HIDDEN VALUE

Dear Value Seeker,

Yesterday, the “Big Three” automakers came to Washington with a plan: ask for even more money.

GM wants $18 billion, with $4 billion for December’s bills.

Chrysler says it needs $7 billion in the next few months.

Ford is after $9 billion…but only as a precaution. It feels pretty confident it can make it without help.

After all, Ford’s sales fell only 31% year-over-year in November. GM and Chrysler both saw sales for the same period tumble by over 40%.

In exchange for $34 billion in taxpayer money, the automakers promised major restructuring, reduced labor costs (that’s right, it’s promising to fire employees in return for taxpayer backing) and the sale of some product lines.

The CEOs even said they would even work for $1. (Never mind that their salaries only make up about 10% of their overall pay packages.)

But decades of waste and mismanagement aren’t forgotten

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2009 could the first global recession since the 1930s, according to a UN report. But John Crooks says forex traders can use the economic slump to make big profits. He picks four currencies that will be “on the chopping block” for 2009.

This from The Sovereign Society:

The U.N. is predicting the first worldwide recession since the 1930s … for 2009. If that wasn’t bad enough, developed nations are supposed to shrink up to 1.5%. “It seems inevitable that the major countries will see significant contraction in the immediate period…even if the bail-out and stimulus package succeed,” according to the report. In other words, the recession may have spared Black Friday 2008, but next year, the worldwide recession will cut into worldwide spending even further. In the currency markets, you can already see that four currencies will suffer next year as the U.N.’s prophecy comes true…

The Four Currencies

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Two of the top emerging markets are grappling with food production and costs - resulting in higher prices in the months to come. The outlook for China and Brazil could portend higher grain prices, giving investors a chance to cash in on a potential rebound.

China’s higher food costs would result from a regulatory change, while Brazil’s food supply is feeling the pinch of tighter credit. In both cases, grain supplies will be affected.

In China, the government scrapped its 11-month interim price control measures on grain and some food products starting from this month after inflation began to drop.

Inflation had taken its toll on Chinese consumers, with food the biggest contributor to lower consumer spending.

For example, in January of this year food prices in China bolted a staggering 18.2% over the previous year as consumer prices rose 7.1%. By April, food prices were up 22.1% over the same period in 2007

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This article gives you a very clear picture (pardon the pun) of the horrible air pollution in China. "A noxious cocktail of soot, smog and toxic chemicals is blotting out the sun, fouling the lungs of millions of people and altering weather patterns in large parts of Asia, according to a report released Thursday by the United Nations."

This article gives you a very clear picture (pardon the pun) of the horrible air pollution in China. "A noxious cocktail of soot, smog and toxic chemicals is blotting out the sun, fouling the lungs of millions of people and altering weather patterns in large parts of Asia, according to a report released Thursday by the United Nations."

Vitaly Churkin, Russia's Ambassador to the United Nations, is extremely pleased that the New York Times has finally come around to reporting Moscow's account (per the OSCE report) of how the war with Georgia started. The letter he sent in to the editors was probably the most fun his office had had since declining to contribute funds to John McCain's campaign. The letter can be read here, and Reuters is also running a piece about it. In all fairness, Churkin should probably also congratulate the BBC.

James Rubin, who was assistant secretary of state during the Clinton administration, has a interesting piece today in the New Republic about Russia's Kosovo analogy for Georgia and grounds for intervention. Rubin urges the United States not to buy into the flawed analogy, not to ratify the Kremlin's claims to "privileged interests" on its borders, and points out that for quite a long time, Russia and the United States were in consensus about what was happening in the Balkans, and that Kosovo only became a divisive issue around 2003 during Russia's resurgence. If nothing else, this history demonstrates that the international community--including Russia--was largely unified during a decade of diplomatic engagement. And the risk of massive human rights abuses was real and generally accepted. The case of South Ossetia could not be more different. Human rights, let alone genocide, have never been a major factor in international decision-making there. ...

Dmitry Medvedev's bid to be the first to threaten Barack Obama is generating plenty of reaction, which is exactly what Moscow seems to have wanted. But the move has also been quite successful so far in disaggregating the president-elect's vague foreign policy consensus while sowing disagreement and confusion from people who obviously know nothing about the issue. The Boston Globe editorial board, for example, appears to have been very, very frightened by this big scary Russian threat, and urgently suggests that Obama dismantle any plans that might upset Moscow, and in exchange hope that they will work with the United States to fight terrorism and stop protecting Iran from UN diplomacy.

History tells us that gold is the “ultimate antidote to fiat money” says John Pugsley. He says gold’s dollar price relative to other goods is now higher than the long-term trend. But no one really knows how much the buck has been inflated in recent years. And as price inflation returns “with a vengeance”, the gold bull run should resume.

This from Sovereign Society:

“Lenin said the day would come when gold would serve to coat the walls and floors of public toilets.” -Premier Nikita S. Khrushchev

Ancient, mysterious gold is being pushed to the forefront of investors’ minds these days, as the inflationary policies of the worlds’ central banks meet uneasily with the deflationary pressures of the housing industry’s collapse. Most expected this year’s air of uncertainty to push gold prices into the stratosphere, and all seem to be relatively shocked by the yellow metal’s lackluster performance thus far.

But for

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Fresh off his trip to Moscow to discuss improving business ties (especially in the oil and gas sectors), Libyan leader Moammar Gadhafi made a pit stop in Belarus on Monday. He was in typical form, bashing the West and throwing out intriguing trade scenarios. "The world has become unipolar because violations of the balance of power," Gadhafi said. "Nobody observes the principles of the United Nations, all international norms are being violated." Medvedev, meanwhile, chatted up British Prime Minister Gordon Brown over the phone on Monday, discussing the upcoming G20 summit in Washington. "Both sides underlined the importance of coordinating their positions in the run-up to this crucial event," the Kremlin said in a statement. "Touching upon the bilateral relations, Medvedev and Brown positively assessed latest Russian-British contacts held at various levels, noting the importance of keeping up the dialogue ...