"Economists are pessimists: they've predicted 8 of the last 3 depressions."
--Barry Asmus

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The information presented in this blog and its individual articles is provided for informational use only and should not be considered investment advice or an offer for a particular security. The contents reflect the views and opinions of the individual writer as of the date the article was written and do not necessarily represent the views of the individual writer on the current date. They also do not in any way, shape, or form represent the views of the Firm Never-To-Be-Named. Any such views are subject to change at any time based upon market or other conditions and The Great Redoubt and its individual writers disclaim any responsibility to update such views. These views should not be relied on as investment advice, and because investment decisions for any security are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any contributor to The Great Redoubt. Neither The Great Redoubt nor any individual author can be held responsible for any direct or incidental loss incurred by applying any of the information offered. Please consult your tax or financial advisor for additional information concerning your specific situation.

Thursday, May 19, 2011

Treasury Department Statement Regarding Leadership of the International Monetary Fund

WASHINGTON – Today, the U.S. Department of the Treasury issued the following statement from Secretary Tim Geithner following the resignation of Dominique Strauss-Kahn as Managing Director of the International Monetary Fund (IMF).
"As Acting Managing Director, John Lipsky will provide able and experienced leadership to the Fund at this critical time for the global economy.  We want to see an open process that leads to a prompt succession for the Fund's new Managing Director."

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M&T Bank Corporation Returns $700 Million in TARP Funds, Providing Additional Positive Return for Taxpayers on TARP Bank Programs

WASHINGTON – The U.S. Department of the Treasury announced that M&T Bank Corporation of Buffalo, New York has now repaid more than $700 million in Troubled Asset Relief Program (TARP) funds to taxpayers.
Today, M&T Bank repurchased TARP Capital Purchase Program (CPP) preferred shares from Treasury totaling $370 million. Additionally, last week, in connection with its acquisition of Wilmington Trust Corporation, M&T Bank purchased CPP preferred shares totaling $330 million that had been issued to Treasury by Wilmington Trust.
In March, Treasury announced that the Troubled Asset Relief Program's (TARP) investments in banks turned a profit. Since that time, all further repayments and income through TARP's bank programs, such as those announced today, provide additional positive returns for taxpayers.
With today's proceeds, taxpayers have now recovered more than $252 billion from TARP's bank programs through repayments, dividends, interest, and other income. That exceeds the original investment Treasury made through those programs ($245 billion) by approximately $7 billion. Treasury currently estimates that bank programs within TARP will ultimately provide a lifetime positive return of approximately $20 billion to taxpayers.
Treasury currently expects that TARP investment programs taken as a whole – including financial support for banks, other financial institutions, and the domestic auto industry; as well as targeted initiatives to restart the credit markets – will result in relatively little cost to taxpayers. The lifetime cost of TARP is likely to be predominantly limited to funds disbursed for Treasury's foreclosure prevention programs, which were not intended to be recovered.
Also today, Sterling Bancorp of New York City repurchased warrants to purchase common stock received in consideration for investments made under TARP's Capital Purchase Program. Further details on today's TARP repayments are included below:
  • M&T Bank Corporation (Buffalo, NY): Repurchased CPP preferred shares totaling $370 million and paid accrued dividends totaling $154,167. After this transaction, Treasury holds remaining outstanding M&T Bank Corporation CPP preferred shares totaling $381.5 million.  (Total Proceeds Today for Taxpayers: $370.2 million)
  • Sterling Bancorp (New York, NY): Repurchased 516,817 warrants to purchase common stock of Sterling Bancorp. (Total Proceeds Today for Taxpayers: $945,775)

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Administration Takes Additional Steps to Hold the Government of Syria Accountable for Violent Repression Against the Syrian People

