Crisis really OVER???... Why do I not believe you...

So Bank of America says the financial crisis is over. That the Fed's rate hike solidifies it!!! Not soo fast bail me out and make me rich bank of america.. what a joke for them to speak out. They should have their head down working for 2 years before they make a comment like that!!! Although positive sentiment leads to positive sentiment right.. besides I guess they owe the gov and Fed more than they'll ever be able to repay anyways. They owe the people of America their existance..

I also read today that inflation increased less than expected and that means the rate will stay frozen to the years end more than likely.. You be the judge, are we out of the woods?? I dont think so!!

Feb. 19 (Bloomberg) -- The Federal Reserve’s decision to raise the discount rate is a signal that “the financial crisis is largely over,” said Mickey Levy, chief economist at Bank of America in New York.

“It’s time to normalize things,” Levy said today in an interview on Bloomberg Radio. The Fed started lowering the rate on direct loans to banks when the financial crisis erupted in August 2007 and threatened the global banking system.

Central bankers will raise the benchmark federal funds rate on overnight loans between banks “when they’re convinced the economic recovery is sustainable,” Levy said. The overnight rate has been close to zero since December 2008.

The quarter-point increase in the discount rate to 0.75 percent is the first since June 2006. The central bank announced its decision yesterday after the close of trading in New York.

“The Fed, during the financial crisis, lowered the discount rate relative to the federal funds rate as part of their providing excess liquidity to the markets,” Levy said.

“Now that those excess liquidity facilities have run off, and we’re not in a financial crisis anymore, it’s quite natural to move back toward normalcy in the spread between the discount rate and the funds rate,” he said.

“Any bank in a non-crisis situation is not borrowing at the discount window unless they’re in major trouble” and as a result, the increase in the discount rate “doesn’t mean that much,” Levy said.

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Re: Crisis really OVER???... Why do I not believe ...

Merkel Points to `Serious' Bailout Risk as Spanish Bonds Drop

Germany's Chancellor Angela Merkel

Angela Merkel, Germany's chancellor, gestures during the joint press conference at the Federal Chancellory in Berlin. Photographer: Michele Tantussi/Bloomberg

Axel Merk Says He Sees Further Selloff in Irish Banks
Play Video

Nov. 23 (Bloomberg) -- Axel Merk, president and chief investment officer at Merk Investments LLC, talks about the outlook for the euro and European debt. Merk speaks with Carol Massar on Bloomberg Television's "Street Smart." (Source: Bloomberg)

IMF's Lipsky Interview on Portugal, Ireland, Greece
Play Video

Nov. 23 (Bloomberg) -- John Lipsky, first deputy managing director of the International Monetary Fund, talks about the Irish financial crisis and the outlook for Portugal. Lipsky, the second-ranking official at the IMF, said facilities exist to help Portugal in case it seeks aid. He speaks with Tom Keene on Bloomberg Television's "Surveillance Midday." (Source: Bloomberg)

German Chancellor Angela Merkel said the prospect of serial European bailouts was “exceptionally serious,” sending the euro to a three-month low as officials estimated saving Ireland will cost 85 billion euros ($114 billion).

Irish bonds dropped and the premium that investors demand to hold Spanish debt over German counterparts jumped to a euro- era record as the relief rallies triggered by Ireland’s Nov. 21 aid request evaporated. Traders are now betting the turmoil that started in Greece a year ago will spread to Portugal and Spain.

“The markets currently have virtually zero confidence that the bailout in Ireland will solve the European crisis,” Charles Diebel and David Page, fixed-income strategists at Lloyds TSB Corporate Markets in London, said in a note today. “With markets effectively in a position to dictate policy, the risk is that the credibility crisis shifts to more sizeable European Union countries and thereby poses a greater risk to the system as a whole.”

Contagion is spreading through the euro region as Ireland hammers out an aid package with the EU and the International Monetary Fund to save its banking system. The European Commission estimates Ireland may need 85 billion euros, according to two officials who were on a Nov. 21 conference call of finance ministers. Of the total, 35 billion euros would go to banks and 50 billion euros to help finance the government.

The euro dropped 1.8 percent to $1.338 as of 4:55 p.m. in London. The yield on Ireland’s 10-year bond rose 35 basis points to 8.65 percent. The spread on Spanish 10-year bonds over bunds rose 28 basis points to 236 basis points.

Merkel Risks

Merkel today chose to highlight the risks facing the euro even as bailout talks destabilize Ireland’s government. Speaking in Berlin, she said while she didn’t want to “paint a dramatic picture,” it would have been hard a year ago to “imagine the debate” now taking place in Europe. The German leader is stressing the threat to the euro posed by indebted member countries and is pushing German plans to make investors help pay for any future crisis in the currency area.

“I won’t let up on this because otherwise that primacy of politics over finance can’t be enforced,” Merkel said. “It remains our task to keep calling for tough measures and tough conditions, but also to express clear support for the euro.”

Merkel’s stance has drawn opposition from European Central Bank President Jean-Claude Trichet and leaders in Spain and Greece, who say it risks derailing euro-area nations’ deficit- cutting efforts.

Thin Line

“It’s a thin line she has to walk between keeping control of the discussion with the other governments to get the crisis resolution mechanism, while not stirring further uncertainty, speculation and contagion in the markets,” said Carsten Brzeski, an economist at ING Group in Brussels. “Markets are following her very closely. Her fate is linked to this crisis resolution mechanism right now. It has to be a success.”

The extra yield on Portuguese 10-year bonds today rose 28 basis points to 435 basis points. IMF Deputy Managing Director John Lipsky stressed in an interview with Bloomberg Television that “facilities exist” for Portugal should they be needed, though the country has not asked for assistance.

Ireland’s government will tomorrow announce welfare cuts amounting to 800 million euros in 2011 as part of its four-year plan to reduce its budget deficit to 3 percent of gross domestic product from 12 percent, a personal familiar with the matter said today. The county’s 12.5 percent corporate tax rate will remain a pillar for national policy and the minimum wage will be lopped by 12 percent, the person said.

Bank Run?

Unless European officials act quickly enough to calm the crisis, Ireland risks a “major bank run,” Pacific Investment Management Co. Co-Chief Investment Officer Mohamed A. El-Erian said today. Allied Irish Banks Plc, the country’s second-largest bank, said Nov. 19 that its deposits dropped by about 13 billion euros -- or 17 percent -- since the start of the year.

“The numbers so far have shown that the Irish banking system has been bleeding deposits,” El-Erian said in a Bloomberg Radio interview on “Bloomberg Surveillance” with Tom Keene. “It will seriously undermine the prosperity of this country for a generation.”

Cowen, who yesterday said fresh elections will be called once bailout talks are completed, today faced calls to resign from his own Fianna Fail party as lawmakers prepare to meet in Dublin tonight.

“I’ll be telling him that I’ve lost confidence in you, the public has lost confidence in you and for the sake of the country and the party, give us an indication when you will resign and let us select somebody to lead us into the next election,” Noel O’Flynn, a lawmaker in the ruling party, told Bloomberg News in Dublin today. “Several members will stand up and ask him to go after the budget” on Dec. 7.

Re: Crisis really OVER???... Why do I not believe ...

U.S. Banks will close 5,000 Branches in next 18 months!


U.S. Banks Will Close 5,000 Branches, Whitney Says
By Michael J. Moore and Yalman Onaran - Nov 22, 2010 5:56 PM ET Mon Nov 22 22:56:56 GMT 2010

U.S. banks will close 5,000 branches in the next 18 months as they face profit declines from decreased loan demand and lower fee revenue, said Meredith Whitney, the former Oppenheimer & Co. analyst who now runs her own firm.

Banks face an “uphill battle” in generating loan growth as consumers reduce debt and will receive less revenue from fees because of new regulations and the lack of a securitization market, Whitney, 41, said in a report dated Nov. 18 and obtained today by Bloomberg News.

Whitney has said earnings pressures and new regulation will lead to some lower-income customers losing access to banking services. The number of households without access to the “traditional banking system” will rise to 41 million by 2015 from 30 million in 2009, she said in the Nov. 18 note.

“The most regrettable unintended consequence of some of the quickly written regulatory reform, we believe, will be the inevitable ‘debanking’ of the U.S. financial system,” said Whitney, who started New York-based Meredith Whitney Group after correctly predicting Citigroup Inc.’s dividend cut in 2007. “Fewer ‘bankable’ customers will contribute to the trend in fewer bank branches.”

Whitney also sees slower growth in investment banking. U.S. securities firms may cut as many as 80,000 jobs in the next 18 months as revenue growth slows, she said in September.

Bank branches in the U.S. fell by 1,035, or 1 percent, over the 12 months ended June 30, Whitney said, citing data from the Federal Deposit Insurance Corp. Banks may cut 10,000 branches by 2015, she said.

Bank failures in the U.S. climbed to 149 last week, surpassing last year’s total of 140. The FDIC’s tally of “problem” banks climbed to 829 lenders with $403 billion in assets at the end of the second quarter, a 7 percent increase from the 775 on the list in the first quarter.

Re: Crisis really OVER???... Why do I not believe ...

Starting December 1 thru April 2011, approximately 4.6 million unemployed workers will begin rolling off of the Federal emergency unemployment compensation and extended benefits programs. If congress does not extend the program, instead of receiving up to 99 weeks of benefits, the unemployed will only be eligible for the standard 26 weeks of benefits. About 200,000 workers will fall out of the programs each week while new job growth will be lucky to exceed 100,000 per month. By the time all the Federal EUC/EB benefits expire, the total will amount to an annualized hit to personal income of $70 billion."

Re: Crisis really OVER???... Why do I not believe ...

