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Wednesday 04.25.2012

Gold holds steady; eyes on Fed meeting
(Reuters) - Gold was steady around $1,642 an ounce on Wednesday, underpinned by stronger equities, but investors were also looking for hints of another round of quantitative easing when the U.S. Federal Reserve ends of its two-day meeting.

Is gold still cheap?
By: Steve Saville - GoldSeek.com
We addressed the above question last year and arrived at the answer: no, gold left bargain territory long ago. We remain bullish on gold not because we think gold is still cheap, but because we expect it to get a lot more expensive.
This isn't a "greater fool" game that we are playing, in that our belief that gold will become a lot more expensive over the years ahead isn't based on the expectation that people will be silly enough to pay a much higher valuation in the future for an asset that is already over-valued today. It is, instead, a position based on the observation that the world's most important central banks and governments remain committed to a course that ends in catastrophe for their economies and currencies. To put it another way, gold may well be expensive relative to the current economic backdrop, but it is cheap relative to what the economic backdrop will be 5 years from now if the current policy course is maintained. And at this stage there are no signs that the current policy course will not be maintained.

A Return to the Gold Standard,
or Gold Behind Currencies Part 5
Present Use of Gold in International Financial Dealings
BY JULIAN PHILLIPS - FinancialSense.com
B.I.S. Gold / Swaps
In 2011, according to the B.I.S.'s annual report, Central banks have pulled 635 tonnes of gold from the Bank for International Settlements in the past year, the largest withdrawal in more than a decade. The move, disclosed in the BIS annual report, marks a sharp reversal from last year when central banks added similar amounts to deposits of gold at the so-called "Bank for Central Banks". Why? First let's look at what Swaps are.
What are Swaps and who does them?
Swaps are financial instruments that allow for the exchange of one asset for another –in this case, gold for currency. They're not gold leasing, futures or options (which the 1999 and 2004 Central Bank Gold Agreement states would not be increased; the 2009 did not contain the statement). Swaps could be undertaken by the signatories of the CBGA as these were not included in any of the three Agreements.

Gold: 2012 is the year to accumulate Gold
CommodityOnline.com
NEW YORK: Many forces influence the gold markets today, sometimes producing confusing indicators of what may lie ahead. In this exclusive interview with The Gold Report, John LaForge, commodity strategist at Ned Davis Research Inc., talks about the numerous and sometimes not-so-obvious factors that he considers in his research and how they influence the gold markets and, ultimately, mining shares.
As long as there is no significant improvement in the world monetary situation and real interest rates don't rise dramatically, he believes the gold price trend remains positive and gold stocks should shine brighter.

The Hidden Role of Gold at the IMF
[see Rickards' interview videos on yesterday's archive]
By JAMES RICKARDS - USNews.com
The International Monetary Fund completed their spring meetings last weekend amid communiqués and good feelings about what had been accomplished. There was optimism about improvement in the global economy albeit tempered by warnings that risks remained. Christine Lagarde, the organization's managing director, was upbeat about new financing pledges to help build an IMF firewall to prevent contagion from countries in financial distress.
Yet, behind this facade of goodwill were stresses between the rising economic powers, notably Brazil, China, and India, and developed economies in Europe. In the middle of these stresses is the United States, which is the only country in the world with veto power over IMF decisions. To understand what is driving the International Monetary Fund today, it is necessary to look behind the jargon of the communiqués and examine the hardball politics actually playing out. These politics involve the U.S. response to the firewall, the relative voting rights of IMF members, and the hidden role of gold.

The UN Plan For Running The World:
Global Carbon Taxes, Global Safety Nets
And A One World Green Economy
By Michael Snyder - EndOfTheAmericanDream.com
Did you know that the UN has a plan for running the world and it is right out in the open? It is called "sustainable development", but it is far more comprehensive than it sounds. The truth is that the UN plan for running the world would dramatically alter nearly all forms of human activity. A 204 page report on "sustainable development" entitled "Working Towards a Balanced and Inclusive Green Economy, A United Nations System-Wide Perspective" has been published in advance of the upcoming Rio + 20 United Nations Conference on Sustainable Development in Rio de Janeiro. You can read the full report right here. It envisions a vast system of global carbon taxes, massive global safety nets and the implementation of a one world green economy. Many of those that are pushing "sustainable development" on a global level believe that they are doing it for the good of the planet.

