Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Tues 12.01.2009
Warning on US muni market threat States need to consider permanent budgetary changes to close ballooning deficits or risk “significant cracks” in the municipal bond market, the lieutenant governor of New York said on Monday. Richard Ravitch said New York and other states have historically relied on temporary measures to balance budgets in downturns as a bridge to recovery, a strategy that is unsustainable. “If nothing changes, you will see significant cracks in the $3,000bn [municipal bond] market,” said Mr Ravitch, a long-time fixture in New York public office who served as an adviser to the governor during New York City’s financial crisis in the 1970s. He is now devising a four-year financial plan for New York state.
Democrats push new war tax After years of putting the cost of war on the nation's credit card, liberal members of Congress say the time has come to impose a new war tax and drive home to average Americans how expensive it is to keep fighting in Iraq and Afghanistan. The call for a tax on high-income earners, coming from top Democrats in the House and Senate, signals a deep level of concern in President Obama's own party about his plans to escalate the battle in Afghanistan.
An Empire at Risk We won the cold war and weathered 9/11. But now economic weakness is endangering our global power. Call it the fractal geometry of fiscal crisis. If you fly across the Atlantic on a clear day, you can look down and see the same phenomenon but on four entirely different scales. At one extreme there is tiny Iceland. Then there is little Ireland, followed by medium-size Britain. They're all a good deal smaller than the mighty United States. But in each case the economic crisis has taken the same form: a massive banking crisis, followed by an equally massive fiscal crisis as the government stepped in to bail out the private financial system.
Should Homeowners Be Able To Walk Away From Mortgage? Should homeowners who are behind in their mortgage be allowed to just walk way from the payments? A University of Arizona law professor suggests that maybe they should. While not recommending that homeowners forgo their responsibilities, Professor Brent White told CNBC Monday that there is a different set of rules for the business community and homeowners. "There's a double standard when it comes to banks and homeowners," said White. "Businesses often walk away from bad contracts, but homeowners can't. The banks need to modify bad loans."
The Catastrophic End of Market Manipulation . . . . This year we have witnessed first hand the problem with planned economies and free market manipulation. Tim Geithner, Lawrence Summers and Austan Goolsbee have tried to inflate a contracting economy by using massive manipulation and deception across all markets and have failed miserably. What they have done is further transferred the wealth of our nation from the poor and middle class to the rich bankers that caused the mess in the first place. What they will see very soon is the “blowback” from their market manipulation project with the total destruction of our global economic system. The Obama Administration Economic Team should be tried in court by a “jury of their peers” for the high crimes of Free Market Manipulation and may god have mercy on their souls.
The Collapse of America by excessive debt and hyperinflation - Gerald Celente, Marc Faber
Is Government Debt the Next Crisis to Strike? While American investors were busy enjoying their Thanksgiving dinners, global markets were shaken by word that Dubai asked for a payment holiday on the $59 billion it owes via its investment vehicle, Dubai World. The move, which comes as oversized bets on Persian Gulf real estate sour, was considered a default by the major rating agencies. Last week’s “standstill” request puts at risk up to $80 billion in debt linked to the emirate. While this is small in the context of the $3 trillion in losses written down by global banks since the credit crisis began, it may very well result in the largest country debt default since Argentina in 2002.
Precious Metals: Gold, silver buyers are increasing The head of a Delaware-based precious metals vault says he has seen unprecedented gold buying levels so far this year. Physical Gold Investment has been surging in 2009 as prices climb higher, with the World Gold Council revealing recently that demand grew by 11 percent on a quarterly basis in Q3. Now Bob Higgins, chief executive of First State Depository, has revealed that the number of people looking to use his facility - particularly first-time gold buyers - has been "off the charts".
Economic crisis keeps money flowing into gold A senior figure at Nihon Unicom says that gold prices should be able to resist even a major sell-off. With the yellow metal smashing records in recent weeks, some observers have predicted that the price could take a hit in the near future as investors look to cash in their profits. However, Hiroyuki Kikukawa, general manager at the Tokyo-based firm's market research department, explained that the economic crisis will keep money flowing into gold.
Gold price to remain $1,200 to $1,400 in December Despite gold’s big gains in recent weeks, it is not yet time to take profits. The above chart remains very bullish, so it is reasonable to forecast higher gold prices in the weeks ahead. Gold has clearly broken out from the huge base it formed over the past two years. This base is a ‘rocket pad’ that has launched gold, which I expect has the capacity over the next few weeks to climb into the $1200 to $1400 range I forecast for year-end, but it could be volatile. The $50+ trading range in gold this past Friday may be an indication that more volatility is coming.
Gold’s market-driven surge difficult to suppress Gold’s spectacular swoon on Friday provided fresh evidence that a red-hot bull market is in no imminent danger of cooling off. The initial plunge was orchestrated by bullion bankers and other promiscuous borrowers of gold when some unsettling financial news out of Dubai triggered a misbegotten panic into, of all things, dollars. Smelling blood, gold shorts pulled their bids when it looked as though the dollar was about to soar. Alas, the buck barely got off the launching pad before gravity re-asserted itself with a vengeance. The rally was so short-lived and feeble that it will have significantly diminished the dollar’s bizarre status as a “safe haven.”
Steadiness in gold and copper prices The announcement of a surprisingly large US trade deficit for September had some assuming the US consumer is back in a buying mood. Alas, the much watched Michigan consumer confidence index for November quickly followed, and it is off a large 4.6 points, from 70.6 in October to 66.0 now. The import gains were largely for crude oil, and there was some gain from the “declunkering” auto sector. Even in weak markets there will periods of restocking that have to be figured into single bits of data. Before Friday was done inventory levels for crude came out that were full enough to knock its price back from recent highs.
Gold steady near $1,180, uptrend intact Gold was mostly steady around $1,180 per ounce on Tuesday taking a break from a rally to record highs late last week, although the precious metal's appeal as a safe haven is expected to continue to attract buying. The yen fell against the dollar on Tuesday on news that the Bank of Japan would hold an extra policy meeting at 2 p.m., but the news only had a moderate impact on the gold market. The precious metal inched down as low as $1,175.50 after the news, but soon regained ground.
Gold steady, investors eye Dubai Tokyo - Gold was steady around $1,180 per ounce on Tuesday even as investors continued to watch for any fallout on financial markets from Dubai's loan payment troubles.
China should boost gold reserve holdings China should increase the amount of gold it holds in reserves to reduce potential losses from a depreciating dollar, the China Youth Daily said today, citing Ji Xiaonan, head of the supervisory committee at the state-owned Assets Supervision and Administration Commission. “We recommend China increase its gold reserves to 6,000 metric tons within three-to-five years and possibly to 10,000 tons in eight to 10 years,” the paper quoted Ji as saying. China increased its gold reserves by 76 percent to 1,054 tons since 2003, the official Xinhua News Agency reported in April.
China to buy IMF gold if price comes down Gold traded in a volatile 1.5% range early Monday in Asia and London, bouncing hard from a dip to $1165 as world stock markets unwound last week's gains and crude oil slipped below $76 per barrel. The "safe haven" US Dollar rose on the forex market, as did the Japanese Yen. Eurozone investors looking to Buy Gold saw the price retreat to a four-session low by the AM Gold Fix, down 1.1% from last week's all-time record Fix of €787.24 per ounce. Gold priced in British Pounds traded at £710 an ounce by lunchtime in London, some 2.3% below Friday's new record intra-day peak.
China may beat India in gold consumption China is showing an unending appetite for the yellow metal and its production is set to record a new high this year. According to newspaper reports, the country’s gold demand might be more than 450 tonnes this year, up from 395,6 tonnes last year, and output might climb to 310 tonnes, compared with 282 tonnes a year earlier. China overtook South Africa to become the world’s largest gold producer in 2007. The World Gold Council (WGC) said in July China might pass India as the biggest consumer. Bullion touched a record of 1195,13 /oz on Thursday as a weaker dollar drove demand.
China to increase gold reserves to 10,000 tons An official is quoted as saying China means to increase its gold reserves (last quoted at about 1054 tons) to 6000 tons in the next 3-5 years and perhaps 10,000 tons in the next 8-10 years. It also provides an unusually blunt statement regarding China’s low opinion of the U.S. dollar and other Western currencies. A professor at the central bank’s graduate school is quoted as saying, "Strictly speaking, almost half of our country’s foreign exchange reserve is not stable in value and is of high risk."
Gold: Will Dubai sandstorm hit bullion market? The Dubai-based financial sandstorm that roiled the markets late last week showed some signs of dissipating as the new trading week got underway. While the Dubai finance minister indicated that the emirate will not guarantee anything when it comes to local banks, such banks appeared to receive verbal support from Abu Dhabi. The UAE's stepping up to the plate to support institutions that have exposure to what was to be the ultimate amalgam of Disneyworld/Las Vegas ultimately led to a bounce in emerging market stocks and a resumption of the trend in the dollar and commodities.
'Dubai debt crisis will not hit gold prices' The Dubai debt crisis will have no impact on the gold prices. We at GJF had predicted one year ago that gold trading in Dubai will become a problem because there is much more gold trading happening in India and China, compared to Dubai. The government has signed an agreement with Asean countries to allow the transit of gold through these Asean countries at zero duties from 2012.
Gold Buyers Nip at Ultimate Emotional Experience Why is it no matter how much the world advances intellectually and technologically, people keep speculating on gold? John Neff, who managed Vanguard Group’s Windsor Fund for three decades, once offered this take on the precious metal: “It’s not an investment, it’s an emotional experience.”
John Paulson Hoarding More Gold Than Several Countries Combined John Paulson of Paulson & Co, the legendary hedge fund manager who made tens of billions betting on the mortgage crisis between 2007 to 2009, likes gold. He really likes it. He likes gold more than a friend. To most market participants, this is not news, but here’s something you probably didn’t know: Paulson owns more gold than several major countries! Combined!
China 2009 Gold Demand, Output May Gain to Records China, the world’s largest gold producer, may break records for both demand and output this year as jewelry consumption soars and miners expand production after prices reached all-time highs, the China Gold Association said. Gold demand may be more than 450 metric tons compared with 395.6 tons in 2008, and output may climb to 310 tons, compared with 282 tons a year earlier, Zhang Yongtao, deputy secretary- general of the association, said at a conference in Kunming yesterday. China’s gold production increased by an average 9.5 percent in the past eight years, he said.
China May Use Dubai Crisis to Purchase Gold, Oil, Daily Reports China may use Dubai World’s possible default as an opportunity to buy gold and oil with it foreign currency reserves, an official at the commission that oversees Chinese state-owned companies was cited as saying by a newspaper. The effects of Dubai World’s possible default may last some time, giving China an investment opportunity, Ji Xiaonan, head of the supervisory committee at the State-owned Assets Supervision and Administration Commission, was cited as saying by the Economic Information Daily.
A grudging acknowledgement of gold market manipulation Another important acknowledgement of manipulation of the gold and silver markets was published today -- and by a long-time disparager of suggestions of manipulation. The acknowledgement came from Robert J. Moriarty, proprietor of the excellent 321Gold.com Internet site. In a wide-ranging commentary headlined "Last Week Was a Top in Gold," Moriarty wrote: "Gold and silver are no more manipulated than any other commodity. The government thinks it's their job to manipulate currencies, interest rates, and probably the stock market as well. Why wouldn't they manipulate gold and silver as well? "But a fundamental belief in manipulation and conspiracy as being the prime mover behind the price of silver and gold is to say you don't believe in supply and demand. Sooner or later, supply and demand have to have some effect."
Hi ho silver, up and away Other white metal appears set for a gallop . . . . Here’s what I like about silver as a long-term investment instead of gold: it’s got the one-two punch. Not only is it a precious metal like its big brother, but the bulk of demand for silver actually comes from its industrial uses: batteries, dentistry and as an electricity conductor. Silver even has anti-bacterial qualities — which is why surgical equipment is often made with silver (and why 2000 years ago whenever a ship went on a long voyage they’d store water and food in silver vessels). It is the health features of silver that probably led to the various myths surrounding the metal (for instance, it takes a silver bullet to kill a vampire).
If the US Weakens Again, What Happens to Metals? . . . . If gold’s price gains are saying anything specific it’s that a strengthening Yuan could be harder on the Dollar than anything else. The broader message is however that the currencies dance winners won’t be known till the music stops. This is creating a market for the yellow metal as a neutral asset against all fiat currencies that we expect would largely be sustained even if the currency pairs roll over and the Dollar sees a gain. A consolidation of gold’s price on a large uptick for the greenback should still be expected, but gold holders would be as interested in the yellow metal’s value in their home currencies as in its trade against the Dollar, and that could steady its market. The Dollar has seen brief periods of strength in the past few sessions that have not led to anything like the gold selloffs expected by some. It’s also of note that gold is now quite close to record highs in several other currencies, including the Euro.
Madmen, Gamblers, Alcoholics, the US Dollar and Gold . . . . For every intervention in the free market, whether by government edict or monetary policy, there are unintended consequences. Government intervention in the US housing market, for example, intended to increase opportunities for home ownership among less successful members of society, played a key role in undermining lending standards. Combined with the Federal Reserve’s policy of low interest rates, which fueled speculation in real estate and mortgage backed securities, government intervention ultimately proved disastrous.
U.S. Dollar Set To Surprise by Falling to Test All Time Low The dollar ($) is set to surprise the few remaining speculators that think it can't happen by falling further straight away, possibly taking it down to test all time lows at 71. Here, we are talking about the possibility of a more disorderly decline in the $ developing as a result of gold progressing into a parabolic rise, primarily predicated on year-end hedge fund buying into December. First it will be this that takes precious metals higher into year-end, and then the rally could continue for numerous other reasons, not the least of which being a lack of physical, which appears to be a growing concern.
Run on the U.S. Dollar ....Soon Porter Stansberry writes: It's one of those numbers that's so unbelievable you have to actually think about it for a while... Within the next 12 months, the U.S. Treasury will have to refinance $2 trillion in short-term debt. And that's not counting any additional deficit spending, which is estimated to be around $1.5 trillion. Put the two numbers together. Then ask yourself, how in the world can the Treasury borrow $3.5 trillion in only one year? That's an amount equal to nearly 30% of our entire GDP. And we're the world's biggest economy. Where will the money come from?
Dollar May Fall as Emirates’ Bank Aid Renews Demand for Risk The dollar may extend its drop against most of its major counterparts as investors shifted to riskier assets on optimism creditors to Dubai World can absorb losses on the state-controlled holding company’s debt. The greenback posted its longest stretch of monthly declines versus the euro in almost five years as the United Arab Emirates’ monetary authority said on Nov. 29 it “stands behind” local and foreign banks. The dollar weakened versus the Canadian currency as a report showed U.S. business activity posted its first back-to-back expansion in more than a year.
Dollar May Return to Being ‘Under Seige,’ UniCredit Says The dollar may resume its decline as concern eases that the Dubai World crisis will escalate, UniCredit SpA said. “News that the United Arab Emirates central bank will back Dubai debt should convince markets that the Dubai crisis won’t spread,” analysts including Roberto Mialich in Milan wrote today in a report. “Expect more swings depending on stocks, but the dollar should ultimately return under siege.”
Worries that Dubai washing its hands of debt woes As investors look for reassurance, Dubai offers little, distancing itself from debt crunch If global investors were looking for reassurances from Dubai that it would stand behind its massive, debt-swamped investment conglomerate, they got none Monday. Instead, the Gulf city-state seemed to wash its hands of the financial woes that have rattled world markets. The muddled message from Dubai has fueled worries over a possible default by the conglomerate, which is involved in projects around the world -- from Gulf banks and ports in 50 countries to luxury retailer Barneys New York and a grandiose six-tower hotel-entertainment complex in Las Vegas.
Dubai rejects debt guarantee Dubai’s government will not guarantee the debts of Dubai World, the state-owned holding company struggling under the weight of $59bn (£36bn) in liabilities, arguing that lenders were mistaken to think that there was sovereign backing. Abdulrahman al-Saleh, department of finance chief, said that creditors were responsible for their own lending decisions and should differentiate between companies and the state. “Creditors need to take part of the responsibility for their decision to lend to the companies. They think Dubai World is part of the government, which is not correct,” Mr Saleh said.
Dubai Debt Fiasco Could Weigh on U.S. Banks A potential default by Dubai on debt payments could have a ripple effect on U.S. banks and the still-gloomy commercial real estate industry, some analysts say. Citigroup Inc. (NYSE: C) has $1.9 billion invested in the nation’s state-owned investment vehicle Dubai World, JPMorgan Chase & Co. (NYSE: JPM) said in a research note. While not directly affecting Citi or other major U.S. banks, the indirect effects could be more crippling on a broader scale, Rochdale Securities analyst Dick Bove told CNNMoney. “There could be huge indirect exposure,” Bove said. “One has to assume that U.S. banks will be hurt.”
The Lesson of Dubai: The Crisis Is Not Over As we reach the end of a miserable 2009, signs continue to mount across the globe that the world economy is stirring back to life. The U.S. finally returned to growth in the third quarter, with its strongest showing in two years, India posted inspiring 7.9% growth and the results out of tiny Taiwan, one of the economies slammed the hardest by the global recession, were so impressive one economist beamed that the island "got its groove on." Stock markets, aside from a downward blip here and there, have generally been buoyant. During this season of Thanksgiving and holiday cheer, there seems to be good reason to give thanks and be cheerful.
Dubai World over-reaction, Ben Bernanke Op Ed
Dubai World heavily invested in US hotels Dubai World debt woes could spell trouble for its high-profile US commercial properties Dubai World borrowed billions of dollars to acquire some of the most high-profile commercial developments in the United States in recent years, and it could be forced to sell them at a loss if the Persian Gulf conglomerate can't restructure its debts. Dubai World said last week it would seek a six-month delay in paying creditors on nearly $60 billion it owes. The desert emirate racked up the debt during its own real estate bubble that popped with the global recession.
Dubai's threat to U.S. banks Although there's little direct exposure to Dubai World's default risk, U.S. financial institutions could take major indirect hits. The news that the state-run investment company of Dubai requested a postponement of billions of dollars of debt this week could pose a big problem for U.S. banks. Dubai World owes about $60 billion. It rang up much of that in a building boom that included the world's tallest skyscraper and the Palm Islands in the Persian Gulf, settlements shaped like palm trees.
Dubai says not responsible for Dubai World debt The Dubai government said on Monday it was not responsible for the debts of Dubai World, dealing a blow to creditors' assumptions that the Arab emirate would guarantee the conglomerate's liabilities. "Creditors need to take part of the responsibility for their decision to lend to the companies," said Abdulrahman al-Saleh, director general of Dubai's Department of Finance. "They think Dubai World is part of the government, which is not correct."
Dubai World to Restructure $26 Billion of Debt Dubai World said it began “constructive” talks with banks to restructure $26 billion of debt, including liabilities owed by units Nakheel World and Limitless World. Debt from subsidiaries such as Infinity World Holding, Istithmar World and Ports & Free Zone World will be excluded from the negotiations because those companies “are on a stable financial footing,” Dubai World, one of the emirate’s three main state-related holding companies, said in a statement.
80% Chance Of A Market Crash Over The Next Year Fund manager John Hussman says he under-estimated how little investors have learned in the market crashes of recent years and thus has missed much of the market upside this year. But he's not changing his tune. And the market's current altitude, combined with crappy economic fundamentals, make Hussman put the odds of a crash and economic downturn over the next year at a startling 80%.
Fed moves to drain some money out of economy The Federal Reserve is taking steps to fine-tune a strategy to reel in some of the unprecedented amount of money that's been pumped into the U.S. economy during the financial crisis. The Federal Reserve Bank of New York said Monday that investors and others shouldn't read anything about the timing of when the central bank will need to reverse course and start boosting interest rates and removing other supports to fend off inflation.
After flooding economy, Fed to mop up money Central bank to test plan, warns that it will have no effect on rate policy The Federal Reserve is fine-tuning a strategy to reel in some of the unprecedented amount of money that's been pumped into the economy during the financial crisis. The Federal Reserve Bank of New York said Monday that investors and others shouldn't conclude anything about when the central bank will reverse course and start boosting interest rates and removing other supports to fend off inflation.
The Dangerous US Financial Sector Is Still Smoldering and May Reignite Timmy and the Merry Pranksters at the Treasury and the Fed are throwing taxpayer money at the financial sector with the same prudence with which Angelo Mozilo used sunblock. Smothered by paper, the fire in the financials is still smoldering, and could reignite with the breezes of further credit contractions in commercial real estate, mortgage foreclosures, and frothy debt in the developing world.
Bove: 26 Banks May Need To Raise More Capital The traders were closely monitoring the action in overseas banks on Monday after Dubai asked to postpone repaying billions of dollars in debt. However, many domestic banks traded higher after Goldman Sachs said Citigroup, Bank of America, JP Morgan and others US financials should avoid a major hit because they have a lot less direct exposure to Dubai than their European counter-parts.
Bove predicts 200-300 more bank failures Richard Bove of Rochdale Securities, who spoke at The Deal Economy 2010 Conference says that 200-300 more banks will fail in a year or a year and a half due to commercial and residential real estate loans. In this video Bove also adds that financial reform is headed in the wrong direction.
Controlling the Currencies It's no secret that emerging markets are the place for growth these days. Having not only survived, but thrived, post--financial crisis, nations from China to Indonesia have seen huge inflows of foreign investment in the last few months. While that's good news on many fronts, it also pushes up the value of local currencies, making exports less competitive and labor and other business costs higher, which could threaten growth.
China-U.S. Currency Fight Turns Nasty China rejected Monday the charge that it was keeping the yuan artificially low against the dollar, but rather blamed another "major economy" for keeping its own currency weak. China's trade minister Chen Deming didn't mention a specific country by name, but was widely understood to be referring to the United States. Many in the West blame Beijing for pegging the yuan at unfairly low rates to help exporters undersell foreign competitors in global markets. Critics say the currency control has aided China's rapid rise this decade as an export powerhouse, costing manufacturing companies and jobs in Europe and the United States.
In-Geithner-We-Trust Bond Market Gets Lowest Yield Less than a week after deflecting calls for his resignation, Timothy Geithner sold bonds on behalf of U.S. taxpayers at the lowest yields on record in a show of confidence in the Treasury Secretary’s policies. Even as the nation’s debt increased by $1.15 trillion this year to $6.95 trillion in October, the government’s interest expense under Geithner dropped 15 percent, the biggest decrease since before 1989, according to data compiled by Bloomberg. The Treasury auctioned $44 billion of two-year notes Nov. 23 at a yield of 0.802 percent, the lowest on record.
Geithner under fire Calls for Treasury Secretary's resignation from both right and left could hurt administration's influence in some key debates coming up on Capitol Hill. Despite recent calls for him to resign coming from both the right and the left, Treasury Secretary Tim Geithner isn't likely to lose his job. The bigger question is how much the recent criticism limits his ability to do his job. And that's an important question. Geithner will be in the lead in many issues about to break into the forefront for the Obama administration.
Federal Reserve tries theater ads to burnish its image Spots urging shoppers to use their credit cards wisely will be shown on big screens in 12 U.S. cities. The central bank has long been accused of neglecting its consumer protection duties. Reporting from Washington - The Federal Reserve isn't too popular these days, what with its failure to predict or prevent the financial crisis and recession, not to mention its involvement in last year's bailouts. Rep. Ron Paul (R-Texas) has a bestselling book out called "End the Fed," and some lawmakers are looking to cut back the central bank's power. It sounds like a perfect time for an ad campaign. The Fed has made a 45-second public service announcement to help consumers use their credit cards wisely. The spot will run before movie previews at theaters in 12 U.S. cities, including Long Beach, from Friday through Dec. 3.
Taxing Wall Street Today Wins Support for Keynes Idea John Maynard Keynes proposed a tax on financial transactions in the middle of the Great Depression, and another economist, James Tobin, revived the idea in the 1970s as a way to counter currency market speculation. Neither effort gained much acceptance. Now, a growing number of economists and politicians argue that it’s time for a levy on trading stocks, bonds, currencies and derivatives.
Fed's withdrawal from housing threatens growth The housing market has shown some encouraging signs of strength in recent months, but analysts caution that the market is mostly responding to powerful government stimulus measures and is not healthy enough to keep growing on its own after the withdrawal of federal aid. One major challenge: The Federal Reserve has said it would soon stop purchasing home mortgages after accumulating an unprecedented $1.25 trillion of them since January in an attempt to keep 30-year mortgage rates near or less than 5 percent.
NY Fed to Test Reverse Repos, Eventually Seen as Key to Exit Strategy The Federal Reserve Bank of New York said Monday it will implement “small scale” reverse repurchase agreement transactions “over coming weeks,” but it said the operations have no implication for monetary policy. “These forthcoming operations are being conducted to ensure operational readiness at the Federal Reserve, the triparty repo clearing banks, and the primary dealers,” the bank said in a statement. “The operations have been designed to have no material impact on the availability of reserves or on market rates,” it added.
U.S. Treasury to Push Lenders to Finish More Home Modifications The U.S. Treasury Department plans to intensify public pressure on lenders to finish modifying more home loans to troubled borrowers under a $75 billion campaign against the record tide of foreclosures. Almost 651,000 loan revisions had been started through the Obama administration’s Home Affordable Modification Program as of last month, from about 487,080 as of September, according to the Treasury. None of the trial modifications through October had been converted to permanent repayment plans, the Treasury data showed. That failure is getting the administration’s attention.
Bove on debt in the banking sector As the population of people at the age to buy a home decreased, banks started making subprime loans that were wrapped into newly created products like collateralized debt obligations, collateralized loan obligations, credit default swaps and mortgage-backed securities, which China bought up. As a result, by 2007, debt in the U.S. was growing three times faster than income growth. Thus, Bove concludes, the crash.
Lenders Face Sanctions for Failed Loan Modifications The U.S. Treasury Department will begin taking action against lenders that aren’t doing enough to ease mortgage payments for troubled homeowners as part of the Obama administration’s campaign to curb foreclosures. Lenders face “consequences” that may include sanctions and monetary penalties if they fail to perform under the Home Affordable Modification Program, the Treasury said. The $75 billion program requires banks that took federal aid to help homeowners at “imminent risk” of default by lengthening repayment terms, lowering interest rates and making other changes to the mortgages to avert foreclosure.
Why Black Friday Data Points To A Grim Holiday Season If you were counting on what Glenn Reynolds calls "the retail support brigade" to come riding over the hills, you might want to rethink. After last year turned in one of the worst holiday shopping seasons in decades, people were hoping that things might perk up this year, but Black Friday's results don't look too good for retailers. Sales were up a paltry 0.5% from last year, and that only because a lot more people came out bargain-hunting. Sales on the day after Thanksgiving rose just 0.5% to $10.66 billion, according to ShopperTrak RCT Corp., a research firm that monitors sales at more than 50,000 stores. That compared with a 3% year-over-year Black Friday increase in 2008 and an 8.3% surge in 2007.
Health Premiums Rise for 14 Million With Senate Bill Insurance premiums would jump as much as 13 percent for millions of Americans under a U.S. Senate proposal that Democrats have pitched as making care more affordable, a nonpartisan report found. The higher fees would be paid by the 14 million Americans who buy their own coverage and earn too much to get proposed subsidies, according to the report today from the Congressional Budget Office. Subsidies would lower costs for 18 million people. The 134 million people covered through large employers may see premiums hold steady or fall as much as 3 percent.
Health bills fail to block illegals from coverage Hundreds of thousands of illegal immigrants could receive health care coverage from their employers under the bills winding their way through Congress, despite President Obama's explicit pledge that illegal immigrants would not benefit. The House bill mandates, and the Senate bill strongly encourages, businesses to extend health care coverage to all employees. But the bills do not have exemptions to screen out illegal immigrants, who usually obtain jobs by using false identities and are indistinguishable from legal workers.
Sticker Shock at Pump: Gas Prices Poised to Soar The gap between what drivers are paying for gasoline compared with a year ago is widening and figures to get worse between now and the end of the year. Prices at the pump were $2.629 a gallon on Monday, 80.4 cents more a gallon than a year ago, according to auto club AAA, Wright Express and Oil Price Information Services. That is about $40 more a month for a typical motorist. The government releases its survey on retail prices late Monday.
Meet Al Gore at Copenhagen, for $1,209, snack included A fleeting few moments with a former vice president now goes for $1,209. "Meet Al Gore in Copenhagen." An official announcement from this fair Danish city says all: the former vice president is getting star treatment when he arrives with an entire swarm of green-minded gadflies for the United Nation's week-long global warming extravaganza that begins Dec. 7. "Have you ever shaken hands with an American vice president? If not, now is your chance. Meet Al Gore in Copenhagen during the UN Climate Change Conference," notes the Danish tourism commission, which is helping Mr. Gore promote "Our Choice: A Plan to Solve the Climate Crisis," his newest book about global warming in all its alarming modalities.
China's overdue credit-card debt reported rising sharply While China has the reputation in the West as a nation of frugal savers, a state-media report Tuesday cited another sharp rise in overdue credit-card accounts, highlighting a downside to the country's rapidly expanding economy. Credit-card debt at least six months overdue rose 126.5% for the first three quarters of 2009 compared to the same period last year, Xinhua news agency reported, citing People's Bank of China data. By the end of September, China's banks had issued 175 million credit cards, a 33.3% increase from last year, according to the report -- which said that the central bank has warned of potential risks of mounting overdue credit-card debt.
Venezuela closes four seized banks to public Venezuela’s socialist government has closed four private banks, a day after President Hugo Chávez said he would have “no problem” nationalising banks that failed to lend to the poor. Ali Rodriguez, finance minister, said the banks were “severely compromised”. The government seized control of them on November 20, citing insolvency, the questionable origin of funds and a failure to comply with regulations. “The negative performance of the banks makes their closed-door intervention necessary,” said Mr Rodriguez in a televised address on Monday. He said that two banks, Banco Provivienda and Banco Canarias, would be shut down indefinitely, while the two other banks, Banco Confederado and Bolivar Banco, could still be rescued.
Obama Issues Order for More Troops in Afghanistan The White House said Monday that President Obama had issued orders to send thousands of additional troops to Afghanistan, relaying his decision to military leaders late Sunday afternoon during a meeting in the Oval Office. Mr. Obama spent Monday telephoning his foreign counterparts — including the leaders of Britain, France and Russia — informing them of details that he will announce in a nationally televised address on Tuesday night from the United States Military Academy at West Point.
Press TV/On the edge with Max Keiser/11/27/2009-Part1
Press TV/On the edge with Max Keiser/11/27/2009/Part2
Press TV/On the edge with Max Keiser/11/27/2009/Part3
Gold price to jump over $2,960 TGR: You've previously mentioned all currencies are devaluing almost simultaneously. Other than currency devaluation, what's driving the price of gold and silver? RW: Well, a lot of it is fear; gold is now basically considered to be money in many of the foreign countries, partially in the U.S., more overseas. I think a perfect example is Vietnam. It looked like they were going to have some things that would work out in their economy, and unfortunately for them, a lot of it's coming apart. And they know from experience that if they can get into gold and hang on, they're going to be a lot better off.
Reasons Why Gold Is Going to $1,300 an Ounce The gold bears got tossed a bone last week, when the World Gold Council reported that total gold demand dropped 34% in the third quarter from a year earlier. To be sure, total identifiable gold demand was up 15% from the abysmal second quarter, but the bears seized on the news as a sign that gold has one foot on the Slip ‘n’ Slide of Doom. Yeah, sure. That’s why gold prices just hit a new high. Let me tell you about six things that gold bears aren’t considering. Some is just new information on basics you already know. But some of this news could rattle your cage.
Fact #1: We’re at Peak Gold!. . .
Fact #2: South Africa’s Gold Reserves Downgraded by 90%!. . .
Fact #3: Central Bank Purchases of Gold Are Increasing. . .
Fact #4: By Historical Standards, Gold Is Cheap. . .
Fact #5: Government Debt Is Exploding. . .
Fact #6: All Major Currencies Are Falling Against Gold. . .
Gold Rebounds After Friday's Plunge, Where Next? It looked like a rough time on Friday but gold rebounded and in the end it wasn’t all that bad. Where does that leave us now? GOLD LONG TERM Although the week was a good one, even with a day’s holiday, the long term momentum indicator continues to give some concern. As mentioned last week, concern is one thing but what’s happening is another. Although there is concern for the loss of strength shown by the momentum indicator the direction of action continues to be upward. For now everything still looks good but we should not forget the warning from the diminishing momentum.
Gold gains from dollar roller-coaster ride Currency markets could be unsettled this week. The dollar weakened sharply last week. Further declines may not be seen for the dollar, but the dollar could toss and turn against the euro and other currencies. The European and North American economies are moving toward an economic recovery. Whether they will achieve a sustainable recovery or fall back into recession is not clear. Pending any major economic or financial disruption, recovery seems most likely, but there are any number of problems looming over the world economy at present that could upset this outlook.
Gold still shines despite denting from Dubai AUSSIE gold producers won't be fretting too much about the retreat in gold prices from record levels in response to renewed strength in the US dollar, itself due to Dubai's financial crisis. Gold closed $US15.30 an ounce lower at $US1176.70 an ounce in the US on Friday, leaving it at a level at which if the gold producers can't make money, they shouldn't be in the game. On average, they are making plenty at these levels. A nice bit of research work from Mike Chester at Axiom Advisory tells us so. A survey of September-quarter production reports by Chester found gross margins for small to mid-tier gold producers were in fact lower than in the preceding June quarter at $A394 an ounce, due mainly to the strong US exchange rate.
World Markets Tumble on Dubai Debt, Weak Dollar
Jim Rogers Says Gold Price Will Double in Months The rally in gold prices has driven several bullion analysts to frenzied forecasts. Some say gold prices will reach $2,000 per ounce soon. Others are predicting big boom for the yellow metal, saying gold prices will zoom to $5,000 and eventually to even $15,000 per ounce in the years to come. What is happening in bullion market these days? Yes, agreed that weakening dollar, global economic meltdown, shrinking gold supply and increasing cost of mining gold from the earth are all making gold the most-sought after investment these days. That is also driving the yellow metal prices to record highs.
Jim Rogers on Why Gold Is Glittering So Brightly Maria Bartiromo talks to Jim Rogers . . . . Well, I own gold and I have for a while. How high can it go? I fully expect it to be over a couple thousand dollars an ounce sometime in the next decade—I didn't say the next month, I didn't say the next year, I said the next decade—because paper money around the world is very suspect. But right now everybody's bullish on it, so I don't like to buy things when that's happening. But I'm not selling under any circumstances.
How High Can the Gold Price Rise in the Short-Term? It took a few days for the market to understand the impact of the Indian Reserve Bank's purchase of 200 tonnes of the I.M.F.'s gold sale of 403.3 tonnes, but eventually the market did respond. Since then, one of several announcements has been made, concerning the balance of 200.3 tonnes still being sold. The I.M.F. has promised to inform us that they will tell us how much they were unable to sell and to sell that amount, if any, slowly in the 'open market' without disrupting the price. We will be surprised if there is any left. India has indicated it will buy more if given the chance. So keep your eye open for the next announcement too [Since this was published Sri Lanka has bought 10 tonnes].
Dubai shakes equity markets, helps gold Overnight news out of Dubai has sent global equity markets reeling and generated a safe haven flow into the US Dollar as carry trades are unwound and a flight away from risk occurs. Dubai has asked for a 6 month moratorium on its debt obligations, which for all practical purposes is a type of default. Needless to say, this came with little to no warning and has sent the markets into quite a tizzy. Gold shot higher on the news and touched a record $1,195 before some light long liquidation connected with carry trade unwinding got underway. Look for it to be well bid on any setbacks in price as this sort of news is extremely disturbing. After all, we are talking about the financial hub of the Middle East. Imagine the repercussions that would occur should London have announced this sort of news and you can understand why stock markets were pummeled overnight.
Dubai drags gold to first loss in 10 days Debt jitters spark broad-based selling in metals futures Gold futures fell Friday, ending their nine-session winning streak, as Dubai's debt woes fueled a sell-off in commodities and stocks, while the U.S. dollar gained against its rivals. Gold for December delivery tumbled from a high of $1,195 an ounce to an intraday low of $1,130.10 in electronic trading overnight -- a decline of more than 5%. However, floor trading yielded a narrower loss, with the contract ending down $12.80, or 1.1%, at $1,174.20 an ounce on the Comex division of the New York Mercantile Exchange. The contract had soared more than $80, or 7.3%, over the previous nine sessions. Trading on the exchange was closed Thursday for the Thanksgiving holiday. Despite Friday's losses, the metal ended the week up 2.6%.
The Gold Market Fights Back There was some quirky behavior in the gold market – as a consequence of the market-shock from the announcement by Dubai World that it was essentially defaulting on its debt. The first reaction of the gold market was a move up, although gold gave up those gains over the course of trading on Thursday. Then there was the much more suspicious move in the gold market the day after the announcement – which (by pure coincidence) occurred when U.S. markets re-opened after the U.S. Thanksgiving. Gold plummeted over 5% in essentially the blink of any eye. It then bounced back nearly as quickly. This “delayed reaction” reeks of the gold-sabotage operations for which the anti-gold cabal have become famous. However, the powerful rebound of not only the precious metals, but also the precious metals miners has provided a vivid illustration of the waning power of that cabal.
