Classic FX

[Depth Trade]

I have a bias for USD being strong for this next week. Am shorting Xag/usd silver, Xau/usd gold.

Have exited previous held positions.

Xag/usd: short $28.68
Out $29.19
-$0.51
-1.78%

Xau/usd: short $1386.08
Out $1375.46
+$10.62
+0.77%



22 arrested in LA foreclosure protest at Chase
By JACOB ADELMAN
http://www.omaha.com/article/20101216/AP05/312169762

LOS ANGELES (AP) - Police arrested 22 demonstrators who blocked entry to a downtown Chase bank branch Thursday to protest what they said were unfair home foreclosures.

The demonstrators, which included homeowners facing foreclosure, community advocates and labor leaders, silently allowed officers to bind their wrists behind their backs with plastic restraints and guide them into a police van.

Dozens more demonstrators chanted and marched on a nearby sidewalk holding sighs that said "Stop Bank Greed, Save Our Neighborhoods" as the 12 men and 10 women were taken into custody.

Detective Gus Villanueva said there were no injuries to police or protesters, who would be cited for trespassing and released.

Alliance of Californians for Community Empowerment member David Mazariegos said the demonstrators hoped to bring attention to the plight of people who were unjustly losing their homes.

He said banks' failure to modify many borrowers' loans puts them in violation of the Home Affordable Modification Program in which lenders agreed to participate as part of the bank bailout.

"The banks are not helping anyone stay in their homes," Mazariegos said. "It's highway robbery, what they're doing to these people."

ACCE director Amy Schur said the groups were singling out JPMorgan Chase & Co. because most of the borrowers whose foreclosures and evictions they are contesting are serviced by that bank.

A Chase spokeswoman did not immediately return a phone call Thursday.

 

[Depth Trade]

Holding zero positions for this next week.

I do have USD as being strong for this next week though.



DHS Implementing No Work List: Citizens Must Get Government Approval to Work in Private Sector Jobs
Kurt Nimmo
Infowars.com
December 16, 2010
http://www.infowars.com/dhs-implementing-no-work-list/

You’ve heard of no fly and no buy lists – get ready for no work lists. Millions of workers now must apply to the DHS and prove they are not terrorists in order to be granted permission by the government to work.

On the Alex Jones Show today, a caller pointed to information posted on a union website for ironworkers spelling out details on the Department of Homeland Security’s TWIC and SWAC programs.

TWIC is short for Transportation Worker Identification Credential and SWAC stands for Secure Worker Access Consortium.

TWIC “is a biometric credential that ensures only vetted workers are eligible to enter a secure construction site, unescorted,” Ironworkers Local 361 in Ozone Park, New York, explains. “Before issuing a TWIC, TSA must conduct a security threat assessment on the TWIC applicant. An applicant who, as a result of the assessment, is determined to not pose a security threat, will be issued a TWIC card.”

In other words, construction workers in New York will need permission from the TSA and DHS in order to practice their profession and earn a living. It was much the same in the former Soviet Union and authoritarian states such as China where the government determines all aspects of an individual’s life and where even the mildly rebellious are severely punished.

SWAC is even more draconian. It is “a large-scale collaborative effort among public and private authorities, facility owners, contractors, and labor organizations who are partnering to prevent terrorist activity by creating a trusted contractor community. Over 500 organizations, including the Port Authority of NY and NJ, which manages and maintains the bridges, tunnels, bus terminals, airports, PATH, and seaports that are essential to the bi-state region’s trade and transportation capabilities, have joined this effort,” according to the union website.

SWAC also requires a background investigation by the government, so if construction, port workers, longshoremen, and truck drivers are involved in political activity frowned upon by the feds – for instance, 9/11 truth, considered dangerous and subversive by the State Department – it is likely they will have to find another line of work.

A SWAC PDF specifically mentions “treason” in an exhaustive list of crimes and misdeeds that will result in the federal government denying a person the right to earn a living.

The TWIC Disclosure and Certification form states the following: “I acknowledge that if TSA or other law enforcement agencies determine that I pose an imminent threat to national security or transportation security, my employer may be notified.”

The TSA no-fly list contains thousands of names, including journalists and political activists. If the government determines you hold the wrong political beliefs, according to the TWIC document, your employer will be told and you may lose your job and the ability to provide for your family.

The TWIC application also mentions “treason” and “sedition” as a criteria to put an end to an individual’s employment.

Sedition is defined as overt conduct, such as speech and organization, that is deemed by officialdom to tend toward insurrection against the establishment. The Sedition Act of 1918 forbids the use of “disloyal, profane, scurrilous, or abusive language” about the United States government, its flag, or its armed forces. The Sedition Act was updated on October 26, 2001, when Congress signed the USA Patriot Act into law. In the mid 70s, the Church Committee discovered that the government had carried out an aggressive campaign for decades to neutralize – as FBI director Hoover characterized it – political activity the establishment considered a threat to its monopoly on power.

As noted above, TWIC plans to force an expensive biometric ID on workers. This idea is hardly new. In 2002, the Electronic Privacy Information Center sued the Department of Homeland Security in order to get details on then director Tom Ridge’s plan to introduce a biometric national ID card. Ridge and the government have stated repeatdly that “national security requirements would ultimately make such cards a reality.”

Earlier this year, Democrats pushed the idea making a biometric national ID card mandatory for all Americans. “Everyone would have to produce the card to get a job, or keep a job,” the UPI reported on May 9. “On a five-year timetable the biometric cards would replace Social Security cards and would be used to prove eligibility for employment. Card scanners would be issued to all U.S. employers. The cards would at least have the capability of being linked to a central data system.”

TWIC and SWAC represent an incremental effort by the national security state to introduce biometric ID as a prerequisite for employment. In the months ahead, we can expect more intrusions by the government on our rights as spelled out by the Declaration of Independence.

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness,” that document states.

Life, Liberty, and the pursuit of Happiness, however, according to the government, will soon be predicated on a national biometric ID card and inclusion of our most private information in sprawling databases.

In the coming Brave New World Order, only citizens vetted by a totalitarian government will be allowed to work and feed their families. All others will be locked out of the system like the mutants in Total Recall, the dystopian movie based on a story by Phillip K. Dick.

 

[Depth Trade]

Holding zero positions for this next week.

I do have USD as being strong for this next week though.

Federal Reserve is the primary tool of the new financial oligarchy – The ultimate banking clearing house with zero oversight from the people still holds over $2 trillion on its balance sheet.
http://www.mybudget360.com/federal-...ew-financial-oligarchy-banking-balance-sheet/

The Federal Reserve system (the Fed for short) is the US central banking system. The Fed was created in 1913 with the enactment of the Federal Reserve Act. In the beginning the Fed had limited powers and its mission was limited. According to the Fed its mission today is to conduct monetary policy, supervise and regulate banking institutions, and maintain stability in the financial system. If this is the mission of the Fed, it has radically failed and the American people should audit the Fed to see what went wrong. The problem with the Fed is that it is independent within the government since it does not need to seek legislation for actions. Yet the authority of the Federal Reserve is derived from the US Congress. Yet we have recently seen when a push to audit the Fed was issued in Congress a major backlash hit from the Fed and we have yet to conduct a full audit of the Federal Reserve. The Fed has conducted and put at risk the US currency to protect the banking interests of its member banks. The unstated mission of the Fed is to protect its banking allies even if it means destroying the economic structure of its host nation so long as wealth is stabilized in the new financial oligarchy.


Even as the Fed gloats that the economy is on a mends, we see that the Fed balance sheet hasn’t really shifted since the financial crisis hit:



Source: Wikipedia, chart

The Fed currently has over $2 trillion in “assets” on its balance sheets. We have documented that within this enormous amount of assets, there are questionable loans and items including shadow bailouts of the imploded commercial real estate market. The Fed has bailed out shopping malls in Oklahoma that have no adequate traffic to justify their existence all the way to luxury hotels. Do you think the American people consider this a solid way of managing the nation’s financial health?

Yet let us go back to one of the stated items listed on the Fed’s mission statement, that of financial stability. In the last decade the US financial markets have seen some of the worst financial volatility since the Great Depression. The Fed did not sit idly by as we now know with the released lending notes during the crisis. The Fed made $9 trillion in short-term loans to 18 of the largest financial institutions in the country. It also made loans to corporate entities like McDonalds for example. The Fed of course did not want this information to be released since it showed favoritism to the largest organizations in the country all the while lending tightened up to smaller businesses and organizations. Individuals certainly have felt the credit freeze and nowhere in the notes do we see the Fed making a solid effort to bolster lending to the American public. They were concerned about the biggest institutions and the rest were left hanging on a shingle.

During the banking crisis of the Great Depression many banks failed in a system setup under unit banking:



Source: Mortgage News

Yet the big problem today is that we have a handful of banks holding over 50 percent of all total banking assets ($13 trillion and half with 19 banks out of 7,700+). So the raw count of bank failures is deceptive. We can have 100 bank failures costing $1 million each or have one giant failure like IndyMac costing $8 billion. The era of too big to fail is just as dangerous as one in which banks are isolated. In fact with the data released from the Fed we see the insidious problem of a system in which the worst performing banks with the most deceptive practices not only are bailed out but are given more capital to remain in business. All this does is solidifies their actions and makes them grow even bigger, the side effect of moral hazard. Think of JP Morgan taking over Washington Mutual and now they are going to charge customers $10 a month for what used to free checking for life. Think of Bank of America swallowing up Countrywide Financial. This is the kind of banking consolidation that the Fed has orchestrated since the crisis started with no accountability to Congress or the American people.

The Fed would like you to believe that they are using their own money but this is a lie. The Fed was instrumental in creating the housing bubble with their low Fed funds rate:



Most Americans carry a large part of their net worth in real estate. So the fact that the Fed turned what used to be a stable asset into a highly volatile commodity that encouraged Wall Street banks to develop CDOs and other instruments of financial destruction was a method of siphoning off wealth from most Americans to their banking overlords. Again, the Fed is designed to maintain financial stability but the actions of the last few decades demonstrate that their mission should read:

“To aggregate as much wealth into the banking system while eliminating the American middle class by a slow systematic dilution of their currency and financial well being and standard of living.”

This is exactly what has happened in the last decade. The average American makes roughly $39,000 a year or less. 72 million Americans make $25,000 or less each year. Yet at the same time wealth at the top is getting more and more consolidated. So now we have a system where giant bank failures don’t happen but we have a slow destruction of wealth for the remainder of the American public. The Fed only cares about stability for its member banks. Ben Bernanke, the current Fed chief went on 60 Minutes claiming that Americans would be better off if they just got more educated. Oh really? So you mean with the current higher education bubble Americans should borrow more money from banks and the government so they can go into massive debt for a degree that may not help them land a job? We all know that the cost of college has far outpaced the cost of most items including healthcare costs. Yet the solution to our current crisis is to get into deeper debt and become slaves to banks yet again? Sounds like Alan Greenspan being a champion for adjustable rate mortgages.

