The French "Dexia Moment" - France Nationalizes Its Second Largest Mortgage Lender

September has arrived which means for Europe reality can, mercifully, return. First on the agenda: moments ago the French government suddenly announced the nationalization of troubled mortgage lender Credit Immobilier de France, which is also the country's second lagrest mortgage specialist after an attempt to find a buyer for the company failed. "To allow the CIF group to respect its overall commitments, the state decided to respond favourably to its request to grant it a guarantee," Finance Minister Pierre Moscovici said according to Reuters. What he really meant was that in order to avoid a bank run following the realization that the housing crisis has finally come home, his boss, socialist Hollande, has decided to renege on his core campaign promise, and bail out an "evil, evil" bank. Sadly, while the nationalization was predicted by us long ago, the reality is that the French government waited too long with the sale, which prompted the Moody's downgrade of CIF by 3 notches earlier this week, which in turn was the catalyst that made any delay in the nationalization inevitable. The alternative: fears that one of the key players in the French mortgage house of cards was effectively insolvent would spread like wildfire, leading to disastrous consequences for the banking system. End result: congratulations France: your Fannie/Freddie-Dexia moment has finally arrived, and the score, naturally: bankers 1 - taxpayers 0. 

The Bernank should return the Fed to its golden roots...

by James Grant, The Washington Post:
More important than anything that Ben Bernanke might say in his long-awaited speech Friday in Jackson Hole, Wyo., is the thing he won’t say, but should.
Positively out of bounds for the chairman of the Federal Reserve is the admission that he is in the wrong line of work. The institution he leads was created to conduct a central banking business. But Congress and he have steered it into the central planning business. In so doing, the Fed has exchanged a job it could do for one it can’t.
When the Fed opened its doors in 1914, its job was to lend against sound collateral to solvent banks and to protect the value of the dollar. The Founders gave no thought to empowering their brainchild to steer the course of the economy. The future would take care of itself if the dollar were sound and the banks were solvent, they reasoned. As for the dollar, it was legally defined as a weight of gold. You couldn’t just materialize it.
Read More @ The Washington Post.com

MOST DISASTROUS ECONOMIC EVENT IN US, GOLD STANDARD, MARKETS & MORE

from KingWorldNews:
The most disastrous thing economically that happened in this country, happened in August of 1971, when they came off the gold exchange standard, whereby foreign governments and others could come in and present dollars and request gold.
When they went off that (the gold standard) there was no more discipline or control. That is what led to the huge inflation we saw in the 70s, and gave us a very spotty market. Volcker managed to wring most of that inflation out, very painfully. Now we are liquidating the debt of the housing bubble, and even some remaining debt from the dot com bubble.
LISTEN NOW @ KingWorldNews.com


The Funnies

Spot The Odd One Out: Fire, Complexity, Debt

  The BOE's Andrew Haldane is shocked SHOCKED, that over the past 30 years banks have done nothing but baffle with bullshit; and he has something to say about it. Quite a bit to say about it in fact, in his latest missive entitled "The Dog and The Frisbee" which was presented at J-Hole today, as he looks at 'why less is more - except in finance where 'more is more'', 'ignorance is bliss', and most importantly, 'the costs of cognition'. His conclusion is the following very sensible statement... "Modern finance is complex, perhaps too complex. Regulation of modern finance is complex, almost certainly too complex. That configuration spells trouble. As you do not fight fire with fire, you do not fight complexity with complexity. Because complexity generates uncertainty, not risk, it requires a regulatory response grounded in simplicity, not complexity." ...and yet, coming from a central bank, we feel this statement may be a little disingenuous; because while fire and complexity apparently comply with logic and common sense (as far as not being able to fight it with itself), debt is in a category of its own.

