Tuesday FOMC: Will They, or Won't They?

All eyes and ears on the Federal Open Market Committee (FOMC) meeting tomorrow. What will Bernanke and the gang (one smartass poster at Yahoo called them Bennie and the Inkjets, a spoof on this famous song of course) say they will do?

The consensus only a few weeks ago was that Benny and the Inkjets would likely announce the QE2 (full version in trillion$) after the September 21 meeting. Then last week the new consensus emerged that the Fed wouldn't announce any new scheme on the September meeting but would wait until the November meeting, after the election.

So what's it going to be? It will be entertaining to the dwindling number of stock market participants. Here's Zero Hedge's take, citing Goldman Sachs. It would be surprising if Ben dared deviate from the scenario...

Welcome To Chez Shalom: Here Is The Menu For Tomorrow's FOMC Lunch (Tyler Durden, 9/20/2010 Zero Hedge)

"Concerned what will happen tomorrow at 2:15pm? You should be: after all the Fed is now in charge of everything, and this (in)decision will impact your life much more than who the fattest person on this season's Biggest Loser is. Here is this year's most prescient economist, Jan Hatzius, once again doing the best summary on the four possible outcomes of tomorrow's FOMC decision. In a nutshell these are: i) No substantive change in the policy statement, ii) Recognition of a weaker economic outlook, but without an explicit signal that renewed unconventional easing is under consideration, iii) An explicit signal that renewed easing is under consideration, and iv) An announcement of renewed easing. Our personal choice is entree #2, although this being Chez Shalom, no matter what, it will always end being an omakase type of affair - fiat prix tres unfixe. (Oddly enough, Chez Shalom still does not have a Zagat's entry. As everyone in America eats (or defecates) there every single day, it is about time our more industrious readers provided their feedback and rating).

"From Goldman's Hatzius and Tilon

"FOMC Preview: Several Options on the Menu

• The key question at the September 21 FOMC meeting is how far the committee will lean in the direction of renewed policy easing. Will it formally acknowledge a weaker growth outlook, and if it so will it go further by hinting at—or actually implementing—additional easing measures?
• In our view, the most likely outcome is a more dovish statement that explicitly reflects a dimmer economic growth outlook and nods in the direction of further easing via changes to its forward-looking guidance on policy. Though we ultimately expect the Fed to purchase at least another $1 trillion in Treasury securities, we think it probably will take more time for the FOMC to reach agreement on such a major step.

"The key question at the September 21 FOMC meeting is how far the committee will lean in the direction of renewed policy easing. The tone of the statement will depend principally on how the FOMC describes the economic outlook (the growth outlook in particular), and whether it signals the possibility of (or actually announces) additional balance sheet expansion. The choices along these dimensions yield four basic choices for the statement, ranging from most “hawkish” to the most “dovish”:

1. No substantive change in the policy statement. One option is essentially to repeat the August statement, with only minor changes in wording. The justification would be that the data since the last FOMC meeting on August 10 have been roughly in line with expectations. As shown in Exhibit 1 on page 2 of last Friday’s US Economics Analyst, our US-MAP scoring system of economic indicators–which is largely based on how the economic indicators compare with the Bloomberg consensus as of just before the release—has averaged around zero over this period. Chairman Bernanke suggested in his Jackson Hole speech that further easing could be triggered by an increased threat of deflation and/or a significant weakening in the economic outlook. One might therefore argue that the committee will take the view that these risks have not increased significantly, and that it is therefore inappropriate to change the statement. Indeed, the description of the economy in the August statement—indicating that the recovery “has slowed,” “[h]ousehold spending is increasing gradually,” and “employers remain reluctant to add to payrolls”—remains accurate. This would be the most “hawkish” of the options, and would imply that the Federal Open Market Committee, or at least a significant faction of it, requires more proof to warrant additional quantitative easing (QE).

2. Recognition of a weaker economic outlook, but without an explicit signal that renewed unconventional easing is under consideration. A somewhat more “dovish” alternative would be for the committee to indicate that the economic outlook has in fact deteriorated since the last meeting. Although the monthly indicators have on average been in line with expectations, those expectations were quite low, and many economists have cut their longer-term growth and employment forecasts over this period. For example, the median forecast for real GDP growth in the second half of 2010 fell from 2.6% (annualized) in the Blue Chip Economic Indicators survey released on August 10 to 2.1% in the survey released on September 10. It is likely that both the committee and the Fed staff have revised down their forecasts as well, perhaps by a similar amount. If the committee indicates a downward revision of its forecast, this may be viewed as an implicit signal that additional easing has become more likely. The FOMC could acknowledge a weaker forecast via one or more changes to the first paragraph of its statement, perhaps indicating that recent growth is below trend or that resource utilization is not rising materially.

