Lehman Cutting 5% of Work Force

March 12th, 2008

Via: Reuters:

Lehman Brothers Holdings Inc, the Wall Street investment bank, is laying off 5 percent of its work force, or about 1,430 people, because of difficult market conditions, a person briefed on the matter said on Monday.

The cuts are being made across all divisions and regions, and employees affected are being notified on Monday, the person said.

Lehman employed about 28,600 people as of Nov. 30, 2007, according to the company’s most recent annual report.

The bank declined to comment.

Before Monday, Lehman had eliminated close to 4,000 jobs in the last year. Many were in mortgage operations, which have been hurt by the nation’s housing slump. Lehman is the largest underwriter of U.S. mortgage bonds, Thomson Financial said.


Gold: Intraday Intervals Forming Messy Symmetrical Triangle

March 12th, 2008

WARNING: This is not a recommendation to buy, sell or hold any financial instrument.

I was just looking at the four and eight hour intervals on gold and my Magic 8 Ball, chicken entrails and tea leaves lead me to believe that we might have a bullish Symmetrical Triangle forming… Yeah, squint really hard, it might help you see it. * chortle * And right under that big, fat $1000. Squint some more and you might see a bullish Ascending Triangle.

Strap yourself in tight, it’s going to be wild, one way or the other, when the range bound slop gives way.


Dollar Whip Sawed Back Down; Record Low

March 12th, 2008

Via: Bloomberg:

The dollar fell to an all-time low against the euro on concern that the Federal Reserve’s plan to provide funds to banks won’t be enough to break the gridlock in money-market lending and stem credit losses.

An index tracking the dollar against six major currencies fell close to a record low as traders bet the Fed will cut rates by as much as three quarters of a percentage point next week to avert a recession, while the European Central Bank keeps borrowing costs unchanged. The yen advanced against the dollar and the South African rand after a government report showed Japan’s economy grew faster than forecast in the fourth quarter.

…

Policy makers in the U.S., U.K., Canada, Switzerland and the euro region agreed yesterday on a second round of emergency- loans to curb rising money-market rates. The Fed said it will lend as much as $200 billion of Treasuries through a new lending tool and widen the collateral it accepts to include mortgage- backed securities.

Related: The U.S. Dollar’s Post-Fed Action Rally Lasted About as Long as Cheap Lipstick on a Prom Date


U.S. Corn Biofuels Will Expand Gulf of Mexico ‘Dead Zone’

March 12th, 2008

I’m finished with posting Corn-Ethanol-Is-Stupid stories. The only people who think it’s a good idea are the corn industrial complex interests and the corrupt politicians who accept the payola. Enough already.

Via: AFP:

A planned increase in US ethanol production from corn would spell environmental “disaster” for marine species in the Gulf of Mexico, said a co-author of a science study published Monday.

A boost in corn production will worsen the Gulf’s so-called “dead zone,” an area with so little oxygen that sealife suffocates, said Simon Donner, a geographer at the University of British Columbia in Western Canada.

“Most organisms are not able to survive without enough oxygen,” Donner told AFP. “All the bottom-dwelling organisms that can’t move away are probably going to die, while fish will migrate if they can.”

Donner and Chris Kucharik of the University of Wisconsin used computer models to conclude that growing enough corn to meet US biofuel goals set for 2022 would cause a boost of 10 to 34 percent in nitrogen pollution in the Mississippi and Atchafalaya Rivers, which run into the Gulf of Mexico.

In turn, the study said, there will be more than a 95 percent probability of failure in American targets to reduce the Gulf dead zone.

The study is published Monday in the online Early Edition of the Proceedings of the National Journal of Sciences.

The Gulf’s dead zone, first measured about three decades ago, has grown to cover an area as large as 20,000 square kilometers (12,400 square miles) each summer in the Gulf, which is ringed by the southern United States, Mexico and Cuba.

The zone is caused indirectly by nitrogen fertilizers used on cornfields in states like Illinois, Iowa, Nebraska and Wisconsin. Excess nitrogen runs into the Mississippi River, becomes nitrate, and feeds algae growth. When the algae eventually dies it sinks to the bottom and rots, a process that sucks oxygen out of the water and kills all other life forms.

Donner noted the continental United States already produces about half of the world’s corn, in part for human consumption but mostly to feed livestock or make ethanol.

The authors predict the only way nitrate pollution could be controlled and ethanol targets met would be if American farmers stop raising meat animals on corn and dramatically change agricultural management techniques.


