Harvey Organ, June 21, 2011
Yes, Another Crisis is Coming… and It Will Be MUCH Worse
Russia adds 200,000 oz to official reserves/Waiting on Greece's Decision
Yes, Another Crisis is Coming… and It Will Be MUCH Worse
Phoenix Capital Research
06/21/2011 - 17:18
Russia to Reduce U.S. Debt Holdings
NEW YORK (TheStreet) — A top Russian economic official says his country is likely to continue decreasing the share of its portfolio that consists of U.S. debt, according to a published media report.
"The share of our portfolio in U.S. instruments has gone down and probably will go down further," said Arkady Dvorkovich, chief economic aide to Russian President Dmitry Medvedev, according to a report on The Wall Street Journal’s Web site.
Dvorkovich made the comments on the sidelines of the St. Petersburg International Economic Forum, the report said.
Foreign countries’ interest in purchasing U.S. debt has become an important concern as the U.S. government is running large deficits and must finance them by selling Treasuries. A weakening appetite for Treasuries would drive up the cost of Washington’s borrowing.
One recent source of Treasury demand, the Federal Reserve’s QE2 program, is scheduled to come to an end later this month.
Russian holdings of U.S. Treasuries fell to $125.4 billion in April 2011 from $176.3 billion in October 2010, the Journal report noted, citing Treasury Department data.
According to the report, Dvorkovich was asked whether U.S. debt was as solid an investment now as it was a decade ago.
More…
Dear Jim,
The following article illustrates the point you have made repeatedly, that financial institutions will never allow lawsuits involving allegations of fraud over their sales of over-the-counter “OTC” Derivatives go to trial.
The transparent Manipulation of Perspective Economics (“MOPE”) that we see in this report is the statement, “For JP Morgan, the settlement amounts to less than 1 percent of the bank’s 2010 net income of $17.4 billion – which amounts to less than what JP Morgan earns in one week.” The more important fact is that JP Morgan had to agree to repay every penny invested to the investors who lost money.
The better question then becomes, how many more deals exactly like this do JP Morgan and all the other major financial entities have to worry about?
It’s a given that any SEC proceeding will be a toothless attempt to make it appear the federal government cares about fraud. What I have more trouble understanding is why we are not hearing about hundreds more civil lawsuits being brought alleging fraud and violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), which allows for the possibility of treble (meaning three times actual) damages.
My professional background includes 26 years plus experience in law and finance, and I have personally been involved in dozens of lawsuits involving allegations of fraud, unfair business practices and Civil RICO. In my professional opinion, lawsuits over the sale of complex OTC Derivatives would tend to be “slam dunks.” I literally cannot imagine how the banks would even attempt to explain to a jury the structure of these OTC Derivatives, much the less make that jury believe these instruments were either comprehensible or of any value to the parties that purchased them.
Respectfully yours,
CIGA Richard B.
JP Morgan to pay $153.6M to settle fraud charges
JPMorgan to pay $153.6M to settle civil fraud charges over complex mortgage investments Marcy Gordon, AP Business Writer, On Tuesday, June 21, 2011
WASHINGTON (AP) — JPMorgan Chase & Co. has agreed to pay $153.6 million to settle civil fraud charges that it misled buyers of complex mortgage investments just as the housing market was collapsing.
The settlement with the Securities and Exchange Commission announced Tuesday is one of the most significant legal actions targeting Wall Street’s role in the 2008 financial crisis. It comes a year after Goldman Sachs & Co. paid $550 million to settle similar charges.
As part of the settlement, investors who were harmed will receive all of their money back, the SEC said. JPMorgan also agreed to improve the way it reviews and approves mortgage securities transactions.
More…
The Emerging New Monetarism: Gold Convertibility To Save The Euro
CIGA Eric
Gold convertibility would save not only the Euro but all paper currencies. This includes the U.S. dollar. Soon the focus will turn to the legitimacy of state gold reserves.
Professor Robert Mundell urges gold convertibility for the euro, the currency which he fathered, as well as for the dollar. This is a major step forward. Thought leaders are abandoning “old monetarism,” which was vainly fixated on quantity. Even its chief proponent, Milton Friedman, acknowledged old monetarism as unsuccessful in a 2003 interview with the Financial Times. An emerging “new monetarism” is quickly taking its place — one that focuses on the quality, not quantity, of money.
