by Zero Hedge - March 25th, 2012 11:17 pm
Submitted by testosteronepit.
Wolf Richter www.testosteronepit.com
When the world's major central bankers get together, as they did at the Fed conference in Washington this weekend, ironies abound. Off to the side was Turkey’s government that had just floated a plan to get its people to turn in their physical gold in exchange for “certificates,” a first if still voluntary step in what may become a process of gold confiscation. In the background was the Fed, which in January had promised to keep interest rates at record lows through 2014, come hell or high water, after having purchased $2.3 trillion in bonds. And in the foreground were the money printers of Japan and Europe.
“If low interest rates induce investment projects that are only profitable at such interest-rate levels, this could have an adverse impact on productivity and growth…,” said Masaaki Shirakawa, Governor of the Bank of Japan, the champion of deficit monetization and ultra-low interest rates.
He was worried, he said, about “side effects” such as rising commodity prices—a non sequitur after he'd announced in in mid-February that the BOJ would plow another ¥10 trillion ($128 billion) into asset purchases, having already done three waves of asset purchases in 2011. And then we learned that board members fretted that this might be considered monetization of Japan's deficit. Um, yes.
Not to be outdone, Jean-Claude Trichet, ex-President of the ECB, did his own fretting. Under him, the ECB had purchased crappy Eurozone sovereign bonds despite a treaty that prohibits it. And now he worried that these bond purchases by central banks have become part of a new “permanent regime,” and that it could create “behavioral contagion”—something that has already happened. “I think we have to reflect on that,” he said belatedly.
Back to Turkey: it found a different solution for its own out-of-control budget deficit. Like that of Japan, the US, and other countries, Turkey’s deficit, at 10% of GDP, has become part of the “permanent regime.” But rather than deal with it the hard and honest way—cut spending and increase tax collections—Turkey is grasping for alternatives. Hence the plan to bamboozle its citizens into handing over their hidden stashes of physical gold in return for what would certainly be pretty certificates. And as an additional incentive, gold-deposit accounts would earn interest.
by Zero Hedge - March 25th, 2012 11:02 pm
Submitted by Tyler Durden.
Submitted by Thomas Gresham of Gresham’s Law
How To Think Like A Mad Man, Find Your Edge & Risk Little For Lots
The enigma that is eccentricity can be unravelled by grasping of this single statement; that which you perceive is both a matter of the object of your perception (in this case; the eccentric person) and your apparatus of perception. Eccentricity, then, is as much a quirk of the popular mind as it is of a particular person. So with the assumption that you seek creativeness and intrigue — here’s how to think eccentrically, find your edge and risk little for lots.
‘How to think’:
It may sound peculiar that contrary thinking is required to achieve creative thoughts… This, however, becomes self-evident when we realize that thinking the way someone else thinks results in mimicry — a “copy-cat” requires the minimum of creative thought… Therefore, the inference is that to achieve any creativeness, some change has to be made. From this, it stands to reason that the optimum in creativeness must approach the maximum change… and the maximum change must be close to the opposite.
— Zuce Kogan, Founder of the Creative Thinking Institute
Rid Yourself of Nebulous Terms – Define, Redefine & Refine.
Unless you’re an orator or something it’s highly likely that nebulosity is your enemy. If you speak and think in vague terms, then simple, logical deductions are likely to evade you. But since life involves doing one thing or another, chances are that you’ll default to linking concepts in the ‘default’ way — the way suggested by the crowd. In that case it is likely that the succession of vague, emotive images will govern your action.
The power of words is bound up with the images they evoke, and is quite independent of their real significance. Words whose sense is the most ill-defined are sometimes those that possess the most influence. Such, for example, are the terms democracy, socialism, equality, liberty, etc. whose meaning is so vague that bulky volumes do not suffice to precisely fix it. Yet it is certain that a truly magical power is attached to those short syllables, as if they contained the
by Zero Hedge - March 25th, 2012 8:52 pm
Submitted by Tyler Durden.
