Monday, June 24, 2013

Edward Snowden to America: ‘Catch Me If You Can’

Many members of the media did show up, however, and they're now presumably floating across the world to Havana looking and feeling like fools.
According to media reports, which may not be worth much in this case, Snowden left his hideout in Hong Kong on Saturday night and flew to Moscow, where, to the chagrin of some American politicians, he was apparently welcomed with open arms. Later reports said that Snowden had been booked on today's flight to Cuba and, from there, would fly on to Venezuela or Ecuador, where he is said to be seeking asylum.

But now that Snowden isn't on the Cuba plane, no one is sure where he is, or what his plans are. Suddenly, it's hard to be certain that he actually left Hong Kong. The Washington Post is even wondering aloud whether he even exists.
Assuming Snowden does exist, and that this isn't one of the greatest red-herring hoaxes ever, his great escape is another finger in the eye of the United States, the country that he once swore to be loyal to.

Although some Americans still support Snowden and consider him a patriot, most Americans now want him tossed in jail. Snowden's initial leaks focused on data that the U.S. National Security Agency is collecting about Americans, which triggered perfectly reasonable questions about whether the NSA is collecting too much data and whether Americans' privacy rights are being violated.
But in the past week, Snowden's leaks have turned to exposing U.S. spying on world leaders at a G20 conference and, according to a Chinese newspaper, detailing computer hacking attacks by the U.S. on Chinese targets. These leaks seem self-serving and motivated not by concern about Americans but by a desire to curry favor with China and a personal dislike of spying of any kind.
According to Wikileaks, the organization run by another government-hating fugitive, Julian Assange (who is himself hiding from authorities in the arms of Ecuador), Snowden is being escorted to "a democratic country." Once there, Snowden will presumably continue to try to avoid facing the consequences of committing what most people agree were serious crimes.
And, perhaps, if he is treated well in his new country, Snowden will continue to believe that the U.S. government's imperfect efforts to protect Americans are reprehensible and that only in other countries do governments understand what democracy, freedom, and privacy really mean.
It appears that Snowden is driven by a personal philosophy that most mainstream Americans would consider extreme, one that is arguably anti-American, idealistic, and naive.
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Don’t Look at Bernanke, China Is Driving This Meltdown

US stocks are getting hammered in early trading as uncertainty over the Chinese growth story sends investors to the sidelines. The S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI) are both down over 1.5% and the yield on the US 10-year (^TNX) note has risen over 2.6% for the first time in nearly 2 years.
The People's Bank of China (PBOC) triggered the latest sell-off after it in effect told participants in the Chinese banking system that they would be left to their own devices in handling an apparent liquidity crisis.
"At present, the overall liquidity in China's banking system is at a reasonable level, but due to many changing factors in the financial markets and also because of the mid-year point the requirements for commercial banks in liquidity management have become higher," the PBOC said in a statement released on its website earlier today.
Overnight lending rates have exploded in response to the the PBOC's non-action. The Shanghai Composite Index (^SSEC) fell 5.3% with the Hang Seng (^HSI) dropping 2.2%.
As Breakout co-host Matt Nesto says in the attached video the concerns bedeviling the Chinese economy should be familiar to U.S. investors. "There are banks over there reporting a quadrupling in their non-performing loan ratios and that's why their hand-braking on the lending between each other."
Of course it was banks refusing to lend to one another due to worries over exposure to bad debt that caused a near siezure in the U.S. banking system in 2008 and more of the same over the last two years in Europe when exposure to Greece chilled overnight lending.
The reality of collapsing growth in China has crushed commodities. Copper is nearing 2 year lows, oil is sliding and the less said about the price of gold the better. Not coincidentally the rate on the U.S. 10-year Treasury spiked to over 2.6% in early trading.
In a world of uncertainty cash is king. About the only global asset seeing gains recently is the US dollar which is now at two-week highs. The perception is that the global central bankers may be losing their grip over the system; a prospect that makes sitting out the volatility increasingly appealing.
As one Wall Street wag put it earlier this morning,"we're going to need bigger sidelines."

If U.S. Kills Keystone Pipeline, The Chinese Win: Niall Ferguson

Energy is about to reenter the political arena.
Tomorrow President Obama will announce broad new climate initiatives to address global warming. And his administration is expected to make a final decision on the Keystone Pipeline later this summer or in early fall.
The proposed 1,700 mile $7 billion project, which would bring 700,000 gallons of oil from Alberta, Canada to the Gulf Coast each day, has been controversial since day one. Environmentalists call foul saying that extracting and producing tar sands oil emits greenhouse gasses and permanently damages the ecosystem. Others say that the pipeline would create jobs and make the U.S. less dependent on overseas oil.
Related: Fracking: Road to Energy Independence or Road to Ruin?
Niall Ferguson, historian and author of The Great Degeneration, believes that the pipeline extension would be good for the United States. “The energy revolution is a North American phenomenon,” he tells The Daily Ticker. “It’s a very positive thing- and I think the Canadians would justifiably be dismayed if in the end the whole Keystone project is shot down and that has strategic implications.”
Related: The $1.8 Trillion Tax You’ve Never Heard Of
Canada has alternatives, Ferguson explains, like China. “Let us be clear- there is a race on for commodities and particularly for fossil fuels and China is moving very fast.” He says the Chinese are our main strategic rivals.
So does Niall Ferguson believe that President Obama will eventually approve the pipeline extension? Watch the video above to find out!
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More From The Daily Ticker:
Are Average Investors Better Off Since Crisis? Top Regulator Says: Not Really
Can Cute Cats Make Sense of Wall Street?

Bond Fund Outflows Hit Record Level

Mutual and exchange-traded funds hemorrhaged a record volume of bonds in June, according to a fresh report by TrimTabs Investment Research, as investors fear the impact of a scaling back of the U.S.  Federal Reserve's bond purchasing program.

