Jay's Daily News

I've always admired Singapore. There's a country that's got it's you-know-what together.

Singapore Expects ‘Good’ Growth After Record Quarter

http://www.bloomberg.com/apps/news?p...TRBan1qo&pos=4

Rep. Anthony Weiner (D-N.Y.) missed a golden opportunity to make an innuendo about teabags here.

If you're an enthusiast of the tea party movement, I hope you're being kissed first.

"I follow Twitter for the Tea Party and just show up to f@#k with them"

http://thehill.com/blogs/twitter-roo...to-f-with-them

However, I do agree with Weiner's statement about Joe Lieberman

Fla. governor dodges question on political future

TALLAHASSEE, Fla. (AP) - Florida Gov. Charlie Crist says he's too busy doing his job to worry about his political future, even though he's in the midst of a tough campaign for a U.S. Senate seat

It's a tough campaign alright! His opponent is the anticrist!

http://www.breitbart.com/article.php...show_article=1

There's one guy to know. Bring out the 45 gallon drum of K.Y. Jelly! Soros or Soreass, we'll find out soon enough.

Markets could be derailed again, warns Soros

http://blogs.reuters.com/fundshub/20...n-warns-soros/

Fed survey: Recovery is spreading; jobs still weak

http://apnews.myway.com/article/20100414/D9F3088O3.html

I don't know if Addison Wiggin was trying to be funny here with the commodity he's recommended. But commodities sure seems like a winner. Whatever is good enough for Jim Rogers is good enough for me.

Dollar Decline Spurs A Bullish Turn For Commodities

http://dailyreckoning.com/dollar-dec...r-commodities/

Poop in a group?

Why Are Silver Sales Soaring?

April 14, 2010 – 9:01 am http://www.gravatar.com/avatar.php?g...images/pix.gif
Jeff Clark, Senior Editor, Casey’s Gold & Resource Report


The U.S. Mint just reported another record, but this time it wasn’t for gold. The Mint sold more Silver Eagles in March and in the first quarter of the year than ever before. A total of 9,023,500 American Silver Eagles were purchased in Q110, the highest amount since the coin debuted in 1986.

While this is certainly bullish, there’s something potentially more potent developing in the background. Namely, how this matches up with U.S. silver production. Like gold, the U.S. Mint only manufactures Eagles from domestic production. And U.S. mine production for silver is about 40 million ounces. In other words, we just reached the point where virtually all U.S. silver production is going toward the manufacturing of Silver Eagles.

Yikes.

This is especially explosive when you consider that roughly 40% of all silver is used for industrial applications, 30% for jewelry, 20% for photography and other uses, and only 5% or so for coins and medals.

To be sure, mine production is not the only source of silver. In 2009, approximately 52.9 million ounces were recovered from various sources of scrap. Further, the U.S. imported a net of about 112.5 million ounces last year. (Dependence on foreign oil? How about dependence on foreign silver!) So it’s not like there’s a worry there won’t be enough silver to produce the Eagle you want next month.

Still, why so much buying? The silver price ended the quarter up 15.5% from its February 4 low – but it was basically flat for the quarter, up a measly 1.9%. We tend to see buyers clamoring for product when the price takes off, so the jump in demand wasn’t due to screaming headlines about soaring prices.

I have a theory. For some time, silver has been known as the “poor man’s gold.” Meaning, silver demand tends to increase when gold gets too “expensive.” The gold price has stubbornly stayed above $1,000 for over six months now and spent much of that time above $1,100. You’d be lucky to pay less than $1,200 right now for a one-ounce coin (after premiums), an amount most workers can’t pluck out of their back pocket. But Joe Sixpack just might grab a “twelve-pack” of silver.

What would perhaps lend evidence to my theory is if gold sales were down in the face of these higher silver sales.

The U.S. Mint reported a decline in gold bullion sales of 20.8% this past quarter vs. the same quarter in 2009. Further, other world mints have seen sharp declines in gold bullion coin sales as well: the Austrian Mint reported an 80% drop in sales for the first two months of the year and the Royal British Mint a 50% decline in gold coin production for the first quarter.

What’s even more dramatic is the difference in the dollar value of the sales. Gold Eagle sales in the U.S. dropped $10,263,500 from a year earlier – but silver sales increased by $61,855,290. So, not only did silver sales make up the drop in gold sales, they exceeded them by $51,591,790.

