Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.

Thursday 03.15.2012

Banks Oversold, Muni Defaults Still Coming: Whitney
By: Jeff Cox - CNBC.com
It's no big surprise that most U.S. banks made it through the recent stress tests, according to analyst Meredith Whitney, who told CNBC the stocks are still oversold and better buys than their smaller competitors.
With the exception of a few large institutions with balance sheet and earnings problems, the founder of the Meredith Whitney Advisory Group said the banks should be trading around book value.

Volcker: Economy needs bold action, including tax hikes
By Jennifer Liberto @CNNMoney
WASHINGTON (CNNMoney) -- Former Fed Chief Paul Volcker urged U.S. political leaders to join forces for bold action to reduce deficits and secure the nation's future.
In a speech Wednesday that Volcker himself said was intended to be "a little provocative," he challenged U.S. leaders to go further in raising taxes and cutting spending than suggestions laid out by bipartisan deficit-cutting commissions and panels.

Silver As Currency
Silver-Prices.net
It’s not only individuals that are seeking safe havens. Increasingly, legislators are showing interest in providing their constituents with safe alternatives to paper money. Over a dozen US states have expressed interest in considering or issuing an alternative currency, and one has already taken a step in that direction with gold and silver coins.
On March 25, 2011, Utah’s Governor Gary Herbert signed House Bill 317, approving gold and silver coins issued by the federal government as legal tender. Recognizing gold and silver as legal tender eliminated certain state tax liabilities such as tax on profits on coins when were viewed mostly as assets.

Is the Greek Debt Problem Really Solved?
By Greg Hunter’s USAWatchdog.com
Yesterday, a short but ominous press release was issued at the Commodities Futures Trading Commission. It said, "At the request of CME Clearing Europe Limited (CMECEL), pursuant to Section 7 of the Commodity Exchange Act, the Commodity Futures Trading Commission issued an Order on March 13, 2012, vacating the registration of CMECEL as a derivatives clearing organization." (Click here for the CFTC press release.) In plain English, the Chicago Mercantile Exchange (CME) no longer wants to be the clearing house for European derivatives. The derivatives market in Europe must have been very lucrative for the company. After all, just the credit default swap (CDS) market is reportedly worth $50 trillion globally. (A CDS is a form of insurance. If there is a default, the debt is paid by the entity that sold the insurance contract.) I ask myself, why would the CME willingly stop being the clearing house for this profitable and large market?

Greece Should Switch to Dollar to Be Saved
By: Antonia Oprita, Deputy News Editor - CNBC.com
Switching to the dollar from the euro would help Greece get out of its crisisand would at the same time be an electoral boost for U.S. President Barack Obama, an analyst with London-based Strategy Economics consultancy group wrote.
For Greece it is very hard to pull out of the euro zone unilaterally but, at the same time, the country "runs a substantial trade deficit, and no longer has any realistic ability to borrow money," Strategy Economics analyst Matthew Lynn wrote in a note.

So, What's Next Step Towards The Eurocalypse?
By Reggie Middleton - SilverBearCafe.com
Okay, as I have been warning since the first quarter of 2010, Greece has defaulted. What I mean by default is that Greece did not honor the payment terms of its debtor agreements. I really don't care what this or that association decides to call it, if you bought Greek bonds you ain't getting the money that Greece promised when they promised they will give it to you. Just to add something official sounding to it, Fitch has declared it so, Fitch Downgrades Greece From C To Restricted Default. Of course, if you are on BoomBustBlog of following me, your probably smarter than to take these guys words for anything even remotely resembling predictive since they declared default status about three hours before Greece actually made it official they would default - plenty of time for interested parties to do something about it, no?

Nine Foreign Ministers
to Discuss New EU Constitution in Berlin
TheTrumpet.com
The European Union needs to debate a new constitution, German Foreign Minister Guido Westerwelle said March 9 at a meeting of EU foreign ministers in Copenhagen. Nine EU countries are expected to discuss the idea in Berlin on March 20, Reuters reported, citing an anonymous EU diplomat.
"We have to open a new chapter in European politics," Westerwelle told reporters. "We need more efficient decision structures."
"I think we have to reopen the debate about a European constitution again," he said. "We have a good treaty, but we need a constitution … as there are new centers of power in the world."

