Thursday, June 20, 2013

Wall Street falls after Fed's stimulus wind-down outline

By Rodrigo Campos
NEW YORK (Reuters) - Stocks fell 1 percent for a second day on Thursday after Federal Reserve Chairman Ben Bernanke outlined the start of a wind-down of stimuli that has been instrumental to the market's rally.
Bernanke said Wednesday the economy was expanding strongly enough for the Federal Reserve to begin slowing the pace of its bond-buying stimulus later this year.
His comments triggered selloffs in markets that have been supported by the Fed's $85 billion monthly asset purchases, including Treasuries and U.S. equities. The U.S. dollar rose, its strength continuing into Thursday's session.
"The market tends to overshoot and will continue to do so. We'll probably see an overreaction to this," said Art Hogan, managing director at Lazard Capital Markets in New York.
Even as Bernanke painted a rosier picture of the U.S. economy than some expected, weaker factory output in China and a continued recession in the euro zone kept investors concerned about global growth, adding to pressure on stock markets worldwide.
The number of Americans filing new claims for unemployment benefits rose more than expected last week, but not enough to signal a material shift from the recent pace of moderate job growth.
"The data-dependant part (of Bernanke's remarks) should be seen as a positive," said Hogan. But concern about Fed policy "combined with the long-standing concern of a Chinese slowdown" weighed on stock markets.
The Dow Jones industrial average fell 211.3 points or 1.4 percent, to 14,900.89, the S&P 500 lost 22.8 points or 1.4 percent, to 1,606.13 and the Nasdaq Composite dropped 42.18 points or 1.23 percent, to 3,401.02..
The S&P 500 dropped below its 50-day moving average, a level it has breached at the close on only one day this year, in mid-April. It found support near 1,606, which is the 23.6 percent Fibonacci retracement of the index's sharp move from mid November to May 22.
Specialty drugmaker Forest Laboratories Inc is among a handful of companies interested in bidding for Irish drugmaker Elan Corp Plc, two people familiar with the situation said. Elan's Irish shares were up 5 percent but its U.S.-traded shares shed 0.3 percent to $14.11, pressured by a rally in the greenback.
Walt Disney shares fell 1.8 percent to $63.16 after Goldman Sachs removed the stock from its "conviction buy" list.
Shares of Ebix Inc lost 42.5 percent to $11.35, a day after the insurance software provider said that it and an affiliate of Goldman Sachs would cancel their planned merger after U.S. regulators started an investigation into allegations of misconduct at Ebix.
Resales of U.S. homes rose in May to the highest level in 3-1/2 years and prices jumped, a sign that the housing sector recovery is gathering steam and could give the economy a significant boost this year.
(Editing by Bernadette Baum)

Home resales rise to three-and-half year high; prices jump

WASHINGTON (Reuters) - Home resales rose in May to the highest level in 3-1/2 years and prices jumped, a sign the housing sector recovery is gathering steam and could give the economy a significant boost this year.
The National Association of Realtors said on Thursday that existing home sales advanced 4.2 percent to an annual rate of 5.18 million units, the highest level since November 2009 when a home-buyer tax credit was expiring.
"Whatever inventory is coming onto the market, buyers are ready to snap it up," said Lawrence Yun, an economist at the NAR.

[Click here to check home loan rates in your area.]
The increase beat expectations for a rise to a 5 million-unit rate last month.
The housing market is one of the brightest spots in America's economy and is helping counter Washington's decision to raise tax rates and cut government spending this year.
A very accommodative monetary policy by the Federal Reserve, which has held mortgage rates near record lows, is helping to lift the housing market off the floor. Fed Chairman Ben Bernanke, however, gave clear signals on Wednesday that the Fed was on track to start dialing back its stimulus by the end of this year.
In May, the median home sales price increased a whopping 15.4 percent from a year ago to $208,000. That was the biggest year-over-year increase since 2005 and left prices at their highest level since July 2008.
"Prices have recovered quite suddenly and quite spectacularly," Yun said.
With prices rising, more sellers put their properties on the market, lifting the inventory of unsold homes on the market 3.3 percent from April to 2.22 million.
Still, the stock of homes for sale continues to be tight in the market. The May level of inventories represented just 5.1 months' supply at May's sales pace, down from 5.2 in April. Many economists consider 6.0 months to be a healthy balance between supply and demand.
(Reporting by Jason Lange; Editing by Neil Stempleman)

Ben Bernanke's Power Over Your Money

Ben Bernanke scared stock investors on Wednesday when he said the Federal Reserve may start slowing its economic stimulus program later this year, but what does it mean for borrowers and savers?
For years, the Fed's extraordinary intervention in the economy has kept borrowing rates very low. But people fear that once the Fed steps back, rates will inevitably rise.
Indeed, mortgage rates have recently risen from their record lows. Last week, average rates for a 30-year fixed-rate mortgage hit 3.98%, up from 3.35% in early May, according to mortgage giant Freddie Mac.

[Click here to check mortgage rates in your area.]
The recent rate increase amounts to about $100 more a month on a $300,000 mortgage, totaling $36,000 more over the course of 30 years, said Keith Gumbinger, vice president of HSH.com, a mortgage information company.
Related: Fed sets road map for end of stimulus
Unlike most consumer lending, mortgage rates are tied to long-term interest rates. While they probably won't climb much further, they are unlikely to fall back to record lows, he said.
Meanwhile, most borrowers will likely continue to enjoy rock-bottom rates on everything from auto loans to private student loan bills.
Of course, there's a downside to low interest rates: savers get stuck with measly returns from savings accounts and low-risk investments like CDs. The low rates have been particularly hard on retirees living on fixed incomes.
These consumer credit and savings products are largely tied to short-term rates, which the Fed has kept near zero percent since December 2008.
Short-term rates aren't expected to move higher anytime soon, said Greg McBride, senior financial analyst at Bankrate.com. Even when long-term interest rates start moving up, the Fed has committed to keeping short-term rates near zero until the economy strengthens considerably.
Related: Farewell 3% mortgage rates
In turn, the so-called "prime rate," the interest rate around which banks lend to their best customers and the most common benchmark used for setting credit card and other loan rates, has been stuck at 3.25% for years.
While borrowers with poor credit have seen credit card rates increase slightly this year, rates for consumers with excellent credit have continued to fall. Some have been offered interest rates in the single digits or 0% introductory offers for lengthy trial periods, said John Kiernan, senior analyst at Cardhub.com, a credit comparison site.

EPIC RANT: “They Take a Press Release from the Federal Reserve and They Think It Was Written by God”

in-god-we-trust

If there’s one thing that individual investors can take away from Ben Bernanke’s latest Fed update, it’s that all confidence in the financial and economic systems of this country has been lost.
Within seconds of Ben Bernanke suggesting the Fed would taper monetary expansion and reduce their activity stock markets tumbled.
This proves one thing, and it’s what we and many other critics of Fed policy have been saying for nearly five years. The only thing keeping the entire system afloat is the fact that the U.S dollar is the world’s reserve currency, and that we can print it to infinitum.
Ben Bernanke simply spoke of pulling back the money printing and look what happened. Stock markets dropped almost instantly. Can you image what will happen when the Federal Reserve actually stops the printing, or even pulls back a little bit?
It would be financial chaos on an unprecedented scale.
Americans should be outraged that it has come to this. And one American in particular has no qualms about letting his feelings be known.
Watch CNBC’s Rick Santelli as he calls out Chairman Ben Bernanke, fed policies, unemployment statistics, and the blind followers who refuse to question the government’s widespread machinations.
This is one you don’t want to miss.
Via Zero Hedge and The Daily Crux (video below)
On CNBC and all the channels that cover business, we have person after person after person, buy side, sell side, upside, downside.
How is the economy? Economy is great.
What about stocks? You got to buy them.
What if they break? You have to buy the dips.
What’s wrong with the economy? I don’t hear these people saying anything is wrong with the economy.
So what’s wrong, Ben? Why can’t we get out of crisis management mode?
There’s always going to be something.

