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Here is a thought provoking video about the stimulus package, Congress, the Constitution and many other topics.

I disagree with some of it, especially mandatory service. If the founders wanted mandatory service or English as the national language, they would have put it in the Constitution. Require a bunch of 18 year olds to join the military and you are begging for another war or more police actions. The US simply cannot afford to be the world’s policeman.

The video also left out a discussion of money and gold that would have been interesting. However, most of what was said about Congress and spending rings a big bell.

Millions of people have played this video, and it is a good topic for discussion this 4th of July weekend.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Mike “Mish” Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Half a million poverty-hit pensioners could be put back on a firm financial footing simply by taking up the state benefits they are eligible for, a leading charity has claimed. Age Concern and Help the Aged says older people are turning down £5.4bn-worth of extra cash that is rightfully theirs. The money is made up of means-tested benefits and allowances that pensioners fail to claim.

For most people the idea of making money as a day trader sounds like something out of a movie. Buying stocks and turning around and immediately, reselling them seems foolish and usually can be quite difficult. If you simply believe that you will be able to walk right in and make a huge profit you [...]

If you have some experience with the day trading, already you know just how upsetting it can be to purchase a stock for a great deal only to have it plummet in value just a short time later. For many, this means looking towards some protective measures to ensure that their account is not suddenly [...]

Investors came off the Canada Day holiday in a selling mood as profit taking dominated the resource sector during Thursday trading on the Canadian Markets. For the tale of the tape, the TSX Exchange was down 1.24%, while the TSX Gold Index rebounded 0.9% and the TSX Venture Exchange, Canada’s largest junior exploration bourse, added a modest 0.06% with the decliners edging out the advancers by a 400 to 316 margin on a weak 118 million shares traded.
Consolidation in the junior exploration sector continued with Canadian Gold Hunter looking to take over African-focused Sanu Resources. Under the offer, Canadian Gold Hunter will issue 0.5725 of its shares for every Sanu share. At the end of the day, Canadian Gold Hunter will…

The base metals were mostly lower on Thursday. Copper sank from the pre-dawn hours to mid-morning, bottoming at $2.24, but rallied back from there to finish at $2.2754/lb., down more than 3½ cents. 

Nickel had a pair of jagged ups and downs to mid-morning, but blazed higher from there, closing just off its intraday highs at $7.4382/lb., up 13 cents. Zinc was also choppy, ending little changed at $0.6994/lb., down a half-cent. Aluminum was weak, dropping more than a penny, to $0.7267/lb., while lead also sagged, shedding more than a penny and three-quarters, to $0.7626/lb.

Copper led all the industrial metals but nickel downward yesterday, as traders heeded the strengthening dollar and were spooked by bad economic data from both the U.S.…

In the energy market on Wednesday, crude for August delivery fell again, closing at $66.73/barrel, down $2.58. August reformulated gasoline lost 6.82 cents, to $1.7908/gallon.
Oil posted its third straight weekly loss as the lousy economic numbers piling up have driven much of the recovery optimism from the field.

The jobs report “is confirming what we saw earlier in the week with the dropping consumer confidence,” said Phil Flynn, of PFG BEST Research. “This reinforces the outlook for weak petroleum demand and should put downward pressure crude prices.”

Flynn added that, “On the fundamentals level, high levels of inventories, low demand and sufficient supply continue to point to lower prices.”

The only bright note was sounded by the Commerce Department, which reported orders…

NEW Unemployment figures Show We’re Still Lingering in Depression.

This week began with shrieks of joy. First, a federal court came down on Bernie Madoff like a brick on a bald head. Madoff, convicted of lying to investors, drew a sentence that only a sea turtle or a swamp oak could complete. Then, like children playing in the sea, investors were teased by one wave of good news… and tickled by the next.

Bloomberg reported that “Wall Street’s largest bond-trading firms say the worst may be over for investors… ” Then, General Electric’s CEO, Jeffrey Immelt and famous investor George Soros both said that the crisis is “behind us” and that growth will begin again next year. Finally, analyst John Dorfman opined…

While politicians, talking heads, and bloggers blab about the causes of the mortgage crisis, Stan Liebowitz of the University of Texas lays out why they’re all dead wrong in today’s Wall Street Journal.

Rather than subprime or lair loans being the culprits, Mr. Liebowitz illustrates that zero equity lead to the mortgage meltdown.

