Saturday, September 3, 2011

John Williams Forecasts: “Catastrophe Ahead”

In his article Are Pessimistic Consumers’ Fears of High Inflation Exaggerated?, Daniel Gross writes:
...this alarmism over inflation on the part of consumers is nothing new, and it may not be warranted. We’ve given a lot of grief to professional forecasters, who never seem to know when a recession is about to begin or end. But when it comes to projecting inflation, the amateurs don’t do very well, either.

there are a host of individuals and companies who benefit from freaking people out about inflation — i.e. gold bugs, bond vigilantes, politicians who believe that the Fed, simply by printing more money, creates inflation.

Given that people seem to be incorporating higher inflation into their mindsets, perhaps policymakers should consider indulging them.
Last time we checked, inflation occurs when those responsible for issuing the currency, be it a Roman emperor who controlled the content of precious metals in coinage or a central bank that controls the money supply, is solely responsible for the resulting price inflation.
How else, save trillions of dollars in quantitative easing, can we explain the exorbitant price increases in commodities like food and gas over the last forty years? Yes, Mr. Gross, the Fed, simply by printing more money, does, in fact, create inflation. A third grader can understand this basic concept, that when you artificially create something, its value goes down.
The reason people “seem” to be incorporating higher inflation into their mindsets is because policymakers have already indulged them. Isn’t this exactly the current policy of the Fed?
Mr. Gross suggests that consumers are disconnected from reality because they are, on a personal level, expecting inflation of around 5.8% over the coming 12 months based on a recent survey. Clearly, Mr. Gross is himself disconnected from reality, because those consumers are already experiencing yearly price increases as of right now of over 11% – almost double what they are expecting for the coming year, and triple what the official CPI has reported.
The real data suggest everything the Federal Reserve is reporting, and mouthpieces like Mr. Gross are parroting, is nothing short of deceptive.
Well known economist and contrarian statistician John Williams, who incidentally is not an amateur, provides a concise explanation for how you’re losing purchasing power to inflation everyday.
Williams says, for example, that Social Security cost of living adjustments, if the government had utilized real data, should be double what they are today. Of course, that is simply not economically feasible for a government run retirement system that is a few years from collapsing using even manipulated data.
In an interview with Goldseek Radio, John Williams, proprietor of the popular alternative statistics web site Shadow Stats, provides those with the desire to understand the real numbers a concise explanation of how the government calculates their statistics, why the need for manipulation, and what the real data are actually saying:
You have to be careful when you are talking about inflation and deflation that you define what you’re talking about. When I talk about inflation I’m talking about the change in prices for goods and services consumed by the consumer. I’m not talking about asset inflation or deflation. When I’m arguing that we have higher consumer inflation, that’s again for goods and services. It’s not for assets and such. I can see a deflation in assets – I’d have no problem, conceptually, with a stock market crash. In fact, I think we’re probably seeing something akin to that now in slow motion over the last couple of weeks.
Our policymakers, utilizing all sorts of adjustments and machinations, are doing everything in their power to control the perceptions of the general population. If they were to come out and tell us the truth about what’s really happening to our currency you can fully expect panic buying of precious metals and hard assets would ensue. As we’ve pointed out many times before, the powers that be do not want anyone but themselves holding gold and silver assets, because then you are not beholden to their system of debt.
Make no mistake, the US Dollar is in serious trouble, but so long as people, those like the aforementioned Mr. Daniel Gross, have faith in what they’re being told by the Fed, the US government and the mainstream media, that the inflation rate is under control at 3%, there is still calm.
When the reality of what has happened becomes obvious, however, the people will go ballistic. And according to Mr. Williams, that time is coming sooner rather than later:
I’m not a day to day timer here, but I can tell you long-term that we have a catastrophe ahead for the US dollar. It will eventually become worthless in a hyperinflation, which I have written about it’s the time of thing that will break in the not to distant future. It could be another couple of years, but it’s coming. So, looking at the long haul you don’t want to be in the US dollar. Gold is a primary hedge against that, as is silver.
We’ve previously written of Mr. Williams warnings, and what we can expect in such a scenario in No Way of Avoiding Financial Armageddon:
The U.S. economic and systemic solvency crises of the last two years are just precursors to a Great Collapse: a hyperinflationary great depressionSuch will reflect a complete collapse in the purchasing power of the U.S. dollar, a collapse in the normal stream of U.S. commercial and economic activity, a collapse in the U.S. financial system as we know it, and a likely realignment of the U.S. political environment. The current U.S. financial markets, financial system and economy remain highly unstable and vulnerable to unexpected shocks. The Federal Reserve is dedicated to preventing deflation, to debasing the U.S. dollar.
John Williams – December 2009
The evidence is absolutely clear. The catastrophe cannot be stopped. The implications are life changing.

