Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Fri 04.30.2010
It's For Your Own Good By Nancy Morgan - CapitolHillCoffeeHouse.com Since I’ve been otherwise occupied making a living, it’s reassuring to know that my government is looking out for me. In just the last month, our tireless public servants have proposed numerous measures that will make my life better and more worry free. No longer will I have to worry about drug addicts being able to rig a urine test. The Senate is set to vote on a measure that would make it illegal to sell fake urine for the purpose of falsifying a drug test. Whew.
U.S. Said to Open Criminal Inquiry Into Goldman By LOUISE STORY - NYTimes.com Federal prosecutors have opened an investigation into trading at Goldman Sachs, raising the possibility of criminal charges against the Wall Street giant, according to people familiar with the matter. While the investigation is still in a preliminary stage, the move could escalate the legal troubles swirling around Goldman. The Securities and Exchange Commission, which two weeks ago filed a civil fraud suit against Goldman, referred its investigation to prosecutors for the Southern District of New York, which has now opened its own inquiry.
Federal criminal probe into Goldman trading (Reuters) - Federal prosecutors are conducting a criminal probe into whether Goldman Sachs Group Inc or its employees committed securities fraud in connection with its mortgage trading, the Wall Street Journal reported on its website on Thursday. A spokeswoman for the office of the Manhattan U.S. Attorney said she could "neither confirm nor deny" any Goldman investigation. Goldman was not available to comment. The U.S. Securities and Exchange Commission has already filed a civil fraud lawsuit against Goldman, charging that it hid vital information from investors about a mortgage-related security.
Goldman set to settle SEC fraud case soon (Reuters) - Goldman Sachs may soon settle its fraud case with the U.S. regulator, the New York Post reported on Thursday, opting to end a legal fight rather than endure a repeat of the public flogging it received this week. The Post report, citing sources familiar with the matter, said Wall Street's top investment bank was mulling closing the fraud case with the U.S. Securities and Exchange Commission (SEC) to limit damage to its reputation. "It's almost a certainty that there will be a settlement," the paper quoted a source as saying.
SEC likely to win against Goldman Eliot Spitzer, Former New York Governor and Attorney General, says the SEC will likely be successful in its fraud charges against Goldman Sachs
Feldstein Says Greece Will Default and Portugal May Be Next By Simon Kennedy and Thomas R. Keene April 29 (Bloomberg) -- Harvard University Professor Martin Feldstein said Greece will eventually default on its bonds and other euro-area nations may follow, most probably Portugal. “Greece is going to default despite all the talk, despite the liquidity package,” Feldstein, who warned almost two decades ago that the euro would prove an “economic liability,” said in an interview with Tom Keene on Bloomberg Radio today.
Spain, Portugal crisis adds glitter to gold By Geena Paul LONDON (Commodity Online): It seems gods of luck and tragedies are helping gold out of the way now. One after another the world is witnessing economic catastrophes and the yellow metal is making the maximum out of all these disasters. After the US sub-prime crisis, Dubai debt disaster and Greek economic tragedy, the new imbroglio boosting gold is Spain and Portuguese debt situation. In fact, the recent Greek debt crisis is slowly spreading to almost all European countries and causing panic among investors as they fear another economic slump in the coming days. This fear has helped gold prices to gain as more and more investors started pumping in money to gold as a safe haven investment.
Spain is in Pain by Chris Vermeulen - FinancialSense.com US Dollar & Gold Are Safe Havens It’s been an interesting week with Spain being downgraded as Europe debt crisis widens. This has investors looking at the US dollar in a new light thinking that maybe it’s not that bad of an investment after all. This sent the US Dollar higher along with the price of gold so far this week. The past 7 days we have seen both the US Dollar and Gold rise together which is not something that happens often. With financial crisis’s popping up around the world I think the US dollar and gold will continue to strengthen (with corrections along the way). I think it will take another 12-24 months before another wave if issues arise in the financial markets and until then we just continue to focus mainly on buying the dips and corrections with the occasional short play in the larger corrections.
Eurozone Debt Crisis the 'Canary in the Coalmine' as U.S. Deficits Soar Gold: Gold finished at its highest level since early December and had its fourth consecutive day of gains Wednesday as a debt ratings downgrade for Spain and surging credit spreads created new fears of the eurozone sovereign debt crisis spreading and financial contagion. Gold for June delivery gained $9.60/oz, or 0.8%, to $1,171.80 an ounce on the Comex division of the New York Mercantile Exchange. Gold remained near record nominal highs in pounds, euros and Swiss francs. Some of the gains were given up in Asian trade overnight prior to gold rising again in all currencies in early European trade this morning. The US dollar and British pound have fallen and this is seeing gold rise again today
Asian markets wary after Spain downgrade Asian stock markets were little changed on Thursday after two days of selling, with investors treading cautiously after Spain became the third European country this week hit with a downgrade of its debt. AP - The dollar, meanwhile, gained against the euro and fell against the yen, and oil prices slipped toward $83 a barrel. The European debt crisis spread on Wednesday when Standard & Poor's lowered its credit rating for Spain amid concerns about the country's growth prospects following the collapse of a construction bubble.
Greece is just the 'tip of the iceberg', Nouriel Roubini warns Telegraph.co.uk Greece is just the "tip of the iceberg” of a sovereign debt crisis that has the potential to derail a global recovery, Nouriel Roubini has warned. Professor Roubini, the New York-based academic who was one of the few to anticipate the scale of the financial crisis, told a panel in California that the buildup of debt is likely to lead to countries defaulting or resorting to inflation to ease the burden on their populations. “While today markets are worried about Greece, Greece is just the tip of the iceberg,” Roubini told the Milken Institute Global Conference in Beverly Hills, California. "The thing I worry about is the buildup of sovereign debt.”
Sovereign Default - Who Is at Fault? I am watching the Greek crisis as it takes its painful course, and have noted that there are some views which seem to suggest that Germany has an obligation to rush to the rescue. The following Guardian article is typical, though the excerpt below does not really capture the overall sentiment of the article: After days and days of hesitation and apparent indecision, when speaking to the audience at the rally in Bocholt, Merkel played the populist card. We're right to tell the Greeks: you have to save money, you have to be candid and you have to work on your honesty, otherwise we can't help you, Merkel said.
Geithner: market should have more say on yuan rate David Lawder - Reuters.com (Reuters) - It is important for China to allow the market to play a bigger role in setting the value of its currency, U.S. Treasury Secretary Timothy Geithner said on Thursday. The Obama administration has been pressing China for months to allow the yuan to resume appreciation, with some economists estimating the currency is as much as 40 percent undervalued, giving Chinese firms a huge competitive advantage.
European Debt Crisis Right Around the Corner? U.S. Housing Collapse Redux on the Way? I must admit folks that I am in awe of what I see each day in the financial markets. It's also very hard to make any sense of any of it when it comes to investing. Things that would have been considered tinfoil 4 years ago now have become reality. I mean heck: If anyone would have told me three months ago that Goldman Sachs (GS) would be accused of fraud I would have laughed in their face. Yet (minus Tuesday's hiccup), the market continues to march higher despite being surrounded by seemingly endless economic landmines that threaten to destroy our financial system.
Marc Faber Says It's Time to Kick Greece Out of EU
European Debt Woes Complicate China’s Money Moves By KEITH BRADSHER - NYTimes.com HONG KONG — Spreading problems in Europe’s sovereign debt markets pose potential challenges for China, which has been stepping up its investments in European government bonds and relies on Europe as its biggest export market. The turmoil that Europe’s difficulty has caused in financial markets already appears to have caused tens of billions of dollars in paper losses in China’s foreign exchange reserves. And the problems may complicate the timing of an expected Chinese move to break the informal peg of the Chinese renminbi to the dollar, Chinese and Western economists and bankers said on Thursday.
Gold hits four-month high By Kara Gammell - telegraph.co.uk The gold price has risen to a four-month high after Standard & Poor's, the rating agency, lowered Greece and Portugal's credit ratings, spurring demand for the metal. The price of gold later fell back after speculation that economic growth would erode demand for the precious metal as an alternative asset. In sterling terms, gold hit a new record of £767. S&P's downgrade means certain investors will no longer be allowed to buy Greek debt and could also curb Greece's access to vital European Central Bank funds. Soon after Portugal's downgrade, gold surged – rising from $1,145 an ounce to $1,172.60 – on safe haven demand. It rose strongly in dollars but by even more in all other major currencies, except the yen, which was strong yesterday despite increasing concerns about the Japanese fiscal position.
Gold, Silver, Palladium True Bull Market by Sol Palha - FinanacialSense.com The injuries that befall us unexpectedly are less severe than those which are deliberately anticipated. Marcus T. Cicero, 106-43 BC, Great Roman Orator, Politician All the precious metals are behaving extremely well in the face of a stronger dollar; the standout player is Palladium. Palladium has refused to buckle under the face of a stronger dollar and instead continues to put in a series of new highs. This is what a true bull market looks like. Gold has refused to put in a new 6 month low even though the dollar continues to trend higher and has put in several 11 month new highs and will soon most likely put in a series of new 52 week highs. This action suggests that once this consolidation/corrective phase is over, the odds of the entire precious metals sector exploding upwards are rather high.
‘Gold bull at $2100 is a severe inflation booster’ By Jordan Roy-Byrne - CommodityOnline.com Since early 2009 we’ve written about the super-bullish long-term cup and handle pattern in Gold. It dates back to 1980 and has a logarithmic target of about $2,100. We noted that previous cup and handle patterns in Gold all reached their logarithmic target. We expect that this move to $2,100 will be the recognition move that awakens the masses to the Gold bull market and the reality of severe inflation in the near future. Speaking of the near future, the relative strength of Gold in the face of a strong US dollar (or weak Euro) is one big hint that this recognition move is around the corner. We’ve noted this before and it is important to explain to new readers. Gold priced in foreign currencies has been leading Gold in US$ terms. It is true for the entire bull market and is quite evident in just the past few years.
Gold and ‘The’ Parabolic Peak by Dudley Baker - FinancialSense.com Frequently we are told that gold will go to $2,000, $3,000 or more. We will not get into all of the arguments of attempting to arrive at a reasonable price based on supply/demand, inflation/deflation, etc. but rather to see if there is a pattern we can detect from reviewing some historical charts. Sometimes we hear in the press that gold is in a bubble or has gone parabolic. What does all of this mean to investors and how do we make decisions based upon these statements?
Get Prepared For Massive Launch by Neil Charnock - FinancialSense.com We have been looking at global trends and the debt markets very carefully this year so as to remain prudent about our views on the direction of gold and the Australian gold sector. This may seem like a long bow to draw however the thigh bone is connected to the knee bone when it comes to global markets and capital flows. We specialize on coverage of gold and the Aussie gold stocks that make up the Australian gold sector which is one of the important gold share markets due to our high level of gold production and another key reason I will get to shortly. Another important part of our work is on the currencies due to the importance of the AUD to our gold sector and also for our international clients. We have even taken on a leading Fx broker as an advertiser due to the importance of Fx for international capital flows at this point in history.
The Ultimate Currency Hedge by Adrian Ash Nothing works like gold when you need to hedge against your own currency... WEDNESDAY'S NEWS that, at last, Standard & Poor's has caught up with the bond market – and the steady trickle of fleeing bank deposits – by downgrading Spanish debt had a marked effect on the Euro. So did Tuesday's downgrade to "junk status" of Greece's government bonds. And the cut to Portugal's credit rating, too. It all had a marked effect on gold as well, not least versus the Euro, but also against the US Dollar and Japanese Yen – apparently the only beneficiaries of "Ebola contagion" in Europe...
Gold scores full while Dow a dismal zero By Hubert Moolman - CommodityOnline.com It seems that gold and the Dow have an agreement regarding the number 10. This number has acted like a “golden ratio” in that things really start to happen before or after the Dow/gold ratio breaches 10, either way. 10 out of 10 for Gold In Jan 1973 the Dow peaked at 1067, a level it did not managed to surpass until after gold peaked in 1980. In that same year gold bottomed at about the $90 level just after it made a peak close to the $130 level in the same year. Also in 1973 the Dow/gold ratio managed to go below 10 for the first time since it peaked in the middle of the 60’s at about a ratio of 27. At the end of 1973 it retested the 10 level and from there zoomed down to bottom at about the 3.2 level the very next year. From that bottom in 1973 gold doubled in a matter of less than 6 months.
The Economic Policy Error Behind the Stock Market Rally and the Next Phase of the Financial Crisis JESSE'S CAFÉ AMÉRICAIN "The 20th century has been characterized by three developments of great political importance: The growth of democracy, the growth of corporate power, and the growth of corporate propaganda as a means of protecting corporate power against democracy." Alex Carey The strategy of the Bernanke Federal Reserve and of the Obama Administration's economic team is fairly clear: prevent the bank failures of the 1930's by propping up the biggest banks with huge infusions of publicly subsidized capital, and hope that they start lending again as the economy recovers. It is a variation of the 'trickle down' theory of economics adjusted by the perceived Fed policy errors of the first Great Depression, with little from the New Deal programs.
The 800 LB Gorilla in the Financial Reform Bill by Joel Skouse - FinancialSense.com The lackluster Republican opposition to Senator Dodd’s Financial Reform bill is focused on whether or not the Democratic proposal allows for or prohibits additional bailouts. A secondary hot topic is the supposed derivative limitations. Frankly, these are both red herrings. They serve to mask an even larger danger that no one is talking about: a huge new government agency that will control all financial institutions in the US—and not just the "too big to fail" ones. It’s called the Financial Institutions Regulatory Administration (FIRA), and its authority absorbs and supersedes every other banking, thrift and stock market regulatory agency including the SEC—though it technically doesn’t actually eliminate any agency (as we might expect of government).
The Fed’s Hollowing Out Of US Banks by Daniel R. Amerman, CFA - FinancialSense.com Overview Have the Federal Reserve’s unprecedented market and banking interventions fundamentally weakened America’s banks? In this article, we will illustrate how the Federal Reserve has been hollowing out the US banking system. We will show how the Fed has been creating a banking industry shell that looks strong on the surface, but is increasingly empty beneath that facade, with less and less economic strength, and an ever greater reliance on the Federal Reserve’s monetary creation ability.
Bob Prechter Points Out The Many Signs Of Deflation by Editorial Staff - FinancialSense.com Yes, You Heard Us Right Everywhere you look, the mainstream financial experts are pinning on their "WIN 2" buttons in a show of solidarity against what they see as the number one threat to the U.S. economy: Whip Inflation Now. There's just one problem: They're primed to fight the wrong enemy. Fact is, despite ten rate cuts by the Federal Reserve Board to record low levels plus $13 trillion (and counting) in government bailout money over the past three years -- the Demand For and Availability Of credit is plunging. Without a borrower or lender, the massive supply of debt LOSES value, bringing down every exposed investment like one long, toppling row of dominoes. This is the condition known as Deflation.
Watching and Waiting, the U.S. Defers to Europe on a Debt Crisis By SEWELL CHAN - NYTimes.com THE United States is the largest shareholder in the International Monetary Fund and has played a forceful, interventionist role in financial crises since the early 1990s, in countries like Mexico, South Korea, Russia and Argentina. But as Europe gropes for a solution to a debt crisis that threatens to spread from Greece to Portugal and Spain, American officials have been resolutely reticent. “There’s a sense in the Obama administration that it’s Europe’s responsibility to straighten out problems in the euro zone,” said Randall W. Stone, a political scientist at the University of Rochester and an authority on the I.M.F. “I suspect that any kind of overt interference wouldn’t be appreciated very much.”
U.S. banks not worried about Greece - yet By Chavon Sutton NEW YORK (CNNMoney.com) -- The debt crisis in Greece is unlikely to have an immediate impact on U.S. banks, analysts said Thursday, but contagion to the rest of Europe could prove problematic. U.S. banks have about $176 billion of exposure to the troubled so-called PIIGS countries - Portugal, Ireland, Italy, Greece and Spain - according to a recent report from Barclays Capital, citing data from the Federal Financial Institutions Examinations Council.
Sino-French ties back on track By Ding Qingfen, Ai Yang and Zhang Haizhou (China Daily) Hu will visit France in fall; leaders hold talks on Iran, "New Monetary Order" BEIJING - China and France on Wednesday pledged to draw a line under past tensions and breathe new life into their relationship by working together on issues from Iran to global monetary policy. In a joint appearance before the media after their talks, President Hu Jintao said his French counterpart Nicolas Sarkozy's second state visit to China had "opened a new page" in bilateral relations. Hu also said he will visit France in the autumn, indicating Sino-French relations are back on track.
Goldman Scrutinized by Prosecutors Reviewing SEC Case By Justin Blum and David Glovin April 29 (Bloomberg) -- Federal prosecutors in New York have been examining transactions by Goldman Sachs Group Inc., accused of fraud by U.S. securities regulators, to determine whether to pursue a criminal case, according to two people familiar with the matter. The federal review, which lawyers say is common in such a high-profile case, is being done by the U.S. attorney in Manhattan, said the people, who weren’t authorized to comment and spoke on condition of anonymity.
Goldman and Tourre solidarity might not last By Stephanie Kirchgaessner in Washington - FT.com It is a reality that must make Lloyd Blankfein, chief executive of Goldman Sachs, grimace. The bank’s ability to defend itself against civil fraud charges brought by the Securities and Exchange Commission appears to be linked to the fate of Fabrice Tourre, a 31-year-old trader who once boasted in e-mails that he was selling complex financial products to “widows and orphans”. If Mr Tourre, who has also been charged with fraud, can beat the charges, so can Goldman.
The Disconnect Between Wall Street and Main Street One of the most common questions that I receive goes something like this: “Why should I be investing in the stock market while the economy is still on shaky ground?” This is certainly a reasonable question. After all, U.S. unemployment remains very high, the global real estate market is soft, taxes are rising, countries in Europe are on the verge of bankruptcy, the State of California is basically insolvent, and I could go on and on. So the question that begs to be asked is how, in the face of all these headwinds, can the stock market continue to head higher? How can Wall Street surge while Main Street suffers? Disconnect
Obama to nominate 3 new Fed governors By Hibah Yousuf NEW YORK (CNNMoney.com) -- After months of speculation, President Obama finally named names on Thursday, saying who he plans to nominate to the Federal Reserve's board of governors. Obama will nominate San Francisco Federal Reserve Bank President Janet Yellen to serve as vice chairman of the central bank, the White House said on Thursday.
United and Continental near merger deal By Hibah Yousuf - CNNMoney.com EW YORK (CNNMoney.com) -- Continental Airlines Inc. and UAL Corp.'s United Airlines are nearing a deal to consolidate into the world's largest airline, the Wall Street Journal reported Thursday. The commercial carriers' boards of directors are expected to discuss the negotiations through the weekend and announce the merger on Monday, said the Journal. The union would allow the company to overtake Delta Air Lines, which merged with Northwest Airlines in 2008, as the world's biggest airline.
Vermont House passes health reform bill, 91-42 The Associated Press - Brattleboro Reformer MONTPELIER - The Vermont House has passed a health reform bill that includes designing a single-payer system. By a vote of 91-42 Friday, the House passed a bill with two major sections. One calls for expanding Vermont's Blueprint for Health, which has regional teams of health professionals working to manage the cases of patients with chronic diseases. The bill would set up those teams statewide and would expand the types of health care they deliver.
US cities forced to consider bankruptcy By Nicole Bullock in New York - FT.com Council meetings in Harrisburg, the capital of Pennsylvania, have weighed issues ranging from snow removal and rubbish collection to a rise in dog fighting, but a meeting this week was particularly unusual. In a sign of the tough times, officials called in experts to discuss the pros and cons of going bankrupt. “There is no good option,” Dan Miller, Harrisburg city controller, told the city’s administration committee. Mr Miller and some members of the committee advocated exploring bankruptcy as way to get out from under its debts. Other officials at the three-hour meeting worried about the ramifications.
What's Your Home Worth...In Gold? Joseph L. Shaefer - SeekingAlpha.com I discovered the great chart below at Chart of the Day. It basically tracks the median price of a single-family home in the United States and divides it by the price of one ounce of gold. The result tells you, in a store of value that pre-dates all paper currency and will no doubt outlive any single paper currency, what the value of US housing is today and what it has been for the past 40 years. There are those who will protest that “gold fluctuates too wildly” to provide a worthwhile indicator of value. I would disagree. While gold may fluctuate in dollar terms, or euro terms, or yen terms, it is often the value of those currencies that fluctuate around the price of gold.
‘Strategic’ Mortgage Defaults Jump to 12% of Total By Jody Shenn April 29 (Bloomberg) -- Decisions by U.S. homeowners to walk away from mortgages they can afford account for an increasing share of defaults, according to Morgan Stanley. About 12 percent of all mortgage defaults in February were “strategic,” up from 4 percent in mid-2007, New York-based Morgan Stanley analysts led by Vishwanath Tirupattur wrote in a report today. Borrowers are more likely to stop paying their mortgages the higher their credit scores and the larger their loans, the analysts said.
Not all is well on the housing front. Housing still too expensive for middle class Americans MyBudget360.com 9 Years of Housing Inventory and 7 Million Homes 30+ Days Late or in Foreclosure. How the government is keeping and encouraging expensive housing. Since the recession started in December of 2007, over 7 million foreclosures have been initiated. In no other time in history have we seen this magnitude of problems in the housing market. And these problems still persist. It is estimate that another 6 to 9 million homes are at risk of foreclosure in the upcoming years given the current economy and overhang from the housing bubble. If we measure the health of the housing market through foreclosures, we are only half way through this housing calamity. In many ways, the problem still stems from homes being too expensive relative to the income people make.
Foreclosure Rates Rise in Most Cities By BETSY SCHIFFMAN - DailyFinance.com Less than a month after President Barack Obama announced plans to revamp the federal mortgage assistance program, foreclosure rates in some of the country's hardest hit locales are finally showing signs of a slowdown, according to first-quarter numbers released by RealtyTrac. Predictably, cities in California, Florida, Nevada and Arizona topped the list of metropolitan areas with the highest foreclosure rates, and California dominated with 10 of the 20 cities suffering the most foreclosure activity. But in 14 of those top 20 metro areas, foreclosure activity dropped on a year-over-year basis.
Foreclosure easing in big cities but still spreading By Les Christie NEW YORK (CNNMoney.com) -- Foreclosure filings declined in more than half of the country's worst-hit spots in the first three months of 2010. But that doesn't mean the healing has begun. In a release issued Thursday, RealtyTrac, a leading online marketer of foreclosed homes, reported that foreclosure filings declined in 14 of the top 20 cities year-over-year, most of which are concentrated in the Sunbelt "bubble" states of California, Arizona, Florida and Nevada.
Gerald Celente on BILL MEYER 26 April 2010
Friday's GDP Report: No Middle Class Recovery Peter Morici - SeekingAlpha.com On Friday, the Commerce Department will report estimated first quarter GDP growth. The consensus forecast is for a 3.5 percent increase, further confirming the end of the recession and that the recovery is moderate and disappointing. Unemployment will hang above 8 or 9 percent well into 2011, and most workers will continue to face a tough job market and declining living standards. This recovery is decidedly anti middle class. Wages will not keep up with rising prices, health care premiums and taxes. A good deal of the gains, so far, are going to Wall Street and the medical and intellectual property industries.
More Than a Million in U.S. May Lose Jobless Benefits By Brian Faler April 29 (Bloomberg) -- Since the U.S. recession began in December 2007, Congress has extended the length of unemployment benefits for the jobless three times. Now, the lawmakers may have reached their limit. They are quietly drawing the line at 99 weeks of aid, a mark that hundreds of thousands of Americans have already reached. In coming months, the number of those who will receive their final government check is projected to top 1 million.
Immigration: The Rule of Law Awakens In Arizona By Frosty Wooldridge - CapitolHillCoffeeHouse.com After 30 years of the U.S. Congress and four presidents failing to enforce our immigration laws-- Arizona, led by State Senator Russell Pearce and a brave band of lawmakers—passed SB 1070, the most diligent and forceful immigration law in the nation. In excess of 460,000 criminal illegal aliens find themselves facing, for the first time in 30 years, the rule of law. “We’re tired of tens of thousands of stolen vehicles,” said Arizona resident Michelle Dallacroce. “We’re the kidnapping capital of America. Arizonans fear for their lives daily. Illegals have destroyed our schools, hospitals and communities. They fill our prisons. They kill our cops, ranchers and ordinary citizens. We’re tired of it.”
2 lawsuits challenge new Arizona immigration law BY JONATHAN J. COOPER and PAUL DAVENPORT - AP PHOENIX (AP) - An Arizona police officer and a Latino group filed the first legal challenges of Arizona's sweeping new law cracking down on illegal immigration Thursday. Fifteen-year Tucson police veteran Martin Escobar argues there's no way for officers to confirm people's immigration status without impeding investigations. The lawsuit, filed Thursday in U.S. District Court in Tucson, alleges the new immigration law violates numerous constitutional rights and could hinder police investigations in Hispanic-prevalent areas.
On Arizona and Immigration By Doug Edelman - CapitolHillCoffeeHouse.com Now that Arizona has passed its “controversial” law on illegal immigration, the pro-amnesty crowd is convulsing in a massive collective conniption fit! Unlike the imaginary “violence” of the Tea Parties, these people actually RIOT! Liberals are disingenuously claiming that the law somehow promotes racism or profiling. They’re likening the law to Nazi oppression. They discount the fact that the law does not authorize checkpoints, stopping people to check their status etc. It simply authorizes police, in the course of their normal law enforcement, to check the status of people stopped for other reasons, and to detain those found to be illegally present in the country. This is nothing more than allowing AZ law enforcement officials to enforce the Federal Law!
Judge Napolitano National ID Is Coming For Every American
Republican Tea Party movement could get first senator By Alex Spillius in Washington - Telegraph.co.uk America's burgeoning Tea Party movement is on course to get its first senator. The withdrawal of Charlie Crist, Florida's moderate governor, from the Republican primary has left the way clear for conservative favourite Marco Rubio to claim the party's nomination. Hailed as the first member of the Tea Party to have the potential to break into the Senate, Rubio has risen from political obscurity a year ago to poster boy for the Right-wing populist movement that has spread across the country in reaction to President Barack Obama's liberal agenda.
U.S. Army Trains to Take On "Local Militia Groups / Anti-Government Protesters / TEA Party"
Apple’s Chief Makes Case Against Flash to the Public By NICK BILTON - NYTimes.com Steven P. Jobs, Apple’s chief executive, posted a 1,700-word letter on Apple’s Web site on Thursday, explaining the company’s decision not to allow the multimedia software Adobe Flash on Apple’s mobile devices, including the iPhone and iPad. The letter is the first in-depth public statement by the company discussing its position on Adobe’s software, which is behind millions of graphics and advertisements on Web sites worldwide, since Apple announced that position in January 2007 when it introduced the iPhone.
Kennedy mini-series provokes outrage among American liberals By Nick Allen in Los Angeles - Telegraph.co.uk A new television mini-series on the Kennedys masterminded by the rightwing creator of '24' has outraged American liberals and historians who have branded it a "political character assassination" concentrating on sex and scandal. The series will be broadcast on the History Channel and is being created by Joel Surnow, a political conservative who was behind the globally successful drama in which Kiefer Sutherland plays Jack Bauer, a special agent hunting down terrorists. The History Channel usually screens documentaries and factual reconstructions and "The Kennedys", which will focus on the presidency of John F Kennedy, will be its first venture into the scripted mini-series genre.
Gulf of Mexico oilspill spreads all the way to Capitol Hill Nils Pratley - Guardian.co.uk The Deepwater Horizon oil disaster has killed people, harmed the environment, and has severely damaged BP as a company The fact that 11 people are presumed dead should have made it obvious that the disaster in the Gulf of Mexico represented a threat to the reputation of BP. It was only today, however, a week after the accident, that the penny dropped in the City: BP's share price fell 6.5%, an enormous fall for a £100bn company. The rig that suffered the catastrophic blowout was owned and operated not by BP but by Transocean, the world's largest specialist, which may have lulled investors' fears. When the legal bills are finally settled, that may limit the financial impact on BP. But the company, in the regulatory wording, is the "responsible party" for the field (it owns 65%) and that could be a key factor in the inevitable blame game.
Gulf of Mexico oil spill is likely to be a catastrophe By Geoffrey Lean - Telegraph.co.uk Environmentalists always cry "ecological catastrophe!" when oil gushes into the the sea, and usually they are wrong. A 1993 spill off the Shetlands from the wrecked oil taker Braer, forecast to kill "whole populations" of birds, actually did little damage. Nor did a similarly apocalyptically-hailed one off Spain in 2002. And a scientific expedition a year after the release of a million tons of oil, affecting 350 miles of coast on the Arabian Gulf during the first Gulf War, found no trace of it in 177 out of 180 dives in the sea. WHERE Yet sometimes nature cannot cope. The spill from the Exxon Valdez in Alaska's Prince William Sound in 1989 killed at least 250,000 birds –ten times as more as in any previous disaster – and the area's fragile ecology has yet to recover fully. And already it looks as if the new spill in the Gulf of Mexico may be even worse.
Failed Tool of ‘Last Resort’ Doomed Rig Workers, Allowed Spill By Joe Carroll and Mark Chediak April 29 (Bloomberg) -- A 2-foot-long metal clamp that failed to cut a pipe on the ocean floor may be to blame for the Deepwater Horizon catastrophe last week that killed 11 workers, sank a $365 million drilling rig, and cast a sprawling sheet of crude toward coastal fisheries and beaches. All subsea oil wells are equipped with steel blades known as shear rams that are supposed to slash through the pipe at the top of the well during dangerous pressure surges and close off the flow of crude, said Ron Bohuslavicky, the senior well- control instructor at Well Control School in Houston.
Clinton blasts Iran, Syria in appearance before Jewish group By the CNN Wire Staff (CNN) -- As the United States prepares for a visit next week by Iranian President Mahmoud Ahmadinejad, Secretary of State Hillary Clinton condemned his regime in some of the Obama administration's strongest language to date in a speech Thursday night. "Iran, with its anti-Semitic president and hostile nuclear ambitions, also continues to threaten Israel, destabilize the region, and sponsor terror," Clinton said, addressing the annual meeting of the American Jewish Committee.
Lord Monckton Returns on Alex Jones Tv 1/5: Climate Policy Deception
Lord Monckton Returns on Alex Jones Tv 2/5: Climate Policy Deception
Lord Monckton Returns on Alex Jones Tv 3/5: Climate Policy Deception
Lord Monckton Returns on Alex Jones Tv 4/5: Climate Policy Deception
Lord Monckton Returns on Alex Jones Tv 5/5: Climate Policy Deception
Why Should You Be Freaked Out About Greece? by Megan McArdle - BusinessInsider.com Remember, The Great Depression Had Two Parts The most terrifying words I've seen written so far about the growing crisis in Greece were penned by Yves Smith yesterday: "So the whole idea that the financial crisis was over is being called into doubt. Recall that the Great Depression nadir was the sovereign debt default phase. And the EU's erratic responses (obvious hesitancy followed by finesses rather than decisive responses) is going to prove even more detrimental as the Club Med crisis grinds on." The Great Depression was composed of two separate panics. As you can see from contemporary accounts--and I highly recommend that anyone who is interested in the Great Depression read the archives of that blog along with Benjamin Roth's diary of the Great Depression--in 1930 people thought they'd seen the worst of things.
Roubini: "In A Few Days Time, Joe Weisenthal - BusinessInsider.com There Might Not Be A Eurozone For Us To Discuss" When it comes to the PIIGS, Dr. Doom is in full-on doom mode. Felix Salmon has some good notes on a PIIGS panel from the Milken Global Conference, which included Nouriel Roubini, who is in his wheelhouse when talking about sovereign debt crises. Nouriel, of course, takes that kind of thinking to its logical conclusion, and kicked off the panel by announcing that it was just in time: “in a few days,” he said, “there might not be a eurozone for us to discuss.” There's no way that Greece can implement the 10% spending cut it needs to do in order to stop its debt spiralling out of control at current interest rates — and even if it did, the economic effects would be disastrous.
Nouriel Roubini Discusses U.S., Government Deficit
Already Holding Junk, Germany Hesitates By JACK EWING - NYTimes.com FRANKFURT — Add this to the list of reasons German taxpayers are unhappy about having to lend Greece money to ease its debt crisis: In effect, they already have. Germany’s financial institutions hold some 28 billion euros, or $37 billion, in Greek bonds, according to estimates by Barclays Capital, extrapolating from International Monetary Fund data. Germany’s regulators and many of its banks do not disclose precise figures, but an informal survey on Wednesday of the largest banks indicates that about half of that debt — rated as junk by Standard & Poor’s since Tuesday — appears on the balance sheets of institutions that are owned or controlled by the German government.
The Cost of Insuring the Financial Industry By Bill Bonner - DailyReckoning.com “Ask me how insurance works.” “All right, how does insurance work?” “Well, okay, you give me your money…” “Is that all there is to it?” “Yes.” “Is that a joke?” “Not exactly…” Fire insurance works by sharing out the risk of a fire among hundreds of homeowners. In effect, if one house burns down, the others have already put aside enough money to rebuild it. It’s a kind of voluntary socialism…freely collectivizing the risk of a house fire. But just because you have fire insurance doesn’t mean you will leave a can of gasoline on the kitchen stove. You know it would be a big pain to replace the house and its contents – even if you were made whole financially. That’s why it works, because it doesn’t change human behavior. So, actuaries can calculate the odds of a fire fairly accurately.
Gold Potential to Hit $2,000 to $3,000 Within 2 Years By: Aden Forecast - MarketOracle.co.uk This month’s jump up in precious metals, resources and oil reinforces that the lows in February were likely the lows for the downward correction. For now, the second quarter is off to a good start. The fact that gold’s decline was mild (down 13?%) is saying that the underlying bull market is strong and solid. You should now have your positions bought and in place, waiting for the bull market to further unfold. Platinum and palladium have been strong, reaching new highs and they seem to be leading gold, silver and the metals shares in another leg up in the bull market. In fact, the new highs in many commodities reinforces this.
If gold goes to $5000, where will commodities head By Stewart Thomson - CommodityOnline.com The Bugs Bunny Show continues to take comedy to new levels, surpassed only by the Angela “Euro to Zero” Merkel show. How she manages to keep a straight face while mauling the currency of her citizens, while they give her a standing ovation, is beyond my understanding. If I was in her place, I’d be on the floor screeching with laughter at the stupidity of my citizens while I ruined their currency, if I had her character. After handing the commercial banksters a $500 billion blank check after 8 hours of supposed “deliberation”, she has engaged in endless weeks of rants about why the Greek govt can’t get 1/100th of that amt, unless they agree to an equally endless list of supposed demands to ensure austerity.
Gold climbs as eurozone debt crisis intensifies People's Daily Online - Xinhua Gold futures on the COMEX Division of the New York Mercantile Exchange extended gains on Wednesday, as euro sank to one-year lows against U.S. dollar amid intensified sovereignty debt crisis in Europe. Silver and platinum both dropped. The most active gold contract for June delivery rose 9.60 U.S. dollars, or 0.8 percent, to finish at 1,171.80 dollars. Rating agency Standard & Poor's announced on Wednesday to downgrade the debt rating of Spain by one notch to AA, indicating a negative outlook and possible further downgrade.
All Aboard the Gold Train as Recognition Move Approaches By: Jordan Roy Byrne - MarketOracle.co.uk Since early 2009 we’ve written about the super-bullish long-term cup and handle pattern in Gold. It dates back to 1980 and has a logarithmic target of about $2,100. We noted that previous cup and handle patterns in Gold all reached their logarithmic target1. We expect that this move to $2,100 will be the recognition move that awakens the masses to the Gold bull market and the reality of severe inflation in the near future. Speaking of the near future, the relative strength of Gold in the face of a strong US dollar (or weak Euro) is one big hint that this recognition move is around the corner. We’ve noted this before and it is important to explain to new readers. Gold priced in foreign currencies has been leading Gold in US$ terms. It is true for the entire bull market and is quite evident in just the past few years.
Five Questions About Gold The IMF Refuses To Answer Vince Veneziani - BusinessInsider.com You'll recall that a few weeks ago, we interviewed the IMF on why it had blocked investor Eric Sprott's attempt to buy gold from the fund. We then spoke with Eric Sprott and the Gold Anti-Trust Action Committee, better known as GATA for their take on the matter. Along the way, both GATA and Sprott suggested we ask the IMF some questions that the fund has avoided answering in the past. So we did. They were:
What are the incentives for the IMF not to sell gold on the open market or to investors, be it institutional or retail?
What are the designated depositories for gold?
Did gold physically change hands with the banks you have sold to so far or was the transaction basically bookkeeping stuff (the IMF still holds the physical gold in this case)?
Are there available records on the actual serial numbers of bullion? How is the gold at the IMF tracked and accounted for?
When the IMF says it will "phase out" the sal of available gold, could you be more specific? What amount of gold in regard to what amount of time.
Does IMF support a need for total transparency in the sale of gold despite the effects it could have on various markets?
U.S. Households Lost $100,000 From Crisis By Rebecca Christie April 28 (Bloomberg) -- The financial crisis and recession cost U.S. households an average of about $100,000 in lost wealth and income, according to a study by former Treasury Department economist Phillip Swagel. From June 2008 through March 2009, households’ stock holdings fell $66,000 and real estate dropped $30,000, according to the study released today by the Pew Economic Policy Group. Each household also lost an average $5,800 from unemployment and lower earnings from September 2008 through December 2009, the study said.
Junking Greece May Be Beginning of End for Euro Commentary by Mark Gilbert April 29 (Bloomberg) -- Greece cheated its way into the single-currency club, lied about its deficit for years, and now brings the shame of becoming the first junk-rated member after losing investment-grade status at Standard & Poor’s this week. Greece’s punishment? A 30 billion-euro ($40 billion) handout from its neighbors, with Germany on the hook for almost 8.4 billion euros, followed by France for 6.3 billion euros and 5.5 billion euros from Italy. The rest of the gang members are expected to contribute pro rata, based on their capital subscriptions to the European Central Bank.