Greece's Deficit Revised to Largest in EU as Debt Tops Italy's

Greece's Prime Minister George Papandreou

Greece's Prime Minister George Papandreou agreed in May to austerity measures worth about 14 percent of GDP over four years in exchange for the EU-IMF loan program that lasts for three years. Photographer: Craig Ruttle/Bloomberg

Greece had the euro region’s largest budget deficit and public debt last year after a revision by European Union authorities who said their concerns about the country’s economic statistics were now resolved.

Greece’s budget shortfall last year was revised to 15.4 percent of gross domestic product from 13.6 percent, surpassing Ireland’s 14.4 percent shortfall, Eurostat, the EU’s Luxembourg- based statistics office, said in a report today. The debt was revised to 126.8 percent of GDP, overtaking Italy at 116 percent.

Revisions to Greece’s deficit figures, beginning after Prime Minister George Papandreou revealed last year that the gap was twice a previous forecast, spurred a surge in borrowing costs that pushed the country to the brink of default and triggered a region-wide debt crisis. Eurostat last revised the figure higher in April, sparking a downgrade of Greece’s credit standing by Moody’s Investors Service and forcing Papandreou the next day to formally seek a bailout from the European Union and International Monetary Fund to avoid default.

The yield premium investors demand to hold Greek 10-year bonds over similar-maturity bunds rose 6 basis points to 8.94 basis points. Yields on 10-year Greek bonds remain the highest in the euro region, at 11.5 percent. That compares with 8.32 percent for Ireland, 6.92 percent for Portugal, 4.58 percent for Spain and 4.18 percent for Italy.

Future Targets

The revisions mean that Greece won’t achieve the deficit targets it agreed to in return for the 110 billion euros ($150 billion) in EU-IMF emergency loans. Greece’s government has targeted spending cuts and revenue increases to bring the budget gap to 7 percent of GDP in 2011 from 7.8 percent this year.

The Greek Finance Ministry said today that after the revisions the budget deficit would be 9.4 percent of GDP this year and debt will reach 144 percent of GDP. The ministry today reiterated its pledged to bring the shortfall within the EU’s 3 percent ceiling in 2014.

The European Commission issued a report in January questioning the accuracy of Greece’s economic data, leading to an overhaul of the national statistics agency that gave the EU more oversight. Eurostat lifted its “reservation” today on Greek data, saying it was now satisfied that the numbers were accurate.

“Eurostat and the Hellenic Statistical Authority have addressed all of the issues identified in the last reservation during a series of” meetings, Eurostat said in the press release.

Statistics Questioned

Greece’s widening deficit and questions about the accuracy of its economic data have undermined the credibility and enforcement of the EU’s budget rules, which call for euro members to keep their shortfall at less than 3 percent of GDP. To prepare the revisions, Eurostat exercised for the first time new audit powers it was granted after the EU learned Greece had used secret financial transactions to conceal debt.

Papandreou agreed in May to austerity measures worth about 14 percent of GDP over four years in exchange for the EU-IMF loan program that lasts for three years. The budget deficit shrank 30 percent in the first 10 months of 2010, as the government cut wages and pensions to counter tax evasion, an inefficient tax collection process and a shrinking economy.

The austerity measures are deepening a two-year recession in the country. The economy shrank 1.1 percent in the third quarter from the previous three months, the largest contraction in the EU and unemployment reached a record high of more than 12 percent in August.

Re: Crisis really OVER???... Why do I not believe ...

California is the dollar’s Ireland and Greece put together.

Schwarzenegger Declares Emergency, Calls Special Budget Session
November 12, 2010, 12:22 AM EST
By Michael B. Marois

Nov. 12 (Bloomberg) — California Governor Arnold Schwarzenegger, citing a $25.4 billion budget gap over the next 19 months, declared a fiscal emergency and called lawmakers to a special session next month to begin dealing with the problem.

Schwarzenegger, a Republican whose term ends in January, late yesterday ordered the session to start Dec. 6, the day newly elected legislators are sworn in. He wants to take steps to erase an officially estimated $6.1 billion gap that has already emerged in the budget enacted last month.

In addition to the gap forecast for the fiscal year through June, the nonpartisan Legislative Analyst’s Office yesterday projected a $19 billion gap in the following 12 months. By Jan. 10, Governor-elect Jerry Brown, a Democrat who will be sworn in Jan. 3, must propose a plan to erase the next year’s deficit.

“The LAO’s estimate is a sobering reminder that California’s economy is still struggling,” Schwarzenegger, 63, said in a statement. “I have spoken to all four legislative leaders and they know what we are up against. They know it won’t be easy, but they also know they cannot wait to take action.”

The authority to declare a fiscal emergency comes from ballot measures Schwarzenegger championed in 2004, when he won approval to borrow $15 billion to fill that year’s budget gap.


Re: Crisis really OVER???... Why do I not believe ...

home values accelerated their decline in September, according to a report from Zillow wrapping up the third quarter.

A record 23.2% of all mortgaged homes are now underwater.

Among major metro areas, Miami, Atlanta and Phoenix have seen home values drop over 12% during the last year. “The length and depth of the current housing recession is rivaling the Great Depression’s real estate downturn,” says Zillow chief economist Stan Humphries, “and, with encouraging signs fading, will easily eclipse it in the coming months.”

Oh, and the Zillow report indicates foreclosures have reached an all-time high as of the end of September.

Another report, this one from the National Association of Realtors, finds that home prices fell in half of all metro areas during the third quarter. That contrasts with a rise in two-thirds of metro areas during the previous quarter.

Ocala, Fla., was the worst place to try to sell a home during Q3; prices there fell 20%. But they rose 18% in Burlington, Vt.

Re: Crisis really OVER???... Why do I not believe ...

Americans On Foodstamps Hits New Record In August, Increase By Over Half A Million To 42.4 Million, 17% Increase Year Over Year

Tyler Durden's picture


Another highlight you may not hear in the President's address from this morning: according to the last Department of Agriculture update, Americans on foodstamps has increased by over half a million in August, hitting a fresh all time high of 42.4 million people relying on the government for basis sustenance. At least now we know where that labor force is going. The August number is a 17% rise from the same time a year ago. That number is up 58.5% from August 2007, before the recession began.

As the WSJ reports:

By population, Washington, D.C. had the largest share of residents receiving food stamps: More than a fifth, 21.1%, of its residents collected assistance in August. Washington was followed by Mississippi, where 20.1% of residents received food stamps, and Tennessee, where 20% tapped into the government nutrition program.

Idaho posted the largest jump in recipients in the past year. The number of people receiving food stamps climbed 38.8% but their rolls are still fairly low. Just 211,883 Idaho residents collected food stamps in August.

The average benefit size per person nationwide in August was $133.90. Per household it was $287.82.

Food stamps have become a lifeline for workers who have lost their jobs, particularly among the growing share of unemployed Americans who have also exhausted their unemployment benefits. Lines at grocers at midnight on the first of the month have signaled that, in many cases, those benefits aren’t tiding families over and they run out before their next check kicks in.

Even during the summer children returned to schools to take advantage of free lunch programs where they were available. Nearly 195 million lunches were dished out in August and 58.9% of them were free. Another 8.4% were available at reduced prices. That number will surge when the fall data are released because children will be back in school. Last September, for example, more than 590 million lunches were served, nearly 64% of which were free or reduced price.

Children whose families have incomes at or below 130% of the poverty level — $28,665 for a family of four — can access free meals. Those families earning between 130% and 185% of the poverty level — $40,793 for a four-person family — are eligible for reduced-price meals that can’t cost more than 40 cents.

We also fail to see just what Fed-induced wealth effect these 42.4 million Americans will receive courtesy of the Fed's generosity targetting Wall Street, corporate insiders, and nobody else.

h/t Papaswamp




by Xibalba
on Fri, 11/05/2010 - 08:53


What happens to the food stamp program once the Fed goes bankrupt?


Re: Crisis really OVER???... Why do I not believe ...

The American Taxpayer continues to pay for the elaborate protection & ceremony granted for the President's Trip to India & the Far East?   No wonder the DEBT is increasing --  any estimates on the total bill here?     Money, money everywhere -- keep those printing presses going!

34 Warships Sent from US for Obama Visit

Press Trust of India, Updated: November 04, 2010

New Delhi: The White House will, of course, stay in Washington but the heart of the famous building will move to India when President Barack Obama lands in Mumbai on Saturday.

Communications set-up and nuclear button and majority of the White House staff will be in India accompanying the President on this three-day visit that will cover Mumbai and Delhi.

He will also be protected by a fleet of 34 warships, including an aircraft carrier, which will patrol the sea lanes off the Mumbai coast during his two-day stay there beginning Saturday. The measure has been taken as Mumbai attack in 2008 took place from the sea.

Arrangements have been put in place for emergency evacuation, if needed.

Obama is expected to fly by a helicopter -- Marine One -- from the city airport to the Indian Navy's helibase INS Shikra at Colaba in south Mumbai.

Two jets, armed with advanced communication and security systems, and a fleet of over 40 cars will be part of Obama's convoy.

Around 800 rooms have been booked for the President and his entourage in Taj Hotel and Hyatt.

The President will have a security ring of American elite Secret Service, which are tasked to guard the President, along with National Security Guards (NSG) and personnel from central paramilitary forces and local police in Mumbai and Delhi.

Similar arrangements will be in place in Delhi, with the Air Force One to be kept in all readiness throughout Obama's stay here from Sunday afternoon to Tuesday morning.

Maurya Hotel, where the President will stay, has already been swarmed by American security personnel and protective measures have been put in place.

Security drills have already been carried out at the hotel as well as Rajghat, where he will visit.

Sources said 13 heavy-lift aircraft with high-tech equipment, three helicopters and 500 US security personnel have arrived in India ahead of Obama's visit.