Bernanke’s Global Games

Bernard Bernanke, chairman of the U.S. Federal Reserve, will give a speech at the summit meeting of reserve bankers; it will affect the entire global economy.
Once a year the little town of Jackson Hole, Wyoming, awakens from its slumber when reserve bankers from the world’s major economies are invited to a summit to exchange thoughts on significant developments in the global economy.
That will happen again on Friday. Facing national debt crises, turbulent markets and threatening recession, financial markets nervously await Ben Bernanke’s speech in hopes that he will once again fire up America’s printing presses, offering U.S. securities for sale.
That will make the third time since the collapse of financial markets in September 2008 that the Fed has taken such action due to the still stuttering U.S. economy. Quantitative easing — loose fiscal policy — is the term used to describe this method of intervention. At a time when interest rates are low, the Fed buys huge quantities of U.S. government bonds, paying for them with newly printed money that then flows into the markets. The Fed bought bonds worth roughly $3 trillion during the first two rounds of quantitative easing, known as QE and QE2. QE3 will expand on that fiscal loosening.
But quantitative easing is controversial because its effectiveness is by no means a settled matter. After the first two rounds, critics complain that the U.S. economy grew hardly at all after a brief upward tick. The near 10 percent unemployment rate is at a 30-year high. However, economics Nobel laureate Joseph Stiglitz told the Financial Times that without the looser fiscal policy, the recession would have been far worse, and the unemployment rate would now be near 12.5 percent. Because of that, he feels a third round of QE is necessary.
The entire world will be impacted
The negative effects of such an expansion will mainly be felt by the rest of the world, but not as seriously by the eurozone nations because the European Central Bank is also currently buying up the investments of member nations, thereby keeping the euro’s value relatively low.
Full Article:

Feds raid Gibson guitar

Peter Schiff: 'QE2 is the reason for recession'

Las Vegas real estate crash and economic collapse #38.

How Global Investors Make Money Out of Hunger

By Horand Knaup, Michaela Schiessl and Anne Seith
Photo Gallery: Hunger Is Our Business
Getty Images
In recent years, the financial markets have discovered the huge opportunities presented by agricultural commodities. The consequences are devastating, as speculators drive up food prices and plunge millions of people into poverty. But investors care little about the effects of their deals in the real world.

The room in which the world's food is distributed looks everything but appetizing. Bits of paper and disposable cups litter the trading floor at the Chicago Board of Trade (CBOT). Sweaty men in bright yellow, blue or red jackets walk around, seemingly oblivious of the debris beneath their feet, waving their hands, shouting and scrapping over futures contracts for soybeans, pork bellies or wheat.