The Fed has given horrible advice over and over. It wouldn’t be such a problem if they were a pundit on a radio show. But this is our central bank! This is the institution that made $9 trillion in short-term loans and fought Congress to keep it hidden from the American people. This is the institution that has over $2 trillion in “assets” and doesn’t want to say what it is because the American people will find out that junk mortgages on failed real estate deals will show up. The Fed has failed on its explicit mission and it is time to fully audit the Fed.

 

[Depth Trade]

Holding zero positions for this next week.

I do have USD as being strong for this next week though.

$2tn debt crisis threatens to bring down 100 US citiesOverdrawn
American cities could face financial collapse in 2011, defaulting on hundreds of billions of dollars of borrowings and derailing the US economic recovery. Nor are European cities safe – Florence, Barcelona, Madrid, Venice: all are in trouble

http://www.guardian.co.uk/business/2010/dec/20/debt-crisis-threatens-us-cities

More than 100 American cities could go bust next year as the debt crisis that has taken down banks and countries threatens next to spark a municipal meltdown, a leading analyst has warned.

Meredith Whitney, the US research analyst who correctly predicted the global credit crunch, described local and state debt as the biggest problem facing the US economy, and one that could derail its recovery.

"Next to housing this is the single most important issue in the US and certainly the biggest threat to the US economy," Whitney told the CBS 60 Minutes programme on Sunday night.

"There's not a doubt on my mind that you will see a spate of municipal bond defaults. You can see fifty to a hundred sizeable defaults – more. This will amount to hundreds of billions of dollars' worth of defaults."

New Jersey governor Chris Christie summarised the problem succinctly: "We spent too much on everything. We spent money we didn't have. We borrowed money just crazily. The credit card's maxed out, and it's over. We now have to get to the business of climbing out of the hole. We've been digging it for a decade or more. We've got to climb now, and a climb is harder."

American cities and states have debts in total of as much as $2tn. In Europe, local and regional government borrowing is expected to reach a historical peak of nearly €1.3tn (£1.1tn) this year.

Cities from Detroit to Madrid are struggling to pay creditors, including providers of basic services such as street cleaning. Last week, Moody's ratings agency warned about a possible downgrade for the cities of Florence and Barcelona and cut the rating of the Basque country in northern Spain. Lisbon was downgraded by rival agency Standard & Poor's earlier this year, while the borrowings of Naples and Budapest are on the brink of junk status. Istanbul's debt has already been downgraded to junk.

Whitney's intervention is likely to raise the profile of the issue of municipal debt. While she was an analyst at Oppenheimer, the New York investment bank, in October 2007 she wrote a damning report on Citigroup, then the world's largest bank, predicting it would cut its dividend. She was criticised for being too pessimistic but was vindicated when the bank was forced to seek government support a year later. She has since set up her own advisory firm and is rated one of the most influential women in American business.

US states have spent nearly half a trillion dollars more than they have collected in taxes, and face a $1tn hole in their pension funds, said the CBS programme, apocalyptically titled The Day of Reckoning.

Detroit is cutting police, lighting, road repairs and cleaning services affecting as much as 20% of the population. The city, which has been on the skids for almost two decades with the decline of the US auto industry, does not generate enough wealth to maintain services for its 900,000 inhabitants.

The nearby state of Illinois has spent twice as much money as it has collected and is about six months behind on creditor payments. The University of Illinois alone is owed $400m, the CBS programme said. The state has a 21% chances of default, more than any other, according to CMA Datavision, a derivatives information provider.

California has raised state university tuition fees by 32%. Arizona has sold its state capitol and supreme court buildings to investors, and leases them back.

Potential defaults could also hit Florida, whose booming real estate industry burst two years ago, said Guy J. Benstead, a partner at Cedar Ridge Partners in San Francisco. "We are not out of the woods by any stretch yet," he said.


"It's all part of the same parcel: public sector indebtedness needs to be cut, it needs a lot of austerity, and it hit the central governments first, and now is hitting local bodies," said Philip Brown, managing director at Citigroup in London.

In Europe, where cities have traditionally relied more on bank loans and state transfers than bonds, financing habits are changing. The Spanish regions of Catalonia and Valencia have issued debt to their own citizens after financial markets shut their doors because of the regions' high deficits. Moody's cut to the rating of the Basque country on Friday left it still within investment grade but noted "the rapid deterioration in the region's budgetary performance in recent years". It said it expected it to continue over the medium term.

In Italy, Moody's and S&P have threatened to downgrade Florence, while Venice has been forced over the past few months to put some of the palazzi on its canals up for sale to fund the deficit.

"Cities are on their own. Governments won't come to their rescue as they have problems of their own," said Andres Rodriguez-Pose, professor of economic geography at the London School of Economics. "Cities will have to pay for their debts, and in some cases they will have to carry out dramatic cuts, such as Detroit's."

California crunch

Vallejo, a former US navy town near San Francisco, is still trying to emerge from the Chapter Nine bankruptcy protection it entered in 2008.

The city, now a symbol of distressed local finances, is still negotiating with the unions, which refused to accept a salary cut plan two years ago. Paul Dyson, an analyst with the Standard & Poor's credit agency, said Vallejo, which is mostly a dormitory town for Oakland or San Francisco employees, did not have enough local industry to sustain its finances and property tax – a major source of local income – plunged with the collapse of the real estate market. The S&P credit-rating agency has a C rating on the town – the lowest level.

With a population of about 120,000, Vallejo has $195m (£125m) of unfunded pension obligations and has to present a bankruptcy-exit plan to a Sacramento court by 18 January. Since 1937, 619 local US government bodies, mostly small utilities or districts, have filed for bankruptcy, Bloomberg News recently reported. US cities tend to default more than European municipalities as they usually rely on bonds issued to investors, which enter into a default if the creditor misses payments. European towns, by contrast, traditionally depend on bank loans and government bailouts.

 

[Depth Trade]

Holding zero positions for this next week.

I do have USD as being strong for this next week though.

Pimco says 'untenable' policies will lead to eurozone break-up
Pimco, the world's largest bond fund, has called on Greece, Ireland and Portugal to step outside the eurozone temporarily and restructure their debts unless the currency bloc agrees to a radical change of course.
http://www.telegraph.co.uk/finance/...-policies-will-lead-to-eurozone-break-up.html

By Ambrose Evans-Pritchard 7:00PM GMT 20 Dec 2010 351
Andrew Bosomworth, head of Pimco's portfolio management in Europe, said current policies are untenable in the absence of fiscal union and will lead to a break-up of the euro.

"Greece, Ireland and Portugal cannot get back on their feet without either their own currency or large transfer payments," he told German newspaper Die Welt.

He said these countries could rejoin EMU "after an appropriate debt restructuring", adding that devaluation would let them export their way back to health.

Mr Bosomworth said EU leaders were too quick to congratulate themselves on saving the euro last week with a deal for a permanent bail-out fund from 2013.

"The euro crisis is not over by a long shot. Market tensions will continue into 2011. The mechanism comes far too late," he said.

The bond fund argues that the EU strategy of forcing heavily indebted countries to undergo draconian fiscal austerity without offsetting stimulus is unworkable.

The austerity policies are stifling the growth needed to stabilise debt levels.

"Can countries inside a fixed exchange-rate system like the euro grow and tighten budget policy at the same time? I don't think so. It didn't work in Argentina," Mr Bosomworth said.

Pimco also gave warning that the bond vigilantes have lost faith in the policy and are trying to liquidate their holdings of peripheral EMU faster than the European Central Bank (ECB) can buy the debt, causing a relentless rise in yields, and a vicious circle.

Despite this, the ECB said on Monday that it had cut purchases of government debt last week, settling €603m (£509m), down from €2.68bn a week earlier. The withering comments from the world's top investor in EMU sovereign debt is a blow for Portugal and Spain. Both nations are hoping bond spreads will start to narrow before they face a funding crunch in the first quarter of next year.

Jacques Cailloux, chief Europe economist at RBS, agreed that last week's European summit had failed to grasp the nettle.

"None of the policy responses put in place in Europe since the start of the crisis provides a credible backstop to prevent further contagion," Mr Cailloux said.

"We remain most concerned about an escalation of the sovereign debt crisis hitting larger economies in the euro area. Markets continue to underestimate the potential disruption via financial transmission channels that such an event could trigger."

Meanwhile, Spain must cut harder and deeper to rein in its finances, the OECD has warned, calling for an overhaul of its labour laws and employment practices. Madrid is already in the midst of harsh austerity measures, but the influential Paris-based think-tank said more must be done. The Spanish economy should be able to shrink its budget deficit from 11pc of GDP last year to the 6pc target next year, the OECD believes.

 

[Depth Trade]

My bias for USD is weak against precious metals this coming week.

Xag/usd long: $30.884

Xau/usd long: $1420.55



In 2011 The Baby Boomers Start To Turn 65: 16 Statistics About The Coming Retirement Crisis That Will Drop Your Jaw
http://endoftheamericandream.com/ar...ing-retirement-crisis-that-will-drop-your-jaw

Do you hear that rumble in the distance? That is the Baby Boomers - they are getting ready to retire. On January 1st, 2011 the very first Baby Boomers turn 65. Millions upon millions of them are rushing towards retirement age and they have been promised that the rest of us are going to take care of them. Only there is a huge problem. We don't have the money. It simply isn't there. But the millions of Baby Boomers getting ready to retire are counting on that money to be there. This all comes at a really bad time for a federal government that is already flat broke and for a national economy that is already teetering on the brink of disaster.

So just who are the Baby Boomers? Well, they are the most famous generation in American history. The U.S. Census Bureau defines the Baby Boomers as those born between January 1st, 1946 and December 31st, 1964. You see, after U.S. troops returned from World War II, they quickly settled down and everyone started having lots and lots of babies. This gigantic generations has transformed America as they have passed through every stage of life. Now they are getting ready to retire.

If you add 65 years to January 1st, 1946 you get January 1st, 2011.

The moment when the first Baby Boomers reach retirement age has arrived.

The day of reckoning that so many have talked about for so many years is here.

Today, America's elderly are living longer and the cost of health care is rising dramatically. Those two factors are going to make it incredibly expensive to take care of all of these retiring Baby Boomers.

Meanwhile, the sad truth is that the vast majority of Baby Boomers have not adequately saved for retirement. For many of them, their home equity was destroyed by the recent financial crisis. For others, their 401ks were devastated when the stock market tanked.

Meanwhile, company pension plans across America are woefully underfunded. Many state and local government pension programs are absolute disasters. The federal government has already begun to pay out more in Social Security benefits than they are taking in, and the years ahead look downright apocalyptic for the Social Security program.

If we are not careful all of these Baby Boomers are going to push us into national bankruptcy. We simply cannot afford all of the promises that we have made to them. The following are 16 statistics about the coming retirement crisis that will drop your jaw.....

