Market crash 'could hit within weeks', warn bankers

A more severe crash than the one triggered by the collapse of Lehman Brothers could be on the way, according to alarm signals in the credit markets. 

Insurance on the debt of several major European banks has now hit historic levels, higher even than those recorded during financial crisis caused by the US financial group's implosion nearly three years ago.

Credit default swaps on the bonds of Royal Bank of Scotland, BNP Paribas, Deutsche Bank and Intesa Sanpaolo, among others, flashed warning signals on Wednesday. Credit default swaps (CDS) on RBS were trading at 343.54 basis points, meaning the annual cost to insure £10m of the state-backed lender's bonds against default is now £343,540.

The cost of insuring RBS bonds is now higher than before the taxpayer was forced to step in and rescue the bank in October 2008, and shows the recent dramatic downturn in sentiment among credit investors towards banks.

"The problem is a shortage of liquidity – that is what is causing the problems with the banks. It feels exactly as it felt in 2008," said one senior London-based bank executive.

"I think we are heading for a market shock in September or October that will match anything we have ever seen before," said a senior credit banker at a major European bank.

Despite this, bank shares rebounded on Wednesday, showing the growing disconnect between equity and credit investors. RBS closed up 9pc at 21.87p, while Barclays put on 3pc to 149.6p despite credit default swaps on the bank hitting a 12-month high. This mirrored the US trend, with Bank of America shares up 10pc in late Wall Street trade after a hitting a 12-month low on Tuesday over fears that it might have to raise as much as $200bn (£121bn). As with the European banks, the rebound in the share price was not reflected in the credit markets, where its CDS reached a 12-month high of 384.42 basis points.
European stock markets joined in the rally. The FTSE closed up 1.5pc at 5,206 on hopes the chance of a global recession had diminished. European shares hit a one-week high, with Germany's DAX closing up 2.7pc and France's CAC 1.8pc higher. The Dow Jones index edged higher on strong durable goods orders data as markets began to accept that the US Federal Reserve is unlikely to signal fresh stimulus at Jackson Hole this Friday.
Even Moody's decision to downgrade Japan's sovereign credit rating by one notch to Aa3 did little to damage global sentiment, although Tokyo's Nikkei closed down just over 1pc.
As stock market nerves settled, gold - which has recorded steady gains recently as investors seek a safe haven - fell 5.3pc to $1,777 in London.

Battle for the California Desert: Why is the Government Driving Folks of...

"Stop Spending, Stop Spending, Stop Spending!" (Santelli Loses It, Calls Liesman A Communist - Classic Video)

Watch Video

CNBC Video:  Rick Santelli, Steve Liesman, Joe Kernen - June 28
Santelli annihlates fiat spending, and it's messenger Steven Liesman.
Watch the entire clip if you have time, though the mayhem doesn't really get going until after the 7-minute mark.  Santelli and Liesman both come close to losing it.  These quotes don't do justice to the emotion.

• "Go read some Austrian economist instead of the funny pages."

• "I am ready to talk about Fred Hayek, John Hayek, and Selma Hayek."

• "Go back to Russia where you understand the state and the citizen."

Silver Shield’s Final Warning

One year ago marked the beginning of silver returning to it’s rightful role as money in the world.One year ago silver was at $17.76 an ounce after a very long and drawn out consolidation that went all the way back to St. Patrick’s Day 2008.
One year ago was the beginning of silver’s breathtaking run to almost $50 an ounce, a 178% return. Even today, despite the massive paper attack in May and the last two days, we are still up 104% year over year.
When I published the ground breaking Silver Bullet and the Silver Shield article February 25th silver was at $32. On June 27th I said to buy physical silver at $33 silver. Both date’s were very good days to buy and never went below those numbers.
Now I am telling you all, for the last time, buy physical silver. I will be taking this weekend to make every effort I can to make those that have been wavering in their purchase of physical silver, to make the commitment and to do it before the end of this month.
I believe that we are on the knife’s edge of a major shift that will make silver untouchable if you do not secure your metal right now.
The end of this month marks a seasonal shift for silver investors and the end of the “sell in May and go way.” With the expiration of the CRIMEX contract today and with Bernanke’s possible announcement of QE3 tomorrow, this could be that last, best time in your life to buy physical silver.
If you look at this 37 year seasonal chart for silver you can see that the last week of September is the beginning of a very strong seasonal move in silver that should take us into another strong run all the way into February.
If we get something similar like we did last year and it runs until May, we could see $100 silver early next year.
I do not believe we will see $100 silver, because of the massive fraud in the metal suppression business will make silver unattainable. Silver and gold are direct competitors to the Dollar. The folks at the Fed, the Treasury and JP Morgan do not want to see silver rise in price.
They suppress the price, because if silver rose that would mean that the basis for all of their power, the dollar, would become worth less and eventually worthless. Andrew MacGuire exposed this fraud and nearly paid with his life in a very suspicious hit and run.
His claim is that there is 50 to 100 times the amount of paper traded for every physical ounce of real silver and gold. Just look at all of the manipulation in the May silver drive by shooting I reported on.
The Elite use a myriad of paper schemes to suppress the price of the physical metal. They all work rather effectively, until the day comes that they cannot deliver on what they promised.
This coming seasonal silver bull run will coincide with a collapse in the dollar and the world’s paper markets. There will be a rush of humanity into anything of real tangible value.  Unfortunately, there is going to be a lot of upset people who think they have gold and silver, only find out that they only have nothing.  If you don’t hold it, you don’t own it.
When this new reality becomes evident to those that do have the metal, they will not part with it for some paper money that they did not want years before. (Read: The 11 Mentality Shifts of Silver Investors.) That shift can happen in the span of a few days.
With the length of time I know it takes to move money around, if you wait until “it” happens, it is too late.
I think even Steve Jobs resignation yesterday marks a very important shift in people’s faith in paper assets.  It was widely reported that Apple’s market cap was higher than 32 of the largest banks in the Euro Zone.
It seems that all of the Elite money managers love Apple.  Apple’s market cap is the largest in the world and it is driven mainly by the cult like following of Mac users to Steve Jobs. (I am guilty of this, since I own an embarrassing amount of Apple products.)  At the end of the day, what goes up must come down.  I would hate to be Tim Cook today.
No matter what this guy does, he will never fill the shoes of Steve Jobs.  Even if he does prove to be successful CEO, the inflated market cap of Apple will take a hit as people’s perceptions of the company will be deflated without the God-like influence of Steve Jobs.  The fall of Apple will leave a lot of money searching for a home.
With the mathematically inevitable collapse of the dollar, there is no good place to keep your wealth inside the paper casino.
This seasonal shift is coinciding with a secular shift in power, so when I say that this could be your last, best chance to buy physical silver, I do not say this for shock value.  I say it because we are entering the most dangerous time in humanity as we head into this fall and into 2012. This will not be another 2008 or 1929.
This mathematically inevitable collapse of the dollar, will be the single largest event in human history. The collapse of the dollar will alter the way we live for generations to come.
When it collapses, all paper assets will become worthless as the very basis for the paradigm ceases to function. Not only will people’s perception of values shift, I believe that power will shift from West to East and that will lead to war.
I have made every effort I know to convince you to sell every single paper asset you own to buy physical silver. I stated in the ground breaking article The Silver Bullet and the Silver Shield that, “Buying physical silver is by far the greatest act of wisdom and rebellion any American can and should be doing right now.”
In that article, I put forth a plan that will fundamentally change the game and do it from outside the system. It will overthrow the Elitist system that enslaves us with debt and do so without a shot being fired.
Most importantly, there is no way the Elite can stop it. The plan is quite simple, sell every paper single asset you own right now and buy physical silver.
As with anything else in life, knowing the answer is not as important as knowing the “why.”
The “why” is what brings about fundamental change in your thinking.
This change in thinking brings about absolute certainty of the outcome.
Absolute certainty brings about massive action.
If that was not enough, I went ahead and provided 10 more influential articles that further expanded the understanding of owning  physical silver and that it is the greatest investment opportunity in human history.
I did not stop there, as I then set about on a campaign to knock the foundations out of all other things that you might have faith in.
I exposed the dollar, bonds, IRA’s, 401K’s, Gold, paper gold, paper silver,  SLV, CRIMEX, BullionVault, Hong Kong Mercantile Exchange, Real Estate, unemployment and inflation statistics, where you live,  your awareness, your thinking, your politics, your pay check,  your paradigm, guys against the banksters, and even other gurus and writers that say the dollar is going to collapse, only to lead you back to other paper assets. I did this to get you to really think about where you are putting your faith and to take massive action before the collapse.
In my first article Doom is Always 6 Months Away I put forth a theory that at some point “the physical market of silver will not be available at any price.”   The paradigm shift that I went into further detail in the Silver Door is Closing and the 11 Mentality Shifts of Silver Investors will bring about such a change in public perception of silver that those that have the silver, will no longer even consider selling it for worth less paper money.
When you see action like Hugo Chavez bringing home tons of real gold from England to Venezuela, that shift is happening.  When you see the massive moves in the paper markets versus the real markets, that shift is happening.  When you see that the Fed can print $16 trillion out of thin air, that shift is happening.
When you see that the Governments will never say no to debt and the economy is headed down again, that shift is happening.  At some point in the very near future, a change is going to happen and if you are not into the safety of real assets, it will be too late.
I am not the only one that is seeing this move. One of my favorite writers, Jim Willie said last week, “The Silver investment demand is due to a big important recognition that Silver is in the process of resuming and reclaiming its monetary role. The Chinese lead in that parade, adding silver to their reserves in management of their $3.2 trillion reserves booty.”
With only 33 million ounces of silver in the Registered vaults of the CRIMEX, that is less than a .0375% of just Chinese reserves foreign reserve. That silver is less than six hours of debt that our government has been printing up at a record pace.  Less than .3% of Apple’s Market Cap could buy up all of the remaining silver at the CRIMEX.
With 28,000+ contracts of open interest just in the September CRIMEX contract alone, only 23% of those contracts need to stand for delivery next month and there would be no physical silver left. If we included all of the other contracts floating on that same metal all the way out until 2016, that drops to just 6% need to stand for delivery.
The actual amount in the vaults have been draining so fast and so long, that we are coming near the event horizon for silver.
When that happens there will be no “do overs”,  just people with their “shoulda, woulda, couldas” and those with the real stack.

