Thursday, January 20, 2011

Indications: U.S. futures pare decline after jobless claims

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By Barbara Kollmeyer and Kate Gibson, MarketWatch

NEW YORK (MarketWatch) â€" U.S. stock futures scaled back losses Thursday after the government’s weekly tally of initial claims for jobless benefits fell more than economists had expected.

“The story, or song, remains the same in that the pace of firings continues to trend lower, albeit slowly, while the level of hirings relative to the monthly rise in the labor force continues to be below historical recoveries,” wrote Peter Boockvar, equity strategist at Miller Tabak.

Down more than 30 points before the employment-related data, Dow Jones Industrial Average futures /quotes/comstock/21b!f:dj\h11 (DJH11 11,718, -68.00, -0.58%)  more recently slipped 10 points to 11,776. S&P 500 futures /quotes/comstock/21m!f:sp\h11 (SPH11 1,270, -8.50, -0.66%)  fell half a point to 1,278, while Nasdaq 100 futures /quotes/comstock/21m!f:nd\h11 (NDH11 2,270, -24.50, -1.07%)  added a quarter of a point to 2,294.75.

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First-time applications for jobless benefits fell 37,000 to 404,000 last week, the Labor Department said. Read more about jobless claims.

More economic reports are still to come after the opening bell, with existing-home sales and leading indicators for December due at 10 a.m. Eastern, along with the Philly Fed index for January.

“Leading economic indicators and Philly Fed â€" those are the two that could be the market movers of today,” said Peter Cardillo, chief market economist at Avalon Partners Inc.

“For the most part, the market is already discounting the fact this is going to be a super earnings season in terms of both top and bottom line,” he said. “I think you’re going to see a bit more of yesterday’s action: selling. Unless we get some real good economic news, it’s mostly technical. The market needs to step through resistance levels â€" 12,000 on the Dow and 1,300 on the S&P before they start firming up.”

Before the opening bell, Morgan Stanley /quotes/comstock/13*!ms/quotes/nls/ms (MS 28.41, +0.66, +2.38%)  reported fourth-quarter earnings of 41 cents a share, narrowly beating forecasts of 40 cents a share. Read more about Morgan Stanley’s results.

Also on the move, shares of Wendy’s/Arby’s /quotes/comstock/13*!wen/quotes/nls/wen (WEN 4.85, +0.38, +8.50%)  jumped 8.5% in premarket trade after the company said it may sell Arby’s Restaurant Group Inc. to concentrate on a “pure-play Wendy’s.”

Shares of eBay Inc. /quotes/comstock/15*!ebay/quotes/nls/ebay (EBAY 30.11, +1.01, +3.47%)  rose 2.7% before the bell after reporting late Wednesday a 17% rise in fourth-quarter earnings, beating Wall Street estimates. See more on eBay.

After the market close, Internet search giant Google Inc. /quotes/comstock/15*!goog/quotes/nls/goog (GOOG 627.25, -4.50, -0.71%)  is due to report fourth-quarter earnings.

China’s fourth-quarter gross domestic product rose a stronger-than-expected 9.8% year over year, reinforcing fears that Beijing will move to further tighten monetary policy in an effort to cap inflationary pressure. Read more about China’s data.

Shanghai led Asian stock markets lower Thursday on the heels of the data. European equities also fell, with mining, energy and auto stocks under pressure.

Commodity prices start to hurt

Rising commodity prices might well reflect growing global demand as the recovery gets under way. But inflation in emerging markets is forcing central banks to slam on the brakes, while, in the developed world, it's acting like a tax on consumers.

“The focus is currently squarely on inflationary pressures in China, and while consumer prices did decelerate somewhat in December, the growth in economic activity suggests that the country will do more to hinder the economy from overheating,” said Saxo Bank equity analyst Peter Garnry. “That means more interest-rate hikes and reserve-requirement increases this year.”

China reported that consumer inflation hit 4.6% year on year in December, slightly below forecasts.

