 Economic Downturn to Continue? |
By: perceptions_now
5/08/2009
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US housing valuations were around $22.5 Trillion (2007) and valuations have subsequently fallen 30% + (and still falling), that would equate to a fall in US Home equity of say $6.75 Trillion.
Given the exposure of Freddie & Fannie to the US Mortgage market was over 40% and the US government and the committment of the US government to them, I would suggest -
1) There is NO WAY that Fredie & Fannie are coming back.
2) There is NO WAY that the US Treasury committment will be limited to $200 Billion, the cost will be considerably higher.
3) The ratings companies may need an assessment of their own? |
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By: perceptions_now
5/08/2009
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Whether we like it or not &/or agree or not, the world economy is not yet capable of de-coupling from the US!
And, at the centre of the US economy, is their banking system, which would currently be BANKRUPT, were it not for-
1) Some interesting CHANGES to accounting standards/requirements.
2) Some interesting SUPPORT from US governments (both parties).
3) Some, even more interesting SUPPORT from the FED, who have "donated/shifted" TRILLIONS, from Public asstets, to prop up their Private sector "friends".
So, given that we (and the world) are still irrevocably linked to the US, I think it prudent to try to understand the major factors involving the US & it's economy! |
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By: pansi1951
5/08/2009
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I totally agree with your point of view, but what I don't understand is why so many people don't. Do you have any formal training in economics or such? or do you just take a deeper look at the situation like I do.
Maybe it's just like they say, no one wanted to believe that this would happen.
Anyway, yep! unfortunately, we have a long way to go yet. |
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By: bahamian3002
5/08/2009
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I totally agree with your point of view, but what I don't understand is why so many people don't. Do you have any formal training in economics or such? or do you just take a deeper look at the situation like I do.
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pansi, there is a queue forming at checkout ten, can you put down the Financial Times and do the job you are paid for! |
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By: pansi1951
5/08/2009
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<<pansi, there is a queue forming at checkout ten, can you put down the Financial Times and do the job you are paid for!>>
......................... ......................... ......
I'm on my break bahaman, you don't want me to call the union, do you? |
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By: perceptions_now
5/08/2009
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1) I don't understand is why so many people don't.
2) Do you have any formal training in economics or such?
3) or do you just take a deeper look at the situation like I do.
4) Maybe it's just like they say, no one wanted to believe that this would happen.
pansi,
1) There are 6 Billion opinions, on almost anything!
2) I will defer to those with formal training/degrees, such as many of the emminent Economists & people like Abdrei, who have a piece of paper, but didn't pick the biggest downtrun since and likely including the Great Depression.
However, I do have some years in the Financial Sector, including banking, but mostly Insurance.
That said, some of the best ground in financial affairs came since the mid 90's, when I started running my own super.
A lot of time had/has been spent in research, particularly in the 12 months leading up to 2006.
3) Given my insurance background, my research led me to look at likely outcomes, but without blinkers.
4) Which leads to the first law of insurance, which is,
SH!T HAPPENS. No one wants these situations, which may actually lead to their creation, but they do happen. |
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By: pansi1951
5/08/2009
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<<my research led me to look at likely outcomes, but without blinkers.>>
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Thanks perceptions, I didn't mean for you to bare all.
I think it's all about the blinkers.
I see unemployment rising, businesses folding, foreclosures and bankruptcies and the word seems to be the economy is on the up and up.
I just don't get it, why more people can't see the real state of things.
Happy in debt and denial I suppose. |
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By: perceptions_now
5/08/2009
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"I didn't mean for you to bare all."
pansi,
I have Naked DSL, so it comes naturally!
Seriously, the warts & all version, may make Kevvy & Malcolm blush, so I keep it under wraps? |
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By: pansi1951
6/08/2009
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<<I have Naked DSL, so it comes naturally!>>
......................... ......................... .........
LOL! but I think as a responsible citizen, you should have told them.
On second thoughts....nah! not like they'd believe you, not when thet've got koshie to turn to for advice. |
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By: perceptions_now
6/08/2009
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I often see the word "free" mentioned in posts and it is interesting, as it conjures up certain thoughts in the mind.
