour - Bloomberg.com
The National Labor Relations Board overturned a Bush-era ruling, making it easier to organize unions, and backed efforts by organizers to form smaller units within the health-care industry, actions sought by unions.
The rulings issued today, three days after President Barack Obama’s labor-board chairman ended her tenure, are opposed by business groups such as the U.S. Chamber of Commerce and the National Association of Manufacturers.
The decisions "have the high likelihood to be severely disruptive to the workplace, will hinder job creation and put jobs at risk," Joe Trauger, vice president of human-resource policy at the Washington-based manufacturers’ group, said today in an e-mail.

Pat Buchanan: A Conspiracy of Counterfeiters
By Patrick J. Buchanan
"Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens."
"Lenin was certainly right," John Maynard Keynes continued in his 1919 classic, "The Economic Consequences of the Peace."
"There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose."

Republican Bill to Force Major Changes at the UN
By Nicole Gaouette and Bill Varner - Bloomberg.com
House Republicans introduced legislation today that seeks to force major changes at the United Nations, using as leverage the threat to withhold some of the U.S.’s 22 percent contribution to the world body’s operating budget.
The bill by Ileana Ros-Lehtinen, the Republican chairwoman of the House Foreign Affairs Committee, would demand that the UN let countries decide how much to pay and which programs they will support, rather than assessing payments based on a formula. It would end funding for Palestinian refugees, limit use of U.S. funds to only purposes outlined by Congress and put a hold on creating or expanding peacekeeping operations until management changes are made.

The Arab Democracy Deficit No One Is Talking About
By Patrick Goodenough
(CNSNews.com) – Palestinian Authority chairman Mahmoud Abbas' decision to postpone local elections – for the fourth time – has drawn little international attention, and no criticism from the U.S., the European Union or the Mideast "Quartet."
Abbas last Monday issued a decree postponing local elections in the West Bank, due on Oct. 22, "until appropriate circumstances allowing to hold it nationwide exist." The elections had already been delayed three times – in Jan. 2010, Jul. 2010 and Jul. 2011.

The Thomases vs. Obama's Health-Care Plan
Will Clarence and Virginia Thomas succeed in killing Obama's health-care plan? -- by Jeffrey Toobin - The NewYorker.com
It has been, in certain respects, a difficult year for Clarence Thomas. In January, he was compelled to amend several years of the financial-disclosure forms that Supreme Court Justices must file each year. The document requires the Justices to disclose the source of all income earned by their spouses, and Thomas had failed to note that his wife, Virginia, who is known as Ginni, worked as a representative for a Michigan college and at the Heritage Foundation. The following month, seventy-four members of Congress called on Thomas to recuse himself from any legal challenges to President Obama’s health-care reform, because his wife has been an outspoken opponent of the law. At around the same time, Court observers noted the fifth anniversary of the last time that Thomas had asked a question during an oral argument. The confluence of these events produced the kind of public criticism, and even mockery, that Thomas had largely managed to avoid since his tumultuous arrival on the Court, twenty years ago this fall.

Pending home sales fall in July
By Alejandro Lazo - LATimes.com
The number of purchase contracts signed on previously owned houses declined in July, according to industry data, the latest sign the nation's housing market remains troubled.
The National Assn. of Realtors’ pending home sales index fell to 89.7 last month. That was a 1.3% decline from June, but 14.4% above the July 2010 level.
Contracts are a leading indicator for home sales and most deals close within months of a contract being signed. A level of 100 on the home sale index is equal to the average monthly activity during 2001, which the real estate group considers a historically healthy level.

SmartPhone payment system
Phone Carriers Plan to Invest $100M in Isis
by Romy Ribitzky - Portfolio.com
Going up against Google isn't a cheap proposition by any means, especially when the strategy is aimed at hitting the search giant in the wallet.
So when Verizon teamed up with rival T-Mobile and archnemesis AT&T on a multimillion-dollar project dubbed Isis to bring mobile payments to the masses, we knew it had to cost the wireless carriers a pretty penny. But we didn't know until today just how big a price tag chasing Google commanded.
According to Bloomberg, that ballpark is somewhere in the neighborhood of $100 million.
Granted, that's a lot of money. Is it worth it?
"It's a given that people are going to be transacting more over cell phones," Chetan Sharma, an independent wireless analyst in Washington, told Bloomberg. He added that the service "could be a potential new revenue stream" for the mobile-phone operators.

Fukushima Is Continually Blasting All Of Us
With High Levels Of Cesium, Strontium And Plutonium
And Will Slowly Kill Millions For Years To Come
EndOfTheAmericanDream.com
Fukushima is now far and away the worst nuclear disaster in all of human history. Chernobyl was a Sunday picnic compared to Fukushima and the amount of cesium-137 released at Fukushima this year so far is equivalent to 168 Hiroshima bombs. The crisis at Fukushima is far, far worse than you have been told. We are talking about multiple self-sustaining nuclear meltdowns that will not be fully contained for years. In an attempt to keep people calm, authorities in Japan (and around the rest of the world as well) have lied and lied and lied. Over the months that have passed since the disaster began, small bits of the truth have slowly started to come out. Authorities are finally admitting that the area immediately surrounding Fukushima will be uninhabitable indefinitely, and they are finally admitting that the amount of radioactive material that has been released is far higher than initially reported. It is going to take the Japanese years to fully contain this problem. Meanwhile, Fukushima will continue to blast all of us with high levels of cesium, strontium and plutonium and will slowly kill millions of people around the globe for years to come.

Rense & Dr Bill Deagle - Death By Smart Meter

Tritium trouble? Nuke fears rise with quake, self-policing
By Courteney Stuart - ReadTheHook.com
After the nuclear catastrophe that followed the earthquake and tsunami in Japan last spring, some Central Virginia activists cautioned that a similar nightmare could unfold right here at the Dominion-operated North Anna nuclear generating plant in Louisa County. Despite Dominion's assurances that the plant made it through the August 23 earthquake unscathed, activists contend that the quake, which measured 5.8 on the Richter Scale and had an epicenter just eleven miles from the plant, may have been more catastrophic than anyone is admitting. New information bolsters their fears.
On Monday, August 29, the federal Nuclear Regulatory Commission announced that the quake may, in fact, have produced force that exceeded the North Anna plant's specifications and that the Commission is sending a special Augmented Inspection Team to assess the damage.

Cesium in incinerator dust across east Japan
Kyodo - JapanTimes.co.jp
High levels of cesium isotopes are cropping up in dust at 42 incineration plants in seven prefectures, including Chiba and Iwate, an Environment Ministry survey of the Kanto and Tohoku regions shows.
According to the report, released late Saturday, the highest cesium levels in the dust ranged from 95,300 becquerels in Fukushima Prefecture and 70,800 becquerels in Chiba Prefecture to 30,000 becquerels in Iwate Prefecture.
But even the lower levels in the dust exceeded 8,000 becquerels per kilogram in Ibaraki, Tochigi, Gunma and Tokyo.
The 16-prefecture survey covered 469 incinerator operators in Tohoku and Kanto from late June, and was reported to a panel of experts at the ministry that is discussing how to safely bury incinerator ash and dust with cesium levels above 8,000 becquerels per kilogram.

Israel sends 2 warships to Egyptian border
Military sources tell AP Israeli Navy sent additional warships to maritime border with Egypt following intelligence indicating viable terror threat. Meanwhile, Iran set to send 15th fleet to area as well as 'to thwart pirate activity'
News agencies - Israel News
The Israeli Navy (INF) has decided to boost its presence and patrols near Israel's maritime border with Egypt due to a viable terror threat in the area.
Israeli security sources told the Associated Press on Tuesday that two additional warships have been dispatched to Israel's Red Sea border with Egypt. Another source stressed that the operation was routine, telling Reuters that "two naval craft have been sent to the Red Sea. This is not unusual."

China's second coming in Libya
By Jian Junbo - Asia Times
LONDON - With Libyan rebels taking over Tripoli and authoritarian leader Muammar Gaddafi on the run, the rebellion aided by North Atlantic Treaty Organization-led air strikes to overthrow the Gaddafi regime will come to the end soon. Now reconstruction is an urgent practical issue on the agenda for the Libyan people and international society.
China, an active player in Libya's economic affairs, had to evacuate some 35,000 Chinese nationals - workers, managers, engineers, traders and tourists - leaving dozens of projects unattended after civil war broke out in February. It has made it plain that it is ready to return "to play an active role in future reconstruction", as Foreign Ministry spokesman Ma Chaoxu put it on August 24, under the United Nations' lead.

How al-Qaeda got to rule in Tripoli
By Pepe Escobar - Asia Times
His name is Abdelhakim Belhaj. Some in the Middle East might have, but few in the West and across the world would have heard of him.
Time to catch up. Because the story of how an al-Qaeda asset turned out to be the top Libyan military commander in still war-torn Tripoli is bound to shatter - once again - that wilderness of mirrors that is the "war on terror", as well as deeply compromising the carefully constructed propaganda of the North Atlantic Treaty Organization's (NATO's) "humanitarian" intervention in Libya.
Muammar Gaddafi's fortress of Bab-al-Aziziyah was essentially invaded and conquered last week by Belhaj's men - who were at the forefront of a militia of Berbers from the mountains southwest of Tripoli. The militia is the so-called Tripoli Brigade, trained in secret for two months by US Special Forces. This turned out to be the rebels' most effective militia in six months of tribal/civil war.

WEBSTER TARPLEY - 27 AUG 2011 -
NATO EYEING UP ATTACK ON SYRIA (1/6)

WEBSTER TARPLEY - 27 AUG 2011 -
NATO EYEING UP ATTACK ON SYRIA (2/6)

WEBSTER TARPLEY - 27 AUG 2011 -
NATO EYEING UP ATTACK ON SYRIA (3/6)

WEBSTER TARPLEY - 27 AUG 2011 -
NATO EYEING UP ATTACK ON SYRIA (4/6)

WEBSTER TARPLEY - 27 AUG 2011 -
NATO EYEING UP ATTACK ON SYRIA (5/6)

WEBSTER TARPLEY - 27 AUG 2011 -
NATO EYEING UP ATTACK ON SYRIA (6/6)

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Tuesday 08.30.2011

Polish finance minister says Europe at risk of "collapse"
BY ANDREW RETTMAN - EUObserver.com
Polish finance minister Jacek Rostowski has said the EU could "collapse" if leading countries such as Germany mishandle the financial crisis.
Speaking in Polish daily Gazeta Wyborcza on Monday (29 August), the minister said: "European elites, including German elites, must decide if they want the euro to survive - even at a high price - or not. If not, we should prepare for a controlled dismantling of the currency zone."
He added: "We have a simple choice: Solidarity or the collapse of Europe."
Rostowski criticised the German "elite" after German President Christian Wulff last week said the European Central Bank (ECB) should not buy struggling Italian and Spanish bonds.

Rehn questions political appetite for eurobonds
BY HONOR MAHONY - EUObserver.com
EU monetary affairs commissioner Olli Rehn has questioned whether euro countries are really prepared to accept the loss of national fiscal power that would come with the introduction of eurobonds - deemed by many as the principle means of exiting the eurozone debt crisis.
Speaking on Monday (29 August) of the "rather high expectations” surrounding eurobonds - which would lead to the mutualisation of eurozone debt - Rehn warned it would mean “substantially reinforced fiscal surveillance and policy coordination".
"This would have unavoidable implications for fiscal sovereignty, which calls for a substantive debate in euro area member states to see if they would be ready to accept it," he told the European Parliament’s economic and monetary affairs committee.

IMF issues warning about European banks
BY HONOR MAHONY - EUObserver.com
The head of the International Monetary Fund (IMF), Christine Lagarde on Sunday (28 August) called into question the health of European banks amid a stark warning about a global economic slowdown.
Speaking to international bankers in Jackson Hole, Wyoming, Lagarde said the weakest EU lenders may need forced capital injections to stop the eurozone crisis spreading to other countries.
Without "urgent" recapitalisation, "we could easily see the further spread of economic weakness to core countries, or even a debilitating liquidity crisis," she said, according to Bloomberg.
"The most efficient solution would be mandatory substantial recapitalisation - seeking private resources first, but using public funds if necessary," she added, suggesting that the eurozone's €440 billion rescue fund could be used for capital injections into the banks.

Wall Street surges 2 percent on Greek bank deal; trade thin
By Ryan Vlastelica - Reuters.com
(Reuters) - Stocks soared more than 2 percent in a broad rally on Monday as a merger between two big Greek banks provided a rare bit of encouraging news out of debt-stricken Europe.
A rebound in consumer spending calmed fears of a new U.S. recession and also helped lift all 10 S&P sectors. Only five S&P stocks ended in negative territory while the CBOE Volatility index .VIX, a measure of investor fear, lost 9.3 percent. But volume was low, amplifying the surge in shares.

It May Be 2008 All Over Again, But There Is One Key Difference
Submitted by Tyler Durden - ZeroHedge.com
The financial press has been inundated with articles comparing what is happening in global markets now to events in the latter part of 2008. Sure enough, the surge in Treasurys from 100 to 143 in the last two months of 2008 following the Lehman bankruptcy is most comparable to the move in the same security from 122 to 140 in the two months since the beginning of July 2011. What is disturbing is that the bulk of this move has happened after the August 2 debt deal, and after the announcement of QE2.5 or "ZIRP through mid-2013" by the Fed on August 9. Additionally, stocks have also traded in a pattern very reminiscent to what happened during the first round of the Great Financial Crisis, but the lock up in capital market liquidity, especially in Europe, may be the most obvious parallel between the two time periods. That said, there is one key difference between 2008 and 2011. Bill Buckler, in the latest edition of his Privateer, demonstrates what it is...

A Monetary Maze From Which There Is No Easy Escape
Bob Chapman - SilverBearCafe.com
It has been almost three years since the Federal Reserve took its interest rates to 1% and most recently to zero.
This allows member banks to borrow money at no cost. The Fed lends to large banks with little or no control, so that these banks, some of which are owners of the Fed, can really do as they please.
The Fed even lends at zero and re-borrows from these banks at a higher level, guaranteeing the banks a riskless profit.
Those profits would have gone to the US Treasury and the American taxpayer. These profits for the most part are the result of the creation of money and credit by the Fed.

For millions, recession is the new normal...
Virginia house painter fights to keep business
as recession becomes a way of life
By Eli Saslow - WashingtonPost.com
German Morales dressed for work in tattered painter’s jeans and a stained white T-shirt, even though he didn’t know when or whether he would paint again. He tucked a brush into his back left pocket and a rag into his right. He walked outside to the utility truck he had bought with the last money in his family’s emergency fund and called the only employee he had left.
"I'll let you know if I hear anything," he said.
He turned the truck radio to a Spanish pop station and checked his cellphone for messages. No new e-mails. No missed calls. "Half of my life is waiting," he said. He decided to kill time the way he often did, by opening the camera on his phone and looking through dozens of before-and-after photos of jobs he had completed during the past four years.

Meet the 12 People Who Have to Fix America's Money Troubles
By Loren Berlin - DailyFinance.com
There has been a pleasant lull in reporting about the debt ceiling and budget debate, but don't let the quietness fool you. As I write this, 11 men and one woman are crafting a plan to reduce the federal budget deficit by $1.5 trillion over 10 years. They are the dozen members of theJoint Select Committee on Deficit Reduction, created as part of theBudget Control Act of 2011, the deal lawmakers struck in late July to avoid a U.S. debt default.
Frequently called the Deficit Supercommittee, this band of brothers is a strange beast. But before digging into how it works, here's a quick run down of who they are. By design, there are 6 members of the House of Representatives, and another 6 from the Senate, with each delegation evenly split between Democrats and Republicans. They are:

Democrats:
1. Sen. Patty Murray (Wash.), Committee Co-Chair
2. Sen. Max Baucus (Mont.)
3. Sen. John Kerry (Mass.)
4. Rep. Jim Clyburn (S.C.)
5. Rep. Xavier Becerra (Calif.)
6. Rep. Chris Van Hollen, (Md.)

Republicans:
1. Sen. Jon Kyl (Ariz.)
2. Sen. Pat Toomey (Penn.)
3. Sen. Rob Portman (Ohio)
4. Rep. Jeb Hensarling (Texas),Committee Co-Chair
5. Rep. Dave Camp (Mich.)
6. Rep. Fred Upton (Mich.)

Debt super committee vexes even lobbyists
By Tim Reid
(Reuters) - Thousands of Washington lobbyists are scrambling to influence the work of a congressional "super committee" given the job of identifying up to $1.5 trillion in deficit reductions, with many worried about how to gain access to its 12 members.
The committee is due to report its findings by Thanksgiving and with such massive potential cuts to the U.S. federal budget being decided by just a handful of lawmakers in such a short timeframe, lobbyists say the mission to protect their clients' interests is unprecedented and potentially impossible.

What to Do in the Event of an Out of Control Money System
By Bill Bonner - SilverBearCafe.com
What strange pass have we come to?
The whole world is on the edge of its seat, this morning. Taking short breaths.
People watch. They wait. They listen for a pronunciamiento that could mean trillions in losses... or gains. It could - in theory - push up the world's growth rate... speeding up economies and bringing millions into the workforce, where they can earn money to pay for their wants and needs.
At the margin, it could make the difference between life and death. Many millions of the world's people live day to day, hand to mouth, barely getting enough food to eat. A downturn in the world's economy hits them like a plague in the Dark Ages, pushing them over the edge into famine and death.

An Entrepreneurial Fix for the U.S. Economy
Several reforms can make it faster and easier for new business startups.
By EDWARD R. MULLER AND LARRY ZIMPLEMAN - WSJ.com
Virtually everyone knows the U.S. and global economies are in serious trouble. We're in uncharted territory. Having tried conventional macroenonic tools, we are now out of ways to stimulate growth in private-sector demand, which is flat and shows no signs of picking up any time soon.
The recent political dysfunction over lifting the debt ceiling offers little to no hope that any deals on short-term stimulus or fundamental changes in our tax code and entitlement programs can be quickly enacted.
The Fed may try a third round of quantitative easing. But with consumers and business scared by the outlook and the sickening decline in stock prices, any QE3 is likely to be pushing on the proverbial string.

One More Reason to Shut the SEC and Start Over
By William D. Cohan - Bloomberg.com
Thanks to Darcy Flynn, a longtime attorney at the Securities and Exchange Commission, we now have all the ammunition we need to do what should have been done years ago: terminate the SEC, with extreme prejudice, and in its place construct a new regulatory watchdog for Wall Street free of obvious conflicts of interest.
Flynn's courage has almost been lost in all the recent apocalyptic talk of earthquakes and hurricanes, but a few weeks back he did something remarkable. After raising concerns internally at the SEC last year -- and getting nowhere -- Flynn went public and alleged in a formal whistleblower complaint that for at least 17 years the SEC “followed a policy of systematically destroying documents” related to what are known as Matters Under Investigation, or MUIs, most of which were focused on possibly illicit or illegal behavior at Wall Street firms. MUIs are the first step in investigating a case that may lead to a formal SEC inquiry.

Bring Back the Uptick Rule!
Written by Mad Hedge Fund Trader - OilPrice.com
When the Dow crashed 514 points on August 8, the market lost a staggering $850 billion in market capitalization. High frequency traders were possibly responsible for half of this move, but generated a mere $65 million in profits, some 7/1,000’s of a percent of the total loss. Are market authorities and regulators being penny wise, but pound foolish?
The carnage the HF traders are causing is triggering a rising cry from market participants to ban the despised strategy. Many are calling for the return of the "short sale test tick rule", or SEC Rule 17 CFR 240.10a-1, otherwise known as the "uptick rule", which permits traders to execute short sales only if the previous trade caused an uptick in prices. The rule was created eons ago to prevent the sort of cascading, snowballing selling that we are seeing today. It was repealed on July 6, 2007. Check out a chart of the volatility that ensued and it will make your hair raise on the back of your neck.

PIMCO On The Fiscal Folly Of The Keynesian Revolution,
And "Just Saying No" To Keynes
Submitted by Tyler Durden - ZeroHedge.com
Zero Hedge has been among the most vocal critics of Keynesian economics, and specifically the misinterpretation by modern governments of the core approach of the "Keynesian revolution", which essentially gave them a carte blanche to drown society in preemptively failed stimulus after stimulus, funded with a relentless tsunami of public debt, which, while some believe will never be "called", others, who actually base their opinions on real world empirical evidence and not textbooks, realize all too well that such debt is ultimately unsustainable, reserve currency or not. Which is why we were amused to read today in a letter by Pimco's Tony Crescenzi, the core gist of our argument, repeated so often through the years, namely finally "Saying no to Keynes and fiscal folly." The key paragraph from Pimco: "Politicians and the beneficiaries of their fiscal illusions for the past 80 years abused the Keynesian philosophy, relentlessly and dangerously pursuing the use of debt for self-aggrandizement. Today, the citizens of indebted nations bear a heavy burden and must begin repaying the debts. It is a herculean task, because the debts are mountainous.Yet, there is no choice, because investors have become intolerant of fiscal follies.They are saying no to Keynes, in other words." This also explains why during Bernanke's Jackson Hole speech the Chairman basically threw the ball back in Congress' court. Unfortunately he will soon realize that absolutely nothing will come out of this, and it will be up to him to once again guarantee that Wall Street generates yet another year of record bonuses.

Fed Faces Old Foe as Hazard Returns
By E. S. BROWNING - WSJ.com
To seasoned investors, last week's sharp market swings were a fresh reminder of a problem tormenting financial markets: moral hazard.
Stocks jumped, then sank and then rose again, as investors tried to bet on whether the Federal Reserve is going to intervene again to support financial markets.
Economists sometimes refer to that kind of market behavior as moral hazard, which refers to risky investing done in the hope that government will bail people out of any trouble they get into.

Former US finance chief says euro is 'breaking down'
BY ANDREW RETTMAN - EUObserver.com
Alan Greenspan, the former chairman of the US federal reserve, has said the eurozone is breaking apart due to variations between economies in the north and south of Europe.
Speaking during a question-and-answer session at the Innovation Nation Forum in Washington on Tuesday (23 August), the 85-year-old economist said: "The euro is breaking down and the process of its breaking down is creating very considerable difficulties in the European banking system."
He added: "That stuff [eurozone country bonds held by banks] has always been thought of as the ideal collateral and now it’s getting highly questionable."
Greenspan explained that northern countries, such as Germany and Finland, have a culture of budgetary discipline while southern nations, such as Greece, historically consume more than they produce and build up debt.

Obama picks Krueger for economic adviser
By Dave Boyer-The Washington Times
A week away from delivering a major speech on jobs and renewing a battle with congressional Republicans on the economy, President Obama on Monday named labor economist Alan B. Krueger of Princeton University to lead his depleted economic team.
"He’s one of the nation's leading economists," Mr. Obama said in announcing Mr. Krueger’s nomination in the White House Rose Garden. "We need folks in Washington to make decisions based on what’s best for the country, not what’s best for any political party or special interest."
Mr. Krueger’s nomination must be confirmed by the Senate. He was chosen to replace Austan Goolsbee, who left this month as chairman of the White House Council of Economic Advisers.

Obama's new chief economist, Alan Krueger
By James Pethokoukis - Reuters.com
.... Anyone still looking for a turn to the right from Obama will be mightily disappointed. Krueger is part of the center-left economic consensus that believes a) America is undertaxed, b) government must become permanently bigger as America ages, and c) climate change requires a vast new regulatory scheme to control carbon emissions. His big idea to boost the U.S. economy and bring the budget in balance is ginormous consumption tax on top of the current income tax system:

Why not pass a 5 percent consumption tax to take effect two years from now? … In the short run, the anticipation of a consumption tax would encourage households to spend money now, rather than after the tax is in place. Along with the rest of the economic recovery package, this would help jump-start spending in the economy and thereby increase production and employment. In the long run, a 5 percent consumption tax would raise approximately $500 billion a year, and fill a considerable hole in the budget outlook. In addition, a consumption tax would encourage more saving in the long run. Many economists consider a consumption tax an efficient way of raising tax revenue, especially in a global economy. The prospect of greater revenue flowing into federal coffers would probably help lower long-term interest rates because the government would need to borrow less down the road, and further bolster the economy.

Krueger, who was Tim Geithner’s economist over at Treasury, is probably best known for his 1990s study that showed raising the minimum wage in New Jersery didn't increase unemployment among fast-food workers. But that study seems to have been debunked. This is just one example (among many):

Libya's Attempt to Return to the Gold Standard...
and Why They REALLY Were Attacked

Gold will hit 1980 inflation adjusted peak in 12 months: UOB
NEW YORK (Commodity Online): Strong demand and a weak economy could drive Gold prices to its inflation adjusted peak of $2300 over the next 12 months says Robert Adair of UOB Asset Management.
Bullish factors for gold remain considering the long period of low interest rates and economic weakness facing the US. "Long-term we are still positive. I really can't see anything over the next 12 months that would Lead any of these support factors to change," said Adair, Reuters reported.
"Centrals banks aren't selling and they are buying, this makes gold a more respectable investment, more of a currency and less of a commodity". Central banks had become net buyers for the first time in 21 years.

9,173 Ounces Of Gold Transferred
From HSBC To JP Morgan Gold Vaults Overnight
Submitted by Tyler Durden - ZeroHedge.com
While we have no information as to who or why (we do know when and where) engaged in a transfer of 9,173 ounces of eligible gold (for a total of about $16.5 million) from HSBC's gold depository into that of JP Morgan, according to today's closing CME Group Metal Depository Statistics, we can merely point out that it happened. One back of the envelope hypothesis: we have counterparty risk at the bank level (which is currently manifesting itself at both the CDS, the stock price, and the Li(E)bor level) are we going to start seeing counterparty concerns at the gold depository level next? What next: a run on the [ ] gold depository in a self-fulfilling prophecy? The second hypothesis is by now well known- JPM needs all the gold it can get. But a paltry 9,173 ounces? Of course, the last hypothesis is that the two precisely 9,173 ounce transactions are in no way related.

Chavez takes his gold from western banks

Depreciation Is Nothing New
Mises Daily: by Ron Paul
In Marco Polo's great book of travels, he talks about a coin called the bezant circulating in Kublai Khan's Mongol Chinese empire. The emperor, like the vast majority of politicians, found the lure of paper money irresistible. In his case, however, it was money printed on pieces of mulberry tree bark. The same disastrous effects, seen everywhere else in history, followed. Prices increased, and the gold bezant took on increasing importance for the people as the government debauched the irredeemable fiat currency. Abuse of paper money helped lead, notes Antony Sutton, to the expulsion of the Mongol dynasty from China. Government demands that the people accept printed mulberry bark as equivalent to metallic money had no effect.
The bezant, however, was minted not by the Chinese, but by the Byzantine Empire. For ten centuries Byzantine coins were accepted all over the world, and Byzantium dominated trade for thousands of miles in every direction from Constantinople. Even the royal accounts of medieval England, says Dr. Sutton, were kept in bezants. The Byzantine Empire only declined when it debased the bezant, adding more cheap alloys and removing gold.

Ron Paul Interview On Fox News Sunday:
Talks Fema, Libya, Mises & More

Is Bank of America Doomed?
Warren Buffett doesn't seem to be worried about the firm's survival, but its actions show a sense of urgency
By Daniel Indiviglio - TheAtlantic.com
While most big U.S. banks appear to have recovered fairly well from the financial crisis, Bank of America continues to struggle. Its instability stems in large part from its acquisition of mortgage giant Countrywide in 2008. Recent lawsuits and other legal action over mortgages written during the housing bubble continue to plague the firm and highlight the uncertainty surrounding when its real estate-related losses will finally subside. The firm has recently attempted to add some cushion to its capital base to prepare for future losses and to calm fearful investors. But should these recent signals only worry investors even more?
China Construction Bank $8.3 Billion Share Sale
The most recent news came on Monday. BOA will sell 13.1 billion shares it holds in China Construction Bank Corp., about half of its 10% stake. The sale will produce $8.3 billion in fresh capital, of which $3.3 billion will be profit for BOA.

BofA Cashes Its China Chips
Bank Will Make $3.3 Billion as it Cuts Holding in Chinese Lender to 5% from 10%
By DAN FITZPATRICK And DAVID BENOIT - WSJ.com
Bank of America Corp. Chief Executive Brian Moynihan bought himself some breathing room as the bank agreed to sell more than $8 billion of China Construction Bank Corp. stock, its second multibillion-dollar deal in a week.
Shares rose 8% Monday, adding to a rally following a deal Thursday for Warren Buffett'sBerkshire Hathaway Inc. to buy $5 billion worth of Bank of America stock. Since the Buffett deal, the Charlotte, N.C., lender has regained $14 billion of market value.
It's a dramatic turn for a bank whose shares lost $16 billion in a single day earlier in August amid mounting questions about the bank's legal costs and its capacity to withstand another economic downturn.

Marc Faber - CNBC - 23 August 2011

Tax Haven's Tax Haven Pays a Price for Success
By DEBORAH BALL - WSJ.com
ZUG, Switzerland — Developed nations from Japan to America are desperate for growth, but this tiny lake-filled Swiss canton is wrestling with a different problem: too much of it.
Zug's history of rock-bottom tax rates, for individuals and corporations alike, has brought it an A-list of multinational businesses. Luxury shops abound, government coffers are flush, and there are so many jobs that employers sometimes have a hard time finding people to fill them.
But when Stefan Hurschler, a man who works with the disabled, and his schoolteacher wife decided to expand their family and wanted a bigger house, they found nothing in Zug they could afford. They moved to Zurich, and Mr. Hurschler now commutes back to the town he grew up in.

Enron CEO Kenneth Lay Bests IRS in Tax Court
By Richard Rubin - Bloomberg.com
The U.S. Tax Court ruled in favor of deceased Enron Corp. Chief Executive Officer Kenneth Lay, rejecting a bid by the Internal Revenue Service to collect $3.9 million from his estate and his wife.
The case was related to transactions among Lay, his wife, Linda, and Enron that were executed on Sept. 21, 2001. The Lays sold $10 million in annuities to Enron as part of an agreement for him to retake the CEO position, under the stipulation that the annuities would be returned to him if he worked a 4.25-year term. The company didn't survive that long, and it filed for bankruptcy protection in December 2001.

Union Warns Saab May Go Bankrupt
By CHRISTINA ZANDER - WSJ.com
STOCKHOLM — Swedish auto maker Saab Automobile AB could be forced into bankruptcy over unpaid wages by the end of this week, labor union IF Metall said Monday.
Darko Davidovic, a lawyer at IF Metall, said that on Aug. 26 Saab received requests for payment 1,486 union members' wages for August. "This time we had access to the company's payrolls, which was much faster than collecting pay slips from each of our members," he said.
Once it received the requests, Saab Automobile had seven days to pay its staff. If it fails to do so by Friday, IF Metall could file for a Saab Automobile bankruptcy at the district court. The union has three weeks to file for a bankruptcy or its claims will fall.

Pending home sales fall in July
By Alejandro Lazo
The number of purchase contracts signed on previously owned houses declined in July, according to industry data, the latest sign the nation's housing market remains troubled.
The National Assn. of Realtors’ pending home sales index fell to 89.7 last month. That was a 1.3% decline from June, but 14.4% above the July 2010 level.
Contracts are a leading indicator for home sales and most deals close within months of a contract being signed. A level of 100 on the home sale index is equal to the average monthly activity during 2001, which the real estate group considers a historically healthy level.

Prepare to Be Forgiven, Ye Mortgage Sinners
Submitted by RickAckerman - ZeroHedge.com
Although we waxed skeptical here the other day about Warren Buffett’s just-announced $5 billion stake in Bank of America, we allowed for the possibility that the deal will provide a handsome payoff to him no matter what happens to the bank. B of A could implode, after all, a victim of sinking collateral values for its mortgage loans, and of litigation over its securitized-lending business. There is also the wild card of homeowners challenging lenders in court to show clear title to properties that are in line for foreclosure. In fact, this issue alone has the ability to capsize the global financial system, since "clear title" is exactly what ceased to exist when the feather merchants of the banking world leveraged out real estate to-the-max earlier in the decade to create an $800 trillion derivatives edifice – the Mother Lode of Digital Money, as it were. All of that sum must be viewed at the moment as deflationary overhang, by the way – not to mention, a key stumbling point for those who argue that The Great Economic Crisis must eventually precipitate out as hyperinflation.

Refinancing Mortgages Won't Fix Housing Market
By Edward Glaeser - Bloomberg.com
The New York Times reported last week that the Obama administration was considering a proposal to "allow millions of homeowners with government-backed mortgages to refinance them at today's lower interest rates, about 4 percent."
The measure’s supporters tout this as an almost cost-free way to stimulate the economy, boost the housing market and reduce foreclosures. But universal refinancing is far from free, and is poorly designed to stimulate either the economy or the housing market. Certainly, Fannie Mae and Freddie Mac, the huge finance companies now under government control, will have to allow some mortgage modifications in order to reduce their foreclosure losses. That calls for smart, selective policies, not universal refinancing.

Part Three –
Proposed Solutions For The Housing Market
Home Prices
By Patrick Pulatie - ML-Explode.com
Home prices in many parts of the country are still inflated. People cannot afford the homes and cannot refinance to lower payments, so the homes go into default and are foreclosed up. Other homes remain on the market, vacant because there are no qualified buyers for the property at that price. This is a problem that can take care of itself over time, if the government gets out of the way.
Currently the government, in cooperation with banks, is doing everything to support home prices instead of letting them drop. Doing so prevents homeowner strategic defaults, and others going into defaults. It also lessens the losses to lenders and investors. In the words of Zig Zigler, this is "stinkin thinkin".

Cash or credit? Definitely cash
After a foreclosure, a veteran of the credit union industry decides to live a cash-only life. It's the best thing she's ever done.
By Heather Anderson - LATimes.com
I should have known better. I worked in the credit union industry and spent nearly 20 years educating members about risky mortgages, home equity loans and the importance of thrift.
Even so, in 2006, I joined the vanguard of the foreclosed-upon.
It wasn't the bad loan that did us in; although we did stupidly finance 100% of our home's inflated purchase price with an interest-only first mortgage and a home equity loan. At first, I insisted we apply for a traditional, 30-year fixed mortgage. But even with his six-figure salary and my good credit, we couldn't qualify in California's high-stakes housing game.

Saving Strategies for Older Singles
By ANNE TERGESEN - WSJ.com
A growing number of Americans are heading into their retirement years as single adults. With no spouse to rely on, these individuals need to take extra precautions to ensure a secure retirement.
Due in part to increases in divorce rates and the proportion of the population that never married, about 35% of 50- to 54-year-olds were single in 2010, up from almost 29% in 2000, according to the Census Bureau. Among 55- to 64-year-olds, 33% were single in 2010, versus 30% in 2000.
Because the cost of living for single retirees is about 40% to 50% higher than for empty-nest couples, financial advisers recommend that they save at least 15% of their pay for retirement. "Most couples have two incomes and shared economies of expenses," says Brian Pon, an adviser with offices in Berkeley and Corte Madera, Calif. In contrast, "for single savers, the responsibility of saving falls squarely on themselves."

Quake Motion May Have Exceeded Plant's Design
By REBECCA SMITH - WSJ.com
The North Anna nuclear power station in Virginia sustained shaking during a 5.8-magnitude earthquake last week that may have exceeded levels for which it was designed, the plant's utility owner said Monday.
The plant's owner, Dominion Resources Inc., notified the U.S. Nuclear Regulatory Commission of its findings late Friday.
If an investigation now under way validates that early finding, Dominion would need special approval from nuclear regulators to return the plant to service. It also would need to do more detailed inspections to make sure that anything damaged was repaired.
The NRC confirmed Dominion's initial finding and said, in a release, that data were still being "collected and analyzed to determine the precise level of shaking that was experienced at key locations."

Peru/Argentina – Country Risk!
Published by Ian R. Campbell - StockResearchPortalBlog.com
The Government of Peru announced yesterday (article reading time 1 minute) an incremental mining tax aimed at raising a further U.S.$1.1 billion in tax revenues from that country’s mining sector. This is a further example of the importance of assessing and understanding specific ‘Country Risk’ when one invests or trades in resources stocks.
I discussed the question of whether the newly elected Peruvian Government would impose incremental mining taxes during the course of my July 7, 2011 interview with Jean Martineau, Chairman and CEO of Dynacor Gold Mines. His view at that time was that imposition of incremental taxes by the Government of Peru was possible, but that it was not then a big concern of his because he didn’t think any such tax change would be material to the foreign owned mining companies operating there. Mr. Martineau has spent time in Peru since my last interview with him, and I will be interviewing him again in early September. Subscribers to StockResearchPortal.com ought to look for, and listen to, that interview if they are concerned about what I think to be escalating 'Country Risk' in a number of developing countries in South America and elsewhere.

China Shutters 6,600 Websites for Manipulating Information Online
By Loretta Chao, with contributions from Sue Feng - WSJ.com
Chinese regulators, often criticized both in and outside of China for manipulating public opinion by interfering with the flow of information online, have shut down 6,600 websites in their efforts to clamp down on “illegal public relations deals” that employ similar tactics for commercial gain.
According to state-run newspaper China Daily, telecommunications authorities shut the websites down as part of a campaign against bad public relations practices launched in April by the State Internet Information Office, recently set up to oversee Internet regulation, and several other government agencies.

Defeating the Tyranny of the 'Conventional Wisdom'
Another world is possible...
by Justin Raimondo - LewRockwell.com
I really feel sorry for Katharine Mangu-Ward: she walked into a hornet's nest when she appeared on Fox News the other day and disparaged Ron Paul – or, rather, mocked his chances of winning the GOP presidential nomination. She might have thought she was merely expressing the Conventional Wisdom on Paul’s candidacy – which, indeed,she was – but her comments underscored an important point about how social change works, which I’ll get to in a moment. But first …
As senior editor of Reason magazine, an ostensiblylibertarian publication, the Paulians rightly expected her to stand up for her team. Oddly, it was left to the other panelist, journalist and author Liz Trotta – not a libertarian, as far as I know – to defend Paul, and her defense was interesting: she said the wars are a bigger issue than anyone realizes, and since Paul is the only Republican candidate calling for an end to US intervention around the world, the issue could conceivably catapult him into the top tier. Mangu-Ward, a former staffer at the Weekly Standard, sat there and rolled her eyes, as if someone had suggested the moon is made of green cheese.

Federal judge blocks Alabama anti-illegal immigration law
By Mike Lillis - TheHill.com
A federal judge on Monday temporarily blocked Alabama from implementing one of the strictest anti-illegal immigrant laws in the country.
Without ruling on the merits of the law, U.S. District Judge Sharon Blackburn said she needed additional time to consider a series of lawsuits filed against it.
The law was scheduled to take effect Sept. 1, but Blackburn's decision gives her until Sept. 29 to rule on the challenges.

Obama's Race-Based Spoils System
by Patrick J. Buchanan - LewRockwell.com
Chester Arthur was a most unlikely reformer.
A crucial cog in the political machine of the Empire State's Sen. Roscoe Conkling, he was named by President Grant to the powerful and lucrative post of collector of customs for the Port of New York.
Arthur was removed in 1878 by President Rutherford B. Hayes, who wanted to clean up the federal patronage system. But when James Garfield of Ohio was nominated to succeed Hayes, he sought to unite his party by picking the Stalwart Arthur as running mate.

What Can We Do?
By Michael Oberndorf - PatriotPost.us
Well, folks, they're at it again. The misleaders of the Republican Party are making all sorts of noises that make it pretty clear that they are going to do what Obama-Soetoro and the moronic Marxist minions in the Democrat Party have been demanding, and raise our already ridiculously high taxes even higher. Speaking of high, it is highly unlikely that any balanced budget amendment that comes from our misleaders will bar raising taxes to accomplish it. And don't look for it to have caps, either, much less limits, on spending. They're about to sell us and our children and grandchildren down the river to live as slaves on the Progressive Tax Plantation.
Even with Congress adjourned, the money is flowing out of Washington as if we still actually had some. Millions upon millions are still being sent to foreign countries, many of whose governments are openly hostile to us. Millions upon millions are being doled out for projects like looking at drug use among Chinese prostitutes. The list of outrageous wastes of the money we had to borrow so we could give it away goes on and on, seemingly without end.

One in four Democrats wants to dump Obama
by Byron York - WashingtonExaminer.com
A new poll by CNN and ORC International finds that 27 percent of Democrats would like to see their party nominate a candidate other than Barack Obama for president in 2012.
In response to the question, "Do you think the Democratic party should renominate Barack Obama as the party's candidate for president in 2012, or do you think the Democratic party should nominate a different candidate for president in 2012?" -- 72 percent said they wanted to see Obama renominated. But 27 percent, slightly more than one in every four, said they wanted to see Democrats nominate a different candidate. One percent had no opinion.

Why It's Imperative We Replace This Administration and the Congressmen Who Support Its Objectives
By Rev. Anthony Mucciolo · PatriotPost.us
In these times where political ideology has been destructive of our reasonable economic goals (employment and home-ownership among them), parental responsibilities, including demand for a high quality education for our children inclusive of the Judeo-Christian principles of morality and communal responsibility, the security of our lands, people, and borders, and obtrusive regulations preventing the advancement of business and extraction of our vast national reserves beneficial to our national economy; it is not in our best interest to hold onto our identities as Democrats, Republicans, etc. but to insist on being recognized as Americans, and citizens of this great country we love and call home -- The United States of America. In the opening paragraph of Thomas Jefferson's Declaration of Independence, he writes:

Discretion Is Advised
By W. James Antle - The American Spectator.org
Speaking to the National Council of La Raza in July, President Obama told his restive audience that he was bound to enforce the country's immigration laws and couldn't change them without congressional approval. In response, the crowd chanted, "Yes you can, yes you can!"
La Raza apparently changed the president's mind, because according to an August 18 letter from Homeland Security Secretary Janet Napolitano, yes he did. Napolitano informed Senate Majority Leader Harry Reid and 21 other senators that DHS was focused on removing only illegal immigrants who were violent criminals, convicted felons, or repeat violators.

Arab Spring, Chinese Winter
Just after the streets of Tunisia and Egypt erupted, China saw a series of "Jasmine" protests — until the government stopped them cold. Its methods were subtler than they had been at Tiananmen Square, and more insidious. Was the regime's defensive reaction just paranoia? Or is the Chinese public less satisfied — and more combustible — than it appears?
By JAMES FALLOWS - TheAtlantic.com
SOMETHING BIG IS happening in China, and it started soon after the onset of the "Arab Spring" demonstrations and regime changes first in Tunisia and then in Egypt: the most serious and widespread wave of repression since the Tiananmen Square crackdowns 22 years ago. Of course, “worst since Tiananmen Square” does not mean "as bad as Tiananmen Square." As the government has taken pains to ensure, there have been no coordinated nationwide protests so far, and troops from the People’s Liberation Army, in their instantly recognizable green uniforms, have not played the major role that they did then in containing dissent. Instead, enforcement around the country has been left mainly to regular police, typically in their dark-blue uniforms; the much-feared "urban management" patrols known as chengguan, also in dark blue; large reserve armies of plainclothesmen; and many other less visible parts of the state’s internal-security apparatus, which now has a larger budget than China’s regular military does.

Russia and China's Energy Dispute and the Struggle for Eurasian Dominance -- Written by John Daly - OilPrice.com
China's voracious appetite for energy from anywhere has led most oil-producing nations to attempt to feed the dragon, including Russia.
But a curious situation has developed as regards Russian oil exports to the Celestial Kingdom, underlining that the two nations, which fought for global supremacy over the Communist movement for four decades, remain at best, "frenemies."
According to Chinese customs reports, last month oil imports from Russia fell by nearly half.
Not so, Rosneft says, stating that deliveries are proceeding through the Eastern Siberia-Pacific Ocean (ESPO) oil pipeline at their normal levels.
Russia is now China's ninth largest source of oil imports, with Saudi Arabia first, Iran second and Angola third.

A Syrian Activist Speaks From Damascus
A young man involved in the opposition movement discusses the mood in Damascus, his torture, and what activists want from the outside world
By Michael Weiss - TheAtlantic.com
One of the more pernicious myths of the Syrian uprising is that the country's capital is "quiet" and therefore the movement is more of a countryside phenomenon that lacks the sufficient backing of the metropolitan elite. In fact, the protest movement first took hold in Damascus' Old City on March 15, as a group of 40 people gathered in the al-Hamidiyeh souk chanting, "God, Syria, Freedom -- that is enough." The following day, March 16, 150 demonstrators convened outside the Ministry of the Interior building in central Damascus to rally against the jailing of 21 human rights activists. One protester, Suhair Atassi, a veteran human rights campaigner, was severely beaten by security forces the previous month after she attended a candlelight vigil in another part of the city. Since the early months of the uprising, the outlying suburbs of Damascus have been a hotbed of protest that have been met with the same barbaric reprisals documented in Deraa, Homs, and Hama.

U.S., Israel Monitor Suspected Syrian WMD
Intelligence Services Allege Significant Stockpiles of Gases, Missiles at Military Bases Could Be Targets Amid Unrest
ByJAY SOLOMON - WSJ.com
WASHINGTON—The U.S. and Israel are closely monitoring Syria's suspected cache of weapons of mass destruction, fearing that terror groups could take advantage of the revolt against President Bashar al-Assad to obtain blistering agents, nerve gas and long-range missiles, according to officials from both countries.
U.S intelligence services believe Syria's nonconventional weapons programs include significant stockpiles of mustard gas, VX and Sarin gas and the missile and artillery systems to deliver them.
United Nations investigators also recently concluded that Damascus had been secretly constructing a nuclear reactor with North Korean help before Israeli jets destroyed the site in late 2007. U.S. and U.N. nonproliferation officials continue to worry that Pyongyang may have provided Syria with additional nuclear-related equipment.

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Monday 08.29.2011

Consumer fears put economy on the brink
By Peter Whoriskey - WashingtonPost.com
While the Dow Jones industrial average and the unemployment rate get more attention, the shoppers outside a Wal-Mart in Northern Virginia offer a taste of what some economists believe is the more immediate reason that the U.S. economy may be on the verge of another recession.
Americans are still spooked.
More than two years after the recession’s official end, people are driving their cars a year longer, holding back on jewelry and furniture, and swapping brand names for cheaper store brands at the supermarket.

A House Divided:
A Synopsis of Bernanke's Speech at Jackson Hole,
and What It Means
JESSE'S CAFÉ AMÉRICAIN
When listening to a speech like this, one has to remember who is speaking and under what conditions. A Fed Chairman has a thousand watt megaphone attached to his chest, and so he must speak quietly and calmly, in order not to disrupt markets and place the Fed in the middle of political controversies. Unless you have actually been close to or in a position of power, where your words carry great significance, it is all too easy to forget this.
Bernanke addressed his problem with the dysfunctional Congress, gridlocked by luddites and libertines, and the serpentine leadership style of Obama. He is trying to stand his monetary policy on a two legged stool, and it is not working. The all important fiscal side of economic governance is broken. Not so much that it is doing the wrong things. Rather, the process itself is broken, hopelessly frozen by ideological warfare and implacable extremes.

Bernanke Blames Politics for Financial Upheaval
By BINYAMIN APPELBAUM - NYTimes.com
JACKSON HOLE, Wyo. — The Federal Reserve chairman, Ben S. Bernanke, said Friday that the political battle this summer over the federal government’s borrowing and spending had disrupted financial markets "and probably the economy as well."
In remarks that went well beyond his previous calls for Congress and the White House to address the nation’s long-term fiscal challenges, Mr. Bernanke suggested the process itself was broken.
"The country would be well served by a better process for making fiscal decisions," he said.

If You Thought August Was Bad, Just Wait Until September!
BY CHRIS PUPLAVA - FinancialSense.com
Up until August, this year had been fairly dull as the S&P 500 was in a trading range somewhere between 1250 and 1350. July ended near the upper end of that range and by August 2nd we were once again testing the lower 1250 level. Over the following week the S&P 500 plunged roughly 150 points to hit 1101 on August 8th before rallying. The selloff was due to a slew of negative economic releases which led to lowered economic growth expectations as well as renewed concerns over European sovereign debt markets and banks. Since August 8th the S&P 500 rallied just under 10% before selling off once more. The S&P 500's trading range is now between 1205 and 1120, and unfortunately I think we may have another repeat in which negative economic releases and continued worries over Europe may see the current trading range broken to the downside with the markets erasing all of QE2's rally from 2010.

Gold, politics, and Venezuela
By Alasdair Macleod
Markets were abuzz last week with Chavez's recall of Venezuela's gold reserves not currently held in Caracas. Bulls are excited by the thought that withdrawing some 150-200 tonnes from the Bank of England and the bullion banks will force a bear squeeze on the LBMA, where gearing between the physical and paper markets are assumed to be 100 to 1. This stretches the relationship between paper gold and physical gold even further. They are also excited by the possibility that others might follow Venezuela’s example.
These concerns are real and should not be dismissed lightly, and the announcement could not have come at a worse time for LBMA members, who also face being caught up in a European banking crisis. Fear dominates, but the real trigger for this market emotion, and therefore its outcome, is global politics. Chavez is not just recalling his country's gold to protect its integrity, he is waging an idealist’s war against the capitalist system and the US in particular. This is why he has threatened to move gold and foreign reserves to the countries he says he trusts, principally Russia and China, and why he is proposing to nationalise Venezuela's gold mines.

Bob Chapman's Friday Report:
In An Unsustainable System, A Warning of Collapse 1/4

Bob Chapman's Friday Report:
In An Unsustainable System, A Warning of Collapse 2/4

Bob Chapman's Friday Report:
In An Unsustainable System, A Warning of Collapse 3/4

Bob Chapman's Friday Report:
In An Unsustainable System, A Warning of Collapse 4/4

Federal Reserve chairman Ben Bernanke: 'US doesn't need more QE'
Hopes for immediate stimulus to bolster the global recovery have been dashed by Ben Bernanke, chairman of the US Federal Reserve. -- By Philip Aldrick - Telegraph.co.uk
In his long-awaited speech at Jackson Hole, Mr Bernanke disappointed markets by failing to signal that the Fed would launch another round of quantitative easing (QE), on top of the $2.3 trillion (£1.4 trillion) already completed.
However, he declared himself "optimistic" about long-term prospects and sought to restore faith in the world's largest economy by insisting that US fundamentals have not been "permanently altered by the shocks of the past four years" and that more stimulus is not currently warranted.

Caterpillar chief attacks Washington
By Hal Weitzman in Chicago - FT.com
The head of one of the US’s biggest manufacturers has launched a scathing attack on Washington, saying the country's economy could be dragged into another recession because of political brinkmanship on Capitol Hill.
In an interview with the Financial Times, Doug Oberhelman, chief executive of Caterpillar, the world’s biggest maker of earthmoving equipment by revenue, said he feared that pending bilateral trade agreements and road-building legislation could fall victim to political bickering.
Mr Oberhelman joins a growing chorus of US business leaders who say they are fed up with the widening gap between Democrats and Republicans, displayed most recently in the gridlock over the debate to raise the country's debt ceiling.

Central Bankers Worry Economy Still in Peril
[Google title for free article pass]
By JON HILSENRATH And CHARLES FORELLE - WSJ.com $$
JACKSON HOLE, Wyo.—After four years of fighting crises and pumping money into the financial system, the world's central bankers are concluding that the global economy is still in a precarious position and the policy apparatus is ill-equipped to help.
The mood here in the Grand Tetons, where central bankers and private economists from around the world gather each August, was distinctly gloomy.
The angst was underscored in a blunt speech by the International Monetary Fund's new managing director, Christine Lagarde. "We risk seeing the fragile recovery derailed," she said Saturday. Those risks have been aggravated, she said, by the public's sense that policy makers' response has been inadequate. "We are in a dangerous new phase," the former French finance minister said.

Lagarde speech stirs up Fed symposium
By Robin Harding in Jackson Hole, Wyoming - FT.com
It took a speech by a former French finance minister in the very last session of this year’s Federal Reserve symposium in Jackson Hole, Wyoming, to turn the formal discussion among the world’s central bankers to the issues that concerned them most.
"Developments this summer have indicated we are in a dangerous new phase," said Christine Lagarde, the new head of the International Monetary Fund, on Saturday. "The stakes are clear: we risk seeing the fragile recovery derailed. So we must act now."
Many central bankers were saying similar things on the sidelines, where the main topics were the sovereign debt crisis in the eurozone, followed by the apparent stall in the US economic recovery.

The Fed Will Let the Business Cycle Play Out Longer This Time
Fed Willing To Risk Recession!
BY SY HARDING - FinancialSense.com
Fed Willing To Risk Recession!
The Federal Reserve played its part well, along with the Treasury Department, the White House, and Congress, in helping prevent the financial meltdown of 2008-2009 from turning the ‘Great Recession’ of 2007-2009 into the next Great Depression.
But its solo intervention with its QE2 quantitative easing program last year to boost the again faltering economy seems to have only delayed the business cycle.

Bernanke Outlook Revives Risk Appettite
By John Detrixhe and Catarina Saraiva - Bloomberg.com
The dollar slid versus the majority of its most-traded peers as Federal Reserve Chairman Ben S. Bernanke said the economy hasn't deteriorated enough to need immediate stimulus, fueling appetite for higher-risk assets.
Switzerland's franc had the biggest weekly drop against the euro since July 1 on speculation policy makers will take new steps to curb its strength. The greenback fell for a second week versus the 17-nation currency as Bernanke said yesterday the Fed still has tools to stimulate the economy, spurring bets it may yet take action and damping the currency's refuge appeal. Data next week may show U.S. employers added fewer jobs this month.

Waiting on the Bear's Next Move
BY JUSTIN SMYTH - FinancialSense.com
The S&P 500 has been consolidating for two weeks now between 1100 and 1200 ever since the dramatic plunge earlier in the month. The question now is do we get a bear market rally that would logically retest the 1260 level on the S&P 500? Or does the market come under much more severe pressure with an acceleration in the European debt crisis? With the instability of the current situation it's hard to make a call either way, which is why it’s prudent to be prepared for either situation.

From Green to Red – Is Credit Crunch 2.0 Imminent?
By Satyajit Das - Ritholz.com
In Crosstown Traffic, Jimi Hendrix sang: "can't you see my signals turn from green to red / And with you I can see a traffic jam straight up ahead." In global financial markets, the signals have changed from green to red. But rather than a simple traffic jam, a full scale credit crash may be ahead.
In financial markets, facts never matter until they do but there are worrying indications.
Fact 1 – The European debt crisis has taken a turn for the worse.
There is a serious risk that even the half-baked bailout plan announced on 21 July 2011 cannot be implemented.
The sticking point is a demand for collateral for the second bailout package. Finland demanded and got Euro 500 million in cash as security against their Euro 1,400 million share of the second bailout package. Hearing of the ill-advised side deal between Greece and Finland, Austria, the Netherlands and Slovakia also are now demanding collateral, arguing that their banks were less exposed to Greece than their counterparts in Germany and France entitling them to special treatment. At least, one German parliamentarian has also asked the logical question, why Germany is not receiving similar collateral.

Merger to kickstart Greek bank consolidation
By Kerin Hope in Athens - FT.com
A friendly merger between two private Greek banks with backing from the Gulf state of Qatar has been heralded as the first move in a long-awaited consolidation of the country's struggling financial sector.
Eurobank EFG and Alpha Bank, the country's second and third largest lenders, will announce on Monday an all-share merger, to be followed by a €500m ($725m) capital injection from the Qatari government, according to people familiar with the deal.
"This is the first piece of good news for the (Greek) economy in a year," said a UK-based hedge fund manager. "It's a real private sector solution."
The merged entity, with assets of €150bn and a presence in 10 countries across south-east Europe, would be one of the three largest banks in the region.

Max Keiser & Alex Jones: 1 2 3 "Global Meltdown" 1/3

Max Keiser & Alex Jones: 1 2 3 "Global Meltdown" 2/3

Max Keiser & Alex Jones: 1 2 3 "Global Meltdown" 3/3

IMF's Lagarde:
View is growing that policymakers can't make tough choices
By Neil Irwin - WashingtonPost.com
JACKSON, Wyo. — The world economic recovery is in new peril of derailing, the head of the International Monetary Fund said Saturday as she called on leaders in the United States and Europe to take aggressive and immediate action to address new cracks appearing in the global economy.
The global economy is in a "dangerous new phase," said Christine Lagarde, the IMF managing director, speaking at a conference of top central bankers and economists. The world is endangered by "a growing sense that policymakers do not have the conviction, or simply are not willing, to take the decisions that are needed."

Euro bail-out in doubt as "hysteria" sweeps Germany
German Chancellor Angela Merkel no longer has enough coalition votes in the Bundestag to secure backing for Europe's revamped rescue machinery, threatening a consitutional crisis in Germany and a fresh eruption of the euro debt saga.
By Ambrose Evans-Pritchard - Telegraph.co.uk
Mrs Merkel has cancelled a high-profile trip to Russia on September 7, the crucial day when the package goes to the Bundestag and the country's constitutional court rules on the legality of the EU's bail-out machinery.
If the court rules that the €440bn rescue fund (EFSF) breaches Treaty law or undermines German fiscal sovereignty, it risks setting off an instant brushfire across monetary union.
The seething discontent in Germany over Europe's debt crisis has spread to all the key institutions of the state. "Hysteria is sweeping Germany " said Klaus Regling, the EFSF's director.

Merkel Says Markets Won't 'Blackmail' Euro Leaders
Into Sovereign Rescues
By Tony Czuczka - Bloomberg.com
German Chancellor Angela Merkel said investors are trying to "blackmail" governments into helping debt-strapped European countries, underscoring the need for all euro-area governments to reduce debt.
"After the states bailed out the banks, the financial markets are again trying to blackmail states and tell them, 'You've made so much debt,'" Merkel said today at a rally of her Christian Democratic Union in the eastern city of Brandenburg, about 50 kilometers (30 miles) from Berlin.
The solution is to press "countries that are highly indebted to really do their homework and get their debt down," she said. "A Europe with a common currency requires common duties."

European banks set cash test by IMF chief
European banks face ordeal by fire this week after the International Monetary Fund called for "urgent" action to shore up their defences, if necessary with state money and under legal compulsion. -- By Ambrose Evans-Pritchard - Telegraph.co.uk
Christine Lagarde, the IMF’s new chief, set off tremors at the Jackson Hole summit over the weekend with warnings that the global financial system is on very thin ice and vulnerable to the slightest shock.
"We are in a dangerous new phase. The stakes are clear: we risk seeing the fragile recovery derailed, so we must act now," she said.
"Banks need urgent recapitalisation. If it is not addressed we could easily see the further spread of economic weakness to core countries, even a debilitating liquidity crisis. The most efficient solution would be mandatory substantial recapitalisation," she said.

Christine Lagarde: EU banks must raise more cash
Christine Lagarde, the head of the International Monetary Fund (IMF), has called for European banks to be forced to raise more cash as the world economy enters a "dangerous new phase" which could end in recession.
by Sarah Rainey and Rowena Mason - Telegraph.co.uk
In a remarkably gloomy assessment of the world economy, Ms Lagarde warned that urgent action is required to stave off the threat of global recession and another credit crisis.
Sounding a stark warning to stronger European countries such as Britain and Germany, the new IMF chief said: "We could easily see the further spread of economic weakness to core countries, or even a debilitating liquidity crisis."
To reduce these risks, she called for "substantial" and mandatory recapitalisation to bolster European banks' balance sheets, which will be "key to cutting the chains of contagion".

As Trade Volumes Soar, Exchanges Cash In
By GRAHAM BOWLEY - NYTimes.com
The latest financial market convulsions have been tough for almost everyone, including traders caught on the wrong side of another big swing and pained everyday investors watching their dwindling holdings go down and up — and down again.
But there is a silver lining to even this latest market horror show, at least for the exchanges where the financial instruments change hands.
Businesses like the New York Stock Exchange and the Chicago Mercantile Exchange skim cents off each stock or contract bought or sold over their trading floors or computers. With the daily volumes of financial market contracts sent surging through their systems by nervous traders and investors up by billions, the latest trading rush is directly polishing their bottom line.

Stimulus spending: Two words that spell trouble
By GWYN MORGAN - Globe and Mail
When the collapse of Lehman Brothers Holdings Inc. in September, 2008, turned a U.S. mortgage crisis into global financial meltdown, governments in the United States and Europe staved off catastrophic banking failures by providing debt guarantees and injecting equity. As the crisis subsided, national treasuries fortuitously profited from bank equities purchased at the nadir of the recession. Act One of governments’ response to the crisis was clearly a winner. Regrettably, Act Two has been a gigantic loser.
John Maynard Keynes’s theory that governments should spend their way out of recession proved disastrous during the recessions of the 1970s and 1980s. Interest rates and inflation sky-rocketed while economic growth remained stagnant, a phenomenon that became known as "stagflation." Given this woeful legacy, it seemed certain that the stimulus spending theory had no greater chance of rising from the grave than the late economist himself.

IMF chief urges US policymakers
to help the ailing economy and the struggling housing market
By Associated Press, WashingtonPost.com
JACKSON HOLE, Wyo. — The new head of the International Monetary Fund urged U.S. policymakers to take more aggressive steps to stimulate the economy and ease the housing crisis.
IMF chief Christine Lagarde, speaking at an economic conference in Jackson Hole Saturday, said the United States should reach a "credible" plan to control government debts in the future, but push for stronger economic growth now.
If the economy stagnates, she said, plans to cut government spending in the future will lose credibility. "Who will believe that commitments to cut spending can survive a lengthy stagnation with prolonged unemployment and social dissatisfaction?" she said.

Bernanke May Seek Consensus on Easing
By Scott Lanman and Jeannine Aversa - Bloomberg.com
Federal Reserve Chairman Ben S. Bernanke's decision to extend next month's policy meeting to two days stoked speculation the extra time may allow him to forge a stronger consensus on monetary easing.
Bernanke, in a speech yesterday at the Fed’s annual forum in Jackson Hole, Wyoming, said adding a second day to the September gathering would "allow a fuller discussion" of the slowing economy and the central bank's possible response. He said the Fed still has tools to boost growth, without specifying what they were or whether they would be deployed.

Ben Bernanke realised printing yet more money would look desperate
Why didn't Ben Bernanke signal a third round of quantitative easing on Friday at the long-anticipated Jackson Hole summit?
By Liam Halligan - Telegraph.co.uk
After all, at the same event last year, the US Federal Reserve chairman made it pretty explicit another funny money missile would be launched.
After Bernanke's 2010 late-summer missive, and the resulting release of yet more "virtual money", equities surged on Western markets, the price of all "risk assets" rising by a third over the subsequent six months. By the time QE2 ended two months ago, the Fed had "expanded its balance sheet" by an astonishing $2,300bn since mid-2009.
During last year's Jackson Hole summit, Bernanke made it clear the biggest economy on earth would be fed another economic sugar rush. The Fed, he signalled, was "prepared to provide additional monetary accommodation through unconventional measures".

Study shows powerful corporations
really do control the world's finances
by Bob Yirka - PsyOrg.com
For many years conventional wisdom has said that the whole world is controlled by the monied elite, or more recently by the huge multi-national corporations that seem to sometime control the very air we breathe. Now, new research by a team based in ETH-Zurich, Switzerland, has shown that what we’ve suspected all along, is apparently true. The team has uploaded their results onto the preprint server arXiv.
Using data obtained (circa 2007) from the Orbis database (a global database containing financial information on public and private companies) the team, in what is being heralded as the first of its kind, analyzed data from over 43,000 corporations, looking at both upstream and downstream connections between them all and found that when graphed, the data represented a bowtie of sorts, with the knot, or core representing just 147 entities who control nearly 40 percent of all of monetary value of transnational corporations (TNCs).

How-to Guide for Fixing America's Banks
By Barry Ritholtz - Washington Post
For anyone who thought the U.S. banking sector was healthy, Warren Buffett’s $5 billion investment in Bank of America should be a wake-up call.
Many investors assumed the Wall Street bailouts of Bank of America and the other big banks more or less healed the sector. All it took was few trillion dollars in liquidity and a few $100 billion in recapitalization. Voila!
In fact, the banking system was not saved. The massive injections of liquidity temporarily salved the day-to-day operations of banks, but they did not repair the more profound troubles. Indeed, pouring billions into nearly identical management teams that mismanaged risk, overleveraged exposure and drove banks off the cliff in the first place was an invitation for another crisis.

Colorado bank failures exceed expectations when measured by assets
By Aldo Svaldi - The Denver Post
Although Colorado avoided the worst of the housing bubble, banks in the state are failing at five times the expected pace.
Colorado has seen eight banks holding $6.7 billion in assets fail in the current downturn.
Based on the state's share of U.S. bank assets, something closer to $1.3 billion would have been expected, according to a Denver Post analysis of 382 bank failures since 2008 began.
"The economies that were doing the best before the bubble are the ones that got hit the worst," said Don Coker, a banking analyst based in Atlanta.
That's the normal logic of bank failures. Booms create busts, and banks that are overexposed get squeezed.

WALL STREET’S NOT-SO-LITTLE SECRET
Truthdig.com
In 2008, the 10 biggest U.S. banks and brokerage firms took $829 billion in emergency loans from the U.S. Treasury and the Federal Reserve. Who got what had been a secret, but thanks to months of litigation, an act of Congress and the work of numerous reporters, we now know.
Morgan Stanley, the largest borrower, received as much as $107.3 billion, while Citigroup took $99.5 billion and Bank of America $91.4 billion. Even foreign companies borrowed large. Almost half of the Fed’s top 30 borrowers were European firms. The Edinburgh-based Royal Bank of Scotland took $84.5 billion — more than any other non-U.S. lender. Germany's Hypo Real Estate Holding AG took $28.7 billion, which Bloomberg calculated as about $21 million for each of its 1,366 employees.

34 Pieces Of Evidence That Prove
That The Middle Class In America Is Rapidly Shrinking
TheEconomicCollapseBlog.com
Do you ever get the feeling that the middle class in America is shrinking? Well, you are not imagining things. A confluence of very troubling long-term economic trends has created an environment in which the middle class in America is being absolutely shredded. Today, most American families would be absolutely thrilled if they could live as well as past generations did. The dream of receiving a solid education, getting a good job, owning a beautiful home and enjoying the good things that America has to offer is increasingly becoming out of reach for a growing number of Americans. The reality is that even though our population has grown, there are less jobs than there used to be. A much higher percentage of the jobs that remain are low income jobs. Millions of middle class American families are desperately trying to hang on as inflation far outpaces the growth of their paychecks. Millions of others have fallen completely out of the middle class and are now totally dependent on the government for survival. We once had the largest, most vibrant middle class in the history of the world, but now way too much unemployment, way too much inflation, way too much greed and way too much debt are all starting to catch up with us. America is changing, and not for the better.

American town halls more contentious than ever, in part by design
By David A. Fahrenthold, WashingtonPost.com
Greenland, N.H. — This is the pitiful state of the American town hall meeting: Even the people who invented it can’t make it work anymore.
"ORDAH!" In the Greenland town hall, a man was yelling at Rep. Frank C. Guinta (R-N.H.) for splurging on glossy paper for his office mailings, while another constituent was trying to interrupt, shouting aimlessly: "Our nation is about to go into crisis."
"ORDAH!" somebody yelled again. But there was no order.
In this same town, the residents of Greenland gather every spring to settle their differences in a civil, orderly, traditional New England town meeting. This month, Guinta couldn't even get them to shut up long enough to finish a thought.

Paul Craig Roberts:
9/11 After A Decade, Have We Learned Anything?
Alex Jones Tv 1/2

Paul Craig Roberts:
9/11 After A Decade, Have We Learned Anything?
Alex Jones Tv 1/2

Number of short sales on the rise
By Julie Schmit, USA TODAY
Short sales are increasing as a percentage of home sales in many states, helping some neighborhoods and homeowners avoid the more devastating impacts of foreclosures.
Short sales — when lenders allow financially strapped borrowers to sell homes for less than their unpaid mortgage — accounted for 12% of home sales nationwide in the second quarter. That's up from 10% in the same period last year, says researcher RealtyTrac.
The increases were sharper in some states, including California, Nevada, Michigan, Georgia and Colorado, the data show.
In Colorado, short sales were 17% of all sales in the second quarter, up from 10% a year earlier. In California, they made up 25% of sales, vs. 18%.

The Rescue That Missed Main Street
By GRETCHEN MORGENSON - NYTimes.com
FOR the last three years we have been told repeatedly by government officials that funneling hundreds of billions of dollars to large and teetering banks during the credit crisis was necessary to save the financial system, and beneficial to Main Street.
But this has been a hard sell to an increasingly skeptical public. As Henry M. Paulson Jr., the former Treasury secretary, told the Financial Crisis Inquiry Commission back in May 2010, “I was never able to explain to the American people in a way in which they understood it why these rescues were for them and for their benefit, not for Wall Street.”
The American people were right to question Mr. Paulson’s pitch, as it turns out. And that became clearer than ever last week when Bloomberg News published fresh and disturbing details about the crisis-era bailouts.

Only 600 new jobs for 17,000 applicants at Ford plant
By Jere Downs, USA TODAY and The (Louisville) Courier-Journal
Memo to the nearly 17,000 people who applied last month for $15-per-hour Ford factory jobs: If you haven't heard by now, Ford won't be calling.
About 600 of the expected 2,700 jobs at Ford's Louisville (Ky.) Assembly Plant are left for new hires after the rest were claimed by workers on layoff, or UAW union members transferring from other Ford plants.
With 30 times as many applicants as available jobs, "You have to be really lucky to get one of those spots," said Rick Elliott, who had hoped to leave his $9-per-hour security guard job for the $15.51 hourly starting pay at Ford.

The Slow Disappearance of the American Working Man
A smaller share of men have jobs today than at any time since World War II -- by Mike Dorning - Finance.Yahoo.com
As President Barack Obama puts together a new jobs plan to be revealed shortly after Labor Day, he is up against a powerful force, long in the making, that has gone virtually unnoticed in the debate over how to put people back to work: Employers are increasingly giving up on the American man.
If that sounds bleak, it's because it is. The portion of men who work and their median wages have been eroding since the early 1970s. For decades the impact of this fact was softened in many families by the increasing number of women who went to work and took up the slack. More recently, the housing bubble helped to mask it by boosting the male-dominated construction trades, which employed millions. When real estate ultimately crashed, so did the prospects for many men. The portion of men holding a job—any job, full- or part-time—fell to 63.5 percent in July—hovering stubbornly near the low point of 63.3 percent it reached in December 2009. These are the lowest numbers in statistics going back to 1948. Among the critical category of prime working-age men between 25 and 54, only 81.2 percent held jobs, a barely noticeable improvement from its low point last year—and still well below the depths of the 1982-83 recession, when employment among prime-age men never dropped below 85 percent. To put those numbers in perspective, consider that in 1969, 95 percent of men in their prime working years had a job.

An Alternative to Unemployment
By Gary Shapiro - TheAmerican Spectator.org
If there's any question that the Obama Administration is coming up dry with new ideas for job creation, Agriculture Secretary Tom Vilsack all but confirmed it last week. In an interview, Vilsack bragged that one in seven Americans are now on food stamps. Why brag about such a thing? Because, said Vilsack, every dollar from the food stamps program "generates $1.84 in the economy in terms of economic activity.… It's the most direct stimulus you can get in the economy during these tough times."
Seriously, this is what passes for economic thinking in the Obama Administration right now. By Vilsack's logic, if food stamps are such a boon to the economy, then why not put all Americans on food stamps? But it's this same faulty logic which seems to be governing the White House's plans for job creation. Even after extending unemployment insurance to an unprecedented 99 weeks two years ago, the White House seems prepared to fight any effort to eliminate the extension.

Ron Paul: People Who Bought into Govt's False Promises Could Riot When Their Entitlements Run Out

What's Next in the Obamacare Litigation?
Posted by Ilya Shapiro - Cato-At-Liberty.org
My colleagues and I have covered the substance of the Eleventh Circuit ruling that two weeks ago struck down the individual mandate, but where do we go from here? Why hasn’t the Supreme Court yet resolved the conflict between that ruling and the Sixth Circuit’s from earlier in the summer? When will it do so? A few points:

• The government is now likely to seek en banc review, meaning that they want the entire 10-judge court to review the 3-judge panel’s ruling. It’s extremely unlikely that the Eleventh Circuit would grant such a motion because the panel is already 2-1 against and the members of the court not on the panel are a 4-3 Republican-appointed majority. You need a majority (6 of 10) to get en banc review, which means the dissenting Judge Stanley Marcus from the panel, plus the three other Democratic appointees, plus two others. Not gonna happen. Thus, a government motion for en banc rehearing would be a purely political ploy to push the eventual Supreme Court decision past the election — no legal reason to do it. The release of the decision not to grant en banc review (which doesn’t require a written opinion) could be delayed, however, by the writing of a dissent from that denial.

