Stimulus passes senate with Mr. Brown, AYE. Stimulus Q&A

Sometime this year, taxpayers will receive an Economic Stimulus Payment. This is a very exciting new program that I will explain using the Q and A format:

Q. What is an Economic Stimulus Payment?
A. It is money that the federal government will send to taxpayers.

Q. Where will the government get this money?
A. From taxpayers.

Q. So the government is giving me back my own money?
A. No, they are borrowing it from China. Your children are expected to repay the Chinese.

Q. What is the purpose of this payment?
A. The plan is that you will use the money to purchase a high-definition TV set, thus stimulating the economy.

Q. But isn't that stimulating the economy of China ?
A. Shut up.

Below is some helpful advice on how to best help the US economy by spending your stimulus check wisely:

If you spend that money at Wal-Mart, all the money will go to China.
If you spend it on gasoline it will go to Hugo Chavez, the Arabs and Al Queda
If you purchase a computer it will go to Taiwan.
If you purchase fruit and vegetables it will go to Mexico, Honduras, and Guatemala (unless you buy organic).
If you buy a car it will go to Japan and Korea.
If you purchase prescription drugs it will go to India
If you purchase heroin it will go to the Taliban in Afghanistan
If you give it to a charitable cause, it will go to Nigeria.

And none of it will help the American economy. We need to keep that money here in America. You can keep the money in America by spending it at yard sales, going to a baseball game, or spend it on prostitutes, beer (domestic only), or tattoos, since those are the only businesses still in the US.

http://www.ritholtz.com/blog/

http://www.cnn.com/2009/POLITICS/02/13/stimulus/index.html

CBN to suspend bank for illegal forex deals

CBN to suspend bank for illegal forex deals

The Central Bank of Nigeria queried one of the top players in the banking industry on Monday evening, over its foreign exchange dealings, suspected to be full of anomalies.

This is coming on the heels of allegations that the apex bank has not lived up to its responsibility as a regulator.

According to sources, CBN auditors will immediately go into the bank to look through the bank's foreign exchange activities.

If the bank is found guilty, it will be suspended from trading on the forex market, which is still one of money-spinners for banks in these turbulent times.

"The mood is hot now at the CBN in view of the global financial meltdown and its probable effect on the Nigerian economy. So, if anything to suggest round tripping is found in the bank's books, then the bank gets maximum punishment," a source, who asked not to be named, disclosed.

Investigation by our correspondents revealed that many banks were still involved in roundtripping, despite the Central Bank of Nigeria's directive that foreign currencies sourced through its Retail Dutch Auction System must be for end users only.

Round tripping is an arbitrage transaction where retail banks buy foreign currencies from the CBN and resell at the parallel (black) market far above the stipulated two per cent premium allowed by the apex bank.

Meanwhile, the naira remained at N147.70 to the United States dollar at the inter-bank foreign exchange market on Monday.

Traders attributed the stable exchange rate to the uncertain outcome of the Central Bank of Nigeria's Retail Dutch Auction System.

"Most banks were not aggressive in their demand for dollars because of the CBN's auction today (Monday)," one dealer said.

Traders said the outcome of the RDAS would determine the level of activity in the market on Tuesday.

The naira strengthened to N147.70 to the dollar on Friday from N149 on Monday last week after big dollar inflows from the Nigerian National Petroleum Corporation and local conglomerate, Dangote Group, improved liquidity in the system.

At last Wednesday RDAS, the CBN offered $200m at the rate of NI45.30. The apex bank has been consistent with this exchange rate in the last two trading sessions.

Meanwhile, analysts have predicted that the naira might fall further to between N165 and N200.

According to a report by Vetiva Capital Management Limited, the persistent fall in oil prices, diminishing oil production as well as consistent decline in foreign reserves are some of the factors that will lead to a further crash of the naira.

The report stated that the CBN would definitely meet the dollar demand by end-users at the early stage but that as soon as the reserves began to decline without adequate means of replenishment, the naira would suffer significant depreciation.