#1 Beginning January 1st, 2011 every single day more than 10,000 Baby Boomers will reach the age of 65. That is going to keep happening every single day for the next 19 years.

#2 According to one recent survey, 36 percent of Americans say that they don't contribute anything at all to retirement savings.

#3 Most Baby Boomers do not have a traditional pension plan because they have been going out of style over the past 30 years. Just consider the following quote from Time Magazine: The traditional pension plan is disappearing. In 1980, some 39 percent of private-sector workers had a pension that guaranteed a steady payout during retirement. Today that number stands closer to 15 percent, according to the Employee Benefit Research Institute in Washington, D.C.

#4 Over 30 percent of U.S. investors currently in their sixties have more than 80 percent of their 401k invested in equities. So what happens if the stock market crashes again?

#5 35% of Americans already over the age of 65 rely almost entirely on Social Security payments alone.

#6 According to another recent survey, 24% of U.S. workers admit that they have postponed their planned retirement age at least once during the past year.

#7 Approximately 3 out of 4 Americans start claiming Social Security benefits the moment they are eligible at age 62. Most are doing this out of necessity. However, by claiming Social Security early they get locked in at a much lower amount than if they would have waited.

#8 Pension consultant Girard Miller recently told California's Little Hoover Commission that state and local government bodies in the state of California have $325 billion in combined unfunded pension liabilities. When you break that down, it comes to $22,000 for every single working adult in California.

#9 According to a recent report from Stanford University, California's three biggest pension funds are as much as $500 billion short of meeting future retiree benefit obligations.

#10 It has been reported that the $33.7 billion Illinois Teachers Retirement System is 61% underfunded and is on the verge of complete collapse.

#11 Robert Novy-Marx of the University of Chicago and Joshua D. Rauh of Northwestern's Kellogg School of Management recently calculated the combined pension liability for all 50 U.S. states. What they found was that the 50 states are collectively facing $5.17 trillion in pension obligations, but they only have $1.94 trillion set aside in state pension funds. That is a difference of 3.2 trillion dollars. So where in the world is all of that extra money going to come from? Most of the states are already completely broke and on the verge of bankruptcy.

#12 According to the Congressional Budget Office, the Social Security system will pay out more in benefits than it receives in payroll taxes in 2010. That was not supposed to happen until at least 2016. Sadly, in the years ahead these "Social Security deficits" are scheduled to become absolutely horrific as hordes of Baby Boomers start to retire.

#13 In 1950, each retiree's Social Security benefit was paid for by 16 U.S. workers. In 2010, each retiree's Social Security benefit is paid for by approximately 3.3 U.S. workers. By 2025, it is projected that there will be approximately two U.S. workers for each retiree. How in the world can the system possibly continue to function properly with numbers like that?

#14 According to a recent U.S. government report, soaring interest costs on the U.S. national debt plus rapidly escalating spending on entitlement programs such as Social Security and Medicare will absorb approximately 92 cents of every single dollar of federal revenue by the year 2019. That is before a single dollar is spent on anything else.

#15 After analyzing Congressional Budget Office data, Boston University economics professor Laurence J. Kotlikoff concluded that the U.S. government is facing a "fiscal gap" of $202 trillion dollars. A big chunk of that is made up of future obligations to Social Security and Medicare recipients.

#16 According to a recent AARP survey of Baby Boomers, 40 percent of them plan to work "until they drop".

Companies all over America have been dropping their pension plans in anticipation of the time when the Baby Boomers would retire. 401k programs were supposed to be part of the answer, but if the stock market crashes again, it is absolutely going to devastate the Baby Boomers.

State and local governments are scrambling to find ways to pay out all the benefits that they have been promising. Many state and local governments will be forced into some very hard choices by the hordes of Baby Boomers that will now be retiring.

Of course whenever a big financial crisis comes along these days everyone looks to the federal government to fix the problem. But the truth is that after fixing crisis after crisis the federal government is flat broke.

At our current pace, the Congressional Budget Office is projecting that U.S. government public debt will hit 716 percent of GDP by the year 2080.

But our politicians just keep spending money. In order to pay the Baby Boomers what they are owed the federal government may indeed go into even more debt and have the Federal Reserve print up a bunch more money.

So in the end, Baby Boomers may get most of what they are owed. Of course it may be with radically devalued dollars. Already we are watching those on fixed incomes being devastated by the rising cost of food, gas, heat and health care.

What is going to happen one day when prices have risen so much that the checks that our seniors are getting are not enough to heat their homes?

What are we going to do when those on fixed incomes are buying dog food because it is all that they can afford?

We are rapidly reaching a tipping point. As the first Baby Boomers retire the system is going to do okay. But as millions start pouring into the system it is going to start breaking down.

No, there is not much that we can do about it now. We should have been planning for all of this all along. Americans should have been saving for retirement and governments should have been setting money aside.

But it didn't happen.

Now we pay the price.

 

[Depth Trade]

My bias for USD is weak against precious metals this coming week.

Xag/usd long: $30.884

Xau/usd long: $1420.55

Still holding these long positions.
Current prices.

Xag/usd $30.88
-6.15%

Xau/usd $1369.39
-3.60%



Confirmed: We’re Literally On the Brink of Catastrophic Collapse
http://www.shtfplan.com/headline-ne...n-the-brink-of-catastrophic-collapse_01062011
Author: Mac Slavo
- January 6th, 2011

We’ve been told a lot of things since the global economic crisis first became apparent in 2007. In March of that year Federal Reserve Chairman Ben Bernanke said, “the impact on the broader economy and financial markets of the problems in the sub-prime markets seems likely to be contained.” Clearly, Mr. Bernanke’s assessment was incorrect and the sub-prime real estate issues were only part of a broader, systemic issue.

The fundamental problems within our economy became mainstream news in the latter part of 2008 when stock markets around the world were in free fall and most major financial institutions were on the cusp of insolvency. In response, our government, with the full support and confidence of Congress, took unprecedented steps to save the system by injecting, first billions, and then trillions of dollars to bailout failed companies, stabilize deflationary price collapses and stimulate the economy.

Treasury Secretary Henry Paulson eventually wrote a book about the crisis, aptly titled On the Brink. But how close to the brink were we? If Representative Brad Sherman is to be believed, we were close. So close, in fact, that according to Sherman, Congressional members were told that if the bailout was not authorized by Congress the collapse would be so severe that martial law may have to be declared - basically, tanks in the streets. The following short video is Brad Sherman discussing the situation on the House floor:

Are we now to believe that the actions taken by Congress, The President, US Treasury and The Federal Reserve have resolved the fundamental problems facing our nation?

For those 17% of people who think the economy is in recovery and the other 33% who believe it will happen soon, we point you to the latest statement from current Treasury Secretary Timothy Geitherner, who outlines the severity of the problem in a January 6, 2011 letter to Congress writes:

I am writing in response to your request for an estimate by the Treasury Department of when the statutory debt limit will be reached, and for a description of the consequences of default by the United States.

Never in our history has Congress failed to increase the debt limit when necessary. Failure to raise the limit would precipitate a default by the United States. Default would effectively impose a significant and long-lasting tax on all Americans and all American businesses and could lead to the loss of millions of American jobs. Even a very short-term or limited default would have catastrophic economic consequences that would last for decades. Failure to increase the limit would be deeply irresponsible. For these reasons, I am requesting that Congress act to increase the limit early this year, well before the threat of default becomes imminent.

…

Treasury would prefer not to have to engage again in any of these extraordinary measures [suspension of the issuance of certain types of government debt and government investment vehicles]. If we are forced to do so again, these measures could delay the date by which the limit is reached by several weeks. Once these steps have been taken, no remaining legal and prudent measures would be available to create additional headroom under the debt limit, and the United States would begin to default on its obligations.

The Treasury Secretary of The United States of America just said that if we don’t get another $1 trillion or so dollars by March of this year then this country will begin to default on its debt obligations. These remarks are extremely serious and should be understood for what they are.

We are, literally and without mixing words, on the brink of economic catastrophe.

The scary thing is, according to Mr. Geithner and the many supporters of raising our debt ceiling, that borrowing more money is the only solution available.

In a recent commentary we pointed out the opposing view from Karl Denninger of Market Ticker, who said that raising the debt ceiling would essentially lead to the very same consequence as leaving it as is:

Let me be clear: If you extend the debt ceiling and by doing so allow deficits of this sort to continue for another year, say much less two, you will have placed a loaded shotgun in the mouth of this nation and pulled the trigger.

It will go off, and you will splatter this nations’ economic and political system all over the wall.

It’s a Catch 22 and there’s no way out.

Defaulting on or inflating away our debt are the only viable solutions. Both of these will lead to the same end - a complete and total collapse of the way of life Americans have become used to.

Just as Henry Paulson, President Bush, et. al. warned of economic collapse and depression in 2008, Mr. Geithner warns of the very same today. All of the trillions spent, all of the laws passed, and all of the manipulations of global asset markets, have done absolutely nothing to resolve the fundamental systemic problems we faced prior to the onset of the crisis.

It is, quite literally, going to be the end of the world as we know it - and it cannot be stopped.

It’s time for each individual to take steps to prepare for a national debt default and a complete debasement of the US dollar. It won’t be long before we either can’t meet our debt obligations or our creditors finally put a stop to our out of control borrowing. And when they do, the chances are high that we will experience a hyperinflationary monetary collapse, complete with disruptions to the normal flow of commerce, food shortages and out of control prices. The only refuge will be to understand what is money when the system collapses and start preparing now. The government is getting ready for it, so should you.

 

[Depth Trade]

UBS whistleblower Bradley Birkenfeld deserves statue on Wall Street, not prison sentence
http://www.nydailynews.com/news/national/2010/01/06/2010-01-06_unveils_bank_fraud_gets_jail.html

Juan Gonzalez - News
Wednesday, January 6th 2010, 4:00 AM

Barack Obama, who entered the White House promising all this change, should be hailing Bradley Birkenfeld as a modern-day hero.

He should erect a statue on Wall Street for this former banker for Swiss giant UBS who blew the whistle on the biggest tax-evasion scheme in U.S. history.

Instead of rewarding Birkenfeld, Obama's Justice Department is sending him to prison. He begins serving a 40-month federal sentence Friday for conspiracy and bank fraud.

What about his former bosses and fellow bankers at UBS and thousands of rich American clients who for decades stashed billions of dollars in secret UBS accounts to evade paying federal taxes?

Well, the government let them buy their way out of jail.

UBS pleaded guilty and paid a $780 million fine in February, while thousands of Americans with unreported offshore accounts have been allowed to belatedly disclose them and pay civil penalties.

Only Birkenfeld, the 44-year-old whistleblower, ends up in jail - the No. 1 example of injustice and hypocrisy in the age of Obama.

