Friday, December 21, 2012

Leading economic indicator hints at slower growth


(Reuters) - A gauge of future U.S. economic activity fell slightly in November, suggesting a slowdown in growth in the near term.
The Conference Board said on Thursday its Leading Economic Index slipped 0.2 percent to 95.8 last month, after increasing 0.3 percent in October.
Economists polled by Reuters had expected the index to fall 0.2 percent after two straight months of gains.
"The indicators reflect an economy that remains weak in the face of strong domestic and international headwinds as it faces the fiscal cliff," said Ken Goldstein, an economist at the Conference Board.
"Growth will likely be slow through the early months of 2013," he added.
The fiscal cliff refers to automatic government spending cuts and higher taxes that could suck about $600 billion from the economy early next year unless the U.S. Congress and the Obama administration can agree on a less drastic plan to cut the budget deficits.
Business confidence has taken a dive in recent months on fears of tighter fiscal policy.
(Reporting by Lucia Mutikani; Editing by James Dalgleish)

Former U.S. Olympian admits to working as a Vegas call girl

One of the most decorated female distance runners in U.S. track history admitted that she had been working as a $600 an hour escort for a service based in Las Vegas.
According to The Smoking Gun, who had been working on the expose for several months,Suzy Favor Hamilton admitted to one of their reporters that she was the woman being profiled as "Kelly" on a site called Haley Heston's Private Collection. The service deleted Favor Hamilton's photos earlier this month at her request.
Via The Smoking Gun:
"I take full responsibility for my mistakes. I'm not the victim and I'm not going that route," Favor Hamilton said. "I'm owning up to what I did. I would not blame anybody except myself." She added, "Everybody in this world makes mistakes. I made a huge mistake. Huge."
Several hours after the story broke, the 44-year-old married mother issued a direct apology on her Twitter account.
Via @favorhamilton:
"I realize I have made highly irrational choices and I take full responsibility for them. I am not a victim here and knew what I was doing. I was drawn to escorting in large part because it provided many coping mechanisms for me when I was going through a very challenging time with my marriage and my life. It provided an escape from a life that I was struggling in. It was a double life. I do not expect people to understand, but the reasons for doing this made sense to me at the time and were very much related to depression. As crazy as I know it seems, I never thought I would be exposed, therefore never hurting anybody. I have been seeking the help of a psychologist for the past few weeks and will continue to do so after I have put things together. I cannot emphasize enough how sorry I am to anyone I have hurt as a result of my actions and greatly appreciate the support from family and those closest to me. I fully intend to make amends and get back to being a good mother, wife, daughter, and friend."
  • Suzy Favor Hamilton is all smiles while running a victory lap after the women's 1,500 meters at the U.S. Olympic Track and Field Trails in 2000.
  • Suzy Favor Hamilton reacts after winning the women's 1,500-meter run with a time of 4:13.96 at the 1999 USA Track and Field Championships in Atlanta.
  • Suzy Favor Hamilton of the U.S. wins the women's 1500-meter run at the Prefontaine Classic in May of 2001 in Eugene, Ore.
  • Suzy Favor Hamilton is shown competing for the U.S. in the women's 1,500-meter final in the 2000 Olympic Games. Hamilton finished 12th with a time of 4:23.05.
  • Marla Runyan assists Suzy Favor Hamilton after she collapsed at the conclusion of the women's 1500-meter final of the 2000 Olympics.
  • Suzy Favor Hamilton of the U.S. takes a fall in the final 100 meters of  the women's 1500-meter final at the 2000 Olympic Games. Hamilton finished 12th with a time of 4:23.05.
  • Suzy Favor Hamilton is shown during a Nike commercial appearing during the Olympics.
  • Suzy Favor Hamilton is shown here in 2001 winning her heat in time of 4:23.51 in the women's 1500-meter prelim at the U.S. Track and Field Championships at the University of Oregon.
  • Suzy Favor Hamilton competes in the women's 1500-meter prelims at the USA Outdoor Track and Field Championships in 2003 at Cobb Track and Angell Field at Stanford University in Palo Alto, California.
  • Suzy Favor Hamilton competes in the preliminaries of the women's 1500-meters at the U.S. Olympic Track and Field Team Trials in 2004.
  • Suzy Favor Hamilton, second from right, dances on the stage at the finish line after competing in the Rock 'n' Roll Half Marathon in November of 2012 in Savannah, Ga.
Favor Hamilton competed in the women's 1500m in the 1992, 1996 and 2000 Olympic Games. A nine-time NCAA champion at Wisconsin, the Big 10 awards its "Suzy Favor Award' annually to the conference's female athlete of the year.
It was in the women's 1500 meter final at the 2000 Games in Sydney where Favor Hamilton drew attention for falling to the track (she later admitted it was intentional) after it became apparent she wasn't going to win a medal.
The Madison, Wisc. resident discussed that race and other obstacles in her life in a July feature with the Milwaukee Journal-Sentinel.
Via the Journal-Sentinel:
"Your whole life, you're told how great you are, from your coaches to your friends to your parents' friends," she told the paper. "I had to be the perfect child, in my mind. It wasn't anybody's fault. I never blame anybody. It's just the way society is. So you feel you have to be perfect. Or, at least, I did."
Favor Hamilton told the Smoking Gun that her husband Mark was aware of her escort work.
"He tried, he tried to get me to stop," she said. "He wasn't supportive of this at all."
VIDEO: Favor Hamilton running through the woods in a 2000 Nike ad

