Thursday, September 5, 2013

Investors seek balance between central banks, Syria and rebounding economy

By Richard Hubbard
LONDON (Reuters) - European government bond yields were at near 1-1/2 year highs on Thursday and the dollar clung close to six week peaks on a combination of a better global economic outlook, nervousness about Syria and pending central bank meetings.
Russia and China, meanwhile, both warned the U.S. ahead of the G23 meeting in St Petersburg that the end of the Federal Reserve's bond-buying program could have a profound impact on the global economy.
The European Central Bank and Bank of England were both expected to leave interest rates unchanged, but investors were looking for statements reiterating pledges to keep rates low given recent stronger economic data.
ECB President Mario Draghi "is going to want talk down the prospects of recovery a little bit and get people's feet on the ground," said Will Hobbs, head of equities strategy at Barclays Wealth.
European money market rates have been moving higher recently in response to stronger economic data and on expectations the Federal Reserve is set to begin unwinding its stimulus, possibly as soon as later this month.
Analysts see little options for the bank other than just maintaining a soft tone in communication, sending German 10-year bond yields have risen to 1-1/2 year highs of 1.981 percent.
Earlier the Bank of Japan voted unanimously to maintain its monetary stimulus, while declaring the world's third-largest economy was on a recovery path, sending the yen briefly above 100 to the dollar, a six week low.
In the emerging markets India's new central bank chief began his tenure in spectacular fashion by unveiling measures to support the currency and the banking sector that sent the main NSE (.NSEI) share index up 3.3 percent and boosting the rupee.
The rupee rose to as high as 65.53 per U.S. dollar, pulling well away from a record low around 68.85 set last week.
The gain in Indian stocks and a slight rise in Tokyo's shares after the BOJ decision helped lifted Asia equity prices <.miapj0000pus> by 0.6 percent, to near a three week high.
European share markets (.FTEU3) were up 0.5 percent in early trade, gaining ground for the second day in a row and hitting its highest level since August 27.
"People are waiting for cues from the central banks, and there is just no real trend on the market at the moment," said Guillaume Dumans, co-head of research firm 2Bremans.
The euro last traded at $1.3185, down slightly against the stronger dollar and not far from a six-week low of $1.3138.
MSCI world equity index <.miwd00000pus> was up 0.1 percent following a second day of gains on Wall Street spurred by another set of upbeat U.S. data, which included the strongest monthly rise in car sales during August since October 2007.
"Strong car sales in the U.S. again lifted market confidence in the economy, and lifted expectations that the U.S. Federal Reserve will start cutting back its stimulus this month," said Isao Kubo, an equity strategist at Nissay Asset Management.
Markets remained cautious about Syria as a possible U.S. military strike moved one step closer after a Senate committee voted in favor of action, clearing the way for a vote in the full Senate, likely next week.
The possible military strike against Syria in reaction to its alleged use of chemical weapons and the Fed's decision to reduce its stimulus were expected to dominate discussions at a meeting of leaders from the Group of 20 developed and developing economies in St Petersburg.
In a note prepared for the meeting the IMF warned that emerging countries were particularly vulnerable to a tightening of U.S. monetary policy.
It urged strengthened global action to revitalize growth and better manage risks, adding some downside risks have become more prominent.
U.S. President Barack Obama meanwhile was expected to use the meeting to win international backing for a military strike against Syria and this was keeping a floor under oil markets
Brent crude rose 56 cents to $115.47, while U.S. oil was up 64 cents to $107.97.
(Additional reporting by Blaise Robinson. Editing by Jeremy Gaunt)

India markets rally, new RBI chief fuels confidence but faces some skeptics

By Abhishek Vishnoi and Swati Bhat
MUMBAI (Reuters) - The rupee rallied and shares surged on Thursday after India's new central bank chief unveiled measures to support the ailing currency, providing a shot of confidence for investors unnerved by the country's worst economic crisis in two decades.
However, amid the euphoria over Reserve Bank of India Governor Raghuram Rajan's energetic Wednesday debut, investors warned he cannot by himself repair an economy mired by slowing growth and a record high current account deficit that has helped fuel a drop in the rupee of as much as 20 percent this year.
Rajan faces pressure from investors to roll-back the central bank's controversial steps to defend the rupee by draining cash from the market and raising short-term interest rates at a time when investors are clamoring for ways to boost growth.
The government has struggled to push through politically tough reforms needed to fix the economy, and elections due by next May raise the prospect of expensive populist spending that could threaten the country's sovereign credit rating, which is one notch above junk status.
"This is certainly not the bottom. Rajan means business, but most of his measures are just statements of intent, especially in the light of government finances being so precarious," said G. Chokkalingam, managing director and chief investment officer at Centrum Wealth Management.
"The continued deceleration of the industrial economy, the fiscal conditions, and the Fed tapering worries will continue to weigh," he said.
On Thursday, however, skepticism was trumped by euphoria over Rajan, a prominent former chief economist at the International Monetary Fund, who unexpectedly unveiled a flurry of proposals in his first day at the helm of the central bank.
The rupee rose as much as 2.3 percent to 65.53 per dollar, well off the record low 68.85 hit on August 28, when it was down more than 23 percent from its 2013 peak.
The main NSE (NSI:^NIFTY) share index rose as much as 3.3 percent, propelled by lenders such as HDFC Bank (HDBK.NS), which surged after new steps outlined by Rajan that included increasing overseas borrowing limits for banks. But the index was still down more than 10 percent from its May highs.
The new measures to prop up the rupee included providing exporters and importers more flexibility in hedging their forward currency contracts, as trading firms had long complained about regulation that left them unable to quickly cope with rapid currency movements.
Rajan faces difficult decisions ahead, including navigating uncertain global conditions marked by rising military tension over Syria, which is pushing up India's oil import bill, and the prospect of an end to U.S. monetary stimulus.
The RBI has been the main line of defense against the rupee so far, with previous Governor Duvvuri Subbarao having opted to sacrifice near-term economic growth, putting interest rate cuts on hold in a quest for financial stability.
With economic growth remaining weak, investors are already clamoring for the RBI to change course.
"I will not give in to the personality and sentiment. I will look at data," said Phani Sekhar, a fund Manager at Angel Broking in Mumbai.
"The governor has no control on fiscal policy so what do you expect the RBI to do? If Rajan continues focusing on inflation, his newly found fan club will vanish sooner than later."
Asia's third-largest economy is suffering from sluggish investment as well as slowdowns in the manufacturing and services sectors.
Investors have expressed little faith that New Delhi can push through substantial reforms, such as a hike in subsidized fuel prices, that could help revive confidence in the economy.
Measures the government has passed, including curbs to gold imports and opening up sectors for foreign investments, have been dismissed as too small or not helpful enough by markets.
India's lower house of parliament approved changes aimed at luring foreign asset managers to run retirement funds on Wednesday, but foreign firms say the new law is unlikely to immediately trigger a flood of investment.
The rupee is by far the biggest decliner among the Asian countries tracked by Reuters, even more than the 13 percent fall in the Indonesian rupiah, a country also suffering from a current account deficit and concerns about economic growth.
Economists say the government will ultimately need to step in to provide more long-lasting support for the rupee.
"India's myriad cyclical and structural impediments will continue to hold back the economy for the time being, and risks of a deeper crisis are non-trivial," Deutsche Bank wrote.
"But (Wednesday's) statement shows a fresh and cohesive vision of monetary and financial sector policy from a newly appointed central bank governor can shine a much-needed light on India's promise and potential."
(Writing by Rafael Nam; Additional reporting by Subhadip Sircar; Editing by Tony Munroe & Kim Coghill)

