The great interest rate rip off part 1

[interestrateripoff]

US Fed turns taps back on with $600bn package of QE

 

Central bank to pump $75bn a month into the markets to stimulate economy

 

• FTSE 100 reaches a two-year high
  
• Morrisons sales show modest rise
  
• Northern Rock boss Gary Hoffman steps down
  
• Redrow chairman criticises 'mortgage famine'
  
• Interest rates held at 0.5%
  
• Blow to BT pension scheme members
  
• New car sales fall
  

 

David Prosser: Murdoch is not blinking in the battle for Sky – nor should Vince Cable

 

Outlook: It would be remarkable if the Business Secretary did not ask Ofcom to investigate adeal that has the potential to transform the British media

 

• David Prosser: The banks are recovering but at borrowers' expense
  
• Stephen Foley: Oil major feels the benefit as crude prices surge after Opec speaks out
  
• David Prosser: The MPC prepares to do battle once more
  
• David Prosser: Sky is the key for 'The Times' online
  
• David Prosser: Don't blame Serco for seeking toprotect its margins
  

 

Rapha cashes in on classy clobber for the chain gang

 

Simon Mottram was so fed up with the quality of cycling clothing he set up his own businesss to do better. David Prosser reports

 

• The business on: Frederic Oudea, Chief executive, Société Générale
  
• Man Group - Interim results, video interview with CEO Peter Clarke
  
• Protest at Anglo's Alaskan quest
  
• Murdoch prepares to lock horns with cable
  
• The business on: Irving Picard, Trustee, Bernard Madoff Investment Securities
  

[interestrateripoff]

Needs of Czech Uranium Mining Town Mitigate Its Worries

 

By JAMES KANTER 3:00 PM ET

 

 

While there are acknowledged dangers from pollution and waste in Straz Pod Ralskem in the Czech Republic, some people there say there are benefits to reopening the uranium mine and it is inevitable.

 

 

 

Gordon Welters for The International Herald Tribune

 

Anticipation that demand for nuclear energy will keep growing have rekindled interest in old uranium mines in the Czech Republic, despite environmental concerns.

 

 

 

 

 

 

DealBook

 

Citigroup Prevails in Lawsuit Over EMI Deal

 

By PETER LATTMAN 54 minutes ago

 

In a stinging blow to the British financier Guy Hands, a jury has cleared Citigroup of any wrongdoing over its role in the sale of EMI Group, the ailing music company.

 

Obama to Visit India, and Both Sides Hope to Expand Business Ties

 

By VIKAS BAJAJ and HEATHER TIMMONS 1:59 PM ET

 

More than 200 company executives will accompany the president and try to strengthen the countries’ common economic ties.

 

Retailers Tally a Mixed October as Sales Rose 1.6%

 

By STEPHANIE CLIFFORD 2:47 PM ET

 

Varied results last month made it difficult to foresee how the holiday shopping season would turn out.

 

6 Companies to Pay $236 Million to Settle Bribery Inquiry

 

By REUTERS 42 minutes ago

 

The companies were accused of paying at least $27 million in bribes to officials in at least seven countries from 2002 to 2007.

 

Wall Street Jumps a Day After Fed Decision

 

By CHRISTINE HAUSER 11 minutes ago

 

Equity indexes have been buoyed by the Fed’s plan to buy an additional $600 billion of assets over the next eight months.

 

• Fed to Spend $600 Billion to Speed Up Recovery
  
• Worker Productivity Rebounded in 3rd Quarter
  
• India’s Stock Index Closes at a Record High
  

 

Emerging-Market Countries Criticize Fed Decision

 

By BETTINA WASSENER 12:50 PM ET

 

Policy makers fear that the Federal Reserve’s new measures could increase the flood of cash into their fast-growing economies.

 

European Central Bank Keeps Rates at Record Lows

 

By JULIA WERDIGIER 9:35 AM ET

 

The Bank of England also decided against new stimulus measures after data showed that Britain’s recovery was displaying some resilience.

 

E.U. to Overhaul Web Privacy Rules

 

By ERIC PFANNER 12:20 PM ET

 

An E.U. commissioner said that breaches involving Facebook and Google illustrated the need for new regulations.

 

Qantas Halts A380 Flights After Engine Explosion

 

By KEVIN DREW and NICOLA CLARK 1:32 PM ET

 

The company made the move after an A380 was forced into an emergency landing on Thursday because of an engine explosion.

 

• Slide Show
  

 

Green Blog

 

Offshore Drilling Ban Lawsuit Dismissed

 

By JOHN M. BRODER

 

The lifting of the Obama administration's deepwater drilling moratorium last month makes a judge's ban moot.

 

DealBook

 

Wall Street Gets Its Groove Back

 

By SUSANNE CRAIG

 

Wall Street bonuses will be up this year, according to a study to be released on Thursday by a Wall Street compensation expert, Alan Johnson.

 

Alcatel Lucent Sees 'Turning Point' After Deals in U.S. and China

 

By KEVIN J. O'BRIEN 9:40 AM ET

 

The company announced its first quarterly profit of the year and $5.7 billion in deals to build high-speed wireless networks and supply other gear.

 

 

 

• BNP Paribas Profit Beats Expectations 12:00 PM ET
  
• Genentech Offers Secret Rebates for Eye Drug
  
• U.K. to Investigate News Corp. Takeover of BSkyB 10:35 AM ET
  
• General Motors Can Fly Again for Stock Sale
  

[interestrateripoff]

[/url]

 

Doubts grow over wisdom of Ben Bernanke 'super-put'

 

The early verdict is in on the Fed's $600bn of fresh money through QE. Yields on 30-year Treasury bonds jumped 20 basis points to 4.07pc.

Fed stimulus triggers global stock market rally, dollar slide

 

 

 

Bank of England resists more QE, holds rates

 

The Bank of England has left interest rates unchanged at 0.5pc and will not restart its money-printing programme this month.

Osborne: More money could be printed next year

 

 

 

Rolls-Royce shares hit by A380 engine failure

 

The aero-engine maker and Airbus's parent suffered sharp share price falls after Qantas grounded its A380 fleet.

 

Immigration cap risks becoming 'empty political gesture'

 

 

 

 

Revealed: UK towns with the worst job prospects

 

 

 

 

News Corp bid for BSkyB a 'chilling prospect', say peers

 

 

 

 

Chancellor's 2011 Budget set for March 23

 

 

• Is the Dow right to be in such celebratory mood? Me thinks not
  

 

• Ireland is running out of time
  

 

 

• The golden mechanic: motorists' costs overtake inflation
  

 

Osborne: More money could be printed next year

 

 

 

UK diplomatic corps appoints ISS to manage properties in austerity drive

 

 

 

 

Innovation is the secret of economic success

 

 

 

 

Fed prints another $600bn to keep US recovery on track

 

 

 

 

Fed's $600bn gamble risks throwing away America's biggest asset

[interestrateripoff]

America's Alarm Clock Has Rung: Time's Up

 

Here's the deal folks.

