 Economic Downturn to Continue? |
By: perceptions_now
7/08/2009
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King Raises Stakes in 175 Billion-Pound U.K. Economy 'Gamble'
Aug. 7 (Bloomberg) -- Bank of England Governor Mervyn King is betting that he can keep pumping money into the economy without an outbreak of inflation once growth returns.
The central bank yesterday added 50 billion pounds ($84 billion) to its asset purchase plan, taking it beyond the previous limit granted by the Treasury. Economists say King's move risks stoking excessive inflation as the bank pumps a total of 175 billion pounds into the economy, equivalent to 12 percent of gross domestic product.
"It's a gamble," said Peter Dixon, a London-based economist at Commerzbank AG, Germany's second-biggest bank.
"The more we throw at this problem, the bigger the potential exit strategy risks will be."
Link -
http://www.bloomberg.com/apps/news?pid=20601068&si d=aj9tZ6cO8SLw
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Let there be no mistake, we are in the FIRST QTR of the HIGHEST STAKES GAME, ever played! |
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By: lkarnd99
7/08/2009
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The U.S. Economy has h*it the Wall, and the FEDs connivance is coming unstuck.
Can they hold out till the planned October surprise, or will the s*hit hit the fan earlier?
====
BLATANT Monetization Uncovered
Thursday, August 6. 2009
http://market-ticker.org/archives/1304-BLATANT-Mon etization-Uncovered.html
Remember the Dallas Fed's Fisher saying that "The Fed will not become the handmaiden of Treasury"?
He was lying (The Fed already has), and now there is proof.
Mad props to both Zerohedge and Chris Martenson for noticing this; I missed the facts buried in the CUSIP list.
The upshot: The Fed bought nearly half of LAST WEEK'S 7 year Treasury Issuance TODAY.
Huh? Remember, after the 5 year auction that went badly (and which I wrote about) the 7yr auction went "well." Rick Santelli (and a lot of other people) agreed - demand was strong.
That made no sense to me at the time, coming one day after a near-failure in the 5 year.
Well now we know what happened: The Fed pretty clearly pre-arranged, either explicitly or by "suggestion", that the Primary Dealers take up the auction with the promise that The Fed would immediately monetize half what the Primary Dealer's took!
Folks, this is beyond bad - it is pernicious and outrageous conduct by The Federal Reserve in conspiracy with the Primary Dealers, both of which are now desperately trying to prop up the US Government Bond Market through subterfuge rather than just buying up the bond issue from Treasury when originally put to the market!
If you think the economy and credit markets are "on the mend" why would The Fed do something like this?
It would not be necessary unless The Fed was told (by those very same Primary Dealers) that they were going to be unable or unwilling to take down any more Treasury Debt.
..cont |
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By: lkarnd99
7/08/2009
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cont...
Folks, let me be clear: The United States HAS OFFICIALLY HIT THE TREASURY DEBT WALL and The Fed and Treasury are engaged in subterfuge and conspiracy in an attempt to hide this from the market.
There is no other explanation for what just happened.
None.
This is likely what the market figured out: |
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By: perceptions_now
7/08/2009
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So, what do you see as the major problem?
lkarnd99,
The fact that the "Parent company (the US government)", is "Bankrupt"?
That the "Subsidiary company (the FED)" of the "Bankrupt" Parent company is also "Bankrupt"?
Or, that the "Bankrupt Subsidiary" company is loaning "money", to the "Bankrupt Parent" company, to get it out of "Bankruptcy"?
Personally, it all sounds very straight forward, to me?
Just one small thing, I need a hand with?
What part of being "bankrupt", means that your not really "Bankrupt?
PS - Yes, I know the FED is not a real subsidiary! |
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By: lkarnd99
7/08/2009
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It's a bit like the person with no assets, and no income, but two credit cards, keeping himself going by withdrawing money from one credit card to pay off the other. A Bernie Madoff ponzi type scheme.
