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To: Secret_Agent_Man who wrote (3126)11/23/2011 12:11:36 AM
From: LTK007
   of 3244
 
This my post to you of residential thread before i remembered i was banned for damning to hell Sandusky and defending Paterno--but as usual i requested to be banned.:)
i am a loner anyway:) Here is article to just give example that somehow this rot at the core of our whole system is surfacing in bits----now, surprise surprise, insiders are working hand in hand with members of the Fed, which translate the system is full-bore criminal to the very tippy stop---hee, the whole Fed should be in prison rather beig the most powerful financial scum ever to rule the global financial world.


Fed Tips Aid InvestorsA group of investors and analysts have access to top Fed officials who give them a chance at early clues to the central bank's next policy moves, according to interviews and documents obtained by the Journal




Now text, charts, with usual WSJ policy of given the liars free base to protest their innocence.

i repeat my Max's law all utterly corrupt systems eventually fall, USSR collapsed, so will U.S.---in time--me being 70, may not see it from this side---but it is a given. Time to invest in high tech-guillotine laser blades companies, are there any?(VBG:)






By SUSAN PULLIAMHours after an Aug. 15 meeting with Federal Reserve Chairman Ben Bernanke in his office, Nancy Lazar made a hasty call to investor clients: The Fed was dusting off an obscure 1960s-era strategy known as Operation Twist.







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Getty ImagesMeetings held by Ben Bernanke, left, and William Dudley




The news pointed to a boom in long-term bonds.

It was a good call. Over the next five weeks, prices on 10-year Treasury bonds soared, offering double-digit returns in an otherwise dismal year.

By the time the Fed announced its $400 billion Operation Twist on Sept. 21, the window for quick profits had all but slammed shut.

Ms. Lazar is among a group of well-connected investors and analysts with access to top Federal Reserve officials who give them a chance at early clues to the central bank's next policy moves, according to interviews and hundreds of pages of documents obtained by The Wall Street Journal through open records searches. Ms. Lazar, an economist with International Strategy & Investment Group Inc., wouldn't comment for this article.

The access is part of a push by hedge funds and other traders to get more information about the inner workings of government. Developments in Washington have become more important after the financial crisis in 2008 spawned new regulations and a stronger hand by lawmakers in businesses.



Capital Gains Hedge Funds Pay Top Dollar for Washington Intelligence (10/4/2011)Read More New Supply of Former Fed Officials Finds High Demand on Wall Street Higher 'Stress' for Big Banks

The words and actions of the Federal Reserve, in particular, have an enormous impact on markets, prompting the creation of new guidelines at the central bank to combat the perception of favoritism.

Conversations are important to both sides, making it difficult for the Fed to completely close its doors to traders and analysts. Fed officials want to know how investors might respond to changes in monetary policy and to avoid surprising markets. Investors, meanwhile, reveal developments that might pose unseen dangers to the U.S. economy, say people familiar with the matter.

Such talks are perfectly legal but create a delicate dance for the Fed, which tries to sate its need for information to help guide monetary policy without giving Wall Street an unfair advantage over Main Street.

Mr. Bernanke discusses only matters already public, a spokeswoman said. But hedge fund managers and Wall Street executives who meet regularly with him and other Fed officials—both in his office and through advisory committees—say they get valuable insights during the face-to-face talks.

"It's like an inquisition, they have a topic," said Laurence Fink, chief executive of investment-management giant BlackRock Inc. "By the questions they ask, by definition, you know what's on their mind."







Mr. Fink had phone calls and meetings with Fed officials ten times over the past two-and-a-half years, according to their calendars and open records requests. He said most of the conversations related to BlackRock's role as a paid adviser to the New York Fed about complex financial structures formed during the financial crisis.

New York Federal Reserve Bank President William Dudley also meets regularly with investors, both in his office with individuals and in committee groups. The New York Fed, one of 12 regional banks that constitute the Federal Reserve System, has the strongest ties to investors because it conducts the Fed's bond-market transactions.

Mr. Dudley, who also is vice chairman of the Federal Open Market Committee, which sets the nation's monetary policy, acknowledged the discussions could give the misperception that investors with access to Fed officials have an advantage.

"We take great care to frame subjects and questions in a neutral manner that does not provide any insight into our own thinking and we are careful to keep in mind that their comments may sometimes reflect their firms' own interests," Mr. Dudley said in a statement.

