Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Fri 03.05.2010
A Storm is Brewing By: John Townsend When the tech bubble burst in 2000, Greenspan tried to “fix” the problem by cutting rates and printing money. Fix the problem he did … well sort of! What Greenspan did was create two new bubbles in the credit and real estate markets to replace the tech bubble that had burst. Millions of jobs were created in these two industries. Much needed jobs to replace the ones lost as the tech boom came to an end. I think we will all admit it was one heck of a party, but like all good parties there’s a price to pay. The Hangover! The truth is the economic boom of the mid 2000’s was built on a lie. Instead of a foundation of productivity the last bull market was founded on an ocean of liquidity. That ocean of liquidity fostered risky investments and massive speculation. It was only a matter of time before the house of cards came crashing down. And crash it did. The world suffered through the second worst bear market in history almost taking down the global financial system in the process.
The United Socialist States of America By Jeffrey T. Kuhner - WashingtonTimes.com The president intends to overthrow American capitalism. President Obama is close to completing his socialist revolution. Since coming to power last year, he has sought relentlessly to transform America. From his days as a student radical, Mr. Obama has been obsessed with smashing the traditional free-market system. Like most leftists, he thinks capitalism is the enemy. "He was a Marxist-socialist in college," said John C. Drew, who knew Mr. Obama as a university student, in an interview. "He kept talking about the need to overthrow capitalism in favor of a working-class revolution."
Our own Greek tragedy By Mark Steyn - WashingtonTimes.com Obamanomics hastens the day of reckoning While President Obama was making his latest pitch for a brand new, even more unsustainable entitlement at the health care "summit," thousands of Greeks took to the streets to riot. An enterprising cable network might have shown the two scenes on a continuous split screen - because they're part of the same story. It's just that Greece is a little further along in the plot: They're at the point where the canoe is about to plunge over the falls. America is further upstream and can still pull for shore, but has decided instead that what it needs to do is catch up with the Greek canoe. Chapter One (the introduction of unsustainable entitlements) leads eventually to Chapter 20 (total societal collapse): The Greeks are at Chapter 17 or 18.
Will the US Devalue the Dollar? Darryl Schoon - SilverBearCafe.com The ability to wage war on credit gave the West an insurmountable advantage over the East. The West’s credit, however, has now turned to debt and the West has lost its advantage. But the return to parity will not be easy. The three hundred year economic expansion fueled by debt-based capital markets is coming to an end and with it, the hegemony of the West over the East. During that period, debt-based paper money propelled first England then the US to world dominion because of the ability to wage war on credit and to print money ad infinitum.
Ron Paul's New Cryptic Warning (2010)
Borrow and Spend Economics to Pay for Borrowing and Spending By: Richard Daughty - GoldSeek.com . . . . I had just read that the Federal Reserve is being as dangerously incompetent as ever by continuing to massively increase the money supply (which is so horrible because it causes inflation in prices) so that they can buy up (monetize) at least a part of the massive, monstrous, mega-moolah Treasury debt issuance that will be necessary to fund the unbelievable sum of, as I understand it, $1.9 trillion in government deficit-spending in the upcoming One Freaking Year (OFY) as a result of the massive spending of the terrible, awful, worse-than-I-had-feared, demon-from-hell Obama administration, plus trillions more for the needs of the private sector, and a trillion or so in Congressional “supplemental appropriations” throughout the year as Congress periodically, almost ritually in a Satanic kind of way, “discovers” that their original estimate of their borrowing needs was inadequate, and – surprise! – that these slimy, lying bastards need LOTS and lots more money!
Michael Moore: There's Going to Be a Second Crash Cenk Uygur - HuffingtonPost.com We interviewed Michael Moore on The Young Turks today and he was not shy about sharing his opinions. Anyone surprised? He had very strong words for the Democratic Party, the state of our political system and Glenn Beck. What he thinks of Democrats and Republicans: You know, I tell you, these Democrats are disgusting. Wimps and wusses and weasels. You know, get some spine. This is why I have to admire the Republicans. They at least stand for something. They at least have the courage of their convictions. They get elected to office, they come into town, and they go "Get outta my way, there's a new sheriff in town. This is the way we're doing things. Get outta here." And then they do it. You know. I mean what they do is crazy. But dammit, they are good at it. We should take a page out of their book.
China Govt: Buy Gold and Silver By Dr Jeffrey Lewis No longer favoring the US dollar, the Chinese government increased its holdings of gold from 600 tonnes in 2003 to 1,054 tonnes in 2009. This month, rumors began circulating that the Chinese government may indeed purchase from the IMF 191.3 tonnes of gold. While the government has denied this rumor, China Investment Corp. has purchased positions in gold miners such as Canada’s Kinross Gold, Gold Fields of South Africa, and AngloGold Ashanti. To further fuel gold investment, the government began pushing its citizens to buy gold in September of 2009. In addition, China just introduced its own silver bars as an investment, and China Central Television is running campaigns to push the citizenry into gold and silver investments. This could mean a new swell of demand and higher prices.
Yuan Options Most Expensive as China Pledges No Rise By Ye Xie March 5 (Bloomberg) -- Options traders are more bullish on the yuan than any other currency as they bet that growing exports and accelerating inflation will overcome China’s vows to maintain a 20-month dollar peg. The premium charged for the right to buy yuan in three months over contracts to sell has more than tripled this year to the most among 44 currency options tracked by Bloomberg. The 2 percentage point difference is the most since China last ended a fixed-exchange rate in July 2005, so-called risk-reversal rates show. Expectations for price swings also have tripled in the fastest implied volatility rise among the currencies.