Bye, Bye, American Pie

US intransigence in the face of a war-weary world will mean the end of the country as we know itby Daniel Patrick Welch
It actually shouldn’t be that much of a shock. For the last twelve years at least, Americans have watched their country drift into the shadows of international law abroad and onto the shoals of fascism at home. Inexorably, the weight of imperial overstretch has crippled an economy already on a constant war footing and led to the steady erosion of civil liberties once taken for granted.
At one point, Democrats cried out in (what turns out to be mock) horror when one of the Bushmen smirked at the Geneva Convention as ‘quaint.’ Outrageous! Squeaked the remnants of an American “Left.” No more. As drones are poised to darken the skies like a plague of locusts, intelligence agencies can read all of our communications even as we write them, and the general criminalization of dissent has accelerated without objection because, after all, the guy doing it has a -D after his name.
And now, nary a peep from so-called ‘progressives’ in Congress as a Democrat and his lurking, smooth-talking Consigliore use the same lies and fabrications to shove yet another war down our throats, all neatly packaged in Red, White and Blue, the specter of National Security—in short, the same old bullshit we've heard before.
But it’s not the same—that’s the point. And it’s a shame the fools in congress are too stupid (most of them, apparently) to see it. Showing the delusional thinking that is now seemingly required to hold and keep public office, one particularly deranged congresswoman actually told Wolf Blitzer that “dozens” of countries stood ready to support the US’ aggressive war against Syria, though she couldn't name them offhand. Debbie Wasserman Schultz actually said “I mean we have, from the briefings that I've received, there are dozens of countries who are going to stand with the United States, who will engage with us on military action and also that back us up.”
Oh, okay then. Micronesia will send staples, and Samoa is serving drinks. The problem is that, inside the bubble of American “thought,” these people really think that mobilizing the ‘international community’ is the same a papering an audience for a bad musical on a weeknight. It is all just a cynical farce to them. They don’t know, or don't care, that the whole world sees this for the fraud that it is. The Obama regime is about to make the biggest mistake in history.
This is not hyperbole. Bush had far more support going into Iraq, and Saddam had far less. His case for war, filled with lies and fabricated ‘evidence’ and ginned up ‘intelligence’ findings, is far better than the US’ current position—a complete crock of shit to the whole world, but that somehow smells like roses to the US Congress. The government has ceased to function as a representative body, and is completely divorced from the interests of the American people. Don’t want to trust such a judgment to an old commie like me? Take it from a former president—Jimmy Carter. Mr. Peanut himself admitted there is ‘no functioning democracy’ currently in the US. The arrogance of Obama’s War Council is stunning. Russia, China, and Iran have given repeated warnings—stern, clear, and unequivocal, against such an illegal and foolhardy course of action. The world has had it with American intransigence. It makes no difference whether an illegal war of aggression is ‘authorized’ by a compliant US Congress. Zero.
No matter what happens from here on out, the balance of power is already shifting, away from the US and its vassal states toward BRICS and the nations of the Global South. Even if the US regime does not attack (in itself a poor choice of words since it has been arming and funding foreign mercenaries in Syria for over two years), a too-patient world is ready to muzzle the rabid dog that is the US.  China, while keeping mostly cool, has let it be known that if a strike does go ahead, that others should offer assistance to resist. This is as clear a shot across the bow as there is, and should give US warmakers pause.
What it means is that Syria, as a sovereign state, is justified in calling on its allies for help, by which it means Iran and its store of Russian Sunburn missiles, or Hezbollah and its own Chinese C-802 missiles, or Russia itself with its S300, S400 & S500 missiles. This is the real red line, and the US already crossed it in Libya. Putin has said that the Americans are acting like a monkey with a grenade in the Middle East. To put a finer zoological point on it, the Panda and the Bear are not fucking around. They have decided, and rightly so, that the US is too dangerous and must be stopped. If Obama goes ahead with this maniacal and murderous plan, China, Russia, Iran and Hezbollah will help Syria sink a few US destroyers, sending hundreds and perhaps thousands of kids to the bottom of the Mediterranean—they have as much as said so. They—not the US—will be within their rights and within international law to do so.
Mourn now, not later. And mourn at least equally for the kids your kids kill and for your kids who are killed in return. Don't go running for the flag or screaming for revenge. Don't accuse those of us who shouted from the rooftops of being un-American, or try to bully us into abandoning our principles and join the call for blood. This is wrong. It is illegal. It is as predictable as it is preventable. Even some tepid ‘antiwar’ types have it wrong when they say the US can’t be the world’s policeman. This misses the mark: the real point is that we have no moral authority to do so , and the whole world knows it. The criminal cabal in Washington is so obsessed with its own greatness that is has stood history on its head. In his long, insidious career of lies and obfuscation, Merchant of Death John Kerry finally got something inadvertently right: this *is* a Munich moment. But of course, true to form, he has it backwards. And Chamberlain‘s first name is not Neville, it’s Vlad. And he may give Obama and his henchmen a Nuremberg Moment.
Writer, singer, linguist and activist Daniel Patrick Welch lives and writes in Salem, Massachusetts, with his wife, Julia. Together they run  The Greenhouse School.. Translations of articles are available in over two dozen languages. Links to the website are appreciated.
© 2013 Daniel Patrick Welch

