http://www.sott.net Signs of the Times, featuring news and commentary on world events. Never wavering in our unending search for the light of truth in a pathocracy driven world! en-us Original content Copyright 2009 by Signs of the Times. For other content, see our Fair Use Policy at www.sott.net Fri, 20 Nov 2009 15:56:27 -0500 http://www.sott.net/images/sottlogo_rss.jpg SOTT.net http://www.sott.net http://www.sott.net/articles/show/197391-US-public-debt-tops-12-trillion-for-first-time-ever The US public debt topped 12 trillion dollars for the first time in history, Treasury officials disclosed Tuesday, moving past a key barrier that raised hackles in Congress. Treasury data showed Monday's outstanding debt at 12.031 trillion dollars, up from 11.999 trillion on Friday. The ballooning debt reflects the massive deficit spending by the government in an effort to revive an ailing economy over more than one year. The public debt topped 10 trillion dollars in September 2008. The debt is quickly approaching the statutory limit of 12.104 trillion dollars, meaning Congress would have to raise the ceiling to prevent a shutdown of government operations. http://www.sott.net/articles/show/197391-US-public-debt-tops-12-trillion-for-first-time-ever Fri, 20 Nov 2009 12:33:55 -0500 http://www.sott.net/articles/show/197373-With-F-H-A-Help-Easy-Loans-in-Expensive-Areas San Francisco - In January, Mike Rowland was so broke that he had to raid his retirement savings to move here from Boston. A week ago, he and a couple of buddies bought a two-unit apartment building for nearly a million dollars. They had only a little cash to bring to the table but, with the federal government insuring the transaction, a large down payment was not necessary. "It was kind of crazy we could get this big a loan," said Mr. Rowland, 27. "If a government official came out here, I would slap him a high-five." In its efforts to prop up a shattered housing market, the government is greatly extending its traditional support of real estate, including guaranteeing the mortgages of middle-class and even upper-class buyers against default. http://www.sott.net/articles/show/197373-With-F-H-A-Help-Easy-Loans-in-Expensive-Areas Fri, 20 Nov 2009 10:41:23 -0500 http://www.sott.net/articles/show/197370-State-local-budget-cuts-a-time-bomb-for-jobs New York - Budget shortfalls poses a direct threat to millions of U.S. jobs, many in the private sector, as state and local governments lay off workers and cut spending on contracts and other business services, a think tank said on Thursday. State and local governments will have to raise taxes and cut spending in the current and next two fiscal years to cover shortfalls totaling $469 billion, according to an Economic Policy Institute report. The think tank -- where White House adviser Jared Bernstein spent years developing ideas found in the $787 billion economic stimulus plan he oversees -- said the U.S. government must give states and cities $150 billion in direct budget relief to save between 1.1 million and 1.4 million jobs. "Given the fragility of the economy, already high unemployment and the magnitude of the budget shortfalls, it is clear that we cannot afford inaction," the report said, calling the gaps "a ticking time bomb for the economy." http://www.sott.net/articles/show/197370-State-local-budget-cuts-a-time-bomb-for-jobs Fri, 20 Nov 2009 10:33:33 -0500 http://www.sott.net/articles/show/197367-US-home-foreclosures-at-record-high-as-jobs-crisis-deepens The number of home loans in the US that are either in foreclosure or at least one payment past due reached one in seven last month, a record high, according to a survey released Thursday by the Mortgage Bankers Association. The survey found that nearly 10 percent of mortgage holders were at least one payment behind on their mortgages, while 4.47 percent of them were in foreclosure. Both of these are the highest figures on records dating back to 1972. About 7 million households are behind on payments or in foreclosure. These figures present just one indicator of the worsening conditions facing US workers caught up in the longest economic downturn since the Great Depression. The number of people behind on their mortgage payments has doubled since last year, as has the percentage in foreclosure, according to the survey. The foreclosures were spread throughout all borrower categories, with high-quality, fixed-rate mortgages showing the fastest growth in delinquencies, not the sub-prime mortgages that initiated the foreclosure crisis. http://www.sott.net/articles/show/197367-US-home-foreclosures-at-record-high-as-jobs-crisis-deepens Fri, 20 Nov 2009 10:22:36 -0500 http://www.sott.net/articles/show/197344-Ireland-suffering-a-mortgage-and-rental-crisis At least 77,500 households are in arrears on their mortgages and rent payments. This is more than twice previous estimates of the numbers of people struggling to keep a roof over their heads. It is a clear sign that the country is now gripped by a mortgage and rental crisis, experts said. Also, one in five households are struggling to pay credit card bills, credit union loans and overdrafts. Higher-income families are more likely to owe money to credit card companies and to be overdrawn. The major study of incomes and living standards by the Central Statistics Office indicates that thousands of homeowners and those who rent are so deep in debt that many are at risk of losing their homes. The frightening figures underscore the mortgage misery in the country and stress the need for a rescue scheme for heavily indebted families, mortgage experts said. http://www.sott.net/articles/show/197344-Ireland-suffering-a-mortgage-and-rental-crisis Fri, 20 Nov 2009 06:25:28 -0500 http://www.sott.net/articles/show/197338-Gold-hits-record-on-inflation-fears Gold rose to a record high above $1,150 an ounce on Wednesday as stronger-than-expected U.S. consumer prices and a steadily weakening dollar stirred inflation fears. Market sentiment also improved after news that billionaire hedge fund manager John Paulson is launching a new gold fund, including $250 million of his own personal investment. Doubts about a nascent economic recovery and worries about the consequence of unprecedented quantitative easing also increased gold's appeal as a safe haven. "There is a lurking concern in the background that still exists," said Bill O'Neill, partner at LOGIC Advisors, noting that investors were worried about the vulnerability of banks and the financial system. http://www.sott.net/articles/show/197338-Gold-hits-record-on-inflation-fears Fri, 20 Nov 2009 04:18:16 -0500 http://www.sott.net/articles/show/197328-House-Panel-OKs-Granting-of-Bank-Breakup-Power A House committee voted Wednesday to give the government extraordinary new power to break up large financial firms that pose a potential risk to the economy. The proposal by Rep. Paul E. Kanjorski (D-Pa.) would allow regulators to break up such big companies before their failure becomes imminent. It goes beyond the powers requested by the Obama administration to seize large firms on the brink of failure should their collapse threaten to damage the wider financial system. "I recognize this is extraordinary power. Hopefully it will never have to be used," Kanjorski said. It would be used only if other regulatory measures did not reduce the potential threat of "huge, megalopolis-like" companies failing, he said. http://www.sott.net/articles/show/197328-House-Panel-OKs-Granting-of-Bank-Breakup-Power Fri, 20 Nov 2009 00:00:15 -0500 http://www.sott.net/articles/show/197327-SocGen-s-Proposed-Portfolio-for-a-Global-Economic-Collapse French bank Société Générale has advised clients to be ready for a possible "global economic collapse" over the next two years, The Telegraph reports. In a 68-page report titled "Worst-Case Debt Scenario," SocGen explains that the rescue packages over the past year have merely transferred private liabilities onto government shoulders, creating a fresh set of problems. Debt