China, gold, and the civilization shift Stephen Jen from the hedge fund Blue Gold Capital has a warning for those who think that gold has risen far too high, is necessarily in a speculative bubble, and must soon come clattering back down. Mr Jen is an expert on sovereign wealth funds from his days at Morgan Stanley. The gold story - essentially - is that the rising economic powers of Asia, the Middle East, and the commodity bloc are rejecting Western fiat currencies. China, India, and Russia have all been buying gold on a large scale over recent months. Why should that stop when the AAA club of sovereign debtors is pushing towards the danger threshold of 100pc of GDP? These new players account for almost all the accumulation of foreign currency reserves worldwide over the last five years, so what they do matters enormously.
Gold sparkles in 'perfect storm' for precious metal Gold prices have rocketed to record heights close to $1 200 an ounce as a "perfect storm" of market conditions propels demand for the precious metal, analysts said. Gold, whose two main drivers are jewellery and investment buyers, hit a record $1 195,13 dollars an ounce on the London Bullion Market on Thursday. The glamorous metal has won major support in recent weeks and months from a weak dollar, inflationary fears and increasing moves by central banks to diversify assets away from the greenback and into the commodity.
Precious metals pushing up commodity prices Precious metals prices continue to move higher, with gold reaching record levels. Investors have been driving the increase in prices, out of a range of economic, political, and financial concerns. The last two weeks saw a diminution of the price sensitivity of some investors, including some in India and North America: Investors that had resisted buying into the rally to record high gold prices capitulated, and started buying. This helped propel prices higher last week.
Australia's gold output to rival China's FALLING US and South African gold production has pushed Australia back to the No 2 spot behind China in global annual output of the precious metal. Industry consultant Surbiton Associates' quarterly survey, released yesterday, states that Australia produced 112 tonnes of gold in the first half of this year. That compares with Chinese equivalent production of 147 tonnes in the same period, 105 tonnes from the US and 103 tonnes from South Africa. South Africa used to be the world leader but dropping underground grades and increasing mining costs have rendered many of the Witwatersrand deep deposits less economic.
Dubai melts gold The Dubai impact was visible on Friday on bullion market with the gold dropping the most since January in London. Prices of other precious metals, crude oil and all six main industrial metals on the London Metal Exchange declined. The market is reacting to the news on Dubai. Gold for immediate delivery dropped as much as $50.28, or 4.2 per cent, to $1,138.10 an ounce, the biggest intraday slide since January 12.
Dubai's Debt Reckoning How one bursting bubble could feed the next one. The credit problems of a unit of Dubai's state-owned investment company have given financial markets a scare, but put us down as thinking the event is left-over business from the mid-decade mania more than it is a sign of immediate new economic troubles. Like subprime mortgages and Citigroup's off-balance sheet "structured investment vehicles," Dubai's debt binge was made possible by the Federal Reserve's global subsidy for credit. As a Middle East outpost without oil wealth, the city-state used easy credit in an effort to build itself into the next Singapore. And it has made some impressive strides as a tolerant entrepot for traders and investors looking for an entry into the Arab world. Its openness to the world's money and people is certainly a better model for Middle East development than is Saudi Arabia.
Keiser on 'Tsunami alert': Dubai debt crisis awakes storm? Fresh fears over the size of Dubai's debt have sent shock waves through international markets, with major stocks and oil prices falling sharply. Dubai World, the country's largest conglomerate, wants to suspend payment on its sixty billion dollar debts until next May at the earliest. RT's financial contributor Max Keiser says the World is entering the Phase Two of the global economic crisis.
Dubai World Will Shake Confidence, Send Stocks ‘Limit Down’ Dubai’s stocks are poised to drop the most allowed by regulators on the first day of trading since the government said Dubai World, a state company with $59 billion of liabilities, may delay debt payments. The Dubai Financial Market opens today for the first time since the Nov. 25 announcement that caused stocks to tumble from Tokyo to New York and doubled the cost of protecting against the emirate reneging on debt obligations.
Dubai: Bling City is dead, but the desert dream lives on Dubai World's collapse alarmed investors and was a blow for a ruler who wanted to create an Arab city of global significance. But for all its faults it remains a rare oasis of Middle East moderation and progress A yachtsman friend of mine was sailing the blue waters of the Persian Gulf off the shimmering coast of Dubai recently when he came across a disturbing phenomenon: The World was dissolving before his eyes. It was not the grog. Three years ago, when Dubai's debt-fuelled boom was at its height, the emirate launched its most ambitious project yet – a gigantic offshore replica of the planet Earth, made from sand dredged from the deserts and beaches of Arabia, with countries and continents carved out among a man-made archipelago of 300 islands. It was called simply The World.
U.S. banks less exposed to Dubai than European rivals Derivative-based hedging, loan syndication clouds ultimate exposures U.S. banks are probably less exposed than European rivals to a potential debt default by Dubai World, but a lack of transparency and the interconnectedness of the modern financial system make it difficult to know which institutions are ultimately exposed, analysts said this week. Dubai said late Wednesday that it would restructure Dubai World, a sprawling conglomerate behind many of the largest construction projects in the Persian Gulf emirate.
Dubai: Floating on an Island of Debt Stock markets around the world cracked on Friday with the Dow Jones industrial average down more than 150 points (Fig. 1), and commodities plunging as Dubai debt woes unnerved investors, and sent tremors of uncertainty throughout all markets. The crisis flared after Dubai, a part of the United Arab Emirates (UAE) federation, asked to delay interest payment for six months on $60 billion of debt issued by the state-run conglomerate Dubai World and its main property unit Nakheel.
Can Dubai's energy reserves pay off its $80 billion in debt? The Dubai debt default seems to have inspired a bit of fear in the U.S. But is there any real reason for it? U.S. banks have minimal exposure to Dubai's debts -- most of the banks that would suffer if Dubai defaulted are located in the Middle East. Nevertheless, U.S. markets fell 1.7% Friday during a holiday-shortened trading day -- after futures suggested the market would be down 2.7%. But if Dubai's oil reserves exceed its debts, it could sell oil to repay them.
Dubai May Forfeit Status as Financial Hub to Get Abu Dhabi Help Dubai, the debt-laden Gulf city- state, may lose its status as the region’s financial hub in return for a rescue package from its oil-rich neighbor Abu Dhabi, economists and analysts said. The bailout will mean eliminating financially unviable parts of the competing, state-run companies which lie at the root of the city’s at least $80 billion debt, according to Dubai-based UBS AG analyst Saud Masud. Dubai may also have to revert to specializing in trade and services, and drop its drive to become a regional banking center, said Ian Hay Davison, former chairman of the Dubai Financial Services Authority.
U.A.E. Central Bank Eases Liquidity After Dubai World Delay The United Arab Emirates’ central bank eased liquidity for lenders and said it “stands behind” the country’s local and foreign banks as they face losses from Dubai World’s possible default. Markets from Asia to the U.S. fell last week after Dubai World on Nov. 25 announced that it was seeking to delay loan repayments. Dubai’s stock markets will trade on Monday for the first time since the news. Banks will be able to borrow money from the central bank for half a percentage point above the three-month local benchmark interest rate, the Abu Dhabi-based regulator said in an e-mailed statement today.
Most U.S. Stocks Retreat on Concern Dubai Will Default on Debt Most U.S. stocks fell this week as speculation Dubai will default on its debt spurred concern that the recovery in the global financial system will stall, overshadowing fewer American jobless claims and more home sales. Morgan Stanley, Bank of America Corp. and Goldman Sachs Group Inc. lost more than 3.4 percent. They helped send financial institutions to the biggest drop among 10 industries in the Standard & Poor’s 500 Index after Dubai World, the state- controlled company with $59 billion of liabilities, said it’s seeking to delay debt payments. Alcoa Inc. slumped 3.6 percent as the Reuters/Jefferies CRB Index of commodities fell for the fourth time in five weeks.
Friday, Nov 27, 2009 NYSE Invokes Rule 48 in Anticipation of "Extreme" Volatility The NYSE hedged its bets earlier by invoking the rarely used Rule 48, which "provides the exchange with the ability to suspend the requirement to disseminate price indications and obtain floor-official approval prior to the opening when extremely high market-wide volatility could cause delay opening securities on the exchange." The full disclosure was made on the NYSE blog: Rule 48 is intended to be invoked only in those situations where the potential for extreme market volatility would likely impair floor-wide operations at the exchange by impeding the fair and orderly opening of securities. Accordingly, the rule sets forth a number of factors to be considered before declaring such a condition, including:
Volatility during the previous day's trading session;
Trading in foreign markets before the open;
Substantial activity in the futures market before the open;
The volume of pre-opening indications of interest;
Evidence of pre-opening significant order imbalances across the market;
Government announcements;
News and corporate events; and,
Any such other market conditions that could impact floor-wide trading conditions.
NYSE Circuit Breakers Levels for fourth-quarter 2009 In response to the market breaks in October 1987 and October 1989 the New York Stock Exchange instituted circuit breakers to reduce volatility and promote investor confidence. By implementing a pause in trading, investors are given time to assimilate incoming information and the ability to make informed choices during periods of high market volatility.
Rule 80B Effective April 15, 1998 the SEC approved amendments to Rule 80B (Trading Halts Due to Extraordinary Market Volatility) which revised the halt provisions and the circuit-breaker levels. The trigger levels for a market-wide trading halt were set at 10%, 20% and 30% of the DJIA, calculated at the beginning of each calendar quarter, using the average closing value of the DJIA for the prior month, thereby establishing specific point values for the quarter. Each trigger value is rounded to the nearest 50 points.
Applying Economics to American History
RBS Led Dubai World Lenders; HSBC Most at Risk in UAE Royal Bank of Scotland Group Plc was the biggest underwriter of loans to Dubai World, the state company seeking to reschedule debt, while HSBC Holdings Plc has the most at risk in the United Arab Emirates, according to JPMorgan Chase & Co. RBS, the largest U.K. government-controlled bank, arranged $2.3 billion, or 17 percent, of Dubai World loans since January 2007, JPMorgan said in a report today, citing Dealogic data. HSBC, Europe’s biggest bank, has the “largest absolute exposure” in the U.A.E. with $17 billion of loans in 2008, JPMorgan said, citing the Emirates Banks Association. Abu Dhabi Commercial Bank PJSC may be owed $1.9 billion by Dubai World, making it the largest creditor outside the emirate, said two people familiar with the companies.
Dubai Shows Limits of Government Rescues, Roubini’s Das Says The worldwide decline in equities spurred by Dubai’s efforts to reschedule its debt is a sign that government spending alone won’t be enough to protect financial markets, according to Arnab Das of Roubini Global Economics. Stock volatility will probably jump as countries and companies default on loans, said Das, the head of market research and strategy at RGE, the advisory firm founded by economist Nouriel Roubini.
Dubai Means Emerging Markets ‘Correction’ to Mobius Dubai’s attempt to reschedule debt may spur a “correction” in emerging markets, according to Mark Mobius, while the global slump in equities shows government spending alone won’t protect financial markets, Arnab Das of Roubini Global Economics said. Mobius, who oversees about $25 billion of developing-nation assets as chairman of Templeton Asset Management Ltd., said a 20 percent drop for shares is “quite possible.” Stock volatility and risk aversion may jump as countries and companies default on loans, according to Das, the head of market research and strategy at RGE, the advisory firm founded by Nouriel Roubini.
Dubai is just a harbinger of things to come for sovereign debt Watch out. This may be just the beginning. In the scale of things, the debt problems of Dubai are little more than a flea bite. Dubai’s sovereign debts total “just” $80bn, which counts for nothing against the trillions being raised by advanced economies to plug fiscal deficits. Small wonder, though, that this minor tremor has sent such shock waves around the wider capital markets. The fear is that threatened default in this tiny desert kingdom is just a harginger of things to come for government debt markets as a whole. According to new estimates by Moody’s, the credit rating agency, the total stock of sovereign debt worldwide will have risen by nearly 50 per cent between 2007 and 2010 to $15.3 trillion. The great bulk of this increase comes not from irrelevant little states like Dubai, but from the big advanced economies – America, Europe, and Japan.
India Studying Impact of Dubai’s Debt Delay Plan India, the world’s top recipient of migrant remittances, is examining the effect Dubai’s attempt to delay debt repayments may have on Asia’s third-largest economy, central bank Governor Duvvuri Subbarao said. About 4.5 million Indians live and work in the Gulf region and remit more than $10 billion annually, according to government data. The turmoil may affect remittances, said Thomas Issac, finance minister of the southern state of Kerala, which accounted for about a quarter India’s migrant labor in 2005.
Dubai's Dirty Little Secret
Gold Futures Drop, Halting Nine-Session Rally, as Dollar Gains Gold futures dropped in New York as the dollar’s rebound damped demand for the precious metal as an alternative asset. The greenback climbed after Dubai’s efforts to reschedule its debt rattled investors. Silver, platinum and palladium also dropped today. Spot gold reached a record yesterday, while the dollar touched a 15-month low. “The market is reacting to the news on Dubai,” said Bernard Sin, the head of currency and metals trading at bullion refiner MKS Finance SA in Geneva. “A dollar bounce likely means gold will sell off. People are trying to take profit.”
Will Silver Shine Like Gold in 2010? Anyone remotely familiar with the financial markets knows that precious metals were the place to be in 2009. Gold has soared to all time highs on the back of spiraling U.S. deficit spending, a still unresolved portfolio of toxic assets, and a general investor fear of paper currency. Indeed, it would seem the current administration’s hope would be to inflate the country out of debt. And thus, despite government denials to the contrary, a weaker dollar seems to be the logical solution to exploding debt. Thus, as the U.S. dollar continues to decline, Gold and it’s less glamorous cousin Silver, have continued to appreciate in price.
Is Britain on the brink of financial armageddon? He's one of our top entrepreneurs who recently put all his investments into cash. The reason: He believes Britain faces bankruptcy. You may disagree with his bleak analysis but you can't afford NOT to read it A year ago, the world reacted with astonishment as Iceland technically went bust. It seemed inconceivable that a modern democratic nation could have such parlous finances that only an emergency $6billion bail-out from the International Monetary Fund enabled its economy to keep functioning. This week, we witnessed a similar crisis in the Middle East but on a far, far more dangerous scale, as Dubai effectively defaulted on £48billion of loans.
Euro, Australian Dollar Rise After U.A.E. Backs Dubai’s Banks The euro and the Australian dollar rose against the greenback and the yen after the United Arab Emirates’ central bank said it “stands behind” the country’s banks, easing concerns about a possible default by Dubai World. The U.S. dollar climbed against the yen for the first time in five days as a report showed retail sales on Black Friday and the weekend after Thanksgiving advanced 0.5 percent from a year earlier. The U.S. currency dropped 2.7 percent last week against the yen, the biggest weekly decline since the period to Aug. 14, as stock markets slumped after state-owned Dubai World sought to delay payments on debt. “The market is willing to assume that there will be no actual default in Dubai,” said Sean Callow, a strategist at Westpac Banking Corp. in Sydney. “We’re likely to get back to what everybody is most comfortable with, which is selling U.S. dollars.”
Bundesbank fears relapse as German banks face €90bn fresh losses The Bundesbank has told German banks to take advantage of renewed confidence while they can to prepare for likely losses of €90bn (£81bn) over the next year, warning that the delayed shock waves of the economic crisis still pose a major threat to global recovery and bank finance. The venerable bank said in its Stability Report that the world had narrowly averted a "virtually uncontrollable" collapse in the late summer of 2008. While the credit system has partly stabilised, the underlying problems "are still far from being overcome" and money markets are not yet functioning properly.
We must get ready for a weak-dollar world The two most significant structural consequences of the recent financial debacle are the massive deficits and debts of the US and the shift of economic power from west to east. There is only one effective way for governments to address the combined impact of both: press for a sea change in currency relationships, especially a permanently and greatly weakened dollar.
Which of the "Rich Four" Countries Will Default First? Volume in the credit default swap market for rich countries has soared and so have credit spreads, according to a recent Financial Times story, while volume in emerging markets CDS has stagnated. In other words, traders are betting against the governments with high budget deficits, like Britain and the United States, as well as against those with high debt levels, like Japan and Italy. So is there really a substantial chance of a big rich-country default, and what would it look like if it happened? It's not obvious which of the "Rich Four" countries would go first. Japan, for instance, has the highest debt. But Japanese consumers are such great savers that they essentially owe almost all of the debt to themselves.
Chinese credit tightening chills Asian markets China has stepped up efforts to halt the explosive growth in credit, ordering the country's five top banks to raise capital over coming weeks or face lending sanctions. The move amounts to monetary tightening in China's state-run banking system. The news triggered a sell-off on Asian stock markets and raised broader concerns about the strength of the global rally. The Shenzen index fell by 4.5pc on Wednesday. "For practical purposes, the recovery in risk assets since last winter is now over," said Charles Dumas, of Lombard Street Research. The China Banking Regulatory Commission reminded banks that they must set aside money to meet a capital adequacy ratio of 10pc and to cover 150pc of bad loans. New loans rose $1.3 trillion (£785m) in the first nine months of this year as Beijing mobilised banks as the main instrument of emergency stimulus.
IMF chief Dominique Strauss-Kahn says world needs stronger Chinese currencyDominique Strauss-Kahn, head of the International Monetary Fund, added to pressure on Beijing to let its currency rise, saying a stronger yuan and more Chinese consumer spending are needed to ease global economic imbalances and assure growth. His comments came as President Barack Obama began a visit to China amid strains over trade and currency. US manufacturers complain that Beijing gives its exporters an unfair price advantage by keeping the yuan undervalued, but Obama is expected to go easy on the issue. "A stronger currency is part of the package of necessary reforms," Mr Strauss-Kahn said in a speech at a finance conference in Beijing. He said China has started to make important reforms needed to raise domestic demand, such as increase spending on health care and pensions to free families to spend more on consumer goods.
Garlic Price Rises Surpass Gold, Stocks in China The price of garlic in China has nearly quadrupled since March, propelled by its very pungency to rank ahead of gold and stocks as the country's best-performing asset this year. The trigger for the bull run may have been the idea that the potent bulb can ward off H1N1 swine flu, Morgan Stanley economists said. That chimes with some anecdotal evidence. The China Daily reported last week that a high school in Hangzhou, a prosperous city in eastern China, had bought 200 kg of garlic and forced students to eat it every day for lunch to stay healthy.
Half of Banks' Losses May Still Be Hidden: IMF Head Half of the losses suffered by banks could still be hidden in their balance sheets, more so in Europe than in the United States, the International Monetary Fund's chief, Dominique Strauss-Kahn, was quoted as saying on Tuesday. In an interview with French newspaper Le Figaro, Strauss-Kahn also said the IMF thought the euro currency was probably a bit too strong. "There are still some important losses that have not been unveiled," Strauss-Kahn was quoted as saying in response to a question on banks, according to excerpts of the interview that were sent to media ahead of publication on Wednesday.
Whose side is Obama on? There is much to be thankful for this holiday, including the fact that we live in a country that has been remarkably good-natured, generous and pragmatic in the face of a nasty economic crisis. The rates of unemployment and under-employment have already hit a combined 17 percent. Household wealth has been significantly diminished. Reluctantly, we agreed to take on more public debt to finance a massive bailout of a financial sector that badly let us down. We stepped up our household savings and embraced the new frugality. What really sticks in our craw, however, is that while most of the country is hunkered down, Wall Street continues to feast on a bounty of trading profits. You'd expect that a new liberal Democratic president would find a way to give voice to this populist outrage and constructively channel this public anger. But too often, the response from the administration has been to try to convince us that there's little we can do, or should do, to ensure that the economic harvest is more equitably distributed. Now, the White House and congressional leaders find themselves scrambling to get ahead of a growing political backlash that threatens to upend their carefully calibrated agenda, not to mention their political fortunes.
Audit the Fed: Bernanke and the Bankers Are Running Scared Bernanke penned his tribute to central banking and globalism prior to his scheduled testimony before a Senate panel on his renomination to serve a second four-year term as Fed mob boss. Bankster tool Barney Frank, chairman of the House Financial Services Committee, tried to derail an effort to audit the Fed but failed. A proposal to audit the Fed's monetary policy deliberations won a committee vote recently over Frank's objections. In his Mockingbird media editorial, Bernanke "conceded the Fed had missed some of the riskiest behavior in the lead up to the crisis. But he said the Fed had helped avoid an even more damaging economic meltdown and has stepped up its policing of the financial system."
Fed rage boils over on Capitol Hill Fed chief Ben Bernanke is expected to win confirmation to a second term. But it won't be pretty. The push in Congress to rein in the central bank is gaining steam. Federal Reserve Chairman Ben Bernanke has a tough road ahead. Very tough. Bernanke, whose four-year term expires in January, is certain to face a contentious Senate banking panel at his confirmation hearing on Thursday. He is also defending against the sharpest attack on Federal Reserve powers ever. In an opinion piece to be published in Sunday's Washington Post, Bernanke blasted two moves to limit the Fed - a House measure to dig into the central bank's books and a Senate bill that would strip the Fed of its regulatory power.
Bernie Sanders: Bernanke Won't Get My Vote For Second Term (VIDEO) Sen. Bernie Sanders (I-Vt.) said Sunday that Fed Chairman Ben Bernanke would not get his vote for another five-year term. "I absolutely will not vote for Mr. Bernanke," the Vermont senator said on ABC's "This Week." "He's part of the problem. If he's the smartest guy in the world, why didn't he do anything to prevent us from sinking into this disaster that Wall Street caused and which he was a part of? No, I will not vote for Bernanke to stay on as chairman."
Bernanke Defends the Fed’s Independence This mornings must read work is an article in the Sunday Washington Post by none other than Ben Bernanke, titled The right reform for the Fed. It is a rational pushback against the like of Ron Paul and Chris Dodd’s programs to either hamstring or completely get rid of the Federal Reserve. As I have previously noted, being the only country with out a Central Bank would be like unilateral nuclear disarmament. Its a nice theory, but you will eventually be destroyed by your enemies.
Bernanke: Dodd, Paul Bills Would Hurt Economy Federal Reserve Chairman Ben Bernanke counterpunched against congressional critics, warning in a Washington Post opinion column that Capitol Hill efforts to audit the central bank and curtail its regulatory powers could be dangerous for the economy and fragile financial system. The House Financial Services committee earlier this month passed a controversial provision sponsored by Rep. Ron Paul (R., Tex.) that would subject the Fed to tougher scrutiny by the Government Accountability Office, an arm of Congress. Meanwhile, Senate Banking Committee Chairman Christopher Dodd (D., Conn.) has proposed a financial services reform package that would strip the Fed of most of its power to supervise banks.
As Bank Failures Grow, FDIC Options Narrow The Federal Deposit Insurance Corp. (FDIC) will likely have tap its credit line with the U.S. Treasury or impose more special premiums on banks, to ensure U.S. banks are fully supported. While FDIC-insured banks reported a net income of $2.8 billion in the third quarter, bank lending fell by 2.8%, the most since records were first kept in 1984 and the fifth consecutive quarter loan balances declined. The FDIC's Deposit Insurance Fund (DIF) went into the red at the end of September and the bank insurer today (Tuesday) revealed just how steep the loss it was when the quarter ended: $8.2 billion.
Economy still too weak to create jobs Friday's report should show 100,000 lost jobs in November, survey says The U.S. economy is slowly recovering, but it's still not strong enough to create any net jobs, economists said ahead of a busy week for economic news. The biggest report of the week will come on Friday morning with the Labor Department's estimate of November's employment situation. Economists surveyed by MarketWatch expect a 23rd consecutive month of job losses, with nonfarm payrolls forecast to fall by 100,000 after a 190,000 decline in October.
The Forgotten Depression of 1920 It is a cliché that if we do not study the past we are condemned to repeat it. Almost equally certain, however, is that if there are lessons to be learned from an historical episode, the political class will draw all the wrong ones — and often deliberately so. Far from viewing the past as a potential source of wisdom and insight, political regimes have a habit of employing history as an ideological weapon, to be distorted and manipulated in the service of present-day ambitions. That's what Winston Churchill meant when he described the history of the Soviet Union as "unpredictable."
Just In Time for Holidays: More Gloom and Doom on Economy Just in time for the holidays: More gloom and doom from a well-known economist. David Rosenberg, who used to be Merrill Lynch's chief economist and now works for Gluskin Sheff of Canada, told CNBC Tuesday that the US economy is mired in an economic crisis that shows only scant signs of abating. "We're in a form of Depression," Rosenberg said in a live interview. "Depressions...typically happen after a prolonged period of credit excess morphs into a collapse and you get asset deflation. We had asset deflation and we had a contraction in private-sector credit."
Thanksgiving Weekend Sales Rise 0.5%, Driven by Deals U.S. retail sales on Black Friday and the weekend after Thanksgiving advanced 0.5 percent as discounts on electronics and toys drew budget-conscious crowds, according to the National Retail Federation. Spending rose to $41.2 billion from $41 billion a year earlier, the Washington-based trade group said in a statement today, citing a survey conducted by polling firm BIGresearch. NRF said it is sticking to a forecast for spending to fall 1 percent this season. While more people visited stores and Web sites, the average shopper spent $343.31, less than $372.57 a year ago, the retail federation said.
Black Friday sales barely up CHICAGO - IN A worrisome sign for US retailers, data released on Saturday showed that sales rose a scant 0.5 per cent on the traditional kickoff to the holiday shopping season despite early signs of a strong showing. A focus on bargains pulled US shoppers into stores and onto websites over the Thanksgiving holiday weekend, but many said they would stick to their budgets and avoid purchases if they could not find a good deal. Those trends appeared to play out in the results issued by ShopperTrak, which measures customer traffic in stores.
U.S. sitting on $17 billion in unclaimed war bonds MANY REQUESTS FOR REPAYMENT Matching claimants to certificates a mighty task The seemingly endless stacks of filing cabinets inside a West Virginia warehouse could hold the answer to an unsolved mystery: Who owns nearly $17 billion in lost government bonds? The unclaimed treasure represents the amount of U.S. bonds that have matured but not been redeemed. Many of these outstanding bonds date to World War II, but over the years the certificates were forgotten in cellars, lost in fires or tossed out in the trash. Unless they are found, the U.S. government can keep the loans, interest free. In the wake of publicity surrounding a lawsuit on the missing bonds earlier this fall, the government has been deluged with requests from people wondering whether they are entitled to repayment.
At last, Christians draw a line in the sand against their PC secularist persecutors At long last, Christian leaders have faced up to their persecutors in the secularist, socialist, One-World, PC, UN-promoted axis of evil and said: No more. In the popular metaphor, they have drawn a line in the sand. For harassed, demoralised faithful in the pews it will come as the long-awaited call to resistance and an earnest that their leaders are no longer willing to lie down supinely to be run over by the anti-Christian juggernaut. This statement of principle and intent is called The Manhattan Declaration, published last Friday in Washington DC. . . . The Manhattan Declaration states that "the lives of the unborn, the disabled, and the elderly are severely threatened; that the institution of marriage, already buffeted by promiscuity, infidelity and divorce, is in jeopardy of being redefined to accommodate fashionable ideologies; that freedom of religion and the rights of conscience are gravely jeopardized by those who would use the instruments of coercion to compel persons of faith to compromise their deepest convictions". For Barack Obama, the PC lobby, the "hate crime" fascists and, by implication, their opposite numbers in Britain, the signatories have an uncompromising message: "We pledge to each other, and to our fellow believers, that no power on earth, be it cultural or political, will intimidate us into silence or acquiescence." That is plain speaking, in the face of anti-Christian aggression by governments. The signatories spelled it out even more unequivocally: "We will fully and ungrudgingly render to Caesar what is Caesar's, but we will under no circumstances render to Caesar what is God's."
Food banks nationwide report more first timers Prentice Jones worked construction jobs around Chicago for most of his 60 years and is quick to boast of a foreman job he once held at a revamped city college and 23 years at a steel company. But these days, work has been so scarce that the man with a penchant for cowboy hats has been forced to move in with his mother and do something this week he never expected — visit a food pantry. "There's no work now," Jones said while waiting in line at St. Columbanus Parish for a frozen turkey and bags of apples, bread and potatoes. "I pray it's temporary."
From the Hospital to Bankruptcy Court NASHVILLE - Some of the debtors sitting forlornly in this city's old stone bankruptcy court have lost a job or gotten divorced. Others have been summoned to face their creditors because they spent mindlessly beyond their means. But all too often these days, they are there merely because they, or their children, got sick. Wes and Katie Covington, from Smyrna, Tenn., were already in debt from a round of fertility treatments when complications with her pregnancy and surgery on his knee left them with unmanageable bills. For Christine L. Phillips of Nashville, it was a $10,000 trip to the emergency room after a car wreck, on the heels of costly operations to remove a cyst and repair a damaged nerve. Jodie and Charlie Mullins of Dickson, Tenn., were making ends meet on his patrolman's salary until she developed debilitating back pain that required spinal surgery and forced her to quit nursing school. As with many medical bankruptcies, they had health insurance but their policy had a $3,000 deductible and, to their surprise, covered only 80 percent of their costs.
Democrats expect healthcare overhaul to pass Leading Democrats on Sunday said they expect Congress to pass a major healthcare reform backed by President Barack Obama, but supporters may have to accept legislation that falls short on some issues. The U.S. Senate on Monday is set to begin debate on the sweeping overhaul of the $2.5 trillion U.S. healthcare system amid growing concerns about the cost of the legislation that aims to provide medical coverage for millions of the uninsured.
11/25/09 (1/2) Ron Paul on Montel Williams Radio Show
11/25/09 (2/2) Ron Paul on Montel Williams Radio Show
We Pay Them to Lie to Us The problem with politicians When you knowingly pay someone to lie to you, we call the deceiver an illusionist or a magician. When you unwittingly pay someone to do the same thing, I call him a politician. President Obama insists that health care "reform" not "add a dime" to the budget deficit, which daily grows to ever more frightening levels. So the House-passed bill and the one the Senate now deliberates both claim to cost less than $900 billion. Somehow "$900 billion over 10 years" has been decreed to be a magical figure that will not increase the deficit.
Professors: More homeowners should walk away from loans More homeowners should walk away from their underwater mortgages. That is the conclusion of a University of Arizona law professor who says many distressed borrowers are sticking with their loans because of societal expectations, while banks are focused on profits rather than societal good. UA law professor Brent White writes in a new report that the government and banks pressure homeowners to stick with their underwater mortgages, but lenders are not abiding by the same rules. White said most homeowners don't abandon their homes despite owing more than they are worth because it is perceived as failure and would hurt their credit scores.
Obama to push banks on mortgages Administration plan aims to address emerging problem: Only a handful of homeowners are receiving permanent loan modifications. As foreclosure casualties mount, the Obama administration is expected to announce additional steps on Monday to get long-term help for troubled borrowers. Under the new initiative, the government will provide more resources for borrowers and will partner with organizations to offer homeowners assistance, a Treasury Department spokeswoman said. The plan also calls for increased transparency and accountability on the part of loan servicers. The administration's move is its latest attempt to jumpstart its $75 billion loan modification plan, which many fear will fall far short of its goal to help up to 4 million delinquent homeowners.
Bankruptcies spike 33% Number of bankruptcy filings in third quarter of 2009 soars to highest level since 2005. Business bankruptcies filed this year top 2008 total. The total number of bankruptcies filed in the third quarter surged 33% in 2009 and is at the highest level since 2005, according to data released Wednesday. The American Bankruptcy Institute, an industry research firm, said 388,485 bankruptcies were filed during the last quarter, compared to 292,291 filed during the same period in 2008, according to data released by the Administrative Office of the U.S. Courts.
****** Could this become a trend? *******
Judge Erases Couple's $525,000 Mortgage Payment A Long Island, NY, judge cancelled $525,000 in mortgage payments being demanded by California bank OneWest and its IndyMac mortgage division, criticizing its "harsh, repugnant, shocking and repulsive" behavior, the New York Post reported Wednesday. The ruling, which was delivered last Thursday, eliminated $291,000 in principal and $235,000 in interest and penalties on Diane Yano-Horoski and husband Greg Horoski's ranch home. According to court records, the couple refinanced their home in 2004, paying off the original mortgage with the help of a $292,500 subprime loan, the Post said. It had an adjustable interest rate of 10.375 percent, which rose above 12 percent.
Property Owners Get Dunked On Another victory for the powerful over property rights. New York judges served up what basketball fans call a facial on Tuesday, when an appellate court ruled that the state may seize homes and small businesses in Brooklyn for the benefit of a private developer and the New Jersey Nets. The decision represents a backward step for the effort to protect property rights at the state level since the Supreme Court's 2005 decision in Kelo v. New London. The case, Goldstein v. New York State Urban Development Corporation, dealt with plans by developer Forest City Ratner to build a new arena for the Nets as well as snazzy apartments and offices on land currently occupied by homes and businesses. To make way for the sports complex, the state declared the property "blighted" and used its power of eminent domain to hand it to the developer.
Iran Approves Plans for 10 Uranium Enrichment Sites Iran announced a major expansion of its nuclear program on Sunday and threatened to pull out of the Non-Proliferation Treaty, a move that could dramatically escalate the country's standoff with the international community. President Mahmoud Ahmadinejad revealed in a cabinet meeting on Sunday plans to build 10 more nuclear facilities for enriching uranium, according to Iran's official news agency IRNA. The facilities would eventually produce enough nuclear fuel to meet the country's demand for 20,000 megawatts of nuclear energy by 2020.
A Defiant Iran Details Plan for 10 Enrichment Plants Iran warned Sunday that it would reduce its cooperation with United Nation’s nuclear agency and in a gesture of defiance it ordered the construction of 10 new uranium enrichment plants. Iran’s warning and its announcement for building new plants appeared to be its first reaction to the demand by the United Nations nuclear watchdog demand on Friday to immediately suspend enrichment activities at a newly disclosed site called Fordow, near the city of Qum. Iran had told the agency that it planned to complete the half-built plant, which is tunneled into the side of mountain, by 2011.
Rigging a Climate 'Consensus' About those emails and 'peer revie The climatologists at the center of the leaked email and document scandal have taken the line that it is all much ado about nothing. Yes, the wording of their messages was unfortunate, but they insist this in no way undermines the underlying science. They're ignoring the damage they've done to public confidence in the arbiters of climate science. "What they've done is search through stolen personal emails—confidential between colleagues who often speak in a language they understand and is often foreign to the outside world," Penn State's Michael Mann told Reuters Wednesday. Mr. Mann added that this has made "something innocent into something nefarious."
Commonwealth Calls for Binding Climate Agreement Leaders of the Commonwealth countries called Saturday for a legally binding international agreement on climate change and a global fund with billions of dollars to help poor countries meet its mandates. The 53-nation meeting was the largest gathering of international leaders before next month's global climate summit in Copenhagen. The leaders said a deal should be adopted no later than next year and the support money should be available simultaneously, providing up to $10 billion a year starting in 2012.
Obama faces hard sell on Afghan decision President Obama will attempt to persuade the American public this week that more time, troops and money will accomplish what eight years of effort and every outside power in history have failed to achieve - a measure of military success in Afghanistan. The details and justification for Mr. Obama's new war policy will be the focus of a major address at the U.S. Military Academy at West Point, N.Y., on Tuesday.
Obama to announce Afghan troops plan Barack Obama is seeking to win over his own Democratic party as he prepares to announce a troop increase in Afghanistan in perhaps the biggest decision of his presidency to date. In a speech to cadets and officers at the West Point academy on Tuesday evening, Mr Obama is due to authorise the dispatch of a brigade of 9,000 or more marines to the south of Afghanistan, as well as announcing the deployment of accompanying army brigades. The president will have to overcome considerable suspicions within the ranks of his own party about the new course, which could affect his re-election hopes as well as America’s standing in the world.
Pakistan must do more to tackle Al Qaeda and 'take out' Osama Bin Laden, says Brown Report for Senate reveals Bin Laden was within grasp of U.S.but chiefs ordered military not to swoop Gordon Brown sent a tough challenge to Pakistan today to step up action against the Al Qaeda and 'take out' its leaders Osama bin Laden and Ayman Zawahiri. The Prime Minister made little attempt to hide his frustration at Pakistan's failure, eight years after the September 11 attacks in the USA, to track down the men responsible, who are believed to be hiding out in the north of the country.
Trouble afoot for high priests [of global warming] Can this marriage be saved? The union of junk scientists, on the prowl for government handouts to pay for their computer games, and eager politicians sniffing an enormous new source of tax revenue was a match made in a dark alley. The always gullible mainstream media was the guest at the wedding, and everybody won. Only the public was duped. The global warming scam is in trouble because neither the globe nor the thermometer will cooperate. Congress is trying to decide whether to believe its own eyes or the hustlers who have been forced to change the name of the scam - we're supposed to call it "climate change" now. The marketing men hired by Al Gore to "re-brand" the scam looked for inspiration to the country philosopher who observed that "if you've got one foot in the fire and the other foot in a bucket of ice, on average you're warm." The term "climate change" strikes a fraudulent average that can be applied to ice storms, heat waves, hurricanes and floods. Since the climate changes constantly, the new "brand" ought to last awhile.