Meet the next US special operations strike vehicle

In one of the dwindling number of domestic new build ground vehicle contracts available to the US defense industry, the US Special Operations Command today awarded General Dynamics Ordnance and Tactical Systems a contract worth at least $562 million its Ground Mobility Vehicle 1.1 (GMV) program.

The special ops command has said that it wants to buy 1,297 GMVs to replace the current 1,072 Humvee-based GMVs it has in its inventory. Defense News reported back in May that SOCOM had already planned to spend about $24 million on the program in fiscal 2014 for the first 101 vehicles, at a price tag of at $245,000 per vehicle.

Syrian Arab Republic: Financial Position in the Fund

as of July 31, 2013

Summary of IMF members’ quota, reserve position, SDR holdings, outstanding credit, recent lending arrangements, projected payments due to the IMF, and monthly historical transactions with the Fund.
    I. Membership Status: Joined: April 10, 1947;Article XIV

  II. General Resources Account:SDR Million%Quota
       Fund holdings of currency (Exchange Rate)293.60100.00
       Reserve Tranche Position0.010.00

III. SDR Department:SDR Million%Allocation
       Net cumulative allocation279.18100.00

 IV. Outstanding Purchases and Loans:   None

  V. Latest Financial Arrangements:         None

VI. Projected Payments to Fund  1/
   (SDR Million; based on existing use of resources and present holdings of SDRs):
         2013  2014  2015  2016  2017 

1/ When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.

VII. Implementation of HIPC Initiative: Not Applicable

VIII. Implementation of Multilateral Debt Relief Initiative (MDRI):  Not Applicable

IX. Implementation of Post-Catastrophe Debt Relief (PCDR):  Not Applicable

Prepared by Finance Department

36 Rothschild UBS Banksters Face Criminal Charges In Liborgate Robbery: Rothschild’s Waterloo!

the Lady who runs The Economist magazine, a successful business person in her own right is married to the biggest bankster of them all – Sir Evelyn de Rothschild.
The female who runs The Economist Magazine, is married to the biggest bankster of them all – Evelyn de Rothschild.
How convenient for team Rothschild to sell the young bankers down the river while they upstream the family jewels (i.e. gold and silver) through the imposition of newer, better and faster global monetary systems that is able to bond with the Chinese. Historian Niall Ferguson’s take on the Rothschild role in the battle of Waterloo:
  1. War On Feds ~ Utah Sheriffs Warn Obama: Your Feds Will Not Be Allowed To Take Utahan Firearms!
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As the fallout of Liborgate escalates, the next big bank to be impacted in the fallout started by Barclays civil settlement “revelation” is set to be troubled UBS, already some 10,000 bankers lighter, where as many as three dozen bankers are reported by the implicated in the fixing of the rate that until 2009 was the most important for hundreds of trillions in variable rate fixed income products.
Only instead of attacking the US or even European jurisdiction, where the next big settlement is set to hit is Japan: a country whose regulators as recently as half a year ago promised there were no major issues with Libor, or Tibor as it is locally known, rate fixings. And while this most recent development will have little material impact on UBS’ ongoing business model, the one difference from previous settlements is that it will likely include criminal charges lobbed against some of the 36 bankers.
From the FT: “UBS is close to finalising a deal with UK, US and Swiss authorities in which the bank will pay close to $1.5bn and its Japanese securities subsidiary will plead guilty to a US criminal offence. Terms of the guilty plea were still being negotiated, one person familiar with the matter said on Monday, adding that the bank will not lose its ability to conduct business in Japan. The pact between the bank and the US Commodity Futures Trading Commission, US Department of Justice, UK’s Financial Services Authority and UBS’s main Swiss supervisor Finma is expected to be announced on Wednesday, although last minute negotiations continue.”
Not all of the three dozen individuals will face criminal or civil charges and the level of alleged misconduct varies among them. While it also is not clear how many bankers will be criminally charged, people familiar with the investigation said the settlement documents will document an intercontinental scheme to manipulate the Yen-Libor interest rate over several years involving desks from Tokyo to London.
The UK FSA has also notified at least five individuals linked to UBS that they are being personally investigated in connection with Libor. The watchdog has the power to impose fines and ban people from working in London’s financial services industry.
Criminal and regulatory investigations of individuals often take significantly longer than cases against institutions. The global settlement reached with Barclays over the summer did not include any charges against individuals, but several bankers are under criminal investigation, according to people familiar with the matter.
To a big extent, the reason why so many banks have given up on Libor and are now eager to settle comparable allegations, is because in a world in which not banks are primary counterparties to other banks, but central banks onboard all the counterparty risk, especially in Europe, Libor is now an anachronism – an unsecured lending rate remnant from another time, a time when there was risk a bank may fail without dragging its host central bank. That time is now gone, and as a result the only relevant metric now is how effectively can banks flush to the gills with excess reserves courtesy of various central banks, use said capital to generate a return on (central bank) capital, and a high enough ROE to keep shareholders happy.
Which is why even as banks are settling Libor allegations left and right, and even willing to throw some low-level traders under the bus because just like Fabulous Fab Tourre, nobody else had any idea of the criminal rate manipulation that was going on, and certainly not the corner office, what banks are really doing is learning from the master of trading – that would be none other than Steve Cohen – and experimenting with becoming the best hedge fund out there. Because in the new zero NIM normal, where money can not be made by traditional lending verticals, the only option left is to outsmart the competition.
And with retail investors leaving the marketplace in droves, the only ones left to be outsmarted are other banks. In other words, the cannibalization phase is almost upon us. Which means that just like the Knight Capital “fat finger” led to the collapse of one of the biggest market makers, so more and more banks will soon set their sights on their peers (think Bear and Lehman circa 2008), in an attempt to turbocharge their returns in a field in which there are simply too many competitors for everyone to make the needed returns.
Of course, if in the meantime some lowly attorney general can score some brownie points by amputating a division that is no longer needed, and throwing some janitors in minimum security prison for 12-24 months, so much the better for their political career. Sadly, nobody at the top, certainly nobody at HSBC or any of the other big banks, will ever see true justice, at least not until they too suffer the fate of Dick Fuld and suddenly find themselves as the main dish at the ever shrinking predators’ ball.
Zero Hedge

