GM Buys Subprime Lender Americredit

I thought this was the problem with the economy and part of the problem with GM, which is why they let go of GMAC, which is practically bankrupt. They are 61% owned by the government and they are going out and doing more of what got themselves and the whole economy in trouble???!!! What kind of a joke is this? History repeats itself. The crisis that we never got out of is going to repeat itself as these clowns keep doing the same thing. It is more an more obvious nobody learned anything. The same is true for the whole market. How are stocks still not tanking and sovereign bonds, especially that of peripheral Europe and US and Japan still going as high as ever. This will all end really bad again.

The following is from Yahoo.

GM to buy AmeriCredit to expand subprime lending

General Motors says AmeriCredit acquisition will boost financing, lease options for car buyers

Tom Krisher, AP Auto Writer, On Thursday July 22, 2010, 9:15 am

DETROIT (AP) -- General Motors Co. will buy AmeriCredit Corp. for $3.5 billion, a deal that allows the automaker to expand loans to customers with poor credit and offer more leases, key areas where GM must grow to accelerate its car sales.
But the acquisition, announced Thursday, also means that GM, which is 61 percent owned by the U.S. government, is getting back into the business of making risky loans.
GM executives have said for months that they were missing sales opportunities due to lack of credit for lease deals and financing for subprime buyers, those with credit scores below 620 on a 300-to-850-point scale.
GM Chief Financial Officer Chris Liddell said Thursday that customers could now expect more lease deals from GM. Only 7 percent of its sales are from leases, compared with 21 percent for the industry, he said. Only 4 percent of GM's sales come from subprime buyers, which the company hopes to expand with its AmeriCredit acquisition.
"If you just had a modest increase from 4 to 5 percent, that's a significant number in its own right," Liddell told reporters.
GM sold just over 1 million vehicles in the U.S. during the first half of the year.
The Detroit automaker will pay $3.5 billion in cash to buy all of the Ft. Worth, Texas-based AmeriCredit's shares at a price of $24.50 each -- a 24 percent premium over Wednesday's close.
GM expects the deal to close in the fourth quarter.
The automaker says that its partner Ally Financial -- formerly known as GMAC Financial Services Inc. -- will continue to finance GM's dealer inventory and make loans to buyers with good credit.
GM says it is not considering a purchase of Ally's auto financing unit. GM sold controlling interest in GMAC in 2006. The company eventually had to be bailed out by the U.S. government because of problems with its home mortgage loan unit.

China Should Sell Treasuries When Demand Is String Says Chinese Economist

Here is an article from Reuters:

BEIJING | Sun Jul 18, 2010 9:24pm EDT

BEIJING (Reuters) - China should cut its holdings of U.S. Treasury securities when market demand is strong, a prominent economist said in remarks published on Monday.
Beijing reduced its Treasury holdings in May by $32.5 billion to $867.7 billion, but it actually bought a net $3 billion in long-term Treasuries and remained the largest single holder of U.S. government debt, the Treasury reported on Friday.
Yu Yongding, a former academic adviser to the central bank and now a professor with the Chinese Academy of Social Sciences, said Beijing should invest in assets denominated in other currencies as well as other financial instruments and real goods.
"Although assets in other currencies and forms are not an ideal replacement for U.S. Treasury bonds, diversification should be a basic principle," Yu wrote in the China Securities Journal.
"When demand for U.S. Treasury securities is strong, it's a rare opportunity for us to gradually pull back. That way, it will not have a big impact on prices and China will not suffer too much," he said.
Zhang Monan, a researcher with the State Information Center, a think tank under the powerful National Development and Reform Commission, told the paper that China should invest more of its $2.5 trillion of foreign exchange reserves, the world's largest stockpile, in hard assets such as gold.
(Reporting by Langi Chiang and Alan Wheatley; Editing by Ken Wills)

Gold Manipulation and the BIS

Gold keeps being manipulated down by heavy hands everyday in the fraudulent paper market mainly in the Comex. What is going on has no ties to the physical market. There is a shortage of physical, yet gold price keeps falling due to 10,000 contracts being sold in less than 2 minutes on the Comex. 10,000 contracts is $1.2 billion of gold considering each contract is 100 ounces. 10,000 contracts is 1,000,000 ounces. That is a 31 tones of gold. Considering the annual global production is 2,300 tones, 31 tones and more being sold in minutes is beyond ridiculous. Especially considering the seller has no regard for falling prices as if it (the Fed) wants to sell it as cheap as possible.

