China can now bypass Wall Street when buying U.S. government debt and go straight to the U.S. Treasury, in what is the Treasury’s first-ever direct relationship with a foreign government, according to documents viewed by Reuters.

The relationship means the People’s Bank of China buys U.S. debt using a different method than any other central bank in the world.

The other central banks, including the Bank of Japan, which has a large appetite for Treasuries, place orders for U.S. debt with major Wall Street banks designated by the government as primary dealers. Those dealers then bid on their behalf at Treasury auctions.

China, which holds $1.17 trillion in U.S. Treasuries, still buys some Treasuries through primary dealers, but since June 2011, that route hasn’t been necessary.

The documents viewed by Reuters show the U.S. Treasury Department has given the People’s Bank of China a direct computer link to its auction system, which the Chinese first used to buy two-year notes in late June 2011.

CONTINUED at Reuters.

Facebook shares fell more than 13 percent, falling below its $38 price of itsinitial public offering, in the social network’s second day of trading as a public company.

Meanwhile, the NASDAQ exchange continued to defend itself regarding the IPO’s delay on Friday.

The company’s shares [FB  34.03    -4.2018  (-10.99%)   ] last traded down more than 13 percent. The stock had previously closed 0.6 percent higher on Friday.

Investors and technology industry watchers are closely tracking the Menlo Park, Calif., company’s shares. The world’s largest social network was one of the most anticipated initial public stock offerings ever, and now serves as a bellwether for other social media companies.

Facebook’s market debut Friday suffered some hiccups, with trading on the Nasdaq delayed for a half hour and issues with traders’ orders. The stock closed Friday just 23 cents above where it priced Thursday night, when many investors had hoped for a big first-day pop.

Facebook shares fell below the offer price Monday before the market’s open. It was unclear at that time whether underwriters such as Morgan Stanley [MS 13.25    -0.10  (-0.75%)   ] would step in to help stabilize the stock.

Facebook Inc. (FB) is set to start trading today after a record initial public offering that made the social network more costly than almost every company in the Standard & Poor’s 500 Index. (SPX)

Facebook sold 421.2 million shares at $38 each to raise $16 billion, a statement yesterday shows. That values the Menlo Park, California-based company at $104.2 billion, or 107 times trailing 12-month earnings, more than every S&P 500 member except Amazon.com Inc. and Equity Residential.

CONTINUED at Bloomberg.

Mitt Romney continued to drive a debt-oriented message here on Wednesday morning, extending his “prairie fire” of debt metaphor with the assistance of a prop.

In a nod to the independent voters who pushed the Sunshine State into the Democratic column in 2008, Romney noted that both parties were responsible for pushing the debt to the “incomprehensible” levels – which were represented on a giant prop debt clock behind him.

CONTINUED at MSNBC.

The federal government paid at least $439 million in employee bonuses last year, down $43 million since new austerity restrictions were announced.

The largest merit awards went to senior executives in Washington and air traffic controllers, an Asbury Park Press investigation found. The highest award, $62,895, went to 16 employees from agriculture to NASA.

The $439 million in bonuses may be a staggering amount — enough to buy the former New Jersey Nets, valued at about $357 million by Forbes magazine — but it represents just 0.4 percent of the $105 billion in salaries for most of the government’s civilian employees. In 2010, at least $482 million was paid in bonuses, according to federal data.

CONTINUED at the Asbury Park Press.

STORY 1: Obama worth as much as $10 million

Three things are apparent from President Obama’s annual financial disclosure statement, released today:

He is a wealthy man, with assets of as much as $10 million.

He has a hefty stake in JPMorgan Chase, the megabank that just made a bad $2 billion bet. Obama has an account worth between $500,000 and $1 million.

Despite the nation’s $15.6 trillion debt, he is a believer in government paper. More than half of his assets are in Treasury bills and notes.

The disclosure statement lists assets and liabilities in dollar ranges, so pinpointing the president’s net worth is difficult. His assets appear to tally between $2.6 million and $9.9 million. He holds a mortgage on his Chicago home of $500,000 to $1 million.

As was clear from Obama’s income tax filing, much of his income continues to roll in from book royalties. The disclosure form lists $100,000 to $1 million in royalties from Dreams From My Father, $100,000 to $1 million from Of Thee I Sing: A Letter to My Daughters, and $50,000 to $100,000 from The Audacity of Hope.

Vice President Biden, on the other hand, isn’t all that wealthy. His financial disclosure statement includes less than $1 million in assets — and as much as $1.5 million in liabilities, including between $500,000 and $1 million on his Wilmington home.

Source: USA Today.

STORY 2: Obama has up to $1 million with JPMorgan Chase

US President Barack Obama has up to $1 million in a JPMorgan Chase checking account, the White House said Tuesday as a controversy deepened over the bank’s $2 billion dollar losses.

Public figures in the United States are required by law to publish their assets and investments to avoid conflicts of interest, and the White House releases disclosures for Obama and Vice President Joe Biden each year.

As well as the between $500,000 and $1 million in the JPMorgan Chase Private Client Asset Management checking account, Obama also has millions of dollars in a variety of other accounts and funds, bonds and treasuries.

The largest holding, according to the disclosures, is between one and five million dollars in US Treasury notes.

Most of Obama’s wealth comes from book royalties, including from his best selling autobiography “Dreams From My Father.”

