China Won’t Revalue the Yuan – Washington remains naive to expect any significant rise in the value of the yuan, and Beijing remains disingenuous in offering such a prospect in the first place. Can USA and China mutually destroy their economies?

Mundell Says U.S. Action on Yuan Rate Would Be a `Disaster’ – Nobel-Prize winning economist Robert Mundell said U.S. legislation to press China to raise the value of the yuan would be a “disaster” and fail to narrow the trade deficit between the two nations. This genius helped design the Europe’s single currency and we all know how “well” that turned out. Any other bright ideas, a solution to the undervalued yuan? He doesn’t give any…

Weekly Insider Buying and Selling by S&P 500 Companies – Insiders are fleeing the stocks…

Central Banks Gold Disposals Drop 40% in Accord, World Gold Council Says – Central banks and the International Monetary Fund sold about 94.5 metric tons of gold in the year that ended yesterday, the lowest amount under an agreement that began in 1999, according to data from the World Gold Council. Why are they hoarding gold?

UK economy ‘on the mend’, says IMF – International Monetary Fund praises coalition’s debt reduction plans and forecasts 2% growth in 2011.

Spend for Britain: Bank tells UK’s 22million savers to boost faltering economy - Britain’s 22million savers have been told to give up on the idea of living off their income and start ‘eating into’ their capital. LOL. Sound as a good idea, never mind, that was exactly, what people were doing till the crash of 2008. Doing the same thing over and over again and expecting different results is MADNESS (as Einstein defined it)

Dow `Super Boom’ to Drive Average to 38,820 by 2025, Hirsch Says – Bet that title got your attention. Big numbers attached to the world’s most-storied stock index have a way of doing that, though most induce chuckles in hindsight. Think of the best seller Dow 36,000 and the even more ambitious but lesser-known Dow 40,000 and Dow 100,000, all published 11 years ago...LOL…and we all be millionaires because the dollar will buy what is worth a penny today

Is Gold in a Bubble? – The U.S. dollar is what is overvalued, and the rising price of gold is simply sounding an alarm that the world’s reserve currency is in deep trouble.

Investors Are Deaf to the Screams of Gold, Cotton: Mark Gilbert – “What makes the gold story so interesting is that bullion has so many different correlations — with inflation, with the dollar, with interest rates, with political uncertainty,” according to David Rosenberg, chief economist at Gluskin Sheff & Associates in Toronto. “This year, for example, gold has shifted from being a commodity toward being a currency — the classic role as a monetary metal that is no government’s liability.”

Barrick says gold could “easily” exceed $1,500/oz – Barrick Gold, the world’s number one miner of the precious metal, said on Monday gold prices could “easily” outperform recent record highs to rise above $1,500 an ounce in the next year.

Gold is the final refuge against universal currency debasement – States accounting for two-thirds of the global economy are either holding down their exchange rates by direct intervention or steering currencies lower in an attempt to shift problems on to somebody else, each with their own plausible justification. Nothing like this has been seen since the 1930s.

Fed Will Boost Balance Sheet by $500 Billion: Survey – About 70 percent of the 67 respondents, which include economists, strategists and fund managers, believe the Fed will begin quantitative easing again. No wonder why the price of gold is going up

China Currency Measure Set for Vote in U.S. House - We cannot wait any longer to level the playing field for U.S. businesses and protect American manufacturing jobs…The beginning of trade wars?

Ahead of the Bell: China imposes tariff on chicken – Chicken producers shares could fall after China imposes duties on US chicken imports

US Is ‘Practically Owned’ by China: Analyst – “The 200 years when Britain and the US were the top two economies were an aberration and that will change,” Winnifrith said.

Companies Reluctant to Hike Prices Despite Rising Costs – Commodity prices and other corporate costs are headed higher, but many consumers refuse to pay more for products. The result could be weaker profits and slower hiring. That is one reason that we do not see inflation yet. But for how long before everything collapses again?

China: Proudly Demolishing Buildings Before Completed In Pursuit Of The Glorious Housing Bubble Perpetual Engine – Blowing up empty building before they are even finished and rebuilding them. Rinse. Repeat. With pictures after the jump,,

The Democratic Tax Retreat – The economic policies of the last four years are being repudiated.

The Tax Hikes Cometh – Grab your wallet.

John Kerry: Democrats’ woes stem from uninformed voters – “We have an electorate that doesn’t always pay that much attention to what’s going on so people are influenced by a simple slogan rather than the facts or the truth or what’s happening,” Duh!

Pentagon Destroys Copies of Controversial Memoir Written by Army Officer – The Pentagon has burned 9,500 copies of Army Reserve Lt. Col. Anthony Shaffer’s memoir “Operation Dark Heart,” his book about going undercover in Afghanistan. After the book burning what should we expect next from our government?….