It Is Time For The Ron Paul Revolution To Move Beyond Politics

In the lead up weekend to the RNC convention, Tampa, Florida was awash in political electricity. The ideal of democratic participation, the feeling of rejuvenation and community, joining the ranks of one’s ideological brethren to charge into intellectual combat for the future of our nation. Unfortunately, some were well aware that the Republican convention was a farce, and knew full well what the end result would be for the Ron Paul campaign. It has become clear that Benton and others have been “handling” Ron Paul for a considerable portion of his campaign and attempting to divorce him from the elements of the movement which are seen as “extreme” or anti-establishment, even though these are the same elements that catapulted Ron Paul into the minds of average Americans. Sadly, this is the ultimate weakness of the political ideal. The cold hard fact is; some men are not men.  Some men are monsters, and reason is the last thing that will ever sway them… All in all, it is not a bad time to be a champion of the Constitutional philosophy, and the existence of such a movement gives me enduring optimism.  I do not “think” we will prevail; I KNOW we will prevail. It is time to take matters into our own hands.

RNC War on US Democracy! – Dear Ron Paul it is Time for a 3rdPartyRevolution!

from EX0MATRlXTV :

Demand for Romney Disqualification Growing. Rampant Fraud well documented.
Concern to the Pentagon and U.S. Armed Forces are allegations contained in an 11th hour lawsuit that Republican Presidential Candidate Mitt Romney and Republican National Chairman Reince Priebus conspired and continue to conspire in an organized crime racket to steal the office of United States Presidency and Commander in Chief.
As the Romney Campaign went from state to state breaking people’s bones, rigging voter machines and closing down meetings they forget the most damming courtroom evidence of the 21 century – cell phones are video cameras. These videos form a forensic chronological evidence folder of hard fact videos that neither Mitt Romney nor Republican Chairman Reince Priebus can refute and will likely result in the disqualification of Mitt Romney. Felony convictions can result in serious prison sentences.

SUPPORT: If you saw any fraud at a voting precinct, congressional meeting, county meeting or state convention please contact: ElectionFraudRemedy.com

Feds end probe of ‘America’s toughest sheriff’ Joe Arpaio; NO CHARGES

from NBC Newws:
The federal government has closed a criminal probe of alleged financial misconduct by Arizona lawman Joe Arpaio, who styles himself as “America’s toughest sheriff,” and no charges will be filed, the U.S. Attorney’s Office said on Friday.
A separate federal investigation relating to allegations of civil rights abuses by Arpaio’s office is continuing.
The announcement on Friday marked the end of an investigation that began in November 2010 at the behest of the Maricopa County Board of Supervisors to examine alleged financial improprieties by the county sheriff and his deputies.
A federal criminal inquiry into several of those matters was concluded last summer with the U.S. Attorney’s Office in Arizona declining to initiate criminal charges.
Maricopa County authorities were informed on Friday that federal prosecutors had likewise declined to bring charges in connection with allegations that the sheriff’s office had misused county credit cards or misspent money from jail facilities excise taxes.
Read More @ NBC News

Hedgies Fade The Rally As 'Flows' Dominate Positioning

Only 17% of credit managers (real or leveraged) expect notable widening in spreads (a rise in risk) by year-end, according to Citigroup's most recent client survey. This increasingly extreme bullish sentiment seems dominated by the trend of inflows into real-money accounts (which have chased high-beta, high-yield, and peripheral exposure) whereas hedge funds have used this most recent rally to reduce exposure to the peripheral, notably limited their HY exposure, increased their leveraged loan (secured credit) positioning, and increased core exposure. There remains an over-arching belief that the trend in flows will continue and that these flows will dominate market movements - however, the divergence between European bank and high-yield credit exposures (real-money getting longer, leveraged money reducing/getting short) is as dramatic as it as ever been. The last time we saw such a bull/bear divergence between real- and leveraged-money was at the bottom in Q1 2009 (but that time real-money was short and hedgies were adding longs - and were right!) Although most will say "being bearish about September is so consensus", we doubt that many are positioned that way.



