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Posts tagged ‘New York City’

Geithner Joins the Wall Street Party

By Staff Report at the Daily Bell

Geithner is a prototypical technocrat in a tradition that stretches back, unfortunately, to Alexander Hamilton. In fact, one could characterize Geithner as a kind of Hamilton-on-steroids. There really wasn’t anything Geithner was shy about doing when it came to wielding federal power. He expected that fedgov was the market’s dominant entity and that the US Treasury, Wall Street and the Federal Reserve would all work together as one single unit. With this in mind, the catastrophe of 2008-2009 was gradually lessened and the financial industry was “stabilized.” In fact, what this basically entailed was printing trillions of dollars to buttress banks’ bottom lines. This did little or nothing for the “real” economy, but people like Geithner are taught that the real economy is merely an appendage of the financial one. And so, Geithner did as he was asked to do. He made sure of the solvency of Wall Street and of the City and having done this for four years – and no doubt seeing that the situation was deteriorating further – he decided to head for the exit. He has moved on to take the presidency of a white shoe Wall Street firm specializing in start-up investments. It is his first “private sector” job, we’re told, but one he will be good at because of his work ethic and “commitment to leadership.” Others have a somewhat different opinion, as we can see from this article at Bloomberg: Why People Are Mad at Tim Geithner for Jumping Into Private Equity … I’ll admit to being a bit surprised to learn that former Treasury Secretary Timothy Geithner has agreed to become president of the private equity firm Warburg Pincus. On the one hand, it shouldn’t come as a shock that a guy with perhaps a deeper understanding than anyone else of how markets, government, and the economy interact should decide to apply those talents to making money. On the other hand, the news did surprise a lot of people who expected Geithner to become a university president or the head of an NGO or some other eminent non-Wall Street position –

See more at: http://www.thedailybell.com/news-analysis/34761/Geithner-Joins-the-Wall-Street-Party/#sthash.1Ubb2Y76.dpuf

Kevin Slavin: How algorithms shape our world

Kevin Slavin (see below link)


argues that we’re living in a world designed for — and increasingly controlled by — algorithms. In this riveting talk from TEDGlobal, he shows how these complex computer programs determine: espionage tactics, stock prices, movie scripts, and architecture. And he warns that we are writing code we can’t understand, with implications we can’t control.


Solidarity with the Occupy Wall Street Heros

Again we are in Ireland put to shame as elsewhere ordinary show they have the courage to stand up against the banker dictatorship .The theft of people’s fundamental rights, their ability to provide for their families and their own welfare in the future .We have mouthpieces in Government who are now openly demanding austerity measures of the people to pay for the odious gambling debts of Bondholders who should have known better. We are now nothing more than debt slaves to Deutshe Bank and the Likes of Peter Sutherland, John Bruton, Allen Dukes, and the current Finance Minister Mr. Michael Noonan are their willing “overseers” “facilitators
who are willing to enslave their own people for the sake of “a few quick bucks”!

Stop the Irish Banker occupation and take back our country from the public office
leaches sitting in Lenster House who have broken all their promises to the
people of Ireland.

magnitude 5.8 earthquake struck U.S. east coast

WASHINGTON, Aug. 23 (Xinhua) — A magnitude 5.8 earthquake struck U.S. east coast on Tuesday afternoon and was felt in Washington D. C., New York City, North Carolina and even in Toronto, Canada.

The quake that lasted up to 45 seconds occurred at 1:51 p.m. local time (1751 GMT), 135 km southwest of U.S. capital Washington D.C., at a depth of six km, the United States Geological Survey ( USGS) reported on its website.

The quake was also felt as far away as Martha’s Vineyard, some 500 miles (800 kilometers) away, off the coast of Massachusetts, where President Barack Obama was playing golf during his vacation.

Earthquakes of magnitude 5.5 to 6 usually cause slight damage to buildings and other structures.

