Monday, August 29, 2011
Huge Asteroid to Pass Near Earth in November
Mark your calendars for an impressive and upcoming flyby of an asteroid that’s one of the larger potentially perilous space rocks in the heavens – in terms of smacking the Earth in the future.
It’s the case of asteroid 2005 YU55, a round mini-world that is about 1,300 feet (400 meters) in diameter. In early November, this asteroid will approach Earth within a scant 0.85 lunar distances.
Due the object’s size and whisking by so close to Earth, an extensive campaign of radar, visual and infrared observations are being planned.
Space
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Nationwide EAS Test to Last About 3 Minutes
For one thing, the commission is confirming that the test on Nov. 9 will last for about three minutes, something of an eternity in modern-day radio.
The FCC says that during the test, FEMA will originate a “live” Emergency Action Notification code to all EAS participants, including radio and TV stations, cable systems, Sirius XM, satellite TV providers and wireline video service providers. As part of the test, the public will be told the EAS has been activated for a national emergency, along with an audible notice that “this is a test.”
The commission and FEMA, along with stations and cable providers, are working on outreach efforts to inform the public to avoid panic about the test.
There’s also been a lot of debate within engineering circles about how the test will conclude.
The FCC’s Public Safety and Homeland Security Bureau says the test will end with transmission of the End of Message code, not the Emergency Action Termination code. The bureau says equipment manufacturers have told the commission that by using the EOM, stations won’t need to reconfigure their EAS encoder/decoders to receive and air the test.
Washington, D.C.’s location code will be the origination code for the EAS test. This, too, has been a question for station engineers, since FEMA previously had said there’s no national EAS location code. The FCC’s Public Safety and Homeland Security Bureau believes most EAS encoder/decoders will automatically forward the EAN with the Washington code and not require further configuration. However the commission recommends that stations that aren’t sure whether their device will forward an EAN with the Washington code to contact their manufacturer or FEMA’s Integrated Public Alert and Warning System Office via email to IPAWS@dhs.gov.
The commission itself doesn’t plan to conduct pre-tests before the nationwide test; however it says FEMA is working with some states, EAS participants and equipment manufacturers to conduct statewide tests of EAS equipment and procedures before the nationwide event.
Stations can find their state’s EAS contact by referring to their state’s EAS plan.
The bureau intends to provide more information before the test.
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Ahmadinejad: Palestinian statehood only 'first step'
TEHRAN - The creation of a universally-recognized Palestinian state would be just a first step towards wiping out Israel, Iranian President Mahmoud Ahmadinejad said on Friday.
He spoke weeks ahead of a UN General Assembly in New York where the Arab League plans to seek full UN membership for a Palestinian state.
Ahmadinejad, restating a position expressed soon after taking office in 2005 that Israel was a "tumor" to be wiped off the map, urged Palestinians not to settle for a two-state solution that is backed by [Palestinian Authority President Mahmoud] Abbas but to strive for a complete return of what they consider their land.
"Recognizing the Palestinian state is not the last goal. It is only one step forward towards liberating the whole of Palestine," Ahmadinejad told worshippers at Friday prayers on international Qods Day -- an annual show of support for the Palestinian cause.
"The Zionist regime is a center of microbes, a cancer cell and if it exists in one iota of Palestine it will mobilize again and hurt everyone.""It is not enough for them to have a weak, powerless state in a very small piece of Palestine. They should unite to establish a state but the ultimate goal is the liberation of the whole of Palestine," he said.
"I urge the Palestinians never to forget this ideal. Forgetting this ideal is equal to committing suicide. It would be giving an opportunity to an enemy which is on the verge of collapse and disappearance."
September report to remain secret
Foreign Affairs and Defense Committee to keep controversial report criticizing Israel's readiness for upcoming Palestinian statehood bid under wraps. Chairman Mofaz: This is a political outrage
The Knesset's Foreign Affairs and Defense Committee (FADC) voted Sunday against the publication of a controversial report criticizing Israel's readiness for September events surrounding the UN vote on Palestinian statehood.
The report allegedly states that Israel is ill-prepared for possible scenarios in September. It also mentions that the Palestinian bid could have been prevented in the diplomatic arena.
