Saturday, June 6, 2009
Thursday, June 4, 2009
Sales for May have been reported as being flat. This goes along with the commercial paper decline to indicate that the economy is certainly not sprouting green shoots:
Wednesday, June 3, 2009
Road to Roota XIV
By Bix Weir
It was touted as an "all access" day in the life of the President but at 7:15 minutes into Part 1 Larry Summers and a man who I believe is Austan Goolsbee come into the Oval Office for a call with "the Germans". Summers is obviously on edge and shuts down the cameras when he begins to discuss the problem.
Summers: "Life has changed..ahh..since the briefing…ahh”
Obama: "For the better or for the worse?"
Goolsbee: "Net-net for the better…wouldn’t you say Larry?" (Goolsbee speaks loudly and unconvincingly for the cameras.)
Summers: “(nervous laugh)..there’s elements of both. The Germans...actually we should stop (the cameras) here."
The cameras and staff are quickly “ushered out” of the Oval Office.
For those who don’t know, Austan Goolsbee is on the Presidents Council of Economic Advisers and is touted as Larry Summers’ “Economic Internet Guru”. In that capacity there is no doubt in my mind that he monitors all the gold internet sites as well as being in charge of coordinating all the “gold disinformation” articles. Like Summers, Goolsbee believes in a kind of “Psychological Tendencies Economic Model” touting that it is perception that steers the worlds economic markets not necessarily fact. Having fought the gold manipulation battles for so long we all know perception can be managed and manipulated as I discussed in my articles “Operation Confidence Con” and “Geithner Plan=Sustained Manipulation”.
On May 28th, the night before the White House taping, Jim Willie of Goldenjackass.com posted an article called “The Hitman Cometh” where he claimed the Germans are trying to withdraw all their physical gold from US control and several “hit men” have been hired to take down the COMEX and the LME:
"The Germans have demanded that gold bullion held in US custodial accounts be returned to their owners, with physical gold shipped back to Germany ."
I'll bet my last gold Kruggie that the Oval Office phone call was a desperate plea to buy more time before the Germans destroy the physical gold manipulation scheme.
This together with rumblings of China, Russia, Saudi Arabia and Dubai scrambling to get their hands on physical gold has put the Obama Manipulation Team in major gold panic mode.
It's amazing to see these few people in the White House scrambling to prolong a failed policy of trying to manipulate the gold markets of the world.
What a sad state we find ourselves in.
-- Posted Wednesday, 3 June 2009 | Digg This Article | Source: GoldSeek.com ee
THE DOLLAR’S PROBLEM IS THAT
THEY LAUGHED AT MR. GEITHNER
earlier this week when he was in China to "explain" the Obama Administration’s position on the US long term debt position; on the Administration’s current position thereafter the audience laughed.
The difficult notion for those of us in the US to understand is that the American press did not cover the laughter. Other than for a very cursory, one sentence, statement by The NY Times, that Mr. Geithner’s comments "elicit[ed] some laughter," little was made of the inordinately poor reception Mr. Geithner received there in Beijing. However, the international media was and is having a field day with the response he was given. The Financial Times earlier this week said that
In response to a question after his speech, Mr. Geithner told the student audience that ‘Chinese assets are very safe,’ drawing loud laughter from his student audience—a reflection of skepticism among many Chinese about the wisdom of building up large foreign reserves.
The Telegraph in London was even more severe when it said, tersely, that "US Treasury Secretary Tim Geithner was laughed at by an audience of Chinese students after insisting that China’s US assets are safe…. The comment provoked loud laughter from the audience…"
But the US media avoided any reporting of the laughter that greeted Mr. Geithner’s speech. None of the US television stories reported laughter; none of the US newspapers reported the laughter; none of the US magazines covering the trip reported the laughter… but the laughter was loud; it was palpable and it was very, very real. Simply put, the US fiscal circumstance has become a laughingstock, and we do not say that lightly. It is, however, true.
