Friday, March 30, 2012
Tuesday, March 27, 2012
On the Monday, March 26 edition of the Alex Jones Show, Alex talks with Gerald Celente about Jon Corzine and the MF Global case. The former Goldman Sachs boss Corzine faces legal liability after he ordered money from the segregated accounts of clients transferred to a U.K. account as his brokerage neared collapse.
Gerald Celente is a renowned trend forecaster, publisher of the Trends Journal, business consultant and author. He lost six figures to Corzine and MF Global last November. A memo released by the House Financial Services subcommittee contradicts Corzine's claim, made under oath before Congress, in which the former New Jersey governor claimed, "I did not instruct anyone to lend customer funds to anyone." $200 million dollars in customer funds, part of a $1.6 billion in client money that disappeared, was sent to MF Global's account with JP Morgan by direct order of Corzine, the email reveals. "The memo released Friday details an email by Edith O'Brien, an assistant treasurer at MF Global, saying the transfer last October 28 "per JC's direct instructions" would cover an overdraft in the London account of JPMorgan Chase. "JC" stood for Corzine," reports Politico.
The fact that the email proves Corzine lied under oath, as well as violating securities law, was almost instantaneously met with an aggressive establishment media effort to defend Corzine, with both the New York Times and Time Magazine claiming Corzine did not know the money was from customer accounts and that the O'Brien email "was not a smoking gun". To claim that an internal MF Global email which directly implicates Corzine as the instigator behind a transparent attempt to steal customer funds is "not a smoking gun" is a manifestly ludicrous assertion to make.
Monday, March 26, 2012
Friday, March 23, 2012
Thursday, March 22, 2012
A 24-hour walkout in Portugal has brought the capital Lisbon to a virtual standstill. The action, which began at midnight, is in protest at austerity measures and labour reforms introduced by the government as a condition for a 78-billion-euro bailout.
The country is facing its worst recession since the 1970s but strikers say the reforms go too far. Underground worker Hilda Bernadette said the measures demanded by the European Union, the International Monetary Fund and the European Central Bank include cutting Christmas and holiday bonuses and amount to losing two months salary a year.
Portugal's second biggest union, the UGT, has agreed to the reforms and hasn't joined the action, so in some ways today is a test as to whether the main union, the CGTP, has sway beyond its membership. Its leader, Armenio Carlos, says the fight is on two fronts: firstly to protect the rights that already exist and also to ensure they remain for future generations.
One of the biggest effects of the action may be stopping those who have jobs from getting to work. But unemployment in Portugal is now at 14 percent with the economy expected to shrink by another 3.3 per cent this year.
In this episode, Max Keiser and co-host, Stacy Herbert, discuss the great 'unbanked' masses dumping gold believing in a 'recovering economy' and an end to money printing while banks and insiders buy gold and mortgage backed securities in preparation for more quantitative easing by the Fed.
In the second half of the show Max talks to Mark Melin of Uncorrelated Investments about MF Global, JP Morgan and the future of the futures market. They also discuss the Charles Manson's of the futures industry and the branch office of the too big too fail banks formerly known as the SEC.
Wednesday, March 21, 2012
Tuesday, March 20, 2012
The US GOP is out with a new budget for the US, yet missing from the budget's graphics of what's adding to the debt is defense spending, which makes up more than 50% of discretionary spending in the United States. We break through the PR and the wool the establishment is trying to pull over our eyes, from MF Global to the Too Big to Fail Banks, to the Federal Reserve.
We speak with trends forecaster Gerald Celente. On that note, Federal Reserve Chairman Ben Bernanke started his college lecture series today. Is he indoctrinating America's college students, trying to initiate them in the cult of support for the Fed? Is he attempting to set the narrative and re-write history? We discuss with Gerald Celente.
And today the muppets received a star on the Hollywood Walk of Fame, getting much better treatment than the real life ones get at Goldman Sachs, according to Greg Smith. More Goldman alumni have come forward about the firm's "muppet" treatment. We give you the round up of them as Mayor Bloomberg comes to the firm's defense and weighs in on "God's work."
Thomson Reuters GFMS's Philip Klapwijk presented his views on gold, silver, platinum and palladium at the Mines & Money conference in Hong Kong
Speaking at the start of the Key Commodities Summit preceding the first full day of Mines& Money Hong Kong, Philip Klapwik, Global Head of Metals Analytics for Thomson Reuters GFMS, gave a positive assessment on precious metals prices for 2012, despite the recent volatility in the sector.
