Rarely before have a few coded words in the minutes of the US Federal Reserve caused such an upheaval in the global currency system, or such a sudden flight from the dollar.
Telegraph – By Ambrose Evans-Pritchard, International Business Editor
The euro rocketed to a two-month high of $1.29 and sterling jumped two cents to almost $1.54 after the Fed confessed that the US economy may not recover for five or six years. Far from winding down emergency stimulus, the bank may need a fresh blast of bond purchases or quantitative easing…
The Fed minutes warned of “significant downside risks” and a possible slide into deflation, an admission that zero interest rates, $1.75 trillion of QE, and a fiscal deficit above 10pc of GDP have so far failed to lift the economy out of a structural slump.
“The Committee would need to consider whether further policy stimulus might become appropriate if the outlook were to worsen appreciably,” it said. The economy might not regain its “longer-run path” until 2016.
“The Fed is throwing in the towel,” said Gabriel Stein, of Lombard Street Research. “They are preparing to start QE again. This was predictable because the M3 broad money supply has been contracting for months.”
The Fed minutes amount to a policy thunderbolt, evidence of how quickly the recovery has lost steam. Just weeks ago the Fed was mapping out withdrawal of stimulus.
Goldman Sachs said it expects the euro to rise to $1.35 by the end of the year. The yen will appreciate to ¥83, through the pain barrier for most of Japan’s big exporters. The new twist is that SAFE, China’s $2.4 trillion fund, has begun buying record amounts of Japanese bonds, a shift in reserve allocation away from the dollar.
The signs of a deep and sudden slowdown in the US are becoming ever clearer as the “sugar rush” from the Obama fiscal stimulus wears off and the inventory boost fades. California, Illinois and other states are cutting spending, tightening US fiscal policy by 0.8pc of GDP.
Thursday’s plunge in the Philadelphia Fed’s July index of new manufacturing orders to –4.3 suggests that the economy may have buckled abruptly, as it did in mid-2008. The Economic Cycle Research Institute’s ECRI leading indicator has tumbled, reaching –8.3pc last week. This points to a sharp slowdown or recession within three months.
While US port data looked buoyant in June, the details were troubling. Outbound traffic from Long Beach fell from 139,000 containers in May to 116,000 in June. Shipments from Los Angeles fell from 161,000 to 155,000. This drop in exports is worsening the US trade deficit, eroding the dollar.
The US workforce has shrunk by a 1m over the past two months as discouraged jobless give up the hunt. Retail sales have fallen for the past two months. New homes sales crashed to 300,000 in May after tax credits ran out, the lowest since records began in 1963. Mortgage applications have fallen by 42pc to 13-year low since April. Paul Dales at Capital Economics said the “shadow inventory” of unsold properties has risen to 7.8m. “The double dip in housing has begun,” he said…
Related (HOTAIR): Gov’t pushing risky lending again?
Two US TV networks have refused to air a controversial advert condemning plans to build a mosque near the site of the 9/11 terror attacks in New York.
The advert is funded by the National Republican Trust, a conservative group not affiliated to the Republican Party.
Entitled “Kill the Ground Zero Mosque”, the video calls the proposed mosque a “monstrosity” that will invite further attacks on the US.
The advertisement has received over 100,000 page views on YouTube.
Neither CBS nor NBC, two of the major US television networks, will screen the advert. It is unclear what other networks will decide to do.
In emails obtained by the news website Politico, NBC Universal advertising standards manager Jennifer Riley wrote that because it did not make a distinction between terror groups and the religious organisation behind the mosque, “the ad is not acceptable under our guidelines for broadcast”.
The advert uses dramatic images of the World Trade Center attacks and images of rejoicing Islamic militants set to a soundtrack of Muslim prayer.
A narrator announces: “On 11 September, they declared war against us. And to celebrate that murder of 3,000 Americans, they want to build a monstrous 13-story mosque at Ground Zero. This ground is sacred. Where we weep, they rejoice. That mosque is a monument to their victory and an invitation for more.”
The National Republican Trust is a conservative political action committee (PAC), an organisation formed to promote its members’ views on selected issues.
The mosque also faces stiff resistance from some sectors of the Manhattan community.
Some opponents are attempting to have the proposed mosque site declared a city landmark, a designation which would prevent it being developed.
Republican Congressman Peter King and the Republican candidate for governor of New York, Rick Lazio, have called for an investigation into the funding for the mosque.
Mayor Michael Bloomberg, an independent, dismissed these calls as “un-American”.
Dream Experts Say ‘Inception’s’ Conception of the Subconscious Isn’t Far From Science
ABC News – By SHEILA MARIKAR
The premise put forth in “Inception” seems fantastical, other-worldly, something out of Big Brother — the idea that someone can penetrate another’s subconscious to extract information or plant an idea.
