Matthew 11:28 Come unto me, all ye that labour and are heavy laden, and I will give you rest.

: http://plutarch.blogdrive.com/ =>backup blogsite.

 

Midnight In Obama’s Foodstamp Nation

http://www.reuters.com/article/idUSTRE5BH2C220091218

 

Jim Willies Column

http://www.marketoracle.co.uk/Article15513.html

A really excellent column by Jim Willie as he nails all the paid off so called gold bulls. If you’re going to pay only one advisers its probably the ex spook Bob Chapman, if you’re only going to pay two advisers its probably Bob Chapman and Jim Willie.

 

Zionists Outraged- Freedom Fighters Liberate Auschwitz Sign- Desecrating Zionists Pagan Temple

http://news.bbc.co.uk/2/hi/europe/8421988.stm

 

Bob Chapman’s Weekly Missive…

 

http://theinternationalforecaster.com/International_Forecaster_Weekly/The_Greatest_Outpouring_Of_Money_And_Credit_In_History

The past two years have seen the greatest outpouring of money and credit from central banks and governments in history. In most countries interest rates cannot fall much lower being presently under 1% or close to zero. You might call this an attempt at fiat money recovery. As a result of pump priming for the past six months or more investors have returned to the same gambling and risk taking they engaged in before, the losses of which caused the world economy to come to the edge of the financial abyss. All sectors of investment are again affected by a casino mentality.

We see $12.7 trillion donated without their consent of the lender taxpayers to the top world economies, or about 20% of world GDP. These funds, a good part of which will never be retrieved, have been stuffed into the pockets of bankers, Wall Street, insurance companies and GM and AIG. 80% of the problems we have had to face were caused by these very same entities, which along with the Fed, propose to solve the problem they created. It is as if they are the only ones in the world who know best what is good for our system and for us. They as well continue to play in the giant casino as if nothing ever happened. While this transpires there are still trillions of dollars in bad debt and impaired assets on the books that have to be written off. The solution to that is to not truthfully report companies’ financial conditions. If you can believe this, the Chairman of the Board of the Financial Accounting Standards Board, the FASB that sets American accounting standards has called for the “decoupling” of bank capital rules from normal accounting standards. His proposal would encourage bank regulators to make adjustments as they determine whether banks have adequate capital while still allowing investors to see the current fair value. In order words it is ok to have two sets of books and to mark assets to model, which is marking assets to fantasy. Telling investors the truth is secondary. For almost 20 years banks have had to use GAAP for the basis for capital rules. If banks had their way there would be no rules. The FASB has been compromised and resides in the back pocket of the bankers. There you have it. Bankers are more equal than others. Their balance sheets are worthless. This should not be allowed to happen in America.

At first the G-20 nations wanted to remove monetary stimulus and now they say it is too early to do so. What they do not tell you is if they did remove trillions from their economies they would collapse. Europe, the UK and US have losses of $1.7 trillion they haven’t written off of yet. In addition, they have hundreds of billions in losses for foreclosed loans that are still flowing in, to further befoul their balance sheets. We have to laugh when central bankers talk about draining trillions from the system. If they pull liquidity the system collapses. Other than feeding money and credit into the system the bankers have no solution. Keeping them in charge is like giving a pyromaniac matches. Even if $500 billion more in stimulus is added to the system from TARP funds or from Congress, it is only going to keep growth in place until the end of next year. As a result inflation is going to soar. There is no real recovery. All we have seen is the Fed pouring trillions of dollars into the US and world economy.

There are two basic schools of thought regarding the economy. One is buying bonds for safety and the other with virtually no interest money is gambling in the markets. As a result we have a bull market in bonds and a bear market rally in the stock market. These factors lead investors and the public to the perception that a recovery is underway when nothing could be further from the truth. If it was true someone has to explain to us why consumer spending is off 20% yoy, which makes up 69.3% Of GDP? It is no wonder households are not spending. They have just lost $13 trillion in home equity and the housing bubble still has 20% to go to the downside. Quantitative easing has been a failure. We are still in a prolonged period of credit contraction that has been subdued temporarily by massive does of liquidity. Those hardest hit are small businesses and homeowners. All that retirement money is gone, because the Fed created a housing bubble. In 2009, homes lost 40% of their value and they have 20% to go and who knows how long the housing market will bump along the bottom. Reducing debt and spending is the new mantra. This will certainly reduce demand and economic growth. Blatant market manipulation in the long run will not be successful. 2.8% GDP growth is non-existent. The stock market may be booming on zero interest Fed funds, but as we pointed out last February middle America is in depression. In order to keep this façade going and the bubble in tact, the Fed has no choice but to inflate. They want to withdraw funds, but they cannot. They are recalling TARP funds, which will be quickly gobbled up by a new stimulus program and a call from the Treasury to buy more Treasuries, Agencies and toxic waste. Bernanke has to be running around in circles as members of Congress grill him on poor performance and the House passes HR1207, the Bill to audit and investigate the Fed. In addition bank lending is off 16.2% yoy and there are no signs of any loosening. We are looking at object failure by the Fed, which we reflected almost three years ago. There is no normality and no recovery. You cannot spend your way into recovery. It just doesn’t work. Look at the 1930s. It didn’t work then and it won’t work now. Government guarantees challenge reality and reality always wins. As a result of fed policy we have corporatist fascism at its worst. Day by day we attract less foreign capital and that is because any semblance of free markets are gone. All the Fed has done is rescue its owners and other connected elitists and such a plan is doomed to failure.