Given that gold is so dominant by value in terms of investment inflows into precious metals (around 87% compared with 11% for silver, 2% for platinum and less than 1% for palladium), Klapwijk devoted the major part of his presentation to the yellow metal.
Overall, he was positive relating to its price prospects this year. However, he did comment that there was the possibility that the price might yet test $1,600 on the downside before peaking perhaps at around $2,000 and averaging $1,800 over the year.
GFMS analysis suggested that global gold supply is increasing again after a bit of a hiatus. While much of the current supply increase relates to higher scrap sales, we are also seeing what he described as a secular increase in gold mine production as the higher gold prices have stimulated exploration and new mine development more than countering the declines in output from the world's older gold mining operations.
While gold supply is increasing, the key areas of demand - notably in jewellery - are seeing a fall. Significantly higher gold prices have led to a downturn in jewellery demand, although perhaps not to the extent that might have been expected given the sharpness of the price increases over the past few years. He did expect, however, this decline in jewellery demand to continue this year, thus widening the already big gap between supply and demand.
While for other commodities one might expect this to lead to a sharp reduction in price, Klapwijk commented that gold is no ordinary commodity and that prices are sustainable despite the big supply surplus as long as investment demand, which GFMS sees as balancing the books, continues at current levels or even higher - and Klapwijk and GFMS do see this continuing with perhaps as much as $120 billion of investment purchases going into gold in 2012.
As the other major investment metal in the precious metals complex, GFMS and Klapwijk are also mildly positive on silver this year too. Silver has been one of the best performers in recent years, but has also proved to be more volatile than gold or the pgms which makes it a more risky investment.
Again, silver supply is seen as having been increasing, resulting in similar supply surplus parameters in percentage terms to those of gold.
Nevertheless, investment demand for silver has also remained strong, soaking up the supply surplus. For Silver Klapwijk predicts a possible high of $45.05 this year and an average of $34.05 - which presupposes that there could be a downside possibility of $26.85 in the short term which would likely coincide with any downturn in the gold price. $50 silver this year, however, as some have predicted, he described as "a bit of an ask!"
Platinum supply has also been growing, although that from major producer, South Africa, has only been increasing very modestly due to some well documented labor and safety issues among others. Demand growth though has also been lackluster given the main growth in car manufacture is in the emerging markets where petrol (gasoline) engines are dominant for which autocatalysts are largely palladium based. Even in the diesel sector substitution for platinum in autocatalysts is beginning to be seen limiting growth in this market too.
But despite these seemingly adverse factors affecting platinum, Klapwijk felt that price downside was relatively limited as the marginal production price in South Africa in particular is not too far below current price levels.
Despite platinum recently having reasserted a price premium over gold, after slipping below it, from Klapwijk's price projections for 2012 it looks like there is the prospect of it falling back below gold again, although this was not specifically stated. The projected price range for 2012 is seen as ranging from a prospective low of $1405 to a possible high of $1885 and an average over the year of $1620 - all below the similar price projections for gold!
Palladium has been the underperformer amongst the precious metals if one looks at the period of the overall precious metals bull market since 2001. However conversely it has actually been one of the best performers over the past two years. Fundamentals are seen as relatively strong longer term, but Klapwijk expects volatility in 2012. At times a basic supply shortage has been exacerbated by investment demand although this has fallen away somewhat of late. Price projections for 2012 were seen as a possible high of $800 an average of $735 and a possible low of $590.
March 20, 2012
Monday, March 19, 2012
Conference hosted by Cambridge House International
The country's economy is expected to grow by seven per cent in 2012, a percentage low by recent standards but higher than most around a recession hit world.
Saturday, March 17, 2012
In this episode, Max Keiser and co-host, Stacy Herbert, discuss ripping out client eyeballs and losing millions for a free breakfast; maggots of risk and plastic financial apartheid.
In the second half of the show Max talks to filmmakers William Gagan and Geoff Shively about their crowd funded journey to Syria and 'fake' activists and, with the introduction of anti-free speech laws in Chicago, the filmmakers discuss the small drone helicopters they have acquired for reporting on the NATO summit.
In this edition of the show Max interviews Chris Martenson from chrismartenson.com. He talks about the ways Japan could be the next black swan in face of the global economic crisis.