Third World America - Chris Hedges

It's Official: Taxpayers Will Lose Big on the GM Bailout

When the Treasury Department sold its last remaining shares in insurance giant AIG recently, it announced that it had earned a profit on the controversial bailout that began in 2008. That will not be the case for General Motors.
Treasury has finalized a plan to sell its remaining stake in the nation's biggest automaker over the next 15 months, beginning with GM buying back 200 million shares from the Treasury by the end of this year. That will leave the government holding about 19 percent of GM's shares, which it plans to sell throughout 2013 and perhaps into 2014.
The government's final exit from GM will mark the start of a new era for the carmaker, which has struggled to overcome its "Government Motors" image and chafed under rules that limit executive pay and perks. During this year's presidential campaign, Republican candidate Mitt Romney said he'd sell all the government's shares in GM as quickly as possible -- even at a steep loss -- to get the feds out of the private sector.
President Barack Obama was more circumspect, though he now seems to be following Romney's advice. CEO Dan Akerson, meanwhile, has complained that GM's status as a "political punching bag" hurts sales.
But once the government sells its shares, GM will still be tainted by the fact that it failed to pay back all the taxpayer money used to save it back in 2009. GM initially got $49.5 billion from the U.S. government, and it paid back $23.1 billion of that after its stock went public in 2010. That left $26.4 billion GM still owed the government.
GM's shares have been trading around $25. The buyback will occur at a share price of $27.50, or a total of $5.5 billion for 200 million shares. But for taxpayers to get their money back, the government would have to sell at an average price of about $52. So by simple math, the total break-even price for those first 200 million shares would be about $10.4 billion. The $5.5 billion sale price amounts to roughly a $5 billion loss for taxpayers.
[RELATED: A Defense of the Chevy Volt]
The exit itself could help boost GM's stock price, since some investors have been reluctant to buy shares in a company that's potentially subject to political manipulation. Treasury's move "provides a significant amount of clarity on one of the major overhangs on the share price," says Credit Suisse analyst Chris Ceraso, "particularly with the government articulating that it intends to fully exit over the next 12 to 15 months." And sure enough, GM shares rose on the news from Treasury.
GM has a few things going for it. Since the 2009 bailout and subsequent bankruptcy proceeding, GM has become a profitable, healthy company with about $38 billion in cash on hand. A new deal with the United Auto Workers allows GM to hire new workers at considerably lower wages than older ones earn, which ought to reduce labor costs over time. GM's product lineup is vastly improved and a new batch of pickups and SUVs -- its biggest moneymakers -- comes out in 2013. Plus, GM's operation in China is a roaring success.
But GM still has some deep problems, too, and it's hard to see its stock price getting close to the $52 breakeven price any time soon. GM's biggest albatross is its money-losing European operation, which is plagued with high costs, inflexible labor unions, and a recessionary European economy. GM says it plans to stop the losses there within three or four years, but it has whiffed on such promises before. GM is also behind Ford in terms of streamlining its global supply chain. And competition remains brutal in GM's home market, thanks to ever-rising quality and upstarts such as Hyundai and Kia.
[NEWMAN: 3 Lessons From the AIG Bailout]
GM's stock price is likely to drift upward in 2013, with analysts forecasting a share price of $33 on average within 12 months, according to S&P Capital IQ. If the Treasury were able to sell its remaining shares at that price, it would represent another $6 billion or so loss for taxpayers. So unless there's an unexpected surge in GM stock, the net cost of the GM bailout to taxpayers will be around $10 billion to $12 billion.
Supporters of the company point out that the GM bailout saved much more than one automaker. Because GM is so large, keeping it alive also kept hundreds of suppliers in business. The Center for Automotive Research in Ann Arbor, Mich., says the auto bailouts (which also included lifelines for Chrysler and others) saved 1.4 million jobs, which is more than 15 times the number of Americans who work for GM.
Still, GM will go down as one of the costliest bailouts in U.S. history. Most of the banks that got bailout money following the 2008 financial crisis have paid it back, and of those that haven't, none required the amount of money GM got. The only companies who owe taxpayers more at this point are the wrecked housing agencies Fannie Mae and Freddie Mac. GM can only hope taxpayers don't remember that.
Rick Newman is the author of Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.

Research Says: Studying Economics Turns You Into a Liar

Ever hear the joke about the lying economist?
No? Well, neither have I. But we might need to come up with one.
Such is the takeaway from a working paper released in January, which I stumbled on while browsing Professor Andres Marroquin's top papers of 2012. Written by a pair of researchers from universities in Montreal and Madrid, it examined whether the study of economics made students more apt to lie for financial gain. The answer: a resounding yes.
Several past experiments have tried to test how people's personal beliefs and background influence their willingness to lie, and one, published in 2009, had yielded results suggesting that economics students were more likely to fib than those in other disciplines. Raul Lopez-Perez and Eli Spiegelman -- both economists themselves -- wanted to find out if those findings would hold up in another lab setting ... and if they did, exactly why that might be the case. Were econ students over-internalizing the lessons of the dismal science, which teaches that human being are supposed to act in their rational self interest? Or were dishonest young folks just more likely to sign up for econ classes in the first place?
To find out, Lopez-Perez and Spiegelman designed an experiment that gave its subjects every conceivable incentive to lie, and none to tell the truth -- unless, of course, they simply felt that was the moral thing to do. The test involved two participants, one we'll just call the "decision maker" and one we'll call "the other guy." Each decision maker sat in front of a computer screen that would flash either a blue or a green circle. They then had to send a message to the other guy informing them what color had appeared. If the decision maker reported that the circle was blue, he or she received 14 euros. If they reported that it was green, they received 15 euros. In other words, whenever a blue circle popped up, they were forced to choose between being honest or making an extra euro by claiming it was green. The researchers, however, did the best to make that choice simple. No matter what the decision maker reported, the other guy always received 10 euros, and never got to learn what color actually showed up on screen. All of these rules were clearly laid out for both people in the experiment.
So, let's do a quick review. By the rules of this game, it was always more profitable to report a green circle. There was no way for the decision to be generous and help the other guy get a better payday, so altruism shouldn't have been a factor. There was no way for the decision maker to get caught lying. And because the rules were transparent, the decision maker didn't even have to worry about whether the other guy might know they were lying.
Any purely rational, self-interested person would lie for the money. But people who had an emotional aversion to dishonesty might not.
The researchers ultimately ran their test on 258 students from various majors, including business, economics, the humanities, sciences, law, among others. And there was a clear gap: even though a large portion of students lied from every field, economics and business students lied a much more often than everybody else. As shown in the table below, just 22.8 percent of them honestly reported the colors of the flashing circles, even when it cost them that extra euro. More than half of humanities students, on the other hand, were honest. Same went for law students, who appeared to play against type. (The percentages are the top number the G,B row. The sample includes 257 students, because one apparently didn't share their major information).
Economics_Business_Majors_Lying.PNG
But did studying economics make students more rationally dishonest, or were rationally dishonest students just more likely to study econ? To try and get the answer, Lopez-Perez and Spiegelman whipped out a statistical technique known as an "instrumental variable" analysis that economists frequently use to prove causation. Once the math was done, they concluded simply: "Economists lie more in our study in part because they have learned to do so."
So there you have it: Given a harmless chance to make a quick euro by telling a white lie, budding economists and corporate executives were much more likely to do it than their peers. Classics and biology lovers, on the other hand, seemed more likely to tell the truth for its own sake.
To be sure, this is just one working paper, and it focuses on just a small sliver of the students who study economics in this world. It also doesn't really seem to imply that those people are less likely to bother with the complicated moral calculus required to balance truthfulness and self-interest in real life -- only that they seem to place less inherent weight on the value of honesty.
Still, next time a company whips out a too-good-to-be-true economic forecast from a paid consultant, remember, you've been warned.