 "Fund investors are unloading bonds at a record pace. The combined outflow of $47.2 billion is the highest in any month on record, handily eclipsing the previous record of $41.8 billion in October 2008," said TrimTabs CEO David Santschi, in a report released on Monday. 
The global sell-off in bonds began on May 22, after the minutes of the Fed's policy meeting signaled that its bond-buying program-which has suppressed yields and boosted stocks-could soon be pared back. Fed Chairman Ben Bernanke echoed these comments at a press meeting last Wednesday, suggesting that asset purchases could be scaled back later this year, if economic data continued to show improvement.
(Read More: Bonds Could Lose $1 Trillion on Yield Spike: BIS )
Bond market outflows continued on Monday, pushing the yield on 10-year U.S. Treasurys  to 2.61 percent, close to a 2-year high. Yields on euro zone government bonds also surged upwards, with German 10-year bund yields hitting 1.78 percent, a high not seen since April 2012.
 "The strong response to even the suggestion that the Fed could eventually deliver less monetary stimulus shows the degree to which central bank liquidity has encouraged speculative activities that distort asset prices. Never before have central banks manipulated markets as intensely as they are now," said Santschi
 Santschi noted that the 5.0 percent loss the average bond fund has made since the start of May "pales in comparison" to the losses at the height of the financial crisis. 
"We would point out that many of today's bond fund holders have never experienced a rising interest rate environment. They probably do not realize the risks in the 'safe' bond investments they made in the past four years, amid the biggest credit bubble the world has ever seen. How will these investors react after they see their quarter-end statements in a few weeks?" he said.
(Read More: Stop 'Retarding' Economies With Loose Policy: BIS )
 Bill Blain, senior fixed income broker at Mint Partners, agreed that investors could be hit by hefty losses, due to the rapid swing from bull to bear market. 
"Many investors are nursing significant second quarter losses on the back of how quickly the underlying direction of markets swung from the bullish big ease into the shocked realization the 'Big Ease' may be over," Blain said in a morning note on Monday.
 Meanwhile, the Bank of International Settlements (BIS) warned of the downside of the market change for bondholders, in its annual report. BIS-which is known as the central bank for central banks-predicted that bondholders in the U.S. alone would lose more than $1 trillion (8 percent of U.S. gross domestic product), if yields across the maturity spectrum rose 3 percentage points. 
(Read More: Market Consensus: Get Ready for 3% Treasury Yields )
Blain added that European markets could be worst hit if the "Big Ease" comes to an end.
"Rates aren't at crisis level yet. But with peripheral economies still in recession, and potential bank losses barely covered by the ESM [European Stability Mechanism]'s new-found 60 billion euros ($78.7 billion) of possible bank rescue funds, you have to wonder what might happen when banks finally admit pretend-and-extend can't continue, and loan losses trigger new capital calls?" he said.
"All of which screams stay away from European banks-if the capital risks are rising, recession remains the most likely outcome and ESM funds are insufficient, then it's kind of obvious that bondholders will be on the hook... I've got a very bad feel about France and Spain."
-By's Matt Clinch. Follow him on Twitter @mattclinch81.

Dollar gains, shares fall on Fed, China worries

By Richard Hubbard
LONDON (Reuters) - The U.S. central bank's plans to scale back its stimulus and fears Chinese policy may be tightening sent the dollar sharply higher on Monday, while world shares extended last week's dismal performance.
The sell-off in stocks, bonds and commodities since the Federal Reserve signaled an end to the era of cheap money that has fuelled record rises in asset prices is seen having further to run.
"The prospect for a disorderly transition is there," said Josh Raymond, market strategist for City Index.
Fears of further market turmoil have been exacerbated by worries over China's growth outlook and the health of its banks after the country's central bank said liquidity in its financial system is "reasonable", despite high short term rates.
Amid the selling, yields on 10-year U.S. Treasury notes, a benchmark for global rates, hit a two-year high of 2.57 percent on Monday, supporting the dollar which added 0.4 percent against a basket major currencies to 82.66 (.DXY)
In share markets, MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> fell 1.8 percent to its lowest since early September. However, a bumper takeover in the telecoms sector helped European shares, with the FTSE Eurofirst 300 index (.FTEU3) of top shares down just 0.2 percent.
Data from Germany's Ifo institute later which is expected to show a gradual improvement in the euro area's largest economy could also soothe some of the concerns.
Commodity markets were also weaker. Copper dropped to its weakest level in 21 months, while oil slipped below $100 a barrel.
(Editing by Catherine Evans)

Public Banking TV: Want your trillions back? Better learn the basics

The 2013 Public Banking Conference has over 20 videos on YouTube with various experts explaining how at-cost public credit and monetary reform ends current economic emergencies:
The American public doesn’t have to know the details of banking anymore than they need to know the details of a sewer system. That said, Americans must know at least enough to demand public sanitation and public credit, or the consequences will be toxicity to all economic and social activity.
Do you know enough about public banking and monetary reform to demand it? If you want to call yourself a responsible citizen deserving to live in a free society, this is one of the very few trillion-dollar issues you must factually command in its basics.

You Are Involved In The Biggest Ponzi Scheme In The History Of The World

by Michael
America Is Broke
Did you know that you are involved in the most massive Ponzi scheme that has ever existed?  To illustrate my point, allow me to tell you a little story.  Once upon a time, there was a man named Sam.  When he was younger, he had been a very principled young man that had worked incredibly hard and that had built a large number of tremendously successful businesses.  He became fabulously wealthy and he accumulated far more gold than anyone else on the planet.  But when he started to get a little older he forgot the values of his youth.  He started making really bad decisions and some of his relatives started to take advantage of him.  One particularly devious relative was a nephew named Fred.  One day Fred approached his uncle Sam with a scheme that his friends the bankers had come up with.  What happened next would change the course of Sam’s life forever.
Even though Sam was the wealthiest man in the world by far, Fred convinced Sam that he could have an even higher standard of living by going into a little bit of debt.  In exchange for IOUs issued by his uncle Sam, Fred would give him paper notes that he printed off on his printing press.  Since the paper notes would be backed by the gold that Sam was holding, everyone would consider them to be valuable.  Sam could take those paper notes and spend them on whatever his heart desired.  Uncle Sam started to do this, and he started to become addicted to all of the nice things that those paper notes would buy him.
Fred took the IOUs that he received from his uncle and he auctioned them off to the bankers.  But there was a problem.  The IOUs issued by Uncle Sam had to be paid back with interest.  When the time came to pay back the IOUs, Uncle Sam could not afford to pay back the debts, pay the interest on those debts, and buy all of the nice things that he wanted.  So Uncle Sam issued even more IOUs than before so that he could get enough notes to pay off his debts.  As time rolled on, this pattern just kept on repeating.  Uncle Sam repeatedly paid off his old debts by taking out even larger new debts.
Meanwhile, since the notes that Uncle Sam was using were backed by gold, everyone else in the world decided to start using them to trade with one another.  This was greatly beneficial to Uncle Sam, because the rest of the world was glad to send him oil, home electronics, plastic trinkets and anything else that Uncle Sam wanted in exchange for his gold-backed notes.
Eventually, however, the rest of the world started to suspect that the number of gold-backed notes that Uncle Sam was issuing far exceeded the amount of gold that Uncle Sam actually had.  So the rest of the world started to trade in their notes for gold.
And by that time Uncle Sam definitely did not have enough gold to back up his notes.  Realizing that the scheme was starting to collapse, one day Uncle Sam announced that his notes would no longer be backed by gold.  But he insisted that the rest of the world should continue using his notes because he was the wealthiest man on the planet and everyone should just trust him.
And the rest of the world did continue to trust him, although it wasn’t the same as before.
As Uncle Sam got greedier and greedier, he started to issue IOUs and spend notes at a rate that nobody ever dreamed possible.  The great businesses that Uncle Sam had built when he was younger were starting to decline, and Uncle Sam started buying far more stuff from the rest of the world than they bought from him.  The rest of the world was still glad to take Uncle Sam’s notes because they used them to trade with one another, but they started accumulating far more notes than they actually needed.

