Federal Judge Blocks Crackdown on Employers of Illegal Immigrants

A federal judge in San Francisco barred the Bush administration today from threatening to prosecute businesses for knowingly employing illegal immigrants if they fail to fire workers whose Social Security numbers don't match government records.

U.S. District Judge Charles Breyer issued a nationwide preliminary injunction barring the government from enforcing the so-called no-match rule, which was scheduled to take effect last month but was blocked by temporary restraining orders from Breyer and another judge.

The rule, if implemented, "would result in irreparable harm to innocent workers and employers," Breyer said.

Labor unions are challenging the 'no-match rule', arguing it would cause problems for legitimate workers, who because of clerical errors, end up with a wrong number associated with their name.

Russia Cuts Bank Reserve Requirements

Russia joins the club of countries facing a liquidity squeeze started by the US subprime crisis, resulting in Russia’s central bank lowering its minimum reserve requirements for banks.

Alexei Ulyukayev, Russia’s first deputy central banker, told reporters the central bank had also accepted banks’ credits as collateral for loans for the first time as part of a package to boost liquidity.

Ulyukayev said the first such loan was extended to state-controlled VTB, which received Rbs6.9bn ($277m) at an annual rate of 7.5 per cent, using the bank’s credits to state-run Rosneft as collateral.

The central bank has been pumping about $2.5bn into the system every day via one-day repo auctions since the last week in September. Ulyukayev has warned refinancing demands could rise to $12bn-$15bn per day in October and November.

Chrysler Strike Ends in Less Than 7 Hours

The United Auto Workers announced late in the afternoon that it had reached a tentative agreement with the nation's No. 4 automaker.

More than 32,000 UAW members at the automaker had gone out on strike at 11 a.m. ET after an all-night negotiating session failed to get a deal by the union-set deadline.

The UAW ended its strike against Chrysler less than seven hours after it began Wednesday.
Just after 5 p.m., the union issued a statement saying the strike would be recessed because of the tentative deal.

Track Your Purchases As They Happen at Xpenser

Track your spending via SMS, email, IM, or voice (via Jott) with web application Xpenser. After you sign up, you'll need to set up your account with your IM and SMS information and set up Jott to use with Xpenser (if you want to do voice tracking). After you're all set up, adding expenses to a report (you can create any number of reports and set a default for new additions) is as simple as, for example, texting something like "exp lunch 35.4 with Jack, Jill" to Xpenser.

If you've ever had trouble keeping up with your expenses for the month, especially if you need to track your business expenses, Xpenser aims to be a simple, universally accessible solution for getting your expenses recorded as soon as they happen Xpenser.
-via Lifehacker

Treasury Targets Financial Empire of Colombian Trafficker

Here's another group that will be diversifying into the euro.

The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) today added to its list of Specially Designated Narcotics Traffickers seven individuals and 14 companies tied to Colombian narcotics trafficker Juan Carlos Ramirez Abadia (a.k.a. Chupeta). Among those designated today are key financial associates of Ramirez Abadia, including Diego and Tulio Alzate Jimenez, and a Colombian currency exchange and money remittance company (casa de cambio).

Juan Carlos Ramirez Abadia, who was identified as a Specially Designated Narcotics Trafficker by OFAC in August 2000, was arrested in Brazil on August 7, 2007. He was previously indicted on federal drug trafficking charges in Colorado in 1994 and the Eastern District of New York in 1995 and 2004. In 2004, Colombia's North Valle drug cartel was indicted in the District of Columbia under the federal Racketeer Influenced and Corrupt Organizations Act. Juan Carlos Ramirez Abadia was identified in this U.S. indictment as one of the cartel's leaders.

Diego Uriel Alzate Jimenez, Luis Holmes Alzate Jimenez, and Tulio Hernando Alzate Jimenez are among the primary shareholders of Cambios y Capitales S.A., which is headquartered in Bogota, Colombia. One of the brothers, Tulio Hernando Alzate Jimenez, was indicted on federal narcotics-trafficking and money- laundering charges in the Southern District of Florida in 1994. The Alzate Jimenez brothers are also owners of Andinaenvios AN EN S.A., a courier and money remittance business located in Quito, Ecuador, which was also designated today by OFAC.

