"TAP não sobrevive se se mantiver pública", garante Pinto Luz

[MarcoAntonio]

Há um nome para isto que o Romeu59 faz nos seus diversos tópicos...

Chama-se propaganda.

Romeu59, revê a tua forma de participar no forum que o forum não é uma parede para colares cartazes, é um espaço de debate entre participantes.

[romeu59]

Basta ler o resumo:

RESUMO: Nos próximos meses o falso verniz da "recuperaçao" irá estalar e a crua e dolorosa realidade da depressão económica irá manifestar-se:

The coming months will reveal a simple, yet especially painful reality: the Western economy, and in particular that of the United States (2), never really came out of recession (3). The startling statistics recorded since summer 2009 have only been the short-lived consequences of a massive injection of liquidity into a system which had essentially become insolvent just like the US consumer (4). At the heart of the global systemic crisis since its inception, the United States is, in the coming months, going to demonstrate that it is, once again, in the process of leading the economy and global finances into the « heart of darkness » (5) because it can’t get out of this « Very Great US Depression (6) ».

[atomez]

Achas que que alguém tem paciência para ler esses lençois?

[romeu59]

http://www.leap2020.eu/GEAB-N-47-is-ava ... a5168.html

RESUMO: Nos próximos meses o falso verniz da "recuperaçao" irá estalar e a crua e dolorosa realidade da depressão económica irá manifestar-se:

The coming months will reveal a simple, yet especially painful reality: the Western economy, and in particular that of the United States (2), never really came out of recession (3). The startling statistics recorded since summer 2009 have only been the short-lived consequences of a massive injection of liquidity into a system which had essentially become insolvent just like the US consumer (4). At the heart of the global systemic crisis since its inception, the United States is, in the coming months, going to demonstrate that it is, once again, in the process of leading the economy and global finances into the « heart of darkness » (5) because it can’t get out of this « Very Great US Depression (6) ».


The Global systemic crisis – Spring 2011: Welcome to the United States of Austerity / Towards a very serious breakdown of the world economic and financial system

- Public announcement GEAB N°47 (September 16, 2010) -

The Global systemic crisis – Spring 2011: Welcome to the United States of Austerity / Towards a very serious breakdown of the world economic and financial system


As anticipated by LEAP/E2020 last February in the GEAB No. 42, the second half of 2010 is really characterized by a sudden worsening of the crisis marked by the end of the illusion of recovery maintained by Western leaders (1) and the thousands of billions swallowed up by the banks and the economic « stimulation » plans of no lasting effect.

The coming months will reveal a simple, yet especially painful reality: the Western economy, and in particular that of the United States (2), never really came out of recession (3). The startling statistics recorded since summer 2009 have only been the short-lived consequences of a massive injection of liquidity into a system which had essentially become insolvent just like the US consumer (4). At the heart of the global systemic crisis since its inception, the United States is, in the coming months, going to demonstrate that it is, once again, in the process of leading the economy and global finances into the « heart of darkness » (5) because it can’t get out of this « Very Great US Depression (6) ».

Thus, coming out of the political upheavals of the US elections next November, with growth once again negative, the world will have to face the « Very Serious Breakdown » of the global economic and financial system founded over 60 years ago on the absolute necessity of the US economy never being in a lasting recession. Now the first half of 2011 will dictate that the US economy take an unprecedented dose of austerity plunging the planet into new financial, monetary, economic and social chaos (7).

In this GEAB issue, our team therefore anticipates for the coming months, different aspects of this new development of the crisis, especially the nature of imposed austerity process which will affect the United States, the development of the accursed « inflation / deflation » argument, the actual progress of real US GDP, the strategy of central banks and the direct consequences for Asia and Euroland. As we do every month, we set out our strategic and operational recommendations. And, specially, this GEAB issue offers an excerpt from the new book by Franck Biancheri « The Global Crisis: The Path to the World After - France, Europe and World in the Decade 2010-2020 » : the French version will be published on 7 October next by Editions Anticipolis and the English one later in December.

In this issue we have chosen to present an extract of the anticipation concerning the forthcoming austerity which will be imposed on the United States beginning Spring 2011: « Welcome to the United States of Austerity ».

The coming quarters will be particularly dangerous for the world economic and financial system. The Chairman of the Fed Ben Bernanke passed on the message as diplomatically as possible at the recent meeting of world central bankers at Jackson Hole, Wyoming: even though the policy to revive the US economy has failed, either the rest of the world continues to fund US deficits at a loss and hopes that at some point the bet will pay off, avoiding a collapse of the global system, or the United States will monetize its debt and turn all the Dollars and US Treasury Bonds held by the rest of the planet into funny money. Like any power at bay, the United States and is now forced to introduce the threat of pressure to get what it wants. Barely a year ago the rest of the World’s leaders and financial officials had volunteered to « refloat the USA ship ». However, today things have drastically changed since the noble assurance from Washington (the Fed’s, like that of the Obama administration’s) proved to be only pure arrogance based on the pretense of having understood the nature of the crisis and on the illusion of possessing the means of controlling it. However, US growth evaporates quarter after quarter 8 and turns negative again from the end of 2010. Unemployment hasn’t stopped growing and between the stability shown in official figures and the exit, in six months, of more than two million Americans from the workplace (LEAP/E2020 believes that the real unemployment figure is now at least 20% (9)); the U.S. housing market remains depressed at historically low levels and will resume its fall from the fourth quarter 2010; last but not least, as one can easily imagine in these circumstances, the US consumer is and will be absent on a permanent basis since his insolvency continues and even gets worse (10) for the one American in five without work. Behind these statistical factors hide three realities that will radically change the US and global political, economic and social landscape in future quarters as and when they dawn on the public consciousness.

Broad-based anger will cripple Washington from November 2010

First of all, there is a very depressing widespread reality, a real trip « to the heart of darkness », which is that tens of millions of Americans (nearly sixty million now depend on food stamps) who no longer have a job, no longer have a house, no longer have any savings, are wondering how they will survive in the years to come (11). The young (12), retirees, African-Americans, workers, service employees (13),… they constitute this mass of angry citizens who will speak violently next November and plunge Washington into a tragic political impasse. Supporters of the « Tea Party (14) » and « new secessionist (15) » movements... want to « break the Washington Machine » (and by extension that of Wall Street) without having feasible proposals to solve the country’s myriad problems (16). The November 2010 elections will be the first opportunity for this « suffering America » to express itself on the crisis and its consequences. And, won back by the Republicans or even the extremists, these voters will help to further cripple the Obama administration and Congress (which will probably swing to the Republicans), only pushing the country into a tragic gridlock just when all the signals turn red again. This expression of widespread anger will in addition, from December onwards, collide with the release of the Deficit Commission report set up by President Obama, which will automatically place the issue of deficits at the heart of public debate at the beginning of 2011 (17).

For example, we are already seeing a very specific expression of this widespread anger against Wall Street in that Americans have deserted the stock market (18). Each month, an increasing number of « small investors » leave Wall Street and the financial markets (19), today leaving more than 70% of transactions in the hands of major institutions and other « high frequency traders ». If one keeps in mind the traditional image that the stock exchange is today’s temple of modern capitalism, then we are witnessing a phenomenon of loss of faith comparable to people’s disaffection with official demonstrations experienced by the communist system before its fall.

