Federal Workers Earn More Than Twice The Average American

Check this out from Casey's Daily Dispatch:

"As you probably expected, the loss of employment has occurred entirely in the private sector, as Uncle Sam grows more bloated each day. If you happen to be in the private sector, it also might not psych you up too much to know that the average pay per federal worker in 2009 was reportedly $75,419, while per capita average annual income across the U.S. is only about $36,000."

Next time you have to wait in line at the grocery store, don't get pissed at the check-out clerk because they earn less than the typical Federal employee and they are infinitely more productive.  Here's the link to Casey's newsletter, which is free and worth subscribing to for the cost of an email:  LINK

Here Is Why Dollar Bulls Are Wrong

and why Dennis Gartman will end up looking like an idiot for promoting getting long the U.S. dollar. The big Wall Street banks have accumulated a record short position in the U.S. dollar - the chart is courtesy of the erudite and savy Trader Dan Norcini at http://www.jsmineset.com/:

The red line represents the big Wall Street banks and the massive size of their bet against the U.S. Dollar, the black line represents the Dennis Gartmans of the world and the institutions who are betting against the big banks; the blue line represents the small-fries who robotically trade based on what they hear on CNBC...the small fries and large funds will get fried once again by Wall Street:

US-Dollar-Chart-COT-as-of12-29-2009 -

If you follow the real money, you might make some of your own.  If you listen to the shills on CNBC, you are guaranteed to end up waiting in line for Government entitlements.

Hey Harry, Exactly What Does "A Negro Dialect" Sound Like?

I was going to leave this one alone, but the more I thought about it and discussed it with others, the more convinced I am that Harry Reid should - at a minimum - relinquish his leadership position in the Senate, finish out his term, pull out of a re-election bid, and go back to Nevada and crawl back into his racist, bigoted, redneck desert cave and disappear from civilized society. 

But this won't happen because Obama needs Reid in order to jam through the wildly unpopular health care bill that Reid is in charge of dragging through the Senate using any unsavory, corrupted political tactics required to get the job done.  So Obama has exercised political expedience and turned the other cheek for the sake of saving his arrogant political agenda.

Reid's comment reflects incredibly poorly on the people of Nevada who support him and on the Democrats who are standing by tolerant and without rebuke.  Rest assured, if a Republican was caught making the same remark, Al Sharpton and Jesse Jackson would have a lynch-mob gathered outside of the offending politician's office demanding his political scalp and I'm sure Obama would be taking a much different public tact.

It's beyond contemptible that Obama has rolled over like this on Reid's remark. To begin with, using the term "negro" harkins back to the 40's and 50's when blacks were "separate but equal." I wouldn't be surprised if Reid secretly thinks there should be separate bathrooms and water fountains in the Senate building for whites and "those colored Congressmen with the funny dialect."

Reid's remark was in direct contrast to the spirit and message of Obama's campaign and election victory, which is that Americans have transcended racism and that our educated, advanced society is blind to skin-color.  Obama is pathetic for not at least censuring Reid over this and I predict there will be a backlash from a fair portion of his black support base. To be quite frank, Reid's language was so patronizingly colloquial and seeded in bigotry that he should do the right thing and resign immediately.

Musings On The Markets - "A Penny For The Old Guy"

It appears as if the Asians tried to "game" the Comex by dumping gold overnite ahead of the jobs number and got their fingers burned. This is an epic reversal for the metals on a "jobs lost" Friday. This is incredibly bullish.

The Fed has made it clear that they are going to have to ramp up their printing press, the Treasury yield curve is starting to price in an acceleration in inflation - either dollar devaluation/money supply expansion or actual price inflation, or both - and the Obama Government loses credibility now on a daily basis. The stock market - contrary to the babbling ignorance expressed by those on CNBC/Bloomberg (and now NPR) - is not reflecting the expectations of robust economic growth, but rather the clear and present signal that the Fed has no choice left but to hyperinflate the money supply in order to monetize growing Treasury issuance and the accelerating collapse of commercial and residential credit markets. If we have any kind of surprises this year, it won't from an unexpectedly strong economy but from an unexpected move higher in gold.

