Sound Money: Fight For It!

By George F. Smith

As a thought experiment, suppose you knew you were going to die three months from now. Further, suppose some multibillionaire hears of your impending death and decides to make you an offer: He will produce a 30-second TV commercial of your final message to the world and air it during the 2012 Super Bowl and the Summer Olympics in London. It will also be aired at appropriate times during the presidential debates next year. In addition, he will run a highly creative ad campaign encouraging people to watch your parting message.

So, here's the deal: You've got thirty seconds. You'll have a big audience. What would you say?

I knew immediately what my message would be, though not exactly how I would say it. I thought about what my message implied about my life and the world, and came away satisfied with my decision.

Then I considered what others might say. I could easily imagine any number of people issuing a message of love. Stop hating and love. Make love, not war. They might even recite the popular Biblical passage, 1 Corinthians 13: "If I speak in the tongues of men or of angels, but do not have love, I am only a resounding gong or a clanging cymbal."

I recalled Mel Gibson's final message as Sir William Wallace in the… (Read the full article)

Source: Mises.org

SIX JAPANESE FREIGHT FORWARDING COMPANIES AGREE TO PLEAD GUILTY TO CRIMINAL PRICE-FIXING CHARGES

Companies Agree to Pay a Total of $46.8 Million in Criminal Fines

WASHINGTON — Six Japanese freight forwarders have agreed to plead guilty and to pay criminal fines totaling $46.8 million for their roles in a conspiracy to fix certain fees in connection with the provision of freight forwarding services for air cargo shipments from Japan to the United States, the Department of Justice announced today. These are the second round of charges filed as a result of the department's antitrust investigation of the freight forwarding industry.

According to charges filed separately today in U.S. District Court for the District of Columbia, six companies - Kintetsu World Express Inc.; Hankyu Hanshin Express Co. Ltd.; Nippon Express Co. Ltd.; Nissin Corporation; Nishi-Nippon Railroad Co. Ltd.; and Vantec Corporation - engaged in a conspiracy to fix and impose certain freight forwarding service fees, including fuel surcharges and various security fees, charged to customers for services provided in connection with air freight forwarding shipments of cargo shipped by air from Japan to the United States from about September 2002 until at least November 2007.

Under the plea agreements, which are subject to court approval, the six companies have agreed to pay the following criminal fines: Kintetsu World Express, $10,465,677; Hankyu Hanshin Express, $4,522,065; Nippon Express, $21,115,396; Nissin Corporation, $2,644,779; Nishi-Nippon Railroad, $4,673,114; and Vantec Corporation, $3,339,648. Each company has also agreed to cooperate with the department's ongoing antitrust investigation.

"Including today's charges, 12 companies have agreed to plead guilty and nearly $100 million in criminal fines have been obtained as a result of the Antitrust Division's ongoing freight forwarding investigation," said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice's Antitrust Division. "Prosecuting these kinds of global price fixing conspiracies, that are harmful to the economy and consumers, has been and will continue to be a top priority of the Antitrust Division."

Freight forwarders manage the domestic and international delivery of cargo for customers by receiving, packaging, preparing and warehousing cargo freight, arranging for cargo shipment through transportation providers such as air carriers, preparing shipment documentation, and providing related ancillary services.

According to the charges, the companies carried out the conspiracy by, among other things, agreeing during meetings and discussions to coordinate and impose certain freight forwarding service fees and charges on customers purchasing freight forwarding services for cargo shipped by air from Japan to the United States. The department said that the companies levied freight forwarding service fees in accordance with the agreements reached and engaged in meetings and discussions for the purpose of monitoring and enforcing adherence to the agreed-upon freight forwarding service fees.

As a result of the department's investigation into the freight forwarding industry, on Sept. 30, 2010, six international freight forwarders - EGL Inc.; Kühne + Nagel International AG; Geologistics International Management (Bermuda) Limited; Panalpina World Transport (Holding) Ltd.; Schenker AG; and BAX Global Inc. - agreed to plead guilty and to pay criminal fines totaling $50.27 million for their roles in several conspiracies to impose certain charges or fees on customers purchasing international freight forwarding services for cargo freight destined for air shipment to the United States during various periods between 2002 and 2007.

Each company is charged with price fixing in violation of the Sherman Act, which carries a maximum $100 million fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

Today's charges are the result of a joint investigation into the freight forwarding industry being conducted by the Antitrust Division's National Criminal Enforcement Section, the FBI's Washington Field Office and the Department of Commerce's Office of Inspector General. Anyone with information concerning the price fixing or other anticompetitive conduct in the freight forwarding industry is urged to call the Antitrust Division's National Criminal Enforcement Section at 202-307-6694 or visit www.justice.gov/atr/contract/newcase.htm or call the FBI's Washington Field Office at 202-278-2000.