Legislator Calls for Clarifying Copyright Law
By LARRY ROHTER - Bloomberg.com
Arguing that Congress has an obligation "to preserve fairness and justice for artists," the senior Democrat on the House Judiciary Committee has called for a revision of United States copyright law to remove ambiguities in the current statute about who is eligible to reclaim ownership rights to songs and sound recordings.
"For too long the work of musicians has been used to create enormous profits for record labels, radio stations and others, without fairly distributing these profits to the artists," said Representative John Conyers Jr. of Michigan, who was chairman of the committee until January. Because "copyrights are a tool to be used by creators to earn a living from their work," he added, it is important to ensure "a fair marketplace."

Revisiting the 2nd Amendment's right to bear arms
So far the courts have limited guns mostly to the home. But the National Rifle Assn. is asking the Supreme Court to clarify that the right extends further.
By David G. Savage, Washington Bureau - LATimes.com
Reporting from Washington— The 2nd Amendment's "right to keep and bear arms" is proving to be a right to keep a gun at home, but so far not a right to bear a loaded firearm in public.
The Supreme Court breathed new life into the amendment when it struck down strict handgun bans in Washington and Chicago and spoke of the "inherent right of self-defense."
But to the dismay of gun rights advocates, judges in recent months have read those decisions narrowly and rejected claims from those who said they had a constitutional right to carry a loaded gun on their person or in their car. Instead, these judges from California to Maryland have said the "core right" to a gun is limited to the home.

Rep. Paul:
FEMA has 'one of the worst reputations for a bureaucracy ever'
By Meghashyam Mali -TheHill.com
Republican presidential candidate Rep. Ron Paul (Texas) continued his criticisms of FEMA claiming that the agency’s approach is "deeply flawed."
"It's a system of bureaucratic centralized economic planning that is a policy that is deeply flawed," Paul said on Fox News Sunday. He argued that FEMA had "one of the worst reputations for a bureaucracy ever."
"I want to transition us out of this dependency," said Paul, arguing that people needed to abandon the idea that "FEMA will take care of us and everything will be OK."

Hook in the Bear's jaw?
Moscow to send envoy to Syria

Resolute Struggle: Russia steps up for Syria

Syrian unrest raises fears about chemical arsenal
By Joby Warrick, WashingtonPost.com
In 2008, a secret State Department cable warned of a growing chemical weapons threat from a Middle Eastern country whose autocratic leader had a long history of stirring up trouble in the region. The leader, noted for his "support for terrorist organizations," was attempting to buy technology from other countries to upgrade an already fearsome stockpile of deadly poisons, the department warned.
The Middle Eastern state with the dangerous chemicals was not Libya, whose modest stockpile was thrust into the spotlight last week because of fighting there. It was Syria, another violence-torn Arab state whose advanced weapons are drawing new concern as the country drifts toward an uncertain future.

Is US imposing Shariah law in Lybia?

First Circuit Affirms Right to Record the Police
Posted by David Rittgers - Cato-At-Liberty.org
Right to Record, a website devoted to the legal aspects of recording police officers, has the scoop. A panel of the First Circuit Court of Appeals affirmed the right of citizens to openly record police officers.

Gathering information about government officials in a form that can readily be disseminated to others serves a cardinal First Amendment interest in protecting and promoting “the free discussion of governmental affairs.” Moreover, as the Court has noted, “[f]reedom of expression has particular significance with respect to government because ‘[i]t is here that the state has a special incentive to repress opposition and often wields a more effective power of suppression.’” This is particularly true of law enforcement officials, who are granted substantial discretion that may be misused to deprive individuals of their liberties. Ensuring the public’s right to gather information about their officials not only aids in the uncovering of abuses, but also may have a salutary effect on the functioning of government more generally.

Read the whole thing. It provides a great discussion of the developing legal landscape, as well as some juicy details — like the fact that the attorney defending the statute for Massachusetts wrote her student note about how the Massachusetts wiretapping law is unconstitutional.

Hurricane Irene, Unusual Earthquakes,
Unprecedented Tornadoes,
Historic Flooding And Horrific Drought:
Why Is All Of This Stuff Happening To America?
EndOfTheAmericanDream.com
What in the world is happening to America? In more normal times it would be easy to dismiss Hurricane Irene as an isolated incident, but so far this year we have had some sort of a "major disaster" almost every single month. In addition to Hurricane Irene, this year we have also had truly unusual earthquakes, unprecedented tornadoes, historic flooding along the Mississippi and Missouri rivers, horrific drought, massive wildfires and a continuous onslaught of nuclear radiation from Fukushima. Almost every single area of the United States has been affected by at least one of these disasters. So why is all of this stuff happening to America all of a sudden? Does anyone have any theories? Right now we are having a "once in a century" disaster every few weeks, and either we are just extremely "unlucky" or there is a reason why all of this is happening.

DR BILL DEAGLE - 26TH AUGUST 2011 -
EAST COAST EQ CAUSED BY UNDERGROUND NUKING (1/3)

DR BILL DEAGLE - 26TH AUGUST 2011 -
EAST COAST EQ CAUSED BY UNDERGROUND NUKING (2/3)

DR BILL DEAGLE - 26TH AUGUST 2011 -
EAST COAST EQ CAUSED BY UNDERGROUND NUKING (3/3)

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Archived Page Link
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Friday 08.26.2011

Market crash 'could hit within weeks', warn bankers
A more severe crash than the one triggered by the collapse of Lehman Brothers could be on the way, according to alarm signals in the credit markets.
By Harry Wilson, and Philip Aldrick - Telegraph.co.uk
Insurance on the debt of several major European banks has now hit historic levels, higher even than those recorded during financial crisis caused by the US financial group's implosion nearly three years ago.
Credit default swaps on the bonds of Royal Bank of Scotland, BNP Paribas, Deutsche Bank and Intesa Sanpaolo, among others, flashed warning signals on Wednesday. Credit default swaps (CDS) on RBS were trading at 343.54 basis points, meaning the annual cost to insure £10m of the state-backed lender's bonds against default is now £343,540.
The cost of insuring RBS bonds is now higher than before the taxpayer was forced to step in and rescue the bank in October 2008, and shows the recent dramatic downturn in sentiment among credit investors towards banks.

Central bankers face uneasy mood
ahead of Jackson Hole economic summit
By Neil Irwin - WashingtonPost.com
JACKSON, Wyo. – As the world’s central bankers descend on the Grand Tetons for a closely watched annual conference, the mood in Jackson Hole is again one of profound unease.
The symposium, sponsored by the Federal Reserve Bank of Kansas City, occupies a unique place in the world of economic policy. It brings together most of the globe’s top central bankers and many of the planet’s smartest economists to talk through the issues of the day. It was here one year ago that Federal Reserve chief Ben S. Bernanke signaled openness to massive bond purchases, here in 2007 that the Fed leaders plotted a response to the budding financial crisis and here in 1990 where the central bankers of the West first met their counterparts from the former Soviet bloc.

Jackson Hole guests tell Fed to keep rabbit in hat
Many at Jackson Hole don't want to see QE3
By Greg Robb, MarketWatch
JACKSON HOLE, Wyo. (MarketWatch) — As prominent economists gather here for the scenic Federal Reserve’s annual summer retreat, many said they don’t expect, or even want, Chairman Ben Bernanke to try to pull a rabbit out of his hat to please the stock market.
Bernanke will open the Fed conference with a speech on Friday morning at 10 a.m. Eastern. Stocks have moved higher this week after being pummeled in mid-August, and many analysts attribute the move to investor hopes that Bernanke will use his speech to promise another round of asset purchases, or QE3.

Tomorrow's "Other" Event - A Sub-1% GDP Report
Submitted by Tyler Durden - ZeroHedge.com
In addition to tomorrow's 10am headline event, which most likely will not tell us anything we don't already know, a just as important data release will occur at 8:30 am, when the BEA releases its second Q2 GDP estimate. Wall Street, which is now proven to be beyond incompetent when predicting GDP data (just recall the first Q2 GDP number fiasco), anticipates a number of 1.1%, down from the preliminary 1.3%announced last month. What is disturbing is that the far more credible analysts at Stone McCarthy, a firm that does not sell bonds or stocks, and just so happens is far more accurate than most sellsiders, now predicts a stunning 0.7% first revision to GDP. And remember: this number comes 90 minutes before Bernanke comes off embargo. What will happen to the market if the algos suddenly realize that the economy is currently experiencing its first sub-0% growth GDP quarter (the first condition of a recession), and there is no help coming from Bernanke. Furthermore, Wall Street has already started revising down its August NFP data, due out the first week of September. So with the next FOMC meeting on September 20 (followed by the November 1-2 two day meeting, during whicha week ago the Fed formally announced QE2), how will the market react knowing there is no help in sight for at least 4 weeks? We doubt it will be favorable.

Nobel gurus warn Britain on fiscal overkill and Fed on monetary overkill
A leading Nobel economist has backed Labour's warnings that the UK is slashing spending too fast and risks tipping a fragile economy into another downward leg.
By Ambrose Evans-Pritchard - Telegraph.co.uk
"Britain has jumped on the band-wagon of fiscal tightening in a big way," said Professor Edmund Phelps from New York's Columbia University.
"I have some sympathy with that but I'm not sure it is being implemented as deftly as it should be. If you slam on the brakes too hard you risk throwing the infant through the windscreen," he told The Telegraph at a forum of Nobel laureates on Lake Constance.

Greece forced to tap emergency fund
Greece has been forced to activate an obscure emergency fund for its banks because they are running short of collateral that is acceptable to the European Central Bank (ECB).
By Louise Armitstead - Telegraph.co.uk
In a move described as the "last stand for Greek banks", the embattled country's central bank activated Emergency Liquidity Assistance (ELA) for the first time on Wednesday night.
Raoul Ruparel of Open Europe told The Telegraph: "The activation of the so-called ELA looks to be the last stand for Greek banks and suggests they are running alarmingly short of quality collateral usually used to obtain funding."
He added: "This kicks off another huge round of nearly worthless assets being shifted from the books of private banks onto books backed by taxpayers. Combined with the purchases of Spanish and Italian bonds, the already questionable balance sheet of the euro system is looking increasingly risky."

Fed's Hoenig Says "Fed Can't Do It All,
No Reason for Operation Twist to Work",
Focus Should Shift to Fixing U.S. Fiscal Woes
By Mike Shedlock
Fed Chairman Ben Bernanke ought to listen to common sense from Kansas City President Thomas Hoenig who says Focus Should Shift to Fixing U.S. Fiscal Woes
Federal Reserve Bank of Kansas City President Thomas Hoenig said there’s a limit to how much more the central bank can help the U.S. economy and that the focus should now be on solving the country’s fiscal problems.
"We can’t do it all," Hoenig, the central bank’s longest- serving policy maker, said in an interview with Bloomberg Television that airs today. "We have a problem in this country with debt" and "if we don’t turn to the long run, we will be dealing with overnight crises for as far as the eye can see."

Rothschild Is Now In TBTF Plunge Protection Business
Submitted by Tyler Durden - ZeroHedge.com
Following the already failed attempt by captured pan-European regulators to stop the local bank Friend-o treatment by instituting a short-selling ban, whose effectivenessas we pointed out lasted, oh, about 7 days, we find just what Plan B is. And, yes, Rothschild is involved. From the WSJ: "Societe Generale SA, whose shares have come under severe pressure in recent weeks, said Tuesday that it had signed a liquidity contract with Rothschild & Cie. to prevent excessive volatility in its stock price." That's right: Rothschild is now in the Plunge Protection business. And they all have the ECB to thank for it: after years of not learning from the New York Fed-Citadel Joint Venture, which "never" steps in at precisely the right time (wink wink), they have opened the market for third party PPT incursions. It only seems fitting that the bank that started it all, would step in and fill the void. Because after all if SocGen falls, Rothschild will sooner or later follow. That said, the official explanation is worth its weight in laughter: "The idea is not to keep the stock price high, but rather to keep it steady" a representative for Societe Generale said. After hearing such... brilliance... what really is there to say?

Treasurys gain after data, auction
Government sells 7-year notes at record-low yield
By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices advanced on Thursday, pushing 10-year yields down for the first day in four, after a report showed more first-time filings for jobless claims in the latest week than some analysts expected, weighing on stocks and adding to the pile of data pointing to a slowdown in the U.S. economy.
Bonds held the bulk of their gains after the government sold 7-year notes at the lowest yields ever.
"The issue for a long time has been about creating jobs and that’s not happening," said David Coard, manager of fixed-income sales and trading at Williams Capital Group. "A lot of it’s a flight to quality and fear driven by expectations that the economy is falling out of bed."

Buffett bolsters Bank of America
WashingtonPost.com
Bank of America, seeking to snap this year’s stock plunge, will pay billionaire Warren Buffett $300 million a year to do what he did for Goldman Sachs during the credit crisis: bolster confidence.
The $5 billion sale of preferred equity, which initially sent the shares up 26 percent, may improve investor perceptions without meaningfully affecting the source of their concern, the bank’s capital,analysts said. The deal gives Buffett's Berkshire Hathaway warrants — or the right to buy stock at a specific price — that could make it the lender’s largest stockholder.

Warren Buffett makes $280m profit
on Bank of America stake in just 24 hours
Warren Buffett's $5bn (£3.1bn) lifeline for Bank of America has earned the Sage of Omaha a paper profit of $280m in just 24 hours.
By Helia Ebrahimi, and Harry Wilson - Telegraph.co.uk
The billionaire investor bought $5bn of preferred stock with 700m warrants that convert into 7pc of the bank's shares, sending them up an initial 25pc to $8.80. They fell back to $7.67 in mid-afternoon trading, up almost 10pc on Wednesday's close.
Mr Buffett's move put some market confidence behind the bank after the hammering given to the shares in recent weeks on talk that it was short of $50bn to $200bn of capital. The bank has been hit by rumours that it may be forced to make massive writedowns on its housing debts and government bonds as well as the possibility it could haemorrhage even bigger legal bills for its mortgage liabilities.

New Rounds of QE Taking Shape Around the World
BY MONTY GUILD WITH TONY DANAHER - FinancialSense.com
At the present, a variety of QE-type activity is already underway in a number of countries. Their goal is to decrease the value of their currencies out of concern for the rising price of exports. A prime example is Switzerland, which has pumped 80 billion Swiss francs (over 100 billion dollars) of liquidity into the market to purchase Swiss bonds and swaps. That’s a lot of money. It totals about 13 percent of the total U.S. QE from September 2010 until June 2011. Moreover, it was done in a short period. The Swiss did manage to get their francs to fall a little but they paid a high price. According to the following excerpt from Citibankeconomist Michael Saunders last week, the Swiss Central Bank has indicated more moves may be on the way. He cites a Swiss National Bank report that says:

Presenting Warren "Archimedes" Buffett's
Amazing 24 Hour Monster Bank of America Due Diligence Session
Submitted by Tyler Durden - ZeroHedge.com
Earlier today, courtesy of the unbreakable bond between Warren Buffett and CNBC's Becky Quick, we learned that supposedly Warren came up with the idea to invest $5 billion in Bank of America (which really is $2 billion when accounting for the intrinsic value of the warrants, which in turn makes the dividend on his at risk investment a stunning 15% but we digress - more here) while in the bathtub on Wednesday morning. What is interesting, is that according to the just released Securities Purchase Agreement, between Warren's Archimedes moment yesterday, and the announcement this morning, here is what he contractually represents and warrants that he did:

Gold closes higher as nervousness returns
Metal turns positive after losing nearly $200 from Monday’s record -- By Claudia Assis and Polya Lesova, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures closed higher Thursday as lower equities and a swirl of rumors that Germany might be next to get a sovereign-debt downgrade contributed to renewed nervousness in the markets.
The yellow metal had spent most of the trading day extending losses, hit by a margin-requirement increase and as investors lost heart that economic stimulus is forthcoming.
Gold for December delivery added $5.90, or 0.3%, to finish at $1,763.20 an ounce on the Comex division of the New York Mercantile Exchange.
It had traded as low as $1,705.40 an ounce — some $187 below Monday’s record settlement of $1,891.90 an ounce.

The upside for gold and silver will knock your socks off - Embry
With no easy solutions to the globe's debt problems visible, Sprott Asset Management's John Embry expects gold and silver to be significant beneficiaries but the road ahead will not be easy.
Author: Geoff Candy - MineWeb.com
....Speaking on Mineweb.com's Gold Weekly podcast, Embry explains, "We've reached a stage in the debt cycle where it doesn't appear we can move forward and on that basis you need more and more debt creation to generate the same dollar real GDP growth - and I don't think we can get that kind of debt growth. So to keep these systems stuck together they [governments] are going to have employ quantitative easing in massive quantities, and if they don't, the current softness in the economy is going to turn into a rout."
Given the current levels of growth, Embry says, any halt in the funds propping up the banking system will result in significant deflation in "fairly short order" because the deflationary pressures within the West are huge.

Gold Plunges by 11% But Doesn't Change Long-Term Fundamentals
By: Adrian Ash - MarketOracle.co.uk
THE PRICE OF GOLD in professional wholesale dealing sank further on Thursday morning, plunging to a 9-session low of $1704 early in London – a drop of more than $200 per ounce from Tuesday's new record high.
"A glance at the gold price on a logarithmic scale suggests a correction was overdue," says Societe Generale's daily "macro" note.
"[But] the spectre of higher core inflation [as highlighted by last week's US consumer-price data] can only add to the attractiveness of gold, especially with interest rates so low.
"This makes the 11% decline since Tuesday’s peak seem all the more bizarre."
Pointing to what he calls "the key level on the weekly chart of $1729," Russell Browne at Scotia Mocatta says that a "break of this level would indicate an 'Outside Week' [with prices setting new highs but falling sharply lower] and warn of a deeper correction."

Gold bounces back after big plunge
By Ben Rooney - Money.CNN.com
NEW YORK (CNNMoney) -- Gold prices recovered from earlier losses Thursday to close modestly higher after a major sell-off Wednesday.
Gold futures for December delivery rose $5.90 to settle at $1,763.20 an ounce.
The modest gains came amid rumors that ratings agencies may look to downgrade Germany's credit rating.
Standard and Poor's, Fitch Ratings and Moody's Investors Services said Thursday that they did not have any updates to their AAA-rating on Germany.

Fear Sets In, Panic Begins, Ruin Perceived, Prepare for Gold $2100
By: Jim Willie CB - MarketOracle.co.uk
Something big is going on in the United States in a sentiment change, an altered state of psychology, a growing sense of panic. My opinion is that the nation has entered the early stage of comprehension among the population of systemic failure. The most immediate measures are the rash of heavy selling down days in the US Stock market, the strong purchases in Gold, as well as the reactions to constant news of sovereign debt in trouble, and the big banks teetering. Several other softer measures have been noted, made overwhelming by their sheer numbers. A perception wave has taken hold of a toxic USEconomy, a toxic US financial sector, a toxic US housing sector, a toxic economic brain trust in the US towers. A sense of doom is creeping into the nation's living rooms and board rooms, that the nation is in deterioration. Worse, they are realizing how US Federal Reserve is toothless, unable to address or treat the problems.

Gold Price Pullback, Time to Sell? Or Buy?
By: Jeff Berwick - MarketOracle.co.uk
I had one of those days. You know how sometimes you're just humming along in your car in the zone… green lights at every intersection… slow-pokes in front of you moving to the slow lane before you lose patience and honk… just generally it's as if the sea has parted for your journey.
Today was the opposite. It was like an obstacle course. I was expending twice the energy to get the usual amount of work done.
On top of it all it didn't help any to learn in the middle of it that gold was down a full c-note, even though we had expected it. Last week we suggested some profit taking BUT ONLY to rebalance portfolios in favor of the relatively undervalued miners!

Mainstreet flocks to gold and silver
by Dr Jeffrey Lewis - CommodityOnline.com
Behind the meteoric rise in Silver prices might be the European banking crisis, or it may be Ben Bernanke’s next Federal Reserve meeting. Though the headlines promote one very basic idea — a catalyst necessarily drives prices in the financial markets — transactions must take place for silver prices to move. It now appears that the catalyst has a driving force: the American public.
Last week, online auction site eBay confirmed an emerging trend: Main Street wants access to Gold and silver. As the stock markets dipped through the early August days, Main Street reshuffled their portfolio at a rate not seen since the financial crisis. Brokers recorded record transaction figures, thus giving lift to at least one segment of the financial industry still one step removed from retail banking.

On the Brink of Inflationary Disaster
Mises Daily: by Robert P. Murphy
Ever since Ben Bernanke began his massive infusions of money into the financial system, many analysts (including me) have been worried about the severe weakening of the dollar if and when the fractional-reserve-banking system magnified the initial injections severalfold.
Although the trend could reverse, data from the past two months suggest that the inflationary big one may be upon us.
Keeping the Genie in the Bottle
To understand the potential problem, we need to review some basic facts. Back in the fall of 2008, when Lehman collapsed and the entire financial system appeared in jeopardy, the Fed began bailing out investment banks through massive asset purchases and extraordinary lending operations. These activities rescued the major banks that would otherwise have gone bankrupt, by taking bad assets off their books (at inflated prices) and by propping up the new "market" price of the assets remaining on their books.

Don't Count on Gold in a Downturn
Written by Gail Tverberg - OilPrice.com
The way the price of gold keeps rising, a person might think that no matter what the downturn, gold would prove to be a good investment. I think that if things don’t fall apart too much, gold will be an OK investment. If things really start falling apart, though, it is not clear that gold will work nearly as well, especially if we expect gold to function as a currency itself.
If things don’t fall apart too much
If we keep teetering on the edge, but our current financial system remains in place, gold seems likely to be a good investment–whether it is coins or gold bars, gold shares or exchange traded funds. People are frightened, and because of this, seem likely to keep bidding up the price of gold for some time to come.

Wells Fargo's direct deposit advance - a good way to stay broke
By Tom Barlow - DailyFinance.com
Many of us have our paychecks directly deposited to our banking account. Many of us run out of money before payday. Now Well Fargo has gotten into the payday loan business with thedirect deposit advance, which allows customers to tap into their paycheck early, for a hefty fee. This offering, like tax refund advances, is really a loan; a very pricey loan.
To its credit, the bank's service agreement repeatedly states that "This is an expensive form of credit." In fact, you'll pay a finance charge of $2 for each $20 advanced, which it claims works out to an APR of 120%. However, the terms require repayment in 35 days. The way I think of APR, a vig of $2 on $20 for 35 days comes out to around 120% per month.

Banks vs. the States: Which Side are the Feds On Anyway?
BY JOHN EVAN MILLER - FinancialSense.com
The real estate market has been dominated by the ugly specter of mortgage fraud from some of the biggest names in the financial industry – companies like Bank of America, JPMorgan Chase, Wells Fargo, and Citigroup. These lenders, according to a coalition of 50 state attorney-generals, were either incompetent or unethical enough to engage in questionable foreclosure practices that resulted in the loss of thousands of homes all across the country without proper procedure being followed.
Now, the latest development in the year-long foreclosure settlement negotiations between the state governments, the federal government, and five of the biggest lenders in the country has raised a burning question for many: Whose side is the federal government on anyway?

Madoff: Wall Street Is 'So Corrupt
and Stacked Against the Typical Investor'
Bernie Madoff Says He Was 'Trapped into the Greed of Others'
ADAM CLARK ESTES - TheAtlanticWire.com
Charlie Gasparino has been talking to Bernie Madoff, who is two years into a life sentence at a federal penitentiary in North Carolina, and his latest report on what's going through the Ponzi schemer's head is fascinating. Madoff goes to great lengths to explain how corruption is just what happens on Wall Street, and the bizarre quotes he offers up at Fox Business make the entire report more than worthwhile:
• "I made a terrible mistake with the help of others but the fact that these other complicit parties were complicit does not excuse me for allowing myself to be trapped into the greed of others. The only reason my LARGE investors continued to give me money was they all believed that I was front running (illegally trading ahead of customers) like everyone else and they felt this explained my consistent performance."

America Is Under Attack
By Michael Oberndorf, RPA - PatriotPost.us
If I recall correctly -- which I do -- the federal oath of office binds employees thusly: "I, [name], do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic..." I would like to take a look at that word "domestic" as it applies to what has and is occurring in America.
As most of you are aware, the fascist and Marxist left has, over the years, infiltrated and virtually taken over middle and upper management of our government agencies. Land and environmental management agencies, especially, have been infested with radicals and extremists, the way the Democrat-run inner cities are infested with rats, cockroaches, and criminals. They are everywhere, in the daylight, and in the dark nooks and crannies.

American Workers Deserve Better Than This
Mises Daily: by Christopher Westley
Why can't everyone who wants a job, or a better job, just find one? In a perfect world, this would be the case. Sadly, the recently released employment figures for June indicate that the world in which we live is still far from perfect.
Nationally, unemployment still lingers in the low nines, with job growth clocking in at a meager 18,000 — a figure that will surely be revised downward. What's more, we are told that we had better get used to much higher unemployment levels because they reflect a "new normal" natural rate of unemployment.[1]Such is the job market following QE2 and an even more ambitious QE1, to say nothing of the various other unprecedented extramarket interventions, both fiscal and monetary, that were supposed to bring the economy to something that looked like sustainable growth by now.

Halliburton adding 11,000 jobs, mostly in North Dakota
By Annalyn Censky @CNNMoney
NEW YORK (CNNMoney) -- Halliburton is on a hiring spree this year, planning to create as many 15,000 jobs globally, including 11,000 in North America.
It's great news for the unemployed, especially those without a college degree, who -- says one company executive -- can often earn six figures a year after just two years of on-the-job training.
But here's the catch. You'll probably have to move to North Dakota if you want to snatch one of the positions.
Jim Brown, president of Halliburton's (HAL, Fortune 500) Western Hemisphere division, said the company has a need for everyone from MBAs to unskilled workers, as it builds its presence in the oil-rich Bakken shale region of North Dakota.

IS THE SOCIAL SECURITY FRAUD DRAWING TO A CLOSE?
BY JOHN HINDERAKER - PoswerLineBlog.com
Social Security, not Medicare or Medicaid, is the crown jewel of the entitlement state. For several generations now, it has been sold to voters as a more or less sacred compact. Many Americans still believe that the federal government maintains an "account" in their name, which contains assets. Some even think that their “account” contains their own contributions, carefully set aside for their retirement by Franklin Roosevelt or his successors. If this is not the biggest fraud in the history of the human race, it is certainly in the top five. Inexorable demographic realities are casting the shadow of extinction over Social Security; ironically, though, what may set the program’s demise in motion is a cheap political trick by the Democratic Party.

Welfare Rates Almost Unchanged During Recession
Welfare reform, 15 years old this week, was designed to get the structurally poor into jobs. What happens when there are lots more poor and lots fewer jobs?
By Emily Badger - Miller-McCune.com
Not surprisingly, participation in government support programs likefood stamps and unemployment insurance has soared in the United States during the recession. Those services kicked in, as the very concept of a social safety net implies, just when people have needed them the most.
But there is one odd exception to this trend: Caseloads for Temporary Assistance for Needy Families — the program created by the signing ofwelfare reform 15 years ago this week — have barely crept upnationwide since 2007. In 13 states, caseloads have dropped even as local unemployment as much as doubled.
During this bruising economy, that calls into question some core elements of the program.

Will Obama Refinance Your Mortgage?
By Douglas McIntyre - DailyFinance.com
Several media reports claim that one of the tools the Obama administration may use to resurrect the housing market and help mortgage holders remain in their homes is a program which will let people refinance at current mortgage rates. With rates at all-time lows, refinanced mortgages could save people hundreds, if not thousands of dollars a year.
The New York Timesreports that"A wave of refinancing could be a strong stimulus to the economy, because it would lower consumers' mortgage bills right away and allow them to spend elsewhere." The paper also points out that some federal regulators may try to block such a move. The plan could also complicate the value of certain mortgage-related investments.

The Language of Socialism
By Ben Shapiro - PatriotPost.us
There are a few key phrases that tell you precisely where someone stands on the political spectrum. If someone invokes "social justice," you can guarantee he or she voted for Obama, even though everyone on earth is presumably for justice in all of its forms. If someone preaches "women's rights," you know he or she supports abortion, even though the rights of the women have nothing to do with whether or not they can kill their unborn child. The left has claimed these terms, and we all know it.
Then there are terms that are deeply political in orientation, but have not yet been co-opted by either side. One of the more pernicious phrases is the "less fortunate." Politicians on both sides of the aisle routinely utilize this phrase in place of the impolitic "poor" or the dated "lower class." President Obama, for example, ripped Rep. Paul Ryan's budget plan as evidence that Republicans think they have "no obligation to people who are less fortunate." President Bush used the same phrase in 2008, when he announced that the United States has a responsibility to help "those less fortunate around the world."

Media Campaign to Undermine Ron Paul's
Presidential Candidacy Begins Again
By: Peter Schiff - MarketOracle.co.uk
Picking up where they left off in 2008, the media is in the midst of a campaign to ignore and undermine the presidential candidacy of Ron Paul (they gave me even rougher treatment during my 2010 Senate run). Political pundits just do not know what to do with a candidate who fails to fit into the blue and red boxes that form the simple narrative of American politics. They are perturbed by the grass roots nature of the campaign, by the strange honesty and earnestness of the candidate and his supporters, and the odd mixture of conservative values and liberty-minded policies. And like most adolescents, they reject what they don't understand.

Hurricane Irene: America's east coast hunkers down
North Carolina expected to bear brunt of Irene, which is heading towards wide swathe of eastern seaboard
By Suzanne Goldenberg,
US environment correspondent - Guardian.co.uk
Officials are considering whether to evacuate low-lying areas of Manhattan after hurricane Irene barrelled out of the Bahamas towards a wide swath of the eastern US.
Irene, which achieved gusts of up to 128mph on Thursday, is forecast to maintain or even increase its intensity as it progresses. The storm could hit North Carolina's Outer Banks on Saturday morning with winds of around 115mph. It is predicted to travel up the east coast, spewing rain over parts of Virginia and Washington DC, New Jersey and New York City before reaching Maine on Monday afternoon.

Media wants you to make light of Tuesday's Earthquake(s) ...

DC Earthquake
BREAKING NEWS: The President has just confirmed that the DC earthquake occurred on a rare and obscure fault-line, apparently known as "Bush's Fault". The President also announced that the Secret Service and Maxine Waters continues an investigation of the quake's suspicious ties to the Tea Party. Conservatives however have proven that it was caused by the founding fathers rolling over in their graves.

Now the SERIOUS SIDE of the DC & Colorado Earthquakes on Tuesday ... False Flag Tactical Nukes?

Hear more about this in Hawk's podcast of 8.25.2011
multiple confirmations

Thank You To Those Nameless Men And Women,
Without Equal, For Your Intervention Against False Flag Nukes
August 25, 2011
Steve Quayle
Seismic monitors and intel agents have come forth about multiple nuclear devices being intercepted and exploded underground in Virginia and Colorado, that were destined to destroy countless lives and generate a massive martial law lockdown in this country. What remains unseen to most is a group that I have named the "Mighty Men and Women of Valor", who are responsible for saving the lives of tens of millions of Americans. They fight in secret and die in secret giving their lives that others may live. They deal with things that go "bump in the night" that would cause our hearts to fail, who at this very moment, are holding the line against those things coming upon the earth from deep underground hives, star gates and outer space-not to mention the fallen angels and their earthly accomplices that have put their human race ending plan in motion.
There appears to be a "factional fight" taking place between "the ultra black military and intelligence" groups who are associated with the Luciferian bankers and the Mighty Men and Women of Valor who stand in their way for world destruction and domination.

Nuclear Detonation Confirmed?
August 19, 2011
Name withheld
This is a follow up from my previous email and the earthquake on Tuesday.
I went to my source today and they have confirm that the earthquake today with the epicenter in Virginia was a tactical nuke that did go off in an underground bunker. The mighty men and women of valor found the device and had to explode it underground. The target was the nuclear facility located in Virginia.
I also received clarification that their were seven weapons on the mainland. Five were being tracked (now just four since one was detonated) and two that they cannot account for at this time. These two are from the "shadow" group that they are trying to find.

Fukushima caesium leaks 'equal 168 Hiroshimas'
Japan's government estimates the amount of radioactive caesium-137 released by the Fukushima nuclear disaster so far is equal to that of 168 Hiroshima bombs.
Telegraph.co.uk
Government nuclear experts, however, said the World War II bomb blast and the accidental reactor meltdowns at Fukushima, which has seen ongoing radiation leaks but no deaths so far, were beyond comparison.
The amount of caesium-137 released since the three reactors were crippled by the March 11 quake and tsunami has been estimated at 15,000 tera becquerels, the Tokyo Shimbun reported, quoting a government calculation.
That compares with the 89 tera becquerels released by "Little Boy", the uranium bomb the United States dropped on the western Japanese city in the final days of World War II, the report said.
The estimate was submitted by Prime Minister Naoto Kan's cabinet to a lower house committee on promotion of technology and innovation, the daily said.

Western Mainstream Media Complicit in NATO War Crimes in Libya
By: Finian Cunningham - MarketOracle.co.uk
Libya represents a new low in Western government war crimes – which is something of a disturbing record given the decades of war criminality by these governments.
In Libya, not only is there the criminal military assault on a sovereign country, the destruction of civilian infrastructure, the murder of women and children, and all the violation of international law that that entails – we now have the complete lobotomisation of language and normal meaning of words.
And in these crimes against law, humanity and morality, the Western mainstream media have played a disgraceful, vital role.

Turkey funding Libyan rebels
By Ivan Watson, CNN
Istanbul (CNN) -- The cash-starved Libyan rebel government received emergency money in the final weeks before their advance into Tripoli -- a $100 million cash donation from the government of Turkey.
During a hastily-arranged trip to the Libyan rebel capital of Benghazi this week, Turkey's foreign minister Ahmet Davutoglu and the Transitional National Council chairman Mustafa Abdul Jalil revealed that starting in July, the Turks began rushing a total of $300 million to the rebels.
"The first 100 million is a cash donation," said Turkish foreign ministry spokesman Selcuk Unal. "The second 100 million is credit donation. ... The third 100 million is a credit loan."

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Thursday 08.25.2011

CME raises gold margin requirements again
By Myra Saefong - MarketWatch.com
For the second time this month, the CME Group Inc., the parent company of the main metals and energy exchanges in the U.S., announced late Wednesday an increase in margin requirements to trade gold. It raised the amount of money needed to trade gold contracts by 27% to $9,450 per 100-ounce contract.
The move comes on the heels of a $104-an-ounce drop in gold futures prices, which some analysts had blamed partly on speculation that the CME would raise margin requirement again.

Gold Margin Hikes and a Pullback: Variations on a Theme
JESSE'S CAFÉ AMÉRICAIN
The reason for dropping of the sell orders and associated derivative bets, lifting of gold into the oxygen depletion zone, with a subsequent series of bear raids, is obviously in honor of the September options expiration this week on the Comex, and the Jackson Hole speech of Mr. Bernanke regarding the Fed's next steps on currency debasement.
But for those who were looking for a margin increase, do not despair. We forget that there is a new kid on the block. Eric McWhinnie at the Wall Street Cheat Sheet reminds us that:
"The prior sharp selloff was seen on August 11. This is significant because the CME increased gold margins by 22%, effective after the close of business on August 11. The same beat down method seen in silver months earlier, was seen in gold. However, gold recovered quite well until yesterday’s sharp selloff. So what caused this familiar selloff in gold and silver? Another margin hike!

Central Banks Seen Retaining Gold
to Help Manage Debt as Bullion Advances
By Glenys Sim - Bloomberg.com
Central banks, net buyers of gold for the first time in a generation, are likely to retain their holdings even if they need to raise cash to counter an escalating debt crisis, according to Morgan Stanley.
"Once they've sold, that's it, and buying back would be extremely expensive," Peter Richardson, chief metals economist at Morgan Stanley Australia Ltd., said in an interview. "They would rather have the backing of a rising asset within their reserve portfolios than use it to reduce debt."
Gold rallied to a record this week as rising government debt burdens and weakening currencies boosted demand for a haven. Central banks are the biggest gold holders, and Thailand, South Korea, Kazakhstan,Mexico and Russia added to reserves this year. The precious metal is the "currency of the world" amid the debt crisis, economist Dennis Gartman wrote Aug. 19.

Gold Margins Raised 27% on CME's Comex
After Biggest Price Drop Since 2008
By Debarati Roy and Pham-Duy Nguyen - Bloomberg.com
CME Group Inc. raised the margin requirements on gold trading at its Comex unit for the second time this month, after prices surged to a record above $1,900 an ounce and then plunged today by the most since March 2008.
The minimum cash deposit for borrowing from brokers to trade gold futures will rise 27 percent to $9,450 per 100-ounce contract in the speculative Tier 1 category at the close of trading tomorrow, Chicago-based CME said in a statement. On Aug. 11, the increase by the exchange was 22 percent to $7,425. The cost of one contract after today's close was $175,730. The maintenance margin will rise to $7,000 from $5,500.

Cash Gold Extends Biggest Drop Since February 2010
as CME Raises Margins
By Phoebe Sedgman an Pham-Duy Nguyen - Bloomberg.com
Spot gold declined, extending its biggest plunge since February 2010, after CME Group Inc. increased margins on trading at its Comex unit for the second time this month.
Gold for immediate delivery slid as much as 1 percent to $1,742.31 an ounce before trading at $1,750.90 at 7:12 a.m. in Singapore. The price slumped 3.8 percent yesterday, the most since Feb. 4 last year. Futures fell 0.3 percent to $1,751.70 after plunging 5.6 percent yesterday, the most since March 2008.
The minimum cash deposit for borrowing from brokers to trade futures will jump 27 percent to $9,450 per 100-ounce contract in the speculative Tier 1 category at the close of trading today, CME said. On Aug. 11, the increase was 22 percent to $7,425. The cost of one contract after yesterday’s close was $175,730. The maintenance margin increases to $7,000 from $5,500.

Don't read too much into gold's drop
By Myra Saefong - MarketWatch.com
If gold was actually in a bubble, has that bubble popped? It’s a question some traders are asking today with gold GC1Z dropping by as much as $97 an ounce, or over 5%, but it’s probably safer not to read too much into the metal’s decline.
Kitco Metals analyst Jon Nadler on Tuesday argued that speculators were turning gold into a risky bet, even as other analysts were chiming in with predictions for gold at $2,000 – or even $3,000 an ounce.

$8,000 Gold & $500 Silver, MINIMUM:
Chapman Part 1 of 2

SEC Criminality, 2nd Amendment & Libyan Gold:
Chapman Part 2 of 2

Venezuela Asks for Its Gold Back
BY ROBERT MORLEY - theTrumpet.com
As the world’s economic system continues to break down, expect more nations to demand their gold back from Britain and America.
Venezuelan President Hugo Chávez has announced he is repatriating his country’s gold reserves from Britain, the United States and Canada. The move may be the largest gold transfer in modern history.
According to the Financial Times, Venezuela holds the world’s 15th-largest gold stockpile, most of which is stored at the Bank of England. Now, Chávez is asking for it all back — more than 200 tons’ worth. He has asked depositories in the U.S. and Canada to release smaller amounts as well.
That means over 17,000 400-ounce bars will need to be moved.

Market Bets on Fed Miracle
[Google title for Free Article pass]
By MATT PHILLIPS, DAVID WESSEL
and STEVEN RUSSOLILLO - WSJ.com $$
U.S. stocks jumped on Tuesday as many investors sent a plea to Federal Reserve Chairman Ben Bernanke: Come to the rescue of the stalling economy and battered financial markets.
The Dow Jones Industrial Average jumped 322.11 points, or 3%, to 11176.76 as a new round of bleak economy data helped buoy investor hopes that Mr. Bernanke will step in with some sort of monetary stimulus.
That optimism comes despite all signs to the contrary. Federal Reserve officials are saying nothing to encourage market speculation that Mr. Bernanke will use a speech in Jackson Hole, Wyo., Friday to unveil further Fed action to boost U.S. economic growth.

More Subsidization?
Published by Ian R. Campbell - StockResearchPortalBlog.com
On Friday of this week U.S. Federal Reserve Chairman Bernanke will speak at the Fed’s annual symposium in Jackson Hole, Wyoming. An article yesterday stated (as I am sure many other articles and commentaries did) that 'All Eyes On Bernanke: Will He Send Stocks Soaring (Again)?' The article focuses on whether or not Mr. Bernanke, in light of the behavior of the financial markets in recent weeks, will announce further U.S. quantitative easing, or imply it may be coming. The article says:
"Regardless of the specific steps the Fed takes, the net effect should be the same as QE2: An excuse to buy stocks as the Fed signals an intention to keep the economic ball rolling. With the knowledge any deeper economic weakness in the months to come will be met with corresponding stimulation, investors need not focus on any sort of doomsday scenario for the economy. After the recent massive sell-off that has created hundreds of stock bargains, this all could put investors back into a buying mood."

Ben Bernanke unlikely to announce big new plans at Jackson Hole
By Neil Irwin - WashingtonPost.com
This time a year ago, Federal Reserve Chairman Ben S. Bernanke headed to an annual gathering of central bankers in Jackson Hole, Wyo., amid a faltering U.S. economy, a perilous global situation, and rising calls on Wall Street for the Fed to do something to address both.
Here we go again.
Bernanke is to deliver a speech Friday morning in the same ballroom in the shadow of the Grand Teton mountains where last year he gave a speech that laid the groundwork for a $600 billion program of bond purchases aimed at lifting the economy. The financial world is obsessing over the possibility of another go-round. The thought that Bernanke may offer hints of new steps to boost growth contributed to big gains on Wall Street Tuesday, with the Standard & Poor’s 500-stock index up 3.4 percent.

Could Goldman Sachs Group Inc. CEO Lloyd Blankfein
Do the First "Perp Walk" of the Financial Crisis?
BY KEITH FITZ-GERALD, Chief Investment Strategist, Money Morning
Lloyd Blankfein, chief executive officer of Goldman Sachs Group Inc., has hired high-profile criminal defense lawyer Reid Weingarten.
This is a game changer even if we don't yet know where the fire is.
Blankfein has led the firm for six years and spent the past two dealing with allegations of conflicts of interest and fraud. A Senate report released in April said Goldman dumped subprime loan exposure onto unsuspecting clients during the mortgage meltdown and then in 2010 gave Congress misleading testimonials about the firm's actions.
So far, Blankfein has not been accused of any crime or crimes. That means, and I cannot stress this strongly enough, that he is innocent in the court of law - even if he is held slightly above pond scum in the court of public opinion for his and Goldman's role in causing the financial crisis.

Germany fires cannon shot across Europe's bows
German President Christian Wulff has accused the European Central Bank of violating its treaty mandate with the mass purchase of southern European bonds.
By Ambrose Evans-Pritchard, in Lindau, Germany - Telegraph.co.uk
In a cannon shot across Europe’s bows, he warned that Germany is reaching bailout exhaustion and cannot allow its own democracy to be undermined by EU mayhem.
"I regard the huge buy-up of bonds of individual states by the ECB as legally and politically questionable. Article 123 of the Treaty on the EU’s workings prohibits the ECB from directly purchasing debt instruments, in order to safeguard the central bank’s independence," he said.
"This prohibition only makes sense if those responsible do not get around it by making substantial purchases on the secondary market," he said, speaking at a forum of half the world’s Nobel economists on Lake Constance to review the errors of the profession over recent years.

Finland threatens to withdraw Greek bailout support
Jyrki Katainen, the Finnish prime minister, has threatened to withdraw support for the Greek bailout in a move that could crush the fragile signs of recovery on global markets.
By Louise Armitstead - Telegraph.co.uk
Mr Katainen said that if Finland's bilateral agreement with Greece over collateral payments was overruled, the Nordic country could back out of the rescue programme.
He told reporters that the private collateral agreement, in which Greece agreed to give Finland €1bn (£875m) in cash in return for its suppport, was "our parliament's decision that we demand it as a condition for us joining in".
Stock markets around the world climbed on Tuesday as positive economic data in China and America convinced traders that recent fears have been overblown.

The European Banking System is Finally on the Verge of Collapse
BY KEITH FITZ-GERALD, Chief Investment Strategist, Money Morning
I hate to sound alarmist, but it looks as though the European banking system - and consequently the global banking system - is edging its way towards another epic collapse.
That means in just a few short months, stocks could be back at their 2009 lows while gold prices travel north of $2,500 an ounce.
This is the worst-case scenario that's been bandied about ever since Europe's debt problems first came to light.
How do we know that this is what's happening?
Because somebody is having trouble obtaining the money they need -- and they just borrowed it from the lender of last resort.

Libya Revolt Helped Stop Italy Bank Collapse
Ed Conway, economics editor - News.Sky.com
Trade in shares of Italy's largest bank has been suspended - as it emerges that events in Libya have helped prevent a collapse of the Italian banking system.
UniCredit's share price has plunged in the past month because of market fears over eurozone debt - and now share dealing has been halted due to volatility.
Although it may sound far-fetched, the Libyan revolution of the past six months may have saved it and other Italian banks amid the crisis.
The tale of Libya and its Italian bank investment adventure underlines just how far the Gaddafi clan's influence reached in financial markets throughout the world.

Biden Says He 'Didn't Come to Explain a Damn Thing' to China
By Kate Andersen Brower - Bloomberg.com
Vice President Joe Biden said he "didn't come to explain a damn thing" on his visit to China, adding that the country’s economy had become the world’s second biggest due to the stabilizing presence of U.S. troops in Asia.
Some media had suggested the purpose of his trip to China was to "explain our economic situation," Biden told U.S. troops at Yokota airbase in Japan today. "I didn't come to explain a damn thing."
Biden, 68, spent four days traveling in China with counterpartXi Jinping, who is the frontrunner to succeed PresidentHu Jintao in 2013. The vice president said he made the visit to the biggest foreign holder of U.S. debt to build a relationship with Xi and wanted to make clear that the U.S. economy is strong and that the nation is still a Pacific power.

3, 2, 1: Global Debt Meltdown
TheEconomicCollapseBlog.com
We are steamrolling toward a massive global debt meltdown, and at this point world leaders seem to be all out of solutions. Over the last 30 years or so, the greatest debt bubble in the history of the planet has produced unprecedented prosperity in the western world. But now that debt bubble is starting to burst and the bills are coming due. Many believe that "ground zero" for the coming global debt meltdown will be in Europe. Unlike the U.S. and Japan, the nations of the EU can't just print more money to cover their debts. Nations such as Greece, Portugal and Italy must repay their debts in euros, and those nations are rapidly getting to the point where their debts are going to overwhelm them. Unfortunately, major banks all over Europe are very highly leveraged and are also very heavily invested in the sovereign debt of nations such as Greece, Portugal and Italy. If even one EU nation defaults it will start tipping over financial dominoes. If more than one EU nation defaults it could cause a cataclysmic wave of bank failures all over Europe.

Gerald Celente on Jeff Rense 22 August 2011

CBO: Federal deficit will hit $1.3 trillion
Red ink overwhelms Congress' efforts
By Stephen Dinan-The Washington Times
The government will run another $1.3 trillion deficit in fiscal year 2011,Congress‘ chief scorekeeper said Wednesday — easily eclipsing the $917 billion in savings over the next decade lawmakers scratched out earlier this month in their debt deal, and underscoring the deep challenge they face going forward.
It marks the third-largest shortfall in history, and the third straight $1 trillion deficit under President Obama, though next year's deficit is projected to dip just under that mark according to the Congressional Budget Office.
Over the next decade, the federal government will rack up nearly $6 trillion in new deficits, the CBO said — far outstripping the $1.5 trillion in future savings the new deficit super committee is charged with recommending to Congress.

Dollar Advances Amid Speculation
Before Bernanke Speech; N.Z. Dollar Drops
By Catarina Saraiva - Bloomberg.com
The dollar gained versus 15 of its 16 most-traded peers amid speculation about whether Federal Reserve Chairman Ben S. Bernanke will say this week the central bank is willing to provide more stimulus for the economy.
Currencies of higher-yielding countries including New Zealand and South Africa weakened. Treasuries fell amid bets Bernanke will say in a speech Aug. 26 in Jackson Hole, Wyoming, that the Fed will take steps to spur growth that may include a third round of debt purchases, or quantitative easing. The yen traded at almost a post-World War II high versus the greenback.

Bank of America shares rally after analyst support
By Dominic Rushe New York - Guardian.co.uk
After a tumultuous day that ended in a slanging match with one of its critics, shares in Bank of America, the US's largest bank, have rallied.
Bank of America has lost more than half its value on the New York stock exchange this year as investors speculated that the bank will have to access the public markets for capital.
On Tuesday, worries about the bank's ability to meet new regulatory rules for capital requirements and its continued exposure to huge home loan losses drove Bank of America shares to lows last seen in 2009 and fanned fears of a new banking crisis.

Bank of America – Watch It Closely!
Published by Ian R. Campbell - StockResearchPortalBlog.com
I thought of calling this commentary ‘The Straw That May Break The Camel’s Back' or even 'The U.S. Markets – Are They Self-Destructing?', but I elected to not fall into the 'Sensationalist Headlines' trap that I frequently criticize.
An article yesterday titled ‘Here’s Why Bank Of America's Stock Is Collapsing Again' – reading time 4 minutes – thinking time much longer – comments on the continuing drop on Monday of the Bank of America common share price, and the views of market observers as to the credibility (or lack thereof) of Bank of America’s underlying (accounting) book equity. Interestingly, later yesterday a second article appeared by the same author on the same subject. Written by the same author, the title of that second article is 'Oh My Goodness: Now Bank Of America Is Blaming Its Collapsing Stock on ME' – reading time 3 minutes.

'Brand America' tarnished by S&P downgrade,
says WPP chief Sir Martin Sorrell
The US does not realise how seriously "brand America" has been tarnished by Standard & Poor's downgrade of its credit rating, marketing veteran Sir Martin Sorrell has claimed.
By Katherine Rushton - Telegraph.co.uk
Sir Martin, chief executive of WPP, the world's biggest advertising group, made the comments as he revealed a 37pc leap in pre-tax profits in the first half, but said growth in the US had been slower than expected at just 2.3pc.
"The downgrade doesn't make Brand America look good. On the one hand, does it matter? If it got downgraded, it got downgraded," he said. "Where it is really important is psychological. I don't think Americans understand how significant a dent [it has put] in its reputation around the world."

As Stocks Gyrate,
Confidence Plummets for Upper Income Americans
By Derek Thompson - TheAtlantic.com
We called it the two-speed recovery. Middle and lower class families have suffered double digit unemployment, little wage growth, zero spending improvements, and rising gas prices. But for people making more than $100,000, this has been a downturn, but hardly a Great Recession. Employment among bachelor's and graduate degree holders has been less than 5% for more than a year. (That doesn't mean this is an easy economy for grads.) The stock market raced ahead of the private sector thanks to strong growth among multinational corporations and a handful of financial companies.

Why Taxing the Rich Is Good for America
By Loren Berlin - DailyFinance.com
Last week, Warren Buffett wrote an incredibleopinion pieceinThe New York Timesasking the federal government to raise taxes on the wealthiest Americans, himself included. "My friends and I have been coddled long enough by a billionaire-friendly Congress," he argued. "It's time for our government to get serious about shared sacrifice."
Buffett's editorial sent economists and politicians into a frenzy as they debated the merits and implications of his request. Underlying the chatter is an important question: Does our country benefit, financially, from taxing our wealthiest citizens?
According toBruce Bartlett, who's held senior policy roles in both Ronald Reagan's and George H. W. Bush's administrations, as well as on the staffs of Reps. Ron Paul and Jack Kemp, "in 2008, those in the top 1 percent of the income distribution, withincomes over $380,000, had an effective tax rate of 23.3 percent. In 1986, a year when the real gross domestic product grew a healthy 3.5 percent, their effective tax rate was 33.1 percent. It has been much lower every year since."

Businesses cool as administration moves to ease regs
By Kara Rowland-The Washington Times
The White House said Tuesday it's going to tweak some 500 regulations it says have unnecessarily tied companies’ hands, but the announcement drew little enthusiasm from a business community that doubts the action will do much to overcome a slew of new health care and financial regulations.
President Obama’s regulatory czar, Cass Sunstein, touted the reforms — which range from an Environmental Protection Agency initiative to allow hazardous-waste generators to report electronically to a consolidation of various tax forms and requirements by the Internal Revenue Service — as an unprecedented effort to cut bureaucratic red tape.

Payless owner to shutter 475 stores, sell itself
By EILEEN AJ CONNELLY - AP - DailyFinance.com
NEW YORK -The parent company of Payless and Stride Rite shoe stores, Collective Brands Inc., said Wednesday that it plans to close 475 stores and has engaged a firm to help it explore its options.
The company posted a second-quarter loss of $35 million Wednesday, including $83.6 million in one-time charges that mainly reflect the declining value of its stores and of Stride Rite's trade name.
The company's shares soared more than 40 percent in after-hours trading after the announcement.
Its board adopted a short-duration shareholder rights plan, a common tool for fending off unsolicited or hostile offers while such a review is under way. The so-called "poison pill" will kick in if any person or group buys more than 15 percent of Collective Brands' outstanding common stock.

Feds want foreclosures sold in bulk to be rentals
by Catherine Reagor, The Arizona Republic - AZCentral.com
The federal government would like to sell some of its huge portfolio of foreclosure homes to investors who will rent them out.
These are houses with loans backed by Fannie Mae, Freddie Mac and the Federal Housing Administration that lenders and investors have foreclosed on and handed back to these federally owned agencies to take the losses on.
Last week, the U.S. Treasury Department and U.S. Department of Housing and Urban Development requested proposals from groups to buy the homes and turn them into rentals. The federal agencies didn't mention a discount for buying the houses in bulk, but most investors will expect one.

How to Fight the Scourge of Long-Term Unemployment
By the Editors - Bloomberg.com
President Barack Obama, as part of his contribution to the various job-creation plans politicians will unveil after Labor Day, is looking at ways to target one of the most intractable legacies of the economic slump: the long- term unemployed.
Long-term joblessness is reaching epic proportions. As of July, about 6.2 million job-seekers, or 4 percent of the U.S. labor force, had been out of work for more than six months -- close to the highest level in more than six decades (see chart).

Steve Jobs Resigns as Apple CEO
By Shira Ovide - WSJ.com
PRESS RELEASE: Letter from Steve Jobs
August 24, 2011–To the Apple Board of Directors and the Apple Community:
I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come.
I hereby resign as CEO of Apple. I would like to serve, if the Board sees fit, as Chairman of the Board, director and Apple employee.
As far as my successor goes, I strongly recommend that we execute our succession plan and name Tim Cook as CEO of Apple.
I believe Apple's brightest and most innovative days are ahead of it. And I look forward to watching and contributing to its success in a new role.
I have made some of the best friends of my life at Apple, and I thank you all for the many years of being able to work alongside you.

Steve Jobs resigns as Apple chief executive
55-year-old Apple co-founder, who has been on medical leave since January, elected chairman as Tim Cook becomes CEO
Agencies - The Guardian
.... Jeffrey Fidacaro of the Susquehanna financial group said: "It's a prudent move to name a successor that is Tim Cook.
"I don't think Wall Street will find that unexpected. It's nice to get a succession plan in place with Steve Jobs still at the helm of the board and guiding Tim Cook."
Trading of Apple shares on Wall Street was halted after-hours following the announcement. In regular trading, Apple had gained 0.7% to close at $376.18.

Jobs Resignation Erases $52B From S&P 500
By Rita Nazareth and Nikolaj Gammeltoft - Bloomberg.com
Steve Jobs decision to step down as Apple Inc. (AAPL)'s chief executive officer erased as much as $52 billion from the benchmark gauge for U.S. stocks, futures trading shows.
The September contract on the Standard & Poor’s 500 Index slumped up to 0.6 percent after Jobs released his statement at 6:34 p.m. in New York yesterday. The measure’s total market value was $9.34 trillion at the close of regular trading at 4 p.m., data compiled by Bloomberg show. Apple fell 5.1 percent.
Jobs, 56, who has battled cancer and had a liver transplant, presided over a 9,020 percent surge in the stock since July 29, 1997, the day before the San Francisco Chronicle broke the news that he would be named interim CEO. Over the same period, the shares grew in value to $348.7 billion from $2.08 billion. Apple briefly surpassed Exxon Mobil Corp. this month as the world’s most valuable company. Chief Operating Officer Tim Cook, 50, succeeded Jobs.

IBM's Watson Has a New Brother With a Bigger Brain
By Dawn Kawamoto - DailyFinance.com
Jeopardy! champs Brad Rutter and Ken Jennings went against IBM's supercomputer Watson and got whomped. But at least that experience didn't put them out of a job.
Consumers may not be as lucky as Big Blue delves deeper into artificial intelligence with a new generation of computer chips.
Meet Watson's New Sibling
IBM's Watson demonstrated the ability to understand questions asked in natural language and quickly respond after trolling through reams of data in its system. Watson's new cognitive chip brother -- code-named TrueNorth -- is designed to mimic some of the human brain's functions like perception, action, and cognition.

Obama and the Smartphone Wars
Unless the president intervenes, the International Trade Commission could send the wireless industry into a tailspin.
By HOLMAN W. JENKINS, JR. - WSJ.com
Patent litigation is a game created by government, and constructively so. But the game appears to be getting out of whack in the smartphone patent wars.
Patents encourage innovation by protecting inventors to profit from innovation. Yet a steady thrum of patent litigation is also a healthy sign — it shows that violators are not being overly deterred from developing useful goods and services that, ahem, owe something to prior art.
But getting the balance right is not always easy. In the smartphone wars, a nearly unprecedented intervention by President Obama is being called for. But we'll get to that.
Though the smartphone legal wars have lately assumed a flavor of everybody vs. everybody, including Apple, Google, Microsoft and RIM, as well as handset makers Motorola, HTC and Samsung—and even Oracle, owner of the Java software language — it helps to keep the focus on Apple vs. Google.

Obama voters are well-represented
on debt reduction '‘supercommittee'
By Aaron Blake - WashingtonPost.com
Nine of the 12 members of the so-called debt reduction "supercommittee" represent districts or states that went for President Obama in 2008 – a reflection of the political concerns that will be paramount when lawmakers meet in the coming weeks.
None of the 12 members have immediate concerns about their political futures in the 2012 election – at least right now – but a few of them have reason to be watching their backs as they advance with what is likely to be a tortuous and tricky political process.
Here's a primer on what the panel's members need to be watching:
* Four of the six Republicans, and five Democrats, on the supercommittee represent districts or states that Obama won in 2008. But thus far, none of the committee's Republicans faces imminent general election trouble in 2012 or 2014.

The Grand Illusion: It's Coming Right on Schedule
By Paul Greenberg - PatriotPost.us
Charles Mackay published his classic study "Extraordinary Popular Delusions and the Madness of Crowds" in 1841, but it remains regularly relevant to the affairs of man.
No wonder. For its author's purpose was "to collect the most remarkable instances of those moral epidemics which have been excited, sometimes by one cause and sometimes by another, and to show how easily the masses have been led astray, and how imitative and gregarious men are, even in their infatuations." How little has changed.
Back in 1841, it might have been assumed that such manias arose randomly, in keeping with the rising and falling tides of men's passions. But thanks to the genius of American politics, this country has found a way to schedule extraordinary popular delusions and mass manias exactly once every four years, regular as the calendar, predictable as an eclipse. In this case, an eclipse of reason. These quadrennial fits are known as presidential elections.

Is The Number Of Earthquakes Increasing?
Why The 5.8 Virginia Earthquake Might Just Be
A Preview Of Things To Come
EndOfTheAmericanDream.com
Is the number of earthquakes increasing? Are major earthquakes becoming more frequent? In the aftermath of the magnitude-5.8 earthquake in Virginia, a whole lot of people are asking those questions. All over the mainstream media, "experts" are coming on and assuring the public that all of this is "normal" and that the number of earthquakes is not actually increasing. The USGS continues to insist that the frequency of major earthquakes has been "fairly constant" and that there is no reason for alarm. But is that really the truth? In this article, you will be presented with evidence that the number of earthquakes is definitely increasing. Please approach the evidence with an open mind. The truth is that this year we are on pace to have more than twice the number of major earthquakes than we did just 10 years ago. The mainstream media is much more interested in keeping people calm than it is in telling them the truth. Our planet is becoming increasingly unstable, and the magnitude-5.8 Virginia earthquake that we just witnessed might just be a preview of things to come.

Glenn Beck tells Jerusalem: 'Evil is growing. Darkness is falling'
Former Fox News presenter greeted with protests and empty seats as he takes his message to the Temple Mount
By Harriet Sherwood in Jerusalem - Guardian.co.uk
The temperature may have dropped a little in Jerusalem on Wednesday night, but it was more than compensated for by the heat produced byGlenn Beck as he brought his "Restoring Courage" rally to the Old City.
The former Fox News presenter and devout Mormon stood at a podium beneath the gunmetal grey of the dome of the al-Aqsa mosque to direct a tirade of invective at governments, human rights organisations, the United Nations, Europe and Arab states – and sometimes just "them", whoever they are.

Rebels Set Gadhafi Bounty; Tripoli Fighting Goes On
Journalists Freed from Capital Hotel
By SAM DAGHER And RICHARD BOUDREAUX - WSJ.com
BENGHAZI, Libya—With fresh gunfire erupting in and around Tripoli on Wednesday, Libya's rebel leadership acknowledged that the battle to control the North African country is far from over, and offered a financial reward of more than $1 million for anyone who captures Col. Moammar Gadhafi.
A day after rebels celebrated their capture of Col. Gadhafi's sprawling Bab al-Aziziya government compound in the capital, pro-regime snipers launched attacks around Tripoli. Intense clashes erupted in the working-class Abu Salim neighborhood next to the Bab al-Aziziya compound, with Gadhafi loyalists firing shells and assault rifles at the fighters, the Associated Press reported. Abu Salim, home to a notorious prison, is thought to be one of the last remaining regime strongholds within the capital.

Media Openly Admits Foreign Special Forces
Behind Overthrow of Gaddafi
Kurt Nimmo - Infowars.com
Now that NATO is within reach of overthrowing Gaddafi, the corporate media is rife with reports that al-Qaeda, tribal warlords, and disenfranchised former Gaddafi bureaucrats had plenty of help from the U.S., Britain, and NATO in the "Arab Spring" operation to install a government amenable to the globalists.
"Special forces troops from Britain, France, Jordan and Qatar on the ground in Libya have stepped up operations in Tripoli and other cities in recent days to help rebel forces as they conducted their final advance on the Gaddafi regime," a NATO official told CNN today.
British forces, in particular, have assisted rebel units by "helping them get better organized to conduct operations," the official said. Some of these forces from all the countries have traveled with rebel units from towns across Libya as they advanced on Tripoli.

Defiant Gaddafi vows to keep fighting; journalists freed
By Thomas Erdbrink and Liz Sly - WashingtonPost.com
TRIPOLI — A defiant Moammar Gaddafi vowed to keep fighting Wednesday, hours after his fortified compound was overrun by rebel fighters, and journalists were freed from a luxury hotel where they had been effectively held captive by Gaddafi loyalists since the weekend.
Gaddafi's whereabouts were unknown, and loyalist forces continued to put up resistance in scattered areas around the capital. Heavy gunfire was reported Wednesday morning in the vicinity of the Rixos hotel, where more than three dozen Western journalists were trapped by Gaddafi supporters, and battles were reported in the vicinity of the airport.

Pentagon report: China closer to matching modern militaries
By Bill Gertz - The Washington Times
China made impressive gains last year in its military buildup that pushed the Communist Party-controlled People's Liberation Army closer to matching modern militaries, according to the Pentagon's annual report to Congress made public Wednesday.
"Militarily, China’s sustained modernization program is paying visible dividends," the report says. "During 2010, China made strides toward fielding an operational anti-ship ballistic missile, continued work on its aircraft carrier program, and finalized the prototype of its first stealth aircraft."

North Carolina county orders visitors out as hurricane advances
By Connie Stewart - LATimes.com
North Carolina's Dare County ordered all visitors to leave as of 8 a.m. Thursday to get out of the way of Hurricane Irene.
Evacuation was mandatory for all nonresidents, county officials said in a statement, and residents should prepare for a monster storm. The county includes the vulnerable Outer Banks, where Irene could make landfall.
"Although the mandatory evacuation order is for all Dare County visitors, residents are advised to take proper precautions and make general storm preparations," the statement said.

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Wednesday 08.24.2011

Greenspan says gold is money; not in a bubble
Greenspan Says Euro 'Breaking Down'
By Joshua Zumbrun - Bloomberg.com
Former Federal Reserve Chairman Alan Greenspan said fissures inEurope's common currency may lead to slowing in the U.S. economy.
"The euro is breaking down and the process of its breaking down is creating very considerable difficulties in the European banking system," Greenspan said today in Washington.
Emergency steps such as unlimited loans from the European Central Bank are keeping many banks in Greece, Portugal, Italy and Spainsolvent and easing lending by other Europe institutions. Greenspan said a contraction in Europe would hurt profitability and stock values of American companies since Europe is the target market for about 20 percent of U.S. exports and about 20 percent of foreign-affiliate earnings.

Ben Bernanke unlikely to announce big new plans at Jackson Hole
By Neil Irwin - WashingtonPost.com
This time a year ago, Federal Reserve Chairman Ben S. Bernanke headed to an annual gathering of central bankers in Jackson Hole, Wyo., amid a faltering U.S. economy, a perilous global situation, and rising calls on Wall Street for the Fed to do something to address both.
Here we go again.
Bernanke is to deliver a speech Friday morning in the same ballroom in the shadow of the Grand Teton mountains where last year he gave a speech that laid the groundwork for a $600 billion program of bond purchases aimed at lifting the economy. The financial world is obsessing over the possibility of another go-round. The thought that Bernanke may offer hints of new steps to boost growth contributed to big gains on Wall Street Tuesday, with the Standard & Poor’s 500-stock index up 3.4 percent.

Get ready for a Jackson Hole surprise
By John Nyaradi - MarketWatch.com
BEND, Ore. — After recent tough going in global markets and a raft of dismal economic reports, investors and institutions around the world are looking to the Tetons for Fed Chairman Ben Bernanke and the cavalry to ride to the rescue yet again.
Who can forget last August when global stock markets were in a funk and Bernanke, speaking at the annual symposium in Jackson Hole, Wyo., laid the groundwork for what was to become known as "QE2"?, or the second round of quantitative easing.
Shortly thereafter, the U.S. markets took off as the Fed embarked on a $600 billion bond-buying program that propelled the major indexes higher all year until its conclusion earlier this summer.

Keiser Report: Bankers & Aliens (E175)

Goldman Sachs sued by Allstate over 'Junk' Securities
By Christi Roberts - AnnuityNewsJournal.com
August 20, 2011. New York. Earlier this week, Allstate Insurance Co. filed suit against Goldman Sachs Group Inc. over mortgage-backed securities that the insurer called, "junk" and "lemons". In the New York State court filing, the suit asks for damages covering over $100 million in investments, as well as lost market value, principal and interest.
While $100 million is a large sum, it pales in comparison to similar lawsuits filed against other investment banks over similar investments. The Northbrook, Illinois based insurer has already sued JP Morgan Chase regarding $700 million in mortgage-backed securities, Credit Suisse Group for more than $230 million, Bank of America's Merrill Lynch for $167 million, Citigroup for over $200 million and Deutsche Bank for $185 million.

JP Morgan May Take Over Bank Of America
24/7 WallStreet
There is a rumor circulated on Wall St. that JP Morgan (NYSE: JPM) will take over Bank of America (NYSE: BAC) within the week. The government will support the deal with a $100 billion investment in preferred shares issued by the combined entity. Alternatively, the government may guarantee the value of a large pool of Bank of America assets. The word is that Treasury Secretary Geithner has discussed the transaction with JP Morgan CEO Jamie Dimon.The “merger” would completely destroy the value of BAC’s common shares.
The government feels that the deal may be necessary as Bank of America struggles unsuccessfully to close several transactions to bolster its balance sheet. The Wall Street Journal reported that Business Insider speculated that the financial firm will need to raise $200 billion which would be another possible event that would wipe out common shareholders.

Cost of insuring Bank of America for default hits record
Puget Sound Business Journal -
by Mark Calvey , San Francisco Business Times
The cost of insuring against Bank of America defaulting over the next five years hit a record Tuesday.
That means Wall Street is more nervous today about the prospects of Bank of America defaulting than it was during the darkest days of the 2008 financial crisis. That's when California’s largest bank borrowed $91.4 billion from the Federal Reserve to weather the storm, according toBloomberg News reporting this week, based on Freedom of Information Act requests.

Moody's Said to Be in Final Talks on Cutting Japan Banks' Credit Ratings
By Takahiko Hyuga - Bloomberg.com
Moody’s Investors Service is in final discussions on whether to downgrade Japan’s biggest banks after lowering the country's sovereign debt rating today, a person with direct knowledge of the matter said.
Bank units of Mitsubishi UFJ Financial Group Inc. (8306), Sumitomo Mitsui Financial Group Inc. (8316) and Mizuho Financial Group Inc. (8411) are among lenders being examined for a possible rating cut, said the person, who asked not to be identified before a decision.

Treasuries Fluctuate Before $35 Billion Two-Year Note Sale,
More Auctions
By Susanne Walker and Lucy Meakin - Bloomberg.com
Treasuries fluctuated before an auction of $35 billion of two-year securities, the first of three note sales this week totaling $99 billion.
The two-year debt to be sold today was headed for a record low auction yield. Treasuries fell earlier on speculation Federal Reserve will signal steps to bolster economic growth. Fed Chairman Ben S. Bernanke may discuss the central bank’s holdings of $1.6 trillion of Treasuries when he speaks Aug. 26 at a conference in Jackson Hole, Wyoming.
"The market is beginning to focus on financial stocks and the banking system overall," said Charles Comiskey, head of Treasury trading at Bank of Nova Scotia in New York. "There's just general nervousness. Trading is thin. People have moved to the sidelines. There’s a general nervousness out there. You can feel it in the prices."

Marc Faber Explains Where Gold is Headed (August 19, 2011)

All US Mint Numismatic Gold Coins Suspended
Posted by Mint News Blog - August 22, 2011
This morning the US Mint has suspended sales of all remaining numismatic gold coin offerings. The move comes as the market price of gold has jump another $35 to nearly $1,890 per ounce. Prior to the suspension, products were priced based on an average gold price in the $1,750 to $1,799.99 range.
The US Mint's pricing policy covering most numismatic gold coins allows for price changes to take place as frequently as weekly based on the average market price of gold based on the London Fix prices from the previous Thursday AM to the current Wednesday AM.

All US Mint Numismatic Gold Coins Suspended
Posted by Mint News Blog - August 22, 2011
This morning the US Mint has suspended sales of all remaining numismatic gold coin offerings. The move comes as the market price of gold has jump another $35 to nearly $1,890 per ounce. Prior to the suspension, products were priced based on an average gold price in the $1,750 to $1,799.99 range.
The US Mint's pricing policy covering most numismatic gold coins allows for price changes to take place as frequently as weekly based on the average market price of gold based on the London Fix prices from the previous Thursday AM to the current Wednesday AM.

Gold Daily and Silver Weekly Charts -
Bear Raid Ahead of Comex Option Expiration
JESSE'S CAFÉ AMÉRICAIN
Gold was lifted into the oxygen depletion zone above $1,900 overnight, and as predicted, the bear raids were launched today in force, together with nonsensical commentary from the financial demimonde.
"...the market in physical gold is tiny, and largely comprised of nutcases."
No wonder the Anglo-American financial cartel is in such decline. Blind is the arrogance of faded empire, when it can no longer succeed by telling their client states what to do.
And of course the television spokesmodels were able to cite the overnight peak and say, "Wow, strap on my seatbelt. Gold is down $60!" Better rush into the rock solid safety of equities. Here are a very nice selection of stocks for you, at recently marked down prices.
Yes, they really are that obvious.

JIM ROGERS INTERVIEW 21 AUG 2011

'Euro Bonds Would Destroy the Euro'
Many in Europe would like to see the introduction of euro bonds to help indebted euro-zone member states borrow money on international markets. Germany, however, has refused. SPIEGEL listens in as two top German economists debate the issue.
Spiegel.de
SPIEGEL: Hans-Werner Sinn, Henrik Enderlein, do we need shared sovereign bonds,so-called "euro bonds ," to end the financial crisis?
Enderlein: By all means. Correctly construed, euro bonds are the best instrument for preventing the collapse of the euro zone .
Sinn: The opposite is true: Euro bonds would destroy the euro zone. If all countries -- regardless of their creditworthiness -- were to pay the same interest rate, the last impediments to excessive state indebtedness would fall away.

China's New Currency Policy
Martin Feldstein - Project-Syndicate.org
CAMBRIDGE – China’s government may be about to let the renminbi-dollar exchange rate rise more rapidly in the coming months than it did during the past year. The exchange rate was actually frozen during the financial crisis, but has been allowed to increase since the summer of 2010. In the past 12 months, the renminbi strengthened by 6% against the dollar, its reference currency.
A more rapid increase of the renminbi-dollar exchange rate would shrink China’s exports and increase its imports. It would also allow other Asian countries to let their currencies rise or expand their exports at the expense of Chinese producers. That might please China’s neighbors, but it would not appeal to Chinese producers. Why, then, might the Chinese authorities deliberately allow the renminbi to rise more rapidly?