We started in the gold markets in 1960. We were the largest gold and silver stockbrokers of that time. We recommended stocks that ran from $0.25 to hundreds of dollars a share. It has been 29 years since June 1980 when we exited the market. Since then these markets have been difficult even though the last ten years have been very rewarding. Had it not been for the powers behind government manipulating the markets, it would have been far more rewarding. This is what happens when an uninterested public allows a criminal enterprise to run their lives. Most people born after 1960 know little about the gold and silver bull markets of the late 1970s. They are only told of the great bull market we have seen since 1983. Those in their 40s and younger are about to get an education in how real life works. Not the life created by Wall Street and the Fed, because that era is about to end and with it the fairy tale life they have been used too. Gold’s current price of over $1,000 an ounce is only the beginning. We spent ten years moving from $252 to $1,224. Now the advance is going to accelerate and could more than double in 2010. It should also be noted that during this past ten year period the dollar has lost 80% of its purchasing power, which shows gold is an excellent inflation hedged, as well as a deflation hedge. For the past 6-1/2 years all currencies have fallen versus gold and that is because they have had the same Keynesian monetary policies as the Fed. As a result gold has maintained its purchasing power.

It had been fashionable for the past ten years to say gold does not pay interest. This is the argument Gordon Brown, now UK PM used in 1999, when he sold the British citizens’ gold at $275.00 and leased a large part of what England had left. That masterstroke cost British citizens close to $10 billion. He did this when he was Secretary of the Treasury. Which would you rather have had, 5% interest or a capital gain of more than 200%? This experience certainly destroys the pays no interest theory. Owning gold and silver related assets is not speculation; it is wealth preservation. The great gold and silver bull markets of the last 1970s should have been seminal events, but they were not. Only 15% of the public participated, the remainder were buried in the stock market. Over the past ten years it has been worse. Only 2% to 3% of investors have been involved. In a way that is good, because it leaves lots more potential buyers to assist in pushing gold and silver higher. This is why we believe gold and silver have a long way to go on the upside.

There is no question that another bout of inflation is on the way and that the dollar will continue to fall in value. We do not believe gold and silver are today reflecting reflation. They are reflecting a flight to quality because professionals and a minority of other investors have lost faith and trust in the top 20 central banks. Thus, today we are witnessing a flight to quality and safety. Gold and silver are the only real way to protect against financial calamity and offer possibilities for profit simultaneously.

If you add in the fact that the US government has been manipulating the gold and silver prices, you can see the power that they will have to the upside. Wall Street has known for years gold and silver prices have been suppressed, but that scheme is about to end. The power of the elitist forces behind government to rig these markets has been faltering over the past six months. They no longer have the bullion for sale and are forced to use futures and derivatives to manipulate prices. That lasts for several days, then it is over, and then prices rise again. If HR1207 and S604 are passed and the Fed is audited then several months from now we will know exactly what the “Working Group on Financial Markets” have been doing. Audit will show how the Fed and the Treasury have rigged these two markets for years. It will also show how all markets have been manipulated and it will be game over. Gold and silver will make up for lost time shooting up to their fair values, and even if Ron Paul’s bill is not passed the influx of investment funds into these metals will eventually overwhelm their markets. Real inflation since 1980 would see gold between $6,700 and $7,150 an ounce. Even official inflation would price gold at $2,400 an ounce. People are going to finally realize that as their purchasing power and investments have fallen in value gold and silver have risen. Two years ago we had real inflation at 14%. We could easily return to that level in 2010. That cuts a regular stock portfolio in half in five years.

In the pipeline is $12.7 trillion created by our government and the Fed to keep our economy and financial system from collapsing. There is absolutely no way it can be withdrawn. The US Inspector General says we are on the hook for potential losses of $23.7 trillion. These kind of problems and the inflation they caused by the Fed adding more fuel to the fire will in and of itself force more investors into the arms of gold and silver. The only things keeping the economy from crashing is government spending and Fed monetization. We have begun the vicious cycle of inflation again along with a falling dollar. If you really want to protect your wealth you had best be in gold and silver related assets. They are the only protection you have.

Revisiting the other side of the equation it should not be forgotten that the Fed has created out of thin air $1.75 trillion to purchase $300 billion in Treasuries and $1.45 trillion in toxic waste and Agency securities. All of that money has been monetized, fed into the system, except that held on deposit by banks at the Fed. Part of these funds and TARP funds were used to run the stock market up some 54% in six months. That has only happened six times in 100 years. It is no secret as to why the stock market rose, but at the same time unemployment rose 22.2%. The Dow is 2,000 points higher than it should be under the circumstances. This is a propaganda setting to give the illusion that all is well.

We believe that the US dollar will be officially devalued in a year to 1-1/2 years from now to be replaced with an international trading unit. That will cause another flight to quality to gold and silver.

One of our contacts in Aussieland has a close contact in Guangzhou, China, who he has known for a number of years. When our contract told his friend that the US could default on its debt and devalue a year or more from now. The friend in China said, a high level Chinese government official who attended a business meeting on December 7th said the following: 2010 inflation will kick in both in China and the US, that would make it very bad for business in China and that the Chinese currency would strengthen to 6 to the US dollar. As you can see America’s problems are going to affect the entire world.