The Federal Reserve now knows that it is powerless

Finally, there is a financial and monetary effect that is particularly tragic since the players are aware of their unenviable situation: the U.S. Federal Reserve now knows that it is powerless. Despite the extraordinary efforts (zero interest rates, quantitative easing, huge support to the real estate mortgage market, massive support to banks, tripling its balance sheet, ...) that it carried out from September 2008, the U.S. economy will not restart. Fed leaders are finding they are only a part in the system, even if it is a vital part and, therefore, can do nothing against a problem that affects the very nature of the system, in this case, the US financial system, designed as the solvent heart of the global financial system since 1945. But the US consumer has become insolvent (20), the consumer who, during the last thirty years, has gradually become the central economic player of this financial heart (with more than 70% of U.S. growth dependant on household spending). It is this insolvency of US households (21) that has broken the Fed’s efforts.

Accustomed to the virtualism and thus to the possibility of manipulating the processes and dynamics of events, US central bankers believed that they could « mislead » households, once again giving them the illusion of wealth and thus pushing them to revive consumption and behind it the whole United States’ economic and financial machine. Until summer 2010, they did not believe in the systemic nature of the crisis or they did not understand that what was causing the problems was out of reach of the tools of a central bank, as powerful as it may be. Only in recent weeks have they discovered two pieces of evidence: their policies have failed and they have neither arms nor ammunition.

Hence the very depressed tone of the discussions at the central banks meeting in Jackson Hole, whence the lack of consensus on future action, whence the endless debates about the nature of the risks to be faced in the coming months (e.g. inflation or deflation, knowing that the system’s internal tools used to measure the economic consequences of these trends are no longer even relevant, as we analyse in this issue (22)), whence increasingly violent clashes between proponents of renewed growth via debt and followers of deficit reduction... and whence Ben Bernanke’s speech full of veiled threats to his central banker colleagues: in ambiguous terms, he passed the following message: « We will try everything and anything to avoid an economic and financial collapse and you will continue to finance this « everything and anything », otherwise we let inflation loose and thus devalue the Dollar whilst US Treasury Bonds will no longer be worth much » (23). When a central banker expresses himself like a common cash extortionist, there is danger in the house (24).

The response of the world’s major central banks will be unveiled in the next two quarters. Already the ECB has made it clear it thought that a new policy of stimulation through an increase in US deficits would be suicidal for the United States. Already China, whilst saying it would do nothing to rush things, spends its time selling US assets to buy Japanese ones (reflected in the historic level of the Yen / Dollar rate of exchange). As regards Japan, it is now forced to align itself simultaneously with Washington and Beijing ... which will probably cancel out all its financial and monetary policies. In future quarters the Fed, like the federal government, will find that when the United States is no longer synonymous with juicy profits and / or shared power, its ability to convince its partners declines quickly and heavily, especially when the latter question the relevance of the chosen policies (25).

The consequence of these three realities that are gradually making their presence felt in US and global consciousness will, therefore, for the LEAP/E2020 team, come to pass in Spring 2011 by the United States entering an era of austerity unprecedented since the country became the heart of the global economic and financial system. Fhederal political blockages in the context of an electorate sick and tired of Washington and Wall Street, heavy reliance on federal funding of the entire US economy and the Fed's impotence against a backdrop of growing international reluctance to finance US deficits will combine to push the country into austerity.

An austerity that has, moreover, already begun to affect at least 20% of the population head-on, and wich directly affects at least one in two Americans worried about joining the ranks of the homeless, those without work and other long-term unemployed. For these tens of millions of Americans austerity is here and it's called lasting impoverishment. What is going to come into play between now and Spring 2011 is, therefore, the shift into official speeches, budgetary policies and international awareness to the idea that the United States is no longer « the land of plenty », but « the land of few ». And beyond the domestic political choices, it is also the discovery of a new limitation for the country: the United States cannot afford a new stimulus (26). Rather than a multidecade collapse like the Japanese situation, many decision makers will be tempted by shock therapy ... this same therapy that, with the IMF, the United States recommended to Latin American, Asian and Eastern European countries.

This is normally a good reason for the rating agencies, always so quick to see the straw in the eye of most countries in the world, to threaten the United States with a strong downside rerating if they not implement a comprehensive austerity plan as quickly as possible. But anyway, for LEAP/E2020, due to the internal and external conditions in the country described above, it is really in spring 2011 that the United States has an appointment with austerity, an appointment that the rest of the world will impose if it is paralyzed politically.

Until then, it is likely that the Fed will try a new series of « unconventional » measures ( a technical term meaning « desperate attempts ») to try and prevent arriving there because, at this stage, one thing is certain concerning the consequences of the United States entering a large-scale programme of austerity: that will be financial and monetary chaos in the markets accustomed for decades to the exact opposite, that’s to say, US waste; and an internal economic and social shock unparalleled since the 1930s (27).

---------
Notes:

(1) In this regard, in the next GEAB issue in October, our team will prepare, as it does each year, its country risk and economic outlook list for 2011. What is already clear to our researchers is that the end of 2010 will be marked by a sharp downward revision of all current forecasts (including already reduced forecasts for the United States). Source: Reuters, 09/09/2010

(2) Sources: Bloomberg, 07/20/2010; Oftwominds, 07/15/2010; New York Times, 08/09/2010; CNBC, 08/12/2010

(3) The chart below illustrates how growth is already collapsing. The CMI growth index has been one of the most reliable leading indicators in forecasting the changes in US GDP. And 92% of Americans believe the country is still in recession. Source: GlobalEconomicAnalysisBlogspot, 09/09/2010

(4) As outlined by our team from the GEAB No. 9 of November 2006 onwards.

(5) To borrow the evocative title of Joseph Conrad excellent novel which especially inspired Francis Ford Coppola for his film Apocalypse Now.

(6) As LEAP/E2020 called the American economic crisis from April 2007 in the GEAB No. 14.

(7) Moreover, without even incorporating this anticipation in their analysis, even the OECD experts warn that global growth will suffer a setback between now and the end of 2010. Source: Marketwatch, 09/09/2010

8) The Wells Fargo / Gallup index of US SMEs continues to fall month after month. Source: Gallup, 08/02/2010

(9) Even Wall Street continues to plan mass layoffs in the coming months. Source: Bloomberg, 09/07/2010

(10) Even high earners are now affected by the problem of foreclosures. Source: USAToday, 07/29/2010

(11) To clarify this alarming social situation, it is worth reading the joint IMF / ILO report initiated by the Norwegian Government on « The challenges of growth, employment and social cohesion » in the context of the current crisis. Source: OsloConference, 07/22/2010

(12) A very telling indicator showing the price that young Americans are paying because of the crisis.The number of summer jobs, a traditional feature of independence for young Americans for the following year, fell to its lowest level since 1948. Source: USAToday, 09/03/2010

(13) These images of drastic cuts in police numbers in Auckland are emblematic of what is happening countrywide in terms of public services. Source: DailyMotion

(14) On this topic USAToday of 08/16/2010 had a very interesting portrait gallery of the « Tea Party » movement's supporters.

(15) See GEAB issue N°45

(16) The success of the « tea-partisan » gathering in Washington on 08/28/2010, organized by Glenn Beck, is an obvious example. Source: Washington Post, 08/29/2010

(17) Source: New York Times, 08/31/2010

(18) Stock exchanges have stalled or been declining for several quarters despite continuous attempts by the financial authorities to try to restore their shine ... and once again are approaching a violent spasm tied to « the Hindenburg Omen » or the anticipation of global economic and financial conditions. Source: Telegraph, 08/27/2010.