How A New CEO Turned Around Ford

No bailout and a record $20 billion in profits last year.
---
How Outsider Alan Mulally Rescued Ford
Some people underestimate Alan Mulally when they first meet him. Ford Motor Co.'s 66-year-old chief executive, who grew up in Kansas and once aspired to be an astronaut, looks and sometimes acts like an overgrown Boy Scout. He laces his speech with words such as "neat," "cool" and "absolutely."
But the farm-boy exterior conceals one of business' toughest, most ruthless managers. When a desperate Bill Ford recruited Mulally from Boeing in 2006, Ford was heading for a $12.7-billion loss and on the verge of losing its No. 2 sales spot in the U.S. to Toyota because of poor management and an uninspiring vehicle lineup.
Four years later, Ford reported a $6.6-billion profit — the biggest in the sector that year — and Toyota was comparing its cars with Fords, not Hondas, in its ads.
In his new book "American Icon: Alan Mulally and the Fight to Save Ford Motor Company," author Bryce G. Hoffman, a veteran reporter with the Detroit News, details "one of the greatest turnarounds in business history" and, to a lesser extent, the man behind it.
Published by Crown Business, the book makes for a fascinating read for anyone who follows the car industry; others may find the story engaging too, if hard work in places.
Ford was in deep trouble in 2006, with a poisonous culture in which executives fought turf wars and sat through endless meetings but made the real decisions elsewhere.
When Mulally arrived, many of its senior managers in Dearborn, Mich., did not deign to drive Fords or even cars made by its rivals, preferring the Jaguars and Land Rovers made by its loss-making British luxury brands. The new boss made them drive Volkswagens and Hondas.
Importing a practice from Boeing, he introduced weekly meetings that were mandatory for all senior managers. Executives were barred from using BlackBerrys or belittling one another; they were required to grade their own progress on targets truthfully and to confront problems head-on.
Initially, Mulally faced resistance in a company — indeed, an industry — that has always viewed outsiders with suspicion.
But he made a series of canny decisions and astute appointments that protected Ford as the U.S. car industry headed into a crisis in 2008 that nearly sank the century-old company and its two Detroit competitors, General Motors and Chrysler.
Mulally protected product spending even as Ford cut thousands of staff and economized on everything else, down to paper clips and plant watering.
He made tough decisions only a cold-eyed non-car enthusiast would, such as selling Ford's European premium brands and its stake in Mazda so it could focus on its core "blue oval" mass-market cars.
Some of the masterstrokes attributed to Mulally were already underway when he joined. His predecessors had begun steps to borrow $23.6 billion in 2006, just before credit markets closed.
But Mulally sealed that deal — brilliant in hindsight because it enabled Ford to refuse a federal bailout and a trip through bankruptcy that would have seen its shareholding family's members diluted out of their birthright.
Avoiding Chapter 11 bankruptcy also gave Ford's cars an edge over GM and Chrysler with U.S. consumers, while better vehicles developed on Mulally's watch began rolling into dealerships.
Some of the stories in the book have been told before, but the author delivers much new, excellent reporting collected in interviews with all the main people concerned.
Mulally is a constantly chipper, boosterish presence, whether bucking up dispirited colleagues, preparing for a presentation in Congress or hugging a dumbfounded customer at a dealership in Shanghai.
"Mulally ripped off the bandage, cauterized the wound and cured the disease," the author concludes, with his typical gusto. "Only an outsider could do that."
---
Merry Christmas.  662 hp.
2013 Shelby GT500 - Launch Control
Ford's Performance Vehicle Chief Engineer Jamal Hameedi talks about the company's new wave of high-performance vehicles.

Vitter To Bernanke: Are U.S. Banks Guilty Of Manipulation?

Excellent short clip from B-52's Libor testimony this Summer.  Vitter hits the Chairsatan with a left jab at the end of the round that leaves the Zimbabwe-trained Bernanke a bit wobbly.
Bernanke and everyone else knew LIBOR was rigged and did nothing.  It had always been that way (make-believe) to a small degree, amplified greatly during the crisis, but left alone by central-banking and other printing puppetmasters as it benefited 'financial stability' at the time to show low LIBOR rates.  And there was another reason they did nothing - they had bigger carcasses (bailouts!) on their plate - the AIG rescue, Lehman's fallout, Fannie & Freddie taxpayer fellatio, Morgan Stanley just 1-day-from bankruptcy, Goldman teetering on the brink, etc.
Remember that 'benefiting financial stability' is the reason that Cuomo ended several active Wall Street prosecutions in 2009 at the request of friend Tim Geithner, who visited the NY AG secretly to make the case.  And since Chris Whalen just explained that Bob Rubin was actually running the entire bailout program at the New York Fed in 2008, we can perhaps assume that Rubin issued the 'no prosecution' directive to Geithner, though it is much more likely that no directive was needed between the like-minded bailout henchmen.
In Ron Suskind's book, Confidence Men, he quotes Geithner as telling Obama:
"The confidence in the system is so fragile still... a disclosure of a fraud... could result in a run, just like Lehman."