Who can forget that priceless photo of the President playing golf on Aug. 24 during his Martha's Vineyard summer vacation with Robert Wolf, president of UBS Americas?

Wolf and his employees donated $540,000 to Obama's presidential run. That made UBS the 12th largest source of his campaign funds.

Of all the people in America to choose for a golf partner, Obama chose Wolf.

The outing was only three days after Birkenfeld's harsh sentencing, and less than a week after UBS agreed to turn over the names of 4,450 of its American clients to the Justice Department. That's just a portion of 19,000 American accounts the bank has admitted keeping secret from U.S. tax officials.

So why is Birkenfeld, who gave hundreds of those names to prosecutors, going to jail?

"Without Mr. Birkenfeld ... I doubt ... this massive fraud scheme would have been discovered," Assistant U.S. Attorney Kevin Downing conceded at the Aug. 21 sentencing hearing.

Prosecutors also claimed in that hearing and in a "60 Minutes" interview Sunday night that Birkenfeld withheld information on how he had helped his biggest U.S. client, California billionaire Igor Olenicoff, hide hundreds of millions in assets. So when Birkenfeld flew here from Switzerland in early 2008, they arrested and charged him.

Birkenfeld's lawyer Stephen Kohn denies those allegations. He says the government is sending a terrible signal to future whistleblowers.

Kohn filed a formal complaint yesterday with the U.S. attorney general's office of professional responsibility, claiming the "main allegations used to secure [Birkenfeld's] indictment and imprisonment were not based on accurate or truthful information."

Birkenfeld offered to provide every name he knew of secret account holders at UBS, Kohn said, but he first wanted a formal subpoena because he was then a resident of Switzerland. Under Swiss law it is illegal to disclose client information.

The Justice Department refused to issue the subpoena, so Birkenfeld then went to the IRS, the Securities and Exchange Commission, and the U.S. Senate during the summer of 2007 offering the information to them.

The Senate's permanent investigations subcommittee agreed to subpoena him. He gave the committee a detailed deposition on Oct. 11, 2007 about UBS fraud scheme with lots of names, including that of Olenicoff. E-mails Kohn provided back up that claim.

Birkenfeld gave the same information to the IRS and the SEC.

Several weeks later, Olenicoff was indicted. He pleaded guilty and paid a $53 million fine.

Kohn has asked Attorney General Eric Holder for a formal investigation of the actions of Justice Department prosecutors.

Holder has his own UBS headache. Last year, the attorney general recused himself from the case because he once served as a lawyer for the Swiss bank.

The Birkenfeld case has exposed a lot more than hidden bank accounts.

 

[Depth Trade]

Have entered the following position.

Usd/jpy long 82.36
s/l 82.137




Financial trends of the new American economy – Higher educated workforce with harder time finding and keeping jobs, median retirement account for Americans at $2,000, global stock market growth, and housing bust covering up inflation in other areas.
http://www.mybudget360.com/financia...ury-inflation-global-stock-markets-education/
Posted by mybudget360

The Great Recession is revealing some fundamental challenges in our economy. One of those challenges revolves around the exceedingly expensive college degree and its ability to translate into employment. As a percent many more American’s have a bachelor’s degree today than say in 1992 yet unemployment for college educated Americans is at modern record highs. Another profound challenge facing American families is retirement savings (or lack thereof which is more likely the case). Retirement is largely becoming a luxury that only a handful of families can count on. As we look back at the last decade not all global stock markets were created equal and this is evident when we compare the US stock market to those abroad. Finally we will examine what areas are seeing major price increases all the while overall inflation appears to be muted to average Americans.


College educated rise but less employment



Source: BLS

In 1992 27 percent of those employed and 25 years of age or older had a bachelor’s degree or higher. Today that figure is up to 36 percent. However back in 1992 during another recessionary time those with bachelor’s degrees or higher had an unemployment rate of 3.5 percent while today it is up inching closer to 5.5 percent.

“In other words as a nation our employed workforce is more educated but it is also having a harder time gaining or maintaining employment. At the same time college costs have far outpaced the overall inflation rate.”

This may seem counterintuitive because in terms of career aspiration a college degree is less likely today to secure you a job compared to 1992 but it is much more expensive in real terms. So what are you really paying for? Of course college is not merely a means to a job but a place where students develop into well rounded citizens. Yet many for-profit institutions sell themselves as job factories and are all the willing to take federal financial aid without any statistics to back up their career placement rates.

What has occurred is a bubble in higher education. Obviously becoming an educated citizen is important. However we are facing a stratified market. You have private institutions charging $50,000 a year or more catering to many of the financially well off in the country. This group continues to get a solid education. Next you have a public education system with very good schools but competition for admission is getting exponentially harder and students are dealing with bigger classes and more expensive tuition. Finally you have the for-profit sector that merely operates to generate revenues by sucking in federal financial aid and not being accountable to their students and many operating only one step above diploma mills.

Retirement accounts largely a concern for top households

A BLS report done a few years ago showed that the median amount in retirement accounts for Americans was $2,000. This makes sense given that half of Americans make $25,000 a year or less. Many are looking at Social Security as their retirement account. If you look at where the money is aggregated you will start to realize that retirement accounts are largely becoming a luxury for a small fragment of American society:



Keep in mind that only 15 percent of US households make more than $100,000 or more a year. However 64 percent of all retirement assets are in the hands of the top 15 percent. The median household income in the US is $50,000. So we can even average out this amount here:

$1.04 trillion / 55 million US households = $18,909

Now this may seem higher than the BLS figures but keep in mind this is because of the $20,000 to $49,999 cohort that holds the bulk of this amount. In reality 1 out of 3 Americans have zero in savings. Even here the data is skewed. But think about the $18,909. How long would that last you in retirement? Say you draw down $1,000 per month and you are out of money within 18 months.

For many saving for retirement has become a harder and more trying exercise. If we look at the domestic stock market we can see why.

Global stock market growth



Even after the amazing 90 percent stock market recovery from the 2009 lows the S&P 500 is still off by 11 percent from where it was in January of 2000. In other words someone investing in boring and plain bank CDs actually performed better than the overall stock market for the decade. The Wall Street mystique has been lost on many. 60 Minutes featured a story of a famed gambler that made millions betting on sports yet was taken for a ride with Wall Street. In his own words, he did not trust Wall Street. This coming from a professional gambler and hustler. Wall Street has largely become one giant casino.

What is fascinating is markets that have benefitted from outsourcing such as India and China have boomed exponentially. In exchange for cheap goods many Americans are now struggling to keep a hold on to what they once thought of as the middle class. Why would a global multinational corporation want to pay someone in the US $10 an hour when they can pay someone overseas $10 per day for the same work? That is the profound question many now have to wrestle with and no politician is willing to tackle.

Inflation is where?

The BLS CPI has shown virtually no movement over the last few years. Much of this is due to the bursting of the housing market. The BLS heavily weights housing as it should. Most Americans spend the most on their housing costs each month. Yet the housing crash has hidden some major inflation in certain items. For example, oil is back up and you need only look at gas prices. For those who shop the cost of food items has gone up last year. Yet retailers have gotten creative with packaging so prices stay the same yet the amount you are receiving has gone down.

Take a look at the price of coffee, wheat, soybeans, orange juice, and other items over the last year. The S&P 500 went up by 13.6 percent but this pales in comparison to other sectors.



What can we conclude from the above? It is safe to say that there is a bubble in higher education. The costs are outstripping the benefits in many cases depending on what schools you go to. This is similar to the housing bubble. Some homes should have never tripled in value yet many homes are nice and built with quality in good areas. Others are not but when banks get involved you are likely to find speculation and gambling inflating costs. Students need to be extremely careful in choosing their institution and not falling into too much debt. Another conclusion you can draw is that the housing bust has hidden the inflation of many daily items. The CPI is muted because of the implosion of the housing market and this covers up rising costs in other sectors. For example college tuition, healthcare, gas, and food have all gone up significantly over the decade yet this hardly shows up while wages have gone stagnant or declined. Ultimately American families have to be cognizant of these changes since they will impact their daily lives.

 

[Depth Trade]

Have entered the following position.

Usd/jpy long 82.36
s/l 82.137

Have also just entered the following trade.

Usd/cad long 1.0003
s/l
0.99738


Tossing The Consumer Under The Bus...And Insanely Expecting An Economic Recovery
http://www.zerohedge.com/article/gu...r-busand-insanely-expecting-economic-recovery
Submitted by D. Sherman Okst of Financial Sense

Tossing the Consumer Under the Bus...And insanely expecting an economic recovery

I’ve been pouring through the Fed Reserve’s recent release of circa 2005 FOMC meeting transcripts. The most striking observation that one can make is that the consumer - the very lifeblood that determines whether our economy will live or die - has been discarded.

Discarded --- as in tossed under the bus.

Ninety-nine percent of our “economists” today have it entirely ass backwards: They believe that the economy supports the consumer. In reality, it really is the other way around. Proof: You can put two or more consumers together and create an economy but remove the consumers from an economy and you are left with nothing.

“Jobless recoveries” are Cable News media spin.

The following excerpts will leave you thinking that you are watching some bizarro episode of the “Twilight Zone.”

Toss the consumer under the housing wheel of the bus and laugh about it:

"–I offer one more piece of evidence that I think almost surely suggests that the end is near in this sector. While channel surfing the other night, to the annoyance of my otherwise very patient wife, I came across a new television series on the Discovery Channel entitled “Flip That House.” [Laughter] As far as I could tell, the gist of the show was that with some spackling, a few strategically placed azaleas, and access to a bank, you too could tap into the great real estate wealth machine. It was enough to put even the most ardent believer in market efficiency into existential crisis. [Laughter]~David Stockton, Dec. 13, 2005, economist and Fed comedian.

So while publicly denying the existence or even the possibility of a housing bubble --- the Fed was privately laughing about its imminent and apocalyptic end. Jokes on us. The result of this meltdown is 22% unemployment, 43 million people on Food Stamps, 1 in 5 kids going to bed hungry at night, millions of homeless people resulting from foreclosures, millions of Americans watching as their largest investment (their home) tanks, local governments who rely on property taxes left struggling and a few failed bond auctions away from shutting down or being “bailed out”.

We are left holding the bag, as this past weeks Financial Sense News with G. Edward Griffin noted, WE - not the Fed - are the lenders of last resort.

The other day I saw Alan Greenspan say ‘Prove it’ (that he created the housing meltdown). The reporter gave him a free pass, all he had to do is ask Greenspan who created the years of cheap money, who muzzled Brookley Born (the CFTC Commissioner who wanted to regulate Derivatives) and who helped get rid of the Glass Steagall Act with a 3-2 Fed vote, and who failed to regulate the banks.

They knew, from the September 20, 2005 meeting:

“I’ll close with one other thing, the central banker’s anxiety, which is: “Good times are bad because they could turn out to be bad. Bad times are bad for obvious reasons.” [Laughter] I think you’ve given us a lesson in why these extremely good times are unlikely to be good for us in the long run.~ Ferguson.