3. An explicit signal that renewed easing is under consideration. This could take the form of an added phrase or sentence in the forward-looking policy discussion. An example would be the following modification of the “extended period” sentence: “The Committee…continues to anticipate that economic conditions…are likely to warrant exceptionally low levels of the federal funds rate for an extended period and potentially a further expansion of the Federal Reserve’s balance sheet.” Another option would be a bald statement that the committee “is considering” additional unconventional easing.

4. An announcement of renewed easing. Finally, of course, the committee could simply announce that it will ease monetary policy anew. In this case, we would expect an asset purchase program focused on long-term Treasury securities that would ultimately total at least $1 trillion in size, though whether the committee is prepared to state this amount up front or begin with a smaller figure and leave open the possibility of further moves remains an open question.

"How likely is each of these options? We cannot rule any of them out, but we suspect the discussion will focus around options 2 and 3, with a majority of the Committee willing to acknowledge a slightly softer growth outlook but more vigorous debate about the desirability of signaling a possible easing step. In the end, we think the FOMC will give at least a nod in the direction of further easing via changes to its forward-looking guidance on policy but stop short of actually announcing the implementation of a new program."

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CNBC Sponsors Town Hall Meeting for Obama

Despite the recent unhappiness of Mr. Immelt, CEO of Government Electric aka General Electric toward the administration he serves as economic advisor, his media subsidiary CNBC dutifully set up a town hall meeting for President Obama this morning so that the Prez can promote himself as the epitome of the "American Dream".

Oh that's rich.

Obama Town Hall: Defending His Record on Economy, Jobs
(9/20/2010 CNBC)

"President Obama spoke Monday to a cross-section of Main Street, Wall Street and Washington gathered at a CNBC-sponsored town hall, with the economy at a crossroads and the nation's precarious political structure hanging in the balance.

"Sharing an hour with a largely friendly crowd that gave him hoots of approval and a standing ovation at the end of the "Investing in America" forum, Obama defended his administration's record toward business while simultaneously deriding his critics as being politically motivated and saying he would work "setting a better tone" in Washington.

""I know how frustrated people. I know in some cases how desperate people are," he said, later adding, "I am confident that if we stay on course that gets us back to old-fashioned values of hard work and responsiblity and looking out for one another, that America will thrive."

"The president spoke just as the National Bureau of Economic Research proclaimed an end to the recession. But Obama acknowledged that times are still tough.

""Obviously for the millions of people still out of work, people who have seen their home values decline, people struggling to pay their home bills every day, it's still very real for them," Obama said.

"The audience also includes college students and union leaders, small business owners and retirees.

"...."My life, I'm testimony to the American Dream. Everything I've been doing since I came into office is to make sure that American dream continues for future generations," Obama said. "The challenge now is I'm thinking about the next generation and there are a lot of people out there thinking about the next election."" [The article continues.]

A lot of people thinking about the next election? Like yourself, Mr. President?

He claims he's "testimony to the American Dream" which he wants to make sure continues for future generations. So the American Dream these days is to receive endless subsidies and preferred treatments from the government based on anything from race, ethnicity, gender, union membership, income level, what have you, to breeze through top Ivy-league schools without worrying about paying back student loans for decades, and not to work a single day in the real world.

OK, I'm all for it. Sounds good.

How are you going to pay for that, Mr. President? Out of your own multi-million dollar pocket?

The American Dream as I've understood is more like him - "Up by the bootstraps". I guess I'm too old-fashioned.

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The Ruling Class on the Run

Fun to watch.

Here's Lew Rockwell's take on the hysterical Jacob Weisberg.

Here's Pat Buchanan's take on Karl Rove and GOP establishment.

And here's the thin-skinned Barack Obama's plan for the Tea Party (as if there is a single monolithic party...) to help Democratic candidates. How? By painting them as "extremist". (From Obama's position, anyone else would be "right" and "extremist".)

But it does get Larry Kudlow giddy with renewed hope that this is a revolution that will bring back American entrepreneurship and it is bullish for the economy and the stock market.

Have you read the paper by Angelo Codevilla yet? It's for the rest of us, unless you are a ruling-class wannabe.

And if you want "radical" and "extreme", here's Lew Rockwell's plan for total makeover of the US in 30 days.