Here, in the trading room of the world's largest commodity futures exchange, decisions are made about the prices of food -- and, by extension, the fates of millions of people. Those decisions affect both hunger on the planet and the wealth of individual investors. For Alan Knuckman, there is hardly a nicer place than the CBOT trading floor. "This is capitalism in its purest form," the commodities expert raves. "This is where millionaires are made." The 42-year-old's face shines with a boyish glow -- perhaps because he has never stopped playing.
Knuckman arrived here 27 years ago, and quickly advanced from his first job as a runner in the trading room to a trader. He worked for brokerage firms, soon established his own firm and is now an analyst with Agora Financials, a consulting firm specializing in commodities investments. He also writes a newsletter that offers investment tips. "I trade in anything you can get in and out of quickly," he says candidly. "I'm here to make money."
'I Believe in the Market'
How he makes money doesn't make any difference to Knuckman. He draws no distinctions among commodities like petroleum, silver or food products. "I don't believe in politics," he says. "I believe in the market, and the market is always right."
How does he feel about exploding food prices? For Knuckman, they are purely a reflection of supply and demand. And speculators? They're good for the market, because they predict developments early on. Is there excessive speculation? "I don't see it."
It's a surprising comment. Never before has so much cash flowed into financial transactions involving agricultural commodities. In the last quarter of 2010 alone, the amount of money invested in these commodities tripled compared with the previous quarter. There has been a lot of money in the market since the countries of the world tried to overcome the financial crisis with massive economic stimulus programs and bailout packages.
Agricultural commodities attract investors who are no more interested in grain than they were previously in dot-com companies or subprime mortgages. They range from giant pension funds to small private investors searching for new, safer investment options.
Satisfying the Demand
The large index and agriculture funds now being offered by the banks seem to have come along just at the right time to satisfy this demand. All of a sudden, the world's food supplies have become a tradable commodity, as easy to handle as stocks.
The downside is that food prices are rising in parallel to the ravenous demand for agricultural securities. In March, the Food and Agriculture Organization of the United Nations (FAO) reported new record high prices, which even surpassed the prices during the last major food crisis in 2008. According to the FAO's Food Price Index, overall food costs rose by 39 percent within one year. Grain prices went up by 71 percent, as did prices for cooking oil and fat. The index had reached 234 points in July, only four points below its all-time high in February.
"The age of cheap food is over," predicts Knuckman, noting that this can't be such a bad thing for US citizens. "Most Americans eat too much, anyway."
For his fellow Americans, who spend 13 percent of their disposable income on food, the price hike may be an annoyance. But for the world's poor, who are forced to spend 70 percent of their meager budgets on food, it's life-threatening.
Since last June alone, higher food prices have driven another 44 million people below the poverty line, reports the World Bank. These are people who must survive on less than $1.25 (€0.87) a day. More than a billion people are starving worldwide. The current famine in the Horn of Africa is not only the result of drought, civil war and corrupt officials, but is also caused by prohibitively high food prices.
'Side Effects'
Knuckman refers to the fact that the poorest of the poor can no longer pay for their food as "undesirable side effects of the market." Halima Abubakar, a 25-year-old Kenyan woman, is experiencing these supposed side effects at first hand.
She is sitting in her corrugated metal hut in Kibera, Nairobi's biggest slum, wondering what to put on the table this evening for her husband and their two children. Until now, the Abubakars were among the higher earners in Kibera. The family managed to feed itself adequately with the monthly salary of €150 that Halima's husband earns as a prison guard.
But that has suddenly become difficult. The price of corn meal, the most important food staple in Kenya, is now at a record high after increasing by more than 100 percent in only five months. Potato prices went up by a third, milk is also more expensive, and so are vegetables.
Abubakar doesn't know why this is the case. She only knows that she suddenly has to pay close attention to how she spends the family's meager daily food budget of about 300 shillings (€2.30). Her first step was to switch to a cheaper brand of corn meal. It doesn't taste of much, but at least it fills one's stomach. She sometimes goes without her own lunch so that her children can have enough to eat.
List of Possible Reasons

"More poor people are suffering and more people could become poor because of high and volatile food prices," World Bank President Robert Zoellick said in April, describing the brutal effects of price increases on consumers in developing countries. The problem has many experts deeply concerned. The probable reasons for the price explosions are cited again and again at meetings and conferences. They include:
  • Climate change, which leads to droughts, floods and storm, and thus to crop failures;
  • The cultivation of biofuels, which takes valuable farmland out of food production;
  • The global population, which is growing too fast for agricultural production to keep up;
  • The emerging economies China and India, whose citizens are consuming greater quantities of higher quality food;
  • The rising price of oil, which makes it more expensive to produce and ship food products;
  • The rise in meat consumption, which means that more grain is needed for animal feed;
  • Decades of neglecting agriculture, especially in hunger-prone regions.
All of these factors sound logical and plausible, and some undoubtedly contribute to the tense food situation. Yet they are not responsible for the excessive price hikes.
Olivier de Schutter, the United Nations special rapporteur on the right to food, is one of the few who is trying to set the record straight. The production of biofuel and other "supply shocks" -- such as crop failures and export bans -- were "relatively minor catalysts," he wrote recently. "But they set off a giant speculative bubble in a strained and desperate global financial environment." He identifies the true culprits as major investors who, as the financial markets have dried up, have invested heavily in the commodities trade, expanding it beyond all proportion. According to de Schutter, excessive speculation is the primary cause of the price increases. Indeed, closer inspection reveals that the reasons cited to date for the price hikes on food products are somewhat dubious.

