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[sandi66]

India's quota share in IMF will improve to about 2.75%: Pranab
24 Oct, 2010, 01.01AM IST,AGENCIES




Gyeongju (South Korea): India will improve its rank by three notches to the eighth position in IMF, as the group of 20 nations (G20) on Saturday decided to increase the quota of emerging markets in the multi-lateral lending agency by over 6%.

“Agreement on IMF reforms has been reached. There will be a shift in quota shares to dynamic EMDCs (emerging market developing countries) and to underrepresented countries of over 6% while protecting the voting share of the poorest,” finance minister Pranab Mukherjee said.

With this, India’s rank in International Monetary Fund (IMF) will improve to the eighth position from the current eleventh in terms of quota, he told reporters after a meeting of finance ministers of G20 nations.

“What we have achieved is significant. The quota share (of India in IMF) will improve to about 2.75% (from the current level of 2.44%),” Mr Mukherjee added.

Similarly, China will see an improvement in its ranking to the third position from the present sixth. Quota represents the relative position of members of IMF. It is based on parameters like country’s GDP, openness, forex reserves etc.

The finance minister said the quota reforms will give legitimacy to the IMF in the new world economic order. India and other emerging market economies have been demanding reforms in IMF to give more powers to them in line with their share in the global economy.

Emerging market economies contribute around 47.5% to the global economy in terms of purchasing power parity, but have only 39.5% share in the IMF. Their share will now increase to over 45.5% in the 187-nation body IMF.

Also, Europe will give up two of the eight or nine seats it controls at any given time on the IMF’s Executive Board, which will continue to have 24 members, as per the agreement. Now next phase of reforms will start in 2013.

The IMF deal was hailed by fund managing director Dominique Strauss-Kahn as a “historical” moment that will see Europeans give up two seats on its 24-strong board to powerful developing countries and transfer 6% of votes to them.

“This makes for the biggest reform ever in the governance of the institution,” Strauss-Kahn, who heads the 187 country body, told reporters.

The G20 agreed a year ago to shift at least 5% of voting rights to developing countries such as India and Brazil whose clout within the Fund has not kept pace with their emergence as major engines of global growth. Despite the deal on the IMF, which had not been expected until G20 meet in South Korea next month, efforts to firm commitments to enshrine numerical targets for current account deficits met with tough resistance.

Attempts to firm up rhetoric in the final communique to push emerging market countries to accept meaningful near-term appreciation of their currencies failed and all countries will commit to is to refrain from “competitive devaluation”. “We’re all committed to moving towards market determined exchange rates that reflect underlying fundamentals and refrain from competitive devaluation,” said an official, who spoke on condition of anonymity. The lack of a stronger pledge from the likes of China and South Korea will likely hit the dollar, economists said.

A US official separately told an agency that the US had no expectation from the recommendation of setting numerical targets on external balances would make it into the G20 statement. The US official said Washington knew that including specific targets for imbalances at this stage would be rejected by a number of countries with structurally high trade surpluses, including Germany and major commodity exporters. But it helped focus the discussions which initially were in disarray, he said.

economictimes.indiatimes.com/news/economy/indicators/Indias-quota-share-in-IMF-will-improve-to-about-275-Pranab/articleshow/6800815.cms

[sandi66]

Number of the Week: Big Boost From Dollar Decline
October 23, 2010, 5:00 AM ET



0.5 percentage point: The potential boost in annual U.S. economic growth from the dollar’s decline since August 27.

As finance ministers from the Group of 20 developed and developing nations meet in Seoul in an effort to avert a currency war, it’s helpful to recognize the temptation they face. A little move in an exchange rate can have a big impact on a country’s growth.

Consider the recent fall in the dollar. Since August 27, when Federal Reserve Chairman Ben Bernanke signaled the central bank was likely to pump more dollars into the economy, the greenback’s value has fallen about 4.8% against the currencies of U.S. trading partners (data through October 15). Given the historical behavior of U.S. exports and imports, a sustained move of that magnitude should shrink the U.S. trade deficit by nearly $140 billion over the next two years. That’s the equivalent of an added 0.5 percentage point of economic growth in each year.

To some extent, a shrinking U.S. trade deficit would be a good thing for the whole world. To achieve a healthy balance, the U.S. needs to import less, and big exporters such as China need to import more. Still, Treasury Secretary Timothy Geithner had a point when he said, in an interview this week with The Wall Street Journal, that “no country… can devalue its way to prosperity and competitiveness.”

When one country devalues its currency, others tend to follow suit. As a result, nobody achieves trade gains. Instead, the devaluations put upward pressure on the prices of commodities such as oil. Higher commodity prices, in turn, can cut into global economic output. In one ominous sign, the price of oil is up 8.7% since August 27.

What’s more, says Brandeis University economist and trade expert Catherine Mann, competitive devaluations do little to remedy one of the biggest maladies of the current recovery: a lack of business and investor confidence. “It’s very damaging from the standpoint of firms trying to make decisions,” she says. “The use of the currency as the tool to generate economic growth and jobs is just so blunt that it’s absolutely focusing on the wrong thing.”



blogs.wsj.com/economics/2010/10/23/number-of-the-week-big-boost-from-dollar-decline/

[sandi66]

G-20 Communique on Currencies, Financial Supervision, IMF Board
Oct 23, 2010 4:00 AM ET


The following is a reformatted version of the communiqué released by finance ministers and central bankers from the Group of 20 economies after talks yesterday and today in Gyeongju, South Korea:

Communiqué

Meeting of Finance Ministers and Central Bank Governors,

Gyeongju, Republic of Korea

October 23, 2010

1. We, the G20 Finance Ministers and Central Bank Governors, met with a sense of urgency to fully address the economic challenges facing us today in preparation for the Seoul Summit.

2. The global economic recovery continues to advance, albeit in a fragile and uneven way. Growth has been strong in many emerging market economies, but the pace of activity remains modest in many advanced economies. Downside risks remain and are different from country to country and region to region. Yet, given the high interdependence among our countries in the global economic and financial system, uncoordinated responses will lead to worse outcomes for everyone. Our cooperation is essential. We are all committed to play our part in achieving strong, sustainable and balanced growth in a collaborative and coordinated way.

Specifically, we will:

? pursue structural reforms to boost and sustain global demand, foster job creation and increase growth potential;

? complete financial repair and regulatory reforms without delay;

? in advanced countries, formulate and implement clear, credible, ambitious and growth-friendly medium-term fiscal consolidation plans in line with the Toronto Summit commitments, differentiated according to national circumstances. We are mindful of the risks of synchronized adjustment on the global recovery and of the risks that failure to implement consolidation, where immediately necessary, would undermine confidence and growth;

? continue with monetary policy which is appropriate to achieve price stability and thereby contributes to the recovery;

? move towards more market determined exchange rate systems that reflect underlying economic fundamentals and refrain from competitive devaluation of currencies. Advanced economies, including those with reserve currencies, will be vigilant against excess volatility and disorderly movements in exchange rates. These actions will help mitigate the risk of excessive volatility in capital flows facing some emerging countries. Together, we will reinvigorate our efforts to promote a stable and well-functioning international monetary system and call on the IMF to deepen its work in these areas. We welcome the IMF’s work to conduct spillover assessments of the wider impact of systemic economies’ policies;

? continue to resist all forms of protectionist measures and seek to make significant progress to further reduce barriers to trade; and

? strengthen multilateral cooperation to promote external sustainability and pursue the full range of policies conducive to reducing excessive imbalances and maintaining current account imbalances at sustainable levels. Persistently large imbalances, assessed against indicative guidelines to be agreed, would warrant an assessment of their nature and the root causes of impediments to adjustment as part of the Mutual Assessment Process, recognizing the need to take into account national or regional circumstances, including large commodity producers. To support our efforts toward meeting these commitments, we call on the IMF to provide an assessment as part of the MAP on the progress toward external sustainability and the consistency of fiscal, monetary, financial sector, structural, exchange rate and other policies.

3. Building on the success of the Toronto Summit, the Framework for Strong, Sustainable and Balanced Growth was refined, with the mutual assessment process carried out at country-level to tackle both short and medium term challenges. Informed by the IMF, the World Bank, the OECD, the ILO and other international organizations’ analyses, the Framework provided a solid and practical platform for international cooperation to take place. In response to the tough challenges facing the global economy, we are developing a comprehensive action plan to mitigate risks and achieve our shared objectives. We will submit this action plan for consideration by our Leaders at the November 2010 Seoul Summit. Recognizing the benefits of the Framework, we agreed to recommend to Leaders that the country-led and consultative Framework process should continue beyond the Seoul Summit.

4. We have made significant strides since the adoption of the Action Plan to Implement Principles for Reform at the Washington Summit in November 2008, with support from the FSB. We are committed to take action at the national and international level to raise standards, so that our national authorities implement global standards consistently, in a way that ensures a level playing field and avoids fragmentation of markets, protectionism and regulatory arbitrage. To build a stronger global financial system, we have agreed to prioritize the following issues on the agenda for the Seoul Summit:

? Welcome and commit to fully implement within the agreed timeframe the new bank capital and liquidity framework drawn up by the Basel Committee and the Governors and Heads Of Supervision.

? Endorsement of the FSB’s recommendations to increase supervisory intensity and effectiveness.

? Endorsement of the policy framework, work processes and timelines proposed by the FSB to mitigate the risks posed by Systemically Important Financial Institutions and address the ’too-big-to-fail’ problems.

? Commitment to implement all aspects of the G20 financial regulation agenda, in an internationally consistent and non- discriminatory manner, including the commitments on OTC derivatives, compensation practices and accounting standards and FSB principles on reducing reliance on credit rating agencies.

? Further work on macro-prudential policy frameworks, including tools to help mitigate the impact of excessive capital flows; the reflection of the perspective of emerging market economies in financial regulatory reforms, including through increased outreach; commodity derivative markets; shadow banking; and market integrity.

? Pursue our work decisively to tackle Non-Cooperative Jurisdictions.

5. We have reached agreement on an ambitious set of proposals to reform the IMF’s quota and governance that will help deliver a more effective, credible and legitimate IMF and enable the IMF to play its role in supporting the operation of the international monetary and financial system. These proposals will deliver on the objectives agreed in Pittsburgh and go even further in a number of areas. Key elements include:

? shifts in quota shares to dynamic EMDCs and to underrepresented countries of over 6%, while protecting the voting share of the poorest, which we commit to work to complete by the Annual Meetings in 2012.

? a doubling of quotas, with a corresponding roll-back of the NAB preserving relative shares, when the quota increase becomes effective.

? continuing the dynamic process aimed at enhancing the voice and representation of EMDCs, including the poorest, through a comprehensive review of the formula by January 2013 to better reflect the economic weights; and through completion of the next regular review of quotas by January 2014.

? greater representation for EMDCs at the Executive Board through 2 fewer advanced European chairs, and the possibility of a second alternate for all multi-country constituencies, and

? moving to an all-elected Board, along with a commitment by the Fund’s membership to maintain the Board size at 24 chairs, and following the completion of the 14th General Review, a review of the Board’s composition every 8 years.

6. We welcomed the recent reform of the IMF lending facilities, including the enhancement of the Flexible Credit Line and the establishment of the Precautionary Credit Line to strengthen the global financial safety nets. We call on the IMF to continue its work to further improve the global capacity to cope with shocks of a systemic nature.

7. We look forward to the multi-year action plan of the G-20 Working Group on Development to promote inclusive and sustainable economic growth and resilience in developing countries. We are committed to meeting the Millennium Development Goals by 2015 and will reinforce our efforts to this end, including through the use of the Official Development Assistance. We reaffirm our commitment to an ambitious replenishment of the World Bank’s International Development Association. We welcomed the progress of the Global Agriculture and Food Security Program in rapidly scaling up agriculture assistance in several developing countries and invite further contributions.

8. We welcomed a set of actions identified to improve access to financial services for the poor and SMEs. We welcomed the strong response to the SME Finance Challenge and look forward to the announcement of the innovative winning entries at the Seoul Summit. We agreed to develop a funding framework to support the effective implementation of the winning proposals of the SME Finance Challenge. We agreed that a global consultative mechanism is needed to maximize the impact of the work on financial inclusion and enhance coordination amongst different initiatives and stakeholders.

9. We noted the progress made on rationalizing and phasing out inefficient fossil fuel subsidies and promoting energy market transparency and stability and agreed to monitor and assess progress towards this commitment at the Seoul Summit.

10. Recognizing the importance of enhancing public-private partnership to promote economic growth beyond the crisis, we welcome the work done by the 12 Seoul G20 Business Summit Working Groups.

11. We thanked Korea for hosting the Finance Ministers and Central Bank Governors meetings this year and welcomed France as chair in 2011.



www.bloomberg.com/news/2010-10-23/g-20-communiqu-on-currencies-financial-supervision-imf-full-text.html

[sandi66]

Statement Of U.S. Treasury Secretary Timothy F. Geithner, G-20 Press Conference, Gyeongju, Korea

23/10/10

U.S. Treasury Secretary Timothy F. Geithner today delivered the following statement at a press conference at the conclusion of the G-20 Finance and Central Bank Deputies Meeting & G-20 Finance Ministers and Central Bank Governors' Meeting.

"Good afternoon and thank you for joining me here today. First of all, thank you to our gracious host, Korea, and the city of Gyeongju.

"We met here against the backdrop of a world economy that is gradually healing from the damage caused by the financial crisis. The world is growing, and overall we believe the recovery will gradually strengthen in the coming months.

"We still face very substantial economic challenges across the advanced and developing economies. We need stronger growth in the major economies. Emerging economies are facing the very different challenge of managing the pressures associated with very strong growth.

"We spent the last few weeks exploring ways to strengthen our cooperation on exchange rate and other economic policies. The most important thing we achieved is agreement on a framework for curbing excess trade imbalances in the future. Why this focus on balance, and why is this important?

"The world economy is going through a necessary, but complicated process of adjustment. The major economies are all in varying stages of working through the large financial imbalances – excess borrowing relative to income, overinvestment in real estate, unsustainable leverage in the financial sector -- all of which contributed to the crisis and will slow the pace of recovery. Emerging market economies are expanding at a rapid pace, and are attracting substantial flows of capital.

"If the world is going to be able to grow at a strong, sustainable pace in the future, if we are going to be successful in building a more stable global financial system, and if we are going to be able continue to expand opportunities for trade and preserve an open trading system, then we need to work to achieve more balance in the pattern of global growth as we recover from the crisis.

"This requires a shift in growth strategies by countries that have traditionally run large trade and current account surpluses, away from export dependence and toward stronger domestic demand led growth. This entails a range of policy changes, as you can see in the very broad range of domestic reforms being undertaken by China. An important part of this transition is a gradual appreciation of these emerging market currencies relative to the major currencies as a group.

"And these changes by surplus economies, both emerging and advanced, need to be complemented by reforms in countries like the United States to increase savings--including restoring fiscal sustainability-- to shift growth from consumption to investment and to exports.

"The adjustments now underway will happen, but if they happen in a framework of international cooperation, they will be achieved with stronger overall global growth rates, less risk of financial instability, and less protectionist pressures at the national level.

"The framework of cooperation we agreed to today recognizes that none of us can accomplish this alone. This is inherently a multilateral challenge. I want to emphasize three key points:

"First, we have agreed that it is important to limit the overall level of external imbalances across the global economy. Those imbalances are lower today than they were before the crisis. Where they are still high, it is important that we implement sound policies, consistent with reducing imbalances, and to prevent them from expanding again to levels that could threaten future growth and stability.

"Second, we have agreed to cooperate more closely on exchange rate policy. Countries with significantly undervalued exchange rates committed to move towards more market-determined exchange-rate systems that reflect economic fundamentals, as China is now doing. The countries responsible for the dollar, euro and yen recognized the importance of preserving stability among the major currencies and avoiding excess volatility and disorderly exchange rate movements. We all committed to refrain from competitive devaluation, or undervaluation. Together, these commitments should help reduce some of the pressure being experienced by those emerging economies that are appropriately running more flexible exchange rate systems and have already seen their currencies move significantly higher.

"Third, we agreed to give a greater role to the IMF in implementing these commitments. The IMF was created to play this role, but its ability to do so in practice has been constrained by the reluctance of its members to expose themselves to a candid, independent, external assessment of the effects of their policies on the global economy as a whole, and to allow the IMF staff and management to offer broad judgments on exchange rate misalignments. This must change, and we want to see the IMF act on the mandate it received here today.

"This is important, for without a strong, independent mechanism for encouraging cooperation, countries will feel more pressure to take action on their own to protect their interests.

"The value of this framework to limit trade imbalances is that rights and responsibilities are aligned and balanced. Countries with surpluses and countries with deficits, the advanced economies and the large emerging economies, all have a responsibility to play their part in contributing to stronger and more sustainable growth.

"Alongside these changes, we agreed to a very strong set of reforms to the International Monetary Fund. These changes improve the ability of the IMF to help its members deal with future crises. They change the governance structure to give emerging economies a greater voice in the institution and more seats on the Board. I want to acknowledge in particular the willingness of the Europeans to make this possible by giving up two of their seats.