The banksters asset-stripped the public. Twice. The first time in the 1990s with the Internet bubble, the second time in houses. If you bought a home from 2003 onward you got screwed. It doesn't matter if you were a good borrower or not - you overpaid. American business was also asset-stripped. We covered this by shipping our labor off to China, India and Vietnam.

During the last part of the 2000 decade, the Federal Reserve, Bank Regulators, Government and the Banks themselves were all in on it. We know this. We know it because Citibank's former Chief Underwriter has testified to it under oath. It is not speculation or mathematics, it is admitted fact.This was an intentional, malicious act that involved government and finance. Your "representatives" didn't represent you, they represented the banks. They acted as guards not of your wealth, but instead they held you at gunpoint while the bank robbed you. This is the proximate cause of the market and economic collapse - your productive wealth was literally stolen through these frauds.

Now they're at it again. First, Ben Bernanke imposed, without a vote, a tax on the American People of over $1 trillion through his original "QE " game. This went immediately into commodity and stock prices worldwide but was in fact a tax on you, and on every productive business. This is the reason that unemployment remains at close to 10%. By now we should be well on our way to recovery. The government blew $600 billion on stimulus programs. They got nothing for it because of QE, which took it all back out, plus more through the tax - a tax that went directly into the bankers pockets. This unlawfully-imposed tax was used to cover the banks' insolvencies, along with the blatant extortion practiced by Rep. Kanjorski on FASB (who, incidentally, lost his seat Tuesday.) But the banks did not clear their balance sheets - they are, in fact, still insolvent. Instead, they literally took the money and paid it in bonuses.

Now that the banks are once again running out of money Ben Bernanke is at it again. He has announced another $600 billion in illegal taxation on America, and intends to give it again to the bankers. A good part of it already showed up in oil and other commodities. The rest of it will. It is guaranteed. The "benefit" will go overseas. The tax will fall on you.

THIS IS THE LARGEST TAX EVER IMPOSED ON THE AMERICAN PEOPLE IN THE HISTORY OF THE NATION. IT IS MORE THAN FOURTEEN TIMES THE BUSH TAX CUTS "ON THE RICH" THAT EVERYONE IS DEBATING. GOLDMAN SACHS BELIEVES THAT BERNANKE WILL IMPOSE A TOTAL TAX THROUGH QUANTITATIVE EASING OF MORE THAN FOUR TRILLION DOLLARS OVER THE NEXT TWO YEARS, OR MORE THAN FIFTY SEVEN TIMES THE BUSH TAX CUTS.

If you, America, do not rise and stop this NOW you're all going to be effectively dead economically.

Your assets will be stripped.

All of them.

Your homes.

Your businesses.

Your savings - as if having the earnings you can receive on a safe CD cut from 5% to 0.5% isn't bad enough.

And, when the inevitable margin collapse comes in the corporate sector, your stock portfolio will detonate again and your pension funds, Medicare, Medicaid and Social Security will be gone.

Either you rise and stop Bernanke and The Fed, or he - and they - win - and we all lose.

There is no "individual path" that will keep your assets safe from this. There is no means to hide, so long as you're an American citizen and live in this nation.

We have two choices: we collectively stop this madness or we all get destroyed.

Those are the only choices.

For three years and change I have warned of this outcome. I have pointed out that there is three trillion dollars or more of losses that have to be taken in the economy.

Those losses should fall on the banksters who committed these acts. Doing so will cause these banks to be taken into receivership. They will have to be resolved.

Virtually none of those losses attributed to them have been taken by these institutions.

These losses have all fallen on you, through unemployment, through higher energy prices and higher prices at the grocery store. All of these are taxes that are being illegally imposed on you by a Central Banker who lacks the legal authority to impose a tax.

Yet he's doing it, and you're being told to cheer because the DOW is up 200 points.

I want to note that in 2007 I wrote a similar Ticker urging people to stop this bastard when he started interfering like this. You did nothing, because the S&P was headed to 1576 and the DOW over 14,000 on the back of his original "rate cuts" and other machinations. I was called all sorts of names, the kindest of which were "kook." You sat on your hands instead of rising to stop this crap and were repaid by watching your portfolio get cut by 60% in the next two years, two major banks blowing up in an uncontrolled fashion, and threats of tanks in the streets.

If you do not stop him - remove him from office - NOW - you will be destroyed.

That is a certainty.

We no longer have the "margin" to absorb another mistake like the last one. And this crap that is pulling now is the mother and father of all mistakes.

It's your choice America - but where this road leads is not open to debate. These institutions that robbed you can only survive the consequences of their acts by destroying you, and they are hellbent and determined to do exactly that, with Ben Bernanke as the man who is literally destroying not only your economic present, but that if the future as well for yourself and your children.

You no longer have the luxury of time.

 

Still the people have the recovery....

[interestrateripoff]

Bernanke's Folly: The End Game

 

Consider the following number:

9,069,879,047,803.52 That's the "marketable" debt - $9 trillion.

Here's The Fed's numbers in debt held, as of now, in billions:

834 - Treasuries

1,059 - Mortgages (at what embedded loss?)

150 - Agency (Fannie and Freddie) debt

There are some other things in here too, but that's the basics as of October 27th.

The Fed proposes to buy $600 billion of additional Treasuries, and at the same time roll off agency debt and mortgages, rolling that into Treasuries. Call the entire thing $800 billion.

So their balance sheet will look like this:

1,600 - Treasuries

959 - Mortgages

50 - Agency debt

Over time they expect the balance sheet to shift, so that the Treasuries are all that's there. This means they want it to look like:

2,700 - Treasuries

Yeah.

Now remember, as of right now, China holds $860 billion of Treasuries and Japan holds $836 billion. The UK is down at $400 billion and then Oil Exporters, at $226.

So once QE is done The Fed will own more than China and Japan combined, about 18% of the total.

Why is this a problem?

Simple: The purpose of issuing bonds into the market is to provide a putative check and balance on Treasury overspending. That is, at some point the continued issuance causes the bond market to revolt and refuse to buy, driving rates much higher. That in turn causes the interest expense to go to the moon.

This threat is the primary check and balance on an out-of-control Federal Government.

The "Chartalists" (and their useful idiots everywhere) claim that the Federal Government simply spends money into existence, and thus they can do this all they want. Well, technically true - you can print all the money you want. However, you cannot control it's value except through relative scarcity!

The Bond Market, rather than being a monetary tool as these people claim, is in fact a fiscal discipline enforcement device.

This is what The Fed with its QE and now QE2 has destroyed.

When Ben Bernanke said "we will not monetize the debt" what he was saying is that he would not permit that fiscal discipline device to be removed from the scales of financial balance. He lied - he not only removed it with QE1, he has now ratified that this discipline function will remain removed via QE2.

The problem with removal of this device of restraint is that fiscal discipline is in fact the only way one avoids imposing taxes on the public. Taxes come either in the form of a literal tax that must be paid or they are financed by causing an increase in the price of things denominated in a currency as a result of debasement.

