Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Fri 07.31.2009
Cash for Clunkers list snafu resolved Some buyers will get the benefit anyway, but only if they acted before the EPA's changes. The last-minute snafu that suddenly disqualified some previously eligible vehicles from the Cash for Clunkers program has finally been cleared up. Last week, just before the program's July 24 official start date, 78 vehicles were made ineligible when the Environmental Protection Agency upped the estimated fuel economy ratings on those vehicles. At the same time, the EPA suddenly lowered the fuel economy ratings for 86 other vehicles, making them eligible. Acknowledging the confusion caused by the EPA's changes, the National Highway Traffic Safety Administration which manages the Clunkers program, said Thursday that trade-ins made between July 1 and July 24 of vehicles that became ineligible after the switcheroo will be allowed to keep their rebate, NHTSA spokesman Rae Tyson said.
Govt to suspend 'cash for clunkers' Government to suspend 'cash for clunkers' program out of funding concerns The government plans to suspend its popular "cash for clunkers" program amid concerns it could quickly use up the $1 billion in rebates for new car purchases, congressional officials said Thursday. The Transportation Department called lawmakers' offices to alert them to the decision to suspend the program at midnight Friday. The program offers owners of old cars and trucks $3,500 or $4,500 toward a new, more fuel-efficient vehicle. The congressional officials spoke on condition of anonymity because they were not authorized to speak publicly. Rae Tyson, a spokesman for the National Highway Traffic Safety Administration, which administers the program, declined comment.
Uh-Oh: Cash For Clunkers Is Too Popular The Cash-For-Clunkers law -- which gives a $4,500 rebate to people who turn in an old jalopy when buying a new car -- was roundly slammed before it was signed into law. And apparently even the government didn't think it would be all that popular--because it's already almost bankrupt due to its popularity. WSJ: Car dealers on Wednesday began expressing concern that the government's "cash for clunkers" incentive program could run out of money as soon as the end of August due to strong initial response from consumers. "It's important for customers to act because we don't know when the curtain is going to fall on this thing," said John McEleney, chairman of the National Automobile Dealers Association.
Gold rebounds as oil rallies, dollar weakens Holdings in biggest gold ETF falls again; silver ETF holdings steady Gold futures rose nearly 1% Thursday, gaining for the first session in three, as rebounding crude-oil futures heightened the metal's appeal as a hedge against potential inflation. Also pushing gold higher, the dollar weakened against most of its major rivals following a U.S. weekly jobless report that came in line with expectations. A weaker greenback tends to push up dollar-denominated gold prices. Gold for August delivery rose 0.8%, or $7.70, to end at $934.90 an ounce on the Comex division of the New York Mercantile Exchange. Gold had fallen 2.7% over the previous two sessions.
Gold's Downside Moves Don't Detract from Bullish Run Gold fell by $25 yesterday but has found reasonable support at $930/oz. In the short term, the daily momentum would appear to be bearish for gold and although it may experience a temporary bounce in the next day or two, a move to the downside should be expected, possibly falling as low as $905/oz. These short term factors should not detract from the longer term bullish run that gold will likely see in the seasonally bullish autumnal period as investors continue to hedge against deeply unpredictable currency and equity markets. A new high of $1,033/oz should be reached due to continuing risk aversion. The very poor US bond and treasury auctions, with demand for the unprecedented large issuance this week waning, does not bode well for the dollar in the coming weeks.
Gold to Revisit $1,000 on Falling Supply, World Council Says Gold will revisit $1,000 as investment demand and jewelry purchases rebound and supply decreases annually, a senior World Gold Council official said. “On the supply side, gold mining production has been decreasing at a rate about 4 to 5 percent per year after reaching a peak production in 2001,” Jason Toussaint, managing director of exchange traded gold, said today. “Even if demand stays the same, prices must go up.” He declined to give a timeframe for the increase.
Gold Rises as Dollar’s Drop, Equity Rally Boost Commodities Gold rose for the first time in three days as the dollar dropped and equities climbed, enhancing the appeal of commodities. Silver also gained. The greenback fell as much as 0.6 percent against a basket of six major currencies. The Standard & Poor’s 500 Index approached a nine-month high. Eighteen of 19 raw materials in the Reuters/Jefferies CRB Index advanced. “The dollar is likely to go lower, and thus gold higher today,” David Thurtell, an analyst at Citigroup Inc. in London, said in an e-mail.
A Very Few Elements of Gold Strategy Gold strategy depends on age, wealth, anticipated labor income, one’s expectations, and risk preferences, among other things. A complete gold strategy covers alternative metals, alternative ways to own gold, and shares in metal and mining companies. I will discuss none of this. One finds plenty of articles on those things on the internet. I’m going to mention only a very few elements of gold strategy that have to do with the general position that I think is appropriate, which is being long or owning gold as a long-term holder. The long-term means years. These elements suggest that one may well want to have a core position in gold.
Gold black market flourishing in China With the soaring gold prices luring millions of small investors into the bullion market, a new illegal trade is also thriving in China. With more and more people, lured by the rising yellow metal prices, wishing to make a profit from the bullion market, black market has become rampant in China now. Hundreds of underground gold dealers are luring investors who are keen on punting in the yellow metal, but stumped by the high entry barriers set by the gold bourses.
Alan Grayson: "Which Foreigners Got the Fed's $500,000,000,000?" Bernanke: "I Don't Know."
US Dollar Strength to Come Before Devaluation? The basic premise of this argument is the observation that when commodities and stock markets fall then the dollar is up, and vice-versa. What we have at the moment is a bear market rally and that has weakened the dollar. But Black Swan Capital thinks we are in for a double-dip recession with the Chinese recovery story going horribly wrong and energy markets going into a fresh crisis. It sees a capitulation in emerging market stocks and an exit of cash, and a large risk of a European banking crisis, both of which would strengthen the US dollar and bonds as a safe haven.
The next great bailout: Social Security Fortune's Allan Sloan takes a look at the troubled retirement program, why it's more important now than ever - and how lawmakers can repair it. In Washington these days, the only topics of discussion seem to be how many trillions to throw at health care and the recession, and whom on Wall Street to pillory next. But watch out. Lurking just below the surface is a bailout candidate that may soon emerge like the great white shark in Jaws: Social Security. Perhaps as early as this year, Social Security, at $680 billion the nation's biggest social program, will be transformed from an operation that's helped finance the rest of the government for 25 years into a cash drain that will need money from the Treasury. In other words, a bailout.
Bernanke May Have to Sacrifice Lending Powers or Independence The financial-overhaul plan before Congress leaves the Federal Reserve in the business of lending to everyone from General Electric Co. to investors in student loans. That makes it harder for Chairman Ben S. Bernanke to keep Congress from second-guessing what he does. Bernanke is trying to deflect a bill, co-sponsored by 276 members of the House of Representatives, that would require audits of central bank operations, including monetary policy decisions, by the Government Accountability Office. Audits wouldn’t be “consistent with independence,” Bernanke said at a Kansas City town hall meeting July 26. “I don’t think the American people want Congress running monetary policy.”
Ron Paul: Driving Ben Bernanke Crazy!
Minnesota's small banks on the brink Noah Wilcox's family has owned and operated Grand Rapids State Bank since 1920 and, as he watched colleagues and rivals plunge into Minnesota's hot real estate market over the past decade, he recalled a comment a friend in the business once made: "Real estate is the cocaine of the banking business." Today, even as the world's biggest banks show signs of recovery, many of the community banks that anchor the nation's Main Streets are paying the price for over-indulging on housing, retail and office projects.
Senate Probes Banks for Meltdown Fraud A Senate panel has subpoenaed financial institutions, including Goldman Sachs Group Inc. and Deutsche Bank AG, seeking evidence of fraud in last year's mortgage-market meltdown, according to people familiar with the situation. The congressional investigation appears to focus on whether internal communications, such as email, show bankers had private doubts about whether mortgage-related securities they were putting together were as financially sound as their public pronouncements suggested. Collapsing values for many of those securities played a big role in precipitating last year's financial crisis.
Fed Holdings of Treasuries For Central Banks Tops $2 Trillion The Federal Reserve’s custodial holdings of Treasuries for overseas accounts including foreign central banks reached $2 trillion for the first time. The holdings rose by $5.38 billion, or 0.27 percent, to $2.001 trillion in the week ended July 29, according to data released today by the Federal Reserve Bank of New York. Custodial holdings have climbed 18 percent this year, after surging 39 percent in 2008, the data shows.
Treasuries Rise as Higher Yields Bolster Note Auction Demand Treasuries rose after the highest seven-year note yields in more than a month bolstered demand at the government’s auction of a record $28 billion of the securities. The debt drew a yield of 3.369 percent, below the median forecast of 3.394 percent in a Bloomberg News survey of eight of the Federal Reserve’s primary dealers. The sale follows record auctions of two- and five-year notes the past two days that attracted lower-than-forecast interest from investors.
Weak Treasury Auctions Raise Worries About US Debt Burden The US Treasury sold $39 billion in five-year debt Wednesday but the auction drew poor demand, raising worries over the cost of financing the government's budget deficit.
Fed walks the tightrope The sound money set remains concerned that the Federal Reserve's emergency actions to corral collapse could ignite hyperinflation. In particular, they point to the explosion of excess reserves inside the banking system, which they call dry tinder just waiting for the spark of recovery. Bill Dudley, president of the Federal Reserve Bank of New York, says this isn't an issue because the Fed now pays interest on excess reserves. It's a good argument, but only in the short run.
pt 1/2 Gerald Celente on One Radio Network 24 July 2009
Ben Bernanke Is Wrong Again This video would be a good laugh if not for the fact that it centers around one of the most powerful men in the world's propensity to be wrong in case after case. I sincerely laughed at the "we've never had a nationwide drop in housing prices" line since it was one of my big beefs against the financial punditry (which I didn't realize, until I saw these clips, Ben was such a part of) - even before I started the blog. Just because something has not happened in the past does not mean it could not happen. And speaking of "it never happened before," was anyone measuring home prices in the 1930s?
Why Ben Bernanke’s Incomplete ‘Exit Strategy’ Could Lead to a Decade-Long Downturn At its most basic level, the U.S. Federal Reserve’s so-called “exit strategy” is designed to let government bailout and liquidity programs unwind on their own, as markets return to a state of “normalcy.” But what investors don’t realize is that without an exit strategy that includes plans for unwinding insolvent mortgage giants Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) - now more accurately defined as government-sponsored hedge funds - recent market gains will be limited and will likely reverse. If those setbacks cause the nascent U.S. housing market rebound to stall, it could even lead to a decade-long downturn.
Bernanke explains Fed’s new openness ‘Town hall’ session breaks with precedent Ben Bernanke has explained his decision to turn the normally secretive US Federal Reserve into something of an open house, saying his unusually large number of recent public appearances are the result of the “extraordinary” times the country faces. The Fed chairman has turned up at everything from a 60 Minutes television interview to a Kansas City town hall session over the past few weeks, prompting some to wonder if he is trying to ensure he is re?appointed when his four-year term ends in January.
Reappoint Ben Bernanke? No Way Should we have re-elected Jimmy Carter in 1980 for his stewardship of the US economy? Of course not. Should Ben Bernanke be reappointed as Chairman of the Federal Reserve for his stewardship of the banking and credit systems? Of course not. Certainly, the Fed under Mr. Bernanke is not solely responsible for the environment that produced the biggest credit bubble and credit deflation of our lifetimes, but Jimmy Carter wasn't solely responsible for the late-1980s inflationary spiral. Mr. Carter was not re-elected, and similarly Mr. Bernanke should not be reappointed. Simply put, how can Washington even consider keeping Mr. Bernanke as Fed Chairman when the US banking system effectively failed on his watch?
And All the Kings' Horses and All the King's Men... As we enter August we are getting closer and closer to real disruptions with the US dollar, as well as problems with the British pound, as both economies feel the sting of rising inflation within a progressive depression. The stimulus package has exhausted itself for this year so the economy in the US can at best stay neutral at a minus 4% of GDP. The causes of our depression have yet to be addressed as the Treasury and the Fed flood banking, Wall Street and insurance companies with funds to keep them afloat. The deterioration continues unabated as Wall Street and banking report higher earnings by laying off workers and by playing accounting games.
New York details big bonuses at bailed-out banks New York: Citigroup, which got $45 billion in govt. money, paid over $5 billion in bonuses Citigroup Inc., one of the biggest recipients of U.S. government bailout money, gave employees $5.33 billion in bonuses for 2008, New York's attorney general said Thursday in a report detailing the payouts by nine big banks. The report from Attorney General Andrew Cuomo's office focused on 2008 bonuses paid to the initial nine banks that received loans under the government's Troubled Asset Relief Program (TARP) last fall. Cuomo has joined other government officials in criticizing the banks for paying out big bonuses while accepting taxpayer money.
Big bonuses at bailed-out banks Citigroup Inc., one of the biggest recipients of government bailout money, gave employees $5.33 billion in bonuses for 2008, New York's attorney general said Thursday in a report detailing the payouts by nine big banks. The report from Attorney General Andrew Cuomo's office focused on 2008 bonuses paid to the initial nine banks that received loans under the government's Troubled Asset Relief Program last fall. Mr. Cuomo has joined other government officials in criticizing the banks for paying out big bonuses while accepting taxpayer money.
Tarp banks award billions in bonuses Citigroup and Merrill Lynch, which lost $55bn in 2008, between them paid 1,400 employees bonuses of $1m or more each, according to a New York state report, released on Thursday, on banks propped up with taxpayer funds. The study, compiled by Andrew Cuomo, New York attorney-general, showed that JPMorgan Chase and Goldman Sachs, which both finished in the black last year, paid the most million-dollar bonuses - 1,626 and 953, respectively. However, the totals at a profitable bank such as Goldman were nearly matched by two of the year’s biggest losers on Wall Street. Citi, which suffered a $27.7bn loss, paid million-dollar bonuses to 738 employees. Merrill, which lost $27.6bn, paid 696 bonuses of $1m or more.
The people's stimulus package With $2 bills and "buy local" promotions, towns are launching their own stimulus efforts to keep local merchants in business. As the recession continues decimating Main Street businesses, communities are taking matters into their own hands. From Bowdoinham, Maine, to Chico, Calif., and dozens of cities in between, activists have launched campaigns to stimulate their local economies. "The grassroots efforts have had more effect on my business than the stimulus," says Tanja von Kulajta Winn, owner of RSVP, a stationary and gifts store in Plymouth, Mich. "I have not received anything from Washington." The names and details vary, but the campaigns all share one goal: Educating shoppers about the power their spending has to shape their local business landscape.
China Can't Take Away The Punch Bowl Monday's 5% drop in the Shanghai market was a stark warning to the credit-happy central government: do a U-turn on cheap money, and this is what you get. So the government is already sending out signals that it won't be tightening any time soon. WSJ: Chinese bank stocks were higher after the People's Bank of China announced it would use more market-oriented measures to guide credit growth rather than administrative controls. Industrial & Commercial Bank of China rose 3.3% and China Construction bank jumped 6% in Shanghai, while their Hong Kong-listed shares gained 0.4% and 0.3% respectively.
How the Once-Respected Fannie Mae and Freddie Mac Helped Fuel the U.S. Real Estate Bubble Fannie Mae, originally designated as a “government-sponsored enterprise” (GSE), was born in 1938 as a child of U.S. President Franklin Delano Roosevelt’s Great-Depression-fighting “New Deal,” and was designed to stimulate mortgage lending. Fast-forward 30 years. In 1968, Fannie Mae shares were sold to the public to help finance the Vietnam War. Freddie Mac, also a GSE, was created by Congress in 1970 to compete with the growing - but monopolistic - Fannie Mae. Both firms were successful, profitable and made steady money by charging a fee to guarantee mortgage-originators against homeowner defaults. Their combined guarantees totaled almost $3.7 trillion at the end of 2008.
Obama's Approval Has Crashed Among Middle-Income Americans in Past Three Weeks, Says Gallup Poll A new Gallup poll shows that President Barack Obama's job approval rating has dropped ten points in just three weeks among middle income earners--those making between $60,000 and $89,988 per year. Obama’s support among the elderly (those 65 and older) is also dropping, despite an endorsement of his health care plan from AARP, the powerful senior citizens lobby.
U.S. States Face Ongoing Deficits, Rockefeller Institute Says U.S. states have identified more than $51 billion in revenue deficits for the next fiscal year less than a month after wrapping up their annual budgets, the Nelson A. Rockefeller Institute of Government reported. Among the worst projections for fiscal 2011 are California at $15 billion, New Jersey at $6 billion and Florida at $5 billion. In the current fiscal year, U.S. states totaled $160 billion in budget gaps, the report said. “States push large parts of fiscal problems into later years,” Donald J. Boyd, senior fellow at the institute, told a Governmental Research Association convention in Washington, D.C., July 27. “It can take three or four years before finances recover, even if economic recovery comes sooner.”
Be Careful what you Wish For... Recent polls now give Government's handling of the economy a negative rating because Government's 100 days of glory has not given the promised quick boost to the economy. The Democrats and their media friends, after blaming Bush for all the world's ills for 6 years, have begun to blame the Republicans in Congress for watering down the stimulus packages and attempting to block Cap and Trade and Health Care for no good reason: all in preparation to justify the failure of their massive Socialist policies, going into the next election. Unfortunately for the American public, sound economics teaches that regardless of how fast the money is spent or how much oversight is provided by bureaucrats, the money doled out by the stimulus plan will be mostly political and therefore wasted. It will have a detrimental impact on the economy not only in the short term, but especially in the long term. That is the nature of profligate government spending. Besides, very little of the money is getting into the hands of the people.
Danger on road ahead Nevada survived 2009’s yawning budget gap with one-time fixes. Without those, 2011’s outlook looks increasingly rocky Bailing wire and Band-Aids last only so long. When it comes to fixing the state’s financial affairs, it’s no different. The state leaned heavily on temporary tax increases and one-time federal stimulus funding to bridge the state’s $1.4 billion budget gap this year, but those stopgap moves have led to forecasts of an even larger deficit in 2011. More than $1 billion in tax hikes will expire in two years — a key condition for Senate Republicans’ support of the tax increases. The more than $500 million in federal stimulus money used to pay for ongoing expenses this time isn’t expected to be there when the next state budget is hammered out.
HyperInflation & The Bond Market (1 of 4) 6 2 2009
HyperInflation & The Bond Market (2 of 4) 6 2 2009
HyperInflation & The Bond Market (3of 4) 6 2 2009
HyperInflation & The Bond Market (4 of 4) 6 2 2009
Contractors wait for U.S. stimulus to create jobs Conditions in the U.S. construction industry have improved since President Barack Obama signed the economic stimulus plan into law in February, but employment in the battered sector needs more help, an industry trade group said on Thursday. A survey of 900 construction and construction-related companies found just 22 percent had won stimulus-funded contracts, the Associated General Contractors said. More than a third of those plan to hire new employees or rehire workers they had laid off. Nearly 60 percent said they had been able to retain positions because of the work.
May-June joblessness up in 90% of metro areas More than 90% of the nation's largest metropolitan areas saw their unemployment rates climb in June from the previous month. Some of the biggest increases hit college towns, where the annual summertime exodus of students causes bars, restaurants and other businesses to cut staff. The Detroit area, hit hard by manufacturing layoffs tied to the beleaguered auto industry, also got stung in June.
Unemployment spreads distress in U.S. home loans Cities in the U.S. Sun Belt states of California, Florida, Nevada and Arizona dominated the record foreclosure spree in the first half of the year, but distress in other regions emerged as joblessness spread, RealtyTrac said on Thursday. Metro areas with populations of at least 200,000 in those four states accounted for 35 of the 50 highest foreclosure rates. Mortgages have failed the fastest in the areas with the greatest overbuilding, purchases by speculators and reliance on riskier loan products to improve affordability.
Las Vegas, Fort Myers, Florida Lead U.S. in Defaults Las Vegas and Cape Coral-Fort Myers, Florida led U.S. metropolitan areas in foreclosures in the first half of the year as unemployment and falling home prices forced home-loan defaults, RealtyTrac Inc. said. The Las Vegas area had the highest rate of foreclosure filings, with 7.5 percent of households receiving a default or auction notice or being seized by a lender. That rate was six times the national average. The Cape Coral-Fort Myers region, on Florida’s Gulf Coast, was second, with a rate of 7.2 percent.
Foreclosures: How bad is your city? Foreclosures are easing in some of the worst hit metro areas, but watch out for the next wave of filings to start crashing in unexpected cities. Sun Belt cities dominated the list of metro areas with the biggest foreclosure problems during the first six months of 2009. Cities in just four states -- California, Florida, Arizona and Nevada -- captured 29 of the top 30 places with the highest foreclosure rates, according to a report issued by RealtyTrac on Thursday. Greeley, Colo., was the only outsider, coming in at 29th. The good news is that some of the worst hit spots, such as the Central Valley cities in California, showed some improvement, according to James Saccacio, chief executive officer of RealtyTrac.
Lucrative Fees May Deter Efforts to Alter Troubled Loans This week, the Obama administration summoned mortgage company executives to Washington to demand they move faster to lower payments for homeowners sliding toward foreclosure. Treasury officials called on the companies to hire and train more people quickly to field applications for relief. But industry insiders and legal experts say the limited capacity of mortgage companies is not the primary factor impeding the government's $75 billion program to prevent foreclosures. Instead, it is that many mortgage companies are reluctant to give strapped homeowners a break because the companies collect lucrative fees on delinquent loans.
pt 2/2 Gerald Celente on One Radio Network 24 July 200
Foreclosures Spread As Unemployment Rises The foreclosure crisis has entered a new phase. It’s spreading beyond the wreckage of the housing bubble to metro areas in Oregon, Idaho, Utah, Arkansas, Illinois, and South Carolina where unemployment is rising, according to RealtyTrac’s Midyear 2009 Metropolitan Foreclosure Market Report released this morning. California, Florida, Nevada, and Arizona continue to have the highest foreclosure rates in the nation. But some parts of Michigan, Ohio, Indiana, and California are seeing improvement, the report said. “While some of the markets that had the highest saturation of foreclosures over the past few years have seen declining rates, new markets like Provo, Utah, and Boise, Idaho, have seen large increases,” James J. Saccacio, chief executive officer of RealtyTrac said in a prepared statement. “As unemployment rates increase in different parts of the country, it’s very likely that we’ll see similar patterns develop elsewhere.”
Jobless claims increase Initial jobless claims up 25,000 in week, but 4-week moving average declines. The number of Americans collecting long-term unemployment aid fell to the lowest in three months in mid-July, according to government data that implied a slowing pace of layoffs as the economy stabilizes. The Labor Department said that while initial claims for state unemployment insurance benefits rose by 25,000 to a seasonally adjusted 584,000 last week, the number of people still on benefit rolls after collecting an initial week of aid fell by 54,000 to 6.20 million in the week to July 18, the lowest since early April.
Illegal Immigrants Account for $10.7 Billion of Nation’s Health Care Costs, Data Show House Speaker Nancy Pelosi (D-Calif.) said that “illegal immigrants are not covered” in the health care reform legislation that is now working its way through House committees. But when asked about illegal immigrants who go to public hospitals for care, Pelosi told CNN’s State of the Nation on Sunday the law requires that they be treated. The cost of treating illegal aliens amounts to nearly $11 billion a year, according to calculations done by the Federation for American Immigration Reform (FAIR), a non-profit group that opposes illegal immigration. And that cost is not expected to go away if a health insurance reform bill becomes law.
Obama Loses The Healthcare Debate From a purely political standpoint Obama has lost the healthcare message war. WSJ: Support for President Barack Obama's health-care effort has declined over the past five weeks, particularly among those who already have insurance, a Wall Street Journal/NBC News poll found, amid prolonged debate over costs and quality of care. In mid-June, respondents were evenly divided when asked whether they thought Mr. Obama's health plan was a good or bad idea. In the new poll, conducted July 24-27, 42% called it a bad idea while 36% said it was a good idea.
Dollars chase influence in U.S. healthcare debate Healthcare companies are spending millions of dollars and marshaling armies of lobbyists to influence a landmark debate in the U.S. Congress that could dramatically change the way they do business. Drugmakers, doctors, insurers and hospitals have opened their wallets, spending more than $1 million a day to buy a voice in the escalating political battle over what could be the broadest revamp of healthcare laws in decades. "I hate to use the word free-for-all, but this bill is in play and everyone wants a piece of it," said Bill Buzenberg, executive director of the Center for Public Integrity, a nonprofit investigative group.
10 Things You're Not Supposed To Know About the swine-flue vaccine. Let's not beat around the bush on this issue: The swine flu vaccines now being prepared for mass injection into infants, children, teens and adults have never been tested and won't be tested before the injections begin. In Europe, where flu vaccines are typically tested on hundreds (or thousands) of people before being unleashed on the masses, the European Medicines Agency is allowing companies to skip the testing process entirely.
In the 70s, Obama's Science Adviser Endorsed Giving Trees Legal Standing to Sue in Court Since the 1970s, some radical environmentalists have argued that trees have legal rights and should be allowed to go to court to protect those rights. The idea has been endorsed by John P. Holdren, the man who now advises President Barack Obama on science and technology issues. Giving “natural objects” -- like trees -- standing to sue in a court of law would have a “most salubrious” effect on the environment, Holdren wrote the 1970s.
EPA Cover-Up The Green Rope-A-Dope Here's what I wrote in last year's column titled "Global Warming Rope-a-Dope" (12/24/2008): "Once laws are written, they are very difficult, if not impossible, to repeal. If a time would ever come when the permafrost returns to northern U.S., as far south as New Jersey as it once did, it's not inconceivable that Congress, caught in the grip of the global warming zealots, would keep all the laws on the books they wrote in the name of fighting global warming. Personally, I would not put it past them to write more." On June 28, 2009, the House of Representatives, by a narrow margin (219–212), passed the Waxman-Markey bill. The so-called "cap and trade" bill has been sold as a system for cutting greenhouse gas emissions in the struggle against global warming. There's a full-court press on the U.S. Senate to pass its version of "cap and trade."
House rejects most Obama weapons cuts House rejects most Obama weapons cuts, retreats on F-22 fighter The Democratic-controlled House is going along with Defense Secretary Robert Gates' plans to kill the over-budget F-22 fighter jet, but is casting aside his efforts to cut off several other big ticket items. Despite objections and veto threats from the White House, a $636 billion Pentagon spending bill set for a vote Thursday contains money for a much-criticized new presidential helicopter fleet, cargo jets that Gates says aren't needed, and an alternative engine for the next-generation F-35 Joint Strike Fighter that the Pentagon says is a waste of money.
Rule by fear or rule by law? ...How the Government is preparing for martial law. "The power of the Executive to cast a man into prison without formulating any charge known to the law, and particularly to deny him the judgment of his peers, is in the highest degree odious and is the foundation of all totalitarian government whether Nazi or Communist." Your fiat money at work is building bi-level prison cars (by the thousands according to the San Francisco Chronicle) built by KBR (Kellogg, Brown and Root, a subsidiary of Halliburton). These were parked on the tracks behind a pecan orchard managed by one of my friends in Texas a few months back. They were completely hidden from the highway that paralleled the orchard. The Fetid Feds only moved them at night. It has been reported that some of these beauties have been pre-positioned in each and every state.
Cops suspended for Obama check Two DeKalb County Officers are being investigated for allegedly performing a background check on President Barack Obama. Officers Ryan White and C.M. Route have been placed on administrative leave pending the outcome of the investigation, according to DeKalb County spokeswoman Sheila Edwards. Edwards said the two patrol officers have been with the department for about two years. The incident occurred on July 20, according to DeKalb County officials.
Lou Dobbs: Just produce birth certificate CNN anchor says Obama's presidential actions could be 'illegal' After being attacked by groups ranging from the Southern Poverty Law Center to Media Matters for relentlessly calling on Barack Obama to prove his eligibility for the office of the presidency, CNN's Lou Dobbs wasn't backing off on either his syndicated radio or his television program today. Once again, he renewed his calls for Obama to produce his long-form birth certificate that would settle doubts about where he was born and offered that the president's actions could actually be "illegal." Dobbs took on the special-interest groups demanding that CNN shut him up.
Part 1: Freedom Watch w/ Ron Paul, Peter Schiff, Sheriff Mack, Walter Block (07/29/2009)
Part 2: Freedom Watch w/ Ron Paul, Peter Schiff, Sheriff Mack, Walter Block (07/29/2009)
Part 3: Freedom Watch w/ Ron Paul, Peter Schiff, Sheriff Mack, Walter Block (07/29/2009)
Part 4: Freedom Watch w/ Ron Paul, Peter Schiff, Sheriff Mack, Walter Block (07/29/2009)
Part 5: Freedom Watch w/ Ron Paul, Peter Schiff, Sheriff Mack, Walter Block (07/29/2009)
Part 6: Freedom Watch w/ Ron Paul, Peter Schiff, Sheriff Mack, Walter Block (07/29/2009)
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If you study prophecy, you'll find this most interesting
Did Jesus actually reveal name of the 'antichrist'? Viral video makes Hebrew word connection to latest White House occupant
A One World Currency is Inevitable I know it sounds impossible, but the world is being forced to a point of having to implement a one world currency. Or at least a one world currency among the major economies – maybe Tunisia might escape. Started with the USD. Why do I say that? Well, if you follow the evolution of the USD since roughly the end of WW2, it gradually became the world reserve currency, and that was intended. It started with the Breton woods agreement, and also during WW2 when the European allies currencies were collapsing as Hitler was conquering Europe.
U.S. Dollar Dying, Gold Gleaming Washington’s $2 trillion deficits, record-shattering borrowing by the U.S. Treasury and seemingly endless money-printing at the Fed make a decline in the value of the greenback a virtual certainty. In our view, the only question that remains is the timing: WHEN will the dollar decline begin? To get an answer, take a look at the historical cycle in the U.S. dollar to the right. Note how closely the actual value of the dollar (the black line) has followed its historical cycle based on data going all the way back to 1912 (the red line).
China, Dubai join hands to boost gold trade China, which is emerging as the leader in gold consumption almost beating Indian for the top slot, now eyeing Dubai to boost its yellow metal trade. In an apparent bid to win the numero uno position in gold consumption, China has started exploring opportunities in Dubai. China’s efforts bore fruit when the DMCC participated in the Asia Gold Focus 2009 Conference in Guangzhou, China, where investment strategies for the Dubai gold market was highlighted. At the meet, it was observed that Chinese gold and jewellery manufacturers are increasingly eager to work closely with Dubai-based companies.
Gold Lacks Relative Strength Gold is not going to breakout anytime soon. Its relative strength or lack thereof, is the chief reason. Gold has been rising recently, only due to the positive tide in most markets. In the chart below, you can see that the various ratio charts have formed a negative divergence to Gold. Gold has not only been weak against commodities and stocks but also foreign currencies. On the positive side, the ratio charts have formed a serious long-term positive divergence. Relatively speaking, Gold has bested its 2008 highs in most forms, but not in US dollars.
D-I-V-O-R-C-E price relationship between gold and silver Gold will still be gold, of course, and will remain as it has been since the dawn of civilization, valued by the world's inhabitants for its beauty and rarity. As will silver. Each will exist forever, as they have existed through the ages. Each will rise and fall in price based upon supply and demand and investment flows and the presence (or absence) of manipulation. Nothing can change that. What will change is the price relationship they have shared in everyone's living memory. They are about to begin separate journeys. . . . . . . . . It is the coming end of the silver manipulation that will set silver free to begin its own new price life.
The Coming Market Crash A year ago at Cambridge House when asked whether the economy was going to rebound I responded, "That light at the end of the tunnel is just the next train. Get out of the way!" Another commentator on stage, who helped manage about $10B at the time, responded that things would get better and not to worry. What happened? Lehman Brothers, AIG, Fannie Mae, Freddie Mac, Bank of America, Merrill Lynch, Citigroup, the Adjusted Monetary Base exploded from $800B to $1,800B as the Federal Reserve fails with quantitate easing, unemployment began to soar and the DOW crashed from 12,000 to 6,500 or 13.95 gold ounces to 7.
After the fall The collapse in world trade has stopped, but there is no sign of a recovery WORLD trade has been one of the worst casualties of the global economic slowdown and the source of some particularly startling figures. Towards the end of last year trade all but collapsed. According to the World Bank, the value of exports from a sample of 65 countries accounting for 97% of world trade rose by 20.2% in September, compared with a year earlier. But by November exports were worth 17.3% less than a year earlier, before slumping by a whopping 32.6% in the year to January. In March the managers of South Korea’s Busan port, long one of the world’s busiest, said that it had run out of space to store nearly 32,000 empty containers. The Baltic Dry Index, which measures demand for the ships that transport bulk goods such as iron ore or coal, fell from 11,793 at the end of May last year to a pitiful 663 in early December.
Ben Bernanke - "I Am Answerable to the American People."
Niall Ferguson: Is U.S. - China Economic Marriage on the Rocks? As the Chinese strategy was based on export-led growth, they had no desire to see their currency appreciate against the dollar. So they intervened consistently in currency markets, and as a result have now got international reserves totaling $2.1 trillion. Around 70 percent of these are in dollar-denominated securities, and a large proportion of these are in U.S. government bonds. The unintended effect of this was to help finance the U.S. current account deficit at very low interest rates. Without that, it's hard to believe that U.S. financial markets would have bubbled the way they did in the period 2002-7. The big question is now whether or not Chimerica is a marriage on the rocks.
Washington learns to treat China with care The economic crisis has shifted the balance of power, so the U.S. has stopped lecturing its biggest lender America met with its lead banker this week and was forced to answer plenty of tough questions about its spending habits. "Attention should be given to the fiscal deficit," China's finance minister, Xie Xuren, warned the U.S. And while U.S. officials gamely lobbed back the by-now-familiar refrain that China needs to boost its domestic consumption, rather than relying on exports to the U.S. for growth, it was clear which side was playing defense at this latest round of the three-year-old Strategic and Economic Dialogue.
China Seeks Assurances That U.S. Will Cut Its Deficit China sought and received assurances from the Obama administration that the United States would reduce its budget deficit once an economic recovery was under way, a senior Chinese official said Tuesday at the end of two days of high-level talks between the countries. “Attention should be given to the fiscal deficit,” said Xie Xuren, the Chinese finance minister. He said Treasury Secretary Timothy F. Geithner had assured the Chinese that once the economy rebounded, the deficit would gradually come down from its current record levels.
Chinese bubble fears as funds flow into IPOs Shares in Shanghai and Hong Kong tumbled on Wednesday as investors snapped up two newly listed mainland construction groups while selling down the rest of the market after reports that China’s central bank might rein in bank lending. Shares in China State Construction Engineering rose by as much as 90 per cent on their debut before closing 56 per cent stronger in Shanghai. China’s largest housebuilder had last week raised Rmb50.2bn ($7.34bn) in the world’s biggest initial public offering since Visa raised $19bn in March 2008.
USGovt Yuan Bond Threat The tables are fast turning against the deeply indebted USGovt officials. USA Inc is in deep trouble. Its productive engines in both finance and industry are either wrecked or sputtering, even as its debt burden grows exponentially. Debt default litters the landscape. Next its sovereign bonds will be have to be sold to some extent outside the US$ Sphere, which will put at great risk its stock, namely the USDollar itself. Let’s call them USGovt Dragon Bonds. The custodians desperately seek creditors to supply much needed capital in order to fund the gigantic and growing USGovt debts, which by the way are grossly understated. The last resort is to monetize the USTreasury Bond issuance, a process well along. With the aid of the USDollar Swap Facility, the USFed has been able to secretly bid on USTBonds from foreign soil, have it appear like foreign bids, and conceal the continued and broadening monetization initiative. The United States is boldly defying the creditor nations, printing money, and buying its own debt.
