Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Tues 05.19.2009
Central Banks drive gold, commodities The latest rally in commodity prices was driven by Central Banks’ policies, Chinese strategic buying and short-covering activity. Gold prices rose in the past few months, mainly driven by safe-haven demand amid the global financial and economic crisis. While this demand supported prices, it also generated risks, some of which materialized – with safe-haven investors taking profits, resulting in a price decline. The softening of prices gave the physical market much needed breathing space.
America's Coming Tectonic Shift Something just seems fundamentally wrong, and it's unnerving. What may be about to happen to our Republic is a complete change in what we've always thought was permanent in America. Glenn Beck calls it "The Perfect Storm" and the term is prescient. Several domestic and worldwide events could utterly change our lives forever. The events are economic, sociological, geo-political, and military. If the outcome is to be for good or ill, is up to the American people.
America and the world are in for a difficult time We have come a long way from Dow 14,168 and we have just completed a strong bear market rally based on little but hopes, dreams and the assistance of the "Working Group on Financial Markets" under the guidance of the Treasury and the Fed. We believe the bear market has a substantial distance to fall as the debt sector is purged. A 50% retraction of debt, which is far above GDP has to be completed, excess capacity has to be rung out of markets, consumer spending, which is now 70% of GDP, has to return to the long-term average of 64.5% of GDP. Once real estate bottoms in 2011 and 2012, we will probably be half way to the overall bottom. We have 2/3's of the way to go before credit card debt is purged. We are just beginning to see failure of commercial and industrial loans and that could last another 3 to 4 years. Presently we are about 40% to the bottom. Then the question arises how long do we bump along the bottom - probably 5 years or longer - dependent on how bad the structural damage is, whether we still have a Federal Reserve; how many banks are left; whether we have WWIII or whether we have revolution. America and the world are in for a difficult time.
Global systemic crisis: June 2009 When the world steps out of a sixty-year old referential framework . . . . First, the desperate attempts to rescue the global financial system, particularly the American and British systems, have de facto "broken navigational instruments" as a result of all the manipulation exerted by financial institutions themselves and by concerned governments and central banks. Among those panic-stricken and panic-striking indicators, stock markets are a perfect case as we shall see in further detail in this issue of the GEAB. Meanwhile, the two charts below brilliantly illustrate how these desperate efforts failed to prevent the world's bank ranking from experiencing a major seism (it is mostly in 2007 that the end of the American-British domination in this ranking was triggered).
Abandoning the gold standard in 1971 has resulted in large global trade imbalances and a massive buildup of foreign currency reserves
These trade imbalances and buildup of foreign reserves have resulted in frequent booms and busts since 1971
The Japanese bust of 1989, the Asian economic crisis of 1997, and the current US credit market collapse have resulted from the post-1971 paper money monetary system
Abandoning the gold standard has gradually resulted in a very overvalued US dollar, and that the dollar is headed for disaster
“The dollar standard is inherently flawed and increasingly unstable. Its collapse will be the most important economic event of the 21st century.”
When we run out of cash What happens when we run out of cash? It's a serious question that hasn't been asked. The US government has committed something like $13.6 trillion dollars in bailout funds, securities swaps and giveaway programs. What if there isn't $13.6 million spare cash in the world to fund it? Times, they are going to get interesting.
Niall Ferguson: Diminished Returns Regulation Can't Be The Solution If financial crises were distributed along a bell curve — like traffic accidents or people’s heights — really big ones wouldn’t happen very often. When the hedge fund Long-Term Capital Management lost 44 percent of its value in August 1998, its managers were flabbergasted. According to their value-at-risk models, a loss of this magnitude in a single month was so unlikely that it ought never to have happened in the entire life of the universe. Just over a decade later, many more of us now know what it’s like to lose 44 percent of our money. Even after the recent stock-market rally, that’s about how much the Standard & Poor’s 500 index is down compared with October 2007.
Niall Ferguson Financial crisis and international change: historian Niall Ferguson on past financial emergencies and whether the current crisis in American credit markets will result in power flowing from West to East. Monday September 29 2008
Geithner's Treasury Can't Get Anything Done The Treasury Department is a mess. That's the inescapable conclusion from this morning's big Washington Post feature on how things just aren't getting done at the Treasury Department these days. David Cho describes a host of delays, backtracks and fumbles that, taken together, paint an ugly picture of one of the most economically important government department during the most devastating economic crisis in generations.
