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Delphi Chooses “Tough” Love

Delphi made its decision today that could bring on a strike and idle GM.

…today, there are reports that the Company is planning to (i) close 21 of 29 plants, (ii) dismiss 8,500 salaried workers, (iii) cut the hourly wages of some 35,000 workers, and (iv) ask a judge permission to void its legal obligations to workers.

Bill Cara is unhappy with the Delphi/GM state of affairs. More power to him for his anger.

At what point, in grasping for the bottom of the economic barrel, do U.S. legislators come to the realization that America needs to legally restructure defined benefit pension plans, corporate bankruptcy, executive compensation, ‘private capital’ regulation, and on and on.

Delphi GM Finance

There is no consensus!

Have US citizens finally had enough?

…the American flag vandal at Montebello H.S. (from Michelle Malkin)

The estimated crowd of 500,000 (in LA) proudly carried tens of thousands of Mexican flags and US flags.

We have some profound changes taking place in this country and there doesn’t seem to be any consensus on a solution to the problem. Let’s also stipulate that this guest worker or amnesty program passes. That doesn’t stop further immigration. What do we do when another 11 to 12 million move here illegally?



Bawag Up for Sale!

From Chron.com,

Austria’s trade union federation will sell embattled Bank Fuer Arbeit und Wirtschaft (BAWAG), the country’s fourth-largest bank, after revelations that it lost about 1 billion euros ($1.2 billion) in soured currency speculation deals in the Caribbean.

Another casualty of Refco.

Bawag Refco Finance

Some Items from My Files!

Jill Carroll is freed. Kidnapped in January in Baghdad she is returned unharmed.

Union expects Delphi to void contracts

United Auto Workers union leaders in Detroit have notified local presidents that they expect Delphi Corp. to file motions Friday morning asking a bankruptcy judge to void its existing contract with the union.

Chart of the day is this chart of single family home prices since 1970.

It says it is inflation adjusted, but to me it looks like much of the tangible assets, all going up in price, inflation or so it seems. It really is a picture of the fall of the dollar.

From Regime Change Iran

The U.S. intelligence community has concluded that U.N. Security Council sanctions would fail to stop Iran’s nuclear weapons program.

(Josh) Bolten (the Goldman Sachs guy) wants Snow replaced at U.S. Treasury

Among the names being mentioned to replace Snow were Henry Paulson, chief executive of Goldman Sachs; John Mack, chief executive of Morgan Stanley, and Richard Parsons, chairman of Time Warner…

The guys involved in the capping of Gold want to be totally in charge of the hen house. Who is 990N?

From the WSJ,

In the wake of the Dubai ports uproar and with an election eight months away, Republicans and Democrats are competing to advance measures that would increase executive-branch and congressional scrutiny over foreign mergers and acquisitions in the U.S.

Jill Carroll Delphi Home Prices Iran Josh Bolton

Gold: The Middle East is Catching On

From The Daily Star in Lebanon (next door to Syria), Time for Gulf economies to increase gold reserves

There are ample reasons for this (Gold) price hike: The U.S. trade deficit has spiraled out of control. Compared to its economic base, the accumulated debt in U.S. dollars has become too high to be effectively repaid; it will either default or will more likely be inflated to such an extent that it won’t hurt to “pay” it back.

The article goes on to say there is a gap between production of gold and demand and the central banks have filled that demand, which is what I’ve been saying for months.