The US security has also brought interception and obstruction device, sniffer dogs, rescue gadgets.

Apart from Obama's Air Force One, a few private luxury jets carrying top American corporate leaders, who are part of Obama's entourage, are also expected to arrive in India in the next 2-3 days.

All high-rise buildings in the vicinity of Mumbai's Taj Mahal hotel and Delhi's Maurya Sheraton hotel, where the US President will stay, are being sanitised and security personnel will be positioned on rooftops to prevent any air-borne attack.

The Ridge area - opposite Delhi's Maurya Sheraton hotel - has been illuminated by floodlights as part of the heightened security drill.

The Home Ministry has already issued an alert for Mumbai and Delhi asking authorities to take extra precautions during Obama's visit as well as on Diwali on Friday.

Re: Crisis really OVER???... Why do I not believe ...

What are the real unemployment numbers to-day?  Who is one to believe?

Alternate Unemployment Charts

The seasonally-adjusted SGS Alternate Unemployment Rate reflects current unemployment reporting methodology adjusted for SGS-estimated long-term discouraged workers, who were defined out of official existence in 1994. That estimate is added to the BLS estimate of U-6 unemployment, which includes short-term discouraged workers.

The U-3 unemployment rate is the monthly headline number. The U-6 unemployment rate is the Bureau of Labor Statistics’ (BLS) broadest unemployment measure, including short-term discouraged and other marginally-attached workers as well as those forced to work part-time because they cannot find full-time employment.

Unemployment Data Series   subcription required(Subscription required.)  View  Download Excel CSV File   Last Updated: November 5th, 2010

Re: Crisis really OVER???..Real Unemployment > 17%

True unemployment breaks 17% again - Obama’s jobless recovery continues


The government unemployment report
that the economy lost another 95,000 jobs and that the unemployment
rate remained stuck at 9.6 percent in September is a disaster for the

The government’s broader measure of unemployment, sometimes referred to “true unemploytment,”
now stands at 17.1 percent. As  the Washington Post’s Frank Ahrens
puts it, you are not included in the “official” unemployment rate if,
a) you would like to have a full-time job but can find only part-time
work, and b) if you’ve grown so discouraged at finding work, you’ve
simply given up:

If you include all of these people into the number — all
of the people who should be working full time but are not — the truer
U.S. unemployment rate is a much higher 16.8 percent.

The higher, more inclusive, unemployment number is buried in the
government’s monthly report as “U6 Total unemployed, plus all persons
marginally attached to the labor force, plus total employed part time
for economic reasons, as a percent of the civilian labor force plus all
persons marginally attached to the labor force” in “Table A-15.
Alternative measures of labor underutilization.” Unlike the “official”
unemployment rate, the U6 number includes both marginal and part-time
workers as the “true” or “real” unemployment level.

This is once again a good time to recall President Obama’s promises about his boondoggle stimulus package:

  • When pushing for passage of his $800 billion so-called stimulus package, President Obama proposed five different goals over eight weeks for his boondoggle and finally settled on a claim that his bailout would create three to four million jobs.
  • Team Obama used scare tactics to get the Democrat-controlled
    Congress to give him the massive spending bill dressed up as a
    stimulus. They assured us that without Obama’s bailout the unemployment
    rate would reach 9 percent, but if Congress passed his boondoggle,
    unemployment would peak at 8 percent.

The unemployment rate scare tactic was contained in Obama’s “The Job Impact of the American Recovery and Reinvestment Plan.” At Innocent Bystanders, Geoff, has plotted the actual unemployment rates on Obama’s prediction chart. Where are the jobs?

As we all unfortunately know, despite Team Obama’s assurances unemployment not only surpassed 8 and 9 percent, it actually broke 10 percent.

When will Obama admit that his misguided tax, spend and borrow policies have not done the job and are epic failures?
We may have so far avoided a double dip recession under Obama. But
sadly, in less than two years, we have now seen true unemployment rise
above 17 percent three times during Obama’s presidency.

Also posted at Right Side Politics.



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Re: Crisis really OVER???...Fed Manipulation of Gold? Ron Paul

It feels like the crisis is over.. nothing but green on my screen. Could be the new title or slogan for the Fed! Green on my screen baby!

Re: Crisis really OVER???...Fed Manipulation of Gold? Ron Paul

Gold would be a heck of a lot higher -  greater than $2,000/0z

Re: Crisis really OVER???...Fed Manipulation of Gold? Ron Paul

The FED is no longer supressing the price of gold as it drives it higher!! Where would gold be without the Fed is the question??

Re: Crisis really OVER???...Fed Manipulation of Gold? Ron Paul

Fed 'probably' manipulates gold, seeks to 'destroy' it, Ron Paul tells Kitco News

August 24, 2010

Dear Friend of GATA and Gold:

Gold's price is "probably" suppressed
surreptitously by the Federal Reserve, U.S. Rep. Ron Paul, R-Texas,
remarked today in an interview with Daniela Cambone of Kitco News.

Seeming to refer to GATA, with which he has had
regular contact in recent years, Paul told Kitco News in regard to gold
price manipulation:

"I am not the one to lay out proof of this.
Others have done a lot of investigation. One of the reasons I don't
dwell on that is they are not going to listen to us. But I think it is
very important somebody talks about it and emphasizes it just as a
warning to be careful. You don't have to only anticipate what the
markets are doing, but you have to anticipate what the government is

Referring to the decade prior to the repudiation
of dollar convertibility into gold by the United States in 1971, Paul
said: "We printed money like currency. We printed too many dollars
against the gold. So they said, 'We will take your gold.' ... If they
are capable of that, they are capable of doing this [manipulation] as
well, because they don't want their cover blown."

If the markets are saying not to trust paper
money, Paul told Kitco, the government has to do everything it can to
"destroy gold."

Federal Reserve officials "know gold is
important," Paul said. "I think they are quite willing to manipulate it.
That is the only way they can maintain this false illusion about gold.

"If they are involved" in gold price
manipulation, Paul asked, "isn't it pretty amazing what has happened in
past year? What will happen if they throw in the towel?"

Well, if that happens, for starters GATA will have one helluva party and will invite Paul to be keynote speaker.

The Kitco News interview with Paul is headlined "Ron Paul Calls for Audit of U.S. Gold Reserves" and you can find it here:

Re: Crisis really OVER???...U.S. Bank Failures now 118

FDIC Shutters Eight Banks; Failure Toll Rises To 118 In 2010

8/21/2010 3:42 AM ET 


<a href="">
<img src=""
alt="Click Here" border="0">
<a href=";kw=;kval=tradenow;tile=14;sz=88x31;ord=123456789?" target="_blank"><img src=";kw=;kval=tradenow;tile=14;sz=88x31;ord=123456789?" width="88" height="31" border="0" alt=""></a>

- Federal Deposit Insurance Corporation or FDIC announced closing of
eight banks, bringing the U.S. bank failure toll to 118 in 2010.
According to the regulator, four banks were shut down in California, two
in Florida and one each in Virginia and Illinois. The regulators closed
a big community bank based in Chicago.

ShoreBank in Chicago:

FDIC stated that ShoreBank, Chicago, Illinois, which had 15 branches, was closed by the Illinois Department of Financial and Professional Regulation.

entered into purchase and assumption agreement with Urban Partnership
Bank, Chicago, Illinois, to assume all of the deposits of ShoreBank.

of June 30, 2010, ShoreBank had about $2.16 billion in total assets and
$1.54 billion in total deposits. The FDIC estimates that the cost to
the Deposit Insurance Fund will be $367.7 million.

California banks:

Community Bank, Chico, California, and Pacific State Bank, Stockton,
California, were closed by the California Department of Financial Institutions.
Butte Community Bank had assets of $498.8 million and deposits of
$471.3 million; and Pacific State Bank had $312.1 million assets and
total deposits of $278.8 million. The cost to the insurance fund is
$17.4 million and $32.6 million respectively.

Los Padres Bank,
Solvang, California, which had 14 branches, had about $870.4 million in
assets and $770.7 million in deposits. Pacific Western Bank, San Diego
will assume its deposits and assets. FDIC estimate of the failure's cost
to the insurance fund is $8.7 million.

Sonoma Valley Bank,
Sonoma, California, which had three branches, had about $337.1 million
in assets and $255.5 million in deposits. Westamerica Bank, San Rafael,
California will assume all of Sonoma Valley Bank's deposits and almost
all of its assets. The closing will cost the insurance fund $10.1

Florida Banks:

Community National Bank at Bartow in
Bartow, Florida, with about $67.9 million in assets and deposits of
$63.7 million. The failure will cost the insurance fund about $10.3

Independent National Bank, Ocala, Florida had total
assets of $156.2 million and total deposits of $141.9 million. The
failure will cost the insurance fund about $10.3 million.

Bank of Florida, National Association, Winter Haven, Florida, will
assume deposits and essentially all assets of the two failed banks, FDIC

Bank in Virginia:

Imperial Savings and Loan
Association, Martinsville, Virginia, which had about $9.4 million assets
and $10.1 million deposits. River Community Bank, National Association,
Martinsville, Virginia, will assume bank's deposits and assets. The
failure will cost the insurance fund $3.5 million.


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Re: Crisis really OVER???...Fannie Mae Debacle continues.

Fannie Mae Seeks $1.5 Billion From U.S. Treasury After 12th Straight Loss

Fannie Mae, the mortgage-finance
company operating under federal conservatorship, is seeking $1.5
billion in aid from the U.S. Treasury Department after a 12th
straight quarterly loss.

A decline in costs from bad loans helped narrow the second-
quarter loss to $1.2 billion from $14.8 billion in the same
period a year earlier, the Washington-based company said today
in a filing to the Securities and Exchange Commission. Fannie
Mae has accrued more than $148 billion in consecutive losses
since 2007, according to data compiled by Bloomberg.