Not sure exactly what to do with mountains of these notes, the rest of the world started to loan them back to Uncle Sam.  It eventually got to the point where Uncle Sam owed the rest of the world trillions of these notes.  Even though the notes were losing value at a rate of close to 10 percent a year, Uncle Sam somehow convinced the rest of the world to loan him notes at an average rate of interest of less than 3 percent a year.
One day Uncle Sam woke up and realized that the amount of debt that he owed was now more than 5000 times larger than it was when Fred had first approached him with this ill-fated scheme.  Uncle Sam now owed more than 16 trillion notes to his creditors, and Uncle Sam had already made future financial commitments of 202 trillion notes that he would never be able to pay.  Meanwhile, the notes that Fred had been printing up for Uncle Sam were now worth less than 5 percent of their original value.  Uncle Sam was becoming concerned because some of his other relatives were warning that this whole scheme was about to collapse.
Sadly, Uncle Sam did not listen to them.  Uncle Sam knew that if he admitted how fraudulent the financial scheme was, the rest of the world would quit sending him all of the things that he needed in exchange for his notes and they would quit lending his notes back to him at super low interest rates.
And if the rest of the world lost confidence in his notes and quit using them, Uncle Sam knew that his standard of living would go way, way down.  That was something that Uncle Sam could not bear to have happen.
When a financial crisis almost caused the scheme to crash in 2008, a desperate Uncle Sam went to Fred and asked for help.  In response, Fred started printing up far more notes than ever before and started directly buying up large amounts of IOUs from Uncle Sam with the notes that he was creating out of thin air.  Fred hoped that the rest of the world would not notice what he was doing.
It seemed to work for a little while, but then an even worse financial crisis came along.  Once again, Uncle Sam started issuing massive amounts of new IOUs and Fred started printing up giant mountains of new notes to try to fix things, but their desperate attempts to keep the system going were to no avail.  The rest of the world started to realize that they had been sucked into a massive Ponzi scheme, and they lost confidence in the notes that Uncle Sam was using.  Suddenly nobody wanted to lend notes to Uncle Sam at super low interest rates anymore, and people started asking for far more notes in exchange for the things that Uncle Sam wanted.
Uncle Sam’s standard of living dropped dramatically.  Since he could no longer flood the world with his notes, Uncle Sam could not continue to consume far, far more wealth than he produced.  Uncle Sam sunk into a deep depression as he watched the scheme fall apart all around him.
Uncle Sam had once been the wealthiest man on the entire planet, but now he was a broke, tired old man that was absolutely drowning in debt.  Unfortunately, once he was down on his luck the rest of the world did not have any compassion for him.  In fact, much of the rest of the world celebrated the downfall of Uncle Sam.
All of this could have been avoided if Uncle Sam had never agreed to Fred’s crazy scheme.  And once Uncle Sam made the decision to stop backing his notes with gold, it was only a matter of time before the scheme was going to collapse.
Does this little story sound crazy to you?  It shouldn’t.  The truth is that you are involved in such a scheme right now.  In case you haven’t figured it out, “Uncle Sam” is the United States, the “notes” are U.S. dollars, and “Fred” is the Federal Reserve.
Please share this story with as many people as you can.  Our country is headed for complete and total financial disaster, and we need to get people educated about this while there is still time.

The Bank Of International Settlements Warns The Monetary Kool-Aid Party Is Over

The Bank Of International Settlements Warns The Monetary Kool-Aid Party Is Over
23 June 2013, by Tyler Durden (zerohedge)


BIS: "Consider what would happen to holders of US Treasury securities (excluding the Federal Reserve) if yields were to rise by 3% across the maturity spectrum:

they would lose more than $1 trillion, or almost 8% of US GDP.

The losses for holders of debt issued by France, Italy, Japan and the United Kingdom would range from about 15 to 35% of GDP of the respective countries.

Yields are not likely to jump by 300 basis points overnight; but the experience from 1994, when long-term bond yields in a number of advanced economies rose by around 200 basis points in the course of a year,

shows that a big upward move can happen relatively fast.

And while sophisticated hedging strategies can protect individual investors, someone must ultimately hold the interest rate risk.

Indeed, the potential loss in relation to GDP is at a record high in most advanced economies.

As foreign and domestic banks would be among those experiencing the losses, interest rate increases pose risks to the stability of the financial system ..."

BIS says ‘pull the plug’ but Bernankesan can’t stop his QE because rates can’t rise and foreign wars have to be funded trough the printing press.

Marc Faber: Believing In Bernanke Is Like Believing In Santa Claus


Stewart also appeared to take a gentle dig at the opposition, who hope demonstrations planned for June 30 can force Mursi from power after just a year in office. It took Americans 100 years before a president was impeached for the first time, Stewart said, “For you guys to do it in one year, it’s very impressive.”