Apart from scrap supplies, the most important filling of the gap comes from the central banks, which sell and lease gold into the market. The latter activity is especially tricky and has led to a huge derivative short position in the gold market: Western central banks mainly lease gold to commercial banks, which sell it into the market, the central banks earn a lease rate and the commercial banks invest the proceedings of the sales in higher-yielding assets like bonds, for example. Everybody could be happy, but there is one problem: the gold still exists as an asset on the books of the central banks and as a liability on the books of commercial banks or hedge funds, while the actual physical gold has left the vaults a long time ago and now hangs around the necks of the women of the world, who are the “ultimate longs” in the market without even knowing it. It is inconceivable that this short position can be covered at current prices and the market seems to reckon that at some point the central banks won’t be able to cover the supply gap because they will run out of gold or won’t be willing to sell more of one of their most valuable assets. (all emphasis added)

This is the future for those shorts

MMG Arrows, a Japanese broker of precious metals futures traded on the Tokyo Commodity Exchange, has defaulted on payment to Japan Commodity Clearing House for losses made on this week’s gold, platinum and silver trades.

Further on in the article is this bombshell:

Individuals in the Gulf countries seem to be well-prepared for these developments, as they are the second-most important buyers of gold in the world after India, but the central banks of the region have not shown the same amount of foresight yet. Their gold reserves are very low, both on an absolute and a relative level. Four countries – the U.A.E., Oman, Qatar and Bahrain – have sold out nearly all of their gold while Kuwait has leased out its complete reserves with uneasy prospects of return, should third parties default.

Gold Gold Reserves Trade Deficit USD Finance

Stylin’ on American Idol

Hey, Lesley Kennedy at Rocky Mountain News has the dish on the clothes and shoes worn by American Idol Contestants. I checked on Katharine McPhee. She wore a purple dress on March 21st.

and some sexy high heeled sling-back sandals.

The dress retails for $884 and can be purchased now for $479. The shoes can be purchased for $228!

Am I wrong? Isn’t that a lot of money for a dress and shoes?

American Idol Katharine McPhee Entertainment

Iran Plans “War Games

From News24.com

In addition, the spokesperson of the manoeuvres, Rear-Admiral Mohammad Ebrahim Dehghan told state television that the strait of Hormouz will be one of the focal points of the exercise.

“Some 80% of the Persian Gulf’s oil is shipped out of this strait over which Iran has dominant and accurate control,” he said.

“If the enemy wants to make the area insecure, he should be rest assured that he will also suffer from the insecurity, since we know the location of their vessels,” he added.

Iran strait of Hormouz Nuclear Weapons

No Surprise There!

Iran Defiantly Rejects New U.N. Demands


The Myth: Rising Rates Bad for Gold? #2

Do you remember yesterday when I wrote about The Myth: Rising Rates Bad for Gold? Here’s the chart I was searching for to illustrate my point, and I found it of all places on Don Luskin’s site:

This is a perfect illustration of why I said GFMS Ltd should be ashamed for putting out this myth. The chart shows that gold and interest rates rise together and fall together, except for that one period from 1997 to 2002. I wrote about that period in Gibson’s Paradox

Here’s the crux of the problem with so many economists. They have viewed the gold price since 1996 as benign, and concluded there was no inflation. It was in 1996 that the Central banks and the bullion banks started to sell leased gold to support the carry trade. The object was to suppress the price of gold and throw off the wrong signals to the investment community. Now they have put themselves into a box that will result in massively higher prices of gold, a falling dollar and higher interest rates.

Don Luskin Gold Finance

Middleton’s Gold Call High of $579 Taken Out!

From Gold raced to a new 25-year peak on Thursday ($586.20!)and silver spiked to its highest in more than 22 years as fund managers pumped more money into commodities ahead of the quarter-end.

This free script provided by

Did he get you back in yet? Timothy Middleton has not recommended buying gold since it’s peak and now gold has taken out $579. He has written Defend your portfolio with ETFs with no mention of gold ETF (GLD) or Ibbotson’s findings

“that precious metals performed best when they were needed the most by providing positive returns during the years that traditional asset classes had negative returns. Ibbotson determined that investors can potentially improve the risk-to-reward ratio in conservative, moderate and aggressive portfolios by including precious metals bullion with allocations of 7.1%, 12.5% and 15.7% respectively.”

Timothy Middleton Gold Finance Mover Mike

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