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Dem's Line of Attack on Boehner May Well Backfire

Democrats are getting frantic by the day as the November election approaches.

From the President on down, the Democratic political and media establishments are getting in gear attacking the GOP Minority Leader John Boehner. They insinuate Boehner gets his tan in a tanning salon, they say he plays golf a lot (uh huh, Mr. President), he spend a lot on vacation (uh huh, Mrs. Obama), that he is a rich elite in the pocket of the lobbyists (uh huh, Mr. President).

Well, they seem to have picked a wrong guy.

John Boehner: the second of 12 kids from Ohio who is Barack Obama's elitist target (9/17/2010 Telegraph UK)

"The White House is attempting to cling on to Democratic control of Washington by portraying an Ohio congressman who grew up in near poverty as an elitist country club Republican controlled by wealthy lobbyists.

"President Barack Obama is doing his best to turn Representative John Boehner, the House minority leader, into Public Enemy Number One. If Republicans win back the House of Representatives in November, as polls indicate, he will replace Nancy Pelosi as Speaker of the House.

"In a recent speech, Mr Obama mentioned Mr Boehner by name nine times. A fundraising email sent out from BarackObama.com this week stated that corporate interests and lobbyists “have put all their chips on one man: Congressman John Boehner”.

"Democrats have started a BeatBoehner.com website that claims he spent $1 million on "luxury hotels, exclusive golf resorts and gourmet dining for himself and his fat-cat contributors". On the I-75 freeway outside Cincinnati, a huge poster showing a tanned Mr Boehner playing golf accuses him of teeing off 119 times in a year.

"Yet Mr Boehner's life story is the type of classic up-by-the-bootstraps tale of the American Dream that can put a tear in a voter's eye. As his story becomes better known, the Democrats could even be drawing favourable attention upon him. Right now, most Americans have never heard of Mr Boehner, and fewer still can pronounce his name, which rhymes with Rayner. The alleged elitist country club Republican is an Ohio Congressman who grew up in near poverty.

"... Mr Boehner, 61, is the second of 12 who grew up in a German-Irish family in Reading, Ohio, just outside Cincinnati. All but two of them still live within a few miles of each other. Two are unemployed and most of the others have blue-collar jobs.

"The future Congressman started work as a janitor and took seven years to get his degree – the first in the family to do so – because he had several jobs to pay his way. He joined a plastics and packaging company, rising to president before entering local politics by being elected to the town board.

"The family house on Hill Street initially had two bedrooms with Mr Boehner and three brothers sleeping in one, their sister in another and their parents on a pull-out bed in the living room. Their father Earl later built a three-bedroom extension.

"...Mr Boehner's deep tan is often mocked by Democrats. At a dinner last year, Mr Obama said: "He is a person of colour, although not a colour that appears in the natural world."

"Like Mr Obama, Mr Boehner is a keen golfer and a smoker. His sister sniggered at the suggestion her brother might ever have been on a tanning bed. The "dark hair and olive skin", she said, came from her mother.

"Bob Boehner, 62, the oldest of the 12, who sells real estate and is "looking for work", said: "We were conservative because we had to be. There wasn't the money to spend frivolously on things. We grew our own vegetables up on the hill. We learned early on that if you wanted something you had to go out and work for it." [The article continues.]

"Up by the bootstraps" is exactly the concept that Barack Obama as the Democratic presidential nominee openly scoffed at in the nomination acceptance speech.

I also happen to remember President Obama trying to portray his days in Indonesia as "poor", a blatant misrepresentation as his stepfather was a rich man providing well for his family and enrolling Obama in an upscale private school.

And now he is mocking and attacking a self-made man who rose from near poverty by his own hard work in the real world as an elite with a fake tan?

What a childish line of attack that is. Kindergarten level. Someone at the White House didn't do his/her homework very well.

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Elizabeth Warren to Be Obama's New Czar

That's the last person whom I expected to join Obama's cadre of czars, but there she is, quite happily, it sounds like.

Elizabeth Warren gets the job of shaping the Consumer Financial Protection Bureau she first proposed (9/17/2010 Cleveland.com)

But her capacity is not that of the bureau director, which requires the formal nomination and the Senate confirmation. Instead, she has become one of Obama's czars:

"the White House is naming Warren an assistant to the President and special advisor to Treasury Secretary Timothy Geithner"

Assistant to the Prez? Special advisor to Timmy?