U.S. equities declined Wednesday in the wake of disappointing revenue figures from Goldman Sachs Group Inc. /quotes/comstock/13*!gs/quotes/nls/gs (GS 165.46, -1.03, -0.62%)  and a weaker-than-expected earnings forecast from credit-card firm American Express Co. /quotes/comstock/13*!axp/quotes/nls/axp (AXP 45.01, -0.23, -0.51%) /quotes/comstock/13*!axp/quotes/nls/axp (AXP 45.01, -0.23, -0.51%) . See Market Snapshot from Wednesday.

/quotes/comstock/13*!axp/quotes/nls/axp (AXP 45.01, -0.23, -0.51%) /quotes/comstock/13*!axp/quotes/nls/axp (AXP 45.01, -0.23, -0.51%) The Dow Jones Industrial Average /quotes/comstock/10w!i:dji/delayed (DJIA 11,782, -43.17, -0.37%)  fell 12.64 points to close at 11,825.29 Wednesday. On Tuesday, the index closed at its highest level since June 2008.

Barbara Kollmeyer is an editor for MarketWatch in Madrid. Kate Gibson is a reporter for MarketWatch, based in New York.

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NYSE Arca Morning Update for Thursday, Jan 20, 2011 :


Stock Wednesday's Close Current Price Pct Change Current NYSE ARCA Vol
FFIV $138.82 $109.96 (20.8%) 200,514
TSN $16.83 $13.60 (19.2%) 1,500


Stock $ Volume Price PctChg | Stock Share Vol Price PctChg
SPY $96,721,698 $127.83 ( 0.3%) | C 3,579,435 $4.75 ( 0.1%)
GLD $27,119,924 $132.37 ( 1.0%) | FITB 1,564,117 $14.16 ( 3.1%)
FFIV $22,171,639 $109.96 (20.8%) | SPY 755,975 $127.83 ( 0.3%)
FITB $21,998,521 $14.16 ( 3.1%) | WEN 481,119 $4.70 4.9%
C $16,978,912 $4.75 ( 0.1%) | BAC 449,173 $14.30 ( 0.6%)
AAPL $16,062,724 $337.17 ( 0.5%) | MS 311,627 $28.13 1.4%
FCX $12,083,488 $112.32 ( 2.4%) | GLD 204,640 $132.37 ( 1.0%)
QQQQ $11,380,154 $56.21 ( 0.5%) | QQQQ 202,332 $56.21 ( 0.5%)
RIO $11,339,045 $68.12 ( 2.9%) | FFIV 200,514 $109.96 (20.8%)
MS $8,787,270 $28.13 1.4% | SLV 186,976 $27.61 ( 1.6%)

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Consolidated close price is the last print (excluding prints with trade
conditions) prior to 4PM ET.

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NYSE Euronext and its affiliates ("NYSE Arca") are not soliciting any action based upon it.
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Debt Continues To Accumulate As The Economic Climate Worsens

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When you stop and think about it, the Fed’s main instrument of monetary policy, the manipulation of interest rates has been lost to it. That is two years with the same rate. What has become very obvious is that an official rise in rates would create all kinds of havoc. The same is true for Europe. This past week the ECB held rates steady as well. South Korea raised their rates. As the TV camera panned downtown Seoul we observed a large sign that said buy Korean â€" so much for free trade.

2011 will witness the US financial structure and economy under severe pressure again, especially in the second half of the year. The US is forced with major refinancing and the issuance of new debt in the trillions, the municipal problems will come to fore after July 1st, not that they haven’t already with an illiquid market and Europe will be embroiled in keeping six of its EU-euro zone members from insolvency. It is going to be some year. Germany is comical. On one day the public says no more bailouts beyond the $1 trillion already committed. The next day Mrs. Merkel says Germany will save the euro. The euro can only be saved with a commitment of $3 to $5 trillion. That means an additional major financial commitment. We do not believe the solvent nations of Germany, France, Holland and Austria will commit for that. If they do they will go bankrupt.