The Treasury seized Fannie Mae and McLean, Virginia-based
Freddie Mac, the biggest sources of U.S. mortgage funding, in
2008 as souring subprime loans pushed the companies to brink of
collapse. Including today’s request, Fannie Mae has drawn $86.1
billion in aid. The growing tally has helped spur the Obama
administration to solicit proposals to fix the companies, and
prompted some lawmakers to demand their closure.

“Congress must act to end this taxpayer-funded bailout,”
said Representative Jeb Hensarling, in a statement after today’s
earnings were announced. The Texas Republican is the lead
sponsor of legislation to abolish the companies.

Freddie Mac hasn’t yet disclosed second-quarter results.

Fannie Mae’s credit-related expenses, including home-loan
delinquencies and defaults, fell to $4.9 billion from $18.8
billion a year earlier. Foreclosure sales, efforts to rework
distressed loans, and a change in accounting helped reduce the
costs, the company said.

Reducing Future Losses

Participation in the Treasury’s Making Home Affordable
Program, which helps distressed borrowers lower monthly payments
by rewriting loan terms, cost Fannie Mae $2.2 billion in the
second quarter. Minimizing delays in repayment plans,
forbearance programs and loan modifications can help reduce
long-term losses by preventing defaults, the company said.

“These actions have been undertaken with the goal of
reducing our future credit losses below what they otherwise
would have been,” it said. “It is difficult to predict how
effective these actions ultimately will be in reducing our
credit losses.”

Though home prices improved in the second quarter, they may
“decline slightly” through 2011, the company said. Losses on
single-family mortgages fell about 60 percent from the first
quarter to $5.1 billion. Since last year, “almost all” such
losses were on loans made from 2005 to 2008, as a smaller share
of newer loans, issued with higher underwriting standards, face
delinquencies, the company said.

Seeking Ideas

The company forced lenders to repurchase about $1.5 billion
in defective loans in the quarter, compared with $964 million a
year earlier.

“We expect the amount of our outstanding repurchase and
reimbursement requests to remain high” this year, it said.

Fannie Mae and Freddie Mac own or guarantee more than half
the $11 trillion U.S. residential debt market. The Treasury and
Department of Housing and Urban Development asked in April for
public comment on how to fix the mortgage-funding system.

On Aug. 17, President Barack Obama’s administration plans
to host a conference of lawmakers, financial executives and
housing advocates to hear ideas for improving the property-
finance system. Treasury Secretary Timothy F. Geithner has said
his agency aims to offer “a comprehensive reform proposal” for
the companies by January.

To contact the reporter on this story:
Lorraine Woellert in Washington at

Re: Crisis really OVER???...Bernanke Optimism re Recovery????.

Now the following comment by Bernanke hardly expresses much realististic optimism does it?

Bernanke: Long way to go for recovery.
have a considerable way to go to achieve full recovery in our economy,"
Bernanke said yesterday, "and many Americans are still grappling with
unemployment, foreclosure, and lost savings." Constraints faced by
budget-strained state and municipal governments are also hindering the


Re: Crisis really OVER???... Why do I not believe ...

Good point Pennypincher.   Don't you find that Bernanke seems to speak out of both sides of his mouth & says whatever is politically convenient at the time.   Does anyone really think we will seeing rising wages this year - I don't.   My daughter in Chicago is currently doing contract work as an O.T. &  recently one facility wondered if she would take $5 less/hr to work for them.   That was a first  -she declined.  People are definitely cutting spending -  this will continue especially in light of impending rises in various taxes.   If interest rates start to rise anytime soon this will curtail using credit cards as much  & hinder mortgage purchases & payments.

Re: Crisis really OVER???... Why do I not believe ...


the video you posted claims the exact oppositeof what Bernanke said today. He said rising wages will probably spur household spending in the next few quarters, even as weak job gains drag down consumer confidence.

Re: Crisis really OVER? 108 Bank Failures - not a healthy sign

This number is far ahead of last year's pace- only 7 months have gone by.  5 more failures this past week.




Bank List

The FDIC is often appointed as receiver for failed
banks. This page contains useful information for the customers and
vendors of these banks. This includes information on the acquiring bank
(if applicable), how your accounts and loans are affected, and how
vendors can file claims against the receivership.
Failed Financial Institution Contact Search
displays point of contact
information related to failed banks.

This list includes banks which have failed since October 1, 2000.

Failed Bank List - CSV file (Updated on Mondays. Also opens in Excel - Excel

Click arrows next to headers to sort in Ascending or Descending order.

Click arrows next to headers to sort in Ascending or Descending order.