We continue to see the dollar hit lower lows. Yes, we currently are well aware of the dollar rally. Another government sponsored rally calculated to keep the rest of the world’s dollar holders happy and prove the US has a strong dollar policy. If you looked at the long positions of Goldman Sachs, JPMorgan Chase and Citigroup you will find that at the end of the third quarter they were very long the dollar, short gold and silver and the shares. This is another temporary dollar rally and a temporary gold and silver take down. Next the dollar will be allowed to hit lower lows, ostensibly to increase the US trade advantage, which is laughable. It could add ½% to GDP at 71.18 and 1% at 65 on the USDX, which is not a solution for the American economy. Always left out of the reporting is that a lower dollar means higher prices for commodities and goods imported into the US and considerably more inflation. It will not encourage more foreign investment, because investors do not know how low the dollar will fall and it will not appreciably increase job opportunities. Jobs are still moving offshore to bolster 3rd world economies and to make giant untaxed profits for transnational conglomerates. Free trade, globalization, offshoring and outsourcing were created to destroy the economies of the US, Europe and Canada and that is exactly what has happened and will continue to happen, because our purchased Congress won’t legislate the solution, which is tariffs on goods and services. We are well on our way to joining the third world and if you do not let Congress know you know what they are up too, then you will eventually live in a slum reminiscent of Calcutta, either that or in some US detention camp. The bottom line is a lower dollar is disastrous for the US economy. The US is being slowly strangled to death. Who wants to invest in a country that is on the edge of real trouble, plus all the environmental laws and onerous taxes? Readers, most people do not have a clue as to how bad it is.

Last week the Dow added 0.8%; the S&P was unchanged, the Russell 2000 fell 0.4% and the Nasdaq 100 was unchanged. Cyclicals rose 0.5%; transports fell 0.2%; consumers fell 0.3% and utilities rose 4%. Banks fell 1.5%; broker/dealers fell 2.5% and high-tech fell 0.6%. Semis were unchanged; Internets fell 0.3% and biotechs rose 0.1%. Gold bullion ended the week off $47.00 and the HUI fell 5.8%. The dollar rose 0.8% to 76.53.

Two-year T-bills fell 2 bps to 0.73%, the 10’s rose 8 bps to 3.55% and the 10-year German bund fell 3 bps to 3.21%.

Freddie Mac’s 30-year fixed rate mortgage jumped 10 bps to 4.81%; the 15’s rose 5 bps to 4.32% and one-year ARMs fell 1 bps to 4.24%. the 30-year jumbos fell 17 bps to 5.82%.

Fed credit declined $19.3 billion to $2.168 trillion. That is down $78.7 billion ytd, and $73.7 billion yoy. Fed foreign holdings of treasury debt gained $12.1 billion to a record $2.944 trillion. Custody holdings for foreign central banks expanded at an 18% rate ytd, up $450 billion yoy.

M2, narrow money supply leaped $22.6 billion to a record $8.414 trillion, up 29% ytd and 4.5% yoy.

Total money market assets added $1.1 billion to $3.320 trillion. They have declined $520 billion ytd, or 14.1% annualized. They fell $457 billion, or 12.1% yoy.

A record 37.2 million people, or about one out of every eight Americans, received food stamps in September, as the recession drove a surging jobless rate, according to a government report.

Recipients of the subsidy for retail-food purchases climbed 18 percent from a year earlier, according to a statement posted today on the U.S. Department of Agriculture’s Web site. Participation has set records for 10 straight months.

The government boosted food aid as unemployment soared, heading to a 26-year high of 10.2 percent in October. The jobless rate cooled to 10 percent last month, the Labor Department said on Dec. 4.

“We’ve been working to get that money out the door” to families that need assistance, Deputy Agriculture Secretary Kathleen Merrigan said last week in an interview.

Nevada had the biggest increase in food-stamp participation rates from a year earlier, surging 54 percent, followed by a 46.5 percent jump in Utah, according to the USDA. Texas had the most recipients at 3.1 million, followed by California with 2.9 million and New York with 2.6 million.

Recipients increased in every state and the District of Columbia, except Louisiana. Because of a sharp rise after Hurricanes Ike and Gustav in 2008, the number of people in Louisiana getting food stamps fell 65 percent in September from a year earlier. Gains of more than 30 percent from 2008 were reported in 18 states.

About 35 million people are expected to receive food stamps each month through the Supplemental Nutrition Assistance Program in the fiscal year that began Oct. 1, according to the budget that President Barack Obama sent to Congress in May.

“In this economic time, SNAP has been essential,” Merrigan said. The participation rate of state residents who are eligible for food stamps varies widely, the USDA said last month in a report based on 2007 data.

In Missouri, about 100 percent who were eligible that year took advantage of the program, the highest rate in the nation, followed by residents of Maine and Michigan, at 91 percent and 89 percent, respectively, the USDA said. Wyoming’s participation rate of 47 percent was the lowest in fiscal 2007, followed by California and Idaho at 48 percent and 50 percent, according to the study.

Nationwide, participation in the food-stamp program was 66 percent of those eligible for the aid in 2007, the USDA said. The department has budgeted for a rate of 68 percent in the current 2010 fiscal year.

“We know of a lot of people who are SNAP-eligible who are not participating in the program,” Merrigan said. “We are working with states to improve participation.”

Colonial BancGroup Inc.’s collapse in mid-August could cost the Federal Deposit Insurance Corp. more than double the amount it originally projected.

Colonial, which was deemed the sixth largest bank failure in U.S. history after its seizure four months ago, had a current net worth of negative $5.8 billion by the end of the third quarter. That’s far worse than its original estimate of $2.8 billion to its insurance fund, according to recent data released by the FDIC.

“It basically says Colonial was a lot worse off than everybody thought it to be,” said Bert Ely of Alexandria, Va.-based bank consulting firm Ely & Co.

Also, the FDIC possesses more than $4.2 billion of the Montgomery-based bank’s assets currently in liquidation. However, the FDIC also expects to loss more than $3.1 billion on those assets, according to a balance sheet posted by the FDIC.

