Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Tues 01.05.2009
"HAFA" - Foreclosure Warning Dead Ahead! Under the Radar - a bit - came this ditty at the end of November. Coupled with the "unlimited" Fannie and Freddie "credit line", this may presage a veritable collapse in house prices this coming spring and summer - along with a massive "dump" of inventory. "HAMP", the Treasury's program to "prevent" foreclosures, did not originally appear to have a "stick." Well, here's the stick folks - for those who cannot qualify for a modification, or who "blow it" while on a trial program and simply don't get a permanent change servicers are in fact required to offer short sale or "deed in lieu" alternatives when they make sense.
U.S. growth prospects deemed bleak in new decade A dismal job market, a crippled real estate sector and hobbled banks will keep a lid on U.S. economic growth over the coming decade, some of the nation's leading economists said on Sunday. Speaking at American Economic Association's mammoth yearly gathering, experts from a range of political leanings were in surprising agreement when it came to the chances for a robust and sustained expansion: They are slim.
The United States of America An American Tragedy The demise of a nation is often at the hands of others; and, whereas the usual suspects are its enemies, allies and friends cannot be ruled out. The 20th century will be remembered as the century when America became a world power. World Wars I and II would decimate the then great powers of the world, e.g. England, Germany, Russia, France, Japan, etc., leaving the US as the last nation standing—the world’s sole superpower. At mid-century, in 1950 the US would be the world’s banker, its only creditor and repository of the greatest hoard of gold in history; but in only 20 years most of the gold would be gone, the remaining owed but never paid and the US would soon become the world’s largest debtor, a virtual deadbeat who could only pay its debts by borrowing more.
US public pensions face $2,000bn shortfall The US public pension system faces a higher-than-expected shortfall of more than $2,000bn that will increase pressure on many states’ strained finances and crimp economic growth, according to the chairman of New Jersey’s pension fund. The estimate by Orin Kramer will fuel investors’ concerns over the deteriorating financial health of US states after the recession. “State and local governments are correctly perceived to be in serious difficulty,” Mr Kramer told the Financial Times.
That 1937 Feeling We're About To Make The Same Mistake We Made In 1937 Here’s what’s coming in economic news: The next employment report could show the economy adding jobs for the first time in two years. The next G.D.P. report is likely to show solid growth in late 2009. There will be lots of bullish commentary — and the calls we’re already hearing for an end to stimulus, for reversing the steps the government and the Federal Reserve took to prop up the economy, will grow even louder.
“Aughts” Ruined by Wall Street We’re back in the USA after 15 years of living in Europe. Bethesda is one of America’s wealthiest suburbs. Money from all over the nation rolls this way. The playing field is tilted in Bethesda’s direction. “I was sitting in the Starbucks, having a cup of coffee,” Elizabeth reported. “One man next to me was on the phone. He was talking about some deal he had done with the US Army in Afghanistan. It sounded as though he was very happy with it. The man next to me on the other side was on the phone too. He was a jollier fellow, talking loudly about how much money he had made. I thought he was a stockbroker or something like that. Then, I realized he was talking about a contract with the government.”
Is this the America you want? Detroit in RUINS! (Crowder goes Ghetto) City of entitlements; poster boy of leftist policies and central urban planning
Tehran Plans a Major Military Exercise Drill to Boost 'Defensive Capabilities' Coincides With Deadline Iran Has Set for West on Nuclear Offer Iranian media on Sunday reported Tehran will conduct a large-scale defensive military exercise next month, coinciding with what government officials now say is a deadline for the West to respond to its counteroffer to a nuclear-fuel deal. The commander of Iran's ground forces, Brig. Gen. Ahmad-Reza Pourdastan, said the drill will be conducted by Iran's army, in conjunction with some units of the Islamic Revolutionary Guard Corps, to improve "defensive capabilities," Press TV, the English-language, state-run media outlet reported.
Arabia takes the New Silk Road to China, spurning the West With hindsight we can see that two events occurring within days of each other in late 2001 brought about an epochal change in the world's strategic system, drawing China and the Mid-East oil powers into each other's arms again after five centuries of estrangement. The old Silk Road came back to life. The Twin Towers attack of 9/11 - and the backlash that followed - caused the Arab world and its money to turn away from the US. That much is well known. Six days later, the World Trade Organisation (WTO) concluded talks on China's accession, opening the floodgates of Chinese exports. The country's breakneck growth over the next seven years lifted the price of oil from $18 (£11) to a peak of $148 a barrel. In synergy, Beijing and the Gulf capitals amassed a vast share of global currency reserves. That too is well known.
A 2010 sovereign debt crisis could still cause UK banking chaos Last year was one of the easiest for economic predictions. In the wake of Lehman's collapse, and the semi-nationalisation of the world's banking system, at least a few things seemed obvious. Interest rates would have to fall to zero; central banks would have to embark on quantitative easing; the recession would last for most of the year and attention would soon focus on the governments that had poured billions of pounds of public money in to sort them out. What was less obvious was whether the remedy would work: would Britain slide further into recession despite interest rate and tax cuts, or would it start to recover? To my surprise, the latter looks to have been far more true than the former. House prices have recovered, the economy is starting to pull, gradually, out of recession, unemployment is close to peaking and the biggest sterling devaluation since the 1930s is finally pushing the current account balance towards positive territory.