Vetiva noted that, "We expect that the depreciation of the naira against major economies as witnessed towards the end of 2008 will be sustained in 2009. The CBN seems to have abandoned any effort to support the value of the currency, probably recognising that it would be a prohibitively expensive long term policy to pursue."

Vetiva's position also coincided with that of Citigroup which predicted that the naira might weaken to as much as 15 per cent this year should the price of oil, which accounted for 90 per cent of the nation's export earnings, declined to an average $35 a barrel in 2009.

An economist with the group, David Cowan, said, "Nigeria is very reliant on oil revenue to meet demand for foreign exchange. If the oil price averages around $35 a barrel, then the naira will face significant further depreciation."

The currency lost almost a quarter of its value following a November 26 decision by the CBN to limit sales of dollars to commercial banks to protect its $52bn of reserves as oil revenue shrank and foreign investors sold the nation's assets. Oil has slumped almost 72 per cent since its July record of $147.27 a barrel, cutting Nigeria's export earnings.

"The central bank can't justify using its reserves to defend the naira in a country that is still very poor," said Cowan.

CBN to suspend bank for illegal forex deals

http://www.punchng.com/Articl.aspx?theartic=Art200902102272182

Obama yells fire in a crowded theatre

Martin compares the quiet competency and professionalism of the US Airways crews that executed an emergency landing with the gross mismanagement of the Obama White House team that appears to have landed from Mars

http://www.pr-inside.com/print1055954.htm

Ready for More Bad News?

The economic crisis is even worse than Obama admits.

http://www.newsweek.com/id/184266/output/print

But this is the real thing. And it's going to drag on much longer than most people think. It will be called the Greater Depression, and it's likely the most serious thing to happen to the country since its founding. And not just from an economic point of view, but political, sociological, and military.

For a number of reasons, wars usually occur in tough economic times. Governments always like to find foreigners to blame for their problems, and that includes other countries blaming the U.S. In the end, I wouldn't be surprised to see violence, tax revolt, or even parts of the country trying to secede. I don't think I can adequately emphasize how serious this thing is likely to get. Nothing is certain, but it seems to me the odds are very, very high for an absolutely world-class disaster.    http://www.dailyreckoning.com/2009-another-year-of-shock-and-awe/

Smart money. Dumb money. All kinds of money. Like those geniuses who bought Sam Zell's real estate empire at the top of the market. Practically every one of them is now in trouble. Rents are down – not enough to cover the operating costs and debt service. And what about Sam himself? He put a big chunk of his money into publishing. And now his flagship newspapers are going broke too. Ad revenue is down and shows no sign of recovering – ever.    http://www.dailyreckoning.com/the-economic-panic-of-2009/

The Asia-Pacific region is feeling the pain faster than even pessimists expected. China, an economy on which Australia increasingly relies, is looking more vulnerable by the day. The latest sign of that was January's 17.5 percent plunge in exports.

 

"You guys are in trouble," Stephen Roach, chairman of Morgan Stanley Asia, declared at the same conference that Reddy, Stevens and many Asia-Pacific central bankers attended this week.     http://www.bloomberg.com/apps/news?pid=20601110&sid=aeU.JTMir7vA

Caterpillar CEO Contradicts President on Whether Stimulus Will Allow Him to Re-Hire Laid Off Workers    http://blogs.abcnews.com/politicalpunch/2009/02/doh-caterpillar.html

I copied each full transcript into separate Word documents. After doing that, I deleted the introductions by both men (since those are largely or fully scripted) and then deleted all reporter questions from the transcripts. What you have left are simply the answers that each president offered, off-the-cuff and unscripted, to all questions.

Then I ran Word's readability tool.

Guess what?

Bush's answers were spoken at 7th grade level. Obama's at a 10th grade level.    |-( http://www.huffingtonpost.com/mark-nickolas/obamas-press-conf-answers_b_165467.html

Too much a fan of his day job, Schiff's focus is now on expanding his business from six offices to a possible 30 worldwide. Schiff's plans may be put on hold for now, as his expansion relies heavily on the state of the U.S. economy.