Chris Martenson is a former American biochemical scientist and Vice President of Pfizer. Currently he is an author and trend forecaster interested in macro trends regarding the economy, energy composition and environment.
Friday, March 16, 2012
Thursday, March 15, 2012
Welcome to Capital Account. Bad news for underwater home owners -- foreclosure filings in february point to a rising tide in home seizures ahead, according to those who track it. Why? That 25 billion dollar mortgage settlement between states and the banks may be to thank. We'll tell you why and look at what this means. Banks may be stressed in the wake of the Goldman Sachs Greg Smith op-ed, but should more of us be stressed? And I'm not talking about the results of the test, I'm talking about the methodology and the assumptions that go into it. What effect does litigation risk have on the valuation and future capitalization of banks like JP Morgan (in the case of Bear Sterns) and Bank of America (in the case MBIA)? We have risk analyst Christopher Whalen, managing director of Tangent Capital Partners, with us to talk about it. We discuss not only the concerns over litigation, and what effect it could have on the banks balance sheet's, but we also get into the housing market, and the effect that an economic downturn could have on the value of portfolio's heavily exposed to this sector.
We also ask Chris Whalen to give us his thoughts on the assumptions used in the Federal Reserve's most recent stress test, and if he thinks there is some alternative motive at play that could be responsible for the soft assumptions used. In addition, we ask Mr. Whalen what he thinks of Zero Interest Rate Policy (ZIRP) and if this, besides being detrimental to savers, has actually been hurting the banks long term.
Wednesday, March 14, 2012
A dispute over rare metals which has been building for years has come to a head: China has been challenged for restricting its exports. It provides 97 percent of the global output. The US, EU and Japan have fired off a formal complaint with the World Trade Organisation (WTO).
The objection includes lower prices for Chinese manufacturers. Foreigners pay up to twice as much, yet cannot shop elsewhere. As in Brussels and Tokyo, the White House said Beijing must play fair. President Obama said: "American manufacturers need to have access to rare earth material which China supplies.
Now, if China would simply let the market work on its own, we'd have no objection. But their policies currently are preventing that from happening, and they go against the very rules that China agreed to follow."
The rare earths case is the first to be jointly filed by the European Union, the United States and Japan. Rare earths are crucial for the defence, electronics and renewable-energy industries. Beijing set an export quota of 30,258 tonnes in 2011, but it shipped only 16,861 tonnes last year, official data shows.
Export prices over the past two years have quadrupled, encouraging buyers to shift operations to China Beijing said the complaint was unfair and that it would defend itself in the WTO, citing environmental and supply control problems. A Chinese Foreign Ministry spokesman said: "Exploiting rare earths effects the environment. China is implementing some management policies governing the environment and resources, working on sustainable development. We believe these policies are in line with WTO rules."
The centre of Paris is not the best place to buy petrol, as hypermarkets are far away in the suburbs and a lack of competition means some filling stations are gouging motorists mercilessly.
However, all over Europe consumers are groaning at the spiralling petrol and diesel costs, even if not everywhere is facing Parisian prices. "2.02 euros for a litre of 95 unleaded? It's too much...it keeps going up, it doesn't stop. Where's it going to end?" said one commuter, and he was riding a thrifty moped.
The disparity between the price of a litre of oil and a litre of refined fuel is enormous, and mostly because of taxes, which will not fall as long as governments are strapped for cash. Then there are supply-side problems. Non-OPEC producers are struggling to increase production, and OPEC itself has little spare capacity.
Lead producer Saudi Arabia is already pumping nearly 10 million barrels a day, a near 30-year peak in output.
China's leadership says it will introduce economic reforms and allow its currency to float to bolster growth. It came at the country's annual parliamentary session.
Prime Minister Wen Joabao said Beijing had to cut its growth target from 8% to 7.5% in order to meet economic challenges. He also indicated greater flexibility in the Yuan: "The exchange rate might have reached an equilibrium, we'll continue to push forward on the exchange rate," he said.
The government believes lower growth will allow China to reform key price controls, without causing a surge in inflation. That should guarantee a steady flow of credit to small and medium-sized firms that Beijing wants to see flourish as part of broader economic and political reforms. Wen and President Hu Jintao are stepping down next year and are anxious to ensure economic stability as maintained amid a transition to a new generation of leaders.