The meetings are "particularly important during periods of market stress," he said, and help him get a "broad range of perspectives on the markets and the outlook for the economy."







View Interactive







Over the past two-and-a-half years, Mr. Dudley has had dozens of private meetings, according to his calendar, which lists SAC Capital Advisors, Citadel Investment Group, Duquesne Capital Management, and Tudor Investments, among others. Lloyd Blankfein, chief of Goldman Sachs Group Inc., and Mr. Fink, of BlackRock, also had private meetings, according to Mr. Dudley's calendar.

These investors employ strategies tied to interest-rate policy and economic trends—making snippets of information as subtle as head nods and body language extremely valuable.

There are central bank rules that bar officials from discussing confidential Fed actions not yet public. But gleaning clues about the thinking of Fed officials during private talks can be as valuable to investors making bets on the direction of the economy.

Worries about Fed access surfaced a year ago. On Aug. 18, 2010, former Fed governor Laurence Meyer, who runs a research service predicting and analyzing Fed actions, told clients in a note the central bank's "bazooka is loaded" to buy bonds to stimulate the economy.

The note described how the Fed's "doves," members inclined to ease monetary policy, had said the Fed couldn't "sit on its hands," according to Mr. Meyer's account. An Aug. 20 note included some specific information about the Fed's balance sheet.

A week later, Mr. Bernanke said during a speech in Jackson Hole, Wyo., that "policy options are available to provide additional stimulus" to the economy. Stocks rose on the news, which by then had given Mr. Meyer's clients plenty of time to profit.







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From Mr. Dudley's calendar.




The Fed announced its move in November—a second, so-called quantitative easing plan, known as QE2, that entailed buying $600 billion worth of long-term Treasurys.

At its Jan. 25, 2011, meeting, Fed members weighed the need for communications as part of the "monetary policy transmission process" against the "fair and equal access" that should be offered to the public, according to minutes of the meeting. Fed members asked a subcommittee to consider better guidance to Fed members on communicating with investors.

A new set of guidelines was approved in June. It said Fed members should "to the fullest extent possible" avoid meeting privately with "any individual, firm, or organization who could profit financially from acquiring" information from the Fed "unless those views have already been expressed in their public communications." In October, the New York Fed stopped providing early access of its economic forecasts to Wall Street analysts serving on a Fed advisory committee.

The new rules didn't keep Ms. Lazar and others from alerting clients to Operation Twist. Richard Tang, bond-trading chief at Royal Bank of Scotland and a member of the Treasury Borrowing Advisory Committee, made a similar forecast about a week before Ms. Lazar. Through his committee membership, Mr. Tang meets several times a year with Treasury Department and Fed officials, including Mr. Bernanke.

Jan Hatzius, chief economist at Goldman Sachs, was also ahead of the pack, telling clients on Aug. 9 that he believed another round of bond buying by the Fed was coming. Mr. Hatzius is a regular guest of Mr. Bernanke and he meets privately with Mr. Dudley—his former boss at Goldman—according to calendar records.







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From Mr. Bernanke's calendar.




Mr. Bernanke in a widely anticipated Aug. 26 speech in Jackson Hole, Wyo., left open the possibility of action to boost the economy but didn't say what the Fed might do or when.

Rumors of Operation Twist spread, working in the Fed's favor. The possibility of the central bank buying long-term Treasurys, along with troubles in the world economy, spurred investors to buy them first. The subsequent rally pushed up prices and dropped yields, which move in the opposite direction. Investors, in effect, helped Fed efforts to lower borrowing costs.

"Some may claim for self-interested reasons to have special access to Fed thinking," a Fed spokesman said. "You should take all such claims with a heavy dose of skepticism. Fed thinking is the source of frequent and extensive speculation, much of which, even by prominent 'Fed watchers', is often and substantively wrong."

Until the mid-1990s, the Fed didn't even announce policy changes, which were signaled only by the manner and time of day that Fed traders intervened in money markets.

In the years since, the central bank instituted policy announcements, along with statements to explain decisions under Mr. Bernanke's predecessor, Alan Greenspan. Mr. Bernanke initiated news conferences this year, which Mr. Greenspan never did.

When Treasury Secretary Timothy Geithner was president of the New York Fed beginning in 2003, he worried the Fed wasn't close enough to big investors, especially financial firms like hedge funds that operated outside of the regulated banking industry. He set up a new staff position to coordinate private meetings with hedge fund managers and other Wall Street power brokers.