(19) Source: New York Times, 08/22/2010

(20) Even when they manage to find a job, it’s usually a job much less well paid than the previous one. Source: CNBC, 09/01/2010

(21) Thus the foreclosure process is a reflection of an alarming phenomenon of a decline in the value of US households’ assets. Source: Foxnews, 08/23/2010

(22) If the prospect of deflation is that which officially « spoiled the mood » of the central bankers’ meeting in Jackson Hole in late August 2010, it is actually growing doubts about the Fed's ability to select and implement appropriate measures to revive the US economy which makes the whole of the small world of central bankers so nervous. Sources: CNNMoney, 08/31/2010; FT, 09/10/2010

(23) It should be noted here that in front of the growing reluctance of the rest of the world to buy US Treasury Bonds and GSE, the Fed has not only officially begun to buy them for its own account (or more unobtrusively via its « primary dealers ») but it has begun to organize the massive sale of federal debt to US individuals operators. In effect it must seem easier to manage the plundering of many dozens of million people more or less unaware of the economic and financial nuances than that of the major strategic players such as China, Japan, the Gulf oil countries,.... (see chart in GEAB N°47):

(24) After explaining that the use of a moderately inflationary policy had been discussed but wasn’t on the agenda, Ben Bernanke said that however, if deflation risks grew, then the usefulness of some intervention methods could be reconsidered. Clearly, if nothing else works and if the other global players do not want to feed the US deficit machine, then debt monetization will be implemented on a large scale. At least, things are now clear. When LEAP/E2020 warned that it was the only option for the United States in the looming crisis it seemed outrageous. Today, it is the Fed Chairman himself who sets the tone. Source: US Federal Reserve, 08/27/2010

(25) The failure of the mammoth measures to support the housing market is well illustrated by the chart below.

(26) We are even beginning to hear voices suggesting « copy Europe » like Jim Rogers and Doug Noland who publishes the excellent « Credit Bubble Bulletin ». Sources: CNBC, 08/31/2010; Prudent Bear, 07/30/2010

(27) As the historian Niall Ferguson points out in this article published on 07/29/2010 by The Australian, « the sun can suddenly set on a superpower when debt bites ». An historical reminder that columnist Thomas Friedman, though very patriotic, doesn’t refute, who emphasized that the sharp decline of American power was due to the economic crisis in the New York Times on 09/04/2010.

Jeudi 16 Septembre 2010

[romeu59]

A situação de extrema fragilidade da economia americana é cada vez mais evidente:

Análise de Bob Chapman (The International Forecaster):

http://theinternationalforecaster.com/I ... _Has_Risks

Cheapening Currency Also Has Risks

A weekly excerpt from the subscription issue of The International Forecaster, taken from Bob Chapman's weekly publication.

September 29 2010: Wall St Defies Reality, currency could be cheapened, japanese intervention in currency markets, what is beggar thy neighbour, America on sale, Gold as the final refuge against currency debasement, trade war between China and everybody else.

It is interesting to watch Wall Street defy reality. This is a scene we’ve observed since the early 1960s, the effect of debt on the economy and the nation and in turn on its currency. The result of the profligacy over all those years is the biggest bull market in history in gold and silver. As we write gold is toying with $1,300 and silver with $21.50. Each day a new high is reached in spite of a pending options expiration and the perpetual market rigging and manipulation by the US government.

One of the things that astound us is that few professionals have seen this coming over the past 10-1/2 years, and even those that do believe do not think this is an earth-shaking event. What we are about to experience is an event that only occurs every 300 to 500 years. All we can imagine is that they have a very limited perspective of history and particularly economic and financial history.

Unbeknownst to most gold and silver shares, coins and bullion have been under accumulation since 2000, by the smart money. Gold alone on a compound basis has been up just under 20% annually. It should also be noted that gold demand rose 36% in the second quarter.

Several events of recent vintage have changed the atmosphere in which gold and silver reside. Six or eight months ago the major NYC banks arranged for a major rally in the dollar, which ran from 74 to 89. It is now back to 79. The problems in Greece were the catalyst, as well as other EU-euro zone member problems. This caused the euro to fall from $1.50 to $1.19. It is now at $1.35. This temporarily boosted the dollar. About 11 weeks ago we predicted a new quantitative easing program in the US and it was put into operation about a month ago. This is the way the Federal Reserve again intends to keep the US economy from collapsing. The result of this move is that again foreign central banks are moving to cheapen their currencies, because the dollar is again falling in value. That is reflected in the increasing foreign exchange dollar reserves of many countries. What they do to cheapen their currencies in US dollar terms is to print their own national currency and purchase dollars. With those dollars they buy US Treasuries or spend them. That process cheapens their currency in dollar terms. This is called intervention.

The prevailing attitude is that if a nation doesn’t cheapen its currency others will and that would leave a nation at a disadvantage in terms of trade and pricing exports. This has been going on for years and US administrations have overlooked the practice. That is because it cheapens exports into the US, holds down inflation and creates buyers for Treasury and Agency bonds and US stocks and investments. Unfortunately for the US other nations have decided US debt is so onerous that they are diversifying into other currencies, purchasing items such as commodities and in some cases buying gold. The argument against gold has been that there is no interest on the investment. They perpetually do not understand that gold has been appreciating in value for the last ten years just shy of 20% annually. Thus their argument for not owning gold is incorrect. It has cost nations dearly and will continue to do so. The real reason that they do not purchase gold is because of pressure from the US government.

The most visible intervention in the currency markets was that of Japan in a desperate attempt to cheapen the value of the yen in violation of agreements with other major nations. Their manipulation into the $4 trillion Forex market was totally unsuccessful. Japan and others are faced with increases in money and credit by the Fed in its efforts to again liquefy the US economy. Any attempt to fight another $2.5 trillion by foreign nations is going to be futile. The currencies of almost every nation will rise and there is little they can do about it. The US dollar has been abandoned in an effort to save an American economy that is in serious trouble. The currency devaluations will come, but will be unsuccessful. Russia is an exception and has thus far failed to use stimulus to weaken its rouble. Every time the IMF tries to suppress gold prices with its gold sales, Russia is right there buying it up, which must infuriate the elitists in Europe and the US. Almost 2/3s of their economy’s growth loss has been due to drought and fires, but with close to $500 billion in foreign exchange, they have no trouble buying gold, which puts those reserves at close to 24 million ounces. It is an easy way to dump dollars.

Over and over again we hear central banks worldwide announcing how they are going to defend their currencies in order to keep their exports inexpensive. We wonder when someone in Washington is going to catch on to what has been perpetually done to injure the US economy? Free trade, globalization, offshoring and outsourcing doesn’t work. It has cost 8 million American jobs over the past 12 years and lowered wages from $30.00 an hour to $14.00 an hour, and caused a depression. British mercantilism has never worked except for those demeaning their currencies. The only answer for America is to impose stiff tariffs on foreign goods and services and junk NAFTA, CAFTA and the WTO. Just look at what China has done as an example. The yuan is undervalued by 40% and they could care less. They keep right on devaluing their currency and then complain about the loss in the value of the dollar and US Treasuries they buy as a result of currency manipulation. If the US is ever to survive economically they have to put an end to criminal devaluations.