The Fed’s Long Shot

By Robert P. Murphy

Last week the Fed announced "Operation Twist," in which the central bank will buy $400 billion of longer-dated Treasury securities while selling the same amount of shorter-dated Treasuries. This episode epitomizes everything that is wrong with the modern, statist view of money.

The Goofy Name

Just the fact that it's an "operation" is disturbing. Ever since the crisis began, officials have deployed the military metaphor since their only solution to social problems is to start blowing things up. We have a war on poverty, a war on drugs, a war on terrorism, and (since 2008) we've had an undeclared war on the recession.

The military metaphor is crystal clear whenever analysts discuss the Fed's options to "help" the economy, since interest rates are already at zero. Typically these analysts reassure their readers or viewers by declaring, "The Fed still has plenty of ammunition." Don't worry kids, we won't end Operation Enduring Inflation until every last unemployed person is eliminated.

Central Planning

It continues to amaze me that Austrian economists are apparently the only ones who think market prices mean something. In general, when we're just discussing the generic "interest rate," Austrians explain that it helps coordinate production and consumption activities over time. When the central bank gives us an artificially low interest rate, things get messed up — consumers don't… (Read on)

Source: Mises.org

Rutherford B. Hayes $1 Coin Cover Available October 4

WASHINGTON - The United States Mint will begin accepting orders for the Rutherford B. Hayes $1 Coin Cover on October 4, 2011, at noon Eastern Time (ET).  The limited-edition coin cover, priced at $19.95, includes two circulating quality 2011 Rutherford B. Hayes Presidential $1 Coins from the first day of mintage at the United States Mint facilities at both Denver and Philadelphia - June 1, 2011.  The coins are mounted on a handsome display card with a 44-cent postage stamp.  The postmark of "August 18, 2011" marks the day the Rutherford B. Hayes Presidential $1 Coins were first released to the public.

Orders will be accepted at http://www.usmint.gov/catalog or at 1-800-USA-MINT (872-6468).  Hearing- and speech-impaired customers with TTY equipment may order at 1-888-321-MINT (6468).  A shipping and handling fee of $4.95 will be added to all domestic orders.

United States Mint American Presidency $1 Coin Covers are also available through the United States Mint Online Subscription Program.  To learn more about this convenient ordering method, visit http://www.usmint.gov/catalog.

The United States Mint, created by Congress in 1792, is the Nation's sole manufacturer of legal tender coinage and is responsible for producing circulating coinage for the Nation to conduct its trade and commerce.  The United States Mint also produces proof, uncirculated and commemorative coins; Congressional Gold Medals; and silver, gold and platinum bullion coins.

Note:  To ensure that all members of the public have fair and equal access to United States Mint products, orders placed prior to the official on-sale date and time of October 4, 2011, noon ET shall not be deemed accepted by the United States Mint and will not be honored.  For more information, please review the United States Mint's Frequently Asked Questions, Answer ID #175.

Treasury Sanctions Lashkar-e Tayyiba Leaders and Founders

WASHINGTON – The U.S. Department of the Treasury today announced the designation of two Lashkar-e Tayyiba (LET) leaders and founding members, Zafar Iqbal and Hafiz Abdul Salam Bhuttavi, pursuant to Executive Order (E.O.) 13224.

"Zafar Iqbal and Hafiz Abdul Salam Bhuttavi are two of LET's most significant leaders," said Under Secretary for Terrorism and Financial Intelligence David S. Cohen. "Over the past 20 years, Iqbal and Bhuttavi have been responsible for fundraising, recruitment, and indoctrination of operatives.  By targeting the core of LET’s leadership, today's action aims to degrade its ability to facilitate its terrorist activities.”

LET is a Pakistan-based terrorist group with links to the al-Qa’ida network and its former leader Usama bin Laden that is responsible for the November 2008 Mumbai attacks and July 2006 Mumbai train bombings. LET was designated by the U.S. pursuant to E.O. 13224 and named a Foreign Terrorist Organization in December 2001, and was added to the UN 1267/1989 list in May 2005.  Jamaat-ud-Dawa (JUD) was designated as an alias of LET under E.O. 13224 in April 2006 and was added to the UN 1267/1989 list as an alias of LET in December 2008. 

As a result of today’s action, U.S. persons are generally prohibited from engaging in transactions with Zafar Iqbal and Hafiz Abdul Salam Bhuttavi and any assets they may have in the U.S. are frozen.

Zafar Iqbal

Zafar Iqbal is a senior leader and co-founder of LET, has served in various LET/JUD senior leadership positions and was once considered LET/JUD’s second-in-command.  As of late 2010, Iqbal was in charge of LET/JUD’s finance department. Zafar Iqbal has also been involved in LET/JUD fundraising activities. As of 2008, he was identified as LET/JUD’s chief of fundraising, and in 2010, Iqbal was overseeing the construction of an LET/JUD facility.