Is the rush into “poor man’s gold” underway?

Why the answer to that question is significant is that a shift toward silver for this reason could signal we’re inching closer to the greater masses getting involved in the precious metals arena. And that – for those of us who’ve been invested for awhile now – would be music to the ears. Because when they start getting involved, the mania will be underway, and from that point forward, it’s game on.

I’m not saying the mania is starting, and I actually think we could see another sell-off before things take off for good. Gold could dip to $1,000 and maybe even $950, with silver going to the $14-$15 range. But as clues like these begin to build up, we’ll know we’re getting closer. (And any drop to those ranges would clearly be a major buying opportunity.)

Everyone talks about gold, myself included, but a meaningful portion of one’s precious metals portfolio should be devoted to silver. The market is tiny, making the price potentially explosive. Remember that in the ‘70s bull market gold advanced over 700%, but silver soared over 1,400%.

Don’t be a “poor man” by ignoring gold’s shiny cousin.

Goldman Is Charged With Subprime Fraud



By JOE BEL BRUNO, FAWN JOHNSON And JOSEPH CHECKLER

The Securities and Exchange Commission on Friday charged Goldman Sachs Group Inc. with defrauding investors, alleging that Goldman let a big hedge fund fill a financial product with risky subprime mortgages and then failed to disclose that to the product's buyers.

The SEC said in the civil complaint that Goldman and Fabrice Tourre, then vice president, created and sold opaque collateralized-debt obligations, or CDOs, that hinged on the performance of subprime-mortgage-backed securities. The complaint charges that Goldman promoted these securities to customers while failing to disclose that a major hedge-fund client had a role in picking the securities and was betting against them.

Goldman Sachs, which in a statement called the accusations "completely unfounded in law and fact," could face steep fines and be on the hook to repay nearly $1 billion of investor losses. The charges mark the first action regulators have taken against a Wall Street firm for betting on the housing market's collapse, and represents another blow to an investment bank under attack for how it handled the financial crisis.

The hedge fund, Paulson &Co., paid Goldman $15 million to create the CDO in early 2007, when the U.S. housing market and related securities were beginning to show signs of distress, the SEC complaint said.


http://si.wsj.net/public/resources/i...0416104959.jpg
Reuters The new Goldman Sachs Group headquarters in New York's lower Manhattan.

According to the SEC, Goldman Sachs failed to disclose that Paulson played a significant role in selecting the CDO's portfolio, but the firm then bet against it by entering into a credit-default-swap transaction with Goldman to buy protection on certain layers.

As a result of that bet, Paulson made about $1 billion, SEC said.
"Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio, while telling other investors that the securities were selected by an independent, objective third party," said Robert Khuzami, Director of the SEC's Division of Enforcement.

Shares of Goldman plunged 11% in early-afternoon trading.
The complaint didn't name Paulson because the firm didn't make any disclosures to investors, said Mr. Khuzami. Most complaints coming out of the SEC involve improper disclosures. Paulson didn't respond to a request for comment.

The SEC also said in the complaint that Mr. Tourre, who presently works in London as executive director of Goldman Sachs International, was "principally responsible" for creating the CDO.

An attorney representing Mr. Tourre wasn't immediately available for comment. Mt. Tourre couldn't be reached by telephone or email for comment.
He started at Goldman in 2001, working at the brokerage's mortgage and structured-credit trading business. Previous to that, he obtained a master's degree in operations research at Stanford University after earning a bachelor's degree in mathematics at French university Ecole Centrale Paris, according to his LinkedIn profile.

In an email about the pending doom of the CDO market, Mr. Tourre told a friend: "The whole building is about to collapse anytime now...Only potential survivor, the fabulous Fab(rice Tourre)...standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstruosities(SIC)!!!!"

The SEC alleges that Goldman and Mr. Tourre knew it would be tough to sell the synthetic CDO if it was known that Paulson, who was heavily betting against the securities, had picked much of the collateral that went into the CDO. So Goldman called ACA Management LLC, a New York-based company that analyzes credit risk in such products, and asked it to serve as "portfolio selection agent."

