G-7 To Release a Statement on Exchange Rates to Calm Worries of Currency Wars

“The Group of Seven nations are considering releasing a statement on exchange rates this week to calm concern the world is on the brink of a currency war, three officials from G-7 countries said.

Finance officials from the world’s major industrial economies have drafted a text now being reviewed by senior policy makers, one official said on condition of anonymity. The current wording, which still may be changed, contains a commitment to market-set exchange rates and an agreement that governments don’t use fiscal or monetary policy to drive currencies, the official said.

Japanese Prime Minister Shinzo Abe’s push for more aggressive monetary policy has raised concern abroad that his government is directly seeking to weaken the yen, something it denies. In the talks, Japan has questioned the statement’s contents because it doesn’t want to be singled out for criticism, another official from a G-7 nation said, also on the basis they not be named.

The G-7 is looking to release the statement before a Feb. 15-16 meeting in Moscow of finance ministers and central bankers from the Group of 20, which includes the G-7 and emerging markets such as Brazil, China and India. Any pledge not to target currencies when setting policy would mark a strengthening in stance from when the G-7’s finance chiefs last commented on currencies as a group in September 2011.

The Wall Street Journal reported yesterday that the G-7 was debating a statement.

Japan Contacts…”

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“Pope Benedict XVI, saying he no longer has the strength to lead the world’s 1 billion Catholics, will resign from the papacy at the end of the month, the first such abdication in almost 600 years.

“After having repeatedly examined my conscience before God, I have come to the certainty that my strengths, due to an advanced age, are no longer suited to an adequate exercise of the Petrine ministry,” he said today in an address to senior church officials in Rome.

Pope Benedict, the 265th leader of the Roman Catholic Church, said his resignation would take effect at 8 p.m. on Feb. 28. He will step down two months before his 86th birthday after serving for almost eight years as pontiff after succeeding John Paul II.

The resignation of Benedict may reopen rifts within the Church as pressure builds to name a pope from the developing world where Catholicism is growing and offsetting declines in Europe and the U.S. The new pope will be chosen through a conclave, a special gathering of cardinals who are sequestered in the Sistine Chapel at the Vatican until they can agree on a successor.

Pope Benedict will have no role in choosing his successor, Vatican spokesman Father Federico Lombardi said at a press conference in Rome. The pope will initially retire to his summer residence in Castel Gandolfo before transferring to live in a convent, Lombardi said.

Monti Shaken…”

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According to Saint Malachy, the next Pope will be the last….

World Markets

Currencies

Commodities

USD Libor

Euribor

Yields for Italy, Spain, France,  and Germany …

“Price volatility is an unavoidable aspect of investing in common stocks. During periods when emotions are dominating reason, price volatility can become more pronounced than is normal during calmer times. The insidious part of this fact is that the more volatile stock prices are, the more fear and stress they generate, which only feeds even greater volatility. Of course, the same can be said when greed raises its ugly head. The purpose of this article is to provide some logic and reason that can be applied to stock price volatility that simultaneously weakens its potential damage.

However, in order to accomplish my objective, it is imperative that the reader be willing to consider what I believe is the undeniable reality that stocks are often mispriced by Mr. Market. This concept flies directly in the face of the so-called “Efficient Market Hypothesis (EMH)” accepted by proponents and followers of Modern Portfolio Theory. According to the Efficient Market Hypothesis, stocks are always accurately priced because existing share prices always incorporate and reflect all relevant information. Therefore, stocks are always trading at their fair value. I consider this notion preposterous, and in the context of this article, I intend to offer evidence that clearly disproves it.

Stock Prices are Often Pathological Liars

In his famous work, the Picture of Dorian Gray, Oscar Wilde perhaps said it best when he said “nowadays people know the price of everything and the value of nothing.” Unfortunately, this famous quote may be more appropriately descriptive of stock market investing, than in any other aspect of life.  To make my case, all I have to do is direct people to look at most every stock chart, on any financial site or blog, and they will discover a picture solely graphing the company’s stock price movement over whatever time frame is being graphed.