Obama Will Go to Copenhagen President Obama will travel to Copenhagen next month for the United Nations meeting on climate change, a White House official confirmed Wednesday. Mr. Obama, who had previously not committed to making an appearance at the summit, will deliver a speech on Dec. 9 en route to Oslo, Norway, where he will accept the Nobel Peace Prize on Dec. 10. Mr. Obama had been under considerable pressure from other world leaders and environmental advocates to make the trip as a statement of American commitment to the climate change negotiations. The talks, involving more than 190 nations, are expected to produce a wide-ranging interim political declaration but stop short of proposing a binding international treaty. Delegates are expected to commit to completing the treaty next year.
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Fri 11.27.2009
The FDIC Is Way Beyond Broke The Federal Deposit Insurance Corporation announced this week that the insurance fund that covers more than 4.5 trillion dollars in deposits was not only depleted but has a negative balance of $8.2 billion according to the Wall Street Journal. The FDIC is now an insurance fund with no money of its own. The FDIC says it still has 23.3 billion to cover failing banks. It also has a $500 billion line of credit at the U.S. Treasury. FDIC Chairman Sheila Bair said in early September, “…We can tap up to $500 billion in a line of credit if we needed to, I can’t imagine that would ever be necessary…” Well, now it may be necessary because The FDIC said this week that 552 financial institutions were on the government’s problem list at the end of September. That’s 137 more “problem” banks added to the list in just three months. These banks have combined assets of $345.9 billion. The “problem list” will surely get longer as we go into 2010! Some experts say the real “problem list” of bad banks is more than 1000. Chairman Bair surely knew she would have to use the $500 billion line of credit when she asked for it from Congress. While we’re on the topic of bank losses, the head if the IMF, Dominique Strauss-Kahn, said this week, “It’s possible that 50 percent are still hidden in their balance sheets…” We don’t even really know how bad this will get, but it will get very bad!
Lending Declines as Bank Jitters Persist U.S. lenders saw loans fall by the largest amount since the government began tracking such data, suggesting that nervousness among banks continues to hamper economic recovery. Total loan balances fell by $210.4 billion, or 3%, in the third quarter, the biggest decline since data collection began in 1984, according to a report released Tuesday by the Federal Deposit Insurance Corp. The FDIC also said its fund to backstop deposits fell into negative territory for just the second time in its history, pushed down by a wave of bank failures.
Alan Blinder vs. Peter Schiff: When Will the Dollar Lose Its Reserve Status? The almighty dollar ain't what it used to be. The decline of the dollar was one of the topics of debate Sunday night when St. Louis Fed President Jim Bullard and former Federal Reserve Vice Chairman Alan Blinder faced off against longtime gold bug and dollar bear Peter Schiff at a panel hosted by Princeton's Business Today. Bullard, who doesn't often discuss the dollar, does have hope for the greenback. When the world was in full panic mode last year, Bullard notes the dollar actually gained value in a "flight to safety" trade, even though the Fed was flooding the market with supply.
Option ARMs: Housing recovery killer? An explosion of foreclosures will result from option ARMs set to reset to higher payments. Option-ARMs: File under, "It sounded good at the time." These exotic mortgages allowed homebuyers to come to closing with little cash and choose, monthly, how much to pay: interest and principal, interest only, or a minimum amount less than the interest due. Of course, the last option is the one 93% of option-ARM buyers selected, according to a new report released this week by Standard & Poors. But eventually, everyone has to pay the piper.
Hedge Funds May Account for 40% of Bank Capital Hedge funds provided as much as 40 percent of the money raised this year by U.S. and European banks as they sought to offset losses and meet government capital requirements, according to Morgan Stanley. Financial firms have raised about $200 billion from common stock and rights offerings so far this year, data compiled by Bloomberg show. Financial companies around the world have taken more than $1.7 trillion in writedowns and credit losses since the crisis began in mid-2007.
House of cards: Home prices may be headed back down Everyone heaved a sigh of relief as the latest S&P/Case Shiller U.S. National Home Price survey showed a price increase for the fifth straight month. Home prices may finally have hit bottom, but Dean Baker of the Center for Economic Policy is not so sure. In his weekly Housing Market Monitor, he says he thinks the boost may only be temporary, driven by the first-time homebuyers tax credit. "Sales are clearly headed sharply lower in the months ahead," Baker warns in his Wednesday report. "The extension and expansion of the first-time buyers credit will have a positive impact, but it will not be sufficient to prevent a downturn." John Silvia, chief economist of Wells Fargo (WFC) agrees. He told the The New York Times that he forecasts a new decline in prices of as much as 10%.
Crunch Time for the Cartel...Who Wins the Great War? Just over a year ago, the United States underwent a seemingly radical change, seemingly overnight. Its financial system had been revealed as insolvent under the weight of huge liabilities and worthless assets. The government refused to allow all the bankrupt institutions to fail, and thus permit the market to do its job of purging the rot from the system. Instead, the authorities saved their favorites, effectively merging bank with state. They did so under cover of a witches’ brew of subsidies, guarantees and quasi-nationalizations bearing bizarre acronyms like TARP; PDCF; TAF; TSLF; and my personal favorite, the ABCPMMFLF, otherwise known as the Asset-Backed Commercial Paper Money Market Fund Liquidity Facility.
Gold approaching $1200 on high physical demand With gold trading at new highs in the mid- $1190s overnight before falling back a little, Asian buying has pushed the metal price close to the key $1200 level. Gold hit a record high above $1,192 on Thursday as the dollar stumbled further and sentiment remained solid on expectations of more central bank buying of bullion. The dollar extended losses on Thursday, falling to its lowest in 14 years against the yen and hitting a fresh 15-month low against a basket of six major currencies. Gold prices have risen about 15 percent since the beginning of November, with demand fuelled by expectations of further reserve diversification, prospects for a sickly U.S. currency and fears about inflation in 2010.
Big Players Get Physical with Gold Over past years, we at Euro Pacific have taken an increasingly jaundiced view of paper currencies and written repeatedly about gold as an alternative. Along the way, we have urged investors to consider both the security and physical accessibility of their gold investments, and have advocated for at least some holdings to be in physical form. There are those who may have felt our views were overly cautious, even alarmist. Now, however, it is increasingly clear that major investors, including even central banks, are following our advice. Meanwhile, we continue to set the curve by calling for an even greater share of investors' portfolios to be in physical bullion or secure equivalents.
"Ben Bernanke Has Never Gotten Anything Right," Peter Schiff Says: Fed Officials Respond Putting Peter Schiff on a panel with St. Louis Fed President James Bullard and former Fed Vice Chair Alan Blinder is asking for trouble or, at the very least, a heated debate. That's just what occurred last Sunday night in New York at an event sponsored by Princeton's Business Today. Predictably, Euro Pacific Capital's Schiff disagreed with Bullard and Blinder on just about everything, including the government's role in causing the crisis, and the outlook for the economy and the dollar.
Gold: Words Are Not Enough On that day, Senator Obama voted against raising the national debt limit. Today the current limit at $12.1 trillion must be increased due to President Obama's spending policies that increased the debt of the United States to the same size of its gross domestic product. The buck stops where? Inflation Is Back For some time now, the economic community has declared that inflation is dead and its absence gives the US authorities the leeway to push liquidity into the system. Many believe that the lack of inflation is just the excuse for the Fed and other central banks to keep printing money.
Gold will Reach Mind-boggling Levels - for Good Reason! We are staring at a nascent but potentially and probably startling increase in the price of gold and precious metals mining stocks and warrants. Gold will reach mind-boggling levels because the actions of our political leaders and their academic and credentialed enablers are virtually guaranteeing it with their current actions.
Gold Coin Shortage Don't worry, there's not a shortage of gold, just of equipment for coining it in the U.S. The United States Mint has a gold problem. As demand for precious metal in the futures indexes and in physical gold bullion coins increases as the dollar weakens, there's been a run on the Mint. Don't worry, there's no shortage of gold. It's just that the Mint doesn't have the resources to make it into coins due to outsourcing and budget cuts decades ago.
Gold-Coin Sales Halted by U.S. Mint, Citing Low Inventory Level The U.S. Mint has suspended sales of most American Eagle coins made from precious metals including gold and silver, citing depleted inventories of the metals after sales surged 88 percent in the first 10 months of this year. Sales will resume “once sufficient inventories of gold- bullion blanks can be acquired to meet market demand,” the mint said in a statement posted on its Web site. Gold coins affected by the suspension include the American Eagle. The uncirculated versions of the 2009 coins won’t be resumed, the mint said.
Gold, Freedom, and the Federal Reserve With the possible exception of the Internal Revenue Service, the federal agency that is the greatest threat to the financial well-being and freedom of the American people is the Federal Reserve. This is the agency that has the power to wipe you out. It can destroy all your savings and the value of your income. Worst of all, it can do all this secretly and surreptitiously. I would assume that most of you are not independently wealthy. You work for a living. You bring home a paycheck. You try to make ends meet. You try to save a portion of your income, perhaps to help pay for your children’s education, to provide for a rainy day, or for your later years in life. But if you’re like most Americans today, you’re having a difficult time making ends meet. Moreover, not only are you not saving a large portion of your income, you’re likely not saving anything at all. You’re just getting by. The reason for this is the Federal Reserve, in conjunction with the Internal Revenue Service.
Is the World Ready for this Gold Rally? Meanwhile, in yesterday's market action...the big thing that happened was the same thing that seems to happen every day lately. Gold hit a new record high. It rose almost $18 to close at $1,164. Now, the question we must ask ourselves is an old one: is this the final, blow-out phase of the gold bull market that began 10 years ago? Or is it a trap...intended to catch the Johnny-come-latelies in the gold market? Of course, we don't know any more than any other human being knows. But we've been watching Mr. Market for a long time. And we've come to the conclusion that he's an SOB. Trouble is, you never know exactly what kind of an SOB he's going to be.
Why investors are piling into gold First and foremost, money is flowing into gold as investors seek to protect themselves from USD currency risk. Looking at daily gold spot returns and decomposing them into factors, we find that USD depreciation and currency risk have been important contributors to higher gold prices. Secondly, our analysis also suggests that changes in gold prices have been leading indicators of changes in 5Y break even inflation rates and in the USD yield curve slope (10Y-2Y) since April, suggesting that gold is really moving ahead of inflation expectations.
Gold Is Rallying Because.... Gold is the ultimate currency. It resists the attempts by the monetary authorities to debase it, because except for concerted attempts to suppress its price through non-profitseeking selling at key market points by central banks, and naked short selling by the global commercial banks in the paper markets, gold cannot be created and controlled by financial engineers like Ben Bernanke. It provides a refuge, a store of wealth for private citizens during a period of general currency risk.
Does the U.S. Have A Secret Gold Stash? If this phantom gold is there it will have to be leaked into the market very slowly and cautiously. It will never influence the price. I think the real issue is that the US has far less gold than they let on or account for. GATA has been pounding the table over this for the last decade. I have yet to refute or see anyone refute their evidence. Nobody will debate them because they are right, and backed by real evidence. . . . . . . . . I’ll also briefly mention the work done by Rob Kirby lately on possible tungsten filled gold bars. Whether this is true and comes to light is a different story all together but the fact is that gold supply is diminishing and will continue to while investor appetite is growing and scams and schemes will come to light. If tungsten filled bars are indeed circulating it says that the real gold supply is much smaller than I believe. It also says those who hold gold are going to great lengths to keep it by gutting then refilling the gold bars. Or they simply don’t have all the gold claimed and have to cover tungsten with their gold for as long as they can get away with it. If true and publicized gold will soar hundreds of dollars overnight. Gold and silver are going much higher. Get it while you can.
Gold hits record high as dollar sets new lows Gold hit a record high above $1,194 on Thursday as the dollar index fell to its lowest in 15 months, raising hopes that central banks would jump in to buy more bullion in their effort to hedge against a falling currency. The rise took gold price gains to around 15 percent since the beginning of November, with demand fuelled by expectations of further reserve diversification and fears about inflation in 2010. "Everybody is bullish on gold, and everybody is looking at the signal central banks are sending," said Dick Poon, manager of precious metals at Heraeus in Hong Kong.
Gold price strength not a bubble Gold ended last week in New York on a powerful note - rising even in the face of a stronger U.S. dollar. Continuing its upward tear Monday, gold registered yet another historic high near $1,175 ( and has continued to rise since then reaching the mid-$1190s Thursday). So far this year, the yellow metal is up over 35 percent. Looking back over the past few weeks, it is apparent that the tipping point for gold was news that India's central bank had acquired 200 tonnes of IMF gold.
Gold Versus the State It really is a war of this proportion. It really is the Gold holder versus "The State" when there is a paper fiat currency system in place. The U.S. Mint has suspended American Gold Eagle coin production AGAIN, citing rising demand.
Gold hits US$1,190 as more central banks buy Gold prices hit record highs above US$1,190 an ounce Wednesday as the dollar fell sharply and the market expected central banks from emerging economies to keep buying bullion from the International Monetary Fund. Gold prices have risen nearly 15% since the beginning of November, on a combination of central bank interest to diversify into the metal, a steadily falling U.S. dollar and inflation worries.
Miners: We're Running Out of Gold Gold production will continue to fall, despite a brief boost in 2009 and soaring prices, as deposits are exhausted and new discoveries remain elusive, say miners. In terms of production, "2009 is the outlier as far as the trend," Omar Jabara, spokesman for US-based Newmont Mining, the second-largest gold producer in the world, told AFP. Overall, "it's a fact that gold production from mines has been in decline since 2001 and has gone roughly from 85 million ounces to about 75 million ounces a year," said Vincent Borg, spokesman for number one producer Barrick Gold.
South African mines run out of gold Even as the investors across the globe are rushing to buy gold fearing a big fall of dollar, miners in South Africa said the production in gold mines will come down drastically in the coming months as deposits are exhausted and new discoveries remain elusive. In terms of production, 2009 is the outlier as far as the trend, Omar Jabara, spokesman for US-based Newmont Mining, the second-largest gold producer in the world, told a news agency.
Gold prices hit record high in Pakistan Gold prices touched yet another record in Pakistan as the 10-gram gold price in its bullion market touched record Pak Rs 32,572 on Wednesday. Based on global surge of the yellow metal, one tola rate also hit a new peak of Pak Rs 38,000. One tola is equal to 11.66 grams. On Tuesday the gold was trading at Pak Rs 32,271 per 10-gram and Pak Rs 37,650 per tola. Gold price in Pakistan was Pak Rs 200 per tola higher than Dubai.
India plans to buy more gold from IMF India is open to buying more gold from the International Monetary Fund (IMF). It bought 200 tonnes for $6.7 billion on November 3. The Reserve Bank of India (RBI) may well buy IMF’s remaining hoard of 201.3 tonnes on acceptable terms, which are now under negotiation. A government official said that the additional purchase would depend on the “successful pitching by RBI”. “RBI is an independent body, and the government does not interfere in its affairs. It will get the gold if its bid is successful and at the price it has offered,” said the official.
Sri Lanka buys 10 tonnes of IMF gold Another 10 tonnes of the IMF's 403.3 tonnes of gold which have been up for sale has been acquired off market by Sri Lanka. The International Monetary Fund said on Wednesday it had sold 10 tons of gold to the Central Bank of Sri Lanka, using Monday's market prices for the transaction. In a statement, the IMF said proceeds were equivalent to $375 million, adding the sale was part of 403.3 tons approved by its executive board in September 2009. The fund has already sold 202 tons of gold to the Reserve Bank of India and the Bank of Mauritius. Media reports on Wednesday that India was open to buying more gold from the IMF helped push the price of gold to a record. Gold traded at $1,186.30 an ounce at 2 p.m. (1900 GMT) in New York.
Profit taking brings gold price back from the brink A rapid surge in the gold price taking it to within striking distance of $1200 an ounce was halted this morning by profit taking - but for how long? Eastern market buying , following news of yet another Central Bank IMF gold purchase - this time a relatively small amount - 10 tonnes (by Sri Lanka) kept gold surging up to over $1195 an ounce, just short of yet another round figure psychological barrier, before profit taking in Europe came in as markets opened and dropped the price back around $10-15. With the U.S. market closed for the Thanksgiving holiday, gold is likely to remain thinly traded until Monday at the earliest. It will be interesting to see the U.S. take on the gold price level when traders get back to their offices.
Gold Falls From Record in London as Dollar Rebound Spurs Sales Gold fell for the first time this week in London as a stronger dollar prompted investors to sell the metal after it reached a record. Other precious metals slid. Bullion earlier rose to a record for the third time this week. Sri Lanka bought 10 metric tons from the International Monetary Fund for about $375 million, the IMF said yesterday, following India and Mauritius. The metal slipped after the U.S. Dollar Index rebounded from a 15-month low.
How and Why China Will Flood the Gold Market As you read this, the Chinese government is doing an extraordinary thing... something nearly unheard of in the modern world. It is encouraging citizens to put at least 5% of their savings into precious metals. The Chinese government is telling people gold and silver are good investments that will safeguard their wealth. After last year's meltdown in the stock market, people believe it. After all, Chinese citizens don't receive government retirement money... and they don't have company pension plans like people in many other countries do.
The Danger and the Opportunity Gold is now pushing deeply into critically overbought territory on its RSI indicator, so consolidation/correction can be presumed to be imminent. Look for the gap with the 20-day moving average, shown on our 1-year chart (the green line), to be closed in the near future. Not known at this point is how the very tight standoff in the dollar will resolve itself. If we are on the verge of a second wave of the global economic crisis, involving another acute deflationary contraction, then the dollar will break out upside soon from its bullish looking Falling Wedge pattern and possibly spike as a torrent of funds flows back into short-expiry Treasuries.
Metal-detector enthusiast unearths $5.5 million in gold The largest haul of Anglo-Saxon gold ever discovered, unearthed by a metal-detector enthusiast in a farmer's field, has been valued at 3.28 million pounds ($5.5 million) by a committee of experts. The Staffordshire Hoard, found by Terry Herbert in central England in July, comprises over 1,500 mainly gold and silver items thought to date back to the 7th century. Under Treasure Trove laws, the money will be split between the finder, Herbert, and the landowner, Fred Johnson.
Weak U.S. Dollar Boosts Commodities, What’s Next? Another fantastic week for precious metals as the US dollar continues its slide lower. Energy commodities like oil and natural gas are having some difficulty finding buyers. When commodities start to trend they become very profitable for those riding them up or down. But when a short term trend starts to virtually go straight up (parabolic) then we must be prepared for a sharp pullback. Once the price starts to slide I figure a lot of short term traders will begin locking in profits, sending gold down.
U.S. Dollar Break Triggers Sharp Moves in Financial Markets Wow Wednesday break of the dollar triggered a lot of strong moves... The Barometer remains in Sell Mode. However, it is turning higher at an extended level. We're very cautious here with our key reversal date on the 30th. I would prefer to see the market move sharply lower on Friday and Monday and that should mark a bottom. The Stock Barometer is my proprietary market timing system. The direction, slope and level of the Stock Barometer determine our outlook. For example, if the barometer line is moving down, we are in Sell Mode. A Buy or Sell Signal is triggered when the indicator clearly changes direction. Trend and support can override the barometer signals.
Traders dump the U.S. dollar The U.S. dollar hit a 15-month low against a basket of currencies on Wednesday after Federal Reserve minutes showed policymakers saw the currency's recent decline as "orderly." Traders dumped the U.S. currency across the board, pushing it down against the Canadian dollar and to a 10-month low against the yen, as the minutes also reinforced the view U.S. interest rates will stay essentially at zero until around mid-2010. The Canadian dollar was quoted at US95.50¢ in early North American trade, up from US94.52¢ at Tuesday's close.
Weak Dollar Boosts Commodities - So What's Next? Another fantastic week for precious metals as the US dollar continues its slide lower. Energy commodities like oil and natural gas are having some difficulty finding buyers. When commodities start to trend they become very profitable for those riding them up or down. But when a short term trend starts to virtually go straight up (parabolic) then we must be prepared for a sharp pullback. Once the price starts to slide I figure a lot of short term traders will begin locking in profits, sending gold down.
Why China Will Not Revalue their Currency President Obama’s recent trip to Beijing has sparked a lot of talk about China revaluing its currency, the yuan (officially called the renminbi), higher. Don’t you believe it. Not for a minute. The fact of the matter is China is not going to do anything substantial to increase the value of its currency, except perhaps take a baby step here and there to appease politicians around the world.
Dollar Hits a 14-Year Low Versus the Yen The dollar tumbled to a 14-year low against the yen on Thursday, reinforcing concern in Tokyo that America’s already-strapped consumers would buy even fewer Japanese cars and gadgets. The move was part of a wide, multiyear decline in the dollar, set off by worries about the American economy and its swelling debt — and more recently, a belief that the United States was unlikely to raise interest rates soon.
U.S. Dollar Declines to Its 14-year Low against Yen Thursday the U.S. dollar fell to a 14-year low against the yen in Asia. Than it bounced back somewhat, as a mounting view that the U.S. will continue to cling to its rock-bottom interest rates trumped a stepped-up warning from the Japanese government. The move came as the Philippines, Thailand, Singapore and South Korea appeared to sell their currencies Thursday, fending off the dollar's slide that threatens their export-oriented economies. But the interventions were small, reflecting a view that Asian authorities are powerless in halting a broad sell-off in the U.S. currency.
Keiser Report №2: Markets! Finance! Scandal! Keiser Report is a no holds barred look at the shocking scandals behind the global financial headlines. From the collusion between Wall Street and Capitol Hill to the latest banking crime wave, from bogus government economic statistics to rigged stock markets, nothing escapes the eye of Max Keiser, a former stockbroker, inventor of the virtual specialist technology and co-founder of the Hollywood Stock Exchange. With the help of Keiser's co-host, Stacy Herbert, and guests from around the world, Keiser Report tells you what is really going on in the global economy.
U.S. lives above its means, affects dollar The United States' pattern of consumption funded by credit has an impact on its currency's exchange rate, ECB's governing council member Nout Wellink said on Thursday. "The sub prime crisis was an expression of living above its means. That then translates into the exchange rate versus foreign currencies," Wellink said during a symposium of the Dutch central Bank, which he heads. Wellink also said China had not sufficiently shown willingness to let its currency, the yuan, appreciate versus other currencies.
Russia to Buy Canadian Dollars, Mulls More Currencies Russia’s central bank will add Canadian dollars to its reserves and may include more currencies as it seeks to reduce its dependence on the U.S dollar. “Technical preparations for transactions in Canadian dollars are underway,” Sergei Shvetsov, the bank’s financial operations head, told lawmakers in Moscow today, in remarks confirmed by a Bank Rossii official. “Then there may be one, two other currencies and that’s it.”
Soaring Unemployment and Double-dip Recession? Barack Obama's chief economic advisor, Lawrence Summers, is determined to sabotage a second round of stimulus. And, he's getting plenty of help, too. Congressional Democrats are dragging their feet because they're worried about the political backlash and midterm elections, the GOP deficit hawks are looking for a way they can derail the Obama agenda and reestablish their bone fides as fiscal conservatives, and the bailout-traumatized American people are simply opposed to anything that generates more red ink. Even Obama has joined the fray and started badmouthing stimulus stressing the importance of living within our means and trimming the deficits. So it looks like a done-deal; no more stimulus. There's only one problem, without another blast of stimulus the economy is headed for the skids.
European Banks Face Potential Dubai World Losses European banks face potential losses on an estimated $40 billion in exposure to Dubai after the city state's largest corporate entity, Dubai World, asked creditors for a six month standstill on debt repayments. The announcement on Dubai World's restructuring Wednesday raised fears that recent signs of improvements in banks' bad-debt levels could reverse and Dubai's problems could weigh on the global recovery.
Dubai's Woes Shake U.A.E., Region Government Attempts to Ease Jitters After Standstill Announcement on Debt; Questions of Exposure Investors sold banking stocks across Europe and Asia and jacked up the price of insuring against Dubai defaults, a day after the government said it would take charge of restructuring its corporate flagship, Dubai World, and asked creditors to accept delayed payments. A Wednesday announcement of a six-month standstill in debt payments took investors and analysts by surprise. It followed months of positive moves and comments from government officials suggesting Dubai and the federal government of the United Arab Emirates were willing to step in to plug financing holes.
Dubai debt move 'carefully planned' Dubai's move to suspend payments on its Dubai World conglomerate's debt was "carefully planned" and done in full knowledge of how the markets would react, the chairman of the Supreme Fiscal Committee said on Thursday. "Our intervention in Dubai World was carefully planned and reflects its specific financial position," Sheikh Ahmed bin Saeed al-Maktoum said in a statement. "The government is spearheading the restructuring of this commercial operation in the full knowledge of how the markets would react. We understand the concerns of the market and the creditors in particular.
New EU President Rompuy announces 2009 as "first year of global governance" Sees Copenhagen as step towards global management The new EU President, Herman Van Rompuy, has proclaimed 2009 as the "first year of global governance." During Rompuy's intervention as President on November 19th, he stated, "2009 is also the first year of global governance, with the establishment of the G20 in the middle of the financial crisis. The climate conference in Copenhagen is another step towards the global management of our planet."
EU President Herman Van Rompuy Confirms Global Government 19/11/09
These days many politicians in their speeches have been talking about world government , Obama , Gordon Brown and many all been talking about the new world order now this guy Herman Van Rompuy the new EU president set to take office on january 2010 . the lisbon treaty goes into effect december 1ts 2009 , i think the votes were rigged for the lisbon treaty as they have tried many times in the past with different names to past such act and now in 2009 its been signed . the lisbon treaty is briging back hitlers nazi germany and USSR back to europe or should i say EUSSR , but whats sad in all of this not everyone is awken from this some people want to but are worried bout others thinking they are conspiracy theorist . what will you do when you see this new world order takes place near you ? do you really believe we are out of the recession ? look at it from your own perspective , are you and your family working full time or living well ? i dont know how more clear can these guys say it ' new world order ' they dont care who knows about it or not as it seems everything is on place to launch it , so before you other conspiracy theorist or whatever take look at whats going on do research on the lisbon treaty , always remember its more of us then them so even when this global government takes place we can prevail and to my knowledge i dont think we will ever have anything like this ever again as this time the whole world will be aware what government is all about for generations to come .
Happy Thanksgiving on Nov 26th! PTG will be closed from noon, Nov 25th, until Monday, Nov 30th
Give Thanks for the Troops There's a wonderful e-mail going around this time of year. It's like a lot of other e-mails -- it tells a warm and fuzzy story. But this one is different. It's actually true.
The Dollar Bubble The Dollar Bubble starring Peter Schiff, Ron Paul, Marc Faber, Gerald Celente, Jim Rogers, and others. Prepare now for the U.S. dollar collapse.
Is Federal Reserve leasing gold and silver? The central bank of the United States, the Federal Reserve, is under intense scrutiny for its unprecedented actions following the 2008 financial crisis. Amidst the carnage of the financial crisis and real estate crash, Congress has taken a fresh look at the actions of the Federal Reserve on the economy. Seeking an Audit A new bill in Congress would authorize the Government Accountability Office to audit the inner workings of the Federal Reserve and publish the results with a 180 day delay. The goal of the audit to allow the market to see what the Federal Reserve has done to end the crisis, as well as offer the public an inside glimpse regarding which banks may be seeking additional bailout funds.
Cold Turkey Thanksgiving 2009 The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it. The process by which banks create money is so simple the mind is repelled. -- John Kenneth Galbraith (1908- ), former professor of economics at Harvard, writing in Money: Whence it came, where it went (1975). JK Galbraith’s statement that complexity is used by modern economics to confuse the truth about money is a fact. Simply put, bankers replaced money with credit and debt in order to profit by the indebting of others. It’s why bankers are now so rich. It is also why others are now so poor. Understanding money is not rocket science. Modern currencies are a fraud, a fraud that has escaped detection much as did Bernard Madoff’s ponzi-scheme. Bernard Madoff’s scheme was based on the fraud that investor’s money was, in fact, invested. The fraud of modern economics, however, is that money isn’t actually money—and they don’t want you to know it.
The FDIC Is $8.2 Billion in the Hole The FDIC fund that insures bank deposits is $8.2 billion in the hole. The Federal Deposit Insurance Corp. released its latest set of grim banking data moments ago. The FDIC had to set aside $21.7 billion for expected losses on future bank failures as the total number of "problem" banks rose to 552 from 416. There were glimmers of hope. While bad loans continue to beat up bank balance sheets, revenues are returning to the banking sector. Overall, the banking sector was profitable after a $4.3 billion loss in the second quarter and saw just $879 million in earnings last year.
Number of Troubled Banks Rises to 552; FDIC Fund Sinks Into the Red The government insurance fund that protects more than $4.5 trillion of U.S. bank deposits slipped into the red at the end of September, after fifty banks collapsed during the third quarter. The deposit insurance fund dropped by $18.6 billion during the third quarter of 2009 to negative $8.2 billion, as the Federal Deposit Insurance Corp. set aside $21.7 billion in provisions for additional bank failures. This is the second time in the agency's history that the balance has fallen into negative territory. The FDIC has already called on the industry to prepay $45 billion in assessments at the end of the year that will be set aside to cover the cost of bank failures in 2010.
Half of banks' losses may be unknown: IMF chief Half of the losses suffered by banks could still be hidden in their balance sheets, more so in Europe than in the United States, the International Monetary Fund's chief, Dominique Strauss-Kahn, was quoted as saying on Tuesday. In an interview with French newspaper Le Figaro, Strauss-Kahn also said the IMF thought the euro currency was probably a bit too strong.
The FDIC's swelling list of banks on the brink It's no secret that the financial sector is struggling. Even so, new figures from the Federal Deposit Insurance Corp.'s so-called secret list of troubled banks show an industry in increasing distress. The number of banks on the regulator's confidential watch list increased by 33% in the third quarter, to 552, the highest level in almost 16 years, the FDIC said Tuesday. Worried about souring mortgages and other toxic assets, the more than 8,000 banks with deposits backed by the FDIC sharply raised the amount they set aside to cover loan losses, dampening their profitability. The agency keeps the names of banks on this list under wraps to protect them from debilitating runs by depositors, which could destabilize them further. However, the FDIC does publish aggregate figures derived from its examinations of their books.
FDIC reports biggest drop for business loans on record The FDIC says banks aren't lending enough to businesses., but banks blame the feds and the FDIC. U.S. banks are earning money again, but they're writing fewer business loans, threatening a fragile economic recovery. The Federal Deposit Insurance Corp. reported Tuesday that U.S. bank loans fell by $210.4 billion or 2.8% during the third quarter – the biggest drop since the FDIC started keeping records in 1984. Banks booked $2.8 billion in third-quarter profits, reversing a second-quarter loss of $4.3 billion. "We need to see banks making more loans to their business customers," says FDIC Chairman Sheila Bair. "This is especially true for small businesses." Loans to businesses fell 6.5%, and real estate loans plummeted 8.1%.
Deposit insurance fund was negative in September The federal fund that insures depositors fell below zero in September for the first time in 17 years as “problem list” banks continued to mount largely due to deteriorating asset quality. The Federal Deposit Insurance Corp. released its Quarterly Banking Performance report for the third quarter Tuesday. The report stated that the net worth of the FDIC’s Deposit Insurance Fund ran a deficit of $8.2 billion as of September — the lowest since third quarter 1992 — forcing the FDIC to dip into $38.9 billion of its loss reserve in order to have a positive balance of $30.7 billion in the fund. A new requirement for banks to prepay three years’ worth of deposit insurance premiums will generate about $45 billion for the fund, the FDIC said.
FDIC’s List of ‘Problem’ Banks Grows 33% in Q309 Banks and savings institutions insured by the Federal Deposit Insurance Corp. (FDIC) posted aggregate net income of $2.8bn in Q309 despite net quarterly losses reported by more than 26% of all insured institutions, according to the FDIC’s quarterly report on insured institutions. Provisions for loan losses totaled $62.5bn in the quarter, an $11.3bn or 22.2% increase over the year-ago quarter. Realized losses on securities and other assets were $4.1bn — $3.8bn lower than last year.
Ranks of troubled banks grows The number of troubled banks in the U.S. now totals 552, the FDIC reported Tuesday. The Federal Deposit Insurance Corp. said the number of problem financial institutions through the third quarter sits at 552 nationwide. That is up from 252 problem banks for all of 2008 and only 76 in 2007. The federal banking regulator said those troubled banks have assets of $346 billion. FDIC numbers also show banks across the U.S. have cut more than 101,500 jobs since third-quarter 2008. Banking employment totaled 2.17 million in 3Q 2008 compared to 2.07 million for 3Q 2009.
FDIC: 32% of Tennessee banks now unprofitable Tennessee’s 179 commercial banks insured by the Federal Deposit Insurance Corp. collectively posted a loss of $343 million in the third quarter, FDIC reported Tuesday. That’s an improvement from a loss of $364 million posted in the second quarter ended June 30, but a significant drop from the $229 million in profit posted a year ago. The percentage of unprofitable institutions in the state inched up to 31.84 percent in the quarter, up from 31.49 in the second quarter. A year ago it was 22.95 percent. At the same time total loans and leases fell to $60.3 billion from $65.5 billion in the second quarter and $66.8 billion a year ago.
FDIC: 61.2% of GA banks now unprofitable Georgia’s commercial banks reported a collective loss for the third quarter as more than 60 percent of all the state’s banks were unprofitable, according to data published Tuesday by the Federal Deposit Insurance Corp. The FDIC report shows 61.2 percent of all Georgia banks were unprofitable in the third quarter, compared with 41 percent in the third quarter of 2008 and 11.8 percent in the third quarter of 2007. The Peach State leads the nation in bank failures with 26 since August 2008. As many as a third of its banks are under some form of regulatory order to improve operations, industry observers say. As of Sept. 30, Georgia’s banks employed 46,409 people, compared with 50,238 in the third quarter of 2008.
Fiat money, budget deficits push up gold prices When gold broke out of a triangle formation in early September, a technical buying signal was generated. . . . . A few weeks later gold gave another buying signal. This one was even more important than the first, because gold had entered new high ground. As was evident from my chart analysis, gold broke out of a huge consolidation pattern that lasted from March 2008 until October 2009. This signal was telling us that the long-term bull market that began in 2001 was still intact and getting ready for its next medium-term up leg. Since then, gold has continued its ascent by more than 10 percent. And the strong technical picture calls for the gold bull market to continue.
The Gold Rush Discussing how much higher gold prices can go, with Peter Morici, University Of Maryland; Joseph LaVorgna, Deutsche Bank; Niall Ferguson, Harvard University; CNBC's Rick Santelli & Scott Cohn.
Dump the dollar! Buy gold! Chris Pia, a master trader and Moore Capital alumnus, explains the market. Back in 1988, long before Louis Bacon became the secretive hedge fund billionaire atop Moore Capital, he was walking the trading floor at Shearson Lehman when he spotted Chris Pia, a burly 21-year-old recruit. The jazzy graphics Pia was running on his computer impressed Bacon, and the kid knew a bit about commodities, having spent the past five summers clerking on the COMEX "while my friends tended bar at Jones Beach."
Gold Six Grand Gold price targets suffer from incompleteness. Lack of perspective, obsession with the current price, false assumptions, and inside-the-box thinking run rampant. For these reasons, my assessment that gold can reach six thousand dollars per ounce by 2018 is not preposterous. The target is a simple “back of the envelope” estimate for a long-term bull market in anything. Myself and many others use the multiplication factor method. For example, Mr. Jeff Clark: "In the 1970s gold rose from $35 to $850, a factor of 24.28. Our low in 2001 was $255.95. Multiply that by 24.28 and you get a gold price of $6,214 per ounce." While further analysis could refine that number, it is a good first cut.
Is $6,300 fair value for gold? The last parabolic spike in gold took off when central banks joined the fray in the 1970s, hoarding bullion with the same enthusiasm as gold bugs. Dylan Grice from Société Générale says it smells much the same today. He sees an eery similarity between the decision of India’s central bank to buy half the IMF’s entire sale of gold, and the move by France’s central bank to start converting dollars into gold in 1965 — which was, of course, the start of the slippery slope leading to the collapse of Bretton Woods and the closure of the US gold window under Nixon.
Gold: Physical market buying outstrips scrap selling Gold has not traded up to $1,200 following call option expiry yesterday. However, gold remains well supported. Buying in the physical market is still comfortably outstripping scrap selling, which we believe will continue for the rest of the year. Investment demand is also strong. Gold attracted new ETF inflows yesterday, with the SPDR Gold Trust ETF adding 3.96 metric tonnes to its investment holdings. There is trouble in the Eurozone, with growing pressure on Greece (which is battling with a heavy, and rising, debt burden). Greece can do very little about the debt burden, as its monetary policy is set by the ECB and currency value-determined by the Eurozone.
Gold & Mount St. Helens Not in the last few years have conditions been aligned for a truly explosive upward move in the gold & silver prices. A confluence of factors simply could not be more bullish, promising, and powerful. The psychology has also been raised in awareness on a global basis, as financial centers, media networks, and common folks have coordinated their recognition of the gold bull. They comprehend perhaps two or three of the main factors why gold is rising, out my stated list in a recent article "13 Reasons For a Major Gold Breakout"
Investors increasingly betting on gold, silver A leading British bank says that the case for Investing in Gold is becoming "increasingly compelling". In its latest Commodities Quarterly report, Standard Chartered highlighted growing central-bank buying and heightened retail interest as positive developments for the yellow metal. Furthermore, it predicted that Gold Prices will perform particularly strongly in the fourth quarter of next year as the impact of the financial crisis continues to affect the global economy.
