Unemployment Rate, Goldman Sachs, and Dow 9,000

The Dow hit 9,000 today. I currently have positions in SRS, QID, and EDZ.

Bought SRS and Goldman's trading platform pilfered

I bought SRS at 21.48. The market needs to correct badly and the rally has not factored in all the negative news.

I also ran across an interesting article about an immigrant stealing Goldman Sach's trading platform.

A Goldman trading scandal?

10 Year Bond @ 4%. US Dollar and massive buying pushing the markets higher

The 10 year bond hit 4% today, doubling in only 6 months. This is a complete negative for the economy, since it will limit growth and mortgage applications. Meanwhile, the United States dollar continues to weaken, pushing the stock markets higher and making commodity prices rise.

There has also been suspicious "propping up" of the stock market during the last half hour or hour of the day. Whoever is doing this (most likely the Federal Reserve or Plunge Protection team) must have a lot of money to move the markets.

Silver posts biggest monthly gain in 22 years; gold rallies

http://www.marketwatch.com/story/silver-poised-for-biggest-monthly-gain-in-22-years-200952991600

Federal Reserve may soon replace the SEC

Bloomberg: U.S. May Strip SEC of Powers in Regulatory Overhaul

If this does happen, then it will be disastrous. What the government is essentially allowing to happen is shifting its regulatory powers into private hands. We all know how damaging the Federal Reserve is to our lives, and to allow them to regulate our markets will give even more power to their hands.

"The Worst Is Yet to Come": If You're Not Petrified, You're Not Paying Attention

Keith Boykin and Rick Santelli debate Obama's budget

2009 Economic Recovery Update by VisionVictory

The government isn't telling us the truth...

Goldman Sachs and JP Morgan: Ultimate Manipulators of the Stock Market

I recently came across a blog at http://www.goldmansachs666.com/

The blog has some very interesting evidence of Goldman Sachs manipulating the stock market and deceiving the American people. It's also interesting that Goldman has had a huge run up since January while other financials have sunk. Also, if you look at the past two weeks, there is very strange activity on Goldman Sachs and the market in general during the last half hour of trading. A huge buy program comes in and props the Goldman (and the stock market) up. It's also interesting to note that Stephen Friedman, who is the current chairman of the NY Federal Reserve, is also a director at Goldman Sachs. Remember that the previous Treasury Secretary, Henry Paulson, was also linked to Goldman as former Chairman of the Board and CEO.

Wall Street Journal: New York Fed Chairman's Ties To Goldman Raises Questions

If you've been following my blog, you also know how manipulative JP Morgan is in the derivatives and silver market. However, I've just learned today that JP Morgan's CEO, Jamie Dimon, is also a board member at the Federal Reserve Bank of New York. There is a HUGE conflict of interest here.

Wikipedia: Federal Reserve Bank of New York

Why do you think Goldman Sachs and JP Morgan don't need to raise additional capital after the government "stress tests"? The answer is simple: Goldman Sachs and JP Morgan is the Federal Reserve in disguise!!!

Put Options on the S&P 500.

I bought PUT options on the S&P 500 because this rally is ridiculous and way overbought. There is no fundamental or technical reasoning behind the latest market moves. My blog post above explains why the market has been rallying: Manipulation by Goldman Sachs, JP Morgan and the Federal Reserve.

Bear Market Rally of March, April, May 2009? You decide!

What're the banks really spending our bailout money on?

Sold FAZ and new strategy for beating the system

I sold FAZ today at 4.45. I'm also going to utilize a new strategy to beat the system.

I'm going to trade the manipulated stock market and use the proceeds to buy more bullion/mining shares. That way you can take advantage of the moves when the banks manipulate the price of precious metals down by buying more.

YTD I have a 61.4% realized gain.

Market continues to move higher... but I remain true to my position

The recent market run-up should be or near a short term top. If this was two years ago, I would've sold out of my position because of margin calls. However, I'm a much smarter investor than before and learned not to put more chips down that I had to borrow. The banks also use this "margin" game to lower the price of precious metals and forcing people to sell. After all... margin and excessive greed is how the banks collapsed right?

However, I have covered my BGU position and bought FAZ, since I believe the financials are very bloated right now. I also noticed something very interesting on Friday. The market rallied without JPM (JP Morgan Chase) and GS (Goldman Sachs) joining in. These two financials are the market leaders right now. For them to show a little bit of weakness when the market is rallying may be telling us something...

Found a hilarious website today... Making ur economy betters

If any of you are I Can Has A Cheezburger fans?, I'm sure you'll enjoy the site I'm going to post below.

LOLFed: making ur economy betters

Shorting BGU @ 27.13

I reshorted BGU at 27.13. The market cannot keep going higher like this. Wall Street is rallying right now on false hopes and expectations.

Covered BGU @ $25.83 and bought some silver over the weekend

I placed an order for more silver over the weekend since APMEX had a fire sale. Many of their stock went quickly; the Silvertowne 5oz bars and Walking Liberty Rounds sold out.

I'm glad that the banks are keeping the price so low. We are at a historic low when you compare to how much silver you can buy with one week's worth of wages. See the YouTube video below for more information.



I also covered BGU for a respectable 3.33% gain. From the day I sold SVM and PAAS, SVM has declined 9.8% and PAAS has declined 12.5%. I will consider shorting FAS tomorrow and rebuying SVM and PAAS at a reduced price.