China central banker: EU is our biggest uncertainty
BY PHILIP EBELS - EUObserver.com
BRUSSELS - In a sign of growing confidence on the global stage, China on Monday (12 March) singled out Europe as the "biggest uncertainty" for the future of its economy.
The governor of China's central bank, Zhou Xiaochuan, said that a slow world recovery process and the unstable economic and financial situation in Europe will be the big unknowns for China's economy this year.
Speaking on the sidelines of the National People's Congress in Beijing, Zhou was quoted by Reuters as saying that "the biggest uncertainty in the international economic situation, as we all know, is the economic recovery process, especially the European economy and financial market development relating to the euro sovereign debt crisis."

How to Ruin Your Economy and Influence People
Bill Bonner - SilverBearCafe.com
We can learn a lot from the Argentines. When it comes to messing up an economy, they’re Numero Uno. They’re Olympians of financial legerdemain and masters of the old false shuffle.
In 2001, the country was deeply in debt. The government was out of money. And the currency was losing value fast. What did the Argentines do?
First, they broke their promise to investors and savers, cutting the peso loose from the dollar. Then, they seized control of banks and bank accounts. People had been saving money in US dollar accounts in order to avoid problems with the peso. But the Argentine feds forcibly converted their accounts to pesos, just as the peso was losing 2/3rds of its value.

Why the Federal Reserve is being cautious
The economic picture has improved, but the Fed isn't convinced. Chairman Ben Bernanke doesn't want to be wrong -- again.
By Nin-Hai Tseng, Writer - Forbes.com
FORTUNE – Despite the recent spate of positive economic data, the Federal Reserve on Tuesday signaled it's not totally buying the good news. Policymakers acknowledged that the job market improved more than expected and that households and businesses were spending more. But while officials sounded a tiny bit more upbeat, they held back from getting too cheery.
The Fed's sense of caution is something to watch. It's largely what's keeping short-term interest rates ultra-low until 2014 – a policy that's irked savers and investors who've seen almost no return on their cash. Republicans, in particular, aren't thrilled about it either. They say cheap money could eventually stoke inflation and make the fragile economy worse off.

Dodd-Frank Could Shutter Many Community Banks:
Former FDIC Chair
By: Michelle Fox - CNBC.com
Community banks have a lot to fear from the Dodd-Frank financial reforms, which could put half of them out of business, former FDIC Chairman Bill Isaactold CNBC Wednesday.
"The bigger banks can absorb it, the smaller banks can’t," Isaac, who is now chairman of Fifth Third Bancorp, told Larry Kudlow. "I would not be surprised to see half of the community banks in this country go out of business if we don’t give some relief from Dodd-Frank for them."

A Public Exit From Goldman Sachs Hits at a Wounded Wall Street
Why I Am Leaving Goldman Sachs
By GREG SMITH - NYTimes.com
TODAY is my last day at Goldman Sachs. After almost 12 years at the firm — first as a summer intern while at Stanford, then in New York for 10 years, and now in London — I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it.
To put the problem in the simplest terms, the interests of the client continue to be sidelined in the way the firm operates and thinks about making money. Goldman Sachs is one of the world’s largest and most important investment banks and it is too integral to global finance to continue to act this way. The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for.

Goldmans has the chance to change,
but will probably blow it - again
The resignation letter of Greg Smith, a middle-ranking trader at Goldman Sachs, has caused outrage and fascination. Swallowing his version entirely, just because it’s what we want to hear, might be unwise, however.
By Damian Reece - Telegraph.co.uk
The apparently revelatory letter is unlikely to do Goldmans any reputational damage - that would be impossible given how low its reputation already is. Likewise embarrassment. Goldmans doesn’t do embarrassment, hence the mess it finds itself in.
The fact that a disaffected former employee (always an employer’s most toxic risk and a journalist’s greatest asset) has chosen to emote on the topic of life inside Goldmans at least adds a new element to the Goldmans photofit. That said, the "shock, horror" nature of Smith’s outburst is likely to be motivated as much by lost promotions, bonuses and seeing peers winning the success stakes as any sudden moral revelation.