McDonalds' War on Christmas - No Overtime for Workers



http://www.liveleak.com/view?i=2e8_1356009882

Libor Manipulation Cost Fannie Mae, Freddie Mac $3 Billion, Watchdog Says

Libor manipulation cost Fannie Mae and Freddie Mac more than $3 billion, according to an estimate by a government watchdog, who recommends the government-owned mortgage giants sue the big banks.
That estimate and legal advice were made in a private report by Steve Linick, the inspector general for the Federal Housing Finance Agency, the regulator for Fannie and Freddie, which were taken over by the U.S. government during the financial crisis. The Wall Street Journal first reported the watchdog's analysis on Wednesday.
The report, a copy of which was obtained by the Huffington Post, was in a memorandum prepared by the FHFA watchdog's staff and delivered to FHFA Acting Director Edward DeMarco on Nov. 2. The FHFA did not immediately respond to a request for comment. According to the WSJ, the FHFA has told Linick in a recent letter that it was "exploring potential legal options."
“We conducted a preliminary analysis of potential Libor-related losses at Fannie and Freddie and shared that with FHFA, recommending that they conduct a thorough review of the issue," Kristine Belisle, a spokeswoman for the FHFA inspector general, said in an email. "FHFA agreed to study the matter further.”
More than a dozen banks in the U.S. and Europe are under investigation for allegedly manipulating a key short-term interest rate known as Libor, which influences borrowing costs throughout the global economy. Swiss bank UBS on Wednesday agreed to pay $1.5 billion to settle charges that its traders manipulated Libor over several years. The bank's Japanese unit pleaded guilty to a crime -- a rarity for a bank -- and two of its former traders have also been hit with federal criminal charges. Earlier this year U.K. bank Barclays Capital agreed to pay about $450 million to settle Libor charges.
One of the early defenses raised in the Libor scandal was that interest rates were often manipulated lower during the crisis, a boon to borrowers. What was the harm in that, the defenders asked? But Barclays and UBS traders -- and likely traders at many other banks -- also manipulated interest rates higher, to help bolster profits in derivatives trades.
Higher Libor rates might have hit Fannie and Freddie with higher borrowing costs, but the inspector general's analysis only covers the period during and after the financial crisis, in which banks were mainly manipulating Libor lower to hide their own troubled finances.


According to the inspector general's report, Fannie and Freddie may have been cheated out of interest-rate payments on floating-rate bonds and interest-rate swaps by the lower Libor rates. Lower Libor rates during that period may have helped Fannie and Freddie in other ways, offsetting some of those losses, according to the report. But that was apparently not enough to help Fannie and Freddie avoid losses.
Libor-setting banks have already been sued by their trading partners and customers alleging billions of dollars in losses. And Wall Street analysts have tried to estimate just how big the legal liability could be for the banks. But Linick's analysis marks the first semi-official estimate of actual damages caused by the Libor scandal.
Of course, $3 billion is not a great deal of money, in the grand scheme of things. JPMorgan Chase's "London Whale" trading debacle cost it twice that much.
But it's not nothing. It will be interesting to see if the U.S. government, which has avowed a fear of prosecuting banks and bankers, but has been more willing to extract large fines, will try to get that $3 billion back for the taxpayers who own Fannie and Freddie.

This post has been updated with additional details throughout.
Also on HuffPost:
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What does Peace in Europe mean to EU? Farage-Nobel Prize Remix

War or prosperity? UK announces higher price tag for Afghan war while cutting vital social services

British soldiers of the 1st Batallion of the Royal Welsh before a patrol in the streets of Showal in Nad-e-Ali district, Southern Afghanistan, in Helmand Province (AFP Photo / Thomax Coex)
British soldiers of the 1st Batallion of the Royal Welsh before a patrol in the streets of Showal in Nad-e-Ali district, Southern Afghanistan, in Helmand Province (AFP Photo / Thomax Coex)
The UK has revealed that the cost of its involvement in the war in Afghanistan has reached $27.6 billion, and may end up being as much as $32.5 billion. Meanwhile, the UK continues to slash domestic social services to reduce its budget deficit.
UK Prime Minister David Cameron said that Britain has no plans to abandon Afghanistan: “We will be contributing £70m [US$113 million] a year to help pay for the Afghan National Security Forces.”
The UK recently announced an accelerated plan to withdraw 3,800 of its 9,000 troops from Afghanistan in 2013. However, like the US, the UK will maintain an undisclosed number of soldiers in Afghanistan to help local forces with security after NATO’s mission ends in 2014.
"Because of the success of our forces and the Afghan National Security Forces… we'll be able to see troops come home in two relatively even steps – 2013 and 2014," Prime Minister Cameron told Parliament.
At least 438 British troops died during the UK’s 11-year involvement in the widely unpopular and expensive war. UK opinion polls suggest that a majority of British voters think the war is “unwinnable,” and would like to see the soldiers come home ahead of schedule.
And while the UK continues to spend money in Afghanistan, even past the 2014 mark, vital domestic services are being cut. Public spending in 2011 and 2012 dropped by 1.58 per cent ($17.5 billion), the Guardian reported.
The country’s healthcare budget was reduced by 1.2 percent including inflation, about $2 billion, and the education budget was cut by 5.7 percent including inflation, about $5.4 billion.
Cameron has warned that Britain must continue with deep cuts to public spending to reduce the UK’s budget deficit.
In 2012, local patient care was put at risk when GPs were asked to cut services including childhood immunization campaigns, out-of-hours care and minor surgery.
The funding of arts organizations and museums in England will also be cut by $18.8 million starting in 2013. And more than 200 UK libraries were closed this year alone.
The cuts to education have mostly affected children from poor families – one of the repercussions was the closure of primary schools’ breakfast clubs, which were run by charities that provided free breakfasts.

