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Friday 12.16.2011

Obama Concerned That Iran is on Verge
of Underground Nuclear Enrichment
By Indira A.R. Lakshmanan - Bloomberg.com
The Obama administration is concerned Iran is on the verge of enriching uranium at a facility deep underground near the Muslim holy city of Qom, a move that may strengthen those advocating tougher action to stop Iran’s suspected atomic weapons program.
Iranian nuclear scientists at the Fordo facility appear to be within weeks of producing 20 percent enriched uranium, according to Iran analysts and nuclear specialists in close communication with U.S. officials and atomic inspectors. Enriched uranium is used to fuel power plants and reactors, and may be further processed into atomic weapons material.

Lawmakers Agree on Spending Bill, Avoiding Shutdown
By JENNIFER STEINHAUER and ROBERT PEAR - NYTimes.com
WASHINGTON — Retreating from their harsh partisan sniping, and perhaps fearing public rebuke, Congressional leaders said Thursday that they had agreed on a large-scale spending measure to keep the government running for the next nine months.
But an accord on extending a payroll tax holiday due to expire at the end of the month remained elusive, with Democrats weighing a possible short-term extension, setting the stage for another fight with Republicans over how to pay for it.

BlueCrest’s Platt Says
European Banks Insolvent as Bass Sees Possible Run
By Jesse Westbrook and Saijel Kishan - Bloomberg.com
Michael Platt, founder of the $30 billion hedge fund BlueCrest Capital Management LLP, said most of the banks in Europe are insolvent and the situation will worsen in 2012 as the region’s debt crisis accelerates.
Kyle Bass, the Dallas-based hedge-fund manager who said in 2009 there would be sovereign defaults within three years, said Greek, Portuguese and Spanish depositors will withdraw money from banks in the coming months.

Ben's bazooka has a Euro hair-trigger...
Bernanke Signals Europe Risk
Keeps Fed Ready to Ease Further
BusinessWeek.com
Dec. 14 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke signaled he's concerned Europe's crisis will hobble a 2 1/2-year U.S. expansion that may need another boost from the central bank.
The Fed's policy-setting panel, which met in Washington yesterday, said the economy "has been expanding moderately," compared with the Nov. 2 assessment that growth "strengthened somewhat." At the same time, the central bank added a reference to "apparent slowing in global growth," and said that "strains in global financial markets continue to pose significant downside risks to the economic outlook."

IMF’s Lagarde: Europe Crisis 'Escalating'
By Nicole Gaouette - Bloomberg.com
The European debt crisis is growing to the point that it won’t be solved by one group of countries, Christine Lagarde, the managing director of the International Monetary Fund said today.
Lagarde said that if countries don't work together, the world will face a situation similar to the 1930s, before the world slid into World War II.
"There is no economy in the world, whether low-income countries, emerging markets, middle-income countries or super- advanced economies that will be immune to the crisis that we see not only unfolding, but escalating at a point where everybody would actually have to focus on what it can do," Lagarde said.

IMF chief warns over 1930s-style threats
By Hugh Carnegy in Paris, George Parker in London
and Peter Spiegel in Brussels - FT.com
The managing director of the International Monetary Fund has warned that the global economy faces the prospect of "economic retraction, rising protectionism, isolation and . . . what happened in the 30s [Depression]", as European tensions again flared over suggestions in Paris that the UK’s credit rating should be downgraded before France’s.
"There is no economy in the world, whether low-income countries, emerging markets, middle-income countries or super-advanced economies that will be immune to the crisis that we see not only unfolding but escalating," Christine Lagarde said in a speech at the US state department in Washington. "It is not a crisis that will be resolved by one group of countries taking action. It is going to be hopefully resolved by all countries, all regions, all categories of countries actually taking action.

Making Sense of the European Chaos
BY MONTY GUILD - FinancialSense.com
Developments in Europe have dominated the world’s economic headlines in recent days and have obscured some good news from China. In this week’s newsletter, we will cover the background of these important events and their meaning to global investors.
Making Sense Of The European Chaos
We have long believed that the European currency union will not survive in its current form and that some governments will never pay off their huge bond debts. Recent news about the European sovereign debt crisis has been negative and supports our bleak evaluation of the situation. However, reporters and commentators alike tend to miss the one critical point that is essential for the investing community: the banking system will be bailed out.