Goldman Sachs chief Lloyd Blankfein
'disappointed' by claims of 'toxic' greed
Lloyd Blankfein, the chief executive of Goldman Sachs, has defended the firm after an employee attacked a "toxic" and "destructive" culture at the leading investment bank that is increasingly focused on making money from clients, in an article in the New York Times.
Telegraph.co.uk
Greg Smith, who is resigning today as a Goldman Sachs executive director and head of its US equity derivatives business in Europe, the Middle East and Africa after 12 years, wrote:
"I can honestly say that the environment now is as toxic and destructive as I have ever seen it. To put the problem in the simplest terms, the interests of the client continue to be sidelined in the way the firm operates and thinks about making money."

NET BRANCHES – RECIPE FOR MORTGAGE FRAUD
By BrianMahany - ML-Explode.com
Mortgage net branches – they are everywhere. If set up properly they help people get into the mortgage business with low start up costs. The benefits include access to a national network, more products and more lending lines. Customers get better rates while independents can enter the business without millions in start up costs.
There is a dark side, however.
HUD and the Federal Housing Administration (FHA) have strict rules designed to insure that loans guaranteed by taxpayers are good loans. Taxpayers shouldn’t be asked to shoulder the toxic debt created by unscrupulous mortgage companies. To insure that the mortgage company itself has some "skin in the game," they must insure that their agents are well supervised and not shouldering the costs of the branch.

Readers on mortgage settlement: 'This stinks'
By Les Christie @CNNMoney
NEW YORK (CNNMoney) -- The $26 billion foreclosure settlement has many Americans crying foul.
While some claim the deal helps too few homeowners, others say it gives irresponsible borrowers an undeserved bailout.
"This entire deal sucks! Keep taking away the chances for middle class America to get ahead and what good is our American system," wrote a reader with the handle Bushywalrus.
"So what the government is telling me is if I were to go break the law. LIE CHEAT and STEAL change all my morales. I would get away clean and not have to pay a cent," wrote nnmfam.

America Mortgaged at an Adjustable Rate
BY PETER D SCHIFF - FinancialSense.com
The Federal Reserve ran another "stress test" on major financial institutions and has determined that 15 of the 19 tested are safe, even in the most extreme circumstances: an unemployment rate of 13%, a 50% decline in stock prices, and a further 21% decline in housing prices. The problem is that the most important factor that will determine these banks' long-term viability was purposefully overlooked - interest rates.

Housing Regulators Do Not Have A Clue What Is Going On
By: Cadie Thompson, Producer - CNBC.com
Cash in your bets, it's official, government housing regulators are clueless.
Okay, perhaps this isn't exactly news, but today they demonstrated their lack of ability to manage in the mortgage industry when Ed DeMarco, the acting director of the Federal Housing Finance Agency (aka the guy who is supposed to oversee under-conservatorship government sponsored entities) railed on aFannie Mae program that his agency approved.

Tax breaks for the unemployed
By Blake Ellis @CNNMoney
NEW YORK (CNNMoney) -- For unemployed Americans who have watched their savings diminish as they look for work, tax season may finally bring some relief.
Out of work job seekers can deduct all sorts of expenses, including the cost of printing and sending hundreds of resumes, hiring headhunters, even what they spend on travel to interviews. There are also tax perks they can qualify for if they decide to throw in the towel on the job search and become self-employed or freelance.

Broken Promises: Pensions All Over America
Are Being Savagely Cut Or Are Vanishing Completely
By Michael Snyder - TheEconomicCollapseBlog.com
How would you feel if you worked for a state or local government for 20 or 30 years only to have your pension slashed dramatically or taken away entirely? Well, this exact scenario is playing out from coast to coast and in the years ahead millions of elderly Americans are going to be affected by broken promises and vanishing pensions. In the old days, things were much different. You would get hired by a big company or a government institution and you knew that the retirement benefits that they were promising you would be there when you retired in a few decades. Unfortunately, we have now arrived at a time when government institutions and big companies have promised far more than they are able to deliver, and "pension reform" has become one of the hot button issues all over the nation. Many Americans that have been basing their financial futures on their pensions are waking up one day and finding that their pensions are either gone or have been cut back dramatically.

Health care premiums
will surpass median U.S. incomes by 2033: study
By Andrew Jones - TheRawStory.com
The cost of health care will surpass the price of a median income household in the United States by 2033 if current trends continue, according to a study published in the March/April issue of Annals of Family Medicine.
Researchers accumulated data from the U.S. Census Bureau and the Medical Expenditure Panel Survey to compare Americans’ incomes and the premiums they’ve paid from 2000 to 2009. The cost of premiums rose by eight percent over that time period compared to just two percent of incomes.