For example, let’s look at a 10-year price only graph on Dun & Bradstreet Corp. (DNB), courtesy of Google Finance. From this picture, it would be very easy to assume that Dun & Bradstreet was a good stock for the first five years on this graph, and a bad stock for the last five years.  If you’re talking strictly about the stock’s price, then these assumptions would be rational and correct.  For the first five years the price generally trended up, and for the last five years it has generally trended down. Therefore, from this graph we know a lot about the “price” of Dun & Bradstreet the stock, but very little about the intrinsic “value” of Dun & Bradstreet, the business behind the stock. Consequently, I would argue that there is very little wisdom offered by this price graph.

In contrast, if we look at Dun & Bradstreet through the lens of FAST Graphs™, the fundamentals analyzer software tool, over approximately the same time frame, our perspective on Dun & Bradstreet the business and the stock is radically altered.  Here, in addition to price only, we have added some essential fundamental information on Dun & Bradstreet.  The orange line on the graph plots earnings-per-share at a fair value P/E multiple of 15.  The slope of the line, however, is 12%, which is the operating earnings growth rate that the company achieved since 2003. The light blue shaded area represents dividends paid out of the dark green shaded area (earnings).

There are several important facts that we can immediately ascertain and learn about Dun & Bradstreet the business once we have the perspective of price correlated to essential fundamentals (earnings).  First of all, we discover that Dun & Bradstreet’s stock was generally being overvalued by Mr. Market for the better part of the years 2003 to 2008. The black monthly closing stock price line was above the orange earnings justified valuation line. Next, we see that the great recession caused the stock price to revert to the mean, thereby, bringing price down into being more in alignment with the orange earnings justified valuation line (intrinsic value).

Furthermore, by focusing only on the orange earnings line, we discover that operating earnings growth was very strong up through 2008, before modestly falling during the recessionary years 2009 and 2010. Then, we discover that earnings rebounded strongly in 2011 and 2012, and are estimated to grow at double-digit rates in 2013.  Consequently, we also now discover that based on its recent strong earnings recovery that Dun & Bradstreet appears to be moderately undervalued….”

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“The Department of Homeland Security’s civil rights watchdog has concluded that travelers along the nation’s borders may have their electronics seized and the contents of those devices examined for any reason whatsoever — all in the name of national security.

The DHS, which secures the nation’s border, in 2009 announced that it would conduct a “Civil Liberties Impact Assessment” of its suspicionless search-and-seizure policy pertaining to electronic devices “within 120 days.” More than three years later, the DHS office of Civil Rights and Civil Liberties published a two-page executive summary of its findings.

“We also conclude that imposing a requirement that officers have reasonable suspicion in order to conduct a border search of an electronic device would be operationally harmful without concomitant civil rights/civil liberties benefits,” the executive summary said.

The memo highlights the friction between today’s reality that electronic devices have become virtual extensions of ourselves housing everything from e-mail to instant-message chats to photos and our papers and effects — juxtaposed against the government’s stated quest for national security.

The President George W. Bush administration first announced the suspicionless, electronics search rules in 2008. The President Barack Obama administration followed up with virtually the same rules a year later. Between 2008 and 2010, 6,500 persons had their electronic devices searched along the U.S. border, according to DHS data.

According to legal precedent, the Fourth Amendment — the right to be free from unreasonable searches and seizures — does not apply along the border. By the way, the government contends the Fourth-Amendment-Free Zone stretches 100 miles inland from the nation’s actual border.

Civil rights groups like the American Civil Liberties Union suggest that “reasonable suspicion” should be the rule, at a minimum, despite that being a lower standard than required by the Fourth Amendment.

“There should be a reasonable, articulate reason why the search of our electronic devices could lead to evidence of a crime,” Catherine Crump, an ACLU staff attorney, said in a telephone interview. “That’s a low threshold.”

The DHS watchdog’s conclusion isn’t surprising, as the DHS is taking that position in litigation in which the ACLU is challenging the suspicionless, electronic-device searches and seizures along the nation’s borders. But that conclusion nevertheless is alarming considering it came from the DHS civil rights watchdog, which maintains its mission is “promoting respect for civil rights and civil liberties.”