Yesterday afternoon, Barack Obama who is currently in Suth Korea, briefly was within bullet range (if behind bulletproof glass) of North Korea when he stood on the edge of the DMZ separating the two feuding countries. A few minutes later he left and told the world that “Bad behaviour will not be rewarded” referring to the imminent launch of North Korea’s Unha-3 rocket scheduled for a test launch in April. He added that “I will also note that every time North Korea has violated an international resolution, the Security Council resolution, it has resulted in further isolation, tightening of sanctions, stronger enforcement. I suspect that will happen this time as well.” Alas, we doubt that Obama’s warnings will have much of an impact and that in a few weeks NK will go ahead and hit the launch button undeterred, in the process forcing Japan to scramble its Aegis destroyers and take other countermeasures as discussed last week, in case the missile “veers of course.” But just what is the trajectory? Courtesy of North Korea Tech, we now know the secret path the North Korean rocket is expected to take. All we can say is there better not be strong Westerly winds.
More from North Korea tech:
North Korea’s Unha-3 rocket, scheduled for launch next month, will drop to earth in two stages off the western coast of South Korea and to the east of Luzon Island in the Philippines, according to documents submitted by the country to the International Maritime Organization.
The documents, obtained by NorthKoreaTech.org, were sent to the IMO’s London headquarters from the DPRK’s embassy in the U.K. They carried the name of “Ko Nung Do,” who is identified as director general of the DPRK’s Maritime Administration.
Some of the information restates what has already been disclosed by the country: that the launch would take place from a satellite launch site in Cholsan County of North Pyongan Province during a five day period from April 12th to 16th.
They also include some new information: that the launch could take place anytime between 7am and noon local time (2200 to 0300 GMT); and include the coordinates of the projected drop zones for the two-stage rocket.
The rocket’s path takes it over the western tip of South
by Zero Hedge - March 25th, 2012 7:31 pm
Submitted by Tyler Durden.
Last week, Bernanke’s first (of four) lecture at George Washington University was entirely dedicated to attempting to discredit gold and all that sound money stands for. The propaganda machine was so transparent that it hardly merited a response: those away from the MSM know the truth (which, simply said, is the “creation” of over $100 trillion in derivatives in just the first six months of 2011 to a record $707 trillion - how does one spell stability?), while those who rely on mainstream media for the news would never see an alternative perspective – financial firms are not among the top three sources of advertising dollars for legacy media for nothing. Still, for those who feel like the Chairman’s word need to be challenged, the following extensive and annotated reply by QBAMCO’s Paul Brodsky makes a mockery of the Fed’s full on assault on gold, and any attempts by the subservient media to defend it. To wit: “Has anyone asked why so many powerful people are going out of their way to discredit an inert rock? We think it comes down to maintaining power and control over commercial economies. After professionally watching Fed chairmen cajole, threaten, persuade and manage sentiment in the markets since 1982, we argue this latest permutation is understandable, predictable and, for those willing to bet on the Fed’s ultimate success in saving the banking system (as we are), quite exciting.… Gold is no longer being ignored and gold holders are no longer being laughed at. “The Powers That Be” seem to have begun a campaign to discredit gold.”
“First they ignore you, then they laugh at you, then they fight you, then you win.”
- Mohandas Karamchand Gandhi
As gold holders with fairly comprehensive views of global monetary policies and central banking we were asked to comment about the first of four installations of Ben Bernanke’s lecture series at George Washington University, entitled “The Federal Reserve and the Financial Crisis”. Despite thinking the lecture was woefully incomplete, diversionary and oftentimes quite disingenuous, our initial reaction about responding was to let it go. We think our anticipated macroeconomic outcome will be ignored and denied by public policy makers up until the time they are forced to adopt it and take ownership of it. The math and political expediency…
Exterran to Receive Approximately $112 Million in Connection with Sale of Venezuelan Joint Venture Assets
by Insider Scoop - March 25th, 2012 7:27 pm
Courtesy of Benzinga.