Now we have the news of the BIS (Bank of International Settlements) and central banks -mainly the Fed- doing gold swaps to the tune of 346 tones which is roughly $14 billion. Now this is obviously not to raise money. They can and have been printing trillions at will. The central banks do not need to swap gold to raise/borrow money. They can just print it and the number is laughable in the realm of the liabilities of all the big financial institutions that are still way insolvent, but in the gold market 346 tones is sizable since gold is so rare. There could be two reasons this is done.

First reason could be to bail out some run on the Comex or bullion banks that do not have the physical gold to back up their manipulation scheme as more and more investors are asking for physical delivery as they realize that the Comex and GLD are both frauds. This is to mask the fact that there is a huge shortage problem in the physical market, which would cause the gold to reach $2,000 in a heartbeat. The only reason gold is not at $5,000 is the heavy manipulation of the Fed as it is short close to 50,000 tones of gold.

The second reason could be to create an atmosphere of fear for gold buyers and manipulate the price down. The repetitive news of IMF announce that it is selling the same gold over and over is not working any longer as people realize that IMF keeps saying that, but does not sell it as well as people realizing that India or China or some other central bank being ready to by this gold. Even Eric Sprott offered to buy the gold IMF had to sell. The IMF denied Mr. Sprott's request to buy it. This is a case of Sprott calling the bluff of IMF and IMF tucking its tail in between its legs and running away. So the Fed had to find another way to try and attempt to manipulate the markets with some other ridiculous news. And that is why we hear about the BIS having 346 tones of gold in swaps from central banks.

Give it a rest you crooks. Your game is almost up. You'll have a gold run on you and it will be apparent you are short 50,000 tones of gold and gold will skyrocket beyond belief at that point. Good luck covering that short and avoiding jail time.

Dave Rosenberg On Distrust In Governments

This is from Dave Rosenberg.

"The fact that you have CDS on Greek sovereign debt blowing out to new highs despite the EU-IMF package is the most telling sign there is now a growing distrust of government spending, manipulation of information, and demagoguery. The only way to regain confidence is to come clean and to then do something about it."

I am not the only one thinking the government is manipulating information.

French Revolution

This one is from Dave Rosenberg:

"...While the congress couldn't find it in its heart to extend unemployment benefits again, it did manage to throw a nice bone to the banks (after all the banks donate more to political campaigns than those in the unemployment line) in the form of a watered-down financial overhaul bill and a major softening of the Volcker Rule."

Wait till people cannot take the ridiculousness of the banks any longer and due to hunger and injustice social unrest starts. The mess weapons of sedation will not work for much longer at this rate as people will not be able to afford TVs. American Idol, LeBron James and Jersey Shore will be the last thing on people's minds when their kids are starving...

This is a great example of "cutting the branch you are sitting on".

Federal (Reserve) Punishment

Today, some people seeing the markets continue to tank in the morning dared to buy around 6k contracts of gold in a relatively short time pushing 5the prices up in the meantime. Of course the Federal Reserve got very upset with this defiant action, so it decided to punish these people for being prudent and came in and sold RIDICULOUS amounts of paper gold to bring the price down ridiculously obviously to prevent a break out above the $1265 level. The Federal Reserve should be punished by the law, but who's listening????

FOMC Day Gold Manipulation

So Federal Reserve manipulates gold. Everybody knows this, But one picture is worth a thousand words. The huge bars that coincide with the big sudden declines without any news happened in a matter of couple minutes for each of them. No one who cares about profits trades that way unless they are trying to bring the price down. And no one who is short and wants to bring the price down is short that much officially except for JPM and even for JPM these are some ridiculous sizes. Fed needs to be abolished or at least put under a leash. This is enough illegal activity - not mentioning the stock market manipulations they do.