99 cents over spot for silver at APMEX

APMEX has a 99 cent sale for some silver products this weekend. Take advantage of the steep drop in price and pull the physical silver from the market!

http://www.apmex.com/

Detroit: The New Ground Zero of America

Why you don't want to be buying this recent run-up. Comparison between the "mini bull market" now and 1929 to 1930

Something fishy with Goldman Sachs earnings

Retail sales decline 1.1% unexpectedly in March

Unexpectedly? It was no surprise to me. The government always hides the true numbers. If the government manipulated numbers are surprising Wall Street to the downside, you can only imagine what the real numbers are.

Shakedown or Breakdown?

There is way too much optimism now on Wall Street. The crisis has only begun.

JP Morgan Chase. Healthy? Not at all!

Today I just bought a put option on JPM (JP Morgan Chase) for September at a $20 strike price. Everyone is pumping up this bank because of "their superior management" and their ability to weather the financial storm better than the other banks.

In reality, JP Morgan holds trillions of dollars in derivatives. According to the OCC’s Quarterly Report on Bank Trading and Derivatives Activities for the Fourth Quarter 2008, JP Morgan held $87,362,672,000,000 in derivatives at the end of 2008. That's for the mathematically challenged. It's astonishing that they can have so much exposure with just $1,746,242,000,000 in assets. That's 50 times their assets! They are the biggest holder of derivatives out of all the commercial banks.

Precious Metals not so "Precious" anymore? I think not

So the G-20 has met and everything seems all fine and dandy right? All we need is a $1 trillion dollar bailout for the world and a global regulator. As a result of the G-20's meeting, gold and silver have dropped like a rock. On Friday, I sold all my silver mining companies and shorted the market via shorting the 3x leveraged ETF "BGU" that tracks the Russell 1000 as the recent run up to 8000 from 6500 is just ridiculous. I must be lucky because the silver miners that I held prior to today have also fallen sharply. However, I will use the profits from my short position to add to my physical bullion collection and buy back my silver miners at a reduced price.

This is your opportunity to accumulate more! We should be thankful that the price has dropped. It allows more of the common people to get out of the paper ponzi that are fiat currencies.

Life at Ontario Tent City

Were the banks really profitable in January and February? Also, proof of silver manipulation by JP Morgan and HSBC Confirmed

http://zerohedge.blogspot.com/2009/03/exclusive-aig-was-responsible-for-banks.html

More proof of silver manipulation as per Ted Butler's newest article:
http://www.investmentrarities.com/03-30-09.html

New Home Sales DECREASED 41% in February

New-Home Sales Rise 4.7%
New Home Sales Fell 41% in February 2009

The most violent rallies happen in bear markets

The most violent rallies happen in bear markets. From the close on 3/9/09 of 6547.05 to the close on 3/26/09 of 7924.56 the DJIA has advanced 1,377.51 points, or 21.04%.

Do NOT get suckered into this rally, despite what everyone tells you that our economy is improving, durable goods improved, etc. The worst has yet to hit the fan.

Treasuries Fall on Supply Concern as Seven-Year Sale Looms

Treasuries Fall on Supply Concern as Seven-Year Sale Looms

By Dakin Campbell and Susanne Walker

March 25 (Bloomberg) -- Treasury 10-year note yields rose the most in more than two weeks after an auction of $34 billion in five-year notes drew a higher-than-forecast yield, spurring concern record sales of U.S. debt are overwhelming demand.

U.S. securities dropped even after the Federal Reserve today bought $7.5 billion of Treasury notes, its first targeted purchases of U.S. securities since the early 1960s. The five- year auction drew a yield of 1.849 percent, higher than the 1.801 percent forecast in a Bloomberg News survey of eight trading firms. The Treasury will sell $24 billion of seven-year notes tomorrow.

“In light of all the supply that’s in the market it’s not a surprise that yields have moved back up,” said Jeffrey Caughron, an associate partner in Oklahoma City at The Baker Group Ltd., which advises community banks investing $20 billion of assets. “You don’t want to fight the Fed in this market environment. Even though there is enormous supply, the Fed will do what it can to keep a cap on yields.”

The 10-year note yield rose eight basis points, or 0.08 percentage point, to 2.78 percent at 4:40 p.m. in New York, according to BGCantor Market Data. The price of the 2.75 percent security due in February 2019 fell 21/32, or $6.56 per $1,000 face amount, to 99 23/32.

Yields have now gained 24 basis points in the five days since the Fed’s March 18 announcement it would buy Treasuries sent yields down 47 basis points, the most since 1962.

Five-Year Auction

The 30-year bond yield gained 10 basis points today to 3.73 percent, while the current five-year note yield appreciated eight basis points to 1.81 percent.

The bid-to-cover ratio, which gauges demand by comparing the number of bids to the amount of securities sold, fell to 2.02 from an average 2.18 at the previous 10 sales.

The Treasury Department is selling a record $98 billion in notes this week, eclipsing the record $94 billion auctioned the week ended Feb. 27. The U.K. failed to attract enough bidders today at an auction of 1.75 billion pounds ($2.55 billion) of gilts for the first time in almost seven years.

President Barack Obama’s government is selling record amounts of debt to revive economic growth, service deficits, and cushion the failures in the financial system. Debt sales will almost triple this year to a record $2.5 trillion, according to estimates from Goldman Sachs Group Inc.

Orders for U.S. durable goods unexpectedly rose by 3.4 percent in February, the Commerce Department said today in Washington. Purchases of new homes in the U.S. unexpectedly jumped in February, increasing 4.7 percent to an annual pace of 337,000 after a 322,000 rate in January, Commerce said.

