Thursday, February 18, 2010

McAlvany Weekly Commentary, Feb 17, 2010

Is the Euro Terminal? An Interview with Ambrose Evans-Pritchard

February 17th, 2010

About the Guest:

Ambrose Evans-Pritchard has covered world politics and economics for a quarter century, based in Europe, the US, and Latin America. He joined the Telegraph in 1991, serving as Washington correspondent and later Europe correspondent in Brussels. He is now International Business Editor in London. Click here to read more

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Buffett's Berkshire Cuts Oil Stake, Adds Wells Fargo

Billionaire Warren Buffett's company reduced its holdings in Johnson & Johnson, Proctor & Gamble, ConocoPhillips and Exxon Mobil Corp. during the last three months of 2009, according to documents filed Tuesday.

Berkshire Hathaway Inc. disclosed those moves and several other changes to its roughly $58 billion U.S. stock portfolio in documents filed with the Securities and Exchange Commission. The filing offers a snapshot of the Omaha-based company's holdings as of Dec. 31.

Berkshire added to its stakes in Iron Mountain Inc., Becton Dickinson & Co., Republic Services Inc. and Wells Fargo.

But the filing also said Berkshire has received permission from the SEC to omit some information to protect its trading strategy, so the document offers an incomplete picture. (more)

"Economic Terrorism": The Consequences are Poverty and Mass Unemployment

“The American oligarchy spares no pains in promoting the belief that it does not exist, but the success of its disappearing act depends on equally strenuous efforts on the part of an American public anxious to believe in egalitarian fictions and unwilling to see what is hidden in plain sight.” — Michael Lind, To Have and to Have Not

Yes, of course, we all have very strong differences of opinion on many issues.

However, like our Founding Fathers before us, we must put aside our differences and unite to fight a common enemy. It has now become evident to a critical mass that the Republican and Democratic parties, along with all three branches of our government, have been bought off by a well-organized Economic Elite who are tactically destroying our way of life. The harsh truth is that 99% of the US population no longer has political representation. The US economy, government and tax system is now blatantly rigged against us. (more)

Greek Ex-Minister: Other Euro Countries Did Swaps Too

Greece's 2001 deal to swap some of its debt using currency derivatives was in line with what other euro-zone countries were doing, Yiannos Papantoniou, the country's finance and economy minister when the deal was made, told Wednesday.

The transaction, intermediated by Goldman Sachs, involved exchanging about 2.8 billion euros ($3.8 billion) worth of bonds denominated in yen and US dollars — that would have generated substantial outflows in 2002 — into euros, maturing in 2019, Papantoniou explained.

The Parthenon in Greece
Scott E. Barbour | Getty Images

"We took a loan that was to be repaid in 2019," he said in a telephone interview. "It was public. I know that what we've done then was consistent with what was done by many euro zone countries." (more)

The Richest 1% Have Captured America's Wealth -- What's It Going to Take to Get It Back?

"The war against working people should be understood to be a real war.... Specifically in the U.S., which happens to have a highly class-conscious business class.... And they have long seen themselves as fighting a bitter class war, except they don't want anybody else to know about it." -- Noam Chomsky

As a record amount of U.S. citizens are struggling to get by, many of the largest corporations are experiencing record-breaking profits, and CEOs are receiving record-breaking bonuses. How could this be happening, how did we get to this point?

The Economic Elite have escalated their attack on U.S. workers over the past few years; however, this attack began to build intensity in the 1970s. In 1970, CEOs made $25 for every $1 the average worker made. Due to technological advancements, production and profit levels exploded from 1970 - 2000. With the lion's share of increased profits going to the CEO's, this pay ratio dramatically rose to $90 for CEOs to $1 for the average worker. (more)

Peter Schiff, Currency crisis imminent

New COMEX Rule: Another Reason to Fear ETFs

Regardless of their expensive annual fees, frequent tracking errors, and the simple fact that you'll never be able to actually touch the gold or silver your ETF claims to hold, there are several more reasons ETFs should never be used by precious metals investors. An important rule change by COMEX, the American commodity exchange, allows ETF substitutes for precious metal delivery.

Paper as Metal

To address a temporary problem of liquidity, COMEX has systematically created an even bigger problem for investors. The exchange allows investors to make good on their futures positions with gold and silver ETFs rather than the real assets, thus opening up the door for hugely distorted market prices. (more)