Of course sooner or later, the credit runs out and the music stops. But in this case, who gives the order for the FED to stop the printing presses?..
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The Fed's UST-POMO Pyramid Scheme Exposed
Submitted by Tyler Durden on 08/06/2009
http://www.zerohedge.com/article/feds-ust-pomo-pyr amid-scheme-exposed
In a brilliant piece of investigative reporting, Chris Martenson (original article here) http://www.chrismartenson.com/blog/fed-buys-last-w eeks-treasury-auction/23880 has uncovered that the Fed, merely a week after issuing $28 billion in 7 year bonds (which Zero Hedge discussed previously) via its puppet, the US Treasury, of which $10 billion ended up being purchased by primary dealers, has turned and bought 47% of the primary allocated bonds in Open Market Purchases.
This is undisputed monetization removed simply via one primary dealer and less than 5 days of temporal separation in order to leave no easy trace. As Martenson points out:
"A more honest and open approach would have been for the Fed to simply buy them outright at the auction but this way, using "primary dealers" and "POMOs" and all these other extra steps the basic fact that the Fed is openly monetizing US government debt is effectively hidden from a not-too-terribly inquisitive USÂ press and public."
The question is did the Fed implicitly tell the primary dealers they are merely holding the treasuries for a flip, and that it would acquire them immediately.
Absent this $4.8 billion in effectively monetized bonds, what would the Bid To Cover have been for the primaries?
Would this have been the second practically failed auction for USTs after the deplorable 5 year auction results a day prior?
..cont |
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By: lkarnd99
7/08/2009
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cont...
One wonders if there would have been 62% indirect interest in these bonds (which the day before had a measly 32.5% indirect bid) if the purchasers were aware of the Fed's immediate prompt monetization of a large part of the directs' balance.
It is truly a sad state of affairs when the Fed has to manipulate public and media perception in this way, and has to cover up for the complete lack of interest in US Treasuries.
Here is the evidence Martenson dug up:
SEE LINK
Martenson's conclusion needs no elaboration:
"The speed of the shell game is accelerating.
This immediate repurchase of newly auction bonds by the Fed tells us that demand for these bonds is not nearly as high as advertised, and that things are not quite as strong as represented.
And oh, by the way, don't expect any stock market weakness while so many billions are being shoveled out the Fed and into the pockets of the primary dealers.  They'll have to do something with all that freshly minted cash....."
Zero Hedge salutes CM for this brilliant piece of sleuthing: now if only the MSM would have the guts to demonstrate the pyramid scheme that the US Bond and Equity markets have become.
Chris Martenson is the author of the Free Crash Course on the U.S. economy, a very extensive course that was linked on Yahoo 12 months ago forecasting where they were heading and why, and what to do about it...
http://www.chrismartenson.com/crashcourse |
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By: perceptions_now
7/08/2009
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Chris Martenson is the author of the Free Crash "Course on the U.S. economy, a very extensive course that was linked on Yahoo 12 months ago forecasting where they were heading and why, and what to do about it...
http://www.chrismartenson.com/crashcourse
==================
I can recommend Chris Martin course, time well spent! |
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By: andreihicks
7/08/2009
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| The issue was one principally of regulation. There have been changes to made to close the gate on that one, whether it is enough is open to speculation. |
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By: lkarnd99
7/08/2009
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So, what do you see as the major problem?
<< perceptions >>
===
It is self evident.... as stated on numerous occasions, the U.S. government is bankrupt, and if they were a business would have been put into liquidation years ago.....
The economy and investment markets are being kept stable by a ponzi scheme that provides dealers with massive amounts of money to gamble with...
The US Debt clock keeps ticking, and the U.S. debt keeps growing:
http://www.usdebtclock.org/
The U.S. citizens Medicare & Social Security funds have been raided and liability grows to an unmanageable level...