levels, public or private, are too high as a share of GDP. The deleveraging process will take years. SocGen says that under the bear-case scenario, the dollar would continue to decline and global equities would retest the March lows. Property prices would slide again and oil prices would fall back to $50 in 2010. Public debt would explode within two years, with worldwide state debt reaching $45 trillion. Further, the aging population will make it harder to erode debt through growth. As for the U.S., it could take nine years to reduce debt/income ratios to the safe levels of the 1980s. http://www.sott.net/articles/show/197327-SocGen-s-Proposed-Portfolio-for-a-Global-Economic-Collapse Thu, 19 Nov 2009 23:40:41 -0500 http://www.sott.net/articles/show/197324-A-fictional-hyperinflationary-scenario-The-day-the-dollar-died The following story is a potential fictional time line for the day the dollar died. I hope not to instill fear or loathing but to give everyone some perspective on a POSSIBLE outcome which does not really take much of a reach to come to any conclusion. Despite popular belief and promises from those who wish to rob you of your savings and investments, the collapse of the dollar might just be an event measured in hours, not days as their control is not what it seems..... * * * * * * Mike was less than an hour from home in Minnesota after dropping his load off in Fargo but knew he needed to top his tank off this Sunday evening to insure his rig would make it home. He pulled into the Petro Truck Stop just outside of Fargo and hopped out of the cab into the bitter twenty below temperatures which he could not believe had already hit at ten o'clock at night. He slid his fuel card into the pump waiting for the next prompt when the "SEE ATTENDANT" message flashed in the screen. He blustered, figured it was another card problem and whipped out his Master Card and slid it in after the pump reset and again the "SEE ATTENDANT" message flashed up. "What the hell is going on?" he thought to himself as he wandered into the long line of drivers boisterously yelling at managers and clerks alike. http://www.sott.net/articles/show/197324-A-fictional-hyperinflationary-scenario-The-day-the-dollar-died Thu, 19 Nov 2009 17:53:30 -0500 http://www.sott.net/articles/show/197257-Eight-charged-in-US-in-global-credit-card-fraud-ring A grand jury in the southeastern state of Atlanta indicted eight people Tuesday in a credit card fraud ring that stole nine million dollars in 280 cities around the world, the Justice Department said. Five of the indicted are Estonians. One of them, the suspected mastermind of the scheme, is in prison in Estonia awaiting extradition to the United States, the department said. One is Russian and another is Moldovan; the nationality of the eighth has not been disclosed. http://www.sott.net/articles/show/197257-Eight-charged-in-US-in-global-credit-card-fraud-ring Thu, 19 Nov 2009 02:12:51 -0500 http://www.sott.net/articles/show/197248-Basket-should-replace-U-S-dollar-as-reserve-currency-IMF-says The imperative of greater global currency stability means the world can no longer rely, as it has done since the end of the gold standard, on a currency issued by a single country, the head of the IMF said on Tuesday. Dominique Strauss-Kahn, the managing director of the International Monetary Fund, restated his view that a new global currency might evolve out of the Special Drawing Right, the Fund's in-house unit of account. "That probably has to be a basket," Strauss-Kahn said of the eventual replacement for the dollar. "In a globalised world there is no domestic solution," he told a forum http://www.sott.net/articles/show/197248-Basket-should-replace-U-S-dollar-as-reserve-currency-IMF-says Thu, 19 Nov 2009 01:27:30 -0500 http://www.sott.net/articles/show/197247-French-Bank-Soci-t-G-n-rale-tells-clients-how-to-prepare-for-global-collapse- Société Générale has advised clients to be ready for a possible "global economic collapse" over the next two years, mapping a strategy of defensive investments to avoid wealth destruction. In a report entitled "Worst-case debt scenario", the bank's asset team said state rescue packages over the last year have merely transferred private liabilities onto sagging sovereign shoulders, creating a fresh set of problems. Overall debt is still far too high in almost all rich economies as a share of GDP (350pc in the US), whether public or private. It must be reduced by the hard slog of "deleveraging", for years. "As yet, nobody can say with any certainty whether we have in fact escaped the prospect of a global economic collapse," said the 68-page report, headed by asset chief Daniel Fermon. It is an exploration of the dangers, not a forecast. Under the French bank's "Bear Case" scenario, the dollar would slide further and global equities would retest the March lows. Property prices would tumble again. Oil would fall back to $50 in 2010. http://www.sott.net/articles/show/197247-French-Bank-Soci-t-G-n-rale-tells-clients-how-to-prepare-for-global-collapse- Thu, 19 Nov 2009 01:25:20 -0500 http://www.sott.net/articles/show/197210-US-Study-says-Iowa-tax-system-unfair-to-poor Des Moines, Iowa - A study says the poorest Iowans paid nearly double the percentage of their income in taxes than the wealthiest paid, a gap the authors argue underscores the need to reform Iowa's tax system. The study by the Child and Family Policy Center showed that Iowa families making less than $20,000 annually paid roughly 11 percent of their income in state and local taxes. Earners averaging nearly $1 million paid 7.4 percent in taxes, but that was reduced to 6 percent because federal tax payments are deductible when calculating state tax liability. http://www.sott.net/articles/show/197210-US-Study-says-Iowa-tax-system-unfair-to-poor Wed, 18 Nov 2009 15:45:06 -0500 http://www.sott.net/articles/show/197209-US-Morale-low-at-a-quarter-of-workplaces Workplace morale is flagging in some offices. In a study, 23 percent of 2,900 polled workers said their current organization's employee morale is low. The CareerBuilder survey indicated that 40 percent of those polled said they have had difficulty staying motivated at work in the last year and 24 percent do not feel loyal to their current employer. http://www.sott.net/articles/show/197209-US-Morale-low-at-a-quarter-of-workplaces Wed, 18 Nov 2009 15:42:38 -0500 http://www.sott.net/articles/show/197199-The-Prosperity-Gospel-Did-Christianity-Cause-the-Crash- America's mainstream religious denominations used to teach the faithful that they would be rewarded in the afterlife. But over the past generation, a different strain of Christian faith has proliferated - one that promises to make believers rich in the here and now. Known as the prosperity gospel, and claiming tens of millions of adherents, it fosters risk-taking and intense material optimism. It pumped air into the housing bubble. And one year into the worst downturn since the Depression, it's still going strong. Like the ambitions of many immigrants who attend services there, Casa del Padre's success can be measured by upgrades in real estate. The mostly Latino church, in Charlottesville, Virginia, has moved from the pastor's basement, where it was founded in 2001, to a rented warehouse across the street from a small mercado five years later, to a middle-class suburban street last year, where the pastor now rents space from a lovely old Baptist church that can't otherwise fill its pews. Every Sunday, the parishioners drive slowly into the parking lot, never parking on the sidewalk or grass - "because Americanos don't do that," one told me - and file quietly into church. Some drive newly leased SUVs, others old work trucks with paint buckets still in the bed. The pastor, Fernando Garay, arrives last and parks in front, his dark-blue Mercedes Benz always freshly washed, the hubcaps polished enough to reflect his wingtips. It can be hard to get used to how much Garay talks about money in church, one loyal parishioner, Billy