Putin Sets Uncompromising Tone Ahead of G-20 Summit

It was not the most diplomatic way to start a summit of world leaders. On Sept. 4, the day before Russian President Vladimir Putin begins hosting the G20 summit in his hometown of St. Petersburg, he accused the Obama Administration of lying to Congress, and said U.S. lawmakers were being suckered into approving a military strike against Syria. “We talk with these people. We assume that they are decent. But he lies,” Putin said of U.S. Secretary of State John Kerry. “And he knows that he lies. That’s pathetic.”
At a meeting with his human rights council in the Kremlin, Putin said he had watched Kerry make his case for a strike against Syria to U.S. lawmakers, who are expected to vote on whether to allow the attack in the coming days. “Of course he lied. And that’s not pretty,” Putin said.He claimed that Kerry misled U.S. lawmakers by asserting that al-Qaeda was not present in Syria — an assertion that Kerry did not actually make during his testimony to the Senate Foreign Relations Committee on Tuesday. According to Reuters, a senator asked Kerry whether it was “basically true” that Syria’s rebels had “become more infiltrated by al-Qaeda over time,” to which Kerry responded, “No, that is actually basically not true. It’s basically incorrect.” But the impression that Putin got from that exchange was “not very pleasant for me,” the Russian President said.

Remember when Putin shared his thoughts on McCain?

Marc Faber: US Stocks Are a 'Better Sell Than a Buy'

Marc Faber's forecast hasn't changed over the course of the year. The editor and publisher of the Gloom, Boom & Doom Report is still calling for a steep correction in the stock market.

Commenting on the stock rally in March, Faber told CNBC, "I believe it will end badly this year," predicting the market would see a 20 percent correction, or worse.

As we approach the end of the third quarter, Faber affirmed his conviction, telling CNBC that the trouble has already begun.

Editor’s Note:
5 Reasons Stocks Will Collapse . . .

Pointing to Indonesia, India and other markets, he explained, in dollar terms, some have already dropped over 30 percent in two months.

"So we have some big setbacks globally. Not yet in the U.S.," he admitted.

"But in the U.S, you look at housing stocks. The homebuilders, they're down 30 percent from their highs. Tells you something about this wonderful housing recovery."

At this point, Faber sees U.S. equities as a "better sell than a buy."

"In my view, we'll go back to the lows in November 2012 — around 1,343," in the S&P 500, he predicted.

Instead of stocks, Faber recommended considering Treasurys.

"I think the sentiment is incredibly bearish about Treasury bonds and Treasury notes," he said. If the market drops, "people will again fear deflation, and they will move into 10-year Treasury notes."

And one reason he foresees trouble now is due to his expectation that investors will feel similarly about U.S. stocks.

"When emerging markets go down and the S&P goes up, the asset allocators say, 'Do I want to buy the S&P near a high, or do I venture back into emerging economies that are down 50 percent from their highs, like India or Brazil and so forth?" Faber asked.

"So you understand that the pool of money can flow back into emerging markets," he said.

In addition, the United States is making the mistake of pushing for military action in Syria, he noted.

Syrian President Bashar al-Assad has warned that Western intervention could result in a complete loss of control.

"Chaos and extremism would ensue. There is a risk of regional war," Assad told the Le Figaro newspaper, Bloomberg reported.

"The Middle East is a powder keg, and it will go up in flames because the Western imperialistic powers, they still meddle into the local affairs," Faber told CNBC.

"It's going to be a disaster. And it's going to strike from Syria and Egypt into Saudi Arabia, into the Emirates eventually, and so forth and so on, and you're going to have a huge mess," he said.

Faber also points to the fact that interest rates on 10-year Treasuries have doubled since July 2012 "despite Mr. Bernanke's maddening asset purchases."

Interest rates have become "a headwind," he noted.

"We're up almost 70 percent in two years and the economic expansion is four years old already," he added.

With weakness in emerging markets, looming rise from a crisis in the Middle East and rising Treasury yields, "where are the earnings going to come from?" he questioned.

Editor’s Note: 5 Reasons Stocks Will Collapse . . .

© 2013 Moneynews. All rights reserved.

Andy Hoffman: Never Fear QE5 Is On The Way presents
Andy Hoffman joined us for another of his famous Monday rants. Things are going exactly as planned. Interest rates are on the rise. New housing sales are declining and so are durable goods orders, which is strange because July is right in the middle of what should be peak housing numbers. Could it bee that things aren’t as rosy as the politicians would have you believe? But how could that be, they promised that prosperity was just around the corner. And they would never lie to you, would they?
Go to for the latest info on the economy and precious metals markets

Take Your Money Out of the Bank!

You’re a sucker to believe Wall Street

Commentary: What were advisers saying five years ago?


