Wal-Mart US CEO To America: "Prepare For Serious Inflation"

To those who think that buying food in the corner deli is becoming a luxury, we have five words: you ain't seen nuthin' yet. U.S. consumers face "serious" inflation in the months ahead for clothing, food and other products, the head of Wal-Mart's U.S. operations warned Wednesday talking to USA Today. And if Wal-Mart which is at the very bottom of commoditized consumer retail, and at the very peak of avoiding reexporting of US inflation by way of China is concerned, it may be time to panic, or at least cancel those plane tickets to Zimbabwe, which is soon coming to us.

Don’t Believe the Chart, the US Dollar is Dropping Like a Stone

I want to take a moment to address the US Dollar’s collapse.
The US Dollar which most investors follow is the US Dollar index. This represents the US Dollar’s value against a basket of major currencies: the Euro, Japanese Yen, etc.
Think about that for a moment: the way we measure the US Dollar’s value is against a collection of other un-backed paper currencies all issued by over-indebted, bankrupt nations.
In other words, its nonsense.
Case in point, the Euro comprises over 50% of the US Dollar index. What’s the Euro? A currency backed by a loose group of bankrupt nations with maybe two solvent members in the bunch. Greece has already asked for an extension on its bailout repayments (like they’re ever going to repay anything), Spain is bankrupt, ditto for Ireland, Italy, Portugal, and others.
As for the more solvent European members (Germany and maybe France) their political leaders are getting crushed in the elections because NOBODY who actually works for a living (or has a working brain) wants in on the Euro.
So in Europe we’ve got one perhaps two solvent countries that are supposed to bailout 5+ insolvent ones (like that’s even possible). And the solvent countries are comprised of people who want no part of the Euro.
Man, now that’s what I call a real currency.
In simple terms, to claim the Euro is a viable currency is pure insanity. And yet, this “currency” comprises 50% of the US Dollar index (not as though the Yen or US Dollar are worthwhile either).
My point in all of this is that measuring the greenback using the Euro is insane. 100% totally insane. Which is why claiming the US Dollar is not collapsing is BS. If you actually go outside the US (which 99% of commentators don’t) you’ll find that the US Dollar is worth much less than the Dollar index is telling you.
I was recently on a trip to South America looking at real estate. While there I was told repeatedly by developers that they didn’t want to sign a contract in US Dollars. Instead they wanted to do it in the local currency. This has NEVER happened before during my trips abroad (even as recently as 2009).
When I pushed for having contracts based in Dollars, the price went up EVERY week.
The reason? The US Dollar is falling in relation to the local currency on a daily basis.
So here are local businessmen, (not economists or analysts), people who actually work for a living, refusing to accept US Dollars during business transactions.
That alone should tell you just where the US Dollar stands on the international stage.
In plain terms, the US Dollar crisis is already underway. If you ignore the stupid headlines and pay attention to the real world you can already see it. Prices of goods are EXPLODING higher. It’s being hidden because retailers are downsizing the size of their packages OR packing less goods in the same space (look inside any cereal box or other dry good and you’ll find that at best it’s 75% full).
So if you think things are fine because the US Dollar chart shows we still have a few lines of support, you’re being mislead. The US Dollar is worth far, far less than the chart shows you. So if you want to prepare yourself for a currency crisis you need to move now.
On that note, if you’re getting worried about the future of the stock market and have yet to take steps to prepare for the Second Round of the Financial Crisis… I highly suggest you download my FREE Special Report specifying exactly how to prepare for what’s to come.
I call it The Financial Crisis “Round Two” Survival Kit. And its 17 pages contain a wealth of information about portfolio protection, which investments to own and how to take out Catastrophe Insurance on the stock market (this “insurance” paid out triple digit gains in the Autumn of 2008).
Again, this is all 100% FREE. To pick up your copy today, got to http://www.gainspainscapital.com and click on FREE REPORTS.
Prepare Now!
Graham Summers

Silver Set For All Time Record Quarterly Close - Gold To Silver Ratio On Way To 17 To 1 As Per 1980?

From GoldCore
Silver Set For All Time Record Quarterly Close - Gold To Silver Ratio On Way To 17 To 1 As Per 1980?
Gold and silver have consolidated on yesterday’s gains as inflation, geopolitical and eurozone debt concerns support. Silver has risen above its 31 year record closing price of yesterday and looks set to target new record nominal intraday highs above $38.16/oz.
‘Poor man’s gold’ is set for a record nominal quarterly close which will be bullish technically and set silver up to target psychological resistance at $40/oz and then the nominal high of $50.35/oz . Silver’s record quarterly close was $32.20/oz on December 31st, 1979.

While silver is up 22 percent this year and is heading for a ninth straight quarterly advance, its fundamentals remain very sound. With gold above its nominal record of 1980, poor man’s gold continues to be seen as offering better value. To the masses in India, China and Asia, silver is the cheap alternative to gold and an attractive store of value and hedge against inflation and debasement of paper currencies.

Increasing global investment and industrial demand in the very small and finite silver bullion market is a recipe for higher prices. Thus, as we have long asserted the gold silver ratio is likely to revert to its long term average of 16 to 1.
A return to a ratio of 16 to 1 is likely due to basic supply and demand and the geological fact that there are 16 parts of silver for every one part of gold in the earth’s crust.
The fact that a huge amount of silver has been used in industrial applications and consumer items since the industrial revolution of the 19th century makes a return to the 16 to 1 ratio likely in the long term.
$40/oz silver may offer psychological resistance and could see profit taking but those buying silver are strong hands who rightly believe that silver will very likely reach its 1980 nominal high of $50.35/oz. Real silver bulls believe that silver may reach its inflation adjusted high of $150/oz (see Financial Times Infographic below).
A tiny minority of retail investors have begun to look at silver but it remains largely the preserve of the smart money, a very small amount of hard money advocates in the U.S. and of store of value buyers in Asia. Much of the price gains seen recently may be due to banks closing out some of their massive concentrated short positions which are being investigated by the Commodity Futures Trading Commission (CFTC).

NEWS

(Bloomberg) -- Faber Says Investors Should Hold Gold Amid U.S. Monetary Policy
Marc Faber, publisher of the Gloom, Boom & Doom report, said investors should have from 10 to 20 percent of their portfolio in gold as an inflation hedge.
“I want to buy more gold,” said Faber in an interview in Mexico City today. “Each time that I see Mr. Bernanke, and each time Mr. Tim Geithner opens his mouth, I feel like buying more gold and silver.”
Federal Reserve Chairman Ben S. Bernanke kept plans to buy $600 billion of Treasuries through June. Bernanke said last month the U.S. needs faster employment growth for a sufficient time before policy makers can be assured the economic recovery has taken hold. Meanwhile the bank will seek to hold borrowing costs “exceptionally low.”
Under current U.S. monetary policy “gold will go up substantially,” Faber said. “I own gold as an insurance policy, because I think the whole system will collapse one day.”
(Bloomberg) -- Bolivia Protesters Halt Operations at San Cristobal Silver Mine
Sumitomo Corp.’s silver, zinc and lead mine in Bolivia has been halted since last week by a strike, the mining ministry said. Workers at the San Cristobal mine are demanding better health care, a government official, who can’t be named because of ministry policy, said today by telephone.
Sumitomo’s San Cristobal, in southwestern Bolivia’s mineral-rich region of Potosi, is the world’s third-largest silver mine and the sixth-biggest zinc mine.
(Bloomberg) -- Gold Heads for 10th Quarterly Gain on Investment Haven Demand
Gold headed for a 10th straight quarterly rise, the longest in three decades, as turmoil in the Middle East, fighting in Libya and Japan’s nuclear crisis increased demand for an investment haven. Bullion for immediate delivery advanced 0.3 percent to $1,427.13 an ounce at 5:28 p.m. in Melbourne, taking the quarterly gain to 0.5 percent. The June-delivery contract in New York rose 0.3 percent to $1,428.50, heading for a 0.5 percent quarterly rise.
“There is a lot of uncertainty around the globe in terms of political events,” David Lennox, a Sydney-based resource analyst at Fat Prophets, said by phone today. Fighting could escalate in Libya, while there is uncertainty surrounding Bahrain and the nuclear crisis in Japan, he said.
Gold reached a record $1,447.82 an ounce on March 24 amid tension in northern Africa and the Middle East and after a March 11 earthquake and tsunami in Japan killed thousands and caused radiation to leak from a nuclear plant. Libyan rebels were forced to retreat this week by troops loyal to Muammar Qaddafi after earlier advances were helped by U.S.-led air strikes.
“We are now starting to see that the air strikes may not be completely effective against Qaddafi, and that’s going to raise the next bar,” Lennox said.
Gold advanced for nine consecutive quarters through Dec. 31, 2010, partly because investors bought the metal as a hedge against dollar and euro weakness. Gains were limited this quarter on signs the U.S. economy is improving, boosting investor appetite for higher-yielding assets like stocks.
‘Upward Advance’
“In nominal terms it has been a pretty steady upward advance, but it has come off a period prior to 2000 where we basically had 20 years of flat gold prices,” Ben Westmore, an analyst at National Australia Bank Ltd. in Melbourne, said today.