Government goes on its merry way because they have a Federal Reserve. There will be no cutback in deficit spending.

All the government has to do is request that the Fed purchase their debt and they do so by creating money and credit out of thin air. This is monetization and it’s inflationary. This is how government pays for mandated services. The taxes for such were already extracted from the public, but unbeknownst to most of the public these funds have already been spent. This is how Social Security, Medicare and all those other bailout services are being funded. Foreigners are buying only 25% of US government debt. The slack is and has been assumed by the Fed, which the people eventually get to pay for. Today we are in a lull, a sort of magical time, when the very superstructure of the system is being destroyed, but it is not particularly noticeable. The economy, we might add, is going sideways, with the assistance of $2.5 trillion a year. That can last for several years but in the end inflation goes rampant and sometimes becomes hyperinflation as we have seen in the Weimar Republic and most recently in Zimbabwe. Inflation, as consumers can attest to, is already climbing and the roar of higher inflation is not far off. One of the events that will kick that off will be bank lending of the funds they hold, some $1.5 trillion, which presently are sterilized, but become monetized once they are lent or spent. We can assure you that day is just over the horizon. This, once raging, will cause political, social and perhaps military conflict. If you look back in history when such problems existed those in power create another war or they subject their own people. Historically this hasn’t been difficult, but today is different, because talk radio and the Internet have allowed people to know and understand what has been and will be forced upon them and by whom.



Richard Russell:

They call it competitive devaluations or more vulgarly "beggar thy neighbor." In the new rough world of 2010, every nation wants to export. The biggest aids in exporting are (1) cheap labor, (2) access to ample raw materials, (3) a "cheap," low-priced, competitive currency. China keeps its yuan on the "cheap" side by forcing it below the purchasing power of the dollar. Treasury Secretary Timmie Geithner and more recently, Barack Obama himself, have been badgering the Chinese to halt their "manipulations" and to allow the yuan to float higher. China's answer is "We can't hear you," and when pressed further the Chinese retort, "We'll allow the yuan to float when it serves China's purposes." In order to compete with the mighty Chinese exporting machine, the rest of the Asian nations force their currencies down. The net result is a series of competitive devaluations. The sum of the story is that every nation wants to export. and no nation wants a strong currency. So what's the US's answer? Our answer is that if China won't allow the yuan to rise, then we'll flood the market with new dollars and allow the dollar to sink. That's the trade-off, China must allow the yuan to rise or the US will set off quantitative easing #2. The US must be competitive, even if we have to sacrifice the almighty dollar. The Chinese complain that to allow their currency to rise too far will mean millions of their factories will be forced into bankruptcy and millions of Chinese will lose their jobs. China's reserves include a staggering $2.5 trillion in dollar-denominated US securities (mostly treasuries). If the dollar sinks, China stands to lose hundreds of billions of dollar in purchasing power. China, it seems to me, is stalling, playing for time, while it gets rid of its dollar liabilities by switching to shorter maturities, by increasing its mix of other currencies while decreasing its dollar position, and by buying gold with its dollars. Meanwhile, the Fed's policy-makers are ready to take the big gamble with the dollar. At last Tuesday's meeting, Fed Chairman Bernanke hinted that the Fed is ready to flood the system with additional dollars in a campaign to push longer-term interest rates lower, and to pressure the dollar to the downside. This announcement served to drive the dollar index down to its lowest level since last March.

Last week the Dow rose 2.4%, S&P 2.1%, Nasdaq 3.5% and the Russell 2000 rose 3%. Cyclicals rose 1.9%; transports 1.8%; consumers 2.1%; utilities 2%; banks 0.2%; broker/dealers were unchanged; high tech rose 2.6%; semis 3.5%; Internets rose 3.9% and biotechs 1.5%. Gold bullion rose $22.00, the HUI rose 2% and the USDX rose 2.6% to 79.28.

Two-year T-bills fell 2 bps to 0.43%; ten-year T-notes fell 14 bps to 2.60% and 10-year German bunds fell 8 bps to 2.34%.

The Freddie Mac 30-year fixed mortgage rates were unchanged at 4.37%, the 15’s were unchanged at 3.82%, one-year ARMs rose 6 bps to 3.44% and 30-year jumbos rose 1 bps to 5.33%.

Fed credit fell $2.8 billion, as Fed foreign holdings of Treasury and Agency debt rose $3.7 billion. Custody holdings for foreign central banks have increased $258 billion YTD, or by 12% annualized and YOY they are up 12.6%.

Total money market funds fell $10.6 billion to $2.803 trillion. Total commercial paper jumped $27.8 billion to $1.064 trillion.Rumors persist that Bank of America just received $13 billion in emergency funds to keep the bank solvent. The word is HSBC has problems as well.

SIPC has $1.2 billion and can borrow $2.5 billion from the Treasury. This certainly is not much money for the undertaking they are involved in.

The August Chicago Fed National Activity Index fell 0.53 to after being down 0.11 in July.

On Friday regulators seized three corporate credit unions and will have to repackage $50 billion in troubled assets.

We have been warning you on credit unions. This is just the beginning.

Regulators shut two more banks bringing the 2010 total to 127.

Record-low interest rates are stoking the biggest increase in U.S. share buybacks ever. American companies announced $55.9 billion in repurchases since June, data compiled by Birinyi Associates Inc. show. That adds to $93.5 billion in the second quarter and $108.3 billion during the first three months of the year, compared with $125 billion in all of 2009. Corporations are using debt to pay for buybacks.

Leveraged-loan returns rose to their highest level of the year this week as Brickman Group Holdings Inc. took advantage of investor demand and marketed a loan without financial-maintenance requirements. Investors in search of extra yield have turned to high- risk, high-return loans, driving supply to more than double this year and allowing companies to bring so-called covenant-lite deals to market. Those loans are devoid of restrictions such as a mandate on maximum leverage, or debt to earnings before interest, taxes, depreciation and amortization.


Bank of America has been busted using some seriously outrageous tactics to try to collect debts so small they're barely worth the paper they're written on.

It wasn't until ABC News ambushed BOFA CEO Brian Moynihan Michael-Moore style outside his office that the firm finally responded by firing its debt-collection firm.


Regulators announced a rescue of the nation's so-called wholesale credit

unions…Friday's moves include the seizure of three wholesale credit unions and an unusual plan by government officials to manage $50 billion of troubled assets inherited from failed institutions. To help fund the rescue, the National Credit Union Administration plans to issue $30 billion to $35 billion in government-guaranteed bonds, backed by the shaky mortgage-related assets.

Bernanke and the NY Fed are boosting stocks ahead of the November election. If the GOP takes control of at least one chamber of Congress, Ben’s ways and means of rigging and bailing out will be audited.



The Fed did a $3.89B POMO on Friday. For the week, the NY Fed monetized $11.15B of Treasuries. At 14 to 1 bank leverage, this is sizable juice. Hedge funds can employ even greater leverage.

Heavy dollar inflows into Brazil could pose credit risks for the country's banking system, Brazilian Central Bank chief Henrique Meirelles said Friday, defending his bank's intervention measures in the foreign exchange market.