Taxes inhibit business profits by diverting income from the business and to government. Therefore, in the general sense, the lower the tax rate the more business prospers. Of course taxes cannot be zero, because the government must have funding to perform its essential functions - we merely argue over what those essential functions are and how to pay for them.

QE is effectively naked emission of currency into the economy by government spending. It thus always results in shifting the price equilibrium on commodities in that currency to the right - that is, higher. At the same time since input costs are effectively a tax on production pressure downward is increased on wages. This in turn means that while cost pressures go upward, wages go downward.

Thus QE cannot spur employment. It in fact does the opposite by imposing an effective tax on business operations and consumers, which tends to drive down after-tax compensation of employees.

Ben Bernanke claims that QE is intended to "spur investment" by increasing the "wealth effect." But any such effect is in fact transitory, as one cannot support higher stock valuations while margins are being pressured. You need margin expansion to be able to support higher valuations over time, and that means you need either lower input costs, higher employee after-tax earnings or both.

Bernanke's policies are in fact pushing both of these factors the wrong direction.

But worse, consider the certain "death spiral" scenario on the path we are now traveling:

 

1. QE is an implicit tax on the population. Input costs go up. This is an effective tax increase on everyone in the country. A dollar increase in the price of gasoline is an effective $140 billion dollars a year in additional tax, as just part of the impact. Basic staples are already up about 10% annualized, despite Bernanke's claim of "no inflation." Note that the "tax on the rich" everyone is talking about is a mere $70 billion a year by comparison.
   
2. This in turn means lower disposable income for consumers. That in turn hits discretionary spending. And that, in turn, means companies don't need to hire people to provide discretionary goods and services. This is what Bernanke did with QE1. He in fact destroyed job creation, which is a big part of why we still have 10% unemployment! Bernanke CAUSED that unemployment by creating a price ramp in the commodity space!
   
3. This, in turn, means more demand for social programs. More unemployment. More Medicaid. More food stamps. More government spending of all sorts. But there is no tax revenue increase coming in to pay for these increased demands (it's all going to the commodity producers) so the government once again turns to the bond market and issues debt to fund this increased spending demand.
    
   
   
4. Left alone, the bond market will react to this "never-ending" deficit spending cycle by increasing rates in an attempt to cut it off. This in turn provokes The Fed into even more QE to "spur employment and increase asset prices."
   

See the problem? The more QE you do, the more jobs you destroy because you continue to trash margins through the imposition of an effective tax on the entire economic system.

Eventually The Fed ends up being, for all intents and purposes, the entire government bond market.

At that point the issuance of credit money is no longer backed by anything at all - it is simply emitted raw, and for every dollar emitted in this fashion you have both a 100% transmission into prices and a premium applied on your threat to do more of it.

That's Weimar Germany folks - it is exactly what happened there, and exactly what will happen here unless Bernanke stops this crap. Since he won't stop on his own volition it is up to Congress and the people to stop him.

Metals will not save you if this spiral occurs. Nothing will save you, other than not being in the nation that this happens to. Government will, in its last gasps of trying to prevent itself from being unable to pay the military, Congress, and of course Ben, find ways to literally confiscate everything in a futile attempt to increase the asset base upon which it issues its increasingly-worthless currency.

There is no exit that can come from a "growing" economy when you are continually increasing the implicit tax rates in the general economic system as your response to each previous tax increase. That is, when your tax increase results in more unemployment and you respond by further increasing taxes, you are simply tightening the noose around your own neck.

The implied tax that has been imposed on the economy thus far since QE1 was put in place is a stunning $250 billion annually due to oil's price increase alone, or nearly four times the so-called "Bush Tax Cuts" for the rich.QE2 will add another $1/gallon (roughly) to gasoline which is another $140 billion, for a total of almost $400 billion each and every year.

And that's just in oil prices - then you have to add in all the other input cost-push problems, from corn to wheat to oats to cotton to wood pulp. The total effective tax increase from QE2 is in fact the entire $600 billion QE package, plus whatever the market anticipates Ben will do as a follow-on!

What is being done here, if it is not stopped by Congress and/or the people, will destroy the economy. There is no ability to withdraw the QE-anything without causing all of the previously-hidden costs to immediately assert themselves in the economy. This is not speculative - it is factual. We cannot get wage inflation due to the lack of pricing power by labor in a market with 17% of the people either out of work or underemployed and another 7 million who are not counted as they are not part of the labor participation rate, which has declined by 5% in the last two years. The true unemployment rate is thus closer to 25%.

Without the ability to pressure wages higher there is no means available to set in motion Bernanke's "virtuous cycle" he is looking for as there is no pricing power for labor today.

We won't get a "high inflation" spiral. We will instead get a downward-spiraling economic disaster where employment and productive investment is successively destroyed by these artificially-imposed tax increases that amount to hundreds of billions of dollars over the next six months - north of a trillion in just one year, or some seventeen times the amount Congress is "debating" with the "tax cuts for the rich."

This is the true tax issue that will destroy our economic future - and nobody's talking about it.

 

Denniger appears a little upset.

[interestrateripoff]

http://www.dailymail.co.uk/news/article-1326187/Las-Vegas-tunnel-people-How-1-000-people-live-shimmering-strip.html

 

Deep beneath Vegas’s glittering lights lies a sinister labyrinth inhabited by poisonous spiders and a man nicknamed The Troll who wields an iron bar.

 

But astonishingly, the 200 miles of flood tunnels are also home to 1,000 people who eke out a living in the strip’s dark underbelly.

 

Some, like Steven and his girlfriend Kathryn, have furnished their home with considerable care - their 400sq ft 'bungalow' boasts a double bed, a wardrobe and even a bookshelf.

Some lovely pictures at the Mail.

I wonder if this will come to the UK?

 

[interestrateripoff]

Ben Bernanke: Impeach Me - I'm A Damned Liar

 

This is unbelievable:

The FOMC decided this week that, with unemployment high and inflation very low, further support to the economy is needed.

And if you could support that decision with actual facts, it would be ok. But when you lie, it's not.

 

More at the link.

 

Ben "I'm A Liar" Bernanke, Part II

 

Great Job Ben. Back to your op-ed....

Two years have passed since the worst financial crisis since the 1930s dealt a body blow to the world economy.

A collapse you were responsible for.

Remember this Ben?

These mortgages were sold to Fannie Mae, Freddie Mac and other investors. Although we did not underwrite these mortgages, Citi did rep and warrant to the investors that the mortgages were underwritten to Citi credit guidelines.

In mid-2006 I discovered that over 60% of these mortgages purchased and sold were defective.

Because Citi had given reps and warrants to the investors that the mortgages were not defective, the investors could force Citi to repurchase many billions of dollars of these defective assets. This situation represented a large potential risk to the shareholders of Citigroup.

I started issuing warnings in June of 2006 and attempted to get management to address these critical risk issues. These warnings continued through 2007 and went to all levels of the Consumer Lending Group.

We continued to purchase and sell to investors even larger volumes of mortgages through 2007.