Companies in the U.S. added 201,000 workers in March, a sign the labor market may be strengthening, according to figures from ADP Employer Services yesterday. Employment increased by a revised 208,000 in February, said the report, which is based on payrolls.
Economists project a Labor Department report tomorrow will show the jobless rate held at 8.9 percent. It has fallen by 0.9 percentage point over the last three months, the biggest decline since 1983.
The Standard & Poor’s 500 index rose 0.7 percent yesterday and is up 5.6 percent this quarter. “Buoyant equities and a positive U.S. ADP employment report removed some of the safe-haven premium” in the gold market, Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd., wrote in a note today.
Silver for immediate delivery climbed 0.4 percent to $37.62 an ounce, heading for a 22 percent rise this quarter, the ninth straight quarterly gain. The metal has more than doubled in the past year and reached a 31-year high of $38.165 on March 24. Immediate-delivery platinum was little changed at $1,773.90an ounce and palladium gained 0.7 percent to $758.75 an ounce.
(Bloomberg) -- Six Arrested in Bundesbank Euro Coin-Forgery Scam, Prosecutors Say

Six people were arrested in a probe over 29 metric tons of forged euro coins that were cashed in at the Bundesbank, German prosecutors said.
The suspects received 1-euro and 2-euro coins from workshops in China where destroyed coins were remade, Doris Moeller-Scheu, a spokeswoman for Frankfurt prosecutors, said in an e-mailed statement today. No employees of Germany’s central bank are suspected of wrongdoing.
The Bundesbank is the only central bank in Europe that exchanges damaged coins without charging a fee, according to Moeller-Scheu. The money must be returned in bags that hold 1,000 euros worth of coins.
“The Bundesbank controls the value mainly by weighing, and does occasional visual sample test,” Moeller-Scheu said. “Then the money value is transferred to an account of the presenter or he can withdraw it from a Bundesbank account.”

Four suspects are of Chinese descent, according to the statement. They were helped by flight attendants who transported the coins in their hand luggage, for which no weigh limit applies, Moeller-Scheu said.
Lufthansa was informed that some individual employees are being investigated, Deutsche Lufthansa AG spokesman Peter Schneckenleitner said in an interview. He said the company wouldn’t comment on prosecutors’ probes.
The 29 metric tons of coins were imported between 2007 and 2010, representing a nominal value of 6 million euros, Moeller- Scheu said.

San Francisco Mint to strike silver bullion

To join West Point Mint in striking American Eagles
By Paul Gilkes-Coin World Staff
March 28, 2011 8:00 a.m.

Article first published in 2011-04-11, News section of Coin World
Because of the continued unprecedented demand for American Eagle silver bullion coins and an increased numismatic production load at the West Point Mint, some American Eagle production is being shifted to the San Francisco Mint.
Tom Jurkowsky, director of the U.S. Mint’s Office of Public Information, confirmed March 23 that trial strikes are currently being produced at the San Francisco Mint, with full-scale, temporary production to begin sometime in May.
The trial strikes are being produced to ensure that the quality of the American Eagle silver bullion coins struck at the San Francisco Mint replicate the quality of those produced at the West Point Mint, according to Jurkowsky.
The 2011 production will be the first time in more than a decade that American Eagle silver bullion coins will be produced at both the West Point and the San Francisco Mints. American Eagle silver bullion coins were produced at both facilities from 1989 through 2000 inclusive. All American Eagle silver bullion coin production was moved strictly to the West Point Mint in 2001.
The bullion coins do not bear the Mint mark of the facility where the coins were struck.
The San Francisco Mint’s inclusion in American Eagle silver bullion coin production in 2011 is necessary in part because Mint officials anticipate sales in 2011 being from 28 percent to nearly 43 percent higher than the record 2010 sales of 34,662,500 silver bullion coins. Other contributing factors to the decision are production, at the West Point Mint, of Proof versions of both the 2011 U.S. Army and 2011 Medal of Honor gold $5 half eagles, and of up to 2 million National September 11th Memorial and Museum 1-ounce, .999 fine silver medals authorized under Public Law 111-221.
“Demand for silver bullion remains at unprecedented levels,” Jurkowsky said.
“If it continues at the rate we have seen over the last two months, it could reach a level of between 45 million and 50 million coins in calendar year 2011. The Mint at West Point has done a fantastic job in meeting demand over the last several years and as we made plans for calendar 2011 production, we saw that the legislation in effect for 2011 added additional products to the West Point portfolio (the 9/11 Medal and both the Army and Medal of Honor commemorative coins),” Jurkowsky said.
“So our plan was to see how silver demand played out in the first quarter of calendar year 2011, knowing that we had press capacity available at San Francisco if needed.”
Because the San Francisco Mint is completing its production of coins for 2011 sets containing Proof coins, “there is a window of opportunity to have San Francisco produce some silver bullion before 2012 production begins in late summer 2011, so we are conducting silver bullion trial strikes at San Francisco now,” Jurkowsky said. “Production would include using the same dies, the same methods and same packaging [as used at the West Point Mint]. We do not expect a visible difference between the two coins.
Jurkowsky continued: “If still warranted, we plan to begin production of up to a few hundred thousand per week in San Francisco in late May to early June, running through the summer. Our authorized purchasers have expressed interest in [picking up the coins at a San Francisco location], but the overall allocation methodology will be done weekly and include West Point volumes in the weekly allocation calculation.
“There are several logistical issues to resolve before any final decisions are made to pursue this initiative.
“Simply stepping back, we feel that exploring use of another facility is good management and may be another way to better meet the needs of our customers,” he said. ■

A Look at Europe and the Collapse of the EU by Nigel Farage

Submitted by: Francis Soyer 3/30/11

Hats off to Nigel Farage for exposing the REAL EU agenda and two key players responsible for the shite show with Portugal, Spain etc.

GOP bill would halt US operations in Libya until Congress acts

GOP bill would halt US operations in Libya until Congress acts


By Mike Lillis - 03/29/11 01:57 PM ET
Two House Republicans introduced legislation Tuesday to force an end to U.S. military operations in Libya unless Congress explicitly authorizes them.
Reps. Timothy Johnson (Ill.) and Justin Amash (Mich.), a freshman, say America's role in the international effort backing Libyan rebels against strongman Moammar Gadhafi is unconstitutional without Congress’s stamp of approval.
Their bill — dubbed the Restoring Essential constitutional Constraints for Libyan Action Involving the Military Act, or RECLAIM — would cut off all funding related to the Pentagon's intervention in the embattled North African country.

Last week, Johnson explained his criticism of President Obama’s decision to enter the conflict.
“Constitutionally, it is indisputable that Congress must be consulted prior to an act of war unless there is an imminent threat against this country. The president has not done so," Johnson said. “Our country has no business enmeshing itself in another country’s civil unrest. We were not attacked. Our national security interests are not at stake.”
Neither Johnson’s nor Amash’s office immediately returned requests for comment.

RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 30/03/11

Today | Nationwide Call-In Day to the Attorneys General

Today, on March 29, we have the opportunity of a lifetime to save millions from losing their homes and hold accountable the big banks that caused this crisis.
Right now, the 50 state Attorneys General are in critical negotiations with the big banks. The outcome of these negotiations could mean the difference between millions of struggling homeowners finally getting the help they need from their lenders, or the big banks continuing with business as usual, foreclosing on families needlessly.
Bank of America, Wells Fargo, JPMorgan Chase, and other big banks could easily walk away scott-free, if thousands of us don’t call our Attorneys General tomorrow.
Read 5 reasons to call your Attorney General today
The time is now to collectively fight back. We can work together to demand that the big banks are held accountable for their crimes.
Your Attorney General needs to make a choice - either side with YOU and be a hero to homeowners and communities by going toe-to-toe with the big banks, OR side with the big banks and let them continue to devastate our communities.
It’s time to demand that our Attorneys General deliver nothing less than a strong settlement against the big banks. Make the call!
Thanks for all that you do,
PICO National Network

Alliance for a Just Society

National People's Action

IAF Southeast

Alliance of Californians for Community Empowerment
STATE AG NAME PHONE

Alabama Luther Strange (334) 242-7300

Alaska John J. Burns (907) 465-3600

Arizona Tom Horne (602) 542-4266

Arkansas Dustin McDaniel (800) 482-8982

California Kamala Harris 510-622-4500

916-323-8270 (main comment voicemail)