As I Have Told You For Over 3 Years...They Will Print Money To Infinity And Beyond...
BTFD...and Keep Stacking...

Fed’s Williams backs open-ended QE3, eyes $600 billion

from Reuters:

More easing from the Federal Reserve would help boost the U.S. economic recovery and keep the labor market from stalling out, a top central bank policymaker said as he called for a round of bond purchases that could eventually top $600 billion.
San Francisco Federal Reserve Bank President John Williams said on CNBC television the Fed’s two quantitative easing programs have had benefits and argued the central bank should be moving toward an “open-ended” QE3 that would not be limited by a dollar value.
“Additional monetary accommodation would be very useful to boost the economy, speed the recovery along somewhat, and help get unemployment moving toward its full employment goal over the next few years,” Williams, a voter this year on Fed policy, said from a central bankers’ conference in Jackson Hole, Wyoming.
“I am concerned that we could be stalling at the current high level of unemployment.”
In a separate interview with Bloomberg TV, Williams said he would argue for a series of purchases that would eventually rival the $600 billion size of the Fed’s second round of bond purchases.
Read More @ Reuters



Jim Sinclair’s Commentary

The continuing minus for the dollar as the international settlement currency is getting too close to home. Are Canada and Mexico next?

China, Germany plan to settle more trade in yuan, euros Thu Aug 30, 2012 1:23am EDT
Aug 30 (Reuters) – Germany and China plan to conduct an increasing amount of their trade in euros and yuan, the two nations said in a joint statement after talks between Chancellor Angela Merkel and Chinese Premier Wen Jiabao in Beijing on Thursday.
"Both sides intend to support financial institutions and companies of both countries in the use of the renminbi and euro in bilateral trade and investments," said the text of the statement.
It also said that both parties welcomed investments in China’s interbank bond market by German banks and supported the settlement of business in the yuan by German and Chinese banks and the issuance of yuan-denominated financial products in Germany.
More…




Jim Sinclair’s Commentary

My congratulations to Jim Rickards on Bloomberg this week. He handled himself as a perfect gentleman, and excellent spokesperson for gold.
They found some wet behind the ears kid just out of diapers to argue monetary history with Jim. I would have lost it, and punched the little shit in the mouth.
Click here to watch the video…

 

Jim’s Mailbox

September 1, 2012, at 6:52 pm
by Jim Sinclair

Dear Jim,
I have to agree with you that gold is being groomed for an important role post crisis in the monetary system.
The following can be reviewed in whole at the below URL.
Regards,
CIGA JB Slear
Precious Metals Delivery Man

DEPARTMENT OF THE TREASURY Office of the Comptroller of the Currency 12 CFR Part 3 Docket ID OCC-2012-0009
RIN 1557-AD46
FEDERAL RESERVE SYSTEM 12 CFR Parts 208, 217, and 225 Regulations H, Q, and Y
Docket No. R-[XX]
RIN [XX]
FEDERAL DEPOSIT INSURANCE CORPORATION 12 CFR Part 324
RIN 3064-AD96
As proposed, financial collateral would mean collateral in the form of: (1) cash on deposit with the banking organization (including cash held for the banking organization by a third-party custodian or trustee); (2) gold bullion; (3) short- and long-term debt securities that are not resecuritization exposures and that are investment grade; (4) equity securities that are publicly traded; (5) convertible bonds that are publicly traded; or (6) money market fund shares and other mutual fund shares if a price for the shares is publicly quoted daily. With the exception of cash on deposit, the banking organization would also be required to have a perfected, first-priority security interest or, outside of the United States, the legal equivalent thereof, notwithstanding the prior security interest of any custodial agent. A banking organization would be permitted to recognize partial collateralization of an exposure.
11. Other Assets
In this NPR, the agencies propose to apply the following risk weights for exposures not otherwise assigned to a specific risk weight category, which are generally consistent with the risk weights in the general risk-based capital rules:
(1) A zero percent risk weight to cash owned and held in all of a banking organization’s offices or in transit; gold bullion held in the banking organization’s own vaults, or held in another depository institution’s vaults on an allocated basis to the extent gold bullion assets are offset by gold bullion liabilities; and to exposures that arise from the settlement of cash transactions (such as equities, fixed income, spot foreign exchange and spot commodities) with a central counterparty where there is no assumption of ongoing counterparty credit risk by the central counterparty after settlement of the trade and associated default fund contributions;
More…