Something More Dangerous Than Debt Is Crushing America
The deadly deficit in economic education
BY ROBERT MORLEY - theTrumpet.com
Over the weekend I heard a radio program discussing what should be done to fix the economy. It proved that America cannot be fixed before it collapses.
The interviewer asked random individuals what they thought the government should do to fix the economy. Every single person was of the opinion that the government needed to stimulate the economy with more spending. More frustratingly, many people said that consumers in general needed to be more patriotic and spend a greater portion of their paycheck to help the economy recover.

It's the household debt, stupid
By Ezra Klein - WashingtonPost.com
Ken Rogoff wants to call our economic malaise "the Great Contraction." Richard Posner wants us to at least call it "a depression." I tend to dismiss arguments over semantics, but in this case, I agree. If it were up to me, we would call what we’re in a "household-debt crisis," or something more elegant that gets the same idea across, as that would at least help us think more clearly about what we need to do to get out.
If you take the Rogoff/Reinhart thesis seriously -- and people should, and increasingly are -- what distinguishes crises like this one from typical recessions is household debt. When the financial markets collapsed, household debt was nearly 100 percent of GDP. It’s now down to 90 percent. In 1982, which was the last time we had a big recession, the household-debt-to-GDP ratio was about 45 percent.

14 Conspiracy Theories
That The Media Now Admits Are Conspiracy Facts
EndOfTheAmericanDream.com
How many times have you heard the mainstream media dismiss certain points of view as "conspiracy theories"? It seems as though one of the easiest ways to brush something off is to label it as something that only "conspiracy theorists" would believe. Well, you know what? A whole lot of the time the "conspiracy theorists" are right and the mainstream media is wrong. In fact, we owe a great debt to "conspiracy theorists" because they will go places and investigate things that the mainstream media would never even touch. The reality is that the mainstream media only tells us what the government and the big corporations want us to hear, and much of the time it is those in the alternative media that are left with the task of trying to figure out what the real truth is. So don't look down on conspiracy theories or conspiracy theorists. In a world where almost everything we are told is a lie, the truth can be very difficult to find.
The following are 14 conspiracy theories that the media now admits are conspiracy facts....

Boomer Retirement: Headwinds for U.S. Equity Markets?
By Zheng Liu and Mark M. Spiegel
frbsf.org - Federal Reserve Bank of San Francisco
Historical data indicate a strong relationship between the age distribution of the U.S. population and stock market performance. A key demographic trend is the aging of the baby boom generation. As they reach retirement age, they are likely to shift from buying stocks to selling their equity holdings to finance retirement. Statistical models suggest that this shift could be a factor holding down equity valuations over the next two decades.
The baby boom generation born between 1946 and 1964 has had a large impact on the U.S. economy and will continue to do so as baby boomers gradually phase from work into retirement over the next two decades. To finance retirement, they are likely to sell off acquired assets, especially risky equities. A looming concern is that this massive sell-off might depress equity values.

Big government gone wild:
Social Security on the verge of insolvency
by: J. D. Heyes - NaturalNews.com
(NaturalNews) Do you remember the recent debate in Congress and the White House to raise the government's ability to borrow even more money? The "debate" that was long on raising the debt ceilingbut short on actually cutting government spending?
It wasn't enough that our leaders failure to effect long term, meaningful budget reformresulted in a leading credit rating agency downgrading U.S. creditfor the first time in our history, but now the budgetary chickens are really coming home to roost.

What Distinguishes the Rich from the Poor Today, Part I
By Gonzalo Lira
One of my brothers-in-law, C., is moving from Chile to America to take over a fairly large corporation. He is a highly educated, highly successful guy in his late-thirties—a big strapping guy of about 6’3”, a former rugby player, big on golf, with four small kids and a tall willowy wife who looks like a model.
Though he’s been to the United States many times, for business and pleasure, he’s never actuallylived there. So over a Sunday lunch, we talked about his first impressions about daily life in America—and what struck him was the food:
"It has no taste," C. told me. "Or rather, supermarket food has no taste: Beef, fish, chicken—it all tastes bland and watery."

Americans Now Feel Even More Financially Insecure
By Sheryl Nance-Nash - DailyFinance.com
Are we a nation of nervous Nellies? Right now, if the topic is money, the answer is likely yes.
According to Bankrate.com's latestFinancial Security Index, taken Aug. 4 through Aug. 7, during a hellish week when the U.S. credit rating fell and stock markets swung wildly, consumers' feelings about their savings, net worth, job security and overall financial security reached a new level of despair for 2011, with the index hitting a low of 92.3, down from 95.6 the month before. On the scale, 100 signifies that consumers feel the same level of financial security as they did 12 months earlier.

The Post Goes Into Overdrive
In Its Social Security Scare Campaign
CEPR.net
Showing once again why it is known as "Fox on 15th Street," the Washington Post headlined an article "Social Security crisis is worsening." The subhead told readers, "rise in disability applications driving it to the verge of insolvency."
Those who read the article carefully will discover that the "it" being driven to insolvency is the Social Security disability program, which is a bit more than one-tenth of the combined retirement, survivors and disability program that people usually think of as "Social Security." The latest projections from the Congressional Budget Office show that the combined program will be fully solvent until 2038.

5 Demands Middle Class Voters Should Have for Politicians in 2012
By Catherine New - DailyFinance.com
Americans are caught in a vice: On one side, falling wages, on the other, rising costs. In between, themiddle class is getting squeezed painfully-- perhaps ruinously. Despite rhetoric on both sides of the political fence, the future of the middle-income economic sector, defined loosely as households earning between $40,000 and $95,000, is sliding downhill. Jobs, as so many AOLDailyFinancereaders point out every day, are at the heart of it. One telling statistic: In 1980, 52% of jobs were middle income. By 2010, thefigure had dropped to 42%, according to a report from the New America Foundation.
This troubles Robert S. Kaplan, author of the new business leadership bookWhat to Ask the Person in the Mirror. "[The middle class] is the engine of a country's prosperity. Show me an economy with an eroding middle class and you will see broader socioeconomic problems," he says. "Show me a growing middle class, and you will have growth and a healthier country."

Wake Up America!
10 Very Obvious Reasons Why The Devastating U.S. Jobs Famine
Is Going To Suck The Hope Right Out Of America
TheEconomicCollapseBlog.com
Do you have friends, neighbors and relatives that can't find work? Well, unfortunately the current U.S. jobs famine is about to get a whole lot worse. Right now there are approximately 13.9 million unemployed Americans. That does not count those that "are not looking for work". That does not count those that are working part-time jobs but that are desperate for full-time work. The truth is that we need tens of millions more full-time jobs in order to give one to everyone that wants one. Sadly, the long-term trends that have caused this mess continue to get worse. Unless truly dramatic changes are made, the U.S. economy is going to continue to bleed jobs and that is going to suck the hope right out of this country. It is time to wake up America! It is not a big mystery why we don't have enough jobs. But sadly, very few of our leaders are talking about the real issues.

The Wholesome Conservative Message: Integrity
By John Longenecker - PatriotPost.us
Safer streets is a reflection of a healthier self-rule, but we won't get there without a wholesome conservative message from candidates. It means a well-rounded message, and well-rounded means addressing not constituents and trying to reach their culture, but enunciating well-rounded values and reaching all of America as one culture: the Independence culture looking for smaller government. This is 80% of the electorate.
This gives the conservatives a distinct advantage over the liberals who rely on emotional promises to several cultures, almost each one differently. The Republicans could prevail if only they will clarify the platform as it relates to all homes, and they haven not been doing that. Somehow, the Republicans see the armed citizen as uncouth and unseemly. Yet, many of them are themselves armed. This incongruity hurts the platform.

GOP: No tax hikes -- except for the poor
The new Republican line:
Workers should pay more, while the rich pay less
BY ANDREW LEONARD - Salon.com
How does the Republican Party continue to win elections? The Associated Press is reporting that GOP legislators are opposing the extension of a payroll tax cut that will expire on Jan. 1. The clear, unavoidable message: Americans workers should pay more taxes, while the rich should pay less.
That's not a joke, and it's not an Onion headline. The very same Republicans who have fought tooth-and-nail to keep George W. Bush's tax cuts for the wealthy from expiring are now in favor of doing away with a tax cut that will primarily hit wage-earners -- people who actually have to work for a living, people who are struggling to pay their mortgages and wincing every time they fill up their gas tank.
There's not even any attempt to hide the hypocrisy.

2 Earthquakes today - Colorado and Virginia

USGS: Colorado experiences largest quake in more than 40 years
From Scott Thompson, CNN
(CNN) -- A moderate 5.3-magnitude earthquake that rattled southern Colorado early Tuesday morning was the largest to hit the state in more than 40 years, the U.S. Geological Survey said.
The quake's epicenter was seven miles southwest of Cokedale, and 180 miles south of Denver. There were no immediate reports of casualties.
A dispatcher at the sheriff's office in Las Animas County, which includes Cokedale, said the quake lasted almost 30 seconds. The office received reports of rocks falling on a highway and of some structure damage.
It was the largest in a series of earthquakes that struck the area. As of 5 a.m. local time (7 a.m. ET), the USGS reported seven quakes centered just south of Cokedale since midnight.

5.9 EARTHQUAKE RATTLES THE EAST COAST
A magnitude 5.9 earthquake shook the East Coast on Tuesday afternoon. The epicenter was in Virginia but shaking was felt as far away as New York, Ohio and the Carolinas.
In the first hours after the quake there were no reports of deaths or major destruction. The Washington National Cathedral in the District of Columbialost at least three of the four pinnacles on the central tower, a cathedral spokesman said, referring to the tips of the spires. The central tower appeared to be leaning, the spokesman said.
A nuclear power plant near Washington, D.C., shut down, and plants as far away as Michigan reported "unusual events," the lowest of four emergency situations, federal authorities said.

Webster Tarpley: 5.8 Quake Hits Washington D.C. Area

U.S. Quake Shakes Buildings From D.C. to Boston
By Esmé E. Deprez - Bloomberg.com
A 5.8 magnitude earthquake, the biggest to strike Virginia in more than a century, hit about 40 miles (65 kilometers) northwest of Richmond, rocking buildings from Washington to Boston and causing office workers in New York City to rush into the street.
The quake struck at 1:51 p.m. local time today, the U.S. Geological Survey said on its website, and vibrations were felt as far west as Columbus, Ohio, and as far north as Toronto. The temblor, which was 3.7 miles deep, was the strongest to hit the Virginia area since 1897, according to USGS data. There were no immediate reports of major damage, the Federal Emergency Management Agency said.

Irene Expected to Become Major Hurricane,
Threatening Bahamas, U.S. Coast
By Brian K. Sullivan - Bloomberg.com
Hurricane Irene grew into a Category 2 storm that is forecast to strengthen as it moves toward the Bahamas and possibly the Carolinas and U.S. Northeast.
Irene’s maximum sustained winds were 100 miles (160 kilometers) per hour, up from 80 mph yesterday. It may become a major hurricane later today or early tomorrow, according to a National Hurricane Centeradvisory at 8 a.m. New York time. The storm is 70 miles south-southeast of Grand Turk Island in the Caribbean.
"I don't see any roadblocks to intensification over the next four or five days," said Jeff Masters, co-founder of Weather Underground Inc. in Ann Arbor, Michigan. "The ocean temperatures are 1 to 1.5 degrees warmer than average this year. Climatologically, conditions are conducive for strong hurricanes tracking far to the north this year."

Exposed: MI6 spies paved rebel path to Tripoli battlefront

Gadhafi's Compound Falls
Rebels Storm Fortified Headquarters,
But Strongman Nowhere to Be Found
By CHARLES LEVINSON - WSJ.com
TRIPOLI, Libya—Triumphant rebel fighters and thousands of ordinary Libyans stormed Col. Moammar Gadhafi's fortress compound here Tuesday after a daylong battle, but the elusive strongman was nowhere to be found.
Antiregime troops waged fierce battles at the gates of Bab al-Aziziya, Col. Gadhafi's longtime home and headquarters. When rebels breached one of its gates in the late afternoon, Tripoli residents joined in to cheer and embrace.
With celebratory gunfire giving way to a pandemonium of looting, rebels and residents made off with weapons, flat-screen television sets and souvenirs from the rule of their leader of four decades. One man waved an ivory staff capped with an engraved elephant head. Another made his way across the compound's sweeping lawns, wheeling a gold-plated cocktail trolley.

LIBYA: Kadafi addresses nation
By Molly Hennessy-Fiske - LATimes.com
After disappearing in recent days as the Libyan capital was besieged by rebel forces, Moammar Kadafi resurfaced late Tuesday delivering an address on Al Orouba TV, according to Reuters.
Kadafi's speech aired on a Tripoli radio station and was broadcast by Al Orouba in conjunction with Al Rai TV, Reuters and Al Jazeera reported.
In the address, Kadafi vowed "martyrdom" or victory in the fight against "aggression."
He also said that his Bab Azizia compound in Tripoli had been leveled by 64 NATO airstrikes and that his withdrawal from the compound was a tactical move.

LIBYA: Scud missile attacks on Misurata
By Molly Hennessy-Fiske - LATimes.com
Several Scud missiles were fired at the Libyan rebel stronghold of Misurata late Tuesday by forces supporting Moammar Kadafi in his hometown of Surt, the Misurata military council's media center said in a statement picked up by Al Jazeera.
Residents in Misurata, a central coastal town, reported hearing loud explosions Tuesday night.
According to the Feb 17 Voices Twitter feed about an hour ago, "Residents of Misurata heard a 'big explosion' but report no damage to Misurata from Scud."
"Residents of the city say they believe the explosion was a Scud missile downed over water en route to Misurata," according to the Twitter feed.

Victory in Tripoli: They Did it [?...]
By William Pfaff - Truthdig.com
The most significant and easily disregarded lesson of the successful Libyan uprising, as of the Egyptian and Tunisian risings that preceded it, is that the Arabs did it themselves. That is bad news for the United States.
The issue of "R2P," so-called, has been current in American and European policy circles since the wars of Yugoslav succession found their genocidal climax in the killings at Srebrenica. Out of that came the proposition that democratic nations should accept the burden of a "responsibility to protect" vulnerable and endangered peoples, and even those being egregiously misgoverned. It assumed that Arab liberation comes from outside, not inside. It hasn’t happened that way.

Iranians: Time ripe for 'Great Satan' to be removed
Military leader says crises will bring America to its knees
By Reza Kahlili © 2011 WND
The decline and fall of the American empire is unfolding and will usher in a new world order that doesn't include the United States, Iran now believes.
With the fiasco in Congress over the debt crisis and the financial and economic turmoil plaguing America, the time is ripe for the "Great Satan" to be displaced, according to the Iranian website Gerdab.ir, which is run by the Revolutionary Guards.
"While the U.S. is entering into a catastrophic financial and economic phase," says Brig. Gen. Masoud Jazayeri in a speech to the Guards' ground forces, "Iran can, with a serious offensive, emerge economically and financially."

Israeli-Arab Crisis Approaching
By George Friedman - Stratfor.com
In September, the U.N. General Assembly will vote on whether to recognize Palestine as an independent and sovereign state with full rights in the United Nations. In many ways, this would appear to be a reasonable and logical step. Whatever the Palestinians once were, they are clearly a nation in the simplest and most important sense — namely, they think of themselves as a nation. Nations are created by historical circumstances, and those circumstances have given rise to a Palestinian nation. Under the principle of the United Nations and the theory of the right to national self-determination, which is the moral foundation of the modern theory of nationalism, a nation has a right to a state, and that state has a place in the family of nations. In this sense, the U.N. vote will be unexceptional.

Syrian activists form a 'national council'
By the CNN Wire Staff
(CNN) -- Syrian dissidents have formed a national council to lead the opposition to Bashar al-Assad's regime, opposition members meeting in Istanbul, Turkey, said Tuesday.
This appears to be one of several opposition movements and parties claiming to represent the Syrian opposition inside and outside Syria. The creation of the council came as Libya's National Transitional Council is primed to take the reins of power from the Moammar Gadhafi regime.
"I want the Syrian regime to take note of what happened in Libya," said Syrian National Council member Louay Safi.

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Tuesday 08.23.2011

Gold Goes Off Charts
as Gartman Sees Prices for Metal Heading 'Parabolic'
By Nicholas Larkin - Bloomberg.com
Gold's rally to a record above $1,900 an ounce has pushed the metal to overbought levels according to technical analysis tools, as economist Dennis Gartman said prices will go "parabolic."
Bullion's relative strength index has topped 70 since Aug. 5, a signal to some investors who study technical charts that prices may be set to decline. Gold hugged its upper Bollinger band most of this month, which may signal possible resistance, while a moving average convergence/divergence indicator and Elliot Wave patterns suggest prices are overextended, said Ross Norman, chief executive officer of London bullion brokerage Sharps Pixley Ltd.

Bank of America Tanks; Gold Goes Parabolic
No Telling Where It Stops
By Mike Shedlock
I am somewhat amused by the lack of commentary on the latest advance in gold. Did people sell, waiting for a correction that did not come? I do not know the answer to that, but I can see that financials have been clobbered, led by Bank of America, while gold has soared. These events are not unrelated.

Venezuela Requests Gold Holdings Held by BOE, Merentes Says
By Jose Orozco - Bloomberg.com
Venezuela's central bank has requested its 99 tons of gold holdings from the Bank of England, according to a bank statement sent by e-mail, citing the institution’s president Nelson Merentes.
"We've contacted the Bank of England and the corresponding protocols have been initiated to complete this operation as soon as possible," Merentes said, according to the statement. "Once that's done, the shipments will begin by sea."
Chavez ordered the central bank Aug. 17 to repatriate $11 billion of gold reserves held in developed nations' institutions. Venezuela holds 211 tons of its 365 tons of gold reserves in U.S., European, Canadian and Swiss Banks.

Gold Soars As Trading Reopens, Hits $88 Away from $2000
Submitted by Tyler Durden - ZeroHedge.com
We may have been pessimistic with our assumption that gold would reach $2000 in under a week. At the rate it is going, it may get there tonight: upon reopening, gold immediately soared from just south of $1900, to a new all time higher of $1912 as pent up buying interest took out every offer in the market. This time around silver is not far behind and after many were staunchly pushing shorts around the $44 price, the metal also snapped above the $44 barrier. The only question we have is whether the CME will hike margins before or after gold touches $2000. Since the stop loss orders there are likely quite aggressive, we hope our Comex friends would push gold a little lower before it takes off for its next target 5-digit target. Incidentally, those who are long spam and short gold may want to consider unwinding that trade at this point.

Gold Tops $1,910 for First Time
By Glenys Sim - Bloomberg.com
Gold advanced to an all-time high above $1,910 as investors sought to protect their wealth against financial turmoil amid speculation that the global economy is slowing. Platinum gained to the highest in more than three years.
Bullion for immediate delivery rose as much as 0.8 percent to $1,913.50 an ounce before trading little changed at $1,897.13 an ounce at 9:29 a.m. in Singapore. The metal is up 17 percent in August, heading for its best monthly performance since 1982. Silver gained to the most expensive in more than three months.

Gold tops $1,900 as buyers pile on
By Tom Petruno - LATimes.com
Gold topped another century mark Monday in its summer price surge, rising above $1,900 an ounce for the first time.
The metal traded as high as $1,917.90 in afternoon electronic futures trading. In the regular futures session the near-term contract closed up $39.80, or 2.1%, to a record $1,888.70.
The price has risen for six straight sessions and seven straight weeks. Gold topped $1,800 for the first time last week. The $1,600 mark was crossed in mid-July.
Year to date the metal is up a stunning 33%, from $1,421 at the end of last year.

Gold Daily and Silver Weekly Charts -
La Douleur du Monde - Gold to Lofty Heights
JESSE'S CAFÉ AMÉRICAIN
A wild day in the markets today as stocks came in much higher and then tanked, with the CDS spreads on Bank of America running much higher along with gold and to a lesser extent silver.
Financials pressed the SP 500 lower all day, and Goldman broke hard to the downside into the close as a story on Reuters suggested that Lloyd Blankfein had hired a white collar criminal defense attorney named Reid Weingarten.
On Friday Bernanke will be speaking at Jackson Hole, and the markets are looking for some indication of the latest subsidy to the markets from the Fed. If not a flat out QE3, then perhaps Benny will speak about a program to control the longer end of the yield curve.

Gold tops $1,900, looking 'a bit bubbly'
By Hibah Yousuf - Money.CNN.com
NEW YORK (CNNMoney) -- Gold prices have been on a tear lately, topping a fresh record high above $1,900 an ounce late Monday-- just two weeks after rising above $1,800.
While experts aren't too worried about each new milestones, they are starting to freak out about the rapid speed at which prices are hitting them. Gold started the year just above $1,400 an ounce.
Gold prices rose 2.4% during the regular trading session to settle at $1,891.90 an ounce. In after hours electronic trading, prices topped $1,900 an ounce for the first time.

News Blankfein Hires Prominent Defense Attorney
Send GS Stock Tumbling, Gold Futures Soaring Over $1900
Submitted by Tyler Durden - ZeroHedge.com
For a perfect ending to a schizophrenic day we go to Reuters which has just reported that Goldman's CEO has hired high profile defense attorney Reid Weingarten. The market is not waiting to find out the details, and GS stock is tumbling. What has alos happened is that gold futures punched through $1900 for the first time ever. $2000 is the next target, and will likely be taken out within the week.

Goldman Sachs confirms its CEO hired criminal defense attorney
By Nathaniel Popper - LATiimes.com
Goldman Sachs is responding to a Reuters report that its chief executive, Lloyd Blankfein, has hired a criminal defense attorney.
Here's what a spokesman for the firm said in a statement:
"As is common in such situations, Mr. Blankfein and other individuals who were expected to be interviewed in connection with the Justice Department’s inquiry into certain matters raised in the PSI report hired counsel at the outset."

Why Did Goldman Sachs' CEO Hire Outside Counsel?
By: John Carney - Senior Editor, CNBC.com
The news that Goldman Sachs chief executive Lloyd Blankfein has hired a high-profile Washington, DC criminal defense attorney likely means that at least one of the government inquiries into Goldman is advancing. And it may indicate that Blankfein himself faces potential legal liability.
"If Blankfein hired him in a personal capacity, it means that his interests and Goldman's have diverged. That's bad news for one of them," a well-known criminal defense attorney in Washington who is not involved with the case told me.

Jackson Hole Central Bankers Reflect on QE2
Amid Pressure for New Stimulus
By Caroline Salas Gage and Jeannine Aversa - Blooomberg.com
Chairman Ben S. Bernanke has big shoes to fill this week when he speaks at the Federal Reserve’s annual symposium in Jackson Hole,Wyoming: His own.
Last year, Bernanke hinted that the Fed might embark on a second round of asset purchases to bolster the recovery, kicking off a 28 percent rally in the Standard & Poor’s 500 Index of stocks that ended in a three-year high on April 29.
Now, any boost to the economy from the Fed’s $600 billion of bond buying is hard to detect, with growth slowing to a less- than-1-percent annual pace in the first half, the U.S. losing its top credit rating from S&P and stocks falling about 18 percent from their peak.

Commodities Rebound, as Gold Climbs to a Record in New York,
Nickel Gains
By Sharon Lindores - Bloomberg.com
Commodities rebounded as silver, copper and gasoline gained on speculation that growth in developing countries will be strong enough to boost raw materials demand. Gold advanced to a record as stocks fell.
The Standard & Poor's GSCI Index of 24 commodities rose as much as 1.5 percent, after plunging 3.3 percent yesterday. Silver futures were up 2.9 percent at 10:46 a.m. in New York, sugar rose 3.2 percent, and gasoline gained 1.7 percent. Copper advanced for the third time this week, and gold rallied as much as 3.3 percent to $1,881.40 an ounce, the highest ever.
Commodities are up 1.6 percent this year while the MSCI All-Country World Index of equities tumbled 12 percent on concern the sovereign-debt crisis is threatening global growth and demand for raw materials. Consumption of oil shows no sign of a recession, Goldman Sachs Group Inc. said.

US, NATO Officials Openly Admit To Arming,
Training Libyan Rebels, Forcing Regime Change
International mandate to "protect" civilians is and always was a complete hoax
By Steve Watson - Prisonplanet.com
As some quarters of the mainstream media are still reporting that the battle for the Libyan capitol Tripoli is part of a popular uprising, Senior US and NATO officials confirmed today that the intensification of fighting was initiated by NATO, as it candidly presided over rebel forces.
The New York Times today quotes an anonymous senior diplomat who states that over recent weeks NATO has been directly coordinating rebel groups, despite the fact that its UN endorsed mandate did not extend beyond "protecting" Libyan civilians and specifically outlined that NATO should not seek to influence the outcome of the conflict.

'NATO not winning':
Gunfire heard during Tripoli live report

CFR President Richard Haass Calls for NATO Occupation of Libya
by Tony Cartalucci - Infowars.com
The Financial Times has featured an editorial penned by Council on Foreign Relations president Richard Haass titled, "Libya Now Needs Boots on the Ground," where the arch globalist states that Libya’s rebels are in no way capable of rebuilding Libya properly and will require an "international force" to maintain order. Haass breathtakingly admits that the NATO intervention to "protect civilians" was in fact a political intervention designed to bring about regime change. With NATO leading the offensive against Tripoli, a relatively calm city until now, the alleged cause of “protecting civilians” rings hollower than ever.

The Battle For Libya Is Almost Over...
As Is The Battle For Its 144 Tons Of Gold
Submitted by Tyler Durden - ZeroHedge.com
Following a 6 month stalemate in which neither side had attained any advantage, it suddenly took just a few days for the Libyan rebel forces to steamroll unopposed into Tripoli. While we are confident that the political aftermath of this outcome will be very much comparable to what is happening in Egypt right now, many wonder why it is that the Libyan situation has progressed with such speed. Perhaps the answer can be found in the 143.8 tons of gold held by the Libyan Central Bank. Granted it is nowhere near close the 366 tons of gold that Venezuela supposedly has per the WGC, most of it likely held offshore and not being repatriated, the question of where the global gold cartel may find some of the much needed physical to satisfy Chavez' demands has been now answered. Of course we assume that said gold has not already departed Libya in direction Caracas over the past 6 months. Which, in retrospect, we probably should, as it would explain why gold is now at $1875 and rapidly rising.

Qaddafi’s Whereabouts Still a Mystery as Rumors Swirl
by: Rick Gladstone - NYTimes.com
He has exalted himself as the "brother leader" of Libya, the dean of Arab rulers and the king of kings of Africa. On Monday, though, he was the autocrat who could not be found.
For all his bluster and bombast over the past four decades as Libya’s quirky ruler, Col. Muammar el-Qaddafi was mysteriously and conspicuously absent as forces of the six-month-old Libya rebellion encircled what they believed to be his ultimate Tripoli hideout, the Bab al-Azizya compound.

Gaddafi son Saif at Tripoli hotel after arrest report
(Reuters) - Saif al-Islam, the son of Libyan leader Muammar Gaddafi who rebels and the International Criminal Court said had been arrested, arrived late on Monday at the Tripoli hotel where foreign reporters are staying.
Saif appeared at the Rixos Hotel late at night and spoke to foreign journalists there.
Television footage showed him pumping his fists in the air, smiling, waving and shaking hands with supporters, as well as holding his arms aloft with each hand making the V for victory sign.
Saif told journalists that Tripoli, which has been largely overrun in the past 24 hours by rebel forces seeking to topple his father, was in fact in government hands and that Muammar Gaddafi was safe.

Fighting Flares in Tense Tripoli
Gadhafi Loyalists Stiffen Resistance
as Strongman Remains at Large
By CHARLES LEVINSON - WSJ.com
TRIPOLI, Libya—A nervous limbo, punctuated by gunfire, took hold of Libya's capital Monday, one day after opponents of Col. Moammar Gadhafi rolled triumphantly into the central square here—damping hopes by rebels and their international allies that the strongman's supporters would melt away.
Machine-gun and antiaircraft rounds could be heard throughout the day in Tripoli, as residents said loyalist gunmen had taken up positions in several neighborhoods. Rebels who attempted to turn an old police academy into their military headquarters quickly came under heavy fire, sending a stream of casualties to a makeshift clinic.

Qaddafi's Downfall, Obama's Victory
Criticized for getting involved in Libya, the president waged a quiet campaign that has dislodged the longtime dictator and sown discord among Republicans
By Michael Hirsh - TheAtlantic.com
For Barack Obama, "leading from behind" has never looked so ... decisive. With Libyan rebels celebrating in downtown Tripoli, and Muammar el-Qaddafi apparently in hiding, the president's supporters are claiming vindication for a much-criticized approach to regime change in the Arab world.
Obama's strategy amounted to staying resolutely behind the scenes throughout the five-month NATO air operation. To wit: Don't say the United States is openly engaged in ousting Qaddafi. Don't even concede the United States is going to war. Take cover behind a political imprimatur for action from the Arab League and United Nations, and let Europe lead the strike forces. Then modestly take credit--albeit only with a restrained statement on Monday from Martha's Vineyard, where Obama is vacationing.

The Mideast: Safe for Democracy?
By Ken Blackwell, co-authored by Bob Morrison - PatriotPost.com
Secretary of State Hillary Clinton was speaking for the Obama administration this week when she issued a sharp demand: Syrian dictator Bashar al-Asad should step down and now. The Obama administration is putting its Syria policy in line with its overall goal making the Mideast safe for democracy.
President Obama knows that democracy in the Middle East is not easy to attain. He has blamed the "Arab Spring" for the sharp uptick in oil prices here. That spike in oil prices was, along with the Japanese tsunami, one of the things that led to "a run of bad luck" for the U.S. economy, the president explained. We were coming out of the recession nicely, he said, until we were hit by these events beyond our control, he implied.

pt 1/2 Gerald Celente on the Alex Jones Show -
22 August 2011

pt 2/2 Gerald Celente on the Alex Jones Show -
22 August 2011

Bundesbank questions legality of EU bail-outs
Germany's Bundesbank has issued a blistering critique of EU bail-out policies, warning that the eurozone is drifting towards a debt union without "democratic legitimacy" or treaty backing.
By Ambrose Evans-Pritchard - Telegraph.co.uk
"The latest agreements mean that far-reaching extra risks will be shifted to those countries providing help and to their taxpayers, and entail a large step towards a pooling of risks from particular EMU states with unsound public finances," said the bank's August report. It said an EU summit deal in late July threatens the principle that elected parliaments should control budgets. The Bundesbank said the scheme leaves creditor states with escalating "risks and burdens" yet no means of enforcing fiscal discipline to make this workable.
There are no plans as yet for EU treaty changes to correct these distortions. "Unless there is a fundamental change of regime involving a far-reaching surrender of national fiscal sovereignty, it is imperative that the 'no bail-out' rule – still enshrined in the treaties – should be strengthened by market discipline, rather than fatally weakened," the report said.

'Black Death' of eurozone crisis will hit exports - China
The "Black Death" of the debt crisis across the euro zone will hurt China's exports, although Beijing's relatively small holdings of euro assets will limit damage to foreign exchange reserves, the nation's top official newspaper said on Monday.
Reuters - Telegraph.co.uk
The bleak diagnosis for the euro appeared in the overseas edition of the People's Daily, the main newspaper of China's ruling Communist Party, in a commentary by a former central bank official and an economist for the state-owned China Development Bank.
"The euro debt crisis has now been going for nearly two years since the end of 2009, and the sovereign debt crisis has spread like the Black Death of the fourteenth century across the euro zone countries," said the commentary, referring to the rodent-borne pandemic that devastated Europe.

Greece admits economy will shrink more than expected
Greece's finance minister has said that the economy will shrink more than expected this year, putting further pressure on the country's ambitious deficit-cutting effort.
by AP - Telegraph.co.uk
Evangelos Venizelos said the ministry forecasts annual output to shrink in 2011 between 4.5pc and 5.3pc of GDP.
Venizelos had previously admitted that the recession might be over last year's 4.5pc, a whole percentage point worse than initially estimated. The government has forecast a timid return to growth in 2012, but that now seems very unrealistic.
"All the measures we are taking ... are aimed to stem the recession," Venizelos said.
After living above its means for years until punishing interest rates forced it out of bond markets, Greece is now only kept solvent by a double rescue loan deal worth €220 billion (£192 billion) from its European partners and the International Monetary Fund.

Greece: It's the corruption, stupid!
Beneath the desperate debt crisis headlines, Jeff Randall finds a country mired in fraud and fiddling – and discovers its authorities are powerless to stop the rot.
By Jeff Randall - Telegraph.co.uk
Tavros is a scruffy suburb in the south-western part of Athens, about three miles from the city centre. It is home to the kind of utilitarian office blocks that 1960s town planners thought were a good idea. Many of the buildings are scarred by graffiti and the side streets are strewn with litter.
On a stiflingly hot day, I come here to interview Petros Themelis, a finance ministry official, who runs a call centre that's part of the Greek government’s battle against tax evaders. The idea is that public-spirited citizens ring up and snitch on those they suspect of tax dodging. This is the human factor in a much bigger war: Greece's life‑or-death struggle with the Debt Beast.

EU—Power to the President!
By Ron Fraser - theTrumpet.com
The pope has called for it—now Germany and France propose a European presidency with real power.
There’s a profound leadership gap in Europe.
At a time of increasing crisis, commentators are crying out for someone to step up and take the lead in stemming the spread of the euro crisis:
"Investors have little if any confidence in eurozone leaders' ability to stick together in the face of mounting calamity …" (Wall Street Journal, August 9; emphasis added throughout). “Markets can adjust to a downgrade of global growth, but they cannot cope with a spiraling loss of confidence in leadership and a growing sense that policymakers are disconnected from reality” (Financial Times, August 8). "In a sane world, the German chancellor and the French president would sack their economic advisers who clearly lack an understanding of basic economics or national accounting principles" (EU Observer, August 17). "A poll released Friday indicates Germans know little about the current euro crisis—but areoverwhelmingly opposed to the way it is being handled by German Chancellor Angela Merkel and French President Nicolas Sarkozy, the two leaders spearheading efforts to solve the crisis" (Spiegel Online, August 19).

America Is Rotting While China Is Rising
EndOfTheAmericanDream.com
The American people better wake up while there is still time. America is literally rotting right in front of our eyes. Once upon a time, the greatest manufacturing cities in the world were in the United States. One of the big reasons why the Allies won World War II was because U.S. factories simply pumped out far more stuff than anyone else did. Our forefathers built this nation into an industrial powerhouse, but now our formerly great manufacturing cities are rusting, rotting and falling to pieces as nations such as China wipe the floor with us on the global economic stage. It is absolutely depressing to see what is happening to many of our most famous cities. For example, would you like to buy a house for less than $10,000? Just move to Baltimore. Of all the homes that have been sold in the city of Baltimore so far this year, one out of every ten has sold for less than $10,000. In fact, one home sold for just $10.

Prepare to Be Surprised by QE3
By: John Carney - Senior Editor, CNBC.com
I think there's a lot of misunderstanding in the markets about how Fed chairman Ben Bernanke views Fed strategy.
A lot of people seem to think of Bernanke as very much confined to using tools he's already employed. This is one reason we keep hearing about the Fed being "out of bullets" or "shooting blanks." People just keep making the mistake of thinking that there aren't more creative things the Fed can do to address economic problems.

Did the Fed Buy the Market to Stop the Collapse?
Submitted by Phoenix Capital Research - ZeroHedge.com
Now that the market has rolled over and erased most of the gains from last week, I can’t help but wonder just why the market rallied at all. True, it was oversold… but the FOMC announcement wasn’t exactly bullish (Seriously… ZIRP for another year was reason for an 8% rally in four days?).
I found it interesting that the New York Post published a story containing the following quote just 3 hours before the post-FOMC market ramp job started.
Back in October 1989, a guy named Robert Heller, who had just quit his post as a Fed governor, suggested that the government should purchase stock index futures contracts to calm the markets in times of distress.

The Deflationary M2 Explosion
By Lawrence Kudlow - PatriotPost.com
Amidst the financial flight-wave to safety, with stocks plunging, gold soaring and Treasury bond rates collapsing -- and all the European banking fears that go with that -- there's an important sub-theme developing: An almost-forgotten monetary indicator, M2, which is mostly cash, demand-deposit checking accounts, savings deposits and retail money-market funds, has been soaring.
According to the St. Louis Fed, M2 is up 24.2 percent at an annual rate over the past two months. Almost out of the blue, that comes to a near $500 billion increase. In rough terms, the M2 explosion breaks down to $165 billion in demand deposits and $335 billion in savings deposits.

S&P Replaces President After US Rating Downgrade
Deven Sharma to Step Down as S&P President
Reuters - CNBC.com
Deven Sharma will step down as president of ratings agency Standard & Poor's to work on the company's strategic portfolio review before leaving the company at the end of the year.
Sharma will be replaced as president of the ratings agency by Douglas Peterson, chief operating officer of Citibank effective Sept. 12, S&P's parent company McGraw-Hill said in a statement.
The company said it began a search for a new president for S&P after the company split S&P into two separate organizations at the end of last year.

Four Banks Fail Over the Weekend
Total for the year so far is 64, behind last year's pace
ConusmerAffairs.com
Four banks were seized by regulators over the weekend, bringing the total number of failures so far this year to 64. In 2010, 160 banks went into receivership, were merged with another financial institution, or closed their doors entirely.
At the current rate, the total for 2011 could reach 106. Currently, there are nearly 1,000 banks and other financial organizations on the troubled list.
The latest banks to fail:
Lydian Private Bank, Palm Beach, Florida, was closed by the Office of the Comptroller of the Currency. Sabadell United Bank, National Association, Miami, Florida, will assume all of the deposits of Lydian Private Bank. As of June 30, 2011, Lydian Private Bank had approximately $1.70 billion in total assets and $1.24 billion in total deposits.

El-Erian Joining Feldstein-Fels on Prospect
of Euro Evolving Into New Core
By Simon Kennedy - Bloomberg.com
The euro area may need to shrink to survive.
As its sovereign-debt crisis nears a third year and rescue efforts fail to stop the rot in financial markets, economists from Pacific Investment Management Co.'s Mohamed El-Erian to Harvard’s Martin Feldsteinsay ensuring the euro's existence may require members to leave the 17-nation currency region.
The result would be what El-Erian, Pimco’s Newport Beach, California-based chief executive officer, calls a "smaller, much better integrated, fiscally strong euro zone." While leaders such as German Chancellor Angela Merkel consistently rule out that option, El-Erian told "Bloomberg Surveillance" with Tom Keene on Aug. 17 that they eventually may embrace it over the fiscal union required to maintain the status quo.

Avoid Securitized-Debt Risk on Chance of 2008 Repeat,
Bank of America Says
By Jody Shenn - Bloomberg.com
Investors should avoid taking risk in all categories of U.S. securitized debt because American and European policy makers may damage financial markets as they respond to a slowing economy and government deficits, according to Bank of America Merrill Lynch analysts.
"Rather than a repeat of 2010, when the Fed saved the day with QE2, we think we are moving closer to a repeat of 2008, when major policy errors devastated the economy," the analysts led by Chris Flanagan wrote in an Aug. 19 report. "The pressure to '‘do something' is now far more likely to result in more desperate or radical measures, even if it is bad policy."

Treasuries Fall on Speculation
of a Bernanke Stimulus Signal, Stock Gains
By Cordell Eddings and Lucy Meakin - Bloomberg.com
Treasuries fell amid speculation Federal Reserve Chairman Ben S. Bernanke will signal additional measures to stimulate the economy, damping demand for the safest assets.
Treasury two-year note yields reached the highest in two weeks amid concern yields that dropped to record lows this month will erode demand when the U.S. sells $99 billion of debt this week. Bernanke is scheduled to speak Aug. 26 in Jackson Hole, Wyoming at an annual conference sponsored by the Fed Bank of Kansas City. Stocks pared earlier gains.

The 10 Richest Members of Congress
By Jon Terbush - TheAtlantic.com
Especially in Congress.
Rep. Michael McCaul, the richest elected man on Capitol Hill, saw his net worth increase by a whopping 300% in the last year. He and the other nine richest members of Congress are worth a combined $1.13 billion.
How rich are they individually? Roll Call took a look at Congressional financial disclosure forms to determine which lawmakers have the deepest pockets (read more details online):

1. REP. VERN BUCHANAN (R-FL)
2. SEN. DIANNE FEINSTEIN (D-CA)
3. SEN. RICHARD BLUMENTHAL (D-CT)
4. SEN. FRANK LAUTENBERG (D-NJ)
5. REP. JARED POLIS (D-CO)
6. SEN. MARK WARNER (D-VA)
7. SEN. JAY ROCKEFELLER (D-WV)
8. SEN. JOHN KERRY (D-MA)
9. REP. DARRELL ISSA (R-CA)
10. REP. MICHAEL MCCAUL (R-TX)

Inequality of Wealth and Incomes
Mises Daily: by Ludwig von Mises
The market economy — capitalism — is based on private ownership of the material means of production and private entrepreneurship. The consumers, by their buying or abstention from buying, ultimately determine what should be produced and in what quantity and quality. They render profitable the affairs of those businessmen who best comply with their wishes and unprofitable the affairs of those who do not produce what they are asking for most urgently. Profits convey control of the factors of production into the hands of those who are employing them for the best possible satisfaction of the most urgent needs of the consumers, and losses withdraw them from the control of the inefficient businessmen. In a market economy not sabotaged by the government the owners of property are mandataries of the consumers as it were. On the market a daily repeated plebiscite determines who should own what and how much. It is the consumers who make some people rich and other people penniless.

Who Needs Robin Hood?
By Dr. Robert R. Owens - PatriotPost.com
"It's time to level the playing field." "The rich need to pay their fair share." "We have to end tax breaks for millionaires and billionaires." These are some of the stock phrases used by President Obama and his administration to fire up their troops to picket private homes, gin up mobs to protest success and to channel America towards the future they envision. Like a one trick pony or an extremely inept coach the Progressives' playbook has only one option. It's a Hail Mary pass they run over and over: class warfare. From Marx to Chavez the collectivists have always played the same card from each according to the ability to each according to their need.
Over a century of propaganda and indoctrination has conditioned most Americans to accept one of the most insidious aspects of class warfare as a natural and respectable feature of our government: progressive taxation. At its core progressive taxation is the quintessential action of the Trojan horse the Progressives have constructed to transform America from a representative republic with a capitalist economy into a centrally planned socialist democratic republic

Not Yours To Give...Revisited
By Charlie Lyon - PatriotPost.com
There is a legendary story about the legendary figure, Davey Crockett, who, among his many adventures, served as a Kentucky congressman in the 1820's. While campaigning for re-election, Crockett came across a farmer who flat out told him he wouldn't vote for Crockett. Startled by the man's bluntness he asked why and was told that they each had a significant difference of opinion on their understanding of the US Constitution. The farmer was adamant that nowhere in the sacred document does it give Congress the right to take property from one citizen and give it to another. He recounted Crockett's vote to approve a benevolence gift to families in Baltimore who'd been forced from their apartment homes by fire that left them homeless and destitute. As noble a cause as that seemed, the farmer explained, it did not lie in their power to confiscate wealth from one American to help another. However well intentioned those acts might seem, once that door is opened there is no limit to what the "well-intentioned" will feel disposed of to take and give.
The right to protection of property is a principle for which the founders were very clear and went to great lengths to limit the circumstances under which the government can coerce private property away from individuals or families, be it land, currency, or other assets..

Police State USA?

Consumer Edge says U.S. confidence hits new low
(Reuters) - Consumer confidence has fallen further after weeks of intensified economic concerns and broad stock market declines, and Conference Board data due later this month could be even weaker than current projections suggest, Consumer Edge Research said on Monday.
Readings from high, middle and low-income consumers all deteriorated sharply, due mainly to dramatic declines in outlook, the independent equity research firm said.
The firm's Consumer Economic Index is now at 45.4, down 10 percentage points from July and down 1.5 points from the 46.9 level it reported on August 10. Two days after that report, the Thomson Reuters/University of Michigan's preliminary August reading showed that U.S. consumer sentiment had fallen to its lowest point since May 1980.

Delinquent loans on the rise again, a grim sign for housing
By E. Scott Reckard - LATimes.com
It's an ominous sign for housing. The percentage of homeowners who have missed at least one mortgage payment has risen for the second straight quarter, the Mortgage Bankers Assn. says.
Officials at the trade group expressed concern Monday that the sluggish economy may be creating another group of distressed borrowers.
"It is clear that the downward trend we saw through most of 2010 has stopped," the Mortgage Bankers Assn.'s chief economist, Jay Brinkmann, said in a news release.
The second-quarter delinquency rate for loans on one- to four-unit residential properties increased to 8.44% of all U.S. mortgages as of June 30, up from 8.32% on March 31 and 8.25% on Dec 31.

Commercial Property Prices Rose 0.9% in June, Moody's Says
By Brian Louis - BusinessWeek.com
Aug. 22 (Bloomberg) -- U.S. commercial property prices rose 0.9 percent in June, the second straight monthly gain, as buyers increased purchases in smaller cities in search of higher returns, according to Moody’s Investors Service.
The index, which measures broad price trends, is down 6.6 percent from a year earlier and 45 percent below the peak of October 2007, the company said in a report today.
The increase represents a "firming up" of the market bottom as investors moved beyond trophy properties and major U.S. coastal cities, Moody’s said. Turmoil in capital markets and a recent drop-off in lending of commercial mortgage backed securities may delay "significant" near-term price increases, according to the report.

Early Mortgage Delinquencies Rise
to Highest in Year as U.S. Economy Slows
By Kathleen M. Howley - Bloomberg.com
The percentage of U.S. mortgages overdue by one month rose to the highest level in a year in the second quarter as homeowners who lost jobs were unable to make their payments.
The share of home loans overdue by 30 days rose to 3.46 percent of all mortgages, from 3.35 percent in the first quarter, according to a report today from the Mortgage Bankers Association in Washington. The percentage of mortgages overdue by 60 days increased to 1.37 percent from 1.35 percent, while foreclosures dropped for the second consecutive quarter.

Mortgage Payments One Month Late Jump as Economy Weakens
By Kathleen M. Howley - BusinessWeek.com
Aug. 22 (Bloomberg) -- The percentage of U.S. mortgages overdue by one month rose to the highest level in a year in the second quarter as homeowners who lost jobs were unable to make their payments.
The share of home loans overdue by 30 days rose to 3.46 percent of all mortgages, from 3.35 percent in the first quarter, according to a report today from the Mortgage Bankers Association in Washington. The percentage of mortgages overdue by 60 days increased to 1.37 percent from 1.35 percent, while foreclosures dropped for the second consecutive quarter.

Why Is President Obama So Anxious to Cut Social Security?
by: Dean Baker, Truthout | News Analysis
On his tour of the Midwest last week, President Obama again indicated his interest in cutting Social Security. He repeated a proposal that his administration first put forward in the debt ceiling negotiations: he wants to cut the annual cost of living adjustment by 0.3 percentage points.
This cut may sound small, but it adds up over time. A person in their 70s who had been getting benefits for ten years would see a reduction of 3 percent. By the time they were in their 80s, the cut would be 6 percent. And if they lived into their 90s, their benefit would be more than 9 percent lower as a result of President Obama's proposal.

Economy poised to make Obama a one-termer
By James Pethokoukis - Reuters.com
Just how much would a continued weak economy hurt President Barack Obama’s 2012 reelection chances? There are a few different ways of looking at this — and none of them seem particularly promising for the man currently occupying the Oval Office:
1) Slow Economy. Yale economist Ray Fair has a well-known election forecasting model that uses three economic variables to makes its call: a) growth rate of real per capita GDP in the first three quarters of 2012; b) growth rate of the GDP deflator in the first 15 quarters of the Obama administration, c) number of quarters in the first 15 quarters of the Obama administration in which the growth rate of real per capita GDP is greater than 3.2 percent at an annual rate.

Secret U.S. experiments to prompt 2nd Coming?
'It's the destruction of humanity and introduction of 'its' and 'things' that will make war against God'
By Joe Kovacs © 2011 WND
Is mankind's quest for knowledge, power and longer life about to backfire and wipe human beings off the face of the Earth?
Secret experiments now underway in the U.S. and elsewhere are sparking fears of a potential extinction-level event hastening the 2nd Coming of Jesus.
For decades now, there have been science-fiction stories portraying a future filled with spectacular abilities for people, where the definition of what makes someone a human being is blurred by blending high technology and even animal traits into the human body.

Stanton Friedman on The Dylan Ratigan Show -
Secret NASA Moon Mission?

Aliens may destroy humanity to protect other civilizations,
say scientists
Rising greenhouse emissions could tip off aliens that we are a rapidly expanding threat, warns a report
By Ian Sample, science correspondent - Guardian.co.uk,
It may not rank as the most compelling reason to curb greenhouse gases, but reducing our emissions might just save humanity from a pre-emptive alien attack, scientists claim.
Watching from afar, extraterrestrial beings might view changes in Earth's atmosphere as symptomatic of a civilisation growing out of control – and take drastic action to keep us from becoming a more serious threat, the researchers explain.
This highly speculative scenario is one of several described by a Nasa-affiliated scientist and colleagues at Pennsylvania State University that, while considered unlikely, they say could play out were humans andalien life to make contact at some point in the future.

NASA REPORT [.pdf]:
Would Contact with Extraterrestrials Benefit or Harm Humanity?
A Scenario Analysis

HP, Google actions bolster arguments of post-PC era
By Hayley Tsukayama - WashingtonPost.com
It's very fashionable to declare the death of things, if only because it can make you look very smart down the line.
But those claiming the personal computer going the way of the dinosaurs got to puff their chests out this week as two major tech deals added credence to the assertion that the age of the PC is waning. With Google adding hardware (and patents) with itsacquisition of Motorola Mobilityand Hewlett Packard Co.'s decision to explore spinning off its PC business, it's clear that tech companies are focusing their futures on tablets, smartphones and software.

The death of the text message
By David Goldman @CNNMoneyTech
NEW YORK (CNNMoney) -- The smartphone boom is a mixed blessing for wireless companies. While the devices have boosted data plan sales considerably, they are threatening to kill another revenue stream dead in its tracks: text messaging.
Dozens of smartphone applications offer "free" text messaging services, which allow wireless customers to send and receive texts by piggybacking on their existing data plans. That means people who download those apps -- such as GroupMe, Google Voice, Disco, Beluga, Kik and WhatsApp -- are able to bypass the expensive texting plans offered by wireless companies.

YouTube leads online video viewing; Microsoft slips
Puget Sound Business Journal - by Greg Lamm , TechFlash
YouTube continued its dominance of the U.S. online video-viewing market in July, making owner Google the No. 1 online video content property in July, according to the latest comScore report.
Meanwhile, Facebook made a jump, going from 47.7 million unique video viewers in June to 51.4 million in July, according to comScore. That bumped Facebook up to No. 3 in July, compared to No. 6 in June.
Microsoft -- driving by Bing Video -- had 49.5 million unique viewers in July, down from 50.7 million unique viewers in June.

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Monday 08.22.2011

So Much For 'Stalemate';
Libyan Rebels Enter Tripoli, Backed By U.S. Firepower
By Noah Shachtman - Wired.com
Just a few weeks ago, western observers were absolutely positive that the NATO air and sea campaign in Libya was going nowhere. "Can NATO actually win any of its wars?" the Guardian wondered. "Why can’t NATO whup Libya?" Time’s Mark Thompson asked. Center for a New American Security analystAndrew Exum answered that the NATO wasn't really trying all that hard to oust the dictator Moammar Gadhafi — and anyway, "it's likely that a stalemate is going to continue."
Now, rebel forces have broken through Tripol's outer defenses. Seif al-Islam Gadhafi, son of Moammar and one-time heir to the throne, has been captured. The dictator's personal guard has surrendered. The regime has crumbled. Not bad for a campaign in which the sole NATO casualty was a robotic helicopter.

Rebels Sweep Into Tripoli
Libyan Insurgents Push to Heart of Capital,
Claim Capture of a Gadhafi Son
By CHARLES LEVINSON in Tripoli, Libya,
and MARGARET COKER in Abu Dhabi - WSJ.com
Libyan rebels poured into Tripoli on Sunday after seizing a nearby military base, as fears of a bloody battle largely gave way to scenes of jubilant opposition fighters surging into the city's center and meeting little resistance from Col. Moammar Gadhafi's defenses.
Meanwhile, rebel leaders said Col. Gadhafi's son and onetime heir apparent, Seif al-Islam, has been arrested, according to multiple reports. Along with his father, he faces charges of crimes against humanity at the International Criminal Court in the Netherlands. Another son, Mohammed, was in contact with the rebels and was asking for guarantees for his safety, the Associated Press reported rebel spokesman Sadiq al-Kibir as saying.
President Barack Obama issued a statement Sunday night saying the U.S. believes the end of the Gadhafi regime is imminent and recognizing the Transitional National Council "as the legitimate governing authority in Libya."

Qaddafi’s 42-Year Rule Crumbling: NATO
By David Lerman and Zaid Sabah - Bloomberg.com
Libyan rebels said they captured two of Muammar Qaddafi's sons as they swept through the capital Tripoli in a drive to force Qaddafi out after 42 years of near- absolute power.
Qaddafi’s forces offered little resistance and celebrations broke out in the center of the city. Regime spokesman, Moussa Ibrahim said Qaddafi was ready to negotiate with Mustafa Abdel Jalil, the head of the rebel council, and asked for an immediate cease-fire.
Anders Fogh Rasmussen, secretary-general of the North Atlantic Treaty Organization, which has backed the rebels with aerial bombing since March, said in an online statement that the "regime is clearly crumbling” and “the sooner Qaddafi realizes that he cannot win the battle against his own people, the better."

ENIGMAS AND LIES IN LIBYA
Posted by Andrew Solomon -The NewYorker.com
As rebel forces enter Tripoli, the big question is what will happen to the Qaddafi regime. Most of the pundits expected Qaddafi to go months ago. It looked as though the end were truly nigh when Musa Kusa, his former head of intelligence and the power behind the throne, defected to England on March 30th. Here it was, mid-August, and the Colonel was still around—not exactly in power, but not entirely out of power yet, either, as of Sunday night. (Events are moving quickly, however.) The workings of the Qaddafi machine are shrouded in seven veils of obfuscation, and it is unlikely we will ever get the full story about what has gone on there, insofar as such a story is even knowable. Saying what will happen is an even dicier exercise; those who cannot know the past are destined to befuddlement, though things are looking pretty grim for the regime.

Libya conflict: rebels advance on Tripoli in 'dawn raid from the sea'
Libyan rebels claimed they sent fighters into Tripoli in a dawn raid by sea, reinforcing gunmen who launched the first uprising against Col Muammar Gaddafi since the start of the war.
By Nick Meo in Zintan, and Damien McElroy in Zawiyah - Telegraqph.co.uk
The rebels claimed that hours after they fought the first street battles of the war in Tripoli they had launched a daring mission to penetrate the capital, which until Saturday night had been considered Col Muammar Gaddafi's last stronghold.
An advance party "from Misrata reached Tripoli this dawn by sea and joined the Tripoli rebels", said Abdullah Melitan, a spokesman for the rebels.
"They are now fighting alongside them."

Libya: how 'Operation Mermaid Dawn',
the move to take Tripoli, unfolded
For weeks rebels promised that opposition groups in Tripoli were just awaiting the word to stage their own move to take the Libyan capital. -- By James Reevell in Djerba - Telegraph.co.uk
Few knew whether their promises were real, or whether they had the strength in numbers or arms to make good on them.
On Saturday night, the promise was put to the test. According to rebel sources in the capital and opposition groups abroad, including in the Tunisian resort town of Djerba, "Operation Mermaid Dawn" was launched from the Ben Nabi Mosque on Sarim Street near the heart of the city.
"Mermaid" is a long-standing nickname for Tripoli.
The rebels moved just after Iftar, the breaking of the Ramadan fast.

Oil Drops for Third Day as Qaddafi Regime Teeters
as Rebels Enter Tripoli
By Ben Sharples - Bloomberg.com
Oil fell for a third day in New York as Libyan rebels’ pushed into the capital Tripoli and signs of a slowing U.S. economy stoked concern fuel demand will falter in the world’s biggest crude-consuming nation.
Futures for October delivery slipped as much as 1 percent amid speculation Libyan leader Muammar Qaddafi’s regime is crumbling, paving the way for a recovery in the country’s crude production. London-traded Brent slumped as much as 1.8 percent, narrowing its premium to U.S. oil from a record. Reports this week may show U.S. companies ordered less equipment in July and the economy grew at a slower pace in the second quarter than previously estimated.

Commodity Price Fears and China's Growth Forecasts
Written by Stuart Burns - OilPrice.com
Commodity markets lost more than $16 billion in value during last week's selloff, Reutersreported in a special report. Equity and commodity markets plunged as growing anxiety over the global economic outlook spurred a flight to safe-haven bonds. The drop in prices wiped out $16 billion in value, mainly due to oil prices dropping 6 percent and investors losing $7.3 billion on paper, the report said.
The rout was caused by S&P's downgrading of the US' "AAA" rating and panic over the unsustainable rise in Euro-zone debt spreads potentially pushing the region into a breakup of the Euro or a massive transfer of debts onto German and French taxpayers — a move that would consign the core countries to years of slow growth.

Syria: Assad must resign, says Obama
EU leaders echo rebuke, delivered by US president in executive order imposing sanctions and freezing of assets
By Chris McGreal in Washington
and Martin Chulov in Beirut - Guardian.co.uk
The US and Europe have dramatically increased the pressure on the Syrian president, Bashar al-Assad, with Barack Obama leading a demand by world leaders for him to surrender power.
Obama declared the "sustained onslaught" of Assad's regime against pro-democracy protesters had cost it all legitimacy. The US president was joined by David Cameron, French president Nicolas Sarkozy and German chancellor Angela Merkel, as well as the EU in demanding Assad immediately resign.
Obama said the Syrian people's pursuit of democracy was an inspiration that had been met with "ferocious brutality" by their government.

Syrian president dismisses calls for him to step down as 'worthless'
Basher al-Assad claimed he was "not worried" about unrest sweeping the country, and threatened repercussions if outside powers tried to intervene militarily.
By Ben Farmer - Telegraph.co.uk
Syria’s embattled president shrugged off international calls for him to step down on Sunday as he claimed he was "not worried" about unrest sweeping the country.
Bashar al-Assad also revealed he is to introduce reforms that will allow for multi-party elections within six months.
As Colonel Muammar Gaddafi’s regime appeared on the verge of falling in Libya to Western-backed rebels on Sunday, Assad swore that military action against his country will "bring repercussions".
Assad conceded in a rare television interview that the security situation had become "more militant" in recent weeks.

Merkel insists eurobonds are 'exactly the wrong answer'
Angela Merkel has insisted Germany will not sanction the issuing of eurobonds – in a move that could trigger another unsettled day on global markets. -- By Louise Armitstead - Telegraqph.co.uk
The German Chancellor said the issuance of eurozone-backed bonds was "exactly the wrong answer" – despite warnings that it is the only move that will calm stricken markets.
Ms Merkel told German television yesterday: "The markets want to force us into doing certain things – and that we won't do." She added: "Politics cannot and will not simply follow the markets."
Eurobonds, or the issuance of bonds backed by all 17 members of the eurozone, would lead Europe "into a debt union, not a stability union", Ms Merkel said.

Peter Schiff on RT America 19 Aug 2011

The US Deficit In One Picture
JESSE'S CAFÉ AMÉRICAIN
I like this graphic for several reasons, but especially because it puts everything in proportion with regard to the US' current obligations.
One thing I would like to highlight is the large surplus funds in the Social Security Trust and others. These were 'invested' in a special type of intra-governmental Treasury note.
These funds are not 'gone' anymore than a Treasury bond is 'gone.' It is a sovereign debt holding. If the US defaults on its debt, then it defaults. But let's call it what it is.

Wall Street Aristocracy Got $1.2T in Loans
By Bradley Keoun and Phil Kuntz - Bloomberg.com
Citigroup Inc. (C) and Bank of America Corp. (BAC) were the reigning champions of finance in 2006 as home prices peaked, leading the 10 biggest U.S. banks and brokerage firms to their best year ever with $104 billion of profits.
By 2008, the housing market's collapse forced those companies to take more than six times as much, $669 billion, in emergency loans from the U.S. Federal Reserve. The loans dwarfed the $160 billion in public bailouts the top 10 got from the U.S. Treasury, yet until now the full amounts have remained secret.

Gold: Is It Invincible?
Morris Hubbartt - SilverBearCafe.com
Dollar Commentary
Loss of confidence in the dollar is accelerating and it effectively sits now on what amounts to a trap door. US debt downgraded by S&P was a big story. The bigger story is the performance of the dollar in comparison to gold! Gold is being elevated back to its ultimate currency status. I think it’s fair to almost say that it is gold that has really downgraded the dollar for months, and this downgrade continues with a fury.
US Dollar Ultimate Oscillator Chart
The USD has had a rough 12 months, losing in excess of 10%. Unfortunately, the policies of the United States Government for the foreseeable future are unchanged. I expect that policy to show itself in the performance of the dollar.

The Moneychangers - Secrets of the Temple
The Battle of Silver and Gold
Douglas V. Gnazzo - SilverBearCafe.com
Nelson Aldrich was financially well off when he left the wholesale grocery business. He then turned his attention to the political arena. Election to the United States Senate quickly followed. Within a few short years, Aldrich became a multi-millionaire of powerful influence. He was the father-in-law of John D. Rockefeller, and his grandson, Nelson Aldrich Rockefeller, later became Vice President of the United States.
Plans for a central bank had been on the drawing board long before 1900. A complex task of such intricate detail required vast amounts of time and effort to construct; the work performed behind the scenes, out of the public view, waiting for the perfect moment to be unveiled. The sensitive demeanor of public opinion demanded that the subject be revealed in the most convincing and acceptable manner possible, avoiding all suspicion or doubt.

Gold Advances to Record as Platinum Reaches High
By Glenys Sim - Bloomberg.com
Gold rallied for a sixth day to an all-time high as a global economic slowdown and the European debt crisis sent equities lower and boosted demand for a haven. Platinum climbed to the highest level in more than three years.
Immediate-delivery bullion climbed as much as 1.5 percent to $1,879.05 an ounce and traded at $1,872.80 at 9:29 a.m. Singapore time. The metal is up 16 percent in August, heading for its best monthly performance since September 1999.
"Gold has support given the risks are still there so I wouldn't want to short gold in the current environment," Jeremy Friesen, commodity strategist at Societe Generale SA, said from Hong Kong.

Stocks and Gold Point to a Hellish Outcome
By Bill Bonner - The DailyReckoning.com
08/19/11 Poitou, France – Wow…another whack.
Wall Street got whacked hard yesterday. It had begun to look as though things were getting back to normal. Then…whammo!
Yesterday, the Dow took a 419 point hit. Gold rose $28 to close decisively above $1,800.
We keep an eye on stocks and gold. Stocks measure the value of America’s businesses. Gold measures the value of America’s – and the world’s – money. What are these measures telling us?
That we’re on the road to Hell!
Of the two measures, gold is harder to figure out.

Max Keiser:
Gold is Not Just a Hedge Against Inflation,
It's a Substitute Currency! 1/3

Max Keiser:
Gold is Not Just a Hedge Against Inflation,
It's a Substitute Currency! 2/3

Max Keiser:
Gold is Not Just a Hedge Against Inflation,
It's a Substitute Currency! 3/3

Increased Production No Threat to Silver Prices
Dr. Jeff Lewis - SilverBearCafe.com
Financial modeling is a science composed of complex "if, then" statements; this is evidenced clearly by the number of investment bankers who work 100 hour weeks toiling through Excel spreadsheets of merger and acquisition deals.
Bankers have it easier than most investors in completing modeling. For one, institutions assume an infinite timetable, as most banks outlive the humans that staff it. Secondly, banks have the ability to operate on the premise of cash flow, which is fairly simple to understand. If returns are larger in dollar terms than the cost to borrow, then a business can be levered.

Industrial factors affect $5,000/oz. gold,
$200/oz. silver prices boom
CommodityOnline.com
The Gold Report: Rob, you've been quite vocal about your belief that gold will reach $5,000/oz. (ounce) and silver $200/oz. for silver. Why and when will that happen?
Rob McEwen: Your readers need to appreciate: Gold is money. It is currency. I think the number of people familiar with gold will grow as people see gold as a currency. China, India, Russia are buying gold to diversify their foreign reserves. To restore the confidence in currencies, I think some central banks, such as the Chinese and possibly the Russian, will increase their gold holdings to the level that the percentage of their total currency will be greater than that of any other currency in the world. At that point, they will assert that their currency should become the reserve currency of the world.
If you look at the last gold run, gold went from $200/oz. in mid-1979 to $800/oz. in early 1980. During the 10-year period of 1970–1980, we saw a 20-fold increase in the price, from $40/oz. to over $800/oz. We also had a 20-year low in 2001 of $250/oz. If you apply that 20-times multiple, you're up to $5,000/oz.

Chavez Launches War Against US Dollar
The Daily Bell - SilverBearCafe.com
Venezuelan President Hugo Chavez ordered his government to repatriate $11 billion in gold held in banks abroad to safeguard the country from the economic crisis and said he'll nationalize the local gold industry. Venezuela has about 211 tons of its 365 tons of gold reserves held abroad at institutions including the Bank of England, JP Morgan Chase & Co. (JPM), Barclays Plc (BARC), Standard Chartered Plc (STAN) and the Bank of Nova Scotia (BNS), according to a government document. ... Chavez, who has said he wants to eliminate the "dictatorship" of the U.S. dollar, has called on Venezuela's central bank to diversify its $28.7 billion in reserves away from U.S. institutions. - Bloomberg
Dominant Social Theme:
The government knows best how to manage the money supply; Chavez will lead the way.
Free-Market Analysis:
Whoa! Hold the US dollar horses, folks... the global reserve currency game just got a whole lot more interesting. There is, in our humble opinion, a whole lot more to this story than just the repatriation of gold being held at foreign central and commercial banks. It is perhaps the biggest story to unfold in the currency markets in many years.

Armageddon Can Wait
By Bill Bonner - The DailyReckoning.com
08/19/11 Poitou, France – Until August 15, 1971, wealth was tallied in units of a real and natural thing – gold. It measured out the world’s other real things – its resources and its output. Its main advantage was that it couldn’t be diddled. That turned the authorities against it; they couldn't make more of it.
Nuestra Senora de Atocha, a Spanish galleon, sank in a storm off the Florida coast in 1622. When it was found in the 1970s, its treasure of gold doubloons was just as valuable as it was when the ship left Havana 350 years before.
But, post 1971, we have a new, avant-garde money system. Wealth is counted up in pieces of paper…or as electronic 'information.' Each unit has no real value of its own. It only represents a claim against real goods and services. And each year, it purchases fewer of them.

Prepare for the Global Long Wave Extinction Event
David Knox Barker - SilverBearCafe.com
Life without appreciation for irony in global financial, economic and political affairs would be challenging. God undoubtedly enjoys the irony at work in human action. Politicians promising government sponsored heaven on earth for decades have delivered the world into a global financial meltdown nightmare, and the cusp of another depression. All around the world, the politicians are scrambling for their political lives, and many their political souls, as the global system enters a long wave extinction event.
The final plunge of this long wave winter season is now underway. The international political economy, which has lost its moorings in individual accountability, responsibility and purpose, is breaking up. Socialism in all its forms, including the global banking system that is dependent on the government dole, is collapsing from the weight of its internal contradictions. Socialism is going through an extinction event in the final years of this long wave, receiving its just reward from the crushing long wave forces that it has magnified around the globe.

Relax, central banks can still save us
Our situation is desperate but not serious, as the Viennese say.
By Ambrose Evans-Pritchard - Telegraph.co.uk
Even if Europe and America slide back into recession with fiscal deficits already dangerously stretched and interest rates on the floor, financial authorities still have the means to prevent a spiral into debt-deflation.
Whether they have nerve to use those means if necessary, and whether they can overcome deep rifts to act in unison and with overwhelming force, is another matter. It would help if China and other reserve powers stopped sniping from their clay towers. They will suffer just as badly, or worse, if the damn breaks.

Fed loaned $1.2 trillion to banks during financial crisis
By Tom Petruno - LATimes.com
One of the Federal Reserve’s primary roles is to be the lender of last resort to banks. It played that role to the tune of stunning $1.2 trillion during the financial-system crisis that began in 2007, according to data compiled for the first time by Bloomberg News.
The Bloomberg probe of the Fed’s lending, published Sunday, showed that Morgan Stanley, Citigroup and Bank of America were the single largest borrowers from the central bank from August 2007 to April 2010.
The Fed also lent heavily to foreign banks that were struggling to fund themselves: Almost half of the Fed’s top 30 borrowers, measured by peak balances, were European firms, Bloomberg said. They included Royal Bank of Scotland, Switzerland’s UBS and Belgium's Dexia.

Bob Chapman & Alex Jones:
The Unloading of the Economy Continues

Bank of America CEO Moynihan Says
Expect 3,500 Job Reductions This Quarter
By Hugh Son - Bloomberg.com
Bank of America Corp. (BAC), the biggest U.S. lender, will eliminate about 3,500 jobs this quarter to focus “on what we can control” amid market turmoil, said Chief Executive Officer Brian T. Moynihan.
Some workers already were informed of the dismissals, which are in addition to 2,500 reductions made this year, Moynihan said yesterday in a memo to senior managers. Cuts will affect operations across theCharlotte, North Carolina-based firm and include as much as 5 percent of the investment-banking unit, or about 600 employees, said two people with knowledge of the plans.
Moynihan is under pressure to reduce expenses at the bank, whose market value has plunged by about half this year. He’s booked about $30 billion in costs tied to home loans since replacing Kenneth D. Lewis in 2010, mostly because of the 2008 takeover of subprime lender Countrywide Financial Corp. At the same time, revenue is shrinking as the U.S. economy slows.

What You Don't Get About the Job Search: The Unemployed Speak
By Derek Thompson - TheAtlantic.com
We know their numbers. Roughly 25 million Americans, equal to the entire population of Texas, are unemployed, forced to work part-time, or have dropped out of the labor force entirely. But we don't all know their stories.
So the Atlantic asked our readers to share with us the one thing most people don't understand or appreciate about looking for work. Here are some of the most heart-breaking and illuminating of the scores of responses we received in the last 24 hours.

21 Signs That The New Reality For Many Baby Boomers
Will Be To Work As Wage Slaves Until They Drop Dead
TheEconomicCollapseBlog.com
All over America tonight, millions of elderly Americans are wondering if their money is going to run out before it is time for them to die. Those that are now past retirement age are not going to be rioting in the streets, but that doesn't mean that large numbers of them are not deeply suffering. There are millions of elderly Americans that are leading lives of "quiet desperation" as they try to get by on meager fixed incomes. Many are surviving on Ramen noodles, oatmeal, peanut butter or whatever other cheap food they can find in the stores. There are some that are so short on cash that they will not turn on the heat in their homes until things get really desperate. As health care costs soar, millions of elderly Americans find themselves deep in debt and facing huge medical bills that they cannot possibly pay. A lot of older Americans would go back to work if they could, but jobs are scarce and very few companies seem to even want to consider hiring them. Right now caring for all of the Americans that have already retired is turning out to be an overwhelming challenge, and things are about to get a whole lot worse. On January 1st, 2011 the very first Baby Boomers turned 65. A massive tsunami of retirees is coming, and America is not ready for it.

Middle class annihilation one penny at a time
MyBudget360 - SilverBearCafe.com
64 percent of Americans do not have adequate savings for an unexpected $1,000 expense. The crushing blow to income and household wealth.
American middle class is furious and this is reflected in how people perceive their failed government but also a financial system that has largely profited from the failures of millions. A recent Gallup poll shows that only 13 percent of Americans actually approve of Congress and the way they are handling their job. This is a record low. Of course thefinancial system for those too big to fail banks is doing just fine thanks to years of accommodative policy, taxpayer bailouts, and politicians that basically collect payroll checks from the HR department of these large financial institutions. As we have noted and the media fails to report, the average per capita income in the United States is $25,000. What is even more disturbing is that a recent poll found that 64 percent of Americans would not be able to shoulder even an unexpected expense of $1,000. If a transmission on a car goes down or additional medical expenses hit, it will cost well over $1,000. This is simply another reflection of how the crushing collapse of the middle class will not be televised.

Southland grocery workers authorize strike
Members of the United Food and Commercial Workers approve a walkout if the union and supermarkets including Vons, Ralphs and Albertsons can't agree on a contract.
By W.J. Hennigan, Los Angeles Times
Members of a union that represents 62,000 grocery workers at Vons, Ralphs and Albertsons supermarkets in Southern California voted overwhelmingly to authorize a strike if an agreement on a new contract can't be reached.
The strike authorization won the backing of more than 90% of the United Food and Commercial Workers members who voted, easily more than the two-thirds majority required, union officials said Sunday.
The union said it would report the vote results Monday to a federal mediator trying to resolve the contract dispute.