Exterran Holdings (NYSE: EXH) announced Sunday that WilPro Energy Services Limited and WilPro Energy Services (PIGAP II) Limited, the joint ventures owned by subsidiaries of Exterran and Williams (NYSE: WMB), have completed the sale of the El Furrial and PIGAP II assets to PDVSA Gas, S.A. in connection with the 2009 nationalization of those assets. After satisfying amounts owed to the WilPro joint ventures’ lenders and taking into account other closing adjustments, Exterran received an initial payment of approximately $37.6 million in cash at closing. The remaining amount of approximately $74.8 million due to Exterran is payable in periodic cash payments through the first quarter of 2016.
DRI Corporation Announces Plans to Sell Operations Under Section 363 of Chapter 11 of the Bankruptcy Code
by Insider Scoop - March 25th, 2012 7:25 pm
Courtesy of Benzinga.
DRI Corporation (TBUS) announced Sunday that it has filed in Eastern District of North Carolina Bankruptcy Court for sale of its assets and operations under Section 363 of Chapter 11 of the U.S. Bankruptcy Code.
As previously announced in a press release dated April 15, 2011, DRI Corporation’s Board of Directors formed a Special Committee to consider and evaluate the Company’s strategic alternatives. The Special Committee, which retained the investment banking firm of Morgan Keegan & Company, oversees this process on behalf of the Company’s Board of Directors and shareholders.
by Zero Hedge - March 25th, 2012 6:52 pm
Submitted by Tyler Durden.
Next week will be relatively light in economic reporting, and with no HFT exchange IPOs on deck, and the VVIX hardly large enough to warrant a TVIX type collapse, it may be downright boring. The one thing that will provide excitement is whether or not the US economic decline in March following modestly stronger than expected January and February courtesy of a record warm winter, will accelerate in order to set the stage for the April FOMC meeting in which Bill Gross, quite pregnant with a record amount of MBS, now believes the first QE hint will come. Naturally this can not happen unless the market drops first, but the market will only spike on every drop interpreting it for more QE hints, and so on in a senseless Catch 22 until the FRBNY is forced to crash the market with gusto to unleash the NEW qeasing (remember – the Fed is now officially losing the race to debase). For those looking for a more detailed preview of next week’s events, Goldman provides a handy primer.
From Goldman Sachs
The data releases last week were a bit mixed, with strong export orders in Taiwan and continued strong US Jobless claims, but weaker flash PMIs in Europe and China. In contrast to the PMI, the French business confidence survey improved in March.
In the coming week, it will be interesting to watch if German IFO index also contradicts the surprisingly weak Flash Eurozone PMI, similar to the INSEE already. In Europe, the focus will also be on the Euro area flash CPI, where we expect some moderation to 2.5%yoy as the decline in non-core components will likely continue. Aside from the inflation numbers, there will be an informal EcoFin Meeting on Friday and Saturday, where an increase of the ESM is likely to be discussed again.
In terms of US activity data, the focus will be on the Chicago PMI, Durable Goods and Personal Income. Though we do expect a technical rebound in the durable good orders after the weakness in the previous report, we think the Chicago PMI could slip by more (to 60 from 64) than consensus expects. Overall, the message from US activity data may therefore remain mixed outside the still-strong labour market data.
Order Granting Oakland County’s Motion for Summary Judgment Against Fannie/Freddie FHFA RE Transfer Taxes on Deeds
by Zero Hedge - March 25th, 2012 5:08 pm
Submitted by 4closureFraud.
