1st !

So it sounds like its time to retract like a turtle into US Bonds.

chinese bond auction FAILS China failed to sell all 28 billion yuan ($4.1 billion) of one-year government bonds it offered at an auction today because of concern inflation will return, traders said.The Ministry of Finance sold 27.5 billion yuan of the notes at a yield of 1.06 percent, said Tang Guohui, a fixed-income analyst and trader at Industrial Securities Co. in Shanghai. The rate was higher than the median estimate of 1.05 percent in a Bloomberg News survey of analysts and the yield of 0.89 percent in the last auction of similar-maturity debt in May.“The failure to sell the amount of bonds as planned showed the rising inflation concerns,” said Tang. “The auction result will add to the bearish sentiment in the bond market.”

I’m going to re-iterate my “green moss” hypothesis … there is some hope, somewhere, clinging on for dear life.Not with a bang, but a whimper.

As time goes on I suspect that we will see a return of the good vs evil, with us or against us discussion. I have to wonder as information concerning Goldman Sachs’s loss of control its microtrend trading platform that the US Attorney in the Southern District of New York said posed a threat to market manipulation is revealed amid calls for investigations of Goldman’s use of this technology by the SEC and CFTC if the pool of “evil” might expand to encompass the differences between Enhanced Liquidity Providers under loopholes in current regulation and the so called “speculators” who, under current interpretation are the target of the evil label for executing less than 5% of the trades.As over 48% of all US equity market trading this past week was from these enhanced liquidity providers we will see how much play this developing story gets. It can be argued with some success that much of this “rally” in equities and commodities may well have been fueled by this Goldman program and those that make use of it and similar platforms.

pile of CDOs and such under same layaway plan

Professor,Faux, faux, faux pas on the use of the word “myself” in the first paragraph.

Big Banks Don’t Want California’s IOUs

The group of banks included Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and J.P. Morgan Chase & Co., among others. The banks had previously committed to accepting state IOUs as payment. California plans to issue more than $3 billion of IOUs in July.

Others are saying the trend could continue until the end of 2012 when all tha Alt A, prime, and ARM resets fianlly stop foreclosing. There can be no recovery at all if this is still going on.U.S. Home Prices to Fall Through 2011’s First QuarterJuly 7 (Bloomberg) — Home prices may fall in more than half of the largest U.S. cities through the first quarter of 2011 as unemployment and foreclosures rise, mortgage insurer PMI Group Inc. said.Thirty of the 50 biggest metropolitan areas have at least a 75 percent chance of lower prices through March 31, 2011, Walnut Creek, California-based PMI said in a report today. The decline is likely to spread to “all regions of the nation” from California, Florida, Nevada and Arizona, the states most affected by the housing slump, PMI said.“The housing market has been hit by a demand shock of high unemployment and a supply shock of distressed foreclosure sales,” LaVaughn Henry, senior economist at PMI, the fourth- largest U.S. mortgage insurer, said in an interview.Unemployment rose to 9.5 percent in June, bringing the total number of jobs lost to 6.5 million since December 2007, the Labor Department said July 2. Foreclosure filings may hit a record 1.8 million in the first half of the year as more jobless homeowners default on their loans, real estate data service RealtyTrac Inc. said last month.Home prices in 20 major U.S. metropolitan areas dropped 18.1 percent in April from a year earlier, following an 18.7 decrease in March, according to the S&P/Case-Shiller index. Prices are forecast to fall 41.7 percent from their peak, Deutsche Bank AG analysts led by Karen Weaver wrote in a June 15 report.Florida Drops Predicted“Affordability is no longer the driving issue in the housing market, and we believe prices still have a ways to fall in many areas before home prices reach their trough,” the Deutsche Bank analysts wrote.The 15 areas with the highest probability of lower prices in 2011 each have a 99 percent chance, PMI said. They include Miami, Fort Lauderdale, West Palm Beach, Orlando, Tampa and Jacksonville in Florida; Riverside, Los Angeles, Santa Ana, Sacramento and San Diego in California; Las Vegas; Phoenix; Providence, Rhode Island; and Detroit.

I’m willing to offer $0.13 per $1.00 face value to any takers.

Alarmist, to whom are the banks going to lend? The good credits don’t need it (if they need cash they have easy access to the bond market) and they don’t want to lend to the bad credits.The whole monetary policy thing is simply pushing on a string. All the money is simply going into Gov’t securities, funding the Obama gangs profligate spending.I haven’t watched the interview yet but according to the above post, the guy has got the China game figured out. It’s just one big mirage. The Shanghai market led things down, led things up and will agin lead things down to ne lows.The old game is over but the punters have yet to figure it out.

ha !

Others are saying the trend could continue until the end of 2012 when all that Alt A, prime, and ARM resets finally stop foreclosing. There can be no recovery at all if this is still going on.

Is that 2012 “The End of The World” predicted by the Mayan Calendar? Curious overlap.