After the financial crisis, Mr. Dudley, who followed Mr. Geithner as New York Fed president in January 2009, went further. Concerned about the growing role of hedge funds and investment banks in a so-called shadow banking system, he established the Investor Advisory Committee on Financial Markets to open a pipeline into the thinking of big investors.

The relationship also drew these investors closer to Fed thinking. As winter turned to spring this year, discussions centered on the Fed's fading optimism and gave an early view of where the central bank was heading, according to agendas and minutes from committee meetings obtained through open records requests by the Journal.

The pace of the U.S. economic recovery picked up speed at the end of 2010, and the stock market gained nearly 10% in the first four months of 2011. A run-up in commodity prices had raised inflation fears, triggering talk about an exit from the Fed's support of historically low rates.

But an early sign of trouble came May 10 to members of the New York Fed's Economic Advisory Panel, who meet twice a year with Mr. Dudley. They received a 37-page economic forecast by staff economists at the New York Fed that concluded, "Clearly the economy faces some new headwinds that were not present in early November." The document included data and charts detailing the slowdown, according to a copy obtained in an open records search.

The message was clear. The U.S. economy, which weeks earlier looked like it was recovering, appeared to be slowing, according to New York Fed economists. By contrast, Mr. Dudley was more positive at a May 6 news conference, emphasizing the view that recent weakness in the economy wouldn't last.

For big investors, the accuracy of the New York Fed prediction was less important than the view it represented: If the broader Fed committee also anticipated a slowdown rather than growth, it would lean toward keeping interest rates low or take action to stimulate the economy, rather than raising rates to fend off inflation.

On May 25, the Investor Advisory Committee on Financial Markets held a conference call to discuss the agenda of its June 9 meeting. Talk shifted from the Fed's exit strategy, a main topic at its December meeting, to worries about the economy.

In a June 5 note to clients, Mr. Hatzius expressed renewed confidence in his long-standing view the Fed would keep rates near zero until 2013. "In fact," he wrote, "organic growth seems to have slowed anew to a below trend pace in the first half of 2011."

During the summer, investors grew more nervous over the softening economy, building stress in Europe and the downgrade of U.S. government debt.

Stocks were reeling after the Fed issued its Aug. 9 post-meeting statement with news that indeed it wouldn't raise rates until mid-2013, a position based on a gloomy view of the U.S. economy. At one point, the Dow Jones Industrial Average sank 205 points, about 2%.

The last paragraph of the statement said the Fed was ready to employ "the range of policy tools available." Some analysts correctly predicted the line signaled a new round of bond purchases, a dramatic turnaround from the conventional view only weeks earlier. As the more sanguine interpretation spread, stocks soared, closing up 4% for the day.

Among those who got the word out was Mr. Tang, who told clients that afternoon the Fed would purchase longer-term bonds, according to people familiar with the matter. The strategy, now known as Operation Twist, would shift a portion of the Fed's portfolio from short-term bonds into long-term bonds.

"Can't afford to miss this move," he told clients in an Aug. 17 email.

Write toSusan Pulliam at susan.pulliam@wsj.com





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To: LTK007 who wrote (3133)11/23/2011 9:02:34 AM
From: Secret_Agent_Man
   of 3244
 
one way ticket to total failure

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From: LTK00711/23/2011 11:14:29 AM
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My SPX500 daily chart- with NO new annotations

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From: LTK00711/23/2011 11:22:01 AM
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Chart ThompsoCreek Molypdenum TC

.

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From: LTK00711/25/2011 1:32:14 AM
   of 3244
 
IMF Warns Japan on Threat of DebtMarket Concerns About Fiscal Sustainability Could Trigger a Jump in Bond Yields

By TAKASHI NAKAMICHITOKYO—The International Monetary Fund warned in a new report that market concerns over fiscal sustainability could trigger a "sudden spike" in Japanese government bond yields that could quickly render the nation's debt unsustainable as well as shake the global economy.

The fund's Japan Sustainability Report, released on Wednesday, was a signal to Tokyo policy makers that the international community is already worried about fallouts from Japan's potential fiscal problems, after debt problems in some European economies evolved into a Continent-wide crisis.

Japan's public liabilities amount to roughly twice annual economic output—a ratio worse than that of any other industrialized economy, including turmoil-hit Spain and Italy. The Japanese government has been slow to move amid political reluctance to lift taxes, particularly after the March 11 earthquake.







