Archive - Apr 7, 2010 - Blog entry

Geithner and the Obama Administration are rolling the dice with its China policy in a very high stakes game. They are trying to force China to revalue the yuan. If we crap out, we face the possibility of trade wars and a collapse of international trade. I believe they don't understand what they are doing. This is big. Don't count on politicians to do the right thing.

According to a report by the Government Accountability Office, GM will need to add $12.3 billion into its pension fund by 2014. Underfunded pensions are a widespread problem, not just for the private sector. The New York Times reports, an independent report of California's three big pension funds found a shortfall of more than half a trillion dollars. This could lead to a major political problems, especially when and if states raise taxes to bridge the gap. Will pension gaps spur a tax revolt?

Even folks inside the belly of the beast think they should be broken up ...

In order to manipulate bond fund NAVs, two employees "actively screened and manipulated dealer quotes", "fraudulently published NAVs", made "price adjustments" that "were arbitrary and did not reflect fair value." The list keeps going. "This scheme had two architects - a portfolio manager responsible for lies to investors about the true value of the assets in his funds, and a head of fund accounting who turned a blind eye to the fund's bogus valuation process," - Robert Khuzami, Director of the SEC's Division of Enforcement. Sharp Mary barked today. FINRA & the SEC bit.

Barack Hoover?

The overly optimistic IMF has just released strategies for fiscal consolidation. Here is a summary.