The utter and harsh reality of the US present fiscal circumstance is that the world is laughing at the Obama Administration’s handling of it. Mr. Geithner is the global vicar of the US fiscal policy, and never, ever in our lifetime have we seen or heard of a US Treasury Secretary being laughed at… until now. It is one thing to be derided; it is entirely another to be laughed at, and the US is now being laughed at.
The laughter, we are certain, did not come easily, for the world wanted the Obama Administration to succeed. After eight years of the Bush Administration which the world, for any number of reasons… few of which we agree with… took issue with the US, the world wanted Obama’s government to succeed and take the lead on global economic and political issues. It was prepared to give this Administration the benefit of the doubt on almost any issue; indeed, it was prepared to give this Administration the benefit of many doubts before losing its faith. That faith is now gone.
Audiences do not laugh at Treasury Secretaries readily nor easily. They are laughing readily and uneasily at the Obama Administration now, and we cannot imagine anything sadder and more disconcerting than this.
U.S. private sector axes 532,000 jobs in May-report
NEW YORK, June 3 (Reuters) - U.S. private employers shed 532,000 jobs in May, fewer than the revised 545,000 jobs lost in April, a report by a private employment service said on Wednesday.
The April figure was originally reported as a decline of 491,000.
The median forecast of economists surveyed by Reuters for the ADP Employer Services report, jointly developed with Macroeconomic Advisers LLC, was for 520,000 private-sector jobs lost in December.
The ADP job reading is seen as a predictor of the government's monthly payroll figure. The Labor Department will release its May employment report at 8:30 a.m. (1230 GMT) on Friday.
U.S. service sector shrank again in May - ISM
NEW YORK, June 3 (Reuters) - The U.S. services sector shrank again in May, according to a report released on Wednesday.
The Institute for Supply Management's nonmanufacturing index edged up to 44.0 in May from 43.7 in April.
Economists' median forecast in a Reuters poll called for a reading of 45.0, below the 50 mark which divides expansion from contraction.
The services sector represents about 80 percent of U.S. economic activity, including businesses such as banks, airlines, hotels and restaurants.
Bernanke warns on deficits as Treasury rates rise
WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke warned on
Wednesday that rising U.S. debt was contributing to a spike in longer-term interest rates, and said now was the time to start working on reining in deficits.
He gave no clue as to whether the U.S. central bank would step up its purchases of government debt or mortgage-backed securities to offset the rising borrowing rates, something investors have been watching for.
"Maintaining the confidence of the financial markets requires that we, as a nation, begin planning now for the restoration of fiscal balance," Bernanke said in testimony prepared for delivery to the House of Representatives' Budget Committee.
"Unless we demonstrate a strong commitment to fiscal sustainability in the longer term, we will have neither financial stability nor healthy economic growth," he said.
Bernanke gave a relatively upbeat assessment of the economy, saying he still expected the recession to bottom out and growth to resume later this year.
He said financial markets had improved, thanks in part to the Fed's efforts to restore lending, but he noted the recent spike in yields on longer-term Treasury debt and fixed-rate mortgages.
"These increases appear to reflect concerns about large federal deficits but also other causes, including greater optimism about the economic outlook, a reversal of flight-to-quality flows, and technical factors related to the hedging of mortgage holdings," Bernanke said.
Fed offficials have told banks that they needed to raise specific amounts of new capital prior to repaying taxpayer funds, with more stringent assessments applied compared to the results of the stress tests in May. JPMorgan (JPM) and American Express (AXP) were told they needed to increase common equity, after having been told they had enough capital in case of a further economic downturn. Morgan Stanley (MS) was also told to raise more funds (note that all 3 companies announced capital raises this week). Goldman Sachs (GS) hasn't been required to seek any more funds since its $5.75B capital raise in Apr. The article notes the caution from the Fed stems from a concern of the Fed that the banks repay TARP funds and then claim they have no capital to make loans.
Headlines only. He also comments that the Federal aide poses a degree of political risk for years. Volcker, Chairman of the President's Economic Recovery Advisory Board, is giving the commencement address to the Brooklyn Law School.