What To Expect in 2010 by J. R. Nyquist In Roman mythology, Janus was the god of gateways, portals and bridges. He has been used to symbolize the march of time, the transition from one age to another. He is often represented as having two faces: one peering into the future and the other into the past. Janus was the god of beginnings, and so we have named the first month of the year January. The Roman temple to Janus was a small wood building located on a street connecting the Roman Forum to residential areas. This same street was used by Roman consuls who were leaving the forum to make war on Rome's enemies. It is no wonder, then, that the temple to Janus had a set of double doors called "the gates of war," always kept open during times of military conflict. The ancient biographer Plutarch wrote that the temple was rarely closed because peace "was a difficult matter, and it rarely happened, since the realm was always engaged in some war.
Keynesianism Delivers a Decade of Zero by Ron Paul This past week we celebrated the end of what most people agree was a decade best forgotten. New York Times columnist and leading Keynesian economist Paul Krugman called it the Big Zero in a recent column. He wrote that "there was a whole lot of nothing going on in measures of economic progress or success" which is true. However, Krugman continues to misleadingly blame the free market and supposed lack of regulation for the economic chaos.
Billionaire Predictions 2010 The world's wealthiest sound off on the economy and where to invest in 2010. Even as most billionaires saw their wealth increase in 2009 along with rising stock markets, some remain cautious and believe that 2010 will continue to test the global economy. We queried billionaires from around the world to get their thoughts on topics ranging from global warming and the weakening dollar to the price of gold and best places to invest in 2010. Ten answered our 10-question survey, but few agreed on most subjects. Whereas nearly all of the billionaires quizzed a year ago predicted an economic recovery, this year's participants were less unanimous.
Eric Schmidt Seems Concerned Obama Is Screwing Up The Country Eric Schmidt has been on Twitter for about a month, and he's yet to take a real liking to it. He's only blasted out eight tweets. So, on the rare occasion that he does send out an update to his 20,993 followers, we like to see what he's talking about.
...instead of seeking a new post-Reagan consensus, the Obama Democrats are returning to their party’s long-running pursuit of European-style social democracy — by micromanaging industry, pouring money into entitlement and welfare programs, and binding the economy in a web of new taxes and regulations.
...Social democracy has its benefits, but global competitiveness isn’t one of them. As Jim Manzi points out, in an essay on “Keeping America’s Edge” in the latest issue of National Affairs, “from 1980 through today, America’s share of global output has been constant at about 21 percent. Europe’s share, meanwhile, has been collapsing in the face of global competition — going from a little less than 40 percent of global production in the 1970s to about 25 percent today.”
The Old Order Changeth The change of the old order has important implications for the financial markets in general and for the gold market in particular for the simple reason that politics affects economics. The reason that gold exploded in the 1970s is that it was suppressed in price by the US Government for 35 years. During this time, the US kept printing more and more money (more politics) thus reducing the value of its currency, and the explosion of the gold price of the 1970s was required to correct the corresponding undervaluation of gold. Similarly, recent Administrations have so increased our budget deficits that a new word is being used to describe them. The older generation remembers Everett Dirkson’s comment, “A million dollars here, a million there, pretty soon it adds up to real money.
Gold Rises Most in Two Months as Dollar's Weakness Spurs Buying Gold rose the most in two months after a weaker dollar boosted demand for an alternative investment. The dollar fell as much as 0.7 percent against a basket of six currencies, extending last year's 4.2 percent decline. Gold rose 24 percent in 2009 and reached a record $1,227.50 an ounce on Dec. 3. A 7.3 percent drop in bullion prices last month also spurred purchases. "You're seeing this pop in gold because the dollar is getting sold on the first day of trading," said Matt Zeman, a metals trader at LaSalle Futures Group Inc. in Chicago. "Those who held their longs through last month's correction are adding to their positions. Gold's behavior is indicative of a bull market."
US gold above $1,120/oz on dollar drop, oil gains U.S. gold futures rose above $1,120 an ounce on Monday, gaining more than 2 percent, on an oil price rally and dollar decline amid economic optimism on the first trading day of 2010.
Gold little changed a day after rising 2 percent Gold prices were little changed on Tuesday after rising more than 2 percent the previous session, when an oil price rally and a decline in the dollar spurred heavy fund buying on the first trading day of 2010.
Metals are the best bet in 2010 Do you know among the commodities metals were the best performing ones in 2009? If not, remember that not only gold other metals also performed extremely well in 2009 riding on hopes for a global economic recovery and fears of runaway inflation. And, the bull run in metal is not to end soon, it will continue for 2010 also. Demand from emerging economies remains strong while developed nations are catching up with them as far as metals are concerned.
Gold price to range $880 to $1280 for six months The first full trading day of the new year started off with a pattern reminiscent of the year that just passed; namely, dollar selling/ commodities buying. News that China’s manufacturing activity grew at the highest rate in over five years stimulated the by-now-familiar trade among players. Thus, the US dollar gave up sitting on the 78 perch on the trade-weighted index and promptly fell 0.36 this morning, to 77.56 and lost more than 1% against the loonie. Oil prices climbed substantially, gaining $1.50 to $80.87 per barrel, aided by not only the China news, but by a blast of frigid weather in parts of the US.