Toss the consumer under the deficit wheel of the bus and laugh about it:

“Tell me, Sam, is there really any difference between Republicans and Democrats when it comes to spending?” And Cohen said, “I want to think about it, do some research, and give you a serious answer.” He called back the next morning and said, “Yes, George, there is. Democrats enjoy it more.” [Laughter] “But otherwise there doesn’t appear to be any difference.”~Fisher.

As ZeroHedge pointed out, “...that ratio is already roughly 1 to 2, meaning for every dollar in revenue the US government issues more than one dollar of debt just to fund the deficit.”

While our public debt is about 14 trillion our unfunded liabilities are much larger.

Unfunded (read: looted) Liabilities

Social Security 14.6 trillion

Prescription Drugs 19.2 trillion

Medicare 76 trillion

Total 109,800,000,000,000.00

109.8 trillion + 18 trillion (18 trillion includes GSE off balance sheet debt) = 127.8 trillion dollars.

Perhaps the simplest way to look at it is this: 55%-65% of our income goes to taxes and fees, we work 8.5 months of the year to pay for this insane mess. The consumer has then 3.5 months of income with circa 1970s wages to consume.

How anyone can joke about being the enabler, the debt pusher to a body of almost 535 fiscally insane debt binging lunatics when their kids are going to be going through debt detox hell is anything but something to laugh at. (Ron Paul, Rand Paul, Paul Ryan and a few fiscally responsible leaders excluded). If the Fed wasn’t monetizing debt the US would be where it should be - in bankruptcy reorganization.

Overdosing the user only tosses the consumer under the bus, for it is the consumer who pays this tab 8.5 months of the year.

Rob the consumer and then toss them under the currency tire and laugh about it:

“Absent a dollar depreciation that’s now probably on the order of 8, 9, or 10 percent, the deficit is going to steadily worsen. If the dollar were to start depreciating, that would slow the rate of deterioration. If the dollar depreciation that we put into the forecast were to get as high as 8 or 9 percent, that might plateau the deficit”.~Johnson

“One thing we can be sure of is that the value of the dollar will be worth 100 cents.” [Laughter]~Greenspan

There was also discussion where Bernanke talks about a chart showing the dollar depreciating by 10% per year.

All of this is insane robbery. Since the inception of the Fed our dollar has been robbed 96% of its purchasing power, 80% since Nixon declared force majeure in 1971 and took us off the quasi-gold standard. Wages have been flat since the 1970s, the consumer is saddled with 8.5 months of governmental debt, to steal 10% per year from the .04 cents he calls a dollar won’t make him/her a strong consumer.

Think about that the next time you hand over a dollar, look at that dollar and picture .04 cents, next year it’ll be closer to .03 cents. Or worse.

They can only toss people under the bus like this because most people don’t understand why prices go up. If money was grain they’d (consumers/people) would get this the first year they transitioned from a drought where their grain was in high demand to a year there was a bumper crop and no one wanted the stuff.

Rob the consumer of good wages then toss them under the globalization tire and laugh about it:

“Everyone I’ve talked to continues to try to figure out ways to exploit globalization. Each of them, from the IT [information technology] guys to the big box retailers to the specialty chemical firms to the service firms, wants to have offshore supply. One of the CEOs said, “We have a long way to go in exploiting China.” We’ve heard that forever. And one of my favorites was the comment, “China, India, and Indonesia can make Italian ceramics better than Italians can now or could 200 years ago.” [Laughter]

Globalization was an unmitigated disaster. Low wages, high oil prices and trade deficits all resulted from Globalization. China runs a surplus because it sells more stuff it makes than it consumes. The year Globalization kicked into high gear was the last year we saw a surplus. Now we borrow. We can’t borrow our way to prosperity, we just borrowed our way to insolvency. We can’t compete against someone making 2 dollars a day. We can’t expect low oil prices when we just sent our best jobs to China so they can afford more cars. China now sells more cars than the US does, as a result, Asia now imports more oil than we do.

The wheels are coming off the economic bus and the drivers are laughing at us as we get tossed under it and run down.

Sad.

The solution is simple, we are broke since we take in with taxes and borrowing less then we owe. Our deficit alone ensures default or Quantitative Easing from now until the wheels come entirely off.

It is time we reissue the currency, tie it temporarily and loosely to gold, get our manufacturing jobs back and move on.

 

[Depth Trade]

Have entered the following position.

Usd/jpy long 82.36

Have also just entered the following trade.

Usd/cad long 1.0003
s/l
0.99738 ]

Have exited these positions.

Usd/jpy out 82.99'7
+15%

Usd/cad out 0.9973'7
-4.8%

Balance
= +10.2%


Deep layoffs take effect in struggling NJ city
http://news.yahoo.com/s/ap/20110118/ap_on_re_us/us_camden_layoffs
By GEOFF MULVIHILL, Associated Press Geoff Mulvihill, Associated Press – Tue Jan 18, 2:01 pm ET

CAMDEN, N.J. – Some firefighters turned in their helmets and police officers their badges Tuesday as part of deep municipal layoffs destined to further erode the quality of life in Camden, already one of the nation's most impoverished and crime-ridden cities.

About 335 workers, representing one-sixth of the local government work force, lost their jobs, according to Mayor Dana Redd. It was worst in the public safety departments, where nearly half the police force and close to one-third of the city's firefighters were laid off.

Laid-off firefighters walked eight blocks together from the police union hall to Fire Department headquarters, snaking past City Hall, then lined up their helmets in front of the building, picked them back up and started to turn them in along with their other gear.

"It's one of the worst days in the history of Camden," said Ken Chambers, president of the firefighters union.

Redd blamed the public safety employee cuts on their unions, saying they have not been willing to make job-saving concessions or accept the reality that the state government will no longer bail out the city as it has for the past two generations.

[Rewind: College girl named police chief in drug cartel capital]

"Instead of protecting and serving the city, the residents of Camden, they're choosing to protect their high salaries," she said.

The mayor said she was willing to continue negotiating with unions to try to reach cost savings that would allow the city to bring back some of the laid-off workers.

Redd said a proposal to the rank-and-file police union, the Fraternal Order of Police, was to be voted on Wednesday. She would not say exactly what the proposal entailed or how many jobs it could save. But she said that if the unions agree to concessions, about 100 police officers and most of the firefighters could be brought back.

Chambers said residents should not expect to be safe as the number of fire companies is reduced. He said the union will continue to meet with city officials to try to reach a deal under which some firefighters could be brought back.

Police officers had begun turning in their badges Monday as it became clear that no last-minute deal was going to save many jobs.

Located directly across the Delaware River from Philadelphia, Camden is rampant with open drug-dealing, prostitution and related crimes. More than half of Camden's 80,000 residents, mostly black and Hispanic, live in poverty.

A local pastor says "the fear quotient has been raised," and a police union took out a full-page newspaper advertisement last week warning that Camden would become a "living hell" if layoffs were not averted.

The city was the nation's second-most dangerous based on 2009 data, according to CQ Press, which compiles such rankings. Camden ranked first the previous two years. In 2009, the city had 2,380 violent crimes per 100,000 residents — more than five times the national average, the FBI said.

The anti-crime volunteer group Guardian Angels says it will patrol Camden, as it has Newark, where there were major police layoffs in November.

The Fire Department has already been relying on help from volunteer departments in neighboring towns. Interim Fire Chief David Yates, who retired Jan. 1, has warned that that layoffs will increase response times.

 

[Depth Trade]

Have entered the following positions.

Usd/jpy long 82.73'3
s/l 82.65'5

Usd/cad long 0.9967'8
s/l 0.9948



Is Silver Bottoming?
http://seekingalpha.com/article/247477-is-silver-bottoming
author: Marco G.

Last year was a very good year. The author was able to increase his portfolio value by double digits (nearing triple digits) during 2010 by concentrating on the smaller mining stocks. The spectacular performance in the fall of the precious metals and miners accounted for almost all of the gains.

Looking forward to 2011, the author is searching for possible investment suspects. Runing over the charts this morning, something particular stuck out - the Silver price is exhibiting signs of bottoming, as displayed in the following chart:

(Click charts to enlarge)



The orange rectangle at the left side highlights the time frame at the start of Silver's great ascent last summer on or about August 26, 2010. The first circle on the right of the chart highlights that the Relative Strength (RSI) is now below the 50 level, having been unwound since December 2010. The second circle highlights the white candlestick, which engulfs the previous day's red candle; this signals a turning point in sentiment. Also, the price candlesticks bounced off the 50 day Exponential Moving Average (EMA), the red line, again indicating a reversal of sentiment. Note that during the rise of the Silver price, the candles did not even come close to breaching the 20EMA, such was the strength of the price move. Finally, the bottom circle on the right shows that the Moving Average Convergence Divergence (MACD) histogram is showing a lower divergence, again indicating a more closely aligned market opinion.

As the above Stockcharts is one day behind in the data displayed; the author switched to look at the SLV ETF (as proxy for Silver price). The chart of the SLV is below:



As indicated by the first chart, the first circle on this chart is displaying a long black candle for the day so far, as the pricing is jockeying further upwards. The second bottom circle on the right highlights the fact that the Stochastic Oscillator (STO), a price speed or momentum indicator, is turning upwards. This is further data to support the idea that the Silver price has bottomed and may now be turning upwards.

This is all fine to see the market sentiment on the charts, but what else is happening in the Silver space that may support the sentiment findings?

Thanks to reader DT, who alerted this author to some contango happenings in the Silver Futures pits as posted on Zero Hedge:

Last time we saw a contango move this significant was in 1997 before Warren Buffet took delivery. While more information is needed, and this could be a fake out we think the spread’s move is important. It happened during Asian hours and the Asian market has shown strong physical demand.
Another compatriot SR has alerted the author to this commentary "Bullion shorts in over their heads says our man in London" by Rick Ackerman:

This is just a bluff poker hand and by the time we get through NFP they are going to be called. Embedded shorts are going to have to cover or suffer a royal religious experience. All we are seeing is the same old washing cycle active so that the bullion banks can cover. However the lines cross very close to here so any benefit gained by flushing out the visible stops will be lost as new real strong hands pick their pockets. We buyers sat back largely yesterday looking for better prices and any spike down will, be short lived and cause a feeding frenzy.
Finally I submit my own anecdote in that a few weeks ago, through a third party, an Asian lady was inquiring as to whether it was a good idea for her to purchase $100,000 RMB in Silver certificates. Apparently, her boss had already purchased $1,000,000 RMB in certificates and was crowing about the percentage gains already. It seems that the Asians have an affinity for Silver, and that Silver certificates are now very easy to purchase.

Is a short squeeze for Silver in the works?

Disclosure: I am long GGCRF.PK and long junior mining stocks not listed.