Brazil: Women Destroy GE Crops

March 12th, 2008

Nice work, ladies.

Via: AFP:

Around 300 women rural residents in Brazil burst into a property owned by the US company Monsanto and destroyed a plant nursery and crops containing genetically modified corn, their organization said.

The women were protesting what they saw as environmental damage by the crops.

They trashed the plants within 30 minutes and left before police arrived at the site in the southern state of Sao Paulo, a member of the Landless Workers’ Movement, Igor Foride, told AFP.

The Brazilian government had “caved in to pressure from agrobusinesses” by recently allowing tinkered crops to be grown in the country, he said.

In Brasilia, a protest by another 400 women from an umbrella group, Via Campesina (the Rural Way), was held in front of the Swiss embassy against Syngenta, a Swiss company that is selling genetically modified seeds in Brazil.

The demonstrators called attention to an October 2007 incident in which private guards working for Syngenta killed a protester taking part in an occupation of land owned by the company.

Via Campesina said in a statement that “no scientific studies exist that guarantee that genetically modified crops won’t have negative effects on human health and on nature.”

It added that on Tuesday, another 900 of its members had entered a property owned by the Swedish-Finnish paper giant Stora Enso and ripped out non-modified eucalyptus saplings they claimed were illegally planted.


Cryptogon Reader Contributes $50

March 12th, 2008

Eileen sent $50. (She sent another $50 to Farmlet.) Thank you.


Top British Police Investigator Who Headed Inquiry Into CIA Torture Flights Found Dead at Bottom of Cliff

March 12th, 2008

Via: AP:

A city police chief who led an investigation into charges that Britain cooperated with secret CIA flights to transport terrorism suspects without formal proceedings has been found dead, his deputy said Tuesday.

Manchester Chief Constable Michael Todd, 50, was found dead in Snowdonia, about 240 miles northwest of London, Deputy Chief Constable Dave Whatton said. He had been missing since going out for a walk Monday during his day off.

Whatton said the body, which was found Tuesday afternoon, had not yet been formally identified but he believed it was Todd.

He said a coroner’s inquest would investigate the cause of death and did not give any further details.

Todd was elected vice president of the Association of Chief Police Officers of England and Wales in 2006, according to a biography on his Web site.

The association gave him the task of looking into accusations that Britain allowed the CIA to use the country’s airports to fly terrorism suspects to other countries without any extradition hearings, a clandestine procedure known as “extraordinary rendition.”

Todd’s investigation concluded last June that there was no evidence to back the claim. Last month, however, Britain admitted one of its remote outposts in the Indian Ocean had twice been used by the United States as a refueling stop for the secret transfer of two terrorism suspects.

He and his wife had a daughter and twin sons.


Fallon Resigns as Mideast Military Chief

March 12th, 2008

Fallon, you’ll remember, is probably the main reason why Bush has not been able to start a war with Iran.

Interesting coincidence, how oil broke out higher in the last several days preceding this news.

Via: AP:

The Navy admiral in charge of the wars in Iraq and Afghanistan announced Tuesday that he is resigning over press reports portraying him as opposed to President Bush’s Iran policy.

Adm. William J. Fallon, one of the most experienced officers in the U.S. military, said the reports were wrong but had become a distraction hampering his efforts in the Middle East. Fallon’s area of responsibility includes Iran and stretches from Central Asia across the Middle East to the Horn of Africa.

“I don’t believe there have ever been any differences about the objectives of our policy in the Central Command area of responsibility,” Fallon said, and he regretted “the simple perception that there is.” He was in Iraq when he made the statement.

Defense Secretary Robert Gates told a Pentagon news conference that he accepted Fallon’s request to resign and retire from the Navy, agreeing that the Iran issue had become a distraction. But Gates said repeatedly that he believed talk of Fallon opposing Bush on Iran was mistaken.

“I don’t think that there really were differences at all,” Gates said, adding that Fallon was not pressured to leave.

“He told me that, quote, ‘The current embarrassing situation, public perception of differences between my views and administration policy, and the distraction this causes from the mission make this the right thing to do,’ unquote,” Gates told reporters.

Fallon was the subject of an article published last week in Esquire magazine that portrayed him as at odds with a president eager to go to war with Iran. Titled “The Man Between War and Peace,” it described Fallon as a lone voice against taking military action to stop the Iranian nuclear program.

Gates said he did not think it was that article alone that prompted Fallon to quit. Rather, Gates thought it was “a cumulative kind of thing” that he and Fallon had failed to put “behind us.”