From 2003 to 2010, Iqbal was also the director of LET/JUD’s education department. In this capacity, Iqbal has been involved in recruiting activities on behalf of the group and has prepared the curricula for schools run by LET/JUD in Pakistan. As of 2010, Iqbal was a joint secretary of a university trust created by LET/JUD to carry out activities on behalf of the group.

Iqbal formed LET in the late 1980s with current LET/JUD emir Hafiz Muhammad Saeed, designated by the U.S. pursuant to E.O. 13224 in May 2008, and by the UN in December 2008. In 1989 or 1990, Iqbal traveled to Jeddah, Saudi Arabia with LET/JUD emir Hafiz Muhammad Saeed to request financial support from Usama bin Laden.

Hafiz Abdul Salam Bhuttavi

Hafiz Abdul Salam Bhuttavi is a founding member of LET and deputy to LET/JUD emir Hafiz Muhammad Saeed. Bhuttavi has served as the acting emir of LET/JUD on at least two occasions, including when Saeed was detained in the days after the November 2008 Mumbai attack and held until June 2009. Bhuttavi handled the group’s day-to-day functions during this period.

Bhuttavi also helped prepare the operatives for the November 2008 Mumbai attacks by delivering lectures on the merits of martyrdom. Bhuttavi has issued fatwas authorizing LET/JUD’s militant operations, has instructed group leaders and members, and is responsible for LET/JUD’s madrassah network. In mid-2002, Bhuttavi was in charge of establishing an LET/JUD organizational base in Lahore, Pakistan.

Remarks by Treasury Secretary Tim Geithner on “America’s Leadership in the Multilateral Development Banks”

Hosted by the U.S. Chamber of Commerce and the U.S. Global Leadership Coalition

As Prepared for Delivery

WASHINGTON – In remarks to business leaders at an event hosted by the U.S. Chamber of Commerce and the U.S. Global Leadership Coalition this afternoon, Treasury Secretary Tim Geithner discussed the importance of maintaining America’s legacy of leadership and support for the Multilateral Development Banks (MDBs). During the discussion, Secretary Geithner emphasized the role of the MDBs in fostering opportunities for U.S. businesses, creating jobs for American workers and promoting our national security interests and humanitarian goals abroad. He also expressed appreciation for the recent Senate action in support of these programs and said that he looks forward to working with Congress in this critical period to maintain America’s leadership in these vital institutions. His remarks are as follows:

“Having emerged from crisis, the global economy today still faces a great many challenges, from a difficult recovery in the United States to ongoing uncertainty in Europe.  Here at home, we are intensely focused on creating jobs, increasing competitiveness, and laying a strong foundation for long-term prosperity.

“Stronger global growth is essential to achieving these objectives.  If the emerging markets and developing nations grow, we can export more.  We can expand our businesses.  We can hire more workers.  That is why U.S. leadership in global development matters—because if we are going to benefit from global growth, we need to support it.

“The multilateral development banks (MDBs) are vital contributors to this growth equation.

“First, these institutions help establish both the hard and soft economic infrastructure that is needed to connect countries with our farms and factories and to get our goods to new markets and consumers.  They help finance the roads, ports, bridges and railways that make commerce flow and economies prosper.  We’ve seen the results: our exports to countries that borrow from the MDBs amount to approximately 40 percent of our total exports, and this number is growing as more economies come online.  The MDBs help open markets in a way that promotes American values.  They implement policy reforms that include strict procurement processes and safeguards to strengthen property rights and protect the environment and vulnerable populations. Too often, the only alternative to MDB financing is low-cost financing from countries like China.

“Second, these institutions help economies transition to democratic and open markets.  In 1988, during the Reagan Administration, the United States made a one-time investment of $420 million for the World Bank’s capital increase.  That investment enabled $325 billion in development investments over two decades, creating new market economies in Central and Eastern Europe following the fall of communism, and restoring economic stability during the Mexican and Asian crises in the 1990s.  Today, the MDBs are playing the same role by supporting the transitions of the Arab Spring as young people and entrepreneurs seek support for their aspirations and growth.

“Finally, the MDBs play a critical role in helping economies prevent and recover from crises.  In 2008, these institutions provided $222 billion in financing to developing countries and reached more than 130 countries, representing more than 40 percent of the global economy and more than 30 percent of America’s export markets.  This stabilization was vital to restarting growth in American exports following the crisis, and their swift action helped restore trade finance at a pivotal moment.  The MDBs also help maintain the trade flows that are the lifeblood of the global economy.