The Pain in Spain, Debt Spiral and Housing Market Crash
By: John Mauldin - MarketOracle.co.uk
It really does seem to be All Spain All the Time, but there is a reason. Unlike Greece, Spain makes a difference to the eurozone. It may be both too big to allow to fail and too big to save. Last week I came across a very informative 50-page PowerPoint on the situation in Spain from Carmel Asset Management. It is too big to send, but I asked Jonathan Carmel to draft a smaller document with some of the key points. I find it compelling. You can access the entire PowerPoint on my website. If you are not registered with me, you will need to enter your email address and, if you would, your zip code or country. There is a lot if information and data in the report. It will certainly make you think.

Why the United States Isn't Europe
Conservatives like to fret that the United States is turning a giant European-style welfare state. But our big government and banking rules are what keep us from becoming Europe.
By Matthew O'Brien - TheAtlantic.com
The last few years have been a tale of two currency unions.
On one side of the Atlantic, you have the euro zone. It features a dysfunctional group of state economies that don't necessarily make sense together. Bailouts, recession, and general doom have been the norm lately. On the other side of the Atlantic, you have the United States. It features a dysfunctional group of state economies that don't necessarily make sense together. Bailouts, recession, and ... no, wait. Growth has been disappointing since 2009, but the American economy has grown. Europe would be thrilled with our disappointing growth.

Earth to Ben Bernanke
Chairman Bernanke Should Listen to Professor Bernanke
By PAUL KRUGMAN - NYTimes.com
When the financial crisis struck in 2008, many economists took comfort in at least one aspect of the situation: the best possible person, Ben Bernanke, was in place as chairman of the Federal Reserve.
Bernanke was and is a fine economist. More than that, before joining the Fed, he wrote extensively, in academic studies of both the Great Depression and modern Japan, about the exact problems he would confront at the end of 2008. He argued forcefully for an aggressive response, castigating the Bank of Japan, the Fed's counterpart, for its passivity. Presumably, the Fed under his leadership would be different.

Bernanke's goal: Keep out of the corner
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — The Federal Open Market Committee is expected to only tweak its economic forecasts at its two-day meeting this week, keeping all its options on the table given cross currents in recent economic data, analysts said.
Federal Reserve Chairman Ben Bernanke may use his press conference on Wednesday to clarify what conditions would warrant a change in policy, said Tim Porcelli, chief U.S. economist at RBC Capital Markets.
The FOMC starts its two-day meeting on Tuesday, and on Wednesday will announce its interest-rate decision at 12:30 p.m. Eastern.
The FOMC will then release its quarterly growth, unemployment and interest-rate forecast at 2 p.m., followed by a press conference with Bernanke at 2:15 p.m.

Fed Statement to Set Market's Tone
BY CHRIS CIOVACCO - FinancialSense.com
The markets advanced early Tuesday after a report on home sales exceeded forecasts. On the earnings front, AT&T (T) and 3M (MMM) came in above consensus. With an important Fed statement and a durable goods report coming on Wednesday, we will be monitoring our market models, support, and moving averages closely.
After the recent rise in Spanish and Italian bond yields, it is possible the market is expecting too much from Wednesday's Fed statement. From a bullish perspective, any hint of additional Fed asset purchases in the central bank's statement could give a tired market a bullish injection.

America's Alternate Economic Reality
For those who increasingly see government as the engine of the economy, acceptance of the unthinkable has become routine.
By J.T. YOUNG - The American Spectator.org
Despite enormous federal spending, deficits, and debt, many Americans remain relatively unconcerned. With evidence of uncontrolled debt's consequences so clear in Europe, how can so many so easily ignore it at home? The answer is that competing economic realities divide America, obscuring our fast-approaching tipping point.
Under the President's own budget and estimates, the deficit this year will be $1.327 trillion. If correct, this will be the fourth consecutive budget deficit over $1 trillion and the highest deficit since 2009. Prior to this, America had never had one deficit over $1 trillion.