Barack Obama to America: Sod it, I'm off to Martha's Vineyard
By Toby Harnden - Telegraph.co.uk
In some respects, you've got to give Barack Obama some credit. People would rightly criticise Bill Clinton for poll testing everything he did, including, famously, his 1995 vacation. But Obama? He wants to go to Martha’s Vineyard with his family, he knows that it’s a politically insane thing to do but he's damn well going there anyway.
If you were a Republican campaign operative drawing up Obama's programme, you’d be hard pressed to come up with something better than sending him to this exclusive island that is the playground for the east coast social, intellectual and financial elites.
Here in the United States, there isn't the resentment of money and success that is so prevalent in Britain. Nevertheless, a sojourn on Martha’s Vineyard is the kind of thing that is available to very, very few Americans, a break that ordinary voters cannot imagine having.

Barack Obama is on course for a second term – against all the odds
Ineffective and unpopular, the president should be a sitting duck, but the Republicans are turning their fire on themselves
Posted by Michael White - Guardian.co.uk
Let's take the day off from picking over the ruins of our own miserable riots and try to cheer ourselves up over Barack Obama's good fortune. What good fortune? I hear you ask. Surely he has just been humiliated over the US budget debacle and the decision of a cowboy credit rating agency to tweak America's triple-A credit status. His standing in the polls is sagging, now below 40%.
Well, yes, that's all true. And he has not been a particularly brave or effective president either. Democrat or Republican, I'd be pretty disappointed, too. But election campaigns are about choice of both candidate and their policies. So Obama's luck lies in the near-unbelievable fact that the Republicans look determined either to pick a loser or refuse to vote for someone who could win.

Barack Obama Cannot Get Congress To Pass Amnesty For Illegal Immigrants So Now He Is Just Going To Ram It Down Our Throats Any Way That He Can
EndOfTheAmericanDream.com
If you are an illegal immigrant and you have not been arrested for committing a crime, the odds that you will ever be deported have now gone way, way down. With the Republicans in control of the House of Representatives, Barack Obama knows that he simply is not going to be able to get amnesty for illegal immigrants passed by Congress. But instead of giving up, Obama has decided to ram amnesty for illegal immigrants down our throats any way that he can. The head of the Department of Homeland Security, Janet Napolitano, has announced that there will now be a case-by-case review of all deportation cases involving illegal immigrants. Those involving "criminals" will be prioritized and almost all the rest will be thrown out. In essence, this is "backdoor amnesty" for illegal immigrants and it also represents a stunning admission by the Obama administration that it is simply going to refuse to enforce our immigration laws.

A prime aim of the growing Surveillance State
BY GLENN GREENWALD - Salon.com
Several weeks ago, a New York Times article by Noam Cohen examined the case of Aaron Swartz, the 24-year-old copyright reform advocate who was arrested in July, after allegedly downloading academic articles that had been placed behind a paywall, thus making them available for free online. Swartz is now being prosecuted by the DOJ with obscene over-zealousness. Despite not profiting (or trying to profit) in any way -- the motive was making academic discourse available to the world for free -- he's charged with "felony counts including wire fraud, computer fraud, unlawfully obtaining information from a protected computer and recklessly damaging a protected computer" and "could face up to 35 years in prison and $1 million in fines."

Ron Paul: "They're Setting The Stage For Violence In This Country"
Presidential candidate responds to question about detention camps for civil unrest
By Paul Joseph Watson - Infowars.com
In a response to a question asked by Infowars correspondent Robert Wanek at Iowa State University during the recent Ames straw poll, Ron Paul said that the federal government was preparing for civil unrest and martial law in the United States.
Paul was asked for his opinion on whether H.R. 645 (The National Emergency Centers Establishment Act) could lead to Americans being incarcerated in detention camps during a time of martial law.
"Yeah, that's their goal, they’re setting up the stage for violence in this country, no doubt about it," responded Paul.
The National Emergency Centers Act or HR 645, first introduced in January 2009, mandates the establishment of "national emergency centers" to be located on military installations for the purpose of providing "temporary housing, medical, and humanitarian assistance to individuals and families dislocated due to an emergency or major disaster," according to the bill.

Breaking: Ron Paul On FEMA Camps! (on HR 645)

Dominique Strauss-Kahn charges 'set to be dropped'
Strauss-Kahn's accuser summoned to meeting with prosecutors, in sign that at least some of the charges will be dropped
By Chris McGreal in Washington - Guardian.co.uk
Prosecutors are expected to drop sexual assault and other charges against Dominique Strauss-Kahn, the former International Monetary Fund director, at a court hearing on Tuesday.
Lawyers representing Strauss-Kahn's accuser, Nafissatou Diallo, say she has been summoned to a meeting with prosecutors in New York on Monday which they believe to be a sign that at least some of the charges, including the most serious, will be abandoned.
Diallo alleged that Strauss-Kahn, 62, attempted to rape her after she went to clean his hotel suite. The former IMF chief has said that the sexual encounter with Diallo was consensual and has accused her of attempting to extort money.

So, Where In the World is Safe?
Simon Black - SilverBearCafe.com
Yesterday's letter about social upheaval received a lot of comments, and I want to address the major themes today.
First, 'Simon the White' wrote: "You imply that it's not just the USA, but that all Western countries are screwed. Where will the contagion end? You appear to be arguing ‘expatriate at all costs,' but if things are bad enough that there is rioting in the USA, where on earth will be safe?"
To summarize yesterday's letter, I view social upheaval as a foregone conclusion - it's already happening around the world, and is a direct consequence of deteriorating economic conditions. In the developed world, social upheaval is a gigantic pyre desperately seeking a spark.

Boeing Wins 747-8 Freighter Approval After Two-Year Delay
By Susanna Ray - Bloomberg.com
Boeing Co. (BA)’s new 747-8 freighter won certification from the U.S.Federal Aviation Administration to enter commercial service, capping a two-year, $2.04 billion delay for the company’s biggest plane ever.
Luxembourg’s Cargolux Airlines International SA will receive the first of the jumbo jets early next month, Boeing said today in a statement. The European Aviation Safety Agency also gave its approval to the new plane, Boeing said.
Flight tests ran 18 months as Boeing worked through design changes made to stretch the iconic hump and wings and add new engines. When development began in 2005, first delivery was targeted for 2009’s third quarter. Engineers were then diverted to the even-later 787 Dreamliner, which set back work on the jumbo jet and forced Boeing to log the additional costs.

The Dawning of a Global Water Crisis
Russ Winter - SilverBearCafe.com
Good quality water sources in the right locations are the key to basic civilization, let alone even minimal economic growth. Like hydrocarbons, water is now the weak link to the maintenance of 7 billion people on the planet. Once abundant aquifers worldwide are being rapidly depleted, and resolving this is expensive and requires growth controls and sacrifice.
Growth at any price strategies such as used in China completely fracture in this kind of environment. There is plenty to write on this topic but I will warm up with a little on two trainwrecks: North China and the American Southwest.
China has 2220 cubic feet of usable water per capita, which is one fourth the world average. They use 2/3 of water consumption for crops and livestock.

DR BILL DEAGLE - 19 AUGUST 2011 - (Planet X; US oil; meteors)
ELECTRICITY GRID PROBLEMS IN 2013 (1/3)

DR BILL DEAGLE - 19 AUGUST 2011 -
ELECTRICITY GRID PROBLEMS IN 2013 (2/3)

DR BILL DEAGLE - 19 AUGUST 2011 -
ELECTRICITY GRID PROBLEMS IN 2013 (3/3)

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Friday 08.19.2011

12 Signs That We Are Getting Dangerously Close To War With Syria
EndOfTheAmericanDream.com
Are you ready for another war? Now that Barack Obama and most of the other major leaders of the western world are publicly calling for Syrian President Bashar al-Assad to step down, we are getting dangerously close to war with Syria. It is not going to happen next week, and it is almost certainly not going to happen next month. But right now the U.S. government is going down the exact same road that it went down with Libya. There is all kinds of talk about how Assad has lost "legitimacy", "human rights violations" have been declared, sanctions have been imposed and Syrian government assets have been frozen. But just like with Gaddafi, Assad has no intention of ever stepping down. He is not going to resign just because the U.S. and the EU ask him too. The opposition in Syria is certainly not strong enough to remove Assad, so just about the only way that it will be accomplished is through direct military action. Right now the U.S. and the EU are basically painting themselves into a corner with their bold declarations about Assad. But when the time comes will they be willing to risk starting World War III in order to remove him from power?

Why the Gold Bull Market Will Continue to Charge Ahead
By Eric Fry - The DailyReckoning.com
08/18/11 Laguna Beach, California – Stocks are plunging again today as we go to press. The Dow Jones Industrial Average is down a whopping 500 points – back below 11,000…AGAIN. Meanwhile, most European markets are off more than 5%.
In other news, a small biotech company, Medicinal Genomics, announced today that it has successfully mapped the DNA of marijuana. Also, President Obama leaves today for a vacation.
A mere coincidence?
Returning from dreamland to the real world… Gold is making headlines again this morning by jumping $30 to a new record high above $1,800 an ounce.
Gold has been making a lot of headlines these days – both because of the success it has achieved and because of the failure that so many investors seem to anticipate.

Gold hits new record near $1,830 an ounce
By Hibah Yousuf - Money.CNN.com
NEW YORK (CNNMoney) -- Gold prices are again marching in record territory, nearing $1,830 an ounce, as the global economic picture gets uglier by the minute.
Gold jumped 2% to hit an all-time high (not adjusted for inflation) of $1,829.70 an ounce Thursday morning, as jittery investors dumped risky assets like stocks and rushed into traditional safe havens, including gold and U.S. Treasuries. Gold closed at $1822, up 1.6% for the day.
Buying of U.S. debt was so heavy that it sent the 10-year yield below 2% for the first time in history.

Debt Collapse - $20,000 Gold - Mike Maloney

Markets in meltdown amid new global recession fears
Frenzied selling wipes £62bn off value of FTSE and Dow Jones plummets in another tumultuous day for world economy
By Heather Stewart - Guardian.co.uk
Financial markets on both sides of the Atlantic were convulsed by a fresh wave of selling amid fears that the world economy is sliding back towards recession.
The FTSE 100 closed down 239 points, or 4.5%, at 5092, wiping more than £62bn off its value. By late afternoon on Wall Street, the Dow Joneswas down by 480 points, or 4.2%.
Growing disarray in the eurozone over the latest bailout for Greece, weak American manufacturing figures and a warning from Wall Street bank Morgan Stanley that the US and Europe are "hovering dangerously close to recession" all contributed to the mood of panic.

20 Signs That The World Could Be Headed
For An Economic Apocalypse In 2012
TheEconomicCollapseBlog.com
If you thought that 2011 was a bad year for the world economy, just wait until you see what happens in 2012. The U.S. and Europe are both dealing with unprecedented debt problems, the financial markets are flailing about wildly, austerity programs are being implemented all over the globe, prices on basics such as food are soaring and a lot of consumers are flat out scared right now. Many analysts now fear that a "perfect storm" could be brewing and that we could actually be headed for an economic apocalypse in 2012. Hopefully that will not happen. Hopefully our leaders can keep the global economy from completely falling apart. But right now, things don't look good. After a period of relative stability, things are starting to become unglued once again. The next major financial panic could literally happen at any time. Sadly, if we do see an economic apocalypse in 2012, it won't be the wealthy that suffer the most. It will be the poor, the unemployed, the homeless and the hungry that feel the most pain.

US streets full of formerly middle class

Noda Says G-7 Nations Must Maintain Close Contact
as Global Stocks Tumble
By Toru Fujioka - Bloomberg.com
Finance Minister Yoshihiko Noda said Group of Seven nations should maintain close contact in coming weeks.
Speaking to reporters in Tokyo today, he was addressing a question about what policymakers should be doing to address a global stock decline. On Aug. 8, G-7 finance ministers and central bank governors pledged in a statement to "take all necessary measures to support financial stability and growth" after a global stock sell-off. The group said officials would inject liquidity and act against disorderly currency moves as needed. The G-20, which includes emerging markets, issued a similar communique.

American Idiots: How Washington is destroying the economy
What's ailing us? It's not just unemployment. It's not just Europe's debt woes. And, no, it's not Wall Street this time. It's the takeover of the economic debate by fanatics who are up to no good. Fix that -- and maybe you fix the economy.
By Allan Sloan - Fortune.CNN.com
FORTUNE -- What the hell is going on?
Standard & Poor's, the bond-rating agency, downgrades the U.S., and the world trembles. The markets here go nuts on the first trading day after the downgrade, losing $1 trillion in value. European Union finance chiefs are playing Whac-a-Mole with members' debt problems. And England … England was literally burning.
Only three short years ago we were all terrified when our financial system was on the brink of disaster afterLehman Brothers went broke in September of 2008. Those scary times seemed to have disappeared in the spring of 2009. But now those fears are back -- and things are even scarier, the stock market's "green" days notwithstanding.

Goldman Sachs VP Changed Name, Now a Top Congressional Staffer
by: Lee Fang, ThinkProgress - TruthOut.com
Has Rep. Darrell Issa (R-CA) turned the House Oversight Committee into a bank lobbying firm with the power to subpoena and pressure government regulators? ThinkProgress has found that a Goldman Sachs vice president changed his name, then quietly went to work for Issa to coordinate his effort to thwart regulations that affect Goldman Sachs' bottom line.
In July, Issa sent a letter to top government regulators demanding that they back off and provide more justification for new margin requirements for financial firms dealing in derivatives. A standard practice on Capitol Hill is to end a letter to a government agency with contact information for the congressional staffer responsible for working on the issue for the committee. In most cases, the contact staffer is the one who actually writes such letters. With this in mind, it is important to note that the Issa letter ended with contact information for Peter Haller, a staffer hired this year to work for Issa on the Oversight Committee.

MARKETS DEMOLISHED: Here's What You Need To Know
By Joe Weisenthal - BusinessInsider.com
The panic is back after taking a 5-day rest.
But first, the scoreboard

Dow: -417.66
NASDAQ: -129.24
S&P 500: -53.02
And now, the top stories

• The story of today is a continuation of a global panic that's been in place for weeks now. On Monday, stocks completed the third day of the biggest three-day rally since March 2009. Then in the middle of this week, stocks basically did nothing. And now, it's back to panicking.
• Mostly it started in Europe once again, though even yesterday evening the weakness began. Some weak after-the-bell tech stock reports helped send the futures drifting lower. Asia was weak, and then European markets went kaboom. A story about the Fed meeting with European banks over funding concerns that appeared last night caused a lot of worry. Other than that there wasn't even that much news, although the market's hunger for a solution to the perpetual crisis grows louder by the day. Perhaps the most ominous new fire in Europe is this situation where various countries who will be bailing out Greece are demanding collateral for their loans. It started with Finland, but if everyone does this, it's going to kill the whole thing.

....expanding credit with 'repos' instead of QE3?
The upcoming expansion of US bank credit
By Alasdair Macleod - FinanceAndEconomics.org
Since the FOMC meeting, there has been a noticeable silence over the Fed’s monetary policy following QE2. But there is some evidence that the funding of government debt at low interest rates will shift to the repo market, rather than a new round of quantitative easing.
The silence on this subject may be partly explained by the monetary focus shifting to Europe. However, it is likely that the Fed has no intention of introducing QE3, given that the expansion of narrow money so far has led only to a degree of price inflation, without much benefit to asset prices. And with the ECB still reluctant to print euros, QE3 would probably collapse the dollar/euro rate and propel gold considerably higher, putting unwelcome strains on the financial system. The Fed also finds itself having dramatically expanded the monetary base for little economic benefit: against all its expectations, the economy is sliding into recession again. Perhaps it is a case of all the people being no longer fooled all of the time with respect to what QE actually is. No, another approach is called for.

Philly Fed index warns that risk of double-dip recession is growing
The US economy has sent its loudest signal yet that the risk of a double-dip recession is growing, data which helped drive falls in global markets.
By Richard Blackden - Telegraph.co.uk
In a fresh blitz of weak data, economists were particularly shaken after a survey of confidence among manufacturers around the eastern city of Philadelphia collapsed to its lowest level since 2009.
The main index tumbled to minus 30.7 this month – against forecasts of a reading of plus 3.7 – its weakest since the US was still mired in its last recession during the first quarter of 2009, compared with a reading of plus 3.2 in July.
Manufacturing has been a rare bright spot for the US over the last two years, but the news from Philadelphia suggests that industry is suffering as consumers retrench.

Do You Realize That The Governmen
Is Still Paying Banks Not To Lend...?
By Henry Blodget - BusinessInsider.com
One of the most outrageous "open secrets" of U.S. government policy these days is that the Federal Reserve is still paying big banks not to lend money.
And it's doing that while screwing average Americans who have been responsible and lived within their means.
Huh?
Seriously:
The Federal Reserve is quietly continuing with one of the many outrageous bank-bailout programs it initiated during the financial crisis--the one in which it pays big banks interest on their "excess reserves."
What are "excess reserves"?
Money that the banks have but aren't lending out--money that banks are just keeping on deposit at the Fed.
The Fed is paying banks 0.25% interest on this money.

Morgan Stanley Cuts Global Growth Forecast
With U.S. 'Close' to Recession
By Paul Panckhurst - Blooomberg.com
Morgan Stanley cut its forecast for global growth this year, citing an "insufficient" policy response to Europe’s sovereign debt crisis, weakened confidence and the prospect of fiscal tightening.
The bank estimates expansion of 3.9 percent, down from a previous forecast of 4.2 percent, according to an e-mailed report dated today. Morgan Stanley cut its China growth forecast for next year and Deutsche Bank AG reduced its estimates for the nation for 2011 and 2012.
The threat to the global economy from the debt burdens of developed nations from the U.S. to Europe has roiled world markets this month and wiped trillions of dollars off the value of equities. At the same time, slowing expansions in countries including Germany, the key driver of European growth, are hurting confidence.

Goldman Sachs opens new stock market in Canada
By BOYD ERMAN - The Globe and Mail
Goldman Sachs Group Inc. is creating yet another stock market in Canada, adding to the competition for TMX Group Inc.'s exchanges.
Goldman said Thursday that it will bring its SIGMA X system to Canada. The SIGMA X market in Canada will be a so-called "dark pool" that will let buyers and sellers anonymously trade stocks that are listed on the Toronto Stock Exchange.

Keiser Report 174:
UK Ponzi Scheme & guest Richard Heinberg

China announces new plans to boost yuan globally
HONG KONG (Commodity Online): Continuing its efforts to boost the Yuan at international levels, China promised for more leniencies to foreign investors.
The new plan allowed foreign investors to buy mainland shares and bonds, pushing up shares of brokerage stocks listed in Hong Kong.
it underscored Beijing's intent to propel explosive growth in the Hong Kong offshore yuan market and turn the yuan, or renminbi, into a widely-traded currency one day.
In a sign of Beijing's patent currency ambitions, it also concluded the biggest-ever offshore yuan bond deal on Wednesday in Hong Kong, which Li made clear would remain the paramount center for cultivating a yuan market outside China.

Dollar Gains on Slowing Growth, Contagion Concern
By Candice Zachariahs and Monami Yui - Bloomberg.com
The dollar rose against all 16 of its major counterparts as futures signaled Asian stocks will extend a worldwide slump in equities on speculation European banks lack sufficient capital.
The Australian dollar fell for a second day as concern over slowing global growth damped demand for higher-yielding assets. The euro weakened versus the dollar before a report forecast to show German producer-price inflation slowed in July. The greenback was still 0.5 percent from a record low versus the yen after reports yesterday signaled price pressures are rising even as the economy slows.

We Are Exiting the Eye of the Storm
By Doug Casey - HoweStreet.com (Conversations with Casey)
....Doug: My sense is that we are definitely exiting the eye of the storm at this point, and we’re heading back into the raging winds of financial, political, and social turmoil. The riots you see now are just an indicator of what’s ahead – an appetizer… hardly the main course.
L: That’s a pretty bold statement, Doug. We’ve been talking about the so-called recovery really being nothing more than the eye of the financial storm that hit in 2008. But the U.S. and other governments around the world have been able to animate the corpse of the 20th-century economy and keep an appearance of life in its zombie motions longer than we thought possible. To say we’re exiting the eye of the storm implies that zombie is going to stop moving and the smell of decay will soon overpower everything else. Are you ready to make that call?
Doug: You’re asking me to do what I just said was unwise: to say both what and when. But yes, it does look grim to me. With the markets fluctuating so wildly, the Dow going up and down hundreds of points per day, that’s very likely to spook the government, investors, business managers, and consumers even more than they already are. Normally I don’t pay much attention to consumer confidence; it’s an emotional state, and emotions can change in a New-York second. But at this point the economy rests on nothing more substantial than confidence. It’s a confidence game. And confidence can blow away like a pile of feathers in a hurricane.

We've been warned: the system is ready to blow
Only a new way of managing the global economy can prevent more mayhem in the markets and on the streets
By Larry Elliott - Guardian.co.uk, Sunday 14 August 2011
For the past two centuries and more, life in Britain has been governed by a simple concept: tomorrow will be better than today. Black August has given us a glimpse of a dystopia, one in which the financial markets buckle and the cities burn. Like Scrooge, we have been shown what might be to come unless we change our ways.
There were glimmers of hope amid last week's despair. Neighbourhoods rallied round in the face of the looting. The Muslim community in Birmingham showed incredible dignity after three young men were mown down by a car and killed during the riots. It was chastening to see consumerism laid bare. We have seen the future and we know it sucks. All of which is cause for cautious optimism – provided the right lessons are drawn.

Government Foiled the Last Recession,
But It Might Create the Next One
Three years ago, we faced a crisis with urgency.
Today, we face a crisis of urgency.
By Derek Thompson - TheAtlantic.com
Here we go again.
The markets tanked Thursday morning and closed down more than 400 on news that ... well, take your pick. Home sales fell. Germany's growth stopped. Europe's dithering continues. Double-dip risks linger in the U.S.
The straw that broke the market's back today might well have been this "catastrophic" manufacturing report from the Philly Federal Reserve. Manufacturing activity plummeted from a slightly positive reading of 3.2 in July to -30.7 in August, its lowest level since March 2009.

Rise of the Fourth Reich,
how Germany is using the financial crisis to conquer Europe
By SIMON HEFFER - DailyMail.co.uk
Yesterday’s crisis meeting between Angela Merkel and Nicolas Sarkozy was arranged before the participants knew of the disastrous growth figures in the Eurozone that emerged in the morning.
The background to the meeting was last week’s tumult in the world financial markets. Shares had gone into freefall after the downgrading of America’s credit rating.
Worse than that, however, were the tremors rattling some of Europe’s most important banks, notably in France, caused by further evidence of the utter failure of even the more developed European economies to live anything like within their means.

U.S. Fed's Low-Interest-
Rate Pledge May Retard Recovery, Fisher Tells CNBC
By Vivien Lou Chen - Bloomberg.com
Federal Reserve Bank of Dallas President Richard Fisher said the central bank’s pledge to keep the benchmark U.S. interest rate near zero through at least mid- 2013 may lead to "unintended consequences" and hurt growth.
"Now you know that you can wait to borrow because rates are going to be locked in at very low levels for a two-year period," the regional bank chief said today in an interview with CNBC. "This might well further retard the recovery.”
The Dallas Fed chief joined presidents Charles Plosser of Philadelphia and Narayana Kocherlakota from Minneapolis this month in posing the most opposition in almost 19 years to a Federal Open Market Committee decision. They dissented from the FOMC’s Aug. 9 decision to hold interest rates near zero at least until mid-2013, preferring instead to maintain a commitment to do so for an unspecified "extended period."

Fool's Gold: Beware of 'Rare' Coins
By Quentin Fottrell - SmartMoney.com
As SmartMoney.com reported yesterday, many investors are buying gold, while others are moving back into equities. Given the popularity of the precious metal, some experts are warning consumers about unscrupulous retailers selling jewelry and vintage coins. The Maine Office of Securities recently cautionedconsumers about scam artists. David Schraeder, spokesman for the World Gold Council in New York, says you can buy from the U.S. Mint, though you may pay a slight premium, and says the council’s site has a list of respected dealers.
Peter Schiff, CEO of brokerage firm Euro Pacific Capital in New York, who prefers to buy gold for his clients rather than equities, has just released a report, "Classic Gold Scams – & How to Avoid Getting Ripped Off." It says more companies have sprung up in recent months offering ways to invest. The lesson: Don't get carried away with the gold rush or aggressive salesmanship without knowing your French Rooster from your American Eagle.

Sprott sells gold ... to buy silver
Think gold may lose some lustre? Eric Sprott sees a silver lining
TIM KILADZE - The Globe and Mail
Eric Sprott, the perennial gold enthusiast, has his sights set on a new precious metal.
Mr. Sprott's charitable organization, The Sprott Foundation, is selling two million units of its gold holdings and using the money to buy silver.
The move comes as gold veers close to $1,800 (U.S.) per ounce, and less than a week after Mr. Sprott had declared the metal "the investment of the last decade" in an interview with GoldMoney Foundation. "I think silver is going to be the investment of this decade."

Silver ready to break into an uptrend
By Deepak Rangan - CommodityOnline.com
Post the crash of May 2011, Silver has been moving in a pattern very difficult for trend predictions. As such investors have been clueless for the past few weeks as to when one might invest in silver.
Now seems to be the right time.
At the Multi-Commodity Exchange of India (MCX), Silver consolidated at levels of 50500 in May and July (chart below). And from July, silver moved to break the resistance briefly before falling to the level 1 support instead of going all the way down to the level 2 support.

Bond markets signal 'Japanese' slump for US and Europe
The global credit markets are braced for deflation and perhaps depression. -- By Ambrose Evans-Pritchard - Telegraph.co.uk
Panic flight to safety has pushed the yield on 10-year US Treasuries below 2pc for the first time in American history, exceeding the extremes of the Lehman crisis and the banking crash of the 1930s.
Investors scrambled to buy the bonds of strongest industrial states on Thursday on fears of a double-dip recession on both sides of the Atlantic and a European banking crash, driving down their returns to investors. German yields fell to 2.08pc and Switzerland's 3-month rates have turned deeply negative.

Gerald Celente: Trends In The News August 2011

Zombies Born of Government Spending
By Bill Bonner - The DailyReckoning.com

Zombie, zombie in the night
Making cities burn so bright
What immortal hand could frame
Thy fearful symmetry?

Yes, dear reader, the mobs are getting angry. Here’s the story from Germany:
Far-left extremists are specifically targeting German luxury cars, symbols of the country’s wealth and power, bringing the total number of vehicles torched in the German capital this year to at least 138, more than double the figure for all of 2010.
The rise in Berlin car burnings coincides with widespread lawlessness that erupted last week across England. More than 1,500 people were arrested as rioters looted shops, attacked bystanders and burnt autos. In Berlin, far-left extremists are specifically targeting German luxury cars, symbols of the country’s wealth and export prowess, police said.

Is the Fed Preventing a Housing Market Rebound?
Its latest policy to keep interest rates near zero through mid-2013 could backfire and prevent home sales instead of encouraging them -- By Daniel Indiviglio - TheAtlantic.com
Basic economic theory says that when mortgage interest rates are low, consumers should feel more encouraged to buy a home. But right now, that intuitive theory might not hold. Kathleen Madigan at Real Time Economics proposes that the Federal Reserve's latest proclamation -- that short-term interest rates would be kept near zero through mid-2013 - might discourage home buying. Could this be possible?
When Certainty Can Hurt
This might seem like a backwards idea. To be sure, the last thing that the Fed would aim for is to make the housing market worse off. So why would it allow one of its policies to keep home sales artificially low? This might be an unfortunate and unintended consequence of its desire to calm the broader market.

U.S. Consumer Prices Rise More Than Forecast
By Shobhana Chandra and Alex Kowalski - Bloomberg.com
The cost of living in the U.S. climbed more than forecast in July, which could make it harder for Federal Reserve Chairman Ben S. Bernanketo convince colleagues to immediately act to spur growth after manufacturing in the Philadelphia region plunged in August.
The consumer-price index increased 0.5 percent from June, more than twice the 0.2 percent median forecast of economists surveyed by Bloomberg News, figures from the Labor Department showed today inWashington. The Philadelphia Fed's general economic index dropped to minus 30.7 this month, the lowest since March 2009, when the economy was in a recession.

Gas, food and clothing prices are on the rise
By Annalyn Censky @CNNMoney
NEW YORK (CNNMoney) -- Americans paid more for necessities like gas, food, clothing and shelter in July, as prices rose more than expected over the month.
The Consumer Price Index, the government's key inflation measure, rose 0.5% in July, led by a 4.7% increase in gas prices.
That's worrisome, said Daniel Penrod, senior industry analyst with the California Credit Union League, considering many Americans are still struggling amid high unemployment and low home prices.
"We're looking at a situation where income isn't growing, so large price jumps right now without job growth and income growth behind it, basically mean that consumers are looking at more of their money going out the door at a time when less of it's coming back in on an income side," Penrod said.

Unemployment claims jump back above 400,000
By Hibah Yousuf @CNNMoney
NEW YORK (CNNMoney) -- The number of first-time filers for unemployment benefits rose more than expected last week and jumped back above the key 400,000 level, signaling that the job market remains stuck in the mud.
There were 408,000 initial unemployment claims filed in the week ended Aug. 13, the Labor Department said Thursday, up 9,000 from an upwardly revised 399,000 the prior week.
The figure was higher economists' forecasts for 400,000, according to consensus estimates from Briefing.com.
Initial claims have sat above 400,000 for the last 18 out of 19 weeks. The trend began at the start of April, when high oil prices, bad weather and Japan's tsunami were weighing on businesses.

Jobless Claims in U.S. Top Forecast
By Shobhana Chandra - Bloomberg.com
More Americans than forecast filed applications for unemployment benefits last week, signaling the labor market is struggling two years into the economic recovery.
Jobless claims climbed by 9,000 to 408,000 in the week ended Aug. 13, the highest in a month, Labor Department figures showed today in Washington. Economists surveyed by Bloomberg News projected a rise in claims to 400,000, according to the median forecast. The number of people on unemployment benefit rolls rose, while those receiving extended payments fell.

Philadelphia-Area Factory Index Falls to -30.7,
Lowest Since March of 2009
By Alex Kowalski - Bloomberg.com
Manufacturing in the Philadelphia region unexpectedly contracted in August by the most in more than two years as orders plunged and factories shed workers.
The Federal Reserve Bank of Philadelphia’s general economic index plunged to minus 30.7 this month, the lowest since March 2009, from 3.2 in July. The August gauge exceeded the most pessimistic projection in a Bloomberg News survey in which the median estimate was 2. Readings less than zero signal contraction in the area covering eastern Pennsylvania, southern New Jersey and Delaware.
Stocks extended their decline after the figures showed weaker demand from consumers and companies in the U.S. and abroad is posing a risk to the industry that spearheaded the recovery. Fewer customer inventories may indicate producers will see a smaller decrease in orders should the U.S. economy falter.

Factory data, jobless rise renews fears for US economy
A clutch of bad news from the United States renewed anxiety over the world biggest economy, with a surprise increase in inflation, a higher-than-expected rise in people claiming benefits and sharp contraction in factory activity.
Telegraph.co.uk
The poor economic data, coupled with rising fears over the health of European banks, sent market around the globe tumbling, with the Dow Jones dropping as much as 5pc at one stage.
Investors have been worried about the possibility of a double-dip recession as growth in US and the eurozone has stagnated.
Adding to fears was a rise in Chinese house prices which could lead to more tightening and lower growth in the world's second largest economy.
The Philadelphia Federal Reserve Bank's business activity index showed factory activity in the US Mid-Atlantic region plummeted in August, falling to the lowest level since March 2009.

The Very Incredible Vending Machine
Mises Daily: by Devin Leary-Hanebrink
A few days ago I was sitting in the break room at work enjoying my lunch when I realized just how incredible the simple, everyday, run-of-the-mill vending machine truly is. For days I have watched people pour money into these simple machines without ever really paying much attention. Heck, I have used these things for the majority of my life and never even given them a second thought. What is truly impressive — no, utterly astonishing — is how such a simple device has spontaneously revolutionized life the world over without the direction of a single bureaucrat, academic, statute, or judicial opinion.
Where It All Began
The vending machine's (un)distinguished history is quite surprising and goes back much further than most imagine. In fact, the very first vending machine dates back to the first century AD. Created by the engineer Heron of Alexandria, this machine used a counterweight system that dispensed holy water after the customer inserted a coin into the coin slot. While it was more of a novelty than an actual distribution device, the vending machine was officially born. However, it was not until the late 19th century, ushered in by the full might of the Industrial Revolution, that history saw the arrival of the modern-day vending machine.

HP to end mobile products, may sell PC division
By JORDAN ROBERTSON - AP - DailyFinance.com
SAN FRANCISCO -In a dramatic reshuffling, Hewlett-Packard Co. said Thursday that it will discontinue its tablet computer and smartphone products and may sell or spin off its PC division, bowing out of the consumer businesses.
It's one of the most extreme makeovers in the company's 72-year history and signals new CEO Leo Apotheker's most transparent move to date to make HP look more like longtime rival IBM Corp., which now makes most of its money from software and services.
The most apparent result for consumers will be the end of HP's TouchPad tablet, a sales dud, and HP-branded smartphones, also-rans in a booming market crowded with the iPhone and devices based on Google's Android system. By the end of next year, HP computers could be sold under another company's name.

Can an iPhone App Save America's Small Businesses?
By Bruce Watson - DailyFinance.com
Cinda Baxter is on a mission: She wants to save America's small businesses. A little more than two years ago, the Minneapolis-based retail consultant launched the first attack in her battle:The 3/50 Project, a grassroots group that encourages consumers to patronize local brick-and-mortar merchants.
This month, The 3/50 Project announced its next move: Look Local, an iPhone app that helps users to find locally owned "mom and pop" businesses.
Starting Local, Going National
Instead of fighting box stores directly or petitioning politicians, Baxter's project is taking a pragmatic, consumer-based approach to the problem of failing businesses. To encourage customers to reconsider their buying habits, it asked participants to choose three local businesses and commit to spending $50 per month in them. Although this move seems simple, its long-range impact could be huge. According to the project, if half of the employed population took part, its actions would generate more than $42.6 billion in revenue.

Hillary in '12! -- The Stupid Left-Wing Case for Dumping Obama
By Larry Elder - PatriotPost.com
Just when you thought the disgruntled-about-Obama lefties gave up on the "let's replace Obama with Hillary" nonsense, it's back like "Rocky VI." Maybe even in 3-D.
Check out this recent newspaper subhead: "President Barack Obama is facing mounting doubts within his own party about his re-election prospects, with fellow Democrats beginning to ask if Hillary Clinton would have made a better president."
Well, with favorability numbers in the low 40s and 73 percent of Americans believing America is on the "wrong track," doubts do tend to sort of creep in. But Hillary?!

U.S. Army to Invest $7.1 Billion in Renewable Energy Projects
The U.S. Army takes energy security seriously, planning to invest $7.1 billion into private sector sourced renewable energy infrastructure on Army land.
by John Shimkus, Energy Digital - OilPrice.com
The U.S. Army is recruiting… private sector renewable energy companies that is. The Army is taking a lesson from its brothers in the Navy (who are engaging in an aggressive biofuels campaign) and actively pursuing renewable energy options to power bases and operations, breaking the chain of dependence on foreign oil. The Army plans to actively seek out private sector renewable energy companies to develop $7.1 billion worth of renewable energy projects on Army land.
The U.S. Army is establishing the Energy Initiatives Office Task Force to interface directly with the private sector in pursuit of large-scale renewable energy projects. The Army owns over 15 million acres of U.S. land, 5 million of which has been identified as suitable for renewable energy infrastructure.

Syria: Assad must resign, says Obama
EU leaders echo rebuke, delivered by US president in executive order imposing sanctions and freezing of assets
By Chris McGreal in Washington and Martin Chulov in Beirut - Guardian.co.uk
The US and Europe have dramatically increased the pressure on the Syrian president, Bashar al-Assad, with Barack Obama leading a demand by world leaders for him to surrender power.
Obama declared the "sustained onslaught" of Assad's regime against pro-democracy protesters had cost it all legitimacy. The US president was joined by prime minister David Cameron, French president Nicolas Sarkozy and German chancellor Angela Merkel, as well as the European Union in demanding Assad immediately resign.
Obama said the Syrian people's pursuit of democracy was an inspiration that had been met with "ferocious brutality" by their government.

Israel launches Gaza air strikes in retaliation for Eilat attacks
Up to six Palestinians killed during assault on Rafah hours after attack in southern Israel leaves at least seven dead
By Harriet Sherwood in Jerusalem - Guardian.co.uk
Israeli civilians and soldiers came under sustained attack on Thursday by militants in the south of the country in a co-ordinated and audacious assault spanning three hours that left at least seven people dead and around 40 injured.
The Israeli government and military said the assailants came from Gaza, and promised to use "full force" in retaliation. Hamas denied it was responsible and said it would defend Gaza with "all its strength".
Within hours the Israelis had made good on their promise, killing up to six Palestinians in an air strike on Rafah, the Gaza town next to the border with Egypt. The dead were said to include the commander of the Popular Resistance Committee, Abu Awad Neirab.

* * * * *
Instead of TV, try watching these over the weekend - truth can be stranger than fiction... don't scoff

Steve Quayle - Nathan Leal -
America's New Pearl Harbor - Hawaii - Spokane WA
Video had technical difficulties - FULL interview mp3

Steve Quayle Tom Horn -
Alien Agenda - Human Animal Hybrids - NWO

HAWK - Space Command - Ultra Black Ops - Aliens - Nazi's

- - - - - - - - - - - - - - - -
Archived Page Link
- - - - - - - - - - - - - - - -

Thursday 08.18.2011

SEC may have destroyed documents, senator says
Grassley: Agency may have got rid of Goldman, Madoff documents -- By Ronald D. Orol, MarketWatch
WASHINGTON (MarketWatch) — The Securities and Exchange Commission may have destroyed documents and compromised enforcement cases involving activity at large banks and hedge funds during the height of the financial crisis in 2008, according to allegations made by a lawmaker on Wednesday.
"From what I've seen, it looks as if the SEC might have sanctioned some level of case-related document destruction," said Sen. Chuck Grassley, Republican of Iowa, in a letter to the agency's chairman, Mary Schapiro.
"It doesn't make sense that an agency responsible for investigations would want to get rid of potential evidence. If these charges are true, the agency needs to explain why it destroyed documents, how many documents it destroyed over what timeframe, and to what extent its actions were consistent with the law."

Is the SEC Covering Up Wall Street Crimes?
A whistleblower claims that over the past two decades, the agency has destroyed records of thousands of investigations, whitewashing the files of some of the nation's worst financial criminals. -- By MATT TAIBBI - RollingStone.com
Imagine a world in which a man who is repeatedly investigated for a string of serious crimes, but never prosecuted, has his slate wiped clean every time the cops fail to make a case. No more Lifetime channel specials where the murderer is unveiled after police stumble upon past intrigues in some old file – "Hey, chief, didja know this guy had two wives die falling down the stairs?" No more burglary sprees cracked when some sharp cop sees the same name pop up in one too many witness statements. This is a different world, one far friendlier to lawbreakers, where even the suspicion of wrongdoing gets wiped from the record.

"Euro-Bondage" Dropped for Financial Transaction Tax
BY PATER TENEBRARUM - FinancialSense.com
Economically Illiterate Nincompoops At Work
Over the past week or so, an uneasy quietude has descended over Europe. Ever since the ECB began its interventions in the government bond markets of Italy and Spain, the sense of immediate crisis has diminished somewhat, as euro area bond yields and CDS spreads have declined in its wake.
And yet, everybody knows that the basic fundamental problems haven't gone away – in fact, they have worsened, as lately even Germany – hitherto regarded as the growth engine of the euro area – has seen its economy beginning to sputter.
As Reuters reports:
"German gross domestic product growth slowed more than expected in the second quarter, dropping to 0.1 percent in seasonally adjusted terms from a revised 1.3 percent in the first three months of the year, data showed.

'You Need This Dirty Word, Euro Bonds'
Spiegel.de
In a SPIEGEL interview, billionaire investor George Soros criticizes Germany's lack of leadership in the euro zone, arguing that Berlin must dictate to Europe the solution to the currency crisis. He also argues in favor of the creation of euro bonds as a way out of the turbulence.
SPIEGEL: Mr. Soros, we currently see a global banking crisis, a currency crisis and a sovereign debt crisis. Has the financial dilemma become too big to handle? How can politicians on both sides of the Atlantic be expected to solve such a multitude of crises?
Soros: The politicians have not really tried to fix any crisis; they have so far tried only to buy time. But sometimes time actually works against you if you refuse to face the relevant issues and explain to the public what is at stake.

The United States Of Europe: A Proposed "Economic Government"
Would Integrate Europe To A Degree Not Seen Since The Roman Empire -- EndOfTheAmericanDream.com
Are you ready for "The United States Of Europe"? The integration of Europe is about to go to another level. As the European debt crisis deepens, there are cries all over the EU for full economic integration in Europe. On Wednesday, French President Nicolas Sarkozy and German Chancellor Angela Merkel sent a letter to European Council President Herman Van Rompuy which stated that they want a new "economic government" for Europe to be formed. According to the letter, Sarkozy and Merkel want the leaders of the eurozone countries to "elect" a president for the new "economic government". The idea would be that the president would hold twice-yearly summits to address the debt problems that Europe is facing right now. But many pro-EU critics are already howling that Sarkozy and Merkel have not gone nearly far enough. A whole lot of "experts" in Europe are proclaiming that without full economic integration and the creation of "eurobonds", Europe is doomed. Jennifer McKeown, an economist for Capital Economics, put it this way when asked what would happen if eurobonds are not created fairly soon: "The likely outcome is the eurozone ceases to exist".

The Sovereign Debt Crisis
Mises Daily: by Robert P. Murphy
A major factor in the recent roller-coaster stock market is the sovereign-debt crisis. Investors the world over are growing more alarmed that the governments of the so-called PIIGS (Portugal, Ireland, Italy, Greece, and Spain) will default on their debts, which have assumed gigantic proportions because of reckless spending and ill-conceived bank bailouts. The situation has become so serious that many analysts think it's only a matter ofwhen the Eurozone will dissolve back into regional currencies. In order to provide a primer on these weighty headline issues, through the Mises Academy I am offering a short course on the sovereign-debt crisis, taught from an Austrian perspective, beginning next week.

Gold bars, coins sold at 750% premium on buying frenzy in Dubai
CommodityOnline.com
DUBAI (Commodity Online): Gold demand in Dubai is proving so strong that gold dealers have raised their markups upto 750% to cash in on the investor frenzy. Uncertainties over global economy are making investors to purchase gold at any value.
"Most customers and retailers are trying to buy gold bars and coins. There is virtually no supply of 50 gram and 100 gram gold bars in the market. It seems wholesalers are releasing only one or two bars per day to their regular customers. If we have demand for 50 gold bars, our wholesaler is giving only one or two pieces per day. Even getting the second piece is difficult" said Pearlju Baby Chungath, Owner of Chungath Jewellery at Karama Center, as per emirates24/7.com

Gerald Celente on Goldseek Radio - 16 August 2011

Gold settles at record just shy of $1,800
Venezuela's Chavez announces gold industry nationalization
By Claudia Assis and Chris Oliver, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures settled at a record on Wednesday as investors remained nervous about the euro zone's sovereign-debt crisis and weak prospects for global growth.
Gold for December delivery gained $8.80, or 0.5%, to end at $1,793.80 an ounce on the Comex division of the New York Mercantile Exchange.
It had earlier traded as high as $1,797.60 an ounce.
Before Wednesday's high mark, gold's most recent settlement had come Tuesday, when the metal ended at a $1,785 per ounce, rising $27 for the session.

Germany’s Gold Hoard
BY RON FRASER and ANDREW MIILLER - theTrumpet.com
Euro or no euro, Germany is the sole nation with sufficient bullion to back a federal currency.
Gold skyrocketed to over us$1,800 an ounce on Tuesday. One nation gained powerfully as a result: Germany.
As the markets fixate on Europe, seeking to understand the complexities involved in Franco-German moves to stabilize the eurozone and hence the global economy, little attention has been paid to a crucial component of German power in this whole equation—Germany's gold hoard.
It is intriguing to note the historical timing of Germany's sudden acquisition of its post-unification gold hoard.
The forerunner of today's European Central Bank, the European Monetary Institute (emi), once carried almost $27 billion in gold reserves. In 1998, theemi was replaced by the European Central Bank (ecb). No European Monetary Union financial data was published that year, while Europe's elites "rebalanced" the financial system. When financial records resumed publication in 1999, $20 billion in gold had "gone missing" from EU coffers.

some news, needs to be taken with a 'grain of salt'... caveat lector and consider the source

Gold Market Is a 'Bubble Poised to Burst,' Wells Fargo Says
By Debarati Roy - Bloomberg.com
Speculative demand from investors has pushed the gold market into a "bubble that is poised to burst" after prices surged to a record this year,Wells Fargo & Co. said.
"We have seen the economic damage" of past bubbles and "feel compelled to ring the warning bells," Wells Fargo analysts led by Dean Junkans said in a report dated yesterday and e-mailed today.
Gold futures have advanced 26 percent this year, following 10 straight annual gains. The price reached a record $1,817.60 an ounce on Aug. 11 on demand for an investment haven as European and U.S. sovereign-debt woes escalated.

Gold & Silver: Full Spectrum Dominance
BY JIM WILLIE - FinancialSense.com
Gold and Silver have emerged in the last 12 months as the dominant asset group. They led the entire 2000 decade, still gathering disrespect. They do not require respect from the Wall Street and London crowd. They serve as effective protection during the slow motion crumbling process to the global monetary system. The sovereign bond crisis has circled the peripheral nations, rendered its wreckage, and is working toward the center where the USTBond and UKGilt reside (worried). Italy and Spain are squarely in the crosshairs for financial assaults, but France and the United States lie closer to the core of Western nation sacred debt territory, soon to become sacred burial grounds. That must sound drastic and melodramatic, but just wait. Other calls of an insolvent US banking system, calls of a chronic housing bear market also once sounded extreme. They came true. So did $1000 gold and Canadian Dollar parity calls made in 2005. Again they came true. Dismissal of Green Shoots, Jobless Recovery, Exit Strategy, and No QE sounded bombastic and pedagogical, but they were also correct calls. In fact, very easy calls. The ruin of the USTreasury Bond debt security is a long drawn out process like a cancer victim. Weakness is followed by emaciation, then organ damage, circulatory problems, finally a bedridden state, and lastly the inevitable death. Analogies to each can be made with USTBonds nowadays, like the foreign central banks withdrawing from the process evident in low Indirect Bids, like dependence upon debt monetization.

The truth about American debt downgrade; profit from gold
By Nickolai Hubble - CommodityOnline.com
What a week. What more is there to say? A lot, apparently. First to Europe. The Germans are getting jittery. And their newspapers may be partly to blame: 'Will the stock markets tear us into the abyss today?' – Bild Zeitung.
'Is the world going bankrupt?' – Der Spiegel print issue.
'How is the world economy supposed to continue?' – your editor's German Grandma in an email.
Why do you care about Germany? Well, it's the only remaining source of hope for a debt-laden Europe. But don't be too optimistic. Many Germans, including your editor's Grandma, are sick of seeing their Chancellor 'blow money up other countries' backsides'.

Keiser Report: Banking Looters (E173)

Treasury Yield Curve Flat on U.S. Concern
By Susanne Walker and Cordell Eddings - Bloomberg.com
The extra yield Treasury investors get to hold 30-year bonds instead of two-year notes shrank to the narrowest in a week on speculation the U.S. economic recovery is stalling.
The long bonds rose as much as two points as stocks pared gains. Federal Reserve Bank of Philadelphia President Charles Plosser told Bloomberg Radio today that policy makers should have waited to see how the economy performed before pledging on Aug. 9 to hold interest rates at record lows for two years.
"What the curve flattening is telling us is that there is risk capital that is finding its way into the bond market and grabbing whatever yield it can," said Steven Ricchiuto, chief economist in New York at Mizuho Securities USA Inc., one of the 20 primary dealers that trade with the Fed. "It’s the economic scenario. People are not comfortable."

Fisher explains Fed dissent, Texas job picture
By Steve Goldstein, MarketWatch
WASHINGTON (MarketWatch) — The Federal Reserve shouldn't have pledged to keep interest rates at ultralow levels for two years because businesses now have even less incentive to move off the sidelines and start spending and hiring, one of three dissenting central bank presidents argued Wednesday.
Richard Fisher, president of the Dallas Fed, told an audience in Midland, Tex. that the current accommodative policy the Fed employs has done little because businesses are too scared of future government policy, particularly after the debt ceiling debate. By keeping the cost of capital unchanged through the next election, there’s no incentive to invest and expand now, he said.

U.S. Vice President Flies to Beijing and Tokyo,
Replete with Begging Bowl
by John Daly - OilPrice.com
On 2 August extremist Congressional Republicans held a loaded pistol to the USA's triple A bond credit rating, acquired in 1917 in the midst of World War One, and pulled the trigger.
When the smoke cleared, there were back-slaps and high-fives all around as the obstructionists prided themselves on weakening, perhaps fatally, President Obama's re-election hopes for 2012 by presenting themselves as fiscally "responsible."
The world was not knocked off its axis and the U.S. did not enter the "end of days" so fervently wished for by Christian fundamentalists, but the global consequences of the Republicans’ rash act are beginning to emerge, and it's not a pretty sight.

China Threatens to Use 'Financial Weapon' Against America
By: Gordon G. Chang - Pakalert Press
On Monday, People's Daily, China's leading newspaper, stated it was time for Beijing to consider using its "financial weapon" against the United States.
The Communist Party's flagship publication suggested that the Chinese government "directly link" its purchases of US Treasury debt to Taiwan arms sales and "require" ratings agencies to downgrade the United States in order to force up interest paid toChina. China should also "launch limited trade sanctions" against states whose representatives in Congress support Taiwan. "China-US relations will always be constrained by these people and will continue along a roller coaster pattern if China does not beat them until they feel the pain," the paper said.
The context for the stinging piece in the party’s self-described mouthpiece may be proposed arms sales to Taiwan, but the general message is clear: China should use its holdings of American obligations to accomplish its many geopolitical aims. "In fact, China has never wanted to use its holdings of US debt as a weapon," the paper noted. "It is the United States that is forcing it to do so."

China Won't Sell Our Bonds Anytime Soon
BY MICHAEL PETTIS - FinancialSense.com
Is the PBoC going to stop buying USG bonds? Once again we are hearing very worried noises from various sectors about the possibility of a reduction in Chinese purchases of USG bonds. Here is what an article the South China Morning Post said:
China will press ahead with diversification of its US$3.2 trillion in foreign exchange reserves, the State Administration of Foreign Exchange (SAFE) said on Thursday, adding it does not intentionally pursue large-scale foreign currency holdings. Officials have long pledged to broaden the mix of the country’s huge reserves – as much as 70 per cent of which are now in US dollar assets, according to analysts’ estimates – but the process has been gradual.

The Loss of Momentum in the Markets All Too Apparent Now
By Bob Chapman - TheInternationalForecaster.com
August 17 2011: Facing the music of the S&P downgrade, the loss of purchasing power, currencies falling against gold and silver, nobody will admit defeat and purge the system, correction now, rally into the election, what worth our safety, banks yet to recover, Fed knows monetization of the debt keeps the game going, nightmares of inflation of depression.
Since April the market as measured by the Standard & Poor's stock index is off about 18% and momentum has fallen 40%. The recent catalyst for lower prices has been the drop in the debt rating by S&P of US Treasuries. In addition the economy is showing a pronounced slow down, as are many other countries. There is liquidity at major banks and corporations, but it has yet to be employed into the economy. Consumer spending is falling, as are savings and the use of credit has jumped again. Monetary surplus normally is put to work not only in the economy, but also in financial sectors, such as the stock market. This absent normal reaction presently is not present. If the banks and corporations won't lend or invest then it is the function of the Federal Reserve to do so. That means QE 3 is needed not only to provide funds for purchases of Treasury, Agency and toxic debt, but also to spark and maintain a growing economy.

Ron Paul Interview with Judge Napolitano - August 15, 2011

Abolish My State's Income Tax (Please!)
Mises Daily: by Christopher Westley
I have written here about Alabama's tax structure in the past, noting that charges of its regressivity are vastly overstated, compared to other states. Specifically, poverty analyses that overlook the state's relatively lower housing costs, which most of them do, should be ignored. Such analyses are presented by organizations more intent on making partisan points with the overall goal of increasing the state's tax take, on the assumption that higher taxes today lead to higher levels of prosperity tomorrow.
But this just ain't so. If it were, then states with larger government sectors would today be in better shape. Instead, it is precisely those states that are today in the worst fiscal shape. California continues to lose segments of its productive sector to other states with lower tax and regulatory regimes, a trend that will continue as long as its governor promotes tax hikes and the union sector.[1] Then there's Illinois, which is bleeding firms and may even see Caterpillar Inc. shutter its operations in Peoria and relocate to more business-friendly environments.

Secrecy fears over debt super committee
By Charles Riley @CNNMoney
NEW YORK (CNNMoney) -- Will it be the super committee, or the super-secret committee?
The 12-person deficit reduction committee hasn't even started work yet and it's already getting an earful from other lawmakers and outside advocates worried the process will play out behind closed doors.
Tasked with slashing another $1.5 trillion in debt over the next 10 years, the committee was created with no built-in provisions for public meetings, hearings or lobbying disclosures.
The stakes are enormous. Thecommittee is likely to consider more cuts to discretionary spending, as well as limitations to defense spending and health care costs. The tax code and entitlement programs will come under scrutiny.

Home Sales Are Falling: Will Consumers Force a Double Dip?
Mortgage purchase applications plummeted to near their 14-year low last week. Can the economy climb out of its tragic cycle?
By Daniel Indiviglio - TheAtlantic.com
As the bad news continues to pile on, Americans appear to be taking note by closing their wallets. The latest brutal report indicates that home buying demand is likely falling to even lower levels. Mortgage applications for purchases were the weakest in more than a year, according to the Mortgage Bankers Association. In fact, its index last week was second lowest that we've seen since 1997. This period includes the huge drop that sales experienced after the home buyer credit expired last year. Consumers are clearly nervous.
Mortgage Purchase Applications Plummet
Here's the chart to provide a little perspective (the green line represents the index value as of the week ending August 12th):

Health Overhaul to Make Insurers Label Plans Like Cereal Boxes
By Drew Armstrong - Bloomberg.com
Health insurers will have to provide descriptive labels similar to those found on food products under a consumer-information provision in the 2010 health overhaul the U.S. began rolling out today.
The draft rules will make insurers such as Indianapolis- basedWellPoint Inc. (WLP), the largest U.S. health insurer by enrollment, detail coverage costs, deductibles and payments for common services, including delivering a baby. The new plan descriptions will be in the form of an eight-page summary available in March 2012, according to the draft rules.
"We're making it easier for consumers to find the health plan that’s right for them," said Donald Berwick, the head of the U.S. Centers for Medicare and Medicaid Services, on a conference call with reporters. "This will create a more competitive market where insurers are motivated to improve their products."

Reasons to Doubt the Middle Class Can Be Saved
By James Fallows - TheAtlantic.com
For me this is atypical because - like my colleagues in this discussion - I maintain a healthy and admiring respect for the American system's overall ability to adapt and innovate. That has been true over the centuries, most notably as immigrant groups that seemed to be "permanently" ineligible for full participation in the American system have one after another been absorbed: first Germans in the mid-19th century, then Irish later in that century, then Southern and Eastern Europeans of all ethnicities and "races" (including Jews) before World War I, and the broad sample of the world's population--Vietnamese, Persians, Cubans, Mexicans, Koreans, Russians--in the past half-century. The process of assimilation always causes friction, it's never complete, and it always works alongside the lasting consequences of institutionalized inequality, e.g. from the centuries of Africa slavery and another hundred years of anti-black segregation. But the integration of any given group has almost always been more successful than people would have predicted about that group 20 years earlier.

Social Degeneration: Part II
By Thomas Sowell - PatriotPost.us
Although much of the media have their antennae out to pick up anything that might be construed as racism against blacks, they resolutely ignore even the most blatant racism by blacks against others.
That includes a pattern of violent attacks on whites in public places in Chicago, Denver, New York, Milwaukee, Philadelphia, Los Angeles and Kansas City, as well as blacks in schools beating up Asian classmates -- for years -- in New York and Philadelphia.
These attacks have been accompanied by explicitly racist statements by the attackers, so it is not a question of having to figure out what the motivation is. There has also been rioting and looting by these young hoodlums.

Unemployment Up In August
24/7 Wall St
New data from Gallup shows what economists might have expected. Unemployment has risen in the US recently, as the economy has slowed or perhaps even gone into reverse. The trend is confirms by slack demand in the housing market where both housing starts and permits are near all time lows.
"Unemployment, as measured by Gallup without seasonal adjustment, is 9.0% in mid-August — compared with 8.8% at the end of July and 9.1% in mid-August 2010," the research firm reported.
The old, young, and under-educated have gotten the worst of it.

The Power to Mandate Health Insurance
Is the Power to Mandate Almost Anything
By Jacob Sullum - PatriotPost.us
Opponents of the federal law requiring Americans to buy government-approved medical coverage face a daunting challenge. Because the U.S. Supreme Court has treated the power to "regulate Commerce ... among the several States" like Silly Putty since the New Deal, explaining why it cannot be stretched to cover the health insurance mandate is harder than you might think.
But as last Friday's decision by the U.S. Court of Appeals for the 11th Circuit illustrated, the law's defenders have a corresponding problem. Because a limitless "commerce clause" contradicts a fundamental constitutional principle, they have to justify the mandate in a way that does not also justify every other conceivable congressional dictate regarding how we spend our money. So far, they have been unable to do so, which is the main reason the appeals court rejected this "wholly novel and potentially unbounded assertion of congressional authority."

Social Security wrongly declares 14,000 people dead each year
By Blake Ellis - CNN.com
NEW YORK (CNNMoney) -- More Americans are being erroneously killed off by the Social Security Administration every day.
Of the approximately 2.8 million death reports the Social Security Administration receives per year, about 14,000 -- or one in every 200 deaths -- are incorrectly entered into its Death Master File, which contains the Social Security numbers, names, birth dates, death dates, zip codes and last-known residences of more than 87 million deceased Americans. That averages out to 38 life-altering mistakes a day.
While these errors occur online, in the depths of the administration's database, they have a very real impact on the people who have effectively been declared dead.

Google's "highly proprietary source code": unfair edge for Motorola?
By Ed Bott - ZDNet.com
Summary: Last week, Google filed a motion for sanctions against Microsoft over access to "highly proprietary" Android source code. The company said it doesn't even share this code with its partners, including Motorola. But what happens to that code when Google owns Motorola?
Licensing operating systems to hardware partners is a tricky business. Google's announcement this week that it plans to buy Motorola Mobility is a tacit admission that the partnership thing just isn't working out for them. Android might be selling lots of phones (and a few tablets too), but the ecosystem is a mess, the Android reputation isn’t exactly stellar, and Google isn't making nearly enough revenue per phone.
In "Android isn't free," Farhad Manjoo of Slate predicts that "this deal will represent a turning point in how Google operates Android."

AT&T buying T-Mobile may spark new rules
The AT&T acquisition of T-Mobile may cause regulators to create new mobile service providers by combining smaller competitors, says Yankee Group.
By Bloomberg News - CrainsNewYork.com
(Bloomberg) - AT&T Inc.'s pursuit of U.S. government approval for its proposed $39 billion purchase of T-Mobile USA Inc. may lead to more regulation for the telecommunications industry.
If the Federal Communications Commission and the Justice Department sign off on the transaction, they could require AT&T and Verizon Wireless to keep prices from rising, said Carl Howe, an analyst at Yankee Group, a Boston-based research firm.
Regulators also might create a new mobile service provider by combining smaller competitors or requiring the combined AT&T/T-Mobile to sell part of its customer base to a mobile virtual network operator such as TracFone Wireless Inc. or Tru, according to a Yankee Group report.

Jon Stewart: Why is Everyone Still Ignoring Ron Paul?
By ERIK HAYDEN - The Atlantic Wire
In Iowa's Ames Straw Poll this weekend, Michele Bachmann bested 2nd place Ron Paul by less than 200 votes. And yet, in the immediate spin cycle at least, pundits talked about Rick Perry, Mitt Romney and Bachmann. Paul seemed to be, as his supporters always point out, invisible. Last night on The Daily Show, Jon Stewart became the latest to weigh in on the habit of ignoring Paul. After playing a few highlight reels showing anchors going out of their way not to mention the libertarian firebrand, he incredulously asks: "How did libertarian Ron Paul become the 13th floor in a hotel?"

Jon Stewart Defends Ron Paul From Ridiculous Media Coverup

Unions are getting desperate,... and vicious
Non-Union Employer Shot, Suspect Etched 'Scab' On Vehicle
By Eric Scheiner
(CNSNews.com) - The Monroe County Sheriff's Department in Michigan are working to solve a shooting, after a man painting the word '‘scab' on a non-union employer's vehicle took a shot at it's owner.
WTOL-TV reports that John King, the owner of King Electrical Services was shot in the arm last week when he surprised a man trying to slash the tires on the truck at his home. The word "scab" was also scrawled on the side.

JetBlue pilots to remain non-union
CrainsNewYork.com
For the second time in three years, JetBlue Airways Corp.'s pilots have elected to remain union-free.
(AP) - Pilots at JetBlue Airways Corp. are choosing once again to go without union representation.
It is the second time in three years that pilots at the Queens-based airline have tried and failed to unionize. The latest attempt was driven by the Air Line Pilots Association, or ALPA, which represents more than 53,000 pilots at 39 U.S. and Canadian airlines.
JetBlue, one of the only U.S. airlines that is entirely nonunion, said Tuesday that 58% of just over 2,000 valid votes were cast against bringing in some form of representation. Some 42% of votes were cast in favor of a union.

Target fires pro-union employee
About seven weeks after failing to persuade her colleagues to join a union, a Target worker is terminated from her $8-an-hour job. The union will seek to reverse her dismissal.
By Daniel Massey - CrainsNewYork.com
She was the face of the failed campaign to make a Valley Stream, L.I., store the first unionized Target in the country. Again and again she told media outlets she was struggling to raise her daughter on what she earned as a Target sales floor team member.
Now, Tashawna Green, 21, of Jamaica, Queens, no longer has her $8-per-hour job. A Target supervisor fired her earlier this month, seven weeks after workers voted not to join United Food and Commercial Workers Local 1500.

Russia's Arctic Oil Grab
by Al Fin - OilPrice.com
Within the next year, the Kremlin is expected to make its claim to the United Nations in a bold move to annex about 380,000 square miles of the internationally owned Arctic to Russian control. At stake is an estimated one-quarter of all the world's untapped hydrocarbon reserves, abundant fisheries, and a freshly opened route that will cut nearly a third off the shipping time from Asia to Europe.
The global Arctic scramble kicked off in 2007 when Russian explorer Artur Chilingarov planted his country's flag beneath the North Pole. "The Arctic is Russian," he said. "Now we must prove the North Pole is an extension of the Russian landmass."

The Dawning of a Global Water Crisis
BY RUSS WINTER - FinancialSense.com
Good quality water sources in the right locations are the key to basic civilization, let alone even minimal economic growth. Like hydrocarbons, water is now the weak link to the maintenance of 7 billion people on the planet. Once abundant aquifers worldwide are being rapidly depleted, and resolving this is expensive and requires growth controls and sacrifice. Growth at any price strategies such as used in China completely fracture in this kind of environment. There is plenty to write on this topic but I will warm up with a little on two trainwrecks: North China and the American Southwest.

Cracked Fukushima: Radioactive steam escapes danger zone

True Cost of Afghan, Iraq Wars is Anyone's Guess
Nancy A. Youssef - NationofChange.org
WASHINGTON — When congressional cost-cutters meet later this year to decide on trimming the federal budget, the wars in Afghanistan and Iraq could represent juicy targets. But how much do the wars actually cost the U.S. taxpayer?
Nobody really knows.
Yes, Congress has allotted $1.3 trillion for war spending through fiscal year 2011 just to the Defense Department. There are long Pentagon spreadsheets that outline how much of that was spent on personnel, transportation, fuel and other costs. In a recent speech, President Barack Obama assigned the wars a $1 trillion price tag.
But all those numbers are incomplete. Besides what Congress appropriated, the Pentagon spent an additional unknown amount from its $5.2 trillion base budget over that same period. According to a recent Brown University study, the wars and their ripple effects have cost the United States $3.7 trillion, or more than $12,000 per American.

Korean peninsula may explode any moment
Pravda.ru
South Korea and the United States launched the 10-day Ulchi Freedom Guardian (UFG) military drills on August 16. Tens of thousands of US and South Korean troops will rehearse the destruction of nuclear weapons of North Korea. A reaction from the North of the Korean peninsula followed shortly. Pyongyang officials stated that the Korean peninsula had never been that close to war as it is now since 1953.
The current exercise will last until August 26 with 56,000 South Korean and 30,000 US troops participating. The latter will arrive from the USA and from the bases in the Pacific region. Officials from seven countries having their representatives in the command of the UN forces on the Korean peninsula will be attending the drills.

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Wednesday 08.17.2011

Taxed Into Oblivion
TheEconomicCollapseBlog.com
In the United States today, we are being taxed into oblivion, yet it is being done so stealthily that most Americans don't even realize what is happening. Most people are fixated on federal income tax rates, but the federal income tax is only one of the dozens of different taxes that each of us pay each year. The politicians have learned that people get really upset when income tax rates are raised, so they have found hundreds of other ways to raise taxes on us. What most taxpayers in the United States today are facing is "death by a thousand cuts". When you add up all forms of taxation from all levels of government, approximately 40 percent of all the income in the country is taken in as taxes by government. Large numbers of Americans end up paying well over 50 percent of their income in taxes, and many of them don't even realize that it is happening. We truly are being taxed into oblivion, and yet the politicians just keep coming back for more.

Gold and the SNB
Submitted by Bruce Krasting - ZeroHedge.com
Gold has a nice bid so far today. There are so many reasons to own gold. I think a factor in today’s price action is the Swiss National Bank. This is a slow motion breaking story. There should be a resolution on central issues the SNB is now pondering in the next 24 hours. Depending on the out come it would a) justify the gold pop today and b) set the stage for another big leg up in AU.
All of the Swiss newspapers have the same story. The SNB is "actively" contemplating a currency peg against the Euro. I find this information to be bizarre. Over many years of watching the Franc and the SNB I have never seen anything like this before.

Sarkozy and Merkel call for
'true economic government' to save eurozone
Plan for European economic government with single leader, drawn up after mini-summit, cautiously welcomed by UK
By Polly Curtis, Whitehall correspondent - Guardian.co.uk
France and Germany have set out plans to create the first "true European economic government" headed by a single appointed leader, as part of major moves to synchronise tax and spending to save the failing eurozone.
The French president, Nicolas Sarkozy, and German chancellor, Angela Merkel, announced the dramatic proposals after a two-hour mini-summit. They also called for the imposition of tighter restrictions on member country's deficits and announced a synchronising of the tax policies of their own two countries. Sarkozy has also secured the support of Merkel for a Tobin tax – a financial tax on all international transactions – to raise funds to ease the crisis engulfing the European economy

European leaders call for action as economy hits wall
By Ben Rooney @CNNMoney
NEW YORK (CNNMoney) -- The leaders of France and Germany on Tuesday called for more integrated economic policies to help stabilize the euro and restore growth across the European Union.
But the comments disappointed many on Wall Street who were hoping the leaders would announce new plans to contain the sovereign debt crisis roiling global markets.
French President Nicolas Sarkozy and German Chancellor Angela Merkel met in Paris to discuss, among other things, a proposed "golden rule" to require all 17 members of the currency union to commit to balanced budgets.
The goal, they said, is to promote greater "convergence" among the policies of the core members of the EU, such as France and Germany, with those of the more troubled nations on the union's periphery.

Will Merkel and Sarkozy Save Us?
Submitted by ilene - ZeroHedge.com
Yesterday, Art Cashin sounded like he was reading my Morning Alert to CNBC viewers saying: "Everybody's sitting on their hands waiting for the Merkel-Sarkozy meeting and they may have their hopes a little too high." Cashin sees parallels between the current market and the 1987 crash, and he even closed with: "you want to be very careful here." You also want to be careful about the retail sales and consumer data we're seeing. As David Fry notes:
Consumer Metrics Institute, a painstakingly reliable organization reported some interesting data Monday. First they attributed the rise in consumer credit primarily to Student Loans. Further, on a "back of the envelope" estimate they suggest roughly $100 billion of consumer stimulus is in the economy from "rent free" mortgagees'. So with many homes in default banks aren't pursuing foreclosure as a remedy thus providing those folks with disposable income. It's that pesky Moral Hazard thing again. It's unfair to all paying their mortgages faithfully knowing their neighbor and others aren't. For those living rent free it’s more rationalized cash for iPads and other stuff.

Angela Merkel and Nicolas Sarkozy
fail to calm markets despite eurozone concord
Germany and France looked to have failed again to calm feverish financial markets despite unveiling a raft of economic agreements at a summit in Paris.
By Louise Armitstead - Telegraph.co.uk
Traders reacted with exasperation as Angela Merkel and Nicolas Sarkozy repeated their "absolute will to defend the euro" and "shore up investor confidence" yet refused to back the shattered currency with eurobonds or a bigger bail-out fund. The failure to address the two measures left many traders ruing what they see as a lack of political leadership.
Edward Meir from MF Global in New York said: "It doesn't look like the two biggest items were seriously discussed -- the potential for a eurobond and the size of the stabilization/bailout fund. At €450bn [the European Financial Stability Facility] could easily be wiped out if one of the larger countries gets into trouble."

Collapse in German growth will add to euro rebellion
By Jeremy Warner - Telegraph.co.uk
News that Germany recorded only marginal, 0.1pc, GDP growth in the second quarter is not just an economic event; it is a political one too, for the German economic "miracle", with output rebounding from its post Lehman low far more rapidly than any other advanced economy, has been about the only thing that has kept Germans onside on measures to support the euro during the last year and a half of turbulence.
Indeed, in some respects, the crisis has seemed a positive boon for German industry, for it has meant that its exports have enjoyed a far more competitive exchange rate than would have been the case had Germany still had the Deutsche Mark. Trade has boomed accordingly.
But as the world economy slows, even that advantage is beginning to fade. Now of course there are lots of anomolous reasons why the German economy would have slowed in the second quarter, not least the after effects of the Great East Japan Earthquake, which because of the disruptions it caused in the global supply chain would have hurt the German economy, with its high dependence on manufacturing industry, particularly badly.

EMU crisis deepens as slump reaches Europe's AAA core
The German economy slowed drastically over the early summer and may be on the cusp of a double-dip recession, dashing hopes that Europe's industrial engine would eventually lift EMU's southern bloc out of slump.
By Ambrose Evans-Pritchard - Telegraph.co.uk
Growth in both Germany and The Netherlands fell to 0.1pc in the second quarter as exports faltered. France reported earlier this week that growth in its economy had sputtered out altogether. German Chancellor Angela Merkel insisted the economy was doing fine and needs no extra support. "I think we're on the right track," she said.
The sudden downturn replicates the pattern seen before the Lehman Brothers crisis in 2008 and threatens to play havoc with the debt dynamics of vulnerable countries. It also marks ominous new turn in the eurozone crisis.

Europe's Fiscal Overkill
By Ambrose Evans-Pritchard - Telegraph.co.uk
This from the excellent Christine Lagarde, the IMF’s new chief.
Her warning that fiscal tightening in a string of countries is now going beyond the therapeutic dose entirely reflects my own view. She writes:
For the advanced economies, there is an unmistakable need to restore fiscal sustainability through credible consolidation plans.
At the same time we know that slamming on the brakes too quickly will hurt the recovery and worsen job prospects. So fiscal adjustment must resolve the conundrum of being neither too fast nor too slow.

Thinking the unthinkable: Sell U.S. Treasuries
AP - JapanTimes.com
The idea that Japan would ever dump the $900 billion it holds in U.S. Treasuries, the second-largest foreign ownership after China, has long been just that — an idea never seriously entertained.
The long-standing argument paints a horrific picture of the consequences: The dollar would crash, world markets would be sent into a tailspin and the postwar military and political alliance between the U.S. and Japan would be shaken.
But after Washington's credit rating was downgraded for the first time ever earlier this month — from AAA to AA+ by Standard & Poor's — some daring advocates are voicing that taboo idea: Why not sell Treasuries?

Is gold overvalued? Will gold go parabolic now?
CommodityOnline.com
All major currencies have fallen against Gold today with the euro down 1% against gold on nervousness ahead of the Franco German summit. Gold is trading at USD 1,776.70, EUR 1,235.10, GBP 1,084.10, CHF 1,389.90 per ounce and 136,450 JPY/oz. Gold’s London AM fix this morning was USD 1,779.00, EUR 1,236.18, GBP 1,086.81 per ounce.
U.K. inflation accelerated more than economists forecast in July, as the cost of food, clothes, footwear, housing maintenance and rent increased. Negative real interest rates are getting worse as the BOE has kept interest rates at a record low of 0.5%.