Federal Reserve: Agricultural credit tightened WICHITA, Kan. - More lenders are tightening their restrictions for agricultural loans in the Midwest at the same time that repayments on loans have dropped, The Federal Reserve Bank of Kansas City says. The Federal Reserve reported Friday that its quarterly survey found that the percentage of lenders raising collateral requirements reached another record high in the Tenth Federal Reserve District. The rate of loan repayments also fell for the second straight quarter. Turbulent agricultural conditions contributed to the tightened farm credit, the agency said. "The thing to take away from all of this is ... farmers are positioning themselves to get through turbulent times," Federal Reserve economist Brian Briggeman said. The district includes Colorado, Kansas, Nebraska, Oklahoma, Wyoming as well as parts of New Mexico and Missouri.
Battery makers vie for US aid A handful of US battery makers is scrambling for government support ahead of a deadline this week as the US struggles to win back lost ground from Asian competitors in one of the world's next important technologies. The race is also the first test of how the administration will use the near-$190bn in stimulus money earmarked this year to support "green" technologies, from alternative fuels to energy-efficient building materials. Advanced batteries are seen as a strategic technology, given their importance to electric and hybrid vehicles, and their military applications.
American Express will eliminate 4,000 jobs 6 percent of work force affected in move to trim $800 million by year’s end American Express said Monday it is eliminating about 4,000 jobs as part of a plan to slash another $800 million in costs for the remainder of the year. . . . . . . The newest plan follows $1.8 billion in cost cuts — including 7,000 layoffs — announced in October of last year. The company also suspended management-level salary increases and instituted a hiring freeze at the time.
You'll never guess which states have most jobless Labor could loom large in mid-term elections Unemployment in March was 20 percent higher in so-called "blue states" won by Democratic candidate Barack Obama in last fall's presidential election than in "red states" won by Republican candidate John McCain, according to the Bureau of Labor Statistics. If unemployment numbers in the blue states do not begin improving soon, the Democratic Party may start expressing concerns about 2010 mid-term election losses in both governor races and in Congress, many political observers say.
New rules: Work 'til you die Social Security, Medicare facing insolvency Treasury Secretary Timothy Geithner announced that Medicare would run out of money in 2017 and Social Security would do the same in 2037, both sooner than previously projected, Jerome Corsi's Red Alert reports. Both are reaching a tipping point as federal government tax revenue slows dramatically, unemployment rates increase and program benefit payouts grow.
Ex-Rocky staffers plan to launch online magazine DENVER - After splitting from financial backers of one online news venture, some former staffers of the defunct Rocky Mountain News plan to launch an online news magazine this summer. The Rocky Mountain Independent would have free original content but would be supported by advertising and members who pay for benefits like premium content and live chats, co-founder Steve Foster said. Content would come from a staff of about a dozen, plus freelancers and partner blogs that would share content and revenue.
Fast-Track Foreclosures in Texas Face Slowdown by Legislators Carlos Perez and Belinda Castillo of El Paso, Texas, were two months behind on their mortgage in January when the lender demanded that they catch up or face foreclosure. Two months later, their three-bedroom, Southwestern- style house was auctioned on the courthouse steps. Forty-one days is all it takes for some Texans to lose a home to foreclosure. That fast track from default notice to forced sale is the quickest of any U.S. state, according to a report from the Texas Housing and Community Affairs Department.
What to tax to pay for health care? Few experts think cutting costs will provide enough savings despite pledges A federal soda pop tax. Higher levies on beer, wine and hard liquor. Taxing some health insurance benefits. Those are among the options the Senate is considering to pay for revamping health care. How to pay for expanding coverage to nearly 50 million uninsured people is the toughest question in the health care debate. Cutting costs is a popular idea, but few experts think enough savings can be wrung from the system to expand coverage to so many - despite pledges from medical providers.
Testimony of illegal alien care from 1 Florida hospital
As Detroit Crumbles, China Emerges as Auto Epicenter America's auto titans are dismantling their global empires. But across the Pacific, it's as if the global economic forces that have pummeled Detroit never struck. Chinese auto sales are up, and this year China is projected to displace Japan as the world's largest car producer. Now, the auto world is buzzing that China's auto industry may try to pick up the pieces of Detroit -- at a bargain.