FBI raids homes and offices of anti-war activists – The FBI conducted multiple raids Friday, targeting the homes and offices of anti-war activists in Minneapolis and Chicago. Kiss freedom of speech and expression goodbye…

Czech president tells UN to stay out of economics - Klaus opposes calls for increased UN role in economics. He says that the anti-crisis measures that have been proposed and already partly implemented follow from the assumption that the crisis was a failure of markets and that the right way out is more regulation of markets. TCE Agrees

Loretta Sanchez: ‘The Vietnamese’ are after my seat – “The Vietnamese and the Republicans are, with an intensity, trying to take this seat from which we have done so much for our community — to take this seat and give it to this Van Tran, who is very anti-immigrant and very anti-Hispanic,” Sanchez said in an interview with Univision. It is the people’s seat, you racist swine. Hope they throw you out.

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From Reuters
by Emily Kaiser

One day after the Federal Reserve got investors thinking about uncomfortably low inflation, Starbucks announced it was raising prices on some of its coffee drinks.

Anheuser-Busch is planning price hikes on some of its Budweiser beers later this year (although it’s also going to give away free samples to 500,000 people at bars and restaurants in the coming weeks).

So is inflation dangerously low or is it creeping higher?

It depends where you look.

The Fed said last week that inflation was below its comfort level and likely to stay that way for some time. The central bank said it was prepared to step in if necessary to ensure that this doesn’t morph into something serious like deflation.

The Fed’s favorite inflation gauge — the ineloquently named core PCE price index — is due on Friday and is likely to show a slight uptick for September, according to a Reuters poll. On a year-over-year basis, the index is expected to hold steady at 1.4 percent, below the Fed’s comfort zone of 1.7 percent to 2 percent.

The measure excludes food and energy prices, which the Fed considers too volatile to provide a reliable signal on future price direction. But food, energy and other major commodity groups have soared in the past couple of months, which explains why companies like Starbucks are raising prices.

The Reuters-Jefferies CRB Index .CRB, which tracks commodity prices, hit an 8-month high last week. Gold prices hit a record level and other commodities, including soybeans and cotton, notched multi-year peaks.

This is causing trouble for commodity-sensitive emerging markets such asRussia. Its central bank meets on Tuesday and is widely expected to hold rates steady. But it may express growing concern about inflationary pressures after a summer drought devastated the country’s wheat crop.

It is less clear what these rising commodity prices will mean for the U.S. economic recovery and the Fed’s next policy move. High unemployment and sluggish consumer spending mean many companies cannot follow Starbucks’ lead and pass higher raw material costs along to consumers.

Read the rest of this entry »

From Bloomberg
By Frederic Tomesco

U.S. President Barack Obama and his administration weakened the country’s economy by seeking to foster growth instead of paying down the federal debt, said Nassim Nicholas Taleb, author of “The Black Swan.”

“Obama did exactly the opposite of what should have been done,” Taleb said yesterday in Montreal in a speech as part of Canada’s Salon Speakers series. “He surrounded himself with people who exacerbated the problem. You have a person who has cancer and instead of removing the cancer, you give him tranquilizers. When you give tranquilizers to a cancer patient, they feel better but the cancer gets worse.”

Today, Taleb said, “total debt is higher than it was in 2008 and unemployment is worse.”

Obama this month proposed a package of $180 billion in business tax breaks and infrastructure outlays to boost spending and job growth. That would come on top of the $814 billion stimulus measure enacted last year. The U.S. government’s total outstanding debt is about $13.5 trillion, according to U.S. Treasury Department figures.

Obama, 49, inherited what the National Bureau of Economic Research said this week was the deepest U.S. recession since the Great Depression. Even after the stimulus measure and other government actions, the U.S. unemployment rate is 9.6 percent.

Governments globally need to cut debt and avoid bailing out struggling companies because that’s the only way they can shield their economies from the negative consequences of erroneous budget forecasts, Taleb said.

Errant Forecasts

“Today there is a dependency on people who have never been able to forecast anything,” Taleb said. “What kind of system is insulated from forecasting errors? A system where debts are low and companies are allowed to die young when they are fragile. Companies always end up dying one day anyway.”

Taleb, a native of Lebanon who gave his speech in French to an audience of Quebec business people, said Canada’s fiscal situation makes the country a safer investment than its southern neighbor.

Canada has the lowest ratio of net debt to gross domestic product among the Group of Seven industrialized countries and will keep that distinction until at least 2014, the country’s finance department said in March. Canada’s ratio, 24 percent in 2007, will rise to about 30 percent by 2014. The U.S. ratio, now above 40 percent, will top 80 percent in four years, the department said, citing IMF data.

“I am bullish on Canada,” he told the audience. “I prefer Canada to the U.S. or even Europe.”

Mortgage Interest

Canada’s economy also benefits from the fact that homeowners, unlike their U.S. neighbors, can’t take mortgage interest as a tax deduction, Taleb said. That removes the incentive to take on too much debt, he said.

