Perspectives on the global economic meltdown- (Nov 28 2010)

Neshant · Post by **Neshant** » 26 May 2011 08:26

Funny photograph from 2010

of Dominique Strauss-Kahn, Tim Geithner and Christine Lagarde which Europe wants as the next IMF chief.

I can only imagine what strauss-kahn was talking about.

I gotta say the recent news about strauss-kahn brought some well needed bad publicity to the IMF. I sense the Federal Reserve is about to take this money printing racket one level higher as the current level is running out of room to contain the lie of printed paper having value. US savers are going to take the brunt of the coming 'stealth' devaluation.

I noted Tim Geithner has been running pillar to post trying to salvage the reputation of the IMF. And lots of pretences are being made about the selection of the next IMF head as being fair and international in scope when really its just a European who will go easy on the austerity demands regularly enforced on in-debt African states. Eventually an SDR type currency is coming against which many western countries will devalue so watch out for CNN spinning propaganda post 2012 about how this is good for all of us.

Neshant · Post by **Neshant** » 26 May 2011 08:47

HAHAHAHA!!! IMF takes Greece’s 111 tons of Gold (as we predicted and warned against!!)

■The European Gold Confiscation Scheme Unfolds: European Parliament Approves Use Of Gold As Collateral
http://www.zerohedge.com/article/europe ... collateral

■EU: “Greek Eurozone Membership Is At Stake” And Greece Must Agree On Tough Measures Or Return To Drachma
http://www.zerohedge.com/article/eu-gre ... rn-drachma

devesh · Post by **devesh** » 26 May 2011 11:49

^^^
Gold confiscation has a long history in the West. the most famous is FDR's orders in 1933.

Neshant · Post by **Neshant** » 26 May 2011 12:16

These days there are far more innovative ways of confiscation than raiding locker boxes as was the case in 1933.

More 'modern' way of robbery is via suddenly raising comex margins on speculators causing a price crash and probably shorting the other end of it. Or changing the rules of the game as the Hunt Brothers in the 70s found out when they tried to corner the silver market by buying up silver contracts. Most of the demand for silver involves traders not taking physical delivery. So its easy to play games with paper.

Foreign central banks however are dangerous. They won't take a paper receipts and won't store their gold in New York or London but rather demand physical delivery to store it in their vaults overseas. That's when Libya type invasions may be necessary and so called rebels start showing up fighting by day... and creating a central bank by night!

---

Wow That Was Fast! Libyan Rebels Have Already Established A New Central Bank Of Libya

The rebels in Libya are in the middle of a life or death civil war and Moammar Gadhafi is still in power and yet somehow the Libyan rebels have had enough time to establish a new Central Bank of Libya and form a new national oil company. Perhaps when this conflict is over those rebels can become time management consultants. They sure do get a lot done. What a skilled bunch of rebels - they can fight a war during the day and draw up a new central bank and a new national oil company at night without any outside help whatsoever. If only the rest of us were so versatile! But isn't forming a central bank something that could be done after the civil war is over?

http://theeconomiccollapseblog.com/arch ... k-of-libya

RoyG · Post by **RoyG** » 26 May 2011 20:54

Neshant wrote:HAHAHAHA!!! IMF takes Greece’s 111 tons of Gold (as we predicted and warned against!!)

■The European Gold Confiscation Scheme Unfolds: European Parliament Approves Use Of Gold As Collateral
http://www.zerohedge.com/article/europe ... collateral

■EU: “Greek Eurozone Membership Is At Stake” And Greece Must Agree On Tough Measures Or Return To Drachma
http://www.zerohedge.com/article/eu-gre ... rn-drachma

Yeah I was thinking that this may happen sometime back. Neshant we missed you.

abhishek_sharma · Post by **abhishek_sharma** » 28 May 2011 13:19

Understanding this article is beyond my very limited aukaat. Only for TFTA economists.

After the Greek Default: Martin Feldstein

svinayak · Post by **svinayak** » 28 May 2011 23:09

http://www.credit.com/blog/2011/05/reck ... he-bubble/

“Reckless Endangerment” Examines Who Burst the Bubble
by Christopher Maag on 05/28/2011

If the housing boom was a drug epidemic, investors were like crack addicts, driven by the need for more and more profit. Mortgage brokers were the street dealers, doing the dirty work to get the deals done.
And Wall Street was the drug cartel. Investment firms including Goldman Sachs, Merrill Lynch and Lehman Brothers controlled the mortgage business from top to bottom. They knew they were selling poison. But they continued anyway, because they were making so much money, according to “Reckless Endangerment,” a new book by New York Times writer Gretchen Morgenson and financial consultant Joshua Rosner.

It’s the second book published this month to reach the same conclusion, that Wall Street firms were responsible for the subprime mortgage bubble and bust.

“Just as drug lords know that their products pose hazards to their customers, the Wall Street firms packaging and selling mortgage pools to investors knew well before their customers did that the loans inside the securities had begun to go bad,” according to an adaptation of “Reckless Endangerment” published in the Huffington Post.
The new book is the latest in a string of publications with similar findings. As we reported earlier this month, law professor Kathleen Engel followed the subprime mortgage boom from its beginning in the late 1990s. Her book, the “Subprime Virus,” reached the same conclusions as Morgenson and Rosner about who caused the current mess.
[Article: A Subprime Pioneer's Notes on the Financial Crisis She Predicted]

“The investment banks like to portray themselves as just innocent middlemen,” says Engel, a law professor at Suffolk University in Boston. “That’s just not true. They made the market. They were in control.”
Where Engel’s research is airtight and her descriptions meticulous, Morgenson and Rosner shoot from the hip. The excerpt printed in Huffington Post careens randomly from Goldman Sachs’ role in orchestrating the mortgage meltdown to the collection of Ansel Adams photographs amassed by Fremont Investment & Loan, which used Goldman’s money to sell $28 billion in mostly subprime mortgages in 2006.