The document, initiated by FADC Chairman Shaul Mofaz (Kadima), was the hot topic of discussion at the committee's meeting on Sunday, as members belonging to the coalition made it clear to Mofaz they will not allow the report to be published on behalf of the committee.
Mofaz's critics also demanded the chairman declare the document as his own personal report.
Towards the end of the meeting, the committee decided to keep the document confidential, only allowing a limited number of senior officials to review it.
Sources close to Mofaz warned last Thursday that if the coalition persists in its efforts to conceal the report, there would be no other choice but to publish some excerpts from it instead.
Mofaz later briefed the press about the meeting, criticizing the coalition. "Speaking as someone who has taken part in a number of discussions and status evaluations, I can say that what happened today at the committee was a political outrage," he remarked.
"There was an attempt to silence the situation and not allow the publication of the report we've formed after great efforts. I call the prime minster to read the report and take it seriously."
"The prime minister said the work being done on the report was political, and used the majority of the coalition to prevent its publication," added Knesset Member Yohanan Plesner (Kadima), one of the authors of the disputable document.
"With that, the situation in which the prime minister can, with the help of a majority of the coalition, block the procedures caused by September - must be fixed."
'Report a political weapon'
However Knesset Speaker Reuven Rivlin pointed out that "the committee chairman is first among equals, and it's not possible for him to present a committee report in our parliamentary system without the committee's approval… and it cannot be used as a political weapon."
Other coalition members discussed their objection to the publication of the report.
"The document is political and lacks references to the reality of terror against the State of Israel,"
MK Miri Regev (Likud) said.
Towards the end of the meeting, the committee decided to keep the document confidential, only allowing a limited number of senior officials to review it.
Sources close to Mofaz warned last Thursday that if the coalition persists in its efforts to conceal the report, there would be no other choice but to publish some excerpts from it instead.
Mofaz later briefed the press about the meeting, criticizing the coalition. "Speaking as someone who has taken part in a number of discussions and status evaluations, I can say that what happened today at the committee was a political outrage," he remarked.
"There was an attempt to silence the situation and not allow the publication of the report we've formed after great efforts. I call the prime minster to read the report and take it seriously."
"The prime minister said the work being done on the report was political, and used the majority of the coalition to prevent its publication," added Knesset Member Yohanan Plesner (Kadima), one of the authors of the disputable document.
"With that, the situation in which the prime minister can, with the help of a majority of the coalition, block the procedures caused by September - must be fixed."
'Report a political weapon'
However Knesset Speaker Reuven Rivlin pointed out that "the committee chairman is first among equals, and it's not possible for him to present a committee report in our parliamentary system without the committee's approval… and it cannot be used as a political weapon."
Other coalition members discussed their objection to the publication of the report.
"The document is political and lacks references to the reality of terror against the State of Israel,"
MK Miri Regev (Likud) said.
3, 2, 1: Global Debt Meltdown
We are steamrolling toward a massive global debt meltdown, and at this point world leaders seem to be all out of solutions. Over the last 30 years or so, the greatest debt bubble in the history of the planet has produced unprecedented prosperity in the western world. But now that debt bubble is starting to burst and the bills are coming due. Many believe that "ground zero" for the coming global debt meltdown will be in Europe. Unlike the U.S. and Japan, the nations of the EU can't just print more money to cover their debts. Nations such as Greece, Portugal and Italy must repay their debts in euros, and those nations are rapidly getting to the point where their debts are going to overwhelm them. Unfortunately, major banks all over Europe are very highly leveraged and are also very heavily invested in the sovereign debt of nations such as Greece, Portugal and Italy. If even one EU nation defaults it will start tipping over financial dominoes. If more than one EU nation defaults it could cause a cataclysmic wave of bank failures all over Europe.
But Germany and the other more financially stable countries of the EU cannot bail out nations like Greece, Portugal and Italy indefinitely. Pouring money into Greece is like pouring money into a black hole. When you take money from financially stable countries and pour it into hopeless messes, you may stabilize things for a little while, but you also cause the financial condition of the financially stable nations to start deteriorating.
Right now, the yield on 2 year Greek bonds is up to 44%. Basically, the market is screaming that these are horrible investments and that they will almost certainly default.
Greece cannot fire up the printing presses and print more money, so they are now totally dependent on others to bail them out.
