Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.

Thursday 02.09.2012

Why Our Currency Will Fail
BY CHRIS MARTENSON PHD - FinancialSense.com
The idea that the very same economic forces that are currently plaguing Greece, et al., are somehow not relevant to the United States' circumstances does not hold water. As goes the rest of the world, so goes the US.
When we back up far enough, it is clear that money and debt are there to reflect and be in service to the production of real things by real people, not the other way around. With too much debt relative to production, it is the debt that will suffer. The same is true of money. Neither are magical substances; they are merely markers for real things. When they get out of balance with reality, they lose value, and sometimes even their entire meaning.

The High Cost of 0%
BY JIM WILLIE - FinancialSense.com
The interminable extension by the US Federal Reserve on the 0% rate into 2014 represents history in the making. It is the adoption of pure heresy in monetary policy, making it mainstream. Worse, it forces foreign central banks to adopt the same destructive policy in the Competing Currency War. Once upon a time, the highest priests from the central bank would admit in a guiding tone that accommodation on interest rates must be temporary. Nowadays it is engrained in the market mindset and permanent in monetary policy. The chronic 0% means the entire financial and monetary system is totally irreparably broken. The old pendulum where the tilt was toward bonds during recession, then toward stocks during recovery, that is all gone, shattered by the endless financial crisis. One must incorporate a new thinking, that the entire financial and monetary system is totally irreparably broken, then adapt in fierce defense. Larry Fink of Blackrock private equity firm made news today by suggesting that 0% bond yields offer no return on investment. How true! He did not offer any accurate reflection of reality that the financial structures are broken, nor that all attempts at remedy were flimsy and misdirected. He gave the ALL IN signal for buying stocks in 2012, thus putting on the risk trade. The immediate ancillary signal is to back up the truck and load up with GOLD also.

Trigger-happy central banks spark bond euphoria
Corporate bonds have enjoyed a spectacular rally over the last month as central banks flood the world with liquidity, and cash-rich companies bask in glory as gilt-edged assets.
By Ambrose Evans-Pritchard - Telegraph.co.uk
"The credit market's on fire," said Suki Mann at Societe Generale. "We have seen a massive grab for yield. The mood is so good that even if Greece were to default it would probably make no difference."
The average borrowing cost for high-grade US companies has dropped to 3.52pc, just shy of all-time lows. American firms took advantage of the hunt for safe yield to raise $70bn (£44bn) last week alone, led by McDonald's and IBM.
The recovery in Europe has been electric since the European Central Bank (ECB) opened the floodgates in December, lending banks €489bn (£410bn) at 1pc for three years, with more to come later this month.

Fed’s Williams: If Recovery Falters, QE3 Is on the Table
By Michael S. Derby, Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- If the economic recovery falters, the Federal Reserve should provide more stimulus through bond buying to get things back on track, a top central bank official said Wednesday.
"The policy actions the Fed takes from here will depend on how economic conditions develop, and they will change as economic circumstances change," Federal Reserve Bank of San Francisco President John Williams said.

Capturing the ECB
Joseph E. Stiglitz - Project-Syndicate.org
NEW YORK – Nothing illustrates better the political crosscurrents, special interests, and shortsighted economics now at play in Europe than the debate over the restructuring of Greece’s sovereign debt. Germany insists on a deep restructuring – at least a 50% “haircut” for bondholders – whereas the European Central Bank insists that any debt restructuring must be voluntary.
In the old days – think of the 1980’s Latin American debt crisis – one could get creditors, mostly large banks, in a small room, and hammer out a deal, aided by some cajoling, or even arm-twisting, by governments and regulators eager for things to go smoothly. But, with the advent of debt securitization, creditors have become far more numerous, and include hedge funds and other investors over whom regulators and governments have little sway.

Equity markets sing a different tune from IMF
Global investor sentiment is now not only split down the middle, but the split is getting deeper and wider. The optimists and pessimists are further apart than ever.
By Liam Halligan - Telegraph.co.uk
Those who insist "the worst is behind us" are clashing with those who fear we could face another big lurch.
I've noticed lately that such forecast polarisation is often apparent even within individuals. Seasoned financial professionals flit from bullish to bearish, from "risk on" to "risk off", sometimes within the same conversation. There is profound uncertainty, with recent share price rises seeming to compound the sense of confusion, rather than providing "relief".