In coming up with trillions of dollars to purchase Treasuries and agency bonds they’ll monetize and the US will have much higher inflation.

The states and municipalities are essentially on their own. It is now very difficult to sell bonds, if possible at all. They’ll be no more Build America bonds and the federal government refuses to make additional loans, as Meredith Whitney has said more than 100 municipalities could stop paying interest on their bonds and approach insolvency.

These three events alone could bring down the financial structure of the Western world and perhaps the entire world. It could lead to no sovereign bond bids, as it already has for municipals. The deliberate effort to interconnect nations, regions and states could expedite such failure. It is not any longer possible to deal with problems in isolation. One thing affects another.

The denigration of the American middle class began three years ago and it is still just getting underway and the public hasn’t a clue as to what is happening to them and what is going to happen to them. An indication of that is this past Christmas spending. At the upper end sales rose 9% and at the lower end only 1.5%. There is no question that austerity is starting to take hold in America’s lower and middle class. What we see over the horizon is going to take its toll on U.S. GDP. Even with $2.5 trillion in net spending GDP growth in 2011 will be 2% to 2-1/4% down from 3% to 3-1/4% yoy. In addition what the government finally has to admit is that CPI and unemployment figures are totally bogus and GDP figures are substantially lower than stated. We can promise you in time this will all come out in the wash. We can also throw in that debt to GDP is not 80%, but 115% on a par with other failing nations. The financial and economic profile of the US has been altered by fre e trade, globalization, offshoring and outsourcing and without tariffs on goods and services prosperity can never return to what was once the greatest nation on earth. Listen Americans, if you want to live in a third world nation that is fine. If you don’t, force your representatives and senators to pass such legislation. If you are not successful and when all is said and done revolution will be your only choice, unless you like living on your knees.

If you refer to the last issue and the three problems facing Europe and the US next year you will also be facing an increase in global yields and much higher inflation. That is with official rates at zero and no exit strategy and perhaps QE3, as we predicted last May. Needless to say, these events are all going to be painful and destabilizing. These financial events are bound to have their social costs and that could cause severe changes in stock market performance. 2011 is going to be a very nasty year.

The handwriting is on the wall, but in Washington, neither party, is listening and they are accumulating debt by not altering their borrowing and spending habits.

Not only that, we have our states acting like Greece and Ireland, either of which could break out in full scale revolution at any time. The papering over of problems and the issuance of Build America bonds are history. Wait until the derivative bomb explodes. When will those who run Wall Street have another flash crash? Who will they blame it on this time? Who cares â€" the SEC doesn’t care and neither does the CFTC. At the same time we have an advancing credit bubble. QE3 could well cause hyperinflation, and QE3 will come. What a terrible web they weave.

Problems are not confined to the US. Ireland, England and Greece are on the hot spot. The debt Ireland has guaranteed is colossal. It is 30% of GDP. It bails out not only Irish banks, but British, French and German banks as well. What a sellout. It is impossible to take 40% of tax revenues to pay down outrageous debt at 6% interest. Needless to say this is unsustainable and the result will show up in spring elections. We expect the new government to renege on the deal. This is worse than WWI German reparations. They must believe the Irish are stupid. Do not forget it was the Irish that saved civilization and all is not lost until the last nail is hammered into the coffin. Europe has no contingency plan and the Irish exiting the euro zone and perhaps the EU could be the start of an exodus. Very simply the arrangement, a Bilderberg sellout, will be history. The $100 billion owed to US banks and $200 billion owed to the Royal family will not be repaid. That means the CIA and MI6 will again infiltrate Ireland and try to turn it upside down. As we said, if Ireland refuses to be destroyed then all the other nations in trouble will do the same thing. It will all come just be patient.

The subprime ALT-A crisis is still with us only bigger than ever. Our Fed Chairman tells us it was an isolated incident. We wonder what he has been smoking, or is he just a compulsive liar. It is the policy of such people to leave the public to their own devices and take care of the financial sector.