China's investments in U.S. up sharply By Don Lee - LA Times The strategy seeks higher earnings by acquiring assets while prices are depressed. Reporting from Washington - Made in China now has a fast-growing sibling: Bought by China. Beijing is using its accumulation of billions of American dollars to step up its investments around the globe. In the last year, Chinese acquisitions in the U.S. have ranged from a relatively obscure theater in Branson, Mo., to stakes in such famous brands as Coca-Cola and Johnson & Johnson. China's huge stockpile of dollars stems in part from Americans' enormous purchases of relatively inexpensive Chinese manufactured goods and the significantly smaller volume of U.S. exports to the Asian country.
China Dumping US Debt Could be Great for America By Rocky Vega - DailyReckoning.com Providing the world’s reserve currency has its privileges. Not the least of which is the continued willingness of foreigners to soak up the massive amounts of debt issued by the US despite the nation’s continued debasement of the dollar. Yet, what if the foreign nations stopped buying? We’ve certainly heard of the calamity that should result from China cutting the US off, but perhaps we shouldn’t be so certain that’s the case. Let’s suppose for a minute that it’s not. Mike Cosgrove investigates an eye-opening upside of a US without a market for its debt.
Harsh words from Chinese military raise threat concerns By Bill Gertz - WashingtonTimes.com Recent statements by Chinese military officials are raising concerns among U.S. analysts that the communist government in Beijing is shifting its oft-stated "peaceful rise" policy toward an aggressive, anti-U.S. posture. The most recent sign appeared with the publication of a government-approved book by Senior Col. Liu Mingfu that urges China to "sprint" toward becoming the world's most powerful state. "Although this book is one of many by a senior colonel, it certainly challenges the thesis of many U.S. China-watchers that the People's Liberation Army's rapid military growth is not designed to challenge the United States as a global power or the U.S. military," said Larry M. Wortzel, a China affairs specialist who until recently was co-chairman of the congressional U.S.-China Economic and Security Review Commission.
The Dominos of Default John Browne - FinancialSense.com The bad news for Greece is that despite some help from abroad, and some attempts at internal reform, investors are still leery of the troubled state. The good news, if you can call it that, is that they will soon have company in the penalty box. Now that investors have come face-to-face with the reality of sovereign default in the developed world, greater scrutiny will befall those countries with fiscal conditions similar to Greece. The United Kingdom is a cause of great concern, with a debt ratio rapidly approaching Greek levels. The economic challenges facing Britain are aggravated by a Labour government that is pushing the country further toward socialism. As a result, in from mid-2008 to today the pound sterling has lost some 25 percent of its value even against the US dollar. Debt and socialism are a toxic mix for investors.
Recession, Depression, or Systematic Breakdown by James Quinn - FinancialSense.com As crooked politicians, Federal Reserve hacks, and cheerleading media pundits inform you the recession is over, you probably have a sneaking suspicion they are lying. The National Bureau of Economic Research is the arbiter of business cycle recessions. They define a recession as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production.” A depression is characterized by its length, and by abnormal increases in unemployment, a decline in the availability of credit, shrinking output and investment, numerous bankruptcies, reduced amounts of trade and commerce, as well as highly volatile relative currency value fluctuations, mostly devaluations. Price deflation, financial crisis, and bank failures are also common elements of a depression. Let’s assess where the U.S. economy stands at the moment:
Elizabeth Warren for President (COP's February 2010 Report)
'Bubble mania' to drive up gold prices to $5,000/oz By Lara Crigger - CommodityOnline.com Podcast listeners might remember a few months ago when I bet our research editor a steak dinner that gold would top $1,250/oz before it would sink back below $1,000/oz. For awhile there, things weren't looking too good for me or my appetite, as gold plunged off its December highs like a diver in free fall; the metal scraped as low as $1,052/oz early last month. But as gold closed above $1,117/oz on Friday, I'm happy to say that I might just get my dead cow after all. Of course, renewed strength in gold means a revival of The Big Question from last fall: Is gold in a bubble? This time, however, it seems the answer on everyone's lips is: "Who cares?"
Gold Tracks Euro Higher Ahead of US Payroll Data By: Reuters Gold tracked the euro higher on Friday before the release of U.S. payrolls data, which could raise concerns about the pace of the economic recovery, hurt the dollar but lift bullion's allure as an alternative investment. Volumes were thin in Asia ahead of the data, which may show U.S. payrolls shedding 50,000 jobs in February after losing 20,000 in January, although analysts also said the forecasts would have been influenced by bad weather.
Russia Continues to Build Its Gold Reserves Ahead of the SDR Discussions JESSE'S CAFÉ AMÉRICAIN As you know, Russia, India, China and some of the BRIC-like countries will continue to push hard for a gold and silver content in the new formulation of the SDR this year. The US and UK are vehemently opposed. Europe is still wallowing in confusion and is virtually leaderless, as the most recent financial crisis in Greece shows. This may not be all bad, because it highlights the weaknesses in their union, and gives them the incentive to take it to the next step. One cannot have a common currency with uncommon fiscal policies and laws. While there is some room for discretion, it is sorely tried in changing economic conditions and social attitudes. America went through a bloody Civil War for this reason.