Bloomberg News/Landov
CHAPEL HILL, N.C. (MarketWatch) — You’re a sucker to believe Wall Street’s current mantra that another Lehman Brothers-like collapse is not in the cards.
I say that not because I think such a collapse is imminent, though I am less sanguine than many right now. The reason I say we shouldn’t believe Wall Street is that they were also telling us not to worry five years ago, right before Lehman declared bankruptcy. 

Lehman Brothers filed for bankruptcy on Sept. 15, 2008. That, in turn, triggered the near collapse of the entire financial system: The stock market quickly entered into one of its worst two-month stretches in U.S. history.
If ever there were a time for Wall Street’s gurus to warn us of the impending doom, that would have been the time.

Hulbert: Be choosy when investing in emerging markets

Marketwatch columnist Mark Hulbert explains that when investing in emerging market stocks, it pays to be choosy.
But that’s not what I found upon reviewing what the several hundred advisers I track were saying in those crucial weeks prior to that financial tsunami. On the contrary, with very few exceptions, they were remarkably complacent at that time — if not downright upbeat.
Consider the following sampling of comments from late August and early September of 2008:
  • “I am ready to be a bull again! ... [T]he exact time is still difficult to tell, and we will in all likelihood be early to the game, but three crucial elements necessary for a new bull market are getting our attention. The housing market is beginning to show serious signs of a bottom… Quietly, the financial sector has been slowly healing.”
  • “The stock market and the economy continue to battle the same demons. They are not going away easily, though one would have to think the sub-prime mess is largely behind us… I think a 75% invested posture is about right at this juncture.”
  • “For the next few weeks at least, the sun seems destined to shine on the stock market.”
  • “With oil and gas and ag commodity prices coming down, consumers are eventually going to get some much needed breathing room. This will also allow the economy to regain its footing and begin a recovery, especially once the 6-year cycle bottoms in September. The bear market in crude oil will help to improve consumer spending and should also bolster the stock market from here.”
I could go on and on, but you get the point.
(And, to be clear, I selected these quotations to make that point; I’m sure I could have found other quotations from at least many of them that don’t make them, in retrospect, look so foolish.)
Clearly, Warren Buffett was right when he famously said that one of the primary purposes of stock market forecasters is to make fortune tellers look good.