According to U.S. Nuclear Regulatory Commission (NRC), two nuclear reactors were automatically taken off-line near quake site in Virginia. NRC officials are assessing the situation and sending people to inspect the site.

full article at source:http://news.xinhuanet.com/english2010/world/2011-08/24/c_131069755.htm



How America Ceded Capitalism’s Bastion to German

By Bob Ivry, Whitney Kisling and Max Abelson – Jul 6, 2011 3:46 AM GMT Wed Jul 06 02:46:11 GMT 2011 

of Capitalism

The 219-year-old symbol of American
capitalism, now called NYSE Euronext, is about to complete a $9.42 billion
merger with Deutsche Boerse AG (DB1) that will give the Frankfurt-based
firm 60 percent of what would be the biggest exchange company in the world. The
deal is the culmination of a decade of scandal, regulatory mandates and a
technology arms race that opened the industry to electronic upstarts and forced
the old Wall Street boys’ club to become an international company that makes
most of its money from businesses other than stock trading.

“When I started in the business, Deutsche Boerse was open for two hours a day and
the New York Stock Exchange was THE NEW YORK STOCK EXCHANGE,” said Thomas Caldwell, chief executive officer of
Caldwell Securities Ltd., a money-management firm in Toronto, who has worked in
the industry since 1965. “You just have to stop and say, ‘Wait a minute here —
Deutsche Boerse, New York, equal partners? How did that happen?’”


Over the years, trading has gotten
cheaper and faster, benefiting investors. Buying 1,000 shares of AT&T
before 1975 would have cost $800 in commissions, Charles Schwab, who founded
discount brokerage Charles Schwab Corp., told the U.S. Senate in February 2000.
That’s about 100 times more than the fees paid by some retail stock-pickers

Even so, many of those same
investors abandoned equities after the Standard & Poor’s 500 Index, the
benchmark measure of U.S. stocks, plummeted 6.2 percent in 20 minutes on May 6,
2010. Though the NYSE was the only exchange that didn’t have to cancel
transactions after the so-called flash crash, the plunge created the perception
that markets in general weren’t safe because high-frequency traders, who buy
and sell in milliseconds, are beyond the reach of regulators and enjoy trading
advantages on exchanges, said Joe Saluzzi, co-head of equities trading at
Themis Trading LLC in Chatham, New Jersey.

“We have a two-tiered market,”
Saluzzi said. “Some traders have information and speed, and the exchange caters
to them because that’s where it makes its money.” The merger won’t change that
formulation, he said.


The NYSE is required to allow all
customers access to all services, said Richard C. Adamonis, a NYSE Euronext (NYX) spokesman. Other markets don’t have
that requirement, he said.

The deal with Deutsche Boerse needs
the approval of half the NYSE Euronext shareholders, who are scheduled to vote
tomorrow, and three-fourths of the German firm’s stockholders, who will decide
by July 13. The companies have wooed shareholders by agreeing to pay about 620
million euros ($895 million) in dividends.

“There’s this sentiment out there
that we’re not what we were, and that’s right, we’re not,” NYSE Euronext CEO
Duncan L. Niederauer, 51, a former co-head of equities trading for Goldman
Sachs Group Inc., said in an interview. “The NYSE doesn’t want to be what it
was. The game changed. We’re obliged to get into new services, new products,
new asset classes, new regions. If we do that successfully, that’s a great
story, not a sad story.”


Niederauer is slated to be CEO of
the combined NYSE Euronext and Deutsche Boerse. Reto Francioni, the head of the
German company, will be chairman.

New products, namely derivatives
such as options and interest-rate swaps, are what Niederauer is counting on to
revive a company whose stock has lost almost half its value since it started
trading in March 2006. NYSE Liffe, Europe’s
second-biggest derivatives market, will join Eurex, the biggest, owned by
Deutsche Boerse.

After doubling each year from 2005
to 2007, NYSE Euronext’s operating income has since slowed, falling 32 percent
in 2009 and growing 3.7 percent last year.