From $35 to $1816: Gold after the end of Bretton Woods
By Deepak Rangan - CommodityOnline.com
40 years after US abolished the Gold standard, gold hits all time high.
On August 15 1971 when President Richard Nixon officially ended the Bretton Woods International Monetary System in US, gold was trading around $35. Fast forward 40 years later and gold is now trading at $1760, a gain of over 5,000%! And as the financial turmoil continues to cause havoc among markets worldwide, gold has once again come to the forefront as a potential medium of exchange.

Gold Daily and Silver Weekly Charts
JESSE'S CAFÉ AMÉRICAIN
Silver is still struggling, but gold looks like it is getting ready to launch higher, break and run to at least 1810.
Let's see if it can do it. That will scare Benny and his Central Banking cronies.
If it does it may unleash silver, which is like a rocket when it breaks free. [see charts]

Fitch reaffirms top U.S. credit rating
By Jeanne Sahadi @CNNMoney
NEW YORK (CNNMoney) -- Fitch Ratings on Tuesday reaffirmed the United States' AAA credit rating.
The move comes less than two weeks after Standard & Poor's downgraded the United States' long-term debt to AA+.
"[T]he key pillars of US's exceptional creditworthiness remains intact: its pivotal role in the global financial system and the flexible, diversified and wealthy economy that provides its revenue base. Monetary and exchange rate flexibility further enhances the capacity of the economy to absorb and adjust to 'shocks,' " Fitch said in a statement.
Fitch did add a caveat, however. It would likely revise its outlook on the U.S. rating to negative from stable if the congressional committee charged with proposing at least $1.2 trillion in deficit reduction fails to reach agreement, or if the economic recovery proves weaker than expected. That means there would be a greater than 50% chance that Fitch would downgrade the country within two years.

U.S. Banks Won't Fail. They'll Fizzle
Financials look likely to survive, but that doesn't make their shares a good deal.
By JACK HOUGH - SmartMoney.com
As U.S. stocks turned volatile this month, big bank shares got especially wild. The Dow Jones U.S. Financials Index plunged 17% in August through the middle of last week before rebounding 8% by the close of trading Monday. During the same stretch, the Dow Jones Industrial Average lost 12% and gained 7%.
The bounce suggests investors don't expect a 2008-style collapse of the financial system. On that point, there's reason for optimism, but stability alone doesn't make the sector a good deal. Banks face two longer-term risks. The first is that they won't be able to grow. The second is that their importance within the economy may shrink.

The Fall of the Midwest Economic Model
In 1970, the future seemed to belong to Michigan's example of big companies and big unions. Not anymore.
By MICHAEL BARONE - WSJ.com
President Obama has kicked off a three-day bus tour of Minnesota, Iowa and Illinois, where the corn is high and at least some factories are spewing smoke. He's holding town-hall meetings on the economy, putting the unemployed back to work and "growing wages for everyone." He won these Midwestern states handily in 2008, but he's not taking anything for granted these days. The Midwest is the region with the largest number of target states. The president's latest Gallup job approval there is 39%, the same as the nation as a whole.
To understand the political economy of the Midwest, it helps to put it in historic perspective. Originally the Midwest's economy was built on its farms, then later on its factories. The long farm-to-factory migration lasted from roughly 1890 to 1970. At the end of that period, when I was working on the first edition of "The Almanac of American Politics," it seemed there were two models for the U.S. future. One was the Michigan model, which prevailed in the industrial Midwest and the factory towns of the Great Plains. The other was the Texas model, which prevailed in most of the South and Southwest.

From the good old boys at the CFR...
Quarterly Update: Foreign Ownership of U.S. Assets
Neil Bouhan, Analyst, International Economics nbouhan@cfr.org
Paul Swartz, Analyst, International Economics pswartz@cfr.org
The recent downgrading of U.S. government debt by Standard & Poor's triggered Chinese mockery of "the debt- ridden Uncle Sam" and raised questions about America's continued ability to attract capital inflows. As the following charts show, foreign ownership of U.S. assets has increased significantly since 1945, growing especially quickly over the past two decades. This growth is the result of a general increase in cross-border investment, with rising foreign ownership of U.S. assets being almost balanced by rising U.S. ownership of assets abroad. Although the Chinese government is a significant U.S. creditor, capital flows into the United States draw some resilience from their breadth, both in terms of the sources of international financing and in the U.S. assets that foreigners purchase.
Things to look for in these graphs:

• Since 2002, the increase in foreign ownership of Treasury bonds has been driven almost entirely by government buyers. Until the 2007–2009 crisis, the same was true for bonds issued by government- sponsored enterprises (agencies). In the postcrisis recovery, foreign private holdings of agencies are rising, while foreign government holdings continue to fall.
• From 2005 to early 2007, foreign governments’ Treasury purchases were driven by China’s purchases. However, China became less significant during the crisis as other investors crowded in. Today, China's purchases have remained elevated while the rest of the world is purchasing less than during the crisis peak.
• The Net International Investment Position (NIIP), meaning foreigners’ holdings of U.S. assets minus U.S. holdings of foreign assets, has remained remarkably resilient, even though the large U.S. current account deficit reflects a steady flow of net foreign purchases of U.S. assets. This trend is likely to persist if the dollar depreciates, since dollar depreciation results in gains in the dollar value of U.S. holdings of foreign assets.
• The U.S. portfolio of foreign assets is relatively risky, with a significant share of holdings in equities that generate gains during a boom but suffer losses when crisis strikes. By contrast, foreign holdings of U.S. assets are less volatile because of the concentration in treasuries. Following a sharp decline in 2008, the U.S. net international investment position recovered in 2009 due to strong equity market performance.

America's Chaotic Fall — Germany's Sudden Rise
Three centuries of Anglo-Saxon global dominance are ending with dramatic speed. In the meantime, Germany is back and calling the tune — not just in Europe, but globally!
by Ron Fraser - theTrumpet.com
Unless one’s head is stuck in the sand of self-deceit, it surely must be glaringly obvious from recent events that the British and American peoples are in extremely rapid descent into chaos.
The Second World War finished with Britain's dramatic, sudden loss of imperial power with the nation devolving over the following half-century into a second-rate island welfare state. The end results of the British welfare state were glaringly displayed in the graphic images of British cities burning last week.
Following World War ii, the United States quickly filled the global leadership vacuum created by the collapse of British power.

Argentina's Illegal Antics
By Jaime Daremblum - The American Spectator.org
When the financial crisis first hit, the U.S. government bailed out major banks in part so the banks' foreign government clients would not suffer huge losses on their U.S. loan exposures. So where are U.S. policymakers when a foreign government bilks Americans out of billions of dollars? It's been nearly a decade since Argentina perpetrated the largest sovereign default in history, and the South American country still owes roughly $15 billion to international creditors, including $2 billion to New York taxpayers and to U.S. investors ranging from university endowments to pension funds.
Rather than make good on its outstanding defaulted bonds, the Argentine government has been sheltering some $45 billion worth of liquid foreign reserves (86% of its total supply) in the Basel-based Bank of International Settlements (BIS), which is immune from most legal challenges. Earlier this month, two bondholders reportedly lodged a formal complaint with the Swiss government, saying that Buenos Aires has used the BIS to engage in money laundering.

How the Economic Stimulus Racket Works
Mises Daily: by Charlie Virgo
Have you ever noticed that the failed policies of politicians never really seem to be brought to light? How is it that despite their obvious shortcomings, the same policies are implemented time and time again? These interventions rarely have the promised effects, but they are somehow still deemed a success. In his book The Vision of the Anointed, Thomas Sowell explains the process by which politicians and their supporters are able to either create or take advantage of crises in order to increase their involvement in society. I thought it would be worthwhile to review this pattern as it applies to a more recent issue: the stimulus and bailout packages.
Starting with President Bush, and continuing into President Obama's term, the US government has paid out more than $11 trillion in stimulus money. Remarkably, there are many who believe that amount still wasn't sufficient. This article will show that both presidents believed the additional government intervention would solve our economic problems, not realizing that it was exactly that type of thinking that had led to the problems in the first place. The stimulus package has already passed through Dr. Sowell's pattern of failure, making it an excellent example for review. In even more current issues, such as the debt-ceiling increase, we are already beginning to see the early phases of the pattern. It is important that we understand this pattern so that we can identify and oppose measures that are contrary to the principles of true economic progress.

Disapproval of Congress Hits All Time High of 84%
Americans are more upset with political leadership than ever before -- By Paul Joseph Watson - Infowars.com
Disapproval of Congress has hit an all time record high of 84% according to a Gallup poll released today, barely a week after pollster Pat Caddell warned that a dramatic loss of confidence in the country's leadership meant Americans were now "pre-revolutionary".
"Americans have usually not held Congress in high regard, but currently they have a more negative view of the institution than any other time Gallup has measured," states the report, noting that the disapproval figure stood at 77% last time Americans were polled on the issue in early July.
Approval of Congress, which stands at just 6 per cent according to Rasmussen, is measured by Gallup at 13 per cent, tying the all time historic low reached in December 2010, but the disapproval figure of 84 per cent is one percentage point higher than last December’s figure.

Tax Hikes Not the Solution to Social Security Solvency,
Former CBO Chief Says
By Fred Lucas
Washington (CNSNews.com) – Social Security, which turned 76 this week, cannot be salvaged through increasing taxes, according to a former director of the Congressional Budget Office.
Past attempts to reform Social Security to keep the federal retirement program solvent for future generations – such as a proposal by President George W. Bush in 2005 – failed to gain enough political support. The key to gaining the necessary support for future reform proposals would be making the case for future generations, former CBO Director Douglas Holtz-Eakin said.

U.S. places $40 million chicken order
By Parija Kavilanz @CNNMoney
NEW YORK (CNNMoney) -- The United States is stepping in to help bail out another American industry -- chicken farmers and meat processors.
The nation's chicken industry is having a difficult year. Chicken producers are struggling with higher costs of running their business at the same time that consumers are buying less meat.
This has created a glut of chicken products in the market.
Total chicken production in the first half of 2011 rose 4% compared to the same period a year ago, while demand for chicken has cooled, according to the National Chicken Council.

Medicare's Next Patient: The Federal Budget Deficit
By Bruce Watson - DailyFinance.com
When it comes to cutting budgets, fiscal conservatives often drag out easy villains likepeanut subsidiesandbridges to nowhere. But while those obvious targets are great for scoring political points, they represent a tiny fraction of the overall deficit. To really slash costs, the government will need to go after at least one of its big three expenses: Social Security, the military or Medicare. As the recent debt-ceiling negotiations demonstrated, it isn't hard to see which program is the most vulnerable.
With two wars rumbling along and threats dotting the horizon from North Korea to Somalia, chances are that the military's budget won't be dropping much any time soon. As forSocial Security,former President George W. Bush's disastrous 2005 push for privatization has ensured that the third rail of American politics will remain mostly untouched, at least for the time being.

The Economic Delusions of the Political Class
Mises Daily: by William L. Anderson
The New York Times recently ran an "analysis" article entitled, "Debt Problem's Sure Cure: Economic Growth." This is something that falls into the category of "Gee, why didn't I think of that?" All you need is growth, so let's go get us some growth! That will take care of everything!
Journalist Catherine Rampell asserts,
There is, in theory, a happy solution to our debt troubles. It's called economic growth. No need to raise taxes or cut programs. Just get the economy growing the way it used to.
Rampell admits that this is a dicey proposition. She holds to the belief that if we actually cut back on government spending and stop these "stimulus" projects, there will be a short-term "shock" that will drive down the economy. Of course, the short-term "shock" then will go long-term, so if we cut spending now, we will drive ourselves back into a deeper recession.

Obama's Housing Policy Reform May Spare Fannie and Freddie
Anyone who hoped that taxpayers might be shielded from future losses will be sorely disappointed
By Daniel Indiviglio - TheAtlantic.com
The government just can't seem to let go of Fannie and Freddie. Huge accounting scandals didn't deaden their impact. Gigantic taxpayer losses, at $170 billion and counting, haven't taught Washington its lesson either. According to a new report, the Obama administration is considering keeping the firms around, though their mission might change a little. Unfortunately, the possible role that the article's sources describe doesn't sound like very substantial housing finance policy reform.
Here's Zachary A. Goldfarb of the Washington Post with the scoop from his White House sources:
President Obama has directed a small team of advisers to develop a proposal that would keep the government playing a major role in the nation's mortgage market, extending a federal loan subsidy for most home buyers, according to people familiar with the matter.

Buying is cheaper than renting in most U.S. cities
By Les Christie - Money.CNN.com
NEW YORK (CNNMoney) -- Home prices have taken such a beating and demand for rental units has increased so much that it's now cheaper to buy a two-bedroom home than to rent one in most major U.S. cities.
According to real estate web site Trulia, buying was cheaper than renting in 74% of the country's 50 largest cities in July. In just 12% of the cities, including New York, Seattle and San Francisco, renting was cheaper. In the remaining 14% of cities, renting was less expensive but close to the cost of buying.

New home construction slumps in July
By Annalyn Censky @CNNMoney
NEW YORK (CNNMoney) -- After showing some strength just a month before, new home construction slumped in July, according to two key measures released by the government Tuesday.
Housing starts, the number of new homes being built, fell 1.5% to an annual rate of 604,000 units during the month, the Commerce Department said.
The government report also showed permits to build new homes, a proxy of future construction activity, fell 3.2% during the month to an annual rate of 597,000 units.
The declines come after both housing measures ticked up more than expected in June.

Record Number Of People Say They Are Paying More
For Groceries Now Than Ever Before
Submitted by Tyler Durden - ZeroHedge.com
Somehow even as all that deflation in home prices continues, like perfectly joined communicating vessels, countervailing inflation continues seeping into pretty much every other aspect of society. But don't take our word for it, (or even gold's, which is just under all time record notional highs): according to Rasmussen, "Americans nationwide continue to lose faith in the Federal Reserve Board to keep inflation under control, with the number who say they are paying more for groceries now at an all-time high." Specifically, "93% of adults report paying more for groceries now than they did a year ago, the highest finding to date. Only four percent (4%) say they’re not paying more for groceries now compared to a year ago. Prior to the latest results, the number that said they are paying more for groceries ranged from low of 75% in April 2010 to a high of 91% in May of this year." However, since many of these same adults are transferring intangible "savings" from their non-payable mortgage check courtesy of a home market that has now ground to a halt for over 6 months, aka squatters rent, to pay for staples, few really mind. They just like to bitch and moan about it because it means fewer Apps downloaded for the iPad.

Social Degeneration
By Thomas Sowell - PatriotPost.us
Someone at long last has had the courage to tell the plain, honest truth about race.
After mobs of young blacks rampaged through Philadelphia committing violence -- as similar mobs have rampaged through Chicago, Denver, Milwaukee and other places -- Philadelphia's black mayor, Michael A. Nutter, ordered a police crackdown and lashed out at the whole lifestyle of those who did such things.
"Pull up your pants and buy a belt 'cause no one wants to see your underwear or the crack of your butt," he said. "If you walk into somebody's office with your hair uncombed and a pick in the back, and your shoes untied, and your pants half down, tattoos up and down your arms and on your neck, and you wonder why somebody won't hire you? They don't hire you 'cause you look like you're crazy," the mayor said. He added: "You have damaged your own race."

NAOMI KLEIN ON RIOTS AND RESISTANCE
Truthdig.com
Britain's riots were not political, we are assured, and looting is simply un-British, but "Shock Doctrine" author Naomi Klein takes a different view: From Iraq to Argentina, when corrupt elites pass the bill to the struggling masses, civil unrest is to be expected.
In the U.K., bank bailouts + austerity package = one pissed-off lower class. —PZS
Naomi Klein in The Nation:
But England is not Latin America, and its riots are not political, or so we keep hearing. They are just about lawless kids taking advantage of a situation to take what isn't theirs. And British society, Cameron tells us, abhors that kind of behavior.

Flash Mob Epidemic
EndOfTheAmericanDream.com
Flash mobs used to be so much fun. A group of people would arrange to meet in a public place at a particular time and would perform a song or a dance number or some other form of entertainment very suddenly and without warning. Well, the term "flash mob" is rapidly coming to mean something else now. All over the country, young people are using social media and other forms of communication to coordinate shocking large scale crimes. At first there were just a few isolated "mob robberies" around the country, but now we have a full-fledged flash mob epidemic on our hands. Sometimes these flash mobs are involved in "mass shoplifting" events, and in other cases flash mobs are just committing random acts of violence. But it is a very disturbing sign for our nation that all over the country we have large groups of young people that are banding together to commit very serious crimes. This is something that is really unprecedented in modern U.S. history, and it is yet another indication that our society is starting to fall apart.

Laundry Detergent: A Socialist Failure
Mises Daily: by Patrick Barron
.... The elimination of private property by the socialist state makes economic calculation impossible; thus, socialism in its pure form could not solve the ever-present problem of scarcity. The directors of a socialist state would not know what to produce, how to produce it, how much to produce, etc. Only free-market capitalism can solve these problems.
The main benefit of having private-property rights is being able to make entrepreneurial decisions. Those who make good decisions prosper and are granted control of more resources. The opposite happens with entrepreneurial failures. So capitalist economies grow from the accumulation of capital, and socialist economies consume capital until they collapse.

The Murdoch coverup...
Phone hacking: News of the World reporter's letter reveals cover-up
Disgraced royal correspondent Clive Goodman's letter says phone hacking was 'widely discussed' at NoW meetings
By Nick Davies - Guardian.co.uk
Rupert Murdoch, James Murdoch and their former editor Andy Coulson all face embarrassing new allegations of dishonesty and cover-up after the publication of an explosive letter written by the News of the World's disgraced royal correspondent, Clive Goodman.
In the letter, which was written four years ago but published only on Tuesday, Goodman claims that phone hacking was "widely discussed" at editorial meetings at the paper until Coulson himself banned further references to it; that Coulson offered to let him keep his job if he agreed not to implicate the paper in hacking when he came to court; and that his own hacking was carried out with "the full knowledge and support" of other senior journalists, whom he named.

Putin sets sights on Eurasian economic union
By Neil Buckley - FT.com
Twenty years after the Soviet Union collapsed, Vladimir Putin, the Russian prime minister, may not, as is sometimes alleged, be trying to recreate it. But he is pursuing a different project – to build a "quasi-European Union" out of former Soviet states.
A customs union he launched a year ago between Russia, Belarus and Kazakhstan has already removed tariffs and customs controls along the three states' internal borders.
Come January this is due to expand into a "common economic space", ensuring free movement of goods, services and capital across a single market of 165m people – 60 per cent of the former Soviet population.

No, Mr. Krugman … War is NOT Good for the Economy
Washington's Blog
Military Keynesianism Gone Haywire: Paul Krugman Pines For World War ... Based On Ginned-Up Reasons
As I have repeatedly documented, influential Americans are lobbying for war in order to save the American economy - what is often called "military Keynesianism".
For the first couple of years that I wrote on this topic, commenters more or less said, "That's crazy, no one is calling for war to stimulate the economy".
When allegations surfaced that Rand Corporation was lobbying the Pentagon to start a war to save the economy, Washington Post hack David Broder started promoting war as an economic panacea, and former Goldman Sachs analyst Charles Nenner and economist Marc Faber started predicting a major war, people started paying more attention.

Libyan rebels claim they will topple Gaddafi by the end of August
Gaddafi regime officials were in talks with a special UN envoy on Tuesday night as rebels claimed they would take Tripoli by the end of the month and the US said the dictator's "days are numbered". -- By Richard Spencer - Telegraph.co.uk
Abdel-Elah al-Khatib, the former Jordanian foreign minister appointed by the United Nations to try to negotiate an end to the conflict, said he was meeting representatives of both sides of the Libyan conflict in Tunisia.
The rebel leaders' Transitional National Council denied that its representatives were involved, but no such claim came from the Gaddafi regime.
The rebels now believe they have no need to offer concessions on their demand for Col Gaddafi to leave Libya or surrender, after cutting off his supply lines in the last four days.

Syria ignores protests over siege of Latakia
Assad regime continues attack on city amid calls from Turkey and regional states for halt to shelling and withdrawal of forces
By Nour Ali and Martin Chulov in Beirut - Guardian.co.uk,
The Syrian government siege of the port city of Latakia has continued for a fourth day, despite demands from regional states that Damascus stop shelling civilian areas and withdraw its forces from the country's towns and cities.
The violence has drawn condemnation from neighbouring Turkey, which on Monday gave the Syrian president, Bashar al-Assad, what amounted to an ultimatum to stand down his military from Latakia, or face an unspecified reaction.
The Turkish government on Tuesday denied that it was imposing a buffer zone on its border with northern Syria. However, officials and military leaders have been drafting plans to deal with Syria's crisis, which shows no signs of abating after more than five months.

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Tuesday 08.16.2011

Is Capitalism Doomed?
Nouriel Roubini - Project-Syndicate.org
NEW YORK – The massive volatility and sharp equity-price correction now hitting global financial markets signal that most advanced economies are on the brink of a double-dip recession. A financial and economic crisis caused by too much private-sector debt and leverage led to a massive re-leveraging of the public sector in order to prevent Great Depression 2.0. But the subsequent recovery has been anemic and sub-par in most advanced economies given painful deleveraging.
Now a combination of high oil and commodity prices, turmoil in the Middle East, Japan’s earthquake and tsunami, eurozone debt crises, and America’s fiscal problems (and now its rating downgrade) have led to a massive increase in risk aversion. Economically, the United States, the eurozone, the United Kingdom, and Japan are all idling. Even fast-growing emerging markets (China, emerging Asia, and Latin America), and export-oriented economies that rely on these markets (Germany and resource-rich Australia), are experiencing sharp slowdowns.

Plunge Protection Team:
No Different Than Santa and the Tooth Fairy?
By Avi Gilburt - SeekingAlpha.com
There is a common belief that a "Plunge Protection Team" is sitting in a hidden room, somewhere deep within the bowels of our government, with its trigger on a Cramer-like BUY-BUY-BUY button every time the market plummets. Many people feel that this "team" will prevent our markets from acting in a disorderly manner. This, they claim, should cause, you, the investor, to "feel" more confident in our equity markets, since Uncle Sam is always at work protecting you. However, I am not one of those people with such misguided beliefs.
Let's look at the history behind this mysteriously active Plunge Protection Team, and then let's see if they have actually been able to "protect" us from plunges.
Creation of the Plunge Protection Team

Good old American 'know how' is still valued... who benefits?
Chinese Students Flood U.S. Grad Schools
By MELISSA KORN
Thanks to a thriving economy at home, an increasing number of Chinese students are attending U.S. graduate schools, according to a study to be released on Tuesday by a graduate-school industry group.
Graduate schools saw a 21% increase in Chinese applicants from the last school year and a 23% increase in admissions offers, for students slated to start this fall, according to a study by the Council of Graduate Schools. It is the sixth year in a row of double-digit percentage increases for Chinese students.
Applications and offers were up sharply for international students overall, jumping 11% compared with 2010, according to the report. The study looked at data for a total of 591,739 applications to U.S. graduate schools by prospective international students for fall 2011.

Ron Paul's Texas Straight Talk 8-15-11
U.S. Gov't Debt Is Becoming Worthless

European Union Debt Crisis Stings France,
Putting U.S. Banks at Risk
BY DAVID ZEILER, Associate Editor, Money Morning
While investors in the United States have been preoccupied with the debt-ceiling crisis and volatile stock markets, the European Union debt crisis has worsened.
Now France is under suspicion, and if its debt troubles spiral out of control, then there's a good chance the country will take U.S. banks down with it.
Despite denials from the major ratings agencies, some believe France could be in danger of losing its AAA credit rating, just as the United States did recently.
In fact, it was Standard & Poor's unprecedented downgrade of the United States that put investors on notice that no nation was safe. France became a target because many of its large banks hold a lot of debt from troubled nations like Greece, and because France has a lot of debt of its own.

"The Sequel": How 2011 Is A Repeat of 2008 —
Only Bigger, Longer, and Uncut by Bailouts
I might have missed it, but I don't think anyone has noticed this simple truism: -- By Gonzalo Lira
The structural causes that led to the Global Financial Crisis of 2008 are identical to the structural causes that are leading us to another systemic financial crisis in 2011.
The only difference is the kindof debt at the core of the looming crisis: Mortgage-backed securities in 2008, as opposed to European sovereign debt in 2011.
And of course, the debt hole in 2011 is bigger than in 2008 — alot bigger.
That’s why I am confident in predicting we are about to haveanother Global Financial Crisis — I'm calling it The Sequel: Same movie, same players, same story. Only this time around — like all good sequels — the financial crisis we are about to experience is going to be bigger, longer, and uncut by bailouts.

The Consumption Economy Is Dying — Let it Die
The big problem with consumer spending is that if you buy a product made outside the U.S., it doesn't encourage domestic investment. And that's what we really need.
By Michael Mandel - TheAtlantic.com
With the stock market plunging, we've heard plenty of warnings that a "pullback" in consumer spending could trigger another recession. Let me suggest an alternative. The last thing this economy needs is more debt-fueled consumer spending which mainly creates jobs overseas. Instead, we should be focused on boosting investment in physical, human, and knowledge capital.
Now, who am I to be dissing the American consumer? Don't I know that consumer spending "accounts for 70% of economic activity," as many economic reporters have written in recent weeks? (Indeed, if I have to read that number in another story, I might be forced to go all Office Space on a piece of expensive consumer electronics.)

Will free trade create or kill U.S. jobs?
By Chris Isidore @CNNMoney
NEW YORK (CNNMoney) -- Amid all the squabbling in Washington, there is one policy many Democrats and Republicans agree on -- free trade deals with South Korea, Colombia and Panama.
But there is still fierce debate on whether the deals will create U.S. jobs or take them away from American workers.
On one side is big business, that believes opening up trade with other countries will boost sales for U.S. firms, allowing them to hire more workers. But unions argue the deals will mean more low-wage competition for U.S. workers, and more factories being moved overseas.

Germany's Angela Merkel faces eurobond mutiny
German Chancellor Angela Merkel's coalition partners are threatening a withdrawal from government if she agrees to eurobonds or any form of fiscal union to prop up southern Europe.
By Ambrose Evans-Pritchard - Telegraph.co.uk
The simmering revolt in the Bundestag makes it almost impossible for Mrs Merkel to offer real concessions at Tuesday's emergency summit with French president Nicolas Sarkozy.
"We are categorical that the FDP-group will not vote for eurobonds. Everybody must understand that there is no working majority for this," said Frank Schäffler, the finance spokesman for the Free Democrats (FDP).
Oliver Luksic, the FDP's Saarland chief, told Bild Zeitung the survival of Germany's coalition was now rests on the handling of this issue. "Eurobonds are a sweet poison that leads to more debt, rather than less. Should the government endorse a common European bond and with it take the final step towards a long-term debt union, the FDP should seriously ask whether the coalition has any future."

Foreigners cut holdings in Treasury debt in June
By Martin Crutsinger - AP - WashingtonTimes.com
In an ominous sign, foreign investors cut their holdings of U.S. Treasury debt in June for the first time in more than two years. The decline came at a time of anxiety about whether the United States would raise its borrowing limit.
China, the biggest buyer of U.S. Treasury debt, increased its investment for a third straight month. But Japan, the second-largest buyer, along with Brazil, Russia, Hong Kong, and a group that includes the Bahamas, Bermuda, the Netherlands and the Cayman Islands cut their holdings of U.S.-government-backed debt.
Overall, foreign holdings dropped 0.4 percent to $4.5 trillion. It was the first decline since April 2009.

Debt in Europe Fuels a Bond Debate
OurBusinessNews.com
FRANKFURT — The Germans want to bury it. The French say it is a nonstarter. But the idea that the only way to contain the sovereign debt crisis is for Europe to issue bonds backed by all the nations of the euro zone will not go away.
President Nicolas Sarkozy of France and Chancellor Angela Merkel of Germany are scheduled to meet in Paris on Tuesday but have vowed to avoid the issue of euro bonds altogether. Nonetheless, a number of analysts say that eventually they may have no choice if they want to keep Europes currency union from falling apart.

Spanish towns face funding crisis, rack up debts
OurBusinessNews.com
In this hillside town, topped by a medieval castle and surrounded by olive groves, the 120 municipal workers haven’t been paid since May. Police have new orders not to use their patrol cars unless they get word of a traffic accident or a crime in progress.
The town pool is closed for the summer despite temperatures over 104 (40 Celsius) in the shade. Fees for the public day-care center have doubled. Water bills will soon go up 33 percent and local business owners are seething over euro9 million ($12.7 million) in unpaid bills owed by the town hall, much of it to them.

Can the EU Save Itself From Economic Ruin?
Europe's struggling with deep debt and low growth, but the heart of the continent's fiscal problems is a dysfunctional political system -- By Stewart M. Patrick - TheAtlantic.com
As fears mount that the debt crisis could spread to Italy and Spain, markets gyrate and European officials struggle to calm nerves. My colleague, Charles Kupchan, the CFR's Whitney Shepardson Fellow and a professor of international affairs at Georgetown University, offers his assessment.
The world is watching Europe's economic travails almost as closely as it watching America's. Although the focus is on debts and markets, it's the political mess that is most troubling. In Europe, as in the United States, political dysfunction and the difficulties of governance are the most worrisome story.

in another default...
The Nixon Shock Heard 'Round the World
By severing the dollar's convertibility to gold in 1971, the president ushered in a decade of inflation and economic stagnation. -- By LEWIS E. LEHRMAN - WSJ.com
On the afternoon of Friday, Aug. 13, 1971, high-ranking White House and Treasury Department officials gathered secretly in President Richard Nixon's lodge at Camp David. Treasury Secretary John Connally, on the job for just seven months, was seated to Nixon's right. During that momentous afternoon, however, newcomer Connally was front and center, put there by a solicitous president. Nixon, gossiped his staff, was smitten by the big, self-confident Texan whom the president had charged with bringing order into his administration's bumbling economic policies.
In the past, Nixon had expressed economic views that tended toward "conservative" platitudes about free enterprise and free markets. But the president loved histrionic gestures that grabbed the public's attention. He and Connally were determined to present a comprehensive package of dramatic measures to deal with the nation's huge balance of payments deficit, its anemic economic growth, and inflation.

Remembering Nixon's Gold-Standard Gamble: Interrupting 'Bonanza'
By ADAM MARTIN - TheAtlanticWire.com
On this very day in 1971, President Richard Nixon announced that U.S. dollars would no longer be redeemable for gold, changing the way the United States did business in what was known as the "Nixon shock." The decision to go off gold spelled the end of the Bretton Woods system of international finance, which had member nations tying their currencies to the dollar. Nixon ended the gold standard, Time reported, "to prevent a run on Fort Knox, which contained only a third of the gold bullion necessary to cover the amount of dollars in foreign hands."

Is it time for a gold standard revival?
By Myra Saefong - MarketWatch.com
Today marks the 40-year anniversary of the day the U.S. stopped fixing the value of its currency in gold terms — an important milestone as countries around the world worry about the risk of an international monetary crisis.
The so-called "gold standard" was a "system under which nearly all countries fixed the value of their currencies in terms of a specified amount of gold, or linked their currency to that of a country which did so," according to the World Gold Council. See related story.
In 1971, the U.S. dollar traded around $35 for an ounce of gold, but now it trades around $1,750 an ounce of gold, according to GoldCore.
"Today’s fiat money is not linked to physical reserves of gold and silver, it is becoming worth less with each passing month and risks becoming worthless should hyperinflation take hold," analysts at GoldCore said in a note. "If people lose faith in a nation's paper currency, the money will no longer hold value."

Gold climbs, poised to break losing streak
Risk appetite returns, but weak economic data provides support
By Myra P. Saefong and Virginia Harrison, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures climbed Monday, with weak U.S. economic data and declines in the dollar providing some support, while rising risk appetite lured some bargain-hunting investors out of their defensive shells and into the equities market, capping the metal’s gains.
Gold for December delivery tacked on $5.90, or 0.3%, to $1,748.50 an ounce on the Comex division of the New York Mercantile Exchange, recovering after touching a low of $1,730.80 in electronic trading.

Gold Cleared to Continue Rising for at Least Two Years
By Richard Bloch - SeekingAlpha.com
There have been many articles in the financial press about gold. Some warn that a massive bubble is forming with predictions of a major crash, like what happened in 1980, while others say gold is heading much higher from here.
If you take a look at those 1970s prices, you can see one major difference. Compare the one-year Treasury rate to the price of gold.
Interest rates tripled over the late 1970s. At some point, the rates were pushed so high that it was foolish not to take advantage of them. If I had gold back in early 1980, I might have sold some gold myself for the opportunity to earn more than one percent per month in a bank CD. That’s one reason Fed Chairman Volcker raised rates so high back then – to pull money out of assets and back into cash and cash-like securities.

Gold Fever Gripping the Australian Outback
OurBusinessNews.com
SYDNEY, Australia — Four years ago, Marco Nero was on top of the world. He was earning more than $1 million working as a film effects designer for some of the worlds most prestigious digital animation houses.
His mind, however, was elsewhere.
Mr. Nero, 40, was increasingly spending his office hours poring over Web sites for anything he could find about an unlikely subject: gold. Like Humphrey Bogarts character in the classic 1948 film "The Treasure of the Sierra Madre," he realizes now, he was developing a full-blown case of gold fever, a condition whose genesis he traces to a trip to a prospecting supply shop in the Sydney area.

Gold Against Other Currencies
By Peter Tenebrarum - SeekingAlpha.com
Gold mining stocks have spent the past year going nowhere in what is essentially a wide trading range that looks like a complex corrective formation. What is so surprising is that this has coincided with a big rally in gold and a shift in silver prices to a much higher trading range. To this it should be noted that many of the mid tier gold miners produce significant amounts of silver as a byproduct, while both the major gold stock indexes (HUI and XAU) contain a few component stocks of primary silver producers.

The Case for $25,000 Per Ounce Gold
by Robert Wenzel - Lewrockwel.com
Gold is trading off a bit from its recent high of $1,800 per ounce. This does not surprise me. Whenever a stock or commodity picks up strong momentum, short-term traders jump in for the ride. These short-term traders hold no fundamental understanding of why a commodity or stock is going up, they are just along for the price action. Since they have no fundamental underpinning for their purchase, when there is some short-term downward pressure, they sell because of that downward pressure. Indeed, in the EPJ Daily Alert I have warned that a $500 per ounce drop in the price of gold could occur. It could occur now, or when gold hits $2,500 per ounce. But this selling will have no relevance to the long-term price of gold,which likely will be much higher.

Comex Gold weaker; risk appetite continues
(Kitco News) - Comex Gold futures are trading modestly weaker in early New York action, tracking overnight softness in spot gold prices. Minor liquidation pressures have hit the yellow metal as some traders took profits as U.S. equity markets continue a modest rebound and overall risk sentiment improves slightly for now.
In early stock index futures trading, the S&P 500 is showing modest gains, up for the third session in a row. Spot gold prices fell about 1% in overnight Asian trading.
December Comex gold last traded down $2.30 an ounce at $1,740.30. Spot gold last traded down $5.10 at $1,740.60 an ounce.

Recession and Market Valuation – Must Read Article
Published by Ian R. Campbell - StockResearchPortalBlog.com
If you invest in the equity markets I strongly suggest you read and think carefully about the contents of an article published this past Monday by John Hussman titled'Recession Warning, and the Proper Policy Response' – reading time 15 minutes. Hussman is President of Hussman Funds, and writes a weekly market comment. You can read other commentaries by John Hussman by visiting the Hussman Funds website.
In the referenced article, Dr. Hussman begins by canvassing the reasons he thinks that the "economic evidence now suggests that the U.S. and the global economy are again entering recession". I think his summary of reasons is not only 'on point' as I see things, but both easily read and easily understood. He then goes on to discuss current equity market valuations as in his view they should be perceived by long-term 'fundamentally oriented' investors, short-term 'fundamentally oriented' investors, long-term 'technically oriented' investors, and short-term '‘technically oriented' investors'.

Soros Fund Cut Stakes In Citi, Wells Fargo, Monsanto
By Brett Philbin - WSJ.com
Billionaire investor George Soros‘s hedge fund reported lower stakes in big banks Citigroup and Wells Fargo, and slashed its ownership in Monsanto, a former top holding, according to a regulatory filing late Monday.
Soros disclosed owning about 2.9 million fewer Citigroup shares tan he did at the end of March. The stake is now valued at $2.7 million. Citi exercised a 1-to-10 reverse stock split in May.
The fund also cut its stake in Wells Fargo by 3.4 million shares to 77,700, valued at $2.2 million at June 30.
Soros reduced his stake in Monsanto by 2.6 million shares to 79,400. The position is now valued at $5.8 million, according to the filing.

Booming business of fear: Sales of safes soar
By Blake Ellis - CNN Money
NEW YORK (CNNMoney) -- Amid the market turmoil, sales of security safes and vaults have spiked. While some shoppers sought to protect whatever valuables they had left, others needed a place to stash their newly-acquired safe haven assets such as gold and cash.
Port Charlotte, Fla.-based Value Safes said it sold an average of $13,000 in safes a day in the past week, more than tripling its daily average of $3,500 from the previous week. On Amazon.com (AMZN, Fortune 500), SentrySafe's $170 1.2-cubic foot combination safe was among the site's biggest "movers and shakers" Friday, with sales rising 44% over the past 24 hours.

Global Currency Crisis Options Trading

Stop Coddling the Super-Rich
By WARREN E. BUFFETT - NYTimes.com
OUR leaders have asked for "shared sacrifice." But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.
While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as "carried interest," thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.

Buffett Says 'Tax Me' on Fedspeak Week
By Phillip Davis - SeekingAlpha.com
Warren Buffett paid $6.9M in taxes last year.
While that sounds like a lot of money, it was only 17.4% of his income, about half as much as the average person who works for him paid, and Buffett - unlike most people at the top - believes that is not fair. In his plainly worded New York Times editorial, "Stop Coddling the Super Rich," the $47 billion businessman states:
My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.
While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as "carried interest," thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.

16 Statistics Which Prove That The American People
Are Absolutely Seething With Anger
TheEconomicCollapseBlog.com
You should let the video footage of the wild violence that just took place in London burn into your memory because the same things are going to be happening all over the United States as the economy continues to crumble. We have raised an entire generation of young people with an "entitlement mentality", but now the economy is producing very few good jobs that will actually enable our young people to work for what they feel they are entitled to. If you are under 30 in America today, things look really bleak. The vast majority of the good jobs are held by people that are older, and they aren't about to give them up if they can help it. It is easy for the rest of us to tell young Americans to "take whatever they can", but the reality is that there is intense competition for even the most basic jobs. For instance, McDonald's recently held a "National Hiring Day" during which a million Americans applied for jobs. Only 6.2% of the applicants were hired. In the old days you could walk down to McDonald's and get a job whenever you wanted to, but now any job is precious. The frustration among our young people is palpable. Most of them feel entitled to "the American Dream" and they feel like the system has failed them. Unfortunately, many of them are already turning to violence. But the economic riots and the civil unrest that we have already seen are nothing compared to what is coming. Americans are angry, and as the economy continues to collapse that anger is going to reach unprecedented heights.

Is the Unemployment Rate Really 12.5%?
By Daniel Indiviglio - TheAtlantic.com
Some people criticize the way the unemployment rate is measured, since it doesn't include Americans who have left the workforce temporarily, but ultimately will want or need to get a job. If you include these people in the calculation, the labor market picture has worsened since last November, as I explained on Saturday. So Federal Reserve economists can't pretend that the unemployment picture has improved since their last intervention. But what if we went all the way back to January 2007?
At that time, the labor participation rate was 66.4%. In July 2011, it hit a new recessionary low of 63.9%. That 2.5% might not seem like a lot, but it would have meant nearly 6 million more people in July's labor force. If you add those people into the workforce, then the unemployment rate last month would have hit a new high of 12.5%, which is much higher than the official 9.1% reported. Here's how this alternative measure for unemployment would have evolved over the past couple of years:

Employees Bid Farewell to Corporate America
By: Elizabeth Alterman, Special to CNBC.com
With the U.S. unemployment rate at 9.1 percent as of July 31 and a fragile economic recovery underway, many workers feel they are left with no choice but to take their careers into their own hands.
Employees are bidding farewell to corporate America in the hope of finding a more secure, or at least fulfilling, future. They are reinventing themselves by starting their own companies or by pursuing long-put-off dreams that include creative or charitable endeavors.
While it might seem like a bold move, countless workers believe the abundance of uncertainty in today’s job market mitigates the fear factor.
When self-proclaimed "cubicle monkey" Charlie Avallone, a technical writer in the investment field, realized his superior was planning to stick around for at least another 20 years, the 37-year-old from Los Angeles felt he was running out of options.

Kicking the Housing Can Down a 1-Way Street and Over a Cliff
By Richard Suttmeler - SeekingAlpha.com
Housing stocks, community banks and regional banks have led the downside and lag the upside. The Housing Sector Index is down 21.3% year to date and 6.2% below its post-FOMC low. The America’s Community Bankers Index is down 16.7% year to date and up just 2.0% since its post-FOMC low. The Regional Banking Index is down 27.8% year to date and up just 3.2% since its Post-FOMC low. Compare this to the S&P 500 at 6.3% lower year to date and up 7.0% since last Tuesday's post-FOMC low.
The FDIC kicked bank failures down the road. The FDIC's closed 64 community banks so far on "Bank Failure Fridays" in 2011, and almost all had significant overexposures to commercial real estate loans, including construction and development loans. Based upon the regulatory guidelines, the FDIC should have begun to close overexposed banks in 2007, but it ignored the guidelines and only began to seize failed banks in 2008 with just 25 failures. 140 banks failed in 2009 with a peak of 50 in the third quarter. 157 banks failed in 2010. We now have 64 bank failures in 2011, and 386 since the end of 2007. I still predict 500 to 800 bank failures in total by the end of 2012 into 2013.

BERNANKE PLEDGES TO SCREW YOUR GRANDMOTHER
FOR AT LEAST TWO MORE YEARS
By James Quinn - TheBurningPlatform.com

"A system of capitalism presumes sound money, not fiat money manipulated by a central bank. Capitalism cherishes voluntary contracts and interest rates that are determined by savings, not credit creation by a central bank." - Ron Paul

I wonder what goes through Ben Bernanke’s mind as he sits in his gold plated boardroom in the majestic Marriner Eccles building in Washington DC and decides to screw grandmothers in order to further enrich Wall Street bankers. He just pledged to keep interest rates at zero percent for two more years. Ben is a supposedly book smart man. Does he have no guilt or shame for what he has wrought? How does he sleep at night knowing he has created bloody revolutions around the globe due to his inflationary zero interest policy? People are dying because he has decided that an elite group of Wall Street bankers who recklessly brought down the worldwide financial system in 2008 deserve to be kept alive and enriched at the expense of the many.

Obama: Forcing People to Buy Health Insurance
'Should Not Be Controversial'
By Nicholas Ballasy
(CNSNews.com) – On his bus tour, President Barack Obama said the federal health care law’s individual mandate, which requires every American to purchase health insurance, "should not be controversial."
To date, 26 states have sued the federal government, arguing that the individual mandate is unconstitutional because the U.S. Constitution does not grant Congress the power to require Americans to purchase a good or service.
"Here's the problem – if an insurance company has to take you, has to insure you, even if you're sick but you don't have an individual mandate, then what would everybody do? They would wait until they get sick and then you'd buy health insurance, right?" Obama told an audience at the first stop of his bus tour in Cannon Falls, Minnesota on Monday.

Obama: Individual Health Insurance Mandate
'Should Not Be Controversial'

Many small cities in danger of losing air service
By Charisse Jones, USA TODAY
With its three flights that take off each day, Delta Air Lines has given the 26,000 residents of Aberdeen, S.D., a fast connection to the rest of the nation and world.
"We are about 75 miles from an interstate," says Mike Wilson, the city's transportation director, "so we're fairly secluded here."
But starting today, Delta is offering only two daily flights from Aberdeen. And the world's second-biggest airline, which is the lone carrier flying in and out of the city, says it needs a subsidy from the federal government to keep flying there at all.

Big Brother 2.0:
10 New Ways That The Government Will Be Spying
On You And Controlling Your Behavior
EndOfTheAmericanDream.com
Are you ready for Big Brother 2.0? If you think that the hundreds of ways that the government watches, monitors, tracks and controls us now are bad, just wait until you see what is coming. We live in an age when paranoia is running wild. As technology continues to develop at an exponential pace, governments all over the globe are going to discover a multitude of new ways to spy on us and control our behavior. In a world where everyone is a "potential terrorist", we are told that things like liberty, freedom and privacy are "luxuries" that we can no longer afford. We are assured that if we just allow the government to watch all of us and investigate all of us that somehow that will keep us all safe. But it isn't just the government that is watching us. Now we are being taught to spy on one another and to report any trace of "suspicious activity" to the government immediately. The entire civilized world is being transformed into one giant prison grid, and many of the new technologies that are now being introduced are going to make things even worse.

CNN And Politico Admit Ron Paul Media Conspiracy!

When the Black Panthers Challenged Gun Control
Damon W. Root - Reason.com
At The Atlantic, UCLA law professor Adam Winkler previews his forthcoming book Gunfight: The Battle Over the Right to Bear Arms in America. Winkler's whole essay is worth reading, but I thought I'd highlight his fascinating discussion of how the Black Panthers "launched the modern gun-rights movement" on May 2, 1967:
OPPOSITION TO GUN CONTROL was what drove the black militants to visit the California capitol with loaded weapons in hand. The Black Panther Party had been formed six months earlier, in Oakland, by Huey Newton and Bobby Seale. Like many young African Americans, Newton and Seale were frustrated with the failed promise of the civil-rights movement. Brown v. Board of Education, the Civil Rights Act of 1964, and the Voting Rights Act of 1965 were legal landmarks, but they had yet to deliver equal opportunity. In Newton and Seale’s view, the only tangible outcome of the civil-rights movement had been more violence and oppression, much of it committed by the very entity meant to protect and serve the public: the police.

The Secret History of Guns
By ADAM WINKLER - TheAtlantic.com
THE EIGHTH-GRADE STUDENTS gathering on the west lawn of the state capitol in Sacramento were planning to lunch on fried chicken with California’s new governor, Ronald Reagan, and then tour the granite building constructed a century earlier to resemble the nation’s Capitol. But the festivities were interrupted by the arrival of 30 young black men and women carrying .357 Magnums, 12-gauge shotguns, and .45-caliber pistols.
The 24 men and six women climbed the capitol steps, and one man, Bobby Seale, began to read from a prepared statement. "The American people in general and the black people in particular," he announced, must
take careful note of the racist California legislature aimed at keeping the black people disarmed and powerless Black people have begged, prayed, petitioned, demonstrated, and everything else to get the racist power structure of America to right the wrongs which have historically been perpetuated against black people The time has come for black people to arm themselves against this terror before it is too late.

Quantum Leap!! - Second Republic Project -
exposing the power elite via alternate media
by Adrian Salbuchi

Repressing the Internet, Western-Style
As politicians call for more online controls after London and Norway, authoritarian states are watching
By EVGENY MOROZOV - WSJ.com
Did the youthful rioters who roamed the streets of London, Manchester and other British cities expect to see their photos scrutinized by angry Internet users, keen to identify the miscreants? In the immediate aftermath of the riots, many cyber-vigilantes turned to Facebook, Flickr and other social networking sites to study pictures of the violence. Some computer-savvy members even volunteered to automate the process by using software to compare rioters' faces with faces pictured elsewhere on the Internet.
The rioting youths were not exactly Luddites either. They used BlackBerrys to send their messages, avoiding more visible platforms like Facebook and Twitter. It's telling that they looted many stores selling fancy electronics. The path is short, it would seem, from "digital natives" to "digital restives."

The Riot Act
The media demonizes the Tea Party
while making excuses for the British rioters.
By A. Barton Hinkle - Reason.com
"This is the uprising of the working class," said a London anarchist taking a momentary break from smashing things last Monday. "We're redistributing the wealth." Said another, "[We're showing] the rich we can do what we want."
If you have been keeping up with the news from Britain, then you know who bears the blame for this: conservatives!
The "deep cutbacks in social programs" made by the government of Prime Minister David Cameron "have hit the country's poor especially hard," reported a major U.S. newspaper, "including large numbers of the minority youths who have been at the forefront of the unrest."
The "unrest." Nice touch.

Globalists' Extermination List Exposed
By Aaron Dykes - Infowars.com
In a Special Infowars Report, researcher Aaron Dykes exposes the global population database apparatus used by eugenicists to target populations for reduced births, soft kill and extermination. From the IBM-developed Hollerith punchcards used in the 1890 U.S. census, to race-mixing studies for Cold Springs Harbor and concentration camps in Rockefeller-funded Nazi Germany, eugenicists have long tabulated vital statistics in order to attack subtly and with precision.
Now they are targeting our food supplies, water, air and environment in attempt to shut off our future. How will elites utilize the human genome code, blood samples and DNA they’ve spent decades compiling? Why do foundations of the rich spend so much on the 3rd World population reduction? Aaron Dykes reports on the New World Order’s obsession with eugenics and population control.

INFOWARS SPECIAL REPORT:
Globalists' Extermination List Exposed with Aaron Dykes 1/2

INFOWARS SPECIAL REPORT:
Globalists' Extermination List Exposed with Aaron Dykes 2/2

What they really want is the 17,000+ patent base...
Google to buy Motorola Mobility for $12.5 billion
By David Goldman and Aaron Smith @CNNMoneyTech
NEW YORK (CNNMoney) -- In a surprise deal that would be its largest acquisition ever, Google has agreed to buy Motorola Mobility for $12.5 billion, the two companies said Monday.
Google, the world's search leader, said it believes the mobile device maker will help it gain an even stronger foothold in the mobile marketplace. Google licenses Android, the popular mobile operating system, which competes with Apple's iPhone and iPad, Research In Motion's BlackBerry and Microsoft's Windows Phone among others. (Investors are already betting that RIM may be the next to get bought.)

Iran, Turkey and Azerbaijan -
a pragmatic marriage of common interests
Written by John Daly - OilPrice.com
Pipelines and energy have an unsettling ability to shift regional geostrategic goal focuses, weakening the old traditional alliances and bringing new political groupings into existence.
Nowhere is this more in evidence than in the trilateral energy relationship between Turkey, Iran and Azerbaijan.
Iran, which has been subjected to increasingly punitive U.S. sanctions since the 1979 revolution which overthrew the Shah and established an Islamic republic, has more recently been put under increasing pressure in the form of additional sanctions imposed by the U.S.-dominated UN Security Council over both Washington's and Tel Aviv’s insistence that its civilian nuclear energy efforts actually mask a covert nuclear weapons program.

US officials: Gadhafi fires first scud missile
BY LOLITA C. BALDOR, ASSOCIATED PRESS - Salon.com
Libyan government forces tapped into their stores of Scud missiles this weekend, firing one for the first time in this year's conflict with rebels, but hurting no one, U.S. defense officials said Monday.
The missile launch was detected by U.S. forces shortly after midnight Sunday and the Scud landed in the desert about 50 miles outside Brega, said one official, who spoke on condition of anonymity to discuss military operations.
Rebel and regime forces have battled over the strategic port city of Brega throughout the conflict, and control has swung back and forth between the two sides.

Rebels start to surround Gadhafi in capital
Key interrogator of activists flees
By Ashish Kumar Sen-The Washington Times
Libyan rebels advanced on the capital, Tripoli, from the west on Monday, threatening to encircle dictator Moammar Gadhafi, who also had another top aide flee his crumbling regime.
In Washington, the White House cheered the rebel offensive, while theState Department confirmed reports that resistance leaders were holding talks with Gadhafi’s envoys in Tunisia. The rebels denied having any role in the talks.
"It’s becoming increasingly clear that Gadhafi’s days are numbered," said White House spokesman Jay Carney.
After six months of seesaw battles with Gadhafi forces, the rebels, aided by NATO firepower, have notched up significant victories in recent days.

Libya, Syria the Road to World War III -
Paul Craig Roberts on The Corbett Report

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Monday 08.15.2011

Regulators shut small Kan bank; 64th in 2011
WASHINGTON (AP) — Regulators on Friday shut down a small bank in Kansas, lifting to 64 the number of U.S. bank failures this year.
The pace of closures has slowed, however, as the economy has slowly improved and banks work their way through the bad debt accumulated in the Great Recession. By this time last year, regulators had shuttered 110 banks.
The Federal Deposit Insurance Corp. seized First National Bank of Olathe, based in Olathe, Kan., with $538.1 million in assets and $524.3 million in deposits. Enterprise Bank & Trust, based in Clayton, Mo., agreed to assume the assets and deposits of the failed bank.

US witnesses 8 bank failures every month;
64 collapse this year
EconomicTimes.com
NEW YORK: Reflecting the uncertain economic conditions in the world's largest economy, as many as eight US banks on an average are going out of business every month.
A whopping 64 American banks have closed down so far this year, translating into an average of eight closures every month, according to official data.
This month alone has seen the shutting down of three banks, after 13 entities went belly up in July.
The Federal Deposit Insurance Corporation (FDIC), which insures deposits of around 8,000 American banks, said three entities - The First National Bank of Olathe, Bank of Whitman and Bank of Shorewood-- were closed down in August.

Now That U.S. Government Debt Has Been Downgraded,
The Rest Of The World Is Calling Even Louder
For A New Global Currency
EndOfTheAmericanDream.com
For decades, the U.S. economy was so dominant compared to the rest of the world that nobody really even challenged the status of the U.S. dollar as the reserve currency of the world. But now that U.S. government debt has been downgraded, the U.S. dollar is showing significant weakness and the U.S. economy continues to crumble, the rest of the world is questioning whether the U.S. dollar should be allowed to continue to have such a privileged position in the global marketplace. Politicians all over the world are now openly calling for a new global currency to replace the U.S. dollar in international trade. In fact, we are already seeing a shift away from the dollar in many areas of the globe. A decade ago, the U.S. dollar made up approximately 70% of all foreign exchange reserves around the world. Today, that figure is down to about 60%, and it continues to fall. As the debt problems of the U.S. government get even deeper, and as the U.S. dollar loses even more strength, the calls for a truly global currency are going to grow even louder.

Is There Enough Money on Earth to Save the Banks?
By Jonathan Weil - Bloomberg.com
Forget free-market fundamentals. What matters most to the capital markets now is whether the governments of the U.S. and westernEurope have the will and the wherewithal to save the global financial system from disaster yet again.
A healthy climate for the efficient allocation of capital, this is not.
By pledging to keep its benchmark interest rate near zero through at least mid-2013, the Federal Reserve succeeded (for a couple of hours) in propping up U.S. stock markets after two days of gut-wrenching declines, especially in financial stocks. The news came a day after theEuropean Central Bank embraced the role of savior by buying sovereign debt of Italy and Spain, sending yields on those countries’ bonds plunging and offering respite to financial institutions that hold them.

Analysis of Financial Terrorism in America:
Over 1 Million Deaths Annually,
62 Million People With Zero Net Worth,
As the Economic Elite Make Off With $46 Trillion
By David DeGraw - AmpedStatus.org
Groundbreaking extensive new report on the financial destruction of the United States:
Abstract :: Welcome to World War III
Despite increasing personal financial hardship, most Americans remain unaware of the economic world war currently unfolding. An all-pervasive corporate and government propaganda campaign has effectively obscured this blatant reality. After extensive analysis, it is evident that World War III is a war between the richest one-tenth of one percent of the global population and 99.9 percent of humanity. Or, as I have called it, The Economic Elite Vs. The People. This war has been a one-sided attack thus far. However, as we have seen throughout the world in recent months, the people are beginning to fight back. The following report is a statistical analysis of the systemic economic attacks against the American people.

The Fix is In
Peter Schiff - SilverBearCafe.com
This week's wild actions on Wall Street should serve as a stark reminder that few investors have any clue as to what is really going on beneath the surface of America's troubled economy. But this week did bring startling clarity on at least one front. In its August policy statement the Federal Reserve took the highly unusual step of putting a specific time frame for the continuation of its near zero interest rate policy.
Moving past the previously uncertain pronouncements that they would "keep interest rates low for an extended period," the Fed now tells us that rates will not budge from rock bottom for at least two years. Although the markets rallied on the news (at least for a few minutes) in reality the policy will inflict untold harm on the U.S. economy. The move was so dangerous and misguided that three members of the Fed's Open Market Committee actually voted against it. This level of dissent within the Fed hasn't been seen for years.

PETER SCHIFF : GOLD STANDARD : KEISER REPORT

Stocks: Volatility will continue this week
NEW YORK (CNNMoney) -- Brace for more turbulence.
This week could be just as bumpy as last week's wild ride, as Wall Street continues to deal with the fallout of S&P's downgrade, the problems in Europe and the fate of the U.S. economy.
"Investors are grappling with two primary questions: Will the U.S. slip into another recession, and will the euro survive?," said Hans Olsen, head of Americas investment strategy for Barclays Wealth, a division of Barclays Capital.

ECB is euroland's last hope
as bail-out machinery fails to resolve crisis
The leaders of Germany and France have three bad choices as they decide whether to save EMU this week, or pretend to do so.
By Ambrose Evans-Pritchard - Telegraph.co.uk
They can agree to fiscal fusion and an EMU debt union, entailing treaty changes and a constitutional revolution. This implies the emasculation of Europe's historic nation states.
They can tear up the mandate of European Central Bank and order Frankfurt to go nuclear with €2 trillion of 'unsterilized' bond purchases until the M3 money supply in Italy, Spain, Portugal, Ireland, and Greece stops contracting at depression rates and starts to grow again at recovery speed (5pc). This might destabilize Germany.

World Bank leader sounds warning
Global economy in 'different storm'
McClatchy - Spokesman.com
SYDNEY – The global economy was entering a "new and more dangerous" phase because of the debt crisis in Europe, World Bank chief Robert Zoellick warned Saturday.
Zoellick, speaking in an interview with the Australian newspaper, said Europe’s sovereign debt concerns are much more serious than those that saw a credit rating downgrade in the United States.
"We're in the early moments of a new and different storm – it's not the same as 2008," Zoellick said.
"In the past couple of weeks the world has moved from a troubled multispeed recovery – with emerging markets and a few economies like Australia having good growth and developed markets struggling – to a new and more dangerous phase."

Robert Zoellick warns stock markets 'entering new danger zone'
World Bank chief launches scathing critique of western economic leadership as US and Europe struggle to recover
By Dan Milmo - Guardian.co.uk
Global stock markets are entering a "new danger zone", the head of theWorld Bank has warned in a scathing critique of economic leadership in the US and Europe.
Robert Zoellick said the global economy was going through a multispeed recovery with western economies stuck in the slow lane following the downgrading of US government debt and the ongoing crisis in the eurozone. Investors have displayed increasingly erratic behaviour in recent weeks, with the FTSE 100 index in London rising and falling by 3% in successive days as financial professionals digested the prospect of another worldwide recession.

High-Frequency Firms Tripled Trading
as S&P 500 Plunged 13%, Wedbush Says
By Nina Mehta - Bloomberg.com
The stock market’s fastest electronic firms boosted trading threefold during the rout that erased $2.2 trillion from U.S. equity values, stepping up strategies that profit from volatility, according to one of their biggest brokers.
The increase from Aug. 1 to Aug. 10 over their 2011 average surpassed the 80 percent rise in U.S. equity volume, showing that high-frequency traders made up more of the market during the plunge, Gary Wedbush, executive vice president and head of capital markets at Wedbush Securities, said in a telephone interview. Wedbush is the largest broker supplying bids and offers on the Nasdaq Stock Market, according to exchange data.

Computers rule Wall Street
By Ken Sweet - CNNMoney
NEW YORK (CNNMoney) -- The computers have taken over Wall Street, and they're taking investors on a wild ride.
This week, the Dow swung back and forth more than 400 points on four straight days. Trading volume is at or near record levels.
It's not fast-talking traders on the New York Stock Exchange behind the action. The majority of trading is done on large server farms based in New Jersey and elsewhere.
"These types of moves are certainly greater than anything we've seen in the last 10 years, and it's absolutely because now the majority of the orders are being done by these high-frequency trading robots," said Sal Arnuk, co-founder of Themis Trading, an independent brokerage firm.

Max Keiser: WW3 is on as Wall St. banks plunder economy

10 Signs That Economic Riots And Civil Unrest
Inside The United States Are Now More Likely Than Ever
TheEconomicCollapseBlog.com
You should let the video footage of the wild violence that just took place in London burn into your memory because the same things are going to be happening all over the United States as the economy continues to crumble. We have raised an entire generation of young people with an "entitlement mentality", but now the economy is producing very few good jobs that will actually enable our young people to work for what they feel they are entitled to. If you are under 30 in America today, things look really bleak. The vast majority of the good jobs are held by people that are older, and they aren't about to give them up if they can help it. It is easy for the rest of us to tell young Americans to "take whatever they can", but the reality is that there is intense competition for even the most basic jobs. For instance, McDonald's recently held a "National Hiring Day" during which a million Americans applied for jobs. Only 6.2% of the applicants were hired. In the old days you could walk down to McDonald's and get a job whenever you wanted to, but now any job is precious. The frustration among our young people is palpable. Most of them feel entitled to "the American Dream" and they feel like the system has failed them. Unfortunately, many of them are already turning to violence. But the economic riots and the civil unrest that we have already seen are nothing compared to what is coming. Americans are angry, and as the economy continues to collapse that anger is going to reach unprecedented heights.

Mr. Market's Next Attack
By Bill Bonner - The DailyReckoning.com
08/12/11 Poitou, France – Whew!
What a week. Traders must be reeling. The rest of us are staggering.
And nobody knows anything.
Is this market going up or down? We don't know. But wherever it is going, it seems to be in a hurry to get there.
It collapsed on Monday, soared on Tuesday, collapsed again on Wednesday and soared again on Thursday. The Netscape News report:
The Dow Jones industrial average soared 423 points. It had already fallen 634 points Monday, risen 429 Tuesday and fallen 519 Wednesday. Never before has the Dow had four 400-point swings in a row.
The pieces of news that sent Wall Street rocketing higher were not exactly blockbusters: Cisco Systems said its profit was better than expected, the job market got a little better, and France tried to raise confidence in its shaken banking system.

Debt crisis could lead countries to opt out of the euro
HEATHER STEWART - Mail&Guardian
Quelle horreur! French President Nicolas Sarkozy was so alarmed by the panic in the financial markets last week that he even -- briefly -- abandoned his sacrosanct summer holiday to return to Paris and instruct his ministers to draw up new austerity plans. On Tuesday, he'll meet Angela Merkel, who's also having a less than tranquil August.
The markets' concerns were partly fuelled by rumours about the fragile state of French banks and their hefty exposures to Greece, Italy and Spain, particularly Société Générale.
But they were also simply following the relentless logic of the ever-deepening sovereign debt crisis. If Italy and Spain are in the firing line and could eventually need bailing out, as bond markets have been signalling, then Germany's taxpayers won't be the only ones on the hook -- France will have to pay its share of the price too.

Happy New Tax Freedom Day
By Doug Bandow - The American Spectator.org
Tax Freedom Day is long past. Americans supposedly finished paying for government on April 12.
But not really.
Taxes once reflected the cost of government. No longer. This year Uncle Sam is borrowing 40 percent of the money necessary to fund federal operations. Regulation imposes a separate quasi-tax on the American people.
As a result, Americans don't actually stop paying for government this year until today, August 12. That's 224 days representing more than 61 percent of national income. Americans for Tax Reform's latest Cost of Government Day report, by Jacob Feldman, makes for a depressing read.

Jim Rogers - CNN 10 Aug 2011

Food price rises pushing millions into extreme poverty,
World Bank warns
The World Bank's food price index shows wheat, maize and soya costs have soared, requiring a relaxation of export controls and a rethink on biofuels
By Phillip Inman, economics correspondent - Guardian.co.uk
Food producing countries must relax export controls and divert production away from biofuels to prevent millions more people being driven into poverty by higher food prices, the head of the World BankRobert Zoellick said in Washington.
Without action to increase the supply of food, 10 million more people could fall below the $1.25 (76p) a day extreme poverty line over the next few months – in addition to the 44 million pushed into poverty by soaring food prices during the last year, he warned on Thursday.
A report by the World Bank found prices had jumped by 36% since April 2010, driven in part by higher fuel costs connected to instability in the Middle East and North Africa.

Gold, and Platinum, and Money, Oh My!
Jesse's Café Américain
Traders have recently been remarking about a highly unusual event in the metals markets.
For the first time in quite a while, the price of gold per ounce has exceed the price of platinum per ounce. This is shown in the first chart.
There is even a paired trade being touted, short gold and long platinum. The caveat is that this is said to be a profitable trade IF there is a global recovery. Personally I think one must also assume that the recovery is not due to money printing.

Keiser Report: Reverse Nixon Golden Dream (E172)

Gold available for cash dries up as prices rise even higher
Most of the public's 'old gold' seems to have been sold already and those that still own the yellow metal are holding out for even higher prices as gold continues to rise. But, the implications for the scrap market are significant
Author: Frank Tang and Paula Rogo (Reuters) - Mineweb.com
NEW YORK (REUTERS) - Handing out flyers at the corner of 47th Street and Fifth Avenue in New York City's Diamond District, Mariabi Peenya is having trouble finding passersby eager to sell their gold jewelry for cash.
In Mexico City, Paulino Luna says fewer customers are coming to his small storefront in a colonial-era building, where he's been buying bullion for 25 years. And in Chennai, India, Daman Prakash Rathod finds the once-heaving crowd of local gold scrap sellers have all but disappeared.

Abandoning the gold standard was a seminal moment,
and one we're now all paying for
Roll out the bunting.
Tomorrow is the 40th anniversary of the modern global economy.
By Edmund Conway - Telegraph.co.uk
That's right: come Monday morning we will have managed to survive four decades of fiat money – though, given the chaos in markets in recent weeks, it is anyone's guess how much longer it will last.
On 15 August 1971, with the US public finances straitened by the cost of the war in Vietnam, Richard Nixon finally cut the link between the US dollar and gold. Until then, the US Treasury was duty bound to exchange an ounce of gold with central banks willing to pay them $35.

Time to monitor Swiss Franc, gold and silver correlations
by Dr Jeffrey Lewis - CommodityOnline.com
Behavioral finance tells us that behind every mathematical proof of a financial concept is a human element. Human nature plays itself out each day, as we interact with our portfolios, investments, and the markets to find the "equilibrium price" as determined by all of our errant thoughts.
By reversing the logic of behavioral finance, investors can find a better understanding of the financial markets. One topic that should earn more time in financial conversation is the ties between currency values and monetary metals.

Mystery and Intrigue in the Gold Market
By Mark Leibovit - Gata.org
Politicians, governments, media, etc. seem to overlook the true value of precious metals and try to deter individuals from owning them. This has been going on for centuries. Most recently, the United States government prohibited American citizens from owning gold between 1933 and end of 1974.
They continue to mislead people into believing that paper currencies are the real wealth. We hear from the chairman of the Federal Reserve, Ben Bernanke, that gold is not money, just "tradition." Despite Bernanke's comments, gold is indeed a currency that competes with government-issued currencies and helps determine not only the value of those currencies but also the level of interest rates and the value of government bonds.

International Forecaster August 2011 (#4) -
Gold, Silver, Economy + More
By: Bob Chapman - GoldSeek.com
Markets have certainly fallen quickly. It was only on 12,721 on July 21 and now we are looking at a low close of 11.269 after a 500-point PPT arrangement. There is no question investors didn't like the bill encompassing debt extension, nor the perceived cuts to be made. That was followed by a long awaited fall-in the debt rating of the US by the S&P. At the same time the financial and economic conditions in Europe worsen with Italy officially joining the ranks of near insolvency. These events were accompanied by calls for the president to bypass the Constitution or to use the 14th Amendment to bring about the debt extension. Under a façade of political wrangling as a cover the real impetus for the standoff became obvious. The whole exercise was not only about debt extension that could have been settled in 15 minutes, but about cutting individually paid for plans, such as Social Security and Medicare, which will eventually lead to a corporatist fascist dictatorship. This super-Congress is very reminiscent of the 13th century "Star Chamber", the Soviet Politburo, or Adolph Hitler's 1933 "Enabling Act."

What did the huge leap in the gold price actually say?
The recent big surge in the gold price presages considerably more economic pain before governments take the necessary steps to rebalance the global economy.
Author: Julian Phillips - Mineweb.com
In the last weeks we have seen the gold price jump from the price we alerted our subscribers of $1,555, to reach just over $1,800 before reacting downwards today. Contrary to the view of many analysts, we do not see this as a frothy overrun from which it will pull back. On the contrary, this rise in the gold price has said so much more than simply, trading peak.
Many have blamed the unfortunate S & P ratings agency for the market dramas in the last two weeks, but they were simply the boy who said ‘the emperor had no clothes on.' For months now, we have known and commented on the fact that the debt crises on both sides of the Atlantic would lead to trouble. One hopes that the news is not as bad as it seems, but we all knew it was. The build-up of parallel crises added weight to the drama so when the Dow suddenly sank it was simply a postponed reaction. The fact that a 'head-and-shoulders' had completed its formation made the market ripe for fall.

Dorothy's silver shoes or the re-monetization
of the silver currency of the United States of America
By: Hugo Salinas Price - SilverSeek.com
Why not re-monetize the silver dollar? Re-monetization could put the silver dollar and its subsidiary silver coinage into circulation in parallel with FRNs – “Federal Reserve Notes”.
There are several reasons that make this action possible, and only one that might be considered as an unimportant material obstacle.
In favor:
The silver dollar is the money that is still the Constitutional "coin of the realm", defined by Act of Congress as 371.25 grains of pure silver. (The Troy ounce contains 480 grains.)
The silver dollar is familiar or at least known to almost all Americans.
A considerable quantity of these silver dollars is owned by Americans.
The silver dollar is a cherished symbol of a great past.

The Public Be Damned
By: Theodore Butler - SilverSeek.com
It is important to try to understand, as much as possible, what are the dynamics behind the large price moves recently. It is human nature to accept any plausible-sounding reason offered if it is in conformance with the price direction. In a big price move, we demand an immediate explanation and then we accept any explanation offered, even if it doesn’t stand the scrutiny of further analysis. For instance, big price declines in copper and crude oil are immediately explained and accepted as being due to weakness in the world economy. Yet we know that the world economy and copper and oil fundamentals can’t possibly change quickly enough to be the real explanation. Please allow me to offer what I think is the real cause behind all the crazy price volatility and then to suggest something constructive you might want to do about it.

UBS' Andy Lees On Why The US Economy Is,
All Else Equal, Doomed
Tyler Durden - SilverBearCafe.com
"With all the mess going on at the moment, I thought it was worth while stepping back a little and trying to look at the bigger picture." So begins Andy Lees' latest must read letter to clients whch explains succinctly virtually the entire story of where we were, how we got to where are now, how the current trajectory is unsustainable, why due to decades of capital misallocation anything that the Fed does now is essentially irrelevant, why our untenable debt pile does nothing but perpetuate an unsustainable ponzi scheme which will result in an unseen explosion in the true cost of capital: gold, and why the bond market will eventually, and inevitably, force an epic repricing in the cost of non-gold capital absent the arrival of the deux ex machina of real, actionable innovation that the Fed, and all global central planners, keep hoping for. Because the longer we keep plugging away with that worthless substitute, financial innovation, which is anything but, the greater the final collapse.

Judge Napolitano - Does Obama Wait For Congress
To Be On Vacation To Break The Law?

10 Myths That Politicians Want You to Believe
By John DeFeo - TheStreet.com
NEW YORK (TheStreet) -- The financial system is on the brink of collapse after trillions in bad loans were issued by greedy bankers. If you were a U.S. political figure, would you:

A.) Tell everyone to suck a lemon, and (maybe) let the economy implode.
B.) Fire the bankers who made the bad loans, prosecute the guys who broke the law and guarantee a portion of the loans in a grin-and-bear-it show of good faith.
C.) Reward the bankers who made the bad loans with billions of dollars in bonuses and guarantee every loan with U.S. taxpayer money (with interest, because we borrowed the money from China).

If you answered C, then maybe you should run for office, support laws that funnel billions to insolvent companies, retire from politics and start working for one of the companies you helped bail out. Heck, that's what former Republican-senator Judd Gregg did (newly hired by Goldman Sachs).

Hello, Washington? Is Anyone Listening?
By Eugene Robinson
It's sobering that three-fourths of Americans, according to a new Washington Post poll, have little or no confidence in our elected leaders to solve the nation’s economic problems. At this point, though, it's hardly surprising.
If anything, we should be shocked and alarmed that 26 percent of our fellow citizens apparently believe the president and Congress are going to make it all better. Are they not paying attention? Or are they delusional?
The manic-depressive swings we’ve seen in the stock market all week just serve to heighten the general anxiety, like the soundtrack of a horror film. Seesaw gains or losses of hundreds of points on the Dow tend to mask the overall trend, which is downward—and also distract attention from the fact that markets in Europe and Asia are heading in the same direction. The world is trillions of dollars poorer than it was just a couple of weeks ago.

