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Monthly Archives: February 2013

The Aussie Dollar Pares Looses and Rallies on Lower Interest Rate Expectations

“Australia’s dollar rallied, erasing earlier losses, as traders pared bets the central bank will cut its key interest rate after data showed companies will continue to invest into next year.

The so-called Aussie dropped earlier after figures showed capital spending unexpectedly fell last quarter. New Zealand’s dollar strengthened after global stocks rallied and local data showed business confidence improved and building approvals decreased less than economists estimated. The yield on Australia’s 10-year debt rose from a five-week low.

“The information in the capital expenditure report is not enough to trigger a rate cut next week,” said Annette Beacher, Singapore-based head of Asia-Pacific research at TD Securities Inc. “The first piece of information was a weaker-than expected December quarter. The second piece of information we noticed was that 2013-2014 was stronger than expected. The Aussie seemed to have settled back at a slightly higher level after a violent movement.”

The Australian dollar added 0.4 percent to $1.0278 as of 4:26 p.m. in Sydney, after earlier falling as much as 0.4 percent. It touched $1.0184 yesterday, the lowest since Oct. 10. The Aussie jumped 0.6 percent to 94.93 yen. New Zealand’s dollar advanced 0.5 percent to 83.18 U.S. cents. The so-called kiwi rose 0.7 percent to 76.84 yen.

For the month, Australia’s currency was set for a 1.4 percent drop versus the U.S. dollar. New Zealand’s dollar was poised for a 0.8 percent decline….”

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Two Singapore Traders Sue UBS After Rate Probe Dismissal

UBS AG (UBSN) was sued for wrongful dismissal by two former traders in Singapore who claimed they were fired in a bid by the bank to cover up its role in allegedly manipulating key reference rates.

Mukesh Kumar Chhaganlal, the bank’s former co-head of macro-trading for emerging marketsin Asia, and Prashant Mirpuri, a former executive director, said in separate lawsuits filed at Singapore’s High Court yesterday that they were given no opportunity to defend themselves against the bank’s claims of gross misconduct on their part….”

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The Nikkei Celebrates The Nomination of Kuroda

“Japanese Prime Minister Shinzo Abe nominated Asian Development Bank President Haruhiko Kuroda to lead the nation’s central bank, raising the likelihood of further monetary stimulus this year.

Kikuo Iwata, a professor at Tokyo’s Gakushuin University who advocates greater government oversight of the Bank of Japan (8301), and BOJ Executive Director Hiroshi Nakaso were nominated for the two deputy governor positions, the nation’s parliament said in a statement today. Current Governor Masaaki Shirakawa and his deputies will step down on March 19….”

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Who Controls the World?

[youtube://http://www.youtube.com/watch?v=vSSKpL87_Rs 450 300]

Link for iPhone users: http://www.youtube.com/watch?v=vSSKpL87_Rs

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The U.S. is a Third World Hell Hole…..According to Police

“What else can explain their actions and attitudes?

Law enforcement agencies in America are using the No More Hesitation series of cardboard and paper targets for shooting practice. The Minneapolis-based Law Enforcement Targets Inc. (LET) has produced at least eight of them, with photos ranging from a young boy to a pregnant woman in her third trimester, both of whom are pointing guns. Other posters include an elderly man in his home holding a shotgun and a young mother with her daughter in a playground. There does not yet appear to be a baby in a playpen target. Available for 99 cents a sheet, the posters are approximately two-feet-wide by three-feet-tall. (Note: all the posters I’ve seen are of white people; perhaps it is too controversial to shoot a non-white pregnant woman or child?)

LET is a Department of Homeland Security (DHS) supplier. It has contracts worth at least $5,471,126 with several federal agencies, and it boasts of providing training materials throughout the military and to “thousands of law enforcement agencies at the municipal, county, and state levels.” Law enforcement customers are admonished to “Mix & Match ‘No More Hesitation’ targets for best pricing.” Presumably, officers who shoot the elderly man will also want the companion elderly woman target.

Under an advertised image of a pregnant woman….”

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The Invisible Reality: “The Next Adam, and His Victims, are Already on Their Way”

“Let’s try to unmask and decipher a few things right now, and to make things a bit easier, let’s also take as our example a topic that is front and center stage politically at the time of this writing. In order to get there, however, we’ll have to provide some background.