OAKLAND COUNTY, ET AL.,
FEDERAL HOUSING FINANCE AGENCY
AS CONSERVATOR FOR FEDERAL
NATIONAL MORTGAGE ASSOCIATION AND
FEDERAL HOME LOAN MORTGAGE COMPANY;
FEDERAL NATIONAL MORTGAGE ASSOCIATION;
AND FEDERAL HOME LOAN MORTGAGE COMPANY,
ORDER GRANTING PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT AND
DENYING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT
D. An Exemption from All Taxation Covers Only Direct Taxes, Not Excise Taxes
Plaintiffs rely upon the Supreme Court’s decision in Wells Fargo for the
proposition that an exemption from “all taxation” does not cover excise taxes such as
the Michigan Transfer Taxes. 485 U.S. 351. Plaintiffs say that Wells Fargo made clear
that an exemption from all taxation covers only direct taxes, not excise taxes. The
In Wells Fargo, the Supreme Court considered whether certain items of personal
property–“Project Notes”–were exempt from the federal estate tax. In the late 1930s,
Congress passed the Housing Act, 50 Stat. 888 et seq., which empowered state and
local governments to issue tax-free obligations called Project Notes to finance housing
projects. 485 U.S. at 353. Congress provided that “[Project Notes], including interest
thereon, . . . shall be exempt from all taxation now or hereafter imposed by the United
States.” Id. at 355. Discussing the exemption, the Supreme Court stated:
Well before the Housing Act was passed, an exemption of property from all
taxation had an understood meaning: the property was exempt from direct
taxation, but certain privileges of ownership, such as the right to transfer the
property, could be taxed. Underlying this doctrine is the distinction between an
excise tax, which is levied upon the use or transfer of property . . . and a tax
levied upon the property itself. The former has historically been permitted even
where the latter has been constitutionally or statutorily forbidden. Id.
After reviewing the case law, the Supreme Court held that the exemption from all
taxation did not exempt the Project Notes from excise taxes such as the estate tax. The
Court noted that where Congress had, on other occasions, exempted property from
estate taxation, it generally referred specifically to…
by Zero Hedge - March 25th, 2012 4:57 pm
Submitted by 4closureFraud.
In a TRMS exclusive, Rachel Maddow reports on one North Carolina town standing up to the big banks that destroyed the housing market and the lives of many local families with foreclosures that may turn out to be fraudulent.
by Zero Hedge - March 25th, 2012 3:31 pm
Submitted by Tyler Durden.
Back in late 2006 and early 2007 a few (soon to be very rich) people were warning anyone who cared to listen, about what cracks in the subprime facade meant for the housing sector and the credit bubble in general. They were largely ignored as none other than the Fed chairman promised that all is fine (see here). A few months later New Century collapsed and the rest is history: tens of trillions later we are still picking up the pieces and housing continues to collapse. Yet one bubble which the Federal Government managed to blow in the meantime to staggering proportions in virtually no time, for no other reason than to give the impression of consumer releveraging, was the student debt bubble, which at last check just surpassed $1 trillion, and is growing at $40-50 billion each month. However, just like subprime, the first cracks have now appeared. In a report set to convince borrowers that Student Loan ABS are still safe – of course they are – they are backed by all taxpayers after all in the form of the Family Federal Education Program – Fitch discloses something rather troubling, namely that of the $1 trillion + in student debt outstanding, “as many as 27% of all student loan borrowers are more than 30 days past due.” In other words at least $270 billion in student loans are no longer current. That this is happening with interest rates at record lows is quite stunning and a loud wake up call that it is not rates that determine affordability and sustainability: it is general economic conditions, deplorable as they may be, which have made the popping of the student loan bubble inevitable. It also means that if the rise in interest rate continues, then the student loan bubble will pop that much faster, and bring another $1 trillion in unintended consequences on the shoulders of the US taxpayer who once again will be left footing the bill.
Fitch believes most student loan asset-backed securities (ABS) transactions remain well protected due to the government guarantee on Family Federal Education Program (FFELP) loans. The Federal Reserve Bank of New York recently reported that as many as 27% of all