Thursday, December 16, 2010
Saturday, November 06, 2010
Friday, October 29, 2010
The dollar's slump could get far worse if the dollar index takes out last year's low, Robin Griffiths, technical strategist at Cazenove Capital, told CNBC. "If the (dollar index) takes out the low that was made roughly a year ago I really think that will not only encourage more sales, it will cause a little bit of minor panic," Griffiths said. "A year ago it was deemed too cheap, if it goes any lower than that it's actually become toxic waste."
The dollar resumed its recent downtrend in the wake of a meeting of finance ministers from the Group of 20 nations at the weekend. The meeting failed to yield a definitive agreement on currencies, putting selling pressure on the greenback.
"The dollar is being trashed, we've actually had effectively devaluation of about 14 percent in the last two months," Griffiths said.
Friday, October 22, 2010
Bank of America, JPMorgan Chase, GMAC and other big mortgage lenders recently suspended most foreclosure proceedings, following revelations that thousands of their foreclosures were being conducted like “foreclosure mills,” with tens of thousands of legal documents signed by low-level staffers with little or no knowledge of what they were signing.
[One example of “robo-signing, whereby a lower level overseer] received 10,000 mortgage foreclosure documents to process in one month. Based on an eight-hour workday, he would have had to read, verify and sign, in the presence of a notary, about one document per minute. He admitted to signing documents without reading them or checking the facts about homeowners said to be in default. And [he] was just one of many “robo-signers.”
Wednesday, October 06, 2010
And US companies continue to move manufacturing operations to a low-wage country, manufacture the product there using ultra cheap labor, with no regulations or environmental concerns, and then ship the product to the US for consumption, paying no tariff or tax on that shipment into our country. Up to 60% of our imports come from this kind of operation. This is what has cost our country so many jobs.
And from a purely business and profits point of view, why on earth would America's biggest banks and corporations make any of their money available for loans to new and small businesses in the USA when they can "earn' so much more with that money by either building new factories in China, or using it to gamble on derivatives and stocks in the great Wall Street casino?
Monday, September 06, 2010
But the focus of this post is that that $700 billion is just a small part of a much larger pool of money that has gone into propping up our nation’s financial system.
And most of that taxpayer money hasn’t had much public scrutiny at all.
According to a team at Bloomberg News, at one point last year the U.S. had lent, spent or guaranteed as much as $12.8 trillion to rescue the economy.
Just to refresh your memories on what one "trillion" dollars is:
That's one million times $1 million.
Or one thousand times $1 billion.
Monday, August 23, 2010
The US, UK, Germany, France, and Spain are all at risk of an "interest rate shock", either because they must roll over a cluster of short-term debt (US, France, Spain) or because deficits are so large.
Tuesday, July 13, 2010
[McClatchy News Service]
Tuesday, July 06, 2010
And says Robert Reich, former US labor secretary, "The economy is still in the gravitational pull of the Great Recession. All the booster rockets for getting us beyond it are failing."
The US is still trapped in depression a full 18 months into zero interest rates, quantitative easing (QE), and fiscal stimulus that has pushed the budget deficit above 10pc of GDP.
Saturday, July 03, 2010
Friday, June 11, 2010
The rally that recently ended in April 2010 came after a crash that was actually slightly more severe than the 1929 crash (53% versus 48%). It took the market up nearly 80% from the low! The recent rally also lasted longer than the 1930 rally did--a year, as opposed to 6 months.
It may be the start of a great new bull market, one that will shake off the current "correction" and roar back to the market's old highs. On the other hand, it may yet also be another version of what happened in 1930--the start of another bear market that will take the market down for years.
Importantly, we won't know for sure what today's market is until we look at it with the genius of 20/20 hindsight. Even as late as 1931, they didn't know they were in a "Great Depression" yet.
What things looked like in the Spring of 1929
Monday, May 24, 2010
Friday, May 07, 2010
And European banks have more at-risk assets in Portugal and Spain than in Greece.
Saturday, May 01, 2010
The course of events has parallels with the banking crises of the autumn of 2008, when successive institutions came under attack and their interrelationships and size devastated confidence in the financial system. For many observers, it was a matter of "for Lehman's, read Greece", as sovereign debt became the new sub-prime. Again there was classic domino effect: bond yields also rose in the other so-called PIIGS group of highly indebted nations – Ireland, Spain and even Italy, as investors demanded higher risk premia to take on these governments' debts.
