In my links of the day I try to find the links under the wire, articles all the top blogs miss. I'm not afraid to go to Al Jazeera, Kurd Media or to the Pakistan student movement page to bring the real daily news to you.

Wednesday, February 27, 2008

Links of the day 2/27/2008 FDIC to Add Staff as Bank Failures Loom

Gees I hate being the barer of bad news but here it is kiddies. Don’t roll eyes and go looking for happier news because then you will not be prepared for what’s coming.

I stopped reading the New York Times after they gave neo con Bill Krystal a job. Since then I’ve only linked to one of their articles, but today they have one you must read.

Look for the stock market to be very volatile today as Russia dumps dollars one day after Bush auctions off 30 billion dollars to the U.S. Banks.

Personally I think the banks aren’t in as much trouble as they claim. It’s my opinion they along with the neo-cons are intentionally bankrupting America. I’m 100% sure these banks are dumping those dollars for euros. The very wealthy started doing it about 3 or 4 years ago.

I have said it in the past that you better stock up on as much food stuffs and non food as you can. It also looks like wheat will be in short supply as well after it hit an all time high in the market..

Start paying attention to store shelves as food supplies go down. Check canned goods and dry package stuff with long expiration dates. Don’t waste money on condiments like mustard, ketchup and mayo unless you can buy the little packets like you can get at fast food restaurants because once opened they don’t last long without refrigeration. Oh and don’t forget to stock up on pet food too.

Personally I don’t think it really matters who replaces Bush in 2009. The United States is tumbling toward another republican “Great Depression”. There is no stopping it. The U.S. dollar will be worthless by the middle of 2009 so expect a huge exodus of U.S. corporation to move outside the U.S. looking for euros to stay afloat.

Out Of The Archives - Links of the Day

I’m going to bring only 3 articles out of the archives today to back up what I just told you about, dumping the dollar for euros. Since most of you don’t read the financial news and the MSM isn’t going to tell you much about it. I will. Why any democrat would want take over after what Bushco has done is just crazy because whoever are they their going to take a real beating from the American people.

We are all screwed. Except those 1% Bush gave all those tax breaks to. His Base, which means Al Qaeda. They have already dumped much of their dollars for euros.

U.A.E. to sell dollars for euros

By Matthew Brown Bloomberg News
Published: December 27, 2006

ABU DHABI: The United Arab Emirates plans to convert 8 percent of its foreign-exchange reserves to euros from dollars before September, the latest sign of growing global disaffection with the weakening U.S. currency.

The U.A.E. has started, "in a limited way," to sell part of its dollar reserves, the governor of the country's central bank, Sultan Bin Nasser al-Suwaidi, said in an interview. "We will accumulate euros each time the market appears to dip" as part of a plan to expand the country's holding of euros to 10 percent of the total from the current 2 percent.

The Gulf state is among oil producers, including Iran, Venezuela and Indonesia, looking to shift their currency reserves into euros or sell their oil, which is now priced in dollars, for euros. The total value of the reserves held by the U.A.E. is $24.9 billion, Suwaidi said.

The dollar has fallen more than 10 percent this year against the euro.
Part of the reason for the decline is the outlook for slower U.S. growth, which makes the dollar a less attractive investment.

But fears that the dollar's level is unsustainable because of the heavy indebtedness of the United States to other countries is also behind the weakness this year, analysts said.
The shift to euros underscores its growing role as a reserve currency nearly eight years after its establishment. Central banks often keep the details about their currency holdings a secret.

The move by the U.A.E. central bank "is hard evidence that diversification is happening," said Shaun Osborne, chief currency strategist at TD Securities in Toronto. "This is negative for the dollar in a broad sense as it reflects falling confidence in the currency."

Central banks in Russia, Switzerland and New Zealand are also diversifying away from the dollar and into yen after the Japanese currency reached a 10- month low against its biggest trading partners in October.

Gulf Arab energy producers will earn as much as $500 billion from oil sales this year, the International Monetary Fund forecasts. The region's central bank reserves represent a fraction of the currency holdings of state-owned investment firms like the Abu Dhabi Investment Authority, which is estimated to have more than $500 billion under management.

But the signal that such a move sends to financial markets is a negative one.
"It is a recognition of the vulnerability of the dollar over the coming year," Simon Williams, an economist with HSBC Holdings, said by phone from Dubai.

The euro rose to $1.3123 from $1.3098 after Suwaidi's comments were published Wednesday.