Gonzales, told me one recent Sunday on the steps out front. Back in Mexico, Gonzales's pastor talked only about "Jesus and heaven and being good." But Garay talks about jobs and houses and making good money, which eventually came to make sense to Gonzales: money is "really important," and besides, "we love the money in Jesus Christ's name! Jesus loved money too!" That Sunday, Garay was preaching a variation on his usual theme, about how prosperity and abundance unerringly find true believers. "It doesn't matter what country you're from, what degree you have, or what money you have in the bank," Garay said. "You don't have to say, 'God, bless my business. Bless my bank account.' The blessings will come! The blessings are looking for you! God will take care of you. God will not let you be without a house!" Pastor Garay, 48, is short and stocky, with thick black hair combed back. In his off hours, he looks like a contented tourist, in his printed Hawaiian shirts or bright guayaberas. But he preaches with a ferocity that taps into his youth as a cocaine dealer with a knife in his back pocket. "Fight the attack of the devil on my finances! Fight him! We declare financial blessings! Financial miracles this week, NOW NOW NOW!" he preached that Sunday. "More work! Better work! The best finances!" Gonzales shook and paced as the pastor spoke, eventually leaving his wife and three kids in the family section to join the single men toward the front, many of whom were jumping, raising their Bibles, and weeping. On the altar sat some anointing oils, alongside the keys to the Mercedes Benz. http://www.sott.net/articles/show/197199-The-Prosperity-Gospel-Did-Christianity-Cause-the-Crash- Wed, 18 Nov 2009 14:17:03 -0500 http://www.sott.net/articles/show/197191-Magic-By-Numbers-Jobs-Saved-or-Created-in-Congressional-Districts-That-Don-t-Exist Here's a stimulus success story: In Arizona's 15th congressional district, 30 jobs have been saved or created with just $761,420 in federal stimulus spending. At least that's what the Web site set up by the Obama administration to track the $787 billion stimulus says. There's one problem, though: There is no 15th congressional district in Arizona; the state has only eight districts. And ABC News has found many more entries for projects like this in places that are incorrectly identified. Late Monday, officials with the Recovery Board created to track the stimulus spending, said the mistakes in crediting nonexistent congressional districts were caused by human error. "We report what the recipients submit to us," said Ed Pound, Communications Director for the Board. Pound told ABC News the board receives declarations from the recipients - state governments, federal agencies and universities - of stimulus money about what program is being funded. http://www.sott.net/articles/show/197191-Magic-By-Numbers-Jobs-Saved-or-Created-in-Congressional-Districts-That-Don-t-Exist Wed, 18 Nov 2009 12:55:27 -0500 http://www.sott.net/articles/show/197187-About-Half-in-U-S-Would-Pay-for-Online-News-Study-Finds Americans, it turns out, are less willing than people in many other Western countries to pay for their online news, according to a new study by the Boston Consulting Group. Among regular Internet users in the United States, 48 percent said in the survey, conducted in October, that they would pay to read news online, including on mobile devices. That result tied with Britain for the lowest figure among nine countries where Boston Consulting commissioned surveys. In several Western European countries, more than 60 percent said they would pay. When asked how much they would pay, Americans averaged just $3 a month, tied with Australia for the lowest figure - and less than half the $7 average for Italians. The other countries included in the study were Germany, France, Spain, Norway and Finland. "Consumer willingness and intent to pay is related to the availability of a rich amount of free content," said John Rose, a senior partner and head of the group's global media practice. "There is more, better, richer free in the United States than anywhere else." http://www.sott.net/articles/show/197187-About-Half-in-U-S-Would-Pay-for-Online-News-Study-Finds Wed, 18 Nov 2009 12:49:08 -0500 http://www.sott.net/articles/show/197184-U-S-Inflation-Edges-Up-Housing-Starts-Fall-Sharply Construction of new homes in the United States fell sharply last month, showing potential weakness in the economy's recovery, while consumer prices rose slightly more than expected. The Commerce Department said on Wednesday housing starts dropped 10.6 percent to a seasonally adjusted annual rate of 529,000 units, the lowest level since April and the percentage drop was the biggest since January. Financial markets had expected starts to rise to 600,000 units. September's housing starts were revised upwards to a 592,000 unit rate from the previously reported 590,000 units. "The trickle-down effect of the housing number is going to be amazing," said Dan Cook, senior market analyst at IG Markets, Chicago. "It's likely that more construction crews will get cut after this, and the supplier who supply those crews will be hurt as well. This is not good news at all." http://www.sott.net/articles/show/197184-U-S-Inflation-Edges-Up-Housing-Starts-Fall-Sharply Wed, 18 Nov 2009 12:36:59 -0500 http://www.sott.net/articles/show/197182-Nearly-15-000-Rich-Americans-Admit-Offshore-Tax-Cheating Some 14,700 rich Americans, worried about a stepped-up U.S. crackdown on offshore tax cheats, have turned themselves in under the government's amnesty program. The Internal Revenue Service amnesty program, which ended in October, offered reduced penalties for voluntarily disclosing previously undeclared foreign holdings. It is part of a broader effort by the United States and other authorities to crack down on tax evasion. Of the nearly 15,000 newly disclosed accounts, many involved bank accounts in Switzerland and Europe, but assets were hidden in more than 70 countries. Participation in the IRS program was "unprecedented" and the final number was nearly double the agency's estimate in October, U.S. Internal Revenue Service Commissioner Douglas Shulman told reporters in a telephone briefing. http://www.sott.net/articles/show/197182-Nearly-15-000-Rich-Americans-Admit-Offshore-Tax-Cheating Wed, 18 Nov 2009 12:28:55 -0500 http://www.sott.net/articles/show/197147-The-15-Biggest-Congressional-Recipients-Of-Wall-Street-Campaign-Cash Reforming Wall Street is a hot topic on Capitol Hill these days. Congress is currently weighing two financial reform bills that would, to varying degrees, reshape the way the financial system is regulated. Still, Wall Street's influence in Washington appears to be as strong as ever. After all, it was just last spring that Senator Dick Durbin, frustrated by pushback on bankruptcy reform, denounced the financial sector's influence on the Senate: the banks, he said, "they frankly own the place." The Center for Responsive Politics, a research group that tracks money in politics, reports that financial industries -- the finance, insurance and real estate sectors, specifically -- have been one of the biggest benefactors to Congress over the past two decades: "The finance, insurance and real estate sector has given $2.3 billion to candidates, leadership PACs and party committees since 1989, which eclipses every other sector. Nineteen percent of total contributions from the employees and political action committees across all sectors came from the financial sector." And while campaign contributions don't equate to wrongdoing, it's worth noting that, while lawmakers ponder reforming the financial sector, the industry's campaign contributions have remained strong: "Even with a number of large financial institutions folding or merging since last fall, the sector has still given more to federal candidates and party committees than any other sector this year at $78.2 million. Current lawmakers have brought in $661.6 million from the sector through their