Friday, September 20, 2013

The Brain Damage Continues

I see the Einstein Foundation at Bank of America is now forecasting a taper in December of $10 billion.  I guess they expect that the unemployment will be below 6.5% by then?  Doubtful.  They just suffer from irreparable brain damage.

I also see that non-FOMC member James Bullard was on Bloomberg saying the Fed could taper by $10 billion in October.  The part that's being left out of the headlines is that he said "if the economic data warrants it."  Thanks James.  Thanks for regurgitating the message that Bernanke already gave us on Wednesday.  What a f#cking waste of time Bullard is.  Can someone please hand James mop and a bucket so he can wipe up his mess.  Thankfully Fed officials are not paid by the taxpayers.  Unfortunately, the mental midgets are Bank of America indirectly are being fed by our tax dollars...

Perhaps James Bullard and the brain trust at Bank of America are better suited to join the Obama supporter behind the counter at obese America's favorite fast food joints:

Have a good weekend.  You all better enjoy what you can, while you can, as much as you can - it's going to start getting very "bumpy" for everyone except the top 0.5% soon.


  1. Homeless Being Paid To Camp Out For iPhone 5C, 5S

    PASADENA ( — Several homeless people were being paid to stand in line Friday in Pasadena for the release of the iPhone 5C and 5S.

    The phones went on sale at Apple and other retail stores at 8 a.m.

    Pasadena police told KNX 1070′s Jon Baird that many people in line at the Colorado Boulevard store were recruited from downtown Los Angeles.

    “I was asked yesterday if I would be willing to sit in line for someone so they could get a phone. I said ‘Sure, I’ve got nothing else to do.’ So I’m here,” Mickie, who was driven from the Midnight Mission area along with 10 others,said.

    It was unclear how much Mickie was being compensated, however, others in line said they were being paid as little as $35 to wait in line for hours.

    “They dropped us, sit in line, get the vouchers and then we’ll be paid,” she added.

    Vouchers were given out at 6 a.m. to those in line.

    Consumer demand or consumer sham?

  2. Nanex ~ 20-Sep-2013 ~ Einstein and The Great Fed Robbery
    One of Einsteins great contributions to mankind was the theory of relativity, which is based on the fact that there is a real limit on the speed of light. Information doesn't travel instantly, it is limited by the speed of light, which in a perfect setting is 186 miles (300km) per millisecond. This has been proven in countless scientific experiments over nearly a century of time. Light, or anything else, has never been found to go faster than 186 miles per millisecond. It is simply impossible to transmit information faster.

    Too bad that the bad guys on Wall Street who pulled off The Great Fed Robbery didn't pay attention in science class. Because hard evidence, along with the speed of light, proves that someone got the Fed announcement news before everyone else. There is simply no way for Wall Street to squirm its way out of this one.

    Before 2pm, the Fed news was given to a group of reporters under embargo - which means in a secured lock-up room. This is done so reporters have time to write their stories and publish when the Fed releases its statement at 2pm. The lock-up room is in Washington DC. Stocks are traded in New York (New Jersey really), and many financial futures are traded in Chicago. The distances between these 3 cities and the speed of light is key to proving the theft of public information (early, tradeable access to Fed news).

  3. Hi Dave:

    Thank you for your insights. I do believe you are correct in predicting financial collapse. But the monkeys at the FED & US Gov. have been able to man the buckets and keep this ship afloat a lot longer than I have imagined.

    I saw the financial crisis in 2003/04 and started buying physical then, thinking 5 years tops. Told everyone who would listen to pay attention and buy physical. Then 2008 hit and I thought "Ah HA!" here we go.
    But they papered over that gaping financial wound and were able to make the stock market look like the place to be for Joe Sixpack. Even after losing half his portfolio in 2008, my Dad hung on and is back to where he was in 2008 plus 50%. He thinks stocks are great and taunts me about my suggesting physical before 2008. Even though he agrees that he still would be way ahead had he bought physical, he is thrilled with the stock market today. He still hasn't bought any physical and I don't believe he will. He will be blindsided.

    So here we are 5 years after the 2008 crisis and they are still bailing our the boat, err, banks with paper and the ship sails on. Her
    passengers oblivious to the iceberg ahead.
    We are close, no doubt. Just look at China & Russian gold purchases and their swap agreements. Syria was a way out and Putin blocked that strategy. Obama is taking the credit for No War In Syria - A joke right? The Red / Blue paradigm rolls on out the saloon doors, making a lot of smoke and dust, obscuring public view over the debt ceiling.

    Will the dollar fail and Western banks collapse? Yep, just a matter of time, it is always about timing. Get ready to get Cyprused, it is all laid out in the Frank-Dodd bill of 2010. The question is WHEN will the dollar fail and US banks collapse? I posit it will take longer than we think.

  4. What idiots. Every pumper under the sun came out with moonshot crap again. What a bunch of twats. If the bulls cant even stay up there even with a twat like Bullard as you claim. All the Kingworld news people are the idiots. What dribble was written in this one day period. All a waste of time. Wake me up when all of you are actually on the correct track and even have the power to do something about it. You are eunachs.

  5. on the topic of a bunch of clueless useless ignoramuses all reaching the same WRONG conclusion on this Carry on QE'ing (or queueing), anyone else notice we have an extreme consensus now in force by another bunch of useless clueless know nothings, the so called newsletter writers?

    That consensus is that this economic down wave or whatever you call it won't bottom out till
    the 2020-2021 timeframe.

    Considering that the only thing they are proficient at is being uselessly wrong, how is that possible, & how can that possibly be correct?
    So, it has to be coming sooner than that.

  6. Senator Asks if FBI Can Get iPhone 5S Fingerprint Data via Patriot Act

    In a free market, a company should be able to make any kind of product they want, including one that has a fingerprint reader. That said, Senator Al Franken raises important questions in his letter to Apple CEO Tim Cook. Let us hope Cook answers the questions, not because Franken is a Senator, but because consumers want to know.
    September 19, 2013
    Mr. Tim Cook, CEO
    Apple, Inc.
    1 Infinite Loop
    Cupertino, CA

    Dear Mr. Cook:

    I am writing regarding Apple's recent inclusion of a fingerprint reader on the new iPhone 5S. Apple has long been a leading innovator of mobile technology; I myself own an iPhone. At the same time, while Apple's new fingerprint reader, Touch ID, may improve certain aspects of mobile security, it also raises substantial privacy questions for Apple and for anyone who may use your products. In writing you on this subject, I am seeking to establish a public record of how Apple has addressed these issues internally and in its rollout of this technology to millions of my constituents and other Americans.