"This is not confined to the U.A.E. There's a general awareness across the Gulf of the benefits of diversifying currency holdings," Williams said.

The U.S. current account deficit widened to $225.6 billion in the third quarter. Oil producers in the Middle East and Central Asia will run a surplus of $322 billion for all of 2006, according to the International Monetary Fund.

Total foreign holdings of U.S. Treasury securities — which generally support the dollar — increased to a record $2.16 trillion in September, just under half of the $4.34 trillion outstanding.


Dumping U.S. Dollars:

The New International Pastime
Today's comment is by Eric Roseman, Investment Director for The Sovereign Society and editor of both Commodity Trend Alert and Global Mutual Fund Investor.

Dear A-Letter Reader,
Add the United Arab Emirates (UAE) to the growing list of foreign central banks shedding their U.S. dollar reserves.

Since 2002, more than a dozen central banks worldwide have accelerated their dollar sales as the buck continues to slide. Since the advent of the euro in January 1999, central banks have been gradually increasing their holdings of the single European currency. But with the dollar dropping a cumulative 44% since peaking in January 2002, the selling has accelerated. In 2006, the dollar declined 11.3% versus the euro.

Last week, the Emirates announced that their relatively small foreign-exchange reserves, only US$25 billion dollars, would be pared in favor of the euro. The UAE holds 98% of its reserves in U.S. dollars.

That US$25 billion might be a puny number compared to the grand scale of total dollar reserves held by other central banks, but it's definitely a bad sign for the United States.
The other Arab Gulf states, including Saudi Arabia, Kuwait, Qatar, Bahrain, and Oman collectively have over $220 billion dollars in trade surpluses -- that cash must be invested in international markets. Increasingly, they'll also be looking for reduce their dollar-based holdings in favor of foreign currencies.

Over the last four years, central banks in China, Argentina, Russia, South Africa, Cuba, Iran, and several Gulf Arab states have cut their U.S. dollar reserves in favor of the euro and other foreign currencies.

Unless the United States addresses its massive twin deficits, the selling will continue. At some point over the next several years, the Federal Reserve will have no choice but to raise interest rates to attract foreign creditors. Deficit spending remains a major drag in Washington because military expenses in particular have mushroomed since 2002. The previous bout of military spending in the late 1960s and early 1970s (Vietnam) led to President Nixon breaking the gold standard. And that sent inflation into orbit and crushed the U.S. dollar up until 1982.

At some point, the United States must fix its balance-sheet, or foreign creditors will do the job for them.

And what about Europe? Don't get too excited about the Europeans protecting your purchasing power longer term. Over the last 18 months, gold prices have far exceeded the euro's appreciation versus the dollar. Since June 2005, the dollar has shed 9% against the euro while gold prices have soared 41% in euro terms.

In a bull market, gold is rising against all major currencies since last year. It's real money, no one else's liability and still the ultimate in purchasing power protection.

ERIC ROSEMAN, Investment Director
on behalf of The Sovereign Society

EDITOR'S NOTE: Dollars are being dumped... economies are slowing... so where should you invest your money in 2007? You can find out by dialing in to a very special teleconference on January 16th. Investment Director, Eric Roseman will co-host the teleconference with other leading Sovereign Society experts. And together they'll all share their best investment and offshore predictions for the new year.


Traders Dump Dollars on Rising Oil Prices and Upcoming ECB Meeting
Tuesday, 01 August 2006 21:30:36 GMT

Written by Kathy Lien,
Chief Currency Strategist • Traders Dump Dollars on Rising Oil Prices and Upcoming ECB Meeting
• Euro at 1.29 Could Make ECB Uneasy
• Bank of Japan Hints of Another Rate Hike by Year End

