ECB chief Trichet wasn’t afraid to engineer a decline in the Euro-zone stock markets, in order to stamp out inflation psychology. “Through the wealth effect, asset prices have an influence on demand, and therefore on future consumer prices. So asset prices are taken into account by central banks,” he explained on July 17th. Furthermore, Trichet rejects the Fed’s practice of ignoring food and energy prices. “We do not consider core inflation as a good predictor of future inflation,” he said.

However, Trichet was asked on July 18th, if the worst of the global banking crisis was over, “We are experiencing a very significant market correction with episodes of turbulence, high volatility and hectic market behavior. It is an ongoing process. The risks to growth are on the downside, including the very significant financial market correction, the possible further increases in oil and commodity prices, and the possible unwinding of global financial imbalances,” he warned.

http://www.businessweek.com/print/magazine/content/08_33/b4096000769608.htm

Now Wall Street Wants Your Pension, Too
JPMorganChase, Citi, Cerberus, and Morgan Stanley are among the firms lobbying Washington to let them take over and run corporate pension funds.

I have done my DD and I now The Pension Protection Act was written by SIFMA and it allows The Department Of Labor massive opportunities for collusion with selling off pension fund assets to hedge funds …. this is so serious and it needs to be discussed!!!!! I have tried contacting several newspapers and no one gives a crap, but if you think subprime was fun, wait until “all of your” your pensions become ping pong balls for synthetic derivatives!!!

VERY serious stuff here!!! Deadly serious! This pension topic was why I started looking for blogs like this, so I do hope people will start to wake up and watch this very carefully!!!!!!!!!!!!!!!

The impending bankruptcy of all three domestic automakers is nearly a foregone conclusion as their model of leasing expensive SUVs comes under a triple assault (they can’t offer attractive leasing due to their rapidly increasing borrowing costs, consumers can’t afford expensive cars any more, and of course, no one wants an SUV; could a perfect storm be any more perfect?). Thus, the true cost of insuring $10mil in GM debt for 1 year would be about $9.5mil (with the discount based on net-present value, not based on any chance of GM surviving).

The current pricing of GM’s CDSes is therefore purely based on the chance for a government bailout of the Big Three (now the little three based on market value…). After all, Michigan is a swing state in this year’s election. And right on schedule, Obama is proposing $4 billion to start.

Rather than providing $40bil in loans that these incompetents are asking for, it would be cheaper for the government to just buy out GM and Ford (total market cap combined: $17bil), or to provide $40bil in cheap loans for better managed foreign car companies (e.g. the Japanese) to set up factories here. Thanks to stagnant wages, rising unemployment, and Bernanke’s debasement of our currency, we can now aspire to become the world’s sweatshop once again.