On an anectdotal note: we were surveying the home listings in the Denver area online last night and were quite stunned by the large number of listings in zip codes most affected by bubble-pricing. Even more shocking was the number of homes for rent on Craigslist. Oh ya, there are now 37 million people in this country - over 10% of the population - now on food stamps.  Our economic system is drifting into an economic Heart of Darkness - "Mistah Kurtz He Dead."

This just in:  the Government household survey show 680,000 jobs were lost in December.  This report, which never gets any televised media exposure and won't reported in newspapers tomorrow, is considered to be infinitely more accurate than the HIV-cocktail headline-reported number.

Enough Is Enough: Time To Fire Geithner

Geithner is a true scumbag and that should have been quite apparent in the way that he released the news that the Treasury was removing the bailout limitations on FNM and FRE on Chrstmas Eve, when no one was around to see the news as it hit the wires.  It was also done strategically like this in order to avoid the Congressional approval that would have been required had the decision been implemented just 8 days later in the new year.  But Geithner should have never been given the job of Treasury Secretary in the first place after it was revealed he was a habitual tax cheater.  Shame on Obama for not withdrawing his nomination of Geithner and shame on Congress for confirming the appointment.

NOW it appears as if Tim Geithner intentionally told AIG to violate SEC laws by instructing them, as then-Chairman of the NY Fed, to withhold information from the public about the details of the close to $200 billion taxpayer bailout of AIG.  From Bloomberg News:

The Federal Reserve Bank of New York, then led by Timothy Geithner, told American International Group Inc. to withhold details from the public about the bailed-out insurer’s payments to banks during the depths of the financial crisis, e-mails between the company and its regulator show (Here's the link:   Time To Dump Geithner)

We already know that Geithner paid out 100 cents on the dollar, using Taxpayer money, to the banks involved, knowing full well that market value was, at most, 30-40 cents on the dollar and likely a lot less.  But even more stunning is the email evidence showing that Geithner instructed AIG to hide these fetails from public - details which AIG was going to originally disclose:

AIG said in a draft of a regulatory filing that the insurer paid banks, which included Goldman Sachs Group Inc. and Societe Generale SA, 100 cents on the dollar for credit-default swaps they bought from the firm. The New York Fed crossed out the reference, according to the e-mails, and AIG excluded the language when the filing was made public on Dec. 24, 2008.

Enough is enough, Barack.  Time to start cleaning up your first-year catastrophe and try to start doing the right thing for the people who gave you the benefit of huge doubt and voted for your platform of change and reform.  As it stands now, the only difference between Obama and his predecessor is that Bush never made any attempt to lie about the fact that he was going to screw the Taxpayer for the benefit of Big Corporate America.

Geithner should be terminated immediately and investigated for tax fraud and violating SEC laws.  The evidence is clear and unambiguous.  This should also lead to a full investigation of Geithner's background.  It's probably too late for Obama to save his chances of being re-elected, but at least he can start laying the groundwork for the future of this country by upholding his campaign platform promises and embarking on real Change and reform.

Bernanke Is Either A Complete Idiot OR An Unambiguous Liar...

In some respects, I would say that both descriptions apply.  With regard to his speech yesterday - which has attracted quite a bit of attention as well as raised a lot of eyebrows - I would assert that Bernanke has taken the "politically pragmatic" tact, which would otherwise be known as "lying one's ass off and passing the buck."

Bernanke asserts that the low interest rates were not responsible for fueling the housing bubble and that regulation was "too late" to stop the whole process.  This is utter and complete nonsense. Quite frankly, in many years of watching and evaluating statements made by policy-making officials, I have never seen a statement as absurd and lacking credibility as ones made by Bernanke yesterday.  I find it hard to believe that Bernanke actually believes this garbage explanation - and if he does then his role as Fed Chairman should be terminated immediately, because his academic, intellectual and professional credibility would be called into question. 