US Dollar
There is always more than meets the eye when it comes to the US dollar. Stronger economic data and dollar supportive comments from new US Treasury Secretary Paulson helped to rally the dollar for only a brief moment before the gains were completely erased at the London close. Increasing tensions in the Middle East and a tropical storm brewing near the oil refineries in the Gulf of Mexico has traders worried that oil prices could hit a new record high over the next few weeks. With temperatures heating up around the US and the possibility that a new national record will be set in July for the warmest month since 1895, energy usage is sure to be reaching extreme levels. This means that utility bills for many families across the nation will be painful for the month of July and possibly even August. Combining this with high gasoline prices and increasing mortgage payments, traders are continuing to accentuate the negative and minimizing the positive when it comes to outlook for the US economy. Conflicts in Lebanon have yet to ease while Iran rejected the UN’s calls for an end to their nuclear development program by the end of the month. Without even attempting to try to delay international outrage, Iran has branded the UN Security Council’s resolution as worthless while a high level Iranian official said that “Iran will not take part in a game which it will lose.” The only barrier standing between the EUR/USD and 1.30 is the possibility of another rate hike by the Federal Reserve next week. Inflationary pressures continue to remain very strong with the annualized core PCE deflator, which is one of the Fed’s favorite inflation barometers hitting a four year high last month. The growth of key core prices increased by 2.4 percent over the past year, which marked the third straight monthly rise. After Friday’s disappointing GDP numbers, a quarter point rate hike is now back on the table. This is especially true following the increase in the ISM manufacturing index and the prices paid component for the month of July. In June, personal income and personal spending continued to rise with income outpacing spending. Finally, pending home sales and construction spending were also strong in the face of expectations of a decline. Yet, despite all of today’s positive US data, the increasing tensions in the Middle East and the prospects of a rate hike by the European Central bank on Thursday has prevented the dollar from sustaining its gains. However, at the same time, the higher the Euro climbs, the more difficult each penny rise will be.

The Euro is now coming within an arm’s length of its 12 month high of 1.2980, which it hit at the beginning of last month. The Euro has been rallying as another dose of decent Eurozone economic data continues to confirm the market’s predictions for a quarter point interest rate hike by the European Central Bank on Thursday. However, if the Euro does continue to rally and hits 1.2900 before the ECB meeting, the central bank may rethink the message that they plan on sending to the market. We have long said that the value of the Euro is a key determinant of how aggressive the ECB plans to be with interest rates. As an export dependent economy, the stronger the Euro, the more pressure it has on the export sector. Talking up future rate hikes with the Euro at current levels could easily push it above 1.30. This would not be the first time that ECB President Trichet or his constituents used verbal intervention to stem the Euro’s rise. The central bank could easily unload some of the upside pressure on the Euro by toning down his comments at the press conference following the meeting by being ambiguous about another rate hike over the next few months. This possibility is very real, especially with many other central banks having already slowed down or ended their own tightening cycle. The ECB may want to adopt a wait and see approach after this week’s hike and take a back seat to watch what the Federal Reserve does with its own monetary policy next week.

British Pound
The British pound has rallied against the US dollar for the fifth consecutive trading day. Such a long stretch of continuous pound strength has not been seen since August of 2005. Despite a drop in the outlook for the UK manufacturing sector for the month of July, traders latched onto the rise in house prices as well as broad dollar weakness. Nationwide house prices increased by 0.8 percent in the month of July, which were double market expectations. The improvement of the housing sector is sure to be comforting the Bank of England as the country continues to stabilize. Even though the manufacturing sector PMI index fell from 55.0 to 53.8, the index remains in expansionary territory. The details are not as cleanly optimistic with the output and new orders components taking a sharp dive. For the time being, this should give the Bank of England good reason to keep their interest rates on hold at least until the fourth quarter.

Japanese Yen
The Japanese Yen continues to remain strong against the US dollar but gave back some of its recent gains against the Euro, Swiss Franc and British pound. Comments from Bank of Japan Governor Fukui indicate that the trajectory of interest rates is undoubtedly upwards. Following comments from monetary policy member Suda last week, Fukui said today that the central bank is not ruling out the possibility of another interest rate hike by the end of the year. Fukui warned that a prolonged period of excessively low interest rates could overheat the corporate sector. We still believe that the BoJ could raise rates later this year, especially after they have given the markets two to three months to absorb their first interest rate hike. The Japanese are known to be conservative and they are expected to approach monetary policy in the same way. Gradual rate hikes with plenty of advance warning and then time for the economy and the market’s to absorb the hikes will probably be the best way to go for a country that has no interest in inducing a rapid appreciation in their currency. Remember, Japan is also an export dependent nation that always has one eye on the yen and its impact on the export sector.


NOW do you understand what has been happening? I’m no financial wizard as I’ve said but I can READ!


Current Links of the Day.

I been watching the stock market and when it goes down energy stocks go up. Oil, natural gas, propane and gasoline prices have skyrocketed. Now I can see gas going up because we import much of our oil, but we have plenty of natural gas and propane of our own, so why the increase in these domestic products? That I haven’t figured out yet, when I do I’ll let you know.