Colorado John Suthers 303-866-4500

Connecticut George Jepsen (860) 808-5318

Delaware Beau Biden (302) 577-8338

District of Columbia Irvin Nathan (Acting) (202) 727-3400

Florida Pam Bondi (850) 414-3300

Georgia Sam Olens (404) 656-3300

Hawaii Mark Bennett (808) 586-1500

Idaho Lawrence Wasden (208) 334-2400

Illinois Lisa Madigan (312) 814-3000

Indiana Greg Zoeller (317) 232-6201

Iowa Tom Miller (515) 281-5164

Kansas Derek Schmidt (785) 296-2215

Kentucky Jack Conway (502) 696-5300

Louisiana James “Buddy” Caldwell (225) 326-6000

Maine William Schneider (207) 626-8800

Maryland Douglas F. Gansler (410) 576-6300

Massachusetts Martha Coakley (617) 727-2200

Michigan Bill Schuette (517) 373-1110

Minnesota Lori Swanson (651) 296-3353

Mississippi Jim Hood (601) 359-3680

Missouri Chris Koster (573) 751-3321

Montana Steve Bullock (406) 444-2026

Nebraska Jon Bruning (402) 471-2682

Nevada Catherine Cortez Mastro (775) 684-1100

New Hampshire Michael Delaney (603) 271-3658

New Jersey Paula T. Dow (609) 292-8740

New Mexico Gary King (505) 827-6000

New York Eric Schneiderman (518) 474-7330

North Carolina Roy Cooper (919) 716-6400

North Dakota Wayne Stenehjem (701) 328-2210

Ohio Mike DeWine (614) 466-4320

Oklahoma Scott Pruitt (405) 521-3921

Oregon John Kroger (503) 378-4400

Pennsylvania William H. Ryan, Jr. (Acting) (717) 787-3391

Rhode Island Peter Kilmartin (401) 274-4400

South Carolina Alan Wilson (803) 734-3970

South Dakota Marty Jackley (605) 773-3215

Tennessee Robert E. Cooper Jr. 615-741-3491

Texas Greg Abbott (512) 463-2100

Utah Mark Shurtleff (801) 538-9600

Vermont William Sorrell (802) 828-3173

Virginia Ken Cuccinelli (804) 786-2071

Washington Rob McKenna (360) 753-6200

West Virginia Darrel V. McGraw (304) 558-2021

Wisconsin J.B. Van Hollen (608) 266-1221

Wyoming Bruce A. Salzburg (307) 777-7841

David Rosenberg On QE3 ETA

As we wave goodbye to David Rosenberg, with his last free Breakfast with Dave issue coming out today, we present his most recent free thoughts on QE3.
QE3 WILL COME BUT NOT AS EARLY AS MR. MARKET WOULD LIKE
Portfolio managers as a group are running their funds overweight equities by an average of 67% relative to their typical benchmarks. And polls show that one-third of them believe QE3 is coming this summer. We already know that this Bernanke-led Fed is willing to be extremely aggressive, but as we saw in 2010, the hurdle is high for quantitative easing. We need (i) signs of a double-dip, (ii) a stock market correction of at least 15%, and (iii) deflation, not inflation. How on earth will the Fed be able to do anything at all by then if headline inflation is running north of 4% and the other central banks of the world are either snuggling policy or moving in that direction ? unless the central bank really wants to trash the dollar. We are certainly not inflationists and still see deflation in credit, real wages and housing prices.
Since the market will have a heart attack unless QE3 resumes on July 1, we tend to agree. July 2 would be quite a delay and certainly "not as early as Mr. Market would like." In the meantime expect a complete washout in all asset classes with an emphasis on commodities, which will allow the FOMC to push the reset button on inflationary expectations, and announce QE3 the very next day.

UTAH GOVERNOR SIGNS GOLD & SILVER LEGAL TENDER BILL!

Utah has now become the first State on our list to actually enact a sound money bill into law.
On Friday, March 25th, Gov. Gary Herbert signed HB 317, the "Utah Legal Tender Act," into law.

The law recognizes gold and silver coins issued by the federal government as legal currency in the state. The coins do not replace the current paper currency, but may be used and accepted voluntarily as an alternative.


The law exempts the sale of gold and silver coins from the state capital gains tax, since you would simply be exchanging one form of legal tender currency for another. It also calls for a committee to study alternative currencies for the State and a means for Utahans to pay their taxes with gold and silver coins.
Gold and silver coins issued by the federal government are already legal tender, of course, and can be used to purchase items and pay debts owed. However, they could only be used at the face value of the coins -- which is ridiculously lower than the value of the precious metal content of the coins. If you were to use them at the actual value of the coins, you would face a capital gains tax on the "profit" you gained over the face value.
If nothing else, this law recognizes the inanity of imposing a tax on exchanging one form of legal tender currency for another. By removing that tax and officially recognizing the legal tender status of the gold and silver coins within the State of Utah, the way is now open for good and services to be priced in both Federal Reserve Notes denominations and Gold & Silver Coins denominations; likewise, banks should now be free to offer their customers accounts denominated in legal tender gold & silver coins, so that consumers will be able to make purchases based on those accounts, using their debit cards, checks, ATM cards, etc. Banks should also easily convert FRNs to Gold & Silver Coins and vice-versa, since they will now be treated as simple currency exchanges.
So... what bank will be the first to jump on board here? Because once that happens, the floodgates will open, and billions of dollars in new banking accounts will pour into Utah banks, from people who want to use sound money that keeps its value, rather than nearly-worthless pieces of paper whose purchasing power continues to plummet.
And you know who'll be one of the first in line!

Same Shite Different Day

Submitted by: Francis Soyer 032911

Yes it is another day of bad news. Bad news that Joboma and crew can order attacks on anyone or anything they so desire with impunity. Card blanch to basically do whatever they want. The economic headlines no better or at least the 33% of it in the case of housing as released in the Case Shiller data. So just another day of....

January Case Shiller Data Atrocious: "At Worst, The Feared Double-Dip Recession May Be Materializing"

Case Shiller data is out, and it is as horrible as ever. The Home Price Index came at 140.86 compared to 142.42 previously. Basically the double dip refuses to stop, and that even despite yesterday's "stunning"(ly irrelevant) pending home sales number.“Keeping with the trends set in late 2010, January brings us weakening home prices with no real hope in sight for the near future” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor's. “With this month’s data, we find the same 11 MSAs posting new recent index lows. The 10-City and 20- City Composites continue to decline month-over-month and have posted monthly declines for six consecutive months now. “These data confirm what we have seen with recent housing starts and sales reports. The housing market recession is not yet over, and none of the statistics are indicating any form of sustained recovery. At most, we have seen all statistics bounce along their troughs; at worst, the feared double-dip recession may be materializing."

From the release:
"Data through January 2011, released today by Standard & Poor’s for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, show further deceleration in the annual growth rates in 13 of the 20 MSAs and the 10- and 20-City Composites compared to the December 2010 report. The 10-City Composite was down 2.0% and the 20-City Composite fell 3.1% from their January 2010 levels. San Diego and Washington D.C. were the only two markets to record positive year-over-year changes. However, San Diego was up a scant 0.1%, while Washington DC posted a healthier +3.6% annual growth rate. The same 11 cities that had posted recent index level lows in December 2010, posted new lows in January."
The chart above depicts the annual returns of the 10-City and the 20-City Composite Home Price Indices. In January 2011, the 10-City and 20-City Composites recorded annual returns of -2.0% and -3.1%, respectively. On a monthly basis, the 10-City Composite was down 0.9% and the 20-City Composite fell 1.0% in January versus December 2010. Only San Diego and Washington D.C. posted positive annual growth rates in January 2011. These are the only two cities whose annual rates remained positive throughout 2010. Every other MSA has either moved back into or has always been in negative territory during the recent housing crisis. On a monthly basis, Washington DC was the only market where home prices rose in January, but up only 0.1%. The remaining 19 MSAs and both Composites fell during the month, with 12 of the markets and the 20-City Composite down by at least 1.0% versus December 2010.
“Keeping with the trends set in late 2010, January brings us weakening home prices with no real hope in sight for the near future” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor's. “With this month’s data, we find the same 11 MSAs posting new recent index lows. The 10-City and 20- City Composites continue to decline month-over-month and have posted monthly declines for six consecutive months now.
“These data confirm what we have seen with recent housing starts and sales reports. The housing market recession is not yet over, and none of the statistics are indicating any form of sustained recovery. At most, we have seen all statistics bounce along their troughs; at worst, the feared double-dip recession may be materializing. A few months ago we defined a double-dip for home prices as seeing the 10- and 20-City Composites set new post-peak lows. The 10-City Composite is still 2.8% above and the 20-City is 1.1% above their respective April 2009 lows, but both series have moved closer to a confirmed double-dip for six consecutive months. At this point we are not too far off, and that is what many analysts are seeing with sales, starts and inventory data too.

RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 29/03/11

US Naval Update: CVN 65 Enterprise Abandons Libya, Reinforces CVN 70 Vinson In Straits Of Hormuz

US Naval Update: CVN 65 Enterprise Abandons Libya, Reinforces CVN 70 Vinson In Straits Of Hormuz


Submitted by Tyler Durden on 03/26/2011 20:22 -0400
Wonder why the administration made such a stink of reducing the US airborne presence around Libya, and handing it off to France, Italy, Canada and Turkey? Here's the answer: the CVN65 Enterprise which last week was within striking distance of Libya, has quietly left the Red Sea and is now virtually swimming in the wake of CVN 70 Vinson in the Strait of Hormuz. Because obviously whatever is about to happen in the Persian Gulf will need not one but two aircraft carrier formations. And meanwhile in Japan the Washington is doing all it can to put radiation free miles between itself and Fukushima, even as the Essex, chock full of marines is sitting on the coast waiting for orders.

Why a No Fly Zone Will Not Work in Lybia

Submitted by: Francis Soyer 03/24/11

Here is a news man from Lybia talking about why the U.N. no fly zone will not be successful in bring Gadafi's leadership to an end.

