First, I think, but perhaps not.

Obama to unveil $12 billion community college planhttp://news.yahoo.com/s/nm/20090714/pl_nm/us_usa_education_obamaeconomy is in toilet, Obama is doing side tasks that just spend and do nothing to the economy? do Obama and Pelosi have clue what is going on and what is needed to bring the economy back to track? These clowns are unbelievable…

Fed Independence or Fed Secrecy?by Ron Paul (U.S. House of Representatives, Texas)Last week I was very pleased that hearings were held on the independence of the Federal Reserve System. My bill HR 1207, known as the Federal Reserve Transparency Act, was discussed at length, as well as the general question of whether or not the Federal Reserve should continue to operate independently.The public is demanding transparency in government like never before. A majority of the House has cosponsored HR 1207. Yet, Senator Jim DeMint’s heroic efforts to attach it to another piece of legislation elicited intense opposition by the Senate leadership.The hearings on Capitol Hill provided us with a great deal of information about the types of arguments that will be levied against meaningful transparency and how the secretive central bankers will defend the status quo that is so beneficial to them.Claims are made that auditing the Fed would compromise its independence. However, by independence, they really mean secrecy. The Fed clearly cherishes its vast power to create and spend trillions of dollars, diluting the value of every other dollar in circulation, making deals with other central banks, and bailing out cronies, all to the detriment of the taxpayer, and to the enrichment of themselves. I am happy to challenge this type of “independence.”They claim the Fed is endowed with special intellectual abilities with which to control the market and that central bankers magically know what the market needs. We should just trust them. This is patently ridiculous. The market is a complex and intricate thing. No one knows what the market needs other than the market itself. It sends signals, such as prices, that should be reacted to and respected, not thwarted and controlled. Bankers are not all-knowing and cannot ignore the rules of supply and demand. They might act as if they are, but their manipulation of the market just ends up throwing it wildly off balance, which gives us the boom and bust cycles.They claim the Fed must remain apolitical. No organization is apolitical that relies on the President to appoint the Chairman. In fact, it is subject to the worst sort of politics – power to create trillions of dollars and affect the value of every dollar in the country without the accountability of direct elections or meaningful oversight! The Fed typically enacts monetary policy that is favorable to particular administrations close to elections, to the detriment of long-term considerations.They do this partly because of the political appointee process for the Chairmanship.The only accountability the Federal Reserve has is ultimately to Congress, which granted its charter and can revoke it at any time. It is Congress’s constitutional duty to protect the value of the money, and they have abdicated this responsibility for far too long. This was the issue that got me involved in politics 35 years ago. It is very encouraging to finally see the issue getting some needed exposure and traction. It is regrettable that it took a crisis of this magnitude to get a serious debate on this issue.http://www.lewrockwell.com/paul/paul554.html

Dr. Roubini, please keep telling the truth… there are so many liars out there in the finanacial advisor community, press and government, that we need you!! Can you please discuss the $10 billion that Goldman Sucks received via the AIG bailout — the press makes it seem like GS paid the government back, but they neglect to mention the money funneled (laundered) to GS via AIG…

Second major article by DR. Roubini on NO JOBS in past 2 weeks.Sobering…and all true… IMO Unemployment will continue to rise for at least the next 18 months. Small and Medium size business’s are going under by an alarming rate. they account for approx 70% of the US job market. Couple that with increased outsourcing of jobs overseas and its a Disaster.Obama: Unemployment likely to keep ticking up11 minutes agoWASHINGTON (AP) — President Barack Obama says unemployment is likely to tick up for several months as the economy recovers from its deepest downturn in decades.The president said Tuesday that renewed employment typically lags behind other signs of improvement as a swooning economy turns around.More than 2 million jobs have been lost since Congress passed Obama’s $787 billion economic stimulus package. The unemployment rate stands at 9.5 percent, the highest in 26 years.Obama said the single biggest challenge for the U.S. and other nations is the creation of enough jobs that pay good wages.10 Reasons Employment Is Worse Than You ThinkMort Zuckerman (of all people) has an op-ed in today’s WSJ explaining why the jobs situation, which is quite clearly horrific, is even worse than you think.Here are his points, condensed185,000 workers in the June number were the product of statistical sampling, but could not be verified by the government.Companies are asking employees to take unpaid leave.1.4 million unemployed workers weren’t counted because they’re not searching for work.Part-time employment has doubled to 9 million.The work week is 48 minutes shorter than when the recession began.The number of long-term unemployed (4.4 million) is at an all-time high.There were no wage gains in June.The goods-producing sector lost over 223,000 jobs just in June.When business picks up, businesses will just add hours to existing workers, rather than create new jobs.Old business lines are being eliminated entirely, not shrunk down, decreasing the odds that the unemployed will be able to find work.http://www.businessinsider.com/10-reasons-employment-is-worse-than-you-think-2009-7

Beyond amazing-in the midst of the worst recession and financial crisis since the GD, where more people have lost their job, home, home equity, credit, retirement plans, life savings, etc, who comes out with record profits after receiving guidance from Hank Paulson, bailouts from our govt and over 10 billion from AIG? The answer of course is GOLDMAN SACHS! If this doesn’t clearly highlight a corrupt, unjust system that requires greater transparency and regulation, then nothing does!

Do you remember Mother of God’s husband? His company has informed its workers that a bunch of them will be out of their jobs come September, but not before they train their designated replacements; workers from 2 cities in India.Game over for us. I have to go phone the bankruptcy lawyer now.Even after repeated episodes of job loss through zero fault of our own, aka forced unemployment, we worked harder and harder, holding onto the edge of the precipice for 2 decades, doing without so much – including healthcare.We done our best when we was let, but I don’t know how we will eat or where we will sleep in the future.I wish I could have had professional dental care one last time in my life. I remember proper dental care from the distant past…

When you have a “savior” complex you have to “save.” You just can’t help yourself.So, from “hole to hole” we go in the ever fast crumbling dike. Plugging up like this anything that causes pain. We have leaders who are acting like children playing a game of “let’s make believe” in the sandbox – as they twaddle with the flimsy levers of power for their brief stint on the world stage. Get ready to pay a very steep price.

The magic of price! Price establishes value—what, how much, where, when and who. No man, no central planner can do that. Price moves and creates product…because people establish the value, and, thus, the supply. This is the mechanism–driven step by step by market and based on private property–that the central bank, the Fed, takes away. On purpose. The central bankers don’t intend to support the free market. They intend to subvert it. There’s no money in that for its cronies.J.D. Rockefeller Sr. hated competition; he hated the idea that he would have to compete —it would be much easier just to push the competition out—that way he could dictate his own terms. It’s the Goldman Sachs’ philosophy, corner and control, by hook or by crook. They can’t allow competition. If so, by now, the big banks would be divided up and there would be competitive real growth in the financial sector rather than bailed out growth.Price determines the value of contract. In other words, no one knows what something is worth until a seller and a buyer agree. The seller and the buyer create the price and the value. Having the central bank control the markets negates this important ingredient. It’s like Rockefeller Sr. controlling the extraction of the petroleum, the refining of the petroleum into gasoline and the monopoly price at the pump. There is no agreed upon price by supply and demand. Standard Oil grew bigger and bigger, small businesses were eliminated and innovation and economic growth suffered. If America had had free competition in the beginning, who can now imagine how what kind of energy efficiency and transportation efficiency the world would have.Distortion of market pricing by thwarting the people’s desire or ability to pay, creates want, unemployment, production failure, innovation stagnation and, eventually, economic collapse.As Martin Hutchinson said in “At What Point Does the Economy Stop Working?” to see the economic effect of non-market pricing “we should look at the other extreme, the former Soviet bloc of economies, in which all prices were set by the state. It has since been remarked that the Soviet economic system only lasted as long as it did because the Western economies existed alongside it, so state price-setters had some idea of what prices should be in a market economy. Without a free market system to copy, their task would have been much more difficult, particularly for new goods such as computers…”To minimize, rather than maximize, the role of the price mechanism in America, says Hutchinson, “if not corrected, will impose huge long-term costs on U.S. living standards.”http://www.prudentbear.com/index.php/thebearslairview?art_id=10246

PROTECTIONISM IS NOT A FOUR LETTER WORDIf it were then all these countries are committing horrifying sins against blessed globalism:Japan: refuses to buy American/European pig iron to make cars, even though its cheaper to make body panels than using scrap metal.China: keeps its own currency artificially low to keep us buying everything from their country.Europe: built up a commercial Airbus EAD sales to put Boeing out of business with mass government subsidies. Same thing with their auto manufacturing.OPEC Countries: meets every so often to fiddle with supplies/prices.etc, etc, etc…..I think America is the only consumer country mostly playing by the rules and its destroying our economy with debt and horrifying longterm unemployment [IMO it ain't going to go away in a few months either, try many years].

IMO We hold all the cards… we created our own mess. sure the other countries meddle as they try to survive the bad descisons we make.I think we are the ones dragging the rest of the world. the top 5 countries after us equal us.Gross domestic product 2008(millions ofRanking Economy US dollars)1 United States 14,204,3222 Japan 4,909,2723 China 3,860,0394 Germany 3,652,8245 France 2,853,062 a6 United Kingdom 2,645,5937 Italy 2,293,0088 Brazil 1,612,5399 Russian Federation 1,607,81610 Spain 1,604,17411 Canada 1,400,09112 India 1,217,49013 Mexico 1,085,95114 Australia 1,015,21715 Korea, Rep. 929,12116 Netherlands 860,33617 Turkey 794,22818 Poland 526,96619 Indonesia 514,38920 Belgium 497,586World Development Indicators database, World Bank, 1 July 2009http://www.imf.org/external/pubs/ft/weo/2009/update/02/index.htm

U.S. Commercial Construction to Drop 16% This Year, Report SaysJuly 13 (Bloomberg) — Construction spending on offices, retail centers and hotels is likely to fall 16 percent this year and 12 percent in 2010, more than previously forecast, the American Institute of Architects said.Rising unemployment and reductions in business spending prompted the Washington-based institute to cut its outlook from January, when it predicted non-residential construction spending would drop 11 percent this year and 5 percent in 2010…The economy probably shrank at a 1.8 percent rate from April to June, according to a Bloomberg News survey. Nonresidential construction tends to lag behind the economy, Baker said.Spending on office buildings is forecast to sag 22 percent this year and 17 percent in 2010, while retail construction probably will sink 28 percent this year and 13 percent in 2010, the architects group saidhttp://www.bloomberg.com/apps/news?pid=20601103&sid=awqNjDBCOIbg

Pfizer, Merck Acquisitions Put Animal-Drug Products Into PlayJuly 13 (Bloomberg) — Four of the world’s biggest drugmakers are likely to compete for Pfizer Inc. and Merck & Co. animal-health products as revenue for flea medicine, canine cancer treatments, and cattle vaccines outpaces human drugs.Novartis AG, Eli Lilly & Co., Bayer AG and Boehringer Ingelheim GmbH may seek to buy animal-health businesses from Merck and Schering-Plough Corp. with a combined $4.27 billion in sales last year, said Bill Kridel, managing director for New York-based Ferghana Partners Group, which advises companies on mergers and acquisitions.Pfizer’s animal products with as much as $400 million in sales will also draw interest, he said.The assets are being sold because Pfizer, the purchaser of Wyeth, and Merck, the buyer of Schering-Plough, have been told by regulators the acquisitions may make them too dominant in the animal-health market. Human-drug sales grew 1.3 percent to $291 billion last year, according to IMS Health Inc. That compares with 7.2 percent to $19.2 billion for animal medicines, according to Vetnosis Ltd., a U.K.-based research company.http://www.bloomberg.com/apps/news?pid=20601109&sid=adhOnRmBCh7I