Tuesday, March 13, 2012
Estate agents in France claim that despite the crisis in the eurozone, sales of luxury properties in Paris are beating all records and selling for record prices too. "In 2011, we realised a 34 percent increase in sales compared to 2010.
Brazilians, Russians, buyers from the Middle East, these are the key players who take an interest in these properties," Paulo Fernandes from Sotheby's International Realty, told euronews. In recent months, many other estate agents say they have seen a clamber for luxury property in Paris, which has caused average prices to increase around 17 percent. Half the buyers are foreigners, they say. "Throughout history, real estate has been a safe haven and many foreign customers, who come to invest, see Paris is a safe bet," added Fernandes.
After record sales last year, property agents say they hope that 2012 will be just as promising. One apartment with a fantastic view of the iconic Eiffel Tower is on the market for 46 million euros or 60,000 euros per square metre.
Monday, March 12, 2012
Does the US imperial machine manufacture weapons in order to confront new threats, or does it manufacture threats in order to sell new weapons? We try to answer that questions and more on today's Capital Account with ex-CIA agent Michael Scheuer as the UN security council votes to extend its mission in libya, and as America's oldest active duty warship leaves for its last deployment to Iran and Syria.
We look at the economics of war and ask Michael Scheuer what he thinks is at stake for America if it were to attack Iran and what he thinks is really driving the policy to bomb that country. What are the malign interests at work here, and who really stands to benefit from an attack on Iran? What is Israel's role in all of this, and what is the likelihood that an attack would put the US at greater risk of a terrorist attack? And as the US budget deficit is released for february at close to 232 billion dollars, reportedly the highest ever, how can anyone with half a brain separate America's growing indebtedness from a bloated military budget that takes up more than 50% of discretionary spending.
We'll look at defense's drain on the American economy. Could this money be better spend elsewhere, and who really benefits from our military and oil subsidies? And though few may be aware of it, today is reportedly the 10th anniversary of the US anti-terror color-coding system. Remember that? It was phased out last year, but now, there's a new warning system that is being tried out. We dub it "Terror Warning System 2.0," and it features a very special actor -- Nicholas Cage -- who the government thinks could help raise the bar when it comes to "fear and loathing" in the heartland. We cover this with Demetri, Lauren and Shannon in our "Loose Change" segment.
Spain is not yet the new Greece but it is raising some eyebrows in Brussels. Mariano Rajoy's new government has admitted it will miss a deficit goal agreed in the new fiscal pact to which Spain is a signatory.
Madrid is hoping to avoid being penalised as it thinks Brussels will recognise the efforts it is making to confront its problems. Spain's target deficit this year will be 5.8 percent of GDP as opposed to the agreed 4.4. Its economy is predicted to shrink by 1.7 percent and unemployment has gone up to 24 percent - the highest in the EU.
The problems are crystallised in Peleas de Abajo, Spain's most indebted village. The town hall has borrowed around 5m euros - about 20,000 euros per resident. Villager Emilio Rivera said: "The debt's been there for years and to sort it out now is impossible. If we can't get the government to help us out of this crisis it will be impossible. We didn't do anything about it until now because we didn't realise how much debt we were in."
Saturday, March 10, 2012
In this edition of the show Max interviews Steve Keen from DebtDeflation.com. He talks about the Australian economy and the housing sector bubble bursting in Australia, Canada, UK and Hong Kong.
Steve Keen is Professor of Economics & Finance at the University of Western Sydney, and author of the popular book: Debunking Economics - Revised and Expanded Edition: The Naked Emperor Dethroned? Steve predicted the financial crisis as long ago as December 2005, and warned that back in 1995 that a period of apparent stability could merely be "the calm before the storm".
His leading role as one of the tiny minority of economists to both foresee the crisis and warn of it was recognized by his peers when he received the Revere Award from the Real World Economics Review for being the economist who most cogently warned of the crisis, and whose work is most likely to prevent future crises.
Friday, March 9, 2012
Athens has clinched a critical bond-swap deal with private creditors allowing Greece to narrowly escape default, opening the door for a bailout injection.
Eurozone members were quick to rejoice what they called a major step to rescuing the debt-ridden country. But the parachute provides little optimism for the Greeks whose financial woes continue to snowball, as Tom Barton reports.
The government says well over 80 percent of private creditors have backed a plan that leaves the path clear for a new international bailout worth 130 billion euros from the EU, ECB and IMF.
