Captain Morgan shows the Somalian Pirates how it's done

While the amateur Somalians are busy raiding rich tourists and cargo ships, Captain Morgan knows that far bigger booty lies in the pockets of American politicians, not just because they're fat. They're stupid too.

clipped from www.bloomberg.com Lawmakers and the public are just now discovering some of the curious subsidies tucked into TARP. Governor John deJongh Jr. agreed to give London-based Diageo Plc billions of dollars in tax incentives to move its production of Captain Morgan rum from one U.S. island -- Puerto Rico -- to another, namely St. Croix. The Diageo deal started shortly after deJongh took office in 2007. The governor says the company contacted him to say it planned to leave Puerto Rico after having decided the U.S.V.I. might be a better location to produce Captain Morgan. [as in they were already planning to move] The U.S.V.I. will give subsidies representing as much as 44.5 percent of tax revenue to Diageo. Diageo also qualifies for additional tax incentives, reducing its U.S.V.I. tax liabilities to as low as 3.5 percent, from 35 percent. The $2.7 billion Diageo tax break in the October bailout bill gives the most financial aid to a non-U.S. company. Diageo, which had a stock market value of 21 billion pounds ($35 billion) as of June 8, reported net sales of 5.07 billion British pounds in 2008. Revenue from selling rum accounted for 5 percent of Diageo’s income. [do the math on the value of the subsidy relative to product revenue on this one] Still, Captain Morgan, named for Henry Morgan, the 17th-century Jamaican privateer, is a major driver of earnings for Diageo, spokeswoman Zsoka McDonald says. [well, it is now!]

A guesstimate is not a lie, just bullshit

To quell concerns of constituents that the stimulus plan will do nothing but enslave future generations to foreign creditors and inflation the Administration has enlisted the help of the stimulus recipients (the needy greedy governors) by asking them to round up their guesstimates of how many jobs Federal money created.
Good thing we have plenty of bored economists and statisticians to point out the inevitable inaccuracies in employment statistics that will result from government clerks who can barely flip burgers at Mickey D's attempting to cook the books.

clipped from online.wsj.com President Barack Obama had promised that the stimulus plan would save or create 3.5 million jobs. Republicans have criticized the plan and the reliability of the administration's numbers. The latest Wall Street Journal/NBC poll suggests growing public doubts, with 39% of those surveyed saying the stimulus is a "bad idea," up from 27% in January. Meanwhile, some state officials worried about how they were supposed to count jobs credited to the stimulus. Now, the White House Office of Management and Budget has given states guidance calming these concerns. Recipients won't be asked to grapple with complicated estimates, he added. Instead, they may use their best guess whether a job would have been created or saved in the absence of a recovery plan, and to not count it if they are uncertain. Philip Mattera, research director for the economic development research group Good Jobs First, said the method appeared to be "a bit impressionistic" and presented pitfalls.

Soros confuses CDS for Puts

The apparently attrocious payout scheme of a CDS that Soros illustrates is remarkably similar to (as in exactly the same as) that of a vanilla Put option. Should those be outlawed as well?
There is no doubt option volume has a "reflexive" effect on the underlying stocks as well. The reason for this, however (and Soros even points this out himself), is because dumb money eventually follows smart money and smart money likes smart instruments (derivatives) that they can tailor precisely to their views on any particular aspect of a firm. The fact that professionals are expressing their views (in CDS' case on "adverse developments" affecting an issuers' credit rating) only leads to greater market efficiency and quicker fair price discovery.
Companies don't fail because evil speculators shorted/wrote puts on their stock or bought protection on their bonds. They fail because their management fucked up.

clipped from www.guardian.co.uk "CDS are instruments of destruction which ought to be outlawed," Soros told a meeting of the Institute of International Finance. Going short on bonds by purchasing a CDS contract carried limited risk but almost unlimited profit potential. By contrast, selling CDSs offered limited profit and practically unlimited risk, Soros said. Soros said: "People buy a CDS not because they expect an eventual default but because they expect them to appreciate in response to adverse developments." "It's like buying life insurance on someone else's life and owning a license to kill," he concluded. He said derivatives should be standardised and saw no case for custom-made derivatives, which he said only increased the profit margins of the financiers who tailored them. Soros' criticism echoes fellow investor Warren Buffet's description of derivatives in 2003 as "financial weapons of mass destruction".

