Discussion of Housing Bubble, US Dollar, Debt, Trade Deficit, Oil, Gold, Consumer Spending, Central Banks, Inflation, Outsourcing and the Bleak Future of the US economy
This Blog and/or the articles contained within have been referenced, linked or quoted in: Businessweek online, WSJ Online, Dollar Collapse, Safehaven, Silverbear Cafe, Financial Armageddon, Yahoo & Google Finance -- among many other blogs & web-pages... Thanks for stopping in for a read!
Saturday, January 31, 2009
Friday, January 30, 2009
THE AUDACITY OF REALITY
One of the best reads I've had in a while: The Audacity Of Reality
Gerald Celente: The Greatest Depression in History
Gerald Celente (link), the world's #1 Trends forecaster states that we're moving into the Greatest Depression in history - starting in 2009!
If you're running short on time and can only listen to one of the two below - I suggest you select part 2.
Wednesday, January 28, 2009
Credit Cards & Credit Crunch
With the economy in a downward spiral, more and more people are taking advantage of credit card offers to make ends meet, but are the credit card companies actually taking advantage of their customers?
Davos World Economic Forum
Snippets from this link below Confidence evaporates, currency row brews at Davos
DAVOS, Switzerland (Reuters) - Confidence among the world's top company chiefs meeting in Davos has tumbled to a new low and a brewing currency row between the United States and China cast doubt on the political will to act in concert.
"Forty percent of the world's wealth was destroyed in last five quarters. It is an almost incomprehensible number," said Stephen Schwarzman, chairman of the leading private equity company Blackstone Group.
Crisis-hit bankers are thin on the ground at the snow-covered mountain town, leaving policymakers to work behind the scenes on ways to fix the financial system, ahead of a summit of the G20 group of big and emerging countries in April and a G8 summit in July.
Ahead of Wen's speech, a row intensified over Beijing's exchange rate policy after new U.S. Treasury Secretary Timothy Geithner branded China a currency manipulator last week, using a term the previous administration deliberately avoided for years.
Hopes for a short "V"-shaped recession appear to have evaporated with most business leaders expecting no more than a slow and gradual recovery over the next three years.
"The three-year view is a bit better but the bad news is it is not that much better," said Tony Poulter, global head of consulting at PwC.
Delegates in Davos were united in the view that an economic upturn is some way off.
Stephen Roach, Morgan Stanley's Asia chairman, agreed the next three years would be tough.
"The concept of a vigorous 'V'-shaped recovery is for business cycles of the past but not for this post-bubble, post-crisis business cycle. It is going to be a long slog in 2010, in 2011," he told Reuters.
That grim scenario has left sovereign fund Dubai International Capital wary of making big long-term investments even though it sees asset prices at reasonable levels.
"We're still very nervous about making some big bets -- we see the financial crisis getting worse. There's not going to be a magic wand solution to the problem," Chief Executive Sameer al-Ansari told Reuters.
Some 2,500 guests from 96 countries are gathering at the World Economic Forum in Davos. It has already been called one of the most significant Davos forums in the event's 40 year history.
Tuesday, January 27, 2009
Las Vegas Unemployment rate jumps to 9.1%
LVRJ: UNEMPLOYMENT RATE HITS 9.1 PERCENT: Jobless finding more competition
Monday numbers from the Nevada Department of Employment, Training and Rehabilitation show the Silver State's jobless rate hit 9.1 percent in December, up from 5.2 percent in December 2007. State unemployment also posted a big month-over-month gain, rising 1 percentage point from November's 8.1 percent.
Clark County (Las Vegas) unemployment matched the state's, at 9.1 percent. That's up from 7.9 percent in November and 5.6 percent a year earlier. The nation's unemployment rate rests at 7.2 percent.
Bill Anderson, an economist with the Department of Employment, Training and Rehabilitation, called the jump between November and December an unusually large change.
"It reflects the rapid deterioration in the economy that started unfolding last fall," Anderson said.
Top among the culprits, said Anderson, is the housing market, with its high inventory of unsold existing homes and its falling median prices. Throw in stalled credit markets, which hamper business growth, and weak consumer spending, and voilá: Unemployment levels chase 25-year highs. Roughly 128,000 Nevadans were hunting for work in December, and first-time unemployment claims broke 36,000 -- the highest monthly total on record.
Break For Chart:
Las Vegas Unemployment data as extracted from the BLS on Jan 27th 2009. Note: Though spiking upwards, these numbers are severely understated through the use of U-3 data - Click here for more info: Unemployment Rate Reality
Bottom line: Doubling the stated figures below will bring you much closer to the real unemployment rate truth.