WASHINGTON – Today, President Obama signed an Executive Order (E.O.) imposing sanctions against Syrian President Bashar al-Assad and six other senior officials of the Government of Syria in an effort to increase pressure on the Government of Syria to end its use of violence against its people and begin transitioning to a democratic system that protects the rights of the Syrian people.
Also today, the U.S. Department of the Treasury announced the designation of 10 individuals and entities pursuant to E.O. 13572 – signed by President Obama on April 29, 2011 –targeting Syrian officials and others responsible for human rights abuses, including repression against the Syrian people, as well as a set of companies tied to Syrian corruption.
The United States continues to strongly condemn the Syrian government's use of violence and intimidation against its people and urges President al-Assad and his regime to answer the calls of the Syrian people for a more representative government and embark upon the path of meaningful democratic reform.
"The actions the Administration has taken today send an unequivocal message to President Assad, the Syrian leadership, and regime insiders that they will be held accountable for the ongoing violence and repression in Syria," said Acting Under Secretary for Terrorism and Financial Intelligence David S. Cohen.  "President al-Assad and his regime must immediately end the use of violence, answer the calls of the Syrian people for a more representative government, and embark upon the path of meaningful democratic reform."
New Executive Order
In signing this Executive Order, the President has provided the United States with additional tools to pressure senior Syrian government officials and has imposed sanctions on the following individuals listed in the Annex to the Order:
  • Bashar al-Assad: President of the Syrian Arab Republic
  • Farouk al-Shara: Vice President of the Syrian Arab Republic
  • Adel Safar: Prime Minister of the Syrian Arab Republic
  • Mohammad Ibrahim al-Shaar: Minister of the Interior of the Syrian Arab Republic
  • Ali Habib Mahmoud: Minister of Defense of the Syrian Arab Republic
  • Abdul Fatah Qudsiya: Head of Syrian Military Intelligence
  • Mohammed Dib Zaitoun: Director of Political Security Directorate
As a result of this action, any property in the United States or in the possession or control of U.S. persons in which the individuals listed in the Annex have an interest is blocked, and U.S. persons are generally prohibited from engaging in transactions with them.
The President has authorized the Secretary of the Treasury, in consultation with the Secretary of State, to take actions to block the property and interests in property of senior Syrian Government officials; agencies and instrumentalities of the Syrian Government, persons owned or controlled by the Syrian Government, or by officials of the Syrian Government; persons that have provided material support to those blocked pursuant to this Order; and, those that are owned or controlled by, or that have acted for or on behalf of persons pursuant to in this Order. 
Executive Order 13572 Designations
Exposing further the complicity of Syrian government officials in the human rights abuses and repression of the Syrian people, Treasury designated today the following individuals and entities pursuant to E.O. 13572:
  • Hafiz Makhluf: a cousin of President al-Assad and senior official of the Syrian General Intelligence Directorate (GID), the overarching civilian intelligence service in Syria listed in the Annex to E.O. 13572.   Makhluf was given a leading role in responding to protests in Syria, and was heavily involved in the Syrian regime's actions in Dar'a, where protesters were killed by Syrian security forces.  Makhluf was previously designated by Treasury in November 2007 pursuant to E.O. 13441, which targets persons undermining the sovereignty of Lebanon or its democratic processes and institutions.
  • Syrian Military Intelligence (SMI):  One of the four major branches of Syria's security forces. During the recent civil unrest in Syria the SMI has used force against and arrested demonstrators participating in the unrest.
  • Syrian National Security Bureau (NSB): An element of the Syrian Ba'ath Party. The Syrian National Security Bureau (NSB) directed Syrian security forces to use extreme force against demonstrators.
  • Syrian Air Force Intelligence (SAFI):  In late April 2011, security forces including personnel from SAFI fired tear gas and live ammunition to disperse crowds of demonstrators who took to the streets in Damascus and other cities after noon prayers, killing at least 43 people.
  • Qasem Soleimani: Commander of the Iranian Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF), the conduit for Iranian material support to the GID. The IRGC-QF was listed in the Annex to E.O. 13572.  
  • Mohsen Chizari:  A senior IRGC-QF officer who serves as the Commander of IRGC-QF Operations and Training.
E.O. 13572 authorizes the United States to sanction any person that is owned or controlled by, or acts for or on behalf of any person designated pursuant to E.O. 13460. Included in today's action are three companies and one corporate official for ties to public corruption in Syria.  The targets are Cham Holding and its Chairman Nabil Rafik al Kuzbari, Bena Properties, and Al Mashreq Investment Fund, all of which are owned or controlled by, or acting for or on behalf of Rami Makhlouf. Makhlouf, a powerful Syrian businessman and regime insider, was designated by Treasury in February 2008 under E.O. 13460 for improperly benefitting from and aiding the public corruption of Syrian regime officials.  ​

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World News!