After a meeting with Goldman and Paulson, ACA was confused about Paulson's objectives, the complaint said. Someone from ACA emailed a Goldman representative saying "it didn't help that we didn't know exactly how they (Paulson) want to participate in the space," the SEC complaint says.
A later ACA e-mail said, "For us to put our name on something, we have to be sure it enhances our reputation."

Eventually, ACA agreed to become the portfolio-selection agent, and a written memorandum identifies Paulson as a hedge-fund equity investor that would buy a tranche of the CDO. The SEC complaint says Mr. Tourre "knew, or was reckless in not knowing," that ACA had been misled into thinking Paulson was investing on the long side.


Graphic: See an example of how a mortgage CDO is made.
—Mark Wenner


ACA didn't immediately respond to requests for comment.

The Goldman complaint is part of the SEC's investigation into investment banks and others that securitize complex financial products tied to the U.S. housing market as it was beginning to show signs of distress, according to Kenneth Lench, Chief of the SEC's Structured and New Products Unit.
"It's safe to assume that we're looking at a wide range of products and transactions arising out of the credit crisis," Mr. Khuzami told reporters during a conference call about the case.

In February, the SEC settled with State Street Corp. on charges that the bank misled investors about its exposure to subprime mortgages. In that case, the SEC said the bank selectively disclosed information about its subprime mortgage investments to specific investors.

The SEC also has brought charges against issuers and fund companies for how they treat mortgage-backed securities and then disclose them to investors.

The charges against Goldman reverberated on Capitol Hill, where lawmakers are weighing how to revamp the rules that govern Wall Street amid widespread public anger about bailouts for financial institutions.

"While its action was slow in coming, I applaud the SEC for finally beginning to deal with the illegal behavior of major Wall Street firms which, in my view, knowingly sold junk products and as a result helped cause the worst recession since the 1930s," said Sen. Bernie Sanders (I., Vt.).

The SEC case increases pressure on the Justice Department, which has been investigating many of the same Wall Street firms to look for possible criminal wrongdoing at the root of the financial crisis.

At a Wednesday hearing before the Senate Judiciary Committee, Sen. John Cornyn (R., Texas) asked Attorney General Eric Holder whether there were any "show trials" coming up. "We simply haven't had the people who were guilty of criminal conduct brought to justice," Mr. Cornyn said. Mr. Holder replied that the cases are hard to put together but he said he expected more cases.

— Kara Scannell and Evan Perez contributed to this article.

http://www.globalfxradio.com/indexmainplayer.html

Wrap of the days events...

Proof that news organizations lie. After all, there is a recovery isn't there?

California jobless rate swells to 12.6 percent

http://www.breitbart.com/article.php...show_article=1

Jobless rate unexpectedly soars. Yes, if you're a f@#king moron!

Factories shine, job market weakness lingers

http://finance.yahoo.com/news/Factor...86255.html?x=0

Know someone with beachfront property selling for $30,000? Call me.

Foreclosure rates surge, biggest jump in 5 years

http://finance.yahoo.com/news/Factor...86255.html?x=0

Straight from the "I think it's about f@#king time" files.

Stocks tumble as Goldman charged with civil fraud

http://www.breitbart.com/article.php...show_article=1

Geithner Predicts Republican Support for Overhaul

http://www.bloomberg.com/apps/news?p...MjoNBU3Q&pos=5

I got an idea for Goldnut Sachs, securitize future lawsuits. Then go long on your collateralized lawsuit obligations.

And when you do this, I WANT MY COMMISSION!

Goldman Sachs Said to Have Been Warned of SEC Suit

http://www.bloomberg.com/apps/news?p...BUru4.hM&pos=6

Heard the one about the Frenchman and the Chinese man who walked into an exchange?

It's not a joke...

Citic, Credit Agricole Said to Near Accord on Brokerage Venture

http://www.bloomberg.com/apps/news?p...8g6AcqiU&pos=4

Monica Lewinsky wasn't the only one being screwed in the oval office!

Clinton Says He Got Wrong Advice on Derivatives

http://www.bloomberg.com/apps/news?p...01cNkLMA&pos=5

Goldman Sachs May Face U.K., German Probes After Suit

http://www.bloomberg.com/apps/news?p...d=aQUeUoTH.BmI

Going After Goldman: A Crackdown on Financial Crime or a Kabuki Play Maneuvre to Avoid Bringing Criminal Charges

by Danny Schechter
April 19, 2010

Fox Business News was engrossed in interviewing a blonder than thou reality TV bimbo when the news that the Securities And Exchange Commission was filing fraud charges against Goldman Sachs broke on Friday afternoon.