WHO will give the order to stop the printing presses, and call in the Receivers, and what will be the impact?... This, I believe is the worrying question.... |
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By: pansi1951
8/08/2009
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This is what we, as citizens are up against.
When our RBA comes out and says things are improving, you have to wonder how bad they really are? |
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By: perceptions_now
8/08/2009
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Deleveraging the U.S. Economy
Posted on: Thursday, August 6, 2009
We are in the process of deleveraging the most leveraged economy in history.
Remember, over the past decade (when we believe the secular bear market started) the total debt in the U.S. doubled from $26 trillion in 2000 to just over $52 trillion presently (peaking a few months ago at $54 trillion).
The attached chart of total debt relative to GDP shows exactly how much debt grew in this country relative to GDP (it is now 375% of GDP).
We expect that the U.S. deleveraging will follow along the path of Japan for years as real estate continues to decline and the deleveraging extracts a significant toll from any growth the economy might experience. We also expect that, just like Japan, the stock market will also be sluggish to down during the next few years as the most leveraged economy in history unwinds the debt.
Commstock Link -
http://www.comstockfunds.com/default.aspx?act=News letter.aspx&category=SpecialReport&newsletterid=14 73&menugroup=Home&AspxAutoDetectCookieSupport=1
Comstock Debt to GDP graph link -
http://www.comstockfunds.com/files/NLPP00000/421.p df
===================
Debt levels in the US are likely continue to increase, as costs increase and incomes fall.
For those not aware of the Japanese experience, the all time high NIKKEI was 38,915 on 29/12/1989.
It then trended down over time to a low of 7,086 in March, 2009, before rising again to close yesterday at 10,412.
And, a similar situation applied to Japanese Real Estate prices.
The $64 Trillion question, is the circuit breaker for the US & Global economy?
NIKKEI Link -
http://au.finance.yahoo.com/q/bc?s=%5EN225&t=my
Japanese Real Estate link -
http://www.generationaldynamics.com/cgi-bin/D.PL?x ct=gd.e070220 |
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By: perceptions_now
8/08/2009
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"When our RBA comes out and says things are improving,"
pansi,
Central bank statements can be self fullfilling phrophecies, so they need to watch what they say.
Whereas, you, I and other members of the public can say what we think and it's not going to have the similar result.
Also, Central banks (at least in the past) could make "motherhood" statements, to promote "Confidence" and it would generally work.
That said, we have moved to a different paradigm! |
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By: vegitamite97
8/08/2009
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Also, Central banks (at least in the past) could make "motherhood" statements, to promote "Confidence" and it would generally work.
========================= ====
why the change do you think?
Peoples awareness..to much information.. maybe we are not as ignorant ? LOL ..
referring to the ignorant phrase & discussion earlier....are we waking up to a system that has flaws ? |
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By: vegitamite97
8/08/2009
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AND P.S,
Is it Good or Bad that we are waking up ? |
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By: perceptions_now
8/08/2009
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"why the change do you think?"
vegi,
Clearly, we live in an "information age" and it is now easier for those, who seek information, too cut thru some of the traditional "Smoke & Mirrors" of the old PR machines.
It is also just a clear that, there are still large numbers of people that either still don't have a access to the information which can now be obtained or elect to close their minds to some of that information, because it doesn't fit into their "pre-conceived" ideas, on what life & the world should be.
So, sometimes ingorance is externally imposed & sometimes it's an internal matter.
That said, overall we are a little less ignorant or we are a little more knowledgeable.
Speaking personally, I now have just enough knowledge to ASK QUESTIONS! |
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By: perceptions_now
8/08/2009
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"Is it Good or Bad that we are waking up ?"
vegi,
The short answer is, BOTH!
Knowledge is always a stronger position to be in, than ignorance.
But, it is a difficult time to wake up to that knowledge, when the future is subject to such great stresses and we need to take actions, now.