A Mad Rush as Gold Bugs Get the Boot Fleets of armored trucks piled with gold bars and coins have been streaming out of midtown Manhattan in one unexpected consequence of the gold craze. Amid gold's rise -- it has gained 32% this year and reached a record on Monday -- investors have been loading up on bullion and coins. One big problem now is where to store it. The solution from HSBC, owner of one of the biggest vaults in the U.S.: somewhere else. HSBC has told retail clients to remove their small holdings from its fortress beneath its tower on New York City's Fifth Avenue. The bank has decided retail customers aren't profitable enough and is demanding those clients remove their gold to make room for more lucrative institutional customers.
Silver and Gold as Currency Gold and silver have a 6000 year history for their use as a currency, and until the last century, the price of gold and silver maintained a healthy valuation ratio of 1 ounce of gold to every 15 ounces of silver. This purchasing power ratio is strengthened by the fact that there are 17 ounces of silver for every 1 ounce of gold in the earth's crust, although physical silver stocks have dwindled, as the metal is used in a wide variety of industrial applications.
Dollar, gold, GDP, Fed, housing, Senate Race
Gold’s Price Is Not A Bubble Price Gold remains undervalued, even at its current price of $1,150 an ounce. One signal of this is that at current market prices of gold, the notes of the FED – its dollar bills – are not fully-backed by gold. That is to say, gold’s price is lower than the Zero Discount Value (ZDV) of gold by a wide margin. Medley Global Advisors does not accept this idea or does not understand it. They may be operating on a different theory of money than mine, which is that gold never stopped being the medium of account for prices, even though the FED has suspended convertibility of its notes into gold since 1971.
Gold bull run fundamentals strong: Deutsche Bank The largest bank in Germany has revealed that it can see gold prices continuing to rise strongly in the foreseeable future. A surge in investor interest has already seen the yellow metal increase by more than ten percent during November, culminating in yesterday's (November 23rd) record high of $1,171 per ounce. Now analysts at Deutsche Bank have suggested in a new research report that the fundamentals are in place for gold to enjoy further gains until at least the end of the year. "We believe the activity of central banks [who have been increasing their gold reserves] and seasonal weakness in the US dollar in the final four weeks of the year will sustain the strong rally in Gold Prices," they wrote, according to the news provider.
You Buy Gold When the Government is Making a Mess of the Monetary Situation The Dow fell slightly on Friday. Oil ended the week at $77. The dollar went nowhere. But gold rose to a new high - $1,146. Whatever else may be going on, there's a real bull market in gold. It's a bull market that began ten years ago. If you'd bought stocks then, you'd have about what you have now...less inflation. If you'd bought gold...you have about 4 times what you had then. Today, a quick glance at a chart shows gold looking a little toppy. Expect a correction. But remember, this is a bull market. In a bull market, you buy the dips.
Gold bull run to continue in 2010: Standard Bank An analyst at Standard Bank, the largest bank in Africa says strong physical demand for buying gold should continue for the rest of the year. Gold prices have been regularly breaking their all-time highs in recent weeks through a combination of rising investment purchases and ever-increasing central-bank buying. Walter de Wet, from Standard Bank, explained in an interview with Bloomberg that he can see the interest in gold bullion comfortably extending to the beginning of 2010. "Buying in the physical market is still comfortably outstripping scrap selling, which we believe will continue for the rest of the year," he told the news provider.
Gold gains for eighth session as ETF holdings rise Holdings in ETF up nearly 4 metric tons, suggesting rising investment demand Gold futures closed higher for the eighth session in a row Tuesday, as an increase in gold holdings backing the largest exchange-traded fund suggested continued investment demand ahead. Holdings in SPDR Gold Shares, the biggest gold exchange-traded fund, stood at 1,121.46 metric tons, up nearly 4 metric tons from 1,117.49 on Friday. Gold for December delivery finished up $1.10 at $1,165.80 an ounce on the Comex division of the New York Mercantile Exchange, marking its eighth consecutive session of gains. On Monday, the contract reached an all-time intraday high of $1,174 an ounce.
Gold inches higher while other commodities decline Gold prices managed to carve out a small gain Tuesday, while other commodities fell after the latest economic data signaled that the recovery will be slow. A rise in the dollar also hurt demand for commodities, making them more expensive to foreign buyers. Commodities like silver, copper and oil retreated after the Commerce Department revised lower its reading on third-quarter economic growth, saying the nation's gross domestic product rose 2.8 percent, down from an initial estimate of 3.5 percent.
Next Station Approaches The train left the station with gold stock prices on board as we predicted months ago but fear not if you are not already aboard as there are always “stops” (read that as “dips”) along the way. These dips should be bought because the rally is running along nicely and you know what they say... the trend is your friend. Profits are still there to be made and in my humble opinion the best is yet to come, the next station for boarding is only a week or two ahead. This will not be very deep just a nice safe entry point for those who like to time their market entry.
Reply to Paul Krugman On Oct. 12, 2009, Paul Krugman, columnist for the New York Times (Op-Ed Page) did his column attacking the gold standard and defending the bankers' privilege to create money. This was such a perfect exposition of the lies of our age that it bears closer examination. Because the more one digs into this issue the more things are not as they seem. Indeed, this is part of the existing system whereby the government robs wealth from you and gives to the ultra-rich. Let us start the examination with a number of facts.
China to hunt for gold in Australia Red China, the biggest gold producer in the world, never ventured out to explore gold. But, the above $1150 per ounce gold prices have forced the Communist nation to think again on gold exploration possibilities outside the country. And, Australia will be the first location the Chinese will target if they go for exploration outside the country. According to a report in the Sydney Morning Herald, the Chinese are finding the lure of the untapped exploration upside in the Australian industry - ranked third in the global production stakes - too much to resist.
Dollar Falls on Global Optimism; Aussie Gains on RBA’s Remarks The dollar weakened against higher- yielding currencies, reversing earlier gains, as renewed optimism for a global economic recovery spurred investors to buy riskier assets. The U.S. currency and the yen fell against the Australian dollar after a report showed Japan’s exports dropped at the slowest pace in a year as government spending worldwide boosted demand. The Australian dollar rose against all 16 of its most- traded counterparts as Reserve Bank of Australia Deputy Governor Ric Battellino said the economy has entered a “new upswing.”
JPMorgan Cuts 2010 Dollar Forecast on Rates, Cash JPMorgan Chase & Co., the second- largest U.S. bank, said the dollar will fall to a record low next year on signs the Federal Reserve will keep interest rates near zero until 2011 and investors seek higher-yielding assets. The dollar will weaken to $1.62 per euro in the second quarter, JPMorgan foreign-exchange strategists led by London- based John Normand wrote in the bank’s Global FX Outlook 2010, published today. The bank previously predicted a trough of $1.50 in the first quarter.
The Federal Reserve's Silver Lining The central bank of the United States, the Federal Reserve, is under intense scrutiny for its unprecedented actions following the 2008 financial crisis. Amidst the carnage of the financial crisis and real estate crash, Congress has taken a fresh look at the actions of the Federal Reserve on the economy. Seeking an Audit A new bill in Congress would authorize the Government Accountability Office to audit the inner workings of the Federal Reserve and publish the results with a 180 day delay. The goal of the audit to allow the market to see what the Federal Reserve has done to end the crisis, as well as offer the public an inside glimpse regarding which banks may be seeking additional bailout funds. However, the most valuable asset to the audit is the balance sheet. Should this bill pass, the entirety of the balance sheet will have to be made public to the GAO, which can then identify how inflated the US currency has really become.
END THE FED.... Then What? - The Transition to Sound Money . . . . it's an important topic since all of us who gathered here to protest the Federal Reserve today need to also have a plan on how best to replace the FED and the fiat monetary system. One note before I begin. I openly acknowledge that my idea is at best a starting point, and I welcome a healthy debate on this topic. I have given this particular topic quite a bit of research since first becoming aware that the dollar was not backed by gold about 2 years ago, and this past summer I attended Mises University, which is one of the very few places in the nation where one can study Austrian free market economics – the other two places being George Mason University in DC, and Grove City College in Pittsburgh. In this talk I will first address what the goal is – as one must always begin with the end in mind. Then I will briefly discuss several transition ideas that are already present in literature, describe possible issues with each, and then spend the remainder of the time outlining my proposal.
Fed: super-low rates could fuel speculative bubble The Federal Reserve doesn't expect the recovery will be strong enough to quickly drive down the jobless rate, and acknowledged its efforts to keep the rebound going could feed a new speculative bubble. Record-low interest rates "could lead to excessive risk-taking in financial markets," according to documents released Tuesday of the Fed's closed-door meeting earlier this month. It also could cause consumers, investors and businesses to worry about inflation taking off. Although Fed officials saw the current likelihood of that as "relatively low," they pledged to "remain alert to these risks." At the Nov. 3-4 meeting, Fed Chairman Ben Bernanke and his colleagues kept the target range for its bank lending rate at zero to 0.25 percent.
White House Defends Stimulus Act Despite Government Audit Questioning the Job Numbers The White House defended the effectiveness of the economic stimulus act on Monday after a government audit last week called many of the reported job numbers into question. The Government Accountability Office (GAO) reported that $173 billion of the $787 billion stimulus package had been paid out by the federal government as of Sept. 30. That's about 22 percent of the total, and it indicates that 78 percent of the stimulus funds have not been paid out - at a time when unemployment was rising.
Treasury Rethinks TARP As Banks Grow Stronger but Consumer Lending Remains Weak Big banks are roaring back. At crisis' edge last year, they are repaying billions of dollars dumped into their vaults to rescue them. Dividend checks are accumulating at the Treasury. Taxpayers won't recoup the full sum of the government's unprecedented infusion to the financial sector, but the returns are ahead of schedule. With large bets on bonds, commodities and exotic financial products, big banks are reporting third-quarter profits. Of the $250 billion that the government initially set aside to spend in direct assistance to banks, it has spent $205 billion and the Treasury is already taking steps to bring that program to an end. The ledger: Banks have paid back $71 billion of the infusions. They have also paid the Treasury nearly $7 billion in dividends.
U.S. Fund for Bank Deposit Insurance Falls Into the Red The government-administered insurance fund that protects depositors fell $8.2 billion into the red for the first time since the fallout from the savings-and-loan crisis of the early 1990s as the pace of bank failures accelerated in the third quarter. Bank customers, however, should remain confident that their deposits would be protected since the bulk of that negative balance reflects money the agency has set aside to cover future bank failures. Federal Insurance Deposit Corporation officials warned in October that the deposit insurance fund had been depleted, but Tuesday's third-quarter report card on the banking industry marked the first time that hard numbers had been released. Even amid early signs that the economy is recovering, the report suggested that the country's 8,100 lenders remain in fragile condition.
Is it Time to Abolish the Federal Reserve? The economic pundits are out in full force this week discussing subprime lending's imminent (if not present) collapse. I've heard 'em on ABC, NPR, Fox, CNN - they're everywhere, and some of them are smart enough to realize that the problem stems from America being a host to the disease known as the Federal Reserve (read: we're not controlled so much by government as we are by a central bank).
Fed Officials Said Low Rates May Fuel Speculation Federal Reserve officials said record-low interest rates might fuel “excessive” speculation in financial markets and possibly dislodge expectations for low inflation, according to minutes of their meeting released today. “Members noted the possibility that some negative side effects might result from the maintenance of very low short-term interest rates for an extended period,” minutes of the Nov. 3-4 meeting said, “including the possibility that such a policy stance could lead to excessive risk-taking in financial markets or an unanchoring of inflation expectations.”
Goldman Sachs and US demise I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. Famous words, but uttered by whom and when? No, not some socialist or communist. It was none other than president Thomas Jefferson. The year was 1802. We forget these words at our own peril. On November 17, the "leader of the pack", aka Goldman Sachs, apologized. Its chief honcho, Lloyd Blankfein said: "Certainly, our industry is responsible for things. We're a leader in our industry, and we participated in things that were clearly wrong and we have reasons to regret and apologize for."
Banks to Give Customers the Boot, Analyst Dick Bove Says Not happy with your bank? The feeling is likely mutual. Don't be surprised if your bank soon decides they don't want your business anymore, says Rochdale Securities bank analyst Dick Bove. Why? Bank regulators and Congress are looking at ways at making the system more safe and sound in order to avoid another meltdown. What on the surface seems like a wise and prudent decision, however may have unintended consequences, most notably higher fees for bounced checks, credit card balances and the like.
China banks' rush for billions could trip markets Chinese banks, under government pressure to shore up their finances, are set to unleash a wave of billions of dollars in capital raising that could strain equity markets but also spur innovation in debt instruments. The banks could go to the market with a slew of new stock and bond offers as they look to raise as much as 300 billion yuan ($44 billion) over the next few years, according to some estimates.
Economy limping back to strength 'Slow-motion recovery' Fed says return to normal may take years The unemployment rate will remain elevated for years to come, according to a forecast released Tuesday by the Federal Reserve that addresses for the first time economic conditions at the time of the next presidential election. It paints a grim picture. Top Fed officials expect the unemployment rate to remain in the 6.8 to 7.5 percent range at the end of 2012 and said it could take "about five or six years" from now for economic activity to return to normal. The jobless rate was 10.2 percent in October.
Restaurants brace for a sour season as consumers lose appetite for dining out The number of people visiting restaurants has plunged for four quarters in a row, according to NPD Group. Some higher-end establishments are offering discounts for holiday parties. Adele Cabot and her husband used to dine out three or four times a week, regularly spending $75 to $100 at a sushi bar sampling rainbow rolls and yellowtail nigiri sushi. But that changed after Cabot, an adjunct professor of theater at UCLA, had to take a 6% salary cut. The couple now eat out half as much and frequent less expensive Mexican and Italian places. "I just don't want to spend the money to eat out a lot," Cabot said. With Thanksgiving this week and Christmas next month, restaurants are eager to win back customers such as Cabot who seemed to disappear amid a brutal summer for the nation's eateries.
Economy's rebound not as strong as first thought Economy's rebound not as strong as first thought, while consumer confidence remains weak The economy is growing modestly, with consumers too wary about spending to invigorate the recovery. That was the picture that emerged Tuesday from reports on the nation's economy and the confidence of consumers, who power 70 percent of it. The economy grew at a 2.8 percent rate last quarter -- less than originally estimated. And forecasts for the current quarter are for similarly slight growth before a drop-off next year. The main reasons are that consumers remain reluctant to spend, commercial construction has slipped and imports are dampening U.S. growth.
U.S. third-quarter economic growth revised down The U.S. economy grew more slowly than first thought in the third quarter, but a fifth month of gains in house prices in September and an improvement in consumer morale signaled the anemic recovery was intact. In its second estimate of third quarter gross domestic product published on Tuesday, the Commerce Department said the economy expanded at a 2.8 percent annual rate, probably ending the most painful U.S. recession in 70 years.
Gerald Celente Obamageddon
Long-Term Bonds and the End of Our World Nouriel Roubini warns that an asset bubble is building as money chases commodities. Asian countries are considering capital controls to stem the inflow of hot money. The Wall Street Journal reports that rare coins are soaring at auctions, with a single penny recently breaking the $1 million barrier. U.S. stocks and crude oil are up 60% and 105%, respectively, from their post-crash lows. And of course gold is at a record high. Looks like the stimulus orgy worked: Speculators are back and scooping up pretty much everything in sight. Yet long-term bonds are just sitting there, which isn't what you'd expect at the beginning of another inflationary boom. Because bonds trade on inflationary expectations their yields should be rising and their prices falling. Why aren't they?
The Next Trillion Dollar Federal Giveaway To Mega-Banks: Shooting Main Street Lenders For The Sins Of Wall Street I have strongly supported proposals to increase mortgage lending standards, on the theory that higher standards are necessary to restore borrower and investor confidence, and will contribute to long term stability in the mortgage market. But buried in the enormously complex administration, Frank and Dodd regulatory reform bills are terribly drafted provisions which will strike a death blow to "Main Street" lenders and hand over a multi-trillion dollar mortgage market to a few large financial institutions. Ironically, for legislation designed to reduce systemic risk, the proposals will concentrate the mortgage finance system beyond anything that has occurred in the market during the past 50 years.
What Is a Tobin Tax? The purpose of a Tobin Tax is to place a financial penalty on short term transactions to curb speculation. It was originally proposed by James Tobin in the 1970's as a means of discouraging international currency speculation after Nixon closed the gold window and rendered the Bretton Woods agreement moot, at least until the ascendancy of the current dollar reserve currency system. The tax is generally discussed as being 0.1% of the total transaction, or 1.00 per 1,000. It certainly would have a discouraging impact on the daytraders, and some could argue, as I would, that a percentage of the transaction at .1% might be considered regressive, and a huge penalty on institutional trading. The tax might be better targeted at 'frequency' of trading, rather than nominal size of the transaction, in order to target speculation, under some reasonable transaction limit.
Goldman's Profits Come from Our Pockets: Why We Need a Tobin Tax "The homeless in America have Goldman Sachs to thank for their homelessness and starvation right now. They took the money from their pockets, they put it in their bonuses for this year. . . . That's a financial terrorist crime." -- Former stock trader Max Keiser In the midst of the worst recession since the Great Depression, Goldman Sachs is having a banner year. According to an October 16 article by Colin Barr on CNNMoney.com: While Goldman churned out $3 billion in profits in the third quarter, the economy shed 768,000 jobs, and home foreclosures set a new record. More than a million Americans have filed for bankruptcy this year, according to the American Bankruptcy Institute. Barr writes that Goldman's "eye-popping profit" resulted "as revenue from trading rose fourfold from a year ago." Really. Revenue from trading? Didn't we bail out Goldman and the other Wall Street banks so they could make loans, take deposits, and keep our money safe?
Housing Bottom? "Not Even Close," Barry Ritholtz Says A fifth-straight monthly gain for the Case-Shiller Index Tuesday and Monday's stronger-than-expected existing home sales report is giving renewed hope to the housing bulls. "Disregard them," says Barry Ritholtz, CEO of Fusion IQ, who notes the existing home sales number was juiced by sales of cheap condos and various government programs. Meanwhile, the Case-Shiller results were below expectations. We are "not even close" to a bottom in housing, says Ritholtz, who estimates national house prices remain 15-20% overvalued, based on the traditional metrics of: median income-to-median sales price, the cost of owning vs. renting, and housing stock as a percent of GDP.
Home Prices May Be Nearing a New Dip Home prices are enduring an early winter chill, raising the odds that the economy may suffer another jolt while it is still weak. Two price indexes released Tuesday indicated that the momentum the housing market showed over the late spring and summer is faltering, even as the government said the economy grew at a slower pace in the third quarter than previously reported. The Standard & Poor’s/Case-Shiller home price index, a closely watched measure of the housing markets in 20 metropolitan areas, barely rose in September, rising 0.3 percent from August on a seasonally adjusted basis. Prices fell for the month in nine cities in the index, including Boston, New York, Seattle and Charlotte, N.C.
Freddie Mac trying to minimize exposure from failed lender, regional bank Mortgage giant files claim with $1 billion in assets at risk Freddie Mac, the government-backed mortgage finance giant, said Monday it's trying to minimize losses on more than $1 billion in assets at risk because of the summer collapse of mortgage lender Taylor, Bean & Whitaker and a regional bank with which it did business. McLean-based Freddie Mac said it filed a petition to claim about $595 million that Taylor Bean had collected on its behalf and placed on deposit at Colonial Bank, an Alabama-based bank that was shut by regulators in early August, a few weeks before Taylor Bean filed for Chapter 11 bankruptcy protection.
Freddie Mac Mortgage Portfolio Rose To $2.244 Trillion, Single-Family Portfolio Delinquencies Hit Record 3.54% The government sponsored version of subprime expert New Century reported October numbers, and they were not pretty. The bankrupt lender of 3.5% down housing loans saw its total mortgage portfolio rise to $2.244 trillion, thanks to the Fed which keeps on buying whatever crap FRE spews off the conveyor belt, now that even PIMCO is running far from that radioactive sludge. Total single-family delinquencies hit an all time record of 3.54% (3.33% in September).
23% of all Borrowers Underwater, Says First American CoreLogic Falling house values plunged nearly 10.7m of all residential properties with mortgages into negative equity as of September, according to quarterly data by First American CoreLogic, the property and ownership information provider subsidiary of The First American Corp. As of the end of Q309, 23% of all mortgaged residential properties - or nearly one in four - were "underwater," or worth less than the outstanding mortgage. This quarter's data includes a model that factors in loan amortization and utilization rates for home equity lines of credit (HELOCs). Without accounting for either factor, the Q309 negative equity rate would have been 33.8%, CoreLogic said.
Millions Underwater in Mortgage Crisis Even home buyers who thought they were getting a bargain are now finding themselves underwater. The News Hub panel discusses a mortgage crisis that has left millions owing more than their homes are worth.
Arizona second in underwater loans Arizona has more homeowners who are underwater with their mortgages than any other state, save one. About 48 percent of homeowners here owe more on their mortgages than the home is worth. That is second only to Nevada where 65 percent of homeowners have what is called “negative equity” in their homes. The data comes from First American CoreLogic, a data and real estate analysis firm based in Santa Ana, Calif. Another 5 percent of homeowners in Arizona are very close to owing more than their houses are worth, according to the study released this week by First American.
Report: 8% of Hawaii mortgages are 'underwater' About 8.2 percent of homeowners in Hawaii owed more on their mortgages in the third quarter than their homes were worth, according to third-quarter data released Tuesday. Hawaii’s rate is well below the national rate of 23 percent of homeowners whose mortgages have negative equity and are deemed “underwater” or “upside down,” according to a report by First American CoreLogic, a California real estate research firm. Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination of both. About 3.2 percent of homeowners in Hawaii are near negative equity share.
Nearly half of Tampa Bay’s homes are in negative equity Nationally, nearly 10.7 million homes, or 23 percent of all residential properties with mortgages, were in negative equity as of September. But in the Tampa-St. Petersburg-Clearwater market, that number is even larger: nearly 46 percent. That is according to a study of loan amortization and utilization rates for home equity lines of credit by First American CoreLogic. The high rate in the greater Tampa market helped push Florida into being among five states where most of the distribution of negative equity exists. Florida, with 45 percent overall negative equity, joins Nevada at 65 percent, Arizona at 48 percent, Michigan at 37 percent and California at 35 percent.
Home prices climb for 2nd straight quarter S&P/Case-Shiller index shows prices up 3.1% from 3 months earlier, but down nearly 9% from a year ago. Home prices rose for the second consecutive quarter but remained nearly 9% lower than a year earlier, according to a housing market report issued Tuesday. Prices nationwide rose 3.1% in the three months ended Sept. 30, according to the S&P/Case-Shiller Home Price Index, a closely watched gauge of housing market direction. That followed a similar 3.1% rise during the second quarter of the year.
Price Decline Slows in Q309: S&P/Case-Shiller US home prices were down 8.9% in Q309 compared to Q308, according to the Standard & Poor's (S&P) Case-Shiller National Home Price Index, better than the year-over-year quarterly declines of 14.7% in Q209 and 19% in Q109. The S&P/Case-Shiller monthly 10-city and 20-city composites experienced year-over-year declines of 8.5% and 9.4%, respectively in September. That's better than the 10-city and 20-city composite declines of 10.6% and 11.3% experienced in August and continues a trend of generally improved monthly declines throughout 2009.
Home Prices Post Monthly Gains U.S. home prices logged their fifth monthly increase in September, according to the S&P Case-Shiller home-price indexes, as prices also rose sequentially in the third quarter. For the third quarter, the broader S&P Case-Shiller U.S. National Home Price Index, which is only released four times a year, posted an 8.9% decrease from a year earlier. It was up 3.1% sequentially. As of the third quarter, average home prices are similar to what they were in the autumn of 2003.
Home Prices in 20 U.S. Cities Rise for Fourth Month Home prices in 20 U.S. cities rose for a fourth straight month in September, pointing to improvement in real estate that’s helping the economy emerge from recession. The S&P/Case-Shiller home-price index increased 0.27 percent from the prior month on a seasonally adjusted basis, after a 1.13 percent rise in August, the group said today in New York. The gauge fell 9.36 percent from September 2008, more than forecast, yet the smallest year-over-year decline since the end of 2007.
Gerald Celente: America has become an under-developing nation 11/17/09
Fannie Looks to Level Foreclosed-Home Playing Field Fannie Mae announced a program aimed at helping ordinary home buyers compete with investors for foreclosed homes. Under the program, dubbed First Look, Fannie plans to consider offers only from potential owner-occupants and certain public-housing entities during the first 15 days in which a foreclosed home is on the market. Fannie and its main rival, Freddie Mac, are government-controlled companies that buy or guarantee home mortgages. They are among the biggest owners of foreclosed homes. As of Sept. 30, Fannie said it had 72,275 single-family foreclosed homes on its books. Freddie had 41,133 as of that date.
Seattle home values fell 13.8 percent in past year While housing values in Seattle didn't fall the greatest, percentage-wise between August and September, only seven other large U.S. markets had bigger falls. The average price of a Seattle home dropped 0.4 percent from August to September according to the Standard & Poor's/Case-Shiller Home Price Indices, which are monthly reports that track home prices in 20 major U.S. cities. A month earlier, home values increased slightly in Seattle. Nationally, Cleveland reported the biggest August-to-September drop, at 1.6 percent. In the past year, home prices in Seattle have fallen 13.8 percent, compared with the national average of 9.4 percent. Every U.S. market in the top 20 has reported a drop in values over the past year, ranging from a 28.6 percent year drop in Las Vegas to a 1.2 percent drop in both Dallas and Denver.
Should homeowners walk away from upside down mortgages? One associate professor at the University of Arizona is stirring up some controversy after a paper he wrote explaining that it may be in people's best financial interest to walk away from their home when they are upside down on their mortgage. In the current economy, and especially growth areas like Arizona, home prices have fallen dramatically. This has caused homeowners to owe more to the bank than their home is worth. Homeowners in this position are often unable to sell their home, and face a choice, walk away from the home or continue paying a mortgage that they are losing money on. To read his paper, click here.
Fed Officials Cut Forecasts for Unemployment Rate Federal Reserve officials trimmed their forecasts earlier this month for the U.S. jobless rate in 2010 and 2011 as the economy rebounded while keeping their outlooks “broadly similar” to previous projections. Fed governors and regional-bank presidents predicted the unemployment rate will range from 9.3 percent to 9.7 percent in next year’s fourth quarter, down from the June projection of 9.5 percent to 9.8 percent, according to minutes of the Federal Open Market Committee’s Nov. 3-4 meeting released today.
A Phony 'Fix' for Health Care "You can fool some of the people all of the time," Abraham Lincoln said, "and all of the people some of the time." Apparently Congress agrees. Indeed, lawmakers are counting on it: In an effort to fool just enough people for just long enough, they're engaging in budget tricks to ram through health "reform." In essence, they're making promises that won't be kept. Here's how. Years ago, lawmakers declared they'd control the rising cost of health care by limiting the amount they paid doctors who treated Medicare patients. They created a formula that linked doctor pay to the overall economic growth rate, and claimed they'd use the formula to rein in spending.
Tax on 'Cadillac' Health Plans Would Hit Many Middle-Class Americans Schoolteacher Kinzi Blair makes only $46,000 a year, but she has what many would consider a "Cadillac" health plan, now targeted for a big tax increase by health reformers. She has $10 copays and no deductible. She gets generic prescription drugs for $10. Her plan covers mental health counseling, organ transplants, acupuncture. It covers speech therapy for preschoolers and in vitro fertilization. Sound pretty good? It surely must to millions of Americans who pay high deductibles, hundreds of dollars for prescription drugs or who have no insurance at all. Blair's circumstance illustrates the debate over taxes and fairness when it comes to health reform.
G.M. to Decide Saab’s Fate Next Week General Motors said it could decide next week to close its Saab Automobile unit after the Swedish company that planned to buy the brand backed out. It was the third time in less than two months that a sale of a G.M. brand has been called off, reflecting the difficulty of selling underperforming divisions in the midst of a global sales slump. G.M. said on Tuesday that its board planned to determine next week what to do with Saab. Closing the brand, as G.M. initially planned to do if it could not find a buyer, is a strong possibility, two people with direct knowledge of the company’s plans said. The people spoke on condition of anonymity because the board had not made its decision.
Hanged census worker ruled suicide A Kentucky census worker found naked, bound with duct tape and hanging from a tree with "fed" scrawled on his chest killed himself but staged his death to make it look like a homicide, authorities said Tuesday. Bill Sparkman, 51, was found Sept. 12 near a cemetery in a heavily wooded area of southeastern Kentucky. A man who found the body in the Daniel Boone National Forest has said Sparkman also was gagged and had an identification badge taped to his neck. Authorities said Sparkman alone manipulated the scene to conceal a suicide. Police said he had talked with others about ending his life, though authorities did not say specifically who in a news release.
MediaNews Group eyes blocking some online content from Google News Denver’s MediaNews Group Inc., publisher of The Denver Post, intends to block some of its online content from Google’s news website, according to a news report Tuesday. Bloomberg.com quoted MediaNews CEO William Dean Singleton as saying that his company plans to block some content from Google News when MediaNews begins charging readers of two of its newspapers for some online content next year. “The things that go behind pay walls, we will not let Google search to, but the things that are outside the pay wall we probably will, because we want the traffic,” Singleton told Bloomberg.
Obama’s Afghanistan Decision Coming ‘Within Days’
US to Send 34,000 More Troops to Afghanistan US media reports said today, Barack Obama is likely to send 34,000 more US troops to Afghanistan when he unveils his long-awaited strategy for the Afghan conflict next Tuesday, US media reports said today. The US president would make a prime time address to the American people to announce his plans for what he has described as "a war of necessity". Just as significant as the number of troops, however, will be pointers to a US exit strategy – something that will be closely watched by the British government, which is under public pressure to withdraw 9,000 UK troops from Afghanistan.
Obama Says He Intends to ‘Finish the Job’ in Afghanistan President Obama said Tuesday that he was determined to “finish the job” in Afghanistan, and his aides signaled to allies that he would send as many as 25,000 to 30,000 additional troops there even as they cautioned that the final number remained in flux. The White House said Mr. Obama had completed his consultations with his war council on Monday night and would formally announce his decision in a national address in the next week, probably on Tuesday.
Japan says it will soon release details of nuclear pact with U.S. Though existence of accord was known, move puts strain on ties Japan's new government, already bickering with the United States about the location of a Marine air station on Okinawa, appears intent on revealing evidence of a decades-old secret pact between Tokyo and Washington that allowed U.S. ships and aircraft to carry nuclear weapons on stopovers in Japan. Foreign Minister Katsuya Okada said that the investigation is in its final stages and that its findings will be announced in January. "We'll be unburdening ourselves of the insistence of past governments that a secret agreement did not exist," Okada said in a speech last weekend.
THAT'S ONE BIG BANG FOR MANKIND Scientists at the Large Hadron Collider buried deep beneath the Swiss-French border made history Monday, smashing two proton beams traveling at near-light speed into each other. The LHC, also known as the big bang machine, is the largest machine on Earth and was built to recreate conditions that existed just after the birth of the universe. The collider, housed at CERN, has inspired doomsday premonitions, but-for the time being, anyway-we're still here. Researchers hope to increase the power of their experiments at a steady pace. The scientists at CERN have coped with months of delays and expressed joy that decades of work are finally bearing fruit. One spokesman described the day's events as "the start of a fantastic era of physics."
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Tues 11.24.2009
Geithner’s Crisis Sleepwalk Is Reason He Must Go If Timothy Geithner were a Broadway show, the producers would shut it down. Treasury secretaries get attacked all the time and have to take it with aplomb. It’s in the job description. The criticism serves a purpose: A secretary who can withstand the withering attacks of congressmen has what it takes to manage a real crisis. Against this backdrop, Geithner’s performance last week was the most pitiful by a major economic policy maker in ages. Geithner broke the cardinal rule for Treasury secretaries. He lost his cool.
Geithner Resignation Calls May Increase as 2010 Election Nears U.S. Treasury Secretary Timothy Geithner, as part of a grilling on Capitol Hill yesterday, was asked by a Republican lawmaker to resign. It is a call he is likely to hear again and again as next year’s election campaign heats up. Earlier in the week, a Republican challenger for a U.S. Senate seat in Connecticut had demanded Geithner quit, lambasting him for being “cozy” with banks bailed out by the federal government. Two other Republicans have requested hearings into Geithner’s handling of the bailout of insurer American International Group Inc.
Nearly half of Americans rate Geithner performance "poor" Adding to lawmaker criticism of U.S. Treasury Secretary Timothy Geithner's performance is a new survey released on Friday showing 42 percent of Americans say he has done a "poor job" handling the credit crisis and federal bailout programs. The survey by Rasmussen Reports, a polling and electronic publishing firm, found that 20 percent rated Geithner's performance in these areas as "good" or "excellent", while 16 percent were not sure how he was performing. Twenty-two percent rated his performance as "fair".
Jamie Dimon seen as good fit for Treasury As support for Treasury Secretary Timothy Geithner wanes on Capitol Hill amid frustration with the Obama administration's handling of the economy, JPMorgan Chase CEO Jamie Dimon is emerging as a potential replacement. Sources tell The Post that a number of policy makers have begun mentioning Dimon as a successor to Geithner, whose standing in Washington has suffered because of the country's high unemployment rate, the weakness of the dollar, the slow pace of the recovery and the government's mounting deficit. Last week, Geithner faced a withering attack from some Republican members of the Joint Economic Committee, getting into a testy exchange with one congressman who at one point asked Geithner if he would step down.
Jamie Dimon for Treasury chief? Or will Geithner be Obama's Rumsfeld? During the reign of America's 43rd president, calls came in to replace Defense Secretary Donald Rumsfeld, who took the blame for the administration's failure to deliver a quick military victory in Iraq. But George W. Bush refused to give in to those who wanted Rumsfeld's head until after the 2006 midterm election. Now, as another midterm election approaches, I wonder whether President Obama is taking the same attitude toward Treasury Secretary Tim Geithner.
Why Geithner will stay One residual from Timothy Geithner’s rough confirmation back in January — “Turbo Tax Tim” and all that — is that his political position is probably a bit more precarious than that of the typical newbie treasury secretary. Not only has Geithner been a frequent target of late-night comedy shows, he’s the public face of the unpopular bank and automaker bailouts. High unemployment rate isn’t helping either.
Bernanke's future dims Once considered a shoo-in for reconfirmation, Ben Bernanke may not want to get too comfortable in his seat as Federal Reserve chairman. Sen. Chris Dodd (D-Conn.), chairman of the Senate Banking Committee, yesterday told a small group of reporters that Bernanke's Senate confirmation for a second term isn't guaranteed. "Not necessarily, not necessarily," he said in response to a question about whether Bernanke getting a second term was a foregone conclusion. "We'll see how members react." He went on to say, "I'm inclined to be supportive. I think he's done a far better job over the last couple of years than he did initially. . .but clearly I want to reserve final judgment."
Fed rage boils over on Capitol Hill Ben Bernanke will win confirmation to a second term as head of the central bank. But it won't be pretty. The movement in Congress to rein the Fed in is gaining steam. Federal Reserve Chairman Ben Bernanke has a tough road ahead. Very tough. Bernanke, whose four-year term expires in January, is certain to face a contentious Senate banking panel at his confirmation hearing, set for Dec. 3. He is also defending against the sharpest attack on Federal Reserve powers ever. The latest blow came last week, when a House panel overwhelmingly agreed to tack on to must-pass regulatory reform a proposal to dig into the Fed's books, despite attempts by Rep. Barney Frank, D-Mass., to make it less intrusive.
Keiser Report on RT: Markets, Finance, Scandal
600 Banks in Danger of Collapse Research firm Foresight Analytics says 600 U.S. banks risk failure thanks largely to soured real estate loans if they don't fix their balance sheets soon. That number represents four times the total of banks that already have failed in the past two years. Foresight Analytics estimates that about 2,200 of the country's 8,100 banks have taken risks well above the level that usually sparks greater attention from management and regulators, The New York Times reports. Those 2,200 institutions range from the smallest to major regional banks.
Most global banks are still unsafe, warns S&P Standard & Poor's has given warning that nearly all of the world's big banks lack sufficient capital to cover trading and investment exposure, risking further downgrades over the next 18 months unless they move swiftly to beef up their defences. Every single bank in Japan, the US, Germany, Spain, and Italy included in S&P's list of 45 global lenders fails the 8pc safety level under the agency's risk-adjusted capital (RAC) ratio. Most fall woefully short. The most vulnerable are Mizuho Financial (2.0), Citigroup (2.1), UBS (2.2), Sumitomo Mitsui (3.5), Mitsubishi (4.9), Allied Irish (5.0), DZ Deutsche Zentral (5.3), Danske Bank (5.4), BBVA (5.4), Bank of Ireland (6.2), Bank of America (5.8), Deutsche Bank (6.1), Caja de Ahorros Barcelona (6.2), and UniCredit (6.3). While some banks may look healthy under normal Tier 1 and leverage targets, critics claim these measures can be highly misleading since they fail to discriminate between high-risk and low-risk uses of leverage. The system failed to pick up the danger signals before the financial crisis. The supposedly moderate leverage of US banks in 2007 proved to be a spectacularly useless indicator.