I have concentrated my efforts on silver, because I knew that it was the place to get the most attention this year and there was still time. The time was ripe for people who are ahead of the curve, to work on getting their assets out of paper and into the real world.
At the end of this month, I feel if you do not have your assets out of paper assets and into silver, it will be too late.  I mean honestly, do you really need anymore evidence than the massive amount of work that I have put into your education?
Those that have not made the move will either be caught in the rapid and massive collapse of the dollar and all of the world’s markets or futilely waiting for some “pull back” in silver to make their move. I have always been a fan of dollar cost averaging into silver, but those days are over. You better have what you want today or risk not making it through to the next monetary paradigm with your purchasing power intact.
If you need a minimum number to shoot for, I would say 1,000 ounces of physical silver. Much less is needed for most. Many Academy members have bought much, much more than that. I encourage you all to do a lot of deep thought on this before you do anything rash like I did in 2005, when I sold everything I had including my house and bought physical silver.
This is not about the dollar investment of silver, this is about a massive change in your life. Physical silver will be the least of your worries if you are not physically prepared with the real assets like food, fuel, water and guns.
The most important thing you will need above all else, is the ability to think. Buying real assets now is just the kind of thinking your life will rely upon when”it” happens.
After today, I will no longer be writing  as much as I have on the DTOM blog and certainly not on the merits of physical silver, as I will explain in length below. I will post comments and articles of interest on current events, but I will no longer post articles that take me all day to compose and distribute, especially not anymore on buying silver.
I feel the new writers that are contributing to DTOM are doing a great job and I find myself looking forward to their every article.  If you have been lurking on DTOM for a while, you MUST get on our mailing list to keep up with my latest thoughts as we head into the Fall and the great upheaval, 2012 will bring.
I am going to devote my full energies into the revamp of the Sons of Liberty Academy and it will be called The Greatest Truth Never Told.
I am so excited for you all to see this new project, as I believe this will be a game changer in the Freedom Movement. This project will be the answer humanity is looking for as the collapse of our paradigm happens. I changed the name to provide a more commercially acceptable title that almost compels people into at least look into the project.
I have taken great care in improving the Academy in three specific areas.
1. Production value. When I did the first Academy, I was working full time in a very demanding 6 figure job. All of it was done either very early in the morning or very late a night.  This made for a “just get it done” quality to the Academy, including the vocal pauses, poor grammar choices, the occasional curse word, coughs and I think even a fart.
I also had no idea what I was doing or how to produce anything on the internet, much less videos. My amateur efforts show despite the stunning quality of the information.
Producing 48 hours of video lessons is tough enough, but doing it by yourself, learning along the way, and working a full time job, is next to impossible. Now, I have none of those excuses.
2. Content. I have been working diligently on closing some of the gaps the Academy left open.  I am comfortable now with all of the included material that the gaps have been closed and corrected.
My hope is that this added content will not add any length to the project, as I will take great care to speed up the pace and energy of the whole presentation.
3. Narrative. The original Academy was a PowerPoint presentation that laid out a bunch of facts in the way that I wished I had learned it. The Greatest Truth Never Told will provide a documentary style narrative that will tie together these facts into a compelling presentation that should capture your imagination.
I took great care to present all of the information in a way that builds upon itself with a powerful undertow to wipe away programmed paradigm thought and replace it with a tsunami of new ideas and facts that should end up being a life changing experience for all who make the journey.
The Greatest Truth Never Told will be my last, best effort to warn humanity about the coming paradigm shift. I plan on making the project available online, DVD, book, ebook and audio book.
I will release them all as they get done, instead of waiting for all of them to get done together. Once done, I will either return to the blog full time or pursue other opportunities that will certainly be available after TGTNT is released.
Knowing the end is near for the dollar and cheap silver, I am preparing myself to stay ahead of the curve. I will be moving into the next area that will be the best place to be, teaching about the collapse and building the intellectual foundation for the next revolution of ideas. When the majority of the people in the world wake up to the dollar collapse, they will not want to hear that they should have bought silver, because it will be too late for them.
I do not intend to keep speaking about it anymore. They will want to know what happened, who caused it, and what to do about it. That is why I intend to spend my time on The Greatest Truth Never Told. I will put my effort into that project to serve that huge coming need of humanity.
That will bring us to the crisis where all bets are off and things get sticky. I hope that my Game Changer idea catches on, as I think that it is the best idea I have come up with. That would certainly take forces much greater than I could put together.
I wanted to build a network of people who “got it” before “it” happened.  Not only would they be the best and brightest who saw what was coming, they would be very wealthy when the new paradigm came. These are the kind of people I want to work with when the day comes. I do not want to work with some “Johnny come lately opportunist” who gets “it” after the collapse.
Quite frankly, it will be too dangerous to work with even the most well intentioned desperate person.  The crisis period will be a period that I will only work with the community of people who get it.  I am so proud of all of the really great people I have been in contact with over the past year.
With over 15,000 people in our Academy that is far in excess of what I set out to do.  I know that when the time comes, we are going to wonderful things in rebuilding a society where peace, freedom and honest money will rule the day.