But if the writing in “Reckless Endangerment” feels a little overheated and disorganized, it may do a better job than Engel’s relatively academic work of translating the arcane actions of Wall Street investment firms into plain English.
By early 2004, fees from securitizing new mortgages began to falter because most people who could afford to buy homes had already done so, taking advantage of the Fed’s super-low interest rates. So Wall Street firms faced a choice, Morgenson and Rosner write: Do the hard work of finding legitimate ways to keep profits high, or take the easy route and keep the mortgage geyser going by offering ever-more risky loans.
Wall Street chose the easy route, Rosner and Morgenson find.

[Article: Finally, Bank Villains Are Named]
“(K)eeping the mortgage machine humming would also require that investment banks ignore numerous signs of wrongdoing along the way. This meant putting their own interests ahead of their clients’ at every turn,” they write. “While nobody mistook Wall Street banks for charity organizations, the degree to which these firms embraced and facilitated corrupt mortgage lending was stunning.”
Wall Street deceived its customers by hiding risky loans inside larger packages of safer mortgages, and paying ratings firms to describe the deals as safer than they really were, Morgenson and Rosner find. Firms including Bear Stearns and Morgan Stanley also created side bets called Collateralized Debt Obligations, which ostensibly acted like insurance but actually increased the risk by allowing investors to bet multiple times on the same–fundamentally bad–mortgages.
Most insidious, these complicated investment deals “allowed the firms who were selling them to bet against the clients buying them,” Morgenson and Rosner write.
“It’s like dog racing,” Engel told us. “You could have a trillion dollars’ worth of bets on an issuance of a million dollars.”

Neshant · Post by **Neshant** » 29 May 2011 00:18

Yeah I was thinking that this may happen sometime back. Neshant we missed you.

Thanks but I won't be around for long. I've got a personal project going which I hope to spin into a product so I have to stay focused on that.

Neshant · Post by **Neshant** » 29 May 2011 00:54

It used to be that a man could support his wife & child on a single medium income paycheck. That is becoming harder and harder to do as central banks which are the embodyment of commercial banks and govt take more and more via inflation, taxation and othe scams.

The financial & banking sector invent & manufacture nothing. Their profits are derived by taking from the real economy. Its a parasitic existance which is leading to the decline of all of society - including the birth rate.

Estimates are that it now takes $350K to raise a kid all the way upto college. How can a guy working an average wage support his wife and pay this astronomical sum. It keeps climbing and wages do not keep up with the inflating (read theft) by central banking goons. So people start having fewer kids. Its a kind of genocide in a way.

Something needs to be done to shut down this parasitic "industry" that's draining trillions from productive society.

---------
The No-Baby Boom

A growing number of couples are choosing to live child-free. And you might be joining their ranks.

http://www.details.com/culture-trends/c ... z1Ng9hokvH

Neshant · Post by **Neshant** » 29 May 2011 01:19

Now that France, Germany and other European countries are putting a European once again on the IMF seat (Mrs. Laggard), we can expect the debts of Greece, Portugal, Ireland..etc to be passed onto taxpayers of the world.

The reason France, Germany..etc support her (Laggard) as IMF chief is because they know she will rubber stamp all loans to Greece and other european countries - even though they will default.

Since 60% of the IMF is financed by non-european countries, Europe only pays 40% of the cost of this bailout and the rest of the world's taxpayers are made to suffer the loss. Basically our money is being given away to deadbeats so banks behind those bad loans can make their profit and transfer the bad loans to us via the IMF.

Its ridiculous that the IMF is being used to pass on the losses of these irresponsible countries to working productive people of the world. Tim Geithner is another crook who at the urging of bankers will agree to having that European woman Laggard as IMF chief so she can pilfer American taxpayers. Really the guy is just a lobbyists for bankers.

End this scam of the IMF which is just another Federal Reserve type con artist institution ripping us all off.

The irony is that the PIGS countries are just as eager to see this French woman assume the role of IMF chief as their European creditors (France & Germany). All hope to offload 60% of their losses onto other members of the IMF. While Africa is made to pay their debts in full plus crushing interests, these europeans get to offload their losses on suckers down the line.

---

Ireland will likely give backing to Lagarde for IMF

http://news.yahoo.com/s/nm/20110524/ts_ ... nd_lagarde

Theo_Fidel · Post by **Theo_Fidel** » 29 May 2011 03:18

Neshant wrote: It keeps climbing and wages do not keep up with the inflating (read theft) by central banking goons. So people start having fewer kids. Its a kind of genocide in a way.

Neshant,

Most couples not having children in the US are actually fairly well off. It is just that there is no pressure anymore to have children from society. Once women no longer feel compulsion they simply refuse to have children. Why would you do something that still has a 1 in 4000 chance of killing you in the US and 1 in 70 chance of killing you in India. Not only that with easy divorce the man can throw some money and walk out at any time.

It is now an epidemic in the US. In my work group there are 9 married people. 4 don't have children and don't plan too as they are too old. Not only that there are 2 live-in's who don't plan on children. And 3 a confirmed permanent single. Of course then there is our secretary with 5 kids from 3 different fathers...

This trend is now reaching India too. I know many many couples who have the token 1 child then get themselves fixed.