Bank Name




Closing Date

Updated Date

July 30, 2010
July 30, 2010

The Cowlitz Bank
July 30, 2010
July 30, 2010

Coastal Community Bank
Panama City Beach
July 30, 2010
July 30, 2010

Bayside Savings Bank
Port Sainte Joe
July 30, 2010
July 30, 2010

Northwest Bank & Trust
July 30, 2010
July 30, 2010

Home Valley Bank
Cave Junction
July 23, 2010
July 30, 2010


Las Vegas
July 23, 2010
July 30, 2010

Community Security

New Prague
July 23, 2010
July 30, 2010

Thunder Bank
Sylvan Grove
July 23, 2010
July 30, 2010

First National Bank

July 23, 2010
July 30, 2010

Crescent Bank and
Trust Company

July 23, 2010
July 30, 2010

Sterling Bank
July 23, 2010
July 30, 2010

Mainstreet Savings Bank, FSB

July 16, 2010
July 22, 2010

Olde Cypress Community Bank

July 16, 2010
July 26, 2010

Turnberry Bank

July 16, 2010
July 22, 2010

Metro Bank of Dade County

July 16, 2010
July 22, 2010

First National Bank of the South

July 16, 2010
July 26, 2010

Woodlands Bank

July 16, 2010
July 22, 2010

Home National Bank

July 9, 2010
July 19, 2010

USA Bank

Port Chester
July 9, 2010
July 12, 2010

Ideal Federal Savings Bank

July 9, 2010
July 12, 2010

Bay National Bank

July 9, 2010
July 19, 2010

High Desert State Bank

June 25, 2010
July 2, 2010

First National Bank

June 25, 2010
July 14, 2010

Peninsula Bank

June 25, 2010
July 2, 2010

Nevada Security Bank

June 18, 2010
June 21, 2010

Washington First International Bank

June 11, 2010
June 17, 2010

TierOne Bank

June 4, 2010
June 9, 2010

Arcola Homestead Savings Bank

June 4, 2010
June 7, 2010

First National Bank

June 4, 2010
July 19, 2010

Sun West Bank

Las Vegas
May 28, 2010
June 17, 2010

Granite Community Bank, NA

Granite Bay
May 28, 2010
June 17, 2010

Bank of Florida
- Tampa

May 28, 2010
June 17, 2010

Bank of Florida - Southwest
May 28, 2010
June 17, 2010

Bank of Florida
- Southeast

Fort Lauderdale
May 28, 2010
July 21, 2010

Pinehurst Bank

Saint Paul
May 21, 2010
May 27, 2010

Midwest Bank and Trust Company

Elmwood Park
May 14, 2010
May 19, 2010

Southwest Community Bank
May 14, 2010
May 19, 2010

New Liberty Bank
May 14, 2010
May 19, 2010

Satilla Community Bank
Saint Marys
May 14, 2010
May 19, 2010

1st Pacific Bank of California
San Diego
May 7, 2010
May 11, 2010

Towne Bank of Arizona
May 7, 2010
July 27, 2010

Access Bank
May 7, 2010
May 11, 2010

The Bank of Bonifay
May 7, 2010
May 11, 2010

Frontier Bank
April 30, 2010
May 4, 2010

BC National Banks
April 30, 2010
May 4, 2010

Champion Bank
Creve Coeur
April 30, 2010
May 4, 2010

CF Bancorp
Port Huron
April 30, 2010
May 4, 2010

Westernbank Puerto Rico
En Español
April 30, 2010
May 14, 2010

R-G Premier Bank of Puerto Rico
En Español
Hato Rey
April 30, 2010
May 10, 2010

En Español
San Juan
April 30, 2010
May 10, 2010

Wheatland Bank
April 23, 2010
April 27, 2010

Peotone Bank and Trust Company
April 23, 2010
April 27, 2010

Lincoln Park Savings Bank
April 23, 2010
July 2, 2010

New Century Bank
April 23, 2010
April 27, 2010

Citizens Bank and Trust Company of Chicago
April 23, 2010
April 27, 2010

Broadway Bank
April 23, 2010
April 27, 2010

Amcore Bank, National Association
April 23, 2010
July 8, 2010

City Bank
April 16, 2010
April 23, 2010

Tamalpais Bank
San Rafael
April 16, 2010
April 23, 2010

Innovative Bank
April 16, 2010
April 23, 2010

Butler Bank
April 16, 2010
April 23, 2010

Riverside National Bank of Florida
Fort Pierce
April 16, 2010
April 23, 2010

AmericanFirst Bank
April 16, 2010
April 23, 2010

First Federal Bank of North Florida
April 16, 2010
April 23, 2010

Lakeside Community Bank
Sterling Heights
April 16, 2010
April 20, 2010

Beach First National Bank
Myrtle Beach
April 9, 2010
April 13, 2010

Desert Hills Bank
March 26, 2010
April 2, 2010

Unity National Bank
March 26, 2010
March 31, 2010

Key West Bank
Key West
March 26, 2010
March 31, 2010

McIntosh Commercial

March 26, 2010
April 5, 2010

State Bank of Aurora
March 19, 2010
March 23, 2010

First Lowndes Bank
Fort Deposit
March 19, 2010
March 23, 2010

Bank of Hiawassee
March 19, 2010
March 23, 2010

Appalachian Community Bank
March 19, 2010
March 23, 2010

Advanta Bank Corp.
March 19, 2010
March 22, 2010

Century Security Bank
March 19, 2010
March 23, 2010

American National Bank
March 19, 2010
March 23, 2010

Statewide Bank
March 12, 2010
March 17, 2010

Old Southern Bank
March 12, 2010
March 17, 2010

The Park Avenue Bank
New York
March 12, 2010
April 1, 2010

LibertyPointe Bank
New York
March 11, 2010
April 1, 2010

Centennial Bank
March 5, 2010
March 9, 2010

Waterfield Bank
March 5, 2010
March 10, 2010

Bank of Illinois
March 5, 2010
June 22, 2010

Sun American Bank
Boca Raton
March 5, 2010
March 10, 2010

Rainier Pacific Bank
February 26, 2010
March 2, 2010

Carson River Community Bank
Carson City
February 26, 2010
March 2, 2010

La Jolla Bank, FSB
La Jolla
February 19, 2010
February 24, 2010

George Washington Savings Bank
Orland Park
February 19, 2010
February 24, 2010

The La Coste National Bank
La Coste
February 19, 2010
February 24, 2010

Marco Community Bank
Marco Island
February 19, 2010
February 24, 2010

1st American State Bank of Minnesota
February 5, 2010
February 12, 2010

American Marine Bank
Bainbridge Island
January 29, 2010
February 3, 2010

First Regional Bank
Los Angeles
January 29, 2010
February 3, 2010

Community Bank and Trust
January 29, 2010
February 3, 2010

Marshall Bank, N.A.
January 29, 2010
February 3, 2010

Florida Community Bank
January 29, 2010
February 3, 2010

First National Bank of Georgia
January 29, 2010
February 3, 2010

Columbia River Bank
The Dalles
January 22, 2010
February 2, 2010

Evergreen Bank
January 22, 2010
February 2, 2010

Charter Bank
Santa Fe
January 22, 2010
February 2, 2010

Bank of Leeton
January 22, 2010
February 2, 2010

Premier American Bank
January 22, 2010
April 5, 2010

Barnes Banking Company
January 15, 2010
February 3, 2010

St. Stephen State Bank
St. Stephen
January 15, 2010
January 26, 2010

Town Community
Bank & Trust

January 15, 2010
January 26, 2010

Horizon Bank
January 8, 2010
January 12, 2010

Re: Crisis really OVER? U.S. Economy cooling - clouds ahead?

Economy in U.S. Will Probably Keep Cooling as Lack of Jobs Limits Spending

Federated Investors's Tice Interview


Play Video

July 30 (Bloomberg) -- David Tice, chief
portfolio strategist for bear markets at Federated Investors Inc, talks
about the outlook for the U.S. economy.
Growth in the U.S. slowed to a 2.4 percent annual rate in the
second quarter, less than forecast, reflecting a larger trade deficit
and an easing in consumer spending. Tice, manager of the Federated
Prudent Bear Fund, speaks with Matt Miller on Bloomberg Television's
"Street Smart." (Source: Bloomberg)

The world’s largest economy will
probably keep cooling in the third quarter as a lack of jobs
prompts American consumers to rein in spending.

The economy in the U.S. grew at a slower-than-forecast 2.4
percent annual rate from April through June after expanding at a
3.7 percent pace in the previous three months, Commerce
Department figures showed yesterday. Household purchases climbed
at a 1.6 percent rate following a 1.9 percent first-quarter gain
that was smaller than previously estimated.

“The economy is still struggling to gain traction,” David Resler, chief economist at Nomura Securities International Inc.
in New York, said in an interview. “Consumers are going to be
very cautious about spending, especially about big-ticket

Growth in the past three months was supported by increases
in inventories, home construction, business investment and
government spending that may not be matched this quarter. The
pace of recovery in the first half of the year kept unemployment
hovering near 10 percent, raising the risk that household
purchases will not rebound.

Nomura’s Resler forecasts the economy will expand at a 1.7
percent pace from July through September.

Most stocks climbed yesterday as better-than-projected
earnings overcame concerns the economy will slow. The Standard &
Poor’s 500 Index were little changed to 1,101.6 at the 4 p.m.
close in New York.

Deeper Slump

The worst U.S. recession since the 1930s was even deeper
than previously estimated, reflecting bigger slumps in consumer
spending and housing, according to the Commerce Department’s
annual revisions also issued yesterday.

The economy shrank 4.1 percent from the fourth quarter of
2007 to the second quarter of 2009, compared with the 3.7
percent drop previously on the books, the report showed.
Household spending fell 1.2 percent in 2009, twice as much as
previously projected and the biggest decline since 1942.

“The typical pattern is to snap back hard and you just
haven’t done that,” Jay Feldman, an economist at Credit Suisse
in New York, said in an interview. “We’re not calling for a
double-dip, it’s a moderate recovery. Things will appear to be

Credit Suisse forecasts growth will average 2.75 percent in
the second half of the year, compared with 3.1 percent for the
first six months.

Below-Average Rebound

Over the past 12 months, the economy grew 3.2 percent. The
first years of recoveries from recessions in the mid 1970s and
early 1980s averaged 7 percent, Feldman said.

Economists at HSBC Securities USA Inc. in New York forecast
average growth of 2 percent from July through December, while
the Conference Board, a New York-based research group projects
1.6 percent.

Excluding growth in inventories and residential spending,
gross domestic product rose at a 0.8 annual rate percent as
consumer purchases slowed and the trade deficit swelled.

The trade gap in the second quarter widened to $425.9
billion from $338.4 billion, subtracting 2.8 percentage points
from growth, the biggest reduction since 1982, yesterday’s
report showed. Imports grew at a 29 percent pace, while exports
climbed 10 percent.

Residential construction climbed at a 28 percent pace last
quarter, the biggest gain since 1983, rebounding from a weather-
related first-quarter slump and supported by a government
homebuyer tax credit. The expiration of the incentive has caused
sales to slump, indicating the industry will weigh on growth for
the rest of the year.

More Inventories

The buildup of inventories may also represent an economic
stumbling block. Stockpiles climbed at a $75.7 billion annual
pace last quarter, the biggest gain in more than four years.
Without a pickup in consumer spending, inventories are not
likely to repeat that performance, according to Joel Naroff,
president of Naroff Economic Advisors Inc. in Holland,

Similarly, a 22 percent surge in business investment, the
biggest advance since 1997, isn’t sustainable, he said.

“Businesses are pretty much at the point where they will
only add to inventories at a replacement basis rather than a
rebuilding basis,” Naroff said in an interview. “Once they
finish investing in equipment and make all the adjustment in
inventories, now they are back to fundamentals. There is nothing
there that tells me the rest of this year will be anything

Better Outlook

Not all economists are convinced the outlook is as dour.

“We find some constructive takeaways for the prospects for
growth in the second half of the year,” John Ryding, chief
economist at RDQ Economics in New York, said in a note to
clients. “The recovery has been less dependent on consumer
spending than we had thought.”

Also, stockpiles are near record lows compared to sales,
indicating companies have not overbuilt, while orders for
durable goods indicate business investment “appears to be
ramping up,” said Ryding.

The Institute for Supply Management-Chicago Inc. said
yesterday its business barometer rose to 62.3 this month,
exceeding the median forecast of economists surveyed by
Bloomberg. Figures greater than 50 signal expansion and the
group’s employment and new orders gauges rose as well.

Americans are also cleaning up their balance sheet, putting
themselves in a better position to spend, Ryding said.

The consumer savings rate has been rising, indicating
“consumers may be in better financial shape, and if that’s the
case, we’re likely to get a little bit of a pickup in consumer
spending growth,” he said.

To contact the reporter on this story:
Courtney Schlisserman in Washington at

Re: Crisis really OVER? 7 more Bank Closings this week

We are now up to seven so far this week - likely to surpass 140 of 2009.  Not a helthy sign this early with more than 5 months to go.

Bank Closing Information – July 23, 2010
These links contain useful information for the customers and vendors of these closed banks.

Home Valley Bank, Grants Pass, OR
SouthwestUSA Bank, Las Vegas, NV
Community Security Bank, New Prague, MN
Thunder Bank, Sylvan Grove, KS
Williamsburg First National Bank, Kingstree, SC
Crescent Bank and Trust Company, Jasper, GA
Sterling Bank, Lantana, FL


Re: Crisis really OVER? China rating agency condemns Rivals

Financial Times
rating agency condemns rivals

By Jamil Anderlini in Beijing
July 21 2010

The head of China’s largest credit rating agency has
slammed his western counterparts for causing the global financial crisis
and said that as the world’s largest creditor nation China should have a
bigger say in how governments and their debt are rated.

western rating agencies are politicised and highly ideological and they
do not adhere to objective standards,” Guan Jianzhong, chairman of
Dagong Global Credit Rating, told the Financial Times in an interview.
“China is the biggest creditor nation in the world and with the rise and
national rejuvenation of China we should have our say in how the credit
risks of states are judged.”

He specifically criticised the
practice of “rating shopping” by companies who offer their business to
the agency that provides the most favourable rating.

In the
aftermath of the financial crisis “rating shopping” has been one of the
key complaints from western regulators , who have heavily criticised the
big three agencies for handing top ratings to mortgage-linked
securities that turned toxic when the US housing market collapsed in

“The financial crisis was caused because rating agencies
didn’t properly disclose risk and this brought the entire US financial
system to the verge of collapse, causing huge damage to the US and its
strategic interests,” Mr Guan said.