 

"There might not be enough Americans with money left (to invest)," he said.     http://www.dariennews-review.com/local/ci_11688012

Gerald Celente on Economic Crisis

Taleb concerned system will collapse with exponentially increasing complexity

Expert predicts Revolution, Tax Riots, Food Riots and High Crime

Gerald Celente correctly predicts every major event last 10 years.





Trends Research Website

$550 Billion Electronic Run On U.S. Banks Nearly Triggered Financial Collapse

At 2 minutes, 20 seconds into this C-Span video clip, Rep. Paul Kanjorski of Pennsylvania explains how the Federal Reserve told Congress members about a "tremendous draw-down of money market accounts in the United States, to the tune of $550 billion dollars." According to Kanjorski, this electronic transfer occurred over the period of an hour and threatened a further $5 trillion to be drawn out triggering a total collapse of the Financial System, which prompted Hank Paulson's emergency $700 billion TARP bailout action. http://www.youtube.com/watch?v=_NMu1mFao3w

Wholesale inventories plunge by most in 17 years

http://www.kansascity.com/438/story/1026714.html Wholesale inventories plunge by most in 17 years

What is needed? The answer is: focus and ferocity. If Mr Obama does not fix this crisis, all he hopes from his presidency will be lost. If he does, he can reshape the agenda. Hoping for the best is foolish. He should expect the worst and act accordingly.

Yet hoping for the best is what one sees in the stimulus programme and – so far as I can judge from Tuesday's sketchy announcement by Tim Geithner, Treasury secretary – also in the new plans for fixing the banking system.    http://www.ft.com/cms/s/0/9ebea1b8-f794-11dd-81f7-000077b07658.html?nclick_check=1

Stimulus, Marxism, revolution, and the breakdown of modern economics

This week President Obama claimed that failure to pass his economic stimulus bill will have catastrophic consequences for the U.S economy. The reality is the catastrophe will be far greater with his plan than without it. If the trends of January and early February of 2009 continue, the rug will be completely pulled out from beneath the U.S. economy, and the full cost of the President's "economic depressant package" will be apparent to all.

If foreign capital does .... http://seekingalpha.com/article/119199-this-is-just-the-beginning?source=headline1

There is a battle being waged now in the world of economics. This battle is fierce. And no matter who wins, the impact will be felt far and wide. I dub this epoch struggle: "Godzilla vs. King Kong"

I'm not sure who will win, but I do have a favorite.     http://www.marketoracle.co.uk/Article8750.html

Q: Isn't this just a populist, diversionary tactic on Obama's part so that he can spend $900 billion more on his porky projects?

A: Yes. And you of all people should envy his strategic gifts, which were finely honed right beside you at Harvard. Besides, if things get keep getting worse, you will beg Obama for another pay cut, just to hold the line on rising sales of guillotines.

http://www.foxbusiness.com/story/markets/industries/government/al-lewis-wake-ceos----new-world-pay-limits/

Ten years ago, a quote from Marx would have one deemed a socialist, and dismissed from polite debate. Today, such a quote can (and did, along with Charlie's photo) appear in a feature in the Sydney Morning Herald—and not a few people would have been nodding their heads at how Marx got it right on bankers.

http://www.nakedcapitalism.com/2009/02/steve-keen-roving-cavaliers-of-credit.html

Barron's interviews Ray Dalio, chief investment officer of Bridgewater Associates. Listen up: Bridgewater's funds have produced long-term annual returns, net of fees, averaging 15%. In the turmoil of 2008, its Pure Alpha I fund earned 8.7%, while Pure Alpha II delivered 9.4%. This guy knows his stuff.

There's too much in this interview to do it justice with a summary. For those with Barron's subscriptions, I strongly recommend you read the whole thing. For those who can't, here are some of Dalio's key thoughts:...    http://seekingalpha.com/article/119250-ray-dalio-a-long-and-painful-depression-barron-s-interview

Two of Switzerland's largest banks, UBS and Credit Suisse, are set to announce combined losses for 2008 of 29 billion Swiss francs later this week, the Sonntag newspaper reported Sunday.