And defective mortgages increased during 2007 to over 80% of production.

You are the "uber-supervisor" of these banks. Where was your supervision during these years? Why did you allow Citibank to make and sell hundreds of billions of knowingly-defective loans?

 

More at the link.

[interestrateripoff]

http://globaleconomicanalysis.blogspot.com/2010/11/33-tax-hike-will-hit-illinois-another.html

 

Illinois has a $13 billion and growing deficit. The current backlog of bills approaches $6 billion. The state has not paid some suppliers for seven months. In response some vendors have stopped doing business with the state.

 

Please consider Another vendor quits doing business with Illinois

 

Records show the Illinois Department of Corrections was forced to scramble this week when a vendor refused to deliver foam food trays to Menard Correctional Center because it hadn’t been paid. Industrial Soap Co., which holds the master contract for the foam trays, “will not deliver due to delinquent invoices,” prison officials noted.

 

The St. Louis-based vendor wouldn’t discuss the contract situation Tuesday, but records show the company is owed about $166,000 dating to last year.

 

In order to avoid gaps in meal service, state officials gave another company a $36,000 emergency contract to keep the foam trays in stock.

 

The trays are needed to serve meals to the 3,400 inmates because they have been mostly locked in their cells since mid-October due to rising violence in the maximum-security facility.

 

The state is facing a $13 billion deficit that could grow larger by next year. The current backlog of bills is listed by Comptroller Dan Hynes at nearly $5.6 billion. The state owes at least one vendor for services dating back to March.

 

Earlier this year, a company that provides ammunition to help train new guards stopped delivering bullets because it was owed money. Another company that supplies eyeglass lenses also stopped shipping the stock until it was paid.

 

33% Tax Hike Coming to Illinois

 

Illinois voters likely returned Governor Pat Quinn to office. Their reward will be a 33% tax hike, if Quinn gets his way.

 

The election is still undecided 2 days later. Quinn's lead is 16,000 or so out of over 3.6 million cast. Absentee ballots have yet to be counted. However, the math looks improbable for challenger Bill Brady.

 

The problem for Brady is he barely got 20% of the vote in a packed Republican primary. 80% of Republicans wanted someone else. Brady generated little enthusiasm, and none from me, except for one thing: He was not Quinn.

 

For most voters, that was not enough.

 

Chicago voted overwhelmingly for Quinn, 86% to 14% or so. His solution is to the mess is a proposal to raise state taxes by 33%.

 

Looks like Bernanke needs to get some of this cash to US States ASAP.

[interestrateripoff]

http://ftalphaville.ft.com/blog/2010/11/04/394586/the-lonely-long-bond-the-steepening-curve/

 

The Fed doesn’t always live up to market expectations.

Some traders had been expecting the central bank to buy 30-year bonds as part of its Wednesday QE2 announcement. But the long bond has largely been left out of the latest US Treasury-purchasing programme, with buying focused in the four- to 10-year range. Cue, as we noted post the announcement, hefty 30-year reaction.

Back in August, David Rosenberg was convinced that yields on longer-term USTs would collapse once the US central bank started QE2 to boost the economy.

 

More at the link.

[interestrateripoff]

http://ftalphaville.ft.com/blog/2010/11/04/394281/soma-confusion-in-us-treasuries/

 

As part of QE2, the Fed relaxed its System Open Market Account (Soma) limits restricting it from buying more than 35 per cent of any single issue in US Treasuries.

Sort of.

Because the actual statement reads rather weirdly:

To provide operational flexibility and to ensure that it is able to purchase the most attractive securities on a relative-value basis, the Desk is temporarily relaxing the 35 percent per-issue limit on SOMA holdings under which it has been operating.

However, SOMA holdings of an individual security will be allowed to rise above the 35 percent threshold only in modest increments

.

“Modest increments.” What the heck?

 

Continues at the link.

[interestrateripoff]

RBS raises traders' pay despite slump into the red

 

 

Part-nationalised Royal Bank of Scotland today said it had increased staff pay and bonuses for investment bankers in the third quarter despite a 20% fall in trading revenues.

 

• City regulators attacked for triggering 'mortgage famine'
  
• Connaught debts 'could rise to £100m'
  
• HSBC reports profits slowdown
  
• Future of EMI in doubt as Hands loses legal fight
  
• BT attacked over £3bn pension saving
  
• MPC holds fire as double dip fears recede
  
• Anger over Rock boss's £500,000 'to do nothing'
  

 

David Prosser: Why a generation of first-time buyers are set to miss out

 

Outlook So who is right about these instruments of financial disaster that we used to think of as boring old mortgages? Steve Morgan, the chairman of the house builder Redrow, thinks lenders' response to the financial crisis – to stop offering mortgages unless buyers have really chunky deposits – is way over the top. The Financial Services Authority, on the other hand, wants to introduce a bunch of fresh regulations to prevent lenders extending mortgages to those who might not stay on top of repayments. Yesterday, the regulator publicly rebuked the Council of Mortgage Lenders for daring to suggest it might be going too far.

 

• David Prosser: When consumers are the problem
  
• David Prosser: Canada embraces protectionism
  
• David Prosser: Murdoch is not blinking in the battle for Sky – nor should Vince Cable
  
• David Prosser: The banks are recovering but at borrowers' expense
  
• Stephen Foley: Oil major feels the benefit as crude prices surge after Opec speaks out
  

 

Rapha cashes in on classy clobber for the chain gang

 

Simon Mottram was so fed up with the quality of cycling clothing he set up his own businesss to do better. David Prosser reports

 

• The business on: Frederic Oudea, Chief executive, Société Générale
  
• Man Group - Interim results, video interview with CEO Peter Clarke
  
• Protest at Anglo's Alaskan quest
  
• Murdoch prepares to lock horns with cable
  
• The business on: Irving Picard, Trustee, Bernard Madoff Investment Securities
  

[interestrateripoff]

Jump in U.S. hiring lifts spirits on economy

 

WASHINGTON (Reuters) - U.S. employment surged much more than expected last month as private companies hired workers at the fastest pace since April, a sign the sluggish economy is finally starting to tick up.

Continue Reading

 

 

 

Ofcom invites views on Murdoch's BSkyB buyout proposal

 

LONDON (Reuters) - Ofcom invited comments on the proposed acquisition of BSkyB by Rupert Murdoch's News Corp and said it would consider how much control individuals have over the media.

6:53pm GMT

 

Miners lift FTSE to 29-month closing high

 

LONDON (Reuters) - Strength from miners pushed the top share index higher by close on Friday, as data showing the U.S. labour market was surprisingly strong lifted confidence on the outlook for the global economy.

5:31pm GMT

 

BP gains as traders cite Exxon bid talk

 

LONDON (Reuters) - Shares in BP gained on Friday, with traders citing talk that Exxon Mobil was considering a bid for the oil company.

2:42pm GMT

 

Pratt escalates court row with Rolls-Royce

 

BOSTON (Reuters) - U.S. aircraft engine maker Pratt & Whitney escalated its legal battle with Rolls-Royce Group Plc on Friday, filing complaints in U.S. and U.K. courts charging its British rival with violating a patent.