‘Egypt’s Jon Stewart’ Hosts the Real Thing

Funny Man Says Cairo Regime Should ‘Handle a Joke’

By Reuters

Jon Stewart took his politically engaged American satire to Cairo on Friday, appearing on a show hosted by the man known as “Egypt’s Jon Stewart”, who has faced investigation for insulting the president and Islam.
Among barbs aimed at Egypt’s ruling Islamists and others, Stewart praised host Bassem Youssef for taking risks to poke fun. “If your regime is not strong enough to handle a joke,” he said, “then you don’t have a regime.”
Youssef is a cardiologist whose online comedy clips inspired by Stewart’s “Daily Show” won him wild popularity and a prime-time TV show after the 2011 revolution that ended military rule. He paid tribute to his guest as a personal inspiration as the pair traded gags over Stewart’s impressions of a visit to Cairo.
Stewart in turn played down any difficulties his wit created for him in the United States, telling Youssef: “I tell you this, it doesn’t get me into the kind of trouble it gets you into. I get in trouble, but nowhere near what happens to you.”
With Egypt still in ferment and elected Islamist President Mohamed Mursi facing off against liberals who fear he plans to smother personal freedoms, Youssef was released on bail after being questioned in March over alleged insults to Mursi and the channel he appears on was threatened with losing its licence.
Criticising such moves, which have also drawn reproaches for Egypt from the U.S. government, Stewart said: “A joke has never shot teargas at a group of people in a park. It’s just talk.
“What Bassem is doing … is showing that satire can still be relevant, that it can carve out space in a country for people to express themselves. Because that’s all democracy is.”
He took aim at Mursi’s controversial decision this week to name a member of a hardline Islamist movement blamed for a massacre of tourists at Luxor in the 1990s as governor of that city. Having been brought into the studio hooded and presented as a “spy”, he spoke a few words in Arabic before saying Egypt’s president had honoured him: “I am now the mayor of Luxor.”
Stewart also appeared to take a gentle dig at the opposition, who hope demonstrations planned for June 30 can force Mursi from power after just a year in office. It took Americans 100 years before a president was impeached for the first time, Stewart said, “For you guys to do it in one year, it’s very impressive.”
Perhaps the biggest laugh in the studio, though, was for a simple crack at Egypt’s perennial traffic chaos: “I know this is an ancient civilisation,” he said. “Have you thought about traffic lights?”

Libor Case Ensnares More Banks

U.K. Prosecutors Allege Staff From J.P. Morgan, Deutsche Bank and Others Tried to Fix Rates

Tom Hayes, a former UBS and Citigroup trader, has been charged with eight counts of fraud as part of the U.K. investigation into the alleged manipulation of the London interbank offered rate. David Enrich looks at the charges as the whole probe into the rate scandal spreads globally.
LONDON—Employees of some of the world's largest financial institutions conspired with a former bank trader to rig benchmark interest rates, British prosecutors alleged Thursday, a sign authorities have their sights on an array of banks and brokerages.
The U.K.'s Serious Fraud Office this week charged former UBS AG UBSN.VX +0.12% and Citigroup Inc. C -2.15% trader Tom Hayes with eight counts of "conspiring to defraud" in an alleged attempt to manipulate the London interbank offered rate, or Libor. Mr. Hayes appeared in a London court Thursday, where prosecutors for the first time detailed their allegations against him, including a list of institutions whose employees Mr. Hayes allegedly conspired with.
Mr. Hayes, who was charged with similar offenses by the U.S. last December, hasn't entered a plea to either country's charges. He wrote in a January text message to The Wall Street Journal that "this goes much much higher than me."
London News Pictures/Zuma Press
Ex-UBS trader Tom Hayes leaves a British courthouse Thursday.
The charges read in court Thursday accuse Mr. Hayes of allegedly conspiring with employees of eight banks and interdealer brokerage firms, as well as with former colleagues at UBS and Citigroup. Each of the eight charges accused Mr. Hayes of "dishonestly seeking to manipulate [Libor]…with the intention that the economic interests of others would be prejudiced and/or to make personal gain for themselves or another."
The banks include New York-based J.P. Morgan Chase JPM -0.99% & Co.; Germany's Deutsche Bank DBK.XE -0.30% AG; British banks HSBC Holdings HSBA.LN +0.78% PLC and Royal Bank of Scotland Group RBS.LN +1.04% PLC; and Dutch lender Rabobank Groep NV. Prosecutors alleged Mr. Hayes also worked with employees of ICAP IAP.LN -0.25% PLC, Tullett Prebon TLPR.LN -0.39% PLC and R.P. Martin Holdings Ltd., which are London-based interdealer brokers that serve as middlemen between bank traders.
An ICAP spokeswoman said the firm has provided information to British prosecutors and continues to cooperate. A Rabobank spokesman said the bank continues to cooperate with investigators and is likely to eventually reach a settlement. In a statement, Tullett said it is "cooperating fully" with prosecutors' requests for information. Representatives for the rest of the named institutions declined to comment.
The list of banks and brokerages named at Thursday's court hearing underscores the breadth of institutions that remain under government scrutiny. So far, only three banks—UBS, RBS and Barclays BARC.LN +0.80% PLC—have reached settlements with U.S. and British authorities. Authorities hope to hammer out settlements with additional institutions, including Rabobank, in coming months, according to a person familiar with the investigation.
Associated Press
Deutsche Bank staff are among those under the glare of the U.K. probe into alleged interest-rate fixing. Pictured, the bank's offices in Frankfurt.
The list that prosecutors read Thursday included at least one institution that has said it wasn't involved in the Libor scandal. After UBS settled rate-rigging allegations last December, Tullett Prebon spokeswoman Charlotte Kirkham said the firm didn't help UBS manipulate rates and that no Tullett employees had been disciplined in connection with Libor. In April, Tullett said it stood by that statement.
In a statement Thursday, Tullett disclosed for the first time that it has been asked to provide information to various regulators and government agencies in connection with Libor investigations. In addition to saying it is cooperating with the requests, the firm reiterated it hasn't been informed that it or its brokers are under investigation in relation to Libor. A spokesman declined to comment further.
The interdealer brokers' alleged involvement in attempts to rig Libor has rocked the industry in recent months. Two R.P. Martin employees were arrested along with Mr. Hayes in December but not charged. The U.S. Justice Department and the Commodity Futures Trading Commission also are investigating brokers as part of their Libor probes, according to people familiar with those investigations.
Mr. Hayes, a 33-year-old British citizen, was a derivatives trader in Tokyo from 2006 through 2010, the period during which prosecutors allege he attempted to manipulate Libor. He is the only person the Serious Fraud Office has charged in their nearly yearlong Libor investigation, although an agency spokesman said this week that more arrests and charges are possible.
Mr. Hayes, wearing beige trousers and an untucked, navy dress shirt, didn't respond to the charges at court Thursday. Standing behind a glass partition in the courtroom, he was mostly silent aside from telling the judge his name, address and date of birth. At one point, the judge asked him to take his hands out of his pockets.
During his days as a trader, Mr. Hayes struck colleagues as intelligent but painfully shy, earning him the nickname "Rain Man" in reference to a character in the 1988 film. When he and his lawyer left the courthouse Thursday, they were greeted by more than a dozen photographers and cameramen, who chased the pair across a busy London street.
Write to David Enrich at
A version of this article appeared June 21, 2013, on page C1 in the U.S. edition of The Wall Street Journal, with the headline: Libor Case Ensnares More Banks.