Oh, we are really screwed.

Russia Quietly Starts to Shift Its Oil Trade Into Rubles

By ANDREW E. KRAMER Published: February 27, 2008

MOSCOW — Americans surely found little to celebrate when the price of oil settled above $100 a barrel last week.

They could, though, be thankful that oil is still priced in dollars, making the milestone of triple-digit oil prices noteworthy at all.

Russia, the world’s second-largest oil-exporting nation after Saudi Arabia, has been quietly preparing to switch trading in Russian Ural Blend oil, the country’s primary export, to the ruble from the dollar. Industry analysts and officials, however, say that this change, if it comes, is still some time off.

The Russian effort began modestly this month, with trading in refined products for the domestic market.

Still, the effort to squeeze the dollar out of Russian oil sales is yet another project notable for swagger and ambition by the Kremlin, which has already wielded its energy wealth to assert influence in Eastern Europe and former Soviet states.

“They are serious,” said Yaroslav Lissovolik, the chief economist at Deutsche Bank in Moscow. “This is something they are giving priority to.”

Oil trading is nearly always denominated in dollars. When Middle Eastern oil is sold to Asia, for example, the price is set in dollars.

Similarly, Russia’s large trade with Western Europe and the former Soviet states in crude oil and natural gas is conducted in dollar-denominated contracts. Gazprom, the natural gas monopoly, set the price of gas in Ukraine at $179 per 1,000 cubic meters in 2008, for example. There are no proposals yet to switch gas pricing away from dollars.

As a result, companies and countries that buy petroleum products are encouraged to hold dollar reserves to pay for their supplies, coincidentally helping the American economy support its trade deficit.

Russia would like to change this practice, at least among its customers, as a means of elevating the importance of the ruble, a new source of national pride after gaining 30 percent against the dollar during the current oil boom.

In a speech on economic policy this month, Dmitri A. Medvedev, a deputy prime minister and the likely successor to President Vladimir V. Putin in elections on March 2, said Russia should seize opportunities created by the weak dollar.

“Today, the global economy is going through uneasy times,” Mr. Medvedev said. “The role of the key reserve currencies is under review. And we must take advantage of it.” He asserted that “the ruble will de facto become one of the regional reserve currencies.”

Other oil-exporting countries are also chafing at dealing in the weakening dollar.
Since 2005, Iran, the world’s fourth-largest oil exporter, has tried to open a commodity exchange to trade oil in currencies other than the dollar. The Iranian ambassador to Russia said Iran might choose rubles to free his country from “dollar slavery.”

To be sure, some economists have dismissed the project as improbable, given the exotic nature of a security — oil futures contracts denominated in rubles — that would blend currency risk with the dollar-based global oil market.

Ruble-denominated futures contracts for Ural Blend, the main Russian grade, would be attractive only if the dollar continues to depreciate, said Vitaly Y. Yermakov, research director for Russian and Caspian energy at Cambridge Energy Research Associates.

“There is a big distance between the desire to trade commodities for rubles and the ability to do so,” he said.

All this has not stopped the Kremlin from trying.

In a sign of the government’s seriousness, a new glass-and-marble high-rise home for a ruble-denominated commodity exchange is rising this spring in a prestigious district in St. Petersburg, Russia’s second-largest city after Moscow. The exchange will occupy three floors of the 16-story tower on Vasilievsky Island, one of the islands that make up the historic city center.

The director of the St. Petersburg exchange, Viktor V. Nikolayev, said that the intention was to move slowly and gain market acceptance; the government will not strong-arm sellers or buyers onto the exchange, even in an industry dominated by the state.

Web-based trading for refined products like gasoline or diesel is being introduced in three phases for domestic customers, beginning with government buyers like the Russian navy or municipal bus companies. Private brokers will be allowed to trade in March; futures contracts will be introduced in April.

Mr. Nikolayev said no timeline had been established for trading for export on the exchange, which also handles grain, sugar, mineral fertilizer, cement and esoteric financial products like Russian government beef and pork import quotas — all in rubles.
“We are in Russia, and the currency is rubles, not euros, not dollars,” he said. “We don’t want to depend on the rise or fall of the dollar.”

“We will trade in rubles, to strengthen the ruble,” he said.