Another key group of financial associates for Juan Carlos Ramirez Abadia identified by OFAC today are the Lopera Barbosa siblings. Adriana Lopera Barbosa, Jairo Humberto Lopera Barbosa, and Juan Carlos Lopera Barbosa own and manage four Colombian companies, including Coinemp S.A. and J.A.J. Barbosa y Cia. S.C.S., that act as real estate holding firms to hide the assets of Ramirez Abadia. Another Ramirez Abadia front person, Nelson Salazar Lugo, helps manage the Colombian tourism company Turismo Hansa S.A. The Alzate Jimenez brothers and the Lopera Barbosa siblings also play ownership and management roles in Turismo Hansa S.A. on behalf of Juan Carlos Ramirez Abadia.

Today's announcement marks OFAC's third action targeting the assets of Ramirez Abadia since 2006. In August 2006, OFAC designated the Colombian pharmaceutical distribution company Disdrogas Ltda. along with Ramirez Abadia's parents, who were managing the company on his behalf. On August 15, 2007, OFAC designated several of Ramirez Abadia's key lieutenants as well as a theme park (Parque Yaku) and a paso fino horse breeding farm (Criadero Santa Gertrudis S.A.) located near Cali, Colombia.

Higher Prices for High Priced Food

The Zagat Survey today released the results of the 2008 New York City Restaurants survey, its 29th annual guide.

This year's guide covered 2,069 restaurants with input from a 34,678 frequent diners. Prices were generally steady in New York, but Zagat's reports inflationary trends look quite different at the city's 20 most expensive restaurants where an average meal now runs $143.06. Since 2001, dinner prices at the city's elite have soared at an average of 11.6% per year, from $84.45 to . $143.06.

Tipping in New York now averages 19% per check - barely above Zagat's U.S. average (18.9%). Among the nation's most generous customers are Philadelphia (19.4%), New Orleans (19.3%) and New Jersey (19.2%) with left-coasters in San Francisco and Los Angeles being among the least generous at 18.4%.

When it comes to who eats out most, New Yorkers are also average at 3.3 times per week, which is also the U.S. average. Texans take a clean sweep for dining out most, with Houston at 4.2 times per week, and Dallas/Fort Worth and Austin/Hill Country both 4.0 times per week.

(Pictured above, bacon wrapped monkfish with lobster, English peas, potatoes "pont neuf" and a savoy jus, from Zagat's Number One rated New York City restaurant, Daniel)

Sub-Saharan Stock Index Launched

A financial index has been launched for sub-Saharan Africa, allowing investors to track market activity in the region.

The index is the creation of the investment bank Renaissance Capital.

The Renaissance Capital Index is composed of the top 50 companies in 21 countries across the continent, from Senegal to Mozambique.

"You're talking about a region that has 15% of the world's population, 20% of the world's land mass, but only produces 2% of global output at this stage. Against that backdrop sub-Saharan Africa is actually increasing its exports to China, whereas the rest of the world is doing quite the opposite," John Bates of Renaissance told the BBC.

During the Milken Institute Global Conference in Beverly Hills, CA this spring, both Michael Milken and Carlyle Group David Rubenstein singled out Africa as a land with abundant investment opportunities.

China Has World's 2nd Longest Rich List

China has more billionaires than any country except the United States, as soaring stock and property prices helped to boost wealth among the country's super-rich, researcher Rupert Hoogewerf reports.

The number of Chinese worth $1 billion or more jumped to 108, from 15 last year, growing much faster than in western countries, according to Hoogwerf.

Hoogewerf whose Chinese name is Hu Run is well-known in China for tracking down the country's super-wealthy over the last four years. Despite some questions of the accuracy of the wealth rankings, his list of the top 100 richest people has exerted increasing influence in China.

U.A.W. Workers Walk Out at Chrysler

The United Automobile Workers union walked off the job at Chrysler LLC this morning after the two sides failed to reach agreement on a new four-year contract by a union-set deadline.

National Association of Realtors Slashes Forecast for Existing Home Sales

The eighth straight downwardly revised forecast from the National Association of Realtors calls for U.S. existing home sales to be 10.8 percent below last year.

In its October report, the association predicts 5.78 million existing homes will be sold in 2007, down from 6.48 million last year.

Based on the forecast, This year's existing home sales would be the lowest since 2002, when sales hit 5.63 million.

New home sales are projected to fall to 805,000 this year down 23 percent from 1.05 million last year. If that forecast is accurate, it would be the worst year since 1997, when 804,000 newly constructed homes were sold.

Indian Rupee Hits New High Against Dollar

The Indian rupee is participating in the silent collapse of the dollar. The rupee has risen to its highest level against the dollar since 1998.

In trading earlier today, it cost 39.32 rupee to buy one dollar. The rupee has risen more than 12% against the dollar since the start of the year.

Will the Gulf Co-Operation Council States De-Peg from the Dollar?