California bill to fund college for illegal immigrants advances

(Reuters) - A California bill dubbed the state's "Dream Act" that would allow illegal immigrants to receive public funds for college education was approved on Wednesday by the state Senate.
The legislation would still need to pass the Assembly and be signed by Governor Jerry Brown, a Democrat, to become law.
Proponents acknowledge that illegal immigrants who attend college are still not able to find legal employment after graduation, but they say the bill could eventually help spur the federal government to grant those students citizenship.
"The Senate made history today by voting to pass ... the final portion of the California Dream Act," Assembly member Gil Cedillo, a Democrat from Los Angeles and the author of the bill, said in a statement.
Cedillo said that, if the bill is approved, it would "increase the earning potential of these students, which helps all of us by contributing to our tax base."
Brown in July fulfilled a campaign promise by signing into law a related bill to allow illegal immigrants to receive privately funded college scholarships, but not public funds.
The latest bill would go into effect in 2013 and could cost the California budget about $40 million a year, but not all of that would go to immigrants because some legal residents from other states could qualify for the funds as well, according to an analysis prepared for a state Senate committee.
Ira Mehlman, spokesman for the Federation for American Immigration Reform, said the bill would hurt California.
"The state is slashing budgets, they're cutting admissions, they're cutting programs, and here they are using scarce resources to help illegal aliens, when so many other people are feeling the brunt of these budget cuts," Mehlman said.
The bill passed the Democratic-controlled state Senate on Wednesday by a vote of 22-11, said Conrado Terrazas, spokesman for Cedillo's office.
The Assembly is expected to vote this week on the bill.
California is one of about a dozen states that allows illegal immigrants to pay in-state tuition, based on attendance and graduation from a state high school. Only a handful of states also allow for financial aid for those students.
A federal Dream Act that would have created a pathway to citizenship for illegal immigrants who attend college or serve in the military failed in the U.S. Senate last year.
(Editing by Cynthia Johnston)

French Financial Weekly: "Hoogervorst and Pecora, Same Battle" for Glass-Steagall?

Commenting on the letter from International Accounting Standards Board (IASB) head Hans Hoogervorst to the European Securities and Market Authority, saying that "certain European banks have not properly capitalized the Greek risk," the major French economic weekly Challenges compares what is happening now with the first step towards passing the original Glass-Steagall Act of 1933.
The former Dutch Finance Minister, Hoogervorst admits he is "no technical expert," but replies to the bankers' howls regarding his expertise, "Sometimes you need an 'outsider' who asks the basic questions." Is history repeating itself? asks Challenges: "This reminds us how the famous Glass-Steagall Act came about in the United States ... in 1933. It was Ferdinand Pecora, a young New York prosecutor, an Italian émigré, with no knowledge of financial practices, who investigated the case of the banks, by putting it on a moral plane. At that time, American bankers blatantly had the upper hand in corrupting officials, some of them were financing the parties of Hitler and Mussolini, and all succeeded in tax evasion.
"By convincing the public that a profound reform of the banking system was required, the prosecutor permitted the vote for the Glass-Steagall Act. Pecora and Hoogervorst, the same battle? One thing is sure: we should be suspicious of the experts, recalling that it was an amateur who built Noah's Arc and an expert who laid the plans for the Titanic..."

Tracking Gold

Doug Hornig
Casey Research

Recently, we’ve received a number of emails from readers asking why the primary gold ETF, SPDR Gold Trust (NYSE:GLD), doesn’t more closely track the price of gold, and other related questions. For those readers who aren’t already familiar with the workings of this innovative way to “own gold,” it’s worth going over a few of the details, because there are some common misunderstandings regarding the ETF.