Dissolve the EU and let free market decide: Marc Faber
NEW YORK (Commodity Online): Marc Faber has said that it may be better to let the European Union countries to disintegrate after which the free market can reprice their worth. Marc Faber is the editor of the widely read The Gloom, Boom and Doom report.
"I think the best thing to do is dissolve the EU. Let the markets sort this out. Let the countries default.. It's going to be painful, very painful. But rather than to intervene into something that is not going to work in the long run … (intervention) is the wrong medicine", Fox Business quoted Marc Faber.

Bank of America
sees deeper eurozone crisis before ECB rescue
The European Central Bank will be forced to print money on a large scale but only after deep recession and months of drift have pushed the eurozone to the brink of disaster, Bank of America has warned.
By Ambrose Evans-Pritchard - Telegraph.co.uk
The final trigger is most likely to be a bad debt auctions in Rome, pushing yields beyond the pain threshold. Italy must raise €48bn (£40bn) in late February. But Greek elections in February are a minefield, and Spain's new government may reveal that the budget deficit is up to 1.5pc of GDP higher than planned. A blizzard of sovereign downgrades loom.
"The Eurozone is like sky-diving without a parachute. We think the ECB will provide a parachute in the end, but not until things get a lot worse," said Athanasios Vamvakidis, the bank's currency chief.

Talk of 'nuclear default' sums up Left's anger at EU dictates
Tempers are fraying in austerity-racked Portugal. A top socialist politician was taped at a party dinner calling for diplomatic warfare against the EU's northern powers and issuing threats of debt default.
By Ambrose Evans-Pritchard - Telegraph.co.uk
"We have an atomic bomb that we can use in the face of the Germans and the French: this atomic bomb is simply that we won't pay," said Pedro Nuno Santos, vice-president of the Socialist Party in the parliament.
"Debt is our only weapon and we must use it to impose better conditions, because recession itself is what is stopping us complying with the (EU-IMF Troika) accord. We should make the legs of the German bankers tremble," he said.

Fitch downgrades world's top banks
From Hussein Saddique, CNN
New York (CNN) -- The ratings firm Fitch downgraded a cluster of the world's largest banks Thursday, pointing to trading challenges facing international markets.
The banks included Bank of America, Morgan Stanley and Goldman Sachs, as well as Europe's Barclays, Societe Generale and BNP Paribas.
Germany's Deutsche Bank and Switerzland's Credit Suisse were also downgraded.
It was the third major credit rating agency to downgrade global financial institutions since September.

BofA, Goldman, Barclays Have Fitch Credit Ratings Cut
By Hugh Son - Bloomberg.com
Bank of America Corp. (BAC), Goldman Sachs Group Inc. (GS) andCitigroup Inc. (C) had their credit grades cut by Fitch Ratings as the impact of financial regulation and market turmoil (VIX) weighed on the industry.
The lenders’ long-term issuer default ratings were cut one level to A from A+, Fitch said yesterday in a statement. Barclays Plc (BARC), based in London, Credit Suisse Group AG (CSGN), Deutsche Bank AG (DBK) and BNP Paribas SA also had their grades lowered.

U.S. no longer a leader of fiscal rescue
Europe to get aid elsewhere
By Patrice Hill-The Washington Times
The U.S. has stayed uncharacteristically distant as European nations struggle with their long-running debt crisis, creating an opening for big emerging nations such as China and Brazil to move to center stage in world economic affairs.
U.S. leaders have steadfastly refused to contribute any funding to help debt-strapped European countries such as Greece and Italy, citing massive and unresolved debt problems of their own. But Brazil, Russiaand a few other emerging nations that are flush with cash are offering a helping hand.

BlackRock Says Euro Area
Headed for 'Full-Fledged' Recession Amid Cuts
By Sree Vidya Bhaktavatsalam - Bloomberg.com
BlackRock Inc. (BLK), the world’s biggest asset manager, said European nations including France and Germany are headed for a recession as the prolonged debt crisis has prompted companies to cut spending and stop hiring.
"We now believe that we're in for a full-fledged recession, including one in France and Germany, that could cut GDP by 1 percent to 2 percent," according to a note published today by New York-based BlackRock’s investment institute. "Short-term austerity measures could worsen the recession, defeating their very purpose of closing budget gaps."