Recently, the rating
agencies have been criticised for being too slow to downgrade some of
the heavily indebted peripheral eurozone economies, most notably Spain,
which still holds triple A ratings from Moody’s.

There is also a
view among many investors that the agencies would shy away from
withdrawing triple A ratings to countries such as the US and UK because
of the political pressure that would bear down on them in the event
of such actions.

Last week, privately-owned Dagong published its
own sovereign credit ranking in what it said was a first for a
non-western credit rating agency.

The results were very different
from those published by Moody’s, Standard & Poor’s and Fitch, with
China ranking higher than the United States, Britain, Japan, France and
most other major economies, reflecting Dagong’s belief that China is
more politically and economically stable than all of these countries.

Guan said his company’s methodology has been developed over the last
five years and reflects a more objective assessment of a government’s
fiscal position, ability to govern, economic power, foreign reserves,
debt burden and ability to create future wealth.

“The US is
insolvent and faces bankruptcy as a pure debtor nation but the rating
agencies still give it high rankings ,” Mr Guan said. “Actually, the
huge military expenditure of the US is not created by themselves but
comes from borrowed money, which is not sustainable.”

wildly enthusiastic editorial published by Xinhua , China’s official
state newswire, lauded Dagong’s report as a significant step toward
breaking the monopoly of western rating agencies of which it said China
has long been a “victim”.

“Compared with the US’ conquest
of the world by means of force, Moody’s has controlled the world
through its dominance in credit ratings
the editorial said...

Re: Crisis really OVER? U.S. Insolvent & Facing Bankruptcy?

21 July 2010

The US Is "Insolvent and Faces Bankruptcy" -  Jesse Cafee

The common thought amongst even reasonably educated and
economically literate Americans is that China is 'stuck with US
Treasuries' and has no choice, so it must perform within the status
and do as the US wishes, or face a ruinous decline in their
reserve holdings of US Treasuries.

And with real short term US
Treasury interest rates decidedly negative, meaning that it is costing
you money to hold dollars, there is a case to be made that there are a
lot of 'price takers' out there in this world. Wow, they are just that
good, aren't they. Having their heyday in a genuine deflation. A subtle
tax levied on all holders of US dollars, probably more significant
because of the official understatement of inflation. Yo, come git some.

think China is already diversifying their reserve portfolio, and more
stealthily and effectively than one would imagine into 'real goods.'

I suspect that through the use of hedging short positions and
derivatives such as Credit Default Swaps, China would be able to cover a
greater portion of its reserves than the common mind might allow, which
is 'none' because of the obvious counter party risk in the event of a
total collapse, a typical Western reaction, never seeing the gradations
of outcomes.

And if this is in reality one theater in a global
struggle for power, sacrificing a pawn or two, and even a bishop, would
be a small price to pay to bring down the world's remaining superpower,
as indirectly and gracefully as is possible. War is never cheaply waged.

would most certainly be a nuclear option to outright dump
Treasuries outright, and would raise the ire of what is still a
formidable military power. But it is the Western mind that is so
incapable of seeing the many shades of gray in every situation, the
subtle gradations in a range of choices that I believe China not only
sees but is already actively pursuing.

China is not the only country that resents the
devastating frauds that the US has perpetrated on not only its own
people but the rest of the world through its Wall Street banks and
ratings agencies.

Most Americans overlook this developing
estrangement that is beginning to isolate the US and UK from even their
traditional allies in Europe and South America and Asia. This is a
serious error, but so typical of the short term mentality dominated by
greed, dishonesty, and self-delusion that captured the American psyche
in the latter part of The
New American Century
But what choice does Europe have except
to take what the Anglo-Americans serve them. Take it or leave it. And
ain't currency war hell?

It never pays to have a 'checkerboard
when your opponent is playing Go."

Re: Crisis really OVER? Bernanke - Duh - What's next?

Just wait until the scum has to pay for the Washington Mutual debacle. The FDIC is on the hook for the mistakes they made in closing Washington Mutual Bank. They were authorized to close one bank, they closed three and took assets that they by law had no business taking.

On Tuesday the judge ordered an examiner to look into the bankruptcy of Washington Mutual and did not limit the scope of the examiner. Instead she ordered the parties to turn over all documents to the examiner and the examiner will tell the judge what needs to be looked into. The judge also left open the door to the time of the exam and it could be requested at any time to be extended so a complete examination could take place. This means any of the charges made as to planting moles in the company, JPM’s breach of the confidentiality agreement, the FDIC and JPM being in negotiations for 6 months before the seizure and sale of WM (collusion) Goldman Sachs and their part in the game along with other ratings agencies.

Simply put all of the lawyers were lying to the judge and she was unable to get a straight answer, her court was being used as a rubber stamp to allow the theft of billions of dollars and now she is going to find out who the money belongs to.

Instead of looking at what the Debtors council claims as the remaining assets the judge will now follow the absolute rules of bankruptcy and will rule accordingly.

Re: Crisis really OVER? Bernanke - Duh - What's next?

Bernanke Avoids Pledging Action Even as Outlook `Uncertain'

Bernanke Says Fed Is Prepared to Act as Needed

Ben S Bernanke, chairman of the U.S. Federal
Reserve. Photographer: Joshua Roberts/Bloomberg

Portales's Kos Interview on Bernanke Testimony


Play Video

July 21 (Bloomberg) -- Dino Kos, managing
director at Portales Partners LLC, talks about Federal Reserve Chairman
Ben S. Bernanke's testimony today before the Senate Banking Committee.
In his eight-page statement to the committee, Bernanke devoted
almost 10 times as many words to discussing the exit from stimulus as he
did to potential actions to boost growth. Kos talks with Pimm Fox on
Bloomberg Television's "Taking Stock." (Source: Bloomberg)

Federal Reserve Chairman Ben S. Bernanke signaled that signs of deeper
economic weakness would
be needed to justify additional monetary stimulus, even as he
said an “unusually uncertain” outlook for growth.

The Fed’s near-zero interest rates and record
balance sheet
are already “very stimulative,” Bernanke said yesterday in
Senate testimony. He outlined possible options “if the recovery
seems to be faltering,” including amplifying the commitment to
low borrowing costs, while cautioning that officials haven’t
fully reviewed the measures.

Bernanke’s comments, including a reiteration that the Fed
is planning for an exit from its unprecedented stimulus, sent
stocks tumbling from Wall Street to Tokyo. While Bernanke left
the door open to additional steps, he said nothing would happen
in the “near term.”

“We’d have to be staring at a more significant
redevelopment of financial crises or a more detrimental downturn
in activity to provoke a significant policy response,” said
Keith Hembre, chief economist at U.S. Bancorp’s
FAF Advisors Inc.
in Minneapolis and a former Fed researcher. “That’s probably a
disappointment to some in the market that anticipate that every
time when the market isn’t continuing to steadily go up it
requires policy makers to do something,” said Hembre, whose
firm oversees more than $91 billion.

The Fed chief devoted a bigger portion of his prepared
testimony to how the Fed would eventually withdraw its
unprecedented credit expansion.

Stocks Drop

The Standard & Poor’s 500 Index
of stocks dropped 1.3
percent to 1,069.59 at the 4 p.m. close of trading in New York.
Yields on two-year Treasury securities fell to 0.552 percent,
the fourth record low in five days as investors put off
expectations for the Fed to raise borrowing costs. In Tokyo, the
Nikkei 225 Stock Average fell 0.6 percent.

Bernanke’s semiannual testimony on monetary policy
concludes today with a 9:30 a.m. hearing before the House
Financial Services Committee in Washington.

“We’re not prepared to take any specific steps in the near
term, particularly since we’re still also evaluating the
recovery, the strength of the recovery,” Bernanke said under
questioning from lawmakers at the Senate Banking Committee.

Former Fed Governor Lawrence Lindsey predicted that the U.S.
central bank will take additional easing steps by the end of the

Deflation Concern

“It would be obvious for the Federal Reserve by the end of
this year that we are entering in a deflationary trap and I
would expect some response by the Fed by that time,” Lindsey,
who also served as a White House economic adviser in the Bush
administration in 2001-2003 and now runs his own consulting
company, said at a forum in Tokyo today.

Among the options outlined by Bernanke during questioning
would be to alter the Fed’s “language or our framework
describing how we intend to change interest rates over time,
giving more information about that,” potentially using a
strategy adopted by the Bank of Canada last year.

The Fed has repeated since March 2009 its commitment to
keep the benchmark federal funds rate very low for an “extended
period” without specifying how long that would be. The Bank of
Canada gave a timeframe for keeping rates low.

Bernanke’s comments on the economy and monetary policy
showed little change from minutes of the Fed’s June 22-23
meeting, which said officials would need to consider options
should the economic outlook “worsen appreciably.”

2007 Reversal

In August 2007, with the subprime-mortgage market
collapsing, Bernanke and his colleagues judged that inflation
was their “predominant” concern and left their benchmark
interest rate at 5.25 percent. Within two months, they had
scrapped that view and begun cutting rates. That December, the
worst recession since the 1930s began, and a year later, the
federal funds rate was cut almost to zero.

This year, while the economy is growing, recent data have
prompted analysts to cut their forecasts. In June, U.S. factory
output fell 0.4 percent, the most in a year, housing starts
declined to the lowest level in eight months and private
employers added fewer workers to payrolls than economists

The average growth in private payrolls of 100,000 a month
so far this year is “insufficient to reduce the unemployment
materially,” and it will probably take a “significant
amount of time” to restore the almost 8.5 million jobs lost in
2008 and 2009, Bernanke said.

‘Too Complacent’

“I do think the Fed chairman is too complacent,” said
John Makin, a visiting scholar at the American
Institute in Washington and principal at hedge fund Caxton
Associates LLC. “It appears the Fed’s internal model is not
calling for a slowdown, and so he is sticking with that.”