The long term projections show that by 2050 2 out of every 3 humans will be in Africa. By 2100 it will be approaching 3 out of every 4. Africans will swamp the rest of us by then. Which is only fitting as African are 99% of our genetic diversity. As such all the rest of us don't really matter long term.

Neshant · Post by **Neshant** » 29 May 2011 08:31

Most couples not having children in the US are actually fairly well off

I'm talking about the middle class. Also the increasing underclass who can only afford to have kids while on food stamps themselves. That is the vast majority.

The upper class are a smaller minority to whom perhaps kids may be an affordable luxury if they so choose. The middle class however increasingly have their options foreclosed (like a sterilization) by this scheme of transferring their wealth to the useless middleman economy and offloading of losses onto their backs.

Given the option, my guess is most people will want to have kids. The biggest disincentive to the middle class is the destruction of their purchasing power and their inability to afford the cost of raising children. This despite massive increases in tech & scientific innovation as well as productivity with both husband & wife entering the work force which should be lowering not increasing the cost of living.

Its no coincidence that the massive expansion of the useless middleman sector that is banking & financing occured at the same time as stagnation and now decline in purchasing power. What kept things afloat however was the pace of innovation from the real economy (computers, electronics, internet...etc).

Since 2000 however, not a single productive industry has emerged to create well paying jobs on a vast scale. Meanwhile the useless middleman economy not only continued to drain blood at the same rate but added an even bigger whopper of humungus failed investments onto the backs of the middle class taxpayer. I foresee a big decline in the standard of living coming soon.

vera_k · Post by **vera_k** » 30 May 2011 03:06

I'm guessing you don't have any kids. People don't have more kids, because they tend to be inconvenient and a lot of work. The Schwarznegger option is not available to everyone

In America as in other industrialised countries, it is primarily the religious nuts who want to a) have kids and b) have more than 1 or 2.

Neshant · Post by **Neshant** » 30 May 2011 03:45

A vast portion of what is 'inconvenient' about having kids is cost.

The 'lots of work' component comes down to both husband & wife having to work to keep things afloat. It used to be that mom could stay home and the guy went out to work. Not any more unless you are in the upper class.

The useless middleman industry which has grown alarmingly large is a black hole sucking trillions of dollars out of the real economy. Amazing given the fact that it produces absolutely nothing tangible!

vera_k · Post by **vera_k** » 30 May 2011 04:01

By that theory, billionaires and other types of royalty should have plenty of kids, since they can afford to hire people to diaper them, feed them, drive them to school and such while the parents are vacationing on a tropical island. But alas, the women too have input into this decision to scotch such delusions.

Neshant · Post by **Neshant** » 30 May 2011 04:12

I don't know of any billionaire who does not have kids. Almost all do and often more than 2.

The middle class however is seeing their options foreclosed. What I see coming down the pike in addition to lower purchasing power and falling standards of living are higher taxes that the useless middleman sector has saddled the taxpayer with for years to come. It really is a fraud of an "industry".

Neshant · Post by **Neshant** » 30 May 2011 04:27

Good slaves are needed to work hard and hand over their pay to the useless middleman industry.

Apply now!

-----

Greece set for severe bail-out conditions
By Peter Spiegel in Brussels, Quentin Peel in Berlin and Ralph Atkins in Frankfurt

Published: May 29 2011 22:30 | Last updated: May 29 2011 22:56

European leaders are negotiating a deal that would lead to unprecedented outside intervention in the Greek economy, including international involvement in tax collection and privatisation of state assets, in exchange for new bail-out loans for Athens.

People involved in the talks said the package would also include incentives for private holders of Greek debt voluntarily to extend Athens’ repayment schedule, as well as another round of austerity measures.

Officials hope that as much as half of the €60bn-€70bn ($86bn-$100bn) in new financing needed by Athens until the end of 2013 could be accounted for without new loans. Under a plan advocated by some, much of that would be covered by the sale of state assets and the change in repayment terms for private debtholders.

Eurozone countries and the International Monetary Fund would then need to lend an additional €30bn-€35bn on top of the €110bn already promised as part of the bail-out programme agreed last year.
...
Officials think Greece will be unable to return to the financial markets to raise money on its own in March – as originally planned in the current €110bn package – meaning that the IMF is now forbidden from distributing any additional cash. Without the IMF funds, eurozone governments would either be forced to fill the gap or Athens could default.

http://www.ft.com/cms/s/0/eb91ba84-8a27 ... z1NmVJ0QzA

vera_k · Post by **vera_k** » 30 May 2011 05:46

Neshant wrote:I don't know of any billionaire who does not have kids. Almost all do and often more than 2.

There's several, apart from our own Crown Prince

http://www.forbes.com/profile/alice-walton

http://www.forbes.com/profile/mikhail-prokhorov

http://www.forbes.com/profile/alisher-usmanov

Theo_Fidel · Post by **Theo_Fidel** » 30 May 2011 09:36

Neshant wrote:A vast portion of what is 'inconvenient' about having kids is cost.

The 'lots of work' component comes down to both husband & wife having to work to keep things afloat. It used to be that mom could stay home and the guy went out to work. Not any more unless you are in the upper class.

The useless middleman industry which has grown alarmingly large is a black hole sucking trillions of dollars out of the real economy. Amazing given the fact that it produces absolutely nothing tangible!

There is a lot of angst here... ... but in the US having kids is not inconvenient at all. Yes if both parents work full time and there is no family support it can be hard, but there is plenty of flexible work available, albeit at lower pay...