Banks Scramble as Debt Comes Due Banks have spent the past year dealing with a mountain of bad assets. Now attention is turning to trillions of dollars of debt they have maturing over the next few years. Banks unable to maneuver around the challenge could be forced to refinance their debt at sharply higher costs. The situation was caused by banks engaging in cheap borrowing during the credit-market boom that began in the middle of the decade and lasted through 2007. As financial markets hit crisis mode, banks were propped up by government guarantees that enabled them to keep selling debt -- but with much shorter maturities.
The Second Wave of The Financial Tsunami This is the crux of the problem! The Irreconcilable Differences Some two decades ago, it was decided by the global financial elites that the framework for the global economy shall consist of:
A global derivative-based financial system, controlled by the US Federal Reserve Bank and its associate global banks in the developed countries.
The re-location from the West to the East in the production of goods, principally to China and India to "feed" the developed economies.
The entire system was built on a simple principle, that of a FED-controlled global reserve currency which will be the engine for growth for the global economy. It is essentially an imperialist economic principle.
IMF warns second bailout would 'threaten democracy' The public will not bail out the financial services sector for a second time if another global crisis blows up in four or five years time, the managing-director of the International Monetary Fund warned this morning. Dominique Strauss-Kahn told the CBI annual conference of business leaders that another huge call on public finances by the financial services sector would not be tolerated by the “man in the street” and could even threaten democracy. "Most advanced economies will not accept any more [bailouts]...The political reaction will be very strong, putting some democracies at risk," he told delegates. "I do believe that the financial sector needs to contribute both to the costs of the financial crisis and to reduce recourse to public funds in the future," he said.
Prechter: Everyone Is Bullish Now, So 2010 Will Be A Year Of Horrible Market Declines Chart guru Robert Prechter was on Fast Money this evening, reiterating his comments about extreme declines. He states that bullishness has gone from 2% to 90% (though we're not sure where that comes from), and that volume and breadth are down. Interestingly, when he was asked about gold, he demurred and said he was "very, very bullish" on the dollar.
Distressed Homeowners Ponder Whether to Stay or Go SCOTTSDALE, Ariz. -- Brian Gindlesperger says he has never been late on a mortgage payment and considers paying off his loan "the right thing to do." But as the value of his home continues to fall, he is starting to wonder whether paying his debt is the smartest thing to do. Four years ago, Mr. Gindlesperger, a police officer, and his wife Kelly, a real-estate agent, paid $650,000 for a four-bedroom house in this wealthy Phoenix suburb. They believed they were getting a bargain price for the area and made a 20% down payment, using a 30-year fixed-rate mortgage to pay the balance. To help pay for their eldest daughter's college costs, home improvements and a wedding, they took out a second mortgage against their home. Now they owe about $647,000 on the two mortgages.
15 Signs American Society Is Coming Apart at the Seams Are we nearing a tipping point as rapacious elites push a heavily armed populace too far? The economic elite have launched an attack on the U.S. public and society is unraveling at an increased rate. You may have missed it in the mainstream news media, but statistical societal indicators are reading red across the board. Let’s look at the top 15 statistics that prove we are under attack.
1 in 4 Borrowers Under Water The proportion of U.S. homeowners who owe more on their mortgages than the properties are worth has swelled to about 23%, threatening prospects for a sustained housing recovery. Nearly 10.7 million households had negative equity in their homes in the third quarter, according to First American CoreLogic, a real-estate information company based in Santa Ana, Calif. These so-called underwater mortgages pose a roadblock to a housing recovery because the properties are more likely to fall into bank foreclosure and get dumped into an already saturated market. Economists from J.P. Morgan Chase & Co. said Monday they didn't expect U.S. home prices to hit bottom until early 2011, citing the prospect of oversupply
Bullish gold gets ready for big jump Bull markets are marked by three distinct stages, and when gold climbed above $1,000, it only entered its second stage. In other words, gold has much further to climb in the months and years ahead. So don’t be misled by what you may hear or read in the mainstream media and even much of the alternative media. After all, how many commentators have correctly identified gold’s bull market, now a decade old?
Gold eases after hitting $1174 overnight Gold prices eased in Asian trade Tuesday after creating yet another record overnight as it surged above $1174 an ounce, an all-time high. Spot gold was seen trading at $1,159.78 an ounce at 11.30 a.m Singapore time while December-delivery gold on the Comex division was at $1,160 an ounce at the same time. Precious yellow metal dropped for the first time in three days in Asia as some investors sold the metal to lock in gains after its rally to a record and as the dollar advanced.
Gold in the Limelight by Mary Anne and Pamela Aden Gold is soaring, hitting new record highs almost daily. This C rise is going strong. Our initial $1200 target level for this year's rise has nearly been reached, but gold could go higher. This is good news for all of us who have been invested in gold for the past eight years. But even for those of you who invested in more recent times, gold has been a good and profitable investment. We feel strongly that this will continue in the months and years ahead. And there are many valid reasons why.
Gold Jumps to Fresh Record High Gold surged to a record Monday, as investors sought insurance against a sliding dollar and the rising risk of inflationary bubbles in other assets. With such concerns persisting, the roster of influential hedge fund investors snapping up gold is growing and now includes Paul Tudor Jones, John Paulson, David Einhorn and Kyle Bass "The wall of money floating around in the financial system continues to benefit commodities as a way of diversifying portfolios and in order to shield investments from a non-negligible risk of a U.S. debt and currency crisis," said Ole Hansen, manager for futures and fixed Income at Saxo Bank
Gold hits record above $1,173 Precious metal climbs as investors try to guard against depreciation of paper currencies Gold scaled a record high at $1,173.50 (U.S.) an ounce Monday as a weaker dollar boosted buying in gold as a hedge against depreciation of paper currencies. Expectations of prolonged low U.S. interest rates also supported bullion's investment demand. The precious metal has rallied to a series of record highs since news that India bought 200 tonnes of gold from the IMF broke in early November. Since then a number of other central banks have announced they are buying gold as well.
Gold strikes all-time high Gold prices hit an all-time high on Monday, extending last week’s near-3 per cent rise, amid continued investor concern about US dollar weakness. The surge in bullion prices was mirrored by other precious metals, such as silver, and other commodities, including copper and agriculture raw materials. Spot gold in London surged to an intraday high of $1,170.55 per troy ounce, up nearly 1.8 per cent from Friday’s last quote in New York. The dollar fell close to $1.5 against the euro. Michael Widner, a metals strategist at BofA-Merrill Lynch in London, said gold prices could hit $1,500 an ounce in the next 18 months supported by further dollar weakness and price increases in other commodities.
GOLD: A "CHANNEL BUSTER" OR A RUNAWAY PARABOLA? . . . . The uptrend in gold is now approaching the moment of truth. The gold price is nearly 5% above the upper boundary of the uptrend channel breakout point and approaching the point where it must either pull back to test support at the channel boundary (previous resistance, new support) or else we’ll have a “channel buster failure” on our hands. In this case the “failure” would be to the upside and would tell us that buying power is simply too strong and persistent for investors to expect a meaningful pullback. The level of hedge fund money chasing gold would be deemed too powerful at the present to afford those who missed the last breakout a convenient entry point.
Gold hits record above $1,170/oz as dollar slides Gold hit a record high at $1,170.55 an ounce on Monday as dollar weakness pushed the metal through key technical resistance levels, fuelling momentum buying after the metal's sharp run higher earlier this month. Spot gold was bid at $1,168.90 an ounce at 8:14 a.m. EST (1418 GMT), against $1,148.20 late in New York on Friday. U.S. gold futures for December delivery on the COMEX division of the New York Mercantile Exchange rose $22.50 to $1,169.30 an ounce. "Gold has a lot of momentum. It is trading off the back of the dollar, and at the moment it seems to be outperforming that trade, as are a lot of other commodities," said Daniel Major, an analyst at RBS Global Banking & Markets. The precious metal has rallied to a series of record highs since news that India bought 200 tons of gold from the IMF broke in early November. Since then a number of other central banks have announced they too are buying gold.
Gold price is booming, touches $ 1,166 per ounce Gold price is booming. As markets opened across the globe on Monday, gold prices hit a new historic record of $ 1,166.45 an ounce in Europe, boosted by weakening dollar. Bullish over the big weekly opening for gold, bullion analysts are now predicting that gold will touch $1,200 per ounce this week. So, the real gold rush is on. What is driving up the gold price? Central bank purchases, dollar decline, currency fluctuations, stock markets uncertainties, collapse of banks in the United States, the high-play of deflation and inflation in several countries…The reason are several.
Gold to hit $1650 next year: Jim Sinclair Will the gold price hit $2000 mark in 2010? This is the question many market analysts are asking. According to Jim Sinclair, chairman at Tanzanian Royalty Exploration, the price of yellow metal could reach $1650 per ounce by the end of 2010 and moving into the beginning of 2011. But, he admits that given recent happenings this could be a bit of a low estimate. Gold is a contra to the US dollar and recent statements out of the Federal Reserve that interest rates will remain extremely low until 2012 is really a go ahead single for gold to continue to perform as it has until at least 2012.
Is it gold boom or peak gold? Have we hit the peak of world Gold Mining production already, and more importantly, if we have, would it make any difference to the gold price? Probably not, reckons Tom Winmill, portfolio manager of the Midas Fund (MIDSX) since 2002. His fund has gained 82% so far this year, but he's more bullish on platinum than gold – and silver, as he tells Hard Assets Investor below – may be set for a spiky correction...
Gold hits fresh high as dollar resumes its slide Gold powered to another high on Monday and stockmarkets challenged their best levels of the year after a sharp move lower in the dollar prompted traders to pile wholesale into riskier assets. With the greenback threatening to break through the bottom of its recent tight trading range, investors pushed the precious metal to a fresh peak of $1,173.50. It was later up 1.6 per cent at $1,165. Raised tensions between Iran and the west over the latter’s nuclear programme were also seen encouraging traders to buy bullion. The fall in the dollar below the psychologically significant 75.0 level on a trade-weighted basis was a cue for investors to dive back into the strategy that has driven all before it over recent months. The dollar carry trade, as it is called, supposedly sees investors sell the US currency to fund the purchase of assets such as equities and commodities
Gold Krugerrands Run Out Tens of millions of Krugerrands have been struck since they were introduced in 1967. They are not rare. If demand for physical gold is so strong (and the World Gold Council last week reported that global third quarter demand was 15 percent higher than the second quarter) that they are no longer available, we could quickly see a domino effect where other gold and silver bullion-priced products also become sold out.
Marc Faber: Gold Is Never Going Below $1000 An Ounce In a recent interview, investment guru Marc Faber explained that he doesn't think gold is ever going below $1000 per ounce. From Faber: Basically we had a good move in gold whereby we had fluctuated for two-years between USD 800 per ounce and USD 1000 per ounce and now we've broken through the USD 1000 per ounce level with quite conviction and heavy volume. I believe that whereas in the past the USD 1000 per ounce level was kind of a resistance level, now it becomes a support level. I don't think that you'll see gold below a USD 1000 per ounce probably ever again So I’m actually quite positive. Maybe gold at this level is a better buy than it was at USD 300 per ounce in 2001.
Bullion buyers see pot of gold in higher deficits, loose money But skeptics say they expect Fed to act first; deficits don't always hit dollar Rising fiscal deficits, mushrooming money supply, a return to 1970s-era inflation - that's a recipe for gold to keep notching new record highs, even doubling in value, say the new gold bugs. But there's at least one variable that could upend this investment thesis, and the fortunes of its holders: The Federal Reserve's ability to sop up much of the excess money floating on bank ledgers before it gets into the hands of businesses and consumers, spurring high inflation and a further drop in the dollar.
A Mad Rush as Gold Bugs Get the Boot Fleets of armored trucks piled with gold bars and coins have been streaming out of midtown Manhattan in one unexpected consequence of the gold craze. Amid gold's rise -- it has gained 32% this year and reached a record on Monday -- investors have been loading up on bullion and coins. One big problem now is where to store it. The solution from HSBC, owner of one of the biggest vaults in the U.S.: somewhere else. HSBC has told retail clients to remove their small holdings from its fortress beneath its tower on New York City's Fifth Avenue. The bank has decided retail customers aren't profitable enough and is demanding those clients remove their gold to make room for more lucrative institutional customers.
'Gold is a history and constant' Stock market bulls never read history, as in anything from the day before yesterday, and least of all the pink pages' price/earnings table today. So the library shelves marked "332" under the Dewey Decimal system are typically left free for bears and gold investors to roam. And glancing at how long the stock-bull of 1982-2000 ran, you can see why.
New gold bugs making gold investments mainstream Tudor, Paulson, Greenlight, Hayman bring precious metal in from the fringe Gold has long been favored by a fringe of the investment world, but this year some of the world's leading hedge-fund managers have loaded up on the precious metal amid concern government efforts to avoid another Great Depression that could undermine major currencies and fuel rampant inflation. "I have never been a gold bug," Paul Tudor Jones, chairman of hedge-fund giant Tudor Investment Corp., wrote in an Oct. 15 letter to investors. "It is just an asset that, like everything else in life, has its time and place. And now is that time." Tudor has been building positions in gold and other precious metals in recent months and they now represent the firm's largest commodities exposure, he noted.
Gold hits new high on weak dollar, Iran Gold futures rallied Monday for a seventh session, hitting a new high above $1,170 an ounce as the dollar fell and war games in Iran boosted global tensions, increasing gold's appeal as a safe-haven investment. Gold futures have already seen a seven-day winning streak ended on Nov. 11. The metal has only recorded one losing session this month. "It is an unbelievable rally," said Darin Newsom, a senior analyst at Telvent DTN, adding that buying is coming from inflation hedge and safe-haven buying due to continued global economic concerns.
Ignore Buffett – gold’s time has come There are many reasons why sensible columnists prefer to steer clear of writing about gold. One is that you get the weirdest responses. Twenty years ago they would arrive in funny shaped envelopes, often in green ink, often from individuals with extraordinarily peculiar views about the world. These days the risk is that anything you say will be instantly picked up, recycled and commented on in a thousand online blogs. Not all of that community are interested in constructive dialogue. Gold retains its capacity to excite the most extreme polarised views.
Gold, Silver and Oil Commodities Out Perform their Equities Since the market crash in late 2008 we have seen investors favor quality stocks that pay dividends and have steady earnings. Fast growth companies and equities with physical resources like commodities have also done well. Let’s examine the monthly charts of gold, silver, oil and natural gas – and observe how they have traded in comparison to their mining equities
Gold Coin Premiums Jump Again Gold topped $1,150 for the first time in history. Both silver and platinum have outperformed gold, playing a little catch-up. There has been a positive influence on them because of news about fake gold bars of plated tungsten floating around the world. If you follow my friend Pat Heller’s articles you would know this to be old news. Nevertheless, it is circulating widely and having an effect. Might health care reform be pushing gold higher? The world looks at it and sees another trillion new greenbacks over the next 10 years.
Is Gold in a Bubble? Gold has recently broken out to new highs, topping $1150/ounce. The financial media doesn’t trust this move. Widespread commentary has it that gold is in a bubble. Google reports numerous hits for a search on "gold bubble nov 2009." Financial writer and frequent television guest Dennis Gartman agrees: "It is a gold bubble and to say otherwise it’d be naïve," Gartman said. He called the trade on the precious metal: "mind boggling and unbelievably crowded," but also said he is currently long – or betting gold will go higher.
Sliding dollar drives gold to record high The dollar slid against the euro on Monday on concerns that US authorities may prolong emergency stimulus measures, helping push the price of gold to a record high above 1,170 dollars, analysts said. In late morning trading here, the euro climbed to 1.4969 dollars from 1.4860 late in New York on Friday. Against the Japanese currency, the dollar strengthened meanwhile to 89.15 yen from 88.92 yen reached late on Friday. Gold hit 1,174 dollars an ounce in late London trading. It later pulled back to 1,169.50 dollars. "Gold reached new highs as the dollar continued its decline," said ODL Markets analysts in a note to clients.
Gold continues to shine with $1200 the next price target Despite a lack of any major news, the price of gold continued upwards last week and, at this stage, shows little sign of stopping During the last week gold make another historic high, touching US$1153 on Wednesday. Once again, what was interesting was that the upward momentum continued despite the fact that there was no real news in the market. Over the last two weeks the price of gold has moved upwards in a series of higher highs and higher lows which I pointed out in my previous newsletter. While I thought it may find some resistance at the US$1125 level, the price breached this level without much difficulty. The next level of resistance seems to be around the US$1150 level, but if the current momentum continues, after a short period of consolidation, this level could be broken and gold could easily hit US$1200. The price of crude bounced between US$80 and US$77 and the EUR/USD see-sawed between 1.500 and 1.4800.
Gold: the haves and the have-nots Possible "bubble" indicators do nothing to dampen investor demand for selected stocks. As dollar gold bullion continues to make fresh records, so investors still chase certain identifiable individual listed gold stock prices to fresh records, and, at the same time, virtually ignore a fairly long list of names that have been effectively binned for the meantime. At the fundamental level, there are increasing calls to resist the high emotion saturating gold bullion, on the basis of at least some "bubble" indicators floating about. The dollar price has increased from around US$250 over an extended period in and around 2000 to levels now approaching US$1,200 an ounce.
With Gold Completely Out Of Whack, Silver Looks Better By The Day Recent third quarter data from the World Gold Council showed that while gold supply fell 5%, demand (inclusive of investors) fell a much larger 34%. Yet despite this negative disparity between supply and demand change, gold prices rose during the period. Hard Assets Investor: Year-over-year demand has dropped in each of gold's three market segments: for investments, off 46 percent; for jewelry, down 30 percent; and for industrial use, off 11 percent. Gold prices, however, have risen universally. In key markets such as India and Turkey, gold prices spiked 15 percent and 33 percent, respectively. In dollar terms, gold rose 12 percent year-over-year, while euro prices rose 11 percent.
Are new hedge fund gold bugs getting in at the top? A four-fold surge this decade may not provide the best entry point Top hedge fund managers including Paul Tudor Jones and David Einhorn have built big gold positions this year on concern about inflation. But what if the price of the precious metal already reflects this worrying outlook? Gold prices have surged roughly four-fold this decade. On Monday, the most active New York gold contract charted a new high of $1,174 an ounce. Read more on daily gold prices. "Anytime you're getting into an investment after it's already up four times from its low point, that's not exactly great market timing," said Ed Yardeni, president of Yardeni Research. "All contrary indicators suggest that now is not the time to buy gold."
China, Russia to build up gold reserves A prominent official at ETF Securities says the value of making a gold investment is being underlined by the ever-increasing rate of central-bank buying at present. The Reserve Bank of India announced recently that it is set to purchase 200 tonnes of the yellow metal from the International Monetary Fund amid the US dollar's current struggles. Nigel Phelan, the Australia and New Zealand director at the futures firm, has explained that other banks will follow suit as fears persist over the future of the greenback, which shares an inverse relationship with gold.
Why Silver’s Breakout Could Bring It Out of Gold’s Shadow From a speculator's perspective, the total return potential now in silver is probably greater than gold. On a percentage basis, the price of silver can easily outpace gold over the next few years as both metals hit record highs after adjusting for inflation since 1980. Silver might achieve that goal far more quickly than gold. But as gold reaches over $1,145 this week (+10% in November) there's one missing ingredient required to legitimize this historic bull market; silver must exceed its March 2008 high of $20.78 an ounce. Spot silver trades at $18.71 an ounce this morning in New York.
Fed Face-Off: Peter Schiff Goes Toe-to-Toe With Alan Blinder, Jim Bullard Peter Schiff's views as an author, investor and free market idealist are no secret: Abolish the Fed, buy gold and avoid the dollar. With that in mind, Sunday night was something of a dream come true for the President of Euro Pacific Capital. Thanks To Princeton University's Business Today, Schiff went head to head in New York City with St. Louis Federal Reserve President James Bullard and former Federal Reserve Vice Chairman Alan Blinder in a panel titled, "Challenges of the Global Slowdown: Redefining Government Regulation." It might as well have been called "Schiff Blames the Fed for the Financial Crisis."
Risk Assets Back in Favor on Prospects of More Fed Liquidity After stepping on the brakes last week, investors jumped back into riskier assets Monday as they bet the U.S. will keep interest rates low for even longer than anticipated. Heartened by a Federal Reserve official who raised the prospect for continued liquidity infusions and then by fresh signs of a U.S. housing recovery, investors piled into stocks and commodities, with gold hitting a new record high. Meanwhile, they dumped the dollar, which has been made unattractive by the Fed's highly accommodative policy and has consistently traded in a negative correlation with stocks and commodities this year.
The US Dollar Is In a Secular Bear Market and Will Remain in One Until... Contrarians might take some cheer from dollar bearishness, but one needs to be aware that not everything that is fundamental and recognizable is overdone and wrong. Markets do overrun their trends, especially on the short term and by amateur speculators, setting up very nice opportunities for the professional market makers. The attractiveness of being a 'contrarian' is that when you are right you can set yourself up as superior to those who were wrong, distinguishing yourself from the mere mortals, and feel the euphoria of God's favored hand.
Debt Time Bomb Ticking? Whether debt concerns should envelop serious fear, with Robert Reich, former Labor Secretary and Stephen Moore, The Wall Street Journal advisory board.
Dollar, Yen Rise as Traders Cut Positions Before U.S. Holiday The dollar and yen rose, reversing earlier losses, as traders pulled out of bets against the two funding currencies before the U.S. Thanksgiving holiday season starts. The dollar also rose against 14 out of 16 most-active currencies tracked by Bloomberg before a release today of revised gross domestic product data forecast to show the U.S. economy expanded at a slower than initially expected pace in the third quarter. The yen advanced against 15 of 16 counterparts as local stocks slumped, reviving demand for the Japanese currency as a refuge from risk aversion.
Dollar Slump Persisting as Top Analysts See No Bottom The most accurate dollar forecasters predict the world’s reserve currency will continue sliding even when the Federal Reserve begins to raise interest rates, which policy makers say is an “extended period” away. Standard Chartered Plc, Aletti Gestielle SGR, HSBC Holdings Plc and Scotia Capital Inc. say the dollar will depreciate as much as 6.4 percent versus the euro. About $12 trillion of fiscal and monetary stimulus, the world’s lowest borrowing costs and a record $4 trillion of government bond sales between 2009 and 2010 will weigh on the currency, they said. So will the nation’s 10.2 percent unemployment rate and signs that the economic recovery may falter, they said.
Banks Scramble as Debt Comes Due Banks have spent the past year dealing with a mountain of bad assets. Now attention is turning to trillions of dollars of debt they have maturing over the next few years. Banks unable to maneuver around the challenge could be forced to refinance their debt at sharply higher costs. The situation was caused by banks engaging in cheap borrowing during the credit-market boom that began in the middle of the decade and lasted through 2007. As financial markets hit crisis mode, banks were propped up by government guarantees that enabled them to keep selling debt -- but with much shorter maturities.
Ron Paul: I'd Rather Congress Run Monetary Policy Than The Fed Ron Paul responds to criticism that his attempts to get transparency from the Fed essentially amount to putting Congress in control of U.S. monetary policy and stripping the Fed of independence. Joe Kernen: 'Look at what Congress has done to American fiscal policy, now you want them to run monetary policy, that sounds insane' Ron Paul: 'If you want to be a strict constitutionalist, there's a lot more defense of having Congress involved with defending the value of the currency rather than delivering this responsibility over to the Fed'
"No Right to Know": A Wall Street Financial Site's Attack on Congress and Ron Paul Wall Street is an economic extension of the big banks, which are the government-protected segment of a government-created cartel: the national bank system. The government controls entry into this cartel, thus offering above-market rates of return to those who are approved. The primary enforcer of this cartel is the Federal Reserve System. The FED provides the fiat money that in turn provides banks with reserves to lend. It also serves as the lender of last resort -- officially, to the government; operationally, to the banks. This keeps the largest banks from having to face free market competition.
Audit the Fed Attached as an Amendment I was pleased last week when we won a vote in the Financial Services Committee to include language from the Audit the Fed bill HR1207 in the upcoming financial regulatory reform bill. As it stands now, if HR 3996 passes, because of this action, the Federal Reserve’s entire balance sheet will be opened up to a GAO audit. We will at last have a chance to find out what happened to the trillions of dollars the Fed has been giving out.
Why Do We Have To Audit the Fed? Congressman Alan Grayson
Why Niall Ferguson is still bearish ‘Having narrowly avoided a Great Depression by using massive fiscal and monetary stimulus, we are now in uncharted waters,' Harvard University historian says . . . . The most we can say, drawing on what we know about past financial crises, is that over a five-year time frame, the dollar is likely to weaken some more, inflation is likely to pick up after another year or two of pretty low prices and long-term interest rates could move up sooner than that, in anticipation of a revival of inflation. Add, say, 50 to150 basis points to the U.S. federal government's 10-year Treasury yield and the effect could be quite painful for the economy as a whole.
Citi: The Commodity Collapse Could Be "Subprime Part II" In the bank's latest edition of its Monday Mining Minutes, Citi lays out a scenario which it calls the "Nightmare on Commodity Street." So here’s the nightmare scenario, which we hope will not happen: Thousands of very smart speculators have accumulated the biggest ever speculative physical raw material positions ever witnessed in the belief that either the dollar will collapse or an ongoing global ‘Supercycle’ will shake off the effects of the credit crunch and resume business as usual. They are funded in this venture by some of the lowest interest rates on record. What are the threats to their thesis?.
Fed Said to Ask Banks to Submit Plans to Repay TARP The Federal Reserve asked nine of the U.S. banks that were part of this year’s stress tests to submit plans for repaying the government’s capital injections, a person familiar with the situation said. The central bank this month asked Bank of America Corp. and eight other banks to give plans including a timetable, said the person, speaking on condition of anonymity. The firms may have the option to repay the Troubled Asset Relief Program funds soon if they’ve been able to raise common equity recently and would continue to exceed capital buffers set in the stress tests, the person said.
Commercial Property Prices to Fall Up to 55% Commercial real estate prices may fall as much as 55 percent from October 2007’s peak and the recovery will be slow amid rising unemployment and tepid consumer spending, Moody’s Investors Service said. Falling prices are likely to spur further ratings cuts for subordinate commercial mortgage-backed securities sold from 2006 to 2008, Moody’s said in a report today. Ratings on the most senior bonds are likely to remain at current levels.
What Happens When a Carry Trade Blows Up? As I’ve been pounding the table for the last several months, the markets have been operating based on an “inflation” trade mentality. By this, I mean that we’re in a “Dollar down/ everything else up” environment. This is to be expected. Fed Chairman Ben Bernanke has been doing everything he can to re-inflate the markets, hoping he can counteract the deflationary impact of the Housing Crash/ Credit Bubble bursting. To do this, he’s made the Dollar unattractive on a yield basis, cutting interest rates to between 0% and 0.25% (effectively making the Dollar have NO yield). He’s also made the Dollar unattractive on a momentum basis by printing $900+ billion, expanding the Fed’s balance sheet from $800 billion to $2.2 trillion, and other anti-Dollar measures
Fed Under Fire Parsing Ron Paul's bill to tighten oversight on the Federal Reserve, with Randall Kroszner, former Federal Reserve Board governor & U of Chicago professor, Booth School of Business, and CNBC's Steve Liesman.
Housing, The Dollar and Bonds If this is the recovery, I would hate to see what a recession looks like!! Housing data released in the last week showed a still lousy housing market – from home builder confidence index that declined by a point to remain well under 20 (50 is “balanced”). Even traffic for new homes was near record lows. Housing starts and permits (a leading indicator of future starts ) both fell again. The Mortgage Bankers report of home purchases fell to a new low and are still down 15% vs. year ago levels. Manufacturing, a mini-bastion of relative health, saw a modest rise in capacity usage, although output was stable and inventories fell. The much hoped for inventory-rebuilding process remains elusively somewhere in the future. On top of all that, Treasury Secretary Geithner defended the administrations actions while Fed Chief Bernanke made a rare comment on the declining dollar.
Is Social Security really 'going broke'? Q: We keep hearing "privatizing social security" or "letting young people invest in private funds". What does this really mean? My understanding is that Social Security is a pay as you go program and if you divert those funds that we'll have to borrow to pay retirees today? Can you please clarify this — Linda B., Amelia, Ohio A: Despite lots of noise, there’s been very little clarity in the current debate surrounding the federal retirement program that Americans have relied on since it was set up more than 65 years ago. And the debate is really two debates. The first centers on the question of whether Social Security is “going broke.” The second is over the more ideological question: Who should be managing your retirement savings, you or Uncle Sam?
Obama says boosting jobs is a top priority President Barack Obama assured Americans on Monday that boosting jobs was a top priority, but gave no specifics about how to meet this goal that some economists say warrants more government spending. The White House said separately that all "sensible and reasonable measures" would be considered to encourage employment, but also stressed that it must be balanced with the need for the United States to tackle record budget deficits.
Jobs Bill on the Way? Discussing President Obama's concern over unemployment, with James Pethokoukis, Reuters Money & Politics columnist; David Goodfriend former Clinton White House staffer; Robert Reich, former Labor Secretary and Stephen Moore, The Wall Street Journal advisory board.
Growing number of US homeowners are at risk of losing their property Data from the Mortgage Bankers Association shows almost one in eleven US homeowners face repossession Almost one in eleven Americans is at imminent risk of losing their home, as the housing crash continues to claim thousands of victims, more than three years after prices began to fall. Data from the Mortgage Bankers Association show that almost 5% of all American homeowners are already in the process of having their properties repossessed, while another 4.5% are at least 90 days in arrears with their mortgage repayments. In total, that means more than 9% – almost one in eleven – are on the brink of being forced to hand back their keys, on top of the many hundreds of thousands who have had their homes repossessed since the crisis began.
Economic Crisis Is Getting Bloody -- Violent Deaths Are Now Following Evictions, Foreclosures and Job Losses Despite ever rosier economic predictions and a surging stock market, the body count from the economic crisis is destined only to grow in the weeks and months ahead. In 2007, Jason Rodriguez was fired from his position at an Orlando, Florida engineering firm and ended up taking a job as a "sandwich artist" at a Subway restaurant. His salary was cut nearly in half and his debts mounted until, last May, he filed for bankruptcy, listing his assets at just over $4,600 and his liabilities at nearly $90,000. Although he lived only 30 minutes away, according to his former mother-in-law, America Holloway, Rodriguez barely saw his son. When the boy asked why his father didn't visit, Holloway said Rodriguez told him: "'Because I don't have any money. I don't have a job. I don't have anything to eat. When things get better, I'll come see you.'"
Wall St. Wins, Taxpayers Lose on Home Loans Investment funds are buying billions of dollars' worth of home loans discounted from the loans' original value and reducing the size of the loans by refinancing them through lenders that work with government agencies, The New York Times reports. While homeowners save money and the funds pocket sizeable profits, the risks involved are ultimately transferred to taxpayers. For example, a fund might buy a $100 million block of mortgages from a distressed bank for $40 million.
Single-Family Inventories Remain Oversupplied by 900,000 Units Inventory of single-family homes fell 60,000 units in October. They remain oversupplied by 908,000 units when compared to the long-run average. The total of existing units for sale equals 3.57 million, according to the National Association of Realtors (NAR) in its release today of October data. The long-run average is 2.66 million. The inventory fell by 1.65% from September to October. At that pace of reduction it will take 15 months to restore inventory to its average. “Many buyers have been rushing to beat the deadline for the first-time buyer tax credit that was scheduled to expire at the end of this month, and similarly robust sales may be occurring in November,” said NAR chief economist Lawrence Yun, in a release titled “Existing-Home Sales Record Another Big Gain, Inventories Continue to Shrink.
"Should Come as No Shock to Anyone" The big picture is this. There is most probably a second wave of mortgage defaults in the immediate future as a result of Alt-A and Option-ARM resets. Yet our capacity to deal with these losses has already been strained by the first round that largely ended in March... And let's be honest about it. Hybrid ARMs were never made based on the assumption that the borrowers would be able to make the payment once the loan reset. They were designed as two or three year bullets' ... with the assumption that home appreciation would allow the borrower to refinance at, or before, reset. Given current conditions in the housing market, this business model is no longer viable, which should come as no shock to anyone."
On the Edge with Max Keiser
On the Edge with Max Keiser . . . and Mish Shedlock - 20 November 2009 - (2/3)
On the Edge with Max Keiser . . . and Mish Shedlock - 20 November 2009 (3/3)
China Banking Regulator Gets Tough on Capital Rules China's banking regulator issued a stern warning to banks to strictly comply with capital requirements or face sanctions, the clearest sign yet Beijing is worried about possible risks building in the country's financial system after a year of blow-out lending. Banks that fail to comply by the end of the year with capital adequacy requirements—the amount of capital they must hold against their loans—could be punished with limits on market access, overseas investments and new branches, the China Banking Regulatory Commission said in a statement on its Web site. Such sanctions already exist, but have rarely been enforced.
US to go to Copenhagen summit with proposed target on carbon emissions The White House said today it would go to the Copenhagen climate change summit with a proposed target for reducing greenhouse gas emissions after facing international pressure to commit to stronger action on climate change. An administration official told reporters that President Barack Obama would propose the targets before the climate meeting, which is less than three weeks away. The move removes the biggest obstacle to a political deal at Copenhagen.
Glenn Beck on "ClimateGate" Man-Made Global Warming Climate Scam-Actual Proven Conspiracy 11-23-09
Former CBO Chief: Dump Healthcare Bills Former Congressional Budget Director Douglas Holtz-Eakin says the biggest problem facing the nation now is not healthcare reform or even that the United States is engaged in fighting two wars. It's the looming budget deficit. "Our national debt is projected to stand at $17.1 trillion 10 years from now, or over $50,000 per American," Holtz-Eakin writes in The Wall Street Journal.
THE COLLAPSING OBAMA PRESIDENCY EVENTS SOON TO UNFOLD The Presidency of Barack H. Obama is deteriorating at an alarming rate—and few in the so-called Mainstream Media are yet taking notice. Job losses and a declining confidence in his leadership on the economy have now bled into all other aspects of his Presidency. Let us examine a few: 1) President Obama and Attorney General Eric Holder’s decision to try the 9/11 terrorists in criminal court in New York City—conveniently announced while the President was in Asia and as far away from the controversy as possible—will lead to events and sub-plots that boggle the mind and show why over-educated, Ivy League Liberals don‘t understand the real world. This will clearly be the biggest, most covered-trial in American history. As such, all sorts of mischief—both inside and outside the courtroom—are likely.
Inhofe Says He Will Call for Investigation on "Climategate"
TALIBAN STILL WORKING FOR THE CIA? ALL WARS ARE CHARADES As President Obama ponders whether to send more troops to Afghanistan, there is mounting evidence the Taliban is supported by the CIA. If correct, the Afghan war is a charade with a hidden agenda. First, we have many reports that unmarked helicopters are ferrying the Taliban to targets, and relieving them when cornered. "Just when the police and army managed to surround the Taliban in a village of Qala-e-Zaal district, we saw helicopters land with support teams," an Afghan soldier said. "They managed to rescue their friends from our encirclement, and even to inflict defeat on the Afghan National Army."
Escaping Taliban May Widen War as Pakistan Pays Cost Taliban fleeing a Pakistani offensive are regrouping in the country’s northwest, threatening to spread and prolong a conflict that has strained the nation’s economy and may hamper efforts to attract foreign investment. While Pakistan says its month-old offensive in South Waziristan has destroyed the largest Taliban sanctuary, some militants are falling back to Orakzai, a mountain region less than 16 kilometers (10 miles) south of Peshawar, the capital of North West Frontier Province, said Talat Masood, an independent military analyst in Islamabad.
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Commerce Bank of Southwest Florida Fails; 124th of 2009 State regulators shuttered Commerce Bank of Southwest Florida in Fort Myers, Fla., Friday night, bringing the number of failures so far this year to 124. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Central Bank, Stillwater, Minnesota, to assume all of the deposits of Commerce Bank of Southwest Florida. Customers of the failed bank, which will reopen on Monday as a branch of Central Bank, can access their money over the weekend by writing checks or using ATMs or debit cards. Checks will continue to be processed, and borrowers should make mortgage and loan payments as usual.
Federal Government Faces Balloon in Debt Payments The United States government is financing its more than trillion-dollar-a-year borrowing with i.o.u.’s on terms that seem too good to be true. But that happy situation, aided by ultralow interest rates, may not last much longer. Treasury officials now face a trifecta of headaches: a mountain of new debt, a balloon of short-term borrowings that come due in the months ahead, and interest rates that are sure to climb back to normal as soon as the Federal Reserve decides that the emergency has passed.
And Day After Day, the Debt Builds Up Okay! We’ll say what we’ve been thinking… …that our children are going to spit on our graves! First, Americans made a colossal mistake in the ’90s and the ’00s. They partied…they spent…they borrowed…running up huge debts in the private sector. Most kids could forget about inheriting anything from their parents; the geezers spent it years ago. The boomer generation also made a mess of the biggest success story in world history – the United States of America. In the ’60s and ’70s – when boomers matured and began to take over – the US was still on top of the world. It had a positive trade balance…huge savings…massive investments abroad…and the strongest companies in the world.