BOE's Miles Says April Vote for More Stimulus Vindicated
By Scott Hamilton and Svenja O'Donnell - Bloomberg.com
Bank of England policy maker David Miles said his vote for more so-called quantitative easing this month still looks vindicated as the economy is weak and data today might even show it contracted in the first quarter.
"The weakness of demand, given the amount of spare capacity in the economy, still made a strategy of having monetary policy even more expansionary the right one," Miles said in an interview in London yesterday. "On reflection that seems to me still the right strategy."

Nightmare week for Angela Merkel as austerity bloc crumbles
Europe's political centre is starting to crumble, replicating the pattern of the early 1930s as the crisis ground into its third year under a similar mix of fiscal and monetary contraction.
By Ambrose Evans-Pritchard - Telegraph.co.uk
Elected governments have already been swept away - or replaced by EU technocrats without a vote, indeed to prevent a vote - in every eurozone state where unemployment has reached double-digits: Spain (23.6pc), Greece (21pc), Portugal (15pc), Ireland (14.7pc) and Slovakia (14pc).
The political carnage has been striking. Ireland's Fianna Foil, creator of the Irish free state, has lost every seat in Dublin. Greece's Panhellenic Socialist Movement (PASOK) - torch-bearers of Greek democracy since the Colonels - has fallen to 14pc in the polls and faces ruin next month.

Cost of Spain's Housing Bust Could Force a Bailout
By LANDON THOMAS Jr. and RAPHAEL MINDER - NYTimes.com
By any measure, the Spanish real estate boom was one of the headiest ever. Spurred by record-low interest rates, Spaniards piled into holiday villas along the Costa Brava, gaudy apartments in Madrid and millions of starter homes throughout the country.
But since the frenzy drove Spanish home prices to a peak in 2007, they have fallen by at least one-fourth, and the bottom seems nowhere in sight. AsSpain endures its second recession in three years and unemployment nears 25 percent, an increasing number of debt-heavy Spaniards can no longer meet monthly payments on the mortgages that their banks were all too eager to give.

Dutch Debt "On Edge of Downgrade",
Central Banks Add to Gold Reserves
By: Ben Traynor - MarketOracle.co.uk
SPOT MARKET gold prices climbed to $1643 an ounce Tuesday lunchtime in London – a 1.2% gain from yesterday's low, but still below Friday's close – as Eurozone concerns focused on the Netherlands after yesterday's government collapse.
Based on the PM London gold fix, gold prices remain 3% below their 200-day moving average.
Silver prices rallied back above $31 an ounce by Tuesday lunchtime – though they remained around 2% off where they began the week – while European stock markets edged higher following Monday's steep drop and commodities also made gains this morning.
The Euro meantime regained a bit of ground against the Dollar, though remained below last week's close, with the Federal Open Market Committee due to announce its latest monetary policy decisions tomorrow.

U.S. Lost AAA on Danger of Liquidity Crisis,
S&P's Kraemer Says
By Jennifer Ryan - Bloomberg.com
The U.S. lost its top credit grade in August because of the imminent danger of a "real liquidity crisis," and Standard & Poor's made no errors in its analysis, said Moritz Kraemer, managing director of sovereign ratings.
"Last summer, the U.S. government got extremely close to a real liquidity crisis because the Washington establishment could not agree on the way forward that would have been required to raise the debt ceiling," Kraemer told lawmakers on the U.K. Parliament's Treasury Committee today in London.