Given a true choice many folks in India too would not have children. In fact there are many who should not... ..yet society forces them to...

What is really shredding the middle class in the US is down to a few items.

- Imports. So much of what the blue collar American made is now imported. This has consequences.

- The growth of a predatory wealthy class. This class has convinced the American that an 'honest wage' will make him rich. Complete lie. A nations wealth has to be fought for or else the wealthy will capture it all. This is becoming more visible in the US as the top 1% now own about 40% of US wealth. The top 5% receive 40% of US earning income. You can thank Reagan for this. It is his policies that shredded the US middle class.

- The irrational love for overly large homes. Middle class folks are buying and maintaining $500,000+ homes of 10,000 sqft with 6 car garages. This is a recipe for poverty in the rest of your life. They have been sold the idea that they are rich if they have a 'rich' house. I know an engineer with a $600,000 house, w/ a 4 car garage and about 9,000 sqft. His property tax alone is $13,000 per year. His interest only mortgage is about $2,800 per month! His heating bill in February was $800. All his money goes to paying of the bank, bills, maintenance, taxes, etc. He estimated that his free cash flow, after his wife's pay-check is $1,800 per month. Other than his house he is technically poverty stricken, essentially below the poverty line. And this is locked in long term.

- Buying a home after you are 40 years old. It tempting to do so since your income is much higher than when you bought one at age 30. But this is a trap. What you must think of is the 30 year mortgage involved. Buying after age 40 means you are locked in to paying huge mortgages into your 70's. Poverty guarantee.

- Finally lack of ability to kick out the kids. So many parents I know have at least 1 or 2 30+ year old kids still living at home. Instead of being two seperate families with seprate income streams now both are dependent on a single stream. Poverty guarantee again.

Hari Seldon · Post by **Hari Seldon** » 30 May 2011 16:36

Fact is the khanate and the TFTA Oiropeans have managed to get rich before they grew seriously old. They've had it good. Sure, the next gen or whatever which comes up in these countries won;t have it as good as the last one did and so on for the next few decades. interestingly, the next few generations are also the least white and the most brown/black/yellow in the TFTA lands. The retiring rich TFTA folk will desperately want order to prevail for as long as the debts owed them (pensions, retirements etc) are consumed in full only. After that, who knows or cares...

Waiting for the fertility rate to fall below replacement voluntarily when our per capita is so woefully low is futile, IMO. It will come down, down the line, till then we are stuck with what we have.

Neshant · Post by **Neshant** » 31 May 2011 08:02

What is really shredding the middle class in the US is down to a few items.

You missed the main thing : The transfer of trillions of dollars via the federal reserve to the banking & financing "industry" (what I refer to as the useless middleman sector) from the real economy. Plus the offloading of huge losses incurred by the useless middleman sector onto the backs of the real economy.

The fiat money scam is another major reason for shredding of the middle class - especially since 2008. Its destroying the purchasing power of the middle class and anyone who saves and transfers that wealth to the banking class.

IMO all this is leading to a vastly lower standard of living for people working in the real economy. If you are doing banking & financing or holding a govt job with pensions paid for by the real economy, its all good!

Neshant · Post by **Neshant** » 31 May 2011 08:09

This woman is only interested in giving bailouts to French/German banks who made bad loans to the PIGS. Once she's in the IMF seat, "loans" eagerly handed out to Greece by her will go directly to French & German banks.

Meanwhile taxpayers of the world funding the IMF are left holding the bag when these IMF loans to Greece go unpaid - as they surely will.

Its a way of making whole these French & German banks at the expense of the taxpayers of the world. The rest of the world funds 60% of the IMF so the French & German only suffer a small loss.

Brazil seems to be playing its cards. Why is India ASLEEP on the issue?

To summarize :

1. Get Greece to take loans from the IMF
2. Get Greece to give those IMF loans to French & German Banks as repayment
3. Greece defaults on the IMF instead of French/German banks.
4. Suckers like India end up eating the IMF's loss.

---------

France's Lagarde in Brazil to promote IMF candidacy

http://news.yahoo.com/s/ap/20110530/ap_ ... imf_future

Chinmayanand · Post by **Chinmayanand** » 31 May 2011 11:28

EU plans to strip UK of bank regulation powers

Sovereign control of financial regulation is under threat from European moves to harmonise rule books across member states, the three men at the heart of the future Bank of England have warned.

Theo_Fidel · Post by **Theo_Fidel** » 31 May 2011 21:06

Neshant wrote: You missed the main thing : The transfer of trillions of dollars via the federal reserve to the banking & financing "industry" (what I refer to as the useless middleman sector) from the real economy. Plus the offloading of huge losses incurred by the useless middleman sector onto the backs of the real economy.

The fiat money scam is another major reason for shredding of the middle class - especially since 2008. Its destroying the purchasing power of the middle class and anyone who saves and transfers that wealth to the banking class.

IMO all this is leading to a vastly lower standard of living for people working in the real economy. If you are doing banking & financing or holding a govt job with pensions paid for by the real economy, its all good!

All these are contributing factors but when you look at numbers they are relatively small.