China Debt Bubble Looming According to the latest reports from China, the country’s GDP is growing at 8% a year. This is an amazing achievement and helps to bolster the argument that China will help lead the global economy out of its recession. Since it looks like exports will be the major driver of growth for the U.S., selling goods and services to many emerging economies like China it pays to dig a little deeper to understand this growth phenomenon.
How do you say 'bubble' in Mandarin? Chinese stocks are on fire and banks are lending like there's no tomorrow. Sound familiar? But China needs to remain healthy. The U.S. can't afford for it to slump. Is the Chinese economy in the same state as the American economy was in the summer of 2007? In other words, all pumped up and ready to pop? If so, it might be time to learn how to say bubble in Mandarin. And that could be bad news for those hoping for a sustainable U.S. recovery. The Shanghai Composite Index plunged 5% Wednesday, while Hong Kong's Hang Seng dipped nearly 2.4% on growing concerns that China's robust period of growth could soon stall.
Banks Reopen Global Casino Investment banks, of all things, are making serious money again, thanks in part to government aid. Ironically, they are benefiting from the crisis they helped to create. As profits go up, so do salaries -- only this time, it's the taxpayers who are shouldering the risks. Anshu Jain, 46, listened stoically and silently to the remarks of shareholders at the annual meeting of Deutsche Bank at the end of May. Many were troubled by the fact that the bank had reported its biggest ever loss in 2008, €3.9 billion ($5.6 billion), for which Jain, as its top investment banker, was responsible.
Federal Reserve for Dummies
Treasury finally getting tough on banks A $340 million warrant repurchase from credit card giant AmEx shows the Treasury, under pressure from Congress, is holding big banks' feet to the fire Don't look now, but the government has actually strung a couple modest victories together in its dealings with big banks. American Express, the New York-based credit card giant, said Wednesday it paid the Treasury Department $340 million to repurchase the warrants the bank issued in January after borrowing $3.4 billion under the Troubled Asset Relief Program. AmEx was among 10 banks that repaid their TARP loans last month. The government accepted the warrants, which confer the right to buy shares later at a specified price, to compensate taxpayers for the risks they took on in the bailout of the financial system.
Barney Frank Threatens Banks If They Don't Modify More Mortgages You have to love Barney Frank's bull-in-a-China-shop approach to dealing with the financial crisis. When he's not busy getting into fights with Erin Burnett on CNBC, he's not afraid to wield a big stick (and speak loudly) to get his way. Yesterday he was banging away at bonuses again. The latest: he's pissed at the banks for not doing more on the loan modification front.
Street Fighting Man Longtime readers know my standard response to questions about the severity of the Greater Depression: It's going to be worse than even I think it's going to be. "Coming Collapse" books will undoubtedly accumulate into an entire genre in the next few years, as they did a generation ago. This time it's not just fear mongering, although things won't get as bad as in James Kunstler's book The Long Emergency and certainly not as rough as in the movies Road Warrior or I Am Legend. But it's a good bet that a lot more is going to change than just some features of the financial system. Let's engage in a little speculation as to the shape of things to come.
Insiders are selling Corporate insiders more bearish than at any time in nearly two years Corporate insiders have recently been selling their companies' shares at a greater pace than at any time since the top of the bull market in the fall of 2007. Does that mean you should immediately start lightening your equity exposure? It depends on whom you ask. But, first, the data. Corporate insiders are a company's officers, directors and largest shareholders. They are required to report to the SEC whenever they buy or sell shares of their companies, and various research firms collect and analyze those transactions.
Obama and Company say... All We Need Is A Little Help From Our Foreign Friends. . . . At the end of its 2008 fiscal year, ending in September, the government reported that foreign creditors held 48% of US public debt. In dollar terms, that was $2.8 trillion in IOU’s. What’s more, they absorbed 74% of the $765 billion borrowed by the US government in 2008. But that’s nothing new. Foreign creditors have been on a buying extravaganza since 2002, sucking up 73% of public debt net new issuance over that period, a whopping $1.8 trillion of government IOU’s.
Obama defends record on economy President Obama said during an appearance in North Carolina on Wednesday that the United States may be seeing the "beginning of the end of the recession" as he gave an impassioned defense of his administration's response so far to the economic crisis. Mr. Obama also gave Congress a new deadline to finish a bill on health care reform, saying he expects a vote on final passage by late September or mid-October. The president told a town hall meeting in Raleigh that he was "startled" by a Newsweek magazine cover that said "the recession is over." The president said that while government action has "stopped the free fall," the country still is shedding jobs and that "tough times aren't over."
Rachel Maddow: Rep. Barney Frank Takes On Credit Card Cos.
Fed Exit Strategy? Federal Reserve chairman Ben Bernanke used this week as an opportunity to address the Fed's exit strategy of removing the bank reserves that have been pumped into the banking system since September of last year. Of course, this will not happen until the Fed and our political leaders feel that both the banking system and the economy is on considerably sounder footing and tighter monetary policy is less likely to toss the economy back into the ditch. I say political leaders because the Fed has lost a considerable amount of its "independence" and pressure will be a tool wielded by our politicians (especially as elections near). Given the events of this week, it is a good opportunity to review the state of the Fed balance sheet, some if its recent operations, and a few key items in Bernanke's plan to drain reserves from the banking system at the "appropriate time". I will begin with a little background info that you can also find in previous articles, but presented a bit differently here.
Bernanke's dilemma: Ignore politics Why the Fed chairman should ignore Congress and start tightening up soon. After two years of pumping money into the financial system to keep the economy afloat, Fed Chairman Ben Bernanke will have to reverse the process or risk an opposite problem: inflation. After much anticipation, he announced in July the Fed's "exit strategy" from its vast intervention, declaring it will happen "in a smooth and timely manner." It's reassuring that Fed officials are aware of the inflation risk, but their program is unlikely to succeed. Much research shows that it takes about two years for anti-inflation policy to work. That means the Fed needs to start now and stick with it.
Dead Banks Walking In recent weeks, the financial world has been dazzled by strikingly high earnings reported by our leading investment banks... or at least what we used to call investment banks. The numbers are reminiscent of another era - the one that came to a crashing end last September. Today's euphoria was keyed to the record $3.44 billion 2nd quarter profit announced by that branch office of the Treasury Department also known as Goldman Sachs. Wells Fargo, JP Morgan Chase, and State Street also chipped in with strong numbers.
Kucinich: the Federal Reserve is paying banks NOT to make loans to struggling Americans!
Dudley says credit to remain tight William Dudley, president and chief executive of the Federal Reserve Bank of New York, sought to dispel fears of ?rising inflation on Wednesday, while playing down prospects for a speedy economic recovery in the US. Mr Dudley’s remarks came against a backdrop of concerns that the expansion of the Federal Reserve’s balance sheet, easy monetary policy and aggressive fiscal stimulus would inevitably undermine the value of the US dollar. Mr Dudley also offered a fairly downbeat economic vision, noting that weak income growth would limit the pace of consumer spending, historically the biggest source of growth in gross domestic product. “Credit availability will be constrained for some time to come and this will limit the pace of recovery,” he added.
US regulator criticises Obama bank plan he Obama administration’s plan to give US states more power to protect consumers from unfair banking practices would make it more difficult and costly for large lenders to operate across the country, a financial regulator has warned. John Dugan, who oversees national banks as comptroller of the currency, told the Financial Times that the proposals to create a federal consumer protection agency and give states more leeway to crack down on unfair practices would have negative “ramifications for companies operating across state lines”.
Five U.S. Banks Are Too Big to Exist Fitch Ratings released a stunning report a few days ago which disclosed that just five banks (all U.S. banks) hold 80% of all derivatives risk: Bank of America (BAC), Goldman Sachs (GS), JP Morgan (JPM), Morgan Stanley (MS), and Citigroup (C). Keep in mind that the global derivatives market has a notional value somewhere around 30 times global GDP. Put another way, each one of these five banks has derivatives risk that is much greater than the entire value of global GDP.
CFTC Conceals the Real Problem, the Infinite Dollar Today's hearing by the U.S. Commodity Futures Trading Commission to discuss speculation in futures markets is a sham, a kangaroo court. Notice that the concern of the CFTC is only why oil went up last year. The commission has no concern as to why oil fell so abruptly from $147 down to $35 even though Don Coxe was widely quoted at the time as saying the government had instigated a massive takedown. The commission's focus is on commodities of "finite supply" and preventing speculation.
Big Brother's House Big Brother (FINRA) has given Wall Street firms the cover to restrict ProShares, Direxion, Rydex and PowerShares products from use by their clients. This is being done under the guise of protecting them but that’s a smokescreen. You see, these firms live and die off residual fee income generated by wrapped high fee products within financial plans. It’s very disruptive to fee income for FAs and clients to mess with the plan. It is thus no longer permitted to use these products, denying the investor and FA the choice and opportunities they present. Rather than allow your FA to protect you from 40-60% bear market losses, they want you to stick with these plans and keep chucking money into them. Some firms are even going so far as restricting the use of unleveraged short products which is downright silly but shows you the extent firms will go to protect the flow of fee income.
Patriot Radio News Hour: Letter from Gregory Knox to Troy Clarke, GM President
US Government Orchestrates Market Moves To Affect Massive Treasury Auctions In A Day Filled With Irony . . . . "Usually The Gold Cartel is most aggressive around pivotal market reports (like the US jobs report), TV speeches regarding US economic policy, and key market events. The event this week is the astronomical amount of debt to be issued by the US Treasury … some $235 billion. The last thing the Treasury wants is a gold price headed towards $1,000 due to the perceived relationship between gold and US interest rates … so they are all over gold."
A Piece of the Stimulus Pie Despite what you are most likely reading in the press, the folks getting bailout money are pretty sharp. They’re very good at gaming the system. More about that in a minute. First, the Dow went nowhere yesterday. Gold fell $14 to $939. And Newsweek magazine announced, “The Recession is Over.” Newsweek hedged its bets; adding that the recovery won’t be a piece of cake. Elsewhere in the news is word that the housing bust is over. The papers are reporting the first gain in housing prices in three years – based on the latest Case-Shiller numbers. Hallelujah…right? Hold on. There’s too much statistical noise in the monthly figures. They just don’t mean anything. A better measure is the annual trend. The Federal Housing Finance Agency says its index for May registered the smallest drop in 10 months…but is still headed down. (More on why it is destined to continue going down…later in the week.)
Fed: Economy has begun to stabilize at low level Economic activity continued to be weak going into the summer, although the pace of decline has moderated and activity has begun to stabilize at a low level, the Federal Reserve reported Wednesday in its latest Beige Book assessment of the economy. Labor markets in all 12 Fed districts remain slack, the Fed said, as employment continues to decline. The weakness of labor markets has virtually eliminated upward wage pressure, and wages and compensation were steady or falling in most districts.
Decentralization for Socialists: A Brief Primer One thing that consistently vexes me is the amount of time the modern statists, particularly on the Left, spend labeling the idea of decentralization and secession as "kooky." The Virginia and Kentucky Resolutions of 1798 – if they have read them or know about them – are often portrayed as quaint and unsophisticated pronouncements of provincialism; the Essex Junto and Hartford Convention are called the products of deranged Northern madmen; Andrew Jackson, they say, was on the right side when he threatened the use of force to keep South Carolinian secessionists in line in 1832; and of course, they revel in the ultimate coup de grâce to states’ rights and secession, the Northern victory in the War for Southern Independence. Who could root for the evil, "undemocratic slave power" clad in butternut, anyway?
Desperate state may sell Capitol buildings, others Under GOP plan, government would pay to lease back most of the sites Call it a sign of desperate times: Legislators are considering selling the House and Senate buildings where they've conducted state business for more than 50 years. Dozens of other state properties also may be sold as the state government faces its worst financial crisis in a generation, if not ever. The plan isn't to liquidate state assets, though. Instead, officials hope to sell the properties and then lease them back over several years before assuming ownership again. The complex financial transaction would allow government services to continue without interruption while giving the state a fast infusion of as much as $735 million, according to Capitol projections.
Clunker confusion: MPG figures Some car shoppers find that the fuel economy for their old cars has suddenly improved - making them ineligible for Cash for Clunkers. Some car shoppers are finding that their trade-in vehicles, which qualified for a Cash for Clunkers rebate last week, don't this week because of changes in the EPA's fuel economy ratings. In some cases, car buyers say, dealers are backing out of sales they've already made because the EPA changed the fuel economy figures on their trade-in. "My wife just received a call from the sales manager saying that our clunker doesn't qualify anymore, and that we could either pay the extra $4,500 or return the new car (and get our old car back)," Greg Straka wrote Tuesday on a message board at the Edmunds.com automotive Web site.
Has the Housing Market Hit Bottom? Now that a number of recent housing reports are generating some incredibly positive headlines and the global economy appears to be slowly digging its way out of an enormous hole that was created last fall when the world nearly came to an end, the burning question on the minds of millions of people is ... Has the housing market hit bottom? here is no shortage of answers. Unfortunately, most of them are far too simple and, in most cases, the individual or organization providing the answer has a bias of some sort.
Housing Recovery: Sell Now Or Your Capital Will Be Trapped As news reports of housing's "recovery" fill the mainstream media, the devastating effects of rising interest rates are never mentioned: every house with equity becomes a capital trap. Anecdotally, breathless stories of the return of multiple bids are filtering into a Mainstream Media anxious to report "proof" of a "recovery in housing. This translates into a 50% decline in bubblicious areas of the nation: Dr. Housing Bubble: Calif. Housing drops 50% from peak. As noted in the above article, fully 58% of all California home sales are foreclosure resales. In other words, "the bottom is in, now is the time to snap up bargains." Not so fast. Let's focus on the key feature of buying a house as opposed to, say, a TV: very, very few people buy a house with cash. The vast majority of real estate purchases are financed with mortgages--debt.
Is the Fed Losing the Mortgage Rate Battle? The relationship between the 10 Year and the 30 Year Mortgage spread and the actual level of the 30 Year Mortgage has broken down in the last week. The correlation has dropped to zero, meaning the Fed's Open Market purchases in the critical part of the curve may be having less and less of an impact on the ever-critical mortgage rate. Did the (mortgage) vigilantes pull a fast one?
Money, Banking and the Federal Reserve
Should They Risk Missing a Payment? You can see the fine hand of government at work in the homeowner rescue package that has been struggling to get off the ground since its inception last spring. The goal was to reduce foreclosures by lowering mortgage payments for homeowners who were struggling. But struggling how badly? For would-be lenders, that can be a tricky question to answer, and they are understandably reluctant to commit to the program without clear guidelines from the federal government. As it stands, some homeowners are being told they cannot receive help unless they fall behind on their payments. But if you were struggling yourself to stay on track, would you take the risk of skipping a payment or two just to qualify?
Subprime mortgage companies warn on U.S. foreclosures Companies that service risky residential mortgages are warning U.S. officials that a key program to slow foreclosures may push some financing costs higher and derail their efforts, said a leading subprime firm. Companies forming the Independent Mortgage Servicers Coalition, service many of the riskiest mortgages made during the housing boom, making them key players in programs to rein in foreclosures. The group collects and distributes payments on more than $700 billion in loans, according to its leader, Carrington Mortgage Services of Santa Ana, California.
U.S. Consumer Confidence Falls More than Expected The Conference Board Consumer Confidence Index™, which had retreated in June, declined further in July. The Index now stands at 46.6 (1985=100), down from 49.3 in June. The Present Situation Index decreased to 23.4 from 25.0 last month. The Expectations Index declined to 62.0 from 65.5 in June. Says Lynn Franco, Director of The Conference Board Consumer Research Center: "The decline in the Present Situation Index was caused primarily by a worsening job market, as the percent of consumers claiming jobs are hard to get rose sharply. The decline in the Expectations Index was more the result of an increase in the proportion of consumers expecting no change in business and labor market conditions, as opposed to an increase in the percent of consumers expecting conditions to deteriorate further."
'$20 Per Gallon' How the Inevitable Rise in the Price of Gasoline Will Change Our Lives for the Better Christopher Steiner looks ahead and projects, $2 at a time, how rising gasoline prices will transform civilization. During the summer of 2008, Americans found out just how much was too much to pay for gas. On July 11, a barrel of oil hit $147.27, which translated into $4.11 for a gallon of regular gas at the pump -- the highest price ever reached in the U.S. And that was just the average. In some places, the price got close to $5 a gallon. It was the Summer of Pain.
Get Ready For A $10-$15 Drop In Oil After rallying nearly 50% this year, crude prices hit a major speed bump this week as the dollar has firmed up and inventories have risen. Oil prices were "well overpriced" in the $70s and will continue to weaken in the weeks and months ahead, says James Cordier, President of Liberty Trading Group and co-author of The Complete Guide to Option Selling. Rather than increased demand, the recent rally was based mainly on speculative demand driven by government stimulus packages, Cordier says. Most notably, a flood of liquidity in China found its way into commodities and China's economy now "looks like a bubble," he says, joining a growing chorus.
Taxing the fat in your food New study argues that a tax on fattening foods could help pay for health reform and curb obesity -- and lower health costs. Others aren't so sure. Health care costs keep growing fatter in part because Americans are, too. More than 25% of the increase in medical costs between 1987 and 2001 is attributable to obesity and obesity-related conditions such as hypertension and diabetes, according to a new report from the non-partisan Urban Institute. Come 2015, it is estimated that 40% of American adults will be obese, which is more than double the rate 40 years ago. And today, close to 20% of children are obese, up from 4% four decades ago.
House committee has breakthrough on health bill House Democratic leaders have reached an agreement with a group of rebellious conservative Blue Dogs that will allow the stalled health care reform package to move through a key committee and on to the full House for a vote. Four Democratic Blue Dogs on the House Energy and Commerce Committee said they were prepared to vote for the compromise, allowing the long-delayed markup to begin Wednesday afternoon, according to several lawmakers. But the agreement also puts off any action by the full House until after the August recess. The four were part of a bloc of seven Blue Dogs on the committee who had balked at the original language in the bill.
'Blue-Dogging' Health Care One of the traits that people prize most in dogs is loyalty. However, the question then becomes loyalty to whom or what? In the case of the "Blue Dog Caucus," the group of Congressional Democrats that has emerged as the major player in health care reform, it appears that its loyalty is first and foremost to its big campaign contributors -- the health insurance firms and the drug companies. The general claim that they make is that they are worried about the fiscal consequences of health care reform, but when it comes to specifics, they are most opposed to the very elements of the reform package that are most likely to be successful in driving down the overall cost.
Good and Bad News for the House Health Bill In my recent paper about how the Congressional Budget Office analyzes health proposals, I noted that one of the most important things that CBO does is to provide additional information about its cost estimates. Cost estimates often can’t speak for themselves, so it’s important that members of Congress and other interested observers ask for additional clarification about key issues. Well, four leading House Republicans recently took this step, and CBO’s response is a doozy. It contains too much to summarize here, so let me focus on the two most important points:
One Big Problem with Private Health Insurance The This American Life crew, once again proving that they can cover any topic they want better than anyone else in the media,* has a segment in this weekend’s episode on rescission of health insurance policies – insurers’ established practice of looking for ways to invalidate policies once it turns out that the insured actually needs significant medical care. (The segment is around the 30-minute mark.) The story describes a couple of particularly egregious cases, such as a woman who was denied breast cancer surgery because she had been treated for acne in the past, and a person whose policy was rescinded because his insurance agent had incorrectly entered his weight on the application form.
Gregory Knox's Letter to Troy Clarke, President of GM In response to your request to call legislators and ask for a bailout for the United States automakers please consider the following, and please also pass this onto Troy Clark, the president of General Motors North America for me. You are both infected with the same entitlement mentality that has bred like cancerous germs in UAW halls for the last countless decades, and whose plague is now sweeping the nation, awaiting our new "messiah" to wave his magical wand and make all our problems go away, while at the same time allowing our once great nation to keep "living the dream"? The dream is over!
Eliot Spitzer Takes On The Fed - MSNBC w/ Dylan Ratigan (7/24/09)
Spitzer: Federal Reserve is 'a Ponzi scheme, an inside job' The Federal Reserve - the quasi-autonomous body that controls the US's money supply - is a "Ponzi scheme" that created "bubble after bubble" in the US economy and needs to be held accountable for its actions, says Eliot Spitzer, the former governor and attorney-general of New York. In a wide-ranging discussion of the bank bailouts on MSNBC's Morning Meeting, host Dylan Ratigan described the process by which the Federal Reserve exchanged $13.9 trillion of bad bank debt for cash that it gave to the struggling banks.
US Senator Slams Washington Post Defense Of Fed Secrecy Sanders: "Absolute power corrupts absolutely" Senator Bernie Sanders (I-VT), sponsor of S 604, the Federal Reserve Sunshine Act of 2009, has slammed a recent Washington Post editorial that contends the Federal Reserve should not be subject to a general audit. Sanders vented his opinions in a letter to the editor which was published in the Post today. "We must not equate 'independence' with secrecy." Sanders writes in response to the Post's Friday editorial entitled "Focus on the Fed" which attacked his own and Congressman Ron Paul's efforts to enact the Federal Reserve Transparency Act, a move that would allow the American people to find out for the first time where trillions in taxpayer funded bailout dollars have been used.
Banks still need bigger cushions It was a surreal moment two weeks ago when analysts on Goldman Sachs’ earnings conference call pressed CFO David Viniar to jack up leverage. They seem to think that the worst of the credit crisis is behind us, so Goldman should goose its risk profile to increase returns. This is remarkably short-sighted. Yes, leverage is down, but only relative to the obscene levels reached a year ago. Measured by tangible common equity, the biggest banks are still levered over 20 to 1. If banks learn nothing else from the financial crisis, it’s that they should err on the side of prudence, carrying substantially more capital than appears necessary.
Ben Bernanke Was Incredibly, Uncannily Wrong We now have the diametrical opposite of the famous "Peter Schiff Was Right" video (a compilation of 2006 and 2007 clips in which Schiff, a financial expert who subscribes to Austrian economics, predicted the deep recession that would follow the bursting of the housing bubble). The new, opposite video is a compilation of the 2005–2007 prognostications of Federal Reserve Chairman Ben Bernanke. In it, Bernanke is shown to have been just as embarrassingly wrong as Schiff was uncannily right.
Bernanke: Why are we still listening to this guy?
The Three Triggers of the Global Gold Bubble As you review your investment portfolio to size up your current exposure to gold, keep one key point in mind: When it comes to profits, there's no rush like a speculative gold rush. And that's just what we have at hand. Inflationary fears are on the march the world over. And most of those worries are due to the trillions of dollars in stimulus spending the world's central bankers have engineered. Those worries about the pressure from rising prices are destined to cause the next big asset bubble. And the color of this particular bubble will be gold.
Gold Holding Strong Against Dollar Gold: A surging euro, which has already moved from 1.4244 to 1.4286 this morning, has seen gold fall off slightly in euro terms - down 0.09% at €668.90/oz. With the dollar going in the other direction, gold is holding strong at $956/oz and is already up 0.33% in this morning's early trading. Continuing dollar weakness could be instrumental in gold breaking through strong resistance at $966/oz. If this happens and we see a number of closes above this level, gold should be ready to challenge fresh highs.
Is Rich Dad Right About $15,000 Gold? Rich Dad is a publishing phenomenon that most investment analysts prefer to ignore. But his common sense advice on how to manage personal finance has become a best-seller. Therefore, when he comments on a new trend then it is worth paying attention. Now he is saying gold could hit $15,000 in a huge price spike. Well, he spotted the US housing market bubble before it happened, and helped millions to cash in before that market crashed.
Gold Bull Market Guaranteed to Make new Highs During 2009 Gold - For the week gold gained $14.10 (+1.50%) to close at $951.50 (continuous contract). This was the highest weekly close in the last seven weeks, so it is a positive development, especially if it holds. The daily chart below shows gold approaching overhead resistance, as represented by the late March high, which is marked by the upper white horizontal line on the chart.
Gold Drops Most in Three Weeks as Dollar Rebounds; Silver Falls Gold fell the most in almost three weeks as the dollar rebounded against the euro, eroding demand for the metal as an alternative investment. Silver also declined. Gold and the dollar have moved inversely every month since April, resuming a pattern in five of the past seven years. The greenback rose as much as 0.7 percent against the euro, partly on revived demand for the safety of the world's main reserve currency. "It is rather painful to describe the moves in gold solely in terms of the euro-U.S. dollar, but that is all that seems to be driving the gold price at the moment," John Reade, UBS AG's head metals strategist in London, said in a report.
China-The 800 lb. Gorilla of Commodities Demand You're not seeing the Chinese dump dollars to go and buy copper or gold, etc. What we're seeing is, rather than rolling dollars over and buying new notes where the yields are so much cheaper, they're going and buying other commodities. And that's a much different statement than saying "I don't like American dollars." They're just saying that they prefer at this stage to own commodities rather than a note that's paying 10 basis points.
Get Ready for the Next Reality Check We're on the verge of something big here. What we're on the verge of may surprise you. We've been waiting for the economy to show signs of life for a while now. We expected this to happen before the year was out. There were just too many catalysts for a short-term economic rebound. The amount of direct government spending was going to help out. The direct stimulus spending may be slow, but there has been a lot more spending from other sources. For instance, the $700 billion TARP bailout didn't disappear into thin air. A lot of it went straight into reserves to offset losses, but a lot of it was simply cash handed over to banks, automakers, and AIG. Currency-Trading Revival May Take Years After Slide Currency-trading volumes may take years to recover after a plunge in risk appetite sparked by the global financial crisis drove away hedge funds and speculators, according to foreign-exchange analysts. Daily trading in London dropped 25 percent in April from a year earlier, with volumes in North America slumping 26 percent, according to surveys released yesterday by the Bank of England and Federal Reserve Bank of New York. Trade in Tokyo slid 16 percent, data compiled by the Foreign Exchange Market Committee in Tokyo showed.
Geithner Assures 'Concerned' China It Will Shrink Deficit Treasury Secretary Timothy Geithner pledged to rein in the U.S. deficit as China underscored concern about preserving the value of its $801.5 billion of Treasury holdings. The U.S. will ensure a "sustainable" deficit by 2013, Geithner said at the beginning of the first round of Strategic and Economic Dialogue talks under President Barack Obama in Washington. China is "concerned about the security of our financial assets," Assistant Finance Minister Zhu Guangyao said.
U.S. backs Chinese push for greater say in global finance he leader of China's central bank said Tuesday he had secured U.S. support to give emerging economies -- including China's -- a "greater voice and representation" on the international financial scene. Zhou Xiaochuan, governor of the People's Bank of China, added that tU.S. officials have promised to support "qualified candidates from China being given full consideration" to assume high-level positions with international financial institutions (IFIs) such as the World Bank, International Monetary Fund and other global economic bodies.
U.S., China Pledge to Ensure Recovery Is 'Secure Policy makers from the U.S. and China, the world's largest and fastest growing economies, pledged to keep their stimulus efforts in place until an economic recovery is "secured." "We agreed it is vitally important for China and the United States to see through their commitments to repair the financial system and lay the foundation for recovery," Treasury Secretary Timothy Geithner said in remarks at the conclusion of two days of talks with Chinese officials today.
Geithner: Happy with framework of cooperation with China Roadmap for relations includes climate issues, U.S. savings rate Treasury Secretary Timothy Geithner said Tuesday the biggest achievement of two days of talks with his Chinese counterparts was a "framework for cooperation," mapping out future economic relations between the two countries. "The most important thing that we accomplished today ... is to set out a path to a more balanced and more sustainable global recovery in the future," Geithner said at a dinner at the end of the closed-door talks. The framework includes a pledge by both sides to seek more balanced growth, Geithner said. He said that U.S. consumers must bolster their savings and that Americans are "going to have to go back to living within our means." In that vein, the recent rise in the U.S. savings rate was likely to prove durable, he said.
Geithner: China Needs to Be Less Dependent on U.S. Consumer Treasury Secretary Timothy Geithner said China will have to adjust its economy to be less dependent on the U.S. consumer as Americans go back to "living within their own means." Mr. Geithner, speaking at a dinner marking the end of two days of discussions between the U.S. and China, said the Asian giant is embarking on "a remarkably ambitious set of reforms" that will see China grow more from consumer demand than exports. He added that both countries have taken big steps towards repairing the global economic crisis through a series of stimulus packages and reconstruction efforts that will put the U.S. and China "on a path to a more balanced and sustainable recovery in the future."
China is spending its Reserves Building Strategic Infrastructures Jim Rogers
Grantham: China Will Collapse China is bailing out the world economy, growing at 8% a year while the rest of the globe struggles. Unfortunately, if China bears are right, those days will soon be over. Jeremy Grantham of GMO is nervous about emerging markets, especially China. . . . . . . . . Edward Chancellor, strongly suspects that the Chinese economy is dangerously unbalanced and very likely to come unhinged in the next few quarters, surprising the pants off investors.
Mob beats Chinese steel factory executive to death Thousands of workers had gathered in northeastern rust belt city of Tonghua to protest the takeover of their company and threatened layoffs. Chinese state media confirmed Monday that a steel factory executive was beaten to death after thousands of workers gathered to protest the takeover of their company. Chen Guojun, an executive at Jianlong Steel Holding Co., died Friday after an angry mob in the northeastern rust belt city of Tonghua beat him and then blocked ambulances from reaching him, according to the China Daily. The protesters worked at the state-owned Tonghua Iron and Steel Group, which was going to be sold to Chen's privately owned Jianlong Steel. Chen sparked the riot by announcing 30,000 workers would be laid off, the newspaper said.
Obama's Plan Isn't the Answer For the 85 percent of Americans who already have health insurance, the Obama health plan is bad news. It means higher taxes, less health care and no protection if they lose their current insurance because of unemployment or early retirement. President Obama's primary goal is to extend formal health insurance to those low-income individuals who are currently uninsured despite the nearly $300-billion-a-year Medicaid program. Doing so the Obama way would cost more than $1 trillion over the next 10 years. There surely must be better and less costly ways to improve the health and health care of that low-income group.
Geithner: US to address deficits after recovery Geithner: US will reverse spending after economy is on certain recovery Treasury Secretary Timothy Geithner says he has reassured China that the United States will take steps to address rising budget deficits once the economic recovery is firmly in place. China has huge investments in the United States and has worried it could be undermined by U.S. budget deficits. Geithner says the Obama administration plans to reverse the spending of hundreds of billions of dollars devoted to stimulating the economy and propping up a teetering financial system.
The Greatest Subprime A.R.M. of All is our Debt It troubles me greatly to know that while the 30 year Treasury bond is yielding a mere 4.6%, we are not locking in that low rate for our newly issued debt. Any thinking American knows it would be best to take advantage of that ridiculously low yield and finance the Treasury's borrowing at the long end of the curve. However, much like those homeowners who chose to think in terms of weeks not years when evaluating their long term finances, our government has subjected us all to what amounts to the mother lode of all subprime adjustable rate mortgages.
Lenders, Realtors Divided on Arizona Foreclosure Law Realtors and bankers are gearing up for a battle over Arizona legislation that would allow lenders to sue homeowners for losses incurred from a foreclosure. The change to the state’s so-called “deficiency judgment” law requires a borrower to live in the home for six months to be eligible for protection from lender-initiated lawsuits to recoup the full outstanding principal of a mortgage. Proponents of the law, including bankers that lobbied for the change, believe it will discourage investors from walking away from properties when they can’t make a profit.
U.S. housing turning corner but consumer mood darkens U.S. home prices rose in May for the first time in three years, the latest sign suggesting the battered housing market is stabilizing, but a weakening job market hit consumer confidence in July and could prevent near-term economic recovery. The most severe housing slump since the Great Depression helped propel the U.S. economy into recession and its turnaround is considered essential. Potential home buyers afraid of committing to a fast- depreciating asset have been clamoring for signs of stabilization in house prices.
Banks Asked to Ramp Up Loan Help U.S. Wants 500,000 Mortgage Modifications by Nov. 1; Firms Ask for Clarity Senior administration officials pressed executives from the nation's largest banks Tuesday to speed help to distressed borrowers after a frustrating start to the government's foreclosure-prevention effort and set a goal of more than doubling the number of homeowners receiving aid by November. After a series of meetings with top banking executives, Treasury Department officials said they want lenders to modify 500,0000 mortgages by Nov. 1. Since the program, known as Making Home Affordable, began in March, it has recorded about 200,000 loan modifications.
Wave of commercial loan defaults feared Nearly $165 billion in business mortgages are coming due as rents fall and vacancies rise. Almost $165 billion in U.S. commercial real estate loans will mature this year and need to be sold or refinanced as rents and occupancies fall, according to First American CoreLogic. The South has the most maturing loans with 60,893 mortgages valued at $96 billion coming due on shops, offices, hotels, apartment buildings and land, Santa Ana, Calif.-based First American said in a report. The West is second with 20,549 mortgages maturing for a value of $35 billion.
California companies for sale sit on the shelves Buyers face a shortage of available cash, so owners are accepting lowball offers or trying to wait out the recession. Five months after he opened PNK Pro Beauty Supplies in Glendale, owner Karhen Abramyan has put the shop up for sale. He's gotten a few lowball offers in the last few weeks, but no deal. "I have $60,000 in inventory here, I can't just sell it for $50,000," said Abramyan, who is asking $95,000. Blame the bad economy. Buyers and sellers of California businesses are hampered because the vast pools of money that once fueled sales have dried up.
Pyrrhic Victory in June Housing Data Many investors celebrated Monday after June's "surge" in U.S. new-home sales. Alas, it was largely wishful thinking. True, the Census Bureau reported sales up 11% from May. That is a big number, at first glance justifying Monday's 4.5% leap in the Dow Jones U.S. Home Construction Total Stock Market Index. But it fails a close inspection. Seasonally unadjusted data show a total of 36,000 new homes were sold last month, the lowest June total since 1982, notes Richard Moody, chief economist at Forward Capital. And the Census Bureau warns against assuming too much precision in these numbers, which are based on a sample survey.
Small Banks at Center of Overhaul Debate While the country's biggest banks have taken much of the blame for the economic crisis, the fate of the Obama administration's efforts to overhaul regulation of the financial industry could rest in the hands of thousands of small local banks, which have remained out of the national spotlight. The country's 8,000 community banks are a powerful lobbying force, and no one knows that better than the nation's largest financial firms, most of which oppose the creation of an agency to oversee consumer products ranging from mortgages to credit cards. Wall Street firms might have millions of dollars to spend on Washington lobbyists and public relations campaigns, but these companies possess neither the strong reputation nor the grass-roots reach of community banks.
Romulus, Remus, Stimulus: A Brief History of Monetary Madness Those whom the gods would destroy are first granted stimulus. When a man wins the lottery, for example, it has a stimulating effect on everyone around him. He usually spends the money quickly - often even before he gets it. But no matter how much he wins, he is usually broke within a few years…often, even broker than he was before he bought the winning ticket.
Jittery Economy, Relatively Low Cost Cited For Boom In Online Higher Education While the troubled economy may be bad news for GM dealers or people selling their houses, it's creating a greater demand for online college courses. Enrollment is growing steadily, especially among older, working students. The courses offer them a way to gain additional skills that could provide insurance if they get laid off or give them better credentials in the job market. "Students are fearful of losing their jobs and want stronger skills," said Shirley Adams, provost of Charter Oak State College in New Britain, where enrollment in online courses has soared in the past few years. "They may have been working in a field for many years, but a lot of times, employers are looking for that degree."
U.S. to mortgage firms: Pick up the pace Pummeled by complaints from borrowers, loan servicers commit to more mortgage modifications. White House wants 500,000 trial mods by Nov. 1 Loan servicers will "significantly" increase the pace of mortgage modifications under the Obama foreclosure prevention program, the Treasury Department said Tuesday. The Obama administration wants to see 500,000 trial modifications in place by Nov. 1. Currently, 200,000 are underway. Officials called executives from 25 servicers participating in the program to Washington Tuesday to discuss improving the 5-month-old plan's implementation.