Combined, Liffe and Eurex may earn
$1.18 billion in three years, according to data compiled by Bloomberg, Credit
Suisse Group AG and Macquarie Group Ltd. Applying the average valuation of its
three closest derivatives-market competitors would result in a business worth
more than the combined companies before they agreed to merge — and that’s
leaving out their other operations.


The old NYSE ran with the help of a
group of stock traders called specialists. In 2002, seven NYSE-designated
firms, including LaBranche & Co., had the job of stepping in and trading stocks
when there were imbalances between buy and sell orders so that ups and downs
could be smoothed. Specialists were also required to hang back as long as NYSE
customers could trade with one another.

LaBranche, created in January 1924,
became the first independent specialist firm to sell shares to the public in
August 1999. With their central role in trading and their access to market
information, specialists were a closed and lucrative club.

In papers prepared for its initial
public offering, LaBranche disclosed that it regularly turned about 71 percent
of sales into profit before paying its managing directors. Earnings before that
expense climbed at least 25 percent every year from 1995 through 1999, almost
doubling in 1998. That year, 34 managing directors split a compensation pool
that gave each of them an average of about $1.7 million, according to
regulatory filings.


Technology and the government would
undermine the specialists’ profitability.

In 2004, the U.S. Securities and Exchange Commission charged all seven specialists,
including LaBranche, with making $158 million from trading when they didn’t
need to step in and filling orders at levels that were inferior to the best
prices. Specialist firms settled with the regulator for $247 million.

The U.S. government’s pursuit of
criminal charges against 15 individual specialists for securities fraud went
nowhere. Some were acquitted while others saw their charges dismissed. One jury
conviction of a Fleet Specialist Inc. employee was overturned by a federal
judge, who said prosecutors hadn’t proved fraud. The guilty pleas of two others
were set aside.

More Peeks

After the scandal, the specialists’
role at the NYSE declined as trading became more automated and rules changed.
LaBranche never posted annual net income after 2006, and it sold its NYSE
market-maker business to London-based Barclays Plc (BCS) in 2010 and the rest of the company
to Cowen Group Inc. (COWN), a New York investment bank, in

The specialists have been replaced
by “designated market makers,” who no longer see all the orders coming into the
exchange and don’t have to wait until others trade, though they must continue
to smooth order imbalances and maintain what the NYSE describes as fair and
orderly markets.

Grasso, who became CEO in 1995,
defended the specialists, running interference for them with the media and the
government at the expense of investing in new technology to make its market
faster, said Alfred R. Berkeley, president from 1996 to 2000 of Nasdaq Stock Market Inc., the NYSE’s biggest rival for corporate

The decline of the traditional NYSE
reflected “regulatory policy, nothing the exchange management did,” Grasso


The NYSE was a men’s-only club until
1967, a place where brokers could leave their dress shoes on the stairs leading
to the trading floor after they changed into sneakers for the work day. It was
a place where paper orders, crumpled and discarded, would pile so high that
cleanup workers looked like they were shoveling snow.

Traders kept containers of talcum
powder in their desks, said James Maguire Jr., 49, who first worked on the NYSE
floor in 1979 as a college freshman on Christmas break. When famous visitors
arrived, one trader would distract the celebrity or CEO and another would shake
the talcum on their shoes. When New York Jets quarterback Richard Todd showed up in white
shoes, they used cocoa, he said.

“It was good-natured fun,” said
Maguire, who worked as a clerk, a broker and a specialist until 2004. “The idea
was that you may be a big shot in the board room or in politics, but you’re on
our turf. You’re one of the guys.”

The back-slapping extended to NYSE
governance, according to a 2003 letter by William H. Donaldson, 80, chairman
and CEO of the Big Board from 1990 to 1995, and chairman of the SEC, the
exchange’s chief regulator, from 2003 to 2005.