  • President Mahmoud "the Holocaust never happened" Ahmadinejad, in an attempt to dethrone Hugo "US scalar weapons caused the Haiti earthquake" Chavez as reigning lunatic statement champion, has stated in an interview on Iranian television that "I have exact information that bin Laden was held by the American military for sometime... until the day they killed him he was a prisoner held by them.  Please pay attention.  This is important.  He was held by them for sometime.  They made him sick and while he was sick they killed him."
  • The United States has imposed sanctions against Syrian President Bashar "We're not suppressing protestors, just the armed terrorist gangs hiding behind the protesters" al-Assad and six senior Syrian officials for human rights abuses.  All of their assets have been frozen, and it is now illegal for Americans to do business with them.  President al-Assad's response was to condemn the sanctions as part of a US effort to impose its policies on the region, and assured anyone who believes him that the crisis is coming to an end.  As he was delivering those remarks, reports came in to the BBC of the Syrian army bringing 27 protesters in Tal Kalakh to an end through the use of batons and bullets.
United States
  • In "I thought you weren't supposed to be evil" news, California State Senator has introduced a Social Networking Privacy Act (SB 242), which would require "a social networking Internet web site to establish a process for new users to set their privacy settings as part of the registration process that explains privacy options in plain language, and to make privacy settings available in an easy-to-use format".  Coming out in opposition to this proposed state law is Facebook and Google (among others), who jointly state that plain language privacy settings "would significantly undermine the ability of Californians to make informed and meaningful choices about use of their private data", claim that it "would impose a duty on social networking sites difficult or impossible to discharge using existing technologies", and assure us that it "would notably interfere with the right to freedom of speech enshrined in ...the First Amendment to the United States Constitution."
  • After a three day, 2000 mile drive from California to Tenseness, Antonio Carranza was arrested and held on a $300,000 bond for driving while intoxicated, failing to heed police lights and sirens, and possession of 91 pounds of cocaine.  He was released four days later after sheriff's deputies discovered that the "cocaine" was 91 pounds of cheese, shrimp, and tortilla and tamale dough.  His truck and dog, confiscated at the time of his arrest, have not been returned.
  • In "Can you say conflict of interest?  Good, I knew you could" news:  Fur months after helping to approve a merger between Comcast and NBC Universal, Meredith Attwell Baker has left the FCC to take a job as a Washington lobbiest for Comcast.

First Time Jobless Claims

It's Thursday!  And if it's Thursday, it's time for unemployment insurance claims!
Last week, the figures for the week ending 5/7 came in pretty much in line with expectations.  The first time claims for 4/30 were revised downwards to 473,000, and the advance figure for initial claims for the week ending 5/7 came in at 434,000 - which actually missed expectations, but only by 4000 (a veritable drop in the bucket).  Unadjusted initial claims for 5/7 came in at 394,583, and the total number of people claiming benefits in all programs fell to 7,983,672 ( a decline of 31,247 from the previous week).
Now, for the week ending 5/14, the Econoday-surveyed analysts are feeling even more optimistic.  They're calling for the number of new claims for the week to fall to 425,000.
Are they even remotely accurate?  To find out we turn to the US Department of Labor's Unemployment Insurance Weekly Claims Report, where we see that....
So, first of all, the initial claims figure for 4/7 was revised upwards to 438,000.  Not great, in and of itself, but it's this week's figures that drive the "wow".  For the week ending 5/14, the advance figure for seasonally adjusted initial claims was 409,000.
Repeat after me:  wow.  Expectations have been beaten like a Syrian pro-Democracy protester.
The unadjusted initial claims figure for 5/14 comes in at 357,872 (down 36,711 from last week), and the total number of people claiming benefits in all programs was - for the week ending 4/30[1] -  7,936,548 (a decline of 47,124).
Overall, that's pretty good news for the week.  The markets should like this.
[1]  Yeah, there's a bit of a delay in that figure.

Monday, May 16, 2011

World News!

  • Israeli troops used live ammunition to suppress Palestinian protesters attempting to enter Israel from Lebanon.  The protesters were there to commemorate Nakba Day, by throwing rocks at the soldiers.  Reports are that 10 Palestinians died and 112 were wounded.  Syria, winning the chutzpah award for the day, condemned Israel's "criminal activities".
  • Luis Moreno-Ocampo, International Criminal Court prosecutor, asked for warrants for the arrest of Muammar Gaddafi, Saif al-Islam, and Abdullah al-Senussi on charges of war crimes - suppressing protests using live ammunition and heavy artillery, deploying snipers to kill civilians leaving mosques, and attacking civilians at home.
North Korea
United States
[1]  Hitting the charts with their new single "Japan Is My New Yeongpyong".
[2]  To look at the actual applications, go to the United States Patent and Trademark Office's Trademark Electronic Search System.  You can just search for "Seal Team 6",  They've got serial numbers 85310970, 85310966, and 85310957.
[2]  Specifically, the Civil Service Retirement and Disability Fund (CSRDF) and the Government Securities Investment Fund ("G Fund").  The CSRDF is invested in special-issue Treasury securities, and the "G Fund" is a money market that uses special-issue Treasury securities.  The Treasury Department has put out an FAQ on the matter, if you're interested.