Chicago Cubs Bankruptcy Looms as Way to Finish Sale by TribuneJuly 13 (Bloomberg) — The Chicago Cubs may become the first Major League Baseball team in 39 years to file for bankruptcy as Tribune Co. seeks to sell the franchise after months of negotiations.Tribune sought Chapter 11 protection in December. It is contemplating a separate filing for the Cubs to expedite the team’s estimated $900 million sale to interested bidders, including Incapital LLC Chairman Tom Ricketts, according to four people familiar with the plan.A brief Cubs bankruptcy would be a legal maneuver to clear the team from any future liability in the Tribune bankruptcy, according to two of the people familiar with the matter. Sam Zell, chief executive officer of Chicago-based Tribune, pledged the company’s interest in the Cubs as collateral when he negotiated the deal to take the publisher private in 2007, according to one of those people…Coyote UglyNot all bankruptcy sales move as fast. The National Hockey League’s Phoenix Coyotes filed a Chapter 11 case in May with plans for a quick transaction, only to have it descend into a legal fight about whether the team may be sold and moved without the league’s consent…Tribune’s creditors, which are owed $13 billion, would have the right to object because of their claim to the company’s assets. Lawyers for the creditors committee didn’t return phone calls. James Conlan, the lawyer leading Tribune’s bankruptcy, didn’t return phone calls or respond to an e-mail message..http://www.bloomberg.com/apps/news?pid=20601109&sid=aArEAGUlLmS8(Bloomberg) — Construction spending on offices, retail centers and hotels is likely to fall 16 percent this year and 12 percent in 2010, more than previously forecast, the American Institute of Architects said.Rising unemployment and reductions in business spending prompted the Washington-based institute to cut its outlook from January, when it predicted non-residential construction spending would drop 11 percent this year and 5 percent in 2010.

Roubini has a long history of bias towards globalization he tries to appear objective but really he’s a “globalization” idealists which of course is completely unsustainable – very irresponsible of him, an economy is not dependent on trade over thousands of miles of land and water it in fact defies logic and what’s natural. Another example of misplaced principle over conscience.

The present administration ran on a commitment to a program of repatriating American jobs from overseas. In this effort the administrations actions have been an abysmal failure exceeded only by the efforts of the previous two administrations. All of the promises that the number and quality of jobs in the US would increase was simply bold faced lies on the part of those administrations and those that worked to support those programs within the administrations and the lobbies that assisted them.Until and unless real wages and employment is at a level sufficient to sustain the economy there can be no recovery worthy of the name. If this continues many Americans will look to the ignorant, fanatical and tyrannical for the leadership the current order is failing to provide.It is time professor for you and your associates to do more than save the Bentley’s and big pay for the bankers and save our country from a descent into a madness the world has not seen on a grand scale for two generations.

I TOTALLY agree.Ross Perot said it well in the 1992 election cycle when he decried the insanity of NAFTA. He said something like – yes, there will be a bump in profits as our $20/hour jobs in car making goes to people in Mexico making $1/hour. But in ten years from now when wages in the USA have fallen to $5/hour and those in Mexico have risen to $5/hour – all will ask “Why are we building cars in Mexico?”Isn’t that insane to have agreed to NAFTA? Thank you Bill Clinton and all like you – you whores for sale to the highest bidders or is it suckers!

agree. I also voted for Perot to prevent the “giant sucking sound of jobs lost from the US”, but the media did a great job of turning him into a cartoon character and discrediting his message. Now that Obama has escaped the daily realities that the rest of Americans face, let’s see if he will still honor the promises he made to the American public.

It’s perfectly fine to impoverish Americans as a result of greedy capitalists exploiting cheap labor in a communist dictatorship like China. What’s much worse according to Roubini and all his insulated peers is “protectionism”, we must avoid it at all cost. Meanwhile all the Asian countries have been practicing protectionism/currency rigging etc. and benefited greatly, but for us to do it is morally wrong.

I’m sorry, can you explain to me why Mexicans *should* be making 5% of what American’s make for the same labour?Are you not human? Don’t you understand that everyone on the planet deserves a chance? Some of you Americans just have this attitude of entitlement that is so unbelievably selfish that I sometimes think you deserve what’s coming.The world would be a much better, safer and economically sound place if everyone had the same opportunities. Yeah, that means Americans don’t get to drive around with 2+ cars per person and live in mansions and not have to work, but it also means you aren’t enslaving the rest of the world’s populations and making them live in poverty.Outrageous!

Hey, we need Business Week!! How else will I get my “Death of Equities” cover buy signal??!!!

PSCheck out this link,Man Made Global warming debunked by New Zealand Meteorologist

Climate change will be considered a joke in five years time, meteorologist Augie Auer told the annual meeting of Mid Canterbury Federated Farmers in Ashburton (New Zealand) this week. Man’s contribution to the greenhouse gases was so small we couldn’t change the climate if we tried, he maintained.“We’re all going to survive this. It’s all going to be a joke in five years,” he said.A combination of misinterpreted and misguided science, media hype, and political spin had created the current hysteria and it was time to put a stop to it.“It is time to attack the myth of global warming,” he said.

So Morbid, why so in-your-face? Wife turn off the nookie?

And the cost will be passed to taxpayers through inflation, until the world will abandon the dollar.

Good point Chignos – about creating dependency.It’s the same “trick” the Roman Catholic Church plays with the masses of the poor – NO BIRTH CONTROL ALLOWED! Creating like this an ever more poverty stricken masses to which the kind compassionate card carrying hearts of the priestly order can administer too and suck off donations from.As attendance in churches have declined in our generations the STATE has become the new “SAVIOR” of the huddled masses – well – at least that is the tit I see them all trying to suck life from and encouraged by the criminal politicians who seek only power and fame from the struggling masses. Handing out more and more candy and promises – er, those new day HOPIUM coated lollypops.Time to grow up folks.