Until 2003, the CEOs of 10
brokerages regulated by the NYSE sat on the exchange’s board, and half the
NYSE’s 12 public directors, designated to protect investors’ interests, were
presidents, CEOs or former CEOs of firms that traded on the exchange, such as
JPMorgan Chase & Co. Chief Executive Officer William B. Harrison Jr.

The board allowed Grasso to pick the
directors who set his compensation. One Grasso choice was Kenneth G. Langone,
the co- founder of Home Depot Inc., who became chairman of the compensation
committee. Grasso, in turn, sat on the board and compensation committee of Home

Grasso was hailed as a savior of
Wall Street for his work to restore the NYSE following the terrorist attacks of
Sept. 11, 2001, which halted U.S. equities trading for four days, the longest
shutdown since 1933. When terrorists flew two hijacked jetliners into the World
Trade Center’s twin towers, just blocks away, Grasso used the public-address
system to urge staff and traders to remain calm.


“I saw their reaction to his voice,
and I was impressed,” Bill Silver, a floor trader, said in an interview six
days later. “He’s a respected authority there and they trusted his judgment.”

Grasso was “spectacular” in working
to reopen the exchange, said Harvey L. Pitt, who at the time was chairman of
the SEC.

“He called me the first thing every
morning and the last thing every night, to check in with me, find out what I
wanted, to offer suggestions,” Pitt said.

The attacks highlighted the
vulnerabilities of concentrating so much of the U.S. equities market in one

The aftermath of the restoration
also provided an early glimpse into the compensation issue that would result in
Grasso’s ouster. He received a $5 million bonus in 2001, in part for his work
in reopening the exchange.

Million Package

Kurt Viermetz, a JPMorgan vice
chairman at the time, praised Grasso at a dinner in June 2003 for his role in
restoring the capital markets — with one catch.

“For some, our American hero was a
little overpaid,” Viermetz added.

Later in 2003, the NYSE board went
further, awarding Grasso $140 million — enough for almost 8,000 years of
tuition at New York-based Pace University, where Grasso was given an honorary
degree. As Grasso’s predecessor as CEO of the NYSE, Donaldson had received
annual pay of about $2 million.

After he found out about Grasso’s
compensation, which followed the specialist scandal, Donaldson, Pitt’s
successor as SEC chairman, demanded an explanation. “Grasso’s pay package
raises serious questions regarding the effectiveness of the NYSE’s current
governance structure,” Donaldson wrote in a letter to the NYSE board.


“In my opinion, nobody did anything
wrong except there were judgments made about compensation that people can
debate,” Harrison, the former JPMorgan CEO, said in an interview. “A lot of
people thought it was too much. Some people didn’t.” Harrison wouldn’t say
which side he came down on.

Institutional investors trading on
the NYSE, however, had few qualms about questioning the board for paying Grasso
so much, and some called for Grasso to quit, which he did.

Grasso had previously lobbied the
NYSE board to oust Donaldson, according to Charles Gasparino’s book, “King of
the Club,” and “Donaldson had a long memory,” Pitt said. “This was his chance
to get even.”

In an interview, Donaldson said
there was nothing personal about his battle with Grasso over the pay package.

“It was a tough thing to do,”
Donaldson said. “I felt this was a really bad situation, a self-regulatory
agency was writing rules for corporate America and not having any guidelines
for its own governance.”

Grasso’s compensation didn’t
constitute a scandal, Langone said in an interview.

Last Emperor’

“There was nothing illegal or
criminal about it, or unethical, which is even better,” he said. “It was the
members deciding how much Mr. Grasso was worth, and he was paid that amount of
money. It was the members’ money. It wasn’t some charity.”

“Grasso was the one person who
personified the institution, who knew everyone and knew where every body was
buried,” said John C. Coffee, a securities professor at Columbia University’s
law school in New York. “Dick Grasso was the last emperor.”