Midday Attitude Adjustment

Submitted by: Francis Soyer

And in the face of doom remember that there is beauty created every day in this world. Of course don't expect to see such posted by our media which is always focused on the negative.

Israel Update: War Next?

Israel Update: War Next?
Submitted by Tyler Durden on 03/23/2011 10:35 -0400

•INTERIOR MINISTER ELI ISHAI SAYS SITUATION DETERIORATING

•ISHAI SAYS ISRAEL MAY HAVE TO ACT IF DETERIORATION CONTINUES

•ISHAI LINKS JERUSALEM BOMBING TO ITAMAR STABBING, GAZA VIOLENCE

•ISHAI SPEAKS ON ISRAEL ARMY RADIO

Apple Inc. vs. Physical Silver

FMX Connect Debunks The Reverse Psychology In Goldman's "Buy Gold" Recommendation

FMX Connect Debunks The Reverse Psychology In Goldman's "Buy Gold" Recommendation


Submitted by Tyler Durden on 03/22/2011 21:46 -0400
April FuturesContangoCRAPExchange Traded FundFisherFluff PieceGoldman SachsGoogleJim CramerLIBORMarket ShareTechnical AnalysisTransparency
Late last week, Zero Hedge pointed out that Goldman Sachs had come out with yet another flip flop piece on gold, having recommended that clients should go long, then short, then long again, pretty much depending on which way the wind blows. We have long been skeptical of Goldman calls on anything, let alone gold, as the firm, just like JPMorgan is very much fundamentally conflicted any time it has a bullish "recommendation" on any precious metal due to the very intimate influence gold and other commodities have on Fed presidents' perception of inflation (and the last thing one would want is for Bernanke's deflation scare tactics to be doubted by more than just Dallas Fed's Fisher, who despite lofty rhetoric has yet to back his words with even one abstaining vote). That said, our skepticism about Goldman's sudden shift in bias has been validated by FMX Connect, which has conducted a forensic analysis of just what Goldman is seeking to achieve with its most recent recommendation. We continue to be far more bullish on any price appreciation prospects for gold, when Goldman (not to mention that other clown on TV), are bearish on gold, than the inverse.
From FMX Connect:
Gold Prices to Hit $1,480: Goldman Advises to buy a Deferred Expiration
We read an interesting sales pitch on the Street.com Friday. Here is an excerpt:
“The investment bank said in a research report Thursday that it expects gold to rally "towards our 3-month price target of $1,480" an ounce. Goldman is recommending investors get long on gold by buying the December 2011 futures contract currently trading at $1,426.10 an ounce.”
To restate:
“Buy Gold. Buy it in a less liquid, wider bid/ask market contract than April GC or GLD and buy it through and/or from us. Buy a contract whose liquidity will also most likely not be there when you need it most whether you are profitable or losing money.”
Forget the bank’s opinion. We ourselves are bullish. But it is commonly agreed among paranoid yet savvy traders that if Goldman is recommending you to buy, it is because they are already long and are maybe looking for an exit strategy for themselves or a client they favor.
No doubt, sometimes you make money getting long when GS says “Buy”. And that is because GS has uncovered a soft spot and the market will overshoot even their inventory overhang being liquidated. Or because their own client told them to buy. Or perhaps you were an early entrant in their “find the bigger fool” race. But sometimes you don’t make money.
Here is what we want to focus on: The recommendation of buying a deferred expiration future when so many more logical choices are available. Warning: lots of derivative talk ahead. We were on a caffeinated roll when we wrote this and didn’t make the time to translate to normal English.
Why the recommendation is Bad or at least not optimal for most people.
The real poker-tell here for us is how the bank is recommending you to get long.

“…get long on gold by buying the December 2011 futures contract…”
Right off the bat the math is wrong. Using the warped logic that recommends buying deferred expiration futures: A three month target of $1480 translates to an August future at the latest. Why would you tell someone to pay more carry cost than necessary? But let’s look at the implications of any deferred future recommendation as a market taker (i.e. lifting offer/ hitting bid client)
Let us now count the ways that this December purchase is both ridiculous, negligent, and possibly the most obvious tell on earth as to what their position actually is.
1. December futures are less continuously liquid than their front month counterpart, currently the April contract. Which means the implicit fee from the bid/ask spread will be bigger on entry into the long position. Is this added premium worth it? NO. Gold is Gold, and the difference in price between April futures and December futures is the opportunity cost of money. Gold today is gold tomorrow plus the cost of how much interest it would be to borrow money to buy the contract. Note we said continuously liquid. There are times when December will be almost as liquid as April (with a wider bid/ask no doubt), but the real hidden hazard is continuity. Translation: “When you NEED to get out, because of the gold market washing out, the stock market washing out, you kids college tuition due, war, peace, pestilence, or whatever…..that exit liquidity will be AWOL relative to the front month’s liquidity.
2. If there ever were a short squeeze event like in Silver and spreads went backwardated, guess which contract would benefit? April. So as unlikely as it is to happen, buying December takes the whole homerun from physical delivery issues right off the table. You are actually short optionality on a short squeeze. Guess who is long it? Speaking of Silver: how is it that GS didn’t tell their clients Silver would go backwardated? It was the trade of the year and much easier to see than if the market itself would go up or down. Do you think they missed it? We doubt that. We also doubt they would let you in on it until the trade was exhausted. We know of two hedge funds that didn’t miss it, and they told no one anything on their bet. We found out after the fact. When JPM crushed silver spreads and carried out a prominent futures local out on a $10MM stretcher, were their clients in on that one as well? We wonder if GS was caught on the other side of that disaster. Probably not. They probably benefitted. But by all means buy gold because they think it’s going up. Enjoy the crumbs from a TBTF bank’s best trades. It will also come with one of those neat oval stickers you can put on your Land Rover
3. Try getting out when you have to, upon exit especially in a market washout scenario, Murphy’s law applies. The marketmaker of last resort will be Goldman. And guess what he has on his book as your position being, LONG and WRONG. The exit vig will kill you much more than those low-low commissions promised by your benevolent banker.

Why the Banks may be legitimately recommending this tactic and why that recommendation assumes you are too stupid to understand the risks of getting long another way:




“You may be holding it for a long time and we are trying to save you the rollover cost execution.”



a. Math is math. Rolling over your long every expiration will cost approximately as much money as the complete contango from April to December right now. Add in the “We know you’re a buyer so we’re gonna back off and raise our Dec. ask price because you are a captive client” and you will most likely get crushed. They can’t fade you in April. They have more competitors there.



b. Even if a. is wrong and they are not fading you, and the monthly rollover carry is a tick or 2 more than just buying and holding the December future, we’d rather pay that liquidity premium any day instead of being kept on hold while our broker, banker, AND counterparty susses out our position before making a market in a back month future. Even if you execute the Dec contract for yourself on a screen, who do you think is bidding up the December contract with no fear of anyone selling it to them? They borrow at 0.00% interest. Their staying power is bigger than you and your 18% visa card. And they know you are coming to buy. Its Bayesian probability and asymmetric risk for them. You are toast. Their whole commodity model has de-evolved into a Martingale trade, And Double Zero is the Fed going under.



c. If it were more efficient to buy December futures than to buy April and roll them over, there would be no back month independent marketmakers or arbitrageurs, because there wouldn’t be sufficient edge to support their trading. But yet there are plenty of back month futures marketmakers willing to make a market in something you know infinitely less about than they do. Back month marketmaking is not a public service. Meanwhile, there are hardly any spot month independent marketmakers anymore, because the market is just too tight to make a living unless you are arbing another venue. Natural flow as a result of transparency and technology makes the market now. December, not so much.



Why they may be recommending this tactic with less than your best interests at heart:





1. They could already be long December contracts given to them from producers who hedged production last year. The Bank’s own hedges could be in April and they seek exit liquidity on their December long leg while they unwind their shorter dated leg, which is infinitely more liquid for them.

2. They are long April and are perfectly happy putting on the April/ Dec spread at higher than interest rate differentials. Specifically, 8 month rates will be less than what you pay buying December at a price while April is trading at a lower price. Example: they sell Dec, buy April and collect a cost of carry spread of say, .25% and then trade a bond spread that charges them .15%. Tadaaa, inefficient markets make them money.

3. Because their market share in commodities has shrunk since ETF’s have trumped their own GSCI for retail flow, and they have to make up some “special” reason to buy a December contract in Gold.

4. Maybe they are helping to create exit liquidity for a client they give a shit about, someone like Paulson? Free Abacus with every Dec future?