We are "free" to do what we want, we want our "freedom", we enjoy a "free enterprise" economy.
And, in some countries, including OZ, there are some benefits to our system, which are not available to others.
However, "freedoms" don't simply sit there in isolation, they are not a one way street and they have never actually been "free".
There are also obligations that go with our "Rights & Freedoms" and whilst they apply to "natural people", they also apply to Businesses, Unions & Governments (politicians).
The history of humanity has seen a constant battle, between Freedoms or Rights (if you prefer) & Obligations, for & to ourselves, our neighbours, our nation, other nations and our planet.
There is a BALANCE between the extremes and we, at all levels, need to find that balance! |
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By: vegitamite97
6/08/2009
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Firstly, I have been meaning to say perceptions, and pansil, that I appreciate your posts & read this thread everytime you update the info perceptions.
I read more than I comment of late.
I also ask now perceptions, do you think we will find that balance, before it's to late. As I relate to your last post very much ? |
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By: perceptions_now
6/08/2009
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Placebo Effects: Part 1
A key risk remains the ability of governments to finance their burgeoning government deficits. A wretched combination of declining tax revenues, increased government spending to cushion the economy from recession and bailout packages for banks and other 'worthies' means that many countries face large and continuing budget deficits.
Even countries with relatively healthy 'balance sheets' such as Australia do not anticipate balancing their books for many years. If the problems of an aging population and unfunded liabilities such as public sector pensions, healthcare and social security arrangements are included, then the budgetary position looks considerably worse.
In 2009, total sovereign debt issues are expected to total over $5 trillion of which the U.S. alone will need to finance around $3 trillion.
The markets ability to avoid consideration of these issues reflects Mark Twain's observation that: "Ignorance more frequently begets confidence than does knowledge".
Link -
http://www.eurointelligence.com/article.581+M5365c 7b4461.0.html
Close Gaps
=================
Whilst I do not agree with all comments in this article, it certainly makes sense, in many areas.
Part 2, to follow. |
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By: perceptions_now
6/08/2009
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Placebo Effects: Part 2
Government spending has been substituted for private consumption and investment. The deficits will ultimately necessitate a combination of increased taxation and reduced spending to correct this position.
Belief in the recovery story and sharp financial market rallies fail to recognise that little has actually changed since the GFC began. Fundamental failures have not been fully addressed.
The required reduction in debt levels has not been completed. Increases in government debt have substantially offset reductions in private sector debt.
There is now faith-based reliance on Governments' ability to rescue the economy.
As one anonymous saying states: "Never in the history of the world has there been a situation so bad that the government can't make it worse."
Instead of dealing with the problem of leverage, the debt has also merely been rolled forward through a variety of clever warehousing structures and the manipulation of accounting rules.
No sustainable global recovery is likely without addressing the fundamental global imbalances that lie at the heart of the GFC.
Placebo Effects
On 14 June 2009, Wolfgang Munchau writing in the Financial Times ("Optimism is not enough for a global recovery") eloquently summed up developments: "Instead of solving the problems to generate a recovery, the political strategies have consisted of waiting for a recovery to solve the problem. The Europeans are relying on the Americans to generate growth. The Americans are relying on the Chinese, who in turn are waiting for the rest of the world."
Link -
http://au.messages.yahoo.com/news/politics/541048/ ?a=compose
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Not only has Debt, not been reduced, it has increased, whilst income has started to fall, at a time when consumption is/will also fall. |
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By: vegitamite97
6/08/2009
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"Ignorance more frequently begets confidence than does knowledge".
_________________________ _______________
Oh, doesnt that explain alot !
My father always said ignorance is bliss
but its doesn't mean you should be ignorant..
the question is does ignorance give you coinfidence ?
In some cases it seems the best option, because worrying about the problem you see isn't enough or helping when the ones in power are ignorant .