Just how desperate have things become in Greece? Just consider the following excerpt from a recent article by Puru Saxena....
In Greece, government debt now represents almost 160% of GDP and the average yield on Greek debt is around 15%. Thus, if Greece’s debt is rolled over without restructuring, its interest costs alone will amount to approximately 24% of GDP. In other words, if debt pardoning does not occur, nearly a quarter of Greece’s economic output will be gobbled up by interest repayments!
Can you imagine?
No nation on earth can afford to pay out nearly a quarter of GDP just on interest on government debt.
So just how did Greece get into this position? Well, it turns out that big U.S. banks such as Goldman Sachs and JPMorgan Chase played a big role. The following is an excerpt from a recent article by Andrew Gavin Marshall....
In the same way that homeowners take out a second mortgage to pay off their credit card debt, Goldman Sachs and JP Morgan Chase and other U.S. banks helped push government debt far into the future through the derivatives market. This was done in Greece, Italy, and likely several other euro-zone countries as well. In several dozen deals in Europe, “banks provided cash upfront in return for government payments in the future, with those liabilities then left off the books.” Because the deals are not listed as loans, they are not listed as debt (liabilities), and so the true debt of Greece and other euro-zone countries was and likely to a large degree remains hidden. Greece effectively mortgaged its airports and highways to the major banks in order to get cash up-front and keep the loans off the books, classifying them as transactions.
All over the world, politicians love to "kick the can down the road", and big Wall Street banks love to find creative ways to help them do that.
But now Greece is about to collapse, and the people that helped them get into this mess will probably never be held accountable.
If Greece does default, it is going to have dramatic consequences all over Europe. For a chilling look at what could potentially happen when Greece defaults, just check out this article by John Mauldin.
Sadly, Greece is far from the only problem in Europe. Portugal, Ireland and Italy also have debt to GDP ratios that are above 100%.
The biggest potential problem, at least in the near-term, is Italy.
Italy is the fourth largest economy in the EU, and lately the financial problems of the Italian government and Italian banks have been making headlines all over the globe.
Italy is a far, far larger potential problem than Greece is.
The EU can handle bailing out Greece, at least for now.
If Italy gets to the point where it needs large bailouts, that is going to bring down the whole system. The EU simply does not have enough money to perform an extensive financial rescue of Italy.
As you can see from this chart, the exposure that European banks have to Italian debt is absolutely massive. If Italian debt goes bad, it is going to take down a whole bunch of banks.
Not only that, but many believe that the European Central Bank itself is now in some very dangerous territory.
It is estimated that the European Central Bank is now holding somewhere in the neighborhood of 444 billion euros worth of debt from the governments of Greece, Italy, Portugal, Ireland and Spain.
The financial consequences of a default by one or more of those nations could potentially be catastrophic.
According to London-based think tank Open Europe, the European Central Bankis massively overleveraged....
"Should the ECB see its assets fall by just 4.23pc in value . . . its entire capital base would be wiped out."
That doesn't sound good.
Surely the European Central Bank would be recapitalized somehow, but this is just another example that shows just how dangerous huge amounts of leverage can be.
As I wrote about in a recent article about the sovereign debt crisis, if the dominoes begin to tumble in Europe it is going to take everybody down.
The big banks in Europe are leveraged to the hilt, and they are massively exposed to government debt.
If you don't think that this is a problem, just remember what happened back in 2008.
Back then, Lehman Brothers was leveraged 31 to 1. When things turned bad, Lehman was wiped out very rapidly.
Today, major German banks are leveraged 32 to 1, and those banks are currently holding a massive amount of European sovereign debt.
Yes, things could become really nightmarish if the dominoes start to fall.
Already we are seeing huge signs of trouble at major banks all over Europe.
Major European banks UBS, Barclays, Credit Suisse, RBS, and HSBC have all announced layoffs recently. In fact, when you add them all up, the total number of layoffs announced by these banks just this month is over 40,000. Overall, the grand total of layoffs by European banks so far this year is now up to67,000.
The mood in the financial sector over in Europe is very dark right now. Just consider the following excerpt from a recent Bloomberg article....