Wave of Debt Payments Facing U.S. Government The United States government is financing its more than trillion-dollar-a-year borrowing with i.o.u.’s on terms that seem too good to be true. But that happy situation, aided by ultralow interest rates, may not last much longer. Treasury officials now face a trifecta of headaches: a mountain of new debt, a balloon of short-term borrowings that come due in the months ahead, and interest rates that are sure to climb back to normal as soon as the Federal Reserve decides that the emergency has passed.
Gerald Celente The Greatest Depression of 2012
Are We On The Verge Of Total Global Economic Collapse? Don't laugh. The french firm Societe Generale thinks so. [see archives for Nov 19th for article] The brokerage firm has put the fear of God in clients recently by predicting that developed economies and markets are going to collapse under a monster debt load and that gold is going to soar to $6,000 an ounce. Fortunately, not everyone feels that way. Many on Wall Street, in fact, have suddenly gotten quite bullish after missing a lot of the extraordinary 65% rally we've had since the lows of March. Hopefully, these folks--the "V-shaped recovery" crowd--are right, and the bad news of the last couple of years will soon be a distant memory.
Obama asks for patience on economy President Barack Obama on Saturday urged Americans to show patience over the economy and argued that his just-concluded Asia trip was critical for U.S. exports, countering criticism he had returned empty-handed. With unemployment at a generation high of 10.2 percent and once-lofty popularity ratings down, Obama said a December White House forum will leave no stone unturned in the hunt for jobs. "Even though it will take time, I can promise you this: we are moving in the right direction; that the steps we are taking are helping," Obama said in his weekly address, amid signs that the public is getting impatient for results.
Weighing Jobs and Deficit White House Is Unenthusiastic on Legislation That Would Raise Government Debt The White House is lukewarm about proposals by congressional Democrats to introduce broad legislation to create jobs, instead favoring targeted measures that would be less likely to inflate the deficit, administration officials said. There is as yet no agreement within the White House or in Congress on how to try to curb the U.S. jobless rate. But the differences in opinion suggest that rifts could emerge among Democrats as they wrestle with how to beat back the highest unemployment rate in a generation.
Early Data Suggest Suicides Are Rising Reports Indicate 2008 Uptick Is Similar to Those Seen in Past Recessions, Though Cause Is Unclear Early signs suggest the number of suicides in the U.S. crept up during the worst recession in decades, according to a Wall Street Journal survey of states that account for about 40% of the U.S. population. Available data, still incomplete, suggest that this recession, like past ones, coincided with an uptick in suicides. The data from 19 states find an increase in suicides in the recessionary year of 2008 from 2007. Those states historically account for about half of annual suicides in the U.S. Calls to suicide hotlines are rising. And suicides in the workplace and the military -- a small sliver all of self-inflicted deaths -- were up in 2008.
Dollar Falls on Speculation Fed Will Maintain Stimulus Measures The dollar fell for the first time in three days against the euro on speculation the Federal Reserve will keep its stimulus measures in place and ensure interest rates remain low. The greenback slid against 14 of its 16 major counterparts after the Wall Street Journal reported James Bullard, president of the U.S. Fed Bank of St. Louis, said he supported extending the Fed’s purchases of mortgage-backed securities beyond the first quarter of next year. The yen and the dollar weakened as commodities and Asian stocks advanced, boosting demand for higher-yielding assets.
Deficits and loose money should lead to higher gold Rising fiscal deficits, mushrooming money supply, a return to 1970s-era inflation - that's a recipe for gold to keep notching new record highs, even doubling in value, say the new gold bugs. But there's at least one variable that could upend this investment thesis, and the fortunes of its holders: The Federal Reserve's ability to sop up much of the excess money floating on bank ledgers before it gets into the hands of businesses and consumers, spurring high inflation and a further drop in the dollar. It's a tricky task but one that a camp of economists and investors think the Fed can achieve. If policymakers under the direction of Fed chief Ben Bernanke succeed, a big reason to buy gold evaporates.
Is Gold Set To Hit $1,200 Within 24 Hours? Early spot gold action indicates something is afoot in the gold market. Hitting an absolute record of $1,164 mere minutes ago, the momentum chasing algo funds are now in the picture, set to do to gold what they have been doing to the S&P futures and the SPY day after day for months now: if little volume will cause a move, look for the momentum chasers to crawl out of the woodwork. Yet the key factor determining today's gold price: Comex gold option expiration later today. Over the past several weeks, speculators have accumulated a 3 million ounce option position with a $1,200 strike. With gold flying on the tiniest gust of speculative mania, the possibility that we may see a 1,200 handle on gold seems less and less improbable.
Gold sets another record above $1160 an ounce Gold created yet another record in Asian trade Monday and crossed the $1160 an ounce mark mainly on heightened speculation of more investors diverting to the yellow metal. Spot gold was seen trading at $1160.35 an ounce at 11.00 a.m Singapore time after hitting as high as $1162.24 an ounce earlier. Spot gold has risen 32 percent this year as the Dollar Index, a gauge of the greenback’s value against six major currencies including the euro and yen, tumbled 7.2 percent. Gold futures in New York climbed for a seventh straight day as the most accurate dollar forecasters predict record low borrowing costs, rising unemployment and the ballooning U.S. trade deficit will weigh on the currency.
Gold, Geithner, Roubini, the Fed, Housing
Gold to hit $1650 by late 2010, early 2011, but estimate could be low - Jim Sinclair As a contra to the dollar the outlook for the yellow metal remains strong The poor outlook for the dollar continues to provide good prospects for the price of gold. According to Jim Sinclair, chairman at Tanzanian Royalty Exploration, the price of the yellow metal could reach as high as $1650 by the end of 2010 and moving into the beginning of 2011. But, the man admits that, given recent happenings, this could be a bit of a low estimate. "My thesis is that gold is a contra to the US dollar and recent statements out of the Federal Reserve that interest rates will remain extremely low until 2012 is really a go ahead single for gold to continue to perform as it has until at least 2012.
Gold hits fresh high, as December contract tops $1,160 Gold futures rallied in electric trading on late Monday morning in Asia, as safe-haven demand helped lift the December contract to a fresh high above $1,160 an ounce. The gain extended a winning streak Friday in New York that's already spanned six straight sessions. "It is an unbelievable rally," said Darin Newsom, a senior analyst at Telvent DTN. "Buying seems to be coming from three sides: inflation hedge, safe-haven buying due to continued global economic concerns, and demand for paper (futures) coming from both commercial and noncommercial buying," he said. See Commodities Corner on gold's prospects.
Gold strikes record on inflation, economic worries Gold defied a rebound in the dollar on Monday and powered to a record on safe-haven buying, driven by growing worries about inflation and a drop in U.S. stocks that stirred doubt about the economic outlook. Bullion, which has gained around 32 percent so far in 2009, struck a succession of lifetime highs in November as sentiment turned extremely bullish after India acquired 200 tonnes of the precious metal from the International Monetary Fund.
Gold price continues to rise sharply One of the reasons for the increase in domestic gold prices is due to the Russian Central Bank adding 15.5 tons of gold (500,000 oz) to its reserves in October, making Russia the world’s 8th largest in terms of gold reserves. Many economic experts forecast that the global price of gold will climb to $1,200 per ounce at the end of the year due to gold supplies decreasing by 5 percent compared with last year and international central banks and investment funds continuing to purchase gold without selling it.
Obama’s feeble dollar sparks a new goldrush Visitors to America might have noticed the television ads urging us to buy gold. One such “spokesman”, formerly in charge of managing the government’s hoard of the yellow stuff, including the ingots buried at Fort Knox, points out that the value of gold has never fallen to zero. Why investors are expected to find such a modest claim reassuring I can’t imagine. But something is persuading people to buy gold, driving the price to and past $1,100 per ounce, from about $270 at the beginning of this decade, and around $700 when the financial crisis first hit.
Gold Rallies to Record in Asia on Bets Dollar to Weaken Further Gold jumped to a record in Asia, its sixth gain to all-time high in two weeks, on speculation more investors will buy bullion as an alternative to the dollar. Gold futures in New York climbed for a seventh straight day as the most accurate dollar forecasters predict record low borrowing costs, rising unemployment and the ballooning U.S. trade deficit will weigh on the currency. Spot gold has risen 32 percent this year as the Dollar Index, a gauge of the greenback’s value against six major currencies including the euro and yen, tumbled 7.2 percent. “Sentiment is very upbeat and gold is looking increasingly attractive,” Stefan Graber, Singapore-based analyst at Credit Suisse Group, said by phone today.
Gold Contrarians Will Get Killed In the last ten years, the financial world has experienced quite a few bubbles. Ten years ago there was the tech bubble. Then the housing bubble. And then the credit bubble. There was an Oil bubble too. With all these bubbles popping up, so to has an increase in bubble calling and contrarian thinking. As a result, sentiment analysis has become more popular. One has to look at three things: fundamentals, technicals and sentiment. For contrary thinking (in terms of sentiment) to be most powerful, either technicals or fundamentals need to agree. As an example, I anticipate a reversal when sentiment is overly bullish and that market is running into technical resistance. Just because sentiment is bullish, doesn’t mean a reversal is coming.
Gold’s Jogging Up The Stairs All the precious metals are strongly bullish at the moment. Gold is seeing accumulation on sideways moves now instead of corrective moves. The action is more bullish than I would have imagined at this stage in the secular bull market. We have a long road ahead of us in terms of how high the price will ultimately go. The second phase of the bull market, which we are now in, is said to be the climbing the wall of worry stage. That means that prices continue higher and higher as investors look for pullbacks to buy in, but they never really materialize.
Gold's Big Correction Won't Come Before The Gold Price Finishes This Rally, and Its Target is $1,300 The GOLD PRICE closed the week up $30.40, and rose on the day $5 to close on Comex at $1,146.50. In the aftermarket it's trading above $1,150.00. Big news of the week is Gold's running attack on $1,150, but it hasn't beaten down that gate yet. Am I nervous that this rally might end? Well, yes and no. Yes, a correction is long overdue and could come at any time, but only a short and shallow one. The big correction won't come before gold finishes this rally, and its target is $1,300.
What Will Drive The Gold Price In The Days Ahead? Gold is higher than ever before and is still climbing. Many investors are waiting for a fall in the gold price, because they are looking at the past market shape, that has not factored in the major sea-change in the shape of demand. Even many institutional analysts have not realized just what has happened to the market and turn only to their charts to decipher the next moves. You our subscribers, we hope, have realized from our writing and forecasts that a great deal more is still to come in this gold market in the years to come.
Gold gains as investors lose faith in US dollar Gold prices in Mumbai closed at an all-time high of Rs17,455 per 10 grams on Saturday, giving a return of 42%, or 49% in US dollar terms, over the last one year. In what has been termed the trade of the decade, gold has given an absolute return of a whopping 300% in dollar terms since the beginning of 2000. Its price increased from $281.5 per ounce (one troy ounce = 31.1 grams) on January 4, 2000, to around $1,151 per ounce currently. The irony, though, is the metal which economist John Maynard Keynes once called a "barbaric relic" has limited use other than ornamental value. "You can't eat it, it has limited industrial use. It is a strange belief in its power --based on scarcity, inability to control availability and an enduring history," says Satyajit Das, an internationally renowned risk consultant and author of the best-selling Traders, Guns and Money. "Gold always does well in periods of political and economic uncertainty. It is a bellwether of economic temperature."
How have gold and cash investments fared in the noughties? Gold was a lousy investment in the 90s … how times change. The humble savings account, meanwhile, more than held its own t has been one of the best investments of the past decade, and this week it was hitting new highs. But 10 years ago nobody wanted to know. Gold was trading at just $281.50 an ounce in January 2000, and investors were in despair. The price of bullion was limping along at a 20-year low, and trading volumes on London's battered gold market were falling, month on month. There was much talk of a "gold rush" ... but that was investors piling into internet stocks.
Why is gold marching higher? Ask the central bankers The rally in gold just doesn't want to quit. You are probably wondering what is going on. Central banks around the world hold gold reserves. Periodically, they buy or sell gold, depending on how they view world markets. Right now, central banks are net buyers, the first time since 1988. A weak US dollar is the main stimulus for central bankers' gold purchases. India just bought 200 metric tons from the International Monetary Fund. Central bankers in Mexico, Russia, the Philippines, all have increased their gold purchases.
Central Banks are horrible gold traders . . . . The ETF prices increase when the gold price increases and as demand for ETFs increase, then the ETFs actually go out and buy more gold. This is creating a feedback loop. The obvious concern is what happens when it goes the other way, if the gold price actually started to weaken and the ETFs start to sell, creating a negative feedback loop. When I referred to the different tone, I was really referring to the increased level of confidence that I'm observing among gold bugs and to the wave of financings that's coming out of the gold space. A lot of marginal gold companies are getting financed. Gold has shifted into a momentum phase that is generally characteristic of a topping process.
Commodities to Get Record $60 Billion, Barclays Says billion this year as investors seek to diversify their assets, Barclays Capital said. Inflows so far this year are almost $55 billion, already more than the previous full-year record of $51 billion set in 2006, the bank said in a report. Total commodity assets under management will probably expand to $230 billion to $240 billion by the end of the year, Barclays said.
"Underground" Gold Investor With gold busting through $1100 this month, government deficits / spending / borrowing showing no signs of slowing down anytime soon, the stock market at unsustainable highs, it's clear to see investors are finding few places to turn. One of the spots they have found is gold - the ultimate safe haven - as the last bastion of safety and wealth preservation. The interest in gold is at its highest level in decades. But we've discussed the value and importance of precious metals in the past. Now it's time to maximize the opportunity in gold.
Silver may beat gold to better returns At a time when gold prices are scaling new heights everyday it may sound unwise to talk about silver. But the fact is that silver has the potential to beat gold in the race to better returns. Silver’s demand, supply and prices each have two independent dynamics at work. The dichotomy and influence of these strands on each other makes this market no place for old men, says an analysis appeared in Economic Times.
Gained from Gold? You may see trouble ahead Unbeknownst to most investors, gold is considered a collectible not a capital asset. In plain English, this means that despite the fact that many people believe they are investing in gold, the Internal Revenue Service (IRS) believes that they are collecting it. This is no small distinction and hurts investors because it means that gold does not qualify for the 15% maximum tax bite that most of us employ as a matter of routine when we mentally calculate profits earned on investments held for more than a year. That 15% cut for Uncle Sam is the long-term capital gains tax rate that applies to most stock or mutual fund investments. Precious metals are a completely different story. Profits from these “investments” can be subject to a 28% maximum tax rate if held for more than 12 months. And if they are sold in less than a year, the profits count as ordinary income.
Commercial Real Estate Reality Check: 2007 Commercial Real Estate Valued at $6.5 Trillion with $3.5 trillion loans.Today, Commercial Real Estate Valued at $3.5 Trillion with $3.5 Trillion in Loans. Can you spot the Problem? Commercial real estate is dealing with the neutron bomb effect. The buildings still stand but the inside is gutted as if vultures had devoured a carcass. What we are seeing, like in many other sectors of our economy, is a distinction between reality based economics and the inflated prices of Wall Street. If we look at the stock market, you wouldn’t know that people are lining up at Wal-Mart at midnight at the end of the month waiting for paychecks or government assistance to clear simply to buy food. You also wouldn’t know that 27 million people are either unemployed or underemployed. The irony of this is banks do know how bad the economy really is including the disaster that is commercial real estate. Banks are building up reserves to brace for what is going to be a long and hard road ahead.
The Truth Behind China's Currency Peg During President Obama's high profile visit to China this week, the most frequently discussed, yet least understood, topic was how currency valuations are affecting the economic relationship between the United States and China. The focal problem is the Chinese government's policy of fixing the value of the renminbi against the U.S. dollar. While many correctly perceive that this 'peg' has contributed greatly to the current global imbalances, few fully comprehend the ramifications should that peg be discarded.
US Wants China to Buy into Its Small Banks Chinese and U.S. regulators are negotiating a pact aimed at encouraging Chinese financial institutions to buy into small and medium-sized banks in the United States, bankers briefed on the plan said on Tuesday. Chinese bankers have complained that it's been difficult for them to set up branches or invest in banks in the world's leading economy, due partly to U.S. regulators' tough supervision and strict approval process for financial deals.
Tim Geithner Is Mad as Hell and Isn't Going to Take It Anymore Treasury Secretary Tim Geithner took some heavy fire on Capitol Hill Thursday. Days after Oregon Democrat Peter DeFazio called for Geithner's resignation, Texas Republican told the Secretary: "The public has lost all confidence in your ability to do the job." While these comments were notably terse, it's not unusual for politicians to take shots at a Treasury Secretary or Fed Chairman in order to score points with their constituents. It's a key part of the "dog and pony show." What is unusual is for a sitting Secretary or Chairman to return the favor, as Geithner did yesterday, telling Brady: "What I can't take responsibility is for the legacy of the crises you've bequeathed this country."
Congress Grows Fed Up Despite Central Bank's Push The Federal Reserve's strategy to fend off a barrage of attacks from Congress, largely centered on low-key diplomacy by Chairman Ben Bernanke, isn't succeeding so far. Many Democrats and Republicans praise Mr. Bernanke for candor and accessibility. But some say the financial crisis -- and public antipathy to the Fed -- requires an overhaul of the central bank's responsibilities and tighter congressional oversight. "Even though I'm a fan of Ben Bernanke, I do think that what happened during this last crisis did undermine some of the credibility of the Fed," said Sen. Bob Corker (R., Tenn.), who sits on the Senate Banking Committee. The result: The Fed now faces the prospect of the biggest changes to its governing statute since 1935.
Fed Audit Shield Takes Blow After Ron Paul Proposal Advances The Federal Reserve’s shield from congressional audits of interest-rate decisions took a blow from lawmakers who want to open the central bank’s books to greater congressional scrutiny. The House Financial Services Committee yesterday advanced a proposal to remove a three-decade ban on audits of monetary policy and carry out an examination of the central bank. The plan was offered by Representative Ron Paul, a Republican from Texas who has called for the abolition of the Fed, and based on a bill with more than 300 co-sponsors.
Ron Paul introduces HR1207 as a substitute to the Watt amendment during debate 11/19/2009 Ron Paul introduces HR.1207 as a substitute amendment for Mel Watt's amendment. Watt's amendment would gut the intent of the audit of the Federal Reserve. In the end Paul's substitute passed by committee vote.
The Fed in a Corner Over the years, I have warned a seemingly countless number of undergraduates that Fed’s hold on monetary independence was tenuous at best. Independence is not guaranteed by the Constitution. Congress made the Fed, and Congress can unmake the Fed. The Fed could only maintain the privilege of independence if policymakers pursued policy paths that fostered maximum, sustainable growth. Deviating from such paths would have consequences. The Fed is quickly learning the extent of those consequences, as Congress launches an assault on the Fed’s independence.
END THE FED - HR 3996, the Automatic Bailout Bill of 2009 Yesterday Congressman Ron Paul's bill to complete a full audit of the Federal Reserve for the first time in 96-year history has narrowly avoided total defeat. The Federal Reserve is a quasi-private banking cartel owned by the banks with its Chairman nominated by the President that controls interest rates and the money supply. HR 1207, a very short 342-word bill, has a majority in the House with 313 co-sponsors. Its companion bill in the Senate, S 604, has 30 co-sponsors. HR 1207 has been blocked from a full House vote by the Chairman of the House Committee on Financial Services, Barney Frank.
Rep. Alan Grayson Passes Bill to Audit the Fed Rep. Alan Grayson argues in support of the Paul-Grayson amendment, which would subject the Federal Reserve to a complete audit. The amendment later passed the House Financial Services Committee 43-26 as part of the underlying financial reform package.
Bullard Says Fed Independence Vital to Stable Prices The Federal Reserve must retain its independence in setting monetary policy to contain the threat of inflation and avoid impeding the economic recovery, Federal Reserve Bank of St. Louis President James Bullard said. “Fed independence is vital in maintaining the credibility of monetary policy,” Bullard said in a speech today in New York. “Non-independent central banks, historically, have been forced to finance large government budget deficits through money creation. This can be extremely inflationary.”
Not Yet Time to Raise Rates: Fed's Plosser It is "not quite time yet" to raise interest rates in the U.S., Charles Plosser, president of the Federal Reserve Bank of Philadelphia, told CNBC Thursday. The Fed's implementation of an exit strategy, possibly in the middle of next year, will depend greatly on data from coming quarters, Plosser said. "A lot depends on the nature of the economy, how it evolves over the coming couple of quarters. We will have a lot better sense going into the middle of next year, how well the recovery has taken hold," he said. "That's important before we can make any final decisions. At the end of the day, policy is going to be data dependant; it's going to depend on how the economy's evolving. We will just have to wait and see."
Fed Makes Monitoring Bank Capital Foremost Concern Federal Reserve officials are stepping up scrutiny of the biggest U.S. banks to ensure the lenders can withstand a reversal of soaring global-asset prices, according to people with knowledge of the matter. Supervisors are examining whether banks such as JPMorgan Chase & Co., Morgan Stanley and Goldman Sachs Group Inc. have enough capital for the risks they take, how much they know about the strength of their counterparties and whether risk managers have authority to influence bank practices and policies.
The Weak Dollar Was Supposed to Fix Everything The inflation redux plan from the Fed and Washington is based on zero interest rates, massive deficits and quantitative easing, which are designed to bring down the value of the U.S. dollar and create inflation. That is the truth, despite promises from Treasury Secretary Geithner that he really means it this time when he says the U.S. has a strong dollar policy--the irony being, that he says this while concurrently begging the Chinese to allow the dollar to fall vs. the Renminbi. But their hopes placed in a lower dollar are woefully misguided and all that is being accomplished is to put into place the same conditions that brought the global financial system to its knees.
US Commercial Banks: the Turkeys Are Stuffed The increase in the monetary base created by the Fed's monetization of debt is striking, not seen since the early stages of the Great Depression. Banks are not lending despite the massive quantitative easing. They are fat with reserves, paying huge bonuses again, and obviously doing something with their money other than providing funds for the commercial activity of the nation. Excess Reserves are an accounting function. The banks themselves do not reduce their reserves significantly through lending in the aggregate, but seek to minimize the opportunity cost of reserves. But it is symptomatic in the sense that the lack of reserves is most definitely NOT an issue with lending. No one can deny with any credibility that if the Federal Reserve reduced their payment on reserves to zero, or even a negative, that lending activity would not increase. And yet they do not. Why?
Rep. Alan Grayson: Even on Wall Street, Losers Must Lose This is Rep. Alan Grayson on 11/20/09 talking to MSNBC's Dylan Ratigan on the audit the Fed provision that just passed the House Financial Services Committee.
FDIC Chair Sheila Bair has it right: It's time to change bankers' incentives I have to hand it to Federal Deposit Insurance Corp. Chairwoman Sheila Bair: The former University of Massachusetts economics professor gets it right on key policy issues. She's right about ending the doctrine of too-big-to-fail, and now she's proposing an idea that I've been pushing with no effect for years. That is, to align the interests of the banks that bundle assets and sell them as securities -- so-called asset-backed securities -- with those of ABS investors.
The FDIC Anesthesia Is Wearing Off The following article is an excerpt from Robert Prechter's Elliott Wave Theorist. For more information from Robert Prechter on bank safety, download his free report, Discover the Top 100 Safest U.S. Banks. Perhaps the single greatest reason for the unbridled expansion of credit over the past 50 years is the existence of the Federal Deposit Insurance Corporation, another government-sponsored enterprise created by Congress. The coming rush of bank failures is an outcome made inevitable the very day that Congress created the FDIC. The reason is that the creation of the FDIC allowed savers to believe that their deposits at banks are “insured” against loss.
Uncovering Obama's Stimulus Sham There were few economists who really believed, despite the promises that the money would go to shovel ready projects that could begin immediately once the funding came through, that the stimulus would really create any net jobs. But something needed to be done, they said, especially in light of the Obama administration forecast that, without it, unemployment would rise about 9 percent for the first time in several decades.
Risk versus the US dollar If and when the Federal Reserve moves out of the mortgage backed securities field -a move expected in the first quarter of 2010-, will private investors step in? Well, why should they? What profit can they expect to reap? US housing prices have been kept artificially high for at least the past two years (if not the past 70) by the combination of the Fed's recent $1.25 trillion MBS purchases and the aggressive securitization policies of Fannie Mae, Freddie Mac and the FHA/Ginnie Mae team.
China Is Risking Japan-Style 1980s Bubble, BNP Paribas Says China is risking a Japan-style bubble unless the country’s regulators tighten liquidity conditions, BNP Paribas said. “We’re entering a phase where China could experience similar asset bubble that we saw in Japan in the 1980s,” said Erwin Sanft, head of China and Hong Kong equities research at BNP Paribas. “If China continues its loose fiscal and monetary policy that could be those problems.” China implemented a stimulus package, encouraged record lending and cut interest rates five times since September 2008 to boost growth as the global recession curbed demand for the country’s exports. The bursting of a bubble in Japan’s stock and real-estate markets in 1990 led to what the Japanese call the “lost decade” of little or no growth.
China: US Dollars vs. Oil One of the great lessons I've learned over the years is to pay more attention to what people do rather than what they say. For example, I always found it peculiar when the CEO of a subprime mortgage lender, home builder or technology company protested in the media that business was "improving" or "bottoming" while selling shares like mad. Politicians are just as bad about saying one thing and doing another. Conversely, I have always admired people who do what they say they will do. The leaders in China have made it clear to the world that they are very nervous about the future of the US dollar (USD) and are diversifying their holdings away from America's currency.
A Pro-Free-Market Program for Economic Recovery As you all know, we are in a severe economic downturn. The official unemployment rate now exceeds 10 percent and according to many observers is actually substantially higher. Within the last year or so, our financial system has been rocked to its foundations. The collapse of the housing bubble and the numerous defaults and bankruptcies connected with it brought down major financial institutions, such as Bear-Stearns, Lehman Brothers, and Merrill Lynch. It also brought down numerous small and medium-sized banks and threatened to bring down even such banking giants as Citigroup and Bank of America. The Dow Jones stock average fell from a high of 14,000 to about 6,500. Important retailers such as CompUSA, Circuit City, Mervyns, and Linens 'N Things went under, as did countless small businesses throughout the country. Practically every shopping mall gives testimony to the severity of the downturn in the form of vacant stores.
Rep. Alan Grayson on the Fed Bailing Out Big Banks: "You Don't Give Scholarships to Kids Who Fail" Rep. Alan Grayson discusses the bill to audit the Fed, which passed out of the Financial Services Committee on November 20, 2009.
"Black Friday" deals may not signal retail comeback When the U.S. holiday shopping season kicks off on the day after Thanksgiving, retailers can expect to see millions of less frightened, but even more bargain-hungry customers cross their thresholds. Industry experts expect a strong turnout on Black Friday, which falls on November 27 this year, as deep discounts lure shoppers after more than a year of subdued spending. But they caution it will not mean a bumper holiday season in the weeks leading up to Christmas since consumers still remain cautious.
U.S. Housing Recovery Set Back to 2010 With Market on 'Life Support' A recovery in U.S. housing will have to wait at least until next year. The outlook for the home market dimmed this week as residential construction and mortgage applications fell and loan delinquencies reached a record. “I don’t think the housing crisis is over,” Mark Zandi, chief economist with Moody’s Economy.com, said in a telephone interview. “I think we’re going to see another leg down.”
Renters becoming latest victims as foreclosure crisis widens Multifamily defaults rising Some tenants left in dilapidated buildings A new wave of foreclosures stands to hurt people who may have never taken out a mortgage: renters. In cities such as New York, Chicago and Los Angeles, where many investors are carrying upside-down mortgages on large rental buildings, some tenants are watching their homes fall apart along with the financing. Janeia Sandiford, a 24-year-old GED student in New York, has two young children and a deteriorating apartment. When a leak over Sandiford's bathroom and kitchen caused the ceiling to flake off and then cave in, nobody came to fix it for a year, she said. She lacked heat most of last winter, and she has duct-taped her loose-fitting windows in place to cut down on drafts.
McCain warns of Medicare cuts, tax increases U.S. Sen. John McCain, R-Ariz., warned of major cuts to Medicare and large tax increases as the U.S. Senate neared its first votes this weekend on health care reform. McCain opposes health reforms pushed by Democrats and President Barack Obama that would create a public-option government system to cover the uninsured and operate alongside private insurance companies. "I don't think Americans really understand the scam that's going on here of beginning to collect taxes, tax increases and Medicare cuts of approximately $1 trillion beginning 40 days from now" McCain said Saturday. "In other words, the first of January, according to this plan, Americans will begin experiencing cuts in Medicare and increases in taxes 40 days from now. Now, is there anybody who would agree that that's nothing but a scam on the American people?"
Unemployment taxes hit small businesses hard As if small businesses needed another reason not to hire, consider their latest financial burden: the cost of rising unemployment itself. Employers already are squeezed by tight credit, rising health care costs, wary consumers and a higher minimum wage. Now, the surging jobless rate is imposing another cost. It's forcing higher state taxes on companies to pay for unemployment insurance claims. Some employers say the extra costs make them less likely to hire. That could be a worrisome sign for the economic recovery, because small businesses create about 60 percent of new jobs. Other employers say they'll cut or freeze pay.
Despite mayor’s optimism, downtown Phoenix feels real estate, consumer stress Phoenix Mayor Phil Gordon extolled the economic resilience of downtown Phoenix this week during this annual “State of Downtown” speech. Gordon said Arizona State University’s expansion of its downtown campus, construction of the mixed-use CityScape project, and the light rail system are helping the area. He also said while sales tax revenue is down citywide, it is up 13 percent in downtown Phoenix. “Yes, it’s been a tough year economically for everyone. You’ve heard all about it, read all about and felt it,” Gordon said. “But in spite of it all, we’ve still got a lot going on in downtown Phoenix.”
20-pound, 2,074-page bill steals show Just before Sen. John Ensign took the Senate floor Friday evening to blast Democrats' health care bill, a Senate staffer lugged a 2-foot-tall tower of papers to his desk to make sure it showed up in every camera angle C-SPAN might want to catch of the senator's speech. The real star of the health care debate this weekend has been the 2,074-page bill — a physical manifestation of the size and scope of what's at stake as senators consider the overhaul of one-sixth of the nation's economy.
Republicans blast 'bait and switch' health bill Digging in for a long struggle, Republican senators and governors assailed the Democrats' newly minted health care legislation Thursday as a collection of tax increases, Medicare cuts and heavy new burdens for deficit-ridden states Digging in for a long struggle, Republican senators and governors assailed the Democrats' newly minted health care legislation Thursday as a collection of tax increases, Medicare cuts and heavy new burdens for deficit-ridden states. Despite the criticism, there were growing indications Democrats would prevail on an initial Senate showdown set for Saturday night, and Majority Leader Harry Reid crisply rebutted the Republican charges. The bill "will save lives, save money and save Medicare," he said. The legislation is designed to answer President Barack Obama's call to expand coverage, end industry practices such as denying coverage on the basis of pre-existing medical conditions, and restrain the growth of health care spending. Republicans saw little to like.
Republican governors: 'Opt out' unworkable Even with the "opt-out" option, Republican governors who gathered here last week weren't buying in to President Obama's plan to overhaul the nation's health care system. While some GOP governors embraced Mr. Obama's $787 billion economic stimulus program earlier this year, the attendees at the annual meeting of the Republican Governors Association were standing unanimously with their congressional counterparts against the Democratic health care reform bills being considered in Congress. A compromise devised by Senate Majority Leader Harry Reid, Nevada Democrat, to let states "opt out" of offering the government-financed "public" insurance option - among the most controversial parts of the overhaul plan - played to negative reviews here. Republican governors said the measure would put them in a political and policy bind.
Democratic senators at odds over health bill Senate Democrats on Sunday sparred with each other over how to fix the nation's troubled health care system, with moderates threatening to scuttle legislation if their demands weren't met and the more liberal members warning their party leaders not to bend. The dispute among Democrats presages a rowdy floor debate next month on legislation that would extend health care coverage to an estimated 31 million Americans. Republicans have already made clear they aren't supporting the bill. Final passage is in jeopardy, even after the chamber's historic 60-39 vote Saturday night to begin debate.
A budget-buster in the making It's simply not true that America is ambivalent about everything when it comes to the Obama health plan. The day after the Congressional Budget Office (CBO) gave its qualified blessing to the version of health reform produced by Senate Majority Leader Harry Reid, a Quinnipiac University poll of a national cross section of voters reported its latest results. This poll may not be as famous as some others, but I know the care and professionalism of the people who run it, and one question was particularly interesting to me. It read: "President Obama has pledged that health insurance reform will not add to our federal budget deficit over the next decade. Do you think that President Obama will be able to keep his promise or do you think that any health care plan that Congress passes and President Obama signs will add to the federal budget deficit?"
Senate Democrats vote to bring health bill to floor for debate REID SEEKS PASSAGE BEFORE CHRISTMAS Caucus remains bitterly divided over public option The Senate voted along party lines Saturday night to overcome a Republican filibuster and bring to the floor a bill that would overhaul the nation's health-care system. After days of indecision, the last two Democratic holdouts -- Sens. Blanche Lincoln (Ark.) and Mary Landrieu (La.) -- joined their caucus in supporting a motion to begin debate. The 60 to 39 vote marks a milestone in the decades-old quest for health-care reform, President Obama's top legislative priority.
US healthcare bill overcomes Senate hurdle President Barack Obama's hopes of passing a landmark reform of the American health care system have gained traction after the Senate voted narrowly to begin debate on a draft bill. The decision to deny a filibuster on the Senate debate divided the chamber on party lines, without a single vote to spare. All 58 Democrats and two Senators who normally caucus with the party voted in favour but not a single Republican joined them in the rare Saturday evening vote. Those 60 votes were the minimum needed to avoid Mr Obama suffering a catastrophic defeat of the centerpiece of his agenda. Democrats remain confident they can squeeze through a final bill with the same razor-thin margin but weeks of horse-trading and rancor lie ahead.
Tea Party Movement Shattering? The Politico digs up enough stories of internecine fighting amongst the loose bunch of organizations supposedly responsible for, or furthering in specific locations, the Tea Party movement to generate a semi-convincing trend story that argues the movement may be "losing momentum." While the sort of petty conflict the story highlights between your Tea Party Patriots and Tea Party Express and Tea Party Nation, (your People's Judean Front and People's Front of Judea...), are worth noting (and unavoidable in politics), I'd say that an idea (which I think is a more accurate description of the whole orbit of actions and groups lumped in as the "tea party movement") that can still gather 4,000 people to a Texas rally, as the story notes, isn't worth writing off yet.
Denmark: 65 world leaders -- and counting -- to attend UN climate summit in Copenhagen COPENHAGEN (AP) -- Sixty-five world leaders have said they will attend the Copenhagen climate summit in December, and several more have responded positively to invitations, Danish officials said Sunday. But the world's top three carbon polluters -- the United States, China and India -- have not indicated whether their leaders will attend the meeting, and that could have a big impact on its chances of reaching a deal. The nations that plan to send their leaders to Copenhagen include Australia, Brazil, France, Germany, Indonesia, Japan, Spain and the United Kingdom, a Danish official said, speaking on condition of anonymity because he is not an official spokesman.
OECD warns Britain risks 'debt spiral' Britain is at growing risk of a "public debt spiral" unless the Government takes "drastic" action to cut the deficit, according to the OECD, world's leading economic institution. The Organisation for Economic Co-operation and Development said that even if Britain reduces its deficit in line with other leading nations, it will still have the rich world's biggest deficit from now until 2017 and potentially beyond, casting serious doubt on its economic credibility. The warning coincided with shock public finance statistics showing that public borrowing in October was 88 times what it was in the same month last year, making it likely that the Chancellor will miss his £175bn borrowing forecast this year.
Greece tests the limit of sovereign debt as it grinds towards slump Greece is disturbingly close to a debt compound spiral. It is the first developed country on either side of the Atlantic to push unfunded welfare largesse to the limits of market tolerance. Euro membership blocks every plausible way out of the crisis, other than EU beggary. This is what happens when a facile political elite signs up to a currency union for reasons of prestige or to snatch windfall gains without understanding the terms of its Faustian contract. When the European Central Bank's Jean-Claude Trichet said last week that certain sinners on the edges of the eurozone were "very close to losing their credibility", everybody knew he meant Greece. The interest spread between 10-year Greek bonds and German bunds has jumped to 178 basis points. Greek debt has decoupled from Italian debt. Athens can no longer hide behind others in EMU's soft South.
***** Watch this situation in Iran *****
Iran begins war games to protect nuclear sites TEHRAN, Iran -- Iran on Sunday began large-scale air defense war games aimed at protecting its nuclear facilities from attack, state TV reported, as an air force commander boasted the country could deter any military strike by Israel. It said the five-day drill will cover an area a third of the size of Iran and spread across the central, western and southern parts of the country. Gen. Ahmad Mighani, head of an air force unit in charge of responding to threats to Iran's air space, said Saturday the war games would cover regions where Iran's nuclear facilities are located. The drill involves Iran's elite Revolutionary Guard, the paramilitary Basij forces affiliated with the Guard as well as army units. The United States and its European allies accuse Iran of embarking on a nuclear weapons program. Iran denies the charge and insists the program is only for peaceful purposes.