Euro Set for Biggest Weekly Drop in 3 Months
By Monami Yui - Bloomberg.com
The euro headed for the steepest weekly decline in three months as European nations prepare for bill auctions next week amid concern policy makers are struggling to stem the region’s two-year debt crisis.
The 17-nation euro traded 0.5 percent from a 10-week low against the yen after European Central Bank President Mario Draghi said yesterday there’s no "external savior" for indebted countries that don’t implement structural reforms and the central bank’s program of buying government bonds isn't limitless. The dollar fell versus most of its major peers as data suggested the U.S. economy is gaining momentum and Asian stocks rose, easing demand for haven assets.

UK Public 'the Worst Off'
of the developed G7 Countries
With 4.5% Negative Interest Rates
JESSE'S CAFÉ AMÉRICAIN
Perhaps this is why the western Central Banks are so determined to prevent the price of gold from breaking out, and keep putting out disinformation from within a cloak of secrecy about their inflationary policies and money creation.
Negative real interest rates are very bullish for gold, and highly corrosive to the ordinary savings of those who lack the sophisticated financial instruments to otherwise protect themselves.

Yuan Strengthens Most
Since Dollar Peg Ended in July ’05 on Policy Outlook
By Kyoungwha Kim - Bloomberg.com
China’s yuan strengthened the most since a dollar peg ended in July 2005, supported by optimism policy makers will avoid a sharp slowdown in the world’s second- largest economy.
The currency gained 0.6 percent to 6.3351 per dollar as of 9:59 a.m. in Shanghai, according to China Foreign Exchange Trade System. The central bank raised its daily reference rate by 0.1 percent to 6.3352.

The ABCs of Re-hypothecation
in Gold and Securities Markets:
What You Need to Know
By Kevin Brekke, Casey Research - silver-prices.net
A new polysyllabic term has entered the Wall Street lexicon and is sweeping through the investing world like a brush fire through a dry canyon: "hypothecation." With its connection to the MF Global bankruptcy and aftermath, it engenders the kind of fear a homeowner might feel while monitoring the approaching flames.
The rise of hypothecation as the lead suspect in the MF Global tragedy has caused a fair bit of confusion about what, exactly, it is – and is not. Proving the idiom that nature abhors a vacuum, the blogosphere has weighed in with all manner of explanations, many of which have been less than accurate.

'Gold’s price fall reflect dollar, global economic outlook'
LONDON (Commodity Online): Some gold-watchers may be perplexed and disappointed that Gold hasn’t acted like a safe haven asset despite the current economic crisis, but Ross Norman, chief executive officer of Sharps Pixley, said "gold has other relationships - equally strong - which it upholds, in particular is the one with the US dollar."

Looking Past Gold’s Poor Performance
By Eric Fry - DailyReckoning.com
....Without a doubt, gold has delivered a disappointing performance of late. But even after yesterday’s shellacking, gold is still up 9% over the last 12 months, compared to a loss for the S&P 500 Index. Likewise, gold has greatly outpaced the S&P over the last one, three, five, ten and fifteen years! (The 20-year mark is a "dead heat.")
Bottom line, gold has performed its job with meritorious distinction. But of course, that’s history. The future is what most of us care about. And we’d care to know if gold’s future will look anything like its illustrious past.

Gold and Money in Extremis… One Man’s Story
By Richard Rabkin - DailyReckoning.com
12/15/11 The fascinating story of Marion Szablicki, as reported in Marc Faber’s Gloom, Boom and Doom Report
My economics education was started as a child by my grandfather, Marion Szablicki, who was a living testimonial to the value of gold. Notably, toward the end of his life at 99 years of age in 2010, he felt there was simply too much debt, and that a long downward spiral was underway with difficult times ahead. He had lived through times of "extremis" and his account of fiat money, war, gold and survival should serve as a reminder to all people that those who choose to ignore history’s lessons do so at their own risk.
On September 17, 1939, Russia invaded Poland, and over the next year over 1.7 million Poles were deported to labor camps or sent into exile into Kazakhstan and Siberia. Their only crimes at the time were being Polish citizens. None of the land or homes taken by the Russians was ever returned to these Poles after the war, despite their release from the Gulag in 1941 to fight with distinction under the British army. Per the 1943 Tehran Declaration, post WWII, Eastern Poland remained a part of Russia. Winston Churchill said of Poland in 1946, "We who went to war on her behalf…watch with sorrow the strange outcome of our endeavors."