Turning JapaneseJapan’s post-bubble policies produced a “lost decade.” So why is President Obama emulating them?Anthony Randazzo, Michael Flynn and Adam B. Summers | July 2009 Print EditionThe scenario was eerily familiar. A long real estate bubble that had expanded extra rapidly for the previous five years suddenly burst, and asset prices came crashing back down to earth. Banks and financial institutions were left holding piles of worthless paper, and the economy soon headed south. The national government responded to the crisis by encouraging more lending and spending previously unfathomable amounts of money on public works projects in an effort to stimulate consumer spending and restart growth.But that stimulus did not save the Japanese economy in the 1990s; far from it. The ensuing period came to be known as the Lost Decade, characterized by multiple recessions, an annual average growth rate of less than 1 percent, and a two-decade decline in stock prices and corporate profits.The Japanese government’s easing of credit rates, instead of spurring real demand, created artificial demand. Federal loans and stimulus spending were not economically productive, and they vastly increased the nation’s debt and prolonged the economic malaise. Worse, businesses spent critical time on the sidelines, waiting for government bailouts and other centralized actions, instead of speedily consolidating their losses, clearing their balance sheets of bad investments, and reorganizing.The United States in 2008–09, unfortunately, has started down the same path. Federal intervention and the expectation of additional government action are removing firms’ incentive to clean up their balance sheets by selling “toxic” assets. Why accept pennies on the dollar if a deep-pocketed new bidder (i.e., the state) looms large on the scene? The Japanese experience shows that when the government is an active participant in the market, many firms would rather accept state support than initiate the inevitable financial reckoning. Such a status quo does not provide a sustainable foundation for the economy. Instead, it restricts economic growth and creates a cycle of stagnation.How Bubbles Form—and BurstThe Japanese asset bubble grew out of a long postwar economic boom that accelerated in the latter half of the 1980s, spurred in part by the central bank’s loosening of monetary policy. With access to easy credit, businesses sped up the country’s transformation into an economy based on technology, most prominently in the consumer electronics, telecommunications, and finance sectors.The ensuing demand for new and better technology products, combined with increased living standards, fed an asset investment craze referred to as the Heisei boom, after the emperor who took the Japanese throne in 1989. The value of the yen increased during this time, due primarily to the 1985 Plaza Accord, an agreement reached at an international conference in New York that depreciated the dollar against the yen, and Tokyo became a major financial services center. The Japanese Stock Market grew enormously, with the Nikkei 225 (an index similar to the Dow Jones Industrial Average) more than tripling between 1985 and the end of 1989.Times looked so good that U.S. bestseller lists were sprinkled with anxious tracts about Japan eclipsing the country that had defeated it militarily less than half a century before. But a more real threat was hiding in plain sight: Japanese asset prices, after rising precipitously, were about to come crashing down to earth.The late-’80s Japanese bubble and the mid-’00s American bubble had similar causes that are worth pondering:Overaggressive financial institutions and poor risk management that ignored traditional economic fundamentals. In both Japan and the U.S., excessively optimistic expectations led to bad investment decisions from Wall Street to Main Street and a pervasive culture of denial that there was any bubble at all.Japanese asset inflation was fueled by a 51 percent average growth rate in housing prices and an 80 percent increase in average commercial property values between 1985 and 1991. This spike created an overconfident climate in which investors failed to adequately prepare for a correction. Since that peak, asset values in Japan have fallen by more than 40 percent as of 2008.Japan was flush with capital in the 1980s, in part due to an export boom that started the decade before. The country was becoming an increasingly important player in the world financial system, and international investors came looking for a stake. In the preceding years, Japanese individuals and firms had built up a large pool of savings and begun investing those resources in real property. This rapid rate of investment pushed the value of land, buildings, and other capital investments higher, encouraging even more investment, and in turn speculation, based on the belief that values and returns would keep rising.Riding this asset appreciation, Japanese banks borrowed nearly ¥200 trillion ($3.4 trillion in today’s dollars) from foreign markets. This sum sloshed throughout the Japanese economy. The lending was further fueled by tiny debt-to-equity requirements, a relatively recent development that encouraged financial institutions to heavily leverage their bets. By 1991 Japanese banks held reserves of only ¥3 trillion to cover the ¥450 trillion they had lent. Normally, such a lopsided portfolio would have triggered widespread concern. But the economic climate in Japan back then was often described as “euphoric.” Prudence was not in vogue.The American housing bubble was bigger, although values have yet to fall as much as those of Japanese real estate. Between 2000 and 2006, average home prices in the U.S. grew by 90 percent, and commercial property values rose at the same rate. Since the peak in July 2006, home prices nationwide have declined more than 30 percent, and certain regions have experienced even sharper drops. Prices were still falling as of press time.After the twin shocks of the dot-com bubble bursting and the September 11 attacks, the Federal Reserve repeatedly slashed interest rates. And like Japan in the 1980s, the U.S. was seen as an attractive destination for international investment. With more investors using more money to chase high returns, Wall Street began aggressively “securitizing” home mortgages by bundling and reselling bits of loans and doing likewise with the insurance contracts underwriting them. New subprime mortgages became increasingly available to home buyers with spotty credit histories. Because of the risk, subprime loans brought a higher rate of return. But since they were bundled with safer loans, the entire packages received ratings from credit agencies that were higher than warranted.Investment patterns suggest that most Americans thought rising stock values and AAA ratings on securitized mortgages were safe financial bets. This overconfidence led most major Wall Street firms to decrease their capital ratios, taking on more debt and decreasing the amount of cash on their balance sheets. By 2007 the investment bank Lehman Brothers was leveraged 30 to 1, meaning just a 3.3 percent decline in asset values would wipe out its capital—which is in fact what happened.Stock market bubbles. In both the U.S. and Japan, the rapid rise in property values fueled gains in the stock markets. The Japanese stock index Nikkei 225 rose from 13,000 in 1986 to an intraday high of 38,975 by the end of 1989. But the implosion of the property market sent the index crashing. It had dropped to 15,025 by July 1992, and it continued a steady decline throughout the Lost Decade. By April 2003, the Nikkei had fallen to 7,603, less than 20 percent of its peak.Similarly, the Dow Jones Industrial Average went from 7,489 in July 2002 to an intraday high of 14,115 in October 2007. After that high point, the market began a modest decline, reaching 10,850 on September 30, 2008, then plummeting to 7,552 by November 20. The Dow continued to fall over the ensuing months and closed at 6,547 on March 9. (It has since rallied to just over 8,000.) In the U.S. as in Japan, the quick run-up in stock valuations lured people to invest money they did not have. The result was inadequate risk management, over-leveraged investments, and fragile capital reserves. Investors did not adequately plan for any contingency other than continued high growth and largely ignored those who warned that such growth was not sustainable.Monetary policy errors. Although private financial institutions played a key role in the booms and busts of both Japan and the U.S., monetary policy was a critical root cause. In both cases, the central bank helped set off a boom in asset prices by expanding credit and driving interest rates to artificially low levels. This encouraged individuals and businesses to take on debt they otherwise would not have accepted and make investments they otherwise would not have considered.When a central bank inflates the money supply and drives interest rates below those that would exist in a free marketplace, it sends a false signal to businesses to borrow and invest more in capital projects and goods than they otherwise might. Similarly, consumers respond to the signal by taking on higher mortgage and/or credit card debt, saving less, and spending more. Credit binges cannot last forever; when interest rates increase again, the bad investments are revealed, and it becomes painfully clear that much of the outstanding credit cannot be paid back.Between January 1986 and February 1987, the Bank of Japan cut its discount rate—the interest rate charged by the central bank on loans to its member banks—from 5 percent to 2.5 percent, leading to an increase in real estate and stock market prices. Realizing a bubble was forming, the central bank then raised rates five times in 1989 and 1990, to a high of 6 percent. This increase revealed that many investments were built on extensive, unsustainable debt. Stocks began their long and painful slide.When a recession began to set in after the 1990 stock market crash, Japan responded by reversing its tight money policy, cutting rates to 4.5 percent in 1991, 3.25 percent in 1992, 1.75 percent from 1993 to 1994, 0.5 percent from 1995 to 2000, and as low as 0.1 percent in September 2001.A similar pattern took place in the United States. From 2000 to 2002, the Federal Reserve slashed the target discount rate from 6 percent to 0.75 percent. Fearing irrational exuberance, to borrow Alan Greenspan’s famous phrase, the Fed then raised the rate as high as 6.25 percent in June 2006. But now that the bubble has burst and the economy contracted, the Fed has cut the discount rate 12 times, lowering it to the current 0.5 percent. Federal Reserve Chairman Ben Bernanke has repeatedly stated that he sees interest rate cuts as a way to “support growth and to provide adequate insurance against downside risks.”In both the Japanese and the American cases, post-bubble policy makers believed that lowering interest rates would make credit easier to obtain, thus recreating the environment that had spurred economic growth to begin with. But this meant that the supposed cure for a bubble created by easy credit was to extend even more easy credit.These rate cuts only perpetuated the distortion of economic decisions and prevented savings, investment, and consumption from realigning with true preferences, as opposed to the illusory ones created by easy credit and artificially low interest rates. The lesson is that when monetary policy is used to “smooth” or “tweak” the market, it inevitably causes unintended consequences that in some cases can be very damaging to long-term economic growth.Regulatory ResponsibilityThe current American debate often falls into broad-brush discussions about whether the nation had “too much” or “too little” regulation. The real issue is how the existing regulatory order helped spawn the financial crisis. We see it doing so in at least a couple of areas:Capital reserve requirements. In 1988 the Basel I Accord between the Group of 10—which then included the U.S., Switzerland, Japan, Germany, France, and the U.K., among others—set new capital requirements for banks around the world. But the requirements were focused on loan amounts and did not factor in a debt’s underlying risk. In other words, a loan to a sound borrower required the same percentage of capital to be set aside as an equal amount lent to a high-risk borrower. There was already a developing atmosphere of heavy lending and insensitivity to risk, but the Basel requirements rewarded firms for making loans to shaky borrowers because they could earn higher interest rates that way without having to set aside any more capital than they would for loans to safe borrowers.The chief problem was not that the requirements were too low. It was that the rules created a false sense of security for investors and lenders. Banks were meeting their legal requirements, although it was never clear what kind of debt they were holding capital to cover. Without a standard or competing standards for transparently measuring the value and risks of portfolios, Basel I proved ineffective at preventing systemic rot.In the United States, when firms calculated their reserve requirements, they were required until recently to mark many assets “to market,” i.e., value them at the price they could be sold for immediately. When asset values started falling, and categories of assets stopped trading, firms scrambled to find capital to shore up their shoddy-looking reserves. The collapse of the government-created mortgage behemoths Fannie Mae and Freddie Mac suddenly devalued mortgage-backed securities, and that meant banks holding large swaths of these assets had to come up with millions in cash overnight to meet their capital ratios. Many of the worst or most toxic mortgage-backed securities could not be sold immediately because their values were hard to determine. Under “mark to market” accounting rules, they were in effect worth nothing for the time being.The market needed time to reassess the mortgage market, given the new information it was facing from the Fannie and Freddie debacle. In the meantime, banks watched the numbers on their balance sheets go from millions to zero. Unable to find sufficient capital to meet the requirements demanded by mark-to-market accounting, institutions such as Lehman Brothers, Washington Mutual, and Citigroup fell prey to their debt. Easing the mark-to-market rules at the onset of the crisis, instead of a year later, would have bought firms precious time to recapitalize their balance sheets in a more stable manner. The banks still would have lost money, but they might not have gone bankrupt and caused a negative ripple effect throughout the economy.Government housing policy. Both Japan and the United States had explicit government policies that encouraged an unhealthy appreciation in land and housing prices. A 2003 report from the Bank of Japan blamed tax and regulatory policies for an unnatural rise in asset values. In America the Federal Housing Administration has for years encouraged the expansion of mortgage lending, including subprime lending, particularly through Fannie Mae and Freddie Mac. This was done to expand homeownership by low-income families. Such policies span administrations of both political parties, from the Community Reinvestment Act passed during the Carter administration in 1977 to George W. Bush’s efforts to create an “ownership society.”The push to expand homeownership had two big effects. First, it greatly increased the number of buyers, driving up housing prices. Second, it provided mortgages to a large number of people who had a high risk of default.Recession ResponsesBy early 1992, realizing that the economy was not going to rebound quickly, the Japanese government hurriedly enacted its first recession-fighting stimulus package. Government spending and loans during the next several years propped up failing Japanese financial firms, but the companies’ lack of vitality and perpetual operating losses earned them the moniker “zombie businesses.”Given the similar source of the U.S. bubble, American officials should take a careful look at Japan’s ineffectual and massively expensive response to ensure that the United States does not duplicate the following mistakes:Government lending to poorly managed firms. The Bank of Japan tried to ease economic pain by loaning large amounts to businesses. But the attempts to recapitalize the market ignored underlying management problems in the dying firms. It was a costly mistake. Intense lobbying from special-interest groups representing various sectors of the Japanese economy perpetuated the ill-fated loans and funneled government money to zombie businesses.The United States has already begun to copy this policy, lending billions of dollars to financial institutions and auto companies and buying up billions more in bank equity in an effort to recapitalize the marketplace. The effect has been to keep poorly managed firms alive with taxpayer money.Just months after a $25 billion investment in Citigroup, the government had to step in with a second bailout of $20 billion. Despite the infusions, Citigroup is now breaking up its holdings, a process that could have been started months earlier if the authorities had not used tax dollars to feed the zombie firm. Instead of letting the Big Three automakers go bankrupt, the administration has kept them on life support with tens of billions in loans to buy enough time for…likely bankruptcy.Conflicts of interests. With all those loans, the Japanese government found itself deeply entwined in the market, skewing its policy incentives. Daniel I. Okimoto, former director of the Shorenstein Asia-Pacific Research Center at Stanford University, points out that Japan’s banking industry and economic bureaucracies were too interdependent. Studies from Okimoto’s center and the Bank of Japan concluded that data revealing the scope of the economic malaise were suppressed and that regulations were developed with governmental interests in mind. At the height of financial industry bailouts, there was little transparency or public accountability.The United States has ventured into the same dangerous waters. In an attempt to recapitalize the banking industry, the Treasury Department forced the major banks to take bailout funds from the Troubled Asset Relief Program, in exchange for which the government took equity stakes. The federal government now owns a majority of the American International Group insurance company, as well as major chunks of General Motors and Chrysler. The dangers of interconnectedness have already become apparent.With taxpayer money on the line, elected officials feel emboldened to prescribe the marketing, compensation, travel, and other business policies of companies taking government money. Members of Congress and White House staff have criticized specific spending decisions by participating firms. Concern over bonuses to AIG employees led the House to pass an arbitrary tax on a standard business practice that lost public favor. President Obama himself has delved into such business minutiae as whether General Motors should be focusing more on brand consolidation. And a bill now in the Senate would give the Treasury Secretary power to set the salary of all employees, not just executives, at any firm with bailout money burning in its pockets.Lawmakers’ incentives are to serve their constituencies or their own political careers. This can put them at odds with the businesses they are suddenly attempting to manage. The more the government is involved in directing business activity, the less likely those firms will succeed in maintaining long-term growth, and the more likely they will turn into Japanese-style zombies.Short-term, static political vision. You can blame the length of Japan’s asset deflation, recession, and liquidity struggles on an unwillingness to choose hard but necessary policies, such as allowing banks to fail and the market to reset itself. Politicians bent on retaining their power and showing the public they were doing something took actions without regard to their long-term effects.There was little effort to clean up the banking system or get rid of harmful regulations. The government refused to acknowledge the breadth of Japan’s economic troubles, and the Ministry of Finance went so far as to order banks to hide their toxic loans to create the appearance of success. This approach was largely due to fear of the keiretsus, the powerful alliance of Japanese businesses that propped each other up with cross-shareholding and loans. Taking swift action would have upset the traditional way of business and forced the government to admit mistakes.The principle of creative destruction—the economic mutation that continuously breaks down old forms and creates newer, more productive and efficient ones—was ignored in the hope that legacy corporations could somehow save Japan. From Wall Street to Detroit, under both George W. Bush and Barack Obama, the American government has been equally unwilling to let once-formidable companies fail.Bad tax policy. In different periods, Japan tried to climb out of its economic mess by both cutting and raising taxes. There were two major tax cuts during the Lost Decade: a ¥5.8 trillion ($69 billion in today’s dollars) income tax cut in 1994 that lasted for one year, and a ¥4 trillion ($46 billion) income tax cut in 1998 spread over two years. The problem was that these tax cuts were not permanent and thus did not increase long-term aggregate consumption.From 1994 to 1995, the Japanese economy began experiencing modest growth, partially due to the first tax cut. But deflation in 1995 reduced government revenues. In an effort to stem surging national debt, the consumption tax was increased from 3 percent to 5 percent in 1997, which slowed the economy again.President Obama and Republicans in Congress have proposed various tax cuts and tax credits to stimulate the American economy. The American Recovery and Reinvestment Act (the “stimulus” bill) included the president’s signature “Making Work Pay” $400-per-taxpayer ($800-per-family) tax credit that eliminates all federal income taxes for up to 18 million Americans. The legislation also increased the amount of losses that businesses may write off on their taxes while providing tax credits to new homeowners, students, and efficient energy developers.Other ideas, such as the GOP push for reductions in capital gains taxes, have been tossed aside.As welcome as tax cuts are, without a decrease in spending they will require an increase in taxes later to cover the lost revenue and pay off the debt incurred.Japan found that temporary tax rate cuts combined with increased spending did not spur economic growth. Neither did an attempt to increase government revenues through tax increases. Reducing taxes for businesses—permanently, not until the next shortfall—allows firms to keep more revenue, which in turn lets them reinvest that money to innovate and expand their business, hire new workers, pay out dividends, or just be inspired to continue their hard work. Tax rate cuts for individuals—all individuals, including those with income over the arbitrary $250,000 threshold—give people more control over their income, allowing them to pay down debt, save, invest, or increase consumption. Those tax policies are the quickest way to stem a recession.Government infrastructure “investment.” In an attempt to encourage growth, the Japanese embarked on a massive, multi-billion-yen infrastructure program. They built roads, bridges, and airports, all with the goal of creating jobs and reviving the economy. This didn’t work either.During the 1990s, Japan passed 10 fiscal stimulus packages, focused largely on public works, totaling more than ¥120 trillion ($1.4 trillion in today’s dollars). When one construction plan failed to stimulate economic growth, another was tried. Those plans did not succeed in reviving the economy, but they did saddle the nation with a mountain of IOUs that helped postpone recovery for years. Including “off-budget” borrowing, Japan’s debt was estimated to exceed 200 percent of GDP in 2001.Construction plans often set job growth targets but rarely focused on project prices. From 1992 to 1999, the Japanese government spent more than $500 billion (in today’s dollars) on public works projects. Yet the construction jobs were not long-term and did not lead to sustained economic growth. Public debt sky-rocketed, unemployment actually doubled from 2.3 percent to 5 percent, and the economy remained stagnant. As Gavan McCormack, a historian at Australian National University, noted in his 1996 book The Emptiness of Japanese Affluence, “The construction state is in some respects akin to the military-industrial complex in Cold War America (or the Soviet Union), sucking in the country’s wealth, consuming it inefficiently, growing like a cancer and bequeathing both fiscal crisis and environmental devastation.” The government failed to properly identify which projects should be pursued, ignoring demand signals that the private sector is better at recognizing and responding to.The United States has started down a similar path. In February, Congress passed nearly $100 billion in transportation and public works spending. Naturally, political interests, not economic viability, are determining how this money is being spent.An American Lost DecadeThe Japanese government’s monetary expansion and poor regulation, coupled with the risky behavior and ineptitude it encouraged in the financial sector, led to distortions in private investment instead of economic recovery. Recessions are the unavoidable costs of unsustainable booms fostered by government policy. While politicians would like to stave off the negative effects they create—business failures, unemployment, falling housing prices—bankruptcies and corrections are necessary steps in realigning consumer preferences and the structure of production.The U.S. government is repeating many of the same mistakes that created Japan’s Lost Decade, becoming entangled with the business community through bailout equity purchases and trillions of dollars in loans and guarantees to keep failing American firms alive. This policy is making the recession worse, extending it further than it would otherwise last.Any attempts to artificially spur a credit expansion through either low interest rates or “fiscal stimulus” will only add to the economic distortions and make the market correction longer and more severe. Spending hundreds of billions of dollars on infrastructure, broadband Internet, and the like may provide some short-term benefits for some Americans, but as Japan discovered the hard way, it won’t rescue the economy. The history lessons from Japan are plentiful and clear. If the American government continues its pattern of intervention, the United States may soon be trapped in a zombie business economy and a lost decade of our own, ensuringhttp://www.reason.com/news/show/133862.html