Disclaimer: The information and opinions contained within this document reflect the personal views of the author and should be viewed as food for thought and amusement only. The author may from time to time have a position in any of the securities mentioned. There are no guarantees of the accuracy, reliability or completeness of the information contained herein. Independent due diligence and discussions with one’s own investment and business advisor is strongly recommended. These writings are not to be construed as an offer or solicitation with respect to the purchase or sale of any security or as an endorsement of any product or service. We do not request or receive compensation in any form in order to feature companies in this publication. It is prohibited to copy or redistribute this document to any type of third party without the express permission of the author. This document may be quoted, in context, provided proper credit is given.

 

[Depth Trade]

Have entered the following positions.

Usd/jpy long 82.73'3
s/l 82.65'5

Usd/cad long 0.9967'8
s/l 0.9948

These stops have been hit.

Usd/jpy out 82.65'5
-1.99%

Usd/cad out 0.9948
-4.02%

Have entered a second Usd/jpy position.

Usd/jpy long 82.67'3
s/l 82.51'7


Russian government now largest shareholder in BP
http://www.floridaoilspilllaw.com/r...lecting-damages-gulf-oil-disaster-congressman
Financial Times, January 16 2011:

BP’s $16bn share swap with Rosneft, which will see the Kremlin indirectly become the single largest shareholder…
BP angers America again – this time over deal with Russians, The Independent, January 17, 2011

“The national security implications of BP America being involved with the Russian company – that does require scrutiny by the Committee of Foreign Investment in the US (CFIUS),” Michael Burgess, a Republican from Texas, said in a television interview hours after the deal was signed. …

Ed Markey, a prominent Democrat, had highlighted that BP was in 2009 the top supplier of petroleum to the US military. And he promised to push for intense scrutiny of the deal. He said: “Even following the largest oil spill in US history, and potentially billions of dollars in fines still outstanding, the Russian Bear is apparently bullish about BP. This acquisition will almost certainly complicate the politics of levying and collecting damages from BP following their Gulf of Mexico oil spill.

“BP once stood for British Petroleum. With this deal, it now stands for Bolshoi Petroleum. The details of this deal and its impacts on the operations of BP America need to be thoroughly examined,” Mr Markey added.

 

[Depth Trade]

These stops have been hit.

Usd/jpy out 82.65'5
-1.99%

Usd/cad out 0.9948
-4.02%

Have entered a second Usd/jpy position.

Usd/jpy long 82.67'3
s/l 82.51'7

Have entered a second Usd/cad position also.

Usd/cad long 0.9927
s/l 0.9905'8



A "New Phase Of Globalization" Is Taking Shape in Beijing, Flag Planted on American Soil
http://www.activistpost.com/2011/01/new-phase-of-globalization-is-taking.html

The Red Dragon is roaring. The headline news over the weekend was that Chinese President Hu Jintao called the currency system a "product of the past." Hu believes that Chinese currency will likely become the world's currency within the not-to-distant future. On the heels of that announcement, a Financial Times article highlights the role that China already has within a new system of globalization; one that supplants the U.S. as a key trading partner at the hub of the global trade wheel.

Here is a perfect summary of the current situation:

Over the past few decades, China has benefited hugely by hitching itself to a process of globalization where the rules were written in Washington and the American consumer was the buyer of last resort. China prospered by making first the socks, then the washing machines and finally the iPods sold at Walmart.

Now China is moving beyond cheap consumer goods to infrastructure such as power equipment. By supplying developing countries with the tools to grow, China is becoming a principal global investor. In so doing, it is entrenching itself as an engine of growth for the future, which has an added effect of laying the groundwork for its own currency to take a central role in the new relationships being developed.

At the heart of China's global initiative is China Development Bank; counterpart to the U.S. Federal Reserve Bank. However, unlike the private Federal Reserve, China's investment bank is firmly under state control, not the other way around, allowing it to openly invest domestically and abroad, while integrating coherent government policy decisions. Its investment strategy is rooted in entering a market where they can "buy up low-priced (financial) assets." Lucky for them, that is the very direction the entire global market is headed.

The fact that China is set to be the new global boss was confirmed by the White House red-carpet treatment and state dinner given to the Chinese head of state yesterday, culminating with Chinese flags planted along Constitution Ave. signifying the changing of the guard. The full outsourcing of the American Republic has been finalized.

The world now awaits its new marching orders.

 

[Depth Trade]

These stops have been hit.

Usd/jpy out 82.65'5
-1.99%

Usd/cad out 0.9948
-4.02%

Have entered a second Usd/jpy position.

Usd/jpy long 82.67'3
s/l 82.51'7

Usd/cad long 0.9927
s/l 0.9905'8

Have exited positions. Holding zero positions.

Usd/jpy out 82.51'7

Usd/cad out 0.9938'9


Balance on currency trading.
(start date 20/01/11)
+1.26%


Patriot Act, a Nazi law: Ex-CIA official
http://www.presstv.ir/detail/159376.html

The United States Patriot Act is similar to the legislations carried out by the Nazi Germany in the World War II era, a former CIA officer says.


“The Patriot Act was similar to legislation carried out by the Nazis because essentially it was using terrorism in both cases as an excuse to strip civil liberties that were enjoyed in both countries; in the United States and Germany,” Phillip Giraldi said in an interview with Press TV.

“Governments have been willing to use fear, such as fear of terrorism, and fear of the enemy, as a way to get the people lined up in support of government policies. Very often these policies are essentially bad for the people because they take away many of their rights,” the former CIA officer said.

He went on to say that the relationship between the American citizens and the US government has changed for the worse since the introduction of the Patriot Act, adding that Americans had not become any safer by their rights being stripped away.

The US Patriot Act and desecration of the constitution has brought a dictatorship surveillance society of phone tapping, hidden cameras and policy brutality in the United States, Giraldi said.

The act, which was hastily adopted six weeks after the 2001 terrorist attacks, allows the US government to spy on its citizens without the need for a court order.

In February 2010, the House of Representatives and the Senate approved the extension of the Bush-era bill and sent it to President Obama who thereby signed the legislation into law.

 

[Depth Trade]

Have entered the following positions.

Usd/jpy long 82.90'8
s/l 82.80'9

Usd/cad long 0.9944'2
s/l 0.9934'6

Aud/usd short 0.9918'3
s/l 0.9933'5


Balance on currency trading.
(start date 20/01/11)
+1.26%


A Path Is Sought for States to Escape Their Debt Burdens
By MARY WILLIAMS WALSH
http://www.nytimes.com/2011/01/21/business/economy/21bankruptcy.html?_r=2&src=busln

Policymakers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers.

Unlike cities, the states are barred from seeking protection in federal bankruptcy court. Any effort to change that status would have to clear high constitutional hurdles because the states are considered sovereign.

But proponents say some states are so burdened that the only feasible way out may be bankruptcy, giving Illinois, for example, the opportunity to do what General Motors did with the federal government’s aid.

Beyond their short-term budget gaps, some states have deep structural problems, like insolvent pension funds, that are diverting money from essential public services like education and health care. Some members of Congress fear that it is just a matter of time before a state seeks a bailout, say bankruptcy lawyers who have been consulted by Congressional aides.

Bankruptcy could permit a state to alter its contractual promises to retirees, which are often protected by state constitutions, and it could provide an alternative to a no-strings bailout. Along with retirees, however, investors in a state’s bonds could suffer, possibly ending up at the back of the line as unsecured creditors.

“All of a sudden, there’s a whole new risk factor,” said Paul S. Maco, a partner at the firm Vinson & Elkins who was head of the Securities and Exchange Commission’s Office of Municipal Securities during the Clinton administration.

For now, the fear of destabilizing the municipal bond market with the words “state bankruptcy” has proponents in Congress going about their work on tiptoe. No draft bill is in circulation yet, and no member of Congress has come forward as a sponsor, although Senator John Cornyn, a Texas Republican, asked the Federal Reserve chairman, Ben S. Bernanke, about the possiblity in a hearing this month.

House Republicans, and Senators from both parties, have taken an interest in the issue, with nudging from bankruptcy lawyers and a former House speaker, Newt Gingrich, who could be a Republican presidential candidate. It would be difficult to get a bill through Congress, not only because of the constitutional questions and the complexities of bankruptcy law, but also because of fears that even talk of such a law could make the states’ problems worse.

Lawmakers might decide to stop short of a full-blown bankruptcy proposal and establish instead some sort of oversight panel for distressed states, akin to the Municipal Assistance Corporation, which helped New York City during its fiscal crisis of 1975.

Still, discussions about something as far-reaching as bankruptcy could give governors and others more leverage in bargaining with unionized public workers.

“They are readying a massive assault on us,” said Charles M. Loveless, legislative director of the American Federation of State, County and Municipal Employees. “We’re taking this very seriously.”

Mr. Loveless said he was meeting with potential allies on Capitol Hill, making the point that certain states might indeed have financial problems, but public employees and their benefits were not the cause. The Center on Budget and Policy Priorities released a report on Thursday warning against a tendency to confuse the states’ immediate budget gaps with their long-term structural deficits.

“States have adequate tools and means to meet their obligations,” the report stated.

No state is known to want to declare bankruptcy, and some question the wisdom of offering them the ability to do so now, given the jitters in the normally staid municipal bond market.

Slightly more than $25 billion has flowed out of mutual funds that invest in muni bonds in the last two months, according to the Investment Company Institute. Many analysts say they consider a bond default by any state extremely unlikely, but they also say that when politicians take an interest in the bond market, surprises are apt to follow.

Mr. Maco said the mere introduction of a state bankruptcy bill could lead to “some kind of market penalty,” even if it never passed. That “penalty” might be higher borrowing costs for a state and downward pressure on the value of its bonds. Individual bondholders would not realize any losses unless they sold.

But institutional investors in municipal bonds, like insurance companies, are required to keep certain levels of capital. And they might retreat from additional investments. A deeply troubled state could eventually be priced out of the capital markets.

“The precipitating event at G.M. was they were out of cash and had no ability to raise the capital they needed,” said Harry J. Wilson, the lone Republican on President Obama’s special auto task force, which led G.M. and Chrysler through an unusual restructuring in bankruptcy, financed by the federal government.

Mr. Wilson, who ran an unsuccessful campaign for New York State comptroller last year, has said he believes that New York and some other states need some type of a financial restructuring.

He noted that G.M. was salvaged only through an administration-led effort that Congress initially resisted, with legislators voting against financial assistance to G.M. in late 2008.

“Now Congress is much more conservative,” he said. “A state shows up and wants cash, Congress says no, and it will probably be at the last minute and it’s a real problem. That’s what I’m concerned about.”

Discussion of a new bankruptcy option for the states appears to have taken off in November, after Mr. Gingrich gave a speech about the country’s big challenges, including government debt and an uncompetitive labor market.

Published: January 20, 2011

 

[Depth Trade]

Have entered the following positions.