If you pull it away and the stock market goes down, where does it say in the Constitution that some form of the government has to guarantee that stocks go up? Or guarantee that you have a house?
They don’t. Where have we gone off the rails? Enough is enough!

Why don’t these people kick the tires?
They take a press release from the Federal Reserve and they think it was written by God.
Video courtesy The Daily Sheeple:
Take the hint coming from today’s market reaction. Something is VERY wrong with our economic, financial and monetary systems.
Chances are, the minute they pull back these markets are going to collapse. There are those, like the billionaires who have been selling off millions of shares of bank and retail stocks as of late, who know what’s coming.
There’s a reason that the Japanese, Europeans and Americans are implementing “bail in” rules that will force financial losses on depositors just like you.
Ben Bernanke may think he can slowly reduce quantitative easing. But, as billionaire financier George Soros noted in his book The Crash of 2008 and What it Means, the infusion of these massive amounts of capital may work for a while. Eventually, however, it must be pulled back or you’re going to end up with runaway inflation.
The problem, as Soros highlights, is that no one really knows what pulling back will actually do or if it is even possible.
This afternoon we got a very small dose of what to expect should the Fed pull back on the monthly billion dollar bailouts.
It’s a Catch 22 – and there really is no way out of it.
Keep printing, and we end up with hyperinflation.
Stop printing, and the whole system implodes in on itself.
We have two options, and both lead to complete and utter disaster.
The end result will be the same for the average person on the ground.
This article originally appeared on: SHTF Plan

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

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

U.S. Sen. Charles Schumer (D-NY) (L) talks with one of his staff members during a markup session for the immigration reform legislation now before the Senate Judiciary Committee in the Hart Senate Office Building on Capitol Hill May 20, 2013 in Washington, DC.
WASHINGTON, DC – MAY 20: U.S. Sen. Charles Schumer (D-NY) (L) talks with one of his staff members during a markup session for the immigration reform legislation now before the Senate Judiciary Committee in the Hart Senate Office Building on Capitol Hill May 20, 2013 in Washington, DC. The Judiciary Committee is hoping to wrap up work on the landmark immigration reform bill this week after wading through the 300 amendments that were filed to the bipartisan bill. (Photo by Chip Somodevilla/Getty Images)
by Avalon
Intellihub.com
June 19, 2013
Contact your U.S. Representatives and U.S. Senators to take action and voice your opinion on this critical issue.
With the decline in employment, rather than implement ways to increase growth in the economy, the Obama administration is doing just the opposite. It is clear to so many people now that Obama was selected by the Elite to bring about the destruction of the United States. No decision he has made has had a single positive impact to our country – not one.
Now, the Obama administration is poised to roll in the Trojan Horse into the U.S. Economy and the timing couldn’t be better. With virtually 20% unemployment and 45 million people on Food Assistance, it’s time to bring another 30 million workers into the Jobs Market.
The current Immigration legislation would, in effect, legalize 30 million non–legal workers who will displace current workers in a failing economy. People are barely able to make ends meet in most cases and the additional burden of supporting these 30 million workers, some of which may find employment, with Financial Assistance of some kind will bankrupt most states. The individual states are failing and many are bankrupt, according to a ZeroHedge article 32 States Now Officially Bankrupt: $37.8 Billion Borrowed From Treasury To Fund Unemployment; CA, MI, NY Worst, the situation is an emergency. Quoting from the Zerohedge.com article:
Courtesy of Economic Policy Journal we now know that the majority of American states are currently insolvent, and that the US Treasury has been conducting a shadow bailout of at least 32 US states. Over 60% of Americans receiving state unemployment benefits are getting these directly from the US government, as 32 states have now borrowed $37.8 billion from Uncle Sam to fund unemployment insurance. The states in most dire condition, are, not unexpectedly, the unholy trifecta of California ($6.9 billion borrowed), Michigan ($3.9 billion), and New York ($3.2 billion).
Forget what the Mainstream Corporate Media is propagandizing – they are controlled by the Banking Sector who stands to gain from this influx of immigrants, cheap labor and indentured servants. The Zerohedge.com article was posted by Tyler Durden on 05/21/2010 and these facts are being totally ignored.
According to Governing.com data:
Many local governments across the U.S. face steep budget deficits as they struggle to pay off debts accumulated over a number of years. As a last resort, some have filed for bankruptcy.
Governing is tracking the issue, and will update this page as more municipalities seek bankruptcy protection.
Overall, bankrupt municipalities remain extremely rare. A Governing analysis estimated only one of every 1,668 eligible general-purpose local governments (0.06 percent) filed for bankruptcy protection over the past five years. Excluding filings later dismissed, only one of every 2,710 eligible localities filed since 2008.
Most recently, the Hardeman County Hospital District in Quanah, Texas, announced it was seeking bankruptcy protection in March. The majority of Chapter 9 bankruptcy filings have been submitted by utility authorities and other narrowly-defined special districts. In Omaha, Neb., nine Sanitary and Improvement Districts filed for bankruptcy in recent years.
It’s also important to note that only about half of states outline laws authorizing municipal bankruptcy. View our bankruptcy laws map for each state’s policies.
The article, Rand Paul Makes Immigration Move, by Alexander Bolton (06/18/13 05:00 AM ET) describes the political situation in detail, highlighting important practical measures that exert control over immigration and citizenship. Quoting from TheHill.com article:
Paul’s most ambitious proposal would eliminate the pathway to citizenship for 11 million illegal immigrants and lift the caps on guest workers. 
It would provide immigrant workers to employers who can demonstrate need, but immigrants would have to apply for legal permanent residency and citizenship through the existing lines of their native countries. 
Paul is expected to file that amendment this week.
Another measure, Paul’s “Trust but Verify” amendment, would give Congress — and not Homeland Security Secretary Janet Napolitano — ultimate authority on deciding when the southern border is secure. 
Under this plan, immigration reform would not proceed until Congress votes on whether several criteria have been met.
These objectives would include the completion of a comprehensive system to track visa entries and exits at all points of entry — not just air and sea ports as mandated by the broader bill — and law enforcement achieving a 95 percent apprehension rate of illegal entrants. 
Interestingly, The Heritage Foundation’s study 2013 Index of Economic Freedom, states that Mexico’s economy is expected to do better in coming years as explained and graphed at the site (pdf).
Mexico’s economic freedom score is 67.0, making its economy the 50th freest in the 2013 Index. Its score is 1.7 points better than last year, reflecting notable improvements in investment freedom, trade freedom, and monetary freedom. Mexico is ranked 3rd out of three countries in the North America region, but its score is well above the world average.
The Mexican economy has shown a moderate degree of resilience in the face of a challenging global economic environment. Reform efforts have continued in many areas related to economic freedom. Implementation of policies intended to support open markets and encourage a vibrant private sector has enhanced investment flows and the vitality of entrepreneurship, although growth remains sluggish. The 2012 labor reform bill, which aimed to increase labor market flexibility, was weakened by amendments to protect the country’s powerful unions. Source: 2013 Index of Economic Freedom: Mexico
Even OneIndia.in News of India, in an article titled, OECD: Mexico’s economy to grow at faster clip in 2014, reports that Mexico’s economy is on the rebound – despite the Drug Cartel & Banking Cartel Money Laundering and destruction of security and stability in the region.
Proving there’s been an Obama administration policy of pro illegal immigration is the resignation of Immigration and Customs Enforcement Director John Morton as reported in the USA TODAY article Obama’s immigration enforcement director to resign by Alan Gomez posted June 17, 2:42 p.m.  The interesting thing to note here is John Morton is going to work for Capitol One, known for credit financing – coincidence?
He will be moving to Capital One, the Fortune 500 financial services company, and be based in its McLean, Va., headquarters as head of the company’s compliance office, the company said in a statement.
[…]
Morton may best be remembered for a policy plan he authored in 2011 — known in immigration circles as the “Morton Memo” — which outlined a new strategy for determining whom the agency should deport.
In the memo, Morton explained that ICE has a limited amount of money and resources it can dedicate to deporting any of the 11 million unauthorized immigrants living in the country. So he ordered his agents to use “prosecutorial discretion” to focus deportation proceedings on certain groups of unauthorized immigrants, including those who pose a national security threat, who have extensive criminal backgrounds and recent border-crossers.
That strategy was dubbed “amnesty by any means” by the Center for Immigration Studies, a group that advocates for lower levels of immigration, and had already earned him a vote of “no confidence” from the National ICE Council, the biggest labor union for ICE employees.
“He was the architect of the administration’s non-enforcement policy,” said Ira Mehlman of the Federation for American Immigration Reform. “He was toeing the administration’s line rather than allowing them to do the jobs they were sworn to do.”
Attempting to inject sanity into the Immigration Debate is Senator Jeff Sessions, who posted this video on the SenatorSessions YouTube channel on June 18, 2013 titled Sessions On Immigration Bill: Doesn’t Congress Owe Its Allegiance To U.S. Workers?
 