Citigroup Inc. reached an accord with the Treasury Department and regulators to repay $20 billion of the bailout it received from U.S. taxpayers.

The lender will sell $20.5 billion of capital and debt, the New York-based bank said in a statement today. The bank will sell $17 billion of common stock, with an over-allotment option of $2.55 billion, and $3.5 billion of tangible equity units. The U.S. Treasury will concurrently sell as much as $5 billion of common stock it holds. The bank said it will also substitute “substantial common stock” for cash compensation.

Chief Executive Officer Vikram Pandit has pressed for an exit from the Troubled Asset Relief Program to avoid being the only large bank left on “exceptional assistance,” a Treasury designation reserved for companies including American International Group Inc. and General Motors Corp. that are surviving on taxpayer aid. Bank of America Corp. exited last week after paying back $45 billion of bailout funds.

The cost of protecting investors against Dubai defaulting on its debt tumbled the most since February after Abu Dhabi pledged $10 billion to help the emirate meet its obligations.

Five-year credit-default swaps on Dubai’s debt fell 115 basis points to 425.5, according to CMA DataVision prices at 11:40 a.m. in London. The Markit iTraxx SovX Western Europe index of swaps on 15 governments dropped 4.75 basis points to 62, according to JPMorgan Chase & Co.

Funds from Abu Dhabi, the capital of the United Arab Emirates and owner of the world’s biggest sovereign wealth fund, will help Dubai World unit Nakheel PJSC pay investors the $4.1 billion it owes on Islamic bonds maturing today. State-owned Dubai World roiled markets worldwide when it said Dec. 1 it was in talks with creditors to restructure $26 billion of debt.

 

Antichrist Watch: Satan..er Simon Says We Must All Listen To Prince Charles

http://www.telegraph.co.uk/news/newstopics/theroyalfamily/6840547/Why-we-must-listen-to-Prince-Charles.html

Satanic fiend. Zionist reprobate. Ignoble and debased wife muderer?

 

Gold Commentary

I will write something up later tonight or Saturday after I can study the COT data. It is travel day.

 

Goldman Sachs Crime Watch- Time To Breakup Goldman Sachs

It goes beyond bringing back the Glass-Steagall act. OTC derivative contracts and leverage employed Goldman Sachs pose systemic risk. The Fiat/fractional reserve system is just a wealth transfer vehicle. All the money that goes to WS ends up in Goldman Sachs pockets as they naked short, front run their customers and the market with high frequency trading, and use OTC derivatives and CDS in particular to manipulate markets and force bankruptcies, and let us not forget about their subprime mortgage foreclosure business. Upon occasion Bloomberg has to allow someone to have some rational discourse, else they would be seen for the complete WS shills they are.

http://www.bloomberg.com/apps/news?pid=20601039&sid=acB6gG_pifUY

Dec. 18 (Bloomberg) — Let’s make banking boring again. That is the noble goal of those calling for a return to the days when the Glass-Steagall Act separated commercial and investment banking.

The idea is that banks taking deposits insured by the Federal Deposit Insurance Corp., and so backed by taxpayers, shouldn’t play in the capital-markets casino.

To really achieve this, though, legislators may have to do more than restrict what banks can do. They may have to bring Wall Street back to life.

That would be the natural consequence of forcing some too- big-to-fail banks to go back to their commercial-banking roots, as envisaged by legislation proposed earlier this week by Senators John McCain and Maria Cantwell.JPMorgan Chase & Co. would have to spin off Bear Stearns. Bank of America Corp. would have to shed Merrill Lynch. Citigroup Inc. would have to hive off its own investment-banking activities.

Given all that’s happened over the past two years this might sound crazy. Actually, it can make lots of sense if Congress simultaneously splits up Wall Street titans such as Goldman Sachs Group Inc.

And let’s not forget that the Glass-Steagall separation worked for more than 60 years, from its passage in 1933 until its repeal in 1999. The prohibition even gave birth to firms such as Morgan Stanley, which in 1935 was spun off from what is now JPMorgan.

First, though, a practical question: does such legislation have any chance at success?

Long Odds

The odds are against it. Yet the politics of Wall Street, bailouts and the economy are fluid, especially since 2010 will see Congressional elections.

Plus, McCain and Cantwell aren’t the only ones buzzing about Glass-Steagall. Earlier this week, House Majority Leader Steny Hoyer said a return to that system “is certainly under discussion.”

No wonder analysts at FBR Capital Markets in a research note yesterday hedged their bets on just how far this may go. While a forced breakup of banks may prove “too big to swallow” for Congress, they wrote, “this debate is going to garner the spotlight much more quickly than we expected.”

Politics aside, a renewed embrace of Glass-Steagall would give current reform legislation real teeth.

The bills now in Congress provide for more stringent regulation of financial institutions and impose rules such as stronger capital requirements and a cap on the amount of borrowed money firms can use to juice profit.

Falling Short

Yet they don’t tackle the issue of too big to fail. Instead, by saying only that regulators can break them up as a last resort, the legislation in the House gives the firms a privileged status and doesn’t remove the threat that taxpayers may again have to rescue them.

If the current strictures were combined with a new Glass- Steagall-like provision, reform would have muscle.

Granted, Glass-Steagall isn’t a silver bullet. Plenty of banks got into trouble in their bread-and-butter business of lending to homeowners and businesses; Washington Mutual was a good example.

That’s why the provisions in existing legislation for beefed up regulation and capital are important, even if they don’t go far enough on their own.