Usd/jpy long 82.90'8
s/l 82.80'9

Usd/cad long 0.9944'2
s/l 0.9934'6

Aud/usd short 0.9918'3
s/l 0.9933'5


Balance on currency trading.
(start date 20/01/11)
+1.26%

Have exited usd/jpy position.

Usd/jpy out 82.80'9

Still holding Usd/cad, Aud/usd open positions.

Balance on currency trading.
(start date 20/01/11)
-0.27%


The Surprising Price of Wheat
By The Mogambo Guru
http://dailyreckoning.com/the-surprising-price-of-wheat/


01/20/11 Tampa, Florida – I was intrigued by the title of the essay “The Cheapest Thing on Earth” by Nathan Lewis here at The Daily Reckoning.

I was interested because I thought that such a tasty trivia tidbit could come in handy, like this morning when I could have used it as a distraction when my kids were calling me “cheap” because I wouldn’t open up my wallet and give them another king’s ransom for some new dumb reason; I forget what, but there was a lot of crying and wailing about it, whatever it was.

This is where I could have said, to throw them off, “Cheap? What do you know about cheap? Do you know what is the cheapest thing on earth? Huh? Do ya? Huh? Do ya? Yes or no?!”

Instead of providing me with the answer, he starts off with a pop quiz! Damn!

And when I say “pop” quiz, I mean exactly that, as he says, “Quick: name an asset, publicly traded, that is the cheapest in a hundred years.” Pop!

I, of course, had no idea, and instead of admitting it, I quickly read ahead, hoping to immediately find the answer, only to be surprised when he taunted me. “Houses?” he asks. “Nope. Stocks? I don’t think so. Commercial real estate? Bonds?”

By this time I was pretty peeved, and getting bored, too, as I was sure that if it was, indeed, none-of-the-above, then this was going to devolve into something about investing in something obscure, the significance of which would elude me even if you explained it to me over and over again, in a company I never heard of, and, probably, in a country I never heard of, either.

Just before I gave up reading in disgust, he dared to taunt me one more time, the *******! “Not too many, are there?” he asks.

At this final insult, my mind screamed, “Damn you! Damn you to hell! Tell me now, or I will fire off a flaming email that will be both highly insulting and vaguely threatening!”

I could almost hear his cruel, mocking laughter as he rudely called my bluff, and further insulted me and my false bravado with, “Now here’s a tougher one. Name an asset that is near the lowest price in all of human history.”

Arrgghhh! In all of human history? By this time I am angry and distraught, mostly angry, that somebody was exposing my stupidity and ignorance!

Suddenly, I am gasping for air and screaming that if he doesn’t tell me the answer pretty soon, I am going to start hearing those voices in my head again, and (now that you mention it) if I listen really closely, I can almost hear them already, way off in the distance, screaming to be heard and obeyed.

And we all remember how it turned out the LAST time that happened.

Obviously intimidated by the sudden revelation of the strange, powerful forces he is unleashing, he quickly announces, “The answer is: wheat”!!

I admit that I personally put those two final exclamation points at the end of his sentence as an emphasis, both to indicate surprise and to remind you that there are surely significant ramifications of this “price of wheat” thing, the horrors of which I never allow myself to even think, except during sleep, and then hopefully only when I am dreaming of being with some beautiful young thing, and maybe with some of her friends, too, who are all naked and sweaty and grunting and heaving and writhing around in some surreal bacchanalia of some kind, where the only interruption is the masses of people outside wailing and crying that “The price of food is up so much that we are burning things and looting grocery stores in mindless anger and desperation, and we are looking for the Fabulous Mogambo Seer (FMS) to pledge our undying allegiance and love because he predicted that this inflationary hell is Exactly What Would Happen (EWWH) when the stupid Federal Reserve kept creating more and more fiat money, creating astonishing amounts of money, creating outrageous amounts of money, creating So Much Freaking Money (SMFM) for so, so long that We’re Freaking Doomed (WFD)!”

I can reliably report, thanks to these dreams, that the sound of people starving to death is a real “mood killer,” perhaps on a par with the horror that wheat is now at the highest price ever, even going back to Biblical times, which is probably why those old Bible-era people were always “breaking bread,” and eating unleavened wheat crackers, and consuming miscellaneous cheap wheat products instead of having, you know, a few tasty tacos or maybe a pizza once in awhile, which I figure must have been because they were very expensive or something, which is why you never hear of anybody eating them.

Anyway, I immediately used this new information-as-icebreaker at the supermarket, and told the cashier, as she rang up my groceries, “I’ll bet you don’t know that wheat is at its lowest price in recorded history, but climbing fast because the horrid Federal Reserve is still creating So Freaking Much Money (SFMM) that the terrifying, heartbreaking misery and suffering of inflation in the prices of subsistence prices of items, like wheat, is guaranteed! Guaranteed, I tells ya!”

She just dragged my frozen burrito across her laser scanner, the irritating “beep!” noise only underscoring her complete lack of interest.

I went on, helpfully adding that they also said, “Actually, the entire agriculture complex, including corn, beef, pork and beans could fit this description.”

Again the lonely “beep!” as she listlessly ran my bag of Oreo Double Stuf cookies through the beam, her face never changing, not even to make the time pass with idle conversation about, for example, how much she adores cute old guys who buy such delicious cookies, or how my eyes twinkle so charmingly, or even to say how she noticed I kept looking at her boobs. You know; anything.

Giving up, I took my groceries in hand and parted without giving anyone my usual advice, which is to “Buy gold and silver right now, using whatever money you can glean from your stupid little job, because inflation is going to eat us alive, and a weird, distorted economy will make it even more hellish, all thanks to the horrid Federal Reserve continuing to create so much excess money. And buying gold and silver is so easy that a bunch of bored, underpaid worker-bees in a low-margin business like you can do it! In fact, it’s so easy that even morons say, ‘Whee! This investing stuff is easy!’”

 

[Depth Trade]

Have exited usd/jpy position.

Usd/jpy out 82.80'9

Still holding Usd/cad, Aud/usd open positions.

Balance on currency trading.
(start date 20/01/11)
-0.27%

All positions have been exited. For a daily loss of

-2.96%

Have entered the following positions.

Aud/usd short 0.9913'6
s/l 0.9954'8

Usd/jpy long 82.42'4
s/l 82.26

Usd/cad long 1.0000
s/l 0.9976'7


Balance on currency day trading.
(start date 20/01/11)
-1.7%



China Bank Moves to Buy U.S. Branches
http://online.wsj.com/article/SB100...28880.html?mod=WSJ_hp_LEFTWhatsNewsCollection
By LINGLING WEI

CHICAGO—China's biggest bank signed an agreement that would make it the first Beijing-controlled financial institution to acquire retail bank branches in the U.S., though regulators could still block the deal.

China's Hu Jintao visited a Chicago school Friday.
.Under the deal, Industrial & Commercial Bank of China Ltd., by some measures the world's largest bank, agreed to acquire a majority stake in Bank of East Asia Ltd.'s U.S. subsidiary. ICBC will pay $140 million for an 80% stake. Bank of East Asia, which is a publicly traded company based in Hong Kong, has a total of 13 branches in New York and California. ICBC and Bank of East Asia have talked to U.S. regulators about the deal, these people said.

China's largest bank, Industrial & Commercial Bank of China Ltd., is the first Chinese bank to acquire a U.S. deposit-taking bank. Ken Brown explains why it could be the start of big expansions by Chinese financial institutions in the U.S.
.The move represents what could be the start of big expansions by Chinese financial institutions in the U.S.

Signed in Chicago on the last day of Chinese President Hu Jintao's state visit to the U.S., the move, comes as both Beijing and Washington are calling for greater commercial ties between the two countries.

Both Beijing and Washington are eager to showcase their willingness to strengthen the business ties between the two countries, despite the many issues that will continue to hinder the relations. China is prodding the U.S. to ease its export controls, especially those involving high-technology products, aimed at its biggest economic rival. The U.S. is asking for more Chinese purchases of made-in-America goods and services.

The transaction is expected to be carefully scrutinized by U.S. regulators, including the Committee on Foreign Investment in the U.S., known as CFIUS, because of the state-controlled nature of the Chinese bank. A previous deal by a Chinese bank to acquire a bank in the U.S. was rejected by regulators. "It is going to be a long process," a person familiar with the matter said.


ICBC, as the bank is known, is based in Beijing and is 70% owned by the Chinese government. It has become increasingly comfortable venturing outside its home markets, which still account for the bulk of its profit. Last year, ICBC got into the broker-dealer business in the U.S. with a symbolic $1 purchase of the U.S. brokerage unit of Fortis Securities, controlled by France's BNP Paribas SA. That deal didn't subject ICBC to tight U.S. regulatory restrictions on foreign purchases of retail-banking operations.

U.S. regulators often demand that foreign banks prove they are adequately supervised in their home markets and have proper antimoney-laundering procedures in place before allowing them to set up retail operations, legal experts say.

The agreement was signed at the Hilton Chicago as part of a slew of pacts announced by roughly 60 U.S. and Chinese companies at a giant "signing ceremony" organized on Friday by China's Commerce Ministry and its U.S. counterpart.

Chinese Banks Muscle Further Into Singapore Access thousands of business sources not available on the free web. Learn More Both Beijing and Washington are eager to showcase their willingness to strengthen the business ties between the two countries, despite the many issues that will continue to hinder the relations. China is prodding the U.S. to ease its export controls, especially those involving high-technology products, aimed at its biggest economic rival while the U.S. is asking for more Chinese purchases of made-in-America goods and services. The contract-signing event in Chicago was hailed as "the most important event" in conjunction with President Hu's visit, according to officials in the Chinese delegation.

The move by ICBC underscores the desire by Chinese banking executives to transform their strength into a greater presence globally, as Chinese banks have emerged from the global financial crisis largely unscathed. Their hope is to better support Chinese companies and guard against losing customers to U.S. and European banks that already have networks world-wide. Meantime, Beijing has encouraged Chinese companies to expand overseas in recent years. In light of the huge foreign-exchange reserves China has, Beijing has encouraged its banks to invest more overseas.

In a speech at the event Friday, Chen Deming, China's Commerce Minister, said one of the priorities for the Commerce Ministry is to "encourage our companies to go out." He pointed to the vast foreign-exchange reserves held by China, saying that "we should turn those reserves into capital and assets." Otherwise, the reserves could decline in value because of inflation, Mr. Chen said.

Bank of East Asia is led by prominent Asian banker Sir David Li. Mr. Li drew unwanted attention to himself in the U.S. and Hong Kong in 2007 when the former board member of Dow Jones became the target of an insider-trading case involving News Corp.'s buyout bid for Dow Jones. Mr. Li later agreed to pay $8.1 million to settle the civil charges. Mr. Li couldn't be reached for comment.