“The first thing to do if you want to solve the mortgage problem in the U.S. is to stop making these interest payments deductible,” he said. “Has someone dared to talk about this in Washington? No, because the U.S. homebuilders’ lobby is hyperactive and doesn’t want people to talk about this.”

Taleb also criticized banks and securities firms, saying they don’t adequately warn clients of the risks they run when they invest their retirement savings in the stock market.

‘Have Fun’

“People should use financial markets to have fun, but not as a depository of value,” Taleb said. “Investors have been deceived. People were told that markets go up regularly, but if you look at the last 10 years that’s not been the case. The risks are always greater than what people are told.”

Asked by an audience member if returns such as those posted by Berkshire Hathaway Inc. Chief Executive Officer Warren Buffett — who amassed the world’s third-biggest personal fortune through decades of stock picks and takeovers — are the product of luck or talent, Taleb said both played a part.

If given a choice between investing with Buffett and billionaire investor George Soros, Taleb also said he would probably pick the latter.

“I am not saying Buffett isn’t as good as Soros,” he said. “I am saying that the probability Soros’s returns come from randomness is much smaller because he did almost everything: he bought currencies, he sold currencies, he did arbitrages. He made a lot more decisions. Buffett followed a strategy to buy companies that had a certain earnings profile, and it worked for him. There is a lot more luck involved in this strategy.”

Soros gained fame in the 1990s when he reportedly made $1 billion correctly betting against the British pound.

Taleb’s 2007 best-seller, “The Black Swan: The Impact of the Highly Improbable,” argues that history is littered with rare, high-impact events. The black-swan theory stems from the ancient misconception that all swans were white.

A former trader, Taleb teaches risk engineering at New York University and advises Universa Investments LP, a Santa Monica, California-based fund that bets on extreme market moves.

To contact the reporter for this story: Frederic Tomesco in Montreal at tomesco@bloomberg.net.

To contact the editor responsible for this story: David Scanlan at dscanlan@bloomberg.net

Indian immigrants to US find better life back in India - Thousands of Indian immigrants are choosing to leave the United States in the midst of the recession and move back to India to find better jobs.

“16 countries sharing one currency is nonsense” – The European ministers recently agreed on a 110-billion euro rescue package for Greece, hoping this would prevent a default and stop the currency’s crisis from spreading through the rest of the bloc, and Germany has been opposed to the idea from the very beginning.

Job Loss Looms as Part of Stimulus Act Expires – The federal program has helped employ nearly 130,000 adults and has paid for nearly an equal number of summer jobs for young people, according to an analysis by the Center for Budget and Policy Priorities, a liberal policy institute in Washington.

Unclaimed corpses raise body counts at Greensboro hospital – A hospital in Greensboro has seen unclaimed bodies stack up because family members can’t afford to pay burial costs. Remember the story about Detroit’s unclaimed dead bodies from a year ago? Detroit: Too broke to bury their dead

Underwear Economics – There is no Santa Claus. The next best thing is Wal-Mart. And Wal-Mart says we’re all getting underwear for Christmas.

New Homebuyer Tax Credit Arrives but Is Destined to Fail – A buyer planning to occupy a home foreclosed by Fannie or Freddie can get a closing credit of as much as 3.5% of the purchase amount, while listing agents stand to earn a $1,500 bonus for purchase contracts signed by the end of 2010. Couple the offer with a low-money-down mortgage from the Federal Housing Administration, and voilà!: government sanctioned, subprime, no-money-down loans, all stamped with the full backing of Uncle Sam (read: taxpayers).

Who gets hurt by high house prices? All of us – ...high house have all kinds of insidious, damaging effects. As a result not even the baby boomers can really be said to have benefited. They may have lost out less than other groups, but ultimately everybody loses from high house prices.

Default Is In Our Stars – In the end, I’d argue, what must happen is an effective default on a significant part of debt, one way or another. The default could be implicit, via a period of moderate inflation that reduces the real burden of debt; that’s how World War II cured the depression. Or, if not, we could see a gradual, painful process of individual defaults and bankruptcies, which ends up reducing overall debt. Paul Krugman

‘Macro’ Forces in Market Confound Stock Pickers - More and more investors aren’t bothering to pore through corporate reports searching for gems and duds, but are trading big buckets of stocks, bonds and commodities based mainly on macro concerns. As a result, all kinds of stocks—good as well as bad—are moving more in lock step.

Credit Unions Bailed Out – Two years after the peak of the financial crisis, the federal government swooped in to stabilize a crucial part of the credit-union sector battered by losses on subprime mortgages. Regulators announced Friday a rescue and revamping of the nation’s wholesale credit union system, underpinned by a federal guarantee valued at $30 billion or more. Wholesale credit unions don’t deal with the general public but provide essential back-office services to thousands of other credit unions across the U.S