Euro Declines as Greek Leaders
Fail to Agree on Pension Cuts for Bailout
By Masaki Kondo and Kristine Aquino - Bloomberg.com
The euro declined after Greek leaders failed to agree on pension cuts, threatening to derail negotiations with creditors to receive a rescue package.
The common currency weakened against 10 of its 16 major counterparts before euro-area finance ministers hold an emergency meeting in Brussels today. The pound held onto a decline from yesterday on prospects the Bank of England will expand its asset-purchase program at a meeting.

On again... Off again...
Greece agrees on bailout terms
Political leaders finally decide on a course that would avert a chaotic default for the debt-choked nation
By Helena Smith in Athens - Guardian.co.uk
After three days of high drama, political posturing and brinkmanship,Greece's coalition government reached a tentative agreement on the draconian terms required to unlock €130bn (£109bn) in aid for the crisis-hit country on Wednesday night, although the marathon negotiations were set to continue into the small hours.
One senior aide said that by the time the Greek finance minister, Evangelos Venizelos, boarded a plane at 7am to attend Thursday's eurogroup meeting in Brussels, he would have the "finalised text of the agreement in his hands".

Treasuries Rise as Greek Leaders Fail
to Agree on Economic Austerity Plan
By Wes Goodman - Bloomberg.com
Treasuries snapped a two-day decline after Greek leaders failed to agree on economic measures needed to earn a second aid package, driving investor appetite for the relative safety of U.S. debt.
Demand for a haven from Europe’s fiscal crisis sent U.S. Treasuriessurging in the past year, with debt due in 10 years or longer returning 30 percent. The gain is second only to Ireland among 144 government bond indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies, after accounting for currency changes. The Treasury Department is scheduled to auction $16 billion of 30-year bonds today.

Greek deal prospects rise, euro ministers to meet
By Lefteris Papadimas and John O'Donnell
(Reuters) - Prospects for a deal on a second international bailout for Greece brightened on Wednesday when euro zone finance ministers were summoned to talks in Brussels while Greek political leaders met to approve a tough new reform and austerity program.
Eurogroup chairman Jean-Claude Juncker invited ministers from the 17-nation single currency area to meet on Thursday evening and the International Monetary Fund said managing director Christine Lagarde would also attend.

China May Invest Tens of Billions
of Euros to Assist Europe, Academic Says
By Bloomberg News
China may "move shortly" to help Europe resolve its debt crisis by providing an investment of as much as 100 billion euros ($132 billion), said Yuan Gangming, an economist at the Chinese Academy of Social Sciences.
The money would probably go to the European Financial Stability Facility, the euro bailout fund, said Yuan, adding that the forecasts are his own and don’t necessarily represent government plans. Economists from the academy provide policy advice without direct involvement in decisions.

IMF Urges Beijing to Prepare Stimulus
[Google title for free article pass]
By SHEN HONG in Shanghai
and BOB DAVIS in Beijing - WSJ.com $$
China should be prepared to sharply stimulate its economy if Europe's growth falls more than anticipated, the International Monetary Fund said, adding to expectations that Beijing could turn to spending if conditions significantly worsen.
In its China economic outlook report released on Monday, the IMF urged China to run a deficit of 2% of GDP rather than looking to reduce the country's deficit as planned, given the uncertainty in the global economy.

Good reason to red-carpet Merkel
By Francesco Sisci - ATimes.com
BEIJING - If a political Europe is ever to be born, its conception will have been in Beijing last week, during the visit of German Chancellor Angela Merkel. Within a period of about nine months, the gestational period for humans, we shall know if this new polity will be really born or we shall witness a miscarriage or an abortion.
In the Chinese capital, Merkel, in fact, spoke as the head of a European government, not simply as the leader of one EU member state; and indeed China, long fond of the political European Union, treated her as such.