The Grasso compensation and
specialists scandals reduced the NYSE’s political power and gave the
Donaldson-led SEC more leverage to push through new rules that reshaped the
U.S. stock markets, according to James Angel, a finance professor at the
McDonough School of Business at Georgetown University in Washington.

and Buggy

“You can’t have your monopoly and
eat it, too,” Angel said. “In 2001 they were operating a horse-and-buggy market
where humans screamed at humans. When you add the scandals, that led to a
regulatory environment that made it easier for competitors to compete.”

In 2005, the SEC approved Regulation NMS, for national market system. The
new rules were designed to drive down trading costs for investors and increase
competition among exchanges, eroding the dominance of NYSE and Nasdaq’s
exchanges by moving trading onto as many as 50 markets.

Reg NMS was the final nail in the
coffin for the old New York Stock Exchange.

It altered and expanded the
trade-through rule, which gave exchanges 30 seconds to fill orders sent by a
rival. Critics said the rule led to delayed executions, cherry-picked orders
and sometimes less-than-best prices for investors. Reg NMS gave a boost to
faster electronic markets and increased competition for the NYSE. Prices on
exchanges that weren’t fully electronic, like the NYSE at the time, could be
ignored, the SEC said.

Direct Edge

Nasdaq, which had faced competition
from electronic trading systems since at least the late 1990s, acquired the
Inet electronic equity market in 2005 and consolidated U.S. equity trading onto
the company’s platform within a year. The company had bought Brut, an early
electronic communications network, or ECN, in 2004.

Since 2000, Bats Global Markets,
based in Lenexa, Kansas, and Jersey City,
New Jersey-based Direct Edge Holdings LLC, each of which now runs two stock
exchanges, have grabbed 18 percent of a marketplace that used to be dominated
by the NYSE.

The owner of the Big Board increased
its commitment to electronic trading in 2005 when it announced it would buy
Archipelago Holdings Inc., a Chicago-based electronic exchange operator.

Bloomberg LP, the parent company of
Bloomberg News, operates Bloomberg Tradebook, an electronic trading system.


While all this market fragmentation
drove trading costs down, it also has been blamed for the May 6, 2010, market
free- fall. Between 2:40 p.m. and 3 p.m. New York time that day, a plunge in
stock prices erased $862 billion of market value. Accenture Plc (ACN), a Dublin-based technology
consulting firm, fell as low as a penny from about $41.

The decline was triggered partly by
one firm’s trade in stock-index futures, according to a study released Oct. 1
by the SEC and the U.S. Commodity Futures Trading Commission. The trading
algorithm employed by the firm, identified by two people with knowledge of the
findings as Overland Park, Kansas-based Waddell & Reed Financial Inc. (WDR), sparked the rapid selling of stock
futures because it took into account volume but not price or time, the report

Volume increased as high-frequency
traders, who buy and sell based on split-second price movements, traded as
stock futures fell, prompting the mutual fund to increase its sell orders to the
market. Disparate rules across stock exchanges and delays in the dissemination
of trading data, especially for companies listed on the Big Board, led to
confusion in the equities market, the report said.

a Vacuum

“What we learned is that there are
so many venues that trade the same product and don’t have the same rules,”
Grasso said. That created a “vacuum” on May 6, he said. “The institutional
difference is profound.”

The flash crash highlighted a
trade-off that continues. Buying and selling stocks is cheaper and faster, but
can also be riskier.

“People sometimes feel that the
computers are too much in control,” John A. Carey, a Boston-based money manager at Pioneer Investments, which oversees about $250 billion,
said of exchanges in general. “In the old days, at least you had specialists on
the floor who could get a sense of what was going on and could calm people

Since the May 6 crash, the SEC has
instituted so-called circuit breakers for some of the largest stocks and almost
350 exchange-traded funds. If a security drops 10 percent or more in five
minutes, trading in those shares stops for five minutes. The SEC is in the
process of altering the curbs to limit price moves instead of halting stocks.