Home Prices Rise Across U.S. Bargain Hunting, Low Rates Drive First Gain in 3 Years; Double Dip Still Possible Home prices in major U.S. cities registered the first monthly gain in nearly three years, according to a new report that provided fresh evidence that the severe U.S. housing downturn could be easing. Standard & Poor's Case-Shiller index, which tracks home prices in 20 metropolitan areas, rose 0.5% for the three-month period ending in May, compared with the three months ending in April. It marked the index's first increase after 34 straight months of decline, and came after a variety of housing indicators has shown glimmers of hope for the past several months.
BofA plans to pare back its branches nationwide Bank of America Corp. could eventually shrink its 6,100-branch network by about 10 percent as consumers utilize other methods of banking, a company spokesman said today. Bank of America spokesman James Mahoney made the comments when asked about a published report that CEO Ken Lewis and another bank executive described such a plan to investors at a meeting last week in Charlotte, where the bank is based.
Foreclosures Are Often In Lenders' Best Interest Numbers Work Against Government Efforts To Help Homeowners Government initiatives to stem the country's mounting foreclosures are hampered because banks and other lenders in many cases have more financial incentive to let borrowers lose their homes than to work out settlements, some economists have concluded. Policymakers often say it's a good deal for lenders to cut borrowers a break on mortgage payments to keep them in their homes. But, according to researchers and industry experts, foreclosing can be more profitable.
Consumer confidence takes second straight monthly drop Consumer confidence took its second consecutive monthly drop in July, the Conference Board reported Tuesday, underscoring still-gloomy sentiment about the U.S. economy. The index dropped to 46.6 in July from an unrevised 49.3 in June. In May, the confidence gauge stood at 54.8. The confidence measure was worse than expected. Economists surveyed by MarketWatch were expecting confidence to dip to 48.0 in July from the June reading. See Economic Calendar. The weaker-than-expected July number helped to sap stocks after the opening on Tuesday. The Dow Jones Industrial Average (INDU 9,097, -11.71, -0.13%) was recently off by 37 points. The June and July declines follow rebounds of the index in the spring.
U.S. to provide $1 billion to hire cops The federal government will give $1 billion in grants to law enforcement agencies in every state to pay for the hiring and rehiring of law enforcement officers, Vice President Joe Biden and Attorney General Eric Holder announced Tuesday. The money comes from the stimulus bill -- the American Recovery and Reinvestment Act of 2009 -- the officials said. The law is designed to help pull the U.S. out of its recession by providing and saving jobs, and helping those most affected by the downturn in the economy. Beneficiaries can include state, local and tribal governments.
'Cash for clunkers' bashed Analysts question program's stimulus, gas savings Despite an early surge of interest from consumers, analysts say the federal "cash for clunkers" program will fall short of its potential to reduce emissions and stimulate the economy. Rules allow buyers to make only slight improvements in fuel economy, and any increase in cars sold will likely come at a steep cost. The Obama administration expects the plan to boost sales by 250,000 over the next three months by providing rebates of up to $4,500 for new-car buyers trading in old models with a combined fuel economy of 18 miles per gallon or less.
U.S. manufacturers scraping bottom U.S. factory output at its lowest point in 60 years, and even massive job cuts haven't produced profits. Las Vegas has always served as an important - if odd - barometer for Charles Martin's manufacturing firm, which makes commercial-grade door hinges. That's because even in bad times, casinos still went up in Nevada. Not so today. "When gamblers aren't building, forget about people who make rational decisions," said Martin, president of Bommer Industries, the last completely American manufacturer of door hinges for hotels, malls, universities and other big commercial buyers. "The gamblers have quit building, and they're always optimistic."
Foreign Investment in the U.S. - Going Down, Down, Down Here at Casey Research, we've been watching the actions of foreign holders of U.S. dollars as closely as a Las Vegas pit boss watches a card player on a $1 million winning streak. Many of those in the deflation camp largely, or entirely, ignore the potential role these foreign holders may play in the drama now unfolding. But in fact, foreigners have, over the last decade, been by far the single most important source of buying for U.S. Treasuries. Given the Treasury's need to flog on the order of $3 trillion worth of its unbacked paper this year just to keep the government's doors open - and that is a four- or fivefold increase over 2008 - the foreign buyers not only have to show up for the Treasury auctions, they have to show up in droves.
Seniors Air Doubts to Obama President Tries to Allay Fears Over Cuts to Medicare Spending, Says Waste Is Target President Barack Obama on Tuesday sought to reassure senior citizens that squeezing billions of dollars from Medicare spending won't hurt their benefits. He also defended a proposal aimed at encouraging Americans to make plans in advance for end-of-life medical care. Wringing savings from Medicare, the federal health-care plan for the elderly, is key to lawmakers' efforts to cover the roughly $1 trillion cost of expanding health insurance to nearly every American. The House version of health-care legislation calls for a net $246 billion in cuts to Medicare spending over a decade.
Obama to seniors: 'This is not like Canada' President Obama on Tuesday directed his message of health-care reform to the country's oldest residents. "All I know right now is we have a problem, and it includes the spiraling cost of Medicare," Mr. Obama said at a town-hall-style meeting at the AARP headquarters in Washington. Mr. Obama stuck to his familiar points such as cutting health-care costs by eliminating waste -- including patients taking the same tests "over and over again." He also restated that advance screening for cancer and rewarding doctors for "quality, not quantity" care also will cut costs.
Plan to Tax Insurers Stirs Interest in House Senior House Democrats seeking a health bill acceptable to rank-and-file lawmakers are warming to a plan to tax insurers that sell so-called gold-plated health policies. Incorporating the proposed tax -- which so far has attracted more support in the Senate -- would allow the House leadership to shrink the surtax on wealthy households in the current bill. That might widen support among Democrats who are wary of the legislation.
U.S. Pays $2.5 Trillion for Care Costing $912 Billion The last time a president tried to overhaul U.S. health care, Americans were spending $912 billion on the system and 40 million were uninsured. Today they're spending $2.5 trillion and almost 50 million lack coverage. President Barack Obama's effort to revamp the system faces resistance from lawmakers of both parties who warn that the more than $1 trillion cost of the plan will break the budget at a time when the government already faces record deficits.
Obama aide proposes tax on cosmetic procedures to help fund healthcare Proposal comes as conservative congressional members continue to rail against cost of overhaul Americans wealthy enough to afford cosmetic surgery could be asked to pay a bit more for their tummy tucks and pectoral implants to fund treatment for Americans who cannot afford basic healthcare. An aide to Barack Obama proposed a vanity tax of sorts on cosmetic surgery to help pay for his broad overhaul of the country's healthcare system. This month, US treasury department economic adviser Gene Sperling suggested to Senate negotiators an excise tax on elective cosmetic surgery procedures, Politico reported. Senators appear cool on the idea of a "botox tax" however. Efforts to reform America's healthcare system, a patchwork of government-provided care and private insurance typically offered by employers, have flummoxed US presidents since Harry Truman in the 1940s.
Fighting Obesity Is 'At the Heart' of Obama's Plan to Provide Better and Lower-Cost Health Care "President Obama and I are committed to delivering a health care system that provides all Americans with better quality and lower costs. And fighting obesity is at the heart of both of these goals," Health and Human Service Secretary Kathleen Sebelius told a conference at the Centers for Disease Control and Prevention on Tuesday. With obesity reduction as the main goal, Sebelius said the Obama administration will "require" health insurance plans to cover some weight loss programs.
"Anytime you want one,'' the organization told him. "Platinum.''
The stage was set at AARP, the powerful Washington-based lobby for senior Americans, for Obama to host another "town hall'' forum on healthcare reform, where the president allowed that both he and his wife Michelle have "living wills'' drafted but hope they don't have to use them anytime soon. "If you have insurance that you like, you will be able to keep that insurance,'' Obama said of the healthcare reforms that he is pursuing on Capitol Hill. "Nobody is trying to change what works.''
Socialized Healthcare vs. The Laws of Economics The government's initial step in attempting to create a government-run healthcare monopoly has been to propose a law that would eventually drive the private health insurance industry out of existence. Additional taxes and mandated costs are to be imposed on health insurance companies, while a government-run "health insurance" bureaucracy will be created, ostensibly to "compete" with the private companies. The hoped-for end result is one big government monopoly which, like all government monopolies, will operate with all the efficiency of the post office and all the charm and compassion of the IRS.
Healthcare debate's next hurdle: abortion Some Democrats opposed to abortion rights threaten to pull their support for the bill unless it includes language restricting taxpayer funds for the procedure. With House leaders struggling to reach agreement on healthcare legislation, aiming toward a possible vote this week, a new hurdle has emerged: abortion. Some conservative Democrats are threatening to pull their support from the massive healthcare bill unless their concerns over potential federal funding of abortion procedures are met. They fear that the Obama administration will take advantage of an expanded government role in healthcare to increase the availability of abortions nationwide.
CalPERS appears to be a willing victim The California Public Employees' Retirement System played along as three credit rating firms it blames in a suit gave three mortgage funds AAA ratings. Its investment in them led to a $1-billion loss. Students of the fine art of pointing fingers know that the key thing is to not make yourself look like an idiot in the process. By that standard, the California Public Employees' Retirement System just flunked. In a lawsuit filed this month in state court, CalPERS blamed the three major credit rating agencies, Moody's Investors Service, Standard & Poor's and Fitch Ratings, for its recent billion-dollar investment loss in three complex mortgage funds. The pension system says it got rooked because the firms gave the funds inflated AAA ratings.
THE U.N. SEIZURE OF PARENTAL RIGHTS From Family Freedom to Global Control "...some opponents of Humanism have accused us of wishing to overthrow the traditional Christian family. They are right. That is exactly what we intend to do."[1] The British Humanist Association,1969
"...if you give me any normal human being and a couple of weeks, ...I can change his behavior from what it is not to whatever you want it to be.... I can turn him from a Christian into a Communist.... We can control behavior."[2] Psychology Professor James McConnell, 1966
Don't be deceived! The twenty-year-old Convention on the Rights of the Child (CRC) has little to do with personal rights. It has everything to do with changing values and undermining the traditional family. Since it transfers parental authority to the state, Christian children are legally free to reject safe family guidelines. The state will back their choice! As Hillary Clinton wrote back in the nineties, "It Takes a Village!"
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Tues 07.28.2009
Bernanke to the sheeple: don't even THINK about auditing the Fed, you swine!
Rearranging Deck Chairs On The U$$ Titanic America's paper empire is slowly sinking into the sea, and all the powers that be can do about it is rearrange the deck chairs for a while as they wait for the inevitable. Increasingly, more and more people are comparing the US to Japan, and it's 20-plus year bear market / economic doldrums, realizing try as they might, the prognosis for American is a match. This is of course why the stock market trading patterns are a match, because once you bubblize the real estate market (Japan peaked in 1990) it's all over, as this assures a structural high in credit creation that cannot be fixed as easily as floating a new CDO, or throwing a trillion or two at the bond market. Nope - once you play that card, as Sir Allen did back in 2002 to counter the negative effects of the tech wreck, yet another bubble he inspired, there's nothing left to do but inflate with abandon and hope nobody notices.
Barofsky Discovers The Bailout Was Based On A Big, Fat Lie At the heart of the clash between TARP watchdog Neil Barofsky and his critics in the Obama administration is that Barofsky thinks that the bailout should be publicly accountable for meeting its public goal: Keeping banks lending money to fuel the economy. The Treasury Department, meanwhile, is happy with the secret goal--recapitalizing banks and consolidating weak banks with stronger ones.
How To Think About The TARP Bait And Switch When then-Treasury Secretary Hank Paulson explained to the American people that the TARP had shifted gears from buying toxic assets toward making direct capital injections in banks, he insisted that the purpose of the program was to get banks to "deploy, not hoard, their capital." "And we expect them to do so, as increased confidence will lead to increased lending," Paulson said.
Richard Posner: Nope, Fed Probably Won't Stop Inflation In Time Richard Posner has weighed in on the chances the Federal Reserve will act as promised and use its tool kit to enact an exit strategy. His answer is: probably not. The main problem will be that, if trends continue, the Fed may be faced with the need to raise rates while employment is at the highest levels seen in generations. That will be enormously politically unpopular. And this time around we'll have the Barack Obama rather than the Ronald Reagan in the White House.
Peter Schiff Moneybomb August 7th 2009
Gold Futures Rise in New York as Dollar Retreats; Silver Gains Gold futures climbed in New York as the dollar retreated, supporting demand for the precious metal as an alternative investment. Silver also gained. The dollar dropped to a seven-week low against a basket of six major currencies. Gold gained 4.8 percent in the previous two weeks as the greenback dropped 1.8 percent. Purchases of new homes in the U.S. jumped 11 percent in June, the biggest gain in eight years, government data showed today. A "positive economic outlook" and the sliding dollar are "slightly bullish" for gold, Societe Generale analysts in London said in a note.
Gold moves in a mysterious way - well perhaps not! People trust gold more than governments and the political establishment. That is gold's inherent strength that makes it a good investment throughout difficult economic times. Fundamentals are not good, the season is not one where gold is known to perform well, the top gold ETF seems to be losing a bit of its allure - and its volume - buying from the jewellery sector remains very depressed, general stock markets appear to be strengthening, some feel the financial crisis is behind us reducing the safe haven perception of gold, yet the gold market continues to show strength. True it is off its peaks, but every time it seems to be slipping back toward $900, so far this summer doldrum season it has picked up again to settle around the $950 level. Why?
Why US Fed should buy tons of gold American government has one good thing about it. It has Inspector Generals. The government ignores what they say, but at least they give us a measure of truth about government. The truth these days on the extent of government bailouts is undeniably mind-boggling. It may make you feel queasy. It may set off alarm bells. There is something called The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP). Congress, you will recall, created the TARP program in 2008 in its Emergency Economic Stabilization Act.
Higher risk appetite may decrease appeal for gold Equity rally may reflect the global sentiments about economic recovery and the feeling that the worst may be over. Gold prices also rallied last week and traded between $940-960 levels. However the uptrend seems to have settled for gold as beyond a point stock rally signifies increased risk appetite that weakens the yellow metal's safe haven appeal. On the other hand increased risk appetite often benefits the energy and agri-commodities at the global level. This week too gold is expected to trade above $960 but still below the $1000 mark while the picture looks positive for silver as its prices are often determined by increase or decrease in industrial demand.
Real U.S. Treasury Yields Highest In History The highest inflation-adjusted yields in 15 years are helping provide the Treasury with record demand at auctions as the U.S. prepares to sell $115 billion of notes this week. Treasuries are the cheapest relative to inflation since 1994 after consumer prices fell 1.4 percent in June from a year earlier. The real yield, or the difference between rates on government securities and inflation, for 10-year notes was 5.10 percent today, compared with an average of 2.74 percent over the past 20 years. The gap helps explain why investors are buying bonds after losing 4.8 percent this year, the steepest decline on record, according to Merrill Lynch & Co. indexes that date back to 1978.
Emerging markets rush to issue debt Emerging market bond issuance has risen to record levels as investors hungry for greater risk switch to the securities because of attractive yields. The surge in issuance this year, to its highest since records began in 1962, is an encouraging sign for the world economy as activity in emerging market bonds had seized up until a few months ago. The bond market freeze had made it difficult for governments and companies, especially those in eastern Europe hit by the credit crunch and needing to refinance debt.
Is the Emerging Market Bubble About to Burst? Attracted by rich returns this year, The Wall Street Journal reports investors are once again throwing piles of cash into emerging market funds. $35.5 billion flowed into these stock funds in the first half of the year according to EPFR Global. That's the most since the company started tracking the data in 1995.
China warns banks over asset bubbles Chinese regulators on Monday ordered banks to ensure unprecedented volumes of new loans are channelled into the real economy and not diverted into equity or real estate markets where officials say fresh asset bubbles are forming. The new policy requires banks to monitor how their loans are spent and comes amid warnings that banks ignored basic lending standards in the first half of this year as they rushed to extend Rmb7,370bn in new loans, more than twice the amount lent in the same period a year earlier.
China's hidden debt problem Despite robust growth, the world's third largest economy is potentially deeper in debt than originally thought. But when Chinese leaders meet their U.S. counterparts this week, they should pause for reflection before venting any criticism, because hidden liabilities mean China's books are uglier -- potentially much uglier -- than at first sight. Thanks to successive years of fast economic growth and even faster government revenue growth, the official debt-to-GDP ratio was 17.7% at the end of last year, far lower than almost any other major economy.
Hidden from sight, debt creeps up on China On the surface, China presents a fiscal study in contrast with the United States, keeping a remarkably low ceiling on debt even as it spends its way out of the financial crisis. But when Chinese leaders meet their U.S. counterparts this week, they should pause for reflection before venting any criticism, because hidden liabilities mean China's books are uglier -- potentially much uglier -- than at first sight.
U.S.-China Economics: They Need Us as Much as We Need Them This week's U.S.-China economic dialogue kicked off Monday with the usual pomp and circumstance befitting a visiting head of state, as well as a joint WSJ op-ed by Treasury Secretary Tim Geithner and Secretary of State Hillary Clinton. Despite the fanfare, don't expect any major policy announcements to emerge, says William Gamble, president of Emerging Market Strategies, a consulting firm that specializes in emerging markets. "There might be some nice talk but the economics of both sides of the coin show there will not be any great announcements," he says.
Top US officials seek to reassure Chinese Administration brings in top officials to reassure Chinese government on deficits, inflation President Barack Obama put forward his top economic officials on Monday to try to reassure China that the U.S. will not let huge budget deficits or runaway inflation jeopardize the value of Chinese investments here. Among the officials meeting with Chinese representatives Monday, the first day of two-day talks, were Treasury Secretary Timothy Geithner, Federal Reserve Chairman Ben Bernanke, National Economic Council Director Lawrence Summers and Peter Orszag, Obama's budget director.
A cautionary tale from China One company's experience of fraud highlights the potential pitfalls of doing business in China Raiding his own company's Beijing headquarters with the help of lawyers and a police escort was not what Heinz Zuercher had in mind when he agreed in March to take over as chief executive of Frankfurt-listed Business Media China. But that is where he found himself in early June as he and another German manager broke into the finance department while a group of his employees barricaded themselves inside and hid under their desks.
Dollar in Disarray, China Buys Away Since peaking on March 5, the dollar has fallen nearly 12 percent against the trade-weighted U.S. Dollar Index (DXY). This weakness has coincided with price gains for gold, oil and copper, but several other commodities are starting to break out as well. Cocoa, sugar, cotton and orange juice prices have all jumped recently. Dollar weakness has been especially bullish for emerging markets.
Obama Opens Policy Talks With China Saying that the ties between the United States and China are as "important as any bilateral relationship in the world," President Obama welcomed senior Chinese leaders on Monday to begin high-level consultations on issues like the global economic downturn and North Korea. "The United States and China share mutual interests," Mr. Obama declared at the opening ceremony for the two days of talks, which will be led by both the secretary of state, Hillary Rodham Clinton, and the Treasury secretary, Timothy F. Geithner, and their Chinese counterparts.
U.S. courts China cooperation The Obama administration is hoping that two days of high-level talks with top Chinese officials in Washington this week will help restore China's confidence in the dollar and to restore some balance to the lopsided U.S. trade deficit with Beijing. President Obama, during opening ceremonies Monday morning at the Ronald Reagan Building and International Trade Center, stressed the two countries' special bond as two of the world's economic superpowers.
Top US officials seek to reassure Chinese Administration brings in top officials to reassure Chinese government on deficits, inflation President Barack Obama put forward his top economic officials on Monday to try to reassure China that the U.S. will not let huge budget deficits or runaway inflation jeopardize the value of Chinese investments here. Among the officials meeting with Chinese representatives Monday, the first day of two-day talks, were Treasury Secretary Timothy Geithner, Federal Reserve Chairman Ben Bernanke, National Economic Council Director Lawrence Summers and Peter Orszag, Obama's budget director.
Mr. Bernanke's Report Card: We Should All Be Holding Our Noses On Sunday, July 26, 2009, Federal Reserve Chairman Benjamin Bernanke participated in a town-hall styled meeting, moderated by public television's Jim Lehrer in Kansas City, Mo., where he was peppered with several questions about government decisions last year to rescue so-called "too big to fail companies" like insurance giant American International Group.
Will They Ever Grasp the Simple Truths? It's funny how little those in charge have learned from the nightmare of the past two years. All the evidence suggests that the various machinations of the Fed, the misjudgments of the Treasury, the manipulations of the moneyed interests, and the malfeasance of elected officials who supposedly serve our interests has helped bring about the worst financial crisis since the Great Depression. And yet, what do we have now? More of the same. More of the same kind of disastrous thinking and misguided policy-making that has helped transform the U.S. from an unrivaled economic powerhouse into a nation that is slowly being consumed from within by wreckless profligacy and an addict's dependence on borrowed money.
Taking Questions: Mr. Bernanke Fed Chairman Opts for Televised Event to Explain Moves Federal Reserve chairmen have long explained their decisions to Congress and groups of economists using dry and technical language. On Sunday night, Ben S. Bernanke showed a different side of himself. Bernanke took questions from ordinary Americans in an unusual town-hall-style event in Kansas City, Mo., hosted by PBS anchor Jim Lehrer and set to be broadcast this week. It was part of a campaign by the Fed chairman to instill confidence in the economy and to position himself as a voice of calm leadership amid the financial crisis. Also, his term as chairman will end in January, and President Obama will decide in the coming months whether to reappoint or replace him.
Bernanke Unplugged! - the Heartland Tour, Kansas City - 26 July 2009
Ben Bernanke's Big Problem Ben Bernanke has proved that he's an effective public advocate for the Federal Reserve, ably defending it in front of his Capitol Hill inquisitors. One of his most effect talking points was to argue that the Fed has an effective "tool kit" to implement on "exit strategy" to prevent hyperinflation once the economy starts to recover. Unfortunately, Bernanke lacks the one tool he needs the most: a gauge to tell him when to use the other monetary policy tools.
Bernanke on the Campaign Trail: Does the Fed Chief Deserve Reappointment? Any doubts whether Ben Bernanke is lobbying for reappointment were dashed this weekend when the Fed chairman participated in a "Town Hall" style meeting in Kansas City. Starting Tuesday, the meeting will air this week in three installments on PBS's "The NewsHour with Jim Lehrer," but both the content and the intention of the campaign-style event are clear: Fearing a lack of support in the Obama Administration, Bernanke is taking his case for reappointment directly to the American people.
Upside Down and Backwards: Is Central Banking on Death's Door Step? In a rare lucid moment, British Prime Minister Gordon Brown recently quipped, "Technology means that foreign policy will never be the same again" Elaborating before a group of leading thinkers at the TED global conference in Oxford, England, Brown further explained, "The power of technology - such as blogs - meant that the world could no longer be run by "elites" While Mr. Brown didn't exactly enunciate it, he might as well have said, "the advances in technology [read: the internet] also mean that our system of fractional irredeemable fiat currency [read: backed by NOTHING] practiced by Central Banks like the Federal Reserve may also soon be passé too." This is largely due to the masses becoming informed about the world's biggest ponzi scheme, namely, irredeemable fiat currency - forget about the warm-up acts like Madeoff and sub-prime.
Call for Rapid Recovery Is Bubble All Its Own Hats off to officials in Seoul. South Korea's ability to expand at the fastest pace in almost six years is some of the best news Asia has had in a long while. It's a sign that even with the $14 trillion U.S. economy in chaos, Asia is beating the odds and holding its own. For now, at least. The region can't be complacent for two reasons. One, increased spending and low interest rates are fine for the moment, yet they don't replace a return of global demand. Two, loose policies may be doing more to fuel bubbles that merely provide the illusion of economic recovery, leaving Asia even more vulnerable to further problems in markets.
When the Revolution Begins, Socialism Ends
Newsweek Says: The Recession Is Over! The recession is over, Newsweek screams from the cover of its most recent issue, which is out today . . . Three things you need to know:
a) No, it isn't.
b) Magazines depend on rack sales for revenue.
c) Rack sales are driven by purposefully hyperbolic headlines, everything from "ELVIS LIVES!" to "The Recession Is Over!"
Is"Better Than Expected"Good? When you expect a failing grade, but just past that math class, is that "better than expected" necessarily good? Evidently on Wall Street, limping over the very low "expectations" hurdle has been enough to push stocks up and over to be solidly higher for the year. In the rear view mirror are now the market lows for this cycle, the worst economic collapse in a few generations and the broken banking system. The markets seem to be anticipating a better than 3% economic growth (that we don't see yet) based upon their 3+ month rally. Also missing in the analysis has been the decline in revenues by many of the companies reporting "better than expected" earnings, which came at the hands of cost cutting (read layoffs). Without revenue growth, sustainable earnings growth will be very hard to come by, making the current valuations of the markets seem a bit rich. While will the markets come to their economic senses? Judging by the recent market action, it could be a while - but look out when it does.
SEC rule on 'naked' short-selling now permanent SEC makes emergency rule targeting 'naked' short-selling permanent Federal regulators on Monday made permanent an emergency rule put in at the height of last fall's market turmoil that aims to reduce abusive short-selling. The Securities and Exchange Commission announced that it took the action on the rule targeting so-called "naked" short-selling, which was due to expire Friday. Short-sellers bet against a stock. They generally borrow a company's shares, sell them, and then buy them when the stock falls and return them to the lender -- pocketing the difference in price. "Naked" short-selling occurs when sellers don't even borrow the shares before selling them, and then look to cover positions sometime after the sale.
When Workers Attack! Thank god. Thank god that for all of the layoffs, vanished 401(k)s, and general economic devastation we still haven't seen any meaningful social unrest or violence in the US. There's been gun buying, but no pitchforks. That can't be said elsewhere, however. In China, India, Belgium and France (especially France), violent unrest has been common, with workers taking out their frustrations against their bosses in the form of kidnappings and even murder.
Dodd, Conrad told deals were sweetened Loan official says Dodd, Conrad were told they were getting VIP home loan deals Despite their denials, influential Democratic Sens. Kent Conrad and Chris Dodd were told from the start they were getting VIP mortgage discounts from one of the nation's largest lenders, the official who handled their loans has told Congress in secret testimony. Both senators have said that at the time the mortgages were being written they didn't know they were getting unique deals from Countrywide Financial Corp., the company that went on to lose billions of dollars on home loans to credit-strapped borrowers. Dodd still maintains he got no preferential treatment.
Obama czar pick: 'Raving animal rights nut' Nominee advocated hunting ban, giving creatures right to file lawsuits Martosko told Beck, "When you embrace this whole utilitarian idea, guess what else comes in the back door? Some animals, according to Singer, are worth more than some humans. A smart border collie, he says, is worth more, inherently, than a retarded child. … Cass Sunstein has embraced the whole enchilada. … He believes that animals should have some of the same rights as humans, in fact, greater rights than some people – including the right to follow lawsuits."
Guest David Martosko 7-22-09
Actually, There Will Be TWO Housing-Market Bottoms... Jim Cramer said six months a year ago that housing would bottom on June 30. He's been declaring victory ever since. Meanwhile, another group of analysts--Barry Ritholtz, Whitney Tilson, ourselves, et al--think Cramer & Co. are hallucinating. Prices have at least another 15% to fall! Part of the disconnect here is a failure to define exactly what one means by a "bottom." When prices continue to fall into next year, as they almost certainly will, those who say housing is bottoming now can always say they were talking about housing activity, not prices. Housing activity, as measured by housing starts, new home sales, and other similar measures, does appear to be bottoming.
Renters finding it cheaper to own a house For Aaron Carter, a musician who was struggling to fit a drum set, a piano and three guitars into his 600-square-foot apartment in Phoenix, the math on owning a home finally began to work in his favor. Rent for the apartment he shared with his wife: $615. Mortgage payment for a home with twice the space: $760. And the interest on a mortgage is tax deductible. So they jumped at the chance to buy some elbow room.
Main Street's soaring sour loans Small businesses that aren't considered 'too big to fail' are doing exactly that: Failing. As the effects of the economic collapse began pouring down Main Street, the government last year was left holding a record $2.1 billion in write-offs of small business loans it had guaranteed. Officials expect the number of defaults to rise as the nation continues to climb out of the recession. Records obtained under the federal Freedom of Information Act show the public is paying to offset bank losses on small business loans across the country, from a convenience store in the tiny Canadian border town of Houlton, Maine, to a graphic arts design company on the island of Hawaii, more than 5,000 miles away.
Verizon profit falls, eyes 8,000 job cuts Verizon Communications Inc posted a lower quarterly profit and said it would cut 8,000 jobs in its wireline business, as weakness in wholesale and corporate segments overshadowed wireless growth. Verizon, whose shares fell 2.6 percent on Monday morning, said it would accelerate cost cuts in its landline business, with new layoffs amounting to 3.4 percent of its workforce of 235,000 employees. They come on top of 8,000 job cuts in the last year.
Past, Present And Future: All In the Numbers While recent economic data have shown signs of improvement, there just haven't been that many numbers to look at lately. That changes this week, with several important releases shedding light on the economy's recent past, its present and its future. For the economy just past us, Friday marks the release of second-quarter gross domestic product data. The numbers are expected to show that the economy shrank at a 1.5 percent annual rate from April through June. That would be much milder than the 5.5 percent rate of decline in the first quarter, but it would signify that the recession continued through the spring.
New-Home Sales Up 11%, Most Since 2000 Purchases of new homes in the U.S. climbed 11 percent in June, the biggest gain in eight years, underscoring evidence that the deepest housing slump since the Great Depression is starting to stabilize. Sales increased to a 384,000 annual pace, higher than every forecast in a Bloomberg News survey and the most since November, figures from the Commerce Department showed today in Washington. The number of houses on the market dropped to the lowest level in more than a decade.
Americans With Insurance Become Pivotal in Debate With the Obama administration's top domestic priority struggling in Congress, supporters and opponents of the current health-care proposals are now focusing on the constituency that both sides agree has become pivotal to the debate: the majority of Americans who have health insurance and, despite concerns, are generally satisfied with their care. Although polls have consistently shown that just over half of Americans think the health-care system is in need of reform, a substantial majority say they are satisfied with their own insurance and care. Any hope of changing the system will require their support, according to experts and advocates across the ideological spectrum.
The Scary Reason Healthcare Can't Be Reformed It turns out that if you want to find good examples of healthcare institutions meaningfully improving quality and reducing costs at the same time, you don't have to look very far. They're right here in our own backyard. The New York Times has a story on the unusual idea of paying doctors a flat salary, rather than fees for actions performed, thus cutting down on unnecessary tests to patients, while changing the incentive structure for the doctor:
Drugmakers May Pay for $100 Million in Health Ads Drugmakers may spend $100 million for an advertising campaign starting as early as September to push legislation that would overhaul the health-care system, said a person familiar with the discussion. The Pharmaceutical Research & Manufacturers of America, the industry lobbying group, discussed funding the ad campaign during a meeting in Washington last week, the person said. A PhRMA spokesman, Ken Johnson, said no decision has been reached on the group's campaign strategy for when Congress reconvenes after the August recess.
Bureaucracy drives up health care plan's costs House Democrats propose new boards, task forces The health care reform plan proposed by House Democrats would create at least a dozen new federal programs, boards and task forces, contributing to the proposal's hefty price tag that has drawn criticism from Congress' official scorekeeper. Democrats say the bureaucratic infrastructure is necessary to administer the expansion of health care benefits to the tens of millions of uninsured Americans while creating more competition for private insurers to drive down out-of-control costs.
Democrats Face 'Peril,' Opportunity for Health Plan President Barack Obama and Democratic leaders are trying to salvage health-care legislation as disputes within their own party stall progress on the president's top domestic priority. Senate Finance Committee Chairman Max Baucus is struggling to get a bipartisan deal on his panel before an Aug. 7 recess after weeks of delay, and party leaders postponed a vote by the full Senate until September. Leaders in the House, which is scheduled to adjourn July 31, are fighting to contain a mutiny over the $1 trillion cost of the bill that last week had them threatening to force a quick floor vote.
Pastor James David Manning: White Folks Are Not Gonna Take It No More !!!
An Incoherent Truth Right now the fate of health care reform seems to rest in the hands of relatively conservative Democrats - mainly members of the Blue Dog Coalition, created in 1995. And you might be tempted to say that President Obama needs to give those Democrats what they want. But he can't - because the Blue Dogs aren't making sense. To grasp the problem, you need to understand the outline of the proposed reform (all of the Democratic plans on the table agree on the essentials.)
Dubai boom ends as one cheque in four bounces Up to one quarter of all the cheques written in Dubai may be bouncing as expatriate residents in the Gulf state struggle as the economy slows. Blank cheques are used to underwrite financial arrangements, such as credit cards, in Dubai, guaranteeing future payments such as a rental agreement or bank loan. This system arose in the United Arab Emirates (UAE), which includes Dubai, because of the difficulty of doing credit checks on foreign workers. As many of these workers have now lost their jobs in the recession, the number of bounced cheques has risen.
7 regional banks fail 6 subsidiaries of a Georgia bank go down, bringing the tally to 16 for the state in 2009. A N.Y. bank is the first FDIC-insured bank in the state to fail since 2004. State regulators shut down seven regional banks Friday, the Federal Deposit Insurance Corporation said, bringing the total number of banks to fail in the United States to 64 this year. Six of the banks that closed were subsidiaries of one larger bank, the Security Bank Corporation, based out of Macon, Ga. So far in 2009, 16 banks have failed in Georgia, more than in any other single state.
Guaranty Bank warns that it's on the verge of failure The firm, which has more than 50 branches in California, reports that its capital has been wiped out and that it is unable to raise new funds. Guaranty Bank, which has more than 50 branches in California, warned that it could become the biggest financial institution to fail this year. Asset write-downs have wiped out the company's capital, and the firm has been unable to raise fresh funds, parent Guaranty Financial Group Inc. said in a securities filing Thursday.
No. 2 Texas bank expects to fail In filing, Guaranty Financial says it's 'critically' short of capital, and is talking to investors about recapitalization. Guaranty Financial Group Inc , the second-largest publicly traded bank in Texas, said it will probably fail after loan losses and writedowns left it "critically" short of capital. The bank, whose investors include Carl Icahn and Robert Rowling, is in talks with at least one investor group for a possible recapitalization, said a source familiar with the situation. The source requested anonymity because the talks are not public.
Importance of Silver and Gold Recently an interviewer asked me why silver and gold are doing much better than silver and gold mining stocks. This was a question that I anticipated and had given a great deal of thought. First, there is a contingency out in the precious metals camp that "gold" is the only asset that is not at the same time someone else's liability. This is a mantra that is only partially true. Any thinking person would recognize that silver, copper, or firewood would represent an asset that is not someone else's liability. This of course is based upon the fact that the commodity is owned outright. We could argue that any tangible asset could be considered "another" asset that is not simultaneously someone else's liability. I plainly do not buy the idea that gold is the ONLY asset that is not a liability to someone else!
Gold price may soar to $900-1000/oz this week Gold price is on a boom. Analysts have predicted that gold prices might soar to of $ 990-1000 an ounce this week in international markets thanks to weakening dollar. "Gold prices are going to go up this week. The global dollar index is falling and this is making gold to surge to record levels. So investors with good gold positions are going to benefit this week," predicted Dubai-based bullion analyst Mark Robinson.
Is The Rally in PMs Running Out of Steam or Are They Going Higher Right Away? Precious Metals are still in a favorable fundamental situation, and with the recent news confirming the strength of the investment demand, the overall picture is even more bullish. However, as far as timing is concerned, we may need to consolidate for several days. Once we see that the technical situation has improved in the USD Index and S&P 500, the precious metals should be ready to move much higher, probably above the $1000 level.