We predicted months ago that the bond market was a bubble, but we didn’t know when it would begin to be over. The beginning has begun. We have just seen the biggest bond fund outflow in almost 30 years. In December that was accompanied by a massive outflow from stock funds. For stocks that was the 33rd week in a row. This all was accompanied by an almost $10 billion outflow in municipal bonds. Bond mutual funds saw the biggest outflow in two years. You ask, with all the funds flowing out of bond and stock funds, how do these sectors hold up? The answer is your friendly government does not want you to know what they are up too. Even at PIMCO bond investors pulled out $1.9 billion. As more and more scandals break, on insider trading and market manipulation by government, less and less investors want to participate in markets. There is certainly nothing free or fair about them. Bonds are under pressure because of profligate Fed spending known as QE2 and the pledge to spend $900 billion. It is known as monetization and it is very inflationary. When the Fed continues to buy 75% of US Treasuries, government has a problem.

We received a taste of the future in the recent passage of the $862 billion pork tax bill, or stimulus 2. Anything goes to keep the system from collapsing from both parties. The new Republican majority in the House has said no increased spending without compensating cuts in other budget items. We do not think the House will cut military spending of $700 billion. If any cuts come they will probably come from Medicare and Social Security. The retired and baby boomers won’t like that one bit. Perhaps in two years they will see the wisdom of removing incumbents from office.

As municipalities approach failure and as the Fed keeps a broken system alive, Europe does everything possible to keep the euro zone and the EU from collapsing. Due to ECB and Chinese intervention, Portugal, Spain and Greece are hanging on, but barely. As the ECB tries to gain time Mr. Trichet attempts to garner an even bigger rescue package, one we believe could bankrupt solvent members of the euro zone, if not the EU. While this transpires just Portugal, Belgium, Spain and Italy have to raise $800 billion this year, the bulk of it in the first two quarters and the lions share in the first quarter. Greece and Ireland kick the total up to $1 trillion. In addition, Belgium has political problems and has had them for some time. It seems citizens want to split the country in two, which is only natural. The two groups have little in common. We know we have spent plenty of time there. As we said before the year is out these three problems will converge and the result will be ex tremely disruptive.

We now have a Federal Reserve that controls a financial monopoly over the American people, as a result of recent legislation. In this process more power is also being given to the IMF, the BIS and the WTO. Power is being taken away from sovereign countries and put into the hands of people who want world government. If you do not think that is real, recall the comments of former US Secretary of the Treasury, Mr. Paulson. If the financial sector wasn’t rescued Americans would wake up to Martial law. In other words, you either go along with our program or we will destroy you and the system.

Then, of course, there is the ongoing threat of terrorism, which is married to all of the above. Government is currently preparing to protect us. There is cyber security in the works to make sure terrorists do not get us or our wealth and threat is why they must know where everyone’s assets are. They have to check every wire transfer to make sure you are not a terrorist or a money launderer to protect you. Now everything everyone does is subject to scrutiny. Americans are to be treated like common criminals by their government. As a result, America’s land of individual freedom is dead, unless there are major government changes.

Every event is staged with several special purposes. The main goal is to bring out dissidents and to further advance world government.

In all likelihood capitalism in its present form won’t survive. Credit and debt are in such an advanced stage that even zero interest rates cannot turn the economy around. Worse yet, it gets more difficult to sell debt. The underlying problem is just too much debt to overcome. The departure on August 15, 1971 from the gold standard sealed the fate of the dollar. It allowed endless creation of money and credit that became overwhelming debt. Due to this profligacy in dollar issuance, and similar experience in all other currencies, the dollar fell close to 30% versus the price of gold this past year. This is gold replacing the dollar and other currencies, as the world reserve currency. This is 11 straight years of gain in a classic flight to quality. The elitists know their game to suppress gold and silver has been lost. What they now must do is have a meeting of all nations, revalue and devalue currencies, have a multilateral default and re-back the dollar with gold or hav e an international trading index of currencies that will have to be gold backed. That means currencies will be backed by gold at a much higher gold price, perhaps $6,000 an ounce or higher.