Yank Money

That didn’t stop the acceleration of
investors fleeing equity markets that began with the collapse of confidence in
credit markets following the Sept. 15, 2008, bankruptcy of Lehman Brothers Holdings
Inc. (LEHMQ)

Retail investors pulled $96.6 billion from U.S. stock funds between May and
December 2010, even as the S&P 500
rose 6 percent, according to data from Washington-based Investment Company
Institute and Bloomberg. That represented 2.3 percent of the 2010 year-end
assets in U.S. equity funds, ICI data show.

At the same time, bond funds were
gaining, with about $121 billion in inflows during the same period. It wasn’t
until the start of 2011 that investors returned to stocks, adding $11.4 billion
in January, the most in 20 months. They withdrew more than $5 billion in March
and have taken money out every week of May and June, ICI data show.


Under John A. Thain, who was
president of Goldman Sachs before he became NYSE CEO in January 2004, the
exchange went public by completing its merger with Archipelago in March 2006,
making multi-millionaires of the specialists and brokers who owned seats on the
NYSE. Thirteen months later the company paid 9 billion euros for Euronext NV,
which operated exchanges in Brussels, Lisbon, Paris and Amsterdam, where it was
based, and the Liffe derivatives exchange.

Derivatives offer NYSE Euronext’s
biggest operating margin and are an increasing share of the company’s profit.
As late as the first quarter of 2009, NYSE Euronext said stock trading and
listings made up 61 percent of net revenue. In the first quarter of 2011, that
unit contributed 48 percent, while 35 percent came from derivatives trading and
17 percent from its technology division, according to a regulatory filing.

After the merger with Deutsche
Boerse, the derivatives business would account for 37 percent of the combined
company’s revenue, while stock trading and listings would shrink to 29 percent,
the company said at an April shareholder meeting, citing 2010 pro forma data.


Changes have swept out the
industry’s clubby atmosphere, said Berkeley, formerly of Nasdaq and now
chairman of Pipeline Trading Systems LLC in New York.

“There were WASP cliques, Jewish
cliques and Irish cliques when I came into the business in the early 1970s,”
Berkeley said. “Technology blew that away. Technology doesn’t care what color
you are. It cares how much you know.”

Technology has also made the NYSE
floor “way quieter” than it used to be, said Maguire, who told the talcum-powder story.

“When I walk in now, there’s that
absence of the buzz,” he said. “The business is still out there, but it’s being
done by computers.”

Those computers are located in a
high-security building on a neatly landscaped 28-acre (113,300 square meters)
former quarry in Mahwah, a northern New Jersey crossroads just south of the New
York state border. Everything there is big. Pipes 20 inches (51 centimeters) in
diameter bring water to cool the computers. The 20 surge protectors that guard
against power outages are each as big as a Hummer H4. Generators on hand in
case the facility loses utility power can keep cranking electricity on their


Brokerages and high-speed trading
firms can pay a basic fee of $8,000 a month to have their
computer servers hooked up to the trading grid, where orders are executed,
according to the NYSE Web site.

The landscape is very different from
the one Dick Grasso left eight years ago.

“You know what? You never look
back,” Grasso said, wearing a black suit with a pink tie and a 9/11 lapel pin
depicting an American flag on a New York Police Department badge, during a
recent interview. “The tape goes in one direction.” He thrust out his hand and
moved it slowly, following an invisible stock ticker. “Remember that. It only
goes in one direction.”

All US Gold Gone? Russia says IMF Chief Jailed for Discovery.

By: Sorcha Faal

According to a FSB secret report, Strauss-Kahn had become “increasingly concerned” earlier this month after the United States began “stalling” its pledged delivery to the IMF of 191.3 tons of gold agreed to under the Second Amendment of the Articles of Agreement signed by the Executive Board in April 1978 that were to be sold to fund what are called Special Drawing Rights (SDRs) as an alternative to what are called reserve currencies.

This FSB report further states that upon Strauss-Kahn raising his concerns with American government officials close to President Obama he was ‘contacted’ by ‘rogue elements’ within the Central Intelligence Agency (CIA) who provided him ‘firm evidence’ that all of the gold reported to be held by the US ‘was gone’.