Making the World Safe for Banksters: Syria in the Cross-hairs

“The powers of financial capitalism had another far reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole.”  —Prof. Caroll Quigley, Georgetown University, Tragedy and Hope (1966)
Iraq and Libya have been taken out, and Iran has been heavily boycotted. Syria is now in the cross-hairs. Why? Here is one overlooked scenario. 
In an August 2013 article titled “Larry Summers and the Secret ‘End-game’ Memo,” Greg Palast posted evidence of a secret late-1990s plan devised by Wall Street and U.S. Treasury officials to open banking to the lucrative derivatives business. To pull this off required the relaxation of banking regulations not just in the US but globally. The vehicle to be used was the Financial Services Agreement of the World Trade Organization.
The “end-game” would require not just coercing support among WTO members but taking down those countries refusing to join. Some key countries remained holdouts from the WTO, including Iraq, Libya, Iran and Syria. In these Islamic countries, banks are largely state-owned; and “usury” – charging rent for the “use” of money – is viewed as a sin, if not a crime. That puts them at odds with the Western model of rent extraction by private middlemen. Publicly-owned banks are also a threat to the mushrooming derivatives business, since governments with their own banks don’t need interest rate swaps, credit default swaps, or investment-grade ratings by private rating agencies in order to finance their operations.
Bank deregulation proceeded according to plan, and the government-sanctioned and -nurtured derivatives business mushroomed into a $700-plus trillion pyramid scheme. Highly leveraged,  completely unregulated, and dangerously unsustainable, it collapsed in 2008 when investment bank Lehman Brothers went bankrupt, taking a large segment of the global economy with it. The countries that managed to escape were those sustained by public banking models outside the international banking net.
These countries were not all Islamic. Forty percent of banks globally are publicly-owned. They are largely in the BRIC countries—Brazil, Russia, India and China—which house forty percent of the global population. They also escaped the 2008 credit crisis, but they at least made a show of conforming to Western banking rules. This was not true of the “rogue” Islamic nations, where usury was forbidden by Islamic teaching. To make the world safe for usury, these rogue states had to be silenced by other means. Having failed to succumb to economic coercion, they wound up in the crosshairs of the powerful US military.
Here is some data in support of that thesis.
The End-game Memo
In his August 22nd article, Greg Palast posted a screenshot of a 1997 memo from Timothy Geithner, then Assistant Secretary of International Affairs under Robert Rubin, to Larry Summers, then Deputy Secretary of the Treasury. Geithner referred in the memo to the “end-game of WTO financial services negotiations” and urged Summers to touch base with the CEOs of Goldman Sachs, Merrill Lynch, Bank of America, Citibank, and Chase Manhattan Bank, for whom private phone numbers were provided.
The game then in play was the deregulation of banks so that they could gamble in the lucrative new field of derivatives. To pull this off required, first, the repeal of Glass-Steagall, the 1933 Act that imposed a firewall between investment banking and depository banking in order to protect depositors’ funds from bank gambling. But the plan required more than just deregulating US banks. Banking controls had to be eliminated globally so that money would not flee to nations with safer banking laws. The “endgame” was to achieve this global deregulation through an obscure addendum to the international trade agreements policed by the World Trade Organization, called the Financial Services Agreement. Palast wrote:
Until the bankers began their play, the WTO agreements dealt simply with trade in goods–that is, my cars for your bananas.  The new rules ginned-up by Summers and the banks would force all nations to accept trade in “bads” – toxic assets like financial derivatives.
Until the bankers’ re-draft of the FSA, each nation controlled and chartered the banks within their own borders.  The new rules of the game would force every nation to open their markets to Citibank, JP Morgan and their derivatives “products.”
And all 156 nations in the WTO would have to smash down their own Glass-Steagall divisions between commercial savings banks and the investment banks that gamble with derivatives.
The job of turning the FSA into the bankers’ battering ram was given to Geithner, who was named Ambassador to the World Trade Organization.
WTO members were induced to sign the agreement by threatening their access to global markets if they refused; and they all did sign, except Brazil. Brazil was then threatened with an embargo; but its resistance paid off, since it alone among Western nations survived and thrived during the 2007-2009 crisis. As for the others:
The new FSA pulled the lid off the Pandora’s box of worldwide derivatives trade.  Among the notorious transactions legalized: Goldman Sachs (where Treasury Secretary Rubin had been Co-Chairman) worked a secret euro-derivatives swap with Greece which, ultimately, destroyed that nation.  Ecuador, its own banking sector de-regulated and demolished, exploded into riots.  Argentina had to sell off its oil companies (to the Spanish) and water systems (to Enron) while its teachers hunted for food in garbage cans.  Then, Bankers Gone Wild in the Eurozone dove head-first into derivatives pools without knowing how to swim–and the continent is now being sold off in tiny, cheap pieces to Germany.
The Holdouts
That was the fate of countries in the WTO, but Palast did not discuss those that were not in that organization at all, including Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and Iran. These seven countries were named by U.S. General Wesley Clark (Ret.) in a 2007 “Democracy Now” interview as the new “rogue states” being targeted for take down after September 11, 2001. He said that about 10 days after 9-11, he was told by a general that the decision had been made to go to war with Iraq. Later, the same general said they planned to take out seven countries in five years: Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and Iran.
What did these countries have in common? Besides being Islamic, they were not members either of the WTO or of the Bank for International Settlements (BIS). That left them outside the long regulatory arm of the central bankers’ central bank in Switzerland. Other countries later identified as “rogue states” that were also not members of the BIS included North Korea, Cuba, and Afghanistan.
The body regulating banks today is called the Financial Stability Board (FSB), and it is housed in the BIS in Switzerland. In 2009, the heads of the G20 nations agreed to be bound by rules imposed by the FSB, ostensibly to prevent another global banking crisis. Its regulations are not merely advisory but are binding, and they can make or break not just banks but whole nations. This was first demonstrated in 1989, when the Basel I Accord raised capital requirements a mere 2%, from 6% to 8%. The result was to force a drastic reduction in lending by major Japanese banks, which were then the world’s largest and most powerful creditors. They were undercapitalized, however, relative to other banks. The Japanese economy sank along with its banks and has yet to fully recover.
Among other game-changing regulations in play under the FSB are Basel III and the new bail-in rules. Basel III is slated to impose crippling capital requirements on public, cooperative and community banks, coercing their sale to large multinational banks.
The “bail-in” template was first tested in Cyprus and follows regulations imposed by the FSB in 2011. Too-big-to-fail banks are required to draft “living wills” setting forth how they will avoid insolvency in the absence of government bailouts. The FSB solution is to “bail in” creditors – including depositors – turning deposits into bank stock, effectively confiscating them.
The Public Bank Alternative
Countries laboring under the yoke of an extractive private banking system are being forced into “structural adjustment” and austerity by their unrepayable debt. But some countries have managed to escape. In the Middle East, these are the targeted “rogue nations.” Their state-owned banks can issue the credit of the state on behalf of the state, leveraging public funds for public use without paying a massive tribute to private middlemen. Generous state funding allows them to provide generously for their people.
Like Libya and Iraq before they were embroiled in war, Syria provides free education at all levels and free medical care. It also provides subsidized housing for everyone (although some of this has been compromised by adoption of an IMF structural adjustment program in 2006 and the presence of about 2 million Iraqi and Palestinian refugees). Iran too provides nearly free higher education and primary health care.
Like Libya and Iraq before takedown, Syria and Iran have state-owned central banks that issue the national currency and are under government control. Whether these countries will succeed in maintaining their financial sovereignty in the face of enormous economic, political and military pressure remains to be seen.
As for Larry Summers, after proceeding through the revolving door to head Citigroup, he became State Senator Barack Obama’s key campaign benefactor. He played a key role in the banking deregulation that brought on the current crisis, causing millions of US citizens to lose their jobs and their homes. Yet Summers is President Obama’s first choice to replace Ben Bernanke as Federal Reserve Chairman. Why? He has proven he can manipulate the system to make the world safe for Wall Street; and in an upside-down world in which bankers rule, that seems to be the name of the game.
Ellen Brown is an attorney, president of the Public Banking Institute, and author of twelve books including the best-selling Web of Debt. In The Public Bank Solution, her latest book, she explores successful public banking models historically and globally. Her websites are,, and

US military strike on Syria will cost taxpayers billions

US Navy destroyers cruising in the Pacific Ocean
US Navy destroyers cruising in the Pacific Ocean
Mon Sep 2, 2013 3:48AM
Army General Martin Dempsey, chairman of the Joint Chiefs of Staff, estimated in a letter to the Senate in July that a military intervention deep inside Syria would require hundreds of warplanes, ships and submarines and that the costs would be in the billions.
As the United States gears up for a seemingly inevitable strike on Syria, defense experts warn that a military action will cost American taxpayers billions of dollars at an era of austerity and contracting budgets.

The most likely scenario for a strike on Syria, as multiple senior US officials have indicated, would be to launch cruise missiles from US Navy destroyers cruising in the eastern Mediterranean.

Each of those sophisticated missiles, which fly as far as 1,000 miles, evade radar and explode within feet of their targets, costs about $1.1 million, according to the US Navy.

"The ships, missiles and salaries are already paid for," Gordon Adams, a professor at American University and a former Defense Department official in the Clinton administration, told the USA Today.

"There may be an incremental cost in the tens of millions for operating the ships outside their routine operating schedule," he added.

But those costs would spiral quickly as the Pentagon would have to ask Congress for more money to carry out follow-up strikes.