"Together these reforms recognize that greater representation for the emerging economies in international institutions comes with greater responsibilities for making the institutions, and the global economy, work better.

"We were honored to have South Korea's President Lee Myung-Bak come to Gyeongju and we appreciate the role of the Korean presidency in helping us all achieve the concrete outcomes of the meetings. Thank you."

www.mondovisione.com/index.cfm?section=news&action=detail&id=93697

[sandi66]

Europe gives up power in IMF revamp
October 24, 2010 7:31AM



THE Group of 20 (G20) nations have struck a hard-fought agreement on reforming the International Monetary Fund (IMF) to include emerging nations such as China in the world's financial watchdog.

G20 finance ministers clinched the deal after years of efforts to make the Washington-based Fund better reflect a shift in global power - with the result that China, India and others will gain more weight at Europe's expense.

"It's the biggest reform ever in the governance of the IMF," IMF managing director Dominique Strauss-Kahn has said as the G20 bloc of advanced economies and emerging powers met in the South Korean city of Gyeongju.

"It's a very historic agreement," he said.

In a statement, the G20 ministers said the revamp would "help deliver a more effective, credible and legitimate IMF and enable the IMF to play its role in supporting the operation of the international monetary and financial system".



In parallel, the G20 agreed to empower the IMF to exercise greater vigilance over national economic policies.

"We will reinvigorate our efforts to promote a stable and well-functioning international monetary system and call on the IMF to deepen its work in these areas," the ministers said.

The agreement came as the G20 strived to head off a "currency war" between big exporters such as China and deficit-ridden nations like the United States, which accuses Beijing of cheating in trade by keeping its currency cheap.

The United States has long pressed for the IMF to intervene more actively in currency disputes, but China has rejected even mild Fund strictures on its exchange-rate policy.

Formed after World War II to remake the world financial system and prevent a return to the 1930s Depression, the IMF has long been dominated by Western powers. But it has faced growing calls to adapt and grow more democratic.

The deal to reform the IMF's 24-member board of governors was thrashed out by the G20 ministers ahead of a summit next month of national leaders in Seoul. The existing IMF board will have to sign off on it at the start of November.

Mr Strauss-Kahn said Europe had agreed to give up two seats on the board to accommodate developing nations.
About five per cent of voting rights will be transferred, and Brazil, Russia, India and China will all emerge as among the top 10 IMF shareholders.

A senior US official praised European nations for showing leadership and understanding on the issue.

"For the Europeans to do this is genuinely difficult because it means that countries that have occupied these board seats for a very, very long time are moving over and making room for the emerging economies," the official said.

The United States currently provides a major chunk - almost 17 per cent - of funding for the IMF, which has traditionally stepped in to help countries in financial trouble, usually attaching tough demands for reform.

Japan is the second largest shareholder, with Germany, France and Britain also substantial contributors. But China, whose stunning economic transformation over the past three decades and resilience during the 2008-09 global crisis has shifted financial power eastwards, is now set to become a more high-profile player in the IMF.

The Fund found itself under intense pressure as the financial crisis exposed governments' inability to respond in a world of highly complex financial instruments.

In March 2009 the IMF created a so-called "flexible credit line" to pre-empt financial distress among its members, a system that is still being refined after the crisis laid bare the giddy speed at which capital can take flight.

Mr Strauss-Kahn acknowledged that the IMF still had work to do in developing a South Korean proposal to create a broader "financial safety net" that might reduce the need for countries like China to build up huge currency reserves.


www.news.com.au/breaking-news/europe-gives-up-power-in-imf-revamp/story-e6frfku0-1225942781985

[sandi66]

G20 inks pact to avert trade war
24 Oct, 2010, 03.06AM IST,REUTERS




YEONGJU(SOUTH KOREA): The Group of 20 major economies agreed on Saturday to shun competitive currency devaluations but stopped short of setting targets to reduce trade imbalances that are clouding global growth prospects.

At a meeting in South Korea, G20 finance ministers recognized the quickening shift in economic power away from Western industrial nations by striking a surprise deal to give emerging nations a bigger voice in the International Monetary Fund.

A closing communique contained no major policy initiative after a U.S. proposal to limit current account imbalances to 4 percent of gross domestic product, a measure aimed squarely at shrinking China's surplus, failed to win broad enough backing.

Indeed, the United States itself came under fire from Germany and China for the super-loose monetary policy stance it has adopted to try to breathe life into the sluggish U.S. economy.

German Economy Minister Rainer Bruederle said he had made clear that easing was the wrong way to go.

"An excessive, permanent increase in money is, in my view, an indirect manipulation of the (foreign exchange) rate," he said.

HEADING FOR CHINA

The main aim of the two days of talks, which precede a G20 summit in Seoul on November 11-12, was to ease currency strains that some economists feared could escalate into trade wars.

Developing countries are worried that Washington, by flooding the U.S. banking system with cash, is pumping up their asset prices and exchange rates, thus undermining the competitiveness of the export industries on which they rely for growth.

China, among others, frets that the U.S. policy stance will debase the dollar, the lynchpin of the global economy.

In a thinly veiled reference to the United States, the G20 statement said advanced countries, including those with reserve currencies, would be vigilant against excessive volatility and disorderly movements in exchange rates.

Washington, by contrast, is frustrated over the refusal of China in particular to let its currency rise to a level that reflects its growing economic power and would help reduce its big trade surplus with the United States.

"If the world is going to be able to grow at a strong, sustainable pace in the future... then we need to work to achieve more balance in the pattern of global growth as we recover from the crisis," U.S. Treasury Secretary Timothy Geithner said.

U.S. officials were pleased that the communique committed G20 members to "refrain from competitive devaluations" of their currencies and to pursue a full range of policies to reduce excessive external imbalances.

Geithner will keep up the pressure on Sunday for a stronger yuan when he holds talks in Qingdao, China, with Vice-Premier Wang Qishan, who has broad responsibility for economic policy.

"The content of the G20 statement is generic and broadly in line with expectations, but this should not detract from the fact important progress was made in giving emerging market countries a greater voice in the IMF," said Claudio Piron, a currency strategist at Bank of America Merrill Lynch in Singapore.

IMF SHAKE-UP

Despite the sniping from Germany and China, whose finance minister demanded responsible policies from issuers of major reserve currencies -- code for the United States -- host South Korea put an optimistic spin on the outcome of the meetings.

"This will put an end to the controversy over foreign exchange rates," said Finance Minister Yoon Jeung-hyun.

South Korea was also able to point to the deal to shift more than 6 percent of the IMF's quotas -- membership subscriptions that help determine voting power -- to emerging economies whose clout in the Fund has not kept pace with their economic ascent.

economictimes.indiatimes.com/news/international-business/G20-inks-pact-to-avert-trade-war/articleshow/6801080.cms

[sandi66]

Geithner says China engaged on forex: report
Sun Oct 24, 2010 8:10am EDT

GYEONGJU, South Korea (Reuters) - Treasury Secretary Timothy Geithner said China will continue to move toward exchange rate flexibility and is now actively engaged on global foreign exchange issues.

Geithner, in an interview with Bloomberg Television after Group of 20 finance leader meetings concluded here on Saturday, said China views a higher yuan rate versus the dollar as in Beijing's interest because it does not want the U.S. Federal Reserve to control its monetary policy.

"They're an independent country, a large economy. They need the flexibility to run their policies in a way that makes sense for China," Geithner said.

"And that requires that their exchange rate move up over time as they're now doing and we want to see that continue. They've got a ways to go but I think they're committed to do that," he said.

"I think you're going to see them continue to move."

Geithner's comments in the interview came hours before he traveled to Qingdao, China, to meet with Chinese Vice Premier Wang Qishan to discuss unspecified bilateral economic matters.

The U.S. Treasury chief has delayed a decision on whether to declare that China manipulates its currency for export advantage. Global economists and U.S. lawmakers contend that China's yuan is at least 20 percent undervalued.

The semi-annual Treasury currency report was due on October 15, but Geithner opted to delay it in order to press his case at multilateral meetings, including Gyeongju and a Nov 5-6 G20 leaders summit in Seoul.

At the Gyeongju meeting in southeastern Korea, the G20 members pledged to shun competitive currency devaluations and reduce current account imbalances, though they stopped short of numerical goals based on percentages of gross domestic product.

Geithner said it was significant that the G20 directly addressed currencies with cooperation from China and other key emerging markets.

"We've had a long period where the major economies, principally Japan, Europe and the United States, bore all the burden of cooperation on exchange rate questions. They dominated all those discussions," Geithner said.

"But the world's changed dramatically and it's very important that we're discussing these things with China, with India, with Brazil, with the emerging market economies all around the world that are growing so rapidly."

In the past, Beijing had resisted specific mentions of currency rates in G20 statements.

Geithner added that a numerical goal for current account surpluses and deficits may eventually settle to around 4 percent of GDP.

"You've heard people talk about that and my own personal view is that will become the benchmark for the future," Geithner told Bloomberg TV.

"That's because if you look at what major economies project going forward -- what they expect to happen if they pursue the policy they have been pursuing, most countries see the balances either staying below 4 percent, or falling to 4 percent over the medium term."



www.reuters.com/article/idUSTRE69N0QZ20101024







Geithner Says China Will `Continue to Move' on Stronger Yuan After G-20
By Rebecca Christie and Peter Cook - Oct 24, 2010 8:00 AM ET

U.S. Treasury Secretary Timothy F. Geithner predicted China will allow the yuan to appreciate more because officials there understand it’s in the long-term interest of domestic growth and global economic stability.

“They recognize it’s important to the world,” Geithner said in an interview yesterday with Bloomberg Television, after a meeting of finance ministers and central bankers in Gyeongju, South Korea. As China’s currency stance affects more countries, “China recognizes that, and I think we’re going to see them continue to move.”

Geithner made the comments a day before an unscheduled visit to China for talks with Vice Premier Wang Qishan to discuss relations between the world’s two largest economies. Under pressure from Congress to combat what Geithner says is an undervalued yuan, the Obama administration used this weekend’s meetings to secure an agreement among the Group of 20 officials to avoid weakening their currencies. They also vowed to increase efforts to reduce trade imbalances.

Chinese officials still have a “ways to go” on loosening the yuan’s ties to the dollar, the Treasury chief said.

“But I think they’re committed to do that, because they recognize it’s in their interest,” he said.

Pledge

The G-20 talks concluded with a pledge to examine guidelines for current-account surpluses and deficits, without specifying how nations would set those goals. In the interview, Geithner said he believed 4 percent of gross domestic product would become the “benchmark” for whether trade balances are misaligned.

Geithner and Wang “exchanged views on U.S.-China economic relations” in the run up to next month’s G-20 leaders’ summit in Seoul, the Treasury said in a statement today.

G-20 officials agreed to strengthen the International Monetary Fund’s surveillance powers, saying the Washington-based lender should monitor budgets, financial regulation and foreign exchange policies.

The IMF’s role will be to provide “an early warning system” for problematic swings in trade flows, Geithner said.

“It will help provoke changes in policies to reduce the risks that those will be sustained,” said Geithner, who worked at the IMF from 2001 to 2003. “The IMF has to play cop.”

German Resistance

The current account is the broadest measure of trade because it includes investment and transfer income, and it would be hard to achieve any correction in one without a currency shifting. Saudi Arabia, Germany, Russia and China all run surpluses larger than 4 percent of GDP, while Turkey and South Africa have deficits bigger than that, according to the IMF.

Bundesbank President Axel Weber, who also attended the Gyeongju talks, said Germany shouldn’t be blamed for having a current-account surplus. Other countries, including Brazil, Japan and South Korea, have taken steps to limit gains in their currency to boost exporters and protect against swings in foreign investment.

Heading into the meetings in South Korea, Geithner warned that the world was encountering a “dangerous dynamic” fueled by China’s reluctance to let the yuan rise more than 2 percent since a June pledge to make its foreign exchange policy more flexible. As a result, countries with more flexible exchange rates are “under a lot of pressure” to maintain growth and stability, he said in the interview.

Emerging Economies

“That pressure is magnified because some countries are still limiting the appreciation of their currency. And that’s unfair,” Geithner said. “The capital is flowing to where the exchange rates are moving.”

The U.S., Europe and Japan should no longer dominate foreign-exchange policy negotiations, and developed nations need to maintain efforts to boost growth, Geithner said. Instead, talks should be held with a wider range of countries and take into account the circumstances that different commodity producers face, depending on the size of their economies.

Federal Reserve Chairman Ben S. Bernanke did not need to take a “defensive” position in the G-20 talks when explaining the central bank’s monetary policy approach, Geithner said, even though Germany criticized the Fed for adding to global imbalances with talk of asset purchases to increase liquidity.

Geithner said the Obama administration will continue its efforts to convince Congress to pass additional economic aid measures, while extending tax breaks for households earning less than $250,000 per year.

“If we can go extend those middle-class tax cuts, and add some well-designed, targeted incentives for business investment, that will help us dig out of this more quickly,” Geithner said. “I’m sure that it will happen.”



www.bloomberg.com/news/2010-10-24/geithner-says-china-will-continue-to-move-on-stronger-yuan-after-g-20.html







What's Really the Big Story for Financial Markets Today?
by: Graham Summers October 24, 2010

You have to read between the lines on this one.

Few commentators realize what the BIG story is for the financial markets today. The BIG story is not the mortgage fraud, the corruption, or the computerized trading (although the last one dominates US stock markets’ daily action).


No, the big story is the monetary actions of the massively indebted US vs. the credit cooling China.
Indeed, while Bailout Ben Bernanke and several of his cronies at the Federal Reserve have been braying for additional QE and currency weakness, China has been aggressively restricting credit lending, raising interest rates, and generally making moves to cool its overheated system.

In plain terms, this is a conflict between the world’s old superpower (its largest debtor nation) and its rising new superpower (its largest creditor nation). It represents the largest conflict in global financial markets as well as THE most significant development to watch for those looking to successfully trade the markets.

Don’t forget, this was ALSO the big story dominating the financial markets in 2008. I know, the banking Crisis took the headlines. But it was China’s stockpiling of commodities that created the massive “inflation trade” imbalance which saw oil at $150 a barrel, commodities across the board exploding higher, and the US Dollar hitting a 20 year low.

Remember how that played out when the trend reversed? Commodities and equities collapsed across the board as the US Dollar exploded higher. This, in turn, kicked off the Dollar short-covering explosion, which began the chain of events leading into the Autumn of 2008.

Now, consider that we are in precisely the same environment today. Once again, talk of the US Dollar collapsing is everywhere. The whole world is piling into commodities, especially Gold. And US traders are actually MORE bearish on the US Dollar today than they were in 2008.

The reason I bring all of this up is that I am beginning to pick up on signs that the US and China may in fact be trying to reach some kind of backroom deal on the “currency” issue. Given the current lopsided balance of the financial markets, you can imagine the impact this deal would have if my suspicions prove correct.

Let me explain.
As you no doubt are aware, over the last six months, the US has routinely vilified China as being a currency manipulator and the source of our financial and economic woes. China, in turn, has responded to these claims by pointing out that the US Federal Reserve is damaging the world financial balance… while also making veiled threats of the dreaded “nuclear” option (China actively dumping US Treasuries).

This essentially is an oversimplified version of the dialogue occurring between the two countries for most of 2010. Then, suddenly, the US does a 180 with Treasury Secretary Tim Geithner stating that the world currencies are “roughly in alignment” and that there is no need to “devalue the Dollar” but to maintain a “strong Dollar” policy.

Granted, these comments are coming from one of the biggest stooges in history. But they DO represent a sudden dramatic change in Geithner’s rhetoric. And given their close proximity in timing to China’s first interest rate hike in three years, I can’t help but wonder if something is going on “behind the scenes” between the US and China which most analysts (AND the markets) are not discounting.

Indeed, the US Dollar is giving hints of this, putting in what could be a potential bottom and reversal. Of course, it could be a GIANT head-fake, but the bounce from the multi-year trend line is something we need to take seriously in the context of Geithner’s and China’s recent statements/ moves.


Have China and the US struck a “backroom” deal in which the US will drop the anti-China rhetoric and make moves to potentially halt a collapse in the US currency in order to calm its largest creditor (and THE one player whose moves ALL US bond holders are watching closely)?

If so, then the lopsided inflation trade could be in for a SEVERE reversal which would see commodities and stocks collapsing as the US Dollar rallied a la 2008. Could Gold and Copper be telling us this is the case? Both commodities are seen as terrific discounters of future inflation. And both have reversed as of late and look to be potentially correcting.

Right now, all of the above is mere conjecture based on me noting a sudden change in the mood between China and the US. We’ll only know for sure on November 3 when the US Federal Reserve announces whether it will be implementing a MASSIVELY anti-Dollar QE 2 program or something smaller and less destructive.

