Emerging Economies Ready To Counter The Federal Reserve Latest Liquidity Injection

Emerging economies expressed their disappointment with the Fed which makes even more difficult a significant agreement on global misbalances and exchange rates in the coming G-20 summit next week in Seoul, Korea. Read more of this post

US Dollar Begins Crash in Response to QE2 as Gold Scores New High

Earlier this year, Lindsey Williams told Alex Jones the globalists would devalue the dollar and jack up the price of oil. Read more of this post

Gold Rises To Record $1400/oz On Renewed Inflation Worries

Gold prices rose to an all-time high within a few dollars of $1,400 an ounce on Friday as the U.S. Federal Reserve’s program to resume buying government bonds stoked inflation worries. Read more of this post

Leading Economist Says World Still Mired In Financial Crisis

inflationAn internationally renowned economist said on Wednesday that banks need to review their banking strategy following the global credit crunch, noting that the world has not yet recovered from the financial crisis.

“One look at banking is that banking is accepting credit and lending money,” said Souhail Elia, chairman of the ABC anti discrimination league in Nevada and chairman of Asian American leadership council for president Obama, speaking before a panel of Beirut’s top bankers and economic experts.
“To me, this is not the true definition of banking. To me, banking is the business of buying and selling money.” Read more of this post

Dollar Falls To 14-month Low Against Euro

euroThe dollar slid to a 14-month low against the euro on Wednesday as investor appetite for risk increased following upbeat comments from Intel Corp. and after a top Federal Reserve official indicated U.S. interest rates would likely remain low for a quite a while.

By early afternoon London time, the euro was trading 0.3 per cent higher at $1.4896, just down on the 14-month high of $1.4913 it hit earlier in the session.

Meanwhile, the dollar was 0.5 per cent lower against the Japanese currency at 89.20 yen. Read more of this post

Rate Cuts Around The World As Britain Launches Trillion Dollar Bailout

THE world’s major central banks last night [together for the first time in history] followed the Reserve Bank of Australia and cut interest rates in a co-ordinated effort to ease pressure on a still gridlocked global financial system.

Rate cuts by the US Federal Reserve, Bank of England and central banks in China, Europe, Canada, Sweden and Switzerland followed a $1.23 trillion rescue package in Britain which included the part-nationalisation of England’s eight biggest banks.

Within hours of the British bailout being announced, the Bank of England cut official interest rates by 0.5 of a percentage point to 4.5 per cent as part of the co-ordinated global effort. The US Fed reduced its key rate from 2 per cent to 1.5 per cent.

French President Nicolas Sarkozy said co-ordinated action was the only way to confront an “unprecedented financial storm”.

The move was designed to restore confidence and limit the spread of the crisis from financial markets to the real economy. The IMF yesterday cut its forecast for world growth next year to 3per cent, with growth of close to zero in industrialised countries. It warned it could fall much further, but it expects developing countries to maintain reasonable growth levels.

Cutting interest rates can stimulate economic growth and help restore confidence to markets. But doing so may undermine a currency as investors look for better returns elsewhere. The U.S. rate is now the second-lowest among the majors, higher only than Japan.

In other New York trading, the dollar fell to 1.1041 Canadian dollars from 1.1058, and slipped to 1.1340 Swiss francs from 1.1378.

Source – Australia Press Reports

Party’s Over As Financial Terrorism Takes Over Wall Street

The Crash of 2008, which is now wiping out trillions of dollars of our people’s wealth, is, like the Crash of 1929, likely to mark the end of one era and the onset of another.

The new era will see a more sober and much diminished America. The “Omnipower” and “Indispensable Nation” we heard about in all the hubris and braggadocio following our Cold War victory is history. Seizing on the crisis, the left says we are witnessing the failure of market economics, a failure of conservatism.

This is nonsense. What we are witnessing is the collapse of Gordon Gecko (”Greed Is Good!”) capitalism. What we are witnessing is what happens to a prodigal nation that ignores history, and forgets and abandons the philosophy and principles that made it great. A true conservative cherishes prudence and believes in fiscal responsibility, balanced budgets and a self-reliant republic. He believes in saving for retirement and a rainy day, in deferred gratification, in not buying on credit what you cannot afford, in living within your means.

Is that really what got Wall Street and us into this mess — that we followed too religiously the gospel of Robert Taft and Russell Kirk?

“Government must save us!” cries the left, as ever. Yet, who got us into this mess if not the government — the Fed with its easy money, Bush with his profligate spending, and Congress and the SEC by liberating Wall Street and failing to step in and stop the drunken orgy?

For years, we Americans have spent more than we earned. We save nothing. Credit card debt, consumer debt, auto debt, mortgage debt, corporate debt — all are at record levels. And with pensions and savings being wiped out, much of that debt will never be repaid. Our standard of living is inevitably going to fall. For foreigners will not forever buy our bonds or lend us more money if they rightly fear that they will be paid back, if at all, in cheaper dollars.

We are going to have to learn to live again without our means.

The party’s over

Up through World War II, we followed the Hamiltonian idea that America must remain economically independent of the world in order to remain politically independent.