Yuan’s Gain Against Euro May Delay China Ending Peg By Bob Chen and Shamim Adam April 28 (Bloomberg) -- The yuan’s climb to a one-year high against the euro will erode China’s competitiveness in its largest export market and delay an end to its currency’s peg against the dollar, said UniCredit SpA and Societe Generale SA. Forward contracts on the currency fell after debt-rating downgrades of Greece and Portugal yesterday deepened concern that a sovereign-credit crisis will hamper a global economic recovery. The European turmoil may buttress Premier Wen Jiabao’s reticence to abandon the yuan’s peg to the dollar, adopted in July 2008 to shield exporters from the world recession.
Jim Rogers on Get out of The Dollars!
Greece's Bill Is Now Due - And Others Will Be Next, Debt Denial and the Five Stages of Greece By: Justice Litle - MarketOracle.co.uk The phenomenon of "debt denial" has gripped not only Greece and the eurozone, but the entire roster of rich Western nations. When the smoke finally clears, you'll want to own gold coins... The eurozone is slowly but surely imploding under an unsustainable debt load. Greece is still center stage, but the woes will soon spread. Ultimately, Greece is the first domino in a long chain of looming debt defaults... and at the end of that chain lies the United States. You'll want to be paid up on "printing press insurance" before the final domino falls - and gold coins might fit the bill nicely in that regard. More on that at the end of today's piece...
Selling Greece to Disney Solves Europe’s Woes Commentary by Alice Schroeder (it's a spoof! . . . . but plausible) April 28 (Bloomberg) -- The following is this columnist’s look into the future of Europe’s debt crisis. A news story on Jan. 5, 2011, may look something like this: . . . . Disney’s decision to buy Greece has been credited to Steve Jobs, CEO of Apple Inc. and Disney’s largest shareholder. In 2009, Jobs told Disney to “dream bigger,” setting into motion a deal that is generating a new series of Disney hit movies and product spin-offs, and transforming the theme-park industry. Theme Parks Already under construction are Space Mountain Olympus, the Pirates of the Aegean water theme park covering hundreds of nautical miles, the Little Mermaid Harpoon thrill ride, and “Trojan,” a multimedia adventure that the company reassured shareholders yesterday will not be adult-themed.
Goldman And The PIIGS Keep Stock Market Jittery By: PaddyPowerTrader - MarketOracle.co.uk The price action and news headlines Tuesday were dominated by US rating agency Standard and Poor’s decision to downgrade the sovereign ratings of Greece and Portugal to BB+ (by a savage and unprecedented three notches) and A- (down two notches) respectively. This saw a dramatic further significant ballooning in bond spreads and CDS to fresh highs whilst the domestic equity markets were down 6% and 5% respectively. With the downgrade of Greek sovereign ratings, the fate of Greek depends on ratings action by the other two major rating agencies Moody’s and Fitch.
Mohammad El-Erian And Paul Krugman by Joe Weisenthal - BusinessInsider.com Both Wildly Gloomy About Spiraling Crisis In Greece The market has been in full-on panic about Greece for awhile now -- hence the parabolic spike in short-term rates -- and now it seems the wise men of the market are fully on board. Felix Salmon points to new pieces from both Mohammad El-Erian and Paul Krugman, both of whom see nothing but bad news right now. El-Erian, in so many words, says Greece will default. Krugman is talking about the real possibility of unwinding the euro and ends his piece with: "I think I’ll go hide under the table now."
Massive Inflation is Coming - Jim Rogers!
Goldman Death Fight May Explain Lloyd’s Words Commentary by Jonathan Weil April 29 (Bloomberg) -- If we are to take Lloyd Blankfein’s word for it, and that’s always a big if, then there must be a lot worse behavior by Goldman Sachs that has yet to be discovered, beyond what was publicly unearthed at this week’s Senate hearing. Here’s what Goldman’s chief executive officer told Tom Coburn of Oklahoma, the ranking Republican on the Senate Permanent Subcommittee on Investigations, when asked if he had any “legal, ethical or reputational” concerns about any of the activities undertaken by Goldman employees that were described during the daylong hearing. “I heard nothing today that makes me think anything went wrong,” Blankfein said.
Barofsky Says Criminal Charges Possible in Alleged AIG Coverup By Richard Teitelbaum April 28 (Bloomberg) -- Neil Barofsky was unpacking boxes in December 2008 when the stench of sewage wafted through the hallways at the 168-year-old Main Treasury Building. The space assigned to him as head of the Office of the Special Inspector General for the Troubled Asset Relief Program, or SIGTARP, was shoehorned into the basement, three floors below U.S. Treasury Secretary Henry Paulson’s offices. “They eventually discovered a broken sewer main beneath the floor,” says Barofsky, 40, adding that he doesn’t think any slight was intended by relegating him to the malodorous quarters. Still, he says with a smile, “I wasn’t given the prime real estate in Treasury.”
Roubini Says Rising Debt Leads to Inflation, Defaults By Vivien Lou Chen and Gabrielle Coppola April 28 (Bloomberg) -- Nouriel Roubini, the New York University professor who predicted the U.S. recession more than a year before its start in December 2007, said rising sovereign debt from the U.S. to Japan and Greece will ultimately lead to higher inflation or government defaults. “While today markets are worried about Greece, Greece is just the tip of the iceberg, or the canary in the coal mine for a much broader range of fiscal problems,” Roubini, 52, said today during a discussion on financial markets at the Milken Institute Global Conference in Beverly Hills, California. Increasing tax revenue won’t be enough “to save the day.”
America’s Second Great Depression (Part 1) By: Mike Stathis - MarketOracle.co.uk Overview - Washington, Wall Street and their partners in crime, the media, have continued to spread the myths of an economic recovery since late summer 2009. In response to the propaganda, the stock market has continued to rally. But most individual investors have been left out of this tremendous rally. . . . With the national debt approaching $13 trillion, no real improvements to the worst and longest recession since the Great Depression, blue chips slashing dividends for the first time in history (eg. DOW), century-old financial institutions now in bankruptcy (Lehman Brothers, Bear Stearns, Washington Mutual), trillions of dollars in bailouts, the largest year-over-year decline in GDP, state tax revenues and housing starts since the Great Depression, over 7 million foreclosures, an additional 7 million more foreclosures over the next 2 to 4 years, more than 8 million lost jobs with about 32 million Americans out of work, more than 40 million Americans on food stamps, a healthcare crisis that has not been addressed, a continuing trend of excessive inflation for food, energy and healthcare, and consumer spending coming to a halt…you can be assured of many things over the next several years:
Several more stimulus packages (which won’t offer any permanent assistance)
Soaring consumer loan defaults
Soaring commercial real estate defaults
Several million additional foreclosures
Rapidly rising and high interest rates
Muted real wage growth
Declining job quality
Lingering high unemployment for several years
Significant downside in the U.S. stock market
Continuation of employee benefit cuts
Continuation of healthcare inflation with millions more medical bankruptcies
A deepening of the entitlement crisis
Excessive inflation over an extended period OR massive inflation that will be countered by double-digit interest rates
A long period of muted consumer spending
Much higher taxes (not just income, but all taxes)
A worsening of America’s Second Great Depression, with up to two lost decades.
World War III
Western Civilization is Doomed By: John Kozy - MarketOracle.co.uk Peace cannot be achieved through violence, it can only be attained through understanding." Ralph Waldo Emerson When I was a boy, I knew a man who repaired clocks and watches as a hobby. (Quartz watches had not yet been invented.) I often sat for hours in utter fascination watching him work. Then one day, I asked, "Frank, how do you know how to do that?" He answered, "Johnny, what man has done, man can do." Therein lies the fallacy of the Nuclear Nonproliferation Treaty. Science and technology is a Pandora's Box. Once opened by one man, company, or country, what is emitted soon becomes everyone's.
Gold vulnerable to Greek debt crisis: by Jeff Nichols NEW YORK (Commodity Online) Last week, the sovereign debt crisis caused daily swings in gold prices and it remains vulnerable to more bad news for Greece or signs that one or another European Union member is following Greece down the road to insolvency, according to Jeffrey Nichols, Senior Economic Advisor to Rosland Capital and senior precious metals economist. Jeff Nichols said that gold should benefit from euro problems and its continuing loss of status as a dollar alternative. In fact, with Europe facing a chronic sovereign debt problem, the euro is itself a shrinking yardstick, hardly a stable unit of value against which to measure the dollar.
EMU domino fears as Spain downgraded, Germany drags feet on rescue By Ambrose Evans-Pritchard - Telegraph.co.uk German leaders have agreed in principle to a rescue package of up to €135bn for Greece in emergency talks with EU and IMF officials, but failed to offer any clarity on the conditions for such aid. Hopes for a respite for Southern Europe's battered bond markets were quickly dashed as Standard & Poor’s downgraded Spain. Rainer Brüderle, Germany’s economy minister, said the Greek bail-out would be much larger than first thought, acknowledging that Greece cannot hope to tap the private debt markets for three years. The heads of the European Central Bank and the International Monetary Fund made a joint pilgrimage to Berlin, pleading with lawmakers in the Bundestag to throw their full weight behind rescue efforts before the chain-reaction spreads to Portugal and the rest of the EMU periphery. Their presence as supplicants in Berlin marks the symbolic moment when Germany appears the undisputed master of Europe.
ECB warns on sovereign debt crisis By Ralph Atkins in Frankfurt - FT.com A top European Central Bank policymaker has intensified warnings of a “full-blown sovereign debt crisis” unless governments take ambitious steps to bring public finances under control, saying the UK, US and Japan faced an even greater challenge than the eurozone. The comments by Jürgen Stark, ECB executive board member – which echoed similar warnings by the International Monetary Fund – highlighted the spreading concerns sparked by the escalating crisis over Greece’s public debt. However, he played down the idea of the ECB offering Greece a lifeline in an extreme scenario by buying its government bonds.
Currency Wars: Markets Shudder on Downgrade of Spain There was unusually heavy put buying yesterday in NY markets on the Spanish stock index ETF. Last month a group of US hedge funds were investigated for collusion in planning short selling assaults on the euro. Having exhausted the developing world, which has largely tossed them out, have the economic hitmen finally turned on the developing world as we forecast in 2005 that they would? This is not to say that Greece, Portugal, or Spain are without problems or fault. There is a general crisis in many of the developed country fiat currencies, including the United States. The rising price of gold and silver, despite the heavy handed manipulation by a few of the banking centers, is a sure sign of a flight from paper controlled by central banks.
Spain hit as Greek 'illness' spreads over Europe Carl Mortished - The TimesOnline.co.uk The crisis affecting the eurozone worsened yesterday when Spain’s credit rating was downgraded less than 24 hours after Greece was sent into financial meltdown. Fear of contagion gripped Europe’s financial markets when the debt rating agency Standard & Poor’s cut the rating on Spain’s sovereign bonds. The decision — coming after the agency downgraded Portugal’s rating and cast Greek bonds into the scrapyard, designating them junk — sent the euro plunging against the dollar.
I.M.F. Promises More Aid for Greece as European Crisis Grows By LANDON THOMAS Jr., NICHOLAS KULISH - NYTimes.com Hoping to quell its biggest crisis since the Asian woes of 1997, the International Monetary Fund promised on Wednesday to increase the 45 billion-euro aid package for Greece to as much as 120 billion euros over three years. The fund is racing to conclude an agreement for more painful austerity measures from Greece by Monday, clearing the way for the government to receive funding and reassuring investors worldwide that European debt is safe. On Wednesday, Dominique Strauss-Kahn, the I.M.F.’s forceful managing director, made the higher aid pledge in a private meeting with German legislators. The package would be the equivalent of up to $160 billion and would come from both the I.M.F. and from other countries using the euro.
Dangers loom beyond the eurozone By Chris Giles in London - FT.com The crisis in Greece serves as a warning to other countries not to lose control of their fiscal positions and the confidence of markets. But advanced countries have now stretched their public budgets so far that investors, economists and international organisations are getting worried. Returning to form, the International Monetary Fund warned this month that reducing budget deficits, “should precede the normalisation of monetary policy” in many economies and that they “need to make more progress in developing and communicating credible medium term fiscal adjustment strategies”.
NYU's Roubini Says Greece Wasn't Ready to Join EU
My big fat Greek market bloodbath By Colin Barr - CNNMoney.com (Fortune) -- Europe is finally cobbling together a credible Greek bailout. But even a big wad of cash may not be enough to prevent another round of market mayhem. Officials from the European Union and the International Monetary Fund said Wednesday they hope to agree this weekend with the Greek government on the terms of a bailout package. The IMF said the package could cost as much as $160 billion over three years -- well above the sums previously discussed. European officials have been "dragging their feet" on Greece for months, said Mitchell Orenstein, a European studies professor at Johns Hopkins University in Baltimore.
Ireland suffers fallout from Greek crisis By John Murray Brown - FT.com Ireland was hit by the fallout from the Greek crisis on Wednesday as its bond spreads widened, in spite of bold steps to contain its budget deficit and stabilise its banking sector. Irish government bonds were trading 35 basis points wider at 255bp above German bonds, the largest spread since July last year. Alan McQuaid, chief bond analyst with Bloxham stockbrokers, said: “As much as the Irish economic stabilisation and the progress in recapitalisation of the banking sector are welcome, Ireland remains vulnerable to the external stresses in the financial markets.”
Irish Official Calls Markets 'Irrational' By DAVID JOLLY - NYTimes.com PARIS — A top Irish finance official said Wednesday that the soaring borrowing costs many European governments were facing showed that markets had become “irrational,” and he played down any comparison of Ireland’s financial situation to that of Greece. “The blowout that has occurred across the markets indicates I think that we’ve reached an irrational phase in the pricing of bonds generally,” John C. Corrigan, chief executive of the National Treasury Management Agency, said during an interview. “And the situation with Irish bonds” — the yields of which have soared this week as Greece has melted down — “is on the back of a general blowout.”
Portugal to rush through austerity measures By Peter Wise in Lisbon - FT.com The Portuguese government said on Wednesday it would immediately implement austerity measures initially planned for 2011 in an effort to regain the confidence of international financial markets after a downgrade of its sovereign debt hit borrowing costs and share prices. José Sócrates, Portugal’s Socialist prime minister, said the government would accelerate plans to increase capital gains tax, introduce new road tolls and reduce spending on unemployment and other welfare payments. High earners would also pay more income tax.
Keiser Report with very special Hollywood guest
Goldman on Senate hot seat for reform By Patrice Hill - WashingtonTimes.com Executives explain e-mails, risky deal Goldman Sachs executives on Tuesday strongly resisted attempts by a Senate investigative subcommittee to use the storied Wall Street firm as "Exhibit A" in the Democrats' drive to enact a sweeping reform of Wall Street practices. Members of the Senate Homeland Security and Governmental Affairs permanent subcommittee on investigations repeatedly accused the firm of working against its own clients as well as creating the housing and credit disaster that brought down the global economy in the fall of 2008.
Goldman Sachs adds to its ranks of lobbyists By Tomoeh Murakami Tse - Washington Post Until a few years ago, Goldman Sachs operated a sleepy lobby shop in the nation's capital. But now, faced with fraud charges, investigations, a firestorm of criticism and a regulatory overhaul bill that could seriously damage its profitability, the venerable Wall Street firm is assembling a team of veteran lobbyists, well-connected former Hill staffers and top public relations strategists to confront what is arguably the most traumatic moment in its 140-year history.
Goldman Sachs Bribed Senate To Pass Bailout Bill
Obama Said to Announce Fed Board Nominees Tomorrow By Hans Nichols and Scott Lanman April 28 (Bloomberg) -- President Barack Obama plans to announce his choice of Federal Reserve Bank of San Francisco President Janet Yellen tomorrow as vice chairman of the Fed Board of Governors, according to two people familiar with the decision. The president will also name Sarah Bloom Raskin, Maryland’s commissioner of financial regulation, and Peter Diamond, an economics professor at the Massachusetts Institute of Technology, for the two remaining open seats on the central bank’s seven-person board, according to the people, who spoke on condition of anonymity before the announcement.
Obama Sends in the Clowns By J. Matt Barber - CapitolHillCoffeeHouse.com With a potential political bloodbath looming in November, liberals are understandably desperate. They see it all slipping away and it shows. The grassroots groundswell of opposition to Obama’s neo-Marxist, secular-humanist agenda intensifies daily despite the left’s best efforts to silence dissent. Commensurate with plummeting poll numbers and evaporating public trust, Democrats, media elites and the usual gaggle of left-wing pressure groups have ramped-up the unhinged “right-wing-extremist” twaddle to historically hysterical levels. For those who delight in watching the self-styled “progressive” movement implode, it’s priceless.
Wall Street Begins Taking Bets on Jumbo-Mortgage Debt By Jody Shenn April 28 (Bloomberg) -- Wall Street banks began taking bets on pools of jumbo-mortgage bonds as trading started today on four new credit-default-swap indexes. The PrimeX indexes, administered by London-based Markit Group Ltd., are similar to the ABX indexes tied to subprime debt that began in early 2006, allowing easier wagers on the subsequent record defaults among homeowners with bad credit. When a plan to create the indexes linked to older prime loans larger than the limits for government-supported Fannie Mae and Freddie Mac was announced in December, Wells Fargo & Co. analyst Glenn Schultz suggested investors consider selling jumbo-mortgage securities because PrimeX trading could drive down their prices, as happened with subprime bonds and the ABX indexes he had called “Frankenstein’s monster.”
California Declares War on State Bond Short-Sellers Commentary by Joe Mysak April 28 (Bloomberg) -- California wants to know why underwriters take its money to sell the state’s bonds, and then talk trash behind its back. That’s what California Treasurer Bill Lockyer asked in March of six banks that have made $215 million from selling the state’s general obligation bonds since 2007. “We have information that indicates your firm, which sells California GO bonds, may participate in the municipal credit default swaps market,” the letter said. Lockyer wanted to know why, and to what extent. The treasurer posted the banks’ responses on his Web site last week.
Foreclosure more likely if you’re bad at simple math There’s a better chance you’ll experience foreclosure if your math isn’t up to snuff, according to a new research paper from the Atlanta Fed. Three researchers studied the effect of borrower’s financial literacy and cognitive ability to see what type of role, if any, they played in the mortgage crisis. They surveyed subprime borrowers who took out mortgages between 2006 and 2007, and found foreclosure starts were approximately two-thirds lower in the group with the highest measured level of numerical ability compared with the group with the lowest measured ability.
Homeownership Rates: That Was Then, This Is Now Every now and then it's good to take a stroll down memory lane. Today we have politicians, the media and many borrowers incensed about banks with lending standards that are too loose and complaining about how so many people were enticed to buy homes that they couldn't afford. Doomers might detect a slightly different tone in this excerpt from a 1999 Los Angeles Times article on booming homeownership rates among minorities.
Purchases up as homebuyer tax credit set to expire Mortgage demand decreased 2.9 percent during the week ending April 23 compared with one week earlier, the Mortgage Bankers Association said today. The weekly decline was led by an 8.8 percent drop in refinance applications, while purchase applications picked up the slack with a 7.4 percent week-to-week gain, thanks in part to the expiration of the homebuyer tax credit on April 30. “Purchase activity continues to increase as we approach the end of the homebuyer tax credit program,” said Michael Fratantoni, MBA’s Vice President of Research and Economics, in a release.
Housing Shows Recovery Signs After Prices Fell to 2003 Levels By Kathleen M. Howley April 28 (Bloomberg) -- U.S. housing prices are showing signs of recovery after a slide that sent values to levels last seen in 2003 and left almost a quarter of homeowners with properties worth less than their mortgages. The S&P/Case-Shiller index of home prices in 20 cities rose 0.6 percent in February from a year earlier, the first annual gain since December 2006, the group said yesterday. The National Association of Realtors reported last week that existing-home prices advanced 0.4 percent in March as sales climbed for the first time in four months.
Housing Rebound at Least 3 Years Away By Dan Levy and Daniel Taub April 28 (Bloomberg) -- The U.S. housing market won’t recover for three to five years as mounting foreclosures hold down prices, according to mortgage-bond pioneer Lewis Ranieri. “There’s another big leg down and the question is how long does it stay,” Ranieri, chairman of Ranieri Partners LLC, said during a panel discussion today at the Milken Institute Global Conference in Beverly Hills, California. “You can’t have much of a rally when you’ve got this big overhang.”
One Down, Three to Go By Armand C. Hale - CapitolHillCoffeeHouse.com The passage and signing of SB1070, Arizona immigration enforcement law is a prime example what Joe and Jane Citizen can do. Fed up Arizonans banded together and legally took matters in their own hands. This was to the shock of the east coast D.C. establishment. The border state citizens of Texas, New Mexico, and California must demand their states follow Arizona’s lead or suffer the economic, social and criminal consequences. Attention boarder states. Here is how you can make your state house listen. It is up to you:
Justice Department considers suing Arizona to block immigration law By Jerry Markon and Anne E. Kornblut - Washington Post -- Officials in the Obama administration are urging the extraordinary step of suing Arizona over its new immigration law, and the Justice Department is considering such an action to block the legislation from taking effect, government officials said Wednesday. The Arizona law criminalizes illegal immigration by defining it as trespassing and empowers police to question anyone they have a "reasonable suspicion" is an illegal immigrant. President Obama and Attorney General Eric H. Holder Jr. have blasted the legislation, with Obama saying that it "threatened to undermine basic notions of fairness."
Arizona immigrant law energizes Hispanics, Democrats by Tim Gaynor - Reuters.com (Reuters) - U.S. Hispanics and Democratic lawmakers furious over Arizona's harsh crackdown on illegal immigrants expect huge weekend rallies across the United States, piling pressure on President Barack Obama to overhaul immigration laws in this election year. Protest organizers said on Wednesday outrage over the Arizona law -- which seeks to drive illegal immigrants out of the state bordering Mexico -- has galvanized Latinos and would translate into a higher turnout for May Day rallies in more than 70 U.S. cities. "The marches and demonstrations are going to be far more massive than they otherwise would have been," said Juan Jose Gutierrez, a Los Angeles rally organizer who runs an immigration assistance company.
In 2014, IRS will become health insurance enforcer By Sandra Block, USA TODAY The IRS processed more than 230 million tax returns last year, paid 127 million refunds and received about 68 million phone calls. The agency is responsible for enforcing a tax code that, at 71,000 pages, makes Anna Karenina look like a comic book. Starting in 2014, the agency will have another task: making sure all Americans have health insurance. Under the law, Americans who can afford health insurance but refuse to buy it will face a fine of up to $695 or 2.5% of their income, whichever is higher. More than 4 million Americans could be subject to penalties of up to $1,000 by 2016 if they fail to obtain health insurance, the Congressional Budget Office said last week. The IRS will be the enforcer — sort of.
Wal-Mart $40 Million Pay Suit Accord Wins Approval By Janelle Lawrence April 28 (Bloomberg) -- Wal-Mart Stores’ $40 million settlement of a lawsuit over employee pay in Massachusetts was approved by a judge. “I have approved this settlement,” Superior Court Judge Thomas R. Murtagh in Woburn, Massachusetts, said today. “I believe it is fair and adequate and free of collusion.” Hourly workers claimed in the class-action suit that the world’s biggest retailer made them work “off the clock” and denied or cut short their breaks. The settlement was first announced in December. Each of about 87,000 employees at Wal-Mart and Sam’s Club stores covered by the accord will be paid from $400 to $2,500 depending on their years of work, according to the settlement agreement.
The Real Story of the Oklahoma City Bombing By Roger Aronoff - CapitolHillCoffeeHouse.com While liberal news outlets such as MSNBC were cynically exploiting the April 19 anniversary of the 1995 Oklahoma City bombing by attempting to tie the terrorist attack to the anti-government sentiments of the modern-day Tea Party movement, investigative reporter Jayna Davis was setting the record straight in an exclusive interview on the AIM radio show, Take AIM. The Oklahoma City bombing was an Arab/Muslim terrorist attack on the United States, she says. Davis, author of a blockbuster book on the attack, The Third Terrorist, has examined and presented the evidence showing that Oklahoma City bomber Timothy McVeigh was in fact a front man for Middle Eastern terrorists. The third terrorist, in addition to the two, McVeigh and Terry Nichols, who were convicted, was an Arab. This was the mysterious “John Doe” who was never found. But other members of an Arab terrorist network were involved, she says.
Nation's 1st offshore wind farm, off Mass., gets U.S. go-ahead BOSTON (AP) — The Obama administration has approved what would be the nation's first offshore wind farm, off Cape Cod, inching the U.S. closer to harvesting an untapped domestic energy source — the steady breezes blowing along its vast coasts. U.S. Interior Secretary Ken Salazar announced the decision Wednesday in Boston, clearing the way for a 130-turbine wind farm in Nantucket Sound. Cape Wind was in its ninth year of federal review, and Salazar stepped in early this year to bring what he called much-needed resolution to the bitterly contested proposal.
White House seeks to soften Iran sanctions By Eli Lake - WashingtonTimes.com Wants exemption for firms based in China and Russia The Obama administration is pressing Congress to provide an exemption from Iran sanctions to companies based in "cooperating countries," a move that likely would exempt Chinese and Russian concerns from penalties meant to discourage investment in Iran. The Comprehensive Iran Sanctions, Accountability, and Divestment Act is in a House-Senate conference committee and is expected to reach President Obama's desk by Memorial Day.
Greece's Action on Aid Package Fails to Quiet Threat of Debt Contagion By DON MILLER, Associate Editor, Money Morning -- A request by Greece to trigger a $60 billion rescue package has failed to quell turmoil surrounding the country's bonds - heightening concerns that the debt contagion will force the European Union (EU) to bail out the region's other heavily indebted nations. Greece on Friday asked the International Monetary Fund (IMF) and European governments to fund the emergency aid package to help fend off default when debt payments come due next month.
***** Greece took Goldman's advice on derivatives! GS allegedly shorted euros (insider info about Greece).
Big Fat Greek Debt: Engdahl on bailout way out
Debt Ratings Are Lowered for Portugal and Greece By JACK EWING - NYTimes.com FRANKFURT - Europe's debt crisis deepened still further Tuesday after the ratings agency Standard & Poor's downgraded Greek and Portuguese debt, investors sold off government bonds amid fears of a default, and workers in the two countries took to the streets to protest austerity measures. S.&P. downgraded Greek government debt to junk status, saying in a statement, "Greece's economic and fiscal prospects lead us to conclude that the sovereign's creditworthiness is no longer compatible with an investment-grade rating."
ECB may have to turn to 'nuclear option' to prevent Southern European debt collapse By Ambrose Evans-Pritchard - Telegraph.co.uk The European Central Bank may soon have to invoke emergency powers to prevent the disintegration of southern European bond markets, with ominous signs of investor flight from Spain and Italy. Greece’s fortunes were dealt yet another blow as Standard & Poor’s slashed its credit rating to junk status - BB+ - the first time that has happened to a euro member since the single currency was created, pushing yields on 10-year Greek bonds up to a record 9.73pc. The credit-rating agency also cut Portugal’s sovereign debt ratings by two notches to A-, as the swirling storm hit the country with full-force. “We have gone past the point of no return,” said Jacques Cailloux, chief Europe economist at the Royal Bank of Scotland.“There is a complete loss of confidence. The bond markets are in disintegration and it is getting worse every day.
Ron Paul's Texas Straight Talk 4/26/10: Socialism vs Corporatism
Wall Street's heist Brett Arends, WSJ.com and MarketWatch Goldman Sachs case reminds investors of Deep Throat BOSTON (MarketWatch) -- The fraud case against Goldman Sachs Group Inc. is in early days. And if experience is any guide, you can now expect days of breathless "inside" accounts of every twist, turn, argument, meeting and memo, allegations and counter-allegations, at Goldman and lots of details about who knew what, and when. All very entertaining. But if you want to stay focused on what really matters, just remember the advice Hal Holbrook gave Robert Redford in "All the President's Men." Follow the money. And don't lose sight of the "overall."
The Federal Reserve and the banks join forces against Blanche Lincoln's derivatives proposal Ezra Klein - WashingtonPost.com The banks, of course, aren't big on Blanche Lincoln's idea to spin derivatives-trading desks out of the banks. Particularly the big banks, which as you can in the graphic atop this post, pretty much control the market. But it turns out the Federal Reserve is on their side. According to the Wall Street Journal, "the Federal Reserve over the weekend tried to kill the provision," sending lawmakers a letter saying the idea should be "deleted" from the bill. But as it is, the idea actually appears to be gaining ground, moving from some weird regulation that Lincoln proposed and nobody expected to part of the actual bill.
Peter Schiff vs James Galbraith on CNBC 4/26/10
Finance-Bill Proposal Worries Banks BY SCOTT PATTERSON AND ROBIN SIDEL - WSJ.com Forced Spinoffs of Risky Trading Operations Would Upend a Profitable Wall Street Business A proposal gaining ground on Capitol Hill to force banks to spin off their derivatives-trading operations would represent a severe blow to one of Wall Street's most profitable businesses. Banks took in about $20 billion in revenues in 2009 on trading of derivatives, according to industry estimates of the size of the market for financial contracts tied to other assets, such as oil or mortgages.
"Suck it up. The party's over." Washington's Blog Plan to replace dollars with SDRs? America Is Losing Its Imperial Status, And Global Institutions Such As The IMF, G20 And BIS Are Filling The Void When the International Monetary Fund or World Bank offer to lend money to a struggling third-world country (or "emerging market"), they demand "austerity measures". As Wikipedia describes it: In economics, austerity is when a national government reduces its spending in order to pay back creditors. Austerity is usually required when a government's fiscal deficit spending is felt to be unsustainable. . . . Since the IMF and World Bank lend to third world countries, you may reasonably assume that this has nothing to do with "first world" countries like the US and UK. But England's economy is in dire straight, and rumors have abounded that the UK might have to rely on a loan from the IMF. And as former U.S. Comptroller General David Walker said: People seem to think the [American] government has money. The government doesn't have any money. Indeed, the IMF has already performed a complete audit of the whole US financial system, something which they have only previously done to broke third world nations. . . . The IMF is - in fact - now saying that the U.S. must live more austerely. . . . . And the IMF's currency - Special Drawing Rights (SDRs) - may become the world's reserve currency.
Whose Country Is This? By Patrick J. Buchanan - CNSNews.com With the support of 70 percent of its citizens, Arizona has ordered sheriffs and police to secure the border and remove illegal aliens, half a million of whom now reside there. Arizona acted because the U.S. government has abdicated its constitutional duty to protect the states from invasion and refuses to enforce America's immigration laws. "We in Arizona have been more than patient waiting for Washington to act," said Gov. Jan Brewer. "But decades of inaction and misguided policy have created an unacceptable situation." We have a crisis in Arizona because we have a failed state in Washington.
What's More Important: Liberty Or The Entity That Protects It? By Chuck Baldwin on (Apr 27, 10) - CapitolHillCoffeeHouse.com Let me ask readers a question. What's more important: freedom and its undergirding principles, or the entity meant to protect it? A word of caution: be careful how you answer that question, because the way you answer marks your understanding (or lack thereof) of both freedom and the purpose of government. Thomas Jefferson--and the rest of America's founders--believed that freedom was the principal possession, because liberty is a divine--not human--gift. Listen to Jefferson: "We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men."
Glenn Spencer - The Second Mexican-American War (June 30, 2008)
Civil War on U.S. Border.....Mexican Citizens Fed Up (Feb 23, 2009)
Gold is real asset as paper currencies plunge By Howard S. Katz - CommodityOnline.com Many a weekend since the beginning of the year has been occupied by a "crisis" in the euro. But this weekend's "crisis" seems to be the mother of them all. As such, it will probably put an end to them, and the gold market will pull out of its funk and resume its bull trend. The euro is based on the West German deutschmark. In 1957, Konrad Adenauer instituted the Bundesbank and started Germany on a path of very limited issues of money. Like all other countries of the time the Bundesbank issued paper money. However, it issued it far more conservatively than any other central bank. As a result, Germany's progress was so rapid that it became known as the "German Economic Miracle."
Gold is forever - just store it! By Adam - CommodityOnline.com Although the U.S. economy and the dollar remain on shaky ground, many analysts are predicting that one thing will remain strong during 2010, the price of gold. The strong price of gold can help consumers weather the current economic downturn in two ways. For investors looking to store their wealth, gold provides an attractive alternative to the stock market or real estate. And for consumers and small businesses seeking quick cash to pay off outstanding bills, now is an excellent time to be selling your scrap gold, outdated gold jewelry, or other gold assets.
Ride Wall Street's "Great Global Commodities Grab" BY WILLIAM PATALON III, Executive Editor, Money Morning . . . . Banks are now also taking physical delivery of the gold they control through certain futures contracts, instead of settling the contracts in cash at maturity. JPMorgan and Goldman Sachs Group Inc. - two of the real heavyweights in this realm - have recently purchased metals-warehousing businesses. To make these transactions, the two banks spent a combined $2.2 billion-plus, so you know they're taking this whole physical-commodities strategy very seriously - as well as to an entirely new, and unprecedented, level. . . . Globally speaking, banks realize that we're in long-term - secular - bull market for natural resources. And they understand that the end of this "bull run" is nowhere in sight. These big banks have more than $4 trillion riding on commodities, so they're making sure that this trade goes their way. How better to influence the price of a commodity than to control its supply - or at least enough of it to have a measurable impact? That's why they're taking steps to gain physical control.
Investors flock to silver now LONDON (Commodity Online): Popularity of commodity investment websites and increased awareness among investors have come to the rescue of silver in 2010 with the metal winning the hearts of many top level investors in the recent past. Till now, considered as a metal which always plays second fiddle to gold, silver has come of age now as far as investment is concerned. In a recent analysis, it has emerged that more and more investors are reading about the investment options on websites and they take decisions on investments after considering expert opinions. This has helped a big way silver, which is a favourite for market experts as of now. In 2010, almost all commodity websites and market analysts had advised people to put their money in silver as the metal prices are set to soar in the coming days.
Control Frauds HyperInflate and Extend Bubbles Maximizing Damage - A Control Fraud at Work in the Silver Market Short Positions? JESSE'S CAFÉ AMÉRICAIN Here is a working paper by William K. Black about 'control frauds' and how they relate to the most recent credit crisis in the United States, a breakdown of stewardship that has placed the rest of the world's financial sector at risk as well. Control frauds are by their very nature conspiratorial in that they involve the suborning of regulators, ratings agencies, exchanges, the media, and legislators to ignore and facilitate misrepresentation that enable white collar crime. They are difficult to prosecute because by their nature they involve twisting the legal into the extra-legal on a broad basis to achieve a particular financial effect, while limiting many specific aspects to the letter of the law, or at least the gray areas.
IMF's Lipsky Discusses Greece's Debt Crisis, Aid Package
A Realistic View of Goldman Sachs and Their Lastest Quarterly Results By: Reggie Middleton - SafeHaven.com I'm about to go over Goldman Sach's 1st quarter 2010 results, but before I do, let's recap the last quarter's price movement and the consequences of believing in infallible name brands. This is basically a continuation of the rant - So, How Many Banks and Analysts Were Bearish On Goldman Before Today? and Is the Threat to the Banks Over? Implied Volatility Says So. Some may ask why I'm being so generous in regards to the extent of this quarter's earning review. Well... A European institutional subscriber recently stated he was able to get the same content found in my offerings from his investment bank research. Whaaatt!!! I told him that he probably wasn't reading the subscriber content. He wrote back stating that that wasn't the case. He also said that he doesn't see any fundamental analysis in the work. I nearly fell out of my chair. Hmmmm.
Goldman CEO says firm didn't bet against clients Lloyd Blankfein says in remarks prepared for his Congressional testimony on Tuesday that the company can't survive without its clients' trust. (AP) - Goldman Sachs Group Inc.'s chief executive says in prepared remarks to Congress that the firm didn't bet against its clients and can't survive without their trust. CEO Lloyd Blankfein and several other executives will testify Tuesday to the Senate Permanent Subcommittee on Investigations. Earlier this month, the Securities and Exchange Commission filed a civil fraud case against Goldman, saying it misled investors about securities tied to home loans.
Goldman Sachs: 7 power players CNNMoney.com Lloyd Blankfein, Fabrice Tourre and 5 other Goldman Sachs managers are appearing on Capitol Hill Tuesday to defend the company's mortgage market moves.
Lloyd Blankfein, Chief Executive Officer and Chairman - "It was one of the worst days in my professional life."
Fabrice Tourre, Executive Director, Structured Products Group
David Viniar, Chief Financial Officer
Craig Broderick, Chief Risk Officer
Dan Sparks, Former Managing Director and Head of the Mortgage Department
Josh Birnbaum, Former Managing Director, Mortgage Department
Michael Swenson, Managing Director, Mortgage Department
Goldman's fall, part of the plan Goldman culture crash By David Weidner, MarketWatch From white shoes to the 'Fabulous Fab' tap dance NEW YORK (MarketWatch) -- More than anything else, the Securities and Exchange Commission's fraud case against Goldman Sachs Group Inc. has illustrated the fall of the firm from Wall Street's preeminent bank to riverboat casino. The case is the final indictment in long decline for the brokerage. Some of the wounds have been self-inflicted, others by outside forces. The upshot is that during the last decade, Goldman has transformed from a client-oriented firm to a bona fide hedge fund. For a while, it was one of the best. But now, as the SEC case shows, it's as sloppy and imperfect as any on Wall Street.
Industrial Wind and the Wall Street Cap and Trade Fraud, Part 2: Cap and Trade blowback By James Hall on (Apr 27, 10) CapitolHillCoffeeHouse.com What is the primary reason that Wall Street wants to finance, maintain huge equity interests and underwrite industrial wind development? Cap and Trade is the hidden motive behind this defective alternative energy technology and wind turbine development. The environment and the economy will suffer incalculable greater harm.