* * * * *
Gross Says Diversify From Dollar as Deficits Surge
June 3 (Bloomberg) -- Bill Gross, founder of Pacific Investment Management Co., advised holders of U.S. dollars to diversify before central banks and sovereign wealth funds ultimately do the same amid concern about surging deficits.
The U.S.’s "fortune-producing capabilities seem to be declining, which might suggest that its relative standard of living is doing so as well," Gross wrote in his June investment outlook posted today on the Newport Beach, California-based firm’s Web site. "If so, the implications are serious."
To all; this article http://www.economicpolicyjournal.com/
-be-very-near.html was posted earlier today on Jim Sinclair's http://www.jsmineset.com/ . As time has gone by, more and more investors are coming to the same conclusions we came to last year and earlier. Markets are bigger than governments just as Dr. Frankenstein lost control of his monster. So the bottom line question investors want the answer to is whether or not the Fed can control long term rates? How stupid! Treasury needs to borrow another $900 billion by September, FROM WHO? Does anyone really believe the Chinese are so stupid as to lend us more capital that was created from manufacturing real goods so the U.S. can turn around and pay it back in the form of an interest payment?
I wrote last week that Kudlow, Cramer and the rest of that illiterate bunch would have you believe rates were going up because investors saw green shoots and a recovery just out ahead of us. This is totally nonsensical. First of all, even if they were correct, higher rates along with the massive upcoming "rate resets" will be enough to kill any green shoot including tough to kill weeds. The whole problem in a nutshell is what caused the problem in the first place, TOO MUCH DEBT. Too much debt weighed on the system until it broke, now the government wants to reflate the system by using their "pristine" balance sheet. This is like a doctor operating on a gunshot victim with a .44 Magnum!
Even if the global capital were available for the Treasury to borrow (it is not for much more than 6 more months), how exactly do they plan on paying back the interest, let alone principal? Rates are going higher because of the simple concept of supply and demand. The demand for Treasuries are waning because the world sees a debtor that is on the ropes financially while requested supply is exploding. The Treasury cannot survive until tomorrow morning if the world doesn't lend them the money, PERIOD. We are now at the point in time where "sovereign decisions" must, and will be made. We are at the point where it has become every nation for themselves in a fight for survival. I equate today's situation as an "all in bet" in the global game of "Chicken". He who blinks first will unfortunately be the winner or at least not lose everything.
Mint Can't Account for Missing Gold
By Ian Macleod
Ottawa (Ontario, Canada) Citizen
Tuesday, June , 2009
OTTAWA -- A significant quantity of gold, silver, and other precious metals is unaccounted for at the Royal Canadian Mint.
External auditors are investigating a discrepancy between the mint's 2008 financial accounting of its precious metals holdings and the physical stockpile at the plant on Sussex Drive in Ottawa.
The mystery raises possibilities from sloppy bookkeeping to a gold heist.
Officials with the commercial Crown corporation are saying little and refuse to confirm the amount and value of the unaccounted for gold, silver, and palladium.
"An unprecedented demand in gold in 2008 has led to an unreconciled difference between the mint's financial statements and the physical count of precious metals. There's a difference there that we're looking into," Christine Aquino, mint spokeswoman, said in a prepared statement Tuesday in response to questions from the Ottawa Citizen.
"We're taking this very seriously. We're conducting a thorough review and we're expected to have that completed within the month. (It) includes the analysis of precious metal by-products and financial data. We've allocated all necessary resources to this review."
She stressed police have not been called into what mint officials consider an internal matter. She would not say whether the gold and other metals in question were part of the refinery and bullion operation or one of the mint's three other business lines: producing Canadian circulating coins, designing and producing coinage for foreign countries, and numismatics.
"We're looking at many different angles right now," she said.
The mint's Ottawa headquarters houses one of the world's leading gold and silver refineries, turning out almost 2.8 million troy ounces of refined gold in 2007.
Another 369,000 ounces of refined silver were produced as a byproduct of refining the gold from a number of sources, including gold ore, scrap recyclers, financial institutions and industry. (A troy ounce is the traditional unit of weight for precious metals and equals 1.097 ounces.)
I wish you all a pleasant evening: