By PAUL THARP, New York Post

A new Citigroup scandal is engulfing Robert Rubin and his former disciple Chuck Prince for their roles in an alleged Ponzi scheme that’s now choking world banking.

Director Rubin and ousted CEO Prince – and their lieutenants over the past five years – are named in a federal lawsuit for an alleged complex cover-up of toxic securities that spread across the globe, wiping out trillions of dollars in their destructive paths.

Investor-plaintiffs in the suit accuse Citi management of overseeing the repackaging of unmarketable collateralized debt obligations (CDOs) that no one wanted – and then reselling them to Citi and hiding the poisonous exposure off the books in shell entities. Read more….

By Anthony Karydakis, Fortune

Well, now it’s official: we’re in a recession. And we know when it began: December 2007, according to the official arbiter of business cycles, the National Bureau of Economic Research (NBER), which made the announcement Monday. So now the question is: when will it end, and how deep will it get?

There are good reasons to be worried about both of these measurements, as the headwinds facing the economy are powerful indeed. But it’s best to resist the temptation to give in to predictions of unconditional gloom and take a cool-headed look at how this recession compares so far to the many other downturns we’ve survived.

On the likely depth of the recession, it has been often said that this may be the most severe recession “in decades.” This statement is almost certainly true but not particularly informative, as the two most recent recessions, in 1990-91 and 2001, turned out to be famously mild and short-lived by historical standards. So the real question remains: “the deepest recession” in exactly how many decades? Read more….

By Mary Beth Wenger, CBS 6

There’s a new “Gold Rush” but the big problem is: you might not be able to get your hands on any!

The U.S. Mint tells CBS-6 News that certain gold and silver coins with a 2008 date have been depleted.  Their spokesman calls the interest “extraordinary”.  A combination of people looking for something tangible to invest in during an uncertain economy, and a slowdown in some production at the US Mint, means there has been a “global run” on coins in those precious metals.

Some are looking to buy, others to unload coins for a little cash.  Madeline Vrochopoulos brought coins she’d had sitting in a dresser drawer to “Olde Saratoga Coin” in Colonie Monday morning .”A little cash is not a bad thing,” she said, noting that the holidays were approaching.

Certainly gold was worth more in March—at a record high of one-thousand dollars an ounce.  But on Monday it was selling for $815.00 and ounce and climbing.  We’ve told you about people selling their gold and silver jewelry for cash but recently there has been a worldwide demand for gold and silver coins.  Some sellers report they’re unable to fill customer requests for gold and silver coins right away.
Read more….

By Niraj Sheth, The Wall Street Journal

As the economic crisis deepens in the U.S., some lawyers are making out well — in India.

At the Mumbai subsidiary of outsourcer Pangea3 LLC, rows of Indian lawyers at new computers pore over contracts, covenants and other financial documents. They’re working for Wall Street banks fighting lawsuits filed in the U.S. by homeowners, investors and shareholders after the subprime-mortgage crunch.

As the ailing U.S. economy prompts companies to cut costs, it also has spawned legal problems. As a result, clients are pressuring the law firms they hire to trim fees.

That means more routine work like legal research, due diligence and document review is being done in India at roughly half the cost as in the U.S., outsourcers say. Starting associates at big U.S. firms often bill more than $200 an hour. But an experienced lawyer in India bills at $75 to $100 an hour, roughly the bottom rate for some U.S. paralegals. Read more….

By Mike “Mish” Shedlock, MISH’S Global Economic Trend Analysis

Up to 19,000 employees of Washington Mutual face being laid off this weekend as JPMorgan Chase turns up the synergy on its recent acquisition.

On Friday, JPMorgan Chase (JPM) said it expects to retain the 22,000 employees who work at Washington Mutual branches and 2,000 workers in the mortgage and wealth management divisions in California, spokesman Tom Kelly told Forbes.com. The company has not yet determined the total numbers to be cut in other states, but it planning to inform all former WaMu employees of their job status by Monday.

WaMu had about 43,000 employees as of June, according to a filing with the Securities and Exchange Commission. Combined, Chase and WaMu have about 5,400 branches. The company said it only plans to close about 10.0%. Read more….

By Chuck Butler, Daily Pfennig

Good day… And a Marvelous Monday to you! In addition, Welcome to December! We had our first “dusting” of snow over the weekend, after experiencing wonderful weather Thursday and Friday. As much as they tried, even my beloved Missouri Tigers losing to ultra-rival, Kansas on Saturday, couldn’t ruin what was a very fun and relaxing weekend for yours truly!