Upon Strauss-Kahn receiving the CIA evidence, this report continues, he made immediate arrangements to leave the US for Paris, but when contacted by agents working for France’s General Directorate for External Security (DGSE) that American authorities were seeking his capture he fled to New York City’s JFK airport following these agents directive not to take his cell-phone because US police could track his exact location.

Once Strauss-Kahn was safely boarded on an Air France flight to Paris, however, this FSB report says he made a ‘fatal mistake’ by calling the hotel from a phone on the plane and asking them to forwarded the cell-phone he had been told to leave behind to his French residence, after which US agents were able to track and apprehend him.  

Within the past fortnight, this report continues, Strauss-Kahn reached out to his close friend and top Egyptian banker Mahmoud Abdel Salam Omar to retrieve from the US the evidence given to him by the CIA. Omar, however, and exactly like Strauss-Kahn before him, was charged yesterday by the US with a sex crime against a luxury hotel maid, a charge the FSB labels as ‘beyond belief’ due to Omar being 74-years-old and a devout Muslim.

In an astounding move puzzling many in Moscow, Putin after reading this secret FSB report today ordered posted to the Kremlin’s official website a defense of Strauss-Khan becoming the first world leader to state that the former IMF chief was a victim of a US conspiracy. Putin further stated, “It’s hard for me to evaluate the hidden political motives but I cannot believe that it looks the way it was initially introduced. It doesn’t sit right in my head.”

Interesting to note about all of these events is that one of the United States top Congressman, and 2012 Presidential candidate, Ron Paul [photo bottom left] has long stated his belief that the US government has lied about its gold reserves held at Fort Knox.  So concerned had Congressman Paul become about the US government and the Federal Reserve hiding the truth about American gold reserves he put forward a bill in late 2010 to force an audit of them, but which was subsequently defeated by Obama regime forces.  

When directly asked by reporters if he believed there was no gold in Fort Knox or the Federal Reserve, Congressman Paul gave the incredible reply, “I think it is a possibility.”

Also interesting to note is that barely 3 days after the arrest of Strauss-Kahn, Congressman Paul made a new call for the US to sell its gold reserves by stating, “Given the high price it is now, and the tremendous debt problem we now have, by all means, sell at the peak.”

Bizarre reports emanating from the US for years, however, suggest there is no gold to sell, and as we can read as posted in 2009 on the ViewZone.Com news site:

“In October of 2009 the Chinese received a shipment of gold bars. Gold is regularly exchanges between countries to pay debts and to settle the so-called balance of trade. Most gold is exchanged and stored in vaults under the supervision of a special organization based in London, the London Bullion Market Association (or LBMA). When the shipment was received, the Chinese government asked that special tests be performed to guarantee the purity and weight of the gold bars. In this test, four small holed are drilled into the gold bars and the metal is then analyzed.

Officials were shocked to learn that the bars were fake. They contained cores of tungsten with only a outer coating of real gold. What’s more, these gold bars, containing serial numbers for tracking, originated in the US and had been stored in Fort Knox for years. There were reportedly between 5,600 to 5,700 bars, weighing 400 oz. each, in the shipment!”

To the final fate of Strauss-Kahn it is not in our knowing, but new reports coming from the United States show his determination not to go down without a fight as he has hired what is described as a ‘crack team’ of former CIA spies, private investigators and media advisers to defend him.

To the practical effects on the global economy should it be proved that the US, indeed, has been lying about its gold reserves, Russia’s Central Bank yesterday ordered the interest rate raised from 0.25 to 3.5 percent and Putin ordered the export ban on wheat and grain crops lifted by July 1st in a move designed to fill the Motherlands coffers with money that normally would have flowed to the US.

The American peoples ability to know the truth of these things, and as always, has been shouted out by their propaganda media organs leaving them in danger of not being prepared for the horrific economic collapse of their nation now believed will much sooner than later.    