Wall St. reform plan is 'weak'
Spitzer & Black: Questions from the Goldman Scandal by Eliot Spitzer and William Black - NewDeal2.0 Spitzer and Black argue that the Goldman revelations underscore the need for serious financial reform. For those who have spent years investigating fraud, it was no surprise to hear that Goldman Sachs, the (self-described) jewel of Wall Street, is the latest firm to emerge from the financial crisis with tarnished reputation. According to a lawsuit brought by the Securities and Exchange Commission, Goldman misrepresented to its customers the quality of the toxic assets underlying a complex financial derivative known as a “synthetic collateralized debt obligation (CDO).” As you may now have heard, the story involves a pair of Paulsons. As CEO of Goldman, Hank Paulson oversaw the buying of large amounts of CDOs backed by largely fraudulent “liar’s loans.” When he became U.S. Treasury Secretary, he went on to launch a successful war against securities and banking regulation. Hank Paulson’s successors at Goldman saw the writing on the wall and began to “short” CDOs
Market Manipulation, Systemic Risk and Fraud, Pure and Simple, And It Continues Today JESSE'S CAFÉ AMÉRICAIN This article by the Financial Times should remove any doubt in anyone's mind that Goldman Sachs was willfully selling fraudulent financial instruments. It appears that they were working in conjunction with Ratings Agencies, Mortgage Origination Firms, and Hedge Funds to cheat investors. "Cheat" means to circumvent or distort the normal price discovery process through misrepresentation, price manipulation, and omissions and distortion of key data.
Obama Launches His Fiscal Commission By Susan Jones, Senior Editor Republicans Call It A Front for Tax Hikes (CNSNews.com) - As President Obama formally launched his deficit-reduction task force on Tuesday, Republican leaders said it will simply provide Democrats with the cover they need to raise taxes. The bipartisan National Commission on Fiscal Responsibility and Reform is co-chaired by former White House Chief of Staff Erskine Bowles, a Democrat, and former Republican Senate Whip Alan Simpson. The panel is examining ways to cut costs and boost revenues to produce a maximum deficit of $550 billion by 2015, an amount equal to about 3 percent of the total U.S. economy. That would require deficit savings of at least $250 billion, the Associated Press reported.
NY tops nation in mortgage fraud By James Comtois - CrainsNewYork.com Metro area's rise to the top of the pile came amid a surge in such cases last year; 12% of all cases in the U.S. came from the metro area in 2009. New York City has earned the dubious distinction of the nation's leader for mortgage fraud in 2009, according to a report released Monday by LexisNexis Mortgage Asset Research Institute. MARI's 12th Periodic Mortgage Fraud Case Report reveals that of the 67,190 Suspicious Activity Reports filed with the Financial Crimes Enforcement Network in 2009, 12% were filed from the New York metro area. New York's rise to the top of the pile came amid a surge in such cases last year. "The data suggests that in 2009 there was a 7% increase in the number of incidents of fraud reported, on top of the 26% increase reported in 2008," said Jennifer Butts, MARI manager of data processing and report co-author. "While this is a noticeable increase, we believe that mortgage fraud is significantly understated."
Denver home prices up for 4th straight month DENVER BUSINESS JOURNAL - BY Mark Harden For the fourth month in a row, home prices in the Denver area showed a year-over-year increase in February in the latest S&P/Case-Shiller Home Prices Index, despite a month-over-month decline. The closely-watched report from Standard & Poor's showed metro-Denver home prices rising 3.6 percent between February 2009 and February 2010. Out of 20 U.S. cities in the Case-Shiller report, released Tuesday, Denver was one of nine that showed a year-over-year increase in prices. The 3.6 percent rise was Denver's largest year-over-year increase of the last four months. Denver prices climbed 2.6 percent in January from a year earlier, 1.2 percent in December 2009 and 0.5 percent in November 2009.
Colorado long-term care costs 12% higher than U.S. DENVER BUSINESS JOURNAL Costs for long-term care for the elderly and others in Colorado are 11.7 percent higher than the median cost nationwide, according to the latest annual survey from Genworth Financial Inc. Genworth -- which sells long-term care insurance and other financial products -- said its "2010 Cost of Care Survey" shows that the median annual cost for home care and other forms of long-term care in Colorado is $48,574, versus a national median of $43,472. It said Colorado ranks as the 13th most-expensive state for long-term care. The survey indicates that home-care costs in Colorado have risen roughly 2 percent each year over the last five years. It said median fees for licensed home health aide services in the Denver-Aurora area are $21 an hour, versus a U.S. median of $19.
Security Threat in NYC MTA subway? MIKE JACCARINO, PETE DONOHUE - NYDailyNews.com Get magic keys that open the gates at 468 subway stations for only $27 This is the key to the city, and it cost only $27. The key unlocks swing gates next to every subway turnstile, granting easy - and free - access to all platforms and trains. And while these universal keys should only be in the hands of authorized transit workers or police and fire officials, copies have fallen into the hands of some regular New Yorkers - and they are taking the MTA for a ride. "I've been saving a lot of money. There are 468 stations in the city and you can use it at any one of them," said a Brooklyn man who says he obtained a key from a transit worker for $27, the same price as a one-week unlimited MetroCard.
The Coming Tsunami By John LeBoutillier - CapitolHillCoffeeHouse.com The new Pew Poll, which has found that a stunning 80% of the American people now distrust the government, is a window into a long-building political trend: the voters this November are furious at everybody but especially at the Democratic leadership of Obama/Pelosi/Reid. Thus, the inevitable outcome in the mid-term elections is going to be a historic thrashing of the "in" party - the Democrats. They are going to lose dozens of seats in the House - perhaps enough to lose control - and maybe 5-8 seats in the Senate, too. (Make no mistake: the American people are ticked off at the GOP, too. But the Democrats are in power so they will feel more of the wrath. But in primaries like Florida and Arizona, GOP media establishment faves like Charlie Crist and John McCain may lose to this same anti-establishment anger.)
Old RNC vs. New GOP -- Upholding the Constitution By JB Williams on (Apr 27, 10) - CapitolHillCoffeeHouse.com The battle lines for the future of America's conservative party have been drawn, though not all that clearly yet. It is the old RNC and their loyal guard, against the new GOP made up of constitutionally conservative activists across the country, currently moving into power precinct-by-precinct via operations like National Precinct Alliance (NPA).
Tea Party hoping to steer Republicans further to the right BY JOE HALLETT - Columbus Dispatch.com A deeply involved Republican from northwestern Ohio called last week with a tip: The Tea Party is trying to take over the Ohio Republican Party Central Committee and, if successful, will oust state party Chairman Kevin DeWine. If she's right and that happens, the Ohio GOP will die. The primary job of a party chairman is to raise the millions needed to pay rent, utilities and staff, support candidates and win elections. Since 1988, when Robert T. Bennett began his 20-year reign as chairman, the Ohio GOP has been enormously successful in fundraising and winning.
Arizona Gov. Jan Brewer signs immigration law 124 years after great-grandmother's journey MICHAEL DALY - NYDailyNews.com When she came here as an Arizona delegate to the 2004 Republican National Convention, Jan Brewer seemed as sunny as her home state. "Just fantastic," she exclaimed about New York. "So many things to see!" Things like the Statue of Liberty, which had just reopened after being closed after 9/11. The monument was dedicated in 1886, which public records suggest was the very year Brewer's great-grandmother arrived in New York from England.
Aztlan Rising
AZTLAN Charles Truxillo, Professor, University of New Mexico "Native-born American Hispanics feel like strangers in their own land." Under the euphuism 'Hispanic Homeland' and 'Nation of Aztlan,' activists from numerous organizations including Mexican American Legal Defense and La Raza (The Race) activists are attempting to annex large portions of SW United States to Mexico. "Republica del Norte," the Republic of the North, which would include the present U.S. states of California, Arizona, New Mexico, Texas, plus southern Colorado, along with several current Mexican states, is "an inevitability" says Charles Truxillo, professor, University of New Mexico. He further states the new "Hispanic Homeland" should be brought into being "by any means necessary." The Mexican-American Legal Defense and Education Fund (MALDEF), the National Council of La Raza (NCLR), Movimiento Estudiantil Chicano de Aztlan (MEChA), and the National Immigration Forum (NIF) whose names imply grassroots organizations reflecting the will of American Hispanics, do not represent mainstream American Hispanic opinion. Rather, they speak only in their own best interests, favoring the mass immigration that gives them more constituents they can then profess to represent. Polls show that Hispanic-Americans, like all Americans, support stronger enforcement of our immigration laws.
The Mexican Invasion of America has Started!!!
What about Voter Intimidation by Black Panthers, Mr. President? By John Lillpop on - CapitolHillCoffeeHouse.com With each passing day, it appears as though President Barack Obama is on a mission to divide America along racial and economic lines. The administration seems bent on legislating one set of rules and perks for people of color, including anemic whites, and a package of higher taxes, restricted freedoms, and government scrutiny for Caucasians. Is this not race-based fascism at its evil worse? Evidence of this evil CHANGE is abundant in the president's reaction to Arizona's SB 1070, the law that deals with illegal aliens. The law made necessary because of President Obama's refusal to uphold the rule of law and enforce U.S. borders.
Immigration fix: Political science fiction by Mark Silva - SwampPolitics.com "We don't have 12 million pairs of handcuffs in this country,'' Sen. John McCain of Arizona once said, during a debate over immigration reform that ultimately collapsed in the Senate in the summer of 2007. The Arizona Republican, the late Democratic Sen. Edward M. Kennedy of Massachusetts and others were sponsoring a bipartisan effort to fix the nation's broken borders, institute a new guest-worker program and offer a path toward citizenship for an estimated 12 million immigrants living illegally in the United States.
La Raza and Jews on Collision Course in Alta California There are now significant signs of an impending collision between La Raza and Jews in California. The signs were first manifested during the state's 1998 election primary when a Mexicano defeated the Jewish candidate Richard Katz in the state's 20th Senate District and when the wealthy Jew, Ron Unz, was successful in having an anti-bilingual education initiative approved by the state's electorate. The battle lines between Mexicanos and Jews in California have been drawn and they have been drawn most clearly in the City of Los Angeles. La Raza's battle for the 20th Senate District is a perfect example of how the Jews will fight tooth and nail to maintain their dominance in state government. The victorious battle by La Raza in the 20th S.D., which is located in the middle of the San Fernando Valley in Los Angeles, was only a small skirmish of a larger battle that is about to occur as we seek more equitable proportional representation in state and local governments.
Aztlan Underground "Nazio Ibiltaria Naiz"
Mexico will cause the collapse of America !!!!
Persistent Unemployment Looms As Political Pitfall for Obama, Other Democrats By Julie Pace, Associated Press Washington (AP) - Even as he touts his efforts to put more Americans to work, President Barack Obama faces a public increasingly skeptical of his ability to bring jobs back to Main Street. During stops in Iowa, Illinois and Missouri, Obama will try to convince voters that his economic policies are working, despite an unemployment rate that's expected to remain at painfully high levels for months if not years.
Health Care Law Not Working As Advertised for Some Families By Ricardo Alonso-Zaldivar, Associated Press Some families will face wait to cover young adults Washington (AP) - President Barack Obama's health care overhaul was supposed to take care of a major worry for parents of 20-year-olds making the transition to work: keeping the kids insured. But what sounds like a simple solution -- starting this year, letting young adults stay on their parents' health plan until they turn 26 -- involves a surprising amount of fine print. As a consequence, some families may have to wait until 2011 to get their kids covered, particularly if the parents are working for a large employer, benefits experts and government officials say.
Nearly 4 million to pay health insurance penalty by 2016 By Associated Press WASHINGTON -- Nearly 4 million Americans -- the vast majority of them middle class -- will have to pay the new penalty for not getting health insurance when President Barack Obama's health care overhaul law kicks in, according to congressional estimates released Thursday. The penalties will average a little more than $1,000 apiece in 2016, the Congressional Budget Office said in a report. Most of the people paying the fine will be middle class. Obama pledged in 2008 not to raise taxes on individuals making less than $200,000 a year and couples making less than $250,000.
The New Secessionists By Chris Hedges - Truthdig.com Acts of rebellion which promote moral and political change must be nonviolent. And one of the most potent nonviolent alternatives in the country, which defies the corporate state and calls for an end to imperial wars, is the secessionist movement bubbling up in some two dozen states including Vermont, Texas, Alaska and Hawaii. These movements do not always embrace liberal values. Most of the groups in the South champion a "neo-Confederacy" and are often exclusively male and white. Secessionists, who call for statewide referendums to secede, do not advocate the use of force. It is unclear, however, if some will turn to force if the federal structure ever denies them independence.
Feds may set Gulf oil slick ablaze By Steve Hargreaves NEW YORK (CNNMoney.com) -- Coast Guard officials are considering setting the Gulf of Mexico oil slick on fire as it moved Tuesday to within 20 miles of sensitive ecological areas in the Mississippi River Delta. Officials say it could become one of worst spills in U.S. history. Oil is still leaking at a rate of about 42,000 gallons a day from the well, located some 50 miles off the coast of Louisiana beneath a drill rig that exploded and sank last week. Eleven workers are still missing following the incident, and are presumed dead.
X-37B: Secret plane launched
U.S. Prepares Non-Nuclear "Doomsday" Weapon Pravda.ru In a recent interview with the newspaper The New York Times, the U.S. president, Barack Obama revealed that his administration gave the green light for the study and development of a new kind of concept of a military attack without the use of nuclear weapons, but with the same destructive power. This concept is called Prompt Global Strike, a system of attack with missiles and "conventional" weapons that can reach any point on earth within an hour. Political and financial support to the project is not lacking. Robert Gates, Secretary of Defense, told the U.S. broadcaster ABC that the administration has embraced the Prompt Global Strike. This includes the $250 million that Obama has asked from Congress in order to explore this alternative, which combines a military and aerospace technology edge. John McCain, Republican presidential candidate in 2008, has also expressed his support for a program that is both "expensive as essential."
Re-Election of Sudan's President Underscores Limits of International Court By Patrick Goodenough, International Editor (CNSNews.com) - Sudanese President Omar al-Bashir, the first sitting leader to be indicted for war crimes by an international court, has now become the first leader in that position to win re-election. In a result that underlined the inability of the International Criminal Court to enforce its decisions, Bashir of the ruling National Congress Party (NCP) was declared winner Monday with 68 percent of the vote. Bashir has ruled Sudan since leading a military coup in 1989.
Eyjafjallajokull's Economic Impact Goes Beyond Flight Delays BY JON D. MARKMAN, Contributing Writer, Money Morning I've been looking for an excuse to get the name Eyjafjallajokull into an article, and now I finally have something special to say about the mighty Icelandic volcano that has wreaked havoc with European air traffic. It's mostly science and history, which appeals to my finely honed annotation instinct, but there is most definitely an investment point, which you will have to wait to the end to see. First, I learned today from some hedge-fund sources that scientists believe the real threat from the relatively small Eyjafjallajokull volcano is that it could trigger an eruption in its much larger neighbor, which is called Katla. I was told there's a better than even chance that this would happen.
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“Potential for financial system crisis is still feared”
“Greece has continuing economic problems”
“The Federal government is considering Value-Added-Tax”
“California fighting off bankruptcy”
“Federal government bureaucracy growing fast”
“Unemployment is persistent difficulty for economy” (…and so on)
These seem to be all disjointed headlines. A patch of problems here…a crisis over there…and some difficulty over here. Worry and concern seem to be everywhere and for good reason. Prosperity seems as unreachable as the stars. What will hopefully dawn on people is that there is a common thread throughout all this upheaval. It is really the epic economic battle of “Freedom vs. Statism”.
Let no Incumbent Survive (the next Three Elections) by Mike Endres - FinancialSense.com Fact: There is no difference between the Republican and Democratic political parties. Both are concerned only with maintaining power in the Presidency and Congress and over the American citizen and will do whatever it takes to buy, bribe or force within and outside the law to accomplish this goal. Fact: The appointed and supposedly independent "regulators" appointed by President Obama (and those before him) are a farce on the very face of it. They do not regulate or act as watchdogs for the public but instead act in every way to enable the Military/Industrial complex, banks and power brokers to cheat, lie, misuse taxpayer funds for personal gain and generally rip us all off with complete impunity (Goldman Sachs not withstanding). They do not enforce laws that are on the books now, much less provide inputs to a currently useless and corrupt Congress on how to to protect the taxpayer or figure more ways to eliminate waste and fraud in order to release more funds to the private sector to truly create jobs and new industries and technology.
George Soros and the next financial crisis by Clif Droke - FinancialSense.com Speculation has been rife in the financial press lately about the possibility of another financial market meltdown. It seems that investors are waiting for the proverbial “other shoe” to drop as worries continue to mount over the sustainability of the financial market recovery that began over one year ago. Even the president of the United States has jumped on the fear bandwagon. On Thursday, President Obama was stumping in New York as he attempts to win favor for his proposed financial overhaul legislation. Playing the fear card, Obama said it was “essential that we learn the lessons of this crisis, so we don’t doom ourselves to repeat it. And make no mistake; that is exactly what will happen if we allow this moment to pass.”
Ron Paul: They're Warmongering Like It's 2002!
Gold could hit $1,600/oz but silver, pgms will likely outperform Author: Dorothy Kosich - Mineweb.co.za RENO, NV - Under the right circumstances, BMO Capital Markets' Bart Melek says gold could rally as high as $1,600 per ounce by 2011. In analysis published Thursday, Melek said, "Silver, platinum and palladium are expected to outperform gold, benefiting from their quasi-money properties and high use in industrial applications." "Gold is projected to strengthen modestly, buoyed by long-term inflation concerns, sovereign debt, the U.S. dollar, fiat currencies generally and the expectation that the Fed will not raise rates aggressively," he said.
Gold survives Goldman Sachs By Peter Brimelow, MarketWatch Radical gold bugs jubilant, if jaundiced NEW YORK (MarketWatch) -- Gold rebounds, and the gold bugs are gathering. When I last wrote about gold, it was after what I called "freaky Friday" -- the steep, chart-disrupting price slump in gold triggered by heavy selling following the Goldman Sachs litigation announcement. About the only element in the gold-watching crowd not aghast was the hard-bitten group I call the "radical gold bugs," mustered around Bill Murphy's LeMetropolecafe Web site. They were comforted (as so often) by their confidence in Indian buying. And they were even morbidly cheered (they're funny that way) by what they regarded as further proof of their defining belief: that the gold market is often manipulated by public and private interests.
Gold futures inch up after seesaw session By Claudia Assis & Kate Gibson, MarketWatch Rising dollar takes toll on metal; platinum sets 20-month high -- SAN FRANCISCO (MarketWatch) -- Gold futures edged higher Monday as concerns about Greece's aid package and euro-zone countries provided a floor for prices, but a stronger dollar capped bigger gains. Gold futures for June delivery, the most active contract, gained 30 cents, or 0.03%, to settle at $1,154 an ounce on the Comex division of the New York Mercantile Exchange. It earlier hit an intraday low of $1,151.10 an ounce and an intraday high of $1,160.70 an ounce. Other metals tracked gold's moderate gains, with platinum setting a 20-month high for a most-active contract.
Venezuela's Hugo Chavez threatens to nationalize gold mining Author: Dorothy Kosich - Mineweb.co.za -- "We cannot allow national and transnational mafias to continue destroying our homeland," the Venezuelan President said during his regular Sunday broadcast RENO, NV - After seizing the Las Brisas gold project from Gold Reserve and denying appeals for final approval of Crystallex's Las Cristinas gold mine, Venezuelan President Hugo Chavez has now threatened to nationalize gold mining concessions. During his regular Sunday broadcast, Chavez said, "If we are going to exploit our gold reserves we will have to nationalize the lost, recover and put an end to the degenerative (system of) concessions...they have only served to deplete the rainforests, the mines, water supplies and the environment."
Climbing The Wall of Worry by Warren Bevan - FinancialSense.com While things are incredibly bullish everywhere you look, including the precious metals, options expiry is Tuesday April 27, so be aware gold and silver could see some consolidation until that passes. The general markets continue to power higher in the classic “wall of worry” fashion. I worry every day about holding positions overnight, but they almost always seem to continue higher the following day. We are nearing a top, but until then I am surfing that wave higher, nervously.
The Fall of the Euro By Howard S. Katz - GoldSeek.com Many a weekend since the beginning of the year has been occupied by a “crisis” in the euro. But this weekend’s “crisis” seems to be the mother of them all. As such, it will probably put an end to them, and the gold market will pull out of its funk and resume its bull trend. The euro is based on the West German deutschmark. In 1957, Konrad Adenauer instituted the Bundesbank and started Germany on a path of very limited issues of money. Like all other countries of the time the Bundesbank issued paper money. However, it issued it far more conservatively than any other central bank. As a result, Germany’s progress was so rapid that it became known as the “German Economic Miracle.”
On the Brink of an Asset Explosion, II by Toby Connor - FinancialSense.com Let me start off by saying the market should be correcting. Sentiment has reached ridiculous bullish extremes, the kind of extremes that led to the January /February correction. That correction separated the second leg of the bull from the third. But let’s face it, sentiment has been in this condition for several weeks now and the best we could muster was a minor correction of 30 points on the news the SEC was filing charges against Goldman Sachs for fraud.
Bureaucracy Backfire By: CAPTAINHOOK - GoldSeek.com As with Rome, that became the globally unchallenged center of power and finance in its time, so to is the American Empire visibly rotting from inside now as well, which will be its undoing. The elitists steer the bureaucracy to do their bidding in an effort to increase the power of the machine, and this can go on for some time, which it has. However again, as with all such fascist like episodes in history, the bureaucracy grow past sustainable mass and eventually must feed on itself, playing the blame game in an attempt to maintain a semblance of credibility with the public they intend to keep raping. That’s what the financial crisis hearings are suppose to do. They are suppose to make an increasingly besieged and weary public feel better about continued gang rape by the bureaucracy via increasing taxes, loss of liberties, and confiscation of wealth.
U.S. Finally Starts Dumping Citigroup -- Smart Move, Tim Geithner! by Henry Blodget - Tech ticker After years of bailouts, outrage, and disappointment at the hands of Wall Street behemoth Citigroup (C), the US taxpayer is finally catching a break. The Treasury is unloading the first batch of the 7.7 billion Citigroup shares that taxpayers acquired in the course of bailing the firm out at least three times during the financial crisis--and, on these shares, anyway, taxpayers are actually making a profit.
Republicans block bank-reform bill By Ronald D. Orol, MarketWatch Democrats fail to overcome filibuster, may try again on Wednesday WASHINGTON (MarketWatch) - The Democrats' efforts to change how the nation's banks are regulated received a major setback Monday after Republicans voted unanimously to block the bill from coming up for debate by the full Senate. "We're not going to be rushed based on assurances from the other side," said Senate Minority Leader Mitch McConnell, R-Ky., shortly before the vote.
4 tough questions for Goldman Sachs By David Ellis NEW YORK (CNNMoney.com) -- Goldman Sachs' moment of public flogging is here. On Tuesday, top representatives from Wall Street's most powerful firm will appear on Capitol Hill, where they are expected to endure a harsh line of questioning from lawmakers about their role in helping bring about the financial crisis. Much of the focus however will likely center on the complicated mortgage investment Goldman (GS, Fortune 500) sold that is now the subject of a civil fraud suit brought against the firm earlier this month by the Securities and Exchange Commission.
Goldman's "Fabulous" Fab's Conflicted Love Letters By Steve Eder and Karey Wutkowski - ABCNews.com NEW YORK/WASHINGTON (Reuters) - Fabrice Tourre and his girlfriend talked like a couple very much in love. They emailed back and forth about how they wanted to curl up in each other's arms and how they looked forward to tender moments together. Tourre, a Goldman Sachs bond trader, also wrote in the emails of the impending collapse of the subprime mortgage market and how he was masterminding ways at Goldman to make money from it. Little did they know that three years later these very personal emails written through Tourre's Goldman Sachs e-mail account would become part of one of the biggest investigations into the subsequent financial crisis. In the email exchanges between Tourre and his girlfriend, Marine Serres, Tourre comes off as a young, hotshot trader who foresaw the subprime meltdown while still selling shoddy subprime-backed products so prolifically he could peddle them to "widows and orphans."
Tourre emails show agony, ecstasy of being a banker By Alistair Barr, MarketWatch Goldman executive director wrestled with 'ethical questions' SAN FRANCISCO (MarketWatch) -- Fabrice Tourre comes across as an arrogant investment banker in the Securities and Exchange Commission lawsuit against him and his employer Goldman Sachs Group Inc. But personal emails released by Goldman this weekend show Tourre struggling with "ethical questions" as he sold complex mortgage-related securities that he worried were suspect. The SEC charged Goldman with securities fraud on April 16, alleging the investment bank didn't tell investors in a collateralized debt obligation that hedge fund firm Paulson & Co. helped structure the deal and was betting against it. Goldman and Paulson have denied wrongdoing.
Inner workings at Goldman revealed By Stephanie Kirchgaessner in Washington and Francesco Guerrera in New York - FT -- In their 16-month probe into Goldman Sachs, Senate investigators described on Monday how they frequently found the letters “LDL” in company e-mail correspondence. The letters were short for “Let’s Discuss Live”, and at that point, investigators said, the trail went cold. But even though Goldman had a habit of keeping sensitive discussions out of e-mails, some documents shed light on its inner workings. Among them are self-written career appraisals by former executives who will testify on Tuesday before a US Senate panel about its trading activities in the financial crisis.
"Completely Wicked": Martin Wolf and Simon Johnson on Goldman Fraud Case by Aaron Task - Tech Ticker -- John Paulson and top associate Paolo Pellegrini have broken their silence on the hedge fund's role in the Goldman fraud case. In a letter to investors, Paulson told clients the firm's role in the Abacus deal was "appropriate and conducted in good faith," The FT reports. Meanwhile, CNBC reports Pellegrini told the government he informed ACA Management that Paulson intended to short the Abacus portfolio at the heart of the SEC's fraud charge. If true, the testimony would undercut the SEC's claim that ACA was kept in the dark about Paulson's intentions.
Senate Panel Says Goldman Sachs 'Misled the Country,' Helped Create Housing Bubble By MATTHEW JAFFE - ABCNews.com Sen. Carl Levin: Goldman Sachs Helped Inject 'Toxins' Into Financial System Wall Street powerhouse Goldman Sachs helped create a housing bubble by selling securities backed by risky subprime mortgage loans and then profited off that bubble's bursting by secretly betting against the market, a Senate investigation has found. A day before a high-profile hearing featuring numerous Goldman Sachs officials, the Senate Permanent Subcommittee on Investigations released a flurry of excerpts from internal bank documents that the panel says show that the embattled firm misled the American public about its role in the build-up to the financial crisis in September 2008.
Goldman Emails Show Need for Transparency: Summers WASHINGTON (Reuters) - Emails sent by Goldman Sachs Group Inc's executives on money the firm made by betting against risky mortgage securities highlight the need for transparency in financial markets, senior White House adviser Lawrence Summers said on Sunday. Summers, on CBS's "Face the Nation," said he would not comment on specifics of a fraud suit against Goldman brought by the Securities and Exchange Commission.
Euro Falls on Concern Greece Aid Package Won’t Contain Crisis By Yasuhiko Seki and Ben Levisohn April 27 (Bloomberg) -- The euro dropped against the yen on concern the European Union-led 45 billion euro ($60 billion) aid package for Greece won’t stop the deficit crisis from spreading. Europe’s common currency traded near its lowest level since January versus the pound as German Chancellor Angela Merkel said she won’t release funds for Greece until the nation has a “sustainable” plan to reduce its shortfall. The dollar traded near its strongest level in almost three weeks versus the yen on speculation the Federal Reserve is moving closer to withdrawing stimulus as the U.S. economic recovery gathers momentum.
Greece in limbo will keep markets volatile DANIEL BASES AND VIVIANNE RODRIGUES - Mail & Guardian Until investors have a clear idea of exactly how much money Greece will receive from the European Union and the IMF -- and when -- uncertainty stemming from the Hellenic Republic's growing fiscal despair will weigh on global markets. For Greece, the situation is critical as the cost of insuring its debt against default jumps from record to record, and the cost of raising capital to pay off old debts and run the country has spiraled out of control.
Rogoff Says Greece May Not Be Europe’s Last Bailout By Simon Kennedy April 26 (Bloomberg) -- Greece is unlikely to be the last euro nation to need an International Monetary Fund bailout, with Ireland, Spain and Portugal “conspicuously vulnerable,” said Harvard Professor Kenneth Rogoff. “It’s more likely than not that we’ll need an IMF program in at least one more country in the euro area over the next two to three years,” Rogoff, a former IMF chief economist who has co-authored studies of financial and sovereign debt crises, said in a telephone interview. “The budget cuts needed in Europe in many countries are profound.”
Greek bonds plunge again By David Oakley in London, Quentin Peel in Berlin and Kerin Hope in Athens - FT.com -- Greek bond markets plunged on Monday amid growing worries among investors that the country will need to restructure its debts in spite of a proposed €45bn ($60bn) assistance package from the international community. The yield on two-year Greek government bonds, which has an inverse relationship with price, jumped 3 percentage points – the biggest one-day rise since the country joined the euro nine years ago – to close at 13.522 per cent.
G20 wary of overconfidence as Greece cast long shadow LOUISE EGAN AND FRANCESCA LANDINI - Mail & Guardian G20 finance leaders said on Friday they had secured a better-than-expected global economic recovery but were wary of overconfidence as Greece's debt crisis put the focus on worsening public finances. The Group of 20 rich and emerging countries failed to forge consensus on how best to recoup the cost of bailing out financial firms, whose risky bets sent the global economy into its worst tailspin since World War II.
Celente: Obama = Wall Street? Celente on corruption and gambling in finance
Top 10 mortgage fraud states By Les Christie - CNNNews.com NEW YORK (CNNMoney.com) -- Mortgage fraud is still on the rise, according to a report released Monday, despite efforts by law enforcement and policy makers to rein it in. Incidents of mortgage fraud perpetrated by industry professionals increased 7% in 2009, after jumping 26% the year before, said the Mortgage Asset Research Institute (MARI), a division of LexisNexis. The worst-hit states include Florida, California, Arizona, New York, New Jersey and Maryland. (See table at right).
Mortgage Fraud Incidents Rise 7 Pct Last Year By ADRIAN SAINZ AP - ABCNews.com Report finds fraud still a problem for mortgage industry; incidents rise 7 percent in 2009 Incidents of residential mortgage fraud increased last year, a sign that scammers are still targeting the industry despite more diligent efforts to find and report such activity. The number of mortgage fraud reports among loans made in 2009 grew 7 percent, a smaller increase than the 26 percent jump seen the previous year, according to a study released Monday by the LexisNexis Mortgage Asset Research Institute.
Buyers have no moral duty to lenders by Brent T. White Brent T. White Associate professor of law, UA - The Arizona Republic As a result of the housing collapse, many Arizonans have seen their homes lose half of their value. Many owe several hundred thousand dollars more than their homes are worth and are unlikely to dig out of their negative equity hole for decades. For these homeowners, the American dream has become a nightmare - and their financial future is dim. To compound the stress and anxiety, when they've called their lender to work out a solution, they've discovered that their lender won't even talk to them about a loan modification or a short sale as long as they are current on their mortgage.
Why it Would Take 9 Years to Clear the Current Housing Backlog By Rocky Vega - The DailyReckoning.com 04/26/10 Stockholm, Sweden – At this point there are so many bank-owned foreclosed homes that it would take almost nine years to clear out the housing inventory. That time frame doesn’t even begin to take into consideration the additional homes that are likely to also enter the backlog while the current inventory of foreclosed homes gets cleared out. According to The Wall Street Journal: “How much should we worry about a new leg down in the housing market? If the number of foreclosed homes piling up at banks is any indication, there’s ample reason for concern.
Sales-tax hike could weigh heavily on Cave Creek retailers by Beth Duckett - The Arizona Republic Faith Weinberg has conflicting views on a state sales-tax increase that, if passed, would bolster education but deliver a blow to local businesses. A Cave Creek business owner and parent,Weinberg said local businesses are balking at the 1-cent-per-dollar hike that would propel Cave Creek's sales tax to 10.3 cents per dollar, the highest in Maricopa County. But she will likely vote for it anyway. "It's intended to help the schools," said Weinberg, owner of Big Bronco store. "It's not just because I have a son in middle school, but it's the future of our children."
Fed May Keep Rates Low as Tight Credit Impedes Small Businesses By Steve Matthews and Vivien Lou Chen -- April 26 (Bloomberg) -- Michael Chapman, the owner of a building company with 20 employees in Santa Fe, New Mexico, has had trouble getting a bank loan and this month he let Kansas City Federal Reserve Bank President Thomas Hoenig know it. Tight credit in commercial real estate “has really made it impossible for banks to lend to people like me,” the president of Chapman Homes said during a question period after an April 7 speech by Hoenig. Chapman said his company, unable to get a loan to hire 15 workers while big Wall Street firms get record bailouts, is “too small to succeed.”
REIT American Mortgage files for bankruptcy NEW YORK, April 26 (Reuters) - Real estate investment trust American Mortgage Acceptance Co filed for Chapter 11 bankruptcy protection on Monday, blaming a sharp drop in property values. The company, which invests in multifamily and commercial property mortgage loans, said in court documents it had assets of about $6.4 million and liabilities of about $120 million, according to court documents. In 2007, the company had owned assets worth $666.4 million.
California to Refinance $2 Billion Power-Crisis Bonds Next Week By William Selway -- April 26 (Bloomberg) -- California is planning to sell $2 billion of bonds next week to refinance debt that raised money to purchase electricity for cash-strapped utilities during the state’s power crisis in 2001 and 2002. The California Department of Water Resources is scheduled to sell the securities on May 5, according to California Treasurer Bill Lockyer’s office. Tom Dresslar, a spokesman for Lockyer, said the securities will be offered first to small investors, with shorter maturities intended to capture the interest of that market.
Generation Y faces steep financial hurdles by Christine Dugas - USA Today They're called "Generation Y" — teens and twenty-somethings known stereotypically for their coddled upbringing, confidence, opinionated dialogue, free-spending habits and openness to change. Ultimately, however, the more than 50 million members may be best remembered for whether they can overcome the dire financial straits that plague many of them. Even before the recession, those in Generation Y — the latest products of a get-it-now, pay-for-it-later mind-set that has permeated the nation's economy — faced a range of financial pitfalls as they embraced expensive high-tech gadgets and added credit card debt onto student loans.
Sign of the times: Going swapping, not shopping By Olivia Barker, USA TODAY PHILADELPHIA — In a funky corner of this sprawling city, a sisterhood of a traveling black dress is forming. First, Dara Patrusky picked up the Ted Baker halter dress from a Buffalo Exchange thrift store (it still had the tags). Then she passed it on to her friend, Naomi Brownstein. Now, Brownstein has brought it here to the Bohema boutique, where Patrusky, in a twin nod to spring-cleaning season and Earth Day, is hosting her latest clothes swap and where Brownstein hopes the frock finds a new and grateful owner.
Younger adults to pay more for health insurance by Ken Alltucker - The Arizona Republic Health insurers: Rates likely to spike in 2014 Young adults likely will face sticker shock when mandatory health insurance becomes law. Health insurers say that health-insurance rates for young adults in Arizona likely will spike when mandatory coverage starts in four years. Under reform legislation passed last month by Congress, older adults cannot be charged more than three times as much as younger adults just based on age. Such restriction on "age-rating" likely means that younger, healthier adults will subsidize health insurance for older adults when mandatory coverage begins in 2014, health insurers say.
Insurers: Brace for fast and furious costs By Parija Kavilanz - CNNMoney.com NEW YORK (CNNMoney.com) -- As the insurance industry prepares to adjust to reform, two big players say mandated changes that kick in soon could push up premiums faster and greater than before. "The headline for everyone is that costs will be more. Cost will definitely go up," said Mark Bertolini, president of Aetna (AET, Fortune 500), which covers more than 19 million individuals under its plans. However, Bertolini declined to say specifically how much premiums would increase other than to say the biggest impact on them would happen in 2014 when the health law is fully implemented.
Here's the Beef: U.S. Cattle Prices Are Rising With the Economy By BRUCE KENNEDY - DailyFinance.com -- It's been quite a spring for Bill Gray. The former president of the Colorado Cattlemen's Association has been watching the price of beef rise throughout the winter, monitoring the changing prices, sometimes by the hour, on his computer in Ordway, near Pueblo. In August he sold 600-pound steer calves for November delivery at $1 a pound. But last week, comparable-size winter steers in his part of southern Colorado sold at $1.28 a pound. You'd think he'd be pleased to see such a sharp price increase for his product. "I would be very happy if it just stayed where it is," says Gray of the price of beef. "We've had such an upswing in the market since the first of the year. It's going to have to stop and take a breath."
Appeals Court Rules Walmart Sex Discrimination Case Can Go to Trial By EMILY FRIEDMAN - ABCNews.com -- Walmart Fears Suit Could Cost The Chain Billions A class action lawsuit representing more than 1 million women got the green light to proceed today against Walmart Stores Inc. Walmart claims the suit, which alleges the giant chain store discriminates against female employees, could cost it billions of dollars if it is upheld. The reputation of an iconic company is also on the line.
Both sides of immigration debate blame congressional inaction for Arizona law By Peter Slevin - Washington Post -- PHOENIX -- On the grounds of the capitol, in a state that only days earlier had adopted the nation's strictest anti-immigration law, the two sides of an angry debate are united on one thing: They blame Washington. Years of congressional inaction and paralysis on immigration created a vacuum that either forced the Arizona legislature to step in or allowed overzealous legislators to trump federal authority, depending on whom you ask.
Mexican officials condemn Arizona's tough new immigration law By William Booth - Washington Post -- MEXICO CITY -- President Felipe Calderón on Monday vigorously condemned a tough new immigration law in Arizona that requires police to question anyone who appears to be in the country illegally -- a measure Calderón said "opens the door to intolerance and hatred." Under the new law, signed by Arizona Gov. Jan Brewer (R) on Friday, legal immigrants will be required to carry documents proving their status. Police will question anyone they "reasonably suspect" of being undocumented, and illegal immigrants could be detained and handed over to federal authorities. The law takes effect in 90 days. Brewer said the costs of uncontrolled illegal immigration and the lack of enforcement by the federal government forced her state to act on its own.
New Arizona law forcing hard choices on migrants by Tim Gaynor (Reuters) - With Arizona's crackdown on illegal immigrants looming, Guatemalan Samuel Roldan is swapping the family's battered Chevy Suburban, which he feels marks them out as low-income migrants, for a smarter, more corporate-looking Nissan. "When you have an old car with stickers for a Spanish-language radio station ... it's only logical that they will think you are Hispanic and you don't have papers," Roldan said. Roldan is among an estimated 460,000 illegal immigrants in the Mexico border state carefully weighing their options on Monday, three days after Arizona Governor Jan Brewer signed the United States' toughest immigration measure into law.