The Obama White House didn't even try to formally nominate her or make a recess appointment. Instead, Obama has named her as his assistant, personally responsible to him only, to shape this agency which is supposed to protect consumer (hahahahaha).

I am not sure if this nebulous, sprawling financial reform law (Dodd-Frank bill) even allows the White House to shape the agency like this. (By the way, this agency is to be housed within the Federal Reserve, a private entity which is now known for wrecking havoc by causing boom and bust throughout its existence. Isn't that comforting.)

Ms. Warren, welcome to my list of Obama Czars. I am disappointed, but not surprised. After all, a Harvard Law professor who believes in the power and authority of the government to "do the right thing" is expected to happily work with the government. When this agency fails to "protect", she and her cohorts have this timeless excuse to make: "Oh we meant well.... Who could have known?"

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City Controller of Los Angeles: $111 Million Stimulus Saved 55 Jobs

Wendy Greuel, City Controller of Los Angeles writes for Huffington Post:

Los Angeles Shows $111 Million in ARRA Grants Has Only Created 55 Jobs (Wendy Greuel, 9/16/2010 Huffington Post)

"I released two very disappointing audits today of how the City of Los Angeles has used American Recovery and Reinvestment Act (ARRA) funds. The audits looked at the how the two departments that have received the largest amount of ARRA funding so far - the Department of Transportation (LADOT) and the Department of Public Works (DPW) - have used those funds and how many jobs were created. Los Angeles has become the largest City in America to conduct an audit of how ARRA funds have been expended.

"DPW has received $70.65 million and created or retained 45.46 jobs, though they are expected to create 238 jobs overall (the fraction of a job created or retained correlates to the number of actual hours works). LADOT has been awarded $40.8 million and created or retained 9 jobs, though they are expected to create 26 jobs overall. Overall, the Departments have received $111 million in federal stimulus funds out of the $594 million the City has been awarded so far and created or retained 54.46 jobs.

"I'm disappointed that we've only created or retained 55 jobs after receiving $111 million in ARRA funds. With our local unemployment rate over 12% we need to do a better job cutting the red tape and putting Angelenos back to work." [Emphasis is mine. The article continues.]

Even at a liberal/progressive bastion like Huffington Post, the readers' comment section is getting sharper and better than the main article. Here are some of the posts:

See, this just goes to prove that Paul Krugman is right -- if the stimulus had been several trillion dollars, we could easily have created a couple hundred jobs in Los Angeles. Maybe even 250! And then, man, we're on the road to recovery.

Only government can give you value for money like that.

I am not sure what is more astounding - that $111,000,000 only created 55 jobs or that spending $420,000 per job to get the 264 anticipated would have been considered a success.

There's a reason why people go into public service. It's because there's no way in hell they would survive in private enterprise.

they would probably be better off if they just paid 2000+ people 50k for a year to do nothing.

What Ms. Greuel would never admit but is crystal clear to everyone else outside any government: government ISN'T the answer. It never was, it never will be.

(h/t jdgreger)

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Bank of Japan Intervention Sends Yen Back to Last Friday's Level

well, ever slightly above but not by much.

Still, Nikkei celebrates by reversing almost 300 points.

According to Nikkei Shinbun newspaper, the intervention was ordered by the Finance Minister at 10:30 AM Japan Standard Time, and Bank of Japan carried out the operation of dumping yen at 10:35 AM.

Wanna bet how long will this last?

Unlike the privately-owned Federal Reserve, Bank of Japan is 55% owned by the government. Unlike the Fed, the shares of Bank of Japan is traded on a stock exchange (Jasdaq Securities Exchange).

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All That Glitters - Gold Breaks Out

from Kitco.com...



In the meantime, algo bots that have reduced the US stock market to a joke seem to be moving into the commodities market. For more, read "CME Says Test Orders Were `Inadvertently' Made in Energy, Metals Markets" (9/14/2010 Bloomberg)

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Japan's DPJ to Elect Next Leader

in about hour and a half (2:00 PM Japan Time).

Naoto Kan (current Prime Minister after Hatoyama resigned) vs Ichiro Ozawa (the king maker). For stronger leadership, Ozawa would be a better choice for Japan. Probably more realistic than Kan or Hatoyama, who tried his best to ape Obama policies.

For forex traders and the US equity market traders, Ozawa would be better, as he is very likely to intervene in the currency market to (try to) stop the rapid appreciation of yen.

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September 11, 2001

On this day, I'll remember all the people who perished on that fateful day 9 years ago in the World Trade Center buildings, fire fighters and policemen and volunteers who tried to save as many people as possible, and the families who lost their loved ones.