Sessions On Immigration Bill: Doesn’t Congress Owe Its Allegiance To U.S. Workers?
http://www.youtube.com/user/SenatorSessions
Published on Jun 18, 2013
26 views on June 19, 2013 at 8:00 AM EST
Sessions, Jeff - (R–AL)
Reforming America’s Broken Immigration System
To HIGHLIGHT the corrupt politics at work, it’s interesting to read closely the New York Times article Immigration Law Changes Seen Cutting Billions From Deficit posted by Ashley Parker on June 18, 2013.
The report estimates that in the first decade after the immigration bill is carried out, the net effect of adding millions of additional taxpayers would decrease the federal budget deficit by $197 billion. Over the next decade, the report found, the deficit reduction would be even greater — an estimated $700 billion, from 2024 to 2033. The deficit reduction figures for the first decade do not take into account $22 billion in the discretionary spending required to implement the bill, however, making the savings slightly lower.
The report was immediately seized on by backers of the bill as a significant boost to its prospects. Senator Charles E. Schumer, Democrat of New York, one of the bill’s authors, said the report “debunks the idea that immigration reform is anything other than a boon to our economy.”
The budget office also found that in the next decade the legislation would lead to a net increase of about 10.4 million permanent legal residents and 1.6 million temporary workers and their dependents, as well as a decrease of about 1.6 million unauthorized residents.
Conservatives had expected that an analysis of the second decade — when immigrants would begin to qualify for federal benefits — would bolster their argument that the costs of an immigration overhaul were unwieldy, but that turned out not to be the case in the economic analysis.
Senator Jeff Sessions, Republican of Alabama, a leading opponent of the bill, said that its authors used “scoring gimmicks” in order to conceal the “true cost from taxpayers.” “As a result, the score effectively conceals some of the biggest long-term costs to taxpayers contained in this legislation, including providing illegal immigrants with Medicaid, food stamps and cash welfare,” Mr. Sessions said.
Disclaimer:
The views expressed in Intellihub.com articles are the sole responsibility of the author(s) and do not necessarily reflect those of the Intellihub.com. Intellihub.com will not be held responsible or liable for any inaccurate or incorrect statements contained in Intellihub.com articles. Intellihub.com reserves the right to remove articles from the website. Posted 06–19–2013 at 10:10 AM EST
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How EU austerity is falling foul of the law



German magistrates, who questioned and later approved the rescue of Greece in 2011, have this month started to review the constitutionality of the bond-buying programme of the European Central Bank (ECB) at the request of over 35,000 citizens. They allege that it is an instrument to provide struggling countries with easy money from German pockets.
According to many experts, this policy helped Spain and Italy avert disastrous defaults by preventing bonds’ interest rates from escalating to unaffordable levels, which was what was happening until the ECB president Mario Draghi threatened to do “whatever it takes” to protect the euro in July and subsequently launched the bond-buying programme in September.
While some Germans feel that EU bodies are betraying their own principles by failing to implement badly needed austerity in the eurozone, Spaniards, Portuguese, Romanians and Latvians have asked their highest courts to repeal part of the budget cuts and reforms imposed by Brussels with German support.
In April, the Portuguese Constitutional Court struck down part of €5.3 billion in public-sector pay, pensions and benefits cuts which the country’s prime minister, Pedro Passos Coelho, had previously agreed with the EU Commission, the ECB and the International Monetary Fund in exchange for a €78-billion bailout. The judges overruled the elimination of one of two extra “bonus” months paid to pensioners because, they said, it flouted the equal treatment of private workers and pensioners warranted by the constitution.
Romanian and Latvian tribunals also shielded their retirees in 2010 from the IMF and EU austerity measures by deeming unconstitutional a plan to slash pensions by 15 percent in the case of Romania and by up to 70 percent in the case of Latvia. This month, Brussels has pressed Spain to restructure its pensions’ system in 2013 by both raising retirement age and trimming benefits.
Also this year, Spain’s Constitutional Court will determine the legality of a civil servants’ bonus cut just months after the country’s Supreme Court ruled against the first mass layoff it handled under the new labour regulation. Labour market reform and spending reductions were critical for Spain to accede to an EU-funded credit line of €100 billion that may have prevented the financial system from collapsing.
The merits and constitutionality of the Greek rescue in 2010 have also prompted second thoughts. Giorgos Kasimatis, a leading constitutional scholar from Greece, has consistently rejected its legality, while the International Monetary Fund has admitted this month grave mistakes in its management, such as overblown growth assumptions and a belated debt restructuring in the country’s bailout.
The highest courts opposed to deep cuts are winning the day as the European bodies, the IMF and the German government show less resistance to pro-growth policies. Last week, the German Finance Minister Wolfgang Schäuble tried to sway his country’s Constitutional Tribunal by underscoring that the ECB bond-buying programme had never financed cash-strapped countries. In April, Christine Lagarde asked the British government to soften its cuts in the face of weak economic figures after years of backing its austerity.
Even European Commission president José Manuel Barroso has acknowledged that budget trimming “has reached its limits” because “a policy, to be successful, not only has to be properly designed, it has to have the minimum of political and social support.”
According to many experts, this policy helped Spain and Italy avert disastrous defaults by preventing bonds’ interest rates from escalating to unaffordable levels, which was what was happening until the ECB president Mario Draghi threatened to do “whatever it takes” to protect the euro in July and subsequently launched the bond-buying programme in September.
While some Germans feel that EU bodies are betraying their own principles by failing to implement badly needed austerity in the eurozone, Spaniards, Portuguese, Romanians and Latvians have asked their highest courts to repeal part of the budget cuts and reforms imposed by Brussels with German support.
In April, the Portuguese Constitutional Court struck down part of €5.3 billion in public-sector pay, pensions and benefits cuts which the country’s prime minister, Pedro Passos Coelho, had previously agreed with the EU Commission, the ECB and the International Monetary Fund in exchange for a €78-billion bailout. The judges overruled the elimination of one of two extra “bonus” months paid to pensioners because, they said, it flouted the equal treatment of private workers and pensioners warranted by the constitution.
Romanian and Latvian tribunals also shielded their retirees in 2010 from the IMF and EU austerity measures by deeming unconstitutional a plan to slash pensions by 15 percent in the case of Romania and by up to 70 percent in the case of Latvia. This month, Brussels has pressed Spain to restructure its pensions’ system in 2013 by both raising retirement age and trimming benefits.
Also this year, Spain’s Constitutional Court will determine the legality of a civil servants’ bonus cut just months after the country’s Supreme Court ruled against the first mass layoff it handled under the new labour regulation. Labour market reform and spending reductions were critical for Spain to accede to an EU-funded credit line of €100 billion that may have prevented the financial system from collapsing.
The merits and constitutionality of the Greek rescue in 2010 have also prompted second thoughts. Giorgos Kasimatis, a leading constitutional scholar from Greece, has consistently rejected its legality, while the International Monetary Fund has admitted this month grave mistakes in its management, such as overblown growth assumptions and a belated debt restructuring in the country’s bailout.
The highest courts opposed to deep cuts are winning the day as the European bodies, the IMF and the German government show less resistance to pro-growth policies. Last week, the German Finance Minister Wolfgang Schäuble tried to sway his country’s Constitutional Tribunal by underscoring that the ECB bond-buying programme had never financed cash-strapped countries. In April, Christine Lagarde asked the British government to soften its cuts in the face of weak economic figures after years of backing its austerity.
Even European Commission president José Manuel Barroso has acknowledged that budget trimming “has reached its limits” because “a policy, to be successful, not only has to be properly designed, it has to have the minimum of political and social support.”
- See more at: http://iberosphere.com/2013/06/how-eu-austerity-is-falling-foul-of-the-law/8794#sthash.6Ladmbcv.dpuf