Boycotts of Arizona immigration law add up By Roger Yu, USA TODAY Many officials in Arizona's tourism and hospitality industry fear that the state's new immigration law is anything but hospitable. Hotel owners, tour operators and convention executives say the law could discourage visitors and companies from meeting there at a time when one of the state's vital industries already is suffering. The law, signed by Gov. Jan Brewer last week, makes it a misdemeanor to not prove lawful U.S. residence when asked to provide such documentation. Already there are ramifications and threats:
Home Tax Credit Called Successful, but Costly By DAVID KOCIENIEWSKI - NYTimes.com Realtors, home buyers and sellers are rushing to complete sales agreements before the tax credit for home purchases expires this week. Home buyers must have a deal by April 30 and close by June 30 to qualify for the federal tax break, up to $8,000 for first-timers and $6,500 for those merely moving to a different residence. Though the Treasury Department and the real estate industry have termed the program a success, helping 1.8 million people buy homes, many tax policy experts say it has been singularly cost-ineffective: most of the $12.6 billion in credits through end of February was collected by people who would have bought homes anyway or who in some cases were not even eligible.
Cape Cod Project Is Crucial Step for U.S. Wind Industry By TOM ZELLER Jr. - NYTimes.com More than 800 giant wind turbines spin off the coasts of Denmark, Britain and seven other European countries, generating enough electricity from strong ocean breezes to power hundreds of thousands of homes. China’s first offshore wind farm, a 102-megawatt venture near Shanghai, goes online this month, with more in the pipeline. But despite a decade of efforts, not a single offshore turbine has been built in the United States. Experts say progress has been slowed by a variety of factors, including poor economics, an uncertain regulatory framework and local opposition.
Oil still leaking from sunken Gulf rig By Steve Hargreaves - CNNMoney.com NEW YORK (CNNMoney.com) -- The well beneath the oil rig that erupted in a deadly blast last week in the Gulf of Mexico is leaking oil at a rate of about 42,000 gallons a day, according to the U.S. Coast Guard. The spill has the potential to become significant if left unchecked, although it would take the better part of a year to rival the Exxon Valdez grounding, which discharged some 11 million gallons into Alaska's Price William Sound. The Coast Guard said it is preparing for the worst.
JORDAN: Israeli threat to expel Palestinians stokes old fears For many Jordanians, an Israeli ruling this month expanding the state's authority to arrest and deport people in the West Bank is more than an injustice foisted on the Palestinians of the West Bank -- it is also seen as a threat to Jordanian identity. Earlier this month, an Israeli military court amended an existing law to allow Israeli authorities to arrest, imprison or deport anyone in the West Bank lacking a recognized permit, leading rights groups to warn of the possibility of mass deportations of Palestinians.
U.N. pulls foreign workers out of Afghan city of Kandahar By Laura King LATimes.com Local staffers were also told to stay home. The decisions reflect the perilous state of security in Afghanistan’s second-largest city, where two civilians were killed in explosions Monday. Reporting from Kabul, Afghanistan Reflecting the sharply deteriorating security situation in Kandahar, Afghanistan's second-largest metropolis, the United Nations on Monday pulled foreign staff out of the city and instructed hundreds of local employees not to come to work. The move came on the same day as a series of explosions in the city killed two civilians.
Pakistanis Living on Brink, and Too Often in the Dark By SABRINA TAVERNISE - NYTimes.com LAHORE, Pakistan — The Taliban may be plotting bombings, and the economy is on the brink. But these days, the single biggest woe tormenting Pakistanis is as basic as an electric light bulb. Pakistan is in the throes of an energy crisis, with Pakistanis now enduring about 12 hours of power cuts a day, a grueling schedule that is melting ice, stopping fans and enraging an already exhausted populace just as the blast furnace of summer gets started
Military's Hypersonic Falcon Missile Test a Dud? FOXNews.com On the heels of last week's top-secret X37-B launch, the U.S. Air Force launched -- and ultimately crashed -- an experimental hypersonic glider theoretically capable of hitting Mach 20. It was a watershed week for conspiracy theorists, with President Barack Obama throwing his support behind several major upgrades to the country's rapid-response strike capability. On the heels of the top-secret X37-B launch, the U.S. Air Force launched an even more secret experimental hypersonic glider able to travel more than 4,000 miles in 30 minutes from launch. The craft -- dubbed the Falcon Hypersonic Technology Vehicle 2 -- was launched via a Minotaur 4-Lite rocket Thursday from Vandenberg Air Force Base, the Air Force announced.
Launch X-37B on Atlas V 501
X-37B Orbital Vehicle
USAF X-37 Orbital Test Vehicle Launch With Background
Pentagon planning for space bomber Documents show how X-plane could be used by military By Robert Windrem - NBC News producer Aug. 14, 2001 - An experimental NASA spacecraft could well be the harbinger for a small armada of billion-dollar space bombers - "space operations vehicles" that could be launched from a U.S. base and fire weapons at almost any target on Earth, all within 90 minutes of a presidential order. Last May 19, well out of the glare of the media spotlight, the stubby 22-foot-long unmanned spacecraft rolled to a stop at 6:17 a.m. on the hot, dry lakebed of NASA's Dryden Flight Research Center at Edwards Air Force Base in California.
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FDIC shuts down 4 more banks for a total of 54 failures this year By Stevenson Jacobs, Associated Press -- NEW YORK — Regulators shut down four banks in Illinois on Friday, putting the number of U.S. bank failures this year at 54. The Federal Deposit Insurance Corp. took over three banks in Chicago: New Century Bank, with $485.6 million in assets; Citizens Bank&Trust Company, with $77.3 million in assets; and Broadway Bank, with $1.2 billion in assets. The FDIC also closed Amcore Bank of Rockford, which had $3.8 billion in assets. MB Financial Bank agreed to acquire the deposits of both Broadway Bank and New Century Bank. Republic Bank of Chicago agreed to assume Citizens' deposits, while Chicago-based Harris National Association agreed to acquire Amcore Bank's deposits.
The Middle Class Game Is Up: Joe Bageant - SilverBearCafe.com We're Heading to a Slave Labor Planet Class solidarity was such a good idea. It really was. Obviously, most of the people who need solidarity are in the world's laboring classes. After all, the rich have more than enough solidarity already, as was recently demonstrated by their successful execution of the greatest global financial heist in history. Oh sure, we'll see some state sponsored mock show trials of a few of them - they always throw a few of their own out of the sleigh to the wolves during their escapes. The big heist was big news. Working Americans will be applying Preparation H to their keisters for a long time to come.
The outlook for the world economy Economist.com Curb your enthusiasm A welcome recovery-but an uneven one, with dangers both for sluggish Europe and bubbly emerging economies THERE is a whiff of exuberance around the world economy these days. Financial markets are buoyant, business confidence is rising and global growth seems increasingly robust. In its latest forecasts, released on April 21st, the IMF predicts that global output will grow by 4.2% this year on a purchasing-power basis, a full percentage point more than it foresaw six months ago. Other seers are even more optimistic, predicting growth of more than 4.5%-or close to the average pace of the boom years before the recession. The level of global output is now back to where it was before the downturn. And given the scale of the financial crisis, the recovery is surprisingly brisk. With global business investment accelerating and consumer spending strong, there is growing optimism that the recovery is becoming self-sustaining.
Frauds And Scandals Follow The Collapse Of The Financial System Bob Chapman - TheInternationalForecaster.com -- The collapse of the financial system is under way, a giant debt that will never be repaid, deliberate destruction of the economy, bailouts a part of the manipulation of the markets, More creative forms of destruction for the economy, Wall street a criminal enterprise, Goldman CEO visits the White House, often, another giant Ponzi in Florida... As the world faces an ongoing sovereign debt debacle we see an attempt to defuse an oncoming scandal involving Goldman Sachs, Paulson and perhaps others. The collapse of the fiat money system is underway and each day picks up momentum. The only question is how long it can survive? In the interim we are faced with inflation and perhaps hyperinflation as the privately owned Federal Reserve and other central banks add stimulus and money and credit into their financial systems.
Marxist Mosaic By Larry Wilke - CapitolHillCoffeeHouse.com Obama has “suggested” the idea of “a new value added tax” on the very same Americans who are being punished with hundreds of other taxes, fees and fines relative to the totalitarian TARPS, bogus bailouts and the health scare hokum. Obama “adviser” Paul Volker shilled the VAT idea for Obama elsewhere as one of the many Democratic deflection sessions, probably the one where Obama said that “whether we like it or not, we remain a dominant military superpower..”, was being used as the cover to sidetrack the nation’s attention from the novel idea of Obama wanting to grab another bag full of tax monies…
Mortgage-Backed Securities Return, but Are We Really Ready? By GIL RUDAWSKY - DailyFinance.com All roads from the real-estate meltdown lead to crumbled mortgage-backed securities. And after a three-year respite from these investments, the industry is starting to go down that path once again. The big question is whether financial institutions -- and investors -- have learned anything. What everyone is wondering is whether this move is a logical and positive outgrowth of a recovering industry. "Are we ready for this again?" asks Boston University economics professor Laurence Kotlikoff. "Absolutely not. We still don't have any checks or balances put into place to make sure we don't end up in the same situation."
Wall Street Deceit and Main Street Revulsion Szandor Blestman - SilverBearCafe.com I had the misfortune of listening to CNBC the other day while visiting my mother. The talking heads on the tube were discussing the surge in stock prices and the lifting of the DOW Industrials above the eleven thousand mark. They went on and on about how much of a psychological barrier the eleven thousand mark was and how that meant that the "recovery" wasn't just some fluke and everything was going to be hunky dory and rosy from now on. They then began asking the question when the "retailer investor" (that's you and me in Wall Street lingo) was going to get back into the market and really start cranking it up. They thought that all of us little, ordinary people with no money wouldn't want to miss the investment boat. All I remember thinking was "How stupid do these people think I am?" Indeed, how stupid do the Wall Street moguls think we are?
Reports of Our Recovery Are Greatly Exaggerated John Browne - SilverBearCafe.com From all outward appearances, it seems that a grim chapter in U.S. economic history has come to an end. Newsweek magazine declares that "America is Back," government statistics indicate revival, and our stock market has put in a rally for the record books (by rate of ascent, not highs - we are still more than 25% below the 2007 peak). And yet, despite massive federal stimuli and subsidies, American unemployment clings stubbornly to the 10 per cent level, with the "underemployment" rate closer to 20 per cent. The IMF does not appear to buy into Washington's optimism; it projects a "double dip" contraction by the second half of this year. With so much conflicting sentiment, it is difficult for investors to know whether the cup is half-empty or half-full.
'Gold price most likely to double' By John Dourekas Hong Kong (Kitco News) -- Gold will most likely double from its current $1150 an ounce during the course of the bull market, according to Puru Saxena, founder of Puru Saxena Wealth Management. In an exclusive interview with Kitco News, Saxena said one major factor in gold’s favor "is that central banks have now become net buyers of gold. So that reduces supply from the market,” said Saxena. Investment demand will appreciate over time as people become more dubious over currencies and they transfer assets into gold as a hedge, said the investment adviser from his Hong Kong office.
Gold bull run is not over: Marc Faber By John Dourekas - CommodityOnline.com Hong Kong (Kitco News) -- The rising price of gold is far from over since paper money will continue to lose value, according to Marc Faber, editor and publisher of The Gloom, Boom & Doom Report. “If you have $100 today, you buy that much less in terms of a basket of goods and services then you did ten years ago – paper money has already lost a lot of value and in my view it will continue to lose value. The price of gold will adjust on the upside according to the loss of the purchasing power of money,” Faber said in an exclusive interview with Kitco News.
Gold, Economic Recovery and George Soros on the Next Financial Crisis By: Clif Droke - MarketOracle.co.uk -- Speculation has been rife in the financial press lately about the possibility of another financial market meltdown. It seems that investors are waiting for the proverbial “other shoe” to drop as worries continue to mount over the sustainability of the financial market recovery that began over one year ago. Even the president of the United States has jumped on the fear bandwagon. On Thursday, President Obama was stumping in New York as he attempts to win favor for his proposed financial overhaul legislation. Playing the fear card, Obama said it was “essential that we learn the lessons of this crisis, so we don’t doom ourselves to repeat it. And make no mistake; that is exactly what will happen if we allow this moment to pass.”
Goldman, Gold, And U.S. Dollar's Influence on Precious Metals By: Przemyslaw Radomski - MarketOracle.co.uk -- When gold declined last Friday we were not caught by surprise and neither were our Subscribers. Based on our technical analysis, we gave you a heads up two weeks ago when we said that gold was ready for a decline before resuming its upward climb. But sometimes news can rattle the market, which is what happened Friday when gold hit an air pocket and dove $25 in a few minutes to move very close (or slightly below) the levels mentioned in our Friday update. While it is always the sell order (or rather a large amount of them) that causes a dramatic move, and one should not automatically assume that one single event is responsible for it (without giving it a second thought), in this case it seems that the immediate cause for the decline was news of the Securities and Exchange Commission’s (S.E.C.) civil fraud charges against Goldman Sachs.
When Gold Fundamentals Don’t Matter By: Kevin George - MarketOracle.co.uk One of the biggest talking points in the financial world is the direction of Gold. The internet is awash with predictions of price, mostly based on some combination of inflation, money-printing excesses and Chinese demand. Those who believe that gold is a one-way bet, are failing to account for the potential of an unseen event, such as the sub-prime fallout or the Lehman Brothers collapse and the effect they had on the financial markets. This despite the recent problems in Dubai and Greece, with many more debt-ridden countries close behind. The reflation of all risk assets created from the March 2009 low, is once again a serious risk to the markets and any unwind would likely be more severe than the 2008 collapse.
Will Gold be Bolstered by the Goldman Sachs Fraud Case? By: Julian DW Phillips - MarketOracle.co.uk Initially the gold price fell on the news of the S.E.C. civil fraud charge against Goldman Sachs in the belief that both they and Paulson’s hedge fund would have to sell their gold holdings. A reaction that was founded on uncontrolled emotions, you would rightly suppose. The reaction was very like gold market after the news that Greece is going to the EU & I.M.F. [because few believe that Greece will correct matters thereafter] for their bailout. The € fell as the Greek crisis impinged on the value of the €. The additional reaction in gold was based on the supposition that gold is tied to the €. Not a great deal of thought goes into these reactions, but if you can make money by inciting investors like this, why not? These reactions illustrate that emotion, alongside the Technical picture drive short-term prices, exclusively. Longer-term investors apply more thought to their investments than this. It is their view that needs to be looked at with depth if we are to understand just how the Goldman Sachs story could influence future gold and silver prices.
Gold "Crisis Protection" Proven as Eurozone's Greek Bail-Out Begins By: Adrian Ash - MarketOracle.co.uk -- THE PRICE OF GOLD retained a slight weekly gain as the close approached in London on Friday, trading above $1141 an ounce while the Euro bounced – and world stock markets rose – following Greece's formal request for a joint European and IMF bail-out. Gold priced in Euros spiked within 0.3% of April 9th's record, hitting €27,743 per kilo before easing back as the single currency rose. British investors looking to buy gold, the price held at £743 an ounce – 0.3% higher from last Friday's finish – after UK data showed the economy growing half-as-fast as analysts forecast between Jan. and March, adding just 0.2% year-on-year. Crude oil and broader commodities were little changed. "Greece is asking for the activation of the support mechanism," said a letter sent this morning by finance minister Papaconstantinou to the European Commission, fellow Eurozone states, and the European Central Bank. "The moment has come," Greek premier Papandreou told reporters, apparently catching the European Commission unawares.
The Rules of the Gold Standard Game By Bill Baker - The DailyReckoning.com 04/23/10 Baltimore, Maryland – The academic and investment community has intellectually bought into theories of interest rate manipulation based upon signals gleaned from the quicksand of near-term economic statistics. Although proven by the scientific methods of economics, somehow the chain of desired short-term outcomes generated through this central planning has a side effect of producing long waves of debt accumulation.
This is a Weak Case: Actually, no — its a very strong case. Based upon what is in the SEC complaint, parts of the case are a slam dunk. The claim Paulson & Co. were long $200 million dollars when they were actually short is a material misrepresentation — that’s Rule 10b-5, and its a no brainer. The rest is gravy.
Robert Khuzami is a bad ass, no-nonsense, thorough, award winning Prosecutor: This guy is the real deal — he busted terrorist rings, broke up the mob, took down security frauds. He is now the director of SEC enforcement. He is fearless, and was awarded the Attorney General’s Exceptional Service Award (1996), for “extraordinary courage and voluntary risk of life in performing an act resulting in direct benefits to the Department of Justice or the nation.”
Goldman's "Unsure" Defense: Is That the Best It Can Do? By PETER COHAN - DailyFinance.com The Washington Post got its hands on an 11 page memo that Goldman Sachs (GS) CEO Lloyd Blankfein will use in his Senate testimony in Washington on Apr. 27. I'm not sure that this testimony represents Goldman's best foot forward in its attempt to deflect the idea that it's not acting in its clients' best interests. But it could represent an interesting line of reasoning in Goldman's effort to defend itself against Securities and Exchange Commission charges that it committed fraud in marketing a collateralized debt obligation (CDO) called Abacus on which investors lost $1 billion.
Goldman Sachs readies forceful response against claims it misled clients By Zachary A. Goldfarb - Washington Post -- Goldman Sachs is preparing its most detailed defense yet to allegations that it misled clients in its mortgage securities business, arguing that the firm was unsure whether housing prices would rise or fall and did not take any action at odds with the interests of its clients. An internal Goldman document, prepared for senior executives and obtained by The Washington Post, addresses the criticism that the bank invested its own money betting against the housing market while simultaneously urging clients to invest in securities that would increase in value only if the housing market did.
Goldman-deal gamblers knew the score By Bill Fleckenstein - MSN Money The players on both sides of the trade that the SEC has targeted knew the risks and knew one side was bound to lose. It's far from the worst sin of this mess. Goldman Sachs. John Paulson. Those are hot-button words that have dominated business news lately, with many of the reports biased toward a black-and-white supposition: guilty. This column, however, wouldn't live up to its name if it didn't take a contrarian view. Not surprisingly, I'm going to discuss the Goldman/Paulson flap from a slightly different perspective. What I believe may have happened -- at worst -- is that Paulson, a hedge fund manager, identified various bits of mortgage flotsam he wanted to short, betting they would go down. Then he might've gone to Goldman Sachs (GS, news, msgs) and asked something like, "Hey, would you put a basket of this stuff together?"
E-mails: Goldman Boasted as Meltdown Unfolded By AP / DAN STRUMPF (NEW YORK) — E-mails released by a Senate committee investigating the financial crisis show top executives at Goldman Sachs Inc. boasting about money the firm was making as the housing market collapsed in 2007. The documents suggest that Goldman benefited at least for a time from bets that subprime mortgage-backed securities would lose value. The e-mails appear to contradict previous statements by the investment bank that it lost money on such securities. "Of course we didn't dodge the mortgage mess," CEO Lloyd Blankfein wrote in an e-mail dated Nov. 18, 2007, according to the documents released Saturday morning. "We lost money, then made more than we lost because of shorts."
Goldman Sachs Should Cut Losses in SEC Standoff By Joshua Gallu and David Scheer April 23 (Bloomberg) -- Goldman Sachs Group Inc. may be better off cutting its losses instead of fighting what it terms “unfounded” fraud claims, say professors of securities law who have examined the U.S. Securities and Exchange Commission’s lawsuit against the bank. The most profitable firm in Wall Street history will probably lose what is typically the first hurdle in court, a motion to throw out the April 16 suit because it lacks legal merit, the professors said in interviews this week. After that, Goldman Sachs’s risks will mount and its negotiating position will weaken, they said.
Goldman Clashes With Senate’s Levin Ahead of Blankfein Hearing By Christine Harper and Ryan J. Donmoyer -- April 25 (Bloomberg) -- Goldman Sachs Group Inc. and U.S. Senator Carl Levin fired opening shots ahead of a congressional hearing this week, releasing conflicting evidence of the investment bank’s tactics during the mortgage market’s collapse. Levin, a Michigan Democrat who leads the Senate’s Permanent Subcommittee on Investigations, posted internal Goldman Sachs e-mails on his website yesterday that he said show the firm “made a lot of money by betting against the mortgage market.” Goldman Sachs responded with documents indicating the firm lost money on mortgages in 2008 and that executives didn’t know the market would fall.
Goldman Sach's CEO and board are named in shareholder lawsuits By Bernard Condon, Associated Press -- NEW YORK — Goldman Sachs's CEO and other top officers are accused in a pair of shareholder lawsuits of lax oversight in deals involving risky mortage-backed securities that later went bad. The lawsuits filed Thursday in New York State Supreme Court name Lloyd Blankfein and the firm's entire board of directors as defendants. The suits follow civil fraud charges filed last week by the Securities and Exchange Commission over the same investments.
Goldman Sachs wages war of words with US Senate By Jonathan Sibun - Telegraph.co.uk Tensions between Goldman Sachs and the US Senate have reached breaking point as the two sides wage a public war over whether the investment bank hoodwinked clients by betting against the sub-prime mortgage market. The two sides have been battling for the moral high ground ahead of tomorrow's (Tuesday) Senate testimony by Lloyd Blankfein, the investment bank's chief executive. Carl Levin, a Democrat who heads the Senate committee investigating Goldman's role in selling sub-prime mortgage products, released emails over the weekend that he claimed show the bank "made a lot of money by betting against the mortgage market".
Maastricht madhouse fuels EMU-wide contagion from Greece By Ambrose Evans-Pritchard - Telegraph.co.uk If the chief purpose behind the EU-IMF bail-out for Greece – or for banks exposed to Greece – is to prevent a "full-blown and contagious sovereign debt crisis", the market verdict must be a sobering surprise. The relief rally fizzled shortly after Greece folded its bad poker hand and invoked aid. Bond risk as measured by Markit's 5-year credit default swaps jumped to fresh records of 280 for Portugal and 177 for Spain. Irish CDS contracts rose 13 points to 185. This was an entirely logical response to the twisted events that are unfolding. The rescue obliges countries in trouble to go deeper into trouble. Portugal must come up with €774m as its share of the EU's initial €30bn package. Ireland must find €491m, Spain €3.7bn.
An extreme necessity Econiomist.com Greece's request for aid from the euro zone and the IMF will provide only temporary relief GREECE'S prime minister, George Papandreou, faced the television cameras on Friday 23rd April to anounce that his government would draw on emergency aid to tide it over for the rest of the year. Mr Papandreou decribed the rather embarassing request to to other euro zone members and the IMF as "an extreme necessity." This followed a week in which yields on Greek bonds reached an alarming 8.9%. That in part reflected an announcement by Eurostat, the European statistics agency, that Greece's budget deficit reached 13.6% of GDP in 2009, even worse than it had previously thought. The agency added that the number might be revised up again, owing to the poor quality of the available data. Moody's, a credit-rating agency, responded by giving the latest of many downgrades by agencies to Greece's sovereign bonds.
Greece Activates Emergency Bailout, Testing Financial Strength of Eurozone Countries BY KERRI SHANNON, Associate Editor, Money Morning Greece on Friday officially asked to tap into a $60 billion (45 billion euro) emergency aid package after months of talks, setting into motion a bailout process that will put the financial strength of Eurozone nations to the test. Greece Prime Minister George Papandreou called his debt-stricken country's economy a "sinking ship," as borrowing costs reached 12-year highs and recent austerity measures didn't rally the market support needed to save Greece. "This is the moment. The time that was not granted to us by the markets will be given to us by the support of the Eurozone," Papandreou said.
Greece presses "help" button, markets still wary (Reuters) - Debt-stricken Greece appealed to its European partners and the IMF for emergency loans on Friday, yielding to overwhelming market pressure to start the first financial rescue of a member of the euro zone. Prime Minister George Papandreou asked to tap the 45 billion euro ($60.5 billion) package after investors feared a default and pushed borrowing costs to record levels, undermining Athens' efforts to cut its 300 billion euro debt pile. "It is a national and imperative need to officially ask our partners in the EU for the activation of the support mechanism we jointly created," Papandreou said in a statement broadcast live from the remote, tiny Aegean island of Kastellorizo.
Greece Requests EU-IMF Rescue in Euro's Biggest Test By Jonathan Stearns and Maria Petrakis April 23 (Bloomberg) -- Greece called for activation of a financial lifeline of as much as 45 billion euros ($60 billion) this year in an unprecedented test of the euro's stability and European political cohesion. The appeal for help from the European Union and International Monetary Fund follows a surge in borrowing costs to what Greek Prime Minister George Papandreou called unsustainable levels that undermine efforts to cut a budget deficit that is more than four times the EU limit.
Greece, Out of Ideas, Requests Global Aid By NIKI KITSANTONIS and MATTHEW SALTMARSH - NYTimes ATHENS - Describing his country's economy as "a sinking ship," Greece's prime minister formally requested an international bailout on Friday, creating the biggest test so far to the European monetary union. "We drew up a plan, we took difficult and painful measures," Prime Minister George A. Papandreou said in a nationally televised address. "But the markets did not respond."
Rich world may face next downturn with dull weapons by Emily Kaiser - Analysis (Reuters) - Rich countries may not be able to resharpen their crisis-fighting tools fast enough to get them ready for the next downturn, leaving them increasingly reliant on cash-rich emerging powerhouses to ensure stability. Before the latest upheaval struck, advanced economies had enjoyed a relatively peaceful stretch dating back to the early 1990s. Aside from the 2001 recession, which proved to be mild, the financial trauma was largely centered in emerging markets. That has changed. As the International Monetary Fund has stressed in the run-up to this week's meetings of world finance officials in Washington, the biggest threats to the global recovery are concentrated in advanced economies now.
China currency move a matter for medium-term: IMF (Reuters) - China recognizes the need to let its currency appreciate for the good of its domestic economy but the move will only come in the "medium term", the International Monetary Fund's Asia director said on Saturday. IMF Asia Director Anoop Singh told Reuters that China and other export-focused Asian countries have been compelled by the stalling of growth in Western economies to seek a new model of sustained growth. "That involves a range of policies to raise consumption (and) rebalancing and improving the exchange rate is part of this and I think we will see that over the medium term," he said in an interview. He would not be drawn further on how soon appreciation might be allowed.
Shortsighted to oppose bank tax, IMF warns (Reuters) - Countries that weathered the global economic crisis with their financial systems relatively unscathed are being shortsighted by opposing a global bank levy, the IMF's chief said on Saturday. International Monetary Fund Managing Director Dominique Strauss-Kahn suggested a bank tax would be helpful in preparing for crises that could strike anywhere and indirectly criticized countries that might think they would never feel the brunt of a downturn. "The countries ... which are likely to implement (a bank tax) are the ones having had problems in the banking sector," Strauss-Kahn said. "The others say, 'We didn't have a problem so we're immune.'"
IMF chief tries to shore up fraying G20 unity (Reuters) - The IMF sought to maintain unity within the Group of 20 economic powers on Thursday, urging countries not to go separate ways in reforming the financial sector, as frictions emerged over a controversial plan to tax banks. At the start of four days of meetings in Washington, International Monetary Fund chief Dominique Strauss-Kahn said countries need to ensure they are moving in the same direction on regulatory reform if they are to curb the risky practices blamed for the global financial crisis. "Our main concern is to have everyone working together and to maintain the cooperation momentum," he said.
Policymakers' comments at IMF, G20 meetings (Reuters) - Following are key quotes from global financial leaders on the third day of talks around the IMF's annual spring meetings. On the 45 billion-euro ($60.5 billion) aid for Greece: "Some countries think it's not enough. ... some of the G20 countries, including some of the European countries." On the yuan: "My impression ... with China is that in the right circumstances, they (will) allow more flexibility. "That's their perception of the right circumstances, and I think that is becoming, again, more likely than it was before because we're starting to emerge from crisis situations."
Saving America from Corporate-Statism Nelson Hultberg - SilverBearCafe.com As America sinks deeper into the tyranny of bureaucratic corporatism via today's incestuous relationship between Washington and Wall Street, it is inspiring to see thousands of Tea Parties spring up to express outrage. Unfortunately the "new deal" campaign approach still works as it has been malefically doing for over 70 years since FDR came to visit us. Every election season artful political pitchmen hit the hustings to call for "change" and "more prosperity for the people," in which millions get swept up.
Barack Obama promises to end bailouts 'once and for all' By Alex Spillius - Telegraph.co.uk President Barack Obama promised an end to taxpayer-funded bailouts "once and for all" as the US Senate prepared to start debating this week an overhaul of the financial system to restore confidence in Wall Street. Mr Obama called on Congress to pass the most wide-ranging changes to oversight of the financial market since the Great Depression and said the changes would help revive the economy and "put an end to the cycles of boom and bust". "In the absence of common-sense rules, Wall Street firms took enormous, irresponsible risks that imperiled our financial system - and hurt just about every sector of our economy," said the president in his weekly address. "Some people simply forgot that behind every dollar traded or leveraged, there is family looking to buy a house, pay for an education, open a business, or save for retirement."
To Peg or Not to Peg? Peter Schiff - SilverBearCafe.com While I attended an economic conference last week in Shanghai, I found it notable - but not surprising - that two former Secretaries of the Treasury, John Snow and Hank Paulson, as well as current Treasury Secretary Tim Geither, and former President George W. Bush were then in the country at the same time. The fact that so many key American power brokers (myself not included) were in China simultaneously is no coincidence. In an overly indebted world, the $2.5 trillion that China holds in foreign reserves is acting as a center of economic gravity, inexorably pulling all market participants into its orbit.
Awash in $100 Bills That Add Up to Zero By JIM DWYER - NYTimes.com For eight nights in March, the Allman Brothers played at the United Palace Theater in Washington Heights, and after the shows, their fans would come steaming along Broadway. One celebratory stop was at Coogan'son 169th Street. The crowds were good for business. They were swept into the usual tides of cops and politicians, neighborhood people and regulars from the hospital next door. Near the end of the run, which included St. Patrick's Day, the bar owners inspected a small pile of $100 bills that they had held out of their bank deposits. "I could tell by feeling the linen," said Peter Walsh, one of the partners. "It was this really heavily linen feeling. Whatever linen they usually have in the bills, this was triple."
A new idolatry Economist.com The economic crisis has revived the old debate about whether firms should focus most on their shareholders, their customers or their workers THE era of "Jack Welch capitalism" may be drawing to a close, predicted Richard Lambert, the head of the Confederation of British Industry (CBI), in a speech last month. When "Neutron Jack" (so nicknamed for his readiness to fire employees) ran GE, he was regarded as the incarnation of the idea that a firm's sole aim should be maximising returns to its shareholders. This idea has dominated American business for the past 25 years, and was spreading rapidly around the world until the financial crisis hit, calling its wisdom into question. Even Mr Welch has expressed doubts: "On the face of it, shareholder value is the dumbest idea in the world," he said last year.
Worried About a Double Dip in Housing? It May Be Here Already By BETSY SCHIFFMAN - DailyFinance.com While many home sellers fret over the possibility of a double dip in the real estate market, at least one economist thinks there's no sense in worrying -- it's too late. The double dip is here, says Paul Dales, of Capital Economics, an investment research firm. Existing home sales are up -- they climbed nearly 7% in March -- but prices have dropped over the last three months, culminating with a 3.4% decrease in February, according to the Federal Housing Finance Agency. All told, prices are down 2.7% from November and 13.3% below the market peak in April 2007.
Harley CEO offers no promises on preserving jobs THE BUSINESS JOURNAL OF MILWAUKEE - BY Rich Rovito -- Harley-Davidson Inc. president and CEO Keith Wandell said Saturday that the Milwaukee motorcycle manufacturer will continue to face challenges from the economy and that he won't make any guarantees to employees about their job security. "I wish to God I could stand in front of everybody and say that you're going to be guaranteed a job for life," Wandell said. "We'd all be great friends and pat each other on the back and walk into the sunset together. You know what? Life isn't that simple."
The Real Definition of Sedition That Liberals Don't Want You To Know By J.J. Jackson - CapitolHillCoffeeHouse.com Watch out all you who dare to speak up against our government in Washington as those at the reins of power are snatching up every last bit of control they can! You are the dangerous ones. Worse yet you are committing a crime in the eyes of leftists like Joe Klein. That’s right folks your talk is dangerous and borders on sedition which people like Klein are all too eager to warn is a felony and that you could be hauled off to jail for engaging in.
Arizona's immigration law may spur a showdown By Nicholas Riccardi, Los Angeles Times Gov. Jan Brewer signs a bill that opponents say encourages racial profiling. President Obama calls the measure 'misguided.' A federal review is underway. Arizona Gov. Jan Brewer on Friday signed the toughest law against illegal immigration in the country, shrugging aside warnings from religious and civil rights leaders — and President Obama — that it would lead to widespread racial profiling. Hours after Obama denounced the measure as "misguided," Brewer held a signing ceremony for the bill, which makes it a crime to be in the state illegally and requires police to check suspects for immigration paperwork.
Hundreds protest immigration law in Arizona By the CNN Wire Staff Phoenix, Arizona (CNN) -- Hundreds of people gathered outside Arizona's Capitol building on Sunday in a largely peaceful protest against the state's tough new immigration law. Chanting "Yes we can," waving American flags and holding signs reading "We have rights" and "We are human," demonstrators kept up a festive spirit as they denounced the bill signed Friday by Gov. Jan Brewer. The new law requires police to determine whether a person is in the United States legally. It also requires immigrants to carry their alien registration documents at all times and requires police to question people if there is reason to suspect they're in the United States illegally.
Senators postpone climate bill unveiling (Reuters) - One of President Barack Obama's top priorities -- tackling global warming -- suffered a severe setback on Saturday when a fight over immigration derailed plans to unveil a compromise climate change bill. A bipartisan group of senators led by Democrat John Kerry had been aiming to outline details of their climate change bill on Monday. That plan was canceled after Republican Senator Lindsey Graham, a member of the working group, threatened to pull out if Democrats pushed for a debate on an overhaul of immigration before doing the huge environmental and energy legislation.
Well beneath sunken rig U.S. has serious oil leak (Reuters) - An oil well on the ocean floor beneath a drilling rig that exploded and sank into the Gulf of Mexico began spewing oil on Saturday, the U.S. Coast Guard said. The well, 5,000 feet beneath the ocean surface, was leaking about 1,000 barrels per day of oil, a Coast Guard spokeswoman said, in what the agency called a "very serious spill." Remote underwater vehicles detected oil leaking from the riser and drill pipe, the spokeswoman said. "We are classifying this as a very serious spill and we are using all our resources to help contain it," Coast Guard Petty Officer Connie Terrell said.
Iran reportedly tests five new missiles By the CNN Wire Staff Tehran, Iran (CNN) -- Iran said Sunday it fired five new types of locally-made coast-to-sea and sea-to-sea missiles in the last stage of its "Great Prophet 5" military maneuvers in the Persian Gulf. The missiles were fired simultaneously and struck a single target at the same time -- a feat the Revolutionary Guard Corps described to the Islamic Republic of Iran Broadcasting as "very important." The military exercises on Sunday also included high-speed boats waging a "war" against a warship. The maneuvers fell on the 31st anniversary of the elite force and were designed to demonstrate new weapons systems. Iran begins war games
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A Free Market in Chains By Dan Amoss - DailyReckoning.com 04/22/10 Jacobus, Pennsylvania – If left to its own devices, a truly free market would have already corrected many of the imbalances of the late, great credit bubble. Instead, US policymakers at the Federal Reserve and the Treasury Department have been trying to re-inflate the credit bubble by pumping trillions of dollars of fresh credit and currency into the financial system. The Fed is still maintaining these Keynesian tactics, despite the increasing possibility that inflation and other adverse outcomes will result. Kansas City Fed President Thomas Hoenig is one of the few policymakers who appear to grasp the following simple economic truism: There is no free lunch. In his April 7 speech “What About Zero?” Hoenig says, “Low rates, over time, systematically contribute to the buildup of financial imbalances by leading banks and investors to search for yield.” In other words, Hoenig doesn’t want to be complicit in the ZIRP (zero interest rate policy) experiment the Fed is currently conducting.
Governments Will 'Bankrupt Us': Marc Faber By: CNBC.com Current economic policies are not sustainable and the world faces doom because "the governments are taking over", said Marc Faber, editor & publisher of The Gloom, Boom & Doom Report. "They will all bankrupt us and expropriate us, but it may not happen tomorrow. They'll give us something to play with, until the whole system breaks down...they'll just print money and print more money," he said on CNBC Thursday.
Senate Investigation Says Banks Caused Crisis, Not Borrowers Mandelman Matters They finally got it! And geeze, it took them long enough. I wrote an article TWO YEARS AGO, titled “What Happened on Wall Street and Why,” and it explained the factors the contributed to the unfolding crisis… no, not all the factors, for example I didn’t go back to the origins of securitization, or regulatory changes that were made during the Clinton years, or look to lay the blame on Fannie and Freddie and the CRA (Community Reinvestment Act). Why? Because to do so would have been stupid and I don’t do stupid. Why would it have been stupid to cite those things, I hear some of you cry? After all, each of those factors did in fact contribute to the crisis in some way. Perhaps some had supporting roles, others talking parts, a few had cameos, and some were merely extras… but they were all in the movie, right? Of course they were. But so were many other things, and I don’t find it terribly useful to debate and discuss factors that, while contributing, did not contribute in a proximate cause sort of way, or contributed only in hindsight.
Gold May Rise as Investors Seek Haven From Risk of Debt Default By Claudia Carpenter -- April 23 (Bloomberg) -- Gold may advance as investors seek a haven in precious metals from the possibility of debt defaults, a survey showed. Fifteen of 20 traders, analysts and brokers surveyed by Bloomberg, or 75 percent, said gold may rise next week. Two people expect a decline and three were neutral. Gold futures for June delivery rose 0.1 percent this week to $1,138.30 an ounce on the Comex in New York by 11:30 a.m. local time yesterday. The total budget shortfall for 16 countries that use the euro widened to 6.3 percent of gross domestic product last year, from 2 percent in 2008, the European Union’s statistics office said yesterday. Gold rose 24 percent last year as the Federal Reserve kept interest rates close to zero to revive the economy.