Belarus to Get $600 Mln in Loans from China

MINSK, December 20 (RIA Novosti) - The Export-Import Bank of China (Eximbank) will grant Belarus over $600 million in preferential loans towards the implementation of national infrastructural projects, the Belarusian government said on Thursday.
Eximbank will provide Belarus $280.9 million to build a national satellite communications and broadcasting system, and $322 million for the reconstruction of the Minsk-Gomel highway.
The agreements between the Belarusian government and Eximbank in Beijing on December 19.
The loans for the two investment projects will be provided for a 15-year term.

Belarus to Get $600 Mln Loans from China
Belarus to Get $600 Mln Loans from China

New Canadian boss of Bank of England will get £250,000 UK accommodation allowance... on top of his £480,000 salary

  • Mr Carney, 47, will replace Sir Mervyn King as the Governor in July
  • His total annual package will be £874,000 - 33 times the national average
  • Mr Carney is already earning £175,000 a year more than his predecessor
  • He is the first foreign appointment to the role and will relocate from Canada

The new governor of the Bank of England will be given a housing allowance of £250,000 a year, pushing his total annual earnings towards £1million.
Canadian Mark Carney, who takes over from Sir Mervyn King on July 1, will get the extra cash on top of pay and perks worth £624,000.
It takes his total annual package before tax to £874,000 – six times more than the £142,500 Prime Minister David Cameron is paid and 33 times the national average of £26,000 a year.
Extra income: Canadian Mark Carney will receive £250,000 on top of his £480,000 salary for accommodation when he becomes Governor of the Bank of England
Extra income: Canadian Mark Carney will receive £250,000 on top of his £480,000 salary for accommodation when he becomes Governor of the Bank of England

The one-off cost of moving Mr Carney and his family to Britain has yet to be finalised and will also be covered by the taxpayer.
The housing allowance – agreed in secret before Mr Carney was appointed last month but only made public yesterday – will contribute towards a five-bedroom home for his wife and four young daughters in central London.

The deal was a crucial part of the effort to tempt the 47-year-old to leave his job as governor of the Bank of Canada and move his family to Britain.
Mr Carney, hailed as ‘the outstanding central banker of his generation’ by George Osborne, currently lives in a spacious family home near the Bank of Canada headquarters in Ottawa.
But the housing deal – worth £1.25million over his five years as governor and enough to cover rent of £2,500 a week after tax – will alarm MPs when many households are struggling to make ends meet. The Canadian – the first foreigner to run the Bank of England since it was set up in 1694 – insisted on serving for just five years instead of eight and will earn far more than Sir Mervyn’s £305,000 a year.
Sir Mervyn King, who will stand down as Governor in June next year, said Mr Carney represents 'a new generation of leadership'
Outgoing: Sir Mervyn King, who will stand down as Governor in June next year, is on a considerably lower salary than Mr Carney


It is also thought that Mr  Carney has political ambitions and even thought about running for Prime Minister in his homeland before accepting the Bank of England job.
The Canadian now faces a showdown with MPs on the Treasury Select Committee in February in what will be his first public outing in Britain since his appointment.
‘Colleagues will want to ask about every aspect of his appointment including, no doubt, remuneration,’ said Andrew Tyrie, chairman of the powerful committee of MPs.
Adam Posen, a former member of the monetary policy committee at the Bank of England, has warned that Mr Carney’s generous pay and perks means he could be seen as a ‘globe- trotting corporate free agent’.
Mark Carney has been appointed as the next governor of the Bank of England in Threadneedle Street, London
Mark Carney has been appointed as the next governor of the Bank of England in Threadneedle Street, London
The package was signed off yesterday by the non-executive directors at the Bank of England – a group which includes chairman Sir David Lees, Sir Roger Carr, chairman of British Gas owner Centrica, and Dave Prentis, general secretary of Unison.
Mr Carney will get a basic salary of £480,000, a cash allowance in lieu of pension of £144,000, and the £250,000 a year housing allowance – a total of £874,000.
John Mann, a Labour MP on the Treasury Select Committee, said: ‘I think even by MPs’ standards it is a remarkable amount of money to live on in London.
‘It is just comical that level of money.’
Mr Carney, who faces a UK tax bill of around £400,000 a year, has a British wife and intends to apply for British citizenship.
The pay of fellow Canadian Moya Greene, who runs Royal Mail and last year earned a total package worth £1.1million, has also caused outrage.
Although she gets perks such as two return flights to Canada each year, she does not get a housing allowance.

WHAT CAN MR CARNEY GET FOR £250,000 A YEAR?

After tax, Mark Carney will have a monthly housing allowance of £11,500 for his wife and four daughters. Here are some of the London properties he could rent: 
Mr Carney could set up home in this beautiful seven-bedroom, regency period house and still have £2,000 each month to spare.
The Grade II listed townhouse, which costs £9,500 a month, is located in leafy Blackheath, south east London, and even has its own swimming pool.
Affordable: This seven bedroom home in Blackheath is well within his budget
Affordable: This seven bedroom home in Blackheath is well within his budget
For just slightly over budget (£11,917pcm), the Carneys could live in the heart of London in this magnificent five bedroom house just a stone’s throw from Parliament Square, Buckingham Palace and St. James’ Park.
Luxurious: A bit over budget, but it's walking distance to Parliament
Luxurious: A bit over budget, but it's walking distance to Parliament
If the Carney family fancy rubbing shoulders with the rich and famous, they could rent this five-bed apartment in trendy St John’s Wood - a popular haunt of celebrities including Sir Paul McCartney and Kate Moss.