It should never have been about:

Koran burning,

Islam vs Christianity,

Ground-Zero mosque,

all of which seem to have been quickly foisted upon us just in time so that we forget what the day was about. It all started to accelerate when President Obama suddenly decided to speak out in favor of the Ground-Zero mosque/community center, citing, of all things, the US Constitution. Wag the dog.

It was the day that America as we knew died. Much like September 2008 when the financial system - lifeblood of a free market and thus of a free society - died. In a way, September 2008 financial market collapse was long-time coming; it was inevitable after the country had "died" seven years prior. For both deaths, we still don't know how they happened; hastily enacted measures have most likely made things worse, be it the Patriot Act, or the doubling of the Federal Reserve balance sheet and market intervention.

Instead of burning Koran, why don't they burn the symbol of oppression in the United States - the Patriot Act which was pressed on us immediately after 9/11 and which keeps on taking away our rights?

(Who is this pastor who wanted to burn Koran, anyway?)

To a small faction of the Christian opponents of the Ground Zero mosque who are confusing the radical Islam with the far more moderate form of Islam as practiced in many parts of the world (Indonesia and Malaysia come to mind as an excellent example - and they are smart too, for using gold coins): Do you know that the Koran venerates Jesus Christ?

And as for this Sufi imam who picked that site as his mosque/community center precisely because it is only two blocks away from the Ground Zero, as alleged by this blogger at Forbes, is it OK for him to be overtly provocative and insensitive just because he is a Muslim? (Or just because the US is occupying the Muslim countries?) Does it bother anyone that he is a regular at Davos meetings (World Economic Forum) and that his trips to Middle East have been paid for by the US government? A total insider approved by PTB (power that be)?

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Obama's War in Afghanistan

It feels more and more like a cross between Apocalypse Now and Lord of the Flies.

Twelve U.S. soldiers face trial after Afghan civilians 'were killed for sport and their fingers collected as trophies' (9/10/2010 Mail Online)

"A dozen US soldiers are facing trail accused of being part of a 'kill team' that allegedly killed Afghan civilians in an arbitrary fashion - and they even collected their victims' fingers as trophies of war.

"Five soldiers have been charged with the killing three Afghan men 'for sport'. And seven more are accused of covering up the murders.

"In one of the most serious accusations of war crimes to come out of the Afghan war, the deaths are alleged to have been carried out by members of a Stryker infantry brigade based in Kandahar province, southern Afghanistan.

"But the father of one of the five accused of murder said today he tried to warn the Army that troops in his son's unit had killed civilians.

"By the time suspects were arrested in May, two more Afghans were dead.

"Christopher Winfield said his son Adam, 22, was so disgusted after the first killing that he sent Facebook messages home asking for help.

"Winfield called the Army and a military hot line asking officials to investigate - to no avail." [The article continues.]

Well, who needs Wikileaks to see the Afghan war for what it is?

What Obama is doing in Afghanistan, aside from killing Afghan civilians in the name of ... why are we there anyway? ... is to kill and maim the young Americans, both physically and psychologically.

Winfield's son says the following in the article:

'There are no more good men left here. It eats away at my conscience everyday.'

Will the Commander in Chief be playing yet another round of golf this weekend? Just curious...

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a currency = a yield = a commodity index = a unicorn = energy = healthcare = technology = a rat’s ass

a strange world of what used to be a market, where everything and anything is now correlated positively to everything and anything.

From a guest post @ Zero Hedge:

From John Lohman

"A hedge fund manager/friend of mine recently described forces driving the market as “barely manned scrip cannons.” Unfortunately, I believe it’s a fairly accurate description of the HFT-ETF-Algo driven cluster that used to be a market for financial assets. Individual investors have lost confidence, voted with their feet, and left us with a single asset. It comes with a put option underwritten by the federal government and its value fluctuates in response to barely manned scrip cannons.

"For perspective on how this is impacting macro markets, consider the chart below. It plots the average one year rolling correlation of various markets with the S&P 500 Index. In short, a currency = a yield = a commodity index = a unicorn, etc. Completely different assets with completely different cash flow streams and terminal values are apparently fungible.

"This phenomenon can also be seen within the equity market. Zero Hedge has pointed out the absurdity of the level of implied correlations several times. This chart from Barclays provides some context. As shown, the trailing one month cross-sectional correlation for the largest 1,000 stocks averaged roughly 20% for the last half of the 20th century. The remaining variance in prices would be explained by the fundamental factors within each sector, industry, and firm.