Uncertain dollar to boost gold in 2010 Gold Investment is expected to remain strong throughout 2010, according to a number of analysts. It has been widely suggested that a number of the factors behind the yellow metal's bull market remain in place, and as such, investment has every chance of continuing at similar levels. Indian Express suggests that Gold Prices could quite possibly follow on from the 25 percent increased experienced last year. The World Gold Council stated that factors such as uncertainty around the dollar could create an environment suitable for gold price gains.
The Gold Bugs Were Right Lew Rockwell Good decade for gold, bad decade for just about everything else In our analysis, the story of the past ten years is told in the price of stocks and gold. We start our journey with a review of articles recently published in Project Syndicate by two economists I respect, Nouriel Roubini and Harvard’s Martin Feldstein. Each weighed in on the topic of gold as an investment in articles. These two fine economists address the question, “Should I buy gold at a historically high price?”
Gold highly volatile on first trading day of 2010 Gold remained highly volatile on the first trading day of 2010 as investors divided over its appeal as a safe haven. Some investors weighed the impact of a stronger dollar, which typically hurts prices, while some buyer's boosted holdings after the biggest monthly fall since October 2008.
Ignore the chatter, gold will still pull its weight in 2010 As events around the world continue to change we should use gold to protect our wealth. After having the very fortunate opportunity of living in numerous major cities around the world, and while trying to assimilate with various different cultures, I realized that one's perception of the truth is a matter of interpretation. What I mean by this is that even though you may have been raised to behave in a certain matter or believe in certain things, it doesn't mean that your way is necessarily the correct way. And, instead of criticizing and insulting those people who do not believe in the same things as ourselves, instead we should embrace their differences in case there is something we can learn from them. In other words sometimes what we see or hear may not be the truth at all. You may well be asking what this has got to do with precious metals, in particular gold, well I'm going to get to that, so please indulge me for a few minutes.
Two Scenarios for the Ongoing Precious Metals Correction Five weeks have passed since the recent correction in the gold market commenced. Gold lost 10% in this time period, while the precious metals stock indices fell by 16%. Over the past two weeks, precious metals stocks stabilized ($XAU even climbed by 1 point). Is this a temporary breather before more downside or did $1075, set one week ago, mark the bottom?
Why Gold Is The Hottest Hedge Fund Trade Of The Year Several huge hedge-fund managers have bet the farm on gold, including John Paulson of Paulson & Co. and David Einhorn of Greenlight Capital. The logic? The frantic money-printing by the world's desperate governments (including the US) will destroy the value of paper currencies. And when paper currencies get destroyed, investors will run to...gold.
Gold, Silver And Platinum Advance As Us Dollar Weakens, Mining Stocks Climb In London Gold was on the rise today, with spot prices rising to US$1,115/oz after ending 2009 at US$1,095/oz to post the largest annual gain in 30 years as the precious metal provided a safe haven for investors, who were looking to cut risks in a period of high economic instability. The recent weakness of the US Dollar, which offered an alternative investment option, has contributed to gold’s rally and was the main reason behind its rise today as the US Dollar Index, which measures the greenback’s value against a basket of currencies, declined 0.4%.
Let's Talk Metals What if Metals could talk? Pretend you're at a party. The Elements are milling about. Could you imagine the buzz? Tungsten points out that Gold has a flaw in his character, but tells him "If you'll cover for me, I won't admit I'm the heavy in all this." Metalloids love to drone on endlessly. But do we really want to listen to them, Boron? Mercury is bashful; a warm blush and she'll melt. Sodium, Potassium, and Chloride are in a group, arguing over which sports drink tastes best. And Calcium, Zinc, and Iron just want to talk about health. Even the Lanthanides have a rare word to add. Uranium is boasting again, about his nuclear family.
Gold trading to boom in Dubai in 2010 Vietnam has shut down gold trading in the New Year thanks to illegal operations and excessive speculative activity in the bullion market. But gold trading is going to boom in Dubai-the city of gold-in 2010. The merger of two exchanges in Dubai--Nasdaq Dubai and Dubai Financial Market (DFM)-will help gold trading to glitter in the Emirate city state that was hit by credit problems in 2009. Bullion analysts said that trading volumes of Dubai Gold Securities (DGS) on Nasdaq Dubai will considerably rise after the merger of the two exchanges take place in April this year.
Gold rises as dollar drop spurs fund buying Gold rose to a near three-week high on Monday, gaining 2 percent as an oil price rally and dollar decline spurred heavy fund buying on the first trading day of 2010. Gold strength lifted other precious metals, with palladium climbing to its highest since July 2008, and platinum hitting a 16-month peak. Both are taking support from talk of new platinum- and palladium-backed exchange-traded funds.
Gold Thoughts We must applaud the leadership of the Federal Reserve. That group is certainly attempting to be more efficient. Why wait till later in the year? Do it early, and get it done. Make a speech filled with what may go down as the height of economic drivel on the 2nd day of January, rather than later in the year. Maybe Chairman Bernanke thought if he spouted economic nonsense early in the year, most would forget his blundering leadership by year end.