Housing downturn spurs a boom
in foreclosure-to-rental conversions
By Brady Dennis - WashingtonPost.com
Gene Richards is a lifelong Vermonter, but on a recent weekday afternoon he found himself back on Florida's west coast, scouting foreclosures to add to the collection of rental properties he has amassed in the wake of the housing crisis.
"I just started buying them and I haven't stopped. I have 15 right now, and I'd buy another 15," said Richards, 51, who runs a mortgage company and also owns rental properties back home in Burlington, Vt. "This to me is a no-brainer of an investment."
With home prices at historic lows and rental rates on the rise, Richards and a growing number of investors with cash to spare are seeking lucrative returns by gobbling up foreclosures in distressed markets across the country and turning them into rentals.

Case-Shiller home price report
paints pessimistic picture for Charlotte market
Charlotte Business Journal by Susan Stabley, Staff Writer
Standard & Poor's released its monthly Case-Shiller Home Price Index today, which includes previously missing sales data from Mecklenburg County.
The monthly index tracks 20 metro areas, but the Case-Shiller report released last month only gave home price statistics for 19 areas for the year ending in January.
But now that information is in, and the results reflect a declining residential real estate market for the Charlotte metro area.

Housing Market Rebound
Not Likely To Happen In Our Lifetimes: Shiller
HuffingtonPost.com
NEW YORK, April 24 (Reuters) - The U.S. housing market is likely to remain weak and may take a generation or more to rebound, Yale economics professor Robert Shiller told Reuters Insider on Tuesday.
Shiller, the co-creator of the Standard & Poor's/Case-Shiller home price index, said a weak labor market, high gas prices and a general sense of unease among consumers was outweighing low mortgage rates and would likely keep a lid on prices for the foreseeable future.
"I worry that we might not see a really major turnaround in our lifetimes," Shiller said.

Millions More U.S. Homeowners to Rent, Pimco's Simon Says
By Jody Shenn and Tom Keene - Bloomberg.com
The U.S. homeownership rate may fall two percentage points to 64 percent, below historic norms, amid about six million additional foreclosures and tight lending standards, according to Pacific Investment Management Co.'s Scott Simon.
"You may be turning another 4 million homeowners into renters," Simon, the mortgage-bond head at Newport Beach, California-based Pimco, said in an interview on Bloomberg Television's "Surveillance Midday" with Tom Keene.

Real House Prices and Price-to-Rent Ratio at late '90s Levels
by CalculatedRisk
Another Update: Case-Shiller, CoreLogic and others report nominal house prices. It is also useful to look at house prices in real terms (adjusted for inflation) and as a price-to-rent ratio.
Below are three graphs showing nominal prices (as reported), real prices and a price-to-rent ratio. Real prices, and the price-to-rent ratio, are back to late 1998 and early 2000 levels depending on the index.

Three hidden costs of the foreclosure crisis
The country's foreclosure problem is only halfway over: CRL
By Amy Hoak, MarketWatch
CHICAGO (MarketWatch) — Recent statistics show foreclosure activity is declining, but the nation's foreclosure problem is far from over. What's more, the drawn-out foreclosure crisis has lasting consequences for those who have lost their homes as well as the communities surrounding them.
Five million foreclosures have occurred since 2007, according to the Center for Responsible Lending, a nonprofit that works to protect homeownership by fighting predatory lending practices. And the crisis is only halfway over: There are 3 million to 5 million more foreclosures expected in the next couple of years, according to the center's best estimate.

HARP 3.0? California to Change Foreclosure Laws?
MGIC and SunTrust Results
BY ROB CHRISMAN - MortgageDailyNews.com
From the New York Times Science sections comes, "While baboons can't read, they can tell the difference between real English words and nonsensical ones, a new study reports. Baboons can master a basic element of reading, says a French team. "They are using information about letters and the relation between letters to perform the task without any kind of linguistic training," said one psychologist. He and his colleagues worked with six baboons that were given free access to touch-screen computers, which displayed four-letter sequences. If a baboon tapped the screen when the sequence was a real word, it received a treat. "The animal realizes what to do in order to get a reward," Dr. Grainger said. "And they remember the words; they didn't forget them." A similar study is being done on guys who send out daily mortgage commentaries...