Exactly right. No jobs, no demand, no investment, no need for loans…unless you are in trouble. Borrowing to speculate ain’t going to happen, even if the lenders would go along with it. China is a joke. Without demand from the U.S. and Europe, they go backwards 30 years pretty quick, and it will be ugly. All the talk about using Chinese and/or Russian currencies in world trade is simply dumb. I really do not know what will be used for international trade if the dollar heads to the crapper, but it won’t be rubles or the RMB. Maybe ‘Goldmans’?Independent Contractor

@ Alarmist – be careful with the condos. You may get stuck paying the dues for all the other owners if you want the property maintained. Condo owners are learning that failure to pay dues can get you foreclosed on, too.Independent Contractor

“After the Storm,” as your column is entitled, Dr. R.? Or just the beginning of the storm?As you yourself said, “one cannot rule out that by late 2010 or 2011, a perfect storm of oil above $100 a barrel, rising government-bond yields, and tax increases… may lead to a renewed growth slowdown, if not an outright double-dip recession…could clip the recovery’s wings and lead to a significant further downturn in asset prices and in the real economy.”IMO, this economic storm is just now building. I agree with David Rosenthal. Macroeconomic factors are creating massive layoffs, 9 million unemployed to date with 2.5 million of those working only part-time. There’s nothing in recovery to put them back to work.What’s the interpretation? This time it’s different—we’re in a credit-driven recession, a liquidity trap. Auto replacement units are at 12 million and we’re running about 9 million–effectively taking cars off the road. We’ve suffered Goldman Sachs desolation from high gas prices and deflating house values and we’re about to suffer more. Unemployment is leading the recession van, not lagging behind it. And by ALL accounts other than BLS and MSM, unemployment is considerably worse than their figures reflect–shorter work hours at an historic 33, full-time people moved to part-time work, workers unaccounted for who are too discouraged to look for jobs, replacement of America’s workforce by foreign workers at Third World wages, corporations downsizing in the face of a permanent tightening in credit markets…and unemployment benefits running out. I ask, whom are the banks going to cheat if they don’t have business? Their credit consumers are destroyed. After all, big banks and big business are co-dependent for their survival on credit, are they not?One of the questions the unemployed and those waiting to be unemployed are asking themselves is–if and when a semblance of recovery does kick in down this long, arduous road–will their global onshore employers hire new people just entering the workforce or crossing the border or rehire them? will they put those part-time workers back into full-time work? will it be at former salary? or clipped wages?America is heading into the headwinds of the biggest storm of economic destruction and corruption that she has ever faced, IMO, with the worst yet to come.And if Obama and his cabinet continue on their present course, they are going to create a Greater Depression than the Great Depression.