If it’s the latter, then you can bet that the US financial markets will undergo a SEVERE mood change and reversal. Remember, ALL of the actions since mid-August has been fueled by speculation that the Fed is going to issue a HUGE QE 2 program on November 3. If traders are disappointed and the Fed announces something small or doesn’t announce anything at all, then my theory of a China/ US deal gains a lot of weight… and the markets are in for a rude surprise.

If you have not already taken steps to prepare for what's to come (QE 2 won't fix anything, we all know this already), now is the time to be doing so BEFORE stocks come unraveled.

If you have not already taken steps to profit from the next market correction, now is the ideal time to do so. Stocks are trading at elevated levels courtesy of Fed juicing and Wall Street's shenanigans. It's only a matter of weeks or even days before we catch the next "down draft" and are back at 1,050 on the S&P 500 in short order.

After all, that's where stocks were when all this QE 2 nonsense took over the markets.

seekingalpha.com/article/231854-what-s-really-the-big-story-for-financial-markets-today

[sandi66]

Chinese vice premier talks economy with U.S. treasury secretary

2010-10-24 15:27:55
Chinese vice premier talks economy with U.S. treasury secretary

English.news.cn 2010-10-24 15:27:55






QINGDAO, Oct. 24 (Xinhua) -- Chinese Vice Premier Wang Qishan held talks with U.S. Treasury Secretary Timothy Geithner on Sunday at Qingdao Airport, eastern Shandong province.

As special representatives of Chinese President Hu Jintao and U.S. President Barack Obama, Wang and Geithner exchanged views on Sino-U.S. economic relations and the preparations for the Group of 20 (G20) Summit to be held Nov. 11 to 12 in Seoul, the Republic of Korea (ROK).

Their meeting followed Geithner's attending the just concluded G20 finance ministers and central bank governors' meeting in ROK's Gyeongju, which underscored the foreign exchange issue.

Analysts say the Sunday meeting will help China and the U.S. coordinate their stances amid the approaching G20 Summit and the rising debate on the currency issue.

"This is an important meeting, given the complex international financial situation," said Tao Wenzhao, a researcher of American studies with the Chinese Academy of Social Sciences.

"Their meeting will help both sides to coordinate stances and achieve consensus at the G20 Summit, enabling them to tackle the global financial crisis in a cooperative spirit," said Tao.

Shi Yinhong, a professor with Renmin University, told Xinhua that the U.S. pressure for the renminbi (RMB), or the yuan, to appreciate was the "biggest obstacle" facing bilateral relations.

The meeting between the two countries' leaders of economic and financial affairs is seen as more than a positive signal. "They must have touched on some substantial issues," Shi said, calling the meeting a manifestation of the two sides' efforts to avoid escalating tensions.

The U.S. dollar has been weakening since mid-September against other currencies, including the Singapore dollar, the Thai baht, the Malaysian ringgit and the Indonesian rupiah, fueling concerns that world governments might resort to a depreciation of their currencies for the good of exports.

While depreciating the greenback, Washington has made China a scapegoat for trade imbalances, accusing Beijing of deliberately keeping its currency undervalued.

Although Washington has postponed the release of the semiannual international economic and exchange rate policies report to the Congress, which could have paved the way for passing legislation that might label China a currency manipulator, the currency issue hangs in the balance.

The G20 finance leaders were able to leap forward in the currency debate, conveying in the communique in Gyeongju a message to "move towards more market determined exchange rate systems and refrain from competitive devaluation of currencies."

Chinese Finance Minister Xie Xuren also urged major currency issuing nations to maintain their comparative stabilization of exchange rates, saying there should be efforts to reduce the negative impact of exchange rate policies and to keep the global financial communities stable.

The U.S. congress, appalled by the country's large trade imbalances, is preparing to "shoot the messenger" through a punitive bill targeting China, Hossein Askari and Noureddine Krichene wrote in Who's the Currency Manipulator on the Asia Times online.

The two writers, respectively a professor of international business and international affairs at George Washington University and an economist, said: "The US trade imbalances are the result of the Fed's unrestricted credit policy and fiscal deficits and have little to do with China, Japan, or any other country."

They further said the present unorthodox credit policy could only worsen trade imbalances and unemployment, regardless of the bills adopted by the US Congress targeting China.

This month has seen frequent high-level discussions between China and the U.S. on the economy. Wang Qishan, himself, held phone conversations last Friday with Timothy Geithner to exchange opinions on issues concerning China-U.S. economic relations. Wang also met with Senator Max Baucus, chairman of the U.S. Senate Finance Committee, and Madeleine Albright, former U.S. Secretary of State, earlier October.

In his meeting with Baucus, Wang suggested the two sides improve communications and increase mutual understanding, and use their wisdom to properly handle differences and avoid economic issues being politicized.

Improving Sino-U.S. trade and economic cooperation is critical for promoting the economic recovery of the two countries and the world, Wang said.

China deepened the reform of the yuan exchange rate mechanism in July 2005. The yuan has appreciated 22 percent against the U.S. dollar since then.

The People's Bank of China, the central bank, announced on June 19 this year that it had decided to proceed further with the reform of the RMB exchange rate regime to increase exchange rate flexibility.



news.xinhuanet.com/english2010/china/2010-10/24/c_13572906.htm

[sandi66]

Overhaul for IMF agreed to by G-20
Emerging nations to get a bigger say
By DEMOCRAT-GAZETTE PRESS SERVICES

Posted: October 24, 2010 at 4:21 a.m.



Global finance leaders promised Saturday to refrain from a currency war and reduce trade imbalances, amid growing recognition that restructuring the world economy is necessary to accommodate the greater role of fast-growing China and other developing economies.

The Group of 20 also agreed to overhaul the International Monetary Fund to increase its role in managing the world economy and give emerging nations more say in how the organization is run, which IMF Managing Director Dominique Strauss-Kahn called the “biggest reform” of IMF governance since the institution was created in 1945.

Finance ministers and central bank governors met for two days in the South Korean city of Gyeongju ahead of a summit of their leaders in Seoul next month.



www.nwaonline.com/news/2010/oct/24/overhaul-imf-agreed-g-20-20101024/







Geithner: China reforms on currency are in their interest
By Bridget Johnson - 10/24/10 10:45 AM ET

Treasury Secretary Timothy Geithner said Sunday that it is in China's interests to keep working toward a fair currency policy even as Congress is poised to take on currency manipulation in the lame-duck session.



Geithner, speaking with Bloomberg News from the G-20 meeting of finance ministers in South Korea, was asked about what obligations China would have under a pact among the countries to not devalue their currencies in order to boost trade exports.



Geithner lauded China for enacting reforms to push an economic model driven more by domestic consumption than exports and for letting their exchange rates move up.



"And they're doing that because it's in their interest," Geithner said. "Makes no sense for China to have monetary policies set by the Federal Reserve. They're an independent country, large economy. They need the flexibility to run their policies in a way that makes sense for China. And that requires that their exchange rate move up over time, as they're now doing."



The Treasury secretary was asked whether China had committed to continue on its pace of tackling yuan appreciation.




"I think it will continue, because again, I think it's very much in China's interests," Geithner said. "And, of course, they recognize it's important to the world as a whole. I mean, countries around the world are affecting by what's happening in China. China recognizes that. And I think we're going to see them continue to move."



Geithner also expressed confidence that Congress would work out an extension of the Bush-era tax cuts in the lame-duck session.



"It's inconceivable to me you won't see Congress come together and figure out how to extend those middle-class tax cuts that go to, you know, people making less than $250,000 a year," he said. "That's 98 percent of working Americans, 98 percent of small businesses. I think it's overwhelmingly compelling that we - Congress act quickly to do that. And I'm sure that it will happen."



The sticking point in Congress has been whether tax cuts should be extended for all income brackets, though the administration has pushed the extension of cuts for those making less than $250,000 and accused Republicans of holding the middle class "hostage" by favoring all cuts.


thehill.com/blogs/blog-briefing-room/news/125571-geithner-china-is-reforming-on-currency-because-its-in-their-interest

[sandi66]

Iraq’s High Court Orders Parliament Back to Work

October 24, 2010

Iraq’s High Court Orders Parliament Back to Work
By ANTHONY SHADID
Published: October 24, 2010
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Close LinkedinDiggMixxMySpaceYahoo! BuzzPermalink BAGHDAD – Iraq’s highest court on Sunday ordered Parliament, elected in March and convened only once, for 18 minutes, to resume its sessions, adding another wrinkle to a protracted crisis that has tested the country’s institutions and unsettled its people.

The court called the delay unconstitutional, and the acting speaker promised to convene it again within days. But the decision seemed more procedural than decisive, and perhaps setting the stage for another constitutional crisis. Parliament has gone unattended as Iraq’s most powerful blocs have tried for seven months to negotiate an agreement on the government’s top posts, and they still seem weeks, even months, from a deal.

“Holding the session at this time will be the beginning of another problem,” warned Izz al-Din al-Dawla, a member of Iraqiya, one of top vote-getters in the March 25th election.

Before and after that vote, Iraq’s political process has shown a marked tendency toward opacity, and powerful politicians have often deployed instruments of the state – namely the military and quasi-official bodies – to settle scores and further their own ambitions. The federal court is no exception, and critics have derided some of its decisions this year as serving the agenda of Prime Minister Nouri al-Maliki, who still stands as the most likely to return to power for another four years.

Yet Sunday’s surprise ruling came in response not to a case filed by any of Iraq’s politicians or political blocs, but by a civil society group, backed by the venerable but small Communist Party, against the acting Parliament Speaker, Fouad Massoum. With the backing of most factions, Mr. Massoum had convened the 325-member Council of Representatives in June, then left it open indefinitely, but unattended, to give politicians time to negotiate the makeup of a government – from president to deputy speakers – that will preside over the American withdrawal of 50,000 troops by 2012.

The court agreed with the civil society group’s contention that Mr. Massoum’s procedural move was unconstitutional and ordered lawmakers to resume work. Iraqi activists celebrated the court’s decision as a step forward instrengthening political life here and addressing the deepening popular anger with the country’s political class – not least the newly elected lawmakers, who have not met in more than four months but continue to receive their salaries of about $11,000 a month anyway.

“This is a historic moment for us, the civil society organizations,” a leading activist, Hanaa Edwar, said. If they don’t convene the session again soon, she said, “we will go to the court and ask them to dissolve Parliament. The situation cannot go on like this.”

Mr. Massoum promised to act quickly, and politicians interpreted the ruling as requiring Parliament to reconvene within two weeks. Even Mr. Massoum expressed frustration with seemingly endless talks that have left negotiations deadlocked.

“I’m sure this decision will serve to hasten the process,” he said. “It will leave the blocs no choice but to speed up their negotiations and stop these irrational delays.”

Once Parliament convenes, the constitution outlines a very specific timetable: members pick a speaker and two deputies and then, within 30 days and by a two-thirds majority, a president. The president will have 15 days to name the head of the largest parliamentary bloc to form a government, a task to be completed within 30 days.

But time and again, politicians here have found ways to flout an admittedly pliable constitution – either through elastic interpretations or by simply ignoring it. Failure to achieve a quorum would be one way to prevent Parliament from acting.

The crisis over forming a government has created deep popular anger, adding to a sense, reflected in recent polling, that the country is headed in the wrong direction. Cognizant of that, politicians from across the spectrum hailed the court’s decision publicly on Sunday, even if they acknowledged that negotiations may still have a way to go.

“The court had to give this decision,” said Hakim al-Zamili, a lawmaker with a faction loyal to Moktada al-Sadr, a populist cleric whose alliance with Mr. Maliki has buoyed the prime minister’s chances to return to power. “The timing was good. It would have been better if it was even earlier because this situation has so badly affected Iraqis.”

Nevertheless, no leading political bloc seemed eager to have Parliament meet again, at least not until the framework for an agreement was reached.

The broadest fault lines in those negotiations remain as they did soon after the March vote – a contest between Mr. Maliki and an alliance led by Ayad Allawi, a secular Shiite and former interim prime minister, whose group won two more seats than Mr. Maliki’s. Both coalitions are soliciting the support of the Kurds, deemed essential for gathering a majority in Parliament. Although Mr. Maliki’s chance seem best, the Kurds have pushed for an inclusive government – with Mr. Allawi’s participation – a compromise that would almost certainly require a curb in the prime minister’s powers.

The eventual deal will underline the influence of foreign powers in Iraq – the United States, Iran and Turkey. All have worked intensely in forcing an outcome to their liking, though none has yet been able to do so. The sense of machinations and backroom dealings has added to popular resentment, and some analysts hailed Sunday’s decision, at minimum, as a step toward transparency in the negotiations.

“Maybe this decision can resolve the crisis,” said William Warda, a political analyst. “At the very least it will create dialogue inside Parliament, where debates will be open and not in closed rooms or outside Iraq, where you don’t know what’s going on.”

www.nytimes.com/2010/10/25/world/middleeast/25iraq.html

[sandi66]

* Dinar Daddy Chat 10/24/10
October 24th, 2010 02:33 pm · Posted in CHATS / POSTS