Greeks build fence to ward off asylum seekers
BY NIKOLAJ NIELSEN - EUObserver.com
BRUSSELS - Greece has started construction of a 12.6-km-long razor-wire-topped fence designed to keep out migrants, but described as "pointless" by the European Commission.
The fence, costing an estimated €5.5 million, is being built in the Evros region on the Greek-Turkish border where the vast majority of irregular migrants try to cross into the EU. It is to be completed in September.
The European Commission on Tuesday (7 February) said the fence is a national issue. But it also poured scorn on the project. "Fences and walls are short-term solutions to measures that do not solve the problem. The EU is not and will not co-finance this fence ... It is pointless," a spokesman for home affairs commissioner Cecilia Malmstrom told press in Brussels.

Iran, Greece Fears Yield to Central Bankers, Stock Gains
By John Detrixhe and Flavia Krause-Jackson - Bloomberg.com
Iran’s nuclear ambitions, Syria’s bloody crackdown and Greece’s potential default are leaving markets unfazed as central bankers take unprecedented steps to prevent the global economy from crumbling.
The VIX, a measure of equity volatility known as the "fear index," fell to 17.1 on Feb. 3, the lowest level since July, according to the Chicago Board Options Exchange. The Bank of America Merrill Lynch MOVE index, which measures swings in bond prices, closed at 72.3 on Feb. 6, about the least since July 2007. JPMorgan Chase & Co's index of implied volatility on currencies dropped to 10.1 today, its lowest since March.

Francois Hollande will spark next euro crisis
Small-town mayor out of his depth as French leader
By Matthew Lynn - MarketWatch.com
LONDON (MarketWatch) — Tulle sounds like a pleasant enough little place. A pretty market town in central France, it is in the heart of some fine farming country, and has a fine old cathedral. Still — and meaning no disrespect to its 15,000 people — a few years in charge of its parking permits and refuse collection hardly seems like the best qualification for dealing with potentially the greatest economic crisis that Europe has faced since the end of World War II.

Italy's premier pushes back on debt...
Mario Monti, Italy’s prime minister,
aims to set a new growth agenda for Europe
By Howard Schneider - WashingtonPost.com
Italian Prime Minister Mario Monti has slashed pensions, begun a broad economic restructuring and agreed to a European treaty that tightens fiscal controls — all in the name of proving his country is serious about controlling debt.
As he arrives for his first official visit with President Obama on Thursday, he’s begun pushing back.
With Europe at risk of a new recession, Monti is pressing what he sees as the next battle in the region’s financial crisis: finding ways to renew growth at a time when countries remain overburdened by debt and major powers such as Germany are intent on enforcing fiscal discipline.

Bernanke Economy Proves Critics Clueless on Fed
By Caroline Salas Gage - Bloomberg.com
The numbers are proving Federal Reserve Chairman Ben S. Bernanke’s critics wrong.
More than a year after Republicans from House Speaker John Boehner of Ohio to presidential candidate Ron Paul of Texas warned that the Fed’s second round of asset purchases risked a sharp acceleration in prices, the surge has failed to materialize. The personal-consumption-expenditures price index rose 2.4 percent for the 12 months ending in December, near the central bank’s 2 percent target.

Dispelling Mainstream Media
Pro-Fed Hype and Non-Inflation Myths
BY KARL DENNINGER - FinancialSense.com
.... Bloomberg, like the rest of the media and Bernanke himself, love to cite "core" inflation as well. But you don't live in a "core" world; you consume both food and energy. The CPI index says that for a "median" family about 15% of your budget will go to "food and beverages", with 7.8% of it being "food at home." For a median income of $50,000 this is $3,900 a year, or $325 a month. I can buy that number.
But what's it look like if you're making $12/hour and have $24,000 a year in income -- over the poverty line, but rather typical of "modern" blue collar wages? Is it still 7.8% of your budget or is it much higher? Of course it's much higher.