Keep an eye on inflation in the GCC sates. Inflation is heating up there, and it is largely the result of their peg to the U.S. dollar.

Except for Kuwait, which in May dropped the dollar peg in favour of a basket of currencies, the remaining five GCC states continue to keep their currencies linked to the dollar.

The dollar peg is causing increasing inflation across these GCC states.

The United Arab Emirates’s official inflation rate for 2006 was 9.3 per cent, but international agencies place it above 10 per cent.

In 2006, the annual inflation reached 11.8 per cent in Qatar, 3.2 per cent in Oman, and 3.0 percent in Kuwait and Bahrain, and 2.2 per cent in Saudi Arabia.

This year, inflation in Kuwait hit 5 per cent in the first quarter and in Saudi Arabia it increased to 3.1 per cent.

Because of their dollar peg, the GCC states (with the new exception of Kuwait) must print money to support the dollar at the current peg. With the dollar collapsing against most currencies around the world, the GCC printing that must go on to support the dollar is increasing. This new money is at the heart of increasing domestic GCC inflation.

It appears that most GCC states are trying to hold out until 2010 when a GCC monetary union is planned, before doing anything about the dollar peg. However, increasing inflation may force the hand of other GCC states to follow the lead of Kuwait and de-peg.

In the meantime, the GCC vulnerability to the dollar may slow GCC dollar denominated investments. Currently, The GCC invests nearly 25 per cent of its oil revenues in dollar-denominated assets, according to a study by the Federal Reserve Bank of New York. But with the dollar collapse, this is investing in a depreciating asset.

Will the GCC sates de-peg? They should. Otherwise, they are making their citizens pay, through inflation, for reckless U.S. monetary policy.

Goldman Sachs Shares Hit All-Time High

Goldman Sachs Group Inc shares surged 5.4 percent today to an all-time high.

Goldman Sachs shares closed up $12.24 at $239.20 on the New York Stock Exchange, eclipsing the previous record of $233.97 set on May 31.

Last month, Goldman, the largest securities firm in the world by market capitalization, reported a 79 percent rise in third-quarter profit. In contrast, Merrill Lynch reported a $5.5 billion writedown for the same quarter.

The Fed on Inflation, the Wall Street Journal on the Fed on Inflation

The Fed minutes are out for the Fed's September 18th FOMC meeting and the stock market is soaring.

The minutes include the expected recognition by the Fed of the downturn in the housing sector:

The housing sector remained exceptionally weak. Home sales had dropped considerably this year: Sales of new and existing single-family homes in July were down substantially from their averages over the second half of last year. Demand was restrained by deteriorating conditions in the subprime mortgage market and by an increase in rates for thirty-year fixed-rate conforming mortgages. In the nonconforming mortgage market, the availability of financing to borrowers recently appeared to have been crimped even further. Most forward-looking indicators of housing demand, including an index of pending home sales, pointed to a further deterioration in sales in the near term. Single-family starts slid in July to their lowest reading since 1996, and adjusted permit issuance continued on a downward trajectory. Although single-family housing starts had come down substantially from their peak, the drop had lagged the decline in demand, and as a result, inventories of new homes had risen considerably. In the multifamily sector, starts in July were in line with readings thus far this year and at the low end of the fairly narrow range seen since 1997. Meanwhile, house prices generally continued to decelerate.

Of note, it appears the Fed dissed the Bureau of Labor Statistics employment data:

Although employment probably was not as weak as the most recent monthly data had suggested...

But, the real curiosity in the minutes appears to be on the inflation front. The Wall Street Journal sent out an email alert to its subscribers, with the headline:

WSJ NEWS ALERT: Fed Was Confident of Inflation Drop

The first line of the alert read:

"A united Federal Reserve was increasingly confident last month that inflation no longer posed a significant threat..."

The WSJ online story about the Fed minutes is headlined:

Fed Unanimously Saw Inflation As Less Threatening, Minutes Show

The WSJ quoted this from the minutes:

Officials "recognized that incoming data on core inflation continued to be favorable, and they generally were a little more confident that the decline in inflation earlier this year would be sustained," the minutes said.

Now with these headlines and quote, you would think the Fed had somehow determined it had made successful inroads in the battle against inflation and, thus, interest rates were headed much, much lower. Why keep interest rates up if inflation is under control?