'Silver still to hit $75/oz by 2012 year end'
The Gold Report: David, in August you predicted that the silver price could go as high as $75 an ounce (oz). It was recently at about $32/oz. Where is it along the path to $75/oz?
David Morgan: I don't see the silver price going above the $50/oz level in 2011. In other words, the top is in for this year, and has been for some time. I still believes silver price will go above $50/oz in 2012. I forecast $65–75/oz silver by the end of 2012. I don't foresee a big rush into price appreciation for gold or silver in the first quarter of 2012 (Q112), which is seasonal. Typically, there is a very strong boost to the price of metals in the first quarter of every year. However, this year I'm suspect because of what's going on in the Eurozone and all the paper pushing between the central banks of the world. I'm reserved about what's going to happen over the next three months.

Corzine: MF Staff Said Fund Transfer Legal
By Silla Brush and Clea Benson - Bloomberg.com
Jon S. Corzine, former chairman and chief executive officer of MF Global Holdings Ltd., told lawmakers today that the firm’s back-office staff “explicitly” informed him that fund transfers made before the company filed for bankruptcy were legal.
Corzine, testifying today before U.S. lawmakers for the third time in a week, was responding to allegations made at a U.S. Senate hearing earlier this week when the executive chairman of Chicago-based CME Group Inc. (CME) told lawmakers Corzine had known of a $175 million loan using client money that was made before the Oct. 31 bankruptcy.

Minyanville Interview With Lee Adler:
What to Expect From Treasuries,
Central Banks, Politics in 2012
By Bears Chat at The Wall Street Examiner
Recently I was in New York and met with the staff of Minyanville at their offices. They invited me to sit for a video giving my opinions for 2012. Here’s the video and transcript of the interview. My thanks to Todd Harrison and all the Minyanville staffers for their hospitality!
Lee Adler is the editor and publisher of the Wall Street Examiner and the Wall Street Examiner Professional Edition, a proprietary service for professional investors and sophisticated individual investors. A frequent contributor to Minyanville, he recently sat down with us to discuss his views on the treasury market for 2012, the election and the role of central banks on the market.

50 Economic Numbers From 2011
That Are Almost Too Crazy To Believe
TheEconomicCollapseBlog.com
Even though most Americans have become very frustrated with this economy, the reality is that the vast majority of them still have no idea just how bad our economic decline has been or how much trouble we are going to be in if we don't make dramatic changes immediately. If we do not educate the American people about how deathly ill the U.S. economy has become, then they will just keep falling for the same old lies that our politicians keep telling them. Just "tweaking" things here and there is not going to fix this economy. We truly do need a fundamental change in direction. America is consuming far more wealth than it is producing and our debt is absolutely exploding. If we stay on this current path, an economic collapse is inevitable. Hopefully the crazy economic numbers from 2011 that I have included in this article will be shocking enough to wake some people up.

Keiser Report: Möbius Strip of Fraud (E223)

Global Demand for U.S. Assets
Climb $4.8 Billion Even as China Cuts Back
By Vincent Del Giudice and Cheyenne Hopkins - Bloomberg.com
Global demand for U.S. financial assets cooled in October amid optimism Europe would resolve its debt crisis, expectations that that have since diminished.
Net buying of long-term equities, notes and bonds totaled $4.8 billion during the month compared with net purchases of $68.3 billion in September, Treasury Department data showed today in Washington. Including short-term securities such as stock swaps, foreigners sold a net $48.8 billion compared with net buying of $65 billion the previous month.