Congress shouldn’t stop there, though. Simply saying that Goldman Sachsand Morgan Stanley are no longer bank-holding companies (a coveted status they received last fall that allows them to borrow at the Federal Reserve’s discount window), as would likely happen under a Glass-Steagall-like split, won’t go far enough. A newly reconstituted Wall Street would need to be further divided.

Bundles of Conflicts

As things now stand, Wall Street and big banks are bundles of conflicts that too often pit firms against their customers. That led to some of the riskier practices that helped fuel the financial crisis.

Investment houses underwrote and sold investors complex bundles of mortgages, for example, even as they bet the housing market would crater.

This needs to change. Either a firm is an adviser, a broker, an asset manager or a hedge fund. It can’t be all things to all customers. Nor can a firm be all those things and not create the kind of linkages that threaten the stability of the financial system.

So firms should have to choose between being, say, brokers and investment bankers versus proprietary trading shops or asset managers.

Making a Choice

In that case, if Goldman Sachs wants to be a giant hedge fund, that’s all it should be. After all, some smaller, focused players such as hedge funds failed during the crisis but didn’t require taxpayer bailouts.

Splitting up Wall Street would also make finance easier to regulate. In their current agglomerated state, too many firms are impenetrable black boxes.

Regulators don’t really know what’s going on inside. Neither do investors. And it often seems management is clueless as well.

To be sure, changes along these lines would be painful and bitterly opposed by banks and Wall Street. They would also be tough to swallow since foreign banks wouldn’t face similar restrictions.

Even former Federal Reserve Chairman Paul Volcker, who for months seemed like a lone voice in favor of Glass-Steagall, has admitted it’s tough to draw the line between certain banking and trading activities.

Still, it’s worth a try. The result, as McCain said, may be “a larger number of smaller, more aggressive companies that are not so big that their failure would bring the entire economy down.”

That would be good for markets, competition, the economy, and ultimatelybanks themselves.

Plus, if Congress isn’t willing to find a new way to end the threat of too-big-to-fail firms, why not revisit a proven antidote.

 

Obama told China: I can’t stop Israel strike on Iran indefinitely

U.S. President Barack Obama has warned his Chinese counterpart that the United States would not be able to keep Israel from attacking Iranian nuclear installations for much longer, senior officials in Jerusalem told Haaretz.

They said Obama warned President Hu Jintao during the American’s visit to Beijing a month ago as part of the U.S. attempt to convince the Chinese to support strict sanctions on Tehran if it does not accept Western proposals for its nuclear program.
The Israeli officials, who asked to remain anonymous due to the sensitivity of the matter, said the United States had informed Israel on Obama’s meetings in Beijing on Iran. They said Obama made it clear to Hu that at some point the United States would no longer be able to prevent Israel from acting as it saw fit in response to the perceived Iranian threat.

After the Beijing summit, the U.S. administration thought the Chinese had understood the message; Beijing agreed to join the condemnation of Iran by the International Atomic Energy Agency only a week after Obama’s visit. But in the past two weeks the Chinese have maintained their hard stance regarding the West’s wishes to impose sanctions on the Islamic Republic.

The Israeli officials say the Americans now understand that the Chinese agreed to join the condemnation announcement only because Obama made a personal request to Hu, not as part of a policy change.

The Chinese have even refused a Saudi-American initiative designed to end Chinese dependence on Iranian oil, which would allow China to agree to the sanctions, said the Israeli officials.

Saudi Arabia, which is also very worried about the Iranian nuclear program and keen to advance international steps against Iran, offered to supply the Chinese the same quantity of oil the Iranians now provide, and at much cheaper prices. But China rejected the deal.

Since Obama’s visit, the Chinese have refused to join any measures to impose sanctions. The Israeli officials say the Chinese have been giving unclear answers and have not been responding to the claims by Western nations. Beijing has been making do with statements such as “the time has not yet arrived for sanctions.”

China’s actions are particularly problematic because China will take over the presidency of the UN Security Council in January. Western diplomats say China would have no choice but to join in sanctions if Russia agrees to support them, but China could delay discussions and postpone any decision until February, when France becomes council president.

The Israeli officials say Russian President Dmitry Medvedev is showing a greater willingness for sanctions on Iran, despite hesitations by Foreign Minister Sergey Lavrov.

http://www.haaretz.com/hasen/spages/1135730.html

 

Russian Scientists Finger English Zionist Scientists For Forging Climate Data

Climategate goes SERIAL: now the Russians confirm that UK climate scientists manipulated data to exaggerate global warming

Last updated: December 16th, 2009

Climategate just got much, much bigger. And all thanks to the Russians who, with perfect timing, dropped this bombshell just as the world’s leaders are gathering in Copenhagen to discuss ways of carbon-taxing us all back to the dark ages.

Feast your eyes on this news release from Rionovosta, via the Ria Novostiagency, posted on Icecap. (Hat Tip: Richard North)

A discussion of the November 2009 Climatic Research Unit e-mail hacking incident, referred to by some sources as “Climategate,” continues against the backdrop of the abortive UN Climate Conference in Copenhagen (COP15) discussing alternative agreements to replace the 1997 Kyoto Protocol that aimed to combat global warming.

The incident involved an e-mail server used by the Climatic Research Unit (CRU) at the University of East Anglia (UEA) in Norwich, East England. Unknown persons stole and anonymously disseminated thousands of e-mails and other documents dealing with the global-warming issue made over the course of 13 years.

Controversy arose after various allegations were made including that climate scientists colluded to withhold scientific evidence and manipulated data to make the case for global warming appear stronger than it is.