Peter Schiff - Bernanke Is Gonna Keep Printing Money! Thats All He Knows!

http://revolutionarypolitics.tv/video/viewVideo.php?video_id=16101

Madoff: Insider trading rife on Wall Street

By Agence France-Presse
Raw Story

Bernard Madoff, who ran one of the biggest Wall Street frauds in history, says that many of his former colleagues in the financial industry are also crooks.

In a prison interview with Fox Business Network published Thursday, the Ponzi scheme mastermind claimed that insider trading “goes on at every major firm’s Prop Desk and at every level of the industry in plain sight.”

“It is unfortunate, to say the least, that the financial services industry is so corrupt and stacked against the typical investor,” he told Fox in an email.

One of Wall Street’s most notorious criminals, Madoff used his powers of persuasion to trick thousands of clients over decades to invest with him.

He stole from fresh deposits to create fake profits for existing clients, providing high and steady returns that seemingly made him one of the industry’s top performers.

The Ponzi scheme collapsed in 2008 and after Madoff pleaded guilty the following year, he was given a prison sentence of 150 years.

In the Fox interview, he claims that his scheme could not have worked if clients hadn’t willfully ignored warning signs that he was not running a legitimate investment business.

Read More: http://www.rawstory.com/rs/2011/08/25/madoff-insider-trading-rife-on-wall-street/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheRawStory+%28The+Raw+Story%29

Matt Taibbi - Obama Goes All Out For Dirty Banker Deal

By Matt Taibbi
Rolling Stone
Excerpted below.
A power play is underway in the foreclosure arena.
On the one side is Eric Schneiderman, the New York Attorney General, who is conducting his own investigation into the era of securitizations – the practice of chopping up assets like mortgages and converting them into saleable securities – that led up to the financial crisis of 2007-2008.
On the other side is the Obama administration, the banks, and all the other state attorneys general.
This second camp has cooked up a deal that would allow the banks to walk away with just a seriously discounted fine from a generation of fraud that led to millions of people losing their homes.
The idea behind this federally-guided “settlement” is to concentrate and centralize all the legal exposure accrued by this generation of grotesque banker corruption in one place, put one single price tag on it that everyone can live with, and then stuff the details into a titanium canister before shooting it into deep space.
This is all about protecting the banks from future enforcement actions on both the civil and criminal sides. The plan is to provide year-after-year, repeat-offending banks like Bank of America with cost certainty, so that they know exactly how much they’ll have to pay in fines (trust me, it will end up being a tiny fraction of what they made off the fraudulent practices) and will also get to know for sure that there are no more criminal investigations in the pipeline.
This deal will also submarine efforts by both defrauded investors in MBS and unfairly foreclosed-upon homeowners and borrowers to obtain any kind of relief in the civil court system. The AGs initially talked about $20 billion as a settlement number, money that would “toward loan modifications and possibly counseling for homeowners,” as Gretchen Morgenson reported the other day.
To give you an indication of how absurdly small a number even $20 billion is relative to the sums of money the banks made unloading worthless crap subprime assets on foreigners, pension funds and other unsuspecting suckers around the world, consider this: in 2008 alone, the state pension fund of Florida, all by itself, lost more than three times that amount ($62 billion) thanks in significant part to investments in these deadly MBS.
So this deal being cooked up is the ultimate Papal indulgence. By the time that $20 billion (if it even ends up being that high) gets divvied up between all the major players, the broadest and most destructive fraud scheme in American history, one that makes the S&L crisis look like a cheap liquor store holdup, will be safely reduced to a single painful but eminently survivable one-time line item for all the major perpetrators.
In Schneiderman we have at least one honest investigator who doesn’t agree, which is to his great credit. But everyone else is on Wylde’s side now. The Times story claims that HUD Secretary Shaun Donovan and various Justice Department officials have been leaning on the New York AG to cave, which tells you that reining in this last rogue cop is now an urgent priority for Barack Obama.
Why?  My theory is that the Obama administration is trying to secure its 2012 campaign war chest with this settlement deal.  If Barry can make this foreclosure thing go away for the banks, you can bet he’ll win the contributions battle against the Republicans next summer.
Read the rest at Rolling Stone...

Warren Buffett: I Dreamt Up Bank Of America Deal In The Bathtub (VIDEO)

(VIDEO)

CNBC Video - Buffett explains the genesis of the BofA deal to Becky Quick - Aug. 25, 2011
Huffington Post
Warren Buffett is the third wealthiest man in the world. He also seems to like making market-shifting financial decisions while relaxing in the bath.
On Thursday, Buffett, the billionaire investor and CEO of Berkshire Hathaway, announced his company would buy $5 billion worth of shares in Bank Of America. Critics wondered if Buffett had been pressured to help the troubled bank. Not so, Buffett says.
"He says he just dreamt this idea up on Wednesday morning while he was in the bathtub," CNBC's Becky Quick said on Thursday after speaking with Buffett over the phone.
---
Related video.
William Cohan thinks the Buffett deal will make it easier for BofA to raise additional capital.

Back Off Banksters: NY Attorney General Fights Back

Complete background for this story is here:

• Iowa AG Tom Miller Removes NY AG Eric Schneiderman From Foreclosure Fraud Executive Committee

---
Sources:
4ClosureFraud.org
NY Daily News
NY AG Fights Back After Being Kicked Off Mortgage Fraud Investigation

As we noted in Wake-Up Call, Reuters reported that Schneiderman, a Democrat in his first term as AG, "has voiced concerns over a proposed settlement between major banks and a coalition of federal and state officials over claims of foreclosure abuses. He has come under increasing pressure to approve the deal."

Schneiderman is certainly framing himself as the good guy in this situation -- someone who wants to delve deeply into mortgage irregularities instead of simply reaching a fast settlement and getting the whole thing over with.

In an email to campaign supporters today, which came with the subject line "Standing Up For You," he wrote:

"Let me tell you directly: I am deeply committed to pursuing a full investigation into the misconduct that led to the collapse of America's housing market, and to seeking a resolution that gives homeowners meaningful relief, allows the housing market to begin to recover, and gets our economy moving again.