Made in USA... once again?
A New Trend "Sneaking up on People"
By Chris Mayer - DailyReckoning.com
04/23/12 China has lost its edge.
There was lots of skepticism about a piece in my March letter called "The Great Comeback No One Will Believe" about the revival of U.S. manufacturing as China loses its cost advantage. But I continue to find evidence that the piece was spot on.
I had a good talk with Scott Huff, a principal at Innovate International, which does product development work and contract manufacturing for several industries. Scott's story is worth passing on because the arc of his career in the last 10 years tells the story better than any set of statistics.

Kansas mass layoffs rise for first time this year
Kansas City Business Journal by Brenna Hawley, Web Reporter
Kansas mass layoffs increased in March for the first time this year, with 11 such events compared with five a year earlier, the U.S. Department of Labor reported Tuesday.
Mass layoff events are characterized as involving at least 50 workers from a single employer.
The number of people affected more than doubled. In March, 1,588 Kansans made initial claims for unemployment insurance, up from 727 a year prior, the report said.

1,165 Colorado workers cut in March 'mass layoffs'
Denver Business Journal by Mark Harden, New Media Editor
Colorado saw nine "mass layoffs" of 50 or more workers at a time in March, with a total of 1,165 workers let go, the U.S. Labor Department reported Tuesday.
That compares to six mass layoffs of 478 workers in February, and five mass layoffs of 557 workers in March 2011, the Labor Department's Bureau of Labor Statistics reported.
The layoff totals are based on initial filings of claims for unemployment benefits.

Return of Debtors' Prisons:
Breast Cancer Survivor Jailed for $280
Submitted by Michael Allen - OpposingViews.com
In Herrin, Illinois, Lisa Lindsay recently went to jail because she got a $280 medical bill by mistake and was told she didn't have to pay it.
The Associated Press reports that the bill was turned over to a collection agency, police later showed up at her home and took her to jail. Illinois is now considering a bill banning this modern day practice of debtors' prisons.
Even though the U.S. banned debtors' prisons in the 1830s, more than a third of U.S. states allow the police to arrest people in who don't pay debts, from health care services to credit card and auto loans; all at the behest of corporate America.
Under some state laws, debtors are arrested, not for the actual debt, but failing to respond to court hearings and pay legal bills that they may not even owe.

Families Study Plan B With Possible Stafford-Loan Rate Spike
By ANNAMARIA ANDRIOTIS - WSJ.com
The rates on popular federal student loans could shoot up before the next academic season, depending on the outcome of a political battle brewing in Washington.
A provision in a law that has kept rates down on subsidized Stafford loans is set to expire June 30. After that, rates will jump to 6.8%—double the current rate. President Barack Obama has asked Congress to extend for another year the lower rates, which are part of the College Cost Reduction and Access Act of 2007. Some Republicans, however, have said they are concerned about the cost of keeping the current rates, which the nonpartisan Congressional Budget Office has said will cost $6 billion for one year.

Hospital of Cards
Mises Daily: by Andrew Foy, MD
The US healthcare system is a huge bubble fueled by misguided policies that are sustained by the government's ability to borrow money at artificially low interest rates. When either the policies change or the flow of credit to the US government stops, the bubble will burst.
For some perspective on the magnitude of the healthcare bubble consider that from 1990 to 2007 the cost of all items, as measured by the Bureau of Labor Statistics (BLS), rose by 159 percent while housing rose 163 percent and medical care rose a staggering 216 percent. A recent study by the Kaiser Family Foundation found that between 1999 and 2011, health-insurance premiums increased 168 percent while workers' total earnings increased only 50 percent. Over that same time period, government spending on healthcare increased 240 percent while GDP increased 62 percent. The BLS reported that over the last 50 years, the percent of workers employed in private-sector healthcare has gone from 3 percent to over 11 percent and employment has continued to grow throughout the current recession. BLS further projects that "Healthcare will generate 3.2 million new wage and salary jobs between 2008 and 2018, more than any other industry," and that "The number of wage and salary jobs in pharmaceutical and medicine manufacturing is expected to increase by 6 percent over the 2008–18 period, compared with 11 percent projected for all industries combined."

