AP: Atwater in California's San Joaquin Valley is the latest city in financial troubles whose leaders are considering bankruptcy.
Reuters: Furloughs and a hiring freeze will not plug Atwater,
California's budget gap and it must move more aggressively to avoid
becoming the fourth city in the state to file for bankruptcy this year,
according to its mayor.
Mike Shedlock: Either way, Atwater is burnt toast. Attempts to make bond payments is a fool's mission.
Come to California!
Source: http://www.sacbee.com/2012/09/27/4861647/atwater-officials-consider-filing.html
Source: http://finance.townhall.com/columnists/mikeshedlock/2012/09/29/california_hit_parade_rolls_on_atwater_scrambles_to_avoid_bankruptcy
Source: http://in.reuters.com/article/2012/09/24/atwater-bankruptcy-idINL1E8KKMM720120924
Source: http://www.youtube.com/watch?v=Md69zCJKD1c
Sunday, September 30, 2012
Q2 US GDP Almost as Good as We Hoped (or Stated More Accurately: In Trouble)
Bad news, the US economy is at stall speed now.
Q4 2011: 4.1%
Q1 2012: 2.0%
Q2 2012: 1.25%
FXstreet.com: Durable goods orders declines by 13.2% in August. August figures are the largest decline since January 2009 and the worst drop since January 2007. US GDP has been revised down to 1.3% in the Q2 from the 1.7% previously estimated.
Source: http://www.zerohedge.com/news/2012-09-27/final-q2-gdp-disaster-125-growth-comes-below-lowest-estimate
Source: http://www.reuters.com/article/2012/09/27/usa-economy-idUSL1E8KR1VO20120927?type=marketsNews
Source: http://community.nasdaq.com/News/2012-09/forex-flash-expect-to-see-a-sharp-slowdown-in-the-us-economy-in-2012-q4-rabobank.aspx?storyid=177122
Q4 2011: 4.1%
Q1 2012: 2.0%
Q2 2012: 1.25%
FXstreet.com: Durable goods orders declines by 13.2% in August. August figures are the largest decline since January 2009 and the worst drop since January 2007. US GDP has been revised down to 1.3% in the Q2 from the 1.7% previously estimated.
Source: http://www.zerohedge.com/news/2012-09-27/final-q2-gdp-disaster-125-growth-comes-below-lowest-estimate
Source: http://www.reuters.com/article/2012/09/27/usa-economy-idUSL1E8KR1VO20120927?type=marketsNews
Source: http://community.nasdaq.com/News/2012-09/forex-flash-expect-to-see-a-sharp-slowdown-in-the-us-economy-in-2012-q4-rabobank.aspx?storyid=177122
Got Hunger?
Ever get hungry but couldn't afford to buy food? I don't mean hungry for the week and eventually sate your appetite. I mean hungry for a long enough time that you pick up a pitchfork and head down to the local government office. Me neither.
But apparently a lot of people in the world got to that point and it didn't work out so well for their governments. Hopefully you have a job that provides you with a lot of discretionary income and rises equally fast as "headline" inflation (the one that the media never quotes but instead uses "core", which excludes food and energy).
Sovereign Man blog: ... whenever the UN Food and Agricultural Organization (FAO)'s global food price index climbs above 210, conditions ripen for social unrest.
There are so many factors driving food prices higher. From a demand perspective, world population is growing at an extraordinary rate... plus the rise of billions of people from developing countries (especially in Asia) into the middle class is quickening demand for resource-intensive foods like beef.
From a supply perspective, drought, soil erosion, and reduction of available farmland all put significant pressure on global agricultural output. And finally, from a monetary perspective, the enormous amount of paper currency being printed in the world is finding its way into agricultural commodities.
Here's a longer time horizon:
The yellow line is the "real" price (excludes years of inflation) and the orange line is the "nominal" price (the price that you pay because of inflation. Where are the scapegoat speculators when we need them?
Here are the government's gamed/manipulated inflation rates (the true rates are much higher):
Source: http://www.zerohedge.com/news/2012-09-27/guest-post-two-no-brainer-ways-play-rising-food-prices
Source: http://www.fao.org/worldfoodsituation/wfs-home/foodpricesindex/en/
Source: http://www.advisorperspectives.com/dshort/updates/CPI-Headline-and-Core.php
But apparently a lot of people in the world got to that point and it didn't work out so well for their governments. Hopefully you have a job that provides you with a lot of discretionary income and rises equally fast as "headline" inflation (the one that the media never quotes but instead uses "core", which excludes food and energy).
Sovereign Man blog: ... whenever the UN Food and Agricultural Organization (FAO)'s global food price index climbs above 210, conditions ripen for social unrest.