If only Reagan had listen to Carter and continued with his energy policies we might not be in this mess. But republicans care very little for the common man, their loyalties lie with the corporations and banks.

We the little guy is drowning in debt and Bush is bailing out the banks who screwed us with the sub-prime loans screwed themselves at the same time.

Where’s our bail out for WE THE PEOPLE?


Oil hits a high; some in U.S. see $4 gas by spring

By Jad Mouawad Published: February 27, 2008 

Gasoline prices, which for months lagged the big run-up in the price of oil, are suddenly rising quickly, with some experts fearing they could hit $4 a gallon by spring. Diesel is hitting new records daily and oil closed at an all-time high on Tuesday of $100.88 a barrel.

The increases could not come at a worse time for the economy. With growth slowing, high energy prices that were once easily absorbed by consumers are now more likely to act as a drag on household budgets, leaving people with less money to spend elsewhere. These costs could exacerbate the nation's economic woes, piling a fresh energy shock on top of the turmoil in credit and housing.

"The effect of high oil prices today could be the difference between having a recession and not having a recession," said Kenneth Rogoff, a Harvard University economist.

The depth of the nation's economic problems became clearer Tuesday with the release of figures showing that prices at the producer level rose 1 percent in January, driven in large measure by energy costs. Compared with a year ago, prices were up 7.4 percent, the worst producer price inflation in the United States since 1981.

Other new figures showed that home prices around the country are falling at an accelerating pace, suggesting no end is in sight for the housing meltdown. As of Tuesday, regular gasoline was selling at a nationwide average of $3.14 a gallon, according to AAA, the automobile club, up from $2.35 a year ago. The price has jumped 19 cents a gallon in two weeks. Energy specialists predict that as demand picks up further this spring and summer, retail prices will surpass the high of $3.23 a gallon set last Memorial Day weekend.

On Tuesday, diesel prices rose to a record $3.60 a gallon, compared with $2.62 a gallon last year.

For a decade, rising oil prices had failed to dent global economic growth. In the United States, consumers absorbed the higher costs thanks to easy credit and rising prosperity, while in developing countries, government subsidies helped ease the pain. The rise in energy prices was a result of growing demand around the world.

The price of oil has quadrupled in six years, and Tuesday's close was not far below the inflation-adjusted all-time high set in April 1980, after the Iranian revolution. That record, $39.50 a barrel, equals $103.76 in today's money.

As oil prices spiked last fall, low wintertime gasoline demand helped keep prices in check. But now, experts say, the price of oil is finally showing up at the pump.
For Americans like Phyllis Berry, a 31-year-old General Motors factory worker in Cleveland, gasoline costs are starting to hurt.

"I used to fill it up pretty regularly, but now I drive it until the tank is almost empty, looking for the cheapest place to buy gas," said Berry, who drives a beat-up Chevrolet Caravan. She said that she used to take her four children to the movies four or five times a month. But with the cost of gas, tickets, popcorn and soda adding up to $70, they now go only once a month.Still, things are not quite as bad as during the 1970s and 1980s oil shocks. In the early 1980s, at the height of the last energy crisis, energy accounted for more than 8 percent of household spending. As prices fell and the economy became less energy intensive, energy costs fell under 4 percent of household spending in the early 1990s.

With the run-up in prices in recent years, economists say energy's share of disposable income is slowly creeping up again. Last December, that figure reached 6.1 percent, the highest level since 1985. The increase of two percentage points — amounting to $200 billion — is a huge sum, a little less than half what Americans spend each year on new cars and automobile parts.

"You're adding an oil shock on top of a crunch on credit and a housing collapse," said Nigel Gault, an economist at Global Insight. "Even the U.S. economy cannot withstand all of that at the same time."

American consumers have responded belatedly by cutting back on their energy use. Oil demand in the United States grew by just 0.4 percent in 2007 and is expected to be flat in 2008.

But global oil demand, the relentless driver behind higher prices, is still expected to increase by 1.4 million barrels a day this year, analysts estimate. That growth, from China and the Middle East, may help keep prices up, whatever happens to the American economy.

Continued to page 2


OMG we are really screwed. Did you SEE this on the MSM yesterday? NO!!!!

FDIC to Add Staff as Bank Failures Loom

February 26, 2008; Page A2
WASHINGTON -- The Federal Deposit Insurance Corp. is taking steps to brace for an increase in failed financial institutions as the nation's housing and credit markets continue to worsen.