“At a time when we face constrained resources at home, our investments in the MDBs are the most highly leveraged of our entire foreign aid portfolio, and they sustain our 60-year legacy of leadership and bipartisan support.  We know that American businesses are strong supporters of these investments.  We appreciate the recent Senate action in support of these programs and look forward to working with Congress to maintain America’s leadership in these vital institutions during this critical period.”​​

An Economist Goes to the Grocery Store

By Robert P. Murphy

As most people know, economists are a strange lot. We view the world from an unusual perspective. This allows us to see things that others miss — such as the obvious fact that Superman needs an agent — but alas, it renders us oddballs.

On a recent trip to the grocery store, it occurred to me that much of what I see during a typical outing differs from what carpenters, lawyers, and schoolteachers see.  As someone who worked in a grocery store for several years as a teenager, I am particularly qualified to write such an article, which will be either fascinating or tedious, depending on the taste of the reader.

What's So Super about This Market?

The first thing we should discuss is that the very notion of a "supermarket" is an innovation, reflecting the private sector's response to changing conditions. A century ago it made sense — especially in a densely populated city — for housewives to… (Read the full article)

Source: Mises.org

Secretary Geithner Visits UPS Worldport in Kentucky, Highlighting Importance of Investments in Infrastructure

Visit Underscores Need for Congress to Pass the American Jobs Act

LOUISVILLE, KY – Highlighting the need for Congress to pass President Obama’s American Jobs Act proposals to create jobs and invest in our nation’s infrastructure, Treasury Secretary Tim Geithner today toured UPS’s international air hub and met with local business leaders in Louisville, Kentucky.  As a company that interfaces with almost every facet of the country’s transportation system, UPS believes there needs to be immediate short term investment as well as long term planning to maintain and grow our transportation system.

“One of the most important parts of the President’s American Jobs Act is to put people to work right now rebuilding America’s infrastructure,” said Secretary Geithner. “In order to be as productive and efficient as possible, American businesses need the foundation of a strong, reliable, modern infrastructure – and that means they need government to do its part.  Investing in infrastructure creates good, middle-class jobs and helps our economy run at its full potential, which keeps us competitive and helps lower costs for businesses and consumers alike.”

“I am encouraged that both the President and Congressional leaders are working to develop bipartisan solutions to put people back to work, modernize and create an interconnected transportation system of ports, rails, roadways and runways, create jobs by expanding access to overseas markets for businesses large and small and reform America's tax system so we can get this economy moving again,” said Scott Davis, Chairman and CEO of UPS.

The Secretary’s visit highlighted the value government investment in 21st century infrastructure provides by increasing productivity and efficiency in our economy and strengthening the competitiveness of American businesses.  UPS estimates that a five minute daily delay for every UPS vehicle costs the company $100 million annually. Across the U.S., clogged roads cost our country at least $80 billion a year in lost productivity and wasted fuel.  Flight delays cost another $33 billion in lost productivity. 

With more than 137,000 flights worldwide in 2010, and more than 31,000 of those from the Worldport Facility, the cost of routine flight delays and traffic congestion have a significant effect on UPS’s bottom line.  Because UPS’s operations require interactions with every level of American infrastructure – beyond just roads and bridges – the Secretary’s visit also highlighted the need to invest in the next generation of systems to help modernize air traffic control and create a 21st century energy grid.  

Earlier this month, President Obama sent to Congress the American Jobs Act, which creates jobs and cuts taxes for middle-class Americans.  The President’s plan addresses the problem of our nation’s crumbling infrastructure while putting hundreds of thousands of workers back on the job with a strategy that combines immediate investments in infrastructure with innovative reforms to ensure that the best projects get financing.  These investments would put people to work now and yield lasting benefits for our economy.

For additional information on the American Jobs Act’s proposals to put Americans back to work while rebuilding and modernizing our infrastructure, see the White House fact sheet here: WhiteHouse.gov/the-press-office/2011/09/08/fact-sheet-and-overview.

September 2011 U. S. Economic and Housing Market Outlook

Monetary and Fiscal Stimuli

MCLEAN, Va., Sept. 26, 2011 /PRNewswire/ -- Freddie Mac (OTC: FMCC) released today its U.S. Economic and Housing Market Outlook for September showing the effect of monetary policy to date and why coupling monetary with fiscal stimulus could accelerate growth in 2012 if the fiscal initiative operates in tandem.

Outlook Highlights

·         The Federal Reserve's accommodative policy has resulted in the lowest interest rates since the early 1950s.

·         Ten-year constant-maturity Treasury yields had averaged 2.0 percent through September before the Federal Open Market Committee's statement, already on track for the lowest monthly average in the 60-year history of the series.

·         Thirty-year and 15-year single-family fixed rates attained new lows in Freddie Mac's Primary Mortgage Market Survey in September.