Market Brief for February 2011

 sent in to us by


Market Brief

16th. February 2011

 The market is at a very interesting juncture. On all my favourite indicators (A/D Line, McClennan Summation, Slow Stochastics, Fast Stochastics and MACD) the current bull run is very much overbought. Given that this highly profitable move has been in place since last September it is logical that we are due a correction, but there is no sign yet of any technical breakdown. If you are not in the market or have been stopped out from positions I would hold my powder dry for the moment as the risk/reward ratio is negative.

Of particular note I would point out that despite indications of slight consumer recovery, inflation creep and mounting tensions in the Middle East the price of oil has remained low. I do not think this situation can long continue. When oil does finally takes off expect a sharp market reaction because the wriggle room available to the FED to hold interest rates low will be seriously diminished. Once interest rate increases commence a new dynamic will enter the scene. If this trend change is not timed to perfection by Mr. Bernanke and friends serious valuation problems could ensue, increasing market instability.

The sovereign debt elephant in the European parlour room has not gone away but has merely learned some social graces since its tantrum last autumn. When Euro rates start their inevitable rise, further pressure will be placed on Euro-zone nations trying to service exploding national debt. Eventually the outcome will have to involve some form of agreed default and rate discount. Without these safety valves the Euro project will remain vulnerable. Current talks in Brussels are beginning to attempt to grasp this possibility. In Ireland, in particular, the outcome is fundamental to the recent IMF/EU bailout plan working. It order to keep Irish economic growth figures on track  the rate of interest agreed in that disastrous package must be brought down from the existing punitive 5.9% level. Ireland goes to the polls the 25th. of the month and the first item on the agenda of Mr. Enda Kenny, the politician expected to win the election, is to renegotiate draw-down rates on European Financial Stabilization Funds. If this endeavour is unsuccessful additional taxes will have to be earmarked for debt repayments, seriously deflating an already stalled Irish economy.  Where Ireland goes the Euro will follow. Success in negotiations for Ireland will mean other Euro stressed countries like Greece, Portugal and Spain will also obtain some relief when issuing new sovereign debt.

In an article in 2008 on contracts for difference I mentioned that if New York physical market makers did not embrace CFD’s and new technological development the survival of the NYSE, as we knew it, could be called into question. I did not think events would move as fast as they have. The buyout of the hallowed NYSE last week by Europeans will see huge changes in the type of trading instruments and platforms being presented to Americans. Order matching and funding technologies are developing fast and it is no longer possible for any group, however powerful, to ignore quantum changes in trading execution. The main liquidity behind this evolution is coming from the off-shore, 18 trillion valued, Euromarket and this is why London (the center of the Eurobond market) is fast becoming the new financial capital of the world.  I anticipate that the next American institution to come under threat will be the Chicago Exchange. This is due to the fact that spread-contracts, instruments that actually have no time expiration, have all but rendered options obsolete.

 Dow Jones Industrial 3 Day Chart:

United States Oil Fund 9 Day Chart:

 Advance Decline Line 3 Day Chart:

 McClennan Summation Index 3 Day Chart:


As an Options trader for many years I am inclined to agree with you on the downward trend of the popularity of options and the new spread contracts are a much better tool.

Using options was akin to using blocks of ice or trying to move when the ground under you was moving in the opposite direction.

The overall Dow direction is in my mind climbing the wall of worry and I detect no change or obvious technical breakdown, about a month ago the Transports did take a breather but are now back in a upward direction again. How long this will last nobody can say but everybody is expecting a correction and a 10%-12.5 % would be good for the market.

Personally I believe we will see still have to see the market highs for the year .

Oil sorry to say should be in the $130 a barrel before long and I still expect to see the euro gain on the dollar.


Citi and Bac are still my favourite and currently up approx 30% on invested funds so far this year

Due to the election I am not aggressive in the market place.   

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