Rob the Rich: Forced Charity

Yes We Can... fund universal healthcare by taxing the very people who have no need for it. The bourgeoisie have squeezed the juices of the proletariat with their mighty kulak to quench their unpatriotic greed long enough! Now we shall drain the very marrow from their spines (and harvest the stem cells therein)!
We’ll hit them hard on their mortgages. Sure, we're disincentivizing the people who can actually afford to buy a house and create upward momentum in the housing market, thereby generating positive equity for every homeowner organically. Homeowners facing foreclosure and looking for a handout are one of our strongest constituencies, why would we not want to grow it?
We'll cap their investment gains. Markets are the engine of the capitalist machine. We want to keep them going at precisely our chosen speed limit, and we are pouring billions into the enforcement of our arbitrary laws. Of course we see no need to disband the SEC, their peccadilloes, like ignoring evidence of Madoff's scam, pale in comparison to their ability to choke vehement short sellers and regulate other speculators out of existence.
We’ll decide how much the rich give to charity too. The only worthwhile charity is the one the government deems necessary: funding the socialist welfare state.
Oh, and just to make sure that they don't keep trying to persevere and prosper despite the shackles we have put on them we will change tax code so their estate goes to the government after they die. Bourgeoisie progeny can get in the bread line with everyone else.

clipped from www.bloomberg.com Democrats Weigh Health Mandate as Obama Urges Taxing Wealthy The president is trying to avoid broad-based levies such as a Senate proposal to tax some employer-provided health benefits Axelrod said. Instead he is urging lawmakers to reconsider limiting all tax deductions for Americans in the highest tax brackets. Obama is “mindful” about how “ordinary Americans are able to foot the bills.” Obama’s own proposal would set a 28 percent cap on tax deductions for items such as mortgage interest, investment expenses and charitable gifts Obama also proposes new taxes on securities dealers and life insurers, and to raise revenue by prohibiting certain estate-planning techniques. The plan would place new restrictions on private insurers, including a bar on excluding coverage for those with “pre-existing conditions.” The effort to overhaul health-care would affect a sector that makes up 17 percent of the U.S. economy.

Expect the USD IRS market to explode...

...but don't play taps for the USD just yet.
First of all, the CCB doesn't speak for China in any official capacity (like the PBC does), and secondly Shuqing's intent in these remarks is to strengthen the Yuan's global authority, rather than hedge against US' looming inflation risk. Of course Xiaochuan and Medvedev are arguing precisely this point - the fundamental weakness and instability of America's currency due to the country's tremendous leverage. That is why they want another currency, or most likely a basket like SDR, to replace the USD. All signs point to this eventually happening, but the Dollar's demise will be a painful, political, and most importantly lengthy process (of course no political process is ever efficient, so that's a moot point).

That being said,the USD is going to keep depreciating, with a few bounces in between, as America has little alternative to printing more greenbacks. Well you know, aside from fiscal responsibility anchoring free-market capitalism.

clipped from www.telegraph.co.uk The head of China's second-largest bank has said the United States government should start issuing bonds in yuan, rather than dollars, in the latest indication of the increasing importance of the Chinese currency. Guo Shuqing, the chairman of state-controlled China Construction Bank (CCB), also said he is exploring the possibility of issuing loans to trading companies in yuan, allowing Chinese and foreign companies to settle their bills in yuan rather than in dollars. Mr Guo said the issuing of yuan bonds in Hong Kong and Shanghai would help to develop the debt markets in China and promote the yuan as a major international currency. Two months ago, before the G20 meeting in London, Zhou Xiaochuan, the head of the People's Bank of China, the central bank, published a personal paper proposing to replace the dollar as the international reserve currency. His call came after Wen Jiabao, the Chinese premier, asked the US to guarantee the safety of China's huge pile of US debt.