INFLATION OR DEFLATION, MAKE SURE YOU GET THIS ONE RIGHTEconomics / Deflation Jul 06, 2009 – 08:49 PM (sans charts)By: John_MauldinThere are those who sweat over every decision, worrying about how it will affect their lives and investments. Then there is the school of thought that we should focus on the big decisions. I am of the latter school.85% of investment returns are a result of asset class allocations and only 15% come from actually picking investment within the asset class. Getting the big picture right is critical. In this week’s Outside the Box we look at a very well written essay about the biggest of all question in front of us today. Do we face deflation or inflation?This OTB is by my good friends and business partners in London, Niels Jensen and his team at Absolute Return Partners. I have worked closely with Niels for years and have found him to be one of the more savvy observers of the markets I know. You can see more of his work at http://www.arpllp.com and contact them at info@arpllp.com.John Mauldin, EditorOutside the Box________________________________Make Sure You Get This One RightBy Niels C. Jensen”You can’t beat deflation in a credit-based system.” ~ Robert PrechterAs investors we are faced with the consequences of our decisions every single day; however, as my old mentor at Goldman Sachs frequently reminded me, in your life time, you won’t have to get more than a handful of key decisions correct – everything else is just noise. One of those defining moments came about in August 1979 when inflation was out of control and global stock markets were being punished. Paul Volcker was handed the keys to the executive office at the Fed. The rest is history.Now, fast forward to July 2009 and we (and that includes you, dear reader!) are faced with another one of those ‘make or break’ decisions which will effectively determine returns over the next many years. The question is a very simple one:Are we facing a deflationary spiral or will the monetary and fiscal stimulus ultimately create (hyper) inflation?Unfortunately, the answer is less straightforward. There is no question that, in a cash based economy, printing money (or ‘quantitative easing’ as it is named these days) is inflationary. But what actually happens when credit is destroyed at a faster rate than our central banks can print money?A Story within the Story”Following the collapse of the biggest credit bubble in history, there has been no shortage of finger pointing and the hedge fund industry, which has always had an uncanny ability to be at the wrong place at the wrong time, has yet again been at the centre of attention. And politicians, keen to divert attention away from themselves as the true culprits of the crisis through years of regulatory neglect, have been quick at picking up the baton. Admittedly, the hedge fund industry is guilty of many stupid things over the years, but blaming it for the credit crisis is beyond pathetic and the suggestion that increased regulation of the hedge fund industry is going to prevent future crises is outrageously naïve.”If you prohibit private investors from investing in hedge funds which on average use 1.5-2 times leverage but permit the same investors to invest in banks which use 25 times leverage and which are for all intents and purposes bankrupt, then you either don’t understand the world of finance or you don’t want to understand. Shame on those who fall for cheap tactics.”Let’s begin by setting the macro-economic frame for the discussion. I have been quite bearish for a while, suspecting that the growing optimism which has characterised the last few months would eventually fade again as reality began to sink in that this is no ordinary recession and that ‘less bad’ doesn’t necessarily translate into a quick recovery. I still believe there is a good chance of enjoying one, maybe two, positive quarters later this year or early next; however, a crisis of this magnitude doesn’t suddenly fade into obscurity, just because the economy no longer shrinks at an annual rate of 6-8%.Going forward, not only will economic growth disappoint, but the economic cycles will become more volatile again (see chart 1) with several boom/bust cycles packed into the next couple of decades. This is a natural consequence of the Anglo-Saxon consumer-driven growth model having been bankrupted. Growing consumer spending over the past 30 years led to rapidly expanding service and financial sectors both of which will now contract for years to come as overcapacity forces players to downsize.This will again lead to higher corporate earnings volatility which will almost certainly drive P/E ratios lower, making conditions even trickier for equity investors. At the bottom of every major bear market in the last 200 years, P/E ratios have been below 10. As you can see from chart 2 overleaf, few countries are there yet. The next decade is therefore not likely to be a ‘buy and hold’ market for equity investors. The combination of low economic growth and pressure on valuations will create severe headwinds. The most likely way to make money in equities will be through more active trading.So now, two years into this crisis, where do we stand and where do we go from here? History offers limited guidance, as we have never experienced the bursting of a bubble of this magnitude before. The closest thing is the collapse of the Japanese credit bubble around 1990. As the Japanese have since learned, recovering from a deflated credit bubble is a long and very painful affair.Governments and central banks on both sides of the Atlantic are pursuing a strategy of buying time, hoping that a recovery in economic conditions will allow our banking industry to re-build its capital base. The Japanese pursued a similar strategy back in the early 1990s. It failed miserably and set the country back many years in its recovery effort. Ironically, the Japanese approach was almost universally condemned as hopelessly inadequate. It is funny how you always know better how to fix other people’s problems than your own. A little bit like raising children, I suppose.Another lesson learned from Japan is that once you get caught up in a deflationary spiral, it is exceedingly hard to escape from its grip. The Japanese authorities have used every trick in the book to reflate the economy over the past two decades. The results have been poor to say the least: Interest rates near zero (failed), quantitative easing (failed), public spending (failed), numerous attempts to drive down the value of the yen (failed); the list is long and makes for painful reading.We are effectively caught in a liquidity trap. The Bank of England, the European Central Bank and the Federal Reserve have all flooded their banking system with enormous amounts of liquidity in recent months but what has happened? Instead of providing liquidity to private and corporate borrowers as the central banks would like to see, banks have taken the opportunity to repair their balance sheets. For quantitative easing to be inflationary it requires that the liquidity provided to the market by the central bank is put to work, i.e. lenders must lend and borrowers must borrow. If one or the other is not playing along, then inflation will not happen.This is illustrated in chart 3 which measures the growth in the US monetary base less the growth in M2. As you can see, the broader measure of money supply (M2) cannot keep up with the growth in the liquidity provided by the Fed. In Europe the situation is broadly similar.There is another way of assessing the inflationary risk. If one compares the total amount of credit destruction so far (about $14 trillion in the US alone) to the amount spent by the Treasury and the Fed on monetization and fiscal stimulus ($2 trillion), it is obvious that there is still a sizeable gap between the capital lost and the new capital provided.If we instead move our attention to the real economy, a similar picture emerges. One of the best leading indicators of inflation is the so-called output gap, which measures how much actual GDP is running below potential GDP (assuming full capacity utilisation). It is highly unlikely for inflation to accelerate during a period where the output gap is as high as it currently is (see chart 4). Theoretically, if you believe in a V-shaped recession, the output gap can be reduced significantly over a relatively short period of time, but that is not our central forecast for the next few years.I can already hear some of you asking the perfectly valid question: How can you possibly suggest that deflation will prevail when commodity prices are likely to rise further as a result of seemingly endless demand from emerging economies? Won’t rising energy prices ensure a healthy dose of inflation, effectively protecting us from the evils of the deflationary spiral (see chart 5)?Good question – counterintuitive answer:Contrary to common belief, rising commodity prices can in fact be deflationary so long as demand for such commodities is relatively inelastic, which is usually the case for basic necessities such as heating oil, petrol, food, etc. The logic is the following: As commodity prices rise, money earmarked for other items goes towards meeting the higher commodity price and consumers are essentially forced to re-allocate their spending budget. This causes falling demand for discretionary items and can in extreme cases lead to deflation. We only have to go back to 2008 for the latest example of a commodity price induced deflationary cycle.A price increase on a price inelastic commodity is effectively a tax hike. The only difference is that, in the case of the 2008 spike in energy prices, the money didn’t go towards plugging holes in the public finances but was instead spent on English football clubs (well, not all of it, but I am sure you get the point) which have become the latest ‘must have’ amongst the super-rich in the Middle East.For all those reasons, I am becoming increasingly convinced that the ultimate outcome of this crisis will turn out to be deflation – not inflation. Inflation may eventually become a problem, but that is something to worry about several years from now. The Japanese have pursued an aggressive monetary and fiscal policy for almost 20 years now, and they are still nowhere.So why are interest rates creeping up at the long end? Part of it is due to the sheer supply of government debt scheduled for the next few years which spooks many investors (including us). And the fact that the rising supply is accompanied by deteriorating credit quality is a factor as well. But countries such as Australia and Canada, which only suffer modest fiscal deficits, have experienced rising rates as well, so it cannot be the only explanation.Maybe the answer is to be found in the safe haven argument. When much of the world was staring into the abyss back in Q4 last year, government bonds were considered one of the few safe assets around and that drove down yields. Now, with the appetite for risk on the increase again, money is flowing out of government bonds and into riskier assets.Perhaps there are more inflationists out there than I thought. Several high profile investors have been quite vocal recently about the inevitability of inflation. Such statements made in public by some of the industry’s leading lights remind me of one of the oldest tricks in the book which I was introduced to many moons ago when I was still young and wet behind the ears. ‘Get long and get loud’ it is called; it is widely practised and only marginally immoral. Nevertheless, when famous investors make such statements, it affects markets.The point I really want to make is that the inflation v. deflation story is the single biggest investment story right now and being on the right side of that trade will effectively secure your investment returns for years to come. If I am wrong and inflation spikes, you want to load your portfolio with index linked government bonds (also known as TIPS for our American readers), gold and other commodities, commodity related stocks as well as property.If deflation prevails, all you have to do is to look towards Japan and see what has done well over the past 20 years. Not much! You cannot even assume that bonds will do well. Recessions are bullish for long dated government bonds but a collapse of the entire credit system is not. The reason is simple – with the bursting of the credit bubble comes drastic monetary and fiscal action. Central banks print money and governments spend money as if there is no tomorrow, and all bets are off. Equities will do relatively poorly as will property prices. But equities will not go down in a straight line. The market will offer plenty of trading opportunities which must be taken advantage of, if you want to secure a decent return.All in all, deflation is ugly and not conducive to attractive investment returns. It is also not what governments want and need right now. With a mountain of debt hitting the streets of Europe and America over the next few years, as the cost of fixing the credit and banking crisis is financed, one can make a strong case for rising inflation actually being the favoured outcome if you look at it from the government’s point of view. The problem, as the Japanese can attest to, is that deflation is excruciatingly difficult to get rid of, once it has become entrenched. I am in no doubt which of the two evils I would prefer, but we may not have the luxury of choosing our own destiny.http://www.marketoracle.biz/Article11844.html