Ron Paul: Dollar Will Collapse, Gold Will “Go To Infinity” Former congressman says that precious metals will literally become priceless













Steve Watson
Infowars.com
June 19, 2013
Appearing on CNBC yesterday, former Congressman Ron Paul warned that if the US continues on its current course, the dollar will collapse, and gold will literally be priceless.
“Eventually, if we’re not carefully, it will go to infinity, because the dollar will collapse totally,” Paul said on CNBC.com’s Futures Now.
“As long as we have excessive spending, and excessive computerized money, we are going to see gold go up,” Paul urged, noting that as the value of the dollar is destroyed, everything measured against dollars will increase in value.
Paul added that recent drops in gold prices do not factor into the long term outlook.
“Markets do these types of things—they go up sharply, and sometimes they take a rest,” Paul said. “I was never very good on short term, whether it’s the stock market, or whatever.”
“If you look at the record of the value of the dollar since the Fed’s been in existence, we have about a 2-cent dollar. And gold used to be $20 an ounce. So I’d say the record is rather clear on the side of commodity money.” Paul said.
“Six thousand years of history shows that gold always retains value,” Paul added, “and paper always self-destructs.”
Paul will appear on the Alex Jones show today to further discuss this issue.
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Federal Reserve Won't Change Interest Rates, Will Maintain Bond Buying

PHOTO: Federal Reserve Chairman Ben Bernanke speaks during a news conference in Washington, June 19, 2013.
Federal Reserve Chairman Ben Bernanke speaks during a news conference in Washington, June 19, 2013. (Susan Walsh/AP Photo)
Federal Reserve Chairman Ben Bernanke said that the Fed may begin to pull back its stimulus if the economy continues to improve through the end of the year, adding that the unemployment rate will likely be 7 percent when the Fed begins to drawdown its stimulus.
The Federal Reserve won't be making an immediate changes to its $85 billion a month bond purchasing stimulus program, but if the agency's expectations hold true there could be a change in policy announced as early as this fall.
The Fed, which has injected trillions of dollars into the slowly recovering American economy, made an announcement on its intentions in three parts on Wednesday. This is the Fed's most closely watched announcement since a third round of its bond purchasing program, or "quantitative easing" in September last year.
During a press conference on Thursday afternoon, Bernanke said the Federal Reserve may end its bond purchases in mid-2014 if its economic forecasts are correct.
The Federal Reserve said in its statement today that economic activity has been "expanding at a moderate pace" since its monetary policy-making group, the Federal Open Market Committee, met in May.
Stock investors are worried that an end to the stimulus program will mean a swoon in equity prices. Bond investors fear that higher interest rates will depress the value of their holdings. When interest rates go up, the value of bonds declines.
The agency lowered its unemployment forecasts for this year to 7.25 percent, slightly better than its previous projection of up to 7.5 percent. Its forecast for the unemployment rate next year is 6.65 percent.
The Labor Department reported earlier this month that the unemployment rate for May rose to 7.6 percent with the addition of 175,000 jobs.
After its two-day meeting, the committee decided to keep the target rate for the federal funds rate at zero to 1/4 percent. Between the next year or two years, inflation is projected to be more than a half percentage point above the committee's two percent long-term goal, the Fed said.
Bernanke held a press conference expanding upon the Federal Reserve's statement and economic outlook. But he didn't reveal anything about when he might step down as Federal Reserve chairman when a reporter asked about his future.
"I don't have anything for you on my personal plans," Bernanke said at the press conference.
He is widely expected to leave his post at the end of his term later this year. President Obama essentially confirmed this departure in an interview with PBS' Charlie Rose earlier this week.
Appointed by President George W. Bush, Bernanke became chairman of the Federal Reserve in Feb. 2006 and began his second term in Feb. 2010 after he was re-appointed by President Obama. Bernanke's second term as chairman ends Jan. 31, 2014 and his term as a board member ends on Jan. 31, 2020.
The Federal Open Market Committee consists of twelve people, consisting of members of the Board of Governors of the Federal Reserve System and Reserve Bank presidents.
The Fed's actions greatly impact the U.S. economy for investors, business owners, consumers and homeowners. Interest rates on loans, stock and bond markets, all react to Fed policy.
"The last thing the Fed wants to do is cause rates to move quickly enough to choke off recovery," says Gus Faucher, senior economist with PNC financial.

First Congress Member Allowed to Read Secret Treaty Says “There Is No National Security Purpose In Keeping This Text Secret … This Agreement Hands The Sovereignty of Our Country Over to Corporate Interests”

Corporations Push to Overrule National Laws

We reported last year:
Democratic Senator Wyden – the head of the committee which is supposed to oversee it – is so furious about the lack of access that he has introduced legislation to force disclosure.
Republican House Oversight Committee Chairman Darrell Issa is so upset by it that he has leaked a document on his website to show what’s going on.
What is everyone so furious about?
An international treaty being negotiated in secret which would not only crack down on Internet privacy much more than SOPA or ACTA, but would actually destroy the sovereignty of the U.S. and all other signatories.
It is called the Trans-Pacific Partnership (TPP).
Wyden is the chairman of the trade committee in the Senate … the committee which is supposed to have jurisdiction over the TPP. Wyden is also on the Senate Intelligence Committee, and so he and his staff have high security clearances and are normally able to look at classified documents.
And yet Wyden and his staff have been denied access to the TPP’s text.
Indeed, the decision to keep the text of TPP secret was itself classified as secret:


(I have also received a tip from a credible inside source that TPP contains provisions which would severely harm America’s national security. Specifically, like some previous, ill-conceived treaties, TPP would allow foreign companies to buy sensitive American assets which could subject us to terror attacks or economic blackmail.)
Yesterday, Congressman Alan Grayson (who knows how to read legislation … he was a successful lawyer before he was elected to Congress, and has written and co-sponsored numerous bills himself including the bill to audit the Federal Reserve and – most recently – the “Mind Your Own Business Act” to stop NSA spying) announced that he had been allowed to read the text of TPP – and that it is  an anti-American power grab by big corporations:
Last month, 10,000 of us submitted comments to the United States Trade Representative (USTR), in which we objected to new so-called free trade agreements. We asked that the government not sell out our democracy to corporate interests.
Because of this pressure, the USTR  finally let a member of Congress – little ole me, Alan Grayson [anyone who's seen Grayson in action knows that he is formidable] – actually see the text of the Trans-Pacific Partnership (TPP). The TPP is a large, secret trade agreement that is being negotiated with many countries in East Asia and South America.
The TPP is nicknamed “NAFTA on steroids.”  Now that I’ve read it, I can see why. I can’t tell you what’s in the agreement, because the U.S. Trade Representative calls it classified. But I can tell you two things about it.
1)    There is no national security purpose in keeping this text secret.
2)    This agreement hands the sovereignty of our country over to corporate interests.
3)    What they can’t afford to tell the American public is that [the rest of this sentence is classified].
***
I will be fighting this agreement with everything I’ve got. And I know you’ll be there every step of the way.
***
Courage,
Congressman Alan Grayson
Grayson also noted:
It is ironic in a way that the government thinks it’s alright to have a record of every single call that an American makes, but not alright for an American citizen to know what sovereign powers the government is negotiating away.
***
Having seen what I’ve seen, I would characterize this as a gross abrogation of American sovereignty. And I would further characterize it as a punch in the face to the middle class of America. I think that’s fair to say from what I’ve seen so far. But I’m not allowed to tell you why!
Remember that one of the best definitions of fascism – the one used by Mussolini – is the “merger of state and corporate power”. Our nation has been moving in that direction for a number of years, where government and giant corporations are becoming more and more intertwined in a malignant, symbiotic relationship.   TPP would be the nail in the coffin for free market economics and democracy.
Note to progressives who support public banking: This is a key battle.
Note to those who oppose to what they call “one world government” or a “new world order”: This is the big fight.

Reckless British bankers could face jail: commission

By Agence France-Presse
Wednesday, June 19, 2013 4:51 EDT
banker pig in suit counts his wealth via Shutterstock
 
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Bankers found guilty of reckless misconduct in Britain could end up in prison and be stripped of bonuses, under draconian proposals to clean up the City of London published on Wednesday.
The radical penalties were put forward by an official commission which said that a string of scandals in British finance had caused an “enormously damaging” loss of trust.
The Parliamentary Commission on Banking Standards, created by the government after the Libor rate-rigging scandal which had global repercussions last year, made the recommendations in a final report amounting to a blunt indictment of malpractice.
“The loss of trust in banking has been enormously damaging; there is now a massive opportunity to reform banking standards to strengthen the value of banking in the future and to reinforce the UK’s dominant position within the global financial services industry,” the report read.
The commission recommended that the state-rescued Royal Bank of Scotland should be split into a so-called good bank and a bad bank, and criticised the government for “political interference” in both RBS and fellow bailed-out lender Lloyds Banking Group.
The review was published ahead of finance minister George Osborne’s annual Mansion House speech to business leaders, in which he is expected to address the government’s privatisation plans for RBS and Lloyds.
The commission also concluded that senior bankers must be made personally responsible for malpractice — with a new criminal offence of reckless misconduct carrying a prison sentence.
Under the proposals, more remuneration would be deferred for longer periods of up to 10 years, in order to “reflect the longer run balance between business risks and rewards”.
Regulators would be granted new powers to cancel all outstanding deferred remuneration.
Bankers would be licensed and sign up to a new code of conduct, under which all key responsibilities would be assigned to specific senior officials who would be held accountable.
“Recent scandals, not least the fixing of the Libor rate that prompted parliament to establish this Commission, have exposed shocking and widespread malpractice,” said Commission chairman and Conservative lawmaker Andrew Tyrie.
“Taxpayers and customers have lost out. The economy has suffered. The reputation of the financial sector has been gravely damaged. Trust in banking has fallen to a new low.
“Prudential and conduct failings have many shared causes but there is no single solution that can restore trust in the industry. The final report contains a package of recommendations that, together, change banking for good.”
The reputation of Britain’s banking sector has been damaged in recent years by a string of scandals, including Libor rate-rigging, credit insurance mis-selling, and ongoing controversy over staff behaviour in the run-up to the 2008 global financial crisis.
The Treasury welcomed the review, describing it as an “impressive piece of work”, and added that it would help the government “create a stronger and safer banking system”.
Tyrie added in the report: “Under our recommendations, senior bankers who seriously damage their banks or put taxpayers’ money at risk can expect to be fined, banned from the industry, or, in the worst cases, go to jail. That has not been the case up to now.”
The Commission was formed last year after revelations that Barclays bank tried to manipulate the Libor rate, which is used as a benchmark for global financial contracts worth about $300 trillion.
Libor is calculated daily, using estimates from banks of their own interbank rates. However, the system has been found to be open to abuse, with some traders lying about borrowing costs to boost trading positions or make their bank seem more secure.

Peter Schiff: Too Big To Fail Banks Will Fail Again


The Market Is Falling More: Dow Off 205! Treasuries Getting Slammed On Heavy Volume, 10-Year Bond Yield Shoots Up To 2.34%!!

The Market Is Falling More, And Interest Rates Are Really Starting To Shoot Higher
It’s not a huge move, but the market is falling during the Ben Bernanke press conference.
In the immediate aftermath of the Fed statement (@ 2 PM) markets fell modestly.
Now the Dow is down 138, and interest rates are spiking. Yield on the 10-year bond has hit 2.33% (!), which is the highest level since early 2012.
Read more: http://www.businessinsider.com/the-market-is-falling-after-fed-statement-2013-6#ixzz2Wh06zTzT
*BERNANKE: FOMC MAY `MODERATE’ PACE OF PURCHASES LATER IN 2013
*BERNANKE SAYS FED MAY END PURCHASES AROUND MID-YEAR 2014
*BERNANKE SAYS FED WILL EASE QE PACE IF ECONOMY IMPROVES
*BERNANKE SAYS PURCHASE REDUCTION REPRESENTS FOMC CONSENSUS

Bernanke Speaks, The Stock Market Squeaks, The 5 Year Shrieks
Things are escalating quickly… with US Treasuries beginning to look a lot like JGBs: the 5Y soared +18bps to the highest since August 2011, the 10Y +13.5bps touches 2.32% widest since March 2012, 30Y +8bps, and credit markets are getting monkey-hammered. There is no joy in Newport Beachville.
5Y the worst!!


http://www.zerohedge.com/node/475440
U.S. 10yr
2.34+0.156.94%
Dow
15,112-2061.35%
STOCKS CRUMBLE AND RATES SURGE AFTER BERNANKE SPEAKS: Here’s What You Need To Know
First, the scoreboard:
  • Dow: 15,112.6 -205.5 -1.3%
  • S&P 500: 1,628.9 -22.9 -1.3%
  • NASDAQ: 3,443.2 -38.9 -1.1%
Nikkei could be very interesting tonight….

Bernanke Spells “Recovery” F-A-I-L-U-R-E

by Phoenix Capital Research


We’re now five years into the worst recovery in the post-WWII period.

Based simply on historical business cycles, we should already be out of recovery and into a “growth” stage for the US economy. This should have happened even with barely any stimulus from the Fed.

Instead, the Fed has spent TRILLIONS of Dollars and failed to deliver anything resembling economic growth. The number of people who are of working age who are actually working has barely budged since the 2009 low.



In plain terms, this chart shows us point blank that all the talk of “unemployment falling” is total BS. The Feds simply alter their methodology to make the employment picture look better, but that doesn’t change the fact that jobs have not and are not coming back in any meaningful way.

During this period, we had QE 1, QE 2, Operation Twist 2, QE 3 and QE 4. Where in the above chart do you see any real improvement in jobs as a result of these efforts? What data is the Fed looking at when it talks about “recovery” (other than the stock market and housing market which are once again bubbles)?

It’s not as though stocks rallying so high is a great thing either. The S&P 500’s CAPE predicts at best a 4% annual return for stock investors over the next 20 years.

If you’re unfamiliar with CAPE it is the cyclically adjusted price-to-earnings ratio.