DinarDaddy: I just made an invite for the next 30 minutes I will be here. Feel free to ask me any questions you wish
bear: Hi DD
bama69: dd rate and date please
DinarDaddy: lol bama
tenmillion: lol bama
DinarAddict: hello roger
DinarAddict: what did i miss
DinarDaddy: welcome all… hoping you are enjoying this NEW site/feature in what I offer here
<boatboy> sent sound: kids-yeah
DinarAddict: yesi like it
bama69: dd how close do u think we are
twill2: Yes this is pretty cool. you can actually talk to someone
twill2: DD, can you tell us any more about what you heard last night???
DinarDaddy: I feel we are pretty close… maybe even within a few days, but I am so skeptical with ALL information anymore that it’s hard for me to take anything as more than a rumor, even though I know where it’s coming from
bama69: and the auctions for the last two weeks have me pumped up
bubbie: dinardaddy can you tell us the importance of no cash auction’s in the last 14 days
DinarDaddy: you’ve got to understand. I’ve heard from the AUTHOR it was going down TWICE NOW… and it DID NOT HAPPEN… tells you how difficult this thing is
cbouwkamp: Author??
twill2: DD, if they don’t do something soon, do you think Shab will RV without Gov.
kaperoni: DD, one has to wonder though with the Auctions…its like 12 days now no USD sales
DinarDaddy: I can’t/won’t share any details about what I’ve been told… sorry. Some SPECIFICS are too sensitive, that if I shared those “specifics”, it could easily be traced back to the sharer
DinarDaddy: yes Kap.. yet ANOTHER indicator things are at an absolute head
DinarDaddy: twill2… yes, they can do that
kaperoni: DD, come on…this is a private room…no one else in here lol
DinarAddict: just bring it on and end this madness
DinarDaddy: you all should know what to do with information you are receiving..
DinarDaddy: you should all know WHO is trustworthy and who isn’t
Monica: Ok..question…when it happens, will it take days to go round the world?
kaperoni: bama pizza?
DinarDaddy: you should be able to tell intent, and discern what is worthy reading and what isn’t
DinarAddict: abso;utely we do know
Monica: or will it be more like flipping a switch and everyone knows?
kaperoni: DD, i have a serious question…maybe u would know the answer
kaperoni: it relates to Ali
DinarDaddy: I need to make a regular schedule of when I will be on here so we can all get together and plan our collaboration powwow
DinarAddict: u have ur office rented yet lol
tenmillion: DD that would be great!
twill2: DD, that sounds good
DinarDaddy: then again…. we may be creating that schedule to discuss POST-RV stuff… Let’s hope so
twill2: can you email schedule to us?
DinarAddict: i hope so
Monica: If you need an office in Kentucky…I’m a realtor/feng shui master…so I can find the perfect one!
DinarDaddy: I could use some feng shui right now… need a little peace in this madness
twill2: That sounds even better
bama69: dd ok spill it or i will bring out the gun
<bama69> sent sound: machine-gun
kaperoni: DD, do you know when or if Ali has aquired his locations? I know he states he has and will tell later, but i was wondering if he purchased locations, rented them or is just waiting til the time he needs them.
Monica: don’t shoot the messenger
twill2: kap good question
DinarDaddy: I shared everything I could in my post. You should be able to get what I was saying there. Be aware for the next 48-72 hrs… through up to 2 weeks… just be aware… things could change too! Like I said, I’ve had DIRECT information before and it still didn’t happen. I’m hoping this time things
DinarAddict: im waiting on that post that says RV is here
DinarDaddy: From what I understand with Ali is that he is still WAITING on the locations. He has already set up relationships that will allow him to move within 24 hours, so I wouldn’t worry about that too much Kap
kaperoni: dang beer…
<kaperoni> sent sound: flush
cbouwkamp: DD do you feel it will be in the middle of the night?
DinarDaddy: hey… IF GB4U, DaveD, Chip, or any of our other resident LOPsters come in, we’ll just send them to the LOPster’s Lounge… or the Debate Floor… k?
Monica: DD, do you think it will take a few days to work through? Or all at once?
DinarDaddy: yes I do cbouwkamp
DinarDaddy: for us that is…
cbouwkamp: I was hoping your twitter will be my life line
2atlow8: Will the zeros be deleted before or after RV
DinarDaddy: I believe it will take a few days for us to be able to cash in, but I do NOT believe there will be an RV, then a waiting period. That’s too risky. So, if you hear a rumor that it’s happened, but you can’t verify it on Forex, then don’t believe it.
DinarDaddy: We will ALL see it when it happens, and we’ll be able to verify it
pastor_glenn has joined.
cbouwkamp: Do you feel the amount will happen in stages?
Monica: Thanks.
dboner: Do you think the National bank of Dubai may show early or first?
DinarDaddy: I feel we will get an RV at an immediate rate we will want to cash in right away
saviorskid: so you believe we should go “all in” from the beginning?
DinarDaddy: dboner… it is MY OPINION ONLY… that we will ALL see the RV at the same time. I do NOT believe one bank will see it before another. It doesn’t work that way when they release it to the entire banking system
dboner: Only thought because of proximity they may have the first out of Iraq posts
cbouwkamp: Again I want to say thank you for everything
kaperoni: cbouwkamp, shab’s has already stated a “managed float”
twill2: Come on $1.46
dboner: on rates
2atlow8: wont the rate move up and down for the first few days
DinarDaddy: saviorskid.. I won’t give that kind of advice… I’m still trying to understand what will be happening post-RV
saviorskid: come on 3.22!
cbouwkamp: I didn’t think anyone was for sure what kind of float it would be
bama69: i think it will pop next two weeks or less
DinarDaddy: I personally feel I will have time to cash in a small portion, then cash in more later. Others feel you should cash in everything all at once. Each needs to make up their own mind about that
twill2: the $3.22 is right at what my wife says it will do.
DinarDaddy: 2adlow8… from what I understand, it will be a “managed float” for a while
twill2: DD, what is your guess in your on opinion about rate?
DinarDaddy: me too bama… at those rates we’d be nuts NOT to cash everything in-
2atlow8: thankswould hate to cash in at 3.22 and 2 days later it goes to 3.95
DinarAddict: i wont ill still be happy
kaperoni: though i dont think much will ever come back to the CBI, i do think there is some truth to the comment that the amount of dinar in circulation does effect the rv rate.
DinarDaddy: I have no opinion about the rate. I have been shared a LOT of information about various rates from different people. As such, I’m confused to be honest. I was originally told $3+ when I first got into this, so I’m still thinking it may be that, but at this point, I’d take .10 cents!
DinarEM: At this point I wont be greedy over 50 cents
dboner: don’t you think we have had the rates set by the MoP between 1.13 to the high of 3.20?
bama69: 2atlow8 why………greed will get the best of ya take what u get be happy
kaperoni: i am certain it will be over a buck. it makes no sense to be less.
DinarDaddy: dboner… I hoping we’ll see something with that range yes
cbouwkamp: So please explain what you think a managed float will be like
saviorskid: I tend to think it will be comparible to Kuwait
DinarDaddy: won’t move more than 4% in any given day
cbouwkamp: Do you believe DD it will be a managed float or like kuwait
Monica: Why was it necessary to sign a law allowing us to buy this stuff?
DinarDaddy: couwkamp… I already said that… managed float
dboner: That Mop doc has had 3 different copyright dates 06, 08 and now 2010 they seem to be quite set on these amounts
SkyR1der: what is managed float?
DinarEM: IMO it will come out comparable to Kuwait or at least the basket it will be in. This is teh only way to get large speculators out if they come out too low.
DinarDaddy: it was NOT an internationally recognized currency. In fact, it was a “terrorist state” who’s currency we’ve been exchanging for
kaperoni: Monica, it was not specific to the dinar…investment in iraq
DinarDaddy: It was a homeland security issue
tenmillion: dboner I heard it came out in 08
DinarDaddy: true kap
dboner: They have just cahnged the dates I first saw it with 06
tenmillion: hello scooter!
DinarDaddy: which was a way for them to allow the exchange in the Dinar as a court understood meaning without letting the “cat out of the bag” of most people’s understanding
kaperoni: scoooooterrrrrrrrrrrrrrr
DinarDaddy: otherwise, people would catch on too quickly with SPECIFICS
<kaperoni> sent sound: gong
scooter: Hey Tenmillion – The One and Only Kaperoniiiiiii
scooter: What’s up folks
kaperoni: that scooter theme sound..the master
bubbie: scooter hello!!
saviorskid: I just need some encouragement. I’m beginning to wonder if we’re all idiots
bama69: scooter i got yer back
scooter: bubbie — Howa are you ?
<bama69> sent sound: machine-gun
scooter: bama69
scooter: Don’t ever change
DinarDaddy: you all should know by now that this is cloak and dagger… you have to read between the lines… those who are negative about this are those who are GIVEN detailed information… even specifics they can show as backing for their arguments
Monica: I think everyone here has contemplated his/her own sanity regarding this investment.
tenmillion: scooter you’re da bomb!
<tenmillion> sent sound: bomb
kaperoni: DD, i think the iraqi’s are starting to see all the dinar leaving the country…they dont like it
scooter: lol
SkyR1der: How do we know who we should believe and who is just spouting off?
tenmillion: scooter lol
DinarDaddy: that’s the golden question Sky
scooter: DD — Does posting work the same as before — I have a monster post to put sir
SkyR1der: I am brand new to this and I am wondering who I should be listening to
DinarDaddy: you need to have the big picture in mind, then from there expose yourself to ALL the information you can reference so you can be prepared with that knowledge so you can understand
bama69: kap bingo wont be long now
saviorskid: that’s it Sky. Even people that you think would have an inside track seem to be throwing junk out there to keep us buying
scooter: tenmillin — then why are you shooting me?
scooter: lol
DinarAddict: surely u can tell who not to trust by all the posts and runors
tenmillion: scooter lol
kaperoni: skyR1der, bama knows everything!
cbouwkamp: its not that easy to tell who is telling what..especially when a lot of it seems to be in code
Monica: Trust your gut and relax as best you can. 10 out of 10 psychics can’t be wrong!
Monica: at least that ‘s how i do it
SkyR1der: There are so many people saying today, tomorrow, November and then there are so many people saying no one knows what they are talking about. It seems like some are mean and others are hopeful
kaperoni: bama lol
Feeling_Blessed: Did Scooter provide you with his “monster post”?
kwwebster123: Will this get done by the end of this month, or will it go on until next year? I’ve been in this for 7 years and counting.
DinarDaddy: I will go look
saviorskid: DD I’m assuming you are much more informed than anyone else. Is there going to be a RV before the end of the year in your opinion?
DinarDaddy: you all should know by now that I am the “HUB” of Iraqi DInar info… I am by no means a “GURU” who gets into telling you what is going to happen. As such, I won’t reveal what I’ve heard specifically, but I’ve shared enough for you to be hopeful, which you should. Sorry I can’t give more, but it’s
kaperoni: i will share something with everyone
DinarDaddy: saviorskid… I’ve already shared how I feel about this happening by the end of the year. Yes, I believe it will happen by the end of the year. If it doesn’t, then I already have been told why. Beyond that, I have no clue. DrJ’s information came out of the blue to me, and I’ve yet to hear from A
kaperoni: this is an interesting tidbit for sure
kaperoni: www.nmc.gov.iq/
kaperoni: go look at the GOI site
kaperoni: 1/2 of it gone
kaperoni: the lower half is blank
DinarDaddy: DrJ’s information came out of the blue to me, and I’ve yet to hear from ANYONE any information that would substantiate his claim for 2012. I’m not saying he’s lying. I believe he’s sincere, but as things stand right now, when compared to everyone else’s informaiton, I’ve got to side with the REST
kaperoni: go look at the GOI site
kaperoni: 1/2 of it gone
kaperoni: the lower half is blank
DinarDaddy: DrJ’s information came out of the blue to me, and I’ve yet to hear from ANYONE any information that would substantiate his claim for 2012. I’m not saying he’s lying. I believe he’s sincere, but as things stand right now, when compared to everyone else’s informaiton, I’ve got to side with the REST
kaperoni: seeeeeeeekkkkker
tenmillion: hello seeker!
seeker: hey kap!
DinarDaddy: sorry seeker… my resident mod here on chat… I made a post I’d be on here for about 30 min
seeker: hey tm!
<kaperoni> sent sound: silencer
dreamer: DD on a serious note, your site has alway been a 1st click on for many to get the scoop of the day. We all really appreciate you and your hours of service to the Dinar community! Thanks Big Daady!
saviorskid: How about the people at Dinar Trade. Do you think they are sincere?
kaperoni: DD, the bottom half is blank
kaperoni: no posts
drfir: holding my breath tenmillion
Feeling_Blessed: Ali and Dinar Trade are very reputable
DinarDaddy: yes, I completely believe what Ali and Dinar Trade has to say
seeker: savior–I’ve dealt with DT (Ali) twice and I swear by him… he’s bent over backwards for me!
Dinar Daddy has left the building! Go RV!
☼



theiraqidinar.com/2010/10/24/dinar-daddy-chat-102410/

[sandi66]

Barazani, Abdul Mehdi urge end of political crisis

Monday, October 25, 2010 11:38 GMT


Iraqi political parties pursue their meetings aimed to accelerate the formation of a national partnership government.

Iraqi Vice President and senior official in the national coalition Adel Abdul Mehdi met Kurdistan leader Massoud Barazani in Salahuddin province and stressed the necessity to end the political crisis in the country.

Both parties underlined the importance of enhancing efforts aimed to accelerate the government formation mainly after the federal court deemed Parliament open sessions unconstitutional.


www.alsumaria.tv/en/Iraq-News/1-55550-.html

[sandi66]

Iraq acting speaker cancels open session

Monday, October 25, 2010 11:21 GMT


Iraqi Parliament acting speaker Foad Massoum will abide by the Federal Court decision to cancel parliament open session, he said.

Massoum will convene Parliament within the coming days after quick consultations with parliamentary parties on a specified date for holding the session.

The court’s decision is right and binding in light of the current political developments in the country and the failure of government formation talks which have delayed regular sessions and imposed an open session, he said.

www.alsumaria.tv/en/Iraq-News/1-55549-Iraq-acting-speaker-cancels-open-session.html

[sandi66]

Alstom signs $27.8 mln deal to repair Iraq power plant
Mon Oct 25, 2010 10:21am GMT

* Power station in relatively calm city of Najaf

* Rehabilitated unit to be connected to grid in 2011

BAGHDAD Oct 25 (Reuters) - French engineering group Alstom (ALSO.PA: Quote) signed a 20 million euro ($27.83 million) contract with Iraq on Monday to rehabilitate a unit at one of its power plants.

Alstom, the maker of industrial power plants and high-speed trains, said in a statement it would rehabilitate a unit at the gas-fired power station in Iraq's holy Shi'ite city of Najaf.

The unit, which has been out of operation for five years, is expected to be reconnected to Iraq's electricity grid by summer in 2011, Alstom said.

Iraq's power infrastructure has been badly damaged by decades of war and sanctions, and 7-1/2 years after the U.S.-led invasion, its national grid still only supplies a few hours of power a day.

Intermittent electricity is one of the public's top complaints.

Iraq's available power capacity is around 9,000 megawatts, and installed capacity at 11,000 to 12,000 MW, according to Iraqi officials. Demand during summer, when temperatures frequently exceed 50 Celsius, is estimated to reach 14,000 MW.

Alstom signed an initial agreement with Iraq in July to rehabilitate Najaf power station. Under the memorandum of understanding, the French firm would also build a power plant that could cost up to $2 billion near the southern oil hub of Basra, and supply and supervise substations in various locations around the country. [ID:nKAM925149] Iraq's Oil Minister Hussain al-Shahristani, who has temporarily taken over the electricity portfolio, has said Iraq's electricity consumption is expected to rise by 10 percent every year over the coming 20 years.



af.reuters.com/article/energyOilNews/idAFLDE69O0W820101025

[sandi66]

OTC derivatives trade grows in 2010 despite crackdown -ISDA




Mon Oct 25, 2010 6:28am EDT

* OTC derivative trades up 1 percent

* Interest rate derivatives up 2 pct in first half of 2010

* Credit and equity derivative trades fall

* Top five U.S. dealers control 37 pct of the total volume

By Daisy Ku

HONG KONG, Oct 25 (Reuters) - The outstanding amount of over-the-counter derivatives rose during the first half of 2010 despite calls by regulators to move much of the market on to exchanges, the International Swaps and Derivatives Association said on Monday.

The ISDA said the total notional amount outstanding of OTC derivatives amounted to $466.8 trillion as of June 30, up 1 percent from the end of 2009.

Global regulators are trying to make derivatives trading more transparent after the opacity of the OTC market was blamed for the near-collapse of U.S. insurer AIG (AIG.N) in 2008. [nLDE69C1SP]

The Financial Stability Board (FSB) last week, ahead of a G20 finance ministers' meeting in Seoul, recommended ways to ensure that as many contracts are standardised so they can be centrally cleared and traded on exchanges. [ID:nTOE69J086]

Figures from the ISDA would indicate that the regulatory process is only just beginning, with the OTC market continuing to grow.

The bulk of the increase was focused in the huge market for interest swaps, with trade in the smaller equity and credit OTC derivatives slipping.

The notional amount outstanding of interest rate swaps, options and cross-currency swaps grew by 2 percent to 434.1 trillion in the six months, from $426.7 trillion at the end of 2009, while volumes in credit derivatives and equity derivatives were down 14 percent and 6 percent, respectively, according to ISDA mid-year market survey.

The ISDA survey also revealed that OTC derivatives at the 14 biggest international derivative dealers, known as the G14, was $354.6 trillion, representing 82 percent of the total volume reported.

The top five U.S.-based dealers held 37 percent, or $172.3 trillion worth of OTC derivatives, according to the survey.



www.reuters.com/article/idUSTOE69O07P20101025

[sandi66]

Dollar Weakens on G-20 Vow, Fed; Stocks, Commodities Advance
By Stephen Kirkland - Oct 25, 2010 5:46 AM ET

The dollar weakened, touching a 15- year low against the yen, on skepticism the Group of 20 pledge to avoid devaluations will stem the U.S. currency’s decline. Stocks, U.S. futures and Treasuries rose, while copper and cotton rallied.

The dollar depreciated against all 16 of its most-traded counterparts, slipping 1 percent to 80.59 yen and 0.6 percent to $1.4042 per euro at 10:40 a.m. in London. The yield on the 30- year U.S. Treasury bond fell four basis points to 3.90 percent, while the 10-year U.K. gilt yield sank three basis points to 2.92 percent. The MSCI World Index gained 0.6 percent, while futures on the Standard & Poor’s 500 Index added 0.6 percent. Cotton jumped 3.8 percent and copper advanced 2.4 percent.

G-20 officials vowed to refrain from “competitive devaluation” and to let markets set foreign-exchange values, as speculation increased the Federal Reserve will announce another round of quantitative easing to bolster the U.S. economy. Singapore Exchange Ltd. agreed to buy ASX Ltd., Australia’s main stock-exchange, for A$8.4 billion ($8.3 billion). Deals have climbed 24 percent to $1.65 trillion this year from the same period in 2009 as companies spend stockpiled cash to expand, according to data compiled by Bloomberg.

“Risky assets are performing on the view we’ve taken a small step from the risk of a trade war,” said Adam Cole, global head of currency strategy at Royal Bank of Canada Europe Ltd. in London. “That’s generally leaving the dollar lower.”

Dollar, Pound

The Dollar Index, which tracks the U.S. currency against those of six trading partners, dropped 0.8 percent to 76.886, snapping a two-day gain. Sweden’s krona appreciated against all but two of its most-traded peers before the nation’s central bank decides on interest rates tomorrow. The Riksbank will boost its seven-day repo rate to 1 percent from 0.75 percent, according to all 20 economists surveyed by Bloomberg.

The pound weakened against 12 of its 16 most actively traded counterparts, falling as much as 0.9 percent to 126.46 yen, the least since Feb. 2, 2009, and depreciating 0.3 percent to 89.19 per euro.

Cotton futures jumped as much as 4.2 percent to a record $1.2471 a pound on prospects for crop damage in China and the U.S. and declines in the value of the dollar, boosting demand for commodities as a hedge. Copper climbed $191 to $8,525 a metric ton, palladium advanced 3 percent and crude oil gained 1.5 percent to $82.93 a barrel.

BHP, Hermes

The Stoxx Europe 600 Index rose 0.3 percent as more than two stocks gained for every one that fell. Basic-resource companies led the advance, with BHP Billiton Ltd., the world’s largest mining company, rallying 2.9 percent. Hermes International SCA surged 7.5 percent after LVMH Moet Hennessy Louis Vuitton SA agreed to buy a 17 percent stake.