Gold is genuine Wealth, it is real money Throughout history no paper currency has survived in its original form. Paper currencies are normally inflated away until they are worthless. The purchasing power of the US dollar has declined by 90% since 1950. The situation is the same for most currencies. When governments come under financial pressure they can never resist printing money to pay for debts, be they war debts or just excessive spending. Gold is the only currency which has no liability attached to it.
how Obama could confiscate your gold according to Marc Faber
Dollar May Depreciate ‘Quite Aggressively,’ Standard Bank Says The dollar risks a “break to the downside” amid falling volatility, Standard Bank Plc said. “There may well be a resignation within the market that range-trading will be with us through the rest of the summer,” said Steve Barrow, head of Group of 10 research in London, wrote today in a report. “This could prove incorrect. The dollar is just as likely to break down and possibly quite aggressively. Spot-market stability and falling volatility can work against the dollar right now and produce a significant fall.” The dollar weakened 0.5 percent to $1.4211 per euro as of 10:01 a.m. in London.
You Can't Print Production and Prosperity It's hard to imagine that the monetary policy talk can get any nuttier, but we've likely only just begun. After all, despite the Federal Reserve growing its balance sheet by 140 percent and dropping rates essentially to zero, the bankruptcies just keep on coming. Ex-Fed governor Wayne Angell told Larry Kudlow's CNBC audience, "monetary policy always works!" Although Angell does stipulate that it takes time before the tromping on the monetary gas pedal will spin the economic tires and spray the prosperity gravel.
World Prepares to Dump the Dollar American economists think the world can't afford to let go of the dollar's reserve currency status. The world is about to teach them differently. What do China, India, Brazil, Russia, France and Germany have in common? These countries most often can't agree on anything. But they are united in one strange - and ominous - way. They blame the United States for wrecking the global economy. And they think the dollar is the wrecking ball.
Peter Schiff: I Was Right And Art Laffer Was Wrong The editors of the Daily Bell are pleased to publish this exclusive interview with free-market financial advisor Peter Schiff who founded the successful investment firm of Euro Pacific Capital and is contemplating running for Senator from Connecticut.
Marc Faber the recent rally is the result of excess liquidity The worst is still to come
THE DARK YEARS ARE HERE In this newsletter we will outline what is likely to be the devastating effect of the credit bubbles, government money printing and of the disastrous actions that governments are taking. Starting in the next 6 months and culminating in 2011-12 the world will experience a series of tumultuous events which will be life changing for most people in the world. But 2011-12 will not be the beginning of an upturn in the world economy but instead the start of a long period of economic, political and social upheaval that could last for a couple of decades.
Get ready for banking's next headache A weak economy and frozen financing markets could spell trouble for regional banks with big commercial loan portfolios. Regional banks can no longer ignore the elephant in the room -- their exposure to the commercial real estate bust. Though housing markets remain weak, analysts expect credit problems over the next year to center on commercial real estate -- mortgages on office and apartment buildings and shopping malls, as well as construction, development and industrial loans.
A) From 1776 to 1912 (136 years), the value of the dollar, relative to the Consumer Price Index, increased by 11%.
B) The United States Federal Reserve was created in 1913. The stated purpose of the Fed, by its own definition taken from its website, is to "conduct the nation's monetary policy by influencing money and credit conditions in the economy in pursuit of full employment and stable prices."
C) Then after The Fed's creation, from 1913 to 2008 (95 years), the value of the dollar, relative to the Consumer Price Index, decreased by 95%.
Foreclosure inn: Luxury hotels default Missed loans payments are on the rise, but what is hurting hotels is good for consumers as owners slash room rates by as much as 12%. There's plenty of room at the inn. So much, in fact, that many high-end hoteliers are bleeding cash and defaulting on their loans. "The industry is clearly in a downturn," said John Fox, a vice president with PKF Consulting, an advisor to the hotel industry. "It's across the board with the luxury end of the business hit a little harder than the moderate end."
Bernanke had to 'hold my nose' over bailouts Bernanke voices anger at bailing out risk-takers, but says had to avoid 2nd 'Great Depression' Federal Reserve Chairman Ben Bernanke said Sunday that he had to "hold my nose" over last year's taxpayer-financed bailouts of big financial companies but argued that the action had to be taken to avoid a major meltdown of the U.S. financial system and the broader economy. Bernanke's comments came during a town-hall style meeting in Kansas City, Mo., where he was peppered with several questions about government decisions last year to rescue so-called "too big to fail companies" like insurance giant American International Group, whose collapse would have wreaked havoc on the global economy.
Bernanke Defends Fed’s Response to Financial Crisis Federal Reserve Chairman Ben S. Bernanke defended the central bank’s response to the financial crisis and recession in a forum to be televised this week, saying he sought to avoid a "second Great Depression." "The problem we have is that in a financial crisis, if you let the big firms collapse in a disorderly way, it will bring down the whole system," Bernanke said today at a town- hall-style meeting in Kansas City, Missouri, taped for broadcast on PBS television. "I was not going to be the Federal Reserve chairman who presided over the second Great Depression."
Bernanke says the U.S. economy has 'a very long haul' ahead 'Unemployment is going to stay high for quite a while,' and probably won't peak until the end of this year, according to the central bank chairman. He also predicts that foreclosures will head higher. Federal Reserve Chairman Ben S. Bernanke, offering a more hopeful outlook on the grim jobs picture than many economists, projected that the U.S. unemployment rate would peak at the end of this year. Although economists generally expect the jobless rate, which hit 9.5% in June, to keep rising into the first half of next year, Bernanke suggested that the labor market could begin a recovery sooner.
Bernanke: Economy to bounce back stronger At a town hall meeting in Kansas City, Mo., the Fed chairman said the recovery will take some time, but that lessons learned will benefit the nation. Federal Reserve Chairman Ben Bernanke said Sunday that lessons learned from the recession and the financial crisis will help make the economy stronger than it was before the crisis. Speaking at a town hall event at the Kansas City, Mo., Fed called "Bernanke on the Record," the chairman answered questions from members of the public as well as moderator Jim Lehrer of PBS.
Bernanke takes his message to the heartland The U.S. jobless rate is likely to stay high even once the nation exits recession some time in the next few months, Federal Reserve Chairman Ben Bernanke said on Sunday. Taping a "Bernanke on the Record" special that will air on PBS this week, the top U.S. monetary policy-maker defended the aggressive, even unorthodox actions taken by the Fed during the long recession and deep financial crisis. "I was not going to be the Federal Reserve Chairman who presided over the second Great Depression," Bernanke said.
The Great Preventer Roubini thinks Bernanke need to be reappointed LAST week Ben Bernanke appeared before Congress, setting off a discussion over whether the president should reappoint him as chairman of the Federal Reserve when his term ends next January. Mr. Bernanke deserves to be reappointed. Both the conventional and unconventional decisions made by this scholar of the Great Depression prevented the Great Recession of 2008-2009 from turning into the Great Depression 2.0.
On the Edge with Max Keiser - 24 July 2009 (pt1 of 3)
Wall Street: Here comes the hard part Investors wade into the heaviest week of corporate reporting yet. Reports on GDP, housing, consumer confidence and manufacturing also due. Can a recharged stock market rally withstand the biggest week of corporate profit reports yet? Maybe. "As long as earnings continue to surprise to the upside and revenues aren't disastrous, the market should move higher in this period," said Timothy Ghriskey, chief investment officer at Solaris Asset Management.
Fed's future role at issue on Hill Congress struggles with complex plan for reordering financial regulation. A key hangup is how much new power to give the Federal Reserve. A major Obama administration plan to deal with financial companies too big to fail is becoming too big to zoom through Congress. Top White House and Treasury Department officials have been working behind the scenes for weeks to push lawmakers to start tackling legislation aimed at rescuing giant financial companies on the brink of failure -- like American International Group.
US hopes China talks spur economy, job creation Despite diplomatic tensions, US hopes China talks help spur economic recovery, job creation With the global economy mired in recession, the United States and China begin talks Monday to seek a solution together despite tensions over currencies, the U.S. budget deficit and the huge U.S. trade gap with China. Ultimately, how well the U.S. efforts succeed could help determine how fast the economy recovers and how many U.S. jobs might be created once it does. Other issues, such as climate control and North Korean nuclear ambitions, also will command attention. Few expect the talks to bridge the sharp differences between Beijing and Washington. But both governments want to use the occasion to help build a less confrontational relationship.
The 'new' new tax on the rich As Congress continues to grapple with how to pay for health care reform, taxing the wealthy is still in play. Just how wealthy is the next question. The definition of "rich" may be going up should lawmakers choose to impose extra taxes on the wealthy to pay for health reform. Three committees writing the lead House bill have called for an additional tax to be imposed on income above $280,000 for singles and $350,000 for married couples. The so-called surtax would run as high as 5.4% on income over $1 million.
On the Edge with Max Keiser - 24 July 2009 (pt 2 of 3)
Mortgage relief efforts are criticized Senate panel hears complaints amid a new push by some lawmakers to allow bankruptcy judges to modify home loans. Federal programs aimed at modifying loans to stem foreclosures aren't working, witnesses told a Senate Judiciary subcommittee, and some lawmakers called on Congress again to pass a bill allowing bankruptcy judges to modify home loans -- a procedure known as mortgage cram-downs. Separately, the Federal Reserve took steps to make lending terms more understandable as part of its efforts to avoid another mortgage meltdown, which triggered the deep recession worldwide.
U.S. Home Vacancies Hit 18.7 Million on Bank Seizures More than 18.7 million homes stood empty in the U.S. during the second quarter as the steepest recession in 50 years sapped demand for real estate and banks seized properties from delinquent borrowers. The number of vacant properties, including foreclosures, residences for sale and vacation homes, was little changed from 18.6 million a year earlier, the U.S. Census Bureau said in a report today. The quarterly homeownership rate was 67.3 percent, seasonally adjusted.
Will Big U.S. Banks Be Forced to Cover Large Gold Short Positions? For many years, accusations that JPMorgan Chase, Citigroup, Bank of America and Goldman Sachs have wide open and huge, exposed short positions against gold and silver, have been made by groups like GATA and others. In the United States these four banks control over 90% of the derivatives market. They too will be subject to "substantial supervision and regulations," including conservative capital requirements and strong business conduct standards. U.S. Treasury Secretary Timothy Geithner is set to propose giving securities and futures regulators authority to police the over-the-counter derivatives market. Discussions on these regulations begin next week.
Real Yields Highest Since '94 Aid Treasury $115 Billion Auction The highest inflation-adjusted yields in 15 years are helping provide the Treasury with record demand at auctions as the U.S. prepares to sell $115 billion of notes this week. Treasuries are the cheapest relative to inflation since 1994 after consumer prices fell 1.4 percent in June from a year earlier. The real yield, or the difference between rates on government securities and inflation, for 10-year notes was 5.06 percent on July 24, compared with an average of 2.74 percent over the past 20 years.
On the Edge with Max Keiser - 24 July 2009 (pt3 of 3)
ANIMAL FARM - 2009 All animals are equal, but some animals are more equal than others. - - George Orwell – Animal Farm The United States has gradually degenerated from a Republic based on individual liberties to a socialized oligarchy run by an exclusive few. The country was founded upon the platform of individual rights. We declared our independence from Great Britain because of excessive regulation and taxation. Americans fought for the right to live their lives free from the subjugation of an overbearing governmental body. The Founding Fathers declared our independence with these immortal words:
A Worldwide Bubble in Everything The depression deepens. "These are not layoffs...they're permanent job losses," said Barry Ritholtz yesterday morning in his presentation at the Agora Financial Investment Symposium in Vancouver. "These people are not going back to work anytime soon." That is the difference between a recession and a depression. In a recession people get laid off...and then they are called back to work when things go back to normal. But in a depression, they are let go permanently. They exhaust their unemployment benefits and become desperate. They must find new employment in new industries. Because things cannot go back to normal; normal is played out.
China May Press Geithner on Dollar, Economy in Washington Talks The dollar may be the focus of Chinese-U.S. talks starting in Washington today as China presses the Obama administration on how it will tame the fiscal deficit and protect the U.S. currency’s value, Morgan Stanley said. Treasury Secretary Timothy Geithner and Secretary of State Hillary Clinton will host two days of meetings spanning topics from the economic crisis to North Korea. The Strategic and Economic Dialogue is the Obama administration’s first with China.
Mass Layoffs: The Continuing Devastation Stock market investors shrug off a disaster in our midst: mass layoffs. Investors act as though it will soon be business as usual. Companies cut costs by firing employees that have been with them for decades. Then the companies can report higher earnings from cost-cutting measures. The media then proclaim an increase in earnings. But how will these increases be sustained? How will an unemployment rate of 11% help get the economy back on its feet?
He Promised Change, but Is This Too Much, Too Soon? Among the biggest decisions President Obama faced in the weeks before his inauguration were how to assess the scope of the mandate he had received from the voters and how to act on it. It was inescapable after the troubled presidency of George W. Bush that people were ready for change. But how much and how fast were not so apparent from the election returns. Obama's decision to launch the most ambitious domestic agenda since Lyndon B. Johnson's thus became the defining decision of his presidency.
The New Consumer Debt Strategy: Just Walk Away Consumers are mad as hell and they're not going to take it anymore. Every day, the bank calls--demanding to know why the consumer hasn't paid his credit card bills. Every time the consumer skips a payment (to persuade the bank to cut the interest rate), the bank responds by jacking up the interest rate. And so on. Now consumers are finally responding by doing what banks do when they can't pay their debts: just walking away.
Helping the unemployed pay their mortgages As more jobless fall into foreclosure, the Obama administration is looking at ways to help them save their homes. As a growing number of jobless Americans default on their mortgages, the Obama administration is considering new ways to help them avoid foreclosure. Among the options being floated are giving the unemployed money, in the form of grants or loans, to cover their mortgage payments or allowing them to remain in their homes as renters after foreclosure.
Consumer confidence dips in July The Reuters/University of Michigan Surveys shows consumers are wary about the slow pace of recovery. U.S. consumer confidence waned in late July to its lowest ebb since April on growing pessimism about the long-term economic outlook, especially about income and jobs, a survey showed Friday, even as some economists reckon the longest recession in decades may be easing.
Joe Biden: ‘We Have to Go Spend Money to Keep From Going Bankrupt’ Vice President Joe Biden told people attending an AARP town hall meeting that unless the Democrat-supported health care plan becomes law the nation will go bankrupt and that the only way to avoid that fate is for the government to spend more money. “And folks look, AARP knows and the people with me here today know, the president knows, and I know, that the status quo is simply not acceptable,” Biden said at the event on Thursday in Alexandria, Va. “It’s totally unacceptable. And it’s completely unsustainable. Even if we wanted to keep it the way we have it now. It can’t do it financially.”
Pelosi does not favor second economic stimulus U.S. House of Representatives Speaker Nancy Pelosi does not favor a second economic stimulus package, she said in an interview broadcast on Sunday.
Obama touts healthcare plan for small businesses President Barack Obama said Saturday that Democratic plans to revamp the U.S. healthcare system would benefit small businesses, an argument that quickly drew criticism from his Republican opponents. Obama is trying to build more public support for a broad healthcare overhaul after action stalled in the U.S. Congress this week and polls showed many Americans were skeptical about the $1 trillion program.
5 freedoms you'd lose in health care reform If you read the fine print in the Congressional plans, you'll find that a lot of cherished aspects of the current system would disappear. In promoting his health-care agenda, President Obama has repeatedly reassured Americans that they can keep their existing health plans -- and that the benefits and access they prize will be enhanced through reform. A close reading of the two main bills, one backed by Democrats in the House and the other issued by Sen. Edward Kennedy's Health committee, contradict the President's assurances. To be sure, it isn't easy to comb through their 2,000 pages of tortured legal language. But page by page, the bills reveal a web of restrictions, fines, and mandates that would radically change your health-care coverage.
House Democrats Censure Republican's Use of Term 'Government-Run' Health Care in Constituent Communications Rep. John Carter (R-Texas) made public last week an e-mail from the Franking Commission that asked him to change the audio message on a telephone town hall meeting on health care from “government run” to “public option.” The Franking Commission, a bi-partisan committee authorized by law to oversee mail and other communications between members of Congress and their constituents that is paid for with federal funds, responded to the audio message from Carter’s staff for the town hall event that said: “The House Democrats unveiled a government-run health care plan.”
What will triumph in health care push -- reform or recess? Something old and something new to watch this week: The continuing -- some say languishing -- health care debate, and the launch of the "Cash for Clunkers" program designed to improve the nation's fuel efficiency, not to mention Detroit's bottom line. "Busy week," was the understatement of a top House Democratic leadership aide as he looked ahead.
Dems: We'll move forward on health plan Senate Democrats alone cannot pass President Obama's ambitious overhaul of how Americans receive health care, a top lawmaker acknowledged on Sunday. Republicans said they will continue their opposition to a plan they say is simply a government takeover of private decisions. Both sides said they want to improve the system and provide care for almost 50 million Americans who lack health insurance coverage, but the two parties remain deeply divided over how to reach that goal. Republicans said the longer the delay, the more the public understands the stakes of a policy that has vexed lawmakers for decades.
Democrats wait and see on health care A key Senate Democrat said Sunday that passing a major health-care bill is impossible without Republican support, though the chamber's top Republicans were not forthcoming with such support on the weekend's political talk shows. "Look, there are not the votes for Democrats to do this just on our side of the aisle," said Sen. Kent Conrad, North Dakota Democrat and a member of the Senate Finance Committee crafting the bill.
Pelosi Says She Will Pass U.S. Health-Care Overhaul House Speaker Nancy Pelosi said she will pass legislation to overhaul the U.S. health-care system through her chamber even as members of her own Democratic Party expressed skepticism after days of discord and delays. “When I take this bill to the floor, it will win,” Pelosi said in an interview on CNN’s “State of the Union” program that aired today. “This will happen.”
White House hits watchdog on Medicare plan Orszag says Congressional Budget Office exaggerates costs in saying little would be saved by oversight panel. The White House has criticized the Congressional Budget Office's findings that the Obama administration's proposal to control Medicare costs would yield a moderate savings of $2 billion over the next decade. White House Budget Director Peter Orszag said the CBO's analysis -- which it relayed to House Majority Leader Steny Hoyer on Saturday -- could feed a perception of the office's bias toward "exaggerating costs and underestimating savings."
Former AMA Head Warns of ‘Disaster in the Details’ of Obama Health Overhaul The former president of the American Medical Association, Dr. Donald Palmisano, a surgeon, warned that if the Obama administration did not slow down on its drive for a government-led health care overhaul, the treatment choices available to patients would be undercut. He added that the president’s “public option” plan in particular would be a disaster for patients and medical innovation.
A Cliffhanger to See if a G.M. Turnaround Succeeds SATURDAY, May 30, offered the kind of warm, sunny afternoon that rain-soaked New Yorkers had longed for all spring. In the theater district, crowds were gathering to catch a glimpse of Barack and Michelle Obama, who were planning to attend a Broadway show so the president could fulfill his campaign promise to his wife of a date night in Manhattan. Fourteen blocks north, high up in a boardroom at 767 Fifth Avenue, Fritz Henderson was about to make the toughest decision of his life, and one that Mr. Obama and his advisers had seemingly foisted upon him.
Don't speed into cash-for-clunker offer Once again, the federal government wants you to shop to save the economy. After the Sept. 11 terrorist attacks, the Bush administration made the case for “patriotic” stock and bond buying sprees. The domestic car makers rolled out flag-waving commercials and zero percent financing deals to persuade Americans to buy American. Politicians passed tax cuts in 2002 and pushed citizens to spend their rebates to rev up the lackluster economy. Economic stimulus packages created another opportunity to proclaim shopping as a patriotic pastime. Now, the Obama administration is making the same pitch, dressing it up in green.
Conservatives Now Outnumber Liberals Almost Two to One in America, According to Washington Post Poll Americans who consider themselves conservatives now outnumber Americans who consider themselves liberal by almost two to one, according to a new poll by the Washington Post and ABC News. In the poll of 1,001 adults conducted between July 15-18, respondents were asked: “Would you say your views on most political matters are liberal, moderate, or conservative?” Thirty-eight percent said they were conservative, while only 20% said they were liberal. Thirty-nine percent, meanwhile, said they were moderate.
Get Ready for Ditch Power! Irrigation canals are glamorous like the sea, but it might be easier to harvest power from them, says Hydrovolts. Think of it as the love child between a steamboat paddlewheel and a small hydroelectric dam. Seattle, Wash.-based Hydrovolts has devised an "in-stream hydrokinetic turbine" for harvesting electric power from canals, irrigation networks, wastewater systems and the streams in and around industrial sites.
Alaska Gov. Palin to leave office with cloudy future Sarah Palin, the former Republican U.S. vice presidential candidate, will step down as Alaska's governor on Sunday with her political future clouded by ethics probes, legal bills and dwindling popularity. Palin made a surprise decision on July 3 that she would resign, raising questions about her next move and whether she was planning to mount a run for president.
Weak economy pushing Russia to arms deal: Biden Russia's struggling economy and its leaders' pragmatism will push it to make deals on nuclear arms reduction as Washington seeks to reset ties with Moscow, U.S. Vice President Joe Biden said. Biden made the remarks in an interview with the Wall Street Journal published on Saturday, after he visited Ukraine and Georgia to reiterate U.S. support for the two former Soviet states at loggerheads with Moscow.
U.S. defense chief heads to Israel, Jordan U.S. Defense Secretary Robert Gates heads to Israel on Sunday for talks covering missile defense, Israel's plan to acquire the multinational F-35 fighter jet and efforts to curb Iran's nuclear ambitions. During a visit that will last about six hours on Monday, Gates is to meet Prime Minister Benjamin Netanyahu and Defense Minister Ehud Barak to discuss those and other bilateral defense issues, a senior U.S. defense official said.
U.S. tries to spur Middle East peace talks The United States launched a fresh drive on Sunday to restart Middle East peace talks, sending senior officials to the region to deal with issues ranging from Jewish settlements to Iran's nuclear ambitions. The visits by Middle East envoy George Mitchell, Defense Secretary Robert Gates and National Security Adviser Jim Jones were a strong signal from U.S. President Barack Obama of his intention to keep Israeli-Arab peacemaking high on his agenda.
Clinton urges North Korea to return to talks U.S. Secretary of State Hillary Clinton said on Sunday that major powers wanted North Korea to return to negotiations over its nuclear program but would not reward any provocative actions. "We are not going to reward them for half-measures. They now know what we in the world community expect," said Clinton in an interview with NBC's "Meet the Press" program.
Rallies around globe back Iran protesters Iranians protesting last month's disputed presidential election won support across the world Saturday as sympathizers rallied in dozens of cities demanding the release of opposition activists jailed by the Islamic republic. In Iran, police and pro-government militia attacked and dispersed hundreds of protesters who had gathered in Tehran, while opposition leaders appealed to the country's top clerics in the city of Qom to intervene and end the crackdown.
Iceland's krona proves the magic wand as Europe ails Iceland's krona is working its magic cure. Well-heeled Japanese tourists – once a rarity – can be seen these days sampling halibut at Reykjavik's Siggi Hall, or buying Gymur jackets at the 66°North store on Bankastraeti. The krona has fallen by half against the euro since the `New Viking' trio of Landsbanki, Glitnir, and Kaupthing strayed out of their depth and brought down Iceland's financial system. Nothing is cheap, but prices have come within reach. Reykjavik's cafés are packed with euro-youth, at last able to afford a taste of all-night dancing at this Arctic Ibiza.
Henry Lamb on agenda 21
Global Plantation NWO Agenda 21
AGENDA 21 DEPOPULATION 2009 PART 1
AGENDA 21 DEPOPULATION PART 2
Obama Admin to Depopulate This Fall 2009
The 2012 NWO Agenda 1 of 10 (a few falsehoods in this part)
Gold-to-silver ratio jumps as silver prices slump Silver's volatility has been in evidence yet again since our last report was published, the price having crashed by almost 22% from its 3rd June high of $15.97/oz to $12.47/oz on 13th July, although it has since recovered slightly, while gold has slumped by 7% over the same period. This corresponds to the increase in the gold/silver ratio, which had dropped to a low of 61.16 on 3rd June to a high of 72.85 on 13th July. Silver's fall from grace in the past few weeks has been accompanied by the liquidation of net longs on Comex, over and above the slip in net longs for gold, suggesting that investors are concerned that industrial demand for silver may not recover in as timely a fashion as anticipated just one month earlier.
Gold steadies above $950 on 7-week low dollar Its a clear sign. Money is coming back into the resource sector as investors around the world are beginning to recognise the exceptional values in the context of a longer term outlook. And companies that are generating shareholder value by advancing their projects will continue to be rewarded. At the moment, the most favoured area for investors remains precious metals, especially gold. Gold steadied above US$ 950 per ounce on Thursday as the US dollar stayed near a seven-week low against a basket of currencies marked the previous day, maintaining bullion's allure as an alternative asset. Earlier this month, economic worries encouraged investors to buy the US dollar and US Treasuries instead of gold, dragging the precious metal's prices down towards US$ 900.
Central bank sales big burden on gold From 1998 to early-2002, gold prices stayed mostly below $300 per ounce with heavy central bank selling, low inflation, and little interest from investors. That all changed in April of 2002, thanks to 9/11 and a strong trend of consolidation among gold producers. Prices eventually traded their way to $1,000 per ounce by March of 2008 before they got hit with selling in the financial panic of 2008. Prices rebounded in November of 2008 with some buying gold as a safe haven and some buying as an inflation hedge. Prices are currently strong with critical support at $850?
Gold best inflation hedge: WGC If there is an economic crisis world over and if you want to keep your money in a very safe way, there is only one thing you can bank on, that is gold. The World Gold Council has also found out this indomitable position of gold when it comes to hedging against any economic worries. According to World Gold Council's regular quarterly appraisal of the gold market, the yellow metal increased modestly in the second quarter, supported by, among other things, ongoing inflation fears. Traditionally an inflation hedge, gold was sought by investors who had growing concerns about central banks' exit strategies and the implications of a reversal in quantitative easing measures.
Fort Knox, Fort Hocks or Fort Shocks: Three United States Gold Scenarios For 72 years, the building at the intersection of Bullion Boulevard and Gold Vault Road in Fort Knox, Kentucky has symbolized the financial strength of the United States of America. The United States Bullion Depository, better known as Fort Knox, is said to contain 147.3 million troy ounces of gold, over half the nation's total reported gold bullion holdings of 261.5 million troy ounces. The remaining 114 million ounces are said to be stored at the Denver and Philadelphia Mints, the West Point Bullion Depository, and the San Francisco Assay Office. Assuming a price of $1,000 / ounce, the nation's gold is worth $261.5 billion. If the metal is actually there, it represents the largest sovereign stockpile of gold bullion in the world.
China adds silver lining to investment option China has finally realized the importance of silver as an investment option and cleared the way for people to put their money on silver bars. The bars are available in 500 gm, 1 kg, 2 kg and 5 kg with a purity of 99.9 per cent. This move comes after the increasing importance of silver is felt in all bullion markets across the globe. In 2007, Gold was 50 times more expensive than silver. But now that figure has reached to over 70 times, the highest in the past five years.
Must be major change in regulation: Geithner U.S. Treasury Secretary Timothy Geithner said on Friday he was willing to work with lawmakers on shaping an overhaul of financial regulations but insisted major changes are necessary. The financial crisis of the past two years show the financial system "failed in its most basic responsibility" to supply credit and protect consumers and that cannot happen again, he said in prepared testimony for delivery to the U.S. House of Representatives Financial Services Committee.
Following the Money: Report of TARP Special Inspector General Part 1
Skating on Thin Ice As 2009 moves past its midpoint, many market participants are briskly trying to forget the carnage of 2008 and the first quarter of 2009. But, before we get lost in the euphoria of the 36% Dow rally in the Spring/Summer of this year, a little hindsight is in order. In March, the Dow had plunged to 6,547, or some 53 percent down from its nominal 14,164 high in 2007. Despite the recent gains, we are still nearly 40% below the 2007 peak. This is a brutal truth that everyone seems to be ignoring. Last week, Merrill Lynch, that storehouse of economic sagacity, announced that the recession was over. Even the bearish NYU economist Nouriel Roubini was reported as saying "the worst is behind us." However, wishing earnestly for something does not make it so.
TARP Could Cost $23.7 Trillion!?!
UK economy falls in Q2, dashing recovery hopes Contraction in Britain's economy in second quarter dashes hopes of an imminent recovery The British economy contracted by twice as much as economists had forecast in the second quarter, leaving it mired in recession and dashing recent hopes of an imminent recovery as premature. Official figures released on Friday showed that the economy shrank by 0.8 percent between April and June amid a record fall in manufacturing output and declines in financial services. While the contraction was much smaller than the 2.4 percent recorded in the first quarter of the year, it was more than double the 0.3 percent average expected by economists.
Yuan Unlikely to Oust Dollar for a Decade The yuan won't replace the U.S. dollar as China's leading international trade currency at least for a decade because of limits on investment flows, according to an executive at Bank of Communications Co. A pilot program allowing Chinese companies to settle trade in their local currency has produced a "small" amount of business in the first three weeks, said Zhang Xiaoming, general manager at the international banking department of the nation's fifth-largest bank by assets. China should expand channels for companies to invest yuan to preserve the value of their assets or make a profit, he said.
Bernanke Sidesteps the Three Big Questions, Again In a recent international Bloomberg poll, Bernanke was rated by investors as the greatest central banker, the man who saved the world's economy. All it took was a doubling of the monetary base and $3 trillion – as of today – of government bailout money. The FED still faces three problems. (1) If it deflates, the financial markets will collapse. (2) If it does nothing, there will be mass price inflation if banks start lending, making use of the FED's doubling of the monetary base. (3) If banks don't start lending, the recovery will not appear. The FED wants to avoid all three. How?
Welcome to the Eye of the Storm The Dow has rallied nicely since March of this year. Washington, D.C. appears to be returning to the good status of "stalemate" which satifies the world. The "War against Terror" is now the police action against misguided radicals. All must be well with the world because bankster profits are off the scale and I swear Maria the Money Honey had an actual Bubblegasm reporting Apple's earnings this afternoon. Welcome to the eye of the storm. And that storm, as displayed above, is Hurricane Wilma, the most intense storm in recorded history. That storm is getting ready to move again and the most powerful part of the eyewall is about to slam into our economic fantasy land at full force.
Banks kick commercial real estate loans down road For the past six months or so, Wall Street has been bracing for what many fear may be the next shoe to drop on the already battered U.S. economy: a U.S. commercial real estate bust that could rival the housing market collapse. Yet, lenders have been keeping that shoe in the closet -- forestalling foreclosures by extending loans, despite rapidly rising mortgage default rates. "In today's environment, it's obviously not very attractive to foreclose on a borrower," said Matthew Anderson, co-founder of real estate consulting services firm Foresight Analytics.
Following the Money: Report of TARP Special Inspector General Part 2
Abandoned USDollar & Paradigm Shift A paradigm shift is underway, unrecognized inside the US kettle. Its water level is falling and its temperature is rising, even as fewer foreign born cooks stir its contents. The US banking and political leaders errantly pursue a path toward a return to normalcy, when all pathways have been washed out by powerful storms. Several key developments point to a new global order taking shape, as the Chinese actively work to plant global seeds that result in the Yuan currency serving more of a role in global trade. They will eventually de-throne the USDollar from its primal perch. The USDollar will be used less in global trade. The US$-based assets are being diversified. These developments are gaining traction, power, and publicity. The foreign creditors continue to protect their core US$-denominated reserves, while clearly undermining the US$ on the margin, as alternatives are chosen. To date, the alternative choice is hard assets, commodity supplies, and properties from the resource camp. The paradigm shift will change the face of the United States permanently, but to date few recognize the changing landscape.
The Myth of Fed Independence by Ron Paul Mr. Chairman, at a time when we find ourselves once again receiving a report on the Federal Reserve's conduct of monetary policy, it is more important than ever that we in the Congress push for more effective oversight and transparency of the Federal Reserve System. It would be unconscionable for this body, especially after the financial crisis of the last two years, not to take forceful and deliberate action to bring more transparency to the Fed.
The FED: No Exit The FED has changed enormously in the past nine months. Between last September and now, Reserve Bank credit has gone up 135 percent. Will the FED change back to what it used to be? Does it have a workable exit strategy? Very, very doubtful. The FED used to manage monetary policy, and that was about all. Today it’s engaged in fiscal actions that have to do with the government’s debts. The two main ones are that it is buying $300 billion of U.S. Treasuries and it is buying $1.25 trillion of mortgage-backed and agency debts. The FED traditionally bought U.S. debt, but never in such volume. The government deficits are so large that the FED will probably eventually announce one or more new programs to buy U.S. debt. At a minimum, these deficits ensure that the FED will not be soon selling what it now is in the midst of buying. No exit here.
CIT Chapter 11 Filing May Follow August Swap in Plan Advisers to bondholders that rescued CIT Group Inc. with a $3 billion loan said creditors may push the company into Chapter 11 bankruptcy after a debt swap next month, according to people familiar with the matter. If the company succeeds in swapping 90 percent of the $1 billion of floating-rate notes that come due Aug. 17, the lenders should require New York-based CIT to try to restructure out of court through debt exchanges with a pre-packaged bankruptcy option, Jeffrey Werbalowsky, chief executive officer of bondholder adviser Houlihan Lokey Howard & Zukin, said on a call with creditors yesterday, according to one of the people.
Bernanke cites option to raise interest rates Federal Reserve Chairman Ben S. Bernanke assured the Senate banking committee Wednesday that the Fed has developed an "exit strategy" that would enable the central bank to raise short-term interest rates to fight inflation when it eventually becomes necessary. Mr. Bernanke was confident the Fed will achieve this goal despite the fact that it has injected extraordinary amounts of liquidity throughout the banking system in fighting the worst financial crisis since the Great Depression.
Global Power and Global Government: Evolution and Revolution of the Central Banking System Humanity is on the verge of entering into the most tumultuous period in our history. The prospects of a global depression, the likes of which have never been seen before; a truly global war, on a scale never before imagined; and societal collapse, for which nations of the world are building totalitarian police states to control populations; are increasing by the day. The major global trend forecasters are sounding the alarms on economic depression, war, a return to fascism and a total reorganization of society. Through crisis, we are seeing the reorganization of the global political economy, and the transformation of capitalism into a totalitarian capitalist world government. Capitalism has never stayed the same through its history; it has always changed and will continue to do so. Its changes are explained and analyzed through political-economic theory, both mainstream theory and critical. The changes are undertaken over years, decades and centuries. The next phase of capitalism is one in which the world moves to a state-controlled economic system, much like, of totalitarian capitalism.
Roberts: Cap and Trade Will Hurt Kansas U.S. Senator Pat Roberts today warned cap and trade will have negative impacts on rural communities and agricultural producers in exchange for little to no reduction in carbon emissions. Senator Roberts joined former U.S. Secretary of Agriculture, U.S. Senator Mike Johanns (R-NE) and U.S. Senator John Thune (R-SD) at a press conference today on the issue. "USDA's analysis has holes big enough to drive a truck through," Roberts said. "It's based on EPA's political assumptions regarding energy use. EPA grossly underestimated the increased costs of natural gas and the increased costs of fertilizer. Energy costs paid by farmers, ranchers, local businesses, hospitals and you and I will skyrocket. Roberts said the legislation will damage rural main streets across America. "Kansas is home to three refineries, all located in small towns and each one employing over 600 people. If this bill becomes law, all three could close their doors.
Well-known Portland developer faces foreclosure John Beardsley, known for renovating historic downtown buildings, is Portland's first major commercial developer to see his properties move toward foreclosure amid growing problems nationwide in commercial real estate. Since May 1, lenders have filed default notices -- the first step in a foreclosure -- on 10 properties owned by Beardsley's companies. The defaults cover loans and sales contracts originally signed for $58 million and taken out during the real estate bubble between 2003 and 2007, according to Multnomah County property and court records Beardsley also owes the county $354,000 in back taxes, according to county records.