"Our ongoing investigation into the housing crisis cannot be shut down to accommodate efforts to settle quickly and give banks and others broad immunity from further legal action. If you have any thoughts or concerns about this critical issue, please contact me at 1-800-771-7755, or send a message via Facebook or Twitter."

Take a moment to send thanks and encouragement to Eric Schneiderman & his staff who are aggressively investigating fraudclosure and felony land record fraud.
As is anyone who stands up and speaks out against TBTF predatory and criminal acts against Americans, Mr. Schneiderman is being attacked.
Remember that he is an elected official who is actually representing the people who elected him instead of the financial institutions!  A rarity indeed who must be thanked and encouraged.
Contact info below...

NY AG Contact Info

Phone
1-800-771-7755
Webmail
http://www.ag.ny.gov/online_forms/email_ag.jsp
Press Office
NYAG.Pressoffice@oag.state.ny.us
Twitter
http://twitter.com/#!/AGSchneiderman
Facebookhttp://www.facebook.com/AGSchneiderman?sk=wall

College Conspiracy

Peter Schiff On Ron Paul's Stock Portfolio

Watch Video

Video - Peter Schiff comments on Ron Paul's investments - Aug. 22, 2011
See a complete list of Ron Paul's stock holdings inside.
Here's Ron Paul's portfolio:
Agnico Eagle Mines
Allied Nevada Gold Corp.
Alumina Common
Anglo Gold Ashanti Ltd.
BrigusGold Corp. Com MPV (formerly Apollo Gold Corp)
Barrick Gold Corp.
Claude Research Inc
Coeur D'Alene Mines Corp.
Dundee Bancorp
First National Bank of Lake Jackson
Gold Corp Inc
Hecla Mining Co.
El Dorado Gold Corp.
IAM Gold Corp.
Kinross
Lexam Explorations Inc.
Mag Silver Corp.
Metalline Mining Co.
Mutual Securities Inc.
Newmont Mining Corp.
Pan American Silver
Petrol Oil and Gas
Prudent Bear Mutual Fund
Rydex Dynamic Venture
Rydex-Ursa Mutual Fund
Silver Wheaton Corp
Texas Dow Employees Credit Union
Texas Gulf Bank
Virginia Mines Inc.
Vista Gold Corp.
Viterra Inc
Wesdome Gold Mines Ltd.

Nomi Prins: Could Lloyd Blankfein Face A Prison Sentence?

The Goldman Sachs CEO didn’t get a big-time criminal-defense lawyer because he’s worried about an SEC wrist slap—there’s a real possibility of doing time (for perjury AND obstruction of justice), says former Goldman managing director Nomi Prins.
Daily Beast
There’s a saying that loose lips sink ships. So can dead weight.
Goldman Sachs CEO Lloyd Blankfein, who just got himself a lawyer, may be facing the possibility of sinking, either because of his own words in April 2010 before the Senate Permanent Subcommittee on Investigations (PSI) or because his shipmates are distancing themselves in a legal version of every man for himself. Or both.
Recall that Blankfein emphatically told the subcommittee, “We didn’t have a massive short against the housing market, and we certainly did not bet against our clients.” The 650-page subcommittee report (PDF) presented on April 13, 2011, which cites Blankfein 79 times, begs to differ.
The report accused Goldman of trading against its clients by simultaneously shorting certain subprime mortgage securities (a.k.a. “cats and dogs”) while stuffing them into the collateralized debt obligations it sold. It also suggested that Goldman executives, including Blankfein, misled Congress in testimony surrounding the Abacus CDO, Hudson, Timberwolf, and other deals, by saying it didn’t have a big short.
The top lesson I learned before leaving Goldman in the wake of Enron was Goldman’s foremost internal policy is to protect Goldman. It’s also to protect the most powerful members. When cracks manifest in the corporate armor, those two policies are at odds.
The executives running Goldman are exceedingly wealthy, not least because when the firm faced its darkest hour and lowest stock price in years during the bank-created crisis of fall 2008, the government provided it billions of dollars in the form of cheap loans, FDIC debt guarantees, TARP, AIG make-wholes, and a late-night moniker change from investment bank to bank holding company, giving the firm access to excessive Federal Reserve aid.
Continue reading...

Allstate Sues Goldman Over $100 Million In Fraudulent Mortgages, Mitt Romney Is Thurston Howell III, Rush Limbaugh 'Freaked Out' By Ron Paul's Success

Watch Video

Video - Maddow On Mitt Romney As The 'Thurston Howell III' Of American Politics

• Allstate Sues Goldman Sachs Over $100 Million In Fraudulent Mortgages
• Bernanke Likely To Disappoint Markets With Jackson Hole Speech - Bloomberg
• Obama May Back NEW Refinance Plan for Mortgages - NYT
• GOP Operatives (Rush Limbaugh) Fear Lasting Ron Paul Problem
• A difficult year for many hedge funds may prove FATAL for some - The Economist
• Millions of Jobless Americans Filing For SS Disability To Get Food, Medicine
• Germany Considers Short-Selling Ban, France Will Make Statement Today
• Sen. McCain Calls Out Russia For Lack Of Democracy
• More Than 100 Business CEOs Sign Starbucks No Campaign Donations Pledge

Back Off Banksters! NY AG Eric Schneiderman Fights Back After Being Kicked Off 50 State Robo-signing Investigation

Please People!
Take a moment to send thanks and encouragement to Eric Schneiderman & his staff who are aggressively investigating fraudclosure and felony land record fraud.
As is anyone who stands up and speaks out against TBTF predatory and criminal acts against Americans, Mr. Schneiderman is being attacked.
Remember that he is an elected official who is actually representing the people who elected him instead of the financial institutions!  A rarity indeed who must be thanked and encouraged.
Contact info below...

NYAG Eric Schneiderman Pushes Back After Being Kicked Off Mortgage Abuse Investigation

BY Celeste Katz
After being pushed off a national panel of state attorneys general looking into subprime mortgage abuses, Eric Scheiderman is basically telling the guys who ousted him where to file their briefs.

As we noted in Wake-Up Call, Reuters reported that Schneiderman, a Democrat in his first term as AG, "has voiced concerns over a proposed settlement between major banks and a coalition of federal and state officials over claims of foreclosure abuses. He has come under increasing pressure to approve the deal."

Schneiderman is certainly framing himself as the good guy in this situation -- someone who wants to delve deeply into mortgage irregularities instead of simply reaching a fast settlement and getting the whole thing over with.

In an email to campaign supporters today, which came with the subject line "Standing Up For You," he wrote:

"You might have been following the latest developments related to the national settlement of the mortgage probe, including this story in today's Huffington Post about our tough fight for a comprehensive resolution to this crisis.

"Let me tell you directly: I am deeply committed to pursuing a full investigation into the misconduct that led to the collapse of America's housing market, and to seeking a resolution that gives homeowners meaningful relief, allows the housing market to begin to recover, and gets our economy moving again.

"Our ongoing investigation into the housing crisis cannot be shut down to accommodate efforts to settle quickly and give banks and others broad immunity from further legal action. If you have any thoughts or concerns about this critical issue, please contact me at 1-800-771-7755, or send a message via Facebook or Twitter."