@ Guest.I’ve been talking about a deflationary spiral for some time now.Inflation is a myth at this point as the massive credit that has been added to the system is just trying to fill the void left by the deflationary explosion! The crater is huge! …and that crater is made to seem even larger as inflation was understated for so long, as fictitious wealth (monopoly money) gave every mom and pop, and every corporate giant the false sense of wealth on the build up.We should hope for inflation at the moment!!! …but that won’t happen as house prices fall, jobs are lost, wages are stagnant, and principal on debt remains as highb as it is.I’ve long called China “ChEnron”, and I feel the assessment of Tett could prove to be fairly accurate. (Unfortunately, I don’t know enough about China to form educated guesses. From the validity/accuracy of their reporting, to the real life application of their reporting. i.e Wages versus cost of living, Housing pre/post bubble, etc…)Like I said above, inflation is a myth!!! …because if we are sucked deep enough into a deflationary spiral, it would be the equivalent of a financial/economic black hole! …and there would be no economy to re-inflate. There would be an economy that would have to be re-created.All the best,Miss America

It seems to me that no one is really paying much attention to what is going on with the state budgets around the country. If the states cannot pay their bills- they are essentially bankrupt. I have read some articles that say as many as 46 states are near bankruptcy. The media is virtually silent on this issue with the California IOU exception, and even that is toned down. This is a huge indicator of what is coming down the pike IMO. What good is an IOU if the state has no money- it is fiat currency with no value- of course the banks don’t want to accept them- they would be stupid to do so. So what will the government do? will they bail out California? What about New York, Michigan, etc… it is an impossible situation whose only way out is down into the abyss of economic failure. Hopefully to emerge within a new paradigm, a new way of doing business that will have learned from past mistakes. Sadly it seems we are doomed by our greed to repeat this scenario ad infinitum. Attempts will be made to make it appear as though some good has been done as though by suffering we emerge stronger and better but eventually that skin is shed to reveal the vileness and corruptibility of human nature.

You hit the nail on the head in your last paragraph, highlighting “the vileness and coruptibility of human nature”. That is the reality of course, with the exception of the contributors to this fine blog.After all, we are just animals and part of nature, despite all the protestations of my fellow bloggers.

tlt is up 1.5% today.Not a long term hold though.

