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    Daily Digest – May 2

    by Davos

    Saturday, May 2, 2009, 5:23 PM

  • Waves and Tides Next Frontier for Energy Exploration (Video, promising)
  • Charlie Rose: Lionel Barber, editor “Financial Times" (Video)
  • Dr. Henry Niman (Video A(H1N1) Google Tracking)
  • Homeland Security: No Orders to Border, Airport Agents Forbidding Surgical Masks
  • DebtSki, the game to get kids aware of debt
  • Filth: Top Senate Democrat: bankers "own" the U.S. Congress (H/T DrKrbyLuv)
  • If You Believe – Banks Are Recovering
  • Treasuries are getting crushed
  • CDS contracts and the implosion of several Eastern European economies
  • Rogers Interview on Swine Flu, Automakers, Commodities (Video, Jim Rogers * * * *)

 

Economy

Waves and Tides Next Frontier for Energy Exploration (Video, promising)

Charlie Rose: Lionel Barber, editor “Financial Times" (Video)

Dr. Henry Niman (Video A(H1N1)

Dr. Henry Niman (Video A(H1N1) Google Tracking)

Homeland Security: No Orders to Border, Airport Agents Forbidding Surgical Masks

The Department of Homeland Security on Thursday refuted reports that it had told agents at U.S. airports and border checkpoints that they could not wear masks to protect from exposure to swine flu.

"The Department of Homeland Security has not issued an order saying our employees cannot wear masks. The health of our employees is of utmost importance to us. And today we are issuing department-wide guidance to our workforce," DHS spokeswoman Sara Kuban told FOX News

 

DebtSki, the game to get kids aware of debt

PGPF President Dave Walker and MTV’s Ross Martin appeared this morning in support of a new fiscal video game on ABC’s “Money Matters.” Martin said that two-thirds of college students are graduating with student loans, and that “today’s graduates are not graduating into a job market that’s embracing them with open arms.” Added Walker, “Young people represent our future. It’s important that they be informed, that they be engaged, that they be empowered.”

DebtSki is the new online flash-video game that spotlights the dangers of excessive debt. Piggy Banks, the game’s main character, maneuvers through increasingly difficult levels and obstacles as he makes the tough fiscal choices that young people face every day. Players have the chance to win money to put toward debt, boost their savings, or use in any other way they see fit. Each week through June 25, 2009, one winner will be chosen to receive $250 by simply playing the game and then entering to win.

 

Filth: Top Senate Democrat: bankers "own" the U.S. Congress (H/T DrKrbyLuv)

The ownership of the federal government by banks and other large corporations is effectuated in literally countless ways, none more effective than the endless and increasingly sleazy overlap between government and corporate officials. Here is just one random item this week announcing a couple of standard personnel moves:

Former Barney Frank staffer now top Goldman Sachs lobbyist

Goldman Sachs’ new top lobbyist was recently the top staffer to Rep. Barney Frank, D-Mass., on the House Financial Services Committee chaired by Frank. Michael Paese, a registered lobbyist for the Securities Industries and Financial Markets Association since he left Frank’s committee in September, will join Goldman as director of government affairs, a role held last year by former Tom Daschle intimate, Mark Patterson, now the chief of staff at the Treasury Department. This is not Paese’s first swing through the Wall Street-Congress revolving door: he previously worked at JP Morgan and Mercantile Bankshares, and in between served as senior minority counsel at the Financial Services Committee.

So: Paese went from Chairman Frank’s office to be the top lobbyist at Goldman, and shortly before that, Goldman dispatched Paese’s predecessor, close Tom Daschle associate Mark Patterson, to be Chief of Staff to Treasury Secretary Tim Geithner, himself a protege of former Goldman CEO Robert Rubin and a virtually wholly owned subsidiary of the banking industry. That’s all part of what Desmond Lachman — American Enterprise Institute fellow, former chief emerging market strategist at Salomon Smith Barney and top IMF official (no socialist he) — recently described as "Goldman Sachs’s seeming lock on high-level U.S. Treasury jobs."

 

If You Believe – Banks Are Recovering

The conspiracy theorists of the world believe the U.S. government faked the landing of Apollo 11 on the moon. They also believe 9/11 was an inside job, ordered by operatives within the government. The rationale of these acts was to distract the masses from the disastrous Vietnam War and the plummeting stock market, while escalating their control over the American people. I believe I have uncovered the largest conspiracy in history.

The government wants you to believe that banks are recovering, housing has bottomed, stimulus works, borrowing leads to prosperity and war leads to peace. President Obama and his cronies at Treasury and the Federal Reserve are trying to mislead the public regarding the health of our banking system. If you believe their spin on these issues, I have a structurally deficient bridge in Brooklyn I’d like to sell you.

The government has something up its sleeve this time. They are perpetrating the greatest fraud in the history of the world. The conspirators are Barack Obama, Timothy Geithner and the Treasury Department, Ben Bernanke and the Federal Reserve, Sheila Baer and the FDIC, and Barney Frank and the Democratic Congress. They have colluded to commit taxpayer funds to enrich bankers that brought down the financial system, without getting Congressional approval. They have delayed foreclosures and have tried to artificially prop up the housing market. They have poured billions of stimulus pork into the states praying for some of it not to be wasted. They have confiscated billions in taxpayer funds, bestowed them on reckless banks and forced them to lend it to anyone with a pulse, again.

The outrage from the public during the TARP confiscation, made it crystal clear to courageous Congressmen they didn’t want to vote on something requiring fortitude and bravery again. They have outsourced their obligation to safeguard their citizen’s tax dollars to unelected bureaucrats at Treasury and the Federal Reserve. They have already sacrificed their obligation to declare war to the Presidential branch. What is the point of having a Congress?

 

Treasuries are getting crushed

So let me reiterate my sentiments from yesterday here. It’s called inflation.

Nominal GDP. Nominal GDP itself decreased at a 3.5% annualized rate versus Q4. This compares to a 5.8% decrease in Q4 2008 over Q3 2008. Translation: the nominal slowdown was much less in Q1 than Q4 2008. The similarity in Q4 2008 and Q1 2009 real GDP data is explained wholly by changes in the GDP Deflator (there was a huge increase in the price index for non-durable goods in Q1).

So, my question is this. Are treasury yields rising because of:

A reflation play i.e. inflation is coming?
A recovery play i.e. we are seeing green shoots and that’s bearish for Treasurys?
A Fed play i.e. Bernanke is not going to do any more quantitative easing, or at least not enough to stop rates from rising?
A revulsion play i.e. too much debt is being issued?
Irrespective of why yielda are rising, it’s not good for a potential recovery.

 

CDS contracts and the implosion of several Eastern European economies

Let me pull these threads together. If one thinks that a bankruptcy of a systemically important organization in any country can proceed normally without the potential for mischief, one had better read Tett’s account.

What’s more, in the case of Chrysler and GM, the complexity of a Chapter 11 bankruptcy will be very large. The Obama team says “three months and you’re done.” That ain’t gonna happen. United took three years. LTV took five and Delphi, the auto parts maker is still in bankruptcy 4 years later. So, lets get realistic here.

Bringing this full circle, we come back to Europe. And there, we have a problem, – specifically, because what has happened in Ukraine is going to happen in places like Bulgaria, Latvia, Lithuania or Estonia.

In my view, the events in the home of Borat and the possibilities in Eastern Europe or with the U.S. automakers present a good example why Warren Buffett calls derivatives financial weapons of mass destruction.

The credit default swap market needs regulation – and fast.

 

Rogers Interview on Swine Flu, Automakers, Commodities (Video, Jim Rogers * * * *)

 

 

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