In the Christopher Nolan film that hits theaters today, Dom Cobb (Leonardo DiCaprio) and his cohorts attempt to plant an idea in the mind of the would-be heir to an energy conglomerate, a process called “inception.” Cobb already excels in “extraction” — in which he invades his targets’ dreams and steals information — but inception presents an entirely new challenge that makes for a blockbuster story.
The science behind Nolan’s film is equally fascinating. Nolan takes the concept of lucid dreaming — a dream in which the subject is aware that they’re dreaming and can manipulate the dream — and runs with it. Throughout the movie, Cobb forces himself to sleep by attaching his arm to a machine that looks like a vaguely ominous reel-to-reel tape player. He retreats into his dream world to reconnect with his deceased wife, Mal, effectively putting his memories of her on repeat.
Psychologists have developed incubation rituals to encourage problem-solving dreams. These usually target interpersonal and emotional problems, but they are also relevant to objective creative tasks. Incubation instructions usually include:
1) Write down the problem as a brief phrase of a sentence and place this by the bed.
2) Review the problem for a few minutes just before going to bed.
3) Once in bed, visualize the problem as concrete image if it lends itself to this.
4) Tell yourself you want to dream about the problem just as you is drifting off to sleep.
5) Keep a pen and paper — perhaps also a flashlight or pen with a lit tip — on the night table.
6) Upon awakening, lie quietly before getting out of bed. Note whether there is any trace of a recalled dream and invite more of the dream to return if possible. Write it down.
Sometimes the incubation also involves:
7) At bedtime, visualize yourself dreaming about the problem, awakening, and writing on the bedside note pad.
8 ) Arrange objects connected to the problem on the night table or on the wall across from bed if they lend themselves to a poster.
Judicial Watch Blog
In a comical move even for a czar-happy president who has rewarded dozens of cronies with distinguished titles, the White House has named the Obama’s personal Chicago cook as “Senior Policy Adviser for Healthy Food Initiatives.”
It’s no joke, even though is sounds like a bad one. The Chicago chef’s rapid ascension, reported this week by a conservative Washington D.C. newspaper, has been kept under the radar for the last month. Sam Kass went from being a 20-something, Windy City gourmet cook—privately paid by the Obama’s to feed them—to big-time White House adviser in a matter of months.
In between, Michelle Obama made Kass a “Food Initiative Coordinator” for her new healthy nutrition program which is supposed to eliminate childhood obesity within a generation, especially in the nation’s inner cities. The First Lady claims that childhood obesity is a threat to national security and a crisis equivalent to AIDS and youth violence.
Because it’s such a dire situation, she has convinced her husband’s administration to spend $400 million a year to bring “healthy foods” to low-income neighborhoods and $10 billion to revise a decades-old federal measure that already feeds tens of millions of poor children at school for free.
This culinary revolution no doubt requires a trusted senior policy adviser—like Kass—who is an expert in healthy cuisine. The First Lady refers to her cook as a “partner in crime” and says it’s “just pretty powerful” to see what started out as talk in her South Side Chicago kitchen turn into a major initiative that “hopefully will change the way we think as a country.”
Makes you wonder what Kass, who also doubles as a White House chef, has been putting in the Obama’s food all these years. Incidentally, the “most transparent administration” in history doesn’t want Americans to know how much the famous family cook earns. Although he’s an important administration wonk, Kass’s salary is excluded in the Annual Report to Congress on White House Staff because he’s considered “residence staff” and those salaries don’t need to be disclosed.
‘Social Network’ scribe to adapt ‘The Politician’
Variety – By DAVE MCNARY
Aaron Sorkin — best known for creating “The West Wing” — will make his feature directorial debut with a John Edwards biopic.
Sorkin’s adapting and producing Andrew Young’s “The Politician: An Insider’s Account of John Edwards’s Pursuit of the Presidency and the Scandal That Brought Him Down.” Project’s not yet set up at a studio.
Young, a longtime Edwards aide, gained notoriety during the 2008 presidential primary when he admitted — then later recanted — an affair with Edwards’ mistress Rielle Hunter and claimed Edwards’ child from that relationship as his own.
Young’s book, released earlier this year, is Young’s account of his career with Edwards dating back to when Young volunteered for Edwards’ Senate campaign in 1988.
“This is a first-hand account of an extraordinary story filled with motivations, decisions and consequences that would have lit Shakespeare up,” Sorkin said. “There’s much more to Andrew’s book than what has been reported and I’m grateful that he’s trusting me with it.”
Sorkin penned the script for “The Social Network,” directed by David Fincher and due out from Sony on Oct. 1. Sorkin’s feature credits nclude “Charlie Wilson’s War,” “The American President” and “A Few Good Men.”
Sorkin and Young are repped by WME.