The breaking news bulletins were already flying through cyberspace before the Fox Means Business network got around to moving from a snickering interview with a starlet confessing to commodifying and monetizing her appeal to the biggest story in months on the Street beat. Corporate fraud allegations seem to make free market boosters nervous.

At last, the mightiest of investment bank, described as a “giant squid on the face of humanity” by Matt Taibbi in a much-read diatribe, appeared to be in deep trouble. Taibbi himself was not convinced that the Government has the goods on Goldman.

He commented, “…What’s interesting is that I heard whiffs of this story going back as far as a year and you know I’m one of the harshest critics of Goldman Sachs and I actually backed off the story because I didn’t really believe it. I thought it was too outlandish. So that tells you exactly how crazy this story is coming out now.”

The Timing

The timing of the story was suspicious, he said. “This story has been out there for awhile. The [NEW YORK] Times first broke it really in December. So why are they doing this now? Cleary it could have been because this bill is about to hit, crucial period in Washington, this financial regulatory reform bill, maybe this, you can look at this as a shot across Wall St’s bow during that period.”

Federal prosecutions of white-collar criminals has not been a growth industry, or very successful, in recent years.

AP predicts there will be a flood of lawsuits to come and that “the fraud charges against Goldman Sachs & Co. that rocked financial markets Friday are no slam dunk, as hazy evidence and strategic pitfalls could easily trip up government lawyers”. A former dot.com millionaire told me that Goldman has the best lawyers and would most likely beat the rap. Publicly Goldman denied all charges and vowed to restore their “reputation.

The Republicans who know about how to politicize everything were quick to point out that Goldman and its employees had been among President Obama’s biggest backers. At the same time, Politico reported out that taking on Goldman gives the White House a big propaganda asset in the coming fight over financial reform.

“Charges of fraud against one of the most storied firms on Wall Street come at a time when the Obama administration is seeking to pass significant new regulation of the financial sector. A reform bill is expected to hit the Senate floor next week, and observers said Friday that the Goldman charges would likely give new momentum to the administration’s efforts to put tougher regulations on the banking sector.”

The Legal Issue

The Volatility website, explains, “The case centers on Goldman’s 2007 ABACUS CDO, which it manufactured at the behest of hedge fund predator John Paulson. The scam was for Paulson to cobble together a toxic mess of MBS he expected would blow up, find suckers to buy this CDO, and then short it. Goldman’s role was to launder the CDO …

(Barry Ritholz compares it to The Producers, who try to defraud their investors by putting on a crappy play they expect to quickly close while embezzling much of the loot.)

Typical of this feckless government, it’s only a civil and not a criminal indictment. Even if the SEC is serious this time (which I won’t assume until I see it), Goldman would still get off easy for capital fraud.”

It now turns out that Goldman was notified in advance about the government’s complaint. Business Week revealed. “Sources now say that Goldman Sachs was warned about a pending civil suit months ago and failed to disclose its legal problems—despite the standard practice of revealing legal issues like regulatory probes in quarterly and annual reports. Websites like Ml-Implode insisted, “Other Major Banks Did Deals Similar to Goldman.”

Financial journalist Gary Weiss disagrees, suggesting that, if successful, this could bring the firm down. “This is devastating. The Wall Street Journal says "Goldman Sachs, which in a statement called the accusations 'completely unfounded in law and fact,' could face steep fines and be on the hook to repay nearly $1 billion of investor losses." MIT’s Simon Johnson calls the SEC’s action a “Pecora Moment,“ invoking the memory of FDR’s long gone investigation of depression-era corporate larceny.

Is This Complaint More Bread and Circuses?

I am not so sure. Could this all be a well-orchestrated Kabuki play intended for public consumption and political advantage. Could Goldman even be playing along here to buy time for reforms even as they have taken losses? Financial Analyst Tyler Durden thinks so, arguing, “This has many wondering if the whole SEC action against Goldman (which some have already pointed out is a rather weak case) is nothing but smoke and mirrors to distract the broader public for a few weeks until anger once again dies down.”