Gold price gains by more than 50% in Vietnam Gold jumped higher in Asian and early London trade on Monday, kick-starting 2010 with a 1.8% gain to hit two-week highs as world stock markets rose together with base metal and energy prices. Government bonds fell, as did the US Dollar – down to $1.44 per Euro by mid-afternoon in Frankfurt. The Bank of England meantime reported a sharp decline in Britain's money-supply growth. Eurozone investment sentiment rose to the best level since May 2008, but lagged analyst forecasts with a negative reading.
One Golden Decade, 13 Decayed Currencies Gold up, Dollar down...? Not entirely... SO THE LAST DECADE of rising gold prices simply mirrored the US Dollar's steady decline. Right...? Well, no actually, as BullionVault has repeatedly noted...and never less than when clutching a whisky and ginger this past Yuletide...typically to a fast-emptying room. Gold's tripling-and-more since Tues 4th Jan. 2000 came against all major currencies, let alone the minor ones. In fact, when judged against a truly globalized basket of the globe's truly basket-case currencies – those various monies issued by the top 10 economies in terms of Dollar-GDP – gold turned decisively higher in mid-2001...looking back only a handful of times and never for more than a 20% drop. All about the Dollar? Don't you believe it.
China – the new look of gold The collapse in India’s gold demand during 2007-09 might seem good reason to question the fundamental strength of gold buying worldwide. After all, if the world’s No.1 gold buyers can’t keep up with record-high gold prices, who can…? But the plain fact, as BullionVault first forecast in spring 2009, is that China has overtaken India as the number one private gold buyer this year. The typical Chinese New Year gold rush has already begun (thanks in part to 3% discounts at major retailers), and robust demand looks likely to continue through 2010 if not beyond.
Marc Faber's Favorite Currency Marc Faber, the legendary investor and the author of Gloom, Boom & Doom Report shares his outlook on various asset classes including gold, agri-commodities and equities. The only near-term factor in support of the US dollar is the fact that bearish sentiment is widespread, and that other paper currencies are also subject to their central banks’ printing machines, which on renewed economic weakness would also go into overdrive. As a result, my favourite currency remains gold, whose supply is extremely limited. In fact, I am wondering if gold, which is now at around $1,100 per ounce, is less expensive than when it sold for less than $300 per ounce. How could this be?
Commodities set to rise on back of global growth Commodities prices are set to rise further this year as the global economy expands faster, the International Monetary Fund has forecast, following the biggest annual price increase for raw materials in nearly four decades in 2009. The IMF said that commodities prices were set to remain high by historical standards over the long term as the industrialisation of emerging countries supports consumption.
The Difference a Printing Press Makes Contrast how the best-run U.S. states are responding to the recession - cutting services, laying off workers, raising taxes, and generally making hard choices - with how the Federal government simply writes checks to any and all (while being praised for its "flexibility" and "creativity") and you begin to understand the power of a printing press.
Devolution of the USD 2012? USD collapse in 2012...end of the world as we know it As the first public article for me just before 2010, it seems appropriate for me to comment on one of the biggest stories we will be all facing – that is an end game of events leading to the end of the USD. The implications for the world are no less than Armageddon – like. I mean it. Before we get into some details, I have been working on forecasts for 2010, and my study of the USD situation and how much time it has left. I first came to the conclusion that it was roughly (and I am getting close here on timing, I’m sure of this) two years from 2010. Actually, the calculation is two more years of relative USD functionality before the world realizes in about a shocking week’s time that the USD is just about to really go belly up. It’s not 5 years out anymore in my calculations, we have roughly two more years left.
Dollar Falls as Signs of Economic Recovery Renew Risk Demand The dollar declined against all of its major counterparts as evidence of global economic recovery revived demand for riskier assets at the greenback's expense. The Australian and New Zealand dollars rose against the U.S. currency as reports showed U.S. output grew more than economists estimated and China's manufacturing expanded at the fastest pace in more than five years. Sterling touched a two- week high against the dollar on increases in the U.K.'s manufacturing and mortgage approvals.
Dollar falls as risk appetite rises The U.S. dollar fell on Monday as optimism about a global economic recovery encouraged investors to seek riskier investments such as stocks and commodities at the expense of the greenback. The dollar dropped also as traders locked in gains on its rally over the past month ahead of key U.S. jobs data on Friday which could dictate the currency's near term direction. Chinese manufacturing grew at its fastest pace on record in December, while U.S. factories marked their best month in nearly four years, data showed on Monday, boosting confidence in the global economy.
How Deflation Is Inflation Let's squash the debate between deflationalists and hyper-inflationalists. Here follows the math that shows how we get the equivalent effect of price inflation (and skyrocketing gold price) when there is deflation on a debt money standard. In short, purchasing power is decreasing during deflation on a debt money standard. That has a similar wealth destroying effect as price inflation. Purchasing power is decreasing because private sector (non-government) share of total debt is decreasing, as well for a more complex second reason. What deflationalists miss is that although totals are deflating, the composition of those totals are changing and there is a transfer (theft) of wealth from the private sector to those on the coattails of government and stimulus lost to waste, failure, and corruption.