So far, most Chinese investments in the U.S. financial sector have involved the Chinese taking passive, minority stakes in firms such as Blackstone Group LP and Morgan Stanley. Taking a majority stake in Bank of East Asia is a change of tactic for ICBC

At the same time, Bank of East Asia is no stranger to ICBC. It sold a 70% stake in its Canadian operations to ICBC last year and all of its six branches in Canada have since been rebranded ICBC Canada. Bank of East Asia has 13 branches in the U.S., concentrating in New York and California—two states that boast the largest numbers of Chinese immigrants. The bank formed its U.S. banking subsidiary in 2001 through the acquisition of Grand National Bank, of Alhambra, Calif.

The deal, if approved by U.S. regulators, would allow ICBC to gain relatively quick access to American depositors. Right now, ICBC has one branch in New York, but it isn't involved in the retail-banking business. Bank of China Ltd. is the only mainland Chinese bank that has a retail license in the U.S. market. The bank, also state owned, has two branches in New York and one in Los Angeles. It recently has started allowing American customers to buy and sell the Chinese currency through its U.S. branches.

The decision by Bank of China is the latest move by China to allow the yuan, whose value is still tightly controlled by the government, to become an international currency that can be used for trade and investment.

Chinese banks have encountered uphill battles to gain access to the U.S. market in the past. For instance, it took almost two years for ICBC to get the approval from the Federal Reserve to open its New York branch, which has so far focused on commercial lending. That green light was given shortly before President George W. Bush's trip to Beijing for the Summer Olympics in 2008.

Some Chinese banks' bids to acquire U.S. counterparts have been rejected. A case in point is China Minsheng Banking Corp. In 2008, Minsheng, China's first private bank and a midsize lender, agreed to take a 9.9% stake in San Francisco lender UCBH Holdings Inc., the holding company for United Commercial Bank. When the bank ran into trouble during the financial crisis over bad loans and accounting errors, Minsheng tried to buy it. U.S. regulators rejected the move because of restrictions on foreign investment in U.S. banks, according to people familiar with the matter. Regulators in late 2009 shut down United Commercial Bank and Minsheng had to write off its $130 million investment

 

[Depth Trade]

My bias for USD is weak against precious metals this coming week.

Xag/usd long: $30.884

Xau/usd long: $1420.55

Still holding Xag/usd, Xau/usd long.

Current prices.

Xag/usd: $31.76
+2.77%

Xau/usd: $1385.20
-2.49%

Position balance.
+0.28%




Wisconsin National Guard Preps For Worker Unrest After Governor Unveils Emergency Budget
http://www.businessinsider.com/nati...fter-gov-unveils-emergency-budget-plan-2011-2
Grace Wyler | Feb. 14, 2011, 9:49 AM

Wisconsin Gov. Scott Walker, a Republican, unveiled an emergency budget proposal Friday to deal with the state's growing budget woes. Wisconsin has a $137 million deficit this year, and faces a projected $2.9 billion budget shortfall for 2012 and 2013.

Under Walker's plan, public employees would lose all of their collective bargain rights, except a limited negotiation of wages. State workers would also have to contribute more to their pension and health care benefit plans.

Unions erupted in outrage as they learned about Walker's proposal. The Governor told Milwaukee Public Radio that he has briefed the Wisconsin National Guard to prepare them for any worker unrest today.

 

[Depth Trade]

My bias for USD is weak against precious metals this coming week.

Xag/usd long: $30.884

Xau/usd long: $1420.55

Still holding precious metal long positions.

Current prices,

Xag/usd $32.80
+6.20%

Xau/usd $1391.35
-2.06%

Position balance,
+4.14%



Are The Wild Teacher Protests In Wisconsin A Prelude To The Economic Riots That Are Coming To America?
http://theeconomiccollapseblog.com/...conomic-riots-that-are-coming-soon-to-america

Have you seen video of the teacher protests that are going on in Wisconsin? We haven't seen anything like this in America in quite some time. If you haven't seen video of the protests yet, some very good raw footage is posted below. On the one hand it is good to see Americans coming together and standing up for what they believe in, but on the other hand what these teachers are freaking out about shows just how much America has changed. These teachers are not protesting for liberty, freedom or to change the government. Rather, they are protesting because they want things to remain the same. They simply don't want anyone to mess with their pay. Well, the truth is that none of us ever wants to experience a pay cut. It is not a lot of fun. But sadly, states like Wisconsin are so broke that they have to find cuts somewhere. Someone is going to have to make a sacrifice. The teachers in Wisconsin just want to make sure that it is not them.

In the United States today, state and local governments are facing unprecedented budget crunches. Tax revenues are way down and expenses are way up. State and local government debt has reached at an all-time high of 22 percent of U.S. GDP, and many state and local governments are teetering on the brink of insolvency.

States like Wisconsin have to do something or else they will collapse financially. Wisconsin is facing a $3.6 billion budget deficit (which for that state is huge), and Wisconsin Governor Scott Walker and the Republicans in the legislature are attempting to make some tough cuts.

In particular, they want public employees to pay a little more towards their health care premiums and pension programs. In fact, what the Republicans are proposing would still leave Wisconsin public employees contributing far less to health care and pensions than their private sector counterparts.

U.S. Representative Paul Ryan recently appeared on MSNBC's "Morning Joe" program and described what Governor Scott Walker is asking the teachers to do....

Scott and I are very close friends. We e-mail each other quite a bit... He's basically saying that state workers which have extremely generous benefits packages relative to their private sector counterparts, they contribute next to nothing to their pensions, very, very little in their health care packages.

He's asking that they contribute about 12 percent for their health care premiums, which is about half of the private sector average, and about 5.6 percent to their pensions. It's not asking a lot. It's still about half of what private sector pensions do and health care packages do.

So he's basically saying "I want you public workers half of what your private sector counterparts do" and he's getting riots. It's like Cairo has moved to Madison these days.
These proposed changes have caused a massive uproar in Wisconsin. Just check out the following raw video footage from the last few days....



But this is what we have come to as a nation. Almost everyone agrees that reducing government debt is a good thing "in theory", but whenever anyone starts to put forward some specific proposals to cut government spending it makes those that will be affected by the cuts extremely upset.

Just look at what is happening with the federal government. Republicans and Democrats are both frothing at the mouth over extremely small budget cuts that have been proposed. Virtually none of our national politicians are even willing to discuss budget cuts that would actually make a serious dent in our budget deficits.

But we have got to do something. Spending by the U.S. government is spinning wildly out of control. Back in 1970, the U.S. government only spent about 200 billion dollars for the whole year. Well, this year the federal government is going to spend somewhere around 3.6 trillion dollars, and Barack Obama's newest budget proposal calls for U.S. government spending to increase to 5.6 trillion dollars by the year 2021. If the government continues to spend money at such a rapid pace it is going to completely wipe out our entire economic system....



But it is not just the U.S. government that is spending like a drunken sailor. Most of our state governments are complete financial disaster zones at this point as well.

As I have written about previously, the state of Illinois is such a financial disaster zone that it is hard to even describe. According to 60 Minutes, the state of Illinois is six months behind on their bill payments. 60 Minutes correspondent Steve Croft asked Illinois state Comptroller Dan Hynes how many people and organizations are waiting to be paid by the state, and this is how Hynes responded....

"It's fair to say that there are tens of thousands if not hundreds of thousands of people waiting to be paid by the state."

Something has got to be done about our national addiction to debt.

Government spending has to be dramatically cut. All of us are going to have to make sacrifices. We simply cannot continue to spend far, far, far more than we bring in.

But we are Americans - we do not like to make sacrifices.

Our founding fathers warned us about this. They warned that when the American people figured out that they could vote themselves money out of the U.S. Treasury it would greatly endanger our republic.

Unfortunately that is exactly what is happening today. The vast majority of government spending on both the national and state levels consists of direct payments to individuals of one sort or another.

The American people have become addicted to the bread crumbs that they receive from the hand of their master.

This is not what our republic was supposed to look like.

As the U.S. economy continues to decline, we are going to see a lot more riots like we have seen in Wisconsin. Once the American people realize that the "good times" are over, all hell is going to break loose.

Already the anger and the frustration of the American people is starting to boil over. Unfortunately, that anger and frustration is focused in 1000 different directions. The ruling elite and the establishment media are constantly encouraging us to hate one another. I recently wrote about this phenomenon in an article on another website....

The truth is that the "establishment" is constantly trying to divide us and get us fighting with one another. They pit the Republicans against the Democrats (even as though control both sides). They pit one race against another. They pit one gender against another. We are told that the rich are against the poor, the north is against the south, urban is against rural and that there are even "generational battles" going on. Frustration and hate are rapidly growing in the United States today, and a lot of that frustration and hate is unfortunately aimed at the targets that the mainstream media has programmed all of us to hate. Meanwhile, those at the top of the pyramid who are controlling the whole game love it when we are divided because we can never become united and challenge their control.
Unfortunately, America is more divided today than ever. Our extreme affluence has kept the thin veneer of civilization that we all take for granted from disappearing so far, but once our affluence is gone all of the hate and frustration in society is going to come bubbling to the surface and it is going to be horrifying to behold.

Once the economic collapse happens, most Americans are not going to take it sitting down. Most Americans are going to want someone to blame. Most Americans are going to want to lash out somehow.

America today is like a big, fat spoiled baby that is about to have its favorite pacifier permanently taken away. America is going to whine and cry and complain like there is no tomorrow.

For decades the financial "gloom and doomers" have been warning about what would happen to this country if we didn't get our house in order, but nobody wanted to listen. Everyone just kept piling up more debt as if it would never be a problem.

Well, now our entire country is covered in red ink. Large numbers of state and local governments across the country are on the verge of defaulting on their debts, and they are hoping that the federal government will bail them out. The federal government has already accumulated the biggest pile of debt the world has ever seen and continues to behave as if we can just keep borrowing and spending massive amounts of money forever.

There is no way out of this nightmare under the current system. Taxing people more is not going to solve our problems. Taxing people less is not going to solve our problems.

We have gotten to the point where it is inevitable that the debt bubble that we have created is going to burst. Our politicians can try to delay it for a while, but in the end the whole house of cards is going to come crashing down.

When the U.S. economy does totally collapse, it is going to make the riots that we have seen in Egypt and throughout the Middle East this year seem tame by comparison.

What we are witnessing right now in Wisconsin are just the "birth pains". The American people don't want to "tighten their belts". In fact, most Americans have absolutely no idea what "hard times" would even look like. When things go from bad to worse we are going to see temper tantrums in this country like we have never seen before.

So get ready. Unless there is some kind of dramatic transformation in this country, in the years ahead we are going to see some horrific economic riots.

It would be nice if we had a brighter future to look forward to, but we don't do ourselves any favors by living in denial.

So what do you all think about what has been going on in Wisconsin? Do you all believe that we could see huge economic riots inside America in the years ahead? Feel free to leave a comment with your opinion below....