Empirical data suggest that the gold dollar represents the epitome of quality. As Forbes’ own Steve Forbes advised the presidential candidates last week, the “debate should be focused on what the best gold system is, not on whether we need to go back on one.”
Source: forbes.com
More…
NEW YORK (TheStreet) — A top Russian economic official says his country is likely to continue decreasing the share of its portfolio that consists of U.S. debt, according to a published media report.
"The share of our portfolio in U.S. instruments has gone down and probably will go down further," said Arkady Dvorkovich, chief economic aide to Russian President Dmitry Medvedev, according to a report on The Wall Street Journal’s Web site.
Dvorkovich made the comments on the sidelines of the St. Petersburg International Economic Forum, the report said.
Foreign countries’ interest in purchasing U.S. debt has become an important concern as the U.S. government is running large deficits and must finance them by selling Treasuries. A weakening appetite for Treasuries would drive up the cost of Washington’s borrowing.
One recent source of Treasury demand, the Federal Reserve’s QE2 program, is scheduled to come to an end later this month.
Russian holdings of U.S. Treasuries fell to $125.4 billion in April 2011 from $176.3 billion in October 2010, the Journal report noted, citing Treasury Department data.
According to the report, Dvorkovich was asked whether U.S. debt was as solid an investment now as it was a decade ago.
More…
Dear Jim,
The following article illustrates the point you have made repeatedly, that financial institutions will never allow lawsuits involving allegations of fraud over their sales of over-the-counter “OTC” Derivatives go to trial.
The transparent Manipulation of Perspective Economics (“MOPE”) that we see in this report is the statement, “For JP Morgan, the settlement amounts to less than 1 percent of the bank’s 2010 net income of $17.4 billion – which amounts to less than what JP Morgan earns in one week.” The more important fact is that JP Morgan had to agree to repay every penny invested to the investors who lost money.
The better question then becomes, how many more deals exactly like this do JP Morgan and all the other major financial entities have to worry about?
It’s a given that any SEC proceeding will be a toothless attempt to make it appear the federal government cares about fraud. What I have more trouble understanding is why we are not hearing about hundreds more civil lawsuits being brought alleging fraud and violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), which allows for the possibility of treble (meaning three times actual) damages.
My professional background includes 26 years plus experience in law and finance, and I have personally been involved in dozens of lawsuits involving allegations of fraud, unfair business practices and Civil RICO. In my professional opinion, lawsuits over the sale of complex OTC Derivatives would tend to be “slam dunks.” I literally cannot imagine how the banks would even attempt to explain to a jury the structure of these OTC Derivatives, much the less make that jury believe these instruments were either comprehensible or of any value to the parties that purchased them.
Respectfully yours,
CIGA Richard B.
JP Morgan to pay $153.6M to settle fraud charges
JPMorgan to pay $153.6M to settle civil fraud charges over complex mortgage investments Marcy Gordon, AP Business Writer, On Tuesday, June 21, 2011
WASHINGTON (AP) — JPMorgan Chase & Co. has agreed to pay $153.6 million to settle civil fraud charges that it misled buyers of complex mortgage investments just as the housing market was collapsing.
The settlement with the Securities and Exchange Commission announced Tuesday is one of the most significant legal actions targeting Wall Street’s role in the 2008 financial crisis. It comes a year after Goldman Sachs & Co. paid $550 million to settle similar charges.
As part of the settlement, investors who were harmed will receive all of their money back, the SEC said. JPMorgan also agreed to improve the way it reviews and approves mortgage securities transactions.
More…
The Emerging New Monetarism: Gold Convertibility To Save The Euro
CIGA Eric
Gold convertibility would save not only the Euro but all paper currencies. This includes the U.S. dollar. Soon the focus will turn to the legitimacy of state gold reserves.
Professor Robert Mundell urges gold convertibility for the euro, the currency which he fathered, as well as for the dollar. This is a major step forward. Thought leaders are abandoning “old monetarism,” which was vainly fixated on quantity. Even its chief proponent, Milton Friedman, acknowledged old monetarism as unsuccessful in a 2003 interview with the Financial Times. An emerging “new monetarism” is quickly taking its place — one that focuses on the quality, not quantity, of money.