"But in today’s environment, idiosyncratic risk doesn’t exist. As implied correlations asymptotically approach 100%, energy = healthcare = technology = a rat’s ass, etc.

"This is the unfortunate result of markets where governments and central banks try to truncate risk and algos determine marginal prices based on short-term patterns. In the real economy, price signals have become distorted, thus causing capital to be inefficiently allocated. In the financial economy, the environment has become riskier than ever. The farther prices are pushed away from their true underlying value, the greater the adjustment will be. And one thing the algos don’t do - adjust slowly."

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CBOE Wants Daily Expiring Options??

They already have Weeklys (options that expire weekly) on major indices and select stocks, which may have caused the range-bound market since June, when the Weeklys for individual stocks and some sector ETFs were first introduced.

Now they want Dailys. The US financial markets are on the solid track to self-destruct by becoming nothing but a casino for traders, not the place for price discovery.

By the way, CBOE is set to introduce Weekly options on VIX futures later this month, too. So now the market volatility will be range-bound forever.

What's next? Hourly options? How about Second options for algo bots? Since they can stuff 5,000 quotes in one second, that's enough duration to trade volatility for them, isn't it?

The market's dead, long live the dead market!

From Dow Jones Newswires:

"The country's biggest options-trading venue wants regulators' permission to list options that expire in as little as a day.

"If approved, CBOE Holdings Inc.'s (CBOE) Chicago Board Options Exchange would be the first U.S. exchange to offer options contracts that expire so quickly. The most heavily traded U.S. options are structured around monthly time frames. The proposed new ones have time frames ranging from one to four days.

"CBOE called the idea "a flexible and valuable tool to manage risk exposure, minimize capital outlays, and be more responsive to the timing of events" in a filing with the Securities & Exchange Commission dated Aug. 24. A CBOE spokeswoman had no further comment on Friday.

"The move, first reported by Bloomberg News, reflects the push for ever-shorter trading horizons, as well as exchanges' competition to lure customers." [The article continues.]

(h/t liveup, again)

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Google's Sergey Brin Wants "Third Half" of Our Brain

Huh? It doesn't add up, does it? Or are there the fourth half and fifth half, too? I'm confused.

Sergey Brin: "We Want Google To Be The Third Half Of Your Brain."
(Jay Yarow, 9/8/2010 Business Insider)

"Sergey Brin wants Google to become the "third half of your brain."

"That's what he said at today's big search event, where Google released Google Instant, its fast, streaming search results.

"We're not exactly certain what Brin meant, but we think he was trying to say Google will know what you want in a search, perhaps even before you know." [Emphasis is mine.]

So, the recent comment from Google's CEO Eric Schmidt does indicate the direction that Google is taking. Schmidt said "I actually think most people don't want Google to answer their questions. They want Google to tell them what they should be doing next." (For more, read my post in August.)

I was hoping that the Google founders were somehow different from the CEO and that "Don't be evil" still meant paramount for them. I guess I was naive, after all these years.

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Lewrockwell.com Under Attack

Please read the article linked below, and donate to help them survive.

LRC Under Attack (Llewellyn H. Rockwell, Jr., 9/7/2010 Lewrockwell.com)

"...This summer, however, there were two new assaults, which cost a lot of money to fix. The first was an attack on LRC’s small donation system, resulting in thousands of phony gifts that outraged the poor people whose names were used, and their card-issuers. We fixed it, and have prevented such a hate-scam in the future, but it was costly.

"At the same time, we were caught in the crosshairs of the copyright snipers. All of a sudden, thanks to a giant, Obama-connected law firm, what had been legal "fair use" on the Internet became a crime. We were threatened by huge fines and the obliteration of the LewRockwell.com URL. But that wouldn’t have been necessary. The fines would have taken care of us." [Emphasis is mine.]

Now that sounds like the same attack that has been launched against the GOP Senate candidate of Nevada, Sharron Angle, by Righthaven LLC, who is seeking "damages of $150,000 against Angle personally and forfeiture of her website domain name sharronangle.com", according to Las Vegas Sun.

I don't know if the law firm that attacked Lewrockwell.com was Righthaven LLC or not. There are other firms with the similar business model, which is "to buy the copyrights to newspaper content and then turn around and sue bloggers for copyright infringement." For more, read this blog. (The link also has the list of newspapers using the "services" of Righthaven LLC.)

As to the Righthaven connection to the Obamas, check here.