Miami Condos 94% Off We've seen lots of wild haircuts in the world of real estate, but nothing like this. Condovultures: A South Florida private equity group purchased 51 new, oceanfront condo-hotel units in the luxury One Bal Harbour complex at $63 per square foot, a discount of 94 percent off of the $1,100 per square foot average recorded sales price, according to a new report from Condo Vultures® LLC.
New U.S. jobless claims rise to 554,000 The number of newly laid-off U.S. workers seeking jobless benefits rose last week, though the government said its report again was distorted by the timing of auto plant shutdowns. Unemployment insurance claims have declined steadily since the spring, but most private economists and the Federal Reserve expect jobs to remain scarce and the unemployment rate to top 10 percent by year-end. The Labor Department said Thursday that its tally of initial claims for unemployment insurance rose by 30,000 to a seasonally adjusted 554,000. That was above analysts' estimates of 550,000.
The Price Of Oil Is Quietly Creeping Back Up After bottoming out on July 13th, the price of oil has quietly risen in the past two weeks. Today the price of a barrel closed at $67.16. Just like the oil rally earlier this year, it's got analysts that believe in the "fundamentals" of oil scratching their heads. Yes, we still have a big glut of oil. Nope, demand hasn't really improved. But, once again green shoots this time in the form of earnings that aren't catastrophic, investors are betting demand will bounce back.
* * * * * * pay attention to this one! * * * * * * Billions of People Expected to Die Under Current Codex Alimentarius Guidelines Your right to eat healthy food and use supplements of your choice is rapidly vanishing, but every effort has been made to keep you in the dark about the coming nutricide. Codex Alimentarius is scheduled for full global implementation on December 31, 2009, and not a word has been spoken in main stream media about this threat to humanity. Yet, according to the projections of the World Health Organization (WHO) and the Food and Agriculture Organization (FAO), a minimum of 3 billion people will die from the Codex mandated vitamin and mineral guideline alone. As the clock ticks toward this irrevocable deadline, the Natural Solutions Foundation (NSF) and its medical director, Dr. Rima Laibow, are feverishly working to change Codex guidelines. They need your help. Former Nazi is father of contemporary Codex
Forced Flu Shot - Governments preparing to vaccinate the entire populace? Are the governments of the world preparing to vaccinate the entire populace? It seems that may be the case. According to Reuters 4.9 billion vaccinations against the supposed swine flu could be ready shortly. Is Obama showing the first card? Documents have been leaked that suggest the CDC is preparing to have a Day of Planning for an H1N1 Vaccination Campaign. The WHO” is also now saying that because of the outbreak in Japan they may be forced to declare a level 6 pandemic.
No Healthcare Plan - America will become bankrupt - Joe Biden Vice President Joe Biden told people attending an AARP town hall meeting that unless the Democrat-supported health care plan becomes law the nation will go bankrupt and that the only way to avoid that fate is for the government to spend more money. “We’re going to go bankrupt as a nation,” Biden said. “Now, people when I say that look at me and say, ‘What are you talking about, Joe? You’re telling me we have to go spend money to keep from going bankrupt?’” Biden said. “The answer is yes, that’s what I’m telling you.”
Obama Open to Bank Fees for Risks, Surtax for Health-Care Plan President Barack Obama signaled support for a proposal to impose fees on some of the nation's largest financial firms to cover losses from risky transactions and avert another market meltdown. Obama, at a White House news conference last night, said the U.S. may need a mechanism similar to the Federal Deposit Insurance Corp. for firms that engage in "some of these other far-out transactions" that put the financial system at risk. "So if you guys want to do them, then you've got to put something into the kitty make sure that if you screw up, it's not taxpayer dollars that have to pay for it, but it's dollars coming out of your profits," he said.
Reid: No Vote on Health-Care Reform Before Aug. Recess Majority Leader Harry M. Reid (Nev.) confirmed Thursday that the Senate would not pass health-care reform legislation before the August recess. That the Senate would miss President Obama's Aug. 7 deadline had been obvious for days, if not weeks, as the Finance Committee methodically crafts the one version of the legislation that is expected to gain bipartisan support. But Reid finally made it official, informing reporters that he had granted a request for more time from GOP negotiators. "I don't think it's unreasonable," Reid said. "This is a complex, difficult issue."
Obama pegs health reform to future Obama sees support from some in GOP President Obama, seeking to reclaim momentum in the push for health care reform, told a prime-time national audience that their future was at stake in the debate and predicted the final deal would attract some Republican support. At his 10th extended news conference since taking office six months ago, Mr. Obama frankly acknowledged rising skepticism among voters about his ambitious plan, saying Americans feel "understandably queasy" about the ballooning federal debt.
Potential Change in the Federal Employees Health Benefits Program
Obama health-care claims disputed Even as President Obama delivered a prime-time sales pitch for his embattled health care reform plan Wednesday, basic facts about coverage, cost and who foots the bills remain in dispute and many of the president's favorite talking points are challenged not only by Republicans but also by independent fact-checkers. For example, Mr. Obama promises that people who are happy with their current health insurance can keep it. That's a claim contradicted by Factcheck.org, a nonpartisan consumer advocacy group at the University of Pennsylvania's Annenberg Public Policy Center.
Mayo Clinic calls House plan bad medicine Obama loses support on reform A world-renowned clinic that President Obama held up as an example of good medicine said Monday that the American people would be "losers" under the House's health care proposal, joining the growing chorus of critics the Obama administration is trying to fend off as the debate intensifies from Capitol Hill to Main Street. Minnesota's not-for-profit Mayo Clinic, which Mr. Obama has repeatedly hailed as offering top quality care at affordable costs, blasted the House Democrats' version of the health care plan as lawmakers continue to grapple with several bills from each chamber and multiple committees.
Ex-IBM Employee reveals TV Abandoned Analog Band to Make Room for RFID Chips Is Micro-chipping the World Behind Switch to DTV? According to a former 31-year IBM employee, the highly-publicized, mandatory switch from analog to digital television is mainly being done to free up analog frequencies and make room for scanners used to read implantable RFID microchips and track people and products throughout the world. So while the American people, especially those in Texas and other busy border states, have been inundated lately with news reports advising them to hurry and get their expensive passports, “enhanced driver’s licenses,” passport cards and other “chipped” or otherwise trackable identification devices that they are being forced to own, this digital television/RFID connection has been hidden, according to Patrick Redmond.
Obama Administration to Implement Government Flu Shot Program??
Clinton offers 'defense umbrella' for allies Considering nuclear Iran Reprising a position from her presidential campaign, Secretary of State Hillary Rodham Clinton said Wednesday the United States could extend a "defense umbrella" over its allies in the Persian Gulf if Iran does not abandon its pursuit of nuclear weapons. It appeared that Mrs. Clinton was not announcing a new U.S. policy and was speaking off the cuff. The White House and Pentagon had no immediate reaction to her comment, but Israel criticized it and suggested that it meant that the U.S. had accepted the prospect of a nuclear-armed Iran.
ACORN A Criminal Front And Should Never Work With US Government Again
Gold, Silver Gain as Dollar Drop Boosts Demand; Platinum Falls Gold rose for the third time in four sessions as the dollar weakened, boosting the appeal of precious metals as a store of value. Silver gained while platinum fell. The dollar slipped as much as 0.5 percent against a basket of six major currencies as Federal Reserve Chairman Ben S. Bernanke reasserted a plan to keep benchmark U.S. lending rates at historic lows for an “extended period.” Last week, gold prices jumped 2.7 percent as the dollar slumped. “If the dollar starts to weaken significantly again, it will send gold off to the races,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago.
Gold and Silver and the Coming Collapse Societal collapse and widespread suffering are prospects I do not enjoy contemplating; and, were it not for my deep belief that what we see is what we see, not all there is, I would face the future with far less equanimity than I do. We are in for some truly terrible times. The green shoots "seen" by Geithner and Bernanke make the LSD-based hallucinations of my generation seem rooted in rational experience; but those believing in these hallucinatory green shoots will find reality to be far different when the banker's world of credit-based paper disintegrates.
24 Trillion Reasons to Buy Gold It is a worst case scenario, but Neil Barofsky, the inspector general for the Troubled Asset Relief Program, has said the bailouts, bank rescues and other economic lifelines could end up costing the federal government as much as $23.7 Trillion. To put this number into perspective, it is nearly double the nation’s entire economic output for a year, more than the cost of all the wars the United States has ever fought combined and the most the federal government has spent on any single effort in American history. It is about $80,000 for every U.S. citizen.
Why gold is holding above $900 in July Weakness in the U.S. dollar and rising oil prices gave gold another boost on Monday. Gold futures rose 1.2 per cent to end at their highest level in more than five weeks as a private-sector rescue of U.S. lender Cit Group raised economic optimism, pressuring the dollar lower against most of its major rivals. Analysts also cited some buying in anticipation that prices will move higher later in the year on inflationary concerns. August gold rose $11.30 to $948.80 an ounce on the Comex division of the New York Mercantile Exchange. September silver climbed 22.2 cents to $13.625.
Gold demand up by 38% Even though demand for jewellery has come down during the recession, the world bullion market witnessed a surge in demand from investors in the March quarter. According to media reports, global demand for gold soared 38 per cent in the March quarter, compared to the corresponding period in 2008, as investors banked on the precious metal’s safe haven role. Experts said jewellery demand weakened, which isn’t surprising given the extreme economic conditions that .consumers face: rising unemployment, falling house prices and low levels of consumer confidence.
RON PAUL ON CAVUTO EXPLAINING THAT THE FEDERAL RESERVE IS DEEPLY FLAWED
Nature, Wealth, and Money Since the beginning of the current series of Archdruid Report posts on economics, I've wondered in an idle sort of way if it might come to the attention of a professional economist or two. Last week's post, though, seems to have settled that issue. I deliberately begged a question in that post, one that cuts to the core of conventional economic theory, and it would have taken a degree of self-control exceedingly rare in any profession for a mainstream economist to read the discussion and not rise to the bait.
Inflation - the real threat to sustained recovery Alan Greenspan The rise in global stock prices from early March to mid-June is arguably the primary cause of the surprising positive turn in the economic environment. The $12,000bn of newly created corporate equity value has added significantly to the capital buffer that supports the debt issued by financial and non-financial companies. Corporate debt, as a consequence, has been upgraded and yields have fallen. Previously capital-strapped companies have been able to raise considerable debt and equity in recent months. Market fears of bank insolvency, particularly, have been assuaged.
Dollar Trades Near Seven-Week Low on Reduced Demand for Safety The dollar traded near a seven-week low versus the euro as resilience in equities reduced demand for the relative safety of the world’s main reserve currency. The yen and dollar fell yesterday against higher-yielding currencies including the South African rand and Mexican peso as the Standard & Poor’s 500 Index touched the strongest level since November. The rand climbed to the strongest level versus the dollar in July as gold prices increased. “While the G-10 currencies are perhaps struggling a little bit, we’re seeing some select strength in some of the emerging and commodity currencies,” said Nick Bennenbroek, head of currency strategy at Wells Fargo & Co. in New York.
Too big to fail? Wall Street, we have a problem The moon vehicle system was based on a modular design. One advantage of such a design – that failure in one component is less likely to compromise the whole – was demonstrated on the Apollo 13 mission. The astronauts were brought back safely to earth despite an explosion that damaged systems on the principal craft. Any engineer will tell you of the importance of making complex systems robust. You need inspections to prevent failure, to be sure: but since failures are inevitable it is equally important to try to ensure that the consequences of such failure are contained.
US banks warn on commercial property Two of America’s biggest banks, Morgan Stanley and Wells Fargo, on Wednesday threw into sharp relief the mounting woes of the US commercial property market when they reported large losses and surging bad loans. The disappointing second-quarter results for two of the largest lenders and investors in office, retail and industrial property across the US confirmed investors’ fears that commercial real estate would be the next front in the financial crisis after the collapse of the housing market. The failing health of the $6,700bn commercial property market, which accounts for more than 10 per cent of US gross domestic product, could be a significant hurdle on the road to recovery.
RON PAUL JULY 22, 2009 ON MSNBC DISCUSSING AUDITING THE FED HR 1207
Fed Aims to Hold Down Interest Rates The economy is finally improving, but enough potholes lie ahead that the Federal Reserve needs to keep interest rates close to zero, at least until unemployment begins to come down, the Fed’s chairman, Ben S. Bernanke, told Congress on Tuesday. “On net, the past few months have seen some notable improvements,” Mr. Bernanke said in his semiannual report to the House Financial Services Committee. The pace will pick up next year and accelerate in 2011, he said, but unemployment will remain high, damping down inflation for two more years.
Bernanke Jabs Back at Fed's Critics In Congress Lawmakers More Vocal About Rescue Program As Recession Persists Federal Reserve Chairman Ben S. Bernanke launched a more aggressive defense of the central bank's multitrillion-dollar campaign to prop up the economy, as government bailouts came under fire Tuesday from all directions on Capitol Hill. Lawmakers were reluctant to second-guess rescues and interventions in the darkest days of the financial crisis. But now, with the financial system stabilizing and the unemployment rate at 9.5 percent and climbing, there is deepening frustration in Congress and around the country that there is not more to show from the trillions of dollars the government has put at risk.
Ron Paul's Statement at Financial Services Committee Hearing The Federal Reserve in collaboration with the giant banks has created the greatest financial crisis the world has ever seen. The foolish notion that unlimited amounts of money and credit, created out of thin air, can provide sustained economic growth has delivered this crisis to us. Instead of economic growth and stable prices it has given us a system of government and finance that now threatens the world financial and political institutions.
The Beginning of the End of the Dollar? Some interesting news today on the currency front. Remember all the hoopla a few months ago about how the dollar was going to be replaced by a wacky new IMF backed currency that went by the acronym “SDR” – or special drawing rights? China was calling for the new system, and U.S. Treasury Secretary Tim Geithner didn't rule it out. Well, the IMF is now on the verge of taking a big leap towards this new system, with a proposal to increase the supply of these SDRs (which are basically just a bundle of several currencies including the dollar, yen, sterling, and the euro) by eightfold. The IMF will vote on the measure on August 7th and would start issuing the new currency by the end of the month.
World Prepares to Dump the Dollar American economists think the world can’t afford to let go of the dollar’s reserve currency status. The world is about to teach them differently. What do China, India, Brazil, Russia, France and Germany have in common? These countries most often can’t agree on anything. But they are united in one strange—and ominous—way. They blame the United States for wrecking the global economy. And they think the dollar is the wrecking ball.
China Politely Moves Away from Dollar China's sovereign wealth fund has taken about 1 percent in drinks group Diageo, in a move which an analyst said is a sign the country is diversifying away from the US dollar. "Diageo is pleased that one of the largest Chinese investment funds has taken a shareholding of approximately 1 percent in the company," a company spokesman told CNBC in a statement.
RON PAUL ON CNBC KUDLOW JULY 21, 2009
THE NEXT GLOBAL FINANCIAL CRISIS: PUBLIC DEBT The cloud of the global financial meltdown has not even cleared, yet another crisis of massive proportions looms on the horizon: global sovereign (public) debt. This crisis, like so many others, has its root in the free flow of credit from the preceding economic boom years. The market prices of assets were rising steadily. Rising valuations, especially where they were based on improving revenues from robust economic activity, led to rising income streams for governments. This encouraged governments to borrow more, perhaps often to expand services – and the bureaucracy required to offer services – although sometimes to improve infrastructure.
Taxpayers Inferior to Shareholders With Obama Bonds State and local governments, forced to close budget gaps by firing workers and shutting schools, may pay at least $4.2 billion more in interest than companies with similar credit ratings on Barack Obama’s Build America Bonds. The $17.4 billion of Build America Bonds sold since April pay an average yield that’s 0.96 percentage point more than corporate securities with the same ratings, according to data compiled by Bloomberg and based on the 25 largest deals. “Taxpayers are taking it on the chin,” said G. Joseph McLiney, president of Kansas City, Missouri-based McLiney & Co., a firm that specializes in selling municipal bonds that qualify for federal tax credits. “There should be no spread.”
Global Exposure in Financial Derivatives Surpasses One Quadrillion Dollars When I posted the lowest responsibly sourced figure for global exposure in financial derivatives, $592 trillion, published May 19, 2009 by the Bank of International Settlements, all sorts of hoodoo apologists for Obama, Geithner, Summers, and Goldman Sachs crawled out the woodwork to claim that this figure is ridiculously exaggerated, there's really nothing to worry about, it's just a few bucks, and so on. All the same hoodoos unfailingly claimed that it's stupid to consider worst-case scenarios when you calculate risk, because... They have learned absolutely nothing from the ongoing financial meltdown which annihilated some of the oldest and largest investment banks in the world, and plunged the global economy into an almost vertical downturn.
Is The Market Underestimating The Potential Fallout From A CIT Collapse? Donna Childs and Sameer Bahtia argue that the market is seriously under-estimating the possibility of a systemic freeze-up of financial markets if CIT's capital crisis leads to a collapse. Credit default swaps are at the lowest levels in months, the stock market has been rallying. And the government had declared CIT can drop dead. Shouldn't there be a bit more fear?
Fannie & Freddie: The most expensive bailout Efforts to use the troubled mortgage finance firms to fix housing market problems are likely to push the taxpayer bill for Fannie & Freddie above $100 billion. The first big government bailout of the financial crisis -- the takeover of mortgage finance giants Fannie Mae and Freddie Mac -- is poised to be the most expensive and complicated to complete. Since Congress essentially wrote a blank check to the Treasury Department in July 2008 to do what needed to be done to inject capital into the two firms, Fannie (FNM, Fortune 500) has received $34.2 billion of direct government support while Freddie (FRE, Fortune 500) has received $51.7 billion.
Marc Faber the governments want you to lose money on Cash
Bernanke resists plan for consumer-products agency Bernanke resists Obama plan to create consumer-products agency, strip Fed of some oversight Ben Bernanke put himself at odds with the Obama administration Wednesday by resisting its plan to create a U.S consumer protection agency for risky financial products. The Federal Reserve chief said those responsibilities should stay with the central bank. Bernanke's pushback on the White House plan comes at a politically delicate time for the Fed chairman. His term expires early next year, and President Barack Obama will have to decide whether to reappoint him. In his second straight day in Congress, Bernanke argued that the Fed has expertise that would be difficult to replicate at a new agency. Consumer oversight, he said, coincides with the Fed's mission to oversee the safety and soundness of banks.
Bernanke Says Add Consumer Protection to Fed Mandate Federal Reserve Chairman Ben S. Bernanke said consumer protection should be added to the Federal Reserve Act as a formal policy goal along with low inflation and full employment, showing a willingness to work with Congress and reshape laws that govern the central bank. “We were not quick enough, we were not aggressive enough to address consumer issues earlier in this decade,” Bernanke, 55, said in response to a question from Christopher Dodd, the Connecticut Democrat who chairs the Senate Banking Committee. “My recommendation to you to consider, Mr. Chairman, would be to ask whether there are steps that could be taken to strengthen the commitment of the Federal Reserve,” Bernanke said on the second day of his semiannual testimony to Congress. “One would be to put consumer protection in the Federal Reserve Act along with full employment and price stability as a major goal of the Fed.”
Buyers of bad debt bide time as U.S. consumers fret The worst is yet to come for debt-laden, cash-strapped and increasingly jobless U.S. consumers. At least that is the view of major debt collectors -- many of which are holding off on acquiring much in the way of troubled consumer debt from banks and other institutions, betting that it will get cheaper as the economy languishes. With unemployment and defaults on the rise, companies like Portfolio Recovery Associates Inc (PRAA.O), Asset Acceptance Capital Corp (AACC.O) and Encore Capital Group Inc (ECPG.O) hope to be able to grab bad debt portfolios at fire-sale prices later this year.
Dollar hits 7-week low versus basket Greenback loses its safe haven appeal as stocks churn and data shows an increase in U.S. home prices. The dollar hit a seven-week low versus a basket of currencies Wednesday as steady stock markets and data showing stronger U.S. home prices offset weak bank earnings, denting the greenback's safe-haven allure. U.S. stocks seesawed with the Nasdaq gaining for its 11th straight session, buoyed by solid profits from Apple Inc (AAPL, Fortune 500). European shares also closed higher for the eighth straight session. "We've seen the stock markets grind higher ... and that has helped currencies gain a bit of a bid against the U.S. dollar," said Sacha Tihanyi, currency strategist at Scotia Capital in Toronto.
Marc Faber China had an over investment Bubble
U.S. business warns Congress of "green trade war" Leading U.S. business groups warned Congress Wednesday it could start a "green trade war" by passing a climate change bill that threatens other countries with tariffs on energy-intensive goods. "We urge the Senate to refrain from including provisions that could negatively impact U.S. relations with key trading partners and disrupt the global trading systems," the U.S. Chamber of Commerce, the National Foreign Trade Council and two other groups said in a letter to Senate leaders. "Climate change is a global problem that calls for international cooperation, not unilateral ultimatums."
GOP Lawmakers Assail Federal Meddling on Autos; Dealers Defended in Both Parties The government bailout of General Motors and Chrysler was roundly criticized by both Republicans and Democrats on Tuesday as a House subcommittee heard testimony from the chief of the Obama administration's auto task force. It was the Republicans on the House Judiciary Committee's administrative-law panel, however, who raised the gravest alarms over the aid to the automakers, depicting the bailout as an abandonment of the rule of law and the practice of capitalism.
Congresswoman Backs New Equal Rights Amendment; Points to Afghanistan, China as Models Rep. Sheila Jackson Lee (D-Texas) told activists rallying on Capitol Hill in support of the newly reintroduced Equal Rights Amendment (ERA), that the United States should join 27 other countries that have equality guarantees for women, including Rwanda, Algeria, China and Afghanistan. “It does make a difference if an Equal Rights Amendment is in place or not,” Lee told the people who gathered outside of the Capitol on Tuesday . “Twenty-seven other countries, including Rwanda, Afghanistan, Algeria and China have equality provisions,” Lee said.
MAX KEISER ON GOLDMAN SACHS 1 OF 2
Opposition mounts for Obama's consumer plan Proponents of plan to protect consumers of financial products have called a timeout. Fed doesn't like the idea, but top Democrats are pushing hard. One of the signature proposals in the Obama administration's efforts to reshape the regulatory framework for banks has been slowed as supporters regroup in the midst of mounting opposition. The creation of a new consumer protection agency to regulate mortgages, credit cards and credit insurance was never going to be easy. But the forces trying to stop or water down the proposal have grown beyond banks and financial sector lobbyists.
Obama: "You're going to destroy my presidency." President Obama could hardly be described as insecure or lacking in self-confidence. Or could he? A report on CongressDaily this morning suggests that a recent comment by Senator Jim DeMint (R-SC) hit close to home for the president. The comment came last Friday while Senate Republicans were discussing Obama's healthcare plan. "If we're able to stop Obama on this, it will be his Waterloo. It will break him," said the senator. Now, there is speculation that that comment will hurt any chance for bipartisan support of the healthcare legislation:
Obama Approval at 87% Outside U.S.; 49% at Home Among Investors President Barack Obama has rock-star appeal among the investing class -- except in his own country. The Quarterly Bloomberg Global Poll of financial investors and analysts finds attitudes about the new president in Asia and Europe are overwhelmingly positive. In the U.S., by contrast, they are slightly negative. In Europe and Asia, 87 percent of respondents say they view Obama positively, compared with just 49 percent in the U.S. His standing among American investors is even lower on economic matters: only a quarter of U.S. poll respondents rate his economic policies as “good” or “excellent,” compared with more than half in Europe and Asia.
Sallie Mae Loss Blamed On Investment Trouble Student loan giant Sallie Mae reported a second-quarter loss of $123 million Tuesday as it continued to feel the effects of a severe recession. The loss of 32 cents a share was in contrast to a profit of 50 cents a share, or $266 million, in the corresponding period a year ago, the Reston lender said. The company, officially known as SLM Corp., attributed much of the loss to a $484 million markdown on unrealized derivative and hedging activities. Excluding one-time charges, the company's core profit was $170 million, or 31 cents a share, up from $156 million, or 27 cents a share.
Credit Card Companies Take Another Hit As AAA Bows Out When it rains, it pours. The American Arbitration Association, often the go-to arbitration forum, has voluntarily agreed to stop participating in consumer-related debt collection disputes until guidelines addressing such battles are developed. This is an immediate follow-up to the lawsuit filed last week against the National Arbitration Forum that led to it agreeing to end its oversight of disputes between credit card companies and their customers.
Wells Fargo Sinks Despite "Record" Profit Whoo-hoo, record profit at Wells Fargo (WFC). Too bad investors don't seem to care, or don't believe it. Shares of Warren Buffett's favorite bank are off over 5% pre-market, despite record net income of $3.17 billion and record revenue of $22.5 billion, helped in significant part by the acquisition of Wachovia. The company also says it expects to have a stress test cushion soon (remember, they're one of the left-behinds that aren't yet in position to repay TARP).
MAX KEISER ON GOLDMAN SACHS 2 OF 2
Street Fighting Man We live in interesting times. But we're not necessarily cursed Longtime readers know my standard response to questions about the severity of the Greater Depression: it's going to be worse than even I think it's going to be. "Coming Collapse" books will undoubtedly accumulate into an entire genre in the next few years, as they did a generation ago. This time it's not just fear mongering, although things won't get as bad as in James Kunstler's book "The Long Emergency " and certainly not as rough as in the movies "Road Warrior" or "I Am Legend." But it's a good bet that a lot more is going to change than just some features of the financial system. Let's engage in a little speculation as to the shape of things to come.
You Must Have Health Insurance, It's The LAW The healthcare reforms we've been calling "Pelosicare" -- because they're such an incoherent hodge-podge of ideas that only the august US Congress could dream up -- is actually three separate bills, each with different variations on the same theme. The Washington Post notes one common thread though: they all will make it practically illegal to be uninsured. When you file your taxes you'll have to prove some minimum level of care (though there will be rebates, naturally, for the poor).
Obama says healthcare crucial for economy U.S. President Barack Obama said on Wednesday a broad healthcare overhaul was critical to an economic recovery and promised to push a reform package through Congress this year despite growing doubts about the plan, even among fellow Democrats. In remarks prepared for his opening statement at an evening news conference, Obama said the biggest driving force behind the federal deficit was skyrocketing healthcare costs. "If we do not control these costs, we will not be able to control our deficit," he said after another day when leaders in Congress struggled to find common ground on the cost and scope of a healthcare plan, Obama's top legislative priority.
Obama seeks new health care momentum Launches offensive against GOP critics The White House on Tuesday launched a full offensive to regain control of the health care debate, wooing conservative Democrats with promises of cost cutting and attempting to paint Republican critics as attack dogs blocking change. President Obama is scheduled to hold a prime-time news conference Wednesday, as polls suggest he is losing ground on the issue. Republicans are exploiting fears about the state of the budget and the economy to slow the momentum on Capitol Hill. Fiscally conservative Blue Dog Democrats huddled with Mr. Obama for more than an hour Tuesday at the White House and told reporters that the president promised them that the bill he signs will not expand the federal deficit over the long term.
Obama goes prime-time to pitch healthcare U.S. President Barack Obama shifts his effort to convince the American people healthcare reform is the right thing to do right now to prime time Wednesday. In an evening news conference, Obama is expected to outline the case for healthcare reform as well as provide an update on what has been accomplished since he took office in January. White House Chief of Staff Rahm Emanuel told The New York Times Obama intends to use the news conference as a "six-month report card," to talk about "how we rescued the economy from the worst recession" and the legislative agenda moving forward, including health care and energy legislation.
Reforming Health Care: Deforming Economic Health The "free lunch" lie is served If we medicate enough people, maybe no one will notice that we are destroying the one sector of the economy that is producing jobs. It would seem this must be the secret hope spinning through the minds of many politicians, as they get set to knowingly vote the nation into an economic emergency ward. Admittedly, something needs to be done. The current health-care system is a shambles. There is a solution. But it is not any of the plans currently being pushed. Nor is it the status quo. It is a real health-care revolution. Politicians are seemingly so concerned with your health that they want to require everyone to be part of a publicly funded health-care plan. Sounds great! Yet, ironically they themselves will not be victims of the new health-care plans they are forcing on everyone else. No public health care for Capitol Hill legislators; they get to keep their current government health-care plans. Doesn’t exactly inspire confidence in the new plan does it?
Why Congress is stalling Obama's health plan The $1 trillion price tag has to come from somebody's pockets -- and legislators aren't ready to confront those details. President Obama's rush to rescue his health-care plan is coming just in time, because its critics are starting to give it a bad rap. On Monday, the Republican National Committee unveiled an ad that lumps the President's health-care reform efforts with the bank and auto bailouts. As forlorn looking children stare back at the camera, a voice intones that Obama's plan is simply a "massive spending experiment" -- yet another risky, big-ticket item that will leave a burden on future generations. In short, critics say, it's all getting too expensive. Obama never promised that a lofty goal like providing affordable health care to all Americans wouldn't cost anything -- he pledged only that the reform will pay for itself, meaning it won't deepen the federal deficit.
Pelosi Says She Has Votes to Pass House Health Plan House Speaker Nancy Pelosi said she has the votes to pass legislation overhauling the U.S. health- care system as Democratic Party leaders moved closer to an agreement with rebellious members of their own party. Leaders are “making progress” with Democrats who want more cost cuts in the legislation, Pelosi told reporters in Washington today, a day after President Barack Obama met with a group of Democrats to try to convince them to back the plan. “I have no question we have the votes on the floor of the House to pass this legislation,” Pelosi said.
The Dark Years Are Here In this newsletter we will outline what is likely to be the devastating effect of the credit bubbles, government money printing and of the disastrous actions that governments are taking. Starting in the next 6 months and culminating in 2011-12 the world will experience a series of tumultuous events which will be life changing for most people in the world. But 2011-12 will not be the beginning of an upturn in the world economy but instead the start of a long period of economic, political and social upheaval that could last for a couple of decades.
Experts paint 'a worrisome picture' on jobs Some fear rising unemployment will cause economic problems to snowball Consider: Is unemployment a "leading" or a "lagging" economic indicator? Most investors who follow economic news would probably say "lagging," because that's the conventional wisdom. Companies don't restart hiring until the recession is ending, the thinking goes, so the unemployment rate tends to stay high even after the recovery begins. Bullish stock market pundits have been eager to highlight that thinking lately as the unemployment rate has jumped to 9.5 percent. Their reasoning: If you are an investor waiting for a recovery, you don't need to worry much about unemployment -- it's going to come down. In other words, don't hesitate to buy stocks now, because the job picture will sort itself out.
A city without chain grocery stores National retailers are steering clear of Detroit, leaving independent grocers to serve the city's hard-hit residents. Detroit is one of America's largest cities, but there isn't a single grocery chain store within the city limits. Spurned by national retailers, Detroit's nearly 1 million residents instead rely on independent stores run by local entrepreneurs for their most basic needs. But for those entrepreneurs, staying in business can be a struggle. Running a grocery store "requires a lot of working capital up front, and small problems early on can escalate," says Olga Stella, vice president of business development for the Detroit Economic Growth Corp., a quasi-government development agency. "It's like any small business, but it has added complications because you're selling a highly perishable product that has very little collateral."
U.S. Home Prices Have Smallest Decline in 10 Months U.S. home prices had the smallest annual drop in 10 months, signaling the free fall of property values is abating in the three-year housing slump at the center of a global recession. Prices declined 5.6 percent in May from a year earlier and rose 0.9 from April, the Federal Housing Finance Agency in Washington said today. Economists expected a 0.2 percent drop for the month, according to the median of 16 estimates in a Bloomberg survey.
Mom-and-Pop Operators Key In a Marketing Edge Three weeks after Curtis Kimball opened his crème brûlée cart in San Francisco, he noticed a stranger among the friends in line for his desserts. How had the man discovered the cart? He had read about it on Twitter. For Mr. Kimball, who conceded that he “hadn’t really understood the purpose of Twitter,” the beauty of digital word-of-mouth marketing was immediately clear. He signed up for an account and has more than 5,400 followers who wait for him to post the current location of his itinerant cart and list the flavors of the day, like lavender and orange creamsicle.
Senate kills gun amendment In an unexpected defeat for the gun lobby, the Senate on Wednesday voted narrowly to kill an amendment that would have allowed gun owners to carry concealed firearms across state lines so long as they have valid permits or permission from their state of residence to do so. Backers of the amendment, sponsored by Sen. John Thune, South Dakota Republican, received 58 votes -- two short of the 60 needed to overcome a minority filibuster and add the measure to a defense authorization bill now on the Senate floor. Thirty-nine senators voted against the amendment. The loss came despite support from a number of pro-gun-rights Democrats, including Senate Majority Leader Harry Reid of Nevada. The National Rifle Association also had said it would score the vote in its ranking of lawmakers on gun-rights issues.
US pledges to defend Gulf against Iran Hillary Clinton said on Wednesday that the US was ready to guarantee the safety of its Gulf allies against Iran and would increase pressure on North Korea, as she set out Washington’s strategy to tackle nuclear proliferation from Tehran and Pyongyang. Speaking on a visit to Thailand, the US secretary of state sought to counter recent setbacks to the Obama administration’s plans for negotiations with Iran by insisting that the US could “extend a defence umbrella over the [Gulf] region” if Tehran developed a nuclear weapon. In the face of recent missile and nuclear tests by North Korea and worries about its military and possibly nuclear links with Burma, she also argued that Pyongyang would be subjected to “unrelenting” sanctions unless it irreversibly ended its nuclear weapons programme.
U.S., Israel at odds over 2003 settlements accord Israeli officials Tuesday accused the Obama administration of failing to abide by an agreement allowing settlement construction, but a key Israeli negotiator said the deal was never implemented. The unfinished negotiation between the administrations of Israeli Prime Minister Ariel Sharon and President George W. Bush has contributed to rising tensions between the two allies since the Obama administration took office. The U.S. insists that Israel freeze settlement construction to improve the prospects for Israeli-Palestinian negotiations. Israeli officials have claimed that a 2003 understanding with the Bush administration permitted "natural growth" within settlements expected to remain under Israeli control even if a Palestinian state is created.
pt1/4 Gerald Celente on the Alex Jones Show 22 july 2009
pt2/4 Gerald Celente on the Alex Jones Show 22 july 2009
pt3/4 Gerald Celente on the Alex Jones Show 22 july 2009
pt4/4 Gerald Celente on the Alex Jones Show 22 july 2009
Fed, Treasury take heat on Capitol Hill Lawmakers demand transparency from agencies handling bailouts Two government institutions at the heart of America's financial-rescue operations took fire from both sides of the aisle Tuesday on Capitol Hill over lack of transparency and accountability. Members of a House panel blasted the Treasury Department for failing to adopt several recommendations by an independent watchdog to increase openness and public scrutiny of the massive Wall Street bailout program. "The taxpayers now have a $700 billion spending program that's being run under the philosophy of 'don't ask, don't tell,' " said House Oversight and Government Reform Committee Chairman Edolphus Towns, New York Democrat.
Ron Paul Opening Statement Fed Hearing 07/21/2009
Bernanke: Slow recovery will begin this year The Federal Reserve, which lowered its target overnight interest rate to near zero last year, expects to maintain that rate "at exceptionally low levels for an extended period," Fed Chairman Ben S. Bernanke told the House Financial Services Committee on Tuesday morning. Economic output should "increase slightly" during the second half of 2009, the Fed chairman said. "The recovery is expected to be gradual in 2010, with some acceleration in activity in 2011," he said. The Fed's latest economic forecast expects the unemployment rate to peak at the end of this year near 10 percent. However, "the projected declines in 2010 and 2011 would still leave unemployment well above" the Fed's view of the longer-run sustainable rate.