Obama Set to Kill U.S. Jobs Market with 30 Million Workers

Obama Immigration Bill will allow Illegal Workers to Displace 30 Million Legal American Jobs

U.S. Sen. Charles Schumer (D-NY) (L) talks with one of his staff members during a markup session for the immigration reform legislation now before the Senate Judiciary Committee in the Hart Senate Office Building on Capitol Hill May 20, 2013 in Washington, DC.
WASHINGTON, DC – MAY 20: U.S. Sen. Charles Schumer (D-NY) (L) talks with one of his staff members during a markup session for the immigration reform legislation now before the Senate Judiciary Committee in the Hart Senate Office Building on Capitol Hill May 20, 2013 in Washington, DC. The Judiciary Committee is hoping to wrap up work on the landmark immigration reform bill this week after wading through the 300 amendments that were filed to the bipartisan bill. (Photo by Chip Somodevilla/Getty Images)
by Avalon
June 19, 2013
Contact your U.S. Representatives and U.S. Senators to take action and voice your opinion on this critical issue.
With the decline in employment, rather than implement ways to increase growth in the economy, the Obama administration is doing just the opposite. It is clear to so many people now that Obama was selected by the Elite to bring about the destruction of the United States. No decision he has made has had a single positive impact to our country – not one.
Now, the Obama administration is poised to roll in the Trojan Horse into the U.S. Economy and the timing couldn’t be better. With virtually 20% unemployment and 45 million people on Food Assistance, it’s time to bring another 30 million workers into the Jobs Market.
The current Immigration legislation would, in effect, legalize 30 million non–legal workers who will displace current workers in a failing economy. People are barely able to make ends meet in most cases and the additional burden of supporting these 30 million workers, some of which may find employment, with Financial Assistance of some kind will bankrupt most states. The individual states are failing and many are bankrupt, according to a ZeroHedge article 32 States Now Officially Bankrupt: $37.8 Billion Borrowed From Treasury To Fund Unemployment; CA, MI, NY Worst, the situation is an emergency. Quoting from the article:
Courtesy of Economic Policy Journal we now know that the majority of American states are currently insolvent, and that the US Treasury has been conducting a shadow bailout of at least 32 US states. Over 60% of Americans receiving state unemployment benefits are getting these directly from the US government, as 32 states have now borrowed $37.8 billion from Uncle Sam to fund unemployment insurance. The states in most dire condition, are, not unexpectedly, the unholy trifecta of California ($6.9 billion borrowed), Michigan ($3.9 billion), and New York ($3.2 billion).
Forget what the Mainstream Corporate Media is propagandizing – they are controlled by the Banking Sector who stands to gain from this influx of immigrants, cheap labor and indentured servants. The article was posted by Tyler Durden on 05/21/2010 and these facts are being totally ignored.
According to data:
Many local governments across the U.S. face steep budget deficits as they struggle to pay off debts accumulated over a number of years. As a last resort, some have filed for bankruptcy.
Governing is tracking the issue, and will update this page as more municipalities seek bankruptcy protection.
Overall, bankrupt municipalities remain extremely rare. A Governing analysis estimated only one of every 1,668 eligible general-purpose local governments (0.06 percent) filed for bankruptcy protection over the past five years. Excluding filings later dismissed, only one of every 2,710 eligible localities filed since 2008.
Most recently, the Hardeman County Hospital District in Quanah, Texas, announced it was seeking bankruptcy protection in March. The majority of Chapter 9 bankruptcy filings have been submitted by utility authorities and other narrowly-defined special districts. In Omaha, Neb., nine Sanitary and Improvement Districts filed for bankruptcy in recent years.
It’s also important to note that only about half of states outline laws authorizing municipal bankruptcy. View our bankruptcy laws map for each state’s policies.
The article, Rand Paul Makes Immigration Move, by Alexander Bolton (06/18/13 05:00 AM ET) describes the political situation in detail, highlighting important practical measures that exert control over immigration and citizenship. Quoting from article:
Paul’s most ambitious proposal would eliminate the pathway to citizenship for 11 million illegal immigrants and lift the caps on guest workers. 
It would provide immigrant workers to employers who can demonstrate need, but immigrants would have to apply for legal permanent residency and citizenship through the existing lines of their native countries. 
Paul is expected to file that amendment this week.
Another measure, Paul’s “Trust but Verify” amendment, would give Congress — and not Homeland Security Secretary Janet Napolitano — ultimate authority on deciding when the southern border is secure. 
Under this plan, immigration reform would not proceed until Congress votes on whether several criteria have been met.
These objectives would include the completion of a comprehensive system to track visa entries and exits at all points of entry — not just air and sea ports as mandated by the broader bill — and law enforcement achieving a 95 percent apprehension rate of illegal entrants. 
Interestingly, The Heritage Foundation’s study 2013 Index of Economic Freedom, states that Mexico’s economy is expected to do better in coming years as explained and graphed at the site (pdf).
Mexico’s economic freedom score is 67.0, making its economy the 50th freest in the 2013 Index. Its score is 1.7 points better than last year, reflecting notable improvements in investment freedom, trade freedom, and monetary freedom. Mexico is ranked 3rd out of three countries in the North America region, but its score is well above the world average.
The Mexican economy has shown a moderate degree of resilience in the face of a challenging global economic environment. Reform efforts have continued in many areas related to economic freedom. Implementation of policies intended to support open markets and encourage a vibrant private sector has enhanced investment flows and the vitality of entrepreneurship, although growth remains sluggish. The 2012 labor reform bill, which aimed to increase labor market flexibility, was weakened by amendments to protect the country’s powerful unions. Source: 2013 Index of Economic Freedom: Mexico
Even News of India, in an article titled, OECD: Mexico’s economy to grow at faster clip in 2014, reports that Mexico’s economy is on the rebound – despite the Drug Cartel & Banking Cartel Money Laundering and destruction of security and stability in the region.
Proving there’s been an Obama administration policy of pro illegal immigration is the resignation of Immigration and Customs Enforcement Director John Morton as reported in the USA TODAY article Obama’s immigration enforcement director to resign by Alan Gomez posted June 17, 2:42 p.m.  The interesting thing to note here is John Morton is going to work for Capitol One, known for credit financing – coincidence?
He will be moving to Capital One, the Fortune 500 financial services company, and be based in its McLean, Va., headquarters as head of the company’s compliance office, the company said in a statement.
Morton may best be remembered for a policy plan he authored in 2011 — known in immigration circles as the “Morton Memo” — which outlined a new strategy for determining whom the agency should deport.
In the memo, Morton explained that ICE has a limited amount of money and resources it can dedicate to deporting any of the 11 million unauthorized immigrants living in the country. So he ordered his agents to use “prosecutorial discretion” to focus deportation proceedings on certain groups of unauthorized immigrants, including those who pose a national security threat, who have extensive criminal backgrounds and recent border-crossers.
That strategy was dubbed “amnesty by any means” by the Center for Immigration Studies, a group that advocates for lower levels of immigration, and had already earned him a vote of “no confidence” from the National ICE Council, the biggest labor union for ICE employees.
“He was the architect of the administration’s non-enforcement policy,” said Ira Mehlman of the Federation for American Immigration Reform. “He was toeing the administration’s line rather than allowing them to do the jobs they were sworn to do.”
Attempting to inject sanity into the Immigration Debate is Senator Jeff Sessions, who posted this video on the SenatorSessions YouTube channel on June 18, 2013 titled Sessions On Immigration Bill: Doesn’t Congress Owe Its Allegiance To U.S. Workers?