Alert: Fukushimia Cooling Water Drops in 3 Reactors: TEPCO has NO IDEA WHY

from NibiruMagick2012:

Cooling water in nuclear reactor units 1 2 3 drop BELOW 10 Percent of “cold shutdown” levels and TEPCO has NO IDEA WHY. Genetic Defects/Mutations from radiation to be studied with (of ALL People: the IAEA!) good luck getting real results any time ever.

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A Bunch Of Big Advisers At Morgan Stanley Might Leave The Firm For A Totally Embarrassing Reason

by Linette Lopez, BusinessInsider:
This just looks bad on Morgan Stanley.
Reuters reports that around 40-48 advisers at the bank (who run tens of billions of dollars) are thinking of leaving the firm because of “widespread technology problems that have made it difficult to do their jobs.”
They’re so serious about this that they hired a lawyer to help them work out a deal so they can keep their pensions. They even allegedly wrote a letter to CEO James Gorman.
Not that Gorman hadn’t been warned. Another adviser close to him tipped him off about the group’s unhappiness, saying that they were facing problems ranging “from trading delays and problems with foreign currency transactions to inaccurate account statements and bounced checks,” says Reuters.
Morgan Stanley is basically denying this whole thing though. Morgan Stanley spokesman James Wiggins said brokers have been complaining about new technology, but had no knowledge of specific people who wanted to leave.
Read More @ BusinessInsider.com

U.S. Government Pressures Pakistan on Mumbai Terror Group

by Sebastian Rotella, Pro Publica:
The Obama administration’s decision to designate the leadership of Pakistan’s Lashkar-e-Taiba group as terrorists this week sends a pointed, if largely symbolic, message to a Pakistani government that remains unable or unwilling to crack down on the extremist organization.
On Thursday, the Treasury Department issued an order against eight Lashkar leaders that prohibits Americans from doing business with them and freezes any of their assets under U.S. jurisdiction. The suspects targeted include Sajid Mir, who was indicted by U.S. prosecutors last year for allegedly working with Pakistan’s spy agency to direct the 2008 terror attacks on Mumbai that killed 166 people, including six Americans.
ProPublica has reported extensively on the attacks and the ties between Lashkar and Pakistani intelligence. The other Laskhar chiefs named Thursday by Treasury are accused of running finances, propaganda and military operations against U.S. forces in Afghanistan, where Lashkar cooperates with the Taliban and al Qaeda.
Read More @ ProPublica.org

BREAKING: Bullets Planted in Luggage of Ron Paul Delegate at 2012

from matlarson10:

[Hallelujah!] U.S. Scales-Back Military Exercise with Israel, Affecting Potential Iran Strike

A smaller U.S. contingent may make it more difficult for the Israeli government to launch a pre-emptive strike on Tehran’s nuclear program.
by Karl Vick and Aaron J. Klein, TIME:
Seven months ago, Israel and the United States postponed a massive joint military exercise that was originally set to go forward just as concerns were brimming that Israel would launch a strike on Iran’s nuclear facilities. The exercise was rescheduled for late October, and appears likely to go forward on the cusp of the U.S. presidential election. But it won’t be nearly the same exercise. Well-placed sources in both countries have told TIME that Washington has greatly reduced the scale of U.S. participation, slashing by more than two-thirds the number of American troops going to Israel and reducing both the number and potency of missile interception systems at the core of the joint exercise.
“Basically what the Americans are saying is, ‘We don’t trust you,’” a senior Israeli military official tells TIME.
The reductions are striking. Instead of the approximately 5,000 U.S. troops originally trumpeted for Austere Challenge 12, as the annual exercise is called, the Pentagon will send only 1,500 service members, and perhaps as few as 1,200. Patriot anti-missile systems will arrive in Israel as planned, but the crews to operate them will not. Instead of two Aegis Ballistic Missile Defense warships being dispatched to Israeli waters, the new plan is to send one, though even the remaining vessel is listed as a “maybe,” according to officials in both militaries.
Read More @ World.Time.com