Argentina: A Lesson for America?
Argentina nationalizes YPF
as cracks in the global economy grow.
Is there a warning for the U.S.?
BY ROBERT MORLEY - theTrumpet.com
Argentina holds the dubious distinction of being the only First World nation to become Third World. If it is any consolation, it won't hold that title for long.
America holds a couple of dubious distinctions too. It is the richest nation in the world. Yet, it is also its most indebted. One in seven Americans is being actively pursued by debt collectors. America also has the world's largest military. But to pay for it, it has to beg money from one of its biggest rivals, China.
Americans are either ignorant or think they are immune to the lessons of history.
Argentina once thought it was immune to history too.

Shift on Executive Power Lets Obama Bypass Rivals
By CHARLIE SAVAGE - NYTimes.com
WASHINGTON — One Saturday last fall, President Obamainterrupted a White House strategy meeting to raise an issue not on the agenda. He declared, aides recalled, that the administration needed to more aggressively use executive power to govern in the face of Congressional obstructionism.
"We had been attempting to highlight the inability of Congress to do anything," recalled William M. Daley, who was the White House chief of staff at the time. "The president expressed frustration, saying we have got to scour everything and push the envelope in finding things we can do on our own."

Obama's Latest Plan to Snooker Seniors
GAO outs $8 billion Medicare Advantage
"demonstration project" as an election year scam.
By DAVID CATRON - The American Spectator.org
For years, the President and his congressional accomplices have been telling us that the Medicare Advantage (MA) program is too costly. As Obama claimed during a 2009 interview with ABC's George Stephanopoulos: "We are spending a lot of money subsidizing the insurance companies around something called Medicare Advantage.… And if we eliminate that and other programs, we can potentially save $200 billion…" This canard was the pretext for the massive slashes in MA funding he authorized when he signed Obamacare into law. As the election year approached, however, the President's reelection team evidently noticed a potential problem -- the seniors most likely to be affected by these MA cuts were due to find out about them just a few weeks before the November election.

Ex-TSA Head: Stop Searching for Knives
By JIM AVILA and BEN FORER - ABCNews.com
The Transportation Security Administration has become a necessary inconvenience for most travelers as the list of prohibited items has increased and the lines for screenings continue to serpentine through many airport departure halls. But former TSA administrator Kip Hawley says the system is broken and it doesn't have to be this way.
Hawley, who ran the TSA from 2005 to 2009, insists that to do a better job of preventing terrorist attacks more TSA officers should roam the airport, asking questions and watching shady characters, instead of screening passengers at checkpoints. He says the frustrating security checkpoints that alienate passengers and do little to stop Al Qaeda need to be streamlined.

For first time since Depression,
more Mexicans leave U.S. than enter
By Tara Bahrampour, WashingtonPost.com
A four-decade tidal wave of Mexican immigration to the United States has receded, causing a historic shift in migration patterns as more Mexicans appear to be leaving the United States for Mexico than the other way around, according to a report from the Pew Hispanic Center.
It looks to be the first reversal in the trend since the Depression, and experts say that a declining Mexican birthrate and other factors may make it permanent.
"I think the massive boom in Mexican immigration is over and I don't think it will ever return to the numbers we saw in the 1990s and 2000s," said Douglas Massey, a professor of sociology and public affairs at Princeton University and co-director of the Mexican Migration Project, which has been gathering data on the subject for 30 years.

Hillary: Playing Roulette With the Russians
By Ken Blackwell - PatriotPost.us
Editor's Note: This column was co-authored by Bob Morrison
Secretary Hillary Clinton was at the Naval Academy recently. She went there to deliver a prestigious Forrestal Lecture. And she was well received by the 4,000 Midshipmen and hundreds of students attending the Naval Academy Foreign Affairs Conference.
One Midshipman asked Sec. Clinton about the killing of Osama bin Laden. Hillary responded with poised professionalism. She crisply outlined all the steps that were taken and the vast, complex operations that had to come together in time and space to bring success. She tells the story well. And, interestingly, she gives no hint of envy that it was Barack Obama who got to make that critical call, not Hillary herself.