The total US national wealth is ~ $250 Trillion. The residential market alone is worth about $30 Trillion. Compared to that the scams are mere rounding errors. Unfortunately the US can continue on its present course for a looong time.

svinayak · Post by **svinayak** » 31 May 2011 23:47

http://www.bloomberg.com/news/2011-05-3 ... -says.html

Home Prices in 20 U.S. Cities Fall to 8-Year Low
By Bob Willis - May 31, 2011 7:45 AM PT

A sign stands outside an existing home for sale in Hammond, Louisiana. Photographer: Derick E. Hingle/Bloomberg
Home prices in 20 U.S. cities dropped in March to the lowest level since 2003, showing housing remains mired in a slump almost two years into the economic recovery.
The S&P/Case-Shiller index of property values in 20 cities fell 3.6 percent from March 2010, the biggest year-over-year decline since November 2009, the group said today in New York. At 138.16, the gauge was the weakest since March 2003.
A backlog of foreclosures poised to reach the market means prices may stay depressed, dissuading builders from taking on new-home construction projects. Unemployment at 9 percent and stricter lending conditions are signs that any recovery in housing may take years.
“With the foreclosure pipeline still full to bursting, it’s hard to see this downward pressure on prices abating,” said Paul Dales, a senior U.S. economist at Capital Economics Ltd. in Toronto. “I wouldn’t be surprised to see prices continue to fall this year and maybe into next year.”
Economists surveyed by Bloomberg had forecast a 3.4 percent decline from a year earlier, according to the median forecast of 27 economists surveyed. Estimates ranged from declines of 4.9 percent to 2.8 percent.
Other reports today showed consumer confidence unexpectedly declined in May to a six-month low, and business activity in the U.S. cooled more than forecast.
Stocks rose amid speculation the European Union will pledge further aid to Greece. The Standard & Poor’s 500 Index was up 0.5 percent to 1,338 at 10:37 a.m. in New York.
Nationally, home prices decreased 5.1 percent in the first quarter from the same time in 2010, and were down 4.2 percent from the previous three months, the biggest one-quarter decrease since the first three months of 2009. At 125.41, the index was the lowest since the second quarter of 2002.
Greece Boosts Shares
Home prices in the 20 cities fell 0.2 percent in March from the prior month after adjusting for seasonal variations, a ninth consecutive decrease. Thirteen of the 20 areas posted price declines in March from the previous month, led by Charlotte, North Carolina, and Minneapolis.
The year-over-year gauge provides better indications of trends in prices, the group has said. The panel comprises Karl Case and Robert Shiller, the economists who created the index.
Nineteen of the 20 cities in the index showed a year-over- year decline, led by a 10 percent slump in Minneapolis. The exception was Washington, where values climbed 4.3 percent.
Prices in 12 markets dropped to fresh lows in March from their 2006, 2007 peaks: Atlanta, Charlotte, Chicago, Cleveland, Detroit, Las Vegas, Miami, Minneapolis, New York, Phoenix, Portland, Oregon, and Tampa.
‘Double-Dip’
“This month’s report is marked by the confirmation of a double-dip in home prices across much of the nation,” David Blitzer, chairman of the Case-Shiller index committee at S&P, said in a statement.
Further declines in home prices are likely to constrain the consumer spending that makes up 70 percent of the economy, as homeowners feel less wealthy and have little home equity to borrow against.
Reports earlier this month showed the housing market remains depressed as the broader economy slows.
Pending sales of previously owned homes plunged 12 percent in April from the prior month, the National Association of Realtors said last week. The gauge measures contract signings, which typically lead closings by one to two months, a sign existing purchases will slow.
Sales Fall
Sales of previously owned homes, based on closings, fell 0.8 percent in April to a 5.05 million rate, with demand for distressed properties accounting for 37 percent of the total, NAR said last May 19.
The overhang of unsold housing inventory will probably remain an issue for builders and buyers alike. CoreLogic Inc. in March estimated about 1.8 million homes were more than 90 days delinquent, in foreclosure or bank-owned, a so-called “shadow inventory” set to add to the unsold supply of 3.87 million previously owned homes on the market at the end of April.
Builders are gloomy and project demand will remain depressed into next year, Bill Wheat, chief financial officer of D.R. Horton Inc., told a housing conference in New York on May 11.
“We still see housing demand at very weak levels,” Wheat said. “It could still be a struggle in 2012.”
To contact the reporter on this story: Bob Willis in Washington at [email protected]

Neshant · Post by **Neshant** » 01 Jun 2011 07:21

Theo_Fidel wrote:All these are contributing factors but when you look at numbers they are relatively small.
The total US national wealth is ~ $250 Trillion.

I don't know where the 250 trillion figure is coming from but I'm sure a lot of accounting gimmicks and questionable valuation goes into coming up with that number.

The useless middle man industry is anything but small. Its the biggest scam going. It may well be responsible for the downfall of America itself and the destruction of the productive economy.

Since 2008, an estimated 19 trillion dollars has been drawn mostly against the future and blown on this very useless sector. I can think of a LOT of better R&D investments that could have been made with that money.

Hari Seldon · Post by **Hari Seldon** » 02 Jun 2011 06:46

DeLong: The Intellectual Collapse of the Chicago School of Economics Continues…

Sure, Brad DeLong was never a great fan of the Chic school anyway. Hence the unmistakeable element of schudenfraude only. Still, worthwhilelist of links to readings...

Bottomline:

I didn’t need a global economic collapse to know that the Chicago School of Economics was intellectually bankrupt —but the crisis sure has revealed that much to many many others:

Not only that, they are too narrowly focused. Its not just the Chicago School — which happens to be especially wrong — its all of economics that stunk the joint up:

Must admit moi was taken in by the chicago school's overly elegant prescriptions, descriptions and remedies for reality back as a grad student only... the global fin crisis sure did open moi eyes. Subah ka bhoola...I guess.

vic · Post by **vic** » 02 Jun 2011 07:09

With QE2 ending in June 2011, Me thinks that push for QE3 is starting

Hari Seldon · Post by **Hari Seldon** » 02 Jun 2011 09:00

Brilliant expose in Salon of the Britiosh historian/charlatan Niall Ferguson. This is the same clown who's had a lot of prescriptions for the TFTA west on how to navigate the global fin crisis such that the TFTAs retain dominance/ soup-e-rearity against the unwashed turd world.