And, there are those who would prefer not to know or at least ask questions. |
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By: perceptions_now
8/08/2009
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U.S. Bank Failures Rise to 72 With Collapses in Florida, Oregon
Aug. 8 (Bloomberg) -- U.S. bank failures rose to 72 this year with the collapse of two lenders in Florida and one in Oregon amid the worst economic slump since the Great Depression.
Regulators are closing banks at the fastest pace in 17 years as losses mount from unpaid real-estate debt. The FDIC is offering to share losses with potential buyers, reviving a practice used during the U.S. savings-and-loan crisis in the late 1980s.
The FDIC, based in Washington, insures deposits at more than 8,200 institutions with $13.5 trillion in assets and reimburses customers for deposits of up to $250,000 when a bank fails.
Link -
http://www.bloomberg.com/apps/news?pid=20601087&si d=a3r00w0QCe64
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The assets referred to of $13.5 Trillion, are dubious, as they depend on the accounting "principles" used! |
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By: perceptions_now
8/08/2009
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Following is a graph of the Dow Jones index 1896-2009.
As can be seen, there are some interesting perspectives.
However, if you overlay the global population figures for the same period, you would find some very, very interesting correlations
Link -
http://i31.tinypic.com/qs62o7.gif |
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By: perceptions_now
9/08/2009
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U.S. Bank Failures Rise to 72 With Collapses in Florida, Oregon
Aug. 8 (Bloomberg) -- U.S. bank failures rose to 72 this year with the collapse of two lenders in Florida and one in Oregon amid the worst economic slump since the Great Depression.
Regulators shut First State Bank and Community National Bank, both based in Sarasota, Florida, and Community First Bank in Prineville, Oregon, the Federal Deposit Insurance Corp. said in statements yesterday. The FDIC was named receiver. Closing the lenders, with combined assets of $769 million and deposits of $662 million, will cost the deposit insurance fund about $185 million.
Regulators are closing banks at the fastest pace in 17 years as losses mount from unpaid real-estate debt. The FDIC is offering to share losses with potential buyers, reviving a practice used during the U.S. savings-and-loan crisis in the late 1980s.
The FDIC, based in Washington, insures deposits at more than 8,200 institutions with $13.5 trillion in assets and reimburses customers for deposits of up to $250,000 when a bank fails. This year's failures have cost the insurance fund more than $15 billion.
Link -
http://www.bloomberg.com/apps/news?pid=newsarchive &sid=a3r00w0QCe64
==================== |
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By: perceptions_now
9/08/2009
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Peak Oil for Dummies
In the 2008 World Energy Outlook (WEO), they have analysed about 800 fields, which account for ¾ of global reserves and more than 2/3 of global oil production [13].
They come to the conclusion that decline rates are far higher than previously thought, between 6.7 and 8.6% a year [14].
As result, they now estimate that to maintain the current levels of oil production by 2030 the world would need to develop and produce 45 MBD; as said by Dr. Birol, approximately four new Saudi-Arabias [15].
The latest annual report on geopolitical prospective from the US Joint Forces Command reached the stunning conclusion that:
By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD… The implications for future conflict are ominous...[22]
At this pace, global oil production could decline by 50% from its current level, as soon as 2030 [23].
There is no easy, present, solution to the crisis. Alternatives to oil are still far from being a feasible replacement; hydrogen for example would require 30 to 50 years to replace oil economies [35].
Meanwhile, the automobile industry is now planning to develop electric cars in the near future. While the first electric cars are expected to come on line in 2010-12, in order to replace 50% of the car fleet, the world would need between 10 to 20 years [36].
Besides, as manufacturing a single car requires at least 20 barrels of oil [37], once oil production starts to decline, in 2011-2013[38], it will increasingly become difficult to develop the electric car on a massive scale.
In fact, the closer we get to Peak Oil, the more difficult a massive and costly emergency plan to develop alternative energies will become.