Iran Launches Air-Defense Exercise Drill to Defend Nuclear Installations Comes as Western Countries Add Pressure Over Atomic Program Iran launched a five-day air-defense exercise Sunday, flexing its military might amid Western pressure over its nuclear program, and threatening retaliation against Israel if it were to target Iran. Brig. Gen. Ahmad Mighani, in charge of Iranian air defense, said Sunday the exercise was being conducted with both Iran's conventional armed forces and the Islamic Revolutionary Guard Corps, across a swath of northern, southern and western Iran. Announcing the exercise on Saturday, Gen. Mighani said it was targeted at preventing attacks on Iran's nuclear infrastructure.
US pours millions into anti-Taliban militias in Afghanistan US special forces are supporting anti-Taliban militias in at least 14 areas of Afghanistan as part of a secretive programme that experts warn could fuel long-term instability in the country. The Community Defence Initiative (CDI) is enthusiastically backed by Stanley McChrystal, the US general commanding Nato forces in Afghanistan, but details about the programme have been held back from non-US alliance members who are likely to strongly protest.
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Fri 11.20.2009
The Critical Unraveling of U.S. Society The economic elite have launched an attack on the U.S. public and society is unraveling at an increased rate Report Contents:
I: U.S. Societal Breakdown
II: Environmental Crisis
III: The Obama Myth
IV: Economic Coup - Theft of Trillions
V: National Emergency
Geithner Says He Won't Step Down, Takes a Few Swings at Republican Treasury Secretary Timothy Geithner and Rep. Kevin Brady (R., Texas) turned a seemingly boring hearing on financial regulations into a messy fracas, when they exchanged verbal insults over who was to blame for the economic crisis. At a Joint Economic Committee hearing in Congress, in which House and Senate lawmakers sit on a panel, Mr. Brady opened up his questioning by telling Mr. Geithner Republicans, Democrats, and the American people had lost confidence in the Treasury Secretary and asked him to resign.
Geithner, under fire, defends AIG bailout U.S. Treasury Secretary Timothy Geithner defended on Thursday the costly bailout of insurer AIG and urged swift regulatory reform to safeguard the economy from the failure of big financial firms. Before Congress' Joint Economic Committee, Geithner faced fierce criticism of his role in the rescue of American International Group Inc in 2008 when he was president of the New York Federal Reserve Bank. Geithner said AIG's failure posed as significant a risk to the economy as the collapse of investment bank Lehman Brothers, which sparked a panic that virtually shut down global trade and threatened to topple the entire financial system.
Geithner Savaged On Unemployment During Fiery Capitol Hill Hearing Burgess tells former New York Fed chief, "You should never have been hired" as Brady calls on Treasury Secretary to resign over Obama's 7 million jobs deficit Congressman Michael Burgess scalded Treasury Secretary Tim Geithner during a fiery hearing on Capitol Hill this morning, telling the former New York Fed chief that he should never have been hired and demanding that the TARP program come to an abrupt end, shortly after GOP Rep. Kevin Brady had called on Geithner to resign. "The public has lost all confidence in your ability to do the job," Brady told Geithner during a heated Joint Economic Committee meeting, adding that he had failed to oversee an economic recovery before asking Geithner, "Will you step down from your post?"
Brady chats with Neil Cavuto after asking Geithner to resign
Obama, Geithner and Bernanke: America's Top Bond Salesmen Pitch No. 1 Client As President Obama wrapped up his first trip to China this week, there was plenty of talk about partnerships but few concrete agreements reached on (1) whether or not China will let its currency float freely (2) and China's concerns about U.S. debt. "Obama, Geithner and Bernanke, they're the three bond salesmen of the U.S. They're going to see our best client and hoping our client is happy," says Peter Boockvar, equity strategist at Miller Tabak. "Apparently they're not happy and the question is what do we do to make them happy?," Boockvar tells Aaron.
AmTrust Bank falls to 'undercapitalized' status AmTrust Bank suffered a $296.9 million loss in the third quarter that dropped it into "significantly undercapitalized" status under regulatory guidelines. That condition could lead to severe regulatory action against the $11.4 billion-asset Cleveland-based bank. As of June 30, AmTrust was the seventh-largest holder of deposits in South Florida, with $4.7 billion in deposits in 21 branches. It also has branches in Ohio and Arizona.
Is $6,300 fair value for gold? The last parabolic spike in gold took off when central banks joined the fray in the 1970s, hoarding bullion with the same enthusiasm as gold bugs. Dylan Grice from Société Générale says it smells much the same today. He sees an eery similarity between the decision of India's central bank to buy half the IMF's entire sale of gold, and the move by France's central bank to start converting dollars into gold in 1965 - which was, of course, the start of the slippery slope leading to the collapse of Bretton Woods and the closure of the US gold window under Nixon.
Gold Demand Remains Robust as Economic Conditions Improve Total identifiable gold demand for the third quarter 2009 reached 800.3 tonnes or US$24.7 billion in dollar terms, up 15% from the second quarter, as gold's long-term store of value and wealth preservation qualities continued to attract investors and consumers. Jewelry and investment demand in non-western markets rebounded from the very low levels seen in the first quarter, while industrial demand started to recover in response to an improvement in economic conditions.
Gold's 'Money' Value is $4,000 to $11,000: Market Strategist Federal Reserve officials on Thursday downplayed the consequences of the falling U.S. dollar, pointing to deflation as a lingering threat. The dollar has fallen 7 percent so far this year and likely has become a funding vehicle for bets on higher-yielding currencies in growing emerging markets. So how should investors guard their portfolios? Jim Rickards, senior managing director of market intelligence at Omnis, shared his insights.
Gold as a “Go To” Asset Class We believe there is room for more gold price gain, near term. A “true” gold market in which the yellow metal is being treated as an asset class in its own right is building around the uncertainties in other markets. That is different from recent warehousing cycles when gold moved most strongly during the final up stage of a resource/economic cycle. This time around gold is being treated as a market and currency hedge, not as a goody bag being handed out at the end of a party. The most interesting note on that score of late is news from India that October saw a large uptick for buying gold in forms such as bars that are used to invest. This is rather than as jewellery (which often has a low manufacturing premium in India by western standards at any rate) that is bought this time of year for the festival season. India’s gold and silver traders are amongst the world’s best and it is prudent to note when they stop buying or selling as sign of a top or bottom.
Poll of the Day: Gold A look at Gold as it hits its fifth straight record high and whether investors should jump in now.
Gold ends slightly higher on dollar, economic data Gold futures ended Thursday's trading marginally higher, as the U.S. dollar came slightly off its highs, helping offset renewed economic concerns in the U.S. and in China. Gold for December delivery, the most actively traded contract, rose 70 cents to end at $1,141.90 an ounce. The thinly traded November contract also gained 70 cents to $1,141.40 an ounce. Both contracts have risen more than 9% so far this month. In currencies trading, the dollar rebounded against most of its rivals, with the dollar index (DXY 75.29, +0.11, +0.14%) up 0.2% at 75.298. The U.S. unit's rebound put commodities under pressure, and had also pushed gold futures lower. But as the greenback reduced its gains in afternoon trading, gold turned slightly higher.
'Gold has excellent speculative potential right now' Louis James: This is one of those times when you hate being right. The short answer is no. The slightly longer answer is that while some actions might help the dollar, those actions won't prevent pain in the near future and they aren't politically viable anyway. It would mean embracing the pain the market doles out to people who make bad decisions, and those in government won't want to do that. That's not just my supposition or theory. You can see they're doing the exact opposite of what needs to be done; they're creating more debt, more "bubbliness," if you will, which is exactly what got us into this situation in the first place.
The Fed is sending gold higher Is gold going to $6,300? Dylan Grice, an analyst with Societe Generale, says it's possible, given the decline in central bank credibility. But investors need to keep one thing in mind: Gold is merely a vehicle to protect the purchasing power of money. Gold is surging because investors see that the Federal Reserve - more concerned with deflation and unemployment than sound money - may be trapped in a never-ending cycle of monetary accommodation. Ben Bernanke says he won't monetize debt, but he already has. His Fed has bought $300 billion of Treasuries and is on pace to buy $1.45 trillion of government-backed mortgage debt all of which is being salted away indefinitely on the Fed's balance sheet.
What Gold Did During the Great Depression It seems to be the question of the week for me when speaking to people..What did Gold do during the Great Depression. Well if you had the physical you were required by law to turn it into the FED govt. In return you a certificate. Basically it was illegal to own physical gold during the darkest hours of the depression. However gold shares went through the roof. I had a client forward me a chart of Homestake mining.
China willing to buy IMF gold cheap, around $800/oz . . . . Now IMF has 203 tonnes of remaining gold to be sold. Several central banks from China, Russia, Brazil, and even a small country like Sri Lanka are said to be in the fray to buy the rest of the IMF gold reserves. You cannot even rule out India itself buying out the complete stock of IMF gold reserves, if you examine the way India has acted early this month. Gold prices in the global bullion market have been going up ever since the IMF sale of gold to India.
Gold Rally Takes a Pause Gold futures are near steady Thursday after pulling back slightly as the U.S. dollar strengthens, a continuation of the strong inverse trade that has sent the metal to records at the expense of the greenback. Participants appear to be taking a break from placing orders based on speculation prices will rise, but at the same time the market is holding near record levels above $1,150 indicating people aren't betting the market will fall either.
Gold Back Near Record Nominal Highs in EUR and GBP Gold reached new record nominal highs in dollars yesterday and reached $1,146/oz overnight and has since pulled back slightly. Gold is currently trading at $1,136/oz. In EUR and GBP terms it is trading at €764/oz and £680/oz respectively. The poor housing data from the US and President Obama's warning regarding the surging US public debt led to falls in equities, bonds and the dollar yesterday as gold reached new record nominal highs at over $1,150/oz. Importantly and significantly, gold is also back near record highs in EUR, GBP and many major currencies (gold's record nominal high in euro is €782/oz and in sterling it is £690/oz - London PM Fix on 20/02/09). Thus, gold is not 'cheaper' in other currencies as it is rising in all currencies in the last week, month, YTD, 1 year, 5 year etc.
Going for the Gold? Assessing whether the opportunity to invest in gold has passed, with Jeffrey Christian, CPM Group.
Gold dip offers buying opportunity The price of gold slipped early Thursday in London, losing almost 2% from yesterday's new Dollar record as global stock markets also fell despite a report from the OECD which doubled 2010 growth forecasts for the world's richest economies. The US Dollar rose sharply on the forex market, but the drop in gold outpaced the drop in non-Dollar currencies, helping the gold price in Sterling retreat 1.1% from Wednesday's 9-month highs.
Gold Retreats from Record as Dollar Firms Gold prices retreated on Thursday from the record high above $1,150 an ounce they reached in the previous session, reacting to a rise in the dollar as investors took profits in higher-yielding currencies. Spot gold [US@GC.1 1135.5 -5.20 (-0.46%) ] dipped almost 1 percent to near $1,135 an ounce, against $1,144.70 late in New York on Wednesday. In that session it hit a record $1,152.75 an ounce.
Gold demand falls 34 percent in Q3: World Gold Council Gold demand fell 34 percent in the third quarter as high prices weighed on investment flows and led to a slump in jewelry buying in key markets like India and the Middle East, a World Gold Council report showed on Thursday. But speculation in gold futures and expectations for more official sector bullion buying are keeping prices elevated despite a dearth of physical demand, according to the WGC's investment research manager Rozanna Wozniak. "For most of last year, the buying was very physical," said Wozniak. "(Now), it seems to be more financial market-driven, by some of those other less visible instruments -- derivatives, futures, over-the-counter transactions."
Gold's Rally Suggests Silver Will Ride the Coattails As investors begin their shift away from currencies and into hard assets, gold has waltzed well past $1000 per ounce and has since pushed through $1100. Because precious metals have been long seen as an effective hedge against inflation, investors have been the biggest driver of demand.
Calls rise for new global currency As U.S., China spar over yuan valuation, IMF chief sees basket of currencies replacing dollar as benchmark Tensions over two of the world's major currencies are escalating, playing out in economic and political circles as countries make a desperate push for crucial trade dollars. Visiting China, President Barack Obama said he wants the country to dismantle its currency peg to the U.S. dollar. But while the two countries bicker over the value of the yuan, momentum is building for a replacement for the world's reserve currency.
World leaders turn attention to next crisis: national debts Obama warns of 'double-dip' recession; Britain pledges law to halve deficit in four years The world's major developed countries are admitting they have a debt problem. The next step is convincing their sponsors in the international bond market that they are serious about controlling their habit. In an acknowledgment that words are not enough, Britain's government said Wednesday it will turn into law its promise to halve the biggest budget deficit in the Group of 20 nations in four years.
U.S. Debt, Where’s the Money Going to Come From? A lot of what passes for analysis of the US economy is far too complicated. The reality is that you only need to do basic arithmetic to see that the US is STILL in a recession if not depression. The US consumer accounts for 70% of the US GDP. The US GDP (after the recession’s impact) is in the ballpark of $11 trillion. So the US consumer accounts for $7.7 trillion in dollar terms. This is THE driver of our economy. So let’s focus on the consumer’s balance sheet. According to the Fed, total US household wealth currently stands around $53 trillion. Personally I think the Fed’s number is bogus since it lumps non-profits and households together. It also claims $20 trillion of this wealth comes from real estate including “All types of owner-occupied housing including farm houses and mobile homes, as well as second homes that are not rented, vacant homes for sale, and vacant land.”
$4.8 trillion - Interest on U.S. debt Unless lawmakers make big changes, the interest Americans will have to pay to keep the country running over the next decade will reach unheard of levels. Here's a new way to think about the U.S. government's epic borrowing: More than half of the $9 trillion in debt that Uncle Sam is expected to build up over the next decade will be interest. More than half. In fact, $4.8 trillion. If that's hard to grasp, here's another way to look at why that's a problem. In 2015 alone, the estimated interest due - $533 billion - is equal to a third of the federal income taxes expected to be paid that year, said Charles Konigsberg, chief budget counsel of the Concord Coalition, a deficit watchdog group.
Fed officials play down impact of weak dollar Federal Reserve officials on Thursday downplayed the consequences of the falling U.S. dollar, underscoring that deflation is still a threat, especially with commercial real estate prices falling. Dallas Fed President Richard Fisher said in an interview with Market News International that the weakening dollar, which hit a 15-month low against major currencies on Monday, is only one of the factors the Fed watches when setting policy. "You pay attention to this," Fisher said in reply to a question about the effects of a weaker dollar.
Audit The Fed Effort Wins Support From An Unusual Coalition An unusual coalition of progressive economists, labor leaders, and bloggers has decided to fight back against a congressional amendment that would allow the Federal Reserve to continue operating in secrecy. In a Thursday letter to the House Financial Services Committee, economists like Dean Baker and Rob Johnson, author Naomi Klein, and such labor luminaries as the AFL-CIO's Richard Trumka and the SEIU's Andy Stern, urged committee members to shoot down an amendment by Rep. Mel Watt (D-N.C.) that would essentially allow the Fed to keep the lights off while it throws money around.
Two Fed "hawks" see no immediate inflation threat U.S. Federal Reserve officials on Thursday said inflation is not an imminent threat and downplayed the consequences of the falling U.S. dollar. Philadelphia Federal Reserve Bank President Charles Plosser and Dallas Federal Reserve Bank President Richard Fisher both said the U.S. recovery was underway but noted risks to growth remain. "It's not going to be zippy," Fisher said of the recovery, adding he is concerned growth will fall short of 3 percent next year and unemployment will remain high for a long time.
Regents Set to Raise Tuition in California by 32 Percent The University of California Board of Regents was expected to approve a plan on Thursday to raise undergraduate fees - the equivalent of tuition - 32 percent by next fall, to help make up for steep cuts in state funding. The state allocation for the 10-campus system, one of the leading public university systems in the nation, was cut $813 million, or 20 percent, this year, leading to a hiring freeze, furloughs and layoffs.
32% Inflation in UCLA Tuition Causes Near Riots (14 Arrested, 1 Tasered)
Geithner Hopes for Quick End to Bailout Program Treasury Secretary Timothy F. Geithner said on Thursday that the government would end its $700 billion bailout program "as soon as we can," and that part of it would be used to lower the record deficit. During a Joint Economic Committee hearing, Mr. Geithner was pressed to disclose the administration's plan for dealing with the financial rescue program. He did not say how much of the bailout money would go toward paying down the deficit, which hit a record high of $1.42 trillion for the budget year that ended Sept. 30 and is expected to rise even higher this year. "We are winding it down and will close it as soon as we can," he said.
Geithner urges prompt action on financial overhaul Geithner calls on Congress to keep pushing overhaul of flawed financial rules Treasury Secretary Timothy Geithner is pushing Congress to move quickly in overhauling the nation's badly flawed financial rules, which he says is essential for the health of the economy. Both the House and Senate are making progress toward revamping the current regulations, but Geithner said a rapid conclusion is needed to keep the economic recovery on track. "To ensure the vitality, the strength and the stability of our economy going forward, we must bring our system of financial regulation into the 21st century," Geithner said in remarks prepared for an appearance Thursday before the Joint Economic Committee.
Geithner: 'The credit crunch is not over' Small businesses took center stage as Washington power players convened to tackle the growing crisis in lending. One day after Goldman Sachs' CEO apologized for his bank's role in the financial meltdown, Treasury Secretary Tim Geithner called on the nation's financiers to step up and do more to fix the damage they helped cause. "This credit crunch is not over," Geithner at a small business financing forum in Washington hosted by the Treasury. "It may feel dramatically better for large companies, but it is not over for small businesses across the country."
House Committee to Vote on Fed Audits in Test of Bernanke Clout The House Financial Services Committee will consider today how much to expand audits of the U.S. central bank in a test of Federal Reserve Chairman Ben S. Bernanke's clout among lawmakers. Panel members will vote on a Democratic proposal to retain a ban on audits of Fed interest-rate decisions. Approval would deal a blow to Representative Ron Paul, the Texas Republican who introduced a bill with 300 cosponsors that would allow audits of interest-rate decisions, a step Bernanke opposes.
Fed's Plosser Says Inflation Target Helps Anchor Expectations Federal Reserve Bank of Philadelphia President Charles Plosser said a formal inflation goal can help central banks better anchor expectations on the future movement of prices. "In light of the current financial crisis and the concerns expressed in some countries, including the U.S., about deflation, establishing an inflation target would help prevent expectations of deflation from materializing," Plosser said today in remarks prepared for a Singapore conference. A target "has the benefit of minimizing the volatility stemming from unanchored inflation expectations to either the upside or the downside."
Why Is the Fed Still at Zero? Bernanke Playing with Inflation Fire, Peter Boockvar Says Inflation fears resurfaced Wednesday's after October CPI came in higher than expected and St. Louis Fed President Bullard suggested the Fed might stay on hold until 2012, based on its tightening schedule following the past two recessions. The newswires probably made too much of Bullard's comments - and headline writers overlooked his caveats: "The 'too low for too long' argument may weigh heavily on the FOMC this time," he said. But TIPS spreads did widen sharply Wednesday and the bottom line is "the market is becoming worried about inflation," according to Peter Boockvar, equity strategist at Miller Tabak. "Not hyperinflation, not crazy inflation but inflation nonetheless." So the $64 trillion question remains: When will the Fed act?
U.S. 3-Month Bills Turn Negative on Concern Risk Rally Overdone Treasury three-month bill rates turned negative for the first time since financial markets froze last year on concern that the rally in higher-yielding assets has outpaced the prospects for economic growth. Investors were willing to pay the government to hold their money as stocks slid amid speculation the eight-month, 68 percent rally that drove the valuation of the MSCI World Index to the most expensive level in seven years already reflects forecasts for a 25 percent rebound in corporate earnings next year. Federal Reserve Bank of St. Louis President James Bullard yesterday said experience indicates policy makers may not start to increase interest rates until early 2012.
Geithner: Largest firms need single regulator U.S. Treasury Secretary Timothy Geithner said on Thursday that no financial firm should be able to escape regulation, and the largest institutions need oversight from a single, strong regulator. "The regulation of the largest, most interconnected firms requires tremendous institutional capacity, clear lines of authority and single-point accountability. This is no place for regulation for council or by committee," Geithner said in testimony to the congressional Joint Economic Committee.
"Liberal" Consensus On Dumping Geithner? From The Hill.... Rep. Peter DeFazio (D-Ore.) said Wednesday that he and other liberal House members are becoming increasingly tired of Obama administration economic policies that they say are too focused on maintaining the stability of Wall Street firms and largely ignore "Main Street." "A growing consensus in the caucus [believe that Geithner should be removed]," DeFazio said on MSNBC this evening, adding that some lawmakers are "considering questions regarding him and other economic advisers." No, really? What was your first hint Peter? Was it that Timmy couldn't be bothered to pay his taxes? Was it that he was the Wall Street stooge who handed out billions of taxpayer money to the big banks through AIG via what I'd argue was a fraudulent scheme to pay off those CDS at par? Or is it Timmy's incessant prattling on about a "strong dollar"?
A sector too tough to save For the first time in the credit crisis, the government may have run into a problem that is too tough to bail out: commercial real estate. The Treasury and the Federal Reserve have spent hundreds of billions of dollars shoring up the residential-mortgage market. By comparison, the government's strategy for dealing with commercial real estate looks slight. And it may have no choice but to step aside and allow an adjustment that could slow the economy and expose banks and bond investors to big losses from the $3.4 trillion outstanding in commercial real-estate debt.
Big Banks Should be Broken Up, Not 'Coddled': Fed's Fisher Banks that are considered too large to fail should be dismantled rather than "coddled," Dallas Federal Reserve Bank President Richard Fisher said on Thursday. Large-scale government bailouts of institutions like insurer American International Group have generated widespread controversy following last year's global financial meltdown. Fisher suggested the only way of ensuring that such financial giants do not pose recurrent problems is by making them smaller.
Lou Dobbs on the Record Lou Dobbs, former CNN anchor discusses Treasury Secretary Geithner being asked to step down and foreign trade relations.
Whitney Says Goldman Sachs Lost 'Tremendous' Talent Meredith Whitney, the analyst who cut her rating on Goldman Sachs Group Inc. last month, said the bank has lost some of its top-performing employees as executives left to start their own investment companies. "Goldman's lost a tremendous amount of talent going to set up their own hedge funds," Whitney, founder of Meredith Whitney Advisory Group, said today in an interview on Bloomberg Radio. "It became a scary prospect of having the government determine what you make," said Whitney, who also said today that bank stocks are "grossly overvalued."
Meredith Whitney Says Bank Stocks Are 'Grossly' Overvalued Meredith Whitney, the analyst who has no "buy" recommendations on U.S. banks, said valuations on lender stocks are too high and what "scares" her most is the government stepping away from buying mortgage-backed securities. "The banks are still grossly overvalued," Whitney said today in an interview on Bloomberg Radio. "People are expecting something great to happen in 2010 and I think they are going to be severely disappointed." The Federal Reserve has begun slowing purchases in the $5 trillion market for so-called agency mortgage-backed securities after announcing in September that it would extend the timeline for its $1.25 trillion program to March 31 from year-end. Whitney said that banks are only originating home loans that they can sell to Fannie Mae and Freddie Mac.
Why No One's Watching Fannie and Freddie An arcane legal matter has left the agency charged with overseeing Fannie Mae and Freddie Mac without an independent inspector general for nearly one year, setting off a storm of finger pointing and raising concerns from members of Congress over why the agency has gone without independent oversight for so long. Both the current and former directors of the Federal Housing Finance Agency have told Congress over the past year that they'd like to see an independent inspector general named to their agency, which was created in July 2008 and merged two different regulatory agencies, one with oversight of Fannie and Freddie, and the other that oversaw the Federal Home Loan Banks.
U.S. foreclosures, delinquencies jump in 3rd quarter U.S. mortgage delinquency rates and the percentage of loans that entered the foreclosure process jumped in the third quarter, with both reaching record highs, the Mortgage Bankers Association said on Thursday. The percentage of loans on which foreclosure actions were started rose to 1.42 percent in the third quarter, an all-time high and up from 1.36 percent in the second quarter. Rising U.S. unemployment propelled more mortgage delinquencies and foreclosures, a trend that will continue into next year, the MBA said.
Mortgage delinquencies jump to record levels, reports CNBC's Diana Olick.
FHA, Prime Mortgage Defaults at Records on Job Losses Foreclosures on prime mortgages and home loans insured by the Federal Housing Administration rose to three-decade highs in the third quarter, driven by the biggest job losses since the Great Depression. One out of every six FHA mortgages was late by at least one payment and 3.32 percent were in foreclosure, the highest for both since at least 1979, the Mortgage Bankers Association said today. The delinquency rate for prime fixed-rate mortgages, considered home loans with the least risk, rose to 5.8 percent and the foreclosure inventory rose to 1.95 percent, the highest since at least 1972.
U.S. Mortgage Delinquencies Reach a Record High Nearly one in 10 homeowners with mortgages were at least one payment behind in the third quarter, the Mortgage Bankers Association said Thursday. That is the highest figure since the association began keeping records in 1972. It is up from about one in 14 mortgage holders in the third quarter of 2008. "Clearly the results are being driven by changes in employment," Jay Brinkmann, the association's chief economist, said on a conference call with reporters. Five million more unemployed people over the last year has turned into about two million more overdue loans, he added.
Colorado foreclosures hit record in third quarter Colorado had a record-high number of new foreclosures in the third quarter, when new filings hit 12,468. The quarter ending Sept. 30 was the fourth consecutive quarter in which new foreclosure filings increased. For the year so far, new foreclosure filings in Colorado are up about 18 percent compared to the same period in 2008.
Geithner Sees "Economic Improvement" As Mortgage Delinquencies Hit All Time High We'll have whatever Timmy is drinking. Even as Mr. Geithner, in prepared congressional testimony, claims that the economy is "recovering", the MBA announced yet another record number of mortgage delinquencies. At over 14%, the number of American homeowners either in delinquency or in foreclosure was an all-time record in September, representing a ninth straight quarterly increase. According to the AP: "The Mortgage Bankers Association's quarterly report adds to fears that the housing market's recovery could be thwarted by the continuing surge in home loan defaults, especially as the unemployment rate keeps rising. Lost jobs, rather than the shady loans made during the housing boom, are now the main reason homeowners fall into default." Our hope is that maybe Mr. Geithner will also testify also as to what particular brand of Kool-Aid he drinks when he makes such baseless and irresponsible statements.
More members of middle class file for bankruptcy Staci Schubert's career has taken her from New York to California, from graphic designer to website designer to sales executive. Most recently, she launched a business as a designer of handbags and accessories. At 40 and with such accomplishments, Schubert is Middle Class America. She and her counterparts have long been the nation's backbone, because their steady jobs and purchasing power have helped drive our economy.
Another wave of foreclosures looms A second wave of foreclosures is poised to hit the market, potentially undermining housing recovery efforts as more homes add to the glut of inventory and drive down prices. These homes largely represent loans that are delinquent but have not yet resulted in foreclosure sales. About 7 million properties are destined to go into foreclosure, according to a September study by Amherst Securities Group, compared with 1.27 million properties in early 2005.
Foreclosures hitting more people with prime loans Delinquencies and foreclosures set 9th straight record in 3rd quarter as layoffs keep rising A rising proportion of fixed-rate home loans made to people with good credit are sinking into foreclosure, adding to concerns about the strength of the economic recovery. Driven by rising unemployment, such loans accounted for nearly 33 percent of new foreclosures last quarter. That compares with just 21 percent a year ago, when high-risk subprime loans made during the housing boom were the main reason for default. At the same time, the proportion of homeowners with a mortgage who were either behind on their payments or in foreclosure hit a record-high for the ninth straight quarter.
Florida mortgage delinquencies hit 25% While there have been signs of a recovery in the housing market, the number of people falling behind in payments remains high. As of the end of September, one-quarter of the mortgages in Florida were at least one payment past due or in foreclosure, according to statistics from the Mortgage Bankers Association. Out of the 3.4 million loans serviced in Florida in the third quarter, 12 percent were past due, an increase of 138 basis points. Of them, 4 percent were thirty days past due, 2 percent were 60 days or more past due and 6 percent were 90 days or more late.
Mortgage apps, housing starts fall Recent enthusiasm for the housing market appears to be waning as mortgage applications and new-home construction decline. The Mortgage Bankers Association says its index of applications fell 2 percent for the week ended Nov. 13 as purchase applications tumbled to a 12-year low. Some analysts say mortgage activity will pick up now that President Obama has signed an extension of the home-buyer's tax credit through April.
FHA-Backed Lending Is a 'Train Wreck,' Toll Says The Federal Housing Administration, the agency that insures home purchases made with down payments as small as 3.5 percent, may create another lending crisis, Toll Brothers Inc. Chief Executive Officer Robert Toll said. "Yesterday's subprime is today's FHA," Toll said today at a New York conference for builders sponsored by UBS AG. "It's a definite train wreck and the flag will go up in the next couple of months: Bail us out. Give us more money." Toll Brothers is largest U.S. luxury homes builder.
China's Housing Bubble Trouble Is there a property bubble emerging in China? As ever, getting an answer is like nailing jelly to a wall. Property prices across 70 large and medium-sized cities rose 3.9% on-year in October, the fastest annual growth rate this year and the fifth month in a row prices have gone up. Still, a recent World Bank report suggests that income growth in China is keeping up with price rises. And fundamental demand for improved housing should provide long-term support for Chinese house prices.
Taking Sides Over Need for Jobs Bill With the unemployment rate at 10.2% and rising, pressure to do something -- anything -- to create jobs is mounting. The question is what the U.S. government can, should and will do about it. One camp says: Just wait. . . . . . . . Another camp -- which include politicians from both parties and several Obama economic and political advisers -- wants government to speed the arrival of the recovery's hiring stage.
The 'Real' Jobless Rate: 17.5% Of Workers Are Unemployed As experts debate the potential speed of the US recovery, one figure looms large but is often overlooked: nearly 1 in 5 Americans is either out of work or under-employed. According to the government's broadest measure of unemployment, some 17.5 percent are either without a job entirely or underemployed. The so-called U-6 number is at the highest rate since becoming an official labor statistic in 1994.
U.S. recovery seen subdued, jobless rate high: OECD The U.S. economic recovery will be weaker than after previous deep recessions, and the high jobless rate will decline only slowly, the OECD said on Thursday. In its twice-yearly economic outlook, the Organization for Economic Cooperation and Development said the U.S. Federal Reserve and the White House must begin to withdraw economic supports as growth becomes self-sustaining. "Gauging the appropriate timing will not be a simple task, but prolonged stimulus risks unanchoring inflation expectations and destabilizing asset markets," the OECD said.
Unemployment compensation tax will surge for employers The state's trust fund for unemployment benefits is depleted, and employers will have to pay much higher taxes to refill it. Florida employers will soon be asked to pay more -- a lot more -- to cover the cost of unemployment compensation, adding yet another thorn in the side of businesses struggling to recover from the economic downturn. For employers now paying the lowest rate, the tax will jump from $8.40 per employee to $100.30, the state Revenue Department said Wednesday. "That sounds like a 1,000 percent increase," Kevin Rusk, owner of the Titanic Brewery and Restaurant in Coral Gables, said after hearing the news. "That's absurd."
Does It Pay, at the Margin, to Work and Save? -- Measuring Effective Marginal Taxes on Americans’ Labor Supply and Saving Households both want and need to understand the incentives they face at the margin for working and saving. Yet any American seeking to understand her total effective net marginal tax on either choice faces a daunting challenge. First, she needs to consider a host of taxes and transfers including federal personal income taxes, federal corporate income taxes, federal payroll taxes, federal excise taxes, state personal income taxes, state corporate income taxes, state sales taxes, state excise taxes, Social Security benefits, welfare benefits (TAFDC), Supplemental Security Income benefits (SSI), Medicaid benefits, Medicare benefit, food stamps, nutrition benefits (WIC), and energy assistance benefits (LIHEAP). Second, she needs to understand in very fine detail how each of these taxes and transfers is calculated.
Your congressman's padded retirement plan [How's YOUR retirement plan working out for you?] After serving 18 years in Congress, former Rep. William Jefferson of Louisiana, a Democrat, will continue his service in a different federal institution -- prison. He was sentenced recently to serve 13 years for bribery. But his fellow prisoners will have to forgive Jefferson if he grins and whistles as he stamps out license plates. That's because he is still eligible for a guaranteed $50,000 pension in his first year of retirement, which will increase each year thereafter with the cost of living.
Don’t fall in the poverty trap – you might never get out… Until you earn about $40,000 a year, you’re pretty much stuck in poverty, an economists’ numbers show. In fact, until you get past $40,000 a year, any raise or higher paying job you get might actually sink you deeper into poverty. Take a look at this story from economist Jeff Liebman, who now works in the Obama Administration.
The Poverty Trap Chapter 20 of my favorite textbook has a section on antipoverty programs and work incentives. One basic point is that when multiple income-based programs are piled on top on one another, the implicit marginal tax rate can reach or even exceed 100 percent. The chart above (source, via Kling) illustrates this phenomenon. It shows income after taxes and transfers as a function of earned income. Notice that as earned income rises from about $15,000 to $30,000, income after taxes and transfers is roughly flat. Indeed, it could even fall. The bottom line: If you are poor, the government is inadvertently ensuring that you have little incentive to try to improve your condition
Reid lays out $849B Senate health care bill Senate Majority Leader Harry Reid unveiled an $849 billion health care bill Wednesday that advanced President Obama's broad vision to revamp the health insurance market but left key moderate Democrats uncommitted. Introduction of the bill - which Reid said represented "the last leg of this journey we've been on for a long time" - cleared the way for a vote this week on whether to start debate on health care as Senate leaders race to finish a bill by year's end.
Health care reform = socialized medicine
James Murdoch sees smaller role for newspapers Newspapers will play a smaller role in News Corp's (NWSA.O) operations in future as the group focuses on more profitable pay-TV operations in western Europe and India, the group's head of Europe and Asia said. James Murdoch, son of News Corp chief executive Rupert Murdoch, also said the company would remain conservative in its use of capital. "We do not feel, looking at the overall environment, that we are out of the woods yet," he said. "We have got to continue to be pretty cautious."
AOL to cut one-third of workforce AOL plans to cut one-third of its workforce, or about 2,500 jobs, in an effort to trim some $300 million in annual costs as part of the Internet company's planned spin-off from Time Warner Inc. The struggling Web pioneer, which is now focused primarily on advertising-supported content, said on Thursday that it would start with a volunteer buyout program and move on to involuntary layoffs if enough workers do not step up.
Time Warner to spin off AOL on December 9 Media conglomerate Time Warner Inc said on Monday it will spin off its AOL unit to shareholders on December 9, nine tumultuous years after one of the most disastrous corporate mergers in history. Time Warner shareholders of record on November 27 will receive an AOL stock dividend for every 11 shares of Time Warner common stock they hold.
Michael Savage - Pastor James David Manning Interview - Monday, November 16, 2009
Homeland Security Launches Investigation of Dr Manning Hon. James David Manning, PhD Pastor and Radio Show Host of the Manning Report, was visited at his Church on Nov. 16, 2009 at 6 PM. By CIA agents claiming to represent HLS and 2 NYC detectives. They questioned him about a video he had done called "Tea Party Members Go Viral on the Birth Certificate". He expects to be arrested soon as a result of this visit. When he is arrested he expects this to go before the courts and the issue of the Birth Certificate will have to be brought out as Obama is not a real President of the USA and they would have to prove that he really is.
What Is So Patriotic About Hysteria? The loudest voices on the right never tire of telling us that they are the truest patriots. They claim to be the deepest believers in our system, the strongest defenders of our Constitution, the most upbeat, bold and courageous Americans anywhere. But now that the government is finally prepared to put the perpetrators of the Sept. 11 terror attacks on trial, these same patriots are the first to spread doubt, instigate anxiety and abandon constitutional principles. . . . . . . . . As a nation, we should have the confidence to make the case against these murderers according to our laws and Constitution, without fear of their propaganda or violence. Every precaution should be taken to protect national security and public safety-and then our system will prevail over their perverse ideology.
Study says Iowa tax system unfair to poor DES MOINES, Iowa - Iowa's tax laws force poor residents to pay a much higher percentage of their income in taxes than the state's wealthiest citizens, according to two researchers who called for lawmakers to overhaul the system. "It's an old problem and a persistent one," said Peter Fisher, research director of the Iowa Policy Project, an Iowa City-based public policy organization, on Wednesday. "For Iowa to treat the majority of its citizens fairly we need income tax reform to confront the realities of this report."
New York's 'Shadow Government' of Authorities Faces New Rules New York state's "shadow government" of more than 700 authorities, many with the power to sell bonds, will operate with greater oversight and new rules for board members, Governor David Paterson and Assembly and Senate leaders said yesterday. The proposed law would require organizations such as the Metropolitan Transportation Authority and the New York Thruway Authority to file financial reports and borrowing plans. Hundreds of local government industrial development authorities also are covered in the planned law unveiled yesterday. "This is a fundamental reform of government authorities that will benefit the public," said Richard Brodsky, a Democratic assemblyman from Westchester County who is a sponsor of the measure. "What had been rogue institutions will be forced to operate with more transparency and accountability."
New tale of Detroit's woe: Pontiac Silverdome sold for $583,000 Pontiac, Mich., sold the 80,300-seat Silverdome for $583,000 Wednesday. The former home of the Detroit Lions cost $55.7 million to build in 1975. Ever want to own a domed football stadium? The question was a plausible one Monday when it was announced that the Pontiac Silverdome - once home to the NFL's Detroit Lions - was sold for $583,000, or about 1 percent of the $55.7 million it took to build in 1975. The Silverdome, an 80,300-seat stadium located in Pontiac, Mich., is the latest example of how comprehensively the recession has socked southeastern Michigan.
