[Blockierte Grafik: http://www.goldseek.com/news/LemetropoleCafe/lmpc.jpg]
http://www.lemetropolecafe.com
CARTEL CAPITULATION WATCH
The PPT did all they could to keep the DOW above psychologically important 10,000 all day long. It was to no avail as the DOW sank late to 9989, off 59. The DOG growled its way lower to 1860, down 20.
Some US economic news:
09:50 DOE says it is not considering halting fill of SPR crude oil -- Dow Jones
DOE says it has received more requests from refiners relative to oil from the SPR. * * * * *
The good housing news:
10:00 August New Home Sales reported 1.184M vs. consensus 1.155M
Prior reading revised to 1.082M from 1.134M.
* * * * *
The bad housing news:
U.S. AUG NEW HOME INVENTORY 25-YEAR HIGH OF 404,000
More Fannie Mae flap:
9/26 FNM investors have been betrayed, says Sunday NYT
Columnist Gretchen Morgenson says that the corporation is run by management that puts its interest ahead of those of the investor. Referring to the OFHEO report, Morgenson says the report indicates that executives are willing to manipulate numbers in order to make estimates. FNM recorded $12.3B in deferred losses relative to cash-flow hedges, and if FNM has to take some of the losses against retained earnings, its regulatory capital will face the consequences. Morgenson says FNM's regulator may force FNM to raise capital.
Those out there looking for a copper price plunge are getting their butts handed to them. As in silver, the inventories in Europe are very tight:
Copper Prices Rise to Six-Month High After Inventory Tumbles
Sept. 27 (Bloomberg) -- Copper prices rose to a six-month high after a measure of global inventory fell the most since April 1997, indicating demand continued to outpace production.
Stockpiles monitored by the London Metal Exchange fell 3.7 percent to 94,725 metric tons, down 78 percent this year. Inventory tracked by the Shanghai Futures Exchange fell 21 percent last week to 23,375 tons amid forecasts for a deficit….
-END-
This story created quite the buzz last night. Still just a story at this point, yet one of big-time interest to our camp:
Pressure Grows On G7 To Agree Dlr Devaluation
09/26/2004
LONDON (Dow Jones)--U.S. President George Bush is being urged to signal a dollar devaluation of up to 20% to rebalance the global economy ahead of Friday's Group of Seven and International Monetary Fund meetings in Washington, the U.K.'s The Business newspaper reported.
Senior U.S. administration officials in Washington have over the past few days tried to influence the White House and U.S. Treasury to put pressure on the G7 to agree to a dollar depreciation in its final statement, the newspaper said.
Recent data have shown the U.S. current account and trade deficits running at record levels, and economists have said a dollar depreciation is needed to rein these in….
-END-
Here is story very familiar to the GATA one. Many pension funds in the US are in serious trouble. The solutions to remedying the problem are not easy ones – ones which politicians looking to be re-elected shy away from. The whistleblower in this case sees a coming "Enron, " very similar to what GATA envisions coming in the gold/US financial markets as a result of the rigging of the price of gold for so long:
Pension Woes Put San Diego on Brink
Fri Sep 24, 7:36 PM ET
By ELLIOT SPAGAT, AP Business Writer
SAN DIEGO - For 16 months, the whistleblower was ignored. Diann Shipione, a trustee of San Diego's pension plan, sent letters to the mayor, wrote opinion pieces in the newspapers and spoke to the City Council, warning that the fund was a ticking time bomb and that the city was the "municipal Enron."
But the mind-numbing accounting complexities that the 52-year-old stockbroker described made it easy to dismiss her concerns. And a top city official assured the City Council that she "omitted, slanted and misrepresented the facts."
When people finally started listening — and it took a distinguished, outside lawyer for that to happen — San Diego became engulfed in a scandal that now threatens to push the nation's seventh-largest city into bankruptcy.
The Securities and Exchange Commission (news - web sites) and the Justice Department (news - web sites) are investigating whether the city hid bad news about its pension plan. The city manager and auditor have resigned. And the mayor is spending the final weeks of his re-election campaign trying to assure the public of the city's stability.
"America's Finest City" is in a fine mess. Its unfunded pension liability — the gap between the value of its pension assets and its obligation to retirees — stood at $1.17 billion at the end of January. It also faces a shortfall of $545 million for retiree medical benefits.
This seaside city of 1.3 million people — long hailed as a model of fiscal probity — would need to double its pension contribution next year to $259 million, or about one-tenth of its annual budget, just to avoid falling further behind, said April Boling, who heads Mayor Dick Murphy's Pension Reform Committee. That is more than three times what the city spends on parks and seven times what it gives libraries.
Boling, who is also Murphy's campaign treasurer, said the city will need to borrow $600 million on the bond market over three years and raise the retirement age from 55 to 62, among other things.
"If the city doesn't follow our recommendations, we will be headed toward bankruptcy," Boling said. "That is a fact."
On Wall Street, Standard & Poor's took the rare step of suspending its ratings on the city's debt Monday. On Friday, Moody's Investors Service downgraded its ratings on the city's debt for the second time since mid-August.
How did San Diego get into this mess?
A blistering report last week describes the city's long history of promising more than it could deliver.
The report, prepared by a law firm hired by the city, portrays a dysfunctional City Hall: a city manager — effectively San Diego's chief executive officer — who didn't bother to read financial disclosures and wasn't on speaking terms with his finance deputy, and a "check-the-box mentality" when it came to preparing financial disclosures.
The problem began in 1980, when the city began using above-average returns on its pension investments to give annual bonus checks to retirees, whose buying power had been battered by double-digit inflation. Typically, investment gains are set aside to cushion against downturns in the market.