Climategate has already affected Russia. On Tuesday, the Moscow-based Institute of Economic Analysis (IEA) issued a report claiming that the Hadley Center for Climate Change based at the headquarters of the British Meteorological Office in Exeter (Devon, England) had probably tampered with Russian-climate data.

The IEA believes that Russian meteorological-station data did not substantiate the anthropogenic global-warming theory. Analysts say Russian meteorological stations cover most of the country’s territory, and that the Hadley Center had used data submitted by only 25% of such stations in its reports. Over 40% of Russian territory was not included in global-temperature calculations for some other reasons, rather than the lack of meteorological stations and observations.

The data of stations located in areas not listed in the Hadley Climate Research Unit Temperature UK (HadCRUT) survey often does not show any substantial warming in the late 20th century and the early 21st century.

The HadCRUT database includes specific stations providing incomplete data and highlighting the global-warming process, rather than stations facilitating uninterrupted observations.

On the whole, climatologists use the incomplete findings of meteorological stations far more often than those providing complete observations.

IEA analysts say climatologists use the data of stations located in large populated centers that are influenced by the urban-warming effect more frequently than the correct data of remote stations.

The scale of global warming was exaggerated due to temperature distortions for Russia accounting for 12.5% of the world’s land mass. The IEA said it was necessary to recalculate all global-temperature data in order to assess the scale of such exaggeration.

Global-temperature data will have to be modified if similar climate-date procedures have been used from other national data because the calculations used by COP15 analysts, including financial calculations, are based on HadCRUT research.

What the Russians are suggesting here, in other words, is that the entire global temperature record used by the IPCC to inform world government policy is a crock.

http://blogs.telegraph.co.uk/news/jamesdelingpole/100020126/climategate-goes-serial-now-the-russians-confirm-that-uk-climate-scientists-manipulated-data-to-exaggerate-global-warming/

 

Luxury-Home Owners in U.S. Use ‘Short Sales’ as Defaults Rise

Rich people typically ‘get even’ when they are ripped off. The Billionaires and Trillionaires squeeze the Millionaire crowed.

By Kathleen M. Howley and Dan Levy

Dec. 17 (Bloomberg) — Homeowners with mortgages of more than $1 million are defaulting at almost twice the U.S. rate and some are turning to so-called short sales to unload properties as stock-market losses and pay cuts squeeze wealthy borrowers.

“The rich aren’t as rich as they used to be,” said Alex Rodriguez, a Miamireal estate agent with JM Group USA Inc., whose listings include a $2.9 million property marketed as a short sale because the price is less than the mortgage, leaving the bank with a loss. “People have reached the point where they can’t afford the carrying expenses of a $2 million home.”

Payments on about 12 percent of mortgages exceeding $1 million were 90 days or more overdue in September, compared with 6.3 percent on loans less than $250,000 and 7.4 percent on all U.S. mortgages, according to data from First American CoreLogic Inc., a Santa Ana, California-based research firm. The rate for mortgages above $1 million was 4.7 percent a year earlier.

As defaults on the biggest mortgages rise, borrowers such as Steve Holzknecht are turning to short sales to exit loans that now are larger than the market value of the house. In such a transaction, the lender agrees to accept less than a 100 percent payoff on a mortgage to expedite the property’s sale.

Holzknecht, 53, last month cut the asking price for his 7,280-square-foot home in Kirkland, Washington, by $550,000 to $1.25 million, lower than the balances of his two mortgages. Holzknecht, the former owner of Four Suns Inc., a Seattle luxury homebuilder that went out of business two months ago, constructed the Craftsman-style home in 2000. He declined to identify his lenders or the amount he owes.

Common Plight

“It’s not uncommon to see this situation on the high end of the market — homes selling for less than it would cost to build them,” said Holzknecht’s agent, Joe Flick of Roanoke Group in Seattle. The property came on the market eight months ago priced at $1.85 million, he said.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aQED_96QBBkk

 

Physical Silver Demanding -”Smokin”

Buyers spurn gold for silver

A leading bullion dealer says that there has been a marked interest from investors for silver in recent weeks.

By Emma Wall Published: 12:05PM GMT 17 Dec 2009

Investors are looking to silver as an alternative to gold with a leading dealer reporting that one-ounce silver rounds are outselling anything else by a factor of 10 to one.

“Silver rounds” – which look like coins but are not legal tender – are selling well at the moment, according to Alex Baird of Baird & Co, the bullion dealer. “One-ounce silver rounds at £14.50 with a box are outselling anything else by a factor of 10 to one,” he said. “They are significantly cheaper than silver coins.”

Silver has the potential to grow in value as it is both a precious metal and an industrial one. It is used in photographic equipment, as an antibacterial agent in water filters and has the highest electrical and thermal conductivity of any element.

Fresnillo, a silver mining company, is second best performer in All-share this year with an increase of 490pc, according to DigitalLook. Meanwhile, the iShares Silver Trust has returned 55pc this year according to Morningstar.

Evy Hambro, co fund manager of the BlackRock Gold and General Fund, said: “Fresnillo is very strong. It has good management, world-class silver mines and an exceptional exploration portfolio, and is forecasting considerable growth in production. That is why it is one of the top ten holdings in the Gold and General fund.

“Many investors take the view that the silver price is linked to the gold price, but we look at silver on its own fundamentals. Over the near term we think the environment is positive for silver”.

StockMarketsReview, state that while silver may be more vulnerable to financial shocks than gold- it also has further to grow in the future.