·         The likelihood of an extended period of both relatively low short- and long-term interest rates is helpful news for the housing market's recovery.

·         Coupling monetary with fiscal stimulus could accelerate growth in 2012 if the fiscal initiative operates in tandem.

Click here to view the complete September 2011 U.S. Economic and Housing Market Outlook [PDF]. Freddie Mac compiles data on major economic and housing and mortgage market indicators and offers forecasts based on those indicators.

Quotes

Attributed to Frank Nothaft, Freddie Mac, vice president and chief economist.

·         "Financial worries among consumers are likely holding back home sales, which remain lackluster despite the most affordable home-buying market in decades. Boosting job and income growth among households will support consumer confidence and also stimulate household formation.  With monetary policy expected to keep interest rates low for a while, affordability will remain high for potential homebuyers. In the meantime, many will choose to rent."

Get the latest information from Freddie Mac's Office of the Chief Economist on Twitter: @FreddieMac and @PublishPolitics

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.

SOURCE Freddie Mac

Former Microsoft Manager Sentenced to Prison for Embezzlement Scheme

Used Unwitting Third Party Vendor to Steal More Than $400,000

ROBERT D. CURRY, 41, of Seattle, Washington, was sentenced today in U.S. District Court in Seattle to 33 months in prison, three years of supervised release, and $459,341.63 in restitution for wire fraud. CURRY, a former management employee of Microsoft has agreed to repay the company for its losses as well as for the cost of the internal investigation of his criminal conduct. At sentencing today Chief U.S. District Judge Marsha J. Pechman noted that the public has grown increasingly outraged over those who lie to line their own pockets.

According to records filed in the case, CURRY worked as a manager in the online business development area of Microsoft. A highly regarded and well-paid professional with an MBA from Yale, CURRY claims he began the fraud scheme in 2010 when he was disillusioned with Microsoft because of an abusive manager. CURRY convinced one of the vendors he supervised to bill Microsoft for audio equipment he said had been purchased for X-Box 360 promotional events. In fact CURRY had purchased the equipment for his own use. Later, CURRY used the third party vendor to bill Microsoft for downloads of Microsoft’s search engine software. The third party later discovered that the download information was fraudulent, and that the money was passing into companies controlled by CURRY or his friends. Before the scheme was discovered, CURRY tried to embezzle an additional $1.3 million from Microsoft. In all CURRY defrauded Microsoft out of $459,341.

In their request for prison time, prosecutors noted that this was not a simple crime of opportunity. “Mr. Curry stole nearly half a million dollars from his employer in an intricate and sophisticated scheme that took deliberation and careful execution. This was not a hastily committed crime that would have been easily detected, nor was it something that was designed to be a one-time event. This crime was serious because of the careful efforts that Mr. Curry took to manipulate third parties, forge documents, and set up a shell company in a manner that indicated that he intended to continue to exploit his employer for as long as possible and for as much as possible,” the prosecutor wrote in her sentencing memo. The prosecutor also noted that CURRY was the third defendant this year to have been sentenced in this district for theft from Microsoft and urged the court to send a strong deterrent message to make clear that stealing from this company will not be tolerated.

The case was investigated by the FBI. The case was prosecuted by Assistant United States Attorney Katheryn Kim Frierson.

For additional information please contact Emily Langlie, Public Affairs Officer for the United States Attorney’s Office, at (206) 553-4110 or Emily.Langlie@USDOJ.Gov.

Economic Freedom around the World

By Robert A. Lawson

The key ingredients of economic freedom are

·         personal choice,

·         voluntary exchange coordinated by markets,

·         freedom to enter and compete in markets, and

·         protection of persons and their property from aggression by others.

These four cornerstones imply that economic freedom is present when individuals are permitted to choose for themselves and engage in voluntary transactions as long as they do not harm the person or property of others. Individuals have a right to decide how they will use their time, talents, and resources, but they do not have a right to the time, talents, and resources of others. Put another way, individuals do not have a right to take things from others or demand that others provide things for them. Use of violence, theft, fraud, and physical invasions are not permissible, but otherwise, individuals are free to choose, trade and cooperate with others, and compete as they see fit.

In an economically free society, the primary role of law is to protect individuals and their property from aggression by others. The EFW index is designed to measure the extent to which the institutions and policies of a nation are consistent with this protective function. In order to achieve a high EFW rating, a country must… (Read the full article)

Source: Mises.org

The Attack on Accidental Americans

By Wendy McElroy

​​​​ When Julie Veilleux discovered she was American, she went to the nearest US embassy to renounce her citizenship. Having lived in Canada since she was a young child, the 48-year-old had no idea she carried the burden of dual citizenship. But the renunciation will not clear away the past ten years of penalties with the Internal Revenue Service (IRS).