    Too many people don't protect their smartphones with a password or PIN. I anticipate that Apple's fingerprint reader will in fact make iPhone 5S owners more likely to secure their smartphones. But there are reasons to think that an individual's fingerprint is not "one of the best passwords in the world," as an Apple promotional video suggests.

  7. Let's say they were going ahead and stop b.s.-ing to actually taper-- $10b is the equivalent of a needle on a haystack, or a pube on a gorilla's nut sack. It's completely laughable this whole charade.

  8. looks like the dead cat bounce in gold is over....

    1. Just my opinion, but I think 1300 will hold. I know what you're saying, but I disagree with this being a dead cat bounce.


    CENTRAL FALLS, R.I. — Paul St. George worked 19 years as a firefighter, sometimes running into burning buildings for rescues. Once, he was injured when a wall fell on him. For his service, he counted on a promised $36,000-a-year pension.

    But in August 2011, this small city — with an $80-million unfunded pension, and retiree health benefit liability five times annual revenues — filed for bankruptcy.

    St. George's pension was slashed to $24,000. Pensions for other retired city workers also were drastically cut, even after retired firefighters and police officers pleaded, saying they had risked their lives for the city. A 75-year-old retired police lieutenant pointed to his right hip where bullet fragments remain years after he was shot during a robbery attempt.

    "They sold us down the river," said St. George, 56. "We worked hard in this city over the years, but at least we had our pension to look forward to.... We deserve better." With his pension cut, health insurance costs up and city property taxes increased, St. George had to move out of his home of 25 years into an apartment and take a full-time job as a maintenance man.

    Just north of Providence, this one-square-mile former mill town of 19,000 would seem to have little in common with Detroit, the biggest U.S. city to ever declare bankruptcy. But Central Falls is widely held up as a national worse-case scenario when it comes to the drastic benefit cuts public employees could face because of unfunded pension liabilities.

    [What they don't tell you is that, after 5 years of paying 50% of your retirement, you can have taxpayers pay 100% into it until you retire. That's why more of this is going to happen as taxpayers won't be able to fund their retirements.]

    Detroit Emergency Manger Kevyn Orr, the unelected dictator overseeing Detroit’s finances, is seeking billions in dollars in cuts from the wages, health benefits and pensions of city workers and retirees in order to resolve the bankruptcy in the interests of the wealthy. According to reports, Orr is considering replacing health care coverage for retirees with a monthly stipend of just $125, not enough to buy even the cheapest health coverage. He is meanwhile offering just pennies on the dollar to city worker pension funds.

    In addition, Orr has threatened to sell off city assets including Belle Isle Park, the Detroit Zoo and masterpieces from the Detroit Institute of Arts, where Christie’s auction house is conducting an appraisal of the world famous museum’s artworks.

    [It's predicted that a lot more cities will go belly-up next year.]

  10. Didn't take long to find an epic quote that one-ups that story on Bloomberg quoting Jimmy Buffet, or was it Warren Buffoon, praising the Fed for running the world's biggest hedge fund!
    It could be a put-on, especially with that name and all LOL.

    Dave, you're gonna be busy updating your sidebar here with quotes for the ages from these plutocrat slime and their sycophants.
    I got a lot of letters from folks this week about an online column for Forbes written by a self-proclaimed Ayn Rand devotee named Harry Binswanger (if that's a nom de plume, it's not bad, although I might have gone for "Harry Kingbanger" or "Harry Wandwanker").

  11. Do precious metal prices even matter anymore? The price action over last 2 years has been a flat out joke. Every "expert" out there has called for, and continues to call for, higher prices based on the fundamentals but clearly fundamentals do not mean shit if it is completely manipulated. Stronger fundamentals = lower price in today's market.

    I wonder if price will EVER go higher, until absolute collapse, but then price really won't matter since more important things will be going on (i.e. protecting yourself from Obama zombies). So basically, why do I care? What a mess.

    1. Gold and silver will NEVER go up again. They will keep going down until they touch ZERO. And then they will break the zero boundary, go into the negative territory and stay there for ever.

    2. Federal Reserve Program Is Socialism For The Rich

      If you have followed any economic news at all you will have heard the term quantitative easing, or QE, which is technocratic shorthand for the Federal Reserve shoveling funds into Wall Street banks to produce a phenomenon known as the “wealth effect.” The wealth effect relies principally on trickery. The hope being that people will see higher asset prices, and in a self-fulfilling prophecy, invest and produce more thinking the economy is better – which will make the economy better. So endeth the theory.

      The reality is the Federal Reserve’s QE program has made the rich a lot richer and done little to nothing for the poor and middle class – besides screwing people living on fixed incomes. In fact, it has now devolved into a redistribution scheme to take money from poor and middle class workers and give it to the rich – or so says billionaire investor Stanley Druckenmiller.

      In an interview with CNBC related to Fed Chairman Bernanke’s massive cave to Wall Street earlier this week where he refused to stop QE, Druckenmiller revealed what every financially literate American knows – that QE is socialism for the rich.

      QE is socialism for the rich and even the 1% are admitting it. Game. Set. Match.

      By the way, this also helps explain the historic inequality that corporate economists seem/pretend to be so mystified by. Why is there such a gap between the haves and the have-nots? Probably because the Federal Reserve is pumping up assets for the haves to the tune of $85 billion, a month.

      So surprise surprise the stock market, income inequality, and poverty are at historic highs at the same time. Actually don’t be surprised, it is a direct and completely predictable result of the Federal Reserve’s policy of socialism for the rich, capitalism for the poor.