SOURCE: NY DAILY NEWS
Please everyone, we must support this man. He is our last hope on a national level.
Craft your own words or here’s a sample script to say when you call or to copy & paste when you email:

Thank you all at the NY AG’s office for standing up to predatory banks who are dispossessing, foreclosing, and evicting millions of American families by committing mortgage servicing fraud, securities fraud, modification fraud, felony land record fraud, property conveyance fraud, and fraud upon our courts across the nation.  The impact to our economy of tens of millions of American properties with clouded titles and defiled land records has not even begun.
Please continue this important work.  Please do not let the attacks and push back by the financial industry and their corrupt puppets in positions of power impede your office’s work aimed at protecting citizens from the criminal and predatory acts that have greatly harmed us all.

Now get to work Citizen Warriors!

NY AG Contact Info

Phone
1-800-771-7755
Webmail
http://www.ag.ny.gov/online_forms/email_ag.jsp
Press Office
NYAG.Pressoffice@oag.state.ny.us
Twitter
http://twitter.com/#!/AGSchneiderman
Facebook
http://www.facebook.com/AGSchneiderman?sk=wall

www.4closureFraud.org

Fear Mania Comes to Gold

Is the mania here?
When most investors hear the word “mania” they think of a runaway market induced by greed. You know, that animal-like instinct we all occasionally feel, the one promising riches from a market on a rip-roaring tear.
Gold is up 28% since July 1, a mostly one-way rocket ride that’s transpired in just 36 trading days. It’s up 35% year-to-date, and it’s still summer. But it isn’t greed driving our runaway gold price.
Welcome to the Fear Mania.
Pick your headline – the downgrade of US debt, solvency concerns with European banks, the sudden negative outlook for the global economy, or crashing stock markets. While none of those are exactly shocking developments to most readers here, it caught much of mainstream off-guard, driving them to safe havens. Gold has responded.
Here’s some evidence that we’re in a fear mania. First, as economic fears suddenly took a turn for the worse, investors didn’t rush into stocks. They didn’t even really pursue other precious metals.
Here’s a look at how the four primary precious metals have performed as fear in the marketplace increased. Notice how the returns shifted as the gloom ratcheted up.

What Metal Performs Best in a High Fear Environment?

Asset	YTD Return	Return From April 1	Return From June 1	Return From August 1
Gold	35.0%	31.9%	23.5%	16.6%
Silver	42.7%	15.4%	13.1%	10.3%
Platinum	8.3%	7.2%	4.0%	6.9%
Palladium	-4.5%	-0.7%	-2.1%	-7.6%

Prices through August 22

Since industrial and jewelry uses comprise roughly 93% of all demand for both platinum and palladium, a reasonably positive economic outlook is required for these metals to perform their best. We don’t have that right now, and when a strong economy will return is highly debatable.
Silver started the year with a bang – but even it lagged gold as negative economic news made bigger headlines. Industrial use alone comprises 52% of all demand for silver, so it, too, is vulnerable in a slowing economy. (The price will soar again, though, as we’ve seen the past few days, when bad economic news leaves the front page and investors once again pursue it as an alternative currency.)
There are more clues we’re in a fear mania. Many U.S. investors don’t realize this, but only 8% of bullion and jewelry demand comes from North America. A full 92% of the critical drivers of physical demand originate elsewhere. Gold in these countries (China, India, Vietnam, Indonesia, South Korea, Thailand, etc.) has been intertwined in culture, religion, and economy for 2,000 years. We can thus garner hints about the gold market from these regions, where the metal is a longstanding and ingrained part of the financial makeup.
First, are they pulling back on their purchases in light of rocketing prices? Or perhaps even selling to grab a profit? The World Gold Council reported last week that “signs of strength in the market remain concentrated in India and China… It is quite hard to see what is going to dent strength of demand at the moment.” And this from the UK: “Even at these elevated price levels, interest in physical gold remains excellent,” said Ross Norman, CEO of Sharps Pixley.
A second clue from this large group comes from scrap sales. One would think now is the optimal time to cash in your old gold jewelry, with prices reaching such unexpected highs. So scrap sales are up, right?

From the Wall Street Journal yesterday: “Scrap sales are down by 50%-60%. People are feeling that gold is the only safe place left for investments,” said Pawan Chokshi, an Ahmedabad-based bullion dealer. “There are hardly any scrap sales happening and I think that’s a phenomenon cutting across India. Even at these prices, people are feeling that it’s better to invest in gold rather than sell their old gold.”

Martin Grubb of the WGC said this to Reuters last week: “The price elasticity of recycling seems to be changing. Normally, you would see a lot of recycled gold coming back into the market at such a high gold price – but recycling was very muted in the second quarter, and so far the evidence is that there isn’t a lot of recycling coming back now, either.”

According to Grubb, these regions have adjusted to the current price environment and expect the upward price trend to continue. If fear were muted, scrap sales would be rising at these price levels, not falling dramatically.

And last, don’t forget central banks. South Korea just disclosed a big bullion purchase, buying 25 tonnes last week, more than doubling its holdings. Mexico, Russia, and Thailand have already been major buyers this year. In fact, year-to-date, governments have almost tripled their net gold purchases over 2010, increasing their holdings by 203.5 tonnes this year, up from a 76-tonne rise last year.
Central banks have “fiat fear” and are diversifying their reserves away from the dollar and other afflicted currencies. And this is not a trend that will change on a dime, as most of these countries have a tiny percentage of their reserves denominated in gold. They’ll be buying for quite some time. Remember, they were net sellers of gold for 23 years, becoming buyers just last year.
The bottom line is that gold is doing exactly what it’s supposed to do. Global fear is high, and these are the exact circumstances where gold fulfills its ultimate role.
There are direct investment implications here. First, if you believe there is further shock-and-awe type bad news ahead, you’ll want to favor gold over most other assets and even other metals. Second, prices in a mania tend to go higher and further than what most expect. I certainly wouldn’t chase it here, but I wouldn’t be without some exposure either. Last, high levels of fear also increase volatility. Expect big swings in gold going forward, and that includes corrections. The next one could be a doozy.
In the big picture, think about this: The relentless rise we’re witnessing is just the beginning. We haven’t even hit an inflation-adjusted price from 1980 yet; we’re at least 21% away from that, and that’s assuming the government measures inflation correctly. Here’s an excellent video demonstrating that we’re not yet in a bubble; it also shows just how high the price could climb.
You might not think the price will fetch the high four-digits in this Fear Mania. But don’t forget what comes next.
The Greed Mania.
[Owning physical gold is good protection from the sinking value of the US dollar; investing in the right gold miners can yield even higher returns. BIG GOLD focuses on the larger miners that have strong profit potential, and will help you build your wealth. Give it a ninety-day risk-free trial.]

Jim Rogers Endorses Ron Paul For President: "He's The ONLY One In American Politics Who Has A Clue About What's Really Going On"

Watch Video

Video - Jimmy Rogers on 2012 - Aug. 14, 2011
Interview filmed yesterday.  More good news for Ron Paul's campaign.