Fed Purchases

“Better than expected economic data, failure of the long- end auction in the U.K. and low demand at the five-year Treasury auction; all these factors combined are leading to higher yields,” said Anshul Pradhan, an interest-rate strategist in New York at Barclays Capital Inc., another primary dealer.

The Fed said it purchased $7.5 billion of U.S. debt spread among 13 of the possible 19 securities eligible for purchase. The notes mature from February 2016 to February 2019, the Federal Reserve Bank of New York said in a statement today. Nearly $22 billion was submitted to the central bank in the first day of buying, the New York Fed said.

“We are really not seeing any kind of meaningful support for the Treasury market,” said Kevin Flanagan, a Purchase, New York-based fixed-income strategist for Morgan Stanley’s individual investor clients. “Conventional wisdom in the market is that the Fed will concentrate on the five- to 10-year or the seven- to 10-year sector.”

‘Poor Communication’

The Fed joins central banks in the U.K. and Japan in extraordinary purchases of government debt. U.S. policy makers announced the decision last week to buy $300 billion of government debt in the next six months along with a plan to more than double purchases of housing debt to $1.45 trillion, hoping to reduce rates on home loans.

The dollar fell the most in almost a week against the euro on concern Treasury Secretary Timothy Geithner supported a Chinese plan to blunt demand among global central banks for the U.S. currency. The dollar weakened as much as 1.2 percent to $1.3651 per euro, the biggest intraday decline since March 19, before trading at $1.3601 at 4:20 p.m. in New York.

Geithner later affirmed the dollar’s role as the world’s reserve currency.

“The poor communication from the Treasury department has complicated the market for Treasuries,” said Baker Group’s Caughron.

Failed Auction

The U.K.’s effort to buy government debt wasn’t enough to prevent today’s failed auction of 40-year gilts, the first time that the government failed to attract enough bids at a sale of debt since 2002. Investors bid for 1.63 billion pounds ($2.4 billion) of 4.25 percent notes, less than the 1.75 billion pounds offered.

“The failed gilt auction doesn’t bode well for Treasuries,” said Michael Franzese, head of government bond trading for Standard Chartered in New York.

Average 30-year fixed mortgage rates were about 2.29 percentage points more than 10-year Treasury yields, versus 1.57 percentage points five years ago. Mortgage rates declined to 4.98 percent in the week ended March 19, according to Freddie Mac, the mortgage-finance company under U.S. government control.

TED Spread

Treasuries lost 1.68 percent this year, according to Merrill Lynch & Co.’s Treasury Master Index. U.S. debt was down 3.4 percent before the Fed announced its purchase program last week.

The difference between what banks and the Treasury pay to borrow money for three months, the so-called TED spread, widened to 1.04 percentage point from 91 basis points on Feb. 10. It reached a two-month high of 1.13 percentage point on March 13. The spread averaged 36 basis points in 2006 before credit markets began to decline the next year.

To contact the reporters on this story: Dakin Campbell in New York at dcampbell27@bloomberg.net; Susanne Walker in New York at swalker33@bloomberg.net

Citigroup receiving bonuses as well; Bill Murphy on Gold Manipulation

AIG isn't the only bailed-out financial firm paying big bucks to managers who helped steer their company to near collapse. Citigroup has pledged millions of dollars in bonuses to senior executives for the next few years, despite lawmakers efforts to eliminate such payments.

Citigroup Plans Big Bonuses Despite Rules Against Them

SVM: Silvercorp Metals Inc.

I just bought stock in this company today.

I highly recommend taking a look at it. It has ZERO debt, and one of the lowest cost silver miners in the world. They have a plentiful cash position and pay a dividend of $.02 per share. They are headquartered in Vancouver but do business in the People's Republic of China. According to their website, China is the third largest silver producing nation with room to grow. It is a high growth play and I advise you to take a look at their website.

Silvercorp Metals Inc.

Hedging against inflation by investing in gold and silver

If you are interested in buying mining stocks, you should seriously look at the companies that make up the XAU index. The link to the XAU index with all the symbols is below. I've also linked to a Wikipedia page listing the percentage allocation of each company that the XAU follows.

XAU Index presented by Kitco
XAU presented by Wikipedia

There is also an ETF with the symbol "GDX" that is traded on the stock exchange. The name of the fund is called the Market Vectors Gold Miners ETF. I've listed the link to their website as well. However, by being an ETF it incurs certain costs and is subject to expense fees. However, these fees are very low at .55% per year. They are also subject to counterparty risk as well.

Van Eck's GDX page

The "GDX" fund is probably the easiest way to diversify with gold stocks as it includes a balance of small, mid and large cap mining companies. If you don't want small caps in your portfolio, then I highly recommend investing in all ten companies that make up the XAU index. However, I do not recommend "GDX" as there is too much risk involved. It is much better to invest in the miners directly without any counterparty risk.

There are also two other funds. Their holdings primarily consist of physical gold and/or silver bullion and are audited frequently. Again, being ETFs there are expense fees but they are relatively low.

CEF: Central Fund Of Canada - Mandated that at least 90% of its holdings must be in gold or silver bullion. Currently it is allocated at 57.7% gold and 39.6% silver with 2.7% being cash and other net assets.
http://www.centralfund.com/

GTU: Central GoldTrust - Holds 95% of its assets in gold bullion.
http://www.gold-trust.com/

Other than CEF and GTU, I would not invest my money in any other ETF that claims to hold or track silver or gold bullion. Many of them don't own the silver or gold bullion in the fund and hold paper certificates instead.