Global bear rally will deflate as Japan leads world in sovereign bond crisisMilton Keynes will be vindicated. Lord Keynes will lose some of his new-found gloss. The Krugman doctrine that we should all spend our way back to health by pushing deficits to the brink of a debt spiral - or beyond the brink - will be seen as dangerous. The contraction of M3 money in the US and Europe over the last six months will slowly puncture economic recovery as 2010 unfolds, with the time-honoured lag of a year or so. Ben Bernanke will be caught off guard, just as he was in mid-2008 when the Fed drove straight through a red warning light with talk of imminent rate rises - the final error that triggered the implosion of Lehman, AIG, and the Western banking system.
Signs of Economic Depression I wanted to remind you not to lose sight of the big picture. It’s advisable to try to make money during an illusion only if you know the reality. Remember, consumer confidence and investor sentiment can and often creates illusions that can lead to big gains in stock market. But at some point, reality sets in. So if you understand fact and fiction, you can make money during illusive periods while being prepared to exit when reality sets in, as opposed to riding the wave and getting blasted or being so scared you do nothing and miss out on big gains.
The Crooks, The Liars, The Criminals
The Fear of Capital Controls Even outside of the realm of rap music and Hollywood movies, having too much money can be a problem. Just ask Asia's central bankers. Foreign fund flows into Asia have been strong. One sliver of this -- inflows into regional investment portfolios, excluding Japan -- rose to $25 billion in 2009, up about 25% from the previous record level in 2007, according to EPFR Global. Foreign exchange reserves have surged by some 18% across the region.
State budget pictures bleak as lawmakers head back If you thought state budgets were in bad shape last year, just wait: 2010 promises to be brutal for lawmakers — many facing re-election — as they scramble to find enough money to keep their states running without raising taxes. Tax collections continue to sputter. Federal stimulus dollars are about to dry up. Rainy day funds have been tapped. And demand for services — like Medicaid, food stamps and unemployment benefits — is soaring.
Financial Reforms Are Being Watered Down As Bank Bailouts Are Up New York, January 4th: It’s a new week, a new year, and some, erroneously believe a new decade. What’s not new is the stranglehold the banks have on our economy quietly stashing more billions for more bonuses while still restricting the flow of credit. Bad loans have been supplanted by no loans. Writers on the left continue to go after one bankster---the one we love to hate: Goldman Sachs which has become the poster boy for profiteering and even bad coffee served in their cafeterias. Most ignore the rest of the avaricious industry which is still volatile with big pockets of insolvency and dependence of government bailout funds.
Crediting an economic improvement Federal Reserve Governor Elizabeth A. Duke today echoed others at the Federal Reserve, saying that she expected a “moderate” recovery in economic activity in 2010, and that businesses with “cautiously” begin to add jobs. And she, like others, said that the recovery depends largely on improving credit conditions. “In my view, the outlook for economic activity depends importantly on our ability to build on the progress to date in improving the operation of financial markets and restoring the flow of credit to households and businesses,” she said in a speech in Raleigh, North Carolina.
U.S. business loan defaults rise again Severe delinquencies by small and medium-sized U.S. businesses on the loans, leases and lines of credit to finance capital equipment rose again in November as lenders remained reluctant to extend fresh financing, PayNet Inc reported on Monday. Accounts behind 180 days or more, and unlikely ever to be paid, rose to 0.91 percent in November from 0.87 percent in October, according to PayNet, which provides risk-management tools to the commercial lending industry. It was the 22nd consecutive monthly increase in loans so far in arrears they ultimately may have to be written off by lenders. Accounts in moderate delinquency, or those behind by 30 days or more, rose in November to 4.33 percent from 4.19 percent in October, according to PayNet.
PPIP: Banks 'Making A Killing' On Government Toxic Asset Program Remember the Public-Private Investment Program (PPIP)? The Treasury Department unveiled the program in March and intended it as a way to help banks unload hard-to-sell (read: often toxic) mortgage securities. In short, private investors partnered with the government to get bad loans off the banks' books -- and everyone, including taxpayers, was supposed to come out ahead on the proceeds of the asset sales.
Ben Bernanke
Ben Bernanke's Huge Mistake About The Crisis Will Screw Us All The grimmest news of the new year has to be the fact that Fed chairman Ben Bernanke still has no clue about the causes of our financial crisis or what measures need to be undertaken to avoid another crisis. Bernanke gave a speech yesterday at the Annual Meeting of the American Economic Association that did two things. First, he exonerated Alan Greenapan’s low-interest rates from blame for the housing bubble, arguing that the housing bubble began before the Fed pushed interest rates low and that the size of the bubble cannot really be explained by monetary policy alone.
Bernanke: Fed Must Use Rate Hikes to Pop Asset Bubbles Federal Reserve Chairman Ben Bernanke said on Sunday that vigorous financial regulation would have been the best way to restrain the housing bubble that helped cause the deep recession, but said policy makers can no longer rule out monetary policy to curb the buildup of risk. In a speech defending the Fed's rock-bottom interest rates in the early 2000s, a policy many say fueled a runaway housing boom that triggered a devastating crisis when it went bust, Bernanke said regulatory and supervisory actions, rather than rate hikes, would have been more effective ways to check the run-up in house prices.
Treasury 10-Year Yields Near Six-Month High After ISM Report Yields on Treasury 10-year notes were near the highest level since June after a report showing manufacturing expanded more-than-forecast last month added to evidence the U.S. recovery is gaining momentum. The Institute for Supply Management's factory index rose to 55.9, the highest level in more than three years, from November's 53.6, according to the Tempe, Arizona-based group. Federal Reserve Vice Chairman Donald Kohn said yesterday that selling assets is among the options being considered by the central bank to pull back record levels of monetary stimulus.