Part 1 link -
http://seekingalpha.com/article/154901-peak-oil-fo r-dummies |
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By: andreihicks
9/08/2009
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Whilst I have not officially started my new job and won't til Sept 1st - I must say the nature of exploration going on in Oil and Gas currently has taken me by surprise.
Do you realise that we are still to explore over 70% of the world for oil & gas reserves?
We have also developed techniques now which allow us to map and cover huge parts of the ocean floor without ever drilling a single hole?
Peak oil could well be a mythical theory. |
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By: perceptions_now
9/08/2009
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The Industrial Civilisation at a Turning Point
The price of houses will collapse. Stock markets will crash. Within a short period, human wealth -- little more than a pile of paper at the best of times, even with the confidence about the future high among traders -- will shrivel. There will be emergency summits, diplomatic initiatives, urgent exploration efforts, but the turmoil will not subside. Thousands of companies will go bankrupt, and millions will be unemployed… The earth has always been a dangerous place, but now it will become a tinderbox.
I think we are facing an oil price shock, 100 or 200 dollars a barrel, an economic recession that cuts demand, and I will not be at all surprised if a fall in demand would make the price collapse again. So we might be back to 20 or 30 dollars a barrel next year perhaps. And so you have a price shock, a recession, a recovery, hits again the falling capacity limit, another price shock. And so I think that in the next few years, we have a sequence of vicious circles and gradually the reality of the situation will filtered through. We are on for a very volatile few years with enormous economic consequences. [43]
The world is at the beginning of a structural change of its economic system. This change will be triggered by declining fossil fuel supplies and will influence almost all aspects of our daily life... The now beginning transition period probably has its own rules which are valid only during this phase. Things might happen which we never experienced before and which we may never experience again once this transition period has ended. [47]
The end-of-the-fossil-hydroca rbons scenario is not a doom-and-gloom picture painted by pessimistic end-of-the-world prophets, but a view of scarcity in the coming years and decades that must be taken seriously.
Part 2 link -
http://seekingalpha.com/article/154901-peak-oil-fo r-dummies |
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By: perceptions_now
9/08/2009
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"Peak oil could well be a mythical theory."
Andrei,
Was that tactic 007?
You really do need to brush up on the subject matter! |
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By: perceptions_now
10/08/2009
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| PS - Actually reading some of the available information, would help? |
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By: lkarnd99
10/08/2009
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A lengthy article that looks in depth at all aspects of the current economic crisis, and the other economic bubbles still to be experienced..
=====
Entering the Greatest Depression in History
More Bubbles Waiting to Burst
by Andrew Gavin Marshall August 7, 2009
http://www.globalresearch.ca/index.php?context=vie wArticle&code=MAR20090807&articleId=14680
Introduction
While there is much talk of a recovery on the horizon, commentators are forgetting some crucial aspects of the financial crisis.
The crisis is not simply composed of one bubble, the housing real estate bubble, which has already burst. The crisis has many bubbles, all of which dwarf the housing bubble burst of 2008.
Indicators show that the next possible burst is the commercial real estate bubble. However, the main event on the horizon is the "bailout bubble" and the general world debt bubble, which will plunge the world into a Great Depression the likes of which have never before been seen.
Housing Crash Still Not Over
The housing real estate market, despite numbers indicating an upward trend, is still in trouble, as, "Houses are taking months to sell. Many buyers are having trouble getting financing as lenders and appraisers struggle to figure out what houses are really worth in the wake of the collapse."
Further, "the overall market remains very soft [...] aside from speculators and first-time buyers." Dean Baker, co-director of the Center for Economic and Policy Research in Washington said, "It would be wrong to imagine that we have hit a turning point in the market," as "There is still an enormous oversupply of housing, which means that the direction of house prices will almost certainly continue to be downward."
Foreclosures are still rising in many states "such as Nevada, Georgia and Utah, and economists say rising unemployment may push foreclosures higher into next year." Clearly, the housing crisis is still not at an end.[1]
..cont |
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Economic Downturn to Continue? |
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