Army General Martin Dempsey, chairman of the Joint Chiefs of Staff, estimated in a letter to the Senate in July that a military intervention deep inside Syria would require hundreds of warplanes, ships and submarines and that "the costs would be in the billions."

The top military officer said that the US would have to spend at least $500 million a year to train and assist the foreign-backed militants fighting against the Syrian government, but warned that the costs could soar rapidly depending on the scale of the operations.

Dempsey said that establishing a no-fly zone over parts of Syria would cost at least $500 million to begin with and could cost a whopping $1 billion per month to maintain.

Securing chemical weapons sites that the US claims the Syrian government has would cost more than $1 billion a month, according to the top general.

Washington has accused the government of Syrian President Bashar al-Assad of carrying out a chemical weapons attack on militant strongholds in the suburbs of Damascus on August 21. The Syrian government has rejected the allegation.

On Saturday, President Barack Obama, who had previously said a chemical attack was a “red line”, announced that he had decided Washington should launch military strikes against Syria. The president, however, said that he would seek congressional approval for an attack.


Newsletter raises concerns about Caesars bankruptcy, but company not addressing rumors

Christopher DeVargas
An exterior view of Caesars Palace, June 6, 2013.
Published Tue, Sep 3, 2013 (11:49 a.m.)
Updated Wed, Sep 4, 2013 (9:58 a.m.)
The publisher of a newsletter about Las Vegas is encouraging readers not to put money down on hotel reservations or make deposits in casinos operated by Caesars Entertainment, citing the prospect of a bankruptcy filing.
“In an abundance of caution, this newsletter advises you not to deposit any funds (deposits for hotel reservations, deposits in the cashier’s cage or not redeeming casino chips, etc.), in … Caesars hotels, until the situation at Caesars becomes clearer,” Publisher Bill Mandel said in his Openings and Closings in Las Vegas newsletter distributed Monday.
Mandel said he has been publishing the newsletter for 16 years and as of Sunday had 64,034 subscribers, mostly frequent Las Vegas visitors and gamblers.
While analysts have speculated on a Caesars bankruptcy filing, company insiders said executives aren’t considering it.
A UNLV gaming expert said that even if Caesars were to file for bankruptcy protection, it’s highly unlikely that it would affect hotel reservations and casino deposits.
“I’m struggling to remember any time when a gaming company’s bankruptcy filing directly affected customers,” said David Schwartz, director of the Center for Gaming Research at UNLV. “It would be a problem for shareholders but not customers.”
Schwartz cited the 2009 Chapter 11 bankruptcy filing of Station Casinos. The company sold assets and reorganized finances, emerging from bankruptcy in 2011.
“Nobody wants to declare bankruptcy, but in the case of the Fertitta family, they swallowed their pride and did it and the company emerged stronger,” Schwartz said.
A spokesman for Caesars today said the company has a long-standing policy of not commenting on rumors and speculation, and company representative Gary Thompson said the bankruptcy rumors have been circulating for months.
Reports of a possible Caesars bankruptcy heated up in April when Moody’s Investors Services downgraded the company’s credit rating to one of its lowest levels. Mandel cited the Moody’s report in his warning.
Moody’s analyst Peggy Holloway said in April that cash flow growth didn’t expand for Caesars in 2012-13 as a result of a demand drop fueled by customers spending less at casinos. She said consumers’ discretionary spending was reduced by higher taxes.
A key date occurs in January 2015 when $4.4 billion of mortgage-backed securities are scheduled to mature.
In the company’s most recent earnings report in July, Caesars noted that it had bought back $275 million in debt and that its financial strategy included beefing up its product offerings in Las Vegas and entering the Maryland casino market, breaking ground on a property on Baltimore’s harbor. The company also cut spending on marketing at some of its less profitable properties.
Caesars also is expected to generate new revenue when its online poker product, themed with its World Series of Poker brand, is licensed.
Schwartz said it’s evident that Caesars is looking to grab a larger piece of wallet share in Las Vegas with its Linq project, due to open early next year. Linq includes a pocket of restaurants and attractions in the heart of the Strip, anchored by the 550-foot High Roller observation wheel. He said many things can change for the company between now and the January 2015 securities maturation.
Investors have shown confidence in the company since its newest financial strategy was rolled out. The company’s stock price fell to $12.25 shortly after the Moody’s announcement but had risen to $21.84 by the end of August.

What Would You Do? Food Stamps Single Mother Of 4 Children Can't Afford Food!

Employers pay below living wage in UK

A new study has revealed that Britons who™ve been employed since 2009 received a salary lower than the estimated living wage, local media reported.
The report carried out by the Resolution Foundation shows there are now 4.8 million jobs, whose wages are lower than £7.45 a hour, which is the minimum deemed necessary for basic standard of living in the UK.
œFor most of the working population real wages have been flat or declining for many years and as a result more and more people have dipped below the level of the Living Wage,” said Matthew Whittaker, senior economist at the Resolution Foundation.
“This means an increasing struggle to keep up with the cost of living.”
The amount of employees earning in that category has risen 20-percent since Prime Minister David Cameron™s election.
Cameron introduced the low-income jobs to spur an œeconomic revival”, which during his tenure has also seen the fall of the average hourly rate of a new employee from £8.42 to barely £8.
Britain is among countries that pay the lowest on average as compared to the cost of living. Whittaker said œBritain has a sorry story to tell on low pay. Only a handful of our close competitors do worse and the large majority has much lower rates of low pay – sometimes half as much.”
…read more
Republished from: Press TV

The CURRENT Monetary System WILL CRASH — Got Gold?

Claudio Grass the managing director of joins us to discuss the fact that our current monetary system WILL collapse, it’s just a matter of time. The question Claudio asks is when it happens, “Will the crash lead us to more Totalitarian structures, or will the people start thinking about their individual liberty?” Claudio, who lives in Switzerland, believes in the Austrian school of economics, personal responsibility and liberty. Oh, and plenty of PHYSICAL gold (and PHYSICAL silver) to protect your assets.