More states need to fight back...
find out how Maine is succeeding

Callers Sound Off on Transportation Dept. Rule
Requiring A CDL for All Farmers! - Alex Jones Tv 1/2

Callers Sound Off on Transportation Dept. Rule
Requiring A CDL for All Farmers! - Alex Jones Tv 2/2

Revealed:
How U.S. would deal with UK-style riots...
by sending the Army to areas with
'large numbers of minority groups'
By PAUL BENTLEY - DailyMail.co.uk
As thugs have wreaked havoc with riots throughout the UK, many have speculated about what authorities should have done to put the violence to a swift end.
And it appears the U.S. has already got detailed plans in place should similar uprisings sweep across the Atlantic.
Experts have revealed that the military would immediately be drafted in - patrolling the streets with police officers and securing important buildings, landmarks and bridges.
The operational plans, named CONPLAN 3501 and 3502, are said to have been drafted to combat mass outbreaks of disruption.

Franken Calls for Oversight of Ratings Agencies
By Joe Conason - Truthdig.com
With world markets suddenly sagging under the weight of Standard & Poor's Aug. 5 downgrade of Treasury bonds, Sen. Al Franken, D-Minn., is disturbed by the monopolistic power of the ratings agencies — and still determined to curb their abuses, as he tried to do last year with an amendment to the Dodd-Frank banking reform bill.
In an exclusive Monday interview for The National Memo, the Minnesota Democrat said that the misconduct of the ratings agencies led directly to the economic catastrophe that S&P’s rating decision has made even worse. Franken wondered aloud why his proposed reforms of the ratings industry should still be subject to "study" rather than action by the Securities and Exchange Commission.

Homeowner mortgage write-off may be in jeopardy
Decisions in coming weeks by the 12-member bipartisan congressional committee tasked with reducing the federal deficit could affect mortgage interest deductions.
By Kenneth R. Harney - LATimes.com
Reporting From Washington— If you take mortgage interest tax deductions, the next 100 days could have significant financial implications for you because of Congress' new federal debt ceiling plan.
Although the compromise legislation itself involved no new taxes, it created an unusual mechanism — an evenly split, 12-member bipartisan super-committee that could call for major cutbacks on real estate write-offs by Thanksgiving.
All it will take is a single vote by a lone senator or House member who breaks with his or her party to put the mortgage interest deduction into serious play.

APPEALS COURT PANEL STRIKES DOWN HEALTH LAW MANDATE
Truthdig.com
A federal appeals court panel ruled Friday against the part of President Obama’s new health care law that required most Americans to purchase health insurance or suffer some penalty. The three-judge panel of the 11th U.S. Circuit Court of Appeals sided with 26 states that had sued to block the law. The White House condemned the ruling.—ARK
The New York Times:
A federal appeals court panel on Friday struck down the requirement in President Barack Obama’s health care overhaul package that virtually all Americans must carry health insurance or face penalties.
The divided three-judge panel of the 11th Circuit Court of Appeals struck down the so-called individual mandate, which is considered the centerpiece of the law, siding with 26 states that had sued to block the law. But the panel didn’t go as far as a lower court that had invalidated the entire overhaul as unconstitutional.

Obama's Health-Care Law
Moves Toward Supreme Court With Appeals Ruling
By Andrew Harris - Bloomberg.com
President Barack Obama’s health-care law moved closer to review by the U.S. Supreme Court with a federal appellate ruling that its requirement for most Americans to have insurance coverage is unconstitutional.
The 2 to 1 ruling conflicts with an earlier decision by a federal appeals panel in Cincinnati, which upheld the individual mandate. The provision exceeds Congress’s power to regulate commerce, the U.S. Court of Appeals in Atlanta ruled yesterday, affirming in part a lower court in a lawsuit filed by 26 states.
"This guarantees that the Supreme Court will rule on the constitutionality of the individual mandate, and makes it very likely that the court’s ruling will come by the end of June 2012," said Kevin Walsh, an assistant professor at the University of Richmond School of Law in Virginia.

US postal workers face massive job losses
Postmaster General Patrick Donahoe
wants to cut 220,000 jobs in four years
By Simon Bowers - Guardian.co.uk
The US Postal Service has announced radical plans to cut one in five jobs, reduce services and water down staff retirement and healthcare deals as the government agency struggles to keep costs in line with plunging demand.
Among proposed cutbacks to services, many of which will require legislative changes, is a plan to reduce mail delivery from six days a week to five. Postmaster General Patrick Donahoe wants to remove 220,000 posts in four years and believes about 120,000 of them will have to be layoffs – pitching him at loggerheads with unions.
In an official statement, the US Postal Service (USPS) said: "Our most significant area of cost is in compensation and benefits, and one key driver of those costs is simply the sheer size of our workforce.

Clock ticking on Postal Service budget crisis
By Jennifer Liberto @CNNMoney
WASHINGTON (CNNMoney) -- With 120,000 post office workers facing layoffs and thousands more facing benefits changes, lawmakers will soon be required to make some tough choices -- meaning that those choices are likely to be postponed until the last minute.
With the U.S. Postal Service on the brink of insolvency, it's pitching bold plans to shrink its workforce, change benefits and cut offices.
"The Postal Service will be insolvent next month due to significant declines in first-class mail volume, the effects of a congressional mandate to prefund retiree health benefits, and increases in network costs, wages and benefits," the Postal Service said in a Friday statement. "To return to financial stability, the Postal Service seeks legislative changes."

It's easy to ignore the spies in our midst
Those daily deal coupons seem fun and harmless, but experts say marketing firms are in an 'arms race' to collect data about who we are and how we live. Right now, there are few limits on what they can do. -- By Sandy Banks - LATimes.com
My daughter thinks they are spying on us.
The "74% Off Haircut Package" offer arrived from Groupon just as she was putting away her credit card, after paying the bill at her beauty salon.
Amazon's "Half Off Carpet Cleaning" coupon showed up on her cellphone moments after a friend's text message about getting the carpets cleaned at his house.
Daily Deal's "Laser Vision Correction" discount landed in my inbox while I was walking out of my optometrist's office, with a new pair of eyeglasses in my purse.
Conspiracy or coincidence?

War is killing us
by ROBERT HAMBURGER
It matters not whether it’s Korea, Vietnam, Grenada, Iran, Iraq, or Afghanistan, the war machine profits by selling us conflicts. To the tune of two billion dollars a day.
Supporting war is support for less money in your pocket and more money for defense contractors. Make no mistake: War is a (huge) moneymaker, and it costs all of us dearly. The official defense budget is $700 billion, yet by the time you add in homeland security, CIA, NSA, veterans’ benefits, foreign aid, and other overt/covert U.S. activities, more than $1.2 trillion is allocated to war/conflict – or one-third of our government's expenditures.

Hillary Clinton calls on countries to boycott Syria
US wants nations with close economic links to Bashar al-Assad's regime to follow it in sanctioning Syria's oil and gas industry
Agencies - Guardian.co.uk,
The United States has for the first time called on countries to stop buying Syrian oil and gas as it seeks to build pressure on the country's president Bashar al-Assad to end a brutal crackdown against protesters.
The US secretary of state, Hillary Clinton, hinted that Washington might be making some headway in persuading European nations, China and India to curtail their energy ties with Syria, saying "stay tuned" when asked what progress had been made.
Clinton has said that the best way pressure Syria into stopping its crackdown on protesters calling for the end of the Assad regime was to boycott its oil and gas sector. This, however, would largely fall to other nations because there is little US involvement.

Syrian Ships Attack Port City of Latakia
Libyan Rebels Advance on Tripoli
By Tony Capaccio and Glen Carey - Bloomberg.com
Syrian forces killed 26 people as they pressed forward with their assault on the Mediterranean port city of Latakia yesterday, Al Arabiyatelevision reported.
The soldiers, backed by tanks and warships, also left 70 people injured, Mahmoud Merhi, head of the Arab Organization for Human Rights, said in a telephone interview from Damascus. Separately, armed groups in Syria killed four Syrian soldiers across the country, according to news agency SANA.
"We are in a state of a real war, shelling and shooting everywhere in the city," Abu Rayan, an eyewitness from the Al- Raml district in southern Latakia told Al Arabiya. "The situation is bad and there is a lack of water and electricity."

Pakistan Lets China See US Helicopter
By: Anna Fifield in Washington, TC.com - CNBC.com
Pakistan allowed Chinese military engineers to photograph and take samples from the top secret stealth helicopter that U.S. special forces left behind when they killed Osama bin Laden, the Financial Times has learnt.
The action is the latest incident to underscore the increasingly complicated relationship and lack of trust between Islamabad and Washington following the raid.
"The U.S. now has information that Pakistan, particularly the ISI, gave access to the Chinese military to the downed helicopter in Abbottabad," said one person in intelligence circles, referring to the Pakistani spy agency. The Chinese engineers were allowed to survey the wreckage and take photographs of it, as well as take samples of the special "stealth" skin that allowed the American team to enter Pakistan undetected by radar, he said.

Fukushima Nuclear Disaster: Radiation Deception Continues
Dr. Mark Sircus - SilverBearCafe.com
Plants are dying in the middle of central Tokyo and it could be because of the increase in radiation. One irony of the radioactive fallout from Fukushima is that people in Japan are starting to pay more attention to nature. The picture above was taken on the sidewalk of Hakusan Dori in Bunkyo-ku in Tokyo, and was uploaded on July 30.
The air radiation in Bunkyo-ku has been higher than the official Tokyo number (measured in Shinjuku-ku, western central Tokyo), along with several other eastern "ku" (special wards of Tokyo). The person who took the picture says, "About 30% of azaleas on the sidewalk are completely dead. Ginkgo leaves are browning."

Lord Acton, The History of Freedom 1/3 (Lecture 32)

Lord Acton, The History of Freedom 2/3 (Lecture 32)

Lord Acton, The History of Freedom 3/3 (Lecture 32)

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Friday 08.12.2011

Most Americans say U.S. on wrong track
Reuters/Ipsos poll
By Steve Holland
(Reuters) - Economic fears are weighing heavily on Americans, with a large majority saying the United States is on the wrong track and nearly half believing the worst is yet to come, a Reuters/Ipsos poll said Wednesday.
The poll reflected growing anxiety about the U.S. economy and frustration with Washington after a narrowly averted government default last week, a credit rating downgrade by Standard & Poor's, a stock market dive and a stubbornly high 9.1 percent jobless rate.
President Barack Obama was politically bruised in the brutal, weeks-long debt debate, and negative views on the economy are worrisome signs for his 2012 re-election bid.

Bernanke Says Buy Stocks, Or Else!
Written by John Thomas, Mad Hedge Fund Trader - OilPrice.com
I believe that the risk markets are discounting a recession that isn’t going to happen. Not yet, anyway. So I am going to start adding some small, limited risk call options here.
After analyzing the statement from the Federal Reserve yesterday, it is clear that Ben Bernanke is holding a gun to your head, threatening to pull the trigger if you don’t buy stocks.
By taking the ten year Treasury bond yield down to 2.0%, some 80% of equities now have dividend yields greater than bonds. A substantial number of companies are paying dividends double or more the ten year yield. This is unprecedented in economic history. Take a look at the yields of some of the most conservatively run companies:

Whiplash for stocks may be the new norm
At least for the time being, stock investors need to brace for volatility, many on Wall Street say.
By Nathaniel Popper, Los Angeles Times
Reporting from New York— Wall Street's gut-wrenching turbulence in the last six trading days has sent many investors into a state of paralysis, watching helplessly as the Dow Jones industrial average swoons 520 points one day only to soar 430 the next.
Many American's can't help but make the comparisons to the financial crisis of 2008. This kind of whipsaw stock trading triggers panic and torpedoes confidence, leading many to abandon stocks altogether.
The Dow roared 423 points higher Thursday to 11,143.31 — the 11th-largest gain in the blue-chip index's history. It follows a 634-point plunge Monday and a 519-point drop Wednesday, the Dow's sixth- and ninth-largest by points. But on Tuesday, the Dow soared 429 points.

The gold rush is on
By Annalyn Censky - Money.CNN.com
NEW YORK (CNNMoney) -- Fear is high and investors are fleeing to gold.
Amid a volatile stock market, Europe's debt woes and concerns about a weak U.S. economy, gold touched a new high above $1,800 earlier this week.
It has fluctuated since, and is now back down around $1,750.
Nevertheless, the surge was shocking, considering just earlier this year, the precious metal traded at about $1,400 an ounce. Five years ago, gold cost less than $500.
Granted, the gold market is small compared to stocks or bonds, so it can be dramatically influenced much more easily -- but the numbers can't be disputed -- a gold rush is on.

Robert Rubin, Bank America and the fate of the dollar
InstitutionalRiskAnalytics.com
This week in The Institutional Risk Analyst, we take a look at the latest week of inaction and indecision on the part of the leaders of the G-10 nations. Never has doing absolutely nothing taken so much time and garnered so much market and media attention. If the nothing doing dance by Barack Obama, Nicholas Sarkozy and Angela Merkel reaches a much higher frequency, life as we know if is definitely going to change big time. And that change may include altering the international role of the dollar, a change regarding which neither Congress nor the American people have been consulted.
The reason for the inaction in Washington, needless to say, has to do with the vacuum surrounding President Obama, a lack of political substance which stems from the continuing influence, nay hegemony, of former Citigroup Chairmen Robert Rubin and his minions. Older more experienced Rubin operatives such as Larry Summers have already abandoned the sinking ship, but Treasury SecretaryTimothy Geithner remains, we are told, until Rubin gives him permission to leave the table.

What Can Replace the Dollar?
Barry Eichengreen - ProjectSyndicate.com
BERKELEY – For more than a half-century, the US dollar has been not only America’s currency, but the world’s as well. It has been the dominant unit used in cross-border transactions and the principal asset held as reserves by central banks and governments.
But, already before the recent debt-ceiling imbroglio, the dollar had begun to lose its luster. Its share in the identified foreign-exchange reserves of central banks, for example, had fallen to just over 60%, from 70% a decade ago.
The explanation is simple: the United States no longer dominates the world economy to the extent that it did in the past. It makes sense that the international monetary system should follow the global economy in becoming more multipolar. Just as the US now has to share the world stage with other economies, the dollar will have to make room for other international currencies.

The British Riots
By Hal G.P. Colebatch - The American Spectator.org
Without in any way seeking to minimize the horror and tragedy of the Norwegian gun massacre, the British riots in a way seem more serious. The Norwegian killings were the work of a lone madman, who at most was possibly encouraged by a very small group of associates. The madman seems to have thought he was furthering some kind of cause, even if it is impossible to say exactly what.
The British riots, however, had no cause. A suspected drug-dealer was apparently shot by police in London, and cities all over the country have gone up in smoke. It is as if the country has been living on a ticking bomb that no one was aware existed.

Cameron looks to U.S. for solutions on gangs
By Danica Kirka and Jill Lawless - AP - WashingtonTimes.com
LONDON — Prime Minister David Cameron said Thursday that Britainwould look to the United States for solutions to gang violence after nights of riots and looting.
He also promised authorities would get strong powers to stop street mayhem erupting again.
Mr. Cameron told lawmakers he was "acting decisively to restore order on our streets," as police raided houses to round up suspects from four nights of unrest in London and other English cities.
Acknowledging that police had been overwhelmed by roving groups of looters in the first nights of the rioting, Mr. Cameron said authorities are considering new powers, including allowing police to order thugs to remove masks or hoods, evicting troublemakers from subsidized housing and temporarily disabling cellphone instant-messaging services.

Desperate Swiss eye euro peg to repel safe-haven flood
Switzerland is mulling drastic measures to fend off safe-haven flows from Euroland and stop the relentless rise of the Swiss franc crippling large parts of the country's economic base.
By Ambrose Evans-Pritchard - Telegraph.co.uk
The franc retreated against the euro in a wild-one day move on Thursday after top officials at the Swiss National Bank (SNB) floated ideas for a temporary euro peg, a once unthinkable move.
"Nothing is excluded," said Jean-Pierre Danthine, a SNB board member. "The situation is extremely complex and difficult. There is no magic wand."
The Swiss franc has moved with gold over recent weeks, acting as a magnet for capital flight from the discredited debt currencies of West. The SNB said the franc is "massively overvalued" and has moved into dangerous territory over the past month.

Italy turns on the 'parasites on society' in tax clampdown
Italy has launched a hard-hitting television campaign against the country's endemic tax evasion as Silvio Berlusconi's government tries frantically to reassure Europe and the markets that it can reduce its massive public debt and avoid a Greek-style meltdown.
By Nick Squires, Rome - Telegraph.co.uk
The television, radio and poster campaign portrays tax dodgers as blood-sucking parasites feeding off honest, hard-working Italians who pay their dues to the inland revenue service.
Television advertisements show a range of stomach-churning bugs under the microscope, including weevils, worms and ticks, and then the image of a shifty-looking man with the caption "a parasite on society".
"People who live off other people's taxes damage everybody," the advertisement warns. "Combating tax evasion is in your interest."

France, Spain, Italy, Belgium Try to Halt Bank Rout
By Howard Mustoe and Jim Brunsden - Bloomberg.com
France, Spain, Italy and Belgium will impose bans on short-selling from today to stabilize markets after European banks including Societe Generale SA hit their lowest level since the credit crisis.
"While short-selling can be a valid trading strategy, when used in combination with spreading false market rumors this is clearly abusive," the European Securities and Markets Authority, which coordinates the work of national regulators in the 27-nation European Union, said in a statement after talks ended late yesterday. National regulators will impose the bans "to restrict the benefits that can be achieved from spreading false rumors or to achieve a regulatory level playing field."

EU Heads for Eurobond Clash Over Fiscal Union
By James G. Neuger - Bloomberg.com
European ratification of a reinforced crisis-management fund will act as a prelude to an even more divisive debate: whether to put more money into the pool and use it to borrow on behalf of all 17 euro states.
The question of “eurobonds” or “fiscal union” -- toxic language in northern countries like Germany -- will force itself onto the agenda once the retooled rescue fund is in place as soon as next month.
The trigger will be a European Commission feasibility study of jointly sold eurobonds, seen by a growing number of economists as the only way of guaranteeing to the markets that countries such as Italy won’t go bust. Unprecedented bailouts by governments and the European Central Bank have so far failed to stamp out the crisis that is menacing the region’s core members.

Turkey Joins Greece, South Korea
in Curbing Short Sales After Global Rout
By Michael Patterson and Benjamin Harvey - Bloomberg.com
Turkey moved to curb short sales and threatened "severe penalties" for stock manipulation, joining nations from Greece to South Korea in trying to stem bearish bets after the worst tumble in global shares since 2008.
The minimum cash or equity required to initiate a short sale on theIstanbul Stock Exchange was raised to 70 percent from 50 percent, according to an e-mailed statement from Turkey’s Capital Markets Board today. In a short sale, an investor borrows a security and sells it, expecting to profit from a decline by repurchasing it later at a lower price.

Lenders' fears could raise interest on student loans
By Ben Wolfgang - The Washington Times
As if rising tuition costs weren’t enough, many college students could soon face higher interest rates on their student loans, another potential aftershock of last week’s U.S. credit downgrade by Standard & Poor’s.
Federal lending such as the popular Stafford loan program will be unaffected because the interest rates are fixed at 3.4 percent. But private loans from banks usually come with variable rates, making them vulnerable to volatility in the stock market and lenders’ fears that, with the economy still in turmoil and jobs in short supply, students will be unable to repay their debts.

America Suffers When People Quit Moving Up
By James Fallows - TheAtlantic.com
Let me kick off my part of the discussion here with a theme that is less strictly economic than political-economic-cultural. And maybe it's too meta a point in general, but it's what first comes to my mind when I think about the narrowing horizon for the American middle class. It applies all the more fiercely as we confront at least the possibility of another sustained period of darker rather than brighter prospects for the economy as a whole.

'Made in the USA' Requirement Pushed As Job-Creator for California
By Susan Jones
(CNSNews.com) - Liberal activists -- with a dig at tea party conservatives -- are pushing a California ballot initiative intended to bring jobs to the state by requiring state and local government agencies to buy only "Made in the USA" products.
"The Tea Party gridlock and paralysis in Washington and Sacramento requires middle-class voters to take action to bring back jobs," said Jim Gonzalez, a proponent of the initiative and a former finance chair of the San Francisco County Board of Supervisors. "The Bring Manufacturing Jobs Back to California Act would end the decline of manufacturing jobs that is at the root of our economic crisis."

End of the Energy Subsidy Gravy Train
Written by Gary Hunt, MasterResource - OilPrice.com
The drama that raised the national debt ceiling without increasing taxes is sending warning shots across the bow for many industries. The message for energy subsidies, including the tax credits and treasury tax grants for wind and solar, as well as tax credits for oil and gas companies, could not be clearer. The gravy train is ending because the Government cannot afford it, and political realities won’t tolerate it much longer.
The debt deal did not cut renewable energy subsidies. But it set up a super committee of Congress that must produce $1.3 trillion in spending cuts by Thanksgiving. This sets up a ruthless competition between all the special interest causes that now get subsidies or tax supported benefits.
Mothers and grandmothers will be sacrificed by the lobbyists on K Street to keep their subsidies. But which ones might survive, and to what extent?

Obama Visits Corporation
Where His Stimulus Created 'Green' Jobs at $2 Million Per Job
By Fred Lucas - CNSNews.com
(CNSNews.com) – President Barack Obama on Thursday toured a vehicle battery plant in Michigan, touting his administration's focus on green technology and jobs, at a corporation where federal money authorized by the economic stimulus law that Obama signed at the beginning of his presidency had created "green" jobs at a cost of about $2 million in federal subsidies per job.
Obama told the employees of Johnson Controls Inc., in Holland, Mich., gathered at the factory that they represented how America can come out of a recession by making products that can be sold around the world.

Postal Service plans to cut 120,000 jobs
By Steve Goldstein
WASHINGTON (MarketWatch) -- The U.S. Postal Service is proposing to cut 120,000 jobs by 2015 and withdraw its employees from federal health and retirement plans, The Washington Post reported Thursday, citing a notice to employees. Some of the 120,000 cuts would come from buyouts but a significant number would come from layoffs. Union contracts prohibit those layoffs so the plan would need Congress's approval, the report said.

Postal Service mulls 20 percent workforce cut
By Erik Wasson - TheHill.com
The U.S. Postal Service is contemplating asking Congress to enact legislation that will allow it to rapidly lay off 20 percent of its workforce, according to internal documents.
A USPS discussion draft says that the service can only afford to employ 425,000 workers by 2015 and it needs to layoff 120,000 workers and to have 100,000 workers leave the service voluntarily to reach that level.
USPS is facing insolvency in September due to massive retirement system pre-payments it is required to make. Officials are prepared to brief congressional staff in the coming days on possible paths to solvency that go beyond an existing USPS request to avoid the pre-payment.

Postal Service asks Congress
to allow 120,000 layoffs, overhaul benefits
By Laurie Segall @CNNMoney
NEW YORK (CNNMoney) -- Hundreds of thousands of postal workers could soon lose their jobs, or face drastic changes to their benefits.
According to documents obtained by CNNMoney, the United States Postal Service is appealing to Congress to remove collective bargaining restrictions in order to lay off 120,000 workers. It also wants congressional approval to replace existing government health care and retirement plans.
The post office claims it needs to eliminate 220,000 positions, or more than 30% of its staff by 2015, but only 100,000 of those positions can be made through attrition. The other 120,000 must come from lay offs, according to the documents.

Postal Service proposes cutting 120,000 jobs,
pulling out of health-care plan
By Joe Davidson - WashingtonPost.com
SEATTLE — The financially strapped U.S. Postal Service is proposing to cut its workforce by 20 percent and to withdraw from the federal health and retirement plans because it believes it could provide benefits at a lower cost.
The layoffs would be achieved in part by breaking labor agreements, a proposal that drew swift fire from postal unions. The plan would require congressional approval but, if successful, could be precedent-setting, with possible ripple effects throughout government. It would also deliver a major blow to the nation’s labor movement.

Lenders’ fears could raise interest on student loans
By Ben Wolfgang-The Washington Times
As if rising tuition costs weren’t enough, many college students could soon face higher interest rates on their student loans, another potential aftershock of last week’s U.S. credit downgrade by Standard & Poor’s.
Federal lending such as the popular Stafford loan program will be unaffected because the interest rates are fixed at 3.4 percent. But private loans from banks usually come with variable rates, making them vulnerable to volatility in the stock market and lenders’ fears that, with the economy still in turmoil and jobs in short supply, students will be unable to repay their debts.

The Higher-Education Bubble Has Popped
Mises Daily: Wednesday, August 10, 2011 by Doug French
A college degree once looked to be the path to prosperity. In an article for TechCrunch, Sarah Lacy writes, "Like the housing bubble, the education bubble is about security and insurance against the future. Both whisper a seductive promise into the ears of worried Americans: Do this and you will be safe."
But the jobs that made higher education pay off during the inflationary boom, kicked into high gear by Nixon waving goodbye to the last shreds of a gold standard, came primarily from government and finance.
In 1990, 6.4 million people worked for federal, state, and local governments. By 2010, that number had grown almost 6 times — to 38.3 million — with many of these jobs being white-collar.

The Quiet War Against Wyoming's Wild Horses
How can a state promote its wild horses as a tourist attraction while it seeks to decimate herds?
By Andrew Cohen - TheAtlantic.com

Listen for the sound of hooves pounding. Look for manes flying in the wind. Feel the rush of awe at the sight of these creatures. The Pilot Butte Wild Horse Scenic Loop Tour is something you and your family will never forget because Sweetwater County's cherished wild horses are living examples of a wide-open landscape and untamed frontier spirit.
--Wyoming Tourism Board

The Wyoming Tourism Board wants you and your family to come see the wild horses in Sweetwater County, but you better go quick. Beginning next month, federal officials and local contractors will roundup and remove approximately 700 of those horses (about 70 percent of the herd) to satisfy the complaints of the cattle and sheep ranchers in the area who don't want to share land with federally-protected horses. The "cherished," "living examples" of Wyoming's western heritage will be penned in and then given up for adoption or sold at auction. Many will soon die. Some may even be slaughtered for meat. All will likely be gone from view in Sweetwater County. You and your family, having traveled to southwestern Wyoming, may be plum out of luck.

The Growing Bipartisan Consensus on Obama
By R. Emmett Tyrrell - PatriotPost.com
Washington: Who on Aug. 18, 2010 -- almost one year ago -- said, "I now think it is clear even to official Washington that President Obama is the worst president of modern times. President Jimmy Carter is redeemed"? Yes, it was I. And I threw the entire weight of The American Spectator behind that asseveration, putting both Jimmy and Barry on the cover.
Now, of course, others are stepping forward and drawing the awkward comparison. On the left, there is Maureen Dowd in The New York Times quoting an anonymous Democratic senator who laments that "we are watching him turn into Jimmy Carter right before our eyes." Apparently, the left-wing fussbudget Eric Alterman made the same comparison in U.S. News and World Report.

HHS: Obamacare-Funded Health Centers for 'Migrants'
Won't Check Immigration Status
By Matt Cover - CNSNews.com
(CNSNews.com) - The Department of Health and Human Services (HHS) announced on Tuesday that it has awarded $28.8 million to 67 community health centers with funds from the Obamacare health reform law.
Of that $28.8 million, "approximately $8.5 million will be used by 25 New Access Point awardees to target services to migrant and seasonal farm workers," Health Resources and Services Administration (HRSA) Spokeswoman Judy Andrews told CNSNews.com. HRSA is a part of HHS.
Andrews said that grant recipients will not check the immigration status of people seeking services.

Supercommittee member Rep. Becerra
to be feted by lobbyists at DC fundraiser
By Alexander Bolton - TheHill.com
Mere hours after House Democratic Leader Nancy Pelosi (D-Calif.) named Rep. Xavier Becerra (D-Calif.) to the debt-reduction supercommittee, lobbyists were gearing up to fete him at a fundraiser later this month.
The Investment Company Institute, which according to public records has already spent $2.4 million lobbying Congress this year, on Thursday touted a fundraiser for Becerra scheduled for Aug. 31.

Super committee: Who are these guys?
By Charles Riley @CNNMoney
NEW YORK (CNNMoney) -- They are the "super committee" -- and they have a lot of work to do.
Almost all men -- they are the 12-member panel charged with finding anadditional $1.5 trillion in debt savings over a ten-year period.
It will be tough work and will likely require political sacrifice on issues like taxes and entitlements if meaningful progress is to be made toward stabilizing the national debt.
On Thursday, House Minority Leader Nancy Pelosi weighed in with her three Democratic picks: James Clyburn, Xavier Becerra and Chris Van Hollen.

Supercommittee: Super or surly?
Pelosi picks final members to forge debt deal
By Stephen Dinan-The Washington Times
The 12-member supercommittee tasked with straightening out the country’s fiscal mess is long on lawmakers who have already whiffed in recent months on chances to strike deals and short on those who have shown a readiness to make the compromises that all sides say will be needed.
Four of the members helped defeat an agreement reached in last year’s failed deficit commission, and another three were part of the group led by Vice President Joseph R. Biden that stalled in July, unable to reach a deal to raise the debt ceiling.

All 6 Democrats on Deficit-Reduction Pane
Earned 'F's From Taxpayers' Union
By Terence P. Jeffrey - CNSNews.com
(CNSNews.com) - All six Democrats that have been assigned to the special joint congressional committee that will recommend means for cutting the nation’s anticipated spending by $1.5 trillion over the next ten years compiled voting records last year that earned them grades of “F” from the National Taxpayers Union (NTU).
House Minority Leader Nancy Pelosi (Calif.) announced today that she has assigned Assistant Democratic Leader James E. Clyburn (S.C.), Democratic Caucus Vice Chairman Xavier Becerra (Calif.) and Budget Committee Ranking Member Chris Van Hollen (Md.) to serve on the panel. Previously, Senate Majority Leader Harry Reid had named Sen. Patty Murray (Wash.), Sen. John Kerry (Mass.) and Senate Finance Chairman Max Baucus (Mont.) to serve on the committee.

If You Love Food, This Should Make You Angry
KitchenLore.com
The State of Illinois is shutting down local, artisan ice cream makers for such terrible offenses as using fresh fruit instead of fruit syrup and fresh cream instead of pre-packaged soft serve mix. What, you say? How can this be? Health officials in this state are known for being overzealous when it comes to making sure that small, independent businesses follow obscure rules - and when I say small and independent, I'm talking about businesses that are often owned and run by 1-2 people renting space in a shared, licensed commercial kitchen. These are not corporations with large amounts of money who have the capital to hire lawyers or contribute significant sums to political campaigns. No, these are real people, individuals who do their best to follow labyrinthine food regulations based on the information that they're given by governmental agencies who don't always agree on what the rules should be.

Our addiction to technology trumps caffeine, chocolate and alcohol
By Shan Li - LATimes.com
This probably sounds familiar: You're out to dinner with friends, and everything's fun, until you get that itch. It's been 20 minutes, and you really want to check Facebook, or Twitter, or Foursquare or email. Forget about wanting; this is needing. You finally give in to the urge and sneakily check your phone under the table -- or fake an urgent visit to the bathroom, where you'll take a hit of the Internet while huddling in a stall.
Anecdotally, our Internet use seems to have spawned real addictions. And according to several recently released surveys, we've got it bad.
More than half of Americans would rather give up chocolate, alcohol and caffeine for a week before parting temporarily with their phones, according to a recent survey by technology firm TeleNav.

Electronic skin tattoo has medical, gaming, spy uses
Breitbart.com
A hair-thin electronic patch that adheres to the skin like a temporary tattoo could transform medical sensing, computer gaming and even spy operations, according to a US study published Thursday.
The micro-electronics technology, called an epidermal electronic system (EES), was developed by an international team of researchers from the United States, China and Singapore, and is described in the journal Science.
"It's a technology that blurs the distinction between electronics and biology," said co-author John Rogers, a professor in materials science and engineering at the University of Illinois at Urbana-Champaign.

Military loses contact with hypersonic test plane
by David Alexander; Editing by Anthony Boadle
(Reuters) - An unmanned experimental aircraft designed to glide down from the upper atmosphere at 20 times the speed of sound lost contact with ground control on its second test flight on Thursday, a Pentagon agency said.
The Falcon HTV-2 was launched from Vandenberg Air Force Base in California on a rocket and successfully separated from the launch vehicle, the Defense Advanced Research Projects Agency said.
The arrowhead-shaped plane was expected to separate from the rocket near the peak of its ascent and glide back to earth, reaching hypersonic speed before rolling and plunging into the Pacific ocean, according to a test diagram posted online.

DARPA issues statement on failed flight of hypersonic aircraft
By W.J. Hennigan - LATimes.com
The Defense Advanced Research Projects Agency released a statement on today’s flight of the Falcon Hypersonic Technology Vehicle 2.
According to the statement, DARPA, as the agency is known, said that everything was going to plan up until the glide phase, which occurred about nine minutes into flight.
As we reported earlier: The Falcon launched at 7:45 a.m. from Vandenberg Air Force Base, northwest of Santa Barbara, into the upper reaches of Earth's atmosphere aboard an eight-story Minotaur IV rocket, made by Orbital Sciences Corp.
After reaching an undisclosed sub-orbital altitude, the aircraft jettisoned from its protective cover atop the rocket, then nose-dived back toward Earth, leveled out and began to glide above the Pacific at 20 times the speed of sound, or Mach 20.
Then the trouble began.

Pentagon’s Mach 20 Missile Lost Over Pacific — Again
By Noah Shachtman - Wired.com
For the second time in a row, the Pentagon has lost contact with an experimental hypersonic vehicle over the Pacific, just minutes after it was launched from space.
The flight of the Falcon Hypersonic Technology Vehicle 2 was hotly anticipated in military and aerospace circles. The HTV-2 was supposed to ride on the back of a rocket to the edge of space, where it would separate and scream through the atmosphere at 13,000 mph before splashing into the Pacific Ocean, about 4,100 miles and 30 minutes later.
If the flight worked, it’d show how missiles of this shape and flight pattern could strike targets halfway around the world almost instantly. And that would be a major step forward in the Pentagon's "Prompt Global Strike" plan to attack foes anywhere on the globe in less than an hour. For now, however, those hopes have been dashed.

US poised to call for Syria's Assad to go
By Lachlan Carmichael (AFP)
WASHINGTON — The United States has decided to call explicitly for Syrian President Bashar al-Assad to step down, officials said Thursday, as Washington groped for ways to stop a deadly protest crackdown.
The expected announcement would come as the Obama administration presses for tougher international sanctions on a regime bent on crushing a pro-democracy movement.
The White House said President Barack Obama and Turkish Prime Minister Recep Tayyip Erdogan agreed during a phone call Thursday on the need for a "transition to democracy" in Syria.
The Obama administration has been steadily ratcheting up pressure on Assad, who has been deaf to growing international calls to stop a crackdown that human rights groups say has killed more than 2,000 people since mid-March.

Bait in the bear trap...
Jay Carney: Watching Syria 'with horror'
By JENNIFER EPSTEIN - Politico.com
The U.S. has dramatically ratcheted up the pressure on Syrian President Bashar Assad, slapping new sanctions on key companies Wednesday as White House press secretary Jay Carney said the leader is guilty of “heinous actions” and the country would be better off without him.
"We are all watching with horror at what he is doing to his own people," Carney said.
Carney, who acknowledged to reporters that the Obama administration is toughening its stance on Assad’s regime, said the government there must "respect and act upon the clear demands of the Syrian people."
"The most important thing we can do is make sure that our actions back up our words," he said.

Iraq haunts plans for post-Gaddafi Libya
By Tom Coghlan - The Australian.com.au
WESTERN governments have helped prepare a blueprint for a post-Gaddafi Libya that would retain much of the regime's security infrastructure to avoid an Iraq-style collapse into anarchy.
The 70-page plan, obtained by London's The Times, charts the first months after the fall of the Gaddafi regime. The document was drawn up by the National Transition Council in Benghazi with Western help.
Officials say the blueprint draws on lessons from the disastrous regime change in Iraq in 2003 and the rebel takeover in eastern Libya in March.

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Archived Page Link
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Thursday 08.11.2011

The Stock Market Crash Of 2011?
TheEconomicCollapseBlog.com
How far does the stock market have to go down before we officially call it a crash? The Dow is now downmore than 2,000 points in just the last 14 trading days. So can we now call this "The Stock Market Crash of 2011"? Today the Dow was down 519 points. Yesterday, an announcement by the Federal Reserve indicating that the Fed would keep interest rates near zero until mid-2013 helped the Dow surge more than 400 points, but all of those gains were wiped out today. It turns out that the Federal Reserve was only able to stabilize the financial markets for a single day. Fears about the European sovereign debt crisis and the crumbling U.S. economy continue to dominate the marketplace. With each passing day, things are looking more and more like 2008 all over again. So what is going to happen if "The Stock Market Crash of 2011" pushes the U.S. economy into "The Recession of 2012"?

Dow Drops 520 Amid New Europe Debt Concern
By Stephen Kirkland and Rita Nazareth - Bloomberg.com
Stocks slid, dragging the Dow Jones Industrial Average to the lowest level since September 2010, and Treasuries rose for a third day amid concern the European sovereign debt crisis is worsening. The dollar climbed versus 13 of 16 major peers, with the euro losing 1.3 percent to $1.4190. Gold futures surged to a record above $1,800 an ounce.
The Dow sank 519.83 points, or 4.6 percent, to 10,719.94 at the 4 p.m. close in New York. The Standard & Poor’s 500 Index sank 4.4 percent to 1,120.76 following its biggest jump in more than two years yesterday, when it rebounded from its worst loss since 2008. The Stoxx Europe 600 Index plunged 3.8 percent as Societe Generale SA sank 15 percent. Ten-year Treasury yields, which touched an all-time low yesterday, fell 16 basis points to 2.09 percent after an auction drew a record-low yield. Costs to protect French debt reached a record.

Calling for a 'global' solution = begging NWO to take charge?

Can anything douse the economic flames?
A global solution must be found to put out the fires that threaten our economies. -- By Jeremy Warner - Telegraph.co.uk
Lawlessness on city streets, mayhem in financial markets, warnings of civil war in Europe, Parliament recalled, a double-dip recession looming and the mighty US dollar stripped of its AAA credit rating – there’s an unmistakable end-of-the-world air about this extraordinary confluence of anarchy, panic, anger and bewilderment. Rarely has our post-war prosperity and stability seemed so much under threat.
Only an apologist would link the criminality of the riots with the extreme challenges faced by the global economy, but the coincidence of these problems is impossible to ignore. Social breakdown seems to mirror apparent economic paralysis. Criminals can be locked up, but is there anything that can still be done to douse the economic flames?
The prevailing narrative is that there is not. We've chucked everything up to and including the kitchen sink at the problem, and it’s just not working.

5 Reasons Why American Riots Will Be The Worst In The World
By Silver Shield - SilverBearCafe.com
I wrote an article called 5 Places NOT To Be When The Dollar Collapses
In it I wrote that societies that benefited the most from the dollar would be the worst places to be when it fell apart. While the dollar has not even collapsed yet, the strain in these areas is becoming more apparent. England is number 3 on the list has had 4 days of violent riots as people start to lose it. Israel is number 1 on that list has hadmassive protests. There is revolution in the air all over theworld except in the US.
America is still in deep denial which is still the first stage of the Awakening
This denial will be wiped away when the dollar collapses. For now the economy is still functioning with food and fuel available. Americans still have the illusion of wealth and normalcy. They still are stuck in the false left right paradigm and think some other sock puppet will turn things around.

MAX KEISER: FINANCIAL APARTHEID IN LONDON
(AND CITIES AROUND THE WORLD) 1/4

LONDON BURNING:
Infowars Special Report on Social Unrest
and Economic Collapse with Max 2/4

LONDON BURNING:
Infowars Special Report on Social Unrest
and Economic Collapse 3/4

LONDON BURNING:
Infowars Special Report on Social Unrest
and Economic Collapse 4/4

Police Were Ordered To Stand Down As London Burned
Inadequate response led public to call for martial law
By Paul Joseph Watson - Infowars.com
Precisely as we reported yesterday on the back of numerous eyewitness reports, it has now emerged that police were ordered to stand down and let London burn during the first few nights of rioting, an action that quickly led to a frightened public to demand troops on the streets, rubber bullets, water cannons and curfews.
On Tuesday we highlighted the "lackluster police response, with numerous reports from the public that police stood back and allowed looters to pillage both large department stores and private small businesses for hours on end."

DESCENT INTO EVIL
BY JOHN HINDERAKER - PowerLineBlog.com
The news from Great Britain has been sickening: riots and looting that began in London have gone on now for three nights, and have spread to other British cities. The riots are uncaused in any rational sense. Some observers associate them with bad economic times, but that is an act of faith. When looters make off with iPod accessories, The Wretched of the Earth, it isn't.
These aren't race riots, either. While quite a few of the looters are immigrants, criminality is perhaps the one sphere in which the U.K. has actually achieved multiculturalism.

Anarchy in the UK (criminal activity, not political protest)
England Riots: 'Stop playing politics, turn your heads to streets!'

Anarchy and Austerity:
Why London Won't Be the Last City to Burn
The Great Recession gave birth to a lost generation across the world, where youth unemployment rates stretch into the 20s, 30s and even 40s. Those millions have responded with violence.
By Derek Thompson - TheAtlantic.com
The riots and fires consuming London are a story about senseless violence and crime. They are also a story about urban politics, race relations, education inequality, and British culture and society. But underneath all of that, they are part of an economic story that is universal.
For the last year, Great Britain has embraced austerity to a degree that would make some American conservatives blush. The purpose of shrinking government was to reduce debt. But the effect has been to kill the economy. With the UK tottering on the razor's edge of recession, consumer confidence is at a record low, unemployment is rising, and even the most optimistic economists predict one-percent expansion for the rest of the year.

Our political leaders seem to be paralysed by crises
A breakdown of social norms and a potential meltdown of the global financial system have exposed a shocking absence of meaningful leadership.
By John McTernan - Telegraph.co.uk
A crisis reveals. It challenges leaders, and exposes whether or not they have the right stuff. As we face a breakdown of social norms in the UK and a potential meltdown of the global financial system, what can we tell about our current generation of political leaders?
The most obvious answer is this: these crises have exposed a shocking absence of meaningful leadership. This is not a comment on the absurd soap opera of whether the Mayor of London and the Prime Minister were going to break off their holidays.

Obama, Geithner Have Math Problem
By Bill Tatro - TownHall.com
Listening to the television talk show pundits this past Sunday, including Austan Goolsbee (one of Obama’s failed economists), and George Will (one of the right’s senior statesman), I find myself in a difficult position.
My predicament is agreeing with the current actions of Standard & Poor’s, and also defending their actions during the credit crisis of 2008. (Has it ever really ended?)
Beginning in 2006, I wrote, lectured, and blitzed the radio airwaves with the ultimate impact of the financial engineered mortgage market.

Fed Said to Draft Rules for Biggest U.S. Banks
Following Basel Standards
By Craig Torres and Cheyenne Hopkins - Bloomberg.com
Federal Reserve officials are drafting rules for the biggest U.S. banks that won't be more stringent than international capital standards agreed to in Basel, Switzerland, according to a person familiar with the discussions.
Federal Reserve Governor Daniel Tarullo cited a "goal of congruence" between the Basel standards and the Fed’s work on rules under the Dodd-Frank Act, which overhauls banking regulation, in a June 3 speech. The central bank hasn’t veered from that, according to the person, who declined to be identified because the rules are still being drafted.
The Basel Committee on Banking Supervision, which includes regulators from the U.S. and Europe, set an additional capital buffer standard for the largest international banks in June that will range from 1 percentage point to 2.5 percentage points of risk-weighted assets. That comes on top of a requirement of 7 percent of common equity for all banks.

Beijing Downgrades US-Treasury to A+ - Is Anybody Listening?
By Gary Dorsch, Editor Global Money Trends newsletter - GoldSeek.com
Of the big-3 credit rating agencies, only the S&P rating agency had the courage and fortitude to speak the truth, about the severe deterioration of America’s financial status. S&P shocked the political establishment in Washington, by following through with its threat to downgrade US Treasury debt to AA+ on the evening of August 5th. S&P added that the US Treasury debt could be downgraded further, if the crooked and inept politicians in Washington haven't taken any meaningful moves to cut the size of its mounting debt.

Nicolas Sarkozy pledges drastic austerity measures
as French bank shares crash
French president Nicolas Sarkozy has ordered a "general mobilization" to slash France's budget deficit in a frantic effort to safeguard the country's AAA rating and head off a downgrade by Standard & Poor's.
By Ambrose Evans-Pritchard - Telegraph.co.uk
Mr Sarkozy returned from the Riviera to chair an emergency meeting in Paris with his inner cabinet and the central bank chief, Christian Noyer, breaking the sacrosanct August holiday.
The key ministries were given one week to draw up radical austerity measures.
"Whatever the impact of global uncertainty, or the S&P's downgrade of America's debt, or the turbulence of the markets, we will take the necessary steps, " said finance minister François Baroin.
The political drama came as swirling rumours set off a collapse of French bank shares.

Bernanke Indicates Fed Dissenters
Won’t Impede Additional Asset Purchases
By Scott Lanman and Joshua Zumbrun - Bloomberg.com
Federal Reserve Chairman Ben S. Bernanke signaled he may expand record monetary stimulus over the most opposition of his tenure to revive the faltering recovery and reduce unemployment stuck around 9 percent.
The central bank said yesterday that officials "discussed the range of policy tools" to strengthen growth and are "prepared to employ these tools as appropriate" while pledging to keep the benchmark interest rate near zero until at least mid-2013. Three policy makers dissented from the decision for the first time since Bernanke, 57, became chairman in 2006.

.... and Obama makes 13 (Illuminati number for rule)
Breaking: Nine of the 12 Super Committee Members Named
By Susan Jones - CNSNews.com
CNSNews.com) - Senate Republican Leader Mitch McConnell on Wednesday announced the appointments of Republican Sens. Jon Kyl (Ariz.), Pat Toomey (Pa.), and Rob Portman (Ohio) to serve on the Joint Select Committee on Deficit Reduction.
The recently passed debt-ceiling bill tasked the 12-member panel with reducing the federal deficit by another $1.5 trillion.

Ron Paul Texas Straight Talk
Say No to the Dangerous Super Congress - August 8, 2011

Two-Year Extension of Fed's Low Interest Rate
Will Deliver Damaging Inflation
BY DAVID ZEILER, Associate Editor, Money Morning
With little ammo left in its arsenal, the Federal Open Market Committee (FOMC) yesterday (Tuesday) was unable to offer jittery markets anything more than a two-year extension of the Fed's low interest rates.
Instead of promising to keep rates at their low 0% to 0.25% level for an "extended period" as it has in its past several meetings, the FOMC said it would maintain those rates "at least through mid-2013."
However, Money Morning Contributing Editor Martin Hutchinson thinks that even this minimal action will do more harm than good.
"This is worse than QE3," Hutchinson said, referring to the potential for a third round of quantitative easing, in which the Fed has pumped trillions of dollars into the economy by purchasing Treasury bonds.
"What makes the Fed think it can forecast conditions two years in the future?" Hutchinson continued. "It has already been surprised on both growth and inflation just this year, since its January forecasts, which forecast 2011 growth of 3.4% to 3.9% and inflation of 1.3 to 1.7%. It's notable that three of the five regional Fed presidents - the guys actually in touch with the market - voted against."

Pimco's Gross Proves Summers Wrong
as Selloff Shows 'New Normal' Is Real
By Sree Vidya Bhaktavatsalam - Bloomberg.com
Bill Gross was right after all, though that hasn't helped his investors this year.
Former White House economic adviser Lawrence Summers and Christina Romer, the former chairman of the U.S. Council of Economic Advisers, were among critics who challenged a view promoted by Gross's Pacific Investment Management Co. that the U.S. economy may be headed for a long period of below-average growth and high unemployment, a scenario known as "new normal." Money managerKenneth Fisher called the concept "idiotic."

Why the U.S. Credit Rating Downgrade
Could Cause a Full-Fledged Market Crash
BY JASON SIMPKINS, Managing Editor, Money Morning
That Standard & Poor's finally downgraded its U.S. credit rating surprised no one - the agency said weeks ago that it would require a deficit-reduction agreement of around $4 trillion to affirm its AAA rating on the United States.
But what the ratings agency doesn't realize is that it's playing with fire. Because what we've seen over the past few weeks has been a massive sell-off in the stock market that suggests Wall Street's biggest players are scrambling to bolster their net capital positions.
And it's entirely possible that this already-stiff correction will snowball into a full-blown market crash.
For months, years even, many of these firms have leveraged their Treasury securities to borrow more money to buy more government bonds and other - more speculative - investments. But since Treasury bills, notes, and bonds can no longer be considered "risk free," institutions are being forced to recalculate their net capital positions to accommodate the added risk.

Dissents Pose New Test for Bernanke
[Google title for free article pass]
Regional Bank Presidents Fisher, Kocherlakota Say Their No Votes Not a Sign of Decisive Break With the Fed Chairman
By JON HILSENRATH - WSJ.com $$
Ben Bernanke's decision to open the door to easier monetary policy Tuesday marked another watershed moment in his 5½-year odyssey as chairman of the Federal Reserve. This time, it wasn't just the policy that raised eyebrows, but also the manner in which it was decided.
For the first time in Mr. Bernanke's tenure, three colleagues formally dissented from the Fed's move, a new sign of deep internal opposition that contrasts with the chairman's oft-stated desire for consensus. Since the financial crisis, Mr. Bernanke has labored with mixed success to manage divisions within the central bank.

pt 1/2 Gerald Celente
on Brian Sussman KSFO 560 - 09 August 2011

pt 2/2 Gerald Celente
on Brian Sussman KSFO 560 - 09 August 2011

CME Boosts Margins On Several Forex, Rate Futures Contracts
By Howard Packowitz of Dow Jones Newswires - WSJ.com - $$
CHICAGO -(Dow Jones)- It will cost more to trade some of the active foreign exchange and interest rate futures contracts at CME Group Inc. (CME) due to a recent surge in market volatility.
Margin requirements are being raised in 19 forex markets, including the Japanese yen and Swiss franc. Investors have considered the two currencies as a safe haven while the global economy has weakened, and Standard & Poor's stripped U.S. government debt of its prized triple-A credit rating.
For long-term Treasury futures, it's the second time in the past 2 1/2-weeks that CME has increased collateral to trade the contracts.
Despite the ratings downgrade, U.S. Treasury prices have soared, as the Federal Reserve announced that it is likely to keep the short-term federal-funds rate near zero until at least the middle of 2013.

Fed Up: A Texas Bank Is Calling It Quits
By ROBIN SIDEL - WSJ.com
Main Street Bank lends most of its money to small businesses and is earning decent profits. But the Kingwood, Texas, bank is about to get out of the banking business.
In an extreme example of the frustration felt by many bankers as regulators toughen their oversight of the nation's financial institutions, Main Street's chairman, Thomas Depping, is expected to announce Wednesday that the 27-year-old bank will surrender its banking charter and sell its four branches to a nearby bank.
Mr. Depping plans to set up a new lender that will operate beyond the reach of banking regulators—and the deposit-insurance safety net. Backed by the private investment firm of Microsoft Corp. co-founder Paul Allen, the company won't be able to call itself a bank, but it will be able to do business the way Mr. Depping wants.

Gold vaults charge more for storing bullion
[Google the title for free article access]
By Jack Farchy in London
Banks are charging more to store gold after a surge in demand for precious metals has left London, the centre of the global bullion market, short of vault space.
Almost all of the major bullion-dealing banks have raised fees since March this year, in some cases more than doubling the rates they charge for vaulting gold, according to clients of the banks and people familiar with the situation.
The development is a further sign of how demand for assets which are seen as safe is straining the financial system. Bank of New York Mellon announced last week it would start charging fees on large deposits after a sudden influx of cash.

Gold Faces Short-Term Price Trap
By: John Browne - GoldSeek.com
Last week Fed Chairman Bernanke raised eyebrows and denied history when he asserted in front of Congress that gold doesn't qualify as money. Yesterday he took the unprecedented step of announcing that the Federal Reserve would keep interest rates near zero for at least the next two years. In very short order thereafter it required much more of the money that he believes in (U.S. dollars) to buy the money that he doesn't believe in (gold).
In any event, it was beyond unusual for the Fed to make such an explicit time commitment on monetary policy. To underscore this fact, three voting members of the Federal Open Market Committee came out against the policy. Such dissent within the Fed's ranks has not been seen in decades. But Bernanke's shameless appeasement of market fears did interrupt, if only for a few hours, the free fall on Wall Street. Wiser investors, understanding how a more activist Federal Reserve will destroy the value of the dollar, moved to gold, pushing the metal up to north of $1,750 per ounce.

Gold prices to rise under loose monetary policy, public debt worries
(Kitco News) - Gold prices have set a series of record nominal price highs in recent days and market watchers expect the yellow metal to continue to press higher. The continued economic uncertainties – whether it is public debt in the Western countries or inflation in emerging markets – combined with the Federal Reserve’s declaration to keep U.S. interest rates floating between zero and 25 basis points until mid-2013 make gold an attractive asset.
This week several investment banks raised their forecast for gold prices. On Monday HSBC lifted its average price for 2011 to $1,590 an ounce and for 2012 to $1,625. Goldman Sachs raised their three, six and 12-month average price forecasts to $1,645, $1,730 and $1,860, respectively. On Tuesday, Commerzbank increased their third quarter average price outlook to $1,700 and the fourth quarter 2011 and first quarter 2012 to $1,800.

Silver to break $50 after October 2012
By Deepak Rangan - CommodityOnline.com
The title is catchy. It was meant to be. Right now, everyone is clamoring for silver. And why not? The metal has returned a stratospheric 700% since 2002. With leverage, you would've been a millionaire many times over!
But the Silver crash of May 2011 stung many investors worldwide. The metal has since then been moving without a direction; as if to settle on a support level and continue it’s much prophesized bull run to the $100 mark.

David Morgan: $75 Silver Looming
The Gold Report - SilverBearCafe.com
The new normal could be $75/oz. silver. In this exclusive interview with The Gold Report, David Morgan, editor ofThe Morgan Report, maps out a path for silver that could sink as low as $5/ounce (oz.) during the summer pullback and then bounce up to $75/oz. to establish a new base level. A consistent Silver Institute Production Cost Standard could help investors make smarter decisions during the coming upswing.
The Gold Report: In your Morgan Report, you have written extensively about the impact of global financial issues on gold and silver prices. At least temporary solutions have been found for the euro-Greek tragedy and the U.S. debt limit debacle. Will this give the U.S. dollar a boost at the expense of precious metals?

The Crime Against Silver
By Richard (Rick) Mills - SilverBearCafe.com
As a general rule, the most successful man in life is the man who has the best information
In 1873, the Fourth Coinage Act was enacted by the US Congress. Western silver miners labeled this measure the "Crime of '73" because it stopped the minting of US silver dollars. The US had, unofficially, abandoned its bimetallic standard in favor of a monometallic one - gold.
The supply of silver not being used for coinage increased - European Nations had just gone from a silver to a gold standard, the US was no longer coining silver dollars and these two factors, when coupled with massive new silver discoveries in the American west, caused the price of silver to collapse.

Inflation & Deflation in a Storm
By: Jim Willie CB - GoldSeek.com
The events of the last ten days are surely for the history books. The story must be told through a prism of the epic battle between inflation and deflation. The Jackass hates the parlance, since each term is abused. Inflation is the expansion of the monetary supply, while deflation is the decline in that supply. The Powerz would prefer that the public misconstrue what inflation is, so that they can continue to exploit it for their private gain and control of entire banking systems. The US Federal Reserve would prefer that the public remain clueless on the inflation threat, by citing the deflation threat in a manner to justify their Weimar-like hyper inflation. They have expanded the US$ money supply through USTreasury debt monetization severely, to the tune of $2 trillion in two years. That is bigtime inflation!! The downstream consequence is a fast notable rise in the cost structure across the entire global economy, complete with loud outcry. The reaction has been to protect against the price inflation (higher costs) and bond deflation (lost value) by the widespread purchase of both Gold & Silver (bonafide safe haven).

Day of Reckoning
By: Llewellyn H. Rockwell, Jr. - GoldSeek.com
The trigger that apparently caused the market meltdown was the ever-so-slight suggestion from Standard & Poor's that the US government’s fiscal health might not be all that it is cracked up to be.
This was not a case of the little boy noting the emperor has no clothes. It is more like the little boy suggested that the emperor's clothes, while beautiful, might have been more carefully tailored to suit the imperial dignity. Hysteria followed, and the entire Obama cult called for the kid to be stoned.
Finally the emperor himself spoke in defense of his rainment. That’s when the market crashed.

Why the Yield Curve is Steepening
By: Dr. Jeffrey Lewis - GoldSeek.com
Investors know that the yield curve can be used to forecast market movements. When the difference in yield between short-dated debt and long-dated debt grows or shrinks, the next major move is a bearish or bullish signal for risk-related investments.
Now the yield curve is steepening significantly, but this time, the steepening of the yield curve shows indecision in lending, not indecision in investing.
Negative Rates
This week, the Bank of New York Mellon announced that it would begin assessing fees—effectively negative interest rates—on depositary accounts worth $50 million or more. As yields on short-term debt plummet, banks which hold retained corporate earnings and deposits from other banks are finding that administering the accounts simply isn’t worth their time.

Gov't considers turning foreclosures into rentals
By DEREK KRAVITZ - AP Economics Writer
WASHINGTON (AP) -- The Obama administration may turn thousands of government-owned foreclosures into rental properties to help boost falling home prices.
The Federal Housing Finance Agency said Wednesday it is seeking input from investors on how to rent homes owned by government-controlled mortgage companies Fannie Mae and Freddie Mac and the Federal Housing Administration.
The U.S. government rescued Fannie and Freddie in September 2008 and has funded them since the financial crisis. The mortgage giants own or guarantee about half of the nation's mortgages and nearly all new mortgages.

Treasury Report Finds Fewer Small Businesses
By KRISTINA PETERSON - WSJ.com
Few groups are as fiercely defended by Republicans and Democrats alike as small-business owners—especially when it comes to changes in the tax code. But a new analysis from the Treasury Department suggests that the pool of actual small-business owners may be smaller than officials previously thought.
The report from Treasury's Office of Tax Analysis, to be released Tuesday, developed a new methodology to identify small businesses.
"It's useful for us to have a much better understanding of what a small business really is and what their tax burden really is," said Michael Linden, director for tax and budget policy at the liberal Center for American Progress. The small business is often "a term that's been thrown out by both sides to suit their needs at whatever point they need them."

UN wants new global currency to replace dollar
The dollar should be replaced with a global currency, the United Nations has said, proposing the biggest overhaul of the world's monetary system since the Second World War.
By Edmund Conway, Economics Editor - Telegraph.co.uk
In a radical report, the UN Conference on Trade and Development (UNCTAD) has said the system of currencies and capital rules which binds the world economy is not working properly, and was largely responsible for the financial and economic crises.
It added that the present system, under which the dollar acts as theworld's reserve currency , should be subject to a wholesale reconsideration.
Although a number of countries, including China and Russia, have suggested replacing the dollar as the world's reserve currency, the UNCTAD report is the first time a major multinational institution has posited such a suggestion.

Where Americans Go for Cash in a Pinch
By Sheryl Nance-Nash - DailyFinance.com
Where do you turn when you're hit with a nasty surprise expense? If you're like most Americans, it's not your savings account.
A recent online poll by the National Foundation for Credit Counseling showed that 64% of Americans would tap sources other than their savings account if they were slapped with an unexpected $1,000 bill.
Here's the breakdown of the percentage of respondents that chose each of the different answers:

• 36% savings account
• 17% borrow from friends or family
• 17% disregard other monthly expenses
• 12% sell or pawn assets
• 9% take out a loan
• 9% cash advance on your credit card.

China's first aircraft carrier launches
with pride amid regional tensions
Sea trials of former Soviet craft underline China's naval ambitions and fuel concerns about growing military strength
By Tania Branigan in Beijing and Jason Burke in Delhi - Guardian.co.uk
China's first aircraft carrier has embarked on sea trials, in a potent demonstration of the growing naval power that is creating pride at home – and concern elsewhere in the region.
While China says it will only ever use naval power for defensive purposes, others say it is increasingly aggressive in pursuing its claims. Hours after the trials began, Taiwan pointedly unveiled its most advanced missile, hailing it as "an aircraft carrier killer".
The refitting of the former Soviet vessel is part of China's broader naval modernisation programme – which includes heavy spending on submarines and the development of an anti-ship missile system – and comes amid growing competition with the US and India, and a string of maritime disputes with closer neighbours.

US military to launch fastest-ever plane
Unmanned Falcon Hypersonic Technology Vehicle 2 can travel from London to Sydney in less than an hour
By Alok Jha, science correspondent - Guardian.co.uk
By the time you finish reading this sentence, the Falcon HTV-2, the fastest plane ever built, could have flown 18 miles. It would get from London to Sydney in less than an hour, while withstanding temperatures of almost 2,000C, hotter than the melting point of steel.
At 3pm BST on Thursday , the US Defence Advance Research Projects Agency will launch the Falcon Hypersonic Technology Vehicle 2 on the back of a rocket from the Vandenberg Air Force Base in California. If all goes to plan, engineers will launch the Falcon HTV-2 to the edge of space, before detaching the plane and guiding it on a hypersonic flight that will reach speeds of 13,000mph (about 20 times the speed of sound) on its return to Earth.

Mosque Makeovers With Your Tax Dollars

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Wednesday 08.10.2011

Debt Ceiling Threat
By John Frisby - LuxLibertas.com
Did you notice who Obama threatened when he wasn’t getting his way on raising the debt ceiling?
He threatened to not pay: Social Security Retirees, Military Retirees, Social Security disability and Federal Retirees.

• He did not threaten to stop payments to illegal aliens
• He did not threatened to take frivolous benefits such as Internet access away from violent inmates
• He did not offer to fire some of the thousands of unnecessary federal employees that he hired
• He did not offer to cut down on his or his wife’s frivolous gallivanting around
• He did not threaten to not pay the senators and representatives or any of their staff
• He did not threaten to take benefits away from welfare recipients
• He did not threaten the food stamp programs
• He did not threaten to not pay foreign aid
• He did not threaten to cut back on anything that involves his base voters

No US interest rate rise until 2013
American interest rates will be kept at record low levels for at least another two years, the Federal Reserve said yesterday, as the central bank acknowledged that the world's biggest economy is close to stalling.
By Richard Blackden, New York - Telegraph.co.uk
The bank's rate-setting Open Market Committee said the economy's deterioration since it last met in June meant rates should stay at "exceptionally" low levels until at least the middle of 2013.
However, the much-anticipated statement from the Fed also underlined the discord among the bank's officials on how to respond to the renewed weakness in the economy, with three governors voting against the decision.
In its first public statement since the dramatic decline in the stock market over the past 10 days, the Fed admitted that "downside risks to the economic outlook have increased."

Fed Tries to Stimulate the Economy With Its Words
Central bankers expressed concern with the economy's direction, but chose not to provide any monetary stimulus at this time
By Daniel Indiviglio - TheAtlantic.com
Perhaps the pen is also mightier than the dollar. In its last meeting of the summer, the Federal Reserve announced that it would not aid the struggling U.S. economy with additional monetary stimulus. Instead, it revised its meeting statement's language to indicate that interest rates would remain near zero through mid-2013. Its decision to better define the length of its extraordinary interest rate policy provides certainty that the markets might embrace, but will it be enough to push the economy back towards recovery?
The Big News: "QE 2.1"
Let's start with the key sentence from the Fed statement:
The Committee currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013.

Stealth QE3 Is Upon Us,
How Ben Did It, And What It Means
By David Schawel - BusinessInsider.com
Like most market observers and participants, the buildup to this afternoon's Fed announcement was palpable. With the release void of an explicit "QE3" or new bond buying program, the Street was left to deal with ramifications of holding Fed Funds rates down until mid-2013.
While, a new bond buying program was not explicitly announced, the implications will be in the form of a "stealth QE3". What do I mean? This promise has caused (will cause) longer term rates to rally (prices up, yields down) and flatten versus the short end. With the Fed holding billions of MBS securities from prior QE's, we can expect these same mortgages to refinance.

'I Can Smell QE3, QE4 and Many More,' Says Marc Faber
LewRockwell.com
Marc Faber the Swiss fund manager and Gloom Boom & Doom editor spoke today about the Standard & Poor's credit rating downgrade of US sovereign debt, and how the downgrade was long overdue as the 'junk bond' was no longer worth of an AAA rating.
He views the downgrade as moderately positive for equities because it shows investors there is a risk in holding government bonds and discusses the conditions that will lead to QE3.
Speaking in an interview from Chiang Mai, Thailand, with Susan Li onBloomberg's "Asia Edge" this morning, Faber said a government bond is rated AAA when the issuer is willing to pay the interest in a stable currency. "We are not dealing, in the case with the US Dollar, with a stable currency."

Stocks close up 430 after Fed vows low rates through mid-2013
By Peter Schroeder - TheHill.com
The Federal Reserve on Tuesday said it planned to keep interest rates near zero through mid-2013, suggesting the central bank expects the economy to remain weak through the 2012 presidential election.
In a highly anticipated statement, the central bank's Federal Open Market Committee (FOMC) said the economy was growing at a pace "considerably slower" than it expected, pointing to a struggling labor market and continued problems in housing.

Federal Open Market Committee
Pledges Monetary Easing Through 2013 If Required
JESSE'S CAFÉ AMÉRICAIN
About what one might have expected.
No specific action at this time, but reassurances that the Fed recognizes the downturn in the economy, with fresh evidence of this since their last meeting in June, and higher risks to recovery through lack of confidence in financial assets, and slack employment and spending by consumers.
In a very real sense the Fed is attempting to bridge the gap between fiscal and monetary policy, given the inadequate response from the federal government to the financial crisis.
The Fed changed the wording from 'extended period' to 'through 2013.' I had expected them to say 2012 but since this is not a binding limit it is of little consequence, except to signal that the upcoming presidential election will not deter them from taking what they believe to be the necessary steps to maintain the financial system. Default may be all right with some, but the Fed apparently does not concur.

Dylan Ratigan (rightfully) loses it on air

Does the Fed simply follow the market?
By: Steve Saville, The Speculative Investor - GoldSeek.com
If you look at a multi-decade chart comparing the yield on a 3-month Treasury Bill with either the Fed Funds Rate (FFR) or the Discount Rate, you will see that the short-term interest rate set by the Fed almost always follows the short-term "risk free" interest rate set by the market. Therefore, if this chart is all you have to go on you will probably conclude that the market sets interest rates and the Fed does little more than tag along behind the market, which is exactly the conclusion reached by the author of the article postedHERE. However, when assessing the Fed's role we have a lot more to go on than a simplistic chart comparison of the T-Bill yield and the Discount Rate.

Budget Battles Ahead
By William Poole - GoldSeek.com
My most recent Merk commentary, published July 25, was motivated by the possibility of an impasse on the federal debt ceiling. Now that President Obama has signed a bill raising the ceiling, I am motivated to write once again. Standard and Poor’s has registered its concern by lowering its long-term sovereign credit rating on the United States from AAA to AA+.
Now that the early August debt-ceiling issue is out of the way, everyone should understand that the country is only temporarily saved from continuing bitter controversy over budget issues. We will likely see impasse after impasse in the future. Moreover, the controversy and economic uncertainty may well be affecting the economy, leading to market fears of renewed recession.

A Pyrrhic 'Victory'
By Thomas Sowell - PatriotPost.com
In Don Marquis' classic satirical book, "Archy and Mehitabel," Mehitabel the alley cat asks plaintively, "What have I done to deserve all these kittens?"
That seems to be the pained reaction of the Obama administration to the financial woes that led to the downgrading of America's credit rating, for the first time in history.
There are people who see no connection between what they have done and the consequences that follow. But Barack Obama is not likely to be one of them. He is a savvy politician who will undoubtedly be satisfied if enough voters fail to see a connection between what he has done and the consequences that followed.

USA: Time for Debt Rehab
by Eric Margolis - LewRockwell.com
Do we need more proof that politicians should never be given national credit cards – unless, of course, they are German, Swiss or Scandinavian.
The thunder of crashing equity markets, the humiliating downgrade of America’s once gold-standard credit rating, and stern lectures on financial rectitude from the Chinese Communists of all people are the latest leitmotifs of America’s economic decline.
China called the United States "addicted to debt," a point made for years by this column. Now is the time for national debt rehab.

Bail-outs chip away at France and Germany too
Investors have begun to question whether France and Germany can credibly underwrite the debts of southern Europe without losing their AAA ratings and succumbing to the crisis themselves.
By Ambrose Evans-Pritchard - Telegraph.co.uk
Credit Default Swaps (CDS) measuring risk on German bonds have doubled since early July to 85 basis points, rising above British CDS contracts for the first time despite the London riots.
Non-EMU Sweden enjoys lower borrowing costs than Germany. This has not been seen for half a century.
"What is happening is momentous," said Andrew Roberts, credit chief at RBS. "The more Europe steps in to buy Italian and Spanish debt, the more Germany shifts towards the group of countries that could be attacked."

Max Keiser 171 New. Gold, Banks & Crime

Gold to hit $1860 next year : Goldman Sachs
LONDON (Commodity Online): Major Investment bank Goldman Sachs said Gold prices to continue to climb in 2011 and 2012 given the low level of US real interest rates and will reach $1,860 an ounce in 2012.
In a note to clients on Monday, Goldman Sachs raised its 12-month prediction for the gold by 7.5 percent and said the commodity is still underbought, despite an array of investors tapping into Gold to shield against market turmoil.

An Acceleration in Gold has Begun
By Jordan Roy-Byrne, CMT - GoldSeek.com
In recent months we’ve been talking and writing about a potential acceleration in Gold. The chart said we were close and in all honesty Gold has actually been in a state of gradual acceleration since the 2008 low. Furthermore, we’d noted that in most secular bull markets, accelerations usually begin in the 11th or 12th year and are totally obvious by the end of the 13th year. Given the move of the past five weeks, there is no reason to think otherwise. An acceleration in the bull market has begun and will take Gold to $2000/oz and quite a bit higher in the next 18 months.

Gold Gains $30 before Fed Statement; Volatile Afterwards
By: Chris Mullen - GoldSeek.com
Gold climbed as much as $69.09 to a new all-time high of $1779.39 at about 5:20AM EST before it fell back to as low as $1719.25 by late morning in New York, but it then rallied back higher in the last two and a half hours of trade and ended with a gain of 1.73%. Silver fell to as low as $37.508 before it also bounced back higher in late trade, but it still ended with a loss of 3.81%.

The bull case for gold
Gold is rising because the world's monetary system is being debased – and there is no sign of this stopping.
By Garry White - Telegraph.co.uk
Gold is not a commodity it is a currency – and the devaluation of paper money by money printing is making it more and more attractive.
The metal was desirable long before the concept of money was ever invented - and it has been used as a medium of exchange for thousands of years. (The first gold coins were minted in Lydia, in modern-day Turkey, in 610 BC).
The money in your pocket is effectively worthless. The government declares it as legal tender and will accept taxation payments with this bill of exchange but the £5 note is no longer backed by anything. When push comes to shove, a £5 note is just a piece of paper and ink with no intrinsic value at all. It certainly isn't worth £5.

*****

Jim Sinclair interviewed by James Turk
Gold could go exponential above $1764.00;
"be your own central bank"

When Buying Gold Becomes a Life-or-Death Question
By Jeff Clark, Editor BIG GOLD, Casey Research - GoldSeek.com
I was recently asked in an interview if I thought gold was going to $5,000 an ounce. "No," I said bluntly. "I think it’s going higher."
"You're that optimistic?"
"No," I replied. "I'm that pessimistic."
Imagine the condition of our world if gold reached $5,000 an ounce – and kept soaring. We’ll likely be in a mania if that happens – but what kind of mania will it be? There’ll be some greed to be sure, but I think there’s a good chance a deeper reason will be at play. And it’s the same reason that will drive you to keep buying gold at $2,000 an ounce.
You'll have to.
There are 101 reasons to own gold right now. You might buy because of the debt turmoil you see around the globe. You may think it wise, like the Chinese and others, to keep some of your savings in gold. Negative real interest rates may draw you to gold. You might buy because of the mere fact that demand is overwhelming supply. Or you fear inflation. Or deflation.

Still Going Strong
By Bill Bonner - The DailyReckoning.com
God is in his heaven. Gold is on its throne. And all’s right with the world.
But wait…all is wrong with the world. We get up in the morning. We go to our portable computer. We look at what is going on.
Normally, there would be no question about it. We would read Thomas L. Friedman in the New York Times and get such a stitch in our side, it threatened to rupture our insides. Or, we could listen to a speech by Joe Biden; what a hoot! And, for more serious laughs, we could turn to Paul Krugman or Ben Bernanke.
Yesterday’s news brought a smile too…but it was a wry, almost worried, smile.