Born to American parents living in Canada, Kerry Knoll's two teenaged daughters had no clue they became dual citizens at birth. (An American parent confers such status on Canadian-born children.) Now the IRS wants to grab at money they earned in Canada from summer jobs; the girls had hoped to use their RESPs (registered education savings plans) for college.

The IRS is making a worldwide push to squeeze money from Americans living abroad and from anyone who holds dual citizenship, whether they know it or not. It doesn't matter if the "duals" want US status, have never set foot on US soil, or never conducted business with an American. It doesn't matter if those targeted owe a single cent to the IRS. Unlike almost every… (Read the full article)

Source: Mises.org

Treasury Department Announces Public Offerings of Warrants to Purchase Common Stock of Suntrust Banks, Inc.

WASHINGTON -- The U.S. Department of the Treasury announced today that it has commenced a secondary public offering of 6,008,902 warrants to purchase the common stock of SunTrust Banks, Inc. (the “Company”) (the “A Warrants”) and a secondary public offering of 11,891,280 warrants to purchase the common stock of the Company (the “B Warrants”). The proceeds of this sale will provide an additional return to the American taxpayer from Treasury’s investment in the Company beyond the dividend payments it received on the related preferred stock. The offerings are expected to price through a modified Dutch auction. Deutsche Bank Securities Inc. is the sole book-running manager and Lebenthal & Co., LLC is the co-manager for the offerings.

Deutsche Bank Securities Inc., in its capacity as auction agent, has specified that the auctions will commence at 8 a.m., Eastern Time, on September 22, 2011, and will close at 6:30 p.m., Eastern Time, on that same day (the “submission deadline”). During the auction period, potential bidders for the A Warrants will be able to place bids at any price (in increments of $0.05) at or above the minimum bid price of $2.00 per warrant, and potential bidders for the B Warrants will be able to place bids at any price (in increments of $0.05) at or above the minimum bid price of $1.05 per warrant.

The auction procedures, and the applicable exercise prices, expirations, and other terms of the warrants are described in the preliminary prospectus supplements referenced below.

The warrants are being offered pursuant to an effective shelf registration statement that has been filed by the Company with the Securities and Exchange Commission (the “SEC”). Preliminary prospectus supplements related to the offerings will be filed by the Company with the SEC and will be available on the SEC’s website at http://www.sec.gov. Copies of the final prospectus supplements relating to these securities may be obtained, when available, from Deutsche Bank Securities Inc., Prospectus Department, Harborside Financial Center, 100 Plaza One, Jersey City, New Jersey 07311-3988, telephone: 1-800-503-4611, or by emailing prospectus.cpdg@db.com. Before you invest, you should read the prospectus and prospectus supplements in the registration statement and other documents the Company has filed with the SEC for more complete information about the Company and the warrants.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

Treasury Announces Sale of Four SBA 7(a) Securities

WASHINGTON – Today, the United States Department of the Treasury announced the sale of four Small Business Administration (SBA) 7(a) securities executed through a Bid Wanted in Competition (BWIC) for approximately $62.1 million, which represents overall gains and income of approximately $1.8 million for those SBA 7(a) securities. The closing date for the four securities is expected to occur on or about September 23, 2011.

SBA 7(a) securities are comprised of the portion of loans guaranteed by the Small Business Administration which finance a wide-range of small business needs, including working capital, machinery, equipment, furniture, and fixtures.

Treasury originally invested in 31 SBA 7(a) securities with a value of approximately $368 million. Those securities were comprised of 1,001 loans from 17 different industries, including retail, food services, manufacturing, scientific and technical services, healthcare, educational services, and others. Treasury has now sold a total of 16 securities for approximately $213.6 million, representing overall income and gains of approximately $6.3 million. After the closing, Treasury will continue to hold 15 SBA 7(a) securities.

Treasury acquired its SBA 7(a) securities portfolio under the Troubled Asset Relief Program (TARP). Treasury purchased the securities in order to help restart the flow of credit to small businesses. Purchasing securities from participating “pool assemblers” enabled them to purchase additional small business loans from loan originators. Since Treasury began purchasing SBA 7(a) securities, the SBA 7(a) market has recovered, as exhibited by new pool issuance volumes returning to pre-crisis levels.

The disposition of these SBA 7(a) securities is part of Treasury’s ongoing efforts to wind down TARP. The Obama Administration will continue its strong commitment to ensuring that small businesses have the capital they need to create jobs and strengthen economic growth through the implementation of the Small Business Jobs Act and a number of other critical programs.

EARNEST Partners, which has acted as Treasury’s Financial Agent for the SBA 7(a) securities portfolio, will continue to execute the securities disposition through broker-dealers on behalf of Treasury. Prospective purchasers of SBA 7(a) securities held by Treasury should contact EARNEST Partners by e-mailing UCSBTeam@earnestpartners.com or by calling (404) 815-8772.