Behold the Food of the Future Want some Frankenfood with your superfood? How about those functional foods? As you might imagine, a preview of what we may be eating-or at least what we may be told is good for us-in the future is best taken with a grain of salt. Alex Renton, a journalist from Britain's Times, allowed himself to become one of many guinea pigs trying some future-forward foodstuffs and listening to sponsors' pitches in two European venues. A taste of things to come
Imminent slim while you guzzle:
Fresh just got better:
Where would you like to be served?
Oprah Winfrey to Leave Talk Show in 2011 Harpo President Announces Oprah Winfrey's Plans to Step Down From Iconic Show After more than 20 years at the top of the daytime talk show game, Oprah Winfrey's calling it quits. According to insiders, Winfrey informed her staff of her decision late this afternoon in a company meeting, described as "emotional, supportive and respectful." This afternoon, Tim Bennett, president of Winfrey's Harpo production house, announced that the media mogul will step off the "Oprah" set in September 2011. He said Winfrey will confirm the news on Friday's edition of her show. "The Oprah Winfrey Show" will not move on to the cable Oprah Winfrey Network or OWN.
China Commercial Aircraft plans plant in Shanghai Commercial Aircraft Corp. of China plans to build an assembly line for its homegrown C919 jetliners in Shanghai, the latest step in the country's ambitions to become a leader in world aviation. The company announced the showcase project following a signing ceremony Wednesday with officials of Shanghai's Pudong district, where the plant will be located.
Gerald Celente: Terror Strikes Probable in 2010 (Part 1 of 2)
Gerald Celente: Terror Strikes Probable in 2010 (Part 2 of 2)
pt 1/4 Gerald Celente on Jeff Rense 12 Nov 2009
pt 2/4 Gerald Celente on Jeff Rense 12 Nov 2009
pt 3/4 Gerald Celente on Jeff Rense 12 Nov 2009
pt 4/4 Gerald Celente on Jeff Rense 12 Nov 2009
Glenn Beck- A New World Order? Aired Live November 17, 2009-(Clip 1) Damon Vickers visits the Glenn Beck program to talk about the real possibility that a New World Order and One World Government isn't far away.
Country at a Crossroads The U.S. economy is in uncertain times. Analysts are split between those seeing recovery and those fearing a second downturn. This confusion is being echoed in the highest levels of government as President Obama simultaneously speaks about the need for more federal spending and warns of the dangers of increased debt. As the volatile markets indicate, investors are not only confused - they are seriously concerned.
China quietly introduces new financial system [posted Nov 17th] China has stealthily introduced a new financial system based on the renminbi which is well on its way to becoming fully convertible, according to a high-level Chinese source. In addition, China is purchasing 10,000 tons of gold to back up a new fund designed to develop and market heretofore forbidden and suppressed technologies. The fund will be based outside of China and will be controlled by prominent members of the Chinese overseas community. The gold purchase will take some time because of the logistics of transporting it and the Chinese wish to test it thoroughly. Both the Chinese government and MI6 now confirm reports that much of the gold sold by the Federal Reserve Board over the past decade is in fact gold plated tungsten. For its part, the renminbi is now convertible with South American currencies, the rouble, Middle-Eastern currencies, the yen, South East Asian currencies and African currencies. “We will slowly introduce our new financial system in parallel with the old one and hope that people steadily migrate towards it,” the Chinese official says. Meanwhile, the latest G20 meeting ended in acrimony and chaos. The leadership of the West is in total disarray and will remain so until the Federal Reserve Board’s bankruptcy becomes visible even to brainwashed section of the Western public. This is now expected by January or February. Both MI6 and a senior Chinese government source now predict the collapse of the Federal Reserve dollar by that time. We are also hearing various reports that many Pentagon and other US alphabet suit agency figures with both US and Israeli citizenship have recently fled to Israel. Things are coming to a head.
China is proposing to replace the US dollar with the Hong Kong dollar [Nov 7, 2009 post] At a top secret high-finance meeting scheduled for this weekend, China will propose that the US dollar be replaced by the Hong Kong dollar, according to a senior MI6 source. The proposal is under serious consideration by the backers of the new financial system. As we have previously reported most US dollars ever created are now backed by gold at the rate of 1/28th of a gram per dollar. The fraudulent Federal Reserve Board fiat dollars issued after September, 2008 are not. Nor are any dollars derived from fraudulent "derivatives." So, to replace the US dollar with the Hong Kong dollar all that would be required would be to rename the gold-backed dollars. Any new Hong Kong dollars issued would be backed by the Renminbi, according to the Chinese proposal. It might also be a good idea to rename the Hong Kong dollar the Hong Kong Yen (pronounced Yuan in Chinese). This is not for chauvinistic Asian reasons but simply because the dollar symbol $, is derived from a Satanic image of two snakes fighting while the word Yen means “fountain of life.”
The Federal Reserve note will fall to 0.03 cents by January [Nov 6th post] It can now be stated that all the US dollars connected to legitimate commerce are backed by gold at the rate of 1/28th of a gram per dollar. The remaining Federal Reserve Board debt notes will soon fall in value to 0.03 cents, according to extremely high level financial sources. This means all legitimate businessmen and workers paid in US dollars have nothing to worry about. However, high level con-artists selling financial “derivatives,” will be left with 0.03% of what they thought they owned. It is amazing to see how many intelligent “well informed” people still do not have a clue about what is going on. If you connect the dots in the corporate propaganda media, you should be able to see for yourself without going to so-called “conspiracy” news sites. Among countries that have publicly said they will no longer use dollars for trade with each other can be found: China, Russia, Japan, South America, the Arab league, Turkey, Iran etc. The final battle against the George Bush Senior Thule Society Nazis continues to rage and we must remain vigilant until the very end. In Japan Nazi stooges like former Prime Ministers Koizumi and Nakasone, along with their slave boy Heizo Takenaka, are trying to steal vast amounts of money from the Japanese people to hand over to Obama during his visit scheduled for next week. This will not happen. The Black Dragon Society is ready to go into full battle mode to prevent it. If Obama is willing to go to Hiroshima and Nagasaki and apologize for US war crimes against Japan, then he will be given some money, but only enough to keep him going until January.
Obama: Too much debt could fuel double-dip recession President Barack Obama gave his sternest warning yet about the need to contain rising U.S. deficits, saying on Wednesday that if government debt were to pile up too much, it could lead to a double-dip recession. With the U.S. unemployment rate at 10.2 percent, Obama told Fox News his administration faces a delicate balance of trying to boost the economy and spur job creation while putting the economy on a path toward long-term deficit reduction.
What If They Stop Buying Our Debt? “I have always depended on the kindness of strangers,” said Blanche DuBois, in the final words of the play A Streetcar Named Desire. Well, don’t we all. Many citizens probably still cling to the old saw that public debt doesn’t matter because “we owe it to ourselves.” Wrong. Debt always matters. And as for whom we owe it to, it is a lot of kind (or, at least, not yet unkind) strangers. As recently as 1970, foreign holders of U.S. debt were essentially non-existent. But their slice of our obligation pie has steadily increased, especially over the past two decades, until now foreign governments and international investors hold about 35% of Treasuries, as the following chart reveals.
Gold Rush to Prevail on Demand, Low Rates, Weak Dollar The latest rush to gold is providing plenty of market buzz even on the quietest days. Wednesday was a good example. The metal rose to $1,141.20 an ounce, after swinging between $1,136 and a new high of $1,153.40. As gold tallied its eighth record session this month, stocks were treading water, with the Dow losing 11 to 10,424 and the S&P 500 giving up less than a point to 1109. The Nasdaq was down 10 at 2193. The dollar was weaker, and many commodities edged higher.
Gold above $1130. Can $2000/ounce be far away? There is no end to the rise and rise of gold and the yellow metal has crossed $1,130 per ounce in the global market on Monday. With this continuous rise, fuelled by the weakening dollar, gold has made fun of all forecast by big analysts and stayed on course to cross $2,000 per ounce in the coming months. Anticipating a huge rise in gold prices again, many investors have rushed in to buy gold as an investment. The dollar slipped as much as 0.6 per cent against the euro in the past few days. Bullion usually gains when the US currency declines.
Gold Climbs to Record as Falling Dollar Boosts Investor Demand Gold climbed to a record in New York as investors bought precious metals as an alternative to holding weaker dollars. Silver, platinum and palladium reached the highest prices in at least 14 months. Gold futures jumped to $1,153.40 an ounce, the highest ever, as the dollar declined as much as 0.8 percent against the euro. Before today, the U.S. Dollar Index, a six-currency gauge of the greenback’s value, slid 7.3 percent this year as bullion climbed 29 percent in New York. “People are buying gold to protect themselves from the decline in the dollar,” said Stephen Platt, a commodity analyst at Archer Financial Services Inc. in Chicago. “We’re going to see further devaluation in the dollar and there’s a desire for diversification into gold.”
Gold price to touch $1,200 soon: Standard Bank Three weeks ago, we reported on gold support in the physical market despite gold reaching new highs at that time (the dollar was trading at $1.4850-$1.4900 against the euro). This morning, gold touched another high, at $1,148, while the dollar is only slightly weaker, at $1.4950 against the euro. Still we see gold upside, as support in the physical market remains intact. Should gold reach $1,150 in coming days, $1,200 may be on the cards.
The "Tungsten-Filled Gold Bar" Conspiracy Discussed On CNBC
Zinc Dimes, Tungsten Gold & Lost Interest In 1964 the USGovt introduced the zinc dimes clad with silver. They at least admitted the debauchery publicly. Now pre-1964 silver coins are all considered different, and valued differently too, higher. Rome committed the same coinage fraud 1900 years ago. Their Empire went bust as the city burned almost concurrently. Ayn Rand is a guiding light for Alan Greenspan, the enabling destroyer of the US banking system, destroyer of the US household archipelago, and dispatcher of the US industrial base to Asia. He is the hero icon worshipped by Wall Street. The irony is thick, that his career was spent following Old Europe orders that delivered the slow motion coup de grace to the American Empire. Ayn Rand wrote "If you want to know when a society is set to vanish, watch the money.
Fake Gold portends Silver Explosion! . . . . What the fake gold bar story does is inject DOUBT on the accepted supply/demand dynamics of a shadowy global monetary reserve asset that has been blindly neglected for many years. The existence of fake gold bars, if true, is an amazing story and has the power to completely upend the global monetary system. Over the past 40 years, the reporting of the "official gold supply" has been focused almost entirely upon the work presented in the GFMS annual Gold Survey. This company's report is heavily cited as the "world's gold authority" but, as far as I know, GFMS neither questions the accuracy of its surveyed data nor verifies the quality, quantity or ownership rights of their reported global gold holdings. My friend Adrian Douglas over at GATA and MarketForceAnalysis.com helped expose this highly questionable operation with his article GFMS cooks books to make gold look bad.
U.K. Royal Mint Quadruples Gold-Coin Output as Investors Chase Diversity The U.K.’s Royal Mint, established in the 13th century, more than quadrupled production of gold coins in the third quarter after demand for the metal increased as investors sought to hedge against a weakening dollar. Output rose to 32,735.8 ounces from 7,500.2 ounces a year before, according to data obtained by Bloomberg News under a Freedom of Information Act request. Production in the first nine months more than trebled to 100,391.3 ounces, the data show.
Gold prices surge to historic record of $1147 Gold prices are surging day by day, in the wake of the weakening of the US dollar. Investors pouring in money to the bullion market led gold prices to a historic record of $1147.05 an ounce. While spot gold was seen trading at $1147.05 an ounce, US gold futures for December delivery was at $1146.48 an ounce. Prices have picked up significant upward momentum in recent weeks after news central banks are turning net buyers of gold pushed the metal through a series of key technical resistance levels to record highs.
Gold forges record peak near $1,150 LONDON: Gold prices rose on Wednesday to an all-time high near 1,150 dollars an ounce, boosted by the weak level of the US currency, analysts said. In late morning trading here, gold hit a record high point of 1,148.03 dollars an ounce on the London Bullion Market after reaching a series of records in recent weeks. In late morning European deals in the foreign exchange market, the euro climbed as high as 1.4960 dollars. A weak greenback makes dollar-priced assets such as gold cheaper for buyers using stronger currencies, tending to stimulate demand for them.
Gold futures finish higher after passing $1,150 level Trader: unless intervention talk translates into action, trend should continue Gold rallied to yet another record high Wednesday, as weakness in the dollar weakness continued, along with the trend of borrowing the U.S. currency at low cost and using it to buy the metal and other commodities. "Traders are like vultures, they find something that works and stick with it," said Yu-Dee Chang, president and head trader at ACE Investment Strategists. The metal's 10-week spike is the result of "neither inflation nor geopolitical developments. The dollar-carry trade, as applied to the commodities sector, remains the suspect of choice," Jon Nadler, senior analyst at Kitco Metals Inc., wrote in a note.
Gold, housing starts, the CPI
Gold hits record near $1,150/oz as dollar slips Gold hit a fresh record high near $1,150 an ounce on Wednesday, boosting precious metals across the board. Gold hit a fresh record high near $1,150 an ounce on Wednesday, boosting precious metals across the board, as a dip in the dollar index added to momentum buying as prices broke through key technical resistance levels. In non-U.S. dollar terms, gold also climbed, hitting multi-month highs when priced in the euro, sterling and the Australian dollar. Spot gold hit a high of $1,147.45 and was at $1,146.05 an ounce at 0948 GMT, against $1,141.50 late in New York on Tuesday.
Gold and Oil trade higher as dollar slips back Gold continues its relentless march higher as another significant mark was hit in European trading today. After US CPI came in slightly above forecasts, Gold hit a high of $1,153 as investors start to worry about possible inflation concerns. It was also helped by comments by St.Louis Fed President Bullard who suggested that US policy would remain loose until 2012.
The Golden Constant SINCE STOCK-MARKET BULLS never read history (meaning anything from the day before yesterday and least of all the pink pages' price/earnings column today), the library shelves marked "332" are typically left free for bears and gold investors to roam. Given how long the stock-bull of 1982-2000 ran, you can see why. During that time gold lost three-quarters of its purchasing power. Only the grand sweep of history has proved that the glass is neither half-empty or full, but shattered, as the much-fabled "gold bug" always believed. "Gold has two interesting properties: it is cherished and it is indestructible. It is never cast away and it never diminishes, except by outright loss..."
Weak inflation data helping gold price rise: HSBC Today’s market news and analysis roundup begins with the –by now- ‘normal’ observance of yet another price record having been achieved by gold. During the hours preceding the New York session’s opening, spot gold touched the $1150 level (plus 30 cents) as the US dollar broke under the 75 mark on the trade weighted index once again. The metal remains overbought and continues to dart around in uncharted territory. Other commodities also climbed, with oil rising back towards $80 a barrel and copper to 13-1/3 month highs near $7,000 a tonne, as the US currency traded at 1.493 against the euro. This morning’s main trading focus was on US CPI figures and US housing starts.
Gold-Silver ratio may go below 60 Gold opened at 1131.25/1132.25 and dipped marginally as the trading day began, reaching a low of 1130.50/1131.50. This move reversed, despite a rallying dollar and weaker equity markets and climbed for much of the session, finding mild resistance near 1136.00. It briefly retreated, but stayed well supported on the back of more fund buying, carrying gold to an intraday high of 1139.75/1140.75. Light profit taking took it lower as the day unwound, finally settling at 1138.75/1139.75. Silver opened at 1822.00/1825.00 in New York.
China: Gold, silver, platinum jewelry market booms China, which is a competitive jewellery manufacturer and consumer, will gain a higher growth of sales in jewellery market in 2010. Sales of jewellery in China will achieve $180 billion, 10 per cent of the world total. China is set to replace European countries and America and become the most important luxury consumer market after Japan.
Now, gold to fight terror! As the world is wondering why gold prices are soaring so fast, another important factor has come to light to boost the gold prices further. Gold is now helpful in fighting terror also. According to a report published in Times Online, British army is now trying to use gold to bribe Taleban fighters in Afghanistan. The UK military establishment thinks that the glitter of gold can lure Taleban recruits and they can be used to fight against the terror outfit.
Why India rushed to buy gold from IMF Gold price is on a heady forward move. Yellow metal passed through the psychological price level of $1000 per ounce two months back, and since then gold price has been moving up at a scorching pace. One main reason why gold price surged to nearly touch $1150 this week is the recent decision by India to buy 200 tonnes of gold from the International Monetary Fund (IMF).
Scientists: South Africa's Gold Reserves Are 90% Lower Than Thought Peak gold believers will be pleased to learn that South Africa's gold reserves are dwindling. About 95% of the reserves have been unearthed and discovered already in Witwatersrand, the biggest gold field in the world, meaning gold is probably going to head higher as investors freak out over limited supply:
Bank of Russia to buy gold from State Depository Russia’s central bank said it is ready to buy any gold that may be sold by the State Depository for Precious Metals and Gems. In a statement issued here, the central bank said, "In certain conditions, we will be ready to buy everything the State Depository offers for sale”. The Central Bank's statement to buy up gold comes amid increasing international assets held by the country's top bank, which grew 5.1% in October to $434 billion.
Why Warren Buffett hates to invest in gold Every investor in the world is obsessed with gold these days. For the last one decade, gold has emerged as the best performing asset, be it for legendary commodities investors like Jim Rogers or for humble households in India that keep invested by buying gold. But is everyone lured by gold? No, not everyone. One person who has not been passionate about investing in gold--but has been investing in most other stocks--is the world's most erudite investor Warren Buffett. Buffett is not enarmoured to investing in gold. He has not invested in gold. And he is not obsessed with gold. In fact, he hates to invest in gold, even as the yellow metal price is surging to record $1150 per ounce this week. . . . . . . . His theory seems to be that the best protection against inflation comes by investing in companies that have the ability to pass on price increases.
As Gold Prices Continue to Soar, Perfectly-Timed San Francisco Hard Assets Investment Conference Entices National Television Attention As gold prices continue to surge, more than 2000 investors turn their sights on the San Francisco Hard Assets Investment Conference where they will hear some of the nation's top gold experts present on the soaring price of gold. The San Francisco Hard Assets Conference, www.hardassetssf.com, to be held on November 21-22 at the San Francisco Marriott, offers a rare opportunity for individual investors and financial planners to get first-hand knowledge from top economists and forecasters.
Fund manager Paulson to start new gold fund Billionaire hedge fund manager John Paulson is launching a new gold fund, which will include $250 million of his own personal investment, the Wall Street Journal reported on Wednesday. Paulson is among a number of hedge funds managers stocking up on the precious metal, for centuries considered a hedge against inflation, as governments around the world ramp up spending to combat recession. Citing three investors, the Journal said the fund will focus on gold mining stocks and gold-related investments. Paulson spoke about the new fund, which will begin on January 1, at a meeting with his investors in New York on Tuesday.
Housing savant Paulson now looks to gold Paulson & Co. to buy shares of gold-related investments in 2010. Paulson to invest $250 million. Billionaire John Paulson, who earned his hedge fund billions when he bet against the housing bubble, is waging a new noteworthy bet. Paulson is investing as much as $250 million in a new gold fund next year. His hedge fund, Paulson & Co., will launch the fund Jan. 1, 2010 and will buy shares of gold miners and make other investments related to the precious yellow metal, a source familiar with the firm's plans told CNNMoney.com. Paulson discussed the fund at a meeting with investors on Tuesday.
What Has Government Done to the Dollar? "No legal tender law is ever needed to make men take good money; its only use is to make them take bad money." ~ Stephen T. Byington The U.S. dollar has changed from being a paper certificate for a tangible asset to a fiat currency - a paper note declared legal tender. By looking at the history of American paper money one can clearly see the distinction.
IMF talks of dollar demise The imperative of greater global currency stability means the world can no longer rely on a currency issued by a single country, the head of the IMF said yesterday. Dominique Strauss-Kahn, managing director of the International Monetary Fund, restated his view that a new global currency might evolve out of the Special Drawing Right, the Fund’s in-house unit of account. “That probably has to be a basket,” he said of the eventual replacement for the dollar. “In a globalised world there is no domestic solution.”
Dollar down on outlook for low U.S. interest rates The dollar slid against the euro on Wednesday after notching its biggest rise in three weeks on Tuesday, with fresh data doing little to alter the view that U.S. interest rates will remain at record lows well into 2010. Reports showing slightly higher-than-expected U.S. inflation and a slide in new home construction helped keep euro gains below $1.50. For more on U.S. data, see [ID:nN1899353]. Most dealers say the dollar's longer-term declining trend is intact and noted that although the Federal Reserve may be in the early stages of withdrawing its huge stimulus measures, it is still nowhere near raising interest rates from record lows.
Dollar Woes Are Good News for Europe’s Markets Just about everyone is down on the U.S. dollar. It has fewer friends than an airline passenger who admits to having swine flu during a flight. Billionaire investor George Soros says it’s creating “dangerous imbalances.” Dominique Strauss-Kahn, the managing director of the International Monetary Fund, talks of a new global currency dominating the world in a decade’s time. The reasons aren’t difficult to figure out. The U.S. economy is in bad shape, the Federal Reserve is printing money like crazy, and the budget deficit is out of control.
Pathology of a Crisis The coroner’s report left no doubt as to the cause of death: toxic loans. That was the conclusion of a financial autopsy that federal officials performed on Haven Trust Bank, a small bank in Duluth, Ga., that collapsed last December. In what sounds like an episode of “CSI: Wall Street,” dozens of government investigators — the coroners of the financial crisis — are conducting post-mortems on failed lenders across the nation. Their findings paint a striking portrait of management missteps and regulatory lapses.
Société Générale tells clients how to prepare for 'global collapse' Société Générale has advised clients to be ready for a possible "global economic collapse" over the next two years, mapping a strategy of defensive investments to avoid wealth destruction. In a report entitled "Worst-case debt scenario", the bank's asset team said state rescue packages over the last year have merely transferred private liabilities onto sagging sovereign shoulders, creating a fresh set of problems. Overall debt is still far too high in almost all rich economies as a share of GDP (350% in the US), whether public or private. It must be reduced by the hard slog of "deleveraging", for years. "As yet, nobody can say with any certainty whether we have in fact escaped the prospect of a global economic collapse," said the 68-page report, headed by asset chief Daniel Fermon. It is an exploration of the dangers, not a forecast.
World Bank: yuan to become alternative reserve currency World Bank President Robert Zoellick said on Wednesday that the U.S. dollar's role as a reserve currency was "relatively secure", but the Chinese yuan will provide an alternative over time. "Over the next 10-15 years, you will firstly see renminbi to be internationalised and provide an alternative," he said at a World Bank conference in Singapore.
Have you given much thought about the money in your banking accounts lately? Do you know if it's safe?
Have you thought about what might happen if your bank fails?
Did you know you could be left in the lurch for days, weeks, even months before you get your money back from the FDIC?
What happens if the FDIC can't cover your funds?
How do you find a safe bank to protect your deposits right now?
Muni Yield Gap Widens to 9-Year High Amid Inflation Concerns The gap between benchmark short- and long-term municipal bond yields widened to the highest in at least nine years today as concern that inflation may accelerate led investors to favor shorter-term investments. Yields on two-year general obligation notes fell 3 basis points, or 0.03 percentage point, to 1.06 percent, while those on 30-year bonds held steady at 5.02 percent, according to Municipal Market Advisors. The difference of 396 basis points is the biggest yet, based on data since 2001 from the Concord, Massachusetts-based independent research firm.
Kanjorski Plan to Dismantle Banks With Systemic Risk Passed by House Panel A House committee approved giving the U.S. authority to break up healthy, well-capitalized firms whose size threatens the economy, a step Republicans said would create a “huge accumulation” of power. The House Financial Services Committee voted 38-29 today on an amendment that would let regulators dismantle a firm, limit mergers and acquisitions and force an end to activities deemed systemically risky. The financial industry opposed the measure, which is part of legislation to overhaul Wall Street rules.
Another Obama nominee runs into tax problems Obama choice for Treasury post becomes fifth nominee to run into tax problems President Barack Obama's choice for a top job in the Treasury Department did not disclose all of her late tax payments until she was repeatedly prodded by Senate investigators, a congressional report issued Wednesday said. Obama's nominee for undersecretary of the Treasury for international affairs, Lael Brainard, is the fifth presidential nominee to reveal tax issues during the congressional vetting process. Brainard was late in paying real estate taxes in 2005, 2006 and 2007 on property in Northern Virginia, according to the report by the Senate Finance Committee staff.
Senator Kerry Says U.S. Is Reviewing a Capital Increase for the World Bank The U.S. government is reviewing whether the World Bank needs a capital increase after several development banks requested more funds, said John Kerry, the Massachusetts Democrat who chairs the Senate Foreign Relations Committee. “We are going through a careful process to size up the capital needs of each institution, determine whether additional resources are warranted, and, if new funding is appropriate, whether is should be temporary or permanent,” he said in a speech at the World Bank’s Washington headquarters today.
China's 14 Dominoes Of Destruction China has delivered the world's most spectacular economic growth story in history. Whatever your political beliefs, the Chinese have lifted millions out of poverty, more than any aid organization in such a short period of time. China also remains a fascinating nation with one of the richest cultural heritages in the world. Yet the government has massively distorted the nation's economic system over the last few decades, leading to fourteen dangerous Chinese excesses, each of which is only sustainable by inflating the others!
Goldman’s $500 Million Is Day Late, Dollar Short So now we know the value Goldman Sachs Group Inc. places on salving its conscience for screwing up what Chief Executive Officer Lloyd Blankfein called “God’s work.” It seems that $500 million is all it takes to compensate the world for Goldman’s role in creating the credit crunch. Goldman said yesterday it’s setting up a “10,000 Small Businesses Initiative.” It will shell out $200 million to educational institutions to help guide business owners, with a further $300 million invested for lending and philanthropy aimed at community development groups. Billionaire investor Warren Buffett, whose Berkshire Hathaway Inc. is the largest Goldman shareholder, is joining the initiative.
Fed Will Cut Maximum Maturity of Discount Window Loans to 28 Days From 90 The Federal Reserve said it will reduce the maximum maturity on discount-window loans to 28 days from 90 days as it moves to unwind some of the emergency measures introduced to fight the credit crisis. The Fed Board cited “continued improvement in financial market conditions” in today’s announcement and said the change will take effect Jan. 14. The decision is in keeping with Fed officials’ efforts to scale back some facilities as market demand wanes. The discount window, used for direct loans to banks, was one of the first tools that Fed Chairman Ben S. Bernanke deployed to thaw credit markets as the crisis began to unfold in August 2007.
Geithner Says Banks Have ‘Obligation’ to Lend More Small Business Loans Key to `Self-Sustaining' U.S. Recovery Treasury Secretary Timothy Geithner urged U.S. banks to boost lending to small businesses and consumers who still face “very challenging” credit conditions and rising unemployment. “Banks bear some responsibility for the extent of the damage caused by the crisis,” Geithner said today at a small- business conference in Washington. “You carry a substantial obligation to help our communities get back on their feet.”
Geithner: Tight Small Business Credit Hurts Recovery U.S. Treasury Secretary Timothy Geithner on Wednesday called on banks to "get back to the business of lending" and said a tough credit environment for small businesses will slow economic recovery. "Without increased access to credit for American families and small businesses, growth will be weaker, companies will defer long-term investments and we will not be able to create a recovery that is self-sustaining and led by private demand," Geithner said in opening remarks to a small-business financing forum hosted by the Treasury.
Bernanke Digs Up Some Old Words What a ride so far this week for the currencies! Gold? Well, at one point gold had shot up $24 on the day! It topped out at $1,142... The shiny metal then gave some back on profit taking, but gold holders have got to love it! Those who keep waiting for a pullback. Well, they might still be waiting when the cows come home. Yesterday, we had a couple of Fed Heads talking, but the Big Kahuna stood out and moved the markets with his statements... Here's the skinny... Big Ben was giving a speech, and said, "The Fed will monitor closely the currencies, and the Fed's policies will ensure that the dollar is strong."
Arrogant Fed hasn't learned a thing The bubbles, toils and troubles that nearly wrecked the financial system should've been obvious to the policymaking numbskulls whose monetary tricks made matters worse. When a teacher uses those words to describe a student, it's an isolated (if regrettable) situation. But the repercussions are widespread when "arrogant and incapable of learning" fits the Federal Reserve like a glove. Still clueless after all these bubbles Frederic Mishkin, a former member of the Fed's board of governors, wrote an article in last Tuesday's Financial Times that displayed that he, and presumably other Fed heads, have learned exactly nothing from the disastrous consequences of their activities in printing money over the past couple of decades.
Sarah Palin and the Future of Conservatism I'm sure I would like Sarah Palin if I got the chance to meet her. We share many things in common. She is still married to her first spouse, as am I. She has a Down syndrome son. I have a brother with Down syndrome. We share the same faith and we both like the outdoors. She is conservative on economic and social issues, and so am I. In her new book, "Going Rogue," Palin complains about her running mate's handlers, whom she says kept her from being herself. I have similar complaints. Those handlers also kept me from interviewing her. The handlers are long gone, of course, but still I cannot get close to her.
Housing Starts Show Sharp Drop; Inflation Still Tame Construction of new homes in the United States fell sharply last month, showing potential weakness in the economy's recovery, while consumer prices rose slightly more than expected. The Commerce Department said on Wednesday housing starts dropped 10.6 percent to a seasonally adjusted annual rate of 529,000 units, the lowest level since April and the percentage drop was the biggest since January. Financial markets had expected starts to rise to 600,000 units. September's housing starts were revised upwards to a 592,000 unit rate from the previously reported 590,000 units.
FDIC Sells Most Real Estate Since 1994 on U.S. Banking Debacle The Federal Deposit Insurance Corp. has already sold the most real estate this year since 1994 as the regulator takes over properties held by failed lenders. The FDIC raised $727 million from building and land sales in the first nine months of 2009 compared with $1.16 billion in the whole of 1994, according to FDIC data. The Washington-based agency sold 1,706 properties, according to its Web site, the highest number since 2,045 in 1996. The failure of 148 lenders since 2007 is giving homebuyers and real-estate investors the chance to purchase office buildings, undeveloped land for houses and even gas stations from the FDIC. The agency may also have hundreds of millions of dollars in loans for sale from shuttered banks.
U.S. Economy: Housing Fell as End of Credit Loomed Homebuilding in U.S. Unexpectedly Drops on Tax-Credit, Employment Concerns Residential construction in the U.S. unexpectedly dropped in October amid concern a homebuyer tax credit would expire, illustrating the market’s dependence on government help to sustain a recovery as job losses mount. Builders broke ground on 529,000 houses at an annual pace, down 11 percent from the prior month and the fewest since April’s record low, Commerce Department figures showed today in Washington. Data from the Labor Department signaled inflation will be of little concern for the Federal Reserve.
Housing starts plunge 11 percent in October Housing starts in October plummeted to their lowest level in six months as builders pulled back, worried that Congress might not extend the home-buyer tax credit scheduled to expire at the end of November. After rising during four of the previous five months, housing starts plunged 11 percent in October, the Commerce Department reported Wednesday. The unexpectedly steep decline reflects the extent to which home-building has recently been relying on government stimulus efforts.
Home construction at lowest point in 6 months Annual rate of construction falls 10.6% in October in a drop that surprises economists. Home builders initiated construction of far fewer new homes in October than the month before, a big and unexpected drop for the struggling industry, according to a government report issued Wednesday. Homebuilders began construction at an annual rate of 529,000 new homes during the month, 10.6% below the revised September rate of 592,000 and 30.7% below the 763,000 rate during October 2008. It was the lowest level of housing starts since April, when the annual rate was 479,000.
Real Estate - Getting Worse Though I am sure the National Association of Realtors has some statistic indicating that higher real estate prices are "right around the corner" (as they have every single month since before the crash started), real estate is getting worse. Wave 2 of the residential real estate crash is starting on cue and "walking away" from underwater mortgages has reached critical mass. The "big picture" real estate mortgage situation hasn't changed. There are some efforts to tinker with what must happen in real estate, but the reality is that the losses are coming and cannot be avoided. The private sector knows this, which is why they are scrambling to stuff all the losses down taxpayers' throats.
Housing Slump May Worsen Next Year, Not Get Better If you already took advantage of the government’s tax credit for first-time homebuyers—or are planning to do it anytime soon—you’ll probably agree with this prediction: Sales of existing homes will peak in the final quarter of 2009, then begin a year-long slide, which is likely to be a sharp one, according to some estimates. “Most of it [the tax credit] is simply shifting sales from one period to another,” says Global Insight economist Patrick Newport. “It doesn’t get rid of the fundamental problem; there's still a glut of houses.”
FHA-Backed Lending Is `Train Wreck' That May Trigger Crisis, Toll CEO Says The Federal Housing Administration, the agency that insures home purchases made with down payments as small as 3.5 percent, may create another lending crisis, Toll Brothers Inc. Chief Executive Officer Robert Toll said. “Yesterday’s subprime is today’s FHA,” Toll said today at a New York conference for builders sponsored by UBS AG. “It’s a definite train wreck and the flag will go up in the next couple of months: Bail us out. Give us more money.” Toll Brothers is largest U.S. luxury homes builder.
The worst is yet to come: Unemployed Americans should hunker down for more job losses Think the worst is over? Wrong. Conditions in the U.S. labor markets are awful and worsening. While the official unemployment rate is already 10.2% and another 200,000 jobs were lost in October, when you include discouraged workers and partially employed workers the figure is a whopping 17.5%. While losing 200,000 jobs per month is better than the 700,000 jobs lost in January, current job losses still average more than the per month rate of 150,000 during the last recession. Also, remember: The last recession ended in November 2001, but job losses continued for more than a year and half until June of 2003; ditto for the 1990-91 recession.
AOL to cut one-third of workforce
Thousands of Jobs Scammed or Created President Obama has repeatedly stated that his stimulus package has "saved or created" hundreds of thousands of jobs. And hundreds of thousands of jobs have been created. In Unicornland. According to the Recovery.gov website -- a website that the Obama administration has spent $18 million "stimulating" -- millions have been spent and hundreds of jobs have been created in heretofore unknown areas of America: 30 jobs using $761,420 of federal cash in the fictional 15th congressional district in Arizona (there are only eight congressional districts in Arizona); $19 million in spending and 15 jobs created in mythical districts in Oklahoma; $10.6 million on 39 jobs in invisible Iowan areas; $68.3 million spent in the magical 1st congressional district of the U.S. Virgin Islands; $35 million spent and 142 jobs created in the glittering fairy-tale kingdom of the 99th district of the Northern Mariana Islands; and the list goes on.
Roubini: Jobs Are Dead, Long Live Jobs Nouriel Roubini, the economist Gawker calls a "vampire who feeds on the hopes and dreams of the unemployed," makes a leap of logic so impossible it can't be seen by the naked eye. In a New York Daily News column, Roubini rehashes bits that will now be familiar to regular roubinoids: The unemployment picture is going to get worse and worse; the official rate of unemployment could remain above 11 percent for years; the monthly job loss rate is still higher than it was in the post-dotcom era (when doctors still treated flu patients with bloodletting). A typically chilling vision:
Forget $100 oil. $80 oil is a problem Energy prices don't need to rise that much before a fragile consumer-led economy could face another setback. Are cash-strapped American consumers on for another date with energy price misery? The U.S. economy remains weak and one in six Americans can't find enough work. Yet oil prices have risen steadily this year. A barrel of crude costs $79 and change, more than double its price at the end of 2008. This year's runup pales in comparison to the one that peaked last summer above $145 a barrel. Even so, some researchers warn we could once again be approaching the point at which rising energy costs will squeeze consumers.
I Have to Leggo My Eggo It may be the strangest shortage since the world went nuts over tulips. Eggo Waffles have nearly disappeared from store shelves. I know this because Eggos are one of the few things my son will eat, other than sushi (don't ask). Turns out that flooding in Atlanta is the main cause behind a disruption of Eggo manufacturing WHICH COULD LAST EIGHT MONTHS. This national crisis was first reported by Consumerist, which even posted photos of empty freezer shelves taken by a frustrated shopper. Some thought the shortage might be related to the case of Listeria found in some Eggos in September.
U.S. and China reach accord on data collection The United States and China have agreed to cooperate on developing an inventory of China's greenhouse gas emissions, the Environmental Protection Agency announced Wednesday, an initiative that appears be a response to criticism of Beijing's data collection. Several senators whose votes are key to passage of domestic climate legislation, including Sen. Evan Bayh (D-Ind.), have questioned whether they will be able to trust any greenhouse gas reductions China reports to the international community. China has surpassed the United States as the world's largest emitter of greenhouse gases; together they account for roughly 40 percent of the world's output.
Bill O'Reilly vs. FOX's Judge Napolitano Over 9/11 NYC Terror Trial - 11/16/09
Jobless benefits could end for many in January One million workers could lose unemployment benefits in January unless Congress extends aid More than 1 million people will run out of unemployment benefits in January unless Congress quickly extends federal emergency aid, a nonprofit group said Wednesday. States typically provide 26 weeks of unemployment insurance for those who lose their jobs through no fault of their own, with we
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