The MSCI Asia Pacific Index added 1.3 percent as ASX Ltd. soared 19 percent in Sydney. Singapore Exchange declined 4.6 percent. KDDI Corp., Japan’s second-largest mobile-phone operator, surged 7.3 percent after announcing a 100 billion yen ($1.2 billion) stock buyback. Kia Motors Corp. advanced 5.8 percent after Goldman Sachs Group Inc. raised its rating to “buy” from “neutral.”

The gain in U.S. futures indicated the S&P 500 may rise for a fourth day. Sales of U.S. existing homes probably climbed in September for a second month, economists said before a National Association of Realtors report due at 10 a.m. in Washington today. Purchases rose to a 4.3 million annual rate, up 4.1 percent from August, according to the median of 64 forecasts.

Texas Instruments

More than 85 percent of S&P 500 companies that have posted third-quarter results since Oct. 7 topped the average analyst profit projection, according to data compiled by Bloomberg. Texas Instruments Inc. is among 10 S&P 500 companies scheduled to report earnings today.

The cost of insuring against losses on corporate bonds dropped to the lowest since May in the market for credit-default swaps. The Markit Crossover Index of swaps linked to 50 European mostly high-yield companies fell 13 basis points to 446, according to JPMorgan Chase & Co.

The yield on the 10-year Treasury note declined almost three basis points to 2.53 percent. The U.S. auctions $10 billion of five-year Treasury Inflation Protected Securities today, and will also sell $99 billion of two-, five- and seven- year debt this week.

German bonds rose, sending the yield on the 10-year bund down two basis points to 2.46 percent. Belgium auctions as much as 2.8 billion euros of 2013, 2016 and 2020 securities today.

The MSCI Emerging Markets Index added 1 percent, the most in almost two weeks. The Shanghai Composite Index jumped 2.6 percent to a six-month high as Gree Electric Appliances Inc., China’s largest maker of home air-conditioners, surged 6.9 percent and liquor maker Luzhou Laojiao Co. gained 9.5 percent after reporting higher profit. Benchmark indexes in Russia, Taiwan and Indonesia rallied more than 1 percent.



www.bloomberg.com/news/2010-10-25/asian-stocks-gain-as-sgx-buys-asx-dollar-weakens-on-g-20-currency-pledge.html

[sandi66]

Ben Fulford: "Major announcements due for mid-November, legal action against illuminati possible this week"

Posted By: hobie <Send E-Mail>
Date: Monday, 25-Oct-2010 14:51:09 Hi, Folks -

Here's the opening paragraph from this week's by-subscription Geopolitical News and Analysis article by Ben Fulford:

=====



Major announcements due for mid-November, legal action against illuminati possible this week


Posted by benjamin

October 25, 2010



Events are starting to unfold at an accelerating pace as the ancient “New World Order” continues its collapse. First of all, sources in Japanese military intelligence say there will be “huge announcements” sometime in mid-November, no doubt linked in part to the November 11th G20 meeting in Korea. The other big move is that the $1 trillion lawsuit involving Daniele Dal Bosco, the P2 Freemason lodge, the Davos forum and the UN will be backed by the Pentagon and will become public news possibly as soon as this week. We have also confirmed that all members of the Bilderberger, the Trilateral Commission and the Council on Foreign Relations have been individually warned and are “very scared.”


=====
--hobie



www.rumormillnews.com/cgi-bin/forum.cgi?noframes;read=185757

[sandi66]

Can the Fed Really Unleash a Big QE2 Program?
by: Graham Summers October 26, 2010

Last Friday I wondered aloud if perhaps China and the US had struck a “backroom” deal regarding their roles in the ongoing “currency wars.” My primary reason for wondering this stemmed from a dramatic change in Treasury Secretary Tim Geithner’s rhetoric concerning the US Dollar, combined with China’s sudden decision to raise interest rates.

After all, the US had been branding China a currency manipulator and blaming it for the former’s financial and economic woes for months. China, in turn, had responded by lowering the rate of its purchases of Treasuries, charging that the US Fed was damaging global balances and issuing veiled threats that it might consider the “nuclear” option of actively dumping US debt.

In this context, the sudden change in Geithner’s rhetoric, combined with China’s move to raise interest rates, marks a massive change in monetary posturing. It is, in a sense, a 180 on the US’s part combined with an “actions speak louder than words” move on China’s part.

Seeing these two developments, I couldn’t help but wonder if the world’s two super powers (one on the decline, the other on the rise) had struck a “backroom” deal on currency issues: the US to stop demonizing China while destroying its own currency and China to make monetary gestures signifying it won’t continue to “manipulate” its currency lower (yes I know the two currencies are pegged, but China’s move is a gesture towards strengthening the Yuan).

Of course, this is mere conjecture... for now. However, given how lopsided the “inflation trade” is and given just how much this latest stock market rally has been fueled by expectations of the US Federal Reserve announcing an enormous ($1 trillion+) QE 2 Program at its November 3 meeting, these developments could have a major impact going forward.

Indeed, this change in China/ US rhetoric provides a new, totally non-discounted backdrop to the market’s expectations of a QE 2 program from the US Federal Reserve. Everyone assumes the Fed will announce a massive program. But in light of these recent developments, I wonder if it actually can.

Consider that over the weekend the G20 meeting saw Germany, India, and China all blasting US monetary policies for creating bubbles and damaging global trade balances. We’re already seen hints of trade wars between China and the US with rare earth elements. And we’ve also seen a currency war break out globally with Brazil, Colombia, Peru, Russia, South Korea, Serbia, Romania, Switzerland, and Thailand all actively intervening in the currency markets.

This last point is key as it indicates foreign powers are more than willing to engage in outright intervention in order to fight the Fed’s anti-Dollar policy (cheaper Dollars means appreciation in foreign currencies, which in turn squeezes exporting margins). In this context we have to seriously ask, can the Fed really announce a massive QE 2 program?

After all, if the Fed does announce such a program, then we are undoubtedly heading into outright trade wars, tariffs, and even more currency intervention.

True, Bernanke has ultimately got his sights set on destroying the US Dollar. But with global tensions growing, he’s got to walk a fine line between saving Wall Street and pissing off the US’s biggest creditor (and the only country that still owns more US debt than the Fed).

However, if the Fed doesn't announce any QE 2, then we are likely heading into a crash for stocks. Remember, the only thing that kept us above 1,000 on the S&P 500 in July (and that caused stocks to rally from mid-August onward) was hints and promises of more liquidity and hopes of more QE. If the market is disappointed by no QE 2 announcement, then we are wiping out the 12+% rally from September in short order and likely heading to 1,000 on the S&P 500.

Obviously, neither of these options is too appealing for the Fed. So it seems to me that the most likely outcome is more “half measures” similar to the current QE lite program which involves the Fed buying US debt without (supposedly) printing money to do it.

Thus, I expect that the Fed’s November 3 meeting will unveil something along these lines: a program that involves the Fed buying more US debt in a way that doesn’t piss off the US’s creditor nations or the US populace too much.

A good example would be for the Fed to announce another $100-200 billion or so in debt purchases (a decent amount but not nearly the huge amount the stock market expects). The Fed could always sugar coat this disappointment with promises of additional stimulus if needed so as to mitigate the damage to stocks.

My primary point is this: the Fed wants to announce a large QE 2 program. But it might not be able to do this without rocking the global monetary boat too much. Consequently, we may be approaching a fantastic trading opportunity to the downside after the Fed’s November 3 meeting. The market has already priced in a massive QE 2 program. So any disappointment could result in a sharp reversal and correction.

If you have not already taken steps to profit from the next market correction, now is the ideal time to do so. Stocks are trading at elevated levels courtesy of Fed juicing and Wall Street's shenanigans. It's only a matter of weeks or even days before we catch the next "down draft" and are back at 1,050 on the S&P 500 in short order.

After all, that's where stocks were when all this QE 2 nonsense took over the markets.



seekingalpha.com/article/232224-can-the-fed-really-unleash-a-big-qe2-program

[sandi66]

UPDATE: China Yuan Down Slightly As Higher Fixing Boosts Dollar Demand
OCTOBER 26, 2010, 5:37 A.M. ET


Vs Parity Pvs
USD/CNY Central Parity 6.6762 6.6729
USD/CNY OTC 0930 GMT 6.6627 -0.20% 6.6581
High 6.6667 -0.14%
Low 6.6596 -0.25%


SHANGHAI (Dow Jones)--China's yuan was slightly lower against the U.S. dollar late Tuesday after the central bank set a higher central parity rate, prompting traders to shift into dollars.

Traders said the relatively high dollar-yuan central parity fixings in recent sessions indicate the central bank aims to stabilize the yuan following its gains in September and the first half of October. However, they added market participants still expect the yuan to appreciate further in the long term.

On the over-the-counter market, the dollar was at CNY6.6627 around 0930 GMT, up from Monday's close of CNY6.6581. It traded between CNY6.6596 and CNY6.6667.

The People's Bank of China set the dollar-yuan central parity rate at 6.6762, its highest level since the central bank set it at 6.6775 on Oct. 12 and up from 6.6729 Monday.

A Shanghai-based trader at a European bank said the relatively steady central parity rate of recent sessions had prompted some traders to trim their expectations that the yuan will appreciate in the near term. "The fixing has stabilized," he said. "That has had some impacts on trading."

Traders said the weekend meeting of central bank governors and finance ministers of the Group of 20 nations, which pledged not to engage in competitive currency devaluations, and the subsequent meeting Sunday between U.S. Treasury Secretary Timothy Geithner and Vice Premier Wang Qishan likely helped ease some international pressure on China to let its currency appreciate.

The yuan rose 2.8% between June 19, when China pledged to increase the currency's trading flexibility, and Oct. 15, when it hit its last record closing high since it began trading regularly in 1994.

"People feel that there's little room for the dollar-yuan to fall in the near term," said a Shanghai-based trader at a local bank. "This range-bound condition could persist through the end of this month."

But developed countries may increase their calls for a stronger yuan in November, when the U.S. will hold its mid-term elections and the G-20 summit takes place in South Korea, the trader added.

Offshore, the one-year dollar-yuan nondeliverable forward was at 6.4740/6.4790, up from 6.4400/6.4450.



online.wsj.com/article/BT-CO-20101026-704292.html

[sandi66]

UPDATE 1-Germany says severely hit by rare earth scarcity


Tue Oct 26, 2010 5:42am EDT

* Economy minister says rare earths getting rarer

* Calls speculation detrimental to producers

(Adds detail, background)

By Juliane von Reppert-Bismarck

BERLIN, Oct 26 (Reuters) - Germany has been severely hit by the global shortage of rare earths, and the government should guard against speculation in raw materials, Economy Minister Rainer Bruederle said on Tuesday.

Germany's electronics industry has said the market for rare earths, used to manufacture a range of high-tech products, had become "critical" due to restrictions on exports imposed by China, which produces 97 percent of the world's supply.

"We are severely affected when it comes to energy resources and ... rare earths which are growing scarce," Bruederle said at a raw materials conference in Berlin.

"When speculation is rife, you lose the foundation in the economy," he said. "And that is detrimental for the producing industries. Pricing frameworks must remain on our agenda."

No official representatives of China were present at the conference, hosted by Germany's BDI industry association.

China's dominance of rare earths used in high-tech products has drawn growing international attention after reports that the government has been choking off shipments, possibly out of political pique. [ID:nSGE69L0IB] [ID:nTOE69N010]

Turning to global efforts to address trade imbalances, Bruederle said Germany was ready for a "frank dialogue" with the United States but he rebuffed a proposal by U.S. Treasury Secretary Timothy Geithner for a 4 percent limit on trade imbalances.

Rare earths consist of a set of 17 minerals with magnetic, luminescent and other properties that make them useful in hard drives, magnets, lasers and other gadgets important in computing, clean energy and military applications.



www.reuters.com/article/idUSLDE69P0VP20101026

[sandi66]

Baghdad Will Ask United States to Extend Its Military Role



First Published: 2010-10-26


Former ambassador to Iraq Ryan Crocker (2007-2009) says that in spite of Iran's clout in Iraq, the next Iraqi government -- led once again by Prime Minister Maliki -- will ask the US to stay on past 2011, says Robert Dreyfuss


Middle East Online


If nothing else, Ryan Crocker is an optimist. Speaking to a conference sponsored last week by the National Council on US-Arab Relations (NCUSAR), Crocker laid out what can only be called a rosy, if not Pollyanna-like view of Iraq’s future as a friend and ally of the United States.

Crocker, of course, was ambassador to Iraq from 2007-2009 (the “surge years”) and, before that, ambassador to Pakistan (2004-2007). He’s a longtime Arabist, having also served as America’s ambassador in Syria, Kuwait, and Lebanon, as well as posts in Egypt, Iraq, and elsewhere in the Middle East. Currently, he’s the dean of the George Bush School of Government at Texas A&M, which, it should be pointed out, is named after Bush 41, not the bungling, neoconservative-bewitched Bush 43 (“W”). The audience that Crocker addressed was very establishment, since NCUSAR is sponsored by the U.S. military-industrial complex (Lockheed Martin, Boeing, Raytheon, Northrop Grumman) along with ExxonMobil, Chevron, and their allies in the oil-rich Gulf Arab states.

In his remarks, Crocker downplayed Iran’s role in Iraq, and he suggested that when the dust clears in the formation of a new government in Iraq that Baghdad would come to the United States to ask for an extension of the US military presence beyond the end of 2011. By that date, according to the accord signed in 2008 by the Bush administration, all US troops are to leave Iraq. But Crocker said that it is “quite likely that the Iraqi government is going to ask for an extension of our deployed presence.”

He added, perhaps for the benefit of the many defense contractors in the audience, that the United States will probably be called on to supply heavy military equipment to Iraq, including battle tanks and combat aircraft, both of which the Iraqi armed forces currently lack. Such a resupply effort, by the American military-industrial complex, will start in earnest in the 2013-2015 time period, Crocker suggested.

He also predicted that Prime Minister Maliki would return to that office, atop a broad-based government that would include Shiites, Sunnis, and Kurds. He outlined innumerable problems that Iraq faces -- a refugee crisis, Arab-Kurd tensions, countless disputed internal boundaries, the leftover forces of the Sons of Iraq (the old sahwa or Awakening movement) – but he expressed optimism that Iraq will deal with each of these. And he called the United States the “indispensable outside power” that can “help to broker compromises.”

The notion that Maliki, who has recently established an alliance with Muqtada al-Sadr, can form a government that might include Sadr but exclude former Prime Minister Allawi and his Iraqiya bloc recently set off alarm bells in Washington. Allawi’s bloc represents secular Shiites, anti-Iran nationalists, and most Sunnis, and it is generally anti-Iran and pro-American. Sadr, who lives in Iran and whose support for Maliki was reportedly engineered by Tehran, isn’t likely to want to come to the United States to ask for an extension of the US military presence beyond 2011, as Crocker predicts. But it’s likely that the Kurds, who hold the balance of power, will refuse to back Maliki unless the prime minister cuts a deal with Allawi, too, undermining Sadr’s clout. The Kurds, though mostly pro-American, are heavily influenced by Iran, too, and are caught in the middle.

After he spoke, I interviewed Crocker. When I asked about the Maliki-Sadr pact, he said: “The Sadr-Maliki relationship is fundamentally difficult and unstable. It fell apart once before. We’ll see how long it lasts this time. I’m not overly concerned about the Sadr-Maliki alliance.”

I asked Crocker about Iran’s role. “Iran is going to try to control or dominate affairs in Iraq,” he said. “But Iranian influence is self-limiting. The harder they push, the more resistance they get.” He said that Iran still supports various armed militia in Iraq, but that Iraqi nationalism will assert itself against Iran.

So far, unlike during the Bush administration, the Obama administration has chosen not to engage Iran over Iraq diplomatically. When he was ambassador, Crocker held a series of meetings with Iran’s then-ambassador in Baghdad, a senior official of the Revolutionary Guard, to discuss United States.-Iran cooperation. When I asked Crocker about whether the resumption of such a dialogue might be useful now, he expressed some reservations. “The Obama administration has rightly said that it would agree to discuss a range of issues with Iran,” said Crocker. But he said that Washington must be very careful about any effort that might make it look like Washington and Tehran were talking about Iraq’s future without Baghdad’s consent. “The Iraqis are very sensitive to that,” he said.

True enough. (Also, the Gulf Arabs, especially Saudi Arabia, are paranoid about better relations between the United States and Iran, since they think it might come at their expense.) But Iran has been pushing hard for influence in the next Iraqi government, and behind the scenes it has a lot of clout with Maliki, his secretive Dawa party, and many of his security officials. So far, Allawi is resisting a deal with Maliki, claiming that since he won the most votes (gaining 91 seats in parliament to Maliki’s 89) he ought to have the prime minister’s job or at least kingmaker’s role. In recent weeks, it’s been reported that Allawi has made a deal with another Shiite bloc, including the Islamic Supreme Council of Iraq (ISCI) and the Fadhila party, to let one of their top officials, ISCI’s Adel Abdel Mahdi, become prime minister. But there’s no way that Maliki will step down in favor of Allawi and Abdel Mahdi. Thus, Crocker -- and the United States more generally -- seem to have accepted Maliki’s reelection, provided he can swing a deal with Allawi as a junior partner.