Aerospace & Defence 5:44pm GMT

 

Gold hits record on inflation

 

LONDON (Reuters) - Gold hit a record high on Friday as the move by the U.S. Federal Reserve to buy more government bonds raised inflation expectations and left investors betting on more dollar weakness ahead.

6:54pm GMT

 

HSBC says Europe regulation hurts

 

LONDON (Reuters) - HSBC said tougher European rules on pay and a bank tax were causing it harm and left it assessing whether to stay in London, as it reported profits so far this year "well ahead" of a year ago.

1:09pm GMT

 

Hammerson seeks pre-lets for $565 million London office

 

LONDON (Reuters) - Anglo-French property investor Hammerson plans to develop a 350 million pounds office project in London's City financial district by 2014, and is already seeking pre-lets for part of it.

2:36pm GMT

 

Northern Rock outgoing CEO waives pay during time off

 

LONDON (Reuters) - The outgoing chief executive of nationalised bank Northern Rock has agreed to forego his salary during his time off between leaving Northern Rock and joining a rival bank, after a public outcry over the package.

2:44pm GMT

 

RBS expects challenging Q4

 

LONDON (Reuters) - Royal Bank of Scotland expects challenging market conditions in the fourth quarter, and the part-nationalised British bank said a bank tax would add up to 250 million pounds to its costs next year.

[interestrateripoff]

Breaking news

 

• 
  
• Bernanke defends Fed from global critics - Reuters
  
• US STOCKS-Market flat as investors book profits after rally - Reuters
  
• Engine problems hit second Qantas aircraft - Reuters
  
• Mortgage investors sue Citi over underwriting - Reuters
  
• Google blocks data from Facebook as rivalry heats up - Reuters
  
• Canada pushes G20 for more forex flexibility - Reuters
  
• GLOBAL ECONOMY-Global anger swells at U.S. Fed actions - Reuters
  
• BofA fighting suits over $375 bln in MBS - Reuters
  

 

 

 

• US accused of forcing up world food prices
   
  Fresh round of US quantitative easing will weaken dollar and push up commodity prices, hitting consumers, say critics
  1 comment
  
  • Wholesale food prices soar
    
  • Morrisons and Unilever warn of price rises in 2011
    
  • Next forecasts 10% rise in clothes prices
    

  [*] HSBC warns fate of London HQ in doubt amid concerns over bonus rules

   

  HSBC says tougher bonus rules make it difficult to attract talented staff in Hong Kong, Brazil and India

   

  • Should we be worried that HSBC may quit London?
    

  [*] US jobs data boosts Obama

   

  Non-farm payrolls figures show 151,000 new jobs were created last month ‑ more than double the 65,000 expected

  12 comments

  • Obama says US unemployment 'unacceptably high'
    
  • US non-farm payroll data: what the economists say
    
  • QE boost keeps world markets buoyant
    
  • Joseph Stiglitz: Banks' debt to society
    

  [*] Guy Hands poised to lose control of EMI as Citigroup seeks debt deal

   

  Terra Firma financier who lost fraud case against Citibank likely to cede control of music group in restructuring of £3bn debt

   

  • Analysis: an off-key deal from the start
    
  • Nils Pratley: A Hands-down victory
    
  • The story of the Guy Hands/Citigroup trial
    

 

 

• Let them eat cheese: anger as Ireland plans handouts of cheddar to the poor
   
  Irish government's offer of chunks from EU cheese mountain prompts whine of outrage from opposition
  103 comments
  
  • Ireland slashes budget as fears of bailout grow
    

  [*] Bonus row as RBS falls to £1.4bn loss

   

  Quarterly figures show state-owned RBS investment bankers are raking in bonuses while revenue falls

  111 comments

  • Gary Hoffman, waives £500,000 'golden goodbye'
    
  • Lloyds attacked over boss's £8m pay deal
    

  [*] Canadian funds buy Channel tunnel link

   

  Two of Canada's largest pension funds win 30-year deal to operate High Speed One, the link between St Pancras and the Channel tunnel

  [*] Post Office close to losing key contract

   

  Post Office's survival threatened by loss of benefit giro contract after PayPoint undercuts bid, despite pledges to protect network

  [*] More business news

  [*] Housebuilders fear 'mortgage famine'

  [*] Miffy biffs Cathy in Kitty copycat case

[interestrateripoff]

5 November 2010 Last updated at 19:06

 

UK high-speed rail link is sold

 

The UK government sells a 30-year lease on the 68-mile London to Folkestone high speed rail link to a Canadian consortium for £2.1bn.

 

RBS back in red with £1.4bn loss

 

Royal Bank of Scotland plunges back into the red with a £1.4bn ($2.3bn) pre-tax loss during the three months to September.

 

 

Global criticism of US stimulus

 

Germany's finance minister calls the US stimulus programme "clueless", while China warns of its "negative impact".

 

• Q&A: The Fed's QE gambit
  
• Fed pumps $600bn into US economy
  

 

 

 

• European military aircraft agreed
   
  The 20bn euro project to build the A400M transport plane is saved as seven nations agree to buy 170 aircraft.
  
• Russia's Mail.ru sees shares jump
   
  Shares in Russia's Mail.ru, part-owner of Facebook, surge on their London debut.
  
• German bank could be wound down
   
  The European Commission says a very large regional bank, WestLB, could be broken up.
  
• US new jobs data beats forecasts
  
• Upbeat HSBC warns on regulation
  
• AIG loses $2.4bn in quarter
  
• Bankruptcies are falling for now
  
• Toyota profits continue to soar
  
• Smith and Nephew beats forecasts
  
• Irish announce record budget cuts
  
• Terra Firma loses EMI court case
  
• 'Possible fault' in A380 - Qantas
  

 

China: boom or bust?

 

Why 30,000 people live in a city built for a million

 

Beggar my neighbour

 

Is the US exporting its demand shortage to the rest of the world?

[interestrateripoff]

Jobs Data Highlight the Challenges for Washington

 

By CATHERINE RAMPELL 2:34 PM ET

 

 

The report was better than expected, but not strong enough to make a dent in the unemployment rate.

 

• Economix: Comparing Recoveries: Job Changes
  
• Floyd Norris: Jobs are Growing, Even in Manufacturing
  

 

 

 

 

• Jobs
  
• Private
  
• Rate
  

 

 

 

 

Source: Bureau of Labor Statistics

 

 

 

 

 

Wall Street Ends the Week Higher

 

By BETTINA WASSENER and CHRISTINE HAUSER 17 minutes ago

 

The major indexes were up about 3 percent for the week, pushed higher by the Fed’s plan to stimulate the economy.

 

• U.S. Pending Home Sales Declined in September
  

 

Media Decoder Blog

 

MSNBC Suspends Olbermann for Campaign Donations

 

By BRIAN STELTER and BILL CARTER 31 minutes ago

 

Keith Olbermann, the top anchor on MSNBC, was suspended on Friday after the channel discovered that he had made contributions to three Democrats.