The best way to own gold and silver is to own the physical metal outright. Nothing beats having it right in front of you! You can do this many ways and they include Ebay, APMEX, BullionDirect, and your local coin shops.

Sometimes you need to relax...

Presenting Joe Satriani's "If I Could Fly"

george4title: Californians Scrapping, Squating and Stores Closing Down

VisionVictory: All Roads Lead to Hyper-inflation and a severe Depression

Here is the Gold for Bread Video:



According to http://www.goldgrambars.com/, The value of .1 grams of pure gold is $3.08 on March 19, 2009 (based on $958.50/ounce price).

AIG Bailout? Think Again. Also comments about Federal Reserve and Peter Schiff Video

If you think that the recent $30 billion bailout loaned to AIG was for keeping it afloat, think again. Eliot Spitzer explains in the article linked below that the real scandal is about AIG's counterparties.

It's not the bonuses. It's that AIG's counterparties are getting paid back in full.

The recent media about AIG's rather miniscule "bonus payments" of $165 million pales in comparison to the $30,000 million that remains unaccounted for. Where did THAT money go? Perhaps the recent bailout was a rather "sneaky" way to bailout the entire financial system instead.



The Federal Reserve decided today that it would buy securities totalling over $1 trillion in value. Putting this action in simple terms, it is PRINTING MONEY. Silver was trading as much as 5% down before the Federal Reserve's decision at 2:15 P.M. EST and traded higher when the markets closed at 4:00 P.M. EST This decision immediately proved disastrous for the US dollar, which saw a 3.5% drop today.

Even though the stock market increased nominally today, most investors don't realize that in real terms their net worth has decreased in real terms because of the collapse of the dollar.

The depreciation of the dollar will take many investors unnoticed, and this is only the beginning of an inflationary spiral.

Silver Market in BACKWARDATION

http://goldmoney.com/en/commentary/2009-03-15.html



This is EXTREMELY bullish for the silver market and only adds to the fact that people are wising up. Soon, the banks will not be able to fulfill on their promise to deliver their silver to investors.

While financial companies like AIG continue to defraud the American public and give bonuses to their executives, why not invest in something that is almost guaranteed to go up?

US Mint Suspends Production of More Gold and Silver Coins

US Mint Suspends Production of More Gold and Silver Coins

The paper market manipulation of silver and gold is blatantly obvious and is about to unwind.

GET PHYSICAL METAL today.

Silver Shortage?

Easiest and most efficient ways to invest in silver on the stock market

I will list below the pros and cons of investing in silver via the stock market according to each symbol.

SLV : ishares Silver Trust

• PROS: Most liquid silver investment on the stock market. Tracks the spot price of silver per USD.
  
• CONS: The banks that regulate this fund are no other than Barclays and JP Morgan. JP Morgan is known is be a major manipulator in the price of silver and this ETF is one of their main vehicles on how they can do it. There is a risk that they may not have enough silver in the trust in case of a default. (You may not even own any silver at all!)

AGQ: Ultra Silver ProShares

• PROS: Fund seeks to track the performance of the silver spot market but doubled.
• CONS: Less liquid than SLV and the fund is subject to many risks. Custodian is Brown Brothers Harriman & Co., a large private bank with limited information. Also subject to volatility in the options/futures market. (See Understanding Leveraged 2X ETFs) This ETF has little volume compared to other instruments that follow the price of silver and the BID/ASK spreads may vary away from the price of the underlying asset it's supposed to follow.

PAAS: Pan American Silver (My preferred choice)

• PROS: A Silver mining company with many mines operating throughout Latin America and Mexico. Founded in 1994.
• CONS: Subject to many things including political climate, mine status, etc. For more imformation be sure to visit their SEC Form 10-K.

There are many other silver companies such as SLW (Silver Wheaton) and SSRI (Silver Standard Resources), but they are riskier and are more speculative in nature. SLW has alot of debt and may not be able to sustain their growth. SSRI on the other hand has many silver properties are royalties but does not have a good cash flow. It is currently developing a mine for the first time but it is questionable whether or not it will be satisfactory. Transitioning to a silver mining company will be challenging.

Physical Silver is Money - End the Paper Ponzi by clearasvodka

george4title: People beginning to live out of cars and 19% unemployment

The government is also lying to us about the unemployment rate. The real unemployment rate as reported by shadowstats.com is closer to 19%.

NEW YORK, March 9 (Reuters) - The U.S. unemployment rate would be 19.1 percent, close to the level during the Great Depression, using the methodology that prevailed 80 years ago, according to Shadowstats.com.

According to the official Labor Department figures, the jobless rate jumped to a 25-year high of 8.1 percent in February.

However, John Williams, from ShadowStats, argues that measurement changes implemented over the years make it impossible to compare the current unemployment rate with that seen during the Great Depression, when unemployment peaked at 25 percent.

"Such would be my best estimate of a rate that would be comparable to the Great Depression readings," said Williams of the 19.1 percent reading.

Still, he noted that the Depression peak itself may have been underestimated because it was restricted to "non-farm" payrolls at a time when agricultural labor still represented more than a quarter of the economy. (Reporting by Pedro Nicolaci da Costa; Editing by Tom Hals)

Lack of Moral Responsibility: The Native Americans' Reasoning

JP Morgan is in BIG Trouble!