Back to Article Snippets:
"The latest figures reflect fundamentals in the market as they exist today, and the expectation is that conditions could continue to erode over the next couple of quarters," said Brian Gordon, a principal in local research firm Applied Analysis.
Fallout from the sluggish holiday retail season, combined with high-profile failures among national retailers including Mervyns, Linens-N-Things and Circuit City, won't show up in jobless data until statistics from early 2009 come out, Gordon noted.
He added that he wouldn't be surprised to see Nevada's jobless rate surpass 10 percent in 2009. Its record unemployment rate is 10.7 percent, set in December 1982.
It's all unfolding as I previously forecasted: The Las Vegas gravy train has ended
Consumer Confidence Falls to New All-Time Low
Consumer confidence in the U.S. sank to the lowest level on record in January as jobs evaporated and home values sank, signaling a further slide in spending at the start of 2009.
The Conference Board’s index, records for which go back to 1967, fell to 37.7, lower than forecast. A separate report showed the drop in house prices in major metropolitan areas deepened in November. The S&P/Case-Shiller 20-city index fell 18.2 percent from a year earlier, the most since it began in 2001.
Falling home values will worsen what’s already the biggest destruction of American household wealth ever recorded, and may make banks even more reluctant to offer mortgages. Federal Reserve officials gather today and tomorrow to consider fresh steps to shore up lending in an effort to halt the crisis.
“We’re in this sort of chain reaction phase of the downturn, where all the bad news is feeding on itself,” said Scott Brown, a senior economist at Raymond James & Associates Inc. in St. Petersburg, Florida, who forecast a reading of 37 for the confidence index. “Job losses lead to weaker consumer spending and that in turn leads to further job losses.”
State figures released today showed the unemployment rate jumped in all 50 U.S. states in December, underscoring the broad-based nature of the deterioration. Indiana and South Carolina led the country with a 1.1 percentage-point surge each in joblessness last month, the Labor Department said in Washington. Michigan had the highest rate, at 10.6 percent.
“The consumer is being squeezed on so many sides,” Douglas Smith, chief economist for the Americas at Standard Chartered Bank in New York, said in an interview with Bloomberg Television. “We’re going to have to see some turn in the labor market before we see much upside for consumer confidence.”
The S&P/Case-Shiller house-price report showed all the regions were down in the 12 months to November, led by a 33 percent slump in Phoenix and a 32 percent slide in Las Vegas.
A gauge of Americans’ view about the current economic environment dropped to 29.9 from 30.2. The Conference Board’s measure of the outlook for the next six months decreased to 43 from 44.2 in December.
Today’s report showed the share of consumers who said their incomes were likely to increase over the next six months fell to 10 percent, the lowest on record.
The U.S. recession, which began in December 2007, has so far cost 2.6 million jobs and is already the longest in a quarter century.
Over Fifty, Overdrawn
27 Min PBS Special - "Over Fifty and Overdrawn"
The economic crisis is affecting people in all income and social brackets, but America's baby boomers and seniors don't have the option to wait it out.
The housing meltdown, market crash, and rising costs of everything from food to medicine have taken the luster out of seniors' "golden years" or worse, put them into deep debt. In fact, Americans over 50 account for about a quarter of all delinquent mortgages.
Some baby boomers and seniors are reluctantly exiting retirement to look for jobs, while others are falling prey to predatory lending companies.
This week NOW travels to South Carolina, a state where many retirees and winter refugees are being forced to rewrite the last chapter in their lives, to see how they are coping and what options are left.
Monday, January 26, 2009
News links of interest - 26 Jan
Credit crunch claims Iceland government after 'Household Revolution'
The global economic crisis claimed its first government yesterday when Iceland’s ruling coalition collapsed amid a cacophony of popular protest.
Bernanke Risks ‘Very Unstable’ Market as He Weighs Buying Bonds
Federal Reserve Chairman Ben S. Bernanke and his colleagues may try once again to cure the aftermath of a bubble in one kind of asset by overheating the market for another.
Fed policy makers meeting tomorrow and the day after are exploring the purchase of longer-dated Treasury securities in an effort to push up their price and bring down their yield. Behind the potential move: a desire to reduce long-term borrowing costs at a time when the Fed can’t lower short-term interest rates any further because they are effectively at zero.