Fed Throttles Back, Having Achieved Little The stock market carved out yet another bowl-shaped formation on the intraday charts yesterday, making everyone who bought the dip a lucky winner. Stocks have swooned in four of the last five sessions and closed higher for six consecutive days, but yesterday's swoon was a little more dramatic than the others. Some attributed the selloff portion of the day to mounting concerns that President Obama's tax proposals will soak not only the "rich," but the middle class. Whatever misgivings investors may have had about this were forgotten later in the day, however, when Helicopter Ben, in testimony before Congress, promised there would be no tightening until such time as the tempo of the U.S. economy picks up significantly. This should have come as good news to monetarists, since, given the grave structural weakness of the economy, it might be another ten years before things start to pick up significantly.
Marc Faber Gold price will explode
Dollar breakdown may catapult gold to $1224 MOPE (management of perspective economics - the new economics) worked overtime to seek new lows in gold but their accomplishment has been minimal at best. Keep the following in mind:
The price of gold is all in the dollar and has been since we met. Itwill continue to be.
China is quite upset with the disrespect received and what is perceived by them to be the Western element in the recent disturbances in remote provinces and an NGO believed to be financed by the West.
The weak position of the dollar could easily be an Achilles heel.
Dollar collapse will propel gold, silver, copper prices Gold is the hottest commodity among the bullion metals. Copper is the hottest commodity in the base metals camp. But if you compare gold with copper, which is hottest? Gold or copper? Which commodity will you invest in? Is gold or copper which is shining better? . . . . . . . . Let us first look at the economic recovery. Is there really a recovery going on? Well, there is certainly a bounce from horrific levels we saw last year in almost all markets. The latest reports suggest that China has been buying up commodities and grains while prices are low. That data is correct. They have been huge buyers of both.
China gold reserves to boost bullion market The implications of China increasing its gold reserves will be positive and even if purchases are small in the context of the Asian giant's overall foreign reserves, it could still turn out to be significant for bullion market, according to Philip Klapwijk, Chairman of GFMS Ltd, In an exclusive article to American Advisor,a quarterly newsletter of Goldline International, he said that the China buying will boost sentiments in bullion market. Klapwijk discusses the significance of China's increase in its gold reserves and its potential positive effect on future gold prices at length in the article.
Seeing Future Perils, Fed Aims to Hold Down Rates The economy is finally improving, but enough potholes lie ahead that the Federal Reserve needs to keep interest rates close to zero, at least until unemployment begins to come down, the Fed's chairman, Ben S. Bernanke, told Congress on Tuesday. "On net, the past few months have seen some notable improvements," Mr. Bernanke said in his semiannual report to the House Financial Services Committee. The pace will pick up next year and accelerate in 2011, he said, but unemployment will remain high, damping down inflation for two more years.
Lawmakers Call for Tighter Reins on Bailout Program Two senior Democratic lawmakers called on the administration Tuesday to make the $700 billion bailout program more visible and accountable to taxpayers. Representative Edolphus Towns of New York, chairman of the House Oversight and Government Reform Committee, and Senator Max Baucus of Montana, who heads the Senate Finance Committee, called on the Treasury secretary Timothy F. Geithner to adopt recommendations from a government watchdog that the department has resisted. The criticism came as the oversight committee heard testimony from special inspector general Neil Barofsky, who oversees the Troubled Asset Relief Program. Mr. Barofsky delivered a quarterly report to Congress that was sharply critical of Treasury's reluctance to better track how the bailout money is being spent.
Marc Faber there will be war and Hyperinflation
M3's false signal and the Japan myth M3 is sending a false signal, again During April-June of last year we described the rapid growth in M3 money supply that was occurring at the time as a "major league false signal". We thought it was a false signal because it contrasted starkly with the performance of the monetary aggregate known as TMS (True Money Supply). Whereas TMS was suggesting that the rate of monetary inflation was relatively slow, and, therefore, that a deflation scare was a distinct possibility within the ensuing 12 months, M3 was pointing to an inflationary shock to the system.
Credit Crunch Part Deux Green Shoots Everywhere! The credit crisis is over; an economic recovery is just around the corner! Hold your horses - there may not be enough water to nourish them at the next pit stop. Hold on - isn't a bad decision supposed to turn into good policy when you back it by trillions of freshly printed U.S. dollars? Conventional wisdom suggests that when you lower interest rates, splatter lots of money onto the economy through spending programs and credit facilities, the economy will recover. There are a couple of problems with that view. For starters, given the magnitude of the credit bust the world has just seen, "conventional wisdom" may no longer hold up. But wait - we have seen nascent signs of a recovery - the touted green shoots!
The Real Solution Last week, I made the case that the level of the speculative position limit in COMEX silver was completely out of line with the level of the limits in all other commodities, including gold. I pointed out that, based upon annual production, silver had a position limit from five to more than sixty times greater than a wide variety of commodities, including gold, copper, crude oil and grains. In terms of world bullion inventories, silver's position limit was more than 100 times larger than gold's limit.
Marc Faber hold on Real Estate and Gold
Growth: Never More Needed, Never More Misunderstood What should be clear to all Americans is that the need to grow the economy has never been more critical. But what constitutes real growth and the pathway to achieve it, has never before been more confused. The need for above trend growth in GDP was made even more pressing last week when the Treasury announced that the budget deficit for fiscal 2009 breached $1.1 trillion. The excess spending over revenue for June was $94.3 billion, the first deficit for that month since 1991 (fiscal 2010 will begin on October 1st). In addition, the national debt now stands at a record $11.6 trillion with trillion dollar annual deficit projections as far as the eye can see. While we continue to pile up a record amount of debt, the revenue outlook continues to decline, as the Administration's growth projections remain overly optimistic.
Bernanke saves the dollar - for now The Fed chairman faces the tough challenge of making sure the greenback doesn't continue to weaken. But a much stronger dollar won't help either. Federal Reserve chairman Ben Bernanke has a major problem on his hands. He is doing his best to try and save the economy from slipping further into recession. But he may have to sacrifice the U.S. dollar in the process. Bernanke appeared in front of the House Financial Services Committee Tuesday as part of his semi-annual testimony to Congress about the state of the economy.
Bernanke: Economy better, but ... Fed chairman says the economy is showing signs of stabilization, but added that the housing and labor markets are still not recovering. Federal Reserve Chairman Ben Bernanke told lawmakers Tuesday that the economy has started to show signs of stabilization, although he cautioned that improvement is uncertain and likely to be gradual going forward. Bernanke also reiterated that the Fed will be able to keep inflation at bay by unwinding many of the various lending programs it has put in place to encourage banks to start lending again. But he declined to give a time frame for when the Fed might begin its so-called exit strategy.
nothing had been solved expect a Total collapse soon
When Atlas Shrugs: The Great Default Have you ever heard this argument? "The national debt is too high. We are laying an enormous burden onto our children." It is misleading. In what way? Because our children, like Atlas in Ayn Rand's novel, will shrug. They will send Congress a message: "No more." Congress always responds to immediate threats regarding future sanctions. Whenever Congress thinks the voters will remember a vote at the next election, and will probably impose negative sanctions on incumbents, Congress always sees the light. "When we feel the heat, we see the light" said Senator Everett Dirksen a generation ago. His observation still holds true. Our children are not going to pay off the suckers - us - who naïvely thought they could pass on the Old Maid of government debt to them.
Inside the Meltdown: Financial Ruin and the Race to Contain It A year ago it would have been hard to imagine a book about the Federal Reserve and Treasury Department making it onto people's must-read summer reading lists. But the financial calamities of last autumn put the global economy on the brink of disaster and led to continuing fiscal woes. Understanding what happened has become vitally important not just for bankers and economists, but for everyone affected by the fallout, which means ... well, just about everyone.
Crude Oil's Collapse Is Coming On May 14th I wrote an article called "Oil at $25 a Barrel? Pump Gas $1.50? The Time Is Coming Soon" in it I made several projections as to where I thought the oil market would go. One of those projections was for the period "Early to Mid Summer" seeing as it's just past the middle of July that puts us squarely at mid-summer; time for an update. To refresh everyone; as of May 14th this is what I had to say for prices through this time of year. Recall when reading my prior call that oil was trading just under $60 per barrel and was charging upward at a torrid pace. The run up at that time also had a gigantic tidal wave of bullish "green shoot" sentiment behind it; I said this:
Bernanke says Fed can take on supercop role Federal Reserve Chairman Ben Bernanke ran into skepticism Tuesday from lawmakers wary of expanding the Fed's duties to police big financial companies. They argued that the Fed failed to spot problems that led to the financial crisis in the first place. "The Fed has made some big mistakes," said Rep. Spencer Bachus, R-Ala., ranking member of the House Financial Services Committee. An Obama administration proposal to make the Fed the supercop of globally interconnected financial companies would be "just inviting a false sense of security that inevitably will be shattered at the expense of the taxpayer," Bachus warned.
Peter Schiff: there is no exit strategy - Vlog 21 July
Obama Stimulus Spending Includes Rental Cars, Outhouses, and 'Sediment Removal' Among the 3,266 entries in a government database detailing to-date spending under the Democrats' stimulus law are expenditures for concrete outhouses, "deli-sliced" turkey, and hotel bills. Passed in February, the American Recovery and Reinvestment Act (AARA) - also called the "stimulus package" -- was sought and signed into law by President Obama, who declared at the time, "We have begun the essential work of keeping the American dream alive in our time."
Time For A New Mortgage Plan: Debt-For-Equity Swaps Obama's mortgage modification plan has, for all intents and purposes, failed. It's too complex, there's too much resistance from banks, and there are not enough resources in place to rapidly restructure existing terms. So, what's the answer? Just let millions more homeowners default? No, says professor Luigi Zingales, of the University of Chicago's Booth School of Business. (See the video above from TechTicker). Zingales' answer is something similar to the debt restructuring that bankrupt corporations go through: debt-for-equity swaps in which not only monthly payments but actual principal owed is reduced.
US financial market bailout tab hits $4.7 trillion The federal government has devoted $4.7 trillion to help the financial sector through its crisis, a level of assistance equal to about one-third of the overall U.S. economy, a watchdog report said Monday. Under the worst of circumstances, the report said, the government's maximum exposure could total nearly $24 trillion, or $80,000 for every American. The figures are part of a tough new quarterly report to Congress from special inspector general Neil Barofsky, who accuses the Treasury Department of repeatedly failing to adopt recommendations aimed at making one component of the government financial rescue effort more accountable and transparent.
Summers Urges Banks to Lend More, Says Growth Pace 'in Doubt' White House National Economic Council Director Lawrence Summers chastised some banks that received government aid for not doing enough to reduce foreclosures, while declaring that next year's economic growth pace is "in doubt." "Prudent financial institutions will recognize that the profits they're enjoying are in part a reflection of the commitment government and the broader society have made to the financial system that has enabled them to enjoy those profits," Summers said in an interview with Bloomberg News yesterday in Washington.
Ron Paul questions Ben Bernanke on definition of inflation 07/21/2009
The Effects of Inflation To fully understand how the entire process of deficit spending and inflation affects your life, it is necessary to separate and examine the actions of the government and the actions of the Fed. As we do this, keep in mind two fundamental economic realities. First, resources are limited. Only a given quantity of goods is available at any moment. If a person spends his time doing one thing, it means he cannot be doing something else. If he spends a dollar on one item, it cannot be spent on something else. Second, individuals resist changing their occupations and businesses. They resist because change means an immediate sacrifice. To learn a skill or create a business requires an investment of time, energy, and money - in other words, capital. To change form one trade to another - for example, to change from being an engineer to being a psychologist - means that the individual must learn new skills, spend time in study and training, and then invest time in practicing. To change businesses means abandoning capital invested in old tools, facilities, and inventory. Starting over is costly.
From left field, Brazil, Canada pull money out of Treasurys Brazil and Canada were among big sellers of Treasurys in the latest month for which data is available and the previous year, catching analysts off guard and raising speculation that quieter nations may be concerned about investing in the U.S. Brazil and Russia, which along with India and China are part of the so-called BRIC countries, have expressed concern with the strength of the U.S. dollar. It was therefore not so surprising that the two countries reduced their holdings of Treasurys in May, according to the latest data available from the Treasury International Capital report released last week. The two are among the largest holders of Treasurys.
What is the Government Hiding The legislative effort to audit the Federal Reserve took an interesting, though ugly, turn last week. On Wednesday, the entire Senate was considering an appropriations bill. Sen. DeMint, R-S.C., saw that several amendments had been added to the bill for various authorizations of audits to be performed by the Government Accounting Office. So he introduced an amendment to the appropriations bill to add the bill calling for the GAO to audit the Fed (DeMint is a co-sponsor of the original "audit the Fed" bill asking for an audit). When this happened, Sen. Ben Nelson, D-Neb., objected that this violated Senate Rule 16, which prohibits legislative amendments to appropriations bills. The Senate president immediately agreed and struck this particular amendment from the appropriations bill.
Alan Grayson grills Ben Bernanke on Foreign Lending 07/21/2009
China Sells 10-Year Government Debt to Yield 3.48%, Traders Say China's finance ministry sold 26 billion yuan ($3.8 billion) of 10-year bills at an average yield of 3.48 percent, according to traders at China Citic Bank and China Construction Bank Corp. in Beijing. The highest winning bid yield was 3.51 percent, said the traders at the primary dealers who are required to bid at government debt auctions. They asked not to be identified. The average yield matched the 3.48 percent median estimate in a Bloomberg News survey. The government last sold similar- maturity debt in June at 3.09 percent. A basis point is 0.01 percentage point.
Investment bankers fleece the world Tears for fees of at least USD 720m, paid for a proposed merger between BHP Billiton and Rio Tinto, a merger that never happened. Fees of $720m were paid for a proposed merger between BHP Billiton and Rio Tinto, a merger that never happened, but was recently substantially achieved, for relatively next to nothing, with an iron ore joint venture valued at $116bn. However, little, if any, protest has been heard over the quantum of the fees paid, in this instance, for something that never happened. By now books have been written on how investment banks managed to wreck their presence on Wall Street, perhaps for good this time around, but then look at how Goldman Sachs reported revenues of $13.76bn, and net earnings of $3.44bn, for its second quarter ending 26 June 2009.
Bill Posey continues Ron Paul's questioning of Bernanke on inflation/transparency 07/21/2009
For more people, scales tip toward buying a home For Aaron Carter, a musician who was struggling to fit a drum set, a piano and three guitars into his 600-square-foot apartment in Phoenix, the math on owning a home finally began to work in his favor. Rent for the apartment he shared with his wife: $615. Mortgage payment for a home with twice the space: $760. And the interest on a mortgage is tax-deductible. So they jumped at the chance to buy some elbow room. "We figured that everything together, getting more space, getting out of the apartment life and also just the prices right now, it just was the perfect time for us as a couple" to buy, said Carter, 20.
Bernanke Gets Top Marks as Investors Say Economy Is Past Worst Global investors give Federal Reserve Chairman Ben S. Bernanke top marks for combating the worst financial crisis since the Great Depression and overwhelmingly favor his reappointment amid optimism that the world economy is on the mend. Sixty-one percent of investors surveyed in the first Quarterly Bloomberg Global Poll say the world economy is stable or improving and almost 75 percent take a favorable view of the 55-year-old chairman. By almost a three-to-one margin, they say Bernanke has earned another four-year term when his current one expires in January.
Marc Faber Expect More Stimulus Packages
Pelosi on health: Overhaul is closer House Speaker Nancy Pelosi said Tuesday she is confident Congress will advance an overhaul of the nation's health care system despite divisions within her own party and mounting opposition from outside groups over its cost. As House and Senate lawmakers wrestle with how to pay the price of covering the nation's 46 million uninsured - more than $1 trillion in the first decade - the California Democrat told USA TODAY's editorial board that the best approach is to rely on savings rather than taxes. "There's, I believe, more to be squeezed out," Pelosi said, adding that Democrats hope to bring down the costs of the bill. "Many members think that there's more to be squeezed from hospitals, pharmaceutical companies and docs."
Health Insurance Industry Spins Data in Fight Against Public Plan The industry that helped scuttle health reform 15 years ago with its "Harry and Louise" ads is back, voicing support for a central element of the Obama administration's plans: making sure everyone is covered. That does not mean the industry is backing the administration. Indeed, the leader of the insurance lobby has sent lawmakers a message: Be careful what you change, because "77 percent of Americans are satisfied with their existing health insurance coverage." Karen Ignagni, president of America's Health Insurance Plans (AHIP), invoked the statistic to argue against the creation of a government-run insurance option. But the polls are not that simple, and her assertion reveals how the industry's effort to defend its turf has led it to cherry-pick the facts.
Imperfect Health Reform Still Beats the Status Quo Among the range of options for health-care reform, there's one that is sure to raise your taxes, increase your out-of-pocket medical expenses, swell the federal deficit, leave more Americans without insurance and guarantee that wages will remain stagnant. That's the option of doing nothing, letting things continue to drift as they have for the past two decades as we continue to search in vain for the perfect plan that would let everyone have everything they want and preserve everything they already have while getting someone else to pay for it.
Obama seeks new health care momentum Launches offensive against GOP critics The White House on Tuesday launched a full offensive to regain control of the health care debate, wooing conservative Democrats with promises of cost cutting and attempting to paint Republican critics as attack dogs blocking change. President Obama is scheduled to hold a prime-time news conference Wednesday, as polls suggest he is losing ground on the issue. Republicans are exploiting fears about the state of the budget and the economy to slow the momentum on Capitol Hill.
* * * * * * watch this one * * * * * * Like Car Insurance, Health Coverage May Be Mandated A Proposed Requirement That All Americans Have Policies Has Broad Support Among Reformers President Obama's dream of dramatically remaking the nation's health-care system is still a long way from reality. But if lawmakers can reach an accord, one thing is virtually certain: For the first time ever, every American would be required to carry health insurance. The requirement, known as an individual mandate, is among the most far-reaching changes envisioned this year by those pushing for health reform. And it is one of the few common threads running through all three bills being considered in Congress, greatly increasing the likelihood it will survive the legislative process. Obama continued Tuesday to push lawmakers struggling with the massive costs and scope of health legislation to move forward, pronouncing reform to be "closer than ever."
What health reform means for you The bills are in flux, but it's time to dig in. Here's what the big idea in Washington could mean if you get insurance at work, buy it on your own, or have none at all. Lawmakers are still far from consensus on how to fix the health care system. So it's too soon to know exactly what reform would mean for individual Americans. But a picture has started to emerge from two key bills put out by Democrats in the House and Senate. A third bill is expected soon from the Senate Finance Committee. The first two bills propose:
a national insurance exchange on which insurers would compete for consumers' business;
a public health plan that would compete with private insurers on that exchange;
and subsidies for financially strapped Americans eligible to buy health insurance on the exchange.
Marc Faber Dropping Dollars from helicopters is not going to solve the problems
California lawmakers reach budget deal California may soon be able to stop printing IOUs now that Gov. Arnold Schwarzenegger and legislative leaders have agreed on a compromise plan to close the state's $26 billion shortfall without tax increases. The governor and lawmakers announced the compromise late Monday, nearly three weeks after the state began issuing pay-you-later warrants to thousands of state contractors and vendors. Many recipients had trouble finding someone to take them after several major banks stopped accepting IOUs.
New Midwestern wine region is biggest in U.S. Quick, what's America's biggest wine region? If you answered California's Napa Valley, you're way, way off, thanks to a federal ruling that creates a new one starting Wednesday. It's the Upper Mississippi River Valley, covering a whopping 29,914 square miles and encompassing portions of Minnesota, Wisconsin, Illinois and Iowa. That's 39 times the Napa Valley's puny 759 or so square miles. The new region is huge news for Midwestern vintners. "I'm really excited about it," says Paul Tabor of Tabor Home Vineyards Winery, located about 40 miles south of Dubuque, Iowa. "Wine enthusiasts really do look at the labels for an appellation, and now we can use that as part of our marketing story."
Bowing to Veto Threat, Senate Blocks Money for Warplanes With some of his political capital on the line, President Obama won a crucial victory on Tuesday when the Senate voted to strip out $1.75 billion in financing for seven more F-22 jet fighters from a military authorization bill. The president had repeatedly threatened to veto the $679.8 billion bill if it included any money for the planes. The 58-to-40 vote clearly gives the Obama administration more leeway to overhaul military spending.
Pakistan Objects to U.S. Expansion in Afghan War Pakistan is objecting to expanded American combat operations in neighboring Afghanistan, creating new fissures in the alliance with Washington at a critical juncture when thousands of new American forces are arriving in the region. Pakistani officials have told the Obama administration that the Marines fighting the Taliban in southern Afghanistan will force militants across the border into Pakistan, with the potential to further inflame the troubled province of Baluchistan, according to Pakistani intelligence officials.
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Tues 07.21.2009
Total Bailout = $23.7 TRILLION Here's a crazy stat for you. The total amount of US backstops and bailouts has reached a staggering $23.7 trillion! How do we know? Because TARP watchdog Neil Barofsky is going to say so in his fresh report, and that report was leaked to many top media outlets, like WaPo and Dow Jones. If it's available to the public, we certainly can't find it on the SIGTARP website. The last report that's up is from April, 21.
IG: Bailouts could cost taxpayers $23.7 T The government's massive bailout of Wall Street could end up costing taxpayers almost $24 trillion, says an independent watchdog. Much of the bailout's attention has focused on the Treasury Department's $700 billion Troubled Asset Relief Program, or TARP, which Congress hurriedly passed last autumn. But some 50 other federal programs that began as early as 2007 could push the government's total financial support of the private financial sector to at least $23.7 trillion, says TARP's special inspector general Neil Barofsky.
Why Gold Should Anchor a Portfolio Recently I discussed some of the reasons investors often fall short. Today I want to help bring clarity to your investment goals and also explain why gold should hold a central place in your portfolio. If you succeed in these two areas, you’ll not only prosper, you will also be prepared for the incredible changes and shocks that I believe are coming.
World financial/economic crisis may have culminated and greatest risks have been averted but it is still very far from over
US dollar continues in its multi-year downtrend
World governments are committed to issue huge volume of government debt for many years to come
Quantitative easing – debt monetization – are becoming a routine practice of the Fed
President Obama’s plans for government spending are making Bush deficits seem like child’s play
Ron Paul Questions Fed Governor Elizabeth Duke at Financial Services Hearing 7/16/09
Hyperinflation and Gold The current administration promised to produce a rather lofty number of jobs in a given period of time. To do this they were going to stimulate the economy by focusing on the antiquated infrastructure of the country, on developing alternative energy supplies, etc., but just 5 months after inauguration, the emphasis seems on what is politely called social services but the more accurate label would be welfare. Money is being thrown into every possible program out there that will produce little to nothing in terms of long term benefits and by comparison in the areas that could produce a long lasting effect hardly any money is being allocated. We are not going to list all the programs for they are constantly mentioned in the news.
Alas Poor Gold Bug Alas, poor gold bug. Things are better than a week ago. Monday’s gap is explosive. But here you sit, with gold about to break above $1000 and make you rich. Yet you are torn with fear and doubt. When you look back at this period, you will think, “Why was I so scared? I made a beautiful play. I beat the stuffings out of all my friends. Why did I have such doubts?” And therein hangs a tale, dear gold bug. Listen to the wisdom of the One-handed Economist, and you will learn a valuable lesson, a lesson which will serve you well both in the financial markets and in life. Because it is easy to observe that every powerful move in the markets is preceded by a period where the large majority of the people are supremely confident that the exact opposite is going to happen. And the social pressure put on by these fools is difficult to resist.
Schmidt's Gold Thoughts Failing economic policies of the Obama Regime are setting the stage for the next significant rally for $Gold as massive debt monetization becomes necessary. Before going into that though, we need to understand the situation with the U.S. economy. That will allow us to understand how coming Federal Reserve actions will push $Gold above $1,000. Federal Reserve policies of the past year have managed to put a floor under the U.S. economy. However, those same policies have created the conditions that could, if unchecked, create the next leg down into further recession. That policy could exacerbate the negative impact of the high tax, anti growth policies of the Obama Regime.
Gold "Attracting Investment" as Price Jumps vs. All Currencies, Physical Buying "Provides Support" THE PRICE OF GOLD rose sharply against the US Dollar on Monday morning in London, jumping 1.6% to a 6-week high at $954 an ounce as world stock markets also rose yet again. Rising for the fifth session in six, Gold initially held flat against the world's other major currencies as the Dollar fell to a new July-low vs. the Pound. The Euro hit a 7-week high at $1.4245. But the Gold Price in Sterling then rose 0.6% to reach its best level in 5 weeks above £577 an ounce. For Eurozone investors now Ready to Buy Gold, the price gained 0.8% to €669.50 an ounce – its best level so far in July.
Gold Rises as Dollar Slump, Oil Gain Spur Demand From Investors Gold climbed to a five-week high as a weaker dollar and higher oil prices boosted the metal’s appeal as an alternative investment and a hedge against inflation. Other precious metals also gained. The U.S. Dollar Index, a six-currency gauge of the greenback’s value, fell to a six-week low on speculation that European and U.S. economic reports this week will show the global recession is easing, sapping demand for a refuge from risk. Oil climbed to the highest in almost two weeks. “Gold is moving up today due to the lower U.S. dollar,” said Lannie Cohen, the president of Capitol Commodity Services Inc. in Indianapolis.
7 Myths About Gold Debunked: Bubble Warning; $600 Target? A bubble is when prices gets distorted from fundamentals by speculation, fear, market manipulation, etc; they are different from cycles which are the natural trade-off and re-adjustment of supply and demand. The difference is that bubbles pop (see here). The problem with understanding gold is that it's hard to work out the fundamentals, which explains why there are so many myths about it.
Morgan Stanley pays damages for Precious Metals Fraud I have been warning people for several months not to confuse “bullion-ETF's” with actually owning real gold and silver (see “Bullion-ETF's: a multi-purpose scam”). In the case of silver, I've pointed out that it simply isn't possible that both the silver bullion-ETF's and the massive “short” positions at the Comex could be fully-backed since the two total more than 100% of existing inventories – with nothing left over for the other 95% of the world (see “History of Silver, Part III: inventories gone!”). What is important to note is that the bullion banks with those massive, short positions are also the custodians for most of the silver (supposedly) “owned” by the bullion-ETF's.
They Can't See the Forest for the Trees! In the last three weeks a very important event took place that has been overlooked and misunderstood in the financial sector. The United States and the European Union have filed complaints against China at the World Trade Organization (WTO) on June 23 accusing Beijing of placing export restrictions on raw materials and partially processed raw materials critical to many industries. The nine materials cited by the United States are bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow phosphorus and zinc. The complaint accuses China of restricting exports, thus creating an unfair advantage by contributing to disparities in prices of these precursor materials inside and outside China. The European Union also complained that the restrictions could undercut some 4 per cent of European industrial production if the resources are no longer easily accessible from Chinese suppliers.
How a "Very Pessimistic" Ron Paul Would Fix the Economy Congressman Ron Paul is "very pessimistic" about the state of the economy, largely because - from his view - the Obama Administration "continues to do the things that created the problem in the first place." Long a proponent of small government and a staunch opponent of the Federal Reserve system, Paul's main point is that increased spending and higher deficits are not the solution to our problems, but their cause. "You can take care of people, but never with a deficit, never by expanding the spending," the Texas Republican says in this exclusive video interview, taped in the Capitol Hill Rotunda in Washington D.C. "The more we do to interfere with the correction - the longer it lasts."
Summers Says 2010 U.S. Growth Pace Is ‘Very Much in Doubt’ Lawrence Summers, director of the White House’s National Economic Council, said the U.S. economy’s growth pace next year is “very much in doubt,” and will depend on confidence levels and the flow of credit. “I don’t feel there’s a basis for predicting that income growth is going to resume in the near term,” Summers said in an interview in Washington. While the economy’s contraction will likely end in the second half, “the question is what will follow from that, and to what extent it will be self-sustaining private-sector growth. And I don’t think there are any certainties in that regard.”
Treasuries Rise as Investors Prepare for Bernanke’s Testimony Treasuries rose, pushing yields down from the highest levels in almost four weeks, amid speculation Federal Reserve Chairman Ben S. Bernanke may indicate the economy remains weak in testimony to Congress tomorrow. Ten-year note yields declined as Bernanke may outline his strategy for exiting the biggest monetary expansion in history when he delivers his semiannual economic report to Congress at 10 a.m. tomorrow in Washington. Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, said economic growth will likely be “weak.” Pacific Investment Management Co., manager of the world’s largest bond fund, said it will buy five- to 10- year Treasuries.
The Great Credit Crunch Continues Unabated It was in mid-2005 when I predicted that the homebuilders were about to start their bear market. It was in April 2006 when I first listed banks that I thought would be vulnerable to Construction and Development Loans. I even listed fifty banks that I described as dominos ready to fall. Banks peaked in March 2007, and that’s when I first said that you can’t have a bull market for stocks with a bear market in financials. It was also in March 2007 when I predicted that the US economy would be in Recession in 2008 / 2009 and that in current dollar terms GDP would be lower at the end of 2009 than at the end of 2008, which would be the first year over year decline since 1948 / 1949.
Goldman Sachs A Vampire on the Jugular of America hose at the center of power are often reticent to criticize others feeding at the same trough. It is left to those on the fringe, in this instance Rolling Stone Magazine, a reviewer of popular music, to state the ugly truth about what is happening at the center—that bank-holding company, née investment bank Goldman Sachs, engineered America’s serial bubbles in stocks, housing and commodities; and, has now profited immensely from both the bubbles and America’s subsequent collapse. That bankers at Goldman Sachs will receive record bonuses the same year millions of Americans will lose their homes and their jobs is not by coincidence. Matt Taibbi’s article explains why and how this is so. In the game of last man standing called Western democratic capitalism the winner is clearly Goldman Sachs.
GRITtv: Matt Taibbi & Michael Lux: Goldman's Coup
Dismantling the Temple The financial crisis has propelled the Federal Reserve into an excruciating political dilemma. The Fed is at the zenith of its influence, using its extraordinary powers to rescue the economy. Yet the extreme irregularity of its behavior is producing a legitimacy crisis for the central bank. The remote technocrats at the Fed who decide money and credit policy for the nation are deliberately opaque and little understood by most Americans. For the first time in generations, they are now threatened with popular rebellion.
Bernanke Outlines Fed’s Future Strategy to Rein in Money Growth Federal Reserve Chairman Ben S. Bernanke outlined policy makers’ strategy to stem inflation once they decide their emergency efforts to shore up the economy and financial markets can be scaled back. The Fed chief said, in an opinion piece in the Wall Street Journal, officials will use the interest rate on banks’ deposits with the central bank as a principal tool of preventing a surge of money growth. The Fed can supplement that tool with others, including reverse-repurchase agreements and term deposits, he added, writing a day before his semiannual monetary-policy testimony to Congress.
Bailout Overseer Says Banks Misused TARP Funds Many of the banks that got federal aid to support increased lending have instead used some of the money to make investments, repay debts or buy other banks, according to a new report from the special inspector general overseeing the government's financial rescue program. The report, which will be published Monday, surveyed 360 banks that got money through the end of January and found that 110 had invested at least some of it, that 52 had repaid debts and that 15 had used funds to buy other banks. Roughly 80 percent of respondents, or 300 banks, also said at least some of the money had supported new lending.
Subprime Brokers Back as Dubious Loan Fixers From the ninth floor of a downtown office building on Wilshire Boulevard, Jack Soussana delivered staggering numbers of mortgages to homeowners during the real estate boom, amassing a fortune. By Mr. Soussana’s own account, his customers fared less happily. He specialized in the exotic mortgages that have proved most prone to sliding into foreclosure, leaving many now scrambling to save their homes.
The coming government debt default We have always assumed that governments would surreptitiously default on their debt via inflation, but recently we've come to the conclusion that a direct default is a distinct possibility. Here's why. Under the current monetary system there is no limit to how much debt a government can take on, provided that the debt is denominated in its own currency. The reason is that the central bank stands ready, willing and able to be the bond-buyer of last resort, and the central bank's pockets are infinitely deep (there is no limit to the amount of new money that the central bank can create). As a result, if it chose to do so the government could continue to issue new bonds until the currency became worthless. At the point where the currency had lost almost all of its purchasing power the surreptitious default would essentially be complete because any debt denominated in this currency would be almost worthless.
Marc Faber Governments Should Be Fired
Is the U.S. Dollar the Fed's Next Weapon? The second anniversary of the credit crisis has arrived and, in the light of the plethora of fiscal and monetary policy initiatives, it makes for interesting reading to reflect upon how the U.S. economic landscape has changed since the start of the crunch.
Fed funds rate: down from 5.25% to zero
Fiscal deficit: up from 2% to 13%
Mortgage rates: down from 6.5% to 4.7%
Home affordability: 70% improvement
Fed’s balance sheet: up from $850 billion to $2 trillion
Dollar Falls to Six-Week Low as CIT Prospects Boost Risk Demand The dollar dropped to a six-week low against the euro while the yen slid after stocks gained amid speculation CIT Group Inc. will avoid bankruptcy, encouraging higher-yield demand. New Zealand’s dollar climbed versus its U.S. counterpart to the strongest level since June 2 and the Canadian currency advanced after commodity prices rose. The pound climbed the most in more than a week as a report showed asking prices for U.K. homes increased this month. “People are looking for risk assets, not with a lot of conviction, but with equities there is some appetite,” said Brian Kim, a foreign-exchange strategist in Stamford, Connecticut, at UBS AG, the world’s second-largest currency trader. “They’re leaning away from safe havens, and the dollar and yen kind of suffered.”
Little banks shared risk, take big hit In late 2007, a small bank in Winder made a big bet on the real estate market 2,000 miles away in the Arizona desert. The lender, Peoples Bank, put together a $100 million loan for an Atlanta developer who planned to convert 5,600 acres of scrub brush an hour from Phoenix into a massive residential community. The loan was too big for Peoples to shoulder alone, so the bank pulled more than 60 other lenders, about half from Georgia, into a complex deal to share the business.
Obama Helps Banksters Loot American Economy There is no economy left to recover. The US manufacturing economy was lost to offshoring and free trade ideology. It was replaced by a mythical "New Economy." The "New Economy" was based on services. Its artificial life was fed by the Federal Reserve's artificially low interest rates, which produced a real estate bubble, and by "free market" financial deregulation, which unleashed financial gangsters to new heights of debt leverage and fraudulent financial products. The real economy was traded away for a make-believe economy. When the make-believe economy collapsed, Americans' wealth in their real estate, pensions, and savings collapsed dramatically while their jobs disappeared.
FDIC takes over Vineyard Bank and Temecula Valley Bank The failed Southern California banks will reopen today under new owners. Two failed Southern California banks will reopen today under new owners, after the Federal Deposit Insurance Corp. took control of them late Friday. Vineyard Bank of Corona, which has 16 branches, was sold to California Bank & Trust of San Diego, the FDIC said. Separately, Temecula Valley Bank of Temecula and its 11 branches were sold to First Citizens Bank and Trust of Raleigh, N.C. Both Vineyard and Temecula Valley have been careening toward collapse for the last year amid huge losses on loans related to real estate.
St. Regis Monarch Beach seized by Citigroup The St. Regis Monarch Beach, the Orange County luxury resort where American International Group Inc. sponsored a luxury retreat just days after accepting a federal bailout, has been seized by Citigroup Inc. The hotel will continue to operate as a St. Regis. "The acquisition will have no impact on the hotel, golf club or beach club," Citigroup said today. "Starwood's St. Regis brand will continue to be responsible for the day-to-day management of the properties." Citigroup's takeover is a sign of how deeply troubled the upscale lodging industry is now, said consultant Alan Reay of Atlas Hospitality Group. High-end hotels across the country have been hammered by a cutback in business and leisure travel.