In simple terms CAPE measures the price of stocks against the average of ten years’ worth of earnings, adjusted for inflation.

The reason you use the average earnings over 10 years is due to the business cycle. Typically the US experiences a boom and bust once every ten years or so.

By using the average earnings over a ten-year period, you smooth out your earnings data to account for both booms and busts. As a result you get a much clearer measure of a business’s profits, which is the best means of valuing that business’s worth.

CAPE is better at predicting stock market returns than P/E, Government Debt/ GDP, Dividend yield, Fed Model, and many other metrics commonly used by analysts (most of which really predict much of anything).

This is not to say that stocks can’t go even higher than they are today. Bubbles, such as the one we’re experiencing today, can often last longer than anyone expects.

However, based on over 100 years’ worth of data, anyone who is looking to invest for the long term by buying the market today can expect, at best, a 4% real return per year over the next 20 years (this includes both dividends and capital appreciation after inflation).

Today the S&P 500 has a CAPE of over 22. This means the market as a whole is trading at 22 times its average earnings of the last ten years. It’s also definitively in bubble territory.

Folks, QE does nothing but create stock bubbles. Nothing at all. The US economy isn’t in “recovery” which is extraordinary because historically even if the Fed had done NOTHING we’d already be in recovery. The fact that the Fed has spent TRILLIONS of dollars and is still talking about a weak recovery only shows that the Fed doesn’t actually have the tools (or know how) the improve the economy… or jobs.

We all know how bubbles end, with a bang. This one will be no different from the last three.

On that note, we’ve just released a FREE Special Report outlining how to protect your portfolio during times of a market collapse. It outlines the best stocks to own during a crisis as well as how to take out “insurance” on your portfolio.

To pick up a copy swing by: http://gainspainscapital.com/protect-your-portfolio/

Best Regards

Graham Summers

Ron Paul: Dollar Will Collapse, Gold Will “Go To Infinity”

Former congressman says that precious metals will literally become priceless

Steve Watson
Infowars.com
June 19, 2013
Appearing on CNBC yesterday, former Congressman Ron Paul warned that if the US continues on its current course, the dollar will collapse, and gold will literally be priceless.
“Eventually, if we’re not carefully, it will go to infinity, because the dollar will collapse totally,” Paul said on CNBC.com’s Futures Now.
“As long as we have excessive spending, and excessive computerized money, we are going to see gold go up,” Paul urged, noting that as the value of the dollar is destroyed, everything measured against dollars will increase in value.
Paul added that recent drops in gold prices do not factor into the long term outlook.
“Markets do these types of things—they go up sharply, and sometimes they take a rest,” Paul said. “I was never very good on short term, whether it’s the stock market, or whatever.”
“If you look at the record of the value of the dollar since the Fed’s been in existence, we have about a 2-cent dollar. And gold used to be $20 an ounce. So I’d say the record is rather clear on the side of commodity money.” Paul said.
“Six thousand years of history shows that gold always retains value,” Paul added, “and paper always self-destructs.”
—————————————————————-
Steve Watson is the London based writer and editor for Alex Jones’ Infowars.com, and Prisonplanet.com. He has a Masters Degree in International Relations from the School of Politics at The University of Nottingham, and a Bachelor Of Arts Degree in Literature and Creative Writing from Nottingham Trent University.

Brazilians spend as much as 26% of their income to ride the bus

A $0.09 hike in the price of a single bus fare in Sao Paulo ignited the biggest protests to hit Brazil in over 20 years. As we noted earlier today, the bus fare hike was merely the last straw in a long list of public grievances about the shaky Brazilian economy.
But it’s worth noting that Sao Paulo’s bus riders are being majorly squeezed by fares. A fare price that sounds pretty minuscule in dollar terms actually takes up a huge chunk of Brazilian incomes for those at the bottom (and presumably, those who most need to use the bus).
The $0.09 hike brought the price of a single bus fare in Sao Paulo up to $1.47. Assuming Brazil’s city dwellers ride the bus twice daily—to and from work during the week, and to and from anywhere during the weekend—that’s $82.46 a month. For Brazilians making the minimum wage of $312.33 a month, that’s a whopping 26% of their income.
In Brazil’s lopsided economy, public funds are propping up a public transportation system that the public can’t afford.

Beware BitCoin Users: The Tax Man Cometh!

Beware you barrons of BitCoin – you World of Warcraft one-percenters: the long arm of the Internal Revenue Service may soon be reaching into your treasure hoard to extract Uncle Sam’s fair share of your virtual treasure.
Warcraft Gold
Services for buying and exchanging virtual currencies and goods abound online. GAO found that many are likely taxable under current U.S. tax law.
That’s the conclusion of a new Government Accountability Office (GAO) report on virtual economies, which found that many types of transactions in virtual economies – including bitcoin mining and virtual currency transactions that result in real-world profit – are likely taxable under current U.S. law, but that the IRS does a poor job of tracking such business activity and informing buyers and sellers of their duty to pay taxes on virtual earnings.
The report, “Virtual Economies and Currencies: Additional IRS Guidance Could Reduce Tax Compliance Risks” (GAO-13-516) was released this week. It was prepared in response to a request from the U.S. Senate Committee on Finance, which asked GAO to look into virtual currencies and the IRS’s approach to addressing their tax implications. The GAO said that the IRS’s tax treatment of virtual currency transactions is lax, and that the growing use of virtual currencies like BitCoin and virtual game currencies warrants the U.S.’s tax collection agency to mitigate the risks. Those include efforts to educate taxpayers and the publication of basic tax reporting requirements for transactions using virtual currencies. 
Virtual currencies have gained favor in recent years, as the sophistication and complexity of virtual economies have grown. In-game currencies for virtual environments like Second Life (Linden Dollars), The Sims (Simoleons) and World of Warcraft (WoW Gold) have sprung up as a way for players to buy and sell virtual goods. While the currency is often earned in exchange for in-game activity and labor, many virtual currencies can also be purchased with real-world currency through in-game or third party exchanges. The exchanges have attracted the attention of law enforcement, who recently cracked down on Liberty Reserve, a Costa Rica-based virtual currency firm popular among cyber criminal groups.
GAO said that strict virtual (or “closed flow”) transactions in which virtual currency is used only within a game or virtual environment to purchase virtual goods and services were not taxable. However, so called “hybrid” and “open flow” virtual currency systems, in which real world currency is used to buy virtual currency, which is then used to buy or sell virtual- or real world goods and services are subject to U.S. taxes.
Virtual Currencies - GAO
Many types of virtual currency systems generate taxable revenue, GAO said.
Some virtual economies in massively multiplayer online role-playing games (MMORPG) like World of Warcraft are “hybrid” systems in which in-game economic activity can spill into the real world via third-party transactions in which virtual goods are exchanged for real money, GAO said.
Virtual currencies like BitCoin and the Linden Dollars of used-to-be-cool virtual environment Second Life  are examples of open flow systems in which virtual currencies can be used to purchase both real and virtual goods and services, then exchanged for real world currencies like the U.S. dollar.
GAO provides a number of examples of virtual transactions that are subject to taxation that, in all likelihood are not taxed. They include “John,” a resident of Second Life, who rents a virtual property to other residents who pay him in Linden dollars. “At the end of the year, John exchanges his Linden dollars for U.S. dollars and realizes a profit. John may have earned taxable income from his activities in Second Life,” GAO said. 
There is also the example of “Bill” the Bitcoin miner who successfully mines 25 bitcoins. “Bill may have earned taxable income from his mining activities,” GAO said.
BitCoin Taxable
BitCoin mining and exchanges are taxable under most scenarios, GAO said.
The problem with virtual currencies is similar to the challenges the IRS has in capturing other kinds of economic activity, such as cash transactions and barter, where records and third party reporting is lax or non-existent, GAO said. Still, the growing popularity of virtual currencies and exchanges pose unique risks, including lost tax revenue and tax evasion by way of virtual currencies like Bitcoin.
While the extent of the virtual currency problem isn’t known, and in light of the IRS’s sequester-based staffing issues, GAO recommended that IRS take mostly low-cost steps to address it, rather than mounting a large and expansive campaign to crack down. IRS should publish clear guidance of what kinds of online transactions are taxable and clarify third party reporting requirements to counter misinformation that is circulating. However, as the extent of virtual currencies and economies grow, IRS may find it needs to take bolder steps to bring virtual economic activity into line with other kinds of transactions, GAO said.