I am and have posted quite extensivly on State revenue shortfalls occuring and bugget deficits rising. one has to remember they seem only capable of fighting one disaster at a time. I think they are praying that the State and local govts will solve all thier problems own there own.Just state budgets have a currently close to a 200 Billion shortfall. next year’s is estimated to be 350-400 Billion. and that is not including every city and county budget, who also have the same problems. so the entire mess could be approaching 700B-1 trillion over the next year. and the ripple effect on just this potential 1 trillion dollar problem is far worse then the trillions poured into the banks. this state and local problem hits home very quickly to average joe american in the form of services in each state, county, city…What none of the states, counties, or local citites have done is factor in the correct rate of falling revenue reciepts in the form of real estate taxes, sales taxes income taxes. so they are 18 months behind the curve in dealing with th problem because they are only now starting to make the cuts.Fire protection, ambulance protection, medical services, food services, police services, parks services will be slashed and slashed fast. State and all forms of taxes and fees will skyrocket…

Bend over Average Joe American in Podunk Alaska. How do you like it now.

There is still so much DENIAL out there that the PARTY IS OVER. The almost $14 Trillion consumer debt has barely begun to be dealt with @ 0.1 $ Trillion paid off since this meltdown began.There are so many leaks in the dike now and more to show themselves in the time ahead as further “cracks” appear. The stupid Fed & Treasury policies – thinking that they could tame this monster BEAR. What a joke. And now the debt hole has been dug soooo deep because all wanted to look “expert.” They have “bet the farm” and now there is nowhere to hide. The only ones to benefit were the shareholders and bond holders in the Big Banks. This is DEMOCRACY?More and more reason to be a Voltaire Economist – as I mentioned at the end of the previous thread.

This is Goldman and the banks and thier friends like Bernanke, Giethner, Buffet, Summers, et al, taking advantage of an inexperianced president and the citizins of the US. Democracy lives beacuse I suppsoe its all being done legally still…Jsut because congress, the Prez, biden and all of us are “stupid” doesnt mean that the PTB shouldnt take advantage of that, in a legal way…

From Mish’s Blog: The best advice yet.The administration needs to fire all its experts and start reading a few more blogs.Mike “Mish” Shedlock

A snowball gathering steam? Isn’t that an oxymoron?:)

All the states need to do is say: “We owe the money to Goldman Sachs”Then, all debts and shortfalls would be covered.Now all we have to do is find a politician that can deliver that lie… I’m sure it won’t be hard to find a willing politician. …but it might actually be hard to locate them while they are out of country.Miss America

PS as for the Oxymoron- yeah gathering steam = momentum, but I’m sure everyone guessed that- hey maybe global warming will melt the snow ball and save the world, keep up those carbon emissions.

Man, Morbid, I am with you. HOAs are very difficult clients for a lawyer to represent for that very reason. I live in an HOA, too, but the only reason it has been halfway tolerable is because it’s about 30 years old, and the governing documents included a provision that delimited the ability of the HOA to increase annual assessments by more than a fixed percentage, so there’s not a lot of money left over for mischief-making by overly zealous residents with too much time on their hands! That’s not so say we won’t incur a special assessment come the new fiscal year in January, because a lot of folks in our community have had their homes foreclosed or simply became too financially pinched to pay the assessments.SWK

Or it will drown us all and put us out of our misery.

Gold protects from either of these outcomes, vs holding worthless paper.

Well said Morbid.Notwithstanding the propaganda spouted,Canada has 14 health care systems(Each State has a budget,plus the Federal Govt.)The 14 Agencies got a committee together and negotiated a GROUP PRICE from the drug companies .The Canadian population is basically the same as California.There is no technical reason why Americans could not enjoy the same Public /Private Partnership arrangement Canada,s States(Provinces)have with each State Medical Association.The State agrees to have the Doctors continue to run their Private Practices,providing they agree to accept the State Health Card Rates for services rendered.No big deal…The typical State Budget ,this year works out to $520.00 per month per each adult and includes the children in the package.Any person who is a bonifide Canadian Citizen or is legally in the country can obtain health care.The other big difference is the money is not collected off paycheques,rather is collected through state taxes and a 21% contribution by the Fed.Govt,providing certain minimum standards are met.What I cannot understand is how come the U S Private System costs 30% more per person than the partial socialist system used by Canada????

hmmm…looks like the U.S. foodstamps program has a cool new name, “Supplemental Nutrition Assistance Program”…or is that an old name(?)…anyway there are 33.8 million people on it according to this article:http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aDhdHJrK42P033.8 million is quite a lot, considering that you would either have to have a VERY low income (such as below $10K/year) to get with the program. Of course many might obfuscate their income…

People without JOBS are going to be one BIG Voice in the 2010 and 2012 elections…. could be over 20 million totally unemployed and another 20 million underemployed….40 million total. Suck on those numbers all you Pols…Seems the pundits and pols and some economists have started dripping unemployment the could rise as high as 13-15% now and thats the U3 number they tell everone about and report on. No conincidence this chatter has been leaking the past week. Even Secty of Labor Solis would not say today when asked that 15% will never happen. She basically said thier models cant be that accurate and she is the Secty of labor.So Ask, does anyone in authority know anything and do they have any models and projections that work or they can count on, other than saying I’m sorry all the time and we understimated? its like Roger Clemens when he said Any Petite must have misremembered…NO JOBS!