Pimco Cuts U.S., U.K. Bonds as Borrowing Increases Pacific Investment Management Co., which runs the world's biggest bond fund, is cutting holdings of U.S. and U.K. debt as the two nations increase borrowing to record levels. Pimco is "more cautious" on corporate bonds and holds fewer mortgage-backed securities than the percentages in the benchmarks it uses to gauge performance, wrote Paul McCulley, a portfolio manager and member of the investment committee, in his 2010 outlook. The company is also underweight Treasury Inflation Protected Securities, according to the report on Newport Beach, California-based Pimco's Web site.
No Good Deed Goes Unpunished as Banks Seek Profits From Bailout To understand the meaning of no good deed goes unpunished, Treasury Secretary Timothy F. Geithner can look no further than Wall Street where the banks that received the biggest taxpayer bailouts are seeking to reap trading profits from securities rescued by the government. Only months after it was started, the U.S. program designed to purge debts of no immediate discernable value from the balance sheets of troubled banks has helped transform the frozen debt into a money-maker as the bonds have rallied. Bank of America Corp. and Citigroup Inc., who received 22 percent of the $418.7 billion American taxpayers loaned to troubled financial institutions, boosted holdings on their trading books of home- loan bonds that lack government guarantees while investors were raising cash for the program, according to Federal Reserve data.
Sorry Ben Bernanke: Your Inflation Fighting Scheme Won't Work You’ve probably heard that the Fed has proposed a new program that will act like CDs for bank reserves. The plan is to have the Fed issue the term deposits to banks, with maturities up to one year. The hope is that these Fed CDs will encourage banks to park reserves at the Fed rather than lending them out, keeping the huge amounts of money locked up as excess reserves from entering the economy through loans and triggering inflation. Give them credit for bold action. Nothing like this has ever been tried before. If it worked, it would take the Fed’s control of bank lending to an entirely new level. By raising and lowering the rates on the CDs, the Fed could potentially micro-manage bank lending behavior to an extent unimaginable before our crisis.
Ben Bernanke Won't Take the Blame for Bubbles In a speech yesterday, Fed Chairman Ben Bernanke insisted that low interest rates were not the root cause of the most recent real estate bubble. The New York Times says he used his "strongest language yet" in defending the central bank's past decisions and emphasizing the importance of greater financial regulation moving forward. Bernanke said, "Stronger regulation and supervision aimed at problems with underwriting practices and lenders' risk management would have been a more effective and surgical approach to constraining the housing bubble than a general increase in interest rates." The Wall Street Journal notes that Bernanke's views on how the Fed should handle bubbles have changed. Previously, the paper says, "Its bubble strategy was to mop up after a bubble burst with lower interest rates to prevent damage to the broader economy." Recently, though, "Bernanke said, 'never say never,' when asked whether the Fed should instead use higher interest rates to pre-emptively prick future bubbles, and he later said he wouldn't rule it out."
New World of Lending for Europe The financial crisis made American capitalism a dirty word in many capitals around Europe. But in one way, at least, the meltdown forced those very same countries to mimic the U.S.: As banks stopped lending, companies rushed to the bond market to finance their operations. European companies, traditionally reliant on banks, issued a record €250 billion ($357.9 billion) of investment-grade nonfinancial issuance and a hefty €26 billion of high-yield bonds in 2009. The challenge now is for the market to deepen, offering access to financing to companies and institutions that have never issued bonds. This development, likely to be a key focus for policy makers, will mark a further step down the road to a more U.S.-style capital market.
Fed's Tools for Easing Stimulus Include Asset Sales, Kohn Says Federal Reserve Vice Chairman Donald Kohn said the central bank has "no shortage" of tools for pulling back record levels of monetary stimulus, from raising the interest rate it pays on reserves to selling assets. "The appropriate use and sequencing of these tools is under active discussion by the FOMC," Kohn told the American Economic Association's annual meeting in Atlanta yesterday. "We will be able to unwind our actions when and as appropriate."
Prudential sells Wachovia brokerage stake Prudential Financial Inc. has completed the sale of its minority stake in Wachovia Securities Financial Holdings to Wells Fargo & Co. for $4.5 billion in cash. Wells Fargo is the parent company of Charlotte-based Wachovia Corp. Newark, N.J.-based Prudential also received $418.4 million in payment on a promissory note that the former Wachovia Securities had issued in connection with the joint venture. Prudential, the second-largest U.S. life insurer, announced a year ago it planned to sell its minority interest in Wachovia Securities Financial Holdings, which includes St. Louis-based Wells Fargo Advisors (formerly known as Wachovia Securities).
Michael Tennenbaum: Lending Loosening Up For Large Companies According to the founder of Tennenbaum Capital Partners, small businesses generate around 2/3 of new jobs. At the same time, they get their loans from small banks. However, regulators have forced these small banks to have a low debt to capital ratio meaning less loans are made to small businesses. "Sadly, this is like sand in the gears. For the next couple of years, I think the U.S. economy is going to be sluggish."