There are so many factors driving food prices higher. From a demand perspective, world population is growing at an extraordinary rate... plus the rise of billions of people from developing countries (especially in Asia) into the middle class is quickening demand for resource-intensive foods like beef.
From a supply perspective, drought, soil erosion, and reduction of available farmland all put significant pressure on global agricultural output. And finally, from a monetary perspective, the enormous amount of paper currency being printed in the world is finding its way into agricultural commodities.
Here's a longer time horizon:
The yellow line is the "real" price (excludes years of inflation) and the orange line is the "nominal" price (the price that you pay because of inflation. Where are the scapegoat speculators when we need them?
Here are the government's gamed/manipulated inflation rates (the true rates are much higher):
Source: http://www.zerohedge.com/news/2012-09-27/guest-post-two-no-brainer-ways-play-rising-food-prices
Source: http://www.fao.org/worldfoodsituation/wfs-home/foodpricesindex/en/
Source: http://www.advisorperspectives.com/dshort/updates/CPI-Headline-and-Core.php
Eurozone in Recession, Impact to US: None?
WSJ (Sept. 28, 2012):An indicator that has correctly recorded contractions in the euro zone suggests the currency area has entered another recession, a development that would underline the difficulties for governments to resolve the currency area's fiscal crisis.
AP (Sept. 20, 2012): Europe appears headed for a deepening economic recession despite a recent easing in market concerns over the three-year debt crisis, a closely-watched survey found Thursday.
FT: (Aug. 14, 2012): The eurozone edged closer towards its second recession in three years after a resilient economic performance from Germany and France failed to prevent the single currency bloc from contracting in the second quarter.
This time is different, the US economy will thrive even with the world's largest economy (the European Union) experiencing a whole lot of problems...
Source: http://online.wsj.com/article/SB10000872396390443843904578024350336679008.html
Source: http://www.zerohedge.com/news/2012-09-27/guest-post-gdp-and-durable-goods-heading-recession
Source: http://www.cbc.ca/news/business/story/2012/09/20/europe-downturn-pmi.html
Source: http://www.ft.com/cms/s/0/fd4d2b94-e5e0-11e1-a430-00144feab49a.html#axzz280PHIgYZ
Two Great Candidates to Choose From! Happy Voting!
Countdown to the 2012 elections.
Please vote for my candidate.
Source: http://www.youtube.com/watch?v=IWDJEc92d38
Please vote for my candidate.
Source: http://www.youtube.com/watch?v=IWDJEc92d38
Monday, September 17, 2012
Get Sick While There Are Still People to Pay For It
Bloomberg discusses the black hole of unfunded liabilities (Medicare, Medicaid, Social Security, etc.).
Source: http://goldsilver.com/video/the-federal-financial-sink-hole-how-bad-is-it-david-walker/
Source: http://goldsilver.com/video/the-federal-financial-sink-hole-how-bad-is-it-david-walker/
Sunday, September 16, 2012
Why Gold and Silver?
Who's in charge of the blue and green lines?
Source: http://goldsilver.com/why-gold-and-silver-dvd/ref/1052/dc/domainclick/
Source: http://goldsilver.com/article/gold-Monetary-base/
Source: http://goldsilver.com/why-gold-and-silver-dvd/ref/1052/dc/domainclick/
Source: http://goldsilver.com/article/gold-Monetary-base/
Here's a Couple of Charts Showing That "Recovery" Experts Are Talking About on "Credible" News Outlets
Data from Federal Reserve of St. Louis.
All Employees: Construction (USCONS)
2012-08: 5,515 Thousands of Persons
Monthly, Seasonally Adjusted, Updated: 2012-09-07
Housing Starts: Total: New Privately Owned Housing Units Started (HOUST)
2012-07: 746 Thousands of Units
Monthly, Seasonally Adjusted Annual Rate, Updated: 2012-08-16
Some notes on that "rebound" you see in the chart (above):
Source: http://www.streettalklive.com/images/stories/1dailyxchange/home-totalactivityindex-091312.png
Source: http://research.stlouisfed.org/fred2/series/HOUST/
Source: http://research.stlouisfed.org/fred2/series/USCONS
All Employees: Construction (USCONS)
2012-08: 5,515 Thousands of Persons
Monthly, Seasonally Adjusted, Updated: 2012-09-07
Housing Starts: Total: New Privately Owned Housing Units Started (HOUST)
2012-07: 746 Thousands of Units
Monthly, Seasonally Adjusted Annual Rate, Updated: 2012-08-16
Some notes on that "rebound" you see in the chart (above):
Source: http://www.streettalklive.com/images/stories/1dailyxchange/home-totalactivityindex-091312.png
Source: http://research.stlouisfed.org/fred2/series/HOUST/
Source: http://research.stlouisfed.org/fred2/series/USCONS
Why We Always Listen to Smart, Prize-Winning People Who Are Wrong
This video was posted on youtube in November of 2010 but it's still hilariously tragic in 2012.