Dr. Doom on Gold, Euro & More Everybody should accumulate some gold over time, Marc Faber, editor and publisher of the 'Gloom, Boom and Doom Report,' told CNBC
Gold benefits in recovery and relapse The gold rally that began last fall and drove gold through the $1,200 resistance level in late November doesn't seem to be panning out the way the rallies of 2005 and 2007 did. In this exclusive Gold Report interview, Gold Newsletter editor and publisher Brien Lundin admits he's a bit worried about this run's breakout. He hasn't lost hope, he says, but "we really need to clear $1,250 over the next six to eight weeks to validate the continuance of this as another one of these major gold rallies" that would carry gold up to the $1,350 to $1,500 range that he had anticipated. However that turns out, he expects gold to remain strong and gold stocks, particularly juniors, to outperform the market in general. Brien is stoked on silver, too, and in fact in relative terms expects it to rise further and faster than gold.
No Golden Fleese and No Silver Bullets Peter Souleles B. Com. LLB - SilverBearCafe.com "We have met the enemy and he is us." - Walt Kelly The U.S. is no doubt still a very powerful nation. At the same time however it is facing a challenging set of economic headwinds which threaten to lead to a chaotic unwinding of the financial system not only within the nation but also worldwide. There are many angles from which to examine this erosion. In this brief essay it is my intention to briefly focus on the demise of the U.S.'s financial position by comparing the gold and silver holdings of the USA between 1940 and 2010. The comparisons are startling as they are devastating.
Is the Dollar Really Safer Than the Euro? by Michael Pento - FinancialSense.com he European currency has depreciated dramatically against the US dollar in the past few months, falling from over $1.50 on December 1st to $1.35 today. The move has caused many investors to question the viability of the European Union and its currency, while also serving to reinforce the notion of the USD’s position as the world’s reserve currency. To be clear, there has never been any question in my mind that the euro is just another flawed fiat currency. It could never serve as a real place holder for investor’s wealth or become a viable alternative to owning precious metals. However, it deserves to maintain its status as an excellent diversification- currency for those who hold excess dollars. But we currently find the question being asked more today than ever before if the USD can act as a safe haven from the troubles over in Euro land? The answer to that question can be found in the data and the data clearly shows that it cannot.
Stiglitz, Nobel Prize-Winning Economist, Says Federal Reserve System 'Corrupt' Shahien Nasiripour - HuffingtonPost.com One of the world's leading economists said Wednesday that the very structure of the Federal Reserve system is so fraught with conflicts that it's "corrupt." Nobel laureate Joseph Stiglitz, a former chief economist at the World Bank, said that if a country had applied for World Bank aid during his tenure, with a financial regulatory system similar to the Federal Reserve's -- in which regional Feds are partly governed by the very banks they're supposed to police -- it would have raised alarms.
Economic Downturn hits Lenders and Borrowers Alike Bob Chapman - SilverBearCafe.com We are not going to go into the lurid details regarding residential and commercial real estate, but we are going to give you some highlights. We began telling subscribers to sell real estate in June of 2005, long before anyone else. We picked the top just as we did in September 1988 at the top. Residential real estate won't hit bottom until 2013 and who knows how long it will bump along the bottom. At the end of the year we have a whole new generation of sub prime and ALT-A mortgages coming due for reset. In addition there are the pick and pay loans that are in trouble, and 52% of problems lie, if you can believe it, in prime loans. Residential real estate countrywide is off 32% with a number of areas off 50% or more. In the next two years that national figure will show losses of 45% to 50%, and the former 30 hot city markets will be off 50% to 70%.
Fed Presidents Say Rates Need to Be Low Early in U.S. Recovery By Steve Matthews -- March 5 (Bloomberg) -- Two regional Federal Reserve Bank presidents, speaking before today’s release of a February report on U.S. jobs, said they believe the central bank should keep rates low until the recovery picks up. Chicago Fed President Charles Evans told reporters in Chicago yesterday he needs to see signs of “highly sustainable” growth before supporting steps toward tighter monetary policy. St. Louis Fed President James Bullard said after a speech in St. Cloud, Minnesota that, with the economy at an early stage of renewal, policy makers want to remain “very accommodative.”
Goldman Sachs concedes it could be damaged by public outrage over pay Andrew Clark - guardian.co.uk -- Wall Street bank includes 'negative publicity' in a list of risks to its prosperity and says responding to criticism can be 'time consuming and expensive' Goldman Sachs has officially conceded that widespread public outrage at its employees' multimillion-pound pay packages is a "risk factor" to its ability to do business as it struggles with its status as a poster boy for criticism over excess in the financial services industry. For the first time this year, the Wall Street bank's annual report includes "negative publicity" in a list of risks to its prosperity, alongside economic conditions, market volatility, competition and regulatory uncertainty.
