In The News Today

Posted at 5:16 PM (CST) by & filed under In The News.

Dear CIGAs,

This might be what the reporter thought he heard, but Volcker was specific.

Level off yes, but the crap is here to stay.

By the way, did anyone see any of that Fiscal Stimulation often discussed during the very early period of this administration?

My street still looks like the day after.

Volcker Says Economy ‘Leveling Off,’ No Need for More Stimulus
By Michael McKee

April 29 (Bloomberg) — The U.S. economy is “leveling off at a low level” and doesn’t need a second fiscal stimulus package, said former Federal Reserve Chairman Paul Volcker, one of President Barack Obama’s top economic advisers.

Volcker, head of Obama’s Economic Recovery Advisory Board, said the 6.1 percent decline in first-quarter gross domestic product reported by the government today was “expected.” More recent data show the contraction in housing, business spending and inventories has slowed, and stimulus spending is only just beginning to hit the economy, he said.

Still, the economy is functioning only by “the grace of government intervention” and “we’re in for a long slog” before a recovery takes hold, Volcker said on Bloomberg Television’s “Conversations with Judy Woodruff” airing this weekend. Government help will continue, and the administration won’t let any banks fail, he said.

“I’m not here to tell you the economy is going to recover very strongly in the short run,” Volcker said. “There is reason to believe that it should be leveling off, at a low level.”

While Volcker suggested the economy may not need a second stimulus, he said growth isn’t likely to pick up markedly for several years. What he calls the “Great Recession” differs from previous contractions because it’s global in scale and because the financial system has broken down.

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Jim Sinclair’s Commentary

The definition of this is called CIVIL WAR.

28 April 2009 http://nightwatch.afcea.org/

Pakistan:  Armed militants in Pir Baba area of Buner District took hostage more than 71 security officials after inviting them to talks in a local mosque near the famous shrine, a source from the district told The News. They included the station house officer (SHO) of the Pir Baba police station, his 20 constables and around 50 personnel of the paramilitary Frontier Constabulary (FC). 

This action was apparently the first retaliation for the start of government security operations in Buner.

Today the government took action to drive Pakistani Taliban from Buner, using air strikes and ground forces.  Last week, the militants faked their exit from the area, Dawn News reported, citing the Director-General of Inter Services Public Relations. The Director said the Taliban had ignored warnings to vacate the area and had been kidnapping young boys to join the Taliban.

Helicopter gunships attacked Taliban positions and the Taliban blew up the main bridge in Buner’s Ambala area, after the Pakistani Taliban ignored government warnings to return to Swat District. Interior Minister Rehman Malik said, Reuters reported. Malik said around 450 Taliban militants entered Buner on 27 April.

In Baluchistan Province, probable Baluchi separatists blew up a railway track near the town of Sariab, just outside of Quetta, the provincial capital, Aaj TV reported. Sariab is located on highway N-25, used to transport supplies to NATO forces in Afghanistan.

The Baluchis regularly attack the railroads and pipelines in the province. They take a few hours to repair. Most of the attacks register that the Baluchis are unhappy. Only one attack was serious. They nearly assassinated Musharraf during a visit to a Corps headquarters with lucky hits by mortar fire on the golf course. Lousy Pakistan Army security for the Chief of Army Staff and President, what.

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Jim Sinclair’s Commentary

And so the seeds of further depreciation of a once strong democracy are planted in putrid Washington soil.

Goldman Sachs Hires Barney Frank Staffer To Be Its Lobbyist

The Goldman Sachs relationshp with Congress has just gotten even more intimate. Goldman has grown another tentacle, designed to grab directly at the House Financial Services Committee chair Rep. Barney Frank, D-Mass.

The new top lobbyist, Michael Paese, was recently the top staffer to Frank. He has been a registered lobbyist for the Securities Industries and Financial Markets Association since he left Frank’s committee in September and will join Goldman as director of government affairs.

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Jim Sinclair’s Commentary

Just what the Chinese pray for – buy gold and therein dump dollars.

Mr. Frank must be referring to B of A, Citi and GM.

US Rep Frank wants $4 bln of IMF gold sales for poor
Wed Apr 29, 2009 7:48pm BST

WASHINGTON, April 29 (Reuters) – A senior U.S. House of Representatives Democrat, Rep. Barney Frank, said on Wednesday he supported authorization from the U.S. Congress of planned gold sales by the International Monetary Fund, but only if $4 billion of the proceeds go to loans for poor countries.

"I am for gold sales only if it allows $4 billion for poor countries," Frank, chairman of the House Financial Services Committee, told Reuters. "I will not support it if it doesn’t say that." He said the U.S. Treasury Department also supported this condition.

The IMF plans to sell about 403 tonnes of its gold reserves to finance administrative expenses and give financial aid to poor countries. But the U.S. Congress has to authorize the sales.

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Jim Sinclair’s Commentary

This is the result of OTC derivatives on Austrian railroads, but not to worry, as their investment is insured by more OTC derivatives called defaulted Credit Default Derivatives.

The powerful OTC derivative lobby in Euroland might be just a tad underfunded and will apply to the ECB for a bailout.

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Derivatives Hit Austrian Railroad With Record Loss 
2009-04-29
By Zoe Schneeweiss

April 29 (Bloomberg) — OeBB-Holding AG, Austria’s state- owned railroad company, reported a record 966 million-euro ($1.3 billion) loss after writing down the value of derivatives that went awry.

OeBB’s 2008 loss compared with a profit of 42.4 million euros a year earlier after the company wrote down the entire 613 million-euro notional value of synthetic collateralized debt obligations. The Vienna-based company, which bought the contracts from Deutsche Bank AG in 2005 and 2006, is appealing a February court ruling dismissing a claim that the lender didn’t disclose the risks associated with the derivatives.

State-owned companies and local authorities from Germany to Italy reported more than 1.13 billion euros of losses on derivatives that allow buyers to speculate or protect against risk, leaving taxpayers to pick up the tab.

“There was a climate that pressured publicly owned companies to look for creative ways to finance themselves,” said Thomas Hofer, the Vienna-based owner of H&P Public Affairs, which advises political campaigns. “They were given the feeling of being financially negligent if they didn’t invest in derivatives.”

Derivatives are financial instruments derived from stocks, bonds, loans, currencies and commodities, or linked to specific events like changes in interest rates or weather. CDOs, which package other bonds and loans into notes of varying risk and yields, are losing money as their holdings get downgraded.

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Jim Sinclair’s Commentary

Slowly, yes.

Is Iraq sliding back into chaos?
By Jim Muir
BBC News, Baghdad

The sudden upsurge of violence in Iraq has set the alarm bells ringing and raised many disturbing questions. Does it mean the situation is sliding back out of control, as US troops prepare to leave Iraqi cities by the end of June and quit Iraq as a whole by 2011?

Four deadly suicide bombings in the space of two days brought back dark memories of the not so distant days in 2006 and 2007 when such attacks were taking place almost daily.

On Thursday, a suicide bomber – some witnesses said it was a woman – detonated explosives among a crowd of displaced people being given food relief by Iraqi police. More than 30 died, including 10 policemen.

Around the same time, another bomber walked into a roadside restaurant in near Baquba in Diyala province on the pilgrim route from the Iranian border north-east of Baghdad and blew himself up.

More than 50 people were killed, the vast majority of them Iranian pilgrims going to or from Shia shrines in Iraq. It was the most deadly single attack so far this year.

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