“This is a civil liberties watchdog office. If it is doing its job property, it is supposed to objectively evaluate. It has the power to recommend safeguards to safeguard Americans’ rights,” Crump said. “The office has not done that and the public has the right to know why.”…”

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“……According to numbers issued by the Department of Labor, weekly unemployment reports have dropped to a five year low, and the overall employment rate is holding at 7.9%.  This would seem to be a vast improvement over the dreadful bloodletting in the system only a few years ago.  Has the private Federal Reserve and the Obama Administration really done it?  Have they turned back the tide on the greatest fiscal crisis the U.S. has seen since the Depression?

No.  They haven’t.

They have only changed how the data is disseminated to the public. In order to understand how the employment statistics con is being engineered, it is important to understand the difference between “Adjusted” and “Unadjusted” numbers.

Labor Department data is “seasonally adjusted”, using a series of statistical assumptions including something called “Trend Cycle Analysis”.  Trend Cycle Analysis is, basically, a sham, but a sham put together in a very complex and confusing manner.  If you ask a mainstream economist what it is, you’ll likely get a three hour long dissertation filled with financial babble and very little concrete explanation.  So let me break it down as simply as I can…

Imagine that you are going to estimate how much profit you plan to make in a particular month, but you don’t just consider your current pay rate and pop it into a calculator; you also throw in the possibility of a few pay raises, an inheritance from a grandma who might kick the bucket, and, your exaggerated expectations of the entire year’s profit on top of that.  You may also take into account future bad weather, a mugging, a nuclear war….whatever.  All hypothetical situations not based in reality.  Basically, you decide that a particular trend in your income is inevitable, then, mold your statistical analysis around that assumption.

When your real profit numbers come in (the unadjusted numbers) and they do not meet your expectations, you simply change them according to what you believe SHOULD have happened.  If you insist that your profits are going to go up for the year, and they go down for a couple months instead, you change the variables you use to calculate the statistical average so that the results match your expectations, assuming that it will all balance out in the end.

Now, this sounds utterly insane for the common person out there trying to make a living.  If you ran your household this way, without accepting the cold hard unadjusted numbers in front of you, you’d find yourself broke and on the street in no time.  Unfortunately this is EXACTLY how our government handles most financial data; by coming to a final conclusion before hand, and then forcing the numbers to fit that conclusion.

This is why in February of 2013, “adjusted” first week unemployment rate was reported at 366,000 – a 5000 person drop from the week before.  A seeming improvement in the trend.  But, unadjusted numbers came in at 386,176 – a 16,000 person spike from the week before.  When one examines real unemployment numbers, he finds that the divergence between the adjusted and unadjusted statistics is growing larger with each passing quarter.  That is to say, the contradiction is becoming so blatant between the hard numbers and the Labor Department’s fantasy numbers that one must question whether or not the government is lying to us outright about the state of the economy (hint – they are lying).

These same methods are used by the government to calculate progress in the housing market, disposable income, etc.

The claim of “recovery” in the jobs market simply doesn’t jive with other indicators, like 2012 Christmas retail, which had the worst showing since the crash in 2008 (and these are still mainstream numbers!):

http://www.foxnews.com/us/2012/12/26/us-holiday-retail-sales-growth-weak…

Average household savings continue to scrape the bottom of the barrel, indicating that the public is not spending or withholding cash.  They are simply broke:

And the overall GDP of the U.S. contracted in the fourth quarter of 2012 for the first time in three years (again, according to official numbers, meaning the reality is much worse):

http://money.cnn.com/2013/01/30/news/economy/gdp-report/index.html

The downturn in consumption and industry also seems to be supported by the Baltic Dry Index, a measure of global shipping and rates.  The BDI has fallen to near historic lows THREE TIMES in the past year, which to my knowledge, has never happened before.  In the past, the BDI has been a strong prophetic indicator of future market volatility.  Usually, around a year after a severe decline in the index, a dangerous economic event takes place.  The BDI made its first sharp drop to all time lows at the end of January 2012, exactly a year ago. …….”