Ergo, the world is accelerating its beggar they neighbor competitive currency debasement scheme instead of allowing the necessary economic and financial restructuring. Soon, more of the market will become alarmed at increasing central bank and sovereign credit risk. Then this inflate of die party will get very interesting.



A Return to Beggar They Neighbor? Beggar-thy-neighbor currency devaluations proved ruinous for the global economy in the 1930s. Is the world setting off down the same slippery slope again? As in the 1930s, competitive devaluations, whether by fair means or foul, are likely to increase international tensions and risk protectionist responses. Meanwhile, they will do nothing to address the global imbalances that led to the crisis or tackle the chief problem facing the advanced economies today: lack of domestic demand in many countries.


Japan Signals Determination on Yen Japanese Foreign Minister Seiji Maehara said that Japan's government is determined to prevent further appreciation of the country's currency and raised the possibility of further government intervention to curb the yen's rise.


What More Fed Easing Means For Markets: 'America On Sale'

"The Fed is going to do whatever it takes to support this market. They don't care what it is."… "Investors are looking at what the news is and they're reacting to it, and the reaction isn't necessarily a healthy one at all times," says Andre Julian, CFO and senior market strategist at OpVest Wealth Management in Irvine, Calif. "They've lost perspective on the long term: What are we going to do with inflation? What are we going to do when the dollar isn't worth as much?"


A Grand Unified Theory on Market Manipulation [August 2, 2009]

A limiting factor is that the rules of the game have changed quickly, and what we believe is important to the major players now may not necessarily have been important twelve or even six months ago… The theory for which we have the greatest supporting evidence of manipulation surrounds the fact that the Federal Reserve Bank of New York (FRNY) began conducting permanent open market operations (POMO) on March 25, 2009 and has conducted 42 to date.

These days are highly correlated with strong paint-the-tape closes, with the theory being that the large institutions that receive the capital injections are able to leverage this money by 100 to 500 times and

http://www.precisioncapmgt.com/wp-conte ... lation.pdf

Ambrose Evans-Pritchard: Gold is the final refuge against universal currency debasement States accounting for two-thirds of the global economy are either holding down their exchange rates by direct intervention or steering currencies lower in an attempt to shift problems on to somebody else, each with their own plausible justification. Nothing like this has been seen since the 1930s.

The managers of all four reserve currencies are playing fast and loose: the Fed is clipping the dollar; the Bank of England is clipping sterling; the European Central Bank is buying the bonds of EMU debtors to stave off insolvency, something it vowed never to do just months ago; and the Bank of Japan has just carried out two trillion yen of “unsterilized” intervention…

http://www.telegraph.co.uk/finance/comm ... ement.html

Policy makers must do more than print money and hope for the best Quantitative easing might seem the easiest option but it is storing up major problems for the future.

The regulatory failure that brought the Western world to this impasse and the gross irresponsibility shown by the investment banks and ratings agencies is shocking. Central bankers lowered rates in the aftermath of 9/11 and the dot-com crash, then kept them low for far too long so pumping up the biggest

credit bubble in history.

Now, the Western world's policy response amounts to printing money and heaping debts upon debts, while shoving the banking sector's losses on to the general public – and, particularly, their children and grandchildren. This is perhaps the most systematic act of inter-generational theft the world has ever seen.

But that's not the point at least for now. The point for now is that QE and the related fiscal boosts simply are not working.

As Simon Johnson has written: "The finance industry has effectively captured our government and recovery will fail unless we break the financial oligarchy that is blocking essential reform." Strong words from a former chief economist of the International Monetary Fund but no less true for that.

http://www.telegraph.co.uk/finance/comm ... -best.html

An intriguing pick-up in Treasury settlement fails First, there’s been a relatively strong burst of settlement failures in the US Treasury repo market in the last week.

According to data compiled the New York Fed, ‘failures to receive’ shot up to 87,173 versus 14,356 the previous week, while ‘failures to deliver’ hit 85,827 versus 9,377 the highest since January 6, 2010 on both counts. Meanwhile something else that’s curious in the market. If you’re interested in trading the 30-year spot-future basis, there’s a potentially interesting arbitrage opportunity that’s opened up since about August. [US 30-year bonds are out of whack with USZs.]

http://ftalphaville.ft.com/blog/2010/09 ... ent-fails/

The explanation for both of the above noted conditions is: the system is running out of deliverable product because it is still too levered, with the Fed’s NZIRP and QE as a driving dynamic.

The use of derivatives has “far exceeded any pressing need for hedging in real markets or financial markets and has become a kind of speculative instrument,” the 83-year-old former central banker said…“It’s going to take a long time to repair the basic disequilibrium in the economy,” Volcker said.

The substantial drop in credit card debt in the United States since early 2009 has been widely attributed to newly frugal consumers. But analysts say that a significant portion of the decline is actually the result of financial institutions writing off billions of dollars in credit card debt as losses…

A study released last week by Evolution Finance’s CardHub.com, calculated that financial institutions charged off about $20 billion each quarter from early 2009 through early 2010, about equal to the amount of the decline in outstanding credit card debt…

President Barack Obama's $30 billion small community business lending program faces one big challenge: many of the community banks and businesses it's supposed to help don't want it…

Bank executives say their customers don't want loans, even at low interest rates, because the sluggish economy has chilled expansion plans. Some say the federal money isn't worth it because they fear it will come with too much regulatory oversight. "We have taken a strategic decision not to have our primary regulator, the government, also be a partner in our bank," said William Chase Jr., CEO of Triumph Bank in Memphis.

Tens of thousands of people will lose their jobs within weeks unless Congress extends one of the more effective job-creating programs in the $787 billion stimulus act: a $1 billion New Deal-style program that directly paid the salaries of unemployed people so they could get jobs in government, at nonprofit organizations and at many small businesses.

The Federal Deposit Insurance Corporation postponed its decision on approving a rule that would study failures of mega-banks so that its bankruptcy doesn't affect the markets.

The rule based on the Dodd-Frank Act was expected to be adopted, but instead the agency decided to discuss a proposal on the subject. The proposal is expected to be discussed with the Financial Stability Oversight Council before its approval.

A second proposal on the subject will also be introduced by the agency in Q1 of 2011. This may include methods to examine how funds are deployed in the recovery process and how taxpayer funds will be recovered from the industry.

The United States on Monday set final duties ranging up to 61 percent on hundreds of millions of dollars of copper pipe from China in one of several disputes causing friction between the two countries.

The U.S. Commerce Department announcement came one day after Beijing slapped final duties ranging from 50.3 percent to 105.4 percent on chicken parts from the United States.

[romeu59]

A opinião de John Paulson, nº45 da lista Forbes:

Em 2012: Ouro pode atingir os 4000 dólares, inflação com 2 dígitos nos EUA.

http://www.businessinsider.com/john-pau ... z10tCIDkAK

John Paulson is the Founder and President of Paulson, a hedgefund company based in New York City.

Before founding his own company in 1994 with $2 million, he was a partner at the privately owned mergers arbitrage firm Gruss Partners. A graduate from Harvard Business School, where he earned a Master's degree, he started his career at Boston Consulting Group, and went later on to work in the mergers and acquisition group of Bear Stearns.

Resumo: Here's what Paulson sees coming:

* Low double-digit inflation by 2012, killing the bond market, and restoring strength to equities and gold.
* 2% GDP growth for 2011 and 2012
* Gold hitting $2,400 to $4,000

He is the 45th on the Forbes' World's Billionaires list.