Big Brother’s Money Laundering Fraud Expands… Bob Bauman - SovereignSociety.com These Draconian laws have been on the books in the United States and other countries for the last two decades, supposedly originally aimed at drug kingpins and their illicit cash. Later, the AML laws were claimed by politicians to be needed to stop terrorist cash. In fact, these laws have been mainly used as prosecutorial bargaining chips, since they impose heavy fines and prison sentences. Add ML charges to any threatened indictment and a putative defendant is likely plea to a lesser charge…
The Failure of Anti-Money Laundering Laws Bob Bauman, Legal Counsel for The Sovereign Society This Center for Freedom and Prosperity video examines anti-money laundering laws and finds that they are expensive and intrusive. These costs might be acceptable if the result was less crime, but this mini-documentary reveals that anti-money laundering policies are ineffective. As a former Reagan Administration official remarked, they undermine the fight against crime by misallocating law enforcement resources. http://www.freedomandprosperity.org
Sultans of Swap Fearing the Gearing! by Gordon T Long - FinancialSense.com Ever imagine getting your tie caught in a mechanical set of gears (sorry ladies - but I will spare you). The results are nasty! Now you know what the Sultans of Swap in the $695 Trillion global OTC derivatives market feel like. Every day the slow moving gears of the world economies relentlessly grind, making it harder and harder for the Sultans to wiggle loose or breath. Financial Gearing is what we non-accountants often refer to as simply ‘Leverage’. Whichever your preference, it has the Sultans of Swap tightly caught in a manner that has greatly restricted their options and is now slowly squeezing the liquidity life out of them.
Wen Warns of Bank Risks, Pledges Property Crackdown By Bloomberg News March 5 (Bloomberg) -- Premier Wen Jiabao warned of “latent risk” in China’s banks and pledged to crack down on property speculation as the government faces the consequences of flooding the economy with money to drive growth. “The domestic economy still faces some prominent problems,” Wen, 67, said in a speech in Beijing to the National People’s Congress, similar to the U.S. State of the Union address. He also cited excess capacity in manufacturing and weak support for rural-income growth.
Why China should let the yuan rise By Chris Isidore, senior writer NEW YORK (CNNMoney.com) -- The Chinese have rarely given into foreign pressure to revalue their currency higher. But that doesn't mean they won't let the yuan rise later this year. The Chinese have kept the yuan pegged to the dollar for almost three years. The currency is now about 20% to 40% below where it would be if it traded as freely as most other currencies, according to most estimates. This keeps Chinese exports cheap, and has been blamed for the widening trade gap between China and the United States, as well as the loss of manufacturing jobs in the United States. President Obama and members of Congress have called for the Chinese to allow a rise in the yuan's value.
Not till they’ve nothing left to lose? Rolfe Winkler - Reuters Those calling for financial reform aren’t being upfront about its costs. This was again evident at the Roosevelt Institute’s otherwise very good conference at Time Warner Center yesterday. First the good. The purpose of the gathering was to galvanize support for deeper reforms than lawmakers have proposed. Roosevelt’s Chief Economist Rob Johnson and his murderer’s row of thinkers — including Simon Johnson, Elizabeth Warren, Frank Partnoy, Rick Carnell, Josh Rosner and others — presented a very good white paper outlining how best to clean up the financial system. Other attendees were George Soros, Brooksley Born, Jim Chanos, Joe Stiglitz. Even Eliot Spitzer showed up. When it comes to reform, they all argued, nibbling around the edges ain’t gonna cut it.
White House Offers Bill to Restrict Big Banks’ Actions By SEWELL CHAN - NYTimes WASHINGTON — The Obama administration put forward legislation on Wednesday to rein in the size and scope of the nation’s largest banks. But the proposal faces strong resistance in Congress, where lawmakers have shown little appetite for adding to the prolonged debate on overhauling financial regulations. The legislation would ban banks that take federally insured deposits from investing in hedge funds or private equity funds and from making trades that are for the benefit of the banks, not their customers, a practice known as proprietary trading.
Ron Paul's Problem With The Fed CBSNews.com Rep. Ron Paul (R-Texas.) spoke with Bob Schieffer on Wednesday's "Washington Unplugged", elaborating on his question to Ben Bernanke at last week's Monetary Fund Hearing that the Federal Reserve has funneled money to the Watergate burglars and Saddam Hussein.
Trichet Halts Greece’s Courting of IMF, Stirs European Tensions By James G. Neuger and Simon Kennedy March 5 (Bloomberg) -- European Central Bank President Jean-Claude Trichet pressed Greece to halt its flirtation with International Monetary Fund aid and work with European allies to tame its record budget deficit. As protesters besieged the Greek Finance Ministry to denounce 4.8 billion euros ($6.5 billion) of tax increases and spending cuts, the Athens government said the absence of European support might force it into the hands of the IMF.
I.M.F. Help for Greece Is a Risky Prospect By SEWELL CHAN and LIZ ALDERMAN - NYTimes Greece skirted disaster this week by persuading investors and politicians that it is finally on track to fix its finances. But even before the dust settles, the government is setting the stage for a potential conflict with Germany, France and other European governments that may raise doubts about the sustainability of the euro project. In the last two days, Greece’s finance minister has threatened to turn to the International Monetary Fund for a bailout if Chancellor Angela Merkel of Germany and other European politicians resist pledging aid to help Greece cope with its newfound frugality. Asking the fund for help could create a new round of financial and political turmoil by sending the message that Europe cannot resolve its own problems, analysts said.
German MPs suggest cash-strapped Greece should sell islands Greece should sell some of its uninhabited islands to raise cash to avoid bankruptcy, two German parliamentarians from Chancellor Angela Merkel's centre-right coalition suggested on Thursday. "The Greek state must sell stakes in companies and also assets such as, for example, unpopulated islands," Frank Schäffler, a member of parliament for the pro-business Free Democrats, told the Bild daily. Marco Wanderwitz, an MP for Merkel's own conservative Christian Democrats, said Athens should provide collateral for any money it receives from the European Union to help it out of its debt crisis.