The U.S. and China: A Duel to the Debt
By Alex Dumortier - Fool.com
n this period of "exceptional uncertainty" (to quote Federal Reserve Chairman Ben Bernanke), where can investors turn for a considered perspective on the current environment? Produced to feed the beast of the 24-hour news cycle, the bulk of financial journalism and commentary today isn't worth the servers it is stored on. One notable exception to that rule is Buttonwood, the financial markets column of The Economist. Philip Coggan is the columnist -- arguably the most influential position in financial journalism (along with the head of Lex at the Financial Times).
Deciphering the headlines
With the developed world facing fiscal and monetary crises, Coggan's new book, Paper Promises: Debt, Money, and the New World Order, is a veritable enigma machine for investors who wish to decipher today's headlines (the U.S. edition was released Monday). In an email interview last week, Coggan shared his observations on some of the most pressing topics of the day. In the first of two articles, he explains why the current international monetary system is on its last legs and discusses the possibility of the Chinese renminbi replacing the dollar in a successor system:

Will MF Global Customer Interests Be Crushed by Big Banks?
By Matt Koppenheffer - Fool.com
I'm not a lawyer. I don't even play one on TV. As a result, one of the most difficult aspects of breaking down the MF Global(OTC: MFGLQ) case has been trying to understand how the legal system works in this kind of situation.
At this point, my nagging suspicion is that it simply doesn'twork. Or at the very least, a quagmire of overlapping rules and regulations has created a labyrinth that not even some of the sharpest legal minds (or at least some of the most well-paid legal minds) seem to be able to navigate.
Not that the legal issues are the only maze that those working on MF Global have had to navigate.

Congress May Crush Key Tool For IRA Inheritors
Deborah L. Jacobs, Forbes Staff
Don’t look now, but a provision buried in the latest transportation funding bill would deal a fatal blow to an important strategy for estate planning with IRAs.
The proposed legislation is the Highway Investment, Job Creation And Economic Growth Act of 2012. Senate Finance Chairman Max Baucus (D., Mont.) has recommended a provision that would limit the use of so-called stretch IRAs unless those accounts have been converted to a Roth. These modifications are described in comments which download here as a PDF.
Here’s the bottom line on stretch IRAs and how this proposal could affect your ability to benefit heirs with retirement assets.

Why Wall Street Should Stop Whining
By Matt Taibbi - RollingStone.com
Everybody on Wall Street is talking about the new piece by New York magazine’s Gabriel Sherman, entitled "The End of Wall Street as They Knew It."
The article argues that Barack Obama killed everything that was joyful about the banking industry through his suffocating Dodd-Frank reform bill, which forced banks to strip themselves of "the pistons that powered their profits: leverage and proprietary trading."
Having to say goodbye to excess borrowing and casino gambling, the argument goes, has cut into banking profits, leading to lower bonuses and more extreme decisions like Morgan Stanley’s recent dictum capping cash bonuses at $125,000. In response to that, Sherman quotes an unnamed banker:

The End of Wall Street as They Knew It
After surprisingly successful financial reform, public vilification, and politics that have turned against them, the Masters of the Universe are masters no longer.
By Gabriel Sherman - NYMag.com
On Wall Street, bonus season is a sacred ritual. It is the annual rite where net worth and self-worth get elegantly reduced to a single number. During the 25-year boom that abruptly ended in 2008, the only principle that really mattered come bonus time was how you ranked against the guys to your right and left. The system was governed by a kind of atavistic justice: You eat what you kill. From the outside, the seven- and eight-figure payouts that star bankers earned could seem obscene, immoral even. But on the inside, the outlandish compensation reflected a strict, almost moral logic. "Wall Street is a meritocracy, for the most part," as a senior Citigroup executive put it to me recently. "If someone has a bonus, it’s because they created value for their institution." The sanctity of the bonus was built on the idea that Wall Street pay was simply the natural order of capitalism.

ObamaCare's Great Awakening
HHS tells religious believers to go to hell. The public notices.
WSJ.com
The political furor over President Obama's birth-control mandate continues to grow, even among those for whom contraception poses no moral qualms, and one needn't be a theologian to understand why. The country is being exposed to the raw political control that is the core of the Obama health-care plan, and Americans are seeing clearly for the first time how this will violate pluralism and liberty.
***
In late January the Health and Human Services Department required almost all insurance plans to cover contraceptive and sterilization methods, including the morning-after pill. The decision came after passionate lobbying by religious groups and liberals from the likes of Planned Parenthood, amid government promises of compromise.