I.R.S. Unveils Plans to Regulate Paid Tax Preparers The Internal Revenue Service plans to start regulating paid tax preparers, requiring them to register with the government, pass competency tests and adhere to ethical standards. The regulations, announced Monday, will not be in effect for the current filing season — individual tax returns are due April 15. But the I.R.S. commissioner, Douglas H. Shulman, said tax preparers would be held to higher standards as the agency stepped up its oversight to help reduce fraud and errors. The I.R.S. announced in June that it wanted to start regulating paid tax preparers. The agency then held a series of public hearings to gather information, leading up to Monday’s announcement.
Construction Spending in U.S. Decreased to Lowest Level in Six Years Construction spending in the U.S. fell for the seventh straight month in November to the lowest level in more than six years, led by declines in homebuilding and fewer commercial projects. The 0.6 percent drop followed a revised 0.5 percent decrease in October, previously reported as unchanged, Commerce Department figures showed today in Washington. Construction spending was down 13 percent in November from the same month a year earlier.
December 26 was No. 2 U.S. holiday shopping day The day after Christmas was the second-biggest shopping day during the U.S. holiday season, with $7.9 billion spent, even though traffic in stores fell 6.6 percent from a year ago, ShopperTrak said on Wednesday. Only the day after Thanksgiving, or "Black Friday," was busier in terms of traffic and sales, at $10.66 billion, the firm said. Sales during the full week ended Saturday, December 26 rose an estimated 8.8 percent, while traffic at U.S. stores fell 1 percent, ShopperTrak said. Still, four of the top seven traffic days in the holiday season came last week, it said. The week was expected to take on more significance this year after a major snowstorm disrupted shopping plans for many consumers on the East coast during the final weekend before Christmas.
U.S. shivers as temps head lower Much of the nation got off to a frigid start to the workweek on Monday and below-freezing temperatures will threaten to break records in parts of the South on Tuesday morning. Hard freeze warnings were scheduled to be in effect Tuesday morning for much of northern Florida and parts of other Gulf Coast states, according to the National Weather Service.
Tom Woods on Personal Rights and Property Ownership 1 of 3 Dr. Tom Woods explains the origins of our Individual Rights and our Rights to Property ownership. Taking money from a person's labor is a form of slavery and a form of servitude. It is therefore immoral to use force to take money from someone. The U.S. Government steals money from hard working Americans, at the barrel of a gun, every day and WASTES IT on whatever they Damn well please. Dr. Woods is resident scholar and senior faculty member at the Ludwig von Mises Institute.
Tom Woods on Personal Rights and Property Ownership 2 of 3
Tom Woods on Personal Rights and Property Ownership 3 of 3
Visa’s Strategy in Debit Cards Stymied Rivals Every day, millions of Americans stand at store checkout counters and make a seemingly random decision: after swiping their debit card, they choose whether to punch in a code, or to sign their name. It is a pointless distinction to most consumers, since the price is the same either way. But behind the scenes, billions of dollars are at stake. When you sign a debit card receipt at a large retailer, the store pays your bank an average of 75 cents for every $100 spent, more than twice as much as when you punch in a four-digit code.
Only the Strongest Retailers Will Survive in 2010 as U.S. Consumers Continue to Battle Back The early returns on the 2009 holiday shopping season show a minor gain over last year's abysmal retail sales, and next year will affirm that retailers are successfully adapting to a consumer environment that's very different from years past. However, 2010 will be difficult for retailers as they contend with high unemployment, tight credit, and aggressive competition.
U.S. retail sales miss view on weak holiday start U.S. retailers from Macy's to Costco posted much weaker-than-expected sales for November as shoppers focused only on big bargains at the start of the key holiday selling season. The Thomson Reuters same-store sales index rose 0.5 percent for the month, falling far short of Wall Street expectations for a 2.1 percent increase. Many retail shares traded lower on Thursday after the reports, led by declines for teen and children's store chains. The Dow Jones Retail Index was down 0.65 percent. Analysts warned retailers not to expect December to rescue the holiday season, as tight credit and high unemployment dim hopes for a consumer recovery.
Apple to Ship Tablet Device in March Looking to build on the momentum of its iPhone and iPod, Apple Inc. will unveil a new multimedia tablet device later this month, but isn't planning to ship the product until March, say people briefed by the company. While the device's ship date hasn't been finalized and could still change, people briefed on the matter said the new product will come with a 10 to 11-inch touch screen—which would make it closer in size to Apple's line of MacBook laptops than its smart phone.
Bankruptcies in 2009 total 1.4 million, up 32 percent U.S. consumers and businesses are filing for bankruptcy at a pace that made 2009 the seventh-worst year on record, with more than 1.4 million petitions submitted, an Associated Press tally showed Monday. The AP gathered data from the nation's 90 bankruptcy districts and found 1.43 million filings, an increase of 32 percent from 2008. There were 116,000 recorded bankruptcies in December, up 22 percent from December a year before.
Living on Nothing but Food Stamps CAPE CORAL, Fla. — After an improbable rise from the Bronx projects to a job selling Gulf Coast homes, Isabel Bermudez lost it all to an epic housing bust — the six-figure income, the house with the pool and the investment property. Now, as she papers the county with résumés and girds herself for rejection, she is supporting two daughters on an income that inspires a double take: zero dollars in monthly cash and a few hundred dollars in food stamps. With food-stamp use at a record high and surging by the day, Ms. Bermudez belongs to an overlooked subgroup that is growing especially fast: recipients with no cash income.