But this generation decided that was yesterday’s bromide and we must march bravely forward into a Global Economy, where we all depend on one another. American companies morphed into “global companies” and moved plants and factories to Mexico, Asia, China and India, and we began buying more cheaply from abroad what we used to make at home: shoes, clothes, bikes, cars, radios, TVs, planes, computers. As the trade deficits began inexorably to rise to 6 percent of GDP, we began vast borrowing from abroad to continue buying from abroad. Read more of this post

Federal Reserve New Role – Sugar Daddy

Andrew Horowitz over at moneycentral.mns.com  writes an interesting article on the new role of the Federal Government.  

Calling them a sugar daddy, he isn’t to keen on the Fed’s bailing out large failing corporations at the expense of taxpayers because of bad financial decisions and risking investments. For a money manager I am surprised Mr Horowitz lumps the Federal Reserve as the US government when the former is a distinct separate entity from the US government controlling the monetary system. No wonder taxpayers monies are used to bail out these companies. Americans are tax heavily enough! There’s enough dough coming in!

FULL STORY

JPMorgan Cutting 55% Of Bear Stearns Staff

JPMorgan Chase & Co.’s chief executive confirmed Tuesday that the bank will be cutting more than half of the employees at Bear Stearns Cos., the struggling investment bank that JPMorgan agreed to buy in March.

At JPMorgan’s annual shareholder meeting, CEO James Dimon said in his opening remarks, “We’re retaining 45% of the Bear Stearns staff.”

Most of those job offers have already been made. Last week, Dimon said at a conference that it had offered jobs to 6,000 of the 14,000 Bear Stearns workers, and found positions outside the company for another 1,500.

Dimon has said that the acquisition of Bear Stearns will result in job cuts at JPMorgan, but would not say how many during Tuesday’s meeting.

JPMorgan stepped in in March to acquire Bear Stearns at the behest of the Federal Reserve to prevent a collapse of the investment bank that could have potentially damaged the global financial system, which has already been slammed by the troubled mortgage market.

With that acquisition comes all of Bear Stearns’ mortgage-linked assets.

The deal “is a very risky and tough proposition,” Dimon said Tuesday. But he reiterated that he believes Bear  will add about $1 billion to JPMorgan’s  earnings by 2009.

The deal is expected to be completed the weekend of June 1, after a shareholder vote on May 29. 

Source – CNNMoney.com Read more of this post

JPMorgan Offers Bear Stearn’s Best Brokers Incentives To Stay

JPMorgan Chase & Company is offering bonuses to the top brokers at Bear Stearns Cos. to get them to stay with the company after it is acquired, JPMorgan said Tuesday. The packages, which would go into effect when JPMorgan’s buyout is completed, are aimed at keeping Bear Stearns’ best-performing brokers from leaving for another investment bank. JPMorgan on Monday increased its offer for Bear Stearns from US$2 per share to US$10 per share.

“It’s been a challenging time for their brokers, and we want to make sure they know our desire to continue with the business,” said Jes Staley, chief executive of JPMorgan’s Asset Management Group.

 Bear Stearns employees have seen most of their stockholdings get wiped out after JPMorgan this month offered to buy the struggling investment bank for a small fraction of what it was valued at a few weeks ago.

The package offers are a gesture to tell the brokers to ‘hold tight’,” Staley said. “Our hope is to keep all the talented Bear brokers who are there.” Staley would not confirm how much the bonuses were worth.

Top performers only

But a person close to the matter, who spoke on condition of anonymity due to the private nature of the negotiations, said that cash-and-stock bonuses of as much as 100 per cent of annual output have been offered to top-performing Bear Stearns brokers.

The top performers are defined as those who earned at least US$500,000 in commissions and fees over the past year.

Brokers earning US$250,000 to US$500,000 in commissions and fees will receive half their annual production, the person confirmed. And advisers will get an additional bonus based on the average annual rise in their production in the next three years.

Brokers producing less than US$250,000 have not been offered a retention package.

On Monday, JPMorgan tried to appease disgruntled Bear Stearns employees by raising its buyout price fivefold. Bear Stearns employees – who collectively own about one-third of the embattled investment bank – have a great deal of their wealth tied up in Bear Stearns stock, which was worth nearly US$80 a share earlier this month.

JPMorgan does not appear concerned about the deal falling through at this point due to shareholder backlash. JPMorgan now has a 39.5 per cent stake in the company, and Bear Stearns board members – who have pledged to vote in favour of the deal – together have a nearly 10 per cent stake.

{Taken from the Jamaica Gleaner}

Bear Stearns Sold

The days of Bear and Stearns being an independent firm may be over. JP Morgan which on Friday rode to the rescue of Bear Stearns bought the firm on Sunday at a fire-sale price of $2 a share or $236.2m.

That the company’s board – which presumably was more familiar with its finances – would part with the company for so little money suggest it felt it could not wait any longer without the risk of getting even less.

JP Morgan executives said during a conference call held Sunday night that they noted that the offering price, which comes at a steep discount to Bear Stearns book value price of $84 per share, was to provide the company ”margin for error”.

”A $2 per share price will send a shudder through every investment bank investor in the world.” said James Ellman, head of SanFranciso-based Seacliff Capital, a hedge fund specializing in financial services.

In his own statement Sunday, CEO Schwartz said ”The past week has been an indcredibly difficult time for Bear Stearns. This transaction represents the best outcome for all of our constituencies based upon the current circumstances.”

It was unclear what would become of Bear Stearns 14,000 employers worldwide.

{Adapted from International Press Reports}

See our articleUK Billionaire Loses $800m On Wall Street.

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