Jobs rebound dampens QE3 prospects: Fed officials
By Ann Saphir and Jonathan Spicer
(Reuters) - The pick-up in jobs has caught the eye of two top Federal Reserve officials who said on Wednesday that continued improvement in the beleaguered labor market dampens prospects for more economic stimulus measures from the central bank.
San Francisco Fed President John Williams and Richmond Fed President Jeffrey Lacker pointed to better-than-expected data in recent months that show the U.S. unemployment rate dropped to 8.3 percent, a still-high level that casts intrigue on the Fed's next move to boost the economy, if any.

New York, California Said to Be Signing
on to Multistate Foreclosure Deal
By David McLaughlin - Bloomberg.com
New York and California are joining a multistate accord with banks over foreclosure practices, a person familiar with the matter said today.
New York Attorney General Eric Schneiderman and California Attorney General Kamala Harris, who have been among the most outspoken in pushing for changes to the accord, were among those who hadn’t joined as of a Feb. 6 deadline. More than 40 states signed on, Iowa Attorney General Tom Miller, who is helping to lead talks with the banks, said that day.

Meet the Obscure Federal Regulator
Who’s Not Helping Homeowners
By Cora Currier, ProPublica - via Truthdig.com
Last week, ProPublica and NPR raised questions about a risky investment strategy at Freddie Mac that would pay off if homeowners stayed trapped in expensive mortgages. It’s just the latest example of how government-owned Freddie Mac and Fannie Mae havefrustrated many by not putting homeowners first.
Fannie and Freddie are required to help homeowners while earning profits so they can pay back the taxpayers who bailed them out. Here is our guide to the little-known federal regulator, Edward DeMarco, ultimately in charge of the two companies. You may have never heard of him, but as The Washington Post put it, he’s "the most powerful man in housing policy."

States Negotiate $25 Billion Deal for Homeowners
By NELSON D. SCHWARTZ and SHAILA DEWAN - NYTimes.com
After months of painstaking talks, the nation’s biggest banks have agreed to a $25 billion settlement that could provide relief to more than two million current and former American homeowners harmed by the bursting of the housing bubble, state and federal officials said. It is part of a broad government settlement aimed at halting the housing market’s downward slide.

Postwar Rent Controls
Mises Daily: by Robert L. Scheuttinger and Eamonn F. Butler
The rent that a landlord charges for his accommodation is merely an instance of a price for a commodity, like all other prices for all other commodities. And like all other prices and all other commodities, rents have been a prime target for government restrictions. The postwar experience with rent control has been particularly revealing in regard to the adequacy of controls in general.
Governments have three main reasons for imposing rent control. The first is the fear that those who can pay will get all the housing and the poor will be left in the cold. The second is that landlords benefit too much from rents that can be indefinitely raised. The third is that a rise in rents is a form of inflation, and so should not be allowed.

100 million working age Americans don't have jobs.
What Are We Going To Do If The Number Of American Adults That Can't Take Care Of Themselves Continues To Set New Records?
EndOfTheAmericanDream.com
Today, the number of American adults that can't take care of themselves is at an all-time record high. So what are we going to do if the number of people dependent on the government keeps going up? Some folks like to point out that most Americans that have recently become dependent on the government would rather be working, but because of a lack of jobs they have gotten into a position where they cannot take care of themselves anymore. Some other folks like to point out that the number of Americans that abuse the system and that enjoy being dependent on the government is steadily increasing. Sadly, both of those positions are true. It is a fact that the percentage of working age Americans that actually have jobs has declined dramatically over the past several years because of a lack of jobs. It is also a fact that a growing percentage of Americans believe that it is the job of the government to take care of them from the cradle to the grave. What people need to understand is that the government is the problem and not the solution. We desperately need more jobs in this country, but the federal government has been absolutely killing job growth, it has been creating a culture of government dependency, and it has been going into gigantic amounts of debt trying to take care of so many people. So what are we going to do if the number of American adults that can't take care of themselves continues to set new records year after year?

Speaking Up Is Hard to Do: Researchers Explain Why
By Elizabeth Bernstein - WSJ.com
Robert Murphy, an online marketing representative in San Francisco, was invited to a business meeting with his boss and six colleagues a few weeks ago. He had attended previous meetings on the subject, and he prepared with additional research. He brought a thick sheaf of notes and contracts with him to the conference room.
So what did he contribute to the discussion? Absolutely nothing.
"I just sat there like a lump, fixated on the fact that I was quiet," says Mr. Murphy, 31 years old.