The creators of GLD were as savvy as it gets. They saw a market crying for something like this and turned that need into one of the most successful new financial products ever introduced. The ETF burst upon the scene in November of 2004 and was immediately latched onto as a means of riding the gold bull market without the inconvenience of having to transport and securely store actual bullion. In the past seven years, its rise has been meteoric. It has steadily ascended the list of the world’s leading gold repositories, until today it has the sixth-largest global stash of the metal, at more than 1,230 tons, or 39.57 million ounces, worth over $70.7 billion.

First misconception:

Contrary to popular opinion, the SPDR Gold Trust does not buy and sell gold. It creates and redeems paper shares in the company. These are passed through a group of market makers, who trade them on the NYSE, then deposit into or withdraw from the HSBC vault in London the corresponding amount of physical bullion, in the form of 400 oz. London Good Delivery bars.

And even that description is somewhat misleading. GLD deals only in “baskets” of 100,000 shares, with the goal being for the share price to track gold’s market value as closely as possible. Since each share represents slightly less than a tenth of an ounce of gold, that means each basket must trade close to 10,000 ounces of gold. That’d be impractical if the buying and selling had to be done on the open market.

So how do they pull it off? Well, the company is not exactly forthcoming about its inner workings, but after extensive conversations with officials, I was able to determine that what actually happens is that the gold is moved either into or out of the GLD-allocated section of HSBC’s vault, to or from another section of that same vault. When I found that out, I envisioned a guy on a yellow forklift, driving pallets laden with thousands of ounces of gold back and forth across the vault floor. Such a job.

Beyond the basics, we don’t know much. You will not be allowed to see the vault, whether or not you are a GLD shareholder and no matter how many shares you own. In fact, a high trust official in New York told me that even he isn’t allowed inside there.

For the most part, GLD does a pretty good job of following the spot price of gold. A share will never be priced exactly at the value of a tenth of an ounce of metal, simply because the trust deducts transaction fees and other expenses. But it’s close. During August of 2011, for example, the net asset value (NAV) of a share of GLD varied from 97.3635 to 97.3867% of the gold price, as fixed each day at 10:30 a.m. New York time.

However, if you are an investor in GLD, or are considering becoming one, there are a few things to keep in mind. First of all, it can’t be stressed enough that this is a paper asset. It is not a way to buy gold and have someone else store your holdings for you. That can be done in other ways. There are depositories that specialize in this service, both domestically and in foreign jurisdictions like Switzerland. But that isn’t what GLD is about.

Now, theoretically, it is true that you can convert your GLD shares to physical gold and take delivery of it. But practically, you can’t. For one thing, you have to be approved to do so (generally meaning, you’re either a broker or a market maker), and then you have to redeem a minimum of 100,000 shares. And even if you meet those qualifications, buried in the firm’s prospectus – a very tough read, by the way – is a provision stating that they have the option of redeeming such shares in cash equivalent rather than bullion.

This is to say: If there is a sudden run on physical gold, GLD is not contractually obligated to provide actual metal, in exchange for however many shares, to anyone.

Thus our position has always been: Hold as much gold in coins and bullion as you comfortably can. Use the ETFs to generate profits if you like, but make sure you realize that all of those profits will be of the paper variety.

Furthermore, there is the little matter of taxation. You may well understand that GLD shares are not a substitute for precious metals, and you may be in it only as a way to make money from a rising gold price by simply placing an order with your regular stock broker. If so, well and good. But what you may not know is that GLD shares, although they trade like stock, are not stocks in the same sense as Apple shares. Not when the taxman cometh.

If you buy shares of Apple and hold them long term, for more than a year, then sell them, you are taxed at the prevailing capital gains rate, currently 15%. Gold, however, is considered a “collectible.” If you buy gold coins, for example, and hold them long term, then sell them, your tax liability is at the rate for collectibles, presently 28%. If you sell them for a short-term profit, you’re liable for taxes at the same rate as for ordinary income, which is determined by whatever bracket you’re in.

Of course, GLD shares are not gold, as I’ve just taken some pains to point out. Ah, but here’s the rub. GLD is structured as a grantor trust, not a mutual fund. A grantor trust is ignored for tax purposes so that the investor is treated as owning a pro-rata share of the underlying holdings, not the entity as it exists on paper. That is to say, if GLD were a mutual fund, shares would be taxed at the normal capital gains rate, but because it is a grantor trust, its long-term gains are taxed at the applicable rate for the gold it holds… which is 28%.

