I spend a great deal of time looking at the various government reports, and especially the Payrolls report as you know. I keep my own spreadsheets with their data, and measure various changes in the way in which they calculate the seasonal adjustment factors, imaginary jobs, and prior revisions.

If I wish to leave you with one takeway, it is that the current use of the monthly headline number is more of a Sales and PR program for Wall Street and the government, and hardly the product of serious and thoughtful analysis of statistical data.

http://jessescrossroadscafe.blogspot.com/2012/02/charles-biderman-on-us-non-farm.html

The numbers are cooked beyond belief. Real Unemployment CBO 11.5%

Actual over 18%

The Swiss Competition Commission (Comco) has opened an investigation against UBS and Credit Suisse, as well as against more than ten foreign financial institutions.

Comco said on Friday it had received information regarding potential unlawful agreements among banks. Specifically, collusion between derivative traders which might have influenced the reference rates LIBOR und TIBOR.

Furthermore, market conditions regarding derivative products based on these reference rates might have been manipulated too.

Derivative traders working for a number of financial institutions might have manipulated these submissions by coordinating their behaviour, thereby influencing these reference rates in their favour.

Moreover, derivative traders might have colluded to manipulate the difference between the ask price and the bid price (spread) of derivatives based on these reference rates to the detriment of their clients.

http://www.swissinfo.ch/eng/business/Banks_suspected_of_cartel_activity_.html?cid=32056902

Part 1 or a larger conversation to follow; Warren Pollock and Karl Denninger (The Market-Ticker) – have a discussion which starts with Louis Freeh, MF Global, Vanishing Money, the Safety (or lack of) regarding brokerage accounts, physical world effects of MF Global on Farmers and Airlines. Solution suggestions for Farmers.

Is anyone going to be forced to cough up the MF Global Cash. If you or I receive stolen property we are liable to return the money to the rightful owner. Law has been eroding property protections via exceptions. We talk about illegal conveyance, the CME. We go on to question the safety of brokerage accounts. I (Warren) asked Fidelity investments if the same thing could happen in my brokerage account as what happens with MF Global.

http://youtu.be/Dsw4j_YwdLQ

If you don’t know the background start with Bethany McLean’s excellent article on Phil and Lisa Falcone in Vanity Fair. I think McLean tries too hard to be balanced on the key policy issue of spectrum and Lightsquared – but McLean offers a good introduction to the issues. By contrast Grassley is not balanced but he is right. Here is why.

There is an international body that administers a binding international treaty on how spectrum should be allocated. That body is the International Telecommunications Union.

The rules need to be binding because otherwise one country’s communications build-out could jam communications from another country. This is particularly important where countries are densely packed (like Europe) but is also important in the Americas especially regarding satellite spectrum. (After all spectrum use by Argentina could interfere with spectrum use by the United States if that spectrum is used by a geostationary satellite.)
This is – to put it mildly – audacious. And there is little doubt that American consumers would benefit from more wireless spectrum capacity.

But also to put it mildly it is a massive lean on the American taxpayer. You see if the spectrum had been auctioned like traditional spectrum the taxpayer would have received billions of dollars – dollars that will might now flow to Lightsquared and Falcone. Rarely have I seen taxpayers give away larger gifts to corporates (and that includes the banks) but in this case they are giving the gift to one slightly compromised billionaire and his hedge-fund clients. It is really hard – nay impossible – to see any policy basis for that gift.

But the FCC (the relevant regulator) rolled over and granted Falcone permission. McLean points out the political donations involved (they were large my the standards of most people, but tiny when billions of dollars are on the line). Falcone also hired the husband of a key FCC staffer to be a lobbyist. I shouldn’t be surprised – this is they way some billionaires make money in the US. But the regulatory birth of Lightsquared will cast a stain across its future and its financing – a stain that I hope Falcone can’t avoid.