OBAMACARE COST JUMPS $111 BILLION; NO ONE NOTICES
By John Hinderaker - PowerlineBlog.com
It is tempting to ignore President Obama’s budgets, since no one seriously intends that they be adopted; his FY 2012 budget was voted down in the Senate, 97-0. Yet every now and then, interesting information is buried in the fine print. Table 33-1 of the budget sets forth the proposed spending for federal programs by agency and account. In President Obama’s FY 2012 budget, this is the line item for one aspect of Obamacare–the Refundable Premium Assistance Tax Credit, which subsidizes the purchase of health insurance by individuals on the insurance exchange that the statute would establish. The fiscal years covered by this estimate are 2014 through 2021:

Most Wealthy Americans Think US Is Still in Recession
By: Robert Melstein - CNBC.com
Wealthier Americans aren't very optimistic about the economic recovery, with a surprising 63 percent saying the US is still in a recession, according to a new poll.
Some 55 percent think the economy won’t fully recover until 2013 or later, and 14 percent say the recession won’t end at all.
The results come from the January 2012 survey by Ipsos Mendelsohn Affluent Barometer, which studies the lifestyles, spending patterns and media habits of today’s affluent Americans. Ipsos defines affluent adults as those who have household income of $100,000 or more.

Is Pinterest the Next Napster?
By THERESE POLETTI - WSJ.com
Kirsten Kowalski is among the millions of people who have flocked to Pinterest to create virtual scrapbooks of images they "pin" to the website.
But as a photographer and lawyer, it dawned on her that she and other users were potentially violating copyright laws by posting content obtained freely from the Internet.
Now Ms. Kowalski is part of Pinterest's effort to stave off legal concerns and avoid the controversy that plagued digital-music-sharing website Napster, which a court shut down in 2001 to prevent the trading of copyrighted music on that network.

Complex Societies Need Simple Laws
By John Stossel - PatriotPost.us
"If you have 10,000 regulations," Winston Churchill said, "you destroy all respect for law."
He was right. But Churchill never imagined a government that would add 10,000 year after year. That's what we have in America. We have 160,000 pages of rules from the feds alone. States and localities have probably doubled that. We have so many rules that legal specialists can't keep up. Criminal lawyers call the rules "incomprehensible." They are. They are also "uncountable." Congress has created so many criminal offenses that the American Bar Association says it would be futile to even attempt to estimate the total.
So what do the politicians and bureaucrats of the permanent government do? They pass more rules.
That's not good. It paralyzes life.

UN rights council delves into US voter I.D. laws
By Eric Shawn - FOXNews.com
The controversy over requiring voters to provide photo IDs has reached the world stage.
The United Nations Human Rights Council is investigating the issue of American election laws at its gathering on minority rights in Geneva, Switzerland.. This, despite the fact that some members of the council have only in the past several years allowed women to vote, and one member, Saudi Arabia, still bars women from the voting booth completely.
Officials from the NAACP are presenting their case against U.S. voter ID laws, arguing to the international diplomats that the requirements disenfranchise voters and suppress the minority vote.

Voter-ID Insanity at DOJ Going to the United Nations
By Ken Blackwell - Townhall.com
The Far Left is making an unprecedented two-track move to derail states’ efforts to protect the integrity of the ballot box for this November’s elections. While the Department of Justice (DOJ) is blocking state efforts, liberal activists are taking this issue to the United Nations as a human rights violation.
Attorney General Eric Holder is invoking Section 5 of the Voting Rights Act (VRA) as giving him the power to block Texas’ voter-ID law, which simply requires that voters show that they are who they say they are before they cast a vote to influence an election outcome. This is the same argument Holder made to block South Carolina’s voter-ID law, a move that has landed him in federal court.

U.N. TO INVESTIGATE VOTER I.D. LAWS
By John Hinderaker - PowerlineBlog.com
This is really the last straw. It is time to get out of the United Nations: "UN rights council delves into US voter I.D. laws."