Federal Reserve Releases FOMC Statement

Information received since the Federal Open Market Committee met in August indicates that economic growth remains slow. Recent indicators point to continuing weakness in overall labor market conditions, and the unemployment rate remains elevated. Household spending has been increasing at only a modest pace in recent months despite some recovery in sales of motor vehicles as supply-chain disruptions eased. Investment in nonresidential structures is still weak, and the housing sector remains depressed. However, business investment in equipment and software continues to expand. Inflation appears to have moderated since earlier in the year as prices of energy and some commodities have declined from their peaks. Longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee continues to expect some pickup in the pace of recovery over coming quarters but anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate. Moreover, there are significant downside risks to the economic outlook, including strains in global financial markets. The Committee also anticipates that inflation will settle, over coming quarters, at levels at or below those consistent with the Committee's dual mandate as the effects of past energy and other commodity price increases dissipate further. However, the Committee will continue to pay close attention to the evolution of inflation and inflation expectations.

To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee decided today to extend the average maturity of its holdings of securities. The Committee intends to purchase, by the end of June 2012, $400 billion of Treasury securities with remaining maturities of 6 years to 30 years and to sell an equal amount of Treasury securities with remaining maturities of 3 years or less. This program should put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate.

To help support conditions in mortgage markets, the Committee will now reinvest principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. In addition, the Committee will maintain its existing policy of rolling over maturing Treasury securities at auction.

The Committee also decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013.

The Committee discussed the range of policy tools available to promote a stronger economic recovery in a context of price stability. It will continue to assess the economic outlook in light of incoming information and is prepared to employ its tools as appropriate.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen. Voting against the action were Richard W. Fisher, Narayana Kocherlakota, and Charles I. Plosser, who did not support additional policy accommodation at this time.

Rockefeller, J.P. Morgan, and War

By Murray N. Rothbard

During the 1930s, the Rockefellers pushed hard for war against Japan, which they saw as competing with them vigorously for oil and rubber resources in Southeast Asia and as endangering the Rockefellers' cherished dreams of a mass "China market" for petroleum products. On the other hand, the Rockefellers took a noninterventionist position in Europe, where they had close financial ties with German firms such as I.G. Farben and Co., and very few close relations with Britain and France.

The Morgans, in contrast, as usual deeply committed to their financial ties with Britain and France, once again plumped early for war with Germany, while their interest in the Far East had become minimal. Indeed, US ambassador to Japan Joseph C. Grew, former Morgan partner, was one of the few officials in the Roosevelt administration genuinely interested in peace with Japan.

World War II might therefore be considered, from one point of view, as a coalition war: the Morgans got their war in Europe, the Rockefellers theirs in Asia. Such disgruntled Morgan men as… (Read the full article)

Source: Mises.org

VIDEO: The America Invents Act: Turning Ideas into Jobs

Last Friday, President Obama signed the America Invents Act. This historic legislation will help American entrepreneurs and businesses get their inventions to the marketplace sooner so they can turn their ideas into new products and new jobs.

Central Banks Can Increase the Money Supply, Even If Banks Do Not Lend

By Thorsten Polleit

In today's fiat-money world, money is mostly produced through bank lending. Whenever a commercial bank provides credit to, say, consumers, firms, and government entities, it issues new money, thereby increasing the economy's money stock.

Economists from the Austrian School of economics call this kind of money production "money creation out of thin air," as the increase in money through bank circulation credit doesn't require the existence of real savings.

If money is produced through bank credit, one should expect a positive relation between changes in bank credit and changes in the money stock. Over longer periods there is detectable a positive and highly correlated relation between these two magnitudes.

Of course, any comovement of bank credit and the money stock wouldn't necessarily be "perfect" at all points in time. In fact, there might be periods in which bank-credit expansion can decouple from money growth.

For instance, banks can and do make clients shift from short-term deposits… (Read the full article)

Source: Mises.org

Fannie Mae Announces Auction (Reopening) of 5-Year Benchmark Notes® due September 28, 2016

Pricing/Auction Date:  September 19, 2011 

Settlement Date:  September 21, 2011 

Maturity Date:  September 28, 2016 

Issue Size/Reopen Size:  $1 billion 

Current Outstanding:  $4 billion 

Coupon:  1.250% 

Payment Dates:  Each September 28th and March 28th, beginning September 28, 2011 

CUSIP:  3135G0CM3 

Listing:  Application will be made to list the securities on the EuroMTF market of the Luxembourg Stock Exchange 

Auction Time:  10:30 a.m. — 11:00 a.m. EDT 

Fannie Mae exists to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a federal charter and operates in America's secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to home buyers. Our job is to help those who house America.