  12. Speaking of useless and clueless, did anyone read John McLame's reply to Vladimir Putin's op ed article?
    It should have beeen retitled "pot calling the kettle black"

    Some key Quotes-

    "I believe you (Russians) deserve the opportunity to improve your lives in an economy that is built to last and benefits the many, not just the powerful few."
    Russia shouldn't be concerned with just its mega banks, its mega corporations and its mega rich, it should be concerned for all its people, Just Like The US (SARC OFF)

    "Capital is fleeing Russia, which-lacking rule of law and a broad based economy- is considered too risky for investment and entrepreneurism." Rule of law, just like the US (SARC OFF)

    America's a nation of laws
    That is clear for sure
    One set of laws for the rich
    And one set of laws for the poor.

    "They punish dissent and imprison opponents...They control your media" unlike the US (SARC OFF)

    "To perpetuate their power they foster rampant corruption in your courts and your economy and terrorize ane even assasinate journalists who try yo expose their corruption."
    Meanwhile Julian Assagne is stuck in the Euador Embassy because if he should leave he will face arrest instantly.

    Lastly, McCain posted his op ed on the online version of Pravda, which is a shadow of the original Pravda with a fraction of its readership of a few decades ago.

    If McCain is typical of the leadership (or lack therof) in DC then the crash can't be too far off.

    1. I really wish Mc Cain would just go take a long walk in the desert on a really hot day.

    2. No, your gold and silver will be revalued into Chinese Yuan Renminbi. It might also be a good idea to purchase a Rostta Stone course in Manderine Chinese. It will help in being able communicate in the transaction process.

  13. All of you trolls might be bitchslapped into reality by taking a look at the monthly charts of both the indu 30 and the xau going back twenty years or so. Seems to me that without divine intervention, 16k will mark a major (as in major dislocation) top in the dow. Likewise, the miners are being given away right about now.

    So you can huff, and puff, and blow out your taper, but without sub $50 a barrel oil the US economy is going over horseshoe falls pronto. Ask your feeble Bank of America brains just which side of the coming catastrophe gold bugs will be on.

  14. Robert Prasch: The “Lessons” that Wall Street, Treasury, and the White House Need You to Believe About the Lehman Collapse

    By Robert E. Prasch, Department of Economics, Middlebury College. Cross posted from New Economic Perspectives

    Five long years have passed since the demise of the once venerable firm of Lehman Brothers. To mark the occasion, Wall Street, the United States Treasury Department, the White House, and their several political proxies and spokespersons have taken to the mass media to instruct the public in the “lessons” to be drawn from the financial crisis of 2007-09. Regrettably, we are witnessing the propagation of several self-serving falsehoods in the hope that the public can be induced to embrace them now that the immediacy of the events in question is in the past. Some of the lessons are so flagrantly false that they demand immediate correction.

    No One Saw It Coming

    Of all the falsehoods being circulated, this one is in many ways the most egregious and damaging. It systemically denies the attribution of credit and thereby voice (and political power) to those who in fact did see “it” coming even as it provides blanket exoneration to those whose ignorance–or more likely–cowardice combined with self-interest prevented them from perceiving what was happening in the financial sector. Those making this latter claim can, more correctly, observe that, “no one in our close-knit circle of elites saw it coming.” Stated in this form, the statement is suggestive. Why, we might ask, was their circle exclusively made up of individuals who did not, would not, or could not, see the crisis coming? Why is it, in a nation with the diversity and talent of the United States, that all of the senior managers of our largest financial firms, and those charged with regulating them, were exclusively made up of individuals sharing the same perspective – a perspective that, I might add, was and remains so singularly and disastrously dysfunctional for the economy upon which the rest of us depend?
    These are compelling questions because, as a matter of fact, many highly-informed people “did see it coming.”

  15. Ye of little faith. Physical gold and silver will be useless some day !!???
    Are you kidding ??!!

    Silver will be what helps pull civilization back to any sort of realized prosperity if there ever was something to be able to do so. Just ask the company heads and inventors who realize that physical silver is so very much needed as a main ingredient.

    No , physical gold and silver will never lose their true identity. However the schmucks who think that they can rule the world with their massive $$$$$$ manipulations will get crushed. Just wait until their derivative scheme blows's coming , that's something that you CAN rely on ! HAHAHAHAHAHAHAHA!!!!!!!!!!!!!!!!

  16. Beef Prices Set New Record Highs

  17. Obama’s “I Am Not a Crook” Moment
    Posted on September 21, 2013 by WashingtonsBlog
    Obama Says America Is Not a Banana Republic and We Have to Pay Our Bills … What Do Experts Say?

    America’s top liberal communications expert is George Lakoff. Professor Lakoff (who we’ve previously interviewed) points out that when a politician says “Not X”, people usually think of X:

    I wrote a book called, Don’t Think of an Elephant! The title made a basic point: Negating a frame activates that frame. If you activate the other side’s frame, you just help the other side, as Nixon found out when he said, “I am not a crook,” which made people think of him as a crook.

    President Obama just said:

    This is the United States of America — we’re not some banana republic, this is not a deadbeat nation, we don’t run out on our tab.

    What Lakoff and other political psychologists explain is that what most Americans – and people all over the world – will hear is:

    America is a banana republic, a deadbeat nation, which can’t pay its bills.

    Of course, there is some basis for accusing the U.S. of becoming a banana republic … a deadbeat which can’t pay its bills.

    But the focus of this post is on Obama’s Nixon moment … invoking the exact image which he is trying to avoid.

    Obama has failed to learn the most basic concept from the psychology of politics.

  18. Ask the Expert – Ted Butler (September 2013)

    SMN: So, Ted, we’ve got a few questions in from our listeners. And there’s a lot of talk lately about JP Morgan. And I know you’ve wrote about this recently as well. JP Morgan has been a prime manipulator in the precious metals market. Until recently, this manipulation has always been to the downside. It now appears that they have cornered the market to the upside. What do you believe JP Morgan’s incentive is for doing this?

    Ted: Well, first of all, they have cornered the Comex gold futures market to the upside, to the long side. They still have a corner on the short side of the Comex silver market. But as far as their incentive for doing this, this is a for-profit organization. Their main motive in any line of their business is to make money. The problem is that they basically created a monopoly or a corner on the Comex gold and silver market, and they’re making those profits on what I consider an illegal basis. You’re not allowed to dominate and control markets, even if your incentive is to make money. You have to do it within the body of commodity law, and they’re clearly not doing that.