Gold Drops with Oil as US & Russia Argue Over Syria Ahead of G20

Gold Drops with Oil as US & Russia Argue Over Syria Ahead of G20

WHOLESALE GOLD fell back below $1400 per ounce for the third day running Wednesday lunchtime in London, dropping to $1393 and trading 1.7% below yesterday’s high as crude oil and world stock markets both fell 0.5%.

Silver dropped to $23.53 per ounce, some 4.0% below Tuesday’s top.

Major government bonds edged higher, nudging interest rates down, while weaker Eurozone debt fell in price.

Now putting airstrikes against Syria to a Congressional vote next week, “Failing to respond would only increase the risk of [further chemical weapons] attacks,” said US president – and 2009 Nobel peace prize winner – Barack Obama at a press conference in Sweden today.

“The potential for Mideast tensions to intensify would be bullish for bullion,” reckons a note from London market maker HSBC.

“Safe haven demand for gold is currently strong…[But] in order for gold to build on recent gains over $1400/oz, oil prices also have to remain strong we believe.”

Crude oil slipped 0.5% on Wednesday morning, with US futures retreating to $108 per barrel.

Speaking ahead of tomorrow’s G20 summit in St Petersburg, which Obama will attend, Russian president Vladimir Putin warned the US that the Kremlin may revive exports of missiles to its Middle Eastern allies, which include Syria and Iran.

But whilst saying it was “ludicrous” to think the Assad regime had used chemical weapons against civilians as alleged, Putin said Russia would “act in the most decisive and serious way” if UN inspectors prove those claims.

For gold, say commodity researchers at Commerzbank, “We believe that the effect of these political factors will be short-lived.

“Current geopolitical risks are unlikely to bring about any sustained trend reversal for gold. After all, physical demand is relatively weak at present.”

“I reiterate what I said last week,” says David Govett at brokers Marex, “about buying the rumour of war/missile strikes and selling the fact.

“Bear that in mind as time ticks down to the Congressional vote.”

The 17-nation Eurozone meantime followed the UK and US today in revising its latest GDP figures higher, cutting this spring’s year-on-year drop to 0.5% from the 0.7% first reported.

New service-sector data meantime showed a four-month high in China, and a surge to the fastest UK growth since 2007.

The Pound hit 1-week highs above $1.56, curbing gold for Sterling investors back below £900 per ounce – a two-year low when first breached in gold’s April 2013 crash.

Gold mining output from world No.5 producer South Africa was hit meanwhile by a two-day strike, with work at 17 “partially or severely affected” according to the Chamber of Mines.

“If you are prepared to move, then we may be prepared to move,” said NUM spokesperson Lesiba Seshoka on SAFM radio today, suggesting a step back from the 60% wage hikes demanded so far but refusing to comment on rumors of a drop to 10% claims.

Over on the demand side, the Reserve Bank of India today reinstated gold imports, but with a stricter list of approved firms and with the ban on gold coins and medallions still in place.

Gold smuggling to India has doubled so far in 2013 according to industry estimates, thanks to the government’s 10% duty and other anti-gold-imports measures.

Nepalese seizures of illegal shipments to India are already three times last year’s total. India’s banks are now asking potential borrowers not to use any loans to buy gold, the Deccan Chronicle reported this week.

Shops in mid-tier city Xiamen in China – now the world’s No.2 consumer country, and likely to overtake India in 2013 on official data – have seen gold and silver jewelry demand rise 42% so far in 2013 from the first 7 months of 2012, equaling more than $148 million.

Adrian Ash

Dr. Paul Craig Roberts-A Real Collapse in the Dollar, Gold Could Be $30,000 an Ounce

When it comes to war in Syria, economist Dr. Paul Craig Roberts says, “This time the big lie didn’t work like it did in Iraq.” On fallout of a possible Syrian war, Dr. Roberts worries, “If they start abandoning the dollar, the collapse of the exchange rate will bring down the whole house of cards in the United States. The Fed will lose control. The banks will fail. Prices will rise dramatically. People will essentially not be able to pay their bills. It will be an unbelievable mess.” What would happen to gold with a Syrian war? Dr. Roberts says, “If you get a real collapse in the dollar, gold could be $30,000 an ounce. Who knows?” Join Greg Hunter as he goes One-on-One with former Assistant Treasury Secretary Dr Paul Craig Roberts.

U.S. July trade deficit up 13.3% to $39.1 billion!!! Trade deficits with China, EU at record highs!

U.S. July trade deficit up 13.3% to $39.1 billion 8:30a
U.S. exports fall 0.6% in July to $189.4 billion 8:30a
U.S. imports in July rise 1.6% to $228.6 billion 8:30a
U..S. petroleum-product exports hit another record 8:30a
Trade deficits with China, EU at record highs 8:30a
U.S. trade deficit 10% lower vs. one year ago
Worse Than Expected US Trade Deficit Spikes In July, Trade Gaps With China, EU Rise To Record
When last week the revised Q2 GDP print was announced, which beat expectations solidly driven entirely by a surge in net exports, we said that “with China on the rocks and tightening, the Emerging Markets in free fall, and Europe still a net exporter (so not benefiting the US), anyone hoping this trade led-recovery will be sustainable, will be disappointed.” Sure enough, the first trade data update for the third quarter as of July, confirmed just this, as the trade deficit widenedfrom a revised $34.5 billion deficit, to a substantially larger monthly deficit, amounting to $39.1 billion. This was $500MM more than consensus expected, or $38.6 billion, and it means that as we predicted, the downward revisions to Q3 tracking estimates are about to start rolling in, trimming ~0.1%-0.2% from US GDP for this current quarter. Specifically, imports for the month rose from $225.1 billion to $228.6 billion while exports fell from $190.5 billion to $189.5 billion. But perhaps most notable is that in July, the US trade deficit with China and the EU rose to a record of $30.1 billion (from $26.6bn last month) and $13.9 billion (from $7.1bn) respectively.
Because Nothing Says “Dump Gold And Oil” Like A Pending Middle-East War…