Anyway I hope this post contributes to the end-failure of Lightsquared. Dirty or incompetent regulators make bad capitalism. If Falcone had obtained the spectrum the usual way, paying the usual number of billion dollars and dealing with interference issues (like GPS) in an open and transparent manner I would have no problems. As it is Falcone sickens me and Grassley is right on the money.
http://brontecapital.blogspot.com.au/2012/02/lightsquared-some-comments.html

There are times when one questions a report as possibly being wrong or in error, and then there are times when one has to raise a flag and say “This is an intentionally false picture being presented by a government agency.”

I’m in the latter camp with this one, and it is rare for me to brand something as not possibly wrong and in error, but intentionally fraudulent.

“Not in labor force” numbers leaped upward on an annualized basis (seasonally adjusted the “right way”) and what’s worse on a raw basis 1.572 million people exited the labor force last month.

http://market-ticker.org/akcs-www?post=201459

It’s the Leadership Stupid

The reason I put the Taleb quote at the top is because it is such a phenomenal interview and I request that every one reading this takes the time to listen to it this weekend even though it is very long. In the part just prior to the quote I used he talks about how society is now separated into three categories. The category that he has the most disdain for are those with “no skin in the game.” These are the self-proclaimed “elite” of the Western world today. This group is varied but generally consists of politicians, Wall Street executives, the CEOs of large state-connected and protected multi-national corporations and mainstream media “journalists” or as Gerald Celente likes to call them “presstitutes.” As Taleb notes, these “elites” have no honor or courage. They are groveling little manipulator parasites. They have created a world in which they are able to reap all of the upside and have no downside. When things go against them they just bail themselves out on the back of the rest of society.

http://www.zerohedge.com/news/mike-krieger-explains-why-its-leadership-stupid?

How is borrowing money based on fraudulent claims of asset value and future income any different from counterfeiting money?

Let’s compare three financial criminals. The first is an old-fashioned counterfeiter who doctors up paper and runs a printing press to produce fake currency.

The second criminal borrows money based on a fraudulent asset and phantom future income. For example, the criminal might obtain a credit card based on false assets and income, or borrow money against a property that is worth far less than he claims and base his credit on an inflated fantasy income he does not actually receive.

The third criminal borrows money from the Federal Reserve at zero interest and extends a loan to a fraudulent borrower because a government agency has guaranteed the loan. Whatever income the lender receives is pure gravy, and whatever losses are incurred when the fraud is uncovered are made good by the taxpayer.

Since our banking system is based on money being borrowed into existence (i.e. fractional reserve), then how is creating money unsecured by either assets or income any different from actually counterfeiting bills? The outcome is identical: money created out of thin air.

We might also ask: how is writing a derivative based on false claims of asset valuation any different from counterfeiting? Once again the creation of an “asset” that can be sold to unwary investors for cash that is based on fraudulent claims of valuation is the equivalent of counterfeiting currency: both add no productive goods or services to the economy and both are created out of thin air.

http://www.oftwominds.com/blogfeb12/counterfeit-debt02-12.html

A U.S. Justice Department source has told The Daily Caller that at least two DOJ prosecutors accepted cash bribes from allegedly corrupt finance executives who were indicted under court seal within the past 13 months, but never arrested or prosecuted.

The sitting governor of the U.S. Virgin Islands, his attorney general and an unspecified number of Virgin Islands legislators also accepted bribes, the source said, adding that U.S. Attorney General Eric Holder is aware prosecutors and elected officials were bribed and otherwise compromised, but has not held anyone accountable.

The bribed officials, an attorney with knowledge of the investigation told TheDC, remain on the taxpayers’ payroll at the Justice Department without any accountability. The DOJ source said Holder does not want to admit public officials accepted bribes while under his leadership.

Say it isn’t so! I mean, c’mon — there hasn’t been anything going on with bribery when it comes to, oh, Jefferson County in Alabama, right? We haven’t actually seen municipal officials go to prison while the banksters who booked outsized profits (and after all, for there to be a bribe someone must offer a bribe while someone else receives said bribe) walk around chuckling, right?

http://market-ticker.org/akcs-www?post=201420