Sessions On Immigration Bill: Doesn’t Congress Owe Its Allegiance To U.S. Workers?
Published on Jun 18, 2013
26 views on June 19, 2013 at 8:00 AM EST
Sessions, Jeff - (R–AL)
Reforming America’s Broken Immigration System
To HIGHLIGHT the corrupt politics at work, it’s interesting to read closely the New York Times article Immigration Law Changes Seen Cutting Billions From Deficit posted by Ashley Parker on June 18, 2013.
The report estimates that in the first decade after the immigration bill is carried out, the net effect of adding millions of additional taxpayers would decrease the federal budget deficit by $197 billion. Over the next decade, the report found, the deficit reduction would be even greater — an estimated $700 billion, from 2024 to 2033. The deficit reduction figures for the first decade do not take into account $22 billion in the discretionary spending required to implement the bill, however, making the savings slightly lower.
The report was immediately seized on by backers of the bill as a significant boost to its prospects. Senator Charles E. Schumer, Democrat of New York, one of the bill’s authors, said the report “debunks the idea that immigration reform is anything other than a boon to our economy.”
The budget office also found that in the next decade the legislation would lead to a net increase of about 10.4 million permanent legal residents and 1.6 million temporary workers and their dependents, as well as a decrease of about 1.6 million unauthorized residents.
Conservatives had expected that an analysis of the second decade — when immigrants would begin to qualify for federal benefits — would bolster their argument that the costs of an immigration overhaul were unwieldy, but that turned out not to be the case in the economic analysis.
Senator Jeff Sessions, Republican of Alabama, a leading opponent of the bill, said that its authors used “scoring gimmicks” in order to conceal the “true cost from taxpayers.” “As a result, the score effectively conceals some of the biggest long-term costs to taxpayers contained in this legislation, including providing illegal immigrants with Medicaid, food stamps and cash welfare,” Mr. Sessions said.
The views expressed in articles are the sole responsibility of the author(s) and do not necessarily reflect those of the will not be held responsible or liable for any inaccurate or incorrect statements contained in articles. reserves the right to remove articles from the website. Posted 06–19–2013 at 10:10 AM EST
Avalon is an Investigative Journalist and Strategist working for 