5. Some other reason our paranoid minds haven’t thought of.
In the one size fits all category, they should be telling you to buy an ETF. No rollover risk, less entry and exit vig and no cost of carry. But they can’t control that transaction can they? Unless of course they expect a paper versus physical delivery issue. In which case you should be long April, not December.
Even if their idea is legitimate and we’re wrong. They should at least describe the risks of buying a deferred expiration contract and not in some fluff piece by shill Jim Cramer’s site.
The irony of a good marketmaker is that his success attracts competitors and his service is then no longer needed. As these banks make less money on tighter bid/ask spreads they seek legislative protection of their franchises, less transparency, restrictions on competition and such. Call it white-collar welfare. Failing that, they seek more and more arcane ways of convincing you to put on a position which could be executed much less expensively. They seek to migrate your positions into the desert of liquidity. Where transparent light rarely shines. This way the bodies are harder to find if it blows up. They are in a war with exchanges as well. Exchange products are trumping bank intellectual capital and salesmanship. And so the banks are trying and succeeding in buying pieces of them now. There is a new wall going up, and it is being constructed by the government around the Exchanges. The banks want to be on the right side of that wall. Even while they rail against the exchange clearing monopolies, they want in. But we digress.
We are Bullish on Gold
Here is what we are telling you at the most basic level: if you are bullish, and haven’t fallen asleep yet reading this; buy the front month contract and use some reliable methodology to generate a stop loss. Be it technical analysis, bank roll management, voodoo, interest rates or whatever. Just have a level to get out if you are wrong.
If you insist on buying a December futures contract, the screen market will be 2 to 3x as wide as the April, and we’re sure higher than the cost of carry. Whatever gets you through the night we guess. Vaya con dios.
If you wish to express your position in options, consider a tight December call spread or a ratio if you are not afraid of margin calls. But learn what we are saying here first. Google it or email us. We’ll respond.
If you want to get fancy, do what the pros do, a covered write. Buy April Gold. Then ask yourself at what price do you want to get out? Goldman says $1480.00. If you agree, sell a December 2011 $1500 call and create a dividend for yourself if the market doesn’t get there. If it does, laugh to the bank. Just make sure you have the capital to handle a margin call, even as you are making profits. Keep your powder dry and don’t put too much in any one idea.

Time Out!

Submitted by: Francis Soyer

Yes, the flow of news, data, war death and suffering day in day out from uncle Satan is more than enough to make ones blood boil. Hence Francis is posting one for an attitude adjustment.

Is It Time To Short Every Single Global Hunter "Buy" Recommendation?

A week ago when we summarized the most recent round of inbound humiliation by one alleged bucket shop known as Global Hunter Securities, which basically has a buy recommendation on every single reverse merger ever to come to the US, even the acknowledged frauds such as in that particular case CCME, we said:"Oh well - at least we can be certain next week's non seasonally adjusted initial claims number will be at a minimum one (The Seasonally Adjusted can well be negative - it is from the BLS after all)." We were referring of course to the imminent termination of the sellside analyst covering CCME Ping Luo. You can therefore pardon our lack of astonishment when we read, literally minutes ago, the following release from Global Hunter: "We are discontinuing coverage of the following companies: AMCN,CCME, CHLN, CRTP, CVVT, HRBN, and SDTH. We are discontinuing coverage of these companies due to the departure of our analyst and due to a shift in our resources to other areas in the China space." Well, since we predicted the former, it was more or less expected, but we wonder what "other areas" in the China space has Global Hunter morphed to: will they soon be covering an as yet untought of pyramid scheme with a Turbo Buy? Or do by other areas do they actually mean perform due diligence instead of stamping everything that promises a coverage fee with a Buy rating. Which brings us to the topic of this post. Since Gobal Hunter's advisory reputation is smoldering in the sewer, we believe it is time to voice our own unsolicited advice, and tell readers to short every single company on Global Hunter's buy list. If today's example of DEER is any indication, the profit will be at least 20% in the span of a few weeks.
As readers know, we already discussed today's unexpected "discovery" by the analyst community that DEER (NASDAQ: FRAUD) is the latest stock to likely meet its reverse-merged maker in the purgatory of Over The Counter/Pink Sheet bulletin boards, where bid ask spreads are greater than the price of the actual stock. Yet as the chart below shows, we wonder just what magical demarcation line existed at precisely $11 for over 7 months! The flatline manipulation where there was a magical bid at all costs at $11 is beyond question. Of course, now that the stock has plunged below it, it is game over, as the next support is in the $8.00 range, following which the stock is taking the bullet train straight to zero.
We are curious if the porn-addicted securities regulator will actually move a finger to explain this chart which even a blind, mute and deaf monkey would recognize the inherent manipulated price floor in the name (until it breaks of course).
What we are not curious about, is the opinion that Global Hunter had on the name as recently as March 14, with a Buy recommendation and an $18 price target, this time by another analyst, Joe Giamichael - alas Joe may be joining Ping on the seasonally unadjusted initial claims line very soom. The gist is pretty much along the lines of what one would expect from any other alleged bucket shop.

MSNBC - Dylan Ratigan goes after bankers

Charles Nenner- DJIA at 500, Major Wars

I would presume Libya is the appetizer to Nenner’s major conflict thesis. Well it seems that this recent incursion proves that over extension is another strategy on the table for the US military. In 2003, we saw the Bush administration maneuver directly into a pincer move against itself—as they opened a second front for extremists to engage the military in Iraq. It’s clear that either military or political philosophy is not Washington’s strong suit or the objective is not a quick resolution.




I am starting to believe there’s a lot more to Nenner’s arguments, especially the brooding deflationary crisis. This is not to say by any means that the dollar is a safe haven. That is because we have been in the deflationary spiral now for quite some time, primarily in terms of real wages.



The reality is that the dollar has become a dysfunctional currency. At the street level we are seeing smaller and smaller amounts of dollars chasing goods, which is in complete contrast to what we are witnessing in global capital markets.



Quantitative easing may have been part of the solution to the deflationary crisis-- had it been allocated towards stimulating industrial growth; however, money was instead diverted directly into equities, commodities and emerging where large returns on investment seem much more likely, at least for medium to short term profits.



Several factors emanating out of the two-tier economy should lead to another DJIA meltdown. Firstly, the successive rounds of misallocated quantitative easing schemes should become progressively less effective and ultimately, politically untenable. This will translate into an inability of the FED to buoy values of US securities. The second tier economy—essentially the US working class—will be forced to successively decrease their demand of good and services, as a result of the deflationary pressures brought on from the lack of credit, liquidity, and productive capacity.



Nevertheless, I still believe precious metals will continue to serve as the best hedges against the political, economic, and ecological disasters we are now witnessing.

"Gold Set To Rally" - Goldman Expects Gold To Promptly Rise To $1,480

Comment by: Francis Soyer 03/18/11

While this piece from the SAC should make gold longs feel giddy one should also take a note of caution. Goldman and the other large sell side firms in terms of research and their proprietary trading patterns act IN THEIR OWN SELF INTERESTS. That said what then does this recommendation mean and how should a speculator react if one knows the above? Most likely that we as of now have reached an intermediate term low. A rise to $1,480 is a piddly squat move from here with gold trading at $1,404 this morning. Which means this recomendation that they are pimping this morning should make gold investors want to start selling in here so Goldman can buy in preparation for the next massive leg up well beyond $1,480. As mentioned in the report below their thesis is pointed at unrest in the middle east and Japan etc. The real issue at hand is that confidence in Governments is deteriorating and THAT is when Gold appreciates. This deterioration is ongoing and unstoppable. Why? Because we all know that our world governments will fail because they have blown themselves up borrowing money that will never be able to be paid back. Its called DEFAULT and it is maybe a few months away at this point.

"Gold Set To Rally" - Goldman Expects Gold To Promptly Rise To $1,480
Submitted by Tyler Durden on 03/18/2011 07:43 -0400


As we are experiencing a furious regime change, the sellside positional updates are coming fast and furious. The latest major recommendation change comes again from Goldman which has just reiterated its belief gold will reach its 3 month target of $1,480 shortly. Of course, after a Cramer recommendation to buy the metal, this is the only call for a higher gold price that should be of great concern to everyone. From Goldman: "We expect gold prices to rally toward our 3-month price target of $1480/toz, and continue to recommend a long gold trade. While the protests and threat to oil supplies in the Middle East and North Africa drove COMEX gold prices to a new record high of $1437/toz on March 2, the events in Japan have paradoxically sent gold prices back below $1400/toz despite the ongoing decline in US 10-year TIPS yields. Given the decline in US real interest rates, we see the recent retracement in gold prices as offering a good buying opportunity, and maintain our long gold trading recommendation as we expect gold to rally to our 3-month price target of $1480/toz."

Oil Heading North off UN Decision to Bomb Lybia

There Goes Oil


Submitted by Tyler Durden on 03/17/2011 19:08 -0400
An hour ago we said: "Watch for the reaction in crude following the vote passage, and especially following Bloomberg headlines that France has launched an all out attack." Well the attack is still pending, but the oil reaction is here (and nobody could have seen it coming). WTI just passed $103. Demand destruction or no demand destruction, here we come. And just imagine what happens when Japan is fully back on line again (in about a year at which point the US will be between QE 4 and 5).