Over the past three years investors in general have reduced risk and consumers have avoided accumulating more debt. These responses to inflationary depression are normal, but they are opposite, what the Fed needs for a recovery. The upper middle class and the rich are expending buying, but the poor and middle class are not. The miracle of credit and debt is coming to an end, and the parasites are looting the system for a final time. It isn’t going to do them much good because we know what they are up too and who they are. This time there will be legal retribution, they can count on that. Forty years of looting will soon be over.

In the late 1990s the dotcom boom in the stock market could have easily been taken under control by raising margin requirements from 50% to 60%, but the essence of what the Fed and Sir Alan Greenspan were doing was to force the markets higher to bring in more mega-profits for Wall Street and banking.

The same thing happened during the real estate boom. Lenders, the Fed and regulators deliberately created a bubble. Fraud was rampant as rating agencies colluded with bond syndicators of mortgages. Anyone could buy a house even if they couldn’t qualify. Bonds were rated Triple-A when they in fact were Triple-B, the difference between a 10 and a 4. These criminal acts brought the housing boom an additional lease on life. No criminal or civil actions were ever brought against these fraudsters which tells us the Fed had to have had sub-rosa deals with the buyers of these toxic bonds, especially in Europe, which absorbed 60% of the toxic waste. This is probably why the Fed had to be forced to reveal how much money had been lent to European lenders and what the collateralization for the loans were. Trillions of dollars were used to bail out the buyers of toxic MBS-CDO bonds. We believe this was the deal from the very beginning. If you correlate the funding by the Fed you will find most of it went to banks that absorbed the MBS.

The tip-off is simply that no buyer ever initiated even civil action. Thus, you can see what the game was all about. Needless to say, no one will ever go to jail for the fraud and the American taxpayer will pay for the losses.

In the early 1960s we fortunately were able to see what lie ahead for the dollar and the monetary world. In 1964 we saw inflation start to spin out of control. That was the year the US removed silver from its coins and began the trek to abandonment of the dollar on August 15, 1971 and the inflationary blow off of 1980. The actions that began in the early 1960s led us to where we are today. The system has been looted. Americans and Europeans are being traumatized by a failing system, which has been engineered to bring about world government and the total enslavement of mankind. Over all those years, more than 50 years we have advocated that the system was indeed meant to collapse and that the only safe place to be, which is for financial salvation, was to be in gold and silver. It has certainly turned out that way.

This is why it is so important for writers, economists and analysts to understand why we have the problems, why they were caused and who caused them. All the answers lie in economic, financial, social and political history. What is being done has been tried many times in the past, but always unsuccessfully. You would think these planners would learn, but they haven’t. The reach for ultimate power is simply too attractive and enticing. Thus, for over 50 years gold has disappeared from government hoards, only to end up in private hands that understand that the ultimate money is gold. Gold is power and he who has the gold makes the rules. If you cannot grasp this small piece of history you will never understand the course we are on and how we got there. Ignorant of history, overall, Americans and Europeans probably as individuals probably only hold less than 5% of all gold in existence. If we include peoples of other nations and elitists, that figure catapults to probably 6 0% to 70%. As you can see people in the Western world do not get it and if that situation does not change they’ll lose all of their wealth and purchasing power. No matter what governments and those who control them do the fact remains that gold and at times silver, are the ultimate money. People are going to learn this lesson soon and you do not want to be one of them.

Last week the Dow gained 1%, S&P 1.7%, the small cap Russell 2000 2.5% and the Nasdaq 100 rose 2.1%. Banks rose 3.4%, broker/dealers 2.6%, cyclicals 0.8%; transports 1%, as consumers fell 0.2%. Utilities gained 0.4%; high tech 2.09%; semis 6.1%; Internets 1.7% and biotechs 1.2%. Gold bullion fell $8.00, the HUI fell 3.0% and the USDX fell 2.5% to 79.07.