But what will their voices say, MM? What real options do the voters have? So one brand of politician has failed them, will the other brand do them any good? Probably not.Governments provide nothing. They just play their Robin Hood games in an effort to buy votes and gain election/re-election. Clearly the system is broken and I don’t have any real ideas to fix it. What I do know is that Obama’s team are making it worse, pouring your tax dollars, your childrens’ tax dollars and your grandchildrens’ tax dollars down a very black hole

one can only hope that there is total flush out of both parties… not 10-15% of them losing but more like 70-80%. and maybe we’ll get some no names running… it does kind of suck to have the freedom to vote, but then be limted to choices consisting of only those who can pay for an election… so how much freedon is there? out choices for the most part everywhere and for 20-30 years have sucked.1. Term limts – critical2. spending limits- critical3. donation limts – critical4. the process has to allow for Joe American to run. Federal matching funds if neccessary..5. any TV ad’s and print media ad’s should be mandatory they only be free to each/both/ any cadidate running, other wise go stand in front safeway, church, the Giants game and shake hands. go door to door or get your unpaid supporters to go door to door.How were people elected form 1776 to 1930 when there was no tv?If nothing is done, with all the damage and mistrust that is being learned now and has coccured the past 20-30 years, this countrys future will conssist with a very angry and pissed off 300 million average joes. the speed at which everyone is learnig just how bad things are, how much people have been screwed, how corrupt things are, is at a pace never seen before and the internet and elctronic pipelines are facilitating the trasfer of knowlege. They cannot hide anymore from what they wrtie, waht they email , how they act, how they account, how they count the money… Cameras, bloggers, are everyhwere sending the messages.

I agree with your sentiments but unfortunately, as you pointed out a few days ago, maybe only 10% of the populace is doing what you and the others on this site are doing. The other 270 million are much too busy watching the Simpsons and other mind numbing programs. Tis a sad world.

“Geithner Lies Again as PPIP Prepares for Launch”http://www.safehaven.com/article-13867.htmGeithner with his master Bernanke and Obama all lied to American people. Wake up American people, time to lock up these criminals and throw away the key.

Most of the voters like Bart Simpson,”I didn’t do it!”(they elected him president last November)

Geithner Plan IIhttp://www.youtube.com/watch?v=n-arbfLTCtIObama, Geithner, and Bernanke’s trying to dupe American taxpayer into Trillion+ dollars of LOSS in PPIP. Mark my word, these crooks will not stop there, they will throw more Ponzi Scheme to dupe American taxpayer into more Trillion+ dollars of LOSS. Obama, what a dissapointment.

If deflation is the order of the day, why not just sit in cash? Why is it necessary to do short term trading?

Not an oxymoron but a mixed metaphor.

The states should be a good place to cut through the statistical B.S. After all, what numbers do they use when they make their budget “projections”?Another point is that states should be a good place to figure how much the economy is going to hell. The decline in sales tax revenue is probably a great number to understand consumer demand. Nobody wields these numbers, but they are probably far more insightful than rosy revenue projections.

Because US persons actually have access to healthcare at or near the time they need it (if they can pay for it), e.g. cancer treated when discovered rather than having to wait for the cancer to metastasize before it is then declared worthy of urgent care.

Oops … I used the total budget number, so that’s not the deficit. Sentiment remains the same … it’s a lot per resident.

Well, that’s right, isn’t it? Cash increases in value in a deflationary environment, as do debts, so you want to be cash-rich and debt-free. This is quite the opposite of a highly inflationary environment, which sticks savers and creditors with ever-lower values for the dollars they have and will receive in the future (although wage-earners are somewhat less affected because wages historically rise, albeit with a lag, behind price increases).SWK

Much worse

Price of my favorite local cheeseburger just went up 8%; wrote last week that batteries went up 17%, and several other things went up 7% to 10% in the past couple of weeks. I still have purchasing power, but it has been eroding lately.No Inflation ??? Maybe in wages, but not in prices. Let’s hope there’s not a lot of inflation out there, because rising prices means lower demand and NO JOBS.

sorry that was Altman Roger not ackerman

http://www.youtube.com/watch?v=F5axlwCBXC8&NR=1.in spite of our selves.

Senate Leadership Blocks Federal Reserve AuditBy tmartin • July 7, 2009Senator Jim DeMint (R-SC) was blocked by Senate Democrat Leadership from having a vote on his amendment to audit the Federal Reserve, based on a bill authored by Congressman Ron Paul (R-Texas) in the House, H.R. 1207, and Senator Bernie Sanders (D-Vermont) in the Senate, S. 604.http://www.ronpaul.com/2009-07-07/senate-leadership-blocks-federal-reserve-audit/