The evidence from a huge national database containing millions of individual loans strongly suggests that the single most important factor is whether the homeowner has negative equity in a house — that is, the balance of the mortgage is greater than the value of the house. This means that most government policies being discussed to remedy woes in the housing market are misdirected.

Many policy makers and ordinary people…

Taibbi goes on air and talks about Goldman article [video] BNN

New evidence on the foreclosure crisis WSJ

Michael Lewis on Wall Street reckoning day Wall St and Tech

Rich Harvard, poor Harvard Vanity Fair

Rogue broker blamed for oil spike FT

Banks own the US government Guardian

Banks’ bogus bonuses The Big Money

NYSE halts transparency ZeroHedge

Britain’s Queen may run out of money by 2012 CNBC

Our globe trotting politicians NYT

“A review of travel and financial records showed that Gov. Mark Sanford did not spend public money improperly when he visited his mistress”, the chief of the South Carolina Law Enforcement Division, Reginald Lloyd, said this afternoon.

Thank goodness Governor Sanford’s fornicating was fiscally lawful!

But it shows you that there are hardly any limits to the perks, fringe benefits, and global sex romps that can be had on the taxpayer’s dime by our elected officials…

From the Wall Street Journal:

Spending by lawmakers on taxpayer-financed trips abroad has risen sharply in recent years, a Wall Street Journal analysis of travel records shows, involving everything from war-zone visits to trips to exotic spots such as the Galápagos Islands.

The spending on overseas travel is up…

In the currency market, the dollar climbed higher against the euro. Late Thursday, the euro was trading at $1.4027 vs. $1.4156 on Wednesday.
The day’s data was about as bad as it could be. Primary was the Labor Department’s report on nonfarm payrolls, which showed the loss of 467,000 jobs in June. That was in line with ADP figures from Wednesday, and far above the 325,000 contraction predicted by economists.

The unemployment rate edged up to 9.5% from 9.4% in May, not quite as bad as the 9.6% expected. All told, the data “strongly suggest that consensus forecast for a second half recovery is overly optimistic,” said Steve Ricchiuto, chief economist at Mizuho Securities in New York.

Some analysts tried to pretty…

Gold was flat until just before the London open on Thursday, then commenced a long, slow slide that continued until the noon hour in New York, with a bottom at $926 before some uninspired late day buying pushed it to a finish at $928.80/oz., down $11.50. For the week, gold lost 1%.
Platinum tightly rangebound all day, bouncing between $1180 and $1190, finally coming to rest at $1183/oz., down $16. For the week, platinum dropped 1.2%.

Silver was virtually unchanged two hours into London trading, but fell off into the first hour in New York, briefly dipping below $13.30 before inching back over it and going flat as a pancake the rest of the day to close at $13.35/oz., down 35…

World stocks fell today, Friday, after a disappointing U.S. jobs report and a sluggish euro zone services sector survey reinforced expectations that the process of recovery in the global economy would be long and slow.

U.S. employers cut far more jobs than expected last month and the unemployment rate hit 9.5 percent, the highest in nearly 26 years.

While analysts caution that jobs data is a lagging indicator and unemployment can still rise when the economy is turning around, it was enough to prompt investors to reduce their risk assets especially before a long weekend in the United States.

Furthermore, signs of a recovery in the euro zone’s dominant service sector took a backwards step in June with the final services purchasing manager…

Inquiring minds are reading S.E.C. May Reinstate Rules for Short-Selling Stocks.

They have been reviled as the bad hats of Wall Street, nefarious traders who cashed in on the market collapse and, some insist, helped precipitate it.

Now short-sellers, the market skeptics who correctly called last year’s downturn, are coming under even more unwanted scrutiny, this time from federal regulators. The Securities and Exchange Commission appears poised to reverse itself and reinstate rules that would make shorting stocks — that is, betting their prices will decline — somewhat more difficult.

Many banks, whose stocks came under attack last autumn, maintain that unfettered short-selling is dangerous. The shorts, their argument goes, helped bring down Bear Stearns and Lehman Brothers last year.

Mary L. Schapiro, chairwoman of the S.E.C., has said that considering new rules restricting short-selling is a priority.