 

DealBook

 

A.I.G. Reports $2.4 Billion Loss in 3rd Quarter

 

By DEALBOOK 8:33 AM ET

 

A.I.G. was again hamstrung in part by accounting charges related to its restructuring as it seeks to repay its taxpayer-financed bailout.

 

DealBook

 

France to Investigate LVMH Stake in Hermes

 

By CHRIS V. NICHOLSON 11:49 AM ET

 

The French securities watchdog said Friday that it was opening an inquiry into LVMH Moet Hennessy Louis Vuitton taking a more than 17 percent stake in Hermes.

 

The Caucus

 

Obama Recasts Asia Trip as Jobs Mission

 

By MICHAEL D. SHEAR 12:16 PM ET

 

In light of the message from midterm voters, the White House is emphasizing the economic focus of President Obama’s 10-day trip.

 

• Wealthy and Worried, India Is Rich Arms Market
  

 

Toyota Earns $1.2 Billion and Raises Forecast Slightly

 

By THE ASSOCIATED PRESS 1:19 PM ET

 

Like other Japanese exporters, Toyota is fighting damage from a strong yen that erodes the value of overseas earnings.

 

HSBC Earnings Rise but Bank Sees Asia Slowdown

 

By JULIA WERDIGIER 5:45 AM ET

 

The British bank said its earnings rose in the third quarter, but warned recovery in Asia was losing steam. The Royal Bank of Scotland also reported earnings.

 

In Qantas Blowout, Concern for Jet Engine Maker

 

By NICOLA CLARK and JAD MOUAWAD

 

Quantas said Friday it believed the explosion of the engine of its A380 was due to a design flaw or manufacturing defect from its maker, Rolls Royce.

 

BBC Staff Strikes Over Changes to Pension Plan

 

By JULIA WERDIGIER 8:59 AM ET

 

Journalists at the British Broadcasting Corp. started a 48-hour strike Friday to protest planned pension cuts, causing some disruption to global programming.

 

BMW Inaugurates First Factory for Electric-Powered Cars

 

By JACK EWING 12:00 PM ET

 

The automaker is committing hundreds of millions of euros as well as its prestige to the as-yet untested market.

 

Rare Earths Stand Is Asked of G-20

 

By KEITH BRADSHER 7:29 AM ET

 

A business coalition asked the organization to oppose the interruption of the flow of the crucial minerals because of industrial policies or political disputes.

 

Once on Sleepy Beat, Regulator Is Suddenly Busy

 

By JULIE CRESWELL and GRAHAM BOWLEY

 

The Commodity Futures Trading Commission is suddenly on the move, opening 419 investigations in the last year.

 

 

 

• Bank of America Fights Pressure on Mortgages
  
• DealBook: Citigroup Prevails in Lawsuit Over EMI Deal
  
• After Months of Feuding, Obama Makes Overture to Business Group
  
• Disney Junior to Focus on Social Values
  

[interestrateripoff]

[/url]

 

Oil price forecast to hit $100 a barrel in 2011

 

Oil prices rose to a two-year high in New York on Friday, raising fears of a return to $100 per barrel crude and consumer goods inflation.

 

US adds a surprise 151,000 jobs in October

 

US employment showed a surprise rise in October as private companies hired workers at the fastest pace since April.

Doubts grow over wisdom of Ben Bernanke 'super-put'

 

 

 

Branson begins strategic review of Virgin Atlantic

 

Sir Richard Branson has hired Deutsche Bank to examine strategic options in a move that could eventually see him relinquish control of his airline.

 

RBS back in red despite big fall in bad loans

 

 

 

 

Rolls-Royce slides again as Airbus asks for A380 checks

 

 

 

 

N Rock chief turns down £500,000 'golden goodbye'

 

 

 

 

BAE Systems letter to David Cameron was 'gun to head'

 

 

 

 

Olympic organisers urged to find £7m for stadium 'curtain'

 

 

 

 

Dragon's Den star Caan's gym partners left in a cold sweat

 

 

• UK economy risks being sucked into Bernanke's great inflation
  

 

• I told you so: why shares beat bonds and deposits
  

 

 

• The age of the dollar is drawing to a close
  

 

Producers' price rises gain pace feeding UK inflation threat

 

 

 

China leads backlash against US stimulus

 

 

 

 

Gilts and pound rise after Bank of England resists QE urge

 

 

 

 

UK economy in danger of being sucked into Bernanke's great inflation

 

 

 

 

Doubts grow over wisdom of Ben Bernanke 'super-put'

[interestrateripoff]

http://market-ticker.org/akcs-www?post=171403

 

You're not going to believe this...

 

HARRISBURG - Attorney General Tom Corbett today announced that a consumer protection lawsuit has been filed against an Erie debt collection company accused of using deceptive tactics to mislead, confuse or coerce consumers - including the use of bogus "hearings" allegedly held in a company office that was decorated to look like a courtroom.

 

"This is an unconscionable attempt to use fake court proceedings to deceive, mislead or frighten consumers into making payments or surrendering valuables to Unicredit without following lawful procedures for debt collection," Corbett said. "Consumers also allegedly received dubious 'hearing notices' and letters - often hand-delivered by individuals who appear to be Sheriff Deputies - which implied they would be taken into custody by the Sheriff if they failed to appear at the phony court for 'hearings' or 'depositions'."

 

Sued?

 

SUED?

 

Isn't impersonating an officer a crime?

 

How about impersonating a member of the judiciary?

 

Corporations pull something like this and get sued. Your I do it, we get arrested and tossed in jail.

 

How long before you decide that the law no longer matters, since at worst a company that pulls something like this - just like the ones in Florida breaking into homes - simply get "sued"?

 

Unbelievable, the rule of law it seems only applies to the little people.

[interestrateripoff]

Consumer Credit For October

Well this is uninspiring.....

Consumer credit declined 1-1/2 percent at an annual rate in the third quarter. Revolving credit declined 8-3/4 percent at an annual rate, and nonrevolving credit increased 2-1/2 percent. In September, consumer credit increased 1 percent at an annual rate.

So it's still going down. The real issue is revolving (credit cards) - gee, you think?

 

Charts at the link.

[interestrateripoff]

Breaking news

 

• 
  
• Brazil could reinstate levy on local bonds-report - Reuters
  
• China's Hu tells Portugal wants closer ties - Reuters
  
• Japan takes half-step towards U.S.-led trade pact - Reuters
  
• China's Hu begins Portugal visit, debt help eyed - Reuters
  
• Brazil could reinstate levy on local bonds-report - Reuters
  
• Obama rejects view of India as "land of call centres" - Reuters
  
• Jakarta flights cancelled due to volcano - Reuters
  
• Obama to ease U.S.-India export controls, boost trade - Reuters
  

 

 

 

• US accused of forcing up world food prices
   
  Fresh round of US quantitative easing will weaken dollar and push up commodity prices, hitting consumers, say critics
  24 comments
  
  • Wholesale food prices soar
    
  • Morrisons and Unilever warn of price rises in 2011
    
  • Next forecasts 10% rise in clothes prices
    

  [*] HSBC warns fate of London HQ in doubt amid concerns over bonus rules

   

  HSBC says tougher bonus rules make it difficult to attract talented staff in Hong Kong, Brazil and India

   

  • Should we be worried that HSBC may quit London?
    

