Category: economic news


Source: ZeroHedge.com

A week ago, when we reported on a move by the Dutch central bank that ordered a pension fund to forcibly reduce its gold holdings, we speculated that “this latest gold confiscation equivalent event is most certainly coming to a banana republic near you.” And while we got the Banana republic right, the event that we are about to describe is not necessarily identical. It is much worse. A bill proposed in the State of Washington (House Bill 1716), by representatives Asay, Hurst, Klippert, Pearson, and Miloscia, whose alleged purpose is to regulate secondhand gold dealers, seeks to capture “the name, date of birth, sex, height, weight, race, and address and telephone number of the person with whom the transaction is made” or said otherwise, of every purchaser of gold in the state of Washington. Furthermore, if passed, Bill 1716 will record “a complete description of the property pledged, bought, or consigned, including the brand name, serial number, model number or name, any initials or engraving, size, pattern, and color or stone or stones” and of course price. But the kicker: if a transaction is mode for an amount over $100, which means one tenth of an ounce of golds, also required will be a “signature, photo, and fingerprint of the person with whom the transaction is made.” In other words, very soon Washington state will know more about you than you know about yourself, if you dare to buy any gold object worth more than a C-note. How this proposal is supposed to protect consumers against vulture gold dealers we don’t quite get. Hopefully someone will explain it to us. We do, however, get how Americans will part with any and all privacy if they were to exchange fiat for physical. And in a police state like America, this will likely not be taken lightly, thereby killing the gold trade should the proposed Bill pass, and be adopted elsewhere.

While we are confident that representatives Asay, Hurst, Klippert, Pearson, and Miloscia have no clue why they are even proposing this bill, we would also be delighted to find out which moneyed interests they represent, and what happens to precious metal trading in America should Bill 1716 become a legal precedent which is effectively the first step before the final implementation of Executive Order 6102 version 2.

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Source: Financial Times

Brazil has warned that the world is on course for a full-blown “trade war” as it stepped up its rhetoric against exchange rate manipulation.

Guido Mantega, finance minister, told the Financial Times that Brazil was preparing new measures to prevent further appreciation of its currency, the real, and would raise the issue of exchange-rate manipulation at the World Trade Organisation and other global bodies. He said the US and China were among the worst offenders.

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Source: RawStory

VATICAN CITY – This is no ordinary bank: The ATMs are in Latin. Priests use a private entrance. A life-size portrait of Pope Benedict XVI hangs on the wall.

Nevertheless, the Institute for Religious Works is a bank, and it’s under harsh new scrutiny in a case involving money-laundering allegations that led police to seize euro23 million ($30 million) in Vatican assets in September. Critics say the case shows that the “Vatican Bank” has never shed its penchant for secrecy and scandal.

The Vatican calls the seizure of assets a “misunderstanding” and expresses optimism it will be quickly cleared up. But court documents show that prosecutors say the Vatican Bank deliberately flouted anti-laundering laws “with the aim of hiding the ownership, destination and origin of the capital.” The documents also reveal investigators’ suspicions that clergy may have acted as fronts for corrupt businessmen and Mafia.

The documents pinpoint two transactions that have not been reported: one in 2009 involving the use of a false name, and another in 2010 in which the Vatican Bank withdrew euro650,000 ($860,000) from an Italian bank account but ignored bank requests to disclose where the money was headed.

The new allegations of financial impropriety could not come at a worse time for the Vatican, already hit by revelations that it sheltered pedophile priests. The corruption probe has given new hope to Holocaust survivors who tried unsuccessfully to sue in the United States, alleging that Nazi loot was stored in the Vatican Bank.

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Source: ALLGOV

The U.S. Department of Justice has requested that a federal judge seal the courtroom of a trial involving computer code theft in order to protect trade secrets of Goldman Sachs.
Sergey Aleynikov was arrested by the FBI on charges of stealing computer code that supports Goldman’s high frequency trading system, which allows the bank to buy and sell stocks in a fraction of a second.
Goldman Sachs and others use “flash trading” to send out automated sell offers at higher and higher prices until one comes back with no buyer. The program then drops back to the highest acceptable price and sells at what the buyer set as his maximum limit. This allows Goldman to always obtain the best possible selling price, while the buyer loses the normal give and take of bargaining. In the case of large orders, such as those from pension funds or mutual funds, this can cost the buyers a small fortune.
Federal prosecutors have argued that the general public should not be allowed to observe the trial when details of Goldman’s trade secrets are discussed. They also asked that any documents related to Goldman’s trading strategies be sealed.
While it is common to protect proprietary corporate information during trials, the case of Aleynikov is unusual because it involves “secrets about a potentially lucrative trading system, rather than, say, ingredients in a soda formula,” wrote the Wall Street Journal.