John Paulson's Scary Speech: Double Digit Inflation By 2012, Gold At $4,000
Courtney Comstock | Sep. 28, 2010, 2:51 PM

John Paulson scared the pants off of a packed audience at New York's University Club recently as he warned them of huge changes in the economic environment in the years to come.

Forbes' Bob Lenzer reports Paulson's saying:

“If you don’t own a home buy one."

”If you own one home, buy another one, and if you own two homes buy a third and lend your relatives the money to buy a home.”

Paulson has been bullish on housing for a while now (he runs a housing recovery fund), but this is him hitting super-bull territory. His reasoning is that home prices are great, the bond market is dead, and commodities like gold, which he also has a big prediction for, are on the rise.

According to InfoWars, he told the audience that he thinks the price of gold will hit $2400-$4000. And a whopping 80% of his assets are in gold.

Given his expectation for further money printing by the Fed – and that in 1980 the gold price rose by 100% more than the correlation implied – Paulson noted that the price of gold could hit $2,400 based only on monetary expansion, and as high as $4,000 per ounce based on a projected overshoot.

Lastly, he noted that 80% of his assets are denominated in gold.

We rarely get to hear Paulson's opinion on the market unless it's filtered through his stiffer research reports. As a result, he has never been so extreme in his predictions as he seems to be now.

Here's what Paulson sees coming:

* Low double-digit inflation by 2012, killing the bond market, and restoring strength to equities and gold.
* 2% GDP growth for 2011 and 2012
* Gold hitting $2,400 to $4,000

It's worth noting that if gold goes to $4,000, Paulson will be a top contender for the richest man in the world.

[romeu59]

Extraído do The International Forecaster do analista financeiro americano Bob Chapman.

http://theinternationalforecaster.com/I ... re_Obvious

De acordo com Chapman os sinais da crise económica nos EUA serão mais evidentes a partir do início de 2011:

"Early in 2011 the real fireworks will begin. In spite of stimulus of various kinds the economy will falter and unemployment will grow. The plight of what is really, truthfully, going on in the country and the world will become more manifest to the public via talk radio and the Internet. Government, Wall Street and banking will get little public support. The Fed will start to run into major opposition from foreigners in the funding of debt. As the lender of last resort, the injections of capital needed will grow exponentially."


Failures In Money Control Becoming More Obvious

A weekly excerpt from the subscription issue of The International Forecaster, taken from Bob Chapman's weekly publication.

September 22 2010: Fed makes its own rules, liquidity injections dont work, therapy proves costly, European banks broke, a return to austerity, Markets look for reflation, a broader net for SEC, Fanny and Freddie losses at around 400 billion, state pension death spiral.

As quantitative easing again gets underway the failure of QE1 becomes more obvious. The crisis worsens and the illusion of any recovery is light years away. Over the past three years almost $13 trillion that we know about has been thrown down a rat hole to bail out banking, Wall Street, insurance and selected elitist entities. The dollar figure is probably much higher. We will never know, because the privately owned Federal Reserve makes its own rules. Everything they do is a state secret. The five successful quarters were only a mirage. The funds have been vaporized among lending and financial institutions worldwide. There has been no accounting and there never will be as long as the Fed is not audited and investigated. We are in an inflationary depression and have been since February 2009. Massive injections of liquidity do not work, nor have they worked for centuries under these conditions. You cannot resurrect an insolvent country in a system that is corrupt. The controllers of the US economy are about to lead the American economy and financial structure into a great dark pit. The US and the world is soon to face a global breakdown deliberately engineered by the forces of darkness.

As usual the Fed was late in applying remedial therapy and that will prove costly. The funding of US debt by foreigners has become very costly and some are jumping ship and some are even using their dollars to buy gold. The game is changing, but will other countries risk a worldwide collapse by not rescuing the US economy? We don’t know but it doesn’t look promising. Monetization is coming and most nations are frozen in the headlights. Washington and NYC have applied pressure over and over again, but their arrogance has not gone unnoticed. There is a pretense of control as unemployment climbs and stability comes more into question. Headlining unemployment, U3, at 9-3/4% is dumb, when anyone with any sense can see U6 and the bogus birth/death ratio. Yes, unemployment is 21-5/8% and for those who want to see the truth it is visible worldwide. Real estate continues to descend, as the consumer reduces debt and consumption.

Much of the public is deeply disturbed and that has been borne out by the primary elections and the success of the Tea Party. People are thrashing around for answers with 14.3% living in poverty, 44 million on food stamps and every day more jobs are lost to free trade, globalization, offshoring and outsourcing. It is not surprising that Tea Partiers and secessionists want to dramatically change Washington and make radical changes in how the one party-two party system works. People have finally had it. They know full well where trillions of dollars went. That the US and European banking system were temporarily rescued. These were the same people who caused the problem in the first place and the public unceremonially is thrown a bone, like some stray dog. It is time for Americans to use their voting power to remove these criminals they voted into office. After January 2, 2011, America will have a lame duck president and a gridlock that will keep congress from creating any further damage. This will only be the beginning as people vent their anger at Wall Street and banking and its den of thieves. This tidal wave of rejection will really manifest itself when the elitist insiders in retribution collapse the stock and bond markets. Mark our words that will happen over the next few years, as will dollar devaluation and debt default. The ball has just started to roll and where it will all end up no one knows. The temple of the Federal Reserve and Wall Street could very well be doomed to destruction. The public now understands that Wall Street and banking own the Fed and they really make all the decisions and are the creators of all inside information. they profit on almost every trade. They cannot lose. They own the game. That is why for the last 18 months there has been an exodus of funds from the stock market to bonds, gold and silver and commodities. Naked shorting is rampant and the SEC and CFTC do nothing about it. Front running, known as flash trading, rigs every trade. More than 70% of trades are computer, black box driven by pros. Is it any wonder gold and silver hit new highs every day, Weiner & Waxman bring legislation to regulate coin dealers, when in fact they want to collect data on coin and bullion buyers. America has turned into a cesspool.

The reaction of the public to this crime syndicate will be staggering. Glass-Steagall will return and the wall between brokerage, banking and insurance will be re-erected. The system will be stripped in a way that 1933 and 1934 could never imagine. The system will be purged of malinvestment and banks, brokerage firms and insurance companies that are now broke will be allowed to fail. No more two sets of books. The Fed is responsible for all this debt and failure. It all lies at the feet of those who control the Fed. These are the people who have deliberately collapsed the system for more profit and power and the imposition of their dream of world government. The illusion of wealth that the Fed foisted on the public is over and the public is not ready to fall for it again. The public realizes they and the system are insolvent and they are very unhappy about it. Any effort to revive consumption will be futile. Veiled and overt threats to the public and Congress, as we saw from Henry Paulson and more recently by Ben Bernanke, are not going to work. The public is spoiling for a fight and when that happens a fight is sure to ensue. If these malevolent creatures take down Wall Street and banking you can be sure Paris, On July 14, 1789 will look like a picnic. Our aristocracy had best heed the message or they’ll end up like the 300,000 who lost their heads so long ago. Hell hath no fury like an enraged mob. The elitists had better wake up and stop their games robbery and extortion. They have to come to an end.