For Greece, Bond Sale Is a Step Back From Disaster By LANDON THOMAS Jr. and DAVID JOLLY - NYTimes LONDON — After pledging to mend its profligate ways, Greece took a crucial step on Thursday toward raising the billions needed to pay its bills and contain the crisis threatening the euro. Even as members of a large labor union occupied the offices of the Finance Ministry in Athens early on Thursday to protest proposed budget cuts, the Greek government won a vote of confidence for its plans in the credit markets. With many investors expecting Greece’s richer neighbors to come to the nation’s aid, Athens easily sold 5 billion euros ($6.8 billion) of 10-year bonds.
Iceland – the Lemmings Rule! by Scott B. MacDonald - FinancialSense.com Iceland's debt problems do not seem to want to go away. If anything the mix of crashed banks, a brutal economic collapse and the demands of foreigners has left the Icelandic population of a little over 300,000 grumpy, ill-tempered and ready to reject a government bill to repay $5 billion to British and Dutch citizens who had put their savings in the now defunct Icesave. Those British and Dutch citizens want their money back; the proposed government bill puts the individual Icelandic price tag at $15,000 each (though most of this would be covered by the sale of bank assets). A referendum is scheduled for Saturday and the most recent poll shows that 74% of intended voters plan to vote down the measure. Hurrah for Iceland! That vote will certainly give the Dutch and British a poke in the eye. At least that it may initially feel like.
Citigroup’s Auction-Rate Bonds Freeze $1 Billion in Hawaii Cash By Christopher Palmeri -- March 4 (Bloomberg) -- Two years after the auction-rate bond market froze, Hawaii has lost about $250 million in market value on $1 billion in student-loan securities sold by a single Citigroup Inc. broker as a cash substitute that the state has had difficulty unloading. Hawaii purchased half of the securities for its short-term treasury account from Honolulu broker Pete Thompson, 60, in the eight months before the market collapsed, according to Scott Kami, an administrator at the state finance department.
US taxpayers hit as TARP takes a new turn By Dan Wilchins and David Lawder - CNNMoney NEW YORK/WASHINGTON (Reuters) - A small Midwestern bank has negotiated with the U.S. Treasury for taxpayers to essentially buy the bank's shares at an above-market-value price, in an unusual transaction reflecting how the government's bank investments are entering a new phase. Midwest Banc Holdings Inc agreed to swap $84.8 million of preferred shares it sold to the U.S. government in 2008 for securities that will convert into about $15.5 million of common shares -- roughly an 80 percent loss to taxpayers. To some analysts, the transaction is an outrageous giveaway to an ailing bank, and its investors. "There's a lot of funny stuff going on here," said James Ellman, president at hedge fund Seacliff Capital in San Francisco.
Citi's Pandit faces bailout questions By David Ellis NEW YORK (CNNMoney.com) -- Citigroup CEO Vikram Pandit thanked U.S. taxpayers for delivering billions of dollars of aid during of the depths of the credit crisis, but offered few details on why the government needed to step in more than once to rescue the embattled firm. Testifying before a congressional watchdog group Thursday, Pandit tried to explain away the government's decision to give the New York City-based bank a second aid package of $20 billion in November 2008, blaming short sellers as well as general malaise in financial markets.
Citi CEO: Bank has transformed since financial crisis WASHINGTON (AP) — Facing sharp questions from bailout overseers, Citigroup CEO Vikram Pandit said Thursday the bank is "fundamentally different" than the tangled behemoth that took more than $45 billion in government aid during the recent financial crisis. "I am pleased to say we are in a far different and much healthier position," Pandit said in testimony before the Congressional Oversight Panel. The independent watchdog group oversees the $700 billion financial bailout. Pandit said Citi's experience during the crisis showed the need for a clearer process to deal with large, failing financial firms — a key priority of the Obama administration.
Dodd: Watchdog must make rules, enforce them (Reuters) - Senator Christopher Dodd, chief negotiator for the Democrats in talks on a bipartisan financial reform bill in the Senate, on Thursday called for creating a new government "office" with the power to craft and enforce rules to protect consumers. In a statement conspicuously omitting any call for an independent agency on consumer protection, Dodd said: "A lot of attention is being paid to what address the new consumer watchdog will have, but the critical question is 'Will this office have the authority and independence it needs?'" President Barack Obama's proposal last year to create an independent Consumer Financial Protection Agency (CFPA) has been the main impediment for weeks to a Senate compromise on financial regulation reform legislation. No compromise bill will be unveiled this week, a committee aide told Reuters late on Thursday.
Dallas Fed President Speaks Dallas Federal Reserve Bank President Richard Fisher discusses the economy, unemployment and more with CNBC.
Obama's new adversary By Shawn Tully (Fortune Magazine) -- On the eve of President Barack Obama's winter health-care summit, Rep. Paul Ryan is dining at Talay Thai, a no-frills restaurant with metal chairs and Formica tables. On this frigid evening, Ryan strolled coatless to Talay -- "I'm from Wisconsin!" he says -- from his cramped Capitol Hill office, where tonight, as on most nights, he'll sleep on a cot. Such frugality is fitting for a politician who, as he sips ice water, frets that America is "sleep-walking toward a debt crisis." Ryan tells me: "Within a few years a sale of government bonds will fail. The capital markets will go crazy, and the Fed and Treasury will run to Capitol Hill demanding a giant bailout. Adding Obamacare would make the crisis go deeper and arrive faster."