Obama’s Support Eroding EverywhereYesterday we mentioned that poll out of Ohio showing Obama’s support collapsing in the uber-important swing state.Turns out that’s not a one-state phenomenon. Both Gallup and Rasmussen have new polls out showing big slippage in support for the administrationEverything seems to have changed since that last jobs report, since it viciously undercut the green shoots claims. Here’s Rasmussen:The Rasmussen Reports daily Presidential Tracking Poll for Wednesday shows that 32% of the nation’s voters now Strongly Approve of the way that Barack Obama is performing his role as President. Thirty-seven percent (37%) Strongly Disapprove giving Obama a Presidential Approval Index rating of –5.http://www.businessinsider.com/obamas-support-eroding-everywhere-2009-7

The truth is the Congress of the United States refuses to take responsibility on the use of the currency. This simply means that the people’s representatives in the government essentially have no real power to set policy; the secret trillions created and spent by the Fed around the world, of course, represent the actual power of the United States.No policies adopted by Congress would be allowed unless the privately controlled Central Bank agrees. Bottom line: Congress does not control the real policies of the United States; representative government has ceased to exist.

Shipping flashes early warning signals againBy Ambrose Evans-Pritchard Business Last updated: July 8th, 2009Port statistics are revealing. They were a leading indicator before the production collapse in the Japan, Europe, and the US over the winter, and they may be telling us something again.Amrita Sen at Barclays Capital says the number of Baltic Dry ships waiting to berth — mostly in China and Australia — has begun to fall after peaking at 154 in mid-June.The Capesize Iron Ore Port Congestion Index (a new one for me, I must confess) is replicating the pattern seen a year ago just before the commodity boom tipped over. “The anecdotal evidence we are hearing is that vessel queues have been falling. There are reports of cancelled tonnage from China pointing to a slowdown in Chinese buying of coal and iron ore.“We are definitely expecting a correction. People have been building stocks of iron ore too quickly in anticipation of the stimulus package in China,” she said.The Baltic Dry Index measuring freight rates jumped 450pc in the first half of the year on the China rebound, but has begun to fall back over the last two weeks. (Sen doubts freight rates will recover much since 1000 new ships are hitting the market this year and again next year, compared to 300 in normal years. There is obviously a horrendous shipping glut).Over at Naked Capitalism they are reporting that international port traffic for containers (ie finished goods) is as dire as ever. The rates for 40-foot container from Asia and America’s West have actually fallen this year from $1,400 to $920.“There has never been a decline like this before,” said Neil Drecker from the Drewry Report. “The container industry is looking at a $20-billion black hole of losses. We can expect a lot of casualties.”As readers can guess, I remain extremely sceptical of this commodity rally (although it was to be expected as part of the inventory restocking effect). It is not underpinned by real global demand.It is a anti-inflation play by funds betting that quantitative easing by the world’s central banks will lead to systemic currency debasement. That may ultimately happen, but the more immediate threat is the abrupt slowdown/contraction of the broad money supply (M3, adjusted M4) and the collapse in the velocity of money, as well a post-War low in capacity use (68pc in the US), and a massive global “output gap”.All the deeper signs suggest to me that action by the Fed, Bank of Japan, Bank of England, and the European Central Bank is still not enough to offset the deflation shock. Though I recognize that this is a deeply unpopular view these days in the blogosphere.Deutsche Bank has told clients to tread carefully. It says the global output gap is minus 6pc, and it is this gap — not the level of economic growth as such — that drives oil prices over the long run. We have in any case seen a $10 dive in oil prices already as the doubts creep in on the global recover.Note that Deutsche Bank’s China team says the Chinese economy is “close to the cusp of the second down leg of a forecast `W’ on the back of tightening lending and slowing stimulus spending,” according to the bank’s latest report `Still Wary of Global Cyclicals’.We are all longing to be bulls again, but we (Mankind, especially the West) have a long hard slog ahead to work off our debt depravities.http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100000188/shipping-flashes-early-warning-signals-again/

anyone get the feeling this an exact replay of 2008. Baltic dry index started dropping last summer too. September/october will be twice as bad as sept/oct last year. this is getting scary. who gets shut first? citi or BOA?So Goldman will get to really cherry pick now- do they want Citi or BOA?

Recent reports suggest that financial industry lobbying in Washington, at $104.7 million for the first three months of 2009, is 8% down on last year. But that is to be expected – why should Wall Street continue paying top dollar for a wholly owned subsidiary?Alexander Cockburn, Counterpunch

Whatever Goldman wants, Goldman gets…

Missed it, but thanks for the post. I’ll try to catch the repeat…SWK

There is a difference between not having the power and choosing, for whatever reason, not to exercise it.SWK

And who is it that sits behind the King and tells him and his minions what to do?

with no way to relieve yourself?It appears that Stim1 was just a wet dream.Well maybe it made things less bad for a short while..At least my road is getting a new top coat.

In your view, eh? What in the hell are you talking about?, The first stimulus was nothing more than one massive bank robbery,..

I think it is pretty clear this administration is just more of the same as the last, meet the new boss, same as the old boss. Wake up!