European bankers are terrified because they are equally broke. Their pursuit of austerity is commendable, but you do not raise taxes with 1% growth. This way you have austerity coming from both ends. This policy can only end in a very hard landing. They at least are smart enough to know that throwing money at the problem, stimulus, is not going to work. They realize the financial system is going to collapse and they are trying to find ways to ease the pain. Unfortunately there is no way to do so. They’ll take all the money and credit they can from the Fed, but they still believe those running the US from behind the scenes are suicidal. Like so many before them American elitists cannot entertain that their reign of power is over.

Early in 2011 the real fireworks will begin. In spite of stimulus of various kinds the economy will falter and unemployment will grow. The plight of what is really, truthfully, going on in the country and the world will become more manifest to the public via talk radio and the Internet. Government, Wall Street and banking will get little public support. The Fed will start to run into major opposition from foreigners in the funding of debt. As the lender of last resort, the injections of capital needed will grow exponentially.

What we will see is austerity and growing inflation at a level not seen since WWII. The people will become more and more disillusioned with the incompetence and growing impotence of the Fed and the administration. The public will become more and more enraged as they realize who has done this to them and why. That is why talk radio and the Internet will be so important in the future. They are almost the only way the public can learn the truth regarding their plight. More than 15% of Americans are experiencing what citizens experienced in the 1930s. Deficits will go exponential, but will not redevelop the economy. More and more funds will go to the destitute who will find it impossible to find work as our transnational conglomerates continue to move American jobs to foreign lands further crippling the economy. America is in a state of financial and economic collapse that will stretch out over years. Get ready to live like Americans did in the 1930s, 40s and 50s. The world that receives US dollars for its goods and services will no longer want to recycle them for worthless Treasury and Agency bills, bonds and notes. They will dump them on the market one way or another. The dollar now at 81.32 on the USDX will fall to 74, then to 71.18, and eventually to 40 to 45. In that process the dollar and many other currencies will be devalued and their debt defaulted upon. During that process the failure of these fiat currencies will, minute by minute, be reflected in the rising prices of gold and silver in markets that will eventually become free again. In reality no currency needs to be devalued. Gold and silver accomplish that daily. Why do you think since 1988 our government and those who control our government have suppressed gold and silver prices? Gold is the barometer of fear, the only real currency that owes no one anything. Gold and silver are the antithesis of fiat money. They are the only way to restore order out of chaos.

Europe’s problems are not going away. Yields on Irish bonds continue to rise as well as those of Portugal reflecting concern that they may be in a position similar to Greece. In fact the spreads are near the highs experienced last May. Ireland’s yields jumped almost half a point last week. These events can only mean Europe is headed into further financial trouble and those problems will effect bond and share markets worldwide.

Markets are looking for re-flation. Whether this is the case in Europe remains to be seen, but it sure is manifesting itself in European and US stock markets. European bond markets are showing pressure, but as yet it doesn’t seem severe. It looks like the markets are looking for a negative event and that could be in Greece in the form of a forced, change of government. In addition, we believe the markets are positioning themselves for a weaker dollar and to them that means gold and silver and commodities are headed higher. Most internationals believe that global government policy makers have the situation financially under control, when nothing could be further from the truth. Just how long do they think the public will tolerate severe austerity accompanied by inflation in the US and England and to a lesser extent in Europe? Greece could again prove a catalyst for problems that could spread worldwide.

Leverage is certainly in play in world markets, but not nearly to the extent that it once was. No one has a handle on the degree of leverage, but in time we believe we will find it was a fraction of what occurred 2-1/2 years ago. On the other hand, world speculators are convinced there will be quantitative easing in the US, which they believe will definitely be followed in England and Europe. Contagion continues in many phases. We might even call it a lemming process. Europe feels they have seen the worst and they Are wrong. Europe has many problems that have not been solved including the near bankruptcy of five major nations. Do not forget as well that Germany has said that is it. No more bailouts. Close to $1 trillion was enough. We believe far more will be needed. If Germany sticks to its announcements that could be the end of the euro, which is back trading above $1.30, having bottomed close to $1.19. Don’t forget as well the 8-month rally on European exports is over due to this higher euro. Bond dealers keep telling us the worst is over, but they do not have a very good track record, so we look at their statements skeptically, just as we do the dog and pony show called CNBC.

We see danger in liquidity borne prices of stocks and bonds. Even speculative paper is selling at its fastest pace this year. There are obviously those who think otherwise as gold, silver and commodities move higher. Investors are chasing yields and it is the worst possible thing they can do. That always leads to a quality trap and losses. We learned our lesson on that count many years ago.

The Fed and the Treasury have created an intolerable situation for those who need income. Retirees in their 70s and 80s should not be forced to chase yields.

Deflation certainly has been an underlying factor in the US economy for the past seven years, only to be offset by money and credit creation. The issue is very complex and it is a constant question and understandably so. The entire world has offset deflation with inflation over that period. There is no question in our minds that higher inflation is in the offering and the antics of the Fed could very well lead to hyperinflation, before deflation finally wins out over a broken system. The path we are following may be fascinating, but it will also be devastating. A robust inflationary bias burns off very quickly. Inflation once used, as an instrument of control has to be continued indefinitely. If it isn’t the system collapses into deflation. Even moving currencies around by treasuries’ is not easy in a $4 trillion daily market. Look at Japan last week they spent $500 billion to weaken their currency and got next to nowhere. This is a strong indication of the limits of power of governments’ in currency markets. Government controls of markets are nearing an end.

We do not have exact figures of the Fed’s intervention in the MBS, CDO, GSE and Treasury markets it has to have been at least $2.2 trillion over a one-year period plus the last stimulus package, which puts the number at $3 trillion. Unfortunately it looks like that will have to be done all over again for another year and perhaps two years. You say, where does it all end? Well it doesn’t – it just gets worse as purchasing power falls at least 7% a year, wages remain stagnant and unemployment rises, as government and the Fed cannot stem deflation even by creating $3 trillion, or so, a year. This should give you an idea of the trouble we are in. In this process unfortunately the dollar is being destroyed. Just think of what will happen if China, Japan and Korea have to sell or want to sell dollars? Are we to see competitive monetization? Of course we are. Alliances are one thing and reality is another. As we said 17 months ago what you are seeing is a battle between the US dollar and gold for supremacy and gold has already won. Those who realize and understand this know where we are headed. Those who do not could lose it all.

This past week the Dow rose 1.4%, S&P 1.4%, Russell 2000 2.4% and Nasdaq 3.4%. Banks rose 0.6%; broker/dealers were unchanged; cyclical 2%; transports 0.7%; consumers 1%, as utilities fell 0.9%. High tech rose 3.4%; semis 5.6%; Internets rose 3.2% and biotechs 1%. Gold bullion rose $28.00, as the HUI jumped 2.8%, and the USDX fell 1.6% TO 81.40. The 10-year notes fell 5 bps to 2.74% and the 10-year German bunds rose 3 bps to 2.43%.

Freddie Mac’s 30-year fixed rate mortgage rates increased 2 bps to 4.37%. The 15’s fell 1 bps to 3.82%. One-year ARMs fell 6 bps to 3.4% and 30-year fixed rate jumbos fell 5 bps to 5.32%.

The Fed credit expanded 2.7%. Fed foreign holdings of Treasuries fell $11.1 billion.