For the moment, the most likely outcome may be for the S.E.C. to reinstate a rule that the commission itself abolished with a unanimous vote in 2007, under its previous chairman, Christopher S. Cox. Known as the uptick rule, it would bar investors from shorting a stock until its price ticks at least a penny above its previous trading price.

To some, the issue is clear-cut. The American Bankers Association, a trade group representing the vast majority of American banks — whose equity values have been especially battered in the last 18 months — recently submitted an opinion in favor of reinstating the short-sale restrictions.

Sally Miller, a spokesman for the A.B.A., said the member banks thought there was a clear link between the market turmoil and the rule change.

The American Bankers Association Group of Idiots

What brought down the banks was excessive leverage (40-1 or greater at Bear Stearns and Lehman), excessive dependence on real estate investments (both residential mortgages and commercial real estate), lax lending standards, off balance sheet investments ($1 Trillion at Citigroup alone), and a host of other piss poor discretions.

If the American Bankers Association wants to place the blame on who is responsible for this mess they ought to look straight in the mirror and blame themselves.

Moreover, Sally Miller is obviously a complete dunce as to how stock markets work. sally says there is a “clear link between the market turmoil and the rule change”. Hello Sally, correlation does not imply causation.

The rooster crows at the crack of dawn every day and the sun comes up. The sun does not comes up because the rooster crows, no matter what the ABA says.

Citigroup’s Ridiculous Short Selling Claim

Flashback November 20, 2008: Citigroup Blames Short Sellers For Collapse.

Inquiring minds are looking at Citigroup Statistics as of October 28, 2008.

Citigroup is blaming shorts when the short interest is under 3%. That’s ridiculous. If Citigroup does not understand this, it is a sign of incompetence. If Citigroup does understand how ridiculous their claim looks (and is), that is additional support for the desperation thesis.

Note the dividend. Citigroup is paying a dividend when it is clearly in need of capital . Is that a sign of arrogance or incompetence? That Citigroup is in this mess in the first place is clearly sign of incompetence somewhere, at some point in time. Current management will attempt to place that blame on Chuck Price, but the culture of greed, arrogance, and excessive risk taking, permeated the entire financial industry.

Looking ahead, foreclosures, credit card defaults, and bankruptcies are going to soar along with a soaring unemployment rate. Banks in general, and citigroup specifically, are woefully undercapitalized and unprepared for what is about to happen. One look at a chart of Citigroup should be proof enough.

The market seems to believe Citigroup is insolvent and so do I.

Citigroup The Bank That Gets Nothing Right

While on the subject of Citigroup, and Citigroup whiners, I offer Listen to Citigroup Analysts at Your Own Peril.

Who Are The Short Sellers?

Inquiring minds are asking, who is doing the bulk of short selling?

It’s a good question, too. And I have an answer: The market makers like Goldman Sachs, Citigroup, and Merrill Lynch.

Yes, the whiners complaining about short selling are doing the bulk of it! For every buyer there is a seller, and when markets are screaming higher, the market makers are frequently shorting as a pure function of what they do. Moreover, when people buy PUTs, the market makers selling those options short stock as a hedge.

Not only are the market makers shorting, but these actions are where the bulk of naked shorting comes from.

By the way, the SEC initiated a huge short squeeze once before by restricting shorts on financials. Guess what happened when the short squeeze ended and Goldman Sachs, Citigroup, and the other market makers were the ones left holding the shorts? The market plunged is what.

Finally, there is no uptick rule for market makers. There never was. This is how ridiculous this nonsense about shorting is.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Mike “Mish” Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

The euro recovered against the dollar today, Friday, as traders picked up the single European currency following its fall the previous session, when weak U.S. jobs data helped lift the dollar across the board.

Some traders booked profits on the euro’s slide on Thursday, while analysts said currency movements were aggravated due to thin volumes as U.S. markets were closed for the Independence Day holiday.

On Thursday, data showed U.S. employers cut a greater-than-expected 467,000 jobs in June, leading to heightened risk aversion on the back of pessimism about the recovery of the U.S. economy.

The bleak data pressured the euro and currencies perceived to be higher risk such as the Australian and New Zealand dollars, but the single European currency found its…

Clearly the heatwave of the last few days has taken its toll on the new iPhone 3GS as many find it has been overheating - Apple is blaming the weather.

Medical care costs abroad are rising so making sure you have appropriate travel insurance is even more important.