“It’s a bloodbath, and I expect things to get worse before they get better,” said Jonathan Evans, chairman of executive- search firm Sammons Associates in London. “I cannot see a lot of those who have lost their jobs getting re-employed. Regardless of how good someone is, no one wants to talk about hiring. Life will be very difficult for two or three years.”
Just like back in 2008 with U.S. banks, we are seeing European banks getting absolutely pummeled right now. A recent article in The Sydney Morning Herald documented some of the carnage....
The 46-member Bloomberg Europe Banks and Financial Services Index has fallen 31 per cent this year. RBS tumbled 49 per cent, Barclays 44 per cent and France’s Societe Generale 48 per cent.
Credit Suisse and UBS both reported a 71 per cent drop in investment-banking earnings in the second quarter. Revenue at Edinburgh-based RBS’s securities unit dropped 35 per cent in the period, while London-based Barclays Capital posted a 27 per cent decline in pretax profit.
Things in Europe continue to get worse and worse and worse.
Do not take your eyes off of Europe. This crisis is just getting started.
Not that there aren't huge debt problems around the rest of the globe as well.
Japan has a national debt that is now over 200 percent of GDP, and they are really struggling to recover from the recent disasters that devastated that nation.
Moody's has just downgraded Japanese government debt one notch to Aa3, and more downgrades could be coming. For now Japan is still able to borrow huge piles of money very, very cheaply but if that changes Japan could be wiped out very quickly.
Of course the nation with the biggest debt of all is the United States.
At the moment, the U.S. national debt is sitting at a grand total of$14,649,289,670,347.85.
Fortunately, the U.S. is also able to borrow massive amounts of money very, very cheaply right now. But when that changes it is going to be absolutely cataclysmic for our economy.
Sadly, our politicians continue to act as if this debt binge can go on forever.
According to the Congressional Budget Office, the budget deficit for the federal government will be about 1.28 trillion dollars this year. This will be the third year in a row that we have had a budget deficit of over a trillion dollars.
To put that in perspective, from George Washington to Ronald Reagan the U.S. government racked up a grand total of about one trillion dollars of debt. But this year alone we will go 1.28 trillion dollars more into debt.
At the moment, the U.S. national debt is expanding by about 2 and a half million dollars every single minute. It is hard to put into words how absolutely foolish that is.
As I wrote about yesterday, someone needs to wake up America. Our debt is exploding and our economy is dying.
We haven't even solved the problems caused by the last financial crisis. The real estate market is still a gigantic mess. Purchases of both new and previously existing homes in the United States continue to fall.
But there will never be a housing recovery until there is a jobs recovery, and our politicians continue to stand by and watch as millions of our jobs are shipped overseas.
Unemployment is rampant, and even many of those that do have jobs are barely able to survive.
Back in 1980, less than 30% of all jobs in the United States were low income jobs. Today, more than 40% of all jobs in the United States are low income jobs.
That is not a good trend.
Sadly, it looks like things are not going to get much better any time soon.
Right now, the Congressional Budget Office is projecting that unemployment in the U.S. will remain above 8% until 2014.
That should really scare you, because government numbers are almost always way too optimistic. The folks in the federal government hardly ever project that unemployment will actually go up.
So if they are saying that unemployment will remain above 8 percent until 2014, the truth is that things will probably be worse than that.
We have entered very frightening times. We are on the verge of a massive global debt meltdown, and nobody is sure what is going to happen next.
Let us hope for the best, but let us also prepare for the worst.
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European bank stocks plunge as investors shun risk
Credit Suisse, the Swiss bank, has warned investors against buying shares in Greek banks. It was a conclusion reached after lengthy analysis of bank reserves, likely profits and relationship to the ailing Greek economy. But it hardly seemed necessary – there can be few investors queueing up to add Greek bank stock to their portfolio.
That is the case for most European banks. Share prices have dived since last year and despite a few mini rallies, remain depressed. In March Credit Agricole shares topped €12; last week they were just above €6. BNP Paribas shares have slumped from €58 to €32.
The comments of Christine Lagarde, head of the International Monetary Fund, will have done little to calm jittery nerves. She said Europe's banks needed to call on their shareholders for more money to boost their capital buffers and prevent another credit crunch tipping them into bankruptcy.