Gold outlook remains bullish, say DGJG experts DUBAI (Commodity Online): Gold experts at the Dubai Gold & Jewellery Group (DGJG), a group for Dubai jewellery industry has maintained that the future outlook for gold remains bullish and with the global economy going through fluctuations, gold will be highly sought after as an investment and the ultimate time-tested safe haven. According to Tarek El Mdaka, Managing Director of Dubai based Kaloti Jewellery Group, an integrated gold and precious metals company with international presence in the physical commodity markets, gold would hover between a USD 800-1200 trading range during this year.
Why is Gold and Silver not yet in mainstream? By Dr Jeffrey Lewis - CommodityOnline.com While talking heads and economic pundits scream that somehow precious metals are bubbling, the markets are saying the opposite. When investors break out the calculator and look to decipher the data, they'll find that there is no bubble at all. In fact, investors are largely underweighted in gold and silver in their own portfolios. Metals are Mainstream Prior to the four-bagger returns that began at the turn of the millennium, gold and silver were seen as fringe investments for “paranoid” investors. Dot coms and tech stocks, the world thought, would rise forever, and following the deep recessions throughout the world in the 1990s, economists reported that we would never again see another deep recession or depression.
Forget nukes, Iran’s gold is more lethal By Geena Paul LONDON (Commodity Online): Even as the world is watching Iran with suspicion over its nuclear ambitions, Tehran is harbouring plans to tackle the US pressure through gold. Otherwise, how will you explain the gold hunt Iran has launched after the Gulf war. To stop an effort by the West to seize Iranian assets in Europe, the Iranian leadership decided to begin a massive, secret repatriation of its international currency reserves. Therefore, the Central Bank of Iran started buying gold so that it can stall any economic threat by countries like US and England. And, nobody knows how much gold Iran has already amassed. That too at a time when the world is still reeling under recession impacts and several central banks are hunting for gold to convert their foreign reserves into yellow metal.
Three scenarios for the gold price Author: Geoff Candy - MineWeb.net Is the price going to double in the next year or two or is there a greater chance of it falling back toward $600? GRONINGEN - Over the past week I have had three very different conversations about gold with three well known commentators, all with very different views on what is likely to happen to the price of gold. But, at the centre of all three arguments is a discussion about investment in the metal and whether or not this is just another wave in a very long-standing cycle or if there is something different about the current scenario.
The Devaluation of the USDollar By: Jim Willie CB - GoldSeek.com he need is urgent. The recognition is broad. Supply & Demand of American debt paper demand price adjustment. The USGovt avoids the topic like the plague. The billboard fact of the matter, as USCongressional politicians like to say, is that the USDollar must be take a downward revaluation of significant magnitude in order to even begin to offer a semblance of equilibrium and balance. Natural forces are aligned against those in power who resist the adjustment. Imbalances are too magnificent. They invite continued global revolt and financial insurrection.
Teaching Inflation Mises Daily: by T. Hunt Tooley I had a great teaching experience early last school year. I taught the history of inflation, and I have never timed a course better. I have taught in colleges and universities since 1985, and I have often thought about doing a course on the history of inflation. But this time, current events pushed me to go ahead. Of course, it was clear to me long before the spring of 2008 that the federal government was inflating the money supply. As a historian of war and a student of Austrian economics, I have long known that higher-than-normal monetary inflation would become painfully apparent during our glorious War on Terror, WMDs, Iraq, and Afghanistan. Since World War I and earlier, inflation has always been the handmaiden of war (inflation being a silent theft from the populace through which any war government can help finance the horrendous costs of the war). Moreover, the Fannie Mae/Freddie Mac fiasco and the massive credit expansion of the Fed were fueling a boom of really huge proportions.
Escalating Greek default fears rock Europe's debt markets By Ambrose Evans-Pritchard - Telegraph.co.uk Greece's debt crisis has reached a dramatic crescendo after the EU revealed that the country's debt and deficit figures are even worse than feared and leading banks began to talk openly of debt-restructuring. With contagion spreading across Southern Europe, spreads on 10-year Greek bonds exploded to almost 600 basis points over German Bunds in panic trading, pushing borrowing costs close to 9pc. Rates on two-year debt rose to 10.6pc in a market gone mad. “It is clear that the Greek situation is a very serious one,” said Dominique Strauss-Kahn, head of the International Monetary Fund. “There is no silver bullet to solve it in an easy manner.” Credit default swaps (CDS) on Portuguese debt surged 50 basis points in a matter of hours to an all-time high of 270. Markit said the CDS on Spain reached a fresh record of 175, and Ireland jumped to 162, with jitters reaching Hungary, Bulgaria, Romania, Russia and even Argentina.
Greek Budget Deficit Hits 13.6 Percent of GDP in 2009 MoneyNews.com Financially-stricken Greece had an even bigger budget deficit for 2009 than previously thought, official figures showed Thursday — at a time the country is considering whether to tap a bailout facility from its 15 partners in the eurozone and the International Monetary Fund. The European Union's statistics office Eurostat said that Greece's budget deficit in 2009, as a percentage of economic output, was 13.6 percent. That's up from the previous estimate of 12.9 percent and nearly double the 7.7 percent recorded in 2008. Greece's total government debt as a proportion of GDP stands at a massive 115.1 percent, a burden so large that some analysts think it will have trouble paying it over coming years even if a bailout saves Athens from default this year.
Another bad day for Greece By Annalyn Censky NEW YORK (CNNMoney.com) -- Moody's downgraded Greece's government bonds Thursday casting further doubt that the debt-laden country will be able to meet its May 19 deadline for refinancing 8.5 billion euros, or about $11.4 billion, in borrowings. The credit rating agency cut its bond rating for Greece one notch, to an A3 level, citing "significant risk." A3 is still considered investment grade, although it's not an entirely high-quality credit level. Moody's cautioned that further downgrades are possible as it continues to review Greece's economic outlook.
EU Sees Wider Greek Deficit, Roiling Markets By CHARLES FORELLE - WSJ.com Bonds Fall as Investors View Bailout and Default as Givens BRUSSELS—New figures revealed that Greece's debt crisis is even worse than investors believed, delivering a fresh shock to European markets and all but ensuring that the International Monetary Fund and euro-zone countries will have to step in within weeks to bail out the country. The European Union's statistical authority said Thursday that Greece's 2009 budget deficit—already yawning—was wider than Athens had estimated. Also Thursday, Moody's Investors Service downgraded Greece's debt rating.
Traders Bet on a Default From Greece By TOM LAURICELLA And STEPHEN FIDLER - WSJ.com Greek bond prices posted a drastic decline Thursday as traders began betting a debt default is inevitable, even if the country receives a massive bailout. The Greek bond market is now priced for a "catastrophic event," says Sebastien Galy, senior foreign-exchange strategist at BNP Paribas. Greece's woes helped sink the euro to an 11-month low before the common currency recovered some of its losses. Although conditions in the Greek bond market have generally been deteriorating over the past several weeks, Thursday's session saw an especially steep decline in short-term debt prices. As a result, the yield on Greek two-year notes jumped to more than 12% from 8.3% Wednesday, according to Tradeweb.
Max Keiser on Inside Story - 22 April 2010 - Greek Debt Crisis Continues
Dealers Defend Swaps as Obama Predicts ‘Big Battle’ By Shannon D. Harrington and Matthew Leising April 22 (Bloomberg) -- Legislation to regulate the $605 trillion derivatives market is reaching beyond issues that threatened the financial system two years ago and may impede the market, according to industry leaders. U.S. Senate legislation that would require traders to instantly report prices and execute contracts on exchanges or facilities resembling exchanges won’t lessen risk to the financial system, said Robert Pickel, executive vice chairman of the International Swaps & Derivatives Association. The Federal Reserve demanded dealers curb such risks since the bankruptcy of Lehman Brothers Holdings Inc. and near-failure of Bear Stearns Cos. in 2008.
Key Player on Debt Commission Says VAT in the Mix FOX News The Executive Director of the White House panel charged with reducing the national debt told Fox Wednesday a value-added-tax or VAT would be among the options up for consideration. "We need to talk through all sides of this equation," Bruce Reed told Fox in an interview in his makeshift office two blocks from Capitol Hill. "We're going to look at discretionary spending, mandatory spending, tax reform...look at this issue from every angle. And also look at ways and making sure that the economy is strong and it's growing faster than debt is growing."
Fitch warns of debt 'shock' for Japan By Ambrose Evans-Pritchard - Telegraph.co.uk Fitch Ratings has warned that Japan's sovereign debt is rising to ominously high levels as the workforce shrinks and deflation grinds deeper, while the government's reserve assets may prove unusable for defence in a funding crisis. The agency said Japan's gross public debt has reached 201pc of GDP and is likely to continue pushing higher into the danger zone unless premier Yukio Hatoyama starts to get a grip on public accounts. "Japan is increasingly vulnerable to an adverse interest rate shock, given the scale of government debt and hence the volume of refinancing," said Andrew Colquhoun, Fitch's Asia specialist. "The lack of a coherent and credible plan" for fiscal discipline is likely to put "downwards pressure on creditworthiness in the medium term." The Fitch Report comes two days after the IMF warned that the global banking crisis has mutated into a sovereign debt crisis that risks setting off a second phase of economic turmoil.
Bubbles building in China 4/21/10 Marc Faber on Bloomberg
Market Manipulation and Delusions of Prosperity By: Richard Daughty - GoldSeek.com It was too late that I remembered that having margaritas for lunch was a bad idea, and I was now sleepy and argumentative, my eyelids drooping, when my eyes suddenly few open when I read the Bloomberg headline, “Leading Economic Indicators Index in US Rose 1.4% in March”. Wow! Bloomberg said, “The 1.4 percent increase in the New York-based Conference Board’s measure of the outlook for three to six months was more than anticipated” which would seem to be an understatement of the first order! Wow! In searching for explanations, the article went on that “Seven of the 10 indicators in the leading index contributed to the gain”, with which they followed, “led by the interest-rate spread.”
America must face up to the dangers of derivatives By George Soros - FT.com The US Securities and Exchange Commission’s civil suit against Goldman Sachs will be vigorously contested by the defendant. It is interesting to speculate which side will win; but we will not know the result for months. Irrespective of the eventual outcome, however, the case has far-reaching implications for the financial reform legislation Congress is considering. Whether or not Goldman is guilty, the transaction in question clearly had no social benefit. It involved a complex synthetic security derived from existing mortgage-backed securities by cloning them into imaginary units that mimicked the originals. This synthetic collateralised debt obligation did not finance the ownership of any additional homes or allocate capital more efficiently; it merely swelled the volume of mortgage-backed securities that lost value when the housing bubble burst. The primary purpose of the transaction was to generate fees and commissions.
Goldman CEO Lloyd Blankfein to testify at Senate hearing By David Lieberman, USA TODAY NEW YORK —Goldman Sachs on Tuesday will have its most public — and potentially dramatic — opportunity yet to defend itself against government charges that it hoodwinked investors in 2007. CEO Lloyd Blankfein and executive Fabrice Tourre plan to testify at a hearing called by the Senate Permanent Subcommittee on Investigations to explore fraud allegations made by the Securities and Exchange Commission, the panel announced Thursday. Fabrice Tourre, who was named along with Goldman in the charges filed Friday, will testify Tuesday before the Permanent Subcommittee on Investigations, the panel said.
Senate sends for Fabrice Tourre, the banker at heart of Goldman ‘fraud’ Christine Seib, Helen Power - TimesOnline.co.uk Fabrice Tourre, the banker at the centre of Goldman Sachs’ alleged $1 billion fraud, could appear in Washington next Tuesday to defend his imploding mortgage product. Before he was charged with securities fraud last Friday, the Frenchman, 31, was invited to appear at what was expected to be a fiery Senate committee hearing alongside Lloyd Blankfein, Goldman’s chairman and chief executive, to talk about the causes of the financial crisis. If he attends, Mr Tourre is expected to say that he did nothing wrong in creating the Abacus 2007-AC1. Goldman, which was also charged over Abacus, has denied any wrongdoing.
Obama's Wall Street Bill Lets Crooks Escape By Cliff Kincaid, CapitolHillCoffeeHouse.com The indictment of Goldman Sachs is as deceptive as the “financial reform” bill that President Obama and the liberals are pushing on Capitol Hill, says Zubi Diamond, author of the blockbuster book, Wizards of Wall Street. Diamond is warning legislators not to fall for the Obama Administration’s claim that the legislation somehow punishes Wall Street for bad financial practices. Diamond, who has emerged as a major critic of the unregulated hedge fund industry, says he was not surprised that the Securities and Exchange Commission (SEC) named hedge fund short-seller John Paulson as a key player in the Goldman Sachs scheme to defraud investors but failed to indict him.
Wall Street to Obama: Hands off! By Aaron Smith NEW YORK (CNNMoney.com) Misguided. Unworkable. Hypocritical. Wall Street was unimpressed by President Obama's argument for financial reform on Thursday. The reaction of nearly a dozen financial industry workers ranged from skepticism to animosity. "It doesn't seem necessary for him to come down here," said Frank Clemente, a stock broker. "It's all political, not any real reform." Clemente was particularly annoyed that Obama criticized the financial industry after having accepted political contributions from Goldman Sachs employees during his presidential campaign.
Goldman's White House connections raise eyebrows by Greg Gordon | McClatchy Newspapers WASHINGTON — While Goldman Sachs' lawyers negotiated with the Securities and Exchange Commission over potentially explosive civil fraud charges, Goldman's chief executive visited the White House at least four times. White House logs show that Chief Executive Lloyd Blankfein traveled to Washington for at least two events with President Barack Obama, whose 2008 presidential campaign received $994,795 in donations from Goldman's employees and their relatives. He also met twice with Obama's top economic adviser, Larry Summers.
SEC workers watched porn as economy tanked USA Today.com WASHINGTON (AP) — Senior staffers at the Securities and Exchange Commission spent hours surfing pornographic websites on government-issued computers while they were being paid to police the financial system, an agency watchdog says. The SEC's inspector general conducted 33 probes of employees looking at explicit images in the past five years, according to a memo obtained by The Associated Press. The memo says 31 of those probes occurred in the 2 1/2 years since the financial system teetered and nearly crashed. It was written by SEC Inspector General David Kotz in response to a request from Sen. Charles Grassley, R-Iowa.
Blankfein fights back on SEC case By Henny Sender in New York and Stephanie Kirchgaessner in Washington - FT.com Lloyd Blankfein on Wednesday attacked the Securities & Exchange Commission’s fraud charges in telephone calls to ?clients as Goldman escalated its campaign to stem the damage to the bank’s reputation. One person who received a call from the Goldman chief said he was told the regulator’s case against the bank was politically motivated and would ultimately “hurt America”.
REPO 105 Lawrence McDonald discusses Lehman Brothers' Repo 105
Lehman Brothers - Cooked the Books, Jail Geithner, Jail Fuld
Back to Basics on Financial Reform By NIALL FERGUSON, TED FORSTMANN - WSJ.com The case for limiting leverage and regulating derivatives is overwhelming, but that doesn't require a new 1,300-page law. A "trilemma" is like a dilemma, only there are three things to choose from and you can have just two. The current debate over post-crisis financial regulation suggests we face such a trilemma: We can choose any two of the following, but not all three: 1) efficient capital markets 2) no bailouts to big banks and 3) a depression-free economy. From the 1980s until 2007, we essentially opted for one and two. Financial markets operated with more freedom than at any time since the 1930s and the Federal Reserve stood ready to cut interest rates if asset prices tanked. But the idea that big banks might be able to get new capital from the Treasury was scarcely even contemplated. Choosing one and two resulted in a global financial and economic crisis worthy of the name depression.
Fed Said to Press Largest Banks to Lower Pay Incentives for Risk By Ian Katz -- April 22 (Bloomberg) -- Federal Reserve supervisors are telling about two dozen of the largest U.S. banks they must do more to end pay practices that encourage excessive risk-taking and are ordering boards to step up scrutiny of incentives, according to three people briefed on the discussions. Fed officials met in recent weeks with executives and board members and told them to submit plans for repairing deficiencies in how they monitor pay, the people said. The banks also must ensure that managers of individual business units aren’t given too much discretion over employee compensation. Firms in the Fed’s review program include Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., Bank of America Corp. and Morgan Stanley, one of the people said.
Financial Regulation
Obama Urges Finance Industry to End Regulation Fight By Roger Runningen and Hans Nichols April 22 (Bloomberg) -- President Barack Obama called on the financial industry to drop the “furious effort” to fight his regulation plan, saying a failure to impose tougher rules on the market will put the U.S. economic system at risk. The U.S. was almost dragged into a second Great Depression by “a failure of responsibility -- from Wall Street all the way to Washington,” Obama said today in a speech he delivered at Cooper Union in New York, about two miles from Wall Street.
Obama to Wall Street: I Told You So CBSNews.com President Criticizes Financial Leaders Even as He Asks for Their Support on Regulatory Reform (CBS/AP) Speaking just two miles from Wall Street, President Barack Obama chided the financial leaders for a "failure of responsibility" even as he sought their help for "updated, commonsense" regulations to head off any new financial crisis. "Ultimately there is no dividing line between Main Street and Wall Street. We rise or we fall together as one nation. So I urge you to join me," Mr. Obama said in a high-stakes speech near the nation's financial hub.
Obama Doesn’t Intend to Give Back Goldman Donations By John McCormick April 22 (Bloomberg) -- President Barack Obama doesn’t plan to give back almost $1 million in campaign contributions from employees of Goldman Sachs Group Inc. “We make these decisions on a case-by-case basis, and in this case we have not accepted contributions from specific individuals accused of wrongdoing, nor have we advocated for positions that big Wall Street banks generally favor,” Hari Sevugan, a Democratic National Committee spokesman, said in a statement.
William K. Black's Testimony to the Congress on Lehman's fraud The recent US financial crisis is always and everywhere founded in regulatory capture, dissembling, influence peddling, and fraud.
Bill Black's eye-popping opening statement at House FinServ hearing on Lehman Bros. failure
Budget Crisis Puts LA Court System At Risk CBS News.com Los Angeles Court System Dealing With Painful Cuts, Courtroom Shutdowns That Could Get Worse LOS ANGELES (AP) - The nation's largest court system is in the midst of a painful budget crisis that has shut down courtrooms and disrupted everything from divorce and custody proceedings to traffic ticket disputes. The Los Angeles court system has already closed 17 courtrooms and another 50 will be shut down come September unless something is done to find more money. The judge who presides over the system predicts chaos and an unprecedented logjam of civil and family law cases in the worst-case scenario.
Oil Trades Below $84 as Stronger Dollar Curbs Commodity Demand By Ben Sharples April 23 (Bloomberg) -- Crude oil traded below $84 a barrel in New York, paring gains for the week, as the stronger dollar curbed demand for commodities. Oil rebounded yesterday to close little changed after the National Association of Realtors said home purchases advanced 6.8 percent to a 5.35 million annual rate and a government report showed new applications for jobless benefits dropped. OPEC will reduce oil shipments for the first time since March as Asian refiners cut imports while performing maintenance. “Oil is taking a bit of a breather, the U.S. dollar strengthened and that has knocked it over a bit,” Peter McGuire, managing director at CWA Global Markets Pty, said by phone from Sydney. “Over the next two to three months there is more upside.”
Burning oil rig sinks into Gulf; 11 still missing By KEVIN McGILL - Associated Press NEW ORLEANS (AP) - An oil platform that burned for more than day after a massive explosion sank into the Gulf of Mexico on Thursday, the U.S. Coast Guard said. Crews searched by air and water for 11 workers still missing from the Deepwater Horizon, though one relative said family members have been told it's unlikely anyone survived Tuesday night's blast. Supply vessels had been shooting water into the rig try to control the flames enough to keep it afloat, but couldn't, Coast Guard Petty Officer Katherine McNamara said.
Even Good Housing Numbers Aren't Adding Up Right By: Diana Olick - CNBC Real Estate Reporter So first time buyers are juicing the housing market once again, accounting for 44 percent of all sales in March. While the percentage is high, the actual volume is not nearly what it was last fall, when the tax credit for them was originally set to expire. And while investors are still in there at a 19 percent share of buyers, my sources on the ground say they are losing ground, especially in California, where the inventory of cheap homes is very low.
Wholesale Prices Rise in March as Food Costs Jump By CHRISTOPHER S. RUGABER - AP Wholesale prices rise in March as food costs jump, but core inflation remains all but flat Wholesale prices rose more than expected last month as food prices surged by the most in 26 years. But excluding food and energy, prices were nearly flat. The Labor Department said the Producer Price Index rose by 0.7 percent in March, compared to analysts' forecasts of a 0.4 percent rise. A rise in gas prices also helped push up the index. Still, there was little sign of budding inflation in the report. Excluding volatile food and energy costs, wholesale prices rose by 0.1 percent, matching analysts' expectations.
Jobless claims drop; food prices surge USA Today.com WASHINGTON (AP) — First-time claims for jobless benefits fell 24,000 last week to a seasonally adjusted 456,000, and a wholesale price index rose more than expected last month as food prices surged the most in 26 years, the Labor Department said in two reports Thursday. The number of jobless claims was slightly below analysts' estimates of 458,000, according to Thomson Reuters. The drop comes after claims rose in the previous two weeks. A Labor Department analyst attributed those increases to seasonal adjustment difficulties around the Easter holiday, which falls on different weeks each year.
New Taxes to Help You Curb Your Sense of Freedom By Rocky Vega - DailyReckoning.com 04/22/10 Stockholm, Sweden – We’ve written before about how our taxes could be shipped abroad, and also about how a value-added tax could be on the way. Now, we take a look at the new sin taxes cropping up in states all across the nation. It’s one of the older plays in the book. Uncle Sam’s state governments can once again fly under the sensible cover of morality in order to tighten the screws on your income. According to The New York Times: “Texas, Georgia and Pennsylvania have considered “pole taxes” — for buyers of pornography and patrons of strip clubs and escort services. Seven states last year either enacted new taxes on alcohol or raised old ones, according to the Center on Budget and Policy Priorities.
How foreclosure impacts your credit score By Les Christie NEW YORK (CNNMoney.com) -- If you're delinquent on your mortgage, your credit score will suffer. Everyone knows that. The question is, by how much? Until recently, those answers were hard to come by. Credit bureaus were uncommunicative about expressing, in points, just how much impact different foreclosure types of mortgage delinquencies have on scores. Recently, Fair Isaac, which developed FICO scores, pulled back the curtain a bit, revealing some estimates of point-score declines following mortgage delinquency problems.
Killer fungus seen in Pacific Northwest By Amanda Gardner - CNN.com (Health.com) -- A rare but life-threatening tropical fungus that causes lung infections in both people and animals has been seen in the Pacific Northwest and could spread, researchers are reporting. The fungus, known as Cryptococcus gattii (or C. gattii), has infected dozens of humans and animals--including cats, dogs, and dolphins--in Washington and Oregon in the past five years. While rare, the fungus has been lethal in about 25 percent of the people in the U.S. who have developed infections, according to Edmond Byrnes III, a doctoral student in molecular genetics and microbiology at Duke University and one of the lead authors of a new study about the fungus.
Illegal immigration becomes Arizona state crime By Jim Kouri, CapitolHillCoffeeHouse.com Arizona is the first state in the U.S. to make illegal immigration a crime—and illegal aliens and their advocates aren’t happy about it. While the pleas from American citizens in Arizona and other states fall on deaf ears in Washington, DC, the violence and crime at the U.S.-Mexico border continues unabated. In yet another example of violence spreading north of the border, a deadly Mexican gang is actively plotting to kill U.S. law enforcement officers and their families in Texas, according to a Department of Homeland Security alert that warns U.S. cops to wear body armor and vary routes to avoid being tracked.
The Real Republican Civil War By KIMBERLEY A. STRASSEL - WSJ.com The struggle between Marco Rubio and Charlie Crist for the Florida Senate seat symbolizes the rift between the reformers and the establishment in the GOP. Marco Rubio appeared on a Sunday talk show this month to say something remarkable. The Republican running for Florida's Senate seat suggested we reform Social Security by raising the retirement age for younger workers. Florida is home to 2.4 million senior citizens who like to vote. The blogs declared Mr. Rubio politically suicidal. The response from Mr. Rubio's primary competitor, Gov. Charlie Crist, was not remarkable. His campaign slammed Mr. Rubio's idea as "cruel, unusual and unfair to seniors living on a fixed income." Mr. Crist's plan for $17.5 trillion in unfunded Social Security liabilities? Easy! He'll root out "fraud" and "waste."
Liberals and the Violence Card Conservative protest is motivated by a love of what America stands for. By RUSH LIMBAUGH - WSJ.com -- The latest liberal meme is to equate skepticism of the Obama administration with a tendency toward violence. That takes me back 15 years ago to the time President Bill Clinton accused "loud and angry voices" on the airwaves (i.e., radio talk-show hosts like me) of having incited Oklahoma City bomber Timothy McVeigh. What self-serving nonsense. Liberals are perfectly comfortable with antigovernment protest when they're not in power. From the halls of the Ivy League to the halls of Congress, from the antiwar protests during the Vietnam War and the war in Iraq to the anticapitalist protests during International Monetary Fund and World Bank meetings, we're used to seeing leftist malcontents take to the streets. Sometimes they're violent, breaking shop windows with bricks and throwing rocks at police. Sometimes there are arrests. Not all leftists are violent, of course. But most are angry. It's in their DNA. They view the culture as corrupt and capitalism as unjust.
Gerald Celente on Gary Null 20 April 2010
Radical Muslim Group Warns "South Park" Creators CBSNews.com Website Posting Says Depiction of Prophet Muhammad in Bear Suit Was "Outright Insulting" (AP) A radical Muslim group has warned the creators of "South Park" that they could face violent retribution for depicting the prophet Muhammad in a bear suit during last week's episode. The website RevolutionMuslim.com has since been taken down, but a cached version shows the message to "South Park" creators Trey Parker and Matt Stone. The article's author, Abu Talhah Al-Amrikee of New York, said the men "outright insulted" the religious leader.
Iran begins war games in Persian Gulf oil route Associated Press - TEHRAN, IRAN TEHRAN, Iran (AP) — Iran's elite Revolutionary Guard held war games Thursday in the strategic Persian Gulf oil route, the Hormuz Strait, a show of its military strength at a time when the country's leaders are depicting President Barack Obama's new nuclear policy as a threat. Ahead of the military maneuvers, Supreme Leader Ayatollah Ali Khamenei accused Washington of trying to dominate the world through its nuclear arsenal and vowed that Iran would not bend before what he called "implicit atomic threats."
Mystery rocket explodes in Jordan News.BBC.co.uk - A rocket has exploded near the southern Jordanian city of Aqaba, damaging a warehouse but causing no casualties. The rocket was one of two fired early on Thursday which landed in Jordanian territory - the other fell into the Red Sea. There are conflicting reports as to where the rockets were launched. Egyptian officials denied Israeli reports they had come from Egypt's Sinai Peninsula. Jordan's PM said they had not been launched from his country.
Netanyahu: Iran provoking Israel-Syria conflict JERUSALEM (AP) — Israeli Prime Minister Benjamin Netanyahu says Iran is trying to provoke a war between Israel and Syria. Netanyahu says Iran is trying to convince Syria that an Israeli attack is imminent, which he says is a "lie." Tensions have been high recently between Israel and Syria. The sides have traded threats, and last week Israel accused Syria of smuggling powerful rockets to the Lebanese guerillas of Hezbollah. Syria denied the charge.
Israel rejects US demand to halt building in disputed east Jerusalem James Hider in Jerusalem - TimesOnline.co.uk -- Israel has officially rejected President Obama’s demand that it halt all construction in east Jerusalem, deepening the diplomatic deadlock between the allies just as the US regional envoy is due to renew efforts to resume indirect peace talks. Officials said that Binyamin Netanyahu, the Israeli Prime Minister, conveyed his position to the White House at the weekend. Mr Netanyahu and other senior ministers had already declared publicly that they would not cease construction in the disputed eastern half of the city, which Israel captured in the 1967 Six-Day war.
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Thurs 04.22.2010
Decrying U.S. ‘Threats,’ Iran to Launch War Games By NAZILA FATHI, DAVID E. SANGER - NYTimes.com Iran’s supreme religious leader, Ayatollah Ali Khamenei, declared Wednesday that President Obama’s new nuclear strategy amounted to “atomic threats against Iranian people,” and the Iranian military announced it would conduct a large military exercise in the Persian Gulf, where the United States and Israel have both increased their presence in recent months. The ayatollah’s statement referred to the section of Mr. Obama’s “Nuclear Posture Review” that guaranteed non-nuclear nations that they would never be threatened by a United States nuclear strike — as long as they are in compliance with the Nuclear Nonproliferation Treaty as judged by the United States.
North Korea Torpedoed South's Navy Ship By REUTERS SEOUL (Reuters) - South Korea's military believes a torpedo fired from a North Korean submarine sank its navy ship last month, based on intelligence gathered jointly with the United States, a news report said on Thursday. The Yonhap news agency report appears to be the clearest sign yet that Seoul blames Pyongyang for the sinking, thought to have killed 46 sailors in what would be one of the deadliest incidents between the rivals since the end of the 1950-53 Korean War.
IMF world outlook warns of debt in developed world, inflation in emerging markets By Howard Schneider - WashingtonPost.com DEVELOPED WORLD Government debt Levels of government debt in the developed world are approaching levels not seen since World War II, and IMF economists see this as one of the chief risks for continued recovery. The fund is calling for a period of "fiscal consolidation" -- spending cuts and tax hikes -- in the United States, Europe and Japan, so that debt levels stabilize soon and begin a period of gradual decline. The risk, the agency says, is that chronically higher interest rates and chronically slower growth will set in as government borrowing undermines private-sector activity. The more acute danger involves a series of Greek-style crises in which governments would find it harder to raise the money needed to operate, risking a broader economic malaise.
Double-Dip Recession, Shot Federal Wad by Gary North - LewRockwell.com The case for a secondary recession rests on several factors: a double-dip decline in the residential real estate market, the accelerating decline in the commercial real estate market, the unresolved losses in bank balance sheets, the narrow focus of the profitability (earnings), which has been limited to bailed-out banks, and the threat of rising long-term interest rates, i.e., a decline in the bond market. All of these factors are known to the investment community, yet they have not persuaded stock market investors that there is any threat to corporate profits. So, either the negative factors are minor issues or else the optimism of stock market investors is an example of the same sort of stock market boomlet that took place in 1930. It collapsed in 1931.
America's Impending Master Class Dictatorship Stewart Dougherty - SilverBearCafe.com At certain times, focusing on the big picture is important not just for investment success, but for personal welfare, and even survival. We believe such times are here. It is estimated that 98% of Americans have never held a gold coin in their hands. Yet 100% of Americans regularly handle Federal Reserve Notes. From a contrarian standpoint, the financial message from those two statistics is clear. Even so, gold is much more than money or an investment medium; it stands for liberty and throughout history has facilitated escape and ensured freedom. Never having touched a gold coin is the monetary equivalent to never having breathed fresh air, felt the warmth of sunshine, looked up at the stars or risen from the gutter. Fiat Federal Reserve Notes are becoming nothing more than sewage decomposing in the vast, toxic septic tank of predatory Washington politics, epic Federal Reserve arrogance and error, blatant Wall Street fraud and outright Master Class plunder. Below, we outline America’s troubling and compounding predicament, and urge you to think about how to protect yourself from its consequences, both financially and personally.
Eight Reasons America Is On Edge Howard Fineman - Newsweek.com Fifteen years after the Oklahoma City bombing, the parallels to today are striking. On the banks of the Potomac River, guys carrying guns gathered in a Virginia park to proudly advertise the state's "open carry" law. Their compatriots gathered on the National Mall to honor the Second Amendment. They carried signs warning "Don't Tread on Me". On cable TV, Republicans speak about a "gangster government" and the need to "reload"—all innocent discourse, they claim—while on another channel, Democrats warn that such talk could lead to violence. And in Oklahoma City this week, families of those who died in the 1995 bombing are remembering their loved ones. People across the country wonder if, or when, it could all happen again.
Gold at $1130-40 attractive for long-term investors Commodity Online Gold has fallen from its Friday high of $1160 to $1130 levels on Monday, a decline of 2.5%. Prices have since recovered to $1140 levels, the $1130-40 price range is an attractive entry point for long-term investors, according to Jeffrey Nichols, renowned precious metals Economist and Senior Economic Advisor to Rosland Capital. "There is good support under these levels from the main Asian markets – China and India – where current prices should engender price-sensitive buying. In addition, we are at a seasonally important time for the Indian market ahead of the propitious May wedding period. Bullion traders and jewelry manufacturers stepped up their buying earlier this month – and I expect we'll see still more buying at recent prices."
Bullish Bullion: Gold to gain 10%, Silver 20% The multi-faceted yellow metal gold had a hard time during the wake of the worst recession since the Second World War as an untimely rise in US dollar eclipsed the safety haven appeal of the metal. Gold was also caught up in the imbroglio where panic selling engulfed the market. The metal usually shares an inverse relationship with US dollar as it is considered an alternative investment to the currency. However, the metal benefited from the subsequent dip in the economical cycle, which pummeled the US currency, driving investors towards the safety of gold. The metal, since then, went o on to explore new heights with investment and safety buying piling up, lending the metal with wings to rise.
When Will Gold Make its Next Big Move? by Jordan Roy-Byrne - FinancialSense.com In recent commentaries, we’ve focused on the macro factors that will drive acceleration in the precious metals sector. Namely, the gradual exodus from both government and corporate bonds as authorities are forced to monetize debts in an effort to avoid rising interest rates, which would hasten default and bankruptcy. This, and not bank lending or consumer demand, is the cause of severe inflation. Predicting the timing is more difficult then the actual event. Luckily for our subscribers we constantly pour over numerous technical charts and sentiment indicators in order to advise as to favorable entry and exit points. In analyzing Gold, we find that intermarket analysis is an essential tool. Intermarket analysis is analyzing a market by comparing it to other markets.
Silver The Most Bullish Currency Hubert Moolman - SilverBearCafe.com Gold appears extremely bullish in most of the world's currency. Probably more than it has ever been in the last 30 years. However, there is one currency in which gold is looking really bearish. That currency is none other than the world's other true currency called silver. The outlook for silver as a currency is as bright as it has ever been; in fact, in my opinion, there is no currency that will match silver over the next couple of years. Below is a long term chart of the gold/silver ratio, which translates to the silver price of gold.
Cash Futures, Physical Forwards, and London Gold's "100-to-1 Leverage" by Paul Tustain - FinancialSense.com SOME COMMENTATORS are alarmed that the amount of 'physical' gold in London is not sufficient to meet the immediate demands of the market. This concern is based on a simple misunderstanding. Read what follows and you will have a much better idea of how gold futures, forwards, the spot and physical markets interact. Professionals who trade gold over the counter use a convenient standard for specifying the form of the gold they will deliver between each other. The standard is written and maintained by the London Bullion Market Association (LBMA).
Big banks mint money again: $18.7 billion By Colin Barr - Fortune (Fortune) -- The biggest banks are minting money. Can they keep it up? Do we even want them to? The six biggest bank holding companies - Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley - raked in $18.7 billion in profits in the first quarter. That's more than six times as much as they earned in the fourth quarter of 2009, and their biggest haul since the financial crisis of 2008.
Sound Money and Schoolyard Politics Szandor Blestman - SilverBearCafe.com Economics is not rocket science. In fact, most everyone learns the basics of economics when they’re children. It’s quite simple, really, like math. If you have something I want and I have something you want, we can trade. We’re both happy. That’s really about it. Oh, sure, there are subtleties involved and other considerations to take into account, but those are really more about psychology and human behavior rather than economics. At its most basic level, economics is simply about how one acquires stuff.
Euro Is Near 2-Week Low on Concern Greece Talks May Fall Short By Yoshiaki Nohara and Ben Levisohn -- April 22 (Bloomberg) -- The euro traded near a two-week low against the dollar on concern discussions of a 45 billion- euro ($60 billion) aid package for Greece will fail to stem the nation’s debt crisis. The 16-nation currency fell against the yen for a second day as the International Monetary Fund yesterday cautioned that a failure of nations to contain soaring public debt might have “severe” consequences for the world economy. The yen may advance against higher-yielding currencies on expectations U.S. President Barack Obama will say today that new financial- industry regulations are needed.
IMF and Bundesbank fear contagion from Greece as bond spreads soar to fresh records By Ambrose Evans-Pritchard - Telegraph.co.uk The International Monetary Fund has warned that Greece’s debt crisis risks spinning out of control, threatening to spill over across the region unless action is taken soon to restore confidence. "In the near term, the main risk is that – if left unchecked – market concerns about sovereign liquidity and solvency in Greece could turn into a full-blown sovereign debt crisis, leading to some contagion," said the Fund in its World Economic Outlook. Bundesbank chief Axel Weber echoed the concerns, saying the financial system was still very fragile and subject to a "significant risk of contagion effects. A possible default by Greece would most likely be a severe economic blow for other countries in monetary union".
V-Shaped Explosion Martin Hutchinson - SilverBearCafe.com Commentators, including the egregious Ben Bernanke, are increasingly claiming that the United States is in the process of a V-shaped recovery from the Great Recession. Certainly first-quarter GDP, to be announced next week, is likely to show a substantial bounce, albeit not quite the inventory-driven 5.6% annualized growth of the fourth quarter. Yet commentators should be careful what they wish for: a V-shaped recovery is likely to lead not to a prolonged period of healthy growth, but to an economic explosion and collapse.
IMF Urges Stronger Chinese Yuan; Japan Might Need More Stimulus By Aki Ito April 22 (Bloomberg) -- The International Monetary Fund said China should let the yuan gain to cool growth, while Japan must be prepared to widen its stimulus measures as Asia’s two biggest economies diverge. Japan, with its “tentative” economic recovery, is an exception in a region that’s leading the global rebound, the IMF’s semiannual World Economic Outlook, released yesterday, showed. The Washington-based lender that offered rescue packages to countries from Iceland to Ukraine during the crisis raised its projections for growth in Asia’s economies for 2010 and 2011.