Well, here's the rest of the story. The Fed minutes on inflation in more context:

Participants made only modest revisions to their outlook for inflation in the period since the Committee's last regular meeting. Still, they recognized that incoming data on core inflation continued to be favorable, and they generally were a little more confident that the decline in inflation earlier this year would be sustained...They also agreed that the inflation situation seemed to have improved slightly and judged that it was no longer appropriate to indicate that a sustained moderation in inflation pressures had yet to be shown. Nonetheless, all agreed that some inflation risks remained and that the statement should indicate that the Committee would continue to monitor inflation developments carefully.

In short, this is typical Fed double-talk. They cut the Fed funds rate by 50 basis points. They weren't going to, at the same time, say inflation was a threat. If the inflation numbers they watch jump up in the months ahead, they will most assuredly phrase their Fed minutes with inflation "concerns".

The Fed comments, in our view, have very little implication for where the Fed's stance on inflation will be six months or even two months from now. The Fed has no "stance" on anything. The Fed is driving by the seat of its pants, reacting to whatever set of data is in front of them on the day they meet. They have no long term views. They aren't "confident" about anything.

India's Stock Market Hits New High

India's main stock index, the Sensex, has gone past the 18,000 mark to reach a new intraday high.

On September 26, the Sensex crossed the 17,000 mark for the first time, although it fell back later in the day.

The gain to 18,00 is the fastest ever 1,000-point gain for the Sensex, achieved in just six trading sessions. The index had taken 51 trading sessions to get from 15,000 to 16,000.

Foreign funds have invested almost $10bn in Indian stocks this year, and inflows rose again after the US Federal Reserve cut interest rates in September.

Indian shares have risen more than 25% in 2007.

Alert: This Afternoon's Debate is on the Economy

CNBC, MSNBC and the Wall Street Journal will be hosting today's debate between Republican presidential candidates.

The debate will focus mainly on business and economic issues and begin at 4 p.m. ET from Ford Community and Performing Arts Center in Dearborn, Michigan.

The two-hour debate will be broadcast live on CNBC and re-broadcast on MSNBC at 9 PM ET.

Qatar Energy Minister Says Oil Prices Should Top $100

"If we take into account inflation from 1972 to the present day, the real and fair price for oil should be more than 100 dollars," said Qatar's energy minister, Abdullah bin Hamad Al-Attiyah, in remarks aired by Al-Jazeera television.

He said such a price was justified by rising inflation, a fall in purchasing power and the weakness of the dollar, which has dropped about 10 percent in value against the euro over the past year.

Alert: Group of 7 Meeting

Finance ministers will be meeting in Washington D.C. on October 20 and 21.

Eurozone Ministers Seek Renminbi Rise

The three most senior eurozone policymakers – Jean-Claude Trichet, the European Central Bank president, Jean-Claude Juncker, chairman of the finance ministers’ group, and Joaquin Almunia, the European monetary affairs commissioner – will visit China before the end of this year to discuss exchange rates and other issues.

In a statement issued after a meeting in Luxembourg, the ministers broke new ground in listing the low exchange rate of China’s currency ahead of the weak dollar and the yen as a cause for European concern.

They said: “In emerging countries with large and growing current account surpluses, especially China, it is desirable that effective exchange rates move so that necessary adjustments occur.”

OPEC Adds to U. S. Treasury Holdings

OPEC members increased their holdings of Treasuries 12 percent this year through July to $123.8 billion, Treasury Department data show.

Petroleum exporters are adding to holdings of U.S. debt three times faster than other foreign investors. OPEC's members, including Saudi Arabia, Kuwait and Venezuela, bought a net $13.6 billion of Treasuries this year through July, according to the most recent data available.

Let's see how happy OPEC is with this investment once inflation kicks up.

Google and Apple Hit New Highs

The Fed's money printing machine is working. Both Google and Apple hit 52 week highs today:

Google (GOOG) at at $601.45.

Apple (AAPL) at $165.02

Alan Greenspan, Roger Ailes and Cheap Shots

Alan Greenspan in his new book, The Age of Turbulence, is highly critical of President George Bush for his failure to control the budget deficit.

In today's Wall Street Journal, a week before Ailes launches Rupert Murdoch's new channel, the FOX Business Channel, Ailes goes on the attack against Greenspan.

When WSJ asks him, "What do you think of Alan Greenspan's recent criticisms of President Bush?," Ailes replies,"You can't sell a book in America if you don't dump on Bush. That's the cheapest shot in the world. You cannot get an advance, and you can't sell a book because the publishers are all people who hate Bush and hate Republicans."

Of course, since Greenspan is right and has the facts on his side, it is Ailes who is taking the cheap shot.