Hitler Back in Print
Bavaria Plans New Edition of 'Mein Kampf'
Spiegel.de
The southern German state of Bavaria, which holds the copyright to Adolf Hitler's polemic "Mein Kampf," hasn't allowed the book to be published in Germany since the end of World War II. But the copyright expires in 2015, and there are concerns that neo-Nazis might immediately begin disseminating the work once Bavaria can no longer prevent its publication.
But now Bavaria has announced it will take its own steps to limit the damage the book might cause. Bavarian science minister Wolfgang Heubisch announced on Monday that the state would publish an annotated version of the book. By including commentaries on the text debunking Hitler's arguments, the state government hopes that readers will not be seduced by the Nazi leader's propaganda.

Reinventing the Sino-American Relationship
By Michael Spence - Project-Syndicate.org
MILAN – China and the United States are in the grip of major structural changes that both dread will end the Halcyon era when China produced low-cost goods and the US bought them. In particular, many fear that if these changes lead to direct competition between the two countries, only one side can win.
That fear is understandable, but the premise is mistaken. Both sides can and should gain from forging a new relationship that reflects evolving structural realities: China's growth and size relative to the US; rapid technological change, which automates processes and displaces jobs; and the evolution of global supply chains, driven by developing countries' rising incomes. But first they must acknowledge that the old pattern of mutually beneficial interdependence really has run its course, and that a new model is needed.

US wades into China-Philippine standoff
By Al Labita - ATimes.com
MANILA - China has beefed up its naval might around the Scarborough Shoal in the South China Sea, threatening a clash as the United States and Philippines hold joint military exercises in the vicinity of the potentially energy rich disputed maritime territory.
In a show of force, a state-of-the-art Chinese vessel, the Yuzheng 310, is now on patrol near the Scarborough Shoal, raising the strategic ante as its maritime standoff with the Philippines heads into a second week. Certain news reports have suggested as many as five other Chinese patrol vessels are now in the area.

North Korea's nuclear test ready "soon"
By Benjamin Kang Lim
BEIJING - (Reuters) - North Korea has almost completed preparations for a third nuclear test, a senior source with close ties to Pyongyang and Beijing said, an act that would draw further international condemnation following a failed rocket launch.
The isolated and impoverished state sacrificed the chance of closer ties with the United States when it launched the long-range rocket on April 13 and was censured by the U.N. Security Council, which includes the North's sole major ally, China.

U.S. urges North Korea not to engage in provocation
(Reuters) - U.S. Defense Secretary Leon Panetta urged North Korea on Tuesday not to engage in any provocation that could increase instability, as speculation mounts about a possible third nuclear test.
"I do not have any specific information as to whether or not they will proceed or not with additional provocations at this time," Panetta said on a trip to Brasilia, when asked about the possibility of a nuclear test.
"But I again would strongly urge them not to engage in any kind of provocation - be it nuclear testing or any other act - that would provide greater instability in a dangerous part of the world."

Israel ready to strike Iran, Lebanon, Gaza,
says Israeli Armed Forces Chief of Staff
Lt Gen Binyamin Gantz spoke to Israeli daily Yedioth Ahronoth. This will be a crucial year. As Iran's nuclear threat must be stopped, Israel is preparing for a possible conflict.
AsiaNews.it
Tel Aviv (AsiaNews/Agencies) - Israel is ready, if necessary, to strike Iran, Lebanon and Gaza, Israeli Armed Forces Chief of Staff Lt Gen Benny Gantz said in an interview with top Israeli daily Yedioth Ahronoth. For him, the year 2012 will be critical to halt what Israel and much of the international community believe is an Iranian nuclear arms programme. "We think that a nuclear Iran is a very bad thing, which the world needs to stop and which Israel needs to stop-and we are planning accordingly," Gantz said on the eve of Israel's 64th anniversary as a state.