candidate committees and leadership PACs, with Democrats collecting 53 percent of that." We took a look at the Center for Responsive Politics's database, OpenSecrets.org, to see which members of Congress have so far received Wall Street money for the 2010 election cycle. The answers may surprise you. http://www.sott.net/articles/show/197147-The-15-Biggest-Congressional-Recipients-Of-Wall-Street-Campaign-Cash Wed, 18 Nov 2009 03:22:17 -0500 http://www.sott.net/articles/show/197099-GLD-ETF-Warning-Tungsten-Filled-Fake-Gold-Bars "Gold Finger - A New Take On Operation Grand Slam With A Tungsten Twist" I've already reported on irregular physical gold settlements which occurred in London, England back in the first week of October, 2009. Specifically, these settlements involved the intermediation of at least one Central Bank [The Bank of England] to resolve allocated settlements on behalf of J.P. Morgan and Deutsche Bank - who DID NOT have the gold bullion that they had sold short and were contracted to deliver. At the same time I reported on two other unusual occurrences: 1] - irregularities in the publication of the gold ETF - GLD's bar list from Sept. 25 - Oct.14 where the length of the bar list went from 1,381 pages to under 200 pages and then back up to 800 or so pages. 2] - reports of 400 oz. "good delivery" bricks of gold found gutted and filled with tungsten within the confines of LBMA approved vaults in Hong Kong. http://www.sott.net/articles/show/197099-GLD-ETF-Warning-Tungsten-Filled-Fake-Gold-Bars Tue, 17 Nov 2009 10:14:24 -0500 http://www.sott.net/articles/show/197097-Bank-of-America-UBS-JPMorgan-Sued-Over-Derivatives Bank of America Corp., UBS AG and JPMorgan Chase & Co. were sued by a California public utility over claims they rigged sales of municipal derivatives and shared illegal profits through kickbacks. The lawsuit, filed by the Sacramento Municipal Utility District, is based on federal and state antitrust claims. It alleges Charlotte, North Carolina-based Bank of America and more than a dozen other banks conspired to pre-select winners of municipal derivative auctions, coordinated their pricing, and accepted kickbacks disguised as fees from co-conspirators. http://www.sott.net/articles/show/197097-Bank-of-America-UBS-JPMorgan-Sued-Over-Derivatives Tue, 17 Nov 2009 09:47:46 -0500 http://www.sott.net/articles/show/197095-While-the-music-plays-funds-gotta-dance With just a few short weeks until the end of the year, look for many fund managers to take on more risk in an effort to salvage their annual return figures. This is not about fundamentals, this is about something far more important: career risk. Hedge Fund Research's Global Hedge Fund index, which is broadly representative of the industry, is up just 11.9 percent year to date, while its Equity Hedge index is scarcely doing better, up 12.6 percent. The HFR Macro Fund index is actually down 8 percent, indicating the best paid minds in the business did not see the astounding emerging markets rally and dollar fall coming. Given that global emerging markets are up something on the order of 60 percent this year, that all global shares are up 30 percent and even the S&P 500 is up 22 percent, we can conclude that a lot of managers are heading into the year-end reporting season with a lot of ground to make up. http://www.sott.net/articles/show/197095-While-the-music-plays-funds-gotta-dance Tue, 17 Nov 2009 09:39:50 -0500 http://www.sott.net/articles/show/197078-ADL-covering-up-for-crimes-of-financial-elites The ADL is accusing the New York Times Maureen Dowd of anti-semitism over a recent op-ed titled "Virtuous Bankers? Really!?!" The article about corruption on Wall Street specifically involving Goldman Sachs. In a letter to the Editor in the NYT, ADL National Chair Robert G. Sugarman stated, "While one can agree or disagree with Maureen Dowd's portrayal of Goldman Sachs and other bankers (column, Nov. 11), her statement that "the bankers who took government money and then gave out obscene bonuses are the same self-interested sorts Jesus threw out of the temple" potentially raises one of the classic themes of anti-Semitism linking Jews and abhorrent money-lending practices. However unintentional, Ms. Dowd's invoking the New Testament story to illustrate our current financial mess conjures up old prejudices against Jews." Dowd is right when she states that Goldman Sachs CEO "Blankfein's trickle-down catechism isn't working. Now we have two economies. We have recovering banks while we have 10-plus percent unemployment and 17.5 percent underemployment. The gross thing about the Wall Street of the last decade is how much its success was not shared with society." http://www.sott.net/articles/show/197078-ADL-covering-up-for-crimes-of-financial-elites Mon, 16 Nov 2009 22:27:58 -0500 http://www.sott.net/articles/show/197050-The-greatest-country-on-Earth-Around-50-million-Americans-go-hungry The number of Americans who lack dependable access to adequate food shot up last year to 49 million, the largest number since the government has been keeping track, according to a federal report released Monday that shows particularly steep increases in food scarcity among families with children. In 2008, the report found, nearly 17 million children -- more than one in five across the United States -- were living in households in which food at times ran short, up from slightly more than 12 million youngsters the year before. And the number of children who sometimes were outright hungry rose from nearly 700,000 to almost 1.1 million. Among people of all ages, nearly 15 percent last year did not consistently have adequate food, compared with about 11 percent in 2007, the greatest deterioration in access to food during a single year in the history of the report. Taken together, the findings provide the latest glimpse into the toll that the weak economy has taken on the well-being of the nation's residents. The findings are from a snapshot of food in America that the U.S. Agriculture Department has issued every year since 1995, based on Census Bureau surveys. It documents both Americans who are scrounging for adequate food -- people living with some amount of "food insecurity" in the lexicon of experts -- and those whose food shortages are so severe that they are hungry. http://www.sott.net/articles/show/197050-The-greatest-country-on-Earth-Around-50-million-Americans-go-hungry Mon, 16 Nov 2009 17:03:00 -0500 http://www.sott.net/articles/show/197040-New-Derivatives-Legislation-Was-Probably-Written-by-JPMorgan-and-Goldman-Sachs- As I have repeatedly written (see this and this), the new derivatives legislation is so bad that it probably increases - rather than decreases - the risk to the financial system. William Greider has a great piece in The Nation pointing out: Who drafted this dubious piece of legislation? Bankers (or their lawyers) did. The leading sellers of derivatives are an exclusive club of five very large financial institutions--Citigroup, JPMorgan Chase, Bank of America, Morgan Stanley and Goldman Sachs--that hold 95 percent of the derivatives exposure among the largest banks (the total contract value exceeds $290 trillion). These are the same folks who toppled the global economy and compelled government to intervene with gigantic bailouts. http://www.sott.net/articles/show/197040-New-Derivatives-Legislation-Was-Probably-Written-by-JPMorgan-and-Goldman-Sachs- Mon, 16 Nov 2009 15:40:10 -0500 http://www.sott.net/articles/show/197032-Food-Short-for-14-6-Percent-of-U-S-Households One in seven Americans struggles to get enough to eat, the government reported on Monday, and more than a third go hungry from time to time -- the highest levels since the "food security" report began in 1995. The new report covers 2008, when the United States was in economic recession and financial markets plunged. The jobless rate has surged past 10 percent. The number of households with trouble providing enough food for all family members rose sharply in 2008 from the preceding year, said