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'Nuther Party at the White House by Michelle "Antoinette" Obama

It's a dance party tonight.

Michelle Obama hosts first White House dance event (9/7/2010 AP via Yahoo News)

"WASHINGTON – The stately White House East Room, home to many a bill signing and ceremonial gathering, becomes a stage Tuesday for pirouettes, jetes, gravity-defying leaps and maybe even some bumps and grinds as Michelle Obama inaugurates a new dance series.

"Dancers of all types — ballet, modern, hip hop and Broadway — take over the room, first for an afternoon workshop, during which students from around the country will have the chance to work with some of the biggest names in dance.

"Then, after a short break, the students return to see their mentors perform in an hour-long, star-studded show. Even Broadway's young "Billy Elliot" will be there — four Billys actually, from the show's rotating cast." [The article continues.]

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Fed's Last Bullet May Be "Golden"

Now why didn't I think of that...?

Ben Bernanke's last bullet: drive up the price of gold and create an inflation expectation (or perception) so that people are scared into spending fiat money (US dollar) fast.

Here's the "golden bullet" part of the article from Zero Hedge:

Jim Rickards Tells His Clients To Get Out Of Stocks And Discusses The Fed's Final "Golden" Bullet (9/6/2010 Zero Hedge)

[From the interview of Jim Richards, Senior Managing Director for Market Intelligence at Omnis, Inc., with Eric King of King World News. Emphasis is mine.]

If you're worried about deflation and you want to cause inflation and you're printing money as fast as you can and the inflation is not happening, at some point you have to stop and ask yourself well what else can I do? Well the answer is that you can severely devalue the dollar against gold...So the Fed wakes up one day and as fiscal agent for the Treasury, we're a buyer at $1,495 and we are a seller at $1,505, and that represents a 20% depreciation in the value of the dollar.

You have to scare the American people into spending money. Right now the American people are more afraid of not having money, they are not afraid of inflation, but if you make them afraid, they will go out and start spending. So what better way than to devalue the dollar 20% against gold, and the way to do that is through open market operations...Well if that happens to be $2,000 an ounce what have you done? You've depreciated the dollar by not quite 50%. Well that's pretty powerful stuff if you are trying to get people to spend money and dump dollars. So they are not out of bullets, they have what I call the golden bullet...They have that kind of ace in the hole if they really want to trash the dollar.

(The whole interview is here.)

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Obama Calls for $50 Billion Infrastructure Stimulus and "Permanent Infrastructure Bank"

Infrastructure bank? Be wary. Very, very wary.

Obama calling for more infrastructure spending
(Julie Pace, 9/6/2010 AP via My Way News)

"WASHINGTON (AP) - Vowing to find new ways to stimulate the sputtering economy, President Barack Obama will call for long-term investments in the nation's roads, railways and runways that would cost at least $50 billion.

"The infrastructure investments are one part of a package of targeted proposals the White House is expected to announce in hopes of jump-starting the economy ahead of the November election. Obama will outline the infrastructure proposal Monday at a Labor Day event in Milwaukee.

"While the proposal calls for investments over six years, the White House said spending would be front-loaded with an initial $50 billion to help create jobs in the near future.

"The goals of the infrastructure plan include: rebuilding 150,000 miles of roads; constructing and maintaining 4,000 miles of railways, enough to go coast-to-coast; and rehabilitating or reconstructing 150 miles of airport runways, while also installing a new air navigation system designed to reduce travel times and delays.

"Obama will also call for the creation of a permanent infrastructure bank that would focus on funding national and regional infrastructure projects.

"Administration officials wouldn't say what the total cost of the infrastructure investments would be, but did say the initial $50 billion represents a significant percentage. Officials said the White House would consider closing a number of special tax breaks for oil and gas companies to pay for the proposal." [Emphasis is mine. The article continues.]

Hahahahahahahahahaha.....

So they don't even tell us how much the total cost would be, other than this initial $50 billion which "represents a significant percentage". What is a significant percentage for this administration? 5%? 10%?

And he wants to do it by penalizing the particular industry that he probably believes the sheeple of the United States will be happy to see penalized - the oil industry, because of the Gulf of Mexico oil spill (I'm guessing).

But I find the mention of "a permanent infrastructure bank" very peculiar. Maybe I'm paranoid, but I suspect the whole point of this "stimulus" exercise is to set up this bank, and I don't like the smell of it.

