Larry Summers Considered As US Choice to Head the World Bank

The Rubin Legacy continues on. Change we can believe in.

Hans Nichols does an exceptional job of covering the Washington beat for Bloomberg.

Bloomberg
Obama Considering Summers for World Bank
By Hans Nichols
Jan 18, 2012 11:47 AM ET

President Barack Obama is considering nominating Lawrence Summers, his former National Economic Council director, to lead the World Bank when Robert Zoellick’s term expires later this year, according to two people familiar with the matter.

Summers has expressed interest in the job to White House officials and has backers inside the administration, including Treasury Secretary Timothy Geithner and the current NEC Director, Gene Sperling, said one of the people. Secretary of State Hillary Clinton is also being considered, along with other candidates, said the other person. Both spoke on condition of anonymity to discuss internal White House deliberations.

Lael Brainard, the under secretary of Treasury for international affairs, is compiling a list of potential candidates to replace Zoellick, who was nominated to a five-year term that began in July of 2007 by then-President George W. Bush. By tradition, the U.S. president chooses the leader of the World Bank while the head of the International Monetary Fund is selected by European leaders. The nomination is subject to approval by the World Bank’s executive board.

You may recall the unfortunate tenure of arch-neocon and Iraq war architect Paul Wolfowitz at the World Bank.

"O, wonder! How many goodly creatures are there here! How beauteous mankind is!
O brave new world, That has such people in it!"

William Shakespeare, Tempest, Act 5, Sc. 1

World Bank Warns: Hope for the Best, Prepare for the Worst

In case your domestic financial press fails to deliver this important message to you so clearly, as the World Bank has done for the rest of the world's leadership.  

Hope for the best, and prepare for the worst.

Equities are pricing in a rosy scenario, but the bonds and precious metals are saying 'beware.'

The western central banks will contine to print money in response to this financial crisis, both before and certainly after the fact.

'How much' is a policy decision, but the choice seems compelling. Rather than limiting their printing, they will most likely attempt to manipulate and mask the perception and awareness of their actions through programs of buying sovereign debt, engaging in disinformation campaigns, and allowing blatant price manipulation in the markets by insiders.

The problem with this is that insiders stand to profit enormously while the public is used and abused rather badly. Power really does corrupt, not all at once, but in stages, one rationale at a time, with a privileged outlook or groupthink that comes to be widely separated from the shared reality of the public. And the opportunity to turn this to pillage is not wasted on the worst elements of those in the halls of power.

"And remember, where you have a concentration of power in a few hands, all too frequently men with the mentality of gangsters get control. History has proven that."

Lord Acton

There are others ways to do this that do not benefit the few at the cost of the many in such a disproportionate manner.

Financial Times
World Bank warns emerging nations
By Chris Giles in London
January 18, 2012 2:00 am

Developing countries should take steps to plan for a global economic meltdown on a par with 2008-09 if the European sovereign debt crisis escalates, the World Bank warned on Wednesday in its latest economic forecasts.

Predicting significantly slower global growth in 2012 than it expected last summer even if the eurozone muddles through its crisis, World Bank economists said that if financial markets deny funds to eurozone economies, global growth would be about 4 percentage points lower than even these figures, with poorer economies far from immune.

Andrew Burns, head of macroeconomics at the Bank, told journalists in London: “Developing countries should hope for the best and prepare for the worst.”

Stressing the importance of contingency planning, he added: “An escalation of the crisis would spare no one. Developed and developing-country growth rates could fall by as much or more than in 2008-09.”

The world economy would find it much more difficult to grow out of a new economic crisis, the World Bank warned, because rich countries had little monetary or fiscal ammunition available to stem any vicious circle and poorer countries now have “much less abundant capital, less vibrant trade opportunities and weaker financial support for both private and public activity [than in 2009]”...

Read the rest here.

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

Sprott Prices the Physical Silver Trust Offering at US$13.20

Sprott is bringing their deal out at the low end of the range. Quite a haircut for those who held the trust before the offering announcement, as I had warned. That thirty percent premium to NAV was completely undeserved and was most likely the result of a short squeeze.

It is a bullish deal for the silver market in general since it will take more than ten million ounces of silver out of the market and into the hands of longer term investment in the trust.

Sprott is giving the underwriters 15 percent of the offering in the over allotment if they choose to take it. They are Morgan Stanley and RBC Capital Markets in the United States and RBC Capital Markets and Morgan Stanley in Canada.

(RTTNews) - Sprott Physical Silver Trust (PSLV: News , PHS_U.TO) announced that it has priced its follow-on offering of 23 million transferable, redeemable units of the Trust at a price of US$13.20 per Unit.

As part of the Offering, the company said that it has granted the underwriters an over-allotment option to purchase up to 3.45 million additional Units.  (15 percent)

The gross proceeds from the Offering will be US$303.60 million or US$349.14 million if the underwriters exercise in full the over-allotment option.

The company stated that it will use the net proceeds of the Offering to acquire physical silver bullion in accordance with the Trust's objective and subject to the Trust's investment and operating restrictions described in the prospectus related to the Offering.

Under the trust agreement governing the Trust, the net proceeds of the Offering per Unit must be not less than 100% of the most recently calculated net asset value per Unit of the Trust prior to, or upon determination of, pricing of the Offering.