This press release does not constitute an offer to sell or the solicitation of an offer to buy securities of Fannie Mae. Nothing in this press release constitutes advice on the merits of buying or selling a particular investment. Any investment decision as to any purchase of securities referred to herein must be made solely on the basis of information contained in Fannie Mae's applicable Offering Circular, and no reliance may be placed on the completeness or accuracy of the information contained in this press release.

You should not deal in securities unless you understand their nature and the extent of your exposure to risk. You should be satisfied that they are suitable for you in light of your circumstances and financial position. If you are in any doubt you should consult an appropriately qualified financial advisor.

Benchmark Notes is a registered mark of Fannie Mae. Unauthorized use of this mark is prohibited.

Ron Paul Campaign Issues Response to Obama’s Jobs, Deficit Plan

“A $1.5 trillion tax hike will do nothing to help us out of this mess”

LAKE JACKSON, Texas – The Ron Paul 2012 Republican presidential campaign has released a statement in response to President Obama’s speech outlining his proposed jobs and deficit plan. See statement from Ron Paul 2012 National Campaign Chairman Jesse Benton below.

“President Obama’s job creation and deficit reduction plan will do nothing to combat joblessness or reduce the crushing debt that the federal government has accumulated and is still accumulating.

“That’s because when the President starts targeting the so-called rich, he’s really targeting small business owners, so ultimately he’s threatening the little guy.  The President’s plan, then, will result in a fatal broadside to the national economy from Main Street on down.

“The President’s class-baiting rhetoric categorizes Americans into opposing groups and pits them against one another, purely for his own political gain. This gets us nowhere as a nation, and nowhere closer to solving our economic problems.

“A $1.5 trillion tax hike will do nothing to help us out of this mess we’re in, and will more than likely create more problems, lead to less investment, and cause more job loss at a time when Americans of all kinds are hurting.

“President Obama and his administration refuse to confront the realities of our situation and the actions that are necessary. We must reduce spending, instead they pretend that the budget can be balanced and prosperity restored by increasing spending and taxes.

“Instead of raising taxes, this administration should cut corporate welfare, foreign welfare and end the trillion dollars overseas wars by bringing troops home.

“These would be sound policy actions, the kind that create prosperity and engender greater freedom. These are the kind of policies that a President Ron Paul will advocate for and institute to restore limited government principles and a strong America.”

Is Social Security a Ponzi Scheme?

By Robert P. Murphy

Ever since Rick Perry derided Social Security as a Ponzi scheme, economists and other pundits have jumped into the fray. Progressive blogger Matt Yglesias says it's "nuts" for anyone to talk like this, because Social Security merely relies on future economic growth — just like a private pension plan. Free-market economist Alex Tabarrok responded to Yglesias with links to arch-Keynesians (and Nobel laureates) Paul Samuelson and Paul Krugman, both comparing Social Security to a "Ponzi game."

In the present article I have three aims: First, I will point out that the critics are right; to the extent that Social Security "worked," it was because of its resemblance to a classic Ponzi scheme. Second, I will show how private-sector retirement planning operates nothing like this. Third, I will defend the good name of Charles Ponzi from the scurrilous comparisons — what he did was nothing like the racket known as Social Security.

Social Security's "Ponzi Game Aspects"

Paul Krugman is a famous guy with a long record of strong opinions. It's to be expected that periodically these will come back to bite him. His usual tack is to deny that… (Read the full article)

Source: Mises.org

Steve Jobs and the Beautification of Capitalism

By Jeffrey Tucker

The day that Steve Jobs resigned from Apple, hosannas for his life's work and accomplishments erupted from every corner of the earth (or the blogosphere, in any case). He was universally hailed as a genius. He was praised for changing and upgrading our lives in so many ways. He was treated as an innovator who dedicated himself to the well-being of society, and accomplished miracles none of us mere mortals could have imagined. He did more than dream; he acted and created one of the great companies on the planet, a company that has enabled us to live out our own dreams.

It's all true. This kind of language is not just welcome; it is magnificent. The same could be said of millions of great entrepreneurs both inside and outside the hardware and software sectors. Every time I slip on a pair of shoes, I think of the marvels of entrepreneurship and the division of labor that make my foot comfort possible. I have the same sense for those who make my refrigerator, provide lettuce for my salad, create alarm systems for my home and car, own and run chain stores that sell everything from pet food to paper clips, sell me insurance, build our homes and offices, and make it possible for me to buy a plane ticket with a few clicks on a computer — or finger swipes on a smartphone.

Every entrepreneur in society deserves such praise, and it is also correct to single out Steve Jobs, because his company seemed to push civilization a bit further down the road to progress with mind-blowing… (Read the full article)

Source: Mises.org