Empirical data suggest that the gold dollar represents the epitome of quality. As Forbes’ own Steve Forbes advised the presidential candidates last week, the “debate should be focused on what the best gold system is, not on whether we need to go back on one.”
Source: forbes.com
More…
Paper gold's excess raises risk of 'parabolic spike' in real gold
Gene Arensberg: Stealth bullish indicator: Who is left to sell?
Guest Post: Goldman's Disinformation Campaign: Drilling Down Into The Documents
Submitted by Tyler Durden on 06/21/2011 09:37 -0400Goldman's business model is designed around the exploitation of secrecy. Secrecy is organizing principle that governs modern credit markets. Credit default swaps, privately placed structured securitizations (e.g. CDOs), and hedge funds have all flourished-- they dominate the debt markets--because they are all designed to exploit secrecy. They all create extraordinary profits by keeping the rest of us in the dark. So in late 2006, if you wanted to find out what was happening in this newly created synthetic RMBS market, you couldn't find out much of anything. You couldn't find out anything about who bought or sold any CDO, or what was in any CDO, or how any CDO performed, unless Goldman or some other CDO underwriter deemed you sufficiently worthy of their selective disclosures. You couldn't learn anything from the sales or trading activity of mortgage bonds, because the related trading in credit default swaps was kept hidden beneath the surface. You didn't know anything about the trading activity related to the ABX indices, since that, also, was kept secret. And since the privately-held company that owned the ABX, CDS IndexCo LLC, operated in total secrecy, and since the privately-held company that published the price of the ABX, Markit Group Limited , operated in total secrecy, you had no way of knowing the extent to which the price of the ABX was manipulated through round-tripping, side deals with synthetic CDOs, or anything else. The only thing you knew, your only link to the illusory "reality " of market sentiment, was the quoted price of the ABX. And you might happen to know that the Chairman of CDS IndexCo was Brad Levy, a managing director at Goldman, which, along with a handful of other banks, controlled CDS IndexCo and Markit Group. Both the FCIC and the Levin subcommittee disclosed a wealth of information that others with a more skeptical bent can scrutinize in depth. This information poses a direct challenge to Goldman's dissembling, and to the moral hazard of access journalism, which is no substitute for the full transparency of a free and open marketplace of ideas.
Bill Gross: "College Is Worthless"
Submitted by Tyler Durden on 06/21/2011 08:33 -0400A few weeks ago we pointed out what may be the most troubling (and Marxist) observation in America's labor arena, namely that the labor's share of national income has dropped to the lowest in history as a record number of Americans now focus on wealth creation through assets (i.e. owners of capital) instead of labor. In his just released latest letter (below) Bill Gross piggybacks on this observation in what is one of the most scathing notes blasting the traditional of higher education, and in essence claiming that college, as means of perpetuating a broken employment status quo whcih redirect labor to a now-expiring Wall Street labor model, is now worthless: "The past several decades have witnessed an erosion of our manufacturing base in exchange for a reliance on wealth creation via financial assets. Now, as that road approaches a dead-end cul-de-sac via interest rates that can go no lower, we are left untrained, underinvested and overindebted relative to our global competitors. The precipitating cause of our structural employment break is both internal neglect and external competition. Blame us. Blame them. There’s plenty of blame to go around." And why college graduates have only a 6 digit loan to look forward to: "American citizens and its universities have experienced an ivy-laden ivory tower for the past half century. Students, however, can no longer assume that a four year degree will be the golden ticket to a good job in a global economy that cares little for their social networking skills and more about what their labor is worth on the global marketplace." And some very bad news for the communists in the White House and the chimpanzees in the San Francisco Fed who continue to believe that unemployment is anything but structural: "The “golden” days are over, and it’s time our school and jobs “daze” comes to an end to be replaced by programs that do more than mimic failed establishment policies favoring Wall as opposed to Main Street."
Must-read: Doug Casey predicts America's next 20 years posted by Eric De Groot at Eric De Groot - 7 minutes ago
eBay's Bullion Center Beta Another step in the transition from what the unknown barbaric commodity (phase 1) to professional accumulation (phase 2) to ultimately full blown public mania (phase 3). Increase...
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