As Federal Reserve Meets, Americans Should Get Prepare For Higher Interest Rates On Credit Cards, Loans, Larger Monthly Payments On Home Purchases And CUT SPENDING!!

ALERT: Peter Morici: As Federal Reserve meets, Americans should consider cutting spending
Wednesday, the Federal Reserve is expected to indicate how quickly it will push up interest rates. Ordinary Americans can expect monthly payments on home purchases to rise, selling houses they already own to get tougher, and interest rates to jump on credit cards and other consumer loans.
Recent retail sales reports indicate the average family is spending freely and not saving very much.This may be a good time to trim back—families may need to borrow in an emergency and higher interest rates will take a bite out of the family budget.
This is a good time to rethink the family budget. If you have credit card debt, pay it down as quickly as you can.
The Fed has been purchasing $85 billion in mortgage-backed securities and longer term Treasury Bonds—economists call this “Quantitative Easing.”
These purchases have fueled, until recently, rock bottom mortgage rates and a much heralded surge in housing prices. The latter could well prove unsustainable, because Wall Street speculators have been doing a lot of the home buying, even as the demand for home ownership is the United States is actually waning.
More Americans are choosing to rent that’s because many young families, saddled with huge student debt and earning less than their parents, can’t consider purchasing a piece of suburb heaven.
The Zillow Survey of 105 economic forecasters, in which I participate, has the surge in housing prices slowing significantly in 2014 and 2015. This deceleration could turn into a housing market collapse if the Fed pulls back on easy money too quickly, and many more homeowners could owe more than their homes are worth.
Car sales and prices have been booming, as Ford, GM and others have offered customers with good credit scores quite reasonable rates on new car loans. Their financial affiliates will face much higher costs for funds, and automakers will have to pass along higher interest rates to customers and trim incentives.
If you genuinely need a new car, this may be the best time to get that good deal. Higher borrowing rates will hit the used car market hard, lowering your trade-in value—along with higher interest rates, that will push up the monthly payment on new vehicles.
So we have to cut spending but the government doesnt? wow, just wow!
For Some Areas, the Fed Taper Already Has Begun
As investors prepare for the Federal Reserve’s slow exit from its extraordinary easing measures, it is emerging markets that are taking perhaps the biggest hit.

Measured against total economic output, capital inflow to developing economies has hit its lowest point in five years.
Analysts attribute the cash flow to anticipation that the Fed liquidity that helped drive a global stock market rally is beginning to dry up. They see money now flowing out of parts of Asia and going into cash, or getting teed up for a Europe rebound.
http://www.cnbc.com/id/100824685
ANALYST: Now That The Cheap Money Is Coming To An End, We Can See The Bubble To End All Bubbles
There’s a Warren Buffett quote that’s something akin to: When the tide goes out, you can see who’s been swimming naked.
That’s the theme of a note this morning from SocGen analyst Kit Juckes, who says that as rates are rising, and tapering talk picks up, it’s beginning to be clear where the unsustainable bubbles have been built up.
No surprise: He says the bubbles were found in emerging markets, which have been crumbling lately.
Meanwhile, the burgeoning economic worries in Brazil have resulted in some extraordinary protests, the largest in 20 years, ostensibly due to an increase in bus fares. Read more: http://www.businessinsider.com/analyst-now-that-the-cheap-money-is-coming-to-an-end-we-can-see-where-the-bubbles-are-2013-6#ixzz2WaUamUTL
Roubini: Fed Faces ‘Treacherous’ Path in Exiting its QE “Exiting too fast will crash the real economy, while exiting too slowly will create a huge bubble and then crash the financial system.”
http://www.moneynews.com/FinanceNews/Roubini-Fed-QE-Bremmer/2013/06/18/id/510516
U.S. Consumers Not Coming Back For Years – Stephen Roach


June 18 (Bloomberg) — Stephen Roach, a senior fellow at Yale University and former non-executive chairman for Morgan Stanley in Asia, talks about Federal Reserve policy, the U.S. economy and the Federal budget. Roach, speaking with Tom Keene, Sara Eisen and Scarlet Fu on Bloomberg Television’s “Surveillance,” also discusses China’s banking system and the global retail market. (Source: Bloomberg)

Author Bob Wiedemer of The Aftershock Investor: Get Out of Stocks & Bonds, Gold Will Go to $6,000+


http://usawatchdog.com/robert-wiedeme… - In his latest book, “The Aftershock Investor,” Bob Wiedemer says to get out of stocks and bonds. He predicts, “Between now and 2014, I think you’re going to fall out of bed. . . . Stock investors could take a very big hit—well over 50%.” Wiedemer calls gold “the once and future king” and goes on to predict “gold will go to $6,000 to $7,000 per ounce.” Join Greg Hunter as he goes One-on-One with author Bob Wiedemer.

'Jail reckless bankers': Failed bosses could also lose right to claim bonuses for up to ten years, says inquiry into financial malpractice

  • New criminal offence to tackle 'shocking and widespread malpractice'
  • No British bankers jailed since financial crash began in 2007

Disgraced: Sir Fred Goodwin, chairman of the Princes Trust Scotland at a charity clay pigeon shoot event near Dundee, 2003
Disgraced: Sir Fred Goodwin, chairman of the Princes Trust Scotland at a charity clay pigeon shoot event near Dundee, 2003
The bosses of failed banks should face jail or lose the right to claim bonuses for up to ten years for 'reckless misconduct', a report recommends today.
The new criminal offence would make sure that top executives paid for their 'shocking and widespread malpractice', the Parliamentary Commission on Banking Standards said.
Not a single British banker has been sent to prison since the financial crash began in 2007, but the proposed legislation would make sure they would be 'on the hook' in future, it added.
As well as prison terms, errant bankers would face heavy fines and bans from the financial services industry, as well as curbs on bonuses and the threat of pensions being cancelled.
Commission chairman Andrew Tyrie MP said: 'Under our recommendations, senior bankers who seriously damage their banks or put taxpayers' money at risk can expect to be fined, banned from the industry, or, in the worst cases, go to jail. That has not been the case up to now.
'This deals with some of the senior people who many feel got off lightly last time and for whose mistakes we are still paying.'
In its 527-page report, the commission found that 'deep lapses in standards have been commonplace'. 'It is not just bankers that need to change. The actions of regulators and governments have contributed to the decline in standards,' said Tory MP Mr Tyrie.
The commission of MPs and peers calls for a sweeping overhaul of top pay, with City regulators given new powers to cancel pension rights and payoffs for the bosses of bailed-out banks.
It also wants watchdogs to be able to force banks to defer bonus payments for up to a decade, in order to prevent bosses reaping large rewards for risky, short-term strategies that subsequently lead to losses.
'The rewards for fleeting, often illusory success have been huge, while the penalties for failure have been much smaller, or non-existent,' Mr Tyrie said.
However, John Cridland, director general of the CBI, said: 'There are tough criminal sanctions in the UK for those who engage in fraudulent behaviour. Enforcing those must come before the introduction of new sanctions.'
The findings of the commission, set up last summer in the wake of the Libor scandal, are not binding, but the Government is being urged to implement its recommendations 'in full'.
 