I sometimes of late really wish I was more ignorant to most issues in life. I can see it sure must make life 'easier'..... |
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By: perceptions_now
6/08/2009
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"do you think we will find that balance, before it's to late"
vegi,
Unlike our "friendly Pollies", who may like people to think that "they can be all things, to all people, all the time" and I do not pretend to have all of the answers.
I just look at what has happened, look at what factors may change future outcomes and pose some likely alternatives or options and in a relatively limited area.
That said, the future is not fixed, one way or another. What we do today, will interact with what we did yesterday and we will experience the results tomorrow.
However, there is one thing I am prepared to guarantee, we can not continue with the status quo, in a number of areas, including Politics, Economics & our Environment! |
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By: perceptions_now
6/08/2009
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"Ignorance more frequently begets confidence than does knowledge".
vegi,
Thank you, I had meant to post that phrase, it does put somethings into perspective! |
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By: perceptions_now
6/08/2009
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"Ignorance more frequently begets confidence than does knowledge".
vegi,
Thank you, I had meant to post that phrase, it does put somethings into perspective!
====================
Time for a shower, Vegi, it seems I DID post that already.
Bye! |
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By: vegitamite97
6/08/2009
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it seems I DID post that already
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hehehe, thats ok, I was going to 'play' ignorant :)
but while your gone I have been thinking strongly about that phrase.
The way I see it ignorances then breeds selfishness. Thats could explain why some people climb the class ladder easily, & or ,suffer less from anxieties & stress of daily life issues.
But , its then torture to be the opposite of ignorant, which I'm not sure what you call thatbut in which I thought was the right way to be......OOo enough from me .lol
anyway, food for thought for me today, thanks perceptions ,
bye... |
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By: lkarnd99
6/08/2009
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Tuesday, August 4, 2009
What the Fed is REALLY Trying to Hide In Fighting an Audit
http://www.washingtonsblog.com/2009/08/what-fed-is -really-trying-to-hide-in.html
75% of Americans and at least 276 Congress members and 19 Senators want to audit the Fed, but the Fed is fighting tooth and nail to keep everything hidden.
Most people assume that the Fed wants to keep secret the list of banks which received bailout money. You know, something along the lines of "we gave Goldman Sachs $100 billion".
But what the Fed is really struggling to keep hidden is the fact that the entire financial system is based on massive manipulation and fraud by the Fed and its primary dealers.
Specifically, the Fed is desperately trying to hide that many trillions of the government's bailouts have gone to inflating the stock market, buying up the U.S. government's own treasuries, and gaming the currency and gold markets.
Of course, when the New York Federal Reserve's "primary dealers" (the dealers through which the Fed carries out its open market operations in general, and its PPT, ESF, and other schemes through) get the huge sums of cash from the Fed, they place bets based on inside knowledge of where the money flows are going (they also, supposedly, skim off part of the cash, but that's for another essay).
In other words, the Fed's primary dealers engage in insider trading and frontrunning on a scale which would make your normal white collar felons look like a silver nanoparticle.
Finally, the Fed is not the only central bank engaging in manipulation. An audit would show how the Fed is playing footsie with other private central banks in an international con game.
Don't believe me? Show me the books and prove me wrong.
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Until the FED provides the audit, anyone participating in the Investment markets is taking a great gamble.
These markets are totally manipulated to meet the financial needs of the FED, its partners, and other Central Banks participa ... |
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By: perceptions_now
6/08/2009
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How much oil do Opec countries really have?
Strahan says, "In the mid to late 1980s...Opec was discussing a proposal to change the criteria by which quotas were allocated to include the size of each country's reserves.
The new rule was never actually introduced, but the prospect that it might be, seems to have galvanised Opec countries into suspiciously large revisions. In 1985, Kuwait's proved reserves...leapt by almost half, from 64 giga barrels (billion barrels) to 90 giga barrels, and in 1988 they rose again to 92 giga barrels.
The same year, Abu Dhabi's proved reserves almost tripled to 92 giga barrels, matching Kuwait exactly, and then Iran raised the bidding by one, increasing its proved reserves from 49 to 93 giga barrels, while Iraq more than doubled, from 47 giga barrels to around 100 giga barrels, and Venezuela also jumped by over 100% from 25 giga barrels to 56 giga barrels.