America must do more to help its homeowners By Mort Zuckerman America’s housing crisis has not gone away. If anything, it is getting more severe. Today, median single family house prices nationwide are down by slightly more than 30 per cent from their early 2006 peak. Fusion IQ, the research group, estimates that excess inventories will push prices down by a further 10 per cent. This is a critical issue because home equity was for years the largest asset on the balance sheet of the average American family.
Freddie Mac Delinquences Continue to Climb. by Jann Swanson - MortgageNewsDaily.com Retained Portfolio Contracts Delinquencies among loans guaranteed by Freddie Mac continued to rise in January according to the Monthly Volume Summary issued last week. At the same time, the Enterprise's investment portfolio continued to contract. Loans over 90 days delinquent increased to 4.03 percent of all loans during January compared to 3.87 percent in December. The delinquency rate in January 2009 was 1.98 percent. The non-credit enhanced portion of the portfolio had a January delinquency rate of 3.13 percent compared to 3.0 percent in December while the credit-enhanced portion had a rate of 8.52 percent compared to 8.17 percent. The percentage of delinquencies in the multi-family portfolio was unchanged at 0.15 percent.
Recipe for Fixing Fannie and Freddie: More Money, More Loans, More Time By MATTHEW SCOTT - DailyFinance.com Fannie Mae (FNM) and Freddie Mac (FRE) find themselves in the unenviable position of having cornered the market in mortgage lending, only to be unable to make enough money to be profitable. The two taxpayer-funded mortgage servicers are trying to contain rapidly-expanding losses due to shrinking property values during one of the worst housing slumps in history, while also providing liquidity to help stabilize the housing market and create enough profit to get themselves off life support. Ironically, their road to profitability may lie in their ability to use even more taxpayer funds to finance higher-quality loans that are structured to increase in value as interest rates rise when the economic recovery finally gains steam.
30-year fixed mortgage rates dip below 5% again By E. Scott Reckard - LA Times The rate, which has hovered around that mark since September, fell to 4.97% this week from 5.05% last week. The typical rate offered by lenders on 30-year mortgages slipped back below 5% this week, Freddie Mac said Thursday. The mortgage giant's weekly survey found that the average rate available on 30-year fixed-rate loans fell to 4.97%, down from 5.05% last week, with an average of 0.7% of the loan balance paid in upfront fees known as points.
Pending Home Sales Fall Back to Pre-Stimulus Levels. by Adam Quinones - MortgageNewsDaily.com Weather Blamed But Structural Weakness Remains The NAR released Pending Home Sales data this morning. From the release: The Pending Home Sales Index, a forward-looking indicator based on contracts signed in January, fell 7.6 percent to 90.4 from an upwardly revised 97.8 in December, but remains 12.3 percent higher than January 2009 when it was 80.5. A sale is listed as "pending" when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing. Mortgage and real estate professionals know that a signed contract is just the first step in a long process nowadays. The hard part is qualifying and closing!
Declan McCullagh on Alex Jones 1/3: The Cybersecurity Bill - It's Worse Then We Thought!
Declan McCullagh on Alex Jones 2/3: The Cybersecurity Bill - It's Worse Then We Thought!
Declan McCullagh on Alex Jones 3/3: The Cybersecurity Bill - It's Worse Then We Thought!
Starting Over at 55 By STEVEN GREENHOUSE - NY Times AFTER 24 years as a marketing manager for Coors, Cinde Dolphin knew what was coming — Miller and Coors had just merged their United States beer operations, and hundreds of jobs were sure to be eliminated. Worried that these youth-oriented companies might lay off an old-timer like her, Ms. Dolphin decided to take a buyout and relax. She sunned on the beaches of New Zealand, went whitewater rafting on the Yampa River in Colorado and saw friends and Broadway shows in New York.
I'm a Medicare doctor. Here's what I make By Parija Kavilanz NEW YORK (CNNMoney.com) -- When you think of low-paying jobs, doctor doesn't usually come to mind. But with a 21% cut in Medicare payments slated to take effect later this month, physicians who say they are making an OK living may be reduced to income levels that no longer make their profession viable. That's especially true for those still paying medical school costs and other training. "The cuts will hit me," said Dr. William Schreiber, a primary care physician based in North Syracuse, N.Y. Schreiber sees 120 patients a week. About 30% of them are enrolled directly in Medicare, while another 65% have private insurance plans that peg their payments on Medicare's rates. Only 5% pay on their own.
US Job Market Could Worsen As Stimulus Money Dries Up By: Albert Bozzo - CNBC.com Snow in February is not the last of the stormy weather for the US labor market. The weak rebound in the services sector will be a drag on job creation in the near term. And stubbornly high budget deficits at many states will bring more job cuts as federal stimulus spending declines significantly next year. Congress’ latest bill to extend unemployment benefits and contingency health insurance coverage for several hundred thousand people also underscores the need to stabilize the situation.
House OKs $15 billion jobs bill Andy Sullivan - Reuters Congressional Democrats made headway on Thursday on their top legislative priority -- job creation -- when the House of Representatives approved a $15 billion package of tax credits and highway construction. The 217 to 201 vote gave Democrats a much-needed victory after weeks of delay caused by Republican tactics, a record-setting snowstorm and internal bickering. More job-creation efforts are in the pipeline, House Speaker Nancy Pelosi said. "Today's legislation is ... one key element of our agenda to get Americans back to work and strengthen our economy," Pelosi said on the House floor.