"Should JGB yields rise from current levels, Japanese debt could quickly become unsustainable," the IMF said in the report.

"Recent events in other advanced economies have underscored how quickly market sentiment toward sovereigns with unsustainable fiscal imbalances can shift," the fund said.

Higher government bond yields "could result in a withdrawal of liquidity from global capital markets, disrupt external positions and, through contagion, put upward pressure on sovereign-bond yields elsewhere," the fund said.

Senior Vice Finance Minister Yukihisa Fujita, who oversees budget making with Finance Minister Jun Azumi, said at a news conference on Thursday that he hadn't read the IMF report, and declined to assess what he referred to as a "hypothesis" about Japan's finances.



More Heard: Rating Japan's Latest Problem

The paper was prepared by the IMF upon the request of the Group of 20 industrialized and developing nations so the members could use it for their debate over the issue of global imbalances.

Japan's private net international investment amounts to $1.5 trillion, which mostly consists of investment by Japanese banks, life insurers and corporate pension funds, the fund said.

"Capital losses following a spike in JGB yields could trigger rapid deleveraging from positions abroad" by those players, it said.

If Japanese banks cut their foreign credit lines, G-20 economies, "notably the U.K. and Korea, would be among the most exposed to the loss in funding," the IMF said.

"Given evidence from past bouts of global turmoil, abrupt adjustments in exchange rates of major economies are likely to follow," it added.

In contrast to some European countries, Japan's sovereign debt is 95%-owned by domestic investors. That has helped Japan keep its bonds stable and rates low despite the nation's deteriorating fiscal condition.

Japan's debt market has even been bullish recently as European debt woes and a cloudy global economic outlook drives investors to buy Japanese government bonds.

But the IMF said, "Market concerns about fiscal sustainability could result in a sudden spike in the risk premiums on JGBs, without a contemporaneous increase in private demand."

"Once confidence in sustainability erodes," it said, "authorities could face an adverse feedback loop between rising yields, falling market confidence, a more vulnerable financial system, diminishing fiscal policy space and a contracting real economy."

In 2010, the Japanese government's interest payments were as large as 2% of gross domestic product, the IMF estimated. A one-percentage-point increase in average yields could boost the interest bill by an additional 2% or more of GDP, the IMF said.

For now, Japan plans to double its 5% sales tax by the middle of this decade and halve its main budget deficit by March 2016. But the government has no detailed plans beyond that time, such as steps to lower the debt-GDP ratio, the fund said.

A "more ambitious strategy is required to maintain confidence in public finances," it added.

The IMF indicated a preference to see the tax rate raised to 15% "over several years." There is "little room" to cut spending outside social security programs after years of belt-tightening, it said.

Write toTakashi Nakamichi at takashi.nakamichi@dowjones.com

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From: LTK00711/25/2011 4:06:36 AM
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Options Dwindle for Euro Crisis


By STEPHEN FIDLERThe biggest question in Europe isn't what it was a few weeks ago. It is no longer just whether any of the 17 governments in the euro zone will default on its debts; increasingly it is whether the euro zone will survive in its current form at all.

On Thursday, it emerged that the European Central Bank is considering a dramatic extension of its longest loans to commercial banks, to stave off a potential collapse of the bloc's banking system.

Meanwhile, leaders of the Continent's three largest economies met and pledged to work toward the closer political and economic integration most analysts say is needed—but with no specifics, meaning the pace for such efforts still lags behind the market's demand.

Germany's failure to sell almost 40% of a €6 billion ($8 billion) bond issue at an auction Wednesday is, many analysts say, symptomatic of this new phase of the crisis, with investors beginning to question even the bloc's safest harbors.

Some experts think the poor auction result has been over-interpreted; they note that German yields remain at historic and healthy lows and that demand for them may momentarily be weakened by the recent flight to them from the increasingly risky bonds of their southern neighbors.

But on Thursday, concern over German bonds drove their yields up to near-convergence with the U.K.'s sovereign debt, which has no clear advantage beyond not being in euros. In recent weeks, borrowing costs for financially strong euro-zone governments such as the Netherlands and Finland have increased. Other high-rated European bonds—such as those for the European Financial Stability Facility—have struggled to find buyers.

If the first phase of the crisis saw investors fleeing from the periphery of the currency union to its core, the second has them fleeing the euro area altogether.