    SMN: No, that’s right. Ted, do you believe they will stay there, or do you believe the pressure will be placed on them from Western central banks to move back to a short position on their gold position?

    Ted: Well, I don’t know the connection with Western central banks. That’s a little bit above my pay grade. I can go as far as looking at the public published data from the US government, the Commodity Futures Trading Commission, and figure out who’s holding what by broad categories. It’s kind of easy in the case of JP Morgan, to single them out. But the data stops there. It’s like, why JP Morgan, if they’re operating under somebody else’s orders . . . as I said, that’s above my pay grade. I can’t know that.

    They won’t stay here, though. I mean, the profit to JP Morgan, or any commodity trader, comes from movement. Comes from positioning and changing those positions. And just to give you a recount from the beginning of this year, they started out the year massively short in both gold and silver. Gold, to the point of maybe 75,000 net contract and in silver, they were short upwards of 35,000 contracted, 175 million ounces.

    Well, the whole reason we had a decline in the first half of the year was basically JP Morgan rigging and manipulating prices through their monopoly control of the Comex, to the point where the prices came down and they were able to buy back many of their short positions in silver. All of their short positions in gold, and then some. And they made about $3 billion on the Comex alone, closing out the short positions. And they rigged the price so low that they were able to actually get long and keep buying gold. To the tune of the beginning of August, they were, like, 85,000 contracts, 8 1/2 million ounces long in the gold market. And recently, they started selling that off, on the $200, $250 rally we’ve had from the bottom, and they’ve made another $300, $350 million on the 30,000 contracts of gold that they did sell out.

  19. Shale: High depletion rates in Bakken

    Sooner or later, you'd realize that Shale is an industry of diminishing returns. In plain terms, a temporary bubble waiting to burst thanks to depletion.

    Egypt, as you may have heard, is the second largest natural gas producer and the largest non-OPEC oil producer from Africa. According to EIA, Egypt's total oil production averaged around 710,000 bbl/d in 2011. However, the imports in the energy sector have been increasing due to falling domestic production as well as slowdown in exploration because of the unrest in the country. The weak Egyptian pound has compounded the woes making imports too expensive, even as the country seeks loan from the International Monetary fund. Of course, some of the recent discoveries in Natural Gas could help the fragile energy sector. Yet, the underlying fact remains: Egypt isn't a major oil producer.

    Then why are the investors worried?

    The answer to the question lies with Suez Canal and the Sumed (Suez-Mediterranean) pipelines- strategic routes for oil shipment of about 3.8 million barrels a day of crude and products from Persian Gulf to Europe.

    Egypt is the second largest recipient of US military aid (after Israel) with a massive 1.3 billion dollar annually, a whole quarter of Egypt's military budget. As it turned out, raising tariffs by a record 5% on Suez canal fees was one of several career-limiting moves for president Mohammed Morsi who was promptly deposed by the US-funded Egyptian military. Since then the Egyptian military has been in control and ensuring both Suez and Sumed are operational. Mere days following Morsi's demise, Washington promised the delivery of two F-16 jets to the Egyptian military. So in the end, despite the street-level unrest related by the media, oil routes are in reality under friendly military control, a plus for oil price stability. You get the picture.

  20. Industrial Revolution in the 1800's

    "Conflicts among the workers and factory owners were common during industrialization. Workers were treated poorly and had no rights. They were forced to work long hours at low pay in order to maximize production and profit for the factory owners. A small number of industrialists became very rich and powerful, while the large number of workers who actually produced the wealth were poor and miserable."

    History repeating itself.....

  21. i enjoy reading your blog! could you please specify a little bit more what do you mean with "soon". concerning the "'s going to start getting very "bumpy" soon....". 2013, the first half of 2014 or 2015. any idea or gut feeling or signs that tell us when it will start to become bumby. tnx. gerhard

  22. Thought I'd throw in something here on a basic Fibo pattern noted by many, probably the only half-useful pattern they've collectively discovered.

    It's so evident they couldn't miss it, but they've all that I've read left out the little known 'flaw' in Fibo math that leaves it a little ambiguous, a guess as it were.

    Note the really big crashes and/or depressions of the past near-century:
    This is a clear Fibo pattern targeting 2021 in a Fibo spiral of 89 years from 1932.

    decreasing fibo number of years between calamities, right, clearly showing how quicker events are coming, and note how each succeeding crash is worse than the previous!
    89 is 55+34, or 1932-1987-2021, right?

    55+13+8+5+3+2+1+1...= 88 only?
    that's because the math formula even states that for the nth term of a fibo sequence, the Sum of the preceding (n-1) terms will fall 1 short.

    Try it: does 144= 1+1+2+3+5+8+13+21+34+55?
    NO, it adds to 143!

    What does this mean in the real world?
    Well, the next crash will be worse than 2008, & it's still due EITHER this year 2013, which is 2008 +fibo 5, or NEXT year 2014 due to the sequence having to "add in" that extra 1 year somewhere in a 2-step shuffle so that we get 89 from 1932 to 2021.

    No clock has timed out here anywhere saying 'no more crashes'!

    Now, all we have to do is get those clueless dumbass newsletter writers to collectively flip a coin & tell us which year it'll be.

  23. SEC Omitted Dimon Misinformed Investors on April 13, 2012 Earnings Call

    The SEC filed a cease-and-desist order on September 19, 2013 in the matter of JPMorgan Chase & Co.’s “London Whale” credit derivatives trading incident and misstatement of earnings. JPMorgan admitted it violated securities laws and agreed to pay a $920 million settlement.

    The release mentioned that JPMorgan filed inaccurate reports with the SEC: Form 8-K filed April 13, 2012 and Form 10-Q filed May 10, 2012. The SEC also listed several failures by senior management defined as the JPMorgan Chief Executive Officer, the JPMorgan Chief financial Officer, the JPMorgan Chief Risk Officer, the JPMorgan controller, and the JPMorgan General Auditor. But the report doesn’t mention them by name, and in particular, it doesn’t mention Jamie Dimon by name, even though he is both the Chief Executive Officer and the Chairman of the Board.