It is highly unusual for a senior commander to resign in wartime. Fallon took the post on March 16, 2007, succeeding Army Gen. John Abizaid, who retired after nearly four years in the job. Fallon was part of a new team of senior officials, including Gates, chosen by Bush to implement a revised Iraq war policy.

Fallon’s departure, effective March 31, is unlikely to have an immediate effect on conducting the wars in Iraq or Afghanistan. His top deputy at Central Command, Army Lt. Gen. Martin Dempsey, will take his place until a permanent successor is nominated by the president and confirmed by the Senate.

…

Pentagon press secretary Geoff Morrell said the White House played no role in Fallon’s move.

“People should not misconstrue this as the price to be paid for speaking out within the Pentagon,” Morrell said. “This is not indicative of a hostile environment toward free thinking. This is indicative of what sadly became a perception problem that dogged Admiral Fallon — this perception that he was in a different place than the president and the administration when it came to Iran.”

President Bush praised Fallon in a statement. “During his tenure at Centcom, Admiral Fallon’s job has been to help ensure that America’s military forces are ready to meet the threats of an often-troubled region of the world, and he deserves considerable credit for progress that has been made there, especially in Iraq and Afghanistan,” Bush said.

Gates dismissed as “ridiculous” any notion that Fallon’s departure signals the United States is planning to go to war with Iran. Pressed on that point, he said, “As I say, the notion that this decision portends anything in terms of a change in Iran policy is, to quote myself, ridiculous.”


UK: Pupils to Take Allegiance Oath

March 11th, 2008

Set the crack pipe down, Gordon. You’re embarrassing yourself.

Via: BBC:

School-leavers should be encouraged to swear an oath of allegiance to Queen and country, says a report commissioned by Gordon Brown on British citizenship.

Report author, ex-attorney general Lord Goldsmith, says it would give teenagers a sense of belonging.

Council tax and student fee rebates are suggested for people who volunteer – as well as a “Britishness” public holiday.


FED ALLOWING INSTITUTIONS TO ACQUIRE NEW, PUBLICLY BACKED TREASURY SECURITIES BY USING MORTGAGE BACKED SECURITIES AS COLLATERAL

March 11th, 2008

How many chainsaws can the jugglers keep in the air at once?

This is just creating another chunk of publicly backed credit to enter into a balance sheet while the toxic waste (now being referred to as “collateral”) smolders away at the Fed.

In other words, the Fed is about to became the buyer for $200 billion worth of this crap that everyone is pretending is AAA rated. “Fed,” in the previous sentence means, U.S. Dollar holders, Canadian Dollar holder, Pound Sterling holders, Euro holders and Swiss Franc holders.

Do you see the swindle!? The firms get to pledge the bogus AAA rated Fannie/Freddie paper in order to get these shiny new TSLF ones and zeros to pad their reserve requirement books. Now, take a look the following Reuters piece: Wells Fargo: Over 200 Markets Face Housing Trouble:

Wells Fargo & Co, the second-largest U.S. provider of home loans, has identified more than 200 troubled housing markets nationwide, showing how the mortgage crisis has spread beyond a few select U.S. regions.

In a February 25 document sent to mortgage brokers, San Francisco-based Wells Fargo said it had identified “soft,” “distressed” or “severely distressed” housing markets in 24 states and Washington, D.C. Most of the markets are counties, while a handful are cities.

Blown Mortgage hosts the Wells Fargo document. Look through those troubled locations.

How much of that AAA rated paper, excuse me, “collateral,” is made up from crap in those Severely Distressed, Distressed and Soft columns… That’s A LOT of territory!

But the Fed is going to take that stuff as “collateral” while issuing the firms even more credit… As home prices fall, inventory piles up and people go bankrupt.

Via: AP:

“Pressures in some of these markets have recently increased again,” the Fed said in a statement. “We all continue to work together and will take appropriate steps to address those liquidity pressures.” The other banks involved are the Bank of Canada, the Bank of England, the European Central Bank and the Swiss National Bank.

The Fed announced the creation of a new tool, called the Term Securities Lending Facility (TSLF), geared to provide primary dealers — big Wall Street investment firms and banks that trade directly with the Fed — with 28-day loans of Treasury securities, rather than overnight loans. They would pledge other securities — including federal agency residential-mortgage-backed securities, such as those of mortgage giants Fannnie Mae and Freddie Mac — as collateral for the loans of Treasury securities.

Research Credit: Scott


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