Problem With Economists

so krugman at a conference in tel aviv says that inflation isn't a threat and the global economy needs more stimulus according to a bloomberg article. this is at a point when the mountains of sovereign debt is starting to cause a lot of trouble as the debt collapse has already started.

the problem with people on certain payrolls whether they are nobel prize winners or not -other than the obvious bias for favor of their feeders- is that they concentrate on a small portion of the population -the ultrarich that are controlling the majority of assets, especially the stock market- as well as inflation, a meaningless number that is the rate of change. What people need to concentrate on is purchasing power and living standards both of which have been consistently falling with the advent of fiat money. inflation is a meaningless number. Consider a situation where for 5 years prices rise 20% of the initial price, so the total price increase is 100% of the initial year. This is terrible, right? Constant high inflation. Now consider a situation where the first year prices double -an increase of 100%, and for the rest of the 4 years, they are stable. People would think the second scenario is better, whereas in reality you are better of in scenario one if you are part of the majority of the population where you earn wages for your services and do not own that much assets because you can accumulate more assets under scenario one.

An even better scenario is deflation for you where your purchasing power increases. Do not believe the lies that in a deflationary period unemployment rises. Look at history, look at Japan... It is not true. Of course if it is run away deflation and there is too much instability, that is a different thing, but an orderly deflation is welcome for prudent savers as well as the majority of the population earning fixed incomes and are not asset rich. So why are we secretly ruled (think Goldman Sachs aka Government Sachs) by a bunch of rich people that only pursue their own interest and ruining us all. Do these people not realize that by lying about the economy and a lot of other things they are pursuing all of us towards a second global French Revolution????

Michigan Lack of Confidence Number

There is no confidence left in the University of Michigan Confidence number. One can't help, but wonder, where they are doing the survey. Must be the hallways of Goldman Sachs or JPMorgan. With everything going on around the world, as unworldly as Americans are and how blind they are thanks to the horrendous media of the country that is controlled by certain interests, people must have heard of the Greek tragedy and the troubles with sovereign debt and unemployment numbers as manipulated as they are similar to the University of Michigan Lack of Confidence Survey. You're not fooling anybody and these little games will end poorly.

Fed Needs To Be Abolished

Fed is overdoing its gold manipulation and needs to be abolished and people responsible for all the illegal and manipulative operations brought to justice. This is hurting the American people and the world. Fed is practically an extension of Goldman and JPM, the latter of which was fined today by the UK authorities for mingling clients' money with the firm money (memo to those who think these firms are still solvent), and all three are grossly fraudulent and should be shut down and brought to justice.

Forget Flash Crash, Investigate Flash Rebound

I am sick of hearing about the flash crash. They should be concentrating on the flash rebound and who manipulated markets upwards. Flash crash came as a result of the market being where it is due to upward manipulation, gross overvaluation, and everyone being long the same things and a continued pushing things upwards by the quantitative trading momentum shops. Flash rebound on the other hand is the plunge protection team at work. That is ILLEGAL. That is the part that should be investigated. There was no fat finger, there are only fatheads who think there are fat fingers and other lying fatheads trying to blame fat fingers.

Complacency And Crash Correlation

There is a direct correlation between complacency and market crashes as well as size of the bubble and size of the crash. Given the ridiculous levels world and US stock and fixed income markets as well as industrial metals, the size of the crash will be one to be reckoned with.

Even Goldman which has lost its reputation by those who still foolishly respected it, rose today. This company will at the least lose a whole bunch of business both due to reputation and they will have to remain a little less fraudulent the next few weeks or months so as not to be completely shutdown. And as Goldman cannot make money without corruption and fraud, this company other than lying in its reports should disappoint in earnings. Of course they and the Fed could try to manufacture a small market downturn to scare the government off from shutting it down or auditing the Fed.