The FDIC is looking to bring back 25 retirees from its division of resolutions and receiverships. Many of these agency veterans likely worked for the FDIC during the late 1980s and early 1990s, when more than 1,000 financial institutions failed amid the savings-and-loan crisis.

FDIC spokesman Andrew Gray said the agency was looking to bulk up "for preparedness purposes." The division now has 223 employees, mostly based in Dallas.
The agency, which insures accounts at more than 8,000 financial institutions, is also seeking to hire an outside firm that would help manage mortgages and other assets at insolvent banks, according to a newspaper advertisement.

In public, policy makers are debating what role the government should play in trying to stabilize the housing market and minimize foreclosures. Meanwhile, regulators have worked discreetly behind the scenes to closely monitor the growing number of troubled banks and thrifts considered at risk.

"Regulators are bracing for well over 100 bank failures in the next 12 to 24 months, with concentrations in Rust Belt states like Michigan and Ohio, and the states that are suffering severe housing-market problems like California, Florida, and Georgia," said Jaret Seiberg, Washington policy analyst for financial-services firm Stanford Group.
In job postings on its Web site, the FDIC said it is looking for people with "skill in performing duties associated with a financial-institution closing, such as receivership management, resolutions and/or asset disposition; knowledge of the resolutions process as it relates to complex financial institutions." Such positions would require "very frequent overnight travel," the posting said, and would pay up to $180,770.

"The notion of bringing back some people who have been through it before is very smart," said William Isaac, who was FDIC chairman from 1981 until 1985. All told, the FDIC has roughly 4,600 employees, far fewer than the about 15,000 it had as recently as 1992.

On Sunday, the FDIC ran a newspaper ad seeking companies that could service commercial loans, mortgages and student loans in the event of a bank failure. It didn't say how much a company could earn in this area.

The FDIC rated 65 banks and thrifts as "problem" institutions at the end of the third quarter of 2007, up from 47 institutions a year earlier. Both figures are low by historical standards. At the end of 1993, there were 572 "problem" banks and thrifts. The FDIC is expected to update its data on "problem" institutions today.

Before the housing market soured, the banking industry was enjoying one of its most profitable stretches in U.S. history. There wasn't a single bank failure from July 2005 through January 2007, an unprecedented span.

There have only been four bank failures in the past 12 months, a rate the FDIC has easily been able to handle.

In many parts of the country, the housing-market decline has hamstrung banks, and regulators have reported weakening performance of commercial real estate, small business and credit-card loans. Exacerbating the situation is a cash-flow crunch, which makes it harder for banks to obtain funding to originate new loans.

FDIC Chairman Sheila Bair, Comptroller of the Currency John Dugan and Office of Thrift Supervision Director John Reich have warned of a pickup in bank failures. Last week, Mr. Reich reported that the thrift industry lost a record $5.2 billion in the fourth quarter.

The FDIC was created by Congress in the 1930s after a series of bank runs during the Great Depression. At the end of 2007, it had $52.4 billion in its fund that backstops the nation's insured deposits.

Write to Damian Paletta at


Fed auctions $30 billion

By MARTIN CRUTSINGER, AP Economics Writer Tue Feb 26, 12:17 PM ET

WASHINGTON - The Federal Reserve, seeking to combat effects of the credit crisis, said Tuesday it had auctioned another $30 billion in funds to commercial banks, at an interest rate of 3.080 percent. It was the sixth in a series of auctions that so far have pumped $160 billion into the nation's banking system in an effort to provide cash-strapped banks with extra reserves.

The Fed's hope is that the increased resources will keep banks lending and prevent a severe credit squeeze from making the current economic slowdown worse.

The 3.080 percent interest rate set at the auction was down from a rate of 3.010 percent at the last auction held on Feb. 11. It was the lowest rate for any of the six auctions held since the Fed started this new process in December.

Analysts saw the steady rate declines as evidence that the Fed was having success at supplying funds to the nation's banks. They said it also reflected the aggressive rate cuts engineered by the Fed in January.

The central bank cut its target for the federal funds rate, the interest that banks charge each other, by 1.25 percentage points, the biggest one-month move in a quarter century, as it stepped up efforts to keep the weakening economy from falling into a recession.
Federal Reserve Chairman Ben Bernanke is scheduled to deliver the Fed's twice-a-year economic report to Congress on Wednesday. Financial markets are closely watching to see whether Bernanke signals further rate cuts will be likely, given a string of weak economic reports, or whether he will raise concerns about a jump in inflation that occurred in January which could mean the Fed is rethinking the pace of its rate cuts.
The Fed adopted its new auction process in December after it had only limited success in encouraging banks to use its "discount window" where the Fed makes direct loans to commercial banks.