John and Jane and their baby Adam all live together in Anytown, USA, and have, by any modern standards, what most would consider a decent life. They are not affluent, but nor are they abjectly poor, and so manage to have a modest house in a suburban neighborhood, and a pair of used economy cars in order to get back and forth to work. For of course, unlike the majority of their parents’ lives – and certainly unlike their grandparents’ entire lives – both John and Jane must work full-time. Inflation, brought on by government’s acquiescence to the Federal Reserve’s fiat currency creation scheme, coupled with the high rates of taxation this fosters in turn – all while government expands in size and scope to accommodate the welfare-warfare state it has become during the past century of its existence – have made this necessary. During the era of both of Adam’s grandmothers’ working lives, the idea of both parents working was sold to the public as “Women’s Liberation,” but it was actually closer to enslavement: It got former housewives onto the income and Social Security tax rolls, away from the family, and government has never been the same.

But all of that is four decades in the past, and now, after John leaves for his job, Jane prepares to leave for her own, dropping little Adam off at daycare, where he enjoys only the company of other kids, and few nannies who are paid blue-collar wages (after taxes, of course). They look after Adam and the others, and see that they don’t get into mischief while playing with blocks, toy cars, and coloring books, until Jane comes back from her own job to retrieve Adam. Then she brings him home to John (Dad) and dinner and some TV before bedtime. This process confuses the young Adam: Why he is left alone so often by his parents, to whom he otherwise feels so close, but he is still too young to articulate any of this, and so things go on as such for a while.

Flash forward a few years, and Adam is able to then ride each weekday morning on a bus that picks him up in front of his house or on a nearby street corner, and takes him to a government building known as “school.” This alleviates Jane from the responsibility of transporting Adam – although his attendance at this “school” is something which those in government have made mandatory at any event. John and Jane would, pending a certain measure of government approval, have the option of sending Adam to a private school of their choosing, or homeschooling him, but alas, inflation and taxation – even worse still than when Adam was in daycare – have made this an impossibility. And since they must pay the taxes levied against their house (in addition to the mortgage and interest) even if Adam were to receive an education elsewhere than at this one-size-fits-all government “school,” John and Jane both shrug their shoulders and agree that sending Adam to this place is their best available option. Plus, they reason, Adam will learn to enjoy the company of his schoolmates.

This “school,” however, is very different from the daycare Adam once attended. There is a different classroom he must be in for each subject he is being taught. A bell rings at the end of each 45 or 50 minute period, telling him and his classmates that it is time to move to the next room and the next topic and the next teacher. Lunch is served in a cafeteria on plastic trays not unlike meals are eaten in a prison. And indeed, a full-time police officer is permanently posted at this “school” in order to monitor the students’ conduct, search for drugs or drug use, and stand by the metal detectors Adam and his classmates must pass through each day to prevent weapons and other banned objects from entering this important government building.

While Adam is in each classroom, he is expected to be seated, be quiet, and do as he is told. He cannot get up, move, leave, or go to the bathroom without permission. If he rebels or resists in any way, he risks punishment in the principal’s office, or even arrest by the on-duty officer. All his movements are monitored by closed-circuit cameras, the locker he is assigned may be searched for any reason at any time, as can his own clothing and person, and his conversations with classmates are routinely overheard by the faculty. Anything he says that is deemed in any way controversial will likely be reported to the principal or the police.

Many of the kids adapt to this environment. Though they, like Adam, are full of youth and hormones and curious energies, they manage to sublimate these natural qualities of development and conform to the dictates of the government “school.” But Adam does not – although this is apparent only in subtle ways at first. He finds difficulty in making any lasting friends. Upon arriving home each day, he prefers to withdraw to his room, watch TV, or mope about the house. Over time, his grades begin to slip. He begins to find more and more excuses to not go to “school.” He just doesn’t want to be there anymore….”

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A Message From Heather

“Almost Every Loan, If Not Every Loan is Fraud…No Loan Was Made

Heather shared this message in a Skype chat, and I thought it was well worth sharing. I asked for permission (just like we did with the Poof interview lol) and here was her response:
Heather: Sure…go for it…just post also with data that loan and debt are two different concepts, legally, lawfully, factually and as a matter of public policy.
The following dialogue is pulled directly from the Skype conversation:
Heather Ann Tucci-Jarraf:
1. produce documentation of prior title, ownership and rights to the money they purportedly loaned you
2. produce documentation of the history and origin of funds that they purporetedly had prior title, ownership and rights to that they purportedly loaned you (banking requires 3 generations at least if not all the way back to issuance/creation of the alleged funds…this is why banks issue a letter of origin/history of funds)
3. produce documentation of the actual transaction and transfer of said funds (prior title, ownership, and rights) from loaner to borrower (invoicing/receipts) there is a difference between a “loan” and “debt,” conceptually and factually
look up the definitions of loan and debt
difference between statement and invoice…only an invoice has to be paid…however they would first have to show that they made you a loan…if no loan, each invoice is fraud, mail fraud, etc….”

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Is Twitter Really Worth $10 Billion?

“I spent the last week trying to write a column that proved Twitter wasn’t worth $10 billion. Then the facts intervened.