Source: Bloomberg

Citigroup Inc. and Ally Financial Inc. units were sued by homeowners in Kentucky for allegedly conspiring with Mortgage Electronic Registration Systems Inc. to falsely foreclose on loans.

The lawsuit, filed as a civil-racketeering class action on behalf of all Kentucky homeowners facing foreclosure, also names as a defendant Reston, Virginia-based MERS, the company that handles mortgage transfers among member banks. The suit claims that through MERS the banks are foreclosing on homes even when they don’t hold titles to the properties.

“Defendants have filed foreclosures throughout the state of Kentucky and the United States of America knowing that they were not the ‘owners’ or beneficiaries of the loan they filed foreclosure upon,” the homeowners wrote in their complaint filed Sept. 28 in federal court in Louisville, Kentucky.

The homeowners claim the defendants filed or caused to be filed mortgages with forged signatures, filed foreclosure actions months before they acquired any legal interest in the properties and falsely claimed to own notes executed with mortgages.

The lawsuit is one of multiple cases against MERS and banks alleging that the process allows wrongful foreclosures. Several of these cases, combined in a multidistrict litigation in Phoenix, were dismissed Sept. 30, with the judge allowing the plaintiffs to re-file their complaints.

‘Inflammatory’

“The allegation is inflammatory and without merit and we intend to defend our position fully in a court of law,” Gina Proia, a spokeswoman for Ally, said in an e-mailed statement.

Mark Rodgers, a spokesman for Citigroup, declined to comment. Karmela Lejarde, a spokeswoman for MERS, didn’t have an immediate comment.

The Kentucky suit claims MERS and the banks violated the Racketeer Influenced and Corrupt Organizations Act, a law originally passed to pursue organized crime.

“RICO comes in because the fraud didn’t just happen piecemeal,” Heather Boone McKeever, a Lexington, Kentucky-based lawyer for the homeowners, said in a phone interview today. “This is organized crime by people in suits, but it is still organized crime. They created a very thorough plan.”

The suit, which includes claims of fraud, also names as defendants other banks, real-estate law firms and document- processing companies.

In the Phoenix litigation, U.S. District Judge James A. Teilborg found that the mortgage banks properly named MERS as the nominee for the original lenders and that the plaintiffs didn’t include enough detail in their allegations that the banks formed MERS to conspire to deprive homeowners of their property.

‘Straw Man’

Last year, the Kansas Supreme Court found that MERS’s relationship to the lenders is “akin to that of a straw man” and that it didn’t have rights over the mortgage at issue.

“Having a single front man, or nominee, for various financial institutions makes it difficult for mortgagors and other institutions to determine the identity of their lenders and mortgagees,” the Kansas court said.

The case is Foster v. Mortgage Electronic Registration Systems Inc., 10-cv-611, U.S. District Court, Western District of Kentucky (Louisville).

Source: CNN

Thousands of workers across France staged a one-day strike Tuesday to protest government plans to raise the retirement age.

More than 200 demonstrations were planned throughout the country Tuesday to coincide with the walkout.

Workers from both the public and private sectors were on strike, including those in transportation, education, justice, hospitals, media, and banking.

The strike, planned since June, is a reaction to government pension reforms aimed at raising the age of retirement to 62. The maximum retirement age is currently at 60, though some people in hardship posts may retire earlier, depending on the job.

More than a dozen unions and federations called for workers to strike Tuesday, though not everyone walked off the job. The Ministry of Education, for example, said only 30 percent of their sector is affected.

The strike also led to a reduction in train services.

President Nicolas Sarkozy’s planned reforms have angered many in France.

Among them is postal worker Isabelle Alouges, who has delivered the mail for 30 years. She had been planning to retire next year when she turns 55, but if the reforms become law, she may have to work until age 60 or beyond in order to earn a full pension.

An official from her union, PTT Sud, says postal workers feel betrayed because they are being made to pay by working longer when the government could fix France’s ballooning pension plan deficits by imposing more taxes on the rich.

“My feeling is one of unfairness because there is a bad sharing of national wealth,” Nicko Galapides told CNN. “That’s the thing — unfairness.”

Pension reform is likely to be a defining moment in Sarkozy’s presidency. There have already been repeated national strikes and demonstrations over the reforms and it has unified the opposition like no other previous issue.

One of Sarkozy’s top aides said over the weekend that while there is some flexibility on the details, the fundamentals of pension reform must be enacted, since increasing life expectancy increases the financial burden on the pension system.

Complicating things for the government are Sarkozy’s poor approval ratings, which over the summer hit the lowest point of his presidency.

“There is a kind of antipathy against Nicolas Sarkozy at the moment,” said Guillaume Petit, of the polling agency TNS Sofres. “His approval rating is very low. We have just 30 percent of French opinon trusting him as a president. This is very low for a president.”

Last month, polling agencies sent another political wakeup call when polls for the first time indicated that several French politicians could beat Sarkozy if he runs for re-election in 2012.