Finally in 1990, Saudi Arabia raised its proved reserves by a whopping 88 giga barrels, from 170 to 258 giga barrels. So in the space of five years, Opec reserves had risen by 305 billion barrels, despite the fact that no significant discoveries had been made."
Such big increases in reserves most independent observers find difficult to believe. Even more suspicious is the fact that these reserves remained constant for years to come.
"More suspicious yet, many of the new reserve figures subsequently remained unchanged for many years despite the fact that Opec countries were producing billions of barrels every year," writes Strahan.
Given these facts, Opec has lesser reserves than it claims to have and hence is "no longer the swing producer, but pumping full-bore, just like everybody else."
The moral of the story is that the world actually has a lot less oil than it believes it does.
Link -
http://www.dnaindia.com/money/review_how-much-oil- do-opec-countries-really-have_1279175 |
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By: perceptions_now
7/08/2009
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CCB to Cut New Lending by 70%, President Zhang Says
Aug. 7 (Bloomberg) -- China Construction Bank Corp. President Zhang Jianguo said the nation's second-largest bank will cut new lending by about 70 percent in the second half to avert a surge in bad debt.
"We noticed that some loans didn't go into the real economy,"
Link -
http://www.bloomberg.com/apps/news?pid=20601087&si d=abCtHev2emzk
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Did someone forget to bolt that barn door, AGAIN? |
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By: andreihicks
7/08/2009
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OPEC's Reserves are pure speculation.
You can't know because none of the Oil producing nations will state their reserve capacity so its completely impossible to add them all up to gain the total amount. |
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By: perceptions_now
7/08/2009
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"Until the FED provides the audit, anyone participating in the Investment markets is taking a great gamble.
These markets are totally manipulated to meet the financial needs of the FED, its partners, and other Central Banks participa ..."
lkarnd99,
So, when do you think it will be safe to go back into the water?
Or, when will all those white pointers (sharks) be gone?
And, more to the point, is it possible to achieve an outcome, where the FED & OTHERS are brought to account & THE SYSTEM (Patient) SURVIVES THE MEDICATION? |
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By: perceptions_now
7/08/2009
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"You can't know because none of the Oil producing nations will state their reserve capacity so its completely impossible to add them all up to gain the total amount."
Andrei,
Yes & No!
You are correct, that it is not factually known what the OPEC reserves are, because they now keep it under wraps.
However, back in the 80's & early 90's there were discussions aimed at a quota system, which may have been based on each nations reserves, as the article says.
At that point, each of the OPEC nations magically increased their reserves.
OPEC could provide verifiable Reserves details, but I suspect they won't for several reasons, the main one being that their level of Reserves, are nowehere near what is claimed. |
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By: perceptions_now
7/08/2009
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Current Economic Downturn Is Worst Since Great Depression
While the current circumstance should become recognized as a "depression," worse lies ahead as the U.S. government's long-range insolvency and current efforts at debasing the U.S. dollar trigger a hyperinflation in the next five years. Risks for the onset of a hyperinflation in the United States are particularly high during the next year. As will be discussed in the soon-to-be-updated Hyperinflation Special Report (see the existing April 2008 version for basic background), the United States would be particularly hard hit by such a circumstance. Unlike Zimbabwe, which has been able to maintain some level of functioning commerce during its hyperinflation, due to the backstop of an active black market in U.S. dollars, the United States has no such backstop. Accordingly, a U.S. hyperinflation likely would force cessation of regular commerce, triggering a great depression of a magnitude never before seen in the United States.
http://www.321gold.com/
Story link -
editorials/williams/willi ams080509.html
Shadow Stats Aletrnative Data link -
http://www.shadowstats.com/alternate_data
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Whilst I may not agree with all of this authors thoughts, he is creditible and he certainly highlights that officials stats are not to be trusted. |
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Economic Downturn to Continue? |
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