What's Up in China:
Hint, It's Not War With the U.S.
By James Fallows - TheAtlantic.com
There is a lot of big news in and from China right now, and to touch on a few elements before signing off for a while:
1) The outright rebellion that has erupted in the southern coastal town of Wukan is a powerful illustration of the economic, political, environmental, and social tensions that have built up inside China during the recent boom decade -- and that, if anything, may intensify as the boom slows down. For one-stop Wukan updates, I direct you again to ChinaGeeks. Also WSJ and BBC, BBC being source of this picture today:

China Keeps Slapping America In The Face
And America Just Keeps Taking It
EndOfTheAmericanDream.com
If you were playing a game against a dishonest opponent and you allowed that opponent to lie, cheat and steal as much as they wanted to, who do you think would win? Today, China is absolutely crushing the United States on the global economic stage, but they are hardly playing fair. They shower their own firms with huge government subsidies, they brazenly steal technology, they publicly violate intellectual property rights, they manipulate currency rates so that foreign firms cannot compete with Chinese prices and they slap ridiculously high tariffs on many classes of foreign goods. In short, they basically do everything that they can get away with to give themselves a trade advantage. This predatory behavior has caused an enormous transfer of wealth from the United States to China. It isn't as if it is just some sort of an "accident" that we now owe China about a trillion dollars. The truth is that China just keeps slapping America in the face and America just keeps taking it. We are like an abused spouse that just keeps coming back for more. It is disgraceful and it needs to stop.

Chinese Cut Back on London Luxury Home Buying
as Stock Market Losses Bite
By Chris Spillane - Bloomberg.com
Chinese investors’ share of prime London home purchases in the city’s most expensive neighborhoods fell by more than half in the third quarter as stock market declines hurt spending power, Hamptons International said.
Buyers from the world’s second-largest economy accounted for 4.9 percent of sales in Chelsea, Kensington, Knightsbridge and Belgravia in the three months through September, down from 12.6 percent in the previous quarter, said Adam Challis, head of residential research the London-based property broker. They represented 10.6 percent of the purchases in the three months through March.

China’s Manufacturing
May Contract a Second Month, Preliminary PMI Shows
By Bloomberg News
China’s manufacturing may contract for a second month in December as Europe’s debt crisis weighs on exports and home sales slide, preliminary results from a survey indicate.
The reading of 49 for a purchasing managers’ index reported by HSBC Holdings Plc and Markit Economics today compares with a final number of 47.7 for November. The dividing line between contraction and expansion is 50.

China Halts Project
as Protests Erupt Over Death of Villager, Land Sales
By Bloomberg News -
China’s Communist Party halted a real estate project and are investigating local officials in a village in Guangdong province where protests have led to it being cordoned off, state media reported.
Authorities in Wukan village will be questioned and the property construction plan will be stopped, China News Service said. Future land development will be undertaken only with the approval of a majority of villagers, the report said, citing Wu Zili, the mayor of Shanwei, which has jurisdiction over Wukan.

Morgan Stanley slashing 1,600 jobs
By Maureen Farrell @CNNMoneyMarkets
NEW YORK (CNNMoney) -- Adding to Wall Street's job woes, Morgan Stanley announced Thursday that it plans to cut 1,600 positions in the first quarter.
The layoffs will impact "all job levels," said the company in a statement.
Thursday's announcement marks a sharp turnaround for the firm, which has been one of the few major Wall Street banks that had not announced any layoffs this year.

The Dark Side of America's Growing Social Safety Net
A University of Chicago professor argues that help for the poor might be worsening unemployment
By Jordan Weissmann - TheAtlantic.com
By now, we've all gotten used to the fights on Capitol Hill about extending unemployment benefits. Each time they're about to expire, Democrats line up to renew them. Meanwhile, at least a few Republicans rise up to object. Their argument: By writing checks to the jobless, we're making it less likely that they'll go out and find work.
This strikes many of us as ludicrous. Who, after all, would elect to stay unemployed? Who would rely on this dysfunctional government for a meal ticket? Still it's worth questioning assumptions. And a new working paper from University of Chicago economics professor Casey Mulligan is a good place to start.

When unemployment checks check employment
By Scott Walker - WashingtonTimes.com
My two sons are typical teenagers, so I asked them a simple question the other day: "Which would you prefer: an unemployment check from the government or a paycheck from a business?"
Their response was what I would expect from most people: They preferred the paycheck.
Sadly, many in government have lost sight of that common-sense instinct.
For some, the true measure of success for government is determining how many more people are on public assistance. In their world, unemployment-compensation checks are viewed as a form of economic development.