Enlarge Image










Associated PressGerman Chancellor Angela Merkel and France's President Nicolas Sarkozy gesture toward Italy's Prime Minister Mario Monti, during a news conference in Strasbourg, France, on Thursday.




"This looks like an issue that is wider than just Germany. We think it is about the market attempting to price a breakup of the euro," wrote analysts Stephane Deo and Matteo Cominetta of UBS Investment Research Thursday. Investors they visited this week in Asia are questioning the willingness of governments to keep the euro zone together, they report: "As a result investors may seek to disinvest from Europe."

Less than a month ago euro-zone leaders, with German Chancellor Angela Merkel in the vanguard, were forced to openly speculate on the exit of Greece from the euro zone—when Greece threatened a surprise referendum on it bailout terms. That opened up in public the possibility that the currency union might not be forever. But difficult and costly as the exit of Greece would be, market fears about a breakup have gone beyond that.



More Euro-Zone Leaders Pledge Closer Integration

"This is not a function of whether Greece may leave. It's whether Germany, France, Italy and Spain are going to have the same currency," says Andrew Balls, head of European portfolio management at Pimco, the investment management firm.

Bond investors bought French government bonds knowing they would face interest-rate risk: Unless they hedged, they would lose money if interest rates rose. But it's only recently that it has dawned that French bonds expose them to another type of risk that conservative investors try to avoid: credit risk, the prospect that they may not be paid back in full and on time.

The reason this emerges with France, and not the equally indebted U.K., is because of uncertainty about the role of the ECB.

The central bank is resisting taking on the explicit role of lender of last resort for euro zone governments. Ms. Merkel, accompanied by the leaders of France and Italy, reiterated her support for its stance Thursday.

The ECB says it isn't a choice—it and many legal experts believe it would go beyond its charter to routinely buy national debt. It justifies its limited bond-buying as necessary for smooth workings of its monetary policy. Its consideration Thursday of longer-term loans to banks comes under a similar heading.

But without the promise of a central bank stepping in as a last resort, a government liquidity crisis is always at risk of turning into a solvency crisis. In the U.K., the Bank of England would step in as a buyer of government bonds.

Most investors have been assuming that the ECB has been, as Mr. Balls says, playing a "chicken strategy," waiting until the last minute to intervene decisively. First, the bank is presumed to want a cast-iron commitment on strict budgetary discipline by governments and the true integration of fiscal policies, including perhaps a common euro bond proposal as put forward by the European Commission this week.

Many governments of the euro zone are heading at full speed in the opposite direction. "It's doubtful whether the intrusive fiscal and economic regime proposed by Germany and the European Commission is a price which Italy, and many other euro zone countries for that matter, is willing to pay to rescue the bloc," said Nicholas Spiro, a London-based sovereign debt consultant.

Many are hoping that the ECB will swerve first, allowing them to avoid commitments that would be seriously unpopular among their electorates. The events of the past week have shown that time isn't on the ECB's side. It may be unable to stem the crisis if there is a permanent shift of investors away from the euro zone.

In a game of chicken, one or both drivers can swerve to avoid catastrophe. It is the possibility that neither swerves that investors are now building into the prices of euro-zone government bonds.

Write toStephen Fidler at stephen.fidler@wsj.com

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From: LTK00711/25/2011 12:49:39 PM
   of 3244
 
Cripes they couldn't even get green on super low volume 1/2 day--hmmmm? Max

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From: LTK00711/25/2011 8:52:25 PM
   of 3244
 
Worst Thanksgiving Market Performance in recorded history: " Stocks fell Friday, capping the Dow industrials' worst Thanksgiving week performance since markets began observing the holiday in 1942."

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From: LTK00711/28/2011 7:32:54 AM
   of 3244
 
Set for a Huge Gap-up opening-Huge--e-mini SPX now +32points to 1185.xx. Reason, nothing but huge hye a good black Friday and positive CHAT regards Europe, just enough to give excuse machines to go to a momo day---DAX 3.25% and CAC 3.75% now. Max

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From: LTK00711/28/2011 4:37:29 PM
   of 3244
 
UFB Close, looks like an magical sweep of all shorts "stop buy covers"--volume By Far the HIGHEST of the day in last 5-minutes--70 million shares in 5 minutes!(volume had ANEMIC all day until the last 5 minutes), and rise of 9 points+. Was it real buyers? Can't guarantee not--but it fits how they create volume by targetting all those that were putting in shorts, with tight stops---- was their some well timed rumor put out???? Need check. Max

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