Wall Street's Bad Dream By ANDREW COCKBURN If only for a moment, things look a little sour for Wall Street. Amid the SEC’s indictment of Goldman-Sachs and consequent reminder to the citizenry of the crookedness rampant in the financial “services” industry, a hitherto loyal ally, Senate Agriculture Committee chair Blanche Lincoln, has proposed legislation requiring major banks to divest themselves of their their vitally lucrative derivatives trading desks. Only at the very end of the senate Democrats’ enormous 1408 page financial reform is there a hefty chunk of solace for the bankers, in the form of Section 1155, a generally unnoticed provision clearly mandating another taxpayer-funded bailout all round the very next time disaster strikes.
The Role of Government Dan Denning - SilverBearCafe.com We're going to paint with a broad brush and say most well-meaning government interventions in public and private life are designed to promote equality of outcome, social justice, or reduce the seeming unfairness and volatility of life in market economy. But have you ever wondered if, in the earnest attempt to eliminate risk in our society (financial, physical, emotional), we're actually make people less safe and society more inherently risky?
Goldman Sachs Not 'Too Big For Jail', House Dems Write Attorney General Ryan Grim - HuffingtonPost.com Democrats in the House are pressing the Justice Department to pursue a full-scale criminal investigation of Goldman Sachs, the bank hit last week with civil fraud charges by the Securities and Exchange Commission. Led by Rep. Marcy Kaptur (D-Ohio), the group is asking more members of Congress to sign on to the letter to Attorney General Eric Holder requesting that "if the DOJ is not currently looking into this particular case, we respectfully ask you to ensure that the U.S. Department of Justice immediately open a case on this matter and investigate it with the full authority and power that your agency holds."
Goldman Sachs in legal crosshairs By Tomoeh Murakami Tse and Zachary A. Goldfarb Washington Post Staff Writer Along with SEC, other investigators and suits may target Goldman Sachs NEW YORK -- As investigators in Massachusetts considered charging Wall Street firms for their role in the financial collapse, they focused on Goldman Sachs because it had bundled and sold the shoddiest of subprime mortgage loans, setting up the housing market for a greater fall by continuing to sell shaky securities even as other banks withdrew. After discussions with the office of state Attorney General Martha Coakley (D), Goldman last year agreed to pay up to $60 million to end that investigation, the first major settlement involving Wall Street's role in the subprime mortgage crisis.
AIG Said to Insure Goldman's Board Against Investor Suits By Hugh Son -- American International Group Inc., the financial firm rescued by the U.S., is the lead insurer of Goldman Sachs Group Inc.’s board against shareholder lawsuits, said a person with knowledge of the policy. AIG is among firms that sold so-called Side A directors and officers’ coverage to the New York-based bank, said the person, who declined to be identified because details of the policy are private. Goldman Sachs was sued last week by the Securities and Exchange Commission, which claimed it misled investors in 2007.
The Multiple Scams of Goldman Sachs By DEAN BAKER Last year, Rolling Stone columnist Matt Taibbi described Goldman Sachs as “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money." It turns out that Mr. Taibbi was far too generous in his assessment of the huge investment bank. Since that time we have learned that Goldman played a central role in helping Greece to hide its government budget deficit from the European Union, the financial markets, and the public at large. Goldman sold complex swaps to Greece in which it paid the Greek government for future revenue streams on items like airport landing fees. This was in effect a loan, but the swap allowed the Greek government to avoid entering the borrowed money on its books as a loan, which would have raised its budget deficit above the euro zone limits. Today of course Greece’s financial meltdown is threatening the stability of the euro.
Lehman fiasco fuels Obama bill debate By Sean Lengell - WashingtonTimes.com Big partisan battle brews again A probe of one of Wall Street's biggest failures has become a proxy battle in the congressional fight that could decide the fate of President Obama's push to overhaul the nation's financial regulatory system. As talks continued on a bid to reach a compromise deal, lawmakers on Tuesday used the investigation into the historic September 2008 bankruptcy of Lehman Brothers to spar over key provisions of the bill, which is shaping up as the biggest partisan clash on Capitol Hill since the passage of Mr. Obama's health care law.
There's a New AIG Story. I Was an AIG Exec. Here's the Deal. Richard (RJ) Eskow - HuffingtonPost.com It's looking like the SEC/Goldman Sachs lawsuit could open up a whole new can of worms -- one that Tim Geithner and some bank executives aren't likely to be very happy about. The story's about AIG and I used to work there so, as much as I like to stay out of the story, a little personal background is in order. We'll do the story first and then get to the personal stuff. The story is this: As almost everyone knows by now, the SEC filed a suit against Goldman over a program called Abacus. The suit alleges that Goldman didn't tell Abacus investors that the bonds they were essentially insuring were being picked by a firm (Paulson) which was betting that they'd fail. Remember that Twilight Zone episode called "To Serve Man," where the aliens promised to help everybody but were really just getting ready to eat them? In this story the investors are the humans and Goldman's execs are the aliens.
Ex-GSE Insiders Debate the Future of Fannie, Freddie By Jerry Ascierto - HOUSING FINANCE NEWS The entire structure of the nation’s housing finance system is up for play as Congress begins its debate on the future of Fannie Mae and Freddie Mac. But the next generation of housing finance will be forged at a time when partisan divides are as deep and heated as at any time in recent history. “The mood on Capitol Hill is one of tension, and sometimes bordering on hysteria, about the GSEs,” said Doug Bibby, president of the National Multi Housing Council, as he kicked off "The Government, the GSEs, and the Future," a keynote session at the 2010 Apartment Finance Today Conference.
Fed paid record $47.4 billion to Treasury in 2009 (Reuters) - The U.S. Federal Reserve said on Wednesday it transferred a record $47.4 billion to the U.S. Treasury in 2009 as a result of its programs to help the economy and financial firms during the financial crisis. The increase in income was primarily due to interest earnings on mortgage-backed securities issued by government supported mortgage finance agencies, the Fed said. Some of the data in the Fed's 2009 annual financial statement revises estimates released in January. The 12 Fed regional banks are required to transfer their profits to the Treasury after paying dividends to member banks and retaining some of their surplus.
Why religion could affect Obama's court nomination By James Oliphant, Los Angeles Times With the exit of John Paul Stevens, the court will be without a Protestant for the first time. Catholics dominate. Does it matter? When Supreme Court Justice John Paul Stevens steps down this summer, he will leave the court — long dominated by Protestants — without one for the first time in its history. That historical oddity has reopened a low-key debate as to whether the religion of a justice matters, and whether President Obama should consider the faith of his next nominee.
Gerald Celente Says This Is Among His Most Important Trends Ever Mac Slavo - SilverBearCafe.com The world's top trend forecaster, Gerald Celente, who has been publishing the Trends Journal since 1991, says his Spring 2010 report is one of the most important Trends he's ever published: "Of all the Trends Journals® I have published since 1991, this issue stands apart. Were I to rank it, I would say it is among the most important. The United States is on a path that, if not diverted, will lead the world into the first "Great War" of the 21st century.
SEC charges Miami schemer in massive Ponzi By Aaron Smith NEW YORK (CNNMoney.com) -- The SEC and the U.S. Attorney's office in New Jersey on Wednesday charged a Miami Beach-based businessman with allegedly running a Ponzi scheme that sucked in close to $1 billion. The Securities and Exchange Commission and U.S. District Attorney Paul Fishman filed fraud charges in New Jersey against Nevin K. Shapiro, founder and president of Capitol Investments USA. Shapiro is accused of fraudulently offering risk-free annual returns as high as 26% to investors in his grocery diverting operation, a type of business where low-cost groceries are purchased in one region and sold for a higher price elsewhere.
New York State May Run Out of Money Before July By Henry Goldman April 21 (Bloomberg) -- New York’s general fund may run out of cash in June and will for the first time in state history end the months of May through August with a negative cash balance, state Comptroller Thomas DiNapoli said. The third-most populous U.S. state ended its past fiscal year on March 31 with $2.3 billion in its general fund after Governor David Paterson delayed disbursing $2.9 billion, mostly in tax refunds and school aid. Because those payments must be made in the first quarter of the current fiscal year, the general fund may run out of money before July, DiNapoli said.
Fed's supersized reverse repos could come by summer Pedro Nicolaci da Costa - Reuters (Reuters) - The Federal Reserve could take a first crack at draining liquidity from the financial system this summer as the economy shows signs of healing, an opening salvo for eventual interest rate hikes that could rattle still-fragile financial markets. The Fed could begin draining bank reserves, via transactions known as reverse repurchase agreements, or repos, in large increments as early as this summer, market analysts say. Importantly, the U.S. central bank could begin repos before it openly abdicates a commitment to keep interest rates low for an "extended period" since, technically speaking, reverse repos do not constitute an actual rate hike.
U.S. Offers a Hand to Those on Eviction’s Edge By PETER S. GOODMAN - NYTimes.com SAN MATEO, Calif. — Two years into a merciless downward spiral, Antonio Moore was threatened with living on the street. He had lost his $75,000-a-year job as a mortgage consultant, his three-bedroom house with a Jacuzzi, his Lexus sedan. He could no longer pay even the rent on his cramped studio apartment — not on his $10-an-hour part-time job as a fry cook at a fast food restaurant. Faced with eviction, he was staring last month at the imminent prospect of joining the teeming ranks of the homeless. His last hope was a new $1.5 billion federal program aimed at preventing that fate.
Oklahoma lawmakers to sue over federal health reform (Reuters) - Leaders of the Oklahoma House and Senate said on Tuesday they plan to file a lawsuit to block President Barack Obama's reform of the U.S. healthcare system. House Speaker Chris Benge and Senate President Pro Tempore Glenn Coffee, both Republicans, said they plan to sue the U.S. Congress, president and U.S. Secretary of Health and Human Services to prevent provisions of the act Obama signed into law last month from taking effect. Their announcement follows the refusal earlier this month of Oklahoma Attorney General Drew Edmondson to join a multi-state lawsuit led by Florida's attorney general. Edmondson, a Democrat, said he would join the lawsuit if required by legislative action.
No job for years and still looking By Chris Isidore NEW YORK (CNNMoney.com) -- John Miller wasn't too nervous when he lost his job in the mortgage industry in June 2008. The worst of the financial crisis was still months away. While the subprime mortgage industry had already imploded, there was still a debate at the time whether a recession had started. Job losses were steady but not dramatic. Miller lost his job when Deutsche Bank shut down a unit making government-guaranteed FHA loans, but he had found work in the past when an employer had closed a unit. He thought that even if it took a few months to find another job, something would turn up.
KB Home’s Bruce Karatz Guilty in Backdating Trial By Edvard Pettersson April 21 (Bloomberg) -- Former KB Home Chief Executive Officer Bruce Karatz was found guilty by a U.S. jury of hiding from auditors and regulators that he backdated stock options. Jurors in federal court in Los Angeles today found Karatz guilty of two counts of mail fraud and two counts of making a false statement. He was acquitted of 16 charges, including mail and wire fraud, securities fraud and filing false proxy statements.
Will others follow Arizona's lead on immigration? By Kristi Keck, CNN (CNN) -- Now that Arizona lawmakers have passed what's considered some of the toughest immigration legislation in the country, other states are watching to see whether they should follow in the state's footsteps or stand back. Arizona's bill orders immigrants to carry their alien registration documents at all times and requires police to question people if there's reason to suspect they're in the United States illegally. It also targets those who hire illegal immigrant day laborers or knowingly transport them.
Savers Get the Shaft Jim Amrhein - SilverBearCafe.com The Bean Counter's Guillotine They think this because I go out of my way to avoid the gaze of cameras on traffic-light posts, highway underpasses, parking garages, airport departure lanes, stores and malls and coffee shops and government offices. They think this because I have three loaded guns in my house, one in every room in which I spend time - bedroom, living room, and office. OK, so I've got one in the bottom of the magazine basket next to the toilet in my master bathroom, too... But it's only a .22 snub-nose. It shouldn't even count. They think I'm a nut-job because I'm aware of how just vulnerable I am in an America where people think the "rule of law" gives them the right to $2 million in damages when they spill hot McDonald's coffee into their crotches - but not the right to their own safety and property under a natural conformity to legal order.
Tata May Beat Hyundai in India Helped by World’s Cheapest Car By Vipin V. Nair -- April 21 (Bloomberg) -- A Tata Motors Ltd. factory opening this month in western India to assemble the $2,500 Nano, the world’s cheapest car, may help the company surpass Hyundai Motor Co. this year as the nation’s second-largest automaker. The plant in Sanand will start producing the Nano by April 30 and make up to 250,000 a year, said Debasis Ray, a spokesman for the Mumbai-based company. That’s about 80 percent of Hyundai’s India sales last fiscal year, based on industry data.
Distrust, Discontent, Anger and Partisan Rancor by Pew Research - LewRockwell.com By almost every conceivable measure Americans are less positive and more critical of government these days. A new Pew Research Center survey finds a perfect storm of conditions associated with distrust of government – a dismal economy, an unhappy public, bitter partisan-based backlash, and epic discontent with Congress and elected officials. Rather than an activist government to deal with the nation's top problems, the public now wants government reformed and growing numbers want its power curtailed. With the exception of greater regulation of major financial institutions, there is less of an appetite for government solutions to the nation's problems – including more government control over the economy – than there was when Barack Obama first took office.
The Slippery Definition of Extremist by James Bovard, Future of Freedom Foundation Americans are once again hearing of the perils of extremism. But the definition of this offense is slipprier than a politician’s campaign promise. The definition of extremism has continually been amended to permit government policies that few sober people previously advocated. Prior to 2000, anyone who asserted that the Census Bureau was deeply involved with the roundup of Japanese-Americans for internment camps in 1942 was considered an extremist. The Census Bureau spent 60 years denying its role but finally admitted its culpability ten years ago after academics uncovered undeniable proof. Regardless of the Census Bureau’s past abuses or perennial deceit, only extremists believe that their answers to this year’s census could ever be used against them.
SOUTHERN POVERTY LAW CENTER PUBLISHES PATRIOT HIT LIST By Chuck Baldwin - NewsWithViews.com -- In a report on its web site dated April 2010, entitled "Meet The Patriots," the Southern Poverty Law Center (SPLC) profiled "36 individuals at the heart of the resurgent [patriot] movement." (In reading the list, I counted only 35 "patriots" and 5 "enablers" for a total of 40. I'm not really sure how the SPLC came up with "36." Perhaps their ability to count is commensurate with their ability to appreciate patriotism and liberty.) The SPLC (founded by Morris Dees) sees itself as America's guardian against "right wing militias" and loves to label conservatives and libertarians that it doesn't like as "extremists." The SPLC is one of the most ultra-liberal organizations in the country and should be dismissed as a group of paranoid leftists, not worthy of thought or mention.
Leftwing extremist 'Southern Poverty Law Center' smears conservatives, patriots Conservative ExaminerAnthony G. Martin -- The Leftwing extremist group called 'The Southern Poverty Law Center' of Montgomery, Alabama has with one stroke of the pen smeared conservatives and Patriots in its new, infamous 'blacklist' it entitles, 'Meet the Patriots.' Among those it includes in the blacklist are some of the most reputable conservative Patriots in America today, such as U.S. Representative Michelle Bachmann (R-MN), federal judge and Fox News legal analyst Andrew Napolitano, U.S. Representative Ron Paul (R-TX), Gun Owners of America (GOA) chief Larry Pratt, Fox News personality Glenn Beck, and U.S. Representative Paul Broun (R-GA), among others.
THANKS SPLC, . . . for listing a few freedom loving Americans who will not be intimidated.
Meet the 'Patriots' Southern Poverty Law Center In the last year and a half, militias and the larger antigovernment "Patriot" movement have exploded, accompanied by the rapid expansion of other sectors of the radical right. This spectacular growth (see timeline) is the result of several factors, including anger over major political, demographic and economic changes in America, along with the popularization of radical ideas and conspiracy theories by ostensibly mainstream politicians and media commentators. Although the resurgence of the so-called Patriots — people who generally believe that the federal government is an evil entity that is engaged in a secret conspiracy to impose martial law, herd those who resist into concentration camps, and force the United States into a socialistic "New World Order" — also has been propelled by people who were key players in the first wave of the Patriot movement in the mid–1990s, there are also a large number of new players. What follows are profiles of 35 individuals at the heart of the resurgent movement:
Heaven Can Wait - Chuck Baldwin, 57
The Repentant Taxman - Joe Banister, 47
Bulldozer vs. Bulldozer - Martin "Red" Beckman, 80
'Needle of Estrogen' - Catherine Bleish, 26
Arguing at Gunpoint - Chris Broughton, 29
The Pricey 'Patriot' - Bob Campbell, 69
Murder: The Fantasy - Robert "Lil Dog" Crooks, 59
Unfair and Unbalanced - Joseph Farah, 55
The FEMA Fabulist - Gary Franchi, 32
The Exaggerator - Al Garza, 64
Of Government and Guillotines - Ted Gunderson, 81
The Unnamed Co-Conspirator - John Hassey, 60
Telling Tall Tales - Alex Jones, 36
The Red-Hot Patriot - Devvy Kidd, 60
Apostle of Disunion - Larry Kilgore, 45
Writing Right - Cliff Kincaid, 55
Swim for Your Life - Mark Koernke, 52
A Sheriff of Their Own - Richard Mack, 57
Facts and Fiction - Jack McLamb, 65
Railing About Reds - John F. McManus, 75
Facing Down the UN - Daniel New, 64
Back in the Saddle - Norm Olson, 63
Out of the Barrel of a Gun - Larry Pratt, 67
Of Cops and Conspiracies - Stewart Rhodes, 44
Correcting the Constitution - Jon Roland, 66
The 'Patriot Journalist' - Luke Rudkowski, 23
Militia Midwife - Robert "Bob" Schulz, 70
The Cautious Conspiracist - Joel Skousen, 63
The Rough Guide - Jim Stachowiak, 49
Running Radical Radio - John Stadtmiller, 56
'Alice in Wonderland' - Orly Taitz, 49
Teed Off in Tulsa - Amanda Teegarden, 54
Gunning for the Government - Mike Vanderboegh, 56
Uncommon Citizen - Paul Venable, 56
Architect of Militias - Edwin Vieira Jr., 66
100% American - Michele Bachmann, 54
Meet the Enablers:
The Ringmaster - Glenn Beck, 46
Doctor of Demonization - Paul Broun, 64
Fox Pox - Andrew Napolitano, 59
'Dr. No' - Ron Paul, 74
Special army unit ready to be deployed on American soil just before Nov. elections April 21, 2010 - Newark Examiner.com In October of this year, one month prior to the November midterm elections, a special army unit known as 'Consequence Management Response Force' will be ready for deployment on American soil if so ordered by the President. The special force, which is the new name being given to the 1st Brigade Combat Team of the 3rd Infantry, has been training at Fort Stewart, Georgia and is composed of 80,000 troops. According to the Army Times, "They may be called upon to help with civil unrest and crowd control or to deal with potentially horrific scenarios such as massive poisoning and chaos in response to a chemical, biological, radiological, nuclear or high-yield explosive, or CBRNE, attack."
Consequence Management Response Force CCMRFs now training on US soil! Marial Law NorthCOM
Perot: Time will show impact of tea party effort By JOHN MILBURN - The Associated Press KANSAS CITY, Mo. -- Texas billionaire Ross Perot said Tuesday that the national tea party movement seems to be doing well but that time will tell how it will affect the country, government and November elections. The former Reform Party presidential candidate also said he wouldn't be offering the group advice anytime soon. "In a free society, you're entitled to do whatever you want to do. Time will tell how effective it is," Perot told reporters in Kansas City on Tuesday, where he was receiving a leadership award from the Army's Command and General Staff College Foundation. "Just as a layman looking at it from afar, it seems to me they are pretty well organized and getting the crowd."
Allen West speaks about Islam
Allen West: Define the Enemy: What it takes to win in Afghanistan
America’s Economic Recovery Is a Rotten Sham By: Justice Litle - MarketOracle.co.uk More evidence has arisen that the "strategic default" consumer spending thesis is correct - and that the economic recovery on the whole is based on a rotten sham. The economic "recovery" we are now witnessing is based on theft, greed and deceit. It's a giant rip-off, a rotten sham. In this sleazy imitation of a free market economy, liars, cheats and deadbeats are the ones getting rewarded. And as for the savers, the hard workers, the ones who chose to honor their debts and live within their means? Nothing but a bunch of suckers. (They're the ones paying for it all.) If you're one of those "suckers," at least you've got company. I'm a sucker too. All this time, I thought working hard for my money and staying debt free was wise. I thought sticking with one credit card - paying down the balance every month, no exceptions - was prudent. I thought driving a five-year-old car - fully paid off, nothing flashy - was a sensible thing to do.
A Few Reasons Explaining the Jobless Recovery By Rocky Vega - DailyReckoning.com 04/20/10 Stockholm, Sweden – US economists would like us to believe that the recession is over. However, unemployment has been reluctant to go along with the farce, and has remained at newly high natural levels of 9.7 percent despite reports of solid growth last quarter. How could that be? Basic economics theory would argue that an employee is hired for a wage that is roughly equal to the value he or she adds to the company’s output. This would mean that workers should get hired now that the US is back to growth. In the face of the discrepancy, economists would describe that such a monster as an aggregate demand (AD) shock is responsible for the difference, but can that really explain it all?
Hyper, Stag or De-Flation? Paul Krugman is wrong. . . .The major, world threatening “flation” problems are not likely to destroy us with Stagflation or Hyperflation and are only tangentially related to simple Deflation as measured by the GDP deflator. They are much worse. Krugman spends a lot of blogging time trying to debunk hyperinflation, an event which even its supporters claim is years in the future. Krugman has been caught by what salesmen call the “Fool’s Choice” where a question is framed so that the real issue is excluded and discussion is in choices favorable to his opponents.
Gold Recovers as Markets Mull Recent Events Gold went up to $1,137/oz before dipping slightly in New York yesterday, but it then recovered, ending with a loss of 0.06%. It has risen from $1,135/oz to $1,142/oz in Asian and early European trading this morning. Gold is currently trading at $1,142/oz and, in euro and GBP terms, is trading at €847/oz and £742/oz, respectively. Gold has recovered much of the losses from Friday and gold's fall was as much to do with dollar strength and oil weakness last week as it was to do with the Goldman Sachs (GS) allegations. Indeed, gold has already recovered much of the losses from Friday especially in euro and sterling terms.
Gold may cash in on volcanic ash By Geena Paul LONDON (Commodity Online): A fuming volcano is holding the entire economy of Europe and several other nations to ransom as the world is pondering over the economic impact of this aerial attack for the past one week. For those who are not in the grip of things, the Eyjafjallajokull volcano in Iceland is wreaking havoc with European air traffic by spewing lava and ash into the air. The volcano is sputtering and bubbling and will probably create a cone formation as the lava spills over and freezes into rock. So, the world is in the grip of an ash cloud now and economic pundits are busy calculating how this volcanic disruption will impact the economies of several nations.
Dollar, Gold and Silver By: Sol Palha - SafeHaven.com "A man who has committed a mistake and doesn't correct it is committing another mistake." - Confucius, BC 551-479, Chinese Ethical Teacher, Philosopher The dollar as expected has mounted a very strong rally, and it just missed its target of closing above 82 on a monthly basis by a few points. It did, however close above 81 on a monthly basis which indicates that it is going to trade higher before a top is in place. As long as it does not close below 78.00 on a weekly basis, the odds of it trading to the 85-86 ranges are rather high. If it manages to close above 82 on a monthly basis, it would move the final targets to the 90-92 ranges. While a lot of noise is being made about the Aid package that the EU members have in place for Greece, the Euro is still not out of the red zone as many members are still facing huge budget shortfalls. Potentially Spain, Portugal or Italy could find themselves in the same place Greece is now in.
Oil and dollar can create a big spark in gold prices By Jon Nadler -CommodityOnline.com Portions of the Icelandic ash cloud and dissipated along with some portion of the concerns about the fate of Greece’s debt overnight. Thus, risk-taking (in the air as well as on market floors) became manifest once again and attempts were made to get back to business as usual. Whatever ‘usual’ has come to mean lately, that is. While a new ash cloud was already looming in the skies near Europe, the Goldman legal cloud appeared to have very little chance of having a successor of its own.
Explaining Gold Price Fluctuations BY STEVE SAVILLE - GreenFaucet.com Most mainstream financial journalists try to link the daily market action with the news of the day, as if the markets did nothing other than react to news. In general terms, they make the assumption that if a market fluctuation coincided with or followed a news event, then the news event must have caused the market fluctuation. Due to this modus operandi, it is not uncommon for journalists to cite the same event when attempting to explain a price rise one day and a price decline the next. For example, if the stock market rises one day and then falls the next, and at the same time there is news of a Greece bailout, it would be typical for the press to link both the rise and the fall to the bailout news.
GOP resists finance bill push By Patrice Hill - WashingtonTimes.com Geithner offers modifications The Senate's 41 Republicans held firm Monday against White House attempts to peel off one vote and ram through a partisan financial reform bill in a Senate floor vote expected at the end of the week. Treasury Secretary Timothy F. Geithner in recent days has met with a string of moderate Republicans to see whether any modifications in the bill could win their votes, but Republican legislators have emerged from the meetings saying they want the Democrats to go back to negotiating with Senate banking committee Republicans to come up with a bipartisan bill. Financial reform legislation traditionally has been bipartisan in both houses of Congress. "I am very optimistic that, given more time and the kind of discussion that I just had with the secretary of the Treasury, that we can put together a bipartisan bill that will deal effectively with the 'too big to fail' phenomenon," said Sen. Susan Collins of Maine, the latest to meet with Mr. Geithner.
Bankruptcy Reform Will Limit Bailouts By THOMAS JACKSON AND DAVID SKEEL - WSJ.com If Bear Stearns or AIG had been able to keep their derivatives creditors at bay, there would have been much less justification for a taxpayer rescue. The volcanic language coming out of Washington suggests there are only two choices with financial reform: Cram down Sen. Chris Dodd's bill over Republican opposition, or stop the bill in its tracks. But there is a third option that would address both sides' concerns by linking bankruptcy reform to the proposed framework for regulating derivatives. Derivative contracts are largely unregulated today, in part because both parties to most of the contracts are banks and other large financial institutions that were thought to be well able to protect themselves. Both the Dodd bill and the companion legislation that Sen. Blanche Lincoln (D., Ark.) has introduced in the Agriculture Committee would subject derivatives to two related kinds of regulation.
Does Wall Street control the government? Ezra Klein - WashingtonPost.com Tyler Cowen offers some interesting thoughts on whether the financial sector dominates the U.S. government: Perhaps the strongest piece of evidence for the financial sector dominance of U.S. political economy is the recent bailouts. Yet it's instructive to ask which other groups have received bailouts in the last fifteen years. The list would include Mexico and the numerous countries which have borrowed from the largely U.S.-created International Monetary Fund, such as Indonesia. They are hardly dominant forces of influence in Washington. It was China who made out like a bandit from the bailout of the mortgage agencies, and the validation of their debt issues, but again the Chinese are not in charge.
Are there more Cockroaches in the Kitchen by Hans Wagner - FinancialSense.com If you have you ever seen a cockroach in the kitchen, you know there are more that what you see. The same concept applies to improper financial activity by companies. When you find one bad action, you will more than likely find others. The Securities Exchange Commission (SEC) is suing Goldman Sachs for failure to disclose “vital information” regarding a synthetic collateralized debt obligation, named Abacus 2007-ACI. The SEC accuses Goldman of creating the sub-prime residential mortgage-backed securities portfolio and then selling it to investors, knowing that the security was filled with mortgages that were likely to fail causing the value of the package to fall. The SEC press release and complaint make for some interesting reading.
Surprise: Goldman Sachs to pay out $5 billion more in bonuses for first three months of 2010 By John Byrne - RawStory.com -- As if to put the icing on the cake, the investment bank Goldman Sachs is set to shell out another $5 billion in bonuses to employees. What's more, the bonuses are expected to cover the employees' work for just the first three months of the year, according to the UK Sunday Times. According to the report, bankers will receive remuneration of about $170,000 per person for the firm's 32,500 employees. Some traders are set to receive millions.
Dylan Ratigan Puppet Show Helps Explain Financial Crisis
SEC gambles with Goldman suit By Zachary A. Goldfarb and Tomoeh Murakami Tse Washington Post Staff Writer SEC sued Goldman Sachs to break an impasse For months, Goldman Sachs and the Securities and Exchange Commission had been involved in secret talks over allegations that the Wall Street bank defrauded customers in selling them investments designed to fail. Then, after a crucial meeting last month between lawyers for Goldman and the SEC, the agency came to a fork in the road. Even after SEC lawyers had told Goldman in writing they were prepared to file a federal suit, the firm gave no ground, declining to ask for a settlement, according to three people familiar with the case. The agency could prolong negotiations in hopes of reaching a deal Goldman would accept, as the SEC had often done in previous cases, or take the bank to court.
Schwab Settles Suit Over Mortgage-Backed Securities By THE ASSOCIATED PRESS - NYTimes.com SAN FRANCISCO (AP) - Charles Schwab will pay $200 million to resolve a federal class-action lawsuit filed by investors who say the financial holding company misled them over the safety of mortgage-backed securities. If approved by the court, the settlement announced Tuesday will result in a retroactive charge that would nearly eliminate the first-quarter profit that Schwab posted last week.
Goldman Sachs taps ex-White House counsel By EAMON JAVERS & MIKE ALLEN - Politico.com Goldman Sachs is launching an aggressive response to its political and legal challenges with an unlikely ally at its side - President Barack Obama's former White House counsel, Gregory Craig. The beleaguered Wall Street bank hired Craig - now in private practice at Skadden, Arps, Slate, Meagher & Flom - in recent weeks to help in navigate the halls of power in Washington, a source familiar with the firm told POLITICO. "He is clearly an attorney of eminence and has a deep understanding of the legal process and the world of Washington," the source said. "And those are important worlds for everybody in finance right now." They're particularly important for Goldman.
Goldman Sachs fraud charges 'just the tip of the iceberg' By Andrew McLemore - RawStory.com Charges of fraud brought against banking titan Goldman Sachs by the Securities and Exchange Commission rocked financial markets Friday, but experts say the allegations are merely the first of many to come, Reuters reported. After the SEC went public with the allegations, the Dow Jones dropped 125 points and Goldman Sachs stocks dropped 13 percent - the largest one-day drop in company history.
AIG vs. Goldman: Insurer May Match SEC's Fraud Suit Against Bank By PETER COHAN - DailyFinance.com -- You may recall that back in the good old days, American International Group (AIG) paid Goldman Sachs (GS) $12.9 billion of taxpayer money in a 100-cents-on-the-dollar settlement of credit default swaps that AIG had written. Now, according to a report in the Financial Times, AIG is hoping to piggyback on the SEC's fraud case against Goldman to get $2 billion back from the investment bank. Missing from the article is any evidence that AIG has a case for charging Goldman with fraud, but its willingness to fight for money in court is a sign that the old AIG is back. According to the Financial Times, AIG may sue Goldman -- whose earnings rose 91% to nearly $3.5 billion in the first quarter -- for $2 billion in losses it took insuring $6 billion worth of Goldman deals involving collateralized debt obligations similar to the ones in the Abacus family, over which the SEC is suing the investment bank.
Rivals say Goldman customers are taking a back seat By Steven Mufson and Tomoeh Murakami Tse Washington Post Staff Writer One former hedge fund manager said that when he read the headline about Goldman Sachs being charged with fraud he thought, "It's about time." But when he read the details of the case, he said he thought, "That's it?" Among many financial executives, there is little love lost for the powerful Goldman Sachs, which has been at the center of controversy over such things as bundling subprime mortgages, trading oil futures, and engineering Greek currency transactions. Although the positions taken by Goldman's own trading desk aren't public, many rival traders and fund managers say Goldman frequently bets against the very securities it is promoting to customers.
America on the verge of bailing out Greece By Mark Jurkevich - WashingtonTimes.com Nancy and Barack go into debt to solve Europe's problem When the president and the speaker of the House recently reached into taxpayer pockets for a trillion-dollar wealth-redistribution exercise under the guise of containing our health care costs, at least the recipients were, by and large, fellow Americans. As an encore, within the next month, billions of U.S. tax dollars will be spent plugging budget holes within the European Union's core eurozone. Evidently with Nancy and Barack's blessing. I am, of course, writing about the International Monetary Fund's (IMF) recent commitment to participate in the inevitable bailout of Greek national debt. The initial tab is $50 billion, and consensus is that this is just for triage and the patient ultimately will require much more. With the United States having the largest IMF quota, it is the largest donor country. While this unfolding story is getting daily media attention in Europe, including heads of state speaking out, President Obama and Speaker Nancy Pelosi seem to have decided just to let it happen. Except for specialty financial media, it seems as if the media also is giving a free pass to this story.
IMF Advises G-20 Nations to Tax Financial Firms By BOB DAVIS - WSJ.com WASHINGTON—The International Monetary Fund advised Group-of-20 nations to tax balance sheets, profits and compensation of financial institutions to reduce the chances of another financial crisis, and pay for the costs if one occurs. "Expecting taxpayers to support the [financial] sector during bad times while allowing owners, managers and/or creditors of financial institutions to enjoy the gains of good times misallocates resources and undermines long-term growth," the IMF wrote in a briefing paper for the G-20 industrialized and developing countries.
IMF: Mounting debt threatens global recovery By Howard Schneider - Washington Post Historic levels of government debt in the developed world could throw the global financial system back into crisis and clear plans are needed to bring it under control, the International Monetary Fund said Tuesday. In one of its first broad surveys since the recent recession gave way to renewed growth, the agency said that "sovereign risk" -- the chance that sovereign nations have racked up so much debt they won't be able to borrow enough money to pay their bills -- is now perhaps the central threat to the global financial system.
IMF's misdeeds unforgiven and unforgotten in Asia EarthTimes.org Bangkok - The Internal Monetary Fund (IMF) may be enjoying increased popularity as a financial saviour in Eastern Europe and, perhaps, even Greece, but in Asia the institution remains a pariah. The IMF was the key player in handling the Asian financial crisis that started in Bangkok in July 1997. That downturn quickly threw the region into a deep recession, wiping out foreign exchange reserves, depreciating currencies and causing a wave of bankruptcies and a slowdown in economic and social development. Back then, the IMF was a tough taskmaster, and set strict conditions for its bail-out funds to hard-hit countries such as Indonesia, the Philippines, South Korea and Thailand.
Short-Term Greek Debt Sale Succeeds By DAVID JOLLY - NYTimes.com PARIS - Greece easily sold a block of three-month bonds Tuesday, and at a lower interest rate than many forecasts. But its long-term prospects worsened amid skepticism that the country can pull itself out of a financial hole without drawing on aid from the European Union and International Monetary Fund. The Public Debt Management Agency said in a statement that it had sold €1.95 billion, or $2.6 billion, of 13-week Treasury bills. It said demand for the bills exceeded the supply on offer by 4.6 times, showing healthy demand.
Germany warns of 'Lehman' crisis if Greece defaults By Ambrose Evans-Pritchard - Telegraph.co.uk German finance minister Wolfgang Schauble has pleaded with his country's citizens to back a joint EU-IMF bail out for Greece worth up to €45bn (£40bn), warning that failure to act risks a financial meltdown. "We cannot allow the bankruptcy of a euro member state like Greece to turn into a second Lehman Brothers," he told Der Spiegel. "Greece's debts are all in euros, but it isn't clear who holds how much of those debts. The consequences of a national bankruptcy would be incalculable. Greece is just as systemically important as a major bank," he said. Mr Schauble said Berlin had scant room for manoeuvre over the bail-out given a likely court challenge by German professors but promised to "abide by the constitution".
Soros: Greece Faces 'Death Circle' of High Loan Rates MoneyNews.com Greece needs help to beat its crisis and there is a risk it will fall into a "death circle" of recession and falling budget revenue if its borrowing costs stay high, financier George Soros told Greek Skai TV on Monday. Athens hopes to begin talks with European and International Monetary Fund officials on Wednesday on a policy program that investors are increasingly convinced will lead the debt-ridden country to tap what would be the biggest bailout ever attempted. Soros said the spike in Greek bond spreads — the premium investors pay to buy Greek debt instead of equivalent German bonds which hit a euro lifetime high on Monday — was caused in part by market speculation.
Marc Faber on American oil companies
Is volcanic ash the new swine flu? By Gerald Warner - Telegraph.co.uk Is volcanic ash the new swine flu? That is not a rhetorical question: along with the rest of the public, I honestly haven't a clue. Are either self-interested or self-empowering jobsworths creating a panic where there is no threat? Or, spurred on by desperate airlines haemorrhaging income, would it be crassly irresponsible to allow families to embark on aircraft which might be downed by ash damaging their engines, with catastrophic consequences? We do not know. And the reason why we do not know is more important than the dilemma to fly or not to fly, more important even than the paralysis of international travel, the £500m already lost to the British economy and the plight of Britons stranded abroad. We do not know because we can no longer trust the sources from which we would normally expect to receive authoritative information. There is a complete breakdown in confidence between the public and the politico-scientific establishment.
Rahm wants to be mayor of Chicago WashingtonPost.com Rahm Emanuel's next (political) step From almost the moment he took the job as chief of staff to President Barack Obama, Rahm Emanuel has made clear that he wants to return to public office in the not-to-distant future. Emanuel, who left his Chicago-area congressional seat and his leadership position in the House to serve as Obama's chief adviser, went public with those intentions during an interview with PBS' Charlie Rose on Monday. "I hope Mayor Daley seeks re-election," Emanuel told Rose. "I will work and support him if he seeks reelection. But if Mayor Daley doesn't, one day I would like to run for mayor of the city of Chicago."
Rahm Emanuel: Media 'exacerbating' anger By ANDY BARR - Politico.com White House chief of staff Rahm Emanuel on Monday night said the media are partially responsible for the nasty rhetoric that is dominating political discourse. Emanuel said during an interview with PBS's Charlie Rose that "everybody's accountable … including the media" for the overheated language that was used during the health care debate and beyond. "They play a role in exacerbating the sense that America's pulled apart, and it's not as pulled apart as being reported," he said.