Beating down this high profile suit would restore the firm’s credibility, and leave enough time to pass some financial reforms before it even goes to Court where it could be thrown out. Hedge fund mastermind John Paulson was not even named in the charges which is a civil complain, not a criminal charge,

One of my angry readers, despite writing in All Caps and misspelling Tim Geithner’s name, smells a rat, “

“THE CRIME IS STILL GOING ON DANNY. HUNDREDS OF TRILLIONS OF DOLLARS IN DERIVATIVE POSITIONS ARE STILL BEING CREATED BY WALL STREET GANGSTERS AND RECENTLY DURING A CONGRESSIONAL SUB COMMITTEE HEARING ENCOURAGED BY WILLIAM GITNER AND BARNIE FRANK. THE OBAMA ADMINISTRATION SUPPORTS THE USE OF DERIVATIVES SO ONE OF THE MAIN CULPRITS IN THE DESTRUCTION OF THE SUBPRIME HOUSING MARKET IS ALIVE AND WELL THANKS TO THE OBAMA ADMINISTRATION AND HIS STOOGES LIKE GITNER, BARNIE FRANK AND MANY OTHER SOCIALIST MARXIST CONGRESSMAN DEMOCRATS AND REPUBLICANS. THE OBAMA ADMINISTRATION IS A PUPPET OF THE WALL STREET GANGSTERS.”

Was It A Crime--Or Should It be?

This may become the Tea Party view. A deeper question is: is this civil suit a substitute for or a maneuver to avoid bringing criminal charges? There are even progressive writers like James Kwak of Baseline Scenario.com who doesn’t believe crimes have been committed.

“One of the things I say now and then that most annoys people is that the financial crisis was not caused by criminal behavior. (Note: The “Prayer for the Relief” at the end of the complaint only asks for civil penalties, but I suppose this does not preclude a criminal action — someone who’s a real lawyer could answer that.) My general line is that I’m sure there was some bad behavior that rose to the level of criminal liability — like lying in disclosure documents — but that it wasn’t necessary for the crisis, and we could have had the crisis without any criminal activity at all.”

The problem with this thinking is that it defines financial crime very narrowly, and in terms of securities laws that exist only to protect investors. It forgets that the most harshly abused victims of the crisis occurred on the consumer side of the equation in the rip off of citizens as workers and homeowners.

In my film www.plunderthecrimeofourtime.com I report on a finding in Massachusetts that Goldman deliberately designed thousands of mortgages to fail. They settled, paying the state $60 million without admitting guilt.

Those who argue these abuses were legal rarely admit that the financial institutions spent nearly a billion dollars to erode regulations and change rules. They used their ill-gotten gains to buy up ‘politricians’ who passed one-sided and unjust laws to allow them to get away with whatever benefited their bottom lines no matter who was hurt.

This well-documented history of political manipulation qualifies them as avaricious manipulators, not law biding companies. Their legal and moral defense is bogus. The Congress and the Courts have been "captured" by Wall Street for years.

Unjust Laws?

Why won’t the financial media cop to this blatant immorality as they treat “the law” as sacrosanct? Would they have recognized lynching and racism as legal because Deep South legislatures passed laws allowing segregation? How are the laws bought by Wall Street any different?

The housing bubble was built on bedrock of deception and fraud linking shady subprime brokers and appraisers to a whole industry that structured financial products and then resold them with misrepresented values with the complicity of unethical ratings agencies.

The FBI has been denouncing, investigating and indicting those what they call a “fraud epidemic.” The selling and reselling of worthless asset-backed securities is a centerpiece of the larger crime, as was the practice of overleveraging these schemes, insuring and even betting against them by companies like AIG with swaps, CDO’s etc. etc.

We are not talking about a handful of executives like the 25 people Time Magazine listed as responsible for the crisis. We are dealing with a criminal enterprise of tens of thousands who benefited.

Martin Wolf of the Financial Times explained that three industries came together with thousands of employees to run the FIRE economy—Finance, Insurance and Real Estate. Their infrastructure was big, ““In between the ultimate borrowers and the risk takers were loan originators, designers and packagers of securitized assts, ratings agencies, sales staff, managers of banks and SIVs (structured investment vehicles) and managers of pension and other funds”

They all worked together like a cabal to perpetuate what I call the crime of our time.

Will these people ever face justice?