Day One of the L’Aquila G8 Summit: the press conferencehttp://www.g8italia2009.it/G8/G8-G8_Layout_locale-1199882116809_Home.htm”The leaders had also discussed the economic crisis with a view to “sending out a message of confidence,” Mr. Berlusconi explained, voicing the conviction that “the worst of the crisis is behind us now.” “There are signs of improvement everywhere,” he added, so it was “important to keep up support for the banking system, manufacturing firms and the people who have lost their jobs.” The G8 had made strides ahead towards the drafting of a joint system of rules for the global economy, a process that would be continued by the Pittsburgh G20.”That’s the answer- just send out those golden rays of confidence and all we be as it should be- “the worst is behind us” “Improvement is everywhere” – do they live on the same planet?????

those democrats want enjoy all the wet dream about TAX every night. unbelievable…

It’s worthwhile to re-visit a few key charts published by Chris Puplava a few months ago. Here’s the link:Charts on US Capacity Utilization and Manufacturing EmploymentNote specifically the first three charts – and especially Chart #3 in that Puplava article.It would be very interesting if Mr Puplava was to update these charts to include the mid-2009 figures.The USA is in a serious longterm downtrend in regards to our industrial capacity utilization, and our manufacturing employment. Bottom line; Our industrial base is being gutted. The idea that we can somehow bypass these trends in industry by becoming a “financial powerhouse” (complete with overleveraged banks on Wall St that are bankrupt) has now blown up in our face. Nothing that the Fed or the Treasury is doing is going to reverse the downtrends in these charts. Stimulus packages (with printed money) do not turn this around.We are looking at permanent levels of (much higher) unemployment in the USA, and major cutbacks in all types of Gov’t sponsored services (esp. those services provided by the states). It is impossible to increase consumer debt under these circumstances, and therefore impossible to generate a recovery based on higher consumer spending.There is no “easy” answer … and our leaders don’t want to look for hard ones. London Banker said it nicely a long time ago – there are no adults left in charge in Washington DC.PeteCA

The only good thing about this ‘recession’ is that you can put it down for four weeks and when you come back…nothing has changed!

@ w,”…when you come back…nothing has changed!”this reminds me of an analogy made, as i heard it thru ganga ji,saying that life as experienced by the self in the conscious mind is like thegame of hide and seek in that the self loves to hide and suffers thehiding for the glory of being found.now much of the world is seeking value. combing through the productsavailable, mostly of paper or contractual, looking for protection, shelterfrom the storm, as it were/is. where is the value? relentlessly hidingfor that glorious moment when it will be found. i say it will be found.but excruciatingly slowly and in a flash. after all, it was never hiddenor lost, just unseen, like looking for your glasses that you happen tobe wearing. something like that..for grins.http://www.here-now-tv.com/index.php?id=127.illusions are perceptual and socially functional emergents that can only survive to the extent that they correlate or conform to the extantsupportive and underlying energetic ecology ( reality ). when this conformityor correlation is severed the illusion disappears immediately.there is, of course, a variable shattering incidence occurrence and rate,or as has been said, y.m.w.v…so the question is what remains when the illusions have been vanquished andreally, “nothing has changed” ? i agree. “The good thing”.

NEW THREAD

There was an injection of capital into the banks (the bailout), and there was a separate stimulus package that was targeted to many diverse things.SWK

I’m awake. I disagree with you, that’s all.SWK

… Not according to Hendry in reference to the interview that started discussion in this thread.The gentlemen is very dramatic in the interview segments and at times contradicts what he has previously stated.However, he seemed quite clear in the (second segment) that history would laud Bernanke & Co. for their brilliance in deriving and implementing the quantative easing policy, and although Hendry himself thinks the FED has not provided enough, he believes that Bernanke et al have been restrained towards that end by political forces.Does anyone else support this position ??

A solution? You mean like TARP or PPiP ??

Well, actually “Eskimo” is an archaic term no longer used (at least in Canada) to describe Inuit people, and is actually considered a pejorative by some of the northerly aboriginal communities. Your blood-lustful arguments for the involuntary euthanasia of the meek are similarly worn out. Perhaps the real evolution is towards compassion and care for those most vulnerable. Kill the unproductive elderly, the infirm & mentally deficient so we can save money? How about special needs children? Just a money sucking impediment to my financial happiness? If one cannot learn compassion and show it to those most vulnerable we cannot expect to receive it in return. Mercy & forbearance are virtues and a world without them is not one worth living in. You seem to give money an implicit value, but human life none past it’s economically viable tenure. Your argument is, if a human cannot produce wealth for the community (which these days means the banks & big business), and if it starts to weigh negatively on the ledger regardless of past contribution, it needs to be snuffed. How about parsing it like that? Vulgar! Vulgar! Vulgar! It’s the dark side of your Nature and ones who think as you do that is to be feared. We are not stone age hunter-gatherers competing for scarce resources, we are greedy maladjusted malcontents who would rather take the easy way out an annihilate a defenseless group of people than work together to take care of one another. Why don’t you try volunteering in a care home for a while and see how many of those people you’d want to cut off their expensive meds.

As to the link – in which frame ar you referring as to white vs blue? The Latest Image or the Pressure Image? Over what period of months/years have you been observing this “blue” trend?

Your little game already is denudate: You are allways the LAST, the last LOOSER – it is why you are so moralist! Please, be competent a single time, be A FIRST one single time, and then you will can be a moralist, moralist as winner, not as looser.