It aims to use the law to force unwilling investors to participate. In parliament the Finance Minister Evangelos Venizelos said it was a historic day for the people and the national economy. The deal had an extremely high degree of success and exceeded all expectations, he said. "The Greek people will understand that the debt swap deal is the best and most efficient method to solve the economy's problems."
In order to cut the national debt drastically, private investors are accepting huge losses in exchange for new bonds. Greece now looks ready to receive the first batch of bailout funds.
Thursday, March 8, 2012
Without Greece achieving its bond swap deal the eurozone's financial system could be destabilised and the euro undermined. So vital it is to Greece's financial future that the Athens government will use "collective action clauses" a legal means to enforce the deal on all holders of its outstanding debt that is regulated by Greek law.
Major banks and pension funds have supported the debt swap but when they trade in their bonds for new ones it means they will take losses of as much as 74 percent on the value of their investments. With the deal Greece will get out of repaying over 100 billion euros of the money it borrowed.
The European Central Bank is exempt from participating in the bond swap. Bank President Mario Draghi defended that on Thursday saying it was in the "public interest".
Wednesday, March 7, 2012
One woman taking part in rally in Cologne said: "Yes, we are angry because we are always working and have to work much harder now with fewer people, so we want more money." A man at the same demonstration said: "Those who are working, don't get the money, but those on the top, they get all the money in their pockets. I am against this."
The country's largest public service union called on its members to strike after pay negotiations collapsed last week. The action hit transport, causing problems for commuters in several cities.
Tuesday, March 6, 2012
In this video podcast, Frank Holmes, CEO and chief investment officer of US Global Investors, and the GoldMoney Foundation's Dominic Frisby talk about China, the gold price and oil. Holmes points out that the very negative sentiment towards China is not justified by the facts. For instance he explains that in contrast to the US most houses have been paid with minimum down payments of 30% or 50%. In an effort to slowing down the housing market and tame inflation, the Chinese also introduced policies that one can only buy one house. In his opinion the talk about ghost cities is also grossly exaggerated. The modern train system is only one example of the remarkable developments in China which are often overlooked.
Talking about gold Holmes explains the "love trade" and the "fear trade". The "fear trade" is mainly driven by G7 countries offering negative real interest rates which leads to wealth confiscation for savers which drives people towards gold. The other big factor for the gold demand is caused by the rising GDP in emerging economies. This "love trade" is also responsible for golds seasonal patterns which closely correlate with religious and new year holidays around the world. Holmes explains that new highs often occur when those two forces converge. While he expects more sideways consolidation for the gold price in the near term he is certain that prices will rise over the long term as he can't see governments in the developed world implementing harsh fiscal cuts.
Monday, March 5, 2012
Trevor Williams, Chief Economist at Lloyds Bank Corporate Markets, explained the problem: "They borrowed heavily. Internationally flows of money into Iceland were huge, they used that money to leverage, they bought a lot of assets overseas, these assets fell dramatically in value, which meant that they couldn't cover their liabilities so they were effectively insolvent and bankrupt."
Haarde denies the charges and told the court: "None of us realised at the time that there was something fishy within the banking system itself, as now appears to have been the case."
The intention is to reduce the country's dependence on exports and foreign investment. China's chief economic planner, Zhang Ping, said the long-term upward fundamentals for Chinese economic growth have not changed. But the Director General of China's National Development and Reform Commission added that they have set the growth target at 7.5 percent, down from last year's 9.2 percent growth rate, because they want to "slow down economic growth a little bit" and better implement and speed up reforms.
The 7.5 percent target is down from the longstanding eight percent goal which China's economic growth has repeatedly exceeded. It slowed only during the 2008-2009 global financial crisis and last year from the euro area debt crisis and a sluggish US economy. GDP was 10.4 percent in 2010.
Sunday, March 4, 2012
Friday, March 2, 2012
Iran's election is taking place as its people suffer increasing economic hardship from international sanctions. President Mahmoud Ahmadinejad cut subsidies for fuel and food in 2010 to reduce state spending and to make Iran less vulnerable to any sanctions on fuel imports. Critics said the move stoked inflation and increased prices.
IMF figures have Iran's economic growth at 2.5 percent last year with annual inflation at 22.5 percent. Iran's exported around 78 million euros worth of oil and gas last year.