Latest Keiser Report

Video Here

http://maxkeiser.com/2011/03/18/dollar-crashing-and/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Maxkeisercom+%28maxkeiser.com%29

Head of FDIC Stepping Down and some of her parting comments and warnings

Sheila says goodbye to the ABA


Submitted by Bruce Krasting on 03/16/2011 13:09 -0400
I have gone both ways with Sheila Bair. I have criticized some of what she has done and applauded others. She gave a speech to the America Bankers Association today. She summed things up pretty well. Early on in the presentation she made this significant remark:
This may be my last opportunity to speak with you before the end of my term in June.
Read this to mean that she is out. This is a big job that requires a transition period. A new FDIC head has to be named soon. Given the politics of this position and the daggers being bandied about in D.C. I think this has to come by 4/30. Just six weeks away. Should be interesting.
Given that this was her last opportunity to address all the big bankers in one room it was a good time for Sheila to beat up on the audience:
I would like to propose to you a radical-sounding notion. And it is that increasing the size and profitability of the financial services industry is not – and should not be – the main goal of our national economic policy.
Apparently this woke the audience up. Guys were choking on their bagels. This must have also gotten the coffee cups rattling:
My reading of recent polling data on how the public views banks also speaks to the need for a different approach from your industry. In April 2010, a Pew Research poll found that just 22 percent of respondents rated banks and other financial institutions as having “a positive effect on the way things are going in this country.”
This was lower than the ratings they gave to Congress, the federal government, big business, labor unions, and the entertainment industry.
She warned the banks:
What is important for you to recognize is that this type of reputation risk will eventually have implications for your bottom line and the confidence of your investors and customers.
All this is old news to Zero Hedge readers. But it's a pretty big deal when the outgoing head of the FDIC says it.
Notes:
(I) We have not seen the last of Ms. Bair. I don’t think she is a presidential candidate, but she would make a good VP. Her name is on this list. She might be our next Treasury Secretary. I’m "ABT" (anyone but Tim). She could also run the Fed. Bernanke has erred with QE2. He will take heat for the inflation that is brewing. It just might be that he goes back to Princeton in a year. Her name is definitely on that list.
(II) I finally got around to dumping my accounts with the big banks. I am now with a Community Bank. They do everything the big slobs do. They don’t have branches on every corner. Who cares? Community Banks are now lending. The big guys are not. Their deposit rates are better. Plus you get to say “screw you” to a Morg, a Citi or a BoA.

Energy chairman warns US headed toward 1970s-style crisis

Energy chairman warns US headed toward 1970s-style crisis


By Michael O'Brien - 03/14/11 09:02 AM ET
The U.S. could be heading toward an energy crisis of a type unseen since the 1970s, the chairman of the House's Energy panel said.
Rep. Fred Upton (R-Mich.), the chairman of the House Energy and Commerce Committee, warned of elevated prices for gas and other energy sources along the lines of what the U.S. experienced under President Carter.
Asked by the conservative website Newsmax if energy prices were heading toward a '70s-style crisis, Upton said: "Well, we are.
"Who knows where this is going to stop? How long is this turmoil going to last?"
Video of the interview was posted over the weekend.
Upton echoed GOP criticism of President Obama, whom the Michigan Republican blamed for not allowing permits for additional energy exploration, which Upton said would help bring down prices.
The GOP chairman's words are part of a new barrage by Republicans against Obama over the increased price of energy, especially gasoline, in recent weeks. Speaker John Boehner (R-Ohio) led House Republicans in a push against the White House's energy policies last week, and GOP presidential candidates have also joined in the fun; Mississippi Gov. Haley Barbour (R) has been a frequent critic of Obama's energy policies, and will level more criticism in a speech Monday in the president's hometown of Chicago.
The president addressed the increasing energy prices in a Friday news conference, in which he renewed calls for lawmakers to work on energy reforms, including encouraging more efficient technology and some increased energy production. Obama also suggested he would be willing to tap the Strategic Petroleum Reserves to provide relief from prices if they get too high.
He also shot back at Republican critics, who have suggested Obama is purposefully keeping prices high.
"[A]ny notion that my administration has shut down oil production might make for a good political sound bite, but it doesn’t match up with reality," Obama said.

Bahrain imposes state of emergency

Submitted by: Francis Soyer

The story below is a precurser to what will be a complete shit show that will end badly in Saudi Arabia and WILL send oil to $200-$225 per barrel. To protect purchasing power at the pump Francis is taking a 5% to 10% portfolio position in DBO. At the same time he is also taking a 5% to 10% portfolio position in PSLV to offset the ongoing demise of the USD which is headed to zero over the next 16 to 18 months. Sending love, light and thoughts of peace to the citizens of Bahrain, Mauritania, Afghanistan, Yemen, Cote d'Ivoire, Mali, Eritrea, Libya, Egypt, Pakistan, Haiti, Central African Republic, Niger, Nepal and Sudan. The above countries all experiencing states of protest and revolt.

Middle East
Bahrain imposes state of emergency
Two killed and many wounded in violent clashes as king authorises "all necessary measures to protect safety of country".

Last Modified: 15 Mar 2011 16:57 GMT

The king of Bahrain has declared a state of emergency for three months on the island following weeks of anti-government protests, as deadly clashes continued across the country.
An order by the king "authorised the commander of Bahrain's defence forces to take all necessary measures to protect the safety of the country and its citizens," a statement read out on television on Tuesday said.
The development comes a day after Saudi-led military forces arrived to support the government, which is facing pressure from the Shia majority to implement reforms.
Al Jazeera's correspondent in the capital, Manama, who we are not naming for security reasons, said the declaration of a state of emergency appeared to have been deliberated upon for some time now.
"The last few days Manama has effectively been shut down. So there was a sense that something was going to happen. Then yesterday we had the GCC troops come in," he said.
"I'm standing now in and amongst a demonstration. There are tens of thousands of people streaming past me to the Saudi embassy. There is a great sense of change here."
Renewed clashes
Our correspondent said there was not a visible presence of Saudi troops on the streets in his area, but clashes between protesters and Bahraini security forces continued elsewhere.
He confirmed reports that at least two people were killed in the Shia suburb of Sitra outside of Manama in fighting there on Tuesday.
Abdullah Al Hubaaishi, a Bahraini who was making his way to the protest camp at Pearl Roundabout in Manama, told Al Jazeera that there were many wounded protesters on the streets in Sitra.
"Most of them have been shot," he said. "Those people started attacking the villages and the towns. If there is anybody in the road they will shoot them. If there is nobody in the road they will enter the houses."
Request for assistance
Hundreds of Saudi-led troops entered Bahrain on Monday to help protect government facilities there amid an escalation in the protests against the government.

Local television broadcast images of troops in armoured cars entering the Gulf state via the 26km causeway that connects the kingdom to Saudi Arabia.
The arrival of the troops followed a request to members of the Gulf Co-Operation Council (GCC) from Bahrain.
The United Arab Emirates also sent about 500 police to Bahrain, according to Abdullah bin Zayed Al-Nahyan, the Emirati foreign minister. Qatar, meanwhile, did not rule out the possibility of its troops joining the force.
Sheikh Hamad bin Jassim bin Jabr Al-Thani, the Qatari prime minister and foreign minister, told Al Jazeera: "There are common responsibilities and obligations within the GCC countries.
"The arrival of Saudi and UAE troops in Bahrain is in line with a GCC defence agreement that calls for all members to oblige when needed and to fully co-operate.
"We are committed to adhering to the GCC agreement. At the moment we have peacekeeping troops. We don't have a full force there, but this is up for discussion."
International concern
The US, which counts both Bahrain and Saudi Arabia among its allies, has called for restraint, but has refrained from saying whether it supports the move to deploy troops.
"We urge our GCC (Gulf Co-operation Council) partners to show restraint and respect the rights of the people of Bahrain, and to act in a way that supports dialogue instead of undermining it," Tommy Vietor, the White House spokesman, said on Monday.
Americans are being advised to avoid travelling to the island, which is home to US warships that patrol the Gulf.
Iran, meanwhile, has warned against "foreign interferences".
"The peaceful demonstrations in Bahrain are among the domestic issues of this country, and creating an atmosphere of fear and using other countries' military forces to oppress these demands is not the solution," Hossein Amir Abdollahian, an official from the Iranian foreign ministry, was reported by Iran's semi-official Fars news agency as saying.
Provocation to protesters
Abdel al-Mowada, the deputy chairman of Bahrain's parliament, told Al Jazeera that it was not clear how the Saudi force would be deployed but denied the troops would become a provocation to protesters.
"It is not a lack of security forces in Bahrain, it is a showing of solidarity among the GCC," he told Al Jazeera.
"I don't know if they are going to be in the streets or save certain areas ... [but protesters] blocking the roads are no good for anyone, we should talk.
"The government is willing to get together and make the changes needed, but when the situation is like this, you cannot talk."
The Saudi troops arrived less than 24 hours after Bahraini police clashed with demonstrators in one of the most violent confrontations since troops killed seven protesters last month.
Opposition groups, including Wefaq, the country's largest Shia movement, have spoken out against the use of foreign troops.
"We consider the entry of any soldier or military machinery into the Kingdom of Bahrain's air, sea or land territories a blatant occupation," Wefaq said in a statement.

Bahrain Gets Added to the Official Travel Warning List at U.S. State Department

Submitted by: Francis Soyer

It is now official. Bahrain as of end of day yesterday is on the travel warning list as issued by the State Department. This is not a good sign of things to come as if the world does not have enough problems...