Goldman’s Hawker Beechcraft
Names 'Turnaround Kid' Steve Miller as CEO
By Mary Schlangenstein - Bloomberg.com
Hawker Beechcraft Inc., the jet maker partly owned by Goldman Sachs Group Inc. (GS), named turnaround specialist Steve Miller as chief executive officer as the company works to avoid breaching debt covenants.
Miller’s hiring spurred American International Group Inc. (AIG), the bailed-out insurer for which he is chairman, to review succession plans. Miller, 70, was designated in 2010 to serve as interim CEO at AIG in the event that Robert Benmosche has to step down while fighting cancer.
The new chief takes over immediately at Wichita, Kansas- based Hawker Beechcraft, which has been close to violating loan terms as a softer global economy saps business-aircraft demand. Hawker Beechcraft hired Perella Weinberg Partners LP as a financial adviser in December, and its bonds have been tumbling.

U.S. Likely to Approve Google Bid for Motorola
By Jeff Bliss - Bloomberg.com
The U.S. Justice Department will probably give antitrust approval next week to Google Inc. (GOOG)’s bid for Motorola Mobility Holdings Inc. and to plans by a consortium led by Microsoft Corp. (MSFT) and Apple Inc. (AAPL) to buy Nortel Network Corp. patents, said two people familiar with the matter.
In its investigation of the deals, the Justice Department became concerned with the increasing tendency of patent holders suing to stop other companies from using their essential smartphone technology, one of the people said. The department will continue to examine companies such as Google that haven’t sworn off the practice, one of the people said.

Today's Dilemma for Conservatives
By Kevin Drum - MotherJones.com
This cracks me up:

Florida’s poor can use food stamps to buy staples like milk, vegetables, fruits and meat. But they can also use them to buy sweets like cakes, cookies and Jell-O and snack foods like chips, something a state senator [Ronda Storms] wants stopped.
....[Her] bill would also require the state to launch a culturally sensitive campaign to educate people about the benefits of a nutritious diet. Supporters say it would help recipients follow healthy eating habits and prevent taxpayer funds from being used to purchase luxury foods like bakery cakes when they can whip up a cheaper box mix.

What a dilemma. On the one hand, this bill promotes the exact same nanny-state behavior that Republicans howl about when Michelle Obama or Michael Bloomberg starts nattering on about salt consumption or fatty foods. On the other hand, it punishes welfare recipients, something that's always good for a round of applause from right-wing audiences. What's a conscientious conservative to do?

New York's Koch-Fueled Binge:
Saltz and Davidson on Distasteful Donations
By Jerry Saltz and Justin Davidson - NYMag.com
The Metropolitan Museum of Art has announced plans to renovate its double-fountain Fifth Avenue plaza with $60 million of David H. Koch’s money. Koch, a libertarian Tea Party backer, and sworn enemy of many progressive causes, takes political positions anathema to many who benefit from his largesse. The latest donation prompted art critic Jerry Saltz and architecture critic Justin Davidson to discuss whether arts institutions should take any and all donations, however distasteful they might find the donor.

McCarthy, Beck, and the New Hate
For more than 60 years, a feedback loop of conspiracy theories has flared when tough times make people long for order and control.
By Arthur Goldwag - TheAtlantic.com
Flash back half a century and you'll hear much of the same agitated rhetoric that we hear today. On February 9, 1950, Senator Joseph McCarthy stood before a woman's Republican Club in Wheeling, West Virginia, and declared that the U.S. was engaged in "a final, all-out battle between communistic atheism and Christianity." The odds, he intimated, were very much against us.
"The reason why we find ourselves in a position of impotency," he said, is "because of the traitorous actions of those who have been treated so well by this Nation."

