Tuesday, March 22, 2011

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.

Friday, March 18, 2011

"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

Wednesday, March 16, 2011

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.

Tuesday, March 15, 2011

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


Thursday, March 3, 2011

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."

Hillary Clinton Says RT and Al Jazeera are embarrasing U.S. News Agencies

http://www.businessinsider.com/hillary-clinton-al-jazeera-2011-3

US Mint is cutting back on allocations of American Silver Eagles

Bill Haynes, President of CMI Gold & Silver, one of the largest dealers in the United States informed King World News today that the US Mint is cutting back on allocations of American Silver Eagles and this is resulting in higher premiums. Haynes told KWN in a phone interview, “Today the US Mint notified its eleven authorized purchasers that their allotments are being reduced and as a result the authorized purchasers increased their premiums to the dealers.”


Bill Haynes continues:
“Eric, the Mint sold about 10 million ounces of American Silver Eagles so far this year, 6.4 million in January and about half that in February. The Mint had no problem producing those record quantities, but now the US Mint is cutting allocations to its authorized distributors. There is a glitch somewhere but we just don’t know what it is.”
King World News also contacted the US Mint today to get a direct comment from them regarding a story that they had suspended production of Silver Amercan Eagles. As it turns out this information which was taken off of the US Mint’s website is over a year old. In a telephone interview with King World News Michael White of the US Mint stated, “This language was on our web site over a year ago when we did not produce American Eagle Silver Uncirculated Coins. The site will be updated shortly.”


We will have to wait and see what the update is from the US Mint, but we do know that Bill Haynes, a veteran of nearly four decades in the gold and silver business has confirmed a reduction in allotments of Silver American Eagles and an increase in premiums.

Ron Paul: Fall of the Federal Empire

Ron Paul: Fall of the Federal Empire


7 hours ago - FOXBusiness 8:43
1083 views

Congressman Ron Paul, (R-Texas), on Bernanke?s testimony on the Hill and what the future will be for the Arabs in the Middle East.

http://finance.yahoo.com/video/economy-18773128/ron-paul-fall-of-the-federal-empire-24394905

Board Member of Goldman Sachs and Procter & Gamble Charged in Insider Trading Scheme

Board Member of Goldman Sachs and Procter & Gamble Charged in Insider Trading Scheme


FOR IMMEDIATE RELEASE

2011-53

Washington, D.C., March 1, 2011 – The Securities and Exchange Commission today announced insider trading charges against a Westport, Conn.-based business consultant who has served on the boards of directors at Goldman Sachs and Procter & Gamble for illegally tipping Galleon Management founder and hedge fund manager Raj Rajaratnam with inside information about the quarterly earnings at both firms as well as an impending $5 billion investment by Berkshire Hathaway in Goldman.
The SEC’s Division of Enforcement alleges that Rajat K. Gupta, a friend and business associate of Rajaratnam, provided him with confidential information learned during board calls and in other aspects of his duties on the Goldman and P&G boards. Rajaratnam used the inside information to trade on behalf of some of Galleon’s hedge funds, or shared the information with others at his firm who then traded on it ahead of public announcements by the firms. The insider trading by Rajaratnam and others generated more than $18 million in illicit profits and loss avoidance. Gupta was at the time a direct or indirect investor in at least some of these Galleon hedge funds, and had other potentially lucrative business interests with Rajaratnam.