the Agriculture Department (USDA), which produces the annual report. It is based on a survey conducted each December. "The recession has made the problem of hunger worse, and it has also made it more visible," said David Beckmann of the antihunger group Bread for the World. Beckman called for stronger federal antihunger programs. The school lunch and school breakfast programs are due for renewal. http://www.sott.net/articles/show/197032-Food-Short-for-14-6-Percent-of-U-S-Households Mon, 16 Nov 2009 13:37:58 -0500 http://www.sott.net/articles/show/196996-U-S-Empire-in-Decline-on-Collision-Course-with-China The U.S. is an empire in decline, according to Niall Ferguson, Harvard professor and author of The Ascent of Money. "People have predicted the end of America in the past and been wrong," Ferguson concedes. "But let's face it: If you're trying to borrow $9 trillion to save your financial system...and already half your public debt held by foreigners, it's not really the conduct of rising empires, is it?" Given its massive deficits and overseas military adventures, America today is similar to the Spanish Empire in the 17th century and Britain's in the 20th, he says. "Excessive debt is usually a predictor of subsequent trouble." Putting a finer point on it, Ferguson says America today is comparable to Britain circa 1900: a dominant empire underestimating the rise of a new power. In Britain's case back then it was Germany; in America's case today, it's China. http://www.sott.net/articles/show/196996-U-S-Empire-in-Decline-on-Collision-Course-with-China Sun, 15 Nov 2009 23:31:40 -0500 http://www.sott.net/articles/show/196993-Making-Wall-Street-pay Wall Street's irresponsible bankers caused this economic crisis. It's only fair that they pay to clean up their mess The deficit hawk crew, famous for missing the $8tn housing bubble that wrecked the economy, is now on the warpath, pressing the case for a big, new, national sales tax. They claim that the United States badly needs additional revenue to address projected budget shortfalls. While we may need additional revenue at some point, it makes far more sense to impose a financial transactions tax, which would primarily hit the Wall Street banks that gave us this disaster, than to tax the consumption of ordinary working families. We can raise large amounts of money by taxing the speculation of the Wall Street high-flyers while barely affecting the sort of financial dealings that most of us do in our daily lives. The logic of a financial transactions tax is simple. It would impose a modest fee on trades of stocks, futures, credit default swaps and other financial instruments. For example, the UK puts a 0.25% tax on the sale or purchase of shares of stock. This has very little impact on people who buy stock with the intent of holding it for a long period of time. http://www.sott.net/articles/show/196993-Making-Wall-Street-pay Sun, 15 Nov 2009 22:43:13 -0500 http://www.sott.net/articles/show/113226-How-to-Break-the-American-Trance If we Americans are split into two meaningful camps, it is not conservative versus liberal. The two camps are the politically awake and the hypnotized. The following is a speech given by 92-year-old Doris "Granny D" Haddock, who walked across the U.S. in 1999-2000 for campaign finance reform. She made this speech to Citizens for Participation in Political Action in Boston, on Sept. 27, 2002. ****************************** I want to begin by congratulating you for all the work you do. I know it is often frustrating work. You are blessed to be able to see ahead to a world of cooperation and peace -- a world of justice and sustainable economies and meaningful democracies. You wonder why others cannot or will not see these things or reach out for them, and why they in fact oppose the obvious good -- why they take the part of the oppressor, the blindered war horse. I would like us to take a few moments to consider why this work is so hard, and what we might do to move toward our common dreams more rapidly and with greater joy. Some of you may be old enough to remember the Reagan Administration. Mr. Reagan and those around him believed in a very new kind of American hero. This new hero was a business hero -- not the fellow who built up a family furniture store on Main Street and supported the Little League and the Scouts; this new hero was not the woman who worked late hours to create a successful travel agency, nor was this new business hero anything like any of the hard-working Americans who built-up our middle class, advanced our standard of living and gave us the resources and leisure for the proper civic life of a democracy, with its leagues and Rotaries and Lions and Elks and VFWs and party conventions and all that glory. No, the Reagan business hero was the corporate takeover artist. http://www.sott.net/articles/show/113226-How-to-Break-the-American-Trance Sun, 15 Nov 2009 22:04:55 -0500 http://www.sott.net/articles/show/196987-What-Will-It-Take-to-Break-Our-Trance- We are rapidly returning to the uncivilized Law of the Jungle. We will soon live in a world where brute force rules. It is not only the disabled, widows, children and orphans who are vulnerable to the cruelties of this jungle. We all are. We have been brainwashed with incessant slogans like "Get the government off your back," and "Keep more of your own money... oppose all tax increases." Our dominant, false ideology tells us that every function of government must be privatized, so that governmental functions can be performed with business-like efficiency. (We are not told that the real reason for privatizing is to give capitalists yet another opportunity for making short term profit.) The very concept that we humans might work and cooperate together to protect ourselves from Jungle dangers and to meet our common needs is shunned as "socialism," as if that were something evil. The capitalists have brainwashed themselves, and they have brainwashed us. They along with the rest of us hope and assume that the common good will somehow automatically take care of itself, if they think about the common good at all. Each capitalist must be concerned only with his own private profit and cannot be concerned with the common good lest some competitor captures his profit making opportunity. We are a nation of millions of brainwashed individualists, living, working, and acting under false perceptions of reality as if we were all "Manchurian Candidates." We have forgotten that government is the only effective institution that we have to protect us from the brute force of the Law of the Jungle. If we do not very quickly awaken from our trance, and act together in a cooperative human community, millions of us will perish. Ironically, most wealthy capitalists will themselves be destroyed in this looming Jungle. http://www.sott.net/articles/show/196987-What-Will-It-Take-to-Break-Our-Trance- Sun, 15 Nov 2009 21:07:38 -0500 http://www.sott.net/articles/show/196974-Recession-Intensifies-GenX-Discontent-at-Work They're antsy and edgy, tired of waiting for promotion opportunities at work as their elders put off retirement. A good number of them are just waiting for the economy to pick up so they can hop to the next job, find something more fulfilling and get what they think they deserve. Oh, and they want work-life balance, too. Sounds like Gen Y, the so-called "entitlement generation," right? Not necessarily, say people who track the generations. In these hard times, they're also hearing strong rumblings of discontent from Generation X. They're the 32- to 44-year-olds who are wedged between baby boomers and their children, often feeling like forgotten middle siblings - and increasingly restless at work as a result. http://www.sott.net/articles/show/196974-Recession-Intensifies-GenX-Discontent-at-Work Sun, 15 Nov 2009 15:35:43 -0500 http://www.sott.net/articles/show/196973-The-Money-Man-s-Best-Friend The Obama administration promised to reform the financial system and make it safe for the rest of us, but