Homegrown Terrorism Has Shrunk to Minuscule Proportions
By Kevin Drum - MotherJones.com
Today's chart comes from Charles Kurzman of the Triangle Center on Terrorism and Homeland Security. It shows the steady decline over the past decade in indictments forsupport of terrorist attacks in the United States: [see chart]
The number of violent plots carried out by Muslim-Americans was also down substantially in 2011, and virtually all of them were disrupted early. From the report: "Of the 20 Muslim-Americans accused of violent terrorist plots in 2011 only one, Yonathan Melaku, was charged with carrying out an attack, firing shots at military buildings in northern Virginia. Nobody was injured."

FBI warns of threat from anti-government extremists
By Patrick Temple-West
(Reuters) - Anti-government extremists opposed to taxes and regulations pose a growing threat to local law enforcement officers in the United States, the FBI warned on Monday.
These extremists, sometimes known as "sovereign citizens," believe they can live outside any type of government authority, FBI agents said at a news conference.
The extremists may refuse to pay taxes, defy government environmental regulations and believe the United States went bankrupt by going off the gold standard.

Fisker is not another Solyndra ... yet
By Peter Valdes-Dapena and Steve Hargreaves - CNN.com
NEW YORK (CNNMoney) -- When Fisker Automotive announced it was laying off about two dozen workers at its Delaware factory, comparisons arose to Solyndra, the solar cell manufacturer that went bankrupt despite billions of dollars in U.S. government help.
Yes, the California based electric car maker and Solyndra both got a lot of government assistance, but analysts say those comparisons are unfair and premature.

Honda messed with the wrong woman
Ordinary dispute becomes a PR nightmare
By Al Lewis
DENVER (MarketWatch) — Things to note about Heather Peters, the 46-year-old consumer who recently humiliated American Honda Motor Co. Inc. in a California small claims court and turned an ordinary customer dispute into a public relations nightmare:

• She used to drive BMWs and other high-end vehicles. She bought her 2006 Honda Civic Hybrid because she was down on her luck and thought it would get 50 miles per gallon as advertised.
• She wasn’t some failed, two-bit lawyer who let her law license lapse. She practiced business litigation, defending corporations. She worked at Barger & Wolen, which has offices in Los Angeles, San Francisco, Newport Beach, Calif., New York and London.

Google Privacy Changes Must Be Stopped,
Argues Lawsuit Seeking FTC Action
By Sara Forden - Bloomberg.com
Google Inc. (GOOG)’s planned changes to its privacy policy violate a consent order signed with the U.S. Federal Trade Commission last year and should be blocked, a Washington advocacy group said in a lawsuit.
Google’s plan to streamline privacy settings for some 60 different services and products on March 1 would allow the company to combine more information about users, reduce users’ control of their own data and give more personal information to advertisers, theElectronic Privacy Information Center said. The group seeks to compel the FTC to enforce the consent decree.

Scaled-back ethics measure
moves toward approval in House
By Paul Kane - WashingtonPost.com
A scaled-back ethics bill headed toward likely passage in the House on Thursday despite complaints from senators that Republican leaders had jettisoned several key provisions thatwon overwhelming Senate support last week.
House Majority Leader Eric Cantor (R-Va.) unveiled legislation that formally bans lawmakers and staff members from making financial trades based on non-public information they receive in their positions. Rather than holding an open, freewheeling debate, as the Senate did last week, House Republicans have put the ethics legislation on a fast-track schedule that forbids amendments and requires a two-thirds majority for passage.

Open Letter to Congress on SOPA: Take a Breath
by Michael del Castillo - Portfolio.com
It’s not often that dozens of organizations with disparate agendas gather together under a single cause and ask Congress to think. But yesterday, February 6, that’s exactly what approximately 70 organizations, including venture capitalists, entrepreneurs, human rights groups, a group of moms and a comedy site—did and the cause that drew them together was the Stop Online Piracy Act (SOPA) and the Protect IP Act (PIPA).
"Now is the time for Congress to take a breath, step back, and approach the issues from a fresh perspective," the groups wrote in a joint letter addressed to Congress.
The letter asked members of Congress to take time to think about the true extent of online infringement, and to do so using "unbiased sources" and in the public's eye.