I agree with the last comment and would add that Obama is emulating the lost decade of the 1930′s here in the US. Government tinkering, planning or experimenting has only had bad results. We need a total return to classical liberalism. We should emulate the approach Calvin Coolidge took in the depression of the early ’20′s. I just read Thomas Sowell’s new book The Housing Boom and Bust which makes a convincing argument for government intervention in the housing market having caused our current distress. Now more intervention is offered by these same people as a cure. The government has gone way beyond it’s role of maintaining a framework, called the rule of law, for free people to operate safely. I think we are heading towards totalitarianism.

doctor has volunteered to treat them for free

wow…wonder, are there any doctors who have volunteered to treat non-illegals for free

they are criminals

The U.S. Treasury is working on an internal pre-emptive $trillion commercial real estate (CRE) project informally called “Plan C.” The anonymous report came out stating the administration is reluctant to commit any additional money especially to the level mentioned in the report. However this is a disturbing new development in our bailout nation since this is one of the first times that the U.S. Treasury will try to pre-emptively deal with a financial problem.The issues with this Plan C is that it is setup to be a buffer on further deterioration in various loan categories but the big one is commercial real estate. The commercial real estate market is gigantic (~$3.5 trillion) and many of those loans are still active.http://www.mybudget360.com/the-doctrine-of-preemptive-bailouts-and-the-biggest-bailout-you-havent-heard-about-the-us-treasury-plan-c-and-the-35-trillion-you-will-be-paying/

I mentioned some weeks ago that Rosenberg’s daily commentary is available with a free registration – it’s well worth it – this guy is close to the markets and (almost) every bit as prescient at NR

hehehe i was about to blow off,lol nice last “TKO” sentence… The recession is over! Let the jobless recovery begin!even ECRI is sarcastic, depression here we come..

Mish Shedlock has an interesting take on the CPI: What’s the Real CPI Inflation Rate? Jul 14, 2009 – 03:14 AMIn a nutshell he says that John Williams of Shadowtats.com and the BLS are missing the boat by not including the cost of housing in the CPI. Rather they use an Owners Equivalent Rent (OER) factor (which happens to be the largest component in the “market basket”).If the Case-Shiller Housing Index is substituted for OER in the CPI, then one obtains a CPI of -6% compared to Sadowstats’ 2% and BLS’ -1.5%.Shedlock asks, “Which is more important, the cost of a gallon of gasoline or the price of your home?”http://www.marketoracle.co.uk/Article12010.html

Volcanic activity also increases during solar minimums and we’ve already begun seeing this occur. Add some SO2 into the atmosphere along with some ash, and a Darwin or Maunder minimum could be within the realm of possibility. Mayan elders have warned Yellowstone may erupt.Global temperatures have declined 1 degree Celsius since 2007. The Old Farmers Almanac forecasts below average temps for the remainder of the year in some regions.NASA predicts solar cycle 25 to be less active with even fewer sunspots than cycle 24. Time to buy a parka?

Speaking of Jim Rogers and Hanlon’s Razor:”The dollar has fallen almost 10% since the beginning of the stocks rally in March. Commodities have risen 94% of the time that the dollar has fallen. A very strong correlation. Do we expect the dollar decline and the commodity run-up, therefore, to continue? It’s not always a strong correlation. You are right; there has been (a correlation) in recent months, recent years even. But no, there are many times when the dollar and commodities go entirely separate ways. So, don’t get it into your head, and I know many times that the press do have it in their head that commodities and dollars go opposite ways. I am not terribly bullish on the dollar in long term. US dollars are a terribly flawed currency and down the road I hope I don’t own any US dollars. I still own some of them at the moment, but it’s not getting better for the US. The dollar any way is getting worse. The fundamentals for commodities continue to improve. The fundamentals for the US dollar do not continue to improve. They are deteriorating.Are you still sticking to your prediction of a currency crisis sometime in a year or two?Yes. The world is full of currency imbalances and economic trade imbalances would have to be resolved or corrected, one way or the other. Unfortunately, given the state of politicians and it’s not just the current state of politicians, but politicians throughout history have usually got things wrong. So, we are going to have some problems in the currency market. I don’t know when. May be not. I may be wrong. But having seen that sort of thing before in history somebody would have to pay the price whether it’s the pound sterling or the US dollar or the rupee, I have no clue. No idea where it’s going to stop, but we are going to have problems in the currency markets.”http://www.lewrockwell.com/rogers-j/rogers-j23.1.htmlHo hum

Meredith Whitney’s recommendations and Nouriel’s predictions are not conflicting. Nouriel’s predictions are the bill of GS and other bailouts.

Funny, I thought the government and corporate interests were one and the same.

Actually I think it is a rather big concession coming from an Ivy league sort that Community Colleges, much less the little people who attend them, even matter.

Interesting article, but no citations or counter-arguments to the dominant thesis of global-warming. However, from a speculation point of view, it sounds like agriculture and water will be the next big bubble. It’s hard to believe that the cited Plan B could ever be enacted. That would require everyone to pull together. The rich would never do that. Perhaps it’s time for Plan C–eliminate evil from the world. Perhaps that would be a good thing for RGE’s brain trust to concentrate on.

Global Warming vs Global CoolingFrom earlier in this thread.Michele,

Volcanic activity also increases during solar minimums and we’ve already begun seeing this occur.

As you probably know, establishing cause and effect is a very difficult problem. The best cause and effect explanation I have seen for long term trends in volcanic activity was in Chilling Stars. They have noted through the use of ice cores the coming and going of volcanic activity and found that it correlated with the rise and fall of sea level. As sea levels rise volcanic activity increases (due to pressure on underground lava around the Pacific Rim it seems). The reverse happens when sea level falls.Thus we have yet another mechanism that acts like a thermostat – regulating the earths temperature – creating like this the onset of an ice age and their ending.