The White House fact sheet says this:

Infrastructure Bank. The President proposes to fund a permanent infrastructure bank. This bank would leverage private and state and local capital to invest in projects that are most critical to our economic progress. This marks an important departure from the federal government’s traditional way of spending on infrastructure through earmarks and formula-based grants that are allocated more by geography and politics than demonstrated value. Instead, the Bank will base its investment decisions on clear analytical measures of performance, competing projects against each other to determine which will produce the greatest return for American taxpayers.

Hmmmm. My questions:

1. So, instead of giving money to the states outright, is this bank going to make loans, with the infrastructure to be built as collateral?

2. Who's going to run the bank? Bernanke? Geithner? Goldman Sachs? Pimco? All of them? (Oh sorry, Morgan Stanley, too, now that the Chinese have more stake in the firm..)

3. Who's going to decide the loan terms and "clear analytical measures of performance"? Bernanke? Geithner? Goldman Sachs? Pimco? Obama? Congress? All of them?

(How are they going to measure the performance of asphalt pavement?)

4. Who's going to decide what is "most critical to our economic progress"? How is "critical" defined, and by whom? How is "progress" defined, and by whom?

5. "Leverage"? How? Will it be like Geithner's PPIP (remember that one?), where the taxpayers pay for 90% of the loan and 10% by the private investors, and the private investors take the upside? Will the investors set to collect fees, tolls etc. from the funded projects in exchange for the "risk" they take in participating? Or worse, if a state defaults on the loan, the taxpayer-funded portion of the loan will be non-recourse, and the private investors will get the collateral (infrastructure)? Is this bank a clever ploy to transfer public assets into private hands selected by the government?

6. Is this bank going to securitize the loans and/or create more leveraged instruments like CDOs to sell to investors? Will the initial $50 billion be leveraged 5 times? 10 times? 20 times? 50 times? Who will be responsible when the leverage blows up? (Answer: hapless US taxpayers.)

(I can see a whole set of leveraged instruments out of this bank - CDOs, CDS, interest rate swaps, the usual suspects. Except this time, it will not be Wall Street banks creating and selling them; it will be the US government in cahoots with private investors who will probably include Wall Street banks but not limited to them.)

7. Do you smell a new financial bubble? Is it all nice and dandy if your government does the blowing?

The Third Reich's leaders would be proud.

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Belgium About to Break Up?

This blog has already reported on a potential breakup of Belgium back in June. Dutch-speaking Flanders are sick and tired of subsidizing the socialist programs in the French-speaking Wallonia. Now, French-speaking Socialists in Wallonia are almost resigned to the breakup of their nation. If that happens, that has to be the first in post World World War II Europe.

End of a nation? ‘Get ready for the break-up of Belgium’
(9/5/2010 AFP via Raw Story)

"BRUSSELS — A top Belgian politician warned the country's citizens on Sunday to "get ready for the break-up of Belgium," as King Albert II seeks to relaunch knife-edge coalition talks.

"Leading francophone Socialist Laurette Onkelinx, considered a potential successor to party chief Elio Di Rupo, who gave up on negotiations with separatist Flemish leaders on Friday, gave her prognosis in a newspaper interview.

""Let's hope it doesn't come to that because if we split, it will be the weakest who will pay the heaviest price," she told La Derniere Heure. "On the other hand, we can no longer ignore that among a large part of the Flemish population, it's their wish.

""So yes, we have to get ready for the break-up of Belgium. Otherwise we're cooked."

"... The stark comments from Onkelinx followed those of another leading francophone Socialist, Philippe Moureaux, who has said Belgium was on the verge of a "progressive organization of separation."

"Formerly taboo among the poorer francophone parts of Belgium, the prospect of going it alone is no longer considered so -- with a third senior official, the head of the Wallonia state government, Rudy Demotte, also telling RTBF radio that "all options" are now open.

"Demotte added that Wallonia and the capital region of Brussels, the third federal state and increasingly the focus of arguments about financial settlements, had the wherewithal "to see what we can do ourselves without waiting for tomorrow."

"While located within Flanders' borders, Brussels is officially bi-lingual, although recent studies have shown accelerating numbers of registered French speakers, including the nearly one-in-three who hail from abroad.

"Tens of thousands of Flemish people, meanwhile, took part on Sunday in an annual demonstration which consists in symbolically "encircling" Brussels by bike or on foot, to remind locals that they are surrounded by Flanders."

(h/t berniemade_off)

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OT: Tarp Surfing (Only in Santa Cruz...)

Proudly presented by Tarpsurfing.com ...

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