Niall Ferguson and the brain-dead American right

The British historian owes his celebrity here to the absence of authentic American conservative intellectuals

The US right is in for a prolonged slump with no redemption at the end of it. Rightly so, perhaps. Like someone famousluy asked and has so far gone unanswered "What exactly are American conservatives seeking to conserve?"

Recently, it was announced that Henry Kissinger has made him his official biographer, perhaps in the hope that Ferguson, who thinks that the Kaiser should have been allowed to crush Europe, will be equally kind to Kissinger’s reputation.

Time magazine in 2004 named Ferguson one of the 100 most influential people in the world, which might help to explain the condition of the world.

Ouch or what?

The Dashing Brit then told the assembled plutocrats that unemployed Americans are lazy: "The curse of long term unemployment is that if you pay people to do nothing, they’ll find themselves doing nothing for long periods of time." On an earlier occasion he created a stir when he compared Barack Obama to the lascivious cartoon character Fritz the Cat, because, he said, both are "black and lucky."

The Brits have got pluckyness galore in them, gotta admit. To walk on with a straight face after faux paus like these takes some dragon scales for skin...

Ferguson is the most prominent of a number of British conservative intellectuals and journalists who have found more sympathetic audiences in the U.S. than in their own country, where their enthusiasm for Victorian imperialism and Victorian economics stigmatizes them as cranks. His Old World accent and reactionary politics might not have been sufficient to earn Niall Ferguson his cisatlantic celebrity, were it not for the demise of American intellectual conservatism, chronicled by Sam Tanenhaus and others. The mass extinction of America’s intellectual right at the hands of anti-intellectual Jacksonian populists like the Tea Partyers has created a lack of native conservative thinkers with impressive academic credentials who are willing to dash to a TV studio at a moment’s notice. And in an era when the conservative movement is symbolized by lightweights like Glenn Beck, Ann Coulter and Jonah Goldberg, rather than William F. Buckley Jr., George Will and Irving Kristol, even Niall Ferguson can be mistaken for an intellectual.

Hmmm.

Niass wrote:

Had Britain stood aside -- even for a matter of weeks -- continental Europe could therefore have been transformed into something not wholly unlike the European Union we know today -- but without the massive contraction in British overseas power entailed by the fighting of two world wars ... And there plainly would not have been that great incursion of American financial and military power into European affairs which effectively marked the end of British financial predominance in the world.

Whoa. Thank gawd for small mercies. No doubt WWI bankrupted the empire and sowed the beginning of the end of the Raj in its largest colony. BUt more serious historians aver the limits of brit imperial power were shown up rather starkly in the pyrrhic Boer war in the Afrikaans at the turn of the last to last century.

Alas, the world got American primacy and decolonization rather than world domination by the City of London in league with the German General Staff.

More Fer-gas-son

"Unlike most European critics of the United States, then, I believe the world needs an effective liberal empire and that the United States is the best candidate for the job." And should the neo-British American empire suffer from a shortage of willing cannon fodder, the Dashing Brit had a solution: "If one adds together the illegal immigrants, the jobless, and the convicts, there is surely ample raw material for a larger American army."

OMG. Such noble thoughts and our poor Thackerays, mere boy scouts against this col-ass-us get far more brickbats only...

Anyways, starts to get a tad OT for this dhaga perhaps. Should stop here. But read it all, for the laughs if nothing else.

devesh · Post by **devesh** » 02 Jun 2011 22:13

self deleted.....

Neshant · Post by **Neshant** » 03 Jun 2011 12:38

Investors are running away.

Here's what the $1.2 Trillion money manager had to say in his April 2011 outlook:

I sit before you as a representative of a $1.2 Trillion money manager, historically bond oriented, that has been selling Treasuries because they have little value within the context of a $75 Trillion total debt burden. Unless entitlements are substantially reformed, I am confident that this country will default on its debt; not in conventional ways, but by picking the pocket of savers via a combination of less observable, yet historically verifiable policies - inflation, currency devaluation and low to negative real interest rates.
- Bill Gross, Head of PIMCO

http://seekingalpha.com/article/270032- ... ip-happens

Sell Fort Knox’s gold, some say. Asset sale urged to counter debt.

The United States may have run up a huge debt, but it is not poor. The federal government owns roughly 650 million acres of land, close to a third of the nation’s total land mass. Plus a million buildings. Plus electrical utilities such as the Tennessee Valley Authority. And the Interstate Highway System.

There’s about 147 million ounces of gold parked in the legendary vault. Gold is selling at nearly $1,500 an ounce. That’s many billions of dollars in bullion.

http://www.journalgazette.net/article/2 ... /1006/NEWS

Ron Paul: Sell The Gold In Fort Knox. (its a dare, he knows the bankers won't sell it even though they claim its not money)

At least one presidential contender, Ron Paul, has told The New York Sun he thinks it would be a good move.