Another Failed Bank: 17 Banks YTD

On March 6, 2009, Freedom Bank of Georgia, Commerce, GA was closed by the Georgia Department of Banking and Finance and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.

http://www.fdic.gov/bank/individual/failed/freedomga.html

The pace of bank failures is accelerating!

Looking for Work? Try Debt Collection

It may not be fun but it's a job. If you're looking for work, seriously consider going into this field.

From LiveCareer News: http://www.livecareer.com/news/Business-Finance-Accounting/Recession-Fuels-Jump-In-Debt-Collection-Industry_$$00536.aspx

Recession Fuels Jump In Debt Collection Industry
03 December 2008
The collection industry is one of few that are making big gains in the current economy.
One by-product of the recession and credit crunch has been a jump in jobs involving debt collection.

A recent report by CNNMoney.com noted that nationwide consumer debt now stands at $2.59 trillion, with many consumers relying more on credit cards to finance their daily cost of living. The website added that there are about 5,500 debt collection agencies in the U.S.

"The fact that debt doesn't go away as fast as it used to is contributing to the increase in debt collectors," Mark Neeb of the Affiliated Group told CNN.

Need added that collectors are now using more efficient methods than ever to track down debtors and receive payments, including for long-past due accounts. This will further fuel demand for these jobs in the coming years.

The Bureau of Labor Statistics also sees high growth in the debt collection industry in the coming years - a "much faster than average" 23 percent jump between now and 2016, to be exact.

The BLS website notes that demand is expected to be particularly strong among hospitals and doctor's offices, as well as government agencies like the Internal Revenue Service.

Senator Bernie Sanders (I-VT) questions Ben Bernanke 3/3/09

Dow Jones Comparison Between 1929 and 2007

Courtesy of Alphatrends.net

george4title's predictions for the next 6 months

If you haven't already... sell everything you have in stocks and bonds (this includes IRA's and other retirement accounts) and hedge yourself against the coming hyperinflation. Now is the best time to buy commodities such as oil, agriculture, and silver at affordable prices.

The Collapse of California

Citigroup of America?

Today the government converted up to $25 billion of its preferred shares for up to a 36% stake in Citigroup, leaving existing common shareholders with a 26% stake.

Looks like our government is creeping towards nationalization...

http://www.bloomberg.com/apps/news?pid=20670001&refer=home&sid=ahlzePGAFrdg

Ron Paul to Ben Bernanke "What Would It Take For You To Admit You Were Wrong?

Peter Schiff's Reaction to Obama's State Of The Union Address

Hillary Clinton Begs to China to keep buying Treasuries

Feb. 22 (Bloomberg) -- Secretary of State Hillary Clinton urged China to continue buying U.S. Treasury bonds to help finance President Barack Obama’s stimulus plan, saying “we are truly going to rise or fall together.”

“Our economies are so intertwined,” Clinton said in an interview today in Beijing with Shanghai-based Dragon Television. “It would not be in China’s interest” if the U.S. were unable to finance deficit spending to stimulate its stalled economy.

The U.S. is the single largest buyer of the exports that drive growth in China, the world’s third-largest economy. China in turn invests surplus earnings from shipments of goods such as toys, clothing and steel primarily in Treasury securities, making it the world’s largest holder of U.S. government debt at the end of last year with $696.2 billion.

China’s leaders understand that “the United States has to take some very drastic measures with the stimulus package, which means we have to incur debt,” Clinton said. The Chinese are “making a very smart decision by continuing to invest in Treasury bonds,” which she called a “safe investment,” because a speedy U.S. recovery will fuel China’s growth as well.

China boosted purchases of U.S. debt by 46 percent last year to a record. The Chinese government said last week it plans to keep buying Treasuries, adding that future purchases will depend on the preservation of their value and the safety of the investment. China’s currency reserves of $1.95 trillion are about 29 percent of the world total.

‘No Viable Alternative’

JPMorgan Chase & Co. predicted in a Feb. 6 report that China will keep buying Treasuries “not only for the near-term stability of the global financial system, but also because there is no viable and liquid alternative market in which to invest China’s massive and still growing reserves.”

Chinese attempts to diversify from Treasuries into more risk-oriented assets have not fared well. It has lost at least half of the $10.5 billion it invested in New York-based Blackstone, Morgan Stanley and TPG Inc. since mid-2007.

Asked by Dragon TV about the “Buy American” provision in the $787 billion stimulus package, Clinton downplayed worries that it would be a step toward protectionism, saying the provision “must be compliant with our international agreements.”

“Protectionism is not in America’s interest,” she said.

Clinton also said today that Treasury Secretary Timothy Geithner will co-chair an expanded bilateral dialogue on strategic and economic issues. The framework of that dialogue will be announced in April, when Obama and Chinese President Hu Jintao meet at the Group of 20 forum in London.

Treasury, State

Under the Bush administration, the U.S. and China held a Strategic Economic Dialogue run by the Treasury Department, without the assistance of the secretary of state.

Clinton said the Obama administration felt that model was “very heavily dominated by economic concerns and by traditional Treasury priorities. They are very important, but that is not the only high-level dialogue that needs to occur.”

Clinton was in China to meet with senior Chinese officials yesterday, including Hu, Premier Wen Jiabao and Foreign Minister Yang Jiechi.

Today Clinton privately attended services at the Haidian Christian Church. She also met in the U.S. Embassy with 23 women activists in law, gender equality, poverty, AIDS and children’s rights, a continuation of similar gatherings she held when she visited China as first lady in the 1990s.