Dow Jones Industrial Average

11,284.54 Real-Time Quote

+134.72 / +1.21% Today’s Change

9,937 Today|||52-Week Range 12,876

-2.61% Year-to-Date

 Daily market report

Chart

Quote Details

Previous close	11,149.82
Open	11,135.36
Day high	11,321.77
Day low	10,949.71

Today's volume	162,208,774
Average daily volume (3 months)	202,365,540
Average P/E	13.2
1 year change	+12.91%

Data as of 3:54pm ET, 08/26/2011

Companies in the Dow Jones Industrial Average

Company	Price	Change	% Change	P/E	Volume	YTD change
MMM 3M Co	80.23	+2.04	+2.61%	13.6	551.8K	-7.33%
AA Alcoa Inc	11.90	+0.31	+2.67%	13.8	2.0M	-23.03%
AXP American Express Co	48.48	+0.39	+0.81%	12.7	403.8K	+12.70%
T AT&T Inc	29.04	-0.02	-0.07%	8.8	1.7M	-1.29%
BAC Bank of America Corp	7.76	+0.11	+1.44%	NM	22.3M	-42.09%
BA Boeing Co	62.95	+1.85	+3.03%	13.3	400.2K	-3.95%
CAT Caterpillar Inc	85.16	+1.91	+2.29%	14.1	649.0K	-9.17%
CVX Chevron Corp	96.88	+0.93	+0.97%	8.5	910.8K	+6.05%
CSCO Cisco Systems Inc	15.36	+0.28	+1.86%	13.1	5.8M	-24.42%
KO Coca Cola Co	68.50	+0.53	+0.78%	12.8	560.1K	+4.17%
DD E I Du Pont De Nemours And Co	46.10	+46.10	0.00%	12.8	815.4K	-7.72%
XOM Exxon Mobil Corp	72.75	+0.98	+1.37%	9.5	2.5M	-0.89%
GE General Electric Company	15.54	+0.09	+0.58%	12.1	3.6M	-15.04%
HPQ Hewlett Packard Co	24.87	-0.16	-0.64%	5.8	2.4M	-41.14%
HD Home Depot Inc	34.00	+0.16	+0.47%	15.2	1.9M	-3.02%

Data as of 3:54pm ET, 08/26/2011

Page of 2

It Should Be Obvious To Everyone By Now:

The system in this country is in big trouble again and the banking system is at high risk of seizing up like it did in 2008.  There is no question in my mind that Bank of America is on the verge of insolvency and I also believe that there is some truth to the rumor that JP Morgan may be circling around BAC.  A source of mine who provides consulting services to BAC told me this morning that internally BAC has slashed expense and procurement budgets to the bone.  It's obvious that the "non-core" businesses being auctioned off by BAC to raise cash are the businesses being sold because they are the businesses that have a bid in the market.  The majority of BAC's "core" assets are commercial and residential mortgages, "goodwill," and who knows what off-balance-sheet elephant diarrhea (variable interest entities - an Enron specialty, credit default swaps, other toxic waste).

I did a quick glance at BAC's financials and if I ever get the time I will dissect them to the best of my ability.  But essentially BAC has $2.2 trillion in assets.  It also reports $222 billion of book value.  Of this, $80 billion is "goodwill and intangibles."  Henry Blodget rightfully asserted that we can safely assume that $80 billion is worthless.  So partially "adjusted" book value is down to $140 billion.  Also please note that in response to Blodget's quickie liquidity analysis yesterday, the BAC spokesman avoided addressing Blodget's goodwill assumption and instead attacked Blodget's legal problems from the internet bubble era.  THAT confirms that Blodget's assumption is accurate.  And actually it's my assumption now that I'm looking  and I know it's accurate.

So, subtracting goodwill from the asset tally, we're left with $2.1 trillion, of which $139 billion is home equity loans.  Now, in all sincerity, it is likely that BAC's home equity loans are worthless.  But let's assume they could unload them for 50 cents.  That's another $69 billion of impairment, thereby reducing "book" value to $71 billion. Everyone follow me here?  And, I might add, I will bet my last silver eagle that the assumption that BAC's home equity paper is worth 50% of book is true welfare. This asset class in all probability is a big goose egg.

After accounting for home equity, the remaining asset base would be a shade under $2 trillion.  For sake of brevity and simplicity - and given that nearly 50% of the remaining asset base is commercial/residential mortgage paper, let's assume that BAC has over-estimated the book value of its assets by a mere 10%.  Again, if we could sift thru each loan - or even statistically sample the loan pools - I can assure you that using only 10% is giving BAC a free lunch for the next decade.  At any rate, that's another $200 billion of impairment, thereby taking BAC's "book" value to a negative $129 billion.  Conclusion:  BAC is technically insolvent.

Please understand that this analysis does not include any work on the off-balance-sheet garbage, which would only make the case against BAC's solvency worse.  If I can find the time, which will require digging up BAC's 10K plus using the latest 10Q and going thru all of the footnotes with a fine-tooth comb, I'm sure I can make the case that BAC's true net worth is at least double the negative $129 billion estimate.  And even then I can only make some very educated assumptions.  But I can guarantee that the off-balance-sheet mess makes the stated balance sheet look like a walk thru a candy factory at Christmas time.

I actually meant to talk about why the system is in trouble and I got off on this BAC tangent because, in fact, BAC is the poster-child for what is going on beneath surface in our system right now.  The system is even more embedded with fraud, corruption and grand-scale taxpayer theft right now than it was in 2008.  And the economy is in the toilet, per the latest round of economic numbers, most notably housing plus all the regional Fed bank reports.

What's going to happen here is that eventually the Fed is going to have to roll out a massive QE3 program in order to keep the banks from collapsing.  This will include some sort of plan for either the Treasury or JP Morgan to assume responsibility for BAC.  If it's structured like last time around in 2008, expect that JP Morgan will cherry-pick at 10 cents on the dollar any assets that it can make a fortune on based on paying 10 cents, just like it was set up to do with Bear Stearns and Wash Mutual, and the rest of the garbage will be off-loaded on the Taxpayer via the Treasury, Fannie Mae and Freddie Mac.  Back in 2002, one of my original colleagues and I speculated that eventually the Fed/Treasury would use JP Morgan and Fannie Mae/Freddie Mac as conduits to monetize the massive mortgage/housing/debt bubbles that Greenspan was blowing.  I'd say that call looks pretty good right about now.

Anyone pissed off yet?  Don't get pissed, there's nothing you can do about any of the above.  I expect the precious metals market to get very volatile over the next couple of weeks and maybe even into mid-September.  This volatility will work both ways.  What you can do is not get scared off by this and slowly buy the heart-stopping drops in the market and hold onto to what you have when it climbs higher.  Please do not sell what you have.   Dagen McDowell, who's never been accused of being intelligent, was on Fox Business earlier today cheerily proclaiming an end to the gold bubble.  Not only that, CNBC is now overlaying charts of gold on top of a chart of the NASDAQ from 1999-2001 and other miscellaneous bubble market comparisons and suggesting that the gold bubble has popped.  This is coming from a news organization who failed to see the internet bubble and the housing bubble.  And now all of a sudden they have the ability to see a gold bubble?  LOL.  Both of these anectdotes are great indicators that things have yet to get interesting to the upside in the precious metals.

P.S.  Do yourself a favor and check to see if any of the mutual funds you own have a big position in BAC and get rid of those funds.  The obvious ones are the funds run by that dip-shit Bruce Berkowitz at Fairholme Capital Management, who is one of the largest holders and recently (like 30% higher) added to his doomed position.