The report did not mention the possibility of selling the government’s holdings of bullion, though the 261.5 million ounces of gold the Treasury Department lists in its reserve position would, at a recent price of $1,492 an ounce, would theoretically fetch $390.2 billion. The Wall Street Journal reported Monday that a group of Republican congressmen supports the idea of selling gold.

http://www.nysun.com/national/selling-g ... big/87350/

“Major Crash” Coming for Stocks. DOW 3300: Harry Dent (this guy's predictions have been way off so take it with a pinch of salt)

The good news, for those long, is Dent predicts the Dow will trade as high as 13,200 by mid-summer and the S&P 500 as high as 1430, or more-than 7% above current levels. The bad news is "then we could see another major crash," Dent says, forecasting the Dow could trade as low as 3300 in a worst-case scenario. "Bubbles go back to where they started or a little lower," he says. "The stock market bubble started at (Dow) 3800 in late 1994."

http://finance.yahoo.com/blogs/daily-ti ... 5-415.html

Billionaires Dumping Stocks, Fleeing Market

http://w3.newsmax.com/a/aftershock4/?PROMO_CODE=C490-1

Treasury Secretary Timothy Geithner threw a bomb at America’s financial future last night, saying he is “certain” another financial catastrophe is on the way and that there is no way of reaching agreement on the debt ceiling without increasing taxes on the wealthy. (is there any other evidence needed that the system is a ponzi scheme where not taking on more debt = crisis)

http://www.newsmax.com/Headline/Timothy ... ode=C49A-1

Wal-Mart: Our shoppers are 'running out of money'

With food prices rising, Duke said Wal-Mart is charging customers more for some fresh groceries while reducing prices on other merchandise such as electronics.

Wal-Mart (WMT, Fortune 500), which averages 140 million shoppers weekly to its stores in the United States, is considered a barometer of the health of the consumer and the economy.

Wal-Mart's core shoppers are running out of money much faster than a year ago due to rising gasoline prices, and the retail giant is worried, CEO Mike Duke said Wednesday."We're seeing core consumers under a lot of pressure," Duke said.

"Purchases are really dropping off by the end of the month even more than last year," Duke said.

http://money.cnn.com/2011/04/27/news/co ... /index.htm

Military Coup Could Oust Obama.

Former White House speechwriter John L. Perry has courted controversy by suggesting that the U.S. Military, upholding their oath to defend the Constitution against domestic enemies, could stage a bloodless coup to oust President Obama.

In an article originally posted on the Newsmax website, Perry wrote, “There is a remote, although gaining, possibility America’s military will intervene as a last resort to resolve the “Obama problem.” Don’t dismiss it as unrealistic.”

The article outlines how military officers, outraged at Obama’s “trampling” on the Constitution, nationalization of American institutions, rising deficits, unemployment and taxes, could peaceably seize power from the “radical-left commissars” of the Obama administration.

Perry warns that America could be unrecognizable by 2012, prompting a coup to “restore and defend the Constitution,” a prospect that is “weighing heavily on the intellect and conscience of America’s military leadership,” he writes.

http://www.prisonplanet.com/former-whit ... obama.html

Denmark unexpectedly entered a recession as the economy contracted for a second quarter as consumers and the government cut spending amid rising prices and a widening budget deficit.

Gross domestic product shrank 0.5 percent in the first quarter after contracting a revised 0.2 percent at the end of 2010, Copenhagen-based Statistics Denmark said today. Economists surveyed by Bloomberg had expected growth of 0.5 percent in the first quarter, according to the average of four estimates.

“The figures are highly surprising,” Steen Bocian, an economist at Danske Bank A/S in Copenhagen, said in an e-mail. “The reason for the lower consumption is a combination of higher taxes and higher inflation, driven by raw material prices.”

http://www.bloomberg.com/news/2011-05-3 ... nding.html

Military coup possible in Greece

The U.S. Central Intelligence Agency warned in a report that the tough austerity measures and the dire situation could escalate and even lead to a military coup, according to a report by Germany’s popular daily Bild.

http://www.hurriyetdailynews.com/n.php? ... 2011-05-29

Australia First-Quarter GDP Logs Biggest Fall in 20 Years.

Australia's economy shrank 1.2 percent in the first quarter, suffering its biggest decline in 20 years, after extensive flooding hit coal exports, but a once-in-a-lifetime mining boom is expected to help growth bounce back quickly this year.

Data on Wednesday showed annual growth in gross domestic product (GDP) slowed to a tepid 1.0 percent, down from 2.7 percent. The results were in line with an updated Reuters poll on Tuesday after a report showed net exports subtracted a record 2.4 percentage points from growth.

Credit tightening threatens China's 'giant Ponzi scheme'

http://www.telegraph.co.uk/finance/fina ... cheme.html

Bill Gross, Nouriel Roubini, Laurence Kotlikoff, Steve Keen, Michel Chossudovsky and the Wall Street Journal all say that the U.S. economy is a giant Ponzi scheme.

Virtually all independent economists and financial experts say that rampant fraud was largely responsible for the financial crisis.

http://www.globalresearch.ca/index.php? ... leId=22395

United States is Giant ‘Ponzi’ Scheme – Pimco’s Bill Gross

US authorities are operating a “brazen” Ponzi scheme in government debt by buying trillions of dollars of bonds to stimulate the economy, according to Bill Gross, managing director of Pimco, the world’s biggest bond house.

Mr Gross said more QE is a huge gamble, but necessary because the US is “in a ‘liquidity trap’

“[Cheque] writing in the trillions is not a bondholder’s friend; it is in fact inflationary, and, if truth be told, somewhat of a Ponzi scheme,” he wrote on his investment outlook, arguing that creditors have always expected to be paid out of future growth.

http://www.midasletter.com/index.php/un ... zi-scheme/

For whatever reason, the stock market crashes of 1929, 1987 and 2008 occurred between May and October...."Since 1950, the Dow Jones industrial average has produced an average gain of 7.4 percent from November through April and 0.4 percent from May through October.

http://www.huffingtonpost.com/2010/05/0 ... 60734.html

Largest lender State Bank of India (SBI) has 44 million transactions everyday.