recent Congressional action is more likely to reset the fuse for another explosive calamity. The time bomb in this case is that arcane financial instrument known as derivatives--the hedging devices that the big banks sell to investors, corporations and other banks to reduce risk or evade the requirements to hold adequate capital on their books. As the financial meltdown demonstrated, derivatives do not reduce risk. They amplify it and spread it around interlocking networks of unwitting investors. That house of cards collapsed worldwide a year ago. It would be tragic to let the bankers build a new one. Some reformers think all but the simplest, most visible forms of derivatives should be prohibited by law. The president prefers instead to regulate them. Derivatives, his advisers explained, would be less dangerous if they were traded openly in financial markets, just like stocks and bonds. Regulators could then put the brakes on dangerous excess if they saw it developing. Anyway, that was the theory. But the "reform" legislation approved by the House Financial Services Committee on October 15 is a fiesta of exemptions, exceptions and twisted legalese that effectively defeat the original purpose. Only experts can divine the actual meaning of the bill's densely worded provisions, and many of them have reacted with disgust. The "entanglements of derivatives exposures" among oversize banks "is the equivalent of the San Andreas Fault of our financial system," veteran financier Robert Johnson testified at an October 7 hearing on the draft bill. If Congress does not disarm derivatives, he warned, it could lead to another cascade of failure that would give regulators no choice but once again to rush to the rescue of the banks dubbed "too big to fail." http://www.sott.net/articles/show/196973-The-Money-Man-s-Best-Friend Sun, 15 Nov 2009 14:36:47 -0500 http://www.sott.net/articles/show/196964-Sacramento-Municipal-Utility-District-sues-Wall-St-firms-over-alleged-bid-rigging The Sacramento Municipal Utility District sued Goldman Sachs, Morgan Stanley and 45 other financial firms Thursday in Sacramento federal court for allegedly rigging bids in bond-derivatives markets and defrauding the utility. SMUD joined at least six city and county governments in California that already have filed similar lawsuits arising from a federal investigation made public in 2006. Many other public entities around the country have joined in lawsuits seeking class-action status. The SMUD filing is the first to name Goldman Sachs as a defendant, according to lawyers working with the utility. The litigation deals with bond-related financial instruments often used by local and state governments and other public entities when financing projects such as power plants. http://www.sott.net/articles/show/196964-Sacramento-Municipal-Utility-District-sues-Wall-St-firms-over-alleged-bid-rigging Sun, 15 Nov 2009 12:12:42 -0500 http://www.sott.net/articles/show/196939-Congressional-Statements-Ghostwritten-by-Lobbyists In the official record of the historic House debate on overhauling health care, the speeches of many lawmakers echo with similarities. Often, that was no accident. Statements by more than a dozen lawmakers were ghostwritten, in whole or in part, by Washington lobbyists working for Genentech, one of the world's largest biotechnology companies. E-mail messages obtained by The New York Times show that the lobbyists drafted one statement for Democrats and another for Republicans. The lobbyists, employed by Genentech and by two Washington law firms, were remarkably successful in getting the statements printed in the Congressional Record under the names of different members of Congress. Genentech, a subsidiary of the Swiss drug giant Roche, estimates that 42 House members picked up some of its talking points - 22 Republicans and 20 Democrats, an unusual bipartisan coup for lobbyists. In an interview, Representative Bill Pascrell Jr., Democrat of New Jersey, said: "I regret that the language was the same. I did not know it was." He said he got his statement from his staff and "did not know where they got the information from." http://www.sott.net/articles/show/196939-Congressional-Statements-Ghostwritten-by-Lobbyists Sun, 15 Nov 2009 07:42:17 -0500 http://www.sott.net/articles/show/196922-US-monetary-system-Robber-Baron-era-design-makes-US-debt-peons-forever-You-knew-that-right- "At first blush, a man is not capable of reporting truth; he must be drenched and saturated with it first." - Henry David Thoreau, I to Myself. As I've previously written, the interest payment on the national debt is now ~$450 billion every year, there is no plan to ever repay the debt (we only pay the interest), and our monetary system only and always creates money as debt: condemning us to perpetually increasing debt for ourselves and our posterity. This debt-based monetary system was institutionalized through the Robber-Baron Federal Reserve in 1913. It takes the money-creation power of the US and transfers it to banks, that then create money as debt and lend it to us. Because the government gave away this power, they have to borrow their own money. The solution, as advocated by many of the America's brightest historical minds, is to merely transfer the money-creation power back to the people. The idea is supported among US third parties, and growing factions among the Republican and Democratic parties. The most well-known current journalists/advocates on this topic that I know of are Ellen Brown, Bill Still, Paul Grignon, and Stepen Zarlenga. What this policy change means is to transfer power to the peoples' representatives, government, which will require a concurrent (and unimaginable) transformation of transparency and accountability. As we know, when our government and so-called mainstream media lie about policy of such magnitude as military invasions that kill millions, you can count on their lies with trillions of dollars. A political strategy of state-level, rather than national, might be a better starting place (and here). http://www.sott.net/articles/show/196922-US-monetary-system-Robber-Baron-era-design-makes-US-debt-peons-forever-You-knew-that-right- Sat, 14 Nov 2009 20:54:42 -0500 http://www.sott.net/articles/show/196888-Obama-Under-Fire-on-Trade-as-Asia-Pacific-Leaders-Meet US President Barack Obama came under fire Saturday from Asia-Pacific leaders for backsliding on free trade at a regional summit devoted to driving the world economy out of crisis. "President Obama is facing severe political constraints that run counter to free trade," Mexican President Felipe Calderon said, complaining about US foot-dragging on full implementation of the NAFTA pact for North America. "The cruel paradox is that within a global economy, what really kills companies is inefficiency and lack of competition. Therefore protectionism is killing North American companies," he said in a speech in Singapore. "So I think this has to do with the fact that the US government is under strong political pressure that really is not being counteracted from the political perspective" of the Obama administration. The US Congress has turned even more sour on free trade after the worst economic crisis since World War II. One landmark pact with South Korea is languishing and critics say the White House has done little to revive it. http://www.sott.net/articles/show/196888-Obama-Under-Fire-on-Trade-as-Asia-Pacific-Leaders-Meet Sat, 14 Nov 2009 17:43:48 -0500 http://www.sott.net/articles/show/196882-Obama-eyes-spending-freeze-to-tackle-deficits Record imbalance could endanger economy, Democrats' political prospects Washington - The Obama administration has alerted domestic agencies to plan for a freeze or even a 5 percent cut in their budgets, part of an election-year push to rein in record deficits that threaten the economy and Democrats' political prospects next fall. China, the largest foreign holder of U.S. Treasury securities, has expressed concern about the size of U.S. deficits. U.S. policymakers