Freddie Mac will ask government for another bailout to the tune of $35 billion
Freddie, which took $13.8 billion from Treasury in November, said in a securities filing today that its fourth- quarter operating losses will again drive its net worth below zero
More woe as 76,000 jobs axed in one day
Corporate bellwethers in the US and Europe slashed more than 76,000 jobs from their payrolls to confront the deepening economic downturn, marking one of the most brutal days yet for workers on both sides of the Atlantic.
Layoffs Spread to More Sectors of the Economy
Home Depot, Caterpillar, Sprint Nextel and at least eight other companies announced on Monday they would cut more than 75,000 jobs in the United States and around the world — a gloomy start to the workweek for employees anxious about holding their own as the economy sinks.
Senate votes 60-34 to confirm Timothy Geithner as Treasury secretary
Geithner's appointment, originally considered a slam dunk, got tangled up when it was learned he had failed to pay $42,702 in back taxes until after he was picked for the job by Obama.
Jim Sinclair's comments from today
Dear Comrades In Golden Arms,
The day in 2009 that insolvency comes in the planetary form, you can be sure of only one thing: You will not know it.
Your government, whomever they are, will keep the collapse a total secret until you are completely wiped out by hyper-inflation and/or insolvency of your retirement plan.
You cannot trade your way to insurance. That concept is egomaniacal and downright stupid.
Own gold and gold shares or you will be the victim of your government and the media's feeling that you are:
Narrow escape: The Bank of England was forced to contact RBS's creditors abroad to persuade them not to withdraw their funds
NOT WORTHY OF THE TRUTH
Revealed: Day the banks were just three hours from collapse
By Glen Owen - Last updated at 11:21 PM on 24th January 2009
Britain was just three hours away from going bust last year after a secret run on the banks, one of Gordon Brown's Ministers has revealed.
City Minister Paul Myners disclosed that on Friday, October 10, the country was 'very close' to a complete banking collapse after 'major depositors' attempted to withdraw their money en masse.
The Mail on Sunday has been told that the Treasury was preparing for the banks to shut their doors to all customers, terminate electronic transfers and even block hole-in-the-wall cash withdrawals.
Only frantic behind-the-scenes efforts averted financial meltdown.
If the moves had failed, Mr Brown would have been forced to announce that the Government was nationalising the entire financial system and guaranteeing all deposits.
But 60-year-old Lord Myners was accused last night of being 'completely irresponsible' for admitting the scale of the crisis while the recession was still deepening and major institutions such as Barclays remain under intense pressure.
More from the UK's Dailymail
Sunday, January 25, 2009
Fed Reserve Fails to Reflate the US Banking System
This video from itulip should assist in illustrating the historical significance and severe problems we're dealing with - in our present, yet growing banking system crisis - Excellent!
For decades central banks set monetary policy according to nonsensical beliefs about credit expansion. The inability of the Fed to stop the current crisis via emergency lending to banks demonstrates that Fed policies are a failure. This movie reveals the scale of this disaster.
Citigroup & BOA Nationalization?
Jan. 23 (Bloomberg) -- The U.S. government’s decision to pledge billions of additional dollars with strings attached to Citigroup Inc. and Bank of America Corp. may be nationalization by another name, according to former bankers and regulators.
Faced with pressure from lawmakers, banks have shaken up management, eliminated executive bonuses and staff and canceled conventions. They’ll be forced to do monthly reports on how they’ve boosted lending while slashing quarterly dividends to one cent a share for three years.
“When the Treasury tells a bank to pay a penny a share vs. its old dividend, you know who’s calling the shots,” said Jon Bruss, a 40-year industry veteran and founder of Hartland, Wisconsin-based Fortress Partners Capital Management Ltd., which invests in banks. “It may not be de jure nationalization but I think it’s de facto nationalization.”
Several Active Duty Air Force friends of mine created a local band called Itchy Choad (Choad stands for Creative Heros On Active Duty).
Anyway, I watched them at a Battle of the Bands contest here in Las Vegas Friday night and they kicked ass...
Here's one of their songs "Empty Eyes" - A Story of the military sniper
Band Members: SSgt "Itchy" Richards, MSgt "Sausage" Link, MSgt Bill "Higgy Bear", and MSgt Chris "Don't Miss" Horton
Their site: ItchyChoad
Some Background - LV Weekly Blog
This post is intended to give them some props and help spread the word -- as they may be (some day soon hopefully) coming to a radio station near you...
BTW: If any of you out there have Radio-Station Contacts/Friends/Etc, send them this link. Might lead to something... Thanks