The Fed began with two auctions totaling $20 billion each in December and then upped the auction amount to $30 billion for each auction beginning with two auctions in January and two more in February.

The total of bids from banks at the auction this week was $67.96 billion for the $30 billion that was provided in short-term 28-day loans.


And last but not least Michael Rivero’s “What Really Happened”

He had so many good stuff today I posted his whole page today. You may want to read his links from yesterday too. Like the article on a home that changed hands 3 times so fast that no one knew the owners son sat dead in it.

February 26, 2008
FDIC to Add Staff as Bank Failures Loom FDIC expects 100 bank failures in next 12 to 24 months. Bringing back retirees. - M. R.

U.S. Home Foreclosures Jump 90% as Mortgages Reset Bank seizures of U.S. homes almost doubled in January as property owners failed to make higher payments on adjustable-rate mortgages.

Key home price index shows record decline U.S. home prices dropped 8.9 percent in the final quarter of 2007 compared with a year ago, Standard & Poor’s said Tuesday, the steepest decline in the 20-year history of its housing index.

After subprime debacle, U.S. wrestles with question of bank bailouts Over the past two decades, few industries have lobbied more ferociously or effectively than banks to get the government out of its business and to obtain freer rein for "financial innovation."
But as losses from bad mortgages and mortgage-backed securities climb past $200 billion, talk among banking executives about a major government rescue plan is suddenly coming into fashion.

Greenspan Urges Gulf States To Abandon Dollar "It [de-pegging] is probably the most useful thing that can be done to stop the increasing influence of foreign assets on the monetary system and therefore the monetary base which is basically the major force in inflationary pressures," Greenspan told the Abu Dhabi Corporate Leadership Forum yesterday.

Greenspan's zeal to destroy the dollar is evident in numerous public statements he has made predicting the replacement of the dollar with the Euro as the world reserve currency
Although the tone of this article is very strident, Greenspan isn't saying anything that world financiers don't already know.

And with a guy like Greenspan, you always have the complete comfort of knowing who he's really working for: himself. - M. R.

Foreclosures up 57 percent in the past year The number of homes facing foreclosure jumped 57 percent in January compared to a year ago, with lenders increasingly forced to take possession of homes they couldn’t unload at auctions, a mortgage research firm said Monday. One has to wonder precisely for whom "the fundamentals of this economy are sound". - M. R.

One in 10 Home Loans Under Water And one in every five homes is in tax trouble.
When We The People kicked out the government in 1776, the total aggregate tax rate was about ten percent. Now it is above fifty percent and rising. - M. R.

World Grain Demand Straining U.S. Supply Okay, so the global warming "cult" promised us all that if we turned food production farmland into ethanol production, that we would have a zero carbon footprint source of energy.

Of course, it didn't work out that way because the process used to turn corn into ethanol actually produces more greenhouse gas than just burning an equivalent amount of gasoline. And since ethanol actually contains less chemical energy than the equivalent amount of gasoline, you have to buy MORE of this already-expensive concoction to drive the same number of miles.
Meanwhile, because less land is growing food, now we have food shortages, and because the US dollar is in decline, American agricultural corporations are selling the food grown in the United States to foreign markets ... leaving US store shelves empty.

Good thinking, guys. Real Einstein-class brains you got there! - M. R.


Other Links that may interest you

Please go gracefully: Letter for the (retd) General

Mr. Musharraf,

You have stated time and again that you will quit (leave the Presidency) if the people don't want you. On 18th February the nation has spoken. They have repudiated you, your policies,and your hand-picked party, (which you have openly referred to as your party). Please stick to your promise, which you are now trying to wriggle out of by asserting that you have been elected for five years by a competent electoral college. You are fully aware that a lame duck or dying electoral college was not competent to elect you, nor were you eligible to be elected in uniform or out of it, since the Constitution specifically prohibits it. You knew what would be the verdict of the Supreme Court against you. Therefore on the advice of Pirzada and Malik Qayyum you illegally proclaimed emergency on 3rd November as COAS, , suspended the Constitution, removed the Superior judiciary, imposed PCO and obtained a judgment in your favour through a bunch of judges who like you, violated their solemn oaths to uphold and protect the Constitution. Not even Pharoah or Nero practiced such diabolical schemes.