Obama said during a television interview with ABC’s “The View” broadcast Tuesday that the $2 billion in derivatives losses suffered by JPMorgan proved the need for tighter banking regulation.

He also said that JPMorgan chief Jamie Dimon was “one of the smartest bankers we got and they still lost money.”

“They still lost $2 billion dollars and counting precisely because they were making bets in these derivative markets. This is why we passed Wall Street reform.”

The US Justice Department has opened an FBI probe into JPMorgan Chase’s more than $2 billion trading loss, a person familiar with the matter told AFP Tuesday.

News of the investigation came as Dimon, JPMorgan’s embattled chief executive, faced criticism at the company’s annual shareholders meeting in Tampa, Florida, over the shock loss.

Source: Yahoo News.

The head of Greece’s Council of State will take the reins of the country until it holds new elections on June 17, state TV said a meeting of party leaders decided Wednesday, a day after power-sharing talks collapsed.

Nine days of negotiations among Greece’s bickering parties failed after May 6 inconclusive elections left no party with enough votes for a majority in parliament. The lack of a deal to share power meant the only option open was to head back to the ballot box.

The caretaker government will have no mandate to take any internationally binding commitments, with emergencies to be handled in consultation with party leaders, Communist Party head Aleka Papariga said.

“It will be a strictly caretaker government, which must not take any action at the EU or NATO that will be binding for the Greek people,” Papariga said after another meeting with other party heads, convened by President Karolos Papoulias to find agreement on who will lead the temporary government.

“If there is an emergency or unforeseen event, that can be addressed by consultation among the parties with the involvement of the president,” she said.

CONTINUED at CNBC.

Monti raised alert levels on Sunday at some sensitive sites across Italy to handle the recent violence that has hit the country.

Interior Minister Anna Maria Cancellieri also said on Sunday that she was considering bringing in the army to defend certain locations.

“There have been several attacks on the offices of Equitalia (the agency handling tax collections) in recent weeks. I want to remind people that attacking Equitalia is the equivalent of attacking the State,” she said.

“The army could be used to guard buildings which could be the target of violent protest. The danger of an escalation exists. It’s a situation which demands drastic action,” she added.

On Saturday, two Molotov cocktails were thrown at the offices of Equitalia in Livorno, Tuscany, and severely damaged the front of the building after they blew off. Moreover, a letter bomb, which did not blast, was sent to the organization’s offices in Rome on Friday.

CONTINUED at Press TV.

There is nothing wrong with being optimistic, but there is something wrong with having blind faith that things are going to get better when all of the evidence is screaming at you that things are going to get worse.  According to a brand new USA TODAY/Gallup Poll, 71 percent of all Americans consider economic conditions  in the United States to be poor right now, but an astounding 58 percent of them believe that economic conditions in the United States will be good a year from now.  So what can account for this?  Are they insane?  Are they hopelessly optimistic?  Do they not want to believe the facts that are staring them right in the face?  Well, a lot of it probably has to do with the upcoming election.  Most Republicans are convinced that things will be “better” somehow if Romney wins in November.  Most Democrats are convinced that things will “continue to improve” if Obama wins in November.  But the truth is that the economy has been declining steadily in recent years no matter which party has been in power.  Today, the American Dream is out of reach for huge numbers of formerly middle class families.  Millions of jobs continue to leave the United States, poverty is absolutely exploding and our nation is absolutely drowning in debt.  Sadly, nothing is being done to reverse the long-term economic trends that are destroying us.  So, a year from now things are not going to be any better.  In fact, many analysts are absolutely convinced that things are going to be a whole lot worse by then.

For example, just check out the following excerpt from a report that was just released by LEAP/E2020….

Thus, according to LEAP/E2020, the 2012 election year, which opens against the backdrop of economic and social depression, complete paralysis of the federal system (3), strong rejection of the traditional two-party system and a growing questioning of the relevance of the Constitution, inaugurates a crucial period in the history of the United States. Over the next four years, the country will be subjected to political, economic, financial and social upheaval such as it has not known since the end of the Civil War which, by an accident of history, started exactly 150 years ago in 1861. During this period, the US will be simultaneously insolvent and ungovernable, turning that which was the “flagship” of the world in recent decades into a “drunken boat”.

Wow, that paints a far different picture of the future than most Americans are imagining, eh?

The U.S. “will be simultaneously insolvent and ungovernable”?

That doesn’t sound very optimistic.

Gerald Celente, the head of the Trends Research Institute, is also very pessimistic about the rest of 2012.  Just consider the following quotes from a recent USA Today article….

“2012 is when many of the long-simmering socioeconomic and political trends that we have been forecasting and tracking will climax,” Celente noted in his Top 12 Trends 2012 newsletter. In an interview he added: “When money stops flowing to the man on the street, blood starts flowing in the street.”

So who is right and who is wrong?

CONTINUED at the American Dream.

Greece’s possible exit from the euro moved to the center of Europe’s financial-crisis debate, rattling markets as authorities in Athens struggled to form a government.

Meetings brokered by Greek President Karolos Papoulias were set to continue today after Syriza, the leading anti-bailout party, rejected a unity government following inconclusive elections May 6. That moved the country closer to a new vote, with at least five European central bankers broaching the once- taboo topic of its exit from the euro.

CONTINUED at Bloomberg.