Federal pay ahead of private industry By Dennis Cauchon, USA TODAY Federal employees earn higher average salaries than private-sector workers in more than eight out of 10 occupations, a USA TODAY analysis of federal data finds. Accountants, nurses, chemists, surveyors, cooks, clerks and janitors are among the wide range of jobs that get paid more on average in the federal government than in the private sector. Overall, federal workers earned an average salary of $67,691 in 2008 for occupations that exist both in government and the private sector, according to Bureau of Labor Statistics data. The average pay for the same mix of jobs in the private sector was $60,046 in 2008, the most recent data available.
Shorter Yellow Lights: Are They Your Town's Latest Cash Cow? By JONATHAN BERR - DailyFinance.com -- The yellow traffic light is taking on a new meaning for motorists during these tough economic times: one expensive trap. According to the National Motorists Association (NMA), some municipalities have been caught shortening the time in which yellow lights are on in order to generate additional revenue from tickets issued to motorists caught on traffic cameras running red lights. At least six cities including Dallas and Chattanooga, Tenn. have engaged in the practice in recent years, the organization's Web site says. Traffic cameras are seen as cash cows by their backers. Big cities reap millions in revenue from the cameras, which cost about $100,000 to install. Los Angeles issues about 3,600 red-light violations a month through its camera systems and netted more than $6 million last year from the program after expenses, according to the Los Angeles Times.
Leather Seats and Computer Navigation Enhance Small Vehicles of Desire By JACK EWING - NYTimes -- GENEVA — In 1959, Volkswagen helped make its Beetle into a best-seller in the United States with the advertising slogan “Think Small.” Nowadays the motto could be “Think Small and Pricey.” Under pressure to cut fuel consumption, and trying to appeal to younger buyers, carmakers are increasingly rolling out small, stylish cars with accoutrements normally found in high-end vehicles. These new models from luxury carmakers like Audi or BMW, many of which were on view at the Geneva International Motor Show this week, are not the boring econoboxes of yore.
Starbucks in crosshairs on gun-control debate By Hibah Yousu NEW YORK (CNNMoney.com) -- The debate over gun control is heating up at Starbucks. Gun owners bearing arms have been gathering at various Starbucks locations in states where it's legal to do so in public. That's sparked protests from gun-control advocates and kudos from pro-gun groups. The coffee chain says that its stores simply abide by state laws, and it is legal to carry weapons in 43 states. But businesses have the right to prohibit customers from carrying guns in their establishments despite state laws, and that's the crux of this particular dust-up.
U.S. Forces Plan DIRECT ACTION AGAINST American Citizens There is an event coming in the very near future that is going to effect the USA to its very soul, former Kansas State Trooper Greg Everson of The Heartland USA and former host of Republic Broadcasting Voices from the Heartland. . . What is being planned and what is coming together is a perfect storm brewing right over our heads. Everson cited verifiable information confirmed by an active duty US Air Force Colonel, three chiefs of Police, a local Sheriff, State Troopers in 3 neighboring Midwest states and a Federal agent he has known for twenty years.
Coffee Party wakes up US radicals Ed Pilkington - guardian.co.uk Just when the Tea Party movement appeared to be spreading across the US, a radically different vision of America has emerged, courtesy of Facebook Just when the Tea Party movement appeared to be spreading across the US, a radically different vision of America has emerged, courtesy of Facebook. Its title might not be imaginative, but the Coffee Party USA is making waves. In just a month its Facebook page has acquired more than 50,000 fans; and supporters of this left-of-centre alternative were logging their interest at a rate of a thousand an hour today. On the face of it, the rivals share features beyond their beverage titles: offspring of social networking websites; self-consciously harnessing energy unleashed by populist frustrations with the political establishment; and strong views on the nature and role of government.
US facing surge in rightwing extremists and militias Chris McGreal - guardian.co.uk The US is facing a surge in anti-government extremist groups and armed militias, driven by deepening hostility on the right to Barack Obama, anger over the economy, and the increasing propagation of conspiracy theories by parts of the mass media such as Fox News. The Southern Poverty Law Centre, the US's most prominent civil rights group focused on hate organisations, said in a report that extremist "patriot" groups "came roaring back to life" last year as their number jumped nearly 250% to more than 500 with deepening ties to conservative mainstream politics.
Sander Levin: Meet Charlie Rangel's Replacement Posted by Brian Montopoli - CBSNews.com The selection of Sander Levin as the new (and ostensibly temporary, though that remains to be seen) chair of the House Ways and Means Committee -- replacing embattled New York Rep. Charles Rangel (and, after a daylong stint, combative California Rep. Pete Stark) -- has Americans wondering: So who's Sander Levin?
Health Care Video Town Hall Response
Pressure mounts for/against healthcare bill By Kim Geiger and Tom Hamburger - LA Times Campaigns on both sides of the issue ratchet up, targeting House lawmakers who could be the final swing votes. Reporting from Washington - As President Obama pushes for a prompt up or down vote on his health initiative, lobbyists and activist groups on both sides of the issue have launched grass-roots and high-dollar advertising campaigns on the roughly two dozen members of Congress who may be the final swing votes on the controversial issue. At the headquarters of Americans for Tax Reform, 200 conservative activists received briefings on the message that will be carried to the home districts of key House Democrats.
