Are You Protected ?

The 30 year bond auction yesterday was a big flop. The coming funding crisis is starting.

Joyce warns of US 'Armageddon'

MARK DAVIS AND PHILLIP COOREY

December 11, 2009

THE OPPOSITION finance spokesman, Barnaby Joyce, believes the United States government could default on its debt, triggering an ''economic Armageddon'' which will make the recent global financial crisis pale into insignificance.

Senator Joyce told the Herald yesterday he did not mean to alarm the public but there needed to be a debate about Australia's ''contingency plan'' for a sovereign debt default by the US or even by a local state government.

''A default by the US means complete economic collapse around the world and the question we have got to ask ourselves is where are we in that,'' Senator Joyce said.

His warning came as the Rudd Government ramped up its attack on Senator Joyce as an economic extremist by highlighting his strong opposition to Chinese sovereign investment in Australia.

The Treasurer, Wayne Swan, said it was a cause for concern that Senator Joyce had been elevated ''from the reactionary fringe of our economic debate to the second-most senior economic policymaking job in the alternative government''.

The scrutiny of foreign investment bids was adequate and ''if we were to follow the advice of some of the extremists on foreign investment, it could cost something like 20,000 jobs right across Australia''.

Senator Joyce said the chances of a US debt default were distant but real and politicians were not doing the electorate a favour by refusing to acknowledge the risk.

full article here

Just Print More Drachma's

Oh yea, they can't. Anyway, just print more euro's !!

Timebomb for the Euro

Greek Debt Poses a Danger to Common Currency

By Wolfgang Reuter

REUTERS

Start Gallery

As economic indicators have improved, concern about the financial crisis has abated. But the next big problem could be approaching. Greece's public deficit is skyrocketing and the country may become insolvent. The effect on Europe's common currency could be dire.

Josef Ackermann, the CEO of Deutsche Bank, has given the all-clear signal many times in the past. He has repeatedly said that the worst was over, only to see the financial crisis strengthen its grip on the world economy.

Last week, however, Ackermann was singing a completely different tune. Although many indicators are once again pointing skyward, he said at a Berlin summit on the economy, Chancellor Angela Merkel, the assembled cabinet ministers, corporate CEOs and union leaders should not to be deluded. He warned emphatically that the financial situation could deteriorate once again. "A few time bombs" are still ticking, Ackermann told his audience, noting that the growing problems of highly leveraged small countries could lead to new tremors. And then, almost casually, Ackermann mentioned the problem child of the European financial world by name: Greece.

Ackermann isn't alone in his opinion. Practically unnoticed by the public, an issue has returned to the forefront in recent weeks -- one that was a cause for great concern at the height of the financial crisis but then, as optimism about the economy began to grow, was eventually forgotten: the fear of a national bankruptcy in the euro zone. And the question as to whether such a bankruptcy, should it come about, could destroy the common European currency.

Greece was always at the very top of the list of countries at risk. But now the danger appears to be more acute than ever.

Insuring Against Default

The seismographs in the trading rooms at investment banks detected the initial tremors weeks ago. Today, when the code "Greece CDS 10Yr" appears on Bloomberg terminals, a curve at the bottom of the screen points sharply upward. It reflects the price that banks are now charging to insure 10-year Greek government bonds against default.

full article here

Where's Timmys Check ?

After Obama throws him under the bus, I would bet that he ends up at Goldman Sachs. I wonder what he is doing with all his kickbacks ?

Geithner Said to Be Seeking TARP Extension Until Next October

By Robert Schmidt and Rebecca Christie

Dec. 9 (Bloomberg) -- Treasury SecretaryTimothy Geithner plans to tell Congress that the Obama administration will extend the $700 billion financial-rescue program until next October, according to people familiar with the matter.

While the Troubled Asset Relief Program expires on Dec. 31, Geithner can extend it by notifying Congress. A letter notifying Congress of the extension could come as soon as today, said the people, who declined to be identified. Andrew Williams, a Treasury Department spokesman, declined to comment.

The TARP, passed in October 2008 to prevent a collapse of the financial system, has drawn criticism from Congressional opponents of taxpayer-funded bailouts of banks including Citigroup Inc. The Obama administration, preparing the ground for an extension, has emphasized that the program may also be used to aid homeowners and small companies.

“There has rarely been a less loved or more necessary emergency program than TARP,” President Barack Obama said yesterday in a speech in Washington. “I’m asking my Treasury secretary to continue mobilizing the remaining TARP funds to facilitate lending to small businesses.”

In public comments about the program over the past several weeks, Geithner has cautioned that shutting it down too soon could hurt the economic recovery.

full article here

Bubble Re-Blow Via MBS

More Fed Hot Air

It will not be long until Bernanke extends the QE program, that is if he can keep his job ?

Gold Recoups Most Losses After Bernanke's Comments

By ALLEN SYKORA

U.S. gold futures dropped on Monday, as investors weighed the likelihood of an early interest-rate increase by the Federal Reserve.