Is our big debt doing us in? Help! We're Living Paycheck to Paycheck Marc and Sharon LeRoux always dreamed of opening a business together. They took the plunge in 2006, tapping home equity to buy a franchise selling pre-made meals to busy families. Alas, the business failed, and last year the couple closed it down. Fortunately, neither had quit their day jobs - Sharon is an engineer at Hewlett-Packard, Marc owns a specialty game store. But they still have $154,000 on a home-equity line of credit from the venture dragging them down. "Our income is very good, but we're living paycheck to paycheck," say Sharon. "And I'm sure we're underfunding our retirement and our kids' college." (They are parents of Marie, 15, Nicole, 12, and Marc, 5.)
Colorado is a magnet for movers, says Allied Van Lines Colorado ranked fourth among the states in 2009 as a "magnet" for people moving from one state to another, according to an annual report Monday from Allied Van Lines Inc. Allied said Colorado ranked behind Texas, Arizona and North Carolina in its 2009 "net relocation gain," defined as inbound moves minus outbound moves by volume that were performed by the Chicago-based moving company. Colorado accounted for 3.4 percent of Allied's total inbound volume of moving shipments in 2009, versus 2.5 percent of the total outbound volume, the company said in its 42nd annual "Magnet States Report."
Part B or Not? When to Pick Medicare Option . . . . Medicare isn't a package deal that husbands and wives can do together. It is individual. And decisions about when to sign up for the program's various components, including Part B, typically depend on whether you are getting your insurance privately or through an employer, and also on the size of the employer, says Joe Baker, president of the Medicare Rights Center, an advocacy group based in New York. During the past few years, as many older adults have watched their Medicare premiums rise and the value of their investments fall, consumers' scrutiny of any optional Medicare premiums has increased, Mr. Baker says. "It's complicated, and people in these economic times are looking to save as much money as possible. Many people are declining Part B when they should not be doing so."
Ron Paul's ideas no longer fringe With the economy still struggling, the lawmaker's libertarian views are getting serious attention. Reporting from Washington - For three decades, Texas congressman and former presidential candidate Ron Paul's extreme brand of libertarian economics consigned him to the far fringes even among conservatives. Not a few times, his views put him on the losing end of 434-1 votes on Capitol Hill. No longer. With the economy still struggling and political divisions deepening, Paul's ideas not only are gaining a wider audience but also are helping to shape a potentially historic battle over economic policy -- a struggle that will affect everything including jobs, growth and the nation's place in the global economy.
Will the real Lou Dobbs please stand up? . . . . The questions about his identity matter, especially as Dobbs says he's contemplating a third-party run for national office in 2012, either for the U.S. Senate or, incredibly, the White House. Whichever route he takes, the erstwhile voice of the financial world -- the Cronkite for the business community for two decades -- is clearly casting about for his next act.
Judge Andrew Napolitano Natural Rights and The Patriot Act part 1 of 3 Judge Andrew Napolitano gives a speech from the heart about freedom and from where our rights come. The Judge explains the hard core truth about the Constitution and why we must fight to regain and retain our freedoms.
Judge Andrew Napolitano Natural Rights and PATRIOT ACT Part 2 of 3
Judge Andrew Napolitano Natural rights Patriot Act - Part 3 of 3
Confusion in Europe After U.S. Demands More Security London (AP) - Airline passengers bound for the United States faced a hodgepodge of security measures across Europe on Monday, and airports did not appear to be following a U.S. request for increased screening of passengers from 14 countries. U.S. officials in Washington said the new security measures would be implemented Monday but there were few visible changes on the ground in Europe, which has thousands of passengers on hundreds of daily flights to the United States.
The war on terror has been about scaring people, not protecting themThe ease with which the plane bomber could operate exposes the vacuity and recklessness at the heart of the US response to 9/11 So there was no ticking time bomb. No urgent need ever arose to torture anybody who was withholding crucial details, so that civilization as we know it could be saved in the nick of time. No wires had to be tapped, special prisons erected or international accords violated. No innocent people had to be grabbed off the street in their home country, transported across the globe and waterboarded. Drones, daisy-cutters, invasions, occupations were, it has transpired, not necessary.
Clinton: Yemen poses global risk Secretary of State Hillary Rodham Clinton said Monday that internal unrest and a surge in al Qaeda activity in Yemen pose a global threat that is being met by U.S. support for the Yemeni government's efforts to fight extremists. Clinton said the situation in Yemen created risks far beyond its region and that the government in San'a must act to restore stability. Her comments came as the U.S. Embassy in Yemen was closed for a second day due to al Qaeda threats and ahead of an international conference on Yemen to be held later this month in London.
Big Brother 1/5 - Conspiracy Theory - Jesse Ventura
Big Brother 2/5 - Conspiracy Theory - Jesse Ventura
Big Brother 3/5 - Conspiracy Theory - Jesse Ventura
Big Brother 4/5 - Conspiracy Theory - Jesse Ventura
Big Brother 5/5 - Conspiracy Theory - Jesse Ventura
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