Well… When I left you last Wednesday, I had thought that we could be on the cusp of a “change” in the currencies, as the Trading Theme that had held a tight grip on the currencies since July, was thrown to the side for a couple of days… But, I doubt “that” has happened, as a return to risk aversion is back on the table, which means the currencies and precious metals get sold, while Japanese yen, and U.S. Treasuries (read dollars) get bought.

And Japanese yen is “getting bought!” Yen is trading in the 93 range this morning… Strong, very strong!

When this all began, I truly believed that it would last through the elections and on to the end of the year… Then the magnitude of the problems were revealed, and I changed that to lasting probably through to spring. The longer it takes the “boys” Paulson and Bernanke, to get this credit market crisis unlocked, the longer it will take before we return to the fundamentals that continue to get worse by the day. Read more….

By Robert Kiyosaki, Yahoo! Finance

How did we get into the current financial mess? Great question.

Turmoil in the Making

In 1910, seven men held a secret meeting on Jekyll Island off the coast of Georgia. It’s estimated that those seven men represented one-sixth of the world’s wealth. Six were Americans representing J.P. Morgan, John D. Rockefeller, and the U.S. government. One was a European representing the Rothschilds and Warburgs.

In 1913, the U.S. Federal Reserve Bank was created as a direct result of that secret meeting. Interestingly, the U.S. Federal Reserve Bank isn’t federal, there are no reserves, and it’s not a bank. Those seven men, some American and some European, created this new entity, commonly referred to as the Fed, to take control of the banking system and the money supply of the United States.

In 1944, a meeting in Bretton Woods, N.H., led to the creation of the International Monetary Fund and the World Bank. While the stated purposes for the two new organizations initially sounded admirable, the IMF and the World Bank were created to do to the world what the Federal Reserve Bank does to the United States.

In 1971, President Richard Nixon signed an executive order declaring that the United States no longer had to redeem its paper dollars for gold. With that, the first phase of the takeover of the world banking system and money supply was complete.

In 2008, the world is in economic turmoil. The rich are getting richer, but most people are becoming poorer. Much of this turmoil is directly related to those meetings that took place decades ago. In other words, much of this turmoil is by design. Read more….

By Andrew Ross Sorkin, The New York Times

President-elect Barack Obama unveiled on Monday an economic team with deep experience handling economic crises. But does the man at the center of this star-studded cast, Timothy F. Geithner, the nominee for Treasury secretary, have what is needed to take the nation in a new financial direction?

That is what a number of Wall Street chieftains are quietly asking, even after the stock market surged with relief after his nomination.

One reason Mr. Obama gave for nominating Mr. Geithner was his “unparalleled understanding of our current economic crisis, in all of its depth, complexity and urgency.” More important, he suggested, “Tim will waste no time getting up to speed. He will start his first day on the job with a unique insight into the failures of today’s markets — and a clear vision of the steps we must take to revive them.” Read more….

The Sydney Morning Herald

The US government’s emergency rescue of Citigroup offers a new model for bank bail-outs: explicitly insuring against losses on toxic assets, with taxpayers footing the bill.

The Citigroup plan extends the federal commitment beyond the previous framework of capital injections from the Treasury and credit from the Federal Reserve.

Now, the US is a partner in the performance of $US306 billion ($500 billion) in real-estate loans and securities, sharing losses beyond $US29 billion on what are likely to be some of Citigroups worst holdings.

“Everybody and his brother has got to have their hand out now,” said Eric Hovde, chief investment officer at Hovde Capital Advisors. “The whole problem is so much bigger and deeper than the Fed and Treasury ever understood.” Read more….

By Eric Dash, The New York Times

One bailout was not enough for Citigroup. And it may not be enough for other big banks.

While Citigroup’s second multibillion-dollar rescue from Washington hit Wall Street like a shot of adrenaline on Monday, many analysts worried that the jolt would soon wear off. Citigroup has been stabilized, but the outlook for the financial industry as a whole is bleak.

With the red ink deepening, other banks may eventually turn to the government to soak up some of their losses. Taxpayers could end up guaranteeing hundreds of billions of dollars of banks’ toxic assets. Indeed, Treasury Secretary Henry M. Paulson Jr. is expected to announce a new plan on Tuesday to bolster the consumer-finance market. Read more….