This situation leads to some rather odd tax peculiarities. Say your ordinary income is in the 25% tax bracket. You’re actually better off selling GLD shares short term than you would be if you held them long term and got pushed into a 28% liability.

None of this is to disparage GLD. For ordinary investors, the ETF represents a way to (indirectly) participate in gold “ownership” without the hassle of actually taking physical delivery and finding a suitable place to vault your metal. Plus, there are no storage fees, bid/ask spreads, threats of theft, or dealer markups to worry about. And finally, for those who like to really play the market, shares are amenable to all the tricks of the securities trade. They can be optioned, shorted, hedged, bundled, margined, whatever. Little wonder GLD is so wildly popular.

So use GLD if you are of a mind to. Just be certain you understand what it is you are dealing with.
[There’s a good reason that more and more investors seek the security of gold and gold investments: the US is bankrupt, and the runaway national debt is threatening not only us but future generations as well. Learn more in our FREE online video event, The American Debt Crisis – How Big? How Bad? How to Protect Yourself, on September 14. Five Casey experts plus guests Mike Maloney, Lew Rockwell and John Mauldin will discuss what to expect and what you can do.]

Chris Whalen Annihilates NY Fed Director Kathryn Wylde

Whalen said last week:
  • "I'm just appalled.  She's not supposed to behave this way.  If she wants to be an advocate for the big banks, then she ought to step down."
We covered the outrage HERE.
Here is the most gluttonous paragraph, coming from NY Fed Board member Kathryn Wylde. Characterizing her conversation with Mr. Schneiderman that day as “not unpleasant,” Ms. Wylde said in an interview on Thursday that she had told the attorney general:
  • “It is of concern to the industry that instead of trying to facilitate resolving these issues, you seem to be throwing a wrench into it.  Wall Street is our Main Street — love ’em or hate ’em. They are important and we have to make sure we are doing everything we can to support them unless they are doing something indefensible."
Wylde defended her remarks HERE.
Kleptofraudtocracy at its finest and in its most pure, unadulterated form.

Fed orders Goldman to review foreclosures

(Reuters) - The Federal Reserve ordered Goldman Sachs Group Inc to hire a consultant to review practices of a former mortgage subsidiary on Thursday and said it plans to assess a monetary penalty for wrongful foreclosures.
The Fed's crackdown sent Goldman shares down 3.5 percent on Thursday, even as the bank announced that it had completed the sale of Litton Loan Servicing LP, the mortgage-servicing business at the heart of its foreclosure problems.
Litton's regulatory troubles stem largely from the practice of "robosigning," in which bank employees signed foreclosure documents without reviewing case files as required by law.
Many large banks, including Bank of America Corp, JPMorgan Chase & Co, Wells Fargo & Co and Citigroup Inc, have been targets of probes by state and federal regulators over the same issue, in the clean-up after a world financial crisis triggered in large part by bad mortgages in the United States and bonds backed by those loans.
The Fed cited "a pattern of misconduct and negligence" at Litton in announcing its enforcement action against Goldman.
An outside consultant will have to review all of Litton's foreclosure activity in 2009 and 2010, to identify borrowers who suffered financial losses due to improper practices. Goldman will have to reimburse those customers and is also responsible for any fines that the Fed assesses after the review is complete.
Separately, Goldman also reached a foreclosure-practices pact on Thursday with New York Financial Services Superintendent Benjamin Lawsky, helping clear the way for the bank to sell the business to Ocwen Financial Corp for $264 million.
The bank agreed to forgive 25 percent of principal balances for struggling homeowners who are 60 days past due on mortgage payments, at a cost of $53 million. Goldman will also compensate some Litton home loan borrowers for wrongful foreclosures at an indeterminate cost.
As part of the deal, Goldman, Litton and Ocwen all pledged to stop the robosigning practice, institute new staffing and training requirements for employees handling foreclosures and withdraw pending foreclosure actions that are based on faulty paperwork. They also agreed to compensate borrowers for wrongful foreclosures and strengthen protections for homeowners in relation to late payment fees and insurance costs.
In return, Lawsky agreed to issue a "no objection" letter to the planned Litton-Ocwen transaction.
But the agreement "does not preclude any future investigations of past practices or release any future claims or actions whatsoever," the state agency said in a statement.
Goldman shares closed down $4.06, or 3.5 percent, at $112.16 on the New York Stock Exchange. Ocwen Financial shares closed down 52 cents, or 3.8 percent, at $13.28.
Goldman bought Litton in 2007 for $430 million, hoping to glean more information about the subprime mortgage market to help its trading business. But more recently, it has become a money-losing thorn in Goldman's side.
The bank began considering a sale of Litton late last year, as the mortgage market continued to suffer losses and state and federal regulators began investigating industry-wide foreclosure problems. Goldman wrote down the value of the business by $220 million in the first quarter.
In a quarterly filing on August 9, Goldman said Litton was facing probes by state attorneys general and banking regulators. A group of the nation's largest banks are said to be working toward a settlement that could resolve some of those investigations and cost the industry billions of dollars.
Ocwen is now the 12th largest mortgage-servicer in the United States after having acquired Litton, a relatively small player that ranked 23rd in the industry.
(Additional reporting by Sakthi Prasad in Bangalore; Editing by Robert MacMillan, Steve Orlofsky, Gary Hill)