Homebuilder sentiment from the NAAB/Wells Fargo Housing Market Index was unchanged at 13, unchanged from last month, the lowest since March 2009. This survey is very subjective.

We saw the FDIC Friday Night Financial Follies again with one bank going under.

A Florida judge has found JPMorgan Chase, as servicer for Fannie Mae, committed fraud by foreclosing withholding a mortgage. This is big news and sets a precedent. This stops banks in their tracks if they do not have the mortgage paper.

GMAC mortgages has halted all foreclosures in 23 states. This and the JPM action could take many lenders under because they do not have the mortgages, they sold them.

Corporate executives are more likely to end up in court for their employees’ misconduct now that Congress has handed broader powers and more money to the U.S. Securities and Exchange Commission, former agency officials said.

Since the start of the financial crisis, lawmakers, investors and judges have criticized the agency for giving bosses a pass while accusing companies of wrongdoing, as in recent cases involving Citigroup Inc. and Bank of America Corp. The Dodd-Frank regulatory act lowers the bar for filing fraud lawsuits against individuals and authorizes the SEC to double its spending within five years.

“The SEC is going to cast a much broader net to include people on the edge of a fraud,” said Steve Crimmins, a former trial attorney at the agency who’s now at law firm K&L Gates LLP in Washington. “There will be legions more SEC cops on the beat and that will mean a lot more activity.”

Under Dodd-Frank, which was signed into law in July, the SEC can sue an individual who “recklessly” aids a fraud even if the person isn’t aware of the wrongdoing. Previously, lawyers had to show the person knowingly assisted the misconduct. The law also allows the agency to sue senior officers, directors or other people directly or indirectly accountable for the fraud.

Robert Khuzami, the SEC’s top enforcement official, is scheduled to answer for the agency’s progress tomorrow before the Senate Banking Committee after Senator Ted Kaufman, a Delaware Democrat, told him in December he was “frustrated” that regulators hadn’t been able to prosecute more executives and bankers.

Citigroup Inc. said Friday it is selling its student loan business and about $32 billion in related assets to Discover Financial Services and the student lender Sallie Mae, Citi's latest move to focus on its core consumer banking business.

The big banking company has been looking for a buyer for its 80 percent stake in the Student Loan Corp. for some time as it refocuses it operations. Citi was one of the hardest hit banks by the recession and credit crisis.

Citigroup Inc. said Friday it will take a loss of about $500 million loss on the deal in this year's third quarter.

Discover has agreed to pay $600 million for the Citi stake in the Student Loan Corp. and will also acquire $4.2 billion of private student loans.

Sallie Mae will get $28 billion of assets, adding another 1.3 million new customers.

The complex deal comes amid rapid change in the student loan market, after a law this year consolidated the federal student loan program and largely cut private lenders out of the process. By making loans directly, and ending federal guarantees of private student loans, the government hopes to save money. That has left private lenders seeking alternatives to making loans, and trying to sustain their business by acting as servicers collecting payments on loans the government makes.

Larry Summers, director of the White House's National Economic Council, is expected to leave that post in November, Bloomberg News reported Tuesday, citing three unidentified people close to the matter. Summers has already discussed his future plans with President Barack Obama, according to one of the sources cited by Bloomberg. Summers' departure would leave Timothy Geithner as the last of Obama's original economic team still standing.

Bad news is good news for stocks because the Fed and solons are determined to rig stocks and other financial markets to prevent any serious decline. This is why we have been advocating: “Wait & Watch”.

Any ugly news or negative technical development in stocks (i.e. Hindenburg Omen or breach of key support) is immediately countered by POMOs or some other intervention – both direct and indirect (i.e. sending in stooges to juice SPZs, etc.)

Koch Industries Lawyer to White House: How Did You Get Our Tax Information?

http://weeklystandard.com/blogs/koch-in ... ormation-1

Abuse of the IRS was one of the articles of impeachment against Richard Nixon.

Naked short-sales of shares and government bonds would be limited and some over-the-counter derivatives trades forced through clearinghouses, under European Commission proposals to safeguard financial markets. Frequent traders of some OTC derivatives in Europe will be forced to use central clearinghouses to close sales, while naked short-sellers would be required to submit proof they can access the underlying security to settle a trade designed to profit from falling prices, under two separate initiatives.

The financial crisis will accelerate the shift of economic power to emerging economies as their recovery outpaces that of developed countries, the Centre For Economics and Business Research said. Nations in the Organization for Economic Cooperation and Development will account for 66% of the world’s gross domestic product by 2015, compared with 77% in 2004. ‘The focus of global economic activity will shift increasingly to countries like China, India, Russia and Brazil and to a lesser extent Mexico, Canada and Australia.

Efforts to tame America’s ballooning budget deficit could soon confront a daunting reality: Nearly half of all Americans live in a household in which someone receives government benefits, more than at any time in history. At the same time, the fraction of American households not paying federal income taxes has also grown—to an estimated 45% in 2010, from 39% five years ago, according to the Tax Policy Center… A little more than half don't earn enough to be taxed; the rest take so many credits and deductions they don't owe anything.

The American dream of owning a home has lost some of its allure after years of falling home prices and owners facing financial ruin. A new survey by Fannie Mae shows the number of people who say they consider housing a safe investment continues to decline, falling to 67% in July from 70% in January and 83% in 2003.

Parking garages serving the new Yankee Stadium in the Bronx are headed for default on $237.6 million of tax-exempt bonds due to low usage in the face of cheaper alternatives.

US home seizures reached a record for the third time in five months in August as lenders completed the foreclosure process for thousands of delinquent owners, according to RealtyTrac Inc. Bank repossessions climbed 25% from a year earlier to 95,364, the most since the data provider began keeping records in 2005. ‘We’re on track for a record year for homes in foreclosure and repossessions,’ Rick Sharga, RealtyTrac’s senior vice president, said. There is no improvement in the underlying economic conditions.

Taxpayer losses from the government seizure of failed housing finance giants Fannie Mae and Freddie Mac could reach nearly $400 billion, but likely won’t top that level as some had feared, the firms’ federal regulator said To offset some losses, the Federal Housing Finance Agency is seeking billions of dollars in repayment from banks that sold bad loans to the firms, acting director Edward J. DeMarco said.

US lawmakers will grapple today with how to end the bailout of Fannie Mae and Freddie Mac after two years and almost $150 billion, and who pays the bill for bad loans made during the housing boom. Regulators who seized control of the two mortgage lenders in 2008 are under pressure to stem losses for taxpayers and recoup money from banks that sold faulty loans to Fannie Mae and Freddie Mac -- all without hindering the housing market’s recovery.

US state pensions such as Illinois, Kansas and New Jersey are in a ‘death spiral,’ with assets at many insufficient to cover benefits, payouts consuming a growing portion of resources and costs rising twice as fast as investment gains. Less than half the 50 state retirement systems had assets to pay for 80% of promised benefits in their 2009 fiscal years. Two years earlier, only 19 missed the mark. Illinois covered just 50.6% of benefits last year, the lowest so-called funded ratio. In 2007, none exceeded the threshold. The growing burden prompted Colorado, Minnesota, Michigan and other states to trim benefits for millions of teachers and government workers… The largest Illinois pension, the $33 billion Illinois Teachers’ Retirement System, paid $3.7 billion of benefits in the year ended June 30, 2009. That’s 13% of its assets at the time, up from 8% two years earlier.