Tuesday, April 20, 2010
Prediction: Goldman Sachs will get away with a slap on the wrist (just like Ken Lewis from Bank of America, and John Thain of Merrill got away with their investor fraud case). Crossing the line without breaking the letter of the law is an art perfected by these firms and their armies of lawyers.
Friday, April 09, 2010
Wednesday, March 10, 2010
Johnson says unless we break Wall Street's "stranglehold" we will be unable prevent the Great Depression 2.
Meanwhile, 43% of U.S. workers say they have less than $10,000 in savings, according to the Employee Benefit Research Institute's annual Retirement Confidence Survey.
Sunday, March 07, 2010
Saturday, February 27, 2010
With uncharacteristic bluntness, Federal Reserve Chairman Ben S. Bernanke warned Congress that the United States could soon face a debt crisis like the one in Greece, and declared that the central bank will not help legislators by printing money to pay for the ballooning federal debt.
"It's not something that is 10 years away. It affects the markets currently," he told the House Financial Services Committee.
Mr. Bernanke for the first time addressed concerns that the impasse in Congress over tough spending cuts and tax increases needed to bring down deficits will eventually force the Fed to accommodate deficits by printing money and buying Treasury bonds — effectively financing the deficit on behalf of Congress and spurring inflation in the process.
Some economists at the International Monetary Fund and elsewhere have advocated this approach, suggesting running moderate inflation rates of 4 percent to 6 percent as a partial solution to the U.S. debt problem. But the move runs the risk of damaging the dollar's reputation and spawning much higher inflation that would be debilitating to the U.S. economy and living standards.
[The Washington Times]
Monday, February 01, 2010
Sunday, January 10, 2010
Several European countries --first Iceland, then Ireland, now Greece,etc. -- are mired in inescapable debt and bankrupt nations, the result of crashing banks, bank bailouts, and soaring unemployment. The U.S. and U.K. watch from a distance, knowing their turn is next.
Recently, Moody’s released their notorious “misery index” — the nations that are most sunken in debt and least able to pay it back, requiring that “special measures” be taken to prove to investors that these governments are able to repay their loans.
The biggest losers of the misery index were not surprises and included Iceland, Ireland, and Greece But ranking right behind bankrupt Iceland was the United States: the once-proud super-power.
The U.S. and the U.K. need not make immediate cuts like Greece, Ireland, Spain, but they must make immediate plans to make major cuts, explains Moody’s chief of rating nations’ credit, Pierre Cailleteau: “…this will be the year  where both the U.S. government and the U.K. government will have to articulate a credible plan to address their problems of large debt.”
John Chambers of Standard & Poor’s was more blunt: "The U.S. government, like the U.K. government, … is going to need to draw down fiscal stimulus, pare expenditures [make cuts], raise revenues [taxes] and probably take a look at [cuts] in their entitlement programs" [Social Security, Medicare, and Education]
[From a commentary by Shamus Cooke]
Friday, January 01, 2010
If China, Russia and OPEC sold their U.S. Dollar surpluses, they would inflict losses in these holdings on themselves in the process of undermining not just the U.S. but the global economy. Each could react in different ways:
1. O.P.E.C. oil producers are dependent on the States for the security of their sovereignty. The House of Saud dare not reject the Dollar oil price or they will lose the physical protection of the U.S. …However, this may be changing as we now hear the news of a new Gulf currency that may be used to price oil in. If this does happen, then a major nail will have been driven into the coffin of the $ as the global reserve currency.
2. Russia needs to maximize oil income to keep itself economically sound. So it will accept the Yuan from China but won’t reject the Dollar payments from other countries. It is diversifying reserves as far as it can without damaging the Dollar exchange rate and would love to jettison the Dollar, but for the sake of the value of its reserves and the stability of the world’s currency markets, including the Ruble market, it won’t. (As one Treasury Official said, the $ may be our currency, but it’s your problem.)
3. China is stuck with around $3 trillion in its reserves, firmly snared in the $ trap. It is unhappy with this and is diversifying as far as it can [including into gold]. Its unshakeable answer is to peg the Yuan to the Dollar and reap the benefits of sucking the manufacturing out of the States and selling it cheap goods. There will be no loosening of the ‘peg’ until the problem of China’s Dollar reserves are solved. It is therefore turning the disadvantage into an advantage that is bleeding the U.S. of its strength. By doing this, the advantage of a weakening Dollar to the States is neutralized.
[Excerpt from Gold Forecaster]