It’s encouraging that Iran has recently joined talks with the United States and other world powers over the future of Afghanistan. It’s encouraging that talks between Iran and the United States, along with the rest of the P5+1, are likely going to restart next month over Iran’s nuclear program. It would be even more encouraging if the Obama administration would start talking actively to Iran about Iraq, too.

Robert Dreyfuss, a contributing editor for The Nation magazine, is an investigative journalist in Alexandria, Virginia, specializing in politics and national security. He is the author of Devil's Game: How the United States Helped Unleash Fundamentalist Islam, and is a frequent contributor to Rolling Stone, The American Prospect, and Mother Jones.




www.middle-east-online.com/english/?id=42188

[sandi66]

China Day Ahead: AIA Rises in Grey Market; Fuel Prices Rise by 3 Percent

Oct 25, 2010 6:47 PM ET

AIA Group Ltd. traded 9.2 percent higher than its initial public offering price in unofficial over-the-counter trading yesterday after raising $17.8 billion in its Hong Kong IPO, according to three people with knowledge of the transactions.

AIA’s shares last traded at HK$21.50 ($2.77) each yesterday according to “gray market” transactions brokered by Cantor Fitzgerald LP, said the people, who declined to be identified because the information isn’t public. New York-based American International Group Inc.’s main Asia unit priced its IPO at HK$19.68 a share last week and the stock is scheduled to start official trading on the Hong Kong Stock Exchange on Oct. 29.

Fuel Prices Rise

China, the world’s biggest energy consumer, increased retail gasoline and diesel prices by 3 percent today as part of government measures to cool the economy and to meet energy- saving targets.

The ceiling for gasoline prices will rise by 230 yuan ($34.50) a metric ton and diesel prices will gain 220 yuan a ton, the National Development and Reform Commission, the top economic planner, said in a statement on its website yesterday.

China Railway Saudi Loss

China Railway Construction Corp. builder of more than half the nation’s railroads, will book a loss of 4.15 billion yuan on its Mecca light-rail project, pending compensation talks with the client.

The construction contractor will book a charge of 3.605 billion yuan in the third quarter of 2010, causing “material” damage to earnings for the three-month period and the year, the company said in a Hong Kong stock exchange filing yesterday.

Chalco Sees FY Profit

Aluminum Corp. of China Ltd., the nation’s biggest producer of the metal, forecast a full-year profit even as it reported a consecutive quarterly loss after government power controls curbed aluminum output.

Chalco, as the Beijing-based company is known, had a loss of 117.8 million yuan for the three months ended Sept. 30, according to a statement to the Shanghai stock exchange. The loss compared with a profit of 21 million yuan a year earlier.

ZTE U.S. Orders

ZTE Corp., China’s second-biggest maker of telephone equipment, said it plans to buy $3 billion in semiconductor parts from Qualcomm Inc., Texas Instruments Inc., Freescale Semiconductor Inc., Altera Corp. and Broadcom Corp.

The purchases will happen over three years and are aimed at helping ZTE improve sales to telecommunications customers in the U.S., according to an e-mail from the Shenzhen, southern China- based company. The U.S. has become the focus of ZTE’s efforts to boost business, including agreements to sell two devices through Verizon Wireless.

China Home Prices

Singapore and China led the world in home-price appreciation in the second quarter amid accelerating economic growth in both countries, according to real estate consultant Knight Frank LLP.

Home prices in Singapore gained 37 percent from a year earlier, according to a statement by TJE London-based company. In mainland China, based on the cities of Beijing and Shanghai, prices rose 36.8 percent, Knight Frank said.

Japan-China Ties

Foreign Minister Seiji Maehara said Japan is working to mend frayed ties with China while at the same time looking for alternative sources of rare earth metals.

“It’s certainly not good for our own resource security to rely on a single country,” Maehara said yesterday in an interview in Tokyo. With China controlling 97 percent of the rare earth market, “we’re in the process of diversifying our supply sources.”

Ghana China Loans

Ghana will start work on projects funded with $9 billion of loans from Chinese banks next year, Trade Minister Hannah Tetteh said.

The projects, agreed upon during President John Atta Mills’s visit to China last month, will be preceded by technical preparations that will have to be approved by parliament, Tetteh told reporters in the capital, Accra.

MARKETS:

U.S. stocks rose, sending the Standard & Poor’s 500 Index to a fourth straight gain, after the Group of 20 nations pledged to avoid “competitive devaluation” of currencies and investors bet the Federal Reserve will announce further bond purchases next week.

DuPont Co., Kraft Foods Inc. and Walt Disney Co. climbed more than 1.4 percent to lead gains in the largest U.S. companies. Citigroup Inc. rallied 2.4 percent as Goldman Sachs Group Inc. added the shares to its “conviction buy” list. CommScope Inc. surged 30 percent as a private equity firm considered a takeover. Office Depot Inc. gained 3.5 percent after saying earnings will beat estimates.

The S&P 500 advanced 0.2 percent to 1,185.62 at 4 p.m. in New York, adding to three weeks of gains and climbing above its highest close since May 3. The Dow Jones Industrial Average rose 31.49 points, or 0.3 percent, to 11,164.05.

THE FOLLOWING STOCKS MAY BE ACTIVE TODAY:

Coal producers: Coal prices at China’s Qinhuangdao port, a domestic benchmark, increased 1 percent to between 735 yuan and 755 yuan a metric ton as of yesterday, from a week earlier, according to data from China Coal Transport and Distribution Association.

China Shenhua Energy Co. (601088 CH): The nation’s largest coal producer advanced 3.9 percent to 30.04 yuan. China Coal Energy Co. (601898 CH), the second largest, rose 2.5 percent to 13.14 yuan.

Aluminum Corporation of China (601600 CH): China’s biggest producer of the metal forecast a full-year profit, even as it reported a consecutive quarterly loss after government power controls curbed aluminum output. The shares rose 4.4 percent to 12.86 yuan.

Anhui Conch Cement Co. (600585 CH): China’s biggest maker of the building material said third-quarter profit rose 45 percent to 1.36 billion yuan ($204.3 million). The shares climbed3.7 percent to 27.26 yuan.

Anhui Jingcheng Copper (002171 CH): The copper plate strip producer’s third-quarter net income rose 43.4 percent from a year earlier to 21.8 million yuan. The shares jumped 10 percent to 22.37 yuan.

Beijing Capital Tourism Co. (600258 CH): The company’s third-quarter net income increased 9.7 percent from a year earlier to 41.2 million yuan. The stock rose 1.3 percent to 22.96 yuan.

Beijing Enterprises Water Group Ltd. (371 HK): The water- supply provider said it will buy a 45 percent stake in Guiyang Water Co. for 721 million yuan. The stock fell 2.9 percent to HK$2.67.

Galaxy Entertainment Group Ltd. (27 HK): The Macau casino operator said Steve Wolstenholme, chief operating officer of Galaxy Macau, resigned, and Michael Mecca, COO of the parent, will take the job temporarily. Jeffrey King, senior vice president of marketing at Galaxy Macau, also resigned. The stock fell 1.5 percent to HK$7.05.

Ming Fung Jewellery Group Ltd. (860 HK): The jeweler and and watch distributor Hengdeli Holdings Ltd. (3389 HK) said they signed a binding agreement for a retailing venture in China. Ming Fung gained 9.5 percent to 81 Hong Kong cents. Hengdeli was unchanged at HK$4.30.

NewOcean Energy Holdings Ltd. (342 HK): The gas distributor signed an agreement to acquire Lianxin Energy Development Co., which operates 17 filling stations in Guangzhou for buses and taxis. The stock will resume trading in Hong Kong tomorrow.

Sinofert Holdings Ltd. (297 HK): The fertilizer producer said it signed an agreement to buy potash fertilizers from Canpotex Ltd. for as much as $52 million. The stock fell 1.4 percent to HK$4.38.

Wing Hing International Holdings Ltd. (621 hk): The Hong Kong-based construction contractor said it’s in talks to invest in gold mines overseas and to dispose of certain assets. The stock surged 9.6 percent to 57 Hong Kong cents.

Xinyi Glass Holdings Ltd. (868 HK): The float-glass maker said it signed a letter of intent with Wuhu city in Anhui province to set up a plant that will make ultra-thin electronic glass products. The company also plans to invest HK$250 million to generate electricity from the residual heat from its float- glass furnaces. The stock gained 7.5 percent to HK$6.33.


EVENTS HAPPENING TODAY:

9:25-10:05am Motech CEO P.H. Chang to speak at PV Taiwan
forum
11:00-11:40am Gintech President Wen-whe Pan to speak at PV
Taiwan forum
4:30pm Hong Kong September trade data

Earnings:
East Communications
Guangzhou Baiyun Airport
COSCO Shipping
Shandong Gold
Huadian Power
China Coal
Zhongjin Gold


BLOOMBERG TELEVISION GUESTS SCHEDULED FOR TODAY:

7:40am Klaus Paur, China Auto Market Consultant

9:40am Bill Majcher, Baron International, Managing Director

10:40am Andrew Freris, BNP Paribas, Sr. Investment Strategist:
Asia

www.bloomberg.com/news/2010-10-25/china-day-ahead-aia-rises-in-grey-market-fuel-prices-rise-by-3-percent.html

[sandi66]

Foreclosure Lawyers Go to Gardner's Farm for Edge on Lenders

Oct 27, 2010 12:00 AM ET

Consumer lawyers have been traveling to a remote 160-acre farm in the mountains of western North Carolina since 2006 to network, drink Scotch and prepare for legal combat in foreclosure and bankruptcy cases.

They arrive in groups of a dozen or so for a four-day boot camp where they learn how to protect their clients’ assets by exploiting the mistakes of creditors. Attendees these days are especially keen on strategies to fend off mortgage lenders and servicers seeking to seize their clients’ homes.

Their instructor is O. Max Gardner III, a 65-year-old bankruptcy litigator and grandson of a North Carolina governor, who was using flaws in mortgage servicing to stave off lenders years before cases involving shoddy paperwork spurred this month’s investigation of the industry by the attorneys general of all 50 states. He charges $7,775 for the program, which covers 3,000 pages of materials, lodging, food and unlimited wine, beer and single-malt Scotch.

“My time with Max changed the trajectory of my legal career,” Nick Wooten, a 40-year-old Alabama attorney who changed his focus from personal injury to bankruptcy and foreclosure after attending the boot camp in 2007, said in a telephone interview. “Knowledge is power, and one thing he is able to give in his boot camp is a tremendous amount of knowledge about how the other side operates.”

Participants, who are admitted only after a background check confirms that they don’t work for creditors, gain access to a private e-mail distribution list where they share legal strategies, documents and advice. Linda Tirelli, a consumer- bankruptcy attorney in New York and Connecticut and one of the 599 people who have gone through the program, said she feels like she’s now part of a big law firm.

National Issue

While Gardner and some of his graduates have been winning settlements for years, it wasn’t until Ally Financial Inc.’s GMAC Mortgage unit said Sept. 20 it was halting some evictions that foreclosure documentation and the use of robo-signers became a national issue that threatened to stall sales of repossessed homes and gave investors ammunition in their fight to force banks to buy back billions of dollars of mortgage- linked securities.

“We had a steep hill to climb to convince the judges that the largest financial institutions in America were engaged in this kind of conduct,” Gardner said in an interview during a break in this month’s session.

Bunking in Cabins

Students travel along a gravel road to reach Gardner’s place in the South Mountains about 60 miles (97 kilometers) northwest of Charlotte, North Carolina. They sleep in cabins and swap stories over meals prepared by Gardner’s wife, Victoria, in the family’s three-story log cabin-style house on a hill overlooking a spring-fed pond. During days that run 10 to 12 hours, Gardner lectures on topics including “Max’s Favorite Discovery Devices,” “Strategy to Trap Opponents in their Own Mistakes,” “Mortgage Servicing Litigation: How the Legal Network for Creditors is Organized” and “The Alphabet Problem, A to D Unlawful Transfer of Mortgages and Notes.”

Guest speakers at the October session included a forensic accountant, a North Carolina Superior Court judge and the former vice president and general counsel of Saxon Mortgage Inc., which is owned by Morgan Stanley.

The heart of Gardner’s strategy is to uncover omissions and errors in mortgage securitizations, the process in which thousands of loans are bundled into bonds and sold to investors. Securitizations are plagued by lost promissory notes and missing or inconsistent tracking of changes in loan ownership, Gardner said the interview. Servicers processing default actions papered over the errors with improperly prepared affidavits and after- the-fact assignments of mortgages, he said.

‘Robo-signers’

“One of my primary objectives is to give you enough knowledge so that you can understand more about the business structure and organization of the creditors than their own lawyers know,” he told the boot-camp class.

He started the sessions after piecing together evidence that lenders and servicers were relying on teams of workers -- dubbed “robo-signers” in cases brought by other lawyers -- to process thousands of foreclosure documents a day without the time to verify them.

One tactic Gardner employs in court is to allow creditors that produce dubious evidence to “dig their own grave.”

“I wouldn’t go in waving documents around,” he said. “The more false documents and inconsistent documents I get the other side to produce, the more legal leverage I have against them.”

Gardner’s boot camp is the “story behind the story,” said attorney Tirelli, who attended the program in October 2008 after first balking at the price.

More Profitable Practice

Tirelli, a sole practitioner who works on contingency, said she now makes four times more from a case than she did before changing her business model. Gardner, who devotes one wall in the boot-camp classroom to framed settlement checks, tells students they can be more profitable by concentrating on a smaller number of cases. Tirelli, who accepts no more than 20 clients a month, said she has the confidence to go up against what Gardner calls “tall building law firms” because the community of graduates located in 47 states functions as a unit, exchanging documents and discovering patterns of misconduct, she said.

“It’s a fraternity,” Tirelli said. “We don’t see each other as competition. We want more attorneys to join because the more we have the better.”

Compensation Varies

Private attorneys working on behalf of homeowners can be paid in different ways, said Margery Golant, a lawyer in Boca Raton, Florida, who attended the boot camp in August 2009 and handles foreclosure cases. Some are paid by clients, many of whom have cash even though they are in default because they aren’t making mortgage payments, she said.

There are also opportunities to negotiate uncovered fees in settlements with creditors. If a bankruptcy court judge rules that a mortgage firm has submitted false evidence, the court can order the creditor to pay legal fees, Golant said.

Borrowers who can’t afford attorneys sometimes turn to legal-services organizations such as Jacksonville Area Legal Aid in Florida, where boot-camp graduate April Charney has worked since 2004 -- the year she met Gardner. They met at a conference of consumer lawyers in Minneapolis, and Gardner later offered her a scholarship to attend training.

Document Disagreement

While Charney considers Gardner a mentor, she said she disagrees with his assertion that servicers likely produced false affidavits and other documents because of the time and expense involved in pulling the originals from custodians. Charney, who also trains lawyers how to defend clients’ homes, said the mortgage firms simply don’t have the documents.

Most foreclosures go unchallenged because homeowners rarely hire attorneys. That began to change as judges began questioning whether banks were producing sufficient proof that they had standing to foreclose. Gardner advocates using mortgage firms’ faulty evidence as leverage to secure affordable loan modifications for clients and have creditors cover all attorney fees.

Forcing banks to write down loans could push losses to taxpayers and investors in mortgage-backed securities, said Patrick Randolph, a University of Missouri-Kansas City law school professor who has consulted for mortgage firms defending class-action predatory lending claims. The paperwork flaws will ultimately be repaired and foreclosures will go forward because the vast majority of borrowers fighting seizures are in default, Randolph said.

Mountain Lions

“Max is definitely very influential,” Randolph said. “He claims to have neat solutions to lots of problems facing foreclosure opponents. Whether they are long-term solutions or taking advantage of confusion in the court system is hard to know.”

Gardner, a North Carolina native, has lived out of state only two years as an adult, when he worked as an armed guard and assistant vault teller for a bank in Anchorage, Alaska. He lives on the sprawling farm in Casar, where he, Virginia and their domesticated animals contend with wild coyotes, black bears and mountain lions. Virginia breeds Cavalier King Charles spaniels, and they have seven Great Pyrenees, two bloodhounds, a fox hound, two donkeys and five horses.

Gardner received his undergraduate degree from the University of North Carolina at Chapel Hill and graduated with high honors from its law school in 1974, before opening his practice three years later in his grandfather’s 19th-century home in downtown Shelby, which is 20 miles south of the farm. He switched from general practitioner to fulltime bankruptcy attorney in 1986.

Sherlock Holmes Costume

Gardner, who is pictured as a pipe-smoking Sherlock Holmes on a poster plastered on a wall at the boot camp, said he discovered that loan servicers were employing document-execution teams to sign affidavits and other paperwork needed in cases against homeowners after reading internal newsletters produced by a subsidiary of Fidelity National Information Services Inc.