Fed policy makers trimmed their forecasts for U.S. growth
and raised unemployment projections at their June meeting. For
2011, officials expect growth ranging from 3.5 percent to 4.2
percent, down from 3.4 percent to 4.5 percent, and a fourth-
quarter unemployment rate of 8.3 percent to 8.7 percent, up from
8.1 percent to 8.5 percent.

Those projections “look very stale,” said Hembre.

Makin said Bernanke should “pledge to keep the fed funds
rate at zero for two years.”

In April 2009, the Bank of Canada cut its key rate to a
record 0.25 percent and vowed to keep it there until the second
quarter of this year, “conditional on the outlook for
inflation.” It raised borrowing costs in June.

Outlook for Rates

The first rate increase by the Fed could occur as soon as
the second quarter of next year, according to the median
estimate in a Bloomberg News survey in early July. A more
specific time commitment from the Fed might reduce yields on
Treasury notes, cheapening financing costs for millions of
businesses and consumers.

The move also wouldn’t require the Fed to expand its $2.34
trillion balance sheet or allocate more credit to industries
such as housing, a move some policy makers oppose. The Fed has
already purchased about $1.25 trillion of agency mortgage-backed
securities to lower home-loan costs.

Another possible step, Bernanke said, is restarting
securities purchases after the Fed bought $1.7 trillion of
housing debt and Treasuries through March 2010. Fed officials
have been debating this year the timing and pace of selling the
mortgage securities.

Interest on Reserves

The Fed could also lower the 0.25 percent interest rate it
pays on the $1 trillion of deposits held there by banks,
Bernanke said.

Reducing the interest rate on reserves would be “more
problematic than stimulative,” Joseph Abate, a money-market
strategist at Barclays Capital Inc. in New York and former Fed
researcher, said in a report.

A reduction would lower yields as banks used their reserves
to buy Treasury securities, encouraging the departure of $500
billion in deposits from money-market mutual funds, Abate said.

“Clearly each of these options has got drawbacks,
potential costs,” Bernanke said. “I do think that there is
some potential for some of those steps to be effective.”

With the average U.S. rate on a 30-year home loan at a
record low 4.57 percent for the week ended July 15, Fed
officials have been focusing on ways outside of monetary policy
to aid the economy, such as encouraging lending to small

The Fed is saying, “We can muddle through here,” said
John Canally Jr., investment strategist and
economist at LPL
Financial Corp. in Boston, which oversees $285 billion.

To contact the reporter on this story:
Scott Lanman in Washington at;
Craig Torres in Washington at

Re: Crisis really OVER? 1st Goldman Sachs - now AIG FRAUD

Insurer AIG agrees to massive $725m fraud

AIG building
AIG was bailed out by the US government
at the height of the banking crisis

The US insurance giant AIG
has agreed to pay $725m (£474m) to settle a long-running fraud case
against it.

The settlement is likely to be one of the biggest in US
history, following a class action lawsuit led by three Ohio pension

They alleged that AIG had engaged in stock price
manipulation, anti-competitive behaviour and accounting fraud between
1999 and 2005.

That, they say, resulted in shareholders losing millions.

The court now needs to give its approval before payments can
be made.

A first payment of $175m is scheduled within days of the
court's approval, however, while AIG is expected to raise the further
$550m though the issuing of new shares.

AIG is now 80% owned by the US government following a massive
bailout of the company at the height of the financial crisis.

Ohio Attorney General Richard Cordray, who represented the
Ohio funds, said total payouts from AIG to shareholders would now total
$1bn, including previous settlements.

AIG said it was "pleased to have resolved this matter",
adding that it could now focus on paying back taxpayers the $182bn used
to rescue it.

Re: Crisis really OVER? Double Dip/Krugman -Inflation- Reality

Myths” Paul Krugman
Does Not Want To Talk About

Posted: Jul 08 2010     By: Greg Hunter      Post
Edited: July 8, 2010 at 8:56 pm

Filed under:

Jim Sinclair’s Commentary

Gold is headed to and through $1650. Greg Hunter points out a major
and present reason why.


Dear CIGAs,

I have been telling you for months there is going to be a double dip
in the economy.  Nobel Prize Winning economist Paul Krugman also thinks
the economy is so bad we need to keep on stimulating the economy.  In a
New York Times Op-Ed piece last week, Krugman said, “. . . somehow it
has become conventional wisdom that now is the time to slash spending,
despite the fact that the world’s major economies remain deeply
depressed.”  In short, cut backs, or austerity, is not what the economy
needs right now. (Click
here for the complete NYT Op-Ed from Krugman.)

In a nutshell, Mr. Krugman thinks America will do no harm in the
short term if the U.S. government prints money to prop up the economy
until it can stand on its own.  He thinks it is a myth to believe in
“invisible bond vigilantes” who financially attack countries with sky
high debt.  Krugman wrote, “Bond vigilantes are investors who pull the
plug on governments they perceive as unable or unwilling to pay their
debts. Now there’s no question that countries can suffer crises of
confidence (see Greece, debt of). But what the advocates of austerity
claim is that (a) the bond vigilantes are about to attack America, and
(b) spending anything more on stimulus will set them off.   What reason
do we have to believe that any of this is true? Yes, America has
long-run budget problems, but what we do on stimulus over the next
couple of years has almost no bearing on our ability to deal with these
long-run problems.”   

What evidence does Krugman give that America can keep printing money
until things get better?  Interest rates on government debt are staying
low.  For example, the 10 year Treasury is paying around 3%.  Krugman
said, “Far from fleeing U.S. government debt, investors evidently see it
as their safest bet in a stumbling economy. Yet the advocates of
austerity still assure us that bond vigilantes will attack any day now
if we don’t slash spending immediately.”   

What Krugman glosses over is the government has spent trillions
keeping rates down and the economy going.  The Fed has bought at least
$1.25 trillion in mortgage backed securities with money printed out of
thin air.  There has been “quantitative easing” (code for money
printing) to the tune of at least $300 billion to buy, what else,
government debt.  Congress has raised the debt ceiling to more than $14
trillion.  That helped fund an $862 billion stimulus plan and a $700
billion TARP bailout for the banks. (Part of TARP has been paid back,
but taxpayers are still owed around $296 billion.) Now, the Fed is
considering ways to head off another plunge in the economy.  A recent
Telegraph UK story said, “Fed watchers say Mr. Bernanke and his close
allies at the Board in Washingtonare worried by signs that the US
recovery is running out of steam. . . .Key members of the five-man Board
are quietly mulling a fresh burst of asset purchases, if necessary by
pushing the Fed’s balance sheet from $2.4 trillion . . .to uncharted
levels of $5 trillion.”  (Click
here for the complete Telegraph UK story.)

There is also evidence the government is buying its own debt from
hedge fund manager Eric Sprott.  In December of 2009, Sprott took a hard
look at who was buying Treasuries.  Sprott discovered a sector the
Treasury Department calls “Households” that bought $528 billion in
government debt by the third quarter of 2009.  The Sprott report said,
“We must admit that we were surprised to discover that “Households” had
bought so many Treasuries in 2009. They bought 35 times more government
debt than they did in 2008. Given the financial condition of the average
household in 2009, this makes little sense to us. With unemployment and
foreclosures skyrocketing, who could afford to increase treasury
investments to such a large degree? . . . -who is the Household Sector?
They are a PHANTOM.  They don’t exist. They merely serve to balance the
ledger in the Federal Reserve’s Flow of Funds report.”  (Click here
for the Sprott report.)

In June of 2010, according
to a CNN story
, “Households” held nearly $800 billion in
Treasuries.  This “phantom” buying has people like Eric Sprott thinking,
“It makes us wonder if it’s all just a Ponzi scheme.”   Are
“Households” and the world really flocking to the safety of Treasuries? 
Or is the Fed becoming a buyer of last resort?  I think it is probably
both.  When the government buys its own debt, it creates false demand
and artificially depresses interest rates.    

The idea that interest rates are being magically held down by extreme
demand for our ballooning debt is the real myth.   Krugman fails to
recognize any downside of all this money printing.  Maybe he has fallen
victim to his own prejudices.  As Krugman says in the beginning of his
Op-Ed piece, “Much of what Serious People believe rests on prejudices,
not analysis. And these prejudices are subject to fads and fashions.   

Milton Freidman, another Nobel Prize winner in economics, summed up
the result of a loose monetary policy in his famous quote, “Inflation is
always and everywhere a monetary phenomenon in the sense that it is and
can be produced only by a more rapid increase in the quantity of money
than in output.” If the country takes the path Mr. Krugman is
suggesting, we might not have a double dip in the economy, but we will
have some very big inflation because you just can’t have it both ways.

to full article…

Re: Crisis really OVER? 40% Florida homes sales vs 1 % in 2005

40 percent of Florida homes sales are


Palm Beach Post

Sales of foreclosed homes in Florida made up nearly 40 percent of
all purchases in the first part of this year, a ``terrifying''
statistic, one analyst said, and one that led to deeply discounted
prices on distressed properties.

In Miami-Dade County,
foreclosure sales made up nearly half -- 47 percent -- of all homes
sales in the first five months of 2010, according to a new report from
Irvine, Calif.-based RealtyTrac, which aims to measure foreclosure sales
and their impact on home pricing. In Broward County, 46 percent of all
homes sales involved distressed properties.

To compare, less
than 1 percent of Florida home sales in 2005 were of foreclosed
properties, RealtyTrac found.

The report, released Wednesday, defines foreclosure sales as
those of homes that are bank owned or where the owners have defaulted on
the mortgage and received at least one foreclosure notice.