If Ailes is going to use FOX Business as a propaganda tool of the Bush Regime, CNBC will have nothing to worry about. You can pull that propaganda stuff with general news, but you can't with business news.

The interview goes on to hint that Ailes may also be looking to recruit CNBC's Erin Burnett for FOX Business. He took a swipe at the way CNBC is using Burnett:

This new woman that they're overusing because she's on now 15 hours a day, Erin Burnett, is a good talent. But she's gonna age. She'll only last another year, the way they're working her....So, I hope, at some point she steps up and says, "I need water; I need a little break here."

Does Roger Ailes have his eye on Erin Burnett? Does she want to become a Bush groupie?

Australian Dollar at 23-Year High Against U.S. Dollar

The silent collapse of the dollar continues. Last week, it was the Canadian dollar which hit a 31 year high against the U.S. dollar. This week it is the Australian dollar soaring against the U.S. dollar.

The Aussie's dollar traded intraday today at $0.9031, a 23-year high against the U.S dollar.

The Week Ahead

Tuesday: Fed releases minutes from its September meeting, when rates were cut a half-point.

Friday: Producer Price Index numbers for September released.

Friday: Bernanke speaks via video to a Fed conference group in Dallas.

SCHULTZ: Gold at $1600, Silver at $45

The dean of investment newsletter writers, Harry Schultz, is forecasting a $1600 per ounce gold price for 2008 and a $45 per ounce silver price.

Schultz has been publishing the International Harry Schultz Letter for over 40 years. For any text messaging youth who think they have come up with new hip abbreviated spellings as a fast way to communicate, they should know that Schultz is way ahead of them. He has been using abbreviations such as U, for decades.

Peter Brimelow reports that in his latest letter, Sir Harry writes:

Gold is starting into the most exciting part of its long-term bull market, the so-called second (and monetary) phase. Herein we normally see the biggest percentage gains, matched by biggest corrections as we saw in the '70s gold rush: in 1974, gold corrected 25% in 4months (most gold shares fell 50-70%); in 1975-76 gold fell 50% (most shares fell 70-90%) and took 21/2 years to get back to old high before then rocketing to new highs. But that makes for great trading opportunities. This is the phase where the BIG money is made, by those who go with the tides. In and out, in and out...

Schultz has lived through bull markets and bear markets in gold and the most important fact to take out of the quote above is that even in great bull markets in gold, there are periods when gold has severe pullbacks. Many remember the great bull market in gold of the 1970's, but it is the great traders, like Schultz, who remember the pullbacks.

Greenspan's Bathtub Analysis of the Housing Market

Alan Greenspan is quite proud of the fact that he does a lot of his analytical work in the bathtub. Yesterday on CNN's “Late Edition with Wolf Blitzer”, Greenspan broke down the minutiae of the current housing situation. We can only assume this was bathtub analysis:

What our problem currently is, is the fact that we have got more than 200,000 newly constructed homes for sale in inventory. And that is twice what ordinarily would be the case — or I should put it this way, it is a 200,000 excess, and the absolute level of inventories of new homes is approximately eight months when the normal is usually four. What that means is that builders around the country having a very large stock of new and deteriorating new homes, are beginning fire sales in the marketplace, and prices are beginning to fall. At this stage we are already in the price decline. And the difficulty that we have is that even though housing construction has come down very significantly, it is just basically a shade below where sales are, which means that the inventory rate of liquidation is very small.

And in his 212th try at deflecting blame from himself for the sub-prime crisis, he actually came pretty close to fully getting it:

The subprime market per se would not have been a problem if we had not securitized a very substantial amount of loans, meaning that what a lot firms — Wall Street firms did was take large bundles of subprime mortgages, and because geographic diversification improves the quality of those loans, put them in package and sold them all over the world. The problems that we are experiencing and frankly we just now seem to be getting out of it, were largely the consequence of the corrosive effect of mis-pricing a lot of those loans. … There was a lot of egregious activity. As I said in the speech in London the other day, a goodly part of this is that the demand for subprime securitized mortgages was very high because the rate of return was very high. And at that time, home prices were rising significantly quickly so that foreclosures and delinquencies in subprimes were really small. … We are close [to] the end of this particular phase of it. In other words, we are beginning to see markets come back and come back normally.

But, he did get nutty with his forecast:

...the odds of a recession over the next six to nine months have gone up from about a third, which is where I thought it was about in March, to somewhat between a third and a half.

What kind of forecast is this? With those kind of forecasts, I can be a meteorologist in your region of the world. Tomorrow, there will be a 50/50 chance of rain. I'll be right if it rains, or if it doesn't.