worry that alarm over deficits could push foreigners into cutting back on their purchases of Treasury debt. President Barack Obama will visit China as part of his current tour of Asia. White House budget director Peter Orszag said Friday that it is imperative to start curbing the flow of red ink in coming years so as not to erode the fledgling economic recovery and raise interest rates. But he called it a balancing act and said acting too fast could undercut the recovery. http://www.sott.net/articles/show/196882-Obama-eyes-spending-freeze-to-tackle-deficits Sat, 14 Nov 2009 17:29:03 -0500 http://www.sott.net/articles/show/196878-California-braces-for-new-state-budget-gap San Francisco - California's fiscal watchdog will soon release a report pointing to yet another massive state budget deficit sure to trigger weeks if not months of angst in the state capital of Sacramento. Governor Arnold Schwarzenegger expects as much as he has repeatedly been snared in heated debates with and among lawmakers over how to balance the state's books. There also are fresh memories of marathon talks that ended in July with a deal to close a shortfall of more than $24 billion. California's economy has not improved since then and this week Schwarzenegger began airing his own estimate of the budget gap he expects for the remainder of the current fiscal year. He pegs it at $5 billion to $7 billion -- before the $7.4 billion gap his finance advisors had previously forecast for the next fiscal year beginning in July. Experts say California's combined deficit for the two years will top $15 billion and may swell well beyond that depending on how the state's revenues fare. http://www.sott.net/articles/show/196878-California-braces-for-new-state-budget-gap Sat, 14 Nov 2009 17:18:55 -0500 http://www.sott.net/articles/show/196791-Gerald-Celente-American-Public-Losing-Everything-to-Facist-Oligarchs- Gerald Celente is one of the world's best trend forecasters. In the following 4-part radio interview, Celente blasts current political and economic "leadership" as beholden to large corporate and financial interests. As I've documented, professionals who work with economics are using unprecedented harsh language in attempt to get Americans' attention to the loss of trillions of our collective dollars. His comments include (paraphrased): "Too big to fail" banks are anathema to real capitalism. US economy is like a ruthless mafia ripping-off the American public. The US is being looted. US economy is no longer capitalism, it's oligarchies and fascism. We are witnessing the greatest heist in American history, and the banks are doing it. I don't like getting raped. I don't like my money going to Goldman Sachs." Do you have eyes to see and a mind to understand? These crimes are an affront to my intelligence. Bankers are money junkies lying to get their money fix. We have a criminal gang of money junkies dealing scams to get money from us. They never have enough. And for what? For gambling. This is no different from the French Revolution. The money junkies are in for a shock. The second American Revolution has begun. They are not my political leaders; they are political hacks. We are going back to royalty and serfs. This country doesn't have a clue what's going on, their minds have been deadened looking at presidential reality shows and bowing to political demagogues. What people have to do more than ever is think for themselves. And reform is not on the way. Senator Bird's "reform" bill is nothing but empty rhetoric. My favorite economic analyst, Washington's Blog, gives a great overview. One helpful context to consider is the American economy is suffering from parasites. http://www.sott.net/articles/show/196791-Gerald-Celente-American-Public-Losing-Everything-to-Facist-Oligarchs- Fri, 13 Nov 2009 19:32:25 -0500 http://www.sott.net/articles/show/196796-New-York-Times-Blames-Workers-for-Unemployment- When I read the headline "American Wages out of Balance" on page 2 of the New York Times business section, I figured it would be a well-reasoned piece about our obscene distribution of income. It would be good for the Times to describe how Wall Street profits and bonuses, derived from our bailout funds, will further exacerbate problematic wealth disparities. No such luck. The Breakingviews.com column was all about how the American worker is overpaid! I kid you not. Edward Hadas, Martin Huchinson and Antony Currie inform us that: American manufacturing workers should take average real wage cuts of as much as 20 percent to get into global balance. They don't mention that the average non-supervisory worker has already taken an 18 percent cut in real wages between 1973 and 2007. What's worse, they claim that if workers don't take these additional cuts, these "overpaid" working stiffs will be the cause of another Great Depression, and I'm not overstating their claim. They write: But if American wages get stuck above global market-clearing levels, as in the 1930s, the result could well be something approaching Depression-era levels of unemployment. http://www.sott.net/articles/show/196796-New-York-Times-Blames-Workers-for-Unemployment- Fri, 13 Nov 2009 15:59:38 -0500 http://www.sott.net/articles/show/196794-U-S-Economy-Consumer-Sentiment-Falls-as-Unemployment-Mounts Confidence among U.S. consumers unexpectedly dropped in November as the loss of jobs threatened to undermine the biggest part of the economy. The Reuters/University of Michigan preliminary sentiment index decreased to a three-month low of 66 from 70.6 in October. A report from the Commerce Department showed the trade deficit widened in September by the most in a decade as rising demand for imported oil and automobiles swamped a fifth consecutive gain in exports. Rising joblessness puts the economy at risk of slipping into a vicious circle of firings and declines in consumer spending that will limit the emerging recovery. The dollar's 12 percent decline since March and growing demand from Asia and Europe will probably spur exports further, giving factories a lift and making up for some of the weakness among households. http://www.sott.net/articles/show/196794-U-S-Economy-Consumer-Sentiment-Falls-as-Unemployment-Mounts Fri, 13 Nov 2009 15:18:41 -0500 http://www.sott.net/articles/show/196776-Mississippi-Sees-Catastrophic-Crop-Losses Rain from Tropical Storm Ida further slowed the cotton, soybean and sweet potato harvest in Mississippi, where crop losses were devastating even before the storm hit, a state agriculture official said on Thursday. "We're seeing catastrophic losses," Andy Prosser, a spokesman for the Mississippi Department of Agriculture and Commerce, said in a phone interview. Ida swept in from the Gulf of Mexico into neighboring Alabama on Tuesday. Mississippi was spared a direct hit but still got an unwelcome soaking. "We got a few counties in east Mississippi that did get a lot of rain. Of course any more rain at this point is not good in terms of crop harvest," Prosser said. At the start of the month, state economists estimated Mississippi's crop losses at $485 million. The southern U.S. state expected to lose two-thirds of its sweet potato crop, half its cotton and 44 percent of its soybeans. http://www.sott.net/articles/show/196776-Mississippi-Sees-Catastrophic-Crop-Losses Fri, 13 Nov 2009 12:11:38 -0500 http://www.sott.net/articles/show/196750-Dollar-falls-to-15-month-low-despite-US-support The dollar dropped to a new 15-month low as the the euro rose above $1.50 Wednesday morning, even as Treasury Secretary Timothy Geithner reiterated the administration's stance that a strong dollar is good for the U.S. economy. Geithner, in a speech in Tokyo on his way to a summit of Asian finance ministers in Singapore, also said low interest rates and other government supports for the economy were still needed. The expectation that the Federal Reserve will keep the key U.S. interest rate near zero has been weighing on the dollar. Higher interest rates make a currency more attractive for investors, since