If SBI earns 1 Ruppee profit from each transactions, then SBI earns Rs 4.5 crores profit everyday which comes to estimated Rs 1,125 crores profit every year for SBI.

Understandably, SBI must be earning more than Rs 4.5 crores profit everyday. But SBI has displayed Rs 21 crores profit only for the fourth quarter ended March 2011 as against Rs 1,866.60 crore in the same quarter in the previous fiscal.

SBI is dealing with some bad loans, operating expenses including employee cost, Tax of over Rs 900 crore and transfer to some pension fund.

Despite dismal performance, the bank maintained dividend at 300 per cent for 2010-11. SBI will pay dividend of Rs 30 per share on face value of Rs 10 after shareholders approval.

Altair · Post by **Altair** » 03 Jun 2011 22:07

The nonfarm payroll data really messed up the dollar today..US economy is in much thicker doodoo than was earlier thought.

Neshant · Post by **Neshant** » 04 Jun 2011 05:50

as long as banking & financing crooks don't hijack India and start draining money out of the productive economy with paper con games, the projections may well be on track.

kmkraoind · Post by **kmkraoind** » 04 Jun 2011 09:56

Wondering how much spare time Neshantji has. Some of his posts on economic issues with the amount of detailing are really worth remembering, and above post with the no of links, wow, really great. Pranam gurudev.

Neshant · Post by **Neshant** » 05 Jun 2011 01:56

my favourite video

Neshant · Post by **Neshant** » 05 Jun 2011 03:46

the enormously destructive effect of central banking, fiat money and the useless middleman sector has an impact far beyond just ripping people off.

its like a genocide in a way as the vast majority of people are poorer after wealth is extracted from them leaving them less inclined to add another mouth to feed. This is especially so when 45 million are on food stamps as it is!

This scam called fiat central banking which is really just croney capitalism needs to end. Its destroying the economy and the lives of people to support a vast useless middle man industry.

---------

Drop in U.S. birth rate is the biggest in 30 years

http://articles.latimes.com/2011/mar/31 ... s-20110331

Muppalla · Post by **Muppalla** » 05 Jun 2011 04:34

2012 end of the world may be coming true.

VikramS · Post by **VikramS** » 06 Jun 2011 10:59

GuruPrabhu:

Investment decisions are not made on the basis of economy, alone. What matters for asset prices is money-flow. You follow that; not just the economy.

When the stock market bottomed in 2009, there was a reasonable chance that the entire financial system would collapse. But why did the stock market bottom? Why did the stock market hit its top the day Bin-Laden was killed?

The most basic investment mistake a person can make is to tie their perceptions of the economy to the performance of markets. Equity markets often top on good economic news; they often bottom on bad economic data.

One Golden Rule is to remember that all assets are currently priced in paper money and it is the amount of money chasing or leaving different asset classes which determines their price movement. It is the money flow which helps form, and sustain trends. And money can be created (as it is being done now) and also destroyed (as it happened during the great crash); it is a virtual paper entity.

I am not sure what you mean by where the money is invested. Are you talking about geographical diversification or asset class diversification (equities, convertibles, bonds, commodities, precious metals, REITs etc..)? Diversification across geographies and especially asset classes is important.

There is a very strong correlation among equity performance across major geographical regions so geographical diversification is not the most critical when it comes to equities. With fixed income instruments geographical diversification helps but you have to be sensitive about currency movements since they can often make or break the investment.

Also remember that a significant chunk of profits for major US corporations come from outside the US so it is not the US economy alone which is important for corporate profits. Weaker dollar in fact helps their profits since their foreign income is worth more and they can compete on better terms.

Cash too is a position worth having especially when the trend is uncertain or changing. Right now we are at that turning point so there is no point being heavily invested in any class, either long or short. More people are leaning short equities/commodities for the next few weeks/months.

I am not a registered investment adviser (yet) so this is all I can go into.

Prem · Post by **Prem** » 07 Jun 2011 02:14

http://www.bloomberg.com/news/2011-06-0 ... ansas.html

The worst droughts in decades are wilting wheat fields from China to the U.S. to the U.K., overwhelming Russia’s return to grain markets and driving prices to the highest levels since 2008.
Parts of China, the biggest grower, had the least rain in a century, some European regions are the driest in 50 years and almost half the winter-wheat crop in the U.S., the largest exporter, is rated poor or worse. Inventory is dropping 8.8 percent, the most in five years, Rabobank International says. Prices will advance 20 percent to as high as $9.25 a bushel by Dec. 31, a Bloomberg survey of 14 analysts and traders shows.
Wheat as much as doubled in the past year as crops failed, spurring Ukraine and Russia to curb shipments and increasing the U.S. share of global sales by the most since 2004. Russia ending its export ban on July 1 and Ukraine lifting quotas may not be enough as crops wither elsewhere, fuelling gains in food prices which the United Nations says are already near a record. “In 32 years, I’ve never seen so many problems in so many places,” said Dan Basse, the president of AgResource Co., a farm researcher in Chicago. “We’re concerned about the world story now,” said Basse, who has been studying agricultural markets since 1979 and expects prices as high as $10 this year.

ramana · Post by **ramana** » 07 Jun 2011 07:17

Prem, Newsweek had special on global warming but to me it looked like above scenario....