UK banks are in the same boat. Lloyds Banking Group, which includes Halifax, went above 78p a share last September. Last week it was trading down 56% at 28p. Barclays reached a post-crash peak of 377p in August 2009 and remained above 300p until April this year when it began a slide that leaves the bank stock now struggling at 145p.
But it is the German institutions that have taken the greatest pounding. Commerzbank, Germany's second largest bank, has lost two thirds of its value since March when its share price stood above €6. Its larger rival,Deutsche Bank, has dropped almost 50% from a high of €50 to less than €27 a share.
Analysts argue the German banks face a three-way squeeze. Holdings of financial instruments have been left almost worthless by the Greek crisis. In the never-ending chain that is modern capitalism, German banks have lent funds to institutions that in turn hold Greek sovereign and corporate bonds and other financial instruments such as credit default swaps that insure transactions by Greek companies.
Secondly, there is the struggle to improve profits when European economies are slowing. And thirdly, there are the difficulties faced by the government now most investors believe Berlin will find itself insuring the debts of most peripheral eurozone countries within the next couple of years, whether the German electorate likes it or not.
The generally held view that Greece, Portugal, Spain and Italy will need vast amounts of financial aid from Berlin via the European Central Bank's lending facility has sent the cost of insuring German sovereign bonds soaring and had knock-on effects for banks.
Investors are expected to remain wary of supporting European banks while politicians wrangle among themselves over the extent of the Brussels' bailout fund, the European Financial Stability Facility.
The US has similar difficulties. Bank of America, the largest bank in the US, has seen its share price halve this year to less than $8. Before the crash its value was based on a share price north of $50. Citigroup has dived from $50 to $30 a share and Wells Fargo, considered one of the better capitalised banks, has dropped from $34 to $24 a share.
As in many western countries, many of the worst-hit financial institutions remain in government hands. The biggest mortgage lenders in the US, Fanny Mae and Freddie Mac, are still government owned and in effect bust without federal support.
Germany's Hypo Real Estate bank is in government hands after a €50bn bailout and the UK's Royal Bank of Scotland and Lloyds are still partly nationalised. French banks have escaped, though analysts remain nervous that lending to Latin countries leaves them vulnerable to default.
Warren Buffett, the maverick US investor, has stepped in with a $5bn investment to boost Bank of America's reserves. He expects to make a sizeable return on his capital much as he did following a $10bn injection into Goldman Sachs at the height of the crisis in 2008. But most investors are expected to wait for an economic upturn and political resolution before following his example.
Guardian
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EU Working on ‘Radical’ Plan for Banks: Report
Following weeks of heavy losses for banking stocks across Europe, the Sunday Times in the UK reported Sunday that European officials are working on a "radical plan" to prevent a fresh pan-European credit crunch.
Without citing sources, the paper said officials from the European Central Bank and European Commission are considering offering central guarantees over certain types of debt issued by banks.
The paper goes onto say that the move comes after a number of European banks where shut out of international money markets.
The report comes after the head of the International Monetary Fund warned on Saturday that "urgent recapitalization" was needed for Europe’s banking industry.
“Developments this summer have indicated we are in a dangerous new phase. The stakes are clear. We risk seeing a fragile recovery derailed, so we should act now,” said Christine Largarde in a speech in Jackson Hole Wyoming on Saturday.
Investors are also worried about the prospects for the second Greek rescue package after Finland demanded collateral against any loans handed to the ailing euro zone member.
On Saturday, President Barack Obama and German Chancellor Angela Merkel spoke on the phone and agreed on the importance of "concerted action" to address current economic challenges and spur growth and job creation in the global economy.
CNBC
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Euro bail-out in doubt as 'hysteria' sweeps Germany
Mrs Merkel has cancelled a high-profile trip to Russia on September 7, the crucial day when the package goes to the Bundestag and the country's constitutional court rules on the legality of the EU's bail-out machinery.
If the court rules that the €440bn rescue fund (EFSF) breaches Treaty law or undermines German fiscal sovereignty, it risks setting off an instant brushfire across monetary union.
The seething discontent in Germany over Europe's debt crisis has spread to all the key institutions of the state. "Hysteria is sweeping Germany " said Klaus Regling, the EFSF's director.
