In The News Today

Posted at 11:05 PM (CST) by & filed under In The News.

Dear Friends,

A society that promotes lies (make believe computer based asset valuation by fiduciaries) as truth (real value) for the profit of the few is NOT a society, but rather a group of animals destined for their own immediate destruction.

Most unfortunately these Wall Street Fat Cat few destroy the many common men in their manic pursuit of personal wealth and egocentric power.

A move like this certainly puts the second coming of our new leadership in question. It screams that the new administration is simply business as usual – fraud.

Millions of attendees at the inauguration prayed otherwise. What a sham if this rumor has any basis.

What a slap in the face for those millions attending the recent inauguration.

Accounting rule change hopes spur Wall St. rally (Reuters)

NEW YORK (Reuters) – Stocks rallied on Thursday on investor hopes that the government’s plan to shore up the financial system will include a change in accounting rules that would stem bank write-downs and spur lending.

Bank stocks reversed losses in late morning to lift the Dow off its lowest level since the bear market low of November 21.

Bank of America (BAC.N) finished up 3 percent, while JPMorgan (JPM.N) rose 2.1 percent and the S&P financial index (.GSPF) rose 1.4 percent. A solid January sales report from Wal-Mart (WMT.N), coupled with better-than-expected reports from a few other retailers added to the positive tone.

"Anything that helps the banks is helpful for the economy if they can start lending," said Giri Cherukuri, head trader at OakBrook Investments LLC, which oversees $1.3 billion in Lisle, Illinois. "Wal-Mart news was good, so that also helped."

The Dow Jones industrial average (.DJI) rose 106.41 points, or 1.34 percent, to 8,063.07. The Standard & Poor’s 500 Index (.SPX) gained 13.62 points, or 1.64 percent, to 845.85. The Nasdaq Composite Index (.IXIC) climbed 31.19 points, or 2.06 percent, to 1,546.24.

The S&P 500 is now off 6.4 percent since the start of 2009, but has risen 12.4 percent since the bear market low hit in November.

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Jim Sinclair’s Commentary

Oh my god, where is the rage?

Bush SEC Holdovers Cite Executive Privilege, Refuse to Answer Questions at Madoff Hearing
By Susie Madrak Thursday Feb 05, 2009 3:01pm

David Sirota on yesterday’s hearing about Bernie Madoff:

At a contentious Financial Services Committee hearing today about the failure of the Securities and Exchange Commission to prevent the Bernie Madoff scandal, the SEC’s General Counsel cited executive privilege as reason that he and the SEC’s enforcement branch were refusing to answer congressional inquiries. You can watch the video here – the executive privilege issue comes at about 5 minutes and 15 seconds into the clip.

As you’ll see, SEC officials refuse to answer the committee’s basic questions about the Madoff scandal, and the agency’s acting general counsel, Andy Vollmer (a Bush holdover and maxed-out donor to John McCain’s presidential campaign) explicitly cites executive privilege as his legal rationale for refusing to provide basic information to federal lawmakers.

Congress has a constitutional obligation to engage in basic fact finding, both in order to legislate reforms at the SEC and to publicly expose how our economy was destroyed by sharks like Madoff. Now, Bush holdovers at the SEC are using executive powers – powers that are now President Obama’s – to prevent Democratic lawmakers from doing their job.

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Jim Sinclair’s Commentary

Today in Pakistan. Another challenge for President Obama.

Seven dead in Pakistan blast: hospital

MULTAN, Pakistan (AFP) — A bomb exploded near a Shiite mosque in the town of Dera Ghazi Khan in central Pakistan on Thursday, killing at least seven people, a hospital doctor said.

Police said the bomb was planted outside the mosque and exploded shortly before a religious gathering got under way.

"I have seen seven bodies," Doctor Pervez Haider, the head of the local hospital, told AFP by telephone.

"We have shifted 25 people to the local hospital, eight of them were in critical condition," local police chief Maqsoodul Hassan said.

The blast shattered windows in nearby buildings, local residents said.

The location of the explosion — close to a Shiite mosque — raised fears that the bombing could be the latest episode in a wave of sectarian violence to rock Pakistan, an overwhelmingly majority Sunni Muslim country.