Travel Warning


U.S. DEPARTMENT OF STATE

Bureau of Consular Affairs
March 14, 2011

The U.S. Department of State warns U.S. citizens of the potential for ongoing political and civil unrest in Bahrain. We urge U.S. citizens to defer travel to Bahrain at this time. U.S. citizens currently in Bahrain should consider departing. On March 14, 2011, the Department of State authorized the voluntary departure from Bahrain of eligible family members of U.S. Embassy staff. This Travel Warning replaces the Travel Alert dated February 18, 2011.
Bahrain has experienced a breakdown in law and order in various areas of the country over the last few weeks. Demonstrations have degenerated into violent clashes between police and protesters on several occasions, resulting in injuries. There also have been multiple reports of sectarian groups patrolling areas throughout Bahrain and establishing unofficial vehicle checkpoints. On March 14, 2011, foreign military elements entered Bahrain. Spontaneous demonstrations and violence can be expected throughout the country. There is no indication that U.S. citizens are being threatened or targeted.
While demonstrations have not been directed toward Westerners, U.S. citizens are urged to remain alert to local security developments and to be vigilant regarding their personal security. The U.S. Department of State strongly urges U.S. citizens to avoid all demonstrations, as even peaceful ones can quickly become unruly and a foreigner could become a target of harassment or worse.
The U.S. Embassy in Manama can be reached at (973) 1724-2700; the after-hours emergency number is (973) 1724-2957; the fax number is (973) 1725-6242. Demonstration Notices can be found on the Embassy’s website. U.S. citizens requiring emergency consular assistance may contact the Department via our website by going to the “Middle East and North Africa Situation” site.
U.S. citizens in Bahrain are encouraged to enroll in the Smart Traveler Enrollment Program (STEP). U.S. citizens without internet access may enroll directly at the U.S. Embassy. By enrolling, U.S. citizens make it easier for the Embassy to contact them in case of emergency.

Stratfor On Japan, the Persian Gulf and Energy

Stratfor On Japan, the Persian Gulf and Energy


Submitted by Tyler Durden on 03/15/2011 15:43 -0400

From Stratfor
Japan, the Persian Gulf and Energy
By George Friedman
Over the past week, everything seemed to converge on energy. The unrest in the Persian Gulf raised the specter of the disruption of oil supplies to the rest of the world, and an earthquake in Japan knocked out a string of nuclear reactors with potentially devastating effect. Japan depends on nuclear energy and it depends on the Persian Gulf, which is where it gets most of its oil. It was, therefore, a profoundly bad week for Japan, not only because of the extensive damage and human suffering but also because Japan was being shown that it can’t readily escape the realities of geography.
Japan is the world’s third-largest economy, a bit behind China now. It is also the third-largest industrial economy, behind only the United States and China. Japan’s problem is that its enormous industrial plant is built in a country almost totally devoid of mineral resources. It must import virtually all of the metals and energy that it uses to manufacture industrial products. It maintains stockpiles, but should those stockpiles be depleted and no new imports arrive, Japan stops being an industrial power.
The Geography of Oil

There are multiple sources for many of the metals Japan imports, so that if supplies stop flowing from one place it can get them from other places. The geography of oil is more limited. In order to access the amount of oil Japan needs, the only place to get it is the Persian Gulf. There are other places to get some of what Japan needs, but it cannot do without the Persian Gulf for its oil.
This past week, we saw that this was a potentially vulnerable source. The unrest that swept the western littoral of the Arabian Peninsula and the ongoing tension between the Saudis and Iranians, as well as the tension between Iran and the United States, raised the possibility of disruptions. The geography of the Persian Gulf is extraordinary. It is a narrow body of water opening into a narrow channel through the Strait of Hormuz. Any diminution of the flow from any source in the region, let alone the complete closure of the Strait of Hormuz, would have profound implications for the global economy.
For Japan it could mean more than higher prices. It could mean being unable to secure the amount of oil needed at any price. The movement of tankers, the limits on port facilities and long-term contracts that commit oil to other places could make it impossible for Japan to physically secure the oil it needs to run its industrial plant. On an extended basis, this would draw down reserves and constrain Japan’s economy dramatically. And, obviously, when the world’s third-largest industrial plant drastically slows, the impact on the global supply chain is both dramatic and complex.
In 1973, the Arab countries imposed an oil embargo on the world. Japan, entirely dependent on imported oil, was hit not only by high prices but also by the fact that it could not obtain enough fuel to keep going. While the embargo lasted only five months, the oil shock, as the Japanese called it, threatened Japan’s industrial capability and shocked it into remembering its vulnerability. Japan relied on the United States to guarantee its oil supplies. The realization that the United States couldn’t guarantee those supplies created a political crisis parallel to the economic one. It is one reason the Japanese are hypersensitive to events in the Persian Gulf and to the security of the supply lines running out of the region.
Regardless of other supplies, Japan will always import nearly 100 percent of its oil from other countries. If it cuts its consumption by 90 percent, it still imports nearly 100 percent of its oil. And to the extent that the Japanese economy requires oil — which it does — it is highly vulnerable to events in the Persian Gulf.
It is to mitigate the risk of oil dependency — which cannot be eliminated altogether by any means — that Japan employs two alternative fuels: It is the world’s largest importer of seaborne coal, and it has become the third-largest producer of electricity from nuclear reactors, ranking after the United States and France in total amount produced. One-third of its electricity production comes from nuclear power plants. Nuclear power was critical to both Japan’s industrial and national security strategy. It did not make Japan self-sufficient, since it needed to import coal and nuclear fuel, but access to these resources made it dependent on countries like Australia, which does not have choke points like Hormuz.
It is in this context that we need to understand the Japanese prime minister’s statement that Japan was facing its worst crisis since World War II. First, the earthquake and the resulting damage to several of Japan’s nuclear reactors created a long-term regional energy shortage in Japan that, along with the other damage caused by the earthquake, would certainly affect the economy. But the events in the Persian Gulf also raised the 1973 nightmare scenario for the Japanese. Depending how events evolved, the Japanese pipeline from the Persian Gulf could be threatened in a way that it had not been since 1973. Combined with the failure of several nuclear reactors, the Japanese economy is at risk.
The comparison with World War II was apt since it also began, in a way, with an energy crisis. The Japanese had invaded China, and after the fall of the Netherlands (which controlled today’s Indonesia) and France (which controlled Indochina), Japan was concerned about agreements with France and the Netherlands continuing to be honored. Indochina supplied Japan with tin and rubber, among other raw materials. The Netherlands East Indies supplied oil. When the Japanese invaded Indochina, the United States both cut off oil shipments from the United States and started buying up oil from the Netherlands East Indies to keep Japan from getting it. The Japanese were faced with the collapse of their economy or war with the United States. They chose Pearl Harbor.
Today’s situation is in no way comparable to what happened in 1941 except for the core geopolitical reality. Japan is dependent on imports of raw materials and particularly oil. Anything that interferes with the flow of oil creates a crisis in Japan. Anything that risks a cutoff makes Japan uneasy. Add an earthquake destroying part of its energy-producing plant and you force Japan into a profound internal crisis. However, it is essential to understand what energy has meant to Japan historically — miscalculation about it led to national disaster and access to it remains Japan’s psychological as well as physical pivot.
Japan’s Nuclear Safety Net

Japan is still struggling with the consequences of its economic meltdown in the early 1990s. Rapid growth with low rates of return on capital created a massive financial crisis. Rather than allow a recession to force a wave of bankruptcies and unemployment, the Japanese sought to maintain their tradition of lifetime employment. To do that Japan had to keep interest rates extremely low and accept little or no economic growth. It achieved its goal, relatively low unemployment, but at the cost of a large debt burden and a long-term sluggish economy.
The Japanese were beginning to struggle with the question of what would come after a generation of economic stagnation and full employment. They had clearly not yet defined a path, although there was some recognition that a generation’s economic reality could not sustain itself. The changes that Japan would face were going to be wrenching, and even under the best of circumstances, they would be politically difficult to manage. Suddenly, Japan is not facing the best of circumstances.
It is not yet clear how devastating the nuclear-reactor damage will prove to be, but the situation appears to be worsening. What is clear is that the potential crisis in the Persian Gulf, the loss of nuclear reactors and the rising radiation levels will undermine the confidence of the Japanese. Beyond the human toll, these reactors were Japan’s hedge against an unpredictable world. They gave it control of a substantial amount of its energy production. Even if the Japanese still had to import coal and oil, there at least a part of their energy structure was largely under their own control and secure. Japan’s nuclear power sector seemed invulnerable, which no other part of its energy infrastructure was. For Japan, a country that went to war with the United States over energy in 1941 and was devastated as a result, this was no small thing. Japan had a safety net.
The safety net was psychological as much as anything. The destruction of a series of nuclear reactors not only creates energy shortages and fear of radiation; it also drives home the profound and very real vulnerability underlying all of Japan’s success. Japan does not control the source of its oil, it does not control the sea lanes over which coal and other minerals travel, and it cannot be certain that its nuclear reactors will not suddenly be destroyed. To the extent that economics and politics are psychological, this is a huge blow. Japan lives in constant danger, both from nature and from geopolitics. What the earthquake drove home was just how profound and how dangerous Japan’s world is. It is difficult to imagine another industrial economy as inherently insecure as Japan’s. The earthquake will impose many economic constraints on Japan that will significantly complicate its emergence from its post-boom economy, but one important question is the impact on the political system. Since World War II, Japan has coped with its vulnerability by avoiding international entanglements and relying on its relationship with the United States. It sometimes wondered whether the United States, with its sometimes-unpredictable military operations, was more of a danger than a guarantor, but its policy remained intact.
It is not the loss of the reactors that will shake Japan the most but the loss of the certainty that the reactors were their path to some degree of safety, along with the added burden on the economy. The question is how the political system will respond. In dealing with the Persian Gulf, will Japan continue to follow the American lead or will it decide to take a greater degree of control and follow its own path? The likelihood is that a shaken self-confidence will make Japan more cautious and even more vulnerable. But it is interesting to look at Japanese history and realize that sometimes, and not always predictably, Japan takes insecurity as a goad to self-assertion.
This was no ordinary earthquake in magnitude or in the potential impact on Japan’s view of the world. The earthquake shook a lot of pieces loose, not the least of which were in the Japanese psyche. Japan has tried to convince itself that it had provided a measure of security with nuclear plants and an alliance with the United States. Given the earthquake and situation in the Persian Gulf, recalculation is in order. But Japan is a country that has avoided recalculation for a long time. The question now is whether the extraordinary vulnerability exposed by the quake will be powerful enough to shake Japan into recalculating its long-standing political system.
This report is republished with permission of STRATFOR

We Need Something to Lift Our Spirits Rite about Now....