Wholesale Prices in U.S. Rose in November
By Bob Willis - Bloomberg.com
Prices paid to U.S. wholesalers excluding food and fuel rose less than forecast in November, indicating inflation will remain contained.
The so-called core measure increased 0.1 percent, less than the 0.2 percent gain projected by the median forecast of economists surveyed by Bloomberg News, Labor Department figures showed today in Washington. The producer price index climbed 0.3 percent, paced by a 1 percent advance in food expenses.

Coffee Market Braces for Espresso-Bean Jolt
By Bloomberg News - Bloomberg.com
Record robusta harvests in Vietnam and Brazil and potentially the biggest jump in Indonesian output in 16 years are boosting supplies of the coffee used in instant drinks and espressos as slowing economic growth threatens demand.
Production may climb for a fourth year, gaining 2.3 percent to 55.98 million bags (3.36 million metric tons) in 2011-2012, Rabobank International predicts. More supply will create the biggest glut in at least four years, according to Macquarie Group Ltd. Prices that already fell 9.9 percent this year will drop another 7.4 percent to $1,750 a ton by June 30, the lowest level since October 2010, the median estimate in a Bloomberg survey of 13 traders showed.

U.S. to fund 46 transportation projects
in 33 states, Puerto Rico
By Jim Barnett, CNN -USAToday.com
WASHINGTON (CNN) -- All 50 states plus Puerto Rico and Washington, D.C., submitted applications to the Department of Transportation for grants to fund DOT projects, but -- in a sign of tough economic times coupled with a shortage of federal dollars -- not everyone is finding presents under the federal Christmas tree this year.
U.S. Transportation Secretary Ray LaHood announced Thursday that 46 transportation projects in 33 states and Puerto Rico will receive $511 million in the latest round of Transportation Investments Generating Economic Recovery (TIGER) grants.

Coca-Cola moves top-secret formula
for 1st time since 1925
By Harry R. Weber, AP - USAToday.com
ATLANTA – The Coca-Cola Co. has made its secret formula the centerpiece of a new exhibit at its corporate museum, ditching the confines of the bank vault where the list of ingredients had been stored since 1925.
The world's largest beverage maker said Thursday a new vault containing the formula will be on display for visitors to its World of Coca-Cola museum in downtown Atlanta. However, the formula itself, which dates back to 1886, will remain hidden from view.

Tech Has Saved the Postal Service for 200 Years—
Today, It Won't
By Alexis Madrigal - TheAtlantic.com
WASHINGTON -- The Postal Service is a giant delivery machine. It bridges the physical and digital using any combination of humans and robots that works. The USPS delivers half the world's mail -- that's 563 million pieces each and every day of 2010. To do so, it employs 574,000 people and 10,000 pieces of mail-sorting equipment. If the Postal Service were a company, it would have been number 29 on the 2010 Fortune 500 list and Benjamin Franklin would have been its first CEO.

Making Repression Our Business
The Pentagon’s Secret Training Missions in the Middle East
By Nick Turse - Tom's Dispach
As the Arab Spring blossomed and President Obama hesitated about whether to speak out in favor of protesters seeking democratic change in the Greater Middle East, the Pentagon acted decisively. It forged ever deeper ties with some of the most repressive regimes in the region, building up military basesand brokering weapons sales and transfers to despots from Bahrain to Yemen.
As state security forces across the region cracked down on democratic dissent, the Pentagon also repeatedly dispatched American troops on training missions to allied militaries there. During more than 40 such operations with names like Eager Lion and Friendship Two that sometimes lasted for weeks or months at a time, they taught Middle Eastern security forces the finer points of counterinsurgency, small unit tactics, intelligence gathering, and information operations -- skills crucial to defeating popular uprisings.

So When Should You Default on Your Mortgage?
By Megan McArdle - TheAtlantic.com
I think the people that I am arguing with about "strategic mortgage default" are probably closer to my position than they think they are. Just to clarify a few things:

1. I do not want any change in the laws surrounding default; I think mortgage default is a necessary safety valve for the financially troubled.
2. The people I am talking about are people who can afford their mortgages, but would rather have taken out an exotic option to buy the house if it happened to go up in price, than the mortgage contract and promissory note that they actually signed.