The 2-year Treasury fell 1 bps to 0.54%, the 10-year notes were unchanged at 3.39% and the 10-year German bund rose 16 bps to 3.03%.

Freddie Mac 30-year fixed rate mortgages were down 6 bps to 4.71%, the 15’s were down 5 bps to 4.08%, the one-year ARMs fell 1 bps to 3.23% and the 30-year jumbos rose 6 bps to 5.61%.

Fed credit jumped $21.6 billion to a record $2.432 trillion. Fed foreign holdings of Treasury and Agency debt rose $6.2 billion to $3.350 trillion. Custody holdings for foreign central banks rose $400 billion yoy, or 13.5%.M2 narrow money dropped $23.1 billion and yoy it grew 4.0%. Total money market fund assets fell $2 billion to $2.796 trillion. Total commercial paper outstanding fell $29.7 billion to $936 billion.


Seymour Hersh unleashed

DOHA, Qatar David Remnick, call your office.

In a speech billed as a discussion of the Bush and Obama eras, New Yorker journalist Seymour Hersh delivered a rambling, conspiracy-laden diatribe here Monday expressing his disappointment with President Barack Obama and his dissatisfaction with the direction of U.S. foreign policy.

"Just when we needed an angry black man," he began, his arm perched jauntily on the podium, "we didn't get one."

It quickly went downhill from there.

Hersh, whose exposés of gross abuses by members of the U.S. military in Vietnam and Iraq have earned him worldwide fame and high journalistic honors, said he was writing a book on what he called the "Cheney-Bush years" and saw little difference between that period and the Obama administration.

He said that he was keeping a "checklist" of aggressive U.S. policies that remained in place, including torture and "rendition" of terrorist suspects to allied countries, which he alleged was ongoing.

He also charged that U.S. foreign policy had been hijacked by a cabal of neoconservative "crusaders" in the former vice president's office and now in the special operations community.

"What I'm really talking about is how eight or nine neoconservative, radicals if you will, overthrew the American government. Took it over," he said of his forthcoming book. "It's not only that the neocons took it over but how easily they did it how Congress disappeared, how the press became part of it, how the public acquiesced."

Hersh then brought up the widespread looting that took place in Baghdad after the fall of Saddam Hussein in 2003. In the Cheney shop, the attitude was, ‘What's this? What are they all worried about, the politicians and the press, they're all worried about some looting? Don't they get it? We're gonna change mosques into cathedrals. And when we get all the oil, nobody's gonna give a damn.

"That's the attitude," he continued. "We're gonna change mosques into cathedrals. That's an attitude that pervades, I'm here to say, a large percentage of the Joint Special Operations Command."

He then alleged that Gen. Stanley McChrystal, who headed JSOC before briefly becoming the top U.S. commander in Afghanistan, and his successor, Vice Adm. William McRaven, as well as many within JSOC, "are all members of, or at least supporters of, Knights of Malta."

Hersh may have been referring to the Sovereign Order of Malta, a Roman Catholic organization commited to "defence of the Faith and assistance to the poor and the suffering," according to its website.

"Many of them are members of Opus Dei," Hersh continued. "They do see what they're doing and this is not an atypical attitude among some military it's a crusade, literally. They see themselves as the protectors of the Christians. They're protecting them from the Muslims [as in] the 13th century. And this is their function."

"They have little insignias, these coins they pass among each other, which are crusader coins," he continued. "They have insignia that reflect the whole notion that this is a culture war. Right now, there’s a tremendous, tremendous amount of anti-Muslim feeling in the military community.”

Hersh relayed that he had recently spoken with "a man in the intelligence community. somebody in the joint special operations business" about the downfall of Zine el-Abidine Ben Ali in Tunisia. "He said, ‘Oh my God, he was such a good ally.'"