An Unsustainable System, A Warning of Collapse

Dees Illustration

Bob Chapman
International Forecaster

We do not believe that Americans, particularly elderly Americans, understand what the elitists are up to in regard to Social Security and Medicare. The Council on Foreign Relations and the Peterson Foundation has for years been working on plans to terminate Social Security and Medicare. Cuts in these paid for programs were impossible to get through Congress. Thus, the ruse was born of getting around Congress.

A flash issue was raised regarding a short-term debt extension that could have been passed in 15 minutes that demanded budget cuts for passage. In that process the Obama Enabling Act was formulated, patterned on the German Enabling Act passed in 1933 by Adolph Hitler. It allows a 12-person panel to bypass Congress regarding legislation. The changes are made in this committee and cannot be debated or amended and must be voted on via a straight up and down majority vote. While this was transpiring, as part of the plot, Standard and Poor’s downgraded the US debt rating based upon there not being large enough cuts in what Congress likes to call entitlements, which are not entitlements, but paid for benefits. The reason for the cuts is that both benefits trusts are broke, all the funds having been spent on other things over the years. S&P said that if major cuts are not made that they would cut the US debt rating again in November. Thus, you can understand the framework and what the elitists have paid the committee and Congress to do. The committee takes all the heat upon passage and Congress generally gets off the hook.

Needless to say, the controlled mainstream media reports on none of this. That a chained CPI is to be employed - is little discussed. The cost of living adjustment, or COLA, changes as CPI changes. The problem is the CPI, currently up 3.6%, is a bogus statistic. Real inflation based on the 1980 model is up 11.2%. As you probably remember there has been no COLA upward adjustments for two years and another is being considered this month for next year. It will be interesting to see what they come up with – probably no change. The COLA based on CPI isn’t bad enough now they want to chain-weight it. These changes won’t take place for a few months so there is time for Americans to complain to all of the members of the House and Senate regarding this rape of both benefits that they have paid for. If Congress wants to cut they can cut the military budget. What the powers behind government want to do is make the nations elderly; they call them useless eaters, carry the burden, and force them to live like animals.

This chained CPI will increase even less than the bogus CPI, or some 0.3% less on average than the CPI-W, or the Consumer Price Index for urban wageworkers, and clerical workers, which is what COLA really is. As you can see retired Americans have been cheated by government for years and now they want to cheat them even more leaving many of the elderly destitute in order to finance more wars. Looting Social Security provides revenue to be wasted elsewhere.

Politicians believe their constituents won’t know what they are up too, but they are mistaken. Many of them will be kicked out of Congress for betraying the elderly of benefits that they paid for over a lifetime of work. The cuts would cost retirees $100 billion and S&P wants even further cuts. This is going to put seniors into poverty, especially the disabled. The proposal would cut more at 9.5%, almost 10%, versus 4% at 75. These politicians are calculated to bring early death to the aging. As this travesty takes place, Medicare benefits would be reduced by another $100 billion. In 2014, we will have the Obama death panels, where a panel will decide who will be treated and who will be allowed to die. Soylent Green comes to mind, this travesty, planned by elitists to transfer funds and get rid of useless eaters, was fully aided by America’s controlled media, which misled all readers and listeners. The program was formulated the by ex-president of the Council on Foreign Relation’s billionaire Pete Peterson who lied about the entire program. The chained CPI is a scam just as the CPI is. All of you men and women in your 40s and 50s will have to make up the loss unless you want to see granny and grandpa starve to death. AARP, which is in part funded by the federal government, naturally came out in favor of cuts for its paying members. That proves once and for all what a useless organization AARP really is. They tried to play both sides of the issue. What this really amounts to is a tax increase on those who can least afford it. What really concerns the aged is that the new tax increase is already in place. The question is will the unconstitutional illegal, “Obama Enabling Group,” increase the burden on the aged even more?

It should be noted that the elite members of the “Obama Enabling Group” are all part of the Council on Foreign Relations, Trilateral Commission and Bilderberg Groups. They will do as the illuminists tell them to do. Their control companies won’t share in the tax increases because they are immune and exempt. We have yet to see anyone file a lawsuit challenging the unconstitutional law that created this group of enablers. As we pointed out before this group has been bought and paid for via $64.5 million in campaign payoffs. The biggest contributors were legal firms for more than $31 million and Wall Street threw in more than $11 million. These are the people who in part, control our government - JPMorgan Chase, Goldman Sachs, Citigroup and Bank of America. Your commentaries and votes mean very little to these people.

AD

This is August and Europe is on vacation as the European Union and the euro zone fall apart. Mrs. Merkel and Mr. Sarkozy had a meeting that accomplished nothing. It was supposed to be a cover for all of Europe’s bureaucrats who were enjoying themselves while their union burned.

The European Central Bank, the ECB, continues to finance the insolvent euro zone participants by purchasing their bonds. The most recent recipients have been Italy and Spain. The total is now approaching some $900 billion. The bonds are virtually worthless and other members have to pay for these interventions. In addition another $500 billion has been lent to these problem countries. The EFSF, the European Financial Stability Fund, the method for loans is supposed to terminate in 15 months, so the permanent solution is supposed to be the ESM, the European Stability Mechanism, which can lend $700 billion. All these loan packages are guaranteed by euro zone members and the citizens of the remaining 11 countries. This commitment guarantees a AAA rating, which we see as dubious at best. All these commitments have forced the lenders in the case of Greece to now demand collateral on just about everything the Greek government owns. We have said from the beginning Greece should just default but that is not what the bankers and other solvent nations want. They want to own the country and enslave its inhabitants. At the same time many of the lenders are only in slightly better shape then the sovereigns they are lending too. That means the stronger members are under increased pressure, as their credit ratings and finances are pushed to the limit. In addition a number of nations not within the euro zone, such as England and Norway have no intention of getting involved in the ESM. There is absolutely no question that the euro zone cannot survive under these circumstances.

We still believe the euro zone doesn’t fully understand their problem. It was 1-1/2 years ago we predicted that the bill would total $4 trillion. A few months ago we raised that to $4 to $6 trillion, as Germany raided their estimate from $1 to $3.5 trillion and the EU support mechanism raided their estimate to $2.8 trillion. The bottom line is none of the estimates are payable, but the desire for world government is so great that the Illuminists are wiling to destroy the system to accomplish that. Finance ministers call for greater commitments, but where will the funds come from? Sooner or later these one-worlders are going to discover that if they keep pushing, the system it will crash and burn.

In addition to the sovereign problems European banks are exposed for $700 billion in just the debt of Greece, Ireland and Portugal. If Spain, Italy and Belgium are included the exposure grows to $2.8 trillion and that is just the bank exposure. Thus sovereign and bank exposure is $7 to $8 trillion. These kinds of numbers make you realize that all of Europe is broke and all the banks are going to go bankrupt as well as the countries, including Germany. We often wonder whether the European condition wasn’t a Anglo-American trap. We will see in time. Perhaps the one interest rate fits all was the trap, as we believed it was from the beginning. This one interest rate supposedly eliminated risk, when in fact as you can see it heightened risk. The euro could not eliminate that risk, because the six nations over lent and over expanded. No one cared about debt repayment because supposedly the euro protected everyone from that, and as we have found out the euro and sovereign commitment was not adequate protection. Quite frankly Germany was with its AAA rating, and financial success was supposed to carry everyone. It has now been proven they cannot and the German people are shouting we have had enough of this. It has to be stopped now. We will take our losses, dump the euro and return to our beloved Deutsche Mark.