RNC vs Ron Paulers vs Rand Paul vs Political Parties

from RP4409:

China Is Going To Save Us – Again

by Pater Tenebrarum, Acting-Man.com:
Merkel Meets Wen
Mrs. Merkel has just visited China, a big delegation in tow, for extensive talks with Wen Jiabao and his government. Germany has good reason to keep in close touch with China: it is one of its biggest export destinations these days. Since 1999 Germany’s exports to China have risen nearly ten-fold and today amount to 2.5% of its GDP. The rest of the euro area is also exporting quite a bit to China, and conversely, the euro area is also China’s biggest customer.
Back in 2007, when Berlin invited the Dalai Lama, the relationship with Beijing chilled considerably, but that is all forgotten today. Business has become the major issue, and China is understandably worried about the crisis its main trading partner goes through.
Mrs. Merkel’s visit was the second in the past six months and it mainly served to reassure China’s leadership about the future of the euro. As Beijing sees it, Mrs. Merkel is the ‘go-to’ leader in Europe these days, a fact that has already produced some grumbling by other European leaders.
Read More @ Acting-Man.com

Goldman Sachs Bribed Senate To Pass Bailout Bill

[Ed. Note: A little historical perspective... Flashback 2008:]
from gr1m1b:

Goodbye, US Debt Ceiling, We Barely Knew Ya

by David Galland, Casey Research:

When our great leader came into power on January 20, 2009, the government’s many debts added up to $10.6 trillion.
This week, with his regime less than four years old, the Red Sea of debt has risen by 51%, broaching the latest debt ceiling of $16 trillion.
Maybe, just maybe, justifying the critics in their claims that some of the clowns in Cirque de Obama lack a certain restraint when it comes to using the national credit card.
Now, I could go on at great length about this lack of restraint, or the inevitable consequences that must follow as surely as cries of global warming follow every warm day, but the latest e-letter assembled by dear friend and La Estancia de Cafayate neighbor Susan “Kung Fu Girl” Fuji covers the territory very well.
And so, out of a combination of sloth and admiration for her article, I received permission to reprint her letter below. As you’ll read, by bringing together a number of sources on the topic, Kung Fu Girl does a solid job of shedding light on just how much one trillion dollars is.
Read More @ CaseyResearch.com

India Gold imports drop 18% to Rs 71,912 crore in April-June

from Bullion Street:
World’s largest gold consumer India’s gold imports declined sharply by 18.4% year-on-year to Rupees 71,912 crore in the first three months of current fiscal year.
According to Jyotiraditya Scindia, Minister of State for Commerce and Industry, it is difficult to attribute specific reasons for decline in import of gold in the April-June quarter.
“Volume of import of any commodity, including gold, depends on many factors which includes domestic demand,international and domestic prices, exchange rate, duty rates. The import of gold is free except for monetary purposes. However, it is subject to RBI regulations,” he said in a written reply to the Rajya Sabha.
Read More @ BullionStreet.com