    Dimon’s widely reported earnings call on April 13, 2013 not only misinformed the public, Dimon was dismissive of credible news reports about huge credit derivatives positions and mounting losses in JPMorgan Chase’s Chief Investment Office unit that reported to Dimon. Not only did he dismiss the reports, he didn’t disclose the size of the losses he already knew about, and the numbers were whopping. Reported losses eventually mounted to $6.2 billion.

    Senate Investigation Showed JPMorgan Executives Misinformed the Public


    I thought the housing market was imploding or on the verge of imploding?

    It looks like easy monopoloy money from the Fed is going to push things a lot further than we all thought.

  25. MUST READ: Chaos Computer Club Cracks Apple TouchID
    CONCLUSION: Forget about fingerprint identification as a secure password.

    The Chaos Computer Club reports:
    The biometrics hacking team of the Chaos Computer Club (CCC) has successfully bypassed the biometric security of Apple's TouchID using easy everyday means. A fingerprint of the phone user, photographed from a glass surface, was enough to create a fake finger that could unlock an iPhone 5s secured with TouchID. This demonstrates – again – that fingerprint biometrics is unsuitable as access control method and should be avoided.

  26. RLPC: U.S. covenant-lite loans soar amid investor demand

    (Reuters) - Huge demand for leveraged loans from billions of dollars flowing into U.S. loan funds pushed covenant-lite loan volume to a record $188.7 billion, far surpassing the record of 2007, and still going strong.

    Unrelenting investor demand for higher-yielding assets and floating-rate exposure has enabled issuers to sell these loan products that allow for future acquisitions or aggressive credit policies, but offer less protection for investors.

    Investors have poured money into floating-rate loans, fearing a rise in interest rates, and private equity firms have taken advantage of the demand to get looser debt structures.

    Covenant-lite issuance so far this year is 74 percent higher than all of 2007 before the collapse of Lehman Brothers, and more than five times the $35 billion issued in the first nine months of 2012.

    Multibillion dollar loans for computer maker Dell and hotels operator Hilton were launched this month as covenant-lite deals.

  27. Was This Whistle-Blower Muzzled?

    THE fifth anniversary of Lehman Brothers’ bankruptcy has occasioned one legacy-spinning defense after another. We’ve heard from Ben S. Bernanke, chairman of the Federal Reserve; Henry M. Paulson Jr., the Treasury secretary at the time; and Timothy F. Geithner, then the New York Fed president and later Mr. Paulson’s successor at Treasury, about their historic decisions to use trillions of dollars of taxpayers’ money to bail out the banking system.

    But will we ever know what really happened behind all those closed doors? The seemingly appalling treatment afforded Richard M. Bowen III, a former Citigroup executive who blew the whistle on years of malfeasance there, shows that we may not. Thanks to political pressure and the revolving door between Washington and Wall Street, the events leading up to the financial crisis remain obscured and may never be fully revealed.

    At wits’ end, on Nov. 3, 2007, Mr. Bowen sent an e-mail to a small group of Citigroup executives, including Robert E. Rubin, a former Goldman Sachs executive and former Treasury secretary who was then chairman of the bank’s executive committee (and who received $126 million during his decade at Citigroup). “The reason for this urgent e-mail concerns breakdowns of internal controls and resulting significant but possibly unrecognized financial losses existing within our organization,” Mr. Bowen wrote.

    Mr. Bowen told me that the following Tuesday, a Citigroup lawyer told him of his e-mail: We’re taking it seriously. Don’t call us. We’ll call you. He sent more e-mails to the lawyer, but heard nothing. “I mean, silence,” he said. (Months later, the two men did talk about Mr. Bowen’s e-mail to Mr. Rubin.)
    Mr. Bowen, who is now 66 and teaches accounting at the University of Texas, Dallas, was fired in January 2009.
    In 2008, after his note to Mr. Rubin and after his responsibilities were vastly reduced at Citigroup, but before he was fired, Mr. Bowen decided to become a whistle-blower. That April, he filed a complaint, under the Sarbanes-Oxley Act of 2002, with the Occupational Safety and Health Administration claiming he had been retaliated against after writing his e-mail to Mr. Rubin. (The complaint was settled as part of his separation agreement with Citigroup.) Then, in July, Mr. Bowen went to the Securities and Exchange Commission. “I testified before the S.E.C.,” he told an audience in Texas earlier this year. “I told them what had happened.” He gave the S.E.C. more than 1,000 pages of documents. “Mr. Bowen, we are going to pursue this,” the agency told him. He never heard back. “Not only did they bury my testimony, they locked it up,” he said in his speech. (The S.E.C. has denied my numerous requests under the Freedom of Information Act for access to Mr. Bowen’s file, even though he has given his permission, claiming that the material was “confidential” and included Citigroup “trade secrets.” On Sept. 11, the S.E.C. denied my administrative appeal of its decision.)

  28. The Fed goes too far
    Commentary and weekly watch by Doug Noland

    With this New Age (experimental) marketable credit infrastructure crumbling, the Bernanke Fed resorted to a massive inflation of the Fed's balance sheet - an unprecedented monetization of government debt and mortgage-backed securities. What unfolded was a historic reflation of global securities prices, along with further massive issuance of marketable debt securities.

    In spite of all the "deleveraging" talk, the growth of outstanding global debt securities went parabolic. Central bank holdings of these securities grew exponentially. Instrumental to the credit boom, Fed policy spurred trillions to leave the safety of "money" for long-term US fixed income, international securities and the emerging markets (EM).

    It is unknown how many trillions of leveraged speculative positions were incentivized by global central bankers. The combination of an unprecedented policy-induced inflation of prices across securities markets and a low tolerance for investor/speculator losses creates a very serious and ongoing dilemma for the Fed and its global central bank cohorts.

    Over the years, I've chronicled monetary management descending down the proverbial slippery slope. Actually, monetary history is rather clear on the matter: loose money and monetary inflations just don't bring out the best in people, policymakers or markets. I definitely don't believe a massive bubble in marketable debt and equity securities is conducive to policymaker veracity. I don't believe a multi-trillion dollar pool of leveraged speculative finance - that can position bullishly leveraged long or abruptly sell and go short - promotes policy candor. Actually, let me suggest that a global credit and speculative Bubble naturally promotes obfuscation and malfeasance. Invariably, it regresses into a grand confidence game with all the inherent compromises such an endeavor implies.