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Indian Official Links Pakistan’s Spy Agency to Mumbai Attacks
By VOA News
05 February 2009

India’s foreign secretary says Pakistan’s spy agency is linked to planners of the Mumbai terrorist attacks that killed more than 170 people in November.

Shivshankar Menon says the organizers planned, trained and launched the attacks from Pakistan, and that they were and remain clients of the Inter-Services Intelligence, Pakistan’s spy agency.

Indian leaders have repeatedly said that Pakistan’s intelligence agencies have had some role in the Mumbai attacks.

Recently, Indian Prime Minister Manmohan Singh said the terrorists who carried out the Mumbai attacks "must have had the support of some official agencies in Pakistan."

Pakistan’s government rejected Mr. Singh’s remarks as little more than a "propaganda offensive."

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Jim Sinclair’s Commentary

Did you suspect anything different?

Regulator Says Bailout Fund Overpaid Banks
By JACK HEALY
February 6, 2009

Add this to the list of complaints about the government’s Wall Street bailout: When Washington was buying pieces of banks last year, it may have overpaid, by as much as 30 percent.

A regulator overseeing the government’s $700 billion bailout testified Thursday that the Treasury Department paid $254 billion for $176 billion of assets — a shortfall of $76 billion.

“Treasury paid substantially more for the assets it purchased under the TARP than their then-current market value,” said Elizabeth Warren, chairwoman of the Congressional Oversight Panel examining the Troubled Asset Relief Program, or TARP. She cited a valuation study as evidence of the overpayment.

The figures were calculated by studying 10 transactions and then extrapolating their results to all of the TARP purchases in 2008, Ms. Warren said.

“There may be good policy reasons for overpaying,” Ms. Warren said. “But without a clearly delineated reason, we can’t know.”

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Jim Sinclair’s Commentary

Food for thought – is your local bank safe? Probably not.

Banks Sitting On An Inventory Time Bomb
Posted By: Diana Olick
Wednesday, 28 Jan 2009

An interesting little factoid from RealtyTrac, the online foreclosure sale site that tracks all kinds of foreclosure data.

Apparently about 70 percent of foreclosures in its database have not yet been listed on the MLS. I’m wondering why? Why are the banks sitting on all these properties instead of listing them for sale?

Okay, a couple of posibilities:

* The inventory of foreclosed properties has just exploded so rapidly and in such high volumes that the banks can’t process it all as fast as they would like to.

* In a lot of cases it’s taking longer to process the foreclosures themselves and the homes are getting trashed. Before the bank puts the house up for sale it has to do all the repair work, and now more repair work is needed.

Now here’s a possibility that is a bit more disturbing. Rick Sharga of RealtyTrac says he can’t get anyone to confirm it but he can’t get anyone to deny it either:

"The lenders are simply trying to defer the losses to a later date, because having to recognize the losses short term might pose severe risks to the banks in question."

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CIGA Christopher’s Commentary

It seems the honeymoon between Volcker and Summer is over.

That was predictable.

Volcker Chafes at Obama Panel Delay, Strains With Summers Rise
By Robert Schmidt and Julianna Goldman

Feb. 5 (Bloomberg) — Paul Volcker has grown increasingly frustrated over delays in setting up the economic advisory group President Barack Obama picked the former Federal Reserve chairman to lead, people familiar with the matter said.

Volcker, 81, blames Obama’s National Economic Council Director Lawrence Summers for slowing down the effort to organize the panel of outside advisers, the people said. Summers isn’t regularly inviting Volcker to White House meetings and hasn’t shown interest in collaborating on policy or sharing potential solutions to the economic crisis, they said.

While Summers, a former Treasury secretary, oversees the official White House economic policy apparatus, Obama tapped Volcker for a new Economic Recovery Advisory Board charged with injecting fresh, outside ideas into policy debates.

“When you have two strong, highly accomplished, driven people, it’s not unusual that there is going to be a battle over turf,” said James Cox, a professor at Duke University Law School in Durham, North Carolina. “I would hope that Obama doesn’t lose Volcker’s counsel. They need someone to help them think outside the box.”

The contretemps shows the difficulties Volcker, perhaps the world’s most respected economist, may encounter as an outside adviser charged with providing policy alternatives to the president, said William Silber, a finance professor at New York University’s business school.

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