Stubbornly, they arranged themselves into a most unexpected conclusion, one that seems almost blasphemy to type: Twitter has the potential to match some of the money-gushing properties of the Internet’s greatest money gusher,Google Inc. GOOG +1.22%

If you watched the Oscars Sunday night, you saw Twitter’s raw influence on display as jaunty red carpeters, advertisers and actors gabbed in Twitter’s sometimes-obtuse language of hashtags and handles. It was as if the world had folded in on itself—all-powerful television reduced to being a lowly portal to social media.

That cultural ascendancy isn’t lost on Twitter and its investors, who are said to be plotting what would be the premier public offering of 2013. In recent weeks the seven-year-old company completed private transactions that pegged its value at $9 billion. Others have put the value above $10 billion.

This is remarkable because Twitter has been in the money-making game for only three years, primarily selling “sponsored tweets” to advertisers whose come-ons pop up in the message streams of the service’s 200 million-plus active users.

It’s working. Advertising-data-firm eMarketer Inc. estimates 2014 revenue at $808 million, but people in the venture-capital community are already whispering that Twitter will break $1 billion by then. In fact, eMarketer will soon revise its figures upward though it won’t say by how much….”

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Given Yesterday and Today’s Performance Did We See a Classic Bear Trap?

“There are presently many analysts and commentators warning about an imminent market top and the potential for a significant correction. Numerous potential stumbling blocks stand ready to inhibit any further market gains, and according to the Bespoke Investment Group, this current S&P 500 rally is the 10th longest in days without a 10% market correction. Yesterday’s big sell-off could be the beginning of a large correction. But maybe it has set the foundation for a bear trap instead.

In regard to the long streak referenced, Bespoke also mentioned in their study that the longest streak on record was 2,553 days, and the ninth longest was 650 days. The current streak stands at 512 days. So how much longer can this streak continue?

I have no idea. Perhaps it’s ending right now as the market moves lower from recent highs. But I do know two things:

  1. We will only know in retrospect if a significant correction is unfolding.
  2. Markets are still above support levels.

This first chart is the S&P 500 Index. The major, minor, and minor-minor bullish trend channels are depicted as the parallel red lines of varying degree. The major one is widest, while the minor-minor is narrowest. Notice that the index still rests above the minor-minor trend channel support line – the index’s first level of support.



Next are the Russell 2000 Index and the Dow Jones Transportation Average Index charts. Notice how the indices rest above their respective horizontal red lines, which represent previous all-time highs in each index and now offer support…..”

Full article and charts

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How to Exploit Wall Street Compensation

“Here is a guaranteed way to get paid well if you work on Wall Street. Find a best friend at a competing bank or hedge fund and take opposite sides of the same large bet. In one year’s time one of you will have a huge profit and get paid well. The other person will have lost and perhaps be fired. The sum of both your profits will be zero, but the sum of what you get paid will be positive. Split the pay.

This scheme is one of the more fanciful ways to exploit Wall Street’s compensation structure that pays absurdly well in the good years and just okay in the bad years. Losing money never means having to give anything back.

That asymmetry in pay (money for profits, flat for losses) is the engine behind many of Wall Street’s mistakes. It rewards short-term gains without regard to long-term consequences. The results? The over-reliance on excessive leveragebanks that are loaded with opaque financial products, and trading models that are flawed.

Regulation is largely toothless if banks and their employees have the financial incentive to be reckless….”

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The Pope Is Gay

“Pope Benedict XVI will officially retire at 8 p.m. tomorrow, but his retirement package is raising a few eyebrows — and resurrecting rumors about his sexuality.

Rather than decamp to some monastery in Germany as many expected, Benedict will instead stay living in the Vatican.

CNN reports he will be living in the Mater Ecclesiae (Mother of the Church) building, which formerly housed a cloistered convent in the Vatican gardens. He will be referred to as the “emeritus pope” and keep wearing the white — though he will lose his trademark red shoes, perhaps wearing a pair of “handcrafted brown loafers” instead, the WSJ reports.

One detail that has caused particular scrutiny is that the Pope will continue to live with his trusted secretary Archbishop Georg Ganswein, who will also be head of the new Pope’s household — from the sounds of it, working two jobs.

The Vatican denies that Ganswein working for both the old Pope and the new Pope will cause any conflict of interest. But there’s a more scandalous question as well, as put forward by Andrew Sullivan, perhaps the best-known Catholic blogger in America, today:

So Benedict’s handsome male companion will continue to live with him, while working for the other Pope during the day. Are we supposed to think that’s, well, a normal arrangement?

Sulivan, a gay man himself, has raised the question of the Pope’s sexuality before (he doesn’t suggest that the Pope has acted upon his sexual urges, we should note).