It added: “Silver prices fell by 56pc from the high of $20.75 in early March 2008 as compared to 29pc decline in the yellow metal. We firmly believe that a good amount of steam is left in the ongoing rally in silver and it would continue to outperform gold in returns.

http://www.telegraph.co.uk/finance/personalfinance/investing/gold/6827616/Buyers-spurn-gold-for-silver.html

 

Gross Selling UST, Raising Cash, Says UST Overvalued Compared to Inflation Risk

Dec. 18 (Bloomberg) – Bill Gross, who runs the world’s biggest bond fundat Pacific Investment Management Co., cut holdings of government debt and boosted cash to the most since Lehman Brothers Holdings Inc. collapsed in September 2008.

Gross increased cash in the $199.4 billion Total Return Fund’s to 7 percent in November from negative 7 percent in October, according to Pimco’s Web site. The fund can have a so- called negative position by using derivatives, futures or by shorting. He reduced government-related securities to 51 percent from a five-year high of 63 percent in October.

Pimco is selling government debt as economists say U.S. gross domestic product will grow enough in 2010 to lead the Federal Reserve to raise interest rates. The Fed will increase its target for overnight loans between banks to 0.75 percent in a year, versus the current range of zero to 0.25 percent, a Bloomberg survey of banks and securities companies shows.

“Yields will rise next year,” said Tsutomu Komiya, an investment manager in Tokyo at Daiwa Asset Management Co., which oversees the equivalent of $77 billion. “The U.S. economy will recover and there is a possibility of a rate hike.”

Treasuries Overvalued

Gross told CNBC on Dec. 7 that Treasuries are overvalued compared to potential inflation. Mark Porterfield, a spokesman at Pimco’s main office in Newport Beach, California, has said the company doesn’t comment on fund holdings.

http://www.bloomberg.com/apps/news?pid=20601103&sid=aomISU.unZU4

 

Moody’s ‘axe blow’ to rating on Spanish debts

The debt crisis sweeping southern Europe has deepened after US credit-rating agency Moody’s downgraded €112bn (£100m) of Spanish mortgage debt and slashed the ratings of Catalunia and a raft of regions with ballooning state deficits.

By Ambrose Evans-Pritchard, International Business Editor

Published: 6:05AM GMT 18 Dec 2009

Spain’s media called the move an “axe blow”, fearing a domino effect through the country’s debt markets. Credit default swaps measuring the risk on Spanish sovereign bonds jumped 10 basis point to 101 yesterday.

Moody’s downgraded a third of the entire stock of Spanish mortgage bonds or “cedulas” – covered bonds deemed safer than US sub-prime securities – but also made from debt that is sliced into packages. Most were cut from AAA (Aaa) to Aa1. They are largely owned by German or French banks and pension funds.

The agency said the Spanish savings banks that issued the bonds are heavily exposed to Spain’s property crash. Moody’s said it had based its stress test on assumptions of a 45pc fall in house prices.

The scale of yesterday’s action is huge, roughly equal to a trillion-dollar downgrade in US terms. Spanish banks avoided damage from the global credit crunch because they eschewed US toxic debt, but their own internal sub-prime crisis is slowly catching up with them.

Professor Luis Garciano from the London School of Economics said Spain’s property bubble left an over-supply of 1.5m homes, the most concentrated glut in the world.

The country topped Moody’s worldwide “misery index” this week as a result of its fiscal deficit and high jobless rate – now 19pc, and 41pc for youth. The IMF expects the country to grind on in near perma-slump next year.

Spain’s travails came as bonds and equities took another pounding in Greece, where Communist unions launched a 24-hour strike and workers marched in protest against austerity measures.

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/6835711/Moodys-axe-blow-to-rating-on-Spanish-debts.html

 

Andy Xie Says China in Inflationary Bubble

China ‘imports’ inflation from the USA with the dollar peg and by buying USA debt. The only thing going to get rid of their inflationary bubble is to stop buying USD and letting their currency appreciated.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=auKk5dlX_LAQ

Dec. 18 (Bloomberg) — China’s property and stock markets are a “bubble” that will burst when inflation accelerates in 2011, former Morgan Stanley chief Asian economist Andy Xie said.

“China’s asset markets are a ponzi scheme,” Xie, now an independent economist based in Shanghai, said in an interview in Hong Kong. “Property is heading for one huge bust that will take a year and a half to unfold.”

The benchmark Shanghai Composite Index tumbled 2.1 percent today, led by a plunge in property shares including China Vanke Co., the biggest developer. A measure of real estate stocks fell 9.3 percent this week, the most since August, on concern the government will step up measures to curb property speculation.

Chinese residential prices climbed last month at the fastest pace since July 2008, spurred by China’s 4 trillion yuan ($586 billion) stimulus package and record lending. The Shanghai Composite has gained 71 percent this year, while the 15 real- estate shares on the MSCI China Index have risen by more than 90 percent on average.

“It’s a less glamorous version of the Greenspan bubble and the story will end with inflation,” Xie said, referring to former Federal Reserve Chairman Alan Greenspan, who was once regarded by some observers as the greatest central banker and has seen his legacy criticized since the U.S. subprime-mortgage market collapsed in 2007.

Interest Rates

Economists estimate China’s interest rates may increase 54 basis points in the second half of next year, Bloomberg data show. One basis point is 0.01 percent. Borrowing costs may climb 54 basis points to 81 basis points in the second quarter, according to Gabriel Gondard, Shanghai-based deputy chief investment officer at Fortune SGAM Fund Management Co., which oversees about $7.2 billion in assets.