  29. michael schumacherMonday, 23 September, 2013

    The Fed doing reverse repo today. Another clue or tell they are planning for something.

    The same thing thing was done in Sept. 2008 although the main difference between today and then is the actual mechanics of the so called "operation". 2008 was an outright cash grab back by the FED in Sept. '08 via reverse repo process at the worst (depending on one's perspective) possible time.

    This assisted (or caused IMO) the cascade of asset driven selling that started the slide.

    Today was not really a reverse-repo as classified by the Feds own terminology, its' just called that. The reverse-repo's of the past have been miniscule compared to this so it's no wonder that the treasury decided to play along today with collateral "help".

    Tick, tock, tick, tock......

    1. michael schumacherTuesday, 24 September, 2013

      There is the bell....well the end of the day. You have the sign it's now over.
      How much paper are they pushing out the door this week? I smell something burning

      Twitter S1 is the biggest comedy read Ive ever seen.....
      I thought the worst one Ive seen ever (not an S1 but roadshow filings) was for OOMA
      They even said in the filing what OOMA stood for.,,,Out Of My Ass., or who could forget GazProm and Nigeria doing a deal and naming it 'NigGaz'

      IF you have access to the twitter filing it is pure comedy gold......

  30. A very good read on the debase of Rome's coins and how it lead to its downfall.

    History is repeating history.....

  31. If you listen to TV commentators, you’ve been told the worst is behind us. Growth is picking up, and Europe is coming out of its slumber. No one seems to be concerned that this tepid below-2-percent growth is being entirely fed by the central bank’s massive money printing. It’s a “growth at any price” policy. How quickly we forget.

    Back in the boom days, anyone who questioned double-digit growth in housing prices was viewed as an unenlightened Cassandra, lacking knowledge on how the new economy had fundamentally changed the law of scarcity. Austrian economists consistently warned that a boom built on foundation of easy money could only lead to a disaster. Today, most of the growth is coming from the interest rate-sensitive sectors of the economy, such as cars and housing. This should be ringing warning bells everywhere.

    The conventional wisdom is that the Fed will begin to taper when growth picks up. This is a complete misreading of what is actually happening. The Fed made a monumental mistake, and does not really know how to get out of the trap it had set upon itself.

    The Fed embarked on a “we know best” policy of QE3 in the fall, and induced a market bubble in the spring. The S&P 500 gained 12 percent from January to June 2013 while growth remained subdued. The Fed realized its mistake, and now wants to get out. The problem is that in economics, as with most things in life, it’s much easier to get into trouble than out of it. The FED wants to take away the punch bowl, but knows that interest rates will rise, the stock market will crash, and the economy will tank. The longer it waits, the greater will be the inevitable adjustment.

    If we do not learn from history we are bound to repeat it. We have been here before. The depression of 1920 and Roosevelt recession of 1937 show us what happens when excessive monetary printing is followed by tepid tapering.

    The 1937 Recession is a perfect example of Austrian business cycle theory. It was severe but short. Output fell by 11 percent and industrial production by 32 percent. Unemployment surged back up from 14 percent to 19 percent.

    1. What you can't independently audit, you can get away with? ....

      Empty cells like in spreadsheet....what a game.

      Why You Should Not Trust the Financials of Private Equity Owned Companies

      Today, we are going to examine iLevel in greater detail. We will see that this company is built from the ground up as vehicle to convince PE investors and the SEC that Blackstone and other PE firms have implemented robust financial controls over the companies they own. The reality, however, is the opposite: by design, iLevel gives PE firms unprecedented ability to cook the books of their portfolio companies while maintaining a facade of compliance.

      This may all seem like a very arcane discussion of reporting workflow, but it is important to understand that the PE firms want your eyes to glaze over. The key issue is that PE firms want their investors and the SEC to believe that their iLevel database has been constructed in a tamper-resistant fashion, which is always a central design goal of accounting software systems. If an accounting system allows people to change entries after the fact, that system is absolutely, utterly worthless. But that’s what iLevel explicitly allows to occur because, rather than extracting the data directly, it requires portfolio company employees to re-enter information into iLevel from their general ledger accounting system. Moreover, iLevel presents as one of its advantages that “key stakeholders” can “verify and approve the data”. That’s code for “tamper with”.

      Why do LPs and the SEC care about the data that goes into iLevel? In a version of its website that was labeled “test” and never posted live, but which was nevertheless crawled by Google, iLevel lays out its value proposition to PE firms in dealing with the SEC and LP investors:

      The SEC has begun its initial ‘interviewing’ of Private Equity firms and their practice of valuing their investment holdings. The questions provided to several PE firms requests information such as supporting evidence for the valuations of all fund assets and any document establishing an assigned value for any assets owned by the fund.

      The real purpose for a PE firm using iLevel is to trick the SEC and LP investors into believing that there is a reliable basis for the data underlying a PE firm’s portfolio company valuations, which in turn affects what the PE firm gets paid. As iLevel points out in the quote above, the SEC is asking for documentation to support valuations. With iLevel, the PE firms can say to the SEC and LPs, “The data was provided directly to the iLevel database by the portfolio company, via an automated process.” The SEC and LP investors are likely to hear this statement as, “The data was extracted from the portfolio company general ledger via an automated (and inherently tamper-resistant) process, in which we – the PE firm – had no role.” What the SEC and LPs should interpret this statement to mean is, “The data was manually input by a portfolio company employee whom we – the PE firm – have hiring and firing authority over. There is no process to reconcile or audit the data input to iLevel with a portfolio company general ledger.”

      This scheme is actually quite ingenious. Whereas the SEC and PE fund limited partners have various degrees of audit authority over the PE firms themselves, that authority does not extend to the portfolio companies. If the data input into iLevel is inflated at a PE firm’s behest, neither the SEC nor the limited partners have any ready mechanism to compare the iLevel data with the portfolio company general ledger, so the fraud is overwhelmingly likely to go undetected.