Pew poll: 4 out of 5 Americans don't trust Washington WASHINGTON (AP) - The 19th Century American statesman Henry Clay called government "the great trust." But most Americans today have little faith in their government's ability to deal with the nation's problems. For Americans, public confidence in government is at one of the lowest points in a half century, according to a survey from the Pew Research Center. Nearly 8 in 10 people in the country say they don't trust the federal government and have little faith it can solve America's ills, the survey found.
Professor Warren Debunks A Few Healthcare Myths
School Districts Warn of Even Deeper Teacher Cuts By TAMAR LEWIN and SAM DILLON - NYTimes.com School districts around the country, forced to resort to drastic money-saving measures, are warning hundreds of thousands of teachers that their jobs may be eliminated in June. The districts have no choice, they say, because their usual sources of revenue - state money and local property taxes - have been hit hard by the recession. In addition, federal stimulus money earmarked for education has been mostly used up this year. As a result, the 2010-11 school term is shaping up as one of the most austere in the last half century. In addition to teacher layoffs, districts are planning to close schools, cut programs, enlarge class sizes and shorten the school day, week or year to save money.
Envoy had business ties to Pelosi's hubby By Chuck Neubauer - WashingtonTimes.com Critics say speaker should have told of link House Speaker Nancy Pelosi, the most powerful woman in Congress, proudly sang the praises of her longtime friend and major Democratic donor Eleni Tsakopoulos-Kounalakis during the California real estate developer's confirmation hearing in November as U.S. ambassador to Hungary. "My husband and I are here as friends of the family and admirers of the Tsakopoulos-Kounalakis family," she told the Senate Foreign Relations Committee at the Nov. 18 hearing. "I salute her for her patriotism and for all that she will bring to this position."
Obama's jobless crisis By THE WASHINGTON TIMES The administration created the worst labor market since the Depression Forty-four percent of America's unemployed have been jobless for more than six months. That's the highest rate since the Great Depression. The previous high was 26 percent in June 1983. No matter what the White House says, an economic recovery has not arrived. On Friday, President Obama signed a new law to maintain unemployment insurance benefits for the chronically unemployed for up to 95 or 99 weeks. Eligibility for 99 weeks applies when a state's unemployment rate is more than 8.5 percent. That's almost two whole years, which represents a huge increase compared to the maximum 26 weeks that were available as recently as June 2008. For perspective, between 1954 and 2007, the national average maximum duration for unemployment insurance ranged from a low of 22.8 weeks in 1954 to a high of 27.2 weeks during most of the 1970s.
NACA's Bruce Marks: Quirky Populist Lights the Fuse of Homeowners' Rage By BRUCE WATSON - DailyFinance.com As Tea Party protests grabbed headlines last week, another angry group found itself fighting for attention. The Neighborhood Assistance Corporation of America (NACA) took its case to the Capitol, where some of its members disrupted a congressional committee hearing, surprised a bank executive, and dramatized the problems faced by many "underwater" homeowners.
U.S. Housing Program Fails to Stem Foreclosures By Lorraine Woellert April 20 (Bloomberg) -- The U.S. Treasury Department’s efforts to help troubled homeowners are ineffective, as foreclosures continue to rise and aid fails to reach all those who need it, a watchdog said. The Treasury’s Home Affordable Modification Program, or HAMP, “has made very little progress in stemming this onslaught,” with 230,000 mortgage loans permanently modified in a year, according to the report by Neil Barofsky, special inspector general for the Troubled Asset Relief Program.
Arizona Sheriff Says Cops Are Being Killed by Illegal Aliens; Joins Call for U.S. Troops at Border By Penny Starr, Senior Staff Writer (CNSNews.com) - Law enforcement officials from the Arizona counties hardest hit by illegal immigration say they want U.S. troops to help secure the border, to prevent the deaths of more officers at the hands of criminals who enter the country illegally. "We've had numerous officers that have been killed by illegal immigrants in Arizona," Pinal County Sheriff Paul Babeu said Monday at a Capitol Hill news conference. "And that shouldn't happen one time."
Iceland volcano could force BMW assembly lines here to grind to a halt BY RUDOLPH BELL - GreenviilleOnline.com A volcano in Iceland has slowed BMW's assembly line, and if its impact lingers, it could affect Upstate workers' pay checks The volcano's ash cloud that brought trans-Atlantic flights to a near standstill also has disrupted the supply chain at BMW Manufacturing Co. The automaker is days away from running out of parts, and some of its suppliers are in the same bind A work stoppage would shrink the incomes of thousands of Upstate families. BMW said cargo flights it was using to transport transmissions and other parts to its sole U.S. plant near Greer were among those grounded by the ash cloud.
Ten American cities caught in free fall By Francesca Levy - Forbes Economic indicators in these metros have gone from bad to worse Miami boasts a popular South Beach club scene, Art Deco Architecture, and perhaps the best Cuban food in the country. But residents don't have much else to celebrate. More than three years after the economy started its downward slide, the Miami metro area, like a handful of Sun Belt cities, still hasn't begun to recover. Median home prices in Miami have fallen 38 percent since its market peaked in the second quarter of 2007; the city's 11 percent unemployment rate is above the national average and has grown more than most of the 40 cities we surveyed.
Prof. Elizabeth Warren & Bill Maher The Usury States of America (UNDERSTANDING NWO ECONOMICS)
FDA plans to limit amount of salt allowed in processed foods for health reasons By Lyndsey Layton - Washington Post Staff Writer -- The Food and Drug Administration is planning an unprecedented effort to gradually reduce the salt consumed each day by Americans, saying that less sodium in everything from soup to nuts would prevent thousands of deaths from hypertension and heart disease. The initiative, to be launched this year, would eventually lead to the first legal limits on the amount of salt allowed in food products. The government intends to work with the food industry and health experts to reduce sodium gradually over a period of years to adjust the American palate to a less salty diet, according to FDA sources, who spoke on condition of anonymity because the initiative had not been formally announced.
Water company defends Anthem rate hike as 'just, reasonable' by Betty Reid - The Arizona Republic An attorney for the water company seeking an increase in water and sewer rates in Anthem defended the request Monday as "just and reasonable rates." Thomas H. Campbell appeared before Administrative Law Judge Teena Wolfe on Monday at the Arizona Corporation Commission hearing room at 1200 W. Washington St. The hearing was part of Arizona American Water's application to double the cost of sewer and water services to 8,300 Anthem residents who live in the unincorporated area of Maricopa County. The water company also serves Anthem's 250 commercial businesses. Anthem residential homes with ?-inch meters pay an average $85 a month for water and sewer. If Wolfe and the commission members approve the increases as is, those Anthem residents will pay $78 per month more for water and sewer.
Gov't regulators call on Google to respect users' privacy By Peter Sayer - computerworld.com IDG News Service - Ten government regulators responsible for protecting the private information of their countries' citizens have sent an open letter to Google calling on the company to respect national laws on privacy. The regulators say the letter is also intended for other companies offering services over the Internet, but the version published is addressed to Google CEO Eric Schmidt and takes particular issue with the roll out of the company's Buzz social networking service. Buzz came in for criticism for the way it revealed users' most-mailed contacts in a public feed, without warning them this would happen. Google later modified the service's behavior, but that wasn't enough to satisfy the privacy commissioners.
Google Discloses Government Demands for User Data By JESSICA E. VASCELLARO - WSJ.com Google Inc. moved to highlight the issue of government censorship and demands for information about Web users, just as the Internet company came under fire from a group of government officials over the way it handles user privacy. The Silicon Valley giant Tuesday disclosed for the first time the number of requests it has received from government agencies for data about its users. Google also disclosed how many government requests it gets to remove content from its search engine, YouTube video site, Blogger blogging software and other services.
Ten Countries Ask Google to Do More to Protect Privacy By JESSICA E. VASCELLARO - WSJ.com Privacy officials from 10 countries Monday sent Google Inc. a letter demanding that the Internet giant build more privacy protections into its services, the latest sign of increasingly international anxiety over Google's power. The letter, reviewed by the Wall Street Journal, was signed by officials in Canada, France, Germany, Ireland, Israel, Italy, the Netherlands, New Zealand, Spain and the United Kingdom. The signatories could not be reached for comment.
Tom Cole to Bill Clinton: Don't 'cheapen' Oklahoma City By ANDY BARR - Politico.com Rep. Tom Cole (R-Okla.) is warning former President Bill Clinton to not "cheapen" the memory of the Oklahoma City bombing by comparing the anti-government sentiment that fueled it to the anti-Washington anger that drives the tea party movement. In the lead-up to Monday's 15th anniversary of the bombing, Clinton frequently drew parallels between the two periods and warned that extreme rhetoric sometimes encourages violent action. Cole took exception to Clinton's comments in an e-mail to POLITICO and cautioned the former president against invoking the memory of the bombing to move the ball in political debate.
There Bill Clinton goes again By Tony Blankley - WashingtonTimes.com Beware the unforeseen consequences of charging sedition Former President Bill Clinton last week inadvertently demonstrated Karl Marx's shrewd observation, "History repeats itself, first as tragedy, second as farce." The historical event in question is the attempt to deter by smearing a broad-based, popular, American anti-high-tax, anti-big-central government movement as likely to induce seditious violence against the government. The historic example of this calumny was Alexander Hamilton's slander against Thomas Jefferson and James Madison's emerging Republican/Democratic Party. The first repetition, as tragedy, was Bill Clinton's attack on the Republican Contract With America rhetoric following the Oklahoma bombing in 1995 - which resulted in deflecting the upward progress of conservatism from the summer of 1995 onward.
The Violence Card Bill Clinton plays politics with Timothy McVeigh. Liberal Democrats and their friends in the media have tried just about everything to dismiss and discredit the tea-party movement. They've accused Americans who are anxious and angry about a rapidly encroaching government of being racists, extremists, birthers, pawns of a corporate "AstroTurf" effort—and, now, potential Timothy McVeighs. No less a figure than Bill Clinton seized on the occasion of the Oklahoma City bombing's 15th anniversary to lecture tea-party activists, first in a speech last week to the Center for American Progress Action Fund, then in a Monday New York Times op-ed. "Have at it, go fight, go do whatever you want," he said in the speech. "You don't have to be nice; you can be harsh. But you've got to be very careful not to advocate violence or cross the line." In the op-ed, he wrote: "There is a big difference between criticizing a policy or a politician and demonizing the government."
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Tues 04.20.2010
Get Ready, Inflation Is On The Way Giordano Bruno - SilverBearCafe.com In the professional financial world, the term "inflation" has many inferences, consequences, supposed benefits, and definitions. One Wall Street economist may have an entirely different interpretation of the word than another Wall Street economist working in the same building. This lack of a common orientation to the issue creates serious confusion for the everyday investor and the average American only looking for the fundamentals, so that they may better protect their livelihood. In fact, it is not unusual to see two financial analysts discussing inflation in the MSM, only to completely fumble over each other because they do not share a mutual idea of what it actually means.
Gold Hits All-Time Record High in Euros and Pounds By Rocky Vega - The DailyReckoning.com 04/19/10 Stockholm, Sweden – While the value of gold is still about five percent below its record high in dollars, it’s reached an all-time high in both euros and British pounds, at €865 and £754 respectively, partly due to the current weakness of those currencies relative to the US dollar. According to the Telegraph: “Gold is seen as a safe haven investment but, because it is priced in dollars, investors in countries other than America are exposed to currency risk. “For example, British gold investors saw the value of their holdings fall by 10pc in the six months to August 2009 as the pound recovered strongly against the dollar – even though gold in dollar terms appreciated by 2.2pc over the period.
Gold prices to soar on Goldman Sachs crisis By Geena Paul LONDON (Commodity Online): At a time when the paper gold scam was about to rock the bullion boat, like a godsend came the Goldman Sachs crisis which is all set to ensure that gold prices will gain out of it. After the market recovers from the initial shock, which has hit even equity markets because of the huge reach Goldman Sachs has in the global market, gold is all set to soar riding this crisis also. Gold traditionally loves to cash in on crises. When the world was under the grip of recession, gold made the maximum profit. Then came various problems which dogged the equity market across world.
This Gold Bullion Index Comes With a Twist by W. Lorimer Wilson - FinancialSense.com . . . . The Relationship Between the USD’s Strength/Weakness and the Price of Gold When the USD gets stronger, it takes fewer dollars to buy any commodity that is priced in $USD. When the USD gets weaker it takes more dollars to purchase the same commodity. The price of all USD denominated commodities, like gold, will change to reflect the fact that it will take fewer or more dollars to buy that commodity. As such, it’s almost always the case that a portion of the change in the price of gold is really just a reflection of a change in the value of the USD. Sometimes that portion is insignificant but often the opposite is true where the entire change in the gold price is simply a mathematical recalculation of an ever-changing USD value.
GOLD THOUGHTS by Ned W. Schmidt - FinancialSense.com One needs only read the story of Goldman Sachs’ creation of CDOs of dubious value to sell to one client while allowing another to short them to understand why Gold has existed as an investment down through the ages. We cannot think of one story of kings in times long past that accepted CDOs as payment for taxes. We now know why they usually demanded Gold, or other needed commodities. Actually, the buyers of this dubious paper should not be suing Goldman Sachs. They should be suing the universities from which they received their MBAs. The value of that education may be in question. How could educated investment professionals purchase for their clients paper assets of questionable value based simply on the advice of a firm’s traders and sales people?
Ron Paul: The SEC is a Total Failure and Part of the Problem
NIA:IMF SDRs are inflationary, buy silver-gold now Commodity Online The International Monetary Fund (IMF) has issued new Special Drawing Rights worth approximately $300 bn which shows that inflation is a major problem the worldover, according to National Inflation Association (NIA). Perhaps, this is the right time to buy gold and silver. NIA said that SDR's may not become the new world reserve currency. In a set of 10 questions and answers on precious metals, inflation and crude oil, it addresses key issues of interest to US and global investors.
Owning Gold and Silver: The Unsafe Method By The Mogambo Guru - DailyReckoning.com 04/19/10 Tampa, Florida – Thanks to Bill Murphy and the Gold Anti-Trust Action (GATA) committee, the slimy, market-manipulating goings-on in the short-selling of gold futures and silver futures to suppress their prices at the CFTC have pretty well been exposed, and about time, too. Tyler Durden at zerohedge.com calls it “one of the largest frauds in commodity markets history”, to which I can only add “I can’t think of one bigger!” although I admit that I am not up-to-speed on the history of frauds in the commodities markets, nor am I up-to-speed on anything, now that I mention it, which probably explains why I am such a failure, but which is another sad story for another time.
Gold – Investment demand poised to jump? by Julian D.W. Phillips - FinancialSense.com We were right in believing that the € and gold will and are de-coupling. But far more than that is happening in the gold markets of the world. But the process is an ebb and flow process, with this week seeing gold move with the € and last week moving independently of both. What is becoming clearer and clearer to investors is the gold price should not move with the € or with any other currency, as there are few common denominators between gold and currencies. The erosion of confidence in currencies is far more pertinent to the gold price. Along that line of thought a look over the last year and more is relevant to the future of gold.
Silver/Gold Ratio Reversion 3 Adam Hamilton - SilverBearCafe.com Silver's recent rallying action is starting to catch traders' attention. Since the end of its latest correction in early February, this white metal has surged 23% higher. It has well outperformed gold, which only climbed 9% over this same 9-week span. And based on silver's strong historical relationship with gold, odds are today's silver rally is only beginning. Silver's gains should accelerate in the months ahead.
Precious Metals Slow Motion Lottery Ticket by Captain Hook - FinanacialSense.com Is there a precious metals mania on deck directly ahead or will another deflation scare, which could curb demand for gold and silver, bail out the bureaucracy yet again. Indeed the bureaucracy seems to have nine lives in this regard, with gold and silver still trading at half their respective inflation adjusted values running all the way back to 1980. Of course there is a different way of viewing this, where the bureaucracy’s level of desperation to maintain the party atmosphere an unbridled fiat currency monetary system will sponsor can be measured by the London OTC Metals Exchange (LBMA) running paper promises to physical ratios at 100:1, which to a conservative mind is the definition of insanity. Because you see this means the entire economy is a ‘house of cards’, which is in fact the reality of the situation, a suicide mission courtesy of an emboldened bureaucracy riding high on gold’s back all these years.
There is good reason to question JP Morgan’s concentrated short position in COMEX silver futures, and to investigate the allegations that JPM used it to manipulate the silver market.
GATA has failed miserably in handling this matter, and has focused its attention on nonsensical and unproven conspiracy allegations pertaining to the London gold market (outside CFTC’s jurisdiction) when it has in hand very compelling evidence that is directly material to the still-pending CFTC investigation GATA should be the focus of their attention on the business at hand.
Jeffrey Christian’s testimony at the CFTC Hearing has been taken completely out of context.
Despite the best efforts of some responsible journalists including Jim Puplava, others including Tyler Durden (ZeroHedge) and Eric King (King World News) have contributed to the misinformation campaign by promulgating GATA’s baseless allegations. . . .
Roubini Discusses Fed Monetary Policy, U.S. Economy
The Policies of Insolvency By: Ty Andros - GoldSeek.com The global financial maelstrom continues to unfold as public serpents, central banks and crony capitalists continue to pour gas on the fires. It is set to continue. The collapse of FIAT paper wealth storage is unfolding with breathtaking speed. Asset bubbles continue to emerge in the emerging world and collapse in the developed world as capital FLEES. Today’s missive covers the deep insolvencies in the developed world and the definitions of solvency of Austrian Economics. The inflationary depression still lies in our futures. First let’s look at the definition of insolvency, courtesy of Jim Sinclair’s www.jsmineset.com: The Austrian School’s Seven Commandments: The Austrian free-market economists use common sense principles.
You cannot spend your way out of a recession.
You cannot regulate the economy into oblivion and expect it to function.
You cannot tax people and businesses to the point of near slavery and expect them to keep producing.
You cannot create an abundance of money out of thin air without making all that paper worthless.
The government cannot make up for rising unemployment by just hiring all the out of work people to be bureaucrats or send them unemployment checks forever.
You cannot live beyond your means indefinitely.
The economy must actually produce something others are willing to buy.
Yuan Gains May Help China Vault Past Japan to Be No. 2 Economy By Bloomberg News -- April 19 (Bloomberg) -- China’s anticipated move to let its currency appreciate may help the nation overtake Japan as the world’s second-largest economy, Australia and New Zealand Banking Group Ltd. said. A 5 percent revaluation against the dollar could see quarterly gross domestic product exceed Japan’s as soon as July- to-September this year, estimated Liu Li-Gang, a Hong Kong-based economist at ANZ. The Chinese economy is likely to vault past Japan by year’s end even if the yuan remains stable, Liu said in an e-mailed interview.
Germany warns of 'Lehman' crisis if Greece defaults By Ambrose Evans-Pritchard - Telegraph.co.uk German finance minister Wolfgang Schauble has pleaded with his country's citizens to back a joint EU-IMF bail out for Greece worth up to €45bn (£40bn), warning that failure to act risks a financial meltdown "We cannot allow the bankruptcy of a euro member state like Greece to turn into a second Lehman Brothers," he told Der Spiegel. "Greece's debts are all in euros, but it isn't clear who holds how much of those debts. The consequences of a national bankruptcy would be incalculable. Greece is just as systemically important as a major bank," he said.
German Windfall Profits From Exiting The Euro by Daniel R. Amerma - FinancialSense.com Germany is a nation that fears inflation for good historical reason, and among the nations of the world, Germany places a particularly high priority on price stability. Yet, so long as Germany remains in the European Economic and Monetary Union (EMU) with the euro as its currency, Germany may not be in control of German inflation. In particular, the current crisis with Greece, and the crises that may follow with other nations such as Portugal, Italy, Spain and Ireland may prove disastrous for German investors and taxpayers. For so long as it is in the EMU, Germany may have no effective choice but to bail out countries that have been running up huge deficits – despite Germany itself not having the economic capacity to do this for all of Europe on an indefinite basis, let alone the political will to do so. These are among the reasons why in a letter to clients late last week, Morgan Stanley warned that Germany may leave the euro and the EMU and that investors should be prepared for this event.
Another Trillion Dollar "Crisis," Courtesy of Barack Obama By John Lillpop - CapitolHillCoffeeHouse.com Eventually, the American people and the mainstream media are bound to wise up to Barack Obama’s bait and switch scheme of screaming “crisis” in order to waste trillions more of the U.S. treasury on failed liberal causes. Obama’s latest “wolf” cry involves his Marxist proposals for reform of the financial industry. In a nutshell, Obama wants to destroy private enterprise in the financial industry by replacing it with onerous government regulations and oversight. And why not?
Bond Crash to Drive Gold By Neil Charnock - GoldSeek.com The gold market has been heating up and conditions are moving into an alignment which is ideal for a gold price rally this year. Fear and uncertainty will drive the price northwards even if the current CTFC saga does not eventuate in immediate disciplinary action or regulatory change. The fact is that the lack of physical supply has been exposed and this will attract more investors to gold as rarity is again bought to the forefront for investors. If the issues raised at the enquiry are to be addressed we could see explosive short covering and gold price action. However this is a bonus I am not counting on at this stage.
John F. Kennedy vs The Federal Reserve Anthony Wayne - SilverBearCafe.com On June 4, 1963, a virtually unknown Presidential decree, Executive Order 11110, was signed with the authority to basically strip the Federal Reserve Bank of its power to loan money to the United States Federal Government at interest. With the stroke of a pen, President Kennedy declared that the privately owned Federal Reserve Bank would soon be out of business. The Christian Law Fellowship has exhaustively researched this matter through the Federal Register and Library of Congress. We can now safely conclude that this Executive Order has never been repealed, amended, or superceded by any subsequent Executive Order. In simple terms, it is still valid.
Greenspan Came Not to Save Consumers but to Bury Them Mises Daily: Monday, April 19, 2010 by Frederick J. Sheehan he attention Alan Greenspan devoted to consumer protection on April 7, 2010, was a strange diversion, which is what it was. The Financial Crisis Inquiry Commission had penetrated, to an uncomfortable degree, the shallow defenses Greenspan has dreamt up to justify his indefensible behavior. For instance, he offered a ridiculous response when asked if monetary policy was one failure during his tenure. Greenspan changed the subject, only — one suspects to Greenspan's surprise — to be asked the same question again. He again ran off on a tangent. Maybe even Greenspan understood the emperor who wore no clothes had been exposed.
Obama to head to New York to promote new Wall Street regs USAToday.com President Obama will promote new financial regulations Thursday near the belly of his beast: New York City. Obama speaks at the Cooper Union, about two miles from Wall Street, where traders will no doubt be paying careful attention to his remarks. Spokesman Robert Gibbs said the president will call for swift action by the Senate on new regs, "almost two years after the crisis hit and almost one year after the administration first laid out a detailed plan for holding Wall Street accountable and protecting consumers."
Obama and Democrats challenge GOP on Wall Street Jim Puzzanghera and Janet Hook - LATimes.com 'Whose side are you on?' Sen. Christopher Dodd says as Democrats try to frame the vote on financial rules as a choice between Wall Street and Main Street. Emboldened by the fraud allegations against giant Goldman Sachs & Co., the Obama administration and Senate Democrats will push for a showdown this week on their sweeping overhaul of financial regulations — a confrontation that echoes the epic battle over healthcare. President Obama is traveling to Manhattan on Thursday to deliver a major speech urging passage of the reforms, with the fate of the legislation likely to hinge on framing an issue that resonates with voters still dealing with the fallout from the deep recession.
Why America Hates Goldman Sachs By Eric Fry - DailyReckoning.com 04/19/10 Laguna Beach, California – If you shine a light on a cluster of cockroaches, they scatter and hide. But when you shine a light on a cluster of investment banking con men, they simply stare back and reply, “The SEC’s charges are completely unfounded in law and fact and we will vigorously contest them and defend the firm and its reputation.” As the entire investing world knows by now, Goldman Sachs is the latest cockroach to scuttle under the spotlight. Last Friday, the Securities and Exchange Commission accused Goldman of defrauding investors out of $1 billion.
Goldman Sachs Fraud Aftermath by Paul J. Nolte - FinancialSense.com WorldCom, Enron, Bear Stearns and Arthur Anderson – just but a few names that once lit up the Wall Street sky that are no more. While still way too early to declare it a has-been, the SEC suit against Goldman Sachs for fraud is now the poster child for all that is wrong on Wall Street and led to Friday’s 100+ point decline. The question investors focused upon in the aftermath of the revelations is this the next shoe to drop in the financial meltdown? For some, this is gasoline tossed on the smoldering fire of regulation proposed by Sen. Dodd last month, but will the ensuing fire burn investors anew? All the financial machinations cast a pall over what had been a decent start to earnings season, with over 70% of those reporting beat estimates for both earnings and revenue. The economic numbers reported remained uneven as unemployment claims remain high, however a modest increase in new home construction gave some hope for real estate. Goldman is likely to remain center stage for at least the next couple of weeks, stealing the show from earnings and the economy, as Greece did early in January. It remains to be seen if this develops into more than just a modest 5-7% correction.
Goldman can beat the SEC By David Weidner, MarketWatch If Goldman lost money, it will be tough to prove intent NEW YORK (MarketWatch) -- Let me begin by saying that in the way the Securities and Exchange Commission laid out the case, what Goldman Sachs Group Inc. did was troubling and not too far from morally reprehensible, unethical, slimy, devious and unjustifiable. Goldman, in packaging a collateralized debt obligation in which parts were hand-picked by the hedge fund Paulson & Co. and not disclosing that firm's role to long investors, apparently used the vagaries of derivative market rules to cater to a client who would bring in fees, not only on this deal, but on deals down the road.
Global Real Estate Looks Like the Next Bubble, Says WSJ's Greg Zuckerman by Peter Gorenstei - TechTicker -- From technology to housing to commodities, investors have been moving from one bubble to the next over the last 10 years. Rather than a passing fad, the trend is here to stay says Gregory Zuckerman, Wall Street Journal reporter and author of The Greatest Trade Ever – a book that chronicled Jim Paulson’s multi-billion dollar bet against the housing bubble. Paulson made his fortune betting against the pack but that's not how most professionals succeed, Zuckerman observes. "The incentive is not to be a contrarian on Wall Street," he says; instead, most traders, "chase the trade way too often."
Commercial Property Prices: The Downturn Continues SeekingAlpha.com The latest release of the Moody’s/REAL Commercial Property Index showed a notable decline of 2.6% since January, breaking a three month streak of rising prices and continuing to suggest that the nation’s commercial property markets are experiencing a tremendous downturn with prices down some 25.81% on a year-over-year basis and a stunning 41.66% since the peak set in October 2007.
Robert Shiller: A Double Dip for Housing and Stocks Ahead? Prieur du Plessis - SeekingAlpha.com This week on Wealthtrack, renowned Yale economist and “financial thought leader” Robert Shiller tells Consuelo Mack why he believes home prices could suffer a double dip and stock prices are not cheap. Shiller has several best-selling books to his credit. One of them, Irrational Exuberance, published in 2000 before the tech bubble burst, traced the stock market boom and its ever escalating trajectory. The second edition, in 2005 gave early warning of the emerging global real estate bubble and the long run consequences we are living with today. Shiller believes that human psychology drives the economy. A recent book, Animal Spirits, co-authored with Berkeley economist George Akerlof describes how and why.
BofA plan: No job? No house payment By Stella M. Hopkins - CharlotteObserver.com If OK'd by regulators, program could be banking industry's broadest effort to ease foreclosure pain for the jobless. Bank of America wants to give struggling mortgage customers who are collecting unemployment benefits up to nine months with no mortgage payment. That's right. Zero payment. Customers would have to agree that, if they haven't found a job within the nine months, they will sign over their house to the bank. The Charlotte bank would give them at least $2,000 to help with moving expenses. The proposal needs regulatory approval, and the bank doesn't know when, or if, that will happen.
The 'easy mortgage' era won't last By Bill Fleckenstein - MSN Money Along with easy money, the economy has gotten a boost from practices that let many homeowners stop paying their mortgages and use the 'extra' money elsewhere. The real-estate market will soon see banks take a much more aggressive approach to foreclosures. It will be interesting to see how the economy is affected as rates are ratcheted up in earnest. This story line, the focus of this week's column, draws its inception from the government's easy-money policies and the bank bailouts. To this point, the economy has gotten a substantial boost from homeowners who simply don't pay their mortgages and use the "extra" money for other things.
Jury has a question in KB Home options backdating case LATimes.com Jurors asked the judge for help last week during deliberations in the stock-options-backdating prosecution of former KB Home chief Bruce Karatz, according to documents released Monday. The panel asked the court for a definition of a "derivative action," which was referenced in a KB Home internal document that is evidence in the case. Shareholders filed derivative-action lawsuits against Karatz and several other KB executives in 2006, alleging that the backdating of employee stock options had diminished the value of the company's stock. The lawsuits were settled in 2008. After discussing the jury's question with prosecution and defense attorneys by e-mail, U.S. District Judge Otis D. Wright II sent the jury this response: "There is no testimony about a derivative action and you should not concern yourself with it."
How Deep Has Washington Reached Into Your Pockets? By Thomas D. Segel - CapitolHillCoffeeHouse.com As is the case with most retired military personnel, I have taken care of my future and made sure my family is financially protected. I continued to work after my military career and I have saved for that rainy day. I am certainly not in any category that could be considered wealthy. With that being said, that rainy day I saved for seems to be here. Still, I was interested in how all of these government-spending actions would personally impact my pocketbook. I went to the Fox News website and looked up the “Its All Your Money” national debt calculation program. Boy did I get a shock.
L.A. Spurns Build America Debt for $290 Million in School Bonds By Allison Bennett and Brendan A. McGrail April 19 (Bloomberg) -- The Los Angeles Unified School District, the second-largest U.S. school system after New York City, plans to sell $290.2 million in Qualified School Construction Bonds to tap a bigger federal subsidy than offered by the Build America program. The Los Angeles issue, scheduled for April 22, would be the second-largest use of the taxable school bonds since they were created last year, together with Build America Bonds, under President Barack Obama’s economic stimulus program. The school obligations are part of a $449.7 million sale that will be the second-largest in a week of $5.8 billion in municipal issuance, according to data compiled by Bloomberg.
Foreclosure Pipeline Is Full to Bursting Charles Hugh Smith - SeekingAlpha.com The foreclosure pipeline will be full for years to come. That precludes any "recovery" in housing valuations as supply will swamp demand. According to realtytrac.com, foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 932,234 properties in the first quarter, a 7 percent increase from the previous quarter and a 16 percent increase from the first quarter of 2009. Meanwhile, the heavily hyped Federal program to stave off defaults via massaging the terms of mortgages is failing spectacularly: Defaults Rise in Loan Modification Program.
Oil Rises From Three-Week Low on Forecast for U.S. Supply Drop By Gavin Evans and Yee Kai Pin -- April 20 (Bloomberg) -- Oil rose from a three-week low on speculation a report tomorrow will show crude stockpiles in the U.S., the world’s biggest energy consumer, declined for a second week and as rising equity prices buoyed investor sentiment. Oil inventories probably fell 600,000 barrels last week, a Bloomberg News survey showed. U.S. stocks yesterday reversed losses as Citigroup Inc. beat profit estimates and Bloomberg reported that the Securities and Exchange Commission was divided in its decision to sue Goldman Sachs Group Inc. Asian stocks rose today, led by finance companies.
Google battle over Internet censorship goes far beyond China By Jessica Guynn, Los Angeles Times At least 25 nations have blocked access to the search giant over the last several years. Google Inc.'s fight with China over Internet censorship made headlines around the world, but it has been engaged in similar battles around the globe. At least 25 countries, many of them with repressive regimes but even those with democracies, have at times blocked the public's access to Google over the last several years. All told, more than 40 countries actively censor the Internet, compared with a handful in 2004, which is when the OpenNet Initiative, a group of academics, began tracking global censorship. Censorship runs the gamut. Denmark bans child pornography. Iran has the most extensive filtering and surveillance system of any country, blocking access to all online content critical of the government. It stepped up its Internet crackdown and surveillance during the disputed presidential election last summer.
Tea Party Financiers Owe Their Fortune to Josef Stalin By Yasha Levine, AlterNet The Tea Party movement's dirty little secret is that its chief financial backers owe their family fortune to the granddaddy of all their hatred: Stalin's godless empire of the USSR. The secretive oil billionaires of the Koch family, the main supporters of the right-wing groups that orchestrated the Tea Party movement, would not have the means to bankroll their favorite causes had it not been for the pile of money the family made working for the Bolsheviks in the late 1920s and early 1930s, building refineries, training Communist engineers and laying down the foundation of Soviet oil infrastructure.
8 Banks Close in Calif., Fla., Mass., Mich., Wash. By THE ASSOCIATED PRESS - NYTimes.com WASHINGTON (AP) -- Regulators on Friday shut down eight banks -- three in Florida, two in California, and one each in Massachusetts, Michigan and Washington -- putting the number of U.S. bank failures this year at 50. The Federal Deposit Insurance Corp. took over the three Florida banks: Riverside National Bank in Fort Pierce, with $3.4 billion in assets; First Federal Bank of North Florida in Palatka, with $393.3 million in assets; and AmericanFirst Bank in Clermont, with assets of $90.5 million.
Obama: Fresh crisis without new financial rules By DARLENE SUPERVILLE - AP WASHINGTON (AP) - The U.S. is destined to endure a new economic crisis that sticks taxpayers with the bill unless Congress tightens oversight of the financial industry, President Barack Obama said Saturday. The overhaul is the next major piece of legislation that Obama wants to sign into law this year, but solid GOP opposition in the Senate is jeopardizing that goal. "Every day we don't act, the same system that led to bailouts remains in place, with the exact same loopholes and the exact same liabilities," Obama said in his weekly radio and Internet address. "And if we don't change what led to the crisis, we'll doom ourselves to repeat it.
Jobless claims rise for second straight week By JEANNINE AVERSA (AP) WASHINGTON — The number of newly laid off people signing up for unemployment benefits rose sharply for the second straight week, suggesting that jobs are still hard to come by even as the economic recovery gains traction. The Labor Department reported Thursday that first-time requests for jobless benefits rose by 24,000 last week to a seasonally adjusted 484,000, the highest level since late February. Economists had predicted claims would fall. It marked the second week that claims took an unexpected leap. In the prior week, claims rose by 18,000 to 460,000.
Unemployment rises in 24 states By Ben Rooney - CNNMoney.com NEW YORK (CNNMoney.com) -- Nearly half of all U.S. states reported rising unemployment rates in March, the government said Friday, with rates above the national average in 11 states and the District of Columbia. A total of 24 states suffered jobless rate increases in March, according to the Labor Department's monthly report. But rates declined last month in 17 states and the District of Columbia.
Rising Yuan Could Lift Commodities, Hit Treasurys By TOM LAURICELLA, ALEX FRANGOS and MARK GONGLOFF - WSJ.com -- When China allowed the yuan to rise in 2005, it startled investors and sent waves through the financial markets. This time around a revaluation is widely expected. So will a higher yuan turn out to be a big yawn? Not necessarily. Based on the experience of 2005, a rising yuan could boost other Asian currencies, lift commodity prices and hurt U.S. Treasurys. Domestic-focused Chinese stocks are also likely to rise. With China being an even bigger economic force throughout the global economy, sucking up commodities and dominating exports, the market effects could be bigger this time around.
Gold, silver lead investor interest in commodities CommodityOnline.com Late last week’s sharp decline in commodities prices may lead to increased buying interest this week. While a round of profit-taking had been expected to hit prices, especially if prices were not able to break above key resistance levels, prices sold off Friday for a reason that does not support such a downward move. Thus, prices may be expected to spring back this week, as investors reverse last Friday’s selling. Prices will have to hold above key support levels to attract investor fund, but that should not be a problem.
Gold Technical Pullback, China Demand, Euro PIIGS and Goldman Sachs Paulson Massive Positions By: Dian L Chu -MarketOracle.co.uk Gold fell the most in two months as the SEC’s action against Goldman Sachs (GS) spurred investors rushing out of riskier commodities and into perceived safer assets such as the U.S. dollar. Futures for June delivery slid 2% in one day to $1,136.90 an ounce. Paulson Linked to Goldman’s Case Goldman Sachs, the largest U.S. commodity broker, is charged with defrauding investors with a financial product tied to subprime mortgages by the Security Exchange Commission (SEC). In addition, hedge fund Paulson & Co. is also mentioned by the SEC, but not charged, in connection with the Goldman Sachs matter.
Jim Rogers : Gold will go higher
Gold Drops Most in Two Months as SEC Sues Goldman, Dollar Gains By Pham-Duy Nguyen -- April 16 (Bloomberg) -- Gold fell the most in two months after regulators accused Goldman Sachs Group Inc. of fraud, spurring investors to seek a haven in the dollar and eroding the precious metal’s appeal as an alternative asset. The dollar rose as much as 0.5 percent against a basket of six major currencies, including the euro. The Securities and Exchange Commission accused New York-based Goldman Sachs, the largest U.S. commodity broker, of defrauding investors with a financial product tied to subprime mortgages. Gold rose 24 percent last year as the dollar fell 4.2 percent.
Current monetary system and gold's parabolic rise By Hubert Moolman - CommodityOnline.com The death blow of a financial era that started in about 1971 appears to be in its final stages and seems to be waiting for a fierce run to gold, silver and certain other non monetary asset classes. The blow could be provided by the massive increase in the “paper prices” of gold, silver etc. over the next couple of years, which could lead to an end of confidence in fiat money and other debt based financial assets. The current monetary order will be exposed for the fraud that it is, and it will collapse just like the monetary orders before i.e. the gold exchange standard and the Bretton Woods standard.
Kitco Gold Index Identifies Influence of USD Strength vs. Demand for Gold on its Price By Lorimer Wilson - Ktico.com Up until now we have always questioned to what extent the price of gold was due to the U.S. dollar’s weakness or to gold’s secular strength but with the introduction of the Kitco Gold Index now we know - precisely - because it measures the price of gold, not in terms of U.S. dollars (USDs), but rather in terms of the same weighted basket of currencies that determine the US Dollar Index. How ingenious! By way of explanation below are further edited excerpts from Kitco's introductory article* on the subject:
Goldman warned of SEC suit 9 months ago By Alistair Barr, MarketWatch Investment bank could be exposed to a raft of private lawsuits SAN FRANCISCO (MarketWatch) -- Goldman Sachs Group Inc. was warned nine months ago that Securities and Exchange Commission staff wanted to bring a civil case against it, but the investment bank didn't specifically disclose this to investors in regulatory filings, Bloomberg News reported Saturday, citing unidentified people it credited with direct knowledge of the communications. Goldman Sachs responded to the so-called Wells notice from the SEC within months and met with agency officials in an effort to fend off the civil lawsuit, Bloomberg reported, citing its sources, who declined to be identified because the discussions weren't public.