Furthermore, the property, which costs £10,834-a-month, is located on Abbey Road, close to the studios and zebra crossing made famous by the Beatles.
Plush: This pad is on Abbey Road, of Beatles album cover fame
Plush: This pad is on Abbey Road, of Beatles album cover fame
For £8,667-a-month, Mr Carney could opt for this five-bed family home, located close to picturesque Hampstead Heath, one of the most sought-after areas of London.
Location: This five bedroom house is in sought-after Beaumont Gardens in Hampstead
Location: This five bedroom house is in sought-after Beaumont Gardens in Hampstead
If Mr Carney wants to live within walking distance of the Bank of England, then he could chose this £10,000-a-month 18th century townhouse, which comes complete with a retractable glass room and contemporary internal ‘living wall’ of plants.
Desirable: Mr Carney might like this 18th century townhouse in Queen Anne's Gate
Desirable: Mr Carney might like this 18th century townhouse in Queen Anne's Gate

FEDS: Libor Trader 'Captain Caos' Dangled $100,000 Bribe


'Captain Caos' was so challenged he couldn't spell his own name.
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Bloomberg
In its $1.5 billion settlement with various countries’ authorities, UBS admitted to thousands of instances of interest- rate manipulation, involving more than 100 employees and managers, in currencies including the Japanese yen, the British pound, the Swiss franc, the U.S. dollar and the euro. The actions affected the London interbank offered rate, the global benchmark that influences the value of hundreds of trillions of dollars in mortgages, corporate loans and derivatives.
What sets UBS apart is not only the sheer extent of the behavior, but also the level of collusion with traders at other banks and the outright bribery of brokers who helped coordinate the manipulation.
One instance, which we call the “captain caos” scheme, deserves its place in the hall of fame of financial chicanery. According to the final notice from the U.K.’s Financial Services Authority, traders at UBS colluded with their peers at other banks “by entering into facilitation trades that aligned their respective commercial interests,” so they could all benefit from manipulating interest rates in Japanese yen.
A UBS trader, according to the FSA notice, promised this to a broker aiding in the rigging effort: “I’ll pay you, you know, 50,000 dollars, 100,000 dollars ... whatever you want ... I’m a man of my word.” The spelling-challenged traders and brokers who took part in the scheme came to address one another with monikers such as “the three muscateers” and “captain caos.”
The yen manipulation stands out in another significant way: In a deal with the U.S. Justice Department, UBS’s Japanese subsidiary admitted to wire fraud.  As we previously noted, wire fraud is one of the primary statutes U.S. prosecutors could use in pursuing criminal charges against individuals involved in Libor manipulation.  The statute prohibits the use of any interstate or international communication in furtherance of an effort to deceive for personal gain.  It carries a sentence of as much as 30 years in prison.
Continue reading...

Gov't announces GM 'exit strategy' ... taxpayers to lose billions!

Treasury announces GM exit strategy; automaker buying 200 million shares from U.S.