It doesn’t pay to fall asleep in a recovery The vast majority of retail investors have “fallen asleep” on the broad market recovery since March. The sleepy character of market psychology has become even more pronounced in just the last few weeks as the market spent some time consolidating its gains. In that period of time we’ve seen quite a few analysts turn bearish on the market, which is usually a big mistake in a year when the dominant yearly Kress cycle is up.
Bear’s Beware At the risk of sounding a little crazy in knowing the fundamentals are indeed ‘that bad’, this is a cautionary note to those who are short stocks to expect volatility moving forward, but not the kind you are hoping for. And hey, the technicals in the markets are no hell either. In this regard, quite simply, there’s no buying power to legitimately send stocks higher on a lasting basis. To go along with this, the S&P 500 (SPX) is sporting a head and shoulders pattern measuring down to approximately 810. Again though; and in spite of this, if history is a good guide stocks will never get there within the present sequence.
Roubini: We Won't Test The March Lows Fresh after a mini-"I was misquoted scandal" last week, Dr. Doom, Nouriel Roubini just appeared on CNBC to discuss his market and economic outlook. Warning: It's a little conviction-less, a la Meredith Whitney, though not quite as bad. He says the worst is behind us in terms of the crisis, though not necessarily the economy. It's not going to be a V-shaped recovery, but it won't be an L-shaped depression. Instead, look for a long, slow, ever-so-slightly-upward slog.
Goldman: Get Ready For A MONSTER Second-Half Rally Strap in your seatbelts, folks. The second half of this year is going to be killer, says the strategists at Goldman Sachs (GS). Bloomberg: Goldman Sachs Group Inc. boosted its forecast for the Standard & Poor 500 Index, saying improving earnings will spur the steepest second-half rally since 1982.
Peter Schiff on CNBC talking about the stock market rally 17 July 2009
S&P 500 to Rally Most Since 1982, Goldman Sachs Says Goldman Sachs Group Inc. boosted its forecast for the Standard & Poor 500 Index, saying improving earnings will spur the steepest second-half rally since 1982. The benchmark index for U.S. stocks will advance 15 percent from its June 30 level to 1,060 on Dec. 31, an increase from David Kostin’s prior projection of 940. The chief U.S. investment strategist at New York-based Goldman Sachs also lifted his 2009 and 2010 earnings estimates for S&P 500 companies to $52 and $75 a share, which are 30 percent and 19 percent higher than prior estimates.
Frank: I'm Not to Blame for Housing Bubble Who's to blame for the subprime housing bubble? A popular answer - especially on the right side of the aisle - is Massachusetts Democrat, Barney Frank. Why? The argument, best summed up in an Investor's Business Daily editorial published in March 2009, goes like this: "Starting in the early 1990s," Rep. Barney Frank "(and other Democrats) stood athwart efforts by regulators, Congress and the White House to get the runaway housing market under control." It goes on to say in, "2002, Frank nixed reforms" of Fannie Mae and Freddie Mac and that in 2003, "led by Frank, Democrats stood as a bloc against any changes" that President Bush proposed making to Fannie and Freddie. Is it true? Frank doesn't think so.
"The Fed Will Be a Less Powerful Institution," Rep. Barney Frank Says Ben Bernanke delivers his semi-annual report on the economy Tuesday in an atmosphere of intense political debate over the fate of the central bank. One man at the center of the discussion, Congressman Barney Frank, chairman of the House Financial Services Committee, is an advocate of less power for the Fed, not more. "The Fed will be a less powerful institution" when all is said and done, Frank says in the accompanying video exclusive, taped last week in Washington D.C.
Making the (tough) case for free markets Deregulation suddenly looks like a mistake. But Brink Lindsey, one of Washington's sharpest market advocates, says liberals wouldn't really want a return to the past. After three decades of dominating the political conversation, free-market thinking is out of style. The new conventional wisdom: It's time to go back to the pre-Reagan era of strong government and secure jobs. But Brink Lindsey of the libertarian Cato Institute (a think tank that provided a lot of the intellectual ammunition for deregulation) wants you to know that the good old days weren't as good as you might think.
Commercial brokers are swimming in empty space In a distressed market, the stakes are higher and deals are more elusive. Real estate broker Carl Muhlstein maneuvered his silver BMW convertible through downtown Los Angeles traffic, one hand steering the car and the other pressing a cellphone to his ear. "Come on," he teased. "Insult me with an offer." While some who swim the deep and often lucrative waters of commercial real estate have retreated to the golf course, Muhlstein is among those pushing on -- joking, nudging and networking in hopes of making deals in a time of no deals.
The commercial real estate time bomb There’s a new main character moving to center stage in the great real estate meltdown. Underwater homeowners vying to refinance or score a loan modification have grabbed much of the headlines (and bailout attention) to date. But now commercial real estate is moving into the spotlight as the next potential body slam for the economy. Last week The Washington Post reported that the U.S. Treasury department has begun to contemplate what can muck things up for the economy and the recovery beyond what is currently being bailed out. This effort has come to be known as Plan C. As in, “Yikes, Plan B might not do the trick, so what do we need to focus on next?”
New federal rules protecting applicants for home loans take effect July 30 The Federal Reserve regulations require lenders to provide consumers with initial disclosures of their mortgage costs within three business days of their loan applications, among other changes. If you're applying for a loan to buy a primary or secondary home, or planning to refinance, you should be aware of a little-publicized set of federal consumer-protection rules that take effect July 30. Among other key changes, the new Federal Reserve regulations require lenders to provide you with initial disclosures of your estimated mortgage costs within three business days of your loan application. If you don't get them, you can pull the plug.
Obama Pushes Senate as Health-Care Focus Turns to Finance Panel President Barack Obama, who has won three legislative victories in his bid to overhaul the U.S. health-care system, is now ramping up pressure on the congressional panel that may matter the most. The Senate Finance Committee, which is seeking a bipartisan compromise, has failed to reach an agreement even as two House committees and a Senate panel cleared their versions of the legislation with only Democratic approval. Chairman Max Baucus said a deal will come this week at the earliest, a month after he had planned to finish a draft and get a panel vote.
Dr. Ron Paul: Healthcare Is Not A Right! Ron Paul's solution to the healthcare crisis, not surprisingly, is to get the government out of healthcare altogether. We agree wholeheartedly with one part of that: Funding healthcare shouldn't be an employers' problem. Employer-provided healthcare is an outgrowth of mid-century wage controls. Whatever we do, we should get the burden off the country's companies. The proposals on the table, of course, will do exactly the opposite, fining companies that don't provide healthcare. Ron Paul thinks the proposal will cost $2-$3 trillion.
Dodd on Why Health Care Bill Allows Federal Funding of Abortion: ‘We Like the Idea That People Have Choices’ The Senate version of health care reform, which passed in committee on a 13-10 party-line vote last Wednesday, would effectively mandate federal funding of abortion through various insurance coverage mechanisms included in the bill. When asked about the fact that the bill will allow federal funding of abortion, Sen. Christopher Dodd (D-Conn.) told CNSNews.com, “I think we handled the issue well.
RNC chairman: Obama's health care is socialism The chairman of the Republican Party on Monday called President Barack Obama's plan to overhaul health care "socialism," accusing the president of conducting a risky experiment that will hurt the economy and force millions to drop their current coverage. Michael Steele, in remarks at the National Press Club, also said the president, House Speaker Nancy Pelosi and key congressional committee chairmen are part of a "cabal" that wants to implement government-run health care.
On health care, Blue Dogs may wag tails The conservative Blue Dog Democrats were top dog in the House's negotiations of health care legislation Monday, but past revolts by this pivotal voting bloc usually ended with members bowing to the party's liberal leadership. The Blue Dogs, who hold enough seats on the Energy and Commerce Committee to kill the bill this week, spent the day in closed-door negotiations with Democratic leaders and pressed demands for more cost controls and greater protections for small businesses and rural areas.
Paying for health care: Wealth tax is 'legitimate More work is needed on proposed health care reform legislation to ensure that whatever bill eventually gets passed by Congress is budget neutral, Health and Human Services Secretary Kathleen Sebelius said Sunday. Appearing on the NBC program "Meet the Press," Sebelius said an additional tax on wealthy Americans is "a legitimate way to go forward." She noted the tax surcharge provision in a House proposal was one of several options under discussion to help pay for overhauling the nation's ailing health system. A final bill "will be paid for -- it will not add to the deficit," Sebelius said of health care reform, which is currently President Barack Obama's top domestic priority.
Look Out, Are You About to Join the White Underclass? "We're starting to hear a little discussion about the white underclass... Mainly because so many middle class folks are terrified of falling into it." "White underclass" is a term I've used often in my writing, and most American readers seem to know what I mean. They've got eyes and live in the same nation I do. But in a sudden burst of journalistic responsibility, I decided that if I am going to throw around the word underclass, then I should offer some clearer, perhaps more scientific definition.
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Mon 07.20.2009
Currency Crisis - The Yuan to go Global and soon! Gold will Rise! Suddenly the pressure from China to change the world's monetary order is pressing. At the G-8 China asked for the forum to debate proposals for a new global reserve currency! They were largely ignored! China's rising presence in the global economy [$2 trillion reserves now] and the threatening weakness of the $ is prompting China to act in this way and with speed. Not only the Chinese but the French, Finance Minister and Central Bank President called for greater currency stability and a system to avoid piling up currency reserves as we see with the $. It is clear that more and more countries are objecting to the debasement of the U.S. $ through Trade deficits and Quantitative Easing.
Home Resales, Leading Index Probably Rose Gold advanced on rising demand for the precious metal as a hedge against inflation after U.S. housing starts increased in June, adding to signs the world's biggest economy is stabilizing. Silver also gained. Home-building starts rose 3.6 percent to an annual rate of 582,000, the highest since November, the Commerce Department said today in Washington. Building permits, a sign of future construction, jumped the most in a year. Crude-oil futures, used by some investors as an inflation indicator, advanced. Some investors use gold as a store of value.
'Gold is the only safe haven commodity' Many people are talking about oncoming inflation and even hyperinflation, but in my opinion there's no chance of either for at least a couple of years. The reason is that a huge amount of deleveraging remains. Whenever we see the dollar and the yen climb and all other currencies fall, that is a symptom of the need for dollars and yen to deleverage. So much was borrowed in the first decade of this century-and it was borrowed in dollars and yen. Of course, when the dollar is strong, commentators say it's a safe haven. That's total nonsense. I'm not sure there is a safe haven now except perhaps in gold.
Supply Side Economics How Is Gold Going to Fare This Year? Gold started the summer doldrums looking strong and has retreated since, but what are its prospects for the rest of the year and beyond? That will largely be determined by the interplay between supply and demand; let's take a look at the supply side. Reports of dwindling supply are accurate in some areas; however, the story is not that simple. Unlike most metals that are consumed in industrial use, most of the gold ever mined is still around. Gold is forever. Thus newly mined, refined, and fabricated gold is not all that's entering the marketplace; there are multiple ways of meeting demand. Here's a look at each.
Swiss banks have no space left for gold! Do you know what is the immediate impact of the gold rush on Swiss banks? They are running out of space to store the world's gold! According to a website report, Swiss banks have no more secure storage space for gold bullion held by investors and institutions. Swiss news website 20 Minute Online said fears of hyperinflation, the economic downturn and the success of gold index funds (ETFs), which are supported by physical gold, has led to a run on precious metals investment - and in gold in particular, and in the necessary secure storage space in which to hold it.
The Gold Stocks Are Still Undervalued Even after a massive recovery with sustained gains the gold stocks are still significantly undervalued. At the major highs of Gold $1030/oz and HUI 520, the costs to these companies were very high. Oil was high, steel was high and because of general inflation most costs were escalating. Now we have Gold 940, and HUI 350, but Oil and Steel are much lower. Also the local price of Gold everywhere except in the US and Japan is higher than at the peak in March 2008. If you mine in Canada, you care about the price of Gold in Canadian Dollars, not the regular quoted Gold price. That is because most of your costs are in Canadian Dollars.
Gold plays truant again! Where will gold prices head for? That is the billion dollar question haunting investors now. With contradicting signals emerging from various markets across the globe, analysts are caught in a spot with their predictions going haywire. Take the case of Asian markets and London, the price of gold this week reversed slight losses, rising to see a slight gain at $939.85 at the start of New York trade. Gold price then fell to see a $6.75 loss at $932.65, but it rallied back into the close and ended with a loss of just 0.4 per cent. The gold price in Euros fell to €663.
Silver - The Metal of Hope Recently I was asked to do an interview with Philip Judge of The Anglo Far-East Company. After the interview was completed, Mr. Judge sent our interview out with a short story called "THE METAL OF HOPE." His missive begins, "In history, gold alone has been the money of Kings. However, throughout most of recorded time there has been a metal far more important to the average man than gold. In the ancient of days it was silver alone that could provide the means for a slave to save and eventually purchase his freedom, which is why silver became referred to as the Metal of Hope.
Fiscal ruin of the Western world beckons For a glimpse of what awaits Britain, Europe, and America as budget deficits spiral to war-time levels, look at what is happening to the Irish welfare state. Events have already forced Premier Brian Cowen to carry out the harshest assault yet seen on the public services of a modern Western state. He has passed two emergency budgets to stop the deficit soaring to 15pc of GDP. They have not been enough. The expert An Bord Snip report said last week that Dublin must cut deeper, or risk a disastrous debt compound trap. A further 17,000 state jobs must go (equal to 1.25m in the US), though unemployment is already 12pc and heading for 16pc next year.
Max Keiser takes offense to Goldman Sachs story (pt1 of 2)
Pimco’s Gross Reduces Mortgage Holdings, Adds to Cash Position Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., reduced holdings of mortgage debt last month and trimmed his bet against cash and equivalent securities. Gross cut the $161 billion Total Return Fund’s investment in mortgage bonds to 54 percent of assets, the least in almost two years, from 61 percent in May, according to Pimco’s Web site. Cash comprised negative 6 percent, the most in 2009, rising from negative 14 percent.
Failure to Tax Taxes don't cover spending, so we're heading toward financial collapse-- that's simple arithmetic. It's political suicide to suggest increasing taxes. Every election we hear mobs chanting: "NO NEW TAXES!" But those same people are in favor of balancing the budget. The problem is that income taxes reallocate wealth, and taxpayers scream when it is their activity that gets hit with a tax increase. Instead of trying to get approval for a tax on income from activity X or Y (and bring out the lobbyists), why not apply a NEUTRAL tax that AUTOMATICALLY comes into play to mop up the effects on the money supply of government spending that has already occurred? All the lobbying (and delays) should be on the spending side, so that the taxing can be automatic.
TARP Inspector Urges Treasury to Track Banks' Aid More Closely Treasury Secretary Timothy Geithner should press banks for more information on how they use the more than $200 billion the government has pumped into U.S. financial institutions, according to a new oversight report. When queried, banks are able to explain where the money goes in their businesses, said the report from Neil Barofsky, special inspector general of the Troubled Asset Relief Program, which covers a survey of the banks collected in March.
All Businesses Should Be Lucky Enough To Be Big Banks! The half-dozen or so banks that became too big to fail have had it good. They received $billions in taxpayer bailout money and loan guarantees, were hand-fed lucrative deals to take over the choicest parts of less fortunate competitors, were allowed to exchange some of the toxic waste assets on their books with the Fed for Treasury bonds, and have been able to hire the best of the many newly unemployed bankers and traders.
Re-pricing On Chinese Yuan - Bloomberg
Obama's Stimulus Plan Slow to Trickle Through Economy The debate over whether the $787 billion stimulus package is sufficiently large or efficiently designed obscures a broader question, some economists say: Can any fiscal measure pull the economy out of the recession? With credit still crimped and the outlook for consumer demand gloomy due to rising unemployment and increased personal saving, no amount of government intervention will be able to stanch the hemorrhaging of jobs and quickly ease the U.S. out of its deepest recession in a half-century, they said.
Banks with bailout funds say loans rise More than 80 percent of the U.S. banks that received federal bailout funds said the money had helped them increase lending or avoid a drop in lending as the recession worsened earlier this year, according to a new survey released on Sunday. The survey by the Special Inspector General for the U.S. Treasury's $700 billion Troubled Asset Relief Program (TARP) found nearly 40 percent of the 360 banks surveyed had used some of the funds to build up capital cushions to absorb unanticipated losses.
China's Rebound Carries U.S., Asia Toward Recovery China's economic comeback is under way, towing along companies from Intel Corp. to Hyundai Motor Co. and starting to make up for weak demand in other major economies. The world's third-largest economy grew 7.9 percent in the second quarter from a year earlier after expanding at the slowest pace in almost a decade in the previous three months, the statistics bureau said yesterday. The first acceleration in growth in more than two years came after the government implemented a 4 trillion yuan ($585 billion) stimulus plan and prodded banks to lend more.
Marina Kalashnikova's Warning to the West Meet Marina Kalashnikova: a Moscow-based historian, researcher and journalist. Last August she criticized foreign "experts" for suggesting that a conflict with Moscow will not happen because Russia's elite is too closely associated with the West. According to Kalashnikova, "The West does not care to wake from the dream of its wishful thinking, even when Moscow turns to … reanimating Stalin's cult of personality together with the ideology of the Cheka [i.e., the secret police]."
Dollar, Yen Fall Most Since May on Economic Outlook, Earnings The dollar and the yen posted the biggest declines against the euro since May as corporate earnings topped forecasts and U.S. reports showing gains in housing and a slower decline in industrial production. The Canadian dollar advanced to a one-month high against the greenback as crude oil rebounded. The Mexican peso had the biggest gain in two months this week after policy makers said yesterday that they will "pause" after cutting the overnight interest rate a quarter percentage point to 4.5 percent.
Peter Schiff on CNBC talking about the stock market rally
Is The IMF Becoming A Bad Bank? Brazil's, Russia's, India's and China's (BRIC) intention to buy IMF issued bonds raises several questions. The publicly announced plan states that the BRIC countries will buy the first-ever IMF issued bonds, which will be denominated in Special Drawing Rights (SDR). The plan's objective, as suggested by the IMF, is to increase the IMF's funds in order to allow it to lend greater amounts of capital to countries during times of distress while also giving the BRIC countries a greater voice within the IMF. Another aspect of the IMF bond issuance is the BRIC's possible intent to use the IMF as a bad bank to hold toxic assets that financial markets cannot absorb, specifically, US Treasury Bonds.
Bank of America credit losses soar, profit falls Bank of America Corp, the largest U.S. bank, posted a quarterly profit that topped Wall Street forecasts but warned of a fresh surge in soured loans to credit card, mortgage and business customers. Soaring credit losses may add to pressure on Chief Executive Kenneth Lewis as the U.S. Congress and regulators ramp up scrutiny of the bank's ability to manage risk and its controversial purchase of Merrill Lynch & Co, and that tough economic conditions could hurt results into 2010.
BREAKDOWN BECOMES BEAR TRAP Last week I presented an alternate scenario to the head and shoulders breakdown and projected decline: "While the bearish case seems strongest at this point, a bullish outcome is not impossible. Bullish forces have weakened, but it is not at all clear that the bear market has resumed. A more positive analysis of the situation could be that there has been a two-month rally from the March lows, followed by a two-month correction/consolidation. The neckline violation could be the end of the correction and a bear trap. I present this outcome because I have seen it happen before, and it is not yet out of reach; however, I don't think it is likely." Well, I didn't think it was likely, but that is what happened. I don't feel too bad about that because our Thrust/Trend Model is still on a medium-term buy signal, proving once again that the timing model is smarter than I am. But being wrong can also impart useful information. Since the bearish formation ultimately resolved in a bullish direction, we can assume that bullish forces are in command, and that the rally will continue.
Banks use Tarp funds to boost lending A large majority of US banks claim that government bail-out money has allowed them to write new loans to customers, while a minority has used it to buy rivals, according to a report by the programme's watchdog. The audit by Neil Barofsky, special inspector-general for the troubled asset relief programme (Sigtarp), reveals a continuing argument with the US Treasury over how much information should be disclosed by recipients of the money. Some 83 per cent of the 360 recipients surveyed by the Sigtarp team said that they had used funds from the government for lending. That may provide a boost to both the banks and the Treasury after a week in which Goldman Sachs, one former recipient of Tarp funds, was criticised for preparing to pay large bonuses.
What is 'Fractional Banking'? It became evident to goldsmiths two and a half thousand years ago that the owners of the gold they were paid to keep in their vaults very seldom even looked at it let alone came after it. So goldsmiths became bankers in the sense that they lent money out - at interest, the money being letters of credit to the effect that the bearers of the credit notes did have that gold in the vault.
Max Keiser takes offense to Goldman Sachs oligarchy (pt2 of 2)
Paulson harshly criticized by House committee for role in market meltdown Former Treasury Secretary Henry M. Paulson sat uncomfortably before a congressional committee not just as a key figure in the Bank of America Corp.-Merrill Lynch & Co. imbroglio, but also as the embodiment of the bailouts of last fall. Appearing on Capitol Hill for the first time since leaving office in January, Paulson's tall frame quickly turned into a lightning rod. Democrats and Republicans fired bolts of criticism for more than three hours Thursday, accusing him of such offenses as misleading Congress about the use of the $700-billion bailout fund and going skiing at one point during the crisis.
Paulson reveals US concerns of breakdown in law and order The Bush administration and Congress discussed the possibility of a breakdown in law and order and the logistics of feeding US citizens if commerce and banking collapsed as a result of last autumn's financial panic, it was disclosed yesterday. Making his first appearance on Capitol Hill since leaving office, the former Treasury secretary Hank Paulson said it was important at the time not to reveal the extent of officials' concerns, for fear it would "terrify the American people and lead to an even bigger problem".
The "Beat the Market" Fallacy During long bull markets, a myth develops that a money manager's goal is to match or beat some benchmark for a market that is rising. This judgment bias explains why investors in recent years came to believe that a proper benchmark against which to judge money managers was the gain or loss recorded by the S&P index. Although "beating the S&P" became a popular basis upon which to judge performance, it is bogus.
---- A MUST Read! --- The Big Inflationist Scare Yes, the bankers are terrified, not just in the US but globally. However, Gary's hypothesis "the Federal Reserve can re-ignite monetary inflation at any time by charging banks a fee to keep excess reserves with the FED", is just that, a hypothesis, and I believe a very poor one at that. Bernanke's idea to pay interest on reserves will slowly recapitalize banks over time. This is why he desperately wanted to do so. To suggest he is about to charge interest on deposits is silly. The key fact now is there are not enough credit worthy customers for banks to want to lend, or for that matter willing borrowers looking to expand debt. Thus, if banks had to pay interest on reserves, rather than causing mass inflation, the Fed would cause mass panic.
America's Sick - Part 2 In my first article "America's Sick - Part I" I wrote about the health care reform bill being proposed by Barack Obama. Through that writing I touched on the problems facing the United States health care system. I also discussed the government's proposed solutions to those problems. In Part II of this article I will layout the solutions that would actually fix our issues and will discuss a more prudent way to move US health care forward.
pt 1/2 Gerald Celente the greatest depression of 2012
Home Resales, Leading Index Probably Rose Home resales in the U.S. probably rose in June and a gauge of the economic outlook improved, signaling the recession may soon be over, economists said before reports this week. Purchases of previously owned homes climbed to an annual rate of 4.83 million, the highest level since October, according to the median of 57 estimates in a Bloomberg survey before the National Association of Realtors' report on July 23. Figures tomorrow may show the index of leading indicators climbed for a third consecutive month.
Meyer Sees No Return to 'Full' Employment Until 2015 The U.S. won't see a return to "full" employment for another six years, helping to hold down inflation, according to former Federal Reserve Governor Laurence Meyer. "I think there's going to be a long legacy of the financial crisis and the deep recession," Meyer said in an interview today on Bloomberg Radio. Meyer, who served at the Fed from 1996 to 2002, is vice chairman of St. Louis-based Macroeconomic Advisers LLC.
Recession Lesson: Share and Swap Replaces Grab and Buy The recession is reminding Americans of a lesson they first learned in childhood: Share and share alike. They are sharing or swapping tools and books, cars and handbags, time and talent. The renewed desire to share shows up in a variety of statistics: A car-sharing service has had a 70 percent membership increase since the recession set in. Governments are putting bikes on the street for public use. How-to-swap Web sites are proliferating.
CIT LIVES CIT (CIT) has reached an agreement with lenders to stave of bankruptcy, reports WSJ. The company will get a $3 billion lifeline, allowing it to restructure outside of court. No word yet on whether shareholders will be left with anything more than a couple pennies. WSJ: The final term sheet still needs to be reviewed by the various financial and legal advisers, said the people familiar with the matter. And there is the chance that a final deal could falter over last-minute negotiations.
The Politics of Stinginess Stimulus Arithmetic When her husband was in the oval office Laura Bush launched an initiative to promote literacy across the country. Unfortunately, there was no comparable effort to promote numeracy in our nation’s capital. This has been evident in the discussion of the stimulus among politicians and commentators in the week since the June job numbers were released. Republicans were anxious to pronounce the stimulus a failure, while Democrats insisted that the package just needed more time, pointing out that most of the money had not yet been spent. Neither assertion can withstand the test of third grade arithmetic.
pt 2/2 Gerald Celente the greatest depression of 2012
Video game industry sales sink 31% in June The recession is hammering the video game industry. Marking the sector's fourth consecutive monthly decline, sales of video games and consoles in the U.S. fell 31% last month to $1.2 billion, down from $1.7 billion in June 2008, according to a report released Thursday from market research firm NPD Group Inc. It was the largest monthly decline since September 2000, when industry sales slumped 41%, said NPD analyst Anita Frazier. "This level of decline is certainly going to cause some pain and reflection in the industry," Frazier said.
Back-to-school sales: Shoppers truant? Stores use deep discounts to tempt tight budgets Back-to-school shopping this year means back-to-the-closet for many consumers. More than a third of shoppers say they will slash budgets for the upcoming school year by "making do with last year's school items" -- one of the trends that is expected to reduce retail spending for the season by 7.7 percent, according to the National Retail Federation.
Prescription for Disaster by Peter Schiff The health care bill unveiled this week by the House of Representatives (with the full support of the Obama administration) is one of the worst pieces of legislation ever drafted. If passed, it will reduce the quality and increase the cost of health care in America. But more importantly, it will severely undermine our already weak economy. To burden a country currently in the throes of a violent recession with such a bureaucratic albatross clearly illustrates the scarcity of economic intelligence in Washington.
It's Not An Option Congress: It didn't take long to run into an "uh-oh" moment when reading the House's "health care for all Americans" bill. Right there on Page 16 is a provision making individual private medical insurance illegal. When we first saw the paragraph Tuesday, just after the 1,018-page document was released, we thought we surely must be misreading it. So we sought help from the House Ways and Means Committee. It turns out we were right: The provision would indeed outlaw individual private coverage. Under the Orwellian header of "Protecting The Choice To Keep Current Coverage," the "Limitation On New Enrollment" section of the bill clearly states:
Obama to Congress: 'Seize' health care chance President Obama told the nation Saturday that his health care overhaul is financially sound and Congress should not squander the chance to make meaningful change. Republicans didn't relent in their criticism of his plan as a costly burden unwisely on a fast track. For a sixth straight day, Mr. Obama sought to keep the focus on his chief domestic priority in the face of mounting resistance on Capitol Hill, including conservative Democrats. White House officials are worried they face a tougher road to passage than anticipated.
White House stands by August goal for healthcare The White House budget director on Sunday accused opponents in Congress of trying to kill off plans to overhaul U.S. healthcare but predicted each house would pass a bill in the next two to three weeks. "There are those who are advocating delay just as a desperation move to try to kill this," director Peter Orszag said on CNN's State of the Union on Sunday. Asked on FOX News Sunday whether the House of Representatives and Senate would meet a target and pass a bill before the August recess, he said, "I think the chances are high."
Orszag Says Opponents Try to Delay Health-Care Bill White House Budget Director Peter Orszag said opponents of overhauling the U.S. health-care system are trying to run out the clock and that the White House still wants Congress to produce legislation by August. "We need to get this done," Orszag said on CNN's "State of the Union" program. "We want to get it done by August." Orszag's comments underscored the mounting tensions between President Barack Obama and many lawmakers of both parties over his deadline for each house of Congress to pass its version of health-care legislation before leaving early next month for a month long summer recess.
Health care plan a work in progress Administration officials defended President Obama's broad health care proposals on Sunday and urged a skeptical public not to judge the Democrats' overhaul until Congress writes a final version. Facing independent budget predictions that contradict the White House's rhetoric, officials sought to refute Republican objections to massive changes in how Americans receive health care. They emphasized that Congress has not yet settled on an outline for health care legislation and reiterated Mr. Obama's desire for a bipartisan approach.
Paying for health care: Wealth tax is 'legitimate' Health and Human Services Secretary Kathleen Sebelius said Sunday that higher taxes was one possibility for paying for an expansion of coverage. More work is needed on proposed health care reform legislation to ensure that whatever bill eventually gets passed by Congress is budget neutral, Health and Human Services Secretary Kathleen Sebelius said Sunday. Appearing on the NBC program "Meet the Press," Sebelius said an additional tax on wealthy Americans is "a legitimate way to go forward." She noted the tax surcharge provision in a House proposal was one of several options under discussion to help pay for overhauling the nation's ailing health system.
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.
House Passes Bill to Make GM, Chrysler Rehire Dealers The U.S. House approved a plan, opposed by President Barack Obama, that seeks to force General Motors Co. and Chrysler Group LLC to restore agreements with dealerships shed during the automakers' bankruptcy proceedings. The provision, part of a spending bill that passed 219 to 208 yesterday, would require the automakers to restore franchise agreements with thousands of dealers as a condition of receiving federal aid. Lawmakers said the companies terminated dealerships with little notice or explanation.
You Call That a Clunker? Even a Classic Might Qualify for Federal Program Washington's wordsmiths are at it again. A new federal program seems to have changed the very definition of the word "clunker." A vote, a stroke of the pen, a desire to get Americans buying cars and a mandate to shrink greenhouse gas emissions have turned a fleet of old Audis, BMWs, Acuras and other luxury cars into clunkers overnight. The Consumer Assistance to Recycle and Save Act of 2009 -- also known as "Cash for Clunkers" -- will offer vouchers of up to $4,500 for car owners who trade in their old fuel-slurping cars for new models that can really stretch a tank of gas.
Will feds use new power to dictate what you drive? Senator's take on gasoline mandates: 'We own auto companies, why not?' Now that the federal government has gained control over the nation's auto industry, one U.S. senator contends, it's time to make some changes in the kinds of cars Americans drive and the kinds of fuel they use. According to a Des Moines Register report, Sen. Tom Harkin, D-Iowa, wants Congress to use "climate change" legislation to mandate that auto manufacturers fit all new cars to run on a blend of 85 percent ethanol. "We own the automobile companies," Harkin said earlier this week. "Why not? I think that will be an easy one."
Revolt against nanny state New York yoga teachers' successful challenge Yoga? Even yoga? In addition to all the other little things that government is regulating in a drip, drip, drip that is gradually becoming an ocean, states have lately been telling yoga schools what to do and how to do it and threatening them with fines or extinction if they don't. Take that, you meditating bunch of stretch practitioners. Believe me, I wish I was making this up, that I hadn't read about it in the New York Times, that I had not learned about "the fees, inspections and paperwork," that I hadn't had to think about how one state, Michigan, told yoga schools to get certified or cease operations, no pleas accepted, no rationality or liberty permitted.
Boeing engineer passed secrets to China former Boeing engineer accused of passing trade secrets to the Chinese government for more than 30 years has been found guilty in the first big economic espionage trial in America. The conviction of Dongfan "Greg" Chung marks a stepping up of US attempts to protect commercial and national security interests against overseas spies. After a 10-day trial in Santa Ana, California, the judge, acting without a jury, found Chung guilty of six counts of economic espionage, as well as acting as a foreign agent and making false statements to the FBI.
Broadcaster Walter Cronkite, the 'most trusted man in America', dies aged 92 He wept as he announced John F Kennedy's assassination, shouted encouragement when the Apollo astronauts lifted off for the moon and was the nightly conduit of information on America's Vietnam war nightmare for families across the nation. Walter Cronkite, the veteran US newsreader described as "the most trusted man in America", has died at his home in New York at the age of 92 from brain disease. He was the face of CBS News from 1962 to 1981, when stories ranged from the Kennedy assassination to Watergate and the Iranian hostage crisis. An experienced journalist who had already covered the second world War in Europe, he joining CBS as a television correspondent in 1950. His stirring reports on everything from the Kennedy assassination to the Apollo space programme and the Vietnam war often had as much impact as the events themselves.
India rebuffs US carbon demands India on Sunday night rebuffed an appeal by Hillary Clinton, US secretary of state, to embrace a low-carbon future in which the two countries would work together to devise new ways of consuming and producing energy. Mrs Clinton, on a five-day visit to the country, said that low-carbon emissions would not jeopardise India's high economic growth rates and its goal of lifting millions of people out of poverty. She offered a technological partnership to secure the fast growing nation's energy supplies and help boost the livelihoods of its farmers.
Netanyahu tight-lipped about imminent Iran attack Israeli warships cross Red Sea in apparent signal to Tehran Prime Minister Benjamin Netanyahu's office refused to respond to a report today purporting to quote an Israeli defense official stating the recent deployment of warships across the Red Sea should be seen as serious preparation for an attack on Iran. "It is not our policy to comment on such reports," Mark Regev, Netanyahu's spokesman, told WND. Earlier this week, two Israel Navy gunboats openly sailed through the Suez Canal into the Red Sea with permission from Egypt.
Israel rejects US call to halt project Benjamin Netanyahu, Israel's prime minister, on Sunday rejected a US call to halt construction on a controversial project in mostly Arab east Jerusalem. The move increases tensions with the country's staunchest ally over expansion of Jewish settlements. The premier's statements came after a senior Israeli official confirmed that the US state department had over the weekend summoned Michael Oren, the country's ambassador to Washington, to demand the plan be suspended. Mr Netanyahu, speaking at his weekly cabinet meeting, reiterated his stance that Israeli sovereignty over the entire city of Jerusalem is "indisputable" and said: "We cannot accept the idea that Jews will not have the right to live and purchase [homes] in all parts of Jerusalem."
China's Silk Road ambitions delayed by financial crisis China's ambition to restore the old Silk Road as a trade route fit for the modern era of globalisation has been halted by the financial crisis and unrest in the western region of Xinjiang. From far-flung trading outposts to bazaars in millennia-old Central Asian cities, Chinese shopkeepers are heading home, leaving behind their unsold goods. Towns are filling instead with unemployed former migrant workers, whose jobs on building sites in Russia have disappeared. The financial crisis is largely the cause. But traders in China's Central Asian borderlands, which lie in Xinjiang, also blame the violent clashes between the province's Muslim Uighur population and local Han Chinese.
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Gold to shine as dollar ails Gold prices are set for solid gains this year and next, with the $1,000 mark in sight, as potential inflationary concerns and a softer dollar outlook prompt analysts to ramp up forecasts, a Reuters survey showed. The poll of 48 analysts and traders showed that expectations for gold prices this year have risen 7.8 percent to a median $930 from $862.50 in a similar survey carried out in January, when fears over the economic outlook were at their height.
Lombard Odier sees gold hitting record high Gold has potential to set a record peak by December and the metal's average price is likely to be higher in 2010 than this year, as issues related to the credit crisis or inflation may resurface, a fund manager said. Buying shares of precious metal companies, especially mid-cap gold miners, could yield attractive returns this year and next, said Aurele Storno, the manager of two funds at Switzerland-based Lombard Odier.