Obama fails to coax Netanyahu on two-state plan Barack Obama offered Benjamin Netanyahu a trademark dose of warmth and conciliation on Monday while politely distancing himself from many of the Israeli premier's hardline positions on the Arab-Israeli conflict. But Mr Obama did not succeed in persuading Mr Netanyahu to sign up to a two-state solution. After a two-hour meeting in the White House, the Israeli leader said his country was willing to resume peace talks immediately. But he stopped short of saying the Palestinians should have a fully fledged state, saying they "should govern themselves - absent a handful of powers that could endanger the state of Israel".
FBI Agent: Another 9/11 “Inevitable” The Obama administration’s policies are making another terrorist attack on the U.S. homeland “inevitable,” according to a former fbi agent. In an interview with Newsmax, John Vincent said the U.S. administration is repeating the mistakes of the past, leaving the country vulnerable. “I’m not exactly sure where the president is coming from, but all the signals he gives out is that the United States is prepared to talk peace, we’re not going to do anything to upset any of the people that are conducting all these terrorist acts, we’re going to back out of everything we’ve done before, we’re going to apologize for everything we’ve done in the past—what kind of signals does that send?” Vincent asked. “It sends a signal of weakness and: ‘We are not willing to try and stop what you have planned.’”
Pakistan Is Rapidly Adding Nuclear Arms, U.S. Says Members of Congress have been told in confidential briefings that Pakistan is rapidly adding to its nuclear arsenal even while racked by insurgency, raising questions on Capitol Hill about whether billions of dollars in proposed military aid might be diverted to Pakistan’s nuclear program.
Special section: LEARN ABOUT CAP AND TRADE
Why Congress Is Obsessed With Cap And Trade
A brief history of cap and trade legislation From a Theory to a Consensus on Emissions As Congress weighs imposing a mandatory limit on climate-altering gases — an outcome still far from certain — it is likely to turn to a system that sets a government ceiling on total emissions and allows polluting industries to buy and sell permits to meet it. That approach, known as cap and trade, has been embraced by President Obama, Democratic leaders in Congress, mainstream environmental groups and a growing number of business interests, including energy-consuming industries like autos, steel and aluminum.
Beware of Cap and Trade Climate Bills America's Climate Security Act of 2007 (S. 2191), sponsored by Senators Joseph Lieberman (I-CT) and John Warner (R-VA), is the latest and fastest-moving "cap and trade" bill introduced in Congress this year. All such climate change measures warrant careful scrutiny, as they would likely increase energy costs and do considerably more economic harm than environmental good.
Cap-and-trade policy begins to take shape The White House science adviser says there's room for compromise on an emission allowance, a stance that would please business but anger environmentalists. John P. Holdren, director of the White House Office of Science and Technology Policy, told The Washington Post a cadre of Cabinet-level officials is trying to develop principles to guide cap-and-trade legislation as it travels through Congress. Cap-and-trade, also called emission trading, is an administrative process that seeks to control pollution by providing economic incentives to polluting companies for achieving reductions in the emission of pollutants.
Florida Power Light's ambitious solar roll out. The last time Florida Power & Light Co. built a power plant from scratch at a brand-new site, the country was reeling from an energy crisis. It was 1980, and fed-up Americans were eyeing wind and the sun as alternatives to fossil fuels. As FPL opened the oil and gas plant in Martin County, the first solar plants were being envisioned in California. Windmills were sprouting around the country.
Battery makers scramble to get funding ahead of deadline A handful of US battery makers is scrambling for government support ahead of a deadline this week as the US struggles to win back lost ground from Asian competitors in one of the world’s next important technologies. The race is also the first test of how the administration will use the near-$190bn in stimulus money earmarked this year to support “green” technologies, from alternative fuels to energy-efficient building materials.
Toyota aims to sell 10,000 Prius' a month in Japan Toyota Sets Japan Prius Goal Double Honda’s Target Toyota Motor Corp. began Japan sales of a revamped Prius, the world’s bestselling hybrid, setting a sales target twice as high as Honda Motor Co.’s goal for the Insight. Toyota plans to sell 10,000 Prius cars a month in Japan, with prices starting at 2.05 million yen ($21,600), it said in a statement. The car, on sale from today, is the third version of the Prius, which has racked up global sales of more than 1.25 million since 1997.
Obama Ready To Unveil New Fuel Economy Standards Automakers will have to hit 35 miles per gallon by 2016. That's 42 mpg for cars and 26.2 for trucks and SUVs, according the Times. This updates a previous law that said they'd have to hit the 35 mpg benchmark by 2020. Earlier this year Obama announced a fuel economy standard of 30 mpg by 2011 for cars and 24 mpg for light trucks and SUVs.