Marc Faber's Warning Shocks CNBC Anchors: 'Don’t Store Your Gold In The United States!' (VIDEO)


If you're not careful, Jamie Dimon will send your physical gold to Hugo Chavez...
Last week on CNBC the following classic exchange occured:
Faber:  "I prefer if investors hold physical gold in a safe deposit box, ideally outside the US, in various locations - Switzerland, Singapore, Hong Kong, Australia, Canada.  I think it’s important in today’s very uncertain world to diversify, not only the various asset classes, but also the custody of your assets should be in different jurisdictions."
CNBC: "Uh, so do you thus not trust US banks or US custodians?  Do you think they might fail or abscond with the gold?"
Laughter and smirking from CNBC.
Faber: "I don’t trust anyone."
Uncomfortable silence.
CNBC: "Hmmm. Interesting."

National Preparedness Month: Wise Food Storage

Last week, I had the wonderful experience of touring the manufacturing facilities of one of our trusted partners, Wise Food Storage. It was a great experience! I’ll give a little background as to why we chose Wise Food Storage in the first place. For quite some time, I had been looking for a viable product that would stand the test of time, especially since we specialize in the Berkey Water Purification Systems. It only made sense that we would offer viable food storage options in addition to our Emergency Seedbanks and other preparedness products. After extensive research among dehydrated and freeze-dried food companies and after speaking with them, we decided that Wise Food Storage was a good fit for our customers in the United States…fast forward to today.
September is National Preparedness month. The reality is that we should always be prepared! Well, I wasn’t prepared for how thorough the folks at Wise Food Storage are in the manufacturing and distribution of their products, WOW! When I arrived at their Utah manufacturing facility, the weather outside was hot. Once inside the building, the temperature was a nice contrast to the heat. I was escorted throughout the facility and donned the customary booties, gown, and cap. I maintained a comfortable distance with the protective observation barriers in front of me.
I observed that their complete operation exceeds regulatory compliance standards in packaging and production. One example is the content within the individual packages. Wise Food Storage has an exhaustive amount of quality assurance standards and practices which ensure not only that each individual package exceeds weight requirements, but that nothing but the best quality food storage meals results in every packet and container. The demand for Wise Food Storage is mind-boggling!
My visit to the facility lasted one half-hour, and it was well worth it. Getting the opportunity to have a first-hand tour of the products we distribute was a great experience. The fact that I personally use Wise Food Storage made it even more meaningful.
Wise Food Storage Benefits & Advantanges:
  • Shelf Life: Guaranteed up to 25 years!
  • Smart Packaging: Nitrogen-Flushed Pouch, Mylar Family-size 4-serving Foil Pouch, Square Plastic Container and Grab—and—Go Handle, Stackable Design,Re-sealable Pull Tab Lid
  • Dehydrated & Freeze-Dried: Through extensive evaluation, research and testing, we have combined both freeze-dried and dehydrated products together to ensure optimal taste, texture and nutritional value.  Expensive ingredients such as peas and other vegetables are generally freeze-dried.  Other ingredients like noodles and rice actually taste better when dehydrated.
  • Easy to Prepare: ready-made emergency meals, simply add hot water, wait 12-15 minutes, and you’re ready to eat.
  • Affordable: ready-made meals run approximately $1.60 a serving, making them truly affordable.
If you’re considering Wise Food Storage, take advantage of our free phone consultations. Please call to schedule an appointment or to receive your consultation @ 877-886-3653.