German media reported that the latest tally of votes in the Bundestag shows that 23 members from Mrs Merkel's own coalition plan to vote against the package, including twelve of the 44 members of Bavaria's Social Christians (CSU). This may force the Chancellor to rely on opposition votes, risking a government collapse.
Christian Wulff, Germany's president, stunned the country last week by accusing the European Central Bank of going "far beyond its mandate" with mass purchases of Spanish and Italian debt, and warning that the Europe's headlong rush towards fiscal union stikes at the "very core" of democracy. "Decisions have to be made in parliament in a liberal democracy. That is where legitimacy lies," he said.
A day earlier the Bundesbank had fired its own volley, condemning the ECB's bond purchases and warning the EU is drifting towards debt union without "democratic legitimacy" or treaty backing.
Joahannes Singhammer, leader of the CSU's Bundestag group, accused the ECB of acting "dangerously" by jumping the gun before parliaments had voted. The ECB is implicitly acting on behalf of the rescue fund until it is ratified.
A CSU document to be released on Monday flatly rebuts the latest accord between Chancellor Merkel and French president Nicholas Sarkozy, saying plans for an "economic government for eurozone states" are unacceptable. It demands treaty changes to let EMU states go bankrupt, and to eject them from the euro altogether for serial abuses.
"An unlimited transfer union and pooling of debts for any length of time would imply a shared financial government and decisively change the character of a European confederation of states," said the draft, obtained by Der Spiegel.
Mrs Merkel faces mutiny even within her own Christian Democrat (CDU) family. Wolfgang Bossbach, the spokesman for internal affairs, said he would oppose the package. "I can't vote against my own conviction," he said.
The Bundestag is expected to decide late next month on the package, which empowers the EFSF to buy bonds pre-emptively and recapitalize banks. While the bill is likely to pass, the furious debate leaves no doubt that Germany will resist moves to boost the EFSF's firepower yet further. Most City banks say the fund needs €2 trillion to stop the crisis engulfing Spain and Italy.
Mrs Merkel's aides say she is facing "war on every front". The next month will decide her future, Germany's destiny, and the fate of monetary union.
The Telegraph
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9,173 Ounces Of Gold Transferred From HSBC To JP Morgan Gold Vaults Overnight
While we have no information as to who or why (we do know when and where) engaged in a transfer of 9,173 ounces of eligible gold (for a total of about $16.5 million) from HSBC’s gold depository into that of JP Morgan, according to today’s closing CME Group Metal Depository Statistics, we can merely point out that it happened. One back of the envelope hypothesis: we have counterparty risk at the bank level (which is currently manifesting itself at both the CDS, the stock price, and the Li(E)bor level; are we going to start seeing counterparty concerns at the gold depository level next? What next: a run on the [ ] gold depository in a self-fulfilling prophecy? The second hypothesis is by now well known- JPM needs all the gold it can get. But a paltry 9,173 ounces? Of course, the last hypothesis is that the two precisely 9,173 ounce transactions are in no way related.
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Who Did The FED Gave Money To ?
This information was revealed through a victorious freedom of information act lawsuit against the Federal Reserve brought on by Bloomberg News, who described the $700 billion TARP as "a rounding error." The numbers are absolutely outrageous. Literally trillions of dollars, approaching GDP, has been "lent" out by a Federal Reserve with the legal duty of printing dollars and lending credit at virtually zero percent interest. I was sick of the FED before I knew what they were doing.Now that we know what they're doing for sure, lets DISBAND THE FED! The Fed isn't even run by the government. It's privately owned.Of the super big banks there is no such thing as a domestic bank or a foreign bank. Goldman Sachs is not an American bank, RBS is not a British bank and Credit Suisse is not a Swiss bank. These banks are CONTROLLED by a group that has no national obligations. The goal of the Federal Reserve, Congress and the President is to transfer money from the middle class to the top 1%. And the American people do nothing. They're going to wake up when bread is $20.00
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Marc Faber: Do not store your gold in the United States
Marc Faber : “I prefer if investors hold physical gold in a safe deposit box, ideally outside the US, in various locations… Switzerland, Singapore, Hong Kong, Australia, Canada… I think it’s important in today’s very uncertain world to diversify, not only the various asset classes… but also the custody of your assets should be in different jurisdictions.” - in CNBC
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