In 2010 he wrote that “it seems pretty obvious to me … that the current Pope is a gay man,” and went on to describe his reasoning:

When you look at the Pope’s mental architecture (I’ve read a great deal of his writing over the last two decades) you do see that strong internal repression does make sense of his life and beliefs. At times, it seems to me, his gayness is almost wince-inducing. The prissy fastidiousness, the effeminate voice, the fixation on liturgy and ritual, and the over-the-top clothing accessories are one thing. But what resonates with me the most is a theology that seems crafted from solitary introspection into a perfect, abstract unity of belief. It is so perfect it reflects a life of withdrawal from the world of human relationship, rather than an interaction with it. Of course, this kind of work is not inherently homosexual; but I have known so many repressed gay men who can only live without severe pain in the world if they create a perfect abstraction of what it is, and what their role is in it.

Sullivan isn’t exactly alone in his suspicions….”

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RIP Van Cliburn

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[youtube://http://www.youtube.com/watch?v=f7MAriotZyE 450 300]

Link for iPhone users: http://www.youtube.com/watch?v=f7MAriotZyE

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Wall St. Upgrades $JPM With 15-35% Upside

“It is usually interesting when Wall St. brokerage firms and research firms issue analyst coverage on each other. Sometimes the coverage is positive and sometimes it is negative. Many investors likely have to wonder just how much finger-pointing is taking place. Or maybe the analysts are talking up their own firm’s value in disguise.

So far on Wednesday, we have seen two very favorable calls on J.P. Morgan Chase & Co. (NYSE: JPM). The calls are also in favor of Jamie Dimon. Maybe Wall St. firms do not always bash their competitors after all.

Bank of America Corp. (NYSE: BAC), with its Merrill Lynch unit, has maintained its Buy rating and also has raised the price target to $55 from $52. The firm raised earnings estimates to $5.85 from $5.70 for 2013, to $6.00 from $5.92 for 2014, and to $6.10 from $6.05 for 2015.

The research team said:

J.P. Morgan remains the cheapest P/E stock in our coverage universe at 7.9-times expected 2014 earnings, and given 14% tangible return potential, looks cheap on tangible book value as well. Also, if the market continues to sell risk, J.P. Morgan should outperform its peers. Lastly, we continue to get pushback that J.P. Morgan is over-owned, implying no incremental buyers for the stock.

It also said….”

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Doug Kass Dumps $AAPL After He Tweets Rumor of Stock Split

“…..After he set the rumor in motion, and the stock took off, he followed up by saying he was selling his Apple shares, notes Philip Elmer DeWitt.

He was selling his shares because, upon closer inspection, he decided the rumor made no sense.

Kudos to Kass for being transparent, but boy does it look fishy. He was getting hammered on Twitter and defended himself by saying the stock split rumor has been floating around for days, and just picked up steam because we’re closer to the shareholder meeting.

He also called people who said he was breaking the law “dumbie” on Twitter. So, there’s that…..”

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Shiller: The Last Time Home Prices Rose as We Have Seen Recently, The Soon Fell

“The recent string of housing data shows that housing supply is tight, new home sales are surging, and pending home sales are up.  And this, analysts say, bodes well for home prices.

In an interview with The Wall Street Journal, however, Robert Shiller says he is more “worried” than most about the rise in home prices, because he isn’t certain that the recovery in prices will be sustained.

Here is an excerpt from the interview:

WSJ: Did we finally hit a floor in home prices last year?

Mr. Shiller: The trend in home prices seems to be up now. It has been going up. That’s upward momentum, which by my general rule of forecasting has been good for the future. I’ve been tentative about that. It may well be the turning point.

But I’m not sure about that. I’m more worried than most people that it could be a short-lived turnaround. It could be like the 2009-10 upturn where we saw home prices rising right after President Obama took office and right after the home-buyer tax credit was instituted. In that upturn there were some cities that did quite spectacularly. And then that fizzled. I’m not too sure that this one will extrapolate either.

WSJ: Why are you more worried than most people?….”

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Bernanke Expects High Unemployment Until 2016…HINT, HINT

“Day two of Federal Reserve Chairman Ben Bernanke‘s semi-annual Congressional testimony on monetary policy is now over.

Today, Bernanke went before the House Financial Services Committee.

Yesterday, in a testimony before the Senate banking committee, Bernanke sought to downplay concerns over the size of the Fed’s balance sheet, largely as expected. He told senators that the benefits of quantitative easing outweigh the costs and that stocks don’t appear overvalued at these levels.

During the Q&A session with the House Committee today, Rep. Maxine Waters asked Bernanke about the effects of sequestration. Bernanke replied, “My suggestion for your consideration is to align the timing better with the problem.” …”

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