So, Goldman Sachs, where are your friends now? Gentlemen of Goldman Sachs - is it time to pay back those bonuses? The investment bank memorably dubbed a "giant vampire squid" by one populist critic has suddenly found itself up on fraud charges - and there aren't too many sympathisers shedding tears. The accusations levelled at Goldman by the Securities and Exchange Commission today are extremely serious. They were sufficient to send the bank's stock tumbling by 12%, wiping $12bn off its market value. Before any court hearings even begin, the risk is that clients will simply opt to take their business to a less controversial institution. And Brits will not be amused that UK taxpayers took a hit on the affair through bailed out Royal Bank of Scotland.
The End of 'Government Sachs'? by Peter Gorenstein - TechTicker Fraud Charge Builds Momentum for Financial Reform, Ritholtz Says Timing is everything. With Washington putting renewed attention on regulation reform, the SEC's fraud charges against Goldman Sachs couldn't have come at a better time for supporters of the cause. "There is nothing in (the complaint) that would give comfort to people who are opposing more regulation on Wall Street," says Barry Ritholtz CEO of FusionIQ and author of Bailout Nation. The focus comes later than some would have wanted, but as Ritholtz says, "the momentum is clearly moving in the direction of more regulation."
Goldman Sachs prosecution threatens to open the floodgates on Wall Street Andrew Clark in New York - guardian.co.uk -- The US government's $1bn fraud prosecution of Goldman Sachs has spurred calls for a wholesale crackdown on the opaque world of derivatives trading, with pressure mounting on the White House to deliver reforms forcing greater transparency in highly complex financial products. President Barack Obama is engaged in a battle with Senate Republicans over an overhaul of financial regulation and has vowed to veto any bill that does not contain strong enough controls on derivatives. The US government will face demands this week to use its 27% stake in Citigroup as a lever to extract more public information about trading. Citigroup's annual meeting will be held on Tuesday, and a shareholder group has urged the US treasury to vote its shares in favour of a resolution requiring greater disclosure from the bank on its collateral policy and speculative activities.
SEC Investigating Other Soured Deals By CARRICK MOLLENKAMP, SERENA NG, SCOTT PATTERSON and GREGORY ZUCKERMAN - WSJ.com -- The Securities and Exchange Commission, after having hit Goldman Sachs Group Inc. with a civil fraud charge, is investigating whether other mortgage deals arranged by some of Wall Street's biggest firms may have crossed the line into misleading investors. The SEC's case against Goldman Friday has exposed an open secret on Wall Street: As the housing market began to wobble a few years back, some big financial firms designed products aimed at allowing key clients, such as hedge funds, to bet on a sharp housing downturn.
SEC Faces Challenges With Goldman Case By KARA SCANNELL - WSJ.com The Securities and Exchange Commission unearthed significant evidence against Goldman Sachs Group Inc. in its fraud case filed Friday, but the agency still faces challenges in persuading a jury should the case go to trial, lawyers not involved in the case said. The SEC's suit against Goldman is the agency's biggest assault on a Wall Street firm in a matter stemming from the credit crisis. A successful outcome for the SEC could go a long way in repairing its reputation, which was damaged by its failure to discover Bernard Madoff's Ponzi scheme and other shortcomings that emerged during the crisis.
Paulson Says It Had No Authority Over Goldman CDOs By Saijel Kishan April 16 (Bloomberg) -- Paulson & Co., the New York-based hedge-fund firm run by billionaire John Paulson, said it had no authority over the selection of assets linked to a Goldman Sachs Group Inc. mortgage security from whose decline it later profited. Goldman Sachs was sued today by U.S. regulators for fraud tied to collateralized debt obligations that contributed to the worst financial crisis since the Great Depression. The bank, based in New York, created and sold a CDO tied to subprime mortgages in early 2007 together with Paulson, who bet against some of the underlying securities, the SEC said.
U.S. charges Goldman with subprime fraud By Jonathan Stempel and Steve Eder - Reuters Goldman Sachs: Charges ‘unfounded’ and it will ‘defend the firm’ -- NEW YORK - Goldman Sachs Group was charged with fraud by the U.S. Securities and Exchange Commission over its marketing of a subprime mortgage product, igniting a battle between Wall Street's most powerful bank and the nation's top securities regulator. The civil lawsuit is the biggest crisis in years for a company that faced criticism over its pay and business practices after emerging from the global financial meltdown as Wall Street's most influential bank.
Black Says Goldman Sachs Suit to Give Rules Bill `Push'
Goldman Sachs charged with $1bn fraud over toxic sub-prime securities by Andrew Clark - guardian.co.uk -- Securities and exchange commission charges Goldman Sachs with conflict of interest in sub-prime mortgage asset sales The Wall Street bank Goldman Sachs, long considered a shrewd winner from the financial crisis, was slapped with potentially devastating fraud charges todayas US regulators accused the firm of fiddling investors out of more than $1bn (£640m) by wilfully mis-marketing toxic sub-prime mortgage-related securities. A 22-page lawsuit filed by the US securities and exchange commission (SEC) charged Goldman Sachs with working with a controversial US hedge fund, Paulson & Co, to structure and sell a complex package of mortgages to clients while Paulson took a "short" position betting that the very same mortgages would fail.
Goldman Sachs Clients-First Pledge Undercut by SEC By Christine Harper April 17 (Bloomberg) -- Goldman Sachs Group Inc.’s efforts to burnish its reputation just got a lot tougher. Chairman and Chief Executive Officer Lloyd Blankfein, 55, spent the last year defending the firm against criticism from politicians and pundits, who decried Goldman Sachs’s profit in the aftermath of the financial crisis and its sale of mortgage securities that went sour. Now the U.S. Securities and Exchange Commission is charging the company with fraud. On Goldman Sachs’s list of business principles, “clients’ interests always come first” ranks highest. The SEC paints a different picture. The firm failed to tell investors when selling them a so-called collateralized debt obligation tied to mortgages that the package had been designed to fail by hedge fund Paulson & Co., which profited from the losses, the agency alleged. Goldman Sachs said it will contest the case, calling it “completely unfounded in law and fact.” Shareholders weren’t comforted: The stock plunged the most in more than a year.
Rivals may not be smiling at Goldman Sachs’ predicament for long By Richard Fletcher - Telegraph.co.uk -- So how bad is it for Goldman Sachs? It certainly doesn’t look great. The allegations made by the Securities and Exchange Commission play to Wall Street conspiracy theories about the “vampire squid”. Sub-prime mortgages, toxic collateralised debt obligations (CDOs), billion dollar profits and – at the centre of it all – Goldman Sachs’ relationship with its lucrative hedge funds customers. It’s all there. The bank insists it will “vigorously contest” the “unfounded allegations”. Given our “love-hate relationship” with Goldman there was no doubt a number of bankers on both sides of the Atlantic who raised a wry smile at Goldman Sachs’ difficulties – even if it brought the week’s fragile stock market rally to a dramatic halt.
Goldman Sachs finds $5bn for pay and bonuses amid fraud investigation Ruth Sunderland - The Observe -- Goldman staff will benefit from almost half the investment bank's first-quarter revenues Goldman Sachs is expected to earmark about $5bn (£3bn) for staff pay and bonuses this week, days after being accused of securities fraud by the US regulators, fuelling the controversy over bankers' rewards in the teeth of the financial crisis. Chief executive Lloyd Blankfein is expected to unveil revenues of $11bn for the first quarter of this year on Tuesday, up from $9.4bn in the same period of 2009. About 47% of that will go into a "compensation pool" for bosses and employees.
Did Goldman Sachs caused both the 1929 and 2008 depressions? (1/2)
Did Goldman Sachs cause both the 1929 and 2008 depressions? (2/2)
Goldman attacked by UK premier By Francesco Guerrera in New York, Jean Eaglesham in London and Ralph Atkins in Frankfurt - FT -- Pressure on Goldman Sachs mounted on Sunday as UK prime minister Gordon Brown attacked the “moral bankruptcy” revealed by the Securities and Exchange Commission’s fraud charges , while the gulf between the bank and the regulator widened with revelations that the two sides never discussed a settlement. The lack of settlement talks in the nine months since the SEC formally told Goldman it wanted to press charges is unusual and underlines the hard line taken by both the authorities and the bank in this case.
The crisis is no American invention – the City was in it, up to its neck by Ruth Sunderland - The Observe -- Look at how many of the characters in the credit crunch were operating out of London The Securities and Exchange Commission's decision in the US to go for Goldman Sachs shows it is time for the UK authorities to get real. There could not be a more high-profile target than the Wall Street titan, which until now seemed to be emerging from the crisis with its reputation and finances relatively intact – so much so that the Financial Times named its chief executive, Lloyd Blankfein, as its Man of the Year, for his diligence in carrying out what he – apparently jokingly – described as "God's work".
Gordon Brown and Angela Merkel attack Goldman Sachs Andrew Clark in New York - guardian.co.uk, Bank under pressure amid claims it misled clients as PM calls for investigation and threatens bonus ban A crisis gripping Goldman Sachs deepened today as Britain and Germany moved towards joining the US in pursuing a fraud investigation against the Wall Street bank for allegedly fiddling clients out of $1bn ($650m) through a misleading mortgage investment deal. Gordon Brown ordered a special investigation into Goldman, accusing the bank of "moral bankruptcy". He threatened to block multimillion-pound bonus payouts if the firm is found guilty of wrongdoing.
SEC Charges Goldman Sachs With Fraud Costing Investors $1 Billion By MATTHEW JAFFE, DAN ARNALL and ZUNAIRA ZAKI - ABCNews.com Goldman Veep Joked About Not 'Necessarily Understanding' the Implications of His Deals -- Federal regulators today charged investment bank Goldman Sachs with fraud over the sale of risky subprime mortgage securities that were secretly designed to fail, costing investors $1 billion. In a civil suit filed Friday, the Securities and Exchange Commission alleged that Goldman Sachs didn't tell investors that a massive hedge fund -- Paulson & Co. -- had hand-picked the subprime mortgages that went into the securities in question, all with an eye toward picking those most likely to go bust. The securities were then bundled up and sold to investors, who were told the mortgages had been picked by an independent third party.
No prospect of any more German rescues as Portugal hits a brick wall By Ambrose Evans-Pritchard - Telegraph.co.uk -- Portugal, not Greece, poses the greater existential threat to Europe's monetary union. The long-drawn saga in Athens can perhaps be deemed a case apart. Greece lied. Its budget deficit was egregious at 16pc of GDP last year on a cash basis. It wasted its EMU windfall, the final chance to bring public debt back from the brink of a compound spiral. You cannot blame the euro for this, although EMU undoubtedly created a risk-free illusion that lured both Athens and creditors deeper into the trap – and now prevents a solution. Nor would an orderly default under IMF guidance along Uruguayan lines necessarily imperil Europe's banks. The Bundesbank hints that letting Greece go would prove a healthier outcome for EMU in the long run, upholding discipline.
China urged to introduce ‘junk’ debt By Jamil Anderlini in Beijing and Henny Sender in New York - FT -- China should introduce “junk” bonds to provide smaller private companies with new funding channels as the country develops its debt capital market, a senior Chinese financial official has suggested. “It may be a little bit radical, but I think we should promote junk bonds in China,” Guo Shuqing, chairman of state-controlled China Construction Bank, the country’s second-largest lender, told the Financial Times. “But we would probably use a more appropriate name, like ‘innovative’ bonds or ‘high-yielding’ bonds.”
Greek bail-out teams face hard balancing act By Kerin Hope in Athens and Alan Beattie in Washington - FT -- European Union and International Monetary Fund officials were due to hold a tele-conference on Monday on the terms of a emergency bail-out package for Greece after their flights to Athens were cancelled because of the volcanic ash cloud. The EU-IMF negotiations are seen as urgent because of a sharp rise last week in the premium paid by Greece to finance its debt on the international capital markets.
Greece’s bail-out only delays the inevitable By Wolfgang Münchau FT.com The European Union finally agrees a bail-out, and the much-predicted rally of Greek bonds turns into a rout. A week later, spreads on Greek bonds had reached their highest levels since the outbreak of the crisis. The financial markets have recognised that, bail-out or no bail-out, Greece is in effect broke. The bail-out prevents a default this year, but makes no difference whatsoever to the likelihood of a subsequent default. Just do the maths: Greece has a debt-to-gross domestic product ratio of 125 per cent. Greece needs to raise around €50bn ($68bn, £44bn) in finance for each of the next five years to roll over existing debt and pay interest. That adds up to approximately €250bn, or about 100 per cent of Greek annual GDP.
US Treasury chief hardens stance on derivatives By Tom Braithwaite in Washington - FT.com Tim Geithner, US Treasury secretary, stiffened his call for derivatives reform on Sunday as lawmakers and officials used allegations that Goldman Sachs committed fraud in marketing complicated financial instruments to push for more transparency. With a financial regulation bill due to be considered by the Senate within days, Mr Geithner and others expressed confidence that Republicans would vote in favour of the legislation, whose final derivatives language may be tougher after the Goldman charges from the Securities and Exchange Commission.
U.S. loan modification program wasting billions BY KIMBERLY MILLER - PALM BEACH POST More than 10,000 South Florida homeowners have received permanent reductions in their mortgage payments under the Obama administration's foreclosure rescue program. But even as the Treasury Department released the updated March figures this week, a congressional oversight group panned the $50 billion plan, saying it's not keeping up with the pace of the housing crisis and that so called "permanent" modifications, which are really only good for five years, are just delaying the inevitable -- more mortgage defaults.
Press TV-On the edge with Max Keiser -04-16-2010
Financial Reform Bill Will Devastate U.S. Economy, and Goldman Sachs CDO's Squared By: John Mauldin - MarketOracle.co.uk -- When you draft a 1,300-page "financial reform" bill, various special interests get language tucked into the bill to help their agendas. However, the unintended consequences can be devastating. And the financial reform bill has more than a few such items. Today, we look briefly at a few innocent paragraphs that could simply kill the job-creation engine of the US. I know that a few Congressmen and even more staffers read my letter, so I hope that someone can fix this. The Wall Street Journal today noted that the bill, while flawed, keeps getting better with each revision. Let's hope that's the case here.
WaMu crisis fuelled by raging turf war By Stephanie Kirchgaessner in Washington - FT.com Ben Bernanke, chairman of the federal reserve of the United States...and babysitter? In the final weeks leading up to the collapse of Washington Mutual, Mr Bernanke was not only facing the prospect of a cratering US economy. He was also dealing with another headache: two bickering federal banking regulators who were at odds over how to cope with a thrift that was teetering on the edge of a cliff.
Gereld Celente Russia Today interview 16 Apr 2010
FedEx, Teamsters Battle Over Bill By JOSH MITCHELL WASHINGTON—FedEx Corp. and the Teamsters union are battling over whether wide-ranging aviation legislation will contain provisions to make it easier for unions to organize airline employees and harder for carriers to cut costs by allying with rivals or outsourcing maintenance. A House version of the bill to fund the Federal Aviation Administration—a three-year, $54 billion package passed last year—contains several pro-union provisions. A two-year, $35 billion Senate version doesn't. Lawmakers from both chambers are set to negotiate a final version within the next few weeks.
China Lends Venezuela $20 Billion, Secures Oil Supply By Daniel Cancel April 19 (Bloomberg) -- China will lend Venezuela $20 billion and form a joint venture with a state company to pump crude oil from an Orinoco Belt block, President Hugo Chavez said as he promised to meet the Asian country’s energy needs. The financing from China is separate from a $12 billion bilateral investment fund, Chavez said, and will pay for Venezuelan development projects. Venezuela currently sends China 460,000 barrels a day of crude oil. The oil is used to repay the Asian country for $8 billion Venezuela used from the fund for infrastructure projects.
China Gives Venezuela $20 Billion By DAN MOLINSKI CARACAS—China will provide $20 billion in fresh funding to Venezuela, the latest sign of the Asian giant's expanding economic and financial role in Latin America. Venezuelan President Hugo Chavez said that the funds will be used for highway-building and other projects, and that in return for the money, his oil-rich country will continue to offer China the petroleum it needs. China's state-run Xinhua news agency said the $20 billion was in "soft loans" for Venezuela's energy sector and would be provided by state-owned China Development Bank.
Tax credit ups risk of audit By STEPHEN OHLEMACHER, Associated Press Examinations mean delays in getting refund checks WASHINGTON -- Here's a good way to get audited by the Internal Revenue Service this year: claim the first-time home buyer tax credit. About a fifth of all IRS examinations done by mail in the past six months were for people claiming the credit, National Taxpayer Advocate Nina E. Olson told a congressional committee Thursday -- the filing deadline for individual tax returns. The audits mean big delays in getting refunds -- as much as five months -- just as Congress and the Obama administration hope that tax refunds will spur economic growth and the home buyer tax credit will improve the housing market.
Main Street left out of recovery By Catherine Clifford - CNNMoney.com NEW YORK (CNNMoney.com) -- The economy may be showing halting signs of recovery, but the turnaround hasn't reached Main Street yet: A pair of recent small business surveys found that most owners are skeptical or downright gloomy about their business prospects this year. "Something isn't sitting well with small business owners," Bill Dunkelberg, chief economist of the National Federation of Independent Business, said in a written statement accompanying the latest edition of his organization's monthly "Small Business Optimism" report. "Poor sales and uncertainty continue to overwhelm any other good news about the economy."
Skip the mortgage, pay the credit card By David Ellis NEW YORK (CNNMoney.com) -- Millions of Americans are not only upside down on their mortgage, they also appear to be shunning that monthly payment in favor of meeting their everyday expenses. In the state of California, for example, more than 10% of credit card-carrying consumers were choosing to pay that bill rather than their mortgage as of last fall, according to a recent study published by the credit reporting agency TransUnion.
Arizona Clears Strict Immigration Bill MIRIAM JORDAN - WSJ via InfoWars.com Arizona lawmakers on Tuesday passed one of the toughest pieces of immigration-enforcement legislation in the country, which would make it a violation of state law to be in the U.S. without proper documentation. It would also grant police the power to stop and verify the immigration status of anyone they suspect of being illegal. The bill could still face a veto from Arizona Gov. Jan Brewer. A spokesman for Ms. Brewer said she has not publicly commented on the bill. Ms. Brewer, a Republican, has argued for stringent immigration laws.
Tough immigration bill OK'd by Arizona House by Mary Jo Pitzl and Daniel Gonzalez - The Arizona Republic -- The Arizona House of Representatives on Tuesday passed a wide-ranging bill that, if signed by Gov. Jan Brewer, would cement the state's reputation as the leader in tough and controversial immigration-control measures. Senate Bill 1070 would, among other things, make it a state crime to be in the country illegally and bar what its proponents call "sanctuary city" policies. The bill passed on a party-line vote.
Welcome to Arizona, Home of Papers Please!
Clinton Says He Got Wrong Advice on Derivatives By Joshua Zumbrun April 18 (Bloomberg) -- Former President Bill Clinton said his Treasury Secretaries Robert Rubin and Lawrence Summers were wrong in the advice they gave him about regulating derivatives when he was in office. “I think they were wrong and I think I was wrong to take” their advice, Clinton said on ABC’s “This Week” program. Their argument was that derivatives didn’t need transparency because they were “expensive and sophisticated and only a handful of people will buy them and they don’t need any extra protection,” Clinton said. “The flaw in that argument was that first of all, sometimes people with a lot of money make stupid decisions and make it without transparency.”
Bill Clinton Takes on Conservatives Former president says heated words of right wingers could foster violence.
'This Week' Transcript: Former President Bill Clinton ABC News TAPPER: You've made some news over this weekend. You gave a speech on Friday talking about -- on the 15th anniversary of the Oklahoma City bombing which is coming up. How public officials have a responsibility to be careful with their words. This prompted a response from -- from Rush Limbaugh Rush Limbaugh: "With this comment you have just set the stage for violence in this country. Any future acts of violence are on your shoulders, Mr. Clinton." TAPPER: Do you have any response? CLINTON: Doesn't make any sense. The only point I tried to make is that when I went back and started preparing for the 15th anniversary of Oklahoma City, I realized that there were a lot of parallels between the early '90s and now, both in the feeling of economic dislocation, and the level of uncertainty people felt. The rise of kind of identity politics. The rise of the militia movements and the right wing talk radio with a lot of what's going on in the blogosphere now.
Interview with Bill Clinton (Part 1) Former President Bill Clinton sits down with ABC's Jake Tapper on "This Week."
Russia must have role in Europe-based missile defence system, says Nato chief by Richard Norton-Taylor - guardian.co.uk -- Anders Rasmussen calls for Russian involvement in missile defence project Russia must play a central role in plans for a missile defence system in Europe, Nato's top official will tell a meeting of alliance foreign ministers this week. Nato secretary general Anders Rasmussen believes that bringing Russia into the plans will help to allay its concerns about the project and contribute to further arms control measures, alliance officials say. "Russia should be included in a missile defence system which covers Europe, the secretary general believes, " Nato spokesman James Appathurai said during a visit to London. He said plans for a "new security architecture" should be "one roof which includes the Russians [who should be] part of the same security family".
BRIC must create a new world order: Lula The BRIC group of the world's four biggest emerging powers has a fundamental role in creating a new world order, Brazil's President Luiz Inacio Lula da Silva said on Thursday. Lula was speaking at the end of a summit in Brasilia with the leaders of China, India and Russia. The countries reiterated their call for developing nations to have a bigger role in global economic and financial decision-making.
Clinton fears ‘regional conflict’ without Iran accord By Daniel Dombey in Washington - FT.com Hillary Clinton, US secretary of state, has warned of the risk of regional conflict if new United Nations sanctions are not imposed on Tehran’s nuclear programme, telling the Financial Times that “ignoring the threat posed by Iran will put the world in a more precarious position within six months to a year”. Senior Pentagon officials last week said Iran could develop enough fissile material for a bomb within a year, although it would probably take three to five years for Tehran to develop a serviceable weapon.
Gates clarifies Iran nuclear memo WASHINGTON (AP) — Defense Secretary Robert Gates is disputing the characterization of a memo he wrote in January suggesting the U.S. needed to advance a long-term plan for dealing with Iran's nuclear program. Gates said Sunday allies and foes should have no doubt the U.S. is prepared to act "across a broad range of contingencies" in support of its interests with Iran. He said the memo identified steps to be taken in defense planning after Washington decided to increase pressure against Iran's nuclear ambitions.
U.S. military plans against Iran being updated By Barbara Starr, CNN Washington (CNN) -- The Pentagon and U.S. Central Command are updating military plans to strike Iran's nuclear sites, preparing up-to-date options for the president in the event he decides to take such action, an Obama administration official told CNN Sunday. The effort has been underway for several weeks and comes as there is growing concern across the administration's national security team that the president needs fresh options ready for his approval if he were to decide on a military strike, according to the official who is familiar with the effort.
US strike could delay Iran nuclear program Source: Reuters NEW YORK, April 18 (Reuters) - The nation's top military officer said on Sunday that a U.S. strike against Iran would go "a long way" to delaying its nuclear program but that he considered doing so his "last option" right now. "Military options would go a long way to delaying it," Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, told reporters after speaking at a forum at Columbia University in New York.
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Fri 04.16.2010
Not exactly a constitutional republic anymore, . . . is it? What are we NOW and where are we going?
Government Stimulus: The Multi-Trillion-Dollar Free Lunch By Joel Bowman - The DailyReckoning.com 04/15/10 Taipei, Taiwan – Milton Friedman got it wrong; there IS such a thing as a “free lunch.” Just ask any mainstream economist. These folks relish the opportunity to beguile anyone – whether or not they are possessed of the time and inclination to listen – with a litany of magic public programs, all designed to serve up the gratis grub. The unspoken dilemma, alas, is that “free” lunches are usually so expensive that neither nation nor individual can ever reasonably hope to afford them. Invariably, as those in the European welfare utopia are lately discovering, “free” lunches often end up costing unsuspecting diners their breakfast and dinner money, too…just as the free-market economist had warned. Deficit spending…market meddling…price controls…subsidies…bailouts and boondoggles of every stripe… You name it; the teleconomist has an ill-conceived sermon for credulous acolytes everywhere. Let’s start at the end of the beginning of the end…
***** Excellent! *****
The LONG TREND by Warren Edward Pollock excerpt:. . . . Markets must be paid for with empire. Capital resides in the life support needed to make the poor rich through compressive anticipatory design science. Freedom depends not on details but instead on the integrity of having overview. I forecast that we are in a breakdown collapse of empire, not a depression. We must work to reverse the myopic and dated concept of Malthusian shortage through integrity and comprehensive anticipatory design science. Shortly we must either act or face the consequence of societal embezzlement, a dark age.
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Income Tax vs. Consumption Tax
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Now, let's look at Health Care Reform legislation:
H.R. 3590:House version passed as an 'amendment' to a 1986 IRS bill on 12.24.2009:
Entitled ‘‘An Act to amend the Internal Revenue Code of 1986 to modify the first-time homebuyers credit in the case of members of the Armed Forces and certain other Federal employees, and for other purposes.’’
SHORTTITLE — This Act may be cited as the ‘‘Patient Protection and Affordable Care Act’’.
Health Care Reform Publications Sunday, 21 March 2010 07:25 Summary of Health Care Reform Legislation (notice the 'Obama campaign-like' logo and the words in the banner's background - socialist slogans and rhetoric) PREPARED BY THE HOUSE COMMITTEES ON WAYS AND MEANS, ENERGY AND COMMERCE, AND EDUCATION AND LABOR MARCH 23, 2010
Are seeing ONLY what the government wants us to see? Maybe it's time to look a little closer
Judge Andrew Napolitano Health-Care Reform Will Set Up "Ready Reserve" Health Corps Doctors and health care workers will training with the military and they will have power of the military. Tuition and student stipends paid by government and 2 years service is required for every one year of training.
Obama's Civilian Army is now LAW and is Funded
H.R.3590 - Became Public Law No: 111-148 Title: Patient Protection and Affordable Care Act Sponsor: Rep Rangel, Charles B. [NY-15] (introduced 9/17/2009) Cosponsors (40)
Rep Becerra, Xavier [CA-31] - 9/17/2009
Rep Berkley, Shelley [NV-1] - 9/17/2009
Rep Blumenauer, Earl [OR-3] - 9/17/2009
Rep Brown-Waite, Ginny [FL-5] - 9/17/2009
Rep Courtney, Joe [CT-2] - 10/6/2009
Rep Crowley, Joseph [NY-7] - 9/17/2009
Rep Davis, Artur [AL-7] - 9/17/2009
Rep Davis, Danny K. [IL-7] - 9/17/2009
Rep Doggett, Lloyd [TX-25] - 9/17/2009
Rep Etheridge, Bob [NC-2] - 9/17/2009
Rep Filner, Bob [CA-51] - 10/6/2009
Rep Green, Al [TX-9] - 10/6/2009
Rep Gutierrez, Luis V. [IL-4] - 10/6/2009
Rep Higgins, Brian [NY-27] - 9/17/2009
Rep Johnson, Henry C. "Hank," Jr. [GA-4] - 10/6/2009
Rep Jones, Walter B., Jr. [NC-3] - 9/17/2009
Rep Kagen, Steve [WI-8] - 9/17/2009
Rep Kind, Ron [WI-3] - 9/17/2009
Rep Larson, John B. [CT-1] - 9/17/2009
Rep Levin, Sander M. [MI-12] - 9/17/2009
Rep Lewis, John [GA-5] - 9/17/2009
Rep McDermott, Jim [WA-7] - 9/17/2009
Rep McGovern, James P. [MA-3] - 10/6/2009
Rep Meek, Kendrick B. [FL-17] - 9/17/2009
Rep Minnick, Walter [ID-1] - 10/7/2009
Rep Moore, Dennis [KS-3] - 10/6/2009
Rep Neal, Richard E. [MA-2] - 9/17/2009
Rep Pascrell, Bill, Jr. [NJ-8] - 9/17/2009
Rep Peters, Gary C. [MI-9] - 10/6/2009
Rep Platts, Todd Russell [PA-19] - 10/6/2009
Rep Pomeroy, Earl [ND] - 9/17/2009
Rep Sanchez, Linda T. [CA-39] - 9/17/2009
Rep Schwartz, Allyson Y. [PA-13] - 9/17/2009
Rep Skelton, Ike [MO-4] - 9/17/2009
Rep Stark, Fortney Pete [CA-13] - 9/17/2009
Rep Tanner, John S. [TN-8] - 9/17/2009
Rep Thompson, Mike [CA-1] - 9/17/2009
Rep Titus, Dina [NV-3] - 10/6/2009
Rep Van Hollen, Chris [MD-8] - 9/17/2009
Rep Yarmuth, John A. [KY-3] - 9/17/2009
Related Bills: H.CON.RES.254, H.RES.1203, H.R.3780, H.R.4872, S.1728, S.1790
Judge Andrew Napolitano on Obama Corps Just what are National Security Issues?
Obama Just Got His Private Army Remember when Obama said he wanted a "national security force?" Not the national guard, but a civilian force that has not sworn to uphold the Constitution but trains with the military. July 2, 2008 in a speech in Colorado Springs:
Remember that first alarming glimpse of what that army might look like? Notice how much these "Hitler youth" type young men talk about health care! . . . chanting "Alpha-Omega" as if Obama was a god.
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Bits & Pieces from H.R. 3590. . . .
Subtitle C-Increasing the Supply of the Health Care Workforce Sec. 5201. Federally supported student loan funds. Sec. 5202. Nursing student loan program. Sec. 5203. Health care workforce loan repayment programs. Sec. 5204. Public health workforce recruitment and retention programs. Sec. 5205. Allied health workforce recruitment and retention programs. Sec. 5206. Grants for State and local programs. Sec. 5207. Funding for National Health Service Corps. Sec. 5208. Nurse-managed health clinics. Sec. 5209. Elimination of cap on commissioned corps. Sec. 5210. Establishing a Ready Reserve Corps.
SEC. 5209. ELIMINATION OF CAP ON COMMISSIONED CORPS. Section 202 of the Department of Health and Human Services Appropriations Act, 1993 (Public Law 102-394) is amended by striking ''not to exceed 2,800''.
Lifts the cap of 2,800 on how many commissioned corpsmen can be recruited to implement the law . . . . government now says 6,600, but there is NO LIMIT as to how many can be recruited or conscripted into commission of national service.
The mission of the U.S. Public Health Service Commissioned Corps is to protect, promote, and advance the health and safety of our Nation. As America's uniformed service of public health professionals, the Commissioned Corps achieves its mission through:
Rapid and effective response to public health needs
Leadership and excellence in public health practices
Looks like the state may be "taking care of grandma and grandpa plus anyone with a major disability at taxpayer expense which will pay for the ElderCare (i.e. could include 'humane' warehousing of the old, the infirm, and maybe a future program for euthanasia (extermination) of the useless eaters in society under the guise of "mercy killing" together with possible physician assisted suicide):
Sec. 2405. Funding to expand State Aging and Disability Resource Centers. Sec. 2406. Sense of the Senate regarding long-term care. Sec. 3306. Funding outreach and assistance for low-income programs.
''(e) ELITE FEDERAL DISASTER TEAMS.-The Surgeon General, in consultation with the Secretary, the Director of the Centers for Disease Control and Prevention, and other appropriate military and Federal government agencies, shall develop criteria for the appointment of highly qualified Track faculty, medical, dental, physician assistant, pharmacy, behavioral and mental health, public health, and nursing students, and graduates to elite Federal disaster preparedness teams to train and to respond to public health emergencies, natural disasters, bioterrorism events, and other emergencies.
Sean Hannity: This Is Socialism
more entitlements at taxpayer expense. . .
CLASS act in health bill really isn't By SALLY C. PIPES Pacific Research Institute president and CEO Just before the curtain closed on 2009, the U.S. Senate voted to proceed with landmark health care legislation. The bill had appeared to be at a dead end, until Senate leaders assuaged moderates' concerns about cost by dropping both the "public option" and the proposed "Medicare buy-in" for people between the ages of 55 and 65. But if they were really concerned about the cost of the bill, the moderate holdouts should've requested that a third expensive provision - the so-called CLASS Act - also be dropped. The CLASS Act - an acronym for the Community Living Assistance Services and Supports Act - would establish a national long-term care insurance program. Proponents claim that it would help seniors and the disabled pay for things like an in-home caretaker or adult day services - all while purportedly lowering the federal budget deficit. But it takes some creative math to come up with those cost savings. In reality, the CLASS Act would create a massive new entitlement that would rapidly become a liability for taxpayers. America can ill-afford to add yet another money sink to its balance sheet. The CLASS program is designed to be self-financed by monthly premiums deducted from workers' paychecks. Participants in the program would be eligible for cash benefits of $50 to $100 per day if they became disabled - but only if they had paid premiums for at least five years.
Don't Be Fooled: Republicans Love Government Enforced Healthcare Kurt Nimmo Infowars.com -- Forget all the self-serving diatribes by Republicans about Obamacare. They are for government enforced health care. "Republicans were for President Barack Obama's requirement that Americans get health insurance before they were against it," the Associated Press reports this morning. Republicans trumpeted the "obligation" (at gunpoint) that Americans buy health care insurance from large monopolistic corporations for decades, long before Hill and Bill attempted to foist their version on the plebs.
Judge Andrew Napolitano Says Court Will Strike Down Obamacare
Health Care Reform Publications Sunday, 21 March 2010 07:25 On March 21, 2010, the House of Representatives took an up or down vote to improve the lives of tens of millions of American families and small businesses owners. This final health care legislation will ensure that all Americans have access to quality, affordable health care and significantly reduce long-term health care costs. Below are a number of documents that explain how the new legislation will affect you.
We ask . . . . why is this Health Care Reform legislation being 'explained' and 'promoted' by the Committee On Energy And Commerce?
Obamacare: Hidden Goodies
Overlooked Section of Health Care Law? Reform creates 'ready reserve corps' of emergency medical professionals
The health care reform bills: what employers should know now Jenner & Block - lexology.com William L. Scogland, Matthew J. Renaud, Julie A. Wenell and Gregory M. Wu
Fact Sheet: The Truth About the Health Care Bill By: Jane Hamsher Friday March 19, 2010 The Firedoglake health care team has been covering the debate in congress since it began last year. The health care bill will come up for a vote in the House on Sunday, and as Nancy Pelosi works to wrangle votes, we’ve been running a detailed whip count on where every member of Congress stands, updated throughout the day. We’ve also taken a detailed look at the bill, and have come up with 18 often stated myths about this health care reform bill. Real health care reform is the thing we’ve fought for from the start. It is desperately needed. But this bill falls short on many levels, and hurts many people more than it helps.
Hospitals, Temples of the Occult Eustace Mullins, Global Sciences Congress, August 1993
Ron Paul: Bill Makes Health-Care System Worse
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Europe Fiddles, Gold Sizzles By: John Browne - GoldSeek.com Much to the relief of jittery global markets, Greece's chronic debt problem has been papered over in a burst of European solidarity and apparent magnanimity. But this act of mercy may cost Germany its key position of financial dominance over the European Central Bank (ECB), which, in turn, could be detrimental to the long-term health of the euro. And so even though the euro stiffened once the immediate default fears abated, the price of gold was pushed to a new all-time high in euro terms (and a five-month high in dollar terms).
The Comex and The Fractional Bullion System The Golden Truth blog Everyone knows the concept behind a "fractional" banking system, right? You have $1 in deposits and you lend out $10. The Romans invented the concept and it is widely understood to have been one of the ingredients that led to Rome's demise. As per the electrifying CFTC hearings on March 26, and a fact that GATA has long understood, the Big Banks which deal in gold and silver, also known as "Bullion Banks," apply and utilize the fractional banking system to bullion dealings.
Jim Rickards: Possible Run on the Gold Bank, Fed Insolvent, Currency Endgames in US Debt Crisis JESSE'S CAFÉ AMÉRICAIN "Somewhere ahead I expect to see a worldwide panic-scramble for gold as it dawns on the world population that they have been hoodwinked by the central banks' creation of so-called paper wealth. No central bank has ever produced a single element of true, sustainable wealth. In their heart of hearts, men know this. Which is why, in experiment after experiment with fiat money, gold has always turned out to be the last man standing." Richard Russell
Jim Rickards - KingWorldNews.com April 14, 2010 In our continuing coverage of what could be the largest fraud in history we interviewed Jim Rickards the day after the release of the Harvey and Lenny Organ and Adrian Douglas blockbuster to get his opinion not only on the ScotiaMocatta vault news but also regarding the whistleblower interview with Andrew Maguire and Adrian Douglas that involves the LBMA. He also discusses how gold could go to $20,000 an ounce.
Eric Sprott on the Economy, the Markets, and the PHYS Gold Trust
Silver prices to zoom if manipulation is proved By Dr Jeffrey Lewis As the CTFC begins to investigate claims by a whistle blower that the precious metals markets have been manipulated by several large US banks, investors are left to ponder: “What will happen to silver if manipulation is found?” Can you say, payday? Silver’s Current Price At just over $18 per ounce, silver is heavily underpriced considering both its historical prices, as well as the amount of inflation in the years since. Since 1913 and the creation of the third US central bank, the Federal Reserve, the price of silver has advanced at a small discount to the actual rate of inflation. The monetary base has grown from a few billion dollars to more than $1.6 trillion since 1913, all while silver has only increased by 3000%. Though 3000% has been enough to accurately track the change in prices, it has done little to keep up with real inflation, that is, changes in the money supply.
U.S. Dollar – Grave Concerns Remain By: Axel G. Merk - GoldSeek.com We continue to see risks ahead for the U.S. economy, and in particular, the U.S. dollar. Significant global imbalances remain – indeed; the recent global financial crisis has served to exaggerate many of these imbalances. Of grave concern is the unsustainable Federal budget deficit, which may have morphed out of control, with no signs of government con
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