Washington — The Obama administration said Wednesday it will sell 200 million shares — or 40 percent of its remaining stake in General Motors Co. — back to the automaker and announced plans to completely exit the Detroit automaker by March 2014.
The Detroit automaker said it will purchase 200 million shares of GM stock held by Treasury for $5.5 billion — or $27.50 per share — nearly $2 above the stock's closing price on Tuesday. GM shares jumped sharply on the news and were up 7.5 percent to $27.36, or $1.90, early afternoon in very heavy trading.
The U.S. Treasury, after more than a year of refusing to say when it might start selling its remaining stake in GM, said it willannounce a written plan in January to shed its remaining 300 million shares over the next 12 to 15 months, likely in a series of small stock sales.
The Treasury's move is intended to minimize the impact of the stock sale on the share price — and the government's state will shrink from 26.5 percent to less than 19 percent — but the exit could be completed far more quickly.
The exit plan may prove to be a boost to GM's lagging stock price and to some car buyers, who have avoided GM because of the "Government Motors" label.
The exit timetable signals the end of one of the most extraordinary government interventions in the U.S. economy in history — the rescue and partial nationalization of two U.S. automakers and their finance arms supported by two U.S. presidents.
Still, taxpayers will almost certainly lose billions of dollars in the $49.5 billion GM bailout - and the government would need to sell its remaining shares for about $70 each to break even. If the government sold the rest of its stock at current prices, taxpayers would lose more than $13 billion. But profits from the bank and AIG bailouts will largely offset the auto bailout losses.
"The government should not be in the business of owning stakes in private companies for an indefinite period of time," Assistant Treasury Secretary Tim Massad said in a statement who oversees the $700 billion Troubled Asset Relief Program. "Moving to exit our investment in GM within the next 12 to 15 months is consistent with our dual goals of winding down TARP as soon as practicable and protecting taxpayer interests."
The Treasury has also agreed to waive its ban on GM using corporate aircraft — a condition it imposed on a few companies that got large bailouts in 2008 and 2009 — but government pay restrictions on top executives remain in force.
The restrictions limit most GM executives to no more than $500,000 a year in cash salaries. GM chief financial officer Dan Ammann said the issue is one of "ongoing discussions" between GM and Treasury.
The Treasury is also waiving a "vitality commitment" that required certain U.S. manufacturing volumes — but GM is already exceeding it and expects to continue, the company said.
Despite the government ownership, White House officials insisted they would have no role in GM's management, though there were some exceptions. In one notable move, the Obama administration vetoed a proposal by GM in 2009 to move its corporate headquarters from Detroit to Warren.
Ammann said the company has "no current plans" to buy or lease corporate aircraft - but company executives have long chafed at the fact they are forced to fly commercial - unlike other top corporate executives.
Ammann declined to discuss when the automaker and Treasury began negotiations about the sale or how it settled on the price. Ammann said GM doesn't expect to buy the remaining Treasury shares.
GM CEO Dan Akerson told company executives in an email that the move would help end a painful chapter in the automaker's life that nearly saw the company collapse in late 2008 without emergency government assistance.
"Today, GM and the U.S. Treasury are putting in motion a plan that will begin to close the books on the extraordinary government assistance that saved the company and our industry," Akerson wrote. "It has never been far from my mind that taxpayers rightfully expected us to change the way we do business in exchange for a second chance."
GM — which was criticized for corporate arrogance and for a moribund culture — has reshuffled its entire executive lineup since 2009 and made dramatic changes in how it does business.
"We are learning to be humble and to genuinely appreciate every customer," Akerson wrote.
In a Detroit News interview in 2011, Akerson said GM wasn't changing fast enough.
"Whoever comes after me; it's going to be a more important appointment than mine because he or she will have to carry on a cultural revolution here. It's just like the Communist Party in China in the 1960s, there has to be a cultural revolution here," he said.
GM — which last month obtained a new $5.5 billion line of credit — said its balance sheet will remain strong, with estimated liquidity of $38 billion at the end of 2012, following the closing of the share buyback.
Several analysts have suggested the company would use some of its liquidity to buy back shares.
"A U.S. Treasury sell-down was increasingly anticipated, although the actions were earlier than we expected and at a lower price," Peter Nesvold, an analyst with Jefferies & Co. wrote in a research note Wednesday. "The structure was probably more surprising, as it affords a premium to market price for a control stakeholder."
David Whiston, a senior equity analyst for Morningstar, said he was surprised the government didn't wait for a $33 a share price, but said investors likely were expecting an announcement following the quick AIG sale.
"This helps with the ("government motors") stigma, but there will always be a few hard line consumers who will never forgive GM," he wrote in an email Wednesday. "That doesn't bother me, as GM still sells plenty of cars and has great product. Some taxpayers will be upset by the loss, but I think those people will never be happy about the situation. Even if the sale had happened at $33 (the IPO price) those same consumers would have criticized Obama and GM."
The Canadian federal and Ontario governments — which gave GM a separate $10 billion bailout — still hold about 9 percent of GM's shares. Canadian officials said in Toronto they have no immediate plans to sell.
The announcement comes exactly four years to the day that President George W. Bush announced he would rescue GM and Chrysler with a $17.4 billion bailout in December 2008 using the $700 billion Troubled Asset Relief Program.
Bush stepped in after Congress failed to act. He added $7.5 billion for GM and Chrysler's auto finance arms and President Obama added $60 billion to the $85 billion auto bailout.
"The auto industry rescue helped save more than a million jobs during a severe economic crisis, but TARP was always meant to be a temporary, emergency program," Massad said.
Last week, the Treasury exited another major TARP recipient AIG.
GM stock is still trading far below its November 2010 initial public offering at $33 a share.

Lanny Breuer: The Real Reason UBS Rigged Libor

20 Signs That The U.S. Poverty Explosion Is Hitting Children And Young People The Hardest

Michael Snyder, Contributor
Activist Post

The mainstream media continues to insist that the economy is "getting better", but the poverty numbers for children and young people just continue to explode. For example, did you know that the poverty rate for families with a head of household under the age of 30 is a whopping 37 percent? Children and young people sure didn't cause our recent economic downturn, but they sure are getting hit the hardest by it.

According to the U.S. Department of Education, for the first time ever more than a million U.S. public school students are homeless. That seems like an impossible number, but it is actually true. How in the world could the "wealthiest nation on earth" get to the point where more than a million children can't count on a warm bed to sleep in at night?

Sadly, a huge number of American children can't count on a warm dinner either. About a fourth of them are enrolled in the food stamp program. What do you do if you are a parent in that kind of situation? How do you explain to your kids that you can't afford a nice home like everybody else has or that you can't afford to go to the grocery store and buy them some dinner?

Young people are experiencing very rough times right now as well. If you are under the age of 30, it is really, really difficult to get a job in America today. The competition for the few decent jobs that seem to be available is absolutely crazy. Unemployment among young people is at a level that we have not seen since World War II, and this is causing major problems.

Even if you do have a college degree, there is no guarantee that you will be able to get any type of a job. In fact, more than half of all college graduates under the age of 25 were either unemployed or underemployed last year. There are millions of very talented college graduates that are waiting tables, making sandwiches or stocking shelves down at the local branch of a global retail conglomerate. Meanwhile, they are saddled with record breaking amounts of student loan debt.

 This is easily the worst economic environment that we have seen for young people since the Great Depression of the 1930s. The number of good jobs continues to decline. Many young people are faced with the choice of taking a bad job or having no job at all.

If you are under 30 in America today, you better hope that you come from a wealthy family or that you have some really good connections, because otherwise the future looks pretty bleak for you.

The following are 20 signs that the U.S. poverty explosion is hitting children and young people the hardest...

1. If you can believe it, a higher percentage of children is living in poverty in America today than was the case back in 1975.

2. More than one out of every five children in the United States is currently living in poverty.

3. According to U.S. Census data, 57 percent of all American children live in a home that is either considered to be "poor" or "low income".

 4. Median household income for families with children dropped by a whopping $6,300 between 2001 and 2011.

5. For the first time ever, more than a million public school students in the United States are homeless. That number has risen by 57 percent since the 2006-2007 school year.

6. It is being projected that half of all American children will be on food stamps at least once before they turn 18 years of age.

7. One university study estimates that child poverty costs the U.S. economy 500 billion dollars each year.

8. The 18 to 24 age group has a higher unemployment rate than any other age group in the United States.

9. Young adult employment is now at the lowest level that we have seen since World War II.

10. In 2007, the unemployment rate for the 20 to 29 age bracket was about 6.5 percent. Today, the unemployment rate for that same age group is about 13 percent.