Source: WSJ

Harsh heat and a lack of rain in Russia have killed half of the crop in some hard-hit areas. The slump in production in one of the world’s most fertile breadbaskets has pushed prices up 62% since early June, and last month saw the biggest and fastest increase since 1959.

Wheat prices, which briefly rose above $7 a bushel on Monday, are at their highest level since September 2008, the year when low supplies of the grain fueled a global food crisis that led to riots in several countries.

“That’s a massive increase in a very short time frame,” said Terry Roggensack, an agriculture specialist at the Hightower Report, a Chicago-based commodities firm. “It is a scramble period.”

While prices are still well below the levels of 2008 and global stockpiles are much stronger than they were two years ago, the specter of the 2008 shortage looms large, particularly for countries that can’t depend on their own production.

This weekend, Egypt, the world’s largest wheat importer, bought 180,000 metric tons of wheat, its second purchase in the past two weeks and more than it had initially planned. China is warning local businesses against grain hoarding. In India, officials have allowed once-plentiful stockpiles to rot in fields, leaving many people hungry and driving up local prices.

All are seeking to avoid a repeat of 2008, when Egypt, Haiti and Pakistan were among countries hit by riots over rising food costs. At one point, the World Bank said higher commodity costs had pushed up food prices 83% in three years. Commodity prices plunged amid the darkest days of the financial crisis later that year and in 2009. But even then, some analysts predicted a food crisis would return when the economy recovered.

Russia’s troubles are having an even bigger impact in part because many of the world’s wheat exporters have experienced some crop problems. Big exporters like Canada have struggled with excessive rains, while Australia has battled locusts. Patches of wheat-growing regions in the European Union also have been struck by drought.

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Source: Examiner

In their most tenacious effort to control the ‘spin’ on the worst oil spill disaster in the history, BP has purchased top internet search engine words so they can re-direct people away from real news on the Deepwater Horizon catastrophe.

BP spokesman Toby Odone confirmed to ABC News that the oil giant had in fact bought internet search terms. So now when someone searches the words ‘oil spill’,  on the internet, the top link will re-direct  them to BP’s official company website.

This would not be the first time that BP has tried to control information to protect the company’s public image.

Shortly after the Deepwater Horizon exploded on April 20, 2010, BP executives quickly underestimated the size of the disastrous oil spill. Some suggest they did it to avoid costly EPA per-gallon spill fines. The less oil spilled, the lower the fines.

A month into the spill, the public learned through independent science, that the spill was in fact a million gallon a day gusher. BP got caught in their own lie when the used a syphon pipe in one of the broken riser pipes and proudly proclaimed that they were capturing 5,000 barrels of oil a day. With the oil obviously still gushing, they had to up their spill rate to explain the reported discrepancy in their earlier estimates.

As the dead bodies of birds, turtles and dolphins began showing up on land, BP used a private security company as their ‘oil spill police’ to try to keep photographers and reporters away from the true death toll from their spill. Tides of black goo lapping a shore lined in corpses did not portray the company image Tony Hayward and his oil rich executives wanted.

BP can spend millions on advertising campaigns, and they can try to misdirect people on the internet. But no matter how hard BP tries or how much money they spend on public relations, they will never be able to hide the apocalypse unfolding in the Gulf of Mexico. You just can’t buy or smile your way out of a multi-billion gallon oil spill disaster.

The world is watching the Gulf of Mexico from airplanes, boats and satellite images. Sending people to the BP company website when they click on the words ‘oil spill’ is not going to erase the horrors of the Deepwater Horizon disaster, nor will the trickery of British Petroleum.


By Yuka Hayashi, Of THE WALL STREET JOURNAL

TOKYO -(Dow Jones)- The Japanese government’s probe into a confidential post- war agreements with the U.S. not only confirmed the existence of a secret deposit that Japan kept with the Federal Reserve for nearly three decades, but also uncovered Tokyo’s lax management of information related to its foreign reserves.

Japanese Finance Minister Naoto Kan said Friday the ministry’s recent investigation into a 1969 bilateral accord confirmed that the financial settlement Japan made with the U.S. to end its occupation of Okinawa was larger and more complex than previously acknowledged and included a secret non-interest deposit the government and the Bank of Japan kept at the Federal Reserve Bank of New York.

The deposit totaled $103 million during much of its life before the two nations agreed to lower it to an unsubstantial sum of $3 million in 1999. The deposit was counted as part of Japan’s official foreign reserves and consisted of dollars the Japanese government received from the Okinawans in exchange for yen in 1972 when the U.S. ended its post-war occupation of the southern Japanese island. The non-interest deposit amounted to a de-facto financial payment, as the U.S. was free to manage the money to generate returns. U.S. embassy press officers couldn’t be reached for comment.

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