Source: http://www.youtube.com/watch?v=Yjr7NtntWeQ
Source: http://www.youtube.com/watch?v=Yjr7NtntWeQ
Congratulations 1%, You Win Again
So the Fed announced QE3, which in a nutshell means unlimited money printing until it decides when to stop. It will buy mortgage-backed securities from the too-big-to-fail banks, you know, the ones that were part of the cause of the financial meltdown in 2008. By selling crappy assets to the Fed, the banks get fresh dollars that they can use to speculate in stocks (front-running their clients and inflate the stock bubble) and buy US government securities that will pay them interest courtesy of the US taxpayer.
The Fed argues that the banks will loan money to people, who in turn will start businesses, hire people, who in turn will buy houses and hire construction workers. In reality, the banks will not loan the money because anyone who wants to borrow money, can't.
The Fed also said it will extend its interest rate manipulation through 2015. So those wanting to refinance or borrow to buy houses from the housing market that hasn't bottomed in many geographies don't worry, you have a lot of time.
The S&P 500 rejoiced and went up 1.7% in a couple of hours.
Source: http://www.bloomberg.com/news/2012-09-13/fed-plans-to-buy-40-billion-in-mortgage-securities-each-month.html
Source: http://online.barrons.com/article/current_yield.html
The Fed argues that the banks will loan money to people, who in turn will start businesses, hire people, who in turn will buy houses and hire construction workers. In reality, the banks will not loan the money because anyone who wants to borrow money, can't.
The Fed also said it will extend its interest rate manipulation through 2015. So those wanting to refinance or borrow to buy houses from the housing market that hasn't bottomed in many geographies don't worry, you have a lot of time.
The S&P 500 rejoiced and went up 1.7% in a couple of hours.
Source: http://www.bloomberg.com/news/2012-09-13/fed-plans-to-buy-40-billion-in-mortgage-securities-each-month.html
Source: http://online.barrons.com/article/current_yield.html
Tuesday, September 11, 2012
Big Day Tomorrow: Money From Nothing
Tomorrow is the big day that everyone's been waiting for since about 11 days ago. Ben Bernanke will announce QE3, also known as money printing. If he doesn't, that thing called the stock market will not be happy.
What will it be? Buying mortgage-backed securities? Trading short-term bonds for long-term bonds? Outright bond-buying (pure money printing)? Buying stocks from the S&P 500 (Japan does it)?
Source: http://www.calculatedriskblog.com/2012/09/qe-timeline-update.html
Source: http://articles.marketwatch.com/2012-05-08/markets/31609040_1_etf-stock-market-central-bank
What will it be? Buying mortgage-backed securities? Trading short-term bonds for long-term bonds? Outright bond-buying (pure money printing)? Buying stocks from the S&P 500 (Japan does it)?
Source: http://www.calculatedriskblog.com/2012/09/qe-timeline-update.html
Source: http://articles.marketwatch.com/2012-05-08/markets/31609040_1_etf-stock-market-central-bank
Official Inflation Rate -- Seems Kinda Low
Official U.S. Bureau of Labor Statistics cumulative inflation from Sept. 11, 2001 to Sept. 11, 2012 is 29%.
Seems kind of low, doesn't it?
Here are other changes in prices:
Source: http://www.zerohedge.com/news/september-11-%E2%80%93-eleven-years-later-selected-statistics
Seems kind of low, doesn't it?
Here are other changes in prices:
Source: http://www.zerohedge.com/news/september-11-%E2%80%93-eleven-years-later-selected-statistics
Monday, September 10, 2012
Imagine if America was a Dictatorship.
“Why are you guys so anti-dictators? Imagine if America was a dictatorship. You could let 1 percent of the people have all the nation’s wealth. You could help your rich friends get richer by cutting their taxes and bailing them out when they gamble and lose. You could ignore the needs of the poor for health care and education. Your media would appear free, but would secretly be controlled by one person and his family. You could wiretap phones. You could torture foreign prisoners. You could have rigged elections. You could lie about why you go to war. You could fill your prisons with one particular racial group and no one would complain. You could use the media to scare the people into supporting policies that are against their interests.”