Fidelity National spun off its Lender Processing Services division into a separate public company in July 2008. The Jacksonville, Florida-based company, the biggest U.S. mortgage- and-foreclosure outsourcing firm, was subpoenaed Oct. 13 by Florida Attorney General Bill McCollum, who says the company produced numerous documents in foreclosure cases that appear to be fabricated.

Mass Production

The September 2006 issue of the newsletter removed any doubt for Gardner that signatures were being penned with factory-like efficiency that “would either make Henry Ford proud or scare the hell out of him,” he said.

The 18-member “Document Execution team is set up like a production line, ensuring that each document request is resolved within 24 hours,” the newsletter reads. “On average, the team will execute 1,000 documents per day.”

Michelle Kersch, a spokeswoman for the firm, said the company decided the affidavit-execution services were “not an appropriate use of resources,” and ended them in September 2008. Lender Processing Services still “signs a limited number of documents for clients,” including assignments of mortgage, she said.

Gardner shows boot campers signatures on mortgage documents by bank vice presidents or assistant secretaries, and photographs from newsletters showing that they actually worked for Lender Processing Services.

66 Tips

The materials supplied to students on thumb-size data- storage units include “Max Gardner’s Top Road Signs of Bogus Mortgage Documents,” a list that has been updated and expanded since it first appeared in the boot-camp materials in January 2006, he said. The last of the 66 tips for spotting irregularities is if the document is signed by any of 295 people, who he lists by name.

The roster includes Jeffrey Stephan, a GMAC Mortgage employee whose depositions in December 2009 and June 2010 brought the issue of robo-signers to the public’s attention. The latest batch of boot campers included Thomas Cox, a Maine attorney, one of two lawyers who deposed Stephan.

“What the grand scheme is here is not what I’m teaching because honestly I don’t know,” Gardner said. “What I want them to understand is what happened and how it happened and how they can identify the improper unlawful documents and what they can do with them.”

www.bloomberg.com/news/2010-10-27/foreclosure-woodstock-lures-lawyers-to-max-s-farm-seeking-edge-on-lenders.html

[sandi66]

Wall Street Proprietary Trading Under Cover: Michael Lewis

Oct 26, 2010 9:00 PM ET

A few weeks ago we asked a simple question: Why are the same Wall Street banks that lobbied so hard to dilute the passages in the Dodd-Frank financial overhaul bill banning proprietary trading now jettisoning their proprietary trading groups, without so much as a whimper?

The law directs regulators to study the prop trading ban for another 15 months before deciding how to enforce it: why is Wall Street caving now?

The many answers offered by Wall Street insiders in response boil down to a simple sentence: The banks have no intention of ceasing their prop trading. They are merely disguising the activity, by giving it some other name.

A former employee of JPMorgan, for instance, wrote to say that the unit he recently worked for, called the Chief Investment Office, advertised itself largely as a hedging operation but was in fact making massive bets with JPMorgan’s capital. And it would of course continue to do so. JPMorgan didn’t respond to a request for comment.

The fullest explanation came from a former Lehman Brothers corporate bond salesman named Robert Wosnitzer, who is now at New York University, writing a dissertation on the history of proprietary trading. He’s been interviewing Wall Street bond traders, he said, and they have been surprisingly open about their intentions to exploit one obvious loophole in the new law.

The innocent eye might have trouble spotting this loophole. The Dodd-Frank bill bans proprietary trading (Page 245: “Unless otherwise provided in this section, a banking entity shall not engage in proprietary trading”) and then appears to make it clear what that means (Page 565: “The term ‘proprietary trading’ means the act of a (big Wall Street bank) investing as a principal in securities, commodities, derivatives, hedge funds, private equity firms, or such other financial products or entities as the comptroller general may determine”).

Invitation for Abuse

The big invitation for abuse, Wosnitzer says, lies in the phrase “as a principal.” It falls to the comptroller general - - or, more specifically, the General Accountability Office, which is overseen by the comptroller general -- to determine precisely what the phrase means.

And, at the moment, the GAO pretty clearly hasn’t the first clue. (“We’re really too early in the process to speak to how we might define it,” said spokeswoman Orice Williams Brown.)

Never mind: Wall Street is busily defining the term for itself.

Make an Argument

“One trader I interviewed,” Wosnitzer says, “said that from here on out, if he wants to take a proprietary position in a credit, he will argue that he bought the position because a customer wanted to sell the position, and he was providing liquidity; and in order to keep the trade on, he would merely offer the bonds 10 basis points higher than the offered side, so that he will in effect never get lifted out of the position, while being able to say that he is offering the bonds for sale to clients, but no one wants ‘em. When the trade finally gets to where he wants it -- i.e., either realizing full profit, or slaughtered by losses -- he will then sell it on the bid side, and move on.

Of course, there is all sorts of flawed logic here, but the point is that...there are a hundred different ways to claim to be acting as an agent or for a customer.’’

This ambiguity is no doubt one reason the financial reform bill passed in the first place. Even its clearest prohibitions are couched in language inviting Wall Street to evade them.

But the new game of cat and mouse raises a simple, even naive question: Why do these giant Wall Street firms want so badly to make huge bets with their shareholders’ capital?

Save Us

After all, the point of the ban on proprietary trading is as much to save the banks from themselves as to save us from them. We have just come through a period where putatively shrewd individual bond traders lost not millions but billions of dollars for their firms, by making really stupid bets.

Even before the crisis there was never any reason to think that traders at big Wall Street firms had any special ability to gamble in the financial markets. Anyone with a talent for investing is unlikely to waste it on Morgan Stanley or Bank of America; he’ll use it for himself, or for some hedge fund, which allows him to keep more of his returns.

And if this were true before the financial crisis it is even more true after it, when trading inside a big Wall Street bank will be less pleasant and more fraught with politics.

Yet Wall Street’s biggest firms apparently still badly want their traders to be allowed to roll the bones. Why?

What They Do

One answer -- which Wosnitzer points to -- is that this is what Wall Street firms now mainly do. Beginning in the mid- 1980s, the Wall Street investment bank, seeing less and less profit in the mere servicing of customers, ceased to organize itself around its customers’ needs, and began to build itself around its own big and often abstruse gambles.

The outsized gains (and losses), the huge individual paychecks, the growing ability of traders to bounce from firm to firm from one year to the next, the tolerance for complexity that doubles as opacity: all of the signature traits of modern Wall Street follows from the willingness of the big firms to allow small groups of traders to make giant bets with shareholders’ capital, which the shareholders themselves don’t and can’t understand.

The new way of life began at Salomon Brothers in the early 1980s, right after it turned itself from a partnership into a publicly traded corporation; but it soon spread to the others.

‘‘That was the particular moment when a new culture of finance crystallizes,” Wosnitzer says. “And it restructures all of finance. All of a sudden it’s ‘I made X, pay me X minus Y or, screw you, I’m leaving.’”

Keep It Simple

There’s a simple, straightforward way for the GAO to construe the Dodd-Frank language, and it would reform Wall Street in a single stroke: to ban any sort of position-taking at the giant publicly owned banks. To say, simply: You are no longer allowed to make bets in the same stocks and bonds that you are selling to investors.

If that means that Goldman Sachs is no longer allowed to make markets in corporate bonds, so be it. You can be Charles Schwab, and advise investors; or you can be Citadel, and run trading positions. But if you are Citadel you will be privately owned. And if you blow up your firm, you will blow up yourself in the bargain.

www.bloomberg.com/news/2010-10-27/wall-street-proprietary-trading-under-cover-commentary-by-michael-lewis.html

[sandi66]

Ex-Argentina President Kirchner Dies of Heart Attack

Oct 27, 2010 10:18 AM ET

Former Argentina President Nestor Kirchner, who helped his country recover from default and devaluation before handing power to his wife in 2007, died of a heart attack. He was 60.

Kirchner was rushed to the hospital this morning in the company of President Cristina Fernandez de Kirchner after falling ill at their home in the Patagonian town of El Calafate, the president’s website said. He died before 10 a.m. local time, state news agency Telam reported.

The former president was hospitalized twice this year with heart problems. Last month, he had an stent implanted after doctors found one of his coronary arteries was blocked. In February, he had surgery to clear a blockage in his carotid artery.

Kirchner’s death is likely to produce an outpouring of support for the current president and could boost her chances of holding onto power in October 2011 elections, said Guillermo Mondino, an analyst in New York with Barclays Plc.

While Kirchner was seen as the “strongman” behind his wife’s rule, “economic decisions in the near future are unlikely to be much affected,” Mondino wrote in an e-mailed note to clients.

Markets may rally as the former president was seen as an obstacle to negotiations with the International Monetary Fund, according to Mondino, who is a former Argentine secretary of economic policy.

Kirchner took office in 2003, in the wake of Argentina’s default on $95 billion in bonds and a devaluation that forced his elected predecessor, Fernando de la Rua, to resign amid widespread protests. Economic growth averaged 8.8 percent a year during Kirchner’s term.

Kirchner, a father of two and former lawyer, was currently a congressman representing Buenos Aires province and served as the head of the Union of South American Nations, known as Unasur. He previously served as Governor of Santa Cruz state.

www.bloomberg.com/news/2010-10-27/ex-argentine-president-nestor-kirchner-dies-after-heart-attack-c5n-says.html

[sandi66]

`Every Man for Himself' as Emerging Markets Curb Currency Gains

Oct 27, 2010 10:35 AM ET

Finance chiefs from South Korea to South Africa signaled they may act to slow gains in their currencies, just four days after the Group of 20 vowed to soothe trade tensions in the $4 trillion-a-day foreign-exchange market.

Asian currencies fell to a one-week low after Bank of Korea Governor Kim Choong Soo said today that measures to mitigate capital flows could be “useful.” Hours later, the rand dropped as South African Finance Minister Pravin Gordhan said his government will use part of higher-than-expected tax revenue to build foreign reserves as it attempts to weaken the currency.

The shifts suggest G-20 members will keep trying to defend their economies from the slide of the dollar and capital inflows even after the group promised Oct. 23 to refrain from “competitive devaluation” and to increasingly embrace market- determined currencies.

“The G-20 made a vague pledge not to manipulate currencies much, but there was no mechanism to ensure that each country will keep taking unilateral measures,” said Win Thin, global head of emerging markets strategy at Brown Brothers Harriman & Co. in New York. “It’s every man for himself.”

China’s yuan declined by the most in 22 months after the central bank set the weakest reference rate for the currency since September. Bank Indonesia will “guard” the rupiah at its “fundamental” level of 8,900 to 9,300 against the dollar and buy foreign currencies to limit volatility, Governor Darmin Nasution said today. Bank Negara Malaysia Governor Zeti Akhtar Aziz told Bloomberg Television yesterday she favors a gradual strengthening of the ringgit.

No ‘Teeth’

“Although what came out of the G-20 meeting was better than expected, it didn’t really have any teeth in it,” said Kieran Curtis, a fund manager who helps oversee about $2 billion in emerging market debt at Aviva Investors in London. “There was still no framework laid out to deal with countries following an ultra-competitive exchange-rate policy.”

The concern of emerging market officials is that failure to counter gains in their currencies will mean exports are choked, removing a source of economic strength. Their exchange rates have risen as investors bet the Federal Reserve will next week introduce more so-called quantitative easing, a policy move which has hurt the dollar.

More currency measures may be on the way. President Juan Manuel Santos has said Colombia may take additional steps this week to ease the peso’s rally and Chilean President Sebastian Pinera said Oct. 25 that his government plans to increase foreign investment limits for institutions.

‘Keeping an Eye’

Having already removed a 15 percent tax exemption for foreigners on income from domestic bonds, Thailand Finance Minister Korn Chatikavanij warned on Oct. 25 that regulators are “keeping an eye” on speculative inflows.

Such decisions may make it harder for G-20 leaders to prove their words carry weight when they convene in Seoul on Nov. 11- 12, said Beat Siegenthaler, a currency strategist in Zurich at UBS AG, the world’s second biggest foreign-exchange trader.

“The agreements reached so far don’t mean much in practice,” he said. “From the point of view of these countries, as long as the big countries are undertaking QE measures and looking out for themselves they don’t feel any obligation not to act too.”



www.bloomberg.com/news/2010-10-27/-every-man-for-himself-as-emerging-markets-curb-currency-gains-after-g-20.html

[sandi66]

Singapore Exchange's Bocker Faces Revolt Over ASX Takeover
By Jonathan Burgos - Oct 27, 2010 4:53 AM ET

Magnus Bocker, who stitched together eight European stock exchanges and sold them in a bidding war, is running into a wall with shareholders and politicians over his plan to acquire Australia’s main bourse.

Singapore Exchange Ltd. posted its worst two-day drop in two years after Chief Executive Officer Bocker unveiled an $8 billion takeover of ASX Ltd. this week. Australian Green party leader Bob Brown said he won’t support the bid and Tokyo Stock Exchange Group Inc., with a 5 percent stake in its Singapore rival, warned it will be saddled with losses.

For the 49-year-old marathoner, winning in Asia may prove harder than in Europe, where he combined companies from Lithuania to Iceland to create the region’s fifth-largest exchange. JPMorgan Chase & Co., Credit Suisse Group AG and Deutsche Bank AG cut ratings on Singapore Exchange yesterday, citing regulation, debt and ASX’s growth outlook.

“There are doubts that the transaction will push through,” said Pearlyn Wong, an investment analyst in Singapore at Bank Julius Baer, which manages about $262 billion in client assets worldwide. “SGX is paying a steep premium for ASX and it’s highly questionable if the synergies from this acquisition will materialize.”

Cross-Border Merger

Less than a year after becoming chief executive officer of Singapore Exchange, Bocker unveiled the first cross-border merger of bourses in the Asia-Pacific region, a plan that would create the world’s fifth-largest market operator by share value. The offer was 41.8 percent higher than ASX’s prior closing price, compared with an average of 21 percent for financial companies worldwide in the past year, Bloomberg data show.

The Singapore Exchange’s 11 directors, including the CEO, declined to comment or couldn’t be reached. The combination will result in a more balanced portfolio of listed companies, Bocker said on Oct. 25 in Sydney.

“The world of exchanges is rapidly changing,” Bocker said. “This will make us a stronger player.”

His record on mergers will be tested as he works to overcome regulatory hurdles and investor skepticism. Atsushi Saito, the president of the Tokyo Exchange, criticized the plan. The bourse said in June 2007 that it paid 37.4 billion yen ($457 million) for 4.99 percent of Singapore Exchange.

“It’s not a good story,”Saito told reporters. “Our shareholdings will be diluted, with our stake falling to around 3.1 percent. It’s possible we’ll have a loss of hundreds of millions of yen.”

‘National Interest’

ASX shares jumped 19 percent on Oct. 25 but have since fallen 11 percent in the past two days, as political opposition to deal in Australia mounted. Singapore Exchange rose 1.3 percent today, following a two-day, 8.6 percent slump.

Australian Treasurer Wayne Swan said today he will apply a so-called national interest test to the proposal. The Greens’ Brown said yesterday that the deal shouldn’t go through, citing concern that the “national interest” will be hurt, while independent Australian lawmaker Bob Katter called the plan “lunacy.”

“While Bocker has a lot of experience in cross-border deals in Europe and the U.S., this deal will have difficulty getting through because the Australian political landscape has changed,” said Jamie Coutts, sales manager at BGC Partners in Singapore. “Bocker will have to do a lot more marketing and convincing.”

Bocker, a father of three who collects 1920s glassware, started at OMX when the Swedish company was so small he worked behind a curtain stretched across a larger room.

Quick Turnaround

“He stuck his nose out from behind that cloth and asked very alert questions,” Olof Stenhammar, founder of OMX, said in a 2008 interview. “He is a very rapid thinker, quick to act, extremely decisive.”

Bocker became CEO of OMX in 2003 when the company was losing money, data compiled by Bloomberg show. He exited unprofitable units, sold trading software to exchanges from Helsinki to Singapore and acquired Nordic and Baltic bourses for a total of more than $700 million. Net income increased after 2004, while the stock climbed fivefold while he was CEO.

In May 2007, Nasdaq offered to buy OMX for $3.7 billion in a deal backed by the Swedish company’s board. Borse Dubai made a hostile bid for OMX three months later that was 14 percent higher. Bocker helped broker a compromise in which the Dubai exchange gave up OMX in return for a stake in Nasdaq. Dubai also bought part of Nasdaq’s holding in the London Stock Exchange.

Track Record

“Bocker certainly brings his track record in cementing merger deals,” Coutts said. “The core of every deal is personalities. If the two CEOs have a long-standing relationship, then it obviously enhances the potential for a positive outcome.”

Robert Elstone, the CEO of ASX who has known Bocker for more than a decade, said the Singapore Exchange head has one of the most “successful track records” among exchange CEOs.

Acquisitions often fail to boost value for owners. Shares of more than half the companies that made the biggest purchases in the last mergers-and-acquisitions boom from 2005 to 2008 lagged behind industry peers for two years, according to data compiled by Bloomberg’s ranking group. NYSE shares have tumbled 55 percent since March 2006 as it snapped up companies from Euronext to American Stock Exchange and Archipelago Holdings Inc.