A central bank survey this week showed almost half of Chinese view inflation as excessive, contrasting with government figures showing that consumer prices have fallen for most of this year. On Dec. 11, the government announced that consumer prices climbed 0.6 percent in November from a year earlier, snapping a nine-month run of deflation. Prices will stay largely stable and the chances of significant inflation next year are not big, the nation’s top economic planning agency said Dec. 14.

“Inflation is a concern,” Mark Konyn, who helps oversee about $12 billion as chief executive officer in Hong Kong at RCM Asia Pacific Ltd., said in an interview yesterday. “It will be an issue in 2010.”

‘Struggle’

In the shorter term, China’s yuan-denominated stocks may “struggle” in the next three to four months before staging a rally that may help the market exceed its 2009 highs as banks resume lending, Xie, who correctly predicted in April 2007 that China’s equities would tumble, told Bloomberg Television.

The Shanghai Composite, tracking the larger of China’s two stock exchanges, has fallen 10 percent from this year’s Aug. 4 peak of 3,471.44.

Poly Real Estate, China’s second-largest developer, plunged 7.5 percent to 21.88 yuan today, its ninth straight loss. China Vanke dropped 6 percent to 10.59 yuan, the most since Sept. 30.

Property stocks slumped this week after the Xinhua News Agency reported the government will target “excessive” growth in property prices in some cities. That follows the cabinet’s statement last week that it will re-impose a sales tax on homes sold within five years, after cutting the period to two years in January. Even after this week’s retreat, the measure of property shares has gained 99 percent, the second-best performer among the gauge’s 10 industry groups.

New Highs?

“Markets are going to struggle in the next three to four months and then afterwards, China’s lending policy may help it along in the second half,” he said. “It’s possible that the A- share market may make a new high in terms relative to the Aug. 4 high this year.”

Xie said today that Hong Kong stocks are also about 30 percent “overvalued” and may face a “major correction” in the next four to five months as the market factors in a possible stimulus exit by the Fed. The market may recover in the second half, he predicted.

Morgan Stanley, Xie’s former employer, said this week that China’s stock market is headed for a “boom and bust” in 2010 because a rally in the first half may stall as inflation accelerates and the government withdraws some stimulus. The brokerage predicted that the MSCI China Index may rise to 81.7 next year, 29 percent higher than yesterday’s close.

 

ECB Forecasts an Additional $268 billion in Write-downs

http://www.bloomberg.com/apps/news?pid=20601087&sid=aDByXJegUBII

Dec. 18 (Bloomberg) — Euro-region banks may have to write down an additional 187 billion euros ($268 billion) as loans to property companies and eastern European nations threaten the recovery in financial markets, the European Central Bank said. The ECB raised its estimate for writedowns by 13 percent to 553 billion euros for the period of 2007 through 2010. The ECB, which published its Financial Stability Review today, also said that “the surge in government indebtedness” around the world is a risk to financial stability and that some European banks are still reliant on emergency funding. “An important reason behind the rise is the further deterioration in commercial property-market conditions,” the report said. “This has contributed to an upward revision in to the estimate of potential writedowns on bank’s exposures to commercial property mortgages and commercial mortgage-backed securities.” Policy makers are trying to gauge the health of the financial system to better time the withdrawal of emergency measures without unsettling markets. While Deutsche Bank AG and Credit Suisse Group are among banks reporting rising earnings, financial institutions worldwide are rebuilding balance sheets after writing down $1.7 trillion since the U.S. property slump sparked a global crisis. U.S. commercial real estate prices have plunged about 40 percent since October 2007, according to the Moody’s/REAL Commercial Property Price Indices. The ECB said that risks to banks include the “concentrations of lending exposures” to “central bank and eastern European countries.” It didn’t identify any specific nations. Unlimited Funds Banks must improve their quality of capital, increasing the amount of equity and retained earnings they hold, by the end of 2012 to be able to withstand losses better, the Basel Committee on Banking Supervision said yesterday. “The remaining losses will have to be buffered with banks’ core earnings over a relatively shorter period of time,” the ECB report said. About $1.5 trillion of capital has been raised by banks globally since the crisis started, according to Bloomberg data. As markets recover and growth resumes, the ECB has already said it will rein back its unlimited offerings of cash to banks next year. Vice President Lucas Papademos said at a press briefing today that conditions have improved “substantially in all funding sectors.” At the same time, some banks “remain reliant on temporary support measures extended by the Eurosystem and governments,” he said. European Risks With the public finances of some eastern European countries under scrutiny, the ECB warned that banks should be wary of their loan exposure. The Austrian Central Bank on Dec. 14 said a stress test scenario over the next two years expects about 20 percent of loans at banking units in Eastern Europe to default. “Overall I don’t think it’s a significant problem for the euro-area financial system but it could have important implications for certain banking groups,” Papademos said in an interview. European governments have spent $5.3 trillion shoring up banks since the collapse of Lehman Brothers Holdings Inc., according to European Union data. In addition to flooding banks with cash, the ECB has cut interest rates to a record low and started buying 60 billion euros worth of covered bonds. Papademos today cautioned against “timing errors” in unwinding public support. “In particular, exit decisions by governments will need to carefully balance the risks of exiting too early against those of exiting to late.” Early Exit The report said pulling government support too early risks “triggering renewed financial system stresses.” Waiting too long “can entail the risk of distorting competition, creating moral hazard risks” and may exacerbate “risks for public finances,” the report said. Papademos also urged the Greek government to take “substantial’ decisions to cut the European Union’s largest budget deficit and ease concerns about its fiscal health. The ECB also considered a broader range of risks than in its June report, taking “better account” of collateralized debt obligations and residential mortgage-backed securities, it said.