"Can I afford this mortgage?" is, of course, a subjective question, one that only you can answer. But I think it's probably worth outlining the questions I would ask myself before I defaulted on my mortgage:

Sheriff Joe Arpaio:
'Don't ... use me as a whipping boy'
By Ashley Powers in Las Vegas
and Richard A. Serrano in Washington - LATimes.com
Sheriff Joe Arpaio said Thursday he would cooperate “the best we can” with demands for changes to his Phoenix-based department, which federal prosecutors said had illegally arrested Latinos, abused them in the county jails and failed to properly investigate hundreds of reported sex crimes.
But Arpaio, whose national prominence is partly due to his pugnacious nature, added: "And if they are not happy, I guess they can carry out their threat and go to federal court."
Arpaio was responding to Justice Department findings released Thursday that found the Maricopa County Sheriff’s Office had engaged in a "widespread pattern or practice of law enforcement and jail activities that discriminate against Latinos," according to a letter of warning sent to Maricopa County officials.

Lew Rockwell on the Rise of Ron Paul

Obama’s Watergate
Officials cover up culpability for gun smuggling and murder
By Jeffrey T. Kuhner-The Washington Times
A year ago this week, U.S. Border Patrol Agent Brian Terry was murdered. He died protecting his country from brutal Mexican gangsters. Two AK-47 assault rifles were found at his death site. We now know the horrifying truth: Agent Terry was killed by weapons that were part of an illegal Obama administration operation to smuggle arms to the dangerous drug cartels. He was a victim of his own government. This is not only a major scandal; it is a high crime that potentially reaches all the way to theWhite House, implicating senior officials. It is President Obama’s Watergate.

There Goes the Republic
By Robert Scheer - Trurhdig.com
Once again the gods of war have united our Congress like nothing else. Unable to agree on the minimal spending necessary to save our economy, schools, medical system or infrastructure, the cowards who mislead us have retreated to the irrationalities of what George Washington in his farewell address condemned as "pretended patriotism."
The defense authorization bill that Congress passed and President Obama had threatened to veto will soon become law, a fact that should be met with public outrage. Human Rights Watch Executive Director Kenneth Roth, responding to Obama’s craven collapse on the bill’s most controversial provision, said, "By signing this defense spending bill, President Obama will go down in history as the president who enshrined indefinite detention without trial in U.S. law." On Wednesday, White House press secretary Jay Carney claimed "the most recent changes give the president additional discretion in determining how the law will be implemented, consistent with our values and the rule of law, which are at the heart of our country’s strength."

Hope Indefinite Detention Bill
Will Be Changed to Protect Americans
By Greg Hunter’s USAWatchdog.com
Not everyone in Congress thinks it is a good idea to pass a law that will allow indefinite detention of U.S. citizens. Senator Mike Lee and Representative Justin Amash think the Senate version of the National Defense Authorization Act (NDAA) needs major changes to preserve constitutional rights of all Americans. Both the House of Representatives and the Senate have passed versions of this bill. The bill the Senate passed recently (S 1867) is where all the controversy comes from. Now, the two versions of the bill have to be reconciled by the House and Senate, and it looks like changes are going to be on the table. Congressman Amash wrote a letter to "House Conferees" about how the Senate version violates“Americans’ constitutional rights."

Senator Lee and Judge Napolitano Discuss NDAA

The Last Bill of Rights Day
By Greg Hunter’s USAWatchdog.com
Earlier today, I wrote a hopeful article about how the language in the "Indefinite Detention" bill (otherwise know as National Defense Authorization Act or NDAA) might be changed to not gut the Bill of Rights. I was way too optimistic. It appears to be over, and the reconciled bill is on its way to President Obama’s desk to sign into law. It also appears there is zero chance he will veto the bill. I think this effectively means America has had its last Bill of Rights Day. Our mainstream media is totally down playing the importance of this historic legislation, but the foreign press sees this for what it is. Russia Today reported,”Exactly 220 years to the date after the Bill of Rights was ratified, the US Senate today voted 86 to 13 in favor of the National Defense Authorization Act for Fiscal Year 2012, allowing the indefinite detention and torture of Americans.