Liberalism and Capitalism

by Ludwig von Mises, Mises:
Introduction
5. Liberalism and Capitalism
A society in which liberal principles are put into effect is usually called a capitalist society, and the condition of that society, capitalism. Since the economic policy of liberalism has everywhere been only more or less closely approximated in practice, conditions as they are in the world today provide us with but an imperfect idea of the meaning and possible accomplishments of capitalism in full flower. Nevertheless, one is altogether justified in calling our age the age of capitalism, because all that has created the wealth of our time can be traced back to capitalist institutions. It is thanks to those liberal ideas that still remain alive in our society, to what yet survives in it of the capitalist system, that the great mass of our contemporaries can enjoy a standard of living far above that which just a few generations ago was possible only to the rich and especially privileged.
Read More @ Mises.ca

US Politics: A Plague On Both Your Houses!

by Bill Bonner, Daily Reckoning.com.au:

Go Isaac, Go! Blow ye winds…Crack ye thunder…
Oh ye gods…send a hail of rain…send a wall of wind… send a tide of water that washes the Republicans out of the Florida swamps…
And drives the Democrats out of the hill country in the Carolinas…
There was little action in the markets again yesterday. Everyone is waiting. They want to know what will happen when the Fed gets together. Will there be an open-ended commitment to QE – as much as you want, when you want it – or will there be nothing at all?
While we are waiting… we will turn our attention from economics to US politics, which is to say, from fraud to outright theft. There’s an election campaign underway.
It was Ambrose Bierce, in his Devil’s Dictionary, who called an election “an advance auction of stolen goods.” Well, in the 2012 campaign… prices are rising. Bloomberg:

Donors Invest Millions in Romney for Billions in Returns
Wealthy donors and corporations are more heavily invested in this presidential election than at any time since the 1972 Watergate scandal led to stricter campaign-finance laws.

Read More @ DailyReckoning.com.au

Japan plans to cut state spending, could RUN OUT OF MONEY in one month

Japan’s government is planning to suspend some state spending as it could run out of cash by October, with a deficit financing bill blocked by opposition parties trying to force Prime Minister Yoshihiko Noda into an early election.
from The Telegraph:
The impasse in Japan’s parliament has raised fears among investors that the world’s third largest economy is being driven towards a “fiscal cliff”, Reuters reported.
“The government running out of money is not a story made up. It’s a real threat,” Finance Minister Jun Azumi told a news conference, making a last-ditch appeal for cooperation by opposition parties to pass the bill.
“Failing to pass the bill will give markets the impression that Japan’s fiscal management rests on shaky ground,” he said. Unless the bill clears the current parliamentary session that ends next week, the government will start suspending or reducing some state spending to avoid running out of money for as long as possible, the finance ministry said.
Read More @ Telegraph.co.uk

Auditing Rand Paul: Prime-Time Bootlicker at RNC

from Silver Vigilante:
This week, the American media threw the American people yet another slow curveball on the outside corner, right at the knees. But, as the strike zone of respectable journalism tightens amid unabashed offenses on freedom, the American people are learning to sitback and drive the curve ball to the opposite field. As Yahoo reported Monday, Rand Paul would use his prime-time speaking slot Wednesday, August 29 to implore not an audit of the Fed, but an audit of the Pentagon in what would have likely been one of the most radical National Convention speeches since World War 2. But, although Yahoo’s source is Rand Paul himself, the senator did not touch the meme of Auditing the Pentagon with a ten foot pole.

TAMPA–Kentucky Sen. Rand Paul will use his prime-time speaking slot at the Republican National Convention to urge party members to be more open to scrutinizing military spending, a position that puts him in the minority within the GOP.
Paul made the remarks Sunday when he addressed thousands of supporters at a rally for his father, former Republican presidential candidate and Texas Rep. Ron Paul, at the University of South Florida.
Read More @ Silver Vigilante

Congressman Walter Jones: It’s TIme to Bring Our Troops Home

from TheAlexJonesChannel :

Congressman Walter B. Jones, who introduced House Concurrent Resolution 107, calling for the impeachment of Obama if he attacks Iran or Syria without prior and clear authorization of an Act of Congress.

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