Check out the Yellowstone webicorders, classic harmonic tremors (wavy lines)this morning indicating magma movement. All the time I’ve been watching I haven’t seen this before.http://mbmgquake.mtech.edu/earthworm/wavef_disp/RLMT_SPZ_US.2009071500.gifhttp://www.seis.utah.edu/helicorder/heli/yellowstone/Uuss.YFT_SHZ_WY.2009071500.gif

I work for a Fortune 500, manufacturing company, based in the US, with global operations. We are quickly donwsizing our US operations. The future of US manufacturing jobs is bleak. Which translates into a futher decline in the US middle class. How do you have a “recovery” without jobs for the middle class? I get the sense that the momentum of economic decay for the majority of US citizens is too great for even benevolent government authorities to stem appreciably. Suffering is on the rise.

That information could’ve just as easily been used to rationalize a downward movement, with the headline:”The market isn’t comfortable with Goldman’s level of risk taking.”

That should have read “Brett, I (not are)…”

It isn’t just debt that causes insolvency. It is the total burden of costs which include debt, taxes, mandated expenses and fees. So much is taken from the productive sector in mandatory insurance, taxes (sales, property, income and even taxes on taxed items) and other fees that the real disposable after expense income is negative for many (or most). It is a wonder that any business has survived this on slought of rising expenses. The rise in mandatory insurance and licensing fees are never considered by those who rule us. They seem to believe that we can just constantly work harder to make up the difference.When you add up the total burden of living the American Dream vs. the average household income, I am amazed that the average worker has any money to spend on frivolous expenditures like boats, snow mobiles, ATVs, big trucks to haul their toys around which have no real productive use. Everyone is living off someone else’s productive endeavor except that fewer and fewer businesses or their workers are able to pass the increased costs along… The point was reached in 2007 when this insane system of Ponzi existence reached the point where there was no more capacity or assets to leverage or income to service it and all the other burdens upon those who actually produced and started its long collapse.Aw, but the universe likes balance. Imbalance is neither healthy nor sustainable over a long period of time. It is going to be interesting to see how the rebalancing works its way out and thru the system. There will be a lot of pain for many and some real bargains for others. None of our real assets are going away. In the end, they will just not be as heavily leveraged or maybe not leveraged at all.. OH Poor Banker! No more free riding….

Green shoot- more like a wilted yellow weed. All earnings that come out “good” this qtr will be because of cost cutting. and the majority of cost cutting will come fom layoffs. Devil is always in the detials.Denninger said: Jul. 15, 11:56 AMIntel?Uh, well……Sure, if you just read the PR on the earnings.Someone filed that story before the conference call, or simply ignored it.The strong growth came in Asia, specifically China, which blew out a huge stimulus program. Ok.But it was specifically stated on the conference call that US consumer sales were weak, and repeating what DELL said earlier, so are enterprise sales.The quote that was chosen is rather humorous:Smith told Reuters that computer markets were strengthening and there were “pockets of relative strength” in consumer PC markets, as well as in the Asia Pacific and in China.Pockets of relative strength.Yes, there are. Netbooks in particular are relatively strong – a new, very-low-cost alternative to laptops. $300, 400, 500 machines – not the $1,000+ machines previously sold, and they’re replacing the demand that used to be filled by those $1,000 machines! That’s not so good.Neither is this:Executives warned that the corporate market remained weak, and Intel does not expect much change in the second half.Heh wait a second – I thought this was a bullish report for capital spending and the chip sector? No? IBM’s primary market is to enterprise customers, not consumers.The bigger problem for Intel is its P/E – now well over 20, its just too high – unless we get a very strong economic recovery.If you’re in the Dennis Kneale camp on that, have at it. I’m going to pay close attention to the reaction in the real market tomorrow when the stock opens for trading by the pros – not the aftermarket daytrader games of the evening, with most of that volume happening before the conference call began.I admit to being surprised by my first glance through the earnings release. I sure couldn’t figure out how those numbers got hit, with the exception of margin expansion – that was easy: layoffs. It was only when I went through the full PDF, all 10 pages, that it became clear.Sequential revenue was up $879 million dollars. But compared to a year ago it was down $1.4 billion – and remember, the recession began in December 2007!So no, Dennis and the rest, this earnings report does not tell us that we “turned the corner.” Quite to the contrary; it tells us that the recession is deeper now (for Intel) than it was in the second quarter of last year.Additionally, selling price, even excluding the Atom, was down slightly on a per-piece basis, telling us that customers are “shifting down” the price scale.Also important was guidance: The firm intends to continue to spend heavily on R&D (good), up slightly. It expects a “seasonal” expansion in demand and revenue (in other words they believe people will still buy computers to go back to school, etc.) But capital spending is expected to be down by 10% or $500 million, which does not bode well for expansion of output capacity (nor for semiconductor fab equipment suppliers!)Some of the improvement in results also appears to be a fairly normal inventory shift – about $240 million of it, in fact. Not exactly small potatoes, and backed out of the results the luster dims a bit.One thing cannot be argued with – enterprise efficiency. Gross margin expansion may not be good for the fired employees (when that’s how it happens) but one cannot argue with the impact on the balance sheet – it is clearly and without exception positive. Let’s give credit where due; this is one place that Intel excels, and they’re not losing their touch in cost management.The other interesting split is the business mix – Asia went from 51% to 55% of revenue from last year, while Japan and the Americas remained the same. Who lost ground? Europe. Do we have a little problem brewing over in Euroland perhaps? Hmmmmm…. some of this may be related to the EU fine, but I’d love some more color on that.Near the bottom of the report is, in fact, where that margin expansion came from in stark relief – the company went from 82,500 employees last quarter to 80,500 this quarter – they laid off 2,000 people, or about 2-1/2% of their staff. This isn’t a big number, but its real, and it certainly contributed to gross operating margins. Yes, even mighty Intel is not immune to the layoff monster.Finally, on the last page, we find the y/o/y scoresheet, and the basis of my call: from Intel’s perspective, the recession is simply not over.In what they call the “Digital Enterprise Group” (PCs, servers, etc) revenue is down 17% from Q2/2008 for CPUs and 30% for chipsets and motherboards (more on this in a second.)In the mobile processor segment revenue declined 7%, with chipsets and subassemblies down 12%.The chipset and motherboard revenue decline in the “primary” group is, in my opinion, quite significant. Intel is known as a premium board and chipset; I own several. They tend to be toward the high end of the price spectrum, but are high-quality as well.These are the boards that go into servers and enterprise-class machines – most home users don’t wind up with them simply because there are much less-expensive products from other manufacturers that will work with Intel’s processors. Assuming Intel hasn’t abandoned that market (I doubt it!) this would imply a very significant deterioration in server and enterprise system sales – far more than the topline decline from 2008 to 2009 would otherwise suggest.In fact, it implies rather strongly that there may be as much as a thirty percent decline in enterprise-class shipments compared to 2008.”Green shoots” eh?Uh, no.Without CapEx coming back any believed “recovery” will be fleeting at best.This is not a bad report, but the embedded reality on business-class sales, which was born out in comments on the conference call and echoes what DELL said earlier in the day, paints a rather dark picture.Bottom line: Intel knocked the cover off the ball with superior business management, not on the prospect or hint of economic recovery.Invest accordingly

Obama’s health plan will push everyone to get a nurse/doctor degree which is vey high pay job. yeah, transform middle-class to upper-class, sweet. oh well, it is nice to dream with Obama

quit your whining. you voted for him

CHEAP LAPTOPS WITH VISTAOf course there’s a surge in computer sales, my 2 month old 2008 Acer with VISTA crashed and the warranty was toilet paper. I’m using a 2007 eSystems with the old XP O/S….so are most companies/federal agencies…at least the S/W works.The avearge life of a cheap computer [have you noticed the Chinese keyboards on laptops fall apart, sometimes in months] is 3 years. The new improved LCD screens can’t be used in sunlight, there’s no brightness controls and they’re dim as Hades.If they gave us good old fashion electronics and S/W that worked and lasted for 10-20 years, Intel would really be shafted…LOL

Thank you for this analysis. I am continually amazed at the spin put on even the slightest “good news”. Cheers to relative impartiality, inteligent analysis. Those that think they can spin the globe out of this depression are doing us all a disfavor. It’s not a question of optimism vs pessimism. It’s about getting as close to the reality as possible. The economy is still going down and is relativley sensistive to extraordinary world events, on the down side. The main perpetrators of this situation are cloaking themselves in “it’s all too complicated / intertwined to prosecute individual for being responsible” speak. Folks, this is the “BIG ONE” as Fred Sanford would say. The days of valuing material wants versus the reality needs of civil living are eroding slowly, day by day. You may not notice in a short time span,unless you get laid off, but year over year, their will be a marked decrease in disposable spending (wants vs. needs).

Its time that Nouriel Roubini and his doomsday friends on this site hung their heads in shame. They have completely missed the recovery rally and underestimated the strength and resiliance of the American economy and the genius of the American people. Go back to Iran Nouriel, we don’t want your anti-American treacherous claptrap. The market has proved you to be completely wrong. Shut up and quit moaning about America; we can get along fine without your sort.

http://www.garynull.org/wp-content/uploads/2009/07/WPFW071409.mp3.gary null interview with dean baker.

Actually Guest -ER’s (those that receive government funds via Medicare anyway – which is 99.9% of them) are required by law to treat ANYONE who comes through the doors. We have to treat and stabilize everyone – regardless of ability to pay.But let me caution those on this thread who are busy pounding on the “America is the Greatest and all illegals are a drain on our system” drum……Those that I see in my ER that abuse the system the most are AMERICANS! They are not just the poor or unemployed or those without health insurance – they are all kinds of people from all walks of life who are too busy or too lazy to make an appointment with their Primary Care doctor to be seen.That’s why the ER is so busy. LAZY AMERICANS!!!!!There. My daily rant is done.

Hey BrianI think a good part of the answer is actually contained in one of the posts above that said … “I work for a Fortune 500, manufacturing company, based in the US, with global operations. We are quickly donwsizing our US operations. The future of US manufacturing jobs is bleak”.Bottom line is that US unemployment is the canary in the coal mine.PeteCA

In a brief statement, New York-based CIT said “discussions with government agencies had ceased” and that “there is no appreciable likelihood of additional government support being provided over the near term.” CIT said its management, directors and advisers were evaluating alternatives.A Treasury official said the talks ended after it became clear that CIT’s liquidity had deteriorated too much, and the company had failed to show that it could raise private capital to stay solvent. A CIT bankruptcy, nonetheless, is not a foregone conclusion, the official told Reuters

g,”Blind x, can we take it that a financial tsunami is about to hit us, what with the references to a Black Swan and higher groundÉReply to this comment By Guest on 2009-07-14 08:51:19″.http://www.metrolyrics.com/highlands-lyrics-bob-dylan.html.here the more correct transcription. apologies.the other one had a serious error with regard to theexchange in the market between the “consumer” andfederal reserve waitress, the middle part betweenthe prior cited verses..my response: “groundÉ” , that is it exactly,thank you..ps. the tsunami may be in the form of propaganda.ongoing.the financial part might be like a drought. atleast until the clean up/ clean out phase isin full swell. trough. ?.Trough may refer to:* Trough (food), a container for animal feed (syn: manger) usually domestic animals.* Trough (geology), a long depression less steep than a trench* Trough (meteorology), an elongated region of low atmospheric pressure* Trough (physics), the lowest point on a wave* Langmuir-Blodgett trough, a laboratory instrument* Trough (depression), a term describing someone in a depressionSee also* Trow* troff* The component “tropho-” in a scientific word means “feeding”, often “feeding and growing”.pss. that “E” with the thing on top! that isthe future! a place where the heart can feelat home or groundEd.. with …” the twang of the arrow and the snap of the bow “

I really don’t buy the ‘China needs US’ argument, at least not to the hyped degree…U.S. has been going downhill for at least the last 2 years, and China has just been increasing their surplus at the same time.