Jordan and Shell To Proceed With Oil Shale Development Jordan and Shell are signing an agreement to further the development and potential commercialization of the country’s oil shale resources. The agreement outlines a three-stage process leading to a commercialization decision in about 10 years. “This project, if successful, is going to be a large scale one with multibillion-dollar investments in the Kingdom,” he said. “It will change the Kingdom’s face,”
Cutting funds for hydrogen fuel research is a mistake Energy Secretary's Proposal to Cut Hydrogen Fuel Cell R&D Is A Turn for the Worse One week has nearly passed since Energy Secretary Stephen Chu proposed slashing more than $100 million from Uncle Sam's hydrogen research and development program, and all of us should still be mystified and bothered by his proposal. Chu's rationale for cutting hydrogen funding by 59 percent to just $68 million: It's unlikely that the technology will become significant player during the next two decades.
Questions about the economic feasibility of oil sands, as well as the amount of greenhouse gasses they throw off Report Weighs Fallout of Canada’s Oil Sands In the tense debate between energy security and environmental sustainability, Canada’s vast oil sand reserves hold a special place. Canada has the second-largest petroleum deposits after Saudi Arabia and the biggest in the Western hemisphere. Its oil sands produce 1.3 million barrels of oil a day, up from 600,000 a day in 2000. As a result, Canada has become the biggest foreign oil supplier to the United States, accounting for 19 percent of imports in 2008.
As Alaska Glaciers Melt, It’s Land That’s Rising JUNEAU, Alaska — Global warming conjures images of rising seas that threaten coastal areas. But in Juneau, as almost nowhere else in the world, climate change is having the opposite effect: As the glaciers here melt, the land is rising, causing the sea to retreat. Morgan DeBoer, a property owner, opened a nine-hole golf course at the mouth of Glacier Bay in 1998, on land that was underwater when his family first settled here 50 years ago.
Can vegetarians save the world? A small town in Belgium has gone meat-free one day a week. A sign of things to come, says one food historian For decades, environmental arguments against eating meat have been largely the preserve of vegetarian websites and magazines. Just two years ago it seemed inconceivable that significant numbers of western Europeans would be ready to down their steak knives and graze on vegetation for the sake of the planet. The rapidity with which this situation has changed is astonishing.
"Made in Germany" not enough for solars to prosper German solar companies that have not yet set up U.S. and Chinese production plants are likely to lose out on significant subsidies and will struggle to bring down their production costs to the levels of their Asian peers. Announcements of solar subsidy programs in the two countries have supported the recent surge in solar stocks around the world, with China mulling more than 3 trillion yuan ($439.6 billion) to boost renewable energy in the country by 2020.
Indiana Says 'No Thanks' to Cap and Trade No honest person thinks this will make a dent in climate change. This week Congress is set to release the details of the Waxman-Markey American Clean Energy and Security Act, a bill that purports to combat global warming by setting strict limits on carbon emissions. I'm not a candidate for any office -- now or ever again -- and I've approached the "climate change" debate with an open-mind. But it's clear to me that the nation, and in particular Indiana, my home state, will be terribly disserved by this cap-and-trade policy on the verge of passage in the House.
Obama Administration Trying To Rename Cap And Trade The Obama administration is exploring alternative names for cap and trade legislation. People don't really know what cap and trade means, but they don't like it. So a new name is being concocted to gather support for the legislation. It doesn't look like the names "carbon tax" or "regressive tax" are in the mix, though. How does "clean energy dividend" grab you?
Oil, Gas, Coal, Spending Hundreds Of Millions To Fight Cap And Trade The oil, gas and coal industries increased their lobbying budgets by 50% in the first quarter of 2009, with $44.5 million being spent to undermine any plans to reduce CO2 emissions, the Guardian reports. The spoiler campaign runs to hundreds of millions of dollars and involves industry front groups, lobbying firms, television, print and radio advertising, and donations to pivotal members of Congress. Its intention is to water down or kill off plans by the Democratic leadership to pass "cap and trade" legislation this year, which would place limits on greenhouse gas emissions. The cap and trade legislation is currently being hammered out in the House of Representatives and hinges on the approval of 12 Democrats. Seven of those democrats received over $100,000 in campaign donations from oil, gas, and electricity producers in last year's elections. Two others received over $90,000.
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