  32. President Obama Asks Congress To Give Up Its Oversight On Secret TPP Agreement
    from the that's-not-a-good-thing dept

    We've talked a few times about how the USTR and the administration are asking Congress for "trade promotion authority," which would effectively let it bypass Congressional oversight of the Trans Pacific Partnership (TPP) agreement. In fact, in many ways the USTR has been acting as if it already has this. The specifics of "trade promotion authority" or "fast track authority" are a bit down in the weeds, but the short version is that it's the administration asking Congress to completely abdicate its authority and mandate in overseeing international trade agreements. Basically, it removes the ability of Congress to seek any fixes or amendments to a trade agreement -- only allowing them to give a yes or no vote.

    This might not be such a big deal if the TPP wasn't negotiated in near total secrecy. We've been told that a final agreement is getting close, but no official text has been released at all. What we know of the IP section is one draft that leaked out from well over a year ago. And, now, we're going to get a product that will be released to the public with little time for debate and no way to make changes should the public point out how ridiculous and dangerous it is.

    And, of course, President Obama is insisting it's necessary to undermine the authority of Congress with a secret agreement that will have tremendous impact on Americans... just because he wants it. He announced to "the President’s Export Council" that "We're going to need Trade Promotion Authority." Let's be clear: the only reason the administration "needs" TPA is so that it can ram through the agreement without letting Congress do its oversight job. Trade Promotion Authority offers no benefit to the public at all. All it does is make sure that the USTR has less oversight and fewer limitations on selling out the public for a few big special interests.

  33. Building a strong economic and financial security barrier for China
    Presenting another translation of an article from one of the leaders in the Chinese gold industry. The original version appeared on 1 August 2012 in Qiushi magazine, the main academic journal of the Chinese Communist Party’s Central Committee. Sun Zhaoxue is the president of China National Gold Corporation, China's biggest mining company that produced 160 tons of gold in 2010 and will produce 260 tons in 2015. He is also president of the China Gold Association, that acts as a bridge between the Chinese government and gold producers in protecting business interests and providing information, consultancy, co-ordination and intermediary services for them. In the article he explains that China needs to hoard gold in order to safeguard the country’s economic stability and to strengthen its defense against external risks.

    Watch how the show, broadcasted on prime time with orchestral music, moving camera's and women in cocktail dresses, emphasizes the importance gold and glorifies the guy digging it out of the ground. In his acceptance speech Sun said the price of gold will rise and China should seize the opportunity to act accordingly.
    On the Lujiazui financial reform and opening up Forum in 2009 he said China should not only boost it's official reserves, civil hoarding is just as important for economic stablilty, he recommends to invest 20 % of savings in gold.

    Although other sites (ie the Financial Times) have quoted from Sun's oncoming article, none of them published the whole thing. This MUST READ is translated for us by Soh Tiong Hum (click for his very interesting +Google page).
    the state will need to elevate gold to an equal strategic resource as oil
    Building a strong economic and financial security barrier for China
    - Actively build and implement national gold strategies

  34. We're no different than some 3rd world country............

    Chelsea Clinton's Secret Holding Company

    Many high net worth individuals put their assets, especially their residences, in holding companies to shelter them against personal liabilities that may arise and also to protect their privacy.

    Whoops, the privacy thing isn't going so well for Chelsea and her husband.

    As I have preciously reported, Chelsea and her husband Marc Mezvinksy paid $9,250,000 for a four-bedroom apartment in the Whitman condominium building on Madison Square Park.

    But now we know, thanks to NyPo digging, the secret holding company used by Chelsea and Marc to purchase their apartment. NyPo reports:

    Clinton and Mezvinsky purchased the property using a company called Cafema LLC. They took out a $5 million mortgage in addition to a $500,000 line of credit, records show.

    Here is the public filing of Cafema LLC:

    Articles of Organization filed with the Secretary of State of NY (SSNY) on 12/18/2012. Office location: New York County. SSNY has been designated as agent upon whom process against it may be served. The Post Office address to which the SSNY shall mail a copy of any process against the LLC served upon him is Cafema, LLC C/O Ellyn Roth Mittman, Esq., 110 East 59th Street, 23rd Fl, New York, NY 10022. Purpose of LLC: To engage in any lawful act or activity.

    Avenue Magazine lists Mittman as an elite top NYC woman attorney specializing in real estate.

    Chelsea Clinton Buying $10 Million NYC Apartment
    File under: It's a wonderful world for children of elitists and crooked politicians,

    Chelsea Clinton is buying a $10.5 million spread right across the street from Madison Square Park, reports NyPo. The apartment is 5,000 square feet and is located in the Whitman.

    1. and she plans to be a politican/president in the future. Yeah, we're screwed. The senior citizens I know right now are spending their money like crazy as they see the cliff ahead. Unfortuately, they are spending it on the wrong stuff but on stupid stuff.

  35. Two thoughts/theories about gold:

    1. Gold will be the vehicle to restore the balance sheets of banks and other financial institutions. Buy now and these levels and hold.

    2. The SDR review is 2015 and some believe gold will be added to the SDR basket and possibly the SDR will bailout countries in the same manner the US bailed out banks and other financial institutions... "October 2011, IMF discussed possible reform options of the existing criteria for broadening the SDR currency basket." IMF website

    Please ignore if already discussed or posted.

  36. WSJ buries the lead deep on AIG’s CEO:
    Benmosche says outrage at AIG bonuses was “just as wrong” as lynchings of blacks (Columbia Journalism Review)

    At AIG, Benmosche Steers a Steady Course

    CEO Stabilizes Insurer, Focuses on Core Mission

    Up high in the story: Benmosche’s assurance that “‘too big to fail’ has been solved”

    Left on the cutting-room floor: Benmosche’s comments saying the national outrage about AIG’s bonuses was comparable to the lynching of blacks in the South.

    The uproar over bonuses “was intended to stir public anger, to get everybody out there with their pitch forks and their hangman nooses, and all that-sort of like what we did in the Deep South [decades ago]. And I think it was just as bad and just as wrong.