Source: http://www.youtube.com/watch?v=zIOPw0Ewj4Q
Source: http://www.imdb.com/title/tt1645170/
Source: http://www.youtube.com/watch?v=zIOPw0Ewj4Q
Source: http://www.imdb.com/title/tt1645170/
Sunday, September 9, 2012
Sustainable Inflation?
Have you ever had a feeling that prices constantly increase, where you need to have a raise every year just to keep up the same standard of living?
Cumulative inflation (median of 24 countries):
Year-over-year inflation. Notice how consistent years after 1900 of positive inflation can lead to the exponential growth shown in the chart, above.
Source: http://www.zerohedge.com/news/chart-day-803-years-global-inflation
Cumulative inflation (median of 24 countries):
Year-over-year inflation. Notice how consistent years after 1900 of positive inflation can lead to the exponential growth shown in the chart, above.
Source: http://www.zerohedge.com/news/chart-day-803-years-global-inflation
Pension Payments are Doing Just Fine. Just Don't Live Too Long.
Congratulations younger generations! You get to pay into pension schemes that pay out ridiculously high pension payments to your parents and grandparents.
If your state is >80% funded, you are fine, for now. For the rest of you, you too are fine for now...until you aren't. Which will be relatively soon.
Source: http://www.businessinsider.com/the-us-20-2012-9?op=1
If your state is >80% funded, you are fine, for now. For the rest of you, you too are fine for now...until you aren't. Which will be relatively soon.
Global Manufacturing is... Surprise!... Contracting.
Here's how to read the following table. Under the "Status" column, if it shows "Contraction" then it's a bad thing.
Germany, Japan, France, Italy, Australia are all being taken down by the4-year high S&P 500 global economy.
What's this? Even China's official manufacturing index (blue line) is showing contraction (HSBC's measurement is the red line).
Source: http://www.zerohedge.com/news/global-manufacturing-update-indicates-80-world-now-contraction
Source: http://www.zerohedge.com/news/china-manufacturing-pmi-lowest-march-2009-market-response-bad-good-so-far
Germany, Japan, France, Italy, Australia are all being taken down by the
What's this? Even China's official manufacturing index (blue line) is showing contraction (HSBC's measurement is the red line).
Source: http://www.zerohedge.com/news/global-manufacturing-update-indicates-80-world-now-contraction
Source: http://www.zerohedge.com/news/china-manufacturing-pmi-lowest-march-2009-market-response-bad-good-so-far
Better Than the Black American Express Card
Over $5 trillion of US Debt growth in less than 4 years, not bad. Not bad at all.
It took about 13 years to go from $5 trillion to $10 trillion.
I wonder how long it will take to add another $5 trillion...
- August 31, 2012: $16 trillion.
- January 20, 2009: $10.6 trillion.
- 1996: $5.2 trillion.
Congratulations to our children and their children. You now owe the world and your parents/grandparents over $16 trillion.
Source: http://en.wikipedia.org/wiki/Centurion_Card
Source: http://www.zerohedge.com/news/its-official-1601576978821580
It took about 13 years to go from $5 trillion to $10 trillion.
I wonder how long it will take to add another $5 trillion...
- August 31, 2012: $16 trillion.
- January 20, 2009: $10.6 trillion.
- 1996: $5.2 trillion.
Congratulations to our children and their children. You now owe the world and your parents/grandparents over $16 trillion.
Source: http://en.wikipedia.org/wiki/Centurion_Card
Source: http://www.zerohedge.com/news/its-official-1601576978821580
What to do With All That Free Time, and No Money, and No Hope...
Zerohedge: Euro-Zone youth unemployment hs now ticked back up to its euro-era record-high of 22.6% (18-year highs).
The history of Europe over the last 100 years shows that austerity can have severe consequences and outcomes and perhaps most notably, the independent variable that did result in more unrest: higher levels of government debt in the first place.
Source: http://www.zerohedge.com/news/europes-scariest-chart-got-scarier
Source: http://www.zerohedge.com/news/austerity-unrest-and-quantifying-chaos
The history of Europe over the last 100 years shows that austerity can have severe consequences and outcomes and perhaps most notably, the independent variable that did result in more unrest: higher levels of government debt in the first place.
Source: http://www.zerohedge.com/news/europes-scariest-chart-got-scarier
Source: http://www.zerohedge.com/news/austerity-unrest-and-quantifying-chaos
Got Iron?
Don't worry, China will have a soft landing and its domestic demand will replace its export declines, right?
Source: http://brazilianbubble.com/chart-the-four-biggest-bubbles-of-the-last-40-years/
Source: http://brazilianbubble.com/chart-the-four-biggest-bubbles-of-the-last-40-years/