Nasdaq shares lost half their value in 2008 as profit tumbled 39 percent after losses on a currency hedge for its European operations wiped out gains from increased trading. The stock slid 20 percent in 2009 as net income declined 15 percent, according to data compiled by Bloomberg.

Faster Trading

JPMorgan reduced SGX to “neutral” from “overweight,” citing the vulnerability of its share price, regulatory issues related to the bid, and the higher indebtedness that would result. Credit Suisse cut its rating to “underperform” from “outperform,” saying ASX’s growth prospects make it unappealing. Deutsche Bank analyst Andrew Hill lowered his rating on the stock to “hold” from “buy.”

Since Bocker took over at the Singapore bourse from Hsieh Fu Hua last year, he has taken steps to enhance trading, including introducing 19 American depositary receipts of Chinese companies and announcing a S$250 million order processor that may be the world’s fastest when it goes live in 2011.

“He’s shown himself to be very capable and competent at these consolidations, but Asia’s a different environment and I’m sure the skills needed will be different from what was required in Scandinavia,” said Bruce Weber, who specializes in electronic trading and exchanges at the London Business School. “In Asia, his diplomatic skills will be a lot more important.”



www.bloomberg.com/news/2010-10-26/singapore-exchange-chief-bocker-facing-revolt-over-takeover-in-australia.html

[sandi66]

Brokers Flee Brokerages as Declining Assets Show Broken Model
By Seth Lubove - Oct 26, 2010 12:00 AM ET

After Morgan Stanley took control of Smith Barney in May 2009 from Citigroup Inc., David Hopkins grew disillusioned with his new bosses.

Hopkins, 50, says he had built a roster of about 150 clients with $38 million in assets in nine years as a stock broker at Smith Barney in Southern California. After the acquisition, the New York-based bank imposed new maintenance fees on Smith Barney accounts and stripped away some of the autonomy of its brokers -- moves that Hopkins says were hurting his relationships with investors.

In March, Hopkins got a call from a headhunter who urged him to join a small advisory firm that works with TD Ameritrade Holding Corp., a discount brokerage. Although it meant Hopkins would have to return a retention bonus from Morgan Stanley worth a year’s earnings, he decided to depart for Beacon Pointe Advisors LLC in Newport Beach, California, Bloomberg Markets magazine reports in its December issue.

“Smith Barney had a very hands-off environment, like you knew what was best for your clients,” Hopkins says. “With Morgan Stanley, it just became an unfriendly place. Smith Barney is dying a slow death. It’s all about Morgan Stanley.”

More than 7,300 brokers have left the four biggest full- service brokerages -- Morgan Stanley Smith Barney, Merrill Lynch, Wells Fargo Advisors and UBS Wealth Management Americas -- from the beginning of 2009 through June, according to financial services research firm Aite Group LLC in Boston and company filings.

Losing Assets

Some brokers have fled internal clashes from mergers during the financial crisis: Bank of America Corp. rescued Merrill Lynch four months before the Smith Barney deal. Others have been recruited by discounters such as Charles Schwab Corp. to join their networks of independent firms.

The big banks, which count on their brokerages to generate a steady stream of fees, are losing assets as well as brokers. Assets under management at the four top brokerages dropped 16 percent to $4.75 trillion from 2007 through 2009, Aite Group says. During the same period, assets jumped almost 14 percent to $1.54 trillion at independent firms.

“It’s hurting the big brokerages,” says Alois Pirker, an Aite Group research director. “They have lost assets, advisers and clients.”

Morgan Stanley says the loss of brokers and assets has been inconsequential. Spokesman Jim Wiggins says the bank is sorry to see employees depart who are frustrated by a lack of success at Morgan Stanley, which doesn’t compete on price for clients with low-cost brokerages.

No Conflicts

“Our business model is not for everyone,” he says. “We’re geared to those advisers and clients who can best benefit from the breadth and resources of a leading global investment bank.”

While lacking the clout of big brokerages, independent firms boast of one advantage with clients: no conflicts of interest. Brokers at Merrill Lynch, for instance, are pressured to sell funds managed or approved by the firm because they pay a higher commission than those run by other companies, says Paul De Rosa, who worked at the brokerage for 26 years before co- founding his own firm, Gateway Advisory LLC, in Westfield, New Jersey, in January.

De Rosa set up Gateway Advisory as a registered investment adviser, which has a fiduciary duty to put its clients’ financial interest first when giving advice, according to U.S. Securities and Exchange Commission rules. RIA firms must also disclose conflicts. To avoid them, RIAs like Gateway typically shun commissions and charge a flat fee of less than 1 percent of assets under management regardless of the funds they recommend.

Discounter Recruiting

“Our clients know that when we make a recommendation, we’re not getting compensated for that recommendation,” says De Rosa, 61, whose firm manages more than $250 million.

Lyle LaMothe, who oversees Merrill Lynch’s U.S. wealth management unit, says brokers don’t push particular investments that pay more than others. The firm leaves it to the customer to decide whether to purchase a product sold on commission, or pay a fee for investment advice.

“That we have both methods is testimony to the fact that we are independent,” LaMothe says.

Charles Schwab and TD Ameritrade are capitalizing on the flight of brokers. The discounters are providing independent firms with a host of fee-based services, from recruiting advisers to supplying clients and trading and custodial assistance. Omaha, Nebraska-based TD Ameritrade announced in July that its recruiters helped bring 212 advisers from big brokerages to independent firms in the first seven months of 2010, a 44 percent increase over the same period a year earlier.

Most Profitable

Schwab’s unit that offers services to independent advisers and other institutional businesses is the most profitable part of the company. San Francisco-based Schwab has about 6,000 independent advisers in its network.

“There has been a bit of a pack mentality with advisers,” says Bernie Clark, head of Schwab Advisor Services. “When people started coming out and fostering growth in this industry, others saw it was possible and followed them.”

Independent firms depend on their partnerships with Schwab and TD Ameritrade to succeed. Dorie Rosenband says she quit Smith Barney last year because she grew tired of its high- pressure sales culture and preferred to use her training as a certified financial planner to give advice. So she started a business in New York and Baltimore in 2009.

Trudge to Bathroom

Schwab helped Rosenband, 37, find office space and legal advisers and then hooked her up with Raylor Investments LLC, a Greenwich, Connecticut, consulting firm that screens investments for her clients. In exchange, Rosenband pays Schwab a fee for safekeeping her investors’ money, executing trades and other transactions.

“You cannot underestimate the magnitude of setting up a new business,” says Rosenband, whose firm oversees $50 million. “You’re leaving a turnkey environment where you don’t even realize what’s being done for you.”

Beacon Pointe, which manages $4 billion in assets, owes much of its recent expansion to TD Ameritrade. Beacon Pointe’s 30 employees work in a ground-floor office decorated with undistinguished paintings by anonymous artists. To get to a bathroom, advisers have to either trudge down to the basement or take an elevator to the fourth floor. Beacon Pointe and TD Ameritrade formed an alliance in 2007: Beacon pays a fee for client trades through TD Ameritrade, and the discount brokerage funnels customers looking for advice to the small firm.

Returning Advisers

This year, the number of TD Ameritrade referrals is soaring, comprising 25 percent of Beacon’s new clients through October. And Beacon is planning on acquiring an independent adviser with $120 million in assets in Scottsdale, Arizona, a first step in an expansion to get more business from TD Ameritrade branches across the country, says Matthew Cooper, Beacon’s managing director.

Hopkins, the Beacon Pointe adviser, works a region between Orange County and Santa Barbara, talking with TD Ameritrade branch workers to find customers who need advice.

“They went to Ameritrade and thought they could do a self- directed approach but don’t have the time or talent to do it,” Hopkins says. “So Ameritrade recommends us.”

Some advisers return to the comforts of big brokerages after struggling to survive on their own. James Stoker II left Smith Barney in 2004 and co-founded a firm with six of his brokerage colleagues. He wanted the freedom to place clients in more-exotic investments such as hedge funds. But Stoker had little time to develop those strategies. Because his firm in Austin, Texas, could only afford an additional handful of people for investment management and research, he spent most of his time on day-to-day duties, such as flying to meet fund executives and plowing through their documents.

Madoff Scrutiny

After the Bernard Madoff fraud scandal in 2008, investors demanded that Stoker’s small staff increase the scrutiny of its investments. During a meeting in early 2009, an institutional client asked how Stoker could verify that outside auditors of managers were doing their job.

“We couldn’t answer that question other than to say we couldn’t do that,” Stoker says. “We were just too thin. We came back from the meeting and said we have to re-affiliate with Morgan Stanley.”

Stoker, 54, wound down his company in May and took six of his people back to Smith Barney. Now, at the brokerage’s Graystone Consulting unit, which advises institutional investors, Stoker says he can tap into a small army of hundreds of research analysts who handle much of the groundwork of evaluating money managers.

Fiduciary Standard

“A lot of the big independents don’t have 200-some people in research and sophisticated risk systems,” Stoker says. “Independents can’t outspend Morgan Stanley in these markets.”

Major brokerages and independent firms are also tussling over regulation. The SEC will send a report on protecting investors to Congress in January before possibly issuing new rules as part of the Dodd-Frank Wall Street reform act signed into law in July.

Registered investment advisers are urging the SEC to adopt the tough fiduciary standard under the Investment Advisers Act of 1940 that governs their profession. If advisers receive additional payments for recommending a particular fund over another, they must fully disclose the arrangement and obtain informed consent from investors every time they sell such a product, says Falls Church, Virginia-based Knut Rostad, chairman of the Committee for the Fiduciary Standard, a group of financial professionals. Advisers must also manage conflicts by, for instance, crediting that additional payment to their client’s account rather than accepting it themselves, Rostad says.

Potential Payoff

The Securities Industry and Financial Markets Association, a lobbying and trade group based in New York, says the stringent fiduciary rules of the 1940 act are unnecessary to safeguard investors and would restrict their options. SIFMA does support the idea of more disclosure.

“We believe in a robust disclosure regime where the client can make the decision to consent to conflicts,” says Andrew DeSouza, a SIFMA spokesman.

No matter what the SEC does, for Hopkins, there’s no going back to a big brokerage. He likes the potential payoff of being an entrepreneur.

“I’m working 10 times as hard, but the opportunity is 100 times greater,” he says on his cell phone, slogging through Los Angeles traffic -- hoping to find clients who value his independence as much as he does.



www.bloomberg.com/news/2010-10-26/brokers-flee-brokerages-as-declining-assets-show-broken-model.html

[sandi66]

Paycheck Anxiety Hits U.S. as Tax-Debate Delay Risks Raising Withholding
Paychecks may shrink if Congress doesn't move quickly to extend Bush tax cuts


October 27, 2010, 9:59AM EST



(To see examples of changes in withholding taxes for different income levels, click here.)

(Bloomberg) — Employers in the U.S. are starting to warn their workers to prepare for slimmer paychecks if Congress fails to vote on an extension of Bush-era tax cuts.

"I've been doing payroll for probably close to 30 years now, and never have we seen something like this where it gets that down to the wire," said Dennis Danilewicz, who manages payroll services for about 14,000 employees at New York University's Langone Medical Center. "That's what's got a lot of people nervous. All we can do is start preparing communications with a couple of different scenarios."

Lawmakers won't start debating whether to extend the cuts, which expire Dec. 31, until after the Nov. 2 elections. Because it takes weeks to prepare withholding schedules, the Internal Revenue Service will probably have to assume the cuts will expire and direct employers to increase payroll deductions starting Jan. 1, experts say.

"We're kind of stuck between a rock and a hard place," said Ron Moser, head of human resources for the school district of Kenmore-Town of Tonawanda, New York, which pays about 1,900 teachers, custodians and aides each month. In upstate New York, where winter heating costs are among the highest in the country, many school employees earn between $20,000 and $40,000 a year, he said, and losing $50 in a paycheck is "a significant dollar amount."

Employees Calls

"We're starting to get the calls" from employees asking what they need to do for the next tax year, Moser said.

President Barack Obama and most Democrats want tax cuts extended for middle-income earners and to end for the wealthiest Americans, the top 2 or 3 percent of earners. Republicans want tax cuts extended for everyone, arguing that an increase makes little sense as the economy recovers from the worst recession since the 1930s. Tax cuts went into effect in 2001 and 2003.

For Moser, the challenge of the moment is keeping people in the Buffalo suburb, home to about 78,000 residents, calm about what will happen in January. The area has several manufacturing employers — including 3M Co., General Motors Co. and Praxair Inc. — and unemployment is 7.6 percent, lower than the national rate of 9.6 percent. Still, many people are worried, he said.

"The bulk of our employees don't understand" the coming tax debate in Congress, Moser said. "When they see this type of thing happening they go into panic mode. They don't follow what's going on."

June 2001 Rates

If Congress fails to act, income tax rates will revert to higher levels dating from June 2001.

For a married couple with an income of $80,000, that would drain an extra $221.48 in withholding from a semi-monthly paycheck, according to calculations by the Tax Institute at H&R Block. Married individuals earning $240,000 a year would lose an additional $557.78 to withholding in a single semi-monthly paycheck. The Tax Institute at H&R Block calculated federal tax rates for single-income earners and married taxpayers without children.

Paychecks could shrink in January and into February, depending on how long it takes Congress to act.

January could well be a time of "sticker shock" for salaried employees and their employers, said Kathy Pickering, executive director of the Tax Institute, an independent research division at Kansas City, Missouri-based H&R Block Inc.

"If the laws get passed late in December, it's just necessarily going to take one to three weeks to get those payroll tables updated and implemented into the system," Pickering said.

Blow to Spending

Allowing the tax cuts to expire, even temporarily, would deal a blow to disposable income and could curtail the consumer spending that accounts for about 70 percent of the economy, said Alec Phillips, a Washington-based economist at Goldman Sachs Group Inc.

"The longer the expiration lasts, the more significant the impact will be," he said.



Economists raised estimates for consumer spending in the third quarter to 2 percent from 1.9 percent, according to the median forecast on a Bloomberg News survey this month. Spending rose at a 2.2 percent pace in the second quarter. The Commerce Department will release third-quarter data on Oct. 29.

Making a withholding-rate change could take longer for small businesses that don't outsource payroll services, experts said. If a business can't react fast enough, employees could recoup any over-withholding by filing a new W-4 tax form to temporarily lower their federal withholding rate.

Another option is to wait until 2012 when workers file their tax returns for the previous year.

Taxpayer Strategy

Taxpayers could use the same strategies if Congress reinstates the tax cuts next year and they need to recoup the extra withholding.

Jodi Parsons, manager of payroll and accounts payable at IFMC, a health care management company based in West Des Moines, Iowa, said if the IRS issues two sets of withholding tables, her two-person office could be overwhelmed with processing changes to W-4 forms.

"We'd have to basically go back and hand calculate checks for all 800-900 employees to determine whether or not we need to deduct additional taxes from them or refund taxes," Parsons said. "We'd like to see changes in mid-November just to make sure we have time."

There are now six federal tax brackets, ranging from 10 percent to 35 percent. If Congress doesn't act, there will be five rates with the top bracket reaching 39.6 percent.

Nov. 20 notice

Last year, the IRS alerted payroll departments on Nov. 20 about the 2010 tax tables, said Scott Mezistrano, senior manager of government relations at the American Payroll Association in Washington. He said a delay in guidance from the IRS could increase costs for some small businesses.

The Treasury Department last week issued a statement that it was "maintaining flexibility" with regards to the release of the withholding tables for 2011.

If the IRS issues tables in mid-November and then again later, businesses will double their programming costs, Mezistrano said. A related concern, he said, is if Congress makes a last-minute decision to extend the cuts and companies aren't able to implement the change before January.

Business owners may face "tons of angry employees pounding at my office door saying, 'What have you done to my paycheck?'" Mezistrano said.



www.businessweek.com/bwdaily/dnflash/content/oct2010/db20101027_025647.htm

[sandi66]

Pentagon, Marine Museum Shootings Linked
Same gun was used in both cases, ballistics reveals
By Kevin Spak, Newser Staff

Posted Oct 27, 2010 9:55 AM CDT

Ballistic tests have conclusively shown that the same weapon fired on both the Pentagon and National Museum of the Marine Corps, the FBI announced yesterday. Officials suspect a third shooting at a Marine Corps recruiting office this week may be related as well. “I don't think at this point in time we are prepared to say this is a serial of any kind,” a spokesman told the Washington Post. “But the targets are all blatantly military.”
Both the Pentagon and the museum are within range of a busy interstate. The buildings are roughly 30 miles apart. Both shootings occurred either late at night or early in the morning, when the buildings were either unoccupied or close to it. For that reason, police say they view the shootings mostly as vandalism. “But it is a cause for concern that someone would be doing this.”



www.newser.com/story/103892/pentagon-marine-museum-shootings-linked.html