  [*] US jobs data boosts Obama

   

  Non-farm payrolls figures show 151,000 new jobs were created last month ‑ more than double the 65,000 expected

  12 comments

  • Obama says US unemployment 'unacceptably high'
    
  • US non-farm payroll data: what the economists say
    
  • QE boost keeps world markets buoyant
    
  • Joseph Stiglitz: Banks' debt to society
    

  [*] Guy Hands poised to lose control of EMI as Citigroup seeks debt deal

   

  Terra Firma financier who lost fraud case against Citibank likely to cede control of music group in restructuring of £3bn debt

   

  • Analysis: an off-key deal from the start
    
  • Nils Pratley: A Hands-down victory
    
  • The story of the Guy Hands/Citigroup trial
    

 

 

• Let them eat cheese: anger as Ireland plans handouts of cheddar to the poor
   
  Irish government's offer of chunks from EU cheese mountain prompts whine of outrage from opposition
  173 comments
  
  • Ireland slashes budget as fears of bailout grow
    

  [*] Bonus row as RBS falls to £1.4bn loss

   

  Quarterly figures show state-owned RBS investment bankers are raking in bonuses while revenue falls

  129 comments

  • Gary Hoffman, waives £500,000 'golden goodbye'
    
  • Lloyds attacked over boss's £8m pay deal
    

  [*] Canadian funds buy Channel tunnel link

   

  Two of Canada's largest pension funds win 30-year deal to operate High Speed One, the link between St Pancras and the Channel tunnel

  [*] Post Office close to losing key contract

   

  Post Office's survival threatened by loss of benefit giro contract after PayPoint undercuts bid, despite pledges to protect network

  [*] More business news

  [*] Housebuilders fear 'mortgage famine'

  [*] Miffy biffs Cathy in Kitty copycat case

[interestrateripoff]

Rolls-Royce value falls by £1.2bn after jet accident

 

The turbulence is likely to be severe

 

• HSBC in new threat to leave the UK over Osborne banking levy
  
• New inflation fears add to Bank's QE quandary
  
• RBS's investment bankers pocket six-figure payouts as bank loses again
  
• Canadian funds win Channel Tunnel link
  
• 'Clueless' – the German verdict on US policy for recovery
  
• Business Diary: Consolation prizes for Forgemasters
  
• Mail.ru valued at $5.7bn
  

 

Stephen Foley: The song may have ended but for Guy Hands, the malady lingers on

 

 

US Outlook: It is sometimes said that to understand is to forgive, but that won’t apply to David Wormsley.

 

 

• Stephen Foley: A long-term labour challenge
  
• David Prosser: Why a generation of first-time buyers are set to miss out
  
• David Prosser: When consumers are the problem
  
• David Prosser: Canada embraces protectionism
  
• David Prosser: Murdoch is not blinking in the battle for Sky – nor should Vince Cable
  

 

Look to the future Marc, it's only just begun...

 

After six months in charge of Marks & Spencer, it is time for Marc Bolland to reveal his strategy. James Thompson reports

 

 

• The business on...Gary Hoffman, Chief executive, Northern Rock
  
• Rapha cashes in on classy clobber for the chain gang
  
• The business on: Frederic Oudea, Chief executive, Société Générale
  
• Man Group - Interim results, video interview with CEO Peter Clarke
  
• Protest at Anglo's Alaskan quest
  

[interestrateripoff]

U.S. and China step back from tussle on economic policy

 

KYOTO, Japan (Reuters) - The United States and China on Saturday appeared to take a step back from mounting criticism of each other's economic policies, but Beijing made clear it was still wary of Washington's latest move to print more money. | Video

Continue Reading

 

 

 

Oil price rise not threat to global recovery - IMF

 

KUWAIT (Reuters) - The International Monetary Fund does not see a rise in oil prices as a threat to the global economic recovery and will closely monitor a new round of U.S. policy easing, a senior IMF official said on Saturday. "No, it seems that in the current environment the energy prices seem to be responding to strengthening growth certainly relatively close to a range that has appeared consistent with continued expansion in the global economy," first managing director John Lipsky told repo

2:09pm GMT

 

Bernanke says Fed not trying to spark inflation

 

JEKYLL ISLAND, Georgia (Reuters) - The Federal Reserve is trying to help a weak economy with its new $600 billion (370 billion pounds) bond purchase plan, not jump-start inflation, central bank chairman Ben Bernanke said on Saturday.

4:34pm GMT

 

Japan takes half-step towards U.S.-led trade pact

 

TOKYO (Reuters) - Japan said on Saturday it would start talking with other countries about a U.S.-led free trade deal, but stopped short of pledging to formally join negotiations, reflecting its worries over fallout for farmers.

4:44pm GMT

 

Eurogroup's Juncker to propose common euro bond - report

 

BERLIN (Reuters) - Eurogroup chairman Jean-Claude Juncker said in an interview published on Saturday that he would put forward a new proposal for a common euro bond as a way to strengthen solidarity in the euro zone. "It's an intelligent way to keep economically weaker euro countries attractive for investors in the future," Juncker was quoted telling the German Sueddeutsche Zeitung newspaper.

11:26am GMT

 

Ofcom invites views on Murdoch's BSkyB buyout proposal

 

LONDON (Reuters) - Ofcom invited comments on the proposed acquisition of BSkyB by Rupert Murdoch's News Corp and said it would consider how much control individuals have over the media.

05 Nov 2010

 

German Finance Minister attacks U.S. Fed move again - report

 

BERLIN (Reuters) - German Finance Minister Wolfgang Schaeuble renewed his criticism of the U.S. Federal Reserve's move to buy $600 billion (370 billion pounds) worth of government bonds, saying it undermined U.S. credibility and created uncertainty, according to a German magazine.

12:38pm GMT

 

China gets major stake in IMF vote overhaul

 

WASHINGTON (Reuters) - In a historic decision, the International Monetary Fund board agreed Friday to boost the voting power of big emerging economies and make China the third leading voice in the global lender.

G20 2:49am GMT

 

BP gains as traders cite Exxon bid talk

 

LONDON (Reuters) - Shares in BP gained on Friday, with traders citing talk that Exxon Mobil was considering a bid for the oil company.

05 Nov 2010

 

RWE says CEO unwell, seen recovering by end of Nov

 

FRANKFURT (Reuters) - German utility RWE said on Saturday that its Chief Executive Juergen Grossman was unwell and would be able to only partially fulfil his duties as head of Europe's fifth-largest utility in the coming weeks.

[interestrateripoff]

6 November 2010 Last updated at 17:52

 

Obama announces India trade deals

 

US President Barack Obama - visiting Mumbai - praises Indian's economic progress and announces $10bn (£6.2bn) in new trade deals.