If debt is restructured at today’s recognized level for the problem countries, even a 50% default would wipe all 17 countries except Germany. 1-1/2 years ago Greece made a 50% default offer to Germany, which rejected it. If they had accepted it these nations could have been dealt with over a long period of time avoiding a euro collapse, but they were not smart enough to envision such a solution, because they really didn’t grasp the enormity of the problem and where it would take them. They understand now but it is too late. If you think the foregoing is overwhelming all those structured securities called CDS and MBS, bonds containing mortgages. They were holding $2 trillion worth and they are probably still holding them. They are carried at par and are worth at best $0.30 on the dollar. Banks do not have sufficient capital to cover these losses and we do not believe the public in Europe will cover these bank losses. Even the IMF says the banks have not recognized these losses. Bank stress tests are a joke, pabulum for the masses. Italy has 30 problem banks, but they lent conservatively, have high levels of deposits and very small leverage. If they are in trouble you can imagine what the banks in the other countries look like. How can governments recapitalize banks when the governments are broke? In the case of Greece a 50% write off would cost the ECB, the 17-euro zone country citizens, $70 billion, plus what banks and others are holding. The sovereigns are buried just as the banks are. The ECB has paid in capital of $7.4 billion. Euro zone central banks have $1.4 trillion in capital. How can anyone believe they can fund losses of $7 trillion? Talk about contagion. The word should be catastrophe.

As we have often said, the problem and debt has only been extended. All the debt is unpayable. Interest rates and bond yields of troubled nations are such that debt cannot be repaid. How can anyone have confidence in a broken system? Unsustainable is the operative word. There is no political courage to end all this because all of the key figures and many others are controlled by the Illuminists, who want world government. They will hold out until the system has collapsed, and hope they can save themselves. That is why people worldwide have to prepare for what is coming. Europe’s financial collapse will be the catalyst that will cause all other nations to fall. That is why it is so very important that all of your investable assets be invested in gold and silver, coins, bullion and shares.

Markets on edge for key Bernanke speech

The last time Ben Bernanke communicated to the public,
the US stock market jumped, then plunged, and then soared
© AFP/File Mandel Ngan

AFP

WASHINGTON (AFP) - The last time Ben Bernanke communicated to the public, the US stock market jumped, then plunged, and then soared, all over a few minutes -- no one was sure if his statement boded good or bad for the economy.

So when the US Federal Reserve chairman speaks at Jackson Hole, Wyoming, on Friday, after weeks of extreme market turbulence, hopes are that he will deliver some clarity both on the economy's state and whether the Fed will give it a new boost.

With growth in a near-stall, and vulnerable to turbulence imported from troubled Europe, investors want a clear signal that the US central bank chief is ready to act to prevent a return to recession.

"The best thing he can do on Friday is to project a sense of confidence: 'Yes we know what is needed, yes we will do it if it is necessary,'" said Nariman Behravesh, chief economist at IHS Global Insight.

The landscape for Friday's speech, at the annual Federal Reserve summit at the western mountain resort, is eerily like last year's: the economy seemed to be stagnating, markets were losing faith in the recovery, and the government seemed unequipped to counter it.

At Jackson Hole on August 27, 2010, Bernanke boldly signaled the Fed's $600 billion QE2 program -- QE for "quantitative easing" -- in which the central bank injected liquidity into the economy by buying up US Treasury bonds.

That sparked optimism for the economy and a nine-month stockmarket bull run that only expired in June when a new fog of economic malaise moved in.

Markets have now dropped back to where they stood last October; fears are rising of a new recession; and budget politics have left the government even more unable to act to stimulate the economy.

But, two months after QE2 ended, analysts see Bernanke as having less potent tools for the job, and unlikely to do more than suggest what the Fed can do.

"The dilemma that that the Fed faces is that there are not a lot of choices here," Behravesh told AFP.

"Fiscal policy is not really in the mix... I don't think the Fed likes it, and the Fed would rather not be in this situation, but it is."

The speech has traders in disparate markets on the edge of their seats.

"We are seeing a lot of trepidation ahead of the Federal Reserve speech on Friday," said oil trade expert Matt Smith of Summit Energy.

"The market does not want to do anything strategically until we see what he has to say on Friday morning," Ray Attrill, a BNP Paribas currencies specialist, said.

The last time Bernanke "spoke" to the public was in a statement after the August 9 meeting of the Fed's policy board.

Warning of rising "downside risks" to the economy, the Fed promised ultra-low interest rates for two more years.

But otherwise, it only said that they were weighing what tools they had to deal with slower-than-expected growth.

Because that came after a bruising political battle that left the White House and Congress with almost no room to help the economy, and as sovereign debt worries mounted in Europe, the Fed statement had little real positive impact.

It "signaled to investors that the Fed's outlook was sufficiently glum to make it hold its policy rate at zero for that long, reinforcing their sense of angst," said Vincent Reinhart, an American Enterprise Institute scholar and a former Fed official.

Since then, too, a number of economists have revised downward their economic forecasts, to growth of less than two percent for the second half after what could have been below one percent in the first half.

Few think Bernanke will signal a formal QE3 on Friday, but many think he will make clear the Fed will inject money as in QE2 if it sees the need.

Moreover, said Behravesh, he could signal that the Fed will move to drive down long term interest rates, in the same way that short-term rates have fallen to near-zero.

That could stimulate everything from corporate investment to consumer buying of homes and automobiles, he said.

"The Fed could potentially tip the balance in terms of people being more willing to make those bets, those big investments," he said.

© AFP -- Published at Activist Post with license

CME: Comex Gold Futures Margin Requirements Raised 27%

Margin rates path towards all cash remains unperturbed.

Headline: CME: Comex Gold Futures Margin Requirements Raised 27%

Exchange operator CME Group Inc. (CME) raised collateral requirements for trading gold futures for the second time this month Wednesday as gold prices climb to fresh records.

CME said gold margins will be raised 27% effective close of trading Thursday, in an email announcement after trading closed Wednesday.

Speculative investors in the benchmark 100-troy-ounce gold contract now must put up $9,450 to open a position and maintain $7,000 of that to keep the position overnight.

The increase comes as gold prices plunged over $100 and traded below $1,800 for the first time in three days.

Gold for December delivery, the most actively traded contract, settled down $104.00, or 5.6%, at $1,757.30 a troy ounce on the Comex division of the New York Mercantile Exchange.

CME last raised margins on Aug. 11, spooking gold investors with a 22% hike. That day, gold prices slipped 1.8% as investors pared gold positions. But gold quickly shook off those losses, soaring a total 17.6% to an intraday record of $1,917.90 this month.

Source: wsj.com

PHOTOS FROM ECONOMIC RIOTS IN CHILE

http://www.emol.com/MundoGrafico/index.asp?G_ID=19411

Incidentes en Santiago durante la primera noche de Paro Nacional

Caceroleos, saqueos, disparos y barricadas se han producido en diversos puntos de la capital.