According to the report, UBS will announce an annual loss of 21 billion Swiss francs (14 billion euros, 18 billion dollars) on Tuesday, the largest in Swiss history and reflecting the fact the company was one of the banks hardest hit by the US subprime loan crisis.

http://www.breitbart.com/article.php?id=CNG.2e4e127b6b7d600dc3fa28f04b21cb9d.1b1&show_article=1

Why There Won't Be a Revolution

Americans might get angry sometimes, but we don't hate the rich. We prefer to laugh at them.

http://www.newsweek.com/id/183718/output/print

Few 21st-century Americans have any real experience with economic populism. That appears to be changing fast. In the 1930s, the demonization of the upper class did not really begin until almost two years after the stock-market crash. We are now six months into our own economic crisis, and signs of populist resentment are already visible: in the perverse fascination with Bernard Madoff's remarkable fraud, the popular outrage at the tax problems of public officials, the growing contempt for the many overseers of the credit markets, the ruined investments of millions of ordinary people, the growing army of the unemployed (still far below the 15% to 25% unemployment of the 1930s, but 7.6% in January and growing fast), the likelihood of a recession that could last not just for months, but for years. These are the preconditions of populist revolts. Mr. Obama's chastisements of bankers and CEOs have been relatively mild compared to the routine denunciations of "economic royalists" in the 1930s. But the longer the crisis goes on and the deeper it grows, the more Huey Long-like challenges to those in power will arise, and the more pressure there will be for national leaders to launch populist battles of their own.

http://online.wsj.com/article/SB123396621006159013.html?mod=googlenews_wsj

Morgan Stanley is also advising the Fed on the AIG rescue.

In addition to hiring consultants, the Fed and the Treasury have retained Wall Street firms to help manage more than $2 trillion in bailout and emergency-loan programs.    http://www.bloomberg.com/apps/news?pid=20601109&sid=a2T0fD4Ri17E&refer=home

Obama sinks world into new dark age with buy American clause

"Our position is that, while 'Buy American' may sound good, in fact we're very concerned that if this stimulus legislation contains the 'Buy American' provision, other nations and regions of the world would follow our lead and pass similar provisions," said spokesman Jim Dugan.

"Suddenly, we could find ourselves with an old-fashioned trade dispute similar to the 1930s, and soon global trade could grind to a halt. We are very, very concerned that this 'Buy American' provision could end up leading to a similar set of circumstances that would be detrimental to Caterpillar, and more importantly, to the U.S. economy and the global economy."

http://www.indystar.com/article/20090206/BUSINESS/902060392/1003

Lindsey Graham Whines About Stimulus Bill on Fox News http://www.youtube.com/watch?v=uMK3lFjzgqw 'the process is broken'

http://www.marketoracle.co.uk/Article8716.html Stock Markets Fail to Bounce, Food Prices Signalling Higher Commodity Prices

http://blogs.wsj.com/economics/2009/02/06/is-inflated-executive-pay-bad-for-democracy/ pay scale in France before guillotine VS US today

Black cloud descends on Washington

The White House's nominee for Director of the Central Intelligence Agency, Leon Panetta [pictured above], has earned more than $700,000 in speaking and consulting fees since the beginning of 2008, with some of the payments coming from troubled banks and an investment firm that owns companies that do business with federal national security agencies.

Mr. Panetta received $56,000 from Merrill Lynch & Co. for two speeches and $28,000 for an Oct. 30, 2008 speech for Wachovia Corp. Both firms suffered big losses last year and were acquired by larger banks.