10 Reasons Why Gold Is The Gut Reaction
And Why Silver Is The Smart Decision
By Silver Shield - Dont-Tread-On.me
We are at the beginning of a major shift out of paper assets into real assets. Those that are starting to come to this revelation have no real understanding what they are doing when they are buying gold. Sure they might get that it is rare and might remember their grandfather saying buy to gold, but they have not gone through the educational process necessary to truly grasp what they are doing. When I wanted to get out of paper assets, I bought gold as a gut reaction. The more I learned about silver, the more I realized that silver was the smart decision.

Dollar plummets 5 percent against Swiss franc after Fed remarks
By Gertrude Chavez-Dreyfuss
(Reuters) - The dollar fell broadly, plunging more than 5 percent against the Swiss franc at one point on Tuesday, as the Federal Reserve's pledge to keep rates near zero for another two years further diminished its allure to global investors.
It was a volatile trading day, with the dollar initially rising versus commodity currencies such as the Aussie and New Zealand dollars after the Fed's statement and the euro trimming gains. But that reversed in late trading as U.S. stocks rallied sharply.
Analysts said it was once again an affirmation to sell the dollar.
"We view the (Fed) statement as aggressively dovish, even beyond our expectations," said Dan Dorrow, head of research at Faros Trading in Stamford, Connecticut.

The 'Bear' Market in Currencies
By: Julian D. W. Phillips - GoldSeek.com
Today, you will hear that gold is rising to record highs. You will hear talk of it entering a ‘bubble’ again. This is entirely the wrong perspective!
The U.S, Eurozone Debt Crises
Last Friday the S & P ratings Agency dared to downgrade U.S. debt from triple to double ‘A’, and quite rightly. It was not a reflection of the ability of the U.S. to pay their obligations, but of the politics that allowed partisan interests to take higher priority. The message was sent to Congress over the entire period of the ‘debt-ceiling’ soap opera, even by the most responsible of U.S. monetary figures, Treasury Secretary, Timothy Geithner and Federal Reserve Chairman Ben Bernanke –to no avail. When the wrangling finally stopped and an agreement was reached, it was totally inadequate –cutting spending by 1/2 % of GDP against a deficit of 10% of GDP—for addressing the U.S. debt situation. Confidence visibly withered last week ahead of the downgrade and when it came, the emerging world, the largest of U.S. creditors, ran for the hills and announced the world needs a new global reserve currency.

Spending Is Just Our Second-Biggest Problem
By David Limbaugh - PatriotPost.com
Being a disciple of Saul Alinsky might not be so easy as it would appear. President Obama and his minions obviously can't decide whom to scapegoat for the nation's credit downgrade and our financial crisis.
One thing is for sure: It's not in Barack Obama to accept personal responsibility for the consequences of his actions and policies. He still won't own this economy and the exploding spending spiral, reminding us at every turn that our problems are a result of what he "inherited" from President Bush.
Instead of seeking to soothe the nation on word of the downgrade by Standard & Poor's, Obama played golf, prepared for more campaign fundraisers and avoided the cameras -- for a change. But there can be little doubt he was strategizing about whom to blame for this unfolding catastrophe.

Recovery Lost:
Why the U.S. and Europe Are Back at the Brink
How did the road out of recession lead into a cul-de-sac? And why, all of a sudden, is the world economy falling apart? The answer is all about growth and debt.
By Derek Thompson - TheAtlantic.com
Is the stock runoff for real?
Are we falling into another recession?
What the heck is going on, anyway?
If you find yourself confused about the market meltdown, you've got company. Dow crashes, like Monday's 600 point plunge, are notorious black boxes. A few thousand investors acting on a hundred indicators rarely reveal a single, shining Truth. But this appears to be more than a one-time crash. The United States and Europe, twin engines of the global economy, are close to falling back into a recession.
What we're seeing is the confluence of two challenges that are both economic and political in nature. There is growth crisis in the United States. There is a debt crisis in Europe. And there isn't a single government that knows how to solve either.

UK: Violence started Saturday night when a gang member was killed by police; it's all about anger, chaos, disparity and race

Darcus Howe BBC News Interview On Riots

London Is Burning
Hooligans, not social grievances, are driving the British riots.
WSJ.com
Street violence swept across the United Kingdom for the third straight night Monday, with police expecting more as we went to press Tuesday. Whole neighborhoods of South London were warned by authorities to close up shop early as looters used cell phones and Blackberrys to pre-arrange their attacks.
At this point, even calling these nightly crime sprees riots seems a misnomer. A riot suggests a spontaneous outburst of violent rage, whether or not the underlying grievance is justified. What we have here may have started amid a protest against the police killing of a known criminal and gang member. It has since become something much more venal.

London riots were fuelled by social media like Facebook, Twitter
AP - EconomicTimes of India
LONDON: Some of the text messages read like real-time rallying calls for rioters. "If you're down for making money, we're about to go hard in east London," one looter messaged before the violence spread.
Still others direct looters to areas of untapped riches - stores selling expensive stereo equipment, designer clothes, alcohol and bicycles. Most show a portent of even worse things to come.
Encrypted messages sent via BlackBerrys are being used by mobs to encourage rioting across Britain - mayhem born of an incendiary mixture of conditions that converged during Europe's sleepy summer vacation season.
Many of the masked or hooded youths have been photographed typing messages on their cellphones while flames engulf cars and buildings.

London riots: the underclass lashes out
London's rioters are the products of a crumbling nation, and an indifferent political class that has turned its back on them.
By Mary Riddell - Telegraph.co.uk
No one seemed surprised. Not the hooded teenagers fleeing home at dawn. Not Ken and Tony, who used to live in Tottenham and had returned to stand vigil over the missiles and torched cars littering an urban war zone. Tony claimed to have seen the whole thing coming. “This was always going to happen,” he said.
The police shot a black guy in suspicious circumstances. Feral kids with no jobs ran amok. To Tony’s mind, this was a riot waiting for an excuse. In the hangover of the violence that spread through London, the uprisings seemed both inevitable and unthinkable. Over a few days in which attacks became a contagion the capital city of an advanced nation has reverted to a Hobbesian dystopia of chaos and brutality.

Violence is rarely mindless...
"Angry young people with nothing to do and little to lose are turning on their own communities, and they cannot be stopped, and they know it."

Panic on the streets of London.
Here comes the future, you can't run from it - if you've got a blacklist, I wanna be on it...
By Penny Red Blog
I’m huddled in the front room with some shell-shocked friends, watching my city burn. The BBC is interchanging footage of blazing cars and running street battles in Hackney, of police horses lining up in Lewisham, of roiling infernos that were once shops and houses in Croydon and in Peckham. Last night, Enfield, Walthamstow, Brixton and Wood Green were looted; there have been hundreds of arrests and dozens of serious injuries, and it will be a miracle if nobody dies tonight. This is the third consecutive night of rioting in London, and the disorder has now spread to Leeds, Liverpool, Bristol and Birmingham. Politicians and police officers who only hours ago were making stony-faced statements about criminality are now simply begging the young people of Britain’s inner cities to go home. Britain is a tinderbox, and on Friday, somebody lit a match. How the hell did this happen? And what are we going to do now?

UK riots: Trouble erupts in English cities
BBC.co.uk
Police try to manage masked youths in Manchester
Sporadic violence has broken out in several cities around England, although London remained largely quiet with a heavy police presence on the streets.
With 16,000 police officers deployed in London, the streets remained calm after three previous nights of rioting.
But there was unrest in Manchester, Salford, Liverpool, Wolverhampton, Nottingham, Leicester and Birmingham with shops being looted and set alight.
The PM is recalling Parliament over Monday night's "sickening scenes".

London riots: why did the police lose control?
The police have become so sensitive to the issue of race that it is impairing their ability to do the job.
By David Green - Telegraph.co.uk
What caused these riots and why did the police lose control? Some commentators think the disorder was understandable and justified; some say the police "had it coming"; others that the violence was only to be expected given the unemployment and poverty in the area.
Some local people told journalists of their resentment towards the police. One student said: "The police never talk to us, they ignore us, they don't think we're human in this area." A youth worker claimed: "The way the police treat black people is like we're nothing." And a retired accountant who has lived locally for 30 years reported that some of the police "behave in an arrogant manner that puts people's backs up".

Economic Uncertainty Leading to Global Unrest
By: Mark Koba - CNBC.com
London is reeling from three nights of rioting that's poured hundreds of people into the streets, leaving several local neighborhoods in shambles. One man is dead, dozens injured and arrested.
The protests have now spread to other cities, with violence reported in parts of Birmingham, Liverpool and Bristol.
Great Britain and other parts of the world are experiencing unrest at a time of global economic uncertainty and stock market volatility.

Supercommittee politics
By The Hill Editors
Many people are skeptical about the "supercommittee" that has been given a statutory mandate to solve the nation's grim fiscal outlook.
Inside and outside the Washington Beltway, it is noted that recommendations from prior commissions on the debt and deficits have failed to become law.
That is true, but the supercommittee is different. And the politics surrounding it are fascinating. An impasse will trigger cuts automatically to affect healthcare providers and the Pentagon, among others.

Chance of U.S. recession rises to 1-in-4: Reuters poll
By Jason Lange
Aug 9 (Reuters) - The United States faces one-in-four odds of slipping back into recession, and a weaker economic outlook is raising the likelihood the Federal Reserve will soon do more to boost growth, a Reuters poll shows.
The world's biggest economy is still expected to pick up in the second half of the year as it shakes off high gasoline prices and factory disruptions created by Japan's earthquake in March, according to the monthly survey of more than 70 economists.
But recession fears have risen substantially in recent weeks. Stocks on the S&P 500 .SPX plunged more than 6 percent on Monday after Standard & Poor's downgraded U.S. sovereign debt late on Friday, further threatening consumer confidence.

America Downgraded!
By Cal Thomas - Patriotpost.com
My father was a product of the Great Depression and World War II. Like so many others of his generation, he, like his parents before him, knew how to "do without."
When he told us, "we can't afford it," that did not mean our family was deprived of material things we deserved, instead it marked a boundary not to be crossed because on the other side, waiting to greet us, were the twin demons of bad credit and financial ruin. "Always pay the bank," was my father's sound advice. And so I have, which is why my credit score remains high.

New Low:
17% Say U.S. Government Has Consent of the Governed
Rasmussen Reports - LewRockwell.com
Fewer voters than ever feel the federal government has the consent of the governed.
A new Rasmussen Reports national telephone survey finds that just 17% of Likely U.S. Voters think the federal government today has the consent of the governed. Sixty-nine percent (69%) believe the government does not have that consent. Fourteen percent (14%) are undecided. (To see survey question wording, click here.)
The number of voters who feel the government has the consent of the governed – a foundational principle, contained in the Declaration of Independence – is down from 23% in early May and has fallen to its lowest level measured yet.

Pollster: Americans Are "Pre-Revolutionary"
Just 17 per cent believe U.S. government
has consent of the governed
By Paul Joseph Watson - Prison Planet.com
Amidst riots in central Europe that have now spread to London and a debt downgrade that threatens to plunge the United States into a double-dip recession, Americans' lack of confidence in their leadership is so fervent that they are now "pre-revolutionary," according to pollster Pat Caddell.
A new Rasmussen poll shows that just 17 per cent of Americans believe that the U.S. government has the consent of the governed, an all time low. This dovetails with a record low for Congress’ approval rating, which stands at a paltry 6 per cent, while 46 per cent of Americans think most members of Congress are corrupt, with just 29% believing otherwise.

Gerald Celente on RT America - 09 August 2011

Walker signs redistricting bills
The Business Journal
Wisconsin Gov. Scott Walker on Tuesday signed into law the new legislative district boundaries for the state that sparked a political battle between Republican and Democratic legislators.
The redistricting maintains the same number of state legislative districts — 33 in the Senate and 99 in the Assembly. The state was required to redraw the voting districts based on the results of the 2010 U.S. Census. Both bills passed the Legislature on partisan votes with Democratic legislators opposing the new voting districts.

Bank of America sells loan servicing portfolio to Fannie Mae
San Francisco Business Times - by Mark Calvey
Bank of America agreed to sell part of its troubled mortgage portfolio to government-controlled housing giant Fannie Mae, as the bank works to put its mortgage woes behind it, the Wall Street Journal reported Tuesday.
The deal will deliver the rights to process and collect payments on a pool of 400,000 loans with an unpaid principal balance of $73 billion for a purchase price exceeding $500 million, people familiar with the deal told the newspaper.

It's Time To Be Very Concerned
About What's Going on Behind the Scenes
by Simon Black - LewRockwell.com
Ancient Greek mythology tells the tale of Odysseus, the heroic king of Ithaca whose 10-year journey home after the Trojan War became one of the world’s most famous epics.
At one point in the journey, his ship was heading straight for two deadly hazards – on one side was Scylla, a six-headed monster disguised as a giant rock, and on the other side was Charybdis, a sinister whirlpool born from the sea god Poseidon.
The perils were close enough to pose an inescapable threat to ships passing through, forcing the captain to choose between the two evils. A Latin proverb from this story, "incidit in scyllam cupiens vitare charybdim" (he runs on Scylla, wishing to avoid Charybdis), is now "between a rock and a hard place" in modern English.

fighting healthcare reform one state at a time...

Kansas returns health insurance exchange grant
By Alina Selyukh
WASHINGTON, Aug 9 (Reuters) - Kansas became on Tuesday the second U.S. state to return a large federal grant meant to help it create a prototype health insurance exchange as part of the Obama administration's healthcare overhaul.
Republican Governor Sam Brownback said the state would give back the $31.5 million it received from the U.S. Department of Health and Human Services to become an early leader, along with six other states, in establishing health insurance exchanges that other local government could use as a model.

Judge Napolitano Hodge-Podge Part 1

Chinese army chief due in Israel next week
In signal of growing Sino-Israeli ties, meeting between Beijing’s top general, IDF chief Gantz follows Barak’s trip to China 2 months ago. -- By YAAKOV KATZ - JPost.com
It is the first visit of a Chinese military chief to Israel.
Defense officials said that Bingde's visit did not signify a change in Israeli policy regarding defense relations and exports to the Chinese military. Israel significantly downgraded its defense ties with China in recent years due to American pressure, and Israeli companies are forbidden to sell weaponry to the Chinese military.
Bingde’s visit comes after Defense Minister Ehud Barak’s visit to China in June, the first visit of a defense minister to the country in a decade. Bingde will visit Israel as part of a three-country tour that includes stops in Russia and Ukraine and will meet individually with Barak, Gantz and other members of the General Staff.

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Archived Page Link
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Tuesday 08.09.2011

The danger of underestimating Obama
Disastrous policies are intentional steps on road to socialism
By Rep. Dan Burton - The Washington Times
It is a cardinal mistake in any competition, be it sports or politics - and politics is a competition of ideas - to underestimate your opponent. All too often, underestimating your opponent leads to disaster. I believe that America, especially America’s political class, is vastly underestimating President Obama; and if we continue to do so, it will be a disaster for America. Specifically, I am worried about the growing political story line that the Obama administration is "failing" because they are just inexperienced and the president is simply "in over his head."
It is true that Mr. Obama never held an executive position in his life prior to being elected to the presidency. It is true that Mr. Obama had only three years (2005-2008) in the U.S. Senate prior to going to the White House, and it is true that Mr. Obama had just seven years of experience (1997-2004) in the Illinois state Senate - where he cast more than 130 "present" votes rather than go on the record on contentious issues. However, we should be under no illusion that the president's lack of leadership experience means he is "in over his head" or that he does not know what he is doing.

A 634 Point Stock Market Crash
And 8 More Reasons Why You Should Be
Deeply Concerned That The U.S. Government
Has Lost Its AAA Credit Rating
TheEconomicCollapseBlog.com
Are you ready for part two of the global financial collapse? Many now fear that we may be on the verge of a repeat of 2008 after the events of the last several days. On Friday, Standard & Poor's stripped the U.S. government of its AAA credit rating for the first time in history. World financial markets had been anticipating a potential downgrade, but that still didn't stop panic from ensuing as this week began. On Monday, the Dow Jones Industrial Average dropped 634.76 points, which represented a 5.5 percent plunge. It was the largest one day point decline and the largest one day percentage decline since December 1, 2008. Overall, stocks have fallen by about 15 percent over the past two weeks. When Standard & Poor's downgraded long-term U.S. government debt from AAA to AA+, it was just one more indication that faith in the U.S. financial system is faltering. Previously, U.S. government debt had a AAA rating from S&P continuously since 1941, but now that streak is over. Nobody is quite sure what comes next. We truly are in unprecedented territory. But one thing is for sure - there is a lot of fear in the air right now.

Bernanke in debt crisis spotlight
By Jonathan Ratner - FinancialPost.com
All eyes will be on the Federal Reserve on Tuesday as it wades into the ongoing debt drama but there is little faith that even the mightly U.S. central bank can get to the heart of the problem plaguing the U.S. economy — a vicious cycle of low growth and dwindling confidence.
Nonetheless, economists do think Fed chairman Ben Bernanke has more in his toolbox, including possible changes to its balance sheet, the language of its policy statement, and perhaps another round of quantitative easing. Indeed, Mr. Bernanke outlined some of these options less than a month ago during his semi-annual Congressional testimony.
The Fed will hold a policy meeting on Tuesday and markets will be looking eagerly for direction.

Pressure grows for Fed to act
By Pedro Nicolaci da Costa, Reuters - FinancialPost.com
WASHINGTON – It’s still a remote possibility, but one that becomes increasingly more plausible with every tick lower in plunging global stock markets.
While most analysts still expect the Federal Reserve to not make any major changes in policy at its meeting on Tuesday, some are beginning to wonder whether the market disruptions of recent sessions warrant some kind of central bank intervention.
U.S. stocks extended last week’s rout on Monday, with the Dow Jones industrial average tumbling down more than 5% for the day late afternoon, following Friday’s historic downgrade of the U.S. AAA credit grade by ratings firm Standard & Poor’s. U.S. stocks saw their biggest one day drop since December 1, 2008 during the worst of the financial crisis of that year. Bank shares were severely punished, raising fears of a new financial crisis, though the Fed said Friday night that the S&P downgrade of the government’s rating would have no effect on bank capital ratio regulations.

evidence of the real default; inflation ahead...

Alan Greenspan: WE CAN ALWAYS PRINT MORE MONEY

Markets to Obama: shut up
Toxic fiscal policies send investors fleeing
The Washington Times Editorial
With the stock market facing a historic meltdown, Americans could at least expect the president to be on time for a speech intended to inspire confidence. But those tuning in Monday at 1 p.m. eastern expecting to hear Mr. Obama address the rolling national financial crisis instead saw a live feed of casually dressed techies joking around in front of the presidential podium. After twenty five minutes of waiting for Mr. Obamato show up, the markets resumed tanking. The Dow Jones Industrial Average slid four points a minute before Mr. Obama arrived. It gained a few points back at first, but ten minutes into his remarks the Dow broke through the 11,000 point floor. In the 20 minutes after he finished speaking the Dow slid 200 points. The market closed having lost 634 points. It was a vote of no confidence.

Gold may hit $2,500 in 2011: JP Morgan
By Jonathan Ratner - FinancialPost.com
Gold could surge to US$2,500 per ounce or higher by the end of 2011, according to J.P. Morgan commodity analysts Colin Fenton and Jonah Waxman.
Before Standard & Poor’s downgraded the United States' debt rating, they thought spot gold could average US$1,800 by year-end. Now that view looks too conservative, the analysts told clients.
They also see a lot of upside for raw sugar prices, possibly doubling or more in a spike as a result of weakness in the U.S. dollar and rising inflation.
They analyst recommend owning commodities geared toward Asia, investment and inflation, while being underweight those tied to the United States or consumption.

Eric Sprott and the gold school look like the only game in town
By Terence Corcoran - FinancialPost.com
Eric Sprott, newly discovered as a Canadian billionaire, on Friday night is set to deliver the keynote address to a soldout GATA Gold Rush Conference in London. What a celebration that will be.
With gold hitting a record this week at US$1,666 an ounce, stock markets down 11% in two weeks, money market rates below zero, sovereign debt crises unravelling in Europe and North America, banks in turmoil and economic growth flagging with talk of a second recession, the world is unfolding as Mr. Sprott has long predicted.

Yo, Keynes! The party's well and truly over
Charles Moore reviews Keynes vs Hayek
By Charles Moore - Telegraph.co.uk
In California last month, I came across the ''Hayek vs Keynes rap''. I was introduced to it by its inventor, Russell Roberts, a fellow of the Hoover Institution, Stanford University. The two great economists, J M Keynes and F A Hayek, conduct their arguments in rap form. You can see the videos (''Fear the Boom and Bust'' and ''The Fight of the Century: Hayek vs Keynes'') on YouTube.
Last week, the BBC pinched the idea, without attribution, and in a more staid version. In a special debate at the London School of Economics, the merits of Keynes versus Hayek were debated, with two experts on each side, but without music or rhyme. A vote was taken by getting the invited audience to shout "Yo Keynes!" or "Yo Hayek!" before and after the debate. Although it was Keynes who famously advocated "animal spirits", on this occasion it was the Hayek supporters who showed more of this quality, and shouted the louder.

Dow plunges after S&P downgrade
By Ken Sweet - Money.CNN.com
NEW YORK (CNNMoney) -- Wall Street had its worst day since the 2008 financial crisis, as fearful investors reacted to the United States losing its coveted AAA credit rating.
All three major U.S. stock indexes sank between 5% and 7%, pushing the Dow below 11,000 for the first time since last November.
U.S. stocks have fallen 15% during the past two weeks.
Though observers said S&P's downgrade shouldn't matter all that much, the market wasn't buying it.

What the S&P Downgrade Means to you and Me
Written by Allen Gilmer - OilPrice.com
S&P lowered the US debt rating from AAA to AA+ on Thursday. What does this mean to you and me? Well, S&P is only one of three debt rating services, and the other two have said they aren't going to downgrade, but this is historic, nonetheless.
When your debt grade goes down, your cost of borrowing goes up. This sad fact is NOT lambasted when you are a basic middle class person. It is made out to be the crime of the century when applied to "the poor" by the socioeconomic class divide and conquer folk. It means we have too much debt to handle safely.

Gold Daily and Silver Weekly Charts - A Vote of 'No Confidence'
JESSE'S CAFÉ AMÉRICAIN

"And remember, where you have a concentration of power in a few hands, all too frequently men with the mentality of gangsters get control."
-- Lord Acton

Investors do not need a ratings agency to tell them what to think about the US sovereign debt status. The Treasury market is broad and deep, and the facts about the US financial situation are reasonably available, although sometimes hard to retrieve through the fog of rhetoric and deception.
Specialist agencies like S&P are needed to rate more obscure financial instruments and entities without a wide following or deep and liquid markets. And the US ratings agencies have shown themselves perfectly willing to produce 'ratings on demand for pay' over the last ten years for their large financial customers. And nothing appears to have changed.

RIP for America’s Triple A Rating
Written by Mad Hedge Fund Trader - OilPrice.com
At long last, after months of warnings, leaks, hand wringing, and speculation, Standard and Poor’s has at last downgraded US Treasury bonds a notch to AA+. The change was the most telegraphed ratings change in history.
You can bet this weekend saw a flurry of emergency board meetings across the country. Many institutions are only permitted to own AAA debt securities, and rules will need to be changed quickly to permit their continued residence in institutional portfolios.
I don't expect to see any major market impact, beyond a day or two. The fact is that America's financial health has been sliding down hill for the last 30 years. Standard & Poor’s should have made the downgrade during 1980-82, when Ronald Reagans quadrupled the national debt, from $1 trillion to $4 trillion.

How to Get Back to AAA (Hint: It's Easier Than You Think)
The right plan requires a simple grand bargain. More stimulus now, and more deficit reduction later. But that simple compromise might be too difficult for Washington.
By Jim Tankersley - TheAtlantic.com
It's fair to question Standard & Poor's decision to downgrade U.S. debt on Friday from AAA to AA+, but the concerns that drove it are indisputable. The ratings agency is worried that the American economy is recovering sluggishly, that government debt is mounting rapidly, and, above all, that lawmakers in Washington have mired themselves in a dysfunction that has worsened both the growth and debt problems.
It's an astute diagnosis. Now, wouldn't it be great if lawmakers had a blueprint to address those concerns, boost the economy and restore the nation's perfect credit rating in the eyes of S&P?
Actually, they've been sitting on one for nearly a year.

Bankers Launch Next Leg Of Planned Economic Collapse
Obama campaign blames the very people who sounded the alarm bell on the economy for the debt downgrade
By Paul Joseph Watson & Alex Jones - Infowars.com
The next leg of the planned economic collapse has now been launched with the stock market once again plunging as the Federal Reserve prepares to launch QE3, and it's all part of the transfer of wealth from America to the offshore elite that we have been warning about for years.
As we highlighted over two years ago, shortly before Barack Obama declared the recession to be over and the stock market was artificially inflated once more, we warned that the next phase of the financial pillaging would bring about a "sucker’s rally," with investors believing the hype about a non-existent "recovery" and ploughing all their money back into the system, only to see the rug pulled out from under their feet for a second time.
That forecast is now coming to fruition as the Dow loses over 300 points today to add to the massive downturn last week.

S&P AA+ rating on U.S. Sovereign Debt not Low Enough
-- Peter Schiff

European Central Bank must go nuclear to save Europe
A chorus of global economists has called on the European Central Bank to go far beyond pin-prick purchases of eurozone debt.
By Ambrose Evans-Pritchard - Telegraph.co.uk
It needs to launch quantitative easing on a massive scale to head off a eurozone debacle, if necessary purchasing half the entire stock of Italian and Spanish debt, they argue.
Stephen King, HSBC's chief economist, said the ECB should drop its ideological opposition to QE and embrace easy money in "exactly the same" way as the US Federal Reserve.
"At the heart of the problem is the ECB's unwillingness to be seen 'monetizing' government debt. Yet if the alternative to QE is the collapse of the euro or a descent into depression, then massive expansion of the ECB's balance sheet seems a small price to pay," he said.

Fed's Sheets Quits as Bernanke’s Chief International Adviser
By Scott Lanman - Bloomberg.com
The Federal Reserve said D. Nathan Sheets quit as the central bank’s chief international economic adviser after almost four years in the position and a day before policy makers meet.
The Fed, in a statement today in Washington, didn't say why Sheets, 46, is leaving the institution. As director of the Division of International Finance, Sheets briefed Chairman Ben S. Bernanke and other officials on economic developments outside the U.S. and represented the Fed at international meetings.

Federal Reserve openly targets dollar demise –
U.S. Treasury and Federal Reserve solution to economic crisis is to crush dollar and target the standard of living for American families.
MyBudget260.com
The collapse of the global stock markets was something that was supposed to happen if the debt ceiling wasn’t raised. But here we are, seeing a sudden correction even after the debt ceiling was raised. The Federal Reserve and U.S. Treasury are actively trying to crush the U.S. dollar so the debts of their banking allies will get cheaper as the years go by and the quality of life for most Americans continues to erode like a tide washing away a sand castle. Of course it will be expected that at some point some other archaic form of quantitative easing part three will be brought to the table but the Federal Reserve is a faith based system. Suddenly people are having less and less faith from a central bank that has sat idly by for the working and middle class while allowing the wealthiest in this country to become even wealthier simply by gaming the current financial system. The markets are not pleased with raising the debt ceiling without actually looking for new revenue streams. This is like getting a credit card line increase without your income rising. The Fed is targeting the dollar not because it is good for America, but for the specific reason that it will allow banking allies to hide the ill bets of the 2000s.

Traders Say No Sign of Liquidity Withdrawal
as Stocks Fall Most Since 2008
By Jeff Kearns, Nina Mehta and Lu Wang - Bloomberg.com
The worst stock decline since December 2008 was absorbed by the market and while some investors panicked, there were no signs liquidity was withdrawn as in the selloff of May 2010, traders said.
The Standard & Poor’s 500 Index retreated 6.7 percent to 1,119.46 at 4 p.m. in New York, closing at its lowest level of the day. The gauge slumped 11 percent in three days and fell to the lowest since September 2010. More than 30 stocks fell for each that rose on U.S. exchanges, the broadest selloff since Bloomberg began tracking the data in 2004. Almost 18 billion shares changed hands, the fifth-highest volume since mid-2008, according to data compiled by Bloomberg.

Brace for Impact
By Greg Hunter - SilverBearCafe.com
"Brace for Impact." I have thought about this economic collapse title for months. I held onto it and figured I would know when the right time was to put it out there. Today is the day. Watching mainstream media (MSM) this weekend, you would think a one notch downgrade to America's debt doesn't really matter. For example, former CNBC anchor Erin Burnett said Friday night on CNN the downgrade was "already priced into the market." The panel spoke as if the first U.S. debt downgrade in history was no big deal. To that I say, positively absurd!
The gold market must think the same thing I do because when the Asian market opened, the price of the yellow metal shot up more than $27 an ounce, which is another all-time high. At around 1:30 am today it was up $50 and ounce another all-time high! I don't know where gold will close in the U.S. market, but I think it is safe to say gold (and silver) prices are going much higher. On the other hand, stock prices are headed much lower. I'll be shocked if the Dow doesn't end 300 points lower today. I wonder if the Plunge Protection Team (aka the Presidents Working Group on Financial Markets) will step in front of this runaway locomotive.

A National Debt Of $14 Trillion? Try $211 Trillion
by NPR STAFF
When Standard & Poor's reduced the nation's credit rating from AAA to AA-plus, the United States suffered the first downgrade to its credit rating ever. S&P took this action despite the plan Congress passed this past week to raise the debt limit.
The downgrade, S&P said, "reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics."

What Will Fitch Do?
By Megan McArdle - TheAtlantic.com
Adam Ozimek says that despite what you may have heard, Fitch has not affirmed its AAA; they're still reviewing the matter. (Moodys is also apparently threatening to downgrade us by 2013 if matters don't improve. Ozimek identifies what I think is the key question:
So despite media reports like those above, Fitch has not "formally reaffirmed" the AAA rating, and a downgrade appears to be on the table for their upcoming review.
One thing to consider is that an S&P downgrade could make a Fitch downgrade more or less likely.
But which is it? I can see it two ways:

Ron Paul with Neil Cavuto on S&P Downgrade
8-6-11 on Fox News

S&P's Beers: No 2nd thoughts on US downgrade
(AP) NEW YORK — A managing director at Standard & Poor's says he has absolutely no second thoughts about the credit ratings agency's decision to cut the U.S. debt rating.
With global stocks sinking early Monday, S&P's David Beers said on ABC's "Good Morning America" that the agency's decision was based on several factors, including damage done to the U.S. reputation over the controversy surrounding the debt ceiling and concerns that underlying public finances are on an unsustainable path.

Gross Praises S&P's 'Spine' as Buffett,
Miller Say Rating Company Erred
By Sree Vidya Bhaktavatsalam - Bloomberg.com
Bill Gross, manager of the world's biggest bond mutual fund, saidStandard & Poor’s showed "spine" by cutting the U.S. debt rating, contradicting Warren Buffett and Legg Mason Inc.'s Bill Miller, who said the rating company erred.
"I think S&P has demonstrated some spine; they finally got it right," Gross, who has been critical of Treasuries for months, said in a Bloomberg Television interview with Tom Keene yesterday. The U.S. has "enormous problems," he said, referring to the country’s mounting debt.

S&P: Why we downgraded the U.S.
embedding disabled by CNN Money

Dr. Webster G. Tarpley:
U.S. Under Attack by Nwo Zombie Bankers
and Corrupt Ratings Agencies 1/2
Interesting take on role of rating agencies to raise interest rates and gouge Americans even more, after downgrade of states, for takeover of America...

Dr. Webster G. Tarpley:
U.S. Under Attack by Nwo Zombie Bankers
and Corrupt Ratings Agencies 2/2
Putin calls US a parasite; time for China to butt out of our affairs. Greeks have banned short selling for two months. Attack on Euro will accelerate; look for something dramatic.

Commodity Currencies Only Refuge Left
After Intervention Eliminates Havens
By Liz Capo McCormick, Lukanyo Mnyanda
and Allison Bennett - Bloomberg.com
The currency havens are disappearing as Switzerland and Japan intervene in foreign-exchange markets, while U.S. and European debt loads undermine credit ratings.
The biggest beneficiaries in the $4 trillion-a-day currency market may be Norway's krone and the Australia and New Zealand dollars, according to Frankfurt Trust, which oversees about $23 billion. All have debt that is less than 48 percent of gross domestic product, compared with about 60 percent in the U.S., 77 percent in the U.K. and 79 percent in Germany, according to data compiled by Bloomberg.

U.S. debt downgrade leaves China in a bind
Beijing is scolding Washington, but its huge trove of American debt leaves it few options — a dilemma that angers many ordinary Chinese.
By David Pierson and Don Lee, Los Angeles Times
Reporting from Beijing and Washington— The downgrade of U.S. government debt has put China, the United States' largest creditor, in a tough spot.
Though Beijing has scolded the United States over "its addiction to debts," Chinese officials are caught in a double bind — unable to dump their mountain of U.S. dollars and at the same time getting a tongue-lashing from their own citizens for being Uncle Sam's hapless banker.

Dorothy's silver shoes or
the re-monetization of the silver currency
of the United States of America
By Hugo Salinas Price - Plata.com.mx
Why not re-monetize the silver dollar? Re-monetization could put the silver dollar and its subsidiary silver coinage into circulation in parallel with FRNs – "Federal Reserve Notes".
There are several reasons that make this action possible, and only one that might be considered as an unimportant material obstacle.
In favor:
The silver dollar is the money that is still the Constitutional "coin of the realm", defined by Act of Congress as 371.25 grains of pure silver. (The Troy ounce contains 480 grains.)
The silver dollar is familiar or at least known to almost all Americans.
A considerable quantity of these silver dollars is owned by Americans.
The silver dollar is a cherished symbol of a great past.

Nouriel Roubini:
'Perfect Storm' Coming for Global Economy in 2013

The world runs out of options
The Great Reprieve is exhausted. The world has used up the three years' grace gained by extreme stimulus after the debt bubble burst in 2008.
By Ambrose Evans-Pritchard - Telegraph.co.uk
This time we face the risk of double-dip recession without shock absorbers. Interest rates are already at or near zero in much of the OECD club. Fiscal deficits are stretched to the limits of safety.
Far from loosening, the US is on track to tighten by 2pc of GDP next year, and Europe by 1pc to 2pc, into the slowdown.
China has already pushed credit to 200pc of GDP. It cannot repeat the trick.

Highlights From G-7 Statement
Which Basically Says That The Plunge Protection Team
Just Went Global
Submitted by Tyler Durden - ZeroHedge.com

• G7 Says Will Take Every Action to Stabilize Financial Markets
• G7 says it will commit to secure liquidity in market
• G7 will cooperate closely on currency market actions
• G7 says it will be in close contact next few weeks
• G7 says disorderly moves in markets hurt economy
• G7 says currency rates should be decided by markets

But the winning bullet point of the year is...

• G7 says currency rates should be decided by markets

As the G7 commences the biggest market intervention in history to prevent the final Ponzi unwind...

European debt crisis:
what can and can't the ECB intervention achieve?
By Andrew Lilico - Telegraph.co.uk
The European Central Bank has once again bowed to political pressure, and agreed to keep the market going during the period between when politicians announce a grand plan and when they are actually ready to implement it. That happened in the Spring of 2010 with Greece, the Summer of 2010 with Ireland, and the winter of 2010/11 with Portugal. Each time the ECB has been left in an invidious position. The politicians announce something, under pressure from markets to act, but cannot implement it straight away. Markets are unconvinced by the scheme, and do not react as the politicians hope – instead of buying, they sell more. To stop the tide of selling sweeping away the politicians' already-redundant plan, in particular by leading to bank collapses, the ECB is persuaded to intervene – always told it will just be temporary. But somehow it's never as temporary as hoped, and the ECB gets left with more and more junk on its balance sheet, to the point that its own solvency is now under question.

Chinese state media attacks America following downgrade
China has blamed America's cripplingly expensive military campaigns for the current debt crisis and called for the world's leading superpower to rethink its global "domineering".
By Malcolm Moore, Hong Kong - Telegraph.co.uk
"Since the collapse of the Soviet Union, the United States, as the world's sole superpower, has relied on its powerful military to meddle everywhere in international affairs, advancing hegemony, and paying no heed to whether the economy can support this," said an editorial on the official Xinhua news wire, China's second fierce attack on the US in three days.
"Now is the right time for the United States, trapped in economic hardship, to reflect on its domineering thinking and deeds," it added.

Berkshire, Other Insurers Get 'Negative' Tag from S&P
By Shira Ovide
Cue the music from "Jaws."
After Standard & Poor’s bit an appendage from the U.S'’s credit rating, the credit-rating firm is smelling blood in the water at Warren Buffett’s Berkshire Hathaway.
S&P today is marking down ratings on some U.S. insurance companies based on "direct and indirect sovereign risks" from the country’s credit going to AA+ from AAA.

The business of the USA... is business
WE NEED GREAT LEADERSHIP to fix this and it IS fixable

The U.S. as a Company: Net Worth of Negative $44 Trillion
USA Inc.: Red, White, and Very Blue
Mary Meeker says that if the U.S. were a corporation, it would be sick—but fixable. Ideas for solving the U.S.'s long-term fiscal mess -- By Mary Meeker - BusinessWeek.com
Dear Shareholder,
You probably don't think of yourself that way. Citizenship isn't an investment, it's a state of being. But by birth or naturalization, every American has more than just an emotional stake in the United States. We have a financial one, too. And by any measure, that stake is at risk.
Two months ago the federal government issued a 268-page Financial Report of the United States Government. It doesn't have a glossy cover with photos of smiling employees, and a lot of the numbers are in trillions. Except for that, it looks a lot like the corporate annual reports of the companies I have followed. You can see how the various lines of business are doing—Social Security, Medicare, etc. There's even a mission statement: "to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare and secure the blessings of liberty to ourselves and our posterity."

USA Inc. - Where We Are,
How We Got Here, What May Be Next

USA Inc full report

A Contagion of Bad Ideas
By Joseph E. Stiglitz - ProjectSyndicate.com
NEW YORK – The Great Recession of 2008 has morphed into the North Atlantic Recession: it is mainly Europe and the United States, not the major emerging markets, that have become mired in slow growth and high unemployment. And it is Europe and America that are marching, alone and together, to the denouement of a grand debacle. A busted bubble led to a massive Keynesian stimulus that averted a much deeper recession, but that also fueled substantial budget deficits. The response – massive spending cuts – ensures that unacceptably high levels of unemployment (a vast waste of resources and an oversupply of suffering) will continue, possibly for years.

AIG to Sue Bank of America Over Mortgages
By ERIK HOLM - WSJ.com
NEW YORK—American International Group Inc. plans to sue Bank of America Corp. Monday in an effort to recover more than $10 billion it lost on mortgage investments, and intends to object to the lender's proposed settlement with other mortgage-bond investors.
AIG's lawsuit and its separate attempt to intervene in the much-publicized $8.5 billion settlement throw another obstacle in the way of Bank of America's efforts to put its mortgage woes behind it.
The suit over the $10 billion in losses alleges "massive fraud" by Bank of America and two units it acquired, Merrill Lynch and Countrywide, saying they packaged securities that were backed by "hundreds of thousands of defective mortgages," according to a copy of the legal action AIG representatives plan to file in New York Supreme Court Monday morning.

Gerald Celente - This Week in Money - 04 August 2011

Treasury yields dive after S&P cut
S&P’s downgrade of U.S. debt raises appeal of safe-haven assets
By Deborah Levine and William L. Watts, MarketWatch
NEW YORK (MarketWatch) — Treasury prices rose on Monday, pushing 10-year yields down the most since June 2010, as investors pulled funds out of stocks and most commodities and sought the liquidity and safe-haven status of the U.S. debt market after the country’s credit rating was downgraded.
Yields on the benchmark 10-year notes dropped 18 basis points to 2.38%, after initially rising to around 2.59% in Asian trading hours. Yields and prices move in opposite directions and a basis point is 1/100th of a percentage point.

S&P Lowers Fannie, Freddie Citing Reliance on Government
By Lorraine Woellert - Bloomberg.com
Standard & Poor's lowered credit ratings on debt issued by U.S.-backed lenders including mortgage giants Fannie Mae and Freddie Mac, citing its own Aug. 5 downgrade of the federal government's AAA status.
Fannie Mae and Freddie Mac, which own or guarantee more than half of the almost $11 trillion in outstanding U.S. mortgage debt, were lowered one step from AAA to AA+, S&P said in a statement today. The downgrade reflects their "direct reliance on the U.S. government," the ratings firm said.
The two companies have operated under U.S. conservatorship since September 2008, when they were seized amid subprime mortgage losses that pushed them toward insolvency. Since then, the government-sponsored enterprises have drawn almost $170 billion in federal aid.

HOW BAD IS IT?
by John Cassidy - NewYorker.com
After the prime-time drama of showdowns on Capitol Hill, agita in the West Wing, and a doomsday deadline averted comes the local news, wherein bad things happen to real people. Friday’s payroll report for July showed that nearly fourteen million Americans are out of work, and more than six million of them have been jobless for more than six months. Those figures were slightly better than expected, but that just reflects how low expectations have sunk. Arriving a day after the Dow tumbled more than five hundred points—and just hours before Standard & Poor’s took the unprecedented step of downgrading the U.S. bond rating—the figures confirmed, if further confirmation was needed, that the country is facing an immediate economic crisis. But, even after the rating downgrade, it isn’t primarily a crisis of debt ceilings shattered, government spending gone wild, or any of the other hobgoblins that have dominated the discussion in the nation’s capital. It is, as President Obama acknowledged again last week, a crisis of jobs and prosperity.

Fannie Mae:
Faltering U.S. Confidence Foreshadows Market Turmoil
By Laura Rowley - DailyFinance.com
Americans' confidence in theeconomy, their personal finances and the housing market was already sliding ahead of the latest stock-market debacle, according to a Fannie Mae survey released Monday.
Some 70% of respondents say that the economy is moving in the wrong direction, while just 23% think it's headed the right way, according to the survey, conducted from July 5 to July 26. That's the highest level of pessimism since January of 2010.

Fannie And Freddie Downgraded; States Next?
By NED POTTER, DAVID KERLEY, JORDYN PHELPS,
and AKIKO FUJITA - ABC News
Standard & Poor's ratings service today announced it was downgrading the credit of Fannie Mae, Freddie Mac and 10 of 12 Federal Home Loan Banks that were propped up by the federal government after the financial crisis of 2008. S&P reduced their ratings one notch, to AA+ from AAA, its very highest rating.
The announcement was no surprise in light of S&P's downgrade of the government's debt on Friday evening, but the U.S. stock market -- already spooked by Friday's news -- reacted negatively anyhow. The Dow Jones Industrial Average dropped nearly 375 points after the announcement before recovering somewhat. And the price of gold, considered a safe haven in uncertain times, topped $1,700 per ounce for the first time ever.

Obamacare or America?
Liberals’ cruel, empty promises hurt rich and poor alike
By Dr. Milton R. Wolf-The Washington Times
The debt-ceiling debate has revealed that there are two types of politicians in America today: those who still claim we can afford Obamacare and those who will tell you the truth.
Perhaps the most frustrating aspect of the debt-ceiling debate, other than witnessing establishment politicians in complete denial of the mess they’ve made, is the fact that the Orwellian-named Budget Control Act of 2011 does so little to actually, you know, control the budget. Over the next decade, the plan piles up another $7 trillion of debt to be added to the current $14.5 trillion national debt - not exactly a profile in restraint.

Global Banks Poised to Slash 101,000
Jobs in Fastest Reductions Since 2008
By Lindsey Rupp - Bloomberg.com
The biggest global banks are cutting jobs at the fastest rate since 2008 as a weak U.S. economy squeezes revenue, regulators push firms to hold more capital and companies restructure businesses to improve profitability.
The 50 largest banks, including HSBC Holdings Plc (HSBA), Credit Suisse Group AG (CSGN) and Bank of America Corp. (BAC), disclosed plans for almost 60,000 reductions since Jan. 1, according to company statements and data compiled by Bloomberg Industries. At that pace, they’ll cut more than 101,000 jobs this year -- the most since 192,000 positions were targeted in 2008 amid loan losses, a global credit crunch and unprecedented government bailouts.

Donald Trump May Run for President After All
ABC News' Gregory Simmons (@abcgregory) reports:
While the bulk of GOP hopefuls jockey for position this week in Ames, Iowa, ahead of Saturday's straw poll, one former contender has signaled he might jump back in.
In a phone interview from New York Monday afternoon with CNN, Donald Trump said he "would seriously consider" While discussing the recent downgrade by Standard and Poor's, Trump said the creeping economic downturn was the impetus behind him re-visiting the question of a run.
"If the economy continues to go the way it’s going, and if the republicans pick the wrong candidate, I would certainly consider it," Trump said.

Latest Global Crisis: Solar Storms Are Set to Hit the Earth
By UJALA SEHGAL - TheAtlanticWire.com
It certainly seems like the world has been under attack lately. Now that "Debtaggedon" is over, Reuters is reporting that there have been three large explosions from the Sun over the past few days, and that "sun storms" are set to hit the Earth. The U.S. government, which is pretty pressed for time as it is right now, is warning "users of satellite, telecommunications and electric equipment to prepare for possible disruptions over the next few days." Or, as National Geographic informsus: "Storms are brewing about 93 million miles (150 million kilometers) away, and if one of them reaches Earth, it could knock out communications, scramble GPS, and leave thousands without power for weeks to months."

Syrian defense minister replaced
By Bassem Mroue-Associated Press - WashingtonTimes.com
BEIRUT — Syrian President Bashar Assad replaced his defense minister Monday with the army chief of staff in the midst of a brutal military crackdown on a 5-month-old uprising, the state-run news agency said.
Gen. Ali Habib, the country’s defense minister since 2009, was removed from his post because of health problems, the SANA report said, but some analysts said the general was unhappy with the crackdown.
He was replaced by Gen. Dawoud Rajha, a 64-year-old Christian, SANAsaid. The agency did not say who will succeed Rajha as chief of staff. His deputy is Maj. Gen. Assef Shawkat, who is married to Assad’s sister, Bushra.

*****

Iran says U.S. 'will be taught the mother of all lessons'
Editorial warns of pending cyber attack on electrical grid
By Reza Kahlili
Iran is planning to retaliate against the United States for the sabotage against its nuclear program, according to an editorial in the Kayhan newspaper, the mouthpiece of Iran's supreme leader, Ayatollah Ali Khamenei.
The U.S. has all of its infrastructure connected to the Internet, the editorial says, and as a result, "it is constantly worried about an unknown player, who they will never be able to identify ... sitting in some corner of the world who would launch an attack on a sector of (the Americans') foundations. They will be taught the mother of all lessons."
Specifically, Iran is looking into launching a cyber attack against U.S. electrical grid systems...

Iran's Revolutionary Guards Commander Becomes OPEC President
Ahmadinejad successfully made Rostam Qasemi Iran's oil minister, which also makes him leader of the global oil cartel.
TheTrumpet.com
Last Wednesday, a commander in Iran's Revolutionary Guard Corps became the nation's oil minister and the president of opec despite his being the target of international sanctions.
Back in October 2010, Iran took over the rotating presidency of opec, so the appointment of Rostam Qasemi as the country's oil minister automatically makes him the head of the powerful international oil cartel.
Iranian President Mahmoud Ahmadinejad had handpicked Qasemi for the position the previous week, and on Wednesday the Iranian Parliament made the decision official when an overwhelming 216 of the 264 mps members of parliament voted for him. The Guardian said Iran’s national media have interpreted the landslide vote as "a reaction by Iran's parliament to international sanctions against the country, especially those which have targeted the Revolutionary Guards and the country’s nuclear program."

Remember Pat Tillman?

Sources: Seal Team 6 Was Murdered

Colonel Sixx:
SEAL Team 6 Family Members,
Bin Laden Raid Was Staged!! 1/2

Colonel Sixx:
SEAL Team 6 Family Members,
Bin Laden Raid Was Staged!! 2/2

The Loud Awakening of Israel's Secular Middle Class
In the largest protests in the country's history, more than 300,000 people demanded economic reform and help from the government -- By Rafael D. Frankel - TheAtlantic.com
TEL AVIV--The Israeli people delivered a resounding response to the government Saturday night after a week of attempts by Benjamin Netanyahu's government to contain the growing protest movement here. Between 300,000 and 400,000 people took to the streets under the banner of demanding "social justice,"doubling the numbers from the week before and rivaling the largest protests the country has ever seen.
In Tel Aviv alone, around half the city's population turned out in front of the Defense Ministry to listen to speeches from community leaders that span the political spectrum. Proportionally speaking, the numbers that turned out Saturday would be the equivalent of 14 million people protesting in the United States.

----- lesson from history ------

Executive Order 6102
Forbidding the Hording of Gold Coin, Gold Bullion and Gold

By virtue of the authority vested in me by Section 5(b) of the Act of October 6, 1917, as amended by Section 2 of the Act of March 9, 1933, entitled "An Act to provide relief in the existing national emergency in banking, and for other purposes", in which amendatory Act Congress declared that a serious emergency exists, I, Franklin D. Roosevelt, President of the United States of America, do declare that said national emergency still continues to exist and pursuant to said section to do hereby prohibit the hording gold coin, gold bullion, and gold certificates within the continental United States by individuals, partnerships, associations and corporations and hereby prescribe the following regulations for carrying out the purposes of the order:

Section 1. For the purpose of this regulation, the term "hording" means the withdrawal and withholding of gold coin, gold bullion, and gold certificates from the recognized and customary channels of trade. The term "person" means any individual, partnership, association or corporation.

Section 2. All persons are hereby required to deliver on or before May 1, 1933, to a Federal Reserve bank or a branch or agency thereof or to any member bank of the Federal Reserve System all gold coin, gold bullion, and gold certificates now owned by them or coming into their ownership on or before April 28, 1933, except the following:

----------------

Exposing the Satanic Empire Final Cut
By Keith Thompson (Full Version)

"A Keith Thompson (KeithTruth) film on the ruling elite's involvement with satanic activity. This film dives into the formation of the Illuminati, how it infiltrated freemasonry, and the satanic nature of it's aims. It then goes into the Vatican's involvement with the Bohemian Grove, New world order elite, And freemasonry while exposing how the vatican is now anti-christian. The last segment debunks Zeitgeist type claims of a Christ conspiracy and exposes the plan to destroy christianity making a new age one world religion."

The Return of the Nephilim
By Chuck Missler

What's behind the UFO's? Are they real? Where are they from? Are they the Nephilim of ages past? What does the Bible say about them? What's their agenda for Planet Earth? This subject has not gone away. On the contrary, much new evidence has surfaced with global implications. Chuck explores the Biblical relevance and disturbing agenda of the apparent extraterrestrial life forms that have been forcing themselves into our global consciousness and reveals their most disturbing agenda.

- - - - - - - - - - - - - - - -
Archived Page Link
- - - - - - - - - - - - - - - -

Monday 08.08.2011

Illinois, Washington Banks Fail
[Google the title for free article pass]
By JOAN E. SOLSMAN - WSJ.com - $$
U.S. regulators said two more banks in Washington state and Illinois had failed.
The Federal Deposit Insurance Corp. said Bank of Whitman in Washington and Bank of Shorewood in Illinois were closed Friday by their respective state financial regulators.
Columbia State Bank, the operating subsidiary of Columbia Banking System Inc., agreed to take over Bank of Whitman as part of a purchase-and-assumption deal with the FDIC, while Heartland Bank & Trust Co. agreed to take over Shorewood in a similar deal.

S&P downgrades U.S. credit rating for first time
By Zachary A. Goldfarb - WashingtonPost.com
Standard & Poor’s announced Friday night that it has downgraded the U.S. credit rating for the first time, dealing a symbolic blow to the world’s economic superpower in what was a sharply worded critique of the American political system.
Lowering the nation’s rating to one notch below AAA, the credit rating company said "political brinkmanship" in the debate over the debt had made the U.S. government’s ability to manage its finances "less stable, less effective and less predictable." It said the bipartisan agreement reached this week to find at least $2.1 trillion in budget savings "fell short" of what was necessary to tame the nation’s debt over time and predicted that leaders would not be likely to achieve more savings in the future.

That 1937 Feeling All Over Again
By: Reuters - CNBC.com
U.S. Federal Reserve Chairman Ben Bernanke, an expert on the Great Depression, once promised that the central bank would never repeat its 1937 mistake of rushing to tighten monetary policy too soon and prolonging an economic slump.
He has been true to his word, keeping interest rates near zero since late 2008 and more than tripling the size of the Fed's balance sheet to $2.85 trillion. But cutbacks in government spending may end up having a similarly chilling effect on the economy, and there is little Bernanke can do to counter that.
Back in 1937, the U.S. economy had been growing rapidly for three years, thanks in large part to government programs aimed at ending the deep recession that began in 1929.

G7: Commited to Ensure Liquidity, Support Markets
By: Reuters - CNBC.com
The Group of Seven nations is committed to taking coordinated action to ensure liquidity and to support financial market functioning, financial stability and economic growth, G7 finance ministers and central bank governors said in a statement.
"These actions, together with continuing fiscal discipline efforts will enable long-term fiscal sustainability," the statement released early on Monday said.
"No change in fundamentals warrants the recent financial tensions faced by Spain and Italy. We welcome the additional policy measures announced by Italy and Spain to strengthen fiscal discipline and underpin the recovery in economic activity and job creation," it added.

S&P executive: 1 in 3 chance of future downgrade
WASHINGTON (AP) -- A Standard & Poor's official says there is a 1 in 3 chance that the U.S. credit rating could be downgraded another notch if conditions erode over the next six to 24 months.
The credit rating agency's managing director, John Chambers, tells ABC's "This Week" that if the fiscal position of the U.S. deteriorates further, or if political gridlock tightens even more, a further downgrade is possible.
Chambers also said Sunday that it would take "stabilization and eventual decline" of the federal debt as a share of the economy as well as more consensus in Washington for the U.S. to win back a top rating.

AAA to AA+: Here come the battery jokes!
By Annalyn Censky and Charles Riley @CNNMoney
NEW YORK (CNNMoney) -- S&P's rating downgrade of the United States has hit a nerve with the public, sparking outrage, confusion and even jokes.
Never before has the world's largest economy been stripped of its prized triple-A status. That changed Friday, when Standard & Poor's downgraded the U.S. to AA+, a rating still considered high quality, but no longer on top.
After an event like this, whoever thought batteries could be so funny?
Twitter user scaryduck posted: "They've changed the US from AAA to AA. All this time and they didn't realise they were using the wrong batteries."

No Chance of Default, US Can Print Money: Greenspan
By: Patrick Allen - CNBC EMEA Head of News
Former Federal Reserve Chairman Alan Greenspan on Sunday ruled out the chance of a US default following S&P's decision to downgrade America's credit rating.
"The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default" said Greenspan on NBC's Meet the Press
"What I think the S&P thing did was to hit a nerve that there's something basically bad going on, and it's hit the self-esteem of the United States, the psyche" said Greenspan
Austan Goolsbee, the chairman of the White House's council of economic advisors, hit out at S&P on the same show, insisting the credit ratings agency had got its math wrong.

China tell US, "good old days" of borrowing are OVER!
9-World leaders confer on debt crises this weekend
By Paul Taylor and Stella Dawson
PARIS/WASHINGTON, Aug 6 (Reuters) - Global leaders on Saturday arranged a round of emergency calls to discuss the twin debt crises in Europe and the United States that are causing turmoil in financial markets.
After a week that saw $2.5 trillion wiped off global stock markets, they are under pressure to show political leadership and reassure markets that Western governments have both the will and ability to reduce their huge and growing public debt loads.
French President Nicolas Sarkozy, who chairs the G7/G20 group of leading economies, conferred with Britain's Prime Minister David Cameron ahead of a call planned for this weekend by G7 finance ministers and central bankers.

China rips U.S. on debt-rating downgrade
White House says nation "must do better" in deficit work
NEW YORK (MarketWatch) — China used Standard & Poor's decision to downgrade the U.S. credit rating to issue a sharply-worded rebuke of the U.S. government on Saturday, saying Washington can no longer borrow its way out of trouble.
The White House on Saturday responded to the downgrade by urging political factions to join forces to repair the U.S. economy and put the country’s fiscal house in order.
"The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone," China's state-run Xinhua News Agency said Saturday, in Beijing’s first official response to the S&P action, according to wire service reports.

Dollar to Be 'Discarded' by World: China Rating Agency
By: Ee Sing Wong - CNBC.com
The man who leads one of China's top rating agencies says the greenback's status as the world's reserve currency is set to wane as the world’s most powerful policy makers convene to examine the implication of S&P's decision to strip the United States of its triple "A" rating.
In comments emailed to CNBC, Guan Jianzhong, chairman of Dagong Global Credit Rating, said the currency is "gradually discarded by the world," and the "process will be irreversible."
Dagong made headlines last week when it became the first rating agency to cut its U.S. credit rating from "A+" to "A" after policymakers in Washington failed to act in a timely manner to lift its debt celing.

S&P Strips U.S. of Top Credit Rating
Unprecedented Downgrade Comes After Last-Minute Standoff;
Treasury Says Decision Is 'Flawed by a $2 Trillion Error'
By DAMIAN PALETTA And MATT PHILLIPS - WSJ.com
A cornerstone of the global financial system was shaken Friday when officials at ratings firm Standard & Poor's said U.S. Treasury debt no longer deserved to be considered among the safest investments in the world.
S&P removed for the first time the triple-A rating the U.S. has held for 70 years, saying the budget deal recently brokered in Washington didn't do enough to address the gloomy outlook for America's finances. It downgraded long-term U.S. debt to AA+, a score that ranks below more than a dozen countries, including Liechtenstein, and on par with Belgium and New Zealand. S&P also put the new grade on "negative outlook," meaning the U.S. has little chance of regaining the top rating in the near term.

S&P downgrades U.S. credit rating
By Charles Riley @CNNMoney
NEW YORK (CNNMoney) -- Credit rating agency Standard & Poor's on Friday downgraded the credit rating of the United States, stripping the world's largest economy of its prized AAA status.
In July, S&P placed the United States' rating on "CreditWatch with negative implications" as the debt ceiling debate devolved into partisan bickering.
To avoid a downgrade, S&P said the United States needed to not only raise the debt ceiling, but also develop a "credible" plan to tackle the nation's long-term debt.

Bernanke Models Prove Faulty as Forecasts Succumb to Change
By Craig Torres - WashingtonPost.com
Aug. 5 (Bloomberg) -- Chairman Ben S. Bernanke and his Federal Reserve colleagues are preparing to meet next week as two-year Treasury yields near a record low signal a U.S. economy on the knife's edge between growth and contraction.
Guiding their assessment of the outlook for the world's largest economy will be forecasts contained in the so-called Teal Book, a confidential staff report with a blue-green cover. Policy makers' confidence in those forecasts may be tempered as the course of the expansion has confounded their expectations.

More Obama Spending Won’t Do It and Stocks Know It
By: Larry Kudlow - CNBC Anchor
There he goes again. Out on the campaign trail, President Obama is proposing more federal spending as his answer to sluggish growth and jobs. That won't do it, Mr. President.
He wants more infrastructure spending, undoubtedly in the form of an infrastructure bank. That’s a terrible idea. It's borrowed from Latin America, where bloated and corrupt bureaucratic construction agencies have helped bankrupt any number of countries in the past.
He wants to lengthen 99-week unemployment insurance, although numerous studies have shown that continuous unemployment benefits are associated with higher unemployment.

Why Treasury (and the Rest of Washington) Is So Furious at S&P
S&P made a big math mistake.
We're in danger of making an even bigger one.
By Derek Thompson - TheAtlantic.com
S&P's historic downgrade of U.S. debt was based on a $2 trillion math error, the Treasury Department saidin a post published the Department's website on Saturday and emailed to reporters the same day.
For some perspective: $2 trillion is 14% of gross domestic product today, 8% of GDP in 2012, and more than a fifth of our projected debt accumulation in the next decade. It's the difference between the total cuts in the deal we got (including the supercommittee or trigger mechanism scheduled for the end of 2011) and a deal that most people agree would have averted downgrade altogether. It's a big deal.

Fed Says U.S. Bank Capital Won't Be Affected by S&P Action
By Jeannine Aversa - Bloomberg.com
Standard & Poor’s decision to cut the U.S. credit rating won’t affect the capital positions of the nation's banks, regulators said yesterday.
Banks, which hold Treasuries as a form of capital, won’t need to build larger cushions to protect against possible losses from soured loans, a group of banking regulators, including the Fed and the Federal Deposit Insurance Corp., said in a statement in Washington.
"For risk-based capital purposes, the risk weights for Treasury securities and other securities issued or guaranteed by the U.S. government, government agencies and government- sponsored enterprises will not change," the regulators said.

Inflation worries pose bar to QE3
[Google title for free FT article pass]
By Robin Harding in Washington
Last August, with job creation stalled and the stock market on the slide, the US Federal Reserve made its first moves towards another round of quantitative easing.
In a speech at the Fed’s annual gathering at Jackson Hole, Ben Bernanke, its chairman, began to signal the prospect of more asset purchases in order to drive down long-term interest rates and stimulate the economy. The $600bn round of purchases that became known as QE2 was eventually launched last November.
History seemed to be repeating itself after this week’s stock market plunge, leading many in the markets to speculate about a new round of easing, or "QE3". But there is a big difference between this year and last, which means the Fed is unlikely to make a policy change when it meets to set rates on Tuesday. That difference is inflation.

Your money in a AA-rated U.S.
By Paul Lim, Susie Poppick, and Angela Wu @Money.CNN.com
Money Magazine -- United States bonds are no longer officially rated Triple-A, at least in the eyes of Standard & Poor's.
And while Moody's and Fitch, the other leading rating agencies, have affirmed the top rating, they too have worried about the long-term prospects for the United States.
None of this necessarily means disaster for your money. The United States has not been downgraded to "junk" status, like say, Greece. The rating is still very high -- just not tops.

Dollar to drop on S&P, flows seen to safe assets
NEW YORK (Reuters) - The U.S. dollar is likely to take a further beating against the Swiss franc and Japanese yen on Monday, while global stocks could tumble after the United States lost its top-tier credit rating from Standard & Poor's.
Losses against the euro, however, could be tempered by the euro zone's escalating debt crisis as officials there discuss ways to reduce borrowing costs for large euro zone economies Spain and Italy.
The dollar's fall against the safe-haven Swiss franc and yen could be limited by possible intervention by the Bank of Japan and Swiss National Bank to stem their surging currencies.

Muni Market Prepares for Lost AAA Ratings
By Michelle Kaske - Bloomberg.com
The $2.9 trillion municipal bond market is preparing for "hundreds and hundreds" of downgrades after Standard & Poor's lowered the U.S. one level to AA+, the first-ever reduction for the country.
S&P is likely to cut its ratings on municipal debt secured by the federal government, such as pre-refunded bonds, tax- exempts backed by U.S. agencies, and credits that are most dependent on federal spending, Peter DeGroot, head of municipal research at JPMorgan Chase & Co. (JPM), wrote in an Aug. 5 report distributed after the federal downgrade. The New York-based ratings company said it would release a statement on state and local issuers today.

Republicans Want Geithner to Walk The Plank After Credit Downgrade
By Stephen Clark - FOXNews.com
With the U.S. losing its Triple-A credit rating for the first time ever, Republican lawmakers and presidential contenders are calling on President Obama to fire Treasury Secretary Timothy Geithner.
Standard & Poor’s decision late Friday to lower the nation’s credit rating to AA-plus is an embarrassment for Geithner who insisted in April that there was no possibility that the U.S. debt would be downgraded despite a warning from the credit agency.
"No risk," Geithner told Fox Business at the time. When asked whether S&P was wrong and that the U.S. would keep its top credit rating, Geithner said, "Absolutely".

Geithner Tells Obama He’ll Remain at Treasury
By Ian Katz - Bloomberg.com
Treasury Secretary Timothy F. Geithner, a central figure in the U.S. government’s bailouts of Wall Street banks and efforts to raise the debt limit, told President Barack Obama that he intends to remain in his job, according to a Treasury Department spokeswoman.
"Secretary Geithner has let the president know that he plans to stay on in his position at Treasury," Jenni LeCompte, assistant secretary for public affairs, said in a statement today in Washington. "He looks forward to the important work ahead on the challenges facing our great country."

Uncle Sam's Downgraded Reality
By DAVID REILLY - WSJ.com
An immediate joke in the wake of the U.S. downgrade was that investors confronted by the lesser standing of U.S. Treasurys will flee to the safety of, well, U.S. Treasurys.
There is possibly some truth in the quip. The move by Standard & Poor's to lower the long-term U.S. rating to AA+ is huge symbolically and could cause some in markets to flee risk. But the impact may be less than feared and might even produce some counter-intuitive results.
This is partly because markets knew there was a good chance S&P would act, given its earlier warnings and the lackluster deficit-reduction deal that emerged from Washington after the debt-ceiling debacle. Another factor is that the one-notch downgrade was by just one ratings agency. Moody's and Fitch haven't so far followed S&P's move. This was the most benign outcome, if a downgrade was to happen.

Don't panic: Why S&P's downgrade means nothing
Washington still useless, Treasuries still a safe haven
By Jeff Reeves
ROCKVILLE, Md. (MarketWatch) — After the Standard & Poor's downgrade of U.S. debt, America now carries a rating of AA-plus instead of the coveted AAA rating on its Treasury bonds. Austria, Norway, Germany and Australia are no longer our peers ratings-wise — we are, instead, in the company of Japan, China, Spain, Taiwan and Slovenia.
Market watchers have suspected a downgrade was in the works for a while. Not to toot my own horn, but last week in my column about five ugly truths about the debt ceiling, one of my takeaways from the deal was that a credit downgrade was in the works regardless of the fact we avoided default. Looks like my prediction, and the prediction of other financial journalists who made the same call of a credit downgrade, didn’t take long to come true. Read 5 ugly truths about the debt ceiling.

Some Thoughts on the S&P Downgrade
By Clive Crook - TheAtlantic.com
In a way it will be puzzling if the S&P downgrade--despite all the blather about its historic significance--changes anything at all. Certainly, the news should not have come as a surprise: the agency has been talking about it for weeks and the rating for US government debt had been under formal negative review before the announcement. If there is a surprise, it is mainly that the agency had the nerve to go through with it.
More fundamentally, what new information did the downgrade and the analysis supporting it provide? None. After their performance of the past few years, rating agency analysts have, or should have, little credibility in any case. Reports of the initial $2 trillion misunderstanding in S&P's examination of the Treasury's books (they used the wrong CBO baseline) lend a tragicomic note, and run their reputational capital down even further. And all this would be true even if US Treasuries were arcane instruments that few investors could afford to monitor carefully, forcing them to rely on the agencies for lack of anything better. In fact, of course, US Treasuries are the most widely and intensely analyzed obligations on the planet. What does S&P know about them that you and I don't? The informational content of the downgrade is precisely zero.

Screwed, Blued and Tattooed
By Murray T. Bass - PatriotPost.com
Yes, Cheated, Robbed and Beaten again. In his own way Boehner is worse than Pelosi. We knew what to expect from her. We had hoped for better from Boehner and got betrayed. Cheated robbed and beaten. We got debt without representation.
They didn't listen to us. They never do. The Republican "establishment their PACs , the Democrats and the media are giving the Tea Party credit for something they didn't do or get. Blowing "Victory Smoke" at the Tea Party members and supporters to make them float. A losing is winning trip. More lies and deceit. The Tea Party got nothing out of the "Deal" but ignored. Ignored. And, that's no victory.
American taxpayers got nothing from the "Deal" but about $20,000.00 more debt each and the same lies and deceit. They just got ignored, too.

Independents Hate Both Parties as Never Before
The recent wave of alienation could hit Democrats and Republicans alike in 2012. Will voters throw the bums out again?
By Ronald Brownstein - TheAtlantic.com
In the shadow of the bitterly fought agreement to raise the federal debt ceiling, the independent voters who usually hold the balance of power in American politics are expressing astronomical levels of discontent with President Obama, Congress, and the Washington system itself.
This towering wave of alienation presages more volatility for a political system that has seen the public turn from Republicans in 2004 toward Democrats in 2006 and 2008, only to snap back toward the GOP with near-record force in 2010. Now, on several key measures, the public's assessment of Congress is even more bleak than it was at this point in the last election cycle--even as Obama's ratings have fallen to some of the lowest levels of his presidency, particularly among independents.

Tea Party Movement as Large as
Nation's Entire Liberal Population, Say Gallup Polls
By Terence P. Jeffrey - CNSNews.com
Tea Party activist Lawrence Crane secures a large U.S. flag while preparing for a Tea Party rally to be held at the Capitol in Sacramento, Calif., Thursday, April 15, 2010. (AP Photo/Rich Pedroncelli)
(CNSNews.com) - The percentage of Americans who expressly state that they are supporters of the Tea Party movement is currently about as large at 22 percent of the population as the 21 percent who say they are liberals, according to recent but separate Gallup polls.
Meanwhile, at 41 percent of the population, according to Gallup, self-described conservatives outnumber both Tea Party movement supporters and liberals by nearly 2-to-1.

FLASHBACK: Obama: My Presidency Will Be
'A One-Term Proposition' If Economy Doesn't Turn In 3 Years
By Nicholas Ballasy
(CNSNews.com) - President Barack Obama said in February 2009 that his presidency would be "one-term proposition" if the economy did not recover in three years, giving him less than six months from today.
"Look, I'm at the start of my administration. One nice thing about the situation I find myself in is that I will be held accountable. You know, I've got four years," Obama told The Today Show's Matt Lauer on February 1, 2009.

Warren Buffett Discounts S&P Downgrade of U.S.,
More Self-Serving Days To Follow
By JON C. OGG - 24/7 Wall St.
If you can count on one thing from Warren Buffett of Berkshire Hathaway Inc. (NYSE: BRK-A) any longer, it is for him to stay very positive and upbeat about the long-term prospects of the United States. After S&P downgraded the "AAA" rating of the United States, Buffett told FOX Business Network that he does not get the downgrade and that it basically won't change his investments.
In short, he thinks that S&P is off-base and said that the United States should be a Quadruple-A in ratings. He also said he thinks that this will have a limited impact if no new developments occur. He noted the debt being in dollars allows the United States to print its way out of debt payments, even if that does mean inflation.

Global leaders discuss U.S., European debt
ECB to make decision on Italy bond purchases Sunday to limit debt -- By Ronald D. Orol, MarketWatch
WASHINGTON (MarketWatch) — Global policymakers held emergency talks Sunday to discuss the euro-zone debt crisis in Europe and the first-ever downgrade of the U.S. government’s top-tier credit rating by Standard & Poor’s, according to media reports.
The European Central Bank reportedly scheduled a meeting for Sunday evening to discuss whether to start buying Italian debt in an effort to calm the markets, according to reports.
Fears that the euro-zone crisis is spreading to bigger economies such as Italy and Spain have rattled European markets in recent days. The video conference was scheduled to begin at 11 a.m. Eastern U.S. time Sunday, according to a Dow Jones Newswires report.

Western Leaders Seek to Contain European Debt Crisis,
Turmoil in Markets
By Gregory Viscusi - Bloomberg.com
Western leaders huddled on preventing the debt crisis from spreading to the core of the euro area after the biggest weekly decline in global stocks since 2008.
President Barack Obama and British Prime Minister David Cameronjoined telephone consultations with euro-area counterparts yesterday as investors signaled concern a July 21 agreement to expand the 440 billion-euro ($628 billion) rescue fund would fail to stop the rot.
After a series of calls involving German Chancellor Angela Merkel, French President Nicolas Sarkozy, Spanish Prime Minister Jose Luis Rodriguez Zapatero and Italian Prime Minister Silvio Berlusconi, European leaders pledged to push implementation of last month’s deal on the European Financial Stability Facility. Berlusconi announced measures to speed austerity and target a balanced budget in 2013, a year ahead of schedule.

France’s AAA Rating May Be Vulnerable
By Gregory Viscusi - Bloomberg.com
The decision by Standard & Poor’s to downgrade the U.S. credit rating leaves France as the AAA country most likely to lose its top grade, some investors and economists say.
France is more expensive to insure against default than lower-rated governments including Malaysia, Thailand, Japan, Mexico, Czech Republic, the State of Texas and the U.S.
"France is not, in my view, a AAA country," said Paul Donovan, London-based deputy head of global economics at UBS AG. "France can’t print its own money, a critical distinction from the U.S. It is not treated as AAA by the markets."

Dollar Weakens in Early Asia Trade
After S&P Cuts U.S.'s Rating From AAA
By Robert Burgess - Bloomberg.com
The dollar fell after Standard & Poor’s downgraded the U.S.’s long-term credit rating from AAA on concern that the move will cause consumer and business confidence to further deteriorate.
The greenback weakened against the euro and yen in early Asia-Pacific trading following the reduction to AA+ on Aug. 5. IntercontinentalExchange Inc.’s Dollar Index, which measures the currency against six of the U.S.’s major trading partners, rose last week for the first time since the period ended July 8.