``Forty percent is a significant number,'' said Michael Sichenzia,
president of Dynamic Consulting Enterprises in Deerfield Beach. ``When
you look at where it should be, it's a terrifying number in the short
term and will reverberate throughout the whole system.''

Sichenzia said distressed property sales should make up about 2 percent
of total sales.

By 2007, foreclosure sales grew to 4 percent
of the total market in Florida. It rose to 38 percent last year.

Yet Florida didn't even make it into the top three states nationally
for distressed property sales, and even showed a small decrease of 3
percent compared to the fourth quarter of 2009.

Coming in
first was Nevada, where 64 percent of all sales were foreclosures.
California and Arizona followed with 51 percent and 50 percent,

Nationally, foreclosed property sales during
the first quarter made up 31 percent of all sales and had an average
sales price of $171,971 -- 15 percent below that of regular sales.

Average sales prices for distressed properties in Miami-Dade County
were $149,236 in May, reflecting a 33 percent discount compared to
traditional sales. Those buying foreclosures in Broward paid an average
of $127,258, a 21 percent discount compared to traditional sales.

Statewide, foreclosure sales were discounted 28 percent compared to
regular sales.

Banks became more aggressive this year in
taking over foreclosed properties as homeowners in trial loan
modifications dropped out or were refused permanent payment reductions.

In May, 10,491 Floridians lost their homes to bank takeovers -- the
final step in the foreclosure process. That was an 81 percent increase
compared to May 2009, according to RealtyTrac.

93,777 homes were repossessed by banks in May.

``As lenders
have begun repossessing homes at record levels over the first half of
2010, it will be interesting to watch how they will manage the inventory
levels of distressed properties on the market in order to prevent more
dramatic price deteriorations,'' said James Saccacio, chief executive
officer of RealtyTrac.

Sichenzia said he doesn't believe
there is a management plan, and that sales prices will continue to

``There is a lot of pain that needs to happen
between now and the bottom,'' he said.

Miami Herald staff writer Toluse Olorunnipa
contributed to this report.

Read more:

Re: Crisis really OVER? Worst is yet to come for the Euro!

Euro's Worst to Come, Top Analysts Say

ECB President Jean-Claude Trichet

The ECB, led by President Jean-Claude Trichet,
began buying government bonds as part of the EU rescue package to cap
yields and underpin the euro. Photographer: Mario Proenca/Bloomberg

The most accurate foreign-exchange
forecaster says the euro will continue to weaken and may
approach parity with the dollar as the European Central Bank
buys more government bonds to support the region’s economy.

Shaun Osborne, chief currency strategist at TD
Inc. in Toronto, said the euro will depreciate to $1.13 in the
third quarter, $1.08 by year-end and may near $1 in 2011 before
recovering. Osborne, whose predictions were within 4.1 percent
of the mark on average, according to data compiled by Bloomberg,
was echoed by the nine following most-accurate forecasters
anticipating a lower euro in the next two quarters.

The euro weakened 15 percent against the dollar in the
first half on speculation record budget deficits from Ireland to
Portugal and Greece will force governments to cut spending and
reduce economic growth. Bond yields among the euro-area’s so-
called peripheral nations surged relative to German bunds even
as European Union leaders crafted an almost $1 trillion aid
package to avoid sovereign defaults.

“It’s going to be an immensely challenging environment for
these economies to try and regain competitiveness internally
within the euro zone,” said Osborne, 47, who has been head of
currency strategy at TD Securities since he joined in 2006 from
Scotia Capital. “The ECB is moving towards its version of
quantitative easing. It suggests they’re going to be very late
now to the tightening cycle.”

The currency, shared by 16 European nations, rose 0.5
percent to $1.2596 as of 8:45 a.m. in London. It has gained 5.6
percent since hitting a more than four-year low of $1.1877 on
June 7, after falling from 2009’s high of $1.5144 on Nov. 25.

Diversifying Reserves

The ECB began buying government bonds from some member
nations on May 10, part of the EU rescue package, to cap yields
and underpin the euro. The decline threatens to break up the
region, former Federal Reserve Chairman Paul Volcker said in
May, while central banks are putting more of their reserves into
currencies other than the euro, data from the International
Monetary Fund show.

“Reserve diversification, one of the drivers behind euro
strength ever since the introduction of the single currency, is
therefore unlikely to be euro-dollar supportive over the next
few years,” said Henrik Gullberg, a strategist in London at
Deutsche Bank AG, the world’s biggest foreign-exchange trader
and one of the five best predictors of the currency’s decline
against the yen and the pound this year.

Most Accurate

TD Securities, a unit of Canada’s second-biggest lender,
Toronto-Dominion Bank, was also
the most accurate forecaster for
the dollar against the yen, second best for the euro versus the
yen and the dollar-Swiss franc exchange rate. The firm’s
predictions had the lowest margin of error in a survey of 48
forecasts for eight currency pairs in the past 18 months.

The firm surpassed second-ranked Standard Chartered Plc,
whose margin of error was 4.37 percent, third-place Wells Fargo
& Co., Credit Suisse Group AG in fourth place and Canadian
Imperial Bank of Commerce in fifth.

Recent euro strength is a sign traders are trimming bearish
bets after wagering correctly that the currency would weaken,
rather than a change in sentiment, according to Callum Henderson, head of foreign-exchange
strategy at Standard
Chartered in Singapore.

Fiscal Tightening

“We do not think euro-dollar weakness is over,” Henderson
wrote in an e-mail. “Growth in the euro area will remain
subdued for some time due to fiscal tightening. To be sure, euro
weakness will benefit the exporters in north Europe.”

Henderson predicts a drop to $1.10 to $1.12 this quarter,
before the euro recovers to $1.30 by 2012.

CIBC, based in Toronto, predicts the euro will depreciate
to $1.18 in the third quarter, before climbing to $1.20 by the
end of the year and $1.24 by mid-2011. The next six months will
be a “turning point” as traders focus on economic frailty in
the U.S., said Avery Shenfeld, the chief economist at CIBC.
Toronto-based firm’s average margin of error was 5.19 percent.

Futures show a majority of traders don’t expect an
interest-rate increase by the Fed until the second quarter of
2011 after the central bank said June 23 that “financial
conditions have become less supportive of economic growth on
balance, largely reflecting developments abroad.”

“There will be an absence of enough growth to prompt Fed
tightening anytime soon, and a recognition that if domestic
demand cannot sustain the U.S. expansion that a weaker dollar
will be needed to allow trade to fill in for some of that,”
said Shenfeld, who joined CIBC 16 years ago and has been chief
economist for a little more than a year.

Rate Differentials

The Fed has kept its benchmark interest rate at zero
0.25 percent since December 2008, while the ECB’s main rate has
been at a record low of 1 percent since May 2009.

The most accurate analysts were identified using data
gathered for Bloomberg’s Foreign Exchange Forecasts function.

Firms were compared based on seven predictions: six
forecasts as of the end of each quarter for the close of the
subsequent quarter, starting Dec. 31, 2008, plus estimates as of
a year ago for this year’s second quarter. Only firms with at
least four forecasts were ranked in each currency pair, and only
those that qualified for ranking in at least five of eight pairs
were included in the overall best list.

The majority of analysts say the euro has further to fall
against the dollar, dropping to $1.19 in the first quarter and
ending 2011 at $1.21, according to the median of at least 26
forecasts compiled by Bloomberg.

Weakness ‘To Persist’

“Over the next six months, the market’s concern over the
growth outlook is likely to persist,” said Derek Halpenny,
European head of global currency research in London at Bank of
Tokyo-Mitsubishi UFJ Ltd., which ranked seventh overall, with a
5.55 percent margin of error. “The scenario for the global
economy is deteriorating, and in those circumstances you’ve got
to prefer the dollar over countries where they are implementing
austerity programs.”

The euro is most likely to weaken in the second half of
this year against the Australian, New Zealand and Canadian
dollars, said Nick Bennenbroek, 39, global head of currency
strategy in New York at Wells Fargo, the biggest U.S. home
lender. The bank had a margin of error of 4.76 percent across
all currency pairs and was the top forecaster for the dollar
against the yuan.

‘Continue to Weaken’

“Our overall view is that the euro will continue to weaken
and Australia, New Zealand and Canada will rebound over the next
year,” said Bennenbroek, who joined the bank in 2007, beginning
his career in finance at the New Zealand Treasury in Wellington.
“These are medium-term trades we believe people should be
putting on now.” The euro will end this year at $1.20 and
conclude 2011 at $1.08, he said.

Currency forecasting became easier the past 12 months after
the worst of the global financial crisis, sparked by Lehman
Brothers Holdings Inc.’s collapse in September 2008, passed,
said Niels Christensen, 49, chief currency analyst
at Nordea
Bank AB in Copenhagen. Nordea was the most-accurate forecaster
for the euro-dollar exchange rate.

“In March 2009, everybody was wondering whether we would
get another Lehman, that the economy was extremely fragile,” he
said. “In December 2009, the wave of risk appetite was abating
and currencies started to trade on fundamentals and rate
differentials again.”

The euro will trade at $1.25 through year-end before
weakening to as low as $1.15 in 2011, according to Nordea.

Ray Farris, head of foreign-exchange strategy
in London at
Credit Suisse, whose margin of error in the survey was 4.81
percent, said he wasn’t able to immediately comment.

The European currency will rise versus the yen, climbing to
114 yen in the fourth quarter and 127 yen by the end of 2011,
from 109.36 today, median forecasts show. The pound will fall to
$1.44 this quarter, and strengthen to 81 pence per euro in the
first quarter, the estimates show. Sterling was at $1.5202 and
at 82.85 pence per euro today.

To contact the reporters on this story:
Matthew Brown in London at