The Recovery Is a Sham

As usual the
Federal Reserve media reaction machine has fallen for a poorly executed
head fake. It has been fooled by this move many times in the past
and for its efforts it has tackled nothing but air. Yet right on
cue, it took the bait once more. Somehow the takeaway from Wednesday’s
release of the June Fed statement and the Bernanke press conference
is that the Central bank is likely to begin scaling back, or “tapering,”
it’s $85 billion per month quantitative easing program sometime
later this year, and that the program may be completely wound down
by the middle of next year.
Although this
scenario is about as likely as an NSA-sponsored ticker tape parade
for whistle blower Edward Snowden, all of the market segments reacted
as if it were a fait accompli. The stock market, convinced that
it will lose the support of ultra-low, long-term interest rates,
and the added consumer spending that results from a nascent housing
bubble, sold off in triple digits. The bond market, sensing that
its biggest and busiest customer will be exiting the market, followed
a similarly negative trajectory. The sell -off in government and
corporate debt pushed yields up to 21 month highs. In foreign exchange
markets the dollar rallied off its four-month lows based on the
belief that Fed tightening will support the currency. And lastly,
the gold market, sensing that an end of quantitative easing would
eliminate the inflationary fears that have partially fueled gold’s
spectacular rise, sold off nearly five percent to a new two and
a half year low.
All of this
came as a result of Bernanke’s mild commitments to begin easing
back on permanent QE sometime later this year if the economy continued
to improve the way he expected. The Chairman did not really elaborate
of what types of improvements he had seen, or how much farther those
unidentified trends would need to go before he would finally pull
the trigger. He was however careful to point out that any policy
shift, be it for less or more quantitative easing, would not be
dependent on incoming data, but on the Fed’s interpretation of that
data. By stressing repeatedly that its data goalposts were “thresholds
rather than triggers” the Fed gained further latitude to pursue
any stance it chooses regardless of the data.
Yet the mere
mention that tapering was even possible, combined with the Chairman’s
fairly sunny disposition (perhaps caused by the realization that
the real mess will likely be his successor’s problem to clean up)
was enough to convince the market that the post-QE world was at
hand. This conclusion is wrong.
Although many
haven’t yet realized it, the financial markets are stuck in a “Waiting
for Godot” era in which the change in policy that all are straining
to see, will never in fact arrive. Most fail to grasp the degree
to which the “recovery” will stall without the $85 billion per month
that the Fed is currently pumping into the economy.
What exactly
has convinced the Fed that the economy is improving? From what I
can tell, the evidence centered on the rise in stock and real estate
prices, and the confidence and spending that follow. But inflated
asset prices are completely dependent on QE and are likely to reverse
course even before it is removed. And while it is painfully clear
that expectations about QE continuance have made a far bigger impact
on the stock, bond, and real estate markets than any other economic
data points, many must be assuming that this dependency will soon
Those who hold
this belief have naively described QE as the economy’s “training
wheels,” (in reality the program is currently our only wheels.)
They are convinced that the kindling of QE will inevitably ignite
a fire in the larger economy. But the big lumber is still too dampened
by debt, government spending, regulation, and high asset prices
to catch fire. So all we have gotten is smoke. A few mirrors supplied
by the Fed merely completed the illusion. The larger problem of
course, is that even though the stimulus are the only wheels, the
Fed must remove them anyway as we are cycling toward the edge of
a cliff.
Although Bernanke
dodged the question in his press conference, the Fed has broken
the normal market for mortgage backed debt. While it’s true that
the Fed only owns 14% of all outstanding MBS (the “small fraction”
he referred to in the press conference) it is by far the largest
purchaser of newly issued mortgage debt. What would happen to the
market if the Fed were to stop buying? There are no longer enough
private buyers to soak up the issuance. Those who do remain would
certainly expect higher yields if the option of selling to the Fed
was of table. Put bluntly, the Fed is the market right now and has
been for years.
A clear-eyed
look at the likely consequences of a pull-back in QE should cause
an abandonment of the optimistic assumptions behind the Fed’s forecast.
Interest rates are already rising rapidly based simply on the expectation
of tapering. Image how high they would soar if the Fed actually
tried to sell some of the mortgages it already owns. But the fact
is, the mere anticipation of such an event has already sent mortgage
rates north of 4%, and without more QE from the Fed in the could
soon exceed 5%. Such an increase would deliver a devastating blow
to the housing market. More foreclosure will hit just as higher
home prices and mortgage rates price legitimate buyers out of the
market. Housing prices will fall to new post bubble lows, sinking
the phony recovery in the process. The wealth effect will work in
reverse, spending and confidence will fall, unemployment will rise,
and we will be back in recession even before the Fed begins to taper.

In fact, the
back-up in mortgage rates seen over the last month has already produced
pain in the financial world, with banks reporting a rapid collapse
in refinancing applications. With personal income and wage growth
essentially stagnant, individual buyers are extremely dependent
on the affordability that ultra-low rates provide. A 50% increase
in mortgage rates (an increase from 3.25% to 5%) would price a great
many buyers out of the market. Higher rates would also cool much
of the housing demand that has been coming from the private equity
funds that have been a huge factor in pushing up real estate prices
in recent years. Falling home prices would likely trigger a new
wave of defaults and housing related bankruptcies that had plunged
the economy into recession five years ago.
A similar dynamic
would occur in the market for U.S. Treasury debt. Despite Bernanke’s
assurances that the Fed is not monetizing the government’s debt,
the central bank has been buying nearly 70% of the new issuance
in recent years. Already rates on 10 year treasury debt have crept
up by more than 50% in less than two months, to over 2.4%. Any actual
decrease or cessation in buying (let alone the selling that would
be needed to unwind the Fed’s multi-trillion dollar balance sheet)
would place the Treasury market under extreme pressure. Since low
rates are the life blood of our borrow and spend economy, it is
highly likely that higher rates will lead directly to lower stock
prices, lower GDP growth, and higher unemployment. Since rising
asset prices, and the confidence and spending they produce, are
the basis for Bernanke’s rosy forecast, new lows in house prices
and a bear market in stocks will quickly reverse those forecasts.

Higher interest
rates and a slowing economy will be a a disaster for Federal budget
deficits. An increase in unemployment and a decrease in tax will
hit just as rising rates make it more expensive for the Fed to finance
new and maturing debt. Also the profit checks Fannie and Freddie
have been paying the Treasury will turn into bills for losses, as
a new wave of foreclosures comes crashing down.
It’s fascinating
how the goal posts have moved quickly on the Fed’s playing field.
Months ago the conversation focused on the “exit strategy” it would
use to unwind the trillions of bonds and mortgages that it had accumulated
over the last few years. Despite apparent improvements in the economy,
those discussions have given way to the more modest expectations
for the “tapering” of QE. I believe that we should really be expecting
a “tapering” of the tapering conversations.
I expect that
the Fed will continue to pantomime that an Exit Strategy is preparing
for a grand entrance, even as their time line and decision criteria
become ever more ambiguous. The Fed’s next big announcement will
likely be to increase, not diminish QE. After all, Bernanke made
clear in his press conference that if the economy does not perform
up to his expectations, he will simply do more of what has already
Of course,
when the Fed is forced to make this concession, it should be obvious
to a critical mass that the recovery is a sham. Investors will realize
that yeas of QE have only exacerbated the problems it was meant
to solve. When the grim reality of QE infinity sets in, the dollar
will tank, gold will soar, and the real crash will finally be upon
us. Buckle up.
22, 2013
© 2012 Euro Pacific Capital

Obama: My Plan Makes Electricity Rates Skyrocket

Marc Faber – Likes Gold More Than Equities

“If you believe that [Bernanke] means what he says, then you believe in Father Christmas.”   “we are going to see QE99,”  ”the S&P could drop 20-30%from the recent highs - easily.” ”The only thing that I know is that I want to own some physical gold because I don’t want all of my assets in financial assets.”
June 21 (Bloomberg) — Marc Faber, publisher of the Gloom, Boom & Doom report, talks about the stock, bond and commodity markets. He speaks with Trish Regan and Tom Keene on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