bets made in that currency can earn higher returns. In morning trading in New York, the 16-nation euro rose to $1.5026 from $1.4978 late Tuesday. The British pound fell to $1.6665 from $1.6737, and the dollar edged up to 89.80 Japanese yen from 89.77 yen. http://www.sott.net/articles/show/196750-Dollar-falls-to-15-month-low-despite-US-support Fri, 13 Nov 2009 10:37:28 -0500 http://www.sott.net/articles/show/196741-Yuan-Straitjacket-Risks-Inflating-China-Bubbles China is facing the biggest challenge to its currency policy since the start of the global recession as economists warn the peg to the dollar risks causing an asset bubble. As recently as Nov. 9, People's Bank of China Governor Zhou Xiaochuan said he didn't feel much pressure to let the yuan rise, deflecting calls for an increase as exports start to recover and President Barack Obama prepares to discuss the issue in Beijing next week. China's stance risks adding to liquidity after credit surged by $1.3 trillion this year, according to Fred Hu at Goldman Sachs Group Inc. China's sales of yuan to keep it fixed to the dollar contributed to a 29 percent jump in money supply, and the peg helped spur more than $150 billion in speculative funds from overseas in the past six months, China International Capital Corp. says. Record apartment prices and a 74 percent climb in the benchmark stock index this year are prompting warnings that the policy is inflating asset prices excessively. http://www.sott.net/articles/show/196741-Yuan-Straitjacket-Risks-Inflating-China-Bubbles Fri, 13 Nov 2009 09:41:58 -0500 http://www.sott.net/articles/show/196739-Europe-s-Economy-Emerges-from-Recession-on-Exports The euro-area economy emerged from its worst recession since World War II in the third quarter as exports from Germany and France helped compensate for households' reluctance to increase spending. Gross domestic product in the economy of the 16 nations using the euro rose 0.4 percent from the second quarter, when it fell 0.2 percent, the European Union's statistics office in Luxembourg said today. Economists had forecast the economy to grow 0.5 percent, according to the median of 34 estimates in a Bloomberg survey. Europe's economy is gathering strength after governments stepped up stimulus measures and the European Central Bank injected billions of euros into markets to encourage lending. While confidence in the economic outlook is at a 13-month high, rising unemployment, the expiration of stimulus plans and a surging euro are threatening to undermine a recovery. http://www.sott.net/articles/show/196739-Europe-s-Economy-Emerges-from-Recession-on-Exports Fri, 13 Nov 2009 09:39:32 -0500 http://www.sott.net/articles/show/196738-Dollar-Overwhelms-Central-Banks-From-Brazil-to-Korea Brazil, South Korea and Russia are losing the battle among developing nations to reduce gains in their currencies and keep exports competitive as the demand for their financial assets, driven by the slumping dollar, is proving more than central banks can handle. South Korea Deputy Finance Minister Shin Je Yoon said yesterday the country will leave the level of its currency to market forces after adding about $63 billion to its foreign exchange reserves this year to slow the appreciation of the won. Chile Finance Minister Andres Velasco said the same day that lawmakers approved an increase in local debt sales to finance spending, a move that will allow the government to keep more of its dollar-based savings overseas and slow the peso's rally. Governments are amassing record foreign-exchange reserves as they direct central banks to buy dollars in an attempt to stem the greenback's slide and keep their currencies from appreciating too fast and making their exports too expensive. Half of the 10-best performers in the currency market this year came from developing markets, gaining at least 14 percent on average, according to data compiled by Bloomberg. http://www.sott.net/articles/show/196738-Dollar-Overwhelms-Central-Banks-From-Brazil-to-Korea Fri, 13 Nov 2009 09:30:26 -0500 http://www.sott.net/articles/show/196711-The-Fed-s-Woody-Allen-Policy Efforts to stoke a recovery may be creating new asset bubbles in equities and elsewhere. In the Woody Allen film Annie Hall, the main character tries to explain irrational relationships by recounting an old joke. "This guy goes to a psychiatrist and says, 'My brother's crazy, he thinks he's a chicken.' The doctor says, 'Well, why don't you turn him in?' And the guy says, 'I would, but I need the eggs.'" It takes similar reasoning to reconcile the elation felt across America every time the stock market rises - partially replenishing personal investment portfolios and 401(k) retirement plans - with the uneasy feeling that we are being set up for yet another big financial disappointment. We dare to hope that the economy is growing solidly once more, that the Federal Reserve has superior knowledge about providing liquidity, and that the U.S. Treasury knows what it's doing by guaranteeing money market-fund assets. http://www.sott.net/articles/show/196711-The-Fed-s-Woody-Allen-Policy Thu, 12 Nov 2009 22:32:46 -0500 http://www.sott.net/articles/show/196709-Reflections-on-Glass-Steagall-and-Maniacal-Deregulation Today marks the 10-year anniversary of the passage of the repeal of the 1933 Glass-Steagall Act and related legislation. It is an anniversary worth noting for what it teaches us about forestalling financial crises, the consequences of maniacal deregulation, and the out-of-control political power of the megafinancial institutions. The repeal of Glass-Steagall removed the legal prohibition on combinations between commercial banks on the one hand, and investment banks and other financial services companies on the other. Glass-Steagall's strict rules originated in the U.S. government's response to the Depression and reflected the learned experience of the severe dangers to consumers and the overall financial system of permitting giant financial institutions to combine commercial banking with other financial operations. Glass-Steagall protected depositors and prevented the banking system from taking on too much risk by defining industry structure: Commercial banks could not maintain investment banking or insurance affiliates (nor affiliates in non-financial commercial activity). As banks eyed the higher profits in higher risk activity, however, they began in the 1970s to breach the regulatory walls between commercial banking and other financial services. Starting in the 1980s, responding to a steady drumbeat of requests, regulators began to weaken the strict prohibition on cross-ownership. http://www.sott.net/articles/show/196709-Reflections-on-Glass-Steagall-and-Maniacal-Deregulation Thu, 12 Nov 2009 21:14:27 -0500 http://www.sott.net/articles/show/196702-California-finances-plummet-less-than-three-months-after-budget-passage California finance officials have announced that the state has a current budget deficit of $1.1 billion. News of the shortfall comes less than 10 weeks after a balanced budget deal was reached by Republican Governor Arnold Schwarzenegger and the State Legislature. An October report released by State Controller John Chiang announced that the latest budget deficit was mainly due to a large drop in third quarter income tax collection; revenues were 11 percent lower than initially projected. The California Department of Finance is also expecting a deficit of $7.4 billion at the start of fiscal year 2010-2011, which begins next July. This could climb to as high as $20 billion by the start of fiscal year 2011-2012. Loss of tax revenue due to the economic crisis and widespread unemployment and wage reductions is not the only component of the budget deficit. The state's fiscal health is also largely dependent upon the willingness of outside investors to purchase its municipal bonds and other securities. http://www.sott.net/articles/show/196702-California-finances-plummet-less-than-three-months-after-budget-passage Thu, 12 Nov 2009 19:58:44 -0500