- - - - - cyber-security news - - - - -

Russian cybercriminals earned $4.5 billion in 2011
Russian mafia took control and professionalized online crime in 2011, researchers say
By Loek Essers - Computerworld.com
IDG News Service - Russian-speaking hackers earned an estimated $4.5 billion globally using various online criminal tactics and are thus responsible for 36% of the estimated total of $12.5 billion earned globally by cybercriminals in 2011, Russian security analyst firm Group-IB said in a report published on Tuesday.
In the report, Group-IB differentiates between cybercriminals living in Russia and Russian-speaking cybercriminals, who include citizens of the countries of the former Soviet Union and other countries. In the 28-page report the researchers estimate that the total share of the Russian cybercrime market alone doubled to $2.3 billion, while the whole Russian-speaking segment of the global cybercrime market also almost doubled, to $4.5 billion. The researchers noted that the Russian-speaking segment of the global cybercrime market traditionally encompasses twice the amount of the Russian segment.

Interview with SANS' Ed Skoudis:
America losing the cybersecurity war to hackers
By Darlene Storm - Conputerworld
As much as we don't like to hear about it, America is not winning the cyberwar. Malicious hackers are winning and China has penetrated "every major U.S. company." But there are elite cyber warriors who protect the world from cybercrime and the USA desperately needs more Cyber Guardians. In advance of the second annual Cyber Guardian information security training event in Baltimore next week, April 30 - May 7, 2012, I had an opportunity to interview Ed Skoudis about the SANS Cyber Guardian program.
Skoudis is a security expert on hacker attacks and defenses, a world-renowned author and senior security consultant with InGuardians. He's demonstrated hacker techniques against financial institutions for the U.S. Senate and frequently speaks at security conferences. He is also a SANS Faculty Fellow who teaches thousands of information security professionals how to improve their skills and better defend their networks.

Inventor of the WWW Trash-Talks CISPA
by Michael del Castillo - Portfolio.com
The inventor of the World Wide Web wants the Internet to be free and open, and he doesn't think the Cyber Intelligence Sharing and Protection Act is a good idea.
The act, known as H.R. 352, is widely presented by advocates as essential to national security by protecting part of the United States' infrastructure, though detractors are quick to point out it's implications for intellectual property and, therefore, free speech.
In an interview with the Guardian, Tim Berners-Lee, who in 1989 invented the World Wide Web, has come out in clear opposition of the act.

[It] is threatening the rights of people in America, and effectively rights everywhere, because what happens in America tends to affect people all over the world. Even though the SOPA and PIPA acts were stopped by huge public outcry, it's staggering how quickly the US government has come back with a new, different, threat to the rights of its citizens.

Macs more likely to carry Windows malware than Mac malware, Sophos says
75% of Mac OS X infections involve a Flashback variant, Sophos finds
By Lucian Constantin - Computerworld.com
IDG News Service - One in five Mac computers is likely to carry Windows malware, but only one in 36 is likely to be infected with malware specifically designed for the Mac OS X, according to study performed by antivirus firm Sophos.
Sophos collected malware detection statistics from 100,000 Mac computers that run its free antivirus product and found that 20% of them contained one or more types of Windows malware.
When stored on a Mac, Windows malware is inactive and can't do any harm, unless that computer has Windows installed as a secondary OS.

* * * * * IMPORTANT * * * * *

DNS Changer Malware is serious -
find out if you computer is infected.

Non-invasive link for USA check: http://www.dns-ok.us
if background is 'green' you're OK; if RED, not OK - seek antivirus software alternatives to restore system to normal.

DNS Changer - Information & links for other countries
The FBI is seeking information from individuals, corporate entities and Internet Services Providers who believe that they have been victimized by malicious software ("malware") related to the defendants. This malware modifies a computer's Domain Name Service (DNS) settings, and thereby directs the computers to receive potentially improper results from rogue DNS servers hosted by the defendants.

Use this link if you live outside USA:
Information on how to determine your DNS settings, along with other technical details about DNSChanger.

Read Mark Bowden's book (hardcover & Kindle),
Worm: The First Digital World War

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