Submitted by: Francis Soyer

Max Keiser on Banking updates

Frontrunning: March 3

Frontrunning: March 3

Submitted by Tyler Durden on 03/03/2011 08:06 -0500
•Why the Dollar's Reign Is Near an End (WSJ)

•Take a bow Hatzius: John Taylor takes apart Goldman's economic "achemists and quacks" (Bloomberg) - This is what happens when you sellout to the propaganda machine

•William Cohan joins the tinfoil hat brigade - A Conspiracy With a Silver Lining (NYT)

•Gaddafi strikes oil areas, Arabs weigh peace plan (Reuters)

•No criminal charges ever: Officials Disagree on Penalties for Mortgage Mess (NYT)

•Bernanke Sees 200,000 Hit to Jobs from Budget Cuts (Reuters)

•It's Taps For the Still Weakening Dollar (RCM)

•Asia Moves to Shore Up Strategic Oil Reserves (FT)

•Beijing home sales slump in February (China Daily)

•ECB Set to Deliver Inflation Warning (WSJ)

•Obama "outraged" by attack in Germany (Reuters)

•Europe Must Plan a Reform, Not a Pact (FT)

•Merkel names ally as new defence minister (FT)

•Congress Approves Temporary Budget Bill, Avoids Shutdown (BusinessWeek)

•Gross Says Treasury Yields Too Low as Fed Approaches End of Asset Buying (Bloomberg)

•Mukherjee Signals Higher Oil May Spur India Subsidy, Risk Deficit-Cut Plan (Bloomberg)

European economic highlights:
•Euro-Zone PMI Composite for February 58.2 - lower than expected. Consensus 58.4. Previous 58.4.

•Euro-Zone PMI Services for February 56.8 - lower than expected. Consensus 57.2. Previous 57.2.

•Euro-Zone GDP for Q4 0.3% q/q 2.0% y/y – in line with expectations. Consensus 0.3% q/q 2.0% y/y. Previous 0.3% q/q 2.0% y/y.

•Euro-Zone Retail Sales for January 0.4% m/m 0.7% y/y - higher than expected. Consensus 0.3% m/m 0.0% y/y. Previous -0.6% m/m -0.9% y/y.

•Germany Retail Sales for January 1.4% m/m 2.6% y/y - higher than expected. Consensus 0.5% m/m 1.7% y/y. Previous -0.3% m/m -1.3% y/y.

•Germany PMI Services for February 58.6 - lower than expected. Consensus 59.5. Previous 59.5.

•France PMI Services for February 59.7 - lower than expected. Consensus 60.8. Previous 60.8.

•Italy PMI Services for February 53.1 - higher than expected. Consensus 51.1. Previous 49.9.

•Italy PPI for January 1.1% m/m 5.2% y/y - higher than expected. Consensus 0.9% m/m 4.6% y/y. Previous 0.6% m/m 4.6% y/y.

•UK PMI Services 52.6 - lower than expected. Consensus 53.7. Previous 54.5.

•ECB Announces Interest Rates. Consensus 1.00%. Previous 1.00%.

Texaco dumped 18b gallons of toxicwaste and 17m gallons oil into Amazon waterways

(CNN) -- A judge in Ecuador this week awarded $8.64 billion to Ecuadorian residents of the Amazon who had sued Chevron for years of crude oil pollution, but both sides said Tuesday they will appeal the verdict.
Chevron charges the verdict against them is the "product of fraud," and the plaintiffs say the size of the award is too small in comparison to what would be needed to do a real cleanup.
Luis Yanza, speaking for the residents' group the Assembly of those Affected by Chevron, said at a news conference that the ruling was "historic" and a "collective victory." However, he said, "Eight billion dollars doesn't represent a significant amount to repair the environmental damages."
The judgment against Chevron is the latest in 18 years of litigation between the Amazon residents and Texaco, which was later purchased by Chevron. It was decided in a courtroom in the Amazon by Judge Nicolas Zambrano.
For its part, Chevron said it will also appeal.
"The Ecuadorian court's judgment is illegitimate and unenforceable," said Chevron, in a press release Monday. "It is the product of fraud and is contrary to the legitimate scientific evidence."
Both sides have until Friday to file their appeals.
Despite the pending appeal, one of the local leaders, Humberto Piaguaje, called the judgment a victory for the population that lives in the oil-producing area in northern Ecuador.
"The judge did justice and has seen reality," he said. "We know that this is only one part of our fight and we will continue until there is justice and the damage is healed. The world should know that what happened in the Amazon and our fight for life, for justice."
The case, Aguinda v. ChevronTexaco, was originally filed in New York in 1993 on behalf of 30,000 inhabitants of Ecuador's Amazon region. The suit was eventually transferred to the Ecuadorian court and Ecuadorian jurisdiction.
The lawsuit alleges that Texaco used a variety of substandard production practices in Ecuador that resulted in pollution that decimated several indigenous groups in the area, according to a fact sheet provided by the Amazon Defense Coalition.
According to the group, Chevron has admitted that Texaco dumped more than 18 billion gallons of toxic waste into Amazon waterways, abandoned more than 900 waste pits, burned millions of cubic meters of gases with no controls and spilled more than 17 million gallons of oil due to pipeline ruptures.
Cancer and other health problems were reported at higher rates in the area, the group says.

Chavez: U.S. distorting situation in Libya ‘to justify an invasion’

Chavez: U.S. distorting situation in Libya ‘to justify an invasion’
Catherine E. Shoichet,

CNN

March 2, 2011
Venezuelan President Hugo Chavez claims U.S. criticism of Libyan leader Moammar Gadhafi has a clear aim: military invasion.
“Let’s not get carried away by the drums of war, because the United States, I am sure that they are exaggerating and distorting things to justify an invasion,” Chavez said Monday, according to Venezuelan state media.
At a Monday meeting of the U.N. Human Rights Council in Geneva, Switzerland, U.S. Secretary of State Hillary Clinton said the United States was exploring “all possible options,” and that “nothing is off the table so long as the Libyan government continues to threaten and kill Libyan citizens.”
Asked at a news conference Monday whether the United States planned an imminent military response in Libya, Clinton said, “No.”
Speaking Monday in the Venezuelan capital, Caracas, Chavez proposed sending an international committee to Libya to mediate and help develop a peaceful solution to unrest in the North African country.
"Instead of sending Marines and tanks and planes, why don't we send a goodwill commission to try to help so that they do not continue killing in Libya? They are our brothers," he said in a speech televised on the government-run network.
Chavez and Gadhafi have a close relationship, having bonded partly over shared opposition to U.S. global influence.
At a lavish Tripoli celebration commemorating 40 years of Gadhafi's leadership in 2009, the two leaders sat side by side during a two-hour military parade. That same year, a new football stadium in Benghazi, Libya, was named after the Venezuelan leader.
As rumors swirled about Gadhafi and his whereabouts last week, some suggested that he may be en route to Venezuela. Those reports proved to be false; the Libyan leader later spoke publicly in Tripoli.
But the close ties between the two leaders remain strong. On Monday, Chavez said Gadhafi "has been my friend and our friend for a long time" in remarks broadcast on Venezuelan state television.
"We must be cautious. We know what our policy is: We do not support invasions or massacres or anything, no matter who does it. But there is no doubt that, regarding Libya, a campaign of lies is being woven -- the same that has been woven about Venezuela for a long time," he said.
The U.N. Security Council over the weekend voted for tough restrictions and possible war crimes charges against the Libyan regime.
The Security Council measures -- which include an arms embargo, an asset freeze and travel bans for Gadhafi and members of his family and associates -- also referred the situation unfolding in Libya to the International Criminal Court.
White House press secretary Jay Carney said Monday that the U.S. government was considering the possibility of imposing a no-fly zone over Libya.
"Col. Gadhafi and those around him must be held accountable for these acts, which violate international legal obligations and common decency. Through their actions, they have lost the legitimacy to govern," Clinton said Monday.
"And the people of Libya have made themselves clear: It is time for Gadhafi to go, now, without further violence or delay."