Obama’s Middle East Malady
Zaki Laidi - Project-Syndicate.org
PARIS – No sooner did US President Barack Obama welcome home American troops from Iraq and laud that country’s stability and democracy than an unprecedented wave of violence – across Baghdad and elsewhere – revealed the severity of Iraq’s political crisis. Is that crisis an unfortunate exception, or, rather, a symptom of the failure of Obama’s Middle East diplomacy, from Egypt to Afghanistan?

Syria: rockets rain down on Homs as violence escalates
More than 200 rockets fall in space of three hours on opposition-controlled suburb of Baba Amr, according to residents
By Julian Borger, Luke Harding
and Chris McGreal in Washington - Guardian.co.uk
The Assad government escalated its military onslaught on the Syrian opposition with the most intense bombardment of rebel-held areas so far, as the west and the Arab world scrambled to find a new diplomatic strategy without Russian and Chinese help.
Tanks and heavy artillery were used on an unprecedented scale, according to witnesses. More than 200 rockets fell in the space of three hours on just one part of Homs, the opposition-controlled suburb of Baba Amr, residents said.

China’s Syrian Folly
By Steve Tsang - Project-Syndicate.org
NOTTINGHAM – In vetoing the United Nations Security Council’s draft resolution on Syria, China claims that it has acted in the interests of the Syrian people, a position articulated in the People’s Daily, the newspaper of the Communist Party’s Central Committee, in a commentary appearing under the pen name Zhong Sheng. The characters for "Zhong Sheng" mean the sound of a bell, but they are phonetically the same as "the voice of China." The word play was no accident: the voice of China on this issue is as clear as a bell.

Iran envoy:
We could hit US forces anywhere in world if attacked
Reported remarks by ambassador to Russia come as sanctions tighten financial noose on Iran
msnbc.com news services
DUBAI — Iran is capable of hitting U.S. military forces anywhere in the world if attacked by the United States, its ambassador to Moscow was quoted as saying at a news conference on Wednesday.
Reuters reproted that Russia's Interfax news agency quoted Seyyed Mahmoud-Reza Sajjadi saying the United States would be making a mistake if it carried out a military strike on Iran, although Washington has announced no such plans.

Will Iran Be Attacked?
By Paul Craig Roberts - PaulCraigRoberts.org
Washington has made tremendous preparations for a military assault on Iran. There is speculation that Washington has called off its two longest running wars–Iraq and Afghanistan–in order to deploy forces against Iran. Two of Washington’s fleets have been assigned to the Persian Gulf along with NATO warships. Missiles have been spread amongst Washington’s Oil Emirate and Middle Eastern puppet states. US troops have been deployed in Israel and Kuwait.
Washington has presented Israel a gift from the hard-pressed american taxpayers of an expensive missile defense system, money spent for Israel when millions of unassisted americans have lost their homes. As no one expects Iran to attack Israel, except in retaliation for an Israeli attack on Iran, the purpose of the missile defense system is to protect Israel from an Iranian response to Israeli aggression against Iran.

U.S. and Israel Split on Ways to Deter Iran
By MARK LANDLER and DAVID E. SANGER - NYTimes.com
WASHINGTON — Amid mounting tensions over whether Israel will carry out a military strike against Iran’s nuclear program, the United States and Israel remain at odds over a fundamental question: whether Iran’s crucial nuclear facilities are about to become impregnable.
Israel’s defense minister, Ehud Barak, coined the phrase “zone of immunity” to define the circumstances under which Israel would judge it could no longer hold off from an attack because Iran’s effort to produce a bomb would be invulnerable to any strike. But judging when that moment will arrive has set off an intense debate with the Obama administration, whose officials counter that there are other ways to make Iran vulnerable.

International 'militarisation' in Syria
growing closer, warns US official
The international community may be forced to 'militarise' the crisis in Syria unless president Bashar al-Assad stops the onsalught on his people, a senior US official warned on Wednesday.
By Alex Spillius - Telegraph.co.uk
The official from the State Department told The Daily Telegraph that while the White House wants to exhaust all its diplomatic options, the debate in Washington has shifted away from diplomacy and towards more robust action since Russia and China blocked a United Nations resolution condemning Syria.
The Pentagon’s Central Command has begun a preliminary internal review of US military capabilities in the region, which one senior official called a "scoping exercise" that would provide options for the president if and when they were requested.

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