Mr. Panetta reported receiving a $60,000 "Governmental Advisor Fee" from the Pacific Maritime Association, which represents the shipping industry. The group lobbies the federal government regarding terrorism laws that affect shipping. http://network.nationalpost.com/np/blogs/posted/archive/2009/02/04/236718.aspx

Daschle, who is not a lawyer, was being paid a million dollars a year by a law firm. As what? Not a lobbyist -- at least, not officially. But it's safe to say that he wouldn't have been offered that sinecure if he hadn't been such a powerful senator. Daschle has juice. He could talk to people, take positions, speak authoritatively. He was an important man who, it goes without saying, needed to have a car and driver at his disposal. In just two years after leaving the Senate, he made something like $5.3 million.... http://voices.washingtonpost.com/postpartisan/2009/02/tom_daschle_a_creature_of_the.html?hpid=opinionsbox1

Just two weeks after his historic inauguration ceremony, Obama's presidency is lurching towards failure, and not because three of his administration picks have been found to be tax cheats, but because nearly all of his administration picks are corporate whores and shills.    http://www.opednews.com/articles/Small-Change-Obama-s-Betr-by-Dave-Lindorff-090204-344.html

At no period in American history has our democracy been in such peril or has the possibility of totalitarianism been as real. Our way of life is over. Our profligate consumption is finished. Our children will never have the standard of living we had. And poverty and despair will sweep across the landscape like a plague. This is the bleak future. There is nothing President Obama can do to stop it. It has been decades in the making. It cannot be undone with a trillion or two trillion dollars in bailout money. Our empire is dying. Our economy has collapsed....    http://www.alternet.org/workplace/125192/it%27s_not_going_to_be_ok/

Are we on the brink of a new dark age?

http://www.telegraph.co.uk/scienceandtechnology/technology/google/4413065/Millions-hit-by-Google-breakdown.html Millions hit by Google 'breakdown'

To avoid oppressive civic obligations, the wealthy fled from cities to establish self-sufficient rural estates. http://dieoff.org/page134.htm

"A Dark Age of Macroeconomics"

Quoting an email [from Paul Krugman], economists who "have spent their entire careers on equilibrium business cycle theory are now discovering that, in effect, they invested their savings with Bernie Madoff." I think that's right, and as they come to this realization, we can expect these economists to flail about defending the indefensible, they will be quite vicious at times, and in their panic to defend the work they have spent their lives on, they may not be very careful about the arguments they make.        http://economistsview.typepad.com/economistsview/2009/01/a-dark-age-of-macroeconomics.html

What Are The People Who Predicted the Financial Crisis Predicting Now?

There are only a handful of people who predicted this financial crisis, or at least its severity. http://georgewashington2.blogspot.com/2008/12/what-do-people-who-predicted-financial.html

http://www.nytimes.com/2009/02/01/world/europe/01russia.html?hp MOSCOW — Protesters held demonstrations throughout Russia on Saturday, offering largely subdued, but pointed criticism of the government's economic policies as the country continues to sink deeper into an economic morass.

http://www.guardian.co.uk/business/2009/jan/31/global-recession-europe-protests

Governments across Europe tremble as angry people take to the streets

http://www.marketoracle.co.uk/Article8593.html Economic & Financial Markets Forecast 2009: Collapsing Global Financial System Ponzi Scheme

PIIGS Threaten collapse of Euro

http://www.dailymail.co.uk/debate/article-1128262/MARY-ELLEN-SYNON-Rioting-Greeks-angry-Germans--Euro-collapse.html So worried are the Brussels elite that this might actually happen that they are threatening to force Germany and some of the other stronger countries to bail-out the PIIGS.

Obama regulates Wall Street as Iceland melts down

http://www.independent.co.uk/news/world/europe/meltdown-iceland-on-the-brink-1515753.html Iceland on the brink

Obama regulates Wall Street http://www.telegraph.co.uk/news/worldnews/northamerica/usa/barackobama/4340156/Barack-Obama-to-tighten-Wall-Street-regulations.html

Card Data Breached, Firm Says

http://online.wsj.com/article/SB123249174099899837.html

http://www.guardian.co.uk/world/2009/jan/20/barack-obama-inauguration-us-speech

Obama inauguration: Words of history ... crafted by 27-year-old in Starbucks