Why High Oil Prices will Make the Next Debt Crisis Even Worse
Written by Gail Tverberg - OilPrice.com
Most people assume that the mismatch between US federal government revenue and expenses will go away, with enough time. All that is needed is a little "patch" now, and some more time, in order for the mismatch to disappear.
I don’t think the mismatch can be made to go away, partly because the mismatch between government revenue and expense is far worse than most realize. Furthermore, high oil prices seem to lead to recession, making it more difficult to fix the gap between government revenue and expenses.
There is good reason to believe that oil production will not increase materially in the next few years. With oil demand from China and India continuing to increase, the mismatch between oil supply and demand can be expected to get worse with time, leading to more recession, and a greater gap between US federal government revenue and expenses.

Oil and Gas Pipelines at Risk from Ethanol Bacteria
Written by EcoSeed - OilPrice.com
Researchers from the National Institute of Standards and Technology discovered that bacteria found in ethanol hasten the deterioration and cracking of pipeline steels.
Ethanol is a biofuel that is commonly used as a fuel additive because of its oxygen content and octane rating. Moreover, modified engines used ethanol solely as fuel.
Recently there have been proposals that existing gas pipelines and other infrastructure could be used to transport ethanol and increase its deployment. However, N.I.S.T. researchers exposed common pipeline steel to ethanol and found that ethanol and the bacteria found within can have a corrosive effect.

It's the Unfunded Wars and the Financial Fraud,
and the Unwillingness to Reform
JESSE'S CAFÉ AMÉRICAIN
.... The repeal of Glass-Steagall and the growth of unregulated financial products, the co-opting of the regulatory agencies, the growth of corporate influence in Washington, and two unfunded and very costly wars of long duration, based largely on lies and distortions based on a terror attack by a small group of people, coupled with tax cuts for the wealthy.
There is relatively little discussion, much less investigation, indictments and convictions, from one of the largest financial frauds in history.
And within twelve months of the crisis breaking, Wall Street bonuses were back to record levels, even as the rest of the country began its long downward spiral into debt, downgrade, and despair.
That is the long and short of it. And it bodes ill that these issues are so infrequently mentioned in the political and economic discussions circling Washington and New York today.

Greenspan Sees Stocks Falling After S&P Cut
By Greg Stohr and James Tyson - Bloomberg.com
Former Federal Reserve Chairman Alan Greenspan said he expects stocks to continue their decline after Standard & Poor's downgraded the nation’s credit rating, even as an S&P official predicted little market impact.
"Considering the momentum in which the market went down over the last week, it is very unlikely, if history is any guide, that this isn't going to take a while to bottom out," Greenspan said on NBC's "Meet the Press" program. “So the initial reaction in my judgment is going to be negative."

European fear: The wolves are at the gate
By Charles Riley @CNNMoney
NEW YORK (CNNMoney) -- A sharp drop in manufacturing, a towering debt-to-GDP ratio and a jaw-dropping decline in equity markets.
No -- not the United States. Europe!
Many of the underlying tremors that led to this week's steep sell-off in the U.S. have been festering in plain sight in Europe for a year or more.

Who Wants to Go Back to the '50s?
By Bill Boyarsky - Truthdig.com
Of all the ways President Barack Obama tried to rationalize his surrender to the Republicans, none was more infuriating than when he said the deficit deal would lead to the "lowest level of annual domestic spending since Dwight Eisenhower was president."
Since Eisenhower was president? That was half a century ago — before the Civil Rights Act, the Voting Rights Act, Medicare, Medicaid, food stamps and federal aid to education, including Head Start.
"These programs defined America as a decent, yes, a Great Society," Democratic Sen. Tom Harkin of Iowa said Monday during the debate on the so-called compromise debt settlement. What President Obama supported, he said, was "tantamount to repeal of the Great Society."

The Power of Bad Ideas
By Peggy Noonan - PatriotPost.com
There was drama at the White House this week when a man tried to hurl himself over the fence. But the Secret Service intervened and talked the president into going back inside and finishing his term.
That's from Conan O'Brien's monologue the other night. It captures the moment pretty well. Mr. Obama's poll numbers continue to fall, his position in the battleground states to deteriorate. From Politico: "Obama emerges from the months-long [debt ceiling] fracas weaker -- and facing much deeper and more durable political obstacles -- than his own advisers ever imagined." The president seemed to admit as much when he met with supporters at a fund-raiser in Chicago. "When I said 'Change we can believe in,' I didn't say, 'Change we can believe in tomorrow.' Not 'Change we can believe in next week.' We knew this was going to take time." When presidents talk like that, they're saying: This isn't working.

Back home after debt debate,
healthcare reform is the topic for GOP lawmakers
By Elise Viebeck - TheHill.com
Healthcare reform still loomed large in voters' minds last week as members of Congress began their traditional series of recess town hall meetings.
The issue had drifted down the political agenda after the 2010 midterm elections, even amid several court challenges to the law and news of more exemptions from the plan's individual mandate.
But now, after a debt-ceiling deal that left many Republican House members cold, some freshmen already have tried to frame their 'yea' votes by referring again to the healthcare bill.

On A Day Of Credit Concerns, Postal Service May Default
by Douglas A. McIntyre - 24/7 Wall St
On the day that the US lost its Aaa credit rating as determined by S&P and as Europe tried to calm the markets about the risks of Spain’s and Italy’s sovereign debt, the US Postal Service said it was on the brink of default.
The Postal Service said it lost $3.1 billion in the last quarter. The service’s CFO called that an improvement.

45,000 Verizon workers go on strike
By Ronald D. Orol - MArketWatch.com
WASHINGTON (MarketWatch) - Some 45,000 Verizon Communications Inc. workers went on strike Sunday morning after their contract expired midnight Saturday, according to reports. Verizon said in a statement that it couldn't reach an agreement with its workers in two unions representing the company's wireline employees in the Northeast and Mid-Atlantic states and union leaders announced a deal to call a strike, the phone and internet company said Sunday.

Obama's biggest challenge: Jobs
With the U.S. recovery slowed to a crawl and Europe mired in a new debt crisis, a rebound is far from certain.
By Doyle McManus - LATimes.com
The central question facing Barack Obama's 2012 reelection campaign is this: Can the president persuade voters to let him keep his job when so many of them have lost theirs?
Last week, after another run of bad economic news, the president and his staff tried their best to sound upbeat. In public, they barely acknowledged the alarming slump in the world's financial markets; the numbers to look at, Obama said, were the Labor Department's revised job creation estimates for the last three months. "The unemployment rate went down, not up," he said on Friday. "Things will get better."

CNN interactive map...
Where the Jobs Are
See which states and sectors have led the way in job creation.

Fannie's Bailout Grows by $5 Billion as It Squeezes Bank of America
The firm is taking a more aggressive stance on forcing the institution to repurchase its bad loans, which is good news for taxpayers -- By Daniel Indiviglio - TheAtlantic.com
Fannie Mae hasn't given up yet. Although the troubled mortgage company requested another $5.1 billion from the U.S. government to survive on Friday, it appears to be squeezing every penny out of Bank of America that it can. The bank reports that its loss on Fannie repurchases is no longer certain, as Fannie's strategy evolves. This is good news for taxpayers, but bad news for Bank of America's shareholders.
Taxpayers Throw Fannie Another $5.1 Billion
As home prices began to fall in the second half of last year, Fannie's losses began to grow again. In the second quarter, the firm lost $6.1 billion, down a bit from its first quarter loss of $6.5 billion. Most of this loss will be covered by taxpayers, however. Fannie was seized by the U.S. government in 2008 in order to prevent a catastrophic market failure.

What's the Matter With Wisconsin This Time
Democratic allegations of conservative attempts to suppress the vote in advance of recall elections Tuesday are probably overblown -- By Jordan Ellenberg - TheAtlantic.com
MADISON -- Here's what you need to know about what's going on in Wisconsin right now: Nobody knows what the hell is going on in Wisconsin. Over the next two weeks, eight recall elections will determine whether the GOP maintains control over the State Senate; six Republican senators and two Democrats stand to lose their seats. Democrats need to win five of those contests to gain control of the chamber. Who's ahead? It depends who you ask. There are some poll results, which show close races in almost every contested district. But interpreting polls requires understanding which respondents are actually likely to vote, and likely voter models are based on results from similar elections in the past.
There are no similar elections in the past. We're in unexplored territory.

Casa Grande braces for potential economic windfall
By LARRY LOCKHART - TriValleyCentral.com
HOW MUCH? AZ Sourcing LLC’s Phoenix Mart "sourcing center" announced Wednesday will cost more than $150 million to build and Casa Grande expects roughly $4.5 million in construction taxes alone.
Of course, that does not include ancillary benefits from the completed project, which is expected to attract international buyers who would require food, lodging and entertainment, and who might consider products made and/or sold locally — and the promise of thousands of jobs.

PhoenixMart - America's Product Center

The 14 Million-Person Question:
Can Washington Do Anything About Jobs?
By Jim Tankersley, National Journal - TheAtlantic.com
From the time the United States hit its statutory debt limit on May 16 until President Obama signed a bill raising the limit on August 2, the Dow Jones industrial average fell nearly 600 points. (By 1 p.m. on Thursday, it had fallen roughly 300 points beyond that, effectively wiping out all the market's 2011 gains.) Lenders foreclosed on some 500,000 homeowners. The Commerce Department reported that the economy grew by just 0.4 percent in the first quarter of the year and 1.3 percent in the second. About 300,000 more Americans went looking for a job and couldn't find one.
Lawmakers didn't do a thing about any of that.

Report calls on Pentagon
to prepare for possible debt-limit deal spending cuts
By John T. Bennett - TheHill.com
Top Pentagon brass should craft plans so the Defense Department is ready if a so-called trigger in the debt-ceiling law is pulled, a move that would return the annual military budget to the 2007 level according to a new report.
The debt-ceiling legislation signed into law on Tuesday contains no firm figure for how deeply Pentagon and national security agency budgets will shrink over the next decade. But the White House and senior Democratic lawmakers say it'll be $350 billion.

Proposed U.N. Treaty to Regulate Global Firearms Trad
Raising Concerns for U.S. Gun Makers
By Maxim Lott - FOXNews.com
A controversial U.N. proposed treaty aimed at regulating guns worldwide has been shrouded by confusion and misinformation.
Known informally as the 'Small Arms Treaty,' its detractors have charged the proposed agreement with secretly trying to take guns out of the hands of Americans and circumventing the 2nd Amendment.
While that is unlikely, a working draft proposal obtained by FoxNews.com contains language that some gun advocates say could have a real impact on American gun makers.

China's Manhattan Knock-Off
By Colleen Kinder - TheAtlantic.com
Large-scale knock-offs have become a Chinese specialty. There's the amusement park in Shenzhen where you can take your photo beside a fake Taj Mahal. There's a touristy town that will so closely copy the alpine village of Hallstat, the Dutch mayor has complained to the UN. And on a peninsula southeast of Beijing, the most ambitious knock-off of all is in the works: a financial center in the likeness and scale of Manhattan.
Two years into its ten-year construction plan, Yujiapu is still a field of cranes, fenced along the perimeter and hazy behind the smog. The only thing that resembles New York City is a diorama in the lobby of Binhai New Area CBD Office, where bureaucrats like Vincent Lee of the Business Bureau, are working to deliver on their ambitious promise of making this 3.86 sq km area the "largest single financial center on the world."

NATO Helicopter Shot Down in Afghanistan,
Killing 30 U.S. Special Forces
By Eltaf Najafizada and Viola Gienger - Bloomberg.com
A North Atlantic Treaty Organization CH-47 Chinook helicopter was shot down in an eastern province of Afghanistan, killing 30 U.S. special operations forces, seven Afghan commandos and a civilian interpreter.
Twenty-two of the Americans killed were members of the U.S. Navy SEAL commando force, some from the elite unit once known as SEAL Team Six that carried out the May raid that killed al-Qaeda leader Osama bin Laden in Abbottabad, Pakistan, said two U.S. officials today on condition of anonymity.

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Friday 08.05.2011

Marc Faber - An Ounce of Gold Will Buy the Dow Jones
March, 2011

Saved by a Trillion-Dollar Coin?
Mises Daily: by Robert P. Murphy
Now that the "crisis" over the federal debt ceiling has been averted, we can leisurely explore two of the wackier proposals that emerged during the state of panic. Not surprisingly, the schemes involved the Federal Reserve and its ability to circumvent, not just standard accounting, but also the traditional divisions of political power. It's worth studying the episode carefully because we will probably see one or more of these "solutions" promoted as the only answer to another crisis in the not-too-distant future.
Bernanke and Geithner Don't Need No Stinkin' Debt-Ceiling Increase
Late last week, when more and more analysts contemplated the horror of a US government default and partial shutdown, Jack Balkin — a professor of constitutional law at Yale — outlined strategies that the White House could use to evade the pesky borrowing ceiling imposed by a fickle Congress:

Doorbell

EVEN WALL STREET HATES THE DEBT DEAL
The Dow Jones Industrial Average hasplummeted by 760 points since the terms of the debt ceiling deal were announced Monday. If austerity was supposed to encourage economic growth, someone forgot to tell Wall Street.
On Thursday alone, the index droppedmore than 500 points, the worst one-day drop since the lowest lows of the meltdown.
Some budget-cutting enthusiastspromoted the "important economic advantages of linking the debt limit to spending reductions," and we’re seeing the immediate aftermath.

The Fed can't (and shouldn't) save the day
By Paul R. La Monica @CNNMoney
NEW YORK (CNNMoney) -- News flash for harried traders! The Federal Reserve may have two mandates. But placating Wall Street isn't one of them.
Yes, stocks are continuing their, to quote Tom Petty, free fall out into nothing. The Dow was down more than 400 points Thursday afternoon. And yes, the economy seems to be losing steam -- especially the job market.
Still, several experts said that the worst thing the Fed could do is overreact and launch a third round of bond buying.

An absolute bloodbath...
Stocks Nose-Dive Amid Global Fears
Weak Outlook, Government Debt Worries
Drive Dow's Biggest Point Drop Since '08
By TOM LAURICELLA - WSJ.com $$
Stocks spiraled downward Thursday as investors buckled under the strain of the global economic slowdown and the failure of policy makers to stabilize financial markets.
The selling began in Europe and continued in the U.S., where stocks plunged from the opening bell. The Dow Jones Industrial Average posted its worst point drop since the financial crisis in December 2008, falling 512.76 points, or 4.31%, to 11383.68. Oil and other commodities were also hammered. Even gold was a safe haven no more as prices fell. Asian markets slid on Friday morning, with Tokyo, Australia, South Korea and Hong Kong markets all falling more than 3% in early trading.

As Markets Plunge, Fear Rules Day
Clients Flood Financial Planners,
Asset Managers With Calls as Stocks Swoon;
'It's a Losing Battle'
By MARY PILON And JEANNETTE NEUMANN - WSJ.com
Clients called financial planners from the golf course. Sell orders piled up. Bargain hunters made bets that Thursday's 512.76-point drop by the Dow Jones Industrial Average was the end of the stock market's recent swoon.
The moves showed how much individual investors were whipsawed by the worst one-day point drop for the Dow since Dec. 1, 2008. While the Dow's decline of 4.3% was nowhere close to the worst days of the financial crisis, it felt bad enough.

August 4th 2011 CNBC Stock Market Closing Bell
(DOW drops 512 points) Part 1 of 3

August 4th 2011 CNBC Stock Market Closing Bell
(DOW drops 512 points) Part 1 of 3

August 4th 2011 CNBC Stock Market Closing Bell
(DOW drops 512 points) Part 1 of 3

Gold: J.P. Morgan 'Loves' It Big Time
By Dave Kansas - WSJ.com
As Old Yeller races higher, J.P. Morgan comes out today with a report banging the drum for the barbarous relic.
"We love gold," J.P. Morgan says. They add: "Many investors may look at the gold price chart with disappointment and assert it's too late for them to buy. We disagree."

US Yield Curve Flattening To Prompt Fed Easing and $1800 Gold
SK Options Trading
Gold prices made yet more all time highs in the last trading session, propelled by what we think was a short squeeze. Many traders were probably betting that gold prices would decline once the US debt ceiling was resolved; however this was not the case. In this article we will outline one longer term factor that we think will drive gold prices past $1800 in the next six months; the flattening of the US Yield curve. We believe the flattening of this curve is a symptom of economic weakness and coupled with rising unemployment will be the catalyst for the Fed to embark on another round of monetary easing which will send gold prices past $1800. In fact, $1800 is a conservative target.

'Gold Cartel’ Losing, Price to Top $3,000
By: Catherine Boyle - Staff Writer, CNBC.com
The price of gold could almost double as central banks' reserves are depleted, according to the chairman of a gold industry association.
"You could see $3,000 to 5,000 to clear the market as the central banks and bullion banks run out of gold to meet the growing demand," Bill Murphy, chairman of the Gold Anti-Trust Action Committee (GATA), which is hosting a conference in London this week, told CNBC Thursday.
"Six years ago when gold was at $436 we predicted that this would happen."

Gold is the True Reserve Currency
By: Michael Pento - MarketOracle.co.uk
The reliance upon the U.S. dollar as the world's reserve currency and "safe haven" asset has created a perverse, but deeply entrenched, mindset among global investors. In fact, many believe the major financial players have no alternatives to owning U.S. debt and dollars. They argue that the market for U.S. dollars and Treasuries is the only financial pool large enough to handle the massive liquidity that sloshes around the globe on a daily basis. This idea makes a mass exodus from U.S. debt holdings seem impossible. This provides a nice explanation why the U.S. Treasury bonds can rally even while the government openly flirts with default and ratings agencies issue downgrades. But just because an illogical event occurs habitually does not mean it is logical or tenable.

Gold Rises to Record on Haven Demand
Amid Equity Slump, Currency Turmoil
By Pham-Duy Nguyen - Bloomberg.com
Gold futures rose to a record $1,684.70 an ounce as turmoil in financial markets boosted demand for the precious metal as an investment haven.
The MSCI World (MXWO) Index of equities has dropped 12 percent from this year's May peak. The yen tumbled the most since 2008 versus the dollar as Japan intervened to drive down its currency. The euro fell against the greenback as the European Central Bank offered banks additional cash amid the debt crisis. Treasury two-year note yields approached a record low.
"The geopolitical backdrop is inherently bullish for gold," Matthew Zeman, a strategist at Kingsview Financial in Chicago, said in a telephone interview. "As risk appetite wanes, people have been piling into gold and Treasuries. Yields are so low that the only alternative is gold."

It's Baaaaaack: Interactive Brokers Just Hiked Silver Margins
Submitted by Tyler Durden - ZeroHedge.com
Aug 03, 2011 10:43 EDT
NOTIFICATION - Margin Increase on Silver Derivatives
In light of recent unprecedented volatility in silver markets, the exchanges that offer trading in silver derivative contracts are increasing the margin requirements on these products. In an effort to adequately address the inherent risk resulting from this volatility, IB is increasing margin requirements on silver derivative contracts to a level exceeding that which the exchanges are implementing.
Please monitor and manage your risk accordingly.

Financial markets: State of emergency
In 2007 the world financial system suffered a near death experience. You could have been forgiven for thinking that it was happening all over again
Editorial - Guardian.co.uk
The conventional wisdom is that August is a sleepy month for markets, with politicians, policymakers and investors all at the beach rather than at their desks. The conventional wisdom is wrong. The credit crunch really kicked off on 9 August 2007, when the French bank BNP Paribas suspended three of its investment funds that had been dabbling in US sub-prime mortgages. Within a week, the Bank of England's Mervyn King was getting warnings that Northern Rock was in grave danger if the squeeze in money markets dragged on (not that it had any effect on Threadneedle Street's policies). Over the course of that month, the interest rate that banks charged each other for loans – the London inter-bank offered rate (Libor) – surged. Investors and commentators began talking about a credit crunch. Traders and fund managers who were catching some sun found themselves glued to their BlackBerrys and on the phone to their offices. These were the first steps that led to the collapse of Northern Rock in September, and ultimately to a near-death experience for the world financial system. And yesterday you could have been forgiven for thinking that it was happening all over again.

Stocks Tumble as Two-Year Treasury Yield Drops to Low
By Stephen Kirkland and Rita Nazareth - Bloomberg.com
A tumble in stocks dragged the Standard & Poor’s 500 Index and the global benchmark gauge down 10 percent from this year’s highs and two-year Treasury yields declined to a record low amid concern that the economy is weakening. The yen pared losses after sliding the most since 2008 against the dollar after Japan sold its currency.
The S&P 500 fell 2.3 percent to 1,231.56 at 11:10 a.m. in New York and sank as low as 1,227, marking a 10 percent drop from its April 29 peak. The MSCI All-Country World Index sank 2.9 percent. Two-year note yields fell to as low as 0.28 percent. The yen depreciated as much as about 4 percent against the dollar, the biggest decline since a 6.1 percent drop on Oct. 28, 2008, before trading 2.5 percent lower. The euro lost 1.2 percent to $1.4153. Oil retreated 2.2 percent to $89.88 a barrel, sending the S&P GSCI index of 24 commodities down 1.9 percent. Gold futures rose to a record $1,684.90 an ounce.

Debt crisis: Global markets plunge as eurozone contagion speads
Eurozone countries are failing to stop the "contagion" of the debt crisis, the President of the European Commission warned yesterday.
By James Hall, and Richard Blackden - Telegraph.co.uk
José Manuel Barroso’s warning came as stock markets plunged around the world amid growing fears of another global recession.
Mr Barroso called for an emergency strengthening of Europe’s bail-out mechanism. He said he had “deep concerns” about the faltering Spanish and Italian economies.
The stark message was delivered as the FTSE 100 suffered a 3.43pc fall, its biggest since the height of the banking crisis in March 2009.

The ECB throws Italy and Spain to the wolves
The European Central Bank has abandoned Italy and Spain to their tortured fate.
By Ambrose Evans-Pritchard - Telegraph.co.uk
Its refusal to act in the face of an existential threat to monetary union has set off violent tremors across the global financial system, raising the risk that the crisis will spiral out of control.
Bank shares crashed in Madrid and Milan, with Intesa Sanpaolo down 10pc and Italy's MIB index reduced to its knees with a one-day fall of 5.2pc. Share trading was suspended at a string of bourses across Europe.
Yields on 10-day US debt fell to zero in a replay of panic flight to safety seen during the onset of the Lehman-AIG crisis three years ago.

European Central Bank paralysis sparks global crash
As central banks around the world scramble for measures to fight a fast slowing global economy, the single currency's sovereign debt woes have again moved perilously back to centre stage, causing stock markets to plummet and investors to run for the hills. -- By Jeremy Warner - Telegraph.co.uk
Torn between the conflicting interests of its 17 constituent members, the European Central Bank is struggling to find meaningful responses. Far from managing to calm matters today, it succeeded only in further inflaming them.
Investors had been primed to expect intervention by the ECB in sovereign bond markets so as to prevent Italy and Spain going the same way as Greece, Ireland and Portugal, and that indeed is what Jean-Claude Trichet, the ECB president, appeared to sanction at his monthly press conference today.

The Dollar is the World's Currency,
but the Federal Reserve is America’s Central Bank!
By: Aftab Singh - MarketOracle.co.uk
The dollar reserve standard connects corners of the world in ways which seem to be unperceived by the authorities at the Fed. Currently, the growing disconnect articulated by the quote above seems to be invoking the dollar’s fall from grace.
Now, I know what you're thinking; 'Gosh, not another senseless article about how the dollar is losing its reserve currency status!'. I get your frustration, and I encourage you to read on in the knowledge that I'm aware of it! What follows will be something a little different to the usual simplistic; 'emerging market politicians have spoken against the dollar, therefore the dollar is losing its reserve currency status' or 'emerging market central banks have bought gold therefore the dollar is losing its reserve currency status'. Although these kinds of statements do contain some truth, I would contend that they miss the point. Articles and essays based solely on these kinds of observations are ultimately crude extrapolations of the past and/or appeals to the supposed 'authority' of political musings! (Since when have politicians told the truth!?)

China Wastes No Time in U.S. Credit Rating Downgrade
BY KERRI SHANNON, Associate Editor, Money Morning
While Standard & Poor's mulls over a U.S. credit rating downgrade, China's Dagong Global Credit Rating Co. wasted no time cutting its U.S. debt outlook, signaling Asia's lack of faith in the declining U.S. dollar.
Dagong yesterday (Wednesday) cut its U.S. credit rating to A from A+ with a "negative" outlook. The agency said the U.S. debt deal failed to correct the country's budget issues, and the $2.4 trillion debt-ceiling increase will further erode the country's ability to reduce debt in coming years.
Two U.S. credit rating agencies, Moody's Investors Service (NYSE: MCO) and Fitch Ratings Inc., affirmed the country's top-tier AAA credit rating Tuesday - although both did issue a "negative" outlook, meaning the country could face a downgrade in a year or two.

Kucinich Says Obama Got the Deal He Wanted
Truthdig.com
Is the president a bad negotiator, or did he get the deal he wanted all along, as Rep. Dennis Kucinich suggests? Also on this week's Truthdig Radio in collaboration with KPFK: the phony Social Security scare, teaching Shakespeare in Iraq and more.
With health care, extending the Bush tax cuts and, now, the debt ceiling debate, President Obama has developed a reputation for giving away the store — but maybe that's been his intention all along. On Wednesday’s Truthdig Radio (airs Wednesdays at 2 PM on 90.7 KPFK Los Angeles), Kucinich said "I don’t think the president of the United States ever accepted a deal he didn't want."

Obama, Bernanke out of ammo to boost jobs, growth
By Alister Bull and Jonathan Spicer
(Reuters) - The United States has a jobs problem and there's not a lot President Barack Obama or Federal Reserve Chairman Ben Bernanke can do about it.
In the face of rising risks of a recession that could imperil his re-election chances next year, Democrat Obama wants Congress to extend a payroll tax cut and emergency unemployment benefits that are due to expire in December.
But the Republican-controlled House of Representatives is emboldened by budget concessions it made Obama swallow to lift the country's debt limit this week and he has little political leverage to win significant fresh spending to aid growth.

Time for QE3, and Then Some
By Clive Crook - TheAtlantic.com
The global beating shares just took had many causes, no doubt. Still disgusted by the US debt-ceiling fiasco, I am apt to give that masterclass in malice and incompetence more of the blame than it really deserves: the talk in markets today was more about signs of stalling growth in the US and mounting anxieties over Europe than about US fiscal impotence. Still, it can't help to know at such a time that the US government is clueless and paralysed--or that any US fiscal policies one might recommend (extended payroll-tax relief and unemployment benefits) would have to be taken up by the US Congress. Once it gets back from vacation.

Stocks Bear, FED about to Make the Mistake of the Decade?
By: Toby Connor - MarketOracle.co.uk
Just as I expected, when the market failed to rally on the debt ceiling resolution, panic set in. As I have been telling people the stock market is not dropping because politicians are debating whether or not to spend more money. They have a long record of raising the debt ceiling whenever it threatened to interfere with their spending spree. So the resolution to the debt ceiling was never in question. We knew from day one that Washington would add another trillion or so to the deficit without any real attempt to cut spending. The market has been in trouble since May because it is starting to price in the next recession.

The Debt Deal Con: Is It Fooling Anyone?
by Brandon Smith - Alt-market.com
Alternative economic analysis brings with it a certain number of advantages and insights, but also many uncomfortable burdens. Honest financial research is a discipline. It requires us to not only understand the fundamentals, but to question the fundamentals. It requires us to look beyond what we would LIKE to see in the economy, and accept the reality of what is actually there. With this methodology comes the difficulty of knowing the dangers ahead while the mainstream stumbles about well behind the curve. It means constantly having to qualify one’s conclusions, no matter how factual, because the skeptics and opposition base their views on an entirely different set of rules; farcical rules that no longer (or never did) apply to the true state of our country’s fiscal health.
After a while, you begin to expect that a majority of the public will buy into any number of government or Federal Reserve con games and swindles as the process of full spectrum collapse rolls onward. However, this expectation is not always accurate…

The Debt Ceiling Deal From Hell
TheEconomicCollapseBlog.com
Is the debt ceiling deal supposed to be some sort of a cruel joke? Is this what the American people have been waiting months and months for? The "debt ceiling deal from hell" is a complete and total fraud. Barack Obama will not need to worry about the debt ceiling again until after the 2012 election, and no "real" spending cuts will happen until after the 2012 election. The way the political game in Washington D.C. is played today, if you don't get something right now, you probably will never end up getting it. The Republicans have traded a massive debt ceiling increase right now for the possibility of very skimpy budget cuts in the future. Meanwhile, this deal establishes a new "Super Congress" that threatens to fundamentally alter our political system (and not in a good way). The funny thing is that everyone is running around proclaiming that the Tea Party won this battle. That is a complete and total lie.

Don't Look Now but the National Debt Could be $23 Trillion by 2021
BY MARTIN HUTCHINSON, Contributing Editor, Money Morning
There was a lot of back-patting in Washington this week after U.S. President Barack Obama signed a debt-ceiling deal that he and members of Congress claim will reduce the national debt.
But here's the truth: This deal does nothing to reduce America's debt burden. In fact, the $14 trillion we owe now could every easily exceed $23 trillion by 2021.
That's a 62% increase.
It only takes a little bit of number crunching to see what I mean.
The deal brokered by Congress cuts spending by just $917 billion over a 10-year period, with a special congressional committee assigned to find another $1.5 trillion in deficit savings by late November.

'SuperCongress' Committee Unconstitutional: Ron Paul
By: Margo D. Beller - Special to CNBC.com
The "superCongress" committee of 12 that will decide on budget cuts by Thanksgiving as part of the debt ceiling agreement is unconstitutional, Rep. Ron Paul told CNBC Thursday.
"I don’t think there’s any doubt about it," said the Texas Republican, who is running for president.
"I would challenge it in the courts," he added. "I would say it is not a constitutional function. There’s no authority to have a 'superCongress' who takes over what the House [of Representatives] is supposed to do" in handling the nation's purse strings.

Geithner's Future as Treasury Secretary Not Certain
Pressured by White House,
Treasury Secretary Is Expected to Stay at Post
By: Jackie Calmes - NYTimes via CNBC.com
Timothy F. Geithner, the Treasury secretary and dean of President Obama’s economic team, is expected to stay through the president’s term after intense White House pressure, according to officials familiar with the discussions.
But Mr. Geithner has not yet notified the White House of his intentions, and family considerations could still win out, advisers say.

Jon Corzine's Treasury Secretary Appeal
By: John Carney - Senior Editor, CNBC.com
Jon Corzine stands much more of a chance of being tapped to be the next Treasury Secretary than many in Washington, D.C., or on Wall Street think.
Speculation that Corzine is under consideration for the top job at Treasury took off again this week when it was discovered the investment bank he runs, MF Global, had included a provision in a bond prospectus that would pay bondholders more interest if Corzine left to take a job in the administration.
The so-called "key man provision" promises that MF Global would pay an additional 1 percent in interest if Corzine left to join the administration before July 1, 2013. MF Global says the provision was included at the request of underwriters, which may indicate that bond buyers at least believe they have reason to fear Corzine could leave the company.

Bank Of New York Mellon To Pay Negative Interest Rat
for Very Large Cash Deposits
JESSE'S CAFÉ AMÉRICAIN
The Bank of New York Mellon will begin paying negative interest rates on very large cash savings deposits, over $50 million, this week.
We wonder why the Fed does not similarly reduce the interest they pay on bank reserve deposits with them to zero from the current .25 percent?
It should be noted that Bank of New York Mellon has a current dividend yield of 2.06%. Are those dividends taxable? Will depositors be able to claim a lost on the negative interest they pay to BNY Mellon?

Bank of N.Y. said charging for big cash positions
By Liz Rappaport
In the latest sign of the fears roiling global markets, the Bank of New York BK -2.56% is preparing to charge some large depositors to hold their cash.
The biggest U.S. custodial bank said this week in a note to clients that it will begin slapping a fee next week on customers who have vastly increased their deposit balances over the past month.
The bank cited the massive dollar deposits it has received over recent weeks, as investors and corporations retreat from financial markets amid Europe's debt crisis and the recent debate over U.S. government borrowing.

Bank of N.Y. said charging for big cash positions
By Liz Rappaport
In the latest sign of the fears roiling global markets, the Bank of New York BK -2.56% is preparing to charge some large depositors to hold their cash.
The biggest U.S. custodial bank said this week in a note to clients that it will begin slapping a fee next week on customers who have vastly increased their deposit balances over the past month.
The bank cited the massive dollar deposits it has received over recent weeks, as investors and corporations retreat from financial markets amid Europe's debt crisis and the recent debate over U.S. government borrowing.

Bank of New York Puts Charge on Cash Deposits
By: CNBC.com with Reuters
The Bank of New York Mellon, citing an overwhelming influx of cash deposits from large clients in reaction to world economic events, said Thursday it will begin passing along some insurance fees on selected accounts that exceed a depositor's prior monthly average.
Banks typically welcome deposits as cheap funding that they redeploy into loans and investments, but BNY said the recent flood of cash is affecting its capital ratio and insurance fees.
"The transient nature of these new deposits prevents us from investing our balance sheet to cover the costs incurred from sudden and significant increases in U.S. Dollar Deposits with BNY Mellon," the bank said in a letter sent this week to clients.

Whether It Is The Terror Crisis Or The Debt Crisis,
The Solution Is Always A Super Dictatorship
By Saman Mohammadi - The Excavator blog

"I have no intention for the next weeks and months to be talking about this committee." - House Minority Leader Nancy Pelosi when asked by reporters at a press conference about the new Super Congress. (Source: Gregory Korte, USA Today, August 3, 2011).

"You never want a serious crisis to go to waste. . . Things that we had postponed for too long, that were long-term, are now immediate and must be dealt with. This crisis provides the opportunity for us to do things that you could not do before." - Chicago Mayor/Former White House Chief of Staff Rahm Emanuel. (Source: Gerald F. Seib, The Wall Street Journal, November 21, 2008).

"We all live in a house on fire, no fire department to call; no way out, just the upstairs window to look out of while the fire burns the house down with us trapped, locked in it."
- Tennessee Williams

Nothing makes sense in Washington if you assume that the leading political figures in both parties care about the interests, freedoms and security of the American people. The political, media, and financial elite are pursuing an anti-democratic, anti-Constitution, and anti-American agenda.

Debt-Ceiling Fallout: States to Take Another Hit
By Sheryl Nance-Nash and Laura Rowley - DailyFinance.com
The debt-ceiling drama may be over, but -- for state governments -- the ramifications are just beginning to reverberate.
The new law requires a 12-member, bipartisan "super committee" to recommend at least $1.5 trillion in spending cuts by late November. The law also caps discretionary spending, which includes funding for defense, transportation and basic research.
The budget cuts will deal another blow to state economies still struggling to recover to pre-recession levels. Many have relied on federal stimulus money to close budget gaps during the last few years.

Consumer Confidence in U.S. Declines
By Jillian Berman - Bloomberg.com
Consumer confidence in the U.S. dropped last week to the lowest level in more than two months, paced by growing dissatisfaction among women and high earners.
The Bloomberg Consumer Comfort Index was minus 47.6 in the period to July 31, the lowest since May, compared with minus 46.8 the prior week. Confidence among women fell to the lowest level since October 2009, while Americans making more than $100,000 a year were the most pessimistic since November 2009.

The Nine States Slashing Unemployment Benefits
247WallSt.com
Around 14 million people in the U.S. are jobless today. Yet, several states — even some that are experiencing economic recoveries — have begun to cut jobless benefits, according to recent data obtained by 24/7 Wall St. This is another example that the unemployment problem has become more insidious. Federal and state governments use two milestones — 26 weeks and 99 weeks — to determine unemployment insurance payments and when they are terminated. The number of people out of work for each of these time periods, or longer, grows.

Unemployment Rose in Nearly All US Cities
By: AP - CNBC.com
Unemployment rose in more than 90 percent of U.S. cities in June, mirroring a national slowdown in hiring.
The Labor Department says the unemployment rate rose in 345 large metro areas. It dropped in 20 cities and was unchanged in seven.
That's worse than May, when the rate rose in only 210 cities and a sharp reversal from April, when unemployment actually fell in nearly all metro areas.

Employment Situation Preview: Another Weak Report
by CalculatedRisk
Tomorrow the BLS will release the July Employment Situation Summary at 8:30 AM ET. Bloomberg is showing the consensus is for an increase of 75,000 payroll jobs in July, and for the unemployment rate to hold steady at 9.2%.
I've seen estimates all over the place, including hearing a few whispers of a negative headline number. This isn't surprising since the economic data for July was weak - especially over the last couple of weeks as companies and individuals prepared for a possible U.S. government default.

Big Pharma and Obamacare
By Lucia Rafanelli - The american Spectator.org
When it comes to lobbying power, Big Oil has nothing on the drug industry.
In fact, as Tim Carney writes in The Washington Examiner, since the start of Obama's presidency, "the drug industry's $635 million lobbying tab exceeds that of Wall Street and the oil and gas industry, combined." Carney also reports that Big Pharma spent more than any other industry on lobbying in the period from 1998-2011, with expenditures totaling $2.2 billion.
Not only that, but in every year from 1999-2011, the health/pharmaceuticals sector was the top lobbying sector in the US, according to the Center for Responsive Politics.
So maybe we shouldn't have been too surprised when the Obama administration announced that all health insurance providers would soon be required to provide first dollar coverage for birth control (including so-called "abortion pills") under the guise of "preventive care." After all, this is essentially a huge subsidy for birth control manufacturers: As of August 2012, all insurance plans must cover their products and virtually all citizens must buy those insurance plans.

U.S. Mortgage Rates Fall to 8-Month Low
By Ashwin Seshagiri - Bloomberg.com
U.S. mortgage rates for 30-year loans plunged to the lowest level in more than eight months as the nation’s economic recovery showed signs of faltering.
The average rate for a 30-year fixed loan dropped to 4.39 percent in the week ended today from 4.55 percent, according to Freddie Mac. The average 15-year fixed-loan rate decreased to a record 3.54 percent from 3.66 percent, the McLean, Virginia- based mortgage-finance company said in a statement.

Deal to get FAA flying again
Business First - by Kent Hoover , Washington Bureau Chief
Congressional leaders have reached a deal on Federal Aviation Administration funding that will enable 4,000 FAA employees and 70,000 airport construction workers to return to work.
Senate Majority Leader Harry Reid, D-Nevada, issued a statement Thursday afternoon announcing that an agreement has been reached with Republicans to resolve the dispute over FAA funding. Labor issues have kept the House and Senate from agreeing on a long-term FAA reauthorization bill, and a short-term funding bill passed by the House was unacceptable to the Senate because it cut subsidies for some rural airports. As a result, FAA funding expired July 23, and the agency laid off nonessential personnel and issued stop-work orders on airport construction projects around the country.

Senator Wyden Demands To Know How Many Americans Are Under Surveillance Under The Patriot

War, Debt and the President
By Amy Goodman
President Barack Obama touted his debt ceiling deal Tuesday, saying, "We can’t balance the budget on the backs of the very people who have borne the biggest brunt of this recession." Yet that is what he and his coterie of Wall Street advisers have done.
In the affairs of nations, Alexander Hamilton wrote in January 1790, "loans in times of public danger, especially from foreign war, are found an indispensable resource." It was his first report as secretary of the treasury to the new Congress of the United States. The country had borrowed to fight the Revolutionary War, and Hamilton proposed a system of public debt to pay those loans.

A Secret War in 120 Countries
The Pentagon's New Power Elite
By NICK TURSE - CounterPunch.com
Somewhere on this planet an American commando is carrying out a mission. Now, say that 70 times and you're done... for the day. Without the knowledge of the American public, a secret force within the U.S. military is undertaking operations in a majority of the world's countries. This new Pentagon power elite is waging a global war whose size and scope has never been revealed, until now.
After a U.S. Navy SEAL put a bullet in Osama bin Laden's chest and another in his head, one of the most secretive black-ops units in the American military suddenly found its mission in the public spotlight. It was atypical. While it's well known that U.S. Special Operations forces are deployed in the war zones of Afghanistan and Iraq, and it's increasingly apparent that such units operate in murkier conflict zones like Yemen and Somalia, the full extent of their worldwide war has remained deeply in the shadows.

Heat spell extends another day in southern U.S.
By Ed Payne, CNN
(CNN) -- A spell of suffocating heat continued to grip much of the South Thursday, as records for the most consecutive days off 100-degree heat in parts of Texas appeared vulnerable.
In all, the National Weather Service issued heat advisories for parts of 15 states stretching from a sliver of Southern California to North Carolina.
If forecasts hold Thursday, Dallas will have its 34th straight day of temperatures above 100 degrees. That city has been getting a lot of attention for its hellish heat, but some smaller Texas cities have had it worse. Thursday is expected to be Waco's 35th straight day topping 100 degrees, and Tyler's 38th straight day. The records for both Dallas and Waco is 42 straight days, set in 1980.

West's mid-life crisis points to power shift east
By Kristina Cooke and Emily Kaiser
(Reuters) - The world's industrialized nations, burdened with aging populations and deeply in debt, face years of slow economic growth that could speed the shift of economic clout to the East.
The United States has no coherent plan to pay for supporting a retiree pool that is about to overflow with the so-called "babyboom" generation, and lawmakers missed an opportunity to address that during the debt debate that dragged the country to the edge of default this week.

Syrian Tanks Shell City of Hama
as UN Security Council Condemns Violence
By Massoud A. Derhally and Flavia Krause-Jackson - Bloomberg.com
Syrian tank crews pressed on with their siege of Hama, site of a 1982 massacre, in an escalating crackdown on dissent that drew United Nations Security Council condemnation for "the use of force against civilians."
Government forces have killed more than 180 people in the last four days, most of them in the west-central city where homes and mosques have been hit by tank fire, according to Ammar Qurabi of the National Organization for Human Rights and Mahmoud Merhi, head of the Arab Organization for Human Rights.

NWO, NAU, Agenda 21, health care agenda, vaccines, Mexico

Dr Deagle Show 110801 1/3 -- ALEXANDER BACKMAN

Dr Deagle Show 110801 1/3 -- ALEXANDER BACKMAN

Dr Deagle Show 110801 1/3 -- ALEXANDER BACKMAN

***** Excellent 3-part series below! *****

Timely and thorough documented series on the New World Order, from history and prophecy. copy URLs and share with friends:

http://www.youtube.com/watch?v=MdS1tMBNXhs
The Next 1000 Years or Sooner? #1 [part 1 of 6]HD

http://www.youtube.com/watch?v=40h7nzMrilk
The Next 1000 Years or Sooner? #1 [part 2 of 6]HD

http://www.youtube.com/watch?v=X5ie0daDsno
The Next 1000 Years or Sooner? #1 [part 3 of 6]HD

http://www.youtube.com/watch?v=FsDnpyUKaYE
The Next 1000 Years or Sooner? #1 [part 4 of 6]HD

http://www.youtube.com/watch?v=BvIE4iUvTHQ
The Next 1000 Years or Sooner? #1 [part 5 of 6]HD

http://www.youtube.com/watch?v=ZIz0fscRMOs
The Next 1000 Years or Sooner? #1 [part 6 of 6]HD

---------------

http://www.youtube.com/watch?v=lz-aP5i_DEI
The Next 1000 Years or Sooner? #2 [part 1 of 6]HD

http://www.youtube.com/watch?v=wDRBjHgPC5I
The Next 1000 Years or Sooner? #2 [part 2 of 6]HD

http://www.youtube.com/watch?v=aSWEPPdEg7Q
The Next 1000 Years or Sooner? #2 [part 3 of 6]HD

http://www.youtube.com/watch?v=1OiHAzAEqHE
The Next 1000 Years or Sooner? #2 [part 4 of 6]HD

http://www.youtube.com/watch?v=rqfLF5nocX8
The Next 1000 Years or Sooner? #2 [part 5 of 6]HD

http://www.youtube.com/watch?v=u3xYP9-4Lfw
The Next 1000 Years or Sooner? #2 [part 6 of 6]HD

---------------

http://www.youtube.com/watch?v=1QIOJDUEM8I
The Next 1000 Years or Sooner? #3 [part 1 of 5]HD

http://www.youtube.com/watch?v=gjjNLKuKgeg
The Next 1000 Years or Sooner? #3 [part 2 of 5]HD

http://www.youtube.com/watch?v=n5WvkyW8bcw
The Next 1000 Years or Sooner? #3 [part 3 of 5]HD

http://www.youtube.com/watch?v=F-_iI7Ygatc
The Next 1000 Years or Sooner? #3 [part 4 of 5]HD (duplicate)

http://www.youtube.com/watch?v=YZ_JTIEi808
The Next 1000 Years or Sooner? #3 [part 5 of 5]HD (duplicate)

DESCRIPTION of the above 17 video segments:
Megiddo: The March to Armageddon explores Bible prophecy concerning the last day empire prophesied in the Old and New Testaments. Built upon decades of investigation and strong Biblical teachings of leading researchers, this documentary unfolds:

• The way God uses prophecy to prove His existence
• False prophecy according to the Bible
• The specific nature of God's true prophecies in the books of Daniel and Revelation
• Elements of prophecy today that set our time apart from centuries past
• The importance of Israel as "God's Timepiece"
• The recorded history of the New World Order through:
• The conception of a satanic conspiracy in Bavaria, involving secret societies
• The hidden agenda of these societies to destroy the Gospel and overthrow all established authority
• The French Revolution, Jacobin Clubs & origin of "depopulation" programs
• Jacobin movement in America during the days of the founding fathers
• Thomas Jefferson and his contempt for the Gospel of Karl Marx, Satanism & the Russian Revolution
• The 130-year old plan for "Three World Wars" and the Battle of Armageddon
• The satanic conspiracy of nations, kings and rulers "against the Lord and against His Christ" according to Psalm 2:1-2, Revelation 17:14 and 19:19
• Quotes from powerful men of history who have spoken of the need for world government and a New World Order

- - - - - - - - - - - - - - - -
Archived Page Link
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Thursday 08.04.2011

update...

Today's market closing numbers:

DOW = 11,383 (down 512 points)
GOLD = 1,666 (as of NYSE closing bell)

1,666 x 7 = 11,662 (DOW closed 279 points below the 7:1 ratio)

Super Congress:
the final nail in the coffin of representative democracy
and freedom as we know it
By Madison Ruppert - SilverBearCafe.com
Cloaked in the fear surrounding the debt ceiling and a possible default is the most dangerous legislation that America has ever faced. If this passes, the Super Congress will make the PATRIOT Act look like a just and fair law. When six Republicans, six Democrats and the President have complete control over the legislature, we need to be concerned.
The most frightening aspect of this proposed "committee", inaccurate though the term may be, is the fact that lawmakers in Washington have already openly admitted the unprecedented power they will be afforded.
Referring to the Super Congress as a committee is a bit deceitful. Calling it a Supreme Council of Overlords would be a bit more accurate.

Opponents Of Debt Hike to be Barred From "Super Congress"
Fiscal conservatives like Rand Paul will be omitted to ensure unconstitutional body can fast track tax increases
By Paul Joseph Watson - Infowars.com
Senators who voted against the debt ceiling hike will be barred from being on the panel of the unconstitutional "Super Congress," as the Washington elite ensures all roadblocks to crippling tax increases and other planned assaults on the constitution are removed.
According to The Weekly Standard, Republican sources have confirmed that the likes of Rand Paul, Jim DeMint and other fiscal conservatives will be dismissed as choices for the new super committee partly as a punishment for their failure to back the debt hike and most importantly to prevent any obstacles to the committee passing tax hikes and entitlement cuts.

With Debt Deal Finished, Will Geithner Quit Soon?
With the disaster averted, it will be easier for the Treasury secretary to walk away, and many expect him to do just that
By Stacy Kaper - TheAtlantic.com
With the deal to raise the debt limit successfully reaching the finish line on Tuesday, speculation reemerged that Treasury Secretary Tim Geithner would soon announce his departure.
Treasury confirmed in June that Geithner was considering resigning once the debt issue was resolved, and he said in a Tuesday appearance on "Good Morning America" that "I haven't made that decision yet."
Although it is unclear when Geithner plans to leave, many financial industry representatives and analysts said his exit has been expected once the debt-limit fight was resolved. Such a vacancy of a core cabinet position would come at a trying time for the economy and the financial system but would also provide fresh opportunities for President Obama to reinvent his image on the economic front before the 2012 elections. Given the fragile fiscal and political dynamics, analysts said Obama would need to nominate a successor with seasoned experience who could inspire market confidence and easily attract enough Republican support to clear the Senate, where a number of Obama nominees have been blocked by the GOP.

Marc Faber: Fire 50% of the US Government including Obama

Why the US Debt Limit Agreement is Only a Temporary Solution
BY GAIL TVERBERG - FinancialSense.com
Most people assume that the mismatch between US federal government revenue and expenses will go away, with enough time. All that is needed is a little "patch" now, and some more time, in order for the mismatch to disappear.
I don’t think the mismatch can be made to go away, partly because the mismatch between government revenue and expense is far worse than most realize. Furthermore, high oil prices seem to lead to recession, making it more difficult to fix the gap between government revenue and expenses.

The Debt Crisis Is A Trojan Horse To Cause The Fall of America
By Saman Mohammadi - Infowars.com
"A sovereign nation can always find the money to pay debts owed in its own currency. The U.S. could, if it wished, pay its bills using debt-free U.S. Notes or Greenbacks, just as President Lincoln did to avoid a crippling debt during the Civil War. Alternatively, it could eliminate the deficit with Ron Paul’s plan, which amounts to the same thing." – Ellen Brown, "Forget Compromise: The Debt Ceiling Is Unconstitutional."
Behind all the flim-flammery of this manufactured "crisis," we are watching the creation of a new form of government — or rather, the further mutation of the new form of government that the United States has been crawling toward for a long time. We called it a “neo-feudal oligarchy backed by a militarist police state” here the other day. No doubt there are many other ways you could describe this murderous, ravenous, lopsided monstrosity of a system. But the one thing you cannot call it is a "republic." – Chris Floyd, "If the Republic Had Not Died A Long Time Ago, This Would Indeed Be the Death of the Republic (Reprise)."

Rep. Paul introduces bill
to cancel $1.6T in debt held by Federal Reserve
By Pete Kasperowicz - TheHill.com
Rep. Ron Paul on Monday introduced legislation that would lower the federal government's debt by canceling the roughly $1.6 trillion in debt held by the Federal Reserve.
Paul has argued for the last few weeks that the idea represents a quick way to make the growing fiscal crisis more manageable. Under his bill, H.R. 2768, the $1.6 trillion that the Treasury owes to the Federal Reserve would disappear.
The Federal Reserve began buying Treasury bonds in earnest late last year as part of its effort to keep long-term interest rates down. But Paul has argued that Fed purchases of Treasury debt represent a debt that the government owes to itself, and one that also leads to an unwanted and inflationary increase in the money supply.

Ron Paul Speech at Davenport, Iowa - August 2, 2011

The Longer End of the US Treasury Curve Looks Over Extended
JESSE'S CAFÉ AMÉRICAIN
The longer end of the US Treasury curve (20+) looked quite overextended, at least in the short term, in the first hour's trade this morning. How could I resist for at least a day or so trade?
I still do not like the equity market yet, and would view this as a technical support area, until it proves itself otherwise. And that is probably going to have to wait for the US Non Farm Payrolls.
I am not saying Treasuries are a long term short just yet. I would have to see some real appearance of inflation and higher rates before that would be the case, and so far nothing. There is also sound economic theory that allows for lower interest rates here, and for what could be a protracted period of time.

Higher Taxes And Epic Tax Fight Are On The Horizon
By Janet Novack - Forbes.com
It seems obvious that the legislation President Obama has just signed raising the national debt ceiling in return for $2.4 trillion in deficit cuts won’t lead to tax hikes or the sort of loophole- closing, revenue raising tax reform that the President, his bipartisan deficit closing commission and the Senate’s bipartisan Gang of Six have all called for.
That’s not because the terms of the new law prohibit a newly created Congressional committee from including tax hikes or tax reform in the $1.5 trillion in savings it must come up with by Nov. 23rd. (If the six Republicans and six Democrats on the committee can't agree on savings or the House or Senate rejects the deal, then big automatic cuts in defense and domestic programs, including Medicare, kick in.)

The West's horrible fiscal choice
The US, Britain, and Europe are together embarking on a sudden and severe tightening of fiscal policy, in unison, before economic recovery has reached safe take-off speed. The experiment was last tried in the 1930s.
By Ambrose Evans-Pritchard - Telegraph.co.uk
The theoretical model behind the austerity push – known as an "expansionary fiscal contraction" – is based on the work of German theorists, and more recently on studies by Harvard professor Alberto Alesina and a group of brave scholars willing to defy the canonical doctrine of post-war Keynesian economics.
The Alesina view has been embraced by the European Central Bank and the budget cutters of the Eurogroup, but has enraged America's professoriat and set off a heated argument across the world.

Relax: it’s not all under control
By Roderick Parkes - EUObserver.com
The Danes are jumpy about immigration from North Africa. The Germans and Austrians worry about Polish plumbers. The French are dead set against Romania joining the EU's Schengen Area. The headlines may be exaggerated, but one thing is certain: the merest hint that immigration is not under rigid control makes Europeans nervous.
Recent developments in Denmark show why. Membership of the EU’s passport-free travel area means individual governments can't control migration in the same way as they used to, but there's a good reason – the Schengen Area is a cornerstone of the EU’s prosperity and political cohesion.

China Joins Russia in Blasting U.S. Borrowing
By Bloomberg News
China, the largest foreign investor in U.S. government securities, joined Russia in criticizing American policy makers for failing to ensure borrowing is reined in after a stopgap deal to raise the nation’s debt limit.
People's Bank of China Governor Zhou Xiaochuan said China's central bank will monitor U.S. efforts to tackle its debt, and state-run Xinhua News Agency blasted what it called the "madcap" brinksmanship of American lawmakers. Russian Prime Minister Vladimir Putin said two days ago that the U.S. is in a way "leeching on the world economy."

China loses trust in US economic stewardship
Stephen S. Roach - SilverBearCafe.com
New Haven: The Chinese have long admired America's economic dynamism. But they have lost confidence in America's government and its dysfunctional economic stewardship. That message came through loud and clear in my recent travels to Beijing, Shanghai, Chongqing, and Hong Kong.
Coming so shortly on the heels of the subprime crisis, the debate over the debt ceiling and the budget deficit is the last straw. Senior Chinese officials are appalled at how the United States allows politics to trump financial stability. One high-ranking policymaker noted in mid-July, "This is truly shocking... We understand politics, but your government's continued recklessness is astonishing."

Big banks fire thousands in Europe, but hiring in China
By VALENTINA POP
EUOBSERVER / BRUSSELS - Eight of Europe's biggest banks have announced tens of thousands of job cuts in Britain, France, Spain and Switzerland in a bid to reduce salary costs, but will keep expanding and hiring new staff in China.
Hong Kong & Shanghai Banking Corporation (HSBC), a British conglomerate which is Europe's biggest bank, on Tuesday (2 August) announced 30,000 job cuts worldwide by 2013 - about 10 percent of its staff. Most of these cuts will affect its EU and US branches, in a bid to save some €2 billion in salary costs.

Beware of Lurking EU Bank Runs
BY GORDON T LONG - FinancialSense.com
The figure below shows that when Irish government CDS yields first passed 3% in early 2009, foreign deposits fled the country. This happened again in late 2010. Now that Spanish CDS yields have broken the 3% threshold, there is reason to be concerned about the stability of Spanish bank deposits as well."
"In the midst of the financial crisis of 2008, governments helped to prevent bank runs by guaranteeing bank debts. Yet as sovereign solvency itself becomes anissue, such guarantees quickly lose their value. If Ireland provides a rule of thumb, bank runs can be expected once sovereign credit default swap yields pass 3%.

The Stealth Bank Run in Europe
By Joshua M Brown - TheReformedBroker.com
Today the markets should bounce on the tentative Moodys affirmation of our AAA rating, some decent earnings news/ sellside analyst chatter and a deeply oversold condition. The case for a "dead cat bounce" has been made perfectly by my man Zor so hit this post before the open:
We Are Crashing Tomorrow (ZorTrades)
Anyway, I'm getting all kinds of emails and phone calls with anecdotes about the stealth bank runs happening in Greece and Italy. People are pulling out cash from their accounts and putting it into safe deposit boxes, in vaults and even bringing it home.

Barroso: EU moving too slow on debt crisis
By ANDREW RETTMAN
EUOBSERVER / BRUSSELS - European Commission head Jose Manuel Barroso has urged EU countries to speed up ratification of the bloc's new-model bailout mechanism to reassure markets after jitters on Italy and Spain.
In a flash statement emailed to press on Wednesday (3 August), Barroso voiced "deep concern" about the increase to record highs in the cost of borrowing for the two countries in recent days.
"It is essential ... that we move forward rapidly with the implementation of all of that has been agreed by the heads of state and government and send an unambiguous signal of the euro area's resolve to address the sovereign debt crisis," he added. "Tensions in bond markets reflect a growing concern among investors about the systemic capacity of the euro area to respond to the evolving crisis."

Greece in panic as it faces change of Homeric proportions
Fear is driving a silent bank run in Greece – but some see the government's austerity plans as a chance to transform
By Aditya Chakrabortty - Guardian.co.uk
In one of the biggest banks in the centre of Athens a clerk is explaining how his savers have been thronging to pull out their cash.
Wary of giving his name, he glances around the marble-floored, wood-panelled foyer before pulling out a slim A4-sized folder. It is about the size of a small safety-deposit box – and those, ever since the financial crisis hit Greece 18 months ago, have become the most sought-after financial products in the country. Worried about whether the banks will stay in business, Greeks have been taking their life savings out of accounts and sticking them in metal slits in basement vaults.

Inflating Our Way to Prosperity
Could the U.S. fix its economic problems by devaluing the dollar?
By Daniel Indiviglio - TheAtlantic.com
The recent recession wasn't just a deeper version of other cyclical downturns. It was fundamentally different, which is why the stimulative measures taken by the government and Federal Reserve have done so little to improve the situation. This is the assertion of Harvard economist Ken Rogoff. Instead, he says that too much debt is the problem, which makes the solution easy: high inflation. Even though he says that inflation might have some negative consequences, the benefit of swifter economic recovery would be worth the associated costs. But would it really be so easy to inflate our way to prosperity?

The 2011 Gold Season is Just Around the Corner
BY FRANK HOLMES - FinancialSense.com
The ongoing debate in Washington prompted increased Fear Trade activity in gold this week. The issue over raising the federal borrowing limit caused the yellow metal to remain around its all-time high of $1,600 per ounce this week.
Gold has now increased for 124 months straight, says Deutsche Bank. The rally is in its 11th year, lasting nearly three times as long as other historical rallies going back to 1971. If the metal rose to $2,100 an ounce, it would represent the most powerful percentage increase in history, according to Deutsche Bank.

Central Banks buy GOLD...
Emerging world buys $10 bln in gold as West wobbles
By Amanda Cooper
LONDON, Aug 3 (Reuters) - Central banks of emerging market countries such as Korea and Thailand have added more than $10 billion of gold to their reserves this year in a sign of waning faith in the West's benchmark bonds and currencies like the dollar and the euro.
International Monetary Fund data for June on Wednesday showed Thailand bought gold for the second time this year, raising its reserves by nearly 19 tonnes to over 127 tonnes, while Russia bought another 5.85 tonnes, bringing its reserves to 836.7 tonnes, the world's eighth largest official stash of the metal.

Relative Performance of Gold and Silver
for the Past Three Months - Perceptions Shape the Trade
JESSE'S CAFÉ AMÉRICAIN
In response to the Asset Performance piece from earlier this week that showed Silver to be outperforming most other stores of wealth this year to date, despite the big correction off the parabolic high, someone asked me why "silver is underperforming gold recently."
So I looked at their relative performance AFTER the big spike higher and smackdown. By the way, I think that was utterly contrived to help the shorts get off the hook. I don't think it worked. They ran silver up, and then in conjunction with the CME margin increases smacked it down hard. This provides lots of opportunity for conventional wisdom to come in and shake up the bulls. A twenty percent decline is NOT necessarily a new bear market if it is a short term correction from a recent short term rally. A standard fibonacci retracement is on the order of 30 to 50 percent. But it sounds good.

Avoid Disaster, Get Out of U.S. Assets: Peter Schiff
By Matt Nesto - Yahoo Finance
If you own dollar-denominated assets, then you're a fool. It's really that simple in the black and white world of American fatalism that is the trademark thesis of Peter Schiff, the CEO of Euro Pacific Capital.
"Unfortunately, because we raised the debt ceiling, because we continue to spend money, the cost of government is going to be born by those foolish enough to hold U.S. currency," Schiff tells Breakout.
In fact, as much as the Wall Street pundits may attack him, Schiff's longstanding affection for gold and other non-U.S. assets has served him well. Accordingly, there's no strategic shift in sight from the man who's says economic Armageddon will come because the debt ceiling was raised, not because it (almost) wasn't.

Peter Schiff On Freedom Watch -
You Cannot Own The Dollar Or Dollar Denominated Debt!

Franc Plunges From Records
as Swiss Central Bank Unexpectedly Lowers Rate
By Klaus Wille - Bloomberg.com
The Swiss central bank unexpectedly cut interest rates and said it will increase the supply of francs to money markets to curb the "massively overvalued" currency. The franc dropped from a record.
The Swiss National Bank lowered its target for the three- month Libor to "as close to zero as possible" from 0.25 percent. The Zurich-based central bank said it will also expand banks' sight deposits, or cash which can be withdrawn on demand, to 80 billion Swiss francs ($104 billion) from 30 billion francs and repurchase outstanding SNB Bills, according to an e-mailed statement today.

Market Manipulation is Easy when Money is Free
Dr. Jeffery Lewis - SilverBearCafe.com
A concept investors had much time to ponder is the long run value of investment capital. To calculate seemingly abstract concepts, investors have very simple answers. The rule of 72 gives us a guideline for the doubling of money, and net present value calculators are now found on every computer with a spreadsheet program.
Calculating the rate at which money can earn a return is simple. Finding ways to generate that return is anything but. Further, in this period of record low interest rates, the methodology of money making has never been so twisted.
Recently, it was made public that Goldman Sachs had stockpiled literal tons of industrial-grade aluminum for the sheer purpose of speculation and investment management. In several warehouses dotting Detroit, investment bankers reap the rewards of a very effective market manipulation scheme.

Gerald Celente - Mike Broomhead - August 2nd 2011

Pimco, BlackRock Say U.S. Economy
Is Running at 'Stall Speed,' Fed May Act
By Wes Goodman - Bloomberg.com
Pacific Investment Management Co. and BlackRock Inc., which together oversee almost $5 trillion, say the U.S. economy is stalling.
Bill Gross, who runs the world’s biggest bond fund at Pimco, and Peter Fisher, head of fixed income at BlackRock, say the Federal Reserve is preparing measures to counter the slowdown.
"We’re not looking at a recession yet, but we're at a tipping point," Gross said yesterday in an interview on Bloomberg Television. "We're at what we call a stall speed in which corporate profits don’t grow, jobs aren't created," said Gross, who is based in Newport Beach, California.

Bill Gross says
"Fed Approaching Dead End Unsolvable Dilemma"
Feldstein sees 50% Chance of Recession
Three Cardinal Rules of Stimulus
By Mike Shedlock
Is the US economy at a tipping point or has it already tipped over? The best one can possibly say is the economy is at a stall rate.
"Economy Balanced on Edge"
Bloomberg reports Feldstein Sees 50% Chance of U.S. Sliding Back Into a Recession
Harvard University economics professor Martin Feldstein said the U.S. recovery that began two years ago has been losing steam and there are even odds the economy will slip into a recession.
"This economy is really balanced on the edge," Feldstein said in an interview on Bloomberg Television "Surveillance Midday” with Tom Keene. "I think there's now a 50 percent chance that we could slide into a new recession."

Oops, there goes commercial property...

California Hotel Foreclosures Jump 91%
as Lenders Seek to Sell Properties
By Nadja Brandt - Bloomberg.com
Hotel foreclosures in California jumped 91 percent in the second quarter as lenders repossessed properties to sell them amid a recovery in property prices, Atlas Hospitality Group said today.
The number of foreclosed hotels climbed to 191 in the three months ended June 30 from 100 a year earlier, according to the Irvine, California-based brokerage. Seizures also rose from the first quarter, when lenders took over 148 California hotels. The state’s biggest hotel foreclosure in the second quarter was the 331-room Hilton Sacramento Arden West, Atlas said.

FORCES FACING THE HOUSING MARKET
By Patrick Pulatie - ML-Explode.com
Day after day, week after week, and month after month, there are media reports concerning the status of housing in the US. Depending upon the source, housing values are increasing, or decreasing. Home sales are increasing, or decreasing. The Housing recovery has started, stalled, or in a state of further decline. Does anyone really know what is going on? Who can you trust?
At this time, no one knows with any certainty what is going to happen. The economy, governmental regulation, lending issues, foreclosure issues, borrower qualifications and other issues are all contributing to the uncertainty in the housing market. Until such time as these issues begin to be resolved, recovery cannot begin. But, taking the different data points that exist in the continuing reports, some general assumptions can be made.

Retirees suffer as home equity falls
Loss of home equity downsizes retirement for many
By Sandra Block, USA TODAY
Paul Trigili, an information technology professional in Las Vegas, is 65, has back problems and would like to retire at the end of the year. There's just one thing standing in his way: his house.
Trigili bought his home three years ago for $350,000. At the time, he thought it was a good deal, because the home originally was priced at $450,000. Today, it's valued at $184,000.
Trigili made a large down payment when he bought the home, so he doesn't owe more on his mortgage than the home is worth. But his plans to sell his home and use the proceeds for retirement income have been placed on indefinite hold.

Services firms expand at slowest pace in 17 months
By CHRISTOPHER S. RUGABER - AP - Forbes.com
WASHINGTON -- Service businesses such as restaurants, hotels and financial companies experienced their weakest growth in 17 months in July.
The report Wednesday from the Institute for Supply Management confirms other data that show the economy is struggling two years after the recession officially ended.
It also put Wall Street on course for its eighth straight day of declines. The Dow Jones industrial average dropped more than 73 points, and broader indexes also fell.

Services firms expand at slowest pace in 17 months
By CHRISTOPHER S. RUGABER - AP - Forbes.com
WASHINGTON -- Service businesses such as restaurants, hotels and financial companies experienced their weakest growth in 17 months in July.
The report Wednesday from the Institute for Supply Management confirms other data that show the economy is struggling two years after the recession officially ended.
It also put Wall Street on course for its eighth straight day of declines. The Dow Jones industrial average dropped more than 73 points, and broader indexes also fell.

U.S. Service Industry Grows Less Than Forecast
By Shobhana Chandra - Bloomberg.com
Service industries expanded in July at the slowest pace in 17 months as orders and employment cooled, indicating the biggest part of the U.S. economy had little spark to begin the second half of the year.
The Institute for Supply Management’s index of non- manufacturing businesses, which covers about 90 percent of the economy, dropped to 52.7 from 53.3 in June. Readings above 50 signal expansion, and the median projection in a Bloomberg News survey was for 53.5 in July. Companies hired fewer workers last month than in June, a report from ADP Employer Services showed.

Job growth slows and layoffs rise to 16-month high, reports say
By Tiffany Hsu - LATimes.com
Looking for work? Might want to try smaller businesses, which are doing the heavy lifting when it comes to job growth, according to a new report from payroll processor ADP.
Companies with fewer than 50 employees added 58,000 jobs nationwide last month, while businesses with 50 to 500 workers hired 47,000 people, according to the study. Only 9,000 new positions were at large firms with more than 500 staffers.
Small businesses have been amping up hiring for nearly two years, according to ADP.

Mass layoffs in Illinois top 1,100, July report shows
BY FRANCINE KNOWLES - SunTimes.com
More than 1,100 workers at 10 companies in Illinois will lose their jobs by the end of the year, their employers told the state last month.
A July report, released by the Illinois Department of Commerce and Economic Opportunity, found the biggest cuts —456— are taking place at Sun-Times Media. The parent company of the Chicago Sun-Times announced last month it will close its printing plant and that the Sun-Times and sister publications will be printed by the Chicago Tribune.

J.C. Penney lays off 442, offers early retirement
Dallas Business Journal - by Steven R. Thompson , Staff Writer
J.C. Penney Co. Inc. (NYSE: JCP) plans to lay off 442 employees at a facility in Manchester, Conn., according to the Connecticut Department of Labor.
The Plano-based company will close the dot-com unit of the warehouse on Sept. 30, the department said.
J.C. Penney could not be immediately reached for comment.

8 Reasons Young Americans Don't Fight Back
How the US Crushed Youth Resistance
The ruling elite has created social institutions that have subdued young Americans and broken their spirit of resistance.
AlterNet / By Bruce E. Levine
Traditionally, young people have energized democratic movements. So it is a major coup for the ruling elite to have created societal institutions that have subdued young Americans and broken their spirit of resistance to domination.
Young Americans—even more so than older Americans—appear to have acquiesced to the idea that the corporatocracy can completely screw them and that they are helpless to do anything about it. A 2010 Gallup poll asked Americans "Do you think the Social Security system will be able to pay you a benefit when you retire?" Among 18- to 34-years-olds, 76 percent of them said no. Yet despite their lack of confidence in the availability of Social Security for them, few have demanded it be shored up by more fairly payroll-taxing the wealthy; most appear resigned to having more money deducted from their paychecks for Social Security, even though they don’t believe it will be around to benefit them.

*****

Facebook will destroy your children's brains
Facebook users face a future of rolling around on the floor, dribbling incoherently as they demand approval from passers-by
By Martin Robbins - Guardian.co.uk
Social media sites like Facebook and Twitter have left a generation of young adults vulnerable to degeneration of the brain, we can exclusively reveal for about the fifth time. Symptoms include self-obsession, short attention spans and a childlike desire for constant feedback, according to a 'top scientist' with no record of published research on the issue.
Repeated exposure to the internet leaves people with an 'identity crisis', wanting attention in the manner of a toddler saying, 'Look at me, Mummy,' or a scientist touting their latest brain-fart in the national press.

The Economics of US Healthcare
Mises Daily: by Gilbert G. Berdine, M.D.
According to the US Department of Health and Human Services (HHS), national health expenditures were $2.5 trillion in 2009, or $8,086 per person. The usual critique of US healthcare discusses how the money is spent and argues that it could be better spent in other ways.
I will not discuss how the money is spent, because value is subjective. Instead, I will show that the United States cannot afford what it spends, and, as a result, the US healthcare system is a credit-induced bubble.

THE MEANING OF "ZOMBIE APOCALYPSE" - PART 1
By Dr. Stephen C. L'Hommedieu - NewsWithViews.com
Just when you thought the dark side of medical information couldn't get more science debased, the Center for Disease Control and Prevention (CDC) released a strange article on emergency preparedness that was straight out of "Tales from the Crypt." Fresh from the bubbling cauldrons of the CDC, "Preparedness 101: Zombie Apocalypse," [1] by Ali S. Kahn, MD, MPH, is a suspiciously elaborate concoction, mingling emergency readiness procedures with choice delicacies from zombie horror fiction. Featuring emergency "essentials" such as zombie history, etiology, diet (brains) and "diagnosis," along with horror film favorites and a zombie escape plan, "Zombie Apocalypse" is an amusing distraction of weirdness that belies its purpose.
Objectives Behind the Weirdness
If you had read the article's "A Brief History of Zombies," you may have thought the same as I did – What the…? A zombie apocalypse? After a quick rebound from the mild aftershock of disbelief, I continued reading with a sense of uneasiness. Clearly the method to the madness was to use this fear-based zombie horror scenario to capture the attention of a select target audience.

Made in China: Fake Stores
Imitators Offer Own Versions of IKEA,
Dairy Queen Down to the Tiniest Details
By LAURIE BURKITT And LORETTA CHAO - WSJ.com $$
[Google title, click URL, for free article pass]
BEIJING—In China's "fake world," consumers can shop for furniture at an imitation IKEA store, eat a six-inch sandwich at an outlet strikingly similar to Subway, and then grab dessert at "Dairy Fairy"— where they might knock back an Oreo-flavored "Ice Storm" whose, thick, creamy texture takes unabashed inspiration from the famous Dairy Queen "Blizzard."
Welcome to the modern era of copying in China, in which sophisticated proprietors of knockoff stores and chains are targeting increasingly sophisticated Chinese consumers with store experiences and customer service extremely similar to the real thing, down to the helpful store maps, coupons, shopping bags and employee uniforms.

Second moon may have collided with our moon, say scientists
A collision with a smaller moon may explain why the terrains on the far and near sides of the moon are so different
By Ian Sample, science correspondent - Guardian.co.uk
The remnants of a second moon that orbited around the Earth billions of years ago may be splattered across the far side of our moon, scientists claim.
The two moons are believed to have been created at the same time and followed a similar path to the moon we're familiar with today, but after tens of millions of years of peaceful co-existence, the two moons appear to have crunched together in a gentle collisio