-The Berkey Guy

Firms in Utah Preparing to Hire Mexicans

DENVER – Utah businessmen are preparing to hire potentially thousands of Mexican temporary workers.

Representatives of several chambers of commerce and business groups met last week in Utah with local public officials and representatives of the Mexican state of Nuevo Leon to learn about a new state law, HB466, and about the procedure for processing H2B visas.

The entry into force of HB466 would allow businessmen to hire up to 16,000 temporary workers from Nuevo Leon, the state with which the Utah government signed an agreement to establish a pilot program.

Although the federal government still must give its final approval to the initiative because the preestablished number of 66,000 H2B visas has already been exceeded for this year, businessmen from Salt Lake City, Provo and other cities attended seminars to learn how to process those visas.

Ben Wallace, assistant general manager of a Resorts West luxury rental establishment in Park City, told reporters that the seminars sparked a high level of interest because “we’re not finding enough people in our area” to work in jobs like cleaning and maintainence at hotels during the winter season.

Tim Wheelwright, an immigration attorney with Durham Jones & Pinegar and the presenter of the seminars in Utah, said that the approval of HB466 indicates that “we want to play by the rules. We want to promote legal immigration.”

However, he said, the H2B visa system is very complicated.

If the rules change or if the federal government decides to limit the number of H2B visas that it authorizes in a certain year, businessmen run the risk of investing thousands of dollars in advertising and in immigration procedures without then being able to count on having the workers they need, the lawyer said.

As a way to limit that risk, Utah signed a cooperation agreement with the Nuevo Leon Migrant Attention Center.

The center’s Carlos Ocadiz told the Utah businessmen that Nuevo Leon is helping process the H2B visas via the U.S. consulate in Monterrey, Mexico.

According to Ocadiz, almost 84 percent of the total number of H2B visas authorized annually by the United States are processed at the Monterrey consulate and 94 percent of those visas are approved.

Ocadiz said that 98 percent of the Mexicans who arrive in the United States with those temporary visas return to Mexico when the visas expire, generally after 10 months. EFE

DOJ Advises Gibson Guitar to Export Labor to Madagascar

The Gibson Guitar saga has taken a sinister turn.
It seems that the Department of Justice wasn’t satisfied with merely raiding the law abiding factories of Gibson Guitar with armed agents, shutting down their operation costing them millions, and leaving the American company in the dark as to how to proceed without going out of business.
Now, according to CEO Henry Juszkiewicz, agents of the United States government are bluntly informing them that they’d be better off shipping their manufacturing labor overseas.
In an interview with KMJ AM’s “The Chris Daniel Show,” Juszkiewicz revealed some startling information.
CHRIS DANIEL:  Mr. Juszkiewicz, did an agent of the US government suggest to you that your problems would go away if you used Madagascar labor instead of American labor?
HENRY JUSZKIEWICZ:  They actually wrote that in a pleading.
CHRIS DANIEL:  Excuse me?
HENRY JUSKIEWICZ:   They actually wrote that it a pleading.
CHRIS DANIEL:  That your problems would go away if you used Madagascar labor instead of our labor?
So the government attacked them in the first place by citing obscure regulations that probably weren’t violated about importation of wood. Now they are suggesting that all these problems would go away if they simply exported their labor.
Had it simply been said in passing by an agent, one could write it off as a lone sarcastic agent, trying to push buttons.  But the fact that they actually wrote it in the pleading is a level of hubris that goes well beyond over zealous law enforcement officials and passes straight into what can easily be translated as an out of control and corrupt targeting of an American corporation.
When President Obama gives his jobs speech next week, let’s hope he has an answer for why our government would want to force and coerce corporations to send jobs overseas.
Here’s the audio of the CEO making the incredible allegation:
Download audio here
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