Excellent post. This is a sidewinder market. The Ponzi schemers move the market back and forth to catch the uninformed; they pick them up and then drop them the next week. They (and Goldman Sachs is the biggest player milking this market via unscrupulous nanosecond program trading and illegal frontrunning of its clients (regardless of the fine print) and via controlling the Plunge Protection Team (PPT) via controlling the fed and the treasury, and via first bailout privileges via controlling the Congress) find some little piece of news and pump the market up via the investor-controlled financial media, then they turn around and make money when investors on the edge get worried and sell in the absence of good news for recovery, thus moving the market back down. This cannot continue indefinitely–for one thing, as companies continue losing money and going bankrupt and letting workers go and canceling input for inventories, the economy keeps getting lower and lower while price/earnings ratios head for the stratosphere, quickening the day when a Black Monday arrives. (The average P/E ratio since the 1870′s has been about 15. What is it today? “With the S&P 500 currently hovering around 920 and the June reported earnings estimate of .48, the current trailing twelve months TTM P/E is around 1900. That’s right: 1900!” But as Doug Short says on The Business Insider (http://www.businessinsider.com/sorry-stocks-still-arent-cheap-2009-7), though stocks still aren’t cheap, that “1900″ can’t be taken seriously.)Nonetheless, one of these days, brother, this market is going to take a lot of these people out.

A good way to put it, really good.

The only way to fix the manipulated chinese currency is to depreciate the dollar

Part of the new crime is to declare that a Fed-assisted market heist not only isn’t a crime…it’s actually a public service. That explains the Wall Street Journal’s recent bragadocious comments regarding their man in the Fed, Benjamin Shalom Bernanke, whose ”charm offensive” and bringing of “greater democracy to the central bank” and “steady hand on the tiller during the recession and financial crisis appears to have won the day” for a second four-year term.Oh yes, Bernanke has a “steady hand on the tiller,” but for insider gaming sanctioned by the NYSE and SEC. It’s the same as the Nevada gaming commission saying it’s okay for the House to use computers to bet against its customers. Even if it weren’t for front running and arbitraging, just the fact that a bloated behemoth the size of Goldman Sachs has computers that can detect nanosecond movement in the markets means that they can make money simply on market movement. This isn’t marketing, it’s market gaming. The Nevada gaming commission is constantly on the lookout for somebody who’s using a “system.” Goldman Sachs has a system that manipulates markets. And destroys markets. If this is allowed to continue, Goldman Sachs is going to bankrupt the country–what they’ve left of it.Let’s face it. Bernanke was installed to benefit his friends. The only reason that he would help the economy at all is that a total devastation of the economy would mean political pressure on Congress to reform the central bank.I spoke this evening to a caddy in Pebble Beach, California. He told me that Pebble Beach’s golf course activity is down 70% and would be down even more if Pebble Beach weren’t hosting the 2010 U.S. Open Championship.The number of jobless in Monterey County, California, has dropped since hitting a 16.2 percent high in February. But the May change has been led by an increase of agricultural workers needed during harvest, and, of course, by the ubiquitous taxpayer-funded sectors of education and government. But the area’s important hospitality sector shrank by 3.7 percent during the month.Ditto to Hondo’s response today in Zero Hedge’s comment section to Tyler Durden’s “Why Does Goldman Need A Fed Exemption For VaR (Value-at-Risk) Calculations?” Says Hondo:“Because we are all [to] be gamed by GS, the Fed and the Treasury. Even Congress is clueless to the rape of America.”

Speaking of Depressions and Homo sapien sapien:That man is Homo sapien sapien is considered to be primarily due to the fact that he is (could be) sentient.There was a list of eleven mainstream economists that foresaw the global economic crisis and many others like me that did likewise. We were all called derogatory names and told in a variety of terms that we were wrong, negative, and morons (among other more colourful things).But we were correct and those that didn’t foresee the crisis, that is to say in their own terms, “leadership” and mainstream “experts” they were right, positive and intellectual giants. But the fact is they were wrong! They didn’t think; they are not homo sapien sapien; they are not sentient, even today as they are totally reactive.Now, as the collapse gathers steam under the stewardship of those that were wrong in deed, and fact, we are asked and told the merits of being positive and having faith, I repeat; by those that were wrong, er, blind; truly blind.I have stated many times that ‘mileage will vary’ and to this point I say this: to be sentient is to be vigilant and truly aware and prepared for risk, where risk is in everything but to be positive and fully invested in faith, is to be exposed… to depression.This is a time of great opportunity and business persons who are and have been aware of the risks in the broad spectrum of the milieux in which they operate will generally survive and be successful and achieve while those that believe in Santa Claus and their government, et al. will fell much pain. It should be noted that those that are being assisted are also being subjected to personal and preferred changes in Law, leaving the playing field most uneven.Evolution and civilization is about the Homo sapien sapien or sentient man or IOW about our humanity. We assess the risk in our milieux and make decisions. This is life.The coming depression is personal and is merely subject to the work and quality of thought invested in being sentient, ie, risk. Of course, luck or position and time is a random factor which effects and finesses reality.Being favoured by non-sentient governments is strictly fascism and fraught with peril.Mileage will vary as this thesis brings up the question of the integrity of socialistic employment; another time.Ho hum

Great point Softie!Same goes for just about everything. Why do our cars start falling apart in a few years? Why can’t they last 10 years or more.We’ve got a use and throw economy with obsolescence designed into all products.We’ve still got a pair of scissors in our home that was purchased by my grandfather and they still work! And i can’t count the number of other scissors we’ve bought and thrown away over the years.This will change when consumers start demading better build quality.This is also one answer to your questions about resources for large population.

ps.g,ps. thanks again. i couldn’t rememberthe “grave” term. hmm? thought provokingi say. accent / grave ? makes you want tojust lock the doors, no? depending on yourneighbors i suppose.especially with the grave occurring atopthe E at the end of ground. fascinating.which reminds me how odd errors or minuteflaws, discrepancies or points of weaknesscan become focal points for great correctionof imbalance. twang, snap. natures way.as for the green shoots they appear to bemuch more substantial, more advanced than shoots.it seems a little late in the game for peopleto be talking about green shoots. did we suddenlyarrive on this planet and just notice terrestrialgrowth? was there a leveling of forests that lefta waste land and now we are seeing the beginningof new growth? neither of these. yet?we have old growth that has had its core eatenout by ants and other boring beetles. squirrelsnesting in the hollows. as the limbs fall andthe foliage shade diminishes, green shoots mayappear. so the tarp may just be an artifice tokeep the light off of those potential green shoots?but, that was not to your point.? my green shoots, like most peoples, are not shoots at all, they are timbers and limbs and spirit rooms and atmospheres created long ago and dwelt in freely by those with a mind so inclined. or “time out of mind.”.and what about this?.http://theclick.us/2009/04/southern-afghanistan-the-fighting-season-the-digital-journalist/.apparently a new season has evolved into thecelestial planisphere of lexi-con. when conditionspermit, weather and whatever else, we now have”fighting season”. so it must be perfectly natural. god given as it were, like other constitutionally protected “rights” and manifestcosmological and economic givens, variables and constants…this will be the end of the tangent, as it is/were..Southern Afghanistan: The Fighting Season – The Digital Journalist.”It was like a major war was on and nobody was really interested. I went again in 2008 and found myself in the midst of one of the most violent times the country had seen since 2001. It was the peak of what many call the fighting season, a time beginning in the spring when the weather improves and the fighting picks up over the summer.”.weather permitting. after all we are rationaland not without compassion and empathy..grave / accent on the E. now i get it.twang, snap..” i’m walking through streets that are dead.”bob dylan. “time out of mind”

Mr. Roubini is not only correct, he is confirming the fundamentals of the next wave down in an Elliott Wave cycle that started in 1932 and ended in 2000. A 68 year 5 wave cycle is being “corrected” over about 10-14 years, starting in 2000. The correction happens in a 3 wave cycle labeled A,B,C. we’ve done the A and B. The C wave started in Oct.2007. Inside the C wave there will be 5 waves down and we are only in wave 2 of C now. The worst is yet to come in wave 3, usually the strongest. These cycles are natural math cycle patterns called “fractals” and have Fibinoci relations in size. The bubbles thru out history are made larger than need be by bankers and politicians creating excessive monetary and credit inflation, but they always end with great deflationary crashes. The pattern always completes. We are not even close yet. Examples are 1929-1932, 1837-1842, and 1720 for corrections on the scale we are now. For more info check out Robert Prechter at Elliott Wave International. Mr. Roubini’s forecast are perfect fundamental confimation to the wave counts since 2005. EWI forcast the top of the markets in Oct 2007 to the week in Sept 2007, 30 days in advance.

Where do you think all the new “doctors” and medical technicians who are going to be willing to work for next to nothing in the new health-care regime are going to come from ???

HOW IS THIS POSSIBLE? Record numbers of foreclosures, job losses, bankruptcies and Goldman Sachs and J.P. Morgan report HUGE profits!

Easy. If you retain your courage to trade when most others lose their’s, you pick up the spoils. When the crisis hit, liquidity evaporated and bid-ask spreads widened considerably. If you were a GS or a JPM and carried on dealing with little competition, you got to buy more cheaply and sell more dearly. Also, as reported yesterday, Goldman ramped up their VaR to record levels in the second quarter and just coined it.Plus there are those sweetheart deals with AIG, for instance.