Is the Death of the U.S. Dollar Imminent? For a long time I've recognized that the death of the U.S. dollar is inevitable. It is so thoroughly debauched that it should be worthless right now, but it's also such a vital instrument that nobody can afford to let it die, at least not yet. Moreover, as I've learned over the years, while it's easy to predict what is going to happen - that's usually just a matter of logical deduction - it's nearly impossible to predict when it's going to happen. I have to admit that I've been awed by the acumen of the powers-that-be to keep levitated the corrupt system we have today. I guess when you own the world's reserve currency, the world's most powerful military and have a media empire in your back pocket you can do pretty amazing things, for a while anyway.
Jim Rogers Printing Money is not the solution
Imminent Erosion of USDollar Seawall The globe is losing patience with leadership and management of the USGovt ship at sea. They simple refuse to offer a credible solution to the primary keynote crack in the hull, falling housing prices and cratered mortgages, each of which work their destructive magic to wreck the banks. The home loan modifications are a farce, a travesty not designed to modify but rather to frame a series of loan forbearances. The motive for not fixing the mortgage mess is mysterious to the masses, but not here. Jackass claims have been consistent, that effective loan modifications would alter the underlying mortgage bonds drastically.
US dollar - a currency in decline In the midst of the longest and deepest, post World-War II recession, America's financial position relative to the rest of the world has deteriorated sharply. Three decades of massive trade deficits have turned the United States from the world's top lender into the world's largest debtor and as a result has made it dependent on the whims of so-called emerging nations, laden with huge foreign currency reserves, to finance the bailout of Wall Street Oligarchs, and President Barack Obama's social programs. Foreigners own roughly half of the US government's publicly traded debt, or $3.47-trillion, representing nearly 25% of the size of the US economy - the highest level in history. If foreign lenders were to significantly reduce their purchases of US Treasury notes, without even dumping their current holdings, US long-term interest rates could zoom higher and the US dollar could crumble.
Can The Economy Recover? There is no economy left to recover. The US manufacturing economy was lost to offshoring and free trade ideology. It was replaced by a mythical "New Economy." The "New Economy" was based on services. Its artificial life was fed by the Federal Reserve's artificially low interest rates, which produced a real estate bubble, and by "free market" financial deregulation, which unleashed financial gangsters to new heights of debt leverage and fraudulent financial products.
Gerald Celente switch from the Dollar
The Next Five Years There are always major and minor causes to all effects. When one is dealing with the stock market and the economy the major causes that run the show are:
Money Supply
Interest Rates
Government Intervention (taxes, regulations, permits, trade barriers, etc.)
Government Spending (high or low percent of GDP, deficit policies etc.)
The above, in turn, influence the following:
GDP
Stock Prices
Employment Rates
Inflation Rates
Fed Saw Economy as 'Vulnerable' at June FOMC Meeting Most Federal Reserve officials judged the economy at risk to further shocks last month even as they rejected an expansion in asset purchases, reflecting doubt at the likely impact of such a move. "Most participants saw the economy as still quite weak and vulnerable to further adverse shocks," the central bank said in minutes of the Federal Open Market Committee's June 23-24 meeting released today in Washington. "Although financial market conditions had improved, credit was still quite tight in many sectors."
Should We Absolve the Fed? Are supporters of the free market engaged in special pleading when they identify the federal government and its central bank, the Federal Reserve, as the most significant factors behind the financial crisis? Absolutely, says Bruce Ramsey in the August issue of Liberty magazine. Ramsey's argument comes in the context of a review of two books: Paul Muolo and Matthew Padilla's Chain of Blame: How Wall Street Caused the Mortgage and Credit Crisis and my own Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse. He likes the Muolo and Padilla book better, because in his view it merely tells the story. Since my book applies a theoretical apparatus to the events of the past several years, it is a case of ideology masquerading as analysis.
Two-Thirds of CMBS Maturities at Risk into 2018, Deutsche Bank Says At least two-thirds of commercial mortgage-backed securities loans maturing between 2009 and 2018, $410 billion, will unlikely qualify for refinancing at maturity without significant equity infusions from borrowers, said a report from Deutsche Bank, New York. The Future Refinancing Crisis in Commercial Real Estate said more than 80 percent of 2007 CMBS vintage will unlikely qualify for refinance and borrowers will need at least $100 billion in additional equity to help loans qualify. "Our [conservative] estimate of maturity default-related losses for fixed rate CMBS is $50 billion, 6.5 percent of the aggregate outstanding balance," the report said. "We estimate that maturity default-related losses will be at least 4.6 percent for the 2005 vintage, 5.8 percent for the 2006 vintage and 12.5 percent for the 2007 vintage."
The Silver Supply/Demand Imbalance I try not to think about silver, because when I do, my head ends up whirling around at the sheer compelling nature of the fundamentals, and I always come to the conclusions that whirling makes me dizzy and that I need to buy more silver right away because silver is going to start exploding in price over the next few years, it could happen soon enough to do me some good, especially considering the sorry state of all alternative investments right now and the sorry state of just about everything right now, and by the fact that I am slashing the kids' allowances to zero, freeing up some of the cash I will need!
Gold, the U.S. Dollar, and the Chinese Yuan In late April, a Chinese sovereign wealth fund, the State Administration of Foreign Exchange, announced that China had purchased 454 metric tons of gold over the past six years. Officials indicated that this increase was accomplished by tapping domestic mine supply and refining scrap gold. As China reported gold production of 282 t last year, the reserves have absorbed about 25% of this output since 2003. China now has the fifth largest official gold reserve, 1,054 metric tons, surpassing Switzerland. While this was a 76% jump in gold holdings, the yellow metal is still only 1.6% of China's foreign reserves. Just to reach the global average of 10.5%, China would have to grow its gold hoard to nearly 7,000 t.
Mobius Says Derivatives, Stimulus to Spark New Crisis A new financial crisis will develop from the failure to effectively regulate derivatives and the extra global liquidity from stimulus spending, Templeton Asset Management Ltd.'s Mark Mobius said. "Political pressure from investment banks and all the people that make money in derivatives" will prevent adequate regulation, said Mobius, who oversees $25 billion as executive chairman of Templeton in Singapore. "Definitely we're going to have another crisis coming down," he said in a phone interview from Istanbul on July 13.
Treasury Bets U.S. Financial System Can Weather CIT Collapse The U.S. spurning of CIT Group Inc.'s aid request suggests officials are betting they've fixed the financial system enough to withstand the bankruptcy of a mid-sized lender. "I hate to say this, but it was probably expendable," said Dennis Santiago, chief executive officer of Institutional Risk Analytics, a Torrance, California, research firm that studies systemic risk. "It may have just missed the boat" on federal rescues, Santiago said.
Lawmakers say Paulson kept bailout details secret House lawmakers say Paulson bent to bank CEO; Paulson defiant Lawmakers accused former Treasury Secretary Henry Paulson on Thursday of bending to the demands of a major bank and keeping negotiations of a hefty bailout secret in his rush to stabilize financial markets last year. Paulson, testifying for the first time since leaving office in January after putting in place a $700 billion bank bailout program, was defiant in his response and admitted no wrongdoing. "No one was tougher than I was in trying to protect the American taxpayer," he told the House Oversight and Government Reform Committee.
Paulson Counters His Critics What began Thursday as a Congressional hearing into the takeover of a single Wall Street firm quickly grew into a public interrogation of Henry M. Paulson Jr., the former Treasury secretary, about his role in heading last year's rescue plan for the financial industry. In a series of heated exchanges, several lawmakers accused Mr. Paulson of misleading Congress about how he had planned to use the $700 billion authorized under the government's Troubled Asset Relief Program, or TARP. Days after telling Congress last autumn that he intended to use the money to buy impaired mortgage assets, Mr. Paulson instead injected $250 billion directly into several large banks.
Paulson Pressured BOA CEO Before the House Oversight and Government Committee, Former Treasury Secretary Henry Paulson admitted pressuring Bank of America to go through with plans to buy Merrill Lynch.
Lawmakers grill Paulson over Merrill deal A bipartisan chorus of House lawmakers on Thursday angrily accused former Treasury Secretary Henry M. Paulson Jr. of abusing his authority and misleading Congress in pressuring a reluctant Bank of America to go through with a takeover of Merrill Lynch last year. Mr. Paulson, while testifying on the merger before the House Oversight and Government Reform Committee, said he warned Bank of American Chief Executive Ken Lewis that backing out of the deal would "show a colossal lack of judgment," have a "destructive" impact to the economy and possibly be illegal.
CIT Shares Plunge After U.S. Denies Aid Request Shares of the CIT Group plummeted Thursday after the survival of the company, one of the nation's largest commercial lenders, was thrown into doubt as federal officials rebuffed pleas to rescue it a second time. Unless a buyer emerges for CIT - a prospect that seems unlikely - the century-old lender could founder, even after it received a $2.33 billion taxpayer-financed bailout in December. CIT's shares fell $1.23, or 75 percent, to 41 cents. Trading of the stock had been halted late Wednesday afternoon before CIT announced the breakdown of talks with the government, but trading resumed Thursday morning.
This Too Shall Pop The monsoons came to an end yesterday afternoon…more below… In the meantime, the Financial Times, on the final page of the first section, reports the big news: "China…is back in bubble land." After the expansion comes the contraction. After the bubble comes the clean-up. After the storm comes the sun. But what is going on in China? What comes after the biggest export-led bubble ever? Another bubble? It doesn't seem possible. China's number one customer is broke. It has far too many factories for those that are left. It should be closing up shop…and waiting out the bad weather. And yet, China is growing. A combination of hot money…and hot financial policy…is falling on everyone's favorite green shoot like Miracle-Gro. Its trade surplus and foreign direct investment - the usual source of reserves of foreign currencies - are only half what they were last year. But the speculators are coming in…and they are bringing cash. This has boosted Chinese reserves past the $2 trillion mark…and provided the liquidity for another round of bubble-like conditions. Trading volumes in Chinese stocks, for example, are running three times last year's.
Causes and effects Let us imagine that in August of 1971 the governments of the world decreed that as of that date all vehicles of the world should run on water rather than on gasoline. Within 48 hours, at the most, all vehicular traffic in the world would have ceased. The cause - an absurd decree - would have produced disastrous effects immediately. In human affairs, which are much more complex, it generally happens that bad decisions do not produce all their bad effects immediately, but only in the course of time. Today the world is struggling with an unprecedented economic collapse, caused by a mistaken decision taken almost 38 years ago.
Worst behind us but more stimulus needed: Roubi Nouriel Roubini, one of the few economists who accurately predicted the magnitude of the financial crisis, said on Thursday that the worst of the turmoil has passed. But Roubini emphasized the United States will still need a second fiscal stimulus, possibly by the end of this year, as the unemployment rate quickly approaches 10 percent. Developed economies are bottoming out or close to doing so, but the recovery will be anemic, with the United States remaining in recession throughout the year, said Roubini, who is chairman of RGE Global Monitor.
Stung by jobs data, White House defends stimulus Amid worsening jobs figures and continuing criticism about the speed of its economic recovery plan, the White House on Thursday defended President Barack Obama's efforts to lift the United States out of recession. Some five months after Democrats pushed the president's $787 billion economic stimulus package through the U.S. Congress, the package -- which spans two years -- has had limited impact on rising unemployment figures. On Wednesday, the Federal Reserve forecast that the unemployment rate would stay above 9.5 percent in 2010.
The One Mega Trend No One Is Talking About Thus far, analysis the financial collapse has been framed almost entirely in terms of money. All the research I've seen has delved into lending standards, securitization, inflation, interest rates, housing and the like. Yet underneath this veneer lies one larger, mega-trend that has driven all of these themes to a greater or lesser degree. It created one of the largest stock bull markets we've ever seen from 1982-2001. It helped drive the Bubbles in Tech stocks AND Housing. And now it will guide the coming collapse in stocks and consumer spending.
Dollar Is Near 2-Week Low Versus Euro as Safety Demand Weakens The dollar traded near the lowest level in two weeks against the euro on speculation advancing stocks will reduce international demand for safer assets such as Treasuries and Japanese debt. The yen is headed for the biggest weekly loss in two months against the euro after Nouriel Roubini, the New York University professor who predicted the financial crisis, said the recession will end this year. The Australian and New Zealand currencies were set for a weekly gain as investors bought the South Pacific nations' higher-yielding securities.
Verleger Sees $20 Oil This Year on 'Devastating' Glut Crude oil will collapse to $20 a barrel this year as the recession takes a deeper toll on fuel demand, according to academic and former U.S. government adviser Philip Verleger. A crude surplus of 100 million barrels will accumulate by the end of the year, straining global storage capacity and sending prices to a seven-year low, said Verleger, who correctly predicted in 2007 that prices were set to exceed $100. Supply is outpacing demand by about 1 million barrels a day, he said.
Gerald Celente we need Zero Point Energy t 15 July 2009
Fed Sees Heightened Joblessness Drawing Out Recovery A new forecast raised fresh doubts yesterday about how strong any economic recovery might be, as the Federal Reserve projected that the unemployment rate may surpass 10 percent by year's end and warned that the economy may not return to full health for at least five years. The projections, by 17 top Fed leaders, suggest that a jobless recovery could be approaching -- one in which the economy begins growing again in the coming months but times remain tough for American workers. The Fed leaders forecast higher unemployment rates than they had just two months earlier. At the same time, they upped their expectations for economic growth.
Foreclosures at record high in first half 2009 despite aid U.S. home foreclosure activity galloped to a record in the first half of the year, overwhelming broad efforts to remedy failing loans while job losses escalated. Foreclosure filings jumped to a record 1.9 million on more than 1.5 million properties in the first six months of the year, RealtyTrac said on Thursday. The number of properties drawing filings, which include notices of default and auctions, jumped 9.0 percent from the second half of 2008 and almost 15 percent from the first half of last year.
Foreclosures At New High The current wave of foreclosures is hitting people who are no longer able to pay their mortgage because they have lost their job. As Ben Tracy reports, loan modification programs are not keeping up.
Card Fees Pit Retailers Against Banks The most profitable item at Patricia Orzano's 7-Eleven store on Long Island is coffee. Slurpees are a distant second. But as more customers use plastic to pay for even small purchases like these, she has watched a growing share of her revenue vanish in a stream of credit and debit card fees that retailers say raise the price of goods and sharply lift the cost of doing business.
Health Legislation Is Said to Carry Debt Risk The director of the nonpartisan Congressional Budget Office testified on Thursday that health care legislation proposed by House Democrats and the Senate health committee would not slow what he called the unsustainable government spending on medical care, but instead could drive the nation further into debt. The testimony by the director, Douglas W. Elmendorf, before the Senate Budget Committee drew unusually blunt criticism from both the House speaker, Nancy Pelosi of California, and the Senate majority leader, Harry Reid of Nevada, in a sign of their rising frustration over the difficulty in paying for the health care bills. Asked about the testimony by Mr. Elmendorf, a highly regarded economist, Mr. Reid snapped derisively, "Maybe what he should do is run for Congress."
Health bill would deliver pre-Reagan tax rates Small-business owners are warning that the economy would suffer under a health care bill proposed by House Democrats, which would drive tax rates for high-income taxpayers to levels not seen since before President Reagan's tax reform of 1986. The top federal income tax rate, which Mr. Reagan and a bipartisan Congress lowered from 50 percent to 28 percent, would reach 45 percent in 2011 if Congress and President Obama enact the surtaxes that are part of the health care reform plan that House Democrats announced Tuesday.
Coburn: Dem health plan will kill Americans Sen. Tom Coburn said Thursday that President Obama's proposed government-run health-care system to help the uninsured would instead kill more Americans. "The last 10 years, a million more Americans are alive than otherwise would be if they had Canadian or British health care," Mr. Coburn, Oklahoma Republican, told The Washington Times American's Morning News. "That's because our survival rates for cancer, malignancies and coronary-artery disease are so far better. We have the available technology and acute interventions as well as prevention that those countries don't have."
Portable solar powered fridge goes off-the-grid A fridge that positively thrives in direct sunlight might seem a bit of a strange idea, but if you find yourself in a baking hot country where keeping your medical supplies cool and fresh could mean the difference between life and death, or you just want to sell some chilled refreshments to passers-by, then you need a portable, stand-alone chill solution. Industrial Insulation Systems (IIS) has developed a solar powered fridge/freezer which can be tailored to meet the needs of these off-the-grid scenarios.
'Wise Latina' routs gang of white men Judged against the standard of the U.S. Senate, maybe Sonia Sotomayor has a point. "A wise Latina" certainly came across smarter than most of those white men on the Judiciary Committee. The hearings on her nomination to the U.S. Supreme Court ended Thursday, and the mash notes served up to her by gaga Democratic senators when it was time for everybody to go home summed up just about all that everybody learned from the week's work.
Sotomayor's route to confirmation seems clear Supreme Court nominee Sonia Sotomayor appeared on the fast track to confirmation as the top Republican on the Senate Judiciary Committee said Thursday that he and his colleagues would not filibuster her historic nomination. The final day of the judge's testimony did not go entirely smoothly. The National Rifle Association (NRA) came out strongly in opposition to her nomination, and the New Haven, Conn., firefighter who has become the public face of one of her most fiercely debated decisions testified before the panel.
Security and Economic Revival Raise Hopes in the West Bank The first movie theater to operate in this Palestinian city in two decades opened its doors in late June. Palestinian policemen standing beneath new traffic lights are checking cars for seat belt violations. One-month-old parking meters are filling with the coins of shoppers. Music stores are blasting love songs into the street, and no nationalist or Islamist scold is forcing them to stop. "You don't appreciate the value of law and order until you lose it," Rashid al-Sakhel, the owner of a carpet store, said as he stood in his doorway surveying the small wonder of bustling streets on a sunny morning. "For the past eight years, a 10-year-old boy could order a strike and we would all close. Now nobody can threaten us."
Eastern Europe Is Uneasy Over U.S. Ties With Russia The deep concern among America's Eastern European allies over improved relations between Russia and the United States spilled into the open on Thursday when 22 prominent figures, including Poland's Lech Walesa and the Czech Republic's Vaclav Havel, published an open letter to the Obama administration begging not to be forgotten. In the letter, the leaders urged President Obama and his top policy makers to remember their interests as they negotiate with Russia and review plans for missile defense bases in Poland and the Czech Republic. Abandoning the missile defense plan or giving Russia too big a role in it could "undermine the credibility of the United States across the whole region," the letter said.
Taliban uses Afghan fear to fight surge Kills backers of U.S., government in Kabul The Taliban is seeking to blunt the surge of an additional 20,000 U.S. troops through stepped-up attacks on Afghans working with the U.S.-backed government, U.S. and Afghan officials say. For much of the past year, the militant group has worked to weaken the link between the government and citizens through targeted assassinations of people who work for or with Afghan institutions. This wave of intimidation is an enormous obstacle to Afghan officials and local tribal council members trying to reach out to Afghan citizens, often in areas where the government has lacked a firm grip.
Don't miss this interview! . . .
pt 1/3 Gerald Celente on Coast 2 Coast AM 14 July 2009
pt 2/3 Gerald Celente on Coast 2 Coast AM 14 July 2009
pt 3/3 Gerald Celente on Coast 2 Coast AM 14 July 2009
As one of the few economists with a record of successfully forecasting the recession, I can say with certainty that unless we return to true free-market principles, our economy will not rebound. Our families will continue to suffer. Unemployment and inflation will continue to rise. Our debt and deficits will continue to grow.
It is time to change course. Unfortunately, Congress and the President are continuing down the reckless path of more spending, more government intervention and more restrictions on free enterprise and individual liberty. Socialism has never worked anywhere, and it won’t work here. Washington must have the courage to stand by our founding principles in this time of crisis. Our politicians do not understand the stakes – which is why I am considering a run for the U.S. Senate.
Bad for the Goose, Worse for the Gander Last week, major banks announced they would no longer offer cash for the IOU's written by the state of California. At the same time, China proposed that the U.S. dollar be replaced as the world's official reserve currency. Although seemingly unrelated, these two developments have at their root the same issue: uneasy creditors. Inspired by Washington's profligacy, California's Democratic majority long pursued a policy of populist politics, supercharged by referendums, which called for increasingly massive expenditures. Exploding deficits were the natural result. Now, it has reached the point where holders and potential buyers of California debt have lost confidence in the state's ability to ever repay.
Part 1: 07/15/2009 Freedom Watch 23 w/ Ron Paul, G. Edward Griffin, Peter Schiff, more
Honest Money Mr. Gnazzo's meticulous research provides the reader with empowering information concerning America's monetary system. This eight part essay explains a dysfunctional system, why it is dysfunctional, and how it got that way. This is, IMO, mandatory reading for every responsible patriot
Honest Money, Part I: The Constitution and Honest Money The recent bull market in gold and silver has generated much discussion in the media regarding the "gold standard" of the past - versus the present system of irredeemable paper fiat currency known as Federal Reserve Notes. Even the issue of the constitutionality of the Federal Reserve and the irredeemable fractional reserve banking system it wields, as the Sword of Damocles above unwary heads, has been debated. Many well-intentioned and knowledgeable writers have rightfully questioned both the efficacy and the soundness of the present monetary system of paper fiat.
Honest Money, Part II: Silver Standard with a Bimetallic Coinage System As we have seen, the Constitution along with the Coinage Act of 1792, established by statutory decree that the dollar was the unit of account and also declared that a dollar or unit was "each to be of the value of a Spanish milled dollar as the same is now current, and to contain three hundred and seventy-one grains and four sixteenth parts of a grain of pure silver, or four hundred and sixteen grains of standard silver".
Honest Money, Part III: Coinage Acts from 1834-1900 The various monetary acts from 1792 until the act of 1834 were not of any important consequence and did not stray far from the original constitutional plan. Most of the acts had to do with “regulating” the value of foreign coinage with our own coin. The first act of major importance was the Act of 1834.
Honest Money, Part IV: Treasury Notes Article I, Section 8, Clause 2 of the Constitution grants Congress the power “to borrow money”. During several occasions in the 1800s, Congress used the power to borrow money by issuing Treasury Notes, which were paper claims of public indebtedness. In keeping with the constitutional mandate against “emitting bills of credit”, all but one series of Treasury Notes, until the Civil War, were issued accordingly: without creating any type of paper currency with legal tender authorization.
Honest Money, Part V: History of American Money and Banking During the 17th century, American settlers were starting to grow from small colonies and villages into larger towns and cities. Barter was the earliest method of trade, the direct exchange of one good for another. Soon certain commodities became most favored, such as furs and tobacco. In Virginia, warehouse receipts for bales of tobacco circulated as money.
Honest Money, Part VI: The European Connection Although Greenbacks are believed to be the main source of financing for the Civil War, they were not – government bonds were. The total emission of Greenbacks was under $850 million, while Treasury Bonds were issued in the amount of almost $2 billion.
Honest Money, Part VII: The Moneychangers - Secrets of the Temple 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.
Honest Money, Part VIII: Final Summary and Conclusions THE GOLD STANDARD Many are of the opinion that a return to the gold standard is the best answer for the urgently needed reform of our monetary system. As we have seen, however, the gold standard was not what many believe it to be. Gold was not the original constitutional standard – silver was. The so-called failure of the gold and silver standards is not a reflection on either silver or gold. The would be masters of the universe have gone to great lengths to discredit and dishonor both metals, by purposefully entangling them within a finely spun web of self-destructive standards and systems, knowingly doomed to fail from the start. All by careful design to attain the final goal: the removal of gold and silver from the world’s monetary system. Nothing was left to chance, just in case it exists.
Part 2: 07/15/2009 Freedom Watch 23 w/ Ron Paul, G. Edward Griffin, Peter Schiff, more
Gold Trades Near Two-Week High as Dollar, Oil Sustain Demand Gold traded near a two-week high in Asia after jumping yesterday as a slump in the dollar and a rally in oil prices helped sustain demand for alternative assets to hedge against inflation. Bullion was little changed after jumping 1.5 percent yesterday as oil rose the most in three weeks and a report showed U.S. consumer prices climbed the most in a year in June. The gain, after a three-day U.S. equity rally, shows the extent of investor inflation concerns, said Ben Westmore, energy and minerals economist at National Australia Bank Ltd.
'Gold is a hedge against US dollar decline' Agoracom market analyst Peter Grandich, who isn’t among those who expect the world at large to emerge from “this absolutely horrific downturn” by year-end, instead sees good opportunities on the horizon for investors who want to “buy things on the cheap” because prices will fall in the equity markets. He also sees bright prospects for gold—particularly gold ETFs and mining companies that are in or near production and have potential for developing additional deposits. At the same time, Peter tells The Gold Report that the “severely wounded” U.S. economy should anticipate rougher and tougher times. Given his penchant for accurate predictions, that’s not a very comforting forecast.
Will gold fall to $800/ounce? Even though gold remained in its new found highs following the recession-boosted safe haven sales, now doubts are being expressed over its ability to stay above $900 per ounce in the coming months. Although it has pulled back from the recent peak seen in February, the price has remained near historic highs amid uncertainty about how sustainable the current recovery is. Even as equity markets bounced gold has consistently continued to trade around $900 an ounce, amid ongoing fears about the health of economies around the world.
Washington's Dilemma: This Isn't a Recession, It's a Collapse Washington is bluffing that it will not bail out California, and every other state suffering from collapsed revenues and massive job losses. If cuts in police and schools don’t force DC off from its current position, then the math will. Because in many states the aggregate revenue losses and looming cuts to state payrolls will largely render the intended effects of federal stimulus as moot. Frankly, unless Washington prints money and bails out every state that needs capital, including California, federal power will decline amidst this severe economic recession, and the process of a soft American devolution will begin. If you think this idea is outrageous, then you’ve still not come to terms with a core reality of our current situation: the structure of this financial crisis is wholly different than any in our post-war era. This isn’t a recession. This is collapse.
The Carbon Cap: The Newest Form of Taxation It’s possible that no concept in history has ever come so far, so fast, and with so little substance behind it, as “global warming.” Or, to be precise, anthropogenic global warming (AGW) – the kind caused by us puny humans rather than by that fireball that keeps the planet habitable. We’re extraordinarily lucky. If present thinking is correct, the first single-celled living organisms may have appeared as much as 3? billion years ago, and it would appear that once life arrived, it never went away. That’s a very long time for conditions to have remained favorable enough to keep the chain from breaking.
Part 3: 07/15/2009 Freedom Watch 23 w/ Ron Paul, G. Edward Griffin, Peter Schiff, more
Funds drawn to China like 'moths to a flame' Fund managers from across the world are shunning the West in favour of China and emerging markets, yet still seem deeply concerned that rally over the last four months may prove to be a false dawn. The July survey of investors by Merrill Lynch found that a net 63pc believe the world will recover over the next year, but they lack conviction and are not committing hard money to the rebound. “Asset allocators remain very cautious on global equities,” said the bank. It noted a “very sharp increase” in cash as funds opt for caution, as well as a retreat from growth stocks into the safe havens of pharmaceuticals, health care, and utilities. Hedge funds have cut their net “long positions”, with many switching to the “short” side as the rally falters.
World Bank warns of deflation spiral The World Bank has given warning that global economy will fall into a "deflationary spiral" unless urgent action is taken to reduce high levels of excess capacity in industry. Justin Lin, the bank’s chief economist, said factories running idle around world threaten to trap economies in a vicious cycle, risking further spasms of financial stress, requiring yet more rescue packages. "Significant excess capacity has been built up and unless this issue is addressed, we will face a deflationary spiral and the crisis will become protracted," he told an audience in Cape Town.
Gary Shilling: Stock Market Will Crash As US Consumers Retrench . . . . here's a quick overview of Gary's outlook on things, along with a gallery of exhibits from his recent monthly Insight. • The economy won't start to recovery until 2010 (versus the current consensus of now). It will recover because the government will be forced into a second stimulus. • The US consumer rules the world...and the US consumer is cutting back fast • Consumer spending will drop from 70% of GDP to 60% as consumers pay down debt and go on a saving spree. . . .
Paulson: Hell Yeah We Threatened Ken Lewis! Why was Bank of America (BAC) CEO Ken Lewis so paranoid about losing his job if he defied regulators by wiggling out of the Merrill deal? Well maybe because he was threatened. At least that's what Hank Paulson is going to tell Congress tomorrow: BBC: Hank Paulson warned the bank's chief executive Kenneth Lewis that the Federal Reserve could oust him and the board if the rescue did not proceed. The Fed had previously denied putting pressure on anyone to seal the deal. Bank of America (BoA) bought Merrill during the height of the financial crisis and suffered severe losses.
Paulson defends his response to economic crisis Former Treasury Secretary Paulson defends response to financial crisis in bipartisan probe Defending the government's handling of the economic crisis last year, former Treasury Secretary Henry Paulson said Wednesday that the Bush administration's responses were not perfect but "saved this nation from great peril." "Many more Americans would be without their homes, their jobs, their businesses, their savings and their way of life," he said in written testimony prepared for a hearing Thursday.
Paulson takes responsibility in Merrill deal Former Treasury Secretary Henry M. Paulson Jr., in prepared testimony to be presented Thursday, deflects the blame from Federal Reserve Chairman Ben S. Bernanke and says he is the one who told Bank of America chief executive Kenneth Lewis he would be removed if he didn't go through with his acquisition of Merrill Lynch last December. It was only one of many times President Bush's last Treasury secretary knocked heads with top bank executives as he combated the worst financial crisis since the Great Depression. Among his strong-arm tactics, Mr. Paulson in October forced the nine biggest banks to accept $125 billion of federal funding to ensure they did not become victims of the crisis like Merrill Lynch, though Goldman Sachs, JP MorganChase and other banks did not want the cash and later returned it.
Paulson Sent ‘Strong Message’ to BofA Chief Henry M. Paulson Jr., the former Treasury secretary, intends to defend the “strong message” he sent to Bank of America’s chief executive, Kenneth D. Lewis, last year that abandoning the bank’s planned takeover of Merrill Lynch could cost Mr. Lewis and other executives their jobs. “Bank of America’s completion of the merger, and the subsequent assistance from the government, not only protected our country’s financial system, but also was in the best interest of the shareholders, customers, employees and creditors of Bank of America and Merrill Lynch,” Mr. Paulson said in testimony prepared for a Congressional hearing on Thursday.
Paulson Makes No Apologies for Role in Merrill Lynch Sale Former Treasury secretary Henry M. Paulson Jr. plans to tell a House committee today that he was right to pressure Bank of America to complete its acquisition of Merrill Lynch because allowing the deal to fall apart would have damaged the companies and the broader economy, according to a copy of his prepared remarks. The strongly worded testimony makes no apologies for the government's actions, which have become the subject of considerable controversy. Paulson acknowledges, for example, that he warned Bank of America that its senior managers could be removed if the deal fell through. He says the warning was issued because, "It would be unthinkable for Bank of America to take this destructive action for which there was no legal basis and which would show a lack of judgment."
Part 4: 07/15/2009 Freedom Watch 23 w/ Ron Paul, G. Edward Griffin, Peter Schiff, more
Mortgages Are Now a Bank’s Best Friend For the last two years, housing has been at the center of the banking industry’s troubles. But for at least one quarter, it will help lift its results. Even as banks remain cautious about lending and millions of borrowers still risk losing their homes, the mortgage business is returning as one of the most lucrative corners of the financial industry. The clearest evidence is emerging this week, as the nation’s biggest banks report their second-quarter numbers. As independent mortgage companies and brokers shut their doors last fall, and major players like Bank of America, JPMorgan Chase and Wells Fargo swallowed up troubled rivals, lending profit margins widened, doubling at big banks amid a refinancing wave during the first half of the year, analysts said.
Federal Inquiry Looks at Derivatives Data Providers Federal antitrust officials have opened a broad inquiry into the practices of the companies that serve as clearinghouses for trades of derivative instruments and are looking in particular at whether any companies have improperly used inside information about trades to profit, officials said on Wednesday. Markit Group Holdings, a data warehouse controlled by several big banks, disclosed on Tuesday that it had been notified by antitrust officials of an inquiry into the “credit derivatives markets and related markets” and that it would “provide any information requested.” On Wednesday the Justice Department issued a statement confirming the investigation and said that it would be looking to see whether any improper practices had occurred on an industrywide basis.
A Panel Is Named to Examine Causes of the Economic Crisis Congressional Democrats announced on Wednesday that Phil Angelides, a former California treasurer, would lead a commission to examine the causes of the financial crisis. The vice chairman of the panel, which has 10 members, will be Bill Thomas, the former Republican representative from California who led the Ways and Means Committee, who was selected by Republican leaders. Other Democratic-appointed members of the committee include Brooksley Born, the chairwoman of the Commodity Futures Trading Commission under President Bill Clinton; Bob Graham, a former Democratic senator from Florida; Heather Murren, a retired managing director at Merrill Lynch; Byron Georgiou, a Las Vegas businessman; and John W. Thompson, chairman of Symantec.
Pimco Says Yield Curve May Steepen to Record Level The difference between Treasury two- and 10-year yields may widen to record levels set last month as the U.S. economy recovers, according to Pacific Investment Management Co., which runs the world’s biggest bond fund. “Long-term rates will rise at a faster speed than short- term rates,” Pimco portfolio manager Tony Crescenzi wrote in a report distributed by e-mail early in the Asian trading day. “Market participants decided months ago that the Armageddon scenario was out and stabilization was in.”
Munis Outperform Treasuries for Third Day as Colorado Borrows Municipal bonds held their value better than Treasuries for a third day as Colorado sold almost $300 million of taxable debt securities for which the state will receive a partial interest-cost subsidy from the U.S. government. Colorado sold Build America Bonds to finance a justice complex and history museum in Denver, offering yields ranging from 5.27 percent on 10-year securities to 6.72 percent on those due in 2045. The University of Missouri also began offering about $252 million of the federally subsidized, taxable bonds and $75 million of traditional tax-exempt bonds.
Blinder Says Fed May Raise Rates in First Half of Next Year The Federal Reserve may start to raise its target interest rate from near zero in the first half of 2010 as the economy recovers, Princeton University economist Alan Blinder said. “I think the Federal Reserve will look around at the state of the financial system and the state of the economy” and “bump the federal funds rate above zero,” Blinder, who served as Fed vice chairman from 1994 to 1996, said in a Bloomberg Television interview today. “I am not talking about a massive tightening,” he added.
Obama to Change His Tune: Get Ready For A Second Stimulus, Shilling Says There was a great clamor last week for a second Federal stimulus - because the first one wasn't working. President Obama threw cold water on that idea over the weekend, when he rejected calls for a second stimulus and suggested that we need to be patient and give the first stimulus time to work. Well, President Obama will soon be changing his tune, says our guest Gary Shilling. By the third or fourth quarter, Gary says, the government will launch a second stimulus. Next year is an election year, and despite ballooning deficits, politicians won't sit idly by and watch themselves not get re-elected because the economy has failed to recover.
Treasuries, Dollar Pessimism Wanes as Recovery Outlook Dims Investors are turning less bearish on Treasuries and the dollar as signs the global economic recovery may not be as quick as anticipated bolsters demand for U.S. assets, a survey of Bloomberg users showed. Participants lowered their expectations for how high yields on 10-year Treasuries will rise and how far the dollar will fall over the next six months after the U.S. unemployment rate approached 10 percent and global stocks declined, according to 2,738 respondents from New York to Tokyo to London in the Bloomberg Professional Global Confidence Index. The outlook on the pound fell from the most bullish level since November 2007 to neutral, while optimism toward Brazil’s real faded.
At Goldman, Did Inflation Bring Deflation? Some people on Wall Street are suggesting that Goldman Sachs inflated its staffing numbers to deflate its compensation figures per employee. In a footnote to its financial results on Tuesday, Goldman said that for the first time it was including consultants and temporary staff in its overall employee figures. This had the result of increasing its official staffing levels by 2,000 jobs or so in both the first and second quarters. Earlier this year, for example, Goldman said it had 27,898 workers at the end of the first quarter, but now it says that number was 29,800.
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