Human Rights Groups

She didn’t meet with any dissidents during her stay, and was criticized by overseas human rights groups for saying that U.S. concerns about restrictions on freedoms in China must not interfere with cooperation on financial crisis, global warming, negotiations about North Korean nuclear program and terrorism.

China was the last leg of her first overseas trip as the top U.S. diplomat, which included stops in Japan, Indonesia and South Korea.

“World events have given us a full and formidable agenda,” Clinton said yesterday at a Beijing press conference with Yang following a 90-minute meeting. “It is essential that the United States and China have a positive cooperative relationship.”

Yang will visit the U.S. on March 9 for further discussions about the new strategic and economic dialogues.

The Chinese government’s 4 trillion yuan ($585 billion) stimulus plan is an opportunity for global businesses to take part in the country’s infrastructure construction, Yang said.

China’s Economy

China, which surpassed Germany in 2007 as the world’s third- largest economy, is confident of meeting this year’s 8 percent growth target, an achievement Yang says is “China’s contribution to the world economic recovery.”

Clinton and Chinese officials also discussed how to restart stalled talks, hosted in Beijing, aimed at getting North Korea to eliminate its nuclear weapons program.

Clinton said she had raised the issue of human rights in her talks with Yang, calling those concerns “an essential component of our global foreign policy.”

The U.S. State Department accuses China of political repression in Tibet and restrictions on worship throughout China. Groups including Amnesty International and Human Rights Watch said that Clinton shouldn’t set those concerns aside while talking with Chinese officials about other issues.

Power Plant Visit

After meeting Yang, Clinton and her special envoy for climate change, Todd Stern, visited the year-old Taiyanggong power plant, a gas-fired low-emission facility powered by General Electric Co. generators and turbines which provides heat for 1 million homes and buildings in Beijing, including the U.S. embassy. The tour was aimed at highlighting opportunities for the world’s two biggest emitters of greenhouse gases to cooperate on clean energy.

Clinton noted that China, with its rapid industrial development, has surpassed the U.S. as the largest source of carbon emissions and said collaboration on green energy would offer a business opportunity.

“The international financial crisis is having a big impact on the entire world,” Wen told Clinton at their meeting. “I very much appreciate your comment that people should work together like passengers in a boat.”

At an earlier meeting, State Councilor Dai Bingguo told Clinton that she looked “younger and more beautiful” than she appears on television.

“Well, we will get along very well,” Clinton laughed.

To contact the reporters on this story: Indira Lakshmanan in Beijing at ilakshmanan@bloomberg.net

Rick Santelli defends free market capitalism

Faces of the people who brought you THE financial Crisis

Alan Greenspan, Former Chairman of the Federal Reserve



Ben Bernanke, Current Chairman of the Federal Reserve



Jean-Claude Trichet, President of the European Central Bank



Henry Paulson, Former Treasury Secretary and Former CEO of Goldman Sachs



George Walker Bush, 43rd President of the United States



Adam Applegrath, Former CEO of Northern Rock



Daniel Mudd, Former CEO of Fannie Mae



Richard Syron, Former CEO of Freddie Mac



James Cayne, Last CEO of Bear Stearns



Richard S. Fuld, Last CEO of Lehman Brothers Holdings Inc.



Joey Cassano, Former Executive at American International Group (AIG) and father of the unhedged Credit Default Swap



Edward M. Liddy, CEO of American International Group (AIG)



Eric Daniels, CEO of Lloyds TSB



John Silvester Varley, Group Director of Barclays Bank



Stephen Hester, CEO of Royal Bank Of Scotland



Stan O' Neal, Former CEO of Merill Lynch



John Thain, Former CEO of Merill Lynch



Angelo Mozilo, Last CEO of Countrywide Financial



Charles Prince, Former CEO of Citigroup



Vikrim Pandit, CEO of Citigroup



Ken Lewis, CEO of Bank of America



Jamie Dimon, CEO of JPMorgan Chase



Alan H. Fishman, Last CEO of Washington Mutual



Lloyd Blankfield, CEO of Goldman Sachs



John J. Mack, CEO of Morgan Stanley



Gordon Brown, Prime Minister of the United Kingdom

Stimulus!

Today, the new Treasury Secretary Timothy Geithner unveiled the "new" stimulus package and the financial market immediately responded. The Dow Jones Industrial Average dropped 381.99 points to finish at 7888.88, and bond prices rose dramatically as well as gold and silver.

This stimulus package does not seem to be a viable plan to me and many others. Printing money, taking bad assets off banks, and creating jobs where they are not needed is not an efficient way to deal with the crisis. The government needs to let the private sector achieve equilibrium. By interfering, the private sector will never reach equilibrium and the government will only prolong the recession.

Citigroup Hides Mystery Meat in Balance Sheet: Jonathan Weil

From Bloomberg:

Commentary by Jonathan Weil

Feb. 5 (Bloomberg) -- Even now, Citigroup Inc.’s bosses can’t get over their delusions of grandeur.

You can see their shiny optimism in a $44 billion balance- sheet item called deferred-tax assets, which is a fancy term for pent-up losses that the bank hopes to use later to cut its tax bills.

That figure tells you Citigroup’s executives, in spite of their bank’s near-collapse, are still forecasting future profits as far as the eye can see. They have every incentive to do this, too. If they ever turned pessimistic, the assets might go poof.