December gold fell as low as $1,136.30 in early trading—carrying on from Friday's decline spurred by a better-than-expected payroll report.

Bloomberg News

An employee shows a gold bar at the Argor-Heraeus gold producing and refining plant in Mendrisio, Switzerland.

But Federal Reserve Chairman Ben Bernanke reiterated during the afternoon that the economy remains in questionable health and that interest rates will be hold for an "extended period.''

Gold, seen as a hedge against a declining dollar and inflation, pared some of its losses and settled down $5.40 at $1,163.40 an ounce on the Comex division of the New York Mercantile Exchange.

Gold later resumed its slide in electronic trading. Even so, analysts and traders say the precious metal isn't headed for a big swoon.

Gold prices mirrored moves in the dollar over the past two trading days as each reacted to prospects for rising interest rates. Gold plunged and the dollar soared on Friday after the payroll figures suggested the Fed may raise rates earlier than the market expects.

Once the recovery is strong enough, the central bank will be ready to tighten policy in order to avoid inflation, Mr. Bernanke said in his speech before the Washington Economic Club. He illustrated a wide range of options available to the Fed to implement its exit strategy.

"Though we have begun to see some improvement in economic activity, we still have some way to go before we can be assured that the recovery will be self-sustaining," Mr. Bernanke said.

Bill O'Neill, one of the principals with LOGIC Advisors, said the gold market had been due for some kind of retreat after it previously rose on the heels of dollar weakness. But a widespread selloff isn't likely, he said.

"We're not going to just have all-out selling where gold is going to be down $200 in a week," Mr. O'Neill said. Gold prices could be "choppy" for the remainder of 2009, however, Mr. O'Neill said.

Suki Cooper, precious-metals analyst at Barclays Capital, said gold is likely to still retain support from investors worried about the continued decline of the U.S. dollar and the potential for inflation.

Still, the continuous front-month contract for gold lost $48.60 over the last two days, the largest two-day dollar decline since Oct. 22 and 23, 2008. The two-day percentage decline of 4.01% was the largest since March 9 and 10, 2009.

full article here

The Canary

Payback is going to ugly for Citigroup, or the US taxpayer.

Dubai assets could be 'untouchable', lawyers warn embattled bondholders

Creditors to Dubai World have been warned by lawyers that the assets behind the bonds could be "untouchable" because of the complicated legal structure in the United Arab Emirates (UAE).

By Louise Armitstead
Published: 7:04PM GMT 03 Dec 2009

The bondholders are waiting to hear about Dubai World's plans to restructure $26bn (£15.7bn) of debt, including $6bn in its Nakheel property subsidiary.

Nakheel, which owns some of Dubai's most ambitious projects, including the Palm Islands, issued over half of its debt in the form of a $3.5bn sukuk, or Islamic bond. It was the sukuk's December 14 due date that prompted last week's standstill announcement.

Lawyers have warned that the rules governing sukuks can be muddling. Shaikh Muddassir Siddiqui, head of Islamic finance at Denton Wilde Sapte, said any default of the loan would be governed by sharia laws but added: "Each jurisdiction approaches the sharia elements of financial structures in different ways, according to the requirements of its own law. Neither debtor nor creditor should assume that a single interpretation of the sharia principles shall be applied universally just because the structure has been determined to be sharia-compliant."

For international bondholders, the recovery of their investments may be further complicated by the UAE's foreign ownership laws. Local experts said that even if Nakheel's properties are liquidated, their entitlement could be restricted because assets belonging to the ruling family cannot be seized and sold.

full article here

Timmy Feels The Heat

People, keep up the pressure, they are beginning to crack. Even the biggest shill for the banksters.

Geithner Slams Bonuses, Says Banks Would Have Failed (Update2)

Business ExchangeTwitterFacebook|

By Robert Schmidt

Dec. 4 (Bloomberg) -- Treasury SecretaryTimothy Geithner criticized the record bonuses set to be paid by big banks this year and refuted claims by Goldman Sachs Group Inc. that it would have survived without government aid.

Taking aim at what he called “an era of irresponsibly high bonuses,” Geithner said all banks -- even those that have repaid government aid -- need to restrain the amount they pay their leaders and tie compensation to long-term goals.

“We want to see fundamental constraints on how senior executives are paid at these institutions,” Geithner said in an interview today for Bloomberg Television’s “Political Capital With Al Hunt,” that will air today and through the weekend. “It is very important that we change the way these executives are paid, the form of compensation, this year.”

Lavish pay on Wall Street has become a flashpoint in Washington as PresidentBarack Obama has blamed compensation tied to excessive risk-taking for fueling the financial crisis. Trying to counter some of the anger over the $700 billion banking bailout, the administration has named a special master to approve compensation packages at firms that have gotten exceptional aid.

In the interview, the Treasury chief also disputed claims made by Goldman Chief Executive Officer Lloyd Blankfein that his firm would have survived last year’s financial crisis without assistance from the federal government.

full article here