"Tunisia's going to change the game," Hersh added later. "It's going to scare the hell out of a lot of people." Moving to Pakistan, where Hersh noted he had been friendly with Benazir Bhutto, the journalist told of a dinner meeting with Asif Ali Zardari, the late prime minister’s husband, in which Hersh said the Pakistani president was brutally disdainful of his own people.

Hersh described a trip he made to Swat, where the Pakistani military had just dislodged Taliban insurgents who had taken over the scenic valley, a traditional vacation area for the urban middle class. Hersh said he asked Zardari about the tent cities he saw along the road, where people were living in harsh, unsanitary conditions.

“Well, those people there in Swat, that’s what they deserve,” the Pakistani president replied, according to Hersh. Asked why, Hersh said Zardari responded, “Because they supported the Taliban.” (Note: Hersh's conversation is not recounted in his 2009 New Yorker article on Pakistan's nuclear weapons, presumably because it coudn't be verified.)

The veteran journalist also alleged that the CIA station chief in Islamabad, who was recently recalled after his name surfaced in Pakistani court documents and in the lively Pakistani press, had actually been fired for disputing the plans of Gen. David Petraeus, who took over the Afghan war last summer after General McChrystal was summarily dismissed.

"When Petraeus issued a very optimistic report about the war in December that he gave to the president," Hersh said, the station chief "just declared it was bankrupt... internally. He just said ‘This is completely wrongheaded. The policy's wrongheaded.' Off he goes. Out he goes."

"I've given up being disillusioned about the CIA," Hersh said. "They're trained to lie, period. They will lie to their president, they will lie certainly to the Congress, and they will lie to the American people. That's all there is to it."

Hersh was speaking on the invitation of Georgetown University's School of Foreign Service, which operates a branch campus in Qatar.


Virginia Gov. Bob McDonnell says he can't support legislation to consider adopting an alternative currency to the dollar should the federal reserve system collapse. During a Tuesday morning appearance on radio station WNIS, McDonnell says the proposal offered by Republican Del. Bob Marshall violates the U.S. Constitution. The Prince William delegate says Virginia should mint its own coins and wants the General Assembly to consider the proposal during this year's session. The session begins Wednesday.

The governor says currency is the responsibility of the federal government, not the states. McDonnell says proposals like Marshall's arise out of fear about frightening levels of debt the federal government has taken on.

The U.S. sovereign debt has first exceeded 14 trillion dollars.

Congress will have to raise the legal limit of debt or reduce spending to respect the legal limit established. Either way, lawmakers on Capitol Hill face a tough battle.

That level of debt represents a bill of 45 thousand 300 dollars for each of the country's inhabitants.

Both sides have begun to blame for the deteriorating situation and the possibility of having some government functions and to avoid non-payment of international debt obligations.

Bills to increase the debt ceiling are among the most unpopular Congress faces, but so far inevitably ended up being approved.

However, this time could be different despite signs that the rhetoric subsided after the killing of Arizona.

Treasury Secretary Timothy Geithner said he did not approve the debt limit increase would be "a catastrophe" that could rival the financial crisis of 2008-2009.

The Republicans, encouraged by his victory in the November elections, these results argue that the public is wary of big government and the budget deficit, and that it is time to end the continued indebtedness.

Defeating greater debt is a priority of right-wing movement Tea Party and other conservative groups.

So far, the new Republican majority has shown its readiness to reduce this year's U.S. $100 billion national budget. Approved the change of standards sponsored by the chairman of the House of Representatives John Boehner would make it easier to prevent an increase the debt limit.

In the two-year presidency of Barack Obama's national debt nearly doubled. Almost half of sovereign debt since the presidency of George Washington was accumulated in the past six years, from 7.6 billion in January 2005 at the start of President George W. Bush his second term with 10.6 billion the day he arrived at the White House Obama and 14.02 million today.


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