National Defense Authorization Act Provision Update

What Occupiers and Tea Partiers Should Fear Most
It's not taxes. It's the passage of a new bill that would allow people on both sides of the political divide to be detained without trial.
By Wendy Kaminer - TheAtlantic.com
Sixty-four percent of Americans consider big government the biggest threat to the country, according to Gallup, but who knows what they mean by big government? Do 64 percent of Americans oppose the biggest big government threat in our history -- the virtually omniscient, omnipotent national-security state?
I doubt it, and neither the president nor many members of Congress seem fearful of public opposition to post-9/11, big-government authoritarianism. Instead, they cringe at the prospect of seeming soft on terrorism and rush to enact the 2012 National Defense Authorization Act (NDAA,) including provisions that would arguably allow the indefinite detention without trial of American citizens, seized on American soil.

Tech moguls to Congress:
Please don't break the Internet
Many Silicon Valley heavyweights have signed an open letter opposing an anti-piracy bill they say could wreak havoc on the Internet. The bill nevertheless seems likely to pass a committee vote today.
By Dan Mitchell - CNN.com
FORTUNE -- One of the problems with discussing SOPA and PROTECT IP, the wildly overreaching anti-piracy measures under debate in Congress, is that the proposed laws pit two industries against each other: media vs. tech. That makes it sound as if the whole thing is just businesses looking out for themselves and working Capitol Hill for their own interests.

Electromagnetic pulse a real threat
Time to correct U.S. vulnerability is now
By Ilan Berman-The Washington Times
Is electromagnetic pulse a real threat to American security? On the heels of recent Republican primary debates, the danger to U.S. electronics and infrastructure posed by a high-altitude nuclear blast suddenly has emerged as a campaign issue. So has concerted opposition to it, with both liberal and conservative skeptics ridiculing the idea as an overblown, even fabricated, distraction. Yet there is ample evidence that the danger is both clear and present. Far and away the most authoritative assessment in this regard is that of the Commission to Assess the Threat to the United States From Electromagnetic Pulse (EMP) Attack, colloquially known as the EMP Commission. That blue-ribbon panel, convened by Congress a decade ago, outlined the nature of the challenge as follows:

Like Lazarus,
Republicans Attempt to Revive
Moribund Keystone XL Pipeline
Written by John Daly - OilPrice.com
There’s cynicism, and then there’s Congress.
In the latest example of dysfunctional Congressional gridlock, the Democratic-led Senate is certain to reject a House of Representatives-passed Republican bill, House Resolution 3630, the 369-page "Middle Class Tax Relief and Job Creation Act of 2011," to extend the payroll tax cut.
The sticking (sticky) point?

Iran, Besieged by Gasoline Sanctions,
Develops GTL to Extract Gasoline from Natural Gas
Written by John Daly - OilPrice.com
Over the past few weeks Iran, already beleaguered by a raft of existing U.N. and national sanctions, has seen the U.S. and the European Community adding further economic punishments.
Last week the U.S. Senate on a 100-0 vote passed legislation to penalize foreign banks that do business with Iran’s central bank, while this week the U.S. House of Representatives will vote on legislation to punish nations and companies that invest in Iran’s energy sector, furnish it with gasoline, or help it develop chemical, biological, or nuclear weapons or advanced conventional arms.

A DAY LATE AND $3 TRILLION SHORT
KA - Trurhdig.com
The New York Times ran a storyWednesday, the day before U.S. and Iraqi leaders marked the official end of the Iraq War, about a shocking find in an Iraqi junkyard: secret interviews from U.S. soldiers talking about the 2005 massacre of civilians in Haditha.
But this kind of account, as The Washington Spectator’s Hamilton Fish noted Thursday, has been passed over by the mainstream press for years, and the human cost of this negligence has been unfathomable, even if we have some hazy ideas about the numbers involved. Worse, journalists like Chris Hedges and Laila Al-Arian, in their 2008 book "Collateral Damage: America’s War on Iraqi Civilians," were on the case long before this latest report became news fit to print. So why now, and why the radio silence, so to speak, until this moment?

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