In 1996, when the city was grappling with expenses imposed by the state and the costs of hosting the Republican National Convention, it cut its contributions to the pension fund and, at the same time, promised enhanced retirement benefits.
In 2002, it cut pension contributions and improved benefits again, in part because of a class-action settlement with retirees.
To make matters worse, the stock-market bubble popped, straining pension funds across the country. In an October 2001 e-mail to a colleague, Terri Webster, assistant city auditor, summed up the impact in her subject line: "EEEK."
The mayor, a former judge elected four years ago, said now he regrets the 2002 vote but notes the problem began long before him. He is being pounded by his opponent, San Diego County Supervisor Ron Roberts, for a "steady drumbeat of denial."
Shipione, a lone wolf on the pension board who was appointed by the previous mayor, had been crying foul since May 2002. But people did not take her seriously until one night last September: Paul Webber, an outside attorney who was handling a sewer bond sale for San Diego, came across a Shipione letter to City Hall and grew alarmed.
Webber, a highly regarded 70-year-old partner at a law firm in Los Angeles, was not so easy to brush aside. But people at City Hall tried.
When Webber insisted the city detail its billion-dollar problem and spell out future risks, City Treasurer Mary Vattimo scoffed, saying in an e-mail to a colleague that his demand "is OVERKILL." His relations with city officials quickly heated to "a boiling point," according to the law firm report, and he received angry e-mails from city employees, one of them accusing him of making "much ado about nothing."
Nevertheless, his hard-nosed questions would blow the scandal wide open and lead to resignations at City Hall in February and March.
Webber declined to comment. As for Shipione, she is not taking any bows for her prescient — and long-ignored — warnings.
"This is such an enormous problem," she said. "I don't even want to get into the I-told-you-so's and pointing fingers. I'd like to keep the focus on what we can do."
-END-
Here they go again! True to form, The Gold Cartel folks are talking up the notion to mobilize IMF gold to suppress the price under the guise they want to help the poor. What hypocrites:
Britain Proposes Debt Relief to Nations
Sun Sep 26, 1:51 PM ET
Treasury chief Gordon Brown said many developing countries were crippled by servicing their debt and could not invest in their infrastructure.
"We will pay our share of the multilateral debt repayments of reforming low-income countries," Brown said in a statement, released by the Department of International Development.
Zitat
"We will make payments in their stead to the World Bank and African Development Bank for the portion that relates to Britain's share of this debt. We do this alone today but I urge other countries to follow so that over indebted countries are relieved of the burden of servicing all unpayable multilateral debt."
Brown was scheduled to reveal further details in a speech later Sunday to a "Vote for Trade Justice" event at a church in Brighton, the coastal town where the governing Labour Party is holding its annual conference.
Britain holds about 10 percent of the total debt owed to the World Bank and other development banks, or about 7 percent of all the debt of the world's poorest nations.
Britain's Development Secretary Hilary Benn said poor countries needed "significant additional resources" to "lift people out of poverty, get children into primary schools and improve basic health."
"Debt relief is an efficient way of transferring these resources to countries that can use them most effectively," he said in the statement. "We call on other governments, especially our G-8 partners, to join us so that no country is held back by the burden of unsustainable debt."
To be eligible for the debt relief, countries must be able to show the savings will be used to meet the goals of the 2000 Millennium Summit. Those goals include halving the number of people living in dire poverty from 2000 levels; ensuring that all children have an elementary school education; ensuring that all families have clean water; and halting the AIDS epidemic — all by 2015.
The list of countries will include those that have been through the Heavily Indebted Poor Countries Initiative: Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Guyana, Mali, Mauritania, Mozambique, Nicaragua, Niger, Senegal, Tanzania, Uganda, as well as a number of other countries such as Vietnam and Armenia, where the World Bank has assessed the countries are capable of absorbing direct budget support, the statement said.
Britain also called for debt payments owed to the International Monetary Fund to be funded through the more efficient use of IMF gold reserves.
-END-
Possible motive for Brown popping off:
DJ FOCUS: Europe's Central Banks Unlikely To Fill Gold Sale Quota
(Repeating) By Elisabeth Behrmann
LONDON (Dow Jones)--Gold sales over the next five years by European central banks under the renewed gold sales agreement are unlikely to reach the upper limit of 2,500 metric tons, although the sale intentions of most of the 15 signatories are still unclear, analysts said Thursday….
-END-
Brown is a bomb thrower, just as Germany’s Ernst Welteke was for years. However, his bombast does have the London gold world in a bit of a twit. Word from LONDON is to expect more of this in October as gold moves towards $430.
Brown will have his work cut out for him:
A Factsheet - September 2004
Gold in the IMF
Gold played a central role in the international monetary system until the collapse of the Bretton Woods system of fixed exchange rates in 1973. Since then, the role of gold has been gradually reduced. However, it is still an important asset in the reserve holdings of a number of countries, and the IMF remains one of the largest official holders of gold in the world.
The IMF’s gold holdings
The IMF holds 103.4 million ounces (3,217 metric tons) of gold at designated depositories. The IMF’s total gold holdings are valued on its balance sheet at SDR 5.9 billion (about $8.5 billion) on the basis of historical cost. As of August 31, 2004, the IMF's holdings amounted to $42.2 billion (at then current market prices).
The IMF acquired virtually all its gold holdings through four main types of transactions under the original Articles of Agreement. First, the original Articles prescribed that 25 percent of initial quota subscriptions and subsequent quota increases were to be paid in gold. This represented the largest source of the IMF's gold. Second, all payments of charges (i.e., interest on members' use of IMF credit) were normally made in gold. Third, a member wishing to purchase the currency of another member could acquire it by selling gold to the IMF. The major use of this provision was sales of gold to the IMF by South Africa in 1970–71. And finally, members could use gold to repay the IMF for credit previously extended.