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What happened to the ways of Zarathustra?

A philosophy from a times past where life was to be as simple as right,wrong, good and evil. Where truth and good was to be sought out and life was to follow accordingly.

[youtube://http://www.youtube.com/watch?v=V6DSu3IfRlo 450 300]

Link for iPhone users: http://www.youtube.com/watch?v=V6DSu3IfRlo

[youtube://http://www.youtube.com/watch?v=eZo4hbGJjVI 450 300]

Link for iPhone users: http://www.youtube.com/watch?v=eZo4hbGJjVI

Do you see what your contributing too? We need to change foreign policy people. This can’t be good.

Link for iPhone users: http://www.youtube.com/watch?v=Jya6aNo_JvM

There must be good trees up in Iowa….

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“Thomas E. Ricks, who is well-sourced in Democratic national security policy circles, says there’s a “50-50” chance Chuck Hagel withdraws from consideration for the secretary of defense job.

Ricks says that Hagel “didn’t do well” in his Senate hearing last week, and didn’t seem “interested in the job.”

“He has the votes, but not much else,” writes Ricks. “His big problem is that no one much wants him running the Pentagon. Congressional Republicans consider him a traitor. Congressional Democrats see him as anti-gay and anti-abortion, undercutting their support for him. And Northeastern Democrats (and some others) worry about his stance on Israel. Democratic support in the Senate appears more dutiful than passionate.”…”

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The folly of foreign policy and supporting al -Qaueda militants.

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Let the games begin…

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“Google Inc. GOOG +1.48% Executive Chairman Eric Schmidt plans to sell stock valued at $2.5 billion over the next year as part of a trading plan that will cut his stake in the Internet firm by more than 40%.

The Mountain View, Calif.-based company said in a regulatory filing on Friday that Mr. Schmidt plans to sell 3.2 million shares of stock over the next year. Mr. Schmidt owned 7.6 million shares of Google as of Dec. 31, according to the filing. At Friday’s closing price of $785.37, the shares being sold would have a value of $2.5 billion….”

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So far Nemo has pounded the east coast and he ain’t done yet. CT seems to be the hardest hit so far. According to reports we have over 650k people without power.

Get ready for storm Orca….

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“Facts do not cease to exist because they are ignored.” – Aldous Huxley

Conspiracy theories are always relegated to tin foil hat wearing folks who are kicked to the curb for stretching.

While i will agree there are many theories that classify as a stretch, the interesting thing about studying these claims is that you can begin to connect dots.

Patterns emerge, old tactics pop up, and claims from victims become eerily similar. While they do not provide conclusive proof, you begin to be able to read between the lines clearly, as to the real story behind the words.

Many theories have no real proof….until whistle blowers speak out, information gets leaked, and or through the FOIA Act we get the real story.

The sad part is, in many cases this info comes too little too late to do anything or for people to care.

I mean do you care that your Government has been found guilty in the wrongful death of MLK?

A new low for me as i did not know of this trial despite having my head buried in the news world.

At any rate, last week we learned how 50 years of foreign policy produced some of our root causes regarding immigration problems.

As a stand alone piece of work there will be those who deny, try to subterfuge, confuse, and discredit the work.

Not sure why…perhaps these people are to proud and or weak to admit to the truth. Especially, when you have corroborating evidence like Confessions of an Economic Hit Man and The Shock Doctrine.

This weeks documentary, makes a particular claim that may be hard to believe. It is not important. What is important is being able to connect dots. To see how our old habits of foreign policy rise again. To understand that despite our ‘interests in a region” we should probably just butt out and stop creating enemies.

Lastly, some of us may be able to say we did not vote for this joker or the last joker, but none of us can say our taxes do not support ill behavior.

I leave you with a clip from Ron Paul and General Wesley Clark b4 you get to the documentary:

Link for iPhone users: http://www.youtube.com/watch?v=_Cmm2PAm48E

Link for iPhone users: http://www.youtube.com/watch?v=r8FhZnFZ6TY

Link for iPhone users: http://www.youtube.com/watch?v=DawvDXiay3o

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