11. Families that have a head of household under the age of 30 have a poverty rate of 37 percent.

12. Family homelessness in the Washington D.C. region (one of the wealthiest regions in the entire country) has risen 23 percent since the last recession began.

13. Since the year 2000, incomes for U.S. households led by someone between the ages of 25 and 34 have fallen by about 12 percent after you account for inflation.

14. In 1984, the median net worth of households led by someone 65 or older was 10 times larger than the median net worth of households led by someone 35 or younger. Today, the median net worth of households led by someone 65 or older is 47 times larger than the median net worth of households led by someone 35 or younger.

15. During 2011, 53 percent of all Americans with a bachelor's degree under the age of 25 were either unemployed or underemployed.

16. Many young people are finding that they cannot afford to get married these days. Sadly, an all-time low 44.2 percent of all Americans between the ages of 25 and 34 are married right now.

17. Right now, approximately 53 percent of all Americans in the 18 to 24 age group are living at home.

18. The number of Americans in the 25 to 34 age group that live with their parents has grown by 25 percent since 2007.

19. One survey discovered that 85 percent of all college seniors plan on moving back in with their parents after graduation.

 20. Overall, approximately 25 million American adults are living with their parents in the United States right now according to Time Magazine.

After reading all of those statistics, do you still doubt that America is in decline? If so, you can find some more shocking statistics right here.

The truth is that it should be painfully evident that our economy is not working correctly anymore. We have lots of talented people, but there are not nearly enough jobs and a lot of those very talented people end up sleeping out in the streets.

A recent New York Times article told the story of a young man named Duane Taylor. Sadly, there are way too many young people out there today that are experiencing the same kind of things that he is...

Duane Taylor was studying the humanities in community college and living in his own place when he lost his job in a round of layoffs. Then he found, and lost, a second job. And a third. 
Now, with what he calls 'lowered standards' and a tenuous new position at a Jack in the Box restaurant, Mr. Taylor, 24, does not make enough to rent an apartment or share one. He sleeps on a mat in a homeless shelter, except when his sister lets him crash on her couch. 
'At any time I could lose my job, my security,' said Mr. Taylor, explaining how he was always the last hired and the first fired. 'I’d like to be able to support myself. That’s my only goal.'
There are millions upon millions of young people in America today that feel totally lost because they cannot find their places in the world.

They are angry, frustrated, depressed, desperate and disillusioned. They felt like they did everything that the system told them to do, and now they feel like the system is failing them.

An unemployed 2010 graduate of the University of Florida named Lance Fuller expresses similar sentiments on his blog entitled "Voices Of A Lost Generation"...
They are the countless young men and women eager for an opportunity but have found few, if any. They have desirable skills, are highly educated, and are more than willing to work.


Sadly, crippled by college debt and graduated into a struggling economy, they stand little chance to find gainful employment in their chosen fields and take temporary jobs they are overqualified for. They lie waiting for the dream job they went to school for — but it probably doesn’t exist. 
My name is Lance and sadly, I share in this story. Like my twentysomething peers, I am one of the thousands of faces of America’s Generation U — Unfortunate, Unlucky, and Unemployed. 
I am fortunate that I have never been without money to buy food and have never had to spend a night on the street. But tonight millions upon millions of Americans under the age of 30 will be faced with those kinds of circumstances.

Please say a prayer for them. They didn't cause the economic mess that we are in, but they are certainly paying the price for the mistakes that were made.

Does anyone out there have a similar story to the ones that were shared in this article? If so, please feel free to share it below. Perhaps your story will encourage someone else out there who is going through a really hard time right now.

This article first appeared here at the Economic Collapse.  Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here.

Whistleblower - $3.5 Billion Of Paper Used To Smash Gold Price

Today renowned silver market whistleblower Andrew Maguire spoke with King World News about the state of the physical gold market and said that several billion dollars of paper selling from government agents was used to smash the gold price yesterday.  Here is what whistleblower Maguire had to say:  “Gold is actually a currency, and it’s (the gold market is) intervened (in) by the government agents, which are the bullion banks.  Yesterday, clearly they (the bullion banks) sold gold in defense of the dollar.”
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Maguire continues:

“Keep in mind that $3.5 billion of paper gold was actually cleared in London yesterday.  This selling was coordinated by the same bullion banks that are also active in the Comex.  At the same time, they are rigging enough of a decline to cover shorts into capitulating longs on the Comex market.

But the Eastern central banks are simply sitting back and allowing this defense of the dollar to occur.  They know what’s going on....

“They know that the (US) government is shorting foreign exchange gold and they are long the dollar.  So they (the Chinese) simply scoop up what (gold) they can at the resulting discounted price.  What is astounding is that the price of world gold and silver is actually established in that manner because it has nothing to do with the physical market at all. 

Essentially what they (the Chinese) are trying to do is divest themselves of their dollars, euros, yen and any other fiat currency as fast as they can.  They are not stupid, they are going to sit back and allow the governments to defend these (paper) currencies.

So their bids are in the market and they are totally flexible at every discounted fix price.  There does, however, reach a point where these leveraged paper sales simply run out.  Physical allocations force the selling bullion banks to actually buy back some of these physical allocations. 

You just have to look at the current backwardation.  It offers a good window into what is actually occurring right now.  A lot of people might ask, ‘Where are we?’  It’s just a question of how much physical (gold) is made available, leased to the bullion banks, to meet these allocations. 

That’s why I monitor this wholesale market so closely and what I see currently is this paper is rapidly being converted into (physical) gold at a totally unsustainable rate.  So this stair-step higher (we have been seeing in the gold market for so long) is these Eastern central banks capitalizing on this discount.”

The above information was just a small portion of what whistleblower Maguire had to say.  This tremendous segment provides a fascinating look at what is really taking place behind the scenes in the gold war.  The KWN audio interview with Andrew Maguire will be available shortly and you can listen to it by CLICKING HERE. 

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