The United Nations Human Rights Council is investigating the issue of American election laws at its gathering on minority rights in Geneva, Switzerland. This, despite the fact that some members of the council have only in the past several years allowed women to vote, and one member, Saudi Arabia, still bars women from the voting booth completely.
Officials from the NAACP are presenting their case against U.S. voter ID laws, arguing to the international diplomats that the requirements disenfranchise voters and suppress the minority vote.

That isn’t treason, but it is disloyal; disgracefully so.

The Obama Flag:
Who Decided That It Was Okay
To Replace The Stars On The American Flag
With The Face Of Barack Obama?
By Michael Snyder - EndOfTheAmericanDream.com
Democrat Party headquarters in Lake County, Florida has been flying an American flag with a face of Barack Obama on it. Yes, you read that correctly. The "Obama flag" features a huge picture of the face of Barack Obama in the area where the stars are usually located. To many Americans today, the American flag may be "just a piece of cloth", but when I was young I was taught that one must never desecrate the American flag. The American flag is our highest national symbol. Millions of Americans have fought and died defending freedom and liberty under that banner. To see a photo of Barack Obama plastered on it is an absolute disgrace. Sadly, there are lots of these flags floating around. In fact, you can buy them online for $12.95. Down in Florida, the chairwoman of the Lake County Democratic Party took down the "Obama flag" after a group of veterans protested, but she also said that she is not promising that she will not put it back up and that she is going to consult an attorney about all of this.

Agenda 21 on Steroids
By Debbie Coffey - PPJ Gazette
The Draft International Covenant on Environment and Development is Agenda 21 on steroids. If you take the word "Environment" out of the title (which seems to be thrown in to placate you), and call this the International Covenant on Development, you will more clearly see the intent of this manifesto.
The Covenant is intended to become a binding Global Treaty and the template for international law. International attorneys have been hammering this out for about 16 years. The 4th draft was issued in 2010.

IAF strikes Gaza targets after rockets fired at Beersheba
By YAAKOV KATZ - JPost.com
Israeli aircraft respond to Grad rockets fired at South, striking rocket launching site, smuggling tunnel; IDF might need large ground operation in Strip, OC Southern Command Russo says.
The Israel Air Force struck a rocket launching site in northern Gaza and a smuggling tunnel in the southern Strip overnight Wednesday. Palestinians did not immediately report any injuries in the strikes.

Obama and Cameron pledge
not to delay to Afghanistan withdrawal
US lays on lavish reception for British prime minister as Barack Obama shores up support ahead of looming Iran crisis
By Nicholas Watt in Washington - Guardian.co.uk
British and American forces remain on track to pull back from lead combat missions in Afghanistan next year, Barack Obama and David Cameron declared at the White House on Wednesday.
The leaders of the countries with the largest number of troops in Afghanistan said the recent violence would not derail their plans to ensure that all combat troops are withdrawn by the end of 2014.

Obama: Window for diplomacy in Iran shrinking
US President says administration will do "everything we can" for diplomatic solution, but urges Tehran to negotiate.
By HILARY LEILA KRIEGER
AND JPOST CORRESPONDENT - JPost.com
WASHINGTON – US President Barack Obama warned Wednesday that the window to resolve the crisis over Iran’s nuclear program diplomatically was shrinking, and that Tehran would face consequences if it didn’t take fresh talks seriously.
"Because the international community has applied so many sanctions, because we have employed so many of the options that are available to us to persuade Iran to take a different course, the window for solving this issue diplomatically is shrinking," Obama said during a Rose Garden press conference with British Prime Minister David Cameron.

Iran: Mayor of Tehran
warns against display of Christian symbols on buildings
And Muslims coming out of Friday prayers destroyed Enghelab Square for its resemblance to, horror of horrors, a Star of David.
JihadWatch.org
Islamic Tolerance Alert from the Islamic Republic of Iran: "Tehran Mayor warns against display of Christian symbols on buildings," from Mohabat News, March 12 (thanks to Lachlan):
...After authorities complained about the display of Christmas trees and Santa Clauses in the streets of Tehran during the Christmas season, Hossein Kalkhorani, the deputy director of city services of Tehran in an interview conducted by Revolutionary Guard supported Fars news agency, announced that some people display freemasonry and Christian (!) symbols on their buildings and warned that the municipality of Tehran will seize these symbols. He stated, "Building facades in Tehran should be controlled by the municipality and the display of such symbols should not be allowed."

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