Banks present crisis plan to the Fed: WSJ

(Reuters) - U.S. banks have given a proposal to federal regulators on how to pay for restructuring the country's too-big-to-fail institutions in the event of a future crisis, the Wall Street Journal reported, citing people familiar with the conversations.
The Journal said the proposal, given to the U.S. Federal Reserve at a private meeting on May 22, is an effort by banks to pre-empt tougher rules from officials, who believe banks still could pose a threat to financial stability in a crisis.
According to the plan, the largest financial services holding companies would maintain a certain amount of debt and equity that would be used to prop up any failed bank subsidiary seized by regulators.
Some banks might even be forced to issue expensive long-term debt, according to the newspaper.
In the presentation, the banks said they each would agree to hold combined debt and equity equal to 14 percent of their risk-weighted assets, the Journal said.
For the six biggest U.S. banks that may have to hold an additional buffer of capital because of international guidelines, the total could be as high as 15 percent to 16.5 percent, the people told the Journal.
Currently, Wells Fargo (WFC.N) has a ratio of existing debt and equity of 14 percent, JPMorgan Chase (JPM.N) has 18.4 percent, while Bank of America (BAC.N) and Citigroup (C.N) have 20.2 percent and 22.1 percent each respectively, the Journal said, citing Goldman Sachs (GS.N) estimates.
The U.S. Federal Reserve could not immediately be reached for comment by Reuters outside of regular U.S. business hours.
Regulators have not yet responded to the bank's proposal and could reject it in favor of their own plan. However, they have favored banks issuing more debt because it can provide liquidity for a failing bank while government officials replace senior management and fix problems, the Journal said.
(Reporting by Sakthi Prasad in Bangalore; Editing by Richard Borsuk)

Asia shares slide on China worries, Fed outlook; dollar firms

By Chikako Mogi
TOKYO (Reuters) - Chinese shares dragged Asian bourses to a fresh 9-1/2-month low on Monday as investors worried about Beijing's economic and financial stability and markets scrambled to price in the Federal Reserve's plan to slow its stimulus drive later in 2013.
European stocks were seen consolidating after last week's losses, with financial spreadbetters predicting London's FTSE 100 (.FTSE), Paris's CAC-40 (.FCHI) and Frankfurt's DAX (.GDAXI) would open little changed.
But a 0.6 percent drop in U.S. stock futures pointed to a weak Wall Street open. (.L)(.EU)(.N)
MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> fell 1.8 percent to its lowest since early September, after posting its worst week since May 2012 with a drop of 4.5 percent last week. Most of the region's stock indexes are now well into oversold territory.
China bank shares led the downward spiral after official news reports at the weekend suggested Beijing would continue to address the risks of shadow banking, which was behind the central bank's withholding of funds to the money market last week.
The People's Bank of China bank exacerbated nervousness by saying that liquidity in the country's financial system is "reasonable." It has also pledged to "fine tune" existing "prudent" monetary policy.
Hong Kong shares (.HSI) fell 2.4 percent and Shanghai shares (.SSEC) plummeted 5.4 percent. The Shanghai financials sub-index (.SSEFN) was down 7.1 percent, headed for its worst single day loss since November 2008.
"I think the market is expecting 'fine-tuning' to mean a tightening of liquidity moving forward, especially after the way official media talked about shadow financing over the weekend," said Cao Xuefeng, Chengdu-based head of research at Huaxi Securities.
China's volatile money market rates kept investors jittery about the intentions of the Chinese authorities, as the recent spike in market rates compounded fears of a sharper-than-expected slowdown in the world's second-largest economy.
China's weighted average overnight bond repurchase rate, a measure of the cost of funds, eased to 6.64 percent from Friday's close at 8.89 percent. The rate had been around 4 percent for much of 2013 until this month.
"The Chinese authorities are purposefully doing this to let investors be aware of the pain that must accompany the structural reforms the government is trying to pursue, so investors shouldn't be complacent about the government avoiding a hard landing," said Xiao Minjie, an independent economist in Tokyo.
Australian shares (.AXJO) tumbled 1.5 percent, dragged by concerns about slowing growth in China, its main export market.
A weaker yen helped buoy Japan's Nikkei stock average (.N225) in early trade, but the Nikkei surrendered gains and ended down 1.3 percent as investors remained skittish after last week's global market rout and the fresh tumble in Chinese stocks.
"The Chinese market changed the mood completely," said Kyoya Okazawa, head of global equities and commodity derivatives at BNP Paribas in Tokyo. "Global markets have just started pricing in the end of China's high-growth period and investors are backing away from emerging markets."
Going into the Fed's June meeting, investors continued to take money out of emerging-market fund groups in the week ending June 19, EPFR Global said on Friday.
Asian credit markets were also unsettled, with the spread on the iTraxx Asia ex-Japan investment-grade index widening by 20 basis points.
The dollar outshone all other asset classes and strengthened broadly, in turn weighing on dollar-based commodities prices, on the prospect of rising yields and an improving U.S. economy which has allowed the Fed to suggest a major policy reversal.
Financial markets sold off last week after Fed Chairman Ben Bernanke said that with the U.S. economy showing signs of recovery, the central bank may start scaling back its huge monthly bond-buying plan which was aimed at keeping bond yields down and supporting the economy.
The Fed's strong accommodative stance has also encouraged investment in riskier assets such as shares.
The dollar rose 0.6 percent against the yen at 98.48, steadily moving away from its 10-week low of 93.75 yen hit earlier in the month.
Traders said the prospect of diverging yield directions will support the dollar against the yen.
U.S. Treasuries extended last week's dismal performance, with the 10-year yield rising to 2.5928 percent to a near two-year high, after the benchmark yield posted its biggest weekly rise since November 2001 last week.
"A better economic outlook will eventually need to be priced into the short end of the yield curve. This suggests that there is a catch-up trade for the USD versus low-yielding currencies (such as the yen)," Barclays Capital said in a research note.
Against a basket of major currencies, the dollar index (.DXY) rose 0.4 percent to a two-week high after ending last week up 2.2 percent for its biggest weekly gain since early November, 2011.
Spot gold slumped 1.2 percent to $1,281.39 an ounce, approaching its lowest since September 2010 of $1,268.89 touched on Friday. (GOL/)
U.S. crude futures fell 0.4 percent to $93.32 a barrel and Brent shed 0.6 percent to $100.35. (O/R)
(Additional reporting by Tomo Uetake in Tokyo and Clement Tan in Hong Kong; Editing by Eric Meijer)