Mel Gibson is too old for this

From “Just how bad is the current plague of economic fallacy?” by Lew RockwellConsider the front page of the New York Times today (July 15, 2009):SEACHANGE IS SET IN A HEALTH PLAN – House Democratic leaders took a big step toward guaranteeing health insurance for most Americans on Tuesday as they unveiled a bill that detailed how they would expand coverage, slow the growth of Medicare, raise taxes on high-income people and penalize employers who do not provide health benefits to their workers.A BLEAKER PATH FOR WORKERS TO SLOG – In California and a handful of other states, one out of every five people who would like to be working full time is not now doing so. It is a startling sign of the pain that the Great Recession is inflicting, and it is largely missed by the official, oft-repeated statistics on unemployment…Sadly, there is no way that free health care can be granted to all living things with the stroke of a pen. Broadening availability will require that the entire sector be turned over to the private sector, so that it can be controlled through the price system like everything else.As it is, the imposition of new penalties on business will make them less, not more, likely to hire people, which will thereby intensify the labor problem. It is like trying to cure a drug overdose with the injection of poison. New mandates on business are exactly what we do not need.In other words, the whole idea is just plain dumb, not to mention incredibly ill-timed. The worst possible time to be imposing new mandates on business of any sort is during a downturn. Make the mandates labor specific and you have a recipe for causing the unemployment rate to land in the double digits and go up from there, higher and higher until the entire economy shuts down.Presumably, not even Congress and the President would benefit from this result.http://www.lewrockwell.com/rockwell/jobs-problem124.html

A take from “Nathan’s Economic Edge” Morning Update 7/16 (Nathan A. Martin)JPMorgan posted a $2.7 billion profit…CRIMINALS are continuing to steal taxpayer money, while they control the government, hide their toxic waste, and rake consumers over the coals with outrageous fees. Let’s just say that between them and Goldman Suck’s bonuses, that I’m of the opinion that their karma is going to catch up to them in a way that won’t be so pleasant down the road and it will be deserved.And we have to suffer through listening to Paulson testimony today—a Teflon soldier. The only testimony I want to hear from Paulson is at his criminal trial…It looks like CIT will not be getting bailed out by the government, now there’s a tin soldier that won’t be riding away from judgment day. This will cause losses elsewhere as they were active in the derivatives field. I don’t know where and it may take a while to find out, but it looks like CIT will wind up in bankruptcy where they belong instead of becoming another money laundering operation for the central banks. Must not have been able to funnel enough cash through them or they would have…http://economicedge.blogspot.com/2009/07/morning-update-market-thread-716.html

and for those that think Small business and medium size businessare not going under at an alarming rate read this. I’m sure Cap and trade and the proposed Health insurance fix will help all of them.When business was at its best, auto-parts supplier Bill Miller had 225 employees. Now he’s got three, and two of them are breaking down hulking parts-making machines to sell as scrap metal.This StoryThe Trickle-Down EffectStruggling Auto Industry’s Trickle-Down EffectMiller has got work lined up — an order for 7,000 parts from General Motors — but he’s so deeply in debt that he can’t pay for the raw materials or the workers he needs to fire up his production line and start making parts at his plant, which sits 70 miles west of Detroit. While some of America’s biggest companies are getting a bailout from Washington, Miller has been rejected by two banks for a loan that could keep his business afloat and keep jobs in this town of 34,000.”They don’t want to help small businesses,” Miller said of the banks. “But I gotta get some iron castings in here so I can get my orders going and get some cash flow in. It’s going to be hand-to-mouth.”Miller is emblematic, industry trade groups say, of the struggles facing the 5,000 auto-parts suppliers across the country as they struggle to survive in the aftermath of the massive downturn in the auto industry and the GM and Chrysler bankruptcies. Analysts predict that 600 suppliers could go under over the next two years.For four decades, Miller’s company, Miller Industrial Products, has been churning out brake rotors, hubs, drums and pads for the auto industry. He thought he might get a break recently when GM ordered about $250,000 worth of new parts and the automaker sent word that it would pay him $150,000 for work already rendered.But then the reality of the lending market settled in. Miller, who is best known as “Billy” to friends and locals, went to Citizens Bank, where his uncle and cousin once served on the board of directors. The bank rebuffed his request for a $35,000 loan.He called another local bank for the same amount, but was told that with his debts, he is pretty much “unbankable.” He owes $5,000 to a company that sells cutting tools, another $5,000 to a steel company, and $6,000 to a guy who paints the parts. And he is three months behind on the $8,300-a-month mortgage on his plant.the rest at:http://www.washingtonpost.com/wp-dyn/content/article/2009/07/14/AR2009071402606.html

Sobering article on No Jobs!!!!!Part-Time Workers Mask Unemployment Woeshttp://www.nytimes.com/2009/07/15/business/economy/15leonhardt.htmlPublished: July 14, 2009In California and a handful of other states, one out of every five people who would like to be working full time is not now doing so.Skip to next paragraphEnlarge This ImageChris Keane for The New York TimesAfter Richard Smith, 58, was laid off from jobs at two carmakers, he moved to Charlotte, N.C., and found only part-time work. He makes $9.50 an hour repairing clubs at a Golf Galaxy store.MultimediaInteractive GraphicBroad Unemployment Across the U.S.RelatedTimes Topics: UnemploymentReaders’ CommentsReaders shared their thoughts on this article.Read All Comments (124) »It is a startling sign of the pain that the Great Recession is inflicting, and it is largely missed by the official, oft-repeated statistics on unemployment. The national unemployment rate has risen to 9.5 percent, the highest level in more than a quarter-century. Yet it still excludes all those who have given up looking for a job and those part-time workers who want to be working full time.Include them — as the Labor Department does when calculating its broadest measure of the job market — and the rate reached 23.5 percent in Oregon this spring, according to a New York Times analysis of state-by-state data. It was 21.5 percent in both Michigan and Rhode Island and 20.3 percent in California. In Tennessee, Nevada and several other states that have relied heavily on manufacturing or housing, the rate was just under 20 percent this spring and may have since surpassed it.Almost nobody believes that unemployment has finished rising, either. On Tuesday, President Obama said he expected it to “tick up for several months.”It’s fair to say, then, that the downturn is moving into a new stage. It has already been through three: the prologue, when credit markets began to quiver in 2007; the big shock, when the collapse of Lehman Brothers, in September 2008, led into almost six months of terrible economic news; and the stabilization, when the news became more mixed.Now comes Stage 4: the slog.“It’s not going to be an overnight turnaround,” as Bernard Smith, an unemployed engineer in Greenville, S.C. (a state where the broader jobless rate was 20.5 percent this spring), who has been looking for work since May, told me. “It’s going to take time.”Various indicators suggest the nation’s economic output could start growing again this summer, which would mean the end of the recession. But the economy will still be weighed down by troubled credit markets and huge household debts. So it may be awhile before growth is fast enough to persuade companies to hire large numbers of workers.This would make for an odd contrast, in which the economy was getting better but feeling worse. These broad measures of unemployment and underemployment could approach a hard-to-fathom 25 percent in California, up from 12 percent a year ago. In several other states, including Florida, North Carolina and Washington, the rate could yet reach 20 percent — and, unfortunately, the stimulus bill does not do a good enough job of targeting the hardest-hit states.After a decade in which household income barely outpaced inflation, a slow recovery could leave many people hard-pressed and frustrated. In just the last week, the Labor Department reported that the number of people filing new claims for jobless benefits dropped — but so did consumer confidence and Mr. Obama’s approval rating. Welcome to the slog.•A jobless rate of 20 percent is clearly a bit shocking. It sounds like something out of the Great Depression, and as bad as this recession is, it’s no Great Depression. So what’s going on?For starters, this rate does include part-time workers who want to be full time. Such people are not quite unemployed or fully employed.On average, they are working three days a week, and many are struggling to get by. Richard Smith (not related to Bernard) and his wife, Lynn, for example, moved from Michigan to Charlotte, N.C., last summer, after he had been laid off from white-collar jobs by both Ford and General Motors in the last five years. But after talking with 35 headhunters and sending out hundreds of applications, Mr. Smith, who’s 58, still hasn’t found full-time work.Instead, he works a few days a week at a golf shop, repairing clubs and making $9.50 an hour. The money has helped the Smiths buy a bargain-basement foreclosed house. “You get depressed, obviously,” he said. “But that never changes my attitude about my capability.”Part-time workers like Mr. Smith make up about one-third of those counted in the broader rates, which leaves roughly 13 percent of the work force in states like Oregon and Michigan who are completely out of work.And even that is probably an understatement, because it includes only people who have looked for work at some point in the last year. (To be counted in the official jobless rate, someone must have looked in the last four weeks.) Anyone who has spent time in old industrial areas knows that plenty of former factory workers would like a decent-paying job but haven’t looked for one in more than a year.When I saw these statistics last week, my first reaction was to wonder why there weren’t more tangible signs of joblessness. Many communities are pockmarked with foreclosure signs and postponed construction projects. But unless you go looking for the unemployed, they are mostly invisible.As Susan Rose — a lawyer at a nonprofit group in South Carolina who represented the unemployed until she herself was recently laid off — said, “It’s almost as if unemployed people are a forgotten, silent crowd.”The stimulus bill is helping somewhat. It has extended jobless benefits and prevented layoffs by state and local governments. A lot more stimulus is on the way, too. So far, about $90 billion has gone out the door, according to Moody’s Economy.com. From now until the end of 2010, an additional $25 billion or so will be spent every month.But the stimulus isn’t helping as much as it could, because too much of the money is going to states that need it the least. In most of the Great Plains and Mountain West, the broad jobless rate was still below 12 percent this spring. In North Dakota, it was 7.8 percent. Yet these are some of the places receiving a disproportionate share of stimulus, as recent articles by The Associated Press and The Times have shown. It’s a classic case of politics trumping economics.Barring an unexpected bit of bad news — something that turns the slog into a relapse — Congress and the White House are not likely to pursue another stimulus bill until September. By then, more of the money from the last stimulus will have been spent, and the economy’s condition will be clearer.If lawmakers do decide more is needed, they would do well to remember that this is not an equal opportunity recession. By September, one out of every four Californians — and Oregonians and South Carolinians and Michiganders — who would like to have a full-time job might not have one.Who ever thought we would be saying such a thing?

Excelent article from Mish- you have to see the charts. As california goes so will the rest of the economy. and with no fix in place for california for anything, the decline will only continue… Scary data and declines… how can anyone say the Banks are healthy with all this potential losses looming on thier books.http://globaleconomicanalysis.blogspot.com/2009/07/peak-to-trough-case-shiller-and-car.htmlPeak to Trough Case Shiller and CAR Home Price DeclinesThe following charts were produced by my friend “TC” who has been monitoring California Association of Realtors (CAR) data, DQNews data, and Case-Shiller Data. Although individual cities topped at varying times, the top-10 and top-20 cities peaked in a June-July 2006 timeframe.DQNews Housing Data contains resale single family residences and new homes.CAR Housing Data only contains resale single family residencesCAR Source: http://www.car.org/newsstand/newsreleases/DQNews Source: http://wwwdqnews.com/CAR – May 2009Home prices in California gained slightly month-over-month in the non-seasonally adjusted CAR index, resulting in a disappointment for a state that was offering an additional $10,000 in tax rebates to purchase a home (7% – 8% the median home value). As of today, the state is no longer accepting applications as the $100 million alloted towards the $10,000 tax rebates has all been claimed. Median state prices have been more than cut in half and cities have declines varying from 37% to 75% peak-to-trough. This results in the median Californian having lost roughly $330,000 in just 2 years! In higher rent areas the price drops are even more staggering with Santa Barbara South Coast leading the way with a price drop of $875,000 in only a 1 ½ years!This data does not use the Repeated Sales Methodology (as Case-Shiller does) and consequently can be biased based upon the sales pool. Additionally, the DQ News data includes the sale of new homes and resales; whereas the CAR data only includes resales.Case-Shiller Peak to Trough DeclinesCurrent DataCase-Shiller Peak to Trough DeclinesFutures DataHome prices continue to decline (although the decline was at a slower pace) despite an $8000 federal tax credit nationally. Median national prices have now fallen 32% peak-to-trough over the past 3 years or $80,000. In the 20 cities that Case-Shiller tracks prices have fallen from 10% (Dallas) to 54% (Phoenix). Price declines are highest in CA, NV, AZ, FL and Detroit. In nearly all of the cities prices have now declined back to early 2000 prices and thinly traded futures data points to a bottom occurring in about 12 months.It is important for readers to know that Case-Shiller uses a Repeated Sales Methodology (RSM) which provides the most accurate housing data available. Additionally, there are two newer columns titled “Price Level” which show both the last time prices were at the current level and what price level prices are projected to decline to based upon the CME Futures market.Lastly, this month I’ve included absolute and relative price charts. The relative charts are based upon a year 2000 equal point for the 20 cities and the absolute price chart helps to show the current price declines.