While you won’t find any mention of deferred taxes in Citigroup’s latest earnings release, this may be the most important asset on the bank’s books today. It also looks the fishiest, at more than three times what it was a year ago, and more than double the company’s $19 billion stock-market value.

Those assets represented 55 percent of Citigroup’s common shareholder equity as of Dec. 31. And one crucial question still unanswered is how much of that $44 billion Citigroup is including in its closely watched Tier 1 capital, the primary gauge the government uses to measure a bank’s ability to survive losses.

Deferred-tax assets, or DTAs, typically consist of losses carried forward from prior periods. Under the accounting rules, these carryforwards are valuable only to companies that make money and pay income taxes. If a company is losing money and doesn’t expect to be able to use these assets, it’s supposed to record an offset, or allowance, to reduce their value.

Deferred taxes also can take the form of carrybacks, which let companies claim refunds on past taxes paid.

Worth Every Cent

Citigroup’s chief financial officer, Gary Crittenden, disclosed the $44 billion figure during the company’s earnings conference call last month. He said the bank had made no adjustments to their value, on the grounds that “these DTAs are expected to be realized in the future periods.” Those periods, he said, extend as far as 20 years out.

The $44 billion is roughly equal to the taxes that would be owed on about $125 billion of income, assuming Citigroup had a 35 percent rate. Citigroup reported an $18.7 billion net loss for 2008. It’s hard to say when the bank might make money again.

This is the same Citigroup that didn’t see the subprime- mortgage meltdown coming, or the credit crisis, or that it would need federal bailouts to stay afloat. That hasn’t shaken its executives’ confidence in their ability to predict Citigroup’s profits for the next two decades, or their conviction that the tax assets are worth every cent of that $44 billion.

“Good luck making that kind of money,” says Robert Willens, a tax and accounting specialist who teaches at Columbia Business School in New York.

Looking Odd

The last time I wrote about this subject, back in November, Citigroup had just disclosed in filings with banking regulators that its net deferred-tax assets were $28.5 billion, as of Sept. 30. It included $18.5 billion of that amount in its Tier 1 capital. The upshot: About 19 percent of Citigroup’s $96.3 billion of Tier 1 consisted of deferred taxes at the time.

That looked odd for a few reasons. Under the Federal Reserve’s rules, the only way a bank can include carryforwards in Tier 1 is if it expects to use them all within 12 months. Even then, the rules say that carryforwards aren’t supposed to exceed 10 percent of a bank’s Tier 1 capital.

There’s no such limit on carrybacks. But Citigroup has never disclosed any information showing it has vast amounts of carrybacks. Willens estimates Citigroup’s carrybacks might be a few billion dollars, based on the bank’s federal tax provisions for 2007 and 2006. A Citigroup spokeswoman, Shannon Bell, declined to say how much of the bank’s DTAs were carrybacks.

Congressional Help

For a while, it seemed Congress might help Citigroup and other large banks by expanding the federal carryback period for operating losses to five years from two. Not anymore, though. Under a bill passed by the U.S. House of Representatives that’s now before the Senate, companies wouldn’t be eligible if they had accepted federal bailout money, which Citigroup did.

Citigroup hasn’t disclosed in dollar terms how much Tier 1 capital it had as of Dec. 31. Bell wouldn’t tell me that, either. Nor would she say how much of Citigroup’s Tier 1 capital at the end of 2008 came from deferred-tax assets.

Citigroup will have to disclose those figures in the coming weeks when it files its annual reports with securities and banking regulators. When it does, the bank’s executives are sure to face more questions about how these assets could be so big.

We’ll see if they come up with answers that show a firmer grasp on reality.

(Jonathan Weil is a Bloomberg News columnist. The opinions expressed are his own.)

To contact the writer of this column: Jonathan Weil in New York at jweil6@bloomberg.net

Peter Schiff videos 2/4/09

The following videos are the best Peter Schiff videos I have seen to date. He is the one of the only people who knows exactly what is going on right now and can explain it to us.

Part 1


Part 2


Part 3


Part 4

Revealed: Day the banks were just three hours from collapse and COMEX Silver Default

I just read an interesting article about how the collapse is very, very close to happening. It is extremely important to start moving out of U.S. dollars now and into REAL assets like gold and silver.

Reported by the Daily Mail on January 24th, 2009:

Revealed: Day the banks were just three hours from collapse

By Glen Owen
Last updated at 11:21 PM on 24th January 2009

Britain was just three hours away from going bust last year after a secret run on the banks, one of Gordon Brown's Ministers has revealed.

City Minister Paul Myners disclosed that on Friday, October 10, the country was 'very close' to a complete banking collapse after 'major depositors' attempted to withdraw their money en masse.

The Mail on Sunday has been told that the Treasury was preparing for the banks to shut their doors to all customers, terminate electronic transfers and even block hole-in-the-wall cash withdrawals.

Only frantic behind-the-scenes efforts averted financial meltdown.

If the moves had failed, Mr Brown would have been forced to announce that the Government was nationalising the entire financial system and guaranteeing all deposits.

But 60-year-old Lord Myners was accused last night of being 'completely irresponsible' for admitting the scale of the crisis while the recession was still deepening and major institutions such as Barclays remain under intense pressure.

The build-up to 'Black Friday' started on Monday, October 6, when the FTSE 100 dropped by nearly eight per cent as bad news on the economy started to multiply.

The following day, Chancellor Alistair Darling began all-night talks ahead of an announcement on the Wednesday that billions of pounds of taxpayers' money would be used to pour liquidity into the system.