The proposals will now be handed to ministers. The reforms will aim to prevent a repeat of the bailouts and scandals such as Libor rate-rigging, where bosses have walked away with large payoffs and pensions.
But bankers will not be targeted retrospectively. Fred Goodwin, who left RBS in ruins but is still receiving a pension of £342,000 a year for life, will be unaffected.
Nor will any legislation ensnare former HBOS boss James Crosby, who will collect £406,000 of his £580,000-a-year retirement deal. Under current rules, senior bankers have been able to evade punishment by claiming they were not personally responsible for collapses and that they had not committed deliberate fraud, with the onus  on financial authorities to prove wrongdoing.
The report at a glance
But in the new proposed regime, top managers would be held individually accountable and would have to show they took 'all reasonable steps' to avoid a failure.
'A lack of personal responsibility has been commonplace throughout the industry,' Mr Tyrie added. 'Senior figures have continued to shelter behind an accountability firewall.'
The commission also wants a new licensing system to stop traders involved in setting Libor rates and prevent area managers who oversee the sale of financial products from slipping through the net.
They will have to abide by a new set of conduct rules or lose their licence.
The report also recommends that City watchdogs should be able to force badly-behaved banks to sign a formal agreement to improve their culture and standards.
The commission – whose members include the Archbishop of Canterbury Justin Welby and former Chancellor Lord Lawson – also demands the dismantling of UK Financial Investments (UKFI), the body that is supposed to manage taxpayers' holdings in RBS and Lloyds at arms' length from ministers.
It said the Government, which denies forcing the resignation of RBS boss Stephen Hester, has interfered in the running of the two banks and that UKFI is seen as a 'fig leaf' for 'the reality of direct government control'.
Ministers must also make an immediate commitment to analyse whether RBS should be split up into a 'good bank', that could lend more to small firms and personal customers, and a 'bad bank' to dump its toxic assets, the commission said.
A study of high street lenders by competition watchdogs and an independent panel of experts to look at measures to help bank customers were also part of the recommendations.
Lord Oakeshott, a former LibDem Treasury spokesman, said: 'Why are there no banged-up bankers? That is what most people want to know after the last five years of scandals and shame and moral and financial bankruptcy.'
He added: 'We must stop the subterfuge of UKFI and put the Treasury on the spot to make the banks we own lend.
'RBS, our biggest business bank, has failed the nation that rescued it at £1,500 for every taxpayer. It must be broken up with new management and tough net lending targets for the good bank so small business can grow again.'

Under The New World Order

JPMorgan calls for authoritarian regimes in Europe

In a document released at the end of May, the American banking and investment giant JP Morgan Chase calls for the overturning of the bourgeois democratic constitutions established in a series of European countries after the Second World War and the installation of authoritarian regimes.
The 16-page document was produced by the Europe Economic Research group of JP Morgan and titled “The Euro Area Adjustment—About Half-Way There.” The document begins by noting that the crisis in the euro zone has two dimensions.

First, the paper argues, financial measures are necessary to ensure that major investment houses such as JP Morgan can continue to reap huge profits from their speculative activities in Europe. Second, the authors maintain, it is necessary to impose “political reforms” aimed at suppressing opposition to the massively unpopular austerity measures being carried out at the behest of the banks.
The report expresses satisfaction with the implementation of a number of financial mechanisms by the European Union to secure banking interests. In this respect, the study maintains, reform of the euro area is about halfway there. The report does, however, call for more action by the European Central Bank (ECB).
Since the eruption of the global financial crisis in 2008, the ECB has made trillions of euros available to the banks to enable them to wipe out their bad debts and commence a new round of speculation. In the face of mounting pressure from the financial markets, ECB chief Mario Draghi declared last summer that he would do whatever was necessary to shore up the banks.
This, however, is not sufficient as far as the analysts at JPMorgan are concerned. They demand a “more dramatic response” to the crisis from the ECB.
The harshest criticisms in the document, however, are reserved for national governments that have been much too tardy in implementing the type of authoritarian measures necessary to impose austerity. The process of such “political reform,” the study notes, has “hardly even begun.”
Towards the end of the document, the authors explain what they mean by “political reform.” They write: “In the early days of the crisis it was thought that these national legacy problems were largely economic,” but “it has become apparent that there are deep-seated political problems in the periphery, which, in our view, need to change if EMU (the European Monetary Union) is to function in the long run.”
The paper then details problems in the political systems of the peripheral countries of the European Union—Greece, Spain, Portugal and Italy—that have been at the center of the European debt crisis.
The authors write: “The political systems in the periphery were established in the aftermath of dictatorship, and were defined by that experience. Constitutions tend to show a strong socialist influence, reflecting the political strength that left-wing parties gained after the defeat of fascism.
“Political systems around the periphery typically display several of the following features: weak executives; weak central states relative to regions; constitutional protection of labour rights; consensus-building systems which foster political clientalism; and the right to protest if unwelcome changes are made to the political status quo. The shortcomings of this political legacy have been revealed by the crisis. “ Whatever the historical inaccuracies in their analysis, there can not be the slightest doubt that the authors of the JPMorgan report are arguing for governments to adopt dictatorial-type powers to complete the process of social counterrevolution that is already well underway across Europe.
In reality, there was nothing genuinely socialist about the constitutions established across Europe in the postwar period. Such constitutions were aimed at securing bourgeois rule under conditions where the capitalist system and its political agents had been thoroughly compromised by the crimes of Fascist and dictatorial regimes.
The constitutions of European states, including those of Italy, Spain, Greece and Portugal, were elaborated and implemented in collaboration with the country’s respective Socialist and Communist parties, which played the key role in demobilising the working class and permitting the bourgeoisie to maintain its rule.
At the same time, however, Europe’s discredited ruling classes were well aware that the Russian Revolution remained a political beacon for many workers. They felt compelled to make a series of concessions to the working class to prevent revolution—in the form of precisely the social and constitutional protections, including the right to protest, that JPMorgan would now like to see abolished.
To some extent, the bank’s criticism of European governments for their lack of authoritarianism rings hollow. Across Europe, governments have repeatedly resorted in recent years to police state measures to suppress opposition to their policies.
In France, Spain and Greece, emergency decrees and the military have been used to break strikes. The constitution adopted in Greece in 1975, following the fall of the colonels’ dictatorship, has not prevented the Greek government from sacking public workers en masse. And in a number of European countries, ruling parties are encouraging the growth of neofascist parties such as the Golden Dawn movement in Greece.
For JPMorgan, however, this is not enough. In order to avoid social revolution in the coming period, its analysts warn, it is necessary for capitalist governments across Europe to move as quickly as possible to set up dictatorial forms of rule.
At the end of the document, the authors put forward a series of scenarios that they claim could result from the failure of European governments to erect authoritarian systems. These variants include: “1) the collapse of several reform-minded governments in the European south, 2) a collapse in support for the euro or the EU, 3) an outright electoral victory for radical anti-European parties somewhere in the region, or 4) the effective ungovernability of some Member States once social costs (particularly unemployment) pass a particular level.”
This is the unadulterated voice of finance capital speaking. It should be recalled that JPMorgan is deeply implicated in the speculative operations that have devastated the lives of hundreds of millions of workers around the world. In March of this year, a US Senate committee released a 300-page report documenting the criminal practices and fraud carried out by JPMorgan, the largest bank in the US and the world’s biggest dealer in derivatives. Despite the detailed revelations in the report, no action will be taken against the bank’s CEO, Jamie Dimon, who enjoys the personal confidence of the US president.
The same bank now presumes to lecture governments. Seventy years after the assumption of power by Hitler and the Nazis in Germany, with catastrophic consequences for Europe and the world, JPMorgan is leading the call for authoritarian measures to suppress the working class and wipe out its social gains.