Robert Scheer’s ColumnsThe Root of Madoff’s Evil ( 7/01/09)How convenient for the judge and the media to paint Bernard Madoff as Mr. Evil, a uniquely venal blight on an otherwise responsible financial industry in which money is handled honestly and with transparency.Madoff, sentenced…to 150 years in prison for bilking investors of billions, should be exhibit A in why the dark world of totally unregulated private money managers and hedge funds should be opened to the light of systematic government supervision.Instead, he is being treated as an aberrant menace, with the danger removed once the devil incarnate, as his victims describe him, is locked up and the key thrown away.For goodness’ sake this was not some sort of weird outsider who flipped out, but rather a key developer of the modern system of electronic trading and a founder and chairman of Nasdaq. Madoff often was called upon to help write the rules on financial regulation and therefore became quite expert at subverting them.As Securities and Exchange Commission Inspector General H. David Kotz testified before Congress, the inspector general’s office is looking into “[t]he extent to which the reputation and status of Bernard Madoff, and the fact that he served on SEC Advisory Committees, participated on securities industry boards and panels, and had social and professional relationships with SEC officials, may have affected commission decisions regarding investigations, examinations and inspections of his firm.”Those relationships were close (the personal ties included the marriage of one of Madoff’s nieces to an SEC official) and stretched out over the decades during which Madoff was a major player on Wall Street. At the very time back in 1999 when the SEC was being formally warned that a Madoff scam was under way, Madoff was consulting with then-SEC Chairman Arthur Levitt Jr. on regulatory matters. When Levitt retired a year later, Madoff was quoted in the trades as paying tribute to him: “He brought all of us to the negotiating table time and time again, on a whole host of issues, and to a greater extent than any other SEC chairman.”Levitt wrote in a January 2009 opinion article in The Wall Street Journal, “I knew Bernie Madoff and had no reason to believe he was not a legitimate market maker, nor did anyone at that time know he was acting as an adviser to outside investors.”Nor was he required to tell anyone. And even if he had been, it’s unlikely that part of Madoff’s business would have been looked into. In the deregulatory mania of the preceding two decades, it had been assumed that such managers did not need regulating, and funding for the SEC kept getting cut. As Levitt noted in the article, it would only get worse:“Since 2002, the number of investment advisers—such as Madoff Securities—has increased by 50%. Yet enforcement resources have been flat or even reduced. … As a result, only about 10% of investment advisers can expect to be examined every three years, and the goal of inspecting every adviser once every five years—laughably light oversight in its own right—has been abandoned.”Money for proper oversight was not allocated because the prevailing ideology regarding private investment firms—embraced by President Bill Clinton ever as fervently as President George W. Bush would later—was the gospel of radical financial deregulation, a practice that has landed us in the larger banking mess. As with the trading in unregulated derivatives, all of the operations of private investor groups, such as hedge funds, were thought not to require government supervision because these were conducted by professional financiers dealing with sophisticated investors who knew what they were doing. If the investment went south, it was on their dime and there would be no innocent victims.As we saw with the collapse of AIG and now Madoff, that notion is false because private investment contracts can involve the resources of charitable organizations and pension funds and can end up costing the homes, savings and jobs of ordinary citizens who have no idea of which end of this arcane stuff is up.When Levitt worked for Clinton as head of the SEC, he teamed up with Alan Greenspan, Robert Rubin and Lawrence Summers to destroy what remained of financial service industry regulation imposed by President Franklin Roosevelt in response to the Great Depression. In recent years Levitt, alone among that gang of four, has criticized that action and accepted some personal responsibility for the subsequent financial meltdown.He was right again when he stated in his January article: “The Madoff scandal should be a wake-up call for more consistent, uniform, and rigorous regulation of investment advising … the final prod for a fundamental reform of the financial regulatory structure. … ”He gets it. Let’s hope that Congress does too and is not fooled by the argument of Wall Street lobbyists that Madoff was a lone rotten apple now safely discarded.http://www.truthdig.com/report/item/20090701_the_root_of_madoffs_evil/

Boy Hanky Panky sure looks well rested and what a great Tan he has going

Goldman Sachs in Talks to Acquire Treasury DepartmentSister Entities to Share Employees, MoneyIn what some on Wall Street are calling the biggest blockbuster deal in the history of the financial sector, Goldman Sachs confirmed today that it was in talks to acquire the U.S. Department of the Treasury.According to Goldman spokesperson Jonathan Hestron, the merger between Goldman and the Treasury Department is “a good fit” because “they’re in the business of printing money and so are we.”The Goldman spokesman said that the merger would create efficiencies for both entities: “We already have so many employees and so much money flowing back and forth, this would just streamline things.”Mr. Hestron said the only challenge facing Goldman in completing the merger “is trying to figure out which parts of the Treasury Dept. we don’t already own.”Goldman recently celebrated record earnings by roasting a suckling pig over a bonfire of hundred-dollar bills.http://www.borowitzreport.com/

The agreed upon price was a dollar.

No bail out for CIT… Who gets the assets and the business?Want to place bets?

Tick, tick, tick…..

I subscribe to TV Eyes so I am notified whenever Roubini’s name is spoken. I just received this from Bloomberg. Can you believe what they have done with Roubini’s message? Talk about taking words out of context!”BLOOM 7/16/2009 3:07:16 PM … let’s give you more on the moves in the stock market. let’s head down to the new york stock exchange in chris valerio.we saw a turnaround about an hour ago. now we’re strongly in the game. more stocks gaining than falling. this could be due to comments from nouriel roubini. he is saying the recession will end this year. there is an investor from high mark capital saying that there have been several analysts who have turned positive going forward. that could play a little part in what is going on. industrial technology stocks helping us out. a lot of mixed data of there. jpmorgan beating estimates by a mile. the consumer credit side bringing some doubt. if you look at the economic data, job #showings that things are — jobs numbers are showing things aren’t hurting a little bit. — are showing that things are picking up a little bit.thank you. i do want to bring in our guest right now. chris talking about analyst turning pessimistic. we talked about nouriel roubini and the recession. he is finally saying here is where the bottom is. do you feel like things have gone more positive?we do all — overall. we made a point in april that we thought those were firmly in place in the news would get better going forward. clearly stock markets discount recoveries in the economy and that is exactly what has occurred since march. not surprising to us that people are becoming more fundamentally positive because earnings are showing signs of improving. we have started to see the semblance of a slight improvement in the economy, so ..”

He’s working for Obama – he’s the Bull Economist Czar

People at CNBC today are giddy over a purported Roubini comment that “the worst is behind us in terms of the financials and economy.” They’re attributing the rally today to this comment.Where are they getting that quotation?? Can someone source this?

New Thread

I’m the one who posted above about the TV Eyes and Roubini’s comment being taken out of context. Looks like Roubini reads our posts. I received this from TV Eyes later:”BLOOM 7/16/2009 5:24:04 PM … were not covering their shorts. there were buying calls, which may have distorted the vix. i think sentiment is fragile. there were a number of events. on tuesday it had meredith whitney actually changing our view on goldman sachs. that was a big deal, because she was good on the way down. today we had nouriel roubini in chile sang the worst is over. he was also good on the downside.we have a report that says nouriel roubini is claiming now that his quote was taken out of context. we are trying to reach him to see if he can give us a bigger context.this is what move the market.is the the market that is moving and we are looking for these headlines to fill in the blanks?when does the news hit the tape, and how the market react to it? that is how i look at it. it could people who were short back in the market, but if short-term money. i do not see it being investors. a lot of investors are saying what is this? that is why you need the fall for. we will not really know that until next week.let’s say your clients are sitting in cash. what do you tell them to do?i would say do not do anything. if you have cash, i would like.is cit a big deal? why is it not getting the same attraction whether with aig art merrill lynch and bank of america?i do not know. it’s certainly worries me. it is a company that does an awful lot of factoring and lending to small size, middle america cos. what happens here should be a big deal and it could trickle into more unemployment or more bankruptcies. …”

You sir, are an idiot.

What about all the useless, destructive financial industry jobs? Sure, we can send your job to India, they are smarter! FREE ENTERPRISE RULES! Quit whining, you guys are on the subsidy dole, all you so-called “FREE-ENTERPRISE” cretins want the profits private,and the working jerks to cover your failures. Justifiably most of you ought to be under water, clowns.

Who are you? Where are you from?? In NYC I see the same as the previous writer, ERs filled with illegals. Ranting is one thing, lying is another. Go back to YOUR country, MEDIC. You are here to grow fat from the American medical system, you may be legal med student, but you are still actually just a parasite. We not only have to contend with American vampires we import foreign ones also. WHY????

????Giraf??? DIDN’T THEY ALMOST GO BELLY UP JUST A SHORT WHILE BACK??? Even with hand picked cronies in the US government they still needed a bailout.

It is NOT like the old days pre-2000there are so many fewer jobs to go back to. Psychologically, most of us are UNPREPARED for permanently high unemployment. The rich believe they will ride it out with their massive looting of the economy. Well, look at Brazil, the hyper-rich commute to work in helicopters. There is a reason for it. And lastly, I don’t believe little American entrepeneurs will be allowed to grow small industries legally, they are a threat to the status quo. GOOD LUCK PETECA,my brother and I are already planning how to capitalize on the coming IOU boom, due soon nationally!!!

HEY! Kids??? Ask anyone big in the banks or WS, kids??if their parents aren’t successful, tuff s**t. The folks are going to discard, why worry about their useless offspring! In fact, now that the world has changed radically, Banksters and others of their ilk, might even appropriate SS money to aid themselves. Why NOT???? Simply will hasten the deaths of worthless peons. KIDS?? The new America doesn’t need more potential failures. The quicker they are terminated the better off the deserving class will be!!! Hey, they can tax the Chinese (????) They only need 20% of the present population as servants, why not import 60 million more Mexicans, euthanize the rest??(Check your history, Mexican oligarchs wanted to do the same to their trouble making peons in 1910-import farmworkers from the Japanese Empire!!! Their revolution kind of got in the way) KIDS??? You actually believe anyone in power REALLY cares???

Will our country be worse off after an actual merger??? Maybe the new Institution will become a more efficient kleptocracy, reducing drastically the costs of looting what is left of our country!!! What do you think the new share price will be??? WOW let me buy some!!!

As always great thought provoking article from Roubini. It seems that some folk think that we can pay off the debt with inflation, which really means that the long term bond holders will lose on real return on their investments. But, who is stopping them to devalue their currencies as well, and that will keep the exports to the world tough and the import to US still cheap. We will be where we started from.There is just one little problem with all of this. There just is no substitute for hard work.