 

• Obama defiant at Taj Hotel Watch
  
• Analysis: Many questions for Obama
  

 

RBS back in red with £1.4bn loss

 

Royal Bank of Scotland plunges back into the red with a £1.4bn ($2.3bn) pre-tax loss during the three months to September.

 

 

UK high-speed rail link is sold

 

The UK government sells a 30-year lease on the 68-mile London to Folkestone high speed rail link to a Canadian consortium for £2.1bn.

 

 

 

• Global criticism of US stimulus
   
  Germany's finance minister calls the US stimulus programme "clueless", while China warns of its "negative impact".
  
• Europe seals military plane deal
   
  The 20bn euro project to build the A400M transport plane is saved as seven nations agree to buy 170 aircraft.
  
• Russia's Mail.ru sees shares jump
   
  Shares in Russia's Mail.ru, part-owner of Facebook, surge on their London debut.
  
• German bank could be wound down
  
• US new jobs data beats forecasts
  
• Upbeat HSBC warns on regulation
  
• AIG loses $2.4bn in quarter
  
• Bankruptcies are falling for now
  
• Toyota profits continue to soar
  
• Smith and Nephew beats forecasts
  
• Terra Firma loses EMI court case
  
• 'Possible fault' in A380 - Qantas
  

 

China: boom or bust?

 

Why 30,000 people live in a city built for a million

[interestrateripoff]

http://www.zerohedge...d-hungry-winter

 

'The following chart prepared recently by JPMorgan demonstrates something rather scary, and makes it all too clear how the Chairman's plan to "assist" the US population via some imaginary "wealth effect" due to QE2, is about to backfire. As is now becoming very evident, the prices of energy and food products are about to surge, and in many cases have already done so, but courtesy of some clever gimmicks (Wal Mart selling what was formerly 39 oz of coffee as a 33.9 oz product for example) the end consumers haven't quite felt it yet. They will soon. There is a limit to how much every commodity can open limit up before it appears on the SKU price at one's local grocer. And while a marginally declining "core CPI" is irrelevant for this exercise as it measures only items that are completely outside of the scope of everyday life, what will be far more important to end consumers will be the push higher in food and energy costs. The problem, however, is that for the lowest 20% of Americans, as per the BLS, food and energy purchases represent over 50% of their after-tax income (a number which drops to 10% for the wealthiest twenty percentile). In other words should rampant liquidity end up pushing food and energy prices to double (something that is a distinct possibility currently), Ben Bernanke may have very well sentenced about 60 million Americans to a hungry and very cold winter, let alone having any resources to buy trinkets with the imaginary wealth effect which for over 80% of the US population will never come.

 

Here is how JPM explains the phenomenon:

 

When the Fed considers the possible consequences of a falling dollar resulting from QE2, it should perhaps focus on food and energy prices as much as on traditionally computed core inflation. First, the food/energy exposures of the lower 2 income quintiles are quite high (see chart). Second, the core CPI has a massive weight to “owner’s equivalent rent”, which suggests that the imputed cost of home occupancy has gone down. Unfortunately, this is not true for families living in homes that are underwater, and cannot move to take advantage of it (unless they choose to default and bear the consequences of doing so). Due to the housing mess, there has perhaps never been a time when traditionally computed core inflation as a way of measuring changes in the cost of things means less than it does right now.

 

Since nothing else appears to have jarred America from its prime time TV/iPad hypnosis yet, perhaps this is for the best, and a few hungry months in subzero temperatures is precisely what several tens of millions of Americans need to finally march on Constitution avenue.'

 

At least there will be a recovery.....

 

I feel huge mistakes are being made and at some point we will see a systemic crisis.

[interestrateripoff]

http://www.ft.com/cms/s/0/9f0ab4aa-e83c-11df-8995-00144feab49a.html#axzz14XJCLYeL

 

 

A scary chart.

 

Hardly shocking that those with a LTV ratio greater than 100% are in the most trouble.

 

If you can't save a deposit then you shouldn't be given a mortgage and have LTV over 100% is just moronic.

[interestrateripoff]

When a Rig Moves in Next Door

 

By CLIFFORD KRAUSS and TOM ZELLER Jr. 2:44 PM ET

 

 

In states accustomed to its risks, drilling for natural gas is seen as an economic lifeline. But in the Northeast, some residents fear the long-term environmental impact.

 

 

 

Michael Stravato for The New York Times

 

Ed Granger and his wife, Lula, and daughter, Brooklyn, don’t like the noise of a gas well near their house in Louisiana but hope to sell water to the driller.

 

 

 

 

 

 

Chasing Pirates: Inside Microsoft’s War Room

 

By ASHLEE VANCE 2:56 PM ET

 

In an industry dependent on intellectual property, Microsoft’s fight against theft has implications beyond the bottom line.

 

Bernanke Attempts to Soothe Doubters

 

By SEWELL CHAN 59 minutes ago

 

At a conference, the Fed chief, Ben Bernanke, says, “Our purpose is to provide some additional stimulus to help the economy recover and to avoid, potentially, additional disinflation.”

 

In Japan, U.S. Defends Fed Actions

 

By HIROKO TABUCHI 2:48 PM ET

 

Timothy F. Geithner, the Treasury secretary, said that the United States was not trying to devalue the dollar.

 

Democrats Divided on Tax Cut Strategy

 

By JACKIE CALMES 2:38 PM ET

 

The Obama administration and House Democrats are seeking a strategy for the soon-to-expire Bush-era tax cuts.

 

Taking On a Second Mortgage to Pay the Foreclosure Lawyer

 

By DAVID STREITFELD 3:24 PM ET

 

Some defense lawyers call the new mortgage crass. Yet even they acknowledge it offers a solution to a vexing question: How do they get paid?

 

Russian Journalist Beaten in Moscow

 

By ELLEN BARRY 3:01 PM ET

 

A journalist is in an induced coma after an attack his editor said was likely connected to his work.

 

Unboxed

 

Wait Long Enough, and They Look Alike

 

By STEVE LOHR

 

The two companies can be viewed as the yin and the yang of high-tech innovation, with more in common than is generally understood.

 

Novelties

 

When a Camcorder Becomes a Life Partner

 

By ANNE EISENBERG

 

Tiny, wearable cameras, which can be tucked over an ear or worn in a headband, are entering the mainstream.

 

Bloomberg Questions U.S. Inquiry Into China Trade Practices

 

By KEITH BRADSHER 43 minutes ago

 

In Hong Kong, Mayor Michael R. Bloomberg was skeptical about a United States decision to open an inquiry into whether China violated trade rules.

 

 

 

• In Venezuela, a New Wave of Foreigners 2:48 PM ET
  
• U.S. Sikh Groups Decry Screenings 3:18 PM ET
  
• Antibiotics Research Subsidies Weighed by U.S.
  
• Shell Presses for Drilling in Arctic
  
• Jobs Data Highlights the Challenges for Washington