People's Resistance Judicial Bus Rally: Videos and Account

1. Reception given at Hyderabad
2. Excerpt from speech by CJ Sabihuddin Ahmed
Accompanying the "Judicial Bus" there were over 60 cars in the caravan, several motor-cycles, one bus and two Suzuki vans packed with those who could not bring cars. Chief Justice Sabeehuddin Ahmed, 13 non-PCO judges of Sind High Court, Justice Ghulam Rabbani of Supreme Court, Mr. Munir Malik and Mr. Rasheed Razvi were in the judicial bus.Several cars which were not part of the caravan joined it along the way on Super Highway and raised pro-judiciary slogans and victory signs. It was also pleasant to see the spirit on the streets of Hyderabad where many bystanders joined in. On one intersection in Hyderabad, traffic policemen smiled and nodded their heads to the slogans as they stopped traffic to let the rally pass through.



U.S. expects 140,000 troops in Iraq after surge

Mon Feb 25, 2:08 PM ET
WASHINGTON (Reuters) - The United States expects to have 140,000 troops in Iraq in July after withdrawing five combat brigades, leaving a force larger than before it began pouring in troops last year, the Pentagon said on Monday.

Army Lt. Gen. Carter Ham, director of operations for the Joint Chiefs of Staff, also told reporters that the number of U.S. forces in Afghanistan is expected to climb to an all-time high of 32,000 troops by late summer, from about 28,000 today, as thousands of Marines take up combat and training duties.

"These force posture levels are truly conditions based and driven by the mission requirements and the assessments of commanders on the ground," Ham said at a Pentagon briefing.

There were some 132,000 U.S. troops in Iraq before President George W. Bush ordered a surge of about 30,000 more to curb rampant violence that threatened to plunge the country into all-out civil war.

U.S. commanders plan by summer to have withdrawn more than 20,000 combat troops deployed as part of the surge.


Turk envoy tells Iraq no timetable for troop pullout

Wed Feb 27, 2008 7:38am EST
By Ahmed Rasheed and Mohammed Abbas

BAGHDAD (Reuters) - Turkey declined to give Iraq a timetable for withdrawal of troops fighting Kurdish guerrillas on Wednesday, resisting pressure from the United States and other allies for a quick resolution.

Turkey's military General Staff said another 77 Kurdistan Workers Party (PKK) rebels had been killed in heavy fighting since Tuesday night, taking the death toll among the rebels to 230 since Turkey's offensive in northern Iraq began a week ago.

"Our objective is clear, our mission is clear and there is no timetable until...those terrorist bases are eliminated," Turkish envoy Ahmet Davutoglu told a news conference after talks in Baghdad with Iraqi Foreign Minister Hoshiyar Zebari.

Thousands of Turkish troops crossed the border last Thursday to root out PKK fighters who have used mountainous northern Iraq as a base for their fight for self-rule in the mainly Kurdish southeast of Turkey since the 1990s.

Acting Iraqi Prime Minister Barham Saleh warned that a prolonged offensive would lead to "dire" consequences for the region and repeated Baghdad's demand that the incursion end.



The Bush Bust of '08

“It's All Downhill From Here, Folks”

By Mike Whitney

"I just saw a picture Bernanke stripped to the waist in the boiler-room shoveling greenbacks into the furnace.” Rob Dawg, Calculated Risk blog-site

On January 14, 2008 the FDIC web site began posting the rules for reimbursing depositors in the event of a bank failure. The Federal Deposit Insurance Corporation (FDIC) is required to “determine the total insured amount for each of the day of the failure” and return their money as quickly as possible. The agency is “modernizing its current business processes and procedures for determining deposit insurance coverage in the event of a failure of one of the largest insured depository institutions.” (

The implication is clear, the FDIC has begun the “death watch” on the many banks which are currently drowning in their own red ink. The problem for the FDIC is that it has never supervised a bank failure which exceeded 175,000 accounts. So the impending financial tsunami is likely to be a crash-course in crisis management. Today some of the larger banks have more than 50 million depositors, which will make the FDIC's job nearly impossible.

Good luck.


OK that’s it I’ve had enough for one day . How about you?

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Bush' Way of Bringing the Troops Home

Bush' Way of Bringing the Troops Home
If Not Now When?