But shares continued to plummet, turning into a rout on the Friday when the FTSE crashed by ten per cent within minutes of opening.

Both Royal Bank of Scotland and HBOS were nearing complete collapse - but Lord Myners, who built up his fortune during a long career in the City, said the problems ran far wider.

'There were two or three hours when things felt very bad, nervous and fragile,' he said. 'Major depositors were trying to withdraw - and willing to pay penalties for early withdrawal - from a number of large banks.'

The threat to the system was so severe that the Bank of England was forced to contact RBS's creditors in New York and Tokyo to persuade them not to withdraw their funds, but it is not known which other banks faced a run on their reserves.

'We faced the very real problem of how banks could stop depositors from withdrawing their money,' a Treasury source said yesterday.

'The banks themselves were selling their shareholdings, accelerating the stock-market falls, and preparing to shut up shop. Mortgages would have been sold on and savers would have been spooked, to put it mildly. It would have been chaos.'

After a weekend of crisis talks, which concluded at dawn on the Monday, it was announced that Lloyds TSB was taking over HBOS, supported by £17billion of taxpayers' money, and RBS would receive an injection of £20billion - prompting the resignation of RBS's infamous chief executive, Sir Fred 'the shred' Goodwin. Share prices at last started a small rally.

Ruth Lea, economic adviser to the Arbuthnot Banking Group, said last night that it was 'highly irresponsible' for Lord Myners to reveal the scale of the problems because it could serve to further wreck already fragile levels of confidence.

'We are not out of the woods yet,' she said. 'I fear for Barclays, after the fall in its share price, and Lloyds has been damaged by the HBOS takeover.'

She added: 'If it was panning out in that way, then the Government would have had no choice but to step in and nationalise the entire financial system.'

Angela Knight, chief executive of the British Bankers Association, said: 'The issues related only to HBOS and RBS. To imply that all the banks would have gone under is wrong. It is complicated.'

Lord Myners also said that bank executives had been 'grossly over-rewarded' during the 'golden days' of big bonuses. 'They are people who have no sense of the broader society around them,' he said. 'There is quite a lot of annoyance and much of that is justified.'

I just found a great video on YouTube by stellaconcepts about COMEX Silently defaulting on a silver bullion delivery. I've posted the video below.

Jim Rogers on the Asian Financial Forum 1/21/2009

Part 1


Part 2

NY Times: Firms That Got Bailout Money Keep Lobbying

http://www.nytimes.com/2009/01/24/business/24lobby.html?partner=permalink&exprod=permalink

Where's the Deflation now?

On December 31, 2008 the Dow Jones Industrial Average was 8,776.39.
Today the Dow Jones Industrial Average hit 7,990.67.

That's a drop of 8.95%!

On December 31, 2008 the gold price was 869.75.
On January 23, 2009 the gold price is 895.80.

That's an increase of 3%!

People aren't dumb and are buying into gold now as a safe haven. Our whole financial system and economy is collapsing. Banks are giving zero percent interest on savings accounts. That's why it is making sense to people to buy gold.

The DJIA started the year at 10.09 ounces of gold and now it is worth only 8.92 ounces of gold. In 1932, three years after the infamous Wall Street Crash and the start of the Great Depression, it only took two ounces of gold to buy the DJIA. We're getting close to repeating history and maybe the 2:1 Gold:Dow ratio will be revisited again.

Bank Of America Bailout and Weaker Dollar

Treasury, Federal Reserve, and the FDIC Provide Assistance to Bank of America

The U.S. government entered into an agreement today with Bank of America to provide a package of guarantees, liquidity access, and capital as part of its commitment to support financial market stability.

Treasury and the Federal Deposit Insurance Corporation will provide protection against the possibility of unusually large losses on an asset pool of approximately $118 billion of loans, securities backed by residential and commercial real estate loans, and other such assets, all of which have been marked to current market value. The large majority of these assets were assumed by Bank of America as a result of its acquisition of Merrill Lynch. The assets will remain on Bank of America's balance sheet. As a fee for this arrangement, Bank of America will issue preferred shares to the Treasury and FDIC. In addition and if necessary, the Federal Reserve stands ready to backstop residual risk in the asset pool through a non-recourse loan.

In addition, Treasury will invest $20 billion in Bank of America from the Troubled Asset Relief Program in exchange for preferred stock with an 8 percent dividend to the Treasury. Bank of America will comply with enhanced executive compensation restrictions and implement a mortgage loan modification program.

Treasury exercised this funding authority under the Emergency Economic Stabilization Act's Troubled Asset Relief Program (TARP). The investment was made under the Targeted Investment Program. The objective of this program is to foster financial market stability and thereby to strengthen the economy and protect American jobs, savings, and retirement security.

Separately, the FDIC board announced that it will soon propose rule changes to its Temporary Liquidity Guarantee Program to extend the maturity of the guarantee from three to up to 10 years where the debt is supported by collateral and the issuance supports new consumer lending.

With these transactions, the U.S. government is taking the actions necessary to strengthen the financial system and protect U.S. taxpayers and the U.S. economy. As was stated in November when the first transaction under the Targeted Investment Program was announced, the U.S. government will continue to use all of our resources to preserve the strength of our banking institutions and promote the process of repair and recovery and to manage risks.

Bank Of America Bailout Terms

The dollar also fell today, as people are starting to realize that as our spend-happy government is out of control. It is time to invest in real assets TODAY before it's too late!