    So nutty AIG paranoia about the potential of hayseeds with pitchforks stringin’ ‘em up is “just as bad and just as wrong” as the actual murder of thousands of black people by hayseeds with pitchforks.
    Matt Taibbi says on Twitter, “Just when you thought nothing could ever be dumber than Charlie Munger’s “Suck it In and Cope” line…”, referring to Warren Buffett’s billionaire sidekick’s comment that Wall Street bailouts were justified, but regular folks slammed by the fallout of Wall Street’s actions should “Suck it in and cope, buddy. Suck it in and cope.” Taibbi’s right: Benmosche’s comment enters the Stupidest Quotes of the Crisis charts at No. 1 (Somewhere in the Top Twenty, Benmosche’s comment to Bloomberg in an interview at his seaside villa in Dubrovnik that “Retirement ages will have to move to 70, 80 years old.”)

    Where Bloomberg led its 2010 scoop on the Munger comments with that quote, the Benmosche newsmaker—amazingly—doesn’t even make the Journal’s story, which only says he “solidified his reputation as one of the most outspoken executives on Wall Street.”

  37. A Risk Manager’s Impossibility?

    A reconsideration of the London Whale, JPMorgan’s risk management, Jamie Dimon’s oversight – and their implications for other financial institutions

    If you are a risk manager at a U.S. bank, you will be faced with difficult decisions. You’ve probably already run into one or more of what I think of as the three major problems for risk managers. The first is the lip service paid to risk management by people in leadership positions who are unfit to lead; the second is ignoring or covering up oversized risky positions; and the third is not effectively managing short positions.

    Lip Service

    Jamie Dimon, Chairman and CEO of JPMorgan Chase, is still lauded as the best bank manager in America. That’s a leading indicator of how difficult your job will be if you actually try to perform your role in the way it should be done. Yet, if you go-along-to-get-along, you will probably be safe only temporarily.

  38. We've come a long way baby.....the plutocrats are thanking BB in public now. For the rest of us...---- on a shingle.
    Carl iCahn Is Long Ben Bernanke

    Carl Icahn ✔ @Carl_C_Icahn

    Our country owes Bernanke a great deal for pulling us out of the mess several of the largest investment banks go us into in ‘08.
    12:20 PM - 24 Sep 2013

  39. Tom Fischer: Why gold's contango suggests central bank interference

    Monday, September 23, 2013

    Dear Friend of GATA and Gold:

    Another academic study touching on gold market manipulation has been published this month, this one by Tom Fischer, professor of financial mathematics at the University of Wuerzburg in Germany. Fischer argues that gold's scarcity makes it such a superior currency that backwardation in its market -- when the spot price is higher than the price for future delivery -- should be normal and that contango, when the futures price is higher than the spot price -- should be rare.

    Fischer argues that the long period of contango preceeding the current turbulence in the gold market is evidence of interference in the market by central banks through their leasing of gold.
    As much as our camp appreciates acknowledgment of central bank interference in the gold market, your secretary/treasurer often disputes the common contention repeated by Fischer -- the contention that "you can't print gold," or, as Fischer puts it, "A central bank cannot necessarily cough up just any needed amount of gold as it cannot simply print it up when required."

    To the contrary, insofar as central banks may lease virtually infinite amounts of gold as mere claims to metal that doesn't necessarily exist, and insofar as bullion banks may create similarly unbacked claims to gold through their own fractional-reserve gold banking system, claims that are seldom exercised so as to cause metal to leave any central bank or bullion bank vault, then imaginary "paper gold" in fact may be almost as easily created as ordinary fiat currency.

    Of course this assumes that no free-market organization exposes the scam so well that gold investors are induced to redeem so much "paper gold" for real metal and remove so much from the banking system that the "paper gold" system defaults. (GATA is working on that part.)

    In any case, quoting former Federal Reserve Chairman Alan Greenspan's famous admission to Congress that the purpose of central bank leasing of gold is to suppress its price, Fischer is certainly correct to identify such leasing as the mechanism by which gold has been devalued to camouflage the devaluation of fiat currency, and his study substantially increases the legitimacy of the issue.

    Fischer's study is headlined "Why Gold's Contango Suggests Central Bank Interference" and it's posted in PDF format at GATA's Internet site here:

  40. “The West Will Regret All Its Financial Policies Someday Soon”

    For the September 2013 Matterhorn Interview Lars Schall interviews Eric Sprott.

    We are obviously extremely pleased to feature Eric Sprott this month. He needs no introduction and is a Grandee in the precious metals markets. There are very few people who understand this market better than Eric.

    In this interview Eric Sprott covers several hot topics such as the obvious manipulation of gold and the fact that Central Banks will eventually lose the battle. He also says that the West will regret all their policies and that these policies will lead to defaults and non-payment of commitments. Eric is very clear that there will never be an audit of the US gold and that most of it is probably not there. Silver is Eric’s favourite investment and he explains why it will outperform gold. He also gives a forecast for gold and silver in the next 12 months.

  41. Thai Gold Buyer Doubles Imports After Bear Slump: Southeast Asia

    YLG Bullion International Co., Thailand’s biggest domestic gold importer, expects to more than double purchases this year after the bear market in prices spurred a surge in demand for physical metal.

    The company may import as much as 200 metric tons in 2013, from 92 tons last year, Chief Executive Officer Pawan Nawawattanasub said in an interview yesterday. First-half shipments advanced to 112 tons, accounting for 60 percent of the country’s total, she said. A ton is valued at $42.6 million.

    “Cheaper prices are attracting customers to buy bullion bars as they see it as money better spent than on something like a Hermes bag,” said Pawan, whose Bangkok-based company supplies retailers and investors in Southeast Asia’s second-biggest economy. “Demand in Thailand can continue to grow, partly because collecting gold is in our culture.”
    Asian Consumer

    Demand in Thailand rose 58 percent to 26.6 tons in the second quarter from a year earlier, World Gold Council data show. The nation was the third-largest Asian user after India and China in 2012 and ranked seventh globally. Individual investors account for about half of gold purchases, said Pawan, who has worked in the gold and jewelry business for two decades.

    “There has been a complete change of customer profile,” said the 54-year-old mother of two, speaking in Thai from her office in Bangkok’s Sathorn business district, which she shares with her husband, daughter and son. “Huge volumes from retail investors are helping to offset a retreat from big investors.”
    Gold exchange mulled Dealers: Move would enhance transparency

    Seven local gold futures dealers have proposed the central bank and capital market regulators set up a spot gold exchange to enhance Thailand as a regional gold trading hub. But Kritcharat Hirunyasiri,...

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