With respect to interest rates, it was both the low interst rate policy implemented by Greenspan, and extended down to zero by Bernanke, that directly contributed to the blowing up of housing prices by allowing buyers to pay substantially higher prices which were justified by lower monthly payments derived from lower interest rates.  Even more significant was the continued flooding of money into the system, directly by the Fed ramping up the money supply and, indirectly, by the Fed relaxing capital standards, which allowed banks lend a lot more money against their balance sheet and assume more risk in the form of bigger mortgages and much higher mortgage debt/equity ratios.  Moreover, the capital flood provided by the Fed allowed the monstrous expansion of the securitzation machine operated by Wall Street, which fueled the ability of both the GSE's and private banking sources, like Countrywide, Washington Mutual and Lehman (Aurora Loan Services), among many others, to raise hundreds of billions in very risky capital and in the form of deadly off-balance-sheet derivatives.  The Fed, led by Bernanke, knew all of this was occurring and yet did nothing to curtail the deadly systemic mortgage finance machine.

As for Bernanke's statement that regulation came too late to stop the bubble, that comment is as patently absurd as his statement about interest rates.  Why?  Because the regulatory checks and balances were already in place.  It was the lack of enforcement of these regulations that allowed the massive ratings fraud perpetrated by the rating agencies, enabled the complete deterioration of mortgage underwriting standards that fueld the Alt-A/subprime boom and permitted the catastrophic amount of leverage which was assumed by all financial intermediaries.  Contrary to Bernanke's statement, it was his own lack of enforcement of many of the regulatory functions which fall under Fed oversight, among other Federal agencies, which allowed lending fraud at all levels to fuel home prices to such economically and financially presposterous levels.

I thus would request that the real Ben Bernanke please step forward.  Are you the political animal who made a disingenous attempt to evade your role in the ongoing collapse of our economic system, or are you the imbecile who gave a speech with statements so ludicrous that they insulted the intelligence of anyone who bothered to pay attention to what you said?  Our system absolutely does not need a lot more regulations piled on top of the ones already in place.  It does need leaders and policy-makers who are willing to do the right thing and honestly and rigidly enforce the existing regulations.  I believe it's too late for this...et tu Ben?

Viet Nam's Decision To Close Its Gold Trading Floors

I have yet to see a credible "official" reason for the closing of the Viet Nam gold exchanges.  I just got off the phone with a colleague, however, who does business with some Cambodians.  The person he deals with told my colleague that there is significantly more demand for gold in Cambodia and Viet Nam than there is supply and that most of the gold that is sold to the citizens in those countries is smuggled in.  This account is consistent with the excellent reporting on Viet Nam gold trading provided on a daily basis to the Midas report at http://www.lemetropolecafe.com/ by John Brimelow.  Viet Nam has quietly become one of the largest gold importers of gold in the world.  Apparently, as per the Cambodian source, the voracious appetite for gold is now endemic to all of Southeastern Asia.  Even more interesting, this source told my colleague that Honk Kong and Singapore are slowly usurping London as the nexus for global physical gold trading.

I have postulated for a while now that part of China's long term goal is to become the largest owner of gold and to control the global gold trading market as part of its plan to become a global economic superpower.  All the indications are there that this is now occurring, including its recent move to allow - and even encourage - its citizens to accumulate gold and silver.

Getting back to Viet Nam, I suspect that the Government's decision is an attempt to increase control and regulation of the gold market, as Viet Nam was actually the largest importer of gold in 2008.  Apparently this large amount of buying has put downward pressure on the dong (Viet Namese currency), as citizens have been en masse dumping the sovereign currency in exchange for gold.  Ultimately, I believe this will put upward pressure on the global price of gold, as investors in Viet Nam rush to buy as much gold as they can before the end of March, which is when all 20 gold trading floors are required to stop operations.