Health insurers challenged to justify rate increases to the public By Liz Sidot - LA Times -- In a White House meeting, Health and Human Services Secretary Kathleen Sebelius tells CEOs they should post explanations for their companies' premium hikes online. Health and Human Services Secretary Kathleen Sebelius told the nation's leading health insurers Thursday to justify publicly a spate of double-digit premium hikes that have infuriated consumers in at least half a dozen states. Meeting at the White House with the chief executives of WellPoint Inc., Aetna, Cigna and UnitedHealth Group as well as several state insurance commissioners, Sebelius asked the companies to post online their justification for proposed rate hikes primarily affecting customers who directly purchase their own coverage.
Bill Gates talks about ‘vaccines to reduce population’ by F. William Engdahl - FinancialSense.com Gates declares, "First we got population. The world today has 6.8 billion people. That's headed up to about 9 billion. Now if we do a really great job on new vaccines, health care, reproductive health services, we lower that by perhaps 10 or 15 percent." In plain English, one of the most powerful men in the world states clearly that he expects vaccines to be used to reduce population growth. When Bill Gates speaks about vaccines, he speaks with authority. In January 2010 at the elite Davos World Economic Forum, Gates announced his foundation would give $10 billion (circa €7.5 billion) over the next decade to develop and deliver new vaccines to children in the developing world.
World's cheapest EV: Tata Nano electrifies Geneva show The world's cheapest car, transformed into the world's cheapest electric car, went on display at the Geneva Motor Show. India's Tata Nano EV seats four, has a predicted range of about 80 miles and will go from zero to about 35 miles per hour in a blistering 10 seconds. The car has super-polymer lithium-ion batteries, which Tata says provide superior energy retention. "Electrification will be an integral part of our initiative to launch environment-friendly vehicles," said Ravi Kent, vice chairman of Tata.
Toyota complaints mount 731 more owners report speed issues BY JUSTIN HYDE - FREE PRESS WASHINGTON STAFF WASHINGTON -- About 731 owners of Toyota vehicles not covered by two recent recalls have reported sudden acceleration complaints to U.S. auto safety regulators in the past six weeks, a Free Press analysis found. The growing crowd of complaints, representing about half of the 1,460 received by the National Highway Traffic Safety Administration since Jan. 15 about Toyota models and sudden acceleration, adds to evidence that Toyota still hasn't identified all possible causes of the problem. NHTSA also said Wednesday it had identified 10 complaints from Toyota owners who had vehicles fixed under recall only to have sudden unintended acceleration again. The agency said it was calling those owners for details.
Car sales rocket as China tries to boost consumer spending By Kathy Chu and Calum MacLeod, USA TODAY BEIJING — Ahead of the lunar new year holiday that rates as this nation's biggest party, buyers packed the Huaxiang car market in southwest Beijing. Some wanted to drive home a new car in a physical sign of their success in the soon-ending Year of the Ox; others wanted to trade up before the new Year of the Tiger that began Feb. 14. Lu Guozhi, 50, a retired railway official, helps a friend shop for a car. They eye a Geely CK sedan, a popular Chinese brand, which comes with an attractive price tag — 39,800 yuan, or about $5,800 U.S. — and qualifies for a government tax break for smaller-engine cars.
Yukos tells court: Russia sought to destroy us By Deborah Seward, Associated Press Writer STRASBOURG, France — The Russian government deliberately sought to "destroy" the now-defunct oil giant Yukos in a politically motivated effort, a lawyer for the company argued Thursday before the European Court of Human Rights in seeking nearly $100 billion in damages. Thursday's long-awaited hearing marked a milestone in Yukos' efforts to win acknowledgment that the Russian government's actions against it were "unlawful, disproportionate, arbitrary and discriminatory, and amounted to disguised expropriation" of what was once the government's second-largest source of tax revenue.
Financially Speaking, What Type of Boomer Are You? by Rob Reuteman, Special to CNBC.com The people born between 1946 and 1964 have been lumped together as the Baby Boom generation their entire lives, but their values and outlooks differ greatly along that 18-year spectrum. The oldest boomers are 64 this year, on the cusp of retirement. At the other end, those born in 1964 are 46 this year, typically at the peak of their earning years. They're just beginning to feel mortal and may have one eye cocked toward eventual retirement, but after all, it's 20 years away. The so-called Leading-Edge boomers—those born between 1946 and 1954—are staring it full in the face.
Going Nuclear, Again By Ruth Marcus - TruthDig.com WASHINGTON—Get ready for the new nuclear option. You may remember the old version, legislatively speaking, which came up during the George W. Bush-era controversy over filibustering judicial nominees. The nuclear option was the notion of moving to change Senate rules on the filibuster by a simple majority vote. Think ending a filibuster is hard? That takes only 60 votes. Changing Senate rules ordinarily takes 67. The idea behind the nuclear option was to lower that threshold: The Senate majority leader would seek a parliamentary decision on whether the filibuster is permissible in the case of judicial nominees. If the parliamentarian determined a filibuster was allowed, that ruling could be appealed and overturned by a simple majority.
Prof. Elizabeth Warren on the Financial Crime Cartel's Owed Nation (U.S.) 1 of 